EXHIBIT 13
Tribune Company and Subsidiaries
MANAGEMENT'S DISCUSSION
AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following discussion presents the significant factors that have affected the
businesses of Tribune Company and its subsidiaries (the "Company") over the last
three years. This commentary should be read in conjunction with the Company's
consolidated financial statements and Eleven Year Financial Summary, which are
also presented in this annual report. Certain prior year amounts have been
restated to conform with the 1995 presentation.
SIGNIFICANT EVENTS AND TRENDS
................................................................................
In December 1995, the Company announced it had agreed to sell all of its
holdings in QUNO Corporation, a Canadian newsprint producer, as part of QUNO's
agreement to merge with Donohue Inc. Donohue will pay approximately C$30.50 per
common QUNO share. The transaction is subject to approval by QUNO's stockholders
and is scheduled to close in March 1996. Tribune owns approximately 34% of
QUNO's common stock plus $138.8 million in convertible debt. Upon conversion of
this debt, the Company's ownership of QUNO increases to 53%, or 19.2 million of
36.2 million common shares outstanding. The Company's gross proceeds from the
sale will be approximately US$425 million (C$585 million), consisting of US$285
million in cash, US$75 million in short-term notes and US$65 million in Donohue
common stock (5.6 million shares valued at C$17 per share). After-tax proceeds
will be approximately US$330 million. The Company will record an after-tax gain
of approximately $85 million upon completion of the transaction. The exact
amount of the proceeds received and the gain recorded will depend upon several
factors at the date the transaction is consummated, including the U.S./Canadian
dollar exchange rate and Donohue's stock price. The Company's consolidated
financial statements have been restated to reflect equity earnings from QUNO,
interest income from the QUNO convertible debenture and the 1994 gain on the
sale of QUNO common shares, net of income tax, as discontinued operations.
The Major League Baseball players' contract expired on December 31, 1993.
The Major League Baseball Players Association initiated a strike on August 12,
1994, and on August 28, 1994, the owners cancelled the remainder of the 1994
Major League Baseball season. In April 1995, the National Labor Relations Board
invalidated the owners' posted rules, and the players ended their strike. The
1995 baseball season began April 26, 1995. The strike shortened the 1995 season
by 18 games and continued to impact attendance throughout the season.
Negotiations for a new players' contract are continuing.
The North American newsprint industry has increased newsprint prices
several times since the beginning of 1994 due to higher demand for newsprint in
the U.S. and overseas. As a result, average newsprint transaction prices
increased 45% in 1995 over 1994. The higher newsprint prices increased newsprint
expense at the Company's newspapers by approximately $75 million in 1995. The
Company's publishing operations offset most of this increase through cost
controls, a decrease in newsprint consumption and revenue increases. Although
another 10% price increase has been announced for April 1996, there are
indications in the industry that this may be delayed. QUNO's operating results
in 1994 and 1995 benefited from the price increases.
35
RESULTS OF OPERATIONS
................................................................................
The Company's fiscal year ends on the last Sunday in December. Fiscal year 1995
comprised 53 weeks, while fiscal years 1994 and 1993 comprised 52 weeks. The
effect of the additional week in 1995 on the comparisons of the financial
statements taken as a whole is generally not significant.
ACQUISITIONS AND DISPOSITIONS
The Company has acquired eight businesses since the middle of 1993. In 1993, the
Company acquired Contemporary Books in July and Compton's NewMedia in September.
In 1994, the Company acquired The Wright Group in February, television station
WLVI-Boston in April and Farm Journal, Inc. in June. In 1995, the Company
purchased RELCON, Inc. in January, Jamestown Publishers, Inc. in May and
Everyday Learning Corporation in August. The results of these businesses have
been included in the consolidated financial statements since their dates of
acquisition. The Company has also made several equity investments, including TV
Food Network and Picture Network International in 1993 and The Warner Bros.
Television Network, Qwest Broadcasting LLC and Interealty in 1995. The Company's
share of these companies' results of operations has been included in the
consolidated financial statements since their investment date.
In December 1995, the Company sold its Compton's NewMedia subsidiary to
SoftKey International Inc. for $120.5 million of SoftKey common shares and a $3
million note and also invested $150 million in SoftKey convertible notes. These
transactions resulted in a pretax gain of $6.9 million and an after-tax gain of
$4.1 million, or $.06 per share on a primary basis. In July 1995, the Company
sold its California newspaper subsidiary, Times Advocate Company in Escondido,
for approximately $16 million in cash. The sale resulted in a pretax loss of
$7.5 million and an after-tax loss of $4.5 million, or $.07 per share. In March
1995, the Company sold shares of America Online common stock for approximately
$17 million. The sale resulted in a pretax gain of $15.3 million and an after-
tax gain of $9.1 million, or $.14 per share. In April 1994, the Company reduced
its ownership holdings in QUNO to 34% by selling 5.5 million shares of QUNO
common stock. The sale of the shares resulted in an after-tax gain in 1994 of
approximately $13 million, or $.19 per share.
CONSOLIDATED
The Company's consolidated financial results for 1995, 1994 and 1993 were as
follows:
Change
(Dollars in millions, except per share amounts) 1995 1994 1993 95-94 94-93
======================================================================================
Operating revenues $2,244 $2,112 $1,911 + 6% + 11%
Operating profit 405 396 356 + 2% + 11%
Dispositions of
subsidiary stock and investment 15 - - * -
Income from continuing operations 245 233 205 + 5% + 14%
Income (loss) from discontinued operations
of QUNO 33 9 (16) +268% *
Net income 278 242 189 + 15% + 28%
Before dispositions 269 229 189 + 18% + 21%
Primary net income per share
Continuing operations 3.50 3.19 2.80 + 10% + 14%
Discontinued operations .50 .13 (.24) +285% *
Total 4.00 3.32 2.56 + 20% + 30%
Before dispositions 3.87 3.13 2.56 + 24% + 22%
* Not meaningful
NET INCOME PER SHARE -- The 24% increase in 1995 primary net income per share
before dispositions was primarily due to strong results from QUNO, increased
television operating profit and a lower number of shares outstanding as a result
of stock repurchases during 1995. The 22% increase in 1994 primary net income
per share before dispositions was due to higher profits from all three of the
Company's business segments, lower equity losses from QUNO and lower net
interest expense. Average common shares outstanding decreased 4% in 1995 and
increased 1% in 1994.
36
OPERATING PROFIT AND REVENUES -- The following table shows consolidated
operating revenues, EBITDA (earnings before interest, taxes, depreciation and
amortization) and operating profit by business segment:
Change
(Dollars in millions) 1995 1994 1993 95-94 94-93
=============================================================================
Operating revenues
Publishing $1,312 $1,246 $1,163 + 5% + 7%
Broadcasting and Entertainment 829 764 727 + 8% + 5%
Education 103 102 21 + 1% +381%
- - -----------------------------------------------------------------------------
Total operating revenues $2,244 $2,112 $1,911 + 6% + 11%
- - -----------------------------------------------------------------------------
EBITDA
Publishing $ 344 $ 359 $ 318 - 4% + 13%
Broadcasting and Entertainment 198 168 161 + 18% + 4%
Education 13 10 4 + 33% +175%
Corporate expenses (29) (25) (24) - 18% - 4%
- - -----------------------------------------------------------------------------
Total EBITDA $ 526 $ 512 $ 459 + 3% + 12%
- - -----------------------------------------------------------------------------
Operating profit
Publishing $ 270 $ 287 $ 253 - 6% + 14%
Broadcasting and Entertainment 160 132 125 + 21% + 5%
Education 5 3 2 + 62% + 37%
Corporate expenses (30) (26) (24) - 15% - 7%
- - -----------------------------------------------------------------------------
Total operating profit $ 405 $ 396 $ 356 + 2% + 11%
- - -----------------------------------------------------------------------------
As shown above, consolidated 1995 operating revenues were up 6%, or $132
million, from 1994 and 1994 revenues increased 11%, or $201 million, from 1993,
with all three segments reporting gains in both 1995 and 1994.
Consolidated operating profit increased 2%, or $9 million, in 1995.
Publishing was down $17 million due primarily to higher newsprint prices, while
broadcasting and entertainment was up $28 million due mainly to higher
television profits. Consolidated 1995 EBITDA was up $14 million, or 3%, due
primarily to broadcasting and entertainment, which was up $30 million, or 18%.
Consolidated operating profit increased 11%, or $40 million, in 1994. Publishing
was up $34 million, and broadcasting and entertainment was up $7 million,
primarily due to increased advertising revenues. Consolidated 1994 EBITDA was up
$53 million, or 12%, due primarily to publishing, which was up $41 million.
OPERATING EXPENSES -- Consolidated operating expenses were as follows:
Change
(Dollars in millions) 1995 1994 1993 95-94 94-93
=============================================================================
Cost of sales $1,164 $1,059 $1,008 + 10% + 5%
Selling, general and administrative 554 542 444 + 2% + 22%
Depreciation and amortization
of intangible assets 121 115 103 + 5% + 12%
- - -----------------------------------------------------------------------------
Total operating expenses $1,839 $1,716 $1,555 + 7% + 10%
- - -----------------------------------------------------------------------------
The 10%, or $105 million, increase in cost of sales in 1995 was due primarily
to increased newsprint and ink expense and additional costs from six
acquisitions made since the beginning of 1994. Excluding the acquisitions, cost
of sales increased $82 million, or 8%. Newsprint and ink expense rose $67
million, or 36%, as average newsprint transaction prices increased 45%. The 5%
increase in cost of sales in 1994 was due primarily to the additional costs from
five acquisitions made since mid-1993, increased newsprint and ink expense and
increased compensation expense. Excluding the acquisitions, cost of sales
increased $14 million, or 1%, in 1994. Newsprint and ink expense was up $5
million, or 3%, and compensation expense was up $6 million, or 2%.
37
Selling, general and administrative expense increased 2%, or $12 million,
in 1995 mainly due to the acquisitions. Excluding the acquisitions, SG&A expense
remained virtually unchanged in 1995. SG&A expense increased 22% in 1994 from
1993, mainly due to the acquisitions. Excluding the acquisitions, SG&A expense
increased $35 million, or 8%, due primarily to increased compensation costs of
$12 million, or 6%, and increased sales costs of $8 million, or 15%. The
increase in depreciation and amortization of intangible assets in both 1995 and
1994 was principally due to the acquisitions and capital expenditures.
PUBLISHING
OPERATING PROFIT AND REVENUES -- The following table, which excludes Times
Advocate Company, presents publishing operating revenues, EBITDA and operating
profit for daily newspapers and other publications/services/development. The
latter category includes syndication of editorial products, advertising
placement services, niche publications, alternate delivery services, direct mail
operations, online/electronic products and, for EBITDA and operating profit,
equity losses from investments.
Change
(Dollars in millions) 1995 1994 1993 95-94 94-93
============================================================================================
Operating revenues
Daily newspapers $1,238 $1,176 $1,099 + 5% + 7%
Other publications/services/development 66 53 48 + 23% + 12%
- - --------------------------------------------------------------------------------------------
Total operating revenues $1,304 $1,229 $1,147 + 6% + 7%
- - --------------------------------------------------------------------------------------------
EBITDA
Daily newspapers $ 350 $ 368 $ 323 - 5% + 14%
Other publications/services/development (5) (7) (3) + 25% -121%
- - --------------------------------------------------------------------------------------------
Total EBITDA $ 345 $ 361 $ 320 - 4% + 13%
- - --------------------------------------------------------------------------------------------
Operating profit
Daily newspapers $ 281 $ 301 $ 262 - 7% + 15%
Other publications/services/development (9) (10) (6) + 6% - 85%
- - --------------------------------------------------------------------------------------------
Total operating profit $ 272 $ 291 $ 256 - 7% + 14%
- - --------------------------------------------------------------------------------------------
Publishing operating revenues, excluding Times Advocate, increased 6%, or
$75 million, in 1995 due principally to higher advertising revenues of 6%, or
$57 million. Operating revenues increased 7%, or $82 million, in 1994 due
primarily to increased advertising revenues of 10%, or $85 million. Including
Times Advocate, operating revenues were up 5% and 7% in 1995 and 1994,
respectively.
Operating profit for 1995, excluding Times Advocate, was down 7% to $272
million from $291 million in 1994 as gains in operating revenues were more than
offset by increased expenses that resulted primarily from significantly higher
newsprint prices. Publishing operating profit rose to $291 million in 1994, a
$35 million increase from 1993. This increase resulted from higher revenues,
partially offset by increased costs to support these revenues and higher
development expenditures. Including Times Advocate, operating profit declined 6%
in 1995 and rose 14% in 1994.
Daily newspaper operating margins, excluding Times Advocate, were 22.7% in
1995 compared to 25.6% in 1994 and 23.8% in 1993. The decline in 1995 was mainly
due to the significant increase in newsprint costs. The increase in 1994 was due
primarily to higher revenues.
38
Total publishing revenues by classification, excluding Times Advocate, were as
follows:
Change
(Dollars in millions) 1995 1994 1993 95-94 94-93
============================================================================================
Advertising
Retail $ 447 $ 430 $ 410 + 4% + 5%
General 130 135 120 - 3% + 12%
Classified 427 382 332 + 12% + 15%
- - --------------------------------------------------------------------------------------------
Total advertising 1,004 947 862 + 6% + 10%
Circulation 249 241 244 + 3% - 1%
Other 51 41 41 + 26% + 3%
- - --------------------------------------------------------------------------------------------
Total revenues $1,304 $1,229 $1,147 + 6% + 7%
- - --------------------------------------------------------------------------------------------
Advertising revenues in 1995 increased largely due to rate increases.
Retail advertising revenues increased due primarily to improvements in the
general merchandise category in Chicago. Classified advertising revenues rose
12% as a result of increased help wanted advertising at all of the newspapers
and increased real estate advertising in Chicago and Fort Lauderdale. General
advertising was down 3% in 1995 due to decreased transportation advertising in
Chicago and Fort Lauderdale.
All of the Company's newspapers reported improvements in each of the three
advertising categories in 1994 due to both linage and advertising rate
increases. The 5% rise in retail advertising revenues was due to increases in
the department store and food and drug categories at all of the newspapers.
General advertising revenues climbed 12% due to higher advertising in the
transportation and media categories. Classified advertising revenues rose 15%
due to increases in help wanted, automotive and real estate advertising.
The following table presents advertising linage for 1995, 1994 and 1993,
excluding Times Advocate:
Change
(Inches in thousands) 1995 1994 1993 95-94 94-93
============================================================================================
Full run
Retail 3,930 4,147 4,008 - 5% + 3%
General 695 703 630 - 1% + 12%
Classified 6,525 6,484 6,006 + 1% + 8%
- - --------------------------------------------------------------------------------------------
Total full run 11,150 11,334 10,644 - 2% + 6%
Part run 9,743 9,995 9,361 - 3% + 7%
Preprint 8,765 8,400 7,587 + 4% + 11%
- - --------------------------------------------------------------------------------------------
Total inches 29,658 29,729 27,592 - + 8%
- - --------------------------------------------------------------------------------------------
Total advertising linage in 1995, excluding Times Advocate, was virtually
unchanged from 1994. Full run retail advertising linage was down at all four of
the newspapers. Part run advertising linage was down 3% in 1995 due primarily to
decreases at Orlando in both retail and classified. Preprint advertising linage
increased 4% in 1995 due in part to a new large customer in Chicago. The 1994
increases in all categories reflected improved economic conditions in most of
the Company's major markets. Preprint linage also benefited from an increase in
the number of advertising zones offered by the Company's newspapers. Increased
zones enable advertisers to target special market areas for their
advertisements.
Circulation revenues, excluding Times Advocate, increased 3% in 1995 due
primarily to selective price increases and decreased 1% in 1994 due to declining
copies. Total average daily circulation, excluding Times Advocate, was down
slightly in 1995 to 1,314,000 from 1,318,000 in 1994, and total average Sunday
circulation also was down slightly to 1,970,000 in 1995 from 1,973,000 in 1994.
Total average daily circulation decreased 1% in 1994 to 1,318,000 copies from
1,335,000 copies in 1993, while total average Sunday circulation decreased 1% to
1,973,000 in 1994 from 1,987,000 copies in 1993.
Other revenues are derived from advertising placement services; the
syndication of columns, features, information and comics to newspapers;
commercial printing operations; direct mail operations; and other publishing-
related activities. Excluding Times Advocate,
39
the 1995 increase in other revenues resulted primarily from higher advertising
placement services and from the addition of RELCON, Inc., acquired in January
1995. The increase in 1994 resulted primarily from higher revenues generated by
advertising placement services.
OPERATING EXPENSES -- Publishing operating expenses increased 9% in 1995 and 5%
in 1994. Excluding Times Advocate, operating expenses increased 10%, or $94
million, in 1995. Newsprint and ink expense rose $69 million, or 37%, as average
newsprint selling prices increased 45%. Newsprint consumption declined 5% in
1995 mainly due to lower full run and part run linage and to actions at the
newspapers to reduce newsprint usage. Compensation costs rose $18 million, or
5%, with full-time equivalent employees down slightly from 1994.
Publishing operating expenses, excluding Times Advocate, increased $47
million, or 5%, in 1994 due to higher compensation, circulation, depreciation
and amortization, and newsprint and ink expenses. Compensation costs rose $16
million, or 5%, with full-time equivalent employees unchanged from 1993.
Circulation costs rose $2 million, or 2%, in 1994 primarily due to higher
expenses for expanded total market coverage in Chicago. Depreciation and
amortization expense increased $6 million, or 10%, due principally to capital
expenditures. Newsprint and ink expense increased $5 million, or 3%, in 1994.
Newsprint consumption increased 9%, while the average cost of newsprint consumed
declined 5% due to lower average newsprint selling prices. Newsprint prices
declined in the first half of 1994 and then increased in the second half.
BROADCASTING AND ENTERTAINMENT
OPERATING PROFIT AND REVENUES -- The following table presents operating
revenues, EBITDA and operating profit for television, radio,
entertainment/Chicago Cubs and cable programming/development. Cable
programming/development includes CLTV News (a regional news cable channel) and,
for EBITDA and operating profit, the Company's equity losses from The WB Network
and TV Food Network.
Change
(Dollars in millions) 1995 1994 1993 95-94 94-93
============================================================================================
Operating revenues
Television $ 630 $ 599 $ 537 + 5% + 12%
Radio 88 69 59 + 29% + 17%
Entertainment/Chicago Cubs 104 92 130 + 13% - 29%
Cable Programming/Development 7 4 1 + 51% +190%
- - --------------------------------------------------------------------------------------------
Total operating revenues $ 829 $ 764 $ 727 + 8% + 5%
- - --------------------------------------------------------------------------------------------
EBITDA
Television $ 215 $ 189 $ 147 + 14% + 29%
Radio 15 13 14 + 15% - 5%
Entertainment/Chicago Cubs (17) (24) 9 + 29% -375%
Cable Programming/Development (15) (10) (9) - 42% - 23%
- - --------------------------------------------------------------------------------------------
Total EBITDA $ 198 $ 168 $ 161 + 18% + 4%
- - --------------------------------------------------------------------------------------------
Operating profit
Television $ 186 $ 162 $ 120 + 15% + 35%
Radio 11 10 11 + 16% - 10%
Entertainment/Chicago Cubs (21) (28) 4 + 25% -795%
Cable Programming/Development (16) (12) (10) - 39% - 20%
- - --------------------------------------------------------------------------------------------
Total operating profit $ 160 $ 132 $ 125 + 21% + 5%
- - --------------------------------------------------------------------------------------------
Broadcasting and entertainment revenues increased 8%, or $65 million, in
1995 from $764 million in 1994. Television revenues were up 5%, or $31 million,
with strong growth at all of the Company's stations except KTLA-Los Angeles and
KWGN-Denver, which declined from 1994 due to soft advertising markets. The
largest increases were reported by WGN-Chicago, WPIX-New York and WPHL-
Philadelphia. Television revenues include those of WLVI-Boston, acquired in
April 1994. Excluding WLVI-Boston, television revenues were up 4%, or $25
million, in 1995. Radio revenues include those of Farm Journal Inc., acquired in
June 1994. Excluding Farm Journal, radio revenues were up 4%. Entertainment/
Chicago Cubs revenues were up 13% in 1995 as a result of higher
Cubs revenues and more shows in syndication. Cubs revenues in 1994 and 1995 were
impacted
40
by the Major League Baseball strike that began August 12, 1994 and cancelled the
remainder of the 1994 season. The strike also shortened the 1995 baseball season
by 18 games and continued to impact attendance throughout the season.
Broadcasting and entertainment revenues increased 5%, or $37 million, in
1994 due to a 12%, or $62 million, increase in television revenues, partially
offset by a $38 million decrease in revenues from entertainment/Chicago Cubs.
Television revenues were up at all of the Company's stations in 1994, with the
largest increases reported by WPIX-New York, KTLA-Los Angeles and WGN-Chicago.
Excluding WLVI-Boston, television revenues were up 7%, or $36 million, in 1994.
Excluding Farm Journal, radio revenues were up 1%. Entertainment/Chicago Cubs
revenues were down 29% as a result of the baseball strike and fewer shows in
syndication. Revenues of approximately $30 million were lost due to the strike,
mostly from the Chicago Cubs.
Operating profit was up 21%, or $28 million, in 1995 to a record $160
million due primarily to a 15%, or $24 million, increase in television and a
25%, or $7 million, improvement in entertainment/Chicago Cubs. Entertainment
results in 1994 were significantly impacted by programming and development costs
recorded for "The Road," a program cancelled in 1995. These improvements were
partially offset by equity losses from the Company's recent investment in The WB
Network.
Operating profit was up 5% in 1994 to $132 million due primarily to a 35%,
or $42 million, increase in television operating profit. The segment's operating
profit was reduced by an estimated $40 million loss resulting from the combined
impact of the baseball strike and significant development and programming
expenses for "The Road," CLTV News and TV Food Network.
OPERATING EXPENSES -- Broadcasting and entertainment operating expenses
increased 6%, or $37 million, in 1995 due primarily to the 1994 acquisitions of
Farm Journal and WLVI-Boston, equity losses from The WB Network, and increased
Chicago Cubs expenses as more games were played in 1995. These increases were
partially offset by a reduction in programming and development costs for "The
Road." Excluding WLVI-Boston, Farm Journal and the Cubs, total operating
expenses for the group were up $7 million, or 1%.
Expenses for the group increased 5%, or $30 million, in 1994 due
principally to the two 1994 acquisitions and programming and development costs
for "The Road" and TV Food Network. These increases were partially offset by the
expense savings associated with the baseball strike. Excluding WLVI-Boston, Farm
Journal and the Cubs, total operating expenses for the group were up 6%, or $33
million, as a result of the programming and development costs for "The Road" and
TV Food Network and higher compensation costs. Compensation costs rose 8%, or
$10 million, due to higher benefits and normal wage increases.
EDUCATION
OPERATING PROFIT AND REVENUES -- The following table presents operating
revenues, EBITDA and operating profit for the Company's education segment. This
segment consists of the following businesses--Contemporary Books, acquired in
July 1993; Compton's, acquired in September 1993 and sold in December 1995; The
Wright Group, acquired in February 1994; Jamestown Publishers, acquired in May
1995; and Everyday Learning, acquired in August 1995.
Change
(Dollars in millions) 1995 1994 1993 95-94 94-93
============================================================================================
Operating revenues $ 103 $ 102 $ 21 + 1% +381%
EBITDA 13 10 4 + 33% +175%
Operating profit 5 3 2 + 62% + 37%
Education revenues are derived from publishing supplemental education and
adult education materials, trade books and multimedia products. The multimedia
products were sold primarily by Compton's, which was sold in 1995. Education
operating revenues in 1995 increased 1% to $103 million from $102 million in
1994. Excluding Compton's, operating revenues were up 29% to $77 million in 1995
from $59 million in 1994. This increase was due to growth at both The Wright
Group and Contemporary Books and to the acquisitions of Jamestown and Everyday
Learning. Excluding Compton's, Jamestown and Everyday Learning, revenues were up
22% in 1995.
Education operating profit increased 62%, or $2 million, in 1995 to $5
million. Excluding Compton's $12 million operating loss in 1995 and $11 million
operating loss in 1994, operating profit was up 21% to $17 million and EBITDA
increased 21% to $22 million in 1995. The increases were due to improvements at
The Wright Group and Contemporary Books, offset partially by losses at Everyday
Learning. Everyday Learning's revenues are highly seasonal and substantially all
of its profits are earned in the summer months, which was prior to its
acquisition by the Company. Excluding Compton's, 1993 revenues for the education
group were $8 million and operating profit was $1 million.
OPERATING EXPENSES -- Education expenses were $98 million in 1995 and $99
million in 1994. Excluding Compton's, operating expenses were up 32% to $60
million in 1995
41
from $46 million in 1994 due mainly to higher sales volume and the acquisitions
of The Wright Group in 1994 and Everyday Learning in 1995.
DISCONTINUED OPERATIONS
(QUNO CORPORATION)
Income from discontinued operations of QUNO in 1995 was $32.7 million, or $.50
per share compared with $8.9 million, or $.13 per share, in 1994. Excluding the
$13 million gain on the April 1994 QUNO stock sale, there was a loss from
discontinued operations of $4.1 million, or $.06 per share in 1994. The
improvement in 1995 was mainly due to increased newsprint prices and higher
sales volume. QUNO's average newsprint selling prices increased 47% in 1995, and
newsprint shipments were up 6%.
The 1994 loss from discontinued operations of $4.1 million, before the $13
million stock sale gain, compared to a 1993 loss of $16.0 million. The 1993 loss
from discontinued operations reduced primary net income per share by $.24. The
improvement in 1994 was the result of increased newsprint shipments and the
absence of a one-time $13 million pretax charge recorded by QUNO in 1993 for the
closure of a pulping operation. QUNO's newsprint shipments in 1994 were up 6%,
while average newsprint selling prices were down 1%.
INTEREST INCOME AND EXPENSE
The components of net interest expense were as follows:
Change
(Dollars in millions) 1995 1994 1993 95-94 94-93
============================================================================================
Interest income $ 14 $ 16 $ 15 - 8% + 5%
Interest expense (21) (21) (25) + 6% - 17%
- - --------------------------------------------------------------------------------------------
Net interest expense $ (7) $ (5) $ (10) + 54% - 50%
- - --------------------------------------------------------------------------------------------
Interest income consists primarily of interest on a mortgage note
receivable from a real estate affiliate and short-term marketable securities.
Interest expense increased 6% in 1995 due to higher average debt levels. Average
debt levels increased approximately $13 million in 1995 to $501 million.
Outstanding debt increased to $786 million at year-end 1995 from $439 million at
the end of 1994. Interest expense decreased 17% in 1994 to $21 million due to
lower average debt levels. Average debt levels declined approximately $97
million in 1994 to $488 million. Outstanding debt dropped to $439 million at
year-end 1994 from $537 million at the end of 1993.
LIQUIDITY AND CAPITAL RESOURCES
................................................................................
Cash flow generated from operations is the Company's primary source of
liquidity. Net cash provided by operations was $394 million in 1995 and $369
million in 1994. 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 or stock.
Net cash used for investments totaled $393 million in 1995 as the Company
spent $312 million for acquisitions and investments. In 1995, the Company
invested $150 million in SoftKey International Inc. and $70 million in Qwest
Broadcasting LLC and capital spending totaled $118 million. The Company received
$33 million in 1995 from the Times Advocate and America Online common stock
sales.
In 1995, financing proceeds from the issuance of long-term debt and the
sale of stock to employees were offset by dividends, purchases of treasury stock
and repayments of long-term debt. In 1995, the Company issued $180 million of
medium-term notes with an average interest rate of 6.4% and repurchased 5.2
million shares of its common stock for $315 million. In December 1995, the Board
of Directors authorized the Company to acquire an additional 5 million shares.
Dividends on common and preferred shares were $91 million in 1995. Dividends on
common stock increased 8% in 1995 to $1.12 per share. At December 31, 1995, the
Company had commercial paper outstanding of $209 million with a weighted average
interest rate of 5.7%. The Company has revolving credit agreements with banks in
the aggregate amount of $480 million that extend to December 31, 1999. These
agreements are fully available to support the issuance of commercial paper.
In the first half of 1996, the Company expects to acquire four businesses
for a total of approximately $455 million. These consist of television stations
in Houston and San Diego and two education publishers. See note 3 to the
consolidated financial statements. The Company's sale of its QUNO holdings is
expected to be completed in March 1996. The Company currently expects to use the
after-tax proceeds of approximately $330 million from the sale to reduce
commercial paper outstanding and provide funding for share repurchases and
acquisitions.
Capital spending for 1996 is expected to total approximately $130 million
for a variety of normal replacement projects, as well as for pagination systems
at each of the newspapers and the relocation and renovation of facilities at
several broadcasting business units.
42
Tribune Company and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of dollars, except per share data) Year Ended Dec. 31, 1995 Dec. 25, 1994 Dec. 26, 1993
====================================================================================================================================
OPERATING Publishing
REVENUES Advertising $1,010,782 $ 961,694 $ 876,327
Circulation 249,860 242,993 246,178
Other 52,125 41,690 40,611
-----------------------------------------------------------------------------------------------------------------
Total 1,312,767 1,246,377 1,163,116
Broadcasting and Entertainment 828,806 764,197 727,213
Education 103,101 102,082 21,209
-----------------------------------------------------------------------------------------------------------------
Total operating revenues 2,244,674 2,112,656 1,911,538
- - ------------------------------------------------------------------------------------------------------------------------------------
OPERATING Cost of sales (exclusive of items shown below) 1,164,609 1,059,306 1,007,902
EXPENSES Selling, general and administrative 553,868 541,350 444,471
Depreciation and amortization of intangible assets 120,986 115,375 102,762
-----------------------------------------------------------------------------------------------------------------
Total operating expenses 1,839,463 1,716,031 1,555,135
- - ------------------------------------------------------------------------------------------------------------------------------------
OPERATING PROFIT 405,211 396,625 356,403
Dispositions of subsidiary stock and investment 14,672 - -
Interest income 14,465 15,807 15,115
Interest expense (21,814) (20,585) (24,660)
- - ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 412,534 391,847 346,858
Income taxes (167,076) (158,698) (142,212)
- - ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS 245,458 233,149 204,646
INCOME (LOSS) FROM DISCONTINUED OPERATIONS OF QUNO 32,707 8,898 (16,040)
- - ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME 278,165 242,047 188,606
Preferred dividends, net of tax (18,841) (18,574) (18,439)
- - ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME ATTRIBUTABLE TO COMMON SHARES $ 259,324 $ 223,473 $ 170,167
- - ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME PER SHARE
Primary: Continuing operations $ 3.50 $ 3.19 $ 2.80
Discontinued operations .50 .13 (.24)
-----------------------------------------------------------------------------------------------------------------
Net income $ 4.00 $ 3.32 $ 2.56
-----------------------------------------------------------------------------------------------------------------
Fully Diluted: Continuing operations $ 3.22 $ 2.95 $ 2.58
Discontinued operations .46 .12 (.22)
-----------------------------------------------------------------------------------------------------------------
Net income $ 3.68 $ 3.07 $ 2.36
-----------------------------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.
43
CONSOLIDATED BALANCE SHEETS
Assets (In thousands of dollars, except share data) Dec. 31, 1995 Dec. 25, 1994
=============================================================================================================================
CURRENT ASSETS Cash and short-term investments $ 22,899 $ 21,824
Accounts receivable (less allowances of $30,154 and $33,998) 296,363 313,316
Inventories 45,348 33,488
Broadcast rights 163,339 155,754
Prepaid expenses and other 17,651 19,162
----------------------------------------------------------------------------------------------------------
Total current assets 545,600 543,544
- - -----------------------------------------------------------------------------------------------------------------------------
INVESTMENT IN AND ADVANCES TO QUNO (see Note 2) 356,925 265,818
- - -----------------------------------------------------------------------------------------------------------------------------
PROPERTIES Machinery, equipment and furniture 886,601 849,188
Buildings and land and leasehold improvements 355,369 361,280
----------------------------------------------------------------------------------------------------------
1,241,970 1,210,468
Accumulated depreciation (725,995) (675,684)
----------------------------------------------------------------------------------------------------------
515,975 534,784
Land 55,849 60,984
Construction in progress 68,922 45,263
----------------------------------------------------------------------------------------------------------
Net properties 640,746 641,031
- - -----------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS Broadcast rights 194,038 195,535
Intangible assets (less accumulated amortization of $197,090 and $182,982) 795,856 834,596
Investments 549,735 96,412
Mortgage note receivable from affiliate 82,599 83,314
Other 122,756 125,575
----------------------------------------------------------------------------------------------------------
Total other assets 1,744,984 1,335,432
----------------------------------------------------------------------------------------------------------
Total assets $3,288,255 $2,785,825
----------------------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.
44
Tribune Company and Subsidiaries
Liabilities and Shareholders' Equity Dec. 31, 1995 Dec. 25, 1994
=============================================================================================================================
CURRENT Long-term debt due within one year $ 28,665 $ 27,598
LIABILITIES Accounts payable 112,357 118,642
Employee compensation and benefits 107,755 101,033
Contracts payable for broadcast rights 164,443 145,026
Deferred income 43,961 35,766
Income taxes 8,401 19,291
Accrued liabilities 91,571 82,330
----------------------------------------------------------------------------------------------------------
Total current liabilities 557,153 529,686
- - -----------------------------------------------------------------------------------------------------------------------------
LONG-TERM DEBT (less portions due within one year) 757,437 411,200
- - -----------------------------------------------------------------------------------------------------------------------------
OTHER Deferred income taxes 223,756 149,521
NON-CURRENT Contracts payable for broadcast rights 225,771 218,102
LIABILITIES Compensation and other obligations 144,229 144,336
----------------------------------------------------------------------------------------------------------
Total other non-current liabilities 593,756 511,959
- - -----------------------------------------------------------------------------------------------------------------------------
COMMITMENTS (see Note 10) - -
- - -----------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' Series B convertible preferred stock (without par value)
EQUITY Authorized: 1,600,000 shares
Issued and outstanding: 1,471,795 in 1995
and 1,502,573 shares in 1994 (liquidation value $220 per share) 322,540 329,286
Common stock (without par value)
Authorized: 400,000,000 shares; 81,771,658 shares issued 1,018 1,018
Additional paid-in capital 126,796 112,624
Retained earnings 1,930,380 1,743,417
Treasury stock (at cost)
19,219,809 shares in 1995 and 15,070,216 shares in 1994 (923,828) (636,561)
Unearned compensation related to ESOP (247,281) (274,101)
Cumulative translation adjustment (see Note 2) (19,188) (20,675)
Unrealized gain on investments 189,472 77,972
----------------------------------------------------------------------------------------------------------
Total shareholders' equity 1,379,909 1,332,980
----------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $3,288,255 $2,785,825
----------------------------------------------------------------------------------------------------------
45
Tribune Company and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars) Dec. 31, 1995 Dec. 25, 1994 Dec. 26, 1993
=============================================================================================================
OPERATIONS Net income $ 278,165 $ 242,047 $ 188,606
Adjustments to reconcile net income to net
cash provided by operations:
(Income) loss from discontinued operations
of QUNO, net of tax (32,707) (8,898) 16,040
Dispositions of subsidiary stock and
investment (14,672) - -
Depreciation and amortization of intangible
assets 120,986 115,375 102,762
(Increase) decrease in working capital items
excluding effects from acquisitions:
Accounts receivable 20,455 (18,999) (27,311)
Inventories, prepaid expenses and other
current assets (15,585) (593) (4,288)
Accounts payable, employee compensation
and benefits, deferred income and
accrued liabilities 10,678 37,655 (11,166)
Income taxes (13,939) (36,457) (3,775)
Decrease in broadcast rights net of
current and long-term contracts payable 20,998 20,319 28,959
Other, net 19,288 18,338 12,131
---------------------------------------------------------------------------------------------
Net cash provided by operations 393,667 368,787 301,958
- - -----------------------------------------------------------------------------------------------------------
INVESTMENTS Capital expenditures (117,863) (91,626) (75,620)
Acquisitions (excluding $18.5 million of
stock issued in 1993) (39,817) (138,477) (98,918)
Investments (271,939) (24,186) (45,908)
Proceeds from dispositions of subsidiary
stock and investment 32,729 - -
Proceeds from sale of QUNO stock - 94,936 -
Repayment of note receivable from QUNO - - 179,846
Other, net 4,291 (12,039) (13,852)
--------------------------------------------------------------------------------------------
Net cash used for investments (392,599) (171,392) (54,452)
- - ----------------------------------------------------------------------------------------------------------
FINANCING Proceeds from issuance of long-term debt 383,876 - 78,050
Repayments of long-term debt (12,826) (77,100) (283,968)
Sale of common stock to employees, net 40,794 20,410 46,138
Purchase of treasury stock (314,667) (49,080) -
Dividends (91,202) (88,325) (81,927)
Redemption of preferred stock (5,968) - (4,043)
-------------------------------------------------------------------------------------------
Net cash provided by (used for) financing 7 (194,095) (245,750)
- - ---------------------------------------------------------------------------------------------------------
NET INCREASE IN CASH AND SHORT-TERM INVESTMENTS 1,075 3,300 1,756
Cash and short-term investments at the
beginning of year 21,824 18,524 16,768
-------------------------------------------------------------------------------------------
Cash and short-term investments at the end
of year $ 22,899 $ 21,824 $ 18,524
- - ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL Cash paid for:
CASH FLOW Interest (net of amounts capitalized) $ 20,646 $ 20,957 $ 28,015
INFORMATION Income taxes $ 165,675 $ 175,965 $ 121,727
-------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.
46
Tribune Company and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Common Treasury Stock
Series B Stock and -------------------
Convertible Additional Unearned Cumulative Unrealized
(In thousands, Preferred Paid-In Retained Amount Compensation Translation Gain on
except per share data) Stock Capital(1) Earnings Shares -at cost (ESOP) Adjustment Investments Total
===================================================================================================================================
BALANCE AT DECEMBER 27, 1992 $340,634 $101,463 $1,483,016 (16,292) $(667,668) $(321,690) $(23,866) - $ 911,889
- - -----------------------------------------------------------------------------------------------------------------------------------
Net income 188,606 188,606
Translation adjustment (6,270) (6,270)
Redemptions of convertible
preferred stock (5,102) 228 20 831 (4,043)
Dividends declared
Common-$.96/share (63,799) (63,799)
Preferred-$17.05/share (26,104) (26,104)
Tax benefit on dividends
paid to the ESOP(2) 7,976 7,976
Repayment of ESOP debt 22,721 22,721
Shares issued under option
and stock plans 908 1,225 50,171 51,079
Stock tendered as payment
for options exercised (92) (4,941) (4,941)
Shares issued for
Contemporary Books
acquisition 4,238 348 14,275 18,513
- - -----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 26, 1993 335,532 106,837 1,589,695 (14,791) (607,332) (298,969) (30,136) - 1,095,627
- - -----------------------------------------------------------------------------------------------------------------------------------
Net income 242,047 242,047
Translation adjustment(3) 9,461 9,461
Unrealized gain on
investments 77,972 77,972
Redemptions of convertible
preferred stock (6,246) 1,589 114 4,657 -
Dividends declared
Common-$1.04/share (69,907) (69,907)
Preferred-$17.05/share (25,619) (25,619)
Tax benefit on dividends
paid to the ESOP(2) 7,201 7,201
Repayment of ESOP debt 24,868 24,868
Purchase of treasury stock (947) (49,080) (49,080)
Shares issued under option
and stock plans 5,216 903 36,467 41,683
Stock tendered as payment
for options exercised (349) (21,273) (21,273)
- - -----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 25, 1994 329,286 113,642 1,743,417 (15,070) (636,561) (274,101) (20,675) 77,972 1,332,980
- - -----------------------------------------------------------------------------------------------------------------------------------
Net income 278,165 278,165
Translation adjustment 1,487 1,487
Unrealized gain on
investments 111,500 111,500
Redemptions of convertible
preferred stock (6,746) 171 14 607 (5,968)
Dividends declared
Common-$1.12/share (72,524) (72,524)
Preferred-$17.05/share (25,094) (25,094)
Tax benefit on dividends
paid to the ESOP(2) 6,416 6,416
Repayment of ESOP debt 26,820 26,820
Purchase of treasury stock (5,189) (314,667) (314,667)
Shares issued under option
and stock plans 14,001 1,968 86,018 100,019
Stock tendered as payment
for options exercised (943) (59,225) (59,225)
- - -----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1995 $322,540 $127,814 $1,930,380 (19,220) $(923,828) $(247,281) $(19,188) $189,472 $1,379,909
- - -----------------------------------------------------------------------------------------------------------------------------------
(1) Issued shares of common stock totaled 81,771,658 for all dates presented.
(2) Excludes the tax benefit on allocated preferred shares held by the ESOP,
which is credited to income tax expense.
(3) Includes a $14.3 million write-off of the cumulative translation adjustment
related to the sale of QUNO common stock in April 1994.
See Notes to Consolidated Financial Statements.
47
Tribune Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The significant accounting policies of Tribune Company and subsidiaries (the
"Company"), as summarized below, conform with generally accepted accounting
principles and reflect practices appropriate to the businesses in which they
operate. The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of management's estimates.
Certain prior year amounts have been reclassified to conform with the 1995
presentation.
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
................................................................................
FISCAL YEAR -- The Company's fiscal year ends on the last Sunday in December.
Fiscal year 1995 comprised 53 weeks. Fiscal years 1994 and 1993 comprised 52
weeks.
PRINCIPLES OF CONSOLIDATION -- The consolidated financial statements include the
accounts of Tribune Company and all majority-owned subsidiaries. Investments
comprising 20 to 50 percent of the voting stock of companies and joint ventures
are accounted for using the equity method. All other investments are generally
accounted for using the cost method. All significant intercompany transactions
are eliminated.
SHORT-TERM INVESTMENTS -- Short-term investments are stated at cost, which
approximates market value. For purposes of the consolidated statements of cash
flows, investments with maturities of three months or less at the time of
purchase are considered to be cash equivalents.
INVENTORIES -- Inventories are stated at the lower of cost or market. Cost is
determined on the last-in, first-out ("LIFO") basis for newsprint and on the
first-in, first-out ("FIFO") or average basis for all other inventories.
BROADCAST RIGHTS -- Broadcast rights consist principally of rights to broadcast
syndicated programs, sports and feature films and are stated at the lower of
cost or estimated net realizable value. The total cost of these rights is
recorded as an asset and a liability when the program becomes available for
broadcast. Broadcast rights that have limited showings are generally amortized
using an accelerated method as programs are aired. Those with unlimited showings
are amortized on a straight-line basis over the contract period. The current
portion of broadcast rights represents those rights available for broadcast that
are expected to be amortized in the succeeding year.
PROPERTIES -- Property, plant and equipment are stated at cost. Depreciation is
computed using the straight-line method over the properties' estimated useful
lives, ranging from 3 to 40 years.
INTANGIBLE ASSETS -- Intangible assets primarily represent the excess of cost
over the fair market value of tangible net assets acquired. The excess cost
related to net assets acquired since 1971 is being amortized on a straight-line
basis over various periods ranging from 3 to 40 years, with the majority being
amortized over 40 years. Intangible assets of $23.5 million related to pre-1971
acquisitions are not being amortized as the Company believes there has been no
diminution of value. The Company evaluates the carrying value of intangibles
periodically in relation to the projected future undiscounted cash flows of the
related businesses.
PENSION PLANS -- The Company contributes to pension plans that provide
retirement benefits for substantially all employees. These plans are sponsored
either by the Company or by unions. Under the Company-sponsored plans, pension
benefits are primarily a function of both the years of service and the level of
compensation for a specified number of years, depending on the plan. It is
48
the Company's policy to fund at least the minimum for Company-sponsored pension
plans as required by ERISA. Contributions made to union-sponsored plans are
based upon collective bargaining agreements.
INVESTMENTS -- The Company adopted Statement of Financial Accounting Standards
("SFAS") No. 115 in 1994. This standard requires that the Company record
investments in debt and equity securities at their fair value, except for debt
securities that the Company intends to hold to maturity and equity securities
that are accounted for under the equity method or have no readily determinable
fair value. All of these investments have been classified as available for sale.
The difference between cost and fair value, net of related tax effects, is
recorded in a separate component of shareholders' equity. The adoption of this
standard had no effect on net income.
NEW ACCOUNTING PRINCIPLES -- In 1995, the Financial Accounting Standards Board
("FASB") issued SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of." The statement, effective
for fiscal year 1996, requires that long-lived assets and certain identifiable
intangibles to be held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be
recoverable. The statement also requires that long-lived assets and certain
identifiable intangibles to be disposed of be reported at the lower of carrying
amount or fair value less cost to sell. The Company plans to adopt the standard
in fiscal year 1996. Management believes that the adoption will not have a
material effect on the financial position or the results of operations of the
Company.
In 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation." This statement, effective for fiscal year 1996, establishes a
fair value-based method of accounting for employee stock-based compensation
plans and encourages adoption of that method. Companies may, however, continue
to apply the method currently prescribed under existing accounting rules,
provided certain pro forma disclosures are made. The Company plans to retain the
current accounting method and will provide the necessary disclosures in 1996.
NET INCOME PER SHARE -- Primary net income per share is computed by dividing net
income attributable to common shares by the weighted average number of common
shares outstanding during the period. Fully diluted net income per share is
computed based on the assumption that all of the convertible preferred shares
are converted into common shares. For purposes of calculating fully diluted net
income per share, net income is reduced by the additional Employee Stock
Ownership Plan ("ESOP") contribution that would be required for ESOP debt
service, and the weighted average number of shares outstanding is increased by
(i) the additional common shares that would be issued upon conversion of the
preferred shares based on the stated conversion rate plus any additional common
shares that would have to be issued to meet the redemption price guarantee for
all preferred shares that have been allocated to participants, and (ii) the
effect of stock options. The numbers of common shares used in the computations
of primary and fully diluted net income per share were as follows:
(In thousands) 1995 1994 1993
========================================
Primary 64,790 67,213 66,371
Fully diluted 71,506 74,073 73,695
NOTE 2: DISCONTINUED OPERATIONS (QUNO CORPORATION)
................................................................................
In December 1995, the Company announced it had agreed to sell all of its
holdings in QUNO Corporation as part of QUNO's agreement to merge with Donohue
Inc. Donohue will pay approximately C$30.50 per common QUNO share. The
transaction is subject to approval by QUNO's stockholders and is scheduled to
close in March 1996. The Company owns approximately 34% of QUNO's common stock
plus $138.8 million in convertible debt. Upon conversion of this debt, the
Company's ownership of QUNO increases to 53%, or 19.2 million of 36.2 million
common shares outstanding. The Company's gross proceeds from the sale will be
approximately US$425 million (C$585 million), consisting of US$285 million in
cash, US$75 million in short-term notes and US$65 million in Donohue common
stock (5.6 million shares valued at C$17 per share). After-tax proceeds will be
approximately US$330 million. The Company will record an after-tax gain of
approximately $85 million upon completion of the transaction. The exact amount
of the proceeds received and the gain recorded will depend on several factors at
the date the transaction is consummated, including the U.S./Canadian dollar
exchange rate and Donohue's stock price.
QUNO was a wholly owned subsidiary of the Company until February 1993, when
QUNO completed an initial public offering of 9 million shares of common stock.
This reduced the Company's ownership to 59% and its voting interest to 49%. At
closing, QUNO used
49
the net proceeds of approximately $100 million from the stock offering plus
proceeds from a bank financing of $80 million to repay a portion of its
intercompany borrowings owed the Company. The Company has accounted for its
investment in QUNO using the equity method since 1993. In April 1994, the
Company reduced its ownership holdings in QUNO to 34% by selling 5.5 million
shares of QUNO common stock. The sale of the shares resulted in an after-tax
gain of $13 million, or $.19 per share on a primary basis. The $138.8 million
convertible debenture is callable by QUNO after December 27, 1997, matures in
2002 and bears interest at an effective rate of 2.8%.
The Company's consolidated financial statements have been restated to
reflect equity earnings from QUNO, interest income from the QUNO convertible
debenture and the 1994 gain on the sale of QUNO common shares, net of income
tax, as discontinued operations. Income tax expense related to discontinued
operations was $5.1 million in 1995, $28.0 million in 1994 and $1.6 million in
1993.
Summarized financial information for QUNO follows:
(In thousands) 1995 1994 1993 Dec. 31, 1995 Dec. 25, 1994
=============================================================================================================
Revenues $618,886 $410,756 $386,646 Current assets $176,133 $130,114
Operating profit (loss) 163,281 6,531 (31,110) Non-current assets 537,754 439,793
Net income (loss) 99,525 (7,458) (28,881) Current liabilities 64,909 58,906
Non-current liabilities 361,253 320,805
The financial statements and transactions of QUNO are maintained in its
functional currency (Canadian dollars) and translated into U.S. dollars. The
translation adjustments are accumulated in a separate component of shareholders'
equity and will be eliminated and reported as part of the gain on sale of QUNO.
The financial information included herein reflects U.S. accounting principles.
QUNO manufactures newsprint for sale to the Company's newspapers and other
North American and overseas customers. The Company is party to a contract with
QUNO expiring in 2007 to supply newsprint based on market prices. Under the
contract, the Company has agreed to purchase specified minimum amounts of
newsprint each year subject to certain limitations. The specified minimum annual
volume is 250,000 metric tons in years 1996 to 1999, 225,000, 200,000 and
175,000 metric tons in years 2000 to 2002, respectively, and 150,000 metric tons
in each of years 2003 to 2007. QUNO's sales to the Company's newspapers were
$161.4 million in 1995, $112.8 million in 1994 and $127.2 million in 1993, which
represented 66%, 67% and 74% of their total newsprint consumption, respectively.
NOTE 3: CHANGES IN OPERATIONS AND UNUSUAL ITEMS
................................................................................
ACQUISITIONS -- The Company recorded acquisitions totaling $39.8 million in
1995, $138.5 million in 1994 and $117.4 million in 1993. These acquisitions were
accounted for as purchases. The intangibles recorded on these acquisitions are
being amortized on a straight-line basis over periods from 3 to 40 years. The
results of these operations are included in the consolidated statements of
income from their respective dates of acquisition.
In January 1995, the Company acquired RELCON, Inc. for approximately $8
million in cash. RELCON publishes free apartment guides and provides apartment
rental referral services to prospective renters. In May 1995, the Company
acquired Jamestown Publishers, Inc., a publisher and distributor of
supplementary education materials for the elementary and high school market, for
approximately $6 million in cash. In August 1995, the Company acquired Everyday
Learning Corporation, a publisher of mathematics materials for grades
kindergarten through 6, for approximately $25 million in cash.
In January 1996, the Company acquired Houston television station KHTV for
approximately $102 million in cash. The Company has also announced agreements to
acquire San Diego television station KTTY for $70.5 million in cash and two
education publishers--Educational Publishing Corporation for $200 million in
cash and NTC Publishing Group for $82 million in cash. These acquisitions are
subject to various regulatory approvals and are expected to close in the first
half of 1996. In February 1996, the Company is expected to acquire the remaining
minority interest in television station WPHL-Philadelphia for approximately $23
million in cash.
In February 1994, the Company acquired The Wright Group for $96 million in
cash. In April 1994, the Company acquired Boston television station WLVI for
50
$25 million in cash. In June 1994, the Company acquired Farm Journal Inc. for
$17.5 million in cash.
The Company acquired two Denver radio stations, KOSI-FM and KEZW-AM, in
January 1993 for $19.9 million in cash. In July 1993, the Company acquired
Contemporary Books, Inc. for $22 million in cash and $18.5 million in common
stock. In September 1993, the Company acquired Compton's NewMedia for $57
million in cash.
INVESTMENTS -- In 1995, 1994 and 1993, respectively, the Company invested
cash of $271.9 million, $24.2 million and $45.9 million in several companies.
The 1995 investments included $150 million in SoftKey International Inc.
convertible notes (see below) and $70 million in Qwest Broadcasting LLC, a
company formed to acquire and operate television and radio stations.
The Company's investment in Qwest is composed of a $7 million equity
interest (33%) and $63 million in convertible notes. The notes bear interest at
6%, are convertible into an additional 47% interest and may only be converted
when and if the Federal Communications Commission regulations permit such
conversion. In December 1995, Qwest acquired television stations in Atlanta
(WATL) and New Orleans (WNOL) for approximately $167 million.
DISPOSITIONS -- In December 1995, the Company sold Compton's NewMedia to SoftKey
International Inc. for $120.5 million of SoftKey common stock (5.1 million
shares, or 16% of common shares outstanding) and a $3 million note. In
connection with the Compton's sale, the Company also invested $150 million in
SoftKey in exchange for five-year, 5.5% notes, convertible into common stock at
$53 per share. The notes were recorded at $100 million, representing their
estimated fair value at the time of the transaction. The $50 million difference
between fair value and face value will be amortized into interest income over
the five-year term of the notes, making the effective interest rate on the notes
15.5%. These transactions resulted in a pretax gain of $6.9 million and an
after-tax gain of $4.1 million, or $.06 per share on a primary basis. Compton's
operating results included in the consolidated statements of income were
operating revenues of $26.4 million, $42.8 million and $13.3 million in 1995,
1994 and 1993, respectively, and operating losses of $12.1 million and $11.0
million in 1995 and 1994 and operating profit of $.8 million in 1993.
In July 1995, the Company sold Times Advocate Company, a California
newspaper subsidiary, for $16 million in cash. The sale resulted in a pretax
loss of $7.5 million and an after-tax loss of $4.5 million, or $.07 per share.
Times Advocate operating results included in the consolidated statements of
income were revenues of $8.5 million, $17.5 million and $16.5 million in 1995,
1994 and 1993, and operating losses of $1.4 million, $3.2 million and $3.1
million in 1995, 1994 and 1993, respectively.
In March 1995, the Company sold shares of America Online common stock for
approximately $17 million. The sale resulted in a pretax gain of $15.3 million
and an after-tax gain of $9.1 million, or $.14 per share. The Company currently
owns approximately 5% of America Online common stock.
NOTE 4: INVENTORIES
................................................................................
Inventories consisted of the following:
(In thousands) Dec. 31, 1995 Dec. 25, 1994
===================================================
Finished goods $21,638 $13,893
Supplies 11,237 11,935
Newsprint (at LIFO) 12,473 7,660
- - ---------------------------------------------------
Total inventories $45,348 $33,488
- - ---------------------------------------------------
If newsprint inventories were valued at FIFO cost, such inventories would
have been greater by $12.8 million at December 31, 1995, $8.0 million at
December 25, 1994 and $9.3 million at December 26, 1993. Finished goods
primarily include educational publishing materials.
NOTE 5: MORTGAGE NOTE RECEIVABLE FROM AFFILIATE
................................................................................
The Company holds a mortgage note resulting from the 1982 sale of a building to
a limited partnership in which the Company holds an equity interest. The note is
due December 31, 1997, can be prepaid beginning December 31, 1996, and bears
interest at 13% plus contingent interest based upon the building's cash flow and
appreciation.
51
NOTE 6: INVESTMENTS
................................................................................
Investments, excluding QUNO, consisted of the following:
(In thousands) Dec. 31, 1995 Dec. 25, 1994
=============================================================
Cost method investments $343,345 $90,111
Equity method investments 31,878 5,164
Debt securities 174,512 1,137
- - -------------------------------------------------------------
Total investments $549,735 $96,412
- - -------------------------------------------------------------
For investments recorded at fair value under SFAS No. 115, the aggregate
cost basis, net unrealized gain and fair value were as follows:
December 31, 1995 December 25, 1994
Cost Unrealized Fair Cost Unrealized Fair
(In thousands) Basis Gain Value Basis Gain Value
==============================================================================================
Marketable equity securities $146,040 $188,716 $334,756 $ 12,370 $62,711 $ 75,081
QUNO debenture 138,757 121,891 260,648 138,757 65,585 204,342
Debt securities 174,512 - 174,512 1,137 - 1,137
The net unrealized gain on marketable equity securities included an
unrealized loss on two investments of $4.6 million at December 31, 1995. The
difference between cost and fair value, net of related tax effects, is recorded
in a separate component of shareholders' equity and amounted to a net gain of
$189.5 million at December 31, 1995 and $78 million at December 25, 1994.
NOTE 7: FAIR VALUE OF FINANCIAL INSTRUMENTS
................................................................................
Estimated fair values and carrying amounts of the Company's financial
instruments were as follows:
December 31, 1995 December 25, 1994
Fair Carrying Fair Carrying
(In thousands) Value Amount Value Amount
================================================================================
Cost method investments:
Practicable to estimate fair value $345,620 $340,766 $ 87,211 $ 87,211
Not practicable - 2,579 - 2,900
QUNO debenture 260,648 260,648 204,342 204,342
Debt securities 174,512 174,512 1,137 1,137
Mortgage note receivable 89,070 83,313 91,135 83,937
Debt 847,577 786,102 459,453 438,798
Contracts payable for broadcast rights 349,845 390,214 316,809 363,128
The following methods and assumptions were used to estimate the fair value
of each category of financial instruments.
COST METHOD INVESTMENTS, QUNO DEBENTURE AND DEBT SECURITIES -- Certain of the
cost method investments, the QUNO debenture and the debt securities have been
recorded at fair value in the consolidated balance sheets (see notes 1 and 6).
For investments for which there is no public market, fair value was estimated
based on prices recently paid for shares in that company. For several
investments, it was not practicable to estimate fair value.
MORTGAGE NOTE RECEIVABLE -- Fair value was estimated using the discounted cash
flow method.
52
DEBT -- Fair value was determined based on quoted market prices for similar
issues or on current rates available to the Company for debt of the same
remaining maturities and similar terms.
CONTRACTS PAYABLE FOR BROADCAST RIGHTS -- Fair value was estimated using the
discounted cash flow method.
NOTE 8: CONTRACTS PAYABLE FOR BROADCAST RIGHTS
...............................................................................
Contracts payable for broadcast rights are classified as current or long-term
liabilities in accordance with the payment terms of the contracts. Required
payments under contractual agreements for broadcast rights recorded at December
31, 1995 are: $164.4 million in 1996, $109.0 million in 1997, $67.9 million in
1998, $30.9 million in 1999, $9.3 million in 2000 and $8.7 million thereafter.
NOTE 9: LONG-TERM DEBT
...............................................................................
Long-term debt consisted of the following:
(In thousands) Dec. 31, 1995 Dec. 25, 1994
=================================================================================
Promissory notes, weighted average
interest rates of 5.7% and 5.6% $208,718 $ 4,992
Medium-term notes, weighted average
interest rates of 6.6% and 7.0%, due 1995-2005 307,300 135,800
8.4% guaranteed ESOP notes, due 1995-2003 235,648 259,172
8.19% guaranteed ESOP note, due 1995-1998 11,633 14,929
Other notes and obligations 22,803 23,905
- - ---------------------------------------------------------------------------------
Total debt 786,102 438,798
Less portions due within one year (28,665) (27,598)
- - ---------------------------------------------------------------------------------
Long-term debt $757,437 $411,200
- - ---------------------------------------------------------------------------------
In 1990, the Company began offering up to $200 million of its Series B
medium-term notes, which have maturities from 2 to 10 years. All of these notes
have been issued. In 1995, the Company began offering up to $300 million of its
Series C medium-term notes, of which $180 million were issued and outstanding as
of December 31, 1995. These notes have maturities from 5 to 10 years and may not
be redeemed by the Company prior to maturity. The proceeds from the sale of the
notes have been used for general corporate purposes.
The notes issued by the Company's ESOP are unconditionally guaranteed by
the Company as to payment of principal and interest. Therefore, the unpaid
balance of these borrowings is reflected in the accompanying consolidated
balance sheets as long-term debt. An amount equivalent to the unpaid balance of
these borrowings, representing unearned employee compensation, is recorded as a
reduction of shareholders' equity.
Certain debt agreements limit the amount of secured debt the Company can
incur without equally and ratably securing additional borrowings under those
agreements.
In 1996, the Company intends to refinance $208.7 million of promissory
notes and $10.0 million of Series B medium-term notes scheduled to mature in
1996, 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 and treated as maturing in fiscal year 1999. The Company has revolving
credit agreements with a number of banks in an aggregate amount of $480 million,
extending to December 31, 1999, that are fully available to support the issuance
of promissory notes. These agreements contain various interest rate options and
provide for annual fees based on a percentage of the commitment. Such fees
totaled approximately $.5 million in 1995, 1994 and 1993.
Long-term debt at December 31, 1995 matures as follows: $28.7 million in
1996, $60.4 million in 1997, $34.6 million in 1998, $246.4 million in 1999,
$63.1 million in 2000 and $352.9 million thereafter.
53
NOTE 10: COMMITMENTS
...............................................................................
The Company has entered into commitments for broadcast rights that are not
currently available for broadcast and are therefore not included in the
financial statements. These commitments totaled $277 million at December 31,
1995. Payments for broadcast rights generally commence when the programs become
available for broadcast.
The Company had commitments totaling $70 million at December 31, 1995
related to the purchase of property, plant and equipment and to talent
contracts.
The Company leases certain equipment and office and production space under
various operating leases. Rental expense totaled $24.6 million in 1995, $24.6
million in 1994 and $26.2 million in 1993. Future minimum rental commitments
under non-cancelable operating leases are $17.5 million in 1996, $15.3 million
in 1997, $14.3 million in 1998, $12.7 million in 1999, $11.6 million in 2000 and
$63.6 million thereafter.
The Company has guaranteed certain obligations of affiliates totaling $21.2
million at December 31, 1995.
NOTE 11: CAPITAL STOCK
...............................................................................
Under the Company's Restated Certificate of Incorporation, 5 million shares of
preferred stock are authorized. In 1989, the Company established a series of 1.6
million shares of Series B Convertible Preferred Stock of which 1.59 million
shares were issued to the Company's ESOP. Each share of such preferred stock
pays a cumulative dividend of 7.75% annually, has a liquidation value of $220
per share, is convertible into four shares of the Company's common stock and is
voted with the common stock with an entitlement to 4.58 votes per preferred
share.
In December 1987, the Company adopted a Share Purchase Rights Plan and
declared a distribution of one right on each outstanding share of the Company's
common stock. Each right will entitle stockholders to buy one one-hundredth of a
share of Series A Junior Participating Preferred Stock at an exercise price of
$150. The rights have no voting rights and are not exercisable until 10 days
after the occurrence of certain triggering events, upon which the holders of the
rights are entitled to purchase either the common stock of an acquiror or
additional common stock of the Company at a discounted price. The rights are
redeemable at the option of the Company for $.01 per right. The Company has
established a series of 800,000 shares of Series A Junior Participating
Preferred Stock in connection with the plan, none of which have been issued.
The Board from time to time has authorized the repurchase of shares of the
Company's common stock in the open market or through private transactions to be
used for employee benefit programs and other purposes. In 1995, the Company
acquired 5,188,998 shares of its common stock for $314.7 million. In 1994, the
Company acquired 946,500 shares for $49.1 million. At December 31, 1995, the
Company had authorization to repurchase an additional 4.8 million shares of its
common stock.
There were approximately 4,700 holders of record of the Company's common
stock at January 31, 1996.
NOTE 12: INCENTIVE COMPENSATION AND STOCK PLANS
...............................................................................
EMPLOYEE STOCK OWNERSHIP PLAN (ESOP) -- In 1988, the Company established an ESOP
as a long-term employee benefit plan to supplement the Company's U.S. employee
pension plan. In connection therewith, the ESOP purchased, in 1988 and 1989,
approximately 800,000 common shares and 1.59 million Series B convertible
preferred shares for an aggregate of $375 million. The ESOP provides for the
awarding of shares of the Company's preferred and common stock on a
noncontributory basis to eligible non-union employees of the Company. At
December 31, 1995, 5.9 million shares of common stock were reserved for issuance
in connection with this plan.
Shares of stock held by the ESOP have been placed with the ESOP Trustee and
are allocated to eligible employees annually. These common and preferred shares
are allocated in the same proportion that the current year's principal and
interest payments bear to the total principal and interest to be paid over the
lives of the related borrowings. Each preferred share is convertible into four
shares of the Company's common stock. The ESOP Trustee must convert the
preferred shares when making distributions to participants upon their withdrawal
from the ESOP. If at the time of such conversion, the price of the Company's
common stock is below $55 per share, the Company must, at its option, either pay
the difference in cash or issue additional common stock. At December 31, 1995,
630,306 allocated preferred shares and 493,068 allocated common shares were held
by the ESOP.
54
The Company recognizes expense for this plan based upon cash contributions
it makes to the ESOP. The ESOP services its debt requirements with amounts
received from preferred dividends, common dividends earned on unallocated common
shares and Company contributions. The following table summarizes ESOP debt
service activity for the three years ended December 31, 1995:
(In thousands) 1995 1994 1993
=======================================================
Debt Requirements:
Principal $26,820 $24,868 $22,721
Interest 22,927 25,015 26,932
- - -------------------------------------------------------
Total $49,747 $49,883 $49,653
- - -------------------------------------------------------
Debt Service:
Dividends $25,439 $26,019 $26,548
Company cash contributions 24,308 23,864 23,105
- - -------------------------------------------------------
Total $49,747 $49,883 $49,653
- - -------------------------------------------------------
1992 LONG-TERM INCENTIVE PLAN -- In 1992, the 1984 Long-Term Performance Plan
was terminated and replaced with the 1992 Long-Term Incentive Plan. The 1992
plan provides for the granting of stock options or various other types of awards
to eligible employees. General awards available under this plan, on an annual
basis, are equal to nine-tenths of one percent (.009) of the adjusted average
number of common shares outstanding used by the Company to calculate fully
diluted net income per share for the preceding year, plus shares of stock
available for awards in previous years that have not been awarded, and any
previously forfeited or expired options. At December 31, 1995 and December 25,
1994, approximately .7 million shares were available for general awards.
An additional number of shares is available for replacement options. The
number of shares available for replacement options each year is generally equal
to four-tenths of one percent (.004) of the adjusted average number of common
shares outstanding used by the Company to calculate fully diluted net income per
share for the preceding year, plus shares of stock available for awards in
previous years that have not been awarded, and any previously forfeited or
expired replacement options. At December 31, 1995 and December 25, 1994, 3.1
million and 2.3 million shares, respectively, were available for replacement
options.
Under the 1992 plan, only 3 million of the shares available for general
awards may be used for certain outright stock awards and other stock-based
awards, and only 3 million of the shares may be used for incentive stock
options. No such awards have been granted. The option price is the market value
of the Company's common stock at the time the option is granted. Options are
exercisable not less than six months or more than 11 years after the date the
option is granted. At December 31, 1995, 2.5 million options were exercisable.
A combined summary of stock option activity and prices follows:
(Shares In thousands) 1995 1994 1993
========================================================================
Options Outstanding:
Beginning of year 5,045 4,893 5,261
Granted 1,475 1,050 889
Exercised (1,954) (832) (1,131)
Cancelled (113) (66) (126)
- - ------------------------------------------------------------------------
End of year 4,453 5,045 4,893
- - ------------------------------------------------------------------------
Prices of Options:
Granted $52 1/4-68 $49 5/8-63 1/8 $51 1/8-57 7/8
Exercised 20 1/16-57 3/4 16 7/8-57 3/4 16 7/8-47 3/8
Outstanding at year end 30-68 20 1/16-63 1/8 16 7/8-57 7/8
EMPLOYEE STOCK PURCHASE PLAN -- This plan permits eligible employees to purchase
shares of the Company's common stock at 85% of market price. A total of 4
million shares of stock may be sold under the plan. The Company's only expense
relating to this plan is for its administration. During 1995, 1994 and 1993,
111,017, 110,925 and 99,809 shares, respectively, were sold to employees under
this plan. As of December 31, 1995, a total of 2.2 million shares were available
for sale.
SAVINGS INCENTIVE PLAN -- The Company maintains various qualified Savings
Incentive Plans, which permit eligible employees to make voluntary contributions
on a pretax basis. The plans provide for uniform employer contributions to
eligible employees of $.25 for each $1.00 contributed by participants up to 4%
of the participants' compensation. These plans allow participants to invest
their savings in various investments including the Company's common stock.
Company contributions to these plans for 1995, 1994 and 1993 were $2.6 million,
$2.3 million and $2.1 million, respectively. The Company had 400,000 shares of
common stock reserved for possible issuance under these plans at December 31,
1995.
55
NOTE 13: EMPLOYEE PENSION PLANS
................................................................................
The Company amended its Company-sponsored pension plans, effective January 1989,
for employees not covered by a collective bargaining agreement. The amendments
were made in connection with the establishment of the Company's ESOP and to
comply with the provisions of the Tax Reform Act of 1986. These pension plans
will continue to provide substantially the same pension benefits as under the
pre-amended plans until December 1998. After that date, the plans provide that
the pension benefit credits will be frozen in terms of pay and service.
Net pension expense (credit) for Company-sponsored plans in 1995, 1994 and
1993 included the following components:
(In thousands) 1995 1994 1993
===================================================================================
Benefits earned during the period (service costs) $ 8,256 $ 9,038 $ 8,000
Interest cost on projected benefit obligation 20,302 17,912 17,900
Recognized return on plan assets (27,857) (27,424) (27,151)
Amortization, net (531) (380) (511)
- - -----------------------------------------------------------------------------------
Net pension expense (credit) $ 170 $ (854) $ (1,762)
- - -----------------------------------------------------------------------------------
Actual returns on plan assets were a gain of $57.9 million in 1995, a loss
of $2.0 million in 1994 and a gain of $37.1 million in 1993.
The following table sets forth the funded status of the Company-sponsored
pension plans as of year-end 1995 and 1994:
(In thousands) Dec. 31, 1995 Dec. 25, 1994
============================================================================================
Plans' assets at fair value $324,860 $281,515
Actuarial present value of benefit obligations:
Vested benefits 288,086 229,019
Non-vested benefits 10,872 9,024
- - --------------------------------------------------------------------------------------------
Accumulated benefit obligation 298,958 238,043
Projected future salary increases 8,324 12,917
- - --------------------------------------------------------------------------------------------
Projected benefit obligation 307,282 250,960
- - --------------------------------------------------------------------------------------------
Plans' assets in excess of projected benefit obligation 17,578 30,555
Unrecognized net asset at transition
being amortized through 2003 (12,120) (13,686)
Unrecognized net loss due to actual experience
varying from actuarial assumptions 27,941 15,717
Unrecognized prior service costs 131 906
- - --------------------------------------------------------------------------------------------
Pension asset recognized in the consolidated balance sheets $ 33,530 $ 33,492
- - --------------------------------------------------------------------------------------------
The plans' assets consist primarily of listed common stocks and bonds,
including 225,725 shares of the Company's common stock having an aggregate
market value of $13.8 million at December 31, 1995. In determining the projected
benefit obligation for the plans, the weighted average assumed discount rate
used was 7.25% in 1995 and 8.5% in 1994, while the assumed average rate of
increase in future salary levels was 4.5% for 1995 and 5.0% for 1994. The
weighted average expected long-term rate of return on assets used in determining
net pension expense or credit was 9.5% in 1995, 9.75% in 1994, and 10% in 1993.
Total pension expense for union-sponsored pension plans was $5.6 million in
1995, $5.8 million in 1994 and $4.9 million in 1993. The Company's portion of
assets and liabilities for multi-employer union pension plans is not
determinable.
56
NOTE 14: POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
................................................................................
The Company provides postretirement health care and life insurance benefits to
eligible employees under a variety of plans. Employees become eligible for these
benefits if they meet age and service requirements. Effective January 1991, the
Company provides a fixed medical contribution to participants who retire between
the age of 55 to 65 and have 10 or more years of service. Medical coverage for
these participants ends when they reach age 65. Retirees are also eligible for
life insurance benefits, which are primarily a function of both the years of
service and the level of compensation at retirement. The cost of postretirement
medical and life benefits is accrued over the active service periods of
employees to the date they attain full eligibility for such benefits. It is the
Company's policy to fund postretirement benefits as claims are incurred.
Postretirement benefit cost for 1995, 1994 and 1993 included the following
components:
(In thousands) 1995 1994 1993
========================================================================================
Service cost of benefits earned during the year $ 222 $ 350 $ 288
Interest cost on accumulated postretirement
benefit obligation ("APBO") 3,437 3,069 3,159
- - ----------------------------------------------------------------------------------------
Postretirement benefit cost $ 3,659 $ 3,419 $ 3,447
- - ----------------------------------------------------------------------------------------
The plans' APBO and the Company's postretirement liability were as follows:
(In thousands) Dec. 31, 1995 Dec. 25, 1994
=========================================================================================
Actuarial present value of benefit obligations:
Retirees $42,705 $35,079
Active participants, fully eligible 1,405 2,158
Active participants, not eligible 2,649 3,489
- - -----------------------------------------------------------------------------------------
APBO 46,759 40,726
Unrecognized net gain (loss) due to actual experience
varying from actuarial assumptions (3,699) 2,774
- - -----------------------------------------------------------------------------------------
Postretirement benefit liability $43,060 $43,500
- - -----------------------------------------------------------------------------------------
In determining the APBO, the weighted average assumed discount rate used
was 7.25% in 1995 and 8.5% in 1994. Increases of 10.0% in the cost of covered
health care benefits were assumed for fiscal 1996. These rates were assumed to
decrease ratably to 7.0% after six years and remain at that level thereafter.
The effect of a one percentage point increase in the assumed health care cost
trend rate for each future year would increase the total APBO at year-end 1995
by $3.3 million and the 1995 net benefit cost by $.2 million.
NOTE 15: CONTINGENCIES AND LEGAL PROCEEDINGS
................................................................................
The Company and its subsidiaries are defendants from time to time in actions for
libel and other matters arising out of their business operations. In addition,
the Company and its subsidiaries are involved from time to time as parties in
various regulatory, environmental and other proceedings with governmental
authorities and administrative agencies.
The State of Florida Department of Environmental Protection ("DEP") and the
Company's subsidiary, Sentinel Communications Company (the "Sentinel"), have
entered into a consent decree under which the Sentinel will assist the DEP in
remediating certain trichloroethene groundwater contamination in downtown
Orlando, Florida. The Company currently estimates that the Sentinel's share of
the remediation costs will not be material and has provided for the costs in the
Company's consolidated financial statements.
The Company does not believe that any of the matters or proceedings
presently pending will have a material adverse effect on its consolidated
financial position or results of operations.
57
NOTE 16: INCOME TAXES
................................................................................
The following is a reconciliation of income taxes computed at the U.S. federal
statutory rate to income taxes from continuing operations reported in the
consolidated statements of income:
(In thousands) 1995 1994 1993
==================================================================================================================
Income from continuing operations before income taxes $412,534 $391,847 $346,858
- - ------------------------------------------------------------------------------------------------------------------
Federal income taxes at 35% $144,387 $137,146 $121,400
State and local income taxes, net of federal tax 24,344 24,000 18,502
Other (1,655) (2,448) 2,310
- - ------------------------------------------------------------------------------------------------------------------
Income taxes reported $167,076 $158,698 $142,212
Effective tax rate 40.5% 40.5% 41.0%
- - ------------------------------------------------------------------------------------------------------------------
Components of income tax expense charged to income from continuing
operations were as follows:
(In thousands) 1995 1994 1993
================================================================================
Currently payable: U.S. federal $137,420 $135,145 $104,446
State and local 37,389 37,390 28,307
- - --------------------------------------------------------------------------------
174,809 172,535 132,753
- - --------------------------------------------------------------------------------
Deferred: U.S. federal (7,617) (10,380) 9,517
State and local (116) (3,457) (58)
- - --------------------------------------------------------------------------------
(7,733) (13,837) 9,459
- - --------------------------------------------------------------------------------
Total $167,076 $158,698 $142,212
- - --------------------------------------------------------------------------------
Significant components of the Company's net deferred tax liabilities were
as follows:
(In thousands) Dec. 31, 1995 Dec. 25, 1994
=============================================================================================
Net properties $87,956 $ 93,229
Net intangible assets 58,483 61,113
Pensions 9,226 12,483
Unrealized gain on investments (excluding QUNO debenture) 74,024 24,598
Investment in QUNO 59,792 36,013
Investment in nonconsolidated subsidiaries 12,146 5,422
Other future taxable items 7,102 12,288
- - ---------------------------------------------------------------------------------------------
Total deferred tax liabilities 308,729 245,146
- - ---------------------------------------------------------------------------------------------
Broadcast rights (20,211) (27,250)
Postretirement and postemployment benefits
other than pensions (19,646) (19,461)
Deferred compensation (26,733) (26,241)
Disposition of New York Daily News (6,448) (7,645)
Other accrued liabilities (23,486) (19,817)
Accrued employee compensation (13,626) (14,122)
Federal benefit on deferred state taxes (16,952) (14,748)
Accounts receivable (11,822) (10,275)
Other future deductible items (7,199) (10,442)
- - ---------------------------------------------------------------------------------------------
Total deferred tax assets (146,123) (150,001)
- - ---------------------------------------------------------------------------------------------
Net deferred tax liability $ 162,606 $ 95,145
- - ---------------------------------------------------------------------------------------------
58
NOTE 17: SEGMENT INFORMATION
................................................................................
Tribune Company is an information, entertainment and education company
comprising three business segments. As of December 31, 1995, the Company's
publishing segment consisted of four daily newspapers and other related
publications and services. The newspapers are the Chicago Tribune, the Fort
Lauderdale-based Sun-Sentinel, The Orlando Sentinel and the Newport News-based
Daily Press. The Company's broadcasting operations consisted of independent
television stations in New York, Los Angeles, Chicago, Philadelphia, Boston and
Denver, an ABC television affiliate in New Orleans, a CBS television affiliate
in Atlanta and five radio stations. The independent television stations are also
affiliated with The Warner Bros. Television Network. In entertainment, the
Company owns the Chicago Cubs baseball team, produces and syndicates television
programming and has interests in cable programming. The Company's education
segment (previously referred to as "new media/education") consisted of
Contemporary Books, The Wright Group and Everyday Learning, educational and
reference publishing operations. In 1995, the Company sold Times Advocate
Company, its California newspaper subsidiary, and Compton's NewMedia, a computer
software company (see note 3). Financial data for each of the Company's business
segments is presented on the following page.
In determining operating profit for each segment, none of the following
items have been added or deducted: interest income and expense, nonoperating
gains and losses or income taxes. Assets represent those identifiable tangible
and intangible assets used in the operations of each segment. The Company's cost
of sales by business segment was as follows:
(In thousands) 1995 1994 1993
======================================================================
Publishing $ 679,037 $ 608,327 $ 589,097
Broadcasting and Entertainment 451,749 412,704 410,007
Education 33,823 38,275 8,798
- - ----------------------------------------------------------------------
Total cost of sales $1,164,609 $1,059,306 $1,007,902
- - ----------------------------------------------------------------------
59
Tribune Company and Subsidiaries
BUSINESS SEGMENTS
(In thousands of dollars) 1995 1994 1993
=================================================================================================
OPERATING Publishing $1,312,767 $1,246,377 $1,163,116
REVENUES Broadcasting and Entertainment 828,806 764,197 727,213
Education 103,101 102,082 21,209
-----------------------------------------------------------------------------
Total operating revenues $2,244,674 $2,112,656 $1,911,538
- - -------------------------------------------------------------------------------------------------
OPERATING Publishing $ 270,143 $ 287,590 $ 253,050
PROFIT Broadcasting and Entertainment 160,616 132,413 125,684
Education 4,586 2,829 2,071
Corporate expenses (30,134) (26,207) (24,402)
-----------------------------------------------------------------------------
Total operating profit $ 405,211 $ 396,625 $ 356,403
- - -------------------------------------------------------------------------------------------------
DEPRECIATION Publishing $ 68,123 $ 66,639 $ 60,689
Broadcasting and Entertainment 21,384 18,891 19,515
Education 2,818 1,554 242
Corporate 1,048 1,575 643
-----------------------------------------------------------------------------
Total depreciation $ 93,373 $ 88,659 $ 81,089
- - -------------------------------------------------------------------------------------------------
AMORTIZATION OF Publishing $ 5,675 $ 4,990 $ 4,858
INTANGIBLE ASSETS Broadcasting and Entertainment 16,188 16,216 15,688
Education 5,750 5,510 1,127
-----------------------------------------------------------------------------
Total amortization of intangible assets $ 27,613 $ 26,716 $ 21,673
- - -------------------------------------------------------------------------------------------------
CAPITAL Publishing $ 65,676 $ 51,205 $ 50,647
EXPENDITURES Broadcasting and Entertainment 38,025 21,041 18,782
Education 4,883 4,905 721
Corporate 9,279 14,475 5,470
-----------------------------------------------------------------------------
Total capital expenditures $ 117,863 $ 91,626 $ 75,620
- - -------------------------------------------------------------------------------------------------
ASSETS Publishing $ 693,853 $ 757,889 $ 880,384
Broadcasting and Entertainment 1,405,213 1,321,768 1,155,331
Education 211,510 210,445 107,964
Corporate 977,679 495,723 392,731
-----------------------------------------------------------------------------
Total assets $3,288,255 $2,785,825 $2,536,410
- - -------------------------------------------------------------------------------------------------
60
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of Tribune Company
................................................................................
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of cash flows and of shareholders' equity
present fairly, in all material respects, the financial position of Tribune
Company and its subsidiaries at December 31, 1995 and December 25, 1994, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1995, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Chicago, Illinois
January 31, 1996
61
QUARTERLY RESULTS (UNAUDITED)
Quarters
1995 (In thousands of dollars, except per share data) First Second Third Fourth Total
===================================================================================================================================
OPERATING Publishing $ 323,547 $ 327,787 $ 304,686 $ 356,747 $1,312,767
REVENUES (1)
Broadcasting and Entertainment 176,432 220,910 217,031 214,433 828,806
Education 21,427 28,521 30,527 22,626 103,101
-------------------------------------------------------------------------------------------------------------
Total operating revenues $ 521,406 $ 577,218 $ 552,244 $ 593,806 $2,244,674
- - ----------------------------------------------------------------------------------------------------------------------------------
OPERATING Publishing $ 70,805 $ 74,991 $ 52,186 $ 72,161 $ 270,143
PROFIT
Broadcasting and Entertainment 28,724 53,024 35,058 43,810 160,616
Education (356) 3,862 3,215 (2,135) 4,586
Corporate expenses (7,139) (7,366) (7,336) (8,293) (30,134)
-------------------------------------------------------------------------------------------------------------
Total operating profit 92,034 124,511 83,123 105,543 405,211
- - ----------------------------------------------------------------------------------------------------------------------------------
Dispositions of subsidiary stock and investment (2) 15,272 - (7,500) 6,900 14,672
Net interest expense (923) (1,438) (1,553) (3,435) (7,349)
- - ----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 106,383 123,073 74,070 109,008 412,534
Income taxes (43,085) (49,845) (29,998) (44,148) (167,076)
- - ----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS 63,298 73,228 44,072 64,860 245,458
INCOME FROM DISCONTINUED OPERATIONS OF QUNO (3) 4,665 8,899 11,828 7,315 32,707
- - ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME 67,963 82,127 55,900 72,175 278,165
Preferred dividends, net of tax (4,621) (4,622) (4,622) (4,976) (18,841)
- - ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME ATTRIBUTABLE TO COMMON SHARES $ 63,342 $ 77,505 $ 51,278 $ 67,199 $ 259,324
- - ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME PER SHARE (4)
Primary: Continuing operations $ .89 $ 1.05 $ .61 $ .94 $ 3.50
Discontinued operations .07 .14 .18 .12 .50
-------------------------------------------------------------------------------------------------------------
Net income $ .96 $ 1.19 $ .79 $ 1.06 $ 4.00
-------------------------------------------------------------------------------------------------------------
Fully Diluted: Continuing operations $ .82 $ .97 $ .56 $ .87 $ 3.22
Discontinued operations .07 .12 .17 .10 .46
-------------------------------------------------------------------------------------------------------------
Net income $ .89 $ 1.09 $ .73 $ .97 $ 3.68
- - ----------------------------------------------------------------------------------------------------------------------------------
COMMON DIVIDENDS PER SHARE $ .28 $ .28 $ .28 $ .28 $ 1.12
- - ----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK PRICE (HIGH-LOW) $56 1/8-50 3/4 $60 3/4-53 3/4 $68 1/4-59 3/4 $68 7/8-59 5/8
- - ----------------------------------------------------------------------------------------------------------------------
Notes to Quarterly Results:
(1) Revenues have been restated to conform to revised financial statement
presentation. The restatement had no effect on net income.
(2) In March 1995, shares of America Online common stock were sold, which
resulted in a pretax gain of $15.3 million, or $9.1 million after taxes
($.14 per share on a primary basis). In July 1995, Times Advocate Company
was sold, which resulted in a pretax loss of $7.5 million, or $4.5 million
after taxes ($.07 per share). In December 1995, Compton's NewMedia was sold,
which resulted in a pretax gain of $6.9 million, or $4.1 million after taxes
($.06 per share).
(3) In December 1995, the Company announced it had agreed to sell its holdings
in QUNO as part of QUNO's planned merger with Donohue Inc. The financial
statements have been restated to reflect the Company's equity earnings from
QUNO and the interest income on the QUNO convertible debenture, net of tax,
as discontinued operations.
(4) Quarterly and full year net income per share amounts are calculated
independently based on the weighted average number of common shares
applicable for each period.
(5) In April 1994, the Company sold 5.5 million shares of QUNO common stock,
which resulted in an after-tax gain of approximately $13 million, or $.19
per share on a primary basis.
62
Tribune Company and Subsidiaries
Quarters
1994 (In thousands of dollars, except per share data) First Second Third Fourth Total
============================================================================================================================
OPERATING Publishing $ 303,949 $ 310,919 $ 296,464 $ 335,045 $1,246,377
REVENUES (1)
Broadcasting and Entertainment 146,948 223,085 179,986 214,178 764,197
Education 19,203 27,941 25,116 29,822 102,082
-------------------------------------------------------------------------------------------------------
Total operating revenues $ 470,100 $ 561,945 $ 501,566 $ 579,045 $2,112,656
- - ----------------------------------------------------------------------------------------------------------------------------
OPERATING Publishing $ 69,237 $ 76,325 $ 60,354 $ 81,674 $ 287,590
PROFIT
Broadcasting and Entertainment 20,375 50,247 23,699 38,092 132,413
Education 1,330 2,631 (5,311) 4,179 2,829
Corporate expenses (6,340) (6,418) (6,813) (6,636) (26,207)
-------------------------------------------------------------------------------------------------------
Total operating profit 84,602 122,785 71,929 117,309 396,625
- - ----------------------------------------------------------------------------------------------------------------------------
Net interest expense (2,207) (949) (508) (1,114) (4,778)
- - ----------------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES 82,395 121,836 71,421 116,195 391,847
Income taxes (33,782) (49,746) (28,111) (47,059) (158,698)
- - ----------------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS 48,613 72,090 43,310 69,136 233,149
INCOME FROM DISCONTINUED OPERATIONS OF QUNO (3)(5) (8,544) 12,942 4,517 (17) 8,898
- - ----------------------------------------------------------------------------------------------------------------------------
NET INCOME 40,069 85,032 47,827 69,119 242,047
Preferred dividends, net of tax (4,644) (4,643) (4,644) (4,643) (18,574)
- - ----------------------------------------------------------------------------------------------------------------------------
NET INCOME ATTRIBUTABLE TO COMMON SHARES $ 35,425 $ 80,389 $ 43,183 $ 64,476 $ 223,473
- - ----------------------------------------------------------------------------------------------------------------------------
NET INCOME PER SHARE (4)
Primary: Continuing operations $ .66 $ 1.00 $ .57 $ .96 $ 3.19
Discontinued operations (.13) .19 .07 - .13
-------------------------------------------------------------------------------------------------------
Net income $ .53 $ 1.19 $ .64 $ .96 $ 3.32
-------------------------------------------------------------------------------------------------------
Fully Diluted: Continuing operations $ .61 $ .92 $ .54 $ .89 $ 2.95
Discontinued operations (.12) .17 .06 - .12
-------------------------------------------------------------------------------------------------------
Net income $ .49 $ 1.09 $ .60 $ .89 $ 3.07
- - ----------------------------------------------------------------------------------------------------------------------------
COMMON DIVIDENDS PER SHARE $ .26 $ .26 $ .26 $ .26 $ 1.04
- - ----------------------------------------------------------------------------------------------------------------------------
COMMON STOCK PRICE (HIGH-LOW) $61 7/8-55 $64 1/2-54 $56 5/8-50 1/4 $56 1/8-48 7/8
- - ---------------------------------------------------------------------------------------------------------------
63
ELEVEN YEAR FINANCIAL SUMMARY
(Dollars in thousands, except per share data) 1995 1994 1993 1992
========================================================================================================
OPERATING RESULTS
OPERATING REVENUES
Publishing excluding Daily News $1,312,767 1,246,377 1,163,116 1,136,619
New York Daily News $ - - - -
Broadcasting and Entertainment $ 828,806 764,197 727,213 684,051
Education $ 103,101 102,082 21,209 -
- - --------------------------------------------------------------------------------------------------------
TOTAL OPERATING REVENUES $2,244,674 2,112,656 1,911,538 1,820,670
- - --------------------------------------------------------------------------------------------------------
OPERATING PROFIT
Publishing excluding Daily News $ 270,143 287,590 253,050 224,509
New York Daily News $ - - - -
Broadcasting and Entertainment $ 160,616 132,413 125,684 121,267
Education $ 4,586 2,829 2,071 -
Corporate expenses $ (30,134) (26,207) (24,402) (23,643)
- - --------------------------------------------------------------------------------------------------------
TOTAL OPERATING PROFIT $ 405,211 396,625 356,403 322,133
- - --------------------------------------------------------------------------------------------------------
Net interest expense $ (7,349) (4,778) (9,545) (22,510)
Other $ 14,672 - - -
- - --------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES $ 412,534 391,847 346,858 299,623
Income taxes $ (167,076) (158,698) (142,212) (120,089)
- - --------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS $ 245,458 233,149 204,646 179,534
INCOME (LOSS) FROM DISCONTINUED OPERATIONS $ 32,707 8,898 (16,040) (42,909)
Cumulative effects of changes in accounting principles $ - - - (16,800)
- - --------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) (1) $ 278,165 242,047 188,606 119,825
- - --------------------------------------------------------------------------------------------------------
SHARE INFORMATION
Primary net income (loss) per share (1)
Continuing operations $ 3.50 3.19 2.80 2.48
Discontinued operations $ .50 .13 (.24) (.66)
Net income $ 4.00 3.32 2.56 1.56
Common dividends per share $ 1.12 1.04 .96 .96
Shareholders' equity per share $ 20.67 18.93 15.54 13.32
Weighted average common shares outstanding (000's) 64,790 67,213 66,371 65,018
FINANCIAL RATIOS
Operating profit margin 18.1% 18.8% 18.6% 17.7%
Net income margin 12.4% 11.5% 9.9% 6.6%
Net income as a percentage of average
shareholders' equity 20.5% 19.9% 18.8% 13.6%
Long-term debt to total capital 32% 22% 30% 43%
FINANCIAL POSITION AND OTHER DATA
Total assets $3,288,255 2,785,825 2,536,410 2,751,570
Long-term debt $ 757,437 411,200 510,838 740,979
Shareholders' equity $1,379,909 1,332,980 1,095,627 911,889
Capital expenditures $ 117,863 91,626 75,620 130,232
Repurchase (issuance) of treasury stock, net $ 273,873 28,670 (46,138) (31,918)
Dividends $ 91,202 88,325 81,927 80,407
Amortization of broadcast rights $ 234,065 244,361 236,468 233,859
Employees (full-time equivalents) 10,500 10,500 9,900 12,400
(1) Includes a gain on sale of America Online common stock of $9.1 million or
$.14 per share, a loss on sale of Times Advocate Company of $4.5 million or
$.07 per share, and a gain on sale of Compton's NewMedia of $4.1 million or
$.06 per share in 1995, a gain on sale of QUNO stock of $13 million or $.19
per share in 1994, the cumulative effects of accounting changes of $16.8
million or $.26 per share in 1992, charges relating to New York Daily News
totaling $255.0 million or $3.86 per share in 1990, a non-recurring net loss
of $21.1 million or $.27 per share in 1987 and a non-recurring net gain of
$151.6 million or $1.88 per share in 1986.
64
Tribune Company and Subsidiaries
1991 1990 1989 1988 1987 1986 1985
===================================================================================
1,122,434 1,183,177 1,197,077 1,117,487 1,043,310 943,366 942,773
- 321,823 422,024 436,843 419,853 411,840 405,862
617,514 623,981 584,326 505,729 485,276 466,231 384,723
- - - - - - -
-----------------------------------------------------------------------------------
1,739,948 2,128,981 2,203,427 2,060,059 1,948,439 1,821,437 1,733,358
-----------------------------------------------------------------------------------
217,031 278,594 299,282 248,567 239,358 209,525 171,932
- (114,468) (2,179) 15,167 (47,357) (9,228) 3,040
100,175 107,528 96,803 77,754 62,858 65,537 45,693
- - - - - - -
(22,256) (22,654) (22,100) (22,699) (25,815) (17,650) (19,459)
-----------------------------------------------------------------------------------
294,950 249,000 371,806 318,789 229,044 248,184 201,206
-----------------------------------------------------------------------------------
(30,387) (23,478) (12,040) (33,341) (33,414) (29,019) (8,458)
- (295,000) 3,133 - - 276,587 6,466
-----------------------------------------------------------------------------------
264,563 (69,478) 362,899 285,448 195,630 495,752 199,214
(106,514) 22,055 (150,948) (135,135) (101,349) (219,520) (97,637)
-----------------------------------------------------------------------------------
158,049 (47,423) 211,951 150,313 94,281 276,232 101,577
(16,068) (16,110) 30,470 60,093 47,256 16,638 22,267
- - - - - - -
-----------------------------------------------------------------------------------
141,981 (63,533) 242,421 210,406 141,537 292,870 123,844
-----------------------------------------------------------------------------------
2.19 (.98) 2.75 1.99 1.20 3.42 1.26
(.25) (.24) .42 .79 .60 .21 .27
1.94 (1.22) 3.17 2.78 1.80 3.63 1.53
.96 .96 .88 .76 .64 .52 .44
12.78 11.68 15.60 15.88 14.35 13.91 11.19
64,364 66,032 72,390 75,636 78,536 80,677 81,045
17.0% 11.7% 16.9% 15.5% 11.8% 13.6% 11.6%
8.2% (3.0)% 11.0% 10.2% 7.3% 16.1% 7.1%
17.6% (6.9)% 21.4% 18.4% 12.9% 29.1% 14.3%
47% 51% 40% 32% 31% 29% 41%
2,795,298 2,826,099 3,013,537 2,905,382 2,738,484 2,571,432 2,445,924
897,835 998,962 880,686 650,118 551,651 522,750 732,521
851,699 764,512 1,077,996 1,188,480 1,094,943 1,101,274 908,486
93,931 148,897 238,307 213,596 191,895 147,726 171,687
(10,007) 178,517 296,738 56,185 108,647 65,893 (5,692)
78,415 80,110 75,298 57,416 50,025 42,201 35,490
207,392 228,605 221,897 192,045 169,921 155,183 83,463
12,900 16,100 17,100 16,800 16,800 17,300 18,700
65