Tribune Reports 2005 First Quarter Results

Tribune Reports 2005 First Quarter Results

CHICAGO, April 15 /PRNewswire-FirstCall/ -- Tribune Company (NYSE:TRB) today reported first quarter 2005 diluted earnings per share (EPS) of $.44 compared with $.35 in the first quarter of 2004. The 2005 first quarter results included a net non-operating gain of $.03 per diluted share, while the 2004 first quarter results included a net non-operating loss of $.05 per diluted share.

Tribune presents earnings per share amounts on a generally accepted accounting principles ("GAAP") basis only. This differs from the pro forma earnings per share amounts supplied by broker analysts to databases such as First Call.

"Our results in the first quarter were in line with our expectations," said Dennis FitzSimons, Tribune chairman, president and chief executive officer. "Newspaper advertising revenue growth was solid in January and February, although March was negatively impacted by the timing of the Easter holiday. In television, our results reflected overall industry softness and the impact of Local People Meters in our major markets."

FIRST QUARTER 2005 RESULTS(1)
(Compared to First Quarter 2004)

CONSOLIDATED

Tribune's 2005 first quarter operating revenues decreased 1 percent to $1.32 billion from $1.33 billion in the 2004 first quarter. Consolidated cash operating expenses increased $5 million, or 0.5 percent. Operating cash flow was down 7 percent to $310 million, while operating profit decreased 8 percent to $252 million.

PUBLISHING

Publishing's first quarter operating revenues were $1 billion, flat compared with last year's first quarter. However, excluding Newsday, first quarter operating revenues were up 2 percent. Newsday implemented lower ad rates as a result of the significant reduction in reported circulation in September 2004. Publishing cash operating expenses were down 1 percent. Publishing operating cash flow was $243 million, a 4 percent increase from $235 million. Publishing operating profit increased 5 percent to $199 million, up from $190 million in 2004.

Management Discussion

-- Advertising revenues increased 2 percent for the quarter. Excluding
Newsday, advertising revenues increased 3 percent.
-- Retail advertising revenues rose 2 percent for the quarter. Increases
in auto supply, food and drug, hardware/home improvement and health
care categories were partially offset by declines in education and
apparel/fashion. Preprint revenues increased 8 percent, led by a 14
percent increase in Los Angeles, a 9 percent increase in Chicago and a
10 percent increase in South Florida; Newsday was up 2 percent.
-- National advertising was down 1 percent for the quarter with decreases
in the transportation, technology, resorts and movie categories,
partially offset by increases in financial and auto.
-- Classified advertising was up 3 percent for the quarter. Help wanted
revenues for the group were up 11 percent; Los Angeles was up 7
percent; Chicago rose 11 percent; and Newsday was down 15 percent.
Real estate revenues rose 4 percent and auto revenues were down 5
percent for the quarter.
-- Circulation revenues were down 9 percent primarily due to volume
declines at each of the Company's newspapers, as well as selectively
higher discounting. The largest revenue declines were at Los Angeles
and Newsday. Excluding these two newspapers, circulation revenues
were down 4 percent.
-- Interactive revenues, which are included in the above categories, were
up 39 percent to $40 million due to strength in classified and
banner/sponsorship advertising.
-- Cash operating expenses decreased 1 percent due primarily to lower
compensation expense, partially offset by higher newsprint prices.
Newsprint and ink expense was 2 percent higher as newsprint cost per
ton was up 12 percent while consumption decreased 9 percent.

BROADCASTING AND ENTERTAINMENT

Broadcasting and Entertainment's first quarter operating revenues decreased 6 percent to $310 million, down from $329 million in 2004. Group cash operating expenses were up 5 percent, or $11 million. The increase was due to $13.5 million of additional compensation expense recorded by the Chicago Cubs related to the Sammy Sosa trade. Operating cash flow was $80 million, down 27 percent from $110 million, and operating profit decreased 31 percent to $67 million from $97 million.

Television's first quarter revenues decreased 5 percent to $290 million, down from $306 million in 2004. Television cash operating expenses were down 1 percent from last year. Television operating cash flow was $99 million, a 13 percent decrease from $114 million. Television operating profit declined 15 percent to $87 million, down from $102 million.

Management Discussion

-- Television advertising declines were primarily driven by weakness in
the automotive, movie and telecom categories. Television revenues in
New York, Los Angeles, Chicago and Boston continue to be impacted by
Local People Meters.
-- Television cash operating expenses were down 1 percent primarily due
to lower sales commissions and cost reduction initiatives.
-- Radio/entertainment results reflect the impact of the Cubs trade noted
above.

EQUITY RESULTS

Net equity income was $0.5 million in the first quarter of 2005, compared with a net loss of $4 million in the first quarter of 2004. The increase reflects improvements at Comcast SportsNet Chicago and TV Food Network.

NON-OPERATING ITEMS

In the 2005 first quarter, Tribune recorded a pretax non-operating loss of $4 million. In addition, the Company recorded favorable income tax settlement adjustments of $12 million as a reduction in income tax expense. In the aggregate, non-operating items in the first quarter of 2005 resulted in an after-tax gain of $9 million, or $.03 per diluted share.

In the 2004 first quarter, the Company recorded a pretax non-operating loss of $27 million ($16 million after-tax, or $.05 per diluted share). Non- operating items in the first quarter of 2004 included a loss from marking-to-market the Company's PHONES derivatives and related Time Warner investment and a gain from the sale of the Company's ownership interest in La Opinion.

ADDITIONAL FINANCIAL DETAILS

Corporate expenses for the 2005 first quarter increased to $13.4 million from $12.9 million in the first quarter of 2004 primarily due to higher retirement plan expense.

Net interest expense for the 2005 first quarter decreased to $34 million, down 25 percent from $45 million in the first quarter of 2004. The decrease was primarily due to the retirement of higher interest rate debt, which was replaced with commercial paper in the second quarter of 2004. Debt, excluding the PHONES, was $1.8 billion at the end of the 2005 first quarter compared with $2.0 billion at the end of the first quarter of 2004.

The effective tax rate in the 2005 first quarter was 33.5 percent, compared with 38.7 percent in the 2004 first quarter. In the first quarter of 2005, the Company reduced its income tax expense and liabilities by $12 million as a result of favorably resolving certain federal income tax issues.

Diluted average shares outstanding declined by 5 percent primarily due to significant stock repurchases in 2004.

Capital expenditures were about $37 million in the first quarter of 2005.

2005 FINANCIAL ASSUMPTIONS

Consolidated revenues will continue to be impacted by many factors, including changes in national and local economic conditions, job creation, circulation levels and audience shares. As a result of this limited visibility, the Company is currently not providing revenue guidance for 2005; investors are encouraged to review the Company's monthly revenue releases for current trends.

Consolidated operating expenses are expected to decline in 2005 due to the absence of the $90 million advertising settlement charge and the $41 million of position elimination costs recorded in 2004. Other consolidated operating expenses are expected to be up about 2 percent for 2005 due to higher expenses for retirement and medical plans and newsprint, along with a slight increase in broadcast rights expense. Net equity income is projected to be somewhat higher than 2004. Interest expense is expected to be somewhat below 2004 due to the full year impact of the debt refinancing in the second quarter of 2004. The effective income tax rate for 2005 is expected to be approximately 38 percent. Capital expenditures are projected to increase slightly over 2004. The Company expects to adopt Financial Accounting Standard No. 123R, which requires the expensing of stock options, in the first quarter of 2006.

WEBCAST OF CONFERENCE CALL

Today at 8 a.m. (CDT), a live webcast of the 2005 first quarter conference call will be accessible through http://www.tribune.com/ and http://www.ccbn.com/ . An archive of the webcast will be available on these sites from April 15 through April 22. More information about Tribune is available at http://www.tribune.com/ or by calling 800/757-1694.

TRIBUNE (NYSE:TRB) is one of the country's premier media companies, operating businesses in publishing and broadcasting. It reaches more than 80 percent of U.S. households and is the only media organization with newspapers, television stations and web sites in the nation's top three markets. In publishing, Tribune operates 11 leading daily newspapers including the Los Angeles Times, Chicago Tribune and Newsday, plus a wide range of targeted publications including Spanish-language Hoy. The Company's broadcasting group operates 26 television stations; Superstation WGN on national cable; WGN-AM in Chicago; and the Chicago Cubs baseball team. Popular news and information web sites complement Tribune's print and broadcast properties and extend the Company's nationwide audience.

This press release contains certain comments or forward-looking statements that are based largely on the Company's current expectations and are subject to certain risks, trends and uncertainties. Such comments and statements should be understood in the context of Tribune's publicly available reports filed with the Securities and Exchange Commission ("SEC"), including the most current annual 10-K report and quarterly 10-Q report, which contain a discussion of various factors that may affect the Company's business or financial results. Any of these factors could cause actual future performance to differ materially from current expectations. Tribune Company is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this document by wire services or Internet service providers. This press release is being furnished to the SEC through a Form 8-K.

(1) "Operating profit" for each segment excludes interest income and
expense, equity income and losses, non-operating items and income
taxes. "Operating cash flow" is defined as operating profit before
depreciation and amortization. "Cash operating expenses" are defined
as operating expenses before depreciation and amortization. Tables
accompanying this release include a reconciliation of operating profit
to operating cash flow and operating expenses to cash operating
expenses. References to individual daily newspapers include their
related businesses.

TRIBUNE COMPANY
FIRST QUARTER RESULTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)

FIRST QUARTER (A)
---------------------------------
%
2005 2004 Change
--------- --------- ------
OPERATING REVENUES $ 1,315,744 $ 1,332,317 (1.2)
OPERATING EXPENSES 1,063,687 1,059,042 0.4
--------- ---------
OPERATING PROFIT(B) 252,057 273,275 (7.8)

Net Income (Loss) on Equity
Investments 471 (4,373) NM
Interest Income 1,082 1,276 (15.2)
Interest Expense (35,091) (46,677) (24.8)
Non-Operating Items(C) (3,843) (26,579) NM
--------- ---------
Income Before Income Taxes 214,676 196,922 9.0

Income Taxes(C) (71,829) (76,241) (5.8)
--------- ---------
NET INCOME 142,847 120,681 18.4

Preferred Dividends (2,090) (2,077) 0.6
--------- ---------
Net Income Attributable
to Common Shares $ 140,757 $ 118,604 18.7
========= =========

EARNINGS PER SHARE

Basic $ .44 $ .36 22.2
--------- ---------
Diluted(D) $ .44 $ .35 25.7
--------- ---------
DIVIDENDS PER COMMON SHARE $ .18 $ .12 50.0
--------- ---------
Diluted Weighted Average Common
Shares Outstanding(E) 320,366 336,094 (4.7)
--------- ---------

(A) 2005 first quarter: Dec. 27, 2004 to March 27, 2005. (13 weeks)
2004 first quarter: Dec. 29, 2003 to March 28, 2004. (13 weeks)

(B) Operating profit excludes interest income and expense, equity
income and losses, non-operating items and income taxes.

(C) The first quarter of 2005 included the following non-operating items:

Pretax After-tax Diluted
Gain(Loss) Gain(Loss) EPS
--------- --------- ---------
Loss on derivatives and
related investments (1) $ (2,252)$ (1,374)$ -
Gain on sales of investments 1,108 676 -
Loss on investment write-downs
and other (2,699) (1,646) -
Income tax settlement
adjustments (2) - 11,829 .03
--------- --------- ---------
Total non-operating items $ (3,843)$ 9,485 $ .03
========= ========= =========

The first quarter of 2004 included the following non-operating items:

Pretax After-tax Diluted
Gain(Loss) Gain(Loss) EPS
--------- --------- ---------
Loss on derivatives and
related investments(1) $ (45,501)$ (27,755)$ (.09)
Gain on sales of investments(3) 21,518 13,126 .04
Loss on investment write-downs
and other (2,596) (1,584) -
--------- --------- ---------
Total non-operating items $ (26,579)$ (16,213)$ (.05)
========= ========= =========

(1) Loss on derivatives and related investments represents the net
change in fair values of the Company's PHONES derivatives and
related Time Warner shares.

(2) In the first quarter of 2005, the Company reduced its income tax
expense and liabilities by a total of $12 million as a result of
favorably resolving certain federal income tax issues.

(3) In the first quarter of 2004, gain on sales of investments
relates primarily to the sale of the Company's 50% interest in La
Opinion.

(D) For the first quarters of 2005 and 2004, weighted average common
shares outstanding used in the calculation of diluted EPS were
adjusted for the dilutive effect of stock options. The Company's
Series C, D-1 and D-2 convertible preferred shares were not included
in the calculation of diluted EPS for the first quarter of either year
because their effects were antidilutive.
Following are the calculations for the first quarter:

First Quarter
---------------------
2005 2004
--------- ---------
Net Income $ 142,847 $ 120,681
Dividends for Series C, D-1
and D-2 preferred stock (2,090) (2,077)
--------- ---------
Net income attributable to
common shares $ 140,757 $ 118,604
--------- ---------
Weighted average common
shares outstanding 317,307 329,303
Assumed exercise of stock
options, net of common shares
assumed repurchased 3,059 6,791
--------- ---------
Adjusted weighted average
common shares outstanding 320,366 336,094
--------- ---------

Diluted earnings per share $ .44 $ .35
========= =========

(E) The number of common shares outstanding, in thousands, at March 27,
2005 was 317,515.

TRIBUNE COMPANY
FIRST QUARTER BUSINESS SEGMENT DATA (Unaudited)
(In thousands)

FIRST QUARTER
--------------------------------
%
2005 2004 Change
PUBLISHING --------- --------- ------
Operating Revenues $ 1,005,512 $ 1,003,583 0.2
Cash Operating Expenses(A) (762,327) (768,942) (0.9)
--------- ---------
Operating Cash Flow(B)(C) 243,185 234,641 3.6
Depreciation and Amortization Expense (44,646) (45,093) (1.0)
--------- ---------
Total Operating Profit(C) $ 198,539 $ 189,548 4.7
========= =========

BROADCASTING AND ENTERTAINMENT
Operating Revenues
Television $ 290,089 $ 306,439 (5.3)
Radio/Entertainment 20,143 22,295 (9.7)
--------- ---------
Total Operating Revenues 310,232 328,734 (5.6)

Cash Operating Expenses(A)
Television (190,970) (192,277) (0.7)
Radio/Entertainment(D) (39,450) (26,742) 47.5
--------- ---------
Total Cash Operating Expenses(D) (230,420) (219,019) 5.2

Operating Cash Flow(B)(C)
Television 99,119 114,162 (13.2)
Radio/Entertainment (19,307) (4,447) NM
--------- ---------
Total Operating Cash Flow 79,812 109,715 (27.3)

Depreciation and
Amortization Expense
Television (11,678) (11,759) (0.7)
Radio/Entertainment (1,168) (1,337) (12.6)
--------- ---------
Total Depreciation and
Amortization Expense (12,846) (13,096) (1.9)

Operating Profit(Loss)(C)
Television 87,441 102,403 (14.6)
Radio/Entertainment (20,475) (5,784) NM
--------- ---------
Total Operating Profit $ 66,966 $ 96,619 (30.7)
========= =========

CORPORATE EXPENSES
Operating Cash Flow(B)(C) $ (13,047)$ (12,471) 4.6
Depreciation and Amortization Expense (401) (421) (4.8)
--------- ---------
Total Operating Loss(C) $ (13,448)$ (12,892) 4.3
========= =========

CONSOLIDATED
Operating Revenues $ 1,315,744 $ 1,332,317 (1.2)
Cash Operating Expenses(A) (1,005,794) (1,000,432) 0.5
--------- ---------
Operating Cash Flow(B)(C) 309,950 331,885 (6.6)
Depreciation and Amortization Expense (57,893) (58,610) (1.2)
--------- ---------
Total Operating Profit (C) $ 252,057 $ 273,275 (7.8)
========= =========

(A)The Company uses cash operating expenses to evaluate internal
performance. The Company has presented cash operating expenses because
it is a common measure used by rating agencies, financial analysts and
investors. Cash operating expenses are not a measure of financial
performance under generally accepted accounting principles("GAAP") and
should not be considered in isolation or as a substitute for measures
of performance prepared in accordance with GAAP.

Following is a reconciliation of operating expenses to cash operating
expenses for the first quarter of 2005:

Publishing B&E Corporate Consol.
--------- --------- --------- ---------
Operating expenses $ 806,973 $ 243,266 $ 13,448 $1,063,687
Less: depreciation and
amortization expense 44,646 12,846 401 57,893
--------- --------- --------- ---------
Cash operating expenses $ 762,327 $ 230,420 $ 13,047 $1,005,794
========= ========= ========= =========

Following is a reconciliation of operating expenses to cash operating
expenses for the first quarter of 2004:

Publishing B&E Corporate Consol.
--------- --------- --------- ---------
Operating expenses $ 814,035 $ 232,115 $ 12,892 $1,059,042
Less: depreciation and
amortization expense 45,093 13,096 421 58,610
--------- --------- --------- ---------
Cash operating expenses $ 768,942 $ 219,019 $ 12,471 $1,000,432
========= ========= ========= =========

(B)Operating cash flow is defined as operating profit before depreciation
and amortization. The Company uses operating cash flow along with
operating profit and other measures to evaluate the financial
performance of the Company's business segments. The Company has
presented operating cash flow because it is a common alternative
measure of financial performance used by rating agencies, financial
analysts and investors. These groups use operating cash flow along with
other measures as a way to estimate the value of a company. The
Company's definition of operating cash flow may not be consistent with
that of other companies. Operating cash flow does not represent cash
provided by operating activities as reflected in the Company's
consolidated statements of cash flows, is not a measure of financial
performance under GAAP and should not be considered in isolation or as
a substitute for measures of performance prepared in accordance with
GAAP.

(C)Operating profit for each segment excludes interest income and
expense, equity income and losses, non-operating items and income
taxes.

Following is a reconciliation of operating profit(loss) to operating
cash flow for the first quarter of 2005:

Publishing B&E Corporate Consol.
--------- --------- --------- ---------
Operating profit(loss) $ 198,539 $ 66,966 $ (13,448)$ 252,057
Add back: depreciation and
amortization expense 44,646 12,846 401 57,893
--------- --------- --------- ---------
Operating cash flow $ 243,185 $ 79,812 $ (13,047)$ 309,950
========= ========= ========= =========

Following is a reconciliation of operating profit(loss) to operating
cash flow for the first quarter of 2004:

Publishing B&E Corporate Consol.
--------- --------- --------- ---------
Operating profit(loss) $ 189,548 $ 96,619 $ (12,892)$ 273,275
Add back: depreciation and
amortization expense 45,093 13,096 421 58,610
--------- --------- --------- ---------
Operating cash flow $ 234,641 $ 109,715 $ (12,471)$ 331,885
========= ========= ========= =========

(D)Broadcasting and entertainment cash operating expenses for the first
quarter of 2005 include $13.5 million related to the Chicago Cubs trade
of Sammy Sosa.

TRIBUNE COMPANY
SUMMARY OF REVENUES (Unaudited)
For Period 3 and First Quarter Ended March 27, 2005
(In thousands)

Period 3 (4 weeks) First Quarter (13 weeks)
2005 2004 % 2005 2004 %
---------- ---------- --- ----------- ---------- ---
Publishing
----------
Advertising
Retail $ 96,248 $ 97,793 (1.6) $ 301,754 $ 294,868 2.3
National 60,372 63,773 (5.3) 206,509 207,667 (0.6)
Classified 88,753 89,151 (0.4) 279,726 272,188 2.8
---------- ---------- ----------- ----------
Sub-Total(A) 245,373 250,717 (2.1) 787,989 774,723 1.7
Circulation 46,598 51,650 (9.8) 151,716 165,903 (8.6)
Other 21,210 20,637 2.8 65,807 62,957 4.5
---------- ---------- ----------- ----------
Segment Total 313,181 323,004 (3.0) 1,005,512 1,003,583 0.2
---------- ---------- ----------- ----------
Broadcasting &
Entertainment
--------------
Television 95,503 102,247 (6.6) 290,089 306,439 (5.3)
Radio/Enter. 10,056 10,349 (2.8) 20,143 22,295 (9.7)
---------- ---------- ----------- ----------
Segment Total 105,559 112,596 (6.2) 310,232 328,734 (5.6)
---------- ---------- ----------- ----------
Consol. Rev. $ 418,740 $ 435,600 (3.9) $ 1,315,744 $1,332,317 (1.2)
========== ========== =========== ==========

(A)Publishing advertising revenues for 2004 have been reclassified to
conform with the 2005 presentation. There was no effect on total
revenues.

TRIBUNE COMPANY
SUMMARY OF NEWSPAPER ADVERTISING VOLUME (Unaudited)(A)
For Period 3 and First Quarter Ended March 27, 2005
(In thousands)

Period 3 (4 weeks) First Quarter (13 weeks)
2005 2004 % 2005 2004 %
---------- ---------- --- ---------- ---------- ---
Full Run
--------
L.A. Times 168 182 (7.7) 583 622 (6.3)
Chicago Tribune 151 172 (12.2) 503 527 (4.6)
Newsday 109 122 (10.7) 353 362 (2.5)
Other Dailies (B) 1,044 1,160 (10.0) 3,289 3,519 (6.5)
---------- ---------- ----------- ----------
Total 1,472 1,636 (10.0) 4,728 5,030 (6.0)
========== ========== =========== ==========

Part Run
--------
L.A. Times 411 449 (8.5) 1,310 1,441 (9.1)
Chicago Tribune 547 538 1.7 1,672 1,550 7.9
Newsday 154 144 6.9 460 427 7.7
Other Dailies (B) 520 502 3.6 1,599 1,549 3.2
---------- ---------- ----------- ----------
Total 1,632 1,633 (0.1) 5,041 4,967 1.5
========== ========== =========== ==========

Total Advertising Inches
------------------------
Full Run
Retail 446 465 (4.1) 1,405 1,399 0.4
National 297 351 (15.4) 998 1,063 (6.1)
Classified 729 820 (11.1) 2,325 2,568 (9.5)
---------- ---------- ----------- ----------
Sub-Total 1,472 1,636 (10.0) 4,728 5,030 (6.0)
Part Run 1,632 1,633 (0.1) 5,041 4,967 1.5
---------- ---------- ----------- ----------
Total 3,104 3,269 (5.0) 9,769 9,997 (2.3)
========== ========== =========== ==========

Preprint Pieces
---------------
L.A. Times 272,894 257,247 6.1 890,896 755,763 17.9
Chicago Tribune 351,294 280,092 25.4 1,069,207 902,555 18.5
Newsday 208,976 209,418 (0.2) 667,629 637,080 4.8
Other
Dailies (B) 299,592 327,120 (8.4) 974,070 973,340 0.1
---------- ---------- ----------- ----------
Total 1,132,756 1,073,877 5.5 3,601,802 3,268,738 10.2
========== ========== =========== ==========

(A)Volume for 2004 has been modified to conform with the 2005
presentation. Volume is based on preliminary internal data, which may
be updated in subsequent reports. Advertising volume is presented only
for daily newspapers.

(B)Other daily newspapers include The Baltimore Sun, South Florida Sun-
Sentinel, Orlando Sentinel, The Hartford Courant, The Morning Call,
Daily Press, The Advocate, Greenwich Time, Hoy, New York, Hoy, Chicago
and Hoy, Los Angeles.

Source: Tribune Company

CONTACT: Media, Gary Weitman, +1-312-222-3394 (office), or
+1-312-222-1573 (fax), gweitman@tribune.com , or Investors, Ruthellyn Musil,
+1-312-222-3787 (office), +1-312-222-1573 (fax), rmusil@tribune.com , both of
Tribune Company

Web site: http://www.tribune.com/

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