admin.epiq11.com 0… · Tribune Company Crane H. Kenney Senior Vice President/General Counsel & Secretary 1RIBUNE 435 North Michigan Avenue Chicago. Illinois 60611 fax: 312/222-4206

TRIBUNE

BOARD OF DIRECTORS MEETING October 17, 2007

Master Copy

Confidential

Professionals' Eyes Only Highly Confidential -- Attorneys' Eyes Only

TRB0414676

Tribune Company

Crane H. Kenney

Senior Vice President/General Counsel

& Secretary 1RIBUNE 435 North Michigan Avenue

Chicago. Illinois 60611

fax: 312/222-4206

312/222-2491 e-mail: [email protected]

October 10,2007

Dennis J. FitzSimons Enrique Hernandez, Jr. Betsy D. Holden Robert S. Morrison

William A. Osborn Dudley S. Taft Samuel Zell

Enclosed is a notebook for use at the Board of Directors meeting to be held on the 24th floor of Tribune Tower on Wednesday, October 17, 2007. Audit Committee members will also find an agenda and information for their meeting in the notebooks.

Blue books (3rd quarter financials) will be distributed to the Board via Federal Express on Saturday, October 13th and a draft press release and the PricewaterhouseCoopers quarterly report will be circulated to Audit Committee members at the meeting on Wednesday.

The schedule for Wednesday is as follows:

Date Wed., Oct. 17 Wed., Oct. 17

Meeting Audit Committee Board of Directors

Location McCormick Room Patterson Room

Time 7:30 a.m. 9:00 a.m.

A continental breakfast will be available at the Committee and Board meetings and there will be an informal buffet luncheon for directors immediately following the Board meeting. The luncheon will be held in the McCormick Room on the 24th floor of Tribune Tower. Airport transportation will be available at the conclusion of the lunch.

I look forward to seeing you, and please contact me if you have any questions.

CHKlbap


TRB0414677

Tribune Company

Dennis J. FitzSimons

Chairman, President and

Chief Executive Officer

312/222-3373

435 North Michigan Avenue

Chicago, Illinois 60611

TRIBUNE fax: 3121222-3203

e-mail: [email protected]

Via Federal Express

October 10, 2007

Enrique Hernandez, Jr. Betsy D. Holden Robert S. Morrison

William A. Osborn Dudley S. Taft Samuel Zell

Enclosed is the Board book for our October meeting.

Additionally, here is a brief overview of general business conditions and recent company developments.

Overall

Preliminary third quarter results are in. Diluted EPS of$0.38 was $0.15 higher than our projection due to a combination of better revenues, strong expense controls and several favorable one-time items. On an EBIT basis, we are $30 million ahead of our last projection, including $4.6 million in higher revenues and lower costs, a one-time $18 million increase in copyright royalty revenues. Equity income was over $6 million ahead of projection.

Publishing and Interactive

Current business conditions - Revenue trends improved slightly in the third quarter, down 7% from the prior year, compared to down 9% in the second quarter. Cyclical classified ad trends, particularly in Florida and Los Angeles, continue to be a drag on overall revenue performance with total classified revenue for the quarter down 18%. We are encouraged by improved national advertising in the quarter, up 2% led by better Tribune Media Net sales, the first quarterly increase since 2004. Cash expenses were down 7% for the quarter, which offset over 70% of the revenue decline. While we met our projections, operating cash flow for the quarter was down $19 million, or 10% from last year. Cash flow results vary significantly by market with Florida down over 30%, Los Angeles down 15%, and Chicago up versus last year.

Circulation - Circulation results should be slightly better than the expected results at other large newspapers. Individually paid circulation for Tribune Publishing newspapers is expected to be down 2% daily and 3.5% on Sunday for the six-month ABC reporting period that ended September 30. Circulation revenue trends are improving as several newspapers have recently raised certain home delivery subscription and single copy prices. Circulation revenues for the third quarter are down approximately 4.6% vs. 6.5% and 6.2% in the first two quarters, respectively.

Professionals' Eyes Only TRB0414678 Highly Confidential -- Attorneys' Eyes Only

Page 2

Free Newspapers - This fall we are significantly expanding the distribution of RedEye and Hoy in Chicago and Fin de Semana in Los Angeles to meet reader demand and grow ad revenue. Advertising results have also shown strong growth recently at amNewYork.

Commercial Delivery - In August, the Chicago Tribune entered into an agreement to begin delivering the Sun-Times and its affiliated newspapers in the Chicago market. The 10-year agreement will generate annual revenue and cash flow of approximately $31 million and $9 million, respectively. By early October, we assumed delivery responsibility for all Sun-Times newspapers in the market, except single copy within the city limits of Chicago. We are advancing discussions on shared newspaper delivery in many of our other markets as well.

Newsday and CBA - Newsday has entered into a joint preprint distribution agreement with CBA, which is owned by Harold Matzner. CBA started a competing preprint business after we terminated a sales agency relationship with them in 2005. CBA will distribute preprints for us in New York City and we will distribute for them on Long Island. This new arrangement will improve Newsday's cash flow by over $8 million per year, help Sunday readership and limit exposure under a new "Anti-Litter" law in the city that applies to print products without editorial content. We expect advertisers to react favorably to the combined distribution, and we do not foresee any legal or ethical issues with this new, arms-length CBA relationship. Newsday is currently negotiating exit costs from terminating its current packaging and distribution contracts in New York City.

Newsday Legal Matters - We are finalizing a non-prosecution agreement with the U.S. Attorney's office that resolves any government claims against Tribune, Newsday and Hoy for past circulation misstatements made by former Newsday employees. As reported to the Board earlier, Tribune will pay $15 million as a civil forfeiture and publicly accept the Justice Department's findings that mirror public statements made after Newsday's internal investigation. Presently, we are awaiting formal and final approval of the agreement from the U.S. Attorney for the Eastern District of New York. Sentencing of the former Newsday employees responsible for the circulation misstatements, which has been delayed several times, is scheduled for November 12.

In the past six weeks, two more of the auto dealer plaintiffs in the antitrust suit brought against Newsday have broken ranks and negotiated individual settlements with Newsday. These settlements have caused at least two other larger auto dealers to inquire about resolving their claims. Furthermore, the U.S. District Court for the Eastern District of New York dismissed the fraud claims against Newsday and Tribune, stating that these claims need to be made more specific. With the dismissal and the defections, we anticipate the remaining dealer plaintiffs will pressure their attorneys to reach a global resolution of this matter.

Outsourcing - During the quarter, we signed an outsourcing agreement with Hewlett Packard (HP) for our advertising billing, credit and collections functions. About 140 positions will be eliminated, certain functions will be centralized at the service center in Chicago, and HP will do about 60% of the work in these functional areas, primarily in Costa Rica. We made the


TRB0414679

Page 3

announcement to the impacted employees in September. Transitions will begin in February and run through July of next year. We expect full-year savings of about $8 million.

Labor matters - "First contract" negotiations in the Los Angeles Times pressroom will begin November 1 with the GCC/IBT (Graphics Communications Conference of the International Brotherhood of Teamsters). We are actively preparing for negotiations and any union disruptions. Teamsters' delivery contracts in Chicago and Baltimore will also be up for renewal in December.

Interactive - Third quarter interactive revenues increased 9% over the same period last year. Non-classified revenue was up 30% and classified revenue was up 5%. Tribune Interactive's web sites drew over 16 million average monthly unique visitors during the month of August.

During the third quarter, Tribune Interactive completed deployment of the Gen3 design to enhance users' experience on Tribune's newspaper websites. Gen3 includes new features and functionality, such as user-generated content, improved navigation and search functions, and a simplified look and feel. Gen3 also provides consistent ad positions and a common framework that will enable future website upgrades to be rolled out faster across all our markets.

CareerBuilder's third quarter revenues are projected to grow 18% over the same period last year. CareerBuilder drew 22 million monthly unique visitors during the third quarter, compared to Monster's 12 million and HotJobs' 19 million.

Broadcasting/Entertainment

Current business conditions - Third quarter ad revenue for our television group improved as the quarter progressed with July down 7%, August and September down 4%. Excluding political, the group's ad revenue was down 3% for the quarter. Advertising demand was soft across most ad categories, with the exception of telecom, health care and corporate food/packaged goods. Nonetheless, New York finished the quarter strong, up 10% in September on improved ratings from new syndicated programming and the CW network's fall launch. Chicago also had a good September.

Strong political spending in the fourth quarter of 2006 makes for difficult comparisons as the political demand on inventory caused advertisers to place business earlier last year. Telecom, corporate food/packaged goods and unwired network are the key category drivers for the fourth quarter. Increased demand in the broadcast and cable network scatter markets is making national spot television more efficient for advertisers on a relative basis and driving growth in the corporate and unwired ad categories.

New Syndicated Programming - Our station group successfully launched the top two new syndicated sit-corns, Two and a Half Men and Family Guy, on September 10. The shows are delivering solid rating increases over last October's programming for the group, particularly


TRB0414680

Page 4

in male demographics. We are also encouraged by the week-over-week ratings improvement since the new programming premiered.

CW Network - Although only a few weeks into the new network season, our CW stations are reporting strong results. CW prime revenue was up over 30% in September. Many of our stations' evening newscasts are also benefiting from the improved primetime lead-in.

**********

The Blue Book with our final third quarter results will be sent to you this Friday.

I look forward to seeing you on October 17. If you have questions prior to the meeting, please feel free to call.

Sincerely,

Enclosure


Executive session

TRIBUNE COMPANY BOARD OF DIRECTORS MEETING

WEDNESDAY, OCTOBER 17, 2007 (9:00 A.M.) PATTERSON BOARD ROOM

24th FLOOR, TRIBUNE TOWER

AGENDA

Approve minutes of July 18 and September 28,2007 Board of Directors meetings and August 21, 2007 Special Shareholders meeting 1

Preferred stock dividend 2

Development update 3

• Fonnation of Metro mix N

• Sale of SCN!

• Sale ofKTLA studio

Third-quarter operating results and fourth-quarter projections

Stock perfonnance report 4

5 year projections: base case and sensitivities 5

Debt market update

ESOP transaction update 6

• FCC

• Valuation Research: Solvency Opinion

• Tribune financing

Audit Committee report


TRB0414682

1



JULY 18, 2007

The Tribune Company Board of Directors met at 9:00 a.m. on Wednesday, July 18, 2007, at Tribune Tower, Chicago, Illinois, pursuant to notice. The meeting was attended by Dennis J. FitzSimons, Betsy D. Holden, William A. Osborn, Dudley S. Taft, Miles D. White and Samuel Zell. Enrique Hernandez, Jr. and Robert S. Morrison participated via telephone.

Portions ofthe meeting were attended by Chandler Bigelow, Donald C. Grenesko, Tony Hunter, Crane H. Kenney, Timothy J. Landon, Thomas D. Leach, John E. Reardon, Shaun Sheehan, Scott C. Smith and Kara Walsh.

Mr. FitzSimons acted as chairman of the meeting and Mr. Kenney acted as secretary.

Mr. FitzSimons called the meeting to order at 9:00 a.m.

EXECUTIVE SESSION

The directors met in executive session at the beginning of the meeting.

APPROVAL OF MINUTES

A motion was made, seconded and approved to adopt the minutes of the May 9 and May 21, 2007 Board of Directors meetings and the May 9,2007 Annual Shareholders meeting.

PREFERRED STOCK DIVIDEND

A motion was made, seconded and approved to adopt the following resolutions:

RESOLVED, that there is hereby declared a dividend of$8.9375 per share on the Series D-1 Convertible Preferred Stock of the Company payable on September 13, 2007 to stockholders of record at the start of business on September 13,2007.

SECOND QUARTER OPERATING RESULTS/STOCK PERFORMANCE REPORT

Mr. Grenesko reviewed the second quarter operating results of each of the Company's lines of business and commented on factors impacting the results. Mr. Grenesko next reviewed the performance of the Company's stock and market factors affecting the stock. Mr. Grenesko also reviewed operating performance trends for the Company compared to its industry peers. Mr. Grenesko then answered questions from the Board of Directors.

Professionals' Eyes Only Hi hi Confidential -- Attorne s' E es Onl

TRB0414684

DEVELOPMENT UPDATE

Mr. Leach discussed a written report submitted to the Board prior to the meeting regarding the status of current development activities. A discussion followed Mr. Leach's presentation.

SCNIUPDATE

Mr. Smith reviewed the status ofthe Company's proposed sale of Southern Connecticut Newspapers, Inc. (SCNI). Given the preliminary stage of discussions with several interested parties, management requested authority to sell SCNI on terms and conditions to be approved by the Executive Committee of the Board of Directors. Following discussion, a motion was made, seconded and approved to adopt the following resolution:

RESOLVED, that the Executive Committee of the Board of the Directors is hereby authorized (with full power of delegation) to approve the sale by the Company (or any affiliate thereof) of Southern Connecticut Newspapers, Inc. on terms and conditions to be approved by the Executive Committee.

LEVERAGED ESOP TRANSACTION UPDATE

Messrs. Kenney, Bigelow and Sheehan presented an update on the leveraged ESOP transaction.

n_-1 __ L_-1

Redacted the status of the FCC approval process.

Mr. Bigelow then provided a financing update including a discussion of alternatives for completing the second step financing in the face of tighter market conditions and the Company's current operating results. Mr. Bigelow also reported on certain interest rate hedging transactions undertaken to reduce the Company's interest rate risk. Mr. Bigelow then presented several alternative financing strategies that could enable the Company to repay Term Loan X more quickly and facilitate a successfully syndicated second step financing, including a proposed assetbacked commercial paper facility. Following discussion, a motion was then made, seconded and approved to adopt the following resolutions:

WHEREAS, the Company is party to that certain (i) Indenture, dated as of March 1, 1992 between the Company and Citibank, N.A. (successor to Continental Bank, National Association, Bank of Montreal Trust Company and Bank of New York), as trustee, as supplemented and/or amended (the "1992 Indenture") and (ii) Indenture, dated as of January 1, 1997, between the Company and Citibank, N.A. (successor to Bank of Montreal Trust Company and Bank of New York), as trustee, as supplemented and/or amended (the "1997 Indenture");

2


WHEREAS, on May 17, 2007, the Company entered into a definitive Credit Agreement (the "Credit Agreement") by and among the Company, as borrower, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Merrill Lynch Capital Corporation, as syndication agent, Citicorp North America, Inc., Bank of America, N.A. and Barclay's Bank pIc, as co-documentation agents, and J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and Banc of America Securities LLC, as joint lead arrangers and joint bookrunners;

WHEREAS, it is proposed that the Company or one or more of its Subsidiaries (collectively, "Tribune") enter into one or more receivables financing facilities in an aggregate amount not to exceed the amount permitted for such purposes by the Credit Agreement (each a "Receivables Facility"), each which Receivables Facility is expected to provide Tribune with a flexible and low cost source of liquidity;

WHEREAS, each Receivables Facility is expected to be entered into through a newlyformed, wholly-owned, bankruptcy-remote, special purpose subsidiary (each such subsidiary, a "Receivables SPE"), which Receivables SPE will (i) obtain, by way of transfer, assignment, purchase or other disposition, receivables, unbilled revenue related thereto and other assets related thereto (collectively, "Receivables") from Tribune and (ii) transfer, assign, sell, pledge or otherwise dispose of such Receivables in connection with a financing transaction related thereto;

WHEREAS, in connection with each such Receivables Facility, Tribune may act as an originator and/or a servicer ofthe Receivables subject to such Receivables Facility; and

WHEREAS, it is deemed to be in the best interests of Tribune to enter into Receivables Facilities to obtain flexible and low cost sources of liquidity.

NOW, THEREFORE, BE IT RESOLVED, that each Receivables Facility be, and hereby is, approved, ratified and adopted in all respects, including the formation of each Receivables SPE, the transfer, assignment, sale or other disposition of the Receivables from Tribune to Receivables SPE, the transfer, assignment, sale, pledge or other disposition from Receivables SPE in connection with a financing transaction related thereto, the origination and servicing of such Receivables by Tribune and any related actions or transactions (collectively, the "Receivables Facility Transactions");

FURTHER RESOLVED, that the proper officers of the Company be, and each of them hereby is, authorized, directed and empowered, in the name of and on behalf of the Company, to (i) execute for, in the name of and on behalf of the Company, any and all instruments, documents and agreements deemed necessary or desirable by the liquidity providers under the Receivables Facilities (the "Liquidity Providers") in order to evidence the Receivables Facility Transactions properly in accordance with any requirements established by such Liquidity Providers, including renewals, extensions and/or

3


amendments of any such instruments, documents and agreements (individually and collectively, the "Receivables Facilities Documents"), all in the fonn required by the Liquidity Providers and approved by the proper officers ofthe Company executing same, the execution of same by such officers to constitute conclusive evidence of the approval of same, (ii) take from time to time any actions deemed necessary or desirable by the proper officers of the Company to establish the Receivables Facilities and to 'evidence the Receivables Facility Transactions properly in accordance with the Receivables Facilities Documents and any other requirements established by the Liquidity Providers, and to cause the Company to enter.into and perform all of its obligations pursuant to the Receivables Facilities Documents or otherwise in connection with the Receivables Facility Transactions and (iii) execute from time to time renewals, extensions and/or amendments to the Receivables Facilities Documents;

RESOLVED, that the proper officers of the Company be and hereby are authorized, directed and empowered, in the name of and on behalf of the Company, to take any and all such actions and to do any and all such things, including without limitation the execution and delivery of all such further agreements, amendments to the Receivables Facilities Documents, documents, certificates, instruments and undertakings, and to incur such fees and expenses, as in the judgment of any of the proper officers may be deemed necessary, desirable, advisable, expedient, convenient or proper to carry out or fulfill the purposes and intent of the foregoing resolutions, and all acts and prior acts of such officers in any way relating to or arising from, or that are in confonnity with the purposes and intent of, these resolutions and the instruments and agreements referred to herein and therein are hereby approved, ratified and confinned in all respects;

FURTHER RESOLVED, that all actions heretofore taken by any ofthe directors, officers, employees, representatives or agents of the Company or any of its affiliates in connection with the foregoing resolutions be, and each of the same hereby is, ratified, confinned and approved in all respects as the act and deed ofthe Company; and

FURTHER RESOLVED, that for purposes of the 1992 fudenture and the 1997 fudenture, including Section 10.07 thereof, the Board hereby approves the exclusion of each Receivables SPE from the definition of "Restricted Subsidiary" in each of the fudentures.

SUN-TIMES NEWS GROUP DISTRIBUTION AGREEMENT

Mr. Hunter outlined the tenns of a proposed distribution outsourcing arrangement between SunTimes News Group (STNG) and Chicago Tribune Company (CTC) whereby STNG would outsource to eTC all home delivery and suburban single-copy delivery of the Chicago SunTimes and most ofSTNG's suburban publications. A discussion followed Mr. Hunter's presentation.

4


METROMIX UPDATE

Ms. Walsh presented an update on the roll-out of Metromix to all of the Company's newspaper markets and the status of negotiations for a proposed joint venture with Gannett that would add Gannett's newspaper markets as affiliates. A discussion followed Ms. Walsh's presentation.

COMPENSATION & ORGANIZATION COMMITTEE REPORT

Mr. Morrison reported on the business discussed at the Compensation & Organization Committee meeting held earlier in the day.

Mr. Morrison noted that the Committee reviewed an executive compensation update presented by management. The update covered expected 2007 MJP payouts based on year-to-date operating results and a recap ofthe special incentive and long-term equity incentive awards previously approved by the Committee. A discussion followed Mr. Morrison's report.

NOMINATING & GOVERNANCE COMMITTEE REPORT

Mr. Hernandez reported on the business discussed at the Nominating & Governance Committee meeting held earlier in the day.

Mr. Hernandez reported that the Committee reviewed a potential Board candidate, but deferred formal action pending further review with outside counsel.

Mr. Hernandez next reported that the Committee reviewed the Board's size, structure and meeting frequency and agreed that no changes were required at this time.

Mr. Hernandez then reported that the Committee recommended that Mr. Zell be appointed to the Nominating & Governance Committee to fill the vacancy in the Committee resulting from Mr. Reyes resignation from the Board. ill making this recommendation, the Committee noted that it determined that Mr. Zell is independent under both the NYSE listing standards and the categorical standards for independence included in the Board Governance Guidelines. Following discussion, a motion was made, seconded and approved to adopt the following resolutions:

RESOLVED, that, in the business judgment of this Board, Samuel Zell is "independent" under the New York Stock Exchange listing standards and the categorical standards for independence set forth in the Board Governance Guidelines; and

FURTHER RESOLVED, that Samuel Zell is appointed as a member of the Nominating & Governance Committee of the Board of Directors to hold office until the next Annual Meeting of Shareholders and until his successor is appointed.

5


Mr. Hernandez also reported that the Committee recommends amending the By-Laws to eliminate the provisions of Article VIII governing the Chandler Trust director representatives (which are no longer operative due to their departure from the Board) and to reduce the general size of the Board from between 12-16 members to between 8-12 members. Following discussion, a motion was then made, seconded and approved to adopt the following resolution:

RESOLVED, that the amended By-Laws, substantially in the form presented at this meeting, are hereby adopted and approved.

Finally, Mr. Hernandez reported on the annual reviews of the Board Governance Guidelines and Committee charter and noted that the Committee is not recommending any changes to either the Governance Guidelines or the Committee charter at this time.

A discussion followed Mr. Hernandez's report.

ADJOURNMENT

There being no further business to come before the Board, the meeting was adjourned at 11 :50 a.m.

Secretary

6


TRB0414689


SEPTEMBER 28, 2007

The Tribune Company Board of Directors met at 8:00 a.m. on Friday, September 28,2007, by conference telephone, pursuant to notice. The following directors participated in the meeting: Dennis J. FitzSimons, Enrique Hernandez, Jr., Betsy D. Holden, Robert S. Morrison, Dudley S. Taft and Samuel Zell.

Chandler Bigelow, Donald C. Grenesko, Crane H. Kenney and Shaun Sheehan also participated

in the meeting.

Mr. FitzSimons acted as chairman ofthe meeting and Mr. Kenney acted as secretary.

Mr. FitzSimons called the meeting to order at 8:00 a.m.

UPDATE ON VALUATION RESEARCH

Mr. Grenesko provided an update on the Company's recent presentations to Valuation Research Corporation (VRC) in connection with the solvency opinion to be rendered by VRC at the closing of the leveraged ESOP transaction. Mr. Grenesko also discussed planned meetings with Morgan Stanley to provide updated Company performance information and projections. Mr. Grenesko then answered questions from the Board.

FINANCING UPDATE

Mr. Bigelow reviewed the status ofthe Company's second step financing and conversations among the lead banks regarding the financing. Mr. Bigelow also reviewed the current debt market and reported transactions that were renegotiated as a result of market conditions. Mr. Bigelow then answered questions from the Board.

LEGAL UPDATE

Mr. Kenney Redacted

_ Redacted . Mr. Sheehan then reviewed the Company's efforts with members of Congress and FCC commissioners to expedite the review process. Messrs. Kenney and Sheehan then answered questions from the

Board.


TRB0414690

BUSINESS UPDATE

Mr. FitzSimons then reviewed current business trends and updated the Board on strategic developments, including resolution of the Matthew Bender tax dispute, the Cubs disposition and initial results from the Company's new television programming. Mr. FitzSimons then answered questions from the Board.

ADJOURNMENT

There being no further business to come before the Board, the meeting was adjourned at 8:30 a.m.

Secretary

2


TRB0414691

TRIBUNE COMPANY SPECIAL MEETING OF STOCKHOLDERS

AUGUST 21, 2007

A Special Meeting of Stockholders of Tribune Company was held at Tribune Tower, Chicago, Illinois, on August 21,2007, at 9:00 a.m., pursuant to notice. Dennis J. FitzSimons, Chairman, President and Chief Executive Officer, acted as Chairman of the meeting and Crane H. Kenney, Senior Vice President, General Counsel & Secretary, acted as Secretary of the meeting.

Mr. FitzSimons welcomed the stockholders and called the meeting to order.

BUSINESS OF THE MEETING

Mr. FitzSimons noted that lawful notice ofthe meeting had been given and that a quorum was present. He then declared the polls open.

Mr. FitzSimons summarized the proposal before the stockholders - to adopt the Agreement and Plan of Merger dated as of April 1, 2007 by and among Tribune Company, GreatBanc Trust Company, Tesop Corporation and EGI-TRB, L.L.c., thereby approving the merger of Tesop Corporation into Tribune Company resulting in Tribune Company becoming wholly owned by the Tribune Employee Stock Ownership Plan.

Mr. FitzSimons then asked ifthere were any questions or comments concerning the proposal and answered questions from the floor. After all questions were answered, Mr. FitzSimons declared the polls closed.

Mr. FitzSimons reported that the preliminary vote indicated'that approximately 97% of the shares voted were cast in favor of the proposal and that the merger agreement and the merger have been approved by the Tribune stockholders. The preliminary vote in favor of the merger represented approximately 65% of the total shares outstanding and entitled to vote at the meeting.

A copy of the final Certification of Inspectors is attached to and incorporated into these minutes as Exhibit A.

ADJOURNMENT

There being no further business, the meeting was adjourned at 9:50 a.m.

Secretary


TRB0414692

TRIBUNE COMPANY AUGUST 21, 2007 SPECIAL MEETING OF SHAREHOLDERS

CERTIFICATION OF INSPECTORS

The undersigned hereby certify that at the Special Meeting of Shareholders of Tribune Company held on August 21, 2007, the following votes were cast as to the matters listed below:

1. ADOPTION OF THE MERGER 82,631,710 AGREEMENT AND APPROY AL OF THE MERGER

2. ADJOURNMENT OF MEETING TO SOLICIT ADDITIONAL PROXIES

78,115,253

AGAINST

1,551,729

AGAINST

5,850,639

Witness the due execution hereof this 21 st day of August, 2007. )


ABSTAIN

689,452

ABSTAIN

905,767

TRB0414693

2


TRIBUNE COMPANY

PROPOSED BOARD OF DIRECTORS RESOLUTIONS

(Preferred Dividend)

RESOLVED, that there is hereby declared a dividend of$8.9375 per share on the Series D-l Convertible Preferred Stock of the Company payable on December 13,2007 to stockholders of record at the start of business on December 13, 2007.

DPE 10/10107


TRB0414695

3


TRIBUNE COMPANY DEVELOPMENT UPDATE

This report summarizes the status of current development activities. Resolutions requiring Board approval are attached to this report.

PUBLISHING AND INTERACTIVE

New Interactive Joint Ventures

Metromix. As presented to the Board in July, Tribune is launching a national entertainment channel under the Metromix brand. We have already launched in Los Angeles, N ew York, Chicago, Baltimore and South Florida, and have reached an agreement in principle with Gannett to bring them in as a partner. Once we finalize all the details of this joint venture, we will begin launching Metromix in Gannett's newspaper and television markets while continuing to roll it out in Tribune's markets.

As with CareerBuilder, our Metromix-affiliated newspapers and television stations will begin to generate incremental cash flow a few years before the joint venture itself will break-even. This is largel y because the bulk of the technology development and marketing costs will be funded centrally through the joint venture. We anticipate the venture will need approximately $36 million in funding through 2008, with Tribune's share being $18 million. Of that $18 million, we

Joint Venture Results

Revenue Expenses / Capital

Cash Flow

TRB's 50% share ofCF

Tribune Local Results Revenue

Expenses

Cash Flow

Net Tribune Cash (JV + Local)

Metromix Financial Summary ($ in M)

$0.2 13.2

(13.0)

($6.5)

$3.5

5.0

(1.5)

$3.6 24.1

(20.4)

($10.2)

$10.0 10.0

(0.0)

$9.2 22.0

(12.9)

($6.4)

$22.4

12.5

9.9

$18.1 22.8

(4.7)

($2.4)

$36.5

20.3

$25.6

1.6

$0.8

$43.6

25.6

expect to fund $3 million in 2007 and the remainder in 2008. Board resolutions authorizing this funding are attached.

Ad Network. Tribune and Gannett continue to discuss the creation of an online advertising network that would include each of our companies' newspaper.com websites and, hopefully, the sites of other newspaper groups. We believe a single national online sales organization that could provide large national advertisers with standard ads across the network would increase our share of online display, rich media and video advertising.

In recent weeks, several other newspaper companies, including Hearst and Cox, have joined in these discussions and are enthusiastic about forming such a network. Interestingly, Hearst and Cox are part of the group of newspaper companies that announced an advertising and content


TRB0414697

deal with Yahoo in May. Despite the Yahoo partnership, Hearst and Cox see the value in a network of local media sites that can attract premium advertisers and pricing.

We hope to reach preliminary agreement on terms by the end of October so we can launch at the beginning of 2008. Once we reach agreement with Gannett, Hearst and Cox, we believe other peer companies will join the network, further increasing its national reach and the value of its ad inventory. Having a larger network will also increase our negotiating leverage with the large online advertising players, such as Yahoo, Google, Microsoft and AOL, should we ever decide to align with them. Having one of these major Internet companies as a partner could further strengthen the network, as each has a sophisticated advertising technology platform.

Other Content Verticals. We continue to evaluate the creation of new national content channels. We are currently studying the feasibility of both a national video news channel and a national sports site with the New York Times, Washington Post and Gannett using the rich, local content of our newspapers. We are also internally reviewing other potential national verticals including travel and parenting.

Classified Ventures

Over the past few years, we have taken many steps to strengthen our presence in the online real estate marketplace. In 2005, Classified Ventures ("CV"), our joint venture with several other newspaper companies, acquired HomeGain.com, a leader in resale lead generation. In 2006, Tribune acquired ForSaleByOwner.com, a leader in the online for-sale-by-owner area. CV has

\ also invested in its Homescape product, which is the platform on which our newspaper.coms' real estate businesses are built.

Despite these actions, Tribune, Gannett and some of our other CV partners feel there is more potential in the online real estate category and would like to accelerate our efforts. In that regard, we have been discussing the idea of splitting CV into two entities - one focused on automotive and the other focused on real estate. The automotive entity would operate the successful cars.com business in the same manner in which it is operated today. The real estate entity would operate a revamped business that would consist ofCV's current real estate assets (Homescape, HomeGain, Apartments.com) backed by a more aggressive affiliate model and new assets

Classified Ventures Auto / RE 2007P Financials

($ in M)

Revenue Expenses

Net Income

Auto

$163

ill 12

RE

$95 97

(2)

that would be acquired or developed using new capital contributed by the partners. In connection with the split-up, Tribune may sell our ForSaleByOwner.com business and OpenHouses.com domain name to the new real estate entity in order to consolidate our real estate assets.

We believe separating CV into two entities would provide the structural and operating flexibility needed to be more aggressive in the real estate area. In the past, some of our CV partners have opposed a more aggressive real estate strategy for fear that it would be costly and if they chose

\, not to participate in funding those costs, their ownership interest in cars.com would be diluted.

2


TRB0414698

Under the proposed structure, those partners who do not want to fund an aggressive real estate strategy would become smaller owners of the real estate entity but would keep their current ownership stakes in the automotive entity. Governance rights would be closely aligned with each partner's ownership stake to ensure that non-funding owners could not block action by the venture.

We are still discussing this proposal with our partners and will keep you informed as developments occur.

seNI

In July, the Board approved the sale of Southern Connecticut Newspapers, Inc. ("SCNI") on terms and conditions to be approved by the Executive Committee. At that time, we had received preliminary non-binding expressions of interest from several interested parties valuing the business at or slightly above $60 million.

We recently reached an agreement with The Hearst Corporation and MediaNews Group, Inc. to sell them SCNI for $62.4 million, subject to customary pro-ration adjustments. Hearst will acquire the business and enter into a management agreement with MediaNews Group. Hearst's News-Times in Danbury, CT is also managed by MediaNews, which owns the Connecticut Post in Bridgeport, CT. Importantly, HearstlMediaNews has agreed to assume SCNI's collective bargaining agreement with the United Auto Workers. Gannett's refusal to assume that contract ultimately led to the termination of our earlier agreement to sell SCNI to Gannett. The transaction excludes SCNI's real estate, which consists of an office building and print facility in Stamford and an office building in Greenwich. We believe the value of the real estate is at least $20 million.

We have reached agreement on all major terms and have filed for Hart-Scott-Rodino clearance under a letter of intent. We expect the transaction to close in late October. As the Executive Committee has not yet approved the transaction, Management requests approval from the full Board. Board resolutions approving this transaction are attached.

Recycler

As previously discussed, the Los Angeles Times is finalizing the sale of its Recycler classifieds business to Target Media Partners for approximately $1 million plus working capital. Due to our high tax basis, the sale will trigger a large capital loss, resulting in a tax benefit of approximately $65 million. We expect to close this transaction by the middle of October.

All Direct Mail Services

The Los Angeles Times has signed a letter of intent to acquire the assets of All Direct Mail Services, Inc. ("ADMS") for $2.5 million. ADMS is a family-owned direct mail business located in Sylmar, CA. This acquisition will allow Tribune Direct to expand its presence in Southern California by adding over 200 new clients and $7.5 million of revenue. There is also

\ an opportunity to expand Tribune Direct's overall business by providing ADMS' clients with a national distribution opportunity.

3


TRB0414699

\

The transaction is subject to satisfactory completion of due diligence, as well as the negotiation of mutually acceptable transaction agreements. We hope to complete this purchase by the end of the year.

BROADCASTING AND ENTERTAINMENT

Chicago Cubs

Our process to sell the Chicago Cubs and our 25% interest in Comcast SportsNet Chicago continues. We are currently finalizing an offering memorandum and pre-clearing potential buyers with Major League Baseball. We will provide an update at the Board meeting.

Sale of KTLA Studio Lot

Management requests authority to sell the KTLA Studio Lot (the "Lot") and three nearby off-site parking lots on terms and conditions to be approved by the Executive Committee of the Board of Directors. We have retained Cushman & Wakefield to market the properties, which we believe are worth $125-150 million. Cushman has contacted over 30 potential buyers, prepared an offering memorandum and requested that preliminary expressions of interest be submitted during the week of October 8th

• Sixteen potential buyers have signed confidentiality agreements and are conducting preliminary due diligence. We plan to enter into final negotiations with one of the buyers and sign a contract within 30 days.

Tribune purchased the Lot from Gene Autry for $33 million in 1988 (2 years after Tribune bought the station from KKR, which had previously purchased it from Mr. Autry). The KTLA location in Hollywood was important from an operating standpoint, providing good access to studio guests, news crews, customers, vendors, and employees in a market with difficult traffic patterns. Additionally, at the time, Tribune Entertainment was ramping up production and was in need of studio space. Under those circumstances, owning the Lot conferred significant advantages.

We no longer believe that such an investment is consistent with Tribune's strategic focus nor would it provide a financial rate of return comparable with other uses of our capital. In addition, the Hollywood real estate market is currently in a significant boom cycle, making it a good time to sell. We expect that a new owner will completely redevelop the 10.5 acre property into a mix of high-rise offices, commercial space and residential units and may also continue to operate the television production facilities. We anticipate that KTLA will lease back its current space for 2-5 years and have the right to negotiate a new longer-term lease with the buyer. While KTLA would like to remain in the Hollywood area, it is not essential that it remain on the current site and we will also explore other potential locations for a long-term KTLA lease. Tribune Entertainment will cease operating the studios either at the time of sale or upon the redevelopment of the property. This business is currently a small part of our overall broadcasting business and its importance has diminished due to our strategy ofpartnering with large television producers (Warner Bros., Sony, NBC Universal) to develop new original programming for our station group.

4

Professionals' Eyes Only TRB0414700 Hi hi Confidential -- Attorne s' E es Onl

We intend to structure the transaction as a Section 1031 like-kind exchange in conjunction with the purchase of the TMCT real estate in the first half of2008. This will allow Tribune to defer the capital gain on the sale of the Lot. Resolutions delegating authority to the Executive Committee of the Board to approve the sale of the Lot and the related leaseback transactions are attached.

TLIDGK 10/10107


5

TRB0414701

TRIBUNE COMPANY


(Formation of Metromix Joint Venture)

RESOLVED, that the Board of Directors of the Company hereby authorizes the Company (or any affiliate thereof) to invest up to $18 million (in a combination of cash and assets) in connection with the formation of an interactive joint venture with Gannett Co., Inc. under the Metromix brand (the "Transaction");

FURTHER RESOLVED, that the Chairman, President and Chief Executive Officer, any Senior Vice.President or any Vice President of the Company, the President, the Executive Vice President or any Vice President of Tribune Publishing Company, the President, any Senior Vice President or any Vice President of Tribune Interactive, Inc. or the President, any Senior Vice President or any Vice President of Chicago Tribune Company (the "Authorized Officers"), be and each of them hereby is, authorized (with full power of delegation) in the name and on behalf of the Company (or any affiliate thereof) to negotiate the terms of, document and execute agreements and instruments evidencing the Transaction as such Authorized Officer executing the same may approve, such approval to be conclusively evidenced by such officer's execution thereof;

FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is, authorized (with full power of delegation) in the name and on behalf of the Company (or any affiliate thereof) to make all such arrangements, to do and perform all such acts and things, to execute and deliver all such agreements, certificates, instruments and documents, to make all governmental, regulatory or other filings, to pay all such amounts, and to take all such actions as they may deem advisable or necessary in connection with the foregoing resolutions and in order to fully effectuate the purposes of the foregoing resolutions; and

FURTHER RESOLVED, that all actions previously taken by or on behalf ofthe Company (or any affiliate thereof) in connection with the matters set forth in these resolutions be, and hereby are, ratified, confirmed and approved in all respects.

MWH 10/10/07


TRB0414702

TRIBUNE COMPANY


(Sale of Southern Connecticut Newspapers, Inc.)

RESOLVED, that the Board of Directors of the Company hereby approves the sale by the Company (or any affiliate thereof) of Southern Connecticut Newspapers, Inc. ("SCNI") for not less than $62 million (exclusive of the real property owned by SCNI) (the "Transaction");

FURTHER RESOLVED, that the Chairman, President and Chief Executive Officer, any Senior Vice President or any Vice President of the Company; the President, the Executive Vice President or any Vice President of Tribune Publishing Company or the President or any Vice President of SCNI (the "Authorized Officers") be, and each of them hereby is, authorized (with full power of delegation) in the name and on behalf of the Company (or any affiliate thereof) to negotiate, document and execute agreements and instruments evidencing the Transaction as such Authorized Officer executing the same may approve, such approval to be conclusively evidenced by such officer's execution thereof;

FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is, authorized (with full power of delegation) in the name and on behalf of the Company (or any affiliate thereof) to make all such arrangements, to do and perform all such acts and things, to execute and deliver all such agreements, certificates, instruments and documents, to make all governmental, regulatory or other filings Including, without limitation, filings pursuant to the Hart-Scott-Rodino Antitrust Improvements Act), to pay all such amounts, and to take all such actions as they may deem advisable or necessary in connection with the matters set forth in these resolutions and in order to fully effectuate the purposes of these resolutions; and

FURTHER RESOLVED, that all actions previously taken by or on behalf of the Company (or any affiliate thereof) in connection with the matters set forth in these resolutions be, and hereby are, ratified, confirmed and approved in all respects.

MWH 10110/07


TRB0414703

TRIBUNE COMPANY


(Sale of KTLA Studio Lot)

RESOLVED, that the Executive Committee of the Board of Directors is hereby authorized (with full power of delegation) to (i) approve the sale by the Company (or any affiliate thereof) of the KTLA Studio Lot located at 5800 Sunset Boulevard, Hollywood, California and the three nearby off-site parking lots (the "Real Property") and all related assets utilized in connection with the television studio production business (together with the Real Property, the "Property"), in each case, on terms and conditions to be approved by the Executive Committee and (ii) to structure the sale of the Real Property consistent with a deferred like-kind exchange under Section 1031 of the Internal Revenue Code;

FURTHER RESOLVED, that the Executive Committee of the Board of Directors is hereby authorized (with full power of delegation) to approve the leaseback by the Company (or any affiliate thereof) of all or a portion of the Property, in each case, on terms and conditions to be approved by the Executive Committee; and

FURTHER RESOLVED, that the Executive Committee of the Board of Directors is hereby authorized (with full power of delegation) to take all necessary actions such that the transactions described above comply with the terms of each of the Company's indentures, including making a determination as to whether the Property, or any portion thereof, constitutes "Principal Property"

) as defined in the following indentures of the Company: (i) Indenture, dated as of January 1, 1997, between the Company and Citibank, N.A. (successor to Bank of Montreal Trust Company and Bank of New York), as trustee, (ii) Indenture, dated as of January 30, 1995, between the Company (as successor pursuant to the First Supplemental Indenture to The Times Mirror Company, f/k/a New TMC Inc.) and Citibank, N.A. (successor to Bank of New York, Wells Fargo Bank, N.A. and First Interstate Bank of California), as trustee, (iii) Indenture, dated as of March 19, 1996, between the Company (as successor pursuant to the Second Supplemental Indenture to The Times Mirror Company) and Citibank, N.A., as trustee, and (iv) Indenture, dated as of March 1, 1992 between the Company and Citibank, N.A. (successor to Continental Bank, National Association, Bank of Montreal Trust Company and Bank of New York), as trustee.

DPE 10/10107

Professionals' Eyes Only . . -- Attorne s' E es Onl

TRB0414704

4


TRIBUNE COMPANY STOCK PERFORMANCE REPORT

As of October 9, 2007

Tribune

S&P 500

S&P PUB

-30 _____ .. ___ .. __ ._ .. ___ .. _-' .. ____ .... __ ._. ____ ..:._. __ .. _____ ._. _______ ..

January April July October

STOCK PERFORMANCEITRADING ACTIVITY

Total Returns (Qrice change Qlus dividends)

Annual YID 3 year 5 year

-5.5% -11.0% -5.3%

11.9% 13.8% 17.1%

-14.7% -4.0% 1.8%

Since our July report to the board, the stock has traded in the $27-$29 range. Year-to-date average daily volume is 2.0 million shares, although it has slowed recently with average daily volume in September of about 800,000 shares.

Short interest in TRB averaged 5.6 million shares or just over 5% of shares outstanding in the August-September period. This is in line with a recent report from Wachovia Securities which said short interest in the newspaper group "remains relatively immaterial with levels under 8% average of free float (shares outstanding)."

Following our October 1 st announcement regarding the settlement of the Matthew Bender tax case, several analysts reiterated their opinion that our transaction will close. For example, Deutsche Bank stated, "We expect quick financing approval from the banks following a check of the leverage and coverage tests."

We plan to release third quarter earnings on October 24.


\

)

VALUATION

TRIBUNE COMPANY STOCK PERFORMANCE REPORT

In the $28 range, the stock trades at a multiple of approximately 7x enterprise value12007 operating cash flow based on current internal projections. While the newspaper group average multiple is in the 9x range, when stocks that are not trading on fundamentals are excluded (like DJ), the average group multiple is approximately 7.9x.

Belo's stock price increased approximately 12% in the week following the company's announcement that it would separate its newspaper and television businesses and spin off the newspaper group into a publicly-traded company. Belo's announcement had little impact on the rest of the newspaper group.

EVIEBITDA Multiples

Sept

Tribune 7.2x

Cable 9.0.x

Entertainment 8.9x

Newspapers 9.1x

Radio 9.9x

Television 11.6x

Source: Merrill Lynch; based on 2007 estimated operating cash flow

Tribune is covered by 12 analysts. Eight analysts rate Tribune "hold" with two at "underperform." Merrill Lynch and Morgan Stanley are restricted because of involvement in our transaction. Bank of America recently launched coverage of the newspaper group, but is not covering TRB given our transaction.

SHAREHOLDER ANALYSIS

There has been very little institutional stock activity during the third quarter. Due to our pending transaction, hedge funds continue to be the most active buyers and sellers of TRB.

TOP 10 SHAREHOLDERS (Shares in millions)

% Shares Held ofS/O Style

1. McCormick Tribune Foundation 11.9 11% nla 2. Employees 11.0 9% nla 3. Stark Asset Management 9.2 7% Hedge 4. T. Rowe Price Associate 7.9 6% Active 5. Perry Partners 4.1 3% Hedge 6. Vanguard Group 3.0 2% Index 7. Caxton Corporation 2.6 2% Hedge 8. Barclays Global Investors 2.4 2% Index 9. Sowood Capital Management 2.2 2% Hedge

10. State Street Global Advisors 2.1 2% Index

2


TRIBUNE COMPANY BENCHMARK COMPANY TOTAL RETURNS

Annual YTD I-Year 3-Year 5-Year

Dow Jones l 59.8% Dow Jones 79.9% Sinclair 25.6% Dow Jones 15.4%

Sinclair2 29.6% Sinclair 71.9% Dow Jones 16.5% Scripps 6.6% Belo 8.9% Belo 22.6% Hearst-Argyle 1.8% Washington Post 5.1% Washington Post 8.3% Hearst-Argyle 10.4% Belo -2.9% Sinclair 4.6% Hearst-Argyle 0.9% Washington Post 8.2% Washington Post -3.4% Hearst-Argyle 2.5% Tribune -5.5% Scripps -10.1% Scripps -3.5% Belo 1.0% Scripps -12.5% New York Times -10.5% Tribune -11.0% Tribune -5.3% New York Times -16.1% Tribune -11.5% Gannett -17.2% Gannett -6.0% Gannett -24.1% Gannett -18.9% New York Times -18.0% New York Times -11.9% McClatchy -54.0% McClatchy -52.9% McClatchy -34.0% McClatchy -17.9%

S&P 500 11.9% 18.1% 13.8% 17.1% S&P Pub -14.7% -6.2% -4.0% 1.8%

1 On May 1, News Corp. made an unsolicited bid for Dow Jones. Dow Jones stock rose sharply and has maintained at a total return of nearly 54% year-to-date.

'\~inclair's stock price has risen from $10.50 to $15.00 due to an improved outlook including debt repayment, lower programming costs and retransmission consent agreements.

\

)

3


5


TRIBUNE Five-Year Financial Outlook

October 2007


TRIBUNE COMPANY FIVE-YEAR FINANCIAL OUTLOOK

Table of Contents

• Section 1 - Summary. . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

• Section 2 - Base case ..................................................................... 7

• Section 3 - Downside case ............................................................... 17

• Section 4 - Upside case. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . ..... 24

• Section 5 - Three operating cases under a "flex" scenario ........................... 29

• Section 6 - Appendix

o Chart 18 - Update on Cubs sales process .............. ......... ................ 32 o Chart 19 - Summary of real estate opportunities.......................... ..... 33 o Chart 20 - Summary of disposition opportunities.................. ........... 34 o Chart 21 - Tribune Publishing Historical recession analysis................ 35 o Lehman Brothers (Huber) research report dated August 14, 2007

2


TRB0414711

SECTION 1 - SUMMARY

This report provides information and analyses that supports our current five-year financial projections through 2012. We have included consolidated financial analyses, as well as detailed projections and key assumptions from our Publishing and Broadcasting groups. Our analysis covers three operating scenarios: (i) a management base case, (ii) a downside case and (iii) an upside case. In addition, we have run each of these three operating scenarios two ways: (a) assuming we finance the second step of the Leveraged ESOP transaction as planned and (b) assuming the four lead underwriting banks "flex" us into more expensive financing if they are unable to syndicate our planned second step bank loans and high-yield bonds.

Section 2 of this report compares our current 2007 projection to the original 2007 operating plan that was approved by the Board of Directors in February. Our current projection for cash available for debt repayment is about $900 million higher than our original projection, despite a decline of $122 million in operating cash flow relative to our original plan. The primary contributors to the increase in our cash available include:

• $338 million of proceeds received from the IRS related to our Matthew Bender settlement that was not in our original plan

• $250 million increase in our estimated net proceeds from the sale of the Cubs, Wrigley Field and our 25% stake in Comcast SportsNet to $850 million

• $125 million of net proceeds from the sale of the KTLA studio lot which was not planned • $118 million increase in free cash flow primarily due to lower capital expenditures, cash

taxes and cash interest payments • $75 million of reduced investments in 2007

We plan to use about half of this additional cash to reduce the total amount of borrowings required to fund the second step of the Leveraged ESOP transaction from $4.2 billion down to $3.7 billion. The remaining cash will be used to repay Term Loan X.

Chart 1 - Projected Debt Outstanding ($ in millions)

2nd Step Cubs/CPt Current Financing FCF(I) 2007PF 2008 ~ 2012

Guaranteed Debt (1) Revolver $0 $0 $0 $0 $0 $0 (2) Term Loan X 1,400 (1,274) 126 (3) Term Loan B 5,501 2,105 (14) 7,592 7,453 6,316 (4) High-Yield Notes 1,600 1,600 1,600 1,600 (5) Total Guaranteed Debt 6,901 3,705 (1,288) 9,319 9,053 7,916 (6) Existing notes 1,504 (5) 1,499 1,202 755 (7) Asset-backed CP 300 300 300 300 (8) TMCT mortgage 150 150 (9) Total Debt (x. PHONES & Zell Note) $8,405 $3,705 ($993) $11,117 $10,705 $9,121

(I) Assumes fourth quarter 2007 free cash flow. proceeds from Bender settlement, sale of Cubs/Wrigley Field/Comcast SponsNet and issuance of $300M of asset backed commercial paper.

3


TRB0414712

Sections 3 and 4 of the report include our downside and upside operating scenarios. Our downside Publishing revenue projections are based on the most pessimistic sell-side analyst on the Street (Craig Huber at Lehman Brothers). Huber assumes that Publishing revenues fall 3.3% per year for five consecutive years. While we don't agree with Huber's assessment of our business prospects, we have used his assumptions to illustrate that even in the most pessimistic operating environment, we maintain compliance with our financial covenants.

In our downside case, we mitigate Huber's revenue declines through significant cost reductions, including a possible salary freeze and the elimination of management bonus payments. In addition, we have the option to defer cash interest payments on our PHONES for a five year period, which would save us about $25 million in cash annually during the deferral period. We would also reduce our capital expenditure and investment spending in this scenario. Depending on the severity of the downturn, we could also consider selling assets which are shown on Chart 20 in the Appendix of this report. It is important to note that we are already ahead of Huber's projections as our third quarter 2007 operating cash flow from continuing operations exceeded his estimate by about $35 million, or 15%.

Section 5 shows our three operating scenarios assuming a "flexed" second step. In 2008, the "flex" has little impact on interest expense since we would fund the merger with a twelve-month bridge loan at a rate similar to the non-flex scenario. However, in 2009, the "flex" case adds about $100 million of additional interest expense because the bridge loan converts into 12.5% seven-year notes. These notes will be held by our lead banks if we are unable to refinance the bridge through a public high-yield bond offering. Importantly, as Charts 2 and 3 on the following pages show, even in a downside operating scenario that is "flexed," we will be in compliance with the financial covenants contained in our credit agreement without having to sell any assets other than those already identified.

In addition, in order to consummate the merger, the Company must meet these financial covenants on a pro forma basis, assuming that all of the debt issued in connection with steps one and two of the Leveraged ESOP transaction had been outstanding for twelve months. Assuming the second step of the transaction closes in the fourth quarter, we will meet these tests and have approximately $250 million of operating cash flow cushion.

We have reviewed these financial projections with our four lead underwriting banks (JPMorgan, Merrill Lynch, Citigroup and Bank of America), our solvency firm (Valuation Research Corporation), Morgan Stanley and Equity Group. We plan to review these projections with Moody's and Standard & Poor's on October 25 and 26, respectively. In addition, these financial projections will become the basis for the presentation materials we will use with prospective lenders in the second step financing.

4


TRB0414713

CHART 2 - LEVERAGED COMPARISON (NO FLEX)

Strong Deleveraging Trends Lead to Ample Financial Covenant Cushion At Least $300 million of Cushion in Base Case

At Least $180 million of Cushion in Downside Case

Base Case Downside

6,000

f/) <:

~ 'E .5 4,000 Yl-

2,000

2008E 2009E 2010E 2011 E 2012E 2008E 2009E 2010E 2011E 2012E --~.-------.---.--.-.--.--.---~.-~-.-----.. -.. -~-~-.~-~--_.- ---.. ---,---~.--.-----------,,-----'''.----.-.~---~--,---OCF $1,193 $1,237 $1,282 $1,298 $1,349 $1,145 $1,094 $1,087 $1,030 $1,023 .-._--------------------

1,346 1,404 1,474 1,513 1,582 1,301 1,265 1,262 1,248 1,259

Cash Int Exp 910 874 878 865 838 884 848 857 855 848 -------------------.--"------------~---------.--------

Total Debt(excl. 10,705 10,406 10,043 9,628 9,121 10,673 10,411 10,140 9,900 9,642

299 355 376 432 534 285 247 211 180 202

6.73x 6.23x 5.99x 5.57x 5.00x 6.93x 6.93x 6.97x 6.97x 6.7OX

._------------Max Guarantaed

9.00 8.75 8.50 8.25 8.25 9.00 8.75 8.50 8.25 8.25 Leverage Ratio

Guaranteed Debt

.... Interest Coverage Ratio Minimum Interest Coverage Ratio

Note: 2007 amounts are proforma assuming the Cubs sale and the issuance of asset backed commercial paper.

2.5OX

2.00

:x> .&. <: !!l. <1l c.

1.50 0 o 'T1

o Dl f/)

1.00 :::r ;a: <1l (il !!l. m

0.50 ~ ::J en <1l

(1) Adjusted OCF is equal to operating cash flow plus cash received from equity investments, plus $60 million of cash savings related to the replacement of our current 401 (k) with the ESOP and a new Cash Balance Plan, plus interest income and less severance.

FINANCIAL COVENANT DEFINITIONS:

Leverage Test: "Guaranteed Debt"! "Adjusted Operating Cash Flow"

Coverage Test: "Adjusted Operating Cash Flow" ! Cash Interest Expense

"Guaranteed Debt" = All bank loans and high-yield notes issued in connection with the Leveraged ESOP transaction are or will be guaranteed.

"Adjusted Operating Cash Flow" = Operating cash flow plus cash received from equity investments, plus $60 million of cash savings related to the replacement of our current 401(k) with the ESOP and a new Cash Balance Plan, plus interest income and less severance.

Note: Our Coverage Test is a tighter test since this picks up all of our cash interest expense whereas the Leverage Test only picks up the new debt we have incurred in connection with Leveraged ESOP transaction.

5


TRB0414714

CHART 3 - LEVERAGED COMPARISON (FLEX)

Even in the Worst Possible Scenario (Downside Operating Case with Flexed Second Step), Tribune in Compliance with Financial Covenants and has Cushion.

Base Case $10,000

8,000

6,000

f/l c: ~ 'e .f: 4,000 w

2,000

o 2008E 2009E 2010E 2011E 2012E

~ __ ~.~.~_~_,~~""'_~ _____ ~ •.• ____ • __ • ____ ,, ____ "'_. __ ~e>~_", _____ ,,_

OCF $1,193 $1,237 $1,282 $1,298 $1,349

1,404 1,474 1,513 1,582

Cash Int Exp 923 975 984 977 957

10,718 10,577 10,316 10,011 9,620

Leverage Ratio 6.74x 6.36x 6.18x 5.82x 5.32x

~---... --------.-----.-.---------------.. ----~.---.... -.--+---.,-----~.---Max Guaranteed Leverage Rati.o .

9.00 8.75 8.50 8.25 8.25

Guaranteed Debt

Downside

2oo8E 2OQ9E 2010E 2011E 2012E ------------------------.-~-- -.".-----+---_.

$1,145 $1,094 $1,087 $1,030 $1,023 ----------------------------~--.-.

1,301 1,265 1,282 1,248 1,259

896 949 982 966 965 .".-.,,----.~.- .. -.---.. --------.------~~-.----.--.-.---.. --.-

10,686 10,584 10,418 10,291 10,151

270. 126 79 41 53

6.94x 7.06x 7.19x 7.28x 7.11x

... _------_. 9.00 8.75 8.50 8.25 8.25

.... Interest Coverage Ratio Minimum Interest Coverage Ratio

Note: 2007 amounts are proforma assuming the Cubs sale and the issuance of assat backed commercial paper.

2.5Ox

2.00

» .Q, c: !!l. ~

1.50 0 ()

" () III (f)

1.00 ::T

::r CD iil !!l. m x

0.50 '0 CD

'" (f)

CD

0.00

(1) Adjusted OCF is equal to operating cash flow plus cash received from equity investments, plus $60 million of cash savings related to the replacement of our current 401 (k) with the ESOP and a new Cash Balance Plan, plus interest income and less saverance.

6


(1)

(2) (3)

(4) (5) (6) (7)

(8) (9)

(10) (11)

(12) (13) (14) (15) (16) (17) (I8)

(19) (20) (21) (22) (23) (24) (25) (26) (27) (28) (29)

SECTION 2 - BASE CASE FIVE-YEAR PROJECTIONS

The base case financial model has changed since the Board approved the Leveraged ESOP transaction. This is primarily due to the unexpected decline in operating results in the second quarter of 2007 which have run through our current 2007 and our longer-term projections. Chart 4 summarizes the key differences between our current projection for 2007 and the plan that was originally approved by the Board.

Chart 4 - 2007 Proforma Projection ($ in millions)

2007 Projection Current 2007 Plan Diff. Comments

Operating Revenues Publishing $3,693 $3,923 ($230) Lower ad revenues (daily newspaper -$143M, preprints

& targeted print -$75M) Broadcasting 1,164 1,198 (34) Aging fringe programming replaced w/2 new shows in Sept. '07

Total Revenues 4,857 5,122 (265)

Operating Cash Expenses Publishing $2,875 $2,993 ($118) Lower comp ($7IM), newsprint ($44M) and other ($6M) Broadcasting 780 797 (17) Lower retirement expense and overall cost controls Corporate 42 49 (7) Lower retirement expense, position elims and cost controls

Total Op. Cash Expenses $3,697 $3,839 ($142)

Operating Cash Flow Publishing $818 $931 ($113) Broadcasting 384 401 (17) Excludes $18M of additional cable copyright royalties Corporate (42) (49) 7

Total Operating Cash Flow $1,160 $1,282 ($122)

Free Cash Flow Total Operating Cash Flow $1,160 $1,282 ($122) Cash from equity investments 68 69 (I) Cash taxes (ex. capital gains) (85) (140) 55 Cash interest expense, net (388) (554) 166 Reflects timing of interest payments (Q4 '07 interest paid in '08) Capital expenditures (140) (175) 35 Feb. projection $200M; reduced to $175M in bank book Working capital/other (110) (95) (15)

Total Free Cash Flow $505 $387 $118

Cash Available for Debt Repayment Total Free Cash Flow $505 $387 $118 Asset sales, net 84 87 (3) Investments (24) (50) 26 Feb. projection $ 100M; reduced to $50M in bank book CubslComcastlTEC cash flow 48 40 8 Q2 stock option proceeds 53 53 Matthew Bender settlement 338 338 Funds received on October I, 2007 Cubs/wrigley/Comcast proceeds, net 850 600 250 Higher than expected proceeds KTLA lot proceeds, net 125 125 Not in original model, expecting Q4 2007 close Other real estate, net 50 50 SCN! real estate and non-core TMCT properties QI '07 common dividends (44) (44)

Total Cash Available for Debt Repayment $1,985 $1,073 $912

Note: all amounts exclude non-operating items, special charges and stock-based compensation expense. In addition, amounts are proforma to exclude SCNI, Hoy (NY), Recycler, Cubs, Comcast SportsNet, and Tribune Entertainment.

7


Chart 5 below shows our five-year consolidated financial projections through 2012 assuming the Leveraged ESOP transaction closes at year end.

Chart 5 - Five-Year Financial Outlook (Base Case) ($ in millions)

52Wks '07 - '12 2006A 2007P 2008P 2012P 5YCAGR

Revenue $5,154 $4,857 $4,936 $5,371 2.0% Cash expenses 3,840 3,697 3,743 4,023 1.7% Operating cash flow 1,314 1,160 1,193 1,349 3.1% Equity income (cash) 38 68 99 181 21.5% Cash interest expense (253) (407) (910) (838) 15.5%

Covenant adj. operating cash flow $1,412 $1,287 $1,346 $1,582 4.2%

Guaranteed debt $0 $9,319 $9,053 $7,916 Total debt (ex. PHONESIZeIl Note) $4,432 $11,117 $10,705 $9,121

Financial ratios: Leverage (Guaranted Debt/Adj. OCF) 7.24x 6.73x 5.00x Coverage (Adj. OCFlInterest) 3.16x 1.48x 1.89x

Note: all amounts exclude non-operating items, special charges and stock-based compensation expense. In addition, amounts are proforma to exclude SCNI, Hoy (NY), Recycler, Cubs, Comcast SportsNet, and Tribune Entertainment.

Key highlights of the five-year base case projections:

• Consolidated revenues are projected to be up approximately 2.0% from 2007 to 2012. Publishing growth of 1.7% per year is driven by growth in Interactive. Broadcasting expects growth of about 3.0% annually with variability between political and nonpolitical years.

• Cash expenses are expected to increase approximately 1.7% annually with Publishing cash expenses growing 1.6% and Broadcasting cash expenses growing 2.2% annUally. Corporate expenses are projected to be flat during the period.

o The current 401(k) plan (4% Company contribution in 2007) is being replaced by the 5% ESOP allocation and 3% cash balance plan for a total non-cash retirement expense of 8% in 2008 to 2012.

o A pension credit of $6 million in 2007 assumed flat in 2008 to 2012. • Operating cash flow is projected to grow 3.1 % annually from 2007 to 2012 with

Publishing operating cash flow growing 2.1 % and Broadcasting operating cash flow growing 4.7%.

• Equity income is expected to grow 21.5% annually driven by significant growth at CareerBuilder, continued gains at TV Food Network and improvement at Classified Ventures and ShopLocal.

• Cash interest expense will peak at $910 million in 2008 and then decline annually to $838 million in 2012.

• Net free cash flow is expected to be about $250 million in 2008 and is projected to grow to $508 million in 2012.

8


TRB0414717

ASSUMPTIONS

The key assumptions for the base case five-year financial projections are as follows:

PUBLISHING

Ad Revenu.e by Channel

€! The mix of ad revenue from 2007 to 2012 moves more towards interactive and targeted print as we transform the company to a more diversified business that is less dependent on core newspaper revenues.

2002

$3.8 Billion

Tribune Publishing Revenue

2007

$3.7 Billion

II!! Daily Newspaper (excl. Preprint) II!! Prepnnt o Targeted Print (excl. Preprint) II!! Interactive II!! Other

2012

10%

$4.0 Billion

€! Newspaper ROP is down 6.3% in 2008 as print classified, especially real estate, is still sluggish and then recovers to a more modest decline in 2009 to 2012.

€! Preprint revenue is down slightly in 2008 and grows modestly in 2009 to 2012 as more targeting programs enable market share gains and help to offset ongoing circulation declines.

€! Targeted print ramps up in 2008 and beyond as we see solid growth in free daily papers and improvements at Newsday's Star Publications on Long Island.

€! Interactive revenue is projected to grow 22% annually from 2007 to 2012. Declines in recruitment revenues due to lower combined print/online ads will be mostly offset by growth in online retail and national. The launch of interactive real estate, aggressive product development, at both TI Central and in LA, as well as the rollout of other new products will contribute to growth. Planned interactive acquisitions are expected to contribute 3% to the annual revenue growth.

9


TRB0414718

Ad Revenue by Category

• Retail will recover slightly in 2008 and experience low single digit growth through 2012 o Our major retail accounts will be flat in 2008 and grow slightly in 2009 to 2012.

This trend is tied to preprint growth and circulation declines. o Local retail should be slightly positive in 2008 to 2012. o Interactive retail will grow over 30% per year in 2008 to 2012.

• National will be up slightly in 2008 and grow moderately in 2009 to 2012 o Print advertising will decline slightly each year with all growth corning from

interactive during 2008 to 2012. • Classified will be down 7% in 2008 as print declines in recruitment, real estate and auto

will continue with a modest recovery in real estate assumed in 2009 and 2010, mostly in Florida. Moderate growth, all coming from online, will occur through 2012.

Circulation Revenue

• Net paid copies decline 2.4% per year, consistent with the 2007 trend. • Revenue declines by 3.2% annually due to the decline in copies and a slightly lower

average price per copy.

Other Revenue

• In the third quarter of 2007, Chicago Tribune signed an agreement with the Sun-Times Media Group to take over the home delivery of their publications. This commercial delivery arrangement will yield $30 million of revenue and $8 million of operating cash flow in 2008.

• New commercial delivery agreements, like the Sun-Times arrangement, along with growth in direct mail, commercial printing and higher revenues at Tribune Media Services, will increase other revenues by 17% in 2008 and about 6% to 7% per year thereafter.

Cash Expenses

• Print expenses will be flat to down slightly each year. All expense growth is tied to higher interactive revenues.

• Compensation o FfEs will continue to decline every year, with a reduction of about 500 in 2008

and 250 to 300 per year thereafter. MIP bonus targets are reset to 100% in 2008 from 55% in 2007. Merit increases of 2.5% annually are assumed.

o Benefits, excluding retirement, will be managed to grow at a rate of 2.5%. No significant changes to other benefit plans.

• Newsprint and Ink o Average newsprint pricing is down 2.5% in 2008 with price increases assumed in

the latter half of 2008 causing 2009 to be up 5%. Average price increases of 5%

10


TRB0414719

are also assumed in 2009 through 2012 due to the newsprint industry continuing to remove capacity.

o 2008 includes a 6.5% total reduction in consumption of newsprint tons due to web-width reductions and volume declines in circulation and advertising.

o Consumption declines of 3.2% in 2009 and 2% thereafter will result from ROP and circulation volume declines, partially offset by growth in targeted print.

• Outside services increases moderately through 2012 due to continued outsourcing of certain functions and increases in interactive, partially offset by cost reductions.

• Mailed preprint (TMC) postage decreases 4% in 2008 and is relatively flat thereafter due to decreases in TMC preprint volumes.

• Other circulation expenses increase due to new commercial delivery agreements, partially offset by continued declines in net paid circulation.

• Promotion expenses increase slightly in 2008 and continue to increase through 2012 due to interactive.

• Other cash expenses increase due to interactive and are partially offset by additional cost reductions.

Operating Cash Flow

• Down 4% in 2008 followed by annual growth of 3.6% due to higher interactive and targeted print revenues.

BROADCASTING

Ad Revenue

• Television spot market, excluding political, grows 2.3% in 2008 and 1.1 % annually in 2008 to 2012.

• Political advertising continues to be robust resulting in total market revenue growth of 6% to 7% in even years and declines of 4% to 5% in odd years.

• Tribune's share of political revenue increases to an average 6.4%, up from 6.1 %, due to improved local news ratings and expanded local news broadcasts. Political revenue is expected to be $31.5 million in 2008, approximately 3% of total advertising revenue.

• Tribune stations' gross advertising revenue increases 9.9% in 2008, in line with industry consensus for spot television growth of 9% to 10%. Gross advertising revenue averages 1.6% annual growth thereafter.

• Tribune stations' aggregate revenue share increases three-tenths of a share point in 2008 to 13.2% and averages 13.6% in 2008 to 2012. Revenue share increases are driven primarily by improved audience shares in prime (CW and Fox) and new syndicated programming in access and late-fringe (Two and a Half Men and Family Guy).

Superstation WGN

• Operating revenue increases 2% in 2008 and 3.5% annually in 2008 to 2012, primarily due to increased distribution fees as Verizon and AT&T rollout their national video services.

• Operating cash flow margin of 62% is maintained.

11


Cash Expenses

• Broadcast rights expense (45% of total operating expenses) o Increase of $10 million, or 3%, in 200S due to full year impact of new syndicated

programming followed by an average increase of 1 % annually through 2012. o Includes additional $1.6 million annually for one-half of "Superstation Tax" paid

by the Cubs to Major League Baseball for national rights to telecast games on the Superstation.

• Compensation (one-third of total operating expenses) o FfEs held relatively steady, except for the elimination of news departments in

three markets in mid-200S. Annual merit increases of 2.5% assumed. • Other Expenses (22% of total operating expenses)

o Increase of 3% in 200S primarily due to higher national sales rep commissions and Nielsen fees. General inflationary increase of 2.2% annually in 200S to 2012.

Operating Cash Flow

• Up 15.7% in 200S and averages about 2% annual growth thereafter.

CONSOLIDATED

Financing

• The second-step financing is executed as planned and not flexed o $3.7 billion second step financing, $500 million less than original plan

• LIBOR rates are based on forward curve as follows: 4.53% in 2008, 4.54% in 2009, 4.96% in 2010,5.19% in 2011 and 5.35% in 2012

• $300 million of asset-backed commercial paper

Asset sales

• $S50 million of net proceeds from the sale of Cubs / Wrigley / Comcast SportsNet (Chart 1 in the Appendix)

• $50 million of gross proceeds for the sale of SCNI (excluding the real estate property) • $175 million of gross proceeds from sale of certain non-core real estate assets (Chart 2 in

the Appendix) o $125 million for the KTLA lot o $50 million of non-core asset sales in 200S

o $25 million for SCN! real estate o $25 million for two non-core properties in TMCT portfolio

Investments

• $175 million purchase of TMCT real estate o Purchase eight properties from TMCT for $175 million in January 200S. o Once purchased, plan to secure properties with $150 million mortgage at a rate of

LIBOR plus 200 basis points.

12


TRB0414721

• Capital expenditures o $132 million in 2008 and $128 million annually from 2009 through 2012

• Investments o $50 million of annual external internet-related acquisitions o $50 million of annual internal interactive development

Charts 6 - 8 on the following pages show the detailed base case five-year financial outlook for Tribune Company (consolidated), Tribune Publishing and Tribune Broadcasting, respectively.

13


TRB0414722

Chart 6 - Tribune Company Consolidated Five-Year Financial Outlook (Base Case/No Flex) ($ in millions)

'07-'12 2007PF 2008 2009 2010 2011 2012 ·······CAGR······

Operating Revenues (I) Publishing $3,693 $3,680 $3,752 $3,840 $3,928 $4,019 1.7% (2) Broadcasting & Entertainment (excl. Cubs) 1,164 1,257 1,264 1,307 1,317 1,352 3.0 (3) Total Operating Revenues $4,857 $4,936 $5,016 $5,147 $5,245 $5,371 2.0%

Operating Expenses (4) Publishing $2,875 $2,894 $2,938 $2,996 $3,053 $3,113 1.6% (5) Broadcasting & Entertainment (exc!. Cubs) 780 808 800 827 852 868 2.2 (6) Corporate 42 41 41 41 41 41 (0.2) (7) Less: Elimination of Bonus Plan 0 0 0 0 0 0 (8) Less: Salary Freeze 0 0 0 0 0 0 (9) Total Operating Expenses $3,697 $3,743 $3,780 $3,865 $3,946 $4,023 1.7%

Operating Cash Flow (10) Publishing $818 $786 $814 $844 $875 $906 2.1% (II) Plus: Comm. Delivery and Infrastructure Savings 0 0 0 0 0 0 (12) Total Publishing $818 $786 $814 $844 $875 $906 2.1% (13) Broadcasting & Entertainment (exc!. Cubs) 384 448 464 479 465 484 4.7 (14) Corporate I Other ~42l ~41l ~41l ~41l ~41l ~41l ~0.2l (15) Total Operating Cash Flow $1,160 $1,193 $1,237 $1,282 $1,298 $1,349 3.1% (16) Plus: Cash From Equity Investments 68 99 115 140 163 181 21.5 (17) Plus: Cash Savings From 401 K Contributions 40 60 60 60 60 60 8.4 (18) Plus: Interest Income 19 4 2 2 2 2 (34.6) (19) Less: Severance Payments 0 ~lOl ~lOl ~lOl ~lOl ~lOl (20) Covenant Adjusted EBITDA $1,287 $1,346 $1,404 $1,474 $1,513 $1,582 4.2% (21) Less: Cash Savings From 40lK Contributions (40) 0 0 0 0 0 (22) Less: Dividends (44) 0 0 0 0 0 (23) Less: Cash Taxes (145) 0 (2) (3) (4) (6) (47.3) (24) Less: Cash Interest Expense (407) (910) (874) (878) (865) (838) 15.5 (25) Plus: PHONES Cash Interest Deferral 0 0 0 0 0 0 (26) Less: Other (127) 0 (0) (0) (I) (I) (27) Less: Capex (140) (132) (128) (128) (128) (128) (1.7) (28) Free Cash Flow $385 $303 $399 $464 $515 $608 9.6% (29) Plus: Proceeds from Asset Sales 144 50 0 0 0 0 (30) Less: Investments (24l ~IOOl (IOOl POOl (Iool (Iool 33.3% (31) Sub-Total $S05 $253 $299 $364 $415 $508 0.1% (32) Plus: Bender Proceeds 338 0 0 0 0 0 (33) Net Free Cash Flow $843 $253 $299 $364 $415 $508 (9.6%) (34) Plus: Cubs I Comcast I TEC Cash Flow 48 0 0 0 0 0 (35) Plus: 2Q Option Proceeds 53 0 0 0 0 0 (36) Plus: Other (I) 17 186 ~Il ~Il ~Il (Il (37) Change In Cash $961 $440 $299 $364 $414 $508 (12.0%)

~----------

(38) Guaranteed Debt $9,319 $9,053 $8,753 $8,839 $8,423 $7,916 (3.2%) (39) Total Debt (Exc!. PHONES & Zell) 11,117 10,705 10,406 10,043 9,628 9,121 (3.9)

(40) Covenant Adjusted EBITDA $1,287 $1,346 $1,404 $1,474 $1,513 $1,582 4.2% (41) Covenant Cash Interest Expense (2) 407 910 874 878 865 838 15.5

Covenant Ratios: (42) Guaranteed Debt/Adjusted EBITDA 7.24x 6.73x 6.23x 5.99x 5.57x 5.00x (7.1 %) (43) Maximum Guaranteed Leverage Ratio 9.00 9.00 8.75 8.50 8.25 8.25 (1.7) (44) $ Cushion (EBITDA) $252 $340 $404 $435 $492 $622 19.8

(45) Adjusted EBITDAlCash Interest Expense (2) 3.16x 1.48x 1.6lx 1.68x 1.75x 1.89x (9.8%) (46) Minimum Interest Coverage Ratio I.IO U5 1.20 1.25 1.25 1.25 2.6 (47) $ Cushion (EBITDA) $840 $299 $355 $376 $432 $534 (8.7)

Note: Special items. non--opcrating items and stock based compensation arc excluded from these projections. Projections exclude results from SeNI, Rccycler, Hoy New York,

Tribune Entertainment, and Cubs/Corneast beginning in 2007. The projections also assume the sale of certain real estate.

(I) Includes $150 mm of mortgage debt proceeds in 2008.

(2) Excludes interest income.

14


Chart 7 - Publishing Group Five-Year Financial Outlook (Base Case) ($ in millions)

S2 Week Proforma Est. Est. Est. '07. '12

2006 2007 2008 2012 '07·'08 CAGR ---REVENUE Advertising

1 Daily Newspaper (excl Preprint) $ 2,003 $ 1,732 $ 1,623 $ 1,440 -6.3% -3.6% 2 Preprints 674 660 657 665 -0.5% 0.2% 3 Targeted Print (excl Preprint) 239 239 254 338 6.1% 7.2% 4 Print 2,916 2,631 2,533 2,443 -3.7% -1.5% 5 Interactive 225 263 318 715 21.1% 22.2% 6 Total Advertising 3,141 2,894 2,852 3,158 -1.5% 1.8% 7 Circulation 557 528 511 450 -3.2% -3.2% 8 Other 254 271 317 411 17.2% 8.7%

9 Total Revenue $ 3,952 $ 3,693 $ 3,680 $ 4,019 -0.3% 1.7%

OPERATING EXPENSES 10 Compensation 11 Direct Pay $ 1,025 $ 1,020 $ 1,038 $ 1,089 1.8% 1.3% 12 Benefits excl Retirement 191 191 191 203 -0.1% 1.2% 13 Retirement 70 22 42 44 93.6% 15.0% 14 Total Compensation 1,285 1,232 1,271 1,336 3.1% 1.6% 15 Newsprint & Ink 492 412 376 414 -8.8% 0.1% 16 Outside Services 304 310 318 381 2.7% 4.2% 17 TMC Postage 119 124 119 119 -4.0% -0.7% 18 Other Circulation Expenses 349 347 357 363 2.7% 0.9% 19 Promotion 101 99 101 116 1.6% 3.2% 20 Other Cash Expenses 355 350 353 385 0.9% 1.9%

21 Total Cash Expenses $ 3,005 $ 2,874 $ 2,894 $ 3,113 0.7% 1.6%

22 OPERATING CASH FLOW $ 947 $ 818 $ 786 $ 906 -4.0% 2.1%

23 Consolidated FfEs 17,169 16,614 16,156 15,237 -2.8% -1.7%

24 Net Paid Copies (7 day average) 3,036,432 2,959,260 2,889,293 2,615,722 -2.4% -2.4%

25 Regular Newsprint Tons 735,425 667,333 623,667 567,548 -6.5% -3.2% 26 Average Price Per Ton $ 631 $ 576 $ 562 $ 683 -2.5% 3.5%

Advertising Breakout 27 Retail $ 1,304 $ 1,260 $ 1,277 $ 1,420 1.3% 2.4% 28 National 712 683 691 794 1.2% 3.1% 29 Classified 1,125 950 883 944 -7.0% -0.1% 30 Total Advertising $ 3,141 $ 2,894 $ 2,852 $ 3,158 -1.5% 1.8%

Classified Advertising Trends

2007-2006 2008-2007 Print Interactive Total Print Interactive Total

Recruitment -21% 1% -14% -10% 0% -7% Real Estate -25% 22% -20% -16% 8% -12% Automotive -20% 31% -12% -13% 30% -3% Other -14% 5% -13% -3% 7% -2% Grou!2 Total -21% 11% -16% -12% 9% -7%

15


Chart 8 - Broadcasting Group Five-Year Financial Outlook (Base Case) ($ in millions)

52wks '07-'12 2006 2007 2008 2012 '07-'08 CAGR

Operating Revenue

1 TV Stations $ 1,014 $ 980 $ 1,068 $ 1,141 8.9% 3.1% 2 Superstation 145 143 145 167 1.6% 3.1% 3 Radio 41 38 41 44 8.7% 3.1% 4 Group Office/Other 1 3 2 0

5 Total Revenue $ 1,202 $ 1,164 $ 1,257 $ 1,352 7.9% 3.0%

Operating Expenses

6 TV Stations $ 709 $ 704 $ 722 $ 768 2.5% 1.8% 7 Superstation 52 49 54 64 9.6% 5.3% 8 Radio 27 26 27 30 4.4% 3.0% 9 Group Office/Other (0) 1 5 6

10 Total Expenses $ 788 $ 781 $ 808 $ 868 3.5% 2.1%

Operating Cash Flow

11 TV Stations $ 305 $ 276 $ 345 $ 372 25.1% 6.2% 12 Superstation 93 94 91 103 -2.6% 1.9% 13 Radio 14 12 14 14 17.8% 3.1% 14 Group Office/Other 2 2 (2) (5)

15 Total Op. Cash Flow $ 414 $ 383 $ 449 $ 484 17.0% 4.8%

16


SECTION 3 - DOWNSIDE CASE FIVE-YEAR PROJECTIONS

The key assumptions for the downside case five-year financial projections are as follows:

PUBLISHING

General

• Used Lehman Brothers analyst, Craig Huber's, model as starting point for downside scenario. Utilized our 2007 projection for the first year in model and used his annual revenue and expense annual percentage changes to project 2008 to 2012.

Revenue

• Craig Huber's annual growth and decline rates for 2008 to 2012 were applied to our 2007 base projection for retail, national, and classified advertising, as well as circulation and other revenue.

• Daily newspaper, targeted print, preprint, and interactive revenue growth rates were taken down so the total revenue annual rate decline equaled Craig Huber's projection. Circulation and other revenue were projected based on his model.

Cash Expenses

• Craig Huber assumed cash expenses decline 2.5% annually in 2008 to 2012. Our downside model shows a decline of 2.6% per year.

• Compensation o Reduction of 600 FfEs per year vs. 500 in 2008 and 250-300 per year in the base

model. o MIP bonus targets were not reset to 100% in 2008, but rather remain at 2007

levels (55% of target) for all years. o No change to retirement expenses from base model.

• Newsprint and Ink o Average newsprint pricing is down 3.0% in 2008 and a 2.5% increase per year for

2009 to 2012 with a decrease in demand partially offsetting gains in pricing power due to AbitibiIBowater merger. This assumption agrees with Craig Huber's newsprint pricing projection. Base model had a decline of 2.5% in 2008 and a 5% increase per year for 2009 to 2012.

o Consumption declines 7.8% in 2008 and 6% thereafter due to the web-width reductions in addition to volume declines in circulation and advertising. Base model had a reduction of 6.5% in 2008,3.2% in 2009 and 2% per year thereafter.

• Outside services decreases 1.6% through 2012 due to cost reductions and lower transaction volumes, partially offset by continued outsourcing of certain functions and increases in interactive. Base model had a moderate increase of 3% to 5% in outside services through 2012 due to continued outsourcing and interactive growth.

17


TRB0414726

• TMC postage decreases 3% per year due to decreases in TMC preprint volumes. Base model had a decrease of 4% in 2008 and then flat to up slightly thereafter to reflect preprint revenue and volume trends.

• Other circulation expenses decrease 5% per year due to declines in net paid circulation and cost reductions. Base model had a slight increase each year due to commercial delivery growth.

• Promotion expenses decrease slightly in 2008 and 2009 due to cost reductions and then remain flat through 2012. Base model had a low single digit increase through 2012 due to interactive growth.

• Other cash expenses decreased 3% to 4% per year due to cost reductions. Base model had low increases through 2012 due to interactive growth, partially offset by cost reductions.

Net Operating Cash Flow from Incremental Commercial Delivery and Infrastructure Opportunities

• Incremental commercial delivery business and infrastructure opportunities at Newsday, Baltimore, and others yield incremental cash flow of $20-$24 million per year in 2008 to 2012. These initiatives were not included in Craig Huber's model.

• Infrastructure optimization opportunities include joint printing and inserting arrangements with other papers in Tribune's markets.

Operating Cash Flow

• Annual decline of 5.2% from 2007 to 2012 due to print revenue declines, partially offset by growth in interactive and targeted print, tight expense control, and incremental commercial delivery and infrastructure opportunities. Base model had annual growth of 2.1 % with a 4% decline in 2008 and 3.6% growth thereafter.

• Craig Huber's model showed an annual operating cash flow decline of 7.1 % from 2007 to 2012. His annual decline is steeper than our downside as his 2007 projected operating cash flow for Publishing is over $50 million below our current projection and he does not reflect the additional operating cash flow from the commercial delivery and infrastructure optimization opportunities that we have included.

BROADCASTING

General

• Craig Huber's model was not used to develop the Broadcasting downside case. Huber's revenue estimates did not reflect incremental political and Olympics advertising revenues and also did not assume that Tribune's new syndicated programming in access and latefringe (Two and a Half Men and Family Guy) would have a positive impact.

Revenue • Television spot market remains flat with 2007, except for incremental Olympics and

political spending. Political is unchanged from base case. Tribune's television markets

18


TRB0414727

are up 5-6% in even years and down 5-6% in odd years. Tribune markets grow 1.1 % annually in 2008 to 2012.

• Audience share increases are not realized resulting in flat revenue share excluding political. Tribune stations' aggregate revenue share declines to 12.4% in 2008 and averages only 12.6% in 2008 to 2012.

• Superstation advertising revenues grow at an average rate of 2.7% as compared to 3.1 % in the base case.

Operating Expenses

• Cash broadcast rights are reduced by 6%, or $75 million, over the term by replacing future late fringe cash program acquisitions with lesser quality barter (i.e., non-cash) programming.

• Non-rights expenses are reduced 3% over the term, primarily in compensation and promotion expenses.

Operating Cash Flow

• Operating cash flow is $62 million lower than base case in 2008 and approximately $400 million lower in aggregate for 2008 to 2012.

• Operating cash flow margins in the low 30% range.

CONSOLIDATED

There are five primary differences in the consolidated downside assumptions as compared to the base case assumptions. These differences could save $162 million of cash flow annually for 2008 through 2012 as compared to the management base case.

As a result, the Company is able to maintain financial covenant compliance in a downside operating scenario.

• Elimination of management bonus payments o Incremental savings of $30 million annually for 2008 through 2012.

• Salary freeze o Incremental savings of $25 million annually for 2008 through 2012.

• PHONES cash interest deferral o The PHONES security allows Tribune to defer the 2% cash interest payments due

on the PHONES for up to 5 years. o Incremental cash savings of about $25 million annually for 2008 through 2012.

19


TRB0414728

• Capital expenditures o Reduced to $103 million annually from $128 million for 2009 through 2012.

• Investments o Reduced to $50 million annually from $100 million for 2008 through 2012.

Charts 9 - lIon the following pages show the detailed downside case five-year financial outlook for Tribune Company (consolidated), Tribune Publishing and Tribune Broadcasting, respectively.

20


Chart 9 - Tribune Company Consolidated Five-Year Financial Outlook (Downside Case/No Flex) ($ in millions)

'07-'12 2007PF 2008 2009 2010 2011 2012 ·······CAGR·······

Operating Revenues (1) Publishing $3,693 $3,511 $3,386 $3,290 $3,202 $3,122 (3.3%) (2) Broadcasting & Entertainment (excl. Cubs) 1,164 1,186 1,167 1,199 1,190 1,214 0.8 (3) Total Operating Revenues $4,857 $4,698 $4,552 $4,489 $4,392 $4,336 (2.2%)

Operating Expenses (4) Publishing $2,875 $2,786 $2,716 $2,649 $2,582 $2,518 (2.6%) (5) Broadcasting & Entertainment (excl. Cubs) 780 800 778 791 817 833 1.3 (6) Corporate 42 41 41 41 41 41 (0.2) (7) Less: Elimination of Bonus Plan 0 (30) (30) (30) (30) (30) (8) Less: Salary Freeze 0 ~251 ~251 ~251 ~251 ~251 (9) Total Operating Expenses $3,697 $3,573 $3,481 $3,426 $3,386 $3,337 (2.0%)

Operating Cash Flow (10) Publishing $818 $725 $669 $641 $620 $604 (5.9%) (11) Plus: Comm. Delivery and Infrastructure Savings 0 20 22 24 24 24 (12) Total Publishing $818 $745 $691 $666 $644 $628 (5.1%) (13) Broadcasting & Entertainment (excl. Cubs) 384 386 389 407 372 381 (0.1) (14) Corporate I Other ~421 14 14 14 14 14 NM (IS) Total Operating Cash Flow $1,160 $1,145 $1,094 $1,087 $1,030 $1,023 (2.5%) (16) Plus: Cash From Equity Investments 68 99 115 140 163 181 21.5 (17) Plus: Cash Savings From 40lK Contributions 40 60 60 60 60 60 8.4 (18) Plus: Interest Income 19 7 5 5 5 5 (22.5) (19) Less: Severance Payments 0 ~101 ~101 ~101 ~101 ~101 (20) Covenant Adjusted EBITDA $1,287 $1,301 $1,265 $1,282 $1,248 $1,259 (0.4%) (21) Less: Cash Savings From 40IK Contributions (40) 0 0 0 0 0 (22) Less: Dividends (44) 0 0 0 0 0 (23) Less: Cash Taxes (145) 0 0 0 0 0 (100.0) (24) Less: Cash Interest Expense (407) (909) (874) (884) (882) (874) 16.5 (25) Plus: PHONES Cash Interest Deferral 0 26 26 27 27 28 (26) Less: Other (127) 0 (0) (0) (I) (1) (27) Less: Capex (1401 ~1321 ~103) (1031 (1031 ~1031 ~5.91 (28) Free Cash Flow $385 $285 $313 $322 $290 $309 (4.3%) (29) Plus: Proceeds from Asset Sales 144 SO 0 0 0 0 (30) Less: Investments ~241 ~50) ~50) (SOl (SO) ~501 16.0% (31) Sub-Total $505 $285 $263 $272 $240 $259 (12.5%) (32) Plus: Bender Proceeds 338 0 0 0 0 0 (33) Net Free Cash Flow $843 $285 $263 $272 $240 $259 (21.0%) (34) Plus: Cubs I Comcast I TEC Cash Flow 48 0 0 0 0 0 (35) Plus: 2Q Option Proceeds 53 0 0 0 0 0 (36) Plus: Other (I) 17 186 ~l) ~Il ~Il ~Il (37) Change In Cash $961 $471 $263 $271 $239 $258 (23.1%)

(38) Guaranteed Debt $9,319 $9,022 $8,758 $8,936 $8,695 $8,437 (2.0%) (39) Total Debt (Excl. PHONES & Zell) 11,117 10,673 10,411 10,140 9,900 9,642 (2.8)

(40) Covenant Adjusted EBITDA $1,287 $1,301 $1,265 $1,282 $1,248 $1,259 (0.4%) (41) Covenant Cash Interest Expense (2) 407 884 848 857 855 846 15.8

Covenant Ratios: (42) Guaranteed Debt/Adjusted EBITDA 7.24x 6.93x 6.93x 6.97x 6.97x 6.70x (1.5%) (43) Maximum Guaranteed Leverage Ratio 9.00 9.00 8.75 8.50 8.25 8.25 (1.7) (44) $ Cushion (EBITDA) $252 $299 $264 $231 $194 $236 (1.3)

(45) Adjusted EBITDAlCash Interest Expense (2) 3.16x 1.47x 1.49x 1.5Ox 1.46x 1.49x (14.0%) (46) Minimum Interest Coverage Ratio 1.10 1.15 1.20 1.25 1.25 1.25 2.6 (47) $ Cushion (EBITDA) $840 $285 $247 $211 $180 $202 (24.8)

Note: Special items, non-opernting items and stock based compensation are excluded from these projections. Projections exclude results from SCN!, Recycler, Hoy New York, Tribune Entertainment, and Cubs/Corneast beginning in 2007. Tbe projections also assume the sale of certain real estate.

(I) Includes $150 mm of mortgage debt proceeds in 2008. (2) Excludes interest income.

21


Chart 10 - Publishing Group Five-Year Financial Outlook (Downside Case) ($ in millions)

Est. Est. Est. '07 - '12 2007 2008 2012 '07-'08 CAGR

REVENUE Advertising

1 Daily Newspaper (exc1 Preprint) $ 1,732 $ 1,543 $ 997 -10.9% -10.5%

2 Preprints 660 640 570 -3.0% -2.9% 3 Targeted Print (exc1 Preprint) 239 241 251 1.0% 1.0% 4 Print 2,631 2,425 1,818 -7.8% -7.1% 5 Interactive 263 302 528 15.0% 15.0% 6 Total Advertising 2,894 2,727 2,346 -5.8% -4.1% 7 Circulation 528 507 470 -4.0% -2.3%

8 Other 271 277 306 2.5% 2.5%

9 Total Revenue $ 3,693 $ 3,511 $ 3,122 -4.9% -3.3%

OPERATING EXPENSES 10 Compensation 11 Direct Pay $ 1,020 $ 1,010 $ 948 -0.9% -1.4%

12 Benefits exc1 Retirement 191 182 171 -4.7% -2.2%

13 Retirement 22 42 44 93.6% 15.0% 14 Total Compensation 1,232 1,234 1,163 0.1% -1.2% 15 Newsprint & Ink 412 369 321 -10.5% -4.9% 16 Outside Services 310 305 286 -1.5% -1.6% 17 TMC Postage 124 120 106 -3.0% -3.0% 18 Other Circulation Expenses 347 330 265 -5.0% -5.3% 19 Promotion 99 95 90 -4.4% -2.0% 20 Other Cash Expenses 350 333 287 -4.8% -3.9%

21 Total Cash Expenses $ 2,874 $ 2,786 $ 2,518 -3.1% -2.6%

22 Net OCF from Comm. Delivery and Infrastructure $ $ 20 $ 24 N/A N/A

23 OPERATING CASH FLOW $ 818 $ 745 $ 628 -8.9% -5.2%

24 Consolidated FTEs 16,614 16,056 13,656 -3.4% -3.8%

25 Net Paid Copies (7 day average) 2,959,260 2,889,293 2,505,537 -2.4% -3.3%

26 Regular Newsprint Tons 667,333 615,000 480,161 -7.8% -6.4% 27 Average Price Per Ton $ 576 $ 559 $ 617 -3.0% 1.4%

Advertising Breakout 28 Retail $ 1,260 $ 1,223 $ 1,139 -3.0% -2.0% 29 National 683 649 581 -5.0% -3.2% 30 Classified 950 855 626 -10.0% -8.0% 31 Total Advertising $ 2,894 $ 2,727 $ 2,346 -5.8% -4.1%

22


Chart 11- Broadcasting Group Five-Year Financial Outlook (Downside Case) ($ in millions)

52wks '07-'12 2006 2007 2008 2012 '07-'08 CAGR

Operating Revenue

1 TV Stations $ 1,014 $ 980 $ 998 $ 1,007 1.8% 0.5% 2 Superstation 145 143 145 163 1.1% 2.7% 3 Radio 41 38 41 44 8.7% 3.1% 4 Group Office/Other 1 3 2 0

5 Total Revenue $ 1,202 $ 1,164 $ 1,186 $ 1,214 1.9% 0.8%

Operating Expenses


10 Total Expenses $ 788 $ 781 $ 800 $ 833 2.5% 1.3%

Operating Cash Flow

11 TV Stations $ 305 $ 276 $ 284 $ 273 2.8% -0.2% 12 Superstation 93 94 90 99 -3.5% 1.2% 13 Radio 14 12 14 14 17.8% 3.1% 14 Group Office/Other 2 2 (2) (5)

15 Total Op. Cash Flow $ 414 $ 383 $ 386 $ 381 0.7% -0.1%

23


SECTION 4 - UPSIDE CASE FIVE· YEAR PROJECTIONS

The key assumptions for the upside case five-year financial projections are as follows:

PUBLISHING

Revenue

• Revenue growth of 3.5% annually vs. base case growth of 1.7% annually. • Florida and LA classified recover stronger and faster - assumes recovery to 2006 levels

by 2012 ($70 million). • Auto industry rebounds better than anticipated - assumes one fourth of the losses

between 2005 and 2007 ($25 million) will be recovered by 2012 with 70% going to classified revenue and 30% going to national revenue.

• Local market share gains yield an incremental $25 million in retail and national advertising revenue by 2012.

• Increased growth in the existing interactive classified and other lines of business yields an additional $167 million in revenue by 2012.

• Circulation revenue trend improves in 2009 to 2012 to down 1 % per year vs. down 3.2% per year due to successful price increases.

• Additional commercial delivery business yields an incremental $34 million in other revenue by 2012.

• Infrastructure optimization opportunities at Newsday, Baltimore & others yield an incremental $10 million per year in other revenue and operating cash flow from 2009 to 2012.

Cash Expenses

• No additional cost savings initiatives in upside model. • Cash expenses increased for related revenue increases as follows:

o 80% margin on Florida and Los Angeles classified recovery with the additional expenses spread among newsprint, compensation, and other cash expenses.

o 70% margin on auto industry recovery with the additional expenses spread among newsprint, compensation, and other cash expenses.

o 50% margin on local market share gains with the additional expenses spread among newsprint, compensation, and other cash expenses.

o 50% margin on growth in existing interactive lines of business with the additional expenses split between compensation and other cash expenses.

o 50% margin on additional commercial delivery business with the additional expense recorded as other cash expenses.

Operating Cash Flow • Annual growth of 6.9% from 2007 to 2012 vs. the base case annual growth of 2.1 % due

to local market share gains, better recovery in the LA and Florida classified industries and the auto industry, increased growth in existing interactive business, improved circulation trends and additional commercial delivery business.

24


TRB0414733

BROADCASTING

Revenue

• Television spot market grows at an average annual rate of 2.4% as compared to 2.1 % in the base case. Both base advertising and political spending are higher. Higher political spending assumes republican candidate of sufficient stature to make a run at New York and lllinois, which in recent presidential elections has been conceded to the democrats.

• Total market revenues increase 7% to 8% in even years and decline 4% to 5% in odd years.

• Tribune stations' aggregate revenue share increases three-tenths of a share in 2009 to 2012 over the base case. Average market share is 13.9% on the strength of the CW and Fox prime, new syndicated programming and improved local news ratings.

• Healthier cable advertising market results in higher revenues for the Superstation.

Cash Expenses

• Generally unchanged from base case as higher sales commissions (local and national rep) are offset by a one-year deferral of a new daytime program acquisition.

Operating Cash Flow

• Operating cash flow $9 million higher than base case in 2008 and $145 million higher in aggregate for 2008 to 2012.

• Operating cash flow margins improve to the 36% to 38% range as management expense controls remain consistent with base case.

CONSOLIDATED

• There are no material differences in the consolidated assumptions for the upside case as compared to the base case.

Charts 12 - 14 on the following pages show the detailed upside case five-year financial outlook for Tribune Company (consolidated), Tribune Publishing and Tribune Broadcasting, respectively.

25


TRB0414734

Chart 12 - Tribune Company Consolidated Five-Year Financial Outlook (Upside CaselNo Flex) ($ in millions)

'07-'12 2007PF 2008 2009 2010 2011 2012 ·······CAGR······

Operating Revenues (I) Publishing $3,693 $3,720 $3,892 $4,059 $4,223 $4,392 3.5% (2) Broadcasting & Entertainment (excl. Cubs) 1,164 1,264 1:291 1:337 1,348 1,398 3.7 (3) Total Operating Revenues $4,857 $4,984 $5,183 $5,396 $5,571 $5,790 3.6%

Operating Expenses (4) Publishing $2,875 $2,913 $2,988 $3,073 $3,153 $3,250 2.5% (5) Broadcasting & Entertainment (excl. Cubs) 780 807 798 827 852 868 2.2 (6) Corporate 42 41 41 41 41 41 (0.2) (7) Less: Elimination of Bonus Plan 0 0 0 0 0 0 (8) Less: Salary Freeze 0 0 0 0 0 0 (9) Total Operating Expenses $3,697 $3,761 $3,827 $3,941 $4,046 $4,160 2.4%

Operating Cash Flow (10) Publishing $818 $808 $904 $986 $1,070 $1,141 6.9% (II) Plus: Comm. Delivery and Infrastructure Savings 0 0 0 0 0 0 (12) Total Publishing $818 $808 $904 $986 $1,070 $1,141 6.9% (13) Broadcasting & Entertainment (excl. Cubs) 384 457 493 510 496 530 6.7 (14) Corporate / Other ~42l ~41l ~41l ~41l ~41l ~41l ~0.2l (15) Total Operating Cash Flow $1,160 $1,224 $1,356 $1,455 $1,525 $1,630 7.0% (16) Plus: Cash From Equity Investments 68 99 115 140 163 181 21.5 (17) Plus: Cash Savings From 40 I K Contributions 40 60 60 60 60 60 8.4 (18) Plus: Interest Income 19 4 2 2 2 2 (34.6) (19) Less: Severance Payments 0 ~IOl ~lOl ~lOl ~lOl ~lOl (20) Covenant Adjusted EBITDA $1,287 $1,376 $1,524 $1,648 $1,740 $1,863 7.7% (21) Less: Cash Savings From 40lK Contributions (40) 0 0 0 0 0 (22) Less: Dividends (44) 0 0 0 0 0 (23) Less: Cash Taxes (145) (I) (5) (7) (9) (13) (38.7) (24) Less: Cash Interest Expense (407) (909) (867) (859) (827) (774) 13.7 (25) Plus: PHONES Cash Interest Deferral 0 0 0 0 0 0 (26) Less: Other (127) 0 (0) (0) (I) (I) (27) Less: Capex ~140l ~132l ~128l ~128l ~128l U28l ~1.7l (28) Free Cash Flow $385 $334 $523 $653 $775 $947 19.7% (29) Plus: Proceeds from Asset Sales 144 50 0 0 0 0 (30) Less: Investments ~24l ~IOOl ~100l ~IOOl ~IOOl ~IOOl 33.3% (31) Sub-Total $505 $284 $423 $553 $675 $847 10.9% (32) Plus: Bender Proceeds 338 0 0 0 0 0 (33) Net Free Cash Flow $843 $284 $423 $553 $675 $847 0.1% (34) Plus: Cubs / Comcast / TEC Cash Flow 48 0 0 0 0 0 (35) Plus: 2Q Option Proceeds 53 0 0 0 0 0 (36) Plus: Other (I) 17 186 ~Il ~Il {Il ~Il (37) Change In Cash $961 $470 $423 $552 $674 $846 (2.5%)

---.-. -.---------~--,--~,-----.- -----. (38) Guaranteed Debt $9,319 $9,023 $8,599 $8,495 $7,820 $6,973 (5.6%) (39) Total Debt (Excl. PHONES & Zell) lI,1l7 10,674 10,251 9,699 9,025 8,178 (6.0)


Covenant Ratios: (42) Guaranteed DebUAdjustcd EBITDA 7.24x 6.55x 5.64x 5.16x 4.49x 3.74x (12.4%) (43) Maximum Guaranteed Leverage Ratio 9.00 9.00 8.75 8.50 8.25 8.25 (1.7) (44) $ Cushion (EBITDA) $252 $374 $541 $648 $792 $1.018 32.2

(45) Adjusted EBITDAlCash Interest Expense (2) 3.16x 1.51x 1.76x 1.92x 2.1Ox 2.4lx (5.3%) (46) Minimum 11lferest Coverage Ratio 1.10 1.15 1.20 1.25 1.25 1.25 2.6 (47) $ Cushion (EB1TDA) $840 $331 $483 $574 $706 $896 1.3

Note: Special items. non-opcrating items and stock based compensation arc excluded from these projections. Projections exclude results from SCNI. Recycler. Hoy New York. Tribune Entenainmen~ and CubS/Comeast beginning in 2007. The projections also assume the sale of eenain real estate.

(I) Includes $150 mm of mortgage debt proceeds in 2008. (2) Excludes interc.'t income.

26


Chart 13 - Publishing Group Five-Year Financial Outlook (Upside Case) ($ in millions)

Est. Est. Est. '07 - '12 2007 2008 2012 '07-'08 CAGR

REVENUE Advertising

1 Daily Newspaper (excl Preprint) $ 1,732 $ 1,628 $ 1,560 -6.0% -2.1% 2 Preprints 660 657 665 -0.5% 0.2% 3 Targeted Print (excl Preprint) 239 254 338 6.1% 7.2% 4 Print 2,631 2,538 2,563 -3.5% -0.5% 5 Interactive 263 346 883 31.6% 27.4% 6 Total Advertising 2,894 2,884 3,446 -0.3% 3.6% 7 Circulation 528 511 491 -3.2% -1.4% 8 Other 271 325 455 20.2% 11.0%

9 Total Revenue $ 3,693 $ 3,720 $ 4,392 0.8% 3.5%

OPERATING EXPENSES 10 Compensation 11 Direct Pay $ 1,020 $ 1,044 $ 1,131 2.4% 2.1% 12 Benefits excl Retirement 191 192 207 0.3% 1.7% 13 Retirement 22 42 44 93.6% 15.0% 14 Total Compensation 1,232 1,278 1,382 3.7% 2.3% 15 Newsprint & Ink 412 377 434 -8.6% l.l% 16 Outside Services 310 320 397 3.3% 5.1% 17 TMC Postage 124 119 119 -4.0% -0.7% 18 Other Circulation Expenses 347 357 363 2.7% 0.9% 19 Promotion 99 102 122 2.5% 4.2% 20 Other Cash Expenses 350 361 433 3.3% 4.3%

21 Total Cash Expenses $ 2,874 $ 2,913 $ 3,250 1.3% 2.5%

22 OPERATING CASH FLOW $ 818 $ 808 $ 1,141 -1.3% 6.9%

23 Consolidated FfEs 16,614 16,156 15,237 -2.8% -I. 7%

24 Net Paid Copies (7 day average) 2,959,260 2,889,293 2,615,722 -2.4% -2.4%

25 Regular Newsprint Tons 667,333 625,270 597,430 -6.3% -2.2% 26 Average Price Per Ton $ 576 $ 562 $ 683 -2.5% 3.5%

Advertising Breakout 27 Retail $ 1,260 $ 1,284 $ 1,474 1.9% 3.2% 28 National 683 700 856 2.4% 4.6% 29 Classified 950 901 1,115 -5.2% 3.3% 30 Total Advertising $ 2,894 $ 2,884 $ 3,446 -0.3% 3.6%

27


Chart 14 - Broadcasting Group Five-Year Financial Outlook (Upside Case) ($ in millions)

52wks '07-'12 2006 2007 2008 2012 '07-'08 CAGR

Operating Revenue

1 TV Stations $ 1,014 $ 980 $ 1,074 $ 1,185 9.5% 3.9% 2 Superstation 145 143 147 169 2.7% 3.4% 3 Radio 41 38 41 44 8.7% 3.1% 4 Group Office/Other 1 3 2 ° 5 Total Revenue $ 1,202 $ 1,164 $ 1,264 $ 1,398 8.6% 3.7%

Operating Expenses


10 Total Expenses $ 788 $ 781 $ 807 $ 868 3.3% 2.2%

Operating Cash Flow

11 TV Stations $ 305 $ 276 $ 353 $ 416 27.7% 8.5% 12 Superstation 93 94 93 105 -1.0% 2.3% 13 Radio 14 12 14 14 17.8% 3.1% 14 Group Office/Other 2 2 (2) (5)

15 Total Op. Cash Flow $ 414 $ 383 $ 457 $ 530 19.3% 6.7%

28


SECTION 5 - OPERATING CASES ASSUMING "FLEX"

Chart 15 - Base Case Five-Year Financial Outlook (Flex) ($ in millions)

'07·'12 2007PF 2008 2009 2010 2011 2012 ······cAGif· .. ···

Operating Revenues (I) Publishing $3,693 $3,680 $3,752 $3,840 $3,928 $4,019 1.7% (2) Broadcasting & Entertainment (exel. Cubs) 1,164 1,257 1,264 1,307 1,317 1,352 3.0 (3) Total Operating Revenues $4,857 $4,936 $5,016 $5,147 $5,245 $5,371 2.0%

Operating Expenses (4) Publishing $2,875 $2,894 $2,938 $2,996 $3,053 $3,113 1.6% (5) Broadcasting & Entertainment (exel. Cubs) 780 808 800 827 852 868 2.2 (6) Corporate 42 41 41 41 41 41 (0.2) (7) Less: Elimination of Bonus Plan 0 0 0 0 0 0 (8) Less: Salary Freeze 0 0 0 0 0 0 (9) Total Operating Expenses $3,697 $3,743 $3,780 $3,865 $3,946 $4,023 1.7%

Operating Cash Flow (10) Publishing $818 $786 $814 $844 $875 $906 2.1% (11) Plus: Comm. Delivery and Infrastructure Savings 0 0 0 0 0 0 (12) Total Publishing $818 $786 $814 $844 $875 $906 2.1% (13) Broadcasting & Entertainment (exc!. Cubs) 384 448 464 479 465 484 4.7 (14) Corporate / Other ~42~ ~41) (41) (41) (41) (41) (0.2) (15) Total Operating Cash Flow $1,160 $1,193 $1,237 $1,282 $1,298 $1,349 3.1% (16) Plus: Cash From Equity Investments 68 99 115 140 163 181 21.5 (17) Plus: Cash Savings From 401K Contributions 40 60 60 60 60 60 8.4 (18) Plus: Interest Income 19 4 2 2 2 2 (34.6) (19) Less: Severance Payments 0 (10~ (10~ (10~ (IO~ (10) (20) Covenant Adjusted EBITDA $1,287 $1,346 $1,404 $1,474 $1,513 $1,582 4.2% (21) Less: Cash Savings From 401 K Contributions (40) 0 0 0 0 0 (22) Less: Dividends (44) 0 0 0 0 0 (23) Less: Cash Taxes (145) 0 0 (I) (2) (3) (53.2) (24) Less: Cash Interest Expense (407) (923) (975) (984) (977) (957) 18.7 (25) Plus: PHONES Cash Interest Deferral 0 0 0 0 0 0 (26) Less: Other (127) 0 (60) (0) (1) (1) (27) Less: Capex (l 40i (132) (128) (128) (128) (128) (1.7) (28) Free Cash Flow $385 $291 $241 $361 $406 $492 5.0% (29) Plus: Proceeds from Asset Sales 144 50 0 0 0 0 (30) Less: Investments (24~ ~IOO) (IOO~ (1001 (1001 (1001 33.3% (31) Sub·Total $505 $241 $141 $261 $306 $392 (4.9%) (32) Plus: Bender Proceeds 338 0 0 0 0 0 (33) Net Free Cash Flow $843 $241 $141 $261 $306 $392 (14.2%) (34) Plus: Cubs / Comcast / TEC Cash Flow 48 0 0 0 0 0 (35) Plus: 2Q Option Proceeds 53 0 0 0 0 0 (36) Plus: Other (l) 17 186 ~Il ~Il (I~ (I~ (37) Change In Cash $961 $427 $140 $261 $306 $391 (16.4%)

-----_. (38) Guaranteed Debt $9,319 $9,066 $8,924 $9,112 $8,806 $8,415 (2.0%) (39) Total Debt (Exc!. PHONES & Zell) 11,117 10,718 10,577 10,316 10,011 9,620 (2.9)


Covenant Ratios: (42) Guaranteed Debt/Adjusted EBITDA 7.24x 6.74x 6.36x 6.18x 5.82x 5.32x (6.0%) (43) Maximum Guaranteed Leverage Ratio 9.00 9.00 8.75 8.50 8.25 8.25 (1.7) (44) $ Cushion (EBrrDA) $252 $338 $384 $402 $446 $562 17.4

(45) Adjusted EBITDAlCash Interest Expense (2) 3.16x 1.46x 1.44x 1.50x 1.55x 1.65x (12.2%) (46) Minimum Interest Coverage Ratio 1./0 1.15 1.20 1.25 1.25 1.25 2.6 (47) $ Cushion (EBrrDA) $840 $285 $234 $245 $293 $385 (14.4)

Note: Special items. non-operating items and stock based compensation are excluded from these projections. Projections exclude results from SCNI, Recycler, Hoy New York,

Tribune Entertainment, and Cubs/Comeast beginning in 2007. The projections also assume the sale of certain real estate.

(I) Includes $150 mm ofmorlgage debt proceeds in 2008.


29


Chart 16 - Downside Case Five-Year Financial Outlook (Flex) ($ in millions)

'07-'12 2007PF 2008 2009 2010 2011 2012 ·······CAGR······

Operating Revenues (1) Publishing $3,693 $3,511 $3,386 $3,290 $3,202 $3,122 (3.3%) (2) Broadcasting & Entertainment (excl. Cubs) 1,164 1.186 1.167 1.199 1,190 1.214 0.8 (3) Total Operating Revenues $4,857 $4,698 $4,552 $4,489 $4,392 $4,336 (2.2%)

Operating Expenses (4) Publishing $2,875 $2,786 $2,716 $2,649 $2,582 $2,518 (2.6%) (5) Broadcasting & Entertainment (excl. Cubs) 780 800 778 791 817 833 1.3 (6) Corporate 42 41 41 41 41 41 (0.2) (7) Less: Elimination of Bonus Plan 0 (30) (30) (30) (30) (30) (8) Less: Salary Freeze 0 (25) ~25) ~25) (25) ~25) (9) Total Operating Expenses $3,697 $3,573 $3,481 $3,426 $3,386 $3,337 (2.0%)

Operating Cash Flow (10) Publishing $818 $725 $669 $641 $620 $604 (5.9%) (11) Plus: Cornm. Delivery and Infrastructure Savings 0 20 22 24 24 24 (12) Total Publishing $818 $745 $691 $666 $644 $628 (5.1%) (13) Broadcasting & Entertainment (excl. Cubs) 384 386 389 407 372 381 (0.1) (14) Corporate I Other ~42) 14 14 14 14 14 NM (15) Total Operating Cash Flow $1,160 $1,145 $1,094 $1,087 $1,030 $1,023 (2.5%) (16) Plus: Cash From Equity Investments 68 99 115 140 163 181 21.5 (17) Plus: Cash Savings From 401 K Contributions 40 60 60 60 60 60 8.4 (18) Plus: Interest Income 19 7 5 5 5 5 (22.5) (19) Less: Severance Payments 0 (10) ~IO) ~IO) (10) ~lOl (20) Covenant Adjusted EBITDA $1,287 $1,301 $1,265 $1,282 $1,248 $1,259 (0.4%) (21) Less: Cash Savings From 401 K Contributions (40) 0 0 0 0 0 (22) Less: Dividends (44) 0 0 0 0 0 (23) Less: Cash Taxes (145) 0 0 0 0 0 (100.0) (24) Less: Cash Interest Expense (407) (922) (975) (989) (993) (993) 19.5 (25) Plus: PHONES Cash Interest Deferral 0 26 26 27 27 28 (26) Less: Other (127) 0 (60) (0) (1) (I) (27) Less: Capex ~14Ol ~132) ~103) (103) (103) ~103l (5.9) (28) Free Cash Flow $385 $273 $152 $216 $178 $190 (13.2%) (29) Plus: Proceeds from Asset Sales 144 50 0 0 0 0 (30) Less: Investments ~24) ~50) ~50) ~50) (50) (50) 16.0% (31) Sub-Total $505 $273 $102 $166 $128 $140 (22.6%) (32) Plus: Bender Proceeds 338 0 0 0 0 0 (33) Net Free Cash Flow $843 $273 $102 $166 $128 $140 (30.2%) (34) Plus: Cubs I Comcast I TEC Cash Flow 48 0 0 0 0 0 (35) Plus: 2Q Option Proceeds 53 0 0 0 0 0

(36) Plus: Other (I) 17 186 (I) ~1) ~1) ~1) (37) Change In Cash $961 $459 $102 $166 $128 $139 (32.0%)

----------_.

(38) Guaranteed Debt $9,319 $9,034 $8,931 $9,214 $9,086 $8,946 (0.8%) (39) Total Debt (Excl. PHONES & Zell) 11,117 10,686 10,584 10,418 10,291 10,151 (1.8)

(40) Covenant Adjusted EBITDA $1,287 $1,301 $1,265 $1,282 $1,248 $1,259 (0.4%)

(41) Covenant Cash Interest Expense (2) 407 896 949 962 966 965 18.8

Covenant Ratios:

(42) Guaranteed Debt/Adjusted EBITDA 7.24x 6.94x 7.06x 7.19x 7.28x 7.llx (0.4%) (43) Maximum Guaranteed Leverage Ratio 9.00 9.00 8.75 8.50 8.25 8.25 (1.7) (44) $ Cushion (EBITDA) $252 $297 $244 $198 $147 $175 (7.1)

(45) Adjusted EBITDAlCash Interest Expense (2) 3.16x 1.45x 1.33x 1.33x 1.29x l.3lx (16.2%) (46) Minimum Interest Coverage Ratio 1.10 1.15 1.20 1.25 1.25 1.25 2.6 (47) $ Cushion (EBITDA) $840 $270 $126 $79 $41 $53 (42.4)

Note: Special items. non-operating items and stock based compensation are excluded from these projections. Projections exclude results from SCNI. Recycler. Hoy New York.

Tribune Entertainment, and Cubs/Comcast beginning in 2007. The projections also assume the sale of certain real estate.



30


Chart 17 - Upside Case Five-Year Financial Outlook (Flex) ($ in millions)

'07-'12 2007PF 2008 2009 2010 2011 2012 ·······CX·GR·······

Operating Revenues (I) Publishing $3,693 $3,720 $3,892 $4,059 $4,223 $4,392 3.5% (2) Broadcasting & Entertainment (exc!. Cubs) 1,164 1,264 1,291 1,337 1,348 1,398 3.7 (3) Total Operating Revenues $4,857 $4,984 $5,183 $5,396 $5,571 $5,790 3.6%

Operating Expenses (4) Publishing $2,875 $2,913 $2,988 $3,073 $3,153 $3,250 2.5% (5) Broadcasting & Entertainment (exe!. Cubs) 780 807 798 827 852 868 2.2 (6) Corporate 42 41 41 41 41 41 (0.2) (7) Less: Elimination of Bonus Plan 0 0 0 0 0 0 (8) Less: Salary Freeze 0 0 0 0 0 0 (9) Total Operating Expenses $3,697 $3,761 $3,827 $3,941 $4,046 $4,160 2.4%

Operating Cash Flow (10) Publishing $818 $808 $904 $986 $1,070 $1,141 6.9% (II) Plus: Comm. Delivery and Infrastructure Savings 0 0 0 0 0 0 (12) Total Publishing $818 $808 $904 $986 $1,070 $1,141 6.9% (13) Broadcasting & Entertainment (exc!. Cubs) 384 457 493 510 496 530 6.7 (14) Corporate lather (421 {411 {41) {411 {411 (411 {0.21 (15) Total Operating Cash Flow $1,160 $1,224 $1,356 $1,455 $1,525 $1,630 7.0% (16) Plus: Cash From Equity Investments 68 99 115 140 163 181 21.5 (17) Plus: Cash Savings From 40IK Contributions 40 60 60 60 60 60 8.4 (18) Plus: Interest Income 19 4 2 2 2 2 (34.6) (19) Less: Severance Payments 0 (101 {WI {lOl {lOl {WI (20) Covenant Adjusted EBITDA $1,287 $1,376 $1,524 $1,648 $1,740 $1,863 7.7% (21) Less: Cash Savings From 40lK Contributions (40) 0 0 0 0 0 (22) Less: Dividends (44) 0 0 0 0 0 (23) Less: Cash Taxes (145) (I) (3) (5) (7) (10) (41.4) (24) Less: Cash Interest Expense (407) (921) (968) (964) (938) (893) 17.0 (25) Plus: PHONES Cash Interest Deferral 0 0 0 0 0 0 (26) Less: Other (127) 0 (60) (0) (I) (I) (27) Less: Capex (1401 (1321 (1 281 {128) (1281 {128) {1.7) (28) Free Cash Flow $385 $322 $365 $550 $666 $830 16.6% (29) Plus: Proceeds from Asset Sales 144 50 0 0 0 0 (30) Less: Investments (24) (100) {1001 (1001 {1001 (1001 33.3% (31) Sub-Total $505 $272 $265 $450 $566 $730 7.7% (32) Plus: Bender Proceeds 338 0 0 0 0 0 (33) Net Free Cash Flow $843 $272 $265 $450 $566 $730 (2.8%) (34) Plus: Cubs I Comcast I TEC Cash Flow 48 0 0 0 0 0 (35) Plus: 2Q Option Proceeds 53 0 0 0 0 0

(36) Plus: Other (I) 17 186 {II {II {II {II (37) Change In Cash $961 $458 $264 $449 $565 $730 (5.3%)

(38) Guaranteed Debt $9,319 $9,035 $8,769 $8,769 $8,203 $7,473 (4.3%) (39) Total Debt (Exe!. PHONES & Zell) 11,117 10,687 10,422 9,973 9,408 8,678 (4.8)


Covenant Ratios: (42) Guaranteed Debt/Adjusted EBITDA 7.24x 6.56x 5.75x 5.32x 4.7lx 4.0lx (11.1 %) (43) Maximum Guaranteed Leverage Ratio 9.00 9.00 8.75 8.50 8.25 8.25 (1.7) (44) $ Cushion (EBITDA) $252 $373 $522 $616 $746 $957 30.6

(45) Adjusted EBITDAlCash Interest Expense (2) 3.16x 1.49x 1.57x 1.7lx 1.85x 2.09x (8.0%) (46) Minimum Interest Coverage Ratio 1.10 1.15 1.20 1.25 1.25 1.25 2.6 (47) $ Cushion (EBITDA) $840 $317 $362 $442 $567 $747 (2.3)

Note: Special items. non-operating items and stock based compensation are excluded from these projections. Projections exclude results from SCNI. Recycler. Hoy New York.

Tribune Entertainment, and Cubs/Comcast beginning in 2007. The projections also assume the sale of certain real eslate.



31


SECTION 6 - APPENDIX

Chart 18 - Update on Cubs Sales Process ($ in millions)

1. Chicago Cubs a. 9 primary bidders, 4 qualified by Major League Baseball to date b. Process and timing c. Management presentations d. Major League Baseball meeting November 14-15 e. Valuation

2. Wrigley Field a. Naming rights b. lllinois Sports Facilities Authority c. Triangle building and parking facilities d. Valuation

3. Comcast SportsNet a. Valuation

4. Projected transaction for financial modeling purposes (below)

Current Alternatives ($ in millions)

Strnctured (Tax Efficient) Transaction

(a)

Gross proceeds: (I) Cubs I Wrigley Field $600 (2) Corncast SportsNet 225 (3) Other CubsIWrigley related assets (4) Sub total 825 (5) Recycler I (6) Total 826

(7)

(8)

Tax basis: (9) Cubs I Wrigley Field 43

(10) Corncast SportsNet 19 (I I) Other CUbsIW rigley related assets (12) Sub total 62 (13) Recycler 180 (14) Total 242

(15) Capital gain

(16) Taxes (38.25%)

(17) Net proceeds

Professionals' Eyes Only

584

(223)

$603

Highly Confidential -- Attorneys' Eyes Only

32

Gross proceeds: (I) Cubs I Wrigley Field (2) Corncast SportsNet (3) Other CubsIWrigley related assets (4) Sub total (5) Recycler (6) Total

(7) Projected debt financing of the deal (8) Implied equity financing of the deal

Tax basis: (9) Cubs I Wrigley Field

(10) Corncast SportsNet (II) Other Cubs/Wrigley related assets (12) Sub total (13) Recycler (14) Total

(15) Capital gain on equity financing

(16) Taxes (38.25%)

(17) Net proceeds

Revised Values

(e)

$925 225 75

1,225 I

1,226

650 576

43 19

62 180 242

334

U28)

$1,098

TRB0414741

Chart 19 - Summary of Real Estate Opportunities ($ in millions)

Proj. Gross Proceeds (1)

Low ---':lliI!!...- Remarks

(I) Opportunities currently reflected in five-year financial projections:

(1) Hollywood, CA studio lot $125

(2) TMCT (sale of non-core SI. Louis property) 10

(3) TMCT (sale of non·core Conklin property) 4

(4) TMCT mortgage on retained property 150

(5) SCNI Greenwich 12

(6) SCNI Stamford 13

(7) Baltimore surplus property 4

Sub-Total $318

$150

12

7

160

The sale of the Hollywood studio lot will be effected as part of a 1031 exchange in connection with the exercise of the TMCT purchase option. This structure will allow for the deferral of capital gain related to the sale of the Hollywood 101. The KTLA television station will remain at the Hollywood studio lot and will have a new lease with the buyer of the studio 101. Projected rent on this lease will be in the $2-3M range annually.

This property is currently owned by TMCT and sublet to Reed Elsevier. Tribune plans to sell this property after the TMCT purchase option Is exercised.

This property is currently owned by TMCT and sublet to Reed Elsevier. Tribune plans to sell this property after the TMCT purchase option is exercised.

After the TMCT purchase option is exercised, Tribune plans to place a mortgage on the 6 properties it will retain. These properties include Times Mirror Square in Los Angeles and Baltimore Sun, Newsday and Hartford Courant properties. Proceeds from this mortgage will be used to repay borrowings under the credit facility. Estimated interest rate on this mortgage is in the UBOR plus 200-250 bps range.

13 } Tribune is currently negotiating the sale of the Greenwich TIme and Stamford Advocate (Southern Connecticut Newspapers). This sale will exclude real estate in Greenwich and Stamford. Tribune

15 plans to sell these properties after the newspapers are sold.

6

$363

After the TMCT purchase option is exercised, Tribune will consider selling excess land/space currently used by the Baltimore Sun.

(II) Longer-term opportunities not reflected in five-year financial projections:

(8) FI. Lauderdale 14 18

(9) Sale Leaseback (net) 325 375

(10) Tribune Tower 35 70

(11) Times Mirror Square 75 150

Sub-Total $449 $613

GRAND TOTAL $767 $976 (1) All proceeds gross except for sale leaseback.


River front parking lot totaling 1.4 acres which is currently used for Sun-Sentinel staff parking could be sold, net of securing parking elsewhere.

Estimated gross proceeds of approximately $44OM on the sale leaseback of 31 properties with an annual rental payment of $30M. After-tax proceeds estimated in the $350M range. The implied annual rental rate on this transaction is currently in the 8.5% range. Proceeds from a possible sale leaseback would be used to repay borrowings under the credit facility.

Long-term potential value opportunities primarily through the redevelopment of the first and second floors of Tribune Tower to retail or the possible sale of the East parking lot, among other things.

Long-term potential value opportunities through the monetization of surplus space. Tribune is currently developing plans to reconfigure the space utilization of the Square which could Ultimately lead to freeing-up half of the total footprint of the Square.

33

TRB0414742

Chart 20 - Summary of Disposition Opportunities ($ in millions)

2007P Operating Gross Net AfterTax Cash Flow Multiple PrQceegs Basis Proceeds Multiple

Television Stations (Stock Sales) 1 KPLR - St. Louis $2,859 NM 75,000 (1) 197,000 121,665 (2) NM 2 KSWB - San Diego 579 NM 50,000 (1) 74,000 59,180

(2) NM

Select Non-Core Assets (Asset Sales) 3 Radio 12,033 12.5 150,413 8,000 95,940 8.0

4 TMS 26,535 11.5 305,153 83,000 220,179 8.3

Renaissance Television (Stock Sale)(3) 5 WTICIWTXX - Hartford $9,996 6 WPHL - Philadelphia 11,278 7 KDAF - Dallas 23,045 8 WSFL- Miami 13,820 9 KTXL - Sacramento 11,673 10 WDCW - Washington, D.C. 13,446 11 WPMT - Harrisburg 2z420 12 Total Renaissance 85,678 12.5 1,070,975 1,135,052 (4) 1,090,531 (5) 12.7

Newspapers (Vanity Buyers - Asset Sales) 13 Los Angeles Times (Asset Sale) $195,056 12.0 2,340,672 235,000 1,535,252 7.9 14 Newsday (Asset Sale) 96,074 12.0 1,152,888 163,000 774,256 8.1

15 Baltimore Sun (Stock Sale) 53,558 11.0 589,138 395,000 514,880 9.6

Other 16 TV Food Network 1,171,559 (6) 81,000 754,420

17 CareerBuilder 658,757 (7) 213,000 488,255

Note: Excludes stock-based compensation. (1) Based upon the 'stick value' for these stations (2) Assumes that the tax loss on the sale can be used to offset other taxable gains (3) Excludes WXIN - Indianapolis. (4) Equal to Renaissance stock basis of $1.177B less fair market value of WXlN - Indianapolis ($42M). (5) Includes the negative tax impact of the deferred gain on WXIN ($5M) triggered by the sale of the Renaissance group. (6) Represents Tribune's 31.3% share of $3.7B of estimated sale proceeds. (7) Represents Tribune's 40.8% share of $1.6B of estimated sale proceeds.

34


Chart 21 - Tribune Publishing - Historical Recession Analysis ($ in millions)

1991 RECESSION

1989 1990 1991 1992 1993 1994 1995 Advertising Revenue

Retail $ 419 $ 410 $ 403 $ 400 $ 410 $ 430 $ 446 National 125 126 122 126 120 135 130 Classified:

Help Wanted 151 135 103 119 129 165 198 Auto 80 79 78 86 91 99 107 Real Estate 88 88 77 72 78 84 92

Total Classified 356 338 288 299 332 382 427

Total Advertising Revenue $ 900 $ 874 $ 812 $ 825 $ 862 $ 947 $ 1,004

'90vs. '89 '91 vs. '90 '92 vs. '91 '93 vs. '92 '94vs. '93 '95 vs. '94 Advertising Revenue

Retail -2.2% -1.8% -0.7% 2.6% 4.9% 3.8% National 0.7% -3.7% 3.7% -5.1% 12.4% -3.2% Classified:

Help Wanted -10.1% -24.0% 15.8% 8.4% 27.9% 20.0% Auto -2.2% -1.3% 11.0% 5.8% 8.8% 8.1% Real Estate -0.6% -13.0% -5.9% 8.3% 7.7% 9.5%

Total Classified -4.9% -15.0% 4.0% 11.1% 14.9% 11.8%

Total Advertisinq Revenue -2.9% -7.2% 1.6% 4.5% 9.8% 6.0%

2001 RECESSION 52-Wks

2000(1) 2001 2002 2003 2004 2005 2006 Advertising Revenue

Retail $ 1,366 $ 1,217 $ 1,250 $ 1,283 $ 1,313 $ 1,307 $ 1,304 National 710 671 697 763 794 767 712 Classified:

Help Wanted 595 401 313 292 322 362 346 Auto 299 298 308 340 334 307 270 Real Estate 183 201 210 242 270 312 375

Total Classified 1,226 1,029 997 1,021 1,080 1,129 1,150

Total Advertising Revenue $ 3,301 $ 2,917 $ 2,944 $ 3,067 $ 3,186 $ 3,203 $ 3,166

'01 vs. '00 '02 vs. '01 '03vs. '02 '04 vs. '03 '05vs. '04 '06 vs. '05 Advertising Revenue

Retail -10.9% 2.7% 2.7% 2.3% -0.5% -0.2% National -5.5% 3.9% 9.4% 4.1% -3.3% -7.2% Classified:

Help Wanted -32.5% -22.1% -6.6% 10.1% 12.6% -4.4% Auto -0.2% 3.4% 10.3% -1.6% -8.2% -12.2% Real Estate 10.2% 4.4% 15.0% 11.9% 15.5% 20.0%

Total Classified -16.0% -3.1% 2.4% 5.7% 4.6% 1.9%

Total Advertisinq Revenue -11.6% 0.9% 4.2% 3.9% 0.5% -1.2%

NOTE: Excludes former Times Mirror newspapers in years 1989 through 1995. Excludes SCNI and Hoy, New York. (1) Includes pro-forma full year results for the former Times Mirror newspapers acquired in 2000.

CB 10/10/07


35

TRB0414744

LEHMAN BROTHERS August 14,2007

Tribune Co. (TRB - US$ 25.77) 3-Underweight Change of Earnings Forecast

United States of America Internet & Media

Publishing Craig A. Huber 1.212.526.5546

[email protected] LBI, New York

Cutting 2008(E) EBITDA to $990 Million

Investment Conclusion o Maintain Underweight rating (Negative sector

view). We continue to think likelihood privatization deal happening is no better than 50%/50%. Should deal break and given new and very high debt load, our sum-of-the-parts analysis estimates fair value at $4-5/share (yes, near zero) or $9-10 based on 15% 2008E FCF yield. Currently, Tribune has very high 9.6x debt-to-2008EEBITDA; Sam Zell privatization deal would raise this to 11.9x (incl. estimated Cubs sale proceeds).

Summary o Cut Street-low '07/08(E) EPS to $1.42/1.00 vs. old

$1.48/1.20E; assumes 2nd tranche doesn't occur. o Revised 2007/08(E) EBITDA: $1.080 bil and $990

mil (vs. prior $1.090 bil and $1.035 bil estimates) based on newspaper ad rev. decline of 9.4%/5.8% in 2007/08 and TV station decline of 5.8%/2.5%.

o A recession scenario drops 2008/09E EBITDA to $750 mil and $650 mil, 42-50% below 2006 levels.

o Annual interest costs post 2nd tranche of debt estimated at $1.082 bil plus $175 mil capex.

o Liquidation value, after paying estimated $3.86 bil in taxes on asset sales and netting current debt, is estimated at a negative $747 mil or negative $4.95 bil if net 2nd tranche's $4.2 bil of debt as well.

Stock Rating Target Price --------------------New: 3-Underweight New: US$ 34.00

Old: 3-Underweight Old: US$ 34.00

Sector View: 3-Negative

EPS (US$) (FY Dec)

2006 Actual Old

1Q 0.38A 0.28A 2Q 0.55A 0.47E 3Q 0.42A 0.21E 4Q 0.67A 0.54E

Year 2.01A 1.48E PIE

Market Data

Market Cap (Mil.)

Shares Outstanding (Mil.)

Float (%)

Dividend Yield

Convertible

52 Week Range

Stock Overview

36j

34

32

30

28

2007 Ne~ St. Est.

0.28A 0.28A 0.47A 0.47A O.13E 0.29E 0.52E 0.63E 1.42E 1.66E 18.1

3051 118.40

90 2.80

No 34.28 - 26.50

2008 % Change Old New St. Est. 2007 2008 N/A N/A 0.07E 0% 0% N/A N/A 0.59E 0% 0% N/A N/A 0.34E 0% 0% N/A N/A O.82E 0% 0%

1.20E 1:00E 1.55E 0% 0% 22.4

Financial Summary

Revenue FY07 (Mil.)

Five-Year EPS CAGR

Return on Equity

Current BVPS

Debt To Capital (%)

4984.3 -18.3 11.90 36.42

N/M

TRIBUNE

OOO'S VOLUME 20 _ ~____ _ _

1:1. L. .. e.I"= dIM' ....... _J. Ie ... d.J ...... !I.l.Jtl!!tdd. " ..... 1 Aug Sap Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

We maintain our Underweight rating on Tribune shares in the context of a Negative sector view. As described below, we are once again lowering our Street-low estimates further on Tribune (new 2007·09 EBITDA estimates are $1.080 billion, $990 million, and $935 million, respectively, vs. prior estimates of $1.090 billion, $1.035 billion, and $985 million; these estimates assume the company continues as an ongoing public company). A recession scenario drops our 2008 and 2009 EBITDA estimates to $750 million and $650 million, respectively.

For 2007 and 2008, we are cutting our Street·low EPS estimates to $1.42 and $1.00, respectively, from prior $1.48 and $1.20 estimates and $2.00 in 2006. These estimates assume Tribune remains a public company with the current capital structure. Our

Lehman Brothers does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.

Customers of Lehman Brothers in the United States can receive independent, third·party research on the company or companies covered in this report, at no cost to them, where such research is available. Customers can access this independent research at www.lehmanlive.com or can call1·800·2LEHMAN to request a copy of this research.

nvestors should consider this report as only a single factor in making their investment decision.

PLEASE SEE ANALYST(S) CERTIFICATION(S) ON PAGE 22 AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 23


LEHMAN BROTHERS new 2009 EPS estimate is $0.83 vs. a prior $1.05 estimate. These estimates compare to Street consensus for 2007 and 2008 of $1.68 and $1.55, respectively.

JVe continue to think the likelihood the second tranche of the Tribune privatization deal happening in the upcoming months is no better than 50%/50% at this stage due to the significant pressure on revenue and EBITDA. As detailed below, should the deal break, our sum-of-the-parts analysis puts fair value at $4-5 per share while our free cash flow analysis puts fair value at $9-10 per share .... Either way, much lower than the current stock price by our estimates.

If the privatization deal does end up going through, we continue to think the probability of significant financial difficulty at Tribune is much, much greater than 50%/50% -- given the secularly declining fundamentals and the large amount of leverage involved which is currently at 9.6 times 2008E EBITDA and would rise to nearly 12 times if the second tranche occurs.

In our opinion, Tribune is significantly overlevered currently and should not be adding more debt to its capital structure given the ongoing secular decline in the fundamentals across Tribune's newspapers and TV stations (total company EBITDA in the first half of 2007 is down 15.8%, for example). So whether the privatization deal gets re-priced down to, say, $27 per share - saving the company $830 million in additional debt - or remains at $34, our position is Tribune should not be taking on any more debt than it currently already has.

Should the privatization deal break and not happen, we estimate fair value at $4-5 per share based on our detailed sum-of-theparts analysis (see attached table) or $9-10 per share using a 15% 2008E free cash flow yield (annual FCF for 2006-08 is estimated down an average 15.2%; we do not think investors should expect anything less than a 15% FCF yield given these declines and large amount of debt involved). Either way, estimated downside in the stock is quite Significant in our opinion, if the deal does not get done, relative to the potential upside, if the deal gets done at $34 per share. In our view, Tribune's stock likely has significant downside risk given the large amount of debt already on the company which can lead to significant swings in the stock price in either direction without changing the overall valuation of the company too much.

Tribune currently has $8.6 billion in debt plus $1.3 billion in PHONES related debt (net debt to 2007E EBITDA of 9.0x vs. only 2.5x for its peers) while the equity market cap. is currently only $3.1 billion. Recall, the transaction is taking place in two parts with 126 million shares tendered on May 24,2007, at $34 per share and the remaining shareholders receiving $34 per share in 4Q07 (management's target time frame). Should the second tranche get done at $34 per share, Tribune would be adding $4.2 billion in additional debt which would put its total debt load at $13.4 billion including $1.3 billion in PHONES-related debt partly offset by an estimated $640 million in aftertax proceeds for Chicago Cubs sale (estimated $1.0 billion in pre-tax proceeds; however, tax base is quite low at estimated $100 million) plus estimated $60 million in after-tax proceeds from sale of Stamford/Greenwich, CT, newspapers plus Hoy New York Spanish language lewspaper. We are not, however, convinced the second tranche will happen.

Should the second tranche of the privatization deal occur, we estimate annual interest expense at about the same level as adjusted EBITDA. Specifically, we estimate annual interest expense at $1.082 billion vs. adjusted 2008(E) EBITDA of $1.130 billion ($990 million in estimated EBITDA plus $140 million in adjustments -- $20 million is cost savings for not being a public company, $60 million in savings for stopping 401 K company contributions on employees' behalf, and $60 million in estimated net cash portion of equity income that is treated as EBITDA) and vs. adjusted 2009E EBITDA of $1.075 billion ($935 million in EBITDA plus the $140 million in adjustments). We estimate capital expenditures of $175 million in each of 2008 and 2009 (which compares to the $187 million to $222 million spent each of the last five years). Thus, pre-tax income - using capital expenditures rather than D&A - is estimated at a loss of $127 million in 2008 and a loss of $182 million in 2009. See attached table.

So by our calculations, if the second tranche of the privatization deal happens, the company will not be able to cover the estimated annual interest expense from operations let alone have excess free cash flow to pay down debt each year.

As outlined below, major Tribune asset sales to meet debt requirements are not the answer by our calculations as only roughly 10% of Tribune's total revenue or 15% of EBITDA has a high tax base (all the Tribune newspapers have a low tax base and only 43% of the TV stations' revenue has a high tax base). This is a large reason why, we believe, private equity had little interest in putting a bid in for the entire company.

A theoretical liquidation value of the entire company, after adjusting for $3.86 billion in estimated corporate taxes on asset sales (newspapers, TV stations, Chicago Cubs, investment portfolio, etc.) and current debt of $8.6 billion plus $1.3 billion for PHONES debt, the remaining equity is worth an estimated negative $747 million or $6.31 per share ..... i.e. face value of the debt is worth more than the estimated after-tax liquidation value of the company's media assets. Running the same analysis but also including the privatization's second tranche of $4.2 billion in debt puts the remaining equity value at an estimated negative $4.95 billion in a liquidation scenario.

We continue to ask ourselves the following six guestions, among others:

• What is the attractiveness for the company to go private especially vs. the risk of so much debt?

• Won't the long-term newspaper and TV station secular issues still impact the traditional media businesses if private or public?

• How can Tribune, or any company for that matter, be effectively run where EBITDA and interest expense are essentially identical (by our estimates)?

2


LEHMAN BROTHERS

• How bad will the debt ratios look when the U.S. economy actually goes into a full recession?

• How about the consideration that the EBITDA declines at large metro newspapers can decrease a lot worse than the 20.6% Tribune's newspapers EBITDA dropped in the first half of 2007 (Le. we are of the understanding, for example, that EBITDA at the privately held Minneapolis Star Tribune has decreased 40-50% in the first half of this year)?

• Why are the CW television network and its affiliated TV stations going to rebound in 2007-08+ season whereas it did not in the 2006-07 season nor did the old predecessor WB Network for the prior five years or so?

Factors weighing on the probabilities of the second tranche going through include:

1) The secularly declining revenue/EBITDA at Tribune -- 2007 EBITDA currently estimated down 16.7%, adjusting for divestitures and extra week of operations in 4Q06, and 2008 expected down a further 8.3% with downside risk -- has gotten significantly worse than expected since the privatization deal with Sam Zell was discussed and formed in 1 Q for the most part and has been tracking worse than most of its peers; total EBITDA at Tribune in the first half of 2007 is down 15.8%; while it is open to interpretation -- for some -- if this is considered a "material adverse change" and reason for the financing to fall through, we believe the more important point is that Tribune's media assets cannot support 12 turns of leverage, post second tranche, in our opinion;

2) much tighter fixed income markets over the past two to three months with no end seemingly in sight make syndicating out the $4.2 billion in debt for the proposed second tranche very difficult;

3) our belief that the commercial banks who have committed to financing for the second tranche may be looking to exit this deal otherwise this $4.2 billion in debt could be sitting on their balance sheets if they cannot syndicate the loans out;

4) the risk of a worsening economy and/or overall advertising outlook putting further pressure on Tribune fundamentals;

5) the potential realization - in our view - by the parties involved in the second tranche that the proposed leverage to further be put on Tribune will be much too high to be supported by secularly declining traditional media businesses (with or without a recession); besides the commercial banks, we are talking about Sam Zell potentially, the board of directors at Tribune, the company's own outside advisors, etc., potentially coming to the realization that it is not prudent to put this amount of additional $4.2 billion in debt on the company and that the company is better off for the long run with its current capital structure. Along these lines, management's public estimates appear to be too aggressive, in our opinion, as they were using $1.270 billion (down 2-3% pro forma) in 2007E EBITDA as recently as the third week of May luring the road show for the $7 billion of bank debt in the first tranche. This compares to our 2007E EBITDA of $1.080 billion, down from

our prior estimate of $1.090 billion.

6) as a condition of financing for the second tranche, Tribune needs to get an independent solvency opinion as an ongoing concern which we are highly skeptical about given the pressures on the business and the very high debt ratios;

7) estimated one-third possibility, in our opinion, the FCC demands that Tribune sell either the newspaper or TV station in those markets (New York, Los Angeles, Chicago, MiamilFt. Lauderdale, and Hartford) where the two media assets overlap and would technically be deemed a violation of the FCC's cross-ownership rules if the Tribune ownership structure were to change by going private; such a scenario would most likely cause a "material adverse change" to the portfolio of media assets;

8) if the deal is not complete by May 31' 2008, the banks involved with the deal can walk away from the financing for the second tranche, etc.

9) a secured leverage ratio test - EBITDA-to-debt ratio for the trailing four quarters prior to completion of the privatization deal must be no higher than 9 times for the secured debt which is the original $7 billion of debt taken on towards the end of May in the first tranche plus $4.2 billion for the proposed second tranche; as seen in the attached table, we estimate this debt ratio at 8.2 times (if deal closes in 4Q07) or 8.6 times (if deal closes in 1 Q08) assuming $640 million in after-tax proceeds from the Chicago Cubs sale plus $60 million in after-tax proceeds from small newspaper divestitures are included to lower the overall debt load; if no divestitures are included, then the estimated range is 8.8-9.2 times by our calculations depending on which quarter the deal is complete (all these calculations include adding $140 million in adjustments to EBITDA); including the asset sales and assuming a 4Q07 close, 3Q07 EBITDA would have to drop by a further $115 million below our $235.7 million estimate in order to trip the secured leverage ratio test which is unlikely at this stage despite how weak the fundamentals are; if the deal were to close in 1 Q08, then EBITDA in the second half of 2007 would have to drop $55 million below our current $535.4 million estimate ($235.7 million for 3Q07 and $299.7 million for 4Q07) in order to trip the secured leverage ratio test; every quarter the deal gets delayed, the worse the trailing four quarter EBITDA would be by our estimates; in our opinion, this secured leverage test was not very tight from the commercial banks' point of view. The secured leverage ratio test does not take into account the existing $1.622 billion in debt (pre-first tranche) plus the $1.3 billion PHONES debt (treats them both like equity).

Sum-of-the-Parts Analysis Puts Fair Value at $4-5 per Share - If Privatization Deal Breaks and Tribune Remains Public Company

Oetails behind our sum-of-the-parts analysis, should privatization deal break, puts estimated fair value for stock at $4-5 per share:

• 7.0x for newspapers using 2008(E) EBITDA;

3


LEHMAN BROTHERS • 9.0x for the TV stations using average 2007108(E) EBITDA to take into account political advertising (which Tribune gets very

little);

• 9.0x for radio/entertainment, excluding the Chicago Cubs, using 2008(E) EBITDA;

• docking $406 million in value for corporate expenses at a blended EBITDA multiple of 7.8x;

• existing debt of $8.6 billion plus PHONES debt of $1.3 billion;

• cash of $182 million; does not include $350 million in proposed settlement for Times Mirror tax case as settlement is not fully approved;

• $640 million in estimated after-tax proceeds for Chicago Cubs which the company plans to sell (we are estimating $1.0 billion in pre-tax proceeds, but the tax base is estimated at only $100 million);

• $60 million in estimated after-tax proceeds for Stamford and Greenwich, CT, and Hoy New York newspapers which the company is selling (we are estimating $86 million in pre-tax proceeds, but the tax base is estimated at only $21.5 million);

• valuing the investment portfolio at $2.0 billion including the 16 million Time Warner shares related to the PHONES debt;

• current shares outstanding of 118.4 million.

Estimated Liquidation Value of the company - after-tax and after adjusting for debt

Keep in mind, according to Bob Willens (Lehman Brothers' Tax and Accounting expert in Equity Research), if Tribune becomes an ESOP-owned S corporation, Tribune would have to pay taxes on the lesser of taxes on the operations for a given year (including taxes on assets sales) .Q.! taxes on the asset sales that year ..... whichever tax burden is smaller.

As an example, if a company earns $100 million pre-tax in a given year on its operations plus has $25 million in capital gains from asset sales, the ESOP-owned S corporation is on the hook to pay taxes, at a assumed 40% rate, on the lesser amount. In this case, the corporation would pay 40% taxes on the $25 million asset gain not the $125 million ($100 million in pre-tax income from operations plus $25 "Tlillion from gains on asset sales).

However, if the company generates pre-tax losses on its operations, then those losses could be netted against the gains on asset sales that same year and that would be the lower amount to use when calculating the tax burden. As an example, if the company generates $10 million in pre-tax losses on its operations and has $25 million in gains on asset sales, the company would have to pay taxes at an assumed rate of 40% on only the $15 million ($10 million in pre-tax losses on the operations netted with the $25 million on gains on asset sales) rather than pay taxes at a 40% rate on the $25 million asset sale gain.

After a 10-year period not being a public company, though, Tribune could then sell assets without paying taxes at the corporate level. Individual investors, outside the ESOP, would have to pay taxes on the gains "passed through" to them within the 10 year period following conversion. The only difference is that the amount passed through to them, during that 10 year period, is reduced by the corporate level taxes paid by the S corporation.

By our calculations, major Tribune asset sales to meet debt requirements are not the answer as only roughly 10% of Tribune'S total revenue or 15% of EBITDA has a high tax base (all the Tribune newspapers have a low tax base and only 43% of the smaller TV station segment revenue has a high tax base).

As detailed in attached tables, we run an analysis to determine the liquidation value of Tribune (i.e. selling off its media properties one by one and/or in groups and adjusting for taxes on the asset sales and adjusting for debt). We run the analysis with and without the privatization's second tranche of $4.2 billion in added debt.

After adjusting for $3.86 billion in estimated taxes on asset sales (newspapers, TV stations, Chicago Cubs, investment portfolio, etc.) and $8.6 billion of current debt plus $1.3 billion for PHONES debt, the remaining equity is worth an estimated negative $747 million or $6.31 per share ..... i.e. face value of the debt is worth more than the estimated after-tax liquidation value of the company's media assets, in our view.

Running the same analysis but also including the privatization's second tranche of $4.2 billion in debt puts the remaining equity value at an estimated negative $4.95 billion in a liquidation scenario, in our view.

Jetails behind our assumptions are in attached tables and below:

4


LEHMAN BROTHERS • We estimate the pre-tax private market value for the newspapers at $5.93 billion which is based on 9 times 2008E EBITDA (in

an attached table we estimate the value for each of the individual newspapers including Los Angeles Times at $1.85 billion, Chicago Tribune at $1.6 billion, etc);

• We estimate the pre-tax private market value for the TV stations at $4.06 billion which is based on 11.8 times average 2007/08E EBITDA (in an attached table we estimate the value for each of the individual TV stations including the New York, Los Angeles, and Chicago's CW Network affiliated television stations at a combined estimated value of $2.37 billion for all three flagship TV stations); like we do for peers, we use average 2007/08 EBITDA to adjust for political advertising in even numbered years;

• We estimate the pre-tax private market value for radio/entertainment segment (excluding Chicago Cubs) at $295 million which is based on 11 times 2008E EBITDA;

• Docking $523 million in value for corporate expenses at a blended EBITDA multiple of 10.0 times;

• Existing debt of $8.6 billion plus PHONES debt of $1.3 billion (we give the company credit for $296 million for the PHONESrelated Time Warner stock in the investment portfolio); as a second scenario, we also run the analysis including the privatization's second tranche of $4.2 billion in debt;

• Cash of $182 million; does not include $350 million in proposed settlement for Times Mirror tax case as settlement is not fully approved;

• $640 million in estimated after-tax proceeds for Chicago Cubs which the company plans to sell (we are estimating $1.0 billion in pre-tax proceeds, but the tax base is estimated at only $100 million);

• $60 million in estimated after-tax proceeds for Stamford and Greenwich, CT, and Hoy New York newspapers which the company is selling (we are estimating $86 million in pre-tax proceeds, but the tax base is estimated at only $21.5 million);

• Valuing the investment portfolio at $2.0 billion (pre-tax);

• And $3.86 billion in estimated taxes on asset sales.

3rief Details Behind our Reduced 2007-09 Estimates

For 2007 and 2008, we are cutting our Street-low EPS estimates to $1.42 and $1.00, respectively, from prior $1.48 and $1.20 estimates and $2.00 in 2006. These estimates assume Tribune remains a public company with the current capital structure. Our new 2009 EPS estimate is $0.83 vs. a prior $1.05 estimate. These estimates compare to Street consensus for 2007 and 2008 of $1.68 and $1.55, respectively. For 3Q07, we are lowering our EPS estimate to $0.13 from our prior $0.21 estimate vs. $0.41 in prior year following ongoing weakness throughout the portfolio.

Briefly, our 2007 and 2008 revenue estimates are $4.984 billion and $4.781 billion, respectively, with corresponding EBITDA estimates of $1.080 billion for 2007 (21.7% margin vs. 24.2% year-ago) and $990 million for 2008 (20.7% margin) while for 2009 we estimate EBITDA declines to $935 million (20.1 % margin using estimated revenue of $4.645 billion). These estimates do not assume a slowing in the economy or a recession.

For 2007 and 2008, we estimate Tribune's newspaper advertising revenue declines 9.4% and 5.8%, respectively, (adjusting for the extra week of operations in 4Q06) and declines a further 4.3% in 2009. For the TV stations we are assuming revenue decreases 5.8% this year and declines a further 2.5% in 2008 and drops a more modest 1.5% in 2009 (we are not hopeful for the upcoming 2007-08+ seasons for CW primetime nor the new syndicated programs on Tribune's TV stations).

Concerning expenses and in response to expected weak revenue, we are assuming Tribune management removes $500 million in cash costs from its newspaper division over the 2007-09 time frame (assume $200 million in costs removed in 2007, $175 million out in 2008, and remaining $125 million out in 2009). The remaining cash costs we are assuming are up 2.25% each year, in-line with inflation. Thus, we are assuming overall newspaper division non-newsprint cash costs decrease 2.0% in 2007, drop a further 2.5% in 2008, and decline 2.8% in 2009 while we are assuming average newsprint prices decline 8.2% in 2007, decline 3.0% in 2008, and increase 2.5% in 2009. For the TV station group, we are expecting overall cash costs down 3.1 % in 2007, down 2.6% in 2008, and down 1.4% in 2009. See attached earnings model for further details.

2008/09 Recession Scenario

As we have done several times in similar Tribune reports, we have run a plain vanilla recession scenario to assess the impact to Tribune's revenue and EBITDA. This is especially important in this case, given the large amounts of debt Tribune is currently carrying -. ')8.6 billion plus the $1.3 billion PHONES debt and which will increase by a further $4.2 billion if the second tranche of the privatization deal 3ctuallyoccurs. See attached recession scenario earnings model for further details.

5


LEHMAN BROTHERS A plain vanilla recession scenario for the next two years would drop our EPS estimates to $0.40 (2008E) and a loss of $0.10 (2009E) vs. our current non-recession EPS estimates of $1.00 and $0.83 (these figures assume the company remains a public ~ompany and debt load remains at about $8.6 billion excluding PHONES debt). We assume short-term interest rates drop 2% benefiting rribune's large interest expense (drops our blended interest rate, including fixed interest rate bonds Tribune has, from 7.75% currently to 6% in a recession scenario).

Our 2008 and 2009 EBITDA estimates, under this recession scenario, are $750 million and $650 million, respectively, down 42% and 50% vs. adjusted 2006 reported levels of $1.299 billion excluding one-time items, divestitures, and extra week of operations in 4Q06 (or $1.324 billion including the extra week). This compares to our current, non-recession scenario EBITDA estimates of $1.080 billion for 2007, $990 million for 2008, and $935 million for 2009.

These Tribune recession scenario estimates are based on our assumption of the company's newspaper ad revenue declining 16.2% in 2008 and a further decline of 8.6% in 2009. Recall in 1991 and 2001 recessions, newspaper industry ad revenue dropped 6.0% and 9.0%, respectively (including Tribune down 8.0% and 11.5%, respectively). Newspaper ad revenue at Tribune is currently running down 8.7% YTD through June (including May and June down 11.5-11.8% each), and its peers are down 7.5% on average.

The problem, of course, is the U.S. economy has not been in a recession so far in 2007; however, the newspaper ad revenue declines going on currently are similar or worse than during the last two recessions. We continue to ask ourselves what is Tribune's (and peers') revenue and EBITDA going to look like in a full-fledge recession when Tribune will not only be fighting secular pressure from online and elsewhere but also a downturn in the economy?

Tribune's newspaper EBITDA, in a recession scenario, is thus estimated to decline 32% in 2008 and a further 14% in 2009. In this scenario, we estimate newspaper cash costs down 9% in 2008 and down a further 6% in 2009 including an expected benefit of 10-15% lower average newsprint prices each of those years. Non-newsprint cash costs are estimated down 5.5% the first year and down a further 3.8% in 2009.

In a recession scenario for Tribune's TV stations, we assume 2008 and 2009 revenue declines of 12.5% and 6.5%, respectively. In the 2001 recession, Tribune's TV station revenue declined 12.0% (in the 1991 recession, Tribune's TV station revenue declined 3.0%; however, the make-up of Tribune's TV station group in 1991 was vastly different than it is today). TV station EBITDA, in a recession scenario, is thus estimated to decline 26% in 2008 and a further 11 % in 2009. TV station costs are expected down 6.0% in 2008 under this scenario and down a further 4.8% in 2009.

'lease see attached Tribune earnings model and cash flow statement for details plus debt schedule post ;t'd tranche of privatization deal with Sam Zell as well as an earnings model with a 2008-09 recession scenario. Also attached are our newspaper valuation table, sum-of-the-parts analysis, sum-of-the-parts analysis (after-tax; done with and without the second tranche of $4.2 billion in debt included), newspaper breakdown table (puts estimated values on each of the various newspapers and estimates the tax basis for each), TV station breakdown table (puts estimated values on each of the various TV stations and estimates the tax basis for each), monthly newspaper ad revenue table, monthly newspaper television revenue table, and Tribune properties page.

6


Tribune Quarterly Income Statement· assumes 2nd tranche of privatization does not occur (Dollars in millions. except earnings per share) lp-dated 8/14/07

Nowspapor, Retail National ClassIfied

Total Advorth;lng Circulation Other Total Nowspapors

Broadcasting and Entortalnmont Television Radio/Entertainment

Broadcasting and Entortalnmont

lobll Revonuo

EBITOA by Sagmont Nowspapor Publishing

TelOVlsion

Radlo/Entorlalnrnent Broadc/lSUng and Entortalnmont Corporate Expense TotalSelTDA

EBITDA Margin (%) Nowspapor Publishing

TeloviSlon Radio/Entertainment

Broadcasting and Entortalnmont Corporalo Expenso Total EBITDA Margin ('h)

OepreCl8\10n and Amortlznllon

Oporating Profit

Equity In .... estment Eamlngsl(Losses) \nlorost Incomel{Expense)

PlClnx Income Pretax Margin (%)

Income Taxes Tux RBle (%)

Nollncomo boforo Prof. OI .... ldond&

Preferred DI .... ldonds

Notlncomo

,Earnlngs per SharI) • dUuwd % Change

Average Sharos Outstanding (mil) diluted

no .... onuo - % Chango (excludes extra week 1t14006) Advortlslng

RetSIl Na\lonal Classified

Total Advertlslng Circulation Olhor Total Newspapors

Broadcasting and Entortalnmont TeleviSIOn

R.1ldio/Entertalrunent BroadcasUng and Entortalnmont

Total Rovonuo

EBITOA - % Chango (excludes oxlra week In 4006) Nowspapor Publishing

TeleviSIOn Radio/Entertainment

Broadcasllng and Enloftalnmonl Corporato Expense

Total EBITDA

£ = Lahman Brothers estlmatos A '" ACtUBI

Nolo: Excludes oncrlime Items

March June

2997 327.1 1988 188.5 278.3 2965 776.7 812.2 1502 148A 661 655

993.0 1,026.1

2712 3154 20.1 88.9

291.4 404.4

1,284.4 1,430.5

241.7 93.7

(19.3) 74.4

(13.0) 303.0

24.3% 34.5%

-95.8% 25.5'1. ·1.0% 23.6'1.

57,0

246.0

05 (34.0)

212.5 16.5%

82.9 39,0%

129.6

(21)

127.5

~O.4~

3.9% 3204

3.2% -35% 4.0% 1.7%

-8.6% 5.4% 0.2"/.

-5.6% -9.7% • 5.9'1.

_1.3"1.

3.7% -13.8% 334.2% ·28.6"1.

46% -6.7'1.

261.4 126.6 14.3

140.8 (13.1)

389:1

25.5% 401% 16.1% 34.8% -0.9% 27.2%

57.2

331.9

11.9 (34.2)

3096 21.6%

120.7 39.0%

188.9

(2.1)

186.8

0.59 -2.9% 318.0

-1.2% ·3.6% 5.9% 0.6%

·9.2% 4.4% ..0.7%

-9.6% 8.3% -6.2%

-2.3'/.

·2.4% ·21.7% 119.3% -16.2%

6.3% -8.1'1.

2005 Sept Annual

302.7 3760 1.305.5 1701 2097 7671 2897 264 0 1.128.5 762.6 849.6 3,201.1 1450 1466 590.2 603 637 2556

957.9 1,059.9 4,046.9

287.5 2959 1.170.1 115.8 237 2486 403.3 319.6 1,416.1

'1371.2 1.379.5··~ 5,465.6

210.5 1008 38.3

139.1 (12.7)

'336.9,

21.8'1. 351% 330% 34.5'1, -09% 24.6"1.

54.7

282.2

8.1 (35,7)

254.6 18.6%

100.2 394%

154.4

(21)

152.3

0.49 -3.6% 313.8

0.9% -35% 7.3% 2.2%

-7.5% ·82% ...0.1'1.

-6.6% 97%

-2.4'1 •

-0.8%

-7.6'1. -21.2% 111.9%

-4.7% 51%

-6.8'1.

283.1 996.6 106 0 4271

56 388 111.6 465.9 (12.0) (50.8) 382.7 1,411.8

26.7% 24.6% 35.8% 365% 23.6% 15.6% 34.9% 32.8% ·09% ·0.9% 27.7"1. 25.S·;'

552 2242

327.5 1,187.6

20.8 41.2 (437) (147.7)

304.5 1,081.2 221% 19.8°1,

119.1 422.9 39.1% 391"1.

185.5 658.3

(21) (84)

183.4 649.9

0.59 2.06 -15.5% -58% 309.3 3153

-39% -05% -51% -4.0% 30% 5.1%

·2.10/. 0.5% -4.4% -7.5% -1.9% ·0.2% -2.4% -0.80/.

-113% ·84% ·27.6% 2.4% -12.7% -6.7%

_5.0'1. ·2.4%

-tl.2"/, .J.3·'" -307% ·22.5% 591% H43%

-28.6'1. _18.9Y, -12.8% 04% _13.9% -9.2%

2006/A)

March Juno Sept

2941 329.7 302.3 181.8 175.6 1557 302.4 307.1 2874 778.3 812.3 745.4 144 3 140,4 1362 62.7 63.2 62.4

985.3 1,015.9 944.0

265.8 309.6 277.5 183 83.3 115.0

284.1 392.9 392.6

1,269.4~ 1,~8.8 1,336.5

228.9 83.5 (3.9) 79.5

(20.0) 288.5

23.2% 31.4%

·214% 28.0% -1.6% 22.7%

546

233.9

6.5 (46.6)

193.9 15,3%

76.2 39.3%

117.7

(21)

115.6

0.38 -5.1% 306.0

-19% -8.6% 8.7% 0.2"1.

-3.9% -5.0% -0.8%

-2.0% -9.1% ·2.5'1.

-1.2·h

-5.3% ·10.9% ·79.7%

6.9% 53.5% -4.8'1.

249.6 114.5

8.2 122.7 (13.7)

, 3581~~

24.6'/. 37.0% 98%

31.2% ·10% 25.5%

54.6

304.0

20.1 (44.8)

279.3 19.8%

109.8 39.3%

169.5

(2.1)

167.4

:0,55 -64% 304.5

0,6% -69% 35% 0.0"1.

-54% -3.6% -1,0%

-18% ·6.3% -2.8"1.

_1.5'1.

-4.5% -9.5%

-425% .12.9"/.

4.7% -7.8%

183.2 85.9 35.4

121.3 (13.4)

291.2

19.4% 310% 30.8% 30.9% -1.0% 21.8'/1

57.1

234.1

18.7 (79.6)

173.2 13.0%

66.9 386%

106.3

(2.1)

104.1

'0.41 -15.1% 252.8

-02% -8.5% ·0.8% _2.2"1. -61% 34%

-2.5%

·3.5% -0.7% -2.7%

-2.5%

-13.0% -14.8%

-75% -12.8%

53% -13.6%

Earnings moda/above includas oxtra weak of Opom/lons m 4006 (company uses fisccJ reponing /0 oqualize number of Sundays most years)

However. % change flguras for 4006 and 4007 as wal/ as annual 2006 and 2007 exclude impact of exlro week in 4006 fO Improve comparabilily.

Includes stOCk opllOn oxpensing baglnmng 1006. Atlanta. Albany, and Bos/on TV stations hav~ boon dives/od and are not included abovo. Earnings modal is adjusled for tIIo announced drves/lture oflhe Stamford and Groonwich (CT) nawsP<lPers and Hoy New York Chicago CUbs, though, is Includod above. Eamingsmoda/ Is adjusfed for May 24. 2007, tenderolforfor 126 million shams (first phase of two part gOing pflvato transaction With Sam Zell fOf 4Q07).

Earnings model is not adjustod for a ponding $350 mil/Ion setllomonl (not fully approvod yol) for /) Tmws Mirror tax case. Soureo' Company mports and Lohman Brolhors osfimales

7


LEHMAN BROTHERS

Dec Annual

4012 1.3272 2167 7298 264.6 1.161.5 882.5 3,218.5 148.0 5689 682 2565

1,098.8 4,044.0

3252 1.178.1 30A 247.0

1,425.1

1,454.4 5,469.1

280.3 942.1 119.1 403.0

03 39.9 119.3 442.9 (143) (613)

385.3 1,323.6

25.5'1. 23.3% 366% 34.2% 09% 162%

33.6% 31.1% ·1.0% -11% 26.5"1. 24.2%

592 2256

326.1 1,098.1

29.5 74.9 (88.7) (2598)

266.9 9132 183% 16.7%

104.9 357.7 393% 39.2%

162.0 555.4

00 (6.3)

162.0 549.1

0.67 2.00 132% -2.9% 241.4 2744

1.0% ·05% -50% -6.9% ·50% 1.3% _2.5"1. ·1.4% ·6.0% -54% 0,0% -1.6%

-3.5'1. -2.0%

40% ·1.3% 21.1% -15% 4.0'1. -1.3'1.

-1.0·h .1.8'10

-B.l% _7.5'1. 4.3% .7.6%

·95.6% 2.8% -0.7"1. -tl.8% 10.7% 18.8% -6.5% -B.2%

Lehman Brothers Craig A. Huber (212) 526·5546

2007{E)

Mmch(A) June(A) Sept {E) Doc lEl Annual

292 3 3123 2849 3520 1.2415 1778 1563 137.8 176.1 648.0 260.7 252.6 2371 2187 9691 730.8 721.1 659.8 746.8 2,858.6 134.9 131.6 1280 1285 5232 658 67.5 652 66 5 264.9

931.5 920.4 853.0 941.8 3,646.8

264.4 286,9 256.7 279.3 1.0874 186 106.0 96.6 290 2502

263.0 J5J.J 1,337.6

1,21A.5 1,313.4" ,'1.206.4 1,250.1 4.984.3 ,

183.8 78.0 (39) 74.1

(194) 238.5

19.7% 29.5%

-210% 26.2'"1. -16% 19.6%

57.0

181.5

12.7 (80.1)

114.1 9.4%

458 40.2%

68.3

0.0

68.3

0.28 ·253% 2421

-06% -2.2%

-138% .a.1% ·65% 49%

-5.5'1.

·0.5% 1A%

..().4%

-4.3'1.

·19,7'1. -6.5% ·04% .a.8% -3.1%

-17.3%

196.2 100.3 202

120.5 (106) 306.1

21.3'1. 349% 191% 30.7~/.

-08% 23.3'1.

so, 247.8

28.7 (112.1)

164.4 12.5%

66,3 403%

98.2

00

98.2

0.41 ·136% 206,7

-53% -110% -177% -11.2"1. ·62% 6.8% -9A%

-7.3% 27.3% 0.0''''

-6.8'1.

-21.4'1. -12.5% 146.3%

_1.8'1. -22.4% -14.7%

147.1 214.5 745 97.1 24,6 (0.6) 99.1 96.5

(10,5) (11.3) 235,1 299.7

17.3·h 22.8% 29.0% 348% 255% ·20% 28.0% 31.3'/1 -09% '{)9% 19.5'1. 24.0%

577 57.7

178.0 242.0

225 350 (175.2) {172.2}

25.4 104.6 2.1% 8.4%

10.2 42.2 403% 403%

15.2 62.5

0.0 00

15.2 62.5

0.13 0.-52 -69.5% -22.7% 1206 120.6

-58% -55% -115% -125% -175% -11.0% -11.5'1. .g.9·h -60% ·6.5% 4.5% 5.0%

-9.6% -7.7%

-7.5% ·7.5% ·160% 2.5% -10.0'1. -6.6%

·9.7% -7.4%

·19.7% -17,6% ·133% -122% -304% ·3353% -18.3'1. ·12.9·t. -21.4% ·14.7% -19.0% -16.2%

741.7 3498 404

390.2 (518)

1,080.0

20.3'1. 322% 161% 29.2"1. ·10% 21.7%

2307

849.3

989 (5396)

408.6 8.2%

1645 40.3%

244.1

00

244.1

1.42 -293% 1725

-44% -93%

-152% -9.4% -63% 5.3%

-8.0%

·5.8% 22%

-4.4'1.

-7.W.

_19.6% ·113%

11% -10.2V. ·141% -16.7%

2006{E) 2009(E)

A:MU"iiI ~

1.20'1.3 6156 8722

2,692.1 5023 271.6

3,465.9

1.0602 2552

1,315.4

4,781,3

658.7 341.9 41.8

383.7 (52.3)

990.0

19.0% 323% 164% 29.2% ·11% 20.7"1.

2260

764.1

111.9 (674.6)

201.4 4.2%

606 40.0%

120.8

00

120.8

',,00 -294% 1209

-30% -500;.

.100% -5.8·h -40% 25%

-5.0%

-2.5% 20%

_1.7%

-4.1%

-11.2% ·2.3% 36%

-1.7% 10%

-B.3%

1.1742 5940 Il06.S

2,575.0 41l7.2 278.3

3,340.5

1.()443 260.3

1,304.6

4,645,1

608.8 335.7

'" 379.0 (52.9)

935.0

18.2% 372% HiH% 29.1"1. .11% 20.1%

2224

712.6

1239 (667.9)

168.6 3.6%

67A 400%

101.1

0.0

101.1

0.83 .168% 121.7

-2.5% -3.5% -75% -4.3% -3.0% 2.5%

-3.6%

-1.5% 20%

-0.8·t.

-2.8V.

.7.6°h .18% 36%

_1.2'1. 10%

·5.6%

TRB0414751

Tribune Cash Flow Analysis IDa liars in millions) Jp-dated 8/14/07

Sources of Cash Nellncome (before preferred dividends)

Depreciation/Amortization

Deferred Income Taxes

Equity Investments

Divestitures

Investments Debt

Common Stock Other

Total Sources

Uses of Cash Change in Working Capital

Capital Expenditures

Acquisitions

Investments Debt

Common Stock Dividends

Olher Total Uses

Not Increase (Decrease) in Cash

Year·end Dept Year-end Cash

Free Cash Flow

% Change 'Fre'e Cash FJo"'; per Share

% Change

E = Lehman Brothers Dstimates A = Actual

1997

324.5

172.5 (14.0)

34.7 0.0

402.5

626.4 57.1

(69.0) 1,534.7

57.7 103.8

1,239.6

48.3

55.4 140.038

97.4 0.0

1,742.3

(207.6)

1,554,8 66.6

393.1

20.4%

.1.47 22.8%

Nole: Froo cash flow = Net Income + D&A • Capilal £xpendifuros

1998

350.8 195.6

25.4 34.0

0.0 51.6

469.9 46.1

(220.7) 952.6

(28.5) 128.8

98.4

40.2

335.7 330.148

101.1 0.8

1,006,8

(54.2)

1~64a.2 .• 12.4

417.5

6.2% 1.56 6.5'%

1999

373.2 194.5 711.9 40.1

0.0 1,329.5

0.0

54.0 (555.3)

2,147.8

166.3 125.6 189.5 556.1 183.0

204.6 104.1

0.0 1,529.2

618.6

1~.3.96.0.~ 631.0

442.2 5.9%

1:69 8.1%

2000

418.0 370.6 (44.0) 79.4

1,982.3 506.3

513.6 104.4 63.5

3,994.1

(183.4)

302.5 2,904.8

234.0

187.4

923.1 139.8

1.2

4,509.3

(515.2)

. 3,448.4'

115.8

440.2 -0.4%

1.47, ·13.0%

2001

447.3

210.4 61.2 60.8

22.2 105.3

394.1 83.3 68.8

1,453.3

92.0 266.4 229.1 141.2

351.7

264.9 158.1

0.0 1,503.3

(50.0)

3,411.6 65.8

364.5

-17.2% 1.11

-24.7%

LEHMAN BROTHERS

2002

639.5 223.3

92.5 40.9 66.4

0.0 0.0

159.6 71.1

1,293.2

2003

699.3

225.8 252.5

(5.6) 223.0

0.0 0.0

163.6 12.3

1,570.9

2004

724.1 229.5

40.0

(17.9) 40.2

0.0 773.2 111.9 (72.9)

1,828.1

164.6 25.6 (33.1)

186.7 193.5 217.3 37.6 237.5 0.6

39.9 25.7 48.8

634.9 427.3 823.0 32.1 358.5 731.6

157.3 161.0 163.0 0.0 0.0 0.0

1,253.1 1,429.2 1,951.3

40.1 141.7 (123.2)

.~,749.6 .. , ·2,039.8' , 2,004,8 105.9 247.6 124.4

650.5 707.1 728.0 78.5% 8.7% 2.9%

1.96 2,10 2.22 76.9% 7.5% 5.8%

2005

658.3 224.2

93.1 (41.2)

22.5 0.0

928.0 41.4

(123.3) 1,802.9

(64.7)

205.9 4.2

78.1

420.0 440.1 233.5 459.1

1,776.2

26.7

2,],52.0 151.1

668.1 -8.2% 2.12

-4.8%

2006(A)

555.4

225.6 (112.6)

(80.8) 470.6

0.0 3.100.8

37.2 130.4

4,326.6

(39.9)

221.9 48.1

174.1 1,435.6

2.262.3 200.9

0.0 4,303.0

23.8

4,432.3 174.7

542.4 ·18.8%

1.98 -6.7%

Lehman Brothers Craig A. Huber (212) 526-5546

2007(E)

244.1 230.7

0.0 (38.9) 60.0

0.0 4.255.0

38.3 250.0

5,039.2

(1.0) 175.0

0.0

0.0

388.0 4.284.0

124.2 100.0

5,070.2

(31.0)

8;299.3 143.7

299.8 -44.7%

1.74 -12.1%,

2008(E)

120.8 226.0

0.0 (51.9)

0.0 0.0 0.0

39.4 0.0

334.4

(1.4)

175.0 0.0 0.0

75.0

0.0 87.1

0.0 335.7

(1.3)

8,224.3 142.4

171.8

·42.7% 1,42

-18.3%

2009(E)

101.1 222.4

0.0 (63.9)

0.0 0.0 0.0

40.6 0.0

300.3

(2.7) 175.0

0.0 0.0

50.0

0.0 87.6

0.0 309.9

(9.6)

8,174.3 132.7

148.5 -13.6%

1,22

-'4.1%.>

For comparability. free cash flow figums for 2000 and 2006 exclude impact of extra week in the fourth quartor due to fiscal reporting. Source: Company roports and Lohman Brothors estimates

8


Tribune Privatization (Dollars in millions) Jp-dated 8/14/07

May 2007 Dubt Sclwdulo (post 126 mil share tendor)

Bank Dobl (UBOR" 2.5%) Bank Debl (LlBDR <t 3 0%) COfnmon;ial Paper

Debl

Medium Toml Noles (2006·0B)

Property Financing Obligation (2009)

Noies2010 Debonluros2013

Notes 2015

Debentures 2023

Debontures 2027

Debentures 2096 tnteres! Rate Swaps

Other Notes and Obligations Totarb"obl " , -

Phonos Deb!

Total Dobt (Including PHONES)

.OOlIE) 2ooalE) 2oo91E)

Unadjusted EBITOA

1,080,0 !J90.0 935.0

Secured

Socured

Dobl

1.500.0 5,500.0

97.0

262.6 55.7

449.4 79.9

328.6 94.8 82.8

129.9

24.6 16.9

~,622.~

1.300.0

9,922.3

Yoar·end

Debt (incl, PHONES)

9,599.3 9,524.3 9,474.3

lnleros1

Ral9 Inleresl

7,8% 116.3 8.3% 453.8 6.0"10 5.8 5,6% 14.7

7.7% 4.3 4.9% 21.9 7.3% 5.8 5.3% 17.3 7.5% 7.1

6.6% 5.5 7.3% 9.4 6.0% 1.5

6.0% 1.0

7.7% 664.3

2.0% 26.0

7.0% 690.3 "

DeblRatio

(Incl. PHONES)

LEHMAN BROTHERS

Noles

Now; LlBDR spread as curronlly slands Now; UBOR sproad as currently slands Existingdobt prior 10 126rllllsh,lfulondor

Bofore 2nd trancho

Capltat EBITOA

minusCapE)(

175.0 905.0 175.0 815.0 175.0 760.0

Very high debt ratio oven without 2nd tranche

Intores!

E)(ponse


EBITOA minus CapEx I Interest Expense

539,6 , 1.7 674,6 1.2 667.9 1.1

I Very tighllntefOst coveragu ratio ~ Includes ustlmalud $60 mll 2007 proceeds from

Stamford/Greenwich/Hoy New York newspapor sales

2nd Tranchc (aftor buying remaining 116.4 mil shares)

Inloresl

Dobl

Bank Debl (USOR t 4,0% estimatod)

HighYiold

TotafNew Oobt

Total Dob({attOr both lfanchos)

~S!lmlltad After·tax Proceeds (Chicago Cubs)

Estimated Alter·tllx Proceeds (StamfonifGreenWlChJHoy New York newspapers)

Total Debt (aftar dobfpaydown)

Adjustments to EBITOA

Cosl Savings from No! Being Public Company

StopPing of 401 K Company ConlnbuUons on Employees' Behalf

Eslimated Net Cash Portion of Equily Income that is Treated as ESITOA

Total Adjustments to EBITOA

EBITDAplus

$140 mlludJustmcmt

2oollE) 2008{E) 200910)

1,220.0 1.~30.0

'1,O75.~.'

Secured

Secured

o.bl

2.100.0

2.100.0 402,00,0,

14,122.~·

640.0

60.0

13,422.3

Year-end

o.bt (incl. PHONES)

/

Rahl

9,3%

12,5%

10.9%

8.1%',

8.1%

Interest

194.3

262.5 456.8

1,147.0

1,082.3

20.0 60.0

60.0 140.0

Dobt Ratio

(Incl. PHONES)

11.0 11.9 12.5

No further debt paydown duo to lack of FCF

Nole: Assumes 110 rurtllerdiveslituros. Eamtngs model is not adjusted for a pending $350 millioll se/llemell/ (/lol fully approvod yel) for.1 T/fTIes Mirror lax casu Source: Lohman Brothers


Notes

New: esbmated intorest min; cap unknown

Now; esUmlltod inlemsl min: capped al 12.5%

Estimlltod SI.0 bil pro·ta~ proceeds and S100 milIa:< base

Estimated S86 mil pre-lilx proceeds and S21.~ mil tax base

Interest Expense overwhelms EBlTDA minus CilpEx

CapEx

175.0 175,0 -175,0

Extremoly high debt ratio aftor 2nd tranchll

9

/1 Interost

EBITOA minus CapEx I

InlerostExpcnse

'.9

\

Pro-lax

loss

(37.3) {127.2) (182.3)"

/ Not Encouraging

TRB0414753

Tribune Debt Ratio Test (Dollars in millions) lp-da!ed 8/14/07

Secured Portion of Dobt Bank Debt (Uber ... 2,5%)

Bank Dubl (Llbor • 3,0%)

Bank Debt (llbor .,. 4.0% ostimatod)

Hl9hYiald Total

1,500.0 5.5000 2.100.0 2,100.0

11.2.00.0

I( Dcal is completa J.o...igQL thon \J.$<) traRing.foi..ir quarters oiltllng "3Q07(E) EeIT~A

EB1TDA for trailing four quartars ending 3Q07(E)

4QOO (Al - ndjusls lor exira week 01 operations 1Q07(A)

2Q07(A)

3Q07(E)

EBITDA for trailing four quartors ondlng 3Q07(E)

PluS Adjuslmenls

Total Trnillng Four Quarters EBlTDA plus AdJustmonts

Tolal Secured Portion of Dobl

Dobt Ratio (lo,mooJ 9.~x or lower t~st)

Estimated Sale Proceeds for Chicago Cubs (altor.tax)

Estimated Salo Proceeds for Stamford/Greenwich/Hoy Now Yolk newspapers (after.lax)

Total SQcurod Portion of Debt (pro forma for assets salos)

[Jobt RaUo (to moot9.0x. Of lC?wor:~~'$t)

EBITDA for trailing four quarters cndlng 1Q08(E)

2007(A)

.3007(E)

4007(E)

1Q08(E)

EBiTOA for trailing four quarters ending 1Q08(E)

-:llusAdjuslments

Total TralUng Four Quarters EBITDA plus AdJustmonts

Total Secured Portion of Debt

Eslimal{.->d Sale proceeds for Chicago Cubs (after-lax)

Eslimaloo Sale Proceeds for Stamford/Greenwich/Hoy Now Yor~ newspapors (aflor-Iax)

Total Secured Portion of Debt (pro forma for assets salas)

Source: Company reporls and Lohman Brothers


.357.8

238.5 305.1

235.7 1,138.1

140.0

1,278.1

11,200.0

8.8

640.0 60.0

10,500.0

306.1 235.7 299.7 218.6

1,060.1

140.0

1,200.1

11,200.0

9.3

640.0 60.0

10,500.0

8.7

10

LEHMAN BROTHERS

If Doni Is complolo.ln.1QM. thon usa trfiiling four qu~o~ ooding'4007(E) E8lTDA,

2007(E) EBITDA

Plus Adjustmanls

2007(E) EBITDA plus Adjustments

Total Securod Portlon of {){!bt

Dobt RaUOc

(to mocl9.0x or lowor lost)

Estimated Sale Proceeds lor Chicago Cubs (alter·tax)

Estimated Sale Proceeds lor Stamford/Gre~nwich/Hoy Now Yol1\ newspapers (allar·lil~)

Total Socurod Portlon of Dobt (pro forma for assets salos)

Dobl ~atl~ (to moot ~.Ox or lowor toa!)


1,080.0

140.0

1,220.0

11.200.0

9.2

f1400 60.0

10,500.0

8.8

TRB0414754

LEHMAN BROTHERS Tribune Quarterly Income Statement (rocession scenario) - assumes 2nd tranche of privatization docs not occur (Dollars in millions, except earnings per share) lp-dated 8/14/07 Recession Scenario - Starting 200S-09

2005 2006{A)

March June SOpl Doc Annual Juno Sept Annual N~wsp3pors

Retail NatIOnal

Classified Total Advortlsing ClrculalJon Other Total Nllwspapors

Btoadc;astlng and Entllrtalnmllnl Television RadlO/Entertalnmont

BrOadcasting and Entlll'tzlinmont

299.7 327.1 198,6 188.5 27B.3 296.5 776.7 612.2 150.2 148.4 661 65.5

993.0 1,026.1

271.2 201

291.4

315.4 88.9

404,4

302.7 3760 1.3055 170.1 209.7 767.1 289.7 264 0 1,1285 762.6 849.6 3,201.1 145.0 1466 590.2 60.3 63.7 255.6

967.9 1,059.9 4,046.9

287.5 115.8 403.3

295.9 1.1701 23.7 248.6

319.6 1,411:1.7

294.1 329.7 181.8 175.6 302.4 307.1 178.3 812.3 144.3 140.4

62.7 63.2 965.3 1,015.9

2658 18.3

284.1

309.6 83.3

392.9

3023 401.2 1.3272 1557 216.7 7298 287.4 264.6 1.161.5 745.4 882.5 3,218.5 136.2 1480 568.9 62.4 682 2565

944.0 1,098.8 4,044.0

277.5 1150 392.6

3252 1.1781 30.4 2470

355.6 1,425.1

TObllRovonuo 1,284.4 :1,430.5 1,~71,~.· 1,379.5 5,465.6; 1,269 .. 4 - 1,408;8 1,336.5 1,454.4 5,469.1

EBITDA by Sogmont Nowspllpor Publlshlng

TeleVISion RadlOlEnlerlainmenl

Broadcasting and Entortnlnmonl Corporale Expense TotaiEBITDA

EBITDA Margin (%) Nowspapor Publishing

TeleVIsion RadlolEntertamment

Broadcasting and Enlortalnmont Corporate Exponse Tolal EBITOA Margin ('10)

Doprecl£ltlon and Amortization

Oporallng Profit

Equity tnvestmenl Eamlngsl(Losses) Inlcresltncomel(Expcnse)

Prelaxlncome Pretax Margm (%)

IncomeTllxes Tax Rale (%)

Not Incomo boloro PUll. Olvldondli

Preferred DiVIdends

Nollncomo

·Earrilngti Por Shan~ • dllutod % Change

Average Shares OUlstanCling (mil) dlluled

.'ovonuo • % Chango (excludes extra week in 4006) Advortls!ng

Retail Nabonai ClassiflOd

Tutul Advortl5tng CIrculation Other Total Nowspapon;

Broadcasting and Entornlnmonl TeleVISion RadiolEntertmnment

Broadcasting and Enlortalnmont

Total Rovonuo

E8ITDA· % Chango (excludes extra week in 4006) Newspaper Publllihlng

ToloVlsion RadIO/Entertainment

Broadcasllng and Entortalnmont Corpor<lle Expense Total EBITOA

E" Lohman Brothors oS/lmatos A "Actual Nolo: Excludos ono·llmo itoms

241.7 93.7

(19.3) 74.4

(130) 30~,O~

24.3'1. 34,5%

-95.8% 25.5% ·1.0% 23.6'1.

570

246.0

05 (34.0)

212.5 16.5%

829 39.0%

129.6

(2.1)

127.5

oAo 3.9%

3204

3.2% ·3.5% 40% 1.70/.

-8.6% 54% 0.2%

·5.6% ·9.7% ·5.9'1.

·1.3%

3.7% ·13.8% 334.2% ·28.fW.

4.6% ~.7'1.

261.4 1266

14.3 140.8 (131)

<389,1

25.5'1, 40.1% 161% 34.8% ·0.9% 27.2%

57.2

331.9

11.9 (34.2)

309.6 21.6%

120.7

390%

188.9

(2.1)

186.8

0.59 ·2.9% 316.0

-1.2% -3.6% 5.9% 0.6%

·9.2% 4.4% -0.7%

-9.6% 6.3% -6.2%

·2.4'1. -21.7% 119,3% ·16.2"1.

6.3%

-8.1%

210.5 100.8 383

139.1 (12.7)

'< 336:9

21.80/. 35.1% 330% 34.5% -0.9% 24.6'1.

54.7

282.2

8.1 (35.7)

254.6 166%

1002 394%

154.4

(2.1)

152.3

0.49 -3.6% 313.8

0.9% ·35% 7.3% 2.20/.

·7.5% -8.2% -0.1%

-66% 9.7%

·2.4%

-0.8%

_7.6% -21.2% 111.9%

-4.7% 51%

-6.8%

283.1 106.0

5.6 111.6 (12.0) 382.7~

26.7% 358% 236% 34.9'1, ·0.9% 27.7%

552

327.5

206 (43.7)

304.5 221%

1191 39.1%

185.5

(2.1)

183.4

,0.59'" ·15.5% 309.3

-3.9% -51% 3.0%

-2.10/. ·4.4% ·1.9% ·2.4%

·11.3% -276% ·12.7'1.

·5.0%

-6.2% -307% 59.1%

.28.6"/0 ·128% ·13.9'1,

996.6 427.1 38.8

465.9 (50,8J

1,411.8

24.6% 36.5% 15.6% 32.8'1. ·09% 25.8%

2242

1.187.6

41.2 (147.7)

1.081.2 198"/1,

422.9 391"/1,

658.3

(8.4)

649.9

2.06 -58% 315.3

·05% -400/, 5.1% O.S'!.

·7.5% -0.2% -0.8%

-8.4% 2.4%

-6.7%

·2.4%

-3.3''';'

-22.5% 64.3%

·18,9'/. 04%

·9.2%

228.9 83.5 (39) 79.5

120.0) 28~'5

23.2"'. 31.4%

·21.4% 28.0% -16% 22.7"1,

546

233.9

6.5 (466)

193.9 15.3%

76.2 39.3%

117.7

(21)

115.6

-1.9% ·8.6% 8.7% 0.2%

-3.9% -5.0% -0.8'/.

.1.2 0/0

·5.3% -10.9% ·79.7%

6.9"1. 53.5% --4.8*/0

Earnings modal abovo includos oxtra wook of opalalions m 4Q06 (company usos fiscal ropOl1ing to oqua/lzo numbor of Sundays most yoars).

Howovor, % chango flguros for 4006 8Ild 4007 as wol/as annual 2006 and 2007 oxcludo impact 01 ox/ra wook in 4006/0 improvo comparability. Includos stock oplion cxponsmg baginnmg 1008 Atlanta. Alb,my. and Boston TV statIOns havo boon dWf)sfr;d ,1nd am not mcludod abovo.

249.6 114.5

6.2 122.7 (13.7) 358,6

24.6% 370% .,% 31.2'1, ·1.0%

25.50'"

546

304.0

20.1 (44.8)

279.3 198%

109.8 393%

169.5

(2.1)

167.4

0.55 -6.4% 304.5

08% .£.9% 35% 0.0%

·54% ·36% ·1.0"/.

-1.8% -63% ·2.8'1.

·1.5%

-4.5% ·95%

·42.5% ·12.9'"

47% ·7.8%

183.2 85.9 35.4

121.3 (13.4)

291.2

19.4% 31.0% 30.8% 30.9% ·1.0% 21.8%

57.1

234.1

187 (796)

1732 130%

66. 386%

106.3

(2.1)

104.1

0.41 '15.1% 2528

-02% -8.5% -08% • 2,2% ,£.1% 3.4%

·2,5%

·35% ·07% .2.7%

·2.5%

.13.0% ·14.8%

-7.5% ·12.6"1.

53% ·13.6%

Earnmgs modf)t is adJustod for tho announcf)d dlVf)stl/UfO of tho Slam/ord and GroonwlcJl (CT) nowspapors and Hoy Now York. Chlcugo CUIJs. though. is mcludod abovo Earnmgs modolls adjusrod lor May 24, 2007. londo( offf)( for 126 million shares (flfSI ptliJSO of/wo pari going prlVato (mns,1ctiorl wah Sam loll for 4007) Eammgs modolls not adjustod (or a pondlng $350 million sortlomant (not fully approvod 1'(1) for a TUlWS Mirror lax caso.

Soureo: Company ropo!/s and Lohman Bratllors oslima/os

11


260.3 119.1

03 119.3 (14.3) 385.3

25.5% 366% 09%

33.6% -10% 26.5%

59.2

326.1

29.5 (887)

266.9 183%

104.9 393%

162.0

0.0

162.0

0.61' 13.2% 241.4

1.0% ·50% ·5.0% .2.5% ·6.0% 0.0%

·3.5%

40% 21.1%

4.0%

·1.0'1.

-8.1% 43%

·956% -0.7% 10.7% -6.5'1.

942.1 403.0 399

442,9 (51.3)

1,323.6_

23,3'1, 342% 162% 31.1% -1.1% 24.2%

225.6

1,098.1

74.9 (2598)

913.2 16.7%

357.7 39.2%

555.4

(63)

549.1

2.00 ·2.9% 2744

-0.5% -6.9% ,3%

.1.4"1 • -5.4% ·,.6% ·2.0"1.

·1.3% -1.5% ·1.3%

-1.6%

·7.5'1. -7.6% 2.8%

-e.8% 18.8% -8.2%

2007(E)


March(A) Juno(A) Sept (E) Duc.(E) Annual

2923 177.8 260.7 730.8 134.9 656

931.5

264 ,

18.6 263.0

3123 156,3 252.6 721,1 131.8

67.5 920.4

286.9 106.0 393.0

284.9 137.8 237.1 659.8 1280 65.2

853.0

256.7 966

352.0 1.2415 176.1 64B 0 218.7 9691 746.6 2,856.6 128.5 5232 665 264.9

941.11 3,646.8

279.3 1.0874 29.0 250.2

1,337,6

1,214.5 ;1,313.4 1,206.4 1,250:.1.' 4,984.3

183.8 760 (3.9) 74.1

(19.4) 238.5

19.7% 295%

·21.0% 26.2% ·1.6% 19.6'1.

570

181.5

12.7 (801)

1141 94%

45' 402%

68.3

0.0

68.3

'0.'28 -25.3% 242.1

-0.6% ·2.2%

·13.8% -6.1% -6.5% 4.9%

·5.5%

·05% 1.4%

-0.4%

-4.3%

_19.7%

·6.5% ·04% -6.8'1. -3.1%

·17.3'1.

196.2 100.3 20.2

120.5 pO.6)

306.1

21.3% 34.9% 191% 30.7% -0.8% 23.3'/.

58.3

247.8

287 (1121)

164.4 12.5%

66.3 403%

98.2

0.0

98.2

0.47 -13.6% 206.7

-53% -11.0% -177% ·11.2%

-6.2% 68%

.9.4%

·73% 27.3%

0.0%

-6.8%

·21.4% _12.5% 146.3%

.1.8'/. -22.4%

·14.7'/.

147.1 74.5 24.6 99.1

(10.5) 235.7 ':.

17.3'1. 29.0% 255% 28.0% -0.9% 19.5%

57.7

178.0

22.5 (1752)

25.4 2.1%

102 40.3%

15.2

0.0

15.2

0:13 ·69.5% 1206

·58% .11.5% ·175% ·11.5%

·6.0% 4.5%

·9.6"1.

·7.5% -16.0% .10.0%

·9.7%

-19.7% ·133% ·304% .16.3'1, -21.4%

·19.0%

214,5 97.1 (O.G) 96.5

(11.3) 299.7

22.8% 34.8% -2.0% 31,3'" -0.9% 24.0%

57.7

242.0

35.0 (172.2)

104.8 84%

42.2 403%

62.5

00

62,5

0.52 -22.7% 1206

·5.5% ·12.5% -11.0%

-8.9% ·6.5% 5.0%

_7.7%

.7.5% 25% -6.6%

-7.4%

·17.6'/. -12.2%

·3353% ·12.9% ·14.7%

·16.2%

741.7 3498

'0' 390.2 (51.8)

1,080.0

20.3% 32.2% 16.1% 29.2'1. ·1.0% 21.7%

2307

849.3

989 (5396)

4("" 82%

164 5 40.3%

244.1

0.0

244.1

1.42 -29.3% 172 5

-4.4% -93%

·152% ·9.4% .£.3% 53%

-8.0%

·58% 22%

-4.4%

·19.6% ·11.3%

1.1% .10.2"1. -141% ·16.7%

1.117.4 550.8 7268

2,395.0 4970 258.3

3,150.3

951.5 231.4

1,182.9

4,333.2

507.0 2579 330

290.9 (47.9)

750.0

16.1% 271% 143% 24.6'/.

·'.1% 17.3%

2260

524.0

87.5 (5309)

'06 19%

322 400%

48.4

00

46.4

0.40 -71.7% 120.9

-100% -150% -250% .16.2% -50% -25%

.13.6%

·125% ·75%

.11.6%

.13.1%

-31.6% -263% -183% ·25.4% .75%

-30.6'1,

1.0615 509.5 617.8

2,188.8 477.2 251.9

2,917.8

889.6 223.3

1,112.9

.4,030.7

436.2 229.1

29.0 258.1 (443) 650,0

15.0% 25.8% 130% 23.2% -1.1% 16.1%

2224

427.6

80.1 (5280)

(20.3) ·05%

(8.1)

010.0%

(12.2)

00

(12.2)

.0.10 -1251%

121.7

·50% ·75%

.150% -8.6% .4.0% -25% .7.4'1,

·65% ·3.5% -5,9%

.7.0%

·14.0% .11.2% .120% .1'.3"!.

·7.5% ·13.3%

TRB0414755

LEHMAN BROTHERS Lehman Brothers August 14, 2007

Craig A. Huber (212) 526-5546

Stock Symbol

Rating

Recant Stock Prico

52-week High

52-week Low

Stock Price Return ~ YTD

% Off 52~We'ek High

12-monlh Price Target

% Change

Dividend per Share

Dividend Yield (%)

Dividend Payout Ratio (V$. 2007E FCF)

Earnings per Share (exel. extra week in 4006)

2005

2006{A)

2007{E)

2008{E)

% Change 2005 vs. 2004

% Change 2006{A) vs. 2005

% Change 2007(E) vs. 2006{E)

% Change 2008(E) vs. 2007(E)

PIE Relative - 2006(A)

PIE Relal1ve - 2007(E)

PIE Relative· 2008{E)

Er;"Iterprise, Value J ~,BITOA 200S(A)

2007(E)

2008{E)

Froo Cash Flow per Share (exci. extra week in 4Q06)

W06{A)

2007{E)

2008{E)

Price I Free Cash Flow l006{",)

2007{E),

2008{E),

I Enterprise ValueJUnleverod,FCF, ~ 2007(E)

Financial Data ($ mil: excl. extra week in 4Q06)

Revenue - 2006(A)

EBITDA·2006{A)

EBITOA Margin (%)

Revenue·2007(E)

EBITOA ·2D07{E)

EBITOA Margin (%,)

Market Capitalization ($ mil)

Shares Outstanding (mil)

Equity Market Capitalization

Total Debt

Cash

Minority Interests

Investments

Enterprise Value

Debt-to-Capital

Net DebUEBITDA (2007E)

EPS CAGR (2006·08E)

EBITDA CAGR (2006·08E)

FCF/share CAGR (2006-08E)

Dow Jones

OJ

Comparative Valuation • Newspaper Companies Sector Rating • Negative

Gannett McClatchy

GCI MNI

New York Times

NYT

Scripps,

E.W.

SSP Tribune

TRB 2·Equa! weighl 3-Underweighl 3-Underweight 3-Underweight 3·Underwelghl 3-Underweighl

58.60 47.28 23.76 22.16 40.44 25.77

61.76 63.50 44.95 26,90 53.39 34.28

32.16 43.79 22.60 21.54 38.91 25.57

60.00

2.4%

1.00

1.7%

67.1%

0.85

0.97

1.40

1.47

-14.1%

14.1%

44.3%

5.0%

3.39

2.56

2.72

1.19

1.49

1.63

49.4

39.3

36.1

40,1':

2,062 P

268 P 13.0%

2,080 P

315 P

15.1%

83.8 4,910

560 P

20

75 5,375

50.1%

1.7

23.1%

9.3%

17.1%

.~1,.8%

·25.5%

44.00

-6.9%

1.60

3.4%

33.7%

4.78

4.69

4.25

4.40

-0.4%

-1.9%

-9.4%

3.5%

~ri,l. , ,·11,,1

10.7

0.57

0.68

0.73

4.98

4.74

4.82

. 9,5

10,0

9,8

7.805 P

2,210 P 28.3%

7,497 P

2,014 P

26.9%

234.7

11,097

5.196 P 644

23 800

14,872

39.2%

2.3

-3.1%

-5.7%

-'.6%

-4S.1%

-47-1%

20.00

-15.8%

0.72

3.0%

29.0%

2.51

2.62

1.45

1.40

2.9%

4.4%

-44.6%

-3.4%

0.51

1.00

1.16

6:23/, 6,85

·,7.S1

3.12

2.48

2.38

7.6

9.6

10,0

11,6

2,455 P

620 P

25.3%

2,270

564

24.9%

82.0

1,948

2,437 P

10

o 511

3,864

46.7%

4.3

-26.9%

-8.9%

-12.7%

E ~9.0,%

~17.6%

17.00

-23.3%

0.92

4.2%

56.9%

1.49

1.32

0.89

1.00

-17.2%

-11.1%

-32.8%

12.4%

0.94

1.52

1.51

7.80

8,63

8.47.

1.98

1.62

1.58

11.2. 13.7

14,1

·15,1

3,228

487

15.1%

3.142

440

14.0%

143.9

3,189

862 P

54

200

3,796

62.3%

1.8

·13.1% -4.1%

·10.8%

-19.0%

-24.3%

36.00

-11.0%

0.56

1.4%

26.1%

2.05

2.34

2.03

2.10

17.1%

14.1%

-13.2%

3.4%

17.3 19.9

19.3

0.97

1.22

1.32

9.30 P 10,29

l0:0S

2.42

2.15

2.23

16.7

'18,8

18.1

19.8

2,508 P

857 P

34.2%

2,483

774

31.2%

163.6

6.615

685 P 24

906

215

7,967

22.3%

0.9

-5.3%

-3.8%

-3.9%

·16.3%

-24.8%

34.00

31.9%

0.72

2.8%

41.4%

2.07

1.96

1.42

1.00

·5.9%

-5.2%

-27.6%

-29.6%

13,1

18.1 . 25.B

0.74

1.11

1.76

8.26 P 9.94

10.84

1.98

1.74

1.42

13,0 . 14.8

18.1

19,1

5.366 P

1,299 P

24.2%

4,984 1,080

21.7%

118.4

3,051

9,922 P

242 P

2,000

10,731

50.2%

9.0

-28.6%

-12.7%

-15.2%

E = Lahman Brolhars estimates A= Actual P = Pro forma

Washington

Post WPO

Small-Cap Newspapers

Journal

Comm.

JRN

Journal

Register

JRC

1-0llerweight 2-Equal weight 3-Underweight

792.47 10,51 2.72

885.23 14.00 8.60

690.00 9.62 2.51

775.00

-2.2%

8.20

1.0%

37,6%

31.49

34.87

29.25

33.75

-9.0%

10.7%

-16.1%

1.27

1.66

1.60

9.74

10,S4

9.57

27.41

21.83

31.95

~8.9

3.6.3 24,8

34.0

3,905

744

19.1%

4,159

688 16.5%

9.5

7,553

417

325

395

7,250

11.3%

0.1

-1.6%

0.9%

8,0%

-16.7%

-24.9%

9.00

-14.4%

0.30

2.9%,

63.1%

0.57

0.70

0.58

0.68

-16.2%

22.2%

-16.7%

0.85

1.11

1.06

6.12 P 7,57

7.05

0.78

0.48

0.57

13.4

22,1

18.5

620 P 128 P

20.6%

578

104

17.9%

67.5

710

80 P

784

16.8%

0.7

-1.2%

-6.8%

-14.8%

~62.7%

·68.4%

2.00

-26.5%

0.08

2.9%

17.2%

1.00

0.73

0.45

0.35

-9.9%

-27.4%

-38.0%

0.21

0.37

0.53

6,94 P

8.29, 8.96

0.66

0.47

0.43

4.1

5.8

6.4

18.4

498 P 109 P

22.0%

465

92

19.7%

39.1

106

656

759

74.3%

7.1

·30.6%

-12.0%

-19.8%

Nole: Rovenue and EBITDA multiples Bra pro forma, as noaded, tor full year tor acquisitions/divestitures. EPS and froe cash 1100'1 estimates are from transaction closing date fomaro.

Free cash 1I0w = Net lncome + O&A • Capital Expenditures; capital expenditures, though, tor New York Times, Journal Communications, and Joumal Register exclude large one-time projects.

Figures for Gannett, McClatchy, New York Times, Tn'bune, Journal Communications, and Joumal Registor exclude extra week in 4006.

tncludes stock option expensmg beginning 1006. New York Times includes stock option expensing beginning 2005 (full-yoar).

Source: Lehman Brothars

12


Average (Excl. DJITRB)

2.7%

37.7%

.--4.7%

1.6%

~?4.4% 3.8%

13.5

17.7

.16:5

0.76

1.08

1.13

7,55 , '8.51

. 8.45

13:1

16,6

14.5

19,81

23.5%

'21,6%

'39,0%

2.5

.~1.7%

-5,8% -7.9%

TRB0414756

LEHMAN BROTHERS Tribune Sum-ol-the-Parts Analysis (Dollars in millions, except per share dala) Jp-dated 8/14/07

Newspapers Television (adjusted)

Radio I Entertainment (excluding Chicago Cubs)

Corporate

Total

2008(E) EBITDA

658.7

345.9 26.8

(S2.3) 979.0

EBITDA

Multiples

7.0 9.0 9.0 7.8 7.8

Total Dobt (after 126 mil share tender)

PHONES Dehl

Cash Divestiture Proceeds (Chicago Cubs; $1.0 bil pre-tax; $100 mil tax base assume)

Divostiture Proceeds (Stamford/Greenwich/Hoy NY nowspapers)

Investments

Summary of Investments

Public Companies

AdStar

Time Warner Inc. (16 m11 shares related \0 PHONES)

Equity Markol Value· adjustod Shares Outstanding (mil; after 126 mil share lender)

PotentiaISlock'Price' olo·"Change from Currenl~Prlco

Market Value

(mil) Valuation Methodology

3.2 295.7

3.4 mil shares x slock price

16 mIl shares x slack price

Estimated Stock

Markel Value

4,637.0

3,126.6 241.2

(40S.6) 7,599.2

7,599.2 (8,622.3) P (1.300.0)

182.1 640.0

60.0 2.000.0

559.1 118.4

. $4.72 -81.7%

EBITDA MUltiples

9.0 11.8 11.0 10.0 10.0

Private Companies

CareerBuilder (40.8%) 536.8 $247.5 mil x 1.35 x 1.125 x 3.5 x 40.8% = $537 mil; which values 100% at $1.32 bil (2005 rev. x 2006 growth x 2007 growth x 3.5 rev. multiple x 40.8% stake)

California Independent Postal Systems (50%) Classified Ventures (28t>/D)

Comcasl Sports Network (25%)

Consumer Networks (17%)

ShopLocal.com (42.5%) Legacy.com (40%)

TMCT I and TMCT II Portfolios (5%) Topix.net (34%)

:ood NQtwork (31 %)

Miscellaneous

To!afEstimatcd Value of Inves~e:l)ts':

E = Lehman Brothers estimates A= Actual P = Pro fonna

Note: Broadcasting EBITDA is adjusted to nonnalize for political advertising

10.0 63.0 15.0

2.0 36.0 10.0 70.0 24.5

906.2 27.7

2,000.0

Estimated

3x $75 mil revenue (28% ownership) Estimated

Estimated

$85 million x 42.5% (value as of 8/1/06 per company) Estimated

Remaining portfolios estimated value of $1.4 b1l1ion: Tribune owns 5%

$72 million x 34% (value as of 811106 per company) 10.5x 5278.4 mil2008E EBITDA incl. 40% of shared costs (31% ownership)

Estimated

(uses average 2007E and 2008£ EBITDA). Tribune. howev~r. has rolativoly little political advertising.

PHONES debt of $1.3 billion broken out soparatefy.

Private market estimate equates to going private transaction a/ruady announcod at $34 per sham. Sourco: Lehman Brothers


13

Private

Market Value

5.927.9 4.063.9

294.8 (S23.3)

9,763.3

9,763.3 (8.622.3) P (1.300.0)

182.1

640.0 60.0

2.000.0

2,723.2 118.4

$23.00 -10,7%


EBITDA Multiplos

10.1

13.5

13.0

11.3

11.3

Sam Zell

Estimated Private

Markel Value

6,636.0

4,669.1

348.5 (S88.7)

11,064.8

11,064.8

(8.622.3) P (1,300.0)

182.1 640.0 60.0

2,000.0

4,024.7 118.4

$34.00' 31.9%

TRB0414757

Tribune After-tax Sum-of-the-Parts Analysis :Dollars in millions, except per share data) Up-dated 8/14/07

Newspapers

Television

Radio / Entertainment (excluding Chicago Cubs)

Corporate

Total

Debt

PHONES Debt

Cash

Divestiture Proceeds (Chicago Cubs)

Divestiture Proceeds (Stamford/Greenwich/Hoy NY newspapers)

Investments

Total

Shares Outstanding (mil)

Per Share

. Summary of Investments

Public Companies

AdStar

Time Wamer Inc. (16 mil shares related to PHONES)

Private Companies

CareerBuilder (40.8%)

California Independent Postal Systems (50%)

Classified Ventures (28%)

Comcast Sports Network (25%)

Consumer Networks (17%)

ShopLocal.com (42.5%)

Legacy.com (40%)

TMCT I and TMCT II Portfolios (5%)

Topix.net (34%)

Food Network (31 %)

Miscellaneous

Total

E = Lehman Brothers estimates A= Actual P = Pro forma

Note: Broadcasting EBITDA is adjusted to normalize for political advertising

Estimated

Private

Market Value

5,927.9

4,063.9

294.8

(523.3)

9,763.3

(8,622.3)

(1,300.0)

182.1

1,000.0

85.6

2,000.0

3,108.8

Estimated

Private

Market Value

3.2

295.7

536.8

10.0

63.0

15.0

2.0

36.0

10.0

70.0

24.5

906.2

27.7

2,000;0

(uses average 2006E and 2007E EBITDA). Tribune. however. has relatively little political advertising.

PHONES debt of $1.3 billion broken out separately.

Source: Lehman Brothers

14


Estimated

Tax

Basis

1,482.0

1,580.8

29.5

3,092.3

100.0

21.4

518.5

Estimated

Tax

Basis

3.2

29.6

217.0

7.5

15.8

11.3

1.5

27.0

9.0

17.5

18.4

135.9

24.9

518.5

LEHMAN BROTHERS

Tax Taxes

Gain Rate Paid

4,445.9 40.0% 1,778.4

2,483.0 40.0% 993.2

265.4 40.0% 106.1

7,194.4 40.0% 2,877.7

Tax inefficient ,/'"

900.0 40.0% 360.0

64.2 40.0% 25.7

1,481.5 40.0% 592.6

3,,856.1

b 118.4

$32.57

Taxes Paid

Tax Taxes

Gain Rate Paid

0.0 40.0% 0.0

266.1 40.0%) 106.4

319.8 40.0% 127.9

2.5 40.0% 1.0

47.3 40.0% 18.9

3.8 40.0% 1.5

0.5 40.0% 0.2

9.0 40.0% 3.6

1.0 40.0% 0.4

52.5 40.0% 21.0

6.1 40.0% 2.4

770.3 40.0% 308.1

2.8 40.0% 1.1

1,481.5 40.0% 592.6


% Total After·tax

Paid in Taxes Proceeds

30.0% 4,149.5

24.4% 3,070.7

36.0% 188.7

(523.3)

29.5% 6,885.6

(8,622.3) P

(1,300.0)

182.1

36.0% 640.0

30.0% 60.0

29.6% 1,407.4

(747.2)

? 118.4

($6.31)

Negative Equity Value

After·tax

% Total After·tax

Paid in Taxes Proceeds

0.0% 3.2

36.0% 189.2

23.8% 408.9

10.0% 9.0

30.0% 44.1

10.0% 13.5

10.0% 1.8

10.0% 32.4

4.0% 9.6

30.0% 49.0

10.0% 22.0

34.0% 598.1

4.0% 26.6

29.6% 1,407.4

TRB0414758

Tribune After-tax Sum-of-the-Parts Analysis (!;!ost 2nd tranche of !;!rivatization deal) Dollars in millions, except per share data)

Up-dated 8/14/07

Estimated

Private

Market Value

Newspapers 5,927.9

Television 4,063.9

Radio I Entertainment (excluding Chicago Cubs) 294.8

Corporate (523.3)

Total 9,763.3

Debt (8,622.3)

Debt (additional $4.2 bilHon d~btror 2nd tranche of privaiiz~tion d~al) "(4,200:0)

PHONES Debt (1.300.0)

Cash 182.1

Divestiture Proceeds (Chicago Cubs) 1,000.0

Divestiture Proceeds (Stamford/Greenwich/Hoy NY newspapers) 85.6

Investments 2,000.0

Tolal (1,091;2)

Negative Equity Value / Pre-tax

Estimated

Private

Summary of Investments Market Value

'ublie Companies

AdStar 3.2

Time Warner Inc. (16 mil shares related to PHONES) 295.7

Private Companies

CareerBuiJder (40.8%) 536.8

California Independent Postal Systems (50%) 10.0

Classified Ventures (28%) 63.0

Comeast Sports Network (25%) 15.0

Consumer Networks (17%) 2.0

ShopLocal.com (42.5%) 36.0

Legacy.eom (40%) 10.0

TMCT I and TMCT " Portfolios (5%) 70.0

Topix.net (34%) 24.5

Food Network (31 %) 906.2

Miscellaneous 27.7

Tolal 2,000,0

E = Lehman Brothers estimates A=Actua/ P = Pro (orma

Note: Broadcasting EB/TDA is adjusted to normalize (or political advertising

(uses average 2006E and 2007E EBITDA). Tribune, however, has relatively little political advertising.

PHONES debt o( $1. 3 billion broken out separately.

Source: Lehman Brothers

15


Estimated

Tax

Basis

1,482.0

1,580.8

29.5

3,092.3

100.0

21.4

518.5

Estimated

Tax

Basis

3.2

29.6

217.0

7.5

15.8

11.3

1.5

27.0

9.0

17.5

18.4

135.9

24.9

518.5

LEHMAN BROTHERS Lehman Brothers

Craig A. Huber (212) 526-5546

Tax Taxes % Total After·tax

Gain Rate Paid Paid in Taxes Proceeds

4,445.9 40.0% 1,778.4 30.0% 4,149.5

2,483.0 40,0% 993.2 24.4% 3,070.7

265.4 40.0% 106.1 36.0% 188.7

(523.3)

7,194.4 40.0% 2,877.7 29.5% 6,885.6

Tax inefficient / (8,622.3) P

(4,200.0)

(1,300.0)

182.1

900.0 40.0% 360.0 36.0% 640.0

64.2 40.0% 25.7 30.0% 60.0

1,481.5 40.0% 592.6 29.6% 1,407.4

3,856.1 (4,947.2)

/ ~ Taxes Paid Negative Equity Value

After-tax

Tax Taxes % Total After-tax

Gain Rate Paid Paid in Taxes Proceeds

0.0 40.0% 0.0 0.0% 3.2

266.1 40.0% 106.4 36.0% 189.2

319.8 40.0% 127.9 23.8% 408.9

2.5 40.0% 1.0 10.0% 9.0

47.3 40.0% 18.9 30.0% 44.1

3.8 40.0% 1.5 10.0% 13.5

0.5 40.0% 0.2 10.0% 1.8

9.0 40.0% 3.6 10.0% 32.4

1.0 40.0% 0.4 4.0% 9.6

52.5 40.0% 21.0 30.0% 49.0

6.1 40.0% 2.4 10.0% 22.0

770.3 40.0% 308.1 34.0% 598.1

2.8 40.0% 1.1 4.0% 26.6

1,481.5 40.0% 592.6 29.6% 1,407;4

TRB0414759

Tribune Newspaper Breakdown ¥¥ Potential Newspaper Sales (Dollars in millions) Jp-dated 8/14/07

NCWSp.-1POf 2000 2001

Nowspapers Likely to be Kept. Core Markots

2002

los Angelos Tlmos 833.7 1,091.6 1,110.4 Chicago Tribuno 870.0 764.2 762.5 Nowsday (Long Island, NY) 456.4 593.8 584.1 South Florida Sun-Sentinel (Fort Lauderdale) 347.2 308.7 269.8 The Hartford Courant 249.0 252.8

Revenue

2003 2004

1,129.2 1,134.8 812.4 853.2 604.8 614.7 273.8 284.9 252.B 255.3

LEHMAN BROTHERS

2007{E) Privale 20D7(E) EBJTDA EBITDA Mark~t' EsUmatcd

2005 20D6{A) Z007(E) EBITDA Margin Multlplo Value Tax Basis

1,111.1 1,116.9

873.7 862.7 574.9 541.1 293.9 321.6 252.7 252.7

985.6 789.3

500.5 279.7 233.8

216.4 189,4 50.0 62.9 44.4

22.0% 24.0% 10.0%

22.5% 19.0%

8.5 \1,849.4 8.5, 1,610.2

6.5 325.3 .1.5 472.0

"7.5 333.1

462.4 402.6

81.3 118.0

83.3

Gain

1,387.1 1,207.7

244.0 354.0 249.9


Ta, Rata

40.0% 40.0% 40.0% 40.0% 40.0%

After·lax Taxes AftCt~tax ,:EBITDA

Paid Proceeds MulUple

554.8 483.1

97.6 141.6

99.9

1.294.6 1,127.2

227.7 3$0.01 233.2

6.0 6.0 4.6 5.3 5.;1

Total 3,007.3 2,979.6 3,073.0 3,142.8 3,106.2 3,095.0 2,789.0 563.3 20.2% 11.1 4,590.2 1.147.5 3,442.6 40.0% 1,377.1 ,3,213.1 5.7

Nowspapers L1koly to bo Dlvosted Baltimore Sun Orlando Sentinel Momlng Call (Allentown. PAl Daily Press (Newport News, VA)

Total

244.5 279.5

328.2

297.6 150.5 119.8

896.1

333.1 306.5 152.7 121.6

914.0

333.1 309,6 152.7 121,6

917.1

336.5 323.5 154.3 122,8

937.1

333.1 333.2 152.7 121.6

940.6

316.4 358.2 152.7

121.6

949.0

292.7 304.5 145.1 115.5

857.8

51.2 17.5% .7.5 384,2 68.5 22.5% . , '7.5 51.3.9 32.6 22.5% "',' 7.5 244.8 26.0 22.5% ~7.5 194,9

178.4 20.8%

96.0 128.5 61.2 48.7

288.1 40.0% 385.4 40.0% 183.6 40.0% 146.2 40.0%

334.4 1,003.3 40.0%

115.3 154.2

73.4 58.5

401.3

208.9 359.7 171.4 136.4 '

936..4

5.3 5.3 5.3 5.3

3,475.3."' 3,90~.4 3,893.6 3,990.0 .4,019.9 4.046.9 4,044.0 ~,646.8 741.1 20.3% 8.0 5,927,9 1,482.0 4;445.9. 40.0% 1,178.4 4,149.5 5.6

Nole: Ravenue for tho former Times Mirror ncwspap(!.rs uro included beginning on April 17. 2000.

Excludes Stamford/Greenwich/Hoy New York nuwspapors.

2000 and 2006 inc/IJdus on extra wc.'ak of operations {lUG to fiscal reporting.

SOl/rce: Company reports and Lehman Brothots estimatfJS

Tribune TV Station Breakdown -- Potential TV Station Sales (Dollars in millions) Up-dated 8/14/07

Station City

Current Blended Network 2006/07(E)

Affiliation Revenue

TV Stations Likely to be Kept - Core Markets WPIX New York KTLA Los Angeles WGN Chicago

Total

CW CW CW

N Stations Likely to be Kept - Existing Duopolles KCPQ Seattle FOX

KTWB Seattle WXIN Indianapolis wnv Indianapolis WTIC Hartford WTXX Hartford WGNO New Orleans WNOL New Orleans

Total

My Network TV FOX CW

FOX CW

ABC CW

230.8 147.7 162.9

541.4

42.5 15.3 29.3 14.9 34.5

8.4 11.3 7.9

164.0

TV Stations Likely to be Kept - Ft Lauderdale Newspaper Overlaps WBZL Miami CW 52.3

TV Stations Likely to be Divested WPHL Philadelphia KDAF Dallas WBDC KHWB KWGN KTXL KPLR KWBP

KSWB WXMI

WPMT

Total

Washington Houston Denver Sacramento St. Louis Portland San Diego Grand Rapids

Harrisburg

Total Broadcasting

Total With Low Tax Basis (0/0 of the total)

Total With High Tax Basis (% of the total)

My Network TV CW CW CW CW

FOX CW CW CW

FOX FOX

52.3 62.7 34.5 44.5 36.4 41.9 26.4 15.4 25.3 20.8 14.9

375.0

641.4 56.6%

491.4 43.4%

Blended 2006/07(E)

EBITDA

93.1 56.9 62.7

212.7

15.9 3.1 9.7 4.9

10.7 2.6

2.3 1.6

50.7

14.4

10.5 17.2

9.5 12.2 10.0 12.6 6.6 3.8 6.3 5.7 4.1

98.6

376.4

235.4 62.6%

140.9 37.4%

Note: Broadcasting EBITDA is adjusted to nonnalize for political advertising

2006/07(E) .. , :l'rivate Year

EBITDA EBITDA fyIarket Joined Margin MuiilPie Value Tribune

40.4%

38.5% 38.5%

39.3%

37.5%

20.0%

33.0% 33.0%

31.0% 31.0%

20.0% 20.0%

30.9%

27.5%

20.0% 27.5% 27.5% 27.5% 27.5% 30.0%: 25.0% 25.0% 25.0% 27.5% 27.5%

26.3%,

33.2%

11.3 1,051.0 11.0 '625.5 11.0 689.7

'11.1 2;3,66.2

,11.0 .10:0 11.0 10.0 ,1M .10.0 11.0 10.6

175.3 ·30.6

106.4 A9.0

·117.8 .26.0 :24:9

15.7

10.8 545.6

10.0

.10.0 10.0 10.0 10.0

.10.0 11.0

'10.0 10.0 10.0 11.0

'11.0

143.9

104.7 172.4 95.0

122.3 100.1 ,138.2

65.9 38.5

. :63.3 62.8

.45.0

10.2 1;008.1

10.8 4,063.9

:2;~;g5.8 63.9%

1,468.0 :i6.1%

1948 1985 1948

1999 1998 1997 2002 1997 2001 1983 2000

1997

1992 1997 1999 1996

1966 1997 2003 2003 1996 1998 1997

(uses average 2006E and 2007E EBITDA). Tribune, however, has relatively little political advertising.

Source: Company reports and Lehman Brothers estimates

16


/ / Estimated taxes paid on sale of all newspap~rs Exlromoly lax inefficlont


High 1 Low Estimated Tax Basis Tax Basis Gain

Tax

Rate

Low Low Low

High High High

Hi9h High

Hi9h Low

High

High

Low High High High

Low High High High High High High

105.1 945.9 40.0% 62.5 562.9 40.0% 69.0 620.8 40.0%

236.6 2,129.6 40.0%

157.8 27.5 95.7 44.1

106.0 23.4

2.5 14.1

471.2

129.5

10.5

155.2 85.5

110.1 10.0

124.3 59.3 34.6 57.0 56.5 40.5

743.5

17.5 40.0% 3.1 40.0%

10.6 40.0% 4.9 40.0%

11.8 40.0% 2.6 40.0%

22.4 40.0% 1.6 40.0%

74.5 40.0'%,

14.4 40.0%

94.2 40.0% 17.2 40.0% 9.5 40.0%

12.2 40.0% 90.1 40.0% 13.8 40.0% 6.6 40.0% 3.8 40.0% 6.3 40.0% 6.3 40.0% 4.5 40.0%

264.6 40.0%

Taxes

Paid

378.3 225.2 248.3

851.8

7.0 1.2 4.3 2.0 4.7 1.0 9.0 0.6

29.8

5.8

37.7

6.9 3.8 4.9

36.0 5.5 2.6 1.5 2.5·

2.5 1.8

105.9

1,580.82,483.0 40.0% 993.2

,::::: ';::: ::::1 "::: 83.6% 5.9% I 59%

Estimated taxes paid on sale of all TV stations

After-tax

400.3 441.4

1,514.4

168.3 29.3

102.1 47.1

138.2

67.0

165.5 91.2

.117.4 64.1

132:6 63.3 36.9 60.8 .60.3 .43.2

902.3

3,070.7

1,661.3 54.1%

1,409.3 '45.9%.

After;t~x

EBITDA

7.1

10.6 9.6

10.6 9.6

10.6 9.6

7.0 9.6

10.2

9.0

6.4 9.6

9.6 9.6 6.4

.10.6 9.6 9.6 9.6

10.6 10.6

9.2

8.2

/'

7:1

•.•• 10.0

Extremely tax inefficient

TRB0414760

LEHMAN BROTHERS Lehman Brothers Craig A. Huber (212) 526-5546

Newspaper Advertising Trends - Overall Year-Over-Year % Change

T alaI Ad Revenuo Gannett

(ox. currancy) Journal Comm.

Journal Register

KllIghl Ridder

MeClat· Media New York Boston Globa

NYT Scnpps. Waf/Stroet 8clo Gannett chy General Timos Rogionufs E. W. Tribune Journal

2003 Jan. Feb. Mar.

Apr. May June July

Aug. Sopt OcL Nov.

Doc.

2004 Jan. Feb. Mar. Apr.

May Juno July Aug.

Sep!.

Oct. Nov. Doc.

2005 Jan. Feb. Mar. Apr.

May Juno July

Aug. Sept.

Oct. Nov.

Dec.

2006 Jan: Feb; Mar. Apr. May;' ) June'

,July Aug. Sepl. Oct. Nov. Doc,

2007 Jan. Feb. '

Apr. May June

¥TO

1990 Annual 1991 Annual 1992 Annual 1993 Annual 1994 Annual 1995 Annual 1996 Annual

1997 Annual 1998 Annual 1999 Annual

2000 Annual

2001 Annual

2002 Annual

2003 Annual

2004 Annual

2005 Annual

2006 Annual

2.6 1.3

-3.6 0.5 2.2

-0.7

3.7 2.0 2.1 4.1

2.0 5.1

5.5 14.1

1.7 7.3

10.3 -2.0 4.7

-0.2 5.9 7.1

-8.9 1.3

5.7 .0.2 -0.2 3.9 1.5

2.2 10.1 -3.0 7.3 2.7 7.0 5.1

~3,2

10.8 12A

7.2 2.2

3.4 10.0

-11.1 -0.5 1.7 0.9 3.0

-0.6

5.1

3.7 1.7 2.9 ,., 5.1 2.5 2.6 4.5 6.1 5.3 7.0

6.1

9.0 13.5 8.8 9.0 9.8

9.5 10.7

9.1

5.6 5.6 5.4

4.7 5.9 4.2 4.2 4.7 0.6 2.6

-0.6 1.9

0.6 -3.3 -0.5

-0.6 -2.8 ·2.0 ;2.0 .

2,1' ,1,0

O~5' , _~.9·~

-3,~

0.3 .' '0.8

·2.0 -3,' .0.6 .,;.,'

·3.6

-5.0 -3.6 2.9 4.3 6.8 3.6 5.2 7.4

6.4 5.6 5.1

-8.1

0.2 4.6 8.3 1.6

-0.6

Nole: Bcla figures am for tolal publishing mvanu(J.

3.0 3.0

4.0 5.0 4.U 5.0

4.0 6.4

9.' 6.5 7.1 7.6 7.2 6.2 6.5 4.4 3.9 3.8

3.9 5.6 3.3 3.5 3.6

0.6 3.4

-0.3

1.9

0.6 -2.4 1.1

0.6

6.3 2.1

-0.7

-2.0 0.6 6.3 4.4 7.8 0.9 6.7 5.7 4.7 5.7 3.6 2.9

2.6 4.0 0.1 4.0 0.6 5.0 3.1 1.1 0.7

-1.0 -2.6

-5.6

4.1 0.5

".2

0.3 -0.6 -0.9 -1.1 -2.7 2.2 0.0 0.7 0.4 0.7 1.0

-0.7

2.3 3.0 6.4 3.3 6.2 3.6

4.6 3.0 3.1 4.7 2.2 1.4

2.5 1.6

-1.7

0.8 -1.7

-2.2 0.2

-0.3 -3.1

".2 -2.7 -2.3

3.1 -6.0 -1.6 -0.1

3.7 -1.1

".7

1.9 1.1

-2.3 1.7

-OA 1.3

-2.3 -1.6

0.5

0.4 -0.7

1.4

0.0 1.0

5.6 1.1

2.9 3.2 1.4 4.3 4.3 3.1 6.6 4.4

4.2

5.2 0.7 2.0

3.5 0.9 2.1 1.2 2.2 0.1 0.4

-1.1

,3.0

-2.4 -8.2 1.0

2.6 6.9 5.6 5.2 6.0 3.6

'.5 6.6

-10.1 -2.1 0.1 3.1 1.7

5.2 3.0 3.9 4.3 1.6 2.4 3.1 2.6 6.8 3.5 3.1 5.0

3.6 4.3 9.1 6.1

6.1

7.9 6.2 5.0 3.5 3.5 5.6 5.'

4.4 6.2 1.9 2.6 3.6 2.6 2.6 2.7

'.2 2.4 1.6

-1.0

4.6 -0.6 -'0,1·, '-2.2

4·8 2.2 0.0 .

-M -2.1 -2,1 .... 7 -3.4

.. 5,8

·5.2 .... 9 -7.6

6.3 0.5 2.4 1.3 5.1

2.9 2.0 5.6 4.1

5.1 5.9

-6.0

0.7 3.7 5.5 2.6

-0.3

2.6 0.4 0.3 2.3 1.5 5.5 5.7 3.0 5.1

5.9 6.2 2.6

3.5 3.0 6.7 3.2 5.2 4.6 5.7 4.2 3.7 5.1

3.2 6.2

7.0 9.2 6.0 6.6 5.1

5.0 4.4 4.5 6.2 3.2 6.3 0.7

',6.1

1.7 6.4

. ,1:2 9.3 2.8 1.6 0.1

·2.4 -0.6 4.3 ,:,.6.

·0.3 1.6 6.0

4.7 2.1 7.5 5.2 2.6 9.2

-8.1

".3 3.5 4.5 5.3 1.7

6.8 6.0

-1.1

-1.0 2.4 3.5 0.0

-3.7 1.8 0.4

-1.2 5.7

-2.2 -1A

7.1 6.9 1.6 1.7

-0.2 6.9 1.2

-0.8 6.2 1.1

2.3 2.2

-2.2 0.7 4.6 1.4

4.9 -0.8 3.8 9.4 5.0 9.2

· .. Its, '3.3 :.<1.1:; '2.J 5:S.

'1.5'

4··'. 4.2: -3;5 ·5.4 .... ,. .(l:e

3.4 3.5

-5.1 -1.3 1.4

6.9 1.9 1.6

3.6 1.6 3.1 1.2

5.7 -0.2

12.8 1.9

4.9 -1.1

5.2 9.4

0.4 4.6

-0.6 3.6

-3.9 0.6

-9.3 3.4

-5.7 -1.1 -1.8 -2.5 -4.1 -6.5 -2.2 -2.1

:..j.g , ·12.0

~.9 . :13.3

. ;-6.9 '-10.0 -11.7 -15.7

"-10,0

-1.1.8 .10.7

:"-1.2.2

0.6 ·9.7 '7.5 ."'.'.0 .'3.7 2.2 .-3,8- . :"3.3 ·9.1 ·8.6 :~.O, ,.·lj.e

;,4.4

12.2 7.0

11.0 11.2

-15.9 -1.1 1.7 2.2 3.6

-0.9

.s.o

9.6 1.6

3.2 6.e

-18.3 -2.2 1.6

3.7 -2.9

-10A

3.7 2.0

1.3 1.2 U.6

2.1 3.2 0.9 2.4 3.5 1.8

3.3

5.6 1.7 7.7 3.4

4.7 8.0 2.6 6.8 5.9 3.3 4.2 4.4

5.5 6.3 6.4 5 .. 5.0 4.2 5.9 3.0 2.8 3.0 4 .•

2.0

5.6 5.9 3.1 5.3 7.1 3.a 0.3 1.9,

0.9 0.7

·1.3 ..... U

-6.5 -8.1 -6.8 ~9.1

-14.0 -12.2

-9.3

6.1

4.9 ".1 O.g 2.2 4.6 4.6 2.5

Scripps' 1992-1996 numbors Bre not pro fonna for acquisitionS/divestllUres; beginnmg Jan. 2001 ad revonuos from Scnpps' Denver newspaper are excluded.

Gannett. Knight Riddor. McClatclw. MedIa General, New York Times, and Tribune's (igurus for December llnd (ul/'year 2000 mclude an exira week. Beginning January 2001, Boston Globe numbers include Worcester, MA newspaper. Beginning 2003. Tnbune's newspaper ad figures include In/eractivo.

Boginning 2004. Knight Ridder ad revenue figures mdude on-linD advenlsing.

New York Times figures reslaled 10 indude Inlomel revenue s/aning in 2004. Washington Posl fIgures for 2004 and 2005 exclude extra week in 2004 due /0 fiscal reporting. McClatchy figures mclude Inlernel revenue starling in 2005. geginning III October 2005, Wall S/reel Journal per issue ad Image is no longer mellningful as tho Weekend Edllion makes data not comparable, :-Iow York Times Regional figures exclude small acquisition from February 2005 through J<lnuary 2006. McClalchy figures aro pro forma for tho Knight Ridder acquiSItion beginning in July 2006.

3.3 3.2 1.7 5.5 1.5

-0.1 1.6

7.6 ·5.8 3.1

5.6 -3.7

4.1

12.3 -3.0 0.6 e.o

-3.1 5.5 0.0 2.3 9.3

-4.6

3.6

11A

-3.6 4.2 5.7 38 3.9

11.6 -2.4, 10.5

2.6 5.4 7.3

5.4 6.7 7.3

14.4 -1.4 6.6 1.0 1.3

.(l.3 ·1.5 -0.2 1.0

'.0 '3.0 0.1 0.6 3.4

4.7 3.3 1.7 2 .. 2.9 2.0 4.5

2.0 4.3 8.3 6.6 4.1 4.2 2.6 3.0 2.2 3.4 4.2 2.5

3.9 3.2

:2.1 ,:0 0.3 0.5 1.5 0.6 4.3 1.4

-2.4 .... 5

0.2 -2.2 2.1

'2.0

3.6" ,;1.4 ~1.4 , -2.3 ·3.1

"'.0 '-0.3 -2.5

'7.3 ~5.1

·5.7 -10.~ ~11.8

-11.5

-8.'1

'0.2 -8.0

3.1 1.6 10.0 4.8 11.9 10.0 7.3 :5.1 5.3 2.0 7.6' 8,2 6.5 4.2 8.0 3,4 6.0 3.3

-4.5 .'1.5 1.2 0,0 1.9 2.8 2.7 3,9 4.9 0.5 3.3 -1.1

1.9 -5.1

-16.3 .0.0 3.0

-16.1

4.0 -9,5

3.1 2.0 4.9

10.6

, 8.3 26.1 19.1 ' 8.3

',10.1 17,4

5.8 6.9

-5.9 5.7· '3:6 6.1

5.7 ·10.0

" .Q.6

:"12.2 ·3.4

"'.9

"'.3

-2.3 6.8

Average Excl. WSJ

3.6 2 ..

-0.4 1.4 1.6

3.2 2.1 1.6

2.3 3.1 2.7 3.1

2.7 4.1

6.6 4.3 5.8 3.0 4.4 4.7 3.6 4.5 2.2 3.4

4.1

3.0 0.6 3.3 2.0 2.0 4.0 0.3 3.1 1.1 1.5

0.7

2.3 .(l.S .1.9 "'.4 1.6

.(l.2 -2.7 ~ .. 2 .... 0 ~:'1 ·3.2

'-3.9

'·5:4 -8.2. ",.7 -7.2

~1.1:0

·9.9

·7.5

-1.1

-4.8 1.0 3.7 6.7

6.3 4.9 8.5 4.7 5.9 6.2

-9.4 -0,8 2.2 3 .• 2.1

-1.6

Gannel/, Journal Communiclllions, Journal Regis/er, McCialclw. Media Goneml. New York Times, and Tribune figures for December and full-year 2006 exclude extra week due to fiscal (Oponing. Ad revenuo averages are not weighted. Source: Company reporls

17


T olal Ad linage

Wall Stroot WSJ Journal (per issue)

-1.2 -9A

-20.0 -14.4

-9.3

1.0

".4 -10.0

29.4 13.2

".2 19.0

-5.1 -1.7

25.2 7.5

1.4 1.1

-7,9

'.7 -10.2 -12.7 10.2 -9.9

-5.2 -8.2

-9.9 -4.6 -2.6

-11.7 o.e

-1.9

e.e 1.1 6.7

17.0

8.0 18.6 17.2 .3:8 12.8 17,9 11.7 6.7

:8.2 ",;8 .... 8 J~:1.3

],5 -a:G '6.5

-12.7 ,·7.3 ·14.4

-7.4

-9.7 -10,3

4.0 3.3

-1.2 2.2

13.9

13.4 ~1.1

17.9 14.1

-37,6

-17.6 -1.3

-0.5 -0.7

6.0

-1.2 -9A

-20.0 -14A

-5.0 ~3.8 .... -5.7 23.3 13.2 -1.2 13.6

-0.6 -1.7 14.3 7.5 6.5

-3.5 -3.5 -0.1

-10.2

".3 -0.3

-13.8

-5.2

-8.2 -9.9 -0.1

-7.3 -11.7

5.6 -6.2

·0,6

,-

3.2 4.1

-1.2 2.6

13.0 13.8 -1.1

17.9 14.1

·37.6 -17.6

-1.3

-1.3

Wash. Post

·12.0 -13.0

".6 -1.6 -1.0 -5.8

".6 2.9

-3.1 -2.2

".0 -12.8

-5.1 -2.7

-2.0 -6.4

-5.3

TRB0414761

LEHMAN BROTHERS Lehman Brothers Craig A. Huber (212) 526-5546

Advertising Trends - Television Stations and Cable Networks Year-Over-Year % Change by Indicated Category

2003 Jan. Feb. Mar.

Apr.

May

June

July

Aug.

Sep\.

Oct. Nov.

Dec.

2004 Jan.

Feb

Mar.

Apr.

May June July Aug. Sep\. Oct.

Nov.

Dec.

2005 Jan.

2006

2007

Feb.

Mar. Apr.

May June

July Aug.

Sept.

Oct.

Nov.

Dec.

1990 Annual 1991 Annual


1995 Annual 1996 Annual

1997 Annual 1998 Annual 1999 Annual 2000 Annual



8elo

12.0 -5.1 M2.B 5.6

-1.1 -2.8 0.4

·2.1 5.2

~17.5

-4.6 2.1

2.6 14.6 15.2 6.2 4.4 7.7 5.5

11.4

3.2 27.6

7.6 3.5

2.5 -5.2 -2.1 ·3.7 -0.6 ·6.5 -7.1 ·8,5 -4.3

-18.9 0.4 2.9

25.0 3.3 3.6 4.B

1.6 6.5

·11.3 10.0 -1.7 9.2

-5.1 9.5

Gannett

8.1

-4.7 4.2 1.2

·3.B -4.2 ·7.2 ·7.7

-25.9 -5.0 ·2.4

6.4 3.8

11.2 8.6 9.5

8.' 11.9 37.5

5.8 34.8

8.4 1.5

-3.6 ·3.8 ·5.7 ·6.5 -6.6 -7.7

-11.1 -34.9 -B.B

-24.7 -3.2 5.1

-3.0 -10.0

3.7 8.2

14.1 9.2

12.3 4.0 6.3

-0.6 7.8

-16.0 16.4 ·6.7 12.9

·10.6 10.3

Telovision Station Revenue

Journal

Comm.

3.5 5.8

11.9 11.9 11.8 12.8 4.3

15.6 20.0 32.4 28.0

6.6

18.7 3.5 3.5 0.1 0.2 3.9

-4.3 -9.1 -9.1

-20.2 -16.3

-1.8

14.1 -2.6 9.6

Media

General

9.5 -3.5

·2.0 1.5

·6.4 -9.6 -5.1 7.2

·3.7 ·21.2

·5.8 1.8

16.6 2.9 8.8

10.4 10.2 11.4 12.3 10.7 4.2

38.5 12.0 10.7

-4.3 3.4 4.7 3.0 0.5 2.6

-0,' -9.3 -0.6

·23.3 -0.4 3.3

9.5 7.1

-5.3 9.3

-1.2 55.7 -1.9 15.9 -4.2 13.1 -2.9 9.1

Note: Scripps' 1992·1996 numbers are nof pro (onna (or acquisitions and divestitures. Gannett, Med/a General. and Tribune's figures (or December and full yoar 2000 include an extra week. Media General data beginning Apn'l 2000 includes 13 stations acquired 3127100. For Journal Commun/callons, lelevision revenue includes radio (approximately 50% TV 150% rad/o).

Scripps,

EW.

28.2 -1.3 -2.4 5.8 3.7 3.1

-3.7 -1.1

2.2

-7.2 -0.8

-6.9 17.0 15.3 13.4

8.8 10.3 6.1

20.1 B.7

43.5 B.O 2.B

-3.8 -4.3 -5.2 -8.4 -2.7 -3.4 -5.2

-17,5 -5.8

-2B.1 2.4 7.5

7.1

2.4 9.6 2.4

-0.2 -5.5 9.8

-19.1 9.9

-0.3 12.6 -7.3 14.4

, Tribune

10.0 14.0 9.0

13.0 7.0 2.4 0.0 0.0 4.7

-1.9 -1.5 5.2

3.2 3.9 0.8

-0.3 2.4 8.8 6.0

-4.2' -2.1 1.0 -2.' o.~

-5.3 , -4.1

.a.6 -7.1 -7.5

'.11.6

-7.8 ·3.5 .a.8 -9.7

. ..a.8 -10.1

13.0 6.0

-12.0 7.0 4.8 2.3

-7.6 -0.9

Average

13.6 -2.5 -0.6 6.0 0.9

·2.1 ·2.5 -0.6 0.1

-4.8 1.2

4.2 8.0

10.5 8.4 7.9 9.9 7.7

15.2 6.6

29.6 10.3 4.3

0.7 -1.8 -1.9 -3.8 -2.8 -3.8 -5.9

-13.8 -5.9

-20.8 -4.3 1.2

1.4

10.1 7.1 1.5 4.8 1.5

17.2 -12.1 11.8 -1.6 10.7 ·5.7 9.1

Scripps purchased the Shop At Home Network on October 31,2002; for the first 12 months tho revenue % change figures are shown on a pro fonna basis. ,eglnning in December 2005. Joumal Communfcations ad revenue excludes the reslJ/ls of Emmis TV stations, purcflased on December 5. 2005. 3eglnning in July 2006, Media General ad revenue excludes tho results of four new NBC TV stations. purchased on June 26, 2006. Gannett, Journal Communications. Media General, and Tribune figures for December and full.year 2006 exclude extra week due to fiscal reporting.

Television revenue averages are not weighted. Source: Company reports

18


Scripps Net\.vorks

Advertising Affiliate Fee Revenue Revenue

39.2 44.3 23.4 33.4 32.3 27.5 31.8 24.9 30.9 30.0 32.6 30.1

30.3 27.0 36.1 40.5 39.9 24.0 33.5 29.6 34.6 21.0 20.2 34.8

30.6 29.9 30.4 24.8 23.1 38.5 25.3 32.4 24.2 32.3 22.9 25.2

12.3 23.2 16.1

27.2 25.5 14.6 29.7 21.9 -2.6 18.2 9.2

10.0 7.2

22.3 46.3

41.5 53.6 63.1 38.6 49.8 43.2 40.7 47.7 85.0 54.5 58.2 95.9

24.3 15.8 31.7 15.1 17.4 21.8 25.6 26.9

4.4 16.8 15.9

-17.0

21.7 21.5 3.5

16.4 25.2~

45.9 9.1

21.5 31.2 30.7 28.1 15.0

16.4 38.1 32.9 1B.1 56.2 15.1 16.6

TRB0414762

LEHMAN BROTHERS Tribune Products and Services

i'ublishing (74.1% of 2006 total revenue)

Newspapers (9) Los Angelos Timos Chicago Tribune

Nowsday The Baltimore Sun South Florida Sun~Sonlinel Orlando Sentinel

The Hartford Courant The Moming Call Daily Press Tho Advocate (being divested) Greenwich Time (boing divested)

Hoy. Chicago Hoy. los Angeles

Total

Tribune Media Services

9lY Los Angeles Chicago New York Baltimore Miami! Orlando Hartford Allentown Newport News Stamford Greenwich

Chicago los Angeles

lililli>. California Illinois New York Maryland Florida Florida Connecticut Pennsylvania Virginia Connecticut Connecticut

Illinois California

J..Qin.ru! Tnbune

2000 1847

2000 2000 1963 1965 2000 2000 1986 2000 2000

2003 2004

.!2i!i!Y ~

776,000 576,000 411,000 236,000 222,000 214,000 179,066 108,200

86,129 23.859 10,441

2,842,695

~ ~ 1,172,000

938,000 475,000 381,000 305,000 317,000 264,539 149,264 107,545

27,344 11,090

4,147,782

Creates, aggregates, and distributes news, information. and entertainment content that reaches millions of users through print, online and on· screen media.

Broadcasting (21.4% of 2006 total revenue)

1V Stations (23) WPIX KTLA WGN WPHL KDAF WDCW KHCW KCPO KMYO WSFl KWGN KTXL KPlR KRCW 'VTIV VXIN

KSWB WTIC WTXX WXMI WPMT WGNO WNOL

Affiliation

CW

FOX ABC

MyNetworkTV

# of stations

14

6

9!Y New York los Angeles Chicago Philadelphia Dallas Washington Houston Seattle Seat\!e Miami Denver Sacramento SI. Louis Portland Indianapolis Indianapolis San Diego Hartford Hartford Grand Rapids Harrisburg New Orleans New Orleans

§.!a!.g

New York California Illinois Pennsylvania Texas D.C. Texas Washington Washington Florida Colorado California Missouri Oregon Indiana Indiana California Connecticut Connecticut Michigan Pennsylvania Louisiana Louisiana

Network Affiliation

CW CW CW

MyNetworkTV CW CW CW

FOX MyNetworkTV

CW CW

FOX CW CW CW

FOX CW

FOX CW

FOX FOX ABC CW

Nielsen did not release 2006 ratings data for WGNO-TV and WNOl·TV as a result of Hurncano Katrina.

CLTV A regional 24-hour cable nows channel serving Chicago area, currently available to more than 1,6 ffiillJon cable households.

EntertainmenURadio (4.5% of 2006 total revenue)

Chicago Cubs

Tribune Entertainment - a company that distributes its own programming together with programming licensed from third parties

Radio Stations WGN·AM

Equity Investments

Investment CareerBuilder

91Y Chicago

State Illinois

Joined Tnbune

1924

Rank ofMkl.

3

% Owned Description

Aud. Share

5.5

40.8% Online sarvice providing recruitment resources

Joined

~ 1948 1985 1948 1992 1997 1999 1996 1999 1998 1997 1966 1997 2003 2003 2002 1997 1996 1997 2001 1998 1997 1983 2000

CalifornIa Independent Postal Systems ClassIfied Ventures

50.0% Providos allemative dIstributIOn services for advertising preprints 28.0% Network of automotive and roal estate classified advertising websiles

FCC license Expiration

2007 2006 2005 2007 2006 2004 2006 2007 2007 2013 2006 2006 2014 2007 2013 2005 2006 2007 2007 2005 2007 2005 2013

Comcasl Sports Network 25.0% 24-hour cable/satellite televiSion network focusing on Chicago sports tcams Consumer Networks ShopLocal.com Legacy.com TMCT I and TMCT II Portfolios Topix.net The Food Network Time Warner

17.0% Marketing and promotions company 42.5% Provides web-based marketing solutions for retailers 40.0% Website that provides online access to obituaries 5.0% Investment portfolios in connection with the Times Mirror acquisition. 33.7% Online news and infonnation aggregation website that monitors over 10,000 online sources 31.0% Remaining portion owned by Scripps

16 million shares related to PHONES debt

Nole: SlDmford and Greenwich, CT, newspapers am up for sale; Hoy New York has been sold. Source: Company Data (2006 10-K) and Audit Bureau of Circulation FasFax

19


Rank

2!.I&L 1

10

14 14

16 18

20 21 23 25 25 27 28 28 39 41 54 54


Aud.

~ 4.4 3.6 5.9 3.7 4.3 3.2 4.5 5.7 2.0 3.9 3.2 5.2 5.5 3.3 2.7 5.8 2.6 5.4 2.1 6.4 5.5

TRB0414763

6



TRIBUNE COMPANY AUDIT COMMITTEE MEETING

WEDNESDAY, OCTOBER 17, 2007 (7:30 A.M.) McCORMICK ROOM

24th FLOOR, TRIBUNE TOWER

AGENDA

Approve Minutes of May 9 and July 18,2007 Audit Committee Meetings

Audit Committee Responsibility Summary·

Third Quarter Operating Results and Earnings Release (to be distributed at the meeting)

Tab No.

1

2

Update on Significant Accounting and Financial Reporting Issues 3 • Impairment of Intangible Assets • Copyright Royalties • Matthew BenderlMosby Tax Issue • PHONES Tax Issue

2007 Internal Controls Certification Update 4

Internal Audit Status Report 5

Executive Expense Report Review 6

Review of Other Areas Requiring Audit Committee Oversight 7 • Procedures for Handling Accounting & Auditing Complaints/Concerns • Policies on Hiring Current and Former PwC Employees

Private Sessions

Audit Committee Betsy D. Holden William A. Osborn, Chair Dudley S. Taft

PARTICIPANTS

PricewaterhouseCoopers LLP Bill England Partner Jay Henderson Chicago Office Managing Partner Kevin Maguire Engagement Partner

Management Tom Caputo Dennis FitzSimons Don Grenesko Mark Mallory

Professionals' Eyes Only

Vice President, Auditing Chairman, President and Chief Executive Officer Sr. Vice President, Finance & Administration Vice President and Controller

Highly Confidential -- Attorneys' Eyes Only TRB0414766

1



MAY 9, 2007

The Audit Committee met on Wednesday, May 9, 2007 at 7:30 a.m. The meeting was held at Tribune Tower, Chicago, Illinois, pursuant to notice. The meeting was attended by Betsy Holden, William Osborn, J. Christopher Reyes and Dudley Taft of the Audit Committee; Kevin Maguire and Stephanie Potter of PricewaterhouseCoopers (PwC); and Thomas Caputo, Dennis FitzSimons, Don Grenesko and Mark Mallory of Tribune Company.

Mr. Osborn acted as Chairman of the meeting and Mr. Caputo as Secretary.

The following business was discussed at the meeting:

1. The Committee approved the minutes of the February 13 and April 18, 2007 Audit Committee meetings.

2. Mr. Mallory reported to the Committee that a change to the Company's first quarter earnings will be reflected in the Form 10-Q that will be filed by May 11 th. He explained that $7.7 million of Morgan Stanley fees needed to be recorded in the first quarter instead of when the merger closes. The fees were for the financial opinion that Morgan Stanley provided to the special committee of the Board on April 1. He noted that although the fees reduced income by three cents per share, there was no effect on operating earnings since the Company classifies all of the strategic review costs as non-operating expenses in its income statement. Mr. Mallory then reviewed with the Committee the revised income statement and the footnote disclosure for this non-operating expense.

Messrs. Mallory and Maguire answered questions from members of the Committee during the presentation.

3. Mr. Caputo gave an Internal Audit status report. He reviewed with the Committee a summary of results from the audits performed since February. He indicated that no significant financial adjustments, circulation adjustments or material weaknesses in internal controls were identified. Mr. Caputo also discussed Internal Audit's review of the new centralized circulation system implementation at the Daily Press. He indicated that issues were identified with the implementation process and the system itself that resulted in some billing, reporting and reconciliation problems. Mr. Caputo stated that implementations at other locations have been halted until the project team and the vendor resolve these issues.

Mr. Caputo then reviewed open senior level financial positions within the Company. He also provided an update on the status of a letter received from a small law firm which included vague allegations regarding circulation practices at the Los Angeles Times. Mr. Caputo indicated that the matter was considered closed because the law firm did not respond to any of the requests for additional information, and recent audits by the Audit Bureau of Circulations and Internal Audit did not result in any adjustments.


Messrs., Caputo, Grenesko and Mallory answered questions from the members of the Committee during the presentation.

4. Mr. Mallory reviewed with the Committee the internal controls certification plan for 2007. He discussed the results of management's controls streamlining project, new proposed guidance from the SEC and PCAOB that will allow both management and PwC to take a more efficient approach to assessing and auditing internal controls over financial reporting, and the impact of the Company's outsourcing initiatives on the certification process. Mr. Mallory then stated that management's main objective is to repeat last year's success and have no material weaknesses or significant deficiencies. He also indicated that management wants to continue efforts to streamline the process and further reduce the number of hours spent by the business units, the group and corporate offices, Internal Audit, and PwC.

Mr. Mallory further noted that management's plan is to document, assess and test key controls over accounts at business units that collectively comprise about 60-70% of the Company's consolidated financial statement balances and disclosures. He stated that PwC will evaluate and test internal controls at a subset of these locations. He also noted that Internal Audit continues to closely coordinate its work with PwC and that management will continue to provide regular updates to the Committee throughout the year.

Messrs. Caputo, Maguire and Mallory answered questions from members of the Committee during the presentation.

5. Ms. Potter and Messrs. Caputo and Maguire then presented the 2007 audit plan for PwC and Tribune's Internal Audit staff. Mr. Caputo outlined the audit mission and objectives. Tribune Internal Audit will be primarily responsible for evaluating financial statements and assessing the design and effectiveness of manual and information system controls over financial reporting, performing circulation audits and performing other risk-based audits at selected locations. PwC will be primarily responsible for the integrated financial and internal controls audit of the Company and the review of the quarterly financial statements. Mr. Caputo also reported on the budget, qualifications and size of Tribune's Internal Audit staff.

Ms. Potter indicated that PwC's engagement team will be relatively unchanged from the prior year. She also discussed the overall audit approach and the results of the risk assessments that were performed. Mr. Maguire then discussed how the PCAOB's proposed new auditing standard (AS 5) allows external auditors to exercise greater professional judgment when determining the nature, timing and extent of testing and to rely much more upon the work of Internal Audit. He indicated that PwC's integrated audit approach was developed contemplating that the new standard would be issued within the next two months in essentially its current form.

Mr. Maguire noted that the 2007 plan calls for PwC to perform integrated audits at 13 locations, including the Company's significant business units, the two group offices, and the corporate office. He stated that even though the number of locations is the same as last year, the extent of work has been reduced and reliance on Internal Audit's work at those locations has greatly increased. Mr. Caputo noted that Internal Audit will perform integrated audits at

2


28 locations, including the 13 locations that PwC will be visiting. He then indicated that as a result of the risk assessment process, Internal Audit will also perform 29 analytical reviews, 10 circulation audits and 23 other audits, which include business continuity plan reviews, system implementation reviews and other information system audits.

Mr. Maguire then discussed PwC's anticipated fees for 2007 and changes from 2006. He indicated that estimated fees for 2007 total $3.8 million, compared to $4.1 million in 2006. He also noted that the 2007 fees consist of $2.1 million for audit services and $1.7 million for all other services including special audits and accounting work related to the leveraged ESOP transactions, separate audit opinions for certain subsidiaries whose stock will be pledged as collateral under the new financing agreements, and employee benefit plan audits and filings.

During the presentation, Ms. Potter and Messrs. Caputo, Grenesko, Maguire and Mallory answered questions from members of the Committee regarding the audit plan and related fees.

The Committee reviewed and pre-approved all of PwC's planned services and related estimated fees for 2007, and concluded that the services would not impair PwC's independence from the Company. The Committee indicated that any additional services would require specific pre-approval by the Committee. The Committee then approved PwC's final 2006 fees.

6. At this point, all Company employees left the meeting, and the Committee met privately with the PwC representatives. Ms. Potter and Mr. Maguire then left the meeting, and the Committee met privately with Mr. Caputo.

There being no further business, the meeting was adjourned at 8:30 a.m.

Thomas Caputo

3



JULY 18,2007

The Audit Committee met on Wednesday, July 18, 2007, at 11 :30 a.m. The meeting was held at Tribune Tower, Chicago, Illinois, pursuant to notice. The meeting participants included Betsy Holden, William Osborn, and Dudley Taft of the Audit Committee; Kevin Maguire and Dan Drobac of Price waterhouse Coopers; and Dennis FitzSimons, Donald Grenesko, Brian Litman and Mark Mallory of Tribune Company.

Mr. Osborn acted as Chairman of the meeting and Mr. Litman as Secretary.

The following business was discussed at the meeting:

1. Mr. Grenesko reviewed the Company's second quarter 2007 operating results.

2. Mr. Mallory then reviewed a draft of the Company's second quarter earnings press release.

3. Mr. Maguire and Mr. Drobac then discussed PricewaterhouseCoopers' report on their review of the Company's second quarter results. They noted that there were no disagreements with management and no proposed adjustments.

4. Mr. Mallory then commented on the second quarter 2007 10-Q. He noted that no significant changes in format or presentation were anticipated and that a draft of the 10-Q would be mailed to the Audit Committee on July 26th for their review prior to the Company filing the 10-Q with the SEC. Mr. Mallory indicated that any significant changes to items previously reported or new required disclosures would be highlighted in the draft. He also requested that the Audit Committee members call with any comments or questions by Wednesday, August 1st and indicated that a conference call could be arranged if the Committee determined further discussion was warranted.

There being no further business to come before the Committee, the meeting was adjourned.

Brian Litman


TRB0414771

2


TRIBUNE COMPANY AUDIT COMMITTEE RESPONSIBILITY SUMMARY

Management has prepared the attached summary of Audit Committee responsibilities to aid in planning Audit Committee meetings and to ensure that all responsibilities specified in the Audit Committee charter are fulfilled each year. The summary specifies the expected timetable for discussing each area of responsibility. We have made no changes to the summary since the last Audit Committee meeting. All topics slated for discussion at this Audit Committee meeting are covered in the remaining sections of the meeting materials.

RMM 10/5/07


TRB0414773


AND TIMETABLE

Responsibility

General: 1. Meet periodically and privately with

the independent accountants and internal auditors.

2. Meet periodically and privately with management.

3. Appoint (after reviewing estimated fees for services to be performed) or replace the independent accountants.

4. Resolve any disagreements between management and the independent accountants regarding financial reporting.

5. Pre-approve all services performed by the independent accountants (including the fees and terms).

6. Make regular reports to the Board of Directors.

7. Reassess the adequacy of the Audit Committee Charter annually ..

8. Self-assess Audit Committee performance (performed each July in conjunction with the overall Board self assessment):.

9. Approve the Audit Committee report required by the SEC to be included in Tribune's annualproxt statement. ....

Timetable Charter ______ ........ M_e_et_i_n£.gs _______ Quarterly

Reference Feb. May Oct. Dec. Calls

* x x x x

* x

* x

*

* x

* x x

* x

*

* x

Financial Statement and Disclosure Matters: 10. Meet to review the annual financial

statements and disclosures with management and the independent accountants.

, 11. Make a recommendation to the Board regarding inclusion of the financial statements in the Company's 10-K.

12. Review the annual Section 404 internal control reports with management and the independent accountants .

.

2 x

As Needed

x

x

x

x

* These items are included in the "Meetings" and "Committee Authority and Responsibilities" sections of the Audit Committee Charter.

October 2007




AND TIMETABLE

Timetable Charter Meetings Quarterly As

------------------~-------------Responsibility Reference Feb. May Oct. Dec. Calls Needed

Oversight ()f !~eComJlany's Relationship with the Illdependent Accountants: 24. Evaluate the independent accountants'

lea~jJartner.

25. Review the independent accountants' quality control procedures and any

material issues raised by recent internal or external reviews.

26. Evaluate the qualifications, performance, and independence of the independent accountants and present

conclusions to the Board.

27. Ensure rotation of the independent accountants' partners as required by

law.

28. Set and review policies for hiring current and former employees of the

indeIJende l1t accountants.

29. Discuss the planning and staffing of

the independel1t audit.

12

13

14

15

Oversight of th(! Company's Internal Audit Function: . 30. Review the appointment and

replacement of the senior internal 16 auditing executive.

31. Review significant issues and

management's responses raised in internal audit reIJ<:)rts.

32. Discuss the internal audit department's

responsibilities and planned scope of activities, budget, and staffing with the

independent accountants and management.

COIllJlliance Oversight ResJlonsibilities: 33. Obtain assurance from the independent

accountants that they did not become aware of any illegal acts during their

audit.

34. Review reports from management, internal audit and the chief compliance

officer regarding the Company's compliance and ethics program and its Code of Business Conduct.


17

18

19

20

x

x

x

x

x

x x

x

3

x

x

x x x

x

TRB0414776


AND TIMET ABLE

Timetable Charter Meetings Quarterly As

--------------~~~-------------Responsibility Reference Feb. May Oct. Dec. Calls Needed

35. Advise the Board regarding the effectiveness of the Company's compliance and ethics prof?;ram.

36. Review the procedures for handling complaints and employee concerns regarding accounting and auditing matters.

37. Review any significant complaints and employee concerns regarding

. accountinJ~and audi!i!lf?;I11.~tters.

38. Discuss the results of the annual review of executive expense reports performed by the independent accountants and the internal auditors.

39. Discuss the Company's business continuity plans and the related reviews performed by the internal auditors.

40. Discuss with management and the independent accountants correspondence with regulators or governmental agencies regarding material accounting and financial reportill~ issues ..

41. Discuss legal matters that may materially affect the Company's financial statements or compliance policies with the Company's General Counsel.


20 x

21 x

21 x

N/A x

N/A x

22 x

23 x

4

TRB0414777

3


TRIBUNE COMPANY UPDATE ON SIGNIFICANT ACCOUNTING AND FINANCIAL REPORTING ISSUES

This report provides brief updates on some of the Company's more significant accounting issues. All of these issues have been previously discussed with the Audit Committee.

IMPAIRMENT OF INTANGIBLE ASSETS

Accounting rules require companies to perform impairment reviews of goodwill and other intangible assets that are not being amortized, which include mastheads and FCC licenses. The reviews must be performed annually, or more frequently if significant changes in circumstances indicate that an asset might be impaired. Our policy is to perform the annual review in the fourth quarter of each year. The impairment reviews compare estimated fair values to book values. The valuation of intangible assets requires assumptions and estimates of many critical factors, including revenue and market growth, operating cash flow, market multiples, and discount rates.

Goodwill impairment testing is performed by first aggregating similar business units into "reporting units", as defined by the rules. For example, all of our daily newspapers comprise one reporting unit, and all of our television stations are another reporting unit. The fair value of each reporting unit is then estimated and compared to its book value. In contrast, each masthead and FCC license must be tested separately to determine if its fair value exceeds book value. No aggregating is permitted by the rules.

Last year's review determined that no impairment write downs were required as estimated fair value exceeded book value for each of the intangible assets reviewed. The only asset that was close was goodwill at our newspaper reporting unit. We estimated a fair value of$7.3 billion for the newspaper reporting unit, compared to a book value of $7.1 billion.

In view of the operating cash flow declines being experienced by the newspaper reporting unit this year, we have assessed the likelihood that the fair value of this reporting unit has fallen below its book value. This year, we have improved valuation data as a result of the work performed in the first quarter by Valuation Research Corporation (VRC) in connection with our going-private transactions. In particular, their work has provided us with greater insight into the fair values of our interactive equity investments. In addition, the book value of our newspaper reporting unit is lower this year primarily due to reduced capital spending and the Matthew Bender tax settlement, which reduced our newspaper goodwill by $224 million. As a result, we believe that as of the third quarter we are certainly in no worse of a position than we were last year, and that the newspaper reporting unit's fair value exceeds book value. However, as part of our fourth quarter review, we will need to consider the new valuations now being formulated by VRC and our latest financial projections. We will provide a further update to the Audit Committee at the December meeting.


COPYRIGHT ROYALTIES

In the third quarter of this year, the Company recorded an additional $18 million of copyright royalties related to prior years. The Company earned the royalties on WON copyrighted programming distributed on national cable and satellite systems. The Company's accounting policy is to accrue the royalties as they are earned, based on estimates of the Company's ultimate share of each year's total copyright royalty pool.

The Copyright Royalty Board (CRB), a branch of the Library of Congress, is responsible for collecting royalty fees from cable and satellite operators and allocating them to the various program provider groups, including television and radio broadcasters, sports leagues, and motion picture producers. The program providers routinely challenge the CRB' s allocations, and the CRB does not distribute most of the royalties until the challenges are fully resolved. As a result, there has historically been a significant time lag between when the CRB collects the royalties and when they distribute them. Because the CRB' s process and the related delays have made it very difficult to accurately estimate the overall size and the Company's share of each year's royalty pool allocable to broadcasters, the Company has been accruing conservative estimates each year.

The WON royalty receivable balance totaled $32.6 million at December 31, 2006 and included amounts for 1998 through 2006. After collecting partial payments totaling only $2.5 million during the last three years, the Company has been receiving substantially higher amounts in 2007. The Company received $3 million in January for 2003, $5 million in June for 2002 and expects to receive $20 million in October for the years 1998 through 2001. All of these payments exceed the amounts previously accrued. As a result, the Company reassessed the amounts recorded for all of the years from 1998 through 2007 and increased its royalty revenues and receivable by $18 million in the third quarter of 2007. Management will continue to monitor collection activity for the open years and assess the recoverability of the remaining receivable.

MATTHEW BENDERIMOSBY TAX ISSUE

On October 1, we announced that we had finalized the settlement of our appeal of the September 2005 Tax Court decision that disallowed the tax-free reorganizations of Matthew Bender and Mosby, former subsidiaries of Times Mirror. The Company received a $344 million refund of federal income taxes and interest, representing approximately 35% of the amounts previously paid. After consideration of income taxes on the interest received, the net cash proceeds were approximately $286 million.

Because the federal refund was not received until October 1, it is recorded as a receivable in our September 30 balance sheet. We also recorded a state income tax receivable of$19 million and reversed $9 million of state income taxes payable. The after-tax refunds and state income tax adjustments totaled $314 million. These were accounted for as a $90 million reduction in third quarter income tax expense and a $224 million reduction in the Times Mirror goodwill recorded on our balance sheet. We reduced income tax expense for the portion of the interest which applied to the post-acquisition period, and we reduced goodwill for the remainder. This accounting treatment is consistent with the manner in which we accounted for the taxes and interest when they were previously paid.

2


PHONES TAX ISSUE

In connection with the examination of the Company's federal income tax returns for 2000 through 2003, the IRS proposed that the Company capitalize the interest on its PHONES debt securities as additional tax basis in the Company's 16 million shares of Time Warner common stock, rather than allowing the Company to currently deduct such interest. The Company disagrees with the IRS's position and requested that the IRS administrative appeals office review the issue. During the fourth quarter of 2006, the Company reached an agreement with the IRS appeals office that would permit the Company to deduct 72.5% of the PHONES interest expense. The agreement would apply for the tax years 2000 through 2029. In December of 2006, under the terms of the agreement reached with the IRS appeals office, the Company paid approximately $81 million of tax plus interest for tax years 2000 through 2005.

The agreement reached with the appeals office is being reviewed by the Joint Committee on Taxation. The Joint Committee has not yet reached a decision, but its staffis discussing the settlement percentage with the IRS appeals office. Each 1 % change in the settlement percentage would increase our taxes and interest by about $5 million.

RMM 1019107


3

TRB0414781

4


TRIBUNE COMPANY 2007 INTERNAL CONTROLS CERTIFICATION UPDATE

2007 APPROACH

The approach for 2007 is considerably different from prior years due to the Public Company Accounting Oversight Board's (PCAOB) new auditing standard (AS 5), as well as the SEC's new guidance for management regarding a company's assessment of internal controls over financial reporting. These items were finalized just after the Committee's May meeting. The SEC's guidance for management and AS 5 are closely aligned as they require the use of a riskbased, top-down approach that focuses testing only on those controls that are designed to prevent or detect a material misstatement on a timely basis. They also allow management and auditors the ability to exercise greater professional judgment when determining the nature, timing and extent of testing. Some of the changes include:

• Focusing testing on significant accounts and controls that address the areas of highest risk vs. obtaining a certain level of "coverage" of the company's operations.

• Significantly leveraging company-level controls, risk assessments and knowledge gained in prior audits when determining the nature, timing and extent of testing.

• Increasing the external auditor's ability to use the work of others and vary the nature, timing and extent of testing by location.

These changes, along with the controls streamlining project completed during 2006, have resulted in a significant reduction in controls that need to be documented and tested at the business unit, group and service center levels. They have also resulted in a decrease in overall time spent by the business units on the process and have eliminated a large portion of the duplicative audit work performed by Internal Audit and PwC.

The following locations and business cycles are included in this year's scope. The number of cycles tested at each location and the type of testing varies based upon assessed risk.

BUSINESS UNITS IN SCOPE BUSINESS CYCLES IN SCOPE

Corporate Company-level Controls Finance Service Center (FSC) Financial Reporting Tribune Publishing Company Consolidation Los Angeles Times Corporate Accounting Chicago Tribune Benefits Newsday Compensation Sun-Sentinel Tax Baltimore Sun Treasury Orlando Sentinel Advertising Revenue Hartford Courant Circulation Revenue Tribune Media Services Expenditures Star Community Publishing Payroll Recycler Fixed Assets Tribune Broadcasting Company Broadcast Rights WPIX-TV (New York) IT General Controls KTLA-TV (Los Angeles) WGN-TV (Chicago) / WGN-Cable Chicago Cubs


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Management has reduced self-testing requirements at these business units and has placed more reliance on the independent testing that is being performed by Internal Audit. The results from the reviews at the above locations are the primary basis for management's overall assessment of the Company's internal controls over financial reporting.

As in prior years, Internal Audit's visits are being made prior to PwC's to give the business units the opportunity to enhance controls documentation and begin to implement action plans recommended by Internal Audit. It has also allowed PwC to significantly reduce their work by placing more reliance on the work of Internal Audit.

CURRENT STATUS

Currently, Internal Audit has completed initial audits at 13 of22 locations. PwC has made 8 of their initial 16 visits, 4 of which still require IT audit work to be performed. PwC is expected to be completed by mid-December (See Exhibit I on page 3). The overall results to date have been excellent. The audits have yielded relatively few control deficiencies at all of the business units. For example, WPIX-TV (New York) has no open items and Newsday has only three open items after reviews by both Internal Audit and PwC. Overall, the key internal controls over financial reporting appear to be reasonably designed and functioning as intended, and the documentation prepared by these business units accurately reflects the manual and automated controls in place.

NEXT STEPS

Results To-Date:

• No significant deficiencies or material weaknesses

• Minimal number of deficiencies at all locations

• No pending issues to date • Planned process and auditing efficiencies

are being realized

Internal Audit and PwC will continue their respective reviews over the next several weeks. Follow-up audit work will also be performed in December and January to allow us to attest to the adequacy of controls as of year-end. We will provide another update to the Committee at the December meeting.

RMMlTGC 10110/07


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Exhibit I

TRIBUNE COMPANY

2007 SARBANES-OXLEY INTERNAL CONTROLS CERTIFICATION

KEY BUSINESS UNIT AUDITS AS OF 10/1012007

PRIMARY AUDIT WORK FOLLOW-UP AUDIT WORK (I)

Key Business Units

Publishing:

LA Times

Chicago Tribune

Newsday

South Florida Sun-Sentinel

Baltimore Sun

Orlando Sentinel

Tribune Media Services

Group Office

Customer Accounting

Tribune Interactive

Hartford Courant

Star Community Publishing

Recycler

Broadcasting & Entertainment:

New York TV

Los Angeles TV

Chicago TV

Chicago Cubs

Group Office

WGN-Cable

Corporate: Corporate Office

Finance Service Center

(Purchasing, Payables, Payroll)

PeopleSoft Support Group

IA (2)

Sept 10 - Oct 19

July 2 - Aug 10

Aug13 - Sept 7

Sept 10 - Oct 19

July 2 - Aug 10

Nov 26 - Dec 21

Dec 31 - Jan 25

May 2S - June22

AprJO -May 25

Nov 26 - Dec 21

Nov 26 - Dec 21

Dec31-Febl

JanS - Jan 26, .'07

Aug 13 -Sep7

July 9 - Aug 10

Aug 13 - Sep 7

Dec 31 - Jan 25

May 28 " June 22

Aug 13 - Sep7

Sept 10 - Oct 19

May 28 - June 29

Apr 2 -May 11

PwC -Finance PwC - IT IA

Dec 3 - Dec 14 Nov 5 -Nov 9 Dec - Feb 'OS

Aug_20 - Aug 31 Oct 8 - Oct 12 Dec - Feb '08 -

Sept J7 -Sept 2S Sept J7 -Sept 21 Dec - Feb 'OS

Nov 12 - Nov 16 Nov 12 - Nov 16 Dec - Feb '08

Sept 10 - Sept 14 Oct 15 - Oct 19 Dec - Feb 'OS

N/A N/A N/A N/A N/A N/A

Oct 22 - Oct 26 Oct 22 - Oct 26 Dec - Feb 'OS

Aug 13 - Aug 17 Oct 22 - Oct 26 Dec - Feb '08

N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Sept 24- Sept 2S Sept 17, IS Dec - Feb '08

Nov 5 - Nov 10 Nov 8, 9 Dec - Feb '08

Nov 5 -Nov 10 Oct 8 - Oct 12 Dec - Feb '08

TBD TBD Dec - Feb 'OS

July 30 - Aug 3 Nov 12 - Nov 16 Dec - Feb 'OS

Dec 3 - Dec 14 N/A Dec - Feb 'OS

October 15 - 29 Oct 22 - Oct 26 Dec - Feb '08

July 9 - July 20 N/A Dec - Feb '08

July 9- July 20 July 30 - Aug 3 Dec - Feb '08

(I) Updates of the reviews that were completed earlier in the year will be performed to allow us to attest to the adequacy of controls as of year-end. These follow-up reviews are generally performed from Chicago.

(2) Internal Audit dates include both Finance and IT work.

Note: Shading indicates audit has been completed.

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PwC

Jan - Feb 'OS

Jan - Feb '08

.Jan - Feb 'OS

Jan - Feb 'OS

Jan - Feb '08

NlA

N/A Jan - Feb '08

Jan - Feb 'OS

N/A N/A N/A N/A

Jan - Feb 'OS

Jan - Feb '08

Jan - Feb 'OS

N/A Jan - Feb '08

Jan - Feb 'OS

Dec - Feb '08

Jan - Feb 'OS

Jan - Feb 'OS

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TRIBUNE COMPANY INTERNAL AUDIT STATUS REPORT

Internal Audit regularly provides reports to the Audit Committee summarizing the results of recent audits. Significant issues that we report to the Committee typically include:

• Identified and/or unresolved significant deficiencies or material weaknesses in internal controls over financial reporting

• Significant weaknesses in other control areas that could jeopardize material systems, operations or processes

• Significant financial statement adjustments ($500,000 or greater)

• Any fraud committed by an employee with considerable responsibility for internal controls, or a sizeable fraud committed by any level of employee ($25,000 or greater)

• Material circulation adjustments (2% of total circulation or greater)

Since our last report in May, Internal Audit has primarily focused its efforts on performing integrated audits at in-scope locations for the internal controls certification process. We also reviewed IT controls over the server that houses the Company's email system, performed a review of revenue controls at CareerBuilder, participated in fraud investigations at the Los Angeles Times and performed a follow-up audit at the Daily Press to review progress on issues identified during a previous audit of their circulation system implementation.

The results from the audits performed since the last meeting are summarized below and in Exhibit Ion page 4. No significant financial adjustments or material weaknesses in internal controls were identified.

INTEGRATED AUDITS (audits of financial statements and internal controls over financial reporting)

The majority of integrated audits performed during the past six months focused on the business units and cycles that are needed to support management's internal controls certification for 2007. Reviews were conducted at Chicago Tribune, Newsday, Baltimore Sun, WGN-TV (Chicago), WPIX-TV (New York), KTLA-TV (Los Angeles), WGN-Cable, the group offices and the finance service center. Results from these audits were very favorable and are covered in the Internal Controls Certification Update under Tab 4. Audits at the Los Angeles Times, South Florida SunSentinel and the corporate office are currently in progress. No significant issues have been identified to date.

OTHER REVIEWS/uPDATES

Email System Server Review

Internal Audit performed a review of the server that houses the Company's email system, including general policies, user account management, access control, system logging, spam and virus management, and backup and recovery. No significant issues were noted.


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CareerBuilder

Internal Audit representatives from Tribune and Gannett jointly performed a limited review at CareerBuilder to obtain a general understanding of the revenue, receivables and financial close processes, identify key controls over financial reporting in these areas, and obtain an overview of their key information systems. No significant issues were identified; however, we did provide various recommendations to CareerBuilder management to enhance processes, controls and documentation in the areas reviewed. Also, Tribune Internal Audit will be returning to CareerBuilder to perform an audit of IT general controls shortly after year-end.

Centralized Discus System Implementation Follow-Up - Needs Improvement

In the first quarter, Internal Audit conducted a system implementation review of the Daily Press' new circulation system (Discus). Given the smaller relative size of the Daily Press, it was chosen as the first location to go-live on the new centralized version of Discus in order to minimize overall risk.

As reported at the Committee's May meeting, various manual workarounds had been created to compensate for missing system functionality. Internal Audit also noted that most of the reports identified by Daily Press as critical for Sarbanes-Oxley and ABC compliance, financial reporting, and circulation operations were not available after the go-live date. In addition, the general ledger interface for recording circulation revenue and expense was not working as intended (this is an overall system issue). While a certain amount of workarounds and "bugs" are part of any first installation of a new system, the level of such items noted during this review was much higher than expected. Additionally, the testing procedures utilized by the implementation team prior to the system going live were not robust enough to properly identify all significant system, data or functionality problems.

As a result of the system issues and the need for numerous workarounds, Daily Press has been experiencing financial reporting, billing, reconciliation, operational and user access administration issues. In light of this, the Publishing Group's central project team halted future implementations until the Discus system issues could be addressed.

Internal Audit recently completed a follow-up review of this system implementation. Regarding the overall system issues, the central project team and vendor continue to make progress. The general ledger interface has been fixed, and various other system fixes and new reports have been delivered and are being tested. Additionally, a new implementation schedule has been developed for the remaining newspapers and resource requirements are being adjusted appropriately. At the Daily Press, some progress has been made over the past few months. No material unreconciled differences exist in their account reconciliations, and no significant financial adjustments have been identified; however, several of the previously identified functionality and control issues still exist as do many of the time-consuming workarounds. As such, a "Needs Improvement" rating remains for this audit.

It is apparent that the complexity of the implementation and the resources required to handle the resultant issues are much higher than anticipated. The limited staffing of a small paper like the Daily Press is not able to meet the very sizeable demands of addressing system issues while still running their business and maintaining key controls. Unfortunately, the situation at the Daily Press was also further exacerbated by the departure of their CFO and VP of Operations shortly after the implementation.

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Internal Audit provided some resources to help resolve reconciliation and other key control issues. The Daily Press and the Publishing Group are currently determining what additional temporary and permanent resources are needed to address the current system issues and maintain the system going forward. Internal Audit and the Publishing Group will continue to monitor their progress. We will also follow-up on open issues during a financial audit which is scheduled for December.

OPEN SENIOR-LEVEL FINANCIAL POSITIONS

The open CFO position at the Daily Press was filled internally. Earlier this month, the Vice President/Finance at Tribune Interactive took a senior finance position with CareerBuilder. Management is currently considering some internal and external candidates.

ETHICS LINE CALLSIFRAUD INVESTIGATIONS

Los Angeles Times - Circulation

Three anonymous calls have been received on the ethics hotline basically alleging that the Los Angeles Times has been inflating their circulation numbers for the past two years by knowingly accepting and paying for bad orders from third party field sales contractors (foot crews). The calls also allege that some Los Angeles Times sales managers are accepting kickbacks of sales commissions from these contractors. Vince Casanova, Vice President/Circulation for Tribune Publishing, Julie Xanders, Senior Vice President/Legal and Gwen Murakami, Vice President/Human Resources at Los Angeles Times have been assisting Internal Audit with the investigation. The nature and content of the calls lead us to believe that they are all likely from the same person (possibly a disgruntled former contractor), but it is difficult to confirm our suspicion. The investigation is ongoing, but we have found no merit to the allegations to date. Los Angeles Times has solid order verification control procedures, and ABC and Internal Audit perform annual subscriber order tests. We will update the Committee on this issue at its December meeting.

Los Angeles Times - Interactive

An anonymous call was received by Human Resources at the Los Angeles Times alleging that Scott Dunagan, a sales director in their interactive area, was embezzling $5,000 a month. Los Angeles Times immediately launched an investigation and identified various suspicious expenditures (iPhones, softball equipment, non-de script advertising services, etc) paid for by Dunagan using the company's procurement credit card (Pcard) totaling $40,000. The employee was confronted and admitted to using the Pcard for personal use for about $4,000 and said he would pay the money back. He could not, however, provide support for the other $36,000 of suspicious charges. He was terminated and charges were filed with the Los Angeles Police Department.

The individual in the interactive area who approved these Pcard charges was not obtaining adequate support and was not following proper procedures. She was terminated for other performance related reasons shortly before this issue was brought to light. Proper review and approval procedures are now being followed in the interactive area and new monitoring procedures in the finance department have been implemented to prevent something like this from recurring.

TGC 10110/07


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2006 Revenues

$ 1,026 II

Location

LA Times Group: LA Times Times Community News

Chicago Tribune Group: 759 Chicago Tribune Company

Newsday Group: 416 Newsday, Inc.

19 amNew York (free daily commuter paper)

Fort Lauderdale Group: 346 Sun-Sentinel

Baltimore Group: 235 Baltimore Sun

Daily Press Group: 64 The Daily Press, Inc.

Publishing Group Office

179 New York

153 Los Angeles

Chicago Group: 162 WGN-TV 148 WGN-Cable, including distribution

40 Washington D.C.

21 San Diego

Broadcasting Group Office

Corporate Office

Finance Service Center Customer Accounting Peop\eSoft Support Group Accounts and

.. , iii I Satisfactory Audit Rating Needs Improvement Audit Rating Unsatisfactory Audit Rating


TRIBUNE COMPANY SUMMARY OF AUDITS

MAY - SEPTEMBER 2007

Integrated Audit

In Progress

In Progress

In Progress

In Progress

4

Circulation Audit

In Progress

Exhibit I

Other Audits

Circ. System Implementation Follow-up

••••• CareerBuilder Revenue Controls Review

••••• Email System Server Review

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TRIBUNE COMPANY REVIEW OF EXECUTIVE EXPENSE REPORTS AND JET LOGS

EXECUTIVE EXPENSE REPORT REVIEW

Tribune Internal Audit and PricewaterhouseCoopers (PwC) recently completed their annual review of executive expense reports. Internal Audit and management agreed upon the scope and procedures for the review to ensure all objectives are met. Internal Audit performed the actual testing, and PwC completed certain agreed upon procedures, which included reviewing the results ofInternal Audit's work, re-performing some of the testing and discussing findings with Internal Audit and management.

The executive population subject to this audit includes all members of Tribune's Management Forum. This encompasses 81 executives company-wide including all members of the Corporate Management Committee, corporate and group vice presidents, and the general manager or president of each business unit.

A sample of27 executives wasjudgmentally selected for testing based upon factors such as results from prior years and volume of expense report activity. Each executive is reviewed at least once every three years, and the CEO, Dennis FitzSimons, is reviewed each year. Ten expense reports for each executive were reviewed covering the period from July 1, 2006 to June 30,2007, including the two largest and all reports exceeding $5,000 in total expenses. The reports were tested for proper documentation, support, and approval and appropriateness of expenses in compliance with the Company's travel and entertainment (T &E) policy. PwC reperformed testing on a sample of 10 of the 270 expense reports audited by Internal Audit.

Results

Testing determined that reimbursements are made for ordinary, necessary and reasonable business expenses. Similar to years past, the overall rate of compliance with T &E policies and procedures was satisfactory, with only minor exceptions related to items such as coding errors (using the wrong expense classification). PwC's agreed-upon procedures confirmed these results.

REVIEW OF CORPORATE JET LOGS

Each year, Internal Audit reviews the travel logs for the Company's jet to determine proper usage and to verify that flights are properly identified for the purposes of imputing income, when applicable, to the appropriate employee. In September 2006, the jet was sold and a fractional interest in two jets was purchased which gives the Company up to 150 hours of flight time per year for any needed chartered flights. Despite this change, the tracking process has essentially remained the same. Travel logs are still maintained for these flights, and income continues to be imputed to the employee when applicable. Internal Audit reviewed all of the travel logs for the period of July 1,2006 through June 30, 2007. Consistent with prior years, plane usage was appropriate and adequately documented.

TGCIKTM 10/10/07


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TRIBUNE COMPANY OTHER AREAS REQUIRING AUDIT COMMITTEE OVERSIGHT

Each year, the Audit Committee is responsible for reviewing the Company's procedures for handling complaints and employee concerns regarding accounting and auditing matters and reviewing policies for hiring current and former employees of the Company's independent accountants.

PROCEDURES FOR HANDLING ACCOUNTING AND AUDITING COMPLAINTS AND CONCERNS

Securities and Exchange Commission (SEC) rules state that the Audit Committee must establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal controls or auditing matters. These procedures must also allow for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or aUditing matters. In response to these rules, the Company adheres to the following procedures that have been reviewed with and approved by the Audit Committee annually since May 2003:

• Management maintains a contract with an outside vendor (Global Compliance Services) that provides a toll-free number to receive these complaints. This toll-free number and related procedures are posted on Tribune's website as part of the Corporate Governance section. Information regarding this confidential ethics hotline is also available to employees through the Company's intranet site and is included in the Code of Business Conduct.

• All complaints are forwarded to an internal team consisting of representatives from the Internal Audit, Legal and Human Resource departments, who are responsible for review, investigation and follow-up.

• Any significant complaints relating to Tribune's accounting, internal controls or auditing matters are reported to the Company's Disclosure Committee and to the Audit Committee.

Management believes that these procedures continue to be reasonable and accordingly proposes no changes.

Since our report to the Committee in October 2006,22 calls were received on the hotline (5 of which were follow-up calls). Most concerned human resource issues. As discussed in the Internal Audit Status update under Tab 5, three anonymous calls were received (likely from the same person) alleging inappropriate circulation sales activity and kickbacks of sales commissions from third party contractors at the Los Angeles Times. The investigation is ongoing but we have found no merit to the allegations to date, and the Los Angeles Times has good controls in this area. No other complaints regarding accounting or internal controls were received through the ethics hotline or by any other means during the past year.


POLICIES ON HIRING CURRENT AND FORMER PWC EMPLOYEES

The SEC also requires Audit Committees to set hiring policies for employees or former employees of the Company's independent accountants. In early 2002, the Audit Committee and management established the following policies:

• PricewaterhouseCoopers (PwC) audit partners and senior managers who have served on the audit for Tribune Company will not be considered for employment anywhere within the Company until they have been off the engagement for five years.

• The corporate office will not hire any current or former PwC employee as an officer without Audit Committee approval. Management will review annually with the Audit Committee all other current or former PwC employees hired in the corporate office during the past year.

• Business units may not hire any current or former PwC employee as an officer without approval by the corporate CFO.

Management believes these policies are adequate and does not recommend any changes. Since these policies were issued, the Company has been in full compliance. During the past year, Internal Audit hired three PwC employees as Information Technology Auditors and two as Financial Auditors. None of these individuals had ever worked on the Tribune engagement. The Company did not hire any other PwC employees during the past 12 months.

TGC 10/10107


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