Tribune Reports 2001 Fourth Quarter
Earnings and Full Year Earnings
EPS,
before special items, is $.21 for the quarter, $.72 for the
full year
CHICAGO, January 24 , 2002 --
Tribune Company (NYSE:
TRB), one of the country's premier media companies, operating
businesses in broadcasting, publishing and on the Internet,
today reported diluted earnings per share (EPS), before restructuring
charges and non-operating items, of $.21 for the 2001 fourth
quarter, compared with $.36 for the 2000 fourth quarter. For
the full year 2001, on the same basis, Tribune reported diluted
EPS of $.72, compared with $1.30 for 2000. Including restructuring
charges and non-operating items, diluted EPS for the fourth
quarter 2001 was $.32, compared with $.11 for the same period
in 2000. Including restructuring charges, non-operating items
and a loss in 2000 from discontinued operations, diluted EPS
for the full year 2001 was $.28, compared with $.70 for 2000.
Cash earnings (defined as net income, before
restructuring charges and non-operating items, plus amortization
expense) were $134 million in the 2001 fourth quarter, down
from $185 million during the same period last year. In the
2001 fourth quarter, cash EPS, excluding restructuring charges
and non-operating items, was $.40, down from $.54 per share
in the 2000 fourth quarter.
"The downturn in the economy and a difficult
advertising environment made this a challenging year for us,"
said John W. Madigan, Tribune chairman and chief executive
officer. "The tragic events of September 11 increased
our newsgathering costs and tested our people. But I have
never been more proud of the journalism delivered by our newspapers,
television and radio stations, and by our Web sites-our journalists
rose to the challenge, as they always do," added Madigan.
"And our management team responded to the difficult revenue
environment by swiftly implementing cost containment initiatives
across all of our business units."
During the fourth quarter, Tribune incurred
$6.9 million of restructuring charges. Full year 2001 restructuring
charges totaled $152 million, which related to the voluntary
retirement program and other workforce reductions.
"The impact of the cost saving measures
announced in June 2001 began taking effect in the fourth quarter
and will continue into 2002," said Dennis J. FitzSimons,
Tribune president and chief operating officer. "Voluntary
retirement programs, staff reductions and reduced compensation
have allowed us to control costs while devoting more resources
to serving our readers, viewers and listeners." For a
clearer understanding of our continuing operations, we are
providing pro forma results for Tribune's operating groups
in addition to reporting actual results. The pro forma results
exclude restructuring charges and non-operating items, and
they have been adjusted to take out the impact of the additional
week in 2000, and they include Times Mirror for a full year
in 2000. In 2001, Tribune's fiscal year comprised 52 weeks,
compared with 53 weeks in 2000, resulting in one less week
in the fourth quarter of 2001. Discussion of reported results
also exclude restructuring charges and non-operating items
FOURTH QUARTER RESULTS
Consolidated
As Reported
Tribune's 2001 fourth quarter operating revenues decreased
13 percent to $1.3 billion, down from $1.5 billion in the
2000 fourth quarter. EBITDA (earnings before interest, taxes,
depreciation, amortization and equity results) was down 26
percent to $322 million, compared with $437 million in the
fourth quarter of 2000. Tribune's operating profit declined
34 percent to $212 million, compared with $323 million in
the fourth quarter of 2000.
Publishing
As Reported
Publishing's fourth quarter reported revenue declined 13 percent
to $983 million, compared with $1.1 billion in 2000. Publishing
EBITDA was $223 million, down 29 percent from $314 million
in 2000. Publishing operating profit decreased 37 percent
to $146 million, down from $234 million last year.
Pro Forma
In the fourth quarter, Publishing revenue declined 10 percent
to $983 million, compared with $1.1 billion in the same period
in 2000. Publishing EBITDA was $223 million, down 28 percent
from $308 million in 2000. Publishing operating profit decreased
36 percent to $146 million, from $228 million in 2000. Publishing
cash expenses, excluding acquisitions, were down 4 percent.
Management Discussion
- Fourth quarter retail advertising was
down 8 percent year-over-year, about the same as in the
third quarter. Declines in department stores, electronics
and health care were partially offset by increases in
food stores.
- National was down 12 percent year-over-year,
which is approximately the same as in the third quarter.
Declines in financial, high tech/dot.com, travel, resorts
and movies/entertainment were partially offset by increases
from auto manufacturers.
- Classifieds, year-over-year, were down
22 percent. We continue to see help wanted revenue decreases
in the 50 percent range reflecting softness in all our
newspaper markets. Chicago experienced a decline in the
60 percent range; LA was down in the 55 percent range;
and New York was down in the 45 percent range, reflecting
the greater impact of the recession in larger markets.
Auto advertising declined by 4 percent year over year.
Real estate continues to be the bright spot in classifieds
with a year over year increase of 2 percent.
- Cash operating expenses, excluding acquisitions,
were 4 percent below 2000's fourth quarter. Newsprint
and ink expense was 15 percent below 2000 as newsprint
prices were 7 percent below 2000 and consumption was 9
percent lower. Compensation expense was 7 percent lower
as savings have been realized from the voluntary retirement
program, outsourcing of certain circulation programs at
the Los Angeles Times and other reductions in force. Compensation
would have been down 11 percent except for a one-time
adjustment to workers compensation liabilities. Other
cash expenses increased 7 percent due to outsourcing costs
at Los Angeles Times and promotional spending for the
launch of the new CareerBuilder sections.
Broadcasting and Entertainment
As Reported
Broadcasting and Entertainment's reported fourth quarter revenue
declined 14 percent to $319 million compared with $371 million
in 2000. Broadcasting and Entertainment EBITDA was $111 million,
down 27 percent from $152 million in 2000. Broadcasting and
Entertainment operating profit decreased 34 percent to $81
million from $123 million in 2000.
Pro Forma
In the 2001 fourth quarter, operating revenues for Broadcasting
and Entertainment decreased 10 percent to $319 million, down
from $353 million in 2000. EBITDA fell 24 percent to $111
million from $145 million in 2000. Operating profit in the
quarter declined 30 percent to $81 million from $116 million
in 2000.
Television revenues, excluding acquisitions,
declined 14 percent to $269 million in the 2001 fourth quarter,
down from $313 million in 2000. Television cash expenses,
excluding acquisitions, were down 2 percent.
Revenues for Radio increased 7 percent to $14
million, up from $13 million in 2000.
Revenues for Entertainment/Other increased
12 percent to $26 million, up from $24 million in 2000, due
mainly to increased advertising revenues at Tribune Entertainment
and two additional Cubs home games in the quarter.
Management Discussion
- Television cash operating expenses, excluding
programming, decreased 8 percent in the quarter. Compensation
expense decreased 12 percent
Programming expenses were up 6 percent, due to the launch
of "Everybody Loves Raymond" in 16 markets and
"Just Shoot Me" and "King of the Hill"
in select markets.
- "Everybody Loves Raymond"
and "Friends" won their time periods in most
key adult demos in the top three markets in the November
sweeps.
Tribune Entertainment is the largest supplier of weekly
syndicated action hours in the U.S. "Mutant X"
and "Andromeda" are currently the No.1 and No.
2 weekly syndicated weekly hours on television.
- Tribune entered into a management agreement
with Entercom Communications for our three Denver radio
stations. Under the agreement, Entercom Communications
will manage the stations starting Feb. 1, 2002, for up
to three years, after which Entercom has the right to
purchase the stations for $180 million. During the management
contract, Tribune will seek to identify suitable television
assets to be acquired in an exchange transaction.
Interactive
As Reported
Interactive's reported fourth quarter revenue increased 21
percent to $16.3 million, up from $13.4 million in 2000. Interactive
operating cash flow losses decreased 73 percent to $3.7 million,
from $13.7 million in 2000.
Pro Forma
In the 2001 fourth quarter, Interactive revenues rose 24 percent
to $16.3 million, up from $13.1 million in 2000. For the 2001
fourth quarter, Interactive operating cash flow losses decreased
72 percent to $3.7 million, from $13.3 million in the 2000
fourth quarter.
Management Discussion
- The focus is on reducing costs and driving
revenues at our newspaper Web sites.
- The revenue gains in the fourth quarter
are due to higher classified revenues, particularly in
help wanted. These results demonstrate the benefit of
our CareerBuilder partnership, which had strong sales
in the fourth quarter. Growing share of the online recruitment
market through CareerBuilder's unique local positioning--in
print and online is the priority.
- The group is on track to be operating
cash flow positive by the end of 2002, despite the build-out
and higher promotion of our CareerBuilder strategy.
Equity Results
Equity losses for the 2001 fourth quarter were
$12.4 million, down from $16.9 million in 2000. The losses
were primarily due to Tribune's ownership interests in CareerBuilder,
BrassRing and Classified Ventures and represent Tribune's
portion of their operating losses.
Interest and Taxes
Net interest expense for the 2001 fourth quarter
decreased to $59 million, down 3 percent from $61 million
in 2000. The decrease was primarily due to the reduction in
outstanding debt and lower interest rates.
Excluding restructuring charges and non-operating
items, the effective tax rate in the 2001 fourth quarter was
48.1 percent, compared with 49.3 percent in 2000.
Non-Operating Items
In the 2001 fourth quarter, Tribune recorded
a gain of $.08 per diluted share from marking-to-market the
company's derivatives and related investments. The sale of
2.2 million shares of AOL Time Warner stock yielded a gain
of $.14 per diluted share. Tribune also recorded investment
write-downs totaling $.10 per diluted share to adjust a number
of investments to fair market value.
2001 FULL YEAR RESULTS
As Reported, Excluding Restructuring Charges
Consolidated
For the full year 2001, operating revenues
increased 6 percent to $5.3 billion, up from $5.0 billion
in 2000. EBITDA decreased 11 percent to $1.2 billion, down
from $1.4 billion in 2000. Operating profit was $802 million,
down 22 percent from $1.0 billion in 2000.
Publishing
For the full year 2001, operating revenues
for Publishing increased 12 percent to $3.8 billion, up from
$3.4 billion in 2000. EBITDA fell 10 percent to $851 million,
from $943 million in 2000. Operating profit for the year declined
23 percent to $543 million from $701 million in 2000.
Broadcasting and Entertainment
For the full year 2001, operating revenues
for Broadcasting and Entertainment decreased 8 percent to
$1.3 billion, down from $1.5 billion in 2000. EBITDA fell
20 percent to $452 million from $564 million in 2000. Operating
profit for the year declined 26 percent to $333 million from
$449 million in 2000.
For the full year 2001, operating revenues
for television decreased 10 percent to $1.1 billion, down
from $1.3 billion in 2000. EBITDA fell 20 percent to $426
million from $534 million in 2000. Operating profit for the
year declined 26 percent to $312 million, from $424 million
in 2000.
For the full year 2001, operating revenues
for Radio decreased 4 percent to $56 million down from $58
million last year. EBITDA fell 1 percent to $22 million from
$23 million in 2000. Operating profit for the year declined
1 percent to $21.1 million from $21.4 million in 2000.
For the full year 2001, operating revenues
for Entertainment/Other increased 10 percent to $164 million,
up from $149 million last year. EBITDA fell 51 percent to
$3.9 million from $8.0 million in 2000. Operating profit for
the year declined 95 percent to $0.2 million from $4.1 million
in 2000.
Interactive
For the full year 2001, interactive revenues
rose 42 percent to $59 million, up from $42 million in 2000,
primarily on higher classified revenues. Interactive operating
cash flow losses decreased 55 percent to $19.9 million, from
$44.1 million in 2000.
Additional Financial Details
Debt at the end of 2001 was approximately $3.4
billion and is expected decline to about $3.1 billion by the
end of 2002. Capital expenditures in the fourth quarter were
about $100 million and approximately $275 million for the
full year. Two significant preprint facility projects underway
in Los Angeles and Chicago contributed to higher than normal
capital expenditures. Both of these projects along with the
remaining Digital TV upgrades will be finished in 2002.
2002 FULL YEAR OUTLOOK
Consistent with the guidance provided in December,
operating cash flow and earnings should grow in the low single
digits, even with flat revenues, because of a 1 to 2 percent
reduction in cash expenses. If the economy recovers quickly,
earnings could increase in the high single to low double digit
range. In either case, full-year earnings are expected to
be within the current range of analysts' estimates.
WEBCAST OF THE CONFERENCE
CALL
Today at 8:00 a.m. (CDT), a live Webcast of
the 2001 fourth 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 Jan. 24 through Feb. 7. More information
about Tribune is available at www.tribune.com
or by calling 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. |
