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Tribune Updates Newsday,
Hoy Circulation Figures
Cost to Settle
Advertiser Claims Will Increase By $45 to $60 Million
Additional Charge
to be Taken in Third Quarter
CHICAGO, September 10, 2004 -- Tribune
Publishing, a division of Tribune Company (NYSE:TRB), today
announced additional revisions to the circulation figures
of Newsday and Hoy, New York, for the
12-month period ending Sept. 30, 2003, and the six-month
period ended March 31, 2004.
The updated circulation figures are being
announced in advance of the release of the Audit Bureau of
Circulations' (ABC) final audit report for Newsday for
the 12-month period ended Sept. 30, 2003, which is expected
in mid-October, in order to provide advertisers and the public
with the most accurate information possible. The ABC audit
for the six-month period ended March 31, 2004 is expected
to be completed and released by mid-November.
Based on information gathered from ABC's ongoing audit and
Tribune's internal investigation at Newsday:
- For the 12-month period ending Sept. 30, 2003 , daily
circulation is expected to be between 480,000 and 490,000,
and Sunday circulation is expected to be between 570,000
and 580,000.
- For the six-month period ending March 31, 2004 , daily
circulation is expected to be between 480,000 and 490,000,
and Sunday circulation is expected to be between 540,000
and 550,000.
- For the 12-month period ending Sept. 30, 2004 , daily
and Sunday circulation is expected, due to seasonal fluctuations,
to be somewhat below the March 2004 range.
Based on information gathered during Tribune's internal
investigation at Hoy, New York :
- For the 12-month period ending Sept. 30, 2003 , daily
circulation is expected to be between 45,000 and 55,000.
The ABC audit for this period is expected to be completed
and released no later than November 1.
- For the six-month period ending March 31, 2004 , daily
circulation is expected to be between 40,000 and 50,000.
The ABC audit for this period is expected to be completed
and released by mid-November.
To facilitate ABC's focus on Hoy, New York , the
Chicago and Los Angeles editions of Hoy will withdraw
their reported circulation figures for the six-month period
ending March 31, 2004 ; both newspapers are in a start-up
phase.
"The ABC audit and our internal investigation
at Newsday and Hoy,
New York revealed a range of issues affecting circulation,
including poor documentation, records mismanagement and programs
that deliberately violated ABC regulations and Tribune policies,"
said Jack Fuller, president of Tribune Publishing. "Since
these discoveries, the publishers of both newspapers have
left the company, we have changed the circulation management
at both newspapers and implemented tougher circulation
controls. In addition, the publisher, chief financial officer
and vice president of circulation at all of our newspapers
must now certify to Tribune on a quarterly basis as to
the accuracy of their newspaper's circulation and that
ABC guidelines and Tribune policies have been followed.
Finally, we will be working closely with ABC to make sure
the circulation practices and procedures at Newsday and Hoy comply
with ABC regulations."
In the second quarter of 2004, Tribune recorded a pretax
charge of $35 million as its estimate of the cost of settling
advertiser claims related to reduced circulation at Newsday and Hoy, New
York , based on the information available at the time. In
the third quarter, the Company expects to record an additional
pretax charge of between $45 and $60 million due to the additional
circulation reductions outlined above and misstatements that
impact the 12-month period ending Sept. 30, 2002 that were
identified by a Tribune internal audit. ABC is still in the
process of reviewing their audits of the Sept. 2002 period.
The Company will continue to evaluate the adequacy of the
reserve as ABC audits of Newsday and Hoy, New
York are completed and negotiations with their advertisers
continue.
Tribune Company will announce third quarter 2004 earnings
on Thursday, October 28, before the market opens. A conference
call to discuss the results will be held that day at 8 a.m.
CT ( 9 a.m. ET , 6 a.m. PT ).
Newsday and Hoy, New York
, have been cooperating with ABC on an extensive audit of
both newspapers' circulation figures. A Tribune Company internal
audit is ongoing at Newsday and Hoy, New
York. As previously announced, Tribune's audit staff is also
verifying the accuracy of the circulation figures at each
of the Company's other newspapers.
::
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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. Information regarding circulation numbers and
pretax charges relating to settlement with Newsday and Hoy, New
York , advertisers is based on facts currently available
and is subject to completion of ABC audits and Tribune
internal investigations and to negotiations with advertisers.
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 Securities and Exchange Commission
through a Form 8-K.
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Tribune Publishing is
the leading U.S. major-market newspaper group, with the
third-largest total circulation. The company operates
14 daily newspapers: Los Angeles Times ; Chicago
Tribune ; Newsday (Long Island, N.Y.); The
Sun (Baltimore); South Florida Sun-Sentinel ; Orlando
Sentinel ; Hartford Courant ; The Morning
Call (Allentown, Pa . ); Daily Press (Newport
News, Va.); The Advocate (Stamford, Conn.); Greenwich
Time (Greenwich, Conn.); and Hoy, a Spanish-language
newspaper published in New York, Los Angeles and Chicago.
Additional newspapers for Hispanic consumers, each published
weekly, are El Sentinel in Orlando and el
Sentinel in South Florida . Tribune Publishing includes
Tribune Media Services, a leading provider of entertainment
listings and content syndication to print and electronic
media; Tribune Interactive, a top source of online news
and information; and CLTV, the Chicago region's only
24-hour cable news channel. Investments include CareerBuilder
(33% owned), Classified Ventures (29%) and CrossMedia
Services (33%). |
