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TRIBUNE
COMPANY TO APPEAL TAX COURT RULING
CHICAGO,
Sept. 27, 2005—Tribune Company (NYSE:TRB) said today it
will immediately appeal a United States Tax Court ruling issued
late this afternoon disallowing the 1998 tax free reorganization
of Matthew Bender, a former subsidiary of The Times Mirror Company.
Tribune acquired Times Mirror in June 2000, and inherited the
preexisting tax dispute at that time.
“We are disappointed
by the court’s ruling,” said Crane Kenney, Tribune’s
general counsel. “We look forward to our appeal in the Seventh
Circuit.”
The exact amount of
the tax deficiency has yet to be determined, but is estimated
to be in the $1 billion range for both the Matthew Bender transaction
and a similar transaction completed by Times Mirror in the same
year. Over time, deductions for state taxes and interest will
reduce the net cash outlay to approximately $850 million. The
company’s current reserves connected to the litigation total
approximately $250 million. The company intends to pay the tax
promptly through the issuance of commercial paper.
These tax issues are
covered by purchase accounting related to the Times Mirror acquisition.
On a preliminary basis the company anticipates that approximately
$500 million will be added to goodwill on Tribune’s balance
sheet and that approximately $125 million (after taxes) will be
charged to the company’s income statement in the third quarter.
CONFERENCE CALL/WEBCAST
The company will conduct
a conference call tomorrow, Sept. 28 at 8 a.m. CT (9 am ET, 6
am PT) to discuss the Tax Court ruling and accounting issues.
To access the call, dial 877/847-0401 (domestic) or 706/679-5349
(international). The conference ID number is 1150528. Replays
of the conference call will be available from Sept. 28, through
Oct. 5. To hear the replay, dial 800/642-1687 (domestic) or 706/645-9291.
The access code for the replay is 1150528.
A live webcast will
be accessible through www.tribune.com and through CCBN at www.ccbn.com.
An archive of the webcast will be available from Sept. 28 to Oct.
5.
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This press release
contains certain comments or forward-looking statements that are
based largely on the Company’s current expectations and
are subject to certain risks, trends and uncertainties. Such comments
and statements should be understood in the context of Tribune’s
publicly available reports filed with the Securities and Exchange
Commission (“SEC”), including the most current annual
10-K report and quarterly 10-Q report, which contain a discussion
of various factors that may affect the Company’s business
or financial results. Any of these factors could cause actual
future performance to differ materially from current expectations.
Tribune Company is not responsible for updating the information
contained in this press release beyond the published date, or
for changes made to this document by wire services or Internet
service providers. The Company's next 10-Q report to be filed
with the SEC may contain updates to the information included in
this release.
TRIBUNE (NYSE: TRB)
is one of the country’s top media companies, operating businesses
in publishing and broadcasting. It reaches more than 80 percent
of U.S. households and is the only media organization with newspapers,
television stations, and websites in the nation’s top three
markets. In publishing, Tribune operates 11 leading daily newspapers
including the Los Angeles Times, Chicago Tribune and Newsday,
plus a wide range of targeted publications such as Spanish-language
Hoy. The company’s broadcasting group operates 26 television
stations, Superstation WGN on national cable, Chicago’s
WGN-AM and the Chicago Cubs baseball team. Popular news and information
websites complement Tribune’s print and broadcast properties
and extend the company’s nationwide audience.
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Tribune Corporate Relations
435 N. Michigan Ave.
Chicago, IL 60611
www.tribune.com
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