Tribune Reports 2005 Fourth Quarter and Full Year Results

Feb 01, 2006 /PRNewswire-FirstCall via COMTEX/ -- Tribune Company (TRB) today reported fourth quarter 2005 diluted earnings per share of $.43 compared with $.67 in the fourth quarter of 2004. For the full year 2005, Tribune reported diluted earnings per share of $1.67, flat with 2004.

Fourth quarter 2005 and 2004 results included the following:


-- A severance charge of $.09 per diluted share in the 2005 quarter for the elimination of approximately 900 positions, compared with a charge of $.05 per diluted share in the 2004 quarter for the elimination of approximately 230 positions. The position eliminations in both years were primarily in the publishing group.

-- A charge of $.04 per diluted share, or $22 million, in the 2005 quarter for the announced shutdown of the Los Angeles Times San Fernando Valley printing facility. This charge included $16 million of accelerated depreciation and $6 million of cash operating expenses.

-- A pension curtailment gain of $.03 per diluted share in the 2005 quarter as a result of the Company's replacement of certain defined benefit plans with a defined contribution plan.

-- A net non-operating loss of $.04 per diluted share in the 2005 quarter, compared with a net non-operating gain of $.06 per diluted share in the 2004 quarter.

-- A charge of $.05 per diluted share in the 2004 quarter for the cumulative effect of a change in accounting principle related to intangible assets.

Full year 2005 and 2004 results included the following:

-- A charge of $.09 per diluted share in 2005 for the elimination of approximately 900 positions, compared with a charge of $.07 per diluted share in 2004 for the elimination of approximately 600 positions. The position eliminations in both years were primarily in the publishing group.

-- A charge of $.04 per diluted share, or $22 million, in 2005 for the announced shutdown of the Los Angeles Times San Fernando Valley printing facility. The charge included $16 million of accelerated depreciation and $6 million of cash operating expenses.

-- A pension curtailment gain of $.03 per diluted share in 2005 as a result of the Company's replacement of certain defined benefit plans with a defined contribution plan.

-- A charge of $.17 per diluted share in 2004 related to the anticipated settlement with advertisers regarding misstated circulation at Newsday and Hoy, New York.

-- A net non-operating loss of $.30 per diluted share in 2005, compared with a net non-operating loss of $.28 per diluted share in 2004.

-- A charge of $.05 per diluted share in 2004 for the cumulative effect of a change in accounting principle related to intangible assets.

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.


Tribune Reports 2005 Fourth Quarter and Full Year Results
Feb 01, 2006 /PRNewswire-FirstCall via COMTEX/ -- Tribune Company (TRB) today reported fourth quarter 2005 diluted earnings per share of $.43 compared with $.67 in the fourth quarter of 2004. For the full year 2005, Tribune reported diluted earnings per share of $1.67, flat with 2004. Fourth quarter 2005 and 2004 results included the following:

-- A severance charge of $.09 per diluted share in the 2005 quarter for
the elimination of approximately 900 positions, compared with a charge
of $.05 per diluted share in the 2004 quarter for the elimination of
approximately 230 positions. The position eliminations in both years
were primarily in the publishing group.

-- A charge of $.04 per diluted share, or $22 million, in the 2005
quarter for the announced shutdown of the Los Angeles Times San
Fernando Valley printing facility. This charge included $16 million
of accelerated depreciation and $6 million of cash operating expenses.

-- A pension curtailment gain of $.03 per diluted share in the 2005
quarter as a result of the Company's replacement of certain defined
benefit plans with a defined contribution plan.

-- A net non-operating loss of $.04 per diluted share in the 2005
quarter, compared with a net non-operating gain of $.06 per diluted
share in the 2004 quarter.

-- A charge of $.05 per diluted share in the 2004 quarter for the
cumulative effect of a change in accounting principle related to
intangible assets.


Full year 2005 and 2004 results included the following:

-- A charge of $.09 per diluted share in 2005 for the elimination of
approximately 900 positions, compared with a charge of $.07 per
diluted share in 2004 for the elimination of approximately
600 positions. The position eliminations in both years were primarily
in the publishing group.

-- A charge of $.04 per diluted share, or $22 million, in 2005 for the
announced shutdown of the Los Angeles Times San Fernando Valley
printing facility. The charge included $16 million of accelerated
depreciation and $6 million of cash operating expenses.

-- A pension curtailment gain of $.03 per diluted share in 2005 as a
result of the Company's replacement of certain defined benefit plans
with a defined contribution plan.

-- A charge of $.17 per diluted share in 2004 related to the anticipated
settlement with advertisers regarding misstated circulation at Newsday
and Hoy, New York.

-- A net non-operating loss of $.30 per diluted share in 2005, compared
with a net non-operating loss of $.28 per diluted share in 2004.

-- A charge of $.05 per diluted share in 2004 for the cumulative effect
of a change in accounting principle related to intangible assets.


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.

"In 2005, our local media businesses generated $1.4 billion in operating cash flow and we repurchased 12 million shares of our stock," said Dennis FitzSimons, Tribune chairman, president and chief executive officer. "We have taken aggressive steps to reduce expenses. Now, our top priority for 2006 is revenue growth. The recent decision to affiliate 16 of our TV stations with The CW Network is a great step forward for our broadcasting group. We also look to continue expanding our interactive operations."

FOURTH QUARTER 2005 RESULTS (1) (Compared to Fourth Quarter 2004)

CONSOLIDATED

Tribune's 2005 fourth quarter operating revenues decreased 5 percent to $1.41 billion from $1.48 billion in the 2004 fourth quarter. Consolidated cash operating expenses were up 2 percent, or $17 million. In the fourth quarter of 2005, cash operating expenses included $45 million of severance charges, $6 million of expenses related to the shutdown of the Los Angeles Times San Fernando Valley printing facility and a pension curtailment gain of $18 million. In the fourth quarter of 2004, operating expenses included $24 million of severance charges. All other cash operating expenses were up 1%, or $7 million, for the quarter. Depreciation and amortization expense in the fourth quarter of 2005 included accelerated depreciation of $16 million related to the shutdown of the Los Angeles Times San Fernando Valley printing facility. Operating cash flow was down 20 percent to $341 million from $427 million, while operating profit decreased 27 percent to $269 million from $369 million.

The plant shutdown and elimination of approximately 900 positions will result in annual savings of approximately $55-$60 million, primarily in publishing, beginning in 2006.

PUBLISHING

Publishing's fourth quarter operating revenues were $1.07 billion, down 2 percent compared with last year's fourth quarter. Publishing cash operating expenses were up 2 percent, or $20 million. Publishing operating cash flow was $233 million, a 17 percent decrease from $279 million in 2004. Publishing operating profit decreased 26 percent to $174 million, down from $234 million in 2004.

Publishing operating profit in the 2005 fourth quarter included $22 million of expenses related to the shutdown of the Los Angeles Times San Fernando Valley printing facility, $43 million of severance charges for the elimination of over 800 positions and a pension curtailment gain of $13 million. Publishing operating profit in the 2004 fourth quarter included $24 million of severance charges for the elimination of approximately 230 positions.

Management Discussion

-- Advertising revenues decreased 2 percent for the quarter.

-- Retail advertising revenues were down 4 percent for the quarter. Decreases in the department stores, furniture/home furnishings, electronics, and food & drug store categories were partially offset by increases in the hardware/home improvement and personal services categories. Preprint revenues, which are principally included in retail, were down 3 percent, due primarily to volume declines at Newsday. Excluding Newsday, preprint revenues were up 1 percent due to strength in Los Angeles.

-- National advertising revenues were down 5 percent for the quarter, with decreases in the wireless, technology, movies and auto categories, partially offset by an increase in the financial category.

-- Classified advertising revenues were up 3 percent for the quarter: help wanted was up 11 percent, real estate rose 19 percent, while auto was down 16 percent for the quarter.

-- Interactive revenues, which are included in the above advertising categories, were up 40 percent to $46 million, mainly due to increases in classified help wanted.

-- Circulation revenues were down 4 percent for the quarter.

-- Individually paid circulation (home delivery plus single copy) for Tribune's 11 metro newspapers averaged 2.8 million copies daily (Mon-Fri) and 4.2 million copies Sunday, down 2.0 percent and 0.5 percent, respectively, from the prior year's quarter.

-- Total net paid circulation averaged 3.0 million copies daily (Mon-Fri) and 4.4 million copies Sunday for the 2005 fourth quarter, a decline of 3.7 percent and 1.9 percent, respectively, from the prior year's quarter, as the company continued to manage down "other paid" circulation.

-- Cash operating expenses increased 2 percent, or $20 million, primarily due to the previously discussed plant shutdown costs and higher severance charges, partially offset by the pension curtailment gain. All other cash expenses rose $8 million primarily due to a 6 percent rise in newsprint and ink expense; higher market prices were partially offset by lower consumption.

BROADCASTING AND ENTERTAINMENT

Broadcasting and entertainment's fourth quarter operating revenues decreased 11 percent to $343 million, down from $385 million in 2004. Group cash operating expenses were up 1 percent compared with the 2004 fourth quarter. Operating cash flow was $118 million, down 27 percent from $162 million, and operating profit decreased 30 percent to $105 million from $149 million.

Television's fourth quarter revenues decreased 10 percent to $319 million, down from $352 million in 2004. Television cash operating expenses were up 7 percent, or $13 million, from last year. Television operating cash flow was $112 million, a 29 percent decrease from $158 million. Television operating profit declined 31 percent to $101 million, down from $147 million.

Management Discussion

-- Television advertising revenues reflect softness in the telecom, auto and food categories, partially offset by increases in the financial and education categories. Station revenues continue to be impacted by ratings issues and market softness.

-- Television cash operating expenses were up 7 percent compared with last year primarily due to higher broadcast rights amortization expense.

-- FTEs were down 3 percent, or approximately 90 positions, from the prior year.

-- Radio/entertainment revenues for 2005 reflect lower syndication revenues at Tribune Entertainment and fewer home games for the Chicago Cubs. Cash operating expenses in the fourth quarter of 2005 included a one-time $5.4 million net recovery of legal costs from a litigation settlement.

EQUITY RESULTS

Net equity income was $21 million in the fourth quarter of 2005, compared with $20 million in the fourth quarter of 2004. The increase was primarily due to higher TV Food Network income.

NON-OPERATING ITEMS

In the 2005 fourth quarter, Tribune recorded a pretax non-operating loss of $20 million ($12 million after-tax, or $.04 per diluted share), while in the 2004 fourth quarter the Company recorded a pretax non-operating gain of $29 million ($18 million after-tax, or $.06 per diluted share). Non-operating items in both quarters were primarily from marking-to-market the derivative component of the Company's PHONES and the related Time Warner investment.

FULL YEAR RESULTS CONSOLIDATED

For the full year 2005, operating revenues decreased 2 percent to $5.6 billion, down from $5.7 billion in 2004. Consolidated cash operating expenses were down 2 percent compared with the prior year. Operating cash flow was $1.39 billion, a 4 percent decrease compared with $1.45 billion reported in 2004. Operating profit was down 6 percent to $1.15 billion, from $1.22 billion in 2004.

PUBLISHING

For the full year 2005, operating revenues for publishing decreased 1 percent to $4.10 billion, down from $4.13 billion in 2004. Cash operating expenses decreased 2 percent in 2005. Operating cash flow rose 5 percent to $951 million, from $905 million in 2004. Operating profit increased 5 percent, or $34 million, in 2005.

For the full year 2005, publishing operating profit included a pretax charge of $22 million for the shutdown of the Los Angeles Times San Fernando Valley printing facility, $43 million of severance charges for the elimination of over 800 positions and a pension curtailment gain of $13 million. For the full year 2004, publishing operating profit included a pretax charge of $90 million related to the anticipated settlement with advertisers regarding misstated circulation at Newsday and Hoy, New York. The full year 2004 also included a pretax charge of $41 million for the elimination of about 600 positions.

BROADCASTING AND ENTERTAINMENT

For the full year 2005, operating revenues for broadcasting and entertainment decreased 6 percent to $1.5 billion, down from $1.6 billion in 2004. Cash operating expenses increased 1 percent in 2005. Operating cash flow declined 18 percent to $488 million from $597 million. Operating profit decreased 20 percent to $437 million, down from $544 million.

For the full year 2005, operating revenues for television decreased 8 percent to $1.25 billion, down from $1.35 billion in 2004. Cash operating expenses increased 3 percent in 2005. Operating cash flow declined 22 percent to $449 million from $573 million. Operating profit decreased 23 percent to $403 million, from $526 million in 2004.

EQUITY RESULTS

Equity income was $41 million for the full year 2005, compared with $18 million in 2004. The increase primarily reflects improvements at TV Food Network and Comcast SportsNet Chicago. In addition, the Company is no longer recording losses for The WB Network as the Company's book investment has been reduced to zero.

NON-OPERATING ITEMS

In 2005, Tribune recorded a pretax non-operating gain of $70 million ($43 million after-tax), primarily from marking-to-market the derivative component of the Company's PHONES and the related Time Warner investment. In addition, the Company recorded $150 million of additional income tax expense in the third quarter of 2005 as a result of the Matthew Bender Tax Court ruling, and recorded favorable income tax settlement adjustments of $12 million as a reduction in income tax expense in the first quarter of 2005. In the aggregate, non-operating items in 2005 resulted in an after-tax loss of $96 million, or $.30 per diluted share.

In 2004, Tribune recorded a pretax non-operating loss of $145 million ($90 million after-tax, or $.28 per diluted share). Non-operating items in 2004 primarily included a pretax loss of $141 million from the early retirement of debt, a pretax loss of $18 million from marking-to-market the derivative component of the Company's PHONES and the related Time Warner investment, and an $18 million pretax gain from the sale of the Company's ownership interest in La Opinion.

ADDITIONAL FINANCIAL DETAILS (Fourth Quarter and Full Year)

Corporate expenses for the 2005 fourth quarter decreased 34 percent to $9 million from $14 million in the fourth quarter of 2004. Corporate expenses for the full year 2005 decreased 5 percent to $49 million from $52 million. The declines were primarily due to a pension curtailment gain of approximately $4 million as a result of the Company's replacement of certain defined benefit plans with a defined contribution plan.

Interest expense for the 2005 fourth quarter increased to $46 million, up 32 percent from $35 million in the fourth quarter of 2004. For the full year 2005, interest expense increased 1 percent to $155 million, up from $153 million in 2004. The increases were primarily due to new bond issuances in August and the issuance of commercial paper in late September to pay the federal portion of the Matthew Bender and Mosby tax liabilities. Debt, excluding the PHONES, was $2.8 billion at the end of 2005 and $2.0 billion at the end of 2004.

Diluted weighted average shares outstanding declined by 4 percent for both the fourth quarter and full year primarily due to stock repurchases. The Company repurchased 3.2 million shares in the fourth quarter and 12.2 million shares in the full year 2005.

Capital expenditures were $91 million in the fourth quarter and $206 million for the full year 2005.

RECENT ACTIONS

On January 8, 2006, Newsday's six collective bargaining units voted to accept new four-year contracts that include position eliminations, work rule improvements, and an increase in employee health care contributions, resulting in savings of approximately $7 million in 2006 and more than $10 million annually thereafter. The Company expects to record one-time charges of approximately $15 million in the first quarter of 2006 related to severance and other payments associated with the new contracts.

On January 24, 2006, the Company announced that it had reached a 10-year agreement to affiliate 16 of its television stations (including those in New York, Los Angeles and Chicago) with a new broadcast network being launched in fall 2006 by Warner Bros. Entertainment and CBS Corporation. The new network will air the best programming currently on the WB Network and the UPN Network; the WB Network will shut down at that time. The Company will not incur any costs related to the shutdown of the network. Three of Tribune's current WB network affiliates (Philadelphia, Atlanta and Seattle) will become independent stations at that time.

WEBCAST OF CONFERENCE CALL

Today at 8 a.m. (CST), a live webcast of the 2005 fourth quarter conference call will be accessible through http://www.tribune.com and http://www.fulldisclosure.com . An archive of the webcast will be available on these sites from February 1 through February 8. More information about Tribune is available at http://www.tribune.com or by calling 800/757-1694.

TRIBUNE (TRB) is one of the country's top 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; Chicago's WGN-AM; 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. The Company's next 10-K report to be filed with the SEC may contain updates to the information included in this release.