TRIBUNE REPORTS RECORD 2Q EARNINGS (PART THREE) cont'd..... TRIBUNE COMPANY SECOND QUARTER RESULTS OF OPERATIONS (Unaudited) (In thousands, except per share data) SECOND QUARTER(A) ---------------------------------- Percent 1997 1996 Change --------- --------- --------- OPERATING REVENUES Publishing $ 360,131 $ 330,495 9 Broadcasting and Entertainment 300,267 253,280 19 Education 59,344 58,152 2 --------- --------- Total Operating Revenues $ 719,742 $ 641,927 12 --------- --------- OPERATING PROFIT Publishing $ 92,296 $ 72,861 27 Broadcasting and Entertainment 81,312 65,904 23 Education 11,435 13,749 (17) Corporate expenses (8,011) (7,641) 5 --------- --------- Total Operating Profit 177,032 144,873 22 Other(B) 28,529 - - Interest Income 5,757 7,825 (26) Interest Expense (25,060) (11,033) 127 --------- --------- Income Before Income Taxes 186,258 141,665 31 Income Taxes (75,326) (57,375) 31 --------- --------- NET INCOME 110,932 84,290 32 Preferred Dividends, net of tax (4,700) (4,697) - --------- --------- Net Income Attributable to Common Shares $ 106,232 $ 79,593 33 ========= ========= NET INCOME PER SHARE Primary $ .86 $ .65 32 --------- --------- Fully Diluted(C) $ .79 $ .60 32 --------- --------- DIVIDENDS PER COMMON SHARE $ .16 $ .15 7 --------- --------- Weighted Average Common Shares Outstanding(D) 122,822 122,258 - --------- --------- (A) 1997 quarter: March 31, 1997 to June 29, 1997. 1996 quarter: April 1, 1996 to June 30, 1996. (B) The second quarter of 1997 included several non-recurring items. In May 1997, the company sold shares of America Online common stock, which resulted in a pretax gain of $93.8 million, or $.47 per share on a primary basis. In June 1997, the company sold shares of CheckFree Corporation common stock, which resulted in a pretax gain of $15.6 million, or $.08 per share on a primary basis. In June 1997, the company wrote down to fair market value its investment in The Learning Company common stock in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities." The writedown resulted in a pretax loss of $77.3 million, or $.39 per share on a primary basis. Excluding non-recurring items, 1997 second quarter primary net income per share was $.72 and fully diluted net income per share was $.66. (C) Fully diluted net income per share is computed assuming that all of the convertible preferred shares are converted into common shares. Also, weighted average common shares outstanding is adjusted for the dilutive effect of stock options. Following is the calculation of fully diluted net income per share for the second quarter (in thousands): SECOND QUARTER 1997 1996 --------- --------- Net income $ 110,932 $ 84,290 Additional ESOP contribution required assuming all preferred shares were converted, net of tax (3,288) (3,375) --------- --------- Adjusted net income $ 107,644 $ 80,915 --------- --------- Weighted average common shares outstanding 122,822 122,258 Assumed conversion of preferred shares into common 11,093 11,406 Assumed exercise of stock options, net of common shares assumed repurchased 1,803 1,996 --------- --------- Adjusted weighted average common shares outstanding 135,718 135,660 --------- --------- Fully diluted net income per share $ .79 $ .60 --------- --------- (D) The number of common shares outstanding, in thousands, at June 29, 1997 was 123,250. TRIBUNE COMPANY FIRST HALF RESULTS OF OPERATIONS (Unaudited) (In thousands, except per share data) FIRST HALF(A) ---------------------------------- Percent 1997 1996 Change --------- --------- --------- OPERATING REVENUES Publishing $ 715,257 $ 657,828 9 Broadcasting and Entertainment 501,657 440,475 14 Education 96,747 80,746 20 --------- --------- Total Operating Revenues $ 1,313,661 $ 1,179,049 11 --------- --------- OPERATING PROFIT Publishing $ 187,601 $ 136,104 38 Broadcasting and Entertainment 110,996 94,928 17 Education 11,228 15,971 (30) Corporate expenses (16,384) (15,055) 9 --------- --------- Total Operating Profit 293,441 231,948 27 Other(B) 28,529 - - Interest Income 15,187 16,375 (7) Interest Expense (40,634) (21,988) 85 --------- --------- Income from Continuing Operations Before Income Taxes 296,523 226,335 31 Income Taxes (121,086) (91,666) 32 --------- --------- INCOME FROM CONTINUING OPERATIONS 175,437 134,669 30 DISCONTINUED OPERATIONS OF QUNO(C) - 89,317 - --------- --------- NET INCOME 175,437 223,986 (22) Preferred Dividends, net of tax (9,399) (9,393) - --------- --------- Net Income Attributable to Common Shares $ 166,038 $ 214,593 (23) ========= ========= NET INCOME PER SHARE Primary: Continuing Operations $ 1.35 $ 1.02 32 Discontinued Operations - .73 - --------- --------- Net Income $ 1.35 $ 1.75 (23) ========= ========= Fully Diluted(D): Continuing Operations $ 1.24 $ .94 32 Discontinued Operations - .65 - --------- --------- Net Income $ 1.24 $ 1.59 (22) ========= ========= DIVIDENDS PER COMMON SHARE $ .32 $ .30 7 --------- --------- Weighted Average Common Shares Outstanding(E) 122,684 122,844 - --------- --------- (A) 1997 first half: December 30, 1996 to June 29, 1997. 1996 first half: January 1, 1996 to June 30, 1996. (B) The first half of 1997 included several non-recurring items. In May 1997, the company sold shares of America Online common stock, which resulted in a pretax gain of $93.8 million, or $.47 per share on a primary basis. In June 1997, the company sold shares of CheckFree Corporation common stock, which resulted in a pretax gain of $15.6 million, or $.08 per share on a primary basis. In June 1997, the company wrote down to fair market value its investment in The Learning Company common stock in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities." The writedown resulted in a pretax loss of $77.3 million, or $.39 per share on a primary basis. Excluding non-recurring items, 1997 first half primary net income per share was $1.21 and fully diluted net income per share was $1.11. (C) In March 1996, the company sold its holdings in QUNO Corporation as part of QUNO's merger with Donohue Inc. (D) Fully diluted net income per share is computed assuming that all of the convertible preferred shares are converted into common shares. Also, weighted average common shares outstanding is adjusted for the dilutive effect of stock options. Following is the calculation of fully diluted net income per share for the first half (in thousands): MORE....