Tribune Reports 2001 Second Quarter
Earnings
$.24 per share from continuing
operations
Merger with Times Mirror
accretive to cash EPS
CHICAGO, July 19, 2001 -- Tribune
Company (NYSE: TRB) today
reported diluted earnings per share (EPS) from continuing
operations, excluding a restructuring charge and non-operating
items, of $.24 for the 2001 second quarter, compared with
$.44 for the 2000 second quarter. A restructuring charge of
$14.3 million, or $.03 per share, also has been recorded in
the quarter to cover expenses associated with staff reduction
initiatives.
"We are acting aggressively to offset
the effects of the slowing advertising environment,"
said John W. Madigan, Tribune's chairman, president and chief
executive officer. "Our businesses continue to generate
substantial cash flow, helped by significant cost-cutting
initiatives across the company. We are confident that the
moves we are making now will position us well when the economy
recovers."
Cash earnings (defined as income from continuing
operations plus amortization expense, excluding restructuring
charge and non-operating items) were $143 million in the 2001
second quarter, down 10 percent from $158 million during the
same period last year.
EBITDA (earnings before interest, taxes, depreciation,
amortization, equity results, restructuring charge and non-operating
items) was $348 million in the second quarter of 2001, compared
with $391 million in the second quarter of 2000.
Reported Consolidated Results
Tribune's reported 2001 second quarter operating
revenues increased 2 percent to $1.4 billion, up from $1.3
billion in the 2000 second quarter. For the 2001 second quarter,
Tribune's reported operating profit, before restructuring
charge, declined 21 percent to $239 million, compared with
$302 million in the 2000 second quarter. In the 2001 second
quarter, cash EPS, excluding the restructuring charge, decreased
to $.42, down from $.59 per share in the 2000 second quarter.
The Times Mirror acquisition was $.03 accretive in the second
quarter of 2001.
Consolidated Pro Forma Results
Tribune's operating results are reported on
a pro forma basis to provide comparable financial information.
Pro forma results assume that the Times Mirror acquisition
occurred at the beginning of 2000.
In the 2001 second quarter, Tribune's pro forma
operating revenues decreased 9 percent to $1.4 billion, down
from $1.5 billion in the 2000 second quarter. For the 2001
second quarter, EBITDA declined 20 percent to $348 million,
compared with $436 million in the 2000 second quarter. Tribune's
operating profit in the 2001 second quarter dropped 26 percent
to $239 million, down from $322 million for the 2000 second
quarter.
Broadcasting and Entertainment
In the 2001 second quarter, operating revenues
for broadcasting and entertainment decreased 7 percent to
$387 million, down from $418 million in the same period last
year. EBITDA fell 21 percent in the 2001 second quarter to
$135 million, from $171 million in the second quarter of 2000.
Operating profit in the quarter declined 26 percent to $105
million, from $142 million in the second quarter of last year.
Television revenues declined 10 percent to
$314 million in the 2001 second quarter, down from $348 million
in last year's second quarter. The revenue decrease was due
to lower dot.com, automotive and retail ad spending, and reflects
challenging comparisons from 2000's second quarter, when television
revenues increased 11 percent. Excluding programming, television
cash operating expenses in the quarter were down 3 percent.
Revenues for Entertainment/Other increased
7 percent to $57 million, up from $54 million in last year's
second quarter due to increased advertising revenues at Tribune
Entertainment and increased per-game Cubs' revenues, offset
by two fewer games.
The Times Mirror merger did not impact broadcasting
and entertainment.
Publishing - Reported
Total operating revenues for publishing were
$966 million in the 2001 second quarter, compared with $917
million in 2000. Publishing EBITDA, excluding the restructuring
charge, was $227 million, compared with $253 million in the
second quarter of last year. Publishing operating profit,
excluding restructuring charge, decreased to $151 million,
from $195 million in the 2000 second quarter.
Publishing - Pro Forma
On a pro forma basis, operating revenues for
the 2001 second quarter were $966 million, 10 percent below
the $1.07 billion in the 2000 second quarter. EBITDA was $227
million in the second quarter 2001, 24 percent lower than
last year's $300 million. Operating profit was down 31 percent
to $151 million, compared with last year's second quarter
operating profit of $219 million. Publishing cash expenses,
other than newsprint and ink, were down 5 percent in the 2001
second quarter.
In the 2001 second quarter, pro forma advertising
revenue totaled $745 million, 13 percent below last year's
second quarter total of $858 million. Retail advertising revenue
decreased 7 percent in the second quarter 2001, mainly due
to weakness in the department, food and electronic store categories.
National advertising revenue was 14 percent below last year's
second quarter, primarily due to lower dot.com and weakness
in the entertainment/movies and financial categories. Classified
advertising revenue declined 19 percent from last year's second
quarter because of weakness in the help wanted category.
Newsprint expense fell 3 percent in the 2001
second quarter. Although newsprint prices increased 8 percent,
consumption declined 12 percent.
Interactive - Reported
Interactive revenues were $14.3 million in
the 2001 second quarter, up from $10.5 million in the 2000
second quarter. Interactive operating losses, excluding restructuring
charge, were $8.2 million in the 2001 second quarter, down
from $13.1 million for the same period last year.
Interactive - Pro Forma
In the 2001 second quarter, interactive pro
forma revenues rose 22 percent to $14.3 million, up from $11.7
million in the same period last year, primarily on higher
classified revenues. For the 2001 second quarter, interactive
operating losses decreased 46 percent to $8.2 million, from
$15.2 million in the 2000 second quarter.
Equity Results
Reported equity losses for the 2001 second
quarter were $16 million, down from $18 million in 2000. The
losses were primarily due to Tribune's ownership interests
in CareerBuilder, BrassRing, Classified Ventures and The WB
Network.
Interest and Taxes
Interest expense for the 2001 second quarter
rose to $66 million, up from $61 million in 2000. This increase
resulted from the full quarter impact in 2001 of the interest
on the debt for the Times Mirror merger.
Excluding the restructuring charge and non-operating
items, the effective tax rate in the 2001 second quarter increased
to 48.2 percent, from 41.3 percent in 2000. The higher effective
tax rate in the 2001 second quarter was mainly due to the
Times Mirror acquisition.
Restructuring Charge
During the 2001 second quarter, Tribune announced
a voluntary retirement program (VRP), which was offered to
approximately 1,400 employees who met certain eligibility
requirements. In addition to the VRP, there are various other
workforce reduction initiatives being implemented throughout
the company. In the 2001 second quarter, Tribune incurred
a $14.3 million restructuring charge for these initiatives.
Non-Operating Items
In the 2001 second quarter, Tribune recorded
a gain of $.07 per diluted share from marking to market the
company's derivatives and related AOL Time Warner and Mattel
investments. Tribune also recorded investment write-downs
of $.07 per diluted share to adjust several of Tribune's investments
to fair market value.
Outlook
For the 2001 third quarter, Tribune expects
earnings to be at the low end of analysts' estimates, currently
a range of 15 to 28 cents.
Webcast of Conference Call
Today at 8:00 a.m. (CDT), a live Webcast of
the 2001 second quarter call will be accessible through www.tribune.com
and www.streetfusion.com.
An archive of the Webcast will be available on these sites
from July 19 through Aug. 2. 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. |
