Ruthellyn Musil, Sr. Vice President/Corporate Relations
Thank you, and good morning everyone. Welcome to our conference call to review our 2006 fourth quarter and full-year results. Our opening remarks will be brief and then we will take questions. As always we expect to finish within the hour. Speakers this morning are Dennis FitzSimons, our CEO, and Don Grenesko, senior vice president and CFO. We also have other members of management available for the Q&A session.
Turning to our press release, Tribune’s fourth quarter diluted earnings per share from continuing operations of $0.96 and full-year diluted earnings per share from continuing operations of $2.39 both on GAAP basis include several non-operating items. Our release contains the information that will enable you to make a meaningful comparison to First Call estimates.
Since we’re here to discuss fourth quarter and the full year results, we’re not going to be taking questions about our strategic review process this morning. And now before turning the call over to Dennis just a quick reminder that our discussion may include some forward-looking statements that are covered in greater detail in Tribune’s SEC filings. Now here is Dennis.
Dennis FitzSimons, Chairman, President & CEO
Thanks, Ruthellyn and good morning. 2006 ended on a positive note for us with improved fourth quarter performance led by broadcasting and interactive. We continue to execute on our interactive strategies as our existing Internet businesses continue to grow at a rapid rate and as we invest in additional interactive ventures. We also saw excellent expense control throughout the company. Excluding the extra week and special items, fourth quarter cash expenses were down slightly in the fourth quarter and flat for the full year.
In 2006, our media businesses generated more than $1.3 billion of operating cash flow and about half of that converted to free cash flow. We achieved these results despite the speculation surrounding our strategic alternative process and that process continues with resolution to be announced this quarter. The process has been rigorous and thorough and as you might imagine we look forward to its completion, so we can spend a 100% of our time focused on the future.
We also executed on the performance improvement plan that we launched in conjunction with our tender offer back in June. We have announced over $470 of the $500 million in asset sales we committed to and we will pass that goal very soon. In addition, we’re implementing initiatives throughout the company that will put us over our $200 million goal of cost savings for 2007 and 2008.
Let’s take a closer look at some of the company’s 2006 accomplishments. Tribune Interactive’s fourth quarter revenues increased 31% over the same period last year and 29% for the full year. Non-classified revenue was up 49% in the fourth quarter and 44% for the year. Classified revenue, up 26% both in the quarter and for the year.
With over 50 websites, Tribune interactive attracted nearly 14 million average monthly unique visitors during the fourth quarter. Our wholly owned digital businesses now represent 6% of publishing revenues, when you include our pro rata share of interactive joint venture revenue, that figure rises to about 10%.
Fourth quarter market revenues for CareerBuilder grew by 29% over the same period last year and 36% for the full year. CareerBuilder grew more than 18 million average monthly unique visitors for the quarter compared to Monster’s 10 million and HotJobs 15 million. As you will recall in July, we increased our equity stake in CareerBuilder to 42.5%. In 2006, we also raised our investments in ShopLocal and Topix.net, a news aggregation site, and also acquired ForSaleByOwner.com, the largest site of its kind on the web.
In print, Tribune newspapers made strides in ‘06 toward increasing readership and individually paid circulation. Four papers, the LA Times, Chicago Tribune, South Florida Sun-Sentinel, and the Daily Press and Newport News reported growth in daily individually paid circulation in the September audit period placing them among the top performers in the industry.
During the fourth quarter, we also completed the outsourcing of our customer service call centers for the top eight newspapers. In January, we began the process of outsourcing our IT help desk operations. I would like to just note that customer service standards in these customer service call centers have remained high.
Newspapers invested in editorial, marketing and sales innovations, new ad positions on section fronts and backs are delivering incremental revenue. We also launched a common advertising system with a sophisticated e-commerce platform for selling classifieds via our newspaper websites.
Other positive developments for the publishing group are additional color capacity in Chicago and South Florida. We have reached profitability at RedEye and amNewYork. Declining newsprint prices will be helpful this year. We’re also seeing good results from the LA Times distribution agreement with Advo, which began in August. The agreement expands the newspapers insert program and will generate about 10 million of operating cash flow in 2007. That’s an additional 10 million.
The LA Times also saw its movie advertising increase in the last two months of the year and is seeing excellent results from its launch of Envelope.com earlier in the year, which is now actually reverse publishing in print to go after revenue share from Variety and the Hollywood Reporter.
Turning to broadcasting, 2006 highlights include the launch of the CW Network. We’re pleased with its performance on our station group, particularly in New York, Chicago and Dallas. Advertiser response continues to bepositive. And CW prime time revenues are up in the mid-single digits for the fourth quarter, better than the first quarter. Also you may have seen the article in the Wall Street Journal this morning, our competitive position has been enhanced versus News Corp.’s MyNetworkTV affiliates, the former UPN affiliates.
Stronger network programming benefits prime time news ratings and provides a better platform. We are promoting our morning news. WPIX in New York and WGN in again in Chicago in particular have seen a positive impact. Advance feedback from advertisers on “Family Guy” and “Two And A Half Men,” our two new sitcoms that will launch this fall, has been great. With this fresh programming and additional program development from the CW, our stations are going to be in great position come September. So on that note let’s go to Don and I will be back to wrap up.
Donald Grenesko, Sr. Vice-President/Finance and Administration
Thank you, Dennis and good morning everyone. On a GAAP basis our diluted earnings per share from continuing operations of $0.96 compares to $0.42 per share in the fourth quarter of 2005. The results for the this year’s fourth quarter included a non-operating gain of $0.29 per share primarily related to the mark-to-market adjustments on the PHONES and related Time Warner shares. A favorable income tax expense adjustment also related to the phones and $0.04 per share gain on the sale of our 27% investment in BrassRing.
In addition, we had a net charge of $0.01 per share for several special items, which was included in continuing operations. As you saw in our press release, consolidated revenues for the fourth quarter increased 5% while cash operating expenses increased 3% and operating cash flow gained 14%. As you are probably aware, 2006 included an extra week of results for both the fourth quarter and full year. Excluding the extra week in special items, consolidated revenues were down 1%, expenses declined slightly and operating cash flow was down 1% for the quarter.
Now let’s take a closer look at our publishing and broadcasting groups. Publishing revenues increased $39 million or 4% to $1.1 billion in the fourth quarter. Advertising revenues rose 4%, with retail up 7% and national gaining 3%. Preprints, which are primarily included in retail were up 7%. Excluding Newsday, preprints rose by 9% and without the extra week total advertising revenues were down 2.5%.
Circulation revenue was up 1% for the quarter, excluding the additional week. Circulation revenue fell by 6% due to single copy declines and continued selective discounting in home delivery. The group individually paid circulation was down 2% daily and 3% Sunday from the same period in 2005. We expect stronger performance in the first two quarters of 2007.
Cash operating expenses in publishing were flat. Newsprint and ink expense increased 2% for the quarter as average newsprint prices rose 6% compared to the fourth quarter of 2005 and consumption decreased by 2%. Excluding the additional week and special items, cash expenses were down 3% for the quarter, a continuation of our ongoing focus on controlling costs and improving efficiencies.
Turning to broadcasting, group operating revenues were up 11% to $356 million for the quarter. Cash expenses for the group were up 14% or $28 million. Television revenues rose by 10% in the fourth quarter to $325 million as we saw improvement at our stations in New York, Los Angeles and Chicago. Television revenues increased 4% without the additional week. Cash operating expenses for the group were up 9% or $16 million due mostly to the additional week in the quarter.
Turning to our equity line, income was $29 million for the quarter, up from $21 million a year ago. The increase is largely due to improvements of TV Food Network, CareerBuilder and Classified Ventures.
Interest expense rose to $94 million for the fourth quarter due to higher debt levels in interest rates. Excluding the PHONES, debt was at $4.4 billion at the end of 2006, compared to $2.8 billion at the end of 2005. The increase was due to financing. 71 million common shares were repurchased in 2006, which reduced our average shares outstanding by 22% in the fourth quarter of 2006, compared to the same period last year. Our capital spending totaled $103 million for the quarter and $222 million for the full year.
And with that I’ll turn it back to Dennis.
Okay. Looking forward, online advertising is off to a strong start with growth rates so far similar to what we saw last year. We will also move forward with our new national network for Internet ad sales in partnership with Gannett and others in the industry. The network will focus on the needs of our customers and allow any national advertiser to reach local newspaper website users more efficiently and better enable us to tap into larger pool of national online dollars.
As you’ve heard from our peers publishing print revenues are soft as 2007 begins. Retailers curtail their spending following the Christmas holidays and real estate revenues are down after a very strong performance last first quarter and that’s particularly true in Florida.
Classified advertising was impacted somewhat by the timing of the Super Bowl which shifted into period two in 2007. Actually it shifted into period one in 2007. We expect trends to improve as the year progresses. On a positive note, as I mentioned earlier, there’s been a turn around in the movie category and that’s been led by the performance of the LA Times, following their initiatives to boost sales, talent, and product offerings. Movies were up significantly in January and making it the third month in a row of growth over the previous year.
In broadcasting, first quarter television ad revenues are pacing down just slightly. January down slightly, February up slightly. Domestic auto continues to be weak. Five of our top categories are pacing ahead of last year led by entertainment and media. We’re also looking for higher equity income driven by our investments in TV Food Network and Comcast SportsNet Chicago.
Just let me wrap up by summarizing our top priorities for 2007. They will be driving, continuing to drive growth in interactive, improving revenue trends in print and targeted prints, redeploying resources to faster growth areas that will improve performance and continuing to operate as efficiently as possible.
With that we will be happy to open up for questions.
QUESTION AND ANSWER SECTION
Lisa Monaco, Morgan Stanley
Q. Could you just give us some more color on December? What was the ad revenue performance excluding the extra week? And then if possible, can you give us the ad revenue performance for the top three papers in December and/or the quarter?
A. Starting with publishing, December ad revenue for five weeks, before the sixth week, was down about 2.5%. And that would be consistent with the trend in total for the fourth quarter. Quarterly revenues without the extra week for the large papers: LA was down about 1.5%, Chicago just under 3%, Newsday around 3.5%, and Florida about 5%.
Q. And then just on the cost side, can you just give us a little bit more color where the $200 million of cost savings is coming from?
A. That’s mostly on the publishing side.
Let me just recap our cost saving programs that are focused on gaining efficiencies while we continue to serve readers and advertisers exceptionally well. We’ve said that a big part of our cost savings will come through our common technology systems — advertising, circulation, editorial — and related savings. And those will total something over $40 million out of the $200 million. We’re also saving money in terms of newsprint through a planned reduction in our web width, going to the new industry standard of 48 inches. We have selectively reduced newsprint consumption in other ways, in effect cutting back on pages and sections that are not as popular with readers and advertisers, and also reducing newsprint consumption tied to other paid circulation. Finally, we’re looking at other efficiencies largely on a local basis market-by-market, again with a focus on serving customers exceptionally well.
One other thing, you asked about broadcasting also. In December, revenue was up plus 9, that’s on a five versus six-week; and plus 4, five versus five.
Alexia Quadrani, Bear Stearns
Q. Do you have the advertising revenue by segment, national, classified and retail, excluding the extra week in the quarter and then December if you have it? And the second question is, if you could let us know what sort of advertising rate hikes you’re expecting in 2007, the publishing group?
A. So by segment, retail revenue was up 1 in the quarter, down 2 in December without the extra week. National, down 5 for the quarter, flat in December. And classified, down 5 for the quarter, down 9 for December. So in total, down about 2.5% both for December and the quarter, ex the 53rd week. In terms of rates, as we have said in prior calls, we approach that on a market segment basis, really looking at both demand for advertising and available supply. On average across all categories, we would expect rates to go up a couple percentage points.
Q. And one last question if I can, it looks like Newsday is still putting a bit of pressure on the preprint business based on results, when on results. When do you think you might cycle through the turnover from last year in that property?
A. By the middle of 2007.
Craig Huber, Lehman Brothers
Q. Just clarify a little bit, can you just give us a little more detail on January for the newspapers, is it tracking better or worse to down 2.5 for the month of December?
A. It’s a little softer than that right for January.
Q. Yes, for January, any other comment on what categories might be a little bit different than the trend you saw in December excluding the extra week?
A. The retail category was softer in January in particular. And then as I mentioned, the real estate, particularly in Florida, where Florida just had a really strong first quarter last year, we have seen declines in real estate advertising.
Q. Would you mind actually quantifying how much real estate is down in Florida right now or the fourth quarter?
A. It’s running down in the 20% plus range. So essentially a year ago, they were up more than that and what we’re doing is roughly giving up a year’s great growth in real estate. And so we will cycle that roughly in the first half of 2007.
Q. Then just back on the costs if I could please. In the fourth quarter excluding the extra week, excluding the various one-time items in publishing, what would you say your non-news print cash cost was percent change there, non-news print?
A. It was down about 3% in the fourth quarter before the extra week.
Q. And then my last question, on this $200 million of cost savings, how much would you say roughly of that is coming from the TV broadcast addition, I mean is it almost immaterial?
A. Yes, just about all of it is publishing.
Paul Ginocchio, Deutsche Bank
Q. Comments on Advo in L.A. I think the $10 million is somewhat what Advo was saying about on the cost side. Are there any revenue synergies there coming through from that JV?
A. Yes, there are. Essentially what we’re doing is on the late week program, we took responsibility for packaging and mailing preprints they sold as well the ones we have sold. They go in daily Times, but then non-subscribing households and beyond also, the leading newspapers out there, they go in the mail. And we booked the revenue for that as well as the postage and packaging costs associated with it. So over the course of 12 months, we think the revenue will be in $30, $35 million range and then there will be more costs mostly postage netting cash flow in the $10 million range.
Q. Has this changed your view on maybe potential further relationships based on how it’s going in L.A maybe in Chicago, or Florida or Long Island?
A. First, L.A was clearly the most competitive of the preprint markets we were in. We have leading market shares in all other markets. L.A, we were the leader, but it clearly made sense in terms of efficiency to partner there. We wouldn’t rule out the possibility of doing something elsewhere if it proved highly advantageous to us.
Steven Barlow, Prudential
Q. On the $200 million of costs, is there a way to isolate ‘07 benefits and then ‘08 benefits as you build to that $200 million?
A. Well, over half of the $200 million total we will realize in savings in 2007.
Q. Could you give us 2007 CapEx please?
A. We had total of $222 million for 2007. We’re looking around $200 million, so it would be down about $20 million or so.
A fair amount of that is for our common systems projects that will really put us in a leadership position in terms of those common systems in advertising, editorial and also in circulation.
Q: How should we look at programming costs on the television side. Obviously, you always change your programming in September, amortization, etcetera and new shows going on, how should we look at quarter-by-quarter programming costs going up?
A. We launched in September a couple shows, including “According to Jim.” But in this coming September, because our very reasonable costs that we paid for both “Family Guy” and “Two And A Half Men,” we’re going to be pretty flat.
Edward Atorino, Benchmark
Q. If you look at equity income and interest expense, run rate for equity income looks like it could be over a $100 million doing $20 million each quarter. Would that be a good guess for ’07? And the same thing if I look at the fourth quarter interest expense and annualize that, does that give me a target for interest expense? And thirdly, on the cost reductions, particularly in newsprint, what are you budgeting for newsprint expense year over year?
A. The run rate on the interest expense, should be comparable to the fourth quarter. On an ongoing kind of basis as is. The equity income line, there is some seasonality there. I think our existing equity investments will continue to improve, however, we will continue to make equity investments that could generate some losses, we would also run through that line.
Q. And on newsprint?
A. Newsprint as you know, newsprint prices are declining.
Q. And you have taken newsprint out, right?
A. They are 4 or 5% under their peak last fall today. How much they go down this year remains to be seen, but we think they will continue to drop. And between less consumption and lower prices, we’re looking at newsprint down in the high single digit percentage rate.
And, as you know the biggest piece of that equity line is the Food Network. The scatter market has been strong in the first quarter and the Food Network ratings are good. So things look very positive in ‘07 for the Food Network.
Debra Schwartz, Credit Suisse
Q. On TV, can you give us some more color on how core categories are trending in TV? You mentioned entertainment is strong and auto is weak, could you give us a sense on some of the other core categories? And then also in terms auto, can you break out Q4 maybe just generally speaking how much auto is down? Is it in the lower single digit range or decline stronger than that?
A. Auto was down low single digit in quarter four and is remaining weak in Q1 this year. Restaurants, financial are looking good, telecom is good, as is entertainment. But that’s pretty much it. John Reardon is here too, can give you a some little more color on that.
The auto perspective, the manufacturers did not advertise in January, so we expect that to pace to turnaround in February and March. Movies are trending down a slightly now, but they’re back loaded in the quarter and there will be more releases in February and March, a pick up. A good point that we’re seeing is the scatter market and wire business is up substantially over last year, so pressure in the marketplace is coming up. We feel good about that.
The other thing in the automotive business, there will be 50 new model launches this year. So ultimately that should translate into advertising later in the year.
Q. Can you just talk a little bit about what you’re seeing in the Chicago Tribune? It seems like revenues have been down in the 3 to 4% range for the past three quarters. Which categories are causing the most trouble there and do you see any signs of improvement?
A. The trends have been pretty much as you described. It’s largely been driven by softness in national and there it’s largely been financial advertising where we had a great year in 2005, softened some in 2006, and will come back we believe in 2007. Also the Chicago Tribune, really benefited from the big auto manufacturer spending in 2005 and that was down a lot in ‘06. Recycling the very end of that in January, we expect the auto trends to improve. And we in fact got a bigger schedule from General Motors that will run the rest of this year, a special blockbuster section in the main part of the paper we’re printing with our new press capacity. Also you find in Chicago that classified has been somewhat soft. Recruitment running down year-over-year, real estate again somewhat softer than the prior year as you see nationally. Retail has been a bright spot in Chicago and also I would say if you look at market share compared to other newspapers, we gained a couple of share points in total ad spending in 2006. And we’re confident we can continue to grow our print market share in Chicago.
Fred Searby, JP Morgan
Q. If you could just talk about the outlook for preprint, specifically Newsday, the drag there. You have taken some remedial measures. Wow long should we expect it to drag on your overall preprint growth? Just a quick follow up on entertainment, are you saying it’s a broad based pickup in print and newspaper from the entertainment category. Has The LA Times specifically been able to kind of gain some share recently?
A. Preprint first. As we have described before, you have a very competitive situation at Newsday and in the New York market where a former sales agent went into business against us and took some key accounts. We have won back a couple, but it continues to be an ongoing competitive battle. We continue to believe because of our approach to sales and distribution that over the long-term we will prevail and gain back a significant part of that business. The timing of when accounts move and how that plays out remains fluid. Our preprint business is very good in Los Angeles and Chicago, we’re implementing the sub-zip zoning and doing a lot of things that advertisers see huge value in. And we see upside there.
In terms of entertainment, the LA Times and the Publishing Group represents 70% or so of our movie revenue. And the fact they’re doing really well, it bodes well for the group as a whole. And as I mentioned earlier that relates to new sales talent that’s been brought in and also new product offerings and a strategy that is a good one given the amount of trade advertising that exists in LA to go after variety and the Hollywood Reporter really makes sense.
William Bird, Citigroup
Q. What was the rate of decline in print advertising in Q4 versus Q3? And also was wondering what CPM’s look like year-over-year at the CW versus the WB?
A. I’ve got Q4, we will see if we can dig out Q3. The 53rd week again print ad revenue was down about 4% in the fourth quarter compared to the total group down 2.5. As for the third quarter my guess is about the same. We can double-check that for you, but it’s not materially different.
A. On the CW, what’s happened with MyNetworkTV effectively being out of the prime time business right now, they’re not doing all that well, it’s tightened demand a little bit. So we have that as a positive as we look at first quarter and going further into the year. The other thing we have are easier comps as the WB last year cut back on promotion and just wasn’t all that strong in terms of revenue production. So right now our pacing for prime time on the CW is very strong.
John Janedis, Wachovia Securities
Q. I think you said earlier that prime time ad revenues for the CW were up and I’m not sure if you said the mid-to-high singles earlier in the first quarter, but I think you also said pacings are down a bit. Does that mean that you’re seeing some declines in early or late fringe and is that related to some programming or rating issues?
A. It’s primarily early and late fringe right now. Prime is definitely helping us out and we feel that we are going to be in a very strong position from the fourth quarter with this new programming, which is slightly down.
That’s where we get the big boost when we put on those two shows, both of which are available for double runs.
Q. As it relates to revenue, how variable is it by daypart in terms of the revenue growth or decline?
A. In terms of the individual day parts?
A. Prime is really helping us out. Daytime is plus. News is still plus. It’s early fringe access and late fringe that are trending down slightly, which we can like I said we will correct that in the fourth quarter, that’s really was pushing it down right at the moment.
Just to put that in context, prime time represents about 17 or 18% of our revenue. Early and late fringe is about 40%.
Q. And is news around 25?
A. 15% across the group. More in our top three markets where we have four hours of morning news as well as prime time news.
Lee Westerfield, BMO Capital Markets
Q. What was the tax amortization for cash purposes, deductible intangibles on the broadcast division in the 2006 year? And if that is at your fingertips what might that be in 2007 and does that change significantly, drop significantly in ‘08, ‘09, ‘10, what’s the trajectory of tax deductibility is my first question? The second question is relating to retransmission consent agreements for New York, LA and Chicago and when your current retransmission agreements may come up for renewal?
A. Want to make sure we understood the first question Lee, was that broadcast rights amortization you were talking about?
Q. No, specifically I’m talking about the deduction for federal income taxes on broadcast amortization. The intangibles license for markup in the assets, when you originally acquired them.
A. Let us get back to you offline on that and make sure we understand correctly exactly what you’re looking at.
Q. And the second question is retransmission. New York, LA, Chicago, when do those come up for renegotiation?
A. We have retransmission agreements of what we have done there. I think as you know we have gotten additional distribution for our Superstation. And of course turned retransmission rights into the Food Network, going back a ways. But most of those agreements are in place for the next three years.
We’re in good shape. And as Dennis said, we monetized it. We have over 71 million homes outside of Chicago with the Superstation and we’re in very good shape in our retransmission.
Christa Quarles, Thomas Weisel Partners
Q. I was wondering if you could just give the classified categories excluding the extra week for the fourth quarter. And then also if you could just comment on help wanted online looks like, in particular was it impacted by upsell weakness?
A. For the fourth quarter employment was down 8, auto down 9, and real estate up 2. With real estate witnessing weakening in December, the trends in the other two categories were about the same.
Q. And then online help wanted, can you make any commentary there? McClatchy showed it weak, they indicated upsells were a problem.
A. Recruitment online revenue continued to grow, but the rate of growth is slow because of the decline in print ad volume to upsell it online. But we still showed growth in online revenue in Q4 ex the 53rd week.
Brian Shipman, UBS
Q. Wondering if you could talk about circulation trends at the three major metro newspapers. And then, also elaborate on your comment please Dennis that you made regarding circulation trends improving in ‘ 07.
A. Glad to talk about circulation trends in our big markets. Chicago Tribune and Los Angeles Times in the September ABC period reported two of the best circulation results of the top four papers in the country both daily and Sunday. But we have done very well on circulation in those two markets. Daily essentially flat, Sunday flat in Chicago on an individually paid basis and down about 2.7% in LA which is mostly single copy decline. In LA, we did have further declines in total, but that was our conscious decision to eliminate other paid circulation that had limited value to advertisers. We also see good reader ship trends through survey research in both Chicago and LA. So that’s very encouraging. All that in Chicago is before the continued growth of RedEye readership and circulation. Newsday has continued to focus its circulation on Long island since we [indiscernible]. We have seen some continued declines in circulation there, but in its core market it’s doing well also.
And trends for ’07. We set our strategies to stabilize individually paid circulations and we would expect that to continue in our major market. Frankly, the biggest challenge is single copy. Our home delivery trends are good, but as across the industry single copy sales continue to be soft and any decline we will see will be in the single copy area.
Q. Can you talk about circulation revenues in 2007?
A. We will continue selective discounting, primarily focused on home delivery subscriptions where the economics of continuing a discount to keep a home delivery subscriber who is price sensitive is far better than losing and having to go re-market. But we would expect circulation revenues to be down again in ‘07, but by a smaller percentage than in 2006.
One other minor comment I would add is the success of the Subscriber Advantage program here in Chicago, which now has I believe 220,000 members.
Yes. Over that 230,000 out of the total subscriber base of 700,000 and that Ssubscriber Advantage program we’re seeing real benefits in terms of subscriber retention and also increased online usage.
Although what most of you are reading about us relates to speculation regarding our process, I want to assure you that Scott, John and the people running our business units, our newspapers and television stations are doing a great job in keeping their people focused on the revenue initiatives we have going as well as, as tight expense control. So while we could, these distractions are not helpful, the businesses are being run very well, very effectively by our people. Thank you.
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This document 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 SEC, including the most current annual report, 10-K and 10-Q, which contain a discussion of various factors that may affect the company’s business. 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.