FitzSimons highlighted the achievements of the past 12 months following the Times Mirror integration, including the divestitures of non-strategic businesses yielding more than $2 billion after-tax, the repurchase of more than 27 million shares of Tribune stock, keeping debt at a conservative two-times cash flow and maintaining a strong ‘A’ bond rating.
With 22 television stations, 11 newspapers and more than 50 Web sites, Tribune now reaches more than 80 percent of the country, and is the only media company with television/newspaper combinations in the top three markets. This expanded national footprint puts Tribune in a position to generate about $175 million in incremental cash flow in 2001 by realizing $40 million from new revenues and reducing costs by $145 million.
Tribune has a 25 percent investment in The WB Television Network, which saw outstanding growth in the recently completed May sweeps. Ratings for adults 18-34 were up 18 percent and for adults 18-49 ratings increased 13 percent.
Tribune Interactive pro forma revenues are up about 30 percent year-to-date. The interactive division is growing classified revenues and managing costs in order to become profitable by the end of 2002.
Fuller noted that Tribune Publishing is responding to the economic downturn by accelerating cost containment. Steps taken include managing staffing levels through selective reductions, not filling open positions and outsourcing certain functions. In the first quarter of 2001, publishing cash expenses, other than newsprint, were down one percent.
Growth opportunities for Tribune Publishing include Tribune Media Net, which year-to-date has booked $14 million and is progressing towards its $40 million year-end goal. Another opportunity is the retail preprint advertising market. Tribune expects to improve preprint share in each of its 11 markets, with the greatest opportunity being Los Angeles. By increasing zoning capabilities, improving reliability and accuracy of delivery, Tribune Publishing expects about $75 million in new preprint revenue in Los Angeles and Chicago over the next several years.
Grenesko affirmed Tribune’s second quarter 2001 earnings per share guidance of about $.22 and cash EPS of $.40. Tribune is in the process of cutting expenses across the company and, in the first quarter, consolidated cash expenses were down three percent. The company is also reducing its workforce by three percent through a voluntary retirement program. The majority of the funding for this program will come from excess pension assets, and a restructuring charge will be taken mainly in the third quarter, with a small part in the second quarter.
