10-Q

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 July 1, 2018

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 001-36230

TRONC, INC.

(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.)
160 N. Stetson Avenue
Chicago Illinois	60601
(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.

435 North Michigan Avenue

Chicago, Illinois 60611

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, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” an “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ____	Accelerated filer X
Non-accelerated filer ____	Smaller reporting company ____
	Emerging growth company ____

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ____

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 August 8, 2018
Common Stock, $0.01 par value	35,460,739

	TRONC INC.
	FORM 10-Q
	TABLE OF CONTENTS
		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	46
Item 4.	Controls and Procedures	46
PART II	OTHER INFORMATION	46
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3.	Defaults Upon Senior Securities	47
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	47
Item 6.	Exhibits	47
	SIGNATURES	49

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 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, without limitation, changes in advertising demand, circulation levels and audience shares; competition and other economic conditions; economic and market conditions that could impact the level of our required contributions to the defined benefit pension plans to which we contribute; decisions by trustees under rehabilitation plans (if applicable) or other contributing employers with respect to multiemployer plans to which we contribute which could impact the level of our contributions; our ability to develop and grow our online businesses; changes in newsprint price; our ability to maintain effective internal control over financial reporting; concentration of stock ownership among our principal stockholders whose interests may differ from those of other stockholders; 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 (“SEC”) on March 16, 2018, and in our other filings with the SEC.

The words “believe,” “expect,” “anticipate,” “estimate,” “could,” “should,” “intend,” “may,” “will,” “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, in fact occur 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. Except as required by law, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

2

PART I.

Item 1.    Financial Statements

TRONC, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

	Three months ended						Six months ended
	July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Operating revenues	$	253,037		$	243,435		$	491,576		$	483,410
Operating expenses:
Compensation	106,455			92,609			217,293			189,003
Newsprint and ink	16,770			14,091			31,368			28,425
Outside services	81,818			80,526			180,803			161,021
Other operating expenses	36,297			38,760			69,159			76,526
Depreciation and amortization	12,942			12,987			25,959			23,682
Total operating expenses	254,282			238,973			524,582			478,657
Income (loss) from operations	(1,245		)	4,462			(33,006		)	4,753
Interest expense, net	(5,412		)	(6,365		)	(11,976		)	(12,800		)
Loss on early extinguishment of debt	(7,666		)	—			(7,666		)	—
Premium on stock buyback	—			—			—			(6,031		)
Loss on equity investments, net	(665		)	(723		)	(1,394		)	(1,621		)
Other income, net	3,640			284			7,303			567
Loss from continuing operations before income taxes	(11,348		)	(2,342		)	(46,739		)	(15,132		)
Income tax expense (benefit)	3,753			(402		)	(2,926		)	(2,280		)
Loss from continuing operations	(15,101		)	(1,940		)	(43,813		)	(12,852		)
Plus: Earnings from discontinued operations, net of taxes	280,545			8,781			294,745			16,704
Net income	265,444			6,841			250,932			3,852
Less: Income attributable to noncontrolling interest	448			—			710			—
Net income attributable to tronc common stockholders	$	264,996		$	6,841		$	250,222		$	3,852
Loss from continuing operations per common share:
Basic	$	(0.44	)	$	(0.06	)	$	(1.27	)	$	(0.37	)
Diluted	$	(0.44	)	$	(0.06	)	$	(1.27	)	$	(0.37	)
Net income attributable to tronc per common share:
Basic	$	7.51		$	0.21		$	7.14		$	0.11
Diluted	$	7.51		$	0.21		$	7.14		$	0.11
Weighted average shares outstanding:
Basic	35,288			32,825			35,045			34,566
Diluted	35,288			32,825			35,045			34,566

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

3

TRONC, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three months ended						Six months ended
	July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Net income	$	265,444		$	6,841		$	250,932		$	3,852
Other comprehensive income, net of taxes:
Amortization of items to periodic pension cost during the period, net of taxes of ($915), ($133), ($1,830) and ($267), respectively	(2,376		)	(206		)	(4,752		)	(410		)
Foreign currency translation	(5		)	1			(5		)	1
Other comprehensive loss, net of taxes	(2,381		)	(205		)	(4,757		)	(409		)
Accumulated other comprehensive income recognized in discontinued operations, net of taxes of $9,702	25,397			—			25,397			—
Comprehensive income	288,460			6,636			271,572			3,443
Comprehensive income attributable to noncontrolling interest	448			—			710			—
Comprehensive income attributable to tronc common stockholders	$	288,012		$	6,636		$	270,862		$	3,443

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

4

TRONC, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

	July 1, 2018			December 31, 2017
Assets
Current assets
Cash	$	214,544		$	185,351
Accounts receivable, (net of allowances of $10,613 and $7,388)	133,103			129,480
Inventories	11,017			7,412
Prepaid expenses and other	22,859			22,685
Assets related to discontinued operations	—			61,777
Total current assets	381,523			406,705
Property, plant and equipment
Machinery, equipment and furniture	145,905			110,598
Buildings and leasehold improvements	55,473			36,987
	201,378			147,585
Accumulated depreciation	(68,314		)	(61,481		)
	133,064			86,104
Advance payments on property, plant and equipment	11,616			8,386
Property, plant and equipment, net	144,680			94,490
Other assets
Goodwill	138,201			48,700
Intangible assets, net	80,525			64,996
Software, net	33,238			39,577
Restricted cash	42,600			—
Deferred income taxes	—			1,124
Other long-term assets	29,502			31,163
Assets related to discontinued operations	—			178,378
Total other assets	324,066			363,938
Total assets	$	850,269		$	865,133

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

5

TRONC, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS (continued)

(In thousands, except per share data)

(Unaudited)

	July 1, 2018			December 31, 2017
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	85,625		$	65,724
Employee compensation and benefits	48,989			49,109
Deferred revenue	62,675			50,314
Current portion of long-term debt	702			21,487
Other current liabilities	22,701			13,876
Liabilities associated with discontinued operations	107,624			60,394
Total current liabilities	328,316			260,904
Non-current liabilities
Pension and postretirement benefits payable	21,069			23,438
Deferred income taxes payable	5,970			—
Deferred revenue	3,207			4,818
Long-term debt	6,797			331,065
Workers’ compensation, general liability and auto insurance payable	31,604			37,869
Other obligations	32,810			21,522
Liabilities associated with discontinued operations	—			116,355
Total non-current liabilities	101,457			535,067
Noncontrolling interest	41,610			—
Stockholders’ equity
Preferred stock, $.01 par value. Authorized 30,000 shares; no shares issued or outstanding at July 1, 2018 and December 31, 2017	—			—
Common stock, $.01 par value. Authorized 300,000 shares, 37,243 shares issued and 35,289 shares outstanding at July 1, 2018; 37,551 shares issued and 33,684 shares outstanding at December 31, 2017	372			376
Additional paid-in capital	163,729			150,229
Retained earnings (accumulated deficit)	233,832			(16,390		)
Accumulated other comprehensive income (loss)	7,113			(13,527		)
Treasury stock, at cost - 1,954 shares at July 1, 2018 and 3,867 shares at December 31, 2017	(26,160		)	(51,526		)
Total stockholders’ equity	378,886			69,162
Total liabilities and stockholders’ equity	$	850,269		$	865,133

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

6

TRONC, INC.

CONSOLIDATED STATEMENT OF EQUITY

(In thousands)

(Unaudited)

	Common Stock					Additional Paid in Capital			Retained earnings			AOCI			Treasury Stock			Total Equity
	Shares		Amount
Balance at December 31, 2017	37,551		$	376		$	150,229		$	(16,390	)	$	(13,527	)	$	(51,526	)	$	69,162
Comprehensive income (loss) recognized in continuing operations, attributable to controlling interests	—		—			—			250,222			(4,757		)	—			245,465
AOCI recognized in discontinued operations	—		—			—			—			25,397			—			25,397
Issuance of stock from treasury for acquisition	—		—			9,229			—			—			25,366			34,595
Issuance of stock from restricted stock and restricted stock unit conversions	134		1			(1		)	—			—			—			—
Exercise of stock options	7		—			134			—			—			—			134
Stock-based compensation	—		—			5,195			—			—			—			5,195
Withholding for taxes on restricted stock unit conversions	—		—			(1,062		)	—			—			—			(1,062		)
Forfeited restricted stock	(450	)	(5		)	5			—			—			—			—
Balance at July 1, 2018	37,242		$	372		$	163,729		$	233,832		$	7,113		$	(26,160	)	$	378,886

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

7

TRONC, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended
	July 1, 2018			June 25, 2017
Operating Activities From Continuing Operations
Net income (loss)	$	(43,813	)	$	(12,852	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	25,959			23,682
Stock compensation expense	5,195			4,069
Loss on equity investments, net	1,394			1,261
Loss on early extinguishment of debt	7,666			—
Deferred income taxes	7,094			3,228
Non-current deferred revenue	(3,722		)	(711		)
Premium on stock buyback	—			6,031
Pension contribution	(534		)	—
Postretirement medical, life and other benefits	(2,369		)	(934		)
Changes in working capital items, excluding acquisitions:
Accounts receivable, net	15,801			22,715
Prepaid expenses, inventories and other current assets	16,934			(1,190		)
Accounts payable, employee compensation and benefits, deferred revenue and other current liabilities	9,898			(41,258		)
Other, net	1,676			2,675
Net cash provided by operating activities	41,179			6,716
Investing Activities From Continuing Operations
Capital expenditures	(30,435		)	(9,240		)
Acquisition of business, net of cash acquired	(67,952		)	—
Other, net	(2,371		)	(1,481		)
Net cash used for investing activities	(100,758		)	(10,721		)
Financing Activities From Continuing Operations
Repayment of long-term debt	(353,253		)	(10,545		)
Purchase of treasury stock	—			(56,189		)
Withholding for taxes on RSU vesting	(1,062		)	(896		)
Dividends paid to common stockholders	—			(145		)
Proceeds from exercise of stock options	134			95
Other	36			—
Net cash used for financing activities	(354,145		)	(67,680		)
Decrease in cash attributable to continuing operations	$	(413,724	)	$	(71,685	)

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

8

TRONC, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (In thousands) (Unaudited)
	Six Months Ended
	July 1, 2018			June 25, 2017
Cash Flows From Discontinued Operations
Cash flows provided by operating activities of discontinued operations, net	$	2,387		$	48,183
Cash flows provided by (used for) investing activities of discontinued operations, net	483,320			(388		)
Cash flows used for financing activities of discontinued operations, net	(190		)	(259		)
Increase in cash attributable to discontinued operations	485,517			47,536
Net increase (decrease) in cash	71,793			(24,149		)
Cash, cash equivalents and restricted cash beginning of period	185,351			198,349
Cash, cash equivalents and restricted cash, end of period	$	257,144		$	174,200

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

9

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1: DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business—tronc, Inc., formerly Tribune Publishing Company, was formed as a Delaware corporation on November 21, 2013. tronc, Inc. together with its subsidiaries (collectively, the “Company” or “tronc”) is a media company rooted in award-winning journalism. Headquartered in Chicago, tronc operates local media businesses in eight markets with titles including the Chicago Tribune, New York Daily News, The Baltimore Sun, Orlando Sentinel, South Florida’s Sun Sentinel, Virginia’s Daily Press and The Virginian-Pilot, The Morning Call of Lehigh Valley, Pennsylvania andthe Hartford Courant. tronc also operates Tribune Content Agency and the Daily Meal and on February 6, 2018, the Company became a majority owner in BestReviews LLC (“BestReviews”). On May 18, 2018, the Company acquired Virginian-Pilot Media Companies LLC, owner of the The Virginian-Pilot a daily newspaper based in Norfolk, Virginia and associated businesses (“Virginian-Pilot”). See Note 5 for further information on acquisitions.

On May 23, 2018, the Company completed the sale of substantially all of the assets of forsalebyowner.com and on June 18, 2018, the Company completed the sale of the Los Angeles Times, The San Diego Union-Tribune and various other titles of the Company’s California properties (“California Properties”). See Note 6 for more information on the dispositions and related discontinued operations.

tronc’s continuing legacy of brands, including the New York Daily News and The Virginian-Pilot, have earned a combined 60 Pulitzer Prizes and are committed to informing, inspiring and engaging local communities. tronc’s brands create and distribute content across its media portfolio, offering integrated marketing, media, and business services to consumers and advertisers, including digital solutions and advertising opportunities.

Fiscal Periods—The Company’s fiscal year ends on the last Sunday in December. Fiscal year 2018 ends on December 30, 2018 and fiscal year 2017 ended on December 31, 2017. Fiscal year 2018 is a 52-week year with 13 weeks in each quarter. Fiscal year 2017 was a 53-week year with 13 weeks in the first through third quarters and 14 weeks in the fourth quarter.

Basis of Presentation—The accompanying unaudited Consolidated Financial Statements and notes of the Company 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 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 tronc as of July 1, 2018 and December 31, 2017 and the results of operations for the three and six months endedJuly 1, 2018 and June 25, 2017, respectively, and the cash flows for the six months ended July 1, 2018 and June 25, 2017, respectively. This includes all normal and recurring adjustments and elimination of intercompany transactions. Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The year-end Consolidated Balance Sheet was derived from audited financial statements but does not include all disclosures required by U.S. GAAP.

Effective as of the sale dates, the operations of the California Properties and forsalebyowner.com qualify as discontinued operations. Accordingly, operations for all periods presented have been reflected as discontinued operations in the accompanying Consolidated Statements of Income and Consolidated Statements of Cash Flows. Additionally, assets and liabilities related to the divested properties are classified as such in all prior periods in the Consolidated Condensed Balance Sheets. Unless otherwise noted, amounts and disclosures throughout these Notes to Consolidated Financial Statements relate to continuing operations and exclude all discontinued operations including the California Properties and forsalebyowner.com.

The Company assesses its operating segments in accordance with ASC Topic 280, “Segment Reporting.” The Company is managed by its chief operating decision maker, as defined by ASC Topic 280, in two reportable segments, troncM and troncX. troncM is comprised of the Company’s media groups excluding their digital revenues and related digital expenses, except digital subscription revenues when bundled with a print subscription. troncX includes the Company’s digital revenues and related digital expenses from local tronc websites, third party websites, mobile applications, digital-only subscriptions, BestReviews and Tribune Content Agency (“TCA”). See Note 17 for additional segment information.

10

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

New Accounting Standards—In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-02, Topic 220, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The ASU amends ASC 220, Income Statement — Reporting Comprehensive Income, to “allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.” In addition, under the ASU, an entity will be required to provide certain disclosures regarding stranded tax effects. The ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company is currently evaluating how the adoption of this standard will impact the Company’s consolidated financial statements.

In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-07, Topic 715, Compensation - Retirement Benefits; Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ASU 2017-07 requires the disaggregation of the service cost component from other components of net periodic benefit cost, clarifies how to present the service cost component and other components of net benefit costs in the financial statements and allows only the service cost component of net benefit costs to be eligible for capitalization. The Company adopted the standard on January 1, 2018 and has applied the standard on a retrospective basis. Accordingly, prior period amounts have been adjusted. Adoption of the standard had no effect on the Company’s overall results of operations. The disclosures required by the standard can be found in Note 11.

In January 2017, the FASB issued ASU 2017-04, Topic 350, Intangibles-Goodwill and Other; Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test thereby standardizing the impairment assessment to measure a reporting unit’s carrying value against its fair value and eliminate the calculation of an implied fair value of goodwill. ASU 2017-04 is effective for interim and annual reporting periods beginning after December 15, 2019 and should be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating how the adoption of this standard will impact the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Topic 805, Clarifying the Definition of a Business, which establishes criteria to determine when an integrated set of assets and activities is not a business. ASU 2017-01 is effective for interim and annual reporting periods beginning after December 15, 2017 and should be applied prospectively. The Company adopted the standard effective January 1, 2018 and will apply the standard to acquisitions or dispositions after that date.

In November 2016, the FASB issued ASU 2016-18, Topic 230, Statement of Cash Flows, which clarifies how companies present and classify restricted cash in the statement of cash flows. ASU 2016-18 is effective for interim and annual reporting periods beginning after December 15, 2017. The guidance is required to be applied on a retrospective basis. The Company adopted the standard effective January 1, 2018. The adoption had no retrospective effect on the Company’s consolidated financial statements as the Company had no restricted cash during 2017 or the first quarter of 2018. However, beginning the in the second quarter of 2018, the Company has restricted cash and the restricted cash balances are included in the beginning and ending cash balances in the statements of cash flows and Note 18 provides a reconciliation between cash balances presented on the balance sheets with the amounts presented in the statements of cash flows.

In August 2016, the FASB issued ASU 2016-15, Topic 230, Statement of Cash Flows, which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. ASU 2016-15 is effective for interim and annual reporting periods beginning after December 15, 2017. The guidance is required to be applied on a retrospective basis. The Company adopted the standard effective January 1, 2018. The adoption had no effect on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Topic 842, Leases, which requires lessees to recognize lease assets and lease liabilities for operating leases. The Company expects to adopt this standard in the first quarter of 2019 using the transition option whereby companies may initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has initiated efforts to assess the impact of this new standard on the Company’s future reported results and operating and accounting processes and systems. The Company expects to elect the practical expedients which allow the Company to forgo reassessing whether existing contracts are or contain leases, forgo reassessing the classification of existing leases and forgo reassessing initial direct costs of existing leases at the initial application date.

11

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

In May 2014, the FASB issued ASU 2014-09, Topic 606, Revenue from Contracts with Customers and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016, May 2016, and December 2016 within ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20, respectively. 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. On January 1, 2018, the Company adopted ASU 2014-09 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results of operations for periods after January 1, 2018 reflect the changes under ASU 2014-09. Results of operations for periods before January 1, 2018, continue to be reported under guidance in effect at that time. The adoption did not have a material effect on the Company’s consolidated financial statements. See Note 2 for disclosures as a result of the adoption.

NOTE 2: REVENUE RECOGNITION

Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services. Revenues are recognized as performance obligations that are satisfied at either a point in time, such as when an advertisement is published, or over time, such as content licensing.

Advertising revenue

Print advertising revenue is typically in the form of print display appearing in tronc newspapers and preprinted advertising inserted into tronc newspapers. Digital advertising consists of website display, banner ads, advertising widgets, coupon ads, video, search advertising and linear ads placed by tronc on websites. Customers submit ads to appear either in the print newspapers or on websites. Advertising revenue is recognized when the Company satisfies the performance obligation by transferring the promised goods or services to the customer in an amount that reflects the consideration the Company is entitled to receive. For print advertising, classified and preprint advertising, this transfer, which occurs at a point in time, occurs when the advertising appears in the newspaper.

Digital advertising is typically sold on a cost-per-impression basis. An advertiser pays an amount based on the number of times their ad is displayed on the Company’s websites. Revenue is recognized at a point in time when the ad is displayed on the websites.

Advertising revenue also includes digital marketing services which include development of mobile websites, search engine marketing and optimization, social media account management and content marketing for customers’ web presence for small to medium size businesses. For mobile website development, revenue is recognized when the website is live. For search engine marketing and optimization, social account management and content marketing, revenue is recognized over the period of time the service is performed for the customer.

Certain customers receive cash-based incentives or credits, which are accounted for as variable consideration. The Company estimates these amounts based on the expected amount to be provided to customers and reduces revenues recognized. The Company expects there will be no significant changes to our estimates of variable consideration.

Circulation revenue

Circulation revenue results from the sale of print editions of newspapers to individual subscribers and to sales outlets that re-sell the newspapers. For individual subscribers, revenue is recognized at a point in time when the newspapers are delivered to the subscribers. For sales outlets, revenue is recognized at a point in time when the newspapers are delivered to the sales outlets or to an intermediary which has purchased the newspapers to resell to the sales outlets.

Other revenue

Other revenues are derived from commercial printing and delivery services provided to other newspapers, direct mail advertising and services, syndication and licensing revenue, ecommerce lead generation revenue and digital-only subscriptions.

12

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Digital circulation revenue results from the provision of online content to subscribers. tronc recognizes revenue daily, per the contract term as the customer receives access to digital content.

For commercial printing and delivery services, the Company contracts with a number of national and local newspapers to both print and/or distribute their respective publications in local markets where it is a newspaper publisher. For commercial printing, revenue is recognized as the papers are printed and available for delivery. For commercial delivery, the Company operates under two models, the buy/sell model and the fee-for-delivery model. Under the buy/sell model, the Company buys the customers newspapers and resells them to subscribers and sales outlets. Revenue the Company receives for the sale of the newspapers is recognized when the newspapers are delivered to subscribers or sales outlets. Under the fee-for-delivery model, the Company receives a fee for each newspaper delivered. Revenue is recognized at the time the newspaper is delivered either to the subscriber or to the sales outlet.

For direct mail advertising and services, the Company enters into an arrangement with customers to design, print and distribute advertising materials. Revenue is recognized when the items are delivered to the postage courier.

For licensing and syndication revenue, the Company enters into a sales-based royalty arrangement with the customer to provide a license to tronc content. The Company receives a periodic royalty payment based on usage of the content or derived sales of the content. Revenue is recognized based on royalties received.

For ecommerce lead generation revenue, the Company provides leads to ecommerce sites such as Amazon.com and Walmart.com. Once the leads convert to sales on these sites, the Company receives a percentage of the sales. Revenue is recognized when the leads have been converted to sales, net of a reserve for returned items.

The Company’s revenues disaggregated by type of revenue and segment are presented in Note 17.

The Company receives a significant portion of the payments from its subscribers in advance of the delivery of the content both either in print or digitally. These up-front payments and fees are recorded as deferred revenue upon receipt and generally require deferral of revenue recognition to a future period until the Company performs its obligations under the subscription agreement. The deferred revenue is recognized as revenue as the content is delivered. The deferred revenue is considered a contract liability under ASC 606. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. Therefore, the Company has no contract assets as defined under ASC 606. As of December 31, 2017, the Company had a contract liabilities balance from continuing operations of $55.1 million, of which $41.5 million has been recognized as revenue in the six months ended July 1, 2018. The balance as of December 31, 2017 and the revenue recognized during the six months ended July 1, 2018 exclude amounts related to discontinued operations.

The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within cost of sales. Additionally, the Company does not disclose the value of unsatisfied performance obligations because the vast majority of contracts have original expected lengths of one year or less and payment terms are generally short-term in nature unless a customer is in bankruptcy.

NOTE 3: CHANGES IN OPERATIONS

Employee Reductions

The Company continually assesses its operations in an effort to identify opportunities to enhance operational efficiencies and reduce expenses. In the past these activities have included, and could include in the future, outsourcing of various functions or operations, abandonment of leased space and other activities which may result in changes to employee headcount. The discussion and amounts below represent activity in the Company’s continuing operations and exclude any amounts in the Company’s assets, liabilities or operations from discontinued operations.

During the second quarter of 2017, the Company contracted with a third party to outsource the printing, packaging and delivery of the Orlando Sentinel. The services were fully transitioned to the third party by the end of the third quarter of 2017. The change in operations resulted in staff reductions of 112 positions and a pretax charge related to those reductions of $2.3 million for the three and six months endedJune 25, 2017. The related salary continuation payments began in the third quarter of 2017 and are expected to continue through the fourth quarter of 2018.

13

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The Company implemented reductions of 106 and 287 positions during the three and six months endedJuly 1, 2018, respectively, and recorded pretax charges related to these reductions of $5.0 million and $10.7 million, respectively. In addition to the action described above, the Company implemented reductions of 41 and 92 positions during the three and six months endedJune 25, 2017, respectively, and recorded pretax charges related to these reductions of $0.9 million and $3.0 million during the three and six months endedJune 25, 2017, respectively.

A summary of the activity with respect to the Company’s severance accrual for the six months ended July 1, 2018 is as follows (in thousands):

Balance at December 31, 2017	$	11,532
Provision	10,691
Payments	(12,681		)
Balance at July 1, 2018	$	9,542

Charges for severance and related expenses are included in compensation expense in the accompanying Consolidated Statements of Income.

Subsequent to July 1, 2018, the Company implemented reductions of 178 positions of which approximately 50% were at the New York Daily News. The Company is expected to take a total pre-tax charge of between $5.2 million and $5.4 million in the third quarter of 2018 related to such reductions. The related salary continuation payments will start in the third quarter of 2018 and continue until the third quarter of 2019.

Lease Abandonment

A summary of the activity with respect to the Company’s lease abandonment accrual for the six months ended July 1, 2018 is as follows (in thousands):

Balance at December 31, 2017	$	3,127
Provision	33
Payments and other	(1,977		)
Balance at July 1, 2018	$	1,183

These charges are included in other operating expenses in the accompanying Consolidated Statements of Income.

NOTE 4: RELATED PARTY TRANSACTIONS

See Note 6 for related party income and expenses included in discontinued operations, including the Nant transaction.

Merrick Consulting Agreement

On December 20, 2017, the Company entered into a Consulting Agreement with Merrick Ventures LLC (“Merrick Ventures”) and solely for certain sections thereof, Michael W. Ferro, Jr. and Merrick Media, LLC (“Merrick Media”). Mr. Ferro is: (1) Chairman and Chief Executive Officer of Merrick Ventures and (2) the manager of Merrick Venture Management, LLC which is the sole manager of Merrick Media. At the time the agreement was signed, Mr. Ferro was also Chairman of tronc’s Board of Directors and, together with Merrick Ventures and Merrick Media, a significant stockholder. The Consulting Agreement provided for the engagement of Merrick Ventures on a non-exclusive basis to provide certain management expertise and technical services for an annual fee of $5 million in cash, payable in advance on the first business day of each calendar year. The Consulting Agreement provided for a rolling three-year term, with the initial term continuing through December 31, 2020. The Company made the initial $5.0 million payment in early January 2018. During the term of the Consulting Agreement, Merrick Ventures and Mr. Ferro agreed to certain non-competition covenants relating to engaging in certain other daily printed newspaper businesses, subject to certain exceptions, and amended certain terms of the Securities Purchase Agreement by and among the Company, Merrick Media and Mr. Ferro. The Consulting Agreement also provided

14

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

for termination of the Aircraft Dry Sublease Agreement described below, as of December 31, 2017 and after such time, Merrick Ventures and Mr. Ferro are responsible for all travel expenses (including private plane expenses) incurred by them in performance of their services for the Company, rather than the Company reimbursing them for such expenses. Such Aircraft Dry Sublease expenses totaled $3.0 million in fiscal 2017 and $2.7 million in fiscal 2016.

On March 18, 2018, Mr. Ferro retired from the Company’s Board. As Mr. Ferro is no longer actively engaged in the business and the Company remained contractually committed for the future payments due under the Consulting Agreement, the Company recognized expense for the full $15.0 million due under the Consulting Agreement in outside services in the first quarter of 2018. In the second quarter of fiscal 2018, the Company amended the Consulting Agreement. The amendment reduced the total fees due under the Consulting Agreement by $2.5 million (from $15 million to $12.5 million) and allows the Company to engage Merrick Ventures as its advisor, if it so chooses, but at no additional cost to the Company. If so engaged, the Company would indemnify Merrick Ventures if the Company requests it to meet with third parties. In June 2018, the Company paid the remaining $7.5 million in fees due under the amended Consulting Agreement in connection with the execution of the amendment. The Company recognized a credit of $2.5 million for the reduction in fees due under the Consulting Agreement in outside services in the second quarter of 2018. The non-compete covenants and amended Securities Purchase Agreement terms contained in the Consulting Agreement were not altered by the amendment and remain in place through December 31, 2020.

In the second quarter, the Company agreed to pay $0.3 million in legal fees incurred by Mr. Ferro while conducting the Company’s business. Such legal fees will be paid directly to the legal firms.

Aircraft Dry Sublease

During 2017, the Company was party to an Aircraft Dry Sublease Agreement with Merrick Ventures. Under the agreement, the Company subleased on a non-exclusive basis, a Bombardier aircraft leased by Merrick Ventures, which included the Company’s proportionate share of the insurance premiums and maintenance expenses and for charges attributable to the Company for the operation of the aircraft by the Company during the lease term. This lease was terminated effective December 31, 2017. During the three and six months endedJune 25, 2017, the Company incurred $0.6 million and $1.3 million related to the aircraft sublease. For the three and six months endedJune 25, 2017, the Company paid $0.4 million and $1.0 million to Merrick Ventures and $0.1 million and $0.2 million to an outside party for pilot services.

Event tickets

In April 2017, the Company acquired Merrick Ventures’ interest and obligations in connection with the license of a suite and tickets to certain sporting events. The suite and tickets were utilized in the Company’s sales and marketing efforts and for other corporate purposes. The aggregate cost of the suite and regular season tickets approximated $0.3 million annually. During the first quarter of 2017, the Company paid Merrick Ventures $0.2 million for the face value of the suite and tickets for events. There are no further obligations to Merrick Ventures for these tickets.

Nucleus Marketing Solutions, LLC

In April 2016, tronc, along with other leading media companies McClatchy, Gannett and Hearst, formed Nucleus Marketing Solutions, LLC (“Nucleus”). This network connects national advertisers to audiences across existing and emerging print and digital platforms. Nucleus works with its marketing partners to address their goals by offering integrated services across all platforms. The Company owned 25% of Nucleus as of July 1, 2018, which is accounted for as an equity method investment. During the three and six months endedJune 25, 2017, the Company recorded $1.6 million and $3.6 million, respectively, on a net basis for revenue related to the Nucleus agreement. The revenue recorded during the three and six months endedJuly 1, 2018 was immaterial.

15

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 5: ACQUISITIONS

Virginian-Pilot

On May 28, 2018, Tribune Publishing Company, LLC, a wholly-owned subsidiary of the Company, acquired Virginian-Pilot Media Companies, LLC (“Virginian-Pilot”), the owner of The Virginian-Pilot daily newspaper based in Norfolk, Virginia, pursuant to a Securities Purchase Agreement, entered into on the same date (the “VP Purchase Agreement”), by and among the Company, Virginian-Pilot and Landmark Media Enterprises, LLC (“Seller”).

Upon the terms and subject to the conditions set forth in the VP Purchase Agreement, the Company acquired all of the issued and outstanding membership interests in Virginian-Pilot from Seller for a cash purchase price of $34.0 million, subject to a post-closing working capital adjustment (the “VP Acquisition”). As part of the VP Acquisition, the Company also acquired Virginian-Pilot’s real estate portfolio (comprised of approximately 460,000 square feet), including its headquarters building in downtown Norfolk, its printing and distribution facilities in Virginia Beach and a number of satellite offices in Norfolk and North Carolina. The VP Purchase Agreement also contains representations, warranties, covenants, and indemnities of the parties thereto.

The allocation of the purchase price presented below is based upon management’s preliminary estimates. The Company has engaged a valuation firm to assist with the valuation of the assets acquired and liabilities assumed, including property, plant and equipment and intangible assets. However, such valuation is not complete as of the filing date of this report. The preliminary allocation of the purchase price is as follows (in thousands):

Consideration
Cash consideration for acquisition	$	34,004
Total consideration	$	34,004
Allocated Fair Value of Acquired Assets and Assumed Liabilities
Accounts receivable and other current assets	$	7,028
Property, plant and equipment	30,485
Mastheads	4,700
Accounts payable and other current liabilities	(9,918		)
Other long term obligations	(68		)
Total identifiable assets (liabilities), net	32,227
Goodwill	1,777
Total net assets acquired	$	34,004

The allocation of the purchase price is preliminary. The valuation of the property plant and equipment and intangible assets are not complete. The intangible assets currently being evaluated are mastheads, subscriber and advertiser relationships; however, the Company may identify additional intangible assets prior to finalizing the purchase price allocation. 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 expected future cost and revenue synergies. A portion of goodwill is expected to be deductible for tax purposes pursuant to Internal Revenue Code Section 197.

The results of operations of Virginian-Pilot and related goodwill have been included in the Consolidated Financial Statements beginning on the closing date of the acquisition and are primarily included in the results of the Company’s troncM segment. For the three and six months endedJuly 1, 2018, reported revenues from Virginian-Pilot were $5.5 million, and reported operating expenses were $5.1 million. The pro forma effect of the acquisition is not material to the Company’s Consolidated and Combined Financial Statements.

16

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

BestReviews

Acquisition Agreement

On February 6, 2018, the Company acquired a 60% membership interest in BestReviews LLC (“BestReviews”), a company engaged in the business of testing, researching and reviewing consumer products, pursuant to an Acquisition Agreement, entered into on the same date (the “BestReviews Acquisition Agreement”), among the Company, BestReviews Inc., a Delaware corporation (“BR Parent”), BestReviews and the stockholders of Best Reviews Inc.

Upon the terms and subject to the conditions set forth in the BestReviews Acquisition Agreement, the Company acquired 60% of BR Parent’s membership interest in BestReviews for a total purchase price of $68.3 million, consisting of $33.7 million in cash, subject to a post-closing working capital adjustment due from the seller of approximately $0.6 million, and $34.6 million in common stock of the Company (the “BR Acquisition”). The Company issued 1,913,438 shares of common stock in connection with the closing (the “Stock Consideration”). The Stock Consideration is subject to lock-up provisions that prohibit certain transfers of the shares and standstill provisions based upon the following schedule: 25% of the Stock Consideration will cease to be subject to the lockup provisions on the 6-month anniversary of the closing date of the BR Acquisition, an additional 50% of the Stock Consideration will cease to be subject to the lock-up provisions on the 9-month anniversary of the closing date of the BR Acquisition and an additional 25% of the Stock Consideration will cease to be subject to the lock-up provisions on the 12-month anniversary of the closing date of the BR Acquisition. The BestReviews Acquisition Agreement also contains representations, warranties, covenants, and indemnities of the parties thereto.

Limited Liability Company Agreement

In connection with the BR Acquisition, the Company and BR Parent also entered into an amended and restated limited liability company agreement of BestReviews (the “LLC Agreement”). Subject to the terms of the LLC Agreement, the Company has the right, beginning six months after the closing of the BR Acquisition, to purchase all (but not less than all) of the remaining 40% of the membership interests of BestReviews (the “Call Option”) using, at the Company’s election, cash, shares of common stock of the Company, or a combination thereof, at a purchase price to be based on a pre-determined multiple of BestReviews’ trailing 12-month EBITDA, with such purchase price capped per the LLC Agreement if the Call Option is exercised prior to the third anniversary of the closing of the BR Acquisition. In addition, beginning six months after closing the BR Acquisition, the Company is entitled to exercise a one-time right to purchase 25% of the units of membership interest of BestReviews retained by BR Parent (10% of the issued and outstanding equity) with terms identical to those applicable to the Call Option.

BR Parent also has the right, beginning three years after closing of the BR Acquisition, to cause the Company to purchase all (but not less than all) of the remaining 40% of the membership interests of BestReviews (the “Put Option”) using, at the Company’s election, cash, shares of common stock of the Company, or a combination thereof, at a purchase price to be determined in the same manner as if the Call Option was exercised.

If the exercise of the Call Option or the Put Option requires that the Company seek stockholder approval prior to issuing common stock of the Company as consideration in connection with such exercise, and the Company does not obtain requisite stockholder approval, then BestReviews will initiate a sale process for disposition of a majority of the voting power interests of BestReviews or other disposition of all or substantially all of BestReviews’ assets.

The LLC Agreement provides that BR Parent is entitled to certain registration rights under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the Company’s common stock issued to BR Parent. The Company is required to file (1) a registration statement on Form S-3 (“Form S-3”) with the Securities and Exchange Commission (“SEC”) to register the resale of the Stock Consideration within 90 days following the closing date of the BR Acquisition and (2) a Form S-3 with the SEC to register the resale of any shares of common stock of the Company issued in connection with an exercise of the Call Option or the Put Option within 60 days after the issuance of such shares.

The LLC Agreement contains other terms and conditions, including transfer restrictions, tag-along and drag-along rights, and indemnification obligations.

17

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The allocation of the purchase price presented below is based upon management’s preliminary estimates. The Company has engaged a valuation firm to assist with the valuation of intangible assets and noncontrolling interest; however, such valuation is not complete as of the filing date of this report. The preliminary allocation of the purchase price is as follows (in thousands):

Consideration
Cash consideration for acquisition	$	33,693
Fair value of noncontrolling interest	40,900
Value of shares issued for acquisition	34,595
Total consideration	$	109,188
Allocated Fair Value of Acquired Assets and Assumed Liabilities
Accounts receivable and other current assets	$	9,966
Property, plant and equipment	36
Intangible assets	12,540
Accounts payable and other current liabilities	(993		)
Total identifiable assets (liabilities), net	21,549
Goodwill	87,639
Total net assets acquired	$	109,188

The allocation of the purchase price is preliminary. The valuation of the noncontrolling interest and intangible assets are not complete. The intangible assets currently being evaluated are trade names, proprietary technology and processes and certain relationships; however, the Company may identify additional intangible assets prior to finalizing the purchase price allocation. 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 access to the Company’s subscriber base and non-contractual relationships, as well as expected future cost and revenue synergies. The entire amount of purchase price allocated to intangible assets and a portion of goodwill is expected to be deductible for tax purposes pursuant to Internal Revenue Code Section 197.

The results of operations and related goodwill of BestReviews have been included in the Consolidated Financial Statements beginning on the closing date of the acquisition and are included in the results of the Company’s troncX segment. For the three and six months endedJuly 1, 2018, reported revenues from BestReviews were $5.9 million and $9.1 million, respectively, and reported operating expenses were $4.7 million and $7.3 million, respectively. The pro forma effect of the acquisitions is not material to the Company’s Consolidated and Combined Financial Statements.

New York Daily News

On September 3, 2017, the Company completed the acquisition of 100% of the partnership interests in Daily News, L. P. (“DNLP”), the owner of the New York Daily News in New York City, pursuant to the Partnership Interest Purchase Agreement dated September 3, 2017, for a cash purchase price of $1 and the assumption of certain liabilities, subject to a post-closing working capital adjustment.During the second quarter of 2018, the Company finalized the working capital calculation which resulted in an immaterial adjustment. As of the filing date of this report, the final determination of the fair value of assets acquired and liabilities assumed has not been completed. The estimated values are presented in the table below (in thousands):

18

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Allocated Fair Value of Acquired Assets and Assumed Liabilities
Cash acquired as part of the purchase	$	2,555
Accounts receivable and other current assets	18,532
Property, plant and equipment, including assets under capital leases	47,972
Mastheads	3,400
Other long-term assets	10,448
Accounts payable and other current liabilities	(20,973		)
Pension and postemployment benefits liability	(25,446		)
Workers compensation and auto insurance liability	(25,999		)
Other long-term liabilities	(10,489		)
Total net assets acquired	$	—

NOTE 6: DISPOSITIONS AND DISCONTINUED OPERATIONS

California Properties

On February 7, 2018, the Company entered into a Membership Interest Purchase Agreement (“MIPA”) by and between the Company and Nant Capital, LLC (“Nant Capital”) pursuant to which the Company agreed to sell the California Properties to Nant Capital for an aggregate purchase price of $500 million in cash, plus the assumption of unfunded pension liabilities related to the San Diego Pension Plan, subject to a customary post-closing working capital adjustment (the "Nant Transaction"). The Nant Transaction closed on June 18, 2018 and resulted in a pre-tax gain of $407.6 million. The operations of the California Properties were included in both the troncM and troncX segments.

The sale of the California Properties represents a strategic shift that will have a major effect on our operations and financial results. As a result, and as discussed in Note 1, effective as of the date of the sale, the California Properties are reflected as discontinued operations on the consolidated balance sheets in accordance with ASC 360 and the results of operations of the California Properties are presented as discontinued operations in the statements of income in accordance with ASC 205-20 for all periods presented.

Dr. Patrick Soon-Shiong, a former director of the Company, together with Nant Capital, beneficially own 8,743,619 shares of tronc common stock, which represented 24.8% of the outstanding shares of tronc common stock as of July 1, 2018. The sale price also resulted in full realization of recorded asset values reflecting no impairment incurred prior to the sale.

In connection with the closing of the sale of the California Properties, the Company entered into a transition services agreement (“TSA”) with Nant whereby the Company will provide back-office and operational services for up to 12 months. Either party may discontinue all or a portion of the services being provided by providing 60 days advance notice. The parties can also extend the agreement. During the six months ended July 1, 2018, the Company recorded $1.2 million in revenue related to the TSA.

Nant Works, LLC

In connection with the private placement with Nant Capital in the second quarter of 2016, the Company entered into a term sheet with NantWorks, LLC pursuant to which the Company would receive access to certain patents as well as studio space, subject to definitive documentation and approval from Tribune Media Company. If the transactions contemplated by the term sheet were consummated, the Company would issue to NantStudio, LLC 333,333 shares of common stock and in exchange, would be entitled to retain the first $80 million in revenues derived from the licensed patents royalty free, after which the Company would pay to NantWorks a 6% royalty on subsequent revenues. With the completion of the Nant Transaction, the term sheet was terminated.

CIPS Marketing Group Inc.

The California Properties utilize the services of CIPS Marketing Group, Inc. (“CIPS”) for local marketing efforts such as distribution, door-to-door marketing and total market coverage. Prior to the Company’s sale of its 50% interest in

19

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

CIPS in July 2017, the investment was recorded as an equity investment, therefore income and expense recognized related to the marketing efforts are related party transactions. During the three and six months endedJune 25, 2017, the Company recorded $0.2 million and $0.5 million in revenue, respectively, from CIPS and $2.2 million and $3.8 million, respectively, in other operating expenses related to such marketing services. The CIPS revenue and marketing services expenses are included in discontinued operations.

forsalebyowner.com

On May 23, 2018, the Company sold substantially all of the assets of forsalebyowner.com in an asset sale for $2.5 million, plus an advertising sales commitment of $4.5 million over a term of two years.

The forsalebyowner.com balances are reflected as related to discontinued operations on the consolidated balance sheets for all periods presented and the results of operations are included in discontinued operations for all periods presented. In prior filings, forsalebyowner.com was part of the troncX segment.

Discontinued Operations

Earnings from discontinued operations through the respective transaction dates, included in the Consolidated Statements of Income are comprised of the following (in thousands):

	Three months ended						Six months ended
	July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Operating revenues	$	94,251		$	126,355		$	211,327		$	252,497
Operating expenses:
Compensation	25,065			34,722			58,763			71,479
Newsprint and ink	6,938			8,756			14,373			17,947
Outside services	30,075			34,353			61,650			68,168
Other operating expenses	26,804			33,280			56,541			65,401
Depreciation and amortization	1,328			1,674			2,960			4,156
Total operating expenses	90,210			112,785			194,287			227,151
Income from operations	4,041			13,570			17,040			25,346
Gain on sale	409,334			—			409,334			—
Interest expense, net	(23		)	(39		)	(53		)	(81		)
Loss on equity investments, net	—			139			—			349
Other income, net	613			150			1,338			300
Income tax expense	(133,420		)	(5,039		)	(132,914		)	(9,210		)
Income from discontinued operations, net of tax	$	280,545		$	8,781		$	294,745		$	16,704

20

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Discontinued operations by segment are presented below (in thousands):

	Three months ended						Six months ended
	July 1, 2018			June 25, 2017			July 1, 2018		June 25, 2017
Operating revenues
troncM	$	81,631		$	107,559		$	185,836	$	215,149
troncX	12,570			18,762			25,429		37,274
Corporate and eliminations	50			34			62		74
	$	94,251		$	126,355		$	211,327	$	252,497
Income from Operations
troncM	$	(75	)	$	8,249		$	10,918	$	15,460
troncX	4,065			5,328			6,079		9,902
Corporate and eliminations	51			(7		)	43		(16		)
	$	4,041		$	13,570		$	17,040	$	25,346
Depreciation and amortization
troncM	$	1,289		$	1,607		$	2,856	$	4,029
troncX	39			67			104		127
	$	1,328		$	1,674		$	2,960	$	4,156

The following table presents the aggregate carrying amounts of assets and liabilities classified as held for sale in the Consolidated Balance Sheets (in thousands):

	July 1, 2018		December 31, 2017
Carrying amount of assets related to discontinued operations:
Accounts receivable, (net of allowances of $0 and $7,388)	$	—	$	51,200
All other current assets	—		10,576
Goodwill	—		73,207
Intangibles	—		63,397
Property, plant and equipment, net	—		12,550
Deferred income taxes	—		28,787
All other long term assets	—		438
Total assets related to discontinued operations	$	—	$	240,155
Carrying amount of liabilities associated with discontinued operations:
Accounts payable and employee compensation and benefits	$	—	$	27,293
Deferred revenue	—		26,039
Other current liabilities	—		7,062
Pensions and postretirement benefits payable	—		90,155
Insurance	—		26,200
Income taxes payable	107,624		—
Total liabilities associated with discontinued operations	$	107,624	$	176,749

21

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 7: INVENTORIES

Inventories consisted of the following (in thousands):

	As of
	July 1, 2018		December 31, 2017
Newsprint	$	10,692	$	7,072
Supplies and other	325		340
Total inventories	$	11,017	$	7,412

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

NOTE 8: GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets at July 1, 2018 and December 31, 2017, excluding assets related to discontinued operations, consisted of the following (in thousands):

	July 1, 2018							December 31, 2017
	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)	$	7,312	$	(4,231	)	$	3,081	$	7,312	$	(3,762	)	$	3,550
Advertiser relationships (useful life of 2 to 13 years)	26,348		(11,204		)	15,144		26,348		(10,013		)	16,335
Tradenames (useful life of 20 years)	15,100		(2,962		)	12,138		15,100		(2,583		)	12,517
Other (useful life of 1 to 20 years)	15,862		(2,406		)	13,456		5,379		(2,243		)	3,136
Total intangible assets subject to amortization	$	64,622	$	(20,803	)	43,819		$	54,139	$	(18,601	)	35,538
Software (useful life of 2 to 10 years)	$	133,670	$	(100,432	)	33,238		$	129,795	$	(90,218	)	39,577
Goodwill and other intangible assets not subject to amortization
Goodwill						138,201							48,700
Newspaper mastheads						36,706							29,458
Total goodwill and other intangible assets						$	251,964						$	153,273

NOTE 9: DEBT

During the quarter ended July 1, 2018, the Company used a portion of the proceeds received from the Nant Transaction to repay all the amounts outstanding under the Senior Term Facility and terminated the Senior ABL Facility.

Senior Term Facility

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 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)

22

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

an amount equal to all voluntary prepayments of the term loans borrowed under the Senior Term Facility, subject to certain conditions. In 2015, $70 million of the expansion was drawn for the acquisition of The San Diego Union-Tribune.

The Term Loans bore interest at a variable interest rate based on either LIBOR or a base rate, in either case plus an applicable margin. The Term Loans amortized 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 Company was the borrower under the Senior Term Facility and each of the Company’s wholly-owned domestic subsidiaries, subject to certain exceptions (the “Subsidiary Guarantors”), guaranteed the payment obligations under the Senior Term Facility. The Senior Term Facility contained a number of covenants that, among other things, limited the ability of the 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. On June 21, 2018, the Company repaid the outstanding principal balance of $348.0 million under the Senior Term Facility and terminated the agreement. As a result of the early extinguishment of debt, the Company incurred a $7.7 million loss related to expensing the remaining balance of original issue discount and debt origination fees.

Senior ABL Facility

On August 4, 2014, the 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 was scheduled to mature on August 4, 2019. The Senior ABL Facility provided 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 was available for letters of credit and up to $15.0 million of availability under the Senior ABL Facility was available for swing line loans. The Senior ABL Facility also permitted the Company to increase the commitments under the Senior ABL Facility by up to $75.0 million. The Senior ABL Facility bore interest at a variable interest rate based on either LIBOR or a base rate, in either case plus an applicable margin. tronc, Inc. and the Subsidiary Guarantors were the borrowers under the Senior ABL Facility. tronc, Inc. and the Subsidiary Guarantors guaranteed the payment obligations under the Senior ABL Facility. The Senior ABL Facility contained a number of covenants that, among other things, limited the ability of tronc 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 were payable in respect of the Senior ABL Facility, including commitment fees of 0.25% and letter of credit fees. On June 21, 2018, the Company terminated the Senior ABL Facility. As a result of the Senior ABL Facility termination, the Company established $42.6 million of restricted cash to collateralize outstanding letters of credit previously secured by the Senior ABL Facility.

Capital Leases

The Company has capital leases on land and technology licenses. The total balance outstanding as of July 1, 2018 for capital leases was $7.5 million, of which $0.7 million is in short-term debt. The total balance as of December 31, 2017 for capital leases was $8.7 million, of which $0.8 million is in short-term debt.

NOTE 10: INCOME TAXES

For the three and six months endedJuly 1, 2018, the Company recorded income tax expense of $3.8 million and an income tax benefit of $2.9 million, respectively. The effective tax rate on pretax income from continuing operations was (33.1%) and 6.3% in the three and six months endedJuly 1, 2018, respectively. The negative rate for three months ending July 1, 2018 resulted from the year-to-date true-up arising from the annual effective tax rate dropping from approximately 19% to 6%.  The annual effective tax rate decreased due to the increase in estimated taxable income due to the reduction of interest expense stemming from the debt extinguishment. For the three and six months endedJuly 1, 2018, the rate differs from the U.S. federal statutory rate of 21% primarily due to state income taxes, net of federal benefit, and nondeductible expenses. In the case of a pretax loss, the unfavorable permanent differences, such as non-deductible meals and entertainment expense, have the effect of decreasing the tax benefit which, in turn, decreases the effective tax rate.

For the three and six months endedJune 25, 2017, the Company recorded income tax benefit of $0.4 million and $2.3 million, respectively. The effective tax rate on pretax income from continuing operations was 17.2% and 15.1% in the

23

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

three and six months endedJune 25, 2017, respectively. For the three and six months endedJune 25, 2017, the rate differs from the U.S. federal statutory rate of 35% primarily because the $6.0 million premium on stock buyback is a non-deductible permanent difference for the calculation of income taxes. The rate also differs due to state income taxes, net of federal benefit and nondeductible expenses and the domestic production activities deduction. In the case of a pretax loss, the unfavorable permanent differences, such as non-deductible meals and entertainment expense, have the effect of decreasing the tax benefit which, in turn, decreases the effective tax rate.

In the fourth quarter of 2017, the Company recorded an additional tax expense of $10.8 million that represents what it estimates is the impact of the enactment of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”).  The expense was based on currently available information and interpretations, which are continuing to evolve. As a result, the expense is considered provisional.  The Company continues to analyze additional information and guidance related to the Tax Act as supplemental legislation, regulatory guidance, or evolving technical interpretations become available, which could result in additional adjustments in future periods. Final calculations will be completed within the one-year measurement period ending December 22, 2018, as required under the rules issued by the SEC.

NOTE 11: PENSION AND OTHER POSTRETIREMENT BENEFITS

Multiemployer Pension Plans

The Company contributes to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover its union-represented employees.

Defined Benefit Plans

The Company was formerly the sponsor of the San Diego Union-Tribune, LLC Retirement Plan (the “San Diego Pension Plan”), which was divested in June 2018 as part of the Nant Transaction. The Company contributed $5.7 million to the San Diego Pension Plan during fiscal 2018 prior to the divestiture. Expenses related to the San Diego Pension Plan are included in discontinued operations.

The Company is the sponsor of a single-employer defined benefit plan, the Daily News Retirement Plan (the “NYDN Pension Plan”). The NYDN Pension Plan provides benefits to certain current and former employees of the New York Daily News. As of March 31, 2018, future benefits under the NYDN Pension Plan were frozen and no new participants are permitted after that time. The Company contributed $0.5 million to the NYDN Pension Plan in the six months ended July 1, 2018. The Company expects to contribute $3.4 million to the NYDN Pension Plan during the remainder of 2018. The components of net periodic benefit for the NYDN Pension Plan are as follows (in thousands):

	Three Months Ended					Six Months Ended					Affected Line Items in the Consolidated Statements of Income (Loss)
	July 1, 2018			June 25, 2017		July 1, 2018			June 25, 2017
Service cost	$	(8	)	$	—	$	72		$	—	Compensation
Interest cost	825			—		1,636			—		Other income, net
Expected return on assets	(1,165		)	—		(2,333		)	—		Other income, net
Net periodic benefit	$	(348	)	$	—	$	(625	)	$	—

Postretirement Benefits Other Than Pensions

The Company provides postretirement health care to retirees pursuant to a number of benefit plans. The plans are frozen for new non-union 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 credit for the Company’s postretirement health care and life insurance plans were as follows (in thousands):

24

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

	Three Months Ended						Six Months Ended						Affected Line Items in the Consolidated Statements of Income (Loss)
	July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Service cost	$	4		$	3		$	7		$	6		Compensation
Interest cost	8			55			17			110			Other income, net
Amortization of prior service credits	(2,634		)	(292		)	(5,267		)	(584		)	Other income, net
Amortization of actuarial gains	(657		)	(47		)	(1,315		)	(93		)	Other income, net
Net periodic benefit	$	(3,279	)	$	(281	)	$	(6,558	)	$	(561	)

NOTE 12: NONCONTROLLING INTEREST

Noncontrolling interest represents the 40% membership interest in BestReviews not owned by the Company and is presented between liabilities and stockholders’ equity within the Company’s consolidated balance sheet because the Put Option described in Note 5 could, upon exercise, require the Company, under certain circumstances, to pay cash to purchase the noncontrolling interest. Each quarter, the carrying value of noncontrolling interest is adjusted to the amount the Company would be required to pay the noncontrolling interest holders as if the Put Option had been exercised as of the balance sheet date, with an offsetting adjustment to stockholders’ equity. Adjustments to increase (decrease) the carrying value of noncontrolling interest also reduce (increase) the amount of net income or loss attributable to tronc common stockholders for purposes of determining both basic and diluted earnings per share.

A summary of the activity with respect to non-controlling interest for the six months ended July 1, 2018 is as follows (in thousands):

Balance at December 31, 2017	$	—
Acquisition of BestReviews	40,900
Income attributable to noncontrolling interest	710
Balance at July 1, 2018	$	41,610

NOTE 13: EARNINGS PER SHARE

Basic earnings per common share is calculated by dividing net income attributable to tronc 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. In accordance with ASC 260-10-55, net loss from continuing operations is the control number in determining whether potential common shares are dilutive. Since there is loss from continuing operations, all potential common shares are considered anti-dilutive.

25

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

For the three and six months endedJuly 1, 2018 and June 25, 2017, basic and diluted earnings per common share were as follows (in thousands, except per share amounts):

	Three Months Ended						Six Months Ended
	July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Income (Loss) - Numerator:
Loss from continuing operations	$	(15,101	)	$	(1,940	)	$	(43,813	)	$	(12,852	)
Less: Net income from continuing operations attributable to noncontrolling interest	448			—			710			—
Income available to common shareholders, before discontinued operations	(15,549		)	(1,940		)	(44,523		)	(12,852		)
Income from discontinued operations	280,545			8,781			294,745			16,704
Net income available to tronc stockholders	$	264,996		$	6,841		$	250,222		$	3,852
Shares - Denominator:
Weighted average number of common shares outstanding (basic)	35,288			32,825			35,045			34,566
Dilutive effect of employee stock options and RSUs	—			—			—			—
Adjusted weighted average shares outstanding (diluted)	35,288			32,825			35,045			34,566
Net income (loss) attributable to tronc per common share:
Continuing operations	$	(0.44	)	$	(0.06	)	$	(1.27	)	$	(0.37	)
Discontinued operations	7.95			0.27			8.41			0.48
Net income per common share	$	7.51		$	0.21		$	7.14		$	0.11
Diluted income (loss) per common share:
Continuing operations	$	(0.44	)	$	(0.06	)	$	(1.27	)	$	(0.37	)
Discontinued operations	7.95			0.27			8.41			0.48
Net income per common share-diluted	$	7.51		$	0.21		$	7.14		$	0.11

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 924,887 and 973,637 for the three and six months endedJuly 1, 2018, respectively. 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 836,843 and 883,359 for the three and six months endedJune 25, 2017, respectively.

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 1,821,836 and 1,874,250 for the three and six months endedJuly 1, 2018, respectively. 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 558,761 and 297,592 for the three and six months endedJune 25, 2017, respectively.

NOTE 14: STOCKHOLDERS’ EQUITY

Stock Repurchases

On March 23, 2017, the Company entered into a purchase agreement with investment funds associated with Oaktree Capital Management, L.P. (“Oaktree”), pursuant to which the Company acquired 3,745,947 shares of the Company’s common stock for $15.00 per share or a total purchase price of $56.2 million. The purchase agreement contained a “standstill” covenant prohibiting Oaktree from acquiring, directly or indirectly, any of the Company’s common stock,

26

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

soliciting proxies to vote shares of the Company’s common stock or taking certain actions with respect to any business combination, asset acquisition or disposition or similar transaction involving the Company through March 22, 2019 (the “Standstill Period”). The parties also agreed to a mutual non-disparagement covenant applicable during the Standstill Period and to a mutual release of claims. On March 22, 2017, the Company’s stock price closed at $13.39. The $6.0 million difference between the aggregate purchase price and the fair value of the acquired stock at the transaction date was expensed as a premium on stock buyback in the Consolidated Statements of Income (Loss).

Significant Shareholders

Merrick Media, LLC

On March 23, 2017, the Company entered into Amendment No. 1 (the “Amendment”) to the Securities Purchase Agreement dated February 3, 2016 among the Company, Merrick Media, LLC (“Merrick Media”) and Michael W. Ferro, Jr., the Company’s non-executive Chairman of the Board at the time the agreement was signed. The Amendment increased from 25% to 30% the maximum percentage of the Company’s outstanding shares of common stock that Merrick Media and its affiliates may acquire.

Mr. Ferro is the manager of Merrick Venture Management, LLC, which is the sole manager of Merrick Media. Because Merrick Venture Management, LLC serves as the sole manager of Merrick Media, Mr. Ferro may be deemed to indirectly control all of the shares of the Company’s common stock owned by Merrick Media. Mr. Ferro, together with his affiliated entities, beneficially owned 9,071,529 shares of tronc common stock, which represented 25.7% of tronc common stock as of July 1, 2018. On April 13, 2018, Mr. Ferro, Merrick Media, LLC and Merrick Ventures Management, LLC entered into an agreement to sell all of their shares in the Company to an unrelated third party. This agreement was subsequently canceled during the second fiscal quarter of 2018.

Nant Capital, LLC

Dr. Patrick Soon-Shiong, a former director of the Company, together with Nant Capital, LLC (“Nant Capital”), beneficially own 8,743,619 shares of tronc common stock, which represented 24.8% of the outstanding shares of tronc common stock as of July 1, 2018. California Capital Equity, LLC (“CalCap”) directly owns all of the equity interests of Nant Capital, and CalCap may be deemed to have beneficial ownership of the shares held by Nant Capital. Dr. Soon-Shiong directly owns all of the equity interests of CalCap and may be deemed to beneficially own, and share voting power and investment power with Nant Capital over all shares of tronc common stock beneficially owned by Nant Capital. Under the Securities Purchase Agreement dated May 22, 2016, among the Company, Nant Capital and Dr. Patrick Soon-Shiong (“Nant Purchase Agreement”), Nant Capital and Dr. Soon-Shiong and their respective affiliates are prohibited, without the prior written approval of the Board of Directors, from acquiring additional equity of the Company if the acquisition could result in their beneficial ownership of more than 25% of the Company’s then-outstanding shares of common stock. The Nant Purchase Agreement also includes covenants prohibiting the transfer of shares of the Company’s common stock if the transfer would result in a person beneficially owning more than 4.9% of the Company’s then-outstanding shares of common stock following the transfer, as well as transfers to a material competitor of the Company in any of the Company’s then-existing primary geographical markets.

NOTE 15: ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table sets forth the components of accumulated other comprehensive income (loss), net of tax, where applicable (in thousands):

	Foreign Currency			OPEB			Pension			Total
Balance at December 31, 2017	$	(31	)	$	9,932		$	(23,428	)	$	(13,527	)
Amounts reclassified from AOCI	—			(4,752		)	—			(4,752		)
Foreign currency translation adjustments	(5		)	—			—			(5		)
AOCI recognized in discontinued operations	—			—			25,397			25,397
Balance at July 1, 2018	$	(36	)	$	5,180		$	1,969		$	7,113

27

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following table presents the amounts and line items in the Consolidated Statements of Income where adjustments reclassified from accumulated other comprehensive income (loss) were recorded during the three and six months endedJuly 1, 2018 and June 25, 2017 (in thousands):

	Three Months Ended						Six months ended
	July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017			Affected Line Items in the Consolidated Statements of Income (Loss)
Accumulated Other Comprehensive Income (Loss) Components
Pension and postretirement benefit adjustments:
Amortization of prior service credits	$	(2,634	)	$	(292	)	$	(5,267	)	$	(584	)	Other income, net
Amortization of actuarial gains	(657		)	(47		)	(1,315		)	(93		)	Other income, net
Total before taxes	(3,291		)	(339		)	(6,582		)	(677		)
Tax effect	(915		)	(133		)	(1,830		)	(267		)	Income tax expense (benefit)
Total reclassifications for the period	$	(2,376	)	$	(206	)	$	(4,752	)	$	(410	)

NOTE 16: CONTINGENCIES

Legal Proceedings

The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business. The legal entities comprising our operations are defendants from time to time in actions for matters arising out of their business operations. In addition, the legal entities comprising our operations are involved from time to time as parties in various regulatory, environmental and other proceedings with governmental authorities and administrative agencies.

Tribune Company Bankruptcy

On December 31, 2012, Tribune Media Company, formerly Tribune Company (“TCO”) and 110 of its direct and indirect wholly-owned subsidiaries that had filed voluntary petitions for relief under Chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware on December 8, 2008 (or on October 12, 2009, in the case of Tribune CNLBC, LLC) emerged from Chapter 11. Certain of the legal entities included in the Consolidated Financial Statements of tronc were Debtors or, as a result of the restructuring transactions undertaken at the time of the Debtors’ emergence, are successor legal entities to legal entities that were Debtors (“tronc Debtors”).

Notices of appeal of the Bankruptcy Court’s order confirming the Plan (the “Confirmation Order”) were filed by (i) Aurelius Capital Management L.P. on behalf of its managed entities that were holders of TCO’s senior notes and Exchangeable Subordinated Debentures due 2029 (“PHONES”), (ii) Law Debenture Trust Company of New York (“Law Debenture”) and Deutsche Bank Trust Company Americas (“Deutsche Bank”), each successor trustees under the respective indentures for TCO’s senior notes; (iii) Wilmington Trust Company, as successor indenture trustee for the PHONES, and (iv) EGI-TRB, L.L.C., a Delaware limited liability company wholly-owned by Sam Investment Trust (a trust established for the benefit of Samuel Zell and his family) (the “Zell Entity”). The appellants sought, among other relief, to overturn the Confirmation Order and certain prior orders of the Bankruptcy Court embodied in the Plan, including the settlement of certain claims and causes of action related to a series of transactions consummated by TCO, the TCO employee stock ownership plan, the Zell Entity and Samuel Zell in 2007. Each of the Confirmation Order appeals have been dismissed or otherwise resolved by a final order, with the exception of the appeals of Law Debenture and Deutsche Bank, which remain pending before the U. S. District Court for the District of Delaware. There is no stay of the Confirmation Order in place pending resolution of the confirmation related appeals.

The Bankruptcy Court has entered final decrees collectively closing 106 of the Debtors’ Chapter 11 cases, including the last one of the tronc Debtors’ cases. The remaining Chapter 11 cases relate to Debtors and successor legal entities that are subsidiaries of TCO. These cases have not yet been closed by the Bankruptcy Court, and certain claims asserted against

28

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

various of the Debtors (including certain of the tronc Debtors) in the Chapter 11 cases remain unresolved. The remaining Chapter 11 cases continue to be administered under the caption “In re: Tribune Media Company, et al.,” Case No 08-13141.

NOTE 17: SEGMENT INFORMATION

The Company’s business segments are based on the organization structure used by management for making operating and investment decisions and for assessing performance. Beginning in the second quarter of fiscal 2016, the operating segments consist of troncM and troncX. troncM is comprised of the Company’s media groups excluding their digital revenues and related digital expenses, except digital subscription revenues when bundled with a print subscription. troncX includes the Company’s digital revenues and related digital expenses from local tronc websites, third party websites, mobile applications, digital only subscriptions, TCA, and BestReviews. The Company determined that the disposition of the California Properties and forsalebyowner.com did not result in changes to the Company’s segments. Assets are not presented to or used by management at a segment level for making operating and investment decisions and therefore are not reported.

The Company measures segment profit using income from operations, which is defined as income from operations before net interest expense, gain on investment transactions, reorganization items and income taxes.

As discussed in Note 2, the Company adopted ASU 2014-09, Topic 606, Revenue from Contracts with Customers effective January 1, 2018,using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results of operations for periods after January 1, 2018 reflect the changes under ASU 2014-09. Results of operations for periods before January 1, 2018, continue to be reported under guidance in effect at that time.

Disaggregated operating revenues and income (loss) from continuing operations by operating segment for the three months ended July 1, 2018 and June 25, 2017, respectively, were as follows for the periods indicated (in thousands):

	Three Months Ended
	tronc M				troncX				Corporate and Eliminations						Consolidated
	(Print)				(Digital)
	July 1, 2018		June 25, 2017		July 1, 2018		June 25, 2017		July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Advertising	$	87,800	$	93,285	$	23,987	$	31,577	$	—		$	(37	)	$	111,787		$	124,825
Circulation	88,616		73,978		4,172		2,230		—			—			92,788			76,208
Commercial print and delivery	25,784		24,600		—		—		—			—			25,784			24,600
Direct mail	8,025		9,214		—		—		—			—			8,025			9,214
Content syndication and other	2,072		3,801		11,982		5,673		599			(886		)	14,653			8,588
Other	35,881		37,615		11,982		5,673		599			(886		)	48,462			42,402
Operating revenues	212,297		204,878		40,141		39,480		599			(923		)	253,037			243,435
Operating expenses	204,410		191,803		36,691		36,403		13,181			10,767			254,282			238,973
Income (loss) from operations	$	7,887	$	13,075	$	3,450	$	3,077	$	(12,582	)	$	(11,690	)	(1,245		)	4,462
Interest expense															(5,412		)	(6,365		)
Loss on early extinguishment of debt															(7,666		)	—
Loss on investments, net															(665		)	(723		)
Other income, net															3,640			284
Loss from continuing operations before income taxes															$	(11,348	)	$	(2,342	)
Depreciation and amortization	$	3,990	$	5,281	$	4,505	$	3,512	$	4,447		$	4,194		$	12,942		$	12,987

29

TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Disaggregated operating revenues and income (loss) from continuing operations by operating segment for the six months ended July 1, 2018 and June 25, 2017, respectively, were as follows for the periods indicated (in thousands):

	Six Months Ended
	tronc M				troncX				Corporate and Eliminations						Consolidated
	(Print)				(Digital)
	July 1, 2018		June 25, 2017		July 1, 2018		June 25, 2017		July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Advertising	$	170,542	$	184,084	$	46,037	$	60,493	$	—		$	(131	)	$	216,579		$	244,446
Circulation	173,242		149,011		7,681		4,283		—			—			180,923			153,294
Commercial print and delivery	52,789		51,173		—		—		—			—			52,789			51,173
Direct mail	15,628		17,800		—		—		—			—			15,628			17,800
Content syndication and other	4,307		6,733		21,567		11,631		(217		)	(1,667		)	25,657			16,697
Other	72,724		75,706		21,567		11,631		(217		)	(1,667		)	94,074			85,670
Operating revenues	416,508		408,801		75,285		76,407		(217		)	(1,798		)	491,576			483,410
Operating expenses	408,821		383,618		72,453		73,755		43,308			21,284			524,582			478,657
Income (loss) from operations	$	7,687	$	25,183	$	2,832	$	2,652	$	(43,525	)	$	(23,082	)	(33,006		)	4,753
Interest expense															(11,976		)	(12,800		)
Loss on early extinguishment of debt															(7,666		)	—
Premium on stock buyback															—			(6,031		)
Loss on investments, net															(1,394		)	(1,621		)
Other income, net															7,303			567
Loss from continuing operations before income taxes															$	(46,739	)	$	(15,132	)
Depreciation and amortization	$	7,962	$	8,565	$	9,120	$	6,689	$	8,943		$	8,428		$	25,959		$	23,682

The operating revenues and operating results from continuing operations presented above are not necessarily indicative of the results that may be expected for the full fiscal year.

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TRONC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 18: SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information for each of the periods presented is as follows (in thousands):

	Six months ended
	July 1, 2018		June 25, 2017
Cash paid during the period for:
Interest	$	10,489	$	11,325
Income taxes, net of refunds	3,967		113
Non-cash items in financing activities:
Issuance of stock from treasury for acquisition	34,595		—

The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported within the Consolidated Condensed Balance Sheet that sum to the cash, cash equivalents and restricted cash as reported in the Consolidated Statement of Cash Flows:

	As of		As of
	July 1, 2018		December 31, 2017
Cash and cash equivalents	$	214,544	$	185,351
Restricted cash included in other assets	42,600		—
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	257,144	$	185,351

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the other sections of this Quarterly Report on Form 10-Q, including the Company’s Consolidated 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 16, 2018, particularly under Item 1A. “Risk Factors,” and in the Company’s other filings with the SEC.

We believe that the assumptions underlying the Consolidated Financial Statements included in this Quarterly Report are reasonable. However, the Consolidated Financial Statements may not necessarily reflect our results of operations, financial position and cash flows for future periods.

OVERVIEW

tronc, Inc., formerly Tribune Publishing Company, was formed as a Delaware corporation on November 21, 2013. tronc, Inc. together with its subsidiaries (collectively, the “Company” or “tronc”) is a media company rooted in award-winning journalism. Headquartered in Chicago, tronc operates local media businesses in eight markets with titles including the Chicago Tribune, New York Daily News, The Baltimore Sun, Orlando Sentinel, South Florida’s Sun Sentinel, Virginia’s Daily Press and The Virginian-Pilot, The Morning Call of Lehigh Valley, Pennsylvania andthe Hartford Courant. tronc also operates Tribune Content Agency and the Daily Meal and on February 6, 2018, the Company became a majority owner in BestReviews LLC (“BestReviews”). On May 18, 2018, the Company acquired Virginian-Pilot Media Companies LLC, owner of the The Virginian-Pilot a daily newspaper based in Norfolk, Virginia and associated businesses (“Virginian-Pilot”). See Note 5 to the Consolidated Financial Statements for further information on acquisitions.

On May 23, 2018, the Company completed the sale of substantially all of the assets of forsalebyowner.com and on June 18, 2018, the Company completed the sale of the Los Angeles Times, The San Diego Union-Tribune and various other titles of the Company’s California properties (“California Properties”). See Note 6 for more information on the dispositions and related discontinued operations.

tronc’s continuing legacy of brands, including the New York Daily News and The Virginian-Pilot, have earned a combined 60 Pulitzer Prizes and are committed to informing, inspiring and engaging local communities. tronc’s brands create and distribute content across its media portfolio, offering integrated marketing, media, and business services to consumers and advertisers, including digital solutions and advertising opportunities.

The Company continually assesses its operations in an effort to identify opportunities to enhance operational efficiencies and reduce expenses. In the past these activities have included, and could include in the future, outsourcing of various functions or operations, abandonment of leased space and other activities which may result in changes to employee headcount. See Note 3 to the Consolidated Financial Statements for more information on changes in operations in the first half of 2018. The Company expects to continue to take actions deemed appropriate to enhance profitability but does not currently know whether or when any such actions will occur or the potential costs and expected savings. Depending on the actions taken and the timing of any such actions, the anticipated cost savings could be recognized in fiscal periods that do not correspond to the fiscal period(s) in which the charges are recognized. As a result, the Company’s net income trends could be impacted and more difficult to predict.

In the first quarter, the U.S. imposed preliminary tariffs on certain Canadian newsprint suppliers. While the tariffs are not final, newsprint suppliers have raised their prices approximately 23.0% in response. Higher newspaper prices may negatively impact profitability and demand for newsprint.

Significant transactions and recent events

On January 29, 2018, the Company and Cars.com Inc. agreed to convert the Company’s affiliate markets into Cars.com's direct retail channel. The agreement, which resulted in more than 2,000 car deal customers moving from the Company to Cars.com, took effect February 1, 2018. The Company’s related sales and support teams have joined Cars.com in connection with the transition. The deal also includes a multi-year advertising and marketing agreement between the Company and Cars.com.

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On February 6, 2018, the Company acquired a 60% membership interest in BestReviews LLC (“BestReviews”), a company engaged in the business of testing, researching and reviewing consumer products, pursuant to an Acquisition Agreement, entered into on the same date (the “BestReveiws Acquisition Agreement”), among the Company, BestReviews Inc., a Delaware corporation (“BR Parent”), BestReviews and the stockholders of Parent named therein. The total purchase price of $68.3 million consisted of $33.7 million in cash, subject to a post-closing working capital adjustment due from the seller of approximately $0.6 million, and $34.6 million in common stock of the Company. The Company issued 1,913,438 shares of common stock in connection with the closing (the “Stock Consideration”). See Note 5 to the Consolidated Financial Statements for additional information related to the acquisition.

On February 7, 2018, the Company entered into a Membership Interest Purchase Agreement (“MIPA”) by and between the Company and Nant Capital, LLC (“Nant Capital”), pursuant to which the Company would sell the California Properties to Nant Capital for an aggregate purchase price of $500 million in cash, plus the assumption of unfunded pension liabilities related to the San Diego Pension Plan, subject to a customary post-closing working capital adjustment (the "Nant Transaction"). The Nant Transaction closed on June 18, 2018. Dr. Soon-Shiong, a former director of the Company, together with Nant Capital, beneficially own 8,743,619 shares of tronc common stock, which represented 24.8% of the outstanding shares of tronc common stock as of July 1, 2018. The gain on sale and results are included in discontinued operations in the statement of operations for all periods presented. See Note 6 to the Consolidated Financial Statements for additional information related to the acquisition.

On March 18, 2018, Mr. Ferro retired from the Company’s Board. As Mr. Ferro is no longer actively engaged in the business and the Company remained contractually committed for the future payments due under the Consulting Agreement, the Company recognized expense for the full $15.0 million due under the Consulting Agreement in outside services in the first quarter of 2018 and made the initial $5.0 million payment in January 2018. In the second quarter of fiscal 2018, the Company amended the Consulting Agreement. The amendment reduced the total fees due under the Consulting Agreement by $2.5 million (from $15 million to $12.5 million) and terminated the Company’s obligation to engage Merrick Ventures as its advisor. Instead, the amendment allows the Company to engage Merrick Ventures as its advisor, if it so chooses, but at no additional cost to the Company. If so engaged, the Company would indemnify Merrick Ventures if the Company requests it to meet with third parties. In June 2018, the Company paid the remaining $7.5 million in fees due under the amended Consulting Agreement in connection with the execution of the amendment. The Company recognized a credit of $2.5 million for the reduction in fees due under the Consulting Agreement in outside services in the second quarter of 2018. The non-compete covenants and amended Securities Purchase Agreement terms contained in the Consulting Agreement were not altered by the amendment and remain in place through December 31, 2020.

On May 23, 2018, the Company sold substantially all of the assets of forsalebyowner.com, LLC, for $2.5 million in cash, subject to a post-closing working capital adjustment. In connection with the sale agreement, the buyer agreed to purchase advertising placements from the Company in an amount at least equal to $4.5 million over a two-year term. The gain on sale and results are included in discontinued operations in the statement of operations for all periods presented. See Note 6 to the Consolidated Financial Statements for additional information related to the acquisition.

On May 28, 2018, the Company acquired Virginian-Pilot Media Companies, LLC (“Virginian-Pilot”), a company engaged in the ownership and operation of The Virginian-Pilot daily newspaper based in Norfolk, Virginia. The purchase price was $34 million subject to a post-closing working capital adjustment. As part of the acquisition, the Company also acquired Virginian-Pilot’s real estate portfolio (comprised of approximately 460,000 square feet), including its headquarters building in downtown Norfolk, its printing and distribution facilities in Virginia Beach and a number of satellite offices in Norfolk and North Carolina. See Note 5 to the Consolidated Financial Statements for additional information related to the acquisition.

On June 21, 2018, the Company used a portion of the proceeds from the Nant Transaction to repay the outstanding principal and terminate the Senior Term Facility. The Company also terminated the Senior ABL Facility. As a result of the Senior ABL Facility termination, the Company established $42.6 million of restricted cash for outstanding letters of credit previously secured by the Senior ABL Facility. As a result of the early extinguishment of debt, the Company incurred a $7.7 million loss related to expensing the remaining balance of original issue discount and debt origination fees. See Note 9 to the Consolidated Financial Statements for additional information related to the acquisition.

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Segments

The Company manages its business as two distinct segments, troncM and troncX. troncM is comprised of the Company’s media groups excluding their digital revenues and related digital expenses, except digital subscription revenues when bundled with a print subscription. troncX includes the Company’s digital revenues and related digital expenses, from local tronc websites, third party websites, mobile applications, digital-only subscriptions, Tribune Content Agency (“TCA”), and BestReviews.

troncM

troncM’s media groups include the Chicago Tribune Media 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, the New York Daily News Group and the Virginia Media Group (includes the Daily Press and the recently acquired TheVirginian-Pilot).

In the six months ended July 1, 2018, 40.9% of troncM’s operating revenues were derived from advertising. These revenues were generated from the sale of advertising space in published issues of the newspapers and from the delivery of preprinted advertising supplements. Approximately 41.5% of operating revenues for the six months ended July 1, 2018 were generated from the sale of newspapers and other publications to individual subscribers or to sales outlets that re-sell the newspapers. The remaining 17.6% of operating revenues for the six months ended July 1, 2018 were generated from the provision of commercial printing and delivery services to other newspapers, direct mail advertising and services, and other related activities.

Newspaper print advertising is typically in the form of display, preprint or classified advertising. Advertising and marketing services revenues are comprised of three basic categories: retail, national and classified. Retail is a category of customers who tend to do business directly with the public. National is a category of customers who tend to do business directly with other businesses. Classified is a type of advertising which is other than display or preprint.

Circulation revenue results from the sale of print editions of newspapers to individual subscribers and the sale of print editions of newspapers to sales outlets that re-sell the newspapers.

Other revenues are derived from commercial printing and delivery services provided to other newspapers, direct mail advertising and services and other related activities. 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 incremental profitability and revenues. The Company currently distributes national newspapers (including The New York Times, USA Today, and The Wall StreetJournal) in its local markets under multiple agreements. Additionally, in New York, Chicago, and South Florida, the Company provides some or all of these services to other local publications.

Products and Services

Our product mix consists of three publication types: (i) daily newspapers, (ii) weekly newspapers and (iii) niche publications and direct mail. 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

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As of July 1, 2018, the Company’s prominent print publications include:

Media Group	City	Masthead	Circulation Type	Paid or Free
Chicago Tribune Media Group
	Chicago, IL	Chicago Tribune	Daily	Paid
	Chicago, IL	Chicago Magazine	Monthly	Paid
	Chicago, IL	Hoy	Weekly	Free
	Chicago, IL	RedEye	Weekly	Free
The New York Daily News Group
	New York, NY	New York Daily News	Daily	Paid
Sun Sentinel Media Group
	Broward County, FL, Palm Beach County, FL	Sun Sentinel	Daily	Paid
	Broward County, FL, Palm Beach County, FL	el Sentinel	Weekly	Free
Orlando Sentinel Media Group
	Orlando, FL	Orlando Sentinel	Daily	Paid
	Orlando, FL	el Sentinel	Weekly	Free
The Baltimore Sun Media Group
	Baltimore, MD	The Baltimore Sun	Daily	Paid
	Annapolis, MD	The Capital	Daily	Paid
	Westminster, MD	Carroll County Times	Daily	Paid
Hartford Courant Media Group
	Hartford County, CT, Middlesex County, CT, Tolland County, CT	The Hartford Courant	Daily	Paid
Virginia Media Group
	Newport News, VA (Peninsula)	Daily Press	Daily	Paid
	Norfolk, VA	The Virginian-Pilot	Daily	Paid
The Morning Call Media Group
	Lehigh Valley, PA	The Morning Call	Daily	Paid

troncX

troncX comprises the Company’s digital operations and includes the Company’s digital revenues and related digital expenses from local tronc websites, third party websites, mobile applications, digital only subscriptions, TCA, and BestReviews.

TCA is a syndication and licensing business providing content solutions for publishers around the globe.  Working with a vast collection of the world’s news and information sources, TCA delivers a daily news service and syndicated premium content to over 1,700 media and digital information publishers in more than 70 countries. Tribune News Service delivers material from 70 leading publications, including Chicago Tribune, Bloomberg News, Miami Herald, The Dallas Morning News, Seattle Times,The Philadelphia Inquirer, and Los Angeles Times. Tribune Premium Content syndicates columnists such as Leonard Pitts, Cal Thomas, Clarence Page, Ask Amy, 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 traces its roots to 1918.

On February 6, 2018, the Company acquired a 60% membership interest in BestReviews LLC (“BestReviews”), a company engaged in the business of testing, researching and reviewing consumer products. BestReviews generates referral fee revenue by directing online traffic from their published reviews to sites where the products can be purchased. BestReviews has affiliate agreements with online sellers, of which the two largest are Amazon.com and Walmart.com. BestReviews receives a referral fee once the product is purchased.

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On May 23, 2018, the Company sold substantially all of the assets of forsalebyowner.com in an asset sale. The forsalebyowner.com results are included in discontinued operations in the statement of operations for all periods presented.

In the six months ended July 1, 2018, 61.2% of troncX’s operating revenues were derived from advertising. These revenues were generated from the sale of advertising space on interactive websites and digital marketing services. The remaining 38.8% of operating revenues for the six months ended July 1, 2018 were generated from the sale of digital content and other related activities.

Digital advertising consists of website display, banner ads, advertising widgets, coupon ads, video, search advertising and linear ads placed by tronc on websites. Advertising services include development of mobile websites, search engine marketing and optimization, social media account management and content marketing for its customers’ web presence for small to medium size businesses.

Products and Services

As of July 1, 2018, the Company’s prominent websites include:

Websites
www.tronc.com	www.orlandosentinel.com	www.thedailymeal.com
www.chicagotribune.com	www.orlandosentinel/elsentinel.com	www.theactivetimes.com
www.chicagomag.com	www.baltimoresun.com	www.dailypress.com
www.sun-sentinel.com	www.capitalgazette.com	www.pilotonline.com
www.sun-sentinel/elsentinel.com	www.carrollcountytimes.com	www.vivelohoy.com
www.bestreviews.com	www.courant.com	www.redeyechicago.com
www.nydailynews.com	www.themorningcall.com

The Company’s results of operations, when examined on a quarterly basis, reflect the seasonality of tronc’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.

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Results of Operations

Consolidated

Operating results from continuing operations for the three and six months ended July 1, 2018 and June 25, 2017 are shown in the table below (in thousands).

	Three months ended								Six months ended
	July 1, 2018			June 25, 2017			% Change		July 1, 2018			June 25, 2017			% Change
Operating revenues	$	253,037		$	243,435		3.9	%	$	491,576		$	483,410		1.7	%
Compensation	106,455			92,609			15.0	%	217,293			189,003			15.0	%
Newsprint and ink	16,770			14,091			19.0	%	31,368			28,425			10.4	%
Outside services	81,818			80,526			1.6	%	180,803			161,021			12.3	%
Other operating expenses	36,297			38,760			(6.4	%)	69,159			76,526			(9.6	%)
Depreciation and amortization	12,942			12,987			(0.3	%)	25,959			23,682			9.6	%
Total operating expenses	254,282			238,973			6.4	%	524,582			478,657			9.6	%
Income (loss) from operations	(1,245		)	4,462			*		(33,006		)	4,753			*
Interest expense, net	(5,412		)	(6,365		)	(15.0	%)	(11,976		)	(12,800		)	(6.4	%)
Loss on early extinguishment of debt	(7,666		)	—			*		$	(7,666	)	$	—		*
Premium on stock buyback	—			—			*		—			(6,031		)	*
Loss on equity investments, net	(665		)	(723		)	(8.0	%)	(1,394		)	(1,621		)	(14.0	%)
Other income, net	3,640			284			*		7,303			567			*
Income tax expense (benefit)	3,753			(402		)	*		(2,926		)	(2,280		)	28.3%
Loss from continuing operations	(15,101		)	(1,940		)	*		(43,813		)	(12,852		)	*
Income from discontinued operations, net of taxes	280,545			8,781			*		294,745			16,704			*
Net Income	265,444			6,841			*		250,932			3,852			*
Income attributable to noncontrolling interest	448			—			*		710			—			*
Net income attributable to tronc	$	264,996		$	6,841		*		$	250,222		$	3,852		*

* Represents positive or negative change in excess of 100%

Three months ended July 1, 2018 compared to the Three months ended June 25, 2017

Operating Revenues—Operating revenues increased3.9%, or $9.6 million, in the three months ended July 1, 2018 compared to the same period for 2017. The increase was due primarily to the combined impact of the acquisitions of the New York Daily News in the third quarter of 2017, BestReviews in the first quarter of 2018, and The Virginian-Pilot in the second quarter of 2018. Such acquisitions contributed $42.8 million in revenue during the three months ended July 1, 2018. The increase was partially offset by, decreases in advertising and other revenue. The decrease in advertising revenue also reflects the conversion of the Cars.com agreement.

Compensation Expense—Compensation expense increased15.0%, or $13.8 million, in the three months ended July 1, 2018 due primarily to compensation expenses from the acquisitions mentioned above. The $20.5 million increase from acquisitions was partially offset by a decrease in salary expense of $6.5 million as a result of the reduction in headcount due to the prior periods personnel restructuring.

Newsprint and Ink Expense—Newsprint and ink expense increased19.0%, or $2.7 million, in the three months ended July 1, 2018 due primarily to newsprint and ink expenses from the acquisitions mentioned above. The $4.8 million increase from acquisitions were partially offset by a 33.3% decrease in consumption, partially offset by a 23.3% increase in the average cost per ton of newsprint.

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Outside Services Expense—Outside services expense increased1.6%, or 1.3 million, in the three months ended July 1, 2018 due primarily to outside services expense from the acquisitions mentioned above. The $9.7 million increase from acquisitions was partially offset by a decreases in production and distribution expenses of $3.7 million and a decrease in expense of $2.5 million related to the Consulting Agreement described in Note 4 to the Consolidated Financial Statements.

Other Operating Expenses—Other expenses decreased6.4%, or $2.5 million, in the three months ended July 1, 2018 due primarily to a $8.1 million decrease in affiliate fees related to the conversion of the Cars.com agreement, a $3.1 million decrease in general operating expenses and a $2.2 million decrease in occupancy expense partially offset by a $10.8 million increase due to the acquisitions mentioned above.

Depreciation and Amortization Expense—Depreciation and amortization expense was consistent with the prior year.

Interest Expense, Net—Interest expense decreased slightly as the Senior Term Facility was repaid in full in June 2018. See Note 9 to the Consolidated Financial Statements for more information on the debt repayment.

Loss on Equity Investments, Net—Loss on equity investments, net was consistent with the prior year.

Other Income, Net—The increase in other income, net is due to increased credits related to periodic benefit costs. See Note 11 to the Consolidated Financial Statements for additional information on the Company’s pension and other postretirement benefits.

Income Tax Expense (Benefit)—Income tax expense (benefit) decreased$4.2 million for the three months ended July 1, 2018 over the prior year period. The effective tax rate on pretax income was (33.1%) in the three months ended July 1, 2018. This rate differs from the U.S. federal statutory rate of 21% primarily due to state income taxes, net of federal benefit and non-deductible expenses. For the three months ended July 1, 2018, the Company recorded an income tax expense of $3.8 million.

For the three months ended June 25, 2017, the Company recorded income tax benefit of $0.4 million. The effective tax rate on pretax income was 17.2% in the three months ended June 25, 2017. This rate differs from the U.S. federal statutory rate of 35% primarily due to state income taxes, net of federal benefit and non-deductible expenses.

Six Months Ended July 1, 2018 compared to the Six Months Ended June 25, 2017

Operating Revenues—Operating revenues increased1.7%, or $8.2 million, in the six months ended July 1, 2018 compared to the same period for 2017. The increase was due primarily to the combined impact of the acquisitions of the New York Daily News in the third quarter 2017, BestReviews in the first quarter of 2018, and The Virginian-Pilot in the second quarter of 2018. Such acquisitions contributed $71.9 million in revenue during the six months ended July 1, 2018. The increase was partially offset by decreases in advertising and other revenue. The decrease in advertising revenue also reflects the conversion of the Cars.com agreement.

Compensation Expense—Compensation expense increased15.0%, or $28.3 million, in the six months ended July 1, 2018 due primarily to compensation expenses from the acquisitions mentioned above. In addition to the $37.5 million increase from acquisitions, severance expense increased $3.5 million and incentives expense increased $2.3 million. These increases were partially offset by a decrease in salary expense of $11.9 million as a result of the reduction in headcount due to personnel restructuring in prior periods.

Newsprint and Ink Expense—Newsprint and ink expense increased10.4%, or $2.9 million, in the six months ended July 1, 2018 due primarily to newsprint and ink expenses from the acquisitions mentioned above. The $7.8 million increase from acquisitions were partially offset by a 31.1% decrease in consumption, partially offset by a 13.8% increase in the average cost per ton of newsprint.

Outside Services Expense—Outside services expense increased12.3%, or $19.8 million, in the six months ended July 1, 2018 due primarily to outside services expense of $14.8 million related to the acquisitions mention above and expense related to the Consulting Agreement described in Note 4 to the Consolidated Financial Statements, partially offset by a decrease in circulation and distribution expenses of $6.9 million.

Other Operating Expenses—Other expenses decreased9.6%, or $7.4 million, in the six months ended July 1, 2018 due primarily to a $16.4 million decrease in affiliate fees related to the conversion of the Cars.com agreement, $8.0 decrease in

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general operating expenses and a $2.8 million decrease in occupancy expense partially offset by a $20.4 million increase due to the acquisitions mentioned above.

Depreciation and Amortization Expense—Depreciation and amortization increased $2.3 million in the six months ended July 1, 2018, due primarily to expense from the acquisitions mentioned above.

Interest Expense, Net—Interest expense decreased slightly as the Senior Term Facility was repaid in full in June 2018. See Note 9 to the Consolidated Financial Statements for more information on the debt repayment.

Premium on Stock Buyback—On March 23, 2017, the Company purchased 3,745,947 shares of the Company’s stock for $56.2 million, or $15 per common share. The fair value of the stock as of the purchase date was $50.2 million, or $13.39 per common share. The$6.0 milliondifference between the purchase price and the transaction date fair value was recorded as a premium on the stock buyback, a non-operating expense. See Note 14 to the Consolidated Financial Statements for additional information.

Loss on Equity Investments, Net—Loss on equity investments, net was consistent with the prior year.

Other Income, Net - The increase in other income, net is due to increased credits related to periodic benefit costs. See Note 11 to the Consolidated Financial Statements for additional information on the Company’s pension and other postretirement benefits.

Income Tax Expense (Benefit)—Income tax expense (benefit) decreased $0.6 million for the six months ended July 1, 2018 over the prior year period. The effective tax rate on pretax income was 6.3% in the six months ended July 1, 2018. This rate differs from the U.S. federal statutory rate of 21% primarily due to state income taxes, net of federal benefit and non-deductible expenses. For the six months ended July 1, 2018, the Company recorded an income tax benefit of $7.2 million.

For the six months ended June 25, 2017, the Company recorded income tax expense of $2.3 million. The effective tax rate on pretax income was 15.1% in the six months ended June 25, 2017. This rate differs from the U.S. federal statutory rate of 35% primarily because the $6.0 million premium on stock buyback is a nondeductible permanent difference for the calculation of income taxes. The rate also differs due to state income taxes, net of federal benefit and nondeductible expenses and the domestic production activities deduction.

Segments

The Company manages its business as two distinct segments, troncM and troncX. troncM is comprised of the Company’s media groups excluding their digital revenues and related digital expenses, except digital subscription revenues when bundled with a print subscription. troncX includes the Company’s digital revenues and related digital expenses from local tronc websites, third party websites, mobile applications, digital only subscriptions, TCA, and BestReviews.

The Company measures segment profit using income from operations, which is defined as net income before net interest expense, gain on investment transactions, reorganization items and income taxes.

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The tables below show the segmentation of income and expenses from continuing operations for the three and six months endedJuly 1, 2018 as compared to the three and six months endedJune 25, 2017 (in thousands). Each three-month period consists of 13 weeks.

	Three Months Ended
	troncM				troncX				Corporate and Eliminations						Consolidated
	July 1, 2018		June 25, 2017		July 1, 2018		June 25, 2017		July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Total revenues	$	212,297	$	204,878	$	40,141	$	39,480	$	599		$	(923	)	$	253,037		$	243,435
Operating expenses	204,410		191,803		36,691		36,403		13,181			10,767			254,282			238,973
Income (loss) from operations	7,887		13,075		3,450		3,077		(12,582		)	(11,690		)	(1,245		)	4,462
Depreciation and amortization	3,990		5,281		4,505		3,512		4,447			4,194			12,942			12,987
Adjustments (1)	3,865		5,422		3,312		785		3,344			3,935			10,521			10,142
Adjusted EBITDA	$	15,742	$	23,778	$	11,267	$	7,374	$	(4,791	)	$	(3,561	)	$	22,218		$	27,591

(1) See Non-GAAP Measures for additional information on adjustments.

	Six months ended
	troncM				troncX				Corporate and Eliminations						Consolidated
	July 1, 2018		June 25, 2017		July 1, 2018		June 25, 2017		July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Total revenues	$	416,508	$	408,801	$	75,285	$	76,407	$	(217	)	$	(1,798	)	$	491,576		$	483,410
Operating expenses	408,821		383,618		72,453		73,755		43,308			21,284			524,582			478,657
Income (loss) from operations	7,687		25,183		2,832		2,652		(43,525		)	(23,082		)	(33,006		)	4,753
Depreciation and amortization	7,962		8,565		9,054		6,689		8,943			8,428			25,959			23,682
Adjustments (1)	8,744		6,373		5,262		1,934		23,687			7,749			37,693			16,056
Adjusted EBITDA	$	24,393	$	40,121	$	17,148	$	11,275	$	(10,895	)	$	(6,905	)	$	30,646		$	44,491

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troncM

	Three Months Ended						Six Months Ended
(in thousands)	July 1, 2018		June 25, 2017		% Change		July 1, 2018		June 25, 2017		% Change
Operating revenues:
Advertising	$	87,800	$	93,285	(5.9	%)	$	170,542	$	184,084	(7.4	%)
Circulation	88,616		73,978		19.8	%	173,242		149,011		16.3	%
Other	35,881		37,615		(4.6	%)	72,724		75,706		(3.9	%)
Total revenues	212,297		204,878		3.6	%	416,508		408,801		1.9	%
Operating expenses	204,410		191,803		6.6	%	408,821		383,618		6.6	%
Income from operations	7,887		13,075		(39.7	%)	7,687		25,183		(69.5	%)
Depreciation and amortization	3,990		5,281		(24.4	%)	7,962		8,565		(7.0	%)
Adjustments (1)	3,865		5,422		(28.7	%)	8,744		6,373		37.2	%
Adjusted EBITDA	$	15,742	$	23,778	(33.8	%)	$	24,393	$	40,121	(39.2	%)

(1) See Non-GAAP Measures for additional information on adjustments.

Three Months Ended July 1, 2018 compared to the Three Months Ended June 25, 2017

Advertising Revenues—Total advertising revenues decreased 5.9%, or $5.5 million, in the three months ended July 1, 2018. Retail advertising decreased $13.5 million, year over year, primarily due to decreases in food and drug stores, department store, specialty merchandise, furniture and general merchandise categories. National advertising decreased $2.2 million, year over year, primarily due to decreases in advertising agency, wireless and media categories. Classified advertising revenues decreased $1.2 million due to decreases in all categories. These decreases were partially offset by $11.3 million of advertising revenue from the the acquisitions of the New York Daily News in the third quarter 2017, and The Virginian-Pilot in the second quarter of 2018.

Circulation Revenues—Circulationrevenues increased 19.8%, or $14.6 million, in the three months ended July 1, 2018, due primarily to $16.0 million from the acquisitions mentioned above, plus an increase in rates partially offset by a decrease in volume.

Other Revenues—Other revenues decreased 4.6%, or $1.7 million, in the three months ended July 1, 2018, due primarily to declines of $3.2 million in revenues from commercial print and delivery, $1.9 million in revenues from content syndication and other and $1.2 million in revenues from direct mail. These decreases were partially offset by $4.6 million from the acquisitions mentioned above.

Operating Expenses—Operating expenses increased 6.6%, or $12.6 million, in the three months ended July 1, 2018, due primarily to $38.3 million of operating expenses from the acquisitions mentioned above. This increase was partially offset by decreases in almost all expense categories.

Six Months Ended July 1, 2018 compared to the Six Months Ended June 25, 2017

Advertising Revenues—Total advertising revenues decreased 7.4%, or $13.5 million, in the six months ended July 1, 2018 compared to the six months ended June 25, 2017. Retail advertising decreased $25.2 million due to decreases in food and drug stores, furniture, department store, specialty merchandise and general merchandise categories. National advertising decreased $4.4 million, year over year, primarily due to decreases in advertising agency, wireless and media categories. Classified advertising revenues decreased $2.2 million due to decreases in all categories. These decreases were partially offset by $18.3 million of advertising revenue from the acquisitions mentioned above.

Circulation Revenues—Circulationrevenues increased 16.3%, or $24.2 million, in the six months ended July 1, 2018, due primarily to $26.4 million from the acquisitions mentioned above. This increase was partially offset by a decrease in volume.

Other Revenues—Other revenues decreased $3.0 million, or 3.9%, in the six months ended July 1, 2018, due primarily to declines of $6.6 million in revenues from commercial print and delivery, $2.8 million in revenues from content syndication

41

and other, and $2.2 million in revenues from direct mail. These decreases were partially offset by $8.6 million from the acquisitions mentioned above.

Operating Expenses—Operating expenses increased 6.6%, or $25.2 million, in the six months ended July 1, 2018, due primarily to $68.3 million of operating expenses from the acquisitions mentioned above, partially offset by decreases in almost all expense categories.

troncX

	Three Months Ended						Six Months Ended
(in thousands)	July 1, 2018		June 25, 2017		% Change		July 1, 2018		June 25, 2017		% Change
Operating revenues:
Advertising	$	23,987	$	31,577	(24.0	%)	$	46,037	$	60,493	(23.9	%)
Content	16,154		7,903		*		29,248		15,914		83.8	%
Total revenues	40,141		39,480		1.7	%	75,285		76,407		(1.5	%)
Operating expenses	36,691		36,403		0.8	%	72,453		73,755		(1.8	%)
Income from operations	3,450		3,077		12.1	%	2,832		2,652		6.8	%
Depreciation and amortization	4,505		3,512		28.3	%	9,054		6,689		35.4	%
Adjustments (1)	3,312		785		*		5,262		1,934		*
Adjusted EBITDA	$	11,267	$	7,374	52.8	%	$	17,148	$	11,275	52.1	%

* Represents positive or negative change in excess of 100%

(1) See Non-GAAP Measures for additional information on adjustments.

Three Months Ended July 1, 2018 compared to the Three Months Ended June 25, 2017

Advertising Revenues—Total advertising revenues decreased24.0%, or $7.6 million, in the three months ended July 1, 2018. Classified advertising revenue decreased $11.3 million, primarily due to a decrease in the automotive category as a result of the conversion of the Cars.com agreement. This decrease was partially offset by the combined impact of the acquisitions of the New York Daily News in the third quarter 2017, BestReviews in the first quarter of 2018, and The Virginian-Pilot in the second quarter of 2018. Such acquisitions contributed $4.8 million in revenue during the three months ended July 1, 2018. Additionally, retail advertising revenue increased $1.6 million, primarily due to increases in the car dealerships and lots category, partially offset by decreases in the hardware stores and amusements categories. National advertising revenue remained consistent with prior year.

Content Revenues—Content revenues increased104.4%, or $8.3 million, in the three months ended July 1, 2018, due primarily to $6.1 million from the acquisitions mentioned above and an increase of $1.7 million in digital subscription revenue.

Operating Expenses—Operating expenses for the three months ended July 1, 2018, remained consistent with the prior year period. The increases related to the acquisitions mentioned above of $8.1 million were generally offset by decreases across most expense categories excluding incremental expenses from the acquired entities.

Six Months Ended July 1, 2018 compared to the Six Months Ended June 25, 2017

Advertising Revenues—Total advertising revenues decreased23.9%, or $14.5 million, in the six months ended July 1, 2018. Classified advertising revenue decreased $24.6 million, primarily due to a decrease in the automotive category as a result of the conversion of the Cars.com agreement. This decrease was partially offset by $18.3 million of advertising revenue from the acquisitions mentioned above and a $2.8 million increase in retail advertising revenue primarily due to increases in the car dealerships and lots category, partially offset by decreases in the hardware stores, amusements and food and drug store categories. National advertising revenue remained consistent with prior year.

Content Revenues—Content revenues increased 83.8%, or $13.3 million, in the six months ended July 1, 2018, due primarily to $9.8 million from the acquisitions mentioned above and an increase of $3.1 million in digital subscription revenue.

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Operating Expenses—Operating expenses decreased1.8%, or $1.3 million, in the three months ended July 1, 2018, due to decreases across most expense categories excluding incremental expenses from the acquired entities. These decreases were partially offset by $14.2 million in operating expenses from the acquisitions mentioned above.

Non-GAAP Measures

Adjusted EBITDA—The Company defines Adjusted EBITDA as net income (loss) from continuing operations before equity in earnings of unconsolidated affiliates, income taxes, loss on early debt extinguishment, interest expense, other (expense) income, realized gain (loss) on investments, reorganization items, depreciation and amortization, net income attributable to noncontrolling interest, and other items that the Company does not consider in the evaluation of ongoing operating performance. These items include stock-based compensation expense, restructuring charges, transaction expenses, certain other charges and gains that the Company does not believe reflects the underlying business performance.

	Three Months Ended								Six Months Ended
(in thousands)	July 1, 2018			June 25, 2017			% Change		July 1, 2018			June 25, 2017			% Change
Net loss from continuing operations	$	(15,101	)	$	(1,940	)	*		$	(43,813	)	$	(12,852	)	*
Income tax expense (benefit) from continuing operations	3,753			(402		)	*		(2,926		)	(2,280		)	28.3	%
Interest expense, net	5,412			6,365			(15.0	%)	11,976			12,800			(6.4	%)
Loss on early extinguishment of debt	7,666			—			*		7,666			—			*
Premium on stock buyback	—			—			*		—			6,031			*
Loss on equity investments, net	665			723			(8.0	%)	1,394			1,621			(14.0	%)
Other income, net (1)	(3,640		)	(284		)	*		(7,303		)	(567		)	*
Income (loss) from continuing operations	(1,245		)	4,462			*		(33,006		)	4,753			*
Depreciation and amortization	12,942			12,987			(0.3	%)	25,959			23,682			9.6	%
Restructuring and transaction costs (2)	7,578			7,609			(0.4	%)	33,163			11,606			*
Stock-based compensation	2,943			2,401			22.6	%	4,530			4,069			11.3	%
Employee voluntary separation program	—			132			*		—			381			*
Adjusted EBITDA from continuing operations	$	22,218		$	27,591		(19.5	%)	$	30,646		$	44,491		(31.1	%)

* Represents positive or negative change in excess of 100%

(1) - Effective January 1, 2018, the Company adopted ASU 2017-07, which requires certain components of net benefit costs to be presented outside of income from operations. The standard required retrospective application. Accordingly, amounts presented in the prior period have been adjusted to conform with the standard.

(2) - Restructuring and transaction costs include costs related to tronc's internal restructuring, such as severance, charges associated with vacated space, costs related to completed and potential acquisitions and a one-time charge related to the Consulting Agreement.

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”). Management believes that because Adjusted EBITDA excludes (i) certain non-cash expenses (such as depreciation, amortization, stock-based compensation, and gain/loss on equity investments) and (ii) expenses that are not reflective of the Company’s core operating results over time (such as restructuring costs, including the employee voluntary separation program and gain/losses on employee benefit plan terminations, litigation or dispute settlement charges or gains, premiums on stock buyback and transaction-related costs), this measure provides investors with additional useful information to measure the Company’s financial performance, particularly with respect to changes in performance from period to period.  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.In addition, Adjusted EBITDA, or a similarly calculated measure, has been 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

43

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

The Company believes that its working capital and future cash from operations discussed below will provide adequate resources to fund its operating and financing needs for the foreseeable future. The Company’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 the Company 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 2018 and other operating requirements through a combination of cash flows from operations and investments. 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, 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 from continuing operations for the six months ended July 1, 2018 and June 25, 2017 (in thousands):

	Six months ended
	July 1, 2018			June 25, 2017
Net cash provided by operating activities	$	41,179		$	6,716
Net cash used for investing activities	(100,758		)	(10,721		)
Net cash used for financing activities	(354,145		)	(67,680		)
Decrease in cash attributable to continuing operations	$	(413,724	)	$	(71,685	)

Cash flow generated from operating activities is tronc’s primary source of liquidity. Net cash provided by operating activities from continuing operations was $41.2 million for the six months ended July 1, 2018, up $34.5 million from $6.7 million for the six months ended June 25, 2017. The increase was primarily driven by favorable fluctuations in working capital partially offset by lower operating results and a $7.5 million payment due under the Consulting Agreement.

Net cash used for investing activities from continuing operations totaled $100.8 million in the six months ended July 1, 2018, primarily due to $68.0 million used for acquisitions and $30.4 million used for capital expenditures. In the six months ended June 25, 2017, net cash used in investing activities totaled $10.7 millionprimarily due to$9.2 million for capital expenditures.

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Net cash used for financing activities totaled $354.1 million in the six months ended July 1, 2018 primarily due to $353.3 million used for loan payments on senior debt. In the six months ended June 25, 2017, net cash used for financing activities totaled $67.7 million which included $56.2 million used to repurchase shares of the Company’s common stock and $10.5 million in loan payments on senior debt.

Net cash provided by discontinued operations totaled $485.5 million in the six months ended July 1, 2018, primarily due to net proceeds of $497.7 million from the sale of the California Properties and forsalebyowner.com. In the six months ended June 25, 2017, net cash provided by discontinued operations totaled $47.5 million primarily due to cash provided by operating activities of the Los Angeles Times and The San Diego Union-Tribune.

Acquisitions and Dispositions

On February 7, 2018, the Company entered into a Membership Interest Purchase Agreement (“MIPA”) by and between the Company and Nant Capital, LLC (“Nant Capital”) pursuant to which the Company would sell the California Properties to Nant Capital for an aggregate purchase price of $500 million in cash, plus the assumption of unfunded pension liabilities related to the San Diego Pension Plan, subject to a customary post-closing working capital adjustment (the "Nant Transaction"). The Nant Transaction closed on June 18, 2018.

On May 28, 2018, Tribune Publishing Company, LLC, a wholly-owned subsidiary of the Company, acquired Virginian-Pilot Media Companies, LLC (“Virginian-Pilot”), the owner of The Virginian-Pilot daily newspaper based in Norfolk, Virginia, pursuant to a Securities Purchase Agreement, entered into on the same date (the “Purchase Agreement”), by and among Purchaser, Virginian-Pilot and Landmark Media Enterprises, LLC (“Seller”) for a total purchase price of $34.0 million in cash, subject to a post-closing working capital adjustment.

On May 23, 2018, the Company sold substantially all of the assets of forsalebyowner.com in an asset sale for $2.5 million, plus an advertising sales commitment of $4.5 million over a term of 2 years.

On February 6, 2018, the Company acquired a 60% membership interest in BestReviews. The total purchase price of $68.3 million consisted of $33.7 million in cash, subject to a post-closing working capital adjustment, and $34.6 million in common stock of the Company. The Company issued 1,913,438 shares of common stock in connection with the closing.

See Notes 5 and 6 to the Consolidated Financial Statements for additional information about the acquisitions and dispositions.

Employee Reductions

During the second quarter of 2017, the Company contracted with a third party to outsource the printing, packaging and delivery of the Orlando Sentinel. The change in operations resulted in staff reductions of 112 positions and a pretax charge related to those reductions of $2.3 million.

The Company implemented reductions of 106 and 287 positions during the three and six months endedJuly 1, 2018, respectively, and recorded pretax charges related to these reductions of $5.0 million and $10.7 million, respectively. In addition to the staff reductions related to the outsourcing of the printing, packaging and delivery of the Orlando Sentinel discussed above, the Company implemented reductions of 41 and 92 positions during the three and six months endedJune 25, 2017, respectively, and recorded pretax charges related to these reductions of $0.9 million and $3.0 million during the three and six months endedJune 25, 2017, respectively.

Subsequent to July 1, 2018, the Company implemented reductions of 178 positions of which approximately 50% were at the New York Daily News. The Company is expected to take a total pre-tax charge of between $5.2 million and $5.4 million in the third quarter of 2018 related to such reduction. The related salary continuation payments will start in the third quarter of 2018 and continue until the second quarter of 2019.

Debt

During the quarter ended July 1, 2018, the Company used a portion of the proceeds received from the Nant Transaction to repay the Senior Term Facility and terminated the Senior ABL Facility. On June 21, 2018, the Company repaid the outstanding principal balance of $348.0 million under the Senior Term Facility and terminated the agreement. As a

45

result of the early extinguishment of debt, the Company incurred a $7.7 million loss related to expensing the remaining balance of original issue discount and initiation fees. Additionally, on June 21, 2018, the Company terminated the Senior ABL Facility. As a result of the Senior ABL Facility termination, the Company established $42.6 million of restricted cash for outstanding letters of credit previously secured by the Senior ABL Facility. See Note 9 to the Consolidated Financial Statements for more information related to the repayment and termination.

New Accounting Standards

See Note 1 in the Consolidated Financial Statements for a description of new accounting standards issued and/or adopted in the six months ended July 1, 2018.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of July 1, 2018, 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 16, 2018.

Item 4. 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 Chief Executive Officer and the 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 of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.

Except as discussed below, there has been no change in our internal control over financial reporting that occurred during the quarter ended July 1, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

As discussed above, the Company acquired a 60% membership interest in BestReviews on February 6, 2018 and a 100% interest in Virginian-Pilot on May 28, 2018. The Company is currently in the process of integrating BestReviews and Virginian-Pilot 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 BestReviews and Virginian-Pilot operations. The Company expects that this process will be completed in fiscal year 2018 and the Company expects to include BestReviews and Virginian-Pilot in its final assessment of internal control over financial reporting as of December 30, 2018.

PART II.

Item 1. Legal Proceedings

We are subject to various legal proceedings and claims that have arisen in the ordinary course of business. The legal entities comprising our operations are defendants from time to time in actions for matters arising out of their business operations. In addition, the legal entities comprising our operations are involved from time to time as parties in various regulatory, environmental and other proceedings with governmental authorities and administrative agencies.

Tribune Company Bankruptcy

On December 31, 2012, Tribune Media Company, formerly Tribune Company (“TCO”), and 110 of its direct and indirect wholly-owned subsidiaries that had filed voluntary petitions for relief under Chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware on December 8, 2008 (or on October 12, 2009, in the case of Tribune CNLBC, LLC) emerged from Chapter 11. Certain of the legal entities included in the Consolidated Financial Statements of tronc were Debtors or, as a result of the restructuring transactions undertaken at the time of the Debtors’ emergence, are successor legal entities to legal entities that were Debtors (“tronc Debtors”).

Notices of appeal of the Bankruptcy Court’s order confirming the Plan (the “Confirmation Order”) were filed by (i) Aurelius Capital Management L.P. on behalf of its managed entities that were holders of TCO’s senior notes and

46

Exchangeable Subordinated Debentures due 2029 (“PHONES”), (ii) Law Debenture Trust Company of New York (“Law Debentures”) and Deutsche Bank Trust Company Americas (“Deutsche Bank”), each successor trustees under the respective indentures for TCO’s senior notes; (iii) Wilmington Trust Company, as successor indenture trustee for the PHONES, and (iv) EGI-TRB, L.L.C., a Delaware limited liability company wholly-owned by Sam Investment Trust (a trust established for the benefit of Samuel Zell and his family) (the “Zell Entity”). The appellants sought, among other relief, to overturn the Confirmation Order and certain prior orders of the Bankruptcy Court embodied in the Plan, including the settlement of certain claims and causes of action related to a series of transactions consummated by TCO, the TCO employee stock ownership plan, the Zell Entity and Samuel Zell in 2007. Each of the Confirmation Order appeals have been dismissed or otherwise resolved by a final order, with the exception of the appeals of Delaware Trust and Deutsche Bank, which remain pending before the U. S. District Court for the District of Delaware. There is no stay of the Confirmation Order in place pending resolution of the confirmation related appeals.

The Bankruptcy Court has entered final decrees collectively closing 106 of the Debtors’ Chapter 11 cases, including the last one of the tronc Debtors’ cases. The remaining Chapter 11 cases relate to Debtors and successor legal entities that are subsidiaries of TCO. These cases have not yet been closed by the Bankruptcy Court, and certain claims asserted against various of the Debtors (including certain of the tronc Debtors) in the Chapter 11 cases remain unresolved. The remaining Chapter 11 cases continue to be administered under the caption “In re: Tribune Media Company, et al.,” Case No 08-13141.

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 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 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 16, 2018. There have been no material changes to our risk factors as disclosed in such filings.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Our Proxy Statement filed with the SEC on April 6, 2018 listed an address to be used for communications sent after June 15, 2018 to our company, including communications to our Board of Directors, Corporate Secretary, and Chairs of our Board committees. On June 18, 2018, we moved our headquarters to 160 N. Stetson Avenue, Chicago, Illinois 60601. Future communications should be sent to this address rather than the 130 East Randolph Street address noted in the Proxy Statement.

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.

47

ExhibitDescription

Number

2.1* Partnership Interest Purchase Agreement, dated September 3, 2017, by and among Daily News, L.P., TRX Pubco, LLC, Tribune Publishing Company, LLC, Mortimer B. Zuckerman, New DN Company, The Mortimer B. Zuckerman 1983 Family Trust, New DN Company (as the Sellers’ Representative) and the Management Trust defined in the Purchase Agreement (incorporated by reference to Exhibit 2.1 to the Form 8-K filed on September 5, 2017).

2.2* Acquisition Agreement, dated February 6, 2018, by and among Best Reviews, Inc., Best Reviews LLC, Tribune Publishing Company, LLC, and tronc, Inc., and Denis Grosz (as the Sellers’ Representative), and the Stockholders defined in the Purchase Agreement (incorporated by reference to Exhibit 2.1 to the Form 8-K filed on February 7, 2018).

2.3* Membership Interest Purchase Agreement, dated February 7, 2018, by and among Nant Capital, LLC, and tronc, Inc. (incorporated by reference to Exhibit 2.1 to the Form 8-K filed on February 7, 2018).

2.4* Asset Purchase Agreement dated March 13, 2018, by and among forsalebyowner.com, LLC; the Buyer thereunder; and for certain sections, In-House Realty LLC and Tribune Publishing Company, LLC (incorporated by reference to Exhibit 2.1 to the Form 8-K filed on May 23, 2018).

2.5* Securities Purchase Agreement, dated May 28, 2018, by and among Tribune Publishing Company, LLC, Virginian-Pilot Media Companies, LLC and Landmark Media Enterprises, LLC (incorporated by reference to Exhibit 2.1 to the Form 8-K filed on May 29, 2018).

3.1* Amended and Restated Certificate of Incorporation of tronc, Inc., as amended (incorporated by reference to Exhibit 3.1 of the Registration Statement on Form 8-A filed on June 17, 2016)

3.2* Amended and Restated By-laws of tronc, Inc. (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form 8-A filed on June 17, 2016).

10.1 Amendment No. 1 to Consulting Agreement, dated June 17, 2018, by and among Tribune Publishing Company, LLC, Merrick Ventures LLC and, solely for certain sections thereof, Michael W. Ferro, Jr., Merrick Media, LLC and tronc, Inc.

10.2~ Form of Director Restricted Stock Award Agreement for awards beginning May 2018.

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

48

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.

		TRONC, INC.
August 10, 2018	By:	/s/ Terry Jimenez
		Terry Jimenez
		Executive Vice President and Chief Financial Officer
August 10, 2018	By:	/s/ Michael N. Lavey
		Michael N. Lavey
		Chief Accounting Officer and Controller

49

EX-10.1

AMENDMENT NO. 1 TO

CONSULTING AGREEMENT

THIS AMENDMENT NO. 1 TO CONSULTING AGREEMENT (this “Amendment”), dated as of June 17, 2018, is entered into by and among Tribune Publishing Company, LLC, a Delaware limited liability company (the “Company”), and Merrick Ventures LLC, a Delaware limited liability company (the “Advisor”), and solely for purposes of Sections 1, 2 and 4-6, Michael W. Ferro, Jr. (“Ferro”), Merrick Media, LLC, a Delaware limited liability company (“Merrick Media”), and tronc, Inc., a Delaware corporation (the “tronc”).

RECITALS

WHEREAS, on December 20, 2017, the Company, and, solely for certain sections thereof, tronc, entered into a Consulting Agreement (the “Consulting Agreement”) with the Advisor and, solely for certain sections thereof, Ferro and Merrick Media; and

WHEREAS, each of the parties hereto desires to enter into this Amendment to (i) terminate the Company’s ongoing engagement of the Advisor as a consultant, (ii) grant the Company the right to engage the Advisor as a consultant from time to time in its sole and absolute discretion without further compensation, (iii) continue the non-competition obligations of the Advisor and Ferro and (iv) terminate certain terms of the Consulting Agreement, all as set forth in this Amendment.

NOW, THEREFORE, in consideration of the foregoing, and of the agreements contained herein, the parties hereto hereby agree as follows:

Section 1.Amendments. The following amendments to the Consulting Agreement shall be effective as of 11:59 p.m. Central Time on June 17, 2018 (the “Effective Time”):

(a) Section 1 (Engagement) is amended and restated in its entirety to read as follows:

1. Engagement. The Company hereby may from time to time in its sole and absolute discretion engage the Advisor as an independent consultant on a non-exclusive basis to provide management expertise and technical services and the Advisor hereby accepts any such engagement without any further compensation. If so engaged, the Advisor shall provide services that include but are not limited to investment relations, strategic planning, capital planning, growth initiatives, management development, customer and vendor relationships, other operational matters and various business relationship introductions. If so engaged, the Company acknowledges and agrees that it has an obligation to ensure that its resources will be available to provide assistance to the Advisor with respect to the services provided hereunder. Any services provided hereunder are provided on a non-exclusive basis and shall be undertaken by the Advisor at the direction of the Chief Executive Officer of the Company. The Company will indemnify the Advisor if the Company requests the Advisor to meet with any third parties.

(b) Section 17 is amended by replacing “the” with “any” in the first sentence so that is reads as follows:

The Company acknowledges and agrees that in performing any services requested pursuant to this Agreement the Advisor will be highly dependent on information provided by the Company.

(c) Section 18 is amended by inserting “, if engaged by the Company pursuant to this Agreement,” in the second sentence so that it reads as follows:

Advisor, if engaged by the Company pursuant to this Agreement, shall be an independent contractor and shall have no authority to hold itself out as an agent of the Company.

Section 2.Terminations. The following terms of the Consulting Agreement are hereby deleted in their entirety from the Consulting Agreement, with no further force or effect as of the Effective Time:

(a) the second and third sentences of Section 2.1;

(b) Section 3.1; and

(c) the first sentence of Section 8.

Section 3.Payment. Within one business day of the Effective Time or as soon as reasonably practicable thereafter the Company shall pay the Advisor $7,500,000 in a wire transfer of immediately available funds, and the Advisor hereby agrees that such payment represents payment in full of all outstanding compensatory fees owed by the Company to the Advisor under section 3.1 of, and that no further payments are due under, the Consulting Agreement, including with respect to any further engagement of the Advisor by the Company pursuant to the terms thereof.

Section 4.Notices.

(a) The address for notices to the Company and tronc set forth in the Consulting Agreement is amended as follows:

Chief Executive Officer

tronc, Inc.

160 N. Stetson Avenue

Chicago, IL 60601

(b) The address for notices to the Advisor, Ferro and Merrick Media set forth in the Consulting Agreement is as follows:

Chairman

Merrick Ventures LLC

875 N. Michigan Avenue, Suite 3230

Chicago, IL 60611

Section 5.Miscellaneous. Except as expressly set forth in this Amendment, all terms of the Consulting Agreement shall remain in full force and effect through December 31, 2020, and all terms of the Consulting Agreement, as amended hereby, shall apply to this Amendment as if this Amendment was part of the Consulting Agreement.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the day and year first above written.

COMPANY:

TRIBUNE PUBLISHING COMPANY, LLC

By: /s/ Justin C. Dearborn

Name:Justin C. Dearborn        

Title:Chief Executive Officer

ADVISOR:

MERRICK VENTURES, LLC

By: /s/ Michael W. Ferro, Jr.

Name:   Michael W. Ferro, Jr.        

Title:     Chairman and CEO

SOLELY FOR PURPOSES OF SECTIONS 1, 2 and 4-6:

FERRO:

/s/ Michael W. Ferro, Jr.

Michael W. Ferro, Jr.        

SOLELY FOR PURPOSES OF SECTIONS 1, 2 and 4-6:

MERRICK MEDIA, LLC

By: /s/ Michael W. Ferro, Jr.

Name:  Michael W. Ferro, Jr.        

Title:Manager

SOLELY FOR PURPOSES OF SECTIONS 1, 2 and 4-6:

TRONC, INC.

By: /s/ Justin C. Dearborn

Name: Justin C. Dearborn            

Title: Chief Executive Officer

EX-10.2

Exhibit 10.1

TRONC, INC.

2014 OMNIBUS INCENTIVE PLAN, AS AMENDED

RESTRICTED STOCK AWARD AGREEMENT

THIS RESTRICTED STOCK AWARD AGREEMENT (the “Agreement”) is made by and between tronc, Inc., a Delaware corporation (the “Company”), and the director whose name is set forth below (the “Participant”), and is dated as of May 18, 2018 (the “Date of Grant”). Pursuant to this Agreement, the Company hereby grants to the Participant a Restricted Stock Award (“Award”) with respect to shares of Common Stock (“Common Stock”) of the Company. The Award is subject to all of the terms and conditions set forth in this Agreement as well as all of the terms and conditions of the tronc, Inc. 2014 Omnibus Incentive Plan (as amended from time to time in accordance with the terms thereof, the “Plan”). Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Plan.

Participant:	_____________
Number of Shares of Common Stock Subject to the Award (“Restricted Stock”):	________

1.Vesting Schedule; Restricted Period. The Restricted Period of the Restricted Stock shall begin on the Date of Grant and end on May 18, 2019 (“Vesting Date”) provided that the Participant continues to provide service to or be employed by the Company through the earlier of (a) the first anniversary of the Date of Grant and (b) the day immediately prior to the first annual meeting of stockholders of the Company after the Date of Grant. Notwithstanding the foregoing, the following applies:

(a)In connection with a Change of Control, unless the Board determines that an Alternative Award (as defined in the Plan) will be provided that provides the Participant with rights and entitlements substantially equivalent to or better than the rights, terms and conditions applicable under this Award, including, but not limited to, an identical or better schedule and terms as to vesting and that satisfies the other requirements of Section 15(a) of the Plan, the vesting of Restricted Stock shall be immediately accelerated and all unvested Restricted Stock shall become vested in full in accordance with Section 15 of the Plan.

(b)The vesting of Restricted Stock shall be immediately accelerated and all unvested Restricted Stock shall become vested in full, upon the Participant’s death or Disability.

(c)Any unvested Restricted Stock upon a Participant’s separation from all service to the Company prior to the earlier of (a) the first anniversary of the Date of Grant and (b) the day immediately prior to the first annual meeting of stockholders of the Company after the Date of Grant for any reason other than death or Disability shall be forfeited upon such separation.

2.Non-Transferability. No unvested Restricted Stock may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to the Company as a result of forfeiture of the Restricted Stock as provided herein, unless and until the Restricted Stock vests in accordance with the provisions hereof. Any purported transfer in violation of the preceding sentence shall be void.

3.Voting: Dividends and Other Distributions. The Participant shall have full voting rights with respect to the Restricted Stock granted hereunder until and unless such Restricted Stock is forfeited. The Participant shall be entitled to receive all dividends and other distributions, if any, paid with respect to the Restricted Stock, provided that any such dividends or other distributions will be subject to the same vesting requirements as the underlying Restricted Stock and shall be paid at the time the underlying Restricted Stock becomes vested pursuant to Section 1 hereof. The dividends credited hereunder shall accumulate, without interest, and be paid in cash at the time the corresponding Restricted Stock vests, or shall be forfeited at the time the corresponding Restricted Stock is forfeited. If any dividends or distributions are paid in Common Stock, the Common Stock shall be deposited with the Company and shall be subject to the same restrictions on transferability and forfeitability as the Restricted Stock with respect to which they are paid.

4.Section 83(b) Election for Restricted Stock. The Participant understands that the Participant may elect under Section 83(b) of the Code to be taxed at the time the Restricted Stock is acquired, rather than when and as the Restricted Stock cease to be subject to the forfeiture restrictions. Such election (an “83(b) Election”) must be filed with the Internal Revenue Service within 30 days from the Grant Date of the Restricted Stock. The Participant understands that (a) the Participant will not be entitled to a deduction for any ordinary income previously recognized as a result of the 83(b) Election if the Restricted Stock is subsequently forfeited to the Company, and (b) the 83(b) Election may cause the Participant to recognize more ordinary income than the Participant would have otherwise recognized if the value of the Restricted Stock subsequently declines. If the Participant timely elects under Section 83(b) of the Code to include the fair market value on the Date of Grant of the Restricted Stock in the Participant’s income for the year, Participant agrees to give prompt written notice of such election to the Company. The Participant acknowledges that the foregoing is only a summary of the federal income tax laws that apply to the Restricted Stock under this Agreement and does not purport to be complete. The Participant further acknowledges that the Company has directed the Participant to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which the Participant may reside, and the tax consequences of the Participant’s death.

5.Book Entry Registration of Restricted Stock. The Company will issue the Restricted Stock by registering the Restricted Stock in book entry form with the Company’s transfer agent in the Participant’s name with the applicable restrictions noted in the records of the Company’s transfer agent in the book entry system. If any portion of the Restricted Stock is forfeited, the forfeited portion of the Restricted Stock will be transferred to the Company.

6.General.

(a)Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation. By entering into this Agreement and accepting the Award, the Participant acknowledges: (i) that the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; (ii) that this Agreement does not create any contractual or other right to receive future grants of Restricted Stock or any other Award; (iii) that participation in the Plan is voluntary; (iv) that the value of the Restricted Stock is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; and (v) that the future value of the Common Stock is unknown and cannot be predicted with certainty.

(b)No Rights to Continued Service. Neither this Agreement nor any action taken hereunder shall be construed as giving the Participant any right to be retained as a director or otherwise in the service of the Company or any of its Affiliates.

- 2 -

(c)Delivery of Documents. The Participant agrees that the Company may deliver by email all notices and documents relating to the Plan or the Award (including, without limitation, a copy of the Plan) and all other documents that the Company is required to deliver to its security holders (including, without limitation, disclosures that may be required by the Securities and Exchange Commission). The Participant also agrees that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a website, it shall notify the Participant by email or such other reasonable manner as then determined by the Company.

(d)Confidentiality. The Participant acknowledges having read and understood the Company’s policies on confidentiality as set forth in the Company’s Code of Ethics and Business Conduct and the Policy on Trading in Securities (collectively, the “Confidentiality Policies”) and hereby agrees that during the Participant’s service with the Company and its Affiliates and any time thereafter, the Participant will continue to abide by the terms of the Confidentiality Policies, including with respect to any materials or information received in connection with the Award.

(e)Data Privacy Consent. As a condition of the grant of the Award, the Participant consents to the collection, use and transfer of personal data as described in this paragraph. The Participant understands that the Company and its Affiliates hold certain personal information about the Participant, including his or her name, home address and telephone number, date of birth, social security number, compensation, nationality, title, ownership interests or directorships held in the Company or its Affiliates, and details of all Awards awarded, cancelled, exercised, vested or unvested (“Data”). The Participant further understands that the Company and its Affiliates will transfer Data amongst themselves as necessary for the purposes of implementation, administration and management of the Participant’s participation in the Plan, and that the Company and any of its Affiliates may each further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan.

(f)Entire Agreement, etc. Except as otherwise provided by an applicable agreement between the Participant and the Company or an Affiliate, this Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations, and negotiations in respect thereto. No change, modification, or waiver of any provision of this Agreement shall be valid unless the same be in writing and signed by the Company and the Participant. Any provision for the benefit of the Company contained in this Agreement may be waived, either generally or in any particular instance, by the Committee. A waiver on one occasion shall not be deemed to be a waiver of the same or any other breach on a future occasion.

(g)Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware without regard to principles of conflicts of law thereof, or principles of conflicts of laws of any other jurisdiction which could cause the application of the laws of any jurisdiction other than the State of Delaware.

(h)Acceptance of Agreement. The Participant has indicated his or her consent and acknowledgment of the terms of this Agreement and the Plan by executing this Agreement pursuant to the instructions provided to the Participant by or on behalf of the Company. The Participant acknowledges receipt of the Plan, and as an express condition to the grant of the Award under the Agreement, agrees to be bound by the terms of both this Agreement and the Plan. The Participant and the Company hereby expressly agree that the use of electronic media to indicate confirmation, consent, signature, acceptance, agreement and delivery shall be legally valid and have the same legal force and effect as if the Participant and the Company executed this Agreement in paper form.

- 3 -

EX-31.1

Exhibit 31.1

SECTION 302 CERTIFICATION

I, Justin C. Dearborn, Chief Executive Officer of tronc, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of tronc, Inc.;

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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. 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

d. 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/ Justin C. Dearborn___________________________________________

Justin C. Dearborn,

Chief Executive Officer

Date: August 10, 2018

EX-31.2

Exhibit 31.2

SECTION 302 CERTIFICATION

I, Terry Jimenez, Chief Financial Officer of tronc, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of tronc, Inc.;

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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. 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

d. 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/ Terry Jimenez_________________________________________

Terry Jimenez,

Chief Financial Officer

Date: August 10, 2018

EX-32

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 tronc, Inc. (the “Company”) on Form 10-Q for the period ended July 1, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Justin C. Dearborn, Chief Executive Officer of the Company, and Terry Jimenez, 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/ Justin C. Dearborn_____________________________________

Justin C. Dearborn,

Chief Executive Officer

Date: August 10, 2018

By: /s/ Terry Jimenez________________________________________

Terry Jimenez,

Chief Financial Officer

Date: August 10, 2018

XML

Document and Entity Information - shares	6 Months Ended
	Jul. 01, 2018	Aug. 08, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	tronc, Inc.
Entity Central Index Key	0001593195
Current Fiscal Year End Date	--12-30
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Jul. 01, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		35,460,739

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jun. 25, 2017	Jul. 01, 2018	Jun. 25, 2017
Income Statement [Abstract]
Operating revenues	$ 253,037	$ 243,435	$ 491,576	$ 483,410
Operating expenses:
Compensation	106,455	92,609	217,293	189,003
Newsprint and ink	16,770	14,091	31,368	28,425
Outside services	81,818	80,526	180,803	161,021
Other operating expenses	36,297	38,760	69,159	76,526
Depreciation and amortization	12,942	12,987	25,959	23,682
Total operating expenses	254,282	238,973	524,582	478,657
Income (loss) from operations	(1,245)	4,462	(33,006)	4,753
Interest expense, net	(5,412)	(6,365)	(11,976)	(12,800)
Loss on early extinguishment of debt	(7,666)	0	(7,666)	0
Premium on stock buyback	0	0	0	(6,031)
Loss on equity investments, net	(665)	(723)	(1,394)	(1,621)
Other income, net	3,640	284	7,303	567
Loss from continuing operations before income taxes	(11,348)	(2,342)	(46,739)	(15,132)
Income tax expense (benefit)	3,753	(402)	(2,926)	(2,280)
Loss from continuing operations	(15,101)	(1,940)	(43,813)	(12,852)
Plus: Earnings from discontinued operations, net of taxes	280,545	8,781	294,745	16,704
Loss from continuing operations	265,444	6,841	250,932	3,852
Less: Net income from continuing operations attributable to noncontrolling interest	448	0	710	0
Net income available to tronc stockholders	$ 264,996	$ 6,841	$ 250,222	$ 3,852
Loss from continuing operations per common share:
Basic (in dollars per share)	$ (0.44)	$ (0.06)	$ (1.27)	$ (0.37)
Diluted (in dollars per share)	(0.44)	(0.06)	(1.27)	(0.37)
Net income attributable to tronc per common share:
Basic (in dollars per share)	7.51	0.21	7.14	0.11
Diluted (in dollars per share)	$ 7.51	$ 0.21	$ 7.14	$ 0.11
Weighted average shares outstanding:
Basic (in shares)	35,288	32,825	35,045	34,566
Diluted (in shares)	35,288	32,825	35,045	34,566

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jun. 25, 2017	Jul. 01, 2018	Jun. 25, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 265,444	$ 6,841	$ 250,932	$ 3,852
Other comprehensive income, net of taxes:
Amortization of items to periodic pension cost during the period, net of taxes of ($915), ($133), ($1,830) and ($267), respectively	(2,376)	(206)	(4,752)	(410)
Foreign currency translation	(5)	1	(5)	1
Other comprehensive loss, net of taxes	(2,381)	(205)	(4,757)	(409)
Accumulated other comprehensive income recognized in discontinued operations, net of taxes of $9,702	25,397	0	25,397	0
Comprehensive income	288,460	6,636	271,572	3,443
Comprehensive income attributable to noncontrolling interest	448	0	710	0
Comprehensive income attributable to tronc common stockholders	$ 288,012	$ 6,636	$ 270,862	$ 3,443

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jun. 25, 2017	Jul. 01, 2018	Jun. 25, 2017
Statement of Comprehensive Income [Abstract]
Tax effect	$ (915)	$ (133)	$ (1,830)	$ (267)
Accumulated OCI recognized in discontinued operations - tax	$ 9,702		$ 9,702

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Current assets
Cash	$ 214,544	$ 185,351
Accounts receivable, (net of allowances of $10,613 and $7,388)	133,103	129,480
Inventories	11,017	7,412
Prepaid expenses and other	22,859	22,685
Assets related to discontinued operations	0	61,777
Total current assets	381,523	406,705
Property, plant and equipment
Machinery, equipment and furniture	145,905	110,598
Buildings and leasehold improvements	55,473	36,987
Property, plant and equipment, gross	201,378	147,585
Accumulated depreciation	(68,314)	(61,481)
Property, plant and equipment, net, excluding advance payments	133,064	86,104
Advance payments on property, plant and equipment	11,616	8,386
Property, plant and equipment, net	144,680	94,490
Other assets
Goodwill	138,201	48,700
Intangible assets, net	80,525	64,996
Software, net	33,238	39,577
Restricted cash	42,600	0
Deferred income taxes	0	1,124
Other long-term assets	29,502	31,163
Assets related to discontinued operations	0	178,378
Total other assets	324,066	363,938
Total assets	850,269	865,133
Current liabilities
Accounts payable	85,625	65,724
Employee compensation and benefits	48,989	49,109
Deferred revenue	62,675	50,314
Current portion of long-term debt	702	21,487
Other current liabilities	22,701	13,876
Liabilities associated with discontinued operations	107,624	60,394
Total current liabilities	328,316	260,904
Non-current liabilities
Pension and postretirement benefits payable	21,069	23,438
Deferred income taxes payable	5,970	0
Deferred revenue	3,207	4,818
Long-term debt	6,797	331,065
Workers’ compensation, general liability and auto insurance payable	31,604	37,869
Other obligations	32,810	21,522
Liabilities associated with discontinued operations	0	116,355
Total non-current liabilities	101,457	535,067
Noncontrolling interest	41,610	0
Stockholders’ equity
Preferred stock, $.01 par value. Authorized 30,000 shares; no shares issued or outstanding at July 1, 2018 and December 31, 2017	0	0
Common stock, $.01 par value. Authorized 300,000 shares, 37,243 shares issued and 35,289 shares outstanding at July 1, 2018; 37,551 shares issued and 33,684 shares outstanding at December 31, 2017	372	376
Additional paid-in capital	163,729	150,229
Retained earnings (accumulated deficit)	233,832	(16,390)
Accumulated other comprehensive income (loss)	7,113	(13,527)
Treasury stock, at cost - 1,954 shares at July 1, 2018 and 3,867 shares at December 31, 2017	(26,160)	(51,526)
Total stockholders’ equity	378,886	69,162
Total liabilities and stockholders’ equity	$ 850,269	$ 865,133

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Allowances for doubtful accounts	$ 10,613	$ 7,388
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	30,000,000	30,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	300,000,000	300,000,000
Common stock, shares issued (in shares)	37,243,000	37,551,000
Common stock, shares outstanding (in shares)	35,289,000	33,684,000
Treasury stock, shares (in shares)	1,954,000	3,867,000

XML

CONSOLIDATED STATEMENT OF EQUITY - 6 months ended Jul. 01, 2018 - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid in Capital	Retained earnings	AOCI	Treasury Stock
Balance at beginning of period (in shares) at Dec. 31, 2017		37,551
Balance at beginning of period at Dec. 31, 2017	$ 69,162	$ 376	$ 150,229	$ (16,390)	$ (13,527)	$ (51,526)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss) recognized in continuing operations, attributable to controlling interests	245,465			250,222	(4,757)
Accumulated other comprehensive income recognized in discontinued operations, net of taxes of $9,702	25,397
Issuance of stock from treasury for acquisition	34,595		9,229			25,366
Issuance of stock from restricted stock and restricted stock unit conversions (in shares)		134
Issuance of stock from restricted stock and restricted stock unit conversions	0	$ 1	(1)
Exercise of stock options (in shares)		7
Exercise of stock options	134		134
Stock-based compensation	5,195		5,195
Withholding for taxes on restricted stock unit conversions	(1,062)		(1,062)
Forfeited restricted stock (in shares)		(450)
Forfeited restricted stock	0	$ (5)	5
Balance at end of the period (in shares) at Jul. 01, 2018		37,242
Balance at end of period at Jul. 01, 2018	$ 378,886	$ 372	$ 163,729	$ 233,832	$ 7,113	$ (26,160)

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2018	Jun. 25, 2017
Operating Activities From Continuing Operations
Net income (loss)	$ (43,813)	$ (12,852)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	25,959	23,682
Stock compensation expense	5,195	4,069
Loss on equity investments, net	1,394	1,261
Loss on early extinguishment of debt	7,666	0
Deferred income taxes	7,094	3,228
Non-current deferred revenue	(3,722)	(711)
Premium on stock buyback	0	6,031
Pension contribution	(534)	0
Postretirement medical, life and other benefits	(2,369)	(934)
Changes in working capital items, excluding acquisitions:
Accounts receivable, net	15,801	22,715
Prepaid expenses, inventories and other current assets	16,934	(1,190)
Accounts payable, employee compensation and benefits, deferred revenue and other current liabilities	9,898	(41,258)
Other, net	1,676	2,675
Net cash provided by operating activities	41,179	6,716
Investing Activities From Continuing Operations
Capital expenditures	(30,435)	(9,240)
Acquisition of business, net of cash acquired	(67,952)	0
Other, net	(2,371)	(1,481)
Net cash used for investing activities	(100,758)	(10,721)
Financing Activities From Continuing Operations
Repayment of long-term debt	(353,253)	(10,545)
Purchase of treasury stock	0	(56,189)
Withholding for taxes on RSU vesting	(1,062)	(896)
Dividends paid to common stockholders	0	(145)
Proceeds from exercise of stock options	134	95
Other	36	0
Net cash used for financing activities	(354,145)	(67,680)
Decrease in cash attributable to continuing operations	(413,724)	(71,685)
Cash Flows From Discontinued Operations
Cash flows provided by operating activities of discontinued operations, net	2,387	48,183
Cash flows provided by (used for) investing activities of discontinued operations, net	483,320	(388)
Cash flows used for financing activities of discontinued operations, net	(190)	(259)
Increase in cash attributable to discontinued operations	485,517	47,536
Net increase (decrease) in cash	71,793	(24,149)
Cash, cash equivalents and restricted cash beginning of period	185,351	198,349
Cash, cash equivalents and restricted cash, end of period	$ 257,144	$ 174,200

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

6 Months Ended

Jul. 01, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business—tronc, Inc., formerly Tribune Publishing Company, was formed as a Delaware corporation on November 21, 2013. tronc, Inc. together with its subsidiaries (collectively, the “Company” or “tronc”) is a media company rooted in award-winning journalism. Headquartered in Chicago, tronc operates local media businesses in eight markets with titles including the Chicago Tribune, New York Daily News, The Baltimore Sun, Orlando Sentinel, South Florida’s Sun Sentinel, Virginia’s Daily Press and The Virginian-Pilot, The Morning Call of Lehigh Valley, Pennsylvania andthe Hartford Courant. tronc also operates Tribune Content Agency and the Daily Meal and on February 6, 2018, the Company became a majority owner in BestReviews LLC (“BestReviews”). On May 18, 2018, the Company acquired Virginian-Pilot Media Companies LLC, owner of the The Virginian-Pilot a daily newspaper based in Norfolk, Virginia and associated businesses (“Virginian-Pilot”). See Note 5 for further information on acquisitions.

On May 23, 2018, the Company completed the sale of substantially all of the assets of forsalebyowner.com and on June 18, 2018, the Company completed the sale of the Los Angeles Times, The San Diego Union-Tribune and various other titles of the Company’s California properties (“California Properties”). See Note 6 for more information on the dispositions and related discontinued operations.

tronc’s continuing legacy of brands, including the New York Daily News and The Virginian-Pilot, have earned a combined 60 Pulitzer Prizes and are committed to informing, inspiring and engaging local communities. tronc’s brands create and distribute content across its media portfolio, offering integrated marketing, media, and business services to consumers and advertisers, including digital solutions and advertising opportunities.

Fiscal Periods—The Company’s fiscal year ends on the last Sunday in December. Fiscal year 2018 ends on December 30, 2018 and fiscal year 2017 ended on December 31, 2017. Fiscal year 2018 is a 52-week year with 13 weeks in each quarter. Fiscal year 2017 was a 53-week year with 13 weeks in the first through third quarters and 14 weeks in the fourth quarter.

Basis of Presentation—The accompanying unaudited Consolidated Financial Statements and notes of the Company 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 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 tronc as of July 1, 2018 and December 31, 2017 and the results of operations for the three and six months endedJuly 1, 2018 and June 25, 2017, respectively, and the cash flows for the six months ended July 1, 2018 and June 25, 2017, respectively. This includes all normal and recurring adjustments and elimination of intercompany transactions. Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The year-end Consolidated Balance Sheet was derived from audited financial statements but does not include all disclosures required by U.S. GAAP.

Effective as of the sale dates, the operations of the California Properties and forsalebyowner.com qualify as discontinued operations. Accordingly, operations for all periods presented have been reflected as discontinued operations in the accompanying Consolidated Statements of Income and Consolidated Statements of Cash Flows. Additionally, assets and liabilities related to the divested properties are classified as such in all prior periods in the Consolidated Condensed Balance Sheets. Unless otherwise noted, amounts and disclosures throughout these Notes to Consolidated Financial Statements relate to continuing operations and exclude all discontinued operations including the California Properties and forsalebyowner.com.

The Company assesses its operating segments in accordance with ASC Topic 280, “Segment Reporting.” The Company is managed by its chief operating decision maker, as defined by ASC Topic 280, in two reportable segments, troncM and troncX. troncM is comprised of the Company’s media groups excluding their digital revenues and related digital expenses, except digital subscription revenues when bundled with a print subscription. troncX includes the Company’s digital revenues and related digital expenses from local tronc websites, third party websites, mobile applications, digital-only subscriptions, BestReviews and Tribune Content Agency (“TCA”). See Note 17 for additional segment information.

New Accounting Standards—In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-02, Topic 220, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The ASU amends ASC 220, Income Statement — Reporting Comprehensive Income, to “allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.” In addition, under the ASU, an entity will be required to provide certain disclosures regarding stranded tax effects. The ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company is currently evaluating how the adoption of this standard will impact the Company’s consolidated financial statements.

In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-07, Topic 715, Compensation - Retirement Benefits; Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ASU 2017-07 requires the disaggregation of the service cost component from other components of net periodic benefit cost, clarifies how to present the service cost component and other components of net benefit costs in the financial statements and allows only the service cost component of net benefit costs to be eligible for capitalization. The Company adopted the standard on January 1, 2018 and has applied the standard on a retrospective basis. Accordingly, prior period amounts have been adjusted. Adoption of the standard had no effect on the Company’s overall results of operations. The disclosures required by the standard can be found in Note 11.

In January 2017, the FASB issued ASU 2017-04, Topic 350, Intangibles-Goodwill and Other; Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test thereby standardizing the impairment assessment to measure a reporting unit’s carrying value against its fair value and eliminate the calculation of an implied fair value of goodwill. ASU 2017-04 is effective for interim and annual reporting periods beginning after December 15, 2019 and should be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating how the adoption of this standard will impact the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Topic 805, Clarifying the Definition of a Business, which establishes criteria to determine when an integrated set of assets and activities is not a business. ASU 2017-01 is effective for interim and annual reporting periods beginning after December 15, 2017 and should be applied prospectively. The Company adopted the standard effective January 1, 2018 and will apply the standard to acquisitions or dispositions after that date.

In November 2016, the FASB issued ASU 2016-18, Topic 230, Statement of Cash Flows, which clarifies how companies present and classify restricted cash in the statement of cash flows. ASU 2016-18 is effective for interim and annual reporting periods beginning after December 15, 2017. The guidance is required to be applied on a retrospective basis. The Company adopted the standard effective January 1, 2018. The adoption had no retrospective effect on the Company’s consolidated financial statements as the Company had no restricted cash during 2017 or the first quarter of 2018. However, beginning the in the second quarter of 2018, the Company has restricted cash and the restricted cash balances are included in the beginning and ending cash balances in the statements of cash flows and Note 18 provides a reconciliation between cash balances presented on the balance sheets with the amounts presented in the statements of cash flows.

In August 2016, the FASB issued ASU 2016-15, Topic 230, Statement of Cash Flows, which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. ASU 2016-15 is effective for interim and annual reporting periods beginning after December 15, 2017. The guidance is required to be applied on a retrospective basis. The Company adopted the standard effective January 1, 2018. The adoption had no effect on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Topic 842, Leases, which requires lessees to recognize lease assets and lease liabilities for operating leases. The Company expects to adopt this standard in the first quarter of 2019 using the transition option whereby companies may initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has initiated efforts to assess the impact of this new standard on the Company’s future reported results and operating and accounting processes and systems. The Company expects to elect the practical expedients which allow the Company to forgo reassessing whether existing contracts are or contain leases, forgo reassessing the classification of existing leases and forgo reassessing initial direct costs of existing leases at the initial application date.

In May 2014, the FASB issued ASU 2014-09, Topic 606, Revenue from Contracts with Customers and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016, May 2016, and December 2016 within ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20, respectively. 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. On January 1, 2018, the Company adopted ASU 2014-09 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results of operations for periods after January 1, 2018 reflect the changes under ASU 2014-09. Results of operations for periods before January 1, 2018, continue to be reported under guidance in effect at that time. The adoption did not have a material effect on the Company’s consolidated financial statements. See Note 2 for disclosures as a result of the adoption.

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REVENUE RECOGNITION (Notes)

6 Months Ended

Jul. 01, 2018

Revenue from Contract with Customer [Abstract]

Revenue Recognition

REVENUE RECOGNITION

Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services. Revenues are recognized as performance obligations that are satisfied at either a point in time, such as when an advertisement is published, or over time, such as content licensing.

Advertising revenue

Print advertising revenue is typically in the form of print display appearing in tronc newspapers and preprinted advertising inserted into tronc newspapers. Digital advertising consists of website display, banner ads, advertising widgets, coupon ads, video, search advertising and linear ads placed by tronc on websites. Customers submit ads to appear either in the print newspapers or on websites. Advertising revenue is recognized when the Company satisfies the performance obligation by transferring the promised goods or services to the customer in an amount that reflects the consideration the Company is entitled to receive. For print advertising, classified and preprint advertising, this transfer, which occurs at a point in time, occurs when the advertising appears in the newspaper.

Digital advertising is typically sold on a cost-per-impression basis. An advertiser pays an amount based on the number of times their ad is displayed on the Company’s websites. Revenue is recognized at a point in time when the ad is displayed on the websites.

Advertising revenue also includes digital marketing services which include development of mobile websites, search engine marketing and optimization, social media account management and content marketing for customers’ web presence for small to medium size businesses. For mobile website development, revenue is recognized when the website is live. For search engine marketing and optimization, social account management and content marketing, revenue is recognized over the period of time the service is performed for the customer.

Certain customers receive cash-based incentives or credits, which are accounted for as variable consideration. The Company estimates these amounts based on the expected amount to be provided to customers and reduces revenues recognized. The Company expects there will be no significant changes to our estimates of variable consideration.

Circulation revenue

Circulation revenue results from the sale of print editions of newspapers to individual subscribers and to sales outlets that re-sell the newspapers. For individual subscribers, revenue is recognized at a point in time when the newspapers are delivered to the subscribers. For sales outlets, revenue is recognized at a point in time when the newspapers are delivered to the sales outlets or to an intermediary which has purchased the newspapers to resell to the sales outlets.

Other revenue

Other revenues are derived from commercial printing and delivery services provided to other newspapers, direct mail advertising and services, syndication and licensing revenue, ecommerce lead generation revenue and digital-only subscriptions.

Digital circulation revenue results from the provision of online content to subscribers. tronc recognizes revenue daily, per the contract term as the customer receives access to digital content.

For commercial printing and delivery services, the Company contracts with a number of national and local newspapers to both print and/or distribute their respective publications in local markets where it is a newspaper publisher. For commercial printing, revenue is recognized as the papers are printed and available for delivery. For commercial delivery, the Company operates under two models, the buy/sell model and the fee-for-delivery model. Under the buy/sell model, the Company buys the customers newspapers and resells them to subscribers and sales outlets. Revenue the Company receives for the sale of the newspapers is recognized when the newspapers are delivered to subscribers or sales outlets. Under the fee-for-delivery model, the Company receives a fee for each newspaper delivered. Revenue is recognized at the time the newspaper is delivered either to the subscriber or to the sales outlet.

For direct mail advertising and services, the Company enters into an arrangement with customers to design, print and distribute advertising materials. Revenue is recognized when the items are delivered to the postage courier.

For licensing and syndication revenue, the Company enters into a sales-based royalty arrangement with the customer to provide a license to tronc content. The Company receives a periodic royalty payment based on usage of the content or derived sales of the content. Revenue is recognized based on royalties received.

For ecommerce lead generation revenue, the Company provides leads to ecommerce sites such as Amazon.com and Walmart.com. Once the leads convert to sales on these sites, the Company receives a percentage of the sales. Revenue is recognized when the leads have been converted to sales, net of a reserve for returned items.

The Company’s revenues disaggregated by type of revenue and segment are presented in Note 17.

The Company receives a significant portion of the payments from its subscribers in advance of the delivery of the content both either in print or digitally. These up-front payments and fees are recorded as deferred revenue upon receipt and generally require deferral of revenue recognition to a future period until the Company performs its obligations under the subscription agreement. The deferred revenue is recognized as revenue as the content is delivered. The deferred revenue is considered a contract liability under ASC 606. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. Therefore, the Company has no contract assets as defined under ASC 606. As of December 31, 2017, the Company had a contract liabilities balance from continuing operations of $55.1 million, of which $41.5 million has been recognized as revenue in the six months ended July 1, 2018. The balance as of December 31, 2017 and the revenue recognized during the six months ended July 1, 2018 exclude amounts related to discontinued operations.

The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within cost of sales. Additionally, the Company does not disclose the value of unsatisfied performance obligations because the vast majority of contracts have original expected lengths of one year or less and payment terms are generally short-term in nature unless a customer is in bankruptcy.

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CHANGES IN OPERATIONS

6 Months Ended

Jul. 01, 2018

Restructuring and Related Activities [Abstract]

CHANGES IN OPERATIONS

CHANGES IN OPERATIONS

Employee Reductions

The Company continually assesses its operations in an effort to identify opportunities to enhance operational efficiencies and reduce expenses. In the past these activities have included, and could include in the future, outsourcing of various functions or operations, abandonment of leased space and other activities which may result in changes to employee headcount. The discussion and amounts below represent activity in the Company’s continuing operations and exclude any amounts in the Company’s assets, liabilities or operations from discontinued operations.

During the second quarter of 2017, the Company contracted with a third party to outsource the printing, packaging and delivery of the Orlando Sentinel. The services were fully transitioned to the third party by the end of the third quarter of 2017. The change in operations resulted in staff reductions of 112 positions and a pretax charge related to those reductions of $2.3 million for the three and six months endedJune 25, 2017. The related salary continuation payments began in the third quarter of 2017 and are expected to continue through the fourth quarter of 2018.

The Company implemented reductions of 106 and 287 positions during the three and six months endedJuly 1, 2018, respectively, and recorded pretax charges related to these reductions of $5.0 million and $10.7 million, respectively. In addition to the action described above, the Company implemented reductions of 41 and 92 positions during the three and six months endedJune 25, 2017, respectively, and recorded pretax charges related to these reductions of $0.9 million and $3.0 million during the three and six months endedJune 25, 2017, respectively.

A summary of the activity with respect to the Company’s severance accrual for the six months ended July 1, 2018 is as follows (in thousands):

Balance at December 31, 2017	$	11,532
Provision	10,691
Payments	(12,681		)
Balance at July 1, 2018	$	9,542

Charges for severance and related expenses are included in compensation expense in the accompanying Consolidated Statements of Income.

Subsequent to July 1, 2018, the Company implemented reductions of 178 positions of which approximately 50% were at the New York Daily News. The Company is expected to take a total pre-tax charge of between $5.2 million and $5.4 million in the third quarter of 2018 related to such reductions. The related salary continuation payments will start in the third quarter of 2018 and continue until the third quarter of 2019.

Lease Abandonment

A summary of the activity with respect to the Company’s lease abandonment accrual for the six months ended July 1, 2018 is as follows (in thousands):

Balance at December 31, 2017	$	3,127
Provision	33
Payments and other	(1,977		)
Balance at July 1, 2018	$	1,183

These charges are included in other operating expenses in the accompanying Consolidated Statements of Income.

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jul. 01, 2018

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

See Note 6 for related party income and expenses included in discontinued operations, including the Nant transaction.

Merrick Consulting Agreement

On December 20, 2017, the Company entered into a Consulting Agreement with Merrick Ventures LLC (“Merrick Ventures”) and solely for certain sections thereof, Michael W. Ferro, Jr. and Merrick Media, LLC (“Merrick Media”). Mr. Ferro is: (1) Chairman and Chief Executive Officer of Merrick Ventures and (2) the manager of Merrick Venture Management, LLC which is the sole manager of Merrick Media. At the time the agreement was signed, Mr. Ferro was also Chairman of tronc’s Board of Directors and, together with Merrick Ventures and Merrick Media, a significant stockholder. The Consulting Agreement provided for the engagement of Merrick Ventures on a non-exclusive basis to provide certain management expertise and technical services for an annual fee of $5 million in cash, payable in advance on the first business day of each calendar year. The Consulting Agreement provided for a rolling three-year term, with the initial term continuing through December 31, 2020. The Company made the initial $5.0 million payment in early January 2018. During the term of the Consulting Agreement, Merrick Ventures and Mr. Ferro agreed to certain non-competition covenants relating to engaging in certain other daily printed newspaper businesses, subject to certain exceptions, and amended certain terms of the Securities Purchase Agreement by and among the Company, Merrick Media and Mr. Ferro. The Consulting Agreement also provided for termination of the Aircraft Dry Sublease Agreement described below, as of December 31, 2017 and after such time, Merrick Ventures and Mr. Ferro are responsible for all travel expenses (including private plane expenses) incurred by them in performance of their services for the Company, rather than the Company reimbursing them for such expenses. Such Aircraft Dry Sublease expenses totaled $3.0 million in fiscal 2017 and $2.7 million in fiscal 2016.

On March 18, 2018, Mr. Ferro retired from the Company’s Board. As Mr. Ferro is no longer actively engaged in the business and the Company remained contractually committed for the future payments due under the Consulting Agreement, the Company recognized expense for the full $15.0 million due under the Consulting Agreement in outside services in the first quarter of 2018. In the second quarter of fiscal 2018, the Company amended the Consulting Agreement. The amendment reduced the total fees due under the Consulting Agreement by $2.5 million (from $15 million to $12.5 million) and allows the Company to engage Merrick Ventures as its advisor, if it so chooses, but at no additional cost to the Company. If so engaged, the Company would indemnify Merrick Ventures if the Company requests it to meet with third parties. In June 2018, the Company paid the remaining $7.5 million in fees due under the amended Consulting Agreement in connection with the execution of the amendment. The Company recognized a credit of $2.5 million for the reduction in fees due under the Consulting Agreement in outside services in the second quarter of 2018. The non-compete covenants and amended Securities Purchase Agreement terms contained in the Consulting Agreement were not altered by the amendment and remain in place through December 31, 2020.

In the second quarter, the Company agreed to pay $0.3 million in legal fees incurred by Mr. Ferro while conducting the Company’s business. Such legal fees will be paid directly to the legal firms.

Aircraft Dry Sublease

During 2017, the Company was party to an Aircraft Dry Sublease Agreement with Merrick Ventures. Under the agreement, the Company subleased on a non-exclusive basis, a Bombardier aircraft leased by Merrick Ventures, which included the Company’s proportionate share of the insurance premiums and maintenance expenses and for charges attributable to the Company for the operation of the aircraft by the Company during the lease term. This lease was terminated effective December 31, 2017. During the three and six months endedJune 25, 2017, the Company incurred $0.6 million and $1.3 million related to the aircraft sublease. For the three and six months endedJune 25, 2017, the Company paid $0.4 million and $1.0 million to Merrick Ventures and $0.1 million and $0.2 million to an outside party for pilot services.

Event tickets

In April 2017, the Company acquired Merrick Ventures’ interest and obligations in connection with the license of a suite and tickets to certain sporting events. The suite and tickets were utilized in the Company’s sales and marketing efforts and for other corporate purposes. The aggregate cost of the suite and regular season tickets approximated $0.3 million annually. During the first quarter of 2017, the Company paid Merrick Ventures $0.2 million for the face value of the suite and tickets for events. There are no further obligations to Merrick Ventures for these tickets.

Nucleus Marketing Solutions, LLC

In April 2016, tronc, along with other leading media companies McClatchy, Gannett and Hearst, formed Nucleus Marketing Solutions, LLC (“Nucleus”). This network connects national advertisers to audiences across existing and emerging print and digital platforms. Nucleus works with its marketing partners to address their goals by offering integrated services across all platforms. The Company owned 25% of Nucleus as of July 1, 2018, which is accounted for as an equity method investment. During the three and six months endedJune 25, 2017, the Company recorded $1.6 million and $3.6 million, respectively, on a net basis for revenue related to the Nucleus agreement. The revenue recorded during the three and six months endedJuly 1, 2018 was immaterial.

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ACQUISITIONS ACQUISITIONS

6 Months Ended

Jul. 01, 2018

Business Combinations [Abstract]

ACQUISITIONS

ACQUISITIONS

Virginian-Pilot

On May 28, 2018, Tribune Publishing Company, LLC, a wholly-owned subsidiary of the Company, acquired Virginian-Pilot Media Companies, LLC (“Virginian-Pilot”), the owner of The Virginian-Pilot daily newspaper based in Norfolk, Virginia, pursuant to a Securities Purchase Agreement, entered into on the same date (the “VP Purchase Agreement”), by and among the Company, Virginian-Pilot and Landmark Media Enterprises, LLC (“Seller”).

Upon the terms and subject to the conditions set forth in the VP Purchase Agreement, the Company acquired all of the issued and outstanding membership interests in Virginian-Pilot from Seller for a cash purchase price of $34.0 million, subject to a post-closing working capital adjustment (the “VP Acquisition”). As part of the VP Acquisition, the Company also acquired Virginian-Pilot’s real estate portfolio (comprised of approximately 460,000 square feet), including its headquarters building in downtown Norfolk, its printing and distribution facilities in Virginia Beach and a number of satellite offices in Norfolk and North Carolina. The VP Purchase Agreement also contains representations, warranties, covenants, and indemnities of the parties thereto.

The allocation of the purchase price presented below is based upon management’s preliminary estimates. The Company has engaged a valuation firm to assist with the valuation of the assets acquired and liabilities assumed, including property, plant and equipment and intangible assets. However, such valuation is not complete as of the filing date of this report. The preliminary allocation of the purchase price is as follows (in thousands):

Consideration
Cash consideration for acquisition	$	34,004
Total consideration	$	34,004
Allocated Fair Value of Acquired Assets and Assumed Liabilities
Accounts receivable and other current assets	$	7,028
Property, plant and equipment	30,485
Mastheads	4,700
Accounts payable and other current liabilities	(9,918		)
Other long term obligations	(68		)
Total identifiable assets (liabilities), net	32,227
Goodwill	1,777
Total net assets acquired	$	34,004

The allocation of the purchase price is preliminary. The valuation of the property plant and equipment and intangible assets are not complete. The intangible assets currently being evaluated are mastheads, subscriber and advertiser relationships; however, the Company may identify additional intangible assets prior to finalizing the purchase price allocation. 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 expected future cost and revenue synergies. A portion of goodwill is expected to be deductible for tax purposes pursuant to Internal Revenue Code Section 197.

The results of operations of Virginian-Pilot and related goodwill have been included in the Consolidated Financial Statements beginning on the closing date of the acquisition and are primarily included in the results of the Company’s troncM segment. For the three and six months endedJuly 1, 2018, reported revenues from Virginian-Pilot were $5.5 million, and reported operating expenses were $5.1 million. The pro forma effect of the acquisition is not material to the Company’s Consolidated and Combined Financial Statements.

BestReviews

Acquisition Agreement

On February 6, 2018, the Company acquired a 60% membership interest in BestReviews LLC (“BestReviews”), a company engaged in the business of testing, researching and reviewing consumer products, pursuant to an Acquisition Agreement, entered into on the same date (the “BestReviews Acquisition Agreement”), among the Company, BestReviews Inc., a Delaware corporation (“BR Parent”), BestReviews and the stockholders of Best Reviews Inc.

Upon the terms and subject to the conditions set forth in the BestReviews Acquisition Agreement, the Company acquired 60% of BR Parent’s membership interest in BestReviews for a total purchase price of $68.3 million, consisting of $33.7 million in cash, subject to a post-closing working capital adjustment due from the seller of approximately $0.6 million, and $34.6 million in common stock of the Company (the “BR Acquisition”). The Company issued 1,913,438 shares of common stock in connection with the closing (the “Stock Consideration”). The Stock Consideration is subject to lock-up provisions that prohibit certain transfers of the shares and standstill provisions based upon the following schedule: 25% of the Stock Consideration will cease to be subject to the lockup provisions on the 6-month anniversary of the closing date of the BR Acquisition, an additional 50% of the Stock Consideration will cease to be subject to the lock-up provisions on the 9-month anniversary of the closing date of the BR Acquisition and an additional 25% of the Stock Consideration will cease to be subject to the lock-up provisions on the 12-month anniversary of the closing date of the BR Acquisition. The BestReviews Acquisition Agreement also contains representations, warranties, covenants, and indemnities of the parties thereto.

Limited Liability Company Agreement

In connection with the BR Acquisition, the Company and BR Parent also entered into an amended and restated limited liability company agreement of BestReviews (the “LLC Agreement”). Subject to the terms of the LLC Agreement, the Company has the right, beginning six months after the closing of the BR Acquisition, to purchase all (but not less than all) of the remaining 40% of the membership interests of BestReviews (the “Call Option”) using, at the Company’s election, cash, shares of common stock of the Company, or a combination thereof, at a purchase price to be based on a pre-determined multiple of BestReviews’ trailing 12-month EBITDA, with such purchase price capped per the LLC Agreement if the Call Option is exercised prior to the third anniversary of the closing of the BR Acquisition. In addition, beginning six months after closing the BR Acquisition, the Company is entitled to exercise a one-time right to purchase 25% of the units of membership interest of BestReviews retained by BR Parent (10% of the issued and outstanding equity) with terms identical to those applicable to the Call Option.

BR Parent also has the right, beginning three years after closing of the BR Acquisition, to cause the Company to purchase all (but not less than all) of the remaining 40% of the membership interests of BestReviews (the “Put Option”) using, at the Company’s election, cash, shares of common stock of the Company, or a combination thereof, at a purchase price to be determined in the same manner as if the Call Option was exercised.

If the exercise of the Call Option or the Put Option requires that the Company seek stockholder approval prior to issuing common stock of the Company as consideration in connection with such exercise, and the Company does not obtain requisite stockholder approval, then BestReviews will initiate a sale process for disposition of a majority of the voting power interests of BestReviews or other disposition of all or substantially all of BestReviews’ assets.

The LLC Agreement provides that BR Parent is entitled to certain registration rights under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the Company’s common stock issued to BR Parent. The Company is required to file (1) a registration statement on Form S-3 (“Form S-3”) with the Securities and Exchange Commission (“SEC”) to register the resale of the Stock Consideration within 90 days following the closing date of the BR Acquisition and (2) a Form S-3 with the SEC to register the resale of any shares of common stock of the Company issued in connection with an exercise of the Call Option or the Put Option within 60 days after the issuance of such shares.

The LLC Agreement contains other terms and conditions, including transfer restrictions, tag-along and drag-along rights, and indemnification obligations.

The allocation of the purchase price presented below is based upon management’s preliminary estimates. The Company has engaged a valuation firm to assist with the valuation of intangible assets and noncontrolling interest; however, such valuation is not complete as of the filing date of this report. The preliminary allocation of the purchase price is as follows (in thousands):

Consideration
Cash consideration for acquisition	$	33,693
Fair value of noncontrolling interest	40,900
Value of shares issued for acquisition	34,595
Total consideration	$	109,188
Allocated Fair Value of Acquired Assets and Assumed Liabilities
Accounts receivable and other current assets	$	9,966
Property, plant and equipment	36
Intangible assets	12,540
Accounts payable and other current liabilities	(993		)
Total identifiable assets (liabilities), net	21,549
Goodwill	87,639
Total net assets acquired	$	109,188

The allocation of the purchase price is preliminary. The valuation of the noncontrolling interest and intangible assets are not complete. The intangible assets currently being evaluated are trade names, proprietary technology and processes and certain relationships; however, the Company may identify additional intangible assets prior to finalizing the purchase price allocation. 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 access to the Company’s subscriber base and non-contractual relationships, as well as expected future cost and revenue synergies. The entire amount of purchase price allocated to intangible assets and a portion of goodwill is expected to be deductible for tax purposes pursuant to Internal Revenue Code Section 197.

The results of operations and related goodwill of BestReviews have been included in the Consolidated Financial Statements beginning on the closing date of the acquisition and are included in the results of the Company’s troncX segment. For the three and six months endedJuly 1, 2018, reported revenues from BestReviews were $5.9 million and $9.1 million, respectively, and reported operating expenses were $4.7 million and $7.3 million, respectively. The pro forma effect of the acquisitions is not material to the Company’s Consolidated and Combined Financial Statements.

New York Daily News

On September 3, 2017, the Company completed the acquisition of 100% of the partnership interests in Daily News, L. P. (“DNLP”), the owner of the New York Daily News in New York City, pursuant to the Partnership Interest Purchase Agreement dated September 3, 2017, for a cash purchase price of $1 and the assumption of certain liabilities, subject to a post-closing working capital adjustment.During the second quarter of 2018, the Company finalized the working capital calculation which resulted in an immaterial adjustment. As of the filing date of this report, the final determination of the fair value of assets acquired and liabilities assumed has not been completed. The estimated values are presented in the table below (in thousands):

Allocated Fair Value of Acquired Assets and Assumed Liabilities
Cash acquired as part of the purchase	$	2,555
Accounts receivable and other current assets	18,532
Property, plant and equipment, including assets under capital leases	47,972
Mastheads	3,400
Other long-term assets	10,448
Accounts payable and other current liabilities	(20,973		)
Pension and postemployment benefits liability	(25,446		)
Workers compensation and auto insurance liability	(25,999		)
Other long-term liabilities	(10,489		)
Total net assets acquired	$	—

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DISPOSITIONS AND DISCONTINUED OPERATIONS (Notes)

6 Months Ended

Jul. 01, 2018

Discontinued Operations and Disposal Groups [Abstract]

DISPOSITIONS AND DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

California Properties

On February 7, 2018, the Company entered into a Membership Interest Purchase Agreement (“MIPA”) by and between the Company and Nant Capital, LLC (“Nant Capital”) pursuant to which the Company agreed to sell the California Properties to Nant Capital for an aggregate purchase price of $500 million in cash, plus the assumption of unfunded pension liabilities related to the San Diego Pension Plan, subject to a customary post-closing working capital adjustment (the "Nant Transaction"). The Nant Transaction closed on June 18, 2018 and resulted in a pre-tax gain of $407.6 million. The operations of the California Properties were included in both the troncM and troncX segments.

The sale of the California Properties represents a strategic shift that will have a major effect on our operations and financial results. As a result, and as discussed in Note 1, effective as of the date of the sale, the California Properties are reflected as discontinued operations on the consolidated balance sheets in accordance with ASC 360 and the results of operations of the California Properties are presented as discontinued operations in the statements of income in accordance with ASC 205-20 for all periods presented.

Dr. Patrick Soon-Shiong, a former director of the Company, together with Nant Capital, beneficially own 8,743,619 shares of tronc common stock, which represented 24.8% of the outstanding shares of tronc common stock as of July 1, 2018. The sale price also resulted in full realization of recorded asset values reflecting no impairment incurred prior to the sale.

In connection with the closing of the sale of the California Properties, the Company entered into a transition services agreement (“TSA”) with Nant whereby the Company will provide back-office and operational services for up to 12 months. Either party may discontinue all or a portion of the services being provided by providing 60 days advance notice. The parties can also extend the agreement. During the six months ended July 1, 2018, the Company recorded $1.2 million in revenue related to the TSA.

Nant Works, LLC

In connection with the private placement with Nant Capital in the second quarter of 2016, the Company entered into a term sheet with NantWorks, LLC pursuant to which the Company would receive access to certain patents as well as studio space, subject to definitive documentation and approval from Tribune Media Company. If the transactions contemplated by the term sheet were consummated, the Company would issue to NantStudio, LLC 333,333 shares of common stock and in exchange, would be entitled to retain the first $80 million in revenues derived from the licensed patents royalty free, after which the Company would pay to NantWorks a 6% royalty on subsequent revenues. With the completion of the Nant Transaction, the term sheet was terminated.

CIPS Marketing Group Inc.

The California Properties utilize the services of CIPS Marketing Group, Inc. (“CIPS”) for local marketing efforts such as distribution, door-to-door marketing and total market coverage. Prior to the Company’s sale of its 50% interest in CIPS in July 2017, the investment was recorded as an equity investment, therefore income and expense recognized related to the marketing efforts are related party transactions. During the three and six months endedJune 25, 2017, the Company recorded $0.2 million and $0.5 million in revenue, respectively, from CIPS and $2.2 million and $3.8 million, respectively, in other operating expenses related to such marketing services. The CIPS revenue and marketing services expenses are included in discontinued operations.

forsalebyowner.com

On May 23, 2018, the Company sold substantially all of the assets of forsalebyowner.com in an asset sale for $2.5 million, plus an advertising sales commitment of $4.5 million over a term of two years.

The forsalebyowner.com balances are reflected as related to discontinued operations on the consolidated balance sheets for all periods presented and the results of operations are included in discontinued operations for all periods presented. In prior filings, forsalebyowner.com was part of the troncX segment.

Discontinued Operations

Earnings from discontinued operations through the respective transaction dates, included in the Consolidated Statements of Income are comprised of the following (in thousands):

	Three months ended						Six months ended
	July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Operating revenues	$	94,251		$	126,355		$	211,327		$	252,497
Operating expenses:
Compensation	25,065			34,722			58,763			71,479
Newsprint and ink	6,938			8,756			14,373			17,947
Outside services	30,075			34,353			61,650			68,168
Other operating expenses	26,804			33,280			56,541			65,401
Depreciation and amortization	1,328			1,674			2,960			4,156
Total operating expenses	90,210			112,785			194,287			227,151
Income from operations	4,041			13,570			17,040			25,346
Gain on sale	409,334			—			409,334			—
Interest expense, net	(23		)	(39		)	(53		)	(81		)
Loss on equity investments, net	—			139			—			349
Other income, net	613			150			1,338			300
Income tax expense	(133,420		)	(5,039		)	(132,914		)	(9,210		)
Income from discontinued operations, net of tax	$	280,545		$	8,781		$	294,745		$	16,704

Discontinued operations by segment are presented below (in thousands):

	Three months ended						Six months ended
	July 1, 2018			June 25, 2017			July 1, 2018		June 25, 2017
Operating revenues
troncM	$	81,631		$	107,559		$	185,836	$	215,149
troncX	12,570			18,762			25,429		37,274
Corporate and eliminations	50			34			62		74
	$	94,251		$	126,355		$	211,327	$	252,497
Income from Operations
troncM	$	(75	)	$	8,249		$	10,918	$	15,460
troncX	4,065			5,328			6,079		9,902
Corporate and eliminations	51			(7		)	43		(16		)
	$	4,041		$	13,570		$	17,040	$	25,346
Depreciation and amortization
troncM	$	1,289		$	1,607		$	2,856	$	4,029
troncX	39			67			104		127
	$	1,328		$	1,674		$	2,960	$	4,156

The following table presents the aggregate carrying amounts of assets and liabilities classified as held for sale in the Consolidated Balance Sheets (in thousands):

	July 1, 2018		December 31, 2017
Carrying amount of assets related to discontinued operations:
Accounts receivable, (net of allowances of $0 and $7,388)	$	—	$	51,200
All other current assets	—		10,576
Goodwill	—		73,207
Intangibles	—		63,397
Property, plant and equipment, net	—		12,550
Deferred income taxes	—		28,787
All other long term assets	—		438
Total assets related to discontinued operations	$	—	$	240,155
Carrying amount of liabilities associated with discontinued operations:
Accounts payable and employee compensation and benefits	$	—	$	27,293
Deferred revenue	—		26,039
Other current liabilities	—		7,062
Pensions and postretirement benefits payable	—		90,155
Insurance	—		26,200
Income taxes payable	107,624		—
Total liabilities associated with discontinued operations	$	107,624	$	176,749

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INVENTORIES

6 Months Ended

Jul. 01, 2018

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

Inventories consisted of the following (in thousands):

	As of
	July 1, 2018		December 31, 2017
Newsprint	$	10,692	$	7,072
Supplies and other	325		340
Total inventories	$	11,017	$	7,412

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

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GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Jul. 01, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets at July 1, 2018 and December 31, 2017, excluding assets related to discontinued operations, consisted of the following (in thousands):

	July 1, 2018							December 31, 2017
	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)	$	7,312	$	(4,231	)	$	3,081	$	7,312	$	(3,762	)	$	3,550
Advertiser relationships (useful life of 2 to 13 years)	26,348		(11,204		)	15,144		26,348		(10,013		)	16,335
Tradenames (useful life of 20 years)	15,100		(2,962		)	12,138		15,100		(2,583		)	12,517
Other (useful life of 1 to 20 years)	15,862		(2,406		)	13,456		5,379		(2,243		)	3,136
Total intangible assets subject to amortization	$	64,622	$	(20,803	)	43,819		$	54,139	$	(18,601	)	35,538
Software (useful life of 2 to 10 years)	$	133,670	$	(100,432	)	33,238		$	129,795	$	(90,218	)	39,577
Goodwill and other intangible assets not subject to amortization
Goodwill						138,201							48,700
Newspaper mastheads						36,706							29,458
Total goodwill and other intangible assets						$	251,964						$	153,273

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DEBT

6 Months Ended

Jul. 01, 2018

Debt Disclosure [Abstract]

DEBT

DEBT

During the quarter ended July 1, 2018, the Company used a portion of the proceeds received from the Nant Transaction to repay all the amounts outstanding under the Senior Term Facility and terminated the Senior ABL Facility.

Senior Term Facility

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 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. In 2015, $70 million of the expansion was drawn for the acquisition of The San Diego Union-Tribune.

The Term Loans bore interest at a variable interest rate based on either LIBOR or a base rate, in either case plus an applicable margin. The Term Loans amortized 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 Company was the borrower under the Senior Term Facility and each of the Company’s wholly-owned domestic subsidiaries, subject to certain exceptions (the “Subsidiary Guarantors”), guaranteed the payment obligations under the Senior Term Facility. The Senior Term Facility contained a number of covenants that, among other things, limited the ability of the 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. On June 21, 2018, the Company repaid the outstanding principal balance of $348.0 million under the Senior Term Facility and terminated the agreement. As a result of the early extinguishment of debt, the Company incurred a $7.7 million loss related to expensing the remaining balance of original issue discount and debt origination fees.

Senior ABL Facility

On August 4, 2014, the 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 was scheduled to mature on August 4, 2019. The Senior ABL Facility provided 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 was available for letters of credit and up to $15.0 million of availability under the Senior ABL Facility was available for swing line loans. The Senior ABL Facility also permitted the Company to increase the commitments under the Senior ABL Facility by up to $75.0 million. The Senior ABL Facility bore interest at a variable interest rate based on either LIBOR or a base rate, in either case plus an applicable margin. tronc, Inc. and the Subsidiary Guarantors were the borrowers under the Senior ABL Facility. tronc, Inc. and the Subsidiary Guarantors guaranteed the payment obligations under the Senior ABL Facility. The Senior ABL Facility contained a number of covenants that, among other things, limited the ability of tronc 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 were payable in respect of the Senior ABL Facility, including commitment fees of 0.25% and letter of credit fees. On June 21, 2018, the Company terminated the Senior ABL Facility. As a result of the Senior ABL Facility termination, the Company established $42.6 million of restricted cash to collateralize outstanding letters of credit previously secured by the Senior ABL Facility.

Capital Leases

The Company has capital leases on land and technology licenses. The total balance outstanding as of July 1, 2018 for capital leases was $7.5 million, of which $0.7 million is in short-term debt. The total balance as of December 31, 2017 for capital leases was $8.7 million, of which $0.8 million is in short-term debt.

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INCOME TAXES

6 Months Ended

Jul. 01, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

For the three and six months endedJuly 1, 2018, the Company recorded income tax expense of $3.8 million and an income tax benefit of $2.9 million, respectively. The effective tax rate on pretax income from continuing operations was (33.1%) and 6.3% in the three and six months endedJuly 1, 2018, respectively. The negative rate for three months ending July 1, 2018 resulted from the year-to-date true-up arising from the annual effective tax rate dropping from approximately 19% to 6%.  The annual effective tax rate decreased due to the increase in estimated taxable income due to the reduction of interest expense stemming from the debt extinguishment. For the three and six months endedJuly 1, 2018, the rate differs from the U.S. federal statutory rate of 21% primarily due to state income taxes, net of federal benefit, and nondeductible expenses. In the case of a pretax loss, the unfavorable permanent differences, such as non-deductible meals and entertainment expense, have the effect of decreasing the tax benefit which, in turn, decreases the effective tax rate.

For the three and six months endedJune 25, 2017, the Company recorded income tax benefit of $0.4 million and $2.3 million, respectively. The effective tax rate on pretax income from continuing operations was 17.2% and 15.1% in the three and six months endedJune 25, 2017, respectively. For the three and six months endedJune 25, 2017, the rate differs from the U.S. federal statutory rate of 35% primarily because the $6.0 million premium on stock buyback is a non-deductible permanent difference for the calculation of income taxes. The rate also differs due to state income taxes, net of federal benefit and nondeductible expenses and the domestic production activities deduction. In the case of a pretax loss, the unfavorable permanent differences, such as non-deductible meals and entertainment expense, have the effect of decreasing the tax benefit which, in turn, decreases the effective tax rate.

In the fourth quarter of 2017, the Company recorded an additional tax expense of $10.8 million that represents what it estimates is the impact of the enactment of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”).  The expense was based on currently available information and interpretations, which are continuing to evolve. As a result, the expense is considered provisional.  The Company continues to analyze additional information and guidance related to the Tax Act as supplemental legislation, regulatory guidance, or evolving technical interpretations become available, which could result in additional adjustments in future periods. Final calculations will be completed within the one-year measurement period ending December 22, 2018, as required under the rules issued by the SEC.

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PENSION AND OTHER POSTRETIREMENT BENEFITS

6 Months Ended

Jul. 01, 2018

Retirement Benefits [Abstract]

PENSION AND OTHER POSTRETIREMENT BENEFITS

PENSION AND OTHER POSTRETIREMENT BENEFITS

Multiemployer Pension Plans

The Company contributes to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover its union-represented employees.

Defined Benefit Plans

The Company was formerly the sponsor of the San Diego Union-Tribune, LLC Retirement Plan (the “San Diego Pension Plan”), which was divested in June 2018 as part of the Nant Transaction. The Company contributed $5.7 million to the San Diego Pension Plan during fiscal 2018 prior to the divestiture. Expenses related to the San Diego Pension Plan are included in discontinued operations.

The Company is the sponsor of a single-employer defined benefit plan, the Daily News Retirement Plan (the “NYDN Pension Plan”). The NYDN Pension Plan provides benefits to certain current and former employees of the New York Daily News. As of March 31, 2018, future benefits under the NYDN Pension Plan were frozen and no new participants are permitted after that time. The Company contributed $0.5 million to the NYDN Pension Plan in the six months ended July 1, 2018. The Company expects to contribute $3.4 million to the NYDN Pension Plan during the remainder of 2018. The components of net periodic benefit for the NYDN Pension Plan are as follows (in thousands):

	Three Months Ended					Six Months Ended					Affected Line Items in the Consolidated Statements of Income (Loss)
	July 1, 2018			June 25, 2017		July 1, 2018			June 25, 2017
Service cost	$	(8	)	$	—	$	72		$	—	Compensation
Interest cost	825			—		1,636			—		Other income, net
Expected return on assets	(1,165		)	—		(2,333		)	—		Other income, net
Net periodic benefit	$	(348	)	$	—	$	(625	)	$	—

Postretirement Benefits Other Than Pensions

The Company provides postretirement health care to retirees pursuant to a number of benefit plans. The plans are frozen for new non-union 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 credit for the Company’s postretirement health care and life insurance plans were as follows (in thousands):

	Three Months Ended						Six Months Ended						Affected Line Items in the Consolidated Statements of Income (Loss)
	July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Service cost	$	4		$	3		$	7		$	6		Compensation
Interest cost	8			55			17			110			Other income, net
Amortization of prior service credits	(2,634		)	(292		)	(5,267		)	(584		)	Other income, net
Amortization of actuarial gains	(657		)	(47		)	(1,315		)	(93		)	Other income, net
Net periodic benefit	$	(3,279	)	$	(281	)	$	(6,558	)	$	(561	)

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NONCONTROLLING INTERESTS

6 Months Ended

Jul. 01, 2018

Noncontrolling Interest [Abstract]

NONCONTROLLING INTERESTS

NONCONTROLLING INTEREST

Noncontrolling interest represents the 40% membership interest in BestReviews not owned by the Company and is presented between liabilities and stockholders’ equity within the Company’s consolidated balance sheet because the Put Option described in Note 5 could, upon exercise, require the Company, under certain circumstances, to pay cash to purchase the noncontrolling interest. Each quarter, the carrying value of noncontrolling interest is adjusted to the amount the Company would be required to pay the noncontrolling interest holders as if the Put Option had been exercised as of the balance sheet date, with an offsetting adjustment to stockholders’ equity. Adjustments to increase (decrease) the carrying value of noncontrolling interest also reduce (increase) the amount of net income or loss attributable to tronc common stockholders for purposes of determining both basic and diluted earnings per share.

A summary of the activity with respect to non-controlling interest for the six months ended July 1, 2018 is as follows (in thousands):

Balance at December 31, 2017	$	—
Acquisition of BestReviews	40,900
Income attributable to noncontrolling interest	710
Balance at July 1, 2018	$	41,610

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EARNINGS PER SHARE

6 Months Ended

Jul. 01, 2018

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

Basic earnings per common share is calculated by dividing net income attributable to tronc 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. In accordance with ASC 260-10-55, net loss from continuing operations is the control number in determining whether potential common shares are dilutive. Since there is loss from continuing operations, all potential common shares are considered anti-dilutive.

For the three and six months endedJuly 1, 2018 and June 25, 2017, basic and diluted earnings per common share were as follows (in thousands, except per share amounts):

	Three Months Ended						Six Months Ended
	July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Income (Loss) - Numerator:
Loss from continuing operations	$	(15,101	)	$	(1,940	)	$	(43,813	)	$	(12,852	)
Less: Net income from continuing operations attributable to noncontrolling interest	448			—			710			—
Income available to common shareholders, before discontinued operations	(15,549		)	(1,940		)	(44,523		)	(12,852		)
Income from discontinued operations	280,545			8,781			294,745			16,704
Net income available to tronc stockholders	$	264,996		$	6,841		$	250,222		$	3,852
Shares - Denominator:
Weighted average number of common shares outstanding (basic)	35,288			32,825			35,045			34,566
Dilutive effect of employee stock options and RSUs	—			—			—			—
Adjusted weighted average shares outstanding (diluted)	35,288			32,825			35,045			34,566
Net income (loss) attributable to tronc per common share:
Continuing operations	$	(0.44	)	$	(0.06	)	$	(1.27	)	$	(0.37	)
Discontinued operations	7.95			0.27			8.41			0.48
Net income per common share	$	7.51		$	0.21		$	7.14		$	0.11
Diluted income (loss) per common share:
Continuing operations	$	(0.44	)	$	(0.06	)	$	(1.27	)	$	(0.37	)
Discontinued operations	7.95			0.27			8.41			0.48
Net income per common share-diluted	$	7.51		$	0.21		$	7.14		$	0.11

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 924,887 and 973,637 for the three and six months endedJuly 1, 2018, respectively. 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 836,843 and 883,359 for the three and six months endedJune 25, 2017, respectively.

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 1,821,836 and 1,874,250 for the three and six months endedJuly 1, 2018, respectively. 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 558,761 and 297,592 for the three and six months endedJune 25, 2017, respectively.

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STOCKHOLDERS' EQUITY

6 Months Ended

Jul. 01, 2018

Equity [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ EQUITY

Stock Repurchases

On March 23, 2017, the Company entered into a purchase agreement with investment funds associated with Oaktree Capital Management, L.P. (“Oaktree”), pursuant to which the Company acquired 3,745,947 shares of the Company’s common stock for $15.00 per share or a total purchase price of $56.2 million. The purchase agreement contained a “standstill” covenant prohibiting Oaktree from acquiring, directly or indirectly, any of the Company’s common stock, soliciting proxies to vote shares of the Company’s common stock or taking certain actions with respect to any business combination, asset acquisition or disposition or similar transaction involving the Company through March 22, 2019 (the “Standstill Period”). The parties also agreed to a mutual non-disparagement covenant applicable during the Standstill Period and to a mutual release of claims. On March 22, 2017, the Company’s stock price closed at $13.39. The $6.0 million difference between the aggregate purchase price and the fair value of the acquired stock at the transaction date was expensed as a premium on stock buyback in the Consolidated Statements of Income (Loss).

Significant Shareholders

Merrick Media, LLC

On March 23, 2017, the Company entered into Amendment No. 1 (the “Amendment”) to the Securities Purchase Agreement dated February 3, 2016 among the Company, Merrick Media, LLC (“Merrick Media”) and Michael W. Ferro, Jr., the Company’s non-executive Chairman of the Board at the time the agreement was signed. The Amendment increased from 25% to 30% the maximum percentage of the Company’s outstanding shares of common stock that Merrick Media and its affiliates may acquire.

Mr. Ferro is the manager of Merrick Venture Management, LLC, which is the sole manager of Merrick Media. Because Merrick Venture Management, LLC serves as the sole manager of Merrick Media, Mr. Ferro may be deemed to indirectly control all of the shares of the Company’s common stock owned by Merrick Media. Mr. Ferro, together with his affiliated entities, beneficially owned 9,071,529 shares of tronc common stock, which represented 25.7% of tronc common stock as of July 1, 2018. On April 13, 2018, Mr. Ferro, Merrick Media, LLC and Merrick Ventures Management, LLC entered into an agreement to sell all of their shares in the Company to an unrelated third party. This agreement was subsequently canceled during the second fiscal quarter of 2018.

Nant Capital, LLC

Dr. Patrick Soon-Shiong, a former director of the Company, together with Nant Capital, LLC (“Nant Capital”), beneficially own 8,743,619 shares of tronc common stock, which represented 24.8% of the outstanding shares of tronc common stock as of July 1, 2018. California Capital Equity, LLC (“CalCap”) directly owns all of the equity interests of Nant Capital, and CalCap may be deemed to have beneficial ownership of the shares held by Nant Capital. Dr. Soon-Shiong directly owns all of the equity interests of CalCap and may be deemed to beneficially own, and share voting power and investment power with Nant Capital over all shares of tronc common stock beneficially owned by Nant Capital. Under the Securities Purchase Agreement dated May 22, 2016, among the Company, Nant Capital and Dr. Patrick Soon-Shiong (“Nant Purchase Agreement”), Nant Capital and Dr. Soon-Shiong and their respective affiliates are prohibited, without the prior written approval of the Board of Directors, from acquiring additional equity of the Company if the acquisition could result in their beneficial ownership of more than 25% of the Company’s then-outstanding shares of common stock. The Nant Purchase Agreement also includes covenants prohibiting the transfer of shares of the Company’s common stock if the transfer would result in a person beneficially owning more than 4.9% of the Company’s then-outstanding shares of common stock following the transfer, as well as transfers to a material competitor of the Company in any of the Company’s then-existing primary geographical markets.

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

6 Months Ended

Jul. 01, 2018

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table sets forth the components of accumulated other comprehensive income (loss), net of tax, where applicable (in thousands):

	Foreign Currency			OPEB			Pension			Total
Balance at December 31, 2017	$	(31	)	$	9,932		$	(23,428	)	$	(13,527	)
Amounts reclassified from AOCI	—			(4,752		)	—			(4,752		)
Foreign currency translation adjustments	(5		)	—			—			(5		)
AOCI recognized in discontinued operations	—			—			25,397			25,397
Balance at July 1, 2018	$	(36	)	$	5,180		$	1,969		$	7,113

The following table presents the amounts and line items in the Consolidated Statements of Income where adjustments reclassified from accumulated other comprehensive income (loss) were recorded during the three and six months endedJuly 1, 2018 and June 25, 2017 (in thousands):

	Three Months Ended						Six months ended
	July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017			Affected Line Items in the Consolidated Statements of Income (Loss)
Accumulated Other Comprehensive Income (Loss) Components
Pension and postretirement benefit adjustments:
Amortization of prior service credits	$	(2,634	)	$	(292	)	$	(5,267	)	$	(584	)	Other income, net
Amortization of actuarial gains	(657		)	(47		)	(1,315		)	(93		)	Other income, net
Total before taxes	(3,291		)	(339		)	(6,582		)	(677		)
Tax effect	(915		)	(133		)	(1,830		)	(267		)	Income tax expense (benefit)
Total reclassifications for the period	$	(2,376	)	$	(206	)	$	(4,752	)	$	(410	)

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CONTINGENCIES

6 Months Ended

Jul. 01, 2018

Commitments and Contingencies Disclosure [Abstract]

CONTINGENCIES

CONTINGENCIES

Legal Proceedings

The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business. The legal entities comprising our operations are defendants from time to time in actions for matters arising out of their business operations. In addition, the legal entities comprising our operations are involved from time to time as parties in various regulatory, environmental and other proceedings with governmental authorities and administrative agencies.

Tribune Company Bankruptcy

On December 31, 2012, Tribune Media Company, formerly Tribune Company (“TCO”) and 110 of its direct and indirect wholly-owned subsidiaries that had filed voluntary petitions for relief under Chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware on December 8, 2008 (or on October 12, 2009, in the case of Tribune CNLBC, LLC) emerged from Chapter 11. Certain of the legal entities included in the Consolidated Financial Statements of tronc were Debtors or, as a result of the restructuring transactions undertaken at the time of the Debtors’ emergence, are successor legal entities to legal entities that were Debtors (“tronc Debtors”).

Notices of appeal of the Bankruptcy Court’s order confirming the Plan (the “Confirmation Order”) were filed by (i) Aurelius Capital Management L.P. on behalf of its managed entities that were holders of TCO’s senior notes and Exchangeable Subordinated Debentures due 2029 (“PHONES”), (ii) Law Debenture Trust Company of New York (“Law Debenture”) and Deutsche Bank Trust Company Americas (“Deutsche Bank”), each successor trustees under the respective indentures for TCO’s senior notes; (iii) Wilmington Trust Company, as successor indenture trustee for the PHONES, and (iv) EGI-TRB, L.L.C., a Delaware limited liability company wholly-owned by Sam Investment Trust (a trust established for the benefit of Samuel Zell and his family) (the “Zell Entity”). The appellants sought, among other relief, to overturn the Confirmation Order and certain prior orders of the Bankruptcy Court embodied in the Plan, including the settlement of certain claims and causes of action related to a series of transactions consummated by TCO, the TCO employee stock ownership plan, the Zell Entity and Samuel Zell in 2007. Each of the Confirmation Order appeals have been dismissed or otherwise resolved by a final order, with the exception of the appeals of Law Debenture and Deutsche Bank, which remain pending before the U. S. District Court for the District of Delaware. There is no stay of the Confirmation Order in place pending resolution of the confirmation related appeals.

The Bankruptcy Court has entered final decrees collectively closing 106 of the Debtors’ Chapter 11 cases, including the last one of the tronc Debtors’ cases. The remaining Chapter 11 cases relate to Debtors and successor legal entities that are subsidiaries of TCO. These cases have not yet been closed by the Bankruptcy Court, and certain claims asserted against various of the Debtors (including certain of the tronc Debtors) in the Chapter 11 cases remain unresolved. The remaining Chapter 11 cases continue to be administered under the caption “In re: Tribune Media Company, et al.,” Case No 08-13141.

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SEGMENT INFORMATION

6 Months Ended

Jul. 01, 2018

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Company’s business segments are based on the organization structure used by management for making operating and investment decisions and for assessing performance. Beginning in the second quarter of fiscal 2016, the operating segments consist of troncM and troncX. troncM is comprised of the Company’s media groups excluding their digital revenues and related digital expenses, except digital subscription revenues when bundled with a print subscription. troncX includes the Company’s digital revenues and related digital expenses from local tronc websites, third party websites, mobile applications, digital only subscriptions, TCA, and BestReviews. The Company determined that the disposition of the California Properties and forsalebyowner.com did not result in changes to the Company’s segments. Assets are not presented to or used by management at a segment level for making operating and investment decisions and therefore are not reported.

The Company measures segment profit using income from operations, which is defined as income from operations before net interest expense, gain on investment transactions, reorganization items and income taxes.

As discussed in Note 2, the Company adopted ASU 2014-09, Topic 606, Revenue from Contracts with Customers effective January 1, 2018,using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results of operations for periods after January 1, 2018 reflect the changes under ASU 2014-09. Results of operations for periods before January 1, 2018, continue to be reported under guidance in effect at that time.

Disaggregated operating revenues and income (loss) from continuing operations by operating segment for the three months ended July 1, 2018 and June 25, 2017, respectively, were as follows for the periods indicated (in thousands):

	Three Months Ended
	tronc M				troncX				Corporate and Eliminations						Consolidated
	(Print)				(Digital)
	July 1, 2018		June 25, 2017		July 1, 2018		June 25, 2017		July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Advertising	$	87,800	$	93,285	$	23,987	$	31,577	$	—		$	(37	)	$	111,787		$	124,825
Circulation	88,616		73,978		4,172		2,230		—			—			92,788			76,208
Commercial print and delivery	25,784		24,600		—		—		—			—			25,784			24,600
Direct mail	8,025		9,214		—		—		—			—			8,025			9,214
Content syndication and other	2,072		3,801		11,982		5,673		599			(886		)	14,653			8,588
Other	35,881		37,615		11,982		5,673		599			(886		)	48,462			42,402
Operating revenues	212,297		204,878		40,141		39,480		599			(923		)	253,037			243,435
Operating expenses	204,410		191,803		36,691		36,403		13,181			10,767			254,282			238,973
Income (loss) from operations	$	7,887	$	13,075	$	3,450	$	3,077	$	(12,582	)	$	(11,690	)	(1,245		)	4,462
Interest expense															(5,412		)	(6,365		)
Loss on early extinguishment of debt															(7,666		)	—
Loss on investments, net															(665		)	(723		)
Other income, net															3,640			284
Loss from continuing operations before income taxes															$	(11,348	)	$	(2,342	)
Depreciation and amortization	$	3,990	$	5,281	$	4,505	$	3,512	$	4,447		$	4,194		$	12,942		$	12,987

Disaggregated operating revenues and income (loss) from continuing operations by operating segment for the six months ended July 1, 2018 and June 25, 2017, respectively, were as follows for the periods indicated (in thousands):

	Six Months Ended
	tronc M				troncX				Corporate and Eliminations						Consolidated
	(Print)				(Digital)
	July 1, 2018		June 25, 2017		July 1, 2018		June 25, 2017		July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Advertising	$	170,542	$	184,084	$	46,037	$	60,493	$	—		$	(131	)	$	216,579		$	244,446
Circulation	173,242		149,011		7,681		4,283		—			—			180,923			153,294
Commercial print and delivery	52,789		51,173		—		—		—			—			52,789			51,173
Direct mail	15,628		17,800		—		—		—			—			15,628			17,800
Content syndication and other	4,307		6,733		21,567		11,631		(217		)	(1,667		)	25,657			16,697
Other	72,724		75,706		21,567		11,631		(217		)	(1,667		)	94,074			85,670
Operating revenues	416,508		408,801		75,285		76,407		(217		)	(1,798		)	491,576			483,410
Operating expenses	408,821		383,618		72,453		73,755		43,308			21,284			524,582			478,657
Income (loss) from operations	$	7,687	$	25,183	$	2,832	$	2,652	$	(43,525	)	$	(23,082	)	(33,006		)	4,753
Interest expense															(11,976		)	(12,800		)
Loss on early extinguishment of debt															(7,666		)	—
Premium on stock buyback															—			(6,031		)
Loss on investments, net															(1,394		)	(1,621		)
Other income, net															7,303			567
Loss from continuing operations before income taxes															$	(46,739	)	$	(15,132	)
Depreciation and amortization	$	7,962	$	8,565	$	9,120	$	6,689	$	8,943		$	8,428		$	25,959		$	23,682

The operating revenues and operating results from continuing operations presented above are not necessarily indicative of the results that may be expected for the full fiscal year.

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SUPPLEMENTAL CASH FLOW INFORMATION

6 Months Ended

Jul. 01, 2018

Supplemental Cash Flow Elements [Abstract]

SUPPLEMENTAL CASH FLOW INFORMATION

SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information for each of the periods presented is as follows (in thousands):

	Six months ended
	July 1, 2018		June 25, 2017
Cash paid during the period for:
Interest	$	10,489	$	11,325
Income taxes, net of refunds	3,967		113
Non-cash items in financing activities:
Issuance of stock from treasury for acquisition	34,595		—

The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported within the Consolidated Condensed Balance Sheet that sum to the cash, cash equivalents and restricted cash as reported in the Consolidated Statement of Cash Flows:

	As of		As of
	July 1, 2018		December 31, 2017
Cash and cash equivalents	$	214,544	$	185,351
Restricted cash included in other assets	42,600		—
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	257,144	$	185,351

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies)

6 Months Ended

Jul. 01, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Fiscal Periods

Fiscal Periods—The Company’s fiscal year ends on the last Sunday in December. Fiscal year 2018 ends on December 30, 2018 and fiscal year 2017 ended on December 31, 2017. Fiscal year 2018 is a 52-week year with 13 weeks in each quarter. Fiscal year 2017 was a 53-week year with 13 weeks in the first through third quarters and 14 weeks in the fourth quarter.

Basis of Presentation

Basis of Presentation—The accompanying unaudited Consolidated Financial Statements and notes of the Company 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 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 tronc as of July 1, 2018 and December 31, 2017 and the results of operations for the three and six months endedJuly 1, 2018 and June 25, 2017, respectively, and the cash flows for the six months ended July 1, 2018 and June 25, 2017, respectively. This includes all normal and recurring adjustments and elimination of intercompany transactions. Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The year-end Consolidated Balance Sheet was derived from audited financial statements but does not include all disclosures required by U.S. GAAP.

Effective as of the sale dates, the operations of the California Properties and forsalebyowner.com qualify as discontinued operations. Accordingly, operations for all periods presented have been reflected as discontinued operations in the accompanying Consolidated Statements of Income and Consolidated Statements of Cash Flows. Additionally, assets and liabilities related to the divested properties are classified as such in all prior periods in the Consolidated Condensed Balance Sheets. Unless otherwise noted, amounts and disclosures throughout these Notes to Consolidated Financial Statements relate to continuing operations and exclude all discontinued operations including the California Properties and forsalebyowner.com.

The Company assesses its operating segments in accordance with ASC Topic 280, “Segment Reporting.” The Company is managed by its chief operating decision maker, as defined by ASC Topic 280, in two reportable segments, troncM and troncX. troncM is comprised of the Company’s media groups excluding their digital revenues and related digital expenses, except digital subscription revenues when bundled with a print subscription. troncX includes the Company’s digital revenues and related digital expenses from local tronc websites, third party websites, mobile applications, digital-only subscriptions, BestReviews and Tribune Content Agency (“TCA”). See Note 17 for additional segment information.

New Accounting Standards

New Accounting Standards—In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-02, Topic 220, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The ASU amends ASC 220, Income Statement — Reporting Comprehensive Income, to “allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.” In addition, under the ASU, an entity will be required to provide certain disclosures regarding stranded tax effects. The ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company is currently evaluating how the adoption of this standard will impact the Company’s consolidated financial statements.

In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-07, Topic 715, Compensation - Retirement Benefits; Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ASU 2017-07 requires the disaggregation of the service cost component from other components of net periodic benefit cost, clarifies how to present the service cost component and other components of net benefit costs in the financial statements and allows only the service cost component of net benefit costs to be eligible for capitalization. The Company adopted the standard on January 1, 2018 and has applied the standard on a retrospective basis. Accordingly, prior period amounts have been adjusted. Adoption of the standard had no effect on the Company’s overall results of operations. The disclosures required by the standard can be found in Note 11.

In January 2017, the FASB issued ASU 2017-04, Topic 350, Intangibles-Goodwill and Other; Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test thereby standardizing the impairment assessment to measure a reporting unit’s carrying value against its fair value and eliminate the calculation of an implied fair value of goodwill. ASU 2017-04 is effective for interim and annual reporting periods beginning after December 15, 2019 and should be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating how the adoption of this standard will impact the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Topic 805, Clarifying the Definition of a Business, which establishes criteria to determine when an integrated set of assets and activities is not a business. ASU 2017-01 is effective for interim and annual reporting periods beginning after December 15, 2017 and should be applied prospectively. The Company adopted the standard effective January 1, 2018 and will apply the standard to acquisitions or dispositions after that date.

In November 2016, the FASB issued ASU 2016-18, Topic 230, Statement of Cash Flows, which clarifies how companies present and classify restricted cash in the statement of cash flows. ASU 2016-18 is effective for interim and annual reporting periods beginning after December 15, 2017. The guidance is required to be applied on a retrospective basis. The Company adopted the standard effective January 1, 2018. The adoption had no retrospective effect on the Company’s consolidated financial statements as the Company had no restricted cash during 2017 or the first quarter of 2018. However, beginning the in the second quarter of 2018, the Company has restricted cash and the restricted cash balances are included in the beginning and ending cash balances in the statements of cash flows and Note 18 provides a reconciliation between cash balances presented on the balance sheets with the amounts presented in the statements of cash flows.

In August 2016, the FASB issued ASU 2016-15, Topic 230, Statement of Cash Flows, which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. ASU 2016-15 is effective for interim and annual reporting periods beginning after December 15, 2017. The guidance is required to be applied on a retrospective basis. The Company adopted the standard effective January 1, 2018. The adoption had no effect on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Topic 842, Leases, which requires lessees to recognize lease assets and lease liabilities for operating leases. The Company expects to adopt this standard in the first quarter of 2019 using the transition option whereby companies may initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has initiated efforts to assess the impact of this new standard on the Company’s future reported results and operating and accounting processes and systems. The Company expects to elect the practical expedients which allow the Company to forgo reassessing whether existing contracts are or contain leases, forgo reassessing the classification of existing leases and forgo reassessing initial direct costs of existing leases at the initial application date.

In May 2014, the FASB issued ASU 2014-09, Topic 606, Revenue from Contracts with Customers and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016, May 2016, and December 2016 within ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20, respectively. 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. On January 1, 2018, the Company adopted ASU 2014-09 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results of operations for periods after January 1, 2018 reflect the changes under ASU 2014-09. Results of operations for periods before January 1, 2018, continue to be reported under guidance in effect at that time. The adoption did not have a material effect on the Company’s consolidated financial statements. See Note 2 for disclosures as a result of the adoption.

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services. Revenues are recognized as performance obligations that are satisfied at either a point in time, such as when an advertisement is published, or over time, such as content licensing.

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CHANGES IN OPERATIONS (Tables)

6 Months Ended

Jul. 01, 2018

Restructuring and Related Activities [Abstract]

Summary of lease abandonment accrual activity

A summary of the activity with respect to the Company’s severance accrual for the six months ended July 1, 2018 is as follows (in thousands):

Balance at December 31, 2017	$	11,532
Provision	10,691
Payments	(12,681		)
Balance at July 1, 2018	$	9,542

A summary of the activity with respect to the Company’s lease abandonment accrual for the six months ended July 1, 2018 is as follows (in thousands):

Balance at December 31, 2017	$	3,127
Provision	33
Payments and other	(1,977		)
Balance at July 1, 2018	$	1,183

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ACQUISITIONS (Tables)

6 Months Ended

Jul. 01, 2018

Business Combinations [Abstract]

Schedule of Business Acquisitions by Acquisition

The allocation of the purchase price presented below is based upon management’s preliminary estimates. The Company has engaged a valuation firm to assist with the valuation of intangible assets and noncontrolling interest; however, such valuation is not complete as of the filing date of this report. The preliminary allocation of the purchase price is as follows (in thousands):

Consideration
Cash consideration for acquisition	$	33,693
Fair value of noncontrolling interest	40,900
Value of shares issued for acquisition	34,595
Total consideration	$	109,188
Allocated Fair Value of Acquired Assets and Assumed Liabilities
Accounts receivable and other current assets	$	9,966
Property, plant and equipment	36
Intangible assets	12,540
Accounts payable and other current liabilities	(993		)
Total identifiable assets (liabilities), net	21,549
Goodwill	87,639
Total net assets acquired	$	109,188

Allocated Fair Value of Acquired Assets and Assumed Liabilities
Cash acquired as part of the purchase	$	2,555
Accounts receivable and other current assets	18,532
Property, plant and equipment, including assets under capital leases	47,972
Mastheads	3,400
Other long-term assets	10,448
Accounts payable and other current liabilities	(20,973		)
Pension and postemployment benefits liability	(25,446		)
Workers compensation and auto insurance liability	(25,999		)
Other long-term liabilities	(10,489		)
Total net assets acquired	$	—

The preliminary allocation of the purchase price is as follows (in thousands):

Consideration
Cash consideration for acquisition	$	34,004
Total consideration	$	34,004
Allocated Fair Value of Acquired Assets and Assumed Liabilities
Accounts receivable and other current assets	$	7,028
Property, plant and equipment	30,485
Mastheads	4,700
Accounts payable and other current liabilities	(9,918		)
Other long term obligations	(68		)
Total identifiable assets (liabilities), net	32,227
Goodwill	1,777
Total net assets acquired	$	34,004

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DISPOSITIONS AND DISCONTINUED OPERATIONS (Tables)

6 Months Ended

Jul. 01, 2018

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations [Table Text Block]

Earnings from discontinued operations through the respective transaction dates, included in the Consolidated Statements of Income are comprised of the following (in thousands):

	Three months ended						Six months ended
	July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Operating revenues	$	94,251		$	126,355		$	211,327		$	252,497
Operating expenses:
Compensation	25,065			34,722			58,763			71,479
Newsprint and ink	6,938			8,756			14,373			17,947
Outside services	30,075			34,353			61,650			68,168
Other operating expenses	26,804			33,280			56,541			65,401
Depreciation and amortization	1,328			1,674			2,960			4,156
Total operating expenses	90,210			112,785			194,287			227,151
Income from operations	4,041			13,570			17,040			25,346
Gain on sale	409,334			—			409,334			—
Interest expense, net	(23		)	(39		)	(53		)	(81		)
Loss on equity investments, net	—			139			—			349
Other income, net	613			150			1,338			300
Income tax expense	(133,420		)	(5,039		)	(132,914		)	(9,210		)
Income from discontinued operations, net of tax	$	280,545		$	8,781		$	294,745		$	16,704

Discontinued operations by segment are presented below (in thousands):

	Three months ended						Six months ended
	July 1, 2018			June 25, 2017			July 1, 2018		June 25, 2017
Operating revenues
troncM	$	81,631		$	107,559		$	185,836	$	215,149
troncX	12,570			18,762			25,429		37,274
Corporate and eliminations	50			34			62		74
	$	94,251		$	126,355		$	211,327	$	252,497
Income from Operations
troncM	$	(75	)	$	8,249		$	10,918	$	15,460
troncX	4,065			5,328			6,079		9,902
Corporate and eliminations	51			(7		)	43		(16		)
	$	4,041		$	13,570		$	17,040	$	25,346
Depreciation and amortization
troncM	$	1,289		$	1,607		$	2,856	$	4,029
troncX	39			67			104		127
	$	1,328		$	1,674		$	2,960	$	4,156

Aggregate Carrying Amounts of Assets and Liabilities Held for Sale

The following table presents the aggregate carrying amounts of assets and liabilities classified as held for sale in the Consolidated Balance Sheets (in thousands):

	July 1, 2018		December 31, 2017
Carrying amount of assets related to discontinued operations:
Accounts receivable, (net of allowances of $0 and $7,388)	$	—	$	51,200
All other current assets	—		10,576
Goodwill	—		73,207
Intangibles	—		63,397
Property, plant and equipment, net	—		12,550
Deferred income taxes	—		28,787
All other long term assets	—		438
Total assets related to discontinued operations	$	—	$	240,155
Carrying amount of liabilities associated with discontinued operations:
Accounts payable and employee compensation and benefits	$	—	$	27,293
Deferred revenue	—		26,039
Other current liabilities	—		7,062
Pensions and postretirement benefits payable	—		90,155
Insurance	—		26,200
Income taxes payable	107,624		—
Total liabilities associated with discontinued operations	$	107,624	$	176,749

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INVENTORIES (Tables)

6 Months Ended

Jul. 01, 2018

Inventory Disclosure [Abstract]

Schedule of inventory

Inventories consisted of the following (in thousands):

	As of
	July 1, 2018		December 31, 2017
Newsprint	$	10,692	$	7,072
Supplies and other	325		340
Total inventories	$	11,017	$	7,412

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

6 Months Ended

Jul. 01, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of goodwill, other intangible assets

Goodwill and other intangible assets at July 1, 2018 and December 31, 2017, excluding assets related to discontinued operations, consisted of the following (in thousands):

	July 1, 2018							December 31, 2017
	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)	$	7,312	$	(4,231	)	$	3,081	$	7,312	$	(3,762	)	$	3,550
Advertiser relationships (useful life of 2 to 13 years)	26,348		(11,204		)	15,144		26,348		(10,013		)	16,335
Tradenames (useful life of 20 years)	15,100		(2,962		)	12,138		15,100		(2,583		)	12,517
Other (useful life of 1 to 20 years)	15,862		(2,406		)	13,456		5,379		(2,243		)	3,136
Total intangible assets subject to amortization	$	64,622	$	(20,803	)	43,819		$	54,139	$	(18,601	)	35,538
Software (useful life of 2 to 10 years)	$	133,670	$	(100,432	)	33,238		$	129,795	$	(90,218	)	39,577
Goodwill and other intangible assets not subject to amortization
Goodwill						138,201							48,700
Newspaper mastheads						36,706							29,458
Total goodwill and other intangible assets						$	251,964						$	153,273

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PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables)

6 Months Ended

Jul. 01, 2018

Retirement Benefits [Abstract]

Schedule of defined benefit plans net periodic benefit credit

The components of net periodic benefit for the NYDN Pension Plan are as follows (in thousands):

	Three Months Ended					Six Months Ended					Affected Line Items in the Consolidated Statements of Income (Loss)
	July 1, 2018			June 25, 2017		July 1, 2018			June 25, 2017
Service cost	$	(8	)	$	—	$	72		$	—	Compensation
Interest cost	825			—		1,636			—		Other income, net
Expected return on assets	(1,165		)	—		(2,333		)	—		Other income, net
Net periodic benefit	$	(348	)	$	—	$	(625	)	$	—

Schedule of components of net periodic benefit cost

The components of net periodic benefit credit for the Company’s postretirement health care and life insurance plans were as follows (in thousands):

	Three Months Ended						Six Months Ended						Affected Line Items in the Consolidated Statements of Income (Loss)
	July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Service cost	$	4		$	3		$	7		$	6		Compensation
Interest cost	8			55			17			110			Other income, net
Amortization of prior service credits	(2,634		)	(292		)	(5,267		)	(584		)	Other income, net
Amortization of actuarial gains	(657		)	(47		)	(1,315		)	(93		)	Other income, net
Net periodic benefit	$	(3,279	)	$	(281	)	$	(6,558	)	$	(561	)

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NONCONTROLLING INTERESTS (Tables)

6 Months Ended

Jul. 01, 2018

Noncontrolling Interest [Abstract]

Noncontrolling Interest Activity

A summary of the activity with respect to non-controlling interest for the six months ended July 1, 2018 is as follows (in thousands):

Balance at December 31, 2017	$	—
Acquisition of BestReviews	40,900
Income attributable to noncontrolling interest	710
Balance at July 1, 2018	$	41,610

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EARNINGS PER SHARE (Tables)

6 Months Ended

Jul. 01, 2018

Earnings Per Share [Abstract]

Schedule of basic and diluted earnings per common share

For the three and six months endedJuly 1, 2018 and June 25, 2017, basic and diluted earnings per common share were as follows (in thousands, except per share amounts):

	Three Months Ended						Six Months Ended
	July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Income (Loss) - Numerator:
Loss from continuing operations	$	(15,101	)	$	(1,940	)	$	(43,813	)	$	(12,852	)
Less: Net income from continuing operations attributable to noncontrolling interest	448			—			710			—
Income available to common shareholders, before discontinued operations	(15,549		)	(1,940		)	(44,523		)	(12,852		)
Income from discontinued operations	280,545			8,781			294,745			16,704
Net income available to tronc stockholders	$	264,996		$	6,841		$	250,222		$	3,852
Shares - Denominator:
Weighted average number of common shares outstanding (basic)	35,288			32,825			35,045			34,566
Dilutive effect of employee stock options and RSUs	—			—			—			—
Adjusted weighted average shares outstanding (diluted)	35,288			32,825			35,045			34,566
Net income (loss) attributable to tronc per common share:
Continuing operations	$	(0.44	)	$	(0.06	)	$	(1.27	)	$	(0.37	)
Discontinued operations	7.95			0.27			8.41			0.48
Net income per common share	$	7.51		$	0.21		$	7.14		$	0.11
Diluted income (loss) per common share:
Continuing operations	$	(0.44	)	$	(0.06	)	$	(1.27	)	$	(0.37	)
Discontinued operations	7.95			0.27			8.41			0.48
Net income per common share-diluted	$	7.51		$	0.21		$	7.14		$	0.11

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

6 Months Ended

Jul. 01, 2018

Equity [Abstract]

Schedule of components of accumulated other comprehensive income (loss), net of tax

The following table sets forth the components of accumulated other comprehensive income (loss), net of tax, where applicable (in thousands):

	Foreign Currency			OPEB			Pension			Total
Balance at December 31, 2017	$	(31	)	$	9,932		$	(23,428	)	$	(13,527	)
Amounts reclassified from AOCI	—			(4,752		)	—			(4,752		)
Foreign currency translation adjustments	(5		)	—			—			(5		)
AOCI recognized in discontinued operations	—			—			25,397			25,397
Balance at July 1, 2018	$	(36	)	$	5,180		$	1,969		$	7,113

Schedule of reclassification out of accumulated other comprehensive income (loss)

The following table presents the amounts and line items in the Consolidated Statements of Income where adjustments reclassified from accumulated other comprehensive income (loss) were recorded during the three and six months endedJuly 1, 2018 and June 25, 2017 (in thousands):

	Three Months Ended						Six months ended
	July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017			Affected Line Items in the Consolidated Statements of Income (Loss)
Accumulated Other Comprehensive Income (Loss) Components
Pension and postretirement benefit adjustments:
Amortization of prior service credits	$	(2,634	)	$	(292	)	$	(5,267	)	$	(584	)	Other income, net
Amortization of actuarial gains	(657		)	(47		)	(1,315		)	(93		)	Other income, net
Total before taxes	(3,291		)	(339		)	(6,582		)	(677		)
Tax effect	(915		)	(133		)	(1,830		)	(267		)	Income tax expense (benefit)
Total reclassifications for the period	$	(2,376	)	$	(206	)	$	(4,752	)	$	(410	)

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SEGMENT INFORMATION (Tables)

6 Months Ended

Jul. 01, 2018

Segment Reporting [Abstract]

Operating revenue and income (loss) from operations by operating segment

perating revenues and income (loss) from continuing operations by operating segment for the three months ended July 1, 2018 and June 25, 2017, respectively, were as follows for the periods indicated (in thousands):

	Three Months Ended
	tronc M				troncX				Corporate and Eliminations						Consolidated
	(Print)				(Digital)
	July 1, 2018		June 25, 2017		July 1, 2018		June 25, 2017		July 1, 2018			June 25, 2017			July 1, 2018			June 25, 2017
Advertising	$	87,800	$	93,285	$	23,987	$	31,577	$	—		$	(37	)	$	111,787		$	124,825
Circulation	88,616		73,978		4,172		2,230		—			—			92,788			76,208
Commercial print and delivery	25,784		24,600		—		—		—			—			25,784			24,600
Direct mail	8,025		9,214		—		—		—			—			8,025			9,214
Content syndication and other	2,072		3,801		11,982		5,673		599			(886		)	14,653			8,588
Other	35,881		37,615		11,982		5,673		599			(886		)	48,462			42,402
Operating revenues	212,297		204,878		40,141		39,480		599			(923		)	253,037			243,435
Operating expenses	204,410		191,803		36,691		36,403		13,181			10,767			254,282			238,973
Income (loss) from operations	$	7,887	$	13,075	$	3,450	$	3,077	$	(12,582	)	$	(11,690	)	(1,245		)	4,462
Interest expense															(5,412		)	(6,365		)
Loss on early extinguishment of debt															(7,666		)	—
Loss on investments, net															(665		)	(723		)
Other income, net															3,640			284
Loss from continuing operations before income taxes															$	(11,348	)	$	(2,342	)
Depreciation and amortization	$	3,990	$	5,281	$	4,505	$	3,512	$	4,447		$	4,194		$	12,942		$	12,987

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SUPPLEMENTAL CASH FLOW INFORMATION (Tables)

6 Months Ended

Jul. 01, 2018

Supplemental Cash Flow Elements [Abstract]

Schedule of supplemental cash flow information

Supplemental cash flow information for each of the periods presented is as follows (in thousands):

	Six months ended
	July 1, 2018		June 25, 2017
Cash paid during the period for:
Interest	$	10,489	$	11,325
Income taxes, net of refunds	3,967		113
Non-cash items in financing activities:
Issuance of stock from treasury for acquisition	34,595		—

Restrictions on cash and cash equivalents

The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported within the Consolidated Condensed Balance Sheet that sum to the cash, cash equivalents and restricted cash as reported in the Consolidated Statement of Cash Flows:

	As of		As of
	July 1, 2018		December 31, 2017
Cash and cash equivalents	$	214,544	$	185,351
Restricted cash included in other assets	42,600		—
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	257,144	$	185,351

Schedule of cash and cash equivalents

The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported within the Consolidated Condensed Balance Sheet that sum to the cash, cash equivalents and restricted cash as reported in the Consolidated Statement of Cash Flows:

	As of		As of
	July 1, 2018		December 31, 2017
Cash and cash equivalents	$	214,544	$	185,351
Restricted cash included in other assets	42,600		—
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	257,144	$	185,351

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION - Textual (Details)	6 Months Ended
	Jul. 01, 2018 pulitzer_prize market
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of markets | market	8
Number of Pulitzer Prizes | pulitzer_prize	60

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REVENUE RECOGNITION - (Details) - USD ($) $ in Millions	6 Months Ended
	Jul. 01, 2018	Dec. 31, 2017
Revenue from Contract with Customer [Abstract]
Contract liabilities		$ 55.1
Contract liabilities recognized as revenue	$ 41.5

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CHANGES IN OPERATIONS - Textual (Details) $ in Thousands	1 Months Ended	3 Months Ended			6 Months Ended
	Aug. 08, 2018 position	Sep. 30, 2018 USD ($)	Jul. 01, 2018 USD ($) position	Jun. 25, 2017 USD ($) position	Jul. 01, 2018 USD ($) position	Jun. 25, 2017 USD ($) position
Restructuring Cost and Reserve [Line Items]
Restructuring charges					$ 10,691
Contract termination | Property subject to operating lease
Restructuring Cost and Reserve [Line Items]
Restructuring charges					33
Printing, Packaging, and Delivery Outsource
Restructuring Cost and Reserve [Line Items]
Restructuring charges				$ 2,300		$ 2,300
Reductions in staffing levels in operations | position				112		112
Additional restructuring
Restructuring Cost and Reserve [Line Items]
Restructuring charges			$ 5,000	$ 900	$ 10,700	$ 3,000
Reductions in staffing levels in operations | position			106	41	287	92
Subsequent Event
Restructuring Cost and Reserve [Line Items]
Reductions in staffing levels in operations | position	178
Minimum | Scenario, Forecast | Subsequent Event
Restructuring Cost and Reserve [Line Items]
Restructuring charges		$ 5,200
Maximum | Scenario, Forecast | Subsequent Event
Restructuring Cost and Reserve [Line Items]
Restructuring charges		$ 5,400

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CHANGES IN OPERATIONS - Summary of Severance Accrual (Details) $ in Thousands	6 Months Ended
	Jul. 01, 2018 USD ($)
Restructuring Reserve [Roll Forward]
Balance at beginning of period	$ 11,532
Provision	10,691
Payments	(12,681)
Balance at end of period	$ 9,542

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CHANGES IN OPERATIONS - Summary of Lease Abandonment Accrual Activity (Details) $ in Thousands	6 Months Ended
	Jul. 01, 2018 USD ($)
Restructuring Reserve [Roll Forward]
Balance at beginning of period	$ 11,532
Provision	10,691
Payments and other	(12,681)
Balance at end of period	9,542
Property subject to operating lease | Contract termination
Restructuring Reserve [Roll Forward]
Balance at beginning of period	3,127
Provision	33
Payments and other	(1,977)
Balance at end of period	$ 1,183

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RELATED PARTY TRANSACTIONS - Merrick Consulting Agreement (Details) - Merrick Ventures, LLC - USD ($) $ in Millions		1 Months Ended			3 Months Ended				6 Months Ended	12 Months Ended
	Dec. 20, 2017	Jun. 30, 2018	Jan. 31, 2018	Apr. 30, 2017	Jul. 01, 2018	Apr. 01, 2018	Jun. 25, 2017	Mar. 26, 2017	Jun. 25, 2017	Dec. 31, 2017	Dec. 25, 2016
Tribune Publishing Company, LLC
Related Party Transaction [Line Items]
Amount of related party transaction	$ 5.0			$ 0.3						$ 3.0	$ 2.7
Initial payment to related party			$ 5.0					$ 0.2
Related party expense		$ 7.5			$ 12.5	$ 15.0
Reduction in total fees					2.5
Tribune Publishing Company, LLC | Payment of legal fees
Related Party Transaction [Line Items]
Amount of related party transaction					$ 0.3
Tribune Publishing Company, LLC | Aircraft Dry sublease agreement
Related Party Transaction [Line Items]
Amount of related party transaction							$ 0.6		$ 1.3
Related party expense							$ 0.4		$ 1.0
Private placement | Affiliated entity | Merrick Shares purchase agreement
Related Party Transaction [Line Items]
Sale of stock, lock-up period	3 years

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RELATED PARTY TRANSACTIONS - Aircraft Dry Sublease Textual (Details) - Tribune Publishing Company, LLC - USD ($) $ in Millions		1 Months Ended		3 Months Ended			6 Months Ended	12 Months Ended
	Dec. 20, 2017	Jun. 30, 2018	Apr. 30, 2017	Jul. 01, 2018	Apr. 01, 2018	Jun. 25, 2017	Jun. 25, 2017	Dec. 31, 2017	Dec. 25, 2016
Merrick Ventures, LLC
Related Party Transaction [Line Items]
Amount of related party transaction	$ 5.0		$ 0.3					$ 3.0	$ 2.7
Reimbursement of lease expense		$ 7.5		$ 12.5	$ 15.0
Aircraft Dry sublease agreement | Merrick Ventures, LLC
Related Party Transaction [Line Items]
Amount of related party transaction						$ 0.6	$ 1.3
Reimbursement of lease expense						0.4	1.0
Aircraft Dry sublease agreement | Third-Party Pilot Service
Related Party Transaction [Line Items]
Reimbursement of lease expense						$ 0.1	$ 0.2

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RELATED PARTY TRANSACTIONS - Event Tickets (Details) - Merrick Ventures, LLC - Tribune Publishing Company, LLC - USD ($) $ in Millions		1 Months Ended		3 Months Ended	12 Months Ended
	Dec. 20, 2017	Jan. 31, 2018	Apr. 30, 2017	Mar. 26, 2017	Dec. 31, 2017	Dec. 25, 2016
Related Party Transaction [Line Items]
Amount of related party transaction	$ 5.0		$ 0.3		$ 3.0	$ 2.7
Payments for tickets at face value		$ 5.0		$ 0.2

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RELATED PARTY TRANSACTIONS - Nucleus Marketing Solutions, LLC (Details) - Equity method investments - Nucleus Marketing Solutions, LLC - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 25, 2017	Jun. 25, 2017	Jul. 01, 2018
Related Party Transaction [Line Items]
Equity method investment, ownership percentage			25.00%
Other revenue	$ 1.6	$ 3.6

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ACQUISITIONS (Details)				3 Months Ended	6 Months Ended
	May 28, 2018 USD ($) ft²	Feb. 06, 2018 USD ($) shares	Sep. 03, 2017 USD ($)	Jul. 01, 2018 USD ($)	Jul. 01, 2018 USD ($)
Virginian-Pilot
Business Acquisition [Line Items]
Cash purchase price	$ 34,004,000
Area of real estate portfolio acquired | ft²	460,000
Reported revenues				$ 5,500,000	$ 5,500,000
Reported operating expenses				5,100,000	5,100,000
BestReviews LLC
Business Acquisition [Line Items]
Cash purchase price		$ 109,188,000
Reported revenues				5,900,000	9,100,000
Reported operating expenses				$ 4,700,000	$ 7,300,000
Percentage of partnership interests acquired		60.00%
Total purchase price		$ 68,300,000
Cash consideration for acquisition		33,693,000
Post-closing working capital adjustment		600,000
Common stock issued in acquisition		$ 34,600,000
Daily News, L.P. and NYDailyNews.com
Business Acquisition [Line Items]
Percentage of partnership interests acquired			100.00%
Cash consideration for acquisition			$ 1
Tribune Media Company | BestReviews LLC
Business Acquisition [Line Items]
Percent of membership interests remaining to purchase		40.00%
Right to purchase membership units, percentage		25.00%
Requirement to purchase membership interests, percentage		10.00%
Common Stock | BestReviews LLC
Business Acquisition [Line Items]
Common stock issued in acquisition (in shares) | shares		1,913,438
Lock-Up Provision Period One | BestReviews LLC
Business Acquisition [Line Items]
Percent of shares subject to lock-up provisions		25.00%
Lock-Up Provision Period Two | BestReviews LLC
Business Acquisition [Line Items]
Percent of shares subject to lock-up provisions		50.00%
Lock-Up Provision Period Three | BestReviews LLC
Business Acquisition [Line Items]
Percent of shares subject to lock-up provisions		25.00%

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ACQUISITIONS - Schedule of Virginian-Pilot Acquisition (Details) - USD ($) $ in Thousands	May 28, 2018	Feb. 06, 2018	Jul. 01, 2018	Dec. 31, 2017
Business Acquisition [Line Items]
Goodwill			$ 138,201	$ 48,700
Virginian-Pilot
Business Acquisition [Line Items]
Total purchase price	$ 34,004
Accounts receivable and other current assets	7,028
Property, plant and equipment, including assets under capital leases	30,485
Mastheads	4,700
Accounts payable and other current liabilities	(9,918)
Other long term obligations	(68)
Total identifiable net assets (liabilities)	32,227
Goodwill	1,777
Total net assets acquired	$ 34,004
BestReviews LLC
Business Acquisition [Line Items]
Total purchase price		$ 109,188
Accounts receivable and other current assets		9,966
Property, plant and equipment, including assets under capital leases		36
Mastheads		12,540
Accounts payable and other current liabilities		(993)
Total identifiable net assets (liabilities)		21,549
Goodwill		87,639
Total net assets acquired		$ 109,188

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ACQUISITIONS - Schedule of BestReviews Business Acquisition (Details) - USD ($)	Feb. 06, 2018	Sep. 03, 2017	Jul. 01, 2018	Dec. 31, 2017
Business Acquisition [Line Items]
Goodwill			$ 138,201,000	$ 48,700,000
BestReviews LLC
Business Acquisition [Line Items]
Cash consideration for acquisition	$ 33,693,000
Fair value of noncontrolling interest	40,900,000
Value of shares issued for acquisition	34,595,000
Accounts receivable and other current assets	9,966,000
Property, plant and equipment, including assets under capital leases	36,000
Intangible assets	12,540,000
Accounts payable and other current liabilities	(993,000)
Total purchase price	109,188,000
Total identifiable net assets (liabilities)	21,549,000
Goodwill	87,639,000
Total net assets acquired	$ 109,188,000
Daily News, L.P. and NYDailyNews.com
Business Acquisition [Line Items]
Cash consideration for acquisition		$ 1
Cash acquired as part of the purchase		2,555,000
Accounts receivable and other current assets		18,532,000
Property, plant and equipment, including assets under capital leases		47,972,000
Mastheads		3,400,000
Other long-term assets		10,448,000
Accounts payable and other current liabilities		(20,973,000)
Pension and postemployment benefits liability		(25,446,000)
Workers compensation and auto insurance liability		(25,999,000)
Other long-term liabilities		10,489,000
Total net assets acquired		$ 0

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DISPOSITIONS AND DISCONTINUED OPERATIONS (Details) - USD ($) $ in Millions			3 Months Ended		6 Months Ended
	Jun. 18, 2018	Feb. 07, 2018	Jun. 25, 2017	Jun. 26, 2016	Jul. 01, 2018	Jun. 25, 2017	May 23, 2018	Jul. 31, 2017
California Properties | Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Aggregate purchase price	$ 500.0
Gain on sale	$ 407.6
Forsalebyowner.com | Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Aggregate purchase price							$ 2.5
Advertising sales commitment received					$ 4.5
Term of advertising sales commitment					2 years
Beneficial owner | Transaction Services Agreement
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Transition services agreement term		12 months
Days' notice to discontinue transition services agreement		60 days
Other revenue					$ 1.2
Private placement | Beneficial owner | Nant Rights purchase agreement | Dr. Soon-Shiong
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Beneficial ownership by related party, common shares owned (in shares)					8,743,619
Beneficial ownership by related party, percentage of common stock owned					24.80%
Private placement | Beneficial owner | Nant Term sheet agreement | Nant Capital
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Shares to be issued (in shares)				333,333
Amount retained from patent agreement				$ 80.0
Percent of royal revenue to be paid				6.00%
CIPS Marketing Group, Inc. | Equity method investments
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Other revenue			$ 0.2			$ 0.5
CIPS Marketing Group, Inc. | Other operating expense | Equity method investments
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Equity method investment, ownership percentage								50.00%
Marketing expense			$ 2.2			$ 3.8

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DISPOSITIONS AND DISCONTINUED OPERATIONS - Earnings from Discontinued Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jun. 25, 2017	Jul. 01, 2018	Jun. 25, 2017
Operating expenses:
Income from discontinued operations, net of tax	$ 280,545	$ 8,781	$ 294,745	$ 16,704
Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Operating revenues	94,251	126,355	211,327	252,497
Operating expenses:
Compensation	25,065	34,722	58,763	71,479
Newsprint and ink	6,938	8,756	14,373	17,947
Outside services	30,075	34,353	61,650	68,168
Other operating expenses	26,804	33,280	56,541	65,401
Depreciation and amortization	1,328	1,674	2,960	4,156
Total operating expenses	90,210	112,785	194,287	227,151
Income from operations	4,041	13,570	17,040	25,346
Gain on sale	409,334	0	409,334	0
Interest expense, net	(23)	(39)	(53)	(81)
Loss on equity investments, net	0	139	0	349
Other income, net	613	150	1,338	300
Income tax expense	(133,420)	(5,039)	(132,914)	(9,210)
Income from discontinued operations, net of tax	$ 280,545	$ 8,781	$ 294,745	$ 16,704

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DISPOSITIONS AND DISCONTINUED OPERATIONS - Discontinued Operations by Segment (Details) - Discontinued Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jun. 25, 2017	Jul. 01, 2018	Jun. 25, 2017
Segment Reporting Information [Line Items]
Operating revenues	$ 94,251	$ 126,355	$ 211,327	$ 252,497
Income from Operations	4,041	13,570	17,040	25,346
Depreciation and amortization	1,328	1,674	2,960	4,156
Operating segments | troncM
Segment Reporting Information [Line Items]
Operating revenues	81,631	107,559	185,836	215,149
Income from Operations	(75)	8,249	10,918	15,460
Depreciation and amortization	1,289	1,607	2,856	4,029
Operating segments | troncX
Segment Reporting Information [Line Items]
Operating revenues	12,570	18,762	25,429	37,274
Income from Operations	4,065	5,328	6,079	9,902
Depreciation and amortization	39	67	104	127
Corporate and eliminations
Segment Reporting Information [Line Items]
Operating revenues	50	34	62	74
Income from Operations	$ 51	$ (7)	$ 43	$ (16)

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DISPOSITIONS AND DISCONTINUED OPERATIONS - Assets and Liabilities Associated with Discontinued Operations (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Carrying amount of liabilities associated with assets held for sale
Allowances for doubtful accounts	$ 10,613	$ 7,388
Discontinued Operations, Held-for-sale
Carrying amount of assets related to discontinued operations:
Accounts receivable, (net of allowances of $0 and $7,388)	0	51,200
All other current assets	0	10,576
Goodwill	0	73,207
Intangibles	0	63,397
Property, plant and equipment, net	0	12,550
Deferred income taxes	0	28,787
All other long term assets	0	438
Total assets related to discontinued operations	0	240,155
Carrying amount of liabilities associated with assets held for sale
Accounts payable and employee compensation and benefits	0	27,293
Deferred revenue	0	26,039
Other current liabilities	0	7,062
Pensions and postretirement benefits payable	0	90,155
Insurance	0	26,200
Income taxes payable	107,624	0
Total liabilities associated with discontinued operations	107,624	176,749
Allowances for doubtful accounts	$ 0	$ 7,388

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INVENTORIES - Summary of Inventory (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Newsprint	$ 10,692	$ 7,072
Supplies and other	325	340
Total inventories	$ 11,017	$ 7,412

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GOODWILL AND OTHER INTANGIBLE ASSETS - Summary of Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jul. 01, 2018	Dec. 31, 2017
Intangible assets subject to amortization
Gross Amount	$ 64,622	$ 54,139
Accumulated Amortization	(20,803)	(18,601)
Net Amount	43,819	35,538
Software
Net Amount	33,238	39,577
Goodwill and other intangible assets not subject to amortization
Goodwill	138,201	48,700
Newspaper mastheads	36,706	29,458
Total goodwill and other intangible assets	251,964	153,273
Subscribers
Intangible assets subject to amortization
Gross Amount	7,312	7,312
Accumulated Amortization	(4,231)	(3,762)
Net Amount	$ 3,081	$ 3,550
Subscribers | Minimum
Goodwill and other intangible assets not subject to amortization
Useful life	2 years	2 years
Subscribers | Maximum
Goodwill and other intangible assets not subject to amortization
Useful life	10 years	10 years
Advertiser relationships
Intangible assets subject to amortization
Gross Amount	$ 26,348	$ 26,348
Accumulated Amortization	(11,204)	(10,013)
Net Amount	$ 15,144	$ 16,335
Advertiser relationships | Minimum
Goodwill and other intangible assets not subject to amortization
Useful life	2 years	2 years
Advertiser relationships | Maximum
Goodwill and other intangible assets not subject to amortization
Useful life	13 years	13 years
Tradenames
Intangible assets subject to amortization
Gross Amount	$ 15,100	$ 15,100
Accumulated Amortization	(2,962)	(2,583)
Net Amount	$ 12,138	$ 12,517
Goodwill and other intangible assets not subject to amortization
Useful life	20 years	20 years
Other
Intangible assets subject to amortization
Gross Amount	$ 15,862	$ 5,379
Accumulated Amortization	(2,406)	(2,243)
Net Amount	$ 13,456	$ 3,136
Other | Minimum
Goodwill and other intangible assets not subject to amortization
Useful life	1 year	1 year
Other | Maximum
Goodwill and other intangible assets not subject to amortization
Useful life	20 years	20 years
Software
Software
Gross Amount	$ 133,670	$ 129,795
Accumulated Amortization	(100,432)	(90,218)
Net Amount	$ 33,238	$ 39,577
Software | Minimum
Goodwill and other intangible assets not subject to amortization
Useful life	2 years	2 years
Software | Maximum
Goodwill and other intangible assets not subject to amortization
Useful life	10 years	10 years

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DEBT - Textual (Details)			3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 21, 2018 USD ($)	Aug. 04, 2014 USD ($)	Jul. 01, 2018 USD ($)	Jun. 25, 2017 USD ($)	Jul. 01, 2018 USD ($)	Jun. 25, 2017 USD ($)	Dec. 27, 2015 USD ($)	Dec. 31, 2017 USD ($)
Line of Credit Facility [Line Items]
Loss on early extinguishment of debt			$ (7,666,000)	$ 0	$ (7,666,000)	$ 0
Restricted cash established	$ 42,600,000
Capital leases balance			7,500,000		7,500,000			$ 8,700,000
Current portion of capital leases			700,000		$ 700,000			$ 800,000
Senior term facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity		$ 350,000,000.0
Potential increase in borrowing capacity		$ 100,000,000.0
Senior secured leverage ratio		2
Proceeds from issuance of debt							$ 70,000,000
Percentage of principal balance		1.25%
Repayments of outstanding principal balance	$ 348,000,000
Loss on early extinguishment of debt			$ (7,700,000)
Senior ABL facility
Line of Credit Facility [Line Items]
Principal amount		$ 140,000,000
Potential increase in borrowing capacity		15,000,000
Senior ABL facility | Letter of credit
Line of Credit Facility [Line Items]
Potential increase in borrowing capacity		$ 75,000,000
Commitment fee (as a percent)		0.25%

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INCOME TAXES - Textual (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended		12 Months Ended
	Jul. 01, 2018	Dec. 31, 2017	Jun. 25, 2017	Jul. 01, 2018	Jun. 25, 2017	Dec. 30, 2018	Dec. 31, 2017
Income Tax Contingency [Line Items]
Income tax expense (benefit)	$ 3,753		$ (402)	$ (2,926)	$ (2,280)
Effective tax rate on pretax income, percent	(33.10%)		17.20%	6.30%	15.10%		19.00%
U.S. federal statutory rate, percent	21.00%				35.00%
Nondeductible permanent difference for calculation of income taxes			$ 6,000
Tax expense recognized related to Tax Cuts and Jobs Act of 2017		$ 10,800
Scenario, Forecast
Income Tax Contingency [Line Items]
Effective tax rate on pretax income, percent						6.00%

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PENSION AND OTHER POSTRETIREMENT BENEFITS - Textual (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2018	Jun. 25, 2017
Defined Benefit Plan Disclosure [Line Items]
Pension contribution	$ 534	$ 0
Pension plan | San Diego Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Pension contribution	5,700
Pension plan | NYDN Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Pension contribution	500
Expected future contributions for rest of current year	$ 3,400

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PENSION AND OTHER POSTRETIREMENT BENEFITS - Components of Defined Benefit Plan (Details) - Pension plan - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jun. 25, 2017	Jul. 01, 2018	Jun. 25, 2017
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	$ (8)	$ 0	$ 72	$ 0
Interest cost	825	0	1,636	0
Expected return on assets	(1,165)	0	(2,333)	0
Net periodic benefit	$ (348)	$ 0	$ (625)	$ 0

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PENSION AND OTHER POSTRETIREMENT BENEFITS - Components of Postretirement Health Care and Life Insurance Plans (Details) - Other postretirement plans - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jun. 25, 2017	Jul. 01, 2018	Jun. 25, 2017
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	$ 4	$ 3	$ 7	$ 6
Interest cost	8	55	17	110
Amortization of prior service credits	(2,634)	(292)	(5,267)	(584)
Amortization of actuarial gains	(657)	(47)	(1,315)	(93)
Net periodic benefit	$ (3,279)	$ (281)	$ (6,558)	$ (561)

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NONCONTROLLING INTERESTS (Details) $ in Thousands	6 Months Ended
	Jul. 01, 2018 USD ($)
Noncontrolling Interest [Abstract]
Ownership percentage	40.00%
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Noncontrolling interests, beginning balance	$ 0
Acquisition of BestReviews	40,900
Income attributable to noncontrolling interest	710
Noncontrolling interests, ending balance	$ 41,610

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EARNINGS PER SHARE - Textual (Details) - shares	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jun. 25, 2017	Jul. 01, 2018	Jun. 25, 2017
Option
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)	924,887	836,843	973,637	883,359
RSU
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)	1,821,836	558,761	1,874,250	297,592

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EARNINGS PER SHARE - Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jun. 25, 2017	Jul. 01, 2018	Jun. 25, 2017
Income (Loss) - Numerator:
Loss from continuing operations	$ (15,101)	$ (1,940)	$ (43,813)	$ (12,852)
Less: Net income from continuing operations attributable to noncontrolling interest	448	0	710	0
Income available to common shareholders, before discontinued operations	(15,549)	(1,940)	(44,523)	(12,852)
Income from discontinued operations	280,545	8,781	294,745	16,704
Net income available to tronc stockholders	$ 264,996	$ 6,841	$ 250,222	$ 3,852
Shares - Denominator:
Weighted average number of common shares outstanding (basic) (in shares)	35,288	32,825	35,045	34,566
Dilutive effect of employee stock options and RSUs (in shares)	0	0	0	0
Adjusted weighted average shares outstanding (diluted) (in shares)	35,288	32,825	35,045	34,566
Net income (loss) attributable to tronc per common share:
Net income (loss) per common share, continuing operations (in dollars per share)	$ (0.44)	$ (0.06)	$ (1.27)	$ (0.37)
Net income (loss) per common share, discontinued operations (in dollars per share)	7.95	0.27	8.41	0.48
Net income per common share (in dollars per share)	7.51	0.21	7.14	0.11
Diluted income (loss) per common share:
Diluted income (loss) per common share, continuing operations (in dollars per share)	(0.44)	(0.06)	(1.27)	(0.37)
Diluted income (loss) per common share, discontinued operations (in dollars per share)	7.95	0.27	8.41	0.48
Net income per common share-diluted (in dollars per share)	$ 7.51	$ 0.21	$ 7.14	$ 0.11

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STOCKHOLDERS' EQUITY - Textual (Details) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended		6 Months Ended
	Mar. 23, 2017	Mar. 22, 2017	May 22, 2016	Jul. 01, 2018	Jun. 25, 2017	Jul. 01, 2018	Jun. 25, 2017
Class of Stock [Line Items]
Company's closing price of stock (in dollars per share)		$ 13.39
Premium on stock buyback				$ 0	$ 0	$ 0	$ 6,031
Oaktree Capital
Class of Stock [Line Items]
Stock repurchase program, number of shares authorized to be repurchased (in shares)	3,745,947
Common stock, par value (in dollars per share)	$ 15.00
Stock repurchase program, authorized amount	$ 56,200
Private placement | Merrick Shares purchase agreement | Merrick Media, LLC | Affiliated entity
Class of Stock [Line Items]
Percentage of ownership of outstanding shares	30.00%	25.00%
Private placement | Merrick Shares purchase agreement | Mr. Ferro | Beneficial owner
Class of Stock [Line Items]
Beneficial ownership by related party, common shares owned (in shares)				9,071,529		9,071,529
Beneficial ownership by related party, percentage of common stock owned				25.70%		25.70%
Private placement | Nant Rights purchase agreement | Beneficial owner
Class of Stock [Line Items]
Percentage of ownership of outstanding shares			25.00%
Maximum percentage of shares allowed to be held after transfer (in shares)			4.90%
Private placement | Nant Rights purchase agreement | Dr. Soon-Shiong | Beneficial owner
Class of Stock [Line Items]
Beneficial ownership by related party, common shares owned (in shares)				8,743,619		8,743,619
Beneficial ownership by related party, percentage of common stock owned				24.80%		24.80%

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jun. 25, 2017	Jul. 01, 2018	Jun. 25, 2017
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period			$ 69,162
Amounts reclassified from AOCI			(4,752)
Foreign currency translation	$ (5)	$ 1	(5)	$ 1
Accumulated other comprehensive income recognized in discontinued operations, net of taxes of $9,702	25,397	$ 0	25,397	$ 0
Balance at end of period	378,886		378,886
Foreign Currency
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period			(31)
Amounts reclassified from AOCI			0
Foreign currency translation			(5)
Accumulated other comprehensive income recognized in discontinued operations, net of taxes of $9,702			0
Balance at end of period	(36)		(36)
AOCI
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period			(13,527)
Balance at end of period	7,113		7,113
Other postretirement plans | OPEB/Pension
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period			9,932
Amounts reclassified from AOCI			(4,752)
Foreign currency translation			0
Accumulated other comprehensive income recognized in discontinued operations, net of taxes of $9,702			0
Balance at end of period	5,180		5,180
Pension plan | OPEB/Pension
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period			(23,428)
Amounts reclassified from AOCI			0
Foreign currency translation			0
Accumulated other comprehensive income recognized in discontinued operations, net of taxes of $9,702			25,397
Balance at end of period	$ 1,969		$ 1,969

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Reclassifications (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jun. 25, 2017	Jul. 01, 2018	Jun. 25, 2017
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Pension and postretirement benefit adjustments	$ (106,455)	$ (92,609)	$ (217,293)	$ (189,003)
Income Tax Expense (Benefit)	3,753	(402)	(2,926)	(2,280)
Total reclassifications for the period	2,376	206	(4,752)	410
Amortization of prior service credits
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Pension and postretirement benefit adjustments	(2,634)	(292)	(5,267)	(584)
Amortization of actuarial gains
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Pension and postretirement benefit adjustments	(657)	(47)	(1,315)	(93)
Accumulated defined benefit plans adjustment attributable to parent
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total before taxes	3,291	339	6,582	677
Income Tax Expense (Benefit)	$ (915)	$ (133)	$ 1,830	$ 267

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CONTINGENCIES - Textual (Details)	Aug. 12, 2016 Chapter_11_case	Dec. 31, 2012 subsidiary
Commitments and Contingencies Disclosure [Abstract]
Number of wholly-owned subsidiaries | subsidiary		110
Number of Chapter 11 cases | Chapter_11_case	106

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SEGMENT INFORMATION - Operating Revenue and Income (Loss) from Operations by Operating Segment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jun. 25, 2017	Jul. 01, 2018	Jun. 25, 2017
Segment Reporting Information [Line Items]
Operating revenues	$ 253,037	$ 243,435	$ 491,576	$ 483,410
Operating expenses	254,282	238,973	524,582	478,657
Income (loss) from operations	(1,245)	4,462	(33,006)	4,753
Interest expense, net	(5,412)	(6,365)	(11,976)	(12,800)
Loss on early extinguishment of debt	(7,666)	0	(7,666)	0
Premium on stock buyback	0	0	0	(6,031)
Loss on equity investments, net	(665)	(723)	(1,394)	(1,621)
Other income, net	3,640	284	7,303	567
Loss from continuing operations before income taxes	(11,348)	(2,342)	(46,739)	(15,132)
Depreciation and amortization	12,942	12,987	25,959	23,682
Operating segments | troncM
Segment Reporting Information [Line Items]
Operating revenues	212,297	204,878	416,508	408,801
Operating expenses	204,410	191,803	408,821	383,618
Income (loss) from operations	7,887	13,075	7,687	25,183
Depreciation and amortization	3,990	5,281	7,962	8,565
Operating segments | troncX
Segment Reporting Information [Line Items]
Operating revenues	40,141	39,480	75,285	76,407
Operating expenses	36,691	36,403	72,453	73,755
Income (loss) from operations	3,450	3,077	2,832	2,652
Depreciation and amortization	4,505	3,512	9,120	6,689
Corporate and eliminations
Segment Reporting Information [Line Items]
Operating revenues	599	(923)	(217)	(1,798)
Operating expenses	13,181	10,767	43,308	21,284
Income (loss) from operations	(12,582)	(11,690)	(43,525)	(23,082)
Depreciation and amortization	4,447	4,194	8,943	8,428
Advertising
Segment Reporting Information [Line Items]
Operating revenues	111,787	124,825	216,579	244,446
Advertising | Operating segments | troncM
Segment Reporting Information [Line Items]
Operating revenues	87,800	93,285	170,542	184,084
Advertising | Operating segments | troncX
Segment Reporting Information [Line Items]
Operating revenues	23,987	31,577	46,037	60,493
Advertising | Corporate and eliminations
Segment Reporting Information [Line Items]
Operating revenues	0	(37)	0	(131)
Circulation
Segment Reporting Information [Line Items]
Operating revenues	92,788	76,208	180,923	153,294
Circulation | Operating segments | troncM
Segment Reporting Information [Line Items]
Operating revenues	88,616	73,978	173,242	149,011
Circulation | Operating segments | troncX
Segment Reporting Information [Line Items]
Operating revenues	4,172	2,230	7,681	4,283
Circulation | Corporate and eliminations
Segment Reporting Information [Line Items]
Operating revenues	0	0	0	0
Commercial print and delivery
Segment Reporting Information [Line Items]
Operating revenues	25,784	24,600	52,789	51,173
Commercial print and delivery | Operating segments | troncM
Segment Reporting Information [Line Items]
Operating revenues	25,784	24,600	52,789	51,173
Commercial print and delivery | Operating segments | troncX
Segment Reporting Information [Line Items]
Operating revenues	0	0	0	0
Commercial print and delivery | Corporate and eliminations
Segment Reporting Information [Line Items]
Operating revenues	0	0	0	0
Direct mail
Segment Reporting Information [Line Items]
Operating revenues	8,025	9,214	15,628	17,800
Direct mail | Operating segments | troncM
Segment Reporting Information [Line Items]
Operating revenues	8,025	9,214	15,628	17,800
Direct mail | Operating segments | troncX
Segment Reporting Information [Line Items]
Operating revenues	0	0	0	0
Direct mail | Corporate and eliminations
Segment Reporting Information [Line Items]
Operating revenues	0	0	0	0
Content syndication and other
Segment Reporting Information [Line Items]
Operating revenues	14,653	8,588	25,657	16,697
Content syndication and other | Operating segments | troncM
Segment Reporting Information [Line Items]
Operating revenues	2,072	3,801	4,307	6,733
Content syndication and other | Operating segments | troncX
Segment Reporting Information [Line Items]
Operating revenues	11,982	5,673	21,567	11,631
Content syndication and other | Corporate and eliminations
Segment Reporting Information [Line Items]
Operating revenues	599	(886)	(217)	(1,667)
Other
Segment Reporting Information [Line Items]
Operating revenues	48,462	42,402	94,074	85,670
Other | Operating segments | troncM
Segment Reporting Information [Line Items]
Operating revenues	35,881	37,615	72,724	75,706
Other | Operating segments | troncX
Segment Reporting Information [Line Items]
Operating revenues	11,982	5,673	21,567	11,631
Other | Corporate and eliminations
Segment Reporting Information [Line Items]
Operating revenues	$ 599	$ (886)	$ (217)	$ (1,667)

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SUPPLEMENTAL CASH FLOW INFORMATION - Summary of Supplemental Cash Flow (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2018	Jun. 25, 2017
Cash paid during the period for:
Interest	$ 10,489	$ 11,325
Income taxes, net of refunds	3,967	113
Non-cash items in financing activities:
Issuance of stock from treasury for acquisition	$ 34,595	$ 0

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SUPPLEMENTAL CASH FLOW INFORMATION - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2017	Jun. 25, 2017	Dec. 25, 2016
Supplemental Cash Flow Elements [Abstract]
Cash and cash equivalents	$ 214,544	$ 185,351
Restricted cash included in other assets	42,600	0
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$ 257,144	$ 185,351	$ 174,200	$ 198,349