Tuesday, November 11, 2008

Losses Mount for Tribune

Here's the continuing bad news on Tribune's financials:

For the third quarter, operating profit crashed 83 percent to $37 million on operating revenue that fell nearly 11 percent to $1.04 billion. Total third quarter net loss was $122 million.

So far this year, Tribune has posted $2.83 billion in net losses, versus a profit of $166 million for the same period last year. In fact, its operating revenue for the nine months is $3.15 billion, down 8 percent -- and just slightly larger than its net loss.

On the publishing front, the numbers are startling, with an operating loss of $3.75 billion. Cash flow has sunk 53 percent to $205 million, while operating revenue is down nearly 12 percent to $2.07 billion.

Tribune is staying ahead of its creditors by selling off chunks of the company. In the third quarter it sold a 10 percent stake in Career Builder for $135 million, using the after-tax proceeds to pay down debt. Earlier this year, it finalized the sale of Newsday, allowing it to pay off debt. Still, interest expense ballooned 32.5 percent to $232 million in the third quarter.

Tribune has wiped off nearly $4 billion in good will from its books this year, equal to half the company's purchase price in 2007. It's clear that Tribune is cleaning house, wiping off all kinds of good will related to its various subsidiaries, as well as discontinuing operations of other units. That means -- maybe, sort of, cross your fingers and hope -- Tribune is worth roughly $4 billion. Very likely it is worth less. Only future financial statements will tell.

Staff reductions are costing Tribune a bundle, about $115 million thus far this year in severance. Of that, $85 million is from publishing. The company may not see positive financial results from this and other moves until next year. But if the economy continues its downward trajectory ...

These are just some of the financial highlights. For more info, go to www.tribune.com/pressroom/releases/2008. In fact, skip the press release and go straight to the tables.

1 comment:

Anonymous said...

"Of that, $85 million is from publishing."

I thought the severance packages were coming from the 'surplus' in the old Tribune pension plan. Not from current Tribune operating funds.

By the way, I wonder what's happened to that 'surplus' given the state of the market.