Major Market Media Greenwich
Tribune Company 2000 Annual Report New Orleans
Tribune at a Glance
WPIX (WB11) WLVI (WB56) KHWB (WB39) KWGN (WB2) WTIC (FOX61) WPMT (FOX43)
Tribune Broadcasting owns and New York Boston Houston Denver Hartford, Conn. Harrisburg, Pa.
operates 22 major-market television KTLA (WB5) KDAF (WB33) KCPQ (FOX13) KTXL (FOX40) WXMI (FOX17) WEWB (WB45)
Los Angeles Dallas Seattle Sacramento, Calif. Grand Rapids, Mich. Albany, N.Y.
stations, including national super-
WGN (WB9) WBDC (WB50) KTWB (WB22) KSWB (WB69) WGNO (ABC26)
station WGN, and reaches 80 Chicago Washington, D.C. Seattle San Diego New Orleans
percent of U.S. television house- WPHL (WB17) WATL (WB36) WBZL (WB39) WXIN (FOX59) WNOL (WB38)
holds. It is the largest TV group not Philadelphia Atlanta Miami Indianapolis New Orleans
owned by a network. Broadcasting Radio Television Programming
properties also include four radio WGN-AM Tribune Entertainment Company, Los Angeles — develops and distributes first-run television
stations, Tribune Entertainment and Chicago programming for the Tribune station group and national syndication
the Chicago Cubs baseball team. KEZW-AM Baseball
Chicago National League Ball Club Inc. (Chicago Cubs)
KKHK-FM The WB Television Network (25% owned); TV Food Network (29%);
Denver The Golf Channel (9%); iBlast Networks (25%)
Daily Newspapers Entertainment Listings and Content Syndication
Tribune Publishing operates Los Angeles Times The Hartford Courant Tribune Media Services—national and international print, online
Los Angeles Hartford, Conn. and on-air TV and movie information; comics, columnists and features;
market-leading newspapers online and wire services; print and interactive ad networks
dedicated to great journalism. Chicago Tribune The Morning Call
Chicago Allentown, Pa. Cable Programming
It is the second-largest U.S. news-
CLTV News, Chicago; Central Florida News 13, Orlando (50% owned)
paper group in revenues and third Newsday Daily Press
in total circulation. The group also Long Island, N.Y. Newport News, Va. National Advertising
Tribune Media Net—oversees national advertising sales efforts for all
distributes entertainment listings The Baltimore Sun The Advocate
Tribune newspapers and coordinates sales of multimedia ad packages
and syndicated content, and Baltimore Stamford, Conn.
operates two 24-hour cable South Florida Greenwich Time
Tribune Classified Services—directs overall classified strategy for Tribune,
news channels. Sun-Sentinel Greenwich, Conn.
integrating print, interactive and niche products
Fort Lauderdale, Fla.
Other Spanish-Language Newspapers
Orlando Sentinel New York
La Opinión, Los Angeles (50% owned); ¡Exito!, Chicago (weekly)
Newspaper Sites Specialty Sites Investments
latimes.com blackvoices.com BrassRing Inc. (24% owned)
chicagotribune.com go2orlando.com CareerBuilder Inc. (46%)
Tribune Interactive operates leading newsday.com metromix.com Classified Ventures (34%)
news and information Web sites sunspot.net chicagosports.com
in 18 of the nation’s top 30 markets. sun-sentinel.com calendarlive.com
The sites attract approximately orlandosentinel.com showtimeinteractive.com
5 million unique visitors per month, ctnow.com hrticket.com
placing Tribune among the top 20 dailypress.com Classified Advertising Sites
online news and information networks stamfordadvocate.com Recruitment—blackvoices.com, brassring.com,* careerbuilder.com,*
in the country. greenwichtime.com siliconprairie.com
TV and Radio Sites Real estate—apartments.com,* newhomenetwork.com*
See inside back cover for General merchandise—recycler.com
*affiliate/equity relationship; supported locally and nationally via sales and marketing
Competitive Advantages Strategic Priorities
I Broad distribution —our TV stations reach 38% of U.S. television households I Create a leading distribution network in the consolidating television industry by
over the air, and 80% with the cable and satellite coverage of WGN superstation acquiring stations in the nation’s top 40 markets
I Major markets —we have TV stations in 10 of the nation’s top 12 markets I Continue track record of exceeding industry averages for revenue growth and
and in 16 of the top 30. Tribune is one of only four TV groups with VHF stations margin expansion
in New York, Los Angeles and Chicago (ABC, CBS and NBC are the others) I Expand local news programming to grow audience share and increase revenues
I Buying power —our TV group’s size provides purchasing advantages in the
I Achieve operating efficiencies in two-station markets and capitalize on further
syndicated programming marketplace
opportunities for dual ownership
I Local programming excellence —news, sports and special-event coverage attracts
I Exploit cross-media opportunities in top three markets to better serve consumers
viewers and advertisers, and gives Tribune stations distinct identities in their markets
I WGN superstation —we operate one of America’s most-watched cable
I Enhance ad revenue stream by expanding cable coverage of WGN superstation
channels, reaching more than 51 million households outside of Chicago
I Build out digital broadcast capacity and focus on maximizing the future revenue
potential of our digital TV spectrum
I Support the growing WB Television Network, the major source of prime-time
programming for our affiliated stations
I Increase Tribune-branded programming through Tribune Entertainment
Competitive Advantages Strategic Priorities
I Excellent markets —our newspapers are located in dynamic major markets, I Be the leading provider of local information in the communities where we do business
including New York, Los Angeles and Chicago I Position Tribune’s newspaper brands as multimedia information franchises by building
I Strong local franchises —our newspapers are the leading sources of news, cross-media presence
information and classified advertising, in print and online, in their local markets I Capture the majority of local classified advertising dollars, in print and online
I Award-winning journalism —Tribune newspapers have won a combined 90 Pulitzer
I Increase Tribune’s share of the fast-growing national advertising category
Prizes, and each is a frequent recipient of national and regional awards for investigative
reporting, column and feature writing, sports coverage, photography and other categories I Leverage Tribune’s mass-media assets to accelerate growth and build cross-media sales
I Electronic media alliances —through broadcast TV, radio, cable and the Internet, I Build readership and circulation through innovative marketing and product
our newspapers extend their audience reach and brands, positioning themselves as enhancements that respond to customer needs
complete, multimedia information sources I Sustain operating excellence, including high-quality production and cost efficiency,
with equipment and technology upgrades
Competitive Advantages Strategic Priorities
I Established brands —our newspaper and broadcast Web sites build on the reputations of I Be the leading provider of online news, information and classifieds in our markets,
Tribune’s well-known media brands, which are trusted sources of local news and information leveraging Tribune’s extensive content resources and brand equity
I Scale and scope —we operate a network of leading news and information sites in I Focus growth strategy on newspaper Web sites, which attract the most users and
18 of the top 30 markets; this strong national reach and access to major markets is hold the greatest revenue potential
important to advertisers
I Build the nation’s No.1 network of major-market Web sites
I Cross-promotion ability —Tribune’s TV and publishing assets enable cost-effective
I Develop multiple revenue streams, including advertising and sponsorships, that lead
marketing of our dot-com brands to local and national audiences
our Internet activities to long-term profitability
I Content creation —our Web sites draw on Tribune’s vast media network to provide
I Create and strengthen content partnerships with providers of emerging wireless and
more depth, including multimedia news and features
broadband platforms to extend our reach
I Online experience —Tribune was an early leader in adopting interactive technology. We
I Invest in leading-edge Internet technology, ensuring that our Web sites have the
know how to build compelling Web sites that provide value for consumers and advertisers
features and speed that consumers and advertisers value
Tribune Company and Subsidiaries
For the Year (in thousands, except per share data) 2000 1999 change
Operating revenues $ 4,910,363 $ 2,882,284 + 70%
Operating profit $ 1,033,011 $ 732,842 + 41%
Net income Continuing operations before non-operating items $ 403,519 $ 382,358 + 6%
Continuing operations including non-operating items 310,401 1,449,962 – 79%
Discontinued operations (86,015) 21,807 *
Cumulative effect of accounting change, net – (3,060) – 100%
Total $ 224,386 $ 1,468,709 – 85%
Diluted Continuing operations before non-operating items $ 1.30 $ 1.41 – 8%
earnings Continuing operations including non-operating items .99 5.49 – 82%
Discontinued operations (.29) .08 *
Cumulative effect of accounting change, net – (.01) – 100%
Total $ .70 $ 5.56 – 87%
Common dividends per share $ .40 $ .36 + 11%
price per share: high $ 55.69 $ 60.88
low $ 27.88 $ 30.16
close $ 42.25 $ 52.56
At Year End Dec. 31, 2000 Dec. 26, 1999 change
Total assets $14,676,212 $ 8,740,047 + 68%
Total debt (excluding PHONES) $ 3,448,445 $ 1,396,039 + 147%
Shareholders’ equity $ 5,885,916 $ 3,458,617 + 70%
Common shares outstanding 299,518 237,792 + 26%
* Not meaningful
Operating Revenues Operating Profit EBITDA
(dollars in billions) (dollars in millions) (dollars in millions)
5.0 1250 1500
96 97 98 99 00 96 97 98 99 00 96 97 98 99 00
is a media industry leader with operations in major
markets throughout the United States, including 18 of
Through television, radio,
the top 30.
newspapers and the Internet, we reach
more than 80 percent of U.S.households.
Our multimedia growth strategy expands the audience
for Tribune content, deepens news coverage and
strengthens our local brands. It also helps us capture incremental
advertising revenues, locally and nationally. In addition, we invest
aggressively in technologies that are important to our future, such
as digital television and innovative online services. Tribune’s
annualized revenues are about $6 billion and we employ more
than 22,000 people.
To our shareholders
2000 was an extraordinary year for Tribune, highlighted One key opportunity is to increase our share of national advertising.
Tribune Media Net, our new nationwide sales organization, positions
by our merger with The Times Mirror Company. Valued
Tribune as a one-stop solution for advertisers who need to reach a mass
at $8.3 billion, it was the largest acquisition in newspaper audience quickly and efficiently, particularly in the top three markets.
Sales of cross-media ad programs—featuring any combination
industry history. More importantly, it created the only
of newspapers, television and the Internet—are gaining momentum.
media company with television, newspaper and Internet Our combined television and newspaper reach is a major selling
point: 75 percent of adults in Chicago, 62 percent in Los Angeles
operations in the top three U.S. markets — New York,
and 42 percent in New York. In addition, Tribune Media Net funnels
Los Angeles and Chicago — and positions Tribune for national ad dollars to our mid-tier markets like Baltimore, Fort
Lauderdale, Hartford and Orlando, producing incremental newspaper
revenue that was not attainable prior to the merger.
The benefits of the Times Mirror merger, completed More options for Tribune advertisers are just the beginning. Our
local editorial and newsgathering resources are extraordinary, and
last June, extend well beyond newspapers. We acquired
we know how to maximize their value. We’ve proven in Chicago that
the scale that is essential for success in today’s media cross-promotion and sharing content across media strengthens our
brands and gives our audiences a deeper level of news and information.
environment, and the ability to serve advertisers and
It produces operating efficiencies as well. As you’ll see throughout
consumers in new ways that add value. That means this report, we’re now extending our unique multimedia growth
strategy to other markets, including New York and Los Angeles.
more opportunities to grow revenue across Tribune’s
The integration of Times Mirror has progressed faster than
entire network of mass-media businesses. expected. Merger-related synergies should generate about $130 million
and employee owners
of incremental cash flow in 2001. In fact, a large portion of that amount we delivered a positive total return of 14.5 percent while, for the same
has already been realized. Duplicate corporate overhead expenses were period, the S&P 500 Index declined 4.5 percent.
eliminated ahead of schedule, and at the business unit level, we’ve taken Clearly, our stock price in 2000 did not reflect the progress made
steps to increase operating margins at our newly acquired newspapers. throughout the company. The television group outperformed the
In particular, our new management team at the Los Angeles Times has industry, leading Tribune Broadcasting to its ninth consecutive year
made many positive changes. of record growth. Once again, combining great markets with excellent
After the merger we divested non-core businesses, focusing programming proved a winning formula. We continue to benefit from
Tribune resources exclusively on our affiliation with the popular
broadcasting, publishing and inter- WB Network, smart programming
active. We received excellent value buys in the syndication market
for our education group and several and our stations’ growing local
companies acquired in the Times news franchises.
Mirror transaction—about $2 billion For Tribune Publishing, margin
John W. Madigan
Dennis J. FitzSimons
Chairman, President and
Executive Vice President
Chief Executive Officer
in cash after taxes. This helped off- expansion is a major focus as we
set the cost of the merger, and we strive to operate the industry’s
applied the funds to reduce debt most profitable newspapers.
and repurchase Tribune stock. Installations of new technology
Solid results Financially, are boosting productivity, and
2000 was another strong year for we’re reducing expenses. For
Tribune. Although reported earnings per share were lower due to dilution example, several newspapers have converted to a narrower page size,
from the Times Mirror merger, cash earnings—defined as income from cutting newsprint costs significantly. Readers find the new size more
continuing operations, excluding non-operating items, plus amortization convenient, too. The Chicago Tribune, South Florida Sun-Sentinel and
expense—rose 12 percent on a per share basis. The Hartford Courant will adopt the new format in 2001.
In what was a difficult stock market overall, total return on Tribune Our interactive operations continue to grow rapidly, and we expect
common shares was minus 22.5 percent in 2000. We were encouraged, the Internet to play a prominent role in Tribune’s future. It complements
however, by our stock’s performance following the Times Mirror merger and extends our broadcasting and publishing businesses. In 2000, we
announcement on March 13. From that day through December 31, tightened our growth strategy to focus on the Tribune newspaper sites,
which attract the most users and hold the greatest revenue potential. As always, the financial measure known as Shareholder Value Added,
We also scaled interactive activities to better match online revenue or SVA, will help guide our decision-making on acquisitions, capital
projections. These steps position Tribune Interactive to be profitable expenditures and operating budgets.
by the second half of 2002. We believe high-quality media properties will continue to grow in
Board of Directors We welcomed Enrique Hernandez, Jr. to the value, adding to our confidence in the company’s future. In today’s frag-
Tribune board earlier this month. Rick is chairman, president and CEO mented media environment, advertisers need television and newspapers
of Inter-Con Security Systems in Los Angeles and also owns interests in more than ever to reach a broad consumer audience—especially in
the television industry. He fills the vacancy created by Donald Rumsfeld, the major markets, where Tribune is concentrated. We have the right
who last month joined the Bush administra- businesses in the right places.
tion as Secretary of Defense. Don joined the How we create value Tribune’s media brands and financial
Tribune board in 1992 and we wish him strength are a powerful combination. Yet
Develop premier branded content
well as he once again serves our nation in a our greatest asset of all is people. We have
very important role. Build value across multiple media an abundance of motivated, innovative
Three of our long-time directors, Diego thinkers at all levels of the organization,
Apply technology imaginatively
Hernandez, Robert La Blanc and Kristie most of whom are Tribune shareholders.
Miller, will retire from board service in Encourage creativity This further distinguishes Tribune and
in a diverse workplace
May. These directors have collectively contributes to our industry leadership.
served Tribune shareholders for more than Use financial resources aggressively Even off the job, our employees are excep-
45 years and we appreciate their dedication to create shareholder value tional, volunteering their time and talent
and commitment. Thomas Unterman, who in the communities where we do business.
joined our board last June following the Times Mirror merger, will not This is a time of great optimism at Tribune. Never in our history
be standing for reelection. We thank Tom for his contributions during have we had so many opportunities to grow, and so many competitive
the transition and wish him well. advantages. The best is yet to come as we build the multimedia
Outlook Even in the face of slower ad trends, Tribune is posi- company of the future.
tioned for above-average growth. We are only beginning to capture
the full benefits of the merger, including significant economies of Sincerely,
scale. In addition, Tribune Media Net has a national sales team in
place to serve a new class of advertisers and increase our business
with existing ones. John W. Madigan
We expect to make more acquisitions, especially in television, where Chairman, President and Chief Executive Officer
we are actively searching for opportunities in the nation’s top 40 markets. February 23, 2001
The audience for Tribune content swelled in 2000 as we Their cooperation — in newsgathering, content creation,
continued our expansion in the nation’s largest, most lucrative promotion, sales and other areas — strengthens our local
markets. Our major-market orientation, combined with an brands, deepens coverage and reduces costs.
aggressive, multimedia growth strategy, sets Tribune apart Our joint efforts create new revenue streams, too. Tribune
from both local and national competitors. Media Net, established in 2000, is pumping up our share
In four of the five most-populated states, Tribune is the of the national advertising segment by offering targeted
preeminent local media company. We are the only one with mass-media options that marketers have never seen before.
television, newspaper and Internet operations in New York, Response to our customized, cross-market and cross-media
Los Angeles and Chicago, and we are the leading news- ad programs has been very positive, and we’ve only begun
paper publisher in Florida. In these markets and throughout to exploit this unique Tribune capability. In 2001, we’ll
our national network, Tribune’s broadcasting, publishing and create even more value for national advertisers, helping
interactive businesses work together. them succeed in the top three markets and beyond.
From Times Square to the eastern tip of Long Island, Tribune has the greater New York
market covered. WPIX-TV extended its local news franchise in 2000, introducing
the WB11 Morning News. The two-hour newscast has pulled in new viewers and
advertisers alike, and, like the station’s flagship 10 p.m. news, benefits from a growing
relationship with Newsday. I WPIX, Newsday and their corresponding Web sites
combined resources on three statewide polls prior to the November election. More
co-branded, content-sharing opportunities will be pursued in 2001, as will bundled
advertising programs that bring together all Tribune media assets in the region.
I Newsday and newsday.com are powerful brands on their own. At 54 percent daily and
63 percent on Sundays, Newsday has the highest market penetration of any major
newspaper in the country. In addition, its primary circulation territory includes
Nassau and Suffolk counties on Long Island — high-income areas that most advertisers
need to reach. I Newsday also publishes Hoy, a fast-growing Spanish-language
daily. Just north of the Big Apple, The Advocate (Stamford) and Greenwich Time
serve Connecticut’s affluent Fairfield County.
The Los Angeles Times and KTLA-TV pack a dynamic one-two punch in the nation’s
second-largest market. Together, they reach approximately 62 percent of adults in the
region every week. The Times and KTLA teamed up in 2000 to deliver enhanced
coverage of the Democratic National Convention in Los Angeles and
breaking news stories such as the Concorde crash in Paris. Content on
latimes.com and ktla.com also reflect Tribune’s cooperative efforts in
Southern California. I The Times earned its 24th Pulitzer Prize in
2000. New weekly sections, “Tech Times” and “Workplace,” and increasing coverage of
L.A.’s Latino community, show the newspaper’s ability to address reader needs and
grow with the market. “Sneaks,” a popular film-preview section published quarterly,
was expanded to the Chicago Tribune and Newsday, generating incremental revenue
from national advertising. I Partnering with the Times deepens KTLA’s established
role as a local news and information leader. The station airs 24.5 hours of local
news programming per week, including the innovative KTLA Morning News — No. 1
with adult viewers ages 25 to 54 — and the award-winning News @ Ten.
The multimedia model we’re applying in New York and Los Angeles, as well as
Hartford, was developed in Chicago. It is a proven success on three levels: content
sharing, cross-brand promotion and cross-media ad sales. I Our local businesses draw
from each other — a daily process that enriches the news and information appearing
on-air, in print and online. WGN-TV, WGN Radio and CLTV, for example, often use
Chicago Tribune reporters and columnists to augment their own take on a story.
Viewers get more insight; the newspaper gets more exposure. All of our
Chicago outlets promote one another, helping grow Tribune’s regional
audience. I For advertisers, more channels mean more potential exposure.
Our media in Chicago deliver 75 percent of adults every week. We offer
convenience, too — a single point of contact for multimedia packages tailored to
advertisers’ specific needs. I Even in our home market we see plenty of room to grow,
and we’re investing in our local products aggressively. For example, a major expansion
under way at Freedom Center, the Chicago Tribune’s printing facility, will increase
zoning and inserting capacity. Readers will see more community-specific news and
information, and advertisers will have more options for targeting their messages. At
WGN-TV, a new state-of-the-art digital newsroom allows producers to review video
edited for broadcast on their desktop computers. The technology gives the editors
many more options in the use of special effects and provides a framework for greater
content sharing with CLTV.
The vibrant Florida market is a great place to sell newspapers, and we should know.
The Orlando Sentinel and South Florida Sun-Sentinel are news and information leaders in
the third fastest-growing state, and each employs aggressive multimedia growth strategies.
I In 2000, the Orlando Sentinel captured a Pulitzer Prize, increased circulation and
launched a cover-to-cover redesign. Central Florida News 13, our partnership with
Time Warner, extends the Sentinel brand and offers the region’s only 24-hour local news
on television. In print, online and on the air, Orlando Sentinel Communications reaches
88 percent of Central Florida adults. I Likewise, the Sun-Sentinel connects with more
adults than any major daily newspaper in the Broward/South Palm Beach market —
three times more than The Miami Herald. It’s also a hands-on content partner with several
South Florida television and radio stations. I Our Florida newspapers, Web sites, WBZL-TV
(Miami) and News 13 played a pivotal reporting role, nationally and locally, in the
presidential election. Editorial staff shared their local knowledge with the full range of
Tribune media outlets as the ballot controversy unfolded, deepening our
companywide coverage in every medium. Sun-Sentinel editors and reporters
also provided insights for CNN, C-SPAN, the BBC, MSNBC, National Public
Radio and CBS Radio.
TV stations in10 of the top
Tribune is the country’s fourth-largest broadcaster,
operating the largest television group not owned
by a network. With stations in 10 of the top 12
markets, and 16 of the top 30, we reach 80 percent
of U.S. television households, including the cable
and satellite coverage of superstation WGN.
Effective programming strategies combined with our major-market
presence continue to produce strong financial results. Tribune
Broadcasting — including the television group, four radio stations,
Tribune Entertainment and the Chicago Cubs — achieved record operating
profit and operating revenues in 2000, up 19 percent and 13 percent,
respectively. Television operating cash flow margins improved a full point
in 2000, to 42 percent, and have more than doubled over the past 10 years.
We are a leading consolidator in the television industry, focusing
on acquisition opportunities in the nation’s top 40 markets. Expanding
our national footprint gives us greater scale to stay competitive and
increase cash flow. Besides entering new markets, we look to grow in
our existing markets by acquiring second stations as we have done in
Seattle and New Orleans.
In addition to scale, building viewership is fundamental to our television
success. Tribune’s main source of prime-time programming is The WB
Television Network, in which we hold a 25 percent equity stake. Fifteen of
our 22 stations are WB affiliates and together they comprise the major-
market backbone of the network. We also operate six strong Fox affiliates.
NATIONAL REACH Tribune’s 22 stations reach 38 percent of U.S. television
households.* Under FCC rules, which discount coverage for UHF stations, we’re well
under the regulatory cap of 35 percent and have plenty of room to grow.
Station Market Size Affiliation Acquired
WPIX New York 1 WB11 1948**
KTLA Los Angeles 2 WB5 1985
WGN Chicago 3 WB9 1948**
WPHL Philadelphia 4 WB17 1992
WLVI Boston 6 WB56 1994
KDAF Dallas 7 WB33 1997
WBDC Washington, D.C. 8 WB50 1999
WATL Atlanta 10 WB36 2000
KHWB Houston 11 WB39 1996
KCPQ Seattle 12 FOX13 1999
12 U.S. markets
KTWB Seattle 12 WB22 1998
WBZL Miami 16 WB39 1997
KWGN Denver 18 WB2 1966
KTXL Sacramento, Calif. 19 FOX40 1997
KSWB San Diego 25 WB69 1996
WXIN Indianapolis 26 FOX59 1997
The WB’s popularity with teen and young-adult viewers was never WTIC Hartford, Conn. 27 FOX61 1997
more apparent than in 2000. In the critical November “sweeps” period, WXMI Grand Rapids, Mich. 38 FOX17 1998
The WB scored the highest year-to-year ratings increase of any television WGNO New Orleans 42 ABC26 1983
network in the demographic segments most coveted by advertisers. WNOL New Orleans 42 WB38 2000
WPMT Harrisburg, Pa. 46 FOX43 1997
Overall ratings jumped 28 percent among adults ages 18-34, and 19
WEWB Albany, N.Y. 56 WB45 1999
percent for adults 18-49. 7th Heaven, The WB’s signature series, had its
*Nielsen Media Research, 2000 HH estimates **Founded by Tribune
best-ever sweeps average with gains of more than 40 percent in both the
18-34 and 18-49 adult groups. Angel, Dawson’s Creek and Felicity also
achieved impressive audience growth. Gilmore Girls, a new series, 10-acre KTLA-TV studio lot and answers the exploding demand for digital
performed even better than expected. production facilities from the Hollywood creative community.
Programming during the “fringe” periods that surround prime time Tribune television stations enjoy close ties with their communities.
also plays a key role in our success. The size of our station group gives Local news and sports programming strengthens those ties and distin-
us a buying advantage in the syndication market and investments in guishes our channels from a sea of basic cable networks. Tribune stations
off-network comedy series have produced excellent returns. Friends, broadcast more than 200 hours of local news every week. The programming
for example, continues to yield solid ratings and revenue growth for appeals to viewers and advertisers alike, supporting our goal to increase
our stations, attracting viewers whom advertisers will pay a premium local market shares.
to reach. We believe Everybody Loves Raymond — one of the top-rated We’ve been especially aggressive in the morning news category. In
shows on CBS and launching on most Tribune stations this fall — 2000, morning shows debuted in New York, Boston, Seattle and Denver.
will generate similar benefits. The Tribune group will add another Like our popular morning newscasts in Los Angeles and Chicago, the
proven winner, Will & Grace, in 2002. new shows feature an entertaining blend of news, information and
Gene Roddenberry’s Andromeda, introduced by Tribune Entertainment personalities. The overriding goal is to give viewers something they
last fall, looks like a winner, too. It is the No. 1-rated action drama can’t get anywhere else, and our morning shows frequently outperform
in first-run syndication and demonstrates the value of Tribune the national broadcasts by traditional networks.
Entertainment on multiple levels. With Andromeda, Tribune television We continue to expand our digital broadcast capacity in anticipation
stations received a highly rated, first-run show at no cash cost. Tribune of growing consumer demand for high-definition television. Eight of our
Entertainment, in turn, benefited from having one of the nation’s stations now deliver a digital signal. In addition, Tribune Broadcasting
strongest station groups as a launch platform. A further plus is the extra is a leading investor in iBlast Networks, a new company that uses the
revenue potential for programs that reach four seasons of production digital-television spectrum to distribute broadband content and services
via the sale of re-run rights. In 2000, Tribune Entertainment sold to consumers. iBlast has aggregated part of the spectrum from local
rights for 88 episodes of Gene Roddenberry’s Earth: Final Conflict to television stations in 246 markets covering 93 percent of the United
cable’s Sci-Fi Channel. States. The service represents a potential new revenue stream for
In February 2001, Tribune Entertainment announced the formation of Tribune television stations.
Tribune Studios. The project includes a complete renovation of the historic
In 2000, Tribune strengthened its position as one of
Publishing America’s premier newspaper publishers. The merger
with Times Mirror tripled our circulation and marketing
reach and doubled publishing revenues to more than
$4 billion annually. Tribune is now the nation’s second-
largest newspaper publisher measured by revenue
and operating cash flow, and third in total circulation.
11 market-leading newspapers
The addition of the Los Angeles Times, Newsday (New York), The Baltimore
Sun, The Hartford Courant and other former Times Mirror newspapers
significantly enhances Tribune’s network of major-market media assets.
The Times, Chicago Tribune and Newsday are each among the nation’s
10 largest metropolitan daily newspapers, giving us the scale and scope
to attract national advertising. In fact, our Los Angeles, Chicago and
New York papers have a combined daily circulation of 2.2 million —
a reach unmatched by The Wall Street Journal, USA Today or The New
York Times. For national advertisers, our circulation on a market-by-
market basis is even more compelling.
In 2000, we established Tribune Media Net to execute an aggressive
growth strategy in the national advertising segment. The group’s goal is
to boost national ad revenue for all Tribune newspapers and leverage
Tribune’s unique multimedia position in the nation’s top three markets.
Our message to national ad buyers is simple: Tribune can help you target
LEADING BRANDS Tribune’s daily newspapers are known for award-winning
journalism, multimedia reporting and technological innovation. They are read by
more than 9 million people on weekdays and 12 million on Sundays.
Newspaper Daily Sunday Primary Market(s)
Los Angeles Times 1,033,399 1,379,564 Southern California
Chicago Tribune 620,600** 1,007,236 Greater Chicagoland
Newsday 576,345 674,662 Long Island/Queens, N.Y.
The Baltimore Sun 315,306 471,387 Central Maryland
Orlando Sentinel 252,057 373,901 Central Florida
South Florida Sun-Sentinel 238,096 351,189 South Florida
The Hartford Courant 202,509 296,713 Greater Hartford/Connecticut
The Morning Call 127,175 170,744 Allentown, Pa./Lehigh Valley
Daily Press 93,174 114,376 Virginia Peninsula
The Advocate 28,499 35,654 Stamford, Conn./Fairfield County
Greenwich Time 12,384 13,810 Greenwich, Conn./Fairfield County
*ABC report for six-months ended 9/24/00 ** Wed.-Fri. average for the period was 661,699.
The new organization ensures that sales and marketing resources are
maximized as we grow this vital part of our business. Classified adver-
and 90 Pulitzers tising — primarily in the jobs, cars and real estate areas — accounts for
about 30 percent of Tribune Publishing’s revenue.
More and more advertisers are realizing the benefits of our “full-service”
classified model, where integrated solutions are offered using a combination
of the newspaper, the Web and niche publications. Initiatives in the
Chicago market illustrate this approach. In early 2001, the Chicago Tribune
upgraded its classified sections, adding more information for readers and
making the pages easier to use. A new section, “Working,” offers tips for
job searchers and points to the CareerBuilder area on chicagotribune.com.
Likewise, the newspaper’s twice weekly “Cars” section shares content
with the cars.com area online. Specialty publications like Auto Finder,
Job Finder and New Homes Guide round out our Chicago classified line,
making the Tribune a true one-stop shop for local advertisers.
Market-leading classifieds are only part of what readers find in
Tribune newspapers. They also get award-winning journalism packaged
with the most in-depth news and information available. Engaging content
a broad audience in the most critical markets, quickly and cost-effectively. is our daily mission, and we’re constantly changing to better inform
We can do it with newspapers alone, or with a combination of newspapers, and entertain readers. Our bureau in Havana, Cuba, opened in January
television and the Internet. 2001, exemplifies how we strive to deepen news coverage and address
Tribune Media Net generates revenue that is mostly incremental — important reader interests. The bureau will enhance content in all
sales that were not possible prior to the merger. Special sections that Tribune newspapers and benefit Tribune’s broadcast units as well.
share content and run in multiple markets are a key revenue driver. The The Times Mirror merger added two Spanish-language newspapers
sections offer national advertisers a common editorial platform and high to our publishing mix: La Opinión in Los Angeles and Hoy in New York.
readership — a great combination for those targeting a specialized audience. La Opinión, 50-percent-owned by Tribune, is the nation’s largest Spanish-
Tribune published three cross-market special sections in 2000: two language daily, reaching 600,000 readers every day. Hoy was launched by
explored technology themes and one previewed the holiday movie scene. Newsday in 1998 and already has a paid distribution of 54,000. Together
Capturing the majority of classified advertising revenues in our local with ¡Exito!, the Chicago Tribune’s free weekly, Tribune Publishing reaches
markets remains a top priority. With the Internet playing a greater role Hispanic readers in the nation’s top three markets. We are exploring
in the classified marketplace, our print and online strategies must be opportunities for national advertising sales and content sharing between
integrated, and our product development efforts accelerated. In 2000, all three publications in this high-growth market.
we created Tribune Classified Services to carry out both objectives.
Tribune Interactive operates leading news and information
Web sites in Tribune’s 23 local media markets, along
with other branded sites targeting specific communities of
interest. In 2000, we accelerated Tribune’s growth online,
advancing our goal to develop profitable businesses in
the new medium.
The Times Mirror merger gave a boost to our online efforts, elevating
Tribune to the top tier of local news, information and classified advertising
providers on the Web. Our sites attract approximately 5 million unique
visitors per month, placing us among the top 20 online news and infor-
mation networks in the country.
The content and promotion resources of Tribune newspapers and
television stations give Tribune Interactive a unique ability to deliver large
online audiences in the nation’s top three markets. Likewise, Tribune’s
strong local brands throughout the country and long-term relationships
with consumers and advertisers provide a distinct competitive advantage
as we build our interactive businesses.
Like most other Internet companies, Tribune Interactive experienced
growing pains in 2000. We responded aggressively, taking steps to scale
our online operations to revenue projections. Cost reductions will save
more than $15 million annually, which includes operating efficiencies
from a common online publishing platform being introduced in 2001.
The technology facilitates content sharing and national advertising sales
while allowing each of our sites to retain a unique design.
sites serving 23 U.S. markets
Tribune Interactive pro forma revenues were $48 million in 2000,
POPULAR SITES IN MAJOR MARKETS Tribune Interactive operates a national
up 41 percent from 1999. (Pro forma assumes the Times Mirror merger network of Web sites featuring in-depth news and information. The group’s high-traffic
occurred at the beginning of 1999.) Strong revenue growth is projected for newspaper sites are the foundation for current and future online success.
2001, and the group is targeting profitability by the second half of 2002.
Newspaper Sites Affiliation
We are keenly focused on applying our interactive resources to areas
that offer the greatest potential for hard dollar returns. In particular, that latimes.com Los Angeles Times
chicagotribune.com Chicago Tribune
means exploiting opportunities to speed revenue growth at our flagship
newsday.com Newsday, Long Island, N.Y.
newspaper Web sites. Our sites feature breaking news throughout the sunspot.net The Baltimore Sun
day and in-depth information not available elsewhere. In most of our sun-sentinel.com South Florida Sun-Sentinel
newspaper markets we also operate the leading online marketplaces for orlandosentinel.com Orlando Sentinel
jobs, cars and homes. ctnow.com The Hartford Courant
Classified advertising is our highest priority, accounting for nearly mcall.com The Morning Call, Allentown, Pa.
dailypress.com Daily Press, Newport News, Va.
70 percent of online revenues. We established Tribune Classified Services
stamfordadvocate.com The Advocate, Stamford, Conn.
in 2000 to further integrate our print and interactive classified operations greenwichtime.com Greenwich Time, Greenwich, Conn.
and to capture ad revenues moving from print to the Internet. In
addition, we reconfigured our newspaper Web sites to better showcase Specialty Sites (partial list) Description
classified content. blackvoices.com Leading online destination for African-Americans
We continue to utilize strategic partnerships with other newspaper recycler.com General classifieds site serving Southern California
publishers to build nationally-branded sites like cars.com — sites that chicagosports.com Multimedia site for local fans, launched in 2000
complement our own local sales efforts. In 2000, we greatly improved metromix.com Chicago’s No.1 online entertainment guide
go2orlando.com Travel guide for Central Florida
our position in the jobs category by partnering with Knight Ridder to
wb11.com Internet home of WPIX-TV, New York
acquire CareerBuilder, a national leader in online recruiting. Tribune
ktla.com Internet home of KTLA-TV, Los Angeles
newspaper sites now offer the full range of CareerBuilder services. wgntv.com Internet home of WGN-TV, Chicago
Targeting new audience segments with sites that “build community”
helps increase Tribune’s reach, locally and nationally, and helps develop new
revenue streams. In 2000, for example, we launched ChicagoSports.com, We also believe increasing bandwidth will play an important role in our
a site that taps Tribune’s Chicago-based print, broadcast and interactive interactive growth. High-speed broadband technology promises to make
resources to give local fans the richest possible online experience. Our the Internet more compelling for consumers and advertisers alike, and
most successful online community is BlackVoices.com, which recently Tribune’s vast multimedia capabilities position us well for the changing
entered a major strategic marketing alliance with General Motors. online environment. In fact, we are already partnering with AT&T’s cable
The wide-ranging agreement demonstrates our belief in the power of modem service in several of our most important markets, providing
the Internet as a medium for creative marketing solutions that go well customized multimedia content for distribution via PCs, digital cable
beyond standard banner-type advertisements. TV set-top boxes and wireless handheld devices.
Tribune invests strategically in areas that are important
to our businesses. As the pace of change quickens in
and other investments
the media industry, we aim to participate in emerging
technologies and business models that could shape
Tribune’s growth. Our primary investment vehicle is Tribune
Ventures, which partners with new-media companies that
have solid business plans and high growth potential.
The idea for Tribune Ventures originated in 1991 when Tribune acquired BUILDING PARTNERSHIPS Tribune Ventures invests in companies that have a strategic
a 10 percent stake in America Online. Our objective was to explore the connection with one or more Tribune business areas. Listed below are Ventures’ investments
made in 2000 or early 2001.
online services business in its formative stage. Over the years, partnering
with creative young companies like AOL (now AOL Time Warner) has Company Description
proven helpful in growing our own businesses. We gain an inside track DailyShopper retail promotion network
on new technologies, industries and business models. Dotcast datacasting over analog spectrum
Tribune Ventures is an active investor. We maximize the strategic Eppraisals.com online valuation for art, collectibles
benefits of our investments by forming operating relationships with Legacy.com online memorials and related services
our portfolio companies. For example, in 2000, Ventures invested in MarketResearch.com online market research sales
The Feedroom, a broadband news network, and agreed to license NextDoor Networks online services marketplace
the news video from Tribune’s television stations to their network. Performics online performance marketing services
The Feedroom, in turn, will develop customized, broadband-driven RespondTV interactive television enabler
Web sites for our stations that enhance their current online efforts. The FeedRoom broadband, interactive news network
The major areas of Tribune Ventures’ investment activity are: TrueAdvantage sales-lead services
Upoc wireless instant messaging service
I Internet-based media and electronic commerce
I digital and interactive television
I broadband infrastructure and services
to identify and help develop young businesses that can benefit from our
I online marketing services
team’s experience, time and attention. This has so far led to investments
I wireless applications and services
in Performics, Legacy.com, iExplore and Eppraisals.com.
The acquisition of The Times Mirror Company in 2000 heightened Tribune also has important strategic investments that are managed
Tribune’s national identity and strengthened our strategic leverage in outside of Tribune Ventures. In 2000, the company acquired a 46 percent
making venture investments. The merger also added new companies to stake in CareerBuilder Inc. — a leading provider of online recruitment
the Tribune Ventures portfolio, and extended our investment network on services for employers and job seekers — in partnership with
the West Coast through a stake in Rustic Canyon, a venture capital fund. KnightRidder.com. Tribune also is an equity partner in BrassRing Inc.,
Tribune Ventures further expanded in 2000 by opening a New York another recruitment services start-up, and Classified Ventures, a network
office and broadening its focus in Chicago to include seed-stage investing. of classified advertising Web sites that includes cars.com.
The Manhattan office facilitates our work with existing portfolio companies Tribune Broadcasting holds a 25 percent stake in The WB Television
on the East Coast, and enables us to focus more closely on new investment Network and, in the cable arena, owns 29 percent of TV Food Network and
opportunities in the region. Recent East Coast investments include 9 percent of The Golf Channel. We are also a lead investor in iBlast Networks,
MarketResearch.com and Upoc. In Chicago, our seed-stage initiative aims an early innovator in “datacasting” via the digital television spectrum.
Tribune in the Community
Tribune gives back to the communities we serve. Our busi-
nesses support a wide range of nonprofit organizations that
help people in need, and Tribune employees generously
donate their time, talent and money in these efforts.
Most of our business units participate in the communities program of reading issues and daily features, the program includes public and
the Robert R. McCormick Tribune Foundation. In-kind contributions private partnerships, as well as volunteer and community outreach.
from Tribune units help raise funds from the public, which are matched I Tribune television stations, working with BlackVoices.com, launched
by the Foundation. This enables our businesses to increase their impact
an innovative Black History Month initiative in 2001. The companywide
in the community. In 2000, charitable funds sponsored by Tribune
multimedia project honored African-Americans who are making history
businesses and supported by the Foundation awarded grants totaling
today through outstanding contributions to their local communities.
$41 million. Dollars are directed to agencies dedicated to helping
children, improving health care or alleviating homelessness and hunger.
I More than 300 Chicago-area Tribune employees, working with the
Tribune’s merger with Times Mirror expands our opportunities Chicago Park District and local residents, spent a full day last August
for community development. We’ll be an even greater contributor building a playground for the children of Englewood, an impoverished
in Southern California, where we operate KTLA-TV, Los Angeles; South Side neighborhood.
KSWB-TV, San Diego; and the Los Angeles Times. Likewise, our I The Orlando Sentinel, partnering with the YMCA, established a
newspaper/television combinations in New York and Hartford mentoring program in 2000 to foster development of Hispanic leaders
will help raise our support level in those communities. in the community. The program, with youth and adult components,
Throughout Tribune, the depth of our community service activities is modeled after Black Achievers, another Sentinel initiative.
and the range of causes we support are best shown by example:
I Newsday’s FutureCorps, founded in 1999, is the largest student public
I “Reading by 9” is an ongoing literacy program for kindergarten service project ever undertaken on Long Island and in Queens, N.Y. The
through third-grade classes administered by The Baltimore Sun and the program introduces students to volunteerism and demonstrates how
Los Angeles Times. Complemented by news coverage on early childhood they can bring about positive change.
Tribune Company and Subsidiaries
Management’s Responsibility for Financial Statements
Financial Statements Management is responsible for the preparation, integrity and fair presentation of the
Company’s consolidated financial statements and related financial information included in the Annual Report on
Form 10-K to shareholders. The consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States and necessarily include certain amounts that are based on
management’s best estimates and judgments.
The consolidated financial statements were audited by PricewaterhouseCoopers LLP, independent accountants.
PricewaterhouseCoopers LLP was given unrestricted access to all financial records and related data, including
minutes of all meetings of shareholders, the Board of Directors and committees of the Board. The Company believes
that all representations made to the independent accountants during their audits were valid and appropriate.
Internal Control System Management is also responsible for establishing and maintaining a system of internal
control, designed to provide reasonable assurance to the Company’s management and Board of Directors regarding
the preparation of reliable published financial statements. The system of internal controls is continually reviewed
for its effectiveness and is augmented by written policies and procedures, the careful selection and training of qualified
personnel and a program of internal audit. Each year, the Company’s independent accountants conduct a review of
internal accounting controls to the extent required by generally accepted auditing standards and perform such tests
and related procedures as they deem necessary to arrive at an opinion on the fairness of the financial statements.
The Audit Committee of the Board of Directors is responsible for reviewing and monitoring the Company’s
financial reporting and accounting practices. The Audit Committee consists of six independent directors. The
Committee meets with representatives of management, the independent accountants and internal auditors
to discuss financial reporting, accounting and internal control matters. PricewaterhouseCoopers LLP and the
internal auditors have direct access to the Audit Committee.
John W. Madigan Donald C. Grenesko
Chairman, President and Chief Executive Officer Senior Vice President/Finance and Administration
Report of Independent Accountants
To the Board of Directors and Shareholders of Tribune Company We have audited, in accordance
with auditing standards generally accepted in the United States of America, the consolidated balance sheets of
Tribune Company as of December 31, 2000 and December 26, 1999 and the related consolidated statements of
income, of cash flows and of shareholders’ equity for each of the three years in the period ended December 31, 2000
(not presented herein); and in our report dated January 26, 2001, we expressed an unqualified opinion on those
consolidated financial statements.
In our opinion, the information set forth in the accompanying condensed consolidated financial statements is fairly
stated, in all material respects, in relation to the consolidated financial statements from which it has been derived.
January 26, 2001
Tribune Company and Subsidiaries
Five Year Financial Summary
(in thousands of dollars, except per share data) 2000 1999 1998 1997 1996
Publishing $ 3,403,028 $1,559,192 $1,481,324 $ 1,423,947 $1,334,032
Broadcasting and Entertainment 1,465,553 1,302,058 1,153,006 1,057,529 876,750
Interactive 41,782 21,034 17,249 12,771 2,607
Total operating revenues $ 4,910,363 $2,882,284 $2,651,579 $ 2,494,247 $2,213,389
Publishing $ 700,932 $ 426,515 $ 398,846 $ 371,135 $ 304,844
Broadcasting and Entertainment 449,057 378,036 317,355 285,896 203,531
Interactive (52,606) (32,203) (21,709) (16,550) (13,587)
Corporate expenses (64,372) (39,506) (35,435) (34,426) (30,935)
Total operating profit 1,033,011 732,842 659,057 606,055 463,853
Net loss on equity investments (79,374) (40,083) (33,980) (34,696) (13,281)
Net interest expense (207,584) (65,595) (82,339) (60,159) (15,663)
Non-operating items and minority interest expense (165,301) 1,756,779 119,119 111,824 –
Income from Continuing Operations Before Income Taxes 580,752 2,383,943 661,857 623,024 434,909
Income taxes (270,351) (933,981) (272,660) (250,265) (175,071)
Income from Continuing Operations
Before Accounting Change 310,401 1,449,962 389,197 372,759 259,838
Discontinued Operations of Education Segment, net of tax (86,015) 21,807 25,075 20,866 22,912
Discontinued Operations of QUNO, net of tax – – – – 89,317
Cumulative effect of change in accounting principle (1) – (3,060) – – –
Net Income $ 224,386 $1,468,709 $ 414,272 $ 393,625 $ 372,067
Before non-operating items $ 1.40 $ 1.53 $ 1.27 $ 1.16 $ .96
Total 1.06 6.03 1.53 1.44 .98
Discontinued operations (.32) .09 .10 .09 .46
Cumulative effect of accounting change – (.01) – – –
Net income $ .74 $ 6.11 $ 1.63 $ 1.53 $ 1.44
Before non-operating items $ 1.30 $ 1.41 $ 1.17 $ 1.07 $ .89
Total .99 5.49 1.41 1.33 .91
Discontinued operations (.29) .08 .09 .07 .41
Cumulative effect of accounting change – (.01) – – –
Net income $ .70 $ 5.56 $ 1.50 $ 1.40 $ 1.32
Common dividends per share $ .40 $ .36 $ .34 $ .32 $ .30
Weighted average common shares outstanding (000’s) 271,951 237,367 242,428 245,758 245,684
Operating profit margin 21.0% 25.4% 24.9% 24.3% 21.0%
Debt to capital (3) 34% 37% 35% 41% 37%
Financial Position and Other Data
Total assets $14,676,212 $8,740,047 $5,824,037 $ 4,665,821 $3,629,151
Long-term debt (4) 4,007,041 2,694,073 1,615,955 1,520,646 979,754
Shareholders’ equity 5,885,916 3,458,617 2,356,617 1,826,004 1,539,506
Capital expenditures $ 302,471 $ 125,578 $ 128,800 $ 98,319 $ 87,171
This summary should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2000 Annual Report on Form 10-K.
(1) The cumulative effect of adopting a new accounting pronouncement for derivative instruments decreased net income by $3.1 million in 1999.
(2) Includes non-operating items as follows: loss on change in fair values of derivatives and related investments of $62.6 million and loss on sales of subsidiaries and investments, net of write-downs of
$30.5 million, totaling $93.1 million in 2000; gain on change in fair values of derivatives and related investments of $131.2 million, gain on reclassification of investments of $666.2 million, and gain
on sales of subsidiary and investments of $270.1 million, totaling $1.1 billion in 1999; gain on sales of subsidiary and investments, net of write-downs, totaling $63.5 million in 1998; gain on sales of
investments, net of write-downs, totaling $68.9 million in 1997; and equity income related to Qwest Broadcasting of $6.0 million in 1996.
(3) Capital comprises total debt, deferred taxes and shareholders’ equity.
(4) Long-term debt includes the PHONES in 2000 and 1999.