-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KInGXHui3nzAKXxPJswL/ntB5l7uM87Bj68gfF8xlrLxiAbW+gM/oI33yjrN3VJq D/QVwj1YvvaLT0Zf840rdg== 0000726513-03-000018.txt : 20030805 0000726513-03-000018.hdr.sgml : 20030805 20030804180316 ACCESSION NUMBER: 0000726513-03-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20030629 FILED AS OF DATE: 20030805 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRIBUNE CO CENTRAL INDEX KEY: 0000726513 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 361880355 STATE OF INCORPORATION: DE FISCAL YEAR END: 1227 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08572 FILM NUMBER: 03821735 BUSINESS ADDRESS: STREET 1: 435 N MICHIGAN AVE STREET 2: STE 600 CITY: CHICAGO STATE: IL ZIP: 60611 BUSINESS PHONE: 3122229100 10-Q 1 form10q2q03.htm SECOND QUARTER 2003 FORM 10-Q FIRST QUARTER 2003 FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 29, 2003
Commission file number 1-8572
TRIBUNE COMPANY
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

36-1880355
(I.R.S. Employer
Identification No.)

435 North Michigan Avenue, Chicago, Illinois
(Address of principal executive offices)

60611
(Zip code)

Registrant's telephone number, including area code: (312) 222-9100
No Changes
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes / X / No / /

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes / X / No / /

At July 28, 2003 there were 313,691,626 shares outstanding of the Company's Common Stock ($.01 par value per share), excluding 83,441,765 shares held by subsidiaries and affiliates of the Company.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

TRIBUNE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands of dollars, except per share data)
(Unaudited)

	Second Quarter Ended				First Half Ended
	June 29, 2003		June 30, 2002		June 29, 2003		June 30, 2002
Operating Revenues	$ 1,449,626		$ 1,380,553		$ 2,739,673		$ 2,614,191

Operating Expenses
Cost of sales (exclusive of items shown below)	684,741		657,142		1,309,047		1,266,505
Selling, general and administrative	337,583		325,162		670,124		642,818
Depreciation	54,116		52,610		108,365		104,900
Amortization of intangible assets	3,667		2,597		6,209		5,192
Restructuring charges (Note 2)	–		–		–		27,253

Total operating expenses	1,080,107		1,037,511		2,093,745		2,046,668


Operating Profit	369,519		343,042		645,928		567,523

Net income (loss) on equity investments	1,508		(3,611	)	(7,506	)	(24,308	)
Interest income	1,906		2,117		3,981		4,189
Interest expense	(50,651	)	(53,799	)	(101,598	)	(108,891	)
Gain/(loss) on change in fair values of derivatives
and related investments	54,276		(98,953	)	17,056		(144,469	)
Gain on sales of subsidiaries and investments, net	2,340		4,807		52,619		6,233
Loss on investment write-downs	(4,609	)	(6,046	)	(4,837	)	(7,535	)


Income Before Income Taxes and Cumulative
Effect of Change in Accounting Principle	374,289		187,557		605,643		292,742
Income taxes	(144,787	)	(73,348	)	(234,989	)	(114,516	)


Income Before Cumulative Effect of Change in
Accounting Principle	229,502		114,209		370,654		178,226
Cumulative effect of change in accounting principle,
net of tax	–		–		–		(165,587	)


Net Income	229,502		114,209		370,654		12,639
Preferred dividends, net of tax	(6,105	)	(6,025	)	(12,336	)	(12,420	)

Net Income Attributable to Common Shares	$ 223,397		$ 108,184		$ 358,318		$ 219

Earnings Per Share (Note 5):
Basic:
Before cumulative effect of change in accounting
principle	$ .72	$ .36	$ 1.16	$ .55
Cumulative effect of accounting change, net	–	–	–	(.55	)

Net income	$ .72	$ .36	$ 1.16	–


Diluted:
Before cumulative effect of change in accounting
principle	$ .67	$ .33	$ 1.08	$ .52
Cumulative effect of accounting change, net	–	–	–	(.50	)

Net income	$ .67	$ .33	$ 1.08	$ .02


Dividends per common share	$ .11	$ .11	$ .22	$ .22

See Notes to Condensed Consolidated Financial Statements.

TRIBUNE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
(Unaudited)

	June 29, 2003		Dec. 29, 2002

Assets
Current Assets
Cash and cash equivalents	$ 127,743		$ 105,931
Accounts receivable, net	801,410		814,511
Inventories	45,463		47,462
Broadcast rights	298,669		326,557
Deferred income taxes	127,631		149,570
Prepaid expenses and other	55,750		80,623

Total current assets	1,456,666		1,524,654

Property, plant and equipment	3,437,513		3,386,123
Accumulated depreciation	(1,678,188	)	(1,586,497	)

Net properties	1,759,325		1,799,626

Broadcast rights	328,050		413,857
Goodwill	5,505,895		5,419,113
Other intangible assets, net	3,241,225		2,997,958
AOL Time Warner stock related to PHONES debt	253,120		199,040
Other investments	636,925		700,582
Prepaid pension costs	877,582		864,626
Other assets	162,809		158,872

Total assets	$ 14,221,597		$ 14,078,328

See Notes to Condensed Consolidated Financial Statements.

TRIBUNE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
(Unaudited)

	June 29, 2003		Dec. 29, 2002

Liabilities and Shareholders' Equity
Current Liabilities
Long-term debt due within one year	$ 46,630		$ 46,368
Contracts payable for broadcast rights	295,111		334,545
Deferred income	117,767		87,962
Accounts payable, accrued expenses and other current liabilities	612,660		685,101

Total current liabilities	1,072,168		1,153,976

PHONES debt related to AOL Time Warner stock	565,440		523,440
Other long-term debt	2,143,064		2,703,262
Deferred income taxes	2,211,267		2,081,092
Contracts payable for broadcast rights	495,406		578,034
Compensation and other obligations	927,019		898,424

Total liabilities	7,414,364		7,938,228

Shareholders' Equity
Series B convertible preferred stock	217,265		227,408
Series C convertible preferred stock, net of treasury stock	44,260		44,260
Series D-1 convertible preferred stock, net of treasury stock	38,097		38,097
Series D-2 convertible preferred stock, net of treasury stock	24,510		24,510
Common stock and additional paid-in capital	8,561,469		8,342,505
Retained earnings	4,806,750		4,516,291
Treasury common stock (at cost)	(6,888,863	)	(7,047,670	)
Unearned compensation related to ESOP	(33,772	)	(33,772	)
Accumulated other comprehensive income	37,517		28,471

Total shareholders' equity	6,807,233		6,140,100

Total liabilities and shareholders' equity	$ 14,221,597		$ 14,078,328

See Notes to Condensed Consolidated Financial Statements.

TRIBUNE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)
(Unaudited)

	First Half Ended
	June 29, 2003		June 30, 2002
Operations
Net income	$ 370,654		$ 12,639
Adjustments to reconcile net income to net cash provided
by operations:
(Gain)/loss on change in fair values of derivatives
and related investments	(17,056	)	144,469
Gain on sales of subsidiaries and investments, net	(52,619	)	(6,233	)
Loss on investment write-downs	4,837		7,535
Cumulative effect of accounting change, net	–		165,587
Depreciation	108,365		104,900
Amortization of intangible assets	6,209		5,192
Deferred income taxes	58,685		(17,770	)
Other, net	71,527		18,337

Net cash provided by operations	550,602		434,656


Investments
Capital expenditures	(61,961	)	(77,186	)
Acquisitions and investments	(232,711	)	(18,658	)
Proceeds from sales of investments	67,237		12,891
Other, net	–		(1,571	)

Net cash used for investments	(227,435	)	(84,524	)


Financing
Repayments of long-term debt	(274,934	)	(294,890	)
Sales of common stock to employees, net	103,420		84,152
Purchases of treasury common stock	(49,646	)	(29,363	)
Dividends	(80,195	)	(78,353	)

Net cash used for financing	(301,355	)	(318,454	)


Net increase in cash and cash equivalents	21,812		31,678

Cash and cash equivalents, beginning of year	105,931		65,836


Cash and cash equivalents, end of quarter	$ 127,743		$ 97,514

See Notes to Condensed Consolidated Financial Statements.

TRIBUNE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1: BASIS OF PREPARATION

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary for a fair statement of the financial position of Tribune Company and its subsidiaries (the “Company” or “Tribune”) as of June 29, 2003 and the results of their operations for the second quarters and first halves ended June 29, 2003 and June 30, 2002 and cash flows for the first halves ended June 29, 2003 and June 30, 2002. All adjustments reflected in the accompanying unaudited condensed consolidated financial statements are of a normal recurring nature. Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Certain prior year amounts have been reclassified to conform with the 2003 presentation. These reclassifications had no impact on reported 2002 total revenues, operating profit or net income.

Previously, the Company’s interactive and publishing businesses were separate reporting segments. However, as a result of various management and organizational changes, the two groups were integrated during the first quarter of 2003. Consequently, and in accordance with segment reporting guidelines, the operating results for the Company’s interactive businesses are now reported as part of the operating results of the publishing segment. For comparison purposes, prior year results are also shown on this basis.

NOTE 2: RESTRUCTURING CHARGES

In the first quarter of 2002, the Company recorded pretax restructuring charges of $27.3 million ($16.7 million
after-tax) for various cost reduction initiatives. Approximately 300 full-time equivalent employee positions were eliminated as a result of these initiatives. Pretax restructuring charges of approximately $25 million were recorded at the publishing segment, $1.1 million at the broadcasting and entertainment segment and $1.2 million at corporate during 2002. These restructuring charges, consisting primarily of compensation expense, are presented as a separate line item in the unaudited condensed consolidated statements of income.

A summary of the significant components of the pretax restructuring charges for the first half ended June 30, 2002 is as follows (in millions):

	Publishing	Broadcasting	Corporate	Total
Severance costs	$ 18.2	$ 0.8	$ 0.4	$ 19.4
Enhanced early retirement
pension costs	2.2	–	–	2.2
Asset disposals	3.0	0.3	0.2	3.5
Lease termination costs	1.6	–	0.6	2.2

Total	$ 25.0	$ 1.1	$ 1.2	$ 27.3

Accruals for the restructuring charges amounted to $4.5 million at June 29, 2003. The accruals primarily consist of costs related to severance and lease termination costs. A summary of the activity with respect to the restructuring accrual is as follows (in millions):


Restructuring accrual at Dec. 29, 2002	$ 11.1
Payments	(6.6	)

Restructuring accrual at June 29, 2003	$ 4.5

NOTE 3: NEW ACCOUNTING STANDARDS

In December 2002, the Financial Accounting Standards Board (“FASB”) issued Financial Accounting Standard (“FAS”) No. 148, “Accounting for Stock-Based Compensation - Transition and Disclosure - an amendment of FASB Statement No. 123.” FAS 148 requires disclosure in both annual and quarterly financial statements about the method of accounting for stock-based employee compensation, and the effect of the method used on reported results. These additional disclosures are required beginning with the Form 10-Q for the first quarter of 2003.

The Company accounts for its stock-based compensation plans in accordance with Accounting Principles Board (“APB”) Opinion No. 25 and related Interpretations. Under APB 25, no compensation expense is recorded because the exercise price of employee stock options equals the market price of the underlying stock on the date of grant. Under FAS No. 123, “Accounting for Stock-Based Compensation,” compensation cost is measured at the grant date based on the estimated fair value of the award and is recognized as compensation expense over the vesting or service period. Had compensation cost for these plans been determined consistent with FAS 123, the Company’s second quarter and first half net income and EPS would have been reduced to the following pro forma amounts (in thousands, except per share data):

	Second Quarter Ended June 29, 2003		Second Quarter Ended June 30, 2002
	As Reported	Pro Forma	As Reported	Pro Forma
Net income	$229,502	$211,248	$114,209	$ 93,730
Net income attributable
to common shares	$223,397	$205,143	$108,184	$ 87,705
Basic EPS	$ 0.72	$ 0.66	$ 0.36	$ 0.29
Diluted EPS	$ 0.67	$ 0.62	$ 0.33	$ 0.27

	First Half Ended June 29, 2003		First Half Ended June 30, 2002
	As Reported	Pro Forma	As Reported	Pro Forma
Net income (loss)	$370,654	$333,750	$12,639	$(27,461	)
Net income (loss) attributable
to common shares	$358,318	$321,414	$ 219	$(39,881	)
Basic EPS	$ 1.16	$ 1.04	$ –	$ (0.13	)
Diluted EPS	$ 1.08	$ 0.97	$ 0.02	$ (0.10	)

In determining the pro forma compensation cost, the weighted average fair value of options granted at date of grant was estimated to be $8.82 and $12.40 in the second quarter and first half of 2003, respectively, and $6.72 and $11.34 in the second quarter and first half of 2002, respectively, using the Black-Scholes option pricing model and assumptions as provided under FAS 123. For both the second quarter and first half of 2003 and 2002, the following weighted average assumptions were used for general awards and replacement options:

	2003		2002
	General Awards	Replacement Options	General Awards	Replacement Options
Risk-free interest rate	2.8%	1.5%	4.5%	3.0%
Expected dividend yield	1.0%	1.0%	1.0%	1.0%
Expected stock price volatility	32.7%	29.7%	31.8%	28.6%
Expected life (in years)	5	2	5	2

Under certain circumstances, replacement options are granted when a participant pays the exercise price of a stock option and related tax withholding obligations with previously acquired shares of common stock. The number of replacement options granted is equal to the number of shares used to pay the exercise price and related tax withholding obligations. The exercise price of a replacement option is equal to the market price of the underlying stock on the date

of grant, and the term is equal to the remaining term of the original option. Replacement options vest one year from the date of grant. The after-tax compensation cost related to replacement options represented $3.9 million and $7.3 million of the $18.3 million and $36.9 million pro forma reduction in net income in the second quarter and first half of 2003, respectively. The after-tax compensation cost related to replacement options represented $2.5 million and $4.8 million of the $20.5 million and $40.1 million pro forma reduction in net income in the second quarter and first half of 2002, respectively. The Company granted broad based stock options in the first quarter of 2002 to the majority of employees, in lieu of merit wage increases. The broad based stock option grants vested after one year and had an after-tax compensation cost of $5.7 million and $11.2 million in the second quarter and first half of 2002, respectively.

NOTE 4: GOODWILL AND OTHER INTANGIBLE ASSETS

The provisions of FAS No. 142, “Goodwill and Other Intangible Assets,” that pertain to impairment of intangible assets have superceded the impairment related provisions included in FAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of.” Under FAS 142, the annual impairment review of goodwill and other intangible assets that are not being amortized must be based generally on fair values; the review under FAS 121 was based generally on projected future undiscounted cash flows. The estimated fair values of these assets subject to the impairment review were calculated as of Dec. 30, 2001 and Dec. 29, 2002 based on projected future discounted cash flow analyses. As a result of initially applying the new impairment provisions of FAS 142, the Company recorded a pretax charge of $271 million ($166 million after-tax, or $.50 per diluted share) in the first quarter of 2002. The charge related to certain of the Company’s newspaper mastheads ($226 million), a Federal Communications Commission (“FCC”) license ($43 million) and a television network affiliation agreement ($2 million), and is presented as the cumulative effect of a change in accounting principle in the Company’s unaudited condensed consolidated statements of income. The impairments were primarily the result of decreases in operating revenues compared to forecasts prepared at the dates the respective companies were acquired. No adjustment to intangible assets was required as a result of the impairment review conducted in the fourth quarter of 2002.

Goodwill and other intangible assets at June 29, 2003 and Dec. 29, 2002 consisted of the following (in thousands):

	June 29, 2003				Dec. 29, 2002
	Gross Amount	Accumulated Amortization		Net Amount	Gross Amount	Accumulated Amortization		Net Amount
Intangible assets continuing to be
amortized
Subscribers (useful life of 15
to 20 years)	$ 195,697	$ (37,888	)	$157,809	$195,697	$(32,885	)	$162,812
Other (useful life of 3 to 40 years)	35,956	(2,854	)	33,102	18,002	(1,648	)	16,354

Total	$ 231,653	$ (40,742	)	190,911	$213,699	$(34,533	)	179,166

Goodwill and other intangibles no
longer being amortized
Goodwill
Publishing				4,017,153				4,016,882
Broadcasting and Entertainment				1,488,742				1,402,231

Total goodwill				5,505,895				5,419,113
Newspaper mastheads				1,575,814				1,575,814
FCC licenses				1,196,092				1,003,970
Network affiliation agreements				270,476				231,076
Tradename				7,932				7,932

Total				8,556,209				8,237,905

Total goodwill and other intangible
assets				$8,747,120				$ 8,417,071

NOTE 5: EARNINGS PER SHARE

The computations of basic and diluted earnings per share (“EPS”) were as follows (in thousands, except per share data):

	Second Quarter Ended				First Half Ended
	June 29, 2003		June 30, 2002		June 29, 2003		June 30, 2002

Basic EPS:
Income before cumulative effect of change in
accounting principle	$ 229,502		$ 114,209		$ 370,654		$ 178,226
Cumulative effect of change in accounting
principle, net of tax	–		–		–		(165,587	)

Net income	229,502		114,209		370,654		12,639
Preferred dividends, net of tax	(6,105	)	(6,025	)	(12,336	)	(12,420	)

Net income attributable to common shares	$ 223,397		$ 108,184		$ 358,318		$ 219
Weighted average common shares outstanding	310,530		301,312		308,748		300,201

Basic EPS	$ .72		$ .36		$ 1.16		$ –


Diluted EPS:
Income before cumulative effect of change in
accounting principle	$ 229,502		$ 114,209		$ 370,654		$ 178,226
Cumulative effect of change in accounting
principle, net of tax	–		–		–		(165,587	)

Net income	229,502		114,209		370,654		12,639
Additional ESOP contribution required
assuming Series B preferred shares were
converted, net of tax	(2,409	)	(2,389	)	(4,857	)	(5,072	)
Dividends on Series C, D-1, and D-2 preferred
stock	(2,063	)	(2,014	)	(4,126	)	(4,028	)
LYONs interest expense, net of tax	1,324		1,561		2,884		3,125

Adjusted net income	$ 226,354		$ 111,367		$ 364,555		$ 6,664


Weighted average common shares outstanding	310,530		301,312		308,748		300,201
Assumed conversion of Series B preferred shares
into common shares	15,970		17,117		16,098		17,117
Assumed exercise of stock options, net of
common shares assumed repurchased
with the proceeds	7,107		7,085		6,857		6,556
Assumed conversion of LYONs debt securities	5,871		7,094		6,423		7,177

Adjusted weighted average common shares
outstanding	339,478		332,608		338,126		331,051

Diluted EPS	$ .67		$ .33		$ 1.08		$ .02

Basic EPS is computed by dividing net income attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted EPS was computed assuming that the Series B convertible preferred shares and the LYONs debt securities were converted into common shares. The LYONs converted into approximately seven million shares of common stock during June, 2003; therefore, a weighted portion was used in the second quarter and first half 2003 calculations. Also, for both years, weighted average common shares outstanding was adjusted for the dilutive effect of stock options. The Company has certain other convertible securities which were not included in the calculation of diluted EPS because their effects were antidilutive.

NOTE 6: CHANGES IN OPERATIONS AND NON-OPERATING ITEMS

Acquisitions – On March 21, 2003, the Company acquired the stock of KPLR-TV, St. Louis, and the assets of KWBP-TV, Portland, Oregon, from ACME Communications for a total of $275 million. The Company acquired the stock of KPLR-TV for $200 million in cash. The acquisition of the assets of KWBP-TV was structured as a like-kind asset exchange for income tax purposes. It was funded with the remaining assets of the Denver radio station group (KKHK-FM, now known as KQMT-FM), with an estimated fair market value of $55 million, plus $20 million in cash. The results of operations of KWBP-TV and KPLR-TV are included in the unaudited condensed consolidated statements of income since their date of acquisition.

Non-Operating Items – The second quarter and first half of 2003 included several non-operating items, summarized as follows (in thousands):

	Second Quarter Ended June 29, 2003				First Half Ended June 29, 2003
	Pretax Gain (Loss)		After-tax Gain (Loss)		Pretax Gain (Loss)		After-tax Gain (Loss)
Gain on change in fair values
of derivatives and related investments	$ 54,276		$ 33,217		$ 17,056		$ 10,438
Gain on sales of subsidiaries and
investments, net	2,340		1,432		52,619		32,203
Loss on investment write-downs	(4,609	)	(2,821	)	(4,837	)	(2,960	)

Total non-operating items	$ 52,007		$ 31,828		$ 64,838		$ 39,681

In the second quarter of 2003, changes in the fair values of the Company’s derivatives, net of changes in the fair values of the related investments, resulted in a non-cash pretax gain of $54 million. This gain resulted primarily from a $72 million increase in the fair value of 16.0 million shares of AOL Time Warner common stock, which was partially offset by an $18 million increase in the fair value of the derivative component of the PHONES. In the first half of 2003, changes in the fair values of the Company’s derivatives, net of changes in the fair values of the related investments, resulted in a non-cash pretax gain of $17 million. This gain resulted primarily from a $54 million increase in the fair value of 16.0 million shares of AOL Time Warner common stock, which was partially offset by a $37 million increase in the fair value of the derivative component of the PHONES.

In the first half of 2003, the gain on sales of subsidiaries and investments resulted primarily from the March 21, 2003 divestiture of the assets of the Company’s remaining Denver radio station, KKHK-FM, now known as KQMT-FM, plus cash of $20 million, for the assets of KWBP-TV, Portland, Ore. The divestiture of the Denver radio station assets resulted in a pretax gain of $51 million.

The second quarter and first half of 2002 also included several non-operating items, summarized as follows
(in thousands):

	Second Quarter Ended June 30, 2002				First Half Ended June 30, 2002
	Pretax Gain (Loss)		After-tax Gain (Loss)		Pretax Gain (Loss)		After-tax Gain (Loss)
Loss on change in fair values
of derivatives and related investments	$ (98,953	)	$(60,559	)	$(144,469	)	$(88,415	)
Gain on sales of investments	4,807		2,941		6,233		3,814
Loss on investment write-downs	(6,046	)	(3,700	)	(7,535	)	(4,611	)

Total non-operating items	$(100,192	)	$(61,318	)	$(145,771	)	$(89,212	)

resulted in a non-cash pretax loss of $145 million. This loss resulted primarily from a $294 million decrease in the fair value of 16.0 million shares of AOL Time Warner common stock, which was partially offset by a $152 million decrease in the fair value of the derivative component of the PHONES.

NOTE 7: INVENTORIES

Inventories consisted of the following (in thousands):

	June 29, 2003	Dec. 29, 2002
Newsprint (at LIFO)	$33,448	$36,065
Supplies and other	12,015	11,397

Total inventories	$45,463	$47,462

Newsprint inventories are valued under the LIFO method and were less than current cost by approximately $0.6 million at June 29, 2003 and equal to current cost at Dec. 29, 2002.

NOTE 8: LONG-TERM DEBT

Debt consisted of the following (in thousands):

	June 29, 2003		Dec. 29, 2002
Commercial paper, weighted average interest rate of 1.2% in 2003
and 1.5% in 2002	$ 83,462		$ 348,529
Medium-term notes, weighted average
interest rate of 6.2%, due 2003-2008	972,235		972,235
8.4% guaranteed ESOP notes, due 2003	33,772		33,772
Capitalized real estate obligation, effective interest rate of
7.7%, expiring 2009	93,668		99,595
7.45% notes due 2009	395,454		395,092
7.25% debentures due 2013	142,211		141,907
LYONs due 2017	–		289,721
7.5% debentures due 2023	93,961		93,844
6.61% debentures due 2027	242,450		242,297
7.25% debentures due 2096	129,226		129,133
Other notes and obligations	3,255		3,505

Total debt excluding PHONES	2,189,694		2,749,630
Less amounts classified as due within one year	(46,630	)	(46,368	)

Long-term debt excluding PHONES	2,143,064		2,703,262
2% PHONES debt related to AOL Time Warner stock, due 2029	565,440		523,440

Total long-term debt	$ 2,708,504		$ 3,226,702

The discounted debt and derivative components of the PHONES were as follows (in thousands):

	June 29, 2003	Dec. 29, 2002
PHONES Debt:
Discounted debt component (at book value)	$427,360	$422,640
Derivative component (at fair value)	138,080	100,800

Total	$565,440	$523,440


AOL Time Warner stock related to PHONES (at fair value)	$253,120	$199,040

Under the provisions of FAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” the PHONES consist of a discounted debt component, which is presented at book value, and a derivative component, which is

presented at fair value. Changes in the fair value of the derivative component of the PHONES are recorded in the statement of income. The derivative component of the PHONES debt is calculated as the difference between the quoted market value of the PHONES and the estimated fair value of the discounted debt component of the PHONES. The fair value of the discounted debt component of the PHONES is calculated based on an estimate of the current interest rate available to the Company for debt of the same remaining maturity and similar terms to the PHONES. The book value of the discounted debt component is based on the prevailing interest rate (8.125%) at issuance of the PHONES. The market value of the PHONES, which are traded on the New York Stock Exchange, was $680 million and $584 million at June 29, 2003 and Dec. 29, 2002, respectively.

On May 22, 2003 the Company issued a notice to the holders of Tribune’s Liquid Yield Option Notes (“LYONs”) (zero coupon convertible notes) that the Company would redeem this debt issue on June 23, 2003. As a result, all of the LYONs holders converted their notes prior to the redemption date. The LYONs converted into approximately seven million shares of common stock.

Notes issued under the commercial paper program have maturities of less than 90 days. The Company intends to refinance $83 million of commercial paper and $89 million of medium-term notes, scheduled to mature by June 29, 2004, and has the ability to do so on a long-term basis through existing revolving credit agreements. Accordingly, these notes were classified as long-term at June 29, 2003. The Company had revolving credit agreements with a number of financial institutions at June 29, 2003, providing for borrowings in an aggregate amount of up to $1.2 billion, of which $600 million expires in March 2004 and $600 million expires in December 2005. No amounts were borrowed under these credit agreements as of June 29, 2003.

NOTE 9: COMPREHENSIVE INCOME

Other comprehensive income for the quarters and first halves ended June 29, 2003 and June 30, 2002 includes unrealized gains on interest rate swaps and unrealized gains and losses on marketable securities classified as available-for-sale. Other comprehensive income for the quarter and first half ended June 30, 2002 also included an unrealized gain on newsprint swaps.

The Company’s comprehensive income (loss) is as follows (in thousands):

	Second Quarter Ended				First Half Ended
	June 29, 2003		June 30, 2002		June 29, 2003		June 30, 2002

Net income	$ 229,502		$ 114,209		$ 370,654		$ 12,639

Unrealized gain on interest rate and
newsprint swaps, net	4,817		5,314		3,239		3,510

Unrealized holding gain (loss) on marketable
securities classified as available-for-sale:
Unrealized holding gain (loss) arising during
the period, before tax	14,127		(35,602	)	9,433		(75,291	)
Less adjustment for (gain) loss on sales of
investments included in net income	–		(1,560	)	55		(2,986	)
Income taxes	(5,481	)	14,419		(3,681	)	30,603

Change in net unrealized
gain on securities	8,646		(22,743	)	5,807		(47,674	)


Other comprehensive income (loss)	13,463		(17,429	)	9,046		(44,164	)


Comprehensive income (loss)	$ 242,965		$ 96,780		$ 379,700		$(31,525	)

NOTE 10: OTHER DEVELOPMENTS

On June 2, 2003, the FCC adopted new broadcast ownership rules, including a new newspaper/broadcast cross- ownership rule. The new rule eliminates the cross-ownership prohibition entirely in markets with nine or more television stations and permits combinations of one newspaper and one television station in markets with between four and eight television stations. Tribune complies with the new rule in each of the five markets where the Company owns both newspaper and television operations – New York, Los Angeles, Chicago, South Florida and Hartford. The new ownership rules will become effective 30 days after publication in the Federal Register, which is expected to occur in August. Committees in both the United States Senate and House of Representatives have introduced legislation seeking to modify the new broadcast ownership rules. The Company cannot predict with certainty whether the new newspaper/broadcast cross-ownership rule will be affected by this proposed legislation.

During 1998, Times Mirror, which was acquired by the Company in 2000, disposed of its Matthew Bender and Mosby subsidiaries in separate tax-free reorganizations. While the Company strongly believes that these transactions were completed on a tax-free basis, the Internal Revenue Service (“IRS”) has audited the transactions and disagreed with the position taken by Times Mirror. In 2001, the Company received an IRS adjustment to increase Times Mirror’s 1998 taxable income by approximately $1.6 billion. If the IRS prevails, the Company’s federal and state income tax liability would be approximately $600 million, plus interest. As of June 29, 2003, the interest on the proposed taxes would be approximately $243 million. The Company intends to vigorously defend its position and filed a petition in U.S. Tax Court on Nov. 8, 2002 to contest the IRS position. A tax reserve of $180 million, plus $51 million of interest, relating to these transactions is included in “compensation and other obligations” on the unaudited condensed consolidated balance sheets.

The Company expects to complete various state and local income tax audits during the second half of 2003. The resolution of these tax audits could result in tax liabilities that are lower than what has been recorded by the Company.

NOTE 11: SEGMENT INFORMATION

Financial data for each of the Company’s business segments are as follows (in thousands):

	Second Quarter Ended				First Half Ended
	June 29, 2003		June 30, 2002		June 29, 2003		June 30, 2002
Operating revenues:
Publishing	$ 1,013,635		$ 984,821		$ 1,987,218		$ 1,934,925
Broadcasting and Entertainment	435,991		395,732		752,455		679,266

Total operating revenues	$ 1,449,626		$ 1,380,553		$ 2,739,673		$ 2,614,191


Operating profit before restructuring
charges (1):
Publishing	$ 234,652		$ 224,173		$ 432,253		$ 412,072
Broadcasting and Entertainment	149,020		129,547		239,217		202,524
Corporate expenses	(14,153	)	(10,678	)	(25,542	)	(19,820	)

Total operating profit before
restructuring charges	$ 369,519		$ 343,042		$ 645,928		$ 594,776


Operating profit including restructuring
charges:
Publishing	$ 234,652		$ 224,173		$ 432,253		$ 387,149
Broadcasting and Entertainment	149,020		129,547		239,217		201,437
Corporate expenses	(14,153	)	(10,678	)	(25,542	)	(21,063	)

Total operating profit including
restructuring charges	$ 369,519		$ 343,042		$ 645,928		$ 567,523

	June 29, 2003	Dec. 29, 2002
Assets:
Publishing	$ 8,254,670	$ 8,328,030
Broadcasting and Entertainment	4,418,225	4,163,348
Corporate	1,548,702	1,586,950

Total assets	$14,221,597	$14,078,328

(1) Operating profit for each segment excludes interest income and expense, equity earnings and losses, non-operating items and income taxes. Operating profit before restructuring charges is a key metric used by the Company's chief operating decision maker, as defined by FAS No. 131, “Segment Reporting,” to make decisions about resources to be allocated to a segment and assess its performance.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

The following discussion compares the results of operations of Tribune Company and its subsidiaries (the “Company”) for the second quarter and first half of 2003 to the second quarter and first half of 2002. Certain prior year amounts have been reclassified to conform with the 2003 presentation. These reclassifications had no impact on reported 2002 total revenues, operating profit or net income.

FORWARD-LOOKING STATEMENTS

This discussion (including, in particular, the discussion under “Outlook”), the information contained in the preceding notes to the unaudited condensed consolidated financial statements and the information contained in Item 3, “Quantitative and Qualitative Disclosures about Market Risk,” contain certain forward-looking statements that are based largely on the Company’s current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in the forward-looking statements. Such risks, trends and uncertainties, which in some instances are beyond the Company’s control, include: changes in advertising demand, newsprint prices, cost of broadcast rights, interest rates, competition and other economic conditions; regulatory and judicial rulings; adverse results from litigation or tax related proceedings or audits; the effect of labor strikes, lock-outs and negotiations; the effect of acquisitions, investments, divestitures, derivative transactions and litigation on the Company’s results of operations and financial condition; and the Company’s reliance on third-party vendors for various services. The words “believe,” “expect,” “anticipate,” “estimate,” “could,” “should,” “intend” and similar expressions generally identify forward-looking statements. Readers are cautioned not to place undue reliance on such forward-looking statements, which are being made as of the date of this filing. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

SIGNIFICANT EVENTS

ACQUISITIONS

On March 21, 2003, the Company acquired the stock of KPLR-TV, St. Louis, and the assets of KWBP-TV, Portland, Oregon, from ACME Communications for a total of $275 million. The Company acquired the stock of KPLR-TV for $200 million in cash. The acquisition of the assets of KWBP-TV was structured as a like-kind asset exchange for income tax purposes. It was funded with the remaining assets of the Denver radio station group (KKHK-FM, now known as KQMT-FM), with an estimated fair market value of $55 million, plus $20 million in cash. The results of operations of KWBP-TV and KPLR-TV are included in the unaudited condensed consolidated statements of income since their date of acquisition.

RESTRUCTURING CHARGES

During the first quarter of 2002, the Company recorded pretax restructuring charges of $27 million ($17 million after-tax). For further discussion of the restructuring charges, see Note 2 to the unaudited condensed consolidated financial statements in
Item 1.

NON-OPERATING ITEMS

The second quarter and first half of 2003 included several non-operating items, summarized as follows (in millions):

	Second Quarter Ended June 29, 2003				First Half Ended June 29, 2003
	Pretax Gain (Loss)		After-tax Gain (Loss)		Pretax Gain (Loss)		After-tax Gain (Loss)
Gain on change in fair values
of derivatives and related investments	$ 54.3		$ 33.2		$ 17.0		$ 10.4
Gain on sales of subsidiaries and
investments, net	2.3		1.4		52.6		32.2
Loss on investment write-downs	(4.6	)	(2.8	)	(4.8	)	(2.9	)

Total non-operating items	$ 52.0		$ 31.8		$ 64.8		$ 39.7

The second quarter and first half of 2002 also included several non-operating items, summarized as follows (in millions):

	Second Quarter Ended June 30, 2002				First Half Ended June 30, 2002
	Pretax Gain (Loss)		After-tax Gain (Loss)		Pretax Gain (Loss)		After-tax Gain (Loss)
Loss on change in fair values
of derivatives and related investments	$ (99.0	)	$ (60.5	)	$ (144.5	)	$ (88.4	)
Gain on sales of investments	4.8		2.9		6.2		3.8
Loss on investment write-downs	(6.0	)	(3.7	)	(7.5	)	(4.6	)

Total non-operating items	$ (100.2	)	$ (61.3	)	$ (145.8	)	$ (89.2	)

In the second quarter of 2002, changes in the fair values of the Company’s derivatives, net of changes in the fair values of the related investments, resulted in a non-cash pretax loss of $99 million. This loss resulted primarily from a $143 million decrease in the fair value of 16.0 million shares of AOL Time Warner common stock, which was partially offset by a $46 million decrease in the fair value of the derivative component of the PHONES. In the first half of 2002, changes in the fair values of the Company’s derivatives, net of changes in the fair values of the related investments, resulted in a non-cash pretax loss of $145 million. This loss resulted primarily from a $294 million decrease in the fair value of 16.0 million shares of AOL Time Warner common stock, which was partially offset by a $152 million decrease in the fair value of the derivative component of the PHONES.

OTHER DEVELOPMENTS

On June 2, 2003, the Federal Communications Commission (“FCC”) adopted new broadcast ownership rules, including a new newspaper/broadcast cross-ownership rule. The new rule eliminates the cross-ownership prohibition entirely in markets with nine or more television stations and permits combinations of one newspaper and one television station in markets with between four and eight television stations. Tribune complies with the new rule in each of the five markets where the Company owns both newspaper and television operations – New York, Los Angeles, Chicago, South Florida and Hartford. The new ownership rules will become effective 30 days after publication in the Federal Register, which is expected to occur in August. Committees in both the United States Senate and House of Representatives have introduced legislation seeking to modify the new broadcast ownership rules. The Company cannot predict with certainty whether the new newspaper/broadcast cross-ownership rule will be affected by this proposed legislation.

RESULTS OF OPERATIONS

The Company’s results of operations, when examined on a quarterly basis, reflect the seasonality of the Company’s revenues. Second and fourth quarter advertising revenues are typically higher than first and third quarter revenues. Results for the second quarter usually reflect spring advertising, while the fourth quarter includes advertising related to the holiday season. Results for the 2003 and 2002 second quarters reflect these seasonal patterns.

CONSOLIDATED

The Company’s consolidated operating results for the second quarters and first halves of 2003 and 2002 are shown in the table below.

	Second Quarter				First Half
(In millions, except per share data)	2003	2002		Change	2003		2002		Change
Operating revenues	$ 1,450	$ 1,381		+ 5%	$ 2,740		$ 2,614		+ 5%

Operating profit (1)	$ 370	$ 343		+ 8%	$ 646		$ 568		+ 14%

Net income (loss) on equity investments	$ 2	$ (4	)	*	$ (8	)	$ (24	)	- 69%

Non-operating items	$ 52	$ (100	)	*	$ 65		$ (146	)	*

Net income:
Before cumulative effect of
accounting change	$ 230	$ 114		+101%	$ 371		$ 178		+108%
Cumulative effect of accounting
change, net	–	–		–	–		(166	)	-100%

Net income	$ 230	$ 114		+101%	$ 371		$ 12		*


Diluted earnings per share:
Before cumulative effect of accounting change	$ .67	$ .33		+103%	$ 1.08		$ .52		+108%
Cumulative effect of accounting change, net	–	–		–	–		(.50	)	-100%

Net income	$ .67	$ .33		+103%	$ 1.08		$ .02		*

(1) Operating profit excludes interest income and expense, equity earnings and losses, non-operating items and income taxes.

* Not meaningful

Earnings Per Share (“EPS”) – Diluted EPS for the 2003 second quarter was $.67 compared with $.33 in 2002. The 2003 second quarter results included a net non-operating gain of $.10 per diluted share, while the 2002 second quarter included a net non-operating loss of $.19 per diluted share. Diluted EPS for the first half of 2003 was $1.08 compared with $.02 in 2002. The 2003 first half results included a net non-operating gain of $.12 per diluted share. The 2002 first half results included a net non-operating loss of $.27 per diluted share, a restructuring charge of $.05 per diluted share and a one-time $.50 loss per diluted share for the cumulative effect of a change in accounting principle related to the initial application of the impairment provisions of Financial Accounting Standard (“FAS”) No. 142, “Goodwill and

Other Intangible Assets.” In the second quarter and first half of 2003, increases in operating profit at publishing and broadcasting were partially offset by higher corporate expenses.

Operating Revenues and Profit – The Company’s consolidated operating revenues, depreciation and amortization expense, and operating profit by business segment for the second quarter and first half were as follows:

	Second Quarter					First Half
(In millions)	2003		2002		Change	2003		2002		Change
Operating revenues
Publishing	$ 1,014		$ 985		+ 3%	$ 1,987		$ 1,935		+ 3%
Broadcasting and Entertainment	436		396		+ 10%	753		679		+ 11%

Total operating revenues	$ 1,450		$ 1,381		+ 5%	$ 2,740		$ 2,614		+ 5%


Depreciation and amortization expense
Publishing	$ 44		$ 43		+ 2%	$ 89		$ 86		+ 4%
Broadcasting and Entertainment	13		11		+ 15%	25		23		+ 6%
Corporate expenses	1		1		- 17%	1		1		- 11%

Total depreciation and amortization expense	$ 58		$ 55		+ 5%	$ 115		$ 110		+ 4%


Operating profit before restructuring charges (1)
Publishing	$ 235		$ 224		+ 5%	$ 432		$ 412		+ 5%
Broadcasting and Entertainment	149		130		+ 15%	239		202		+ 18%
Corporate expenses	(14	)	(11	)	+ 33%	(25	)	(19	)	+ 29%

Total before restructuring charges	370		343		+ 8%	646		595		+ 9%
Restructuring charges	–		–		–	–		(27	)	-100%

Total operating profit	$ 370		$ 343		+ 8%	$ 646		$ 568		+ 14%

Consolidated operating revenues for the 2003 second quarter rose 5% to $1.5 billion from $1.4 billion in 2002 and for the first half increased 5% to $2.7 billion from $2.6 billion in 2002. These increases were primarily due to improvements in publishing advertising revenues and a rise in broadcasting and entertainment television group revenues. Excluding all acquisitions that affect comparability in the period presented (“on a comparable basis”), revenues were up 4% in both the second quarter and the first half of 2003.

Consolidated operating profit grew 8%, or $27 million, in the second quarter of 2003 and 14%, or $78 million, in the first half. The 2002 first half included $27 million of restructuring charges incurred in the first quarter of 2002. Publishing operating profit, before restructuring charges, increased 5%, or $11 million, in the second quarter of 2003 and 5%, or $20 million, in the first half, mainly due to increases in advertising revenues at Chicago, Fort Lauderdale, New York, Orlando and Los Angeles, partially offset by an increase in operating expenses. Broadcasting and entertainment operating profit, before restructuring charges, was up 15%, or $19 million, in the second quarter of 2003 and 18%, or $37 million, in the first half, primarily due to increased television revenues, partially offset by higher broadcast rights amortization expense and increased compensation expense. On a comparable basis, consolidated operating profit was up 7%, or $22 million, in the second quarter and 13%, or $73 million, in the first half of 2003.

Operating Expenses – Consolidated operating expenses for the second quarter and first half were as follows:

	Second Quarter			First Half
(In millions)	2003	2002	Change	2003	2002	Change
Cost of sales	$ 685	$ 657	+ 4%	$1,309	$1,267	+ 3%
Selling, general & administrative	337	325	+ 4%	670	643	+ 4%
Depreciation	54	53	+ 3%	109	105	+ 3%
Amortization of intangible assets	4	3	+41%	6	5	+ 20%

Operating expenses before restructuring
charges	$1,080	$1,038	+ 4%	$2,094	$2,020	+ 4%
Restructuring charges	–	–	–	–	27	-100%

Total operating expenses	$1,080	$1,038	+ 4%	$2,094	$2,047	+ 2%

Cost of sales increased 4%, or $28 million, in the 2003 second quarter and 3%, or $42 million, in the first half. On a comparable basis, cost of sales was up 3%, or $19 million, in the 2003 second quarter and 2%, or $30 million, in the first half, primarily due to higher compensation expense, broadcast rights amortization expense, newspaper distribution expense and newsprint expense. Compensation expense rose 2%, or $6 million, in the second quarter of 2003 and 2%, or $11 million, in the first half, due to salary increases, higher medical expenses and a decline in the pension credit. On a comparable basis, compensation expense increased 2%, or $5 million, in the second quarter of 2003 and 2%, or $10 million, in the first half. Broadcast rights amortization expense increased 12%, or $11 million, in the second quarter of 2003 and 10%, or $18 million, in the first half, due to acquisitions, the fall 2002 launch of “Will & Grace” and the addition of Clipper basketball games in Los Angeles. On a comparable basis, broadcast rights amortization rose 6%, or $5 million, in the 2003 second quarter and 6%, or $10 million, in the first half. Newspaper distribution expenses were up 5%, or $4 million, in the second quarter of 2003 and 5%, or $9 million, in the first half. Newsprint and ink expense rose 6%, or $7 million, in the second quarter of 2003 and 1%, or $1 million in the first half, as average newsprint costs were up 5% in the second quarter and were flat in the first half of 2003, while consumption increased less than 1% in both the second quarter and the first half of 2003.

Selling, general and administrative expenses (“SG&A”) were up 4%, or $12 million, in the 2003 second quarter and 4%, or $27 million, in the first half. On a comparable basis, SG&A expense increased 2%, or $7 million, in the 2003 second quarter and 3%, or $20 million, in the first half, primarily due to increases in compensation and promotion expenses. Compensation expense increased 3%, or $5 million, in the 2003 second quarter and 4%, or $15 million, in the first half, due to acquisitions, salary increases, higher medical expenses and a decline in the pension credit. On a comparable basis, compensation expense rose 2%, or $3 million, in the second quarter and 3%, or 11 million, in the first half of 2003. Promotion expenses rose 15%, or $5 million, in the second quarter of 2003 and 17%, or $9 million, in the first half, primarily due to increased promotional efforts to increase circulation.

The increase in depreciation expense reflects the acquisitions and capital expenditures made in 2003 and 2002.

The Company recorded pretax restructuring charges of $27 million in the first quarter of 2002 (see discussion in Note 2 to the unaudited condensed consolidated financial statements in Item 1).

PUBLISHING

Operating Revenues and Profit – The following table presents publishing operating revenues, operating expenses before restructuring charges and operating profit for the second quarter and first half.

	Second Quarter			First Half
(In millions)	2003	2002	Change	2003	2002		Change
Operating revenues	$1,014	$985	+ 3%	$1,987	$ 1,935		+ 3%
Operating expenses before restructuring
charges	779	761	+ 2%	1,555	1,523		+ 2%

Operating profit before restructuring
charges (1)	235	224	+ 5%	432	412		+ 5%
Restructuring charges	–	–	–	–	(25	)	-100%

Operating profit	$ 235	$224	+ 5%	$ 432	$ 387		+ 12%

(1) Operating profit excludes interest income and expense, equity earnings and losses, non-operating items and income taxes. Operating profit before restructuring charges is a key metric used by the Company's chief operating decision maker, as defined by FAS No. 131, “Segment Reporting,” to make decisions about resources to be allocated to a segment and assess its performance.

Publishing operating revenues rose 3% to $1 billion for the second quarter and 3% to $2 billion for the first half of 2003, primarily due to increases in advertising revenue in Chicago, Fort Lauderdale, New York and Los Angeles.

Operating profit, before restructuring charges, for the 2003 second quarter grew 5% to $235 million and for the first half increased 5% to $432 million, mainly as a result of increased advertising revenues, partially offset by higher compensation, circulation and newsprint and ink expenses.

Publishing operating revenues, by classification, for the second quarter and first half were as follows:

	Second Quarter			First Half
(In millions)	2003	2002	Change	2003	2002	Change
Advertising
Retail	$ 324	$312	+ 4%	$ 614	$ 595	+ 3%
National	190	173	+10%	381	353	+ 8%
Classified	244	253	- 4%	483	494	- 2%
Interactive	23	20	+15%	43	38	+15%

Total advertising	781	758	+ 3%	1,521	1,480	+ 3%
Circulation	166	167	- 1%	335	336	–
Other	67	60	+12%	131	119	+10%

Total revenues	$1,014	$985	+ 3%	$1,987	$1,935	+ 3%

Total advertising revenues rose 3% in both the second quarter and the first half of 2003. Retail advertising was up 4%, or $12 million, in the second quarter and 3%, or $19 million, in the first half of 2003, due to increases in food, furniture/home furnishing, department stores, hardware and health care, partially offset by a decline in electronics. Preprint revenues, which were the primary contributor to the retail advertising growth, increased 11% for both the second quarter and first half of 2003. Chicago led preprint revenue growth with an increase of 13%, or $5 million, in the second quarter and 13%, or $9 million, in the first half due to a new preprint facility for Sunday inserting that is now operational. Preprint revenue in Los Angeles and New York was up 12%, or $3 million, and 5%, or $1 million, respectively, for the second quarter and rose 14%, or $7 million, and 8%, or $4 million, respectively, in the first half of 2003. National advertising revenue for the second quarter increased 10%, or $17 million, and 8%, or $28 million, for the first half of 2003, primarily due to increases in the hi-tech, auto manufacturers, and financial categories, partially offset by a decrease in travel/resorts. Classified advertising revenues declined 4%, or $9 million, in the second quarter and 2%, or $11 million, for the first half of 2003. The second quarter decrease is primarily due to a 17% decline in help wanted, partially offset by a 9% increase in real estate and a 1% increase in

auto. The first half decrease is due to a 15% decrease in help wanted, partially offset by a 11% increase in real estate and a 1% increase in auto. Interactive revenues increased 15%, or $3 million, in the second quarter and 15%, or $5 million, in the first half of 2003 due to strength in classified and national advertising.

Advertising volume for the second quarter and first half was as follows:

	Second Quarter			First Half
(Inches in thousands)	2003	2002	Change	2003	2002	Change
Full run
Retail	1,528	1,539	- 1%	2,877	2,978	- 3%
National	975	875	+11%	1,894	1,745	+ 9%
Classified	2,637	2,600	+ 1%	5,118	5,047	+ 1%

Total full run	5,140	5,014	+ 3%	9,889	9,770	+ 1%
Part run	5,077	4,899	+ 4%	9,700	9,339	+ 4%

Total inches	10,217	9,913	+ 3%	19,589	19,109	+ 3%

Preprint pieces (in millions)	3,257	3,048	+ 7%	6,264	5,863	+ 7%

Full run advertising linage increased 3% in the second quarter and 1% in the first half of 2003, primarily due to an 11% and 9% increase in national advertising in the second quarter and first half, respectively. Full run national advertising linage was up in both periods due to increases in Los Angeles, Newport News, Chicago and Baltimore. Full run retail advertising linage decreased 1% in the second quarter and 3% in the first half, primarily due to declines in Baltimore, New York, Los Angeles and Fort Lauderdale, partially offset by an increase in Chicago. Full run classified advertising linage rose 1% in both the second quarter and first half of 2003 due to increases in Fort Lauderdale, Orlando and Newport News, partially offset by decreases in Baltimore, New York and Hartford. Part run advertising linage increased 4% in both the second quarter and first half of 2003 due to increases in Fort Lauderdale, Chicago and Los Angeles, partially offset by a decrease in Orlando. Preprint advertising pieces rose 7% in both the second quarter and first half of 2003 due to increases in Los Angeles, Chicago and New York.

Circulation revenues were down 1% in the second quarter and were flat in the first half of 2003, as declines in New York, Fort Lauderdale and Baltimore were partially offset by increases in Allentown, Los Angeles and Newport News. Total average daily circulation was down 2% to 3,372,000 copies in the second quarter and down 1% to 3,406,000 copies in the first half. Total average Sunday circulation decreased 2% to 4,805,000 copies in the second quarter and decreased 1% to 4,864,000 in the first half.

Other revenues are derived from advertising placement services; the syndication of columns, features, information and comics to newspapers; commercial printing operations; delivery of other publications; direct mail operations; cable television news programming; distribution of entertainment listings; and other publishing-related activities. Other revenues increased 12%, or $7 million, in the 2003 second quarter and 10%, or $12 million, for the first half, primarily due to increases in Los Angeles, New York and Chicago.

Operating Expenses – Publishing operating expenses, before restructuring charges, increased 2%, or $18 million, in the second quarter and 2%, or $32 million, for the first half of 2003, primarily due to increases in compensation, circulation and newsprint and ink expenses. Compensation expense rose 1%, or $4 million, for the second quarter and 2%, or $11 million, in the first half, primarily due to salary increases, a lower pension credit and higher medical expenses. Circulation expense was up 7%, or $9 million, in the second quarter and 8%, or $18 million, in the first half of 2003, due to higher distribution and promotion expenses. Newsprint and ink expense was up 6%, or $7 million, in the second quarter and 1%, or $1 million, for the first half of 2003, as average newsprint costs increased 5% in the second quarter and were flat for the first half, while consumption increased slightly for the second quarter and first half. Publishing recorded pretax restructuring charges of $25 million in the first quarter of 2002 (see discussion in Note 2 to the unaudited condensed consolidated financial statements in Item 1).

BROADCASTING AND ENTERTAINMENT

Operating Revenues and Profit – The following table presents broadcasting and entertainment operating revenues, operating expenses before restructuring charges and operating profit for the second quarter and first half. Entertainment includes Tribune Entertainment and the Chicago Cubs.

	Second Quarter			First Half
(In millions)	2003	2002	Change	2003	2002		Change
Operating revenues
Television	$354	$316	+ 12%	$643	$ 572		+ 12%
Radio/Entertainment	82	80	+ 3%	110	107		+ 2%

Total operating revenues	$436	$396	+ 10%	$753	$ 679		+ 11%


Operating expenses before restructuring charges
Television	$210	$191	+ 10%	$405	$ 372		+ 9%
Radio/Entertainment	77	75	+ 3%	109	105		+ 4%

Total operating expenses before
restructuring charges	$287	$266	+ 8%	$514	$477		+ 8%


Operating profit before restructuring charges (1)
Television	$144	$125	+ 15%	$238	$ 200		+ 19%
Radio/Entertainment	5	5	+ 8%	1	2		- 61%

Operating profit before restructuring charges	149	130	+ 15%	239	202		+ 18%
Restructuring charges	–	–	–	–	(1	)	-100%

Total operating profit	$149	$130	+ 15%	$239	$ 201		+ 19%

Broadcasting and entertainment operating revenues increased 10% to $436 million in the 2003 second quarter and 11% to $753 million in the first half, mainly due to higher television revenues. Excluding the acquisitions of WTTV-Indianapolis (July 2002), KPLR-St. Louis (March 2003) and KWBP-Portland (March 2003) (“on a comparable basis”), broadcasting and entertainment operating revenues increased 6%, or $24 million, in the second quarter and 8%, or $52 million in the first half of 2003. Television revenues were up 12%, or $38 million, in the second quarter and 12%, or $71 million, for the first half due to higher advertising revenues. Television advertising revenues were up 11%, or $38 million, in the second quarter and 12%, or $74 million, for the first half of 2003. On a comparable basis, television advertising revenues were up 6%, or $21 million, in the second quarter and 9%, or $52 million, for the first half. Radio/Entertainment revenues were up 3% in the second quarter and 2% in the first half of 2003, as continued success with new programs at Tribune Entertainment coupled with increased revenue at the Chicago Cubs was offset by a reduction in revenues due to the sale of the Denver radio stations.

Operating profit, before restructuring charges, for broadcasting and entertainment was up 15% to $149 million in the 2003 second quarter and 18% to $239 million for the first half. On a comparable basis, operating profit was up 12%, or $16 million, in the second quarter of 2003 and 16%, or $32 million, in the first half. The second quarter and first half increase was primarily due to higher revenues, partially offset by higher broadcast rights amortization and compensation expenses. Television operating profit, before restructuring charges, increased 15% to $144 million in the 2003 second quarter and 19% to $238 million for the first half of 2003. On a comparable basis, television operating profit rose 12% to $140 million in the second quarter of 2003 and 17% to $233 million in the first half.

Operating Expenses – Broadcasting and entertainment operating expenses, before restructuring charges, increased 8%, or $21 million, in the second quarter of 2003 and 8%, or $37 million, for the first half due to higher broadcast rights amortization expense and an increase in compensation expense. On a comparable basis, operating expenses

were up 3%, or $9 million, in the second quarter of 2003 and 4%, or $21 million, in the first half. Broadcast rights amortization expense increased 12%, or $11 million, in the second quarter of 2003 and 10%, or $18 million, for the first half, mainly related to acquisitions, the fall 2002 launch of “Will and Grace” and the addition of Clipper basketball games in Los Angeles. On a comparable basis, broadcast rights amortization rose 6%, or $5 million, in the second quarter of 2003 and 6%, or $10 million, in the first half. Compensation expense increased 5%, or $5 million, in the 2003 second quarter and 6%, or $11 million, in the first half due to higher commissions and salary increases. On a comparable basis, compensation expense increased 2%, or $2 million, in the 2003 second quarter and 4%, or $7 million, for the first half. Broadcasting and entertainment recorded pretax restructuring charges of $1 million in the first quarter of 2002 (see discussion in Note 2 to the unaudited condensed consolidated financial statements in Item 1).

CORPORATE EXPENSES

Corporate expenses for the 2003 second quarter increased 33% to $14 million from $11 million in the second quarter of 2002. Corporate expenses, before restructuring charges, for the 2003 first half increased 29% to $25 million from $19 million in the first half of 2002. These increases were mainly due to a lower pension credit and higher insurance expense. Corporate recorded restructuring charges of $1 million in the first quarter of 2002 (see discussion in Note 2 to the unaudited condensed consolidated financial statements in Item 1).

EQUITY RESULTS

Equity income totaled $2 million in the 2003 second quarter, compared with a loss of $4 million in 2002. Equity losses for the 2003 first half were $8 million, down $17 million from 2002 results. The equity income in the quarter and the lower losses in the first half reflect the recognition of equity income from TV Food Network in 2003. In addition, the first half 2002 loss included the Company’s $7.5 million share of a restructuring charge for CareerBuilder, primarily due to staff reductions and asset write-downs.

INTEREST AND INCOME TAXES

Interest expense for the 2003 second quarter decreased 6% to $51 million and for the first half declined 7% to $102 million, due to lower outstanding debt and lower interest rates. Interest income for the 2003 second quarter decreased 10% to $1.9 million and for the first half declined 5% to $4 million.

The effective tax rate in the 2003 second quarter and first half was 38.7% and 38.8%, respectively, compared with a rate of 39.1% in both the second quarter and first half of 2002.

LIQUIDITY AND CAPITAL RESOURCES

Cash flow generated from operations is the Company’s primary source of liquidity. Net cash provided by operations in the first half was $551 million in 2003, up from $435 million in 2002. The increase was mainly due to higher net income and changes in working capital requirements. The Company normally expects to fund dividends, capital expenditures and other operating requirements with net cash provided by operations. Funding required for share repurchases and acquisitions is financed by available cash flow from operations and, if necessary, by the issuance of debt and stock.

Net cash used for investments totaled $227 million in the first half of 2003. The Company spent $62 million for capital expenditures and $233 million for acquisitions and investments. The Company received $67 million from the sale of investments.

Net cash used for financing activities in the 2003 first half was $301 million due to repayments of long-term debt, payments of dividends and purchases of treasury stock, partially offset by sales of stock to employees. The Company repaid $275 million of long-term debt during the first half of 2003. In June 2003, the Company’s LYONs converted into approximately seven million shares of common stock, which the Company plans to repurchase in the open market. In the second quarter of 2003, the Company repurchased approximately one million of these shares for $50 million. At June 29, 2003, the Company had authorization to repurchase an additional $1.6 billion of its common stock. Quarterly dividends on the Company’s common stock remained flat at $.11 per share in 2003.

The Company has revolving credit agreements with a number of financial institutions providing for borrowings in an aggregate amount of up to $1.2 billion. As of June 29, 2003, no amounts were borrowed under the credit agreements.

The Company regularly issues commercial paper for cash requirements and maintains revolving credit agreements equal to or in excess of any commercial paper outstanding. The Company’s commercial paper is rated “P-2", “A-1” and “F-2” by Moody’s Investors Services (“Moody’s”), Standard & Poor’s and Fitch, Inc., (“Fitch”), respectively. The Company’s senior unsecured long-term debt was rated “A2" by Moody’s, “A” by Standard & Poor’s and “A-” by Fitch.

OUTLOOK

The Company anticipates that its full year 2003 diluted earnings per share will be within the range of current Wall Street analyst estimates of $2.07 to $2.20. This assumes the economy improves, consolidated operating expenses increase in the low single digits in the second half of 2003 (somewhat lower than the first half of 2003), and non-operating items for the year are not material. Consolidated operating expenses are projected to increase in the mid single digit range in the third quarter of 2003 and be relatively flat in the fourth quarter of 2003.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The following represents an update of the Company’s market-sensitive financial information. This information contains forward-looking statements and should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended Dec. 29, 2002.

EQUITY PRICE RISKS

Available-for-sale securities. The Company has common stock investments in several publicly traded companies that are subject to market price volatility. Except for 16.0 million shares of AOL Time Warner common stock (see discussion below), these investments are classified as available-for-sale securities and are recorded on the balance sheet at fair value with unrealized gains or losses, net of related tax effects, reported in the accumulated other comprehensive income component of shareholders’ equity.

The following analysis presents the hypothetical change in the fair value of the Company’s common stock investments in publicly traded companies that are classified as available-for-sale, assuming hypothetical stock price fluctuations of plus or minus 10%, 20% and 30% in each stock’s price.

	Valuation of Investments Assuming Indicated Decrease in Each Stock's Price			June 29, 2003		Valuation of Investments Assuming Indicated Increase in Each Stock's Price
(In millions)	-30%	-20%	-10%	Fair Value		+10%	+20%	+30%
Common stock
investments in
public companies	$42	$48	$53		$59 (1)	$65	$71	$77

(1)	Includes approximately 3.4 million shares of AOL Time Warner common stock valued at $54 million. Excludes 16.0 million shares of AOL Time Warner common stock. See discussion below.

During the last 12 quarters, market price movements caused the fair value of the Company’s common stock investments in publicly traded companies to change by 10% or more in eight of the quarters, by 20% or more in six of the quarters and by 30% or more in four of the quarters.

Derivatives and related trading securities. The Company has issued 8.0 million PHONES indexed to the value of its investment in 16.0 million shares of AOL Time Warner common stock (see Note 10 to the Company’s consolidated financial statements in the 2002 Annual Report on Form 10-K). This investment in AOL Time Warner is classified as a trading security, and changes in its fair value, as well as changes in the fair value of the related derivative component of the PHONES, are recorded in the statement of income.

At maturity, the PHONES will be redeemed at the greater of the then market value of two shares of AOL Time Warner common stock or $157 per PHONES. At June 29, 2003, the PHONES carrying value was approximately $565 million. Since the issuance of the PHONES in April 1999, quarterly changes in the fair value of the PHONES have partially offset changes in the fair value of the related AOL Time Warner shares. There have been and may continue to be periods with significant non-cash increases or decreases to the Company’s net income pertaining to the PHONES and the related AOL Time Warner shares.

The following analysis presents the hypothetical change in the fair value of the Company’s 16.0 million shares of AOL Time Warner common stock related to the PHONES, assuming hypothetical stock price fluctuations of plus or minus 10%, 20% and 30% in the stock’s price.

	Valuation of Investments Assuming Indicated Decrease in Each Stock's Price			June 29, 2003		Valuation of Investments Assuming Indicated Increase in Each Stock's Price
(In millions)	-30%	-20%	-10%	Fair Value		+10%	+20%	+30%

AOL Time Warner common stock	$177	$202	$228		$253	$278	$304	$329

During the last 12 quarters, market price movements have caused the fair value of the Company’s 16.0 million shares in AOL Time Warner common stock to change by 10% or more in eight of the quarters, by 20% or more in six of the quarters and by 30% or more in five of the quarters.

ITEM 4. CONTROLS AND PROCEDURES.

As of June 29, 2003, the Company’s management, including the President and Chief Executive Officer and Senior Vice President/Finance and Administration (Chief Financial Officer), carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e). Based upon that evaluation, the Company’s President and Chief Executive Officer and Senior Vice President/Finance and Administration (Chief Financial Officer) concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information required to be included in the Company’s periodic SEC filings. There has been no change in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended June 29, 2003 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The information contained in Note 10 to the unaudited condensed consolidated financial statements in Part I, Item 1 hereof is incorporated herein by reference.

ITEM 5. OTHER INFORMATION.

The computation of the ratios of earnings to fixed charges, filed herewith as Exhibit 12, is incorporated herein by reference.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a)

Exhibits.

3.2 - By-Laws of Tribune Company, as amended, effective July 22, 2003.

12 - Computation of ratios of earnings to fixed charges.

31.1 - Certification of Dennis J. FitzSimons, President and Chief Executive Officer of the Company, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 - Certification of Donald C. Grenesko, Senior Vice President/Finance and Administration (Chief Financial Officer) of the Company, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 - Certification of Dennis J. FitzSimons, President and Chief Executive Officer of the Company, pursuant to 18 United States Code Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 - Certification of Donald C. Grenesko, Senior Vice President/Finance and Administration (Chief Financial Officer) of the Company, pursuant to 18 United States Code Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)

Reports on Form 8-K.

On April 16, 2003, the Company furnished a report on Form 8-K that included a press release announcing the Company's first quarter 2003 earnings.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

TRIBUNE COMPANY
(Registrant)

Date: August 4, 2003

      /s/  R. Mark Mallory
      R. Mark Mallory
      Vice President and Controller
      (on behalf of the Registrant
      and as Chief Accounting Officer)

29 EX-12 4 form10q2qex12.htm EXHIBIT 12 Earnings to Fixed Charges

EXHIBIT 12

TRIBUNE COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(In thousands, except ratios)

	First Half Ended	Fiscal Year Ended December
	6/29/2003	2002	2001	2000	1999	1998
Income from continuing operations, before
cumulative effect of accounting change	$ 370,654	$ 608,579	$111,136	$310,401	$1,449,962	$389,197
Add:
Income tax expense	234,989	331,376	157,815	270,351	933,981	272,660
Losses on equity investments	7,506	40,875	60,813	79,374	40,083	33,980
Distributed income from equity investees	6,430	12,567	21,784	9,693	–	–
Minority interest expense, net of tax	–	–	–	16,335	–	–

Subtotal	619,579	993,397	351,548	686,154	2,424,026	695,837

Fixed charge adjustments
Add:
Interest expense	101,598	213,309	254,521	240,708	113,031	88,451
Amortization of capitalized interest	1,612	3,269	2,989	4,012	2,065	2,068
Interest component of rental expense (1)	11,456	22,503	22,853	18,620	9,312	8,871

Earnings, as adjusted	$ 734,245	$1,232,478	$631,911	$949,494	$2,548,434	$795,227

Fixed charges:
Interest expense	$ 101,598	$ 213,309	$254,521	$240,708	$ 113,031	$ 88,451
Interest capitalized	238	2,383	3,184	1,950	1,117	1,897
Interest component of rental expense (1)	11,456	22,503	22,853	18,620	9,312	8,871
Interest related to guaranteed ESOP debt (2)	1,418	5,565	8,191	10,718	13,146	15,578

Total fixed charges	$ 114,710	$ 243,760	$288,749	$271,996	$ 136,606	$114,797

Ratio of earnings to fixed charges	6.4	5.1	2.2	3.5	18.7	6.9

(1) Represents a reasonable approximation of the interest cost component of rental expense incurred by the Company.

(2) Tribune Company guarantees the debt of its Employee Stock Ownership Plan ("ESOP").

EX-3.(II) 5 bylaws.htm EXHIBIT 3.2 BY-LAWS

EXHIBIT 3.2

BY-LAWS
OF
Tribune Company
A Delaware Corporation
As Amended and In Effect on July 22, 2003
ARTICLE I
Registered Office and Agent

Section 1.1 Registered Office and Agent. The registered office of the Company in the State of Delaware shall be the office of The Corporation Trust Company in the City of Wilmington, County of New Castle, and the registered agent in charge thereof shall be The Corporation Trust Company.

ARTICLE II
Meetings of Stockholders

Section 2.1 Place of Meeting. Meetings of stockholders shall be held at such locations as are designated by the Board of Directors or the officers calling such meetings.

Section 2.2 Annual Meeting. The annual meeting of the stockholders shall be held on such date (not a legal holiday) and at such time as is designated by resolution of the Board of Directors, for the purpose of electing directors and for the transaction of such other business as may properly be brought before the meeting.

Section 2.3 Special Meetings. Special meetings of the stockholders may be called by the Chief Executive Officer of the Company or the Board of Directors. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice of the meeting.

Section 2.4 Notice of Meetings. Unless otherwise required by statute, written notice stating the place, date and hour of each meeting of stockholders and the purpose or purposes of each such meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting. In the case of a meeting to vote on a merger or consolidation such notice shall be given not less than twenty nor more than sixty days before the date of the meeting. If given by mail, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the Company.

Section 2.5 Notice of Stockholder Business. At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting business must be (a) specified in the notice of

meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Company. To be timely, a stockholder’s notice must be delivered to the Secretary at the principal executive offices of the Company not later than the close of business on the 90^th day nor earlier than the close of business on the 120^th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120^th day prior to such annual meeting and not later than the close of business on the later of the 90^th day prior to such annual meeting or the 10^th day following the day on which public announcement of the date of such meeting is first made. In no event shall the notice or public disclosure of an adjournment of an annual meeting commence a new time period for the giving of a stockholder’s notice as described above. A stockholder’s notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the Company’s books, of the stockholder proposing such business, (c) the class and number of shares of the Company which are beneficially owned by the stockholder, and (d) any material interest of the stockholder in such business. Notwithstanding anything in these By-Laws to the contrary, no business shall be conducted at an annual meeting of stockholders except in accordance with the procedures set forth in this Section. The chairman of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of this Section, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

At any special meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting by or at the direction of the Chief Executive Officer or the Board of Directors.

Nothing in this By-Law shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Company’s proxy statement pursuant to Rule 14a-8 under the Securities Exchange Act.

Section 2.6 List of Stockholders. The officer or agent having charge of the stock ledger of the Company shall make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

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Section 2.7 Inspectors. In advance of any meeting of stockholders, the Company, by its Board of Directors or by its Chairman or President, shall appoint one or more inspectors of voting who shall receive and count the ballots and make a written report of the results of the balloting, and who shall perform such other duties in connection therewith as is provided by law. The Company may also designate one or more persons as alternate inspectors to replace any inspector who is unable or fails to act.

Section 2.8 Quorum. The holders of record of shares of capital stock of the Company having a majority of the votes entitled to be cast at the meeting, represented in person or by proxy, shall constitute a quorum at all meetings of stockholders. Where a separate vote by class or classes is to be held, the holders of stock having a majority of the votes entitled to be cast by such class or classes, represented in person or by proxy, shall constitute a quorum at the meeting. Regardless of whether a quorum is present or represented, the chairman of the meeting, or stockholders represented in person or by proxy at the meeting voting a majority of the votes cast by such stockholders on the matter, shall have the power to adjourn the meeting to another time and/or place. Unless the adjournment is for more than thirty days, or unless a new record date is set for the adjourned meeting, no notice of the adjourned meeting need be given to any stockholder; provided that the time and place of the adjourned meeting were announced at the meeting at which the adjournment was taken. At the adjourned meeting the Company may transact any business which might have been transacted at the original meeting.

Section 2.9 Voting of Shares; Proxies. The voting rights of holders of common stock and preferred stock of the Company shall be as set forth in the Amended and Restated Certificate of Incorporation, as from time to time in effect, and in resolutions of the Board of Directors providing for series of the preferred stock. A stockholder may vote either in person, by proxy executed in writing by the stockholder or an authorized officer, director, employee or agent of the stockholder, or by electronic transmission as provided by law. No proxy shall be voted or acted upon after three years from the date of its execution, unless the proxy provides for a longer period. Action on any question or in any election may be by a voice vote unless the presiding officer shall order that voting be by ballot. The presiding officer at the meeting shall fix and announce at the meeting the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at the meeting.

Section 2.10 Required Vote. At any duly constituted meeting of stockholders, the affirmative vote of holders of a majority of the voting power of all shares represented at the meeting in person or by proxy and entitled to vote on the matter shall be necessary for the adoption or approval of any matter properly brought before the meeting, unless the proposed action is for the election of directors or is one upon which, by express provision of statute or of the Amended and Restated Certificate of Incorporation, a different affirmative vote is specified or required, in which case such express provision shall govern and control the decision of such question. In elections for directors, the nominees receiving the highest number of votes cast for the number of director positions to be filled shall be elected. Where a separate vote by class or classes is to be held, unless otherwise provided by statute or the Amended and Restated Certificate of Incorporation, the affirmative vote of the holders of a majority of the voting power of all shares of such class or classes represented at the meeting in person or by proxy shall be the act of such class or classes.

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Section 2.11 Action Without a Meeting. Action by the stockholders may be taken without a meeting as provided in the Amended and Restated Certificate of Incorporation.

ARTICLE III
Directors

Section 3.1 Number, Tenure and Qualifications. The business and affairs of the Company shall be managed by a Board of no less than ten (10) nor more than sixteen (16) directors, as fixed from time to time by resolution of the Board of Directors. Individuals shall be eligible to serve as a director of the Company until the annual meeting next occurring after such person’s 72nd birthday. An officer of the Company shall be eligible for service as a director until either (i) such officer’s resignation as an officer of the Company or (ii) the annual meeting next occurring after such officer’s retirement as an officer of the Company. The Board shall be classified with respect to the time during which they hold office into three classes, as nearly equal in number as possible based on the then current membership of the Board, as determined by the Board of Directors, all as provided in the Amended and Restated Certificate of Incorporation. One class of directors shall be elected at each annual meeting of the stockholders to hold office for the term of three years or until their respective successors are duly elected and qualified or until their earlier resignation or removal.

Section 3.2 Nominating Procedures.

Section 3.2.1 Eligibility to Make Nominations. Except as otherwise provided in Article VIII hereof, nominations of candidates for election as directors at any meeting of stockholders called for that purpose may be made by the Board of Directors or by any stockholder entitled to vote at such meeting, in accordance with the following provisions.

Section 3.2.2 Procedure for Nominations by the Board of Directors. Except as otherwise provided in Article VIII hereof, nominations made by the Board of Directors shall be made at a meeting of the Board of Directors, or by written consent of the directors in lieu of a meeting, not less than 30 days prior to the date of the meeting of stockholders at which directors are to be elected. At the request of the Secretary of the Company, each proposed nominee shall provide the Company with such information concerning himself or herself as is necessary for purposes of the Company’s proxy statement relating to the meeting.

Section 3.2.3 Procedure for Nominations by Stockholders. Any stockholder who intends to make a nomination at a meeting of stockholders at which directors are to be elected, shall deliver a notice to the Secretary of the Company setting forth (i) the name, age, business address and residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of each such nominee, (iii) the number of shares of capital stock of the Company which are beneficially owned by each such nominee and (iv) such other information concerning each such nominee as would be required, under the rules of the Securities and Exchange Commission, in a proxy statement soliciting proxies for the election of such nominees. Such notice shall be accompanied by a signed consent of each proposed

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nominee to serve as a director of the Company if elected. To be timely, a stockholder’s notice must be delivered to the Secretary at the principal executive offices of the Company not earlier than the close of business on the 120^th day prior to such meeting and not later than the close of business on the later of the 90^th day prior to such meeting or the 10^th day following the day on which such notice of the date of the meeting is mailed to the stockholders or public announcement thereof is made, whichever occurs first. In no event shall the notice or public disclosure of an adjournment of a meeting of stockholders at which directors are to be elected commence a new time period for the giving of a stockholder’s notice as described above.

Section 3.2.4 Substitution of Nominees. Except as otherwise provided in Article VIII hereof, in the event that a person is validly designated as a nominee in accordance with the preceding Sections and shall thereafter become unable or unwilling to stand for election to the Board of Directors, the Board of Directors or the stockholder who proposed such nominee, as the case may be, may designate a substitute nominee. At the request of the Secretary of the Company, each substitute nominee shall provide the Company with such information concerning himself or herself as would be necessary for purposes of a proxy statement relating to the meeting.

Section 3.2.5 Determination of Compliance with Procedures. Except as otherwise provided in Article VIII hereof, if the chairman of the meeting of stockholders determines that a nomination for director was not made in accordance with the foregoing procedures, such nomination shall be void.

Section 3.3 Regular Meetings. A regular meeting of the Board of Directors shall be held without other notice than this By-Law immediately after, and at the same address as, the annual meeting of stockholders. The Board of Directors may fix the time and place for the holding of additional regular meetings. No notice or call shall be required.

Section 3.4 Special Meetings. Special meetings of the Board of Directors may be called by the Chairman, the President or any two directors, by notice to the Secretary of the Company. The person or persons authorized to call special meetings of the Board of Directors may fix any place as the place for holding any special meeting of the Board of Directors called by them, provided that any meeting called at the request of directors shall be held at Tribune Tower, Chicago, Illinois. Notice of any special meeting shall be given to all directors at least twenty-four hours in advance thereof (except as set forth below), either (a) personally or by telephone or (b) by mail or telegram addressed to the director at his/her address as it appears on the records of the Company. Such notice shall include the time and place at which the meeting is to be held. If mailed, such notice must be given at least five days prior to the meeting and shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid. If notice is to be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice of such meeting.

Section 3.5 Quorum and Action. A majority of the total number of directors then in office shall constitute a quorum for the transaction of business at any meeting, but if less than a quorum is present a majority of the directors present may adjourn the meeting from time to time without further notice. The vote of the majority of the directors present at a meeting at

- 5 -

which a quorum is present shall be the act of the Board of Directors, unless the act of a greater number is required by statute, the Amended and Restated Certificate of Incorporation or these By-Laws.

Section 3.6 Vacancies. Except as otherwise provided in Article VIII hereof, any vacancy occurring in the Board of Directors and any newly created directorship resulting from an increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, and the directors so chosen shall hold office for the unexpired portion of their designated terms of office and until their successors are duly elected and qualified, or until their earlier resignation or removal.

Section 3.7 Compensation of Directors. The Board of Directors, by the affirmative vote of the majority of the directors then in office, and irrespective of any personal interest of any of the directors, shall have authority to fix the compensation of directors for services to the Company as Board members, committee members or otherwise.

Section 3.8 Removal of Directors. Any one or more directors may be removed from office only for cause, and only by the affirmative vote of holders of at least a majority of the voting power of all of the then outstanding shares of voting stock of the Company, voting together as a single class.

Section 3.9 Committees.

Section 3.9.1 Executive Committee. The Board of Directors, by resolution of a majority of the whole Board, shall appoint an Executive Committee to consist of not less than five members of the Board, one of whom shall be the person designated as Chief Executive Officer of the Company. The Executive Committee shall have the right to exercise the full power and authority of the Board of Directors of the Company to the fullest extent permitted by Section 141(c) of the General Corporation Law of the State of Delaware; provided, that, in addition to the restrictions provided in said Section 141(c), such Executive Committee shall not have the authority of the Board of Directors in reference to: (a) electing or removing officers of the Company or members of the Executive Committee; (b) fixing the compensation of any officer or director; (c) amending, altering or repealing these By-Laws or any resolution of the Board of Directors; (d) submission to the stockholders of any matter whatsoever; (e) action with respect to dividends; or (f) any action which either the Chief Executive Officer or two other members of the Executive Committee shall designate, by written instrument filed with the Secretary of the Company, as a matter to be considered by the full Board. All action taken by the Executive Committee between Board meetings on matters of a nature ordinarily requiring Board action shall be promptly reported to the Board of Directors.

Section 3.9.2 Audit Committee. The Board of Directors, by resolution of a majority of the whole Board, shall appoint an Audit Committee to consist of not less than three directors who satisfy the qualifications for Audit Committee membership set forth in the Audit Committee charter. The Audit Committee shall have the authority and responsibilities as may be set forth in the Audit Committee charter, as the same may be modified or amended from time to time.

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Section 3.9.3 Finance Committee. The Board of Directors, by resolution of a majority of the whole Board, shall appoint a Finance Committee to consist of not less than three directors. The functions of the Finance Committee may be set forth in a Finance Committee charter or, if no such charter exists, shall be (a) to supervise generally the financial affairs of the Company, (b) to review with management the capital needs of the Company and its subsidiaries, (c) to provide consultation on major borrowings and proposed issuances of debt and equity securities and (d) to report to the Board of Directors from time to time with respect to the foregoing. The Finance Committee shall make recommendations to the Board concerning the Company’s financial strategies, policies and structure, and shall undertake such additional functions and activities related to the foregoing as may be requested from time to time by the Board of Directors.

Section 3.9.4 Governance and Compensation Committee. The Board of Directors, by resolution of a majority of the whole Board, shall appoint a Governance and Compensation Committee to consist of not less than three directors who satisfy the qualifications for Governance and Compensation Committee membership set forth in the Governance and Compensation Committee charter. Subject to Article VIII hereof, the Governance and Compensation Committee shall have the authority and responsibilities as may be set forth in the Governance and Compensation Committee charter, as the same may be modified or amended from time to time.

The Board of Directors, by resolution of a majority of the whole Board, shall designate one member of the Governance and Compensation Committee to act as chairman of the Committee. The Committee member so designated shall (a) chair all meetings of the Committee, (b) chair meetings involving only non-employee directors and (c) perform such other activities as from time to time are requested by the other directors or as circumstances indicate.

Section 3.9.5 Other Committees. In addition to the Committees provided for in Sections 3.9.1 through 3.9.4 above and in Article VIII hereof, the Board of Directors may, by resolution passed by a majority of the whole Board, designate and appoint one or more other Board committees, each such committee to consist of two or more directors of the Company. Any such Board committee, to the extent provided in the resolution creating it and authorized by statute, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Company, and may authorize the seal of the Company to be affixed to all papers which may require it. The Board of Directors may also appoint other committees for the administration of the affairs of the Company, whose members may or may not be directors.

Section 3.9.6 Committee Rules and Procedures. Every committee appointed by the Board of Directors and any committee established by Article VIII hereof may, unless the Board provides otherwise, and except as otherwise provided by law, fix its own rules of procedure and hold its meetings in accordance with such rules. The Board may designate one or more persons as alternate members of any Board or other committee, as applicable, who may replace any absent or disqualified member at any meeting of such committee.

Section 3.10 Action By Directors Without Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken

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without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.

Section 3.11 Meetings By Telephone. Members of the Board of Directors, or any committee of the Board, may participate in a meeting of the Board or of such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section shall constitute presence in person at such meeting.

ARTICLE IV
Officers

Section 4.1 Officers of the Company. The officers of the Company shall consist of a Chairman and/or a President, a Secretary and a Treasurer, elected or appointed by the Board of Directors. The Board may also elect or appoint as officers of the Company a Controller, a General Counsel and one or more Vice Chairmen, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents, Deputy General Counsels, Assistant Controllers, Assistant Secretaries, Assistant Treasurers or Assistant Vice Presidents, and such other officers, as the Board may from time to time determine. If the Board of Directors shall at any time elect or appoint both a Chairman and a President, the Board shall specify which individual is to serve as the Chief Executive Officer of the Company. Any two or more offices may be held by the same person except that neither the Chairman nor the President may also hold the office of Secretary. All officers of the Company shall have such authority and perform such duties in the management of the property and affairs of the Company as are provided in these By-Laws or as may be determined by resolution of the Board of Directors and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board.

Section 4.2 Election and Term of Office. The officers of the Company shall be elected annually by the Board of Directors at the first regular meeting of the Board of Directors held after the annual meeting of stockholders. Each officer shall hold office until his successor is duly elected and qualified or until his earlier resignation or removal.

Section 4.3 Removal. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the whole Board of Directors, with or without cause, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer shall not of itself create any contract rights.

Section 4.4 Vacancies. A vacancy in any office by reason of death, resignation, removal, disqualification or otherwise may be filled by the Board of Directors for the unexpired portion of the term.

Section 4.5 Delegation of Duties of Officers. In case of the absence of any officer of the Company, or for any other reason that the Board of Directors may deem sufficient, the Board

- 8 -

of Directors may temporarily delegate the power or duties of an officer to any other officer or to any other person.

Section 4.6 The Chairman; Chief Executive Officer. If the Board of Directors shall elect a Chairman, that person when present shall preside at all meetings of the stockholders and of the Board of Directors. The Chairman shall also have the power to vote shares of stock registered in the name of the Company and shall exercise such other powers and duties as from time to time may be provided in these By-Laws or as may be prescribed by the Board of Directors. If the Chairman shall be designated as Chief Executive Officer of the Company, he or she shall have the general management and direction, subject to the authority of the Board of Directors, of the Company’s business and affairs and its officers and employees, with the power to appoint and to remove and discharge any and all employees of the Company not elected or appointed directly by the Board. The Chief Executive Officer shall, upon consultation with the Governance and Compensation Committee of the Board, fix the salaries and bonuses (if any) of all officers and executive employees of the Company and its subsidiaries other than himself.

Section 4.7 The President. If the Board of Directors shall elect a President, that person when present and in the absence of a Chairman shall preside at all meetings of the stockholders and of the Board of Directors. If there is no Chairman, or if the Board of Directors shall designate the President as the Chief Executive Officer of the Company, the President shall have all of the powers of the Chief Executive Officer enumerated in the preceding Section. The President shall also have the power to vote shares of stock registered in the name of the Company, and shall exercise such other powers and duties as from time to time may be provided in these By-Laws or as may be prescribed by the Board of Directors.

Section 4.8 Vice Chairman, Executive Vice President, Senior Vice President, Vice President. Each Vice Chairman, Executive Vice President, Senior Vice President or Vice President of the Company shall perform such duties as may from time to time be assigned by the Chief Executive Officer or the Board of Directors. The Chief Executive Officer or the Board of Directors may add words signifying the function or position to the title of any Vice Chairman, Executive Vice President, Senior Vice President or Vice President appointed by the Board. The persons holding the foregoing positions shall each have the power to vote shares of stock registered in the name of the Company where such ownership interest constitutes less than 20% of the total voting interest of the corporation issuing the stock.

Section 4.9 The Secretary. The Secretary shall record all of the proceedings of the meetings of the stockholders and directors in a book to be kept for that purpose, and shall perform like duties for the standing committees, when requested; shall have custody and care of the corporate seal, records, minutes and stock books of the Company; shall keep a suitable record of the addresses of stockholders and of directors, and shall, except as may be otherwise required by statute or these By-Laws, issue all notices required for meetings of stockholders and of the Board of Directors and committees thereof. The Secretary shall have authority to cause the seal of the Company to be affixed to all papers requiring the seal, to attest the same, and to attest any instruments signed by an officer of the Company. The Secretary shall perform such other duties as from time to time may be assigned by the Chairman, the President or the Board of Directors.

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Section 4.10 The Treasurer. The Treasurer shall have charge of the safekeeping of the Company’s funds, and shall perform such other duties as may from time to time be assigned by the Chief Executive Officer or the Board of Directors. The Treasurer may be required to give bond to the Company, at the Company’s expense, for the faithful discharge of his or her duties in such form and in such amount and with such sureties as shall be determined by the Board of Directors.

Section 4.11 The Controller. The Controller shall have charge of the general accounting department of the Company, and shall see that correct accounts of the Company’s business are properly kept. He or she shall perform such other duties as from time to time may be assigned by the Chief Executive Officer or the Board of Directors. The Controller may be required to give bond to the Company, at the Company’s expense, for the faithful discharge of his or her duties in such form and in such amount and with such sureties as shall be determined by the Board of Directors.

Section 4.12 General Counsel. The General Counsel shall be the chief legal officer of the Company and shall be responsible for the management of the legal affairs of the Company. The General Counsel shall perform such other duties as from time to time may be assigned by the Chief Executive Officer or the Board of Directors.

Section 4.13 Deputy General Counsel, Assistant Controller, Assistant Secretary, Assistant Treasurer and Assistant Vice President. The Deputy General Counsel shall assist the General Counsel in such manner and perform such duties as may be designated from time to time by the General Counsel. Each Assistant Vice President shall have such duties as may from time to time be assigned by the Vice President or Vice Presidents to whom he or she reports. Each Assistant Controller, Assistant Secretary and Assistant Treasurer shall assist the Controller, the Secretary or the Treasurer, as the case may be, in the performance of the respective duties of such principal officers. Each Assistant Secretary shall have the authority to affix the corporate seal to any instrument requiring it, to attest the same, and to attest any instrument signed by an officer of the Company. The powers and duties of the Controller, the Secretary, the Treasurer and the General Counsel, respectively, shall in case of the absence, disability, death, resignation, or removal from office of such principal officer, and except as otherwise ordered by the Board of Directors, temporarily devolve upon the first appointed deputy or assistant who is able to serve. Deputy or assistant officers shall perform such other duties as may be assigned to them from time to time. The Chief Executive Officer or the Board of Directors may add words signifying function or position to the title of any deputy or assistant officer.

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ARTICLE V
Capital Stock

Section 5.1 Certificates for Shares. Subject to the provisions of Section 5.2, every holder of fully paid stock in the Company shall be entitled to have a certificate or certificates signed in the name of the Company by the Chairman, the President or any Vice President and by the Secretary or an Assistant Secretary of the Company, representing and certifying the number of shares of the Company’s capital stock owned by such holder. Any or all of the signatures on each certificate may be facsimile. In case any officer, transfer agent or registrar whose signature or facsimile signature appears on a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Company with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

Section 5.2 Certificates for Fractional Shares. The Board of Directors may provide that, with respect to classes or series of stock as to which the issuance and ownership of fractional shares are permitted in accordance with the Amended and Restated Certificate of Incorporation, the ownership of fractional interests shall be evidenced by scrip certificates in lieu of the certificates referred to in Section 5.1 of these By-Laws. Any or all of the signatures on each scrip certificate may be facsimile. The Board of Directors may specify from time to time, with respect to any series or class of stock, particular fractions in which ownership will be permitted and recognized and as to which certificates will be issued.

Section 5.3 Registration and Transfer of Shares. The Company will maintain or cause to be maintained a register for the registration of shares of its capital stock. Transfers of shares and exchanges of stock certificates shall be recorded on the books of the Company only at the request of the holder of record thereof or by his legal representative, who shall furnish proper evidence of authority to transfer, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Company, and only upon the surrender for cancellation of the certificate or certificates for such shares.

Section 5.4 Only Holder of Record Entitled to Recognition. The Company shall be entitled to treat the holder of record of any share or shares as the owner thereof for all purposes and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law.

Section 5.5 Fixing Record Date. For the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a date as the record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which shall not be more than sixty nor less than ten days (or, in the case of a meeting to vote on a merger or consolidation, not more than sixty nor less than twenty days) before the date of such meeting, nor more than sixty days prior to any

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other action. The record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be as provided by law. The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. When a determination of stockholders entitled to notice of or to vote at any meeting of stockholders has been made as provided in this Section, such determination shall apply to any adjournment thereof; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

Section 5.6 Lost Certificates. If an outstanding certificate of stock shall be lost, destroyed or stolen, the holder thereof may have a new certificate issued to him or her upon producing evidence satisfactory to the Company of such loss, destruction, or theft, and also upon furnishing to the Company a bond of indemnity deemed sufficient by the Secretary to protect the Company and any registrar or transfer agent against claims under the certificate alleged to be lost, destroyed or stolen; provided, however, that upon good cause shown the Board of Directors may waive the furnishing of such bond of indemnity.

ARTICLE VI
Miscellaneous

Section 6.1 Execution of Instruments. Contracts and other written documents of the Company shall be executed as the Board of Directors may from time to time direct. In the absence of specific directions by the Board, the officers of the Company shall duly execute all necessary contracts and other written instruments properly coming within the scope of their respective powers and duties. When the execution of any contract or other written instrument of the Company has been authorized by the Board of Directors without specification of the executing officers, the Chairman, the President, any Vice Chairman or any Vice President may execute the same in the name and on behalf of the Company and the Secretary or any Assistant Secretary may attest the same and affix the corporate seal thereto.

Section 6.2 Loans. No loans (except loans for current expenses) shall be incurred on behalf of the Company and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors or a duly authorized committee thereof. Such authority may be general or confined to specific instances. No loans shall be made by the Company to any director or officer except upon the affirmative vote of a majority of the disinterested directors.

Section 6.3 Bank Deposits and Check Authorization. The funds of the Company shall be deposited to its credit in such banks, trust companies or other financial institutions as may be determined from time to time by the Chairman or President and the Secretary of the Company, evidenced by joint written action. By such joint written action, filed with the minutes of the Board of Directors, the Chairman or President together with the Secretary may authorize (a) the opening of one or more deposit accounts at any such institution and (b) the designation of, or a change in the designation of, the officers or employees upon whose signature checks may be written or funds withdrawn on any Company account at any such institution, provided that the signature of one person other than the Chairman, President and Secretary shall be required

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therefor. By the adoption of this Section 6.3 of these By-Laws the Board of Directors adopts the form of any resolution or resolutions requested by or acceptable to any financial institution in connection with the foregoing actions, provided that the Secretary of the Company (x) believes that the adoption of such resolution or resolutions is necessary or advisable and (y) files such resolution or resolutions with the minutes of the Board of Directors.

Section 6.4 Fiscal year. The fiscal year of the Company shall begin on the first Monday after the last Sunday in December of each year and end on the last Sunday in the following December.

Section 6.5 Seal. The corporate seal shall be in the form of a circle and shall have inscribed thereon the name of the Company and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed, affixed, printed or otherwise reproduced. The Board of Directors may give general authority to any officer to affix the seal of the Company and to attest the fixing by his or her signature.

Section 6.6 Waiver of Notice. Whenever any notice whatever is required to be given by statute, by the Amended and Restated Certificate of Incorporation of the Company, by these By-Laws or otherwise, in connection with any meeting of stockholders, directors or members of a committee of directors, a written waiver thereof, signed by the person entitled to such notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to such required notice. In addition, attendance by a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of such meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any meeting of stockholders, directors or members of a committee of directors need be specified in any written waiver of notice.

ARTICLE VII
Amendments of By-Laws

Section 7.1 Except as otherwise provided in Article VIII hereof, these By-Laws may be altered, amended or repealed and new by-laws may be made (a) by the stockholders as provided in the Amended and Restated Certificate of Incorporation or (b) by the affirmative vote of a majority of the whole Board of Directors at any regular or special meeting thereof.

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ARTICLE VIII
CT Directors

Section 8.1 Effectiveness and Interpretation. This Article VIII shall be in effect from the Effective Time of the Merger, as such terms are defined in the Agreement and Plan of Merger, dated March 13, 2000, between the Company and The Times Mirror Company (the “Merger Agreement”), until the earlier of (a) the end of the term currently provided for in Chandler Trust I and Chandler Trust II (collectively, the “CTs”) without giving effect to any extension thereof or any amendment of the CTs following the date of the Merger Agreement, and (b) the sale, distribution or other disposition by the CTs of more than 15% of the aggregate number of shares of common stock of the Company issued to the CTs in the Merger. Upon the earlier to occur of the events set forth in clauses (a) and (b) of the foregoing sentence (the “Article VIII Termination Date”), the terms and provisions of this Article VIII shall immediately and automatically terminate and no longer have any force or effect. Upon the termination of Article VIII pursuant to this Section 8.1, the provisions of these By-Laws, other than Article VIII, shall be the By-Laws of the Company until amended, modified or repealed in accordance with the terms hereof. In the event of any conflict between the provisions of this Article VIII and any other provisions of these By-Laws or, to the extent that any of the provisions of this Article VIII overlap with and/or are more specific or more restrictive than any other provisions contained in these By-Laws, the provisions of this Article VIII shall govern.

Section 8.2 CT Nominating Committees. There is hereby established a committee of the Board of Directors to be known as the CT Nominating Committee. The CT Nominating Committee shall be comprised exclusively of the CT Directors. “CT Directors” means (i) the three directors designated as such in Schedule 6.8 of the Merger Agreement and (ii) each other director nominated or appointed by the CT Nominating Committee in accordance with this Article VIII.

Section 8.3 CT Nominating Procedures.

Section 8.3.1 Prior to each meeting of the stockholders of the Company at which directors are to be elected, in addition to any other persons nominated by the Board of Directors or another committee, the CT Nominating Committee shall nominate such number of persons, if any, as may be necessary to ensure that, assuming the election of such person or persons nominated by the CT Nominating Committee, there will be three CT Directors on the Board of Directors following such election. So long as the Board of Directors shall remain classified into three classes, one CT Director shall serve in each class. Neither the Board of Directors nor any other committee thereof shall nominate any person in opposition to the person or persons nominated by the CT Nominating Committee.

Section 8.3.2 At each meeting of the stockholders at which directors are to be elected, in addition to presenting nominees for other directorships, the officer of the Company presiding at such meeting shall present for election, on behalf of the CT Nominating Committee, any person or persons nominated by the CT Nominating Committee in accordance with paragraph 8.3.1 above, and such nomination shall be deemed for purposes of Section 3.2.2 hereof to be made at the direction of the Board of Directors.

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Section 8.4 CT Director Vacancies. If any CT Director is removed from the Board of Directors, resigns, retires, dies or otherwise cannot continue to serve as a member of the Board of Directors, then the remaining members of the CT Nominating Committee shall have the exclusive authority to appoint a person to fill such vacancy, and the person so appointed shall become a member of the CT Nominating Committee.

Section 8.5 CT Director Service on Board Committees. Subject to the CT Director meeting applicable independence criteria for service on audit and compensation committees, at least one CT Director shall serve on each of the committees of the Board of Directors, unless otherwise agreed by the CT Nominating Committee.

Section 8.6 Article VIII Amendment. No provision of this Article VIII (for so long as such Article VIII is in effect) may be altered, amended or repealed, nor may any provision inconsistent therewith be adopted, including by means of merger, consolidation, asset transfer or other transaction with any affiliated entity in which the Company is not the surviving or continuing entity, except by the affirmative vote of all of the holders of the outstanding stock of the Company entitled to vote or all of the members of the Board of Directors.

- 15 - EX-31 6 fitzsimons31.htm DENNIS J. FITZSIMONS EXHIBIT 31.1 FitzSimons Form 10-1Q Certification

EXHIBIT 31.1

Form 10-Q Certification

I, Dennis J. FitzSimons, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Tribune Company;

Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of Tribune Company as of, and for, the periods presented in this quarterly report;

4.	Tribune Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for Tribune Company and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Tribune Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

Evaluated the effectiveness of Tribune Company’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

Disclosed in this quarterly report any change in Tribune Company’s internal control over financial reporting that occurred during Tribune Company’s most recent fiscal quarter (Tribune Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Tribune Company’s internal control over financial reporting; and

5.	Tribune Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Tribune Company’s auditors and the audit committee of Tribune Company’s board of directors:

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Tribune Company’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in Tribune Company’s internal control over financial reporting.

Date: August 4, 2003

      /s/  Dennis J. FitzSimons
      Dennis J. FitzSimons
      President and
      Chief Executive Officer

EX-31 7 grenesko31.htm GRENESKO EXHIBIT 31.2 Grenesko Form 10-1Q Certification

EXHIBIT 31.2

Form 10-Q Certification

I, Donald C. Grenesko, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Tribune Company;

4.	Tribune Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for Tribune Company and have:

5.	Tribune Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Tribune Company’s auditors and the audit committee of Tribune Company’s board of directors:

Any fraud, whether or not material, that involves management or other employees who have a significant role in Tribune Company’s internal control over financial reporting.

Date: August 4, 2003

      /s/  Donald C. Grenesko
      Donald C. Grenesko
      Senior Vice President/
      Finance and Administration

EX-32 8 fitzsimons32.htm FITZSIMONS EXHIBIT 32.1 FitzSimons Exhibit 31.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 UNITED STATES CODE SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Dennis J. FitzSimons, the President and Chief Executive Officer of Tribune Company, certify that (i) Tribune Company’s Form 10-Q for the quarter ended June 29, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q for the quarter ended June 29, 2003 fairly presents, in all material respects, the financial condition and the results of operations of Tribune Company.

         /s/   Dennis J. FitzSimons
         Dennis J. FitzSimons
         President and
         Chief Executive Officer

         August 4, 2003

EX-32 9 grenesko32.htm GRENESKO EXHIBIT 32.2 Grenesko Exhibit 31.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 UNITED STATES CODE SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Donald C. Grenesko, the Senior Vice President/Finance and Administration of Tribune Company, certify that (i) Tribune Company’s Form 10-Q for the quarter ended June 29, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q for the quarter ended June 29, 2003 fairly presents, in all material respects, the financial condition and the results of operations of Tribune Company.

         /s/   Donald C. Grenesko
         Donald C. Grenesko
         Senior Vice President/
         Finance and Administration

         August 4, 2003

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