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~Ohn Kc:iwalczuk Vice, President Telephone: '

j'eun Jayna Cho' A'nalyst

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Telephone: (212) 270-4362

credit Executive . . , Jeff seti\ .

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PeterCoh~n Managing DireCtor TelepHone,: ... at2, 622-9855

Joachim Sonne Vice Pres;dent Telepfronf!: ·a12) 622-2333

Tony A Grlmm'nck As$oclate Telephone: (~12, ~2-'799 '

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.Exe~utive SummarY ~"Background . . . . .

Bacl(ground

~2006, , ' " , . "

m.' SePt~ber 21', 2b06:.Tribune anl'lOunc~ its board of dir~~rS has estabUshed an independent special committee to el':plore .' alternatives for creating additional v~,lue for shareholders. The process was expected to be concluded by the end 0"2006

fI: Managem,ent p~esentatio~5 ~ere heltlfn No~em~er ,.' , , " II! Initial bids for' Tri~ne. were in the l~w $30 range, ~ear o~ befow the recent S32-:50 tender price .

• ApriJ.2. 2007 ,; With· the completion of its strategic review proc~ssr Trlb~ ~sreed to a gO-Pr!va~, transa~pn whereby Tribune' shareholders will . receive $~4.per share. Sam ZeU is suppp~ing the tiansaction with a $315 milttoit iiwestment. Sharetlolders will receive their· . consideration in.a two.stagelransattion. . ',..' '

~, Upon completion of the transaction, theC~pany wilt be privately held, with an Employee Stock Ownership Plan (ESOP) h,?lding ali . of Tribune's' then-outstandIng common ~ock ah~ ZeU holding a subordinated note and a warrant entitling him to acquire 49% of Trlbu'ne's commen st«k. ~~l will join the Trfbune bOard upOn completion of his initial investment and witt become chalrman wh~n the merger doses .. " - . . .

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.... Ja!. ESOP has·request~ regfstratie:m.rI!lh~ equal to those gr;!nted to.the zett LLC in the event the m~er dOes not dose.

2". lell Stock Purchase . , .. : ~, A new Llc'wholly owned by 'Zell purCl1ases $50 million 'of neWly iS5~d'Tribune eomrri6n'stodhlt $34~' sha~e, and it newly i5S~ed

Tribune exchangeable note for $200 miUion. The ~changeabl~ note e~chan!Ies intQ'COirtmQr:illtock'at $34 per-share if ~ merger does not close. .. ,- . . . ".' .', ·.c .' ,. ..... ,:' ," .

~ The Zellinvestment will be completed upOn e,xpJration or early termination of the'Rart-SCQ{t·RtJdirio waiting period, subject to . other customary conditiOns. . .. ~ .' :.,.. .

l!'I • Upon' eXeaJtioli of the purdlase agreement and the merger agreement. ZeU joins t~ Tiibune board. ZeU has requested that he b~' , appointed chairman ~pon closing his stOCk purch~se. ' '. " . .;', .

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• Merger Agreeme.nt 15 signed .' .' III leU, ESOP> McCormick Foundation and Chandler . .' Trusts sign Voting Agreement . ".

. . ~ v...- &~)$':' S1> - ZeU purch~5 newly f~common stock and an ~ ~ S~~M~.: ," " ..

. exchangeable note fol-.S~!?ihiUion in cash . .. . . .... :.' ., --·2.ro .. ·f··· .... • ESOPfs.fonnedand purchases. newly IsSued .~., ':' .. ;,r./J.S,r.j.'

common stock in exchange fot a $250 million note :;.... . .) . i"" . .' .. :?:/(: tt? Tftbune.,(ESOP Loan) '. . . . til. Employees give up $60 million in annual 401 (k)

'matching for future years .

- Tribune" ra)ses $7:0 billIon of deb~ :-: .. Tribune retums.$4.2 btllfcin of capital tQ

sha~holders via a share repurchase Ia. ZeU and the ESOP do ~t participate

.• Tribune refinances $2.8 billion of existing debt

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f ~ I-' ' .' &'ur:~ Total % Leverage (1) .uSes· Tota! % New Revolving Credit Facility ($750mm) $0 0.0% O.Ox' Share Repurchase $4,288' . New.Tem LoanB . 7,015.72.4 5.0 Refinance EXlsllng Debt 2,825 : NewDelay9a·CrawTermloanB(S263mni)· 0 '0.0 . ;'5.0 RoIrExlsting~bt. 1.521' Ron ExIsting Debt .'.' 1,521 ·15.7 a.o PHONES: .. .~

. PHONES. '.~ gOO 9.3 .6.7 Rnanclng Fees' 130 Z8l1lnvastment(2) 250 .' 2:.6 TTan~on Fees 22

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Total Soun:ea $9,886 100.0% ..,;.' 6.7)(· Total uaea ,:. . $9,686. 100~~ . ":'

Share Repurchase

T&tal ShareRepiirchaseAmount·$4.2B8 RePu;chase' Price ~r Share $34.00 No.ofShsmRepurChaeed.. 1~6.1·

.... Zell Common Shares Issued at S34.00lsh(2) : ',' ?'t:5 PF Basic Shaius QIS (/hcL ielr shares) . 115.7 .

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Not~ Adj. EalTDA Is calculated as OpemUng Cash FI~ ("OCP) before stock-bas~' compensatk;"n plus InCrem~1 cash cost.sevlngs and cash jlcws from equity il'l~ents. (1) BasadonS1,4·11mmL~PFAdJ.EBri'OA(atQ12OO7). . --.:.' . .:. .". . '. .. (2) Used to jiurdlase $5Omm of ~y·is8ued Tribune comm.on stock for $34Ishare and $200mm of a note exchilng!*lbl& for common stock.

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New Revolving Credit Facility ($75Omm) $0 0.0% ·O.Ox Roll Existing Bank.Debl 6,712 48.4 .. 4.6 Incremental Term loan B . 2.105 '1-5.2 6.0 NewSeniorNotes 2.100 15:2 7;4 . Rolled Existing.Notes 1.507 10.9 8.5

, PHONES' . 900 6.5 9.1 . ' Option PrOceeds't) 215 1.e-

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Total Sources $13;854" 100.0% 9.1x'31 .. Total'U8_ '.''"':;'',,'' $13,854 . ":---j-."!-"-,",~--"'. __ ''''", __ "_.--.. -~", .... ------"""",:,,,, .. - . ,-' .:' .

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lesS: Cash.~~'from CUbs / Comcast . . .~'. ... 1$602) Share ~ urci.L' TOtal . P '.JII"""'. $12,722 8.9x(4) Total'$~~r~'F!~a$&:AmotJnt . $4,261

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. Total'PF ~bt at Q4'f11 . Zen Sl'iare:R&pu~Al1lount 50' . .:-

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NOte: Adj. EBmM fs.CllCulatecl as Ojle"rating CaslrFlow ("OcF.~) befor~ slXM;k·based compensation' plu5InCi'~tlIt:(~'~·5,lwinB$. and cash fIo~ from equity Investments. (1) /ndudl!5$15inmortaxbenefltsln~007. . ,; ,'. . -- . . ,'.::

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IncrementCl! Credit Fncility - Indicative terms arid conditions

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750 i25 $8,028 S2,4C8

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07113~OO6 Annaur.c8 2Q eernlnas at diluted EPS of $lI.53 compared v.fth 5.12 in2Q.FY'05.

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Source! 8locnibenl, ComPlOY ml~ Wall street researCh and PowerData .' . : . Note: ~.lIiper TndeX Ii'ldUdes Blt, OJ, GO. JRt, lH;, MEG, NYr, WPO; ",arket data as of 02120/2007 • FullY dilutechhares per the treasurystiJck method . . " , ' , . . ' Z CI.SfI balance Of $23Bmm as of 9/24/06l!tus net proceeds froril ~Ie of real estate assets, comp~ny plane, ' :BrI5SRing~hares and increased stlike In Topix.net. :,;' ....',

1 Stated.di!btfrom 8-K RUng plus market value of PHOI'IES' of $551m {as Qf Q,l'2006} , " 4 Estimated mamet yalue of publk: and private rnvestm~per Walt Street estimates adjusted ,fer 21l' holdings cf'\SCC)Unt.. ,

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Tit.! B U N,E C O~PANY 23.

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, , l/I Ffllanda~ coVenants: "', .. ' '. . ,,': '.. . • •. ': ," " Mtni!ftUm Interest Coverase of 1.7Sx throtJ.gh 12/30/Q7, ,2.Ox thereafter; Post zelttrarisactton. 1.1x through 12nO/(l7, 1.1Sx ,

~ between 12/31107 and 12128/08; (.iOx.between 12/29/0hnd 12n-7J09~:and 1.2SXlti'ereafter' : .' ' , , MaXtmum Total Guaranteed, Debt ~~ of 6.25x·t,hr{)ugh 1213tiot': With o.iSx step-doWn each year, 'unt(t12/2611 0, anti

5.25x thereafter; Post ZeU transaction, 9.00x through 12128108, Witb'O.25x step· down eaCh year, untfl12126/10 II: Othercovenants; , '. . . -If i . . .

. ' S40MM cOst saVing from elimination of 401 (k) contrlbutfo~5 ' ' , ' Ele~to(l and maintenance of S Corp treatment" " . "

, ,:, ZeU agrees to inveSt 'up 'to $100hW. In Junior Capital of Tribune If S :Corp"cHectfon ".Qt made ("Special. 'Contribut1on~) . . . '. . . . , ,', ,.

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.,. ... :::; ... " .:. .(:.~ .,- .. -:;:':. ';< ;':'~:'.' ': ~ .. :. .•.. - ," .~. - ',':' ~~ .. ~-~.~-'-~'.---:- ------~~--~---~---- .:.-;:;--.-.-'-~' . ".: .' ..• We :recommen~ an l.:GD·oO~ for Trib~e'$proposed ctedft fadlitles: '.' . . .... , . . .'~'

If· Oui.$10.1B ba,;~d~6r (7-Yrs S7,01sNN. Til B, 7-yrs Si63MM DDT!... 6-~rs $75OMM.R/~.: $2~ 105MM Incrementat:T/L) Will be' ~ .. " .. differentiated from ~e new high yield d.E!ofby vf~e. of the sentor g~rBntees(the ii~ bon:ds wiU'have asubordlmited B~aririteel. .. '

and "the ~ollaterat. The bank debt will be ahead onlle $1. S8 .of existing debt as.a result of ItS"Seri.loF gua:rai1t~~1~e ~ldstitlg?hotes' have. n~. sUbstdlary guarantees) although they 'share equal and ratably with 'th~ bank debt yi1th respect to' I~:co((aterat. thec.bank debt is senjor ~the $900MM of Phones. debt wii~ is not guaranteed and has nQ collateral. Wht£e the cOllateral 1ncludes.~Jil~e of. the broadcasttng ftrick but not the publishing stock, the guarantee at publfshing will prpvlde the senior lendersw!th aprforfty:l;:tafm' .

. on t~e publi$hl~g·assets.· . . . : '" .;.,.. . '. ". . ....... .""'.: .' .,:" . '11 PLe;lse see- the DCFWiluationYS. Bank Debfgraph 'on the next'page; Sum.of the parts DCF value of $13.6815 enough to cover our . . bank :debt wfth 25% (or $3.449MM) of cushion:' " . . . :.' .' '.:_., . . " .

• f9 Give,,' ~at the ba~ debt is differentiated frain all cithe~ debt in the tapl~l stNct.ure, either th~ugh fts gu~rantees or ~oUai~;al or' bOtti, there is a stroni coveriant!liii::kage, the ~anics have the ab1t.1ty to beC~ secured with th.e publlshlni.·:~ets that·are:·ni;)t( . currently trt the' cotla~eral-package, and Tribune!s' sum of the parts' DCF value shows a 25% cushion, we be~ieve~a secured lGlfis ' .. appropriate. We recommend a 30%"LGD (rath~ than 25%) gt~n ·the stock-only nature of the coHatera.t and the .fact tha; we. share it ' Wit~ the $1.5B.:of ~sting debt.' . .

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.. ~ l JP~o..gan 0 TRIBUM: c.CYMPANY ',:'

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Bank.Debt

Sourt:~ Sponsor mOdei ..... . '. :, . .. , .' . . ' NOMlte: See the Credit Analysis ~ckage for valuation detaIls. Z .. "OMM shares assumed outstanding based DIi treasul\l stock method, .. ' .. dpointYBIuat!DniIS5Umesor.·~srowth ' /", ..': . ',' .-. 2 I&sUmell market vawe for uncmisoi1dat.ed equity Investments elCtludes Time warner Shares, undertYInS' PHONES' QiIaqO CUbs value estimate by ~r. SIIOIIOIted by Wall

Street estimates. See valuation of Tribune's llricOnsoIidated Investments In the Credit Analysis pacl

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:Contents ."

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Page

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. Appendix' 3: Public and . Prtvate.·MarketSuni~of~the~Parts . hO)K1. ~·"ll'IIrAI:tIJh~~~'i1TY10 "'~ .-~--*-C.~" • Analysis '. :

• .' l ... ~ ••

>A $J69m EBn:DA.$t.,",. ~TDA ~19m.· 'YI1D4 $&n .. ' :: . '. :::i :" .. ~:: f-::.~~ .) ,"

Privat~ market sum-of-the-parts valuation (preliminary, fer discussion purposes onlv ($ billions»

. $5.2 $D:2 $0.6

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1-t.0It 2D07E ., ... Ox 2Q07E . E8n:DAS~6tm·. ~A-$15in'

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. 'App'endix 4.: 'Existin'g Bond I,ndent~r~ ,Limitation,s

.. ..... -. ".~ . '. . '. - . . "

.General ' . . ' .. " . ',-

"\:. :.'

... ' No provisions that W'ould prov1deprote~tfon to bonahold~rs in the event of a .change of .cc)ntrol .' of.'ti::ibune or.intheevt!nt of ahiShlY·leVe.~ge(ftrarisactton . '. '. ,':.'. .' '. .... .-: .. '".:~ .. ",", ',. :~ .. ' ':, :-.' .' ... ,' .... - ';;~:i' . ,".\(' .:,;.~~ .

$450mm 4.875% Notes and $110mm 5.25% Notes

$150mm 7.25% Debentures and $100mm 7.5%% Debentures

. r-·-::"-·~·-·.""I·-·-".""."';~-·;·-·---·-"-"'"'!'''·'';·~ l .. Ne1ther Tr!bun~ 'nor any . i • Nefther Trfbune ,nor any ',j' Re~ttict~ Subsidiary. .' ~ . Restricted .Subsidiary .! (defined as each subsidiary l (defined as any subsidiary • as of the date of the' i that oWns or leases a . '.'

. lndeliture and: ea~h. . . i Prtndpal Property). ~ll. . .sijb~id1~ry thereafter' .';. . i' place a lien on any Prfhdpal .

. . .. .-_ .. t. . .

$250mm 6.61% Debentures and $148mm 7.25% Debentures

., If the 7.5%'Notes or the .. 7. 25% N~tes become

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. App.~n~ix s'::Chicago Cubs I Comca~t,~S;p-ortsNet yaluation

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Chicago Cubs f Comccst SportsNet Valuation "',':.'.~ ;.',.: :: ·. ' " . . " ":;' .' : Taxable Gain' -

• Upside. potentfal from MlB's nat lanai television and internet, . '.',:. . .. , deals ::! '. . . :T~x~ ·(l;ltl8.25%)

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. -~: '>'N~'Pr~eds . . F $601 . ':. : likely potential for gr~Elter rev~ue from Spor:ts N~r1t 8$:.:,; .(1) 'AarI!l~'IQB8 on 8li&.:1S;~I;;'CUO otrHt Ia~ gaIn" In c.m/Com~I-

Cubs games -shIft . ,

($ In mflUollS)

PrecedentTraiisactlona ReaeaI'Ch

Film Value I . a.COx : 3:25x , ,.61x . 2.4Bx· 2.75x 2.97x

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.Appendix 6~Relativ~ R~liking (co.nt-.d).· . ~. . ':.. .'

,:'l'. .:}~;.r~ .. ~ .. •• -;;; •• ;.1....::. ~ 1:"' :', • :~: ...... . Debt Capitalization of Tribun0 and Its Subsidiilries at Step 2.

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• 'PHONES (maturtng In 1029)

• Guarantors: Holct.n of EIdstInt ~ : - Guarant0r5:'HOJ4e#·bf~!id~ft(Notes.. .. Interests· in 8roadceStin8 Holdco and have no dlrect.clatm •• 'nst·thj tllift no dlntCt'd6~~jp\1)St tM ' .. ' FlnanteCo. SUch pledge will also .

·.Gurantot:s. : .. ' GuarAl\ttirs.:"OMtIli~·c\aIms-·.. ..;;. equally a~ ratablYleCure the New ... tIllltTl:lI!uM. Since lllbune Is . SeniOr Credit Facilities. ._

• Issuer: Tr1bune

• liUorantors: Holders of.PHOH!S ha ..... ~dll'Ktcialmsasmstt'"' .. ,': GuaJiintDi-s.· . . . : ' .'

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Appendix 6: Relative Ranking (cont'd) .':." .. ": .' .' J .. ~ '. :~.' .. ,.:;", ", .

Debt Capitalization of Tribune and Its Subsidiaries at Step 2 .':-

• FinanceCo Loans ·.lJorrOlWr: VarioUs Publishing Opcos - • Borrower: junior subordln.ated to aU . • None. . aU of whi¢ are Guarantors of the . debt; Including the borrowers'

New Debt Guarantees of the New Debt. The '

• Guarantors: None.' subordination provisions ,will prevent payments on account of the b.alance of the FinanceCo Loans during certain -" defaults in respect of the New Debt or a bankruptcy or insolvency Of a Guarantor that is a borrower of the

. FinanceCo Loans. '

• Accordingly,.!n a bankruptcy ()I' insolvency proceeding involving a Guarantor, the senior claims in' , respect of the New Debt (and any other senior debt of th,e Guarantor) would have to be satlsfled'before payment cOuld be'made in respect of the FlnanceCo loans to FinanceCo;

--~--

JPMorganO TRI~UNE CO-MPANY 42, .... "