UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
[ X ]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 27, 2015
 
OR
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 

Commission File No. 001-36230  
Tribune Publishing Company
(Exact name of registrant as specified in its charter) 
Delaware
 
38-3919441
(State or other jurisdiction
of incorporation or organization)
 
(I.R.S. employer
identification no.)
 
 
 
435 North Michigan Avenue
 
 
Chicago Illinois
 
60611
(Address of principal executive offices)
 
(Zip code)
Registrant’s telephone number, including area code: (312) 222-9100
 
Former name, former address and former fiscal year, if changed since last report.
None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  X   No 
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate 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   

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer ____
 
Accelerated filer ____
Non-accelerated filer    X    
 
Smaller reporting company ____
 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes __  No  X
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class
 
Outstanding at November 6, 2015
Common Stock, $0.01 par value
 
26,232,281





 
 
TRIBUNE PUBLISHING COMPANY
 
 
 
 
FORM 10-Q
 
 
 
 
TABLE OF CONTENTS
 
 
 
 
 
 
Page
 
 
 
 
 
PART I
 
 
 
 
 
 
 
 
Item 1.
 
 
 
 
 
 
 
Item 2.
 
 
 
 
 
 
 
Item 3.
 
 
 
 
 
 
 
Item 4.
 
 
 
 
 
 
 
PART II
 
 
 
 
 
 
 
Item 1.
 
 
 
 
 
 
 
Item 1A.
 
 
 
 
 
 
 
Item 2.
 
 
 
 
 
 
 
Item 3.
 
 
 
 
 
 
 
Item 4.
 
 
 
 
 
 
 
Item 5.
 
 
 
 
 
 
 
Item 6.
 
 
 
 
 
 
 
 
 
 

1



CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
The statements contained in this Quarterly Report on Form 10-Q, as well as the information contained in the notes to our Consolidated and Combined Financial Statements, include certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are based largely on our current expectations and reflect various estimates and assumptions by us. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in such forward-looking statements. Such risks, trends and uncertainties, which in some instances are beyond our control, include: competition and other economic conditions including fragmentation of the media landscape and competition from other media alternatives; changes in advertising demand, circulation levels and audience shares; our ability to develop and grow our online businesses; our reliance on revenue from printing and distributing third-party publications; macroeconomic trends and conditions; our ability to adapt to technological changes; our ability to realize benefits or synergies from acquisitions or divestitures or to operate our businesses effectively following acquisitions or divestitures; our success in implementing expense mitigation efforts; our ability to attract and retain employees; changes in newsprint prices; our reliance on third-party vendors for various services; adverse results from litigation, governmental investigations or tax-related proceedings or audits; our ability to satisfy pension and other postretirement employee benefit obligations; changes in accounting standards; the effect of labor strikes, lockouts and labor negotiations; regulatory and judicial rulings; our indebtedness and ability to comply with debt covenants applicable to our debt facilities; our adoption of fresh-start reporting which has caused our Consolidated and Combined Financial Statements for periods subsequent to December 31, 2012 to not be comparable to prior periods; 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; and other events beyond our control that may result in unexpected adverse operating results. For more information about these and other risks, see “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 25, 2015, in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 12, 2015, and in our other filings with the Securities and Exchange Commission.
The words “believe,” “expect,” “anticipate,” “estimate,” “could,” “should,” “intend,” “may,” “plan,” “seek” and similar expressions generally identify forward-looking statements. However, such words are not the exclusive means for identifying forward-looking statements, and their absence does not mean that the statement is not forward looking. Whether or not any such forward-looking statements are, in fact, achieved will depend on future events, some of which are beyond our control. Readers are cautioned not to place undue reliance on such forward-looking statements, which are being made as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

2



PART I.
Item 1.    Financial Statements
TRIBUNE PUBLISHING COMPANY
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME (LOSS)
(In thousands, except per share data)
(Unaudited)
 
 
Three months ended
 
Nine months ended
 
 
September 27,
2015
 
September 28,
2014
 
September 27,
2015
 
September 28,
2014
Operating revenues:
 
 
 
 
 
 
 
 
Advertising
 
$
219,772

 
$
220,842

 
$
665,142

 
$
696,008

Circulation
 
119,979

 
107,511

 
344,288

 
323,828

Other
 
64,582

 
75,704

 
201,564

 
230,666

Total operating revenues
 
404,333

 
404,057

 
1,210,994

 
1,250,502

 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
Compensation
 
157,783

 
150,762

 
463,398

 
435,413

Circulation and distribution
 
71,197

 
71,408

 
206,545

 
218,340

Newsprint and ink
 
29,096

 
32,839

 
91,835

 
103,836

Other operating expenses
 
139,522

 
134,386

 
394,110

 
423,608

Depreciation
 
11,346

 
8,002

 
33,105

 
13,636

Amortization
 
2,957

 
2,143

 
7,056

 
5,370

Total operating expenses
 
411,901

 
399,540

 
1,196,049

 
1,200,203

 
 
 
 
 
 
 
 
 
Income from operations
 
(7,568
)
 
4,517

 
14,945

 
50,299

Loss on equity investments, net
 
(535
)
 
(201
)
 
(542
)
 
(830
)
Gain on investment transaction
 
—

 
—

 
—

 
1,484

Interest expense, net
 
(6,923
)
 
(3,783
)
 
(19,121
)
 
(3,838
)
Reorganization items, net
 
80

 
(205
)
 
(773
)
 
(214
)
Income (loss) before income taxes
 
(14,946
)
 
328

 
(5,491
)
 
46,901

Income tax expense (benefit)
 
(6,345
)
 
484

 
(2,803
)
 
20,082

Net income (loss)
 
$
(8,601
)
 
$
(156
)
 
$
(2,688
)
 
$
26,819

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) per common share:
 
 
 
 
 
 
 
 
Basic
 
$
(0.33
)
 
$
(0.01
)
 
$
(0.10
)
 
$
1.05

Diluted
 
$
(0.33
)
 
$
(0.01
)
 
$
(0.10
)
 
$
1.05

 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
26,321

 
25,430

 
25,908

 
25,426

Diluted
 
26,321

 
25,430

 
25,908

 
25,465

 
 
 
 
 
 
 
 
 
Dividends declared per common share:
 
$
0.175

 
$
—

 
$
0.525

 
$
—



The accompanying notes are an integral part of these unaudited consolidated and combined financial statements.

3



TRIBUNE PUBLISHING COMPANY
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
 
 
Three months ended
 
Nine months ended
 
 
September 27,
2015
 
September 28,
2014
 
September 27,
2015
 
September 28,
2014
Net income (loss)
 
$
(8,601
)
 
$
(156
)
 
$
(2,688
)
 
$
26,819

Other comprehensive income (loss), net of taxes:
 
 
 
 
 
 
 
 
Unrecognized benefit plan gains (losses):
 
 
 
 
 
 
 
 
Amortization of actuarial gains during the period, net of tax (expense) benefit of $518, ($2,226), $1,323 and ($1,360), respectively
 
(792
)
 
3,719

 
(2,026
)
 
2,393

Foreign currency translation
 
26

 
—

 
(13
)
 
—

Other comprehensive income (loss), net of taxes
 
(766
)
 
3,719

 
(2,039
)
 
2,393

Comprehensive income (loss)
 
$
(9,367
)
 
$
3,563

 
$
(4,727
)
 
$
29,212




The accompanying notes are an integral part of these unaudited consolidated and combined financial statements.

4


TRIBUNE PUBLISHING COMPANY
CONSOLIDATED AND COMBINED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)

 
 
September 27,
2015
 
December 28, 2014
Assets
 
 
 
 
Current assets
 
 
 
 
Cash
 
$
54,651

 
$
36,675

Accounts receivable (net of allowances of $16,293 and $16,664)
 
208,886

 
234,812

Inventories
 
13,655

 
16,651

Deferred income taxes
 
35,733

 
38,207

Prepaid expenses and other
 
18,935

 
26,593

Total current assets
 
331,860

 
352,938


 
 
 
 
Property, plant and equipment
 
 
 
 
Machinery, equipment and furniture
 
236,408

 
210,217

Buildings and leasehold improvements
 
7,206

 
6,434

 
 
243,614

 
216,651

Accumulated depreciation
 
(100,357
)
 
(68,076
)
 
 
143,257

 
148,575

Advance payments on property, plant and equipment
 
7,066

 
13,770

Property, plant and equipment, net
 
150,323

 
162,345

 
 
 
 
 
Other assets
 
 
 
 
Goodwill
 
127,428

 
41,669

Intangible assets, net
 
149,169

 
87,272

Investments
 
3,621

 
3,370

Deferred income taxes
 
38,084

 
—

Restricted cash
 
17,001

 
27,505

Debt issuance costs and other long-term assets
 
25,609

 
11,416

Total other assets
 
360,912

 
171,232

 
 
 
 
 
Total assets
 
$
843,095

 
$
686,515

 
 
 
 
 

The accompanying notes are an integral part of these unaudited consolidated and combined financial statements.

5


TRIBUNE PUBLISHING COMPANY
CONSOLIDATED AND COMBINED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)

 
 
September 27,
2015
 
December 28, 2014
Liabilities and stockholders' equity
 
 
 
 
Current liabilities
 
 
 
 
Current portion of long-term debt
 
$
21,800

 
$
17,911

Accounts payable
 
73,605

 
81,567

Employee compensation and benefits
 
90,704

 
101,071

Deferred revenue
 
79,901

 
73,004

Other current liabilities
 
37,158

 
32,435

Total current liabilities
 
303,168

 
305,988

 
 
 
 
 
Non-current liabilities
 
 
 
 
Long-term debt
 
381,946

 
329,613

Deferred revenue
 
7,417

 
8,775

Pension and postretirement benefits payable
 
127,165

 
27,672

Other obligations
 
22,293

 
8,298

Total non-current liabilities
 
538,821

 
374,358

 
 
 
 
 
Stockholders' equity
 
 
 
 
Preferred stock, $.01 par value. Authorized 30,000 shares; no shares issued or outstanding at September 27, 2015 and December 28, 2014
 
—

 
—

Common stock, $.01 par value. Authorized 300,000 shares, 26,353 shares issued and 26,232 shares outstanding at September 27, 2015; 25,444 shares issued and outstanding at December 28, 2014
 
264

 
254

Additional paid-in capital
 
17,576

 
2,370

Accumulated deficit
 
(23,809
)
 
(6,937
)
Accumulated other comprehensive income
 
8,443

 
10,482

Treasury stock, at cost - 121 shares at September 27, 2015
 
(1,368
)
 
—

Total stockholders' equity
 
1,106

 
6,169

 
 
 
 
 
Total liabilities and stockholders' equity
 
$
843,095

 
$
686,515


The accompanying notes are an integral part of these unaudited consolidated and combined financial statements.

6



TRIBUNE PUBLISHING COMPANY
CONSOLIDATED AND COMBINED STATEMENT OF EQUITY (DEFICIT)
(In thousands, except share data)
(Unaudited)

 
 
Common Stock
 
Additional Paid in
 
Accumulated
 
Accumulated Other Comprehensive
 
Treasury
 
Total Equity
 
 
Shares
 
Amount
 
Capital
 
Deficit
 
Income (Loss)
 
Stock
 
(Deficit)
Balance at December 28, 2014
 
25,444,057

 
$
254

 
$
2,370

 
$
(6,937
)
 
$
10,482

 
—

 
$
6,169

Comprehensive income (loss)
 
—

 
—

 
—

 
(2,688
)
 
(2,039
)
 
—

 
(4,727
)
Issuance of stock for acquisition
 
700,869

 
7

 
11,032

 
—

 
—

 
—

 
11,039

Dividends declared to common stockholders
 
—

 
—

 
—

 
(14,184
)
 
—

 
—

 
(14,184
)
Issuance of stock from restricted stock unit conversions
 
188,486

 
3

 
(3
)
 
—

 
—

 
—

 
—

Exercise of stock options
 
20,037

 
—

 
281

 
—

 
—

 
—

 
281

Excess tax benefit from long-term incentive plan
 
—

 
—

 
672

 
—

 
—

 
—

 
672

Share-based compensation
 
—

 
—

 
5,060

 
—

 
—

 
—

 
5,060

Purchase of treasury stock
 
—

 
—

 
—

 
—

 
—

 
(1,368
)
 
(1,368
)
Withholding for taxes on restricted stock unit conversions
 
—

 
—

 
(1,836
)
 
—

 
—

 
—

 
(1,836
)
Balance at September 27, 2015
 
26,353,449

 
$
264

 
$
17,576

 
$
(23,809
)
 
$
8,443

 
$
(1,368
)
 
$
1,106




The accompanying notes are an integral part of these unaudited consolidated and combined financial statements.

7



TRIBUNE PUBLISHING COMPANY
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

 
 
Nine Months Ended
 
 
September 27,
2015
 
September 28,
2014
Operating Activities
 
 
 
 
Net income
 
$
(2,688
)
 
$
26,819

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation
 
33,105

 
13,636

Amortization of intangible assets
 
7,056

 
5,370

Amortization of contract intangible liabilities
 
(88
)
 
(112
)
Allowance for bad debt
 
6,178

 
12,714

Stock compensation expense
 
5,060

 
—

Withholding for taxes on RSU vesting
 
(1,836
)
 
—

Loss on equity investments, net
 
542

 
830

(Gain) loss on fixed asset sales
 
95

 
(1,226
)
Gain on investment transaction
 
—

 
(1,484
)
Gain on postretirement plan amendment
 
(7,799
)
 
—

Changes in working capital items, excluding acquisitions:
 
 
 
 
Accounts receivable, net
 
42,878

 
49,121

Prepaid expenses, inventories and other current assets
 
12,919

 
(9,356
)
Accounts payable, employee compensation and benefits, deferred revenue and other current liabilities
 
(37,627
)
 
12,747

Non-current deferred revenue
 
(1,358
)
 
7,352

Deferred income taxes
 
6,986

 
9,459

Postretirement medical, life and other benefits
 
(3,776
)
 
(1,062
)
Other, net
 
1,680

 
1,102

Net cash provided by operating activities
 
61,327

 
125,910

 
 
 
 
 
Investing Activities
 
 
 
 
Capital expenditures
 
(27,487
)
 
(11,370
)
Acquisitions, net of cash acquired
 
(67,825
)
 
(32,282
)
Restricted cash
 
10,504

 
(27,500
)
Proceeds from sale of fixed assets
 
36

 
1,881

Investments in equity investments, net of distributions
 
(792
)
 
(2,009
)
Net cash used for investing activities
 
$
(85,564
)
 
$
(71,280
)
 
 
 
 
 
 
 
 
 
 
Continued

The accompanying notes are an integral part of these unaudited consolidated and combined financial statements.

8



TRIBUNE PUBLISHING COMPANY
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (continued)
(In thousands)
(Unaudited)

 
 
Nine Months Ended
 
 
September 27,
2015
 
September 28,
2014
Financing Activities
 
 
 
 
Proceeds from issuance of debt
 
$
68,950

 
$
346,500

Purchase of treasury stock
 
(1,368
)
 
—

Payment of debt issuance costs
 
(2,741
)
 
(10,179
)
Repayment of long-term debt
 
(14,433
)
 
—

Net proceeds from revolving debt
 
10,000

 
—

Repayment of revolving debt
 
(10,000
)
 
—

Related party dividends
 
—

 
(275,000
)
Dividends paid to common stockholders
 
(9,148
)
 
—

Proceeds from exercise of stock options
 
281

 
182

Excess tax benefits realized from exercise of stock-based awards
 
672

 
—

Transactions with Tribune Media Company, net
 
—

 
(66,180
)
Net cash provided by financing activities
 
42,213

 
(4,677
)
 
 
 
 
 
Net increase in cash
 
17,976

 
49,953

Cash, beginning of period
 
36,675

 
9,694

Cash, end of period
 
$
54,651

 
$
59,647




The accompanying notes are an integral part of these unaudited consolidated and combined financial statements.

9

TRIBUNE PUBLISHING COMPANY
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Unaudited)



NOTE 1: DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Description of Business —Tribune Publishing Company and its subsidiaries (collectively, the “Company” or “Tribune Publishing”) is a multiplatform media and marketing solutions company that delivers innovative experiences for audiences and advertisers. The Company's diverse portfolio of iconic news and information brands includes award-winning daily and weekly titles, digital properties and verticals in major markets across the country. Tribune Publishing’s media groups include the Chicago Tribune Media Group, the California News Group, the Sun Sentinel Media Group, the Orlando Sentinel Media Group, The Baltimore Sun Media Group, the Hartford Courant Media Group, the Morning Call Media Group and the Daily Press Media Group. In May 2015, the Company acquired The San Diego Union-Tribune newspaper (f/k/a the U-T San Diego ) and nine community weeklies and related digital properties in San Diego County. These properties, along with the Los Angeles Times and its related properties, form the California News Group. See Note 5 for additional information on the acquisition.
Fiscal Periods —The Company's fiscal year ends on the last Sunday in December. Fiscal year 2015 ends on December 27, 2015 and fiscal year 2014 ended on December 28, 2014, both 52-week years with 13 weeks in each quarter.
Separation from Tribune Media Company —On August 4, 2014 (the “Distribution Date”), Tribune Media Company, formerly Tribune Company (“TCO”), completed the spin-off of its principal publishing operations into Tribune Publishing, by distributing 98.5% of the common stock of Tribune Publishing to holders of TCO common stock and warrants. In the distribution, each holder of TCO's Class A common stock, Class B common stock and warrants received 0.25 of a share of Tribune Publishing's common stock for each share of TCO common stock or TCO warrant held as of July 28, 2014 (the “Record Date”). Based on the number of shares of TCO common stock and TCO warrants outstanding as of the Record Date and the distribution ratio, 25,042,263 shares of Tribune Publishing common stock were distributed to the TCO stockholders and holders of TCO warrants and TCO retained 381,354 shares of Tribune Publishing common stock, representing 1.5% of the outstanding common stock of Tribune Publishing. On August 5, 2014, Tribune Publishing became a separate publicly-traded company with its own board of directors and senior management team. Shares of Tribune Publishing common stock are listed on the New York Stock Exchange under the symbol “TPUB.”
Basis of Presentation —T he accompanying unaudited Consolidated and Combined Financial Statements and notes of Tribune Publishing have been prepared in accordance with United States generally accepted accounting principles ( “U.S. GAAP ”). 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 unaudited Consolidated and Combined Financial Statements and accompanying notes. Actual results could differ from these estimates. In the opinion of management, the financial statements contain all adjustments necessary to present fairly the financial position of Tribune Publishing as of September 27, 2015 and December 28, 2014, the results of operations for the three and nine months ended September 27, 2015 and September 28, 2014 and the cash flows for the nine months ended September 27, 2015 and September 28, 2014 . Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Certain prior period amounts have been reclassified to conform to current period classifications. The year-end Consolidated and Combined Balance Sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP.
Prior to the Distribution Date, separate financial statements were not prepared for Tribune Publishing. The accompanying unaudited Consolidated and Combined Financial Statements for the periods presented prior to the Distribution Date were derived from the historical accounting records of TCO and present Tribune Publishing’s Consolidated and Combined financial position, results of operations and cash flows as of and for the periods presented as if Tribune Publishing was a separate entity through the Distribution Date. The costs of TCO services that are specifically identifiable to Tribune Publishing are included in these Consolidated and Combined Financial Statements. The costs of TCO services that are incurred by TCO but are not specifically identifiable to Tribune Publishing have been allocated to Tribune Publishing and are included in the pre-spin Consolidated and Combined Financial Statements on a basis that management considered to be a reasonable reflection of the utilization of services provided or the benefit received by Tribune Publishing during the periods presented. Management believes that assumptions and methodologies underlying the allocation of general corporate expenses are reasonable. However, such expenses prior to the Distribution Date may not be indicative of the actual level of expense that would have been incurred had Tribune Publishing operated as a separate stand-alone entity, and, accordingly, may not necessarily reflect Tribune Publishing’s consolidated financial position, results of operations and cash flows had Tribune

10

TRIBUNE PUBLISHING COMPANY
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Publishing operated as a stand-alone entity during the periods presented. See Note 4 for further information on costs allocated from TCO. Subsequent to the Distribution Date, Tribune Publishing's financial statements are presented on a consolidated basis as the Company became a separate consolidated entity.
All intercompany accounts within Tribune Publishing have been eliminated in consolidation. For periods prior to the Distribution Date, all significant intercompany transactions between Tribune Publishing and TCO have been included within the Consolidated and Combined Financial Statements and are considered to be effectively settled through equity contributions or distributions or through cash payments at the time the transactions were recorded. These intercompany transactions are further described in Note 4 . The total net effect of these intercompany transactions prior to the Distribution Date are reflected in the Consolidated and Combined Statements of Cash Flows as financing activities .
T ribune Publishing assesses its operating segments in accordance with ASC Topic 280, “Segment Reporting.” Tribune Publishing is managed by its chief operating decision maker, as defined by ASC Topic 280, as one business. Accordingly, the financial statements of Tribune Publishing are presented to reflect one reportable segment.
New Accounting Standards —In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-16, Topic 805, Simplifying the Accounting for Measurement-Period Adjustments , which provides guidance to entities that have provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period in which the combination occurs and during the measurement period have an adjustment to provisional amounts recognized. This ASU is effective for reporting periods beginning after December 15, 2015. The Company adopted ASU 2015-16 in the third quarter of 2015. The adoption of ASU 2015-16 has been immaterial to the Company's consolidated financial statements.
In July 2015, the FASB issued ASU 2015-11, Topic 330, Simplifying the Measurement of Inventory. This ASU requires an entity to measure inventory at the lower of cost or net realizable value, which consists of the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal, and transportation. This ASU is effective for reporting periods beginning after December 15, 2016. The guidance is to be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is evaluating the effect that adoption will have on its consolidated financial statements and the date on which to adopt the accounting standard.
In April 2015, the FASB issued ASU 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement , which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for a cloud computing arrangement as a service contract. This ASU is effective for reporting periods beginning after December 15, 2015. The Company will adopt the standard in the first quarter of 2016. The Company is evaluating the effect that adoption will have on its consolidated financial statements.
In April 2015, the FASB issued ASU -2015-03, Simplifying the Presentation of Debt Issuance Costs . This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU is effective for reporting periods beginning after December 15, 2015 and interim periods therein. It is to be applied retrospectively and early adoption is permitted. ASU 2015-03 affects presentation only and will have no effect on the Company's financial condition, results of operations or cash flows. The Company will adopt the standard in the first quarter 2016.
In May 2014, the FASB issued ASU 2014-09, Topic 606, Revenue from Contracts with Customers , concerning revenue recognition. The new standard supersedes a majority of existing revenue recognition guidance under U.S. GAAP, and requires a company to recognize revenue when it transfers goods or services to a customer in an amount that reflects the consideration to which a company expects to be entitled. Companies may need to use more judgment and make more estimates while recognizing revenue, which could result in additional disclosures to the financial statements. ASU 2014-09 allows for either a “full retrospective” adoption or a “modified retrospective” adoption. In August 2015, the FASB issued ASU 2015-14 to defer the effective date of ASU 2014-09 to reporting periods beginning after December 15, 2017 and to permit companies to voluntarily adopt the new standard as of the original effective date. The Company expects to adopt this standard on January 1, 2018. The Company is currently evaluating the revenue recognition impact this guidance will have once implemented and the implementation approach to be used.

11

TRIBUNE PUBLISHING COMPANY
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)


NOTE 2: PROCEEDINGS UNDER CHAPTER 11
Chapter 11 Reorganization —On December 8, 2008, TCO and 110 of its direct and indirect wholly-owned subsidiaries (each a “Debtor” and, collectively, the “Debtors”), filed voluntary petitions for relief under Chapter 11 (“Chapter 11”) of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). A joint plan of reorganization for the Debtors (the “Plan”) became effective and the Debtors emerged from Chapter 11 on December 31, 2012 (the “Effective Date”). Certain of the legal entities included in the Consolidated and Combined Financial Statements of Tribune Publishing were Debtors or, as a result of the restructuring transactions undertaken pursuant to the Plan, are successor legal entities to legal entities that were Debtors (collectively, the “Tribune Publishing Debtors”). On March 16, 2015, the Chapter 11 estates of 88 of the Debtors were closed by a final decree issued by the Bankruptcy Court. On July 24, 2015, the Chapter 11 estates of an additional 8 of the Debtors were closed by a final decree. The remainder of the Debtors’ Chapter 11 cases, including several of the Tribune Publishing Debtors’ cases, continue to be jointly administered under the caption “In re: Tribune Media Company, et al.,” Case No 08-13141.
On the Effective Date, substantially all of the Debtors’ prepetition liabilities at December 30, 2012 were settled or otherwise satisfied under the Plan. However, certain other claims have been or will be settled or otherwise satisfied subsequent to the Effective Date. Although the allowed amount of certain unresolved claims has not been determined, Tribune Publishing’s liabilities subject to compromise associated with these unresolved claims were discharged upon emergence from Chapter 11 in exchange for the treatment outlined in the Plan.
Reorganization Items, Net —Reorganization items, net, generally includes provisions and adjustments to reflect the carrying value of certain prepetition liabilities at their estimated allowable claim amounts and, pursuant to ASC Topic 852, “Reorganizations,” is reported separately in Tribune Publishing’s Consolidated and Combined Statements of Income. Reorganization items, net, may also include professional advisory fees and other costs directly associated with the Debtors’ Chapter 11 cases.
Specifically identifiable reorganization provisions, adjustments and other costs directly related to Tribune Publishing have been included in the Company’s Consolidated and Combined Statements of Income for the three and nine months ended September 27, 2015 and September 28, 2014 and consisted of the following (in thousands):
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 27, 2015
 
September 28, 2014
 
September 27, 2015
 
September 28, 2014
Reorganization costs, net:
 
 
 
 
 
 
 
 
Contract rejections and claim settlements
 
$
—

 
$
(205
)
 
$
(15
)
 
$
(212
)
Other, net
 
80

 
—

 
(758
)
 
(2
)
Total reorganization costs, net
 
$
80

 
$
(205
)
 
$
(773
)
 
$
(214
)
Tribune Publishing expects to incur certain expenses pertaining to the Chapter 11 proceedings throughout 2015 and potentially in future periods. These expenses are expected to consist primarily of other costs related to the implementation of the Plan and the resolution of unresolved claims.
NOTE 3: CHANGES IN OPERATIONS
Employee Reductions— Tribune Publishing identified reductions in its staffing levels of 24 and 298 in the three and nine months ended September 27, 2015 , respectively. Of the total reductions, 186 are related to the San Diego acquisition described in Note 5 as the Company has consolidated many of those positions into its current operating structure. In the three and nine months ended September 28, 2014 , the Company had identified reductions in staffing levels in its operations of 20 and 218 positions, respectively. Tribune Publishing recorded pretax charges related to these reductions of $2.8 million and $6.2 million for the three and nine months ended September 27, 2015 , respectively, and a pretax credit of $0.4 million and a pretax charge of $1.9 million for the three and nine months ended September 28, 2014 , respectively. A summary of the activity with respect to Tribune Publishing’s severance accrual for the nine months ended September 27, 2015 is as follows (in thousands):

12

TRIBUNE PUBLISHING COMPANY
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Balance at December 28, 2014
 
$
5,038

Provision
 
6,206

Payments
 
(8,163
)
Balance at September 27, 2015
 
$
3,081

Charges for severance and related expenses are included in compensation expense in the accompanying Consolidated and Combined Statements of Income. For the three and nine month periods ended September 28, 2014, the severance and related expenses above exclude severance and related expenses incurred by TCO and allocated to Tribune Publishing prior to the Distribution Date. As part of the separation and distribution of allocated charges from TCO, $0.6 million of accrued severance charges were transferred to Tribune Publishing. See Note 4 for further discussion of allocated charges from TCO.
NOTE 4 : RELATED PARTY TRANSACTIONS
In connection with the separation and distribution, Tribune Publishing entered into a transition services agreement (the “TSA”) and certain other agreements with TCO that govern the relationships between Tribune Publishing and TCO following the separation and distribution. Under the TSA, the providing company generally is allowed to fully recover all out-of-pocket costs and expenses it actually incurs in connection with providing the services, plus, in some cases, the allocated direct costs of providing the services, generally without profit. Pursuant to the TSA, TCO provides Tribune Publishing with certain services on a transitional basis. During the three and nine months ended September 27, 2015 , Tribune Publishing incurred $0.1 million and $0.7 million , respectively, in charges payable to TCO under the TSA. During the three and nine months ended September 28, 2014 , Tribune Publishing incurred $0.9 million in charges payable to TCO under the TSA. In addition, the TSA outlines the services that Tribune Publishing will provide TCO on a transitional basis. For the three and nine months ended September 27, 2015 , TCO's charges payable to Tribune Publishing were $0.1 million and $1.3 million , respectively, under the TSA. For the three and nine months ended September 28, 2014 , TCO's charges payable to Tribune Publishing were $1.2 million under the TSA.
Prior to the Distribution Date, Tribune Publishing participated in a number of corporate-wide programs administered by TCO. These included participation in TCO’s centralized treasury function, insurance programs, employee benefit programs, workers’ compensation programs, and centralized service centers and other corporate functions. The following is a discussion of the relationship with TCO, the services provided and how transactions with TCO have been accounted for in the Consolidated and Combined Financial Statements. Subsequent to the Distribution Date, any programs not governed by the TSA, as described above, are now administered by Tribune Publishing and are recorded directly to operating expenses.
Support Services Provided and Other Amounts with TCO —Prior to the Distribution Date, Tribune Publishing received allocated charges from TCO for certain corporate support services which were recorded within Tribune Publishing’s Consolidated and Combined Statements of Income. Management believes that the basis used for the allocations was reasonable and reflects the portion of such costs attributable to Tribune Publishing’s operations; however, the amounts may not be representative of the costs necessary for Tribune Publishing to operate as a separate stand-alone company. These allocated costs are summarized in the following table (in thousands):
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 28, 2014
 
September 28, 2014
Corporate management fee
 
$
3,851

 
$
21,871

Allocated depreciation
 
1,731

 
11,707

Service center support costs
 
10,108

 
53,492

Other
 
192

 
3,427

Total
 
$
15,882

 
$
90,497

Medical and Workers’ Compensation Benefit Plans — T ribune Publishing participated in TCO-sponsored employee benefit plans, including medical and workers’ compensation. Allocations of benefit plan costs varied by plan type and were based on actuarial valuations of cost and/or liability, premium amounts and payroll. Total benefit plan costs allocated to Tribune Publishing amounted to $4.1 million and $27.2 million in the three and nine months ended September

13

TRIBUNE PUBLISHING COMPANY
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)


28, 2014 , respectively, and were recorded in compensation expense in the Consolidated and Combined Statements of Income. While management believes the cost allocation methods utilized for the benefit plans were reasonable and reflected the portion of such costs attributed to Tribune Publishing, the amounts may not be representative of the costs necessary for Tribune Publishing to operate as a stand-alone business.
Defined Benefit Plans — Retirement benefits obligations pursuant to the TCO defined benefit pension plans have historically been and continue to be an obligation of TCO. Prior to the Distribution Date, costs related to TCO-sponsored pension plans, which totaled credits of $2.1 million and $12.5 million in the three and nine months ended September 28, 2014 , respectively, were based upon a specific allocation of actuarially determined service costs plus an allocation of the remaining net periodic pension cost components based upon Tribune Publishing's proportional share of the pension liability. Through the Distribution Date, TCO-sponsored pension plan credits and expenses allocated to Tribune Publishing are recorded in compensation expense in the Consolidated and Combined Statements of Income. Subsequent to the Distribution Date, no further costs or credits were allocated.
Defined Contribution Plans — Tribune Publishing’s employees have historically participated in various TCO qualified 401(k) savings plans, which permit eligible employees to make voluntary contributions on a pretax basis. The plans allowed participants to invest their savings in various investments. Amounts charged to expense by Tribune Publishing for employer contributions to TCO 401(k) savings plans totaled $1.3 million and $7.3 million in the three and nine months ended September 28, 2014 , respectively, and are recorded in compensation expense in the Consolidated and Combined Statements of Income.
Related Party Lease Agreements —In 2013, Tribune Publishing entered into related party lease agreements with TCO to lease certain land and buildings. The initial term of these non-cancelable related party lease agreements is either five or ten years, with two optional renewal terms. In connection with all related party lease agreements, Tribune Publishing recognized $8.4 million and $25.3 million of rent expense for the three and nine months ended September 27, 2015 , respectively, and $9.1 million and $28.2 million of rent expense for the three and nine months ended September 28, 2014 , respectively, recorded in other operating expense.
NOTE 5 : ACQUISITIONS
The San Diego Union-Tribune
On May 21, 2015 , the Company completed the acquisition of MLIM, LLC (“MLIM”), the indirect owner of The San Diego Union-Tribune (f/k/a the U-T San Diego ) and nine community weeklies and related digital properties in San Diego County, California, pursuant to the Membership Interest Purchase Agreement (the “Agreement”), dated May 7, 2015, among the Company, MLIM Holdings, LLC, the Papa Doug Trust under agreement dated January 11, 2010, Douglas F. Manchester and Douglas W. Manchester, and MLIM, as amended effective May 21, 2015. As of the closing of the transaction, the Company acquired 100% of the equity interests in MLIM.
The stated purchase price was $85 million , consisting of $73 million in cash, subject to a working capital adjustment, and $12 million in Tribune Publishing common stock. The Company financed the $73 million cash portion of the purchase price, less a $2 million preliminary working capital adjustment at close, with a combination of cash-on-hand and funds available under the Company's existing Senior ABL Facility, as defined in Note 10, as well as the net proceeds of the term loan increase as further described in Note 10 . In the three months ended September 27, 2015, the Company received the final working capital adjustment of $2.6 million in cash from the seller and the purchase price has been adjusted.
Prior to the closing of the acquisition, certain assets and liabilities of MLIM related to the business and the operation of The San Diego Union-Tribune , including real property used by the business, were distributed to the seller or its affiliates. Upon the close of the acquisition, MLIM became a wholly-owned subsidiary of the Company, and retained certain liabilities, including certain legal matters and its existing pension obligations, and entered into a lease to use certain real property from the seller.
The seller has provided the Company a full indemnity with respect to certain legal matters which were at various states of adjudication at the date of the acquisition. Inasmuch as such judgments represent a liability of the acquired entity which is subject to indemnification, the initial purchase price allocation reflects the assignment of $11.2 million to both the

14

TRIBUNE PUBLISHING COMPANY
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)


litigation judgment liability and the seller indemnification asset and is reflected in the Consolidated and Combined Balance Sheet as other long-term assets and other obligations.
In one such matter, a consolidated class action against a predecessor entity to MLIM which asserts various claims on behalf of home delivery newspaper carriers alleged to have been misclassified as independent contractors, the plaintiffs have been granted a judgment comprised of unreimbursed business expenses, interest and attorney's fees totaling approximately $10 million .
On the closing of the acquisition, the Company entered into a registration rights agreement with the seller, whereby the seller would be entitled to certain registration rights with respect to the shares of common stock of the Company acquired in connection with the Agreement. Pursuant to the registration rights agreement, the Company filed a registration statement on Form S-3 on August 12, 2015 to register the shares issued to the seller.
As part of the acquisition, the Company became the sponsor of a single-employer defined benefit plan, The San Diego Union-Tribune, LLC Retirement Plan (the “San Diego Plan”). The San Diego Plan provides benefits to certain current and former employees of The San Diego Union-Tribune. Future benefits under the plan have been frozen since January 31, 2009. As of September 27, 2015 , the estimated underfunded status of the San Diego Plan was $107.2 million which is based upon the January 4, 2015 actuarial determination completed by the seller, adjusted for current year pre-acquisition activity and contributions since the acquisition.
The allocation of the purchase price presented below is based upon management’s preliminary estimates. As of the filing date of this report, the determination of the fair value of the assets acquired and liabilities assumed and the funded status of the pension plan assumed have not been completed. The definite-lived intangible assets are expected to be amortized over a total weighted average period of nine years that includes a three to six year life for subscriber relationships, a three to eleven year life for advertiser relationships and a one year life for other customer relationships. The acquired property and equipment will be depreciated on a straight-line basis over its 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 non-contractual relationships, as well as expected future cost and revenue synergies. The entire amount of purchase price allocated to intangible assets and $23.9 million of goodwill will be deductible for tax purposes pursuant to Internal Revenue Code Section 197 over a 15 year period.

15

TRIBUNE PUBLISHING COMPANY
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)


At the acquisition date, the purchase price assigned to the acquired assets and assumed liabilities is as follows (in thousands):
Consideration for acquisition, less cash acquired and working capital adjustments
 
$
78,864

Less: Shares issued for acquisition
 
(11,039
)
Cash consideration for acquisition
 
$
67,825

 
 
 
Allocated Fair Value of Acquired Assets and Assumed Liabilities
 
 
Accounts receivable and other current assets
 
$
12,408

Property, plant and equipment
 
311

Intangible assets subject to amortization:
 
 
  Subscriber relationships (useful life of 3 to 6 years)
 
9,873

  Advertiser relationships (useful life of 3 to 11 years)
 
14,605

  Other customer relationships (useful life of 1 year)
 
529

Mastheads and intangible assets not subject to amortization
 
43,945

Deferred taxes
 
43,617

Other long-term assets
 
10,800

Accounts payable and other current liabilities
 
(21,875
)
Pension and postemployment benefits liability
 
(109,042
)
Other long-term liabilities
 
(12,066
)
Total identifiable net assets (liabilities)
 
(6,895
)
Goodwill
 
85,759

Total net assets acquired
 
$
78,864

The Company included the results of operations of MLIM in the Consolidated and Combined Financial Statements beginning on the closing date of the acquisition. For the three and nine months ended September 27, 2015 , the revenues from MLIM were $32.5 million and $47.1 million , respectively, and the total operating expenses were approximately $29.4 million and $44.3 million , respectively. The pro forma effect of the acquisition is not material to the Company’s Consolidated and Combined Financial Statements.
NOTE 6: INVENTORIES
Inventories consisted of the following (in thousands):
 
 
As of
 
 
September 27, 2015
 
December 28, 2014
Newsprint
 
$
13,092

 
$
16,174

Supplies and other
 
563

 
477

Total inventories
 
$
13,655

 
$
16,651

Inventories are stated at the lower of cost or market determined using the first-in, first-out (“FIFO”) basis for all inventories.

16

TRIBUNE PUBLISHING COMPANY
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)


NOTE 7: GOODWILL, OTHER INTANGIBLE ASSETS AND INTANGIBLE LIABILITIES
Goodwill, other intangible assets and intangible liabilities at September 27, 2015 and December 28, 2014 consisted of the following (in thousands):
 
 
September 27, 2015
 
December 28, 2014
 
 
Gross Amount
 
Accumulated Amortization
 
Net Amount
 
Gross Amount
 
Accumulated Amortization
 
Net Amount
Intangible assets subject to amortization
 
 
 
 
 
 
 
 
 
 
 
 
Subscribers (useful life of 2 to 10 years)
 
$
18,367

 
$
(3,416
)
 
$
14,951

 
$
8,494

 
$
(2,121
)
 
$
6,373

Advertiser relationships (useful life of 2 to 13 years)
 
42,971

 
(6,902
)
 
36,069

 
28,366

 
(4,596
)
 
23,770

Affiliate agreements (useful life of 4 years)
 
12,458

 
(8,473
)
 
3,985

 
11,929

 
(5,965
)
 
5,964

Tradenames (useful life of 20 years)
 
15,100

 
(875
)
 
14,225

 
15,100

 
(317
)
 
14,783

Other (useful life of 1 to 20 years)
 
5,541

 
(1,347
)
 
4,194

 
5,540

 
(958
)
 
4,582

Total intangible assets subject to amortization
 
$
94,437

 
$
(21,013
)
 
$
73,424

 
$
69,429

 
$
(13,957
)
 
$
55,472

 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill and other intangible assets not subject to amortization
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
 
 
 
 
127,428

 
 
 
 
 
41,669

Newspaper mastheads and other intangible assets not subject to amortization
 
 
 
 
 
75,745

 
 
 
 
 
31,800

Total goodwill and other intangible assets
 
 
 
 
 
$
276,597

 
 
 
 
 
$
128,941

 
 
 
 
 
 
 
 
 
 
 
 
 
Intangible liabilities subject to amortization
 
 
 
 
 
 
 
 
 
 
 
 
Unfavorable lease contracts
 
$
(1,746
)
 
$
447

 
$
(1,299
)
 
$
(570
)
 
$
359

 
$
(211
)
Total intangible liabilities subject to amortization
 
$
(1,746
)
 
$
447

 
$
(1,299
)
 
$
(570
)
 
$
359

 
$
(211
)
The changes in the carrying amounts of intangible assets subject to amortization during the nine months ended September 27, 2015 were as follows (in thousands):
Intangible assets subject to amortization
 
 
Balance at December 28, 2014
 
$
55,472

Acquisitions
 
25,008

Amortization
 
(7,056
)
Balance at September 27, 2015
 
$
73,424

The changes in the carrying amounts of goodwill and intangible assets not subject to amortization during the nine months ended September 27, 2015 were as follows (in thousands):
 
 
Goodwill
 
Other intangible assets not subject to amortization
Balance at December 28, 2014
 
$
41,669

 
$
31,800

Acquisitions
 
85,759

 
43,945

Balance at September 27, 2015
 
$
127,428

 
$
75,745


17

TRIBUNE PUBLISHING COMPANY
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)


NOTE 8: INVESTMENTS
Investments consist of equity method investments in private companies totaling $3.6 million and $3.4 million at September 27, 2015 and December 28, 2014 , respectively:
 
 
% Owned
Company
 
September 27, 2015
 
December 28, 2014
CIPS Marketing Group, Inc.
 
50
%
 
50
%
Homefinder.com, LLC
 
33
%
 
33
%
Contend, LLC
 
20
%
 
20
%
Jean Knows Cars, LLC
 
20
%
 
—

On January 8, 2015, the Company purchased a 20% interest in Jean Knows Cars, LLC for $0.5 million . Jean Knows Cars, LLC is a content creation company that develops and produces digital content relating to the car industry.
NOTE 9: FAIR VALUE MEASUREMENTS
Tribune Publishing measures and records in its Consolidated and Combined Financial Statements certain assets and liabilities at fair value. ASC Topic 820, “Fair Value Measurements and Disclosures,” establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and Tribune Publishing’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.
The carrying values of cash, trade accounts receivable and trade accounts payable approximated their respective fair values due to their short term to maturity.
NOTE 10 : DEBT
At September 27, 2015 , Tribune Publishing had $406.0 million in variable-rate debt outstanding under the Term Loan Credit Agreement, as defined below. The weighted average interest rate for the variable-rate debt is 5.75% . At September 27, 2015 , the fair value of the Term Loan Credit Agreement was estimated to be $387.7 million . The Company's Term Loan Credit Agreement's classification is determined based on Level 2 inputs, because the fair value for these instruments is determined using observable inputs in non-active markets. See below for details related to the Company's debt agreements.
Senior Term Facility
On May 21, 2015, the Company entered into a lender joinder agreement (“Joinder Agreement”) with Citicorp North America, Inc. (“Citi”) and JPMorgan Chase Bank, N.A. to partially finance the acquisition of The San Diego Union-Tribune . See Note 5. This Joinder Agreement expanded the borrowings under the Senior Term Facility, described below, by $70 million . This borrowing bears the same interest rate and has the same maturity date as the existing loans under the Senior Term Facility.

18

TRIBUNE PUBLISHING COMPANY
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)


On August 4, 2014, the Company entered into a credit agreement (as amended, amended and restated or supplemented, the “Term Loan Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (in such capacity, the “Term Collateral Agent”), and the lenders party thereto (the “Senior Term Facility”). The Senior Term Facility originally provided for secured loans (the “Term Loans”) in the aggregate principal amount of $350.0 million . The Term Loans bear interest at a variable interest rate based on either LIBOR or a base rate, in either case plus an applicable margin. The Term Loans amortize in equal quarterly installments equal to 1.25% of principal amounts borrowed against the Senior Term Facility with the balance payable on the maturity date, August 4, 2021. The Senior Term Facility initially provided that it could be expanded by an amount up to (i) the greater of $100.0 million and an amount as will not cause the net senior secured leverage ratio after giving effect to such incurrence to exceed 2 :1 plus (ii) an amount equal to all voluntary prepayments of the term loans borrowed under the Senior Term Facility, subject to certain conditions. As of September 27, 2015 , $70 million of the expansion had been drawn for the acquisition described previously. Tribune Publishing Company is the borrower under the Senior Term Facility and each of the Company’s wholly-owned domestic subsidiaries, subject to certain exceptions (the “Subsidiary Guarantors”), guarantee the payment obligations under the Senior Term Facility. The Senior Term Facility contains a number of covenants that, among other things, limit the ability of Tribune Publishing Company and its restricted subsidiaries to: incur more indebtedness; pay dividends; redeem stock or make other distributions in respect of equity; make investments; and certain other usual and customary covenants. As of September 27, 2015 , the outstanding balance under the Senior Term Facility is $406.0 million , the unamortized balance of the discount is $3.9 million and the Company was in compliance with the covenants of the Senior Term Facility.
Senior ABL Facility
On August 4, 2014, Tribune Publishing Company and the Subsidiary Guarantors entered into a credit agreement (the “ABL Credit Agreement”) with Bank of America, N.A., as administrative agent, collateral agent (in such capacity, the “ABL Collateral Agent”), swing line lender and letter of credit issuer and the lenders party thereto (the “Senior ABL Facility”). The Senior ABL Facility will mature on August 4, 2019. The Senior ABL Facility provides for senior secured revolving loans and letters of credit of up to a maximum aggregate principal amount of $140.0 million . Up to $75.0 million of availability under the Senior ABL Facility is available for letters of credit and up to $15.0 million of availability under the Senior ABL Facility is available for swing line loans. The Senior ABL Facility also permits Tribune Publishing Company to increase the commitments under the Senior ABL Facility by up to $75.0 million . The Senior ABL Facility bears interest at a variable interest rate based on either LIBOR or a base rate, in either case plus an applicable margin. Tribune Publishing Company and the Subsidiary Guarantors are the borrowers under the Senior ABL Facility. Tribune Publishing Company and the Subsidiary Guarantors guarantee the payment obligations under the Senior ABL Facility. The Senior ABL Facility contains a number of covenants that, among other things, limit the ability of Tribune Publishing Company and its restricted subsidiaries to: incur more indebtedness; pay dividends; redeem stock or make other distributions in respect of equity; make investments; and certain other usual and customary covenants. Customary fees are payable in respect of the Senior ABL Facility, including commitment fees of 0.25% and letter of credit fees. As of September 27, 2015 , $23.6 million of the Senior ABL Facility availability supported outstanding undrawn letters of credit in the same amount.
Letter of Credit Agreement
On August 4, 2014, Tribune Publishing Company and JPMorgan Chase Bank, N.A., as letter of credit issuer (the “L/C Issuer”) entered into a letter of credit agreement (the “Letter of Credit Agreement”). The Letter of Credit Agreement provides for the issuance of standby letters of credit of up to a maximum aggregate principal face of $30.0 million . The Letter of Credit Agreement permits Tribune Publishing Company, at the sole discretion of L/C Issuer, to request an increase of the amount available to be issued under the Letter of Credit Agreement up to an aggregate maximum face amount of $50.0 million . The Letter of Credit Agreement is scheduled to terminate on August 4, 2019.
During the quarter ended September 27, 2015, the Company's outstanding undrawn letter of credit was reduced from $27.5 million to $17.0 million . As a result, the cash collateral requirement associated with the letter of credit was reduced by, and the Company received, $10.5 million during the quarter from the cash collateral account. As of September 27, 2015 , the $17.0 million undrawn letter of credit was outstanding against the Letter of Credit Agreement. This letter of credit is collateralized with $17.0 million of cash held in a specified cash collateral account. The specified cash account is required to remain as long as the undrawn letter of credit remains outstanding and is recorded in restricted cash in the Consolidated and Combined Balance Sheets.

19

TRIBUNE PUBLISHING COMPANY
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)


NOTE 11: INCOME TAXES
For the three and nine months ended September 27, 2015 , Tribune Publishing recorded an income tax benefit of $6.3 million and $2.8 million , respectively. The effective tax rate on pretax income was 42.5% and 51.0% in the three and nine months ended September 27, 2015 , respectively. During the nine months ended September 27, 2015 , the Company increased the estimated deferred tax rate on net deferred tax assets from 39.5% to 40.0% which resulted in a decrease in the nine-month period income tax expense of $0.5 million . For the three and nine months ended September 27, 2015 , the rate differs from the U.S. federal statutory rate of 35% primarily due to state income taxes, net of federal benefit, non-deductible expenses and the domestic production activities deduction, as well as a change in the deferred tax rate that was applied to current and non-current deferred tax assets and liabilities. For the three and nine months ended September 28, 2014 , Tribune Publishing recorded income tax expense of $0.5 million and $20.1 million . The effective tax rate on pretax income was 147.6% and 42.8% in the three and nine months ended September 28, 2014 . This rate differs from the U.S. federal statutory rate of 35% due primarily to state income taxes, net of federal benefit, nondeductible expenses, certain transaction costs not fully deductible for tax purposes and the domestic production activities deduction.
NOTE 12: PENSION AND OTHER POSTRETIREMENT BENEFITS
Multiemployer Pension Plans —Tribune Publishing contributes to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover its union-represented employees. See Note 4 for the description of costs and credits related to TCO-sponsored pension plans.
Defined Benefit Plans —As part of the acquisition of The San Diego Union-Tribune , the Company became the sponsor of the San Diego Plan, a single-employer defined benefit plan. The San Diego Plan provides benefits to certain current and former employees of The San Diego Union-Tribune. Future benefits under the San Diego Plan have been frozen since January 31, 2009. The funded status of the San Diego Plan is being actuarially determined as of May 21, 2015, the closing date for The San Diego Union-Tribune acquisition, and that determination had not been completed as of the filing date of this report. As of September 27, 2015 , the estimated underfunded status of the San Diego Plan was $107.2 million . This estimate of the underfunded status of the plan is based upon the January 4, 2015 actuarially determined underfunded status of the San Diego Plan adjusted for the 2015 pre-acquisition activity recorded for the plan. As of January 4, 2015, the benefit obligation was $267.9 million and the fair value of the San Diego Plan's assets was $156.7 million . The Company contributed $1.8 million during the three months ended September 27, 2015 to the San Diego Plan and expects to contribute approximately $1.1 million to the San Diego Plan in the remainder of 2015. The net periodic benefit cost recorded subsequent to the acquisition was immaterial.
Postretirement Benefits Other Than Pensions —Prior to the Distribution Date, retirement benefits were provided to eligible employees of Tribune Publishing through defined benefit pension plans sponsored by TCO. Subsequent to the Distribution Date, Tribune Publishing provides postretirement health care and life insurance benefits to Tribune Publishing employees. There is some variation in the provisions of these plans, including different provisions for lifetime maximums, prescription drug coverage and certain other benefits. The components of net periodic benefit cost for Tribune Publishing were as follows (in thousands):
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 27, 2015
 
September 28, 2014
 
September 27, 2015
 
September 28, 2014
Service cost
 
$
65

 
$
99

 
$
197

 
$
275

Interest cost
 
164

 
461

 
555

 
1,277

Amortization of prior service credits
 
(701
)
 
—

 
(2,103
)
 
—

Amortization of gain
 
(609
)
 
(8
)
 
(1,245
)
 
(22
)
Net periodic benefit cost (credit)
 
(1,081
)
 
552

 
(2,596
)
 
1,530

Curtailment gain
 
—

 
—

 
(7,799
)
 
—

Net periodic benefit cost (credit) after curtailment gain
 
$
(1,081
)
 
$
552

 
$
(10,395
)
 
$
1,530

In the first quarter of 2015, Tribune Publishing notified plan members that the Company was no longer going to offer the life insurance benefit effective December 27, 2015. These life insurance modifications impact a grandfathered

20

TRIBUNE PUBLISHING COMPANY
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)


group of employees that were eligible for post-retirement life insurance benefits based on their employment date and certain employment qualifications. The impact of this plan modification was to reduce the postretirement medical, life and other benefits liability by $7.8 million and to recognize a gain of the same amount to compensation expense.
Expected Future Benefit Payments —Tribune Publishing expects to contribute $3.2 million to its other postretirement plans during 2015.
NOTE 13: STOCK-BASED COMPENSATION
The Tribune Publishing Company 2014 Omnibus Incentive Plan (the “Tribune Publishing Equity Plan”) provides for the granting of stock options, stock appreciation rights, restricted stock units (“RSU”), performance share units, restricted and unrestricted stock awards, dividend equivalents and cash awards. In the nine months ended September 27, 2015 , 464,892 options and 514,164 RSUs were granted under the Tribune Publishing Equity Plan. Stock-based compensation expense under the Tribune Publishing Equity Plan totaled $2.1 million and $5.1 million during the three and nine months ended September 27, 2015 , respectively.
Prior to the Distribution Date, stock-based compensation expense for participants in the TCO 2013 Equity Incentive Plan who were solely dedicated to Tribune Publishing has been included in compensation expense. Stock-based compensation expense related to Tribune Publishing employees under both plans totaled $0.9 million and $2.2 million for the three and nine months ended September 28, 2014 , respectively. Stock-based compensation expense for participants in the TCO 2013 Equity Incentive Plan who provided services to but were not solely dedicated to Tribune Publishing have been allocated to Tribune Publishing through the corporate management fee and service center support costs, as described in Note 4. In the three and nine months ended September 28, 2014 , the Company was allocated $0.8 million and $4.9 million , respectively, of stock-based compensation expense through the corporate management fee and service center support costs.
As of September 27, 2015 , the Company has $2.9 million of total unrecognized compensation costs related to unvested options, which is expected to be recognized over a weighted-average period of 2.82 years . Additionally, as of September 27, 2015 , the Company has $13.7 million of total unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of 2.61 years .
NOTE 14: EARNINGS PER SHARE
Basic earnings per common share is calculated by dividing net income attributable to Tribune Publishing common stockholders by the weighted average number of shares of common stock outstanding. Diluted earnings per common share is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of common shares under equity-based compensation plans, except where the inclusion of such common shares would have an anti-dilutive impact.

21

TRIBUNE PUBLISHING COMPANY
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)


For the three and nine months ended September 27, 2015 and September 28, 2014 , basic and diluted earnings per common share were as follows (in thousands, except per share amounts):
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 27, 2015
 
September 28, 2014
 
September 27, 2015
 
September 28, 2014
Income (Loss) - Numerator:
 
 
 
 
 
 
 
 
Net income (loss) available to Tribune Publishing stockholders plus assumed conversions
 
$
(8,601
)
 
$
(156
)
 
$
(2,688
)
 
$
26,819

 
 
 
 
 
 
 
 
 
Shares - Denominator:
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding (basic)
 
26,321

 
25,430

 
25,908

 
25,426

Dilutive effect of employee stock options and RSUs
 
—

 
—

 
—

 
39

Adjusted weighted average shares outstanding (diluted)
 
26,321

 
25,430

 
25,908

 
25,465

 
 
 
 
 
 
 
 
 
Net income (loss) per common share:
 
 
 
 
 
 
 
 
Basic
 
$
(0.33
)
 
$
(0.01
)
 
$
(0.10
)
 
$
1.05

Diluted
 
$
(0.33
)
 
$
(0.01
)
 
$
(0.10
)
 
$
1.05

Potential dilutive common shares were anti-dilutive as a result of the Company’s net loss for the three and nine months ended September 27, 2015 and the three months ended September 28, 2014 . As a result, basic weighted average shares were used in the calculations of basic net earnings per share and diluted earnings per share for those periods.
The number of stock options that were excluded from the computation of diluted earnings per share because their inclusion would result in an anti-dilutive effect on per share amounts was 1,023,033 for both the three and nine months ended September 27, 2015 . The number of RSUs that were excluded from the computation of diluted earnings per share because their inclusion would result in an anti-dilutive effect on per share amounts was 1,004,468 for both the three and nine months ended September 27, 2015 .
On August 4, 2014, approximately 25.4 million shares of the Company's common stock were distributed to TCO and TCO stockholders and warrant holders who held shares or warrants as of the record date of July 28, 2014. This share amount is being utilized for the calculation of both basic and diluted earnings per common share for all periods prior to the Distribution Date.
NOTE 15: STOCKHOLDERS' EQUITY
Dividends
On September 3, 2015, the Board of Directors of the Company declared a dividend of $0.175 per share on common stock outstanding, to be paid on October 29, 2015, to stockholders of record on October 1, 2015.
On August 14, 2015, the Company paid a dividend of $0.175 per share on common stock outstanding, to stockholders of record on July 15, 2015. On May 15, 2015, the Company paid a dividend of $0.175 per share on common stock outstanding, to stockholders of record on April 15, 2015.
Stock Repurchases
In August 2015, the Board of Directors authorized $30 million to be used for stock repurchases for 24 months from the date of authorization. Any stock repurchases under the stock repurchase plan may be made in the open market, through privately negotiated transactions or other means. The stock repurchase plan may be modified or discontinued at any time without prior notice. Repurchased shares become a part of treasury stock.

22

TRIBUNE PUBLISHING COMPANY
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)


During the three months ended September 27, 2015, the Company repurchased 121,168  shares of common stock for an aggregate purchase price of $1.4 million . The Company has $28.6 million remaining authorization under the stock repurchase plan at September 27, 2015.
NOTE 16: ACCUMULATED OTHER COMPREHENSIVE INCOME
The following table sets forth the components of accumulated other comprehensive income (loss), net of tax where applicable (in thousands):    
 
 
September 27, 2015
 
December 28, 2014
Accumulated other comprehensive income (loss), net of tax:
 
 
 
 
Pension and other postretirement costs
 
$
8,476

 
$
10,502

Foreign currency translation adjustments
 
(33
)
 
(20
)
Accumulated other comprehensive income (loss)
 
$
8,443

 
$
10,482

The following table presents the amounts and line items in the Consolidated and Combined Statements of Income where adjustments reclassified from accumulated other comprehensive income (loss) were recorded during the three and nine months ended September 27, 2015 and September 28, 2014 (in thousands):
 
 
Three Months Ended
 
Nine Months Ended
 
 
Accumulated Other Comprehensive Income (Loss) Components
 
September 27, 2015
 
September 28, 2014
 
September 27, 2015
 
September 28, 2014
 
Affected Line Items in the Consolidated and Combined Statements of Income
Pension and postretirement benefit adjustments:
 
 
 
 
 
 
 
 
 
 
Amortization of recognized actuarial gains
 
$
(1,310
)
 
$
5,945

 
$
(3,349
)
 
$
3,753

 
Compensation
Total before taxes
 
(1,310
)
 
5,945

 
(3,349
)
 
3,753

 
 
Tax effect
 
518

 
(2,226
)
 
1,323

 
(1,360
)
 
Income tax (expense) benefit
Total reclassifications for the period
 
$
(792
)
 
$
3,719

 
$
(2,026
)
 
$
2,393

 
 
NOTE 17: SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental cash flow information for each of the periods presented is as follows (in thousands):
 
 
Nine Months Ended
 
 
September 27,
2015
 
September 28,
2014
Cash paid during the period for:
 
 
 
 
Interest
 
$
16,710

 
$
1,398

Income taxes, net
 
13,829

 
12,970

Non-cash items in investing and financing activities:
 
 
 
 
Shares issued for acquisitions
 
11,039

 
—

Change in non-cash additions to construction in progress
 
(6,586
)
 
2,773


23

TRIBUNE PUBLISHING COMPANY
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)


NOTE 18: SUBSEQUENT EVENTS
On October 5, 2015, the Company offered an Employee Voluntary Separation Program (EVSP), which provides enhanced separation benefits to eligible non-union employees with more than one year of service.  The Company expects a net reduction in total headcount of approximately 7% as a result of this program.  The Company plans to fund the EVSP through salary continuation starting immediately and continuing through the first half of 2018. The Company expects the EVSP will result in a charge of approximately $55 million for all related severance, benefits and taxes. During the fourth quarter of 2015, the Company will record a charge estimated at $47 million related to the EVSP, partially offset by a non-cash gain for curtailment of post-retirement medical benefits, subject to the number of employees accepted into the EVSP. 
On November 4, 2015, the Company received an adverse jury verdict in an employment litigation matter that originated prior to the spin-off. Accordingly, for the three and nine-month periods ended September 27, 2015, the Company has recorded a $9.1 million litigation reserve for this matter, composed of $7.1 million for the judgment and $2.0 million for the estimated amount of legal fees and expenses. The Company plans to appeal the verdict.

24



Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(in thousands, except share and per share amounts)
T he following discussion and analysis should be read in conjunction with the other sections of this Quarterly Report on Form 10-Q, including the Company’s Consolidated and Combined Financial Statements and related Notes filed as part of this Quarterly Report, and “Cautionary Statement Concerning Forward-Looking Statements.” 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 Quarterly Report, as well as the factors described in our annual report on Form 10-K as filed with the SEC on March 25, 2015, particularly under Item 1A. “Risk Factors,” as supplemented in the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 12, 2015, particularly under Part II Item IA, and in the Company’s other filings with the SEC.
We believe that the assumptions underlying the Consolidated and Combined Financial Statements included in this Quarterly Report are reasonable. However, the Consolidated and Combined Financial Statements may not necessarily reflect our results of operations, financial position and cash flows for future periods or what they would have been had Tribune Publishing been a separate, stand-alone company during the prior year periods presented.
OVERVIEW
Tribune Publishing Company (collectively with its subsidiaries, the “ Company ” or “ Tribune Publishing ” ) was formed as a Delaware corporation on November 21, 2013. Tribune Publishing is a multiplatform media and marketing solutions company that delivers innovative experiences for audiences and advertisers. The Company's diverse portfolio of iconic news and information brands includes award-winning daily and weekly titles, digital properties and verticals in major markets across the country. Tribune Publishing’s media groups include the Chicago Tribune Media Group, the California News Group, the Sun Sentinel Media Group, the Orlando Sentinel Media Group, The Baltimore Sun Media Group, the Hartford Courant Media Group, the Morning Call Media Group and the Daily Press Media Group. In May 2015, the Company acquired The San Diego Union-Tribune newspaper (f/k/a the U-T San Diego ) and nine community weeklies and related digital properties in San Diego County. These properties, along with the Los Angeles Times and its related properties, form the California News Group. See below for more information regarding the acquisition of The San Diego Union-Tribune .
On August 4, 2014 (the “Distribution Date”), Tribune Media Company, formerly Tribune Company (“TCO”) completed the spin-off of its principal publishing operations into an independent company, Tribune Publishing, by distributing 98.5% of the outstanding shares of Tribune Publishing common stock to holders of TCO common stock and warrants (the “Distribution”). In the Distribution, each holder of TCO Class A common stock, Class B common stock and warrants received 0.25 of a share of Tribune Publishing common stock for each share of TCO common stock or TCO warrant held as of the record date of July 28, 2014. Based on the number of shares of TCO common stock and TCO warrants outstanding as of 5:00 P.M. Eastern time on July 28, 2014 and the distribution ratio, 25,042,263 shares of Tribune Publishing common stock were distributed to the TCO stockholders and holders of TCO warrants and TCO retained 381,354 shares of Tribune Publishing common stock, representing 1.5% of outstanding common stock of Tribune Publishing. Subsequent to the Distribution, Tribune Publishing became a separate publicly-traded company with its own board of directors and senior management team. Shares of Tribune Publishing common stock are listed on the New York Stock Exchange under the symbol “TPUB.” In connection with the spin-off, Tribune Publishing paid a $275.0 million cash dividend to TCO from a portion of the proceeds of a senior secured credit facility entered into by Tribune Publishing.
On May 21, 2015 , the Company completed the acquisition of MLIM, LLC (“MLIM”), the indirect owner of The San Diego Union-Tribune (f/k/a the U-T San Diego ) and nine community weeklies and related digital properties in San Diego County. The stated purchase price was $85 million, consisting of $73 million in cash, subject to a working capital adjustment, and $12 million in Tribune Publishing common stock. The Company financed the $73 million cash portion of the purchase price, less a $2 million preliminary working capital adjustment at close, with a combination of cash-on-hand, funds available under the Company's Senior ABL Facility, as well as the net proceeds under an expansion under the Senior Term Loan further described in Liquidity and Capital Resources below. On the closing of the transaction, the Company entered into a registration rights agreement with the seller, whereby the seller is entitled to certain registration rights with respect to the shares of common stock of the Company acquired in connection with the transaction. Pursuant to the registration rights agreement, the Company filed a registration statement on Form S-3 on August 12, 2015 to register the shares issued to the seller. In the three months ended September 27, 2015, the Company received the final working capital adjustment of $2.6 million in cash from the seller.

25



Prior to the closing, certain assets and liabilities of MLIM related to the business and the operation of The San Diego Union-Tribune , including real property used by the business, were distributed to the seller or its affiliates. Upon the close of the transaction, MLIM became a wholly-owned subsidiary of the Company, and retained certain liabilities, including certain indemnified legal matters and its existing pension obligations, and entered into a lease with the seller to use certain real property.
As part of the acquisition the Company became the sponsor of the single-employer defined benefit plan, The San Diego Union-Tribune LLC Retirement Plan (the “San Diego Plan”). The San Diego Plan provides benefits to certain current and former employees of The San Diego Union-Tribune. Future benefits under the plan have been frozen since January 31, 2009. As of September 27, 2015 , the estimated underfunded status of the San Diego Plan was $107.2 million which is based upon the January 4, 2015 actuarial determination completed by the seller, adjusted for current year pre-acquisition activity and contributions since the acquisition.
Products and Services
Our product mix consists of three publication types: (i) daily newspapers, (ii) weekly newspapers and (iii) niche publications. Most of these publications also have a digital presence. The key characteristics of each of these types of publications are summarized in the table below.
 
Daily Newspapers
Weekly Newspapers
Niche Publications
Cost:
Paid
Paid and free
Paid and free
Distribution:
Distributed four to seven days per week
Distributed one to three days per week
Distributed weekly, monthly or on an annual basis
Income:
Revenue from advertisers, subscribers, rack/box sales
Paid:  Revenue from advertising, subscribers, rack/box sales
Paid:  Revenue from advertising, rack/box sales
 
 
Free:  Advertising revenue only
Free:  Advertising revenue only
Digital presence:
Maintain locally oriented websites, mobile sites and mobile apps, for select locations
Major publications maintain locally oriented websites and mobile sites for select locations
Selectively available online
As of September 27, 2015, Tribune Publishing’s prominent publications include:
Media Group
 
City
 
Masthead
 
Circulation Type
 
Paid or Free
Chicago Tribune Media Group
 
 
 
 
 
 
Chicago, IL
 
Chicago Tribune
www.chicagotribune.com
 
Daily
 
Paid
 
 
Chicago, IL
 
Chicago Magazine
www.chicagomag.com
 
Monthly
 
Paid
 
 
Chicago, IL
 
Hoy
www.vivelohoy.com
 
Daily
 
Free
 
 
Chicago, IL
 
Redeye
www.redeyechicago.com
 
Daily
 
Free
 
 
 
 
 
 
 
 
 
California News Group
 
 
 
 
 
 
Los Angeles, CA
 
Los Angeles Times
www.latimes.com
 
Daily
 
Paid
 
 
Los Angeles, CA
 
Hoy Los Angeles www.hoylosangeles.com
 
Weekly
 
Free
 
 
San Diego, CA
 
The San Diego Union-Tribune www.sandiegouniontribune.com
 
Daily
 
Paid

26



Media Group
 
City
 
Masthead
 
Circulation Type
 
Paid or Free
Sun Sentinel Media Group
 
 
 
 
 
 
Broward County, FL, Palm Beach County, FL
 
Sun Sentinel
www.SunSentinel.com
 
Daily
 
Paid
 
 
Broward County, FL, Palm Beach County, FL
 
el Sentinel
www.ElSentinel.com
 
Weekly
 
Free
Orlando Sentinel Media Group
 
 
 
 
 
 
Orlando, FL
 
Orlando Sentinel
www.OrlandoSentinel.com
 
Daily
 
Paid
 
 
Orlando, FL
 
el Sentinel
www.ElSentinel.com
 
Weekly
 
Free
The Baltimore Sun Media Group
 
 
 
 
 
 
Baltimore, MD
 
The Baltimore Sun
www.baltimoresun.com
 
Daily
 
Paid
 
 
Annapolis, MD
 
The Capital
www.capitalgazette.com
 
Daily
 
Paid
 
 
Westminster, MD
 
Carroll County Times
www.carrollcountytimes.com
 
Daily
 
Paid
Hartford Courant Media Group
 
 
 
 
 
 
Hartford County, CT, Middlesex County, CT, Tolland County, CT
 
The Hartford Courant
www.courant.com
 
Daily
 
Paid
Daily Press Media Group
 
 
 
 
 
 
Newport News, VA (Peninsula)
 
Daily Press
www.dailypress.com
 
Daily
 
Paid
The Morning Call Media Group
 
 
 
 
 
 
Lehigh Valley, PA
 
The Morning Call
www.themorningcall.com
 
Daily
 
Paid
ForSaleByOwner.com is a national consumer-to-consumer focused real estate website. The site has been the largest “by owner” website in the country since 1999. The majority of the revenue generated by ForSaleByOwner.com is e-commerce, but approximately one third is generated through an in-house call center and strategic partnerships with service providers in the real estate industry. The business generates the majority of its revenue by selling listing packages directly to home sellers who receive online advertising, home pricing tools, marketing advice, yard signs and technical support. ForSaleByOwner.com also sells packages that allow home sellers to syndicate to other national websites such as Zillow and Realtor.com as well as their local multiple listing service (“MLS”).
Tribune Content Agency (“TCA”) is a syndication and licensing business providing quality content solutions for publishers around the globe.  Working with a vast collection of the world’s best news and information sources, it delivers a daily news service and syndicated premium content to 2,000 media and digital information publishers in nearly 100 countries. Tribune News Service delivers the best material from 70 leading companies, including Los Angeles Times, Chicago Tribune , Bloomberg News, Miami Herald, The Dallas Morning News, Seattle Times and The Philadelphia Inquirer . The Tribune Premium Content Service syndicates columnists such as Arianna Huffington, Cal Thomas, Clarence Page, Ask Amy, Mario Batali and Rick Steves. TCA manages the licensing of premium content from publications such as Rolling Stone, The Atlantic, Fast Company, Mayo Clinic, Variety and many more. TCA Originals is a new service that identifies remarkable journalism for production in Hollywood. Tribune Content Agency traces its roots to 1918.
The Company contracts with a number of national and local newspapers to both print and distribute their respective publications in local markets where it is a newspaper publisher. In some instances where it prints publications, it also manages and procures newsprint, ink and plates on their behalf. These arrangements allow the Company to leverage its investment in infrastructure in those markets that support its own publications. As a result, these arrangements tend to contribute significant incremental profitability relative to the underlying revenues. The Company currently distributes national newspapers (including USA Today , The New York Times , and The Wall Street Journal ) in its local markets under

27



multiple agreements. Additionally, in Los Angeles, Chicago, South Florida and Hartford, the Company provides some or all of these services to other local publications.
Revenue Sources
In the nine months ended September 27, 2015 , 54.9% of Tribune Publishing's operating revenues were derived from advertising. These revenues were generated from the sale of advertising space in published issues of the newspapers and on interactive websites and from the delivery of preprinted advertising supplements. Approximately 28.4% of operating revenues for the nine months ended September 27, 2015 were generated from the sale of newspapers, digital subscriptions and other publications to individual subscribers or to sales outlets, which re-sell the newspapers. The remaining 16.6% of operating revenues for the nine months ended September 27, 2015 were generated from the provision of commercial printing and delivery services to other newspapers, direct mail advertising and services, digital marketing services, the distribution of syndicated content and other related activities.
Advertising revenue includes newspaper print advertising and digital advertising. Newspaper print advertising is typically in the form of display or preprint advertising whereas digital advertising can be in the form of display, banner ads, coupon ads, video, search advertising and linear ads placed on Tribune Publishing and affiliated websites. Advertising revenues are comprised of three basic categories: retail, national and classified. Changes in advertising revenues are heavily correlated with changes in the level of economic activity in the United States. Changes in gross domestic product, consumer spending levels, auto sales, housing sales, unemployment rates, job creation, circulation levels and rates all impact demand for advertising in Tribune Publishing’s newspapers and websites. Tribune Publishing’s advertising revenues are subject to changes in these factors both on a national level and on a local level in its markets. Circulation revenue results from the sale of print and digital editions of newspapers to individual subscribers and the sale of print editions of newspapers to sales outlets, which re-sell the newspapers. Other revenues are derived from commercial printing and delivery services provided to other newspapers, direct mail advertising and services, digital marketing services, the distribution of syndicated content and other related activities.
The advertising industry continues to experience a secular shift toward digital advertising, which can be less expensive and can offer more directly measurable returns than traditional print media. The digital advertising marketplace has become increasingly complex and fragmented, particularly as digital advertising networks and exchanges, real-time bidding and other programmatic-buying channels that allow advertisers to buy audience at scale play a more significant role. Competition from a wide variety of digital media and services, many of which charge lower rates than us, and a significant increase in inventory in the digital marketplace have affected, and will likely continue to affect, our ability to maintain or increase our advertising revenues.
Circulation revenue is primarily from traditional print products, where the industry has experienced declining print circulation volume in recent years due to, among other factors, increased competition from digital platforms and sources other than traditional newspapers (which are often free to users), higher subscription and single-copy rates and a growing preference among some consumers for receiving their news from a variety of sources.
Expenses and Operating Measures
Significant operating expense categories include compensation, newsprint and ink, circulation distribution, depreciation and amortization, other operating expenses, and in prior year periods, allocations of corporate costs. Compensation expense is affected by many factors, including the number of full-time equivalent employees, changes in the design and costs of various employee benefit plans, the level of pay increases and actions that impact staffing levels. Circulation distribution expenses primarily include delivery and inserting fees paid to third party contractors and postage costs for Tribune Publishing’s total market coverage products. Circulation distribution expenses can vary from year to year due to changes in volume levels, the fees negotiated with third party contractors and postage rates. Newsprint and ink are commodities and pricing can vary significantly from year to year. Other expenses are principally for sales and marketing activities, occupancy costs, amounts paid to third parties for temporary labor, outside printing and production costs and other general and administrative expenses. Allocated corporate costs include charges from TCO prior to the Distribution for certain corporate, service center and technology support services, as well as insurance, occupancy and other costs.
Tribune Publishing uses operating revenues, income from operations and Adjusted EBITDA as measures of financial performance. In addition, Tribune Publishing uses average net paid circulation for its newspapers, together with other factors, to measure its market share and performance. Net paid circulation includes both individually paid copy sales (home delivery, single copy and digital copy sales) and other paid copy sales (education, sponsored and hotel copy sales).

28



Tribune Publishing’s results of operations, when examined on a quarterly basis, reflect the seasonality of Tribune Publishing’s revenues. Second and fourth quarter advertising revenues are typically higher than first and third quarter revenues. Results for the second quarter reflect spring advertising revenues, while the fourth quarter includes advertising revenues related to the holiday season.
Chapter 11 Reorganization
On December 8, 2008 (the “ Petition Date ”) , TCO and 110 of its direct and indirect wholly-owned subsidiaries (each a “Debtor” and, collectively, the “Debtors”), filed voluntary petitions for relief under Chapter 11 (“Chapter 11”) of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). A joint plan of reorganization for the Debtors (the “Plan”) became effective and the Debtors emerged from Chapter 11 on December 31, 2012 (the “Effective Date”). Certain of the legal entities included in the Consolidated and Combined Financial Statements of Tribune Publishing were Debtors or, as a result of the restructuring transactions undertaken pursuant to the Plan, are successor legal entities to legal entities that were Debtors (collectively, the “Tribune Publishing Debtors”). On March 16, 2015, the Chapter 11 estates of 88 of the Debtors were closed by a final decree issued by the Bankruptcy Court. On July 24, 2015, the Chapter 11 estates of an additional 8 of the Debtors were closed by final decree. The remainder of the Debtors’ Chapter 11 cases, including several of the Tribune Publishing Debtors’ cases, continue to be jointly administered under the caption “ In re:Tribune Media Company, et al. ,” Case No. 08-13141.
On the Effective Date, substantially all of the Debtors’ prepetition liabilities at December 30, 2012 were settled or otherwise satisfied under the Plan. However, certain other claims have been or will be settled or otherwise satisfied subsequent to the Effective Date. Although the allowed amount of certain unresolved claims has not been determined, Tribune Publishing’s liabilities subject to compromise associated with these unresolved claims were discharged upon emergence from Chapter 11 in exchange for the treatment outlined in the Plan.
Reorganization Items, Net —Reorganization items, net, generally includes provisions and adjustments to reflect the carrying value of certain prepetition liabilities at their estimated allowable claim amounts and, pursuant to ASC Topic 852, “Reorganizations,” is reported separately in Tribune Publishing’s Consolidated and Combined Statements of Income. Reorganization items, net, may also include professional advisory fees and other costs directly associated with the Debtors’ Chapter 11 cases.
Specifically identifiable reorganization provisions, adjustments and other costs directly related to Tribune Publishing have been included in the Company’s Consolidated and Combined Statements of Comprehensive Income for the three and nine months ended September 27, 2015 and September 28, 2014 and consisted of the following (in thousands):
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 27, 2015
 
September 28, 2014
 
September 27, 2015
 
September 28, 2014
Reorganization costs, net:
 
 
 
 
 
 
 
 
Contract rejections and claim settlements
 
$
—

 
$
(205
)
 
$
(15
)
 
$
(212
)
Other, net
 
80

 
—

 
(758
)
 
(2
)
Total reorganization costs, net
 
$
80

 
$
(205
)
 
$
(773
)
 
$
(214
)
Tribune Publishing expects to incur certain expenses pertaining to the Chapter 11 proceedings throughout 2015 and potentially in future periods. These expenses are expected to consist primarily of other costs related to the implementation of the Plan and the resolution of unresolved claims.
Employee Reductions
Tribune Publishing identified reductions in its staffing levels of 24 and 298 in the three and nine months ended September 27, 2015 , respectively. Of these reductions, 186 are for the Company's newly acquired operations in San Diego as the Company has consolidated many of those positions into its current operating structure. Tribune Publishing recorded pretax charges related to these reductions of $2.8 million and $6.2 million for the three and nine months ended September 27, 2015 , respectively. The accrued liability for severance and related expenses was $3.1 million at September 27, 2015 and $5.0 million at December 28, 2014 .

29



Results of Operations
Operating results for the three and nine months ended September 27, 2015 and September 28, 2014 are shown in the table below. References in this discussion to individual markets include daily newspapers in those markets and their related businesses (in thousands).
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 27,
2015
 
September 28,
2014
 
% Change
 
September 27,
2015
 
September 28,
2014
 
% Change
Operating revenues
 
$
404,333

 
$
404,057

 
0.1
%
 
$
1,210,994

 
$
1,250,502

 
(3.2
%)
Operating expenses
 
411,901

 
399,540

 
3.1
%
 
1,196,049

 
1,200,203

 
(0.3
%)
Income (loss) from operations
 
$
(7,568
)
 
$
4,517

 
*
 
$
14,945

 
$
50,299

 
(70.3
%)
Overview
Three Months Ended September 27, 2015 compared to the Three Months Ended September 28, 2014
Operating revenues increased 0.1% , or $0.3 million , in the three months ended September 27, 2015 primarily due to an increase of $12.5 million in circulation revenues, partially offset by a $1.1 million decline in advertising revenues and a $11.1 million decrease in other revenues. Operating revenues include revenues from acquisitions.
Income from operations decreased $12.1 million , in the three months ended September 27, 2015 primarily due to an increase in litigation reserves in connection with an adverse jury verdict related to an employment litigation matter that originated prior to the spin-off, as well as slightly higher operating expenses related to the 2015 acquisition.
Nine Months Ended September 27, 2015 compared to the Nine Months Ended September 28, 2014
Operating revenues decreased 3.2% , or $39.5 million , in the nine months ended September 27, 2015 due to a $30.9 million decline in advertising revenues and a $29.1 million decrease in other revenues, partially offset by an increase of $20.5 million in circulation revenues. Operating revenues include revenues from acquisitions.
Income from operations decreased 70.3% , or $35.4 million , in the nine months ended September 27, 2015 due mainly to lower advertising revenues and an increase in litigation reserves in connection with an adverse jury verdict related to an employment litigation matter that originated prior to the spin-off.

30



Operating Revenues —Total operating revenues, by classification, for the three and nine months ended September 27, 2015 and September 28, 2014 were as follows (in thousands):
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 27,
2015
 
September 28,
2014
 
% Change
 
September 27,
2015
 
September 28,
2014
 
% Change
Advertising
 
 
 
 
 
 
 
 
 
 
 
 
Retail
 
$
116,087

 
$
114,653

 
1.3
%
 
$
342,954

 
$
353,889

 
(3.1
%)
National
 
36,817

 
37,652

 
(2.2
%)
 
121,891

 
133,528

 
(8.7
%)
Classified
 
66,868

 
68,537

 
(2.4
%)
 
200,297

 
208,591

 
(4.0
%)
Total advertising
 
219,772

 
220,842

 
(0.5
%)
 
665,142

 
696,008

 
(4.4
%)
Circulation
 
119,979

 
107,511

 
11.6
%
 
344,288

 
323,828

 
6.3
%
Other revenue
 
 
 
 
 
 
 
 
 
 
 
 
Commercial print and delivery
 
31,116

 
43,951

 
(29.2
%)
 
97,325

 
133,792

 
(27.3
%)
Direct mail and marketing
 
13,583

 
17,459

 
(22.2
%)
 
46,107

 
52,987

 
(13.0
%)
Digital marketing services
 
7,562

 
5,985

 
26.3
%
 
21,280

 
16,935

 
25.7
%
Content syndication and other
 
12,321

 
8,309

 
48.3
%
 
36,852

 
26,952

 
36.7
%
Total other revenue
 
64,582

 
75,704

 
(14.7
%)
 
201,564

 
230,666

 
(12.6
%)
Total operating revenues
 
$
404,333

 
$
404,057

 
0.1
%
 
$
1,210,994

 
$
1,250,502

 
(3.2
%)
 
 
 
 
 
 
 
 
 
 
 
 
 
ROP
 
$
105,034

 
$
103,709

 
1.3
%
 
$
324,984

 
$
332,198

 
(2.2
%)
Preprints
 
72,812

 
72,653

 
0.2
%
 
214,577

 
225,490

 
(4.8
%)
Digital
 
41,926

 
44,480

 
(5.7
%)
 
125,581

 
138,320

 
(9.2
%)
Total advertising
 
$
219,772

 
$
220,842

 
(0.5
%)
 
$
665,142

 
$
696,008

 
(4.4
%)
Three Months Ended September 27, 2015 compared to the Three Months Ended September 28, 2014
Advertising Revenues —Total advertising revenues decreased 0.5% , or $1.1 million , in the three months ended September 27, 2015 . Classified advertising revenues decreased 2.4% , or $1.7 million , primarily due to a decrease in the recruitment and automotive categories, partially offset by increases in legal and real estate categories. National advertising revenues fell 2.2% , or $0.8 million , due primarily to declines in movies, wireless and financial, partially offset by contributions from acquisitions. Retail advertising increased 1.3% , or $1.4 million , primarily due to acquisitions, partially offset by declines in electronics, general merchandise and department store categories partially offset by acquisitions. Preprint revenues, which are primarily included in retail advertising, increased 0.2% , or $0.2 million . The declines in retail, national and classified advertising also reflect a decrease in digital advertising revenues, which are included in those categories, and decreased 5.7% , or $2.6 million in the three months ended September 27, 2015 .
Circulation Revenues —Circulation revenues increased 11.6% , or $12.5 million , in the three months ended September 27, 2015 due primarily to acquisitions. These increases were partially offset by overall decreases in existing net paid circulation. Total daily net paid circulation, including acquisitions and digital editions, averaged 2.0 million copies for the three months ended September 27, 2015 , up 10.6% from the prior year period. Total Sunday net paid circulation, including acquisitions and digital editions, for the three months ended September 27, 2015 averaged 3.1 million copies, up 8.9% from the comparable prior year period, primarily due to acquisitions.
Other Revenues —Other revenues decreased 14.7% , or $11.1 million , in the three months ended September 27, 2015 , due primarily to declines in commercial print and delivery revenues of $12.8 million for third-party publications, including certain publications of the Sun-Times Media Group, the Wall Street Journal and the New York Times and declines in direct mail and marketing of $3.9 million . These declines were partially offset by a $1.3 million increase in revenue from MCT News Service, a partnership which was carried as an equity investment in the first quarter of 2014 and in which the Company purchased the remaining 50% interest during the second quarter 2014.

31



Nine Months Ended September 27, 2015 compared to the Nine Months Ended September 28, 2014
Advertising Revenues —Total advertising revenues decreased 4.4% , or $30.9 million , in the nine months ended September 27, 2015 . Retail advertising fell 3.1% , or $10.9 million , due to declines in electronics, general merchandise and department stores categories, partially offset by contributions from acquisitions and an increase in the retail health care category. Preprint revenues, which are primarily included in retail advertising, decreased 4.8% , or $10.9 million . National advertising revenues fell 8.7% , or $11.6 million , due to declines in most categories, primarily wireless, movies, national health care and automobile, partially offset by contributions from acquisitions. Classified advertising revenues decreased 4.0% , or $8.3 million , primarily due to decreases in recruitment and automotive, partially offset by an increase in the legal category. These declines also reflect a decrease in digital advertising revenues, which are included in the above categories, and decreased 9.2% , or $ 12.7 million in the nine months ended September 27, 2015 .
Circulation Revenues —Circulation revenues were up 6.3% , or $20.5 million , in the nine months ended September 27, 2015 due primarily to acquisitions. These increases were partially offset by overall decreases in existing net paid circulation. Total daily net paid circulation, including acquisitions and digital editions, averaged 2.1 million copies for the nine months ended September 27, 2015 , up 10.9% from the prior year period. Total Sunday net paid circulation, including acquisitions and digital editions, for the nine months ended September 27, 2015 averaged 3.1 million copies, up 5.4% from the comparable prior year period, primarily due to acquisitions.
Other Revenues —Other revenues decreased 12.6% , or $29.1 million , in the nine months ended September 27, 2015 , due primarily to declines in commercial print and delivery revenues of $ 36.5 million for third-party publications, including certain publications of the Sun-Times Media Group, the Wall Street Journal and the New York Times and declines in direct mail and marketing of $6.9 million . These declines were partially offset by a $9.0 million increase in revenue from MCT News Service.
Operating Costs and Expenses —Total operating expenses, by classification, for the three and nine months ended September 27, 2015 and September 28, 2014 were as follows (in thousands):
 
 
Three Months Ended
 
Nine Months Ended

 
September 27, 2015
 
September 28, 2014
 
% Change
 
September 27,
2015
 
September 28,
2014
 
% Change
Compensation
 
$
157,783


$
150,762

 
4.7
%
 
$
463,398

 
$
435,413

 
6.4
%
Circulation distribution
 
71,197

 
71,408

 
(0.3
%)
 
206,545

 
218,340

 
(5.4
%)
Newsprint and ink
 
29,096

 
32,839

 
(11.4
%)
 
91,835

 
103,836

 
(11.6
%)
Outside services
 
42,576

 
30,338

 
40.3
%
 
121,847

 
85,487

 
42.5
%
Corporate allocations
 
—

 
15,882

 
*
 
—

 
90,497

 
*
Occupancy
 
16,252

 
14,758

 
10.1
%
 
47,348

 
45,688

 
3.6
%
Promotion and marketing
 
14,626

 
14,587

 
0.3
%
 
42,877

 
39,153

 
9.5
%
Outside printing and production
 
11,330

 
11,975

 
(5.4
%)
 
35,710

 
34,395

 
3.8
%
Affiliate fees
 
13,705

 
9,240

 
48.3
%
 
42,185

 
27,715

 
52.2
%
Other general and administrative
 
41,033

 
37,606

 
9.1
%
 
104,143

 
100,673

 
3.4
%
Depreciation
 
11,346

 
8,002

 
41.8
%
 
33,105

 
13,636

 
*
Amortization
 
2,957

 
2,143

 
38.0
%
 
7,056

 
5,370

 
31.4
%
Total operating expenses
 
$
411,901

 
$
399,540

 
3.1
%
 
$
1,196,049

 
$
1,200,203

 
(0.3
%)
* Represents positive or negative change in excess of 100%
Three Months Ended September 27, 2015 compared to the Three Months Ended September 28, 2014
Tribune Publishing operating expenses increased 3.1% , or $12.4 million , in the three months ended September 27, 2015 compared to the same period for 2014. The increase was due primarily to acquisitions, higher outside services, affiliate fees, depreciation and an increase in the litigation reserves discussed previously, partially offset by the elimination of corporate allocations and lower circulation distribution expense and newsprint and ink.

32



Corporate Allocations —Corporate allocations comprise allocated charges from TCO for certain corporate support services and are included in other operating expense. Subsequent to the Distribution Date, no additional charges were allocated from TCO. The allocated charges include corporate management fees, technology support costs, general insurance costs and occupancy costs, among others. Subsequent to the Distribution Date, these expenses are reflected in Compensation, Outside Services, Occupancy and Other General and Administrative.
Compensation Expense —Compensation expense increased 4.7% , or $7.0 million , in the three months ended September 27, 2015 due primarily to acquisitions and a decrease in the pension credit allocated from TCO in 2014 prior to the Distribution. These increases were partially offset by a decrease in accrued incentives compared to the prior year quarter.
Circulation Distribution Expense —Circulation distribution expense decreased 0.3% , or $0.2 million , primarily due to lower commercial delivery of third party publications partially offset by increases in total net paid print circulation due to acquisitions.
Newsprint and Ink Expense —Newsprint and ink expense declined 11.4% , or $3.7 million , in the three months ended September 27, 2015 due mainly to a 12.3% decrease in the average cost per ton of newsprint and a 29.2% decline in commercial printing revenue.
Outside Services Expense —Outside services expense increased 40.3% , or $12.2 million , in the three months ended September 27, 2015 due primarily to acquisitions, inclusion of technology costs subsequent to the Distribution that were previously included in corporate allocations, corporate post-spin initiatives and internal control remediation efforts.
Occupancy Expense —Occupancy expense increased 10.1% , or $1.5 million primarily due to acquisitions.
Promotion and Marketing Expenses —Promotion and marketing expense remained relatively flat in the three months ended September 27, 2015 compared to the prior year quarter.
Outside Printing and Production Expense —Outside printing and production expense includes costs related to commercial print and delivery. This expense decreased 5.4% , or $0.6 million , in the three months ended September 27, 2015 with increases from acquisitions offset by decreases in client direct mail campaigns.
Affiliate Fees Expense —Affiliate fees expense includes fees paid to Classified Ventures for online automotive ads and CareerBuilder for online employment ads. Affiliate fees expense increased 48.3% , or $4.5 million , in the three months ended September 27, 2015 due primarily to an increase in rates for Classified Ventures auto fees under a new contract implemented in the fourth quarter 2014.
Other General and Administrative Expenses —Other general and administrative expenses include repairs and maintenance and other miscellaneous expenses. These expenses increased 9.1% , or $3.4 million , in the three months ended September 27, 2015 due primarily to the $9.1 million increase in the litigation reserve as previously discussed, partially offset by a $3.8 million decrease in bad debt expense resulting from the Company recording a reserve for certain commercial delivery defaults in the three months ended September 28, 2014, and a $1.3 million decrease in insurance costs resulting from new public company insurance costs incurred in the three months ended September 28, 2014.
Depreciation and Amortization Expense —Depreciation and amortization expense increased $4.2 million in the three months ended September 27, 2015 , primarily as a result of depreciation generated from technology assets that were transferred to the Company as part of the Distribution and capital assets placed in service after the Distribution.
Nine Months Ended September 27, 2015 compared to the Nine Months Ended September 28, 2014
Tribune Publishing operating expenses decreased 0.3% , or $4.2 million , in the nine months ended September 27, 2015 compared to the same period for 2014. The decrease was due primarily to the elimination of corporate allocations and lower circulation distribution expense and newsprint and ink, partially offset by higher outside services, depreciation, compensation, affiliate fees and an increase in the litigation reserves as previously discussed.
Corporate Allocations —Corporate allocations comprise allocated charges from TCO for certain corporate support services and are included in other operating expense. Subsequent to the Distribution, no additional charges were allocated from TCO. The allocated charges include corporate management fees, technology support costs, general insurance costs and occupancy

33



costs, among others. Subsequent to the Distribution Date, these expenses are reflected in Compensation, Outside Services, Occupancy and Other General and Administrative.
Compensation Expense —Compensation expense increased 6.4% , or $28.0 million , in the nine months ended September 27, 2015 due primarily to acquisitions, the addition of the technology department in the third quarter of 2014, which was part of Corporate Allocations prior to the Distribution, increases in staffing and a decrease in the pension credit allocated from TCO in 2014 prior to the Distribution. These increases were partially offset by a decrease in accrued incentives compared to the prior year and the recognition of a $7.8 million non-cash gain related to termination of certain post-retirement benefits in the first quarter of 2015.
Circulation Distribution Expense —Circulation distribution expense decreased 5.4% , or $11.8 million , primarily due to lower commercial delivery of third party publications partially offset by increases in total net paid print circulation due to acquisitions.
Newsprint and Ink Expense —Newsprint and ink expense declined 11.6% , or $12.0 million , in the nine months ended September 27, 2015 due mainly to a 7.5% decrease in the average cost per ton of newsprint and a 27.3% decline in commercial printing revenue.
Outside Services Expense —Outside services expense increased 42.5% , or $36.4 million , in the nine months ended September 27, 2015 due primarily to acquisitions, inclusion of technology costs subsequent to the Distribution that were previously included in corporate allocations, corporate post-spin initiatives and internal control remediation efforts.
Occupancy Expense —Occupancy expense increased 3.6% , or $1.7 million primarily due to acquisitions.
Promotion and Marketing Expenses —Promotion and marketing expense increased 9.5% , or $3.7 million , in the nine months ended September 27, 2015 due primarily to increased digital-focused marketing and general advertising.
Outside Printing and Production Expense —Outside printing and production expenses increased 3.8% , or $1.3 million , in the nine months ended September 27, 2015 primarily due to acquisitions, partially offset by decreased activity from client direct mail campaigns.
Affiliate Fees Expense —Affiliate fees expense increased 52.2% , or $14.5 million , in the nine months ended September 27, 2015 due primarily to an increase in rates for Classified Ventures auto fees under a new contract implemented in the fourth quarter 2014.
Other General and Administrative Expenses —Other general and administrative expenses increased 3.4% , or $3.5 million , in the nine months ended September 27, 2015 due primarily to the $9.1 million increase in the litigation reserve as previously discussed, partially offset by a $3.8 million decrease in bad debt expense resulting from the Company recording a reserve for certain commercial delivery defaults in the nine months ended September 28, 2014, and a $1.3 million decrease in insurance costs resulting from new public company insurance costs incurred in the nine months ended September 28, 2014.
Depreciation and Amortization Expense —Depreciation and amortization expense increased $21.2 million in the nine months ended September 27, 2015 primarily as a result of depreciation generated from technology assets that were transferred to the Company as part of the Distribution.

34



Non-operating income and expenses —Total non-operating expenses for the three and nine months ended September 27, 2015 and September 28, 2014 were as follows (in thousands):
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 27, 2015
 
September 28, 2014
 
% Change
 
September 27,
2015
 
September 28,
2014
 
% Change
Loss on equity investments, net
 
$
(535
)
 
$
(201
)
 
*
 
$
(542
)
 
$
(830
)
 
(34.7%)
Gain on investment transaction
 
—

 
—

 
*
 
—

 
1,484

 
*
Interest expense, net
 
(6,923
)
 
(3,783
)
 
83.0%
 
(19,121
)
 
(3,838
)
 
*
Reorganization items, net
 
80

 
(205
)
 
*
 
(773
)
 
(214
)
 
*
Income tax expense (benefit)
 
(6,345
)
 
484

 
*
 
(2,803
)
 
20,082

 
*
* Represents positive or negative change in excess of 100%
Loss on Equity Investments, net —Loss on equity investments, net increased by $0.3 million for the three month period ended September 27, 2015 and decreased $0.3 million for the nine months ended September 27, 2015 over the prior year periods.
Interest Expense, Net —Interest expense, net increased $3.1 million and $15.3 million for the three and nine month periods ended September 27, 2015 , respectively, over the prior year periods. The increase in interest expense is due to the $420 million Senior Term Facility which was initially entered into in August 2014.
Income Tax Expense (Benefit) —Income tax expense decreased $6.8 million and $22.9 million for the three and nine month periods ended September 27, 2015 , respectively, over the prior year periods primarily due to a decrease in taxable income. Additionally, d uring the nine months ended September 27, 2015 , the Company increased the estimated deferred tax rate on net deferred tax assets from 39.5% to 40.0% , which resulted in a decrease in the current period income tax expense of $0.5 million .
The effective tax rate on pretax income was 42.5% and 51.0% in the three and nine months ended September 27, 2015 , respectively. This rate differs from the U.S. federal statutory rate of 35% primarily due to state income taxes, net of federal benefit, non-deductible expenses and the domestic production activities deduction. For the three and nine months ended September 28, 2014 , Tribune Publishing recorded income tax expense of $0.5 million and $20.1 million , respectively. The effective tax rate on pretax income was 147.6% and 42.8% in the three and nine months ended September 28, 2014 , respectively. This rate differs from the U.S. federal statutory rate of 35% primarily due to state income taxes, net of federal benefit, nondeductible expenses, certain transaction costs not fully deductible for tax purposes and the domestic production activities deduction.

35



Non-GAAP Measures
Adjusted EBITDA — Adjusted EBITDA is defined as net income before income taxes, interest income, interest expense, depreciation and amortization, income and losses from equity investments, corporate management fee from TCO, pension credits, stock-based compensation, certain unusual and non-recurring items (including spin-related costs) and reorganization items.
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 27, 2015
 
September 28, 2014
 
% Change
 
September 27, 2015
 
September 28, 2014
 
% Change
Net Income (Loss)
 
$
(8,601
)
 
$
(156
)
 
*
 
$
(2,688
)
 
$
26,819

 
*
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense (benefit)
 
(6,345
)
 
484

 
*
 
(2,803
)
 
20,082

 
*
Loss on equity investments, net
 
535

 
201

 
*
 
542

 
830

 
(34.7%)
Gain on investment fair value adjustment
 
—

 
—

 
*
 
—

 
(1,484
)
 
*
Interest expense, net
 
6,923

 
3,783

 
83
 
19,121

 
3,838

 
*
Reorganization items, net
 
(80
)
 
205

 
*
 
773

 
214

 
*
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from operations
 
(7,568
)
 
4,517

 
*
 
14,945

 
50,299

 
(70.3%)
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
14,303

 
10,145

 
41%
 
40,161

 
19,006

 
*
Allocated depreciation  (1)
 
—

 
1,731

 
*
 
—

 
11,707

 
*
Allocated corporate management fee
 
—

 
3,851

 
*
 
—

 
21,871

 
*
Restructuring, acquisition and remediation costs (2)
 
11,079

 
8,779

 
26.2%
 
28,515

 
23,124

 
23.3%
Litigation settlement (3)
 
9,100

 
3,842

 
*
 
9,100

 
2,975

 
*
Stock-based compensation (4)
 
2,059

 
869

 
*
 
5,060

 
2,188

 
*
Pension credits (5)
 
—

 
(2,052
)
 
*
 
—

 
(12,492
)
 
*
Gain from termination of post-retirement benefits (6)
 
(650
)
 
—

 
*
 
(9,099
)
 
—

 
*
Adjusted EBITDA (6)(7)
 
$
28,323

 
$
31,682

 
(10.6%)
 
$
88,682

 
$
118,678

 
(25.3%)
* Represents positive or negative change in excess of 100%
(1) -     Allocated depreciation represents depreciation for primarily technology assets that were used by Tribune Publishing prior to the spin-off. As a result of the spin-off, these technology assets were assigned to Tribune Publishing and the related depreciation is included in post-spin operating results.
(2) - Restructuring (including spin-related), acquisition and remediation costs include costs related to Tribune Publishing's internal restructuring, the distribution and separation from Tribune Media Company ("TCO"), acquisitions and material weakness remediation costs.
(3) - Adjustment to litigation settlement reserve.
(4) - Stock-based compensation is due to Tribune Publishing's and TCO's equity compensation plans and is included for comparative purposes.
(5) - Pension credits are due to allocations from TCO for Tribune Publishing employees defined benefit plan. As part of the spin-off, TCO retained this plan.
(6) -
In the first quarter of 2015, the Company did not deduct a gain of $7.8 million related to the termination of certain post-retirement benefits in the determination of Adjusted EBITDA. Management reassessed this gain and determined it is expected to be a non-recurring items and should be deducted in the determination of Adjusted EBITDA. Accordingly, the 2015 year-to-date period for Adjusted EBITDA, as presented, includes such adjustment for the non-recurring gain from termination of certain post-retirement benefits.
(7) -
The 2014 Adjusted EBITDA has been amended to exclude the adjustment for pre-spin intercompany rent for certain properties. The pre-spin intercompany rent was previously included to improve comparability between the 2013 pre-spin period and the 2014 pre-spin periods as the Company did not have intercompany rent until December 2013 for certain properties.
Adjusted EBITDA is a financial measure that is not calculated in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company's management uses Adjusted EBITDA (a) as a measure of operating performance; (b) for planning and forecasting in future periods; and (c) in communications with the Company's Board of Directors concerning the Company's financial performance. Management b elieves the presentation of

36



Adjusted EBITDA enhances investors’ overall understanding of the financial performance of the Company's business as a stand-alone company. In addition, Adjusted EBITDA, or a similarly calculated measure, is used as the basis for certain financial maintenance covenants that the Company is subject to in connection with certain credit facilities. Since not all companies use identical calculations, the Company's presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies and should not be used by investors as a substitute or alternative to net income or any measure of financial performance calculated and presented in accordance with U.S. GAAP. Instead, management believes Adjusted EBITDA should be used to supplement the Company's financial measures derived in accordance with U.S. GAAP to provide a more complete understanding of the trends affecting the business.
Although Adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, Adjusted EBITDA has limitations as an analytical tool, and investors should not consider it in isolation or as a substitute for, or more meaningful than, amounts determined in accordance with U.S. GAAP. Some of the limitations to using non-GAAP measures as an analytical tool are:
•
they do not reflect the Company's interest income and expense, or the requirements necessary to service interest or principal payments on the Company's debt;
•
they do not reflect future requirements for capital expenditures or contractual commitments; and
•
although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and non-GAAP measures do not reflect any cash requirements for such replacements.
Liquidity and Capital Resources
Tribune Publishing believes that its working capital, future cash from operations and access to borrowings under the Senior ABL Facility discussed below will provide adequate resources to fund its operating and financing needs for the foreseeable future. Tribune Publishing’s access to, and the availability of, financing in the future will be impacted by many factors, including its credit rating, the liquidity of the overall capital markets and the current state of the economy. There can be no assurances that Tribune Publishing will have access to capital markets on acceptable terms.
Sources and Uses
The Company expects to fund capital expenditures, interest and principal and pension payments due in 2015 and other operating requirements through a combination of cash flows from operations and investments, available borrowings under the Company’s revolving credit facility, and any refinancings thereof, and, if necessary, disposals of assets or operations. The Company’s financial and operating performance remains subject to prevailing economic and industry conditions and to financial, business and other factors, some of which are beyond the control of the Company and, despite the Company’s 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 the Company’s future liquidity needs.
The table below details the total operating, investing and financing activity cash flows for the nine months ended September 27, 2015 and September 28, 2014 (in thousands):
 
 
Nine Months Ended
 
 
September 27,
2015
 
September 28,
2014
Net cash provided by operating activities
 
$
61,327

 
$
125,910

Net cash used for investing activities
 
(85,564
)
 
(71,280
)
Net cash provided by financing activities
 
42,213

 
(4,677
)
Net increase in cash
 
$
17,976

 
$
49,953

Cash flow generated from operating activities is Tribune Publishing’s primary source of liquidity. Net cash provided by operating activities was $61.3 million for the nine months ended September 27, 2015 , down $64.6 million from $125.9

37



million for the nine months ended September 28, 2014 . The decrease was primarily driven by lower operating results as a result of the decline in advertising revenues as well as payments for interest, taxes and accrued incentive bonuses.
Net cash used for investing activities totaled $85.6 million in the nine months ended September 27, 2015 and included $67.8 million used for acquisitions and $27.5 million used for capital expenditures, partially offset by $10.5 million provided by a reduction in restricted cash. Net cash used for investing activities totaled $71.3 million in the nine months ended September 28, 2014 and was comprised of acquisitions and capital expenditures, partially offset by a reduction in restricted cash.
Net cash provided by financing activities totaled $42.2 million in the nine months ended September 27, 2015 . During the period the Company had proceeds from the issuance of senior debt, net of discount, of $69.0 million , $14.4 million used for loan payments on senior debt, $9.1 million used for payment of stockholder dividends and $2.7 million used for payment of financing costs related to the issuance of senior debt. In the nine months ended September 28, 2014 , the Company's financing activities included issuance of $346.5 million of variable rate debt, net of discount, offset by payment of a $275.0 million dividend to TCO and $66.2 million in other transactions with TCO.
Dividends
On September 3, 2015, the Board of Directors of the Company declared a dividend of $0.175 per share on common stock outstanding, to be paid on October 29, 2015, to stockholders of record on October 1, 2015.
On August 14, 2015, the Company paid a dividend of $0.175 per share on common stock outstanding, to stockholders of record on July 15, 2015. On May 15, 2015, the Company paid a dividend of $0.175 per share on common stock outstanding, to stockholders of record on April 15, 2015.
Stock Repurchases
In August 2015, our Board of Directors authorized $30 million to be used for stock repurchases for 24 months from the date of authorization. Any stock repurchases under the stock repurchase plan may be made in the open market, through privately negotiated transactions or other means. The stock repurchase plan may be modified or discontinued at any time without prior notice. Repurchased shares become a part of treasury stock.
During the third quarter of fiscal 2015, the Company repurchased 121,168 shares of common stock for an aggregate purchase price of $1.4 million. The Company has $28.6 million remaining authorization under the stock repurchase plan at September 27, 2015.
The San Diego Union-Tribune Acquisition
On May 21, 2015, the Company purchased The San Diego Union-Tribune ( f/k/a the U-T San Diego) and nine community weeklies and related digital properties in San Diego County, California. The purchase price was $85 million, consisting of $73 million in cash, less a $2 million preliminary working capital adjustment at close, and $12 million in Tribune Publishing common stock, or 700,869 shares. The Company financed the cash portion of the purchase price with a combination of cash-on-hand and funds available under the Company's existing Senior ABL Facility as well as the net proceeds of the expansion of the Term Loans described below. Related to the shares issued, the Company entered into a registration rights agreement with the seller, whereby the seller is entitled to certain registration rights with respect to the 700,869 shares of common stock of the Company acquired in connection with the acquisition. Pursuant to the registration rights agreement, the Company filed a registration statement on Form S-3 on August 12, 2015 to register the shares issued to the seller. In the three months ended September 27, 2015, the Company received the final working capital adjustment of $2.6 million in cash from the seller. As part of the acquisition the Company became the sponsor of a single employer defined benefit plan that has and will require approximately $3 million in contributions in 2015.
Employee Voluntary Separation Program
On October 5, 2015, the Company offered an Employee Voluntary Separation Program (EVSP), which provides enhanced separation benefits to eligible non-union employees with more than one year of service.  The Company expects a net reduction in total headcount of approximately 7% as a result of this program.  The Company plans to fund the EVSP through salary continuation starting immediately and continuing through the first half of 2018. The Company expects the

38



EVSP will result in a charge of approximately $55 million for all related severance, benefits and taxes. During the fourth quarter of 2015, the Company will record a charge estimated at $47 million related to the EVSP, partially offset by a non-cash gain for curtailment of post-retirement medical benefits, subject to the number of employees accepted into the EVSP.
Litigation Reserve
On November 4, 2015, the Company received an adverse jury verdict in an employment litigation matter that originated prior to the spin-off. Accordingly, for the three and nine-month periods ended September 27, 2015, the Company has recorded a $9.1 million litigation reserve for this matter, composed of $7.1 million for the judgment and $2.0 million for the estimated amount of legal fees and expenses. The Company plans to appeal the verdict.
Senior Term Facility
On August 4, 2014, the Company entered into a credit agreement (the “Term Loan Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (in such capacity, the “Term Collateral Agent”), and the lenders party thereto (the “Senior Term Facility”). The Senior Term Facility originally provided for secured loans (the “Term Loans”) in the aggregate principal amount of $350.0 million. The Senior Term Facility will mature on August 4, 2021. The Term Loans bear interest at a variable interest rate based on either LIBOR or a base rate, in either case plus an applicable margin. The Term Loans amortize in equal quarterly installments equal to 1.25% of principal amounts borrowed against the Senior Term Facility with the balance payable on the maturity date, August 4, 2021. The Senior Term Facility initially provided that it could be expanded by an amount up to (i) the greater of $100.0 million and an amount as will not cause the net senior secured leverage ratio after giving effect to such incurrence to exceed 2:1, plus (ii) an amount equal to all voluntary prepayments of the term loans borrowed under the Senior Term Facility, subject to certain conditions. As of September 27, 2015, $70 million of the expansion had been drawn for the acquisition described previously. Tribune Publishing Company is the borrower under the Senior Term Facility and each of the Company’s wholly-owned domestic subsidiaries, subject to certain exceptions (the “Subsidiary Guarantors”), guarantee the payment obligations under the Senior Term Facility. The Senior Term Facility contains a number of covenants that, among other things, limit the ability of Tribune Publishing Company and its restricted subsidiaries to: incur more indebtedness; pay dividends; redeem stock or make other distributions in respect of equity; make investments; and certain other usual and customary covenants. As of September 27, 2015 , the outstanding balance under the Senior Term Facility is $406.0 million , the unamortized balance of the discount is $3.9 million and the Company was in compliance with the covenants of the Senior Term Facility. The weighted average interest rate for the variable rate debt is 5.75%.
Senior ABL Facility
On August 4, 2014, Tribune Publishing Company and the Subsidiary Guarantors entered into a credit agreement (the “ABL Credit Agreement”) with Bank of America, N.A., as administrative agent, collateral agent (in such capacity, the “ABL Collateral Agent”), swing line lender and letter of credit issuer and the lenders party thereto (the “Senior ABL Facility”). The Senior ABL Facility will mature on August 4, 2019. The Senior ABL Facility provides for senior secured revolving loans and letters of credit of up to a maximum aggregate principal amount of $140.0 million . Up to $75.0 million of availability under the Senior ABL Facility is available for letters of credit and up to $15.0 million of availability under the Senior ABL Facility is available for swing line loans. The Senior ABL Facility also permits Tribune Publishing Company to increase the commitments under the Senior ABL Facility by up to $75.0 million . The Senior ABL Facility bears interest at a variable interest rate based on either LIBOR or a base rate, in either case plus an applicable margin. Tribune Publishing Company and the Subsidiary Guarantors are the borrowers under the Senior ABL Facility. Tribune Publishing Company and the Subsidiary Guarantors guarantee the payment obligations under the Senior ABL Facility. The Senior ABL Facility contains a number of covenants that, among other things, limit the ability of Tribune Publishing Company and its restricted subsidiaries to: incur more indebtedness; pay dividends; redeem stock or make other distributions in respect of equity; make investments; and certain other usual and customary covenants. Customary fees will be payable in respect of the Senior ABL Facility, including commitment fees of 0.25% and letter of credit fees. As of September 27, 2015 , $23.6 million of the Senior ABL Facility availability supported an outstanding undrawn letter of credit in the same amount.
Letter of Credit Agreement
On August 4, 2014, Tribune Publishing Company and JPMorgan Chase Bank, N.A., as letter of credit issuer (the “L/C Issuer”) entered into a letter of credit agreement (the “Letter of Credit Agreement”). The Letter of Credit Agreement provides for the issuance of standby letters of credit of up to a maximum aggregate principal face of $30.0 million . The Letter

39



of Credit Agreement permits Tribune Publishing Company, at the sole discretion of L/C Issuer, to request an increase of the amount available to be issued under the Letter of Credit Agreement up to an aggregate maximum face amount of $50.0 million . The Letter of Credit Agreement is scheduled to terminate on August 4, 2019. As of September 27, 2015 , a $17.0 million undrawn letter of credit was outstanding against the Letter of Credit Agreement. This letter of credit was collateralized with $17.0 million of cash held in a specified cash collateral account. During the quarter ended September 27, 2015, the Company was notified that an outstanding letter of credit agreement was reduced from $27.5 million to $17.0 million. Accordingly, the Company received $10.5 million from the cash collateral account during the quarter. The specified cash account is required to remain as long as the undrawn letter of credit remains outstanding and is recorded in restricted cash in the Consolidated and Combined Balance Sheets.
Goodwill and Other Indefinite-lived Intangible Assets
Tribune Publishing reviews goodwill and other indefinite-lived intangible assets, which include only newspaper mastheads, for impairment annually, or more frequently if events or changes in circumstances indicate that an asset may be impaired. The Company has determined that the reporting units are the eight newspaper media groups and the aggregate of its national businesses. 
Tribune Publishing’s annual impairment review measurement date is in the fourth quarter of each year. The estimated fair value of goodwill is 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 are calculated based on projected future discounted cash flow analysis. 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 publishing industry such as operating margins and royalty rates for newspaper mastheads. These assumptions reflect Tribune Publishing’s best estimates, but these items involve inherent uncertainties based on market conditions generally outside of Tribune Publishing’s control. Further erosion of general economic, market or business conditions could have a negative impact on our business and stock price, which may require that we record impairment charges in the future, which negatively affects our results of operations.
New Accounting Standards
In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-16, Topic 805, Simplifying the Accounting for Measurement-Period Adjustments , which provides guidance to entities that have provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period in which the combination occurs and during the measurement period have an adjustment to provisional amounts recognized. This ASU is effective for reporting periods beginning after December 15, 2015. The Company adopted ASU 2015-16 in the third quarter of 2015. The adoption of ASU 2015-16 has been immaterial to the Company's consolidated financial statements.
In July 2015, the FASB issued ASU 2015-11, Topic 330, Simplifying the Measurement of Inventory. This ASU requires an entity to measure inventory at the lower of cost or net realizable value, which consists of the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal, and transportation. This ASU is effective for reporting periods beginning after December 15, 2016. The guidance is to be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is evaluating the effect that adoption will have on its consolidated financial statements and the date on which to adopt the accounting standard.
In April 2015, the FASB issued ASU 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement , which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for a cloud computing arrangement as a service contract. This ASU is effective for reporting periods beginning after December 15, 2015. The Company will adopt the standard in the first quarter of 2016. The Company is evaluating the effect that adoption will have on its consolidated financial statements.
In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs . This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU is effective for reporting periods

40



beginning after December 15, 2015 and interim periods therein. It is to be applied retrospectively and early adoption is permitted. ASU 2015-03 affects presentation only and will have no effect on the Company's financial condition, results of operations or cash flows. The Company expects to adopt this standard in the first quarter of 2016.
In May 2014, the FASB issued ASU 2014-09, Topic 606, Revenue from Contracts with Customers , concerning revenue recognition. The new standard supersedes a majority of existing revenue recognition guidance under U.S. GAAP, and requires a company to recognize revenue when it transfers goods or services to a customer in an amount that reflects the consideration to which a company expects to be entitled. Companies may need to use more judgment and make more estimates while recognizing revenue, which could result in additional disclosures to the financial statements. ASU 2014-09 allows for either a “full retrospective” adoption or a “modified retrospective” adoption. In August 2015, the FASB issued ASU 2015-14 to defer the effective date of ASU 2014-09 to reporting periods beginning after December 15, 2017 and to permit companies to voluntarily adopt the new standard as of the original effective date. The Company will adopt this standard on January 1, 2018. The Company is currently evaluating the revenue recognition impact this guidance will have once implemented and the implementation approach to be used.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of September 27, 2015 , there had been no material changes in the Company’s exposure to market risk from the disclosure included in the annual report on Form 10-K as filed with the SEC on March 25, 2015.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company carried out an evaluation under the supervision and with the participation of the Company’s management, including the Company’s President and Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended), as of the end of the period covered by this report. Based upon that evaluation, the President and Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective because of the material weaknesses in internal control over financial reporting previously reported, and described below, which have not been fully remediated.
As previously reported in the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2014, the Company identified material weaknesses in its internal control over financial reporting in preparing its Consolidated and Combined Financial Statements for the fiscal year ended December 28, 2014, which material weaknesses have not yet been fully remediated. The first of the material weaknesses the Company identified relates to an insufficient complement of finance and accounting resources within the organization resulting in ineffective controls over financial reporting processes, including controls over the period-end close process, the preparation and review of the consolidated interim and annual financial statements, and the controls related to identifying and accumulating all required supporting information to determine the completeness and accuracy of the Consolidated and Combined Financial Statements and related disclosures.
The Company also identified a material weakness related to an ineffective control environment, which resulted from deficiencies in certain areas in which the Company’s controls were not precise enough to detect misstatements that, in the aggregate, could be material to the Consolidated and Combined Financial Statements.
Management has concluded that these material weaknesses did not result in any material misstatements of the Company’s Consolidated and Combined Financial Statements and disclosures for the years ended December 28, 2014, December 29, 2013 and December 30, 2012 and for the interim periods of those years. In light of these material weaknesses in internal controls over financial reporting, prior to filing this report, management completed additional procedures, including validating the completeness and accuracy of the related financial records. These additional procedures have allowed management to conclude that, notwithstanding the material weaknesses and the ineffectiveness of the Company’s disclosure controls and procedures, the Company’s Consolidated and Combined Financial Statements in this report fairly present, in all material respects, the Company’s financial position, results of operations and cash flows as of the dates, and for the periods presented, in conformity with generally accepted accounting principles in the U.S. For additional details, see

41



Item 9A. Controls and Procedures—Management’s Report on Internal Control over Financial Reporting included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2014.

Changes in Internal Control Over Financial Reporting
Management believes that significant progress has been made prior to filing this Quarterly Report on Form 10-Q in remediating the underlying causes of the material weaknesses. We have taken, and will continue to take, a number of actions to remediate these material weaknesses. Among other things, we have:

•
augmented accounting and finance resources and hired additional accounting and finance professionals;

•
enhanced the documentation of key controls and account reconciliations; and

•
engaged a public accounting firm to assist with our SOX remediation design and testing.
We and our Board of Directors are committed to maintaining a strong internal control environment, and believe that these remediation efforts represent significant improvements in our control environment and in our controls over financial reporting. Additional controls may also be required over time. The identified material weaknesses in internal control will not be considered fully addressed until the internal controls over these areas have been in operation for a sufficient period of time for our management to conclude that the material weaknesses have been fully remediated. We continue to develop new controls, enhance existing controls and test their operating effectiveness in order to make this final determination.
Other than as expressly noted above, there were no changes in the Company's internal control over financial reporting identified in connection with the evaluation of our controls performed during the quarter ended September 27, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As discussed above, the Company completed the acquisition of MLIM, LLC on May 21, 2015, including its principal operating entity, The San Diego Union-Tribune, LLC . The Company is currently integrating The San Diego Union-Tribune, LLC into its existing internal control over financial reporting processes. In executing this integration, the Company is analyzing, evaluating, and, where necessary, may make changes in controls and procedures related to The San Diego Union-Tribune, LLC operations. The Company expects that this process will be completed in fiscal year 2016. The Company expects to exclude The San Diego Union-Tribune, LLC from its assessment of internal control over financial reporting as of December 27, 2015, in accordance with the SEC’s general guidance that a recently acquired business may be omitted from the scope of the assessment in the year of acquisition.
PART II.
Item 1. Legal Proceedings
There have been no material developments in the legal proceedings included in the Company's annual report on Form 10-K filed with the SEC on March 25, 2015.
The Company does not believe that any matters or proceedings presently pending will have a material adverse effect, individually or in the aggregate, on our Consolidated and 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 Consolidated and Combined financial position, results of operations or liquidity.
Item 1A. Risk Factors
In addition to the other information in this report, you should carefully consider the discussion under “Risk Factors” in Item 1A. as filed in the Company's Annual Report on Form 10-K filed with the SEC on March 25, 2015 and as supplemented in Part II Item IA of the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 12, 2015. There have been no material changes to our risk factors as disclosed in such filings.

42



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Purchases of our equity securities during the fiscal quarter ended September 27, 2015 on a trade date basis were as follows:
ISSUER PURCHASES OF EQUITY SECURITIES
 
 
(a)
 
(b)
 
(c)
 
(d)
Period
 
Total
Number of
Shares
Purchased
 
Average
Price Paid
per Share
 
Total Number
of Shares
Purchased as
Part of Publicly
Announced Plans
or Programs
 
Approximate Dollar
Value of Shares that
May Yet be Purchased
Under Plans or
Programs (1)
 
 
 
 
 
 
 
 
(In thousands)
June 29 through August 2, 2015
 
—
 
—
 
—
 
—
August 3 through August 30, 2015
 
35,000
 
$11.55
 
35,000
 
$29,596
August 31 through September 27, 2015
 
86,168
 
$11.18
 
86,168
 
$28,632
Total
 
121,168
 
$11.29
 
121,168
 
 
(1)
In August 2015, our Board of Directors authorized $30 million to be used for stock repurchases for 24 months from the date of authorization.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
Exhibits marked with an asterisk (*) are incorporated by reference to documents previously filed by the Company with the Securities and Exchange Commission, as indicated. All other documents are filed with this report. Exhibits marked with a tilde (~) are management contracts, compensatory plan contracts or arrangements filed pursuant to Item 601(b)(10)(iii)(A) of Regulation S-K.
Exhibit                  Description
Number
3.1*
Amended and Restated Certificate of Incorporation of Tribune Publishing Company (incorporated by reference to Exhibit 3.1 to the Tribune Publishing Company Registration Statement on Form S-8 (File No. 333-197932) filed on August 7, 2014).
3.2*
Amended and Restated By-Laws of Tribune Publishing Company (incorporated by reference to Exhibit 3.2 to the Tribune Publishing Company Registration Statement on Form S-8 (File No. 333-197932) filed on August 7, 2014).
10.1~
Employment Agreement, by and between Tribune Publishing Company, LLC and Tony Hunter, dated as of August 27, 2015.

43



10.2~
Employment Agreement, by and between Tribune Publishing Company, LLC and Timothy E. Ryan, dated as of September 7, 2015.
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Scheme Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Labels Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document


44



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


 
 
 
TRIBUNE PUBLISHING COMPANY
 
 
 
 
November 10, 2015
 
By:
/s/ Sandra J. Martin
 
 
 
Sandra J. Martin
 
 
 
(Chief Financial Officer and Principal Accounting Officer)
    



45


Exhibit 10.1
                        
EMPLOYMENT AGREEMENT

This Employment Agreement (this “ Agreement ”) is entered into by and between Tribune Publishing Company, LLC (the “ Company ”), a Delaware limited liability company, and Tony Hunter (“ Employee ”), an individual. In consideration of the mutual promises and covenants contained herein, and for good and valuable consideration, the receipt and sufficiency of which are acknowledged by both parties, the Company agrees to employ Employee and Employee agrees to accept employment with the Company upon the terms and conditions set forth herein.

1.      EMPLOYMENT TERM.

The term of Employee’s employment hereunder shall commence on August 24, 2015 (the “ Effective Date ”) and, unless terminated pursuant to Section 8 below, shall continue through August 23, 2018 (the “ Employment Term ”).

2.      FREEDOM TO ENTER INTO THIS AGREEMENT.

Employee represents and covenants that: (a) the execution, delivery and performance of this Agreement by him does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Employee is a party or by which Employee is bound; and (b) Employee is not a party to or bound by any employment agreement, noncompetition agreement, non-solicitation agreement, confidentiality agreement or other agreement or obligation with any other person or entity that would in any way restrict or otherwise affect his performance of this Agreement.

3.      TITLE AND EMPLOYMENT DUTIES .

During the Employment Term and subject to the terms of this Agreement:

(a) Employee’s title will be CEO/Publisher, Chicago Tribune Media Group. Employee will have such duties and responsibilities as are customarily exercised by someone serving in such a capacity as well as such other duties commensurate with his title and position as the Company may assign him from time to time.

(b) Employee agrees to devote his full business time, attention, and energies to the business of the Company and further agrees that he will perform his duties in a diligent, lawful and trustworthy manner, that he will act in accordance with his title and responsibilities and otherwise conduct himself in accordance with the written business and employee policies and practices of the Company as applicable.

(c) Employee will initially be based in and will work out of the Company’s office in Chicago, Illinois.













- 1 -


4.      COMPENSATION.

During the Employment Term and subject to the terms of this Agreement:

(a) For the services rendered by Employee under this Agreement, the Company will pay Employee a gross base salary of six hundred twenty-five thousand dollars ($625,000) per annum (the “ Base Salary ”). Employee’s Base Salary shall be payable, less all authorized or required deductions, in accordance with the Company’s then-effective payroll practices. The Company will periodically review Employee’s salary and may provide for salary increases during the Employment Term, such increases to be given, if given, in the discretion of the Company.

(b) Subject to Section 8 below, Employee shall have the opportunity to earn a discretionary annual management incentive bonus (“ Annual Bonus ”), with a target bonus opportunity of one hundred percent (100%) of his Base Salary (the “ Target Bonus ”), under a bonus plan to be established in good faith by the Company, based upon the achievement of both reasonably attainable annual Company and individual performance objectives as established by the Company. The Annual Bonus payable for any calendar year shall be paid, if paid, less all required or authorized deductions, at the time and in the manner such bonuses are paid to other similarly situated executives receiving annual bonus payments.

(c) For the calendar years 2016, 2017 and 2018, Employee shall be granted a combination of restricted stock units (“ RSUs ”) nonqualified stock options (“ Options ”) in Tribune Publishing Company, valued in accordance with Black-Scholes or similar option-pricing model, such annual awards having an aggregate fair value equal to five hundred and fifty thousand dollars ($550,000) based on the fair market value (the “ FMV ”) of the Company’s common stock on the date of grant.  The equity award each year shall be divided among the two types of awards as follows:  RSUs - 50% and Options - 50%.  The RSUs and Options shall be subject to such other terms as set forth in the applicable grant agreement and in the underlying equity plan as adopted by the Company. Except as specifically provided otherwise in the grant agreement, if at all, all unvested Options and RSUs shall terminate immediately upon termination of Employee’s employment for any reason and all vested Options shall terminate immediately upon termination of Employee’s employment by the Company with Cause, as defined below.

5.      BENEFITS.     

(a) While employed by the Company, Employee shall be entitled to participate in the benefit plans and programs (including without limitation such medical, dental, vision, life, disability, retirement and other health and welfare plans), as the Company may have or establish from time to time for its employees in which Employee would be entitled to participate pursuant to their then-existing terms, in accordance with the terms and requirements of such plans. The foregoing, however, is not intended and shall not be construed to require the Company to establish any such plans or to prevent the modification or termination of such plans once established, and no such action or failure thereof shall affect this Agreement. It is further understood and agreed that all benefits Employee may be entitled to while employed by the Company shall be based upon his










- 2 -


Base Salary and not upon any bonus, incentive or equity compensation due, payable, or paid to Employee, except where, if at all, the benefit plan provides otherwise.

(b) Employee will be eligible to receive four weeks (20 days) of paid vacation per calendar year, pro-rated for partial years, to be scheduled and approved in advance and taken in accordance with the Company’s policies and practices.

6.      BUSINESS EXPENSES.

During the Employment Term, the Company shall reimburse Employee for reasonable travel and other expenses incurred in the performance of his duties hereunder as are customarily reimbursed to employees in accordance with the then-applicable expense reimbursement policies of Company.

7.      RESTRICTIVE AGREEMENTS .

(a) During his employment with the Company (whether or not such employment continues beyond the Employment Term), Employee agrees that his employment is on an exclusive basis and that he: i) will not engage in any activity which is in conflict with his duties and obligations hereunder, whether or not such activity is pursued for gain, profit, or other pecuniary advantage; and ii) will not intentionally engage in any other activities which could harm the business or reputation of the Company or any of its affiliates.

(b) Employee agrees that during his employment with the Company (whether or not such employment continues beyond the Employment Term) and for twelve (12) months after the date on which his employment with the Company ends for any or no reason (whether terminated by him or by the Company), except as required in the performance of his duties for the Company, he will not: i) employ, either directly or indirectly, any person previously employed by the Company or any of its affiliates unless at such time such person is not then and has not been employed by the Company or any of its subsidiaries, business units, or other affiliates for at least six (6) months, or in any way solicit, entice, persuade or induce, either directly or indirectly, any person to terminate or refrain from renewing or extending their employment with the Company or any of its subsidiaries, business units, or other affiliates; or ii) intentionally interfere with the relationship of the Company with any person or entity who or which is a customer, client, supplier, developer, subcontractor, licensee or licensor or other business relation of the Company, or assist any other person or entity in doing so.

(c) As a consequence of his employment by the Company, Employee will be privy to the highest level of confidential and proprietary business information of the Company and its affiliates, not generally known by the public or within the industry and which, thereby, gives the Company and its affiliates a competitive advantage and which has been the subject of reasonable efforts by the Company and its affiliates to maintain such confidentiality. Except as required by law or as expressly authorized by the Company in furtherance of his employment duties, Employee shall not at any time, during his employment with the Company (whether or not such employment












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continues beyond the Employment Term) or thereafter, directly or indirectly use, disclose, or take any action which may result in the use or disclosure of, any Confidential Information. “ Confidential Information ” as used in this Agreement, includes all non-public confidential competitive, pricing, marketing, proprietary and other information or materials relating or belonging to the Company or any of its affiliates (whether or not reduced to writing), including without limitation all confidential or proprietary information furnished or disclosed to or otherwise obtained by Employee in the course of his employment, and further includes without limitation: computer programs; patented or unpatented inventions, discoveries and improvements; marketing, organizational, operating and business plans; strategies; research and development; policies and manuals; sales forecasts; personnel information (including without limitation the identity of Company employees, their responsibilities, competence and abilities, and compensation); medical information about employees; pricing and nonpublic financial information; current and prospective customer lists and information on customers or their employees; information concerning planned or pending acquisitions, investments or divestitures; and information concerning purchases of major equipment or property. Confidential Information does not include information that lawfully is or becomes generally and publicly known outside of the Company and its affiliates other than through Employee’s breach of this Agreement or breach by any person of some other obligation. Nothing herein prohibits Employee from disclosing Confidential Information as legally required pursuant to a validly issued subpoena or order of a court or administrative agency of competent jurisdiction, provided, if possible, that Employee shall first promptly notify the Company if he receives a subpoena, court order or other order requiring any such disclosure, to allow the Company to seek protection therefrom in advance of any such legally compelled disclosure.

(d) Employee hereby acknowledges and agrees that the Company owns the sole and exclusive right, title and interest in and to any and all Works (as defined below), including without limitation all copyrights, trademarks, service marks, trade names, slogans, inventions (whether patentable or not), patents, trade secrets and other intellectual property and/or proprietary rights therein, including without limitation all rights to sue for infringement thereof (collectively, “ IP Rights ”). The Company’s right, title and interest in and to the Works includes, without limitation, the sole and exclusive right to secure and own copyrights and maintain renewals throughout the world, the right to modify and create derivative works of or from the Works without any payment of any kind to Employee, and the right to exclusively register or record any IP Rights in the Works in the Company’s name. Employee agrees that all Works shall be "works made for hire" for the Company as that term is defined in the copyright laws of the United States or other applicable laws. To the extent that any of the Works is determined not to constitute a work made for hire, or if any rights in any of the Works do not accrue to the Company as a work made for hire, Employee agrees that his signature on this Agreement constitutes an assignment (without any further consideration) to the Company of any and all of Employee’s respective IP Rights and other rights, title and interest in and to any and all Works. “ Works ” means any inventions, invention disclosures, developments, improvements, trade secrets, brands, logos, drawings, trademarks, service marks, trade names, documents, memoranda, data, software programs, object code, source code, ideas, original works of authorship, or other information that Employee conceives, creates, develops, discovers, makes or acquires, in whole or in part, either













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solely or jointly with another or others, during or pursuant to the course of his employment by the Company or its affiliates, and that relate directly or indirectly to the Company or any of its affiliates or their respective businesses, or to the Company’s or any of its affiliates’ actual or demonstrably anticipated research or development, and that are made through the use of any of the Company’s or any of its affiliates’ equipment, facilities, supplies, trade secrets or time, or that result from any work performed for the Company or any of its affiliates, or that is based on any information of, or provided to him by, the Company or any of its affiliates. Employee hereby is and has been notified by the Company, and understands that the foregoing provisions of this Section 7(d) do not apply to an invention for which no equipment, supplies, facilities or trade secret information of the Company or any of its affiliates was used and which was developed entirely on his own time, unless: (a) the invention relates at the time of conception or reduction to practice (i) to the business of the Company or any of its affiliates or (ii) to the Company’s or any of its affiliates’ actual or demonstrably anticipated research and development, or (b) the invention results from any work performed by Employee for the Company or any of its affiliates.

(e) It is mutually agreed and stipulated between Employee and the Company that the covenants set forth in Section 7(a) through 7(d) of this Agreement is necessary to protect the legitimate business interests of the Company and its affiliates and are reasonable, including without limitation in time and scope.
    
(f) The amount of actual or potential damages resulting from Employee’s breach of any provision of Section 7(a) through 7(d) of this Agreement will be inherently difficult to determine with precision and, further, any breach could not be reasonably or adequately compensated in money damages. Accordingly, any breach by Employee of any provision of Section 7(a) through 7(d) of this Agreement will result in immediate and irreparable injury and harm to the Company and its affiliates for which the Company and its affiliates will have no adequate remedy at law. The Company and/or its affiliates, thus, will be entitled to temporary, preliminary and permanent injunctive relief to prevent any such actual or threatened breach, without posting a bond or other security. The Company’s and/or its affiliates’ resort to such equitable relief will not waive any other rights that any of them may have to damages or other relief, and the prevailing party in any such litigation shall be entitled to reasonable attorney’s fees and costs incurred in such an action.


























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8.      TERMINATION/POST-TERMINATION PAYMENTS .

(a) This Agreement, except for Section 7(d) above, will automatically terminate if Employee dies. In such case, the benefits available to his estate, heirs and beneficiaries shall be determined in accordance with the applicable benefit plans and programs then in effect, and the Company shall not have any further obligations under this Agreement. This Agreement, except for Section 7(d) above, will not survive Employee’s death, and will not inure to the benefit of his heirs, assigns and/or designated beneficiaries.

(b) The Company may terminate Employee’s employment at any time during the Employment Term for “Cause.” “Cause” shall be determined by the Company in its unfettered good faith discretion, but shall mean the occurrence of any one or more of the following (it being acknowledged and agreed that a Disability 1 of the Employee shall not be deemed to be Cause):

(i) a material failure by Employee to perform his duties of employment in a manner reasonably satisfactory to the Company after having been notified in writing of such specific performance deficiencies and having not less than thirty (30) days to correct the deficiencies;
(ii) failure or refusal to implement or follow reasonable and lawful directives of the Company if such breach is not cured (if curable) within 20 days after written notice thereof to the Employee by the Company;
(iii) a material breach of any material provisions of this Agreement, or a material violation of the then existing policies, procedures or rules of the Company, as applicable if such breach is not cured (if curable) within 20 days after written notice thereof to the Employee by the Company;
(iv) the commission of an act of fraud, embezzlement, theft, material misappropriation (whether or not related to employment with the Company) or the commission of or nolo contendere or guilty plea to any felony; or
(v) intentional misconduct materially injurious to the Company, its affiliates or subsidiaries, either monetarily or otherwise.

(c)(1) The Company may terminate Employee’s employment, at any time, other than for Cause as defined above. (2) Employee may terminate his employment at any time during the Employment Term with or without “Good Reason.” “Good Reason” means, without Employees prior written consent, one or more of the following events: (a) a material reduction in the Base Salary or a material reduction in the Target Bonus; (b) a material failure by the Company to pay
___________________________

1 “ Disability ” means Employee would be entitled to long-term disability benefits under the Company’s long term disability plan as in effect from time to time, without regard to any waiting or elimination period under such plan and assuming for the purpose of such determination that Employee is actually participating in such plan at such time. If the Company does not maintain a long-term disability plan, “Disability” means Employee’s inability to perform his duties and responsibilities hereunder due to physical or mental illness or incapacity that is expected to last for a consecutive period of 90 days or for a period of 120 days in any 365 day period as determined by the Company in its good faith judgment.










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in accordance with the terms of this Agreement; (c) a material diminution or adverse change in Employee’s duties, authority, responsibilities, reporting line or positions; (d) a Change in Control 2 ; provided, however, that prior to resigning for Good Reason, Employee shall give written notice to the Company of the facts and circumstances claimed to provide a basis for such resignation not more than thirty (30) days following his knowledge of such facts and circumstances or with respect to a Change in Control, not more than five (5) days following the occurrence of a Change in Control), and, if curable (with the understanding that the occurrence of a Change in Control is not curable), the Company shall have thirty (30) days after receipt of such notice to cure such facts and circumstances (and if so cured, then Employee shall not be permitted to resign with Good Reason in respect thereof). Any resignation with Good Reason shall be communicated to the Company by written notice, which shall include Employee’s date of termination of employment (which, except as set forth in the preceding sentence or in the event of a Change in Control, shall be a date at least ten (10) days after delivery of such notice and the expiration of such cure period and not later than 60 days thereafter and which, in the case of a Change in Control, shall be within ten (10) days following the effective date of the Change in Control).

(d) If the Company terminates Employee’s employment other than for Cause as defined above or if Employee resigns for Good Reason during (and not after) the Employment Term, the Company will provide him within twenty (20) days after the date on which Employee’s employment terminates with a Waiver and General Release (the “ Waiver ”) of any and all legally-waivable claims against the Company and its past, present, and future parents, divisions, subsidiaries, partnerships, other affiliates, and other related entities (whether or not they are wholly owned); and the past, present, and future owners, trustees, fiduciaries, administrators, shareholders, directors, officers, partners, agents, representatives, members, associates, employees, and attorneys of each entity listed above, and provided that on or within twenty one (21) days after the date on which Employee receives the Waiver or such longer period as may be applicable under the ADEA, Employee: i) signs, dates and returns the Waiver to the Company; and ii) does not revoke the Waiver in accordance with its terms, the Company will, as liquidated damages (“ Liquidated Damages ”), pay Employee (i) twelve (12) months of his Base Salary, less all required or authorized deductions, said payments to be made in bi-weekly payments with the first payment to be made within fifteen (15) days after the date on which the Company receives a signed and dated copy of the Waiver from Employee except that if later, to the extent required by Section 9, such first payment shall be made within the first five (5) days of the calendar year following the calendar year of Employee’s termination of employment if the review period for the Waiver could extend into such next calendar year; (ii) any unpaid Annual Bonus with respect to the calendar year immediately preceding the calendar year of termination of employment, (iii) a pro-rata amount of the Annual Bonus based on actual performance with respect to the calendar year of termination of employment, based on the number of days worked in such calendar year, said payment to be made at the time and in the same manner as other senior executive officers of

___________________________
2 “ Change in Control ” is defined in Exhibit A.








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the company, (iv) accelerated vesting of all outstanding unvested equity awards granted under
Section 4(c) prior to the date of termination that would have vested in the ordinary course over
the one (1) year period following such termination.

(e) The parties expressly agree that the Company’s payment of Liquidated Damages pursuant to Section 8(d) above precludes Employee from eligibility for or entitlement to any and all other damages, including but not limited to compensation, benefits or perquisites, subject to any benefits that may be vested under the terms of applicable benefit plans in which he participates. Notwithstanding any other provision of this Agreement, Employee shall not participate in or be eligible under (and Employee hereby waives participation in) any other severance or severance-related plan or program of the Company or any of its affiliates in effect at any time (whether his employment terminates or is terminated with or without Cause during the Employment Term).

9.      Compliance with IRS Code Section 409A .

It is intended that any amounts and benefits payable under this Agreement will be exempt from or comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), and treasury regulations relating thereto, so as not to subject Employee to the payment of any interest and tax penalty which may be imposed under Section 409A of the Code, and this Agreement shall be interpreted and construed accordingly, provided, however, that the Company and its affiliates shall not be responsible for any such interest and tax penalties. All references in this Agreement to Employee’s termination of employment shall mean a separation from service within the meaning of Section 409A of the Code. The timing of the payments or benefits provided herein may be modified to so comply with Section 409A of the Code. Any reimbursement payable to Employee pursuant to this Agreement shall be conditioned on the submission by Employee of all expense reports reasonably required by the Company under any applicable expense reimbursement policy, and shall be paid to Employee in accordance with Company practices following receipt of such expense reports (or invoices), but in no event later than the last day of the calendar year following the calendar year in which Employee incurred the reimbursable expense. Notwithstanding any other provision in this Agreement, if on the date of Employee’s separation from service (as defined in Section 409A of the Code) (i) the Company or any of its affiliates is a publicly traded corporation and (ii) Employee is a “specified employee,” as defined in Section 409A of the Code, then to the extent any amount payable under this Agreement upon Employee’s separation from service constitutes the payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, that under the terms of this Agreement would be payable prior to the six (6) month anniversary of Employee’s separation from service, such payment shall be delayed until the earlier to occur of (x) the first day of the month following the six (6) month anniversary of Employee’s separation from service or (y) the date of Employee’s death.

10.      NOTICES .
  










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Any notice, request, or other communication required or permitted to be given hereunder shall be made to the following addresses or to any other address designated by either of the parties hereto by notice similarly given: (a) if to the Company, to Tribune Publishing Company, LLC, c/o Chief Executive Officer, 435 N. Michigan Avenue, Chicago, IL 60611; and (b) if to Employee, to his last known home address in the Company’s records. All such notices, requests, or other communications shall be sufficient if made in writing either (i) by personal delivery to the party entitled thereto, (ii) by certified mail, return receipt requested, or (iii) by express courier service with proof of delivery, and shall be effective upon personal delivery, upon the fourth (4th) day after mailing by certified mail, or upon the second (2nd) day after sending by express courier service.


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11.      COMPANY PROPERTY

Except as reasonable or appropriate in furtherance of Employee’s employment, Employee will not remove from the Company’s premises any property of the Company or its affiliates, including without limitation any documents or things containing any Confidential Information, computer programs and drives or storage devices of any kind (portable or otherwise), files, forms, notes, records, charts, or any copies thereof (collectively, " Property "). Upon any termination at any time by either party of Employee's employment for any or no reason, Employee shall return to the Company, and shall not alter, delete or destroy, any and all Property, including without limitation any and all laptops and other computer equipment, iPhones, iPads, laptops, blackberries and similar devices, cellphones, credit cards, keys and other access cards, and electronic and hardcopy files.

12.      NONDISPARAGEMENT.

Employee agrees that he will not at any time during his employment with the Company (whether or not such employment continues beyond the Employment Term) or thereafter take (directly or indirectly, individually or in concert with others) any actions or make any communications calculated or likely to have the effect of undermining, disparaging or otherwise reflecting negatively upon the reputation, goodwill, or standing in the community of the Company, or any of its respective subsidiaries, business units, other affiliates, officers, directors, employees and/or agents, provided that nothing herein shall prohibit Employee from giving truthful testimony or evidence to a governmental entity, or if properly subpoenaed or otherwise required to do so under applicable law.

13.      ASSIGNMENT .

This is an Agreement for the performance of personal services by Employee and may not be assigned by Employee. This Agreement may be assigned or transferred to, and shall be binding upon and shall inure to the benefit of: (a) the Company, or its subsidiaries, business units, or other affiliates and its/their respective legal successors; and (b) any person or entity that at any time (whether by merger, purchase or otherwise) acquires all or substantially all of the assets, ownership interests or business of the Company.

14.
GOVERNING LAW; INTERPRETATION OF THE AGREEMENT.

This Agreement shall be construed and interpreted in accordance with the laws of the State of Illinois (without giving effect to the choice of law principles thereof). Employee and the Company acknowledge that each party had an equal opportunity to review and/or modify the provisions set forth in this Agreement. Thus, in the event of any misunderstanding, ambiguity or dispute concerning this Agreement's provisions or their interpretation, no rule of construction shall be applied that would result in having this Agreement interpreted against either party. The language of all parts in this Agreement shall be construed as a whole, according to fair meaning, and not strictly for or against any party. The headings provided in boldface are inserted for the

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convenience of the parties and shall not be construed to limit or modify the text of this Agreement.

15.
COMPLETE AGREEMENT .

This Agreement embodies the entire agreement and understanding of the parties hereto with regard to the matters described herein and supersedes any and all prior and/or contemporaneous agreements and understandings, oral or written, actual or alleged, between said parties regarding such matters, including without limitation concerning Employee’s compensation arrangements or other terms and conditions of employment (if any), and any actual or alleged prior employment agreements with or involving the Company or any of its affiliates. This Agreement cannot be amended, modified, supplemented or altered except by written amendment signed by Employee and the Chief Executive Officer of the Company.

16.      SEVERABILITY/REFORMATION .

Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law. If any provision of this Agreement is found by a court of competent jurisdiction to be unreasonable or otherwise unenforceable, it is the purpose and intent of the parties that any such provision be deemed modified or limited so that, as modified or limited, such provision may be enforced to the fullest extent possible. If any provision of this Agreement is held to be prohibited by or invalid under applicable law (notwithstanding any attempted modification or limitation pursuant to the preceding sentence), such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
17.      SURVIVAL .

Except as provided in Section 8(a) above, the provisions of Section 2 and of Sections 7 through 17 (inclusive) of this Agreement shall survive any expiration of the Employment Term and any termination of Employee’s employment at any time (whether during or after the Employment Term) by either party with or without Cause, and shall not be limited or discharged by any alleged breach or misconduct on the part of the Company.

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18. MISCELLANEOUS .
This Agreement may be executed in two or more counterparts, or by facsimile transmission, each of which shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. The headings contained in this Agreement are for reference purposes only, and shall not affect the meaning or interpretation of this Agreement.

TONY HUNTER
TRIBUNE PUBLISHING COMPANY, LLC


_ /s/ Tony Hunter ________________
By: __ /s/ Jack Griffin ____________
Jack Griffin, CEO
        

Date: __ 8/27 ________________, 2015
Date: __ 8/27 _________________ _, 2015






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EXHIBIT A

“ Change in Control ” means the occurrence of any of the following events:
(a)      Consummation of a merger, consolidation, or other reorganization of the Company (“Business Combination”), sale of securities representing a majority of the voting equity securities the Company in a tender offer, equity placement, or other transaction, or the sale of all or substantially all of the Company’s business and/or assets as an entirety to (“Sale”), one or more entities that are not subsidiaries or affiliates of the Company, unless immediately following such Business Combination or Sale, (i) 50% or more of the total voting power of ( x ) the entity resulting from such Business Combination or the entity that has acquired all or substantially all of the business or assets of Tribune or the Company in a Sale (in either case, the “ Surviving Company ”), or ( y ) if a Sale, the ultimate parent entity that directly or indirectly has Beneficial Ownership of sufficient voting securities eligible to elect a majority of the board of directors (or the analogous governing body) of the Surviving Company (the “ Parent Company ”), is represented by the outstanding common voting securities of the Company, as applicable, that were outstanding immediately prior to such Business Combination or Sale (or, if applicable, is represented by shares into which the outstanding common voting securities of Tribune or the Company, as applicable, were converted or exchanged pursuant to such Business Combination or Sale), (ii) no Person is or becomes the Beneficial Owner, directly or indirectly, of more than 50% of the total voting power of the outstanding voting securities eligible to elect members of the board of directors (or the analogous governing body) of the Surviving Company (if a Business Combination) or the Parent Company (if a Sale), and (iii) at least a majority of the members of the board of directors (or the analogous governing body) of the Surviving Company (if a Business Combination) or the Parent Company (if a Sale) following the consummation of the Business Combination or Sale were members of the board of directors (or the analogous governing body) at the time of such board’s approval of the execution of the definitive agreement providing for such Business Combination or Sale or recommendation or approval of such tender offer, equity placement, or other transaction (terms capitalized but not otherwise defined in this subsection (a) of this footnote have the meaning set forth in Tribune’s 2014 Omnibus Incentive Plan); or
(b)      Individuals who on August 1, 2015 constituted the Board cease to constitute at least a majority thereof, unless the election, or the nomination for election by Tribune’s stockholders, of each new director was approved by a vote of at least two-thirds (2/3) of the directors then still in office who were directors on August 1, 2015 (including for these purposes, new members whose election or nomination was so approved), but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board.




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Exhibit 10.2
EMPLOYMENT AGREEMENT

This Employment Agreement (this “ Agreement ”) is entered into by and between Tribune Publishing Company, LLC (the “ Company ”), a Delaware limited liability company, and Timothy E. Ryan (“ Employee ”), an individual. In consideration of the mutual promises and covenants contained herein, and for good and valuable consideration, the receipt and sufficiency of which are acknowledged by both parties, the Company agrees to employ Employee and Employee agrees to accept employment with the Company upon the terms and conditions set forth herein.

1.     EMPLOYMENT TERM.

The term of Employee’s employment hereunder shall commence on September 8, 2015 (the “ Effective Date ”) and, unless terminated pursuant to Section 8 below, shall continue through October 6, 2018 (the “ Employment Term ”).

2.     FREEDOM TO ENTER INTO THIS AGREEMENT.

Employee represents and covenants that: (a) the execution, delivery and performance of this Agreement by him does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Employee is a party or by which Employee is bound; and (b) Employee is not a party to or bound by any employment agreement, noncompetition agreement, non-solicitation agreement, confidentiality agreement or other agreement or obligation with any other person or entity that would in any way restrict or otherwise affect his performance of this Agreement.

3.      TITLE AND EMPLOYMENT DUTIES .

During the Employment Term and subject to the terms of this Agreement:

(a) Employee’s title will be CEO, California News Group. Employee will have such duties and responsibilities as are customarily exercised by someone serving in such a capacity as well as such other duties commensurate with his title and position as the Company may assign him from time to time.

(b) Employee agrees to devote his full business time, attention, and energies to the business of the Company and further agrees that he will perform his duties in a diligent, lawful and trustworthy manner, that he will act in accordance with his title and responsibilities and otherwise conduct himself in accordance with the written business and employee policies and practices of the Company as applicable.


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(c) Employee will be based in and will work out of the Company’s office in Los Angeles. Company shall not relocate Employee to a different office outside the metropolitan area of Los Angeles, without Employee’s prior written consent.


4.     COMPENSATION.

During the Employment Term and subject to the terms of this Agreement:

(a) For the services rendered by Employee under this Agreement, the Company will pay Employee a gross base salary of Six Hundred Twenty-Five Thousand Dollars and Zero Cents ($625,000) per annum (the “ Base Salary ”). Employee’s Base Salary shall be payable, less all authorized or required deductions, in accordance with the Company’s then-effective payroll practices. The Company will periodically review Employee’s salary and may provide for salary increases during the Employment Term, such increases to be given, if given, in the discretion of the Company.

(b) Subject to Section 8 below, Employee shall have the opportunity to earn a discretionary annual management incentive bonus (“ Annual Bonus ”), with a target bonus opportunity of one hundred percent (100%) of his Base Salary (the “ Target Bonus ”), under a bonus plan to be established in good faith by the Company, based upon the achievement of both reasonably attainable annual Company and individual performance objectives as established by the Company. The Annual Bonus payable for any calendar year shall be paid, if paid, less all required or authorized deductions, at the time and in the manner such bonuses are paid to other similarly situated executives receiving annual bonus payments, in the calendar year following the year for which the bonus was earned, but in no event later than June 30 of the year following the year for which the bonus was earned. Notwithstanding the foregoing, Employee’s Annual Bonus for partial years in 2015 and 2018, if applicable, shall be determined as follows: For calendar year 2015, Employee’s Annual Bonus will be determined as follows: (i) a pro rata amount of the Annual Bonus Employee would have received under the Annual Bonus in effect for Employee for calendar year 2015 in his capacity as Publisher and Chief Executive Officer, The Baltimore Sun and The Morning Call (which provides a target bonus opportunity of 60% of his base salary in effect for such position) if his employment in that capacity had continued through the end of calendar year 2015 and the other conditions for payment had been made based on actual performance, based on the number of days worked in such capacity in 2015, plus (ii) a bonus amount equal to the Target Bonus, i.e., 100% of Employee’s Base Salary under this Agreement, pro-rated based on the number of days worked in Employee’s position as CEO, California News Group under this Agreement in calendar year 2015. For calendar year 2018, if after the end of the Employment Term and prior to the end of calendar year 2018, Employee’s employment terminates other than due to a termination by the Company for Cause (as defined below), Employee’s Annual Bonus for the partial year shall be a pro rata amount of the bonus earned under the bonus plan based on actual performance thereunder (based on Target Bonus and the number of days worked in such capacity in 2018), and such pro-rated bonus shall be paid, if paid, less all required or authorized deductions, at the time and in the manner such bonuses are paid to

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other similarly situated executives receiving annual bonus payments, in the calendar year following the year for which the bonus was earned, but in no event later than June 30 of the year following the year for which the bonus was earned.

(c) For the calendar years 2016, 2017 and 2018, Employee shall be granted a combination of restricted stock units (“ RSUs ”) and nonqualified stock options (“ Options ”) in Tribune Publishing Company’s common stock, valued in accordance with Black-Scholes or similar option-pricing model, with each of such annual awards having an aggregate fair value equal to five hundred and fifty thousand dollars ($550,000) based on the fair market value (the “ FMV ”) of the Tribune Publishing Company’s common stock on the date of grant.  The equity award each year shall be divided among the two types of awards as follows:  RSUs – 50% and Options – 50%.  The annual awards will be granted at the same time annual awards are granted to other similarly-situated executive officers of Tribune Publishing Company. The RSUs and Options shall be subject to such other terms as set forth in the applicable grant agreement and in the underlying equity plan as adopted by Tribune Publishing Company. Except as specifically provided otherwise in the grant agreement, if at all, and except as provided in Section 8 below, all unvested Options and RSUs shall terminate immediately upon termination of Employee’s employment for any reason and all vested Options shall terminate immediately upon termination of Employee’s employment by the Company with Cause, as defined below. Notwithstanding the foregoing, the annual grant of RSUs and Options is contingent upon approval by the stockholders of Tribune Publishing Company at its 2016 annual meeting of stockholders (expected to be held in May 2016) of a sufficient increase in the number of shares of common stock reserved under Tribune Publishing Company’s equity plan. If the additional shares are so approved, the vesting commencement date for the grant of RSUs and Options shall be March 1, 2016.

(d)    In addition, Employee shall be entitled to the payments and reimbursements provided for in Addendum 1 to this Agreement.

5.     BENEFITS.     

(a) While employed by the Company, Employee shall be entitled to participate in the benefit plans and programs (including without limitation such medical, dental, vision, life, disability, retirement and other health and welfare plans), as the Company may have or establish from time to time for its employees in which Employee would be entitled to participate pursuant to their then-existing terms, in accordance with the terms and requirements of such plans. The foregoing, however, is not intended and shall not be construed to require the Company to establish any such plans or to prevent the modification or termination of such plans once established, and no such action or failure thereof shall affect this Agreement. It is further understood and agreed that all benefits Employee may be entitled to while employed by the Company shall be based upon his Base Salary and not upon any bonus, incentive or equity compensation due, payable, or paid to Employee, except where, if at all, the benefit plan provides otherwise.


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(b) Employee will be eligible to receive four weeks (20 days) of paid vacation per calendar year, pro-rated for partial years, to be scheduled and approved in advance and taken in accordance with the Company’s vacation policies and practices applicable to the state in which Employee’s position is located.

6.     BUSINESS EXPENSES.

During the Employment Term, the Company shall reimburse Employee for reasonable travel and other expenses incurred in the performance of his duties hereunder as are customarily reimbursed to employees in accordance with the then-applicable expense reimbursement policies of the Company.

7.      RESTRICTIVE AGREEMENTS .

(a) During his employment with the Company (whether or not such employment continues beyond the Employment Term), Employee agrees that his employment is on an exclusive basis and that he: i) will not engage in any activity which is in conflict with his duties and obligations hereunder, whether or not such activity is pursued for gain, profit, or other pecuniary advantage; and ii) will not engage in any other activities which could harm the business or reputation of the Company or any of its affiliates.

(b) Employee agrees that during his employment with the Company (whether or not such employment continues beyond the Employment Term) and for twelve (12) months after the date on which his employment with the Company ends for any or no reason (whether terminated by him or by the Company), except as required in the performance of his duties for the Company, he will not: i) employ, either directly or indirectly, any person previously employed by the Company or any of its affiliates unless at such time such person is not then and has not been employed by the Company or any of its subsidiaries, business units, or other affiliates for at least six (6) months, or in any way solicit, entice, persuade or induce, either directly or indirectly, any person to terminate or refrain from renewing or extending their employment with the Company or any of its subsidiaries, business units, or other affiliates; or ii) intentionally interfere with the relationship of the Company with any person or entity who or which is a customer, client, supplier, developer, subcontractor, licensee or licensor or other business relation of the Company, or assist any other person or entity in doing so.

(c) As a consequence of his employment by the Company, Employee will be privy to the highest level of confidential and proprietary business information of the Company and its affiliates, not generally known by the public or within the industry and which, thereby, gives the Company and its affiliates a competitive advantage and which has been the subject of reasonable efforts by the Company and its affiliates to maintain such confidentiality. Except as required by law or as expressly authorized by the Company in furtherance of his employment duties, Employee shall not at any time, during his employment with the Company (whether or not such employment continues beyond

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the Employment Term) or thereafter, directly or indirectly use, disclose, or take any action which may result in the use or disclosure of, any Confidential Information. “ Confidential Information ” as used in this Agreement, includes all non-public confidential competitive, pricing, marketing, proprietary and other information or materials relating or belonging to the Company or any of its affiliates (whether or not reduced to writing), including without limitation all confidential or proprietary information furnished or disclosed to or otherwise obtained by Employee in the course of his employment, and further includes without limitation: computer programs; patented or unpatented inventions, discoveries and improvements; marketing, organizational, operating and business plans; strategies; research and development; policies and manuals; sales forecasts; personnel information (including without limitation the identity of Company employees, their responsibilities, competence and abilities, and compensation); medical information about employees; pricing and nonpublic financial information; current and prospective customer lists and information on customers or their employees; information concerning planned or pending acquisitions, investments or divestitures; and information concerning purchases of major equipment or property. Confidential Information does not include information that lawfully is or becomes generally and publicly known outside of the Company and its affiliates other than through Employee’s breach of this Agreement or breach by any person of some other obligation. Nothing herein prohibits Employee from disclosing Confidential Information as legally required pursuant to a validly issued subpoena or order of a court or administrative agency of competent jurisdiction, provided that Employee shall first promptly notify the Company if he receives a subpoena, court order or other order requiring any such disclosure, to allow the Company to seek protection therefrom in advance of any such legally compelled disclosure.

(d) Employee hereby acknowledges and agrees that the Company owns the sole and exclusive right, title and interest in and to any and all Works (as defined below), including without limitation all copyrights, trademarks, service marks, trade names, slogans, inventions (whether patentable or not), patents, trade secrets and other intellectual property and/or proprietary rights therein, including without limitation all rights to sue for infringement thereof (collectively, “ IP Rights ”). The Company’s right, title and interest in and to the Works includes, without limitation, the sole and exclusive right to secure and own copyrights and maintain renewals throughout the world, the right to modify and create derivative works of or from the Works without any payment of any kind to Employee, and the right to exclusively register or record any IP Rights in the Works in the Company’s name. Employee agrees that all Works shall be "works made for hire" for the Company as that term is defined in the copyright laws of the United States or other applicable laws. To the extent that any of the Works is determined not to constitute a work made for hire, or if any rights in any of the Works do not accrue to the Company as a work made for hire, Employee agrees that his signature on this Agreement constitutes an assignment (without any further consideration) to the Company of any and all of Employee’s respective IP Rights and other rights, title and interest in and to any and all Works. “ Works ” means any inventions, invention disclosures, developments, improvements, trade secrets, brands, logos, drawings, trademarks, service marks, trade names, documents, memoranda, data, software programs, object code, source code, ideas, original works of authorship, or other information that Employee conceives, creates, develops, discovers, makes or acquires, in

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whole or in part, either solely or jointly with another or others, during or pursuant to the course of his employment by the Company or its affiliates, and that relate directly or indirectly to the Company or any of its affiliates or their respective businesses, or to the Company’s or any of its affiliates’ actual or demonstrably anticipated research or development, and that are made through the use of any of the Company’s or any of its affiliates’ equipment, facilities, supplies, trade secrets or time, or that result from any work performed for the Company or any of its affiliates, or that is based on any information of, or provided to him by, the Company or any of its affiliates. Employee hereby is and has been notified by the Company, and understands that the foregoing provisions of this Section 7(d) do not apply to an invention for which no equipment, supplies, facilities or trade secret information of the Company or any of its affiliates was used and which was developed entirely on his own time, unless: (a) the invention relates at the time of conception or reduction to practice (i) to the business of the Company or any of its affiliates or (ii) to the Company’s or any of its affiliates’ actual or demonstrably anticipated research and development, or (b) the invention results from any work performed by Employee for the Company or any of its affiliates.

(e) It is mutually agreed and stipulated between Employee and the Company that the covenants set forth in Sections 7(a) through 7(d) of this Agreement are necessary to protect the legitimate business interests of the Company and its affiliates and are reasonable, including without limitation in time and scope.
    
(f) The amount of actual or potential damages resulting from Employee’s breach of any provision of Section 7(a) through 7(d) of this Agreement will be inherently difficult to determine with precision and, further, any breach could not be reasonably or adequately compensated in money damages. Accordingly, any breach by Employee of any provision of Section 7(a) through 7(d) of this Agreement will result in immediate and irreparable injury and harm to the Company and its affiliates for which the Company and its affiliates will have no adequate remedy at law. The Company and/or its affiliates, thus, will be entitled to temporary, preliminary and permanent injunctive relief to prevent any such actual or threatened breach, without posting a bond or other security. The Company’s and/or its affiliates’ resort to such equitable relief will not waive any other rights that any of them may have to damages or other relief, and the Company and/or its affiliates shall be entitled to reasonable attorney’s fees and costs incurred in pursuing such an action should any of them prevail.

8.     TERMINATION/POST-TERMINATION PAYMENTS .

(a) This Agreement, except for Section 7(d) above and this Section 8(a), will automatically terminate if Employee dies. In such case; (i) the benefits available to his estate, heirs and beneficiaries shall be determined in accordance with the applicable benefit plans and programs then in effect; and (ii) within sixty (60) days of the date of death, the Company shall pay Employee any unpaid Base Salary and any other amounts due under this Agreement through the date of death. Except as set forth above, the Company shall not have any further obligations under this Agreement. This Agreement,

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except for Section 7(d) above and this Section 8(a), will not survive Employee’s death, and will not inure to the benefit of his heirs, assigns and/or designated beneficiaries.

(b) The Company may terminate Employee’s employment at any time during the Employment Term for “Cause.” “Cause” shall be determined by the Company reasonably and in good faith, but shall mean the occurrence of any one or more of the following (it being acknowledged and agreed that a Disability 1 of the Employee shall not be deemed to be Cause) :

(i) a material failure by Employee to perform his duties of employment diligently and competently after having been notified in writing of such specific performance deficiencies and having not less than thirty (30) days to correct the deficiencies;
(ii) failure or refusal to implement or follow reasonable, material and lawful directives of the Company, if such breach is not cured (if curable) within 20 days after written notice thereof to the Employee by the Company;
(iii) a material breach of any material provisions of this Agreement, or a material violation of the then existing policies, procedures or rules of the Company, as applicable, if such breach is not cured (if curable) within 20 days after written notice thereof to the Employee by the Company;
(iv) the commission of an act of fraud, embezzlement, theft, material misappropriation (whether or not related to employment with the Company) or the commission of or nolo contendere or guilty plea to any felony; or
(v) intentional misconduct materially injurious to the Company, its affiliates or subsidiaries, either monetarily or otherwise.

(c)(1) The Company may terminate Employee’s employment, at any time, other than for Cause as defined above. (2) Employee may terminate his employment at any time during the Employment Term with or without “Good Reason.” “Good Reason” means one or more of the following events: (a) a reduction in the Base Salary, a reduction in the Target Bonus, or a reduction in the relocation benefits described in the Addendum 1 hereto, in each case without Employee’s prior written consent; (b) a failure by the Company to pay in accordance with the terms of this Agreement without Employee’s prior written consent; (c) a material diminution or adverse change in Employee’s duties, authority, responsibilities, reporting line or positions without Employee’s prior written consent; or (d) a Change in Control 2 ; provided, however, that prior to resigning for Good Reason,
___________________________
1 “ Disability ” means Employee would be entitled to long-term disability benefits under the Company’s long term disability plan as in effect from time to time, without regard to any waiting or elimination period under such plan and assuming for the purpose of such determination that Employee is actually participating in such plan at such time. If the Company does not maintain a long-term disability plan, “Disability” means Employee’s inability to perform his duties and responsibilities hereunder due to physical or mental illness or incapacity that is expected to last for a consecutive period of 90 days or for a collective period of 120 days in any 365 day period as determined by the Company in its good faith judgment.
2 “ Change in Control ” means either a “TPC Change in Control” or a “CNG Change in Control”, each as defined in Exhibit A.

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Employee shall give written notice to the Company of the facts and circumstances claimed to provide a basis for such resignation not more than thirty (30) days following his knowledge of such facts and circumstances or with respect to a Change in Control, not more than five (5) days following the occurrence of a Change in Control), and, if curable (with the understanding that the occurrence of a Change in Control is not curable), the Company shall have thirty (30) days after receipt of such notice to cure such facts and circumstances (and if so cured, then Employee shall not be permitted to resign with Good Reason in respect thereof). Any resignation with Good Reason shall be communicated to the Company by written notice, which shall include Employee’s date of termination of employment (which, except as set forth in the preceding sentence or in the event of a Change in Control, shall be a date at least ten (10) days after delivery of such notice and the expiration of such cure period and not later than 60 days thereafter and which, in the case of a Change in Control, shall be within ten (10) days following the effective date of the Change in Control).

(d)(1) If the Company terminates Employee’s employment other than for Cause as defined above or if Employee resigns for Good Reason (other than Change of Control) during (and not after) the Employment Term, the Company will provide him within ten (10) days after the date on which Employee’s employment terminates with a Waiver and General Release (the “ Waiver ”) of any and all legally-waivable claims against the Company and its past, present, and future parents, divisions, subsidiaries, partnerships, other affiliates, and other related entities (whether or not they are wholly owned); and the past, present, and future owners, trustees, fiduciaries, administrators, shareholders, directors, officers, partners, agents, representatives, members, associates, employees, and attorneys of each entity listed above (a copy of the Waiver is attached as Exhibit B), and provided that on or within twenty one (21) days after the date on which Employee receives the Waiver or such longer period as may be applicable under the ADEA, Employee: i) signs, dates and returns the Waiver to the Company; and ii) does not revoke the Waiver in accordance with its terms, the Company will, as consideration (“ Consideration ”), (A) pay Employee not later than sixty (60) days of the date of Employee’s termination of employment: (i) a lump sum amount equal to twelve (12) months of his Base Salary, less all required or authorized deductions, (ii) any unpaid Annual Bonus with respect to the calendar year immediately preceding the calendar year of termination of employment; (iii) a pro-rata amount of the Target Bonus based on the number of days worked in such calendar year, and (B) Employee shall be entitled to accelerated vesting of all outstanding unvested equity awards granted under Section 4(c) prior to the date of termination that would have vested in the ordinary course over the one (1) year period following such termination. Notwithstanding the preceding, to the extent that any amount payable under this Section 8(d)(1) constitutes nonqualified deferred compensation within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”): i) Section 9 shall, if applicable, apply to such portion of the payment which is nonqualified deferred compensation, and ii) if the sixty-(60) day period following Employee’s termination of employment spans two calendar years, the portion of such payment which is nonqualified deferred compensation shall be paid in the second calendar year.


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(d)(2) If Employee resigns for Good Reason due to a Change of Control or is terminated without Cause by the Company on or after a Change of Control, in either case, during (and not after) the Employment Term, the Company will provide him within ten (10) days after the date on which Employee’s employment terminates with the Waiver of any and all legally-waivable claims against the Company and its past, present, and future parents, divisions, subsidiaries, partnerships, other affiliates, and other related entities (whether or not they are wholly owned); and the past, present, and future owners, trustees, fiduciaries, administrators, shareholders, directors, officers, partners, agents, representatives, members, associates, employees, and attorneys of each entity listed above (a copy of the Waiver is attached as Exhibit B), and provided that on or within twenty one (21) days after the date on which Employee receives the Waiver or such longer period as may be applicable under the ADEA, Employee: i) signs, dates and returns the Waiver to the Company; and ii) does not revoke the Waiver in accordance with its terms, the Company will, as Consideration, (A) pay Employee not later than sixty (60) days of the date of Employee’s termination of employment: (i) a lump sum amount equal to (a) in the case of a TPC Change of Control, twelve (12) months of his Base Salary plus one (1) year of Target Bonus, or (b) in the case of a CNG Change of Control, twenty-four (24) months of his Base Salary plus two (2) years of Target Bonus, in either case, less all required or authorized deductions; and (ii) any unpaid Annual Bonus with respect to the calendar year immediately preceding the calendar year of termination of employment; and (B) Employee shall be entitled to accelerated vesting of all outstanding unvested equity awards granted under Section 4(c) prior to the date of termination that would have vested in the ordinary course over the one (1) year period following such termination. Notwithstanding the preceding, to the extent that any amount payable under this Section 8(d)(2) constitutes nonqualified deferred compensation within the meaning of Section 409A of the Code: i) Section 9 shall, if applicable, apply to such portion of the payment which is nonqualified deferred compensation, and ii) if the sixty-(60) day period following Employee’s termination of employment spans two calendar years, the portion of such payment which is nonqualified deferred compensation shall be paid in the second calendar year.

(e) The parties expressly agree that the Company’s payment of Consideration pursuant to Section 8(d) above precludes Employee from eligibility for or entitlement to any and all other payments, including but not limited to compensation, benefits or perquisites, subject to any earned but unpaid wages and accrued but unpaid vacation as of the date of termination as well as benefits that may be vested under the terms of applicable benefit plans in which he participates. Notwithstanding any other provision of this Agreement, Employee shall not participate in or be eligible under (and Employee hereby waives participation in) any other severance or severance-related plan or program of the Company or any of its affiliates in effect at any time (whether his employment terminates or is terminated with or without Cause during the Employment Term).
9.     COMPLIANCE WITH IRS CODE SECTION 409A .

It is intended that any amounts and benefits payable under this Agreement will be exempt from or comply with Section 409A of the Code, and treasury regulations relating thereto, so as not to subject

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Employee to the payment of any interest and tax penalty which may be imposed under Section 409A of the Code, and this Agreement shall be interpreted and construed accordingly, provided, however, that the Company and its affiliates shall not be responsible for any such interest and tax penalties. All references in this Agreement to Employee’s termination of employment shall mean a separation from service within the meaning of Section 409A of the Code. The timing of the payments or benefits provided herein may be modified to so comply with Section 409A of the Code. Any reimbursement payable to Employee pursuant to this Agreement shall be conditioned on the submission by Employee of all expense reports reasonably required by the Company under any applicable expense reimbursement policy, and shall be paid to Employee in accordance with Company practices following receipt of such expense reports (or invoices), but in no event later than the last day of the calendar year following the calendar year in which Employee incurred the reimbursable expense. Notwithstanding any other provision in this Agreement, if on the date of Employee’s separation from service (as defined in Section 409A of the Code) (i) the Company or any of its affiliates is a publicly traded corporation and (ii) Employee is a “specified employee,” as defined in Section 409A of the Code, then to the extent any amount payable under this Agreement upon Employee’s separation from service constitutes the payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, that under the terms of this Agreement would be payable prior to the six (6) month anniversary of Employee’s separation from service, such payment shall be delayed until the earlier to occur of (x) the first day of the month following the six (6) month anniversary of Employee’s separation from service or (y) the date of Employee’s death.

10.     NOTICES .
  
Any notice, request, or other communication required or permitted to be given hereunder shall be made to the following addresses or to any other address designated by either of the parties hereto by notice similarly given: (a) if to the Company, to Tribune Publishing Company, LLC, c/o Chief Executive Officer, 435 N. Michigan Avenue, Chicago, IL 60611; and (b) if to Employee, to his last known home address in the Company’s records. All such notices, requests, or other communications shall be sufficient if made in writing either (i) by personal delivery to the party entitled thereto, (ii) by certified mail, return receipt requested, or (iii) by express courier service with proof of delivery, and shall be effective upon personal delivery, upon the fourth (4th) day after mailing by certified mail, or upon the second (2nd) day after sending by express courier service.

11.     COMPANY PROPERTY

Except as required in furtherance of Employee’s employment, Employee will not remove from the Company’s premises any property of the Company or its affiliates, including without limitation any documents or things containing any Confidential Information, computer programs and drives or storage devices of any kind (portable or otherwise), files, forms, notes, records, charts, or any copies thereof (collectively, " Property "). Upon any termination at any time by either party of Employee's employment for any or no reason, Employee shall return to the Company, and shall not alter, delete

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or destroy, any and all Property, including without limitation any and all laptops and other computer equipment, iPhones, iPads, laptops, blackberries and similar devices, cellphones, credit cards, keys and other access cards, and electronic and hardcopy files.

12.     NONDISPARAGEMENT.

Employee agrees that he will not at any time during his employment with the Company (whether or not such employment continues beyond the Employment Term) or thereafter take (directly or indirectly, individually or in concert with others) any actions or make any communications calculated or likely to have the effect of materially undermining, disparaging or otherwise reflecting negatively upon the reputation, goodwill, or standing in the community of the Company, or any of its respective subsidiaries, business units, other affiliates, officers, directors, employees and/or agents, provided that nothing herein shall prohibit Employee from giving truthful testimony or evidence to a governmental entity, or if properly subpoenaed or otherwise required to do so under applicable law.
 
13.     ASSIGNMENT .

This is an Agreement for the performance of personal services by Employee and may not be assigned by Employee. This Agreement may be assigned or transferred to, and shall be binding upon and shall inure to the benefit of: (a) the Company, or its subsidiaries, business units, or other affiliates and its/their respective legal successors; and (b) any person or entity that at any time (whether by merger, purchase or otherwise) acquires all or substantially all of the assets, ownership interests or business of the Company.

14.          GOVERNING LAW; INTERPRETATION OF THE AGREEMENT .

This Agreement shall be construed and interpreted in accordance with the laws of the State of California (without giving effect to the choice of law principles thereof). Employee and the Company acknowledge that each party had an equal opportunity to review and/or modify the provisions set forth in this Agreement. Thus, in the event of any misunderstanding, ambiguity or dispute concerning this Agreement's provisions or their interpretation, no rule of construction shall be applied that would result in having this Agreement interpreted against either party. The language of all parts in this Agreement shall be construed as a whole, according to fair meaning, and not strictly for or against any party. The headings provided in boldface are inserted for the convenience of the parties and shall not be construed to limit or modify the text of this Agreement.

15.
COMPLETE AGREEMENT .

This Agreement (and its attachments which include an Addendum 1, describing additional terms related to certain allowances available to Employee, Exhibit A, defining the terms “TPC Change of Control” and “CNG Change of Control” and Exhibit B, attached the form of Waiver) embodies the entire agreement and understanding of the parties hereto with regard to the matters described

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herein and supersedes any and all prior and/or contemporaneous agreements and understandings, oral or written, actual or alleged, between said parties regarding such matters, including without limitation concerning Employee’s compensation arrangements or other terms and conditions of employment (if any), and any actual or alleged prior employment agreements with or involving the Company or any of its affiliates. This Agreement cannot be amended, modified, supplemented or altered except by written amendment signed by Employee and the Chief Executive Officer of the Company.

16.     SEVERABILITY/REFORMATION .
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law. If any provision of this Agreement is found by a court of competent jurisdiction to be unreasonable or otherwise unenforceable, it is the purpose and intent of the parties that any such provision be deemed modified or limited so that, as modified or limited, such provision may be enforced to the fullest extent possible. If any provision of this Agreement is held to be prohibited by or invalid under applicable law (notwithstanding any attempted modification or limitation pursuant to the preceding sentence), such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
17.     SURVIVAL .

Except as provided in Section 8(a) above, the provisions of Section 2 and of Sections 7 through 17 (inclusive) of this Agreement shall survive any expiration of the Employment Term and any termination of Employee’s employment at any time (whether during or after the Employment Term) by either party with or without Cause, and shall not be limited or discharged by any alleged breach or misconduct on the part of the Company.

18.     MISCELLANEOUS .

This Agreement may be executed in two or more counterparts, or by facsimile transmission, each of which shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. The headings contained in this Agreement are for reference purposes only, and shall not affect the meaning or interpretation of this Agreement.
Timothy E. Ryan
TRIBUNE PUBLISHING COMPANY, LLC

_/s/ Timothy E. Ryan _________
By: _ /s/ Jack Griffin ___________
Jack Griffin, CEO
        
Date: __ Sept. 7 ________, 2015
Date: __ Sept. 7 __________, 2015

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EXHIBIT A

“ TPC Change in Control ” means the occurrence of any of the following events with the “Applicable Company” defined as “Tribune Publishing Company, LLC” or “Tribune Publishing Company”, and “ CNG Change in Control ” means the occurrence of any of the following events with the “Applicable Company” defined as “Los Angeles Times Communications LLC” (it being understood that a TPC Change in Control shall not be deemed to also trigger a CNG Change in Control):
(a)    Consummation of a merger, consolidation, or other reorganization of the Applicable Company with or into (“ Business Combination ”), sale of securities representing a majority of the voting equity securities of the Applicable Company in a tender offer, equity placement, or other transaction, or the sale of all or substantially all of the Applicable Company’s business and/or assets as an entirety to (“ Sale ”), one or more entities that are not subsidiaries or affiliates of the Applicable Company, unless immediately following such Business Combination or Sale, (i) 50% or more of the total voting power of ( x ) the entity resulting from such Business Combination or the entity that has acquired all or substantially all of the business or assets of the Applicable Company in a Sale (in either case, the “ Surviving Company ”), or ( y ) if a Sale, the ultimate parent entity that directly or indirectly has Beneficial Ownership of sufficient voting securities eligible to elect a majority of the board of directors (or the analogous governing body) of the Surviving Company (the “ Parent Company ”), is represented by the outstanding common voting securities of the Applicable Company, as applicable, that were outstanding immediately prior to such Business Combination or Sale (or, if applicable, is represented by shares into which the outstanding common voting securities of the Applicable Company were converted or exchanged pursuant to such Business Combination or Sale), (ii) no Person is or becomes the Beneficial Owner, directly or indirectly, of more than 50% of the total voting power of the outstanding voting securities eligible to elect members of the board of directors (or the analogous governing body) of the Surviving Company (if a Business Combination) or the Parent Company (if a Sale), and (iii) at least a majority of the members of the board of directors (or the analogous governing body) of the Surviving Company (if a Business Combination) or the Parent Company (if a Sale) following the consummation of the Business Combination or Sale were members of the board of directors (or the analogous governing body) at the time of such board’s approval of the execution of the definitive agreement providing for such Business Combination or Sale or recommendation or approval of such tender offer, equity placement, or other transaction (terms capitalized but not otherwise defined in this subsection (a) of this Exhibit have the meaning set forth in Tribune Publishing Company’s 2014 Omnibus Incentive Plan); or
(b)    Individuals who on September 8, 2015 constituted the board of directors (or equivalent for a limited liability company, if applicable) of the Applicable Company (the “ Board ”) cease to constitute at least a majority thereof, unless the election, or the nomination for election by the stockholders (or member(s), if applicable) of the Applicable Company, of each new director was approved by a vote of at least two-thirds (2/3) of the directors then still in office who were directors on September 8, 2015 (including for these purposes, new members whose election or nomination

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was so approved), but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board.


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EXHIBIT B

Form of Waiver

(To Be Attached)


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WAIVER AND GENERAL RELEASE AGREEMENT
This Waiver and General Release Agreement (“Waiver and Release”) is made by and between INSERT NAME (“you” or “Executive”) and Los Angeles Times Communications LLC (“Company” or “LATC”), a subsidiary of Tribune Publishing Company, (together “Parties”) to set forth the Parties’ agreement concerning the terms and conditions that govern the termination of Executive’s employment relationship with the Company. The Parties mutually agree as set forth herein.
1. Separation Date . The Company hereby exercises its right under that certain Employment Agreement by and between Executive dated INSERT DATE (the “Employment Agreement”), to terminate the employment of Executive without cause. The employment relationship between the Company and Executive is terminated, effective INSERT DATE (“Separation Date”). From and after the Separation Date, there shall be no employment relationship between Executive and either the Company itself or any subsidiary, parent, division, entity, agent, shareholder, or affiliate of the Company. Executive agrees to execute all additional documents and take such further steps as may be required to effectuate his termination from any and all positions, titles, duties, authorities, and responsibilities with, arising out of, or relating to the Executive’s employment.
2. Final Pay, Expenses, and Discontinuation of Benefits . Executive’s wages, salary, and compensation, and his participation in the benefit plans and programs in which active Company employees participate shall be discontinued as follows:
a.     Salary and Expenses . The Company will pay Executive at his normal salary rate in accordance with the Company’s standard payroll practices through the Separation Date. Executive will be reimbursed for any unreimbursed expenses incurred prior to the Separation Date per Company policy. Reimbursement requests must be submitted no later than 30 days after the Separation Date.
b.     Vacation Pay . All vacation pay that Executive has earned and accrued and which remains unused as of the Separation Date will be paid to Executive on the Separation Date.
c.     Benefit Plans and Programs . As of the Separation Date, Executive will cease to receive, accrue, or be eligible for coverage or benefits under benefit plans and programs provided to employees of the Company, with the sole exception of the specific benefits promised in this Waiver and Release. Any vested benefits to which Executive may be entitled under the pension, 401(k), or other retirement plans of the Company shall be provided to Executive in accordance with the terms of those plans, including the terms that govern the time and form of payment of benefits. Upon termination of the Executive’s medical benefits, regardless of signing this Waiver and Release, Executive will be eligible to convert his medical benefits in accordance with COBRA provisions. COBRA notification will be mailed directly to Executive.
3. Separation Benefits . In exchange for Executive’s promises set forth in this Waiver and Release, and contingent upon Executive’s valid execution of this Waiver and Release without revocation, the Company will provide Executive with the Separation Benefits described in this Section 3 in accordance with the Employment Agreement.

1


a.     Liquidated Damages. The Company will pay Executive as liquidated damages pursuant to the Employment Agreement, the sum of INSERT AMOUNT ($000,000.00), the equivalent of INSERT AMOUNT , less applicable deductions and withholdings that are required or were previously authorized or agreed (“Liquidated Damages”). Liquidated Damages will be paid to Executive within ten (10) days after the date on which the Company receives a signed and dated copy of this Waiver and Release from Executive, and provided that this Waiver and Release is validly executed within the time period allowed in Section 7 below. The Liquidated Damages payment shall not be eligible for 401(k) plan deductions or counted for purposes of calculating any pension or retirement benefit.
b.     Prior Equity Awards . As provided in the Employment Agreement, the vesting of all outstanding unvested restricted stock units (“RSUs”) and nonqualified stock options (“Options”) granted prior to the Separation Date that would have vested in the ordinary course over the one-year period following the Separation Date, is accelerated.
c.     Understanding . Executive acknowledges that, pursuant to and in accordance with, the Employment Agreement, he is not entitled to any additional payment or benefit that is not expressly promised or described in this Waiver and Release, and he expressly hereby waives any claim or entitlement to any other severance benefit to which he otherwise may be entitled under any other plan or program of the Company.
d.     Internal Revenue Code 409A . To the extent applicable, it is intended that the compensation arrangements under this Waiver and Release be in full compliance with Section 409A of the Internal Revenue Code (“Section 409A”). This Waiver and Release shall be construed in a manner to give effect to such intention. In no event whatsoever (including, but not limited to, as a result of this section or otherwise) shall the Company be liable for any tax, interest or penalties that may be imposed on Executive under Section 409A. The Company shall have no obligation to indemnify or otherwise hold Executive harmless from any or all such taxes, interest or penalties, or liability for any damages related thereto. Executive acknowledges that he has been advised to obtain independent legal, tax or other counsel in connection with Section 409A.
4. Release of Claims .
a.    In exchange for the Separation Benefits described in Section 3, and subject only to the exclusions of Section 4(c) below, Executive hereby RELEASES the Company, its parents, shareholders, subsidiaries, affiliates, predecessors, successors, assigns, related companies or entities, its and their employee benefit plans and administrators, and any and all of its and their respective current and former officers, directors, partners, insurers, agents, representatives, attorneys, accountants, actuaries, trustees, fiduciaries, shareholders, and employees (“Released Parties”) from any and all claims, demands, or causes of action which Executive or Executive’s heirs, executors, administrators, agents, attorneys, representatives, or assigns (all collectively included in the term “Executive” for purposes of this release), has, had or may have against any of the Released Parties, based on any events or circumstances arising or occurring on or before the date of Executive’s execution of this Waiver and Release, including, but not limited to, any claims relating to Executive’s employment or termination of employment. Executive also waives and releases any rights of continued employment, reinstatement, or

2


reemployment with any of the Released Parties and hereby agrees not to seek employment with any of the Released Parties after the date of this Waiver and Release.
b.    Subject only to the exclusions in Section 4(c) below, Executive expressly agrees, understands, and acknowledges that this is a general release that, to the fullest extent permitted by law, waives, surrenders, and extinguishes any and all claims that Executive has or may have against any of the Released Parties, including, any claims arising from or relating in any way to his employment relationship or the termination of his employment relationship with the Company, including claims which could arise under Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of 1990, as amended, the Workers Adjustment and Retraining Notification Act, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the California Constitution, the California Fair Employment and Housing Act, the California Family Rights Act, the California Labor Code, the California Unruh Act, any public policy, contract, tort, or common law, or any allegation for costs, fees, or other expenses including attorneys’ fees, and any and all other federal, state and local laws or obligations regulating the employment relationship between the parties, or by reason of any matter, cause or thing whatsoever, whether known or unknown (“Claims”), except for claims for enforcement of his rights under this Waiver and Release, claims that may arise after the date Executive signs this Waiver and Release, and claims that cannot be waived as a matter of law.
In addition, nothing herein shall prevent Executive from filing a charge or complaint with the Equal Employment Opportunity Commission (“EEOC”) or similar federal or state agency or Executive’s ability to participate in any investigation or proceeding conducted by such agency; provided, however, that pursuant to Section 3, Executive is waiving any right to recover monetary damages or any other form of personal relief in connection with any such charge, complaint, investigation or proceeding. To the extent Executive receives any personal or monetary relief in connection with any such charge, complaint, investigation or proceeding, the Company will be entitled to an offset for the payments made pursuant to Section 2 of this Waiver and Release.
c.     Claims Not Released . The claims released under Section 4 of this Waiver and Release do not include any claim or cause of action based on any of the following: (a) the right to vested benefits under any pension or retirement plan; (b) the right to continued benefits as required by COBRA; (c) any right to receive workers’ compensation benefits or unemployment insurance as required by applicable law; (d) the right to challenge the validity or enforceability of this Waiver and Release under the Older Workers Benefit Protection Act (“OWBPA”); (e) any claim to enforce the terms of this Waiver and Release; or (f) any claim which cannot be waived as a matter of law. Additionally, Executive does not waive or release any entitlement that he may have to indemnification or reimbursement as an officer of the Company or its affiliates. For the avoidance of doubt, nothing herein constitutes a waiver or release of any claim that may arise in the future.
d.     Waiver of Unknown Claims . Executive understands and agrees that the Claims released above include not only claims presently known to Executive, but also include all unknown or unanticipated claims, complaints, rights, suits and actions of every kind and character that would otherwise come within the scope of the released Claims. Executive understands that Executive may hereafter discover facts different from what Executive now believes to be true, which if known, could have materially affected this Waiver and Release, but

3


Executive nevertheless waives any claims or rights based on different or additional facts. Executive knowingly and voluntarily waives any and all rights or benefits that Executive may now have, or in the future may have, under the terms of Section 1542 of the Civil Code of the State of California, which provides as follows:
“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”
e.     Permitted Conduct . Nothing in the Waiver and Release shall prohibit or restrict Executive, the Company or their respective attorneys from: (i) making any disclosure of relevant and necessary information or documents in any action, investigation, or proceeding relating to the Waiver and Release, including all exhibits, or as required by law or legal process; or (ii) participating, cooperating, or testifying in any action, investigation, or proceeding with, or providing information to, the EEOC or similar state or local agency, the Company’s Legal Department, and the Securities and Exchange Commission, and/or pursuant to the Dodd-Frank or Sarbanes-Oxley Act; provided that, to the extent permitted by law, upon receipt of any subpoena, court order or other legal process compelling disclosure of any such information or documents, Executive will give prompt written notice to the Company so as to permit the Company to protect its interests to the fullest extent possible. Notwithstanding any of the foregoing, Executive shall not disclose attorney-client privileged communications. Separation Benefits provided to Executive under Section 3 shall be the sole financial benefit that Executive is entitled to get for any of the claims that Executive is releasing under Section 4. Therefore, even though Executive can initiate, assist in, or provide testimony or information in an investigation or in proceedings described in this Section 4(e), doing so will not entitle Executive to additional compensation from any of the Released Parties. In fact, if Executive is awarded any monetary relief in connection with any lawsuit, legal proceeding, charge or complaint, that relief will be reduced by any amounts paid or payable by the Company to Executive under this Waiver and Release.
5. Pay and Leave Confirmation . Executive is not aware of any occasion on which the Company or any of the Released Parties failed to pay Executive for hours worked for or on behalf of the Company at the appropriate rate of pay. Executive agrees that he has received all entitlements due from the Company relating to Executive’s employment with the Company, including but not limited to, all wages earned, sick pay, vacation pay, and any paid and unpaid personal leave for which Executive was eligible and entitled, and that no other entitlements are due to Executive other than as set forth in this Waiver and Release. Executive is not aware of any occasion on which he was denied any leave that he was entitled to take under the Family and Medical Leave Act or otherwise.
6. Confidentiality, Intellectual Property, and other Obligations . Pursuant to the covenants and promises made and agreed in the Employment Agreement, Executive affirms that he is bound by the Restrictive Agreements therein, and further affirms and agrees that except as permitted in Section 4(c) above, as follows
a.     Non-Solicitation. Executive agrees that for twelve (12) months after the Separation Date, he will not: (i) employ, either directly or indirectly, any person previously

4


employed by Tribune Publishing Company or any of its subsidiaries, business units, or other affiliates (collectively "affiliates"), including but not limited to LATC, (“Tribune”), unless at such time such person is not then and has not been employed by Tribune or any of its affiliates for at least six (6) months, or in any way solicit, entice, persuade or induce, either directly or indirectly, any person to terminate or refrain from renewing or extending their employment with Tribune or any of its affiliates; or (ii) intentionally interfere with the relationship of Tribune or any of its affiliates with any person or entity who or which is a customer, client, supplier, developer, subcontractor, licensee or licensor or other business relation of Tribune, or assist any other person or entity in doing so; provided that the preceding clause (i) shall not prohibit Executive from (x) conducting a general solicitation made by means of a general purpose advertisement not specifically targeted at employees or other persons or entities described in clause (i) or (y) soliciting any employee or other person or entity described in clause (i) who is referred to Executive by search firms, employment agencies or other similar entities, provided that such firms, agencies or entities have not been instructed by Executive to solicit any such employee or person or entity or category thereof.
b.     Confidential Information . Executive shall not at any time, directly or indirectly use, disclose, or take any action which may result in the use or disclosure of, any Company Confidential Information. "Confidential Information" includes all non-public confidential competitive, pricing, marketing, proprietary and other information or materials relating or belonging to Tribune or any of its affiliates (whether or not reduced to writing), including without limitation all confidential or proprietary information furnished or disclosed to or otherwise obtained by Executive in the course of his employment, and further includes without limitation: computer programs; patented or unpatented inventions, discoveries and improvements; marketing, organizational, operating and business plans; strategies; research and development; policies and manuals; sales forecasts; personnel information (including without limitation the identity of Tribune employees, their responsibilities, competence and abilities, and compensation); medical information about employees; pricing and nonpublic financial information; current and prospective customer lists and information on customers or their employees; information concerning planned or pending acquisitions, investments or divestitures; and information concerning purchases of major equipment or property. Confidential Information does not include information that lawfully is or becomes generally and publicly known outside of Tribune and its affiliates other than through Executive’s breach of this Waiver and Release or the Employment Agreement or breach by any person of some other obligation. Nothing herein prohibits Executive from disclosing Confidential Information as legally required pursuant to a validly issued subpoena or order of a court or administrative agency of competent jurisdiction, provided that Executive shall first promptly notify the Company if he receives a subpoena, court order or other order requiring any such disclosure, to allow the Company to seek protection therefrom in advance of any such legally compelled disclosure.
c.     Intellectual Property . All writing or other works subject to copyright and, whether patentable or not, every invention, discovery, improvement, device, design, apparatus, practice, process, method or product (each of which is hereinafter called an “invention”), created, written, made, developed, perfected, devised, conceived or first reduced to practice by the Executive, either solely or in collaboration with others during his employment by the Company and its affiliates, whether or not during regular working hours, relating in any way to the business, products, developments or activities of the Company and its affiliates, are the sole and exclusive property of the Company and its affiliates. To the extent that the Company and its

5


affiliates or the Executive was, is or will be involved in agreements or arrangements with the United States Government or agencies or instrumentalities thereof, Executive agrees that he was, is and will be bound by all obligations, restrictions, and limitations imposed by contract, law or regulation, applicable to any invention conceived or developed, or to any writing or other work acquired, written or produced by the Executive during the period of his employment with the Company and its affiliates, and shall take all action which may be required to discharge such obligations and to comply with such restrictions and limitations.
d.     Confidentiality of Terms . Except as permitted in Section 4(c) and 6(b) above, Executive has kept and agrees to keep the terms of this Waiver and Release confidential; agrees not to disclose such terms to anyone except his spouse, attorneys, accountants, or tax advisors; and agrees to take all steps necessary to assure confidentiality by those recipients. If Executive discloses the terms of this Waiver and Release to his spouse, attorneys, accountants, or tax advisors, Executive (i) will advise them that they must not disclose the terms of this Waiver and Release to anyone else and (ii) will be responsible for any such disclosure by them to the same extent as if Executive made the disclosure himself.
e.     Cooperation in Litigation/Investigations . If requested, Executive will provide full cooperation to the Company in connection with the investigation and/or litigation of matters about which Executive had personal knowledge during his employment with the Company. Such cooperation will include consulting with Company counsel and preparing for and attending depositions or hearings.
f.     Non-Disparagement . Except as permitted in Section 4(e) and 6(b) above, Executive shall not make to any third party any false or defamatory statement about the Company or any of the Released Parties, nor shall he make any statement of belief or purported fact about the Company or any of the Released Parties if such statement is disparaging or intended to harm the reputation or standing of any of the same. In addition to other legal or equitable relief to which the Company may be entitled, Executive shall be liable to the Company for liquidated damages in the amount of $67,500.00 for each instance of a statement violating this Section 6(f).
g.     Company Property . No later than the Separation Date, Executive will return to the Company all property belonging to the Company.
7. Knowing and Voluntary Waiver of Rights . Executive understands and acknowledges that he is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and the Older Workers Benefit Protection Act (“OWBPA”), and that this waiver and release is knowing and voluntary. Executive understands and agrees that this waiver and release does not apply to any rights or claims that may arise under the ADEA and OWBPA, after the Effective Date of this Waiver and Release. Executive understands and acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Executive was already entitled. Executive further understands and acknowledges that he has been advised by this writing that: (a) he should consult with an attorney prior to executing this Waiver and Release; (b) he has twenty-one (21) days within which to consider this Waiver and Release; (d) he has seven (7) days following his execution of this Waiver and Release to revoke this Waiver and Release; (e) this Waiver and Release shall not be effective until after the revocation period has expired; and (f) nothing in this

6


Waiver and Release prevents or precludes Executive from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA or OWBPA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law. In the event Executive signs this Waiver and Release and returns it to the Company in less than the 21-day period identified above, Executive hereby acknowledges that he has freely and voluntarily chosen to waive the time period allotted for considering this Waiver and Release. For any revocation to be effective, Executive understands and agrees that he must notify the Company of the revocation in an express, signed writing delivered to the attention Cindy Ballard, SVP Human Resources at 202 West First Street, Los Angeles, CA 90012, within seven (7) days following Executive’s execution of this Waiver and Release.
8. General Provisions
a.     Complete Agreement . This Waiver and Release constitutes the entire understanding of the Company and the Executive with respect to the subject matter hereof and, together with the Employment Agreement, award agreements accepted by Executive as a condition of each grant of RSUs or Stock Options, and provisions of the intellectual property, trade secret, confidentiality, or proprietary information agreements signed by Executive, shall supersede all prior understandings, written or oral, except as expressly incorporated herein. Neither of the Parties is executing this Waiver and Release in reliance upon any statement or representation not expressly set forth or incorporated herein.
b.     Amendment; Waiver . The terms of this Waiver and Release may be changed, modified or discharged only by a written instrument signed by both of the Parties. A failure of the Company or the Executive to insist upon strict compliance with any provision of this Waiver and Release shall not be deemed a waiver of such provision or any other provision hereof.
c.     Non-Admission. This Waiver and Release does not constitute and shall not be construed as an admission by the Company or any of the Released Parties that any of them has violated any law, interfered with any rights, breached any obligation or otherwise engaged in any improper or illegal conduct, and the Company expressly denies that it has engaged in any such conduct.
d.     Unenforceability. The invalidity or unenforceability of any particular provision of this Waiver and Release shall not affect the other provisions hereof, and this Waiver and Release shall be construed in all respects as if such invalid or unenforceable provisions were omitted.
e.     Counterparts. This Waiver and Release may be signed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument.
f.     Construction of Agreement . Each party has negotiated the terms and provisions of this Waiver and Release and has had the opportunity to contribute to its revision. The terms of this Waiver and Release shall be construed fairly and evenly as to both Parties hereto and not in favor or against either party based on the characterization of one or the other as the drafting party.

7


g.     Choice of Law . This Waiver and Release shall be construed, enforced and interpreted in accordance with and governed by the laws of the State of California without regard to its choice-of-law principles, provided, however, that any issue concerning Executive’s right to indemnification as an officer of the Company or its affiliates shall be governed by the law of the state of incorporation in accordance with the governing corporate articles, and without regard to that state’s choice of law principles.
h.     Successors and Assigns. This Waiver and Release is binding upon, and shall inure to the benefit of, the parties and their respective heirs, successors and assigns.
PLEASE READ CAREFULLY. THIS WAIVER AND RELEASE CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
NOW INTENDING TO BE LEGALLY BOUND THEREBY, the parties have executed this Waiver and Release on the date(s) set forth below.
ACCEPTED AND AGREED BY:
ACCEPTED AND AGREED BY:
INSERT EXECUTIVE
LOS ANGELES TIMES COMMUNICATIONS LLC
Signature:      

 
Date:       
Signature:      
Name  
 
Date:       


8


ADDENDUM 1

1.      RELOCATION ADVANCE . The Company will pay Employee a lump sum payment of Seventy-Five Thousand Dollars and No Cents ($75,000.00) to be paid no later than September 30, 2015, for the purpose of relocating Employee’s residence from Baltimore, Maryland to Los Angeles County, California. Employee will not earn this amount unless Employee remains a full-time employee with the Company through at least the second-year anniversary of Employee’s start date in California. In the event Employee resigns (other than for Good Reason) or the Company terminates Employee’s employment for Cause prior to the first-year anniversary of Employee’s start date in California, Employee will immediately repay the entire relocation advance (i.e., $75,000.00) to the Company. In the event Employee resigns (other than for Good Reason) or the Company terminates Employee’s employment for Cause after the first-year anniversary but prior to the second-year anniversary of Employee’s start date in California, Employee will immediately repay one-half of the relocation advance (i.e., $37,500.00) to the Company. Notwithstanding the foregoing, in the event of termination of Employee’s employment without Cause, or Employee’s death, the foregoing amount shall be considered earned in full and no portion thereof shall be repaid to the Company.

2.     SETTLING COSTS .

(a)    The Company will pay for Employee’s rental of a standard-sized rental car from a nationally recognized rental car company and also a preferred vendor of Tribune Publishing (e.g., Hertz, Avis, National, and Enterprise) for up to the first four months of Employee’s employment with the Company under the Agreement. Employee will submit the expense through the standard expense reimbursement process.

(b)    The Company will pay for Employee’s standard 2 bedroom temporary housing located in Los Angeles County, California up to the first four months of Employee’s employment with the Company under the Agreement. The temporary housing vendor will be at the discretion of the Company and a preferred vendor of Tribune Publishing and will be direct billed to the Company.
 

(c)    The Company will provide Employee with an allowance for permanent housing, as follows: (1) a lump sum payment of One Hundred Seventy-Five Thousand Dollars and No Cents ($175,000.00) to be paid by September 30, 2015; and (2) a lump sum payment of Eighty-Seven Thousand Dollars and No Cents ($87,000.00) to be paid on September 30, 2016. Any amounts for Employee’s housing in excess of the allowance will be Employee’s sole responsibility. Upon the Company’s termination of Employee’s employment during (and not after) the Employment Term for any reason other than Cause, or Employee’s resignation for Good Reason, the Company will pay any early termination fees, costs and/or penalties, relieving

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Employee of all obligations under the current lease agreement, which is not to exceed the term of the contract period.

3.      RETURN RELOCATION ALLOWANCE . Upon the Company’s termination of Employee’s employment during (and not after) the Employment Term for any reason other than Cause or Employee’s resignation with Good Reason during (and not after) the Employment Term, the Company will pay Employee a lump sum payment of Seventy-Five Thousand Dollars and No Cents ($75,000.00), for the purpose of relocating Employee’s residence from Los Angeles County, California to Baltimore, Maryland.

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Exhibit 31.1
SECTION 302 CERTIFICATION
I, John H. Griffin, Jr., Chief Executive Officer of Tribune Publishing Company, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Tribune Publishing Company;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c.
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions)
a.
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
By: /s/ John H. Griffin, Jr. ___________________________________________
John H. Griffin, Jr.,
Chief Executive Officer
Date: November 10, 2015



Exhibit 31.2
SECTION 302 CERTIFICATION
I, Sandra J. Martin, Chief Financial Officer of Tribune Publishing Company, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Tribune Publishing Company;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c.
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions)
a.
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
By: /s/ Sandra J. Martin _________________________________________
Sandra J. Martin,
Chief Financial Officer
Date: November 10, 2015



Exhibit 32
CERTIFICATION PURSUANT TO THE 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Tribune Publishing Company (the “Company”) on Form 10-Q for the period ended September 27, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, John H. Griffin, Jr., Chief Executive Officer of the Company, and Sandra J. Martin, Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


By: /s/ John H. Griffin, Jr. _____________________________________
John H. Griffin, Jr.,
Chief Executive Officer


Date: November 10, 2015


By: /s/ Sandra J. Martin ________________________________________
Sandra J. Martin,
Chief Financial Officer


Date: November 10, 2015