Back to GetFilings.com

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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 29, 2002

Commission file number 1-8572

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

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

        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 X    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. [    ]

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

        Aggregate market value of the Company's voting and non-voting common equity held by non-affiliates on June 28, 2002, 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 $9,496,000,000.

        At February 28, 2003, there were 307,444,250 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 16 to the Company's Consolidated Financial Statements).

        The following document is incorporated by reference, in part:

        Definitive Proxy Statement for the May 6, 2003 Annual Meeting of Shareholders (Part III, to the extent described therein).

INDEX TO TRIBUNE COMPANY
2002 FORM 10-K

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, and the development and distribution of information and entertainment through the Internet. 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." Certain prior year amounts have been reclassified to conform with the 2002 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, newsprint prices, cost of broadcast rights, interest rates, competition and other economic conditions; regulatory and judicial rulings; adverse results from litigation or tax related proceedings or audits; the effect of professional sports team 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. 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.

Recent Developments

        On Dec. 30, 2002, the Company agreed to acquire the stock of KPLR-TV, St. Louis, and the assets of KWBP-TV, Portland, Oregon, from ACME Communications for a total of $275 million. The Company will acquire the stock of KPLR-TV for $200 million in cash. The acquisition of the assets of KWBP-TV will be structured as a like-kind asset exchange for income tax purposes. It will be funded with the remaining assets of the Denver radio station group (KKHK-FM, now known as KQMT-FM), which have an estimated fair market value of $55 million plus $20 million in cash. The Company expects the acquisitions of KPLR-TV and KWBP-TV to close late in the first quarter of 2003, pending regulatory approval.

Significant Events

        On March 13, 2000, Tribune and The Times Mirror Company ("Times Mirror") announced the signing of a definitive agreement that provided for a merger of Times Mirror into Tribune in a cash and stock transaction. Prior to the merger, Times Mirror published the Los Angeles Times, Newsday, The Baltimore Sun, The Hartford Courant, The Morning Call, The Advocate, Greenwich Time and several smaller newspapers. The merger was effected through a two-step transaction for a total purchase price of approximately $8.3 billion, including assumption of debt and preferred stock.

        In the first step of the transaction, Tribune made a cash tender offer for up to 28 million Times Mirror shares at a price of $95 per share, which expired on April 17, 2000. Through the tender offer,

1

Tribune acquired 23.1 million Times Mirror shares for $2.2 billion, representing 39.4% of the outstanding Times Mirror common shares. Following the tender offer, Tribune gained effective control of Times Mirror and named 13 Tribune designees to Times Mirror's 27 member board of directors.

        Tribune completed the second step of the acquisition on June 12, 2000, following Tribune and Times Mirror shareholder approvals, through a merger of Times Mirror into Tribune. In the merger, each remaining Times Mirror common share was converted, at the election of the shareholder, into 2.5 shares of Tribune common stock or, to the extent available, $95 in cash. This transaction was accounted for as a step acquisition purchase. Tribune has consolidated Times Mirror's results since the cash tender offer closed on April 17, 2000. Consolidated results of operations include 39.4% of Times Mirror's operating results for the period April 17 through June 11, 2000 and 100% thereafter. Minority interest expense of $16 million, net of tax, was recorded for the remaining 60.6% of Times Mirror that Tribune did not own during the period of April 17 through June 11, 2000. The total acquisition cost of $8.3 billion was allocated to the assets acquired and liabilities assumed based on their respective fair values. A total of $5.9 billion, representing the excess of acquisition cost over the fair value of Times Mirror's net tangible assets, was allocated to intangible assets. In addition, three former Times Mirror subsidiaries, Jeppesen, Times Mirror Magazines and AchieveGlobal, were sold by the Company in the fourth quarter of 2000. See Note 2 to the Company's consolidated financial statements in Item 8 for further discussion.

        On Sept. 5, 2000, the Company sold its education segment to The McGraw-Hill Companies for approximately $686 million, including a related tax benefit of $22 million. The Company received $642 million in cash in the third quarter of 2000, and the remaining proceeds were received in January 2001. In the second quarter of 2000, Tribune recorded a one-time, after-tax loss on the sale of approximately $96 million. The information in this Form 10-K reflects the education segment as a discontinued operation. See Note 4 to the Company's consolidated financial statements in Item 8 for further discussion.

Business Segments

        The Company's operations are divided into three industry segments: publishing, broadcasting and entertainment and interactive. These segments operate primarily in the United States. In addition, certain administrative activities are reported and included under corporate. These segments reflect the way the Company sells its products to the marketplace and the way in which it manages operations and makes business decisions.

        The following table sets forth operating revenues and profit information for each segment of the Company (in thousands). Information pertaining to 2001 and 2000 does not reflect the non-amortization provisions of Financial Accounting Standard ("FAS") No. 142, "Goodwill and Other Intangible Assets," which requires that goodwill and certain intangible assets no longer be amortized to

2

earnings, but be reviewed periodically for impairment. See Item 7 for further discussion of the effects of FAS 142.

(1)

Operating results for the former Times Mirror publishing and interactive operations are included beginning on April 17, 2000.

(2)

Operating profit for each segment excludes interest income and expense, equity earnings and losses, non-operating items and income taxes. Operating profit before restructuring charges is a key metric used by the Company's chief operating decision maker, as defined by Financial Accounting Standard No. 131, "Segment Reporting," to make decisions about resources to be allocated to a segment and assess its performance.

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

(1)

Corporate assets include cash and cash equivalents, marketable securities and other investments.

        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 usually reflect spring advertising, while the fourth quarter includes advertising related to the holiday season. Fiscal years 2002 and 2001 comprised 52 weeks. Fiscal year 2000 comprised 53 weeks. The effect of the additional week in 2000 on the comparative financial statements taken as a whole is not significant.

3

Publishing

        The publishing segment represented 72% of the Company's consolidated operating revenues in 2002. The combined average circulation of the Company's daily newspapers for the six months ended Sept. 30, 2002 was approximately 3.4 million daily copies and 4.8 million Sunday copies. The Company's primary newspapers are Los Angeles Times, Chicago Tribune and Newsday, which includes Hoy, a Spanish-language daily newspaper serving the New York metropolitan area. Other daily newspapers include South Florida Sun-Sentinel, Orlando Sentinel, The Baltimore Sun, The Hartford Courant, The Morning Call, Daily Press, The Advocate and Greenwich Time. The Company also owns an entertainment listings, newspaper syndication and media marketing company, a Chicago-area cable television news channel and other publishing-related businesses.

        The Company's newspaper subsidiaries produce a wide range of niche publications in addition to their flagship products. These include community newspapers, lifestyle magazines and numerous publications devoted to the major classified advertising categories. Direct marketing, commercial printing and related services are also performed by the Company's newspaper subsidiaries. Revenues for the Company's newspaper subsidiaries and other publishing related businesses for the last three years were as follows (in thousands):

(1)

Revenues for the former Times Mirror newspapers are included beginning on April 17, 2000.

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

(1)

Revenues for the former Times Mirror newspapers are included beginning on April 17, 2000.

(2)

Primarily includes revenues 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.

4

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

(1)

Advertising volume for the former Times Mirror newspapers is included for the full twelve months.

5

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

(1)

Circulation data based on Audit Bureau of Circulation ("ABC") averages for the six-month periods ended September 30.

(2)

Circulation data is included for the former Times Mirror newspapers for the six-month periods ended September 30 in 2000 although the Company did not complete the Times Mirror acquisition until June 12, 2000.

(3)

Recognizing that advertiser and consumer demand for products and services varies by day of the week, Los Angeles, Chicago and Baltimore separate daily into two parts to provide better audience measures for advertisers. The Los Angeles Times' Thursday through Saturday ABC circulation averages for 2002, 2001 and 2000 were 1,006, 1,002 and 1,001, respectively. The Chicago Tribune's Wednesday through Friday ABC circulation averages for 2002, 2001 and 2000 were 679, 676 and 663, respectively. The Baltimore Sun's Wednesday through Friday ABC circulation averages for 2002, 2001 and 2000 were 300, 306 and 320, respectively.

        Each of the Company's newspapers operates 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.

        The Chicago Tribune, South Florida Sun-Sentinel, Orlando Sentinel, Daily Press, The Morning Call, The Advocate and Greenwich Time are printed in Company-owned production facilities. The Los Angeles Times, Newsday, The Baltimore Sun and The Hartford Courant are printed on Company-owned presses in production facilities leased from an affiliate (see Note 8 to the Company's consolidated financial statements in Item 8). The principal raw material is newsprint. In 2002, the Company's newspapers consumed approximately 940,000 metric tons of newsprint. Average newsprint prices decreased 23% in 2002 from 2001. Average newsprint prices increased 3% and 5% in 2001 and 2000, 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 424,000 metric tons of newsprint in 2002, representing 48% of the Company's newspapers' newsprint supply. The Company has agreed to purchase 450,000 metric tons each year from 2003 to 2007, subject to certain limitations, at prevailing market prices at the time of purchase.

6

Los Angeles Times

        The Los Angeles Times has been published continuously since 1881. The newspaper has won 27 Pulitzer Prizes, including two in 2002. 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, The Times competes for advertising and circulation with 16 local daily newspapers, with its largest competitor having approximately 301,000 total average daily circulation, and three daily national newspapers. For the six-month period ended September 2002, The Times ranked 4th and 2nd in the country for average daily and Sunday circulation, respectively, according to ABC. Approximately 77% and 81% of the paper's daily and Sunday circulation, respectively, was home delivered in 2002, with the remainder sold at newsstands and vending boxes.

        In addition to the daily edition covering the Los Angeles metropolitan area, The Times publishes daily Orange County, San Fernando Valley and Ventura County editions. Daily and semi-weekly community newspapers are inserted into the paper in selected geographic areas to provide targeted local news coverage. The Times also publishes a daily national edition that is distributed primarily in Northern California, New York and Washington, D.C. Through its subsidiary, E Z Buy & E Z Sell Recycler Corporation, The Times publishes a collection of 16 alternative classified papers in Southern California including titles such as Recycler, AutoBuys, CycleBuys and Renter. In conjunction with Media News Group, Inc., The Times owns CIPS Marketing Group, Inc., which provides alternative distribution services for advertising preprints.

Chicago Tribune

        Founded in 1847, the Chicago Tribune is 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. The Chicago Tribune has won 22 Pulitzer Prizes. For the six months ended September 2002, the Chicago Tribune ranked 7th in average daily circulation and 4th in average Sunday circulation in the nation, based on ABC averages. The Chicago Tribune's principal competitor is the Chicago Sun-Times. According to ABC, for the sixth-month period ended September 2002, the Chicago Tribune had a 28% lead in total daily paid circulation and a 173% lead in Sunday paid circulation. The Chicago Tribune's total advertising volume and operating revenues are estimated to be substantially greater than those of the Chicago Sun-Times. Approximately 81% of the paper's daily and 67% of its Sunday circulation is sold through home delivery, with the remainder sold at newsstands and vending boxes.

        The Chicago Tribune is published by Chicago Tribune Company, which also publishes ¡Exito!, a free weekly newspaper targeting Spanish-speaking households and RedEye, a Monday through Friday edition of the Chicago Tribune. Other businesses owned by Chicago Tribune Company include Tribune Direct Marketing, a direct mail operation, and Chicagoland Publishing Company, a publisher of free apartment and new-home guides. Chicago Tribune Company also offers printing and delivery of other publications. In August 2002, the Company acquired Chicago magazine, a monthly publication, which serves as a reference guide for entertainment, dining, shopping and real estate for the Chicagoland area.

Newsday

        Newsday, Inc.'s primary business is publishing Newsday, a morning newspaper published seven days a week, circulated primarily in Nassau and Suffolk counties on Long Island, New York, and in the borough of Queens in New York City. The New York metropolitan area ranks first among U.S. markets in terms of households. The paper has been published since 1940 and has won 17 Pulitzer Prizes, including one for criticism in 2002. For the six-month period ended September 2002, Newsday ranked

7

8th and 13th for average daily and Sunday circulation, respectively, in the country, according to ABC. Newsday competes with three major metropolitan newspapers and daily regional editions of several national newspapers. In addition, there are numerous daily, weekly and semiweekly local newspapers and free distribution newspapers in its distribution area. Approximately 58% of the paper's daily and 54% of its Sunday circulation is sold through home delivery.

        In addition to Newsday, Newsday, Inc. publishes Distinction, a magazine serving Long Island's upscale 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. In addition, Newsday, Inc.'s publishing and alternate distribution subsidiary, DSA Community Publishing, operates Newport Media, a publisher of 105 pennysaver editions (zoned advertising editions); This Week, a publisher of 69 pennysaver editions; Hoy, the New York metropolitan area's largest Spanish-language daily newspaper; DSA, a distributor of preprints; and DSA Direct, a wholesale distributor of more than 100 publications in the five boroughs of New York City.

Other Newspapers

        The Company's other daily newspapers are The Baltimore Sun, South Florida Sun-Sentinel, Orlando Sentinel, The Hartford Courant, Daily Press, The Morning Call, The Advocate and Greenwich Time. Each of these newspapers are published every morning.

        The Baltimore Sun primarily serves the Baltimore Metropolitan Statistical Area, including Anne Arundel, Baltimore, Carroll, Harford and Howard counties. The Baltimore market ranks 24th in the United States in number of households. The Sun has published a daily, morning newspaper since 1837 and has won 14 Pulitzer Prizes. For the six-month period ending September 2002, The Sun was ranked 28th and 22nd for average daily and Sunday circulation, respectively, in the country, according to ABC. The Sun competes with The Washington Post in Anne Arundel and Howard counties, with The Annapolis Capital in Anne Arundel county and with The Carroll County Times in Carroll county, as well as with daily regional editions of national newspapers. In addition, there are other daily and weekly local newspapers in its distribution area. Approximately 79% of the paper's daily and 64% of its Sunday circulation is sold through home delivery, with the remainder 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 are The Columbia Flier, The Towson Times, The Owings Mills Times and The Aegis.

        The South Florida Sun-Sentinel is the major daily newspaper serving the Broward/South Palm Beach county market, leading in both circulation and readership. The paper has been published since 1910. The Miami/Fort Lauderdale market ranks 17th in the nation in terms of households and the Palm Beach County market ranks 39th. Approximately 73% of the paper's daily and 68% of its Sunday circulation is sold through home delivery, with the remainder sold at retail locations, vending boxes and other various methods of distribution.

        Sun-Sentinel Company, publisher of the South Florida Sun-Sentinel, also serves the news and information needs of South Florida through el Sentinel, a weekly Spanish-language newspaper, weekly community newspapers, niche publications, and television and radio partnerships. Other publications produced by Sun-Sentinel Company include City & Shore, a lifestyle magazine; City Link, an alternative weekly newspaper; Florida New Homes Guide, a bimonthly real estate magazine; South Florida Parenting, a monthly magazine providing news and advice for family oriented audiences; and Gold Coast Shopper, an advertising-oriented publication. Sun-Sentinel Company also offers direct mail services. Forum Publishing Group (formerly known as Sun-Sentinel Community News Group), a group of

8

community-based weeklies, includes Jewish Journal, a collection of newspapers serving South Florida's Jewish community.

        The Orlando Sentinel primarily serves a five-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. The Orlando Sentinel has been published since 1876 and has won three Pulitzer Prizes. The Orlando/Daytona Beach/Melbourne market ranks 20th among U.S. markets in terms of households. Approximately 78% of the paper's daily and 70% of its Sunday circulation is sold through home delivery, with the remainder sold at newsstands and vending boxes.

        Orlando Sentinel Communications Company, the publisher of Orlando Sentinel, also publishes US/Express, a free weekly entertainment publication used to distribute advertising to non-subscribers. The company also publishes several free-distribution, niche products in the Central Florida market including Job Xtra, AutoFinder, apartments.com magazine and New Homes magazine. In addition, the company publishes the free-distribution, weekly, bilingual newspaper, El Sentinel, and its companion Web site, elSentinel.com, and is a partner with Time Warner Communications in Orlando's 24-hour local cable news channel, Central Florida News 13. Orlando Sentinel Communications also offers commercial printing services, direct marketing/direct mail services and delivery services for other publications.

        The Hartford Courant, a morning daily and Sunday newspaper that was first published in 1764, is the oldest continuously published newspaper in the United States. The Hartford Courant has won two Pulitzer Prizes. It is published in Hartford, Conn., and serves the state's northern and central regions. The Hartford/New Haven market is the 27th largest U.S. market in terms of households. Hartford Courant Company publishes 10 regional editions of The Hartford Courant, which provide local news and advertising. It also owns New Mass. Media, Inc., a publisher of four weekly alternative newspapers in Connecticut, Massachusetts and New York, and operates ValuMail, Inc., a shared-mail company that distributes advertising supplements to households in Connecticut, Massachusetts, New York and Rhode Island.

        Daily Press is published daily, including Sunday, and serves the Virginia Peninsula market. Daily Press is 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 Press market includes Newport News, Hampton, Williamsburg and eight other cities and counties. This market, together with Norfolk, Portsmouth and Virginia Beach, is the 41st largest U.S. market in terms of households. In February 2001, the Company acquired The Virginia Gazette, which is published bi-weekly and primarily serves Williamsburg, Va. and surrounding counties.

        The Morning Call in Allentown, Pa., primarily serves Lehigh and Northampton counties in Eastern Pennsylvania.

        The Advocate and Greenwich Time serve the southern part of Fairfield County, Conn. The Advocate circulates primarily in Stamford, Conn., and Greenwich Time circulates in Greenwich, Conn. The Advocate has won one Pulitzer Prize.

Other Publishing Related Businesses

        The Company is also involved in weekly publications, syndication activities, advertising placement services, entertainment listings, cable television news programming and other publishing-related activities. The syndication activities, conducted primarily through Tribune Media Services ("TMS"), involve the marketing of comics, features and opinion columns to newspapers. TMS is also engaged in advertising placement services for television, cable and movie listings in newspapers and online and the development of news products and services for electronic and print media. TMS Movie Information Products, Inc. (formerly Premier DataVision, Inc.), distributes movie show-time data and assembles and distributes movie show-time and display advertising. TMS TV Publishing, Inc. (formerly JDTV, Inc.),

9

publishes television listings information for the cable and satellite television industries. In May 2001, the Company acquired a controlling interest in TV Data Technologies, a provider of television listings products. 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 1.6 million cable households in the Chicago market.

Broadcasting and Entertainment

        The broadcasting and entertainment segment represented 27% of the Company's consolidated operating revenues in 2002. At Dec. 29, 2002, the segment included WB television affiliates located in New York, Los Angeles, Chicago, Philadelphia, Boston, Dallas, Washington, D.C., Atlanta, Houston, Seattle, Miami, Denver, Indianapolis, San Diego, Waterbury, New Orleans and Albany; FOX television affiliates in Seattle, Sacramento, Indianapolis, Hartford, Grand Rapids and Harrisburg; an ABC television affiliate in New Orleans; two radio stations, one located in Chicago and one located in Denver; 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.

        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.

        In April 2001, the Company acquired Tower Distribution (formerly United Video), WGN Cable's distribution entity, and in August 2001, the Company acquired television station WTXX-Waterbury, which serves the Hartford, Connecticut market.

        In February 2000, the Company acquired the remaining interest in WATL, LLC (formerly Qwest Broadcasting, LLC), which owned television stations WATL-Atlanta and WNOL-New Orleans, for $107 million in cash and conversion of notes and debt. The Company had owned a 33% equity interest and convertible debt in WATL, LLC since it was formed in 1995.

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

(1)

Includes the following since their respective acquisition dates: WTTV-Indianapolis and its satellite station WTTK-Kokomo, Indiana (July 2002), WTXX-Waterbury (August 2001), Tower Distribution (April 2001) and WATL-Atlanta and WNOL-New Orleans (February 2000).

10

Television

        In 2002, 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: