Tribune Reports 2001 Third Quarter
Earnings
$.10 per share excluding
special items
Restructuring programs
to save $58 million
CHICAGO, October 18, 2001 -- Tribune
Company (NYSE: TRB) today
reported diluted earnings per share (EPS) of $.10 for the
2001 third quarter, excluding restructuring charges, income
tax adjustment and non-operating items, compared with $.22
for the 2000 third quarter. The restructuring charge of approximately
$131 million, or $.26 per share, recorded in the quarter covers
expenses primarily associated with staff reduction initiatives
that will save the company $58 million annually.
Cash earnings (defined as after tax income
plus amortization expense, excluding restructuring charges,
income tax adjustment and non-operating items) were $98 million
in the 2001 third quarter, down from $137 million during the
same period last year. In the 2001 third quarter, cash EPS,
excluding restructuring charges, income tax adjustment and
non-operating items, decreased to $.29, down from $.39 per
share in the 2000 third quarter.
"We have been presented with very significant
external challenges," said John W. Madigan, Tribune's
chairman and chief executive officer. "Our first priority
since the attacks of September 11, has been to keep our readers,
viewers and listeners informed with comprehensive news coverage
of America's war on terrorism."
"The financial impact of this commitment
to serving the public is significant-our newspapers published
extra editions, our television and radio stations aired extended
news coverage, and our web sites increased capacity,"
continued Madigan. "And, at the same time, advertisers
began rethinking their buying strategies."
"But we continue to achieve significant
cost savings by holding down expenses, reducing staff and
positioning the company for long-term success when the economy
recovers," said Madigan.
Consolidated Results
Tribune's 2001 third quarter operating revenues
decreased 7 percent to $1.3 billion, down from $1.4 billion
in the 2000 third quarter. EBITDA (earnings before interest,
taxes, depreciation, amortization, equity results, restructuring
charges and non-operating items) was down 26 percent to $260
million in the third quarter of 2001, compared with $351 million
in the third quarter of 2000. For the 2001 third quarter,
Tribune's operating profit, before restructuring charges,
declined 37 percent to $149 million, compared with $237 million
in the 2000 third quarter.
Broadcasting and Entertainment
In the 2001 third quarter, operating revenues
for broadcasting and entertainment decreased 3 percent to
$354 million, down from $365 million in the same period last
year. EBITDA fell 17 percent in the 2001 third quarter to
$107 million, excluding restructuring charges, from $129 million
in the third quarter of 2000. Operating profit in the quarter
declined 24 percent to $76 million, excluding restructuring
charges, from $101 million in the third quarter of last year.
Television revenues declined 6 percent to $274
million in the 2001 third quarter, down from $293 million
in last year's third quarter. Tribune television stations
lost approximately $12 million from the events of September
11. Excluding programming and acquisition costs, television
cash operating expenses in the quarter were down 5 percent.
Revenues for Entertainment/Other increased
14 percent to $66 million, up from $57 million in last year's
third quarter due mainly to increased advertising revenues
at Tribune Entertainment.
Publishing
Publishing revenue declined 8 percent to $907
million in the 2001 third quarter, compared with $991 million
in 2000. Publishing EBITDA, excluding restructuring charges,
was $166 million, down 32 percent from $245 million in the
third quarter of last year. Publishing operating profit, excluding
restructuring charges, decreased 45 percent to $89 million,
from $164 million in the 2000 third quarter. Publishing cash
expenses including newsprint were down 1 percent in the 2001
third quarter, excluding acquisitions.
In the 2001 third quarter, advertising revenue
totaled $684 million, 13 percent below last year's third quarter
total of $783 million. Tribune Publishing had approximately
$8 million in ad cancellations as a result of the events of
September 11.
Retail advertising revenue decreased 7 percent
in the third quarter 2001, mainly due to weakness in the electronic
and department store categories. National advertising revenue
was 9 percent below last year's third quarter, primarily due
to lower dot.com and weakness in other high tech, travel and
financial categories. Classified advertising revenue declined
20 percent from last year's third quarter because of weakness
in the help wanted category.
Newsprint expense fell 8 percent in the 2001
third quarter, as consumption declined 6 percent and newsprint
prices decreased 3 percent.
Interactive
In the 2001 third quarter, interactive revenues
rose 20 percent to $15.1 million, up from $12.6 million in
the same period last year, primarily on higher classified
revenues. For the 2001 third quarter, interactive operating
cash flow losses decreased 50 percent to $4.1 million, from
$8.2 million in the 2000 third quarter.
Equity Results
Equity losses for the 2001 third quarter were
$13 million, down from $26 million in 2000. The losses were
primarily due to Tribune's ownership interests in CareerBuilder,
The WB Network, BrassRing and Classified Ventures.
Interest and Taxes
Interest expense for the 2001 third quarter
decreased to $63 million, down 20 percent from $79 million
in 2000. This decrease was primarily due to the reduction
of outstanding debt and lower interest rates.
Excluding restructuring charges and non-operating
items, the effective tax rate in the 2001 third quarter was
61.7 percent, compared to 42.8 percent in 2000. The 2001 third
quarter included an income tax adjustment of $8.6 million,
which reduced diluted earnings per share by $.03. The catch-up
adjustment resulted from an increase in the company's estimated
effective tax rate for the year. The higher rate was due to
lower than projected earnings in the second half of 2001,
while goodwill amortization did not change. The adjustment
represents the impact of the higher rate on earnings for the
first half of 2001.
Restructuring Charges
During the 2001 third quarter, Tribune incurred
$131 million of restructuring charges for initiatives relating
to a voluntary retirement program announced last quarter,
and for other workforce reductions throughout the company.
The restructuring charge for the first three quarters of 2001
totaled $145 million, and the company expects annual savings
of $58 million in 2002.
Non-Operating Items
In the 2001 third quarter, Tribune recorded
a loss of $.19 per diluted share from marking to market the
company's derivatives and related investments. Tribune also
recorded investment write-downs totaling $.12 per diluted
share to adjust several investments to fair market value.
Outlook
The company expects fourth quarter earnings
per share to be below current analysts' estimates due to the
difficult advertising environment and the September 11 terrorist
attacks, which resulted in advertising cancellations and higher
newsgathering, production and distribution costs.
Webcast of Conference
Call
Today at 8:00 a.m. (CDT), a live Webcast of
the 2001 third quarter call will be accessible through www.tribune.com
and www.ccbn.com.
An archive of the Webcast will be available on these sites
from Oct. 18 through Nov. 1. More information about Tribune
is available at www.tribune.com or by calling
1-800-757-1694.
:: :: ::
TRIBUNE (NYSE:
TRB) is one of the country's premier media companies,
operating businesses in broadcasting, publishing and on the
Internet. It reaches more than 80 percent of U.S. households,
and is the only media company with television stations, newspapers
and Web sites in the nation's top three markets. Tribune media
span 23 major-market television stations, including national
superstation WGN-TV; 12 market-leading daily newspapers, including
the Los Angeles Times, Chicago Tribune and Newsday; and news
and information Web sites in 18 of the nation's top 30 markets.
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 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. |
