SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 26, 2004

Commission file number 1-8572

TRIBUNE COMPANY(Exact name of registrant as specified in its charter)

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)


Registrant's telephone number, including area code: (312) 222-9100
Securities registered pursuant to Section 12(b) of the Act:

Title of each class





Name of each exchange on
which registeredCommon Stock ($.01 par value)





New York Stock ExchangePreferred Share Purchase Rights

}



Chicago Stock Exchange{

Pacific Stock Exchange2% Exchangeable Subordinated Debentures Due 2029

New York Stock Exchange


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes ý    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ý

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act
Rule 12b-2). Yes ý    No o

Aggregate market value of the Company's voting and non-voting common equity held by non-affiliates on June 27, 2004, based upon the closing price of the
Company's Common Stock as reported on the New York Stock Exchange Composite Transactions list for such date: approximately $10,739,000,000.

At
February 18, 2005, there were 317,311,160 shares outstanding of the Company's Common Stock ($.01 par value per share), excluding 83,441,765 shares held by subsidiaries and
affiliates of the Company (see Note 15 to the Company's Consolidated Financial Statements).

The
following document is incorporated by reference, in part:

Definitive
Proxy Statement for the registrant's May 18, 2005 Annual Meeting of Shareholders (Part III, to the extent described therein).



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INDEX TO TRIBUNE COMPANY  2004 FORM 10-K

|Item No. |                                                                                                              |                                                                                                                           |                                                       |    | Page
|-------- | ------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------- | -- | ----
|PART I  
|1.       | Business                                                                                                     |                                                                                                                           | 1                                                    
|         |                                                                                                              | Significant Events                                                                                                        |                                                       | 1 
|         |                                                                                                              | Business Segments                                                                                                         |                                                       | 1 
|         |                                                                                                              | Publishing                                                                                                                |                                                       | 2 
|         |                                                                                                              | Broadcasting and Entertainment                                                                                            |                                                       | 9 
|         |                                                                                                              | Investments                                                                                                               |                                                       | 14
|         |                                                                                                              | Non-Operating Items                                                                                                       |                                                       | 15
|         |                                                                                                              | Governmental Regulation                                                                                                   |                                                       | 15
|         |                                                                                                              | Employees                                                                                                                 |                                                       | 16
|         |                                                                                                              | Executive Officers of the Company                                                                                         |                                                       | 17
|         |                                                                                                              | Available Information                                                                                                     |                                                       | 18
|2.       | Properties                                                                                                   |                                                                                                                           | 19                                                   
|3.       | Legal Proceedings                                                                                            |                                                                                                                           | 20                                                   
|4.       | Submission of Matters to a Vote of Security Holders                                                          |                                                                                                                           | 23                                                   
|PART II 
|5.       | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |                                                                                                                           | 24                                                   
|6.       | Selected Financial Data                                                                                      |                                                                                                                           | 24                                                   
|7.       | Management's Discussion and Analysis of Financial Condition and Results of Operations                        |                                                                                                                           | 25                                                   
|7A.      | Quantitative and Qualitative Disclosures About Market Risk                                                   |                                                                                                                           | 50                                                   
|8.       | Financial Statements and Supplementary Data                                                                  |                                                                                                                           | 54                                                   
|         |                                                                                                              | Report of Independent Registered Public Accounting Firm                                                                   |                                                       | 55
|         |                                                                                                              | Management's Responsibility for Financial Statements and Management's Report on Internal Control Over Financial Reporting |                                                       | 57
|         |                                                                                                              | Consolidated Statements of Income for each of the three fiscal years in the period ended Dec. 26, 2004                    |                                                       | 59
|         |                                                                                                              | Consolidated Balance Sheets at Dec. 26, 2004 and Dec. 28, 2003                                                            |                                                       | 60
|         |                                                                                                              | Consolidated Statements of Shareholders' Equity for each of the three fiscal years in the period ended Dec. 26, 2004      |                                                       | 62
|         |                                                                                                              | Consolidated Statements of Cash Flows for each of the three fiscal years in the period ended Dec. 26, 2004                |                                                       | 64
|         |                                                                                                              | Notes to Consolidated Financial Statements                                                                                |                                                       |   
|         |                                                                                                              |                                                                                                                           | Note 1: Summary of Significant Accounting Policies    |    | 65  
|         |                                                                                                              |                                                                                                                           | Note 2: Changes in Operations and Non-Operating Items |    | 71  
|         |                                                                                                              |                                                                                                                           | Note 3:NewsdayandHoy, New York Charge                 |    | 74  
|         |                                                                                                              |                                                                                                                           | Note 4: Restructuring Charges                         |    | 76  
|         |                                                                                                              |                                                                                                                           | Note 5: Inventories                                   |    | 77  
|         |                                                                                                              |                                                                                                                           | Note 6: Goodwill and Other Intangible Assets          |    | 77  
|         |                                                                                                              |                                                                                                                           | Note 7: TMCT I and TMCT II                            |    | 79  
|         |                                                                                                              |                                                                                                                           | Note 8: Investments                                   |    | 81  
|         |                                                                                                              |                                                                                                                           | Note 9: Long-Term Debt                                |    | 83  
|         |                                                                                                              |                                                                                                                           | Note 10: Contracts Payable for Broadcast Rights       |    | 85  
|         |                                                                                                              |                                                                                                                           | Note 11: Fair Value of Financial Instruments          |    | 86  
|         |                                                                                                              |                                                                                                                           | Note 12: Commitments and Contingencies                |    | 86  
|         |                                                                                                              |                                                                                                                           |                                                       |    |     

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|PART II (continued)
|-------------------
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|9.                 
|9A.                
|PART III           
|10.                
|11.                
|12.                
|13.                
|14.                
|PART IV            
|15.                
|* * * * *          
|                   
|                   
|                   
|                   

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PART I

ITEM 1. BUSINESS.

Tribune Company ("Tribune" or the "Company") is a media and entertainment company. Through its subsidiaries, the Company is engaged in newspaper publishing,
television and radio broadcasting and entertainment. The Company was founded in 1847 and incorporated in Illinois in 1861. As a result of a corporate restructuring in 1968, the Company became a
holding company incorporated in Delaware. References in this report to "the Company" include Tribune Company and its subsidiaries, unless the context otherwise indicates. The information in this
Item 1 should be read in conjunction with the information contained in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Company's
consolidated financial statements and related notes thereto included in Item 8. Certain prior year amounts have been reclassified to conform with the 2004 presentation. These reclassifications
had no impact on reported prior year total revenues, operating profit or net income.

This
Annual Report on Form 10-K ("Form 10-K") contains certain forward-looking statements that are based largely on the Company's current
expectations. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in the
forward-looking statements. Such risks, trends and uncertainties, which in some instances are beyond the Company's control, include: changes in advertising demand, circulation levels, audience shares,
newsprint prices, cost of broadcast rights, interest rates, competition and other economic conditions; regulatory and judicial rulings; changes in accounting standards; adverse results from
litigation, governmental investigations or tax related proceedings or audits; the effect of labor strikes, lock-outs and negotiations; the effect of acquisitions, investments,
divestitures, derivative transactions and litigation on the Company's results of operations and financial condition; and the Company's reliance on third-party vendors for various services. Information
relating to the estimated cost of settlement withNewsdayandHoy, New York, advertisers is based
on facts available as of the date of this report. The words "believe," "expect," "anticipate," "estimate," "could," "should," "intend" and similar expressions generally identify forward-looking
statements. Readers are cautioned not to place undue reliance on such forward-looking statements, which are being made as of the date of this filing. The Company undertakes no obligation to update any
forward-looking statements, whether as a result of new information, future events or otherwise.

Significant Events

On March 21, 2003, the Company acquired the stock of KPLR-TV, St. Louis, and the assets of KWBP-TV, Portland, Ore.,
from ACME Communications for a total of $275 million. The Company acquired the stock of KPLR-TV for $200 million in cash. The acquisition of the assets of KWBP-TV
was structured as a like-kind asset exchange for income tax purposes. It was funded with the remaining assets of the Denver radio station group (KKHK-FM, now known as
KQMT-FM) with an estimated fair market value of $55 million, plus $20 million in cash.

Business Segments

The Company's operations are divided into two industry segments: publishing and broadcasting and entertainment. These segments operate primarily in the United
States. Certain administrative activities are not included in either segment, but are reported as corporate. These segments reflect the way the Company sells its products to the marketplace, manages
operations and makes business decisions.

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The
following table sets forth operating revenues and profit information for each segment of the Company (in thousands):

|                                                            |                                | Fiscal Year Ended December |          
|----------------------------------------------------------- | ------------------------------ | -------------------------- | ---------
|
|Operating revenues:                                         |                                |                            |          
|                                                            | Publishing                     |                            | $        
|                                                            | Broadcasting and entertainment |                            |          
|                                                            |                                |                            |          
|Total operating revenues                                    |                                | $                          | 5,726,247
|                                                            |                                |                            |          
|Operating profit (loss) before restructuring charges:(1)    |                                |                            |          
|                                                            | Publishing                     |                            | $        
|                                                            | Broadcasting and entertainment |                            |          
|                                                            | Corporate expenses             |                            |          
|                                                            |                                |                            |          
|Total operating profit before restructuring charges         |                                | $                          | 1,218,289
|                                                            |                                |                            |          
|Operating profit (loss) including restructuring charges:(1) |                                |                            |          
|                                                            | Publishing                     |                            | $        
|                                                            | Broadcasting and entertainment |                            |          
|                                                            | Corporate expenses             |                            |          
|                                                            |                                |                            |          
|Total operating profit                                      |                                | $                          | 1,218,289
|                                                            |                                |                            |          

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The following table sets forth asset information for each industry segment (in thousands):

|             |                                | Fiscal Year Ended December
|------------ | ------------------------------ | --------------------------
|
|Assets:      |                                |                           
|             | Publishing                     |                           
|             | Broadcasting and entertainment |                           
|             | Corporate(1)                   |                           
|             |                                |                           
|Total assets |                                | $                         
|             |                                |                           

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The Company's results of operations, when examined on a quarterly basis, reflect the seasonality of the Company's revenues. Second and fourth
quarter advertising revenues are typically higher than first and third quarter revenues. Results for the second quarter reflect spring advertising revenues, while the fourth quarter includes
advertising revenues related to the holiday season. Fiscal years 2004, 2003 and 2002 each comprised 52 weeks.

Publishing

The publishing segment represented 72% of the Company's consolidated operating revenues in 2004. The combined average circulation of the Company's primary daily
newspapers was approximately 3.1 million and 3.2 million daily copies for the six months ended Sept. 30, 2004 and 2003, respectively. The combined average circulation of the
Company's primary daily newspapers was approximately 4.5 million and 4.7 million Sunday copies for the six months ended Sept. 30, 2004 and 2003,

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respectively.
The Company's primary daily newspapers are theLos Angeles Times,Chicago Tribune, Newsday, South Florida
Sun-Sentinel,Orlando Sentinel,The Baltimore
Sun,The Hartford Courant,The Morning Call,Daily
Press,The AdvocateandGreenwich Time.The Company's publishing segment manages
the websites of the Company's daily newspapers and television stations, as well as other branded sites targeting specific communities of interest. The Company also owns entertainment listings, a
newspaper syndication and media marketing company, a Chicago-area cable television news channel and other publishing-related businesses.

Operating
revenues for the Company's three largest newspapers, including their related businesses, for the last three years were as follows (in thousands):

|                          |                                 | Fiscal Year Ended December
|------------------------- | ------------------------------- | --------------------------
|
|Operating revenues:       |                                 |                           
|                          | Los Angeles Times(1)            |                           
|                          | Chicago Tribune(1)              |                           
|                          | Newsday(1)                      |                           
|                          | Other newspapers and businesses |                           
|                          |                                 |                           
|Total publishing revenues |                                 | $                         
|                          |                                 |                           

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The following table provides a breakdown of operating revenues for the publishing segment for the last three years (in thousands):

|             |            | Fiscal Year Ended December
|------------ | ---------- | --------------------------
|
|Advertising: |            |                           
|             | Retail     |                           
|             | National   |                           
|             | Classified |                           
|             |            |                           
|             |            | Total advertising         
|Circulation  |            |                           
|Other(1)     |            |                           
|             |            |                           
|Total        |            | $                         
|             |            |                           

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The following table sets forth information concerning the Company's advertising volume for its daily newspapers (in thousands):

|                          |                           | Fiscal Year Ended December
|------------------------- | ------------------------- | --------------------------
|
|Full run inches:          |                           |                           
|                          | Los Angeles Times         |                           
|                          | Chicago Tribune           |                           
|                          | Newsday                   |                           
|                          | Other daily newspapers(1) |                           
|                          |                           |                           
|Total full run inches     |                           | 20,488                    
|                          |                           |                           
|Part run inches:          |                           |                           
|                          | Los Angeles Times         |                           
|                          | Chicago Tribune           |                           
|                          | Newsday                   |                           
|                          | Other daily newspapers(1) |                           
|                          |                           |                           
|Total part run inches     |                           | 20,815                    
|                          |                           |                           
|Total advertising inches: |                           |                           
|Full run:                 |                           |                           
|                          | Retail                    |                           
|                          | National                  |                           
|                          | Classified                |                           
|                          |                           |                           
|                          | Total full run            |                           
|Part run                  |                           | 20,815                    
|                          |                           |                           
|Total                     |                           | 41,303                    
|                          |                           |                           
|Preprint pieces:          |                           |                           
|                          | Los Angeles Times         |                           
|                          | Chicago Tribune           |                           
|                          | Newsday                   |                           
|                          | Other daily newspapers(1) |                           
|                          |                           |                           
|Total                     |                           | 14,920,432                
|                          |                           |                           

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The following table sets forth information concerning the Company's paid circulation for its primary daily newspapers (in thousands):

|                           |  | Average Paid Circulation
For the Six Months Ended Sept. 30(1)
|-------------------------- |  | -------------------------------------------------------------
|
|
|Los Angeles Times          |  | 902                                                          
|Chicago Tribune            |  | 592                                                          
|Newsday(3)                 |  | 447                                                          
|South Florida Sun-Sentinel |  | 235                                                          
|Orlando Sentinel           |  | 248                                                          
|Baltimore Sun              |  | 272                                                          
|Other daily newspapers(4)  |  | 441                                                          
|                           |  |                                                              
|Total                      |  | 3,137                                                        
|                           |  |                                                              

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Each of the Company's newspapers operate independently to most effectively meet the needs of the area it serves. Local management establishes
editorial policies. The Company coordinates certain aspects of operations and resources in order to provide greater operating efficiency and economies of scale.

The
Company's newspapers compete for readership and advertising with other metropolitan, suburban and national newspapers, and also with television, radio, Internet services and other
media. Competition for newspaper advertising is based upon circulation levels, readership demographics, price, service and advertiser results, while competition for circulation is based upon the
content of the newspaper, service and price.

TheChicago Tribune,South Florida Sun-Sentinel, Orlando Sentinel,Daily
Press,The Morning Call, The AdvocateandGreenwich Timeare printed in
Company-owned production facilities. The Los Angeles Times, Newsday, The Baltimore SunandThe Hartford Courantare printed on Company-owned
presses in production facilities leased from an affiliate (see Note 7 to the Company's consolidated financial statements in Item 8). The principal raw material is newsprint. In 2004, the
Company's newspapers consumed approximately 910,000 metric tons of newsprint. Average newsprint prices increased 12% in 2004 from 2003. Average newsprint prices increased 4% and decreased 23% in 2003
and 2002, respectively.

The
Company is party to a contract with Abitibi Consolidated Inc., expiring in 2007, to supply newsprint based on market prices. Under the contract, the Company purchased 441,000
metric tons of newsprint in 2004, representing approximately 50% of the Company's newsprint purchases. The Company has agreed to purchase 450,000 metric tons each year from 2005 to 2007, subject to
certain limitations, at prevailing market prices at the time of purchase. The Company is in the process of negotiating an extension to this contract, which would extend its current agreement to 2009.

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Los Angeles Times and Related Businesses

TheLos Angeles Timeshas been published continuously since 1881. The newspaper has won 35 Pulitzer Prizes,
including five in 2004. It is published every morning and is one of the largest metropolitan
newspapers in the United States in circulation. The Los Angeles market ranks second in the nation in terms of households. In its primary circulation areas of Los Angeles, Orange, Ventura, San
Bernardino and Riverside counties, theLos Angeles Timescompetes for advertising and circulation with 16 local daily newspapers and three daily
national newspapers, with its largest local competitor having approximately 310,000 in average daily circulation. For the six-month period ended Sept. 30, 2004, the Los Angeles Timesranked 4th and
3rd in the country for average daily and Sunday circulation, respectively, according to ABC. Approximately 71% and 75%
of the paper's daily and Sunday circulation, respectively, was home delivered in 2004, with the remainder primarily sold at newsstands and vending boxes.

In
addition to the daily edition covering the Los Angeles metropolitan area, theLos Angeles Timespublishes daily Orange County,
San Fernando Valley, Inland Empire and Ventura County editions. Daily and semi-weekly community newspapers are either inserted into the paper in selected geographic areas or
distributed to homes and through vending boxes to provide targeted local news coverage. Los Angeles Times Communications, LLC, publisher of theLos Angeles
Times, also publishes a compact daily national edition that is distributed primarily in Washington, D.C. and New York. The company operates latimes.com, an online
version of the newspaper, which provides local, national and international news. Through its subsidiary, EZ Buy & EZ Sell Recycler Corporation, the company publishes a collection of 14
alternative classified papers in Southern California including titles such asRecycler,AutoBuys, Cycle & BoatBuys, Homes
and Open HousesandJobsand also operates Recycler.com, an online
version of the publications. The company owns 50% of California Independent Postal Systems ("CIPS"), which provides alternative distribution services for advertising preprints. MediaNews
Group, Inc. owns the other 50% of CIPS.

Chicago Tribune and Related Businesses

Founded in 1847, theChicago Tribuneis published every morning and primarily serves a nine-county
market in northern Illinois and Indiana. This market ranks third in the United States in number of households. TheChicago Tribunehas won 23
Pulitzer Prizes. For the six months ended Sept. 30, 2004, theChicago Tribuneranked 8th in average daily circulation and 5th in average Sunday
circulation in the country, based on ABC averages. TheChicago Tribune'sprincipal competitor is theChicago
Sun-Times. TheChicago Tribune'stotal advertising volume and operating revenues are estimated to be substantially
greater than those of theChicago Sun-Times. Approximately 81% of the paper's daily and 69% of its Sunday circulation is sold through home
delivery, with the remainder primarily sold at newsstands and vending boxes.

The Chicago Tribuneis published by Chicago Tribune Company, which also operates a number of related media businesses serving Chicagoland,
including the weekdayRedEyeedition and chicagotribune.com. Other businesses owned by Chicago Tribune Company include Tribune Direct Marketing, which
provides integrated and comprehensive direct mail services, and Chicagoland Publishing Company, which publishes a number of free guides in the real estate, automotive and help wanted categories.
Chicagoland Publishing oversees the monthly magazineChicago, which earned a 2004 National Magazine "Ellie" Award for general excellence. Chicago
Tribune Company offers commercial printing and delivery services for other publications.

Newsday and Related Businesses

Newsdayis published every morning and circulated primarily in Nassau and Suffolk counties on Long Island,
New York, and in the borough of Queens in New York City. The paper has been

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published
since 1940 and has won 17 Pulitzer Prizes. The New York metropolitan area ranks first among U.S. markets in terms of households. Newsdaycompetes with three major metropolitan newspapers,
daily regional editions of several national newspapers and numerous daily, weekly and
semiweekly local newspapers and free distribution newspapers. Approximately 64% of the paper's daily and 62% of its Sunday circulation is sold through home delivery, with the remainder primarily sold
at newsstands and vending boxes. See Note 3 to the Company's consolidated financial statements in Item 8 for a discussion of the charge recorded in 2004 related to the anticipated settlement
with advertisers regarding misstated circulation atNewsday.

Newsday, Inc.,
publisher ofNewsday, also publishesDistinction, a magazine serving
Long Island's households, issued eight times per year;Long Island Parents & Children,a magazine for families, issued eight times per year; and Business LI, a joint venture with the Long Island Association, published 12 times per year. Newsday, Inc. has several websites
including newsday.com and nynewsday.com, which are online versions of the newspaper. Newsday, Inc.'s subsidiary, Star Community Publishing Group, LLC, publishes 185 pennysaver editions
in Nassau and Suffolk counties on Long Island, New York, and in the boroughs of Queens, Brooklyn and Staten Island in New York City. Additionally, the results of amNewYork, a free daily
newspaper in New York City targeting young, urban commuters, are reported as a part of Newsday, Inc.

Other Newspapers

The Company's other primary daily newspapers areThe Baltimore Sun, South Florida Sun-Sentinel, Orlando Sentinel, The Hartford
Courant,Daily Press,The Morning Call,The
AdvocateandGreenwich Time. Each of these newspapers is published every morning.

The Baltimore Sun, Maryland's largest newspaper, has published a daily newspaper since 1837 and has won 15 Pulitzer Prizes. The Baltimore
market ranks 20th in the United States in number of households. For the six-month period ending Sept. 30, 2004,The Baltimore Sunwas
ranked 27th and 22nd for average daily and Sunday circulation, respectively, in the country, according to ABC.The Baltimore Suncompetes with The Washington Postin Anne Arundel and Howard counties, withThe Annapolis Capitalin Anne Arundel
County and withThe Carroll County Timesin Carroll County. It also competes with regional editions of national daily newspapers, as well as other local
dailies and
weeklies. Approximately 79% of the paper's daily and 64% of its Sunday circulation is sold through home delivery, with the remainder primarily sold at newsstands and vending boxes.

The
Baltimore Sun Company's subsidiaries, Patuxent Publishing and Homestead Publishing, publish 17 weekly newspapers throughout Anne Arundel, Baltimore, Carroll, Harford and
Howard counties. The largest of these weekly newspapers areThe Columbia Flier,The Towson Times, The Owings Mills
TimesandThe Aegis. The Baltimore Sun Company also operates a website, baltimoresun.com.

TheSouth Florida Sun-Sentinelis the major daily newspaper serving the Broward/South Palm Beach county market, leading in
both circulation and readership. In early 2004, theSouth Florida Sun-Sentinelincreased the size of its traditional geographic distribution
area when it launched the first phase of the expansion of its Palm Beach county edition. The paper has been published since 1910. The Miami/Fort Lauderdale metropolitan area, which includes Broward
and South Palm Beach counties, ranks 6th in the nation in terms of households. Approximately 72% of the paper's daily and 70% of its Sunday circulation is sold through home delivery, with the
remainder primarily sold at newsstands and vending boxes.

Sun-Sentinel
Company, publisher of theSouth Florida Sun-Sentinel, also serves the news and information needs of
South Florida through sun-sentinel.com, its breaking news and information website; southflorida.com, a South Florida entertainment website;el
Sentinel,a weekly Spanish language newspaper; weekly community newspapers; niche publications; and extensive television and radio

7

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partnerships,
including its close working relationship with Tribune Broadcasting's WBZL-TV, Miami, the WB Network affiliate serving South Florida.

Other
publications produced by Sun-Sentinel Company include:City & Shore, a bimonthly lifestyle magazine; City Link, an alternative weekly newspaper;Florida New Homes & Condo Guide, a comprehensive
bimonthly guide to South Florida real estate;Jewish Journal, a collection of weekly newspapers serving South Florida's Jewish community; and South Florida
Parenting, a monthly magazine providing parenting information and resources for local families.

TheOrlando Sentinelprimarily serves a six-county area in central Florida. It is the only major daily newspaper in the
Orlando market, although it competes with other Florida and national newspapers, as well as with other media. TheOrlando Sentinelhas been published
since 1876 and has won three Pulitzer Prizes. The Orlando/Daytona Beach/Melbourne market ranks 28th among U.S. markets in terms of households. Approximately 74% of the paper's daily and 69% of its
Sunday circulation is sold through home delivery, with the remainder primarily sold at newsstands and vending boxes.

Orlando
Sentinel Communications Company, publisher of theOrlando Sentinel, also publishesSentinel
Express, a free weekly publication used to distribute advertising and a sampling of newspaper content to non-subscribers. In addition to its newspaper website,
orlandosentinel.com, the company operates orlandocitybeat.com and go2orlando.com, and is a partner in the local weather supersite, orlandoweather.com. The company publishes the
free-distribution, weekly Spanish language newspaper,El Sentinel, and its companion website, elsentinel.com. The company's multimedia
portfolio also includes several free-distribution, niche products in the central Florida market includingJob Xtra, AutoFinderand New Homesmagazine.
Orlando Sentinel Communications also offers commercial printing services, direct marketing/direct mail services and delivery
services for other publications.

The Hartford Courant, published every morning, is the largest and most widely read newspaper in Connecticut. Founded in 1764, it is also
the oldest continuously published newspaper in the United States.The Hartford Couranthas won two Pulitzer Prizes. It is published in the state's
capital, Hartford, and serves the state's northern and central regions. The Hartford/New Haven market is the 45th largest U.S. market in terms of households. Hartford Courant Company has one of the
most extensive zoning operations in the country, publishing eight editions ofThe Hartford Courantzoned for local news and advertising. The company
also operates courant.com, Connecticut's leading online news website, and ctnow.com, a statewide entertainment website. Hartford Courant Company's subsidiaries include New Mass. Media, Inc., a
publisher of four weekly alternative newspapers in Connecticut and Massachusetts, and ValuMail, Inc., a shared-mail company that distributes advertising supplements to more than two
million households in Connecticut, Massachusetts, New York and Rhode Island.

Daily Pressis published daily, including Sunday, and serves the Virginia Peninsula market.Daily
Pressis the only major daily newspaper in its primary market, although it competes with other regional and national newspapers, as well as with other media. The Daily Pressmarket includes Newport News, Hampton, Williamsburg and eight other cities and counties. This market, together with Norfolk, Portsmouth and
Virginia Beach, is the 33rd largest U.S. market in terms of households. The Daily Press, Inc., publisher ofDaily Press, also owns The Virginia Gazette,which is published twice weekly and primarily serves Williamsburg, Va., and surrounding counties. In addition, Daily Pressowns and operates dailypress.com, as well as 7cities.com, an
entertainment website targeting young adults aged
18-34 years old.

The Morning Call, published since 1895, is the dominant regional newspaper for nine counties in eastern Pennsylvania and New Jersey.
Allentown-Bethlehem-Easton is the 61st largest U.S. market in terms of households. A group of 11 weekly newspapers,The Chronicles, is distributed with The Morning
Calland also to non-subscribers across three counties in eastern Pennsylvania and New Jersey. Free publications serve
recruitment and real estate markets. Subsidiaries of The Morning Call, Inc.,

8

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publisher
ofThe Morning Call, offer full service direct marketing and saturation coverage through non-subscriber distribution. In addition,
the company owns and operates mcall.com.

The AdvocateandGreenwich Timeprimarily serve the Stamford/Greenwich market in
southwestern Fairfield County, Conn.The Advocatehas won a Pulitzer Prize. The newspapers expanded operations in 2003 with an additional edition in
neighboring Norwalk.

Other Publishing Related Businesses

The Company also owns targeted publications including three editions of the Spanish language newspaper,Hoy. Hoy, New York, is a paid publication introduced in 1998;Hoy, Chicago, is a free publication introduced
in September 2003; andHoy, Los Angeles, is a free publication introduced in March 2004. See Note 3 to the Company's consolidated
financial statements in Item 8 for a discussion of the charge recorded in 2004 related to the anticipated settlement with advertisers regarding misstated circulation at Hoy, New York. The Spanish
language newspaper operates holahoy.com, a national Spanish language website. Hoyprovides news and features of interest to Hispanics.Hoy, New York,
serves the second largest
Hispanic market in the U.S.Hoy, Chicago, serves the interests of Chicago's 1.6 million Hispanics, the fourth largest Hispanic market in the U.S. Hoy,
Los Angeles, serves the largest Hispanic market in the U.S.

The
Company also owns Tribune Media Services, Inc. ("TMS"), which creates, aggregates and distributes news, information and entertainment content that reaches millions of users
through print, online and on-screen media. The TMS News and Features group licenses content from more than 1,200 writers, artists, newspaper and magazine publishers, and wire services to
roughly 4,000 media customers worldwide. The TMS Entertainment Products group creates TV and movie guide products for major media companies and consumers. The TMS TV Week Advertising Network
represents newspaper TV magazines in 42 of the top 50 U.S. markets, covering 30 million Nielsen metered households in the United States. TMS also reaches nearly nine million consumers worldwide
with its cable electronic program guides.

The
Company also operates CLTV, a regional 24-hour cable news channel serving Chicagoland. CLTV was launched in January 1993 and currently is available to more than
1.8 million cable households in the Chicago market.

Broadcasting and Entertainment

The broadcasting and entertainment segment represented 28% of the Company's consolidated operating revenues in 2004. At Dec. 26, 2004, the segment included
The WB Television Network ("The WB Network") affiliates located in New York, Los Angeles, Chicago, Philadelphia, Boston, Dallas, Washington, D.C., Atlanta, Houston,
Seattle, Miami, Denver, St. Louis, Portland, Indianapolis, San Diego, Hartford, New Orleans and Albany; the FOX Network television affiliates in Seattle, Sacramento, Indianapolis,
Hartford, Grand Rapids and Harrisburg; an ABC television affiliate in New Orleans; one radio station in Chicago; the Chicago Cubs baseball team; and Tribune Entertainment, a company that
develops and distributes first-run television programming for the Company's station group and national syndication.

9

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The
following table shows sources of operating revenues for the broadcasting and entertainment segment for the last three years (in thousands):

|                    |       | Fiscal Year Ended December
|------------------- | ----- | --------------------------
|
|Television(1)       |       | $                         
|Radio/entertainment |       |                           
|                    |       |                           
|                    | Total |                           
|                    |       |                           

---

10

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Television

In
2004, television contributed 85% of the broadcasting and entertainment segment's operating revenues. The Company's television stations compete for audience and advertising with other
television and radio stations, cable television and other media serving the same markets. Competition for audience and advertising is based upon various interrelated factors including programming
content, audience acceptance and price. Selected data for the Company's television stations is shown in the following table:

|                      |  | Market(1) |  |     |  |     |  |        |  |     |  |  
|--------------------- |  | --------- |  | --- |  | --- |  | ------ |  | --- |  | -
|
|WPIXNew York, NY     |  | 1         |  | 6.7 |  | 6.7 |  | 11-VHF |  | WB  |  | 7
|KTLALos Angeles, CA  |  | 2         |  | 5.0 |  | 5.0 |  | 5-VHF  |  | WB  |  | 8
|WGNChicago, IL       |  | 3         |  | 3.1 |  | 3.1 |  | 9-VHF  |  | WB  |  | 8
|WPHLPhiladelphia, PA |  | 4         |  | 2.7 |  | 1.3 |  | 17-UHF |  | WB  |  | 7
|WLVIBoston, MA       |  | 5         |  | 2.2 |  | 1.1 |  | 56-UHF |  | WB  |  | 7
|KDAFDallas, TX       |  | 7         |  | 2.1 |  | 1.0 |  | 33-UHF |  | WB  |  | 9
|WBDCWashington, D.C. |  | 8         |  | 2.0 |  | 1.0 |  | 50-UHF |  | WB  |  | 7
|WATLAtlanta, GA      |  | 9         |  | 1.9 |  | 0.9 |  | 36-UHF |  | WB  |  | 8
|KHWBHouston, TX      |  | 11        |  | 1.7 |  | 0.9 |  | 39-UHF |  | WB  |  | 9
|KCPQSeattle, WA      |  | 12        |  | 1.5 |  | 1.5 |  | 13-VHF |  | FOX |  | 8
|KTWBSeattle, WA      |  | 12        |  |    |  |    |  | 22-UHF |  | WB  |  | 8
|WBZLMiami, FL        |  | 17        |  | 1.4 |  | 0.7 |  | 39-UHF |  | WB  |  | 7
|KWGNDenver, CO       |  | 18        |  | 1.3 |  | 1.3 |  | 2-VHF  |  | WB  |  | 7
|KTXLSacramento, CA   |  | 19        |  | 1.2 |  | 0.6 |  | 40-UHF |  | FOX |  | 7
|KPLRSt. Louis, MO    |  | 21        |  | 1.1 |  | 1.1 |  | 11-VHF |  | WB  |  | 7
|KWBPPortland, OR     |  | 24        |  | 1.0 |  | 0.5 |  | 32-UHF |  | WB  |  | 7
|WTTVIndianapolis, IN |  | 25        |  | 1.0 |  | 1.0 |  | 4-VHF  |  | WB  |  | 7
|WXINIndianapolis, IN |  | 25        |  |    |  |    |  | 59-UHF |  | FOX |  | 7
|KSWBSan Diego, CA    |  | 26        |  | 0.9 |  | 0.5 |  | 69-UHF |  | WB  |  | 7
|WTICHartford, CT     |  | 27        |  | 0.9 |  | 0.5 |  | 61-UHF |  | FOX |  | 7
|WTXXHartford, CT     |  | 27        |  |    |  |    |  | 20-UHF |  | WB  |  | 7
|WXMIGrand Rapids, MI |  | 38        |  | 0.7 |  | 0.3 |  | 17-UHF |  | FOX |  | 7
|WPMTHarrisburg, PA   |  | 42        |  | 0.6 |  | 0.3 |  | 43-UHF |  | FOX |  | 5
|WGNONew Orleans, LA  |  | 43        |  | 0.6 |  | 0.3 |  | 26-UHF |  | ABC |  | 7
|WNOLNew Orleans, LA  |  | 43        |  |    |  |    |  | 38-UHF |  | WB  |  | 7
|WEWBAlbany, NY       |  | 55        |  | 0.5 |  | 0.3 |  | 45-UHF |  | WB  |  | 7

---

11

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Programming emphasis at the Company's stations is placed on network-provided shows, syndicated series, feature motion pictures, local and regional
sports coverage, news and children's programs. These stations acquire most of their programming from outside sources, including The WB Network and the FOX Network, although a significant amount is
produced locally or supplied by Tribune Entertainment (see "Radio/Entertainment"). WGN Cable ("WGN Superstation") programming is delivered by cable or satellite outside of Chicago and includes movies
and first-run programming. Contracts for purchased programming generally cover a period of one to five years, with payment also typically made over several years. The expense for
amortization of television broadcast rights in 2004 was $353 million, which represented approximately 26% of total television operating revenues.

12

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Average
audience share information for the Company's television stations for the past three years is shown in the following table:

|                              |  |     |  | Average Audience Share(1) |  
|----------------------------- |  | --- |  | ------------------------- | -
|
|
|WPIXNew York, NY             |  | WB  |  | 5.8                       | %
|KTLALos Angeles, CA          |  | WB  |  | 4.6                       |  
|WGNChicago, IL               |  | WB  |  | 7.0                       |  
|WPHLPhiladelphia, PA         |  | WB  |  | 4.0                       |  
|WLVIBoston, MA               |  | WB  |  | 3.5                       |  
|KDAFDallas, TX               |  | WB  |  | 6.4                       |  
|WBDCWashington, D.C.         |  | WB  |  | 4.4                       |  
|WATLAtlanta, GA              |  | WB  |  | 3.9                       |  
|KHWBHouston, TX              |  | WB  |  | 5.1                       |  
|KCPQSeattle, WA              |  | FOX |  | 5.8                       |  
|KTWBSeattle, WA              |  | WB  |  | 2.5                       |  
|WBZLMiami, FL                |  | WB  |  | 5.2                       |  
|KWGNDenver, CO               |  | WB  |  | 4.3                       |  
|KTXLSacramento, CA           |  | FOX |  | 5.8                       |  
|KPLRSt. Louis, MO            |  | WB  |  | 5.8                       |  
|KWBPPortland, OR             |  | WB  |  | 4.0                       |  
|WTTVIndianapolis, IN         |  | WB  |  | 3.8                       |  
|WXINIndianapolis, IN         |  | FOX |  | 5.7                       |  
|KSWBSan Diego, CA            |  | WB  |  | 3.8                       |  
|WTICHartford, CT             |  | FOX |  | 5.8                       |  
|WTXXHartford, CT             |  | WB  |  | 2.4                       |  
|WXMIGrand Rapids, MI         |  | FOX |  | 6.6                       |  
|WPMTHarrisburg, PA           |  | FOX |  | 5.8                       |  
|WGNONew Orleans, LA          |  | ABC |  | 4.6                       |  
|WNOLNew Orleans, LA          |  | WB  |  | 4.9                       |  
|WEWBAlbany, NY               |  | WB  |  | 2.0                       |  
|26 STATION UNWEIGHTED AVERAGE |  |     |  | 4.8                       |  

---

Average audience shares are shown on two bases: total market, which includes all channels, and in-market stations, which includes only
the major over-the-air stations. Average in-market shares are a more relevant benchmark to determine the stations' performance in their respective markets as they
compare the stations' performance to their primary programming and sales competition. In 2004, both the average total market share and the average in-market share for the 26 station group
declined versus 2003. In the three largest markets, the ratings decline was due in part to the rollout of Nielsen's Local People Meters ("LPMs"). LPMs have tended to reduce the overall share of
broadcast television as compared to cable television and, within the broadcast television universe, disadvantage stations like Tribune's that target younger audiences. The stations were also affected
by lower WB Network prime-time ratings and by some audience erosion due to a lack of any major new syndicated programming.

13

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Radio/Entertainment

In 2004, radio/entertainment operations contributed 15% of the broadcasting and entertainment segment's operating revenues. On March 21, 2003, the Company
transferred the remaining assets of the Denver radio station group (KKHK-FM, now known as KQMT-FM), with an estimated fair market value of $55 million, plus
$20 million in cash to ACME Communications in exchange for the assets of KWBP-TV, Portland. On July 24, 2002, the Company transferred certain assets of the Denver radio
station group (KOSI-FM and KEZW-AM) with a value of $125 million to Entercom Communications Corp. in exchange for the assets of WTTV-TV, Indianapolis, and
its satellite station, WTTK-TV in Kokomo, Indiana, which Entercom acquired from Sinclair Broadcast Group for $125 million. WGN-AM, Chicago, is the only remaining radio
station owned by the Company. Selected information for WGN-AM, Chicago, is shown in the following table:

|                |  | Format                          |  | Frequency |  | National Market Rank(1) |  | Number of Operating Stations in Market(2) |  | Audience Share(3) |  
|--------------- |  | ------------------------------- |  | --------- |  | ----------------------- |  | ----------------------------------------- |  | ----------------- | -
|WGN-AM, Chicago |  | Personality/Infotainment/Sports |  | 720-AM    |  | 3                       |  | 40                                        |  | 6.2               | %

---

Entertainment includes Tribune Entertainment Company ("Tribune Entertainment") and the Chicago Cubs baseball team. The Chicago Cubs were acquired
in 1981. Cubs games are broadcast on WGN-TV and WGN-AM. Tribune Entertainment is a leading distributor of programming in the United States syndicated television, cable
television and ancillary markets. Tribune Entertainment produces its own programs, which it distributes together with programming licensed from third parties. For the 2004-2005 television
season, Tribune Entertainment syndicates approximately 11.5 hours of television shows per week, the majority of which air on the Company's 26 television stations.

In
2004, Tribune Entertainment distributed their television series productions of "Beastmaster," "Andromeda," "Mutant X," "US Farm Report" and "Earth Final Conflict." In addition, they
have entered into a variety of distribution, production, and advertiser sales relationships with such major suppliers as DreamWorks SKG for the exclusive domestic syndication and ad sales of their
film library, FremantleMedia, Hearst Entertainment, MGM Television, Carlton America, and NBC/ Universal Television. These partnerships comprise over 380 television and theatrical motion pictures and
more than 600 episodes of various television series and specials including "South Park," "Family Feud," "Soul Train," "Ron Hazelton's House Calls," "Pet Keeping with Marc Morrone," and "Fine Living:
Homes and Hideaways."

Tribune
Studios, a subsidiary of Tribune Entertainment, manages a 10.5-acre studio production lot in Hollywood. Management of the site includes facilities rental of nine
state-of-the art digital sound stages and associated production office space.

Investments

The Company has investments in several public and private companies. See Note 8 to the Company's consolidated financial statements in Item 8 for further
discussion of the Company's cost and equity method investments.

The
Company's principal equity method investments currently include The WB Network, CareerBuilder, Classified Ventures, TV Food Network, Comcast Sports Network, CrossMedia Services, TMCT
I and TMCT II. The WB Network provides the Company's WB affiliate television stations with

14

---



original
prime-time and children's programming. CareerBuilder, an online recruiting company formed in 2000, is owned equally by the Company, Knight-Ridder, Inc. and Gannett
Co., Inc. Classified Ventures is a network of automotive and real estate classified advertising websites. TV Food Network is a 24-hour cable/satellite television network focusing on
food and entertaining. Comcast Sports Network is a 24-hour cable/satellite television network formed in 2003, which began programming in the fall of 2004, focusing on Chicago sports teams.
CrossMedia Services was jointly acquired in May 2004 with Gannett Co., Inc. and Knight-Ridder, Inc. CrossMedia Services transforms traditionally print-based retail promotions into
search-based interactive formats. Each partner owns a one-third interest in CrossMedia Services. The Company's investments in TMCT I and TMCT II are further discussed in Note 7 to
the Company's consolidated financial statements in Item 8.

Non-Operating Items

The Company reported several non-operating items in 2004, 2003 and 2002, which included gains and losses resulting from sales of subsidiaries and
investments, changes in the fair values of the Company's PHONES derivatives and related investment, the early retirement of debt, settlement of insurance claims related to Sept. 11, 2001,
write-downs of investments and income tax settlement adjustments. These non-operating items are further discussed in Note 2 to the Company's consolidated financial statements in
Item 8.

Governmental Regulation

Various aspects of the Company's operations are subject to regulation by governmental authorities in the United States.

The
Company's television and radio broadcasting operations are subject to FCC jurisdiction under the Communications Act of 1934, as amended. FCC rules, among other things, govern the
term, renewal and transfer of radio and television broadcasting licenses, and limit concentrations of broadcasting control inconsistent with the public interest. Federal law also regulates the rates
charged for political advertising and the quantity of advertising within children's programs. The Company is permitted to own both newspaper and broadcast operations in the Chicago market by virtue of
"grandfather" provisions in the FCC regulations and in the Fort Lauderdale/Miami market by virtue of a temporary waiver of the television/newspaper cross-ownership rule.

Because
the Times Mirror acquisition in 2000 did not involve the transfer of any broadcast station licenses, FCC approval was not required to complete the transaction. Under the FCC's
television/newspaper cross-ownership rule in effect at the time of the merger, companies were generally prohibited from owning both a newspaper and a broadcast license in the same market. However, it
was also the FCC's policy to permit newly created television/newspaper combinations to be held until the next broadcast license renewal. As such, license renewals for three Tribune television
propertiesKTLA-TV, Los Angeles (renewal in 2006), WPIX-TV, New York (renewal in 2007) and WTIC-TV, Hartford (renewal in 2007)would be
affected by the Times Mirror acquisition under the old FCC media ownership rules. On June 2, 2003, the FCC adopted new media ownership rules, including a new television/newspaper
cross-ownership rule. The new rule would eliminate the cross-ownership prohibition entirely in markets with nine or more television stations and permit combinations of one newspaper and one television
station in markets having between four and eight television stations. Under this rule, the Company would be permitted to retain its newspaper and television operations in each of the five markets
where it owns bothNew York, Los Angeles, Chicago, South Florida and Hartford.

In
September 2003, the United States Court of Appeals for the Third Circuit stayed the effectiveness of the new media ownership rules pending the outcome of appeals by advocacy
groups challenging the new rules. In June 2004, the Third Circuit remanded the new rules to the FCC for

15

---



further
proceedings while keeping the stay in effect. On Jan. 28, 2005, the Company and other media companies filed a joint petition seeking United States Supreme Court review of the
June 2004 Third Circuit remand. If the new television/newspaper cross-ownership rule is not upheld or if other relief is not granted by the time the licenses expire, the Company will require
waivers to allow continued ownership of both newspapers and broadcast licenses in the Los Angeles, Hartford and New York markets. The Company has a temporary waiver, pending the outcome of the same
rulemaking proceeding, in connection with its 1997 acquisition of WBZL-TV, Miami, which is considered part of the market served by theSouth Florida
Sun-Sentinel, published in Fort Lauderdale.

Congress
removed national limits on the number of broadcast stations a licensee may own in 1996. However, federal law continues to limit the number of radio and television stations a
single owner may own in a local market, and caps the percentage of the national television audience that may be reached by a licensee's television stations in the aggregate at 39%. The local ownership
rules allow, under certain conditions, common ownership of two television stations and certain radio/television combinations. In 2001, the Company acquired television station WTXX-TV,
Hartford, pursuant to a so-called "failing station" waiver allowing common ownership of WTIC-TV, Hartford, and WTXX-TV, Hartford.

Television
and radio broadcasting licenses are subject to renewal by the FCC, at which time they may be subject to petitions to deny the license renewal applications. At Dec. 26,
2004, the Company had FCC authorization to operate 26 television stations and one AM radio station. At Dec. 26, 2004, the Company had four license renewal applications pending before the FCC
(WBDC-TV, Washington, D.C., WBZL-TV, Miami, WATL-TV, Atlanta, and WGN-AM, Chicago). On Feb. 1, 2005, the Company filed license renewal
applications for WGNO-TV and WNOL-TV, New Orleans.

The
FCC has approved technical standards and channel assignments for digital television ("DTV") service. DTV permits broadcasters to transmit video images with higher resolution than
existing analog signals. Operators of full-power television stations have each been assigned a second channel for DTV while they continue analog broadcasts on the original channel. After
the transition is complete, broadcasters will be required to return one of the two channels to the FCC and transmit exclusively in digital format. By law, the transition to DTV is to occur by
Dec. 31, 2006, subject to extension under certain circumstances. Conversion to digital transmission is requiring all television broadcasters, including those owned by the Company, to invest in
digital equipment and facilities. At Dec. 26, 2004, all of the Company's television stations were DTV compliant.

The
FCC has not yet issued final regulations governing some aspects of DTV operation. These include the obligations of cable television systems and other multichannel video providers to
carry DTV signals and additional "public interest" obligations that may be imposed on broadcasters' use of the digital spectrum.

From
time to time, the FCC revises existing regulations and policies in ways that could affect the Company's broadcasting operations. In addition, Congress from time to time considers
and adopts substantive amendments to the governing communications legislation. The Company cannot predict what regulations or legislation may be proposed or finally enacted or what effect, if any,
such regulations or legislation could have on the Company's broadcasting operations. See Item 3, "Legal Proceedings" for a discussion of pending FCC rule review.

Employees

The average number of full-time equivalent employees of the Company in 2004 was 23,200, approximately 600 less than the average for 2003, primarily
due to the elimination of approximately 600 positions in its publishing segment in 2004.

16

---



During
2004, the Company's publishing segment employed approximately 19,600 full-time equivalent employees, about 18% of whom were represented by unions covered under 19
labor contracts. Contracts with unionized employees of the publishing segment expire at various times through December 2007.

The
broadcasting and entertainment segment had an average of about 3,400 full-time equivalent employees in 2004. Approximately 29% of these employees were represented by
unions covered under 21 labor contracts. Contracts with unionized employees of the broadcasting and entertainment segment expire at various times through July 2007.

Executive Officers of the Company

Information with respect to the executive officers of the Company as of Feb. 18, 2005, is set forth below. Their ages are indicated in parentheses. The
descriptions of the business experience of these
individuals include the principal positions held by them since February 2000. Unless otherwise indicated, all references to positions are to officers of the Company.

Dennis
J. FitzSimons (54)
Chairman (since January 2004), Chief Executive Officer (since January 2003) and President (since July 2001); Chief Operating Officer from July 2001 until
December 2002; Executive Vice President from January 2000 until July 2001; President of Tribune Broadcasting Company* until January 2003.

Donald
C. Grenesko (56)
Senior Vice President/Finance and Administration.

Crane
H. Kenney (42)
Senior Vice President, General Counsel and Secretary since May 2000; Vice President, General Counsel and Secretary until May 2000.

Thomas
D. Leach (44)
Senior Vice President/Development since February 2005; Vice President/Development from February 2004 until February 2005; Vice President and Chief Financial Officer of Tribune
Broadcasting Company* from March 2001 until January 2004; Vice President/Development until February 2001.

Luis
E. Lewin (56)
Senior Vice President/Human Resources since May 2000; Vice President/Human Resources until May 2000.

R.
Mark Mallory (54)
Vice President and Controller.

Patrick
J. Mullen (49)
President, Tribune Broadcasting Company* since January 2003; President, Tribune Television (a division of Tribune Broadcasting Company*) from March 2001 until January 2003; Group
Vice President, Tribune Television until March 2001.

Ruthellyn
M. Musil (53)
Senior Vice President/Corporate Relations since February 2004; Vice President/Corporate Relations until February 2004.

Scott
C. Smith (54)
President of Tribune Publishing Company* since January 2005; Chief Operating Officer of Tribune Publishing Company* from November 2004 until January 2005; President of Chicago
Tribune Company* until November 2004.

---

17

---



Available Information

The Company maintains an Internet website at www.tribune.com where the Company's Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K and all amendments to those reports are available without charge, as soon as reasonably practicable following the time that
they are filed with or furnished to the Securities and Exchange Commission.

18

---





ITEM 2. PROPERTIES.

The corporate headquarters of the Company are located at 435 North Michigan Avenue, Chicago, Illinois. The general character, location and approximate size of the
principal physical properties used by the Company on Dec. 26, 2004, are listed below. In total, the Company owns or leases transmitter sites, parking lots and other land aggregating
approximately 1,102 acres in 97 separate locations. In addition to those properties listed below, the Company owns or leases an aggregate of approximately 2,890,000 square feet of office and
production space in 302 locations. The Company also owns Wrigley Field, the 39,600-seat stadium used by the Chicago Cubs baseball team. The Company considers its various properties to be
in good condition and suitable for the purposes for which they are used.

|                                |                                                                                  | Approximate Area
in Square Feet
|------------------------------- | -------------------------------------------------------------------------------- | -------------------------------
|
|
|Publishing:                     |                                                                                  |                                
|                                | Printing plants, business and editorial offices, and warehouse
space located in: |                                
|                                |                                                                                  | Los Angeles, CA                
|                                |                                                                                  | Chicago, IL                    
|                                |                                                                                  | Melville, NY                   
|                                |                                                                                  | Baltimore, MD                  
|                                |                                                                                  | Hartford, CT                   
|                                |                                                                                  | Orlando, FL                    
|                                |                                                                                  | Deerfield Beach, FL            
|                                |                                                                                  | Costa Mesa, CA                 
|                                |                                                                                  | Irwindale, CA                  
|                                |                                                                                  | Allentown, PA                  
|                                |                                                                                  | Chatsworth, CA                 
|                                |                                                                                  | Newport News, VA               
|                                |                                                                                  | Northlake, IL                  
|                                |                                                                                  | Fort Lauderdale, FL            
|                                |                                                                                  | Oakbrook, IL                   
|                                |                                                                                  | Stamford, CT                   
|                                |                                                                                  | Miller Place, NY               
|                                |                                                                                  | Sorrento, FL                   
|                                |                                                                                  | Glens Falls, NY                
|                                |                                                                                  | Bel Air, MD                    
|                                |                                                                                  | Columbia, MD                   
|                                |                                                                                  | Greenwich, CT                  
|                                |                                                                                  | Williamsburg, VA               
|Broadcasting and entertainment: |                                                                                  |                                
|                                | Business offices, studios and transmitters located in:                           |                                
|                                |                                                                                  | Los Angeles, CA                
|                                |                                                                                  | Chicago, IL                    
|                                |                                                                                  | New York, NY                   
|                                |                                                                                  | Indianapolis, IN               
|                                |                                                                                  | Seattle, WA                    
|                                |                                                                                  | Greenwood Village, CO          
|                                |                                                                                  | New Orleans, LA                
|                                |                                                                                  | Maryland Heights, MO           
|                                |                                                                                  | Atlanta, GA                    
|                                |                                                                                  |                                

19

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| |  | Houston, TX      |  | 36,000 |  |      
| |  | ---------------- |  | ------ |  | ------
| |  | Dallas, TX       |  | 33,000 |  |      
| |  | San Diego, CA    |  |       |  | 26,000
| |  | Hartford, CT     |  |       |  | 26,000
| |  | Boston, MA       |  | 25,000 |  |      
| |  | Philadelphia, PA |  | 21,000 |  | 4,000 
| |  | Sacramento, CA   |  | 24,000 |  |      
| |  | Grand Rapids, MI |  | 21,000 |  |      
| |  | Hollywood, FL    |  | 20,000 |  |      
| |  | York, PA         |  | 20,000 |  |      
| |  | Washington, DC   |  |       |  | 13,000
| |  | Beaverton, OR    |  | 14,000 |  |      

---

ITEM 3. LEGAL PROCEEDINGS.

The Company and its subsidiaries are defendants from time to time in actions for matters arising out of their business operations. In addition, the Company and
its subsidiaries are involved from time to time
as parties in various regulatory, environmental and other proceedings with governmental authorities and administrative agencies.

On
Feb. 11, 2004, a purported class action lawsuit was filed in New York Federal Court by certain advertisers ofNewsdayand Hoy, New York, alleging that
they were overcharged for advertising as a result of inflated circulation numbers at these two publications. The purported
class action also alleges that entities that paid aNewsdaysubsidiary to deliver advertising flyers were overcharged. On July 21, 2004, another
lawsuit was filed in New York Federal Court by certain advertisers ofNewsdayalleging damages resulting from inflated Newsdaycirculation numbers as well
as federal and state antitrust violations. On Oct. 8, 2004, a third lawsuit was filed in New York State Court
by a formerNewsdayadvertiser alleging damages resulting from inflatedNewsdaycirculation numbers. The
Oct. 8, 2004 lawsuit has been settled and the Company intends to vigorously defend the other two suits.

On
June 17, 2004, the Company publicly disclosed that it would reduce its reported circulation for bothNewsdayand Hoy, New York, for the 12-month
period ending Sept. 30, 2003 and the six-month period ending March 31, 2004. The
circulation adjustments were the result of a review of reported circulation atNewsdayandHoy, New
York, conducted by the Company's internal audit staff and the ABC. Subsequent to the June 17th disclosure, the Company continued its internal review and found additional
misstatements for these time periods, as well as misstatements that impacted the 12-month period ending Sept. 30, 2002. On Sept. 10, 2004, the Company announced additional
revisions to the circulation figures forNewsdayandHoy, New York, for the 12-month period
ending Sept. 30, 2003 and the six-month period ending March 31, 2004. In November 2004, ABC released its audit reports for NewsdayandHoy,
New York, for the 12-month period ending Sept. 30, 2003. ABC's
circulation audits atNewsdayandHoy, New York, for the six-month periods ending
March 31, 2004 and Sept. 30, 2004 are ongoing.

20

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As
a result of misstatements of reported circulation atNewsdayandHoy, New York, the
Company recorded a pretax charge of $35 million in the second quarter of 2004 as its estimate of the probable cost to settle with advertisers based upon facts available at July 30, 2004,
the date of the Company's second quarter 2004 Form 10-Q filing. Since that date, the Company found additional circulation misstatements, which increased the cost to settle with
advertisers. As a result, the Company recorded an additional pretax charge of $55 million in the third quarter of 2004 to increase the estimate of the probable cost to settle with NewsdayandHoy, New York, advertisers to a total of $90 million. The Company will continue to
evaluate the adequacy of this charge on an ongoing basis (see Note 3 to the Company's consolidated financial statements in Item 8).

In
addition, the Securities and Exchange Commission, the United States Attorney for the Eastern District of New York and the Nassau County District Attorney are conducting inquiries into
the circulation practices atNewsdayandHoy, New York. The Company is cooperating fully with these
inquiries. At the date of this report, the Company cannot predict with certainty the outcome of these inquiries.

On
July 12, 2004, ABC announced that it was censuringNewsdayandHoy,
New York, for improper circulation practices. As part of the censure, ABC will be auditingNewsdayand Hoy, New York, every six months, instead
of annually, through the six-month period ending Sept. 30, 2005. In addition, NewsdayandHoy, New York, will not be able to publish their
six-month circulation
statistics prior to the completion of the ABC audits for the six-months ending March 31, 2005. Finally,Newsdayand Hoy, New York, were required
to submit a plan to ABC for correcting their circulation practices. The Company submitted the corrective plan to ABC
in October 2004 and has been working with ABC to fully comply with the terms of the censure.

ABC's
annual circulation audits at the Company's other newspapers are ongoing. In addition, during the third quarter of 2004, the Company's internal auditors began reviews of the
circulation practices at all of the Company's other print publications. The internal audit reviews have been completed for all of the Company's paid daily newspapers. The reviews for Chicagomagazine
and other non-paid and weekly newspapers are expected to be completed during the first half of 2005. To date, the Company's
internal reviews have found that circulation practices at the Company's other daily newspapers are sound and that no material adjustments are required to be made to previously reported circulation
numbers.

In
March 1997, the Company acquired Renaissance Communications Corp., a publicly traded company that owned six television stations, for $1.1 billion in cash. The stations
acquired were KDAF-TV, Dallas, WBZL-TV, Miami, KTXL-TV, Sacramento, WXIN-TV, Indianapolis, WTIC-TV, Hartford, and WPMT-TV,
Harrisburg. The FCC granted a 12-month waiver of its rule prohibiting television/newspaper cross-ownership in the same market, which relates to the WBZL-TV, Miami, television
station and theSouth Florida Sun-Sentinelnewspaper. In March 1998, the FCC granted the Company a waiver extension to allow
continued ownership of both WBZL-TV, Miami, and theSouth Florida Sun-Sentinelnewspaper until the FCC's rule review has
concluded. As discussed below, the new television/newspaper cross-ownership rule adopted by the FCC in June 2003 permits Tribune to own the newspapers and broadcast licenses in all of its
current cross-owned markets, including South Florida. However, also as discussed below, the new television/newspaper cross-ownership rule is presently the subject of a legal challenge pending in the
United States Court of Appeals for the Third Circuit. If the new television/newspaper cross-ownership rule is not upheld or if other relief is not granted, the Company will require a waiver to allow
continued ownership of both WBZL-TV, Miami, and theSouth Florida Sun-Sentinel.

In
March 2000, as a result of the Times Mirror merger, the Company acquired theLos Angeles Times, Newsday,The Baltimore
Sun,The Hartford Courant, The Morning Call,The Advocate,Greenwich Timeand
several smaller newspapers. Because the Times Mirror acquisition did not involve the transfer

21

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of
any broadcast station licenses, approval of the FCC was not required to complete the transaction. Under the FCC's television/newspaper cross-ownership rule in effect at the time of the merger,
companies were generally prohibited from owning both a newspaper and a broadcast license in the same market. However, it was also the FCC's policy to permit newly created television/newspaper
combinations to be held until the next broadcast license renewal. As such, license renewals for three Tribune television propertiesKTLA-TV, Los Angeles (renewal in 2006),
WPIX-TV, New York, (renewal in 2007) and WTIC-TV, Hartford (renewal in 2007), would be affected by the Times Mirror acquisition under the old FCC media ownership rules. If the
new television/newspaper cross-ownership rule is not upheld or if other relief is not granted by the time the licenses are due for renewal, the Company will require waivers to allow continued
ownership of both newspapers and broadcast licenses in the Los Angeles, Hartford and New York markets.

In
2001, the Company received FCC authorization to operate television station WTXX-TV, Hartford. The FCC granted a so-called "failing station" waiver to allow
common ownership of WTIC-TV, Hartford, and WTXX-TV, Hartford. In addition, the FCC granted a temporary six-month waiver of the newspaper-broadcast ownership
prohibition. The temporary waiver was extended for an additional six months in February 2002, and in August 2002, the Company filed a request for a further extension. The waiver
continues pending FCC action on the request for further extension. If the new television/newspaper cross-ownership rule is upheld, additional waivers will not be required to allow continued ownership
of both WTIC-TV, Hartford, and WTXX-TV, Hartford, andThe Hartford Courant.

On
June 2, 2003, the FCC adopted new media ownership rules, including a new television/newspaper cross-ownership rule. The new rule would eliminate the cross-ownership prohibition
entirely in markets with nine or more television stations and permit combinations of one newspaper and one television station in markets having between four and eight television stations. Under this
rule, the Company would be permitted to retain its newspaper and television operations in each of the five markets where it owns bothNew York, Los Angeles, Chicago, South Florida and
Hartford. In September 2003, the United States Court of Appeals for the Third Circuit stayed the effectiveness of the new media ownership rules pending the outcome of appeals by advocacy groups
challenging the new rules. In June 2004, the Third Circuit remanded the new rules to the FCC for further proceedings while keeping the stay in effect. On Jan. 28, 2005, the Company and
other media companies filed a joint petition seeking United States Supreme Court review of the June 2004 Third Circuit remand. The Company cannot predict with certainty the ultimate effect that
these proceedings will have on the media ownership rules.

During
1998, Times Mirror, which was acquired by the Company in 2000, disposed of its Matthew Bender and Mosby subsidiaries in separate tax-free reorganizations. While the
Company
strongly believes that these transactions were completed on a tax-free basis, the Internal Revenue Service ("IRS") has audited the transactions and disagreed with the position taken by
Times Mirror. In 2001, the Company received an IRS adjustment to increase Times Mirror's 1998 taxable income by approximately $1.6 billion. If the IRS prevails, the Company's federal and state
income tax liability would be approximately $600 million, plus interest. As of Dec. 26, 2004, the interest on the proposed taxes would be approximately $332 million. The Company
intends to vigorously defend its position and filed a petition in U.S. Tax Court on Nov. 8, 2002 to contest the IRS position. In December 2004, the Company presented its position in U.S.
Tax Court. The Company does not expect to receive the Court's decision before the fourth quarter of 2005.

A
tax reserve of $180 million, plus $66 million of interest, relating to these transactions is included in "other obligations" on the consolidated balance sheets. Times
Mirror established the $180 million tax reserve in 1998 when it entered into the transactions based on its assessment, along with its tax advisors, of the amount needed to resolve a dispute
with the IRS. The Company evaluates the adequacy of this reserve on a periodic basis. The Company has maintained this initial reserve as no new information has become available which would warrant a
change in that reserve.

22

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The
Company does not believe that any other matters or proceedings presently pending will have a material adverse effect on its consolidated financial position, results of operations or
liquidity.

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

Not applicable.

23

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

The Company's common stock is presently listed on the New York, Chicago and Pacific stock exchanges. The high and low sales prices of the common stock by
fiscal quarter for the two most recent fiscal years, as reported on the New York Stock Exchange Composite Transactions list, were as follows:

|       |  | 2004 |       | 2003
|------ |  | ---- | ----- | ----
|
|
|First  |  | $    | 53.00 |     
|Second |  |      | 51.90 |     
|Third  |  |      | 45.85 |     
|Fourth |  |      | 44.32 |     

At Feb. 18, 2005, there were 6,805 holders of record of the Company's common stock. Quarterly cash dividends declared on common stock were $.12 per share
for each quarter during 2004 and $.11 per share for each quarter during 2003. Total cash dividends declared on common stock by the Company were $155 million for 2004 and $137 million for
2003. The Company announced in February 2005 that its quarterly cash dividends would be $.18 per share in 2005.

In
2000, the Company's Board of Directors authorized the Company to repurchase $2.5 billion of its common stock. Through Dec. 26, 2004, the Company repurchased
44 million shares of its common stock at a cost of $1.9 billion under this authorization. Repurchases, by fiscal period, for 2004 were as follows (in thousands, except average price):

|                                        |  | Shares
Repurchased |  | Average
Price |       | Total Number of
Shares Repurchased |        | Value of Shares
that May Yet be
Repurchased
|--------------------------------------- |  | ------------------ |  | ------------- | ----- | ---------------------------------- | ------ | -------------------------------------------
|Period 1 (5 weeks ended Feb. 1, 2004)   |  |                   |  | $             |      |                                    | 28,719 |                                            
|Period 2 (4 weeks ended Feb. 29, 2004)  |  | 411                |  |               | 50.51 |                                    | 29,130 |                                            
|Period 3 (4 weeks ended March 28, 2004) |  | 1,157              |  |               | 49.92 |                                    | 30,287 |                                            
|Period 4 (4 weeks ended April 25, 2004) |  | 1,536              |  |               | 49.01 |                                    | 31,823 |                                            
|Period 5 (4 weeks ended May 23, 2004)   |  | 5,098              |  |               | 47.74 |                                    | 36,921 |                                            
|Period 6 (5 weeks ended June 27, 2004)  |  | 4,329              |  |               | 47.51 |                                    | 41,250 |                                            
|Period 7 (5 weeks ended Aug. 1, 2004)   |  | 634                |  |               | 45.49 |                                    | 41,884 |                                            
|Period 8 (4 weeks ended Aug. 29, 2004)  |  |                   |  |               |      |                                    | 41,884 |                                            
|Period 9 (4 weeks ended Sept. 26, 2004) |  | 397                |  |               | 41.21 |                                    | 42,281 |                                            
|Period 10 (4 weeks ended Oct. 24, 2004) |  | 790                |  |               | 42.45 |                                    | 43,071 |                                            
|Period 11 (4 weeks ended Nov. 21, 2004) |  |                   |  |               |      |                                    | 43,071 |                                            
|Period 12 (5 weeks ended Dec. 26, 2004) |  | 1,174              |  |               | 42.58 |                                    | 44,245 |                                            

ITEM 6. SELECTED FINANCIAL DATA.

Selected financial data for the years 1994 through 2004 is contained under the heading "Eleven Year Financial Summary" on pages 104 and 105 and is derived from
financial statements for those years. The information contained in the "Eleven Year Financial Summary" is not necessarily indicative of the results of operations to be expected for future years, and
should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Item 7 and the consolidated financial statements and related
notes thereto included in Item 8 of this Form 10-K which were audited by the Company's independent registered public accounting firm, PricewaterhouseCoopers LLP.

24

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion presents the significant factors that have affected the businesses of Tribune Company and its subsidiaries (the "Company") over the last
three years. This commentary should be read in conjunction with the Company's consolidated financial statements and "Eleven Year Financial Summary," which are also presented in this
Form 10-K. Certain prior year amounts have been reclassified to conform with the 2004 presentation. These reclassifications had no impact on reported prior year total revenues,
operating profit or net income.

FORWARD-LOOKING STATEMENTS

The discussion contained in this Item 7 (including, in particular, the discussion under "Overview," "Liquidity and Capital Resources-2005 Financial
Assumptions"), the information contained in Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," and the information contained in the subsequent notes to the consolidated
financial statements, contain certain forward-looking statements that are based largely on the Company's current expectations. Forward-looking statements are subject to certain risks, trends and
uncertainties that could cause actual results and achievements to differ materially from those expressed in the forward-looking statements. Such risks, trends and uncertainties, which in some
instances are beyond the Company's control, include: changes in advertising demand, circulation levels, audience shares, newsprint prices, cost of broadcast rights, interest rates, competition and
other economic conditions; regulatory and judicial rulings; changes in accounting standards; adverse results from litigation, governmental investigations or tax related proceedings or audits; the
effect of labor strikes, lock-outs and negotiations; the effect of acquisitions, investments, divestitures, derivative transactions and litigation on the Company's results of operations
and financial condition; and the Company's reliance on third-party vendors for various services. Information relating to the estimated cost of settlement with NewsdayandHoy, New York, advertisers is based on facts available as of the date of this report. The
words "believe," "expect," "anticipate," "estimate," "could," "should," "intend" and similar expressions generally identify forward-looking statements. Readers are cautioned not to place undue
reliance on such forward-looking statements, which are being made as of the date of this filing. The Company undertakes no obligation to update any forward-looking statements, whether as a result of
new information, future events or otherwise.

OVERVIEW

Tribune Company is a media and entertainment company, operating primarily in the United States, that conducts its operations through two business segments:
publishing and broadcasting and entertainment. These segments reflect the manner in which the Company sells its products to the marketplace, manages its operations and makes business decisions. The
Company's media operations are principally in major metropolitan areas of the United States and compete against similar media and other types of media on both a local and national basis.

Publishing
currently consists primarily of 11 daily newspapers, which include related businesses such as interactive websites. Publishing represented 72% of the Company's consolidated
revenues in 2004. About 78% of publishing revenues were derived from advertising. These revenues were generated from the sale of advertising space in published issues of the newspapers and on
interactive websites. Approximately 16% of publishing revenues were generated from the sales of newspapers to individual subscribers or to sales outlets, which re-sell the newspapers. The
remaining 6% of revenues came from a variety of activities including the syndication of columns, features, information and comics to newspapers, commercial printing operations, sales of entertainment
listings and other publishing-related activities.

25

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Publishing
advertising revenues are comprised of three basic categories: retail, national and classified. Changes in advertising revenues are heavily correlated with changes in the level
of economic activity in the United States. Changes in Gross Domestic Product, consumer spending, auto sales, housing sales, unemployment rates, job creation, circulation levels and rates all impact
demand for advertising in the Company's newspapers. The Company's advertising revenues are subject to changes in these factors both on a national level and on a local level in its markets.

Significant
expense categories for publishing include compensation, newsprint and ink and other operating expenses. Compensation, which includes benefits expense, represented 41% of
publishing's consolidated operating expenses in 2004. Compensation expense is affected by many factors, including the level of merit increases, the number of full-time equivalent employees
and changes in the design and costs of the Company's various employee benefit plans. Newsprint and ink represented 14% of the 2004 operating expenses for publishing. The Company consumed approximately
910,000 metric tons of newsprint in 2004. Newsprint is a commodity and pricing can vary significantly between years. Other expenses comprised 45% of total operating expenses. These expenses are
principally for the distribution of the newspaper, promotional activities and other general and administrative expenses. These expenses are typically subject to less variability.

Broadcasting
and entertainment currently consists of 26 television stations, one radio station, the Chicago Cubs and Tribune Entertainment, a company that develops and distributes
first-run television programming. Broadcasting and entertainment represented 28% of the Company's consolidated revenues in 2004. About 82% of these revenues came from the sale of
advertising spots on its television stations. Changes in advertising revenues are heavily correlated with and influenced by changes in the level of economic activity in the United States. Changes in
Gross Domestic Product, consumer spending levels, auto sales, programming content, audience share and rates all impact demand for advertising on the Company's television stations. The Company's
advertising revenues are subject to changes in these factors both on a national level and on a local level in the markets in which it operates.

Significant
expense categories for broadcasting and entertainment include programming expense, compensation and other expenses. Programming expense represented 40% of 2004 expenses. The
level of programming expense is affected by the cost of programs available for purchase and the selection of programs aired by the Company's television stations. Compensation expense represented 40%
of broadcasting and entertainment's 2004 expenses and is impacted by the same factors as noted for publishing. Other expenses represented 20% of total operating expenses and are for promotional
activities and other station operating expenses.

The
Company uses revenues and operating profit before restructuring charges as ways to measure the financial performance of its business segments. The Company uses average net paid
circulation for its newspapers and average audience share for its television stations as a means to measure its publishing and broadcasting and entertainment market shares and performance.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company's significant policies are summarized in Note 1 to the Company's consolidated financial statements in Item 8. These policies conform with
accounting principles generally accepted in the United States of America and reflect practices appropriate to the Company's businesses. The preparation of the Company's consolidated financial
statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
On an on-going basis, the Company evaluates its policies and estimates, including those related to income taxes, pension and postretirement benefits, broadcast rights, goodwill and other
intangible assets, self-insurance liabilities, accounts receivable allowances and stock-based compensation.

26

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Management
has discussed with the Audit Committee of the Board of Directors the development, selection and disclosure of the critical accounting policies and estimates and the
application of these policies and estimates. In addition, there are other items within the financial statements that require estimation, but are not deemed to be critical accounting policies and
estimates. Changes in the estimates used in these and other items could have a material impact on the financial statements.

Income Taxes

The Company accounts for certain income and expense items differently for financial reporting purposes than for income tax reporting purposes. The Company records
its tax liabilities based on estimates of the amount of taxes that will ultimately be paid. Since the Company's tax returns are subject to audit by the Internal Revenue Service ("IRS") and various
states, tax liabilities are maintained for estimated federal and state audit adjustments. The Company reduced its income tax expense and liabilities by a total of $25 million in 2003 and
$35 million in 2002 as a result of favorably resolving certain federal and state income tax issues.

During
1998, Times Mirror, which was acquired by the Company in 2000, disposed of its Matthew Bender and Mosby subsidiaries in separate tax-free reorganizations. While the
Company strongly believes that these transactions were completed on a tax-free basis, the IRS has audited the transactions and disagreed with the position taken by Times Mirror. In 2001,
the Company received an IRS adjustment to increase Times Mirror's 1998 taxable income by approximately $1.6 billion. If the IRS prevails, the Company's federal and state income tax liability
would be approximately $600 million, plus interest. As of Dec. 26, 2004, the interest on the proposed taxes would be approximately $332 million. The Company intends to vigorously
defend its position and filed a petition in U.S. Tax Court on Nov. 8, 2002 to contest the IRS position. In December 2004, the Company presented its position in U.S. Tax Court. The
Company does not expect to receive the Court's decision before the fourth quarter of 2005.

A
tax reserve of $180 million, plus $66 million of interest, relating to these transactions is included in "other obligations" on the consolidated balance sheets. Times
Mirror established the $180 million tax reserve in 1998 when it entered into the transactions based on its assessment, along with its tax advisors, of the amount needed to resolve a dispute
with the IRS. The Company evaluates the adequacy of this reserve on a periodic basis. The Company has maintained this initial reserve as no new information has become available which would warrant a
change in that reserve.

The
resolutions of the Company's tax issues are unpredictable and could result in tax liabilities that are significantly higher or lower than that which has been provided by the Company.

Pension and Postretirement Benefits

The Company provides defined benefit pension, postretirement health care and life insurance benefits to eligible employees under a variety of plans (see
Note 14 to the Company's consolidated financial statements in Item 8). Accounting for pension and postretirement benefits requires the use of several assumptions.

27

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Weighted
average assumptions used each year in accounting for pension benefits and other postretirement benefits were:

|                                                 |  | Pension Benefits |   | Other Postretirement Benefits |  
|------------------------------------------------ |  | ---------------- | - | ----------------------------- | -
|
|Discount rate for expense                        |  | 6.25             | % | 6.75                          | %
|Discount rate for obligations                    |  | 5.75             | % | 6.25                          | %
|Increase in future salary levels for expense     |  | 3.75             | % | 3.75                          | %
|Increase in future salary levels for obligations |  | 3.50             | % | 3.75                          | %
|Long-term rate of return on plans' assets        |  | 8.50             | % | 8.50                          | %

The Company expects to use a long-term rate of return assumption of 8.5% in 2005, consistent with the 2004 assumption. The
long-term rate of return assumption is subject to change due to the fluctuation of returns in the overall equity and debt markets. As of the date of this report, a 0.5% decrease in the
Company's long-term rate of return assumption would result in a $7 million increase in the Company's net pension expense. In 2004, the pension plans' assets earned a return of
approximately 12%. The Company will use a discount rate of 5.75% for expense in 2005.

At
Dec. 26, 2004 and Dec. 28, 2003, the Company's prepaid pension asset included an unrecognized net actuarial loss of $803 million and $774 million,
respectively. A significant portion of this net actuarial loss resulted from the difference between the Company's expected returns on plan assets and the actual losses on plan assets in 2002 and 2001.
Expected returns on plan assets were $158 million and $176 million in 2002 and 2001, respectively; actual losses were $161 million and $113 million, respectively. In
accordance with Financial Accounting Standard ("FAS") No. 87, "Employers' Accounting for Pensions," the actuarial loss will be recognized in net periodic pension expense over the estimated
average remaining service period of active employees expected to receive benefits. The Company's policy is to incorporate asset-related gains and losses into the asset value used to calculate the
expected return on plan assets and into the calculation of amortization of unrecognized net actuarial loss over a four-year period. As a result of all these factors, the Company expects to
incur net pension expense of $41 million in 2005 as compared to $15 million in 2004.

The
Company's pension plans' asset allocations at Dec. 26, 2004 and Dec. 28, 2003, were as follows (in millions):

|                        |  | Plan Assets |      
|----------------------- |  | ----------- | -----
|
|
|Equity securities       |  | $           | 1,146
|Fixed income securities |  |             | 332  
|Other                   |  |             | 81   
|                        |  |             |      
|Total                   |  | $           | 1,559
|                        |  |             |      

The Company's current 2005 target allocation for pension plans assets is 75% in equity securities and 25% in fixed income securities and other.

For
purposes of measuring 2004 postretirement health care costs, a 9.0% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2004. The rate was
assumed to decrease gradually to 5% for 2008 and remain at that level thereafter. For purposes of measuring health care obligations at Dec. 26, 2004, a 9.0% annual rate of increase in the per
capita cost of covered health care benefits was assumed for 2005. The rate was assumed to decrease gradually to 5% for 2009 and remain at that level thereafter. On Dec. 8, 2003, the Medicare
Prescription Drug, Improvement and Modernization Act of 2003 ("Act") was signed into law. The Act resulted in a

28

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$15 million
reduction in the accumulated other postretirement obligations for prior service costs and a $1 million reduction in net periodic postretirement benefit costs.

Assumed
health care cost trend rates have a significant effect on the amounts reported for health care plans. As of the date of this report, a 1% change in assumed health care cost trend
rates would have the following effects (in thousands):

|                               |  | 1% Increase |       | 1% Decrease |  
|------------------------------ |  | ----------- | ----- | ----------- | -
|Service cost and interest cost |  | $           | 655   |             | $
|Benefit obligation             |  | $           | 9,684 |             | $

The Company plans to contribute $6 million related to certain of its union and non-qualified pension plans and
$17 million to its other postretirement benefit plans in 2005.

Expected Future Benefit PaymentsThe following benefit payments, which reflect expected future service, as appropriate, are expected to be
paid (in thousands):

|          |  | Pension
Benefits |         | Other
Postretirement
Benefits
|--------- |  | ---------------- | ------- | -----------------------------
|2005      |  | $                | 83,587  |                              
|2006      |  |                  | 77,982  |                              
|2007      |  |                  | 79,721  |                              
|2008      |  |                  | 81,308  |                              
|2009      |  |                  | 83,163  |                              
|2010-2014 |  |                  | 454,209 |                              

Broadcast Rights

Broadcast rights consist principally of rights to broadcast syndicated programs, sports and feature films and are stated at the lower of cost or estimated net
realizable value. The total cost of these rights is recorded as an asset and a liability when the program becomes available for broadcast. Syndicated program rights that have limited showings are
generally amortized using an accelerated method as programs are aired. Sports and feature film rights are amortized using the straight-line method. The current portion of broadcast rights
represents those rights available for broadcast that are expected to be amortized in the succeeding year. At Dec. 26, 2004 and Dec. 28, 2003, the Company had broadcast rights assets of
$652 million and $649 million, respectively.

The
Company maintains an allowance for programming that is not expected to be aired by the end of the contract period. This allowance for excess programming inventory is based on a
program-by-program review of the Company's five-year broadcast plans and historical write-off trends. The total reserve balance at Dec. 26, 2004
and Dec. 28, 2003 was $5 million and $16 million, respectively. Actual write-offs in 2004 and 2003 were $12 million and $3 million, respectively. Future
write-offs can vary based on changes in consumer viewing trends and the availability and costs of other programming.

Goodwill and Other Intangible Assets

At the beginning of the 2002 fiscal year, the Company adopted FAS No. 142, "Goodwill and Other Intangible Assets," which requires that goodwill and certain
intangible assets no longer be amortized to earnings, but be reviewed periodically for impairment. Under FAS No. 142, the impairment review of goodwill and other intangible assets not subject
to amortization must be based generally on fair values.

As
a result of initially applying the new impairment provisions of FAS No. 142, the Company recorded a pretax charge of $271 million ($166 million
after-tax) in the first quarter of 2002. The

29

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charge
related to certain of the Company's newspaper mastheads ($226 million), a Federal Communications Commission ("FCC") license ($43 million) and a television network affiliation
agreement ($2 million), and is presented as the cumulative effect of a change in accounting principle in the Company's consolidated statements of income. The impairments were primarily the
result of decreases in operating revenues compared to forecasts prepared at the dates the respective companies were acquired.

The
estimated fair value of the reporting units to which goodwill is allocated is determined using multiples of operating cash flows for purposes of analyzing goodwill for impairment.
The estimated fair values of other assets subject to the annual impairment review, which include newspaper mastheads and FCC licenses, are calculated based on projected future discounted cash flow
analyses. The development of market multiples and cash flow projections used in the analyses requires the use of assumptions, including assumptions regarding revenue and market growth. The analyses
use discount rates based on specific economic factors in the publishing and broadcasting industries. These assumptions reflect the Company's best estimates, but these items involve inherent
uncertainties based on market conditions generally outside of the Company's control.

In
the fourth quarter of 2004, the Company elected to early adopt the provisions of the Financial Accounting Standards Board's Emerging Issues Task Force Topic
No. D-108, which requires the use of a direct valuation method for valuing intangible assets, such as FCC licenses, and reviewing them for impairment. Historically, the Company had
been using a residual valuation method to review its FCC licenses for impairment each year. A direct valuation method generally results in a lower valuation than does a residual valuation method. The
Company performed an impairment review of its FCC licenses for the years ended Dec. 28, 2003 and Dec. 29, 2002 using a residual method. No impairments were required as a result of the
analyses performed in these years. The effect of changing to a direct valuation method for the 2004 FCC licenses impairment review was a pretax charge of $29 million ($18 million
after-tax). The charge was recorded in the fourth quarter of 2004 as a cumulative effect of a change in accounting principle in the consolidated statements of income.

Upon
the adoption of FAS No. 142 at the beginning of fiscal 2002, the Company treated the intangible assets associated with network affiliation agreements as having indefinite
lives and stopped recording amortization expense on these assets. In December 2003, the staff of the Securities and Exchange Commission provided guidance regarding their accounting position in
this area indicating that network affiliation agreements should be amortized. As a result, the Company began amortizing these assets in the fourth quarter of 2003 using a 40-year life. The
Company believes the 40-year life is representative of the remaining expected useful life of the network affiliation intangibles. The provisions of FAS No. 142 required the Company
to perform an impairment analysis at the time of a change in the estimated useful life of an intangible asset which was previously not being amortized. No adjustment to the network affiliation
intangible assets was required as a result of this impairment review performed in the fourth quarter of 2003. Beginning in 2004, the Company no longer performs an annual test of the impairment of its
network affiliation agreements under FAS
No. 142, but will perform an impairment test if indicators of impairment are present, as required by FAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets."

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The Company's goodwill and other intangible assets at Dec. 26, 2004 consisted of the following (in thousands):

|                                                                 |                                | Gross
Amount |         | Accumulated
Amortization |   | Net
Amount
|---------------------------------------------------------------- | ------------------------------ | ------------ | ------- | ------------------------ | - | ----------
|Intangible assets subject to amortization                        |                                |              |         |                          |   |           
|Subscribers (useful life of 15 to 20 years)                      |                                | $            | 195,750 |                          | $ | (53,539   
|Network affiliation agreements (useful life of 40 years)         |                                |              | 290,320 |                          |   | (9,073    
|Other (useful life of 3 to 40 years)                             |                                |              | 23,277  |                          |   | (4,965    
|                                                                 |                                |              |         |                          |   |           
|Total                                                            |                                | $            | 509,347 |                          | $ | (67,577   
|                                                                 |                                |              |         |                          |   |           
|Goodwill and other intangible assets not subject to amortization |                                |              |         |                          |   |           
|Goodwill                                                         |                                |              |         |                          |   |           
|                                                                 | Publishing                     |              |         |                          |   |           
|                                                                 | Broadcasting and entertainment |              |         |                          |   |           
|                                                                 |                                |              |         |                          |   |           
|Total goodwill                                                   |                                |              |         |                          |   |           
|Newspaper mastheads                                              |                                |              |         |                          |   |           
|FCC licenses                                                     |                                |              |         |                          |   |           
|Tradename                                                        |                                |              |         |                          |   |           
|                                                                 |                                |              |         |                          |   |           
|Total                                                            |                                |              |         |                          |   |           
|                                                                 |                                |              |         |                          |   |           
|Total goodwill and other intangible assets                       |                                |              |         |                          |   |           
|                                                                 |                                |              |         |                          |   |           

Self-Insurance Liabilities

The Company self-insures for certain medical and disability benefits, workers' compensation costs and automobile and general liability claims. The
recorded liabilities for self-insured risks are calculated using actuarial methods and are not discounted. The liabilities include amounts for actual claims, claim growth and claims
incurred but not reported. Actual experience, including claim frequency and severity as well as health care inflation, could result in different liabilities than the amounts currently recorded. The
recorded liabilities for self-insured risks totaled $119 million and $114 million at Dec. 26, 2004 and Dec. 28, 2003, respectively.

Accounts Receivable Allowances

The Company's accounts receivable are primarily due from advertisers. Credit is extended based on an evaluation of a customer's financial condition and generally
collateral is not required. The Company maintains an allowance for uncollectible accounts, rebates and volume discounts. This allowance is determined based on historical write-off experience and any
known specific collectibility exposures. At Dec. 26, 2004 and Dec. 28, 2003, the Company's allowance for accounts receivable was $50 million and $49 million, respectively.

Stock-Based Compensation

The Company accounts for its stock-based compensation plans in accordance with Accounting Principles Board ("APB") Opinion No. 25 and related
interpretations. Under APB No. 25, no compensation expense is recorded because the exercise price of employee stock options equals the market price of the underlying stock on the date of grant.

Under
FAS No. 123, "Accounting for Stock-Based Compensation," as amended by FAS No. 148, compensation cost is measured at the grant date based on the estimated fair value
of the award and is recognized as compensation expense over the vesting period. For purposes of the disclosure required by

31

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FAS
No. 123, as amended by FAS No. 148, the Company uses the Black-Scholes option pricing model to determine the fair value of each option grant. The Black-Scholes model includes
assumptions regarding dividend yields, expected volatility, expected lives and risk-free interest rates. These assumptions reflect the Company's best estimates, but these items involve
inherent uncertainties based on market conditions generally outside of the control of the Company. As a result, if other assumptions had been used in the current period, pro forma stock-based
compensation, as calculated and disclosed under FAS No. 123 could have been materially impacted. Furthermore, if the Company uses different assumptions in future periods, pro forma stock-based
compensation expense could be materially impacted in future periods.

In
December 2004, the Financial Accounting Standards Board ("FASB") issued FAS No. 123R, "Share-Based Payment." FAS No. 123R supercedes APB No. 25, FAS
No. 123, as amended by FAS No. 148, and related interpretations. Under FAS No. 123R, compensation cost is measured at the grant date based on the estimated fair value of the award
and is required to be recognized as compensation expense over the vesting period. The Company plans to adopt FAS No. 123R in the third quarter of 2005. Note 1 to the Company's
consolidated financial statements in Item 8 presents the pro forma net income the Company would have recognized had compensation costs for the Company's incentive compensation plans been determined
consistent with FAS No. 123. The Company is in the process of analyzing the impact of the adoption of FAS No. 123R on its 2005 financial statements.

SIGNIFICANT EVENTS

Acquisitions

The Company had no material acquisitions in 2004. The Company completed acquisitions totaling approximately $275 million in 2003 and $162 million in
2002 for cash and other consideration, including the value of the Denver radio station group assets that were divested in exchange transactions during 2003 and 2002. The results of the acquired
companies are included in the consolidated statements of income since their respective dates of acquisition. None of these acquisitions were material in relation to the Company's consolidated
financial statements.

On
March 21, 2003, the Company acquired the stock of KPLR-TV, St. Louis, and the assets of KWBP-TV, Portland, Ore., from ACME Communications for a total of
$275 million. The Company acquired the stock of KPLR-TV for $200 million in cash. The acquisition of the assets of KWBP-TV was structured as a
like-kind asset exchange for income tax purposes. It was funded with the remaining assets of the Denver radio station group (KKHK-FM, now known as KQMT-FM) with an
estimated fair market value of $55 million, plus $20 million in cash. The Company has allocated $153 million, $42 million and $136 million of the purchase price to
FCC licenses, network affiliations and goodwill, respectively.

On
Aug. 1, 2002, the Company acquiredChicagomagazine from Primedia, Inc. for $35 million in cash. Chicagomagazine, a monthly publication,
serves as a reference guide for entertainment, dining, shopping and real estate for the Chicagoland area.

On
July 24, 2002, the Company transferred certain assets of the Denver radio station group (KOSI-FM and KEZW-AM) with a value of $125 million to
Entercom Communications Corp. ("Entercom") in exchange for the assets of WTTV-TV, Indianapolis, and its satellite station, WTTK-TV in Kokomo, Indiana, which Entercom acquired
from Sinclair Broadcast Group for $125 million. The transactions were structured as a like-kind asset exchange for income tax purposes.

Restructuring Charges

In 2002, the Company recorded pretax restructuring charges of $27 million ($17 million after-tax) for various cost reduction
initiatives. Approximately 300 full-time equivalent employee positions were

32

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eliminated
as a result of these initiatives. Pretax restructuring charges of $25 million were recorded at publishing, $1 million at broadcasting and entertainment and $1 million
at corporate during 2002. These restructuring charges, consisting primarily of compensation expense, are presented as a separate line item in the consolidated statements of income.

A
summary of the significant components of the pretax restructuring charges for the year ended Dec. 29, 2002, is as follows (in millions):

|                                        |  | Publishing |      | Broadcasting |   | Corporate |  | Total
|--------------------------------------- |  | ---------- | ---- | ------------ | - | --------- |  | -----
|Severance costs                         |  | $          | 18.2 |              | $ | 0.8       |  | $    
|Enhanced early retirement pension costs |  |            | 2.2  |              |   |          |  |      
|Asset disposals                         |  |            | 3.0  |              |   | 0.3       |  |      
|Lease termination costs                 |  |            | 1.6  |              |   |          |  |      
|                                        |  |            |      |              |   |           |  |      
|Total                                   |  | $          | 25.0 |              | $ | 1.1       |  | $    
|                                        |  |            |      |              |   |           |  |      

A summary of the activity with respect to the restructuring accrual is as follows (in millions):

|Restructuring accrual at Dec. 29, 2002 |          | $ | 11.1 |     
|-------------------------------------- | -------- | - | ---- | ----
|                                       | Payments |   |      | (7.6
|                                       |          |   |     
|Restructuring accrual at Dec. 28, 2003 |          | $ | 3.5  |     
|                                       | Payments |   |      | (1.6
|                                       |          |   |     
|Restructuring accrual at Dec. 26, 2004 |          | $ | 1.9  |     
|                                       |          |   |     

The remaining accrual is primarily for lease termination costs.

Non-Operating Items

Fiscal years 2004, 2003 and 2002 included several non-operating items. Non-operating items for 2004 are summarized as follows (in
millions, except per share data):

|                                                                      |  | Proceeds |    | Pretax
Gain (Loss) |   | After-tax
Gain (Loss) |   | Diluted
EPS |    
|--------------------------------------------------------------------- |  | -------- | -- | ------------------ | - | --------------------- | - | ----------- | ---
|Loss on changes in fair values of derivatives and related investments |  | $        |   |                    | $ | (18                   | ) | $           | (11
|Loss on early debt retirement                                         |  |          |   |                    |   | (141                  | ) |             | (87
|Gain on sales of subsidiaries and investments, net                    |  |          | 24 |                    |   | 20                    |   |             | 12 
|Loss on investment write-downs and other, net                         |  |          | 16 |                    |   | (6                    | ) |             | (4 
|                                                                      |  |          |    |                    |   |                       |   |             |    
|Total non-operating items                                             |  | $        | 40 |                    | $ | (145                  | ) | $           | (90
|                                                                      |  |          |    |                    |   |                       |   |             |    

In 2004, changes in the fair values of derivatives and related investments related entirely to the Company's PHONES and related Time Warner
investment. The $18 million non-cash pretax loss resulted from a $39 million increase in the fair value of the derivative component of the Company's PHONES, which was offset
by a $21 million increase in the fair value of 16 million shares of Time Warner common stock.

In
the second quarter of 2004, the Company redeemed all of its outstanding $400 million ($396 million net of unamortized discount) 7.45% debentures due 2009 and retired
$66 million ($64 million net of unamortized discount) of its 7.25% debentures due 2013 and $165 million ($160 million net of unamortized discount) of its 6.61% debentures
due 2027 through cash tender offers. The Company paid approximately $760 million to retire this debt and, as a result, recorded a

33

---



one-time,
pretax loss of $141 million in the second quarter of 2004. The Company funded these transactions with cash and the issuance of commercial paper.

In
2004, the gain on sales of subsidiaries and investments related primarily to the sale of the Company's 50% interest inLa
Opiniónfor $20 million, resulting in a pretax gain of $18 million.

Non-operating
items for 2003 are summarized as follows (in millions, except per share data):

|                                                                      |  | Proceeds |     | Pretax
Gain (Loss) |   | After-tax
Gain (Loss) |   | Diluted
EPS |    
|--------------------------------------------------------------------- |  | -------- | --- | ------------------ | - | --------------------- | - | ----------- | ---
|Gain on changes in fair values of derivatives and related investments |  | $        |    |                    | $ | 84                    |   | $           | 52 
|Gain on sales of subsidiaries and investments, net                    |  |          | 175 |                    |   | 148                   |   |             | 90 
|Loss on investment write-downs                                        |  |          |    |                    |   | (10                   | ) |             | (6 
|Gain on insurance recoveries                                          |  |          | 27  |                    |   | 22                    |   |             | 14 
|Other non-operating loss, net                                         |  |          |    |                    |   | (3                    | ) |             | (2 
|Income tax settlement adjustments                                     |  |          |    |                    |   |                      |   |             | 25 
|                                                                      |  |          |     |                    |   |                       |   |             |    
|Total non-operating items                                             |  | $        | 202 |                    | $ | 241                   |   | $           | 173
|                                                                      |  |          |     |                    |   |                       |   |             |    

In 2003, changes in the fair values of derivatives and related investments related entirely to the Company's PHONES and related Time Warner
investment. The $84 million non-cash pretax gain resulted from an $86 million increase in the fair value of 16 million shares of Time Warner common stock, which was
offset by a $2 million increase in the fair value of the derivative component of the PHONES. Also in 2003, the Company determined that the decline in fair value of certain public and private
investments was other than temporary and wrote down the investments to fair value. The write-downs totaled $10 million in 2003.

In
2003, the gain on sales of subsidiaries and investments resulted primarily from the divestiture of the Company's remaining Denver radio station KKHK-FM and the sale of the
Company's investment in The Golf Channel. KKHK-FM, now known as KQMT-FM, plus $20 million in cash, was exchanged for the assets of KWBP-TV, Portland, Ore.
and resulted in a pretax gain of $51 million. The sale of the investment in The Golf Channel resulted in a pretax gain of $48 million.

In
2003, the Company recorded a gain of $22 million as a result of settling the business interruption and property damage insurance claims filed by WPIX-TV, New York,
as a result of the events of Sept. 11, 2001.

In
2003, the Company reduced its income tax expense and liabilities by a total of $25 million as a result of favorably resolving certain state income tax issues.

Non-operating
items for 2002 are summarized as follows (in millions, except per share data):

|                                                                      |  | Proceeds |    | Pretax
Gain (Loss) |   | After-tax
Gain (Loss) |   | Diluted
EPS |    
|--------------------------------------------------------------------- |  | -------- | -- | ------------------ | - | --------------------- | - | ----------- | ---
|Loss on changes in fair values of derivatives and related investments |  | $        |   |                    | $ | (161                  | ) | $           | (98
|Gain on sales of subsidiaries and investments, net                    |  |          | 66 |                    |   | 106                   |   |             | 65 
|Loss on investment write-downs                                        |  |          |   |                    |   | (18                   | ) |             | (11
|Other non-operating gain, net                                         |  |          |   |                    |   | 10                    |   |             | 6  
|Income tax settlement adjustments                                     |  |          |   |                    |   |                      |   |             | 29 
|                                                                      |  |          |    |                    |   |                       |   |             |    
|Total non-operating items                                             |  | $        | 66 |                    | $ | (63                   | ) | $           | (9 
|                                                                      |  |          |    |                    |   |                       |   |             |    

In 2002, changes in the fair values of derivatives and related investments related entirely to the Company's PHONES and related Time Warner
investment. The $161 million non-cash pretax loss

34

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resulted
from a $331 million decrease in the fair value of 16 million shares of Time Warner common stock, which was offset by a $169 million decrease in the fair value of the
derivative component of the PHONES. Also in 2002, the Company determined that the decline in fair value of certain public and private investments was other than temporary and wrote down the
investments to fair value. The write-downs totaled $18 million in 2002.

In
July 2002, the Company exchanged two of its Denver radio stations, KOSI-FM and KEZW-AM, for the assets of two television stations, WTTV-TV,
Indianapolis, and its satellite station WTTK-TV, Kokomo, Indiana. The divestiture of the Denver radio station assets resulted in a pretax gain of $108 million.

In
2002, the Company favorably resolved certain federal and state income tax issues. As a result, the Company reduced its income tax expense and liabilities by a total of
$35 million. Approximately $29 million of the adjustment was classified as a non-operating item.

OTHER DEVELOPMENTS

On June 17, 2004, the Company publicly disclosed that it would reduce its reported circulation for both NewsdayandHoy, New York, for the 12-month period ending Sept. 30, 2003 and the
six-month period ending March 31, 2004. The circulation adjustments were the result of a review of reported circulation atNewsdayandHoy, New York, conducted by the Company's internal audit staff and the Audit Bureau of Circulations ("ABC"). Subsequent to the
June 17th disclosure, the Company continued its internal review and found additional misstatements for these time periods, as well as misstatements that impacted the
12-month period ending Sept. 30, 2002. On Sept. 10, 2004, the Company announced additional revisions to the circulation figures for NewsdayandHoy, New York, for the 12-month period ending Sept. 30, 2003 and the
six-month period ending March 31, 2004. In November 2004, ABC released its audit reports forNewsdayand Hoy, New York, for the 12-month period
ending Sept. 30, 2003. ABC's circulation audits at NewsdayandHoy, New York, for the six-month periods ending March 31, 2004 and
Sept. 30, 2004 are ongoing.

As
a result of misstatements of reported circulation atNewsdayandHoy, New York, the
Company recorded a pretax charge of $35 million in the second quarter of 2004 as its estimate of the probable cost to settle with advertisers based upon facts available at July 30, 2004,
the date of the Company's second quarter 2004 Form 10-Q filing. Since that date, the Company found additional circulation misstatements, which increased the cost to settle with
advertisers. As a result, the Company recorded an additional pretax charge of $55 million in the third quarter of 2004 to increase the estimate of the probable cost to settle with NewsdayandHoy, New York, advertisers to a total of $90 million. The Company will continue to
evaluate the adequacy of this charge on an ongoing basis (see Note 3 to the Company's consolidated financial statements in Item 8).

In
addition, the Securities and Exchange Commission, the United States Attorney for the Eastern District of New York and the Nassau County District Attorney are conducting inquiries into
the circulation practices atNewsdayandHoy, New York. The Company is cooperating fully with these
inquiries. At the date of this report, the Company cannot predict with certainty the outcome of these inquiries.

On
July 12, 2004, ABC announced that it was censuringNewsdayandHoy, New York,
for improper circulation practices. As part of the censure, ABC will be auditingNewsdayandHoy, New
York, every six months, instead of annually, through the six-month period ending Sept. 30, 2005. In addition,Newsdayand Hoy, New York, will not be
able to publish their six-month circulation statistics prior to the completion of the ABC audits for the
six-months ending March 31, 2005. Finally,NewsdayandHoy, New York, were required
to submit a plan to ABC for correcting their circulation practices. The Company submitted the corrective plan to ABC in October 2004 and has been working with ABC to fully comply with the terms
of the censure.

35

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ABC's
annual circulation audits at the Company's other newspapers are ongoing. In addition, during the third quarter of 2004, the Company's internal auditors began reviews of the
circulation practices at all of the Company's other print publications. The internal audit reviews have been completed for all of the Company's paid daily newspapers. The reviews for Chicagomagazine
and other non-paid and weekly newspapers are expected to be completed during the first half of 2005. To date, the Company's
internal reviews have found that circulation practices at the Company's other daily newspapers are sound and that no material adjustments are required to be made to previously reported circulation
numbers.

The
Company recorded a pretax charge of $41 million in 2004 related to the elimination of approximately 600 positions in 2004 in its publishing segment. These position
eliminations will result in annual compensation expense savings of approximately $41 million, $15 million of which was realized in the second half of 2004.

On
June 2, 2003, the FCC adopted new media ownership rules, including a new television/newspaper cross-ownership rule. The new rule would eliminate the cross-ownership prohibition
entirely in markets with nine or more television stations and permit combinations of one newspaper and one television station in markets having between four and eight television stations. Under this
rule, the Company would be permitted to retain its newspaper and television operations in each of the five markets where it owns bothNew York, Los Angeles, Chicago, South Florida and
Hartford. In September 2003, the United States Court of Appeals for the Third Circuit stayed the effectiveness of the new media ownership rules pending the outcome of appeals by advocacy groups
challenging the new rules. In June 2004, the Third Circuit remanded the new rules to the FCC for further proceedings while keeping the stay in effect. On Jan. 28, 2005, the Company and
other media companies filed a joint petition seeking United States Supreme Court review of the June 2004 Third Circuit remand. The Company cannot predict with certainty the ultimate effect that
these proceedings will have on the media ownership rules. See Item 3, "Legal Proceedings" for a discussion of pending FCC rule review.

36

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RESULTS OF OPERATIONS

The Company's fiscal year ends on the last Sunday in December. Fiscal years 2004, 2003 and 2002 each comprised 52 weeks.

Consolidated

The Company's consolidated operating results for 2004, 2003 and 2002 are shown in the table below.

|                                        |                                                                    |   |       |      |   |       |      | Change |      
|--------------------------------------- | ------------------------------------------------------------------ | - | ----- | ---- | - | ----- | ---- | ------ | -----
|
|Operating revenues                      |                                                                    | $ | 5,726 |      | $ | 5,595 |      | $      | 5,384
|Operating profit(1)                     |                                                                    | $ | 1,218 |      | $ | 1,361 |      | $      | 1,248
|Net income (loss) on equity investments |                                                                    | $ | 18    |      | $ | 6     |      | $      | (41  
|Net income:                             |                                                                    |   |       |      |   |       |      |        |      
|                                        | Before cumulative effect of change in accounting principle         |   | $     | 573  |   | $     | 891  |        | $    
|                                        | Cumulative effect of change in accounting principle,
net of tax(2) |   |       | (18  | ) |       |     |        |      
|                                        |                                                                    |   |       |      |   |       |      |        |      
|                                        | Net income                                                         |   | $     | 555  |   | $     | 891  |        | $    
|                                        |                                                                    |   |       |      |   |       |      |        |      
|Diluted earnings per share:             |                                                                    |   |       |      |   |       |      |        |      
|                                        | Before cumulative effect of change in accounting principle         |   | $     | 1.72 |   | $     | 2.61 |        | $    
|                                        | Cumulative effect of change in accounting principle,
net of tax(2) |   |       | (.05 | ) |       |     |        |      
|                                        |                                                                    |   |       |      |   |       |      |        |      
|                                        | Net income                                                         |   | $     | 1.67 |   | $     | 2.61 |        | $    
|                                        |                                                                    |   |       |      |   |       |      |        |      

---

Earnings Per Share ("EPS")Diluted EPS in 2004 was $1.67, down from $2.61 in 2003. The 2004 results included a net
non-operating loss of $.28 per diluted share, a charge of $.17 per diluted share related to the anticipated settlement with advertisers regarding misstated circulation at NewsdayandHoy,New York (see Note 3 to the Company's consolidated financial statements in Item
8), a charge of $.07 per diluted share for the elimination of approximately 600 positions in the publishing group and a one-time charge of $.05 per diluted share for the cumulative effect
of a change in accounting principle related to early adoption of FASB's Emerging Issues Task Force Topic No. D-108, which covers the use of a direct valuation method for intangible
assets such as FCC licenses. Diluted EPS in 2003 was $2.61, up from $1.30 in 2002. In 2003, the Company recorded a net non-operating gain of $.52 per diluted share. The 2002 results
included a net non-operating loss of $.02 per diluted share, a restructuring charge of $.05 per diluted share and a one-time $.50 loss per diluted share for the cumulative
effect of a change in accounting principle related to the initial application of the impairment provisions of FAS No. 142.

37

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Operating Revenues and ProfitConsolidated operating revenues, depreciation and amortization expense, and operating profit by business
segment were as follows:

|                                                        |                                    |   |       |       |   |       |       | Change |      
|------------------------------------------------------- | ---------------------------------- | - | ----- | ----- | - | ----- | ----- | ------ | -----
|
|Operating revenues                                      |                                    |   |       |       |   |       |       |        |      
|                                                        | Publishing                         |   | $     | 4,130 |   | $     | 4,037 |        | $    
|                                                        | Broadcasting and entertainment     |   |       | 1,596 |   |       | 1,558 |        |      
|                                                        |                                    |   |       |       |   |       |       |        |      
|Total operating revenues                                |                                    | $ | 5,726 |       | $ | 5,595 |       | $      | 5,384
|                                                        |                                    |   |       |       |   |       |       |        |      
|Depreciation and amortization expense                   |                                    |   |       |       |   |       |       |        |      
|                                                        | Publishing                         |   | $     | 179   |   | $     | 176   |        | $    
|                                                        | Broadcasting and entertainment     |   |       | 52    |   |       | 50    |        |      
|                                                        | Corporate expenses                 |   |       | 2     |   |       | 2     |        |      
|                                                        |                                    |   |       |       |   |       |       |        |      
|Total depreciation and amortization expense             |                                    | $ | 233   |       | $ | 228   |       | $      | 224  
|                                                        |                                    |   |       |       |   |       |       |        |      
|Operating profit (loss) before restructuring charges(1) |                                    |   |       |       |   |       |       |        |      
|                                                        | Publishing                         |   | $     | 726   |   | $     | 885   |        | $    
|                                                        | Broadcasting and entertainment     |   |       | 544   |   |       | 529   |        |      
|                                                        | Corporate expenses                 |   |       | (52   | ) |       | (53   | )      |      
|                                                        |                                    |   |       |       |   |       |       |        |      
|                                                        | Total before restructuring charges |   |       | 1,218 |   |       | 1,361 |        |      
|Restructuring charges                                   |                                    |   |      |       |   |      |       |        | (27  
|                                                        |                                    |   |       |       |   |       |       |        |      
|Total operating profit                                  |                                    | $ | 1,218 |       | $ | 1,361 |       | $      | 1,248
|                                                        |                                    |   |       |       |   |       |       |        |      

---

Consolidated operating revenues increased 2%, or $131 million, in 2004 due to growth in publishing and broadcasting and entertainment
revenues. Excluding all acquisitions and divestitures that affect comparability in the period presented ("on a comparable basis"), revenues were up 2%, or $117 million, in 2004, as a result of
improvements at both segments. Consolidated operating revenues increased 4%, or $211 million, in 2003 due to improvements in publishing and broadcasting and entertainment revenues. On a
comparable basis, revenues were up 3%, or $168 million, in 2003, primarily as a result of improvements at both segments.

Consolidated
operating profit decreased 11%, or $143 million, in 2004. On a comparable basis, consolidated operating profit fell 11%, or $146 million, in 2004. Publishing
operating profit fell 18%, or $159 million, in 2004. Publishing operating profit included a $90 million pretax charge related to the anticipated settlement with advertisers regarding
misstated circulation atNewsdayandHoy,New York (see Note 3 to the Company's consolidated
financial statements in Item 8), and a $41 million pretax charge for the elimination of approximately 600 positions. Excluding these charges, publishing operating expenses increased 4%
primarily due to increases in compensation and newsprint and ink expense. Publishing advertising revenues increased 4%, or $120 million, in 2004. Broadcasting and entertainment operating profit
increased 3%, or $15 million, in 2004 primarily due to increased television revenues and decreased programming expenses, partially offset by higher benefits expense.

Consolidated
operating profit increased 9%, or $113 million, in 2003. Operating profit for 2002 included $27 million of restructuring charges. Publishing operating profit,
before restructuring charges, rose 4%, or $34 million, in 2003 primarily due to increases in advertising revenues at Chicago, Fort Lauderdale, New York, Los Angeles and Orlando, partially
offset by an increase in compensation,

38

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circulation
and newsprint and ink expenses. Broadcasting and entertainment operating profit, before restructuring charges, increased 12%, or $59 million, in 2003 primarily due to increased
television revenues, partially offset by higher compensation and programming expenses. On a comparable basis, consolidated operating profit rose 8%, or $101 million, in 2003.

Operating ExpensesConsolidated operating expenses were as follows:

|                                                |  |   |       |  |   |       |  | Change |      
|----------------------------------------------- |  | - | ----- |  | - | ----- |  | ------ | -----
|
|Cost of sales                                   |  | $ | 2,708 |  | $ | 2,636 |  | $      | 2,564
|Selling, general and administrative             |  |   | 1,567 |  |   | 1,370 |  |        | 1,321
|Depreciation and amortization                   |  |   | 233   |  |   | 228   |  |        | 224  
|                                                |  |   |       |  |   |       |  |        |      
|Operating expenses before restructuring charges |  |   | 4,508 |  |   | 4,234 |  |        | 4,109
|Restructuring charges                           |  |   |      |  |   |      |  |        | 27   
|                                                |  |   |       |  |   |       |  |        |      
|Total operating expenses                        |  | $ | 4,508 |  | $ | 4,234 |  | $      | 4,136
|                                                |  |   |       |  |   |       |  |        |      

Cost of sales increased 3%, or $72 million, in 2004. On a comparable basis, cost of sales was up 3%, or $66 million, primarily due
to higher compensation and newsprint and ink expense, partially offset by a decline in programming expenses. Compensation expense rose 8%, or $77 million, in 2004 due to higher retirement plan
and other benefit expenses. On a comparable basis, compensation expense increased 8%, or $76 million, in 2004. Newsprint and ink expense rose 8%, or $35 million, in 2004 as average
newsprint cost per ton was up 12%, while consumption declined 3% in 2004. Programming expenses decreased 6%, or $25 million, in 2004 due to a decline in broadcast rights amortization expense
related to fewer program additions in 2004 compared to 2003. On a comparable basis, programming expenses declined 7%, or $30 million, in 2004.

Cost
of sales increased 3%, or $72 million, in 2003. On a comparable basis, cost of sales was up 2%, or $54 million, primarily due to higher compensation, newsprint and
ink, programming and newspaper distribution expenses. Compensation expense rose 2%, or $19 million, in 2003 due to higher player compensation for the Chicago Cubs, a decline in the pension
credit, salary increases and higher medical expenses. On a comparable basis, compensation expense increased 2%, or $16 million, in 2003. Newsprint and ink expense rose 4%, or
$16 million, in 2003 as average newsprint cost per ton was up 4%, while consumption remained flat in 2003. Programming expenses increased 4%, or $16 million, in 2003 due to a rise in
broadcast rights amortization expense related to acquisitions and the fall 2002 launch of "Will & Grace," and an increase in programming expenses at Tribune Entertainment. On a comparable
basis, programming expenses rose $2 million in 2003. Newspaper distribution expense was up 4%, or $13 million, in 2003.

Selling,
general and administrative expenses ("SG&A") were up 14%, or $197 million, in 2004. On a comparable basis, SG&A expenses increased 14%, or $193 million, in 2004.
The increases were primarily due to higher compensation and other SG&A expenses. Compensation expense increased 7%, or $53 million, in 2004 due to higher retirement plan and other benefit
expenses and a pretax charge of $41 million for the elimination of about 600 positions in the publishing group in 2004. On a comparable basis, compensation expense rose 7%, or
$51 million, in 2004. Other SG&A expenses included a pretax charge of $90 million in 2004 related to the anticipated settlement with advertisers regarding misstated circulation at NewsdayandHoy,New York (see Note 3 to the Company's consolidated financial statements in Item
8).

SG&A
expenses were up 4%, or $49 million, in 2003. On a comparable basis, SG&A expense increased 3%, or $38 million, in 2003 primarily due to increases in compensation and
promotion expenses related to circulation, partially offset by a decrease in advertising promotion expenses. Compensation expense increased 7%, or $46 million, in 2003 due to acquisitions, a
decline in the

39

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pension
credit, salary increases and higher medical expenses. On a comparable basis, compensation expense rose 6%, or $41 million, in 2003. Promotion expenses related to circulation rose 10%,
or $13 million, in 2003 primarily due to increased circulation promotional efforts. Advertising promotion expenses were down 14%, or $9 million, in 2003.

The
increase in depreciation and amortization of intangible assets in 2004 primarily reflects capital expenditures. The increase in depreciation and amortization of intangible assets in
2003 reflects acquisitions and capital expenditures as well as a change in the estimated useful lives of network affiliation intangible assets from indefinite lives to 40 years.

The
Company incurred pretax restructuring charges of $27 million in 2002 (see discussion in the "Restructuring Charges" section above).

Publishing

Operating Revenues and ProfitIn 2004, publishing contributed 72% of the Company's revenues and 60% of its operating profits. Daily
newspaper revenue is derived principally from advertising and circulation sales, which accounted for 78% and 16%, respectively, of the total publishing segment's revenues in 2004. Advertising revenue
is comprised of three basic categories: retail, national and classified. Newspaper advertising volume is categorized as either full run inches, part run inches or preprint pieces. Circulation revenue
results from the sale of newspapers. Other publications/services revenue accounted for 6% of the segment's total revenues in 2004 and includes syndication of editorial products, advertising placement
services, direct mail operations, cable television news programming, distribution of entertainment listings and other publishing-related activities.

Explanations
of certain categories used in this discussion are as follows:

Retail:

Display advertising from local retailers, such as department storesNational:

Display advertising by national advertisers that promote products or brand names on a nation-wide basisClassified:

Local advertising listed together and organized by type (including help wanted, real estate and automotive) and display advertisements in these same categoriesFull run inches:

Advertising appearing in all editions of a newspaperPart run inches:

Advertising appearing in only select editions or zones of a newspaper's marketPreprint pieces:

Advertising supplements prepared by advertisers and inserted into a newspaper


The table below presents publishing operating revenues, operating expenses before restructuring charges, and operating profit.

|                                                |  |   |       |  |   |       |  | Change |      
|----------------------------------------------- |  | - | ----- |  | - | ----- |  | ------ | -----
|
|Operating revenues                              |  | $ | 4,130 |  | $ | 4,037 |  | $      | 3,940
|Operating expenses before restructuring charges |  |   | 3,404 |  |   | 3,152 |  |        | 3,089
|                                                |  |   |       |  |   |       |  |        |      
|Operating profit before restructuring charges   |  |   | 726   |  |   | 885   |  |        | 851  
|Restructuring charges                           |  |   |      |  |   |      |  |        | (25  
|                                                |  |   |       |  |   |       |  |        |      
|Operating profit                                |  | $ | 726   |  | $ | 885   |  | $      | 826  
|                                                |  |   |       |  |   |       |  |        |      

40

---



Publishing operating revenues in 2004 increased 2% to $4.1 billion, up from $4.0 billion in 2003, due mainly to increases in
advertising revenue in Chicago, New York, Hartford, Los Angeles and for the Spanish language newspaper,Hoy. In 2003, publishing operating revenues were
up 2%, or $97 million, compared with 2002, primarily due to increases in advertising revenue in Chicago, Fort Lauderdale, New York and Los Angeles.

Operating
profit decreased 18%, or $159 million, in 2004 primarily due to the charges described in the following paragraph, higher retirement plan and other benefit expenses, an
increase in newsprint and ink expense and the impact of new publications. Operating profit, before restructuring charges, increased 4%, or $34 million, in 2003 mainly as a result of a 3%
increase in advertising revenues partially offset by a rise in total operating expenses, primarily compensation, circulation and newsprint and ink expenses.

As
a result of misstatements of reported circulation atNewsdayandHoy, New York, the
Company recorded a pretax charge of $90 million in 2004 as its estimate of the probable cost to settle with advertisers. The Company will continue to evaluate the adequacy of this charge on an
ongoing basis (see Note 3 to the Company's consolidated financial statements in Item 8). Also, in 2004, the Company recorded a pretax charge of $41 million related to the elimination of
approximately 600 positions. These position eliminations will result in annual compensation expense savings of approximately $41 million for the full year 2005, $15 million of which was
realized in the second half of 2004.

Operating RevenuesTotal publishing operating revenues, by classification, were as follows:

|                         |            |   |       |       |   |       |       | Change |      
|------------------------ | ---------- | - | ----- | ----- | - | ----- | ----- | ------ | -----
|
|Advertising              |            |   |       |       |   |       |       |        |      
|                         | Retail     |   | $     | 1,371 |   | $     | 1,310 |        | $    
|                         | National   |   |       | 791   |   |       | 781   |        |      
|                         | Classified |   |       | 1,068 |   |       | 1,019 |        |      
|                         |            |   |       |       |   |       |       |        |      
|Total advertising        |            |   | 3,230 |       |   | 3,110 |       |        | 3,024
|Circulation              |            |   | 644   |       |   | 664   |       |        | 671  
|Other                    |            |   | 256   |       |   | 263   |       |        | 245  
|                         |            |   |       |       |   |       |       |        |      
|Total operating revenues |            | $ | 4,130 |       | $ | 4,037 |       | $      | 3,940
|                         |            |   |       |       |   |       |       |        |      

Advertising Revenue and VolumeTotal operating revenues increased 2% in 2004 compared to 2003. Retail advertising revenue was up 5%, or
$61 million, for the year as increases in furniture/home furnishing, food and drug, auto supply, hardware/home improvement and health care were partially offset by a decline in general
merchandise and department stores. Preprint revenues, which were the primary contributor to retail advertising growth, rose 9%, or $54 million. Preprint revenue in Los Angeles and Chicago was
up 19% and 9%, respectively. National advertising revenue increased 1%, or $10 million, in 2004 as increases in financial and package goods categories were offset by decreases in
movies/entertainment and resorts. Classified advertising revenues increased 5%, or $49 million, in 2004 due to increases in help wanted and real estate of 12% and 7%, respectively, partially
offset by a 2% decrease in auto.

In
2003, retail advertising revenue was up 2%, or $31 million, for the year as increases in furniture/home furnishings, hardware, health care and other retailers were partially
offset by declines in electronics, food and department stores. Preprint revenues, which were the primary contributor to retail advertising growth, rose 9% led by an 11% increase in Chicago where a new
preprint facility for Sunday inserting became operational in early 2003. Preprint revenue in Fort Lauderdale, Los Angeles and New York was up 16%, 10% and 3%, respectively. National advertising
revenue rose 7%, or $55 million, in 2003 as increases in the hi-tech (primarily wireless), movies/entertainment, financial and

41

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auto
manufacturers categories were partially offset by decreases in travel/resorts. Classified advertising revenues were flat in 2003 due to a 9% decrease in help wanted, offset by increases in auto
and real estate of 3% and 10%, respectively.

Advertising
volume data for 2004, 2003 and 2002 was as follows:

|                              |            |        |        |        |        |        |        | Change |   
|----------------------------- | ---------- | ------ | ------ | ------ | ------ | ------ | ------ | ------ | --
|
|Full run inches               |            |        |        |        |        |        |        |        |   
|                              | Retail     |        | 6,394  |        | 6,067  |        | 6,261  |        | + 
|                              | National   |        | 3,990  |        | 3,839  |        | 3,583  |        | + 
|                              | Classified |        | 10,104 |        | 10,203 |        | 10,044 |        | - 
|                              |            |        |        |        |        |        |        |        |   
|Total full run inches         |            | 20,488 |        | 20,109 |        | 19,888 |        | +      | 2 
|Part run inches               |            | 20,815 |        | 19,622 |        | 18,929 |        | +      | 6 
|                              |            |        |        |        |        |        |        |        |   
|Total inches                  |            | 41,303 |        | 39,731 |        | 38,817 |        | +      | 4 
|                              |            |        |        |        |        |        |        |        |   
|Preprint pieces (in millions) |            | 14,920 |        | 13,147 |        | 12,421 |        | +      | 13

Full run advertising inches were up 2% in 2004 primarily due to increases in retail and national advertising inches. Full run retail advertising inches were up 5%
mainly due to increases related to the new Chicago and Los Angeles editions ofHoy. Full run national advertising inches were up 4% in 2004 primarily
due to increases related toHoy, partially offset by a decrease at Los Angeles. Full run classified advertising inches fell 1% for the year due to
declines at Fort Lauderdale, Los Angeles and Orlando, partially offset by increases related toHoy. Part run advertising inches were up 6% in 2004 due
to increases at Chicago andHoy. Preprint advertising pieces rose 13% for the year due to increases at Chicago, Los Angeles, Hoyand Fort Lauderdale.

In
2003, full run advertising inches increased 1% largely due to an increase in national advertising inches. Full run national advertising inches were up 7% due to increases at Los
Angeles, Chicago and Newport News. Full run classified advertising inches were up 2% for the year due to increases at Fort Lauderdale and Newport News. Full run retail advertising inches fell 3%
mainly due to declines at Fort Lauderdale, Baltimore, Los Angeles and New York. Part run advertising inches were up 4% in 2003 due to increases at Fort Lauderdale and Chicago. Preprint advertising
pieces rose 6% for the year, due to increases at Los Angeles and Chicago.

Circulation RevenuesCirculation revenues were down 3% in 2004, primarily due to declines at Los Angeles and New York. Circulation revenues
decreased 1% in 2003 primarily due to declines at New York and Fort Lauderdale.

Other RevenuesOther revenues are derived from advertising placement services; the syndication of columns, features, information and comics
to newspapers; commercial printing operations; delivery of other publications; direct mail operations; cable television news programming; distribution of entertainment listings; and other
publishing-related activities. Other revenues decreased 3%, or $7 million, in 2004 mainly due to decreases at New York and Orlando. Other revenues increased 7%, or $18 million, in 2003
primarily due to increases at Los Angeles and New York.

42

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Operating ExpensesOperating expenses, before restructuring charges, for 2004, 2003 and 2002 were as follows:

|                                                       |  |   |       |  |   |       |  | Change |      
|------------------------------------------------------ |  | - | ----- |  | - | ----- |  | ------ | -----
|
|Compensation                                           |  | $ | 1,410 |  | $ | 1,315 |  | $      | 1,280
|Circulation                                            |  |   | 518   |  |   | 503   |  |        | 477  
|Newsprint and ink                                      |  |   | 477   |  |   | 441   |  |        | 425  
|Promotion, excluding circulation                       |  |   | 66    |  |   | 62    |  |        | 71   
|Depreciation and amortization                          |  |   | 179   |  |   | 176   |  |        | 174  
|NewsdayandHoy, New York, charge                        |  |   | 90    |  |   |      |  |        |     
|Other                                                  |  |   | 664   |  |   | 655   |  |        | 662  
|                                                       |  |   |       |  |   |       |  |        |      
|Total operating expenses, before restructuring charges |  | $ | 3,404 |  | $ | 3,152 |  | $      | 3,089
|                                                       |  |   |       |  |   |       |  |        |      

---

Publishing operating expenses rose 8%, or $252 million, in 2004 primarily due to higher compensation expense, newsprint and ink expense and the NewsdayandHoy,New York, charge, as well as an increase in expenses related to new
publications. Compensation expense rose 7%, or $95 million, in 2004 primarily due to higher retirement plan and other benefit expenses and the $41 million charge related to the
elimination of approximately 600 positions. Newsprint and ink expense was up 8%, or $36 million, in 2004, as average newsprint prices increased 12%, while consumption decreased 3%. The Company
recorded a $90 million charge for the estimated cost to settle with advertisers as a result of the reduced reported circulation atNewsdayand Hoy,
New York (see Note 3 to the Company's consolidated financial statements in Item 8). The increase in operating expenses associated
with new publications, included in the above categories, totaled about $32 million in 2004.

Publishing
operating expenses, before restructuring charges, increased 2%, or $63 million, in 2003 primarily due to increases in compensation, circulation and newsprint and ink,
partially offset by a decrease in advertising promotion expenses. Compensation expense rose 3%, or $35 million, in 2003 due to a decline in the pension credit, salary increases and higher
medical expenses. Circulation expense was up 5%, or $26 million, for the year primarily due to higher newspaper distribution and promotion expenses. Newsprint and ink expense was up 4%, or
$16 million, as average newsprint cost per ton
increased 4% while consumption was flat. Advertising promotion expenses decreased 14%, or $9 million, in 2003.

Publishing
reported restructuring charges of $25 million in 2002.

Broadcasting and Entertainment

Operating Revenues and ProfitIn 2004, broadcasting and entertainment contributed 28% of the Company's revenues and 45% of its operating
profits. The following table presents broadcasting and entertainment operating revenues, operating expenses before restructuring charges and operating profit for television and radio/entertainment.
The Company's broadcasting operations at the end of 2004

43

---



included
26 television stations. Radio/entertainment includes Tribune Entertainment and the Chicago Cubs.

|                                                      |                     |   |       |       |   |       |       | Change |      
|----------------------------------------------------- | ------------------- | - | ----- | ----- | - | ----- | ----- | ------ | -----
|
|Operating revenues                                    |                     |   |       |       |   |       |       |        |      
|                                                      | Television          |   | $     | 1,353 |   | $     | 1,323 |        | $    
|                                                      | Radio/entertainment |   |       | 243   |   |       | 235   |        |      
|                                                      |                     |   |       |       |   |       |       |        |      
|Total operating revenues                              |                     | $ | 1,596 |       | $ | 1,558 |       | $      | 1,444
|                                                      |                     |   |       |       |   |       |       |        |      
|Operating expenses before restructuring charges       |                     |   |       |       |   |       |       |        |      
|                                                      | Television          |   | $     | 827   |   | $     | 816   |        | $    
|                                                      | Radio/entertainment |   |       | 225   |   |       | 213   |        |      
|                                                      |                     |   |       |       |   |       |       |        |      
|Total operating expenses before restructuring charges |                     | $ | 1,052 |       | $ | 1,029 |       | $      | 974  
|                                                      |                     |   |       |       |   |       |       |        |      
|Operating profit before restructuring charges         |                     |   |       |       |   |       |       |        |      
|                                                      | Television          |   | $     | 526   |   | $     | 507   |        | $    
|                                                      | Radio/entertainment |   |       | 18    |   |       | 22    |        |      
|                                                      |                     |   |       |       |   |       |       |        |      
|Total operating profit before restructuring charges   |                     |   | 544   |       |   | 529   |       |        | 470  
|Restructuring charges                                 |                     |   |      |       |   |      |       |        | (1   
|                                                      |                     |   |       |       |   |       |       |        |      
|Total operating profit                                |                     | $ | 544   |       | $ | 529   |       | $      | 469  
|                                                      |                     |   |       |       |   |       |       |        |      

Broadcasting and entertainment revenues rose 2%, or $38 million, in 2004 due mainly to increased television revenues. Excluding the
acquisitions of KPLR-TV, St. Louis (March 2003), and KWBP-TV, Portland, Ore. (March 2003) ("on a comparable basis"), broadcasting and entertainment revenues
increased 2%, or $24 million. Television revenues increased 2%, or $30 million, in 2004. Television advertising growth was driven by gains in the telecom, education and fast
food/restaurant categories, offset by softness in movies, retail and automobiles. On a comparable basis, television revenues were up 1%, or $16 million, due to higher advertising revenues.

Broadcasting
and entertainment revenues rose 8%, or $114 million, in 2003 due mainly to increased television revenues. On a comparable basis, broadcasting and entertainment
revenues increased 5%, or $71 million. Television revenues increased 8%, or $101 million, in 2003. On a comparable basis, television revenues were up 5%, or $59 million, due to
higher advertising revenues. Radio and entertainment revenues increased 6%, or $13 million, in 2003 due to a playoff related rise in revenue for the Chicago Cubs, partially offset by a decline
in radio revenues, mainly due to the disposition of the Denver stations.

Operating
profit for broadcasting and entertainment was up 3%, or $15 million, in 2004 due to increased television operating profit. On a comparable basis, operating profit was up
2%, or $12 million. Television operating profit rose 4%, or $19 million, in 2004 due to increased television revenues and lower programming expenses, partially offset by increased
benefits expense. On a comparable basis, television operating profit increased 3%, or $15 million. The 2004 decline in radio and entertainment operating profit primarily reflects the absence of
post-season revenues reported by the Chicago Cubs in 2003.

Operating
profit for broadcasting and entertainment, before restructuring charges, was up 12%, or $59 million, in 2003 primarily due to increases in television operating profit.
On a comparable basis, operating profit was up 10%, or $47 million due to higher revenues, partially offset by higher compensation and programming costs. Television operating profit, before
restructuring charges, rose 12%, or $54 million. On a comparable basis, television operating profit increased 9%, or $42 million.

44

---



Operating ExpensesOperating expenses, before restructuring charges, for 2004, 2003 and 2002 were as follows:

|                                                       |  |   |       |  |   |       |  | Change |    
|------------------------------------------------------ |  | - | ----- |  | - | ----- |  | ------ | ---
|
|Compensation                                           |  | $ | 421   |  | $ | 385   |  | $      | 359
|Programming                                            |  |   | 400   |  |   | 425   |  |        | 409
|Depreciation and amortization expense                  |  |   | 52    |  |   | 50    |  |        | 47 
|Other                                                  |  |   | 179   |  |   | 169   |  |        | 159
|                                                       |  |   |       |  |   |       |  |        |    
|Total operating expenses, before restructuring charges |  | $ | 1,052 |  | $ | 1,029 |  | $      | 974
|                                                       |  |   |       |  |   |       |  |        |    

Broadcasting and entertainment operating expenses increased 2%, or $23 million, in 2004. On a comparable basis, broadcasting and entertainment operating
expenses were up 1%, or $12 million, due to an increase in compensation and other expenses, partially offset by a decrease in programming expenses. Compensation expense increased 9%, or
$36 million, in 2004 due to higher retirement plan and other benefit expenses. On a comparable basis, compensation costs rose 9%, or $33 million. Other expenses were up 5%, or
$10 million, in 2004 due to higher selling and administrative costs. On a comparable basis, other expenses increased 4%, or $7 million. Programming expenses dropped 6%, or
$25 million, in 2004 due to a decline in broadcast rights amortization expense related to fewer program additions in 2004 compared to 2003. On a comparable basis, programming expenses decreased
7%, or $30 million.

Broadcasting
and entertainment operating expenses, before restructuring charges, increased 6%, or $55 million, in 2003. On a comparable basis, broadcasting and entertainment
operating expenses were up 3%, or $25 million, due to an increase in compensation and programming expenses. Compensation expense increased 7%, or $26 million, in 2003. On a comparable
basis, compensation costs rose 5%, or $17 million, due to higher player compensation for the Chicago Cubs, higher commissions and other salary increases. Programming expenses rose 4%, or
$16 million, due to an increase in broadcast rights amortization expense related to acquisitions and the fall 2002 launch of "Will & Grace," and a rise in programming expenses at Tribune
Entertainment. On a comparable basis, broadcast rights amortization decreased 1%, or $2 million.

Broadcasting
and entertainment reported $1 million in restructuring charges in 2002.

Equity Results

|                                        |  |   |    |  |   |   |  | Change
|--------------------------------------- |  | - | -- |  | - | - |  | ------
|
|Net income (loss) on equity investments |  | $ | 18 |  | $ | 6 |  | $     

---

Equity income totaled $18 million in 2004, an increase of $12 million from 2003. The increase was primarily due to additional equity
income from TV Food Network and the recognition of equity income from Comcast Sports Network, partially offset by increased equity losses from The WB Network.

Equity
income totaled $6 million in 2003, compared to a loss of $41 million in 2002. The 2002 loss included two one-time charges related to CareerBuilder. In
2002, the Company recorded its $7.5 million share of a restructuring charge for CareerBuilder and its $18 million share of CareerBuilder's tax liability resulting from its conversion to
a limited liability company in September 2002. Equity income for 2003 reflects the recognition of equity income from TV Food Network.

45

---



See
Note 7 to the Company's consolidated financial statements in Item 8 for discussion of the Company's investments in TMCT I and TMCT II which involve
agreements with two of the Company's largest shareholders, Chandler Trust No. 1 and Chandler Trust No. 2.

Interest Income and Expense

|                     |  |   |      |   |   |      |   | Change |     
|-------------------- |  | - | ---- | - | - | ---- | - | ------ | ----
|
|Interest income      |  | $ | 3    |   | $ | 6    |   | $      | 9   
|Interest expense     |  |   | (153 | ) |   | (198 | ) |        | (213
|                     |  |   |      |   |   |      |   |        |     
|Net interest expense |  | $ | (150 | ) | $ | (192 | ) | $      | (204
|                     |  |   |      |   |   |      |   |        |     

Interest income decreased to $3 million in 2004, from $6 million in 2003. In 2003, interest income declined $3 million compared to 2002.

Interest
expense decreased 23% in 2004 primarily due to the retirement of higher interest rate debt, which was replaced with commercial paper (see Note 9 to the Company's
consolidated financial statements in Item 8). Interest expense decreased 7% in 2003 primarily due to a reduction in outstanding debt. Excluding the PHONES, the average debt level was
$2.1 billion in 2004, $2.4 billion in 2003 and $3.1 billion in 2002. Including the PHONES, average debt levels were $2.6 billion in 2004, $2.9 billion in 2003 and
$3.7 billion in 2002. Excluding the PHONES, outstanding debt was $2.0 billion at year-end 2004, $2.0 billion at year-end 2003 and $2.8 billion at
year-end 2002. Including the PHONES, outstanding debt was $2.6 billion at year-end 2004, $2.6 billion at year-end 2003 and $3.3 billion at
year-end 2002.

Other

Corporate expenses for 2004, 2003 and 2002 were as follows:

|                                                |  |   |     |   |   |     |   | Change |    
|----------------------------------------------- |  | - | --- | - | - | --- | - | ------ | ---
|
|Corporate expenses before restructuring charges |  | $ | (52 | ) | $ | (53 | ) | $      | (46
|Restructuring charges                           |  |   |    |   |   |    |   |        | (1 
|                                                |  |   |     |   |   |     |   |        |    
|Corporate expenses                              |  | $ | (52 | ) | $ | (53 | ) | $      | (47
|                                                |  |   |     |   |   |     |   |        |    

Corporate expenses decreased 2%, or $1 million, in 2004 compared to 2003 due to lower compensation expense. Corporate expenses increased
14%, or $6 million, in 2003 compared to 2002. Before restructuring charges, corporate expenses in 2003 were up 17%, or $7 million, mainly due to higher compensation and benefits expense.

The
effective tax rate in 2004 was 39.1%, compared with a rate of 37.0% in 2003 and 35.3% in 2002. The Company reduced its income tax expense and liabilities by a total of
$25 million in 2003 and $35 million in 2002 as a result of favorably resolving certain state and federal income tax issues.

LIQUIDITY AND CAPITAL RESOURCES

Cash flow generated from operations is the Company's primary source of liquidity. Net cash provided by operations was $1.1 billion in 2004, down from
$1.2 billion in 2003. The decrease was mainly due to lower net income. The Company expects to fund dividends, capital expenditures and other operating requirements with net cash provided by
operations. Funding required for share repurchases and acquisitions is financed by available cash flow from operations and, if necessary, by the issuance of debt and proceeds from the issuance of
stock related to stock option exercises.

46

---



Net
cash used for investments totaled $226 million in 2004 compared with $234 million in 2003. The Company spent $217 million for capital expenditures during 2004.
The Company classifies capital expenditures that provide a rate of return on investment above an internally set minimum rate as growth expenditures. The Company spent $119 million and
$98 million on growth and maintenance expenditures, respectively, in 2004. In addition, the Company spent $49 million in cash for investments and received $40 million from the
sale of investments in 2004.

Net
cash used for financing activities was $970 million in 2004 and included repayments of long-term debt, repurchases of common stock and payments of dividends,
partially offset by net proceeds from issuance of commercial paper and from sales of stock to employees. The Company repaid $823 million of long-term debt in 2004,
$620 million of which related to the early retirement of debt in the second quarter at a cash premium of $137 million. During 2004, the Company repurchased 15.5 million shares of
its common stock in the open market for $732 million. Under the 2000 stock repurchase authorization the Company may buy back an additional $601 million of its common stock. The Company
plans to use the stock buy back program to minimize the dilutive effect of its stock issued from stock option exercises. Dividends paid on common and preferred shares totaled $163 million in
2004. Quarterly dividends per share on common stock were $.12 in 2004, up from $.11 in 2003.

At
Dec. 26, 2004, the Company had revolving credit agreements with a number of financial institutions providing for borrowings in an aggregate amount of up to $1.0 billion.
Subsequent to Dec. 26, 2004, the Company entered into additional revolving credit agreements providing for borrowings of up to $200 million, increasing the aggregate amount to
$1.2 billion. Borrowings under these agreements, which expire in December 2008, would be at a rate equal to LIBOR plus 0.35%. The revolving credit agreements allow the Company to elect
one-month to twelve-month LIBOR rates, based on the term of the borrowing. At Dec. 26, 2004, the one-month LIBOR rate was 2.42% and the twelve-month LIBOR rate was
3.08%. The agreements contain covenants which require the Company to maintain a minimum interest coverage ratio. No amounts were borrowed under the agreements at Dec. 26, 2004, and the Company
was in compliance with the covenants.

The
Company regularly issues commercial paper for cash requirements and maintains revolving credit agreements equal to or in excess of any commercial paper outstanding. As of
Dec. 26, 2004, the Company had $773 million of commercial paper outstanding. The Company's commercial paper is rated "A-1", "P-2", "F-1" and
"R-1L" by Standard & Poor's, Moody's Investors Services ("Moody's"), Fitch Ratings ("Fitch") and Dominion Bond Rating Service ("Dominion"), respectively. The
Company's senior unsecured long-term debt was rated "A" by Standard & Poor's, "A3" by Moody's, "A" by Fitch and "A" by Dominion.

The
notes issued by the Employee Stock Ownership Plan ("ESOP") matured on Dec. 16, 2003 and were fully repaid. The notes were unconditionally guaranteed by the Company as to
payment of principal and interest (see Notes 9 and 16 to the Company's consolidated financial statements in Item 8).

Off-Balance Sheet ArrangementsOff-balance sheet arrangements as defined by the Securities and Exchange Commission include the
following four categories: obligations under certain guarantees or contracts; retained or contingent interests in assets transferred to an unconsolidated entity or similar arrangements; obligations
under certain derivative arrangements; and obligations under material variable interests. The Company has not entered into any material arrangements, which would fall under any of these four
categories, which would be reasonably likely to have a current or future material effect on the Company's financial condition, revenues or expenses, results of operations, liquidity or capital
expenditures.

Contractual ObligationsThe table below presents long-term debt maturities, required payments under contractual agreements for
broadcast rights recorded in the consolidated balance sheets and future

47

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minimum
lease payments to be made under non-cancelable operating leases as of Dec. 26, 2004 (in thousands).

|Fiscal Year |  | Long-term Debt |           | Broadcast Rights
Contracts Payable(1) |   | Future Minimum
Lease Payments |  | Total(2)
|----------- |  | -------------- | --------- | ------------------------------------- | - | ----------------------------- |  | --------
|2005        |  | $              | 271,767   |                                       | $ | 319,425                       |  | $       
|2006        |  |                | 309,268   |                                       |   | 197,776                       |  |         
|2007        |  |                | 17,545    |                                       |   | 132,002                       |  |         
|2008        |  |                | 1,266,341 |                                       |   | 69,096                        |  |         
|2009        |  |                | 12,020    |                                       |   | 46,073                        |  |         
|Thereafter  |  |                | 712,759   |                                       |   | 93,154                        |  |         
|            |  |                |           |                                       |   |                               |  |         
|Total       |  | $              | 2,589,700 |                                       | $ | 857,526                       |  | $       
|            |  |                |           |                                       |   |                               |  |         

---

During 1998, Times Mirror, which was acquired by the Company in 2000, disposed of its Matthew Bender and Mosby subsidiaries in separate
tax-free reorganizations. While the Company strongly believes that these transactions were completed on a tax-free basis, the IRS has audited the transactions and disagreed
with the position taken by Times Mirror. In 2001, the Company received an IRS adjustment to increase Times Mirror's 1998 taxable income by approximately $1.6 billion. If the IRS prevails, the
Company's federal and state income tax liability would be approximately $600 million, plus interest. As of Dec. 26, 2004, the interest on the proposed taxes would be approximately
$332 million. The Company intends to vigorously defend its position and filed a petition in U.S. Tax Court on Nov. 8, 2002 to contest the IRS position. In December 2004, the
Company presented its position in U.S. Tax Court. The Company does not expect to receive the Court's decision before the fourth quarter of 2005.

A
tax reserve of $180 million, plus $66 million of interest, relating to these transactions is included in "other obligations" on the consolidated balance sheets. Times
Mirror established the $180 million tax reserve in 1998 when it entered into the transactions based on its assessment, along with its tax advisors, of the amount needed to resolve a dispute
with the IRS. The Company evaluates the adequacy of this reserve on a periodic basis. The Company has maintained this initial reserve as no new information has become available which would warrant a
change in that reserve.

The
Company reduced its income tax expense and liabilities by $25 million in 2003 and $35 million in 2002 as a result of favorably resolving certain federal and state
income tax issues.

The
resolutions of the Company's tax issues are unpredictable and could result in tax liabilities that are significantly higher or lower than what has been provided by the Company.

Capital SpendingThe Company expects 2005 capital expenditures (not including business acquisitions) to be somewhat higher than the
$217 million for 2004. Management reviews the capital expenditure program periodically and modifies it as required to meet current business needs. It is expected that 2005 capital expenditures
will be funded from cash flow generated from operations.

48

---



Effects of InflationThe Consumer Price Index, a widely used measure of the impact of changing prices, has increased only moderately in
recent years, up between 2% and 3% each year since 1991. This level of inflation has not impacted the Company's operations significantly, nor have historically higher inflation levels that prevailed
prior to 1991. The principal effect of inflation on the Company's operating results is to increase costs. Subject to normal competitive conditions, the Company generally has demonstrated an ability to
raise sales prices to offset these cost increases.

2005 Financial AssumptionsConsolidated revenues will continue to be impacted by many factors, including changes in national and local
economic conditions, job creation, circulation levels and audience shares. As a result of this limited visibility, the Company is currently not providing revenue guidance for 2005; investors are
encouraged to review the Company's monthly revenue releases for current trends.

The
Company expects to adopt FAS No. 123R in the third quarter of 2005. Excluding the impact of stock option expense that will be recognized in connection with the adoption of FAS
No. 123R, consolidated operating expenses are expected to decline in 2005 due to the absence of the $90 million advertising settlement charge and the $41 million of position
elimination costs. Other consolidated operating expenses are expected to be up about 2% for 2005 due to higher expenses for retirement and medical plans and newsprint along with a slight increase in
broadcast rights expense. Net equity income is projected to be somewhat higher than 2004. Interest expense is expected to be somewhat below 2004 due to the full year impact of the debt refinancing in
the second quarter of 2004. The effective income tax rate for 2005 is expected to be approximately 39%. Capital expenditures are projected to increase slightly over 2004.

In
February 2005, subsequent to the Company's fiscal year end, the Company's Chicago Cubs subsidiary traded Sammy Sosa to the Baltimore Orioles. As a result of this trade, the
Company will record a $13.5 million pretax charge in the first quarter of 2005.

49

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest Rate RiskAll of the Company's borrowings are denominated in U.S. dollars. The Company's policy is to manage interest rate risk by
issuing long-term debt and medium-term notes at fixed interest rates and short-term promissory notes.

Information
pertaining to the Company's debt at Dec. 26, 2004 is shown in the table below (in thousands).

|Maturities                     |  | Fixed Rate
Debt |           | Weighted Avg.
Interest Rate |     | Variable Rate
Debt |   | Weighted Avg.
Interest Rate |  | Total
Debt
|------------------------------ |  | --------------- | --------- | --------------------------- | --- | ------------------ | - | --------------------------- |  | ----------
|2005(1)(2)                     |  | $               | 483,767   |                             | 3.7 | %                  | $ | 773,206                     |  | 2.4       
|2006                           |  |                 | 309,268   |                             | 6.8 | %                  |   |                            |  |          
|2007                           |  |                 | 17,545    |                             | 7.7 | %                  |   |                            |  |          
|2008                           |  |                 | 281,135   |                             | 5.8 | %                  |   |                            |  |          
|2009                           |  |                 | 12,020    |                             | 7.7 | %                  |   |                            |  |          
|Thereafter(3)(4)               |  |                 | 712,759   |                             | 3.6 | %                  |   |                            |  |          
|                               |  |                 |           |                             |     |                    |   |                             |  |           
|Total at Dec. 26, 2004         |  | $               | 1,816,494 |                             |     |                    | $ | 773,206                     |  |           
|                               |  |                 |           |                             |     |                    |   |                             |  |           
|Fair Value at Dec. 26, 2004(5) |  | $               | 1,950,114 |                             |     |                    | $ | 773,206                     |  |           
|                               |  |                 |           |                             |     |                    |   |                             |  |           

---

50

---



Information pertaining to the Company's debt at Dec. 28, 2003 is shown in the table below (in thousands).

|Maturities                     |  | Fixed Rate
Debt |           | Weighted Avg.
Interest Rate |     | Variable Rate
Debt |   | Weighted Avg.
Interest Rate |   | Total
Debt
|------------------------------ |  | --------------- | --------- | --------------------------- | --- | ------------------ | - | --------------------------- | - | ----------
|2004(1)(2)                     |  | $               | 707,185   |                             | 4.8 | %                  |  |                             |  |           
|2005                           |  |                 | 192,138   |                             | 6.2 | %                  |  |                             |  |           
|2006                           |  |                 | 308,564   |                             | 6.8 | %                  |  |                             |  |           
|2007                           |  |                 | 16,796    |                             | 7.7 | %                  |  |                             |  |           
|2008                           |  |                 | 280,375   |                             | 5.8 | %                  |  |                             |  |           
|Thereafter(3)(4)               |  |                 | 1,069,972 |                             | 4.4 | %                  |  |                             |  |           
|                               |  |                 |           |                             |     |                    |   |                             |   |           
|Total at Dec. 28, 2003         |  | $               | 2,575,030 |                             |     |                    |  |                             |   |           
|                               |  |                 |           |                             |     |                    |   |                             |   |           
|Fair Value at Dec. 28, 2003(5) |  | $               | 2,856,188 |                             |     |                    |  |                             |   |           
|                               |  |                 |           |                             |     |                    |   |                             |   |           

---

Equity Price Risk

Available-For-Sale SecuritiesThe Company has common stock investments in publicly traded companies that are subject
to market price volatility. Except for 16 million shares of Time Warner common stock (see discussion below), these investments are classified as available-for-sale
securities and are recorded on the balance sheet at fair value with unrealized gains or losses, net of related tax effects, reported in the accumulated other comprehensive income component of
shareholders' equity.

2004The following analysis presents the hypothetical change at Dec. 26, 2004 in the fair value of the Company's common stock
investments in publicly traded companies that are classified as available-for-sale, assuming hypothetical stock price fluctuations of plus or minus 10%, 20% and 30% in each
stock's price. As of Dec. 26, 2004, the Company's common stock investments in publicly traded companies consisted entirely of 3.1 million shares of Time Warner common stock unrelated to
PHONES (see discussion below in "Derivatives and Related Trading Securities").

|                                             |  | Valuation of Investments
Assuming Indicated Decrease
in Stock's Price |        |  |   | Valuation of Investments
Assuming Indicated Increase
in Stock's Price
|-------------------------------------------- |  | --------------------------------------------------------------------- | ------ |  | - | ---------------------------------------------------------------------
|
|
|Common stock investments in public companies |  | $                                                                     | 41,890 |  | $ | 47,875                                                               

---

51

---



During the last 12 quarters preceding Dec. 26, 2004, market price movements caused the fair value of the Company's common stock investments
in publicly traded companies to change by 10% or more in six of the quarters, by 20% or more in three of the quarters and by 30% or more in two of the quarters.

2003The following analysis presents the hypothetical change at Dec. 28, 2003 in the fair value of the Company's common stock
investments in publicly traded companies that are classified as available-for-sale, assuming hypothetical stock price fluctuations of plus or minus 10%, 20% and 30% in each
stock's price.

|                                             |  | Valuation of Investments
Assuming Indicated Decrease
in Each Stock's Price |        |  |   | Valuation of Investments
Assuming Indicated Increase
in Each Stock's Price
|-------------------------------------------- |  | -------------------------------------------------------------------------- | ------ |  | - | --------------------------------------------------------------------------
|
|
|Common stock investments in public companies |  | $                                                                          | 41,318 |  | $ | 47,220                                                                    

---

During the last 12 quarters preceding Dec. 28, 2003, market price movements caused the fair value of the Company's common stock investments
in publicly traded companies to change by 10% or more in eight of the quarters, by 20% or more in five of the quarters and by 30% or more in three of the quarters.

Derivatives and Related Trading SecuritiesThe Company issued 8 million PHONES in April 1999 indexed to the value of its
investment in 16 million shares of Time Warner common stock (see Note 9 to the Company's consolidated financial statements in Item 8). Beginning in the second quarter of 1999,
this investment in Time Warner is classified as a trading security, and changes in its fair value, net of the changes in the fair value of the related derivative component of the PHONES, are recorded
in the statement of income.

At
maturity, the PHONES will be redeemed at the greater of the then market value of two shares of Time Warner common stock or $157 per PHONES. At Dec. 26, 2004 and Dec. 28,
2003, the PHONES carrying value was approximately $585 million and $535 million, respectively. Since the issuance of the PHONES in April 1999, changes in the fair value of the
derivative component of the PHONES have partially offset changes in the fair value of the related Time Warner shares. There have been and may continue to be periods with significant
non-cash increases or decreases to the Company's net income pertaining to the PHONES and the related Time Warner shares.

2004The following analysis presents the hypothetical change at Dec. 26, 2004 in the fair value of the Company's 16 million
shares of Time Warner common stock related to the PHONES assuming hypothetical stock price fluctuations of plus or minus 10%, 20% and 30% in the stock's price.

|                         |  | Valuation of Investment
Assuming Indicated Decrease
in Stock Price |         |  |   | Valuation of Investment
Assuming Indicated Increase
in Stock Price
|------------------------ |  | ------------------------------------------------------------------ | ------- |  | - | ------------------------------------------------------------------
|
|
|Time Warner common stock |  | $                                                                  | 214,368 |  | $ | 244,992                                                           

During the last 12 quarters preceding Dec. 26, 2004, market price movements have caused the fair value of the Company's 16 million
shares of Time Warner common stock to change by 10% or more in six of the quarters, by 20% or more in three of the quarters and by 30% or more in two of the quarters.

52

---



2003The following analysis presents the hypothetical change at Dec. 28, 2003 in the fair value of the Company's 16 million
shares of Time Warner common stock related to the PHONES assuming hypothetical stock price fluctuations of plus or minus 10%, 20% and 30% in the stock's price.

|                         |  | Valuation of Investment
Assuming Indicated Decrease
in Stock Price |         |  |   | Valuation of Investment
Assuming Indicated Increase
in Stock Price
|------------------------ |  | ------------------------------------------------------------------ | ------- |  | - | ------------------------------------------------------------------
|
|
|Time Warner common stock |  | $                                                                  | 199,808 |  | $ | 228,352                                                           

During the last 12 quarters preceding Dec. 28, 2003, market price movements have caused the fair value of the Company's 16 million
shares of Time Warner common stock to change by 10% or more in eight of the quarters, by 20% or more in five of the quarters and by 30% or more in four of the quarters.

53

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE

|                                                                                                                          |                                                              | Page
|------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | ----
|Report of Independent Registered Public Accounting Firm                                                                   |                                                              | 55  
|Management's Responsibility for Financial Statements and Management's Report on Internal Control Over Financial Reporting |                                                              | 57  
|Consolidated Statements of Income for each of the three fiscal years in the period ended Dec. 26, 2004                    |                                                              | 59  
|Consolidated Balance Sheets at Dec. 26, 2004 and Dec. 28, 2003                                                            |                                                              | 60  
|Consolidated Statements of Shareholders' Equity for each of the three fiscal years in the period ended Dec. 26, 2004      |                                                              | 62  
|Consolidated Statements of Cash Flows for each of the three fiscal years in the period ended Dec. 26, 2004                |                                                              | 64  
|Notes to Consolidated Financial Statements                                                                                |                                                              |     
|                                                                                                                          | Note 1: Summary of Significant Accounting Policies           |     
|                                                                                                                          | Note 2: Changes in Operations and Non-Operating Items        |     
|                                                                                                                          | Note 3:NewsdayandHoy, New York Charge                        |     
|                                                                                                                          | Note 4: Restructuring Charges                                |     
|                                                                                                                          | Note 5: Inventories                                          |     
|                                                                                                                          | Note 6: Goodwill and Other Intangible Assets                 |     
|                                                                                                                          | Note 7: TMCT I and TMCT II                                   |     
|                                                                                                                          | Note 8: Investments                                          |     
|                                                                                                                          | Note 9: Long-Term Debt                                       |     
|                                                                                                                          | Note 10: Contracts Payable for Broadcast Rights              |     
|                                                                                                                          | Note 11: Fair Value of Financial Instruments                 |     
|                                                                                                                          | Note 12: Commitments and Contingencies                       |     
|                                                                                                                          | Note 13: Income Taxes                                        |     
|                                                                                                                          | Note 14: Pension and Postretirement Benefits                 |     
|                                                                                                                          | Note 15: Capital Stock and Share Purchase Plan               |     
|                                                                                                                          | Note 16: Incentive Compensation and Stock Plans              |     
|                                                                                                                          | Note 17: Comprehensive Income                                |     
|                                                                                                                          | Note 18: Business Segments                                   |     
|2004 Quarterly Results                                                                                                    |                                                              | 102 
|2003 Quarterly Results                                                                                                    |                                                              | 103 
|Eleven Year Financial Summary                                                                                             |                                                              | 104 
|Financial Statement Schedule for each of the three fiscal years in the period ended Dec. 26, 2004                         |                                                              |     
|                                                                                                                          | Schedule II Valuation and Qualifying Accounts and Reserves * |     

---

54

---



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Board of Directors and Shareholders of Tribune Company:

We
have completed an integrated audit of Tribune Company's 2004 consolidated financial statements and of its internal control over financial reporting as of December 26, 2004 and
audits of its 2003 and 2002 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are
presented below.

Consolidated Financial Statements and Financial Statement Schedule

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Tribune
Company and its subsidiaries at December 26, 2004 and December 28, 2003, and the results of their operations and their cash flows for each of the three years in the period ended
December 26, 2004 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the
accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements
and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on
our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As
discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it evaluates certain indefinite-lived intangible assets for impairment. As
discussed in Note 1 to the
consolidated financial statements, the Company changed the manner in which it accounts for goodwill and other intangible assets.

Internal Control Over Financial Reporting

Also, in our opinion, management's assessment, included in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A, that
the Company maintained effective internal control over financial reporting as of December 26, 2004 based on criteria established inInternal
ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects,
based on those criteria. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 26, 2004 based on
criteria established inInternal ControlIntegrated Frameworkissued by COSO. The Company's management is responsible for maintaining
effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management's
assessment and on the effectiveness of the Company's internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over
financial reporting,

55

---



evaluating
management's assessment, testing and evaluating the design and operating effectiveness of internal controls, and performing such other procedures as we consider necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinions.

A
company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

LOGO

PricewaterhouseCoopers
LLP
Chicago, Illinois
March 4, 2005

56

---



MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS AND
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management's Responsibility For Financial Statements

Management
is responsible for the preparation, integrity and fair presentation of the Company's consolidated financial statements and related financial information included in this
Annual Report on Form 10-K to shareholders. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America
and necessarily include certain amounts that are based on management's best estimates and judgments.

The
system of internal control over financial reporting is periodically assessed for its effectiveness and is augmented by written policies and procedures, the careful selection and
training of qualified personnel and a program of internal audit.

The
consolidated financial statements were audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, and their report is shown on pages 55 and 56.
PricewaterhouseCoopers LLP was given unrestricted access to all financial records and related data, including minutes of all meetings of shareholders, the Board of Directors and committees of the
Board. The Company believes that all representations made to the independent accountants during their audits were valid and appropriate.

The
Audit Committee of the Board of Directors is responsible for reviewing and monitoring the Company's financial reporting and accounting practices. The Audit Committee consists of four
independent directors. The Committee meets with representatives of management, the independent registered public accounting firm and internal auditors to discuss financial reporting, accounting and
internal control matters. PricewaterhouseCoopers LLP and the internal auditors have direct access to the Audit Committee.

Management's Report on Internal Control Over Financial Reporting

Management
is responsible for establishing and maintaining adequate internal control over financial reporting, designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. As of Dec. 26,
2004, the Company's management conducted an evaluation of the effectiveness of the design and operation of the Company's internal control over financial reporting based on criteria established in Internal
ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission and concluded that the
Company's internal control over financial reporting was effective as of that date. Management's assessment of the effectiveness of the Company's internal control over financial reporting as of Dec.
26, 2004 has been audited by PricewaterhouseCoopers LLP as stated in their report which appears herein.

|                                                                     |  |                                                                    
|-------------------------------------------------------------------- |  | -------------------------------------------------------------------
|SIGNATURE                                                            |  | DONALD C. GRENESKO SIGNATURE                                       
|Dennis J. FitzSimons
Chairman, President and Chief Executive Officer |  | Donald C. Grenesko
Senior Vice President/Finance and
Administration

57

---



(This page has been left blank intentionally.)

58

---



TRIBUNE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of dollars, except per share data)

|                                                                                   |                                                                 | Year Ended  |          
|---------------------------------------------------------------------------------- | --------------------------------------------------------------- | ----------- | ---------
|
|Operating Revenues                                                                 |                                                                 |             |          
|                                                                                   | Publishing                                                      |             |          
|                                                                                   |                                                                 | Advertising |          
|                                                                                   |                                                                 | Circulation |          
|                                                                                   |                                                                 | Other       |          
|                                                                                   |                                                                 |             |          
|                                                                                   |                                                                 | Total       |          
|                                                                                   | Broadcasting and entertainment                                  |             |          
|                                                                                   |                                                                 |             |          
|                                                                                   | Total operating revenues                                        |             |          
|Operating Expenses                                                                 |                                                                 |             |          
|                                                                                   | Cost of sales (exclusive of items shown below)                  |             |          
|                                                                                   | Selling, general and administrative                             |             |          
|                                                                                   | Depreciation                                                    |             |          
|                                                                                   | Amortization of intangible assets (Note 1)                      |             |          
|                                                                                   | Restructuring charges (Note 4)                                  |             |          
|                                                                                   |                                                                 |             |          
|                                                                                   | Total operating expenses                                        |             |          
|                                                                                   |                                                                 |             |          
|Operating Profit                                                                   |                                                                 |             | 1,218,289
|Net income (loss) on equity investments                                            |                                                                 |             | 17,931   
|Interest income                                                                    |                                                                 |             | 3,053    
|Interest expense                                                                   |                                                                 |             | (153,118 
|Gain (loss) on change in fair values of derivatives and
related investments        |                                                                 |             | (18,497  
|Loss on early debt retirement                                                      |                                                                 |             | (140,506 
|Gain on sales of subsidiaries and investments, net                                 |                                                                 |             | 20,347   
|Loss on investment write-downs                                                     |                                                                 |             | (5,599   
|Gain on insurance recoveries                                                       |                                                                 |             |         
|Other non-operating gain (loss), net                                               |                                                                 |             | (789     
|                                                                                   |                                                                 |             |          
|Income Before Income Taxes and Cumulative Effect of Change in Accounting Principle |                                                                 |             | 941,111  
|Income taxes                                                                       |                                                                 |             | (367,787 
|                                                                                   |                                                                 |             |          
|Income Before Cumulative Effect of Change in Accounting Principle                  |                                                                 |             | 573,324  
|Cumulative effect of change in accounting principle, net of tax (Note 1)           |                                                                 |             | (17,788  
|                                                                                   |                                                                 |             |          
|Net Income                                                                         |                                                                 |             | 555,536  
|Preferred dividends, net of tax                                                    |                                                                 |             | (8,308   
|                                                                                   |                                                                 |             |          
|Net Income Attributable to Common Shares                                           |                                                                 | $           | 547,228  
|                                                                                   |                                                                 |             |          
|Earnings Per Share (Note 1)                                                        |                                                                 |             |          
|Basic:                                                                             |                                                                 |             |          
|                                                                                   | Before cumulative effect of change in accounting principle      |             | $        
|                                                                                   | Cumulative effect of change in accounting principle, net of tax |             |          
|                                                                                   |                                                                 |             |          
|                                                                                   | Total                                                           |             | $        
|                                                                                   |                                                                 |             |          
|Diluted:                                                                           |                                                                 |             |          
|                                                                                   | Before cumulative effect of change in accounting principle      |             | $        
|                                                                                   | Cumulative effect of change in accounting principle, net of tax |             |          
|                                                                                   |                                                                 |             |          
|                                                                                   | Total                                                           |             | $        
|                                                                                   |                                                                 |             |          

See Notes to Consolidated Financial Statements.

59

---



TRIBUNE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars, except share data)

|               |                                                                | Dec. 26, 2004 |           | Dec. 28, 2003 |  
|-------------- | -------------------------------------------------------------- | ------------- | --------- | ------------- | -
|Assets         |                                                                |               |           |               |  
|Current Assets |                                                                |               |           |               |  
|               | Cash and cash equivalents                                      |               | $         | 124,411       |  
|               | Accounts receivable (net of allowances of $49,507 and $49,468) |               |           | 850,214       |  
|               | Inventories                                                    |               |           | 49,796        |  
|               | Broadcast rights (net of allowances of $3,000 and $11,907)     |               |           | 260,527       |  
|               | Deferred income taxes                                          |               |           | 116,438       |  
|               | Prepaid expenses and other                                     |               |           | 51,058        |  
|               |                                                                |               |           |               |  
|               | Total current assets                                           |               |           | 1,452,444     |  
|Properties     |                                                                |               |           |               |  
|               | Machinery, equipment and furniture                             |               |           | 2,299,585     |  
|               | Buildings and leasehold improvements                           |               |           | 984,876       |  
|               |                                                                |               |           |               |  
|               |                                                                |               | 3,284,461 |               |  
|               | Accumulated depreciation                                       |               |           | (1,812,453    | )
|               |                                                                |               |           |               |  
|               |                                                                |               | 1,472,008 |               |  
|               | Land                                                           |               |           | 135,808       |  
|               | Construction in progress                                       |               |           | 174,552       |  
|               |                                                                |               |           |               |  
|               | Net properties                                                 |               |           | 1,782,368     |  
|Other Assets   |                                                                |               |           |               |  
|               | Broadcast rights (net of allowances of $2,226 and $4,440)      |               |           | 391,249       |  
|               | Goodwill                                                       |               |           | 5,467,818     |  
|               | Other intangible assets, net                                   |               |           | 3,126,240     |  
|               | Time Warner stock related to PHONES debt                       |               |           | 306,240       |  
|               | Other investments                                              |               |           | 589,258       |  
|               | Prepaid pension costs                                          |               |           | 884,737       |  
|               | Other                                                          |               |           | 167,842       |  
|               |                                                                |               |           |               |  
|               | Total other assets                                             |               |           | 10,933,384    |  
|               |                                                                |               |           |               |  
|               | Total assets                                                   |               | $         | 14,168,196    |  
|               |                                                                |               |           |               |  

See
Notes to Consolidated Financial Statements.

60

---



TRIBUNE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars, except share data)

|                                                 |                                                                                         | Dec. 26, 2004                                                                                                                         |   | Dec. 28, 2003 |       
|------------------------------------------------ | --------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- | ------
|Liabilities and Shareholders' Equity             |                                                                                         |                                                                                                                                       |   |               |       
|Current Liabilities                              |                                                                                         |                                                                                                                                       |   |               |       
|                                                 | Long-term debt due within one year                                                      |                                                                                                                                       | $ | 271,767       |       
|                                                 | Accounts payable                                                                        |                                                                                                                                       |   | 162,117       |       
|                                                 | Employee compensation and benefits                                                      |                                                                                                                                       |   | 211,713       |       
|                                                 | Contracts payable for broadcast rights                                                  |                                                                                                                                       |   | 319,425       |       
|                                                 | Deferred income                                                                         |                                                                                                                                       |   | 96,841        |       
|                                                 | Other                                                                                   |                                                                                                                                       |   | 308,597       |       
|                                                 |                                                                                         |                                                                                                                                       |   |               |       
|                                                 | Total current liabilities                                                               |                                                                                                                                       |   | 1,370,460     |       
|Long-Term Debt                                   |                                                                                         |                                                                                                                                       |   |               |       
|                                                 | PHONES debt related to Time Warner stock                                                |                                                                                                                                       |   | 584,880       |       
|                                                 | Other long-term debt (less portions due within one year)                                |                                                                                                                                       |   | 1,733,053     |       
|Other Non-Current Liabilities                    |                                                                                         |                                                                                                                                       |   |               |       
|                                                 | Deferred income taxes                                                                   |                                                                                                                                       |   | 2,278,423     |       
|                                                 | Contracts payable for broadcast rights                                                  |                                                                                                                                       |   | 538,101       |       
|                                                 | Deferred compensation and benefits                                                      |                                                                                                                                       |   | 392,966       |       
|                                                 | Other obligations                                                                       |                                                                                                                                       |   | 433,469       |       
|                                                 |                                                                                         |                                                                                                                                       |   |               |       
|                                                 | Total other non-current liabilities                                                     |                                                                                                                                       |   | 3,642,959     |       
|Commitments and Contingent Liabilities (Note 12) |                                                                                         |                                                                                                                                       |  |               |       
|Shareholders' Equity                             |                                                                                         |                                                                                                                                       |   |               |       
|                                                 | Series C convertible preferred stock                                                    |                                                                                                                                       |   |               |       
|                                                 |                                                                                         | Authorized: 823,568 shares; Issued and outstanding: 88,519 shares (net of 354,077 treasury shares) (liquidation value $500 per share) |   |               | 44,260
|                                                 | Series D-1 convertible preferred stock                                                  |                                                                                                                                       |   |               |       
|                                                 |                                                                                         | Authorized: 380,972 shares; Issued and outstanding: 76,194 shares (net of 304,778 treasury shares) (liquidation value $500 per share) |   |               | 38,097
|                                                 | Series D-2 convertible preferred stock                                                  |                                                                                                                                       |   |               |       
|                                                 |                                                                                         | Authorized: 245,100 shares; Issued and outstanding: 49,020 shares (net of 196,080 treasury shares) (liquidation value $500 per share) |   |               | 24,510
|                                                 | Common stock ($0.01 par value)                                                          |                                                                                                                                       |   |               |       
|                                                 |                                                                                         | Authorized: 1,400,000,000 shares; 400,514,576 shares issued in 2004 and 412,370,664 shares issued in 2003                             |   |               | 2,373 
|                                                 | Additional paid-in capital                                                              |                                                                                                                                       |   | 6,916,132     |       
|                                                 | Retained earnings                                                                       |                                                                                                                                       |   | 2,810,542     |       
|                                                 | Treasury common stock (at cost) 83,441,765 shares in 2004 and 84,073,087 shares in 2003 |                                                                                                                                       |   | (3,011,900    | )     
|                                                 | Accumulated other comprehensive income                                                  |                                                                                                                                       |   | 12,830        |       
|                                                 |                                                                                         |                                                                                                                                       |   |               |       
|                                                 | Total shareholders' equity                                                              |                                                                                                                                       |   | 6,836,844     |       
|                                                 |                                                                                         |                                                                                                                                       |   |               |       
|                                                 | Total liabilities and shareholders' equity                                              |                                                                                                                                       | $ | 14,168,196    |       
|                                                 |                                                                                         |                                                                                                                                       |   |               |       

See
Notes to Consolidated Financial Statements.

61

---



TRIBUNE COMPANY AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands, except per share data)

|                                                 |                                       |                                                         |           |          |         | Accumulated
Other
Comprehensive
Income |          | Convertible Preferred Stock
|------------------------------------------------ | ------------------------------------- | ------------------------------------------------------- | --------- | -------- | ------- | -------------------------------------- | -------- | ---------------------------
|
|
|Balance at Dec. 30, 2001                         |                                       | $                                                       | 5,642,341 |          | $       | 4,231,467                              |          | $                          
|Comprehensive income:                            |                                       |                                                         |           |          |         |                                        |          |                            
|                                                 | Net income                            |                                                         |           | 442,992  |         |                                        | 442,992  |                            
|                                                 | Other comprehensive income:           |                                                         |           |          |         |                                        |          |                            
|                                                 |                                       | Change in unrealized gain on securities, net            |           |          | (55,972 | )                                      |          |                           
|                                                 |                                       | Change in newsprint swaps, net                          |           |          | 1,606   |                                        |          |                           
|                                                 |                                       | Change in minimum pension liability, net                |           |          | (1,559  | )                                      |          |                           
|                                                 |                                       |                                                         |           |          |         |                                        |          |                            
|Comprehensive income                             |                                       |                                                         | 387,067   |          |         |                                       |          |                            
|Dividends declared:                              |                                       |                                                         |           |          |         |                                        |          |                            
|                                                 | Common ($.44 per share)               |                                                         |           | (133,038 | )       |                                        | (133,038 | )                          
|                                                 | Series B preferred ($17.05 per share) |                                                         |           | (18,010  | )       |                                        | (18,010  | )                          
|                                                 | Series C, D-1 and D-2 preferred       |                                                         |           | (8,189   | )       |                                        | (8,189   | )                          
|Tax benefit on dividends paid to the ESOP(2)     |                                       |                                                         | 1,069     |          |         | 1,069                                  |          |                            
|Redemptions of convertible preferred stock       |                                       |                                                         |          |          |         |                                       |          |                            
|Conversions of LYONs debt securities             |                                       |                                                         | 8,868     |          |         |                                       |          |                            
|Shares issued under option and stock plans       |                                       |                                                         | 346,468   |          |         |                                       |          |                            
|Tax benefit on stock options exercised           |                                       |                                                         | 52,413    |          |         |                                       |          |                            
|Shares tendered as payment for options exercised |                                       |                                                         | (160,088  | )        |         |                                       |          |                            
|Purchases of treasury stock                      |                                       |                                                         | (32,149   | )        |         |                                       |          |                            
|Repayment of ESOP debt                           |                                       |                                                         | 32,483    |          |         |                                       |          |                            
|                                                 |                                       |                                                         |           |          |         |                                        |          |                            
|Balance at Dec. 29, 2002                         |                                       | $                                                       | 6,119,235 |          | $       | 4,516,291                              |          | $                          
|Comprehensive income:                            |                                       |                                                         |           |          |         |                                        |          |                            
|                                                 | Net income                            |                                                         |           | 891,379  |         |                                        | 891,379  |                            
|                                                 | Other comprehensive income:           |                                                         |           |          |         |                                        |          |                            
|                                                 |                                       | Change in unrealized gain on securities, net            |           |          | 7,557   |                                        |          |                           
|                                                 |                                       | Change in minimum pension liability, net                |           |          | (1,753  | )                                      |          |                           
|                                                 |                                       | Change in foreign currency translation adjustments, net |           |          | 106     |                                        |          |                           
|                                                 |                                       |                                                         |           |          |         |                                        |          |                            
|Comprehensive income                             |                                       |                                                         | 897,289   |          |         |                                       |          |                            
|Dividends declared:                              |                                       |                                                         |           |          |         |                                        |          |                            
|                                                 | Common ($.44 per share)               |                                                         |           | (136,601 | )       |                                        | (136,601 | )                          
|                                                 | Series B preferred ($17.05 per share) |                                                         |           | (16,683  | )       |                                        | (16,683  | )                          
|                                                 | Series C, D-1 and D-2 preferred       |                                                         |           | (8,252   | )       |                                        | (8,252   | )                          
|Tax benefit on dividends paid to the ESOP(2)     |                                       |                                                         | 494       |          |         | 494                                    |          |                            
|Redemptions of convertible preferred stock       |                                       |                                                         |          |          |         |                                       |          |                            
|Conversions of LYONs debt securities             |                                       |                                                         | 277,740   |          |         |                                       |          |                            
|Shares issued under option and stock plans       |                                       |                                                         | 330,101   |          |         |                                       |          |                            
|Tax benefit on stock options exercised           |                                       |                                                         | 52,723    |          |         |                                       |          |                            
|Shares tendered as payment for options exercised |                                       |                                                         | (163,178  | )        |         |                                       |          |                            
|Purchases of treasury stock                      |                                       |                                                         | (332,886  | )        |         |                                       |          |                            
|Purchases and retirement of common stock         |                                       |                                                         | (25,630   | )        |         | (19,391                                | )        |                            
|Retirement of treasury stock                     |                                       |                                                         |          |          |         | (2,218,777                             | )        |                            
|Repayment of ESOP debt                           |                                       |                                                         | 33,772    |          |         |                                       |          |                            
|                                                 |                                       |                                                         |           |          |         |                                        |          |                            
|Balance at Dec. 28, 2003                         |                                       | $                                                       | 7,028,124 |          | $       | 3,008,460                              |          | $                          
|Comprehensive income:                            |                                       |                                                         |           |          |         |                                        |          |                            
|                                                 | Net income                            |                                                         |           | 555,536  |         |                                        | 555,536  |                            
|                                                 | Other comprehensive income:           |                                                         |           |          |         |                                        |          |                            
|                                                 |                                       | Change in unrealized gain on securities, net            |           |          | 896     |                                        |          |                           
|                                                 |                                       | Change in minimum pension liability, net                |           |          | (1,700  | )                                      |          |                           
|                                                 |                                       | Change in foreign currency translation adjustments, net |           |          | 118     |                                        |          |                           
|                                                 |                                       |                                                         |           |          |         |                                        |          |                            
|Comprehensive income                             |                                       |                                                         | 554,850   |          |         |                                       |          |                            
|Dividends declared:                              |                                       |                                                         |           |          |         |                                        |          |                            
|                                                 | Common ($.48 per share)               |                                                         |           | (154,702 | )       |                                        | (154,702 | )                          
|                                                 | Series C, D-1 and D-2 preferred       |                                                         |           | (8,308   | )       |                                        | (8,308   | )                          
|Shares issued under option and stock plans       |                                       |                                                         | 240,151   |          |         |                                       |          |                            
|Tax benefit on stock options exercised           |                                       |                                                         | 32,819    |          |         |                                       |          |                            
|Shares tendered as payment for options exercised |                                       |                                                         | (124,473  | )        |         | (51,879                                | )        |                            
|Purchases and retirement of common stock         |                                       |                                                         | (731,617  | )        |         | (538,565                               | )        |                            
|                                                 |                                       |                                                         |           |          |         |                                        |          |                            
|Balance at Dec. 26, 2004                         |                                       | $                                                       | 6,836,844 |          | $       | 2,810,542                              |          | $                          
|                                                 |                                       |                                                         |           |          |         |                                        |          |                            

---

See Notes to Consolidated Financial Statements.

62

---



|Common Stock and
Additional Paid-In Capital |            | Treasury Common Stock |          | Treasury Common
Stock Held by
Tribune Stock
Compensation Fund |   |            |  
|------------------------------------------- | ---------- | --------------------- | -------- | ------------------------------------------------------------- | - | ---------- | -
|
|$                                           | 8,183,407  |                       | 536,887  |                                                               | $ | (7,118,509 | )
|                                            |            |                       |          |                                                               |   |            |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |            |                       |          |                                                               |   |            |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |            |                       |          |                                                               |   |            |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |            |                       |          |                                                               |   |            |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            | (13,350    | )                     |         |                                                               |   | 36,088     |  
|                                            | 4,082      |                       |         |                                                               |   | 4,786      |  
|                                            | 115,953    |                       |         |                                                               |   | 220,908    |  
|                                            | 52,413     |                       |         |                                                               |   |           |  
|                                            |           |                       |         |                                                               |   | (158,794   | )
|                                            |           |                       |         |                                                               |   | (32,149    | )
|                                            |           |                       |         |                                                               |   |           |  
|                                            |            |                       |          |                                                               |   |            |  
|$                                           | 8,342,505  |                       | 536,887  |                                                               | $ | (7,047,670 | )
|                                            |            |                       |          |                                                               |   |            |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |            |                       |          |                                                               |   |            |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |            |                       |          |                                                               |   |            |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |            |                       |          |                                                               |   |            |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            | (179,778   | )                     |         |                                                               |   | 407,186    |  
|                                            | 117,565    |                       |         |                                                               |   | 160,175    |  
|                                            | 93,073     |                       | 39       |                                                               |   | 209,979    |  
|                                            | 52,723     |                       |         |                                                               |   |           |  
|                                            |           |                       |         |                                                               |   | (156,623   | )
|                                            |           |                       |         |                                                               |   | (312,392   | )
|                                            | (6,239     | )                     | (518     | )                                                             |   |           |  
|                                            | (1,495,365 | )                     | (124,038 | )                                                             |   | 3,714,142  |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |            |                       |          |                                                               |   |            |  
|$                                           | 6,924,484  |                       | 412,370  |                                                               | $ | (3,025,203 | )
|                                            |            |                       |          |                                                               |   |            |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |            |                       |          |                                                               |   |            |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |            |                       |          |                                                               |   |            |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            |            |                       |          |                                                               |   |            |  
|                                            |           |                       |         |                                                               |   |           |  
|                                            | 167,563    |                       | 5,006    |                                                               |   | 72,588     |  
|                                            | 32,819     |                       |         |                                                               |   |           |  
|                                            | (13,309    | )                     | (1,335   | )                                                             |   | (59,285    | )
|                                            | (193,052   | )                     | (15,526  | )                                                             |   |           |  
|                                            |            |                       |          |                                                               |   |            |  
|$                                           | 6,918,505  |                       | 400,515  |                                                               | $ | (3,011,900 | )
|                                            |            |                       |          |                                                               |   |            |  

63

---





TRIBUNE COMPANY AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF CASH FLOWS  (In thousands of dollars)

|                                                                        |                                                                                        | Year Ended                                                                                    |          
|----------------------------------------------------------------------- | -------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | ---------
|
|Operations                                                              |                                                                                        |                                                                                               |          
|Net income                                                              |                                                                                        | $                                                                                             | 555,536  
|Adjustments to reconcile net income to net cash provided by operations: |                                                                                        |                                                                                               |          
|                                                                        | (Gain) loss on changes in fair values of derivatives and related investments           |                                                                                               |          
|                                                                        | Loss on early debt retirement                                                          |                                                                                               |          
|                                                                        | Gain on sales of subsidiaries and investments, net                                     |                                                                                               |          
|                                                                        | Loss on investment write-downs                                                         |                                                                                               |          
|                                                                        | Gain on insurance recoveries                                                           |                                                                                               |          
|                                                                        | Other non-operating (gain) loss, net                                                   |                                                                                               |          
|                                                                        | Cumulative effect change in accounting principle, net of tax                           |                                                                                               |          
|                                                                        | Depreciation                                                                           |                                                                                               |          
|                                                                        | Amortization of intangible assets                                                      |                                                                                               |          
|                                                                        | Net (income) loss on equity investments                                                |                                                                                               |          
|                                                                        | Deferred income taxes                                                                  |                                                                                               |          
|                                                                        | Tax benefit on stock options exercised                                                 |                                                                                               |          
|                                                                        | Changes in working capital items excluding effects from acquisitions and dispositions: |                                                                                               |          
|                                                                        |                                                                                        | Accounts receivable                                                                           |          
|                                                                        |                                                                                        | Inventories, prepaid expenses and other current assets                                        |          
|                                                                        |                                                                                        | Accounts payable, employee compensation and benefits, deferred income and accrued liabilities |          
|                                                                        |                                                                                        | Income taxes                                                                                  |          
|                                                                        | Change in broadcast rights, net of liabilities                                         |                                                                                               |          
|                                                                        | Change in prepaid pension costs                                                        |                                                                                               |          
|                                                                        | Other, net                                                                             |                                                                                               |          
|                                                                        |                                                                                        |                                                                                               |          
|Net cash provided by operations                                         |                                                                                        |                                                                                               | 1,073,190
|                                                                        |                                                                                        |                                                                                               |          
|Investments                                                             |                                                                                        |                                                                                               |          
|Capital expenditures                                                    |                                                                                        |                                                                                               | (217,348 
|Acquisitions                                                            |                                                                                        |                                                                                               | (551     
|Investments                                                             |                                                                                        |                                                                                               | (48,831  
|Proceeds from sales of subsidiaries and investments                     |                                                                                        |                                                                                               | 40,232   
|Other, net                                                              |                                                                                        |                                                                                               |         
|                                                                        |                                                                                        |                                                                                               |          
|Net cash used for investments                                           |                                                                                        |                                                                                               | (226,498 
|                                                                        |                                                                                        |                                                                                               |          
|Financing                                                               |                                                                                        |                                                                                               |          
|Proceeds from issuance of commercial paper, net of repayments           |                                                                                        |                                                                                               | 773,206  
|Premium on early debt retirement                                        |                                                                                        |                                                                                               | (137,331 
|Repayments of long-term debt                                            |                                                                                        |                                                                                               | (823,028 
|Sales of common stock to employees, net                                 |                                                                                        |                                                                                               | 111,896  
|Purchases of treasury common stock related to the ESOP                  |                                                                                        |                                                                                               |         
|Purchases of treasury common stock by Tribune Stock
Compensation Fund   |                                                                                        |                                                                                               |         
|Other purchases of common stock                                         |                                                                                        |                                                                                               | (731,617 
|Dividends                                                               |                                                                                        |                                                                                               | (163,010 
|                                                                        |                                                                                        |                                                                                               |          
|Net cash used for financing                                             |                                                                                        |                                                                                               | (969,884 
|                                                                        |                                                                                        |                                                                                               |          
|Net Increase (Decrease) in Cash and Cash Equivalents                    |                                                                                        |                                                                                               | (123,192 
|Cash and cash equivalents, beginning of year                            |                                                                                        |                                                                                               | 247,603  
|                                                                        |                                                                                        |                                                                                               |          
|Cash and cash equivalents, end of year                                  |                                                                                        | $                                                                                             | 124,411  
|                                                                        |                                                                                        |                                                                                               |          

See Notes to Consolidated Financial Statements.

64

---



TRIBUNE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies of Tribune Company and subsidiaries (the "Company"), as summarized below, conform with accounting principles generally
accepted in the United States of America and reflect practices appropriate to the Company's businesses.

Nature of OperationsThe Company is a media and entertainment company. Through its subsidiaries, the Company is engaged in newspaper
publishing, television and radio broadcasting and entertainment.

Fiscal YearThe Company's fiscal year ends on the last Sunday in December. Fiscal years 2004, 2003 and 2002 each comprised 52 weeks.

Principles of ConsolidationThe consolidated financial statements include the accounts of Tribune Company and all majority-owned
subsidiaries. In general, investments comprising 20 to 50 percent of the voting stock of companies and certain partnership interests are accounted for using the equity method. All other
investments are generally accounted for using the cost method. All significant intercompany transactions are eliminated.

The
Company evaluates its investments and other transactions for consolidation under the provisions of Financial Accounting Standards Board ("FASB") Interpretation No. 46,
"Consolidation of Variable Interest Entities" ("FIN 46"), issued in January 2003. The Company holds significant variable interests, as defined by FIN 46, in CareerBuilder, LLC,
Classified Ventures, LLC and CrossMedia Services, Inc., but the Company has determined that it is not the primary beneficiary of these entities. The Company's maximum loss exposure related to
these entities is limited to its equity investments in CareerBuilder, LLC, Classified Ventures, LLC and CrossMedia Services, Inc. which were $81 million, $8 million and
$24 million, respectively, at Dec. 26, 2004. At Dec. 28, 2003, the Company's equity investments in CareerBuilder, LLC and Classified Ventures, LLC were $84 million and
$9 million, respectively.

PresentationCertain prior year financial information has been reclassified to conform to the current year presentation.

Revenue RecognitionThe Company's primary sources of revenue are from the sales of advertising space in published issues of its newspapers
and on interactive websites owned by, or affiliated with, the Company; sales of newspapers to distributors and individual subscribers; and sales of airtime on its television and radio stations.
Newspaper advertising revenue is recorded, net of agency commissions, when advertisements are published in newspapers. Website advertising revenue is recognized ratably over the contract period or as
services are delivered, as appropriate. Proceeds from subscriptions are deferred and are included in revenue on a pro-rata basis over the term of the subscriptions. Broadcast revenue is
recorded, net of agency commissions, when commercials are aired. The Company records rebates when earned as a reduction of advertising revenue.

Use of EstimatesThe preparation of financial statements in conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.

Cash and Cash EquivalentsCash and cash equivalents are stated at cost, which approximates market value. Investments with original
maturities of three months or less at the time of purchase are considered to be cash equivalents.

Accounts ReceivableThe Company's accounts receivable are primarily due from advertisers. Credit is extended based on an evaluation of each
customer's financial condition, and generally collateral is not

65

---



required.
The Company maintains an allowance for uncollectible accounts, rebates and volume discounts. This allowance is determined based on historical write-off experience and any known specific
collectibility exposures.

InventoriesInventories are stated at the lower of cost or market. Cost is determined on the last-in, first-out
("LIFO") basis for newsprint and on the first-in, first-out ("FIFO") or average basis for all other inventories.

Broadcast RightsBroadcast rights consist principally of rights to broadcast syndicated programs, sports and feature films and are stated at
the lower of cost or estimated net realizable value. The total cost of these rights is recorded as an asset and a liability when the program becomes available for broadcast. Syndicated program rights
that have limited showings are generally amortized using an accelerated method as programs are aired. Sports and feature film rights are amortized using the straight-line method. The
current portion of broadcast rights represents those rights available for broadcast that are expected to be amortized in the succeeding year.

The
Company maintains an allowance for programming that is not expected to be aired by the end of the contract period. This allowance for excess programming inventory is based on a
program-by-program review of the Company's five-year broadcast plans and historical write-off trends. The total reserve balance at Dec. 26, 2004
and Dec. 28, 2003 was $5 million and $16 million, respectively. Actual write-offs in 2004 and 2003 were $12 million and $3 million, respectively. Future
write-offs can vary based on changes in consumer viewing trends and the availability and costs of other programming.

PropertiesProperty, plant and equipment are stated at cost. Depreciation is computed using the straight-line method over the
following estimated useful lives: 10 to 40 years for buildings, 7 to 20 years for newspaper printing presses and 3 to 10 years for all other equipment. The Company capitalizes
interest costs as part of the cost of constructing major facilities and equipment.

Goodwill and Other Intangible AssetsGoodwill and other intangible assets are summarized in Note 6. At the beginning of the 2002
fiscal year, the Company adopted Financial Accounting Standard ("FAS") No. 142, "Goodwill and Other Intangible Assets," which requires that goodwill and certain intangible assets no longer be
amortized to earnings, but be reviewed periodically for impairment. Under FAS No. 142, the impairment review of goodwill and other intangible assets not subject to amortization must be based
generally on fair values.

As
a result of initially applying the new impairment provisions of FAS No. 142, the Company recorded a pretax charge of $271 million ($166 million
after-tax) in the first quarter of 2002. The charge related to certain of the Company's newspaper mastheads ($226 million), a Federal Communications Commission ("FCC") license
($43 million) and a television network affiliation agreement ($2 million), and is presented as the cumulative effect of a change in accounting principle in the Company's consolidated
statements of income. The impairments were primarily the result of decreases in operating revenues compared to forecasts prepared at the dates the respective companies were acquired.

The
estimated fair value of the reporting units to which goodwill is allocated is determined using multiples of operating cash flows for purposes of analyzing goodwill for impairment.
The estimated fair values of other assets subject to the annual impairment review, which include newspaper mastheads and FCC licenses, are calculated based on projected future discounted cash flow
analyses. The development of market multiples and cash flow projections used in the analyses requires the use of assumptions, including assumptions regarding revenue and market growth. The analyses
use discount rates based on

66

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specific
economic factors in the publishing and broadcasting industries. These assumptions reflect the Company's best estimates, but these items involve inherent uncertainties based on market
conditions generally outside of the Company's control.

In
the fourth quarter of 2004, the Company elected to early adopt the provisions of the FASB's Emerging Issues Task Force Topic No. D-108, which requires the use of a
direct valuation method for valuing intangible assets, such as FCC licenses, and reviewing them for impairment. Historically, the Company had been using a residual valuation method to review its FCC
licenses for impairment each year. A direct valuation method generally results in a lower valuation than does a residual valuation method. The Company performed an impairment review of its FCC
licenses for the years ended Dec. 28, 2003 and Dec. 29, 2002 using a residual method. No impairments were required as a result of the analyses performed in those years. The effect of
changing to a direct valuation method for the 2004 FCC licenses impairment review was a pretax charge of $29 million ($18 million after-tax). The charge was recorded in the
fourth quarter of 2004 as a cumulative effect of a change in accounting principle in the consolidated statements of income.

Upon
the adoption of FAS No. 142 at the beginning of fiscal 2002, the Company treated the intangible assets associated with network affiliation agreements as having indefinite
lives and stopped recording amortization expense on these assets. In December 2003, the staff of the Securities and Exchange Commission provided guidance regarding their accounting position in
this area indicating that network affiliation agreements should be amortized. As a result, the Company began amortizing these assets in the fourth quarter of 2003 using a 40-year life. The
Company believes the 40-year life is representative of the remaining expected useful life of the network affiliation intangibles. The provisions of FAS No. 142 required the Company
to perform an impairment analysis at the time of a change in the estimated useful life of an intangible asset which was previously not being amortized. No adjustment to the network affiliation
intangible assets was required as a result of this impairment review performed in the fourth quarter of 2003. Beginning in 2004, the Company no longer performs an annual test of the impairment of its
network affiliation agreements under FAS No. 142, but will perform an impairment test if indicators of impairment are present, as required by FAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets."

InvestmentsThe Company records its investments in debt and equity securities at fair value, except for debt securities that the Company
intends to hold to maturity and equity securities that are accounted for under the equity method or that are issued by private companies. Except for 16 million Time Warner shares (see
"Derivative Instruments" below), investments are currently classified as available-for-sale, and accordingly, the difference between cost and fair
value, net of related tax effects, is recorded in the accumulated other comprehensive income component of shareholders' equity.

Derivative InstrumentsFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," requires all derivative
instruments to be recorded in the balance sheet at fair value. Changes in the fair value of derivative instruments are recognized periodically in income. The provisions of FAS No. 133 affect
the Company's accounting for its 8 million Exchangeable Subordinated Debentures due 2029 ("PHONES") (see Note 9) and its interest rate swap related to its $100 million 7.5%
debentures (see Note 9).

Under
the provisions of FAS No. 133, the initial value of the PHONES was split into a debt component and a derivative component. Changes in the fair value of the derivative
component of the PHONES are recorded in the statement of income. Beginning in the second quarter of 1999, changes in the fair value of the related 16 million Time Warner shares are also
recorded in the statement of income and should at least partially offset changes in the fair value of the derivative component of the

67

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PHONES.
However, there have been and may continue to be periods with significant non-cash increases or decreases to the Company's net income pertaining to the PHONES and the related Time
Warner shares.

The
carrying values of the Company's derivative instruments approximate fair value. The fair values of the PHONES were determined by reference to market values resulting from trading on
a national securities exchange.

The
Company's interest rate swap is a fair value hedge and is used to manage exposure to market risk associated with changes in interest rates. The changes in fair value of the swap
agreement and the related debt instrument are recorded in income. Changes in the fair value of the swap agreement should offset changes in the fair value of the related debt (see Note 9).

Pension PlansRetirement benefits are provided to employees through pension plans sponsored either by the Company or by unions. Under the
Company-sponsored plans, pension benefits are primarily a function of both the years of service and the level of compensation for a specified number of years, depending on the plan. It is the
Company's policy to fund the minimum for Company-sponsored pension plans as required by ERISA. Contributions made to union-sponsored plans are based upon collective bargaining agreements. Additional
information is provided in Note 14.

Postretirement Benefits Other than PensionsThe Company provides certain health care and life insurance benefits for retired employees. The
expected cost of providing these benefits is
accrued over the years that the employees render services. It is the Company's policy to fund postretirement benefits as claims are incurred. Additional information is provided in Note 14.

Self-InsuranceThe Company self-insures for certain employee medical and disability income benefits, workers'
compensation costs and automobile and general liability claims. The recorded liabilities for self-insured risks are calculated using actuarial methods and are not discounted. The recorded
liabilities for self-insured risks totaled $119 million and $114 million at Dec. 26, 2004 and Dec. 28, 2003, respectively.

Deferred IncomeDeferred income arises in the normal course of business from advance subscription payments for newspapers, interactive
advertising sales and prepaid ticket revenue related to the Chicago Cubs. Deferred income is recognized in the period it is earned.

Stock-Based CompensationThe Company accounts for its stock-based compensation plans in accordance with Accounting Principles Board ("APB")
Opinion No. 25 and related interpretations. Under APB No. 25, no compensation expense is recorded because the exercise price of employee stock options equals the market price of the
underlying stock on the date of grant.

Under
FAS No. 123, "Accounting for Stock-Based Compensation," as amended by FAS No. 148, compensation cost is measured at the grant date based on the estimated fair value
of the award and is recognized as compensation expense over the vesting period. Had compensation cost for these plans

68

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been
determined consistent with FAS No. 123, the Company's full year net income and EPS would have been reduced to the following pro forma amounts (in thousands, except per share data):

|                                                                   |                                       | Dec. 26, 2004 |         | Dec. 28, 2003 |   | Dec. 29, 2002 |        
|------------------------------------------------------------------ | ------------------------------------- | ------------- | ------- | ------------- | - | ------------- | -------
|Net income, as reported                                            |                                       | $             | 555,536 |               | $ | 891,379       |        
|Less: Total stock-based employee compensation expense,
net of tax: |                                       |               |         |               |   |               |        
|                                                                   | General awards                        |               |         | (49,887       | ) |               | (56,402
|                                                                   | Replacement options                   |               |         | (17,245       | ) |               | (15,582
|                                                                   | Merit options                         |               |         |              |   |               | (202   
|                                                                   | Employee Stock Purchase Plan ("ESPP") |               |         | (3,808        | ) |               | (3,640 
|                                                                   |                                       |               |         |               |   |               |        
|Total compensation expense, net of tax                             |                                       |               | (70,940 | )             |   | (75,826       | )      
|                                                                   |                                       |               |         |               |   |               |        
|Pro forma net income                                               |                                       |               | 484,596 |               |   | 815,553       |        
|Preferred dividends                                                |                                       |               | (8,308  | )             |   | (24,441       | )      
|                                                                   |                                       |               |         |               |   |               |        
|Pro forma net income attributable to common shares                 |                                       | $             | 476,288 |               | $ | 791,112       |        
|Weighted average common shares outstanding                         |                                       |               | 322,420 |               |   | 311,295       |        
|Basic EPS, as reported                                             |                                       | $             | 1.70    |               | $ | 2.78          |        
|Basic EPS, pro forma                                               |                                       | $             | 1.48    |               | $ | 2.54          |        
|Adjusted weighted average common shares outstanding                |                                       |               | 327,237 |               |   | 336,243       |        
|Diluted EPS, as reported                                           |                                       | $             | 1.67    |               | $ | 2.61          |        
|Diluted EPS, pro forma                                             |                                       | $             | 1.46    |               | $ | 2.38          |        

In
determining the pro forma compensation cost under the fair value method of FAS No. 123, using the Black-Scholes option pricing model, the following weighted
average assumptions were used for general awards and replacement options:

|                                |  | 2004 |       | 2003 |   | 2002(1) |  
|------------------------------- |  | ---- | ----- | ---- | - | ------- | -
|
|Risk-free interest rate         |  |      | 3.2   | %    |   | 1.7     | %
|Expected dividend yield         |  |      | 1.0   | %    |   | 1.0     | %
|Expected stock price volatility |  |      | 31.1  | %    |   | 25.4    | %
|Expected life (in years)        |  |      | 5     |      |   | 2       |  
|Weighted average fair value     |  | $    | 15.45 |      | $ | 7.46    |  

---

Income TaxesThe Company accounts for certain income and expense items differently for financial
reporting purposes than for income tax reporting purposes. The Company records its tax liabilities based on estimates of the amount of taxes that will ultimately be paid. Deferred income taxes are
provided in recognition of the temporary differences and are summarized in Note 13. Since the Company's tax returns are subject to audit by the Internal Revenue Service ("IRS") and various
states, tax liabilities are maintained for estimated federal and state audit adjustments. The resolutions of the Company's tax issues are unpredictable and could result in tax liabilities that are
significantly higher or lower than that which has been provided by the Company.

Comprehensive IncomeComprehensive income consists of net income and other gains and losses affecting shareholders' equity that, under
accounting principles generally accepted in the United States

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of
America, are excluded from net income. Other comprehensive income primarily includes gains and losses on marketable securities classified as available-for-sale. The
Company's comprehensive income is summarized in Note 17.

New Accounting StandardsIn December 2004, the FASB issued FAS No. 123R, "Share-Based Payment." FAS No. 123R supercedes
APB No. 25, FAS No. 123, as amended by FAS No. 148, and related interpretations. Under FAS No. 123R, compensation cost is measured at the grant date based on the estimated
fair value of the award and is required to be recognized as compensation expense over the vesting period. The Company plans to adopt FAS No. 123R in the third quarter of 2005. The Company is in
the process of analyzing the impact of the adoption of FAS No. 123R on its 2005 financial statements.

Earnings Per Share ("EPS")Basic EPS is computed by dividing net income attributable to common shares by the weighted average number of
common shares outstanding during the period. Diluted EPS for the years ended Dec. 28, 2003 and Dec. 29, 2002 was computed assuming that the Series B convertible preferred shares
held by the Company's Employee Stock Ownership Plan ("ESOP") and the Liquid Yield Option Notes ("LYONs") debt securities had been converted into common shares. The Series B convertible
preferred shares were converted into approximately 15.4 million shares of common stock on Dec. 16, 2003, and the LYONs were converted into approximately 7.0 million shares of
common stock during June 2003. Therefore, weighted average converted shares for the Series B preferred stock and LYONs were used in the 2003 calculation. In addition, weighted average
common shares outstanding were adjusted for the dilutive effect of stock options. The Company's stock options and convertible securities are included in the calculation of diluted EPS only when their
effects are dilutive. In the 2004, 2003 and 2002 calculations of diluted EPS, 2.3 million, 2.3 million and 2.5 million shares, respectively, of the Company's Series C,
D-1 and D-2 convertible preferred stocks, and 10.6 million, 3.2 million and 4.1 million shares, respectively, of the Company's outstanding options, were
not reflected because their effects were antidilutive.

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The
computations of basic and diluted EPS were as follows (in thousands, except per share data):

|                                                                                                    |  | 2004 |         | 2003 |   | 2002    |  
|--------------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- | - | ------- | -
|Basic EPS                                                                                           |  |      |         |      |   |         |  
|Income before cumulative effect of change in accounting principle                                   |  | $    | 573,324 |      | $ | 891,379 |  
|Cumulative effect of change in accounting principle, net of tax                                     |  |      | (17,788 | )    |   |        |  
|                                                                                                    |  |      |         |      |   |         |  
|Net income                                                                                          |  | $    | 555,536 |      | $ | 891,379 |  
|Preferred dividends, net of tax                                                                     |  |      | (8,308  | )    |   | (24,441 | )
|                                                                                                    |  |      |         |      |   |         |  
|Net income attributable to common shares                                                            |  | $    | 547,228 |      | $ | 866,938 |  
|Weighted average common shares outstanding                                                          |  |      | 322,420 |      |   | 311,295 |  
|                                                                                                    |  |      |         |      |   |         |  
|Basic EPS:                                                                                          |  |      |         |      |   |         |  
|Before cumulative effect of change in accounting principle                                          |  | $    | 1.75    |      | $ | 2.78    |  
|Cumulative effect of change in accounting principle, net of tax                                     |  |      | (.05    | )    |   |        |  
|                                                                                                    |  |      |         |      |   |         |  
|Total                                                                                               |  | $    | 1.70    |      | $ | 2.78    |  
|                                                                                                    |  |      |         |      |   |         |  
|Diluted EPS                                                                                         |  |      |         |      |   |         |  
|Income before cumulative effect of change in accounting principle                                   |  | $    | 573,324 |      | $ | 891,379 |  
|Cumulative effect of change in accounting principle, net of tax                                     |  |      | (17,788 | )    |   |        |  
|                                                                                                    |  |      |         |      |   |         |  
|Net income                                                                                          |  | $    | 555,536 |      | $ | 891,379 |  
|Additional ESOP contribution required assuming Series B preferred shares were converted, net of tax |  |      |        |      |   | (9,100  | )
|Dividends on Series C, D-1 and D-2 preferred stock                                                  |  |      | (8,308  | )    |   | (8,252  | )
|LYONs interest expense, net of tax                                                                  |  |      |        |      |   | 2,884   |  
|                                                                                                    |  |      |         |      |   |         |  
|Adjusted net income                                                                                 |  | $    | 547,228 |      | $ | 876,911 |  
|                                                                                                    |  |      |         |      |   |         |  
|Weighted average common shares outstanding                                                          |  |      | 322,420 |      |   | 311,295 |  
|Assumed conversion of Series B preferred shares into common shares                                  |  |      |        |      |   | 15,171  |  
|Assumed exercise of stock options, net of common shares assumed repurchased with the proceeds       |  |      | 4,817   |      |   | 6,565   |  
|Assumed conversion of LYONs debt securities                                                         |  |      |        |      |   | 3,212   |  
|                                                                                                    |  |      |         |      |   |         |  
|Adjusted weighted average common shares outstanding                                                 |  |      | 327,237 |      |   | 336,243 |  
|                                                                                                    |  |      |         |      |   |         |  
|Diluted EPS:                                                                                        |  |      |         |      |   |         |  
|Before cumulative effect of change in accounting principle                                          |  | $    | 1.72    |      | $ | 2.61    |  
|Cumulative effect of change in accounting principle, net of tax                                     |  |      | (.05    | )    |   |        |  
|                                                                                                    |  |      |         |      |   |         |  
|Total                                                                                               |  | $    | 1.67    |      | $ | 2.61    |  
|                                                                                                    |  |      |         |      |   |         |  

NOTE 2: CHANGES IN OPERATIONS AND NON-OPERATING ITEMS

AcquisitionsThe Company had no material acquisitions in 2004. The Company completed acquisitions totaling approximately $275 million
in 2003 and $162 million in 2002 for cash and other consideration, including the value of the Denver radio station group assets that were divested in exchange transactions during 2003 and 2002.
The results of the acquired companies are included in the consolidated statements of income since their respective dates of acquisition. None of these acquisitions were material in relation to the
Company's consolidated financial statements.

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On
March 21, 2003, the Company acquired the stock of KPLR-TV, St. Louis, and the assets of KWBP-TV, Portland, Ore., from ACME Communications for a total of
$275 million. The Company acquired the stock of KPLR-TV for $200 million in cash. The acquisition of the assets of KWBP-TV was structured as a
like-kind asset exchange for income tax purposes. It was funded with the remaining assets of the Denver radio station group (KKHK-FM, now known as KQMT-FM) with an
estimated fair market value of $55 million, plus $20 million in cash. The Company has allocated $153 million, $42 million and $136 million of the purchase price to
FCC licenses, network affiliations and goodwill, respectively.

On
Aug. 1, 2002, the Company acquiredChicagomagazine from Primedia, Inc. for $35 million in cash. Chicagomagazine, a monthly publication,
serves as a reference guide for entertainment, dining, shopping and real estate for the Chicagoland area.

On
July 24, 2002, the Company transferred certain assets of the Denver radio station group (KOSI-FM and KEZW-AM) with a value of $125 million to
Entercom Communications Corp. ("Entercom") in exchange for the assets of WTTV-TV, Indianapolis, and its satellite station, WTTK-TV in Kokomo, Indiana, which Entercom acquired
from Sinclair Broadcast Group for $125 million. The transactions were structured as a like-kind asset exchange for income tax purposes.

Supplemental Cash Flow InformationInformation for acquisitions made in 2004, 2003 and 2002 is summarized in the table below (in thousands):

|                                                      |  | 2004 |      | 2003 |   | 2002    |  
|----------------------------------------------------- |  | ---- | ---- | ---- | - | ------- | -
|Fair value of assets acquired(1)                      |  | $    | 854  |      | $ | 349,434 |  
|Fair value of assets disposed in exchange transaction |  |      |     |      |   | (51,069 | )
|Liabilities assumed                                   |  |      | (303 | )    |   | (60,854 | )
|                                                      |  |      |      |      |   |         |  
|Net cash paid                                         |  | $    | 551  |      | $ | 237,511 |  
|                                                      |  |      |      |      |   |         |  

---

Cash paid for interest and income taxes in 2004, 2003 and 2002 is summarized below (in thousands):

|             |  | 2004 |         | 2003 |   | 2002   
|------------ |  | ---- | ------- | ---- | - | -------
|Interest     |  | $    | 138,392 |      | $ | 172,524
|Income taxes |  | $    | 286,129 |      | $ | 177,969

On May 22, 2003, the Company issued a notice to the holders of the LYONs that the Company would redeem this debt issue on June 23,
2003. All of the LYONs holders converted their notes, which had a recorded value of $278 million, into approximately 7 million shares of common stock prior to the redemption date.

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Non-Operating ItemsFiscal years 2004, 2003 and 2002 included several non-operating items. Non-operating
items for 2004 are summarized as follows (in thousands):

|                                                                      |  | Proceeds |        | Pretax
Gain (Loss) |   | After-tax
Gain (Loss) |  
|--------------------------------------------------------------------- |  | -------- | ------ | ------------------ | - | --------------------- | -
|Loss on changes in fair values of derivatives and
related investments |  | $        |       |                    | $ | (18,497               | )
|Loss on early debt retirement                                         |  |          |       |                    |   | (140,506              | )
|Gain on sales of subsidiaries and investments, net                    |  |          | 23,973 |                    |   | 20,347                |  
|Loss on investment write-downs and other, net                         |  |          | 16,259 |                    |   | (6,388                | )
|                                                                      |  |          |        |                    |   |                       |  
|Total non-operating items                                             |  | $        | 40,232 |                    | $ | (145,044              | )
|                                                                      |  |          |        |                    |   |                       |  

In 2004, changes in the fair values of derivatives and related investments related entirely to the Company's PHONES and related Time Warner
investment. The $18 million non-cash pretax loss resulted from a $39 million increase in the fair value of the derivative component of the Company's PHONES, which was offset
by a $21 million increase in the fair value of 16 million shares of Time Warner common stock.

In
the second quarter of 2004, the Company redeemed all of its outstanding $400 million ($396 million net of unamortized discount) 7.45% debentures due 2009 and retired
$66 million ($64 million net of unamortized discount) of its 7.25% debentures due 2013 and $165 million ($160 million net of unamortized discount) of its 6.61% debentures
due 2027 through cash tender offers. The Company paid approximately $760 million to retire this debt and, as a result, recorded a one-time, pretax loss of $141 million in the
second quarter of 2004. The Company funded these transactions with cash and the issuance of commercial paper.

In
2004, the gain on sales of subsidiaries and investments related primarily to the sale of the Company's 50% interest inLa
Opiniónfor $20 million, resulting in a pretax gain of $18 million.

Non-operating
items for 2003 are summarized as follows (in thousands):

|                                                                      |  | Proceeds |         | Pretax
Gain (Loss) |   | After-tax
Gain (Loss) |  
|--------------------------------------------------------------------- |  | -------- | ------- | ------------------ | - | --------------------- | -
|Gain on changes in fair values of derivatives and related
investments |  | $        |        |                    | $ | 84,066                |  
|Gain on sales of subsidiaries and investments, net                    |  |          | 174,836 |                    |   | 147,507               |  
|Loss on investment write-downs                                        |  |          |        |                    |   | (9,764                | )
|Gain on insurance recoveries                                          |  |          | 27,000  |                    |   | 22,291                |  
|Other non-operating loss, net                                         |  |          |        |                    |   | (2,853                | )
|Income tax settlement adjustments                                     |  |          |        |                    |   |                      |  
|                                                                      |  |          |         |                    |   |                       |  
|Total non-operating items                                             |  | $        | 201,836 |                    | $ | 241,247               |  
|                                                                      |  |          |         |                    |   |                       |  

In 2003, changes in the fair values of derivatives and related investments related entirely to the Company's PHONES and related Time Warner
investment. The $84 million non-cash pretax gain resulted from an $86 million increase in the fair value of 16 million shares of Time Warner common stock, which was
offset by a $2 million increase in the fair value of the derivative component of the PHONES. Also in 2003, the Company determined that the decline in fair value of certain public and private
investments was other than temporary and wrote down the investments to fair value. The write-downs totaled $10 million in 2003.

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In 2003, the gain on sales of subsidiaries and investments resulted primarily from the divestiture of the Company's remaining Denver radio station
KKHK-FM and the sale of the Company's investment in The Golf Channel. KKHK-FM, now known as KQMT-FM, plus $20 million in cash, was exchanged for the assets
of KWBP-TV, Portland, Ore., and resulted in a pretax gain of $51 million. The sale of the investment in The Golf Channel resulted in a pretax gain of $48 million.

In
2003, the Company recorded a gain of $22 million as a result of settling the business interruption and property damage claims filed by WPIX-TV, New York, as a
result of the events of Sept. 11, 2001.

In
2003, the Company reduced its income tax expense and liabilities by a total of $25 million as a result of favorably resolving certain state income tax issues.

Non-operating
items for 2002 are summarized as follows (in thousands):

|                                                                      |  | Proceeds |        | Pretax
Gain (Loss) |   | After-tax
Gain (Loss) |  
|--------------------------------------------------------------------- |  | -------- | ------ | ------------------ | - | --------------------- | -
|Loss on changes in fair values of derivatives
and related investments |  | $        |       |                    | $ | (161,228              | )
|Gain on sales of subsidiaries and investments                         |  |          | 66,415 |                    |   | 106,216               |  
|Loss on investment write-downs                                        |  |          |       |                    |   | (18,347               | )
|Other non-operating gain, net                                         |  |          |       |                    |   | 10,148                |  
|Income tax settlement adjustments                                     |  |          |       |                    |   |                      |  
|                                                                      |  |          |        |                    |   |                       |  
|Total non-operating items                                             |  | $        | 66,415 |                    | $ | (63,211               | )
|                                                                      |  |          |        |                    |   |                       |  

In 2002, changes in the fair values of derivatives and related investments related entirely to the Company's PHONES and related Time Warner
investment. The $161 million non-cash pretax loss resulted from a $331 million decrease in the fair value of 16 million shares of Time Warner common stock, which was
offset by a $169 million decrease in the fair value of the derivative component of the PHONES. Also in 2002, the Company determined that the decline in fair value of certain public and private
investments was other than temporary and wrote down the investments to fair value. The write-downs totaled $18 million in 2002.

In
July 2002, the Company exchanged two of its Denver radio stations, KOSI-FM and KEZW-AM, for the assets of two television stations, WTTV-TV,
Indianapolis, and its satellite station WTTK-TV, Kokomo, Indiana. The divestiture of the Denver radio station assets resulted in a pretax gain of $108 million.

In
2002, the Company favorably resolved certain federal and state income tax issues. As a result, the Company reduced its income tax expense and liabilities by a total of
$35 million. Approximately $29 million of the adjustment was classified as a non-operating item.

NOTE
3:NEWSDAYANDHOY,NEW
YORK CHARGE

On
Feb. 11, 2004, a purported class action lawsuit was filed in New York Federal Court by certain advertisers ofNewsdayand Hoy, New York, alleging that
they were overcharged for advertising as a result of inflated circulation numbers at these two publications. The purported
class action also alleges that entities that paid aNewsdaysubsidiary to deliver advertising flyers were overcharged. On July 21, 2004, another
lawsuit was filed in New York Federal Court by certain advertisers ofNewsdayalleging damages resulting from inflated Newsdaycirculation numbers as well
as federal and state antitrust

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violations.
On Oct. 8, 2004, a third lawsuit was filed in New York State Court by a formerNewsdayadvertiser alleging damages resulting from
inflatedNewsdaycirculation numbers. The Oct. 8, 2004 lawsuit has been settled and the Company intends to vigorously defend the other two suits.

On
June 17, 2004, the Company publicly disclosed that it would reduce its reported circulation for bothNewsdayand Hoy, New York, for the 12-month
period ending Sept. 30, 2003 and the six-month period ending March 31, 2004. The
circulation adjustments were the result of a review of reported circulation atNewsdayandHoy, New
York, conducted by the Company's internal audit staff and the Audit Bureau of Circulations ("ABC"). Subsequent to the June 17th disclosure, the Company continued its internal
review and found additional misstatements for these time periods, as well as misstatements that impacted the 12-month period ending Sept. 30, 2002. On Sept. 10, 2004, the
Company announced additional revisions to the circulation figures forNewsdayandHoy, New York, for the
12-month period ending Sept. 30, 2003 and the six-month period ending March 31, 2004. In November 2004, ABC released its audit reports for NewsdayandHoy, New York, for the 12-month period ending Sept. 30, 2003. ABC's
circulation audits atNewsdayandHoy, New York, for the six-month periods ending
March 31, 2004 and Sept. 30, 2004 are ongoing.

On
July 12, 2004, ABC announced that it was censuringNewsdayandHoy, New York,
for improper circulation practices. As part of the censure, ABC will be auditingNewsdayandHoy, New
York, every six months, instead of annually, through the six-month period ending Sept. 30, 2005. In addition,Newsdayand Hoy, New York, will not be
able to publish their six-month circulation statistics prior to the completion of the ABC audits for the
six-months ending March 31, 2005. Finally,NewsdayandHoy, New York, were required
to submit a plan to ABC for correcting their circulation practices. The Company submitted the corrective plan to ABC in October 2004 and has been working with ABC to fully comply with the terms
of the censure.

As
a result of misstatements of reported circulation atNewsdayandHoy, New York, the
Company recorded a pretax charge of $35 million in the second quarter of 2004 as its estimate of the probable cost to settle with advertisers based upon facts available at July 30, 2004,
the date of the Company's second quarter 2004 Form 10-Q filing. Since that date, the Company found additional circulation misstatements, which increased the cost to settle with
advertisers. As a result, the Company
recorded an additional pretax charge of $55 million in the third quarter of 2004 to increase the estimate of the probable cost to settle with NewsdayandHoy, New York, advertisers to a total of $90 million. The Company will continue to
evaluate the adequacy of this charge on an ongoing basis.

A
summary of the activity with respect to theNewsdayandHoy, New York, advertiser
settlement accrual is as follows (in millions):

|Accrual balance at Dec. 28, 2003 |           | $ |   |    
|-------------------------------- | --------- | - | -- | ---
|                                 | Provision |   |    | 90 
|                                 | Payments  |   |    | (41
|                                 |           |   |   
|Accrual balance at Dec. 26, 2004 |           | $ | 49 |    
|                                 |           |   |   

The
Securities and Exchange Commission, the United States Attorney for the Eastern District of New York and the Nassau County District Attorney are conducting inquiries into the
circulation practices atNewsdayandHoy, New York. The Company is cooperating fully with these
inquiries. At the date of this report, the Company cannot predict with certainty the outcome of these inquiries.

ABC's
annual circulation audits at the Company's other newspapers are ongoing. In addition, during the third quarter of 2004, the Company's internal auditors began reviews of the
circulation

75

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practices
at all of the Company's other print publications. The internal audit reviews have been completed for all of the Company's paid daily newspapers. The reviews for Chicagomagazine and other non-paid and
weekly newspapers are expected to be completed during the first half of 2005. To date, the Company's
internal reviews have found that circulation practices at the Company's other daily newspapers are sound and that no material adjustments are required to be made to previously reported circulation
numbers.

NOTE 4: RESTRUCTURING CHARGES

In 2002, the Company recorded pretax restructuring charges of $27 million ($17 million after-tax) for various cost reduction
initiatives. Approximately 300 full-time equivalent employee positions were eliminated as a result of these initiatives. Pretax restructuring charges of $25 million were recorded at
publishing, $1 million at broadcasting and entertainment and $1 million at corporate during 2002. These restructuring charges, consisting primarily of compensation expense, are presented
as a separate line item in the consolidated statements of income.

A
summary of the significant components of the pretax restructuring charges for the year ended Dec. 29, 2002, is as follows (in millions):

|                                        |  | Publishing |      | Broadcasting |   | Corporate |  | Total
|--------------------------------------- |  | ---------- | ---- | ------------ | - | --------- |  | -----
|Severance costs                         |  | $          | 18.2 |              | $ | 0.8       |  | $    
|Enhanced early retirement pension costs |  |            | 2.2  |              |   |          |  |      
|Asset disposals                         |  |            | 3.0  |              |   | 0.3       |  |      
|Lease termination costs                 |  |            | 1.6  |              |   |          |  |      
|                                        |  |            |      |              |   |           |  |      
|Total                                   |  | $          | 25.0 |              | $ | 1.1       |  | $    
|                                        |  |            |      |              |   |           |  |      

A
summary of the activity with respect to the Company's restructuring accrual is as follows (in millions):

|Restructuring accrual at Dec. 29, 2002 |          | $ | 11.1 |     
|-------------------------------------- | -------- | - | ---- | ----
|                                       | Payments |   |      | (7.6
|                                       |          |   |     
|Restructuring accrual at Dec. 28, 2003 |          | $ | 3.5  |     
|                                       | Payments |   |      | (1.6
|                                       |          |   |     
|Restructuring accrual at Dec. 26, 2004 |          | $ | 1.9  |     
|                                       |          |   |     

The remaining accrual is primarily for lease termination costs.

76

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NOTE 5: INVENTORIES

Inventories consisted of the following (in thousands):

|                    |  | Dec. 26, 2004 |        | Dec. 28, 2003
|------------------- |  | ------------- | ------ | -------------
|Newsprint (at LIFO) |  | $             | 38,373 |              
|Supplies and other  |  |               | 11,423 |              
|                    |  |               |        |              
|Total inventories   |  | $             | 49,796 |              
|                    |  |               |        |              

Newsprint
inventories are valued under the LIFO method and were less than current cost by approximately $6 million at Dec. 26, 2004 and $3 million at Dec. 28,
2003.

NOTE 6: GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets at Dec. 26, 2004 and Dec. 28, 2003 consisted of the following (in thousands):

|                                                                 |                                | Dec. 26, 2004 |         | Dec. 28, 2003
|---------------------------------------------------------------- | ------------------------------ | ------------- | ------- | -------------
|
|Intangible assets subject to amortization                        |                                |               |         |              
|Subscribers (useful life of 15 to 20 years)                      |                                | $             | 195,750 |              
|Network affiliation agreements (useful life of 40 years)         |                                |               | 290,320 |              
|Other (useful life of 3 to 40 years)                             |                                |               | 23,277  |              
|                                                                 |                                |               |         |              
|Total                                                            |                                | $             | 509,347 |              
|                                                                 |                                |               |         |              
|Goodwill and other intangible assets not subject to amortization |                                |               |         |              
|Goodwill                                                         |                                |               |         |              
|                                                                 | Publishing                     |               |         |              
|                                                                 | Broadcasting and entertainment |               |         |              
|                                                                 |                                |               |         |              
|Total goodwill                                                   |                                |               |         |              
|Newspaper mastheads                                              |                                |               |         |              
|FCC licenses                                                     |                                |               |         |              
|Tradename                                                        |                                |               |         |              
|                                                                 |                                |               |         |              
|Total                                                            |                                |               |         |              
|                                                                 |                                |               |         |              
|Total goodwill and other intangible assets                       |                                |               |         |              
|                                                                 |                                |               |         |              

77

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The
changes in the carrying amount of intangibles and goodwill during the years ended Dec. 26, 2004 and Dec. 28, 2003 were as follows (in thousands):

|                                                           |  | Publishing |           | Broadcasting and
Entertainment |   | Total     |  
|---------------------------------------------------------- |  | ---------- | --------- | ------------------------------ | - | --------- | -
|Intangible assets subject to amortization                  |  |            |           |                                |   |           |  
|Balance as of Dec. 29, 2002                                |  | $          | 101,592   |                                | $ | 328,506   |  
|Amortization expense(1)                                    |  |            | (7,089    | )                              |   | (7,047    | )
|Amortizable intangibles acquired during year               |  |            | 5,001     |                                |   | 49,733    |  
|Adjustments related to finalization of purchase accounting |  |            |          |                                |   | (3,001    | )
|                                                           |  |            |           |                                |   |           |  
|Balance as of Dec. 28, 2003                                |  | $          | 99,504    |                                | $ | 368,191   |  
|Amortization expense                                       |  |            | (7,427    | )                              |   | (11,436   | )
|Amortizable intangibles acquired during year               |  |            | 138       |                                |   |          |  
|Adjustments related to finalization of purchase accounting |  |            |          |                                |   | (7,200    | )
|                                                           |  |            |           |                                |   |           |  
|Balance as of Dec. 26, 2004                                |  | $          | 92,215    |                                | $ | 349,555   |  
|                                                           |  |            |           |                                |   |           |  
|Goodwill                                                   |  |            |           |                                |   |           |  
|Balance as of Dec. 29, 2002                                |  | $          | 3,912,602 |                                | $ | 1,407,537 |  
|Goodwill acquired during year                              |  |            | 10,770    |                                |   | 149,596   |  
|Goodwill written off related to divestitures               |  |            | (3,214    | )                              |   |          |  
|Adjustments related to finalization of purchase accounting |  |            |          |                                |   | 3,000     |  
|                                                           |  |            |           |                                |   |           |  
|Balance as of Dec. 28, 2003                                |  | $          | 3,920,158 |                                | $ | 1,560,133 |  
|Goodwill acquired during year                              |  |            | 562       |                                |   |          |  
|Adjustments related to finalization of purchase accounting |  |            |          |                                |   | (13,035   | )
|                                                           |  |            |           |                                |   |           |  
|Balance as of Dec. 26, 2004                                |  | $          | 3,920,720 |                                | $ | 1,547,098 |  
|                                                           |  |            |           |                                |   |           |  
|Other intangible assets not subject to amortization        |  |            |           |                                |   |           |  
|Balance as of Dec. 29, 2002                                |  | $          | 1,583,746 |                                | $ | 978,808   |  
|Intangibles acquired during year                           |  |            |          |                                |   | 124,000   |  
|Intangibles written off related to divestitures            |  |            |          |                                |   | (1,924    | )
|                                                           |  |            |           |                                |   |           |  
|Balance as of Dec. 28, 2003                                |  | $          | 1,583,746 |                                | $ | 1,100,884 |  
|Adjustments related to finalization of purchase accounting |  |            |          |                                |   | 29,000    |  
|Cumulative effect of change in accounting principle(2)     |  |            |          |                                |   | (29,160   | )
|                                                           |  |            |           |                                |   |           |  
|Balance as of Dec. 26, 2004                                |  | $          | 1,583,746 |                                | $ | 1,100,724 |  
|                                                           |  |            |           |                                |   |           |  
|Total goodwill and other intangibles as of Dec. 26, 2004   |  | $          | 5,596,681 |                                | $ | 2,997,377 |  
|                                                           |  |            |           |                                |   |           |  

---

Estimated annual amortization expense will be approximately $20 million for each of the next five years, excluding the effects of any
acquisitions or dispositions subsequent to Dec. 26, 2004.

78

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NOTE 7: TMCT I AND TMCT II

In connection with the Company's acquisition of Times Mirror in 2000, the Company acquired investments in TMCT I and TMCT II.

TMCT IIn 1997, Times Mirror completed a transaction involving agreements with its largest shareholders, Chandler Trust No. 1 and
Chandler Trust No. 2 (collectively, the "Chandler Trusts") which resulted in the formation of a new limited liability company, TMCT, LLC ("TMCT I"). As a result of the Company's acquisition of
Times Mirror, the Chandler Trusts became significant shareholders of the Company.

At
Dec. 26, 2004, the assets of TMCT I included 13 million shares of the Company's common stock and 442,596 shares of the Company's Series C preferred stock
(collectively, "TMCT I Shares"); eight real properties ("Real Properties") and a portfolio of fixed income and equity investments ("TMCT I Portfolio"). TMCT I has no outstanding debt. The estimated
fair market value of the TMCT I assets at Dec. 26, 2004 and Dec. 28, 2003 is shown in the table below (in thousands):

|                 |  | TMCT I Asset Information
(unaudited)
|---------------- |  | ------------------------------------
|
|TMCT I Shares    |  | $                                   
|                 |  |                                     
|Real Properties  |  | $                                   
|                 |  |                                     
|TMCT I Portfolio |  | $                                   
|                 |  |                                     

Summarized
income and expense information for TMCT I is shown in the following table for the years ended Dec. 26, 2004, Dec. 28, 2003 and Dec. 29, 2002 (in
thousands):

|                                              |  | TMCT I Income and Expense Information (unaudited) |        
|--------------------------------------------- |  | ------------------------------------------------- | -------
|
|TMCT I Shares dividend income                 |  | $                                                 | 23,705 
|Real Properties lease income                  |  |                                                   | 24,166 
|TMCT I Portfolio interest and dividend income |  |                                                   | 9,824  
|TMCT I Portfolio net realized gains (losses)  |  |                                                   | 3,556  
|                                              |  |                                                   |        
|                                              |  | $                                                 | 61,251 
|                                              |  |                                                   |        
|TMCT I operating expenses                     |  | $                                                 | (10,153
|                                              |  |                                                   |        

The
Company leases the Real Properties from TMCT I and accounts for the lease as a capital lease in its consolidated balance sheet. On Aug. 8, 2009, the end of the lease
term, the Company has the option to purchase all of the Real Properties for their fair market value. If the Real Properties are not purchased by the Company, they will remain the assets of
TMCT I and may, as provided for under the terms of the lease agreement, be leased by the Company at a fair market value rent. The lease provides for two additional 12-year lease
terms with fair market value purchase options at the end of each lease term.

The
Company and the Chandler Trusts share in the cash flows of the various assets held by TMCT I. The cash flows from the Real Properties and the TMCT I Portfolio are largely
allocated to the Chandler Trusts, while the cash flows from the TMCT I Shares are largely allocated to the

79

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Company.
Due to the allocations of the economic benefits in TMCT I, for financial reporting purposes 80% of the TMCT Shares are included in treasury stock, 80% of the preferred stock dividends
on the Series C stock are excluded from preferred stock dividends and 80% of the dividends on the common stock are effectively eliminated. The Company accounts for its 20% investment in the
TMCT I Portfolio under the equity method.

The
Company's investment in TMCT I totaled $82 million, $99 million and $98 million at Dec. 26, 2004, Dec. 28, 2003 and Dec. 29, 2002,
respectively. In 2004, 2003 and 2002, the Company recognized equity income of $2 million in each year related to the TMCT I Portfolio. During 2004 and 2003, the Company recorded realized
gains on the TMCT I Portfolio of $4 million and $2 million, respectively. The Company recorded realized losses related to the TMCT I Portfolio of $6 million in 2002.
The realized gains and losses were recorded as non-operating items in each year.

TMCT IIIn 1999, Times Mirror completed a second transaction involving agreements with the Chandler Trusts, resulting in the formation of
another new limited liability company, TMCT II, LLC ("TMCT II").

At
Dec. 26, 2004, the assets of TMCT II included 39 million shares of the Company's common stock, 380,972 shares of the Company's Series D-1
preferred stock and 245,100 shares of the Company's Series D-2 preferred stock (collectively, "TMCT II Shares"); preferred units issued by the operating partnership of two
unrelated real estate investment trusts and a portfolio of fixed income investments ("REIT Portfolio"); a portfolio of fixed income and equity investments ("TMCT II Portfolio"); and a portfolio
of venture capital and private equity investments ("Venture Capital Portfolio"). TMCT II has no outstanding debt. The estimated fair market value of the TMCT II assets at Dec. 26,
2004 and Dec. 28, 2003 is shown in the table below (in thousands):

|                          |  | TMCT II Asset Information
(unaudited)
|------------------------- |  | -------------------------------------
|
|TMCT II Shares            |  | $                                    
|                          |  |                                      
|REIT Portfolio            |  | $                                    
|                          |  |                                      
|TMCT II Portfolio         |  | $                                    
|                          |  |                                      
|Venture Capital Portfolio |  | $                                    
|                          |  |                                      

Summarized
income and expense information for TMCT II is shown in the following table for the years ended Dec. 26, 2004, Dec. 28, 2003 and Dec. 29, 2002 (in
thousands):

|                                                                             |  | TMCT II Income and Expense
Information (unaudited) |       
|---------------------------------------------------------------------------- |  | -------------------------------------------------- | ------
|
|TMCT II Shares dividend income                                               |  | $                                                  | 38,809
|REIT Portfolio income                                                        |  |                                                    | 48,279
|TMCT II Portfolio and Venture Capital Portfolio interest and dividend income |  |                                                    | 4,958 
|TMCT II Portfolio and Venture Capital Portfolio net realized losses          |  |                                                    | (9,152
|                                                                             |  |                                                    |       
|                                                                             |  | $                                                  | 82,894
|                                                                             |  |                                                    |       
|TMCT II operating expenses                                                   |  | $                                                  | (6,934
|                                                                             |  |                                                    |       

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The
Company and the Chandler Trusts share in the cash flows of the various assets held by TMCT II. The cash flows from the REIT Portfolio, the TMCT II Portfolio and the
Venture Capital Portfolio are largely allocated to the Chandler Trusts. The cash flows from the TMCT II Shares are largely allocated to the Company. Due to the allocations of the economic
benefits in TMCT II, for financial reporting purposes 80% of the TMCT Shares are included in treasury stock, 80% of the preferred stock dividends on the Series D-1 and
D-2 preferred stock are excluded from preferred stock dividends and 80% of the dividends on the common stock are effectively eliminated. The Company accounts for its 20% investments in the
REIT Portfolio, the TMCT II Portfolio and the Venture Capital Portfolio under the equity method.

The
Company's investment in TMCT II totaled $198 million at Dec. 26, 2004 and Dec. 28, 2003 and $206 million at Dec. 29, 2002. The Company recognized
equity income related to the REIT Portfolio, TMCT II Portfolio and Venture Capital Portfolio investments of $9 million in 2004 and $10 million in both 2003 and 2002. The Company
also recorded realized losses related to the TMCT II Portfolio of $2 million in 2002. During 2004, 2003 and 2002, the Company recorded losses of $4 million, $8 million and
$7 million, respectively, related to realized losses and the write-down of certain investments in the Venture Capital Portfolio.

The
TMCT I and TMCT II LLC agreements have no specific term, and the dissolution and distribution of assets requires the mutual consent of the Company and the
Chandler Trusts. Tribune's share of the liquidation value of TMCT I and TMCT II would be generally equal to the Company's original 50% share of the total assets, adjusted for
approximately 80% of the gains or losses in the Tribune stock held by TMCT I and TMCT II and approximately 20% of the gains or losses in the other assets held by TMCT I and
TMCT II.

NOTE 8: INVESTMENTS

Investments consisted of the following (in thousands):

|                                            |  | Dec. 26, 2004 |         | Dec. 28, 2003
|------------------------------------------- |  | ------------- | ------- | -------------
|Time Warner stock related to PHONES debt    |  | $             | 306,240 |              
|Other cost method investments               |  |               | 75,739  |              
|Equity investments in TMCT I and TMCT II(1) |  |               | 279,856 |              
|Other equity method investments             |  |               | 233,663 |              
|                                            |  |               |         |              
|Total investments                           |  | $             | 895,498 |              
|                                            |  |               |         |              

---

Cost method investments in public companies and debt securities were recorded at fair value in the consolidated balance sheets. At Dec. 26,
2004, the Company's cost method investments included public companies, mainly Time Warner, and private companies. The investment in Time Warner at Dec. 26, 2004 consists of 19 million
shares, which includes 16 million shares related to the PHONES

81

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(see
Notes 1 and 9). The Company's equity method investments at Dec. 26, 2004 included the following private companies:

|Company                               |  | % Owned |  
|------------------------------------- |  | ------- | -
|Adstar                                |  | 20      | %
|BrassRing                             |  | 27      | %
|CareerBuilder                         |  | 33      | %
|California Independent Postal Systems |  | 50      | %
|Classified Ventures                   |  | 28      | %
|Comcast Sports Network                |  | 25      | %
|CrossMedia Services                   |  | 33      | %
|Legacy.com                            |  | 40      | %
|TMCT I Portfolio(1)                   |  | 20      | %
|TMCT II Portfolio(1)                  |  | 20      | %
|TV Food Network                       |  | 31      | %
|The WB Television Network             |  | 22      | %

---

The Company does not guarantee any indebtedness for any of its investees. In the first quarter of 2004, the Company sold its 50% interest in La
Opiniónfor $20 million and recorded a pretax gain of $18 million. During 2003, the Company sold its equity interest in
The Golf Channel, which resulted in a pretax gain of $48 million. Also in 2003, the Company sold several investments resulting in a pretax gain of $6 million. During 2002, the Company
sold several investments resulting in a pretax loss of $6 million.

In
September 2002, CareerBuilder converted from a standard "C corporation" to a limited liability company. In October 2002, Gannett Co., Inc. acquired a
one-third interest in CareerBuilder, joining Knight-Ridder, Inc. and the Company as an equal owner.

In
2004, 2003 and 2002, the Company concluded that the decline in the value of certain public and private investments was other than temporary and wrote down the investments to fair
value. Non-cash, pretax losses totaled $6 million, $10 million and $18 million in 2004, 2003 and 2002, respectively. See Note 2 for further discussion.

For
investments classified as available-for-sale and recorded at fair value under FAS No. 115, the aggregate cost basis, unrealized gain and fair value
were as follows (in thousands):

|                             |  | Dec. 26, 2004 |        | Dec. 28, 2003
|---------------------------- |  | ------------- | ------ | -------------
|
|Marketable equity securities |  | $             | 27,594 |              

The
difference between cost and fair value, net of related tax effects, is recorded in the accumulated other comprehensive income component of shareholders' equity and amounted to a net
gain of $20 million at Dec. 26, 2004 and $19 million at Dec. 28, 2003. The cost bases of the investments in the tables above are net of write-downs recorded in the
consolidated statements of income.

82

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NOTE 9: LONG-TERM DEBT

Long-term debt consisted of the following (in thousands):

|                                                                                                |  | Dec. 26, 2004 |           | Dec. 28, 2003 |  
|----------------------------------------------------------------------------------------------- |  | ------------- | --------- | ------------- | -
|Commercial paper, weighted average interest rate of 2.4% in 2004                                |  | $             | 773,206   |               | $
|Medium-term notes, weighted average interest rate of 6.2% in 2004 and 2003, due 2004-2008       |  |               | 733,285   |               |  
|Capitalized real estate obligation, effective interest rate of 7.7%, expiring 2009 (see Note 7) |  |               | 74,462    |               |  
|7.45% notes due 2009, redeemed April 16, 2004                                                   |  |               |          |               |  
|7.25% debentures due 2013, net of unamortized discount of $2,818 and $5,699                     |  |               | 79,265    |               |  
|7.5% debentures due 2023, net of unamortized discount of $4,438 and $4,673                      |  |               | 94,312    |               |  
|6.61% debentures due 2027, net of unamortized discount of $2,409 and $7,396                     |  |               | 82,551    |               |  
|7.25% debentures due 2096, net of unamortized discount of $18,492 and $18,680                   |  |               | 129,508   |               |  
|Interest rate swap                                                                              |  |               | 31,102    |               |  
|Other notes and obligations                                                                     |  |               | 7,129     |               |  
|                                                                                                |  |               |           |               |  
|Total debt excluding PHONES                                                                     |  |               | 2,004,820 |               |  
|Less portions due within one year                                                               |  |               | (271,767  | )             |  
|                                                                                                |  |               |           |               |  
|Long-term debt excluding PHONES                                                                 |  |               | 1,733,053 |               |  
|2% PHONES debt related to Time Warner stock, due 2029                                           |  |               | 584,880   |               |  
|                                                                                                |  |               |           |               |  
|Total long-term debt                                                                            |  | $             | 2,317,933 |               | $
|                                                                                                |  |               |           |               |  

Long-Term Debt RetirementIn the second quarter of 2004, the Company redeemed all of its outstanding $400 million
($396 million net of unamortized discount) 7.45% debentures due 2009 and retired $66 million ($64 million net of unamortized discount) of its 7.25% debentures due 2013 and
$165 million ($160 million net of unamortized discount) of its 6.61% debentures due 2027 through cash tender offers. The Company paid approximately $760 million to retire this
debt and, as a result, recorded a one-time, pretax loss of $141 million in the second quarter of 2004. The Company funded these transactions with cash and the issuance of commercial
paper.

Medium-Term NotesNotes issued under these programs generally have maturities from one to six years and may not be redeemed by
the Company prior to maturity.

Interest Rate SwapThe Company is currently a party to one interest rate swap agreement. This swap agreement relates to the
$100 million 7.5% debentures due in 2023 and effectively converts the fixed 7.5% rate to a variable rate based on LIBOR.

Current Portion of Long-Term DebtThe current portion of long-term debt includes $178 million of
medium-term notes, $79 million of commercial paper and $15 million of capitalized real estate and other obligations due within one year.

Exchangeable Subordinated Debentures due 2029 ("PHONES")In 1999, the Company issued 8 million PHONES for an aggregate principal
amount of approximately $1.3 billion. The principal amount was equal to the value of 16 million shares of Time Warner common stock at the closing price of $78.50 per share on
April 7, 1999. Interest on the debentures is paid quarterly at an annual rate of

83

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2%.
The Company also records non-cash interest expense on the discounted debt component of the PHONES. The Company may redeem the PHONES at any time for the higher of $157 per PHONES or
the then market value of two shares of Time Warner common stock, subject to certain adjustments. At any time, holders of the PHONES may exchange a PHONES for an amount of cash equal to 95% (or 100%
under certain circumstances) of the market value of two shares of Time Warner common stock. At Dec. 26, 2004, the market value per PHONES was $91.00, and the market value of two shares of Time
Warner common stock was $38.28.

Under
the provisions of FAS No. 133, the PHONES consist of a discounted debt component, which is presented at book value, and a derivative component, which is presented at fair
value. Changes in the fair value of the derivative component of the PHONES are recorded in the statement of income. The fair value of the derivative component of the PHONES debt is calculated as the
difference between the quoted market value of the PHONES and the estimated fair value of the discounted debt component of the PHONES. The fair value of the discounted debt component of the PHONES is
calculated based on an estimate of the current interest rate available to the Company for debt of the same remaining maturity and similar terms to the PHONES. The book value of the discounted debt
component is based on the prevailing interest rate (8.125%) at issuance of the PHONES. The market value of the PHONES, which are traded on the New York Stock Exchange, was $728 million and
$650 million at Dec. 26, 2004 and Dec. 28, 2003, respectively.

The
discounted debt component and derivative component of the PHONES were as follows (in thousands):

|                                                    |                                           | Dec. 26, 2004 |         | Dec. 28, 2003
|--------------------------------------------------- | ----------------------------------------- | ------------- | ------- | -------------
|PHONES Debt:                                        |                                           |               |         |              
|                                                    | Discounted debt component (at book value) |               | $       | 442,480      
|                                                    | Derivative component (at fair value)      |               |         | 142,400      
|                                                    |                                           |               |         |              
|                                                    | Total                                     |               | $       | 584,880      
|                                                    |                                           |               |         |              
|Time Warner stock related to PHONES (at fair value) |                                           | $             | 306,240 |              
|                                                    |                                           |               |         |              

If
the PHONES are exchanged in the next year, the Company intends to refinance the PHONES, and has the ability to do so, on a long-term basis, through its existing revolving
credit agreements. Accordingly, the PHONES have been classified as long-term.

Revolving Credit AgreementsAt Dec. 26, 2004, the Company had revolving credit agreements with a number of financial institutions
providing for borrowings in an aggregate amount of up to $1.0 billion. Subsequent to Dec. 26, 2004, the Company entered into additional revolving credit agreements providing for
borrowings of up to $200 million, increasing the aggregate amount to $1.2 billion. Borrowings under these agreements, which expire in December 2008, would be at a rate equal to
LIBOR plus 0.35%. The revolving credit agreements allow the Company to elect one-month to twelve-month LIBOR rates, based on the term of the borrowing. At Dec. 26, 2004, the
one-month LIBOR rate was 2.42% and the twelve-month LIBOR rate was 3.08%. The agreements contain various interest rate options and provide for annual fees based on a percentage of the
commitment. The agreements contain covenants which require the Company to maintain a minimum interest coverage ratio. No amounts were borrowed under the agreements at Dec. 26, 2004, and the
Company was in compliance with the covenants. The Company paid a one-time fee of approximately $1.3 million in 2004 to renegotiate the agreements. Annual fees totaled approximately
$0.9 million in 2004, $1.1 million in 2003 and $1.0 million in 2002. In addition to the PHONES, the Company intends to refinance

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$694 million
of commercial paper scheduled to mature by Dec. 26, 2005, and has the ability to do so on a long-term basis through its existing revolving credit agreements.
Accordingly, these notes have been classified as long-term.

MaturitiesDebt at Dec. 26, 2004 matures as shown below (in thousands):

|2005       |  | $ | 271,767  
|---------- |  | - | ---------
|2006       |  |   | 309,268  
|2007       |  |   | 17,545   
|2008       |  |   | 1,266,341
|2009       |  |   | 12,020   
|Thereafter |  |   | 712,759  
|           |  |  
|Total      |  | $ | 2,589,700
|           |  |  

NOTE 10: CONTRACTS PAYABLE FOR BROADCAST RIGHTS

Contracts payable for broadcast rights are classified as current or long-term liabilities in accordance with the payment terms of the contracts. Required payments
under contractual agreements for broadcast rights recorded at Dec. 26, 2004 are shown in the table below (in thousands):

|2005       |  | $ | 319,425
|---------- |  | - | -------
|2006       |  |   | 197,776
|2007       |  |   | 132,002
|2008       |  |   | 69,096 
|2009       |  |   | 46,073 
|Thereafter |  |   | 93,154 
|           |  |  
|Total      |  | $ | 857,526
|           |  |  

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NOTE 11: FAIR VALUE OF FINANCIAL INSTRUMENTS

Estimated fair values and carrying amounts of the Company's financial instruments are as follows (in thousands):

|                                       |  | Dec. 26, 2004 |           | Dec. 28, 2003
|-------------------------------------- |  | ------------- | --------- | -------------
|
|Cost method investments                |  | $             | 386,625   |              
|Debt                                   |  |               | 2,723,320 |              
|Contracts payable for broadcast rights |  |               | 785,049   |              

The following methods and assumptions were used to estimate the fair value of each category of financial instruments.

Cost Method InvestmentsCost method investments in public companies were recorded at fair value in the consolidated balance sheets (see
Notes 1 and 8). Cost method investments in private companies were recorded at cost, net of write-downs, and fair value was generally estimated based on prices recently paid for shares in those
companies.

DebtFair value was determined based on quoted market prices for similar issues or on current rates available to the Company for debt of the
same remaining maturities and similar terms. 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.

Contracts Payable for Broadcast RightsFair value was estimated using the discounted cash flow method.

NOTE 12: COMMITMENTS AND CONTINGENCIES

The Company has entered into commitments for broadcast rights that are not currently available for broadcast and are therefore not included in the financial
statements. These commitments totaled $381 million at Dec. 26, 2004. Payments for broadcast rights generally commence when the programs become available for broadcast.

The
Company had commitments totaling $194 million at Dec. 26, 2004 related to the purchase of inventory, property, plant and equipment and talent contracts. In addition,
the Company has a commitment to purchase 450,000 metric tons of newsprint each year over the next three years at prevailing market prices at the time of purchase. The Company is in the process of
negotiating an extension to this contract, which would extend the current agreement to 2009. The Company leases certain equipment and office and production space under various operating leases. Lease
expense was $56 million in 2004 and $58 million in both 2003 and 2002. The table below presents the future

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minimum
lease payments to be made under non-cancelable operating leases at Dec. 26, 2004 (in thousands):

|2005       |  | $ | 58,155 
|---------- |  | - | -------
|2006       |  |   | 49,179 
|2007       |  |   | 44,358 
|2008       |  |   | 39,461 
|2009       |  |   | 34,595 
|Thereafter |  |   | 65,653 
|           |  |  
|Total      |  | $ | 291,401
|           |  |  

The
Company and its subsidiaries are defendants from time to time in actions for matters arising out of their business operations. In addition, the Company and its subsidiaries are
involved from time to time as parties in various regulatory, environmental and other proceedings with governmental authorities and administrative agencies. See Note 3 for a discussion of
potential liability related toNewsdayandHoy, New York, and see Note 13 for a discussion of a
potential income tax liability related to Times Mirror's 1998 dispositions of its Matthew Bender and Mosby subsidiaries in separate tax-free reorganizations. The Company does not believe
that any other matters or proceedings presently pending will have a material adverse effect on its consolidated financial position, results of operations or liquidity.

NOTE 13: INCOME TAXES

The following is a reconciliation of income taxes computed at the U.S. federal statutory rate to income taxes reported in the consolidated statements of income
(in thousands):

|                                                                                   |  | 2004 |         | 2003 |   | 2002      |  
|---------------------------------------------------------------------------------- |  | ---- | ------- | ---- | - | --------- | -
|Income before income taxes and cumulative effect of change in accounting principle |  | $    | 941,111 |      | $ | 1,415,236 |  
|                                                                                   |  |      |         |      |   |           |  
|Federal income taxes at 35%                                                        |  | $    | 329,389 |      | $ | 495,333   |  
|State and local income taxes, net of federal tax benefit                           |  |      | 32,758  |      |   | 49,758    |  
|Income tax settlement adjustments                                                  |  |      |        |      |   | (25,034   | )
|Other                                                                              |  |      | 5,640   |      |   | 3,800     |  
|                                                                                   |  |      |         |      |   |           |  
|Income taxes reported                                                              |  | $    | 367,787 |      | $ | 523,857   |  
|                                                                                   |  |      |         |      |   |           |  
|Effective tax rate                                                                 |  |      | 39.1    | %    |   | 37.0      | %

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Components
of income tax expense charged to income were as follows (in thousands):

|                   |                 | 2004 |         | 2003    |   | 2002   
|------------------ | --------------- | ---- | ------- | ------- | - | -------
|Currently payable: |                 |      |         |         |   |        
|                   | U.S. federal    |      | $       | 284,623 |   | $      
|                   | State and local |      |         | 43,499  |   |        
|                   |                 |      |         |         |   |        
|                   | Sub-total       |      |         | 328,122 |   |        
|Deferred:          |                 |      |         |         |   |        
|                   | U.S. federal    |      |         | 32,767  |   |        
|                   | State and local |      |         | 6,898   |   |        
|                   |                 |      |         |         |   |        
|                   | Sub-total       |      |         | 39,665  |   |        
|                   |                 |      |         |         |   |        
|Total              |                 | $    | 367,787 |         | $ | 523,857
|                   |                 |      |         |         |   |        

Significant
components of the Company's net deferred tax liabilities were as follows (in thousands):

|                                                               |  | Dec. 26, 2004 |           | Dec. 28, 2003 |  
|-------------------------------------------------------------- |  | ------------- | --------- | ------------- | -
|Net properties                                                 |  | $             | 275,595   |               | $
|Net intangible assets                                          |  |               | 1,231,198 |               |  
|Pensions                                                       |  |               | 340,293   |               |  
|Investments                                                    |  |               | 388,413   |               |  
|PHONES interest                                                |  |               | 218,297   |               |  
|Other future taxable items                                     |  |               | 15,006    |               |  
|                                                               |  |               |           |               |  
|Total deferred tax liabilities                                 |  |               | 2,468,802 |               |  
|                                                               |  |               |           |               |  
|Broadcast rights                                               |  |               | (4,098    | )             |  
|Postretirement and postemployment benefits other than pensions |  |               | (67,663   | )             |  
|Deferred compensation                                          |  |               | (84,262   | )             |  
|Other accrued liabilities                                      |  |               | (106,833  | )             |  
|Accrued employee compensation and benefits                     |  |               | (11,445   | )             |  
|Accounts receivable                                            |  |               | (16,372   | )             |  
|Other future deductible items                                  |  |               | (11,512   | )             |  
|State operating loss carryforwards                             |  |               | (28,600   | )             |  
|Valuation allowances on state operating loss carryforwards     |  |               | 23,968    |               |  
|                                                               |  |               |           |               |  
|Total deferred tax assets                                      |  |               | (306,817  | )             |  
|                                                               |  |               |           |               |  
|Net deferred tax liability                                     |  | $             | 2,161,985 |               | $
|                                                               |  |               |           |               |  

At
Dec. 26, 2004, the Company has approximately $573 million of operating loss carryforwards for state income tax purposes. These carryforwards arose in certain states
primarily as a result of intercompany interest expense, royalty expense and management fees allocated to the Company's various subsidiaries, and expire between 2005 and 2024. The deferred tax assets
related to these carryforwards total approximately $29 million, net of federal taxes. However, the Company believes it is more likely than not that $24 million of the carryforwards will
expire before being utilized. Therefore, in accordance with FAS No. 109, "Accounting for Income Taxes," the Company has established valuation allowances of $24 million on the
carryforwards. The state operating loss carryforwards increased in 2004 due to the Company generating additional tax losses in certain states. The valuation

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allowance
net decrease in 2004 was due to a change in management's estimate of the Company's ability to utilize certain state operating losses.

During
1998, Times Mirror, which was acquired by the Company in 2000, disposed of its Matthew Bender and Mosby subsidiaries in separate tax-free reorganizations. While the
Company strongly believes that these transactions were completed on a tax-free basis, the IRS has audited the transactions and disagreed with the position taken by Times Mirror. In 2001,
the Company received an IRS adjustment to increase Times Mirror's 1998 taxable income by approximately $1.6 billion. If the IRS prevails, the Company's federal and state income tax liability
would be approximately $600 million, plus interest. As of Dec. 26, 2004, the interest on the proposed taxes would be approximately $332 million. The Company intends to vigorously
defend its position and filed a petition in U.S. Tax Court on Nov. 8, 2002 to contest the IRS position. In December 2004, the Company presented its position in U.S. Tax Court. The
Company does not expect to receive the Court's decision before the fourth quarter of 2005.

A
tax reserve of $180 million, plus $66 million of interest, relating to these transactions is included in "other obligations" on the consolidated balance sheets. Times
Mirror established the $180 million tax reserve in 1998 when it entered into the transactions based on its assessment, along with its tax advisors, of the amount needed to resolve a dispute
with the IRS. The Company evaluates the adequacy of this reserve on a periodic basis. The Company has maintained this initial reserve as no new information has become available which would warrant a
change in that reserve.

The
Company reduced its income tax expense and liabilities by $25 million in 2003 and $35 million in 2002 as a result of favorably resolving certain federal and state
income tax issues.

The
resolutions of the Company's tax issues are unpredictable and could result in tax liabilities that are significantly higher or lower than that which has been provided by the Company.

NOTE 14: PENSION AND POSTRETIREMENT BENEFITS

Employee Pension PlansIn connection with the establishment of the Tribune Company ESOP in 1988, Tribune amended its company-sponsored
pension plan for employees not covered by a collective bargaining agreement. The Tribune Company pension plan continued to provide substantially the same pension benefits as under the
pre-amended plan until December 1998. After that date, Tribune pension benefit credits were frozen in terms of pay and service.

In
connection with the Times Mirror acquisition, the Company assumed defined benefit pension plans and various other contributory and non-contributory retirement plans
covering substantially all of Times Mirror's former employees. In general, benefits under the Times Mirror defined benefit plans are based on years of service and the employee's compensation during
the last five years of employment. The majority of Times Mirror's former employees are covered by one defined benefit plan. Funding for this plan is not expected to be required in the near future as
the plan is over funded. Benefits provided by Times Mirror's Employee Stock Ownership Plan ("Times Mirror ESOP") are coordinated with certain pension benefits and, as a result, the defined benefit
plan obligations are net of the actuarially equivalent value of the benefits earned under the Times Mirror ESOP. The maximum offset is equal to the value of the benefits earned under the defined
benefit plan.

The
Company also maintains several small plans for other employees. The Company's portion of assets and liabilities for multi-employer union pension plans is not determinable.

Postretirement Benefits Other Than PensionsThe Company provides postretirement health care and life insurance benefits to eligible
employees under a variety of plans. The various plans have

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significantly
different provisions for lifetime maximums, retiree cost-sharing, health care providers, prescription drug coverage and other benefits.

Obligations and Funded StatusSummarized information for the Company's pension and postretirement plans is provided below (in thousands):

|                                               |  | Pension Benefits |           | Other Postretirement
Benefits |  
|---------------------------------------------- |  | ---------------- | --------- | ----------------------------- | -
|
|Change in benefit obligations:                 |  |                  |           |                               |  
|Benefit obligations, beginning of year         |  | $                | 1,316,215 |                               | $
|Service cost                                   |  |                  | 21,177    |                               |  
|Interest cost                                  |  |                  | 80,474    |                               |  
|Plan amendments                                |  |                  | 4,616     |                               |  
|Curtailment gain                               |  |                  |          |                               |  
|Special termination benefits                   |  |                  | 1,440     |                               |  
|Impact of Medicare Reform Act                  |  |                  |          |                               |  
|Actuarial (gain) loss                          |  |                  | 112,291   |                               |  
|Benefits paid                                  |  |                  | (75,033   | )                             |  
|                                               |  |                  |           |                               |  
|Benefit obligations, end of year               |  |                  | 1,461,180 |                               |  
|                                               |  |                  |           |                               |  
|Change in plans' assets:                       |  |                  |           |                               |  
|Fair value of plans' assets, beginning of year |  |                  | 1,457,770 |                               |  
|Actual return on plans' assets                 |  |                  | 169,598   |                               |  
|Employer contributions                         |  |                  | 7,016     |                               |  
|Benefits paid                                  |  |                  | (75,033   | )                             |  
|                                               |  |                  |           |                               |  
|Fair value of plans' assets, end of year       |  |                  | 1,559,351 |                               |  
|                                               |  |                  |           |                               |  
|Funded (under funded) status of the plans      |  |                  | 98,171    |                               |  
|Unrecognized net actuarial loss                |  |                  | 803,490   |                               |  
|Unrecognized prior service cost                |  |                  | (16,918   | )                             |  
|Unrecognized transition asset                  |  |                  | (6        | )                             |  
|                                               |  |                  |           |                               |  
|Prepaid (accrued) benefit cost                 |  | $                | 884,737   |                               | $
|                                               |  |                  |           |                               |  

Amounts
recognized in the statement of financial position consist of:

|                                       |  | Pension Benefits |         | Other Postretirement
Benefits |  
|-------------------------------------- |  | ---------------- | ------- | ----------------------------- | -
|
|Prepaid benefit costs                  |  | $                | 950,766 |                               | $
|Accrued benefit costs                  |  |                  | (78,002 | )                             |  
|Accumulated other comprehensive income |  |                  | 11,973  |                               |  
|                                       |  |                  |         |                               |  
|Net amount recognized                  |  | $                | 884,737 |                               | $
|                                       |  |                  |         |                               |  

The
accumulated benefit obligation, which excludes the impact of future compensation increases, for all defined benefit pension plans was $1.4 billion and $1.3 billion at
Dec. 26, 2004 and Dec. 28, 2003, respectively.

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The
components of net periodic benefit cost (credit) for Company-sponsored plans were as follows (in thousands):

|                                    |  | Pension Benefits |          | Other Postretirement Benefits
|----------------------------------- |  | ---------------- | -------- | -----------------------------
|
|Service cost                        |  | $                | 21,177   |                              
|Interest cost                       |  |                  | 80,474   |                              
|Expected return on plans' assets    |  |                  | (131,118 | )                            
|Recognized actuarial loss           |  |                  | 44,533   |                              
|Amortization of prior service costs |  |                  | (1,834   | )                            
|Amortization of transition asset    |  |                  | (5       | )                            
|Special termination benefits(1)     |  |                  | 1,440    |                              
|                                    |  |                  |          |                              
|Net periodic benefit cost (credit)  |  | $                | 14,667   |                              
|                                    |  |                  |          |                              

---

|                                                                                 |  | Pension Benefits |        | Other Postretirement Benefits
|-------------------------------------------------------------------------------- |  | ---------------- | ------ | -----------------------------
|
|Increase in minimum liability included in other comprehensive income, net of tax |  | $                | (1,700 | )                            

AssumptionsWeighted average assumptions used each year in accounting for pension benefits and other postretirement benefits were:

|                                                 |  | Pension Benefits |   | Other
Postretirement
Benefits |  
|------------------------------------------------ |  | ---------------- | - | ----------------------------- | -
|
|Discount rate for expense                        |  | 6.25             | % | 6.75                          | %
|Discount rate for obligations                    |  | 5.75             | % | 6.25                          | %
|Increase in future salary levels for expense     |  | 3.75             | % | 3.75                          | %
|Increase in future salary levels for obligations |  | 3.50             | % | 3.75                          | %
|Long-term rate of return on plans' assets        |  | 8.50             | % | 8.50                          | %

The
Company used a building block approach to determine its current 8.5% assumption of the long-term expected rate of return on pension plan assets. Based on historical
market studies, the Company's long-term expected returns for equity and fixed income securities approximate 10% and 6%, respectively. The Company's current 2005 target asset allocation for
pension plan assets is 75% in equity securities and 25% in fixed income securities and other.

At
Dec. 26, 2004 and Dec. 28, 2003, the Company's prepaid pension asset included an unrecognized net actuarial loss of $803 million and $774 million,
respectively. A significant portion of this net actuarial loss resulted from the difference between the Company's expected returns on plan assets and the actual losses on plan assets in 2002 and 2001.
Expected returns on plan assets were $158 million and $176 million in 2002 and 2001, respectively; actual losses were $161 million and $113 million, respectively. In
accordance with FAS No. 87, "Employers' Accounting for Pensions," the actuarial loss will be recognized in the net periodic pension expense over the estimated average remaining service period
of active employees expected to receive benefits. The Company's policy is to

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incorporate
asset-related gains and losses into the asset value used to calculate the expected return on plan assets and into the calculation of amortization of unrecognized net actuarial loss over a
four-year period. As a result of all these factors, the Company expects to incur a net pension expense of $41 million in 2005 as compared to $15 million in 2004.

Plan AssetsThe Company's pension plans' asset allocations at Dec. 26, 2004 and Dec. 28, 2003 were as follows (in millions):

|                        |  | Plan Assets |      
|----------------------- |  | ----------- | -----
|
|
|Equity securities       |  | $           | 1,146
|Fixed income securities |  |             | 332  
|Other                   |  |             | 81   
|                        |  |             |      
|Total                   |  | $           | 1,559
|                        |  |             |      

Health Care Cost Trend RatesFor purposes of measuring 2004 postretirement health care costs, a 9.0% annual rate of increase in the per
capita cost of covered health care benefits was assumed for 2004. The rate was assumed to decrease gradually to 5.0% for 2008 and remain at that level thereafter. For purposes of measuring health care
obligations at Dec. 26, 2004, a 9.0% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2005. The rate was assumed to decrease gradually to 5.0% for
2009 and remain at that level thereafter. On Dec. 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 ("Act") was signed into
law. The Act resulted in a $15 million reduction in the accumulated other postretirement obligations for prior service costs and a $1 million reduction in net periodic postretirement
benefit costs.

Assumed
health care cost trend rates have a significant effect on the amounts reported for health care plans. As of the date of this report, a 1% change in assumed health care cost trend
rates would have the following effects (in thousands):

|                               |  | 1% Increase |       | 1% Decrease |  
|------------------------------ |  | ----------- | ----- | ----------- | -
|Service cost and interest cost |  | $           | 655   |             | $
|Benefit obligation             |  | $           | 9,684 |             | $

Cash FlowsThe Company contributed $7 million related to certain of its union and non-qualified pension plans and
$15 million to its other postretirement plans in 2004. The Company plans to contribute $6 million related to certain of its union and non-qualified pension plans and
$17 million to its other postretirement plans in 2005.

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Expected Future Benefit PaymentsThe following benefit payments, which reflect expected future service, as appropriate, are expected to be
paid (in thousands):

|          |  | Pension Benefits |         | Other
Postretirement
Benefits
|--------- |  | ---------------- | ------- | -----------------------------
|2005      |  | $                | 83,587  |                              
|2006      |  |                  | 77,982  |                              
|2007      |  |                  | 79,721  |                              
|2008      |  |                  | 81,308  |                              
|2009      |  |                  | 83,163  |                              
|2010-2014 |  |                  | 454,209 |                              

NOTE 15: CAPITAL STOCK AND SHARE PURCHASE PLAN

Under the Company's Restated Certificate of Incorporation, 12 million shares of preferred stock are authorized. Preferred stock is issuable in series under
terms and conditions determined by the Company's Board of Directors.

Series B Preferred StockIn 1989, the Company established a series of 1.6 million shares of Series B Convertible
Preferred Stock and issued 1.59 million shares to the Company's ESOP. In December 2003, the Series B convertible preferred stock was converted into 15.4 million shares of
common stock. Each share of the Series B preferred stock paid a cumulative dividend of 7.75% annually, had a liquidation value of $220 per share, was convertible into 16 shares of the Company's
common stock and was voted with the common stock with an entitlement to 18.32 votes per preferred share.

Series C, D-1 and D-2 Convertible Preferred StockIn connection with the June 12, 2000 merger with
Times Mirror, outstanding shares of Times Mirror cumulative, non-voting preferred stock were converted into shares of Tribune preferred stock with similar terms. An additional
0.2 million shares of preferred stock, net of treasury stock, were issued due to the conversion. Series C convertible preferred stock is cumulative, non-voting preferred
stock, which is entitled to annual dividends of 8%, based on liquidation value. Annual dividends for Series D-1 and D-2 were paid at the rate of 6.44%, 6.22% and 6.01%
in 2004, 2003 and 2002, respectively, and will be paid at the rate of 6.67% in 2005 based on liquidation value. Dividends on Series D-1 and D-2 preferred stocks will
increase ratably from 2005 until 2012 pursuant to a predetermined schedule. Series C, D-1 and D-2 convertible preferred stocks relate to Times Mirror recapitalization
transactions whereby TMCT I and TMCT II (see Note 7) were formed. Series C, D-1 and D-2 preferred stocks are convertible into the Company's common stock in 2025
and thereafter. The conversion factor is calculated by dividing $500 plus accrued and unpaid dividends by the average closing prices of the Company's common stock for the 20 trading days immediately
preceding the conversion date. The maximum number of shares of common stock into which Series D-2 convertible preferred stock can be converted is 7.5 million shares.

Common and Treasury StockAt Feb. 18, 2005, there were 6,805 holders of record. During 2004, the Company repurchased and retired
15.5 million shares of its common stock in the open market for $732 million. During 2003, the Company repurchased 7.5 million shares of its common stock in the open market for
$356 million. At Dec. 26, 2004, the Company had authorization to repurchase an additional $601 million of its common stock. At Dec. 26, 2004, 83.4 million treasury
shares were held by TMCT I, TMCT II and other affiliates of the Company. During 2003, the Company retired 124.0 million treasury shares.

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Treasury Common Stock Held by Tribune Stock Compensation Fund ("TSCF")The TSCF purchased shares of the Company's common stock for the
purpose of funding certain existing stock-based compensation plans. In 2003, as a part of the treasury stock repurchase authorization, the TSCF purchased approximately 0.5 million shares of the
Company's common stock for $20 million. All shares acquired in 2003 by TSCF were utilized by December 2003. The TSCF was dissolved in the first quarter of 2005.

Share Purchase Rights PlanIn December 1997, the Company adopted a Share Purchase Rights Plan that replaced a similar agreement. The
plan provides for a dividend of one right on each outstanding share of the Company's common stock. Each right will entitle stockholders to buy one two-hundredth of a share of
Series A Junior Participating preferred stock at an exercise price of $125. These rights expire Jan. 5, 2008. The rights have no voting rights and are not exercisable until
10 days after the occurrence of certain triggering events, upon which the holders of the rights are entitled to purchase either the common stock of an acquirer or additional common stock of the
Company at a discounted price. The rights are redeemable at the option of the Company for $.005 per
right. The Company has established a series of two million shares of Series A Junior Participating Preferred Stock in connection with the plan, none of which have been issued.

NOTE 16: INCENTIVE COMPENSATION AND STOCK PLANS

Defined Contribution PlansThe Company maintains various qualified 401(k) savings plans, which permit eligible employees to make voluntary
contributions on a pretax basis. The plans allow participants to invest their savings in various investments including the Company's common stock. The Company announced a new retirement and savings
plan for many of its subsidiaries, which took effect in 2004. The Company enhanced its primary 401(k) plan to include a larger Company contribution. This new plan was designed to replace the Company's
Employee Stock Ownership Plan that was fully allocated at the end of 2003. Company contributions to all of its defined contribution plans were $32 million in 2004 and $17 million in both
2003 and 2002. In 2005, the Company will contribute an additional $26 million to these plans related to the 2004 plan year.

Employee Stock Purchase PlanThis plan permits eligible employees to purchase the Company's common stock at 85% of market price. The Company
incurred charges of $0.2 million in 2004, 2003 and 2002 related to the administration of this plan. During 2004, 2003 and 2002, 617,651, 568,718, and 607,376 shares, respectively, were sold to
employees under this plan. A total of 16 million shares can be purchased under this plan. As of Dec. 26, 2004, a total of 3.8 million shares remained available for sale. The
weighted average fair value of shares sold in 2004 was $45.53.

Employee Stock Ownership Plan ("ESOP")In 1988, the Company established an ESOP as a long-term employee benefit plan. In
connection therewith, the ESOP purchased, in 1988 and 1989, approximately 3.2 million common shares and 1.59 million Series B convertible preferred shares of the Company at an
aggregate cost of $375 million. The ESOP provided for the awarding of shares of the Company's preferred and common stock on a noncontributory basis to eligible employees of the Company not
covered by a collective bargaining agreement. At Dec. 28, 2003, all of the preferred and common stock had been allocated to employees, and the preferred stock had been converted into common
shares.

Shares
of stock held by the ESOP were placed with the ESOP Trustee and were allocated to eligible employees annually. These common and preferred shares were allocated in the same
proportion that the current year's principal and interest payments bore to the total principal and interest to be paid over the lives of the related borrowings. Each preferred share was convertible
into 16 shares of

94

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the
Company's common stock. The ESOP Trustee was required to convert the preferred shares when making distributions to participants upon their withdrawal from the ESOP. If at the time of such
conversion the price of the Company's common stock was below $13.75 per share, the Company was required, at its option, to either pay the difference in cash or issue additional common stock.

The
Company recognized expense for this plan based upon cash contributions it made to the ESOP. The ESOP serviced its debt requirements with amounts received from preferred dividends and
Company contributions. ESOP debt service activity is summarized as follows (in thousands):

|                   |                            | 2003 |        | 2002  
|------------------ | -------------------------- | ---- | ------ | ------
|Debt Requirements: |                            |      |        |       
|                   | Principal                  |      | $      | 33,772
|                   | Interest                   |      |        | 2,837 
|                   |                            |      |        |       
|Total              |                            | $    | 36,609 |       
|                   |                            |      |        |       
|Debt Service:      |                            |      |        |       
|                   | Dividends                  |      | $      | 16,683
|                   | Company cash contributions |      |        | 19,926
|                   |                            |      |        |       
|Total              |                            | $    | 36,609 |       
|                   |                            |      |        |       

1997 Incentive Compensation PlanIn 1997, the 1992 Long-Term Incentive Plan was replaced with the 1997 Incentive Compensation
Plan. At Dec. 26, 2004, remaining options outstanding under the 1992 plan totaled 0.1 million shares, all of which were exercisable. The 1997 plan provides for the granting of awards to
eligible employees in any one or combination of stock options, performance equity program awards and annual management incentive program bonuses. At Dec. 26, 2004, options outstanding under the
1997 plan totaled 35.9 million shares, of which 21.3 million shares were exercisable. At Dec. 26, 2004, a total of 32.7 million shares were available for award under the
1997 plan. The stock options assumed in the Times Mirror acquisition are fully vested and exercisable. At Dec. 26, 2004, the converted Times Mirror stock options outstanding and exercisable
totaled 7.8 million shares.

Under
the stock option portion of the 1997 plan, the option price may not be less than the market value of the Company's common stock at the time the option is granted. Options are
exercisable not less than six months or more than 10 years after the date the option is granted. General awards under the 1997 plan vest in annual 25% increments beginning one year from the
date of the grant. Under certain circumstances, replacement options are granted when a participant pays the exercise price of a stock option and related tax withholding obligations with previously
acquired shares of common stock. The number of replacement options granted is equal to the number of shares used to pay the exercise price and related tax withholding obligations. The exercise price
of a replacement option is equal to the market price of the underlying stock on the date of grant, and the term is equal to the remaining term of the original option. Replacement options vest one year
from the date of grant.

In
the first quarter of 2002, the Company granted stock options to the majority of its employees not covered by a collective bargaining agreement, in lieu of merit wage increases. These
stock option grants vested after one year.

95

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A
summary of stock option activity and weighted average prices related to general options follows (shares in thousands):

|                               |  | General Options(1)
|------------------------------ |  | ------------------
|
|
|Outstanding, beginning of year |  | 34,117            
|Granted                        |  | 4,102             
|Exercised                      |  | (4,667            
|Canceled/forfeited             |  | (561              
|                               |  |                   
|Outstanding, end of year       |  | 32,991            
|                               |  |                   
|Exercisable, end of year       |  | 20,610            
|                               |  |                   

---

A summary of stock option activity and weighted average prices related to replacement options follows (shares in thousands):

|                               |  | Replacement Options
|------------------------------ |  | -------------------
|
|
|Outstanding, beginning of year |  | 10,420             
|Granted                        |  | 2,428              
|Exercised                      |  | (1,274             
|Canceled/forfeited             |  | (729               
|                               |  |                    
|Outstanding, end of year       |  | 10,845             
|                               |  |                    
|Exercisable, end of year       |  | 8,587              
|                               |  |                    

The
following table summarizes information about general options outstanding and general options exercisable at Dec. 26, 2004 (shares in thousands):

|              |  | General Options(1)
|------------- |  | ------------------
|
|
|$7.55-$24.35  |  | 7,738             
|$24.36-$39.93 |  | 4,786             
|$39.94-$40.50 |  | 9,706             
|$40.51-$52.50 |  | 10,761            

---

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The following table summarizes information about replacement options outstanding and replacement options exercisable at Dec. 26, 2004 (shares in
thousands):

|              |  | Replacement Options
|------------- |  | -------------------
|
|
|$33.13-$42.61 |  | 949                
|$42.62-$48.70 |  | 5,120              
|$48.71-$60.88 |  | 4,776              

NOTE 17: COMPREHENSIVE INCOME

Comprehensive income reflects all changes in the net assets of the Company during the period from transactions and other events and circumstances, except those
resulting from stock issuances and dividends. The Company's comprehensive income includes net income, the change in the minimum pension liability, unrealized gains and losses on marketable securities
classified as available-for-sale, and foreign currency translation adjustments. The Company's comprehensive income was as follows (in thousands):

|                                                                                                                                 |  | 2004 |         | 2003 |   | 2002    |  
|-------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- | - | ------- | -
|Net income                                                                                                                       |  | $    | 555,536 |      | $ | 891,379 |  
|Change in unrealized loss on newsprint swaps, net of taxes of $1,071                                                             |  |      |        |      |   |        |  
|Change in minimum pension liability, net of taxes of $1,116, $1,111 and $989, respectively                                       |  |      | (1,700  | )    |   | (1,753  | )
|                                                                                                                                 |  |      |         |      |   |         |  
|Unrealized gain (loss) on marketable securities:                                                                                 |  |      |         |      |   |         |  
|Unrealized holding gain (loss) arising during the period, net of taxes of $612, $6,791 and ($34,931), respectively               |  |      | 796     |      |   | 10,712  |  
|Add adjustment for loss on investment write-downs included in net income, net of taxes of ($114)                                 |  |      |        |      |   | 181     |  
|Less adjustment for (gain) loss on investment sales included in net income, net of taxes of ($64), $2,115 and $934, respectively |  |      | 100     |      |   | (3,336  | )
|                                                                                                                                 |  |      |         |      |   |         |  
|Change in net unrealized (gain) loss on securities, net of taxes                                                                 |  |      | 896     |      |   | 7,557   |  
|                                                                                                                                 |  |      |         |      |   |         |  
|Change in foreign currency translation adjustments, net of taxes of $75 and $67, respectively                                    |  |      | 118     |      |   | 106     |  
|                                                                                                                                 |  |      |         |      |   |         |  
|Other comprehensive income (loss)                                                                                                |  |      | (686    | )    |   | 5,910   |  
|                                                                                                                                 |  |      |         |      |   |         |  
|Comprehensive income                                                                                                             |  | $    | 554,850 |      | $ | 897,289 |  
|                                                                                                                                 |  |      |         |      |   |         |  

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Accumulated
other comprehensive income is a separate component of shareholders' equity on the Company's balance sheet. A reconciliation of the components of accumulated other
comprehensive income is as follows (in thousands):

|                                                       |  | 2004 |        | 2003 |   | 2002   |  
|------------------------------------------------------ |  | ---- | ------ | ---- | - | ------ | -
|Unrealized loss on newsprint swaps, net of tax:        |  |      |        |      |   |        |  
|Balance, beginning of year                             |  | $    |       |      | $ |       |  
|Current year change                                    |  |      |       |      |   |       |  
|                                                       |  |      |        |      |   |        |  
|Balance, end of year                                   |  |      |       |      |   |       |  
|                                                       |  |      |        |      |   |        |  
|Minimum pension liability, net of tax:                 |  |      |        |      |   |        |  
|Balance, beginning of year                             |  |      | (5,604 | )    |   | (3,851 | )
|Current year change                                    |  |      | (1,700 | )    |   | (1,753 | )
|                                                       |  |      |        |      |   |        |  
|Balance, end of year                                   |  |      | (7,304 | )    |   | (5,604 | )
|                                                       |  |      |        |      |   |        |  
|Unrealized gain, net of tax, on marketable securities: |  |      |        |      |   |        |  
|Balance, beginning of year                             |  |      | 19,014 |      |   | 11,457 |  
|Current year change                                    |  |      | 896    |      |   | 7,557  |  
|                                                       |  |      |        |      |   |        |  
|Balance, end of year                                   |  |      | 19,910 |      |   | 19,014 |  
|                                                       |  |      |        |      |   |        |  
|Foreign currency translation adjustments, net of tax:  |  |      |        |      |   |        |  
|Balance, beginning of year                             |  |      | 106    |      |   |       |  
|Current year change                                    |  |      | 118    |      |   | 106    |  
|                                                       |  |      |        |      |   |        |  
|Balance, end of year                                   |  |      | 224    |      |   | 106    |  
|                                                       |  |      |        |      |   |        |  
|Accumulated other comprehensive income                 |  | $    | 12,830 |      | $ | 13,516 |  
|                                                       |  |      |        |      |   |        |  

NOTE 18: BUSINESS SEGMENTS

Tribune
Company is a media and entertainment company that conducts its operations through two business segments: publishing and broadcasting and entertainment. In addition, certain
administrative activities are reported and included under corporate. These segments reflect the manner in which the Company sells its products to the marketplace and the manner in which it manages its
operations and makes business decisions.

PublishingTribune Publishing operates 11 market-leading daily newspapers and related businesses, distributes entertainment listings and
syndicated content, operates a 24-hour cable news channel, and manages the websites of Tribune's daily newspapers and television stations, along with other branded sites targeting specific
communities of interest. The daily newspapers are theLos Angeles Times;Chicago Tribune; Newsday, serving
Nassau and Suffolk counties on Long Island, New York and the borough of Queens, New York;South Florida
Sun-Sentinel; Orlando Sentinel;The Baltimore Sun;The Hartford Courant; The Morning
Call, serving Pennsylvania's Lehigh Valley;Daily Press, serving the Virginia Peninsula; andThe
AdvocateandGreenwich Time, each serving Connecticut's Fairfield County.

Broadcasting and EntertainmentThe Company's broadcasting operations consist of The WB Television Network affiliates in New York, Los
Angeles, Chicago, Philadelphia, Boston, Dallas, Washington D.C., Atlanta, Houston, Seattle, Miami, Denver, St. Louis, Portland, Indianapolis, San Diego, Hartford, New Orleans, and Albany; FOX
television affiliates in Seattle, Sacramento, Indianapolis, Hartford, Grand Rapids and Harrisburg; an ABC television affiliate in New Orleans; and

98

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one
radio station in Chicago. Entertainment operations include Tribune Entertainment, which develops and distributes first-run television programming for the Company's station group and
for national syndication, and the Chicago Cubs baseball team.

No
single customer provides more than 10% of the Company's revenue. In determining operating profit for each segment, none of the following items have been added or deducted: interest
income and expense, equity income and loss, non-operating items or income taxes. Assets represent those tangible and intangible assets used in the operations of each segment. Corporate
assets include cash and the Company's investment portfolio.

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(This page has been left blank intentionally.)

100

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TRIBUNE COMPANY AND SUBSIDIARIES
BUSINESS SEGMENTS
(In thousands of dollars)

|                                                        |                                                        | 2004 |   | 2003       |   | 2002 |           
|------------------------------------------------------- | ------------------------------------------------------ | ---- | - | ---------- | - | ---- | ----------
|Operating Revenues                                      |                                                        |      |   |            |   |      |           
|                                                        | Publishing                                             |      | $ | 4,129,850  |   | $    | 4,036,920 
|                                                        | Broadcasting and entertainment                         |      |   | 1,596,397  |   |      | 1,557,909 
|                                                        |                                                        |      |   |            |   |      |           
|                                                        | Total operating revenues                               |      | $ | 5,726,247  |   | $    | 5,594,829 
|                                                        |                                                        |      |   |            |   |      |           
|Operating Profit (Loss) Before Restructuring Charges(1) |                                                        |      |   |            |   |      |           
|                                                        | Publishing                                             |      | $ | 726,207    |   | $    | 885,306   
|                                                        | Broadcasting and entertainment                         |      |   | 544,300    |   |      | 528,519   
|                                                        | Corporate expenses                                     |      |   | (52,218    | ) |      | (53,351   
|                                                        |                                                        |      |   |            |   |      |           
|                                                        | Total operating profit before restructuring charges    |      | $ | 1,218,289  |   | $    | 1,360,474 
|                                                        |                                                        |      |   |            |   |      |           
|Operating Profit (Loss) Including Restructuring Charges |                                                        |      |   |            |   |      |           
|                                                        | Publishing                                             |      | $ | 726,207    |   | $    | 885,306   
|                                                        | Broadcasting and entertainment                         |      |   | 544,300    |   |      | 528,519   
|                                                        | Corporate expenses                                     |      |   | (52,218    | ) |      | (53,351   
|                                                        |                                                        |      |   |            |   |      |           
|                                                        | Total operating profit including restructuring charges |      | $ | 1,218,289  |   | $    | 1,360,474 
|                                                        |                                                        |      |   |            |   |      |           
|Depreciation                                            |                                                        |      |   |            |   |      |           
|                                                        | Publishing                                             |      | $ | 171,599    |   | $    | 169,194   
|                                                        | Broadcasting and entertainment                         |      |   | 40,992     |   |      | 42,997    
|                                                        | Corporate                                              |      |   | 1,635      |   |      | 2,059     
|                                                        |                                                        |      |   |            |   |      |           
|                                                        | Total depreciation                                     |      | $ | 214,226    |   | $    | 214,250   
|                                                        |                                                        |      |   |            |   |      |           
|Amortization of Intangible Assets                       |                                                        |      |   |            |   |      |           
|                                                        | Publishing                                             |      | $ | 7,430      |   | $    | 7,089     
|                                                        | Broadcasting and entertainment                         |      |   | 11,433     |   |      | 7,047     
|                                                        |                                                        |      |   |            |   |      |           
|                                                        | Total amortization of intangible assets                |      | $ | 18,863     |   | $    | 14,136    
|                                                        |                                                        |      |   |            |   |      |           
|Capital Expenditures                                    |                                                        |      |   |            |   |      |           
|                                                        | Publishing                                             |      | $ | 171,435    |   | $    | 134,551   
|                                                        | Broadcasting and entertainment                         |      |   | 35,266     |   |      | 47,481    
|                                                        | Corporate                                              |      |   | 10,647     |   |      | 11,503    
|                                                        |                                                        |      |   |            |   |      |           
|                                                        | Total capital expenditures                             |      | $ | 217,348    |   | $    | 193,535   
|                                                        |                                                        |      |   |            |   |      |           
|Assets                                                  |                                                        |      |   |            |   |      |           
|                                                        | Publishing                                             |      | $ | 8,218,516  |   | $    | 8,216,160 
|                                                        | Broadcasting and entertainment                         |      |   | 4,444,988  |   |      | 4,452,605 
|                                                        | Corporate                                              |      |   | 1,504,692  |   |      | 1,611,387 
|                                                        |                                                        |      |   |            |   |      |           
|                                                        | Total assets                                           |      | $ | 14,168,196 |   | $    | 14,280,152
|                                                        |                                                        |      |   |            |   |      |           

---

101

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TRIBUNE COMPANY AND SUBSIDIARIES
2004 QUARTERLY RESULTS (Unaudited)
(In thousands of dollars, except per share data)

|                                                                                   |                                | Quarters                                                        |             |           |    
|---------------------------------------------------------------------------------- | ------------------------------ | --------------------------------------------------------------- | ----------- | --------- | ---
|
|
|Operating Revenues                                                                 |                                |                                                                 |             |           |    
|                                                                                   | Publishing                     |                                                                 | $           | 1,003,583 |    
|                                                                                   | Broadcasting and entertainment |                                                                 |             | 328,734   |    
|                                                                                   |                                |                                                                 |             |           |    
|                                                                                   | Total operating revenues       |                                                                 | $           | 1,332,317 |    
|                                                                                   |                                |                                                                 |             |           |    
|Operating Profit                                                                   |                                |                                                                 |             |           |    
|                                                                                   | Publishing                     |                                                                 | $           | 189,548   |    
|                                                                                   | Broadcasting and entertainment |                                                                 |             | 96,619    |    
|                                                                                   | Corporate expenses             |                                                                 |             | (12,892   | )  
|                                                                                   |                                |                                                                 |             |           |    
|                                                                                   | Total operating profit         |                                                                 |             | 273,275   |    
|Net income (loss) on equity investments                                            |                                |                                                                 | (4,373      | )         |    
|Interest expense, net                                                              |                                |                                                                 | (45,401     | )         |    
|Gain (loss) on derivatives and related investments(1)                              |                                |                                                                 | (45,501     | )         |    
|Loss on early debt retirement(2)                                                   |                                |                                                                 |            |           |    
|Gain (loss) on sales of subsidiaries and investments, net(3)                       |                                |                                                                 | 21,518      |           |    
|Gain (loss) on investment write-downs and other, net(4)                            |                                |                                                                 | (2,596      | )         |    
|                                                                                   |                                |                                                                 |             |           |    
|Income Before Income Taxes and Cumulative Effect of Change in Accounting Principle |                                |                                                                 | 196,922     |           |    
|Income taxes                                                                       |                                |                                                                 | (76,241     | )         |    
|                                                                                   |                                |                                                                 |             |           |    
|Income Before Cumulative Effect of Change in Accounting Principle                  |                                |                                                                 | 120,681     |           |    
|Cumulative effect of change in accounting principle, net of tax                    |                                |                                                                 |            |           |    
|                                                                                   |                                |                                                                 |             |           |    
|Net Income                                                                         |                                |                                                                 | 120,681     |           |    
|Preferred dividends, net of tax                                                    |                                |                                                                 | (2,077      | )         |    
|                                                                                   |                                |                                                                 |             |           |    
|Net Income Attributable to Common Shares                                           |                                | $                                                               | 118,604     |           | $  
|                                                                                   |                                |                                                                 |             |           |    
|Earnings (Loss) Per Share(5)                                                       |                                |                                                                 |             |           |    
|                                                                                   | Basic:                         |                                                                 |             |           |    
|                                                                                   |                                | Before cumulative effect of change in accounting principle, net |             | $         | .36
|                                                                                   |                                | Cumulative effect of change in accounting principle, net        |             |           |   
|                                                                                   |                                |                                                                 |             |           |    
|                                                                                   |                                | Total                                                           |             | $         | .36
|                                                                                   |                                |                                                                 |             |           |    
|                                                                                   | Diluted:                       |                                                                 |             |           |    
|                                                                                   |                                | Before cumulative effect of change in accounting principle, net |             | $         | .35
|                                                                                   |                                | Cumulative effect of change in accounting principle, net        |             |           |   
|                                                                                   |                                |                                                                 |             |           |    
|                                                                                   |                                | Total                                                           |             | $         | .35
|                                                                                   |                                |                                                                 |             |           |    
|Common Dividends Per Share                                                         |                                | $                                                               | .12         |           | $  
|Common Stock Price (High-Low)                                                      |                                | $                                                               | 53.00-48.89 |           | $  

---

Notes to Quarterly Results:

102

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TRIBUNE COMPANY AND SUBSIDIARIES
2003 QUARTERLY RESULTS (Unaudited)
(In thousands of dollars, except per share data)

|                                                      |                                | Quarters |             |           |  
|----------------------------------------------------- | ------------------------------ | -------- | ----------- | --------- | -
|
|
|Operating Revenues                                    |                                |          |             |           |  
|                                                      | Publishing                     |          | $           | 973,583   |  
|                                                      | Broadcasting and entertainment |          |             | 316,464   |  
|                                                      |                                |          |             |           |  
|                                                      | Total operating revenues       |          | $           | 1,290,047 |  
|                                                      |                                |          |             |           |  
|Operating Profit                                      |                                |          |             |           |  
|                                                      | Publishing                     |          | $           | 197,601   |  
|                                                      | Broadcasting and entertainment |          |             | 90,197    |  
|                                                      | Corporate expenses             |          |             | (11,389   | )
|                                                      |                                |          |             |           |  
|                                                      | Total operating profit         |          |             | 276,409   |  
|Net income (loss) on equity investments               |                                |          | (9,014      | )         |  
|Interest expense, net                                 |                                |          | (48,872     | )         |  
|Gain (loss) on derivatives and related investments(1) |                                |          | (36,895     | )         |  
|Gain on sales of subsidiaries and investments(3)      |                                |          | 49,954      |           |  
|Loss on investment write-downs(4)                     |                                |          | (228        | )         |  
|Gain on insurance recoveries(6)                       |                                |          |            |           |  
|Other non-operating gain (loss)                       |                                |          |            |           |  
|                                                      |                                |          |             |           |  
|Income Before Income Taxes                            |                                |          | 231,354     |           |  
|Income taxes                                          |                                |          | (90,202     | )         |  
|                                                      |                                |          |             |           |  
|Net Income                                            |                                |          | 141,152     |           |  
|Preferred dividends, net of tax                       |                                |          | (6,231      | )         |  
|                                                      |                                |          |             |           |  
|Net Income Attributable to Common Shares              |                                | $        | 134,921     |           | $
|                                                      |                                |          |             |           |  
|Earnings Per Share(5)                                 |                                |          |             |           |  
|                                                      | Basic                          |          | $           | .44       |  
|                                                      |                                |          |             |           |  
|                                                      | Diluted                        |          | $           | .41       |  
|                                                      |                                |          |             |           |  
|Common Dividends Per Share                            |                                | $        | .11         |           | $
|Common Stock Price (High-Low)                         |                                | $        | 48.99-41.60 |           | $

---

Notes to Quarterly Results:

103

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TRIBUNE COMPANY AND SUBSIDIARIES
ELEVEN YEAR FINANCIAL SUMMARY
(In thousands of dollars, except per share data)

|                                                                                                               |                                                                                   | 2004 |            | 2003      |  
|-------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ---- | ---------- | --------- | -
|Operating Revenues                                                                                             |                                                                                   |      |            |           |  
|                                                                                                               | Publishing                                                                        |      | $          | 4,129,850 |  
|                                                                                                               | Broadcasting and entertainment                                                    |      |            | 1,596,397 |  
|                                                                                                               |                                                                                   |      |            |           |  
|                                                                                                               | Total operating revenues                                                          |      | $          | 5,726,247 |  
|                                                                                                               |                                                                                   |      |            |           |  
|Operating Profit                                                                                               |                                                                                   |      |            |           |  
|                                                                                                               | Publishing                                                                        |      | $          | 726,207   |  
|                                                                                                               | Broadcasting and entertainment                                                    |      |            | 544,300   |  
|                                                                                                               | Corporate expenses                                                                |      |            | (52,218   | )
|                                                                                                               | Restructuring charges(2)                                                          |      |            |          |  
|                                                                                                               |                                                                                   |      |            |           |  
|                                                                                                               | Total operating profit                                                            |      |            | 1,218,289 |  
|                                                                                                               |                                                                                   |      |            |           |  
|Net income (loss) on equity investments                                                                        |                                                                                   |      | 17,931     |           |  
|Net interest expense                                                                                           |                                                                                   |      | (150,065   | )         |  
|Non-operating items and minority interest expense                                                              |                                                                                   |      | (145,044   | )         |  
|                                                                                                               |                                                                                   |      |            |           |  
|Income from Continuing Operations Before Income Taxes and Cumulative Effect of Changes in Accounting Principle |                                                                                   |      | 941,111    |           |  
|Income taxes                                                                                                   |                                                                                   |      | (367,787   | )         |  
|                                                                                                               |                                                                                   |      |            |           |  
|Income from Continuing Operations Before Cumulative Effect of Changes in Accounting Principle                  |                                                                                   |      | 573,324    |           |  
|Discontinued Operations of Education Segment, net of tax                                                       |                                                                                   |      |           |           |  
|Discontinued Operations of QUNO, net of tax                                                                    |                                                                                   |      |           |           |  
|Cumulative effect of changes in accounting principles, net of tax(3)                                           |                                                                                   |      | (17,788    | )         |  
|                                                                                                               |                                                                                   |      |            |           |  
|Net Income(4)                                                                                                  |                                                                                   | $    | 555,536    |           | $
|                                                                                                               |                                                                                   |      |            |           |  
|Share Information                                                                                              |                                                                                   |      |            |           |  
|Basic earnings per share                                                                                       |                                                                                   |      |            |           |  
|                                                                                                               | Continuing operations before cumulative effect of changes in accounting principle |      | $          | 1.75      |  
|                                                                                                               | Discontinued operations                                                           |      |            |          |  
|                                                                                                               | Cumulative effect of changes in accounting principle                              |      |            | (.05      | )
|                                                                                                               |                                                                                   |      |            |           |  
|                                                                                                               | Net income                                                                        |      | $          | 1.70      |  
|                                                                                                               |                                                                                   |      |            |           |  
|Diluted earnings per share                                                                                     |                                                                                   |      |            |           |  
|                                                                                                               | Continuing operations before cumulative effect of changes in accounting principle |      | $          | 1.72      |  
|                                                                                                               | Discontinued operations                                                           |      |            |          |  
|                                                                                                               | Cumulative effect of changes in accounting principle                              |      |            | (.05      | )
|                                                                                                               |                                                                                   |      |            |           |  
|                                                                                                               | Net income                                                                        |      | $          | 1.67      |  
|                                                                                                               |                                                                                   |      |            |           |  
|Common dividends per share                                                                                     |                                                                                   | $    | 0.48       |           | $
|Weighted average common shares outstanding (000's)                                                             |                                                                                   |      | 322,420    |           |  
|Financial Ratios                                                                                               |                                                                                   |      |            |           |  
|Operating profit margin                                                                                        |                                                                                   |      | 21.3       | %         |  
|Debt to capital including PHONES(5)                                                                            |                                                                                   |      | 22         | %         |  
|Debt to capital excluding PHONES(5)                                                                            |                                                                                   |      | 18         | %         |  
|Financial Position and Other Data                                                                              |                                                                                   |      |            |           |  
|Total assets                                                                                                   |                                                                                   | $    | 14,168,196 |           | $
|Long-term debt including PHONES                                                                                |                                                                                   |      | 2,317,933  |           |  
|Long-term debt excluding PHONES                                                                                |                                                                                   |      | 1,733,053  |           |  
|Shareholders' equity                                                                                           |                                                                                   |      | 6,836,844  |           |  
|Capital expenditures                                                                                           |                                                                                   |      | 217,348    |           |  

---

104

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|2002(1) |            | 2001 |   | 2000       |   | 1999 |            | 1998 |   | 1997      |   | 1996 |           | 1995 |   | 1994      |  
|------- | ---------- | ---- | - | ---------- | - | ---- | ---------- | ---- | - | --------- | - | ---- | --------- | ---- | - | --------- | -
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|$       | 3,940,478  |      | $ | 3,903,431  |   | $    | 3,485,277  |      | $ | 1,621,347 |   | $    | 1,536,684 |      | $ | 1,472,823 |  
|        | 1,443,950  |      |   | 1,349,935  |   |      | 1,465,553  |      |   | 1,302,058 |   |      | 1,153,006 |      |   | 1,057,529 |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|$       | 5,384,428  |      | $ | 5,253,366  |   | $    | 4,950,830  |      | $ | 2,923,405 |   | $    | 2,689,690 |      | $ | 2,530,352 |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|$       | 851,417    |      | $ | 510,604    |   | $    | 648,326    |      | $ | 394,312   |   | $    | 377,137   |      | $ | 354,585   |  
|        | 470,138    |      |   | 333,265    |   |      | 449,057    |      |   | 378,036   |   |      | 317,355   |      |   | 285,896   |  
|        | (45,770    | )    |   | (41,640    | ) |      | (64,372    | )    |   | (39,506   | ) |      | (35,435   | )    |   | (34,426   | )
|        | (27,253    | )    |   | (151,892   | ) |      |           |      |   |          |   |      |          |      |   |          |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|        | 1,248,532  |      |   | 650,337    |   |      | 1,033,011  |      |   | 732,842   |   |      | 659,057   |      |   | 606,055   |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|        | (40,875    | )    |   | (60,813    | ) |      | (79,374    | )    |   | (40,083   | ) |      | (33,980   | )    |   | (34,696   | )
|        | (204,491   | )    |   | (245,668   | ) |      | (207,584   | )    |   | (65,595   | ) |      | (82,339   | )    |   | (60,159   | )
|        | (63,211    | )    |   | (74,905    | ) |      | (165,301   | )    |   | 1,756,779 |   |      | 119,119   |      |   | 111,824   |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|        | 939,955    |      |   | 268,951    |   |      | 580,752    |      |   | 2,383,943 |   |      | 661,857   |      |   | 623,024   |  
|        | (331,376   | )    |   | (157,815   | ) |      | (270,351   | )    |   | (933,981  | ) |      | (272,660  | )    |   | (250,265  | )
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|        | 608,579    |      |   | 111,136    |   |      | 310,401    |      |   | 1,449,962 |   |      | 389,197   |      |   | 372,759   |  
|        |           |      |   |           |   |      | (86,015    | )    |   | 21,807    |   |      | 25,075    |      |   | 20,866    |  
|        |           |      |   |           |   |      |           |      |   |          |   |      |          |      |   |          |  
|        | (165,587   | )    |   |           |   |      |           |      |   | (3,060    | ) |      |          |      |   |          |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|$       | 442,992    |      | $ | 111,136    |   | $    | 224,386    |      | $ | 1,468,709 |   | $    | 414,272   |      | $ | 393,625   |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|$       | 1.93       |      | $ | 0.28       |   | $    | 1.06       |      | $ | 6.03      |   | $    | 1.53      |      | $ | 1.44      |  
|        |           |      |   |           |   |      | (.32       | )    |   | .09       |   |      | .10       |      |   | .09       |  
|        | (.55       | )    |   |           |   |      |           |      |   | (.01      | ) |      |          |      |   |          |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|$       | 1.38       |      | $ | 0.28       |   | $    | 0.74       |      | $ | 6.11      |   | $    | 1.63      |      | $ | 1.53      |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|$       | 1.80       |      | $ | 0.28       |   | $    | 0.99       |      | $ | 5.49      |   | $    | 1.41      |      | $ | 1.33      |  
|        |           |      |   |           |   |      | (.29       | )    |   | .08       |   |      | .09       |      |   | .07       |  
|        | (.50       | )    |   |           |   |      |           |      |   | (.01      | ) |      |          |      |   |          |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|$       | 1.30       |      | $ | 0.28       |   | $    | 0.70       |      | $ | 5.56      |   | $    | 1.50      |      | $ | 1.40      |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|$       | 0.44       |      | $ | 0.44       |   | $    | 0.40       |      | $ | 0.36      |   | $    | 0.34      |      | $ | 0.32      |  
|        | 301,932    |      |   | 298,295    |   |      | 271,951    |      |   | 237,367   |   |      | 242,428   |      |   | 245,758   |  
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|        | 23.2       | %    |   | 12.4       | % |      | 20.9       | %    |   | 25.1      | % |      | 24.5      | %    |   | 24.0      | %
|        | 29         | %    |   | 35         | % |      | 34         | %    |   | 37        | % |      | 35        | %    |   | 41        | %
|        | 26         | %    |   | 31         | % |      | 30         | %    |   | 23        | % |      | 35        | %    |   | 41        | %
|        |            |      |   |            |   |      |            |      |   |           |   |      |           |      |   |           |  
|$       | 13,974,048 |      | $ | 14,380,587 |   | $    | 14,668,712 |      | $ | 8,740,047 |   | $    | 5,824,037 |      | $ | 4,665,821 |  
|        | 3,260,795  |      |   | 3,699,165  |   |      | 4,020,936  |      |   | 2,694,073 |   |      | 1,615,955 |      |   | 1,520,646 |  
|        | 2,737,355  |      |   | 3,015,165  |   |      | 3,320,936  |      |   | 1,365,593 |   |      | 1,615,955 |      |   | 1,520,646 |  
|        | 6,119,235  |      |   | 5,642,341  |   |      | 5,877,347  |      |   | 3,458,617 |   |      | 2,356,617 |      |   | 1,826,004 |  
|        | 186,737    |      |   | 266,355    |   |      | 302,471    |      |   | 125,578   |   |      | 128,800   |      |   | 98,319    |  

---

105

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TRIBUNE COMPANY AND SUBSIDIARIES

SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(In thousands of dollars)

|Description                                                  |                                 | Balance at
Beginning
of Period      |       | Additions
Charged to
Costs and
Expenses |        | Additions
Recorded
Upon
Acquisitions |   | Deductions |        | Balance
at End
of Period
|------------------------------------------------------------ | ------------------------------- | ----------------------------------- | ----- | --------------------------------------- | ------ | ------------------------------------ | - | ---------- | ------ | ------------------------
|Valuation accounts deducted from assets to which they apply: |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|Year ended Dec. 26, 2004                                     |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             | Accounts receivable allowances: |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             |                                 | Bad debts                           |       | $                                       | 34,024 |                                      | $ | 60,072     |        | $                       
|                                                             |                                 | Rebates, volume discounts and other |       |                                         | 15,444 |                                      |   | 33,338     |        |                         
|                                                             |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             |                                 |                                     | Total |                                         | $      | 49,468                               |   | $          | 93,410 |                         
|                                                             |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|Year ended Dec. 28, 2003                                     |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             | Accounts receivable allowances: |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             |                                 | Bad debts                           |       | $                                       | 51,173 |                                      | $ | 51,241     |        | $                       
|                                                             |                                 | Rebates, volume discounts and other |       |                                         | 16,195 |                                      |   | 37,646     |        |                         
|                                                             |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             |                                 |                                     | Total |                                         | $      | 67,368                               |   | $          | 88,887 |                         
|                                                             |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|Year ended Dec. 29, 2002                                     |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             | Accounts receivable allowances: |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             |                                 | Bad debts                           |       | $                                       | 58,664 |                                      | $ | 47,899     |        | $                       
|                                                             |                                 | Rebates, volume discounts and other |       |                                         | 22,548 |                                      |   | 35,500     |        |                         
|                                                             |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             |                                 |                                     | Total |                                         | $      | 81,212                               |   | $          | 83,399 |                         
|                                                             |                                 |                                     |       |                                         |        |                                      |   |            |        |                         

106

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the participation of the Company's management, including its principal executive officer and principal financial officer, the
Company conducted an evaluation of its disclosure controls and procedures, as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e), as of Dec. 26,
2004. Based upon that evaluation, the principal executive officer and principal financial officer have concluded that the Company's disclosure controls and procedures are effective.

Management's Report on Internal Control Over Financial Reporting

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange
Act Rule 13a-15(f). Under the supervision and with the participation of the Company's management, including its principal executive officer and principal financial officer, the
Company conducted an evaluation of the effectiveness of the design and operation of internal control over financial reporting based on criteria established inInternal
ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on that evaluation, the
Company's management concluded that internal control over financial reporting was effective as of Dec. 26, 2004. Management's assessment of the effectiveness of internal control over financial
reporting as of Dec. 26, 2004 has been audited by PricewaterhouseCoopers, LLP, an independent registered public accounting firm, as stated in their report included in Item 8.

The
Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of the inherent limitations of any internal control
system over financial reporting, there is only reasonable assurance that the Company's control over financial reporting will succeed in preventing or detecting misstatements under all potential future
conditions.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company's internal control over financial reporting that occurred during the Company's fiscal quarter ended Dec. 26, 2004
that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information contained under the heading "Executive Officers of the Company" in Item 1 hereof, and the information contained under the headings "Corporate
GovernanceOverview," "Corporate GovernanceCommunicating with the Board of Directors" and "Board of Directors" in the definitive Proxy Statement for the Company's
May 18, 2005 Annual Meeting of Shareholders is incorporated herein by reference.

107

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ITEM 11. EXECUTIVE COMPENSATION.

The information contained under the headings "Board of DirectorsDirector Compensation" and "Executive Compensation" in the definitive Proxy Statement
for the Company's May 18, 2005 Annual Meeting of Shareholders is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The information contained under the headings "Stock OwnershipManagement Ownership," and "Stock OwnershipPrincipal Shareholders" in the
definitive Proxy Statement for the Company's May 18, 2005 Annual Meeting of Shareholders is incorporated herein by reference.

Equity Compensation Plan Information Table

The following table provides information as of Dec. 26, 2004 regarding the number of shares of Tribune common stock that may be issued under Tribune's
equity compensation plans.

|                                                           |  | (a)        |     | (b) |       | (c) |           
|---------------------------------------------------------- |  | ---------- | --- | --- | ----- | --- | ----------
|
|Equity compensation plans approved by security holders     |  | 36,490,824 | (2) | $   | 44.32 | (3) | 36,603,478
|Equity compensation plans not approved by security holders |  |           |     |     |      |     |          
|                                                           |  |            |     |     |       |     |           
|Total                                                      |  | 36,490,824 | (2) | $   | 44.32 | (3) | 36,603,478
|                                                           |  |            |     |     |       |     |           

---

108

---



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information contained under the headings "Board of DirectorsCompensation Committee Interlocks and Insider Participation," "Board of
DirectorsCertain Relationships and Related Transactions" and "Stock OwnershipRelated Transactions" in the definitive Proxy Statement for the Company's May 18, 2005
Annual Meeting of Shareholders is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The information contained under the headings "Board of DirectorsBoard, Board Committees and MeetingsAudit Committee," "Audit
CommitteePolicy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Accountants" and "Audit CommitteeFees Paid
to Independent Accountants" in the definitive Proxy Statement for the Company's May 18, 2005 Annual Meeting of Shareholders is incorporated herein by reference.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

|(a)(1)&(2) |  | Financial Statements and Financial Statement Schedule filed as part of this report   
|---------- |  | -------------------------------------------------------------------------------------
|           |  | See Index to Financial Statements and Financial Statement Schedule on page 54 hereof.
|(a)(3)     |  | Index to Exhibits filed as part of this report                                       
|           |  | See Exhibit Index on pages 111 to 114 hereof.                                        
|(b)        |  | Exhibits                                                                             
|           |  | See Exhibit Index on pages 111 to 114 hereof.                                        
|(c)        |  | Financial Statement Schedule                                                         
|           |  | See Index to Financial Statements and Financial Statement Schedule on page 54 hereof.

109

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be
signed on its behalf by the undersigned, hereunto duly authorized, on March 4, 2005.

| | TRIBUNE COMPANY(Registrant)                                                                
| | -------------------------------------------------------------------------------------------
| | /s/DENNIS J. FITZSIMONSDennis J. FitzSimons
Chairman, President and Chief Executive Officer

Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the
capacities indicated on March 4, 2005.

|Signature                                       |  | Title                                                                         
|----------------------------------------------- |  | ------------------------------------------------------------------------------
|                                                |  |                                                                               
|/s/DENNIS J. FITZSIMONSDennis J. FitzSimons     |  | Chairman, President, Chief Executive Officer and Director                     
|/s/DONALD C. GRENESKODonald C. Grenesko         |  | Senior Vice President/Finance and Administration (principal financial officer)
|/s/R. MARK MALLORYR. Mark Mallory               |  | Vice President and Controller (principal accounting officer)                  
|/s/JEFFREY CHANDLERJeffrey Chandler             |  | Director                                                                      
|/s/BETSY D. HOLDENBetsy D. Holden               |  | Director                                                                      
|/s/WILLIAM A. OSBORNWilliam A. Osborn           |  | Director                                                                      
|/s/WILLIAM STINEHART, JR.William Stinehart, Jr. |  | Director                                                                      
|/s/DUDLEY S. TAFTDudley S. Taft                 |  | Director                                                                      
|/s/KATHRYN C. TURNERKathryn C. Turner           |  | Director                                                                      

110

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TRIBUNE COMPANY        EXHIBIT INDEX

Exhibits marked with an asterisk (*) are incorporated by reference to documents previously filed by Tribune Company with the Securities and Exchange Commission,
as indicated. Exhibits marked with a circle (o) are management contracts or compensatory plan contracts or arrangements filed pursuant to Item 601(b)(10)(iii)(A) of
Regulation S-K. All other documents listed are filed with this Report.

|Number |  | Description                                                                                                                                                                                                                                                                                                                                                                          
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1 *  |  | Amended and Restated Certificate of Incorporation of Tribune Company, dated June 12, 2000 (Exhibit 3.1 to Annual Report on Form 10-K for 2001)                                                                                                                                                                                                                                       
|3.1a * |  | Amended Certificate of Designation of Series A Junior Participating Preferred Stock, dated June 12, 2000 (Exhibit 3.1a to Current Report on Form 8-K dated June 12, 2000)                                                                                                                                                                                                            
|3.1b * |  | Amended Certificate of Designation of Series C Preferred Stock, dated February 13, 2001 (Exhibit 3.1c to Annual Report on Form 10-K for 2000)                                                                                                                                                                                                                                        
|3.1c * |  | Amended Certificate of Designation of Series D-1 Preferred Stock, dated February 13, 2001 (Exhibit 3.1d to Annual Report on Form 10-K for 2000)                                                                                                                                                                                                                                      
|3.1d * |  | Amended Certificate of Designation of Series D-2 Preferred Stock, dated February 13, 2001 (Exhibit 3.1e to Annual Report on Form 10-K for 2000)                                                                                                                                                                                                                                      
|3.2 *  |  | By-Laws of Tribune Company, as amended and in effect on July 22, 2003 (Exhibit 3.2 to Quarterly Report on Form 10-Q for the quarter ended June 29, 2003)                                                                                                                                                                                                                             
|4.1 *  |  | Rights Agreement between Tribune Company and First Chicago Trust Company of New York, as Rights Agent, dated as of December 12, 1997 (Exhibit 1 to Current Report on Form 8-K dated December 12, 1997)                                                                                                                                                                               
|4.1a * |  | Amendment No. 1, dated as of June 12, 2000, to the Rights Agreement between Tribune Company and First Chicago Trust Company of New York, as Rights Agent (Exhibit 4.1 to Current Report on Form 8-K dated June 12,
2000)                                                                                                                                                             
|4.2 *  |  | Indenture, dated as of March 1, 1992, between Tribune Company and Citibank, N.A. (successor to Bank of New York, Bank of Montreal Trust Company and Continental Bank, N.A.), as Trustee (Exhibit 4.1 to Registration Statement on
Form S-3, Registration No. 333-02831)                                                                                                              
|4.3 *  |  | Indenture, dated as of January 1, 1997, between Tribune Company and Citibank, N.A. (successor to Bank of New York), as Trustee (Exhibit 4 to Current Report on Form 8-K dated January 14, 1997)                                                                                                                                                                                      
|4.4 *  |  | Indenture, dated as of April 1, 1999, between Tribune Company and Citibank, N.A. (successor to Bank of New York and Bank of Montreal Trust Company), as Trustee for the PHONES securities (Exhibit 4 to Current Report on
Form 8-K dated April 5, 1999)                                                                                                                              
|4.5 *  |  | Indenture, dated January 30, 1995, between Tribune Company (successor to The Times Mirror Company) and Citibank, N.A. (successor to The Bank of New York, Wells Fargo Bank, N.A. and First Interstate Bank of California), as Trustee
for the 71/4% Debentures due 2013 and 71/2% Debentures due 2023 (Exhibit 4.1 to The Times Mirror Company's Annual Report on Form 10-K for 1995)
|4.5a * |  | First Supplemental Indenture, dated as of June 12, 2000, among Tribune Company, The Times Mirror Company and The Bank of New York, as Trustee (Exhibit 4.13 to Current Report on Form 8-K dated June 12, 2000)                                                                                                                                                                       
|       |  |                                                                                                                                                                                                                                                                                                                                                                                      

111

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|4.6 *    |  | Indenture, dated March 19, 1996, between Tribune Company (successor to The Times Mirror Company) and Citibank, N.A., as Trustee for the 6.61% Debentures due 2027 and the 71/4% Debentures due 2096 (Exhibit 4.1
to The Times Mirror Company's Current Report on Form 8-K dated March 19, 1996)
|-------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.6a *   |  | First Supplemental Indenture, dated as of October 19, 1999, between The Times Mirror Company and Citibank, N.A., as Trustee (Exhibit 4.3 to The Times Mirror Company's Current Report on Form 8-K dated October 19,
1999)                                                                      
|4.6b *   |  | Second Supplemental Indenture, dated as of June 12, 2000, among Tribune Company, The Times Mirror Company and Citibank, N.A., as Trustee (Exhibit 4.12 to Current Report on Form 8-K dated June 12, 2000)                                                                                      
|4.7      |  | Agreement of Resignation, Appointment and Assumption, dated as of September 4, 2002, among Tribune Company, The Bank of New York and Citibank, N.A., appointing Citibank, N.A. as Trustee under the Indentures dated March 1,
1992, January 30, 1995, January 1, 1997 and April 1, 1999.       
|4.8 *    |  | Form of Exchangeable Subordinated Debenture due 2029 relating to the PHONES securities (Exhibit 4 to Current Report on Form 8-K dated April 13, 1999)                                                                                                                                          
|4.9 *    |  | Specimen Note for 71/4% Debenture due 2013 (Exhibit 4.2 to The Times Mirror Company's Annual Report on Form 10-K for 1995)                                                                                                                                                                     
|4.10 *   |  | Specimen Note for 71/2% Debenture due 2023 (Exhibit 4.3 to The Times Mirror Company's Annual Report on Form 10-K for 1995)                                                                                                                                                                     
|4.11 *   |  | Officers' Certificate, dated November 13, 1996, establishing the terms of the 71/4% Debentures due 2096 and attaching the specimen Form of Debenture (Exhibit 4.2 to The Times Mirror Company's Current Report on
Form 8-K dated November 13, 1996)                                            
|4.12 *   |  | Officers' Certificate, dated September 9, 1997, establishing the terms of the 6.61% Debentures due 2027, and the specimen Form of Debenture (Exhibit 4.2 to The Times Mirror Company's Current Report on Form 8-K dated September 9,
1997)                                                     
|10.1 o*  |  | Tribune Company Supplemental Retirement Plan, as amended and restated January 1, 1989 (Exhibit 10.6 to Annual Report on Form 10-K for 1988)                                                                                                                                                    
|10.1a o* |  | First Amendment to Tribune Company Supplemental Retirement Plan, effective January 1, 1994 (Exhibit 10.4b to Annual Report on Form 10-K for 1993)                                                                                                                                              
|10.1b o* |  | Second Amendment to Tribune Company Supplemental Retirement Plan, effective October 24, 2000 (Exhibit 10.2b to Annual Report on Form 10-K for 2000)                                                                                                                                            
|10.2 o*  |  | Tribune Company Directors' Deferred Compensation Plan, as amended and restated effective February 11, 2003 (Exhibit 10.2 to Annual Report on Form 10-K for 2002)                                                                                                                               
|10.3 o*  |  | The Times Mirror Company Deferred Compensation Plan for Non-Employee Directors (Exhibit 10.7 to The Times Mirror Company's Annual Report on Form 10-K for 1994)                                                                                                                                
|10.4 o*  |  | Tribune Company Bonus Deferral Plan, as amended and restated through February 11, 2003 (Exhibit 10.3 to Annual Report on Form 10-K for 2002)                                                                                                                                                   
|10.5 o*  |  | Tribune Company 1992 Long-Term Incentive Plan, effective as of April 29, 1992, as amended April 19, 1994 (Exhibit 10.11 to Annual Report on Form 10-K for 1994)                                                                                                                                
|10.5a o* |  | First Amendment to Tribune Company 1992 Long-Term Incentive Plan, effective October 24, 2000 (Exhibit 10.6a to Annual Report on Form 10-K for 2000)                                                                                                                                            
|         |  |                                                                                                                                                                                                                                                                                                

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|10.6 o*   |  | Tribune Company Executive Financial Counseling Plan, effective October 19, 1988, as amended January 1, 1994 (Exhibit 10.13 to Annual Report on Form 10-K for 1993)                               
|--------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.7 o*   |  | Tribune Company Amended and Restated Transitional Compensation Plan for Executive Employees, effective as of December 4, 2001 (Exhibit 10.8 to Annual Report on Form 10-K for 2001)              
|10.8 o    |  | Tribune Company Supplemental Defined Contribution Plan, as amended and effective as of January 1, 2004                                                                                           
|10.9 o*   |  | Tribune Company Employee Stock Purchase Plan, as amended and restated July 27, 1999 (Exhibit 10.10 to Annual Report on Form 10-K for 1999)                                                       
|10.9a o*  |  | First Amendment to Tribune Company Employee Stock Purchase Plan, as amended and restated July 27, 1999 (Exhibit 10.10a to Quarterly Report on Form 10-Q for the quarter ended September 24, 2000)
|10.9b o*  |  | Second Amendment to Tribune Company Employee Stock Purchase Plan, effective as of May 7, 2002 (Exhibit 10.8 to Annual Report on Form 10-K for 2002)                                              
|10.10 o*  |  | Tribune Company 1995 Nonemployee Director Stock Option Plan, as amended and restated effective December 9, 2003 (Exhibit 10.9 to Annual Report on Form 10-K for 2003)                            
|10.11 o*  |  | Tribune Company 1996 Nonemployee Director Stock Compensation Plan, as amended and restated effective December 9, 2003 (Exhibit 10.10 to Annual Report on Form 10-K for 2003)                     
|10.12 o*  |  | Tribune Company Incentive Compensation Plan, as amended and restated effective May 12, 2004 (Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarter ended June 27, 2004)                  
|10.12a o* |  | Form of Notice of Grant and Stock Option Term Sheet (Exhibit 10.1 to Current Report on Form 8-K dated February 11, 2005)                                                                         
|10.13 o*  |  | The Times Mirror Company 1997 Directors Stock Option Plan (Exhibit 10.15 to The Times Mirror Company's Annual Report on Form 10-K for 1996)                                                      
|10.14 *   |  | Limited Liability Company Agreement of TMCT, LLC, dated August 8, 1997 (Exhibit 10.1 to The Times Mirror Company's Current Report on Form 8-K dated August 8, 1997)                              
|10.15 *   |  | Lease Agreement between TMCT, LLC and Times Mirror, dated August 8, 1997 (Exhibit 10.4 to The Times Mirror Company's Current Report on Form 8-K dated August 8, 1997)                            
|10.16 *   |  | Amended and Restated Limited Liability Company Agreement of TMCT II, LLC, dated September 3, 1999 (Exhibit 10.1 to The Times Mirror Company's Current Report on Form 8-K dated September 3, 1999)
|10.16a *  |  | First Amendment to Amended and Restated Limited Liability Agreement of TMCT II, LLC, dated as of August 14, 2000 (Exhibit 10.17a to Annual Report on Form 10-K for 2000)                         
|10.16b *  |  | Second Amendment to Amended and Restated Limited Liability Agreement of TMCT II, LLC, dated as of August 1, 2002 (Exhibit 10.14 to Annual Report on Form 10-K for 2002)                          
|14 *      |  | Code of Ethics for CEO and Senior Financial Officers (Exhibit 14 to Annual Report on Form 10-K for 2003)                                                                                         
|          |  |                                                                                                                                                                                                  

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|21   |  | Table of Subsidiaries of Tribune Company                                                                                                                                                                                                                                       
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|23   |  | Consent of Independent Registered Public Accounting Firm                                                                                                                                                                                                                       
|31.1 |  | Rule 13a-14 Certification of Chief Executive Officer                                                                                                                                                                                                                           
|31.2 |  | Rule 13a-14 Certification of Chief Financial Officer                                                                                                                                                                                                                           
|32.1 |  | Section 1350 Certification of Chief Executive Officer                                                                                                                                                                                                                          
|32.2 |  | Section 1350 Certification of Chief Financial Officer                                                                                                                                                                                                                          
|99   |  | Form 11-K financial statements for the KPLR, Inc. 401(k) Plan, the Times Mirror Savings Plus Plan, the Tribune Broadcasting Retirement Plan, the Tribune Company Defined Contribution Retirement Plan and the Tribune Company Savings Incentive
Plan (to be filed by amendment)

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