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Transcript

Second Quarter 2003 Earnings
Conference Call
July 17, 2003

Ruthellyn Musil/Vice President, Corporate Relations

Good morning! Welcome to our conference call to review 2003 second quarter results. As usual, we’ll try to keep our call to about 45 minutes--our opening remarks will be brief, as we want to try to get to all of the questions.

As you saw in our press release, Tribune’s second quarter earnings of
67 cents per share on a GAAP basis included a 10 cent gain associated with non-operating items. This meets First Call’s consensus; the first paragraph of our release contains the information needed to make a meaningful comparison.

Our speakers this morning are Dennis FitzSimons, Tribune’s CEO and Don Grenesko, Senior Vice President and our Chief Financial Officer.

Before turning the call over to Dennis, let me remind you that our discussion may include forward-looking statements that are covered in greater detail in our SEC filings.

Now, here’s Dennis.

Dennis FitzSimons/President and CEO

Thanks, Ruthellyn and good morning.

As we said in our presentation at the Mid-Year Media Review last month in New York, business is solid. Consolidated revenues grew 5 percent in the second quarter and operating cash flow increased 7.3 percent. This momentum is continuing as we begin the second half of the year.

In publishing, retail and national advertising revenues are up in the mid-single digits through the first two weeks of July. While help wanted still shows double-digit declines, sequential improvement is continuing.

Third quarter TV pacings are on plan -- up in the low single digits--going against tough comparisons.

Now, let’s take a look at some second quarter accomplishments, starting with Publishing...

First, on June 24, the Baltimore Sun reached a new, significantly improved labor agreement with the Newspaper Guild.

This contract is significant for two reasons. First, The Sun is Tribune’s most heavily unionized business unit with about 72% of the workforce in unions. Second, The Guild is the largest single bargaining unit within Tribune.

The new contract more closely aligns pay with performance and provides management significantly enhanced operational flexibility. The Sun will now have better management control over the workplace to align resources to best serve its customers and meet financial goals.

This contract marks the beginning of a new working relationship with
The Guild, in which The Sun and its employees should prosper.

Next, we continue to see the benefits of our investments in new preprint facilities in Chicago and LA. Preprint revenue increased 13 and 12 percent, respectively, in those markets this quarter.

Finally, CareerBuilder’s results were strong. Our partnership with Gannett and Knight Ridder generated $37 million in network revenues in the second quarter, an increase of 37 percent year-over-year and 9 percent over the first quarter of 2003.

CareerBuilder’s audience share is also growing. According to MediaMetrix, CareerBuilder’s share of job seekers going to the top three site (CareerBuilder, Monster and HotJobs) increased 15% from December to June, whereas Monster’s share decreased 13% over the same period.

Our integrated print and online products put us in the sweet spot to capitalize on the return of help wanted, which we believe will turn positive in 2004.

Turning to television...

Revenues jumped 12 percent and operating cash flow rose by 15.5 percent. The station group improved its operating cash flow margin to 44 percent this quarter, up one percentage point.

Our stations are performing very well, thanks to strong sitcom line-ups in early and late fringe, good local news ratings and The WB’s record year. For the fullseason, the network posted the strongest growth of any broadcast network across the key demos, up 17 percent in adults 18-34 and up 13 percent in adults 18-49.

As evidenced by the WB’s great upfront, we’re delivering the young demographics advertisers want, generating premium CPMs.

In addition, The WB sales team has done a terrific job of demonstrating to national advertisers the value of targeting younger demographics and reaching consumers at a time in their lives when their brand preferences are being established. And these advertiser buying specs are moving over to the local market, which bodes well for Tribune stations.

On that positive note, I’ll turn it over to Don.

Don Grenesko/ Sr. Vice President/Finance and Administration

Thanks, Dennis.

Our press release contains a lot of detail, so I’ll focus on a few key items.

As Dennis mentioned, consolidated revenues were up 5 percent over last year's second quarter.

Turning to expenses, our plan called for consolidated cash expenses to be up in the mid-single digit range in the first half of the year. In the second quarter, excluding acquisitions, they rose only 2.7 percent, despite the following:
First, compensation was higher as a result of merit increases, higher medical costs and a lower pension credit.

Newsprint costs were 6 percent higher. While the price per ton increased 5 percent in the second quarter, importantly, the full $50/ton price increase announced in March has not been realized. Suppliers have announced another increase for August 1st, but we don’t feel that will stick.

Finally, TV programming expenses, excluding acquisitions, were up 7 percent in the quarter. This is primarily due to faster amortization for Will and Grace, which began airing last September.

Since Dennis covered TV, here are some specifics on Publishing...

Revenues grew 2.9 percent in the second quarter, cash flow increased 4.3% and cash flow margins grew slightly to 27.5%.

Retail rose by 4 percent, driven by an 11 percent increase in preprint revenue, reflecting our new facilities in LA and Chicago, as Dennis mentioned. Categories performing well included food, furniture, department stores, hardware and health care.

National was up 10 percent in the quarter with strength in hi-tech, auto manufacturers and financial. Tribune Media Net is helping in this category and is on-plan for 2003 revenues in the $70 million range.

Classified was down 4 percent in the quarter. Help wanted was off 17 percent, as job creation is still in negative territory. Real estate and auto continue to perform well, up 9 percent and 1 percent respectively.

Interactive revenues were up 15 percent due to strength in national and classified advertising.

Now, a few other important items...

The equity line shows a positive $2 million in this quarter compared with a loss of $4 million in the second quarter of 2002, due to the recognition of equity income at TV Food Network in 2003.

We are actively repurchasing stock associated with the LYONs redemption. Since mid-June we have repurchased about 2 million shares and plan to repurchase the remaining 5 million shares before the end of the year.

Debt will be about $2.2 billion at year end. This is $300 million lower than we had planned, due primarily to the redemption of the LYONs.

Cap Ex was $32 million in the second quarter and should be in the $175 to $200 million range for the full year, down somewhat from our previous projection.

Free cash flow will now be around $825 million, an increase of over $100 million versus last year.

In closing, let me repeat our earlier guidance that full year EPS should be within the current range of analyst estimates which is $2.05 to $2.20 per share according to First Call. This assumes a rebounding economy and that non-operating items are not material.

While it’s difficult to predict the revenue picture for the balance of the year, I can give you some further information on expenses that may help in adjusting your third and fourth quarter estimates.

In the third quarter, we expect consolidated expenses to be up in the mid-single digits, for the same reasons reflected in second quarter expenses -- compensation, newsprint and accelerated amortization related to the first year of Will and Grace. There also are more Cubs games in the third quarter of 2003.

The good news is that in the fourth quarter, consolidated cash expenses should be about flat with last year.

Now, we’d be happy to take your questions.

Q&A

Brian Shipman/UBS
Q. Talk about your take on what is going on in Washington with some of the haggling in Congress now with respect to the FCC rules.

A. The House Appropriations Committee yesterday voted to try to roll back what the FCC has done*. Cross-ownership is our biggest issue, and yesterday’s action does not change what the FCC came out with on June 2nd.

The biggest source of contention is the national cap, and there does appear to be some possibility now that a clean bill could come out that would roll back what the FCC has done in raising the cap to 45 percent. That wouldn't have any short-term impact on us because we are at 30 percent for FCC purposes, so we still have room to grow. Also, in the short-term, we would have an advantage over Viacom and Fox, who are both over the 35 percent cap. But we would expect that the networks would go to court to somehow try to get that cap back to 45 percent.

Our issue is cross-ownership and on that one we are in good shape.

* On June 2nd, the FCC changed several rules regulating television station ownership including increasing the ownership cap from 35% to 45%, allowing the ownership of a TV station and newspaper in the same market, and the ability own multiple TV stations in the same market.

Q. Could you also take us through each ad category within the classified advertising category, how did help wanted, real estate, and auto do in June?

A. In terms of the classified in June, help wanted was down in the mid-double digit range around 14 percent or so for the group. Los Angeles wasn't down quite as much as Chicago and New York. Auto was up in the mid-single digits for the group as a whole. Newsday was strong in auto in June. And in terms of real estate, we were up in the mid-double digit range for the group as a whole, and again, Newsday showed the most strength there. As we look to '04, we see the help category, given it has been so difficult, when job creation returns, we are well-positioned. We're going to see print growth and also with our integrated print and online model. We would hope to see growth in the online category, too.

Peter Appert/Goldman Sachs
Q. In terms of the cost guidance you reference, it might seem to imply that street estimate is too high for the third quarter, too low of the fourth quarter. Is that the message you're trying to deliver?

A. I think that's correct. We are fine with full year projections, but I think in looking at some of the modeling, that the expenses for analysts were spread out over the year, and we see them being a little bit higher in the third quarter versus the fourth quarter.

Q. Is the cycling of the "Will and Grace" the primary issue?

A. It is the cycling of the "Will and Grace" plus the bonus accruals. If you recall last year we scaled back our bonus assumptions for the first half of the year. And then because we had record earnings, we increased the accruals for bonuses in the second half of the year, particularly the fourth quarter. So the bonus accruals last year were higher than what we are projecting for this year.

Q. The tax rate is down fractionally here in the second quarter, is that the continuing rate?

A. In terms of the tax rates, you should assume that is the rate to use going forward.

Q. On the equity line, you’re getting a benefit from Food Network. Presumably Food Network is permanently in the black here at this point, so should we look for the equity line to be modestly positive on a forward basis?

A. In terms of the equity line, that is probably true. We haven’t done any real detailed projections on that as yet, but we had originally projected that we would have a $15 million loss in the equity area this year as a whole. And we will obviously be better than that.

Lee Westerfield/Jeffries & Co.
Q. Update us as to progress in the duopoly in Indianapolis, achieving kind of combination costs and growth synergies you had been exploring when you may the acquisition. To give us a better sense about how those kind of combinations develop.

A. We are in the midst of co-locating the two stations. We will see some expense benefits from that. The WB station that we did acquire last year, there were some programming trends that were not all that positive and have had an impact on revenue there. So we have made expense cuts there. We have not seen the revenue situation kick in yet. But co-location at this point should be complete by December. And we'll have a new facility there and can take advantage of digital technology to reduce our expenses.

Q. Carrying further into 2004, could you help us understand if there are any other program syndication renewals that you need to be making that would spike costs, either backup or what should we be seeing in terms of program purchasing expenses into next, late next year?

A. We don't have anything new that is launching this September, that's going to be a real benefit to us in the fourth quarter as well as the full year in '04.

Christa Sober/Thomas Weisel Partners
Q. I was wondering if you could give us a breakdown in the TV division of how much revenue you are generating from syndication related advertising versus advertising of the WB, and if one is growing faster than the other, and also if you could give us an update on growth at the WGN Superstation.

A. About 40 percent of our overall station revenue comes from early and late fringe syndicated programming. When you look at total day, that gets up to between 55 and 60 percent from syndicated programming. Then primetime represents about 17 percent of our revenues.

Q. And are you experiencing greater growth in advertising on syndication versus primetime, or how is the growth meted out between the two?

A. We have really strong sitcoms between "Friends,""Everybody Loves Raymond" and "Will and Grace" and they are doing well with demos; demo delivery is strong. So we're good there. We also had good increases with the WB. Our Fox stations have been a little bit weak in primetime. That has been more recently improved with some of the reality programming on Fox.

Q. And at WGN?

A. WGN had a good upfront, so we are expecting good growth there. We've had some rating issues that we have been dealing with on WGN, but a couple of program changes have us encouraged about the future. The upfront marketplace is certainly strong and third quarter pacing looks pretty good for WGN Superstation.

John Janedis/Banc of America Securities.
Q. You mentioned earlier that pacings are up somewhere in the low single digits for July. But could you give us a little more color on some of the stronger and weaker categories?

A. The movie category has been a little bit weak for us, as has the soft drink category. There was a move by Pepsi, with their big billion dollar promotion that moved a significant amount of revenue to network from local. So, many television stations with young demos are a little bit softer in that soft drink category.

Q. Looking ahead to '04, can you tell us a bit more about any type of initiatives that you have to capture more political revenues?

A. We're sort on a continuing process on political. In the off years, we have our salespeople, particularly those focusing on political, to try to tell the young demo story. How those voters are more important because traditionally early news and late news, early news excuse, particularly old, is getting the disproportionate share of political dollars. So what we try to do is before the decisions are being made, is get to the national agencies that place political dollars and stress to them the importance of the younger demographic. Sort of an extension of the WB pitch. And we have seen success there. Our share is still relatively small, smaller than our overall share, but we've seen growth in political dollars in the last couple of election years.

Lauren Fine/Merrill Lynch.
Q. Could you remind us what political was in the third and fourth quarter last year? Is part of the slowdown in June because you were cycling against a little bit of political last year?

A. June was not so much political, but more the movie category. That was part of the slowdown. That was the biggest issue that we had, there were just fewer releases. We are not expecting, movie category to be great in third quarter, but in fourth quarter, as we look forward to what releases are coming, we feel that is going to be a lot stronger. As far as political advertising in fourth for us, it was only $6 million in Q3, and $15 million in Q4. And that was about, I would say three to four percent of our business last year in fourth quarter.

Q. I know you indicated that the newspaper division departments for advertising was up in the quarter. But have you seen the same cutbacks with some of your peers and if that rate of growth did slow as the quarter progressed, and if you have any concerns about the category in the second half.

A. We see July retail up in the mid-single digits, department stores seem to be performing well for us, especially in Chicago, where Marshall Fields is re-launching their flagship store on State Street, and Bloomingdale’s opened a new home store. Recent retail sales have shown increases due to better weather and, we feel, the conclusion of the Iraqi conflict. So we are cautiously optimistic to go forward on department store side.

Q. One last question on newsprint, can you give us a sense of what your prices are likely to be up in the third quarter assuming no impact from the August increase?

A. We budgeted modest increases. We've been running in the 5 to 6 percent range. For the year as a whole, I think we are up in the mid to high single digits. Newsprint prices declined in the third quarter of last year. So compared to last year the increase will be significant.

Q. Okay, so maybe low double-digit and third quarter, then?

A. Probably. Somewhere in that area, yes.

Douglas Arthur/Morgan Stanley
Q. Excluding D&A, your cost, your cash costs were up 2.4 percent in the quarter. What was it without newsprint? Was it flat to down?

A. In terms of the publishing expenses in the second quarter, they would have been about 2 percent without the newsprint price increases on the cash expenses.

Q. Can you just remind us what percent of advertising revenues are preprints? I know you've had a big initiative in L.A., do you expect this kind of double-digit growth to continue through the rest of the year?

A. Our preprints business, overall is about $550 million category. And in percentage terms that would be 14 percent of our total revenues. We have a real share opportunity in L.A.. That's why we made a $50 million investment out there in the new plant. They have managed to take a significant number of accounts away from Advo and Pennysaver, so we've seen share increases out there. We expect to see more; that’s our biggest area of opportunity. We probably have about a 35 share in the L.A. preprint market. And that is about half of where we are in Chicago. So we see a big opportunity on the West Coast, and Chicago is also doing well.

James Marsh/SG Cowen
Q. Give us a quick update on the RedEye and maybe just give us a few details there. Would that be something you might consider rolling out in additional markets?

A. We are pleased with the progress we are seeing on RedEye. We are still in the process of trying to migrate to the paid model. As you noticed earlier in the week, the Washington Post announced that they are coming out with a commuter paper that will be free. And this is the real challenge, when launching a paper like this is getting an audience that is not used to paying for content to come up with a quarter. We have made good progress on this, but our biggest progress has been with the advertisers. We've added a lot of new advertisers that don't normally advertise in the Tribune. We have added a lot of advertisers who traditionally will advertise in the weekly papers. So the ad sales have been good. The migration to a paid model is a work in progress.

Q. You mentioned with Career Builder it was the rate of growth in share. I was wondering if you to give us the actual share numbers if you have available and for what period that was for.

A. As far as CareerBuilder, the point that we made was from December to June, we have a significant share increase.

Our audience share of job seekers to the top three sites went up 15 percent. And I do, in talking audience share, I do have that number. On a revenue share side, Monster has not yet released their numbers and Yahoo is no longer reporting numbers for HotJobs. But we think we're gaining share on a revenue side, as well. We feel that our share write-down the Job Seeker side, from the audience side is about 23 percent. As you look at our top three career Web sites. Between 23 and 25 percent.

Q. Where would you think Monster is?

A. Monster is about 50.

Kevin Gruneich/Bear Stearns
Q. Wondering if you could isolate the expenses in Baltimore related to the potential strike in Q2.

A. We have not specifically mentioned those numbers. But they were in the area of $2-$3 million. It was less than a penny a share.

Q. Could you give us a guidance as to the change in margins in your major newspaper markets.

A. Yes, in terms of the cash flow margins that are major newspapers, Chicago was up a bit and Los Angeles and New York were down just a touch. That is basically due to the pension credit. Those two entities were hit a lot harder than our other business units. So that was the reason for the slight declines.

Q. Would you say that the move up in Chicago and the move down in L.A. and New York were within 100 basis points?

A. Around there.

Q. And also in terms of the automotive category, both on the TV side and newspaper side, what you're hearing for the third quarter.

A. That is still pretty healthy on both sides. In both TV and newspapers, still pretty good.

Steve Barlow/Prudential.
Q. On the upfront syndication market, reports that "Will and Grace,""Raymond," and "Friends" were doing upwards of 13 to 17 percent increases in their upfront in their CPM rates. Wanted to see whether or not you were able to garner the same kind of numbers, or whether the numbers are even true.

A. On upfront syndication, that is a reflection of the network marketplace. So for the most part, Warner Bros. is selling time into that sort of network equivalent marketplace. That was real strong as the WB's upfront was real strong. But we will not really kick in until the fourth quarter with the new season. So we really go on a quarterly basis as opposed to the 52-week upfront basis. They are kind of decoupled. But, anytime the upfront is strong it is usually a good indicator for spot advertising where we get the vast majority of our revenue.

Q. You're hoping you will get the same kind of numbers, but you don't have it yet?
A. Yes, and they are not directly related. There is a correlation, but we cannot project those kind of numbers. The only thing we can say is that our ratings for those shows are very strong. I think that is one of the things that you've seen in the upfront marketplace. The stronger shows are going to do better because advertisers have more confidence. We have "Friends,""Raymond" and "Will and Grace" that position our stations with good ratings with demos in our markets. And as we look to an improving economy, we are well-positioned for share increases.

William Drewry/CSFB.
Q. Can you give us help wanted numbers by the big markets for the quarter and for June, if you have as well.

A. In terms of the help wanted for the second quarter the group itself was down 17 percent. And that was roughly equal across the big three. There weren't a lot of changes there. They are all in that general area. However, L.A. wasn't down quite as much as the others in June. The group itself was down about 14 percent in June. L.A. wasn't down quite that much. They were in the high single digits. What we have seen is that while we are still looking at kind of double-digit declines in help wanted, we have seen sequential improvement from April on. The group was down 21 percent in April, 17 percent in May, June was down 14 percent and we are trending lower in the first couple weeks of July.

Q. Based on the guidance that you are putting out there, would we expect newspaper segment margins to be potentially up with the decent economy and decent ad revenue in the second half? You just did flat in the current quarter, and it was obviously war-impacted on the front end of that. Could margins be up or should we'd expect a flatter type of number given the cost?

A. We think margins should be up in newspapers in the second half again assuming that we see a rebound in the economy.

Mandana Hormozi/Lazard
Q. The improvement that the WB Network is seeing, is that translating into some sort of higher improvement at the station groups due to better lead ins? Are the station groups sort of on par with their ratings?

A. We had good May rating books, and WB programming was certainly part of that. But yes, anytime the WB does well, that is going to be important for us. We have also seen improvement in WB ratings in some of the less mature markets, which is helping the networks national average. But overall, yes, the WB is important for us. It helps our news ratings coming out of the WB, and it has all been very positive.

Barton Crockett/J.P. Morgan.
Q. In terms of the WB ratings trends, could you just verify that at your stations, are your ratings trend tracking close to what we are seeing at the network overall, or is there some variance there, up or down, at least in your major markets?

A. We have strong ratings. We've had increases, probably not as much as the network level because again, our group represents over 50 percent of the WB's national audience delivery. But because our ratings are in the major market's top three VHF stations, we have more mature stations, our ratings jumped earlier than some of the less mature stations in the smaller markets. As we've said for years, one of the issues of starting a new network is you have immature distribution in the smaller markets. What we are finally seeing now after WB has been on the air eight years, is those markets are starting to kick in and help. So, we have a smaller percentage increase than the overall network, but still a strong rating position.

Q. Taking a look at some of the telemarketing, “do not call” list stuff, could you give us a little color on how that might affect you in terms of how much your subscription ads come from telemarketing and what you might do with that. On the flip side, if you are seeing any signs of some of the money that has been spent in that category might be moving into media, like your newspaper and TV stations?

A. As far as telemarketing, on the newspaper side, we have been anticipating this for quite a while, and the newspapers have been really focused on retention of subscribers trying to eliminate (indiscernible) as possible, which is a tough issue. But things like getting customers on credit cards, which cuts down the churn quite a bit, and a number of other efforts in other media to keep circulation strong, that's what has been going on. But this is not really a new issue for us. It has been one that the newspaper marketing folks have been very much focused on for the last several years.

Many of the states that we operate in already have do not call lists, which would mean that they have already been anticipating this. And besides when Dennis had talked about retention we use a lot of direct marketing, we use database marketing, door-to-door marketing, and all of these tactics have been built into our cost structure over time.

Kevin Sullivan/Lehman Brothers.
Q. On a corporate expense line, it was up pretty dramatically year-over-year, as well as sequentially. Is that the right run rate to use going forward?

A. In terms of corporate expenses, the things that hurt us in the first half of the year and then the second quarter are the pension credit and also the D&O insurance. Those are the two biggest categories that have driven the corporate expenses up as much as they have. We also did have merit increases this year. Having said that, in the second half of the year, we are looking for more normal type of increases in the mid-single digit range. That goes back to the bonus accruals that I had talked about and will cycle through a lot of the D&O insurance expenses. We typically renew at the end of this month and I guess, actually in August, early September.

Q. Could you talk a little bit about national advertising on the publishing side, you are putting up very solid numbers, but relative to your peers you may be lagging a little. I was wondering if you had any insight into that.

A. As far as national advertising trends, I think we are looking at different numbers than you, but our second quarter national was pretty strong. I believe close to 10 percent. And relative to our peers, that seems to be quite good. Just looking at Gannett, it came in at just under 4 percent.
Q. Yes. I was thinking, the rate was up pretty significantly. Yesterday Knight Ridder had very big increases in the second quarter, maybe a short-term phenomena.

A. I think one thing you have to look at is the percentage of our national as a percentage of total is probably higher than those other two publishers. So we are working on a bigger base. We feel very good about the national numbers.

This is one of the categories Tribune Media Net has definitely helped us.

Jim Goss/Barrington Research.
Q. With regard to the preprint business growth you have been experiencing, do you have any sense of how much of that business is incremental versus say shift from ROP? And does it include the total market coverage type business? And if so, how is that split between, within the paper and separately?

A. We've always felt that it is incremental. It gives us an extra category, really, or an extra club in our bag to go to advertisers with to help them meet their needs. Our ROP has certain advantage, but we can do targeting with preprint that you can't get with ROP. We are certainly seeing improvement in New York, L.A., particularly L.A. and Chicago.

We are not fighting just with other newspapers and with ADVO. We are trying to go to advertisers with as many creative ways for them to reach their consumers. Fragmentation is an issue certainly for media companies, but even more of an issue for marketers. So the more ways we can go to them to help them solve their problems of reaching consumers to sell their product, the better off we are in terms of our total share of media dollars.

Q. With regard to that margin bias, I know it is becoming a more significant category. Is that actually, since you are basically taking something and distributing its rather than having the added costs involved? Does that help the margin trend?

A. It might help a little, but I don't know it is necessarily material at this point. And again, we feel this is incremental revenue that we are taking share away from the ADVOs of the world.

Q. With regard to political advertising, do you have any degree of success in selling financial campaigns in the Superstation?

A. No, that is not a category that we generate any revenue from on the Superstation. Political advertising in large part comes in the individual markets.

Q. Going back to the "do not call" issue that was brought up, I would think this would be a perfect opportunity for you there.

A. Sure. It takes one method away, it creates some issues for us in terms of subscriptions, but on the other hand, it creates issues for a lot of marketers. And hopefully they will come more to traditional media to get their message across.

David Hinson/Boston Partners.
Q. For the full year guidance that you affirmed, you mentioned modest newsprint price increases. Does that include any of the proposed increase in the newsprint price? And if so, could you kind of get further clarity?

A. We think that newsprint pricing will be up in the mid to high single digits for the year as a whole, but we don't feel that the announced increase is really going to stick in the second half year.

Q. On the free cash flow guidance that you gave, if I remember correctly, it used to be $800 million. Can you talk to where the additional $25 million came from. Was it a reduce in CAPEX or what was it?

A. You're correct, we've raised that from $800 million to $825 million. We've had some slight increases in operating cash flow and also the reduction in CAPEX. We have been around $200 million for CAPEX and we think we're going to be, as I mentioned, somewhere in the $135 to $200 million area. So those other two areas that make up that increase.

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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.