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Tribune Reports 2004
First Quarter Results
Publishing revenues up 3%; Television
revenues up 6%
CHICAGO, April
15, 2004 -- Tribune Company (NYSE: TRB) today
reported first quarter 2004 diluted earnings per share
(EPS) of $.35 compared with $.41 in the first quarter
of 2003. The 2004 first quarter results included a net
non-operating loss of $.05 per diluted share, while the
2003 first quarter results included a net non-operating
gain of $.02 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.
"After a slow start in January, revenues
improved month-over-month during the first quarter," said
Dennis FitzSimons, Tribune’s chairman, president and
chief executive officer. "We saw strong growth in help
wanted advertising and solid increases over last year in
our television group. Cash operating expenses grew in line
with our expectations this quarter, due in large part to
the impact of higher benefit and newsprint costs this year."
FIRST QUARTER 2004 RESULTS 1
CONSOLIDATED
Tribune’s 2004 first quarter operating
revenues increased 3 percent to $1.33 billion from $1.29
billion in the 2003 first quarter. Consolidated cash operating
expenses increased
$44 million, or 4.6 percent, in the first quarter of 2004
primarily due to higher benefit and newsprint expenses and
the impact of the KPLR-TV, St. Louis and KWBP-TV, Portland,
Ore., acquisitions in March of 2003. Operating cash flow
was flat compared with the first quarter of 2003. Tribune’s
operating profit decreased 1 percent to $273 million, compared
with $276 million in 2003.
PUBLISHING
Publishing’s first quarter operating revenues were
$1 billion, up 3 percent from last year’s first quarter.
Publishing cash operating expenses rose by 5 percent. Publishing
operating cash flow was $235 million, a 3 percent decrease
from $243 million in the first quarter of
2003. Publishing operating profit decreased 4 percent to
$190 million, down from
$198 million in 2003.
Management Discussion
- Retail advertising revenues rose 5 percent for
the quarter. Increases in furniture/home furnishing, hardware,
food and health care were partially offset by a decline
in department stores and electronics. Preprint revenues
increased 7 percent, led by a 14 percent increase in Los
Angeles, a 13 percent increase in South Florida and a 6
percent increase in Chicago; New York was flat.
- National
advertising was up 4 percent for the quarter with increases
in the financial, auto manufacturers and travel/resorts
categories, partially offset by decreases in hi-tech and
movies and entertainment.
- Classified advertising
was up 5 percent for the quarter. Help wanted revenues
for the group were up 10 percent; Los Angeles was up 10
percent, New York rose
6 percent and Chicago rose 5 percent. Auto and real estate
revenues increased
5 percent and 3 percent, respectively, for the quarter.
- Interactive
revenues, which are included in the above categories, were
$29 million, up 38 percent, due to strength in classified
and banner/sponsorship advertising.
- CareerBuilder
network revenues increased 66 percent from last year’s
first quarter and March unique visitors grew 124 percent
from last year.
- Cash operating expenses increased
5 percent from the first quarter of 2003 due primarily
to higher newsprint prices, higher retirement and other
benefit expenses and new publications. Newsprint and ink
expense was 10 percent higher than 2003 as newsprint cost
per ton was up 9 percent and consumption increased slightly.
BROADCASTING AND ENTERTAINMENT
Broadcasting and Entertainment’s
first quarter operating revenues increased 4 percent to
$329 million, up from $316 million in 2003. Group cash
operating expenses were up
2 percent in the first quarter of 2004. Operating cash flow
was $110 million, up 8 percent from $101 million in 2003.
Operating profit rose 7 percent to $97 million from $90 million
last year.
Television’s first quarter revenues
increased 6 percent to $306 million, up from
$289 million in 2003. Television cash operating expenses
rose 4 percent from last year. Television operating cash
flow was $114 million, a 10 percent increase from $104 million
in the first quarter of 2003. Television operating profit
rose 9 percent to $102 million, up from $94 million in 2003.
Management Discussion
- Television results
excluding acquisitions:
- Television revenues increased
3 percent compared to the first quarter of 2003,
when they were up 11 percent over 2002.
- Television cash
operating expenses were flat compared with last year
primarily due to lower broadcast rights amortization.
- Television
advertising growth was driven by gains in the auto and
financial categories, offset by softness in movies and
fast food. Local advertising was up while National was
down slightly.
- Television’s operating cash
flow margin was 37.3 percent, up from 35.9 percent in 2003.
- Radio/entertainment
results reflect the impact of fewer programs in production
at Tribune Entertainment.
EQUITY RESULTS
Net equity loss was $4 million in the first quarter of 2004,
compared with a net loss of $9 million in the first quarter
of 2003. The improvement was primarily due to increased equity
income from TV Food Network.
NON-OPERATING ITEMS
In the 2004 first quarter, Tribune recorded a net after-tax
non-operating loss of
$16 million, or $.05 per diluted share, while in the 2003
first quarter the Company recorded a net after-tax non-operating
gain of $8 million, or $.02 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 Opinión. Non-operating items
in the first quarter of 2003 included a loss from marking-to-market
the Company’s PHONES derivatives and related Time Warner
investment and a gain from the divestiture of the Company’s
remaining Denver radio station.
ADDITIONAL FINANCIAL DETAILS
Corporate expenses for the 2004 first quarter increased
to $13 million from $11 million in the first quarter of 2003
mainly due to higher compensation, including higher retirement
plan expenses.
Net interest expense for the 2004 first quarter decreased
to $45 million, down 7 percent from $49 million in the first
quarter 2003 as debt, excluding the PHONES, was approximately
$2.0 billion at the end of the 2004 first quarter compared
to a balance of $2.7 billion at the end of the first quarter
of 2003.
The effective tax rate in the 2004 first quarter was 38.7
percent, compared with
39.0 percent in the 2003 first quarter.
Capital expenditures were about $47 million in the first
quarter of 2004.
2004 FULL YEAR OUTLOOK
As previously stated, consolidated revenues for 2004 are
expected to grow about 6 percent, including about 1 percent
from new publications, and will continue to be affected by
many factors, including changes in national and local economic
conditions, consumer confidence, job creation and unemployment
rates. Consolidated operating expenses are expected to increase
about 5.5 percent in both the first and second halves of
2004 due to higher expenses for retirement and medical plans,
newsprint and the impact of new publications. Equity income
is projected to be somewhat higher than 2003. Interest expense
is expected to decrease from 2003 due to a lower average
debt level and the impact of the debt refinancing in the
second quarter of 2004. The effective income tax rate for
2004 is expected to be approximately 39 percent.
WEBCAST OF CONFERENCE CALL Today at 8 a.m. (CDT), a live Webcast of the 2004 first
quarter conference call will be accessible through www.tribune.com
and 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 www.tribune.com or by calling
800/757-1694.
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1 “Operating
profit” for each
segment excludes interest income and expense, equity earnings
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.
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:: :: TRIBUNE (NYSE:
TRB) is one of the country’s premier media companies,
operating businesses in broadcasting and publishing. It
reaches more than 80 percent of U.S. households and is
the only media organization with television stations, newspapers
and Web sites in the nation’s top three markets.
In publishing, Tribune operates 14 leading daily newspapers
including the Los Angeles Times, Chicago Tribune, Newsday
and Spanish-language Hoy, plus a wide range of targeted
publications. 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 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.
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 Securities
and Exchange Commission through a Form 8-K.
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