----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**FORM      10-Q**

**QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d)**

**OF      THE SECURITIES EXCHANGE ACT OF 1934**

**FOR      THE QUARTERLY PERIOD ENDED JULY 1, 2007**

**Commission      file number 1-8572**

**TRIBUNE      COMPANY**

| **Delaware**(State                or other jurisdiction of   incorporation                or organization)    | **36-1880355**(I.R.S.                Employer   Identification                No.) |
|------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|
|  **435                North Michigan Avenue, Chicago, Illinois**(Address                of principal executive offices) |  **60611**(Zip                code)                                                          |

----

----

**TRIBUNE      COMPANY**

**INDEX      TO 2007 SECOND QUARTER FORM 10-Q**

| **Item                No.** | **Page** |
|-----------------------------|----------|

| **PART                I.  FINANCIAL                INFORMATION** |
|----------------------------------------------------------------------------|

| 1.  Financial                  Statements                                                                                                                                   |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|
|  Condensed                  Consolidated Statements of Operations for the Second Quartersand                  First Halves Ended July 1,                  2007 and June 25, 2006 |  1 |
| Condensed                  Consolidated Balance                  Sheets at July 1, 2007 and Dec. 31, 2006                                                                             | 2       |
| Condensed                  Consolidated                  Statements of Cash Flows for the First Halves EndedJuly                  1, 2007 and June 25,                  2006          | 4       |
| Notes                  to Condensed Consolidated                  Financial Statements                                                                                                |    |
| Note                  1:                      Basis of Preparation                                                                                                | 5       |
| Note                  2:     Earnings Per Share                                                                                                         | 6       |
| Note                  3:     Leveraged ESOP                  Transactions                                                                               | 7       |
| Note                  4:     Discontinued                  Operations                                                                                   | 8       |
| Note                  5:     Income Taxes                                                                                                               | 10      |
| Note                  6:     *Newsday* and *Hoy*, New                  York Charge                                                                      | 12      |
| Note                  7:     Stock-Based                  Compensation                                                                                  | 13      |
| Note                  8:     Pension and Postretirement                  Benefits                                                                       | 15      |
| Note                  9:     Non-Operating                  Items                                                                                  | 15      |
| Note                  10:                    Inventories                                                                                                          | 16      |
| Note                  11:   Goodwill and Other Intangible                  Assets                                                                       | 17      |
| Note                  12:   Debt                                                                                                                             | 18      |
| Note                  13:   Comprehensive Income                                                                                                                  | 22      |
| Note                  14:   Other                  Matters                                                                                                   | 23      |
| Note                  15:   Segment Information                                                                                                         | 24      |
| 2.      Management’s                  Discussion and Analysis of Financial Condition and Results of                  Operations                   | 25      |
| 3.      Quantitative                  and Qualitative Disclosures About Market Risk                                                           | 42      |
| 4.      Controls                  and Procedures                                                                                              | 44      |
|                                                                                                                                                                                  |    |
| **PART                  II.  OTHER INFORMATION**                                                                                                                       |
| 1.      Legal                  Proceedings                                                                                                         | 45      |
| 1A.   Risk                  Factors                                                                                                                          | 46      |
| 2.      Unregistered                  Sales of Equity Securities and Use of Proceeds                                                               | 49      |
| 4.                       Submission of Matters to a Vote of Security                  Holders                                                      | 49      |
| 6.      Exhibits                                                                                                                                   | 50      |
|                                                                                                                                                                                  |    |

----

**PART      I.  FINANCIAL INFORMATION**

**ITEM      1.   FINANCIAL STATEMENTS.**

**TRIBUNE      COMPANY AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED STATEMENTS OF OPERATIONS**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **Second                Quarter Ended** |      |   | **First                Half Ended** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-----------|--------|-------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **July                1, 2007**         |      |   | **June                25, 2006**    |   |   | **July                1, 2007** |   |   | **June                25, 2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |      |   |                                |   |   |   |   |   |   |   |
| **Operating                Revenues                                                             **                                                            |   | $                                       | 1,313,366 |   |                                | $      | 1,408,789 |   |   | $ | 2,527,868 |   |   | $ | 2,678,210 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                Expenses**                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Cost                of sales (exclusive of items shown below)                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                    | 664,597   |   |                                |   | 697,988 |   |   |   | 1,281,629 |   |   |   | 1,329,357 |   |
| Selling,                general and                administrative                                                                                             |   |                                    | 394,709   |   |                                |   | 352,161 |   |   |   | 753,685 |   |   |   | 718,752 |   |
| Depreciation                                                                                                                                                  |   |                                    | 53,041    |   |                                |   | 49,896 |   |   |   | 105,066 |   |   |   | 99,766 |   |
| Amortization                of intangible                assets                                                                                               |   |                                    | 5,215     |   |                                |   | 4,751 |   |   |   | 10,222 |   |   |   | 9,441 |   |
| Total                operating                expenses                                                                                                        |   |                                    | 1,117,562 |   |                                |   | 1,104,796 |   |   |   | 2,150,602 |   |   |   | 2,157,316 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                Profit                                                             **                                                              |   |                                    | 195,804   |   |                                |   | 303,993 |   |   |   | 377,266 |   |   |   | 520,894 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Net                income on equity                investments                                                                                                |   |                                    | 28,710    |   |                                |   | 26,017 |   |   |   | 41,394 |   |   |   | 32,565 |   |
| Interest                and dividend                income                                                                                                    |   |                                    | 3,830     |   |                                |   | 2,472 |   |   |   | 6,984 |   |   |   | 4,652 |   |
| Interest                expense                                                                                                                               |   |                                    | (115,905  | )      |                                |   | (47,279 | ) |   |   | (199,154 | ) |   |   | (96,051 | ) |
| Loss                on change in fair values of derivatives andrelated                investments                                                                            |   |                                    | (27,395   | )      |                                |   | (6,121 | ) |   |   | (97,175 | ) |   |   | (16,438 | ) |
| Other                non-operating loss,                net                                                                                                   |   |                                    | (14,948   | )      |                                |   | (603 | ) |   |   | (28,883 | ) |   |   | (3,983 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| **Income                from Continuing Operations Before****Income                Taxes                                                          **                         |   |                                    | 70,096    |   |                                |   | 278,479 |   |   |   | 100,432 |   |   |   | 441,639 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Income                taxes                                                                                                                                   |   |                                    | (34,580   | )      |                                |   | (115,914 | ) |   |   | (53,837 | ) |   |   | (179,918 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| **Income                from Continuing Operations**                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    | 35,516    |   |                                |   | 162,565 |   |   |   | 46,595 |   |   |   | 261,721 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| **Income                (Loss) from Discontinued Operations,****net                of tax**(Note                4)                                                           |   |                                    | 760       |   |                                |   | (74,731 | ) |   |   | (33,614 | ) |   |   | (71,123 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| **Net                Income                                                             **                                                                    |   |                                    | 36,276    |   |                                |   | 87,834 |   |   |   | 12,981 |   |   |   | 190,598 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Preferred                dividends                                                                                                                            |   |                                    | –   |   |                                |   | (2,103 | ) |   |   | – |   |   |   | (4,206 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| **Net                Income Attributable to Common****Shares                                                          **                                                     |   | $                                       | 36,276    |   |                                | $      | 85,731 |   |   | $ | 12,981 |   |   | $ | 186,392 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| **Earnings                Per Share**(Note 2):                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Basic:                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
|  Continuing                operations                                                                                                                                   |   | $                                       | .17       |   |                                | $      | .53 |   |   | $ | .21 |   |   | $ | .85 |   |
|  Discontinued                operations                                                                                                                                 |   |                                    | –   |   |                                |   | (.25 | ) |   |   | (.15 | ) |   |   | (.23 | ) |
|      Net                income                                                                                                       |   | $                                       | .18       |   |                                | $      | .28 |   |   | $ | .06 |   |   | $ | .61 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Diluted:                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
|  Continuing                operations                                                                                                                                   |   | $                                       | .17       |   |                                | $      | .53 |   |   | $ | .21 |   |   | $ | .84 |   |
|  Discontinued                operations                                                                                                                                 |   |                                    | –   |   |                                |   | (.25 | ) |   |   | (.15 | ) |   |   | (.23 | ) |
|      Net                income                                                                                                       |   | $                                       | .18       |   |                                | $      | .28 |   |   | $ | .06 |   |   | $ | .61 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |      |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Dividends                per common                share                                                                                                      |   | $                                       | –   |   |                                | $      | .18 |   |   | $ | .18 |   |   | $ | .36 |   |

----

**TRIBUNE      COMPANY AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | **July                1, 2007** |       |   | **Dec.                31, 2006** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|--------|----------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                            |       |   |                             |   |
| **Assets**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                            |       |   |                             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                            |       |   |                             |   |
| **Current                Assets**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                            |       |   |                             |   |
| Cash                and cash                equivalents                                                                                                                     |   | $                               | 261,570    |   |                             | $      | 174,686 |   |
| Accounts                receivable,                net                                                                                                                      |   |                            | 694,700    |   |                             |   | 734,871 |   |
| Inventories                                                                                                                                                                 |   |                            | 51,543     |   |                             |   | 40,962 |   |
| Broadcast                rights                                                                                                                                             |   |                            | 201,443    |   |                             |   | 271,995 |   |
| Deferred                income                taxes                                                                                                                         |   |                            | –    |   |                             |   | 74,450 |   |
| Assets                held for                sale                                                                                                                          |   |                            | 3,946      |   |                             |   | – |   |
| Prepaid                expenses and                other                                                                                                                    |   |                            | 59,416     |   |                             |   | 49,466 |   |
| Total                current                assets                                                                                                                          |   |                            | 1,272,618  |   |                             |   | 1,346,430 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                            |       |   |                             |   |   |   |
| **Properties**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            |       |   |                             |   |   |   |
| Property,                plant and                equipment                                                                                                                 |   |                            | 3,561,287  |   |                             |   | 3,592,477 |   |
| Accumulated                depreciation                                                                                                                                     |   |                            | (1,963,902 | )      |                             |   | (1,907,365 | ) |
| Net                properties                                                                                                                                               |   |                            | 1,597,385  |   |                             |   | 1,685,112 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                            |       |   |                             |   |   |   |
| **Other                Assets**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                            |       |   |                             |   |   |   |
| Broadcast                rights                                                                                                                                             |   |                            | 220,230    |   |                             |   | 295,186 |   |
| Goodwill                                                                                                                                                                    |   |                            | 5,780,337  |   |                             |   | 5,837,208 |   |
| Other                intangible assets,                net                                                                                                                  |   |                            | 2,804,424  |   |                             |   | 2,846,057 |   |
| Time                Warner stock related to                PHONES                debt                                                                                       |   |                            | 336,640    |   |                             |   | 348,480 |   |
| Other                investments                                                                                                                                            |   |                            | 552,309    |   |                             |   | 564,750 |   |
| Prepaid                pension                costs                                                                                                                         |   |                            | 368,859    |   |                             |   | 293,455 |   |
| Assets                held for                sale                                                                                                                          |   |                            | 80,445     |   |                             |   | 9,172 |   |
| Other                                                                                                                                                                       |   |                            | 271,848    |   |                             |   | 174,922 |   |
| Total                other                assets                                                                                                                            |   |                            | 10,415,092 |   |                             |   | 10,369,230 |   |
| Total                assets                                                                                                                                                 |   | $                               | 13,285,095 |   |                             | $      | 13,400,772 |   |

----

**TRIBUNE      COMPANY AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | **July                1, 2007** |       |   | **Dec.                31, 2006** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|--------|----------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                            |       |   |                             |   |
| **Liabilities                and Shareholders’ Equity**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                            |       |   |                             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                            |       |   |                             |   |
| **Current                Liabilities**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                            |       |   |                             |   |
| Borrowings                under bridge credit                facility                                                                                                                                                           |   | $                               | –    |   |                             | $      | 1,310,000 |   |
|         PHONES                debt related to Time Warner stock (Note 12)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                            | 319,808    |   |                             |   | – |   |
| Other                debt due within one                year                                                                                                                                                                    |   |                            | 78,496     |   |                             |   | 119,007 |   |
| Contracts                payable for broadcast                rights                                                                                                                                                            |   |                            | 251,687    |   |                             |   | 317,945 |   |
| Deferred                income                                                                                                                                                                                                  |   |                            | 163,082    |   |                             |   | 108,607 |   |
|         Deferred                income                taxes                                                                                                    |   |                            | 133,161    |   |                             |   | – |   |
| Accounts                payable, accrued                expenses and other current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                            | 664,422    |   |                             |   | 691,155 |   |
| Total                current                liabilities                                                                                                                                                                         |   |                            | 1,610,656  |   |                             |   | 2,546,714 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                            |       |   |                             |   |   |   |
| **Long-Term                Debt**(Note 12)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                            |       |   |                             |   |   |   |
| PHONES                debt related to Time                Warner                stock                                                                                                                                           |   |                            | 343,152    |   |                             |   | 572,960 |   |
| Other                long-term debt (less                portions due within one year)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                            | 8,545,444  |   |                             |   | 3,003,251 |   |
| Total                long-term                debt                                                                                                                                                                              |   |                            | 8,888,596  |   |                             |   | 3,576,211 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                            |       |   |                             |   |   |   |
| **Other                Non-Current Liabilities**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                            |       |   |                             |   |   |   |
| Deferred                income                taxes                                                                                                                                                                             |   |                            | 1,701,258  |   |                             |   | 1,974,672 |   |
| Contracts                payable for broadcast                rights                                                                                                                                                            |   |                            | 341,171    |   |                             |   | 425,927 |   |
| Deferred                compensation and                benefits                                                                                                                                                                |   |                            | 336,673    |   |                             |   | 392,187 |   |
| Other                obligations                                                                                                                                                                                                |   |                            | 199,413    |   |                             |   | 165,445 |   |
| Total                other non-current                liabilities                                                                                                                                                               |   |                            | 2,578,515  |   |                             |   | 2,958,231 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                            |       |   |                             |   |   |   |
| **Shareholders’                Equity**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                            |       |   |                             |   |   |   |
| Common                stock and additional                paid-in capital (Note 3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            | 5,142,974  |   |                             |   | 6,837,029 |   |
| Retained                earnings (Note                3)                                                                                                                                                                        |   |                            | 559,156    |   |                             |   | 3,138,313 |   |
| Treasury                common stock (at                cost)                                                                                                                                                                   |   |                            | (4,917,510 | )      |                             |   | (5,288,341 | ) |
|         Unearned                ESOP shares (Note                3)                                                                                            |   |                            | (250,000   | )      |                             |   | – |   |
| Accumulated                other comprehensive                income                (loss)                                                                                                                                      |   |                            | (327,292   | )      |                             |   | (367,385 | ) |
| Total                shareholders’                equity                                                                                                                                                                  |   |                            | 207,328    |   |                             |   | 4,319,616 |   |
| Total                liabilities and                shareholders’                equity                                                                                                                                   |   | $                               | 13,285,095 |   |                             | $      | 13,400,772 |   |

----

**TRIBUNE      COMPANY AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | **First                Half Ended** |       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | **July                1, 2007**     |       |   | **June                25, 2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                |       |   |   |   |
| **Operations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                |       |   |   |   |
| Net                income                                                                                                                                                                                                                                                                                                                                                   |   | $                                   | 12,981     |   |   | $ | 190,598 |   |
| Adjustments                to reconcile net income to net cash provided by                operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                |       |   |   |   |   |   |
|        Stock-based                compensation                                                                                                                                                                                                                                                                                           |   |                                | 26,398     |   |   |   | 22,766 |   |
|        Loss                on change in fair values of derivatives and related                investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                | 97,175     |   |   |   | 16,438 |   |
|   Write-off              of              *Los Angeles Times* plant equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                | 23,982     |   |   |   | –  |   |
|        Depreciation                                                                                                                                                                                                                                                                                                                      |   |                                | 105,855    |   |   |   | 102,004 |   |
|        Amortization                of intangible                assets                                                                                                                                                                                                                                                                   |   |                                | 10,247     |   |   |   | 9,620 |   |
|        Loss                on sales of discontinued                operations                                                                                                                                                                                                                                                            |   |                                | 16,958     |   |   |   | 90,055 |   |
|        Net                income on equity                investments                                                                                                                                                                                                                                                                    |   |                                | (41,394    | ) |   |   | (32,565 | ) |
|        Distributions                from equity                investments                                                                                                                                                                                                                                                               |   |                                | 57,233     |   |   |   | 36,560 |   |
|        Deferred                income                taxes                                                                                                                                                                                                                                                                               |   |                                | (13,739    | ) |   |   | 38,991 |   |
|        Tax                benefit on stock awards                exercised                                                                                                                                                                                                                                                               |   |                                | 11,770     |   |   |   | 2,106 |   |
|                   Changes in working capital items, excluding effects from                acquisitions                 and dispositions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                |       |   |   |   |   |   |
|                          Accounts                receivable                                                                                                                                                                                                                                                                    |   |                                | 35,836     |   |   |   | (14,097 | ) |
|          Inventories,              prepaid expenses and other current assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                | (20,736    | )  |   |   | (1,172 | )  |
|           Deferred                income, accounts payable, accrued expenses and other                current                liabilities                                                                                             |   |                                | 21,477     |   |   |   | (4,735 | )  |
|            Income                taxes                                                                                                                                                                                                                                                                               |   |                                | (41,650    | ) |   |   | 8,154 |   |
|        Deferred                compensation                                                                                                                                                                                                                                                                                              |   |                                | (48,623    | ) |   |   | (10,654 | ) |
|        Other,                net                                                                                                                                                                                                                                                                                                         |   |                                | 23,594     |   |   |   | 18,466 |   |
| Net                cash provided by                operations                                                                                                                                                                                                                                                                                                               |   |                                | 277,364    |   |   |   | 472,535 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                |       |   |   |   |   |   |
| **Investments**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                |       |   |   |   |   |   |
| Capital                expenditures                                                                                                                                                                                                                                                                                                                                         |   |                                | (52,224    | ) |   |   | (61,870 | ) |
| Acquisitions                and                investments                                                                                                                                                                                                                                                                                                                  |   |                                | (7,575     | ) |   |   | (50,095 | ) |
| Proceeds                from sales of subsidiaries, intangibles, investments and real                estate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                | 18,796     |   |   |   | 6,963 |   |
| Net                cash used for                investments                                                                                                                                                                                                                                                                                                                 |   |                                | (41,003    | ) |   |   | (105,002 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                |       |   |   |   |   |   |
| **Financing**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                |       |   |   |   |   |   |
| Long-term                borrowings                                                                                                                                                                                                                                                                                                                                         |   |                                | 7,015,000  |   |   |   | – |   |
| Issuance                of exchangeable promissory                note                                                                                                                                                                                                                                                                                                      |   |                                | 200,000    |   |   |   | – |   |
| Borrowings                under revolving credit                agreements                                                                                                                                                                                                                                                                                                  |   |                                | –    |   |   |   | 200,000 |   |
| Borrowings                under former bridge credit                facility                                                                                                                                                                                                                                                                                                |   |                                | 100,000    |   |   |   | – |   |
| Repayments                of former bridge credit                facility                                                                                                                                                                                                                                                                                                   |   |                                | (1,410,000 | ) |   |   | – |   |
| Repayments                of long-term                debt                                                                                                                                                                                                                                                                                                                  |   |                                | (1,613,154 | ) |   |   | (55,453 | ) |
| Repayments                of commercial paper,                net                                                                                                                                                                                                                                                                                                           |   |                                | (97,019    | ) |   |   | (301,205 | ) |
| Long-term                debt issuance                costs                                                                                                                                                                                                                                                                                                                 |   |                                | (134,085   | ) |   |   | – |   |
| Sales                of common stock to employees,                net                                                                                                                                                                                                                                                                                                       |   |                                | 72,195     |   |   |   | 19,632 |   |
| Sale                of common stock to Zell Entity (Note                3)                                                                                                                                                                                                                                                                                                  |   |                                | 50,000     |   |   |   | – |   |
| Purchases                of Tribune common                stock                                                                                                                                                                                                                                                                                                             |   |                                | (4,289,192 | ) |   |   | (137,746 | ) |
| Dividends                                                                                                                                                                                                                                                                                                                                                                   |   |                                | (43,247    | ) |   |   | (113,114 | ) |
| Other                                                                                                                                                                                                                                                                                                                                                                       |   |                                | 25         |   |   |   | (16,974 | ) |
| Net                cash used for                financing                                                                                                                                                                                                                                                                                                                   |   |                                | (149,477   | ) |   |   | (404,860 | ) |
| **Net                increase (decrease) in cash and cash                equivalents                                                                                            **                                                                                                                                                                                          |   |                                | 86,884     |   |   |   | (37,327 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                |       |   |   |   |   |   |
| Cash                and cash equivalents, beginning of                year                                                                                                                                                                                                                                                                                                  |   |                                | 174,686    |   |   |   | 151,110 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                |       |   |   |   |   |   |
| Cash                and cash equivalents, end of                quarter                                                                                                                                                                                                                                                                                                     |   | $                                   | 261,570    |   |   | $ | 113,783 |   |

----

**TRIBUNE      COMPANY AND SUBSIDIARIES**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE      1:   BASIS OF PREPARATION**

*Hoy*
*Hoy*
*Hoy*
*The Advocate*
*Greenwich Time*

----

**NOTE      2:   EARNINGS PER SHARE**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | **Second                Quarter** |    |   | **First                Half Ended** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|--------|-------------------------------------|--------|
| (in                thousands, except per share data)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | **2007**                          |    |   | **2006**                            |   |   | **2007** |   |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |    |   |                                |   |   |   |   |   |   |   |
| **Basic                earnings per share:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                              |    |   |                                |   |   |   |   |   |   |   |
| Income                from continuing                operations                                                                                             |   | $                                 | 35,516  |   |                                | $      | 162,565 |   |   | $ | 46,595 |   |   | $ | 261,721 |   |
| Income                (loss) from discontinued operations, net of tax                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                              | 760     |   |                                |   | (74,731 | ) |   |   | (33,614 | ) |   |   | (71,123 | ) |
| Net                income                                                                                                                                   |   |                              | 36,276  |   |                                |   | 87,834 |   |   |   | 12,981 |   |   |   | 190,598 |   |
| Preferred                dividends                                                                                                                          |   |                              | – |   |                                |   | (2,103 | ) |   |   | – |   |   |   | (4,206 | ) |
| Net                income attributable to common                shares                                                                                      |   | $                                 | 36,276  |   |                                | $      | 85,731 |   |   | $ | 12,981 |   |   | $ | 186,392 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares outstanding                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                              | 204,425 |   |                                |   | 302,683 |   |   |   | 222,192 |   |   |   | 303,451 |   |
| Basic                earnings per share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                              |    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                operations                                                                                                                                       |   | $                                 | .17     |   |                                | $      | .53 |   |   | $ | .21 |   |   | $ | .85 |   |
| Discontinued                operations                                                                                                                                     |   |                              | – |   |                                |   | (.25 | ) |   |   | (.15 | ) |   |   | (.23 | ) |
|                        Net                income                                                                         |   | $                                 | .18     |   |                                | $      | .28 |   |   | $ | .06 |   |   | $ | .61 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| **Diluted                earnings per share:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                              |    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing                operations                                                                                             |   | $                                 | 35,516  |   |                                | $      | 162,565 |   |   | $ | 46,595 |   |   | $ | 261,721 |   |
| Income                (loss) from discontinued operations, net of tax                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                              | 760     |   |                                |   | (74,731 | ) |   |   | (33,614 | ) |   |   | (71,123 | ) |
| Net                income                                                                                                                                   |   |                              | 36,276  |   |                                |   | 87,834 |   |   |   | 12,981 |   |   |   | 190,598 |   |
| Preferred                dividends                                                                                                                          |   |                              | – |   |                                |   | (2,103 | ) |   |   | – |   |   |   | (4,206 | ) |
| Net                income attributable to common                shares                                                                                      |   | $                                 | 36,276  |   |                                | $      | 85,731 |   |   | $ | 12,981 |   |   | $ | 186,392 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares outstanding                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                              | 204,425 |   |                                |   | 302,683 |   |   |   | 222,192 |   |   |   | 303,451 |   |
| Adjustment                for stock-based awards,                net                                                                                        |   |                              | 2,292   |   |                                |   | 1,809 |   |   |   | 1,925 |   |   |   | 1,596 |   |
| Adjusted                weighted average common sharesoutstanding                                                                                                          |   |                              | 206,717 |   |                                |   | 304,492 |   |   |   | 224,117 |   |   |   | 305,047 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                earnings per share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                              |    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                operations                                                                                                                                       |   | $                                 | .17     |   |                                | $      | .53 |   |   | $ | .21 |   |   | $ | .84 |   |
| Discontinued                operations                                                                                                                                     |   |                              | – |   |                                |   | (.25 | ) |   |   | (.15 | ) |   |   | (.23 | ) |
|                        Net income                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | $                                 | .18     |   |                                | $      | .28 |   |   | $ | .06 |   |   | $ | .61 |   |

----

**NOTE      3:   LEVERAGED ESOP TRANSACTIONS**

| ·   | On                April 1, 2007, the ESOP purchased 8,928,571 shares of the Company’s common                stock from the Company at a price of $28.00 per share.  The ESOP                paid for this purchase with a promissory note of the ESOP in favor                of the                Company in the principal amount of $250 million, to be repaid by                the ESOP                over the 30-year life of the loan through its use of annual contributions                from the Company to the ESOP and/or distributions paid on the shares                of                the Company’s common stock held by the ESOP.  None of the shares                held by the ESOP have been committed for release or allocated to                employees.  Accordingly, the $250 million of unearned ESOP                shares have been classified as a reduction of shareholders’ equity in the                Company’s July 1, 2007 unaudited condensed consolidated balance                sheet. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                April 23, 2007, pursuant to a purchase agreement dated April 1, 2007                (the                “Zell Entity Purchase Agreement”), the Zell Entity made an initial                investment of $250 million in the Company in exchange for (1) 1,470,588                shares of the Company’s common stock at $34.00 per share and (2) an                unsecured subordinated exchangeable promissory note of the Company                in the                principal amount of $200 million, which the Company must repay immediately                prior to the Merger (as defined below).  The promissory note is                exchangeable at the Company’s option, or automatically under certain                circumstances, into an aggregate of 5,882,353 shares of the Company’s                common stock, subject to antidilution adjustments.  The shares                of the Company’s common stock, the exchangeable promissory note and any                underlying shares acquired upon exchange that are held by the Zell                Entity                are subject to certain transfer restrictions until April 23,                2010. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                April 25, 2007, the Company commenced a tender offer to repurchase                up to                126 million shares of the Company’s common stock that were then                outstanding at a price of $34.00 per share (the “Share                Repurchase”).   The tender offer expired on May 24, 2007                and 126 million shares of the Company’s common stock were repurchased and                subsequently retired on June 4, 2007 utilizing proceeds from the                First                Step Credit Facilities (as defined in Note 12).  The retirement of                these shares resulted in a $1.794 billion reduction in common stock                and                additional paid-in capital and a $2.495 billion reduction in retained                earnings in the Company’s July 1, 2007 unaudited condensed consolidated                balance sheet. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                April 1, 2007, the Company entered into an Agreement and Plan of                Merger                (the “Merger Agreement”) with GreatBanc Trust Company, not in its                individual or corporate capacity, but solely as trustee of the Tribune                Employee Stock Ownership Trust, a separate trust which forms a part                of the                ESOP, Tesop Corporation, a Delaware corporation wholly owned by the                ESOP                (“Merger Sub”), and the Zell Entity (solely for the limited purposes                specified therein) providing for Merger Sub to be merged with and                into the                Company, and following such merger, the Company to continue as the                surviving corporation wholly owned by the ESOP (the                “Merger”).  In connection with the Merger, all outstanding                shares of the Company’s common stock (other than those held by the ESOP                and other than dissenting shares) will receive consideration of $34.00                per                share.  If the Merger does not close by Jan. 1, 2008,                stockholders will receive an additional 8% annualized “ticking fee,”                calculated from Jan. 1, |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |  2008                  through the date of closing of the Merger.  The Merger is                  subject to various conditions set forth in the Merger                  Agreement. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                the Merger, the Zell Entity will receive cash for the shares of the                Company’s common stock it owns and, immediately prior to the Merger, the                Company will repay the exchangeable promissory note held by the Zell                Entity.  Following the consummation of the Merger, the Zell                Entity will purchase from the Company a $225 million subordinated                promissory note and a 15-year warrant for $90 million.  The                warrant will entitle the Zell Entity** **to                purchase 43,478,261 shares of the Company’s common stock (subject to                adjustment), which will represent approximately 40% of the economic                equity                interest in the Company following the Merger (on a fully-diluted                basis,                including after giving effect to share equivalents to be granted                under a                management equity incentive plan to be established).  The                warrant will have an initial aggregate exercise price of $500 million,                increasing by $10 million per year for the first 10 years of the                warrant,                for a maximum aggregate exercise price of $600 million (subject to                adjustment). |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company has agreed to grant registration rights to the Zell Entity                and the                ESOP, in the event the Merger does not close, with respect to the                shares                of the Company’s common stock that the Zell Entity and the ESOP purchased                from the Company in their initial investments.  The Company                granted registration rights to Chandler Trust No. 1 and Chandler                Trust No.                2 (together, the “Chandler Trusts”), which were significant shareholders                of the Company prior to the Company’s entry into the Leveraged ESOP                Transactions.  On April 25, 2007, the Company filed a shelf                registration statement in connection with the registration rights                granted                to the Chandler Trusts. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                June 4, 2007, the Chandler Trusts entered into an underwriting agreement                with Goldman, Sachs & Co. ("Goldman Sachs") and the Company, pursuant                to which the Chandler Trusts agreed to sell an aggregate of 20,351,954                shares of the Company’s common stock, which represented the remainder of                the shares of the Company’s common stock owned by them following the Share                Repurchase, through a block trade underwritten by Goldman                Sachs.  The shares were offered pursuant to the shelf                registration statement filed by the Company on April 25,                2007.  Following the closing of this transaction on June 7,                2007, the Chandler Trusts no longer own any shares of the Company’s common                stock. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**NOTE      4:   DISCONTINUED OPERATIONS**

**Publishing      Discontinued Operations **
*Hoy, *
*Hoy*

----

**Broadcasting      and Entertainment Discontinued Operations **
** **

**Summarized      Financial Information **
** **

|                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | **Second                Quarter** |    |   | **First                Half** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|--------|-------------------------------|--------|
| (in                thousands, except per share data)                                                                                                                                                                                                                                                                                                                                                                                                |   | **2007**                          |    |   | **2006**                      |   |   | **2007** |   |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |    |   |                          |   |   |   |   |   |   |   |
| Operating                revenues                                                                    |   | $                                 | 10,572  |   |                          | $      | 33,465 |   |   | $ | 21,106 |   |   | $ | 63,128 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Operating                profit (loss)                                                                                                                                                                                                                                                                                                                                                                                                         |   | $                                 | 1,075   |   |                          | $      | 5,547 |   |   | $ | (930 | ) |   | $ | 11,503 |   |
| Gain                (loss) on sales of discontinued operations                                                                                                                                                                                                                                                                                                                                                                                      |   |                              | 2,484   |   |                          |   | (90,055 | ) |   |   | (16,958 | ) |   |   | (90,055 | ) |
| Income                (loss) from discontinued operations before     income                taxes                                                                                                                                                                                                                                                                                                            |   |                              | 3,559   |   |                          |   | (84,508 | ) |   |   | (17,888 | ) |   |   | (78,552 | ) |
| Income                taxes (1)                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              | (2,799  | )      |                          |   | 9,777 |   |   |   | (15,726 | ) |   |   | 7,429 |   |
| Income                (loss) from discontinued operations, net of tax                                                                                                                                                                                                                                                                                                                                                                               |   | $                                 | 760     |   |                          | $      | (74,731 | ) |   | $ | (33,614 | ) |   | $ | (71,123 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from discontinued operations per share:                                                                                                                                                                                                                                                                                                                                                                                |   |                              |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
|      Basic                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $                                 | – |   |                          | $      | (.25 | ) |   | $ | (.15 | ) |   | $ | (.23 | ) |
|      Diluted                                                                                                                                                                                                                                                                                                                                                                                                     |   | $                                 | – |   |                          | $      | (.25 | ) |   | $ | (.15 | ) |   | $ | (.23 | ) |

----

**NOTE      5:   INCOME TAXES**

**Matthew      Bender and Mosby Income Tax Liability **

----

| Liability                at Dec. 31,                2006                                                                                                                              |   | $      | 35,482 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
| First                half 2007 after-tax                interest                                                                                                                           |   |   | 1,234  |   |
| Liability                at July 1, 2007 (included in “other current liabilities”)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $      | 36,716 |   |

**PHONES      Interest **

**Adoption      of New Income Tax Accounting Standard **

----

**Other      **

**NOTE      6:  *NEWSDAY* AND *HOY*, NEW YORK      CHARGE**

*Newsday*
*Hoy*
*Newsday*
*Newsday*

*Newsday*
*Hoy*
*Newsday*
*Hoy*
*Newsday*
*Hoy*

----

*Newsday*
*Hoy*
*Newsday*
*Hoy*

*Newsday*
*Hoy*

*Newsday *
*Hoy*

*Newsday*
*Hoy*
*Newsday*
*Hoy, *

**NOTE      7:   STOCK-BASED COMPENSATION**

|                                                                |   | **Second                Quarter** |   |   | **First                Half** |   |
|---------------------------------------------------------------------|--------|-----------------------------------|--------|--------|-------------------------------|--------|
| (in                thousands)                                       |   | **2007**                          |   |   | **2006**                      |   |   | **2007** |   |   | **2006** |   |
|                                                                |   |                              |   |   |                          |   |   |   |   |   |   |   |
| Stock-based                compensation expense:                    |   |                              |   |   |                          |   |   |   |   |   |   |   |
| Options                               |   | $                                 | 623    |   |                          | $      | 799 |   |   | $ | 1,349 |   |   | $ | 7,440 |   |
| Restricted                stock units           |   |                              | 7,184  |   |                          |   | 3,486 |   |   |   | 24,135 |   |   |   | 13,459 |   |
| Employee                stock purchase plan     |   |                              | 214    |   |                          |   | 702 |   |   |   | 801 |   |   |   | 1,472 |   |
| Total                stock-based compensation expense          |   | $                                 | 8,021  |   |                          | $      | 4,987 |   |   | $ | 26,285 |   |   | $ | 22,371 |   |

----

|                                                                     |   | **Second                Quarter 2007** |    |   | **Second                Quarter 2006** |   |
|--------------------------------------------------------------------------|--------|----------------------------------------|---------|--------|----------------------------------------|--------|
|                                                                     |   |                                   |    |   | **Weighted**                           |   |   |   |   |   | **Weighted** |   |
|                                                                     |   |                                   |    |   | **Avg.                Fair**           |   |   |   |   |   | **Avg.                Fair** |   |
| (units                in thousands)                                      |   | **Units**                              |    |   | **Value***                             |   |   | **Units** |   |   | **Value*** |   |
|                                                                     |   |                                   |    |   |                                   |   |   |   |   |   |   |   |
| Outstanding                and nonvested, beginning of quarter           |   |                                   | 2,971   |   |                                   | $      | 30.67 |   |   |   | 1,493 |   |   | $ | 31.16 |   |
| Restricted                stock units granted             |   |                                   | 6       |   |                                   |   | 32.93 |   |   |   | 2 |   |   |   | 27.62 |   |
| Dividend                equivalent units granted     |   |                                   | – |   |                                   |   | – |   |   |   | 8 |   |   |   | 27.62 |   |
| Forfeited              |   |                                   | (26     | )      |                                   |   | 30.07 |   |   |   | (8 | ) |   |   | 31.00 |   |
| Vested                and issued                          |   |                                   | (21     | )      |                                   |   | 30.91 |   |   |   | – |   |   |   | – |   |
| Outstanding                and nonvested, end of quarter                 |   |                                   | 2,930   |   |                                   | $      | 30.68 |   |   |   | 1,495 |   |   | $ | 30.90 |   |

|                                                                                                                  |   | **First                Half 2007** |   |   | **First                Half 2006** |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------|--------|------------------------------------|--------|
|                                                                                                                  |   |                               |   |   | **Weighted**                       |   |   |   |   |   | **Weighted** |   |
|                                                                                                                  |   |                               |   |   | **Avg.                Fair**       |   |   |   |   |   | **Avg.                Fair** |   |
| (units                in thousands)                                                                                   |   | **Units**                          |   |   | **Value***                         |   |   | **Units** |   |   | **Value*** |   |
|                                                                                                                  |   |                               |   |   |                               |   |   |   |   |   |   |   |
| Outstanding                and nonvested, beginning of year                                                           |   |                               | 1,524  |   |                               | $      | 31.18 |   |   |   | – |   |   | $ | – |   |
| Restricted                stock units                granted             |   |                               | 1,837  |   |                               |   | 30.41 |   |   |   | 1,493 |   |   |   | 31.15 |   |
| Dividend                equivalent units                granted          |   |                               | 11     |   |                               |   | – |   |   |   | 16 |   |   |   | 30.81 |   |
| Forfeited                                                           |   |                               | (78    | )      |                               |   | 30.42 |   |   |   | (14 | ) |   |   | 32.29 |   |
| Vested                and issued                                                   |   |                               | (364   | )      |                               |   | 30.50 |   |   |   | – |   |   |   | – |   |
| Outstanding                and nonvested, end of quarter                                                              |   |                               | 2,930  |   |                               | $      | 30.68 |   |   |   | 1,495 |   |   | $ | 30.90 |   |

**Employee      Stock Purchase Plan**

----

**NOTE      8:   PENSION AND POSTRETIREMENT BENEFITS**

|                                                  | **Pension                Benefits** |    |   | **Other                Postretirement Benefits** |   |
|-------------------------------------------------------|-------------------------------------|---------|--------|--------------------------------------------------|--------|
|                                                  | **Second                Quarter**   |    |   | **Second                Quarter**                |   |
| (in                thousands)                         | **2007**                            |    |   | **2006**                                         |   |   | **2007** |   |   | **2006** |   |
|                                                  |                                |    |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| Service                cost                      | $                                   | 303     |   |                                             | $      | 776 |   |   | $ | 323 |   |   | $ | 322 |   |
| Interest                cost                          |                                | 20,093  |   |                                             |   | 20,960 |   |   |   | 1,872 |   |   |   | 1,889 |   |
| Expected                return on plans’ assets |                                | (34,477 | )      |                                             |   | (32,088 | ) |   |   | – |   |   |   | – |   |
| Recognized                actuarial loss (gain)  |                                | 10,650  |   |                                             |   | 17,217 |   |   |   | 4 |   |   |   | (75 | ) |
| Amortization                of prior service costs    |                                | 14      |   |                                             |   | 75 |   |   |   | (361 | ) |   |   | (361 | ) |
| Special                termination benefits (1)       |                                | – |   |                                             |   | 420 |   |   |   | – |   |   |   | – |   |
| Net                periodic benefit cost (credit)     | $                                   | (3,417  | )      |                                             | $      | 7,360 |   |   | $ | 1,838 |   |   | $ | 1,775 |   |

|                                                        | **Pension                Benefits** |    |   | **Other                Postretirement Benefits** |   |
|-------------------------------------------------------------|-------------------------------------|---------|--------|--------------------------------------------------|--------|
|                                                        | **First                Half**       |    |   | **First                Half**                    |   |
| (in                thousands)                               | **2007**                            |    |   | **2006**                                         |   |   | **2007** |   |   | **2006** |   |
|                                                        |                                |    |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| Service                cost                                 | $                                   | 873     |   |                                             | $      | 1,889 |   |   | $ | 646 |   |   | $ | 667 |   |
| Interest                cost                      |                                | 41,768  |   |                                             |   | 41,412 |   |   |   | 3,744 |   |   |   | 3,683 |   |
| Expected                return on plans’ assets  |                                | (69,326 | )      |                                             |   | (63,213 | ) |   |   | – |   |   |   | – |   |
| Recognized                actuarial loss (gain)             |                                | 23,482  |   |                                             |   | 32,915 |   |   |   | 8 |   |   |   | (63 | ) |
| Amortization                of prior service costs          |                                | 69      |   |                                             |   | 109 |   |   |   | (722 | ) |   |   | (722 | ) |
| Special                termination benefits (1)             |                                | – |   |                                             |   | 1,381 |   |   |   | – |   |   |   | – |   |
| Net                periodic benefit cost (credit)           | $                                   | (3,134  | )      |                                             | $      | 14,493 |   |   | $ | 3,676 |   |   | $ | 3,565 |   |

**NOTE      9:   NON-OPERATING ITEMS**

|                                                                                                             | **Second                Quarter 2007**   |    |   | **First                Half 2007**          |   |
|------------------------------------------------------------------------------------------------------------------|------------------------------------------|---------|--------|---------------------------------------------|--------|
| (in                thousands)                                                                                    | **Pretax****Gain                (Loss)** |    |   | **After-tax****Gain                (Loss)** |   |   | **Pretax****Gain                (Loss)** |   |   | **After-tax****Gain                (Loss)** |   |
|                                                                                                             |                                     |    |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Loss                on change in fair valuesof                derivatives and related                investments | $                                        | (27,395 | )      |                                        | $      | (16,711 | ) |   | $ | (97,175 | ) |   | $ | (59,277 | ) |
| Strategic                review expenses                                                               |                                     | (20,925 | )      |                                        |   | (15,657 | ) |   |   | (35,398 | ) |   |   | (29,428 | ) |
| Other,                net                                                                                        |                                     | 5,977   |   |                                        |   | 2,866 |   |   |   | 6,515 |   |   |   | 2,024 |   |
| Total                non-operating items                                                                    | $                                        | (42,343 | )      |                                        | $      | (29,502 | ) |   | $ | (126,058 | ) |   | $ | (86,681 | ) |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                      | **Second                Quarter 2006**           |    |   | **First                Half 2006** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------|---------|--------|------------------------------------|--------|
| (in                thousands)                                                                                                                                                                                                                                                                                                                                                                                             | **   Pretax                Loss** |    |   | **After-tax                Loss**  |   |   | **Pretax****Loss** |   |   | **After-tax****Loss** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                      |                                             |    |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Loss                on change in fair valuesof                derivatives and related                investments                                                                                                                                                                                                                                                                                                          | $                                                | (6,121  | )      |                               | $      | (3,734 | ) |   | $ | (16,438 | ) |   | $ | (10,027 | ) |
| Other,                net                                                                 |                                             | (603    | )      |                               |   | (368 | ) |   |   | (3,983 | ) |   |   | (2,430 | ) |
| Income                tax settlements and adjustments                                                                                                                                                                                                                                                                                                                                                                     |                                             | – |   |                               |   | (3,595 | ) |   |   | – |   |   |   | (3,595 | ) |
| Total                non-operating items                                                                                                                                                                                                                                                                                                                                                                                  | $                                                | (6,724  | )      |                               | $      | (7,697 | ) |   | $ | (20,421 | ) |   | $ | (16,052 | ) |

**NOTE      10:   INVENTORIES**

| (in                thousands)                                                                                | **July                1, 2007** |   |   | **Dec.                31, 2006** |   |
|--------------------------------------------------------------------------------------------------------------|---------------------------------|--------|--------|----------------------------------|--------|
|                                                                                                         |                            |   |   |                             |   |   |   |
| Newsprint                         | $                               | 38,045 |   |                             | $      | 28,629 |   |
| Supplies                and                other           |                            | 13,498 |   |                             |   | 12,333 |   |
| Total                inventories                                                         | $                               | 51,543 |   |                             | $      | 40,962 |   |

----

**NOTE      11:   GOODWILL AND OTHER INTANGIBLE ASSETS**

|                                                                                                                                                                                                                                                                                                                 |   | **July                1, 2007** |    |   | **Dec.                31, 2006** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|---------|--------|----------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                 |   | **Gross**                       |    |   | **Accumulated**                  |   |   | **Net** |   |   | **Gross** |   |   | **Accumulated** |   |   | **Net** |   |
| (in                thousands)                                                                                                                                                                                                                                                                                        |   | **Amount**                      |    |   | **Amortization**                 |   |   | **Amount** |   |   | **Amount** |   |   | **Amortization** |   |   | **Amount** |   |
|                                                                                                                                                                                                                                                                                                                 |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Intangible                assets subject to****amortization:**                                                                                                                                                                                                                                                     |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subscribers                (useful life of 15to                20                years)                                                                                                                                                                                                                    |   | $                               | 189,704 |   |                             | $      | (77,001 | ) |   | $ | 112,703 |   |   | $ | 190,660 |   |   | $ | (72,126 | ) |   | $ | 118,534 |   |
| Network                affiliation agreements(useful                life of 40 years)                (1)                                                                                                                                                                                                             |   |                            | 278,034 |   |                             |   | (26,083 | ) |   |   | 251,951 |   |   |   | 278,034 |   |   |   | (22,614 | ) |   |   | 255,420 |   |
| Other                (useful life of 3 to 40 years)                                                                                                                                                                                                                                                                  |   |                            | 27,181  |   |                             |   | (10,214 | ) |   |   | 16,967 |   |   |   | 25,128 |   |   |   | (8,717 | ) |   |   | 16,411 |   |
| Total                                                                                                                                                                                                                                                                                  |   | $                               | 494,919 |   |                             | $      | (113,298 | ) |   |   | 381,621 |   |   | $ | 493,822 |   |   | $ | (103,457 | ) |   |   | 390,365 |   |
|                                                                                                                                                                                                                                                                                                                 |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Goodwill                and other intangible assets****not                subject to                amortization:**                                                                                                                                                                                                |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Goodwill                                                                                                                                                                                                                                                                                                             |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Publishing                                                                                         |   |                            |    |   |                             |   |   |   |   |   | 4,339,096 |   |   |   |   |   |   |   |   |   |   |   | 4,395,967 |   |
| Broadcasting                and                entertainment                                                                                                                                                                                                                                                         |   |                            |    |   |                             |   |   |   |   |   | 1,441,241 |   |   |   |   |   |   |   |   |   |   |   | 1,441,241 |   |
| Total                goodwill                                                       |   |                            |    |   |                             |   |   |   |   |   | 5,780,337 |   |   |   |   |   |   |   |   |   |   |   | 5,837,208 |   |
| Newspaper                mastheads                                                  |   |                            |    |   |                             |   |   |   |   |   | 1,542,925 |   |   |   |   |   |   |   |   |   |   |   | 1,575,814 |   |
| FCC                licenses                                                         |   |                            |    |   |                             |   |   |   |   |   | 871,946 |   |   |   |   |   |   |   |   |   |   |   | 871,946 |   |
| Tradename                                                                           |   |                            |    |   |                             |   |   |   |   |   | 7,932 |   |   |   |   |   |   |   |   |   |   |   | 7,932 |   |
| Total                                                                               |   |                            |    |   |                             |   |   |   |   |   | 8,203,140 |   |   |   |   |   |   |   |   |   |   |   | 8,292,900 |   |
|                                                                                                                                                                                                                                                                                                                 |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                goodwill and other intangibleassets                                           |   |                            |    |   |                             |   |   |   |   | $ | 8,584,761 |   |   |   |   |   |   |   |   |   |   | $ | 8,683,265 |   |

| (1)   | As                of July 1, 2007, network affiliation agreements, net of accumulated                amortization, included $176 million related to FOX affiliations,                $73                million related to CW affiliations and $3 million related to MyNetwork-TV                affiliations. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**NOTE      12:   DEBT**

| (in                thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | **July                1, 2007** |      |   | **Dec.                31, 2006** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|-----------|--------|----------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                            |      |   |                             |   |   |   |
| Tranche                B Facility due 2014, interest rate of                8.36%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $                               | 5,515,000 |   |                             | $      | – |   |
| Tranche                X Facility due 2008-2009, interest rate of                7.86%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                            | 1,400,000 |   |                             |   | – |   |
| Exchangeable                promissory note, interest rate of 4.81%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                            | 200,000   |   |                             |   | – |   |
| Borrowings                under former bridge credit facility due June 19, 2007, interest                rate of                6.2%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                            | –   |   |                             |   | 1,310,000 |   |
| Former                term loan due June 20, 2011, interest rate of 6.2%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                            | –   |   |                             |   | 1,500,000 |   |
| Commercial                paper, weighted average interest rate of 5.9%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                            | –   |   |                             |   | 97,019 |   |
| Medium-term                notes due 2008, weighted average interest rate of 5.6% in 2007                and 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                            | 262,585   |   |                             |   | 262,585 |   |
| Property                financing obligation, effective interest rate of 7.7%, expiring                2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                            | 46,202    |   |                             |   | 55,711 |   |
| 4.875%                notes due 2010, net of unamortized discount of $487and                $564,                respectively                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                            | 449,513   |   |                             |   | 449,436 |   |
| 7.25%                debentures due 2013, net of unamortized discount of $1,966and                $2,137,                respectively                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                            | 80,117    |   |                             |   | 79,946 |   |
| 5.25%                debentures due 2015, net of unamortized discount of $1,283and                $1,362,                respectively                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                            | 328,716   |   |                             |   | 328,638 |   |
| 7.5%                debentures due 2023, net of unamortized discount of $3,852and                $3,969,                respectively                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                            | 94,898    |   |                             |   | 94,781 |   |
| 6.61%                debentures due 2027, net of unamortized discount of $2,148and                $2,200,                respectively                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                            | 82,812    |   |                             |   | 82,760 |   |
| 7.25%                debentures due 2096, net of unamortized discount of $18,021and                $18,116,                respectively                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                            | 129,979   |   |                             |   | 129,884 |   |
| Other                notes and                obligations                                                                                                  |                            | 34,118    |   |                             |   | 41,498 |   |
| Total                debt excluding                PHONES                                                                                                  |                            | 8,623,940 |   |                             |   | 4,432,258 |   |
| 2%                PHONES debt related to Time Warner stock, due 2029                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                            | 662,960   |   |                             |   | 572,960 |   |
| Total                debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $                               | 9,286,900 |   |                             | $      | 5,005,218 |   |

| (in                thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | **July                1, 2007** |      |   | **Dec.                31, 2006** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|-----------|--------|----------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                            |      |   |                             |   |   |   |
| Current                Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                            |      |   |                             |   |   |   |
|     PHONES                debt related to Time Warner                Stock                                                                                                  | $                               | 319,808   |   |                             | $      | – |   |
|     Other                debt due within one                year                                                                                                            |                            | 78,496    |   |                             |   | 1,429,007 |   |
|     Total                current                debt                                                                                                                        |                            | 398,304   |   |                             |   | 1,429,007 |   |
| Long                Term Debt:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                            |      |   |                             |   |   |   |
|     PHONES                debt related to Time Warner                Stock                                                                                                  |                            | 343,152   |   |                             |   | 572,960 |   |
|     Other                long-term                debt                                                                                                                      |                            | 8,545,444 |   |                             |   | 3,003,251 |   |
|      Total                long-term                debt                                                                                                                |                            | 8,888,596 |   |                             |   | 3,576,211 |   |
| Total                Debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | $                               | 9,286,900 |   |                             | $      | 5,005,218 |   |

**Debt      due within one year – **

----

**Former      Credit Agreements **

**New      Credit Agreement**
** **

----

----

**Exchangeable      Promissory Note **

**Exchangeable      Subordinated Debentures due 2029 (“PHONES”) – **

----

| (in                thousands)                                                                         | **July                1, 2007** |    |   | **Dec.                31, 2006** |   |
|-------------------------------------------------------------------------------------------------------|---------------------------------|---------|--------|----------------------------------|--------|
|                                                                                                  |                            |    |   |                             |   |   |   |
| PHONES                Debt:                                                                           |                            |    |   |                             |   |   |   |
| Discounted                debt component (at                book value)      | $                               | 471,200 |   |                             | $      | 465,280 |   |
| Derivative                component (at fair                value)                |                            | 191,760 |   |                             |   | 107,680 |   |
| Total                                                                   | $                               | 662,960 |   |                             | $      | 572,960 |   |
|                                                                                                  |                            |    |   |                             |   |   |   |
| Time                Warner stock related to PHONES (at fair                value)      | $                               | 336,640 |   |                             | $      | 348,480 |   |

**NOTE      13:   COMPREHENSIVE INCOME**

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | **Second                Quarter** |   |   | **First                Half** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|--------|-------------------------------|--------|
| (in                thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | **2007**                          |   |   | **2006**                      |   |   | **2007** |   |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                              |   |   |                          |   |   |   |   |   |   |   |
| Net                income                                                                                                                                             |   | $                                 | 36,276 |   |                          | $      | 87,834 |   |   | $ | 12,981 |   |   | $ | 190,598 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                              |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Adjustment                for previously unrecognized benefit cost (gains)and                losses included in net                income, net of taxes                                                                                                                                                                                                                                                                                                                                                                                                      |   |                              | 6,357  |   |                          |   | – |   |   |   | 13,999 |   |   |   | – |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                              |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized                holding loss on marketablesecurities                classified as                available-for-sale, net of taxes                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                              | (1,720 | )      |                          |   | (2,115 | ) |   |   | (2,331 | ) |   |   | (1,105 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                              |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Change                in foreign currency translation adjustments,net                of                taxes                                                                         |   |                              | 187    |   |                          |   | 137 |   |   |   | 204 |   |   |   | 149 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                              |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Other                comprehensive income (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                              | 4,824  |   |                          |   | (1,978 | ) |   |   | 11,872 |   |   |   | (956 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                              |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                income                                                                                                                                   |   | $                                 | 41,100 |   |                          | $      | 85,856 |   |   | $ | 24,853 |   |   | $ | 189,642 |   |

**NOTE      14:   OTHER MATTERS**

***Los      Angeles      Times***

** **
**Plant      Equipment**

** –**
*Los Angeles Times*

**Media      Ownership Rules **
** **

**Variable      Interest Entities **
** **

----

**New      Accounting Standards **

**NOTE      15:   SEGMENT INFORMATION**

|                                                                                                                                                                                                                                                                                                                                                                                 |   | **Second                Quarter** |      |   | **First                Half** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|-----------|--------|-------------------------------|--------|
| (in                thousands)                                                                                                                                                                                                                                                                                                                                                        |   | **2007**                          |      |   | **2006**                      |   |   | **2007** |   |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                              |      |   |                          |   |   |   |   |   |   |   |
| **Operating                revenues:**                                                                                                                                                                                                                                                                                                                                               |   |                              |      |   |                          |   |   |   |   |   |   |   |
| Publishing                                                                                                                 |   | $                                 | 920,407   |   |                          | $      | 1,015,903 |   |   | $ | 1,851,901 |   |   | $ | 2,001,222 |   |
| Broadcasting                and                entertainment                                                                                                                                                                                                                                                                                                                         |   |                              | 392,959   |   |                          |   | 392,886 |   |   |   | 675,967 |   |   |   | 676,988 |   |
| Total                operating                revenues                                                      |   | $                                 | 1,313,366 |   |                          | $      | 1,408,789 |   |   | $ | 2,527,868 |   |   | $ | 2,678,210 |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                              |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                profit (loss)**(1):                                                                                                                                                                                                                                                                                                                                       |   |                              |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Publishing                                                                                                                 |   | $                                 | 102,002   |   |                          | $      | 207,617 |   |   | $ | 241,723 |   |   | $ | 377,430 |   |
| Broadcasting                and                entertainment                                                                                                                                                                                                                                                                                                                         |   |                              | 107,734   |   |                          |   | 110,396 |   |   |   | 169,116 |   |   |   | 177,847 |   |
| Corporate                expenses                                                                                          |   |                              | (13,932   | )      |                          |   | (14,020 | ) |   |   | (33,573 | ) |   |   | (34,383 | ) |
| Total                operating                profit                                                        |   | $                                 | 195,804   |   |                          | $      | 303,993 |   |   | $ | 377,266 |   |   | $ | 520,894 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | **July                1, 2007** |       |   | **Dec.                31, 2006** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|--------|----------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                            |       |   |                             |   |
| **Assets:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                            |       |   |                             |   |
| Publishing                                                                                                                                                                            |   | $                               | 8,298,784  |   |                             | $      | 8,503,340 |   |
| Broadcasting                and                entertainment                                                                                                                          |   |                            | 3,854,508  |   |                             |   | 3,987,449 |   |
| Corporate                                                                                                                                                                             |   |                            | 1,047,412  |   |                             |   | 900,811 |   |
|     Assets                held for                sale                                                                                             |   |                            | 84,391     |   |                             |   | 9,172 |   |
| Total                assets                                                                                                                                            |   | $                               | 13,285,095 |   |                             | $      | 13,400,772 |   |

----

**ITEM 2.     MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND**

**                  RESULTS OF OPERATIONS.**

**FORWARD-LOOKING      STATEMENTS**

**SIGNIFICANT      EVENTS**

**Leveraged      ESOP Transactions **
** **

| ·   | On                April 1, 2007, the ESOP purchased 8,928,571 shares of the Company’s common                stock from the Company at a price of $28.00 per share.  The ESOP                paid for this purchase with a promissory note of the ESOP in favor                of the                Company in the principal amount of $250 million, to be repaid by                the ESOP                over the 30-year life of the loan through its use of annual contributions                from the Company to the ESOP and/or distributions paid on the shares                of                the Company’s common stock held by the ESOP.  None of the shares                held by the ESOP have been committed for release or allocated to                employees.  Accordingly, the $250 million of unearned ESOP                shares have been classified as a reduction of shareholders’ equity in the                Company’s July 1, 2007 unaudited condensed consolidated balance                sheet. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | On                April 23, 2007, pursuant to a purchase agreement dated April 1, 2007                (the                “Zell Entity Purchase Agreement”), the Zell Entity made an initial                investment of $250 million in the Company in exchange for (1) 1,470,588                shares of the Company’s common stock at $34.00 per share and (2) an                unsecured subordinated exchangeable promissory note of the Company                in the                principal amount of $200 million, which the Company must repay immediately                prior to the Merger (as defined below).  The promissory note is                exchangeable at the Company’s option, or automatically under certain                circumstances, into an aggregate of 5,882,353 shares of the Company’s                common stock, subject to antidilution adjustments.  The shares                of the Company’s common stock, the exchangeable promissory note and any                underlying shares acquired upon exchange that are held by the Zell                Entity                are subject to certain transfer restrictions until April 23,                2010. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                April 25, 2007, the Company commenced a tender offer to repurchase                up to                126 million shares of the Company’s common stock that were then                outstanding at a price of $34.00 per share (the “Share                Repurchase”).   The tender offer expired on May 24, 2007                and 126 million shares of the Company’s common stock were repurchased and                subsequently retired on June 4, 2007 utilizing proceeds from the                First                Step Credit Facilities as defined below.  The retirement of                these shares resulted in a $1.794 billion reduction in additional                paid-in                capital and a $2.495 billion reduction in retained                earnings. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                April 1, 2007, the Company entered into an Agreement and Plan of                Merger                (the “Merger Agreement”) with GreatBanc Trust Company, not in its                individual or corporate capacity, but solely as trustee of the Tribune                Employee Stock Ownership Trust, a separate trust which forms a part                of the                ESOP, Tesop Corporation, a Delaware corporation wholly owned by the                ESOP                (“Merger Sub”), and the Zell Entity (solely for the limited purposes                specified therein) providing for Merger Sub to be merged with and                into the                Company, and following such merger, the Company to continue as the                surviving corporation wholly owned by the ESOP (the                “Merger”).  In connection with the Merger, all outstanding                shares of the Company’s common stock (other than those held by the ESOP                and other than dissenting shares) will receive consideration of $34.00                per                share.  If the Merger does not close by Jan. 1, 2008,                stockholders will receive an additional 8% annualized “ticking fee,”                calculated from Jan. 1, 2008 through the date of closing of the                Merger.  The Merger is subject to various conditions set forth                in the Merger Agreement. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                the Merger, the Zell Entity will receive cash for the shares of the                Company’s common stock it owns and, immediately prior to the Merger, the                Company will repay the exchangeable promissory note held by the Zell                Entity.  Following the consummation of the Merger, the Zell                Entity will purchase from the Company a $225 million subordinated                promissory note and a 15-year warrant for $90 million.  The                warrant will entitle the Zell Entity** **to                purchase 43,478,261 shares of the Company’s common stock (subject to                adjustment), which will represent approximately 40% of the economic                equity                interest in the Company following the Merger (on a fully-diluted                basis,                including after giving effect to share equivalents to be granted                under a                management equity incentive plan to be established).  The                warrant will have an initial aggregate exercise price of $500 million,                increasing by $10 million per year for the first 10 years of the                warrant,                for a maximum aggregate exercise price of $600 million (subject to                adjustment). |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company has agreed to grant registration rights to the Zell Entity                and the                ESOP, in the event the Merger does not close, with respect to the                shares                of the Company’s common stock that the Zell Entity and the ESOP purchased                from the Company in their initial investments.  The Company                granted registration rights to Chandler Trust No. 1 and Chandler                Trust No.                2 (together, the “Chandler Trusts”), which were significant shareholders                of the Company prior to the Company’s entry into the Leveraged ESOP                Transactions.  On April 25, 2007, the Company filed a shelf                registration statement in connection with the registration rights                granted                to the Chandler Trusts. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On                June 4, 2007, the Chandler Trusts entered into an underwriting agreement                with Goldman, Sachs & Co. ("Goldman Sachs") and the Company, pursuant                to which the Chandler Trusts agreed to sell an |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|    | aggregate                  of 20,351,954 shares of the Company’s common stock, which represented the                  remainder of the shares of the Company’s common stock owned by them                  following the Share Repurchase, through a block trade underwritten                  by                  Goldman Sachs.  The shares were offered pursuant to the shelf                  registration statement filed by the Company on April 25,                  2007.  Following the closing of this transaction on June 7,                  2007, the Chandler Trusts no longer own any shares of the Company’s common                  stock. |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**New      Credit Agreement**
** **

----

----

**Exchangeable      Promissory Note **

**Publishing      Discontinued Operations **
*Hoy, *
*Hoy*
*The Advocate*
*Greenwich Time*

----

**Broadcasting      and Entertainment Discontinued Operations **
** **

**Critical      Accounting Policies –**

**NON-OPERATING      ITEMS**

|                                                                                                                                                                                                                                                                                                                                                                                        |   | **Second                Quarter 2007**   |   |   | **First                Half 2007**          |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------|--------|---------------------------------------------|--------|
| (in                millions, except per share                data)                                                                                                                                                                                                                                                                                                                          |   | **Pretax****Gain                (Loss)** |   |   | **After-tax****Gain                (Loss)** |   |   | **Diluted****EPS** |   |   | **Pretax****Gain                (Loss)** |   |   | **After-tax****Gain                (Loss)** |   |   | **Diluted****EPS** |   |
|                                                                                                                                                                                                                                                                                                                                                                                        |   |                                     |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                on change in fair valuesof                derivatives and related                investments                                                                                                                                                                                                                                                                            |   | $                                        | (27.4  | )      |                                        | $      | (16.7 | ) |   | $ | (.08 | ) |   | $ | (97.2 | ) |   | $ | (59.3 | ) |   | $ | (.26 | ) |
| Strategic                review expenses                                                                                                                                                                                                                                                                                                                                          |   |                                     | (20.9  | )      |                                        |   | (15.7 | ) |   |   | (.08 | ) |   |   | (35.4 | ) |   |   | (29.4 | ) |   |   | (.13 | ) |
| Other,                net                                                            |   |                                     | 6.0    |   |                                        |   | 2.9 |   |   |   | .01 |   |   |   | 6.5 |   |   |   | 2.0 |   |   |   | .01 |   |
| Total                non-operating                items                                                                                                                                                                                                                            |   | $                                        | (42.3  | )      |                                        | $      | (29.5 | ) |   | $ | (.15 | ) |   | $ | (126.1 | ) |   | $ | (86.7 | ) |   | $ | (.38 | ) |

----

|                                                                                                             |   | **Second                Quarter 2006** |    |   | **First                Half 2006** |   |
|------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|---------|--------|-----------------------------------------|--------|
| (in                millions, except per share                data)                                               |   | **Pretax****Loss**                     |    |   | **After-tax****Loss**                   |   |   | **Diluted****EPS** |   |   | **Pretax****Loss** |   |   | **After-tax****Loss** |   |   | **Diluted****EPS** |   |
|                                                                                                             |   |                                   |    |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                on change in fair valuesof                derivatives and related                investments |   | $                                      | (6.1    | )      |                                    | $      | (3.7 | ) |   | $ | (.01 | ) |   | $ | (16.4 | ) |   | $ | (10.0 | ) |   | $ | (.03 | ) |
| Other,                net                                                               |   |                                   | (.6     | )      |                                    |   | (.4 | ) |   |   | – |   |   |   | (4.0 | ) |   |   | (2.4 | ) |   |   | (.01 | ) |
| Income                tax settlements and adjustments                                                            |   |                                   | – |   |                                    |   | (3.6 | ) |   |   | (.01 | ) |   |   | – |   |   |   | (3.6 | ) |   |   | (.01 | ) |
| Total                non-operating items                                                               |   | $                                      | (6.7    | )      |                                    | $      | (7.7 | ) |   | $ | (.03 | ) |   | $ | (20.4 | ) |   | $ | (16.0 | ) |   | $ | (.05 | ) |

**RESULTS      OF OPERATIONS**

*Hoy*

----

**CONSOLIDATED**

|                                                                                                                                                                                                                                                                                                                                                                                                                                               | **Second                Quarter** |    | **First                Half** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|---------|-------------------------------|
| (in                millions, except per share data)                                                                                                                                                                                                                                                                                                                                                                                                | **2007**                          |    | **2006**                      |   | **Change** |   | **2007** |   | **2006** |   | **Change** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                               |                              |    |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                revenues                                                                                                                                                                                                                                                                                                                                                                                                             | $                                 | 1,313   |                          | $ | 1,409 |   | - | 7% |   | $ | 2,528 |   | $ | 2,678 |   | - | 6% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                               |                              |    |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                profit (1)                                                                                                                                                                                                                                                                                                                                                                                                 | $                                 | 196     |                          | $ | 304 |   | - | 36% |   | $ | 377 |   | $ | 521 |   | - | 28% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                               |                              |    |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income on equity investments                                                                                                                                                                                                                                                                                                                                                                                                    | $                                 | 29      |                          | $ | 26 |   | + | 10% |   | $ | 41 |   | $ | 33 |   | + | 27% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                               |                              |    |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                                                                                                                                                                                                                                                                                                                                                                                                   | $                                 | 36      |                          | $ | 163 |   | - | 78% |   | $ | 47 |   | $ | 262 |   | - | 82% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                               |                              |    |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from discontinued operations,net                of                tax                                                         | $                                 | 1       |                          | $ | (75 | ) |   | * |   | $ | (34 | ) | $ | (71 | ) | - | 53% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                               |                              |    |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income                                                                                                                                                                                                                                                                                                                                                                                                                     | $                                 | 36      |                          | $ | 88 |   | - | 59% |   | $ | 13 |   | $ | 191 |   | - | 93% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                               |                              |    |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                earnings per share:                                                                                                                                                                                                                                                                                                                                                                                                         |                              |    |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                operations                                                                                                                                                                                                                                                                                                                                                                                                               | $                                 | .17     |                          | $ | .53 |   | - | 68% |   | $ | .21 |   | $ | .84 |   | - | 75% |
| Discontinued                operations                                                                                                                                                                                                                                                                                                                                                                                                        |                              | – |                          |   | (.25 | ) | - | 100% |   |   | (.15 | ) |   | (.23 | ) | - | 35% |
|                        Net income                                                                                                                                                                                                                                                                                                                                                                          | $                                 | .18     |                          | $ | .28 |   | - | 36% |   | $ | .06 |   | $ | .61 |   | - | 90% |

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

**Earnings      Per Share (“EPS”) – **
*Los Angeles Times*
*Los Angeles Times*

----

**Operating      Revenues and Profit – **

|                                                                                                                                                                                                                                                                                                                                                                                                 | **Second                Quarter** |    | **First                Half** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|---------|-------------------------------|
| (in                millions)                                                                                                                                                                                                                                                                                                                                                                         | **2007**                          |    |                          | **2006** |   |   | **Change** |   | **2007** |   |   | **2006** |   | **Change** |
|                                                                                                                                                                                                                                                                                                                                                                                                 |                              |    |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                revenues**                                                                                                                                                                                                                                                                                                                                                                |                              |    |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Publishing                                                                                                                                                                                                                                                         | $                                 | 920     |                          |   | $ | 1,016 |   |   | - | 9% |   | $ | 1,852 |   |   | $ | 2,001 |   | - | 7% |
| Broadcasting                and                entertainment                                                                                                                                                                                                                                                                                                                                         |                              | 393     |                          |   |   | 393 |   |   |   |                        – |   |   | 676 |   |   |   | 677 |   |   |         – |
| Total                operating revenues                                                                                                                                                                                                                                                                                                                                | $                                 | 1,313   |                          |   | $ | 1,409 |   |   | - |     7% |   | $ | 2,528 |   |   | $ | 2,678 |   | - |     6% |
|                                                                                                                                                                                                                                                                                                                                                                                                 |                              |    |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Depreciation                and amortization expense**                                                                                                                                                                                                                                                                                                                                             |                              |    |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Publishing                                                                                                                  | $                                 | 45      |                          |   | $ | 42 |   |   | + | 8% |   | $ | 89 |   |   | $ | 84 |   | + | 6% |
| Broadcasting                and                entertainment                                                                                                                                                                                                                                                                                                                                         |                              | 13      |                          |   |   | 13 |   |   | + | 3% |   |   | 25 |   |   |   | 24 |   | + | 4% |
| Corporate                                                                                                                   |                              | – |                          |   |   | – |   |   | - | 8% |   |   | 1 |   |   |   | 1 |   | - | 19% |
| Total                depreciation and amortization expense                                                                                                                                                                                                                                                                                                                                           | $                                 | 58      |                          |   | $ | 55 |   |   | + | 7% |   | $ | 115 |   |   | $ | 109 |   | + | 6% |
|                                                                                                                                                                                                                                                                                                                                                                                                 |                              |    |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                profit (loss) (1)**                                                                                                                                                                                                                                                                                                                                                       |                              |    |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Publishing                                                                                                                  | $                                 | 102     |                          |   | $ | 208 |   |   | - | 51% |   | $ | 242 |   |   | $ | 377 |   | - | 36% |
| Broadcasting                and                entertainment                                                                                                                                                                                                                                                                                                                                         |                              | 108     |                          |   |   | 110 |   |   | - | 2% |   |   | 169 |   |   |   | 178 |   | - | 5% |
| Corporate                expenses                                                                                                                                                                                                                                                                                                                                                               |                              | (14     | )                             |   |   | (14 | ) |   | + | 1% |   |   | (34 | ) |   |   | (34 | ) | + | 2% |
| Total                operating                profit                                                         | $                                 | 196     |                          |   | $ | 304 |   |   | - | 36% |   | $ | 377 |   |   | $ | 521 |   | - | 28% |

*Los Angeles Times*

**Operating      Expenses – **

|                                                                                                  | **Second                Quarter** |   | **First                Half** |
|-------------------------------------------------------------------------------------------------------|-----------------------------------|--------|-------------------------------|
| (in                millions)                                                                          | **2007**                          |   | **2006**                      |   | **Change** |   | **2007** |   | **2006** |   | **Change** |
|                                                                                                  |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost                of sales (exclusive of items shown below)                                         | $                                 | 665    |                          | $ | 698 |   | - | 5% |   | $ | 1,282 |   | $ | 1,329 |   | - | 4% |
| Selling,                general and                administrative       |                              | 395    |                          |   | 352 |   | + | 12% |   |   | 754 |   |   | 719 |   | + | 5% |
| Depreciation                and amortization                                      |                              | 58     |                          |   | 55 |   | + | 7% |   |   | 115 |   |   | 109 |   | + | 6% |
| Total                operating expenses                                                | $                                 | 1,118  |                          | $ | 1,105 |   | + | 1% |   | $ | 2,151 |   | $ | 2,157 |   |   | – |

----

*Los Angeles Times*

**PUBLISHING**

**Operating      Revenues and Profit – **

|                                                                                          | **Second                Quarter** |   | **First                Half** |   |
|-----------------------------------------------------------------------------------------------|-----------------------------------|--------|-------------------------------|--------|
| (in                millions)                                                                  | **2007**                          |   | **2006**                      |   | **Change** |   | **2007** |   | **2006** |   | **Change** |   |
|                                                                                          |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                revenues           | $                                 | 920    |                          | $      | 1,016 |   | - | 9% |   | $ | 1,852 |   | $ | 2,001 |   | - | 7% |   |
|                                                                                          |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                expenses                     |                              | 818    |                          |   | 808 |   | + | 1% |   |   | 1,610 |   |   | 1,624 |   | - | 1% |   |
|                                                                                          |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                profit (1)                                       | $                                 | 102    |                          | $      | 208 |   | - | 51% |   | $ | 242 |   | $ | 377 |   | - | 36% |   |

*Los Angeles Times*

----

|                                                                                                                                                                                                                                                                                                                                            | **Second                Quarter** |   | **First                Half** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|--------|-------------------------------|--------|
| (in                millions)                                                                                                                                                                                                                                                                                                                    | **2007**                          |   | **2006**                      |   | **Change** |   | **2007** |   | **2006** |   | **Change** |   |
| Advertising                                                                                                                                                                                                                                                                                                                                     |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retail                                                                 | $                                 | 312    |                          | $      | 330 |   | - | 5% |   | $ | 605 |   | $ | 624 |   | - | 3% |   |
| National                                                                                                                                                                                                                                                                                                                                        |                              | 156    |                          |   | 175 |   | - | 11% |   |   | 334 |   |   | 357 |   | - | 7% |   |
| Classified                                                             |                              | 253    |                          |   | 307 |   | - | 18% |   |   | 513 |   |   | 610 |   | - | 16% |   |
| Total                advertising                                                                                                                                                                                                                                                                                                                |                              | 721    |                          |   | 812 |   | - | 11% |   |   | 1,452 |   |   | 1,591 |   | - | 9% |   |
| Circulation                                                                                                                                                                                                                                                                                                                                     |                              | 132    |                          |   | 140 |   | - | 6% |   |   | 267 |   |   | 285 |   | - | 6% |   |
| Other                                                        |                              | 67     |                          |   | 64 |   | + | 7% |   |   | 133 |   |   | 125 |   | + | 6% |   |
| Total                revenues                                                                                                                                                                                                                                                                           | $                                 | 920    |                          | $      | 1,016 |   | - | 9% |   | $ | 1,852 |   | $ | 2,001 |   | - | 7% |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                     | **Second                Quarter** |   | **First                Half** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|--------|-------------------------------|--------|
| **Inches**(in thousands)                                                                                                                                                                                                                                                                                                                                                                                                 | **2007**                          |   | **2006**                      |   | **Change** |   | **2007** |   | **2006** |   | **Change** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                     |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Full                run                                                                                                                                                                                                                                                                                                                                                                                                  |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retail                                                                                                                                          |                              | 1,324  |                          |   | 1,340 |   | - | 1% |   |   | 2,532 |   |   | 2,550 |   | - | 1% |   |
| National                                                                                                                                        |                              | 646    |                          |   | 763 |   | - | 15% |   |   | 1,345 |   |   | 1,560 |   | - | 14% |   |
| Classified                                                                                                                                                                                                                                                                                                                                                             |                              | 2,041  |                          |   | 2,546 |   | - | 20% |   |   | 4,107 |   |   | 4,957 |   | - | 17% |   |
| Total                full                run                                                                                                                                                                                                                                                                                                                      |                              | 4,011  |                          |   | 4,649 |   | ­- | 14% |   |   | 7,984 |   |   | 9,067 |   | ­- | 12% |   |
| Part                run                                                                                                                                                                                                                                                                                                                                      |                              | 4,730  |                          |   | 5,589 |   | - | 15% |   |   | 9,447 |   |   | 10,549 |   | - | 10% |   |
| Total                inches                                                                                                                                                                                                                                                                                                                                            |                              | 8,741  |                          |   | 10,238 |   | - | 15% |   |   | 17,431 |   |   | 19,616 |   | - | 11% |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                     |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Preprint                pieces**** **(in                millions)                                                         |                              | 3,635  |                          |   | 3,595 |   | + | 1% |   |   | 7,087 |   |   | 6,924 |   | + | 2% |   |

----

**Operating      Expenses **

|                                                                                                                                                                                                                                                                                                                                                                                 | **Second                Quarter** |   | **First                Half** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|--------|-------------------------------|--------|
| (in                millions)                                                                                                                                                                                                                                                                                                                                                         | **2007**                          |   | **2006**                      |   | **Change** |   | **2007** |   | **2006** |   | **Change** |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Compensation                (1)                                                                                                                                                                                                                                                                                                         | $                                 | 334    |                          | $      | 332 |   | + | 1% |   | $ | 664 |   | $ | 684 |   | - | 3% |   |
| Newsprint                and                ink                                                                                                                                                                                                                                                                               |                              | 105    |                          |   | 126 |   | - | 17% |   |   | 220 |   |   | 250 |   | - | 12% |   |
| Circulation                distribution                                                                                                                                                                                                                                                                                                                               |                              | 119    |                          |   | 116 |   | + | 2% |   |   | 238 |   |   | 231 |   | + | 3% |   |
| Outside                Services                                                                             |                              | 80     |                          |   | 79 |   | + | 1% |   |   | 156 |   |   | 152 |   | + | 3% |   |
| Promotion                                                                                                                                                                                                                                                                                                                               |                              | 25     |                          |   | 26 |   | - | 4% |   |   | 46 |   |   | 49 |   | - | 5% |   |
| Depreciation                and                amortization                                                                                                                                                                                                                                                                                  |                              | 45     |                          |   | 42 |   | + | 8% |   |   | 89 |   |   | 84 |   | + | 6% |   |
| Other                (2)                                                                                    |                              | 110    |                          |   | 87 |   | + | 26% |   |   | 197 |   |   | 174 |   | + | 13% |   |
| Total                operating                expenses                                                      | $                                 | 818    |                          | $      | 808 |   | + | 1% |   | $ | 1,610 |   | $ | 1,624 |   | - | 1% |   |

| (1)  | Compensation                for the second quarter and first half of 2007 included charges of                $25                million and $26 million, respectively, for the elimination of                approximately 440 positions.  Compensation                for the first half of 2006 included a $20 million charge related                to new                union contracts at Newsday. |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Other                expenses for the second quarter and first half of 2007 included a                charge of                $24 million for the write-off of *Los**Angeles Times* plant                equipment related to the previously closed San Fernando Valley                facility. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Los Angeles Times*

**BROADCASTING      AND ENTERTAINMENT**

**Operating      Revenues and Profit – **

|                                                                                                                                                                                                                                                                                                                                                                                 | **Second                Quarter** |   | **First                Half** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|--------|-------------------------------|--------|
| (in                millions)                                                                                                                                                                                                                                                                                                                                                         | **2007**                          |   | **2006**                      |   | **Change** |   | **2007** |   | **2006** |   | **Change** |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                revenues**                                                                                                                                                                                                                                                                                                                                                |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Television                                                                                                                 | $                                 | 287    |                          | $      | 309 |   | - | 7% |   | $ | 551 |   | $ | 576 |   | - | 4% |   |
| Radio/entertainment                                                                                                                                                                                                                                                                                       |                              | 106    |                          |   | 84 |   | + | 27% |   |   | 125 |   |   | 101 |   | + | 23% |   |
| Total                operating                revenues                                                                                                                                                                                                                                                                                            | $                                 | 393    |                          | $      | 393 |   |   | – |   | $ | 676 |   | $ | 677 |   |   | – |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                expenses**                                                                                                                                                                                                                                                                                                                                                |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Television                                                                                                                 | $                                 | 198    |                          | $      | 205 |   | - | 4% |   | $ | 395 |   | $ | 399 |   | - | 1% |   |
| Radio/entertainment                                                                                                                                                                                                                                                                                            |                              | 87     |                          |   | 77 |   | + | 14% |   |   | 112 |   |   | 100 |   | + | 11% |   |
| Total                operating                expenses                                                      | $                                 | 285    |                          | $      | 282 |   | + | 1% |   | $ | 507 |   | $ | 499 |   | + | 2% |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                profit (1)**                                                                                                                                                                                                                                                                                                                                              |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Television                                                                                                                 | $                                 | 89     |                          | $      | 103 |   | - | 14% |   | $ | 156 |   | $ | 177 |   | - | 12% |   |
| Radio/entertainment                                                                                                        |                              | 19     |                          |   | 7 |   | + | 180% |   |   | 13 |   |   | 1 |   | + | 808% |   |
| Total                operating                profit                                                        | $                                 | 108    |                          | $      | 110 |   | - | 2% |   | $ | 169 |   | $ | 178 |   | - | 5% |   |

----

**Operating      Expenses **

|                                                                                                                                                                                                                                                                                                                                                                                      | **Second                Quarter** |   | **First                Half** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|--------|-------------------------------|--------|
| (in                millions)                                                                                                                                                                                                                                                                                                                                                              | **2007**                          |   | **2006**                      |   | **Change** |   | **2007** |   | **2006** |   | **Change** |   |
|                                                                                                                                                                                                                                                                                                                                                                                      |                              |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Compensation                                                                                                     | $                                 | 137    |                          | $      | 129 |   | + | 7% |   | $ | 211 |   | $ | 198 |   | + | 7% |   |
| Programming                                                                                                      |                              | 80     |                          |   | 87 |   | - | 8% |   |   | 163 |   |   | 171 |   | - | 4% |   |
| Depreciation                and                amortization                                                      |                              | 13     |                          |   | 13 |   | + | 3% |   |   | 25 |   |   | 24 |   | + | 4% |   |
| Other                                                                                                            |                              | 55     |                          |   | 53 |   |   | – |   |   | 108 |   |   | 106 |   | + | 1% |   |
| Total                operating                expenses                                                           | $                                 | 285    |                          | $      | 282 |   | + | 1% |   | $ | 507 |   | $ | 499 |   | + | 2% |   |

**CORPORATE      EXPENSES**

**EQUITY      RESULTS**

**INTEREST      AND DIVIDEND INCOME, INTEREST EXPENSE, AND INCOME TAXES**

----

**DISCONTINUED      OPERATIONS**

**Publishing      Discontinued Operations **
*Hoy, *
*Hoy*

**Broadcasting      and Entertainment Discontinued Operations **
** **

----

**Summarized      Financial Information **
** **

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | **Second                Quarter** |    |   | **First                Half** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|---------|--------|-------------------------------|--------|
| (in                thousands, except per share data)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | **2007**                          |    |   | **2006**                      |   |   | **2007** |   |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                              |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Operating                revenues                                                                                                                                                                 | $                                 | 10,572  |   |                          | $      | 33,465 |   |   |  $ | 21,106 |   |   | $ | 63,128 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                              |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Operating                profit                (loss)                                                                                                     | $                                 | 1,075   |   |                          | $      | 5,547 |   |   |  $ | (930 | ) |   | $ | 11,503 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                              |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                              |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
|  Gain              (loss) on sales of discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                              | 2,484   |   |                          |   | (90,055 | ) |   |   | (16,958 | ) |   |   | (90,055 | ) |
| Income                (loss) from discontinued operations before     income                taxes                                                                         |                              | 3,559   |   |                          |   |  (84,508 | ) |   |   | (17,888 | ) |   |   |  (78,552 | ) |
| Income                taxes                (1)                                                                                                                                                    |                              | (2,799  | )      |                          |   | 9,777 |   |   |   | (15,726 | ) |   |   | 7,429 |   |
| Income                (loss) from discontinued operations, net of tax                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | $                                 | 760     |   |                          | $      | (74,731 | ) |   |  $ | (33,614 | ) |   | $ | (71,123 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                              |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from discontinued operations per share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                              |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
|      Basic                                                                                                                                                               | $                                 | – |   |                          | $      | (.25 | ) |   | $ | (.15 | ) |   | $ | (.23 | ) |
|      Diluted                                                                                                                                                             | $                                 | – |   |                          | $      | (.25 | ) |   | $ | (.15 | ) |   | $ | (.23 | ) |

**LIQUIDITY      AND CAPITAL RESOURCES**

----

**Off-Balance      Sheet Arrangements **

**Contractual      Obligations **
** **
** **

----

**ITEM      3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET      RISK.**

**Interest      Rate Risk**
** **

| **Maturities**                                    |   |    | **Fixed Rate****Debt**         |   | **Weighted Avg****Interest Rate** |   | **Variable Rate****Debt** |   | **Weighted Avg****Interest Rate** |      |   | **Total****Debt** |   |
|---------------------------------------------------|--------|---------|-------------------------------------|--------|---------------------------------------------|--------|--------------------------------|--------|---------------------------------------------|-----------|--------|-------------------|--------|
| 2007(1)                                           |   |  $ |                   320,941 |   |                                        | 2.0    | %                              |   |  $                                     | 27,575    |   |              |   | 8.4 | % |   |  $ | 348,516 |   |
| 2008                                              |   |    | 264,713                             |   |                                        | 5.7    | %                              |   |                                        | 705,150   |   |              |   | 7.9 | % |   |   | 969,863 |   |
| 2009                                              |   |    | 48,352                              |   |                                        | 7.7    | %                              |   |                                        | 805,150   |   |              |   | 7.9 | % |   |   | 853,502 |   |
| 2010                                              |   |    | 451,320                             |   |                                        | 4.9    | %                              |   |                                        | 55,150    |   |              |   | 8.4 | % |   |   | 506,470 |   |
| 2011                                              |   |    | 1,912                               |   |                                        | 9.3    | %                              |   |                                        | 55,150    |   |              |   | 8.4 | % |   |   | 57,062 |   |
| Thereafter(2)(3)                                  |   |    | 1,284,662                           |   |                                        | 4.9    | %                              |   |                                        | 5,266,825 |   |              |   | 8.4 | % |   |   | 6,551,487 |   |
| Total                at July 1, 2007         |   |  $ | 2,371,900                           |   |                                        |   |                           |   |  $                                     | 6,915,000 |   |              |   |   |   |   |  $ | 9,286,900 |   |
| Fair                Value at July 1, 2007(4) |   |  $ | 2,180,140                           |   |                                        |   |                           |   |  $                                     | 6,915,000 |   |              |   |   |   |   |  $ | 9,095,140 |   |

----

| (1) | Includes                $320 million related to the Company’s 2% PHONES (fixed rate debt) which                represents the cash exchange value of the PHONES on July 1,                2007.  See Note 12 to the Company’s unaudited condensed                consolidated financial statements in Part I, Item 1,                hereof. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes                $343 million related to the Company’s 2% PHONES, due                2029.  The Company may redeem the PHONES at any time for the                greater of the principal value of the PHONES ($156.25 per PHONES                as                July 1, 2007) or the then market value of two shares of Time Warner                common stock, subject to certain adjustments.  Quarterly                interest payments are made to the PHONES holders at an annual rate                of 2%                of the initial principal. The Company records both cash and non-cash                interest expense on the discounted debt component of the                PHONES.  See Note 12 to the Company’s unaudited condensed                consolidated financial statements in Part I, Item 1,                hereof. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes                $18 million related to the interest rate swap agreement on the                $100 million 7.5% debentures due in 2023 effectively converting the                fixed 7.5% rate to a variable rate based on                LIBOR. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Fair                value was estimated based on quoted market prices for similar issues                or on                current rates available to the Company for debt of the same remaining                maturities and similar terms. The carrying value of the Company’s                derivative instruments approximates fair value. The fair value of                the                PHONES was determined by reference to the market value resulting                from                trading on a national securities                exchange. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Variable      Interest Rate Liabilities**
** **

** **

----

**EQUITY      PRICE RISK**

**Available-For-Sale      Securities**
** **

|                                                                      | **Valuation                of Investments****Assuming                Indicated Decrease****in                Stock’s Price** |   |                |   | **Valuation                of Investments****Assuming                Indicated Increase****in                Stock’s Price** |
|---------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|------------------------------------------------------------------------------------------------------------------------------------|
|  (in              thousands)                                         | **-30%**                                                                                                                      |   | **-20%**  |   | **-10%**                                                                                                                      |   | **July                1, 2007****Fair                Value** |   | **+10%**  |   | **+20%**  |   | **+30%**  |
| Common                stock investments inpublic                companies | $7,050                                                                                                                             |   | $8,058         |   | $9,065                                                                                                                             |   | $10,072(1) |   | $11,079 |   | $12,086 |   | $13,094 |

| (1)   | Excludes                16 million shares of Time Warner common stock.  See discussion                below in “Derivatives and Related Trading                Securities.” |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Derivatives      and Related Trading Securities – **

----

|                                   | **Valuation                of Investment****Assuming                Indicated Decrease****in                Stock’s Price** |   |           |   | **Valuation                of Investment****Assuming                Indicated Increase****in                Stock’s Price** |
|----------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|-----------------------------------------------------------------------------------------------------------------------------------|
|  (in              thousands)      | **-30%**                                                                                                                     |   | **-20%**  |   | **-10%**                                                                                                                     |   | **July                1, 2007****Fair                Value**  |   | **+10%**  |   | **+20%**  |   | **+30%**  |
| Time                Warner commonstock | $235,648                                                                                                                          |   | $269,312       |   | $302,976                                                                                                                          |   | $336,640 |   | $370,304 |   | $403,968 |   | $437,632 |

**ITEM      4.   CONTROLS AND PROCEDURES.**

**Conclusion      Regarding the Effectiveness of Disclosure Controls and      Procedures**

**Changes      in Internal Control Over Financial Reporting**

----

**PART      II.   OTHER INFORMATION**

**ITEM      1.**
**LEGAL PROCEEDINGS.**

----

**ITEM      1A.   RISK FACTORS.**

**Our      businesses may be adversely affected* *by the Leveraged ESOP      Transactions and the failure to consummate the pending Leveraged ESOP      Transactions.**

| ·   | the                outcome of any litigation and judicial actions or proceedings that                have                been or may be instituted against us and others relating to the proposed                Leveraged ESOP Transactions, including any legislative or regulatory                action; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | management’s                attention from our day to day business and potential growth opportunities                may be diverted during the pendency of the Leveraged ESOP                Transactions; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | uncertainties                with regards to the Leveraged ESOP Transactions may adversely affect                our                existing relationships with our employees, customers and vendors;                and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | certain                costs relating to the Merger, such as legal, accounting and financial                advisory fees, are payable by us whether or not the Merger is                completed. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                occurrence of any event, change or other circumstances that could                give                rise to the termination of the Merger Agreement or the Zell Entity                Purchase Agreement; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                inability to complete the Merger due to the failure to obtain stockholder                approval or the failure to satisfy other conditions to consummation                of the                Merger, including the inability to obtain the approval of the Federal                Communications Commission (“FCC”) or other regulatory approvals required                by the Merger Agreement and the Zell Entity Purchase                Agreement; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                failure of the Company to obtain the necessary financing arrangements                set                forth in the debt commitment letters received in connection with                the                Leveraged ESOP Transactions; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | the                failure of the Merger to close for any other                reason. |
|--------------------|----------------------------------------------------------------------------------------|

| ·   | the                current market price of our common stock may reflect a market assumption                that the Leveraged ESOP Transactions will occur and a failure to                complete                the Leveraged ESOP Transactions could result in a decline in the                market                price of our common stock; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our                current plans and operations may be disrupted;                and |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | the                potential difficulties related to employee retention as a result                of any                delay of the completion of the                Merger. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**We      currently have substantial debt and other financial obligations, and we expect      to incur significant additional debt in connection with the Leveraged ESOP      Transactions.**

| ·   | will                require us to dedicate greater amounts of our cash flow to the payment                of                principal and interest on our debt which will reduce the funds we                have                available for other purposes; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | will                limit our liquidity and operational flexibility in changing economic,                business and competitive conditions which could require us to consider                deferring planned capital expenditures, reducing discretionary spending,                selling additional assets or deferring acquisitions or other strategic                opportunities; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | will                impose on us additional financial and operational restrictions;                and |
|--------------------|--------------------------------------------------------------------------------------------------------|

| ·   | will                expose us to increased interest rate risk because a substantial portion                of                our debt obligations will be at variable interest                rates. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Consummation      of the Leveraged ESOP Transactions will require regulatory approval from the      FCC.**

| ·   | waive                its rule prohibiting the common ownership of daily English language                newspapers and broadcast stations (“the cross-ownership rule”) in the five                markets where we own such combinations (with one waiver being necessary                to                continue a previously “grandfathered” newspaper-broadcast combination in                the Chicago market following the consummation of a transfer of control)                pending the outcome of the FCC’s pending review of its broadcast ownership                rules; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | address                the Company’s pending license renewal                applications; |
|--------------------|-------------------------------------------------------------------------------------------------|

| ·   | grant                a “failing station waiver” to permit the continued common ownership of the                Company’s two television stations in Hartford, Connecticut;                and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | grant                a “satellite waiver” to permit the continued common ownership and                operation of WTTK, Kokomo, Indiana, as a satellite station of WTTV,                Indianapolis, Indiana. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**ITEM      2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF      PROCEEDS.**

**EGI-TRB      LLC Investment**
**– **

**Stock      Repurchase Program – **

**ITEM      4.**
**SUBMISSION OF MATTERS TO A VOTE OF SECURITY      HOLDERS.**

| (a)   | The                Company held its annual meeting of shareholders on May 9,                2007. |
|-----------------|---------------------------------------------------------------------------------------------------|

| (b)   | No                answer required. |
|-----------------|------------------------------------|

----

| (c)   | Proposal                1 involved the election of three directors to serve until the 2010                Annual                Meeting.  Those directors and the voting results were as                follows: |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                            | **Votes****“For”** |   | **Votes****“Withheld”** |
|-------------------------------------------------|--------------------------------|--------|-------------------------------------|
| Jeffrey                Chandler                 | 204,411,806                    |   | 17,571,517                          |
| William                A.                Osborn | 213,660,325                    |   | 8,322,998                           |
| Miles                D. White                   | 213,926,380                    |   | 8,056,943                           |

|    | Proposal                  2 involved the ratification of the selection of PricewaterhouseCoopers                  LLP                  to serve as the Company’s independent accountants for 2007.  The                  voting results were as                  follows:  |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **Votes****“For”** |   | **Votes****“Against”** |   | **Votes****“Abstained”** |
|--------|--------------------------------|--------|------------------------------------|--------|--------------------------------------|
|   | 217,299,213                    |   | 3,130,765                          |   | 1,553,345                            |

|    | Proposal                  3 involved a shareholder proposal concerning the Company’s classified                  board of directors.  The voting results were as                  follows: |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **Votes****“For”** |   | **Votes****“Against”** |   | **Votes****“Abstained”** |   | **Broker                Non-Votes** |
|--------|--------------------------------|--------|------------------------------------|--------|--------------------------------------|--------|-------------------------------------|
|   | 120,885,844                    |   | 81,613,042                         |   | 2,456,978                            |   | 17,027,460                          |

| (d)   |  Not                  applicable. |
|-----------------|----------------------------------------|

**ITEM      6.  EXHIBITS.**

----

----

**SIGNATURE**

|                                           | TRIBUNE                COMPANY(Registrant)                                                                                                                                                                   |
|------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                           |                                                                                                                                                                                                              |
| Date:  August                9, 2007 | /s/  R.                Mark MalloryR.                Mark MalloryVice                President and Controller(on                behalf of the registrantand                as Chief Accounting Officer) |

----