INVESTMENTS IN ASSOCIATED COMPANIES

TNI Partners

In Tucson, Arizona, TNI, acting as agent for our subsidiary, Star Publishing Company (“Star Publishing”) and Citizen Publishing Company (“Citizen”), a subsidiary of Gannett Co. Inc., is responsible for printing, delivery, advertising and subscription activities of the Arizona Daily Star, as well as the related digital platforms and specialty publications. TNI collects all receipts and income and pays substantially all operating expenses incident to the partnership's operations and publication of the newspaper and other media.

Income or loss of TNI (before income taxes) is allocated equally to Star Publishing and Citizen.

Summarized financial information of TNI is as follows:



(Thousands of Dollars)	September 27 2015	September 28 2014

ASSETS

Cash and cash equivalents	126	176
Accounts receivable, net	4,563	4,749
Inventories	899	1,582
Other current assets	173	125
Investments and other assets	33	78
Total assets	5,794	6,710

LIABILITIES AND MEMBERS' EQUITY

Accrued expenses and other current liabilities	1,650	2,160
Unearned revenue	3,137	3,036
Total liabilities	4,787	5,196
Members' equity	1,007	1,514
Total liabilities and members' equity	5,794	6,710

Summarized results of TNI are as follows:



(Thousands of Dollars)	2015	2014		2013
	52 Weeks	52 Weeks		53 Weeks
Operating revenue:
Advertising and marketing services	33,782	36,957		40,166
Subscription	19,227	17,525		18,248
Other	2,917	3,410		3,576
Total operating revenue	55,926	57,892		61,990
Operating expenses:
Compensation	17,509	18,505		19,799
Newsprint and ink	6,775	8,123		9,626
Other operating expenses	21,129	20,672		20,971
Workforce adjustments	—	(71	)	—
Net income	10,513	10,663		11,594

Company's 50% share	5,256	5,331		5,797
Less amortization of intangible assets	418	418		621
Equity in earnings of TNI	4,838	4,913		5,176

Summarized cash flows of TNI are as follows:



(Thousands of Dollars)	2015		2014		2013
	52 Weeks		52 Weeks		53 Weeks

Net income	10,513		10,663		11,594
Cash provided by (required for) operating activities	(458	)	(442	)	1,351
Cash required for financing activities (partner distributions)	(10,105	)	(10,276	)	(12,851	)
Net increase (decrease) in cash and cash equivalents	(50	)	(55	)	94
Cash and cash equivalents:
Beginning of year	176		231		137
End of year	126		176		231

Star Publishing's 50% share of TNI depreciation and certain general and administrative expenses associated with its share of the operation and administration of TNI are reported as operating expenses (benefit) in our Consolidated Statements of Operations and Comprehensive Income (Loss). These amounts totaled $(254,000), $(60,000),and $(488,000), in 2015, 2014 and 2013, respectively. Fees for editorial services provided to TNI by Star Publishing totaled $5,492,000, $5,908,000, and $6,041,000 in 2015, 2014 and 2013, respectively.

At September 27, 2015, the carrying value of the Company's 50% investment in TNI is $17,508,000. The difference between our carrying value and our 50% share of the members' equity of TNI relates principally to goodwill of $12,366,000 and other identified intangible assets of $4,972,000, certain of which are being amortized over their estimated useful lives through 2020. See Note 4.

Annual amortization of intangible assets is estimated to be $418,000 in 2016, 2017, 2018, 2019 and $314,000 in 2020.

Madison Newspapers, Inc.

We have a 50% ownership interest in MNI, which publishes daily and Sunday newspapers, and other publications in Madison, Wisconsin, and other Wisconsin locations, and operates their related digital sites. Net income or loss of MNI (after income taxes) is allocated equally to us and The Capital Times Company (“TCT”). MNI conducts its business under the trade name Capital Newspapers.

Summarized financial information of MNI is as follows:



(Thousands of Dollars)	September 27 2015	September 28 2014

ASSETS

Cash and cash equivalents	9,406	12,245
Accounts receivable, net	5,632	5,794
Other current assets	3,217	2,656
Current assets	18,255	20,695
Investments and other assets	2,871	2,871
Property and equipment, net	5,665	6,758
Goodwill and other intangible assets	25,673	26,118
Total assets	52,464	56,442

LIABILITIES AND STOCKHOLDERS' EQUITY

Accrued expenses and other current liabilities	3,120	3,502
Unearned revenue	4,980	5,226
Deferred income taxes	9,235	8,425
Total liabilities	17,335	17,153
Stockholders' equity	35,129	39,289
Total liabilities and stockholders' equity	52,464	56,442

Summarized results of MNI are as follows:



(Thousands of Dollars)	2015	2014	2013
Operating revenue:
Advertising and marketing services	41,443	44,357	46,373
Subscription	24,372	21,578	17,421
Other	1,449	1,543	1,674
Total operating revenue	67,264	67,478	65,468
Operating expenses:
Compensation	21,106	21,750	23,282
Newsprint and ink	4,409	5,166	5,871
Other operating expenses	29,280	28,477	24,046
Workforce adjustments	459	244	308
Depreciation and amortization	1,630	1,626	1,530
Total operating expenses	56,884	57,263	55,037
Operating income	10,380	10,215	10,431
Non-operating income, net	424	408	415
Income before income taxes	10,804	10,623	10,846
Income tax expense	3,972	3,855	3,895
Net income	6,832	6,768	6,951

Equity in earnings of MNI	3,416	3,384	3,509

Summarized cash flows of MNI are as follows:



(Thousands of Dollars)	2015		2014		2013

Net income	6,832		6,768		6,951
Cash provided by operating activities	8,593		9,448		8,643
Cash required for investing activities	(432	)	(255	)	(155	)
Cash required for financing activities (dividends paid)	(11,000	)	(9,500	)	(11,500	)
Net decrease in cash and cash equivalents	(2,839	)	(307	)	(3,012	)
Cash and cash equivalents:
Beginning of year	12,245		12,552		15,564
End of year	9,406		12,245		12,552

Fees for editorial services provided to MNI by us are included in other revenue in the Consolidated Statements of Operations and Comprehensive Income (Loss) and totaled $7,242,000, $7,050,000 and $7,346,000, in 2015, 2014 and 2013, respectively.

At September 27, 2015, the carrying value of the Company's 50% investment in MNI is $17,561,000.