TIMES MIRROR CO, 8-K, 1994-11-10

TIMES MIRROR CO
8-K, 1994-11-10
NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

------------------------

FORM 8-K
----------------

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES AND EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 10, 1994

------------------------

THE TIMES MIRROR COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 1-4914 95-1298980
(STATE OR OTHER JURISDICTION (COMMISSION (I.R.S. EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
</TABLE>

<TABLE>
<S> <C>
TIMES MIRROR SQUARE 90053
LOS ANGELES, CALIFORNIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (213) 237-3700

NONE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)

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<PAGE>
ITEM 5. OTHER EVENTS

In June 1994, The Times Mirror Company (the "Registrant") signed an
agreement to merge its cable television operations with Cox Cable
Communications, Inc. The accompanying consolidated balance sheets of the
Registrant and its subsidiaries as of December 31, 1993 and 1992, and the
related consolidated statements of income, shareholders' equity and cash flows
for each of the three years in the period ended December 31, 1993, and notes
thereto are based on the financial statements and notes thereto contained in the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1993,
and reclassify the Registrant's cable television business as a discontinued
operation as a result of such proposed merger.

ITEM 7. FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
Report of Independent Auditors............................................................................. 3
Statements of Consolidated Income.......................................................................... 4
Consolidated Balance Sheets................................................................................ 5
Statements of Shareholders' Equity......................................................................... 7
Statements of Consolidated Cash Flows...................................................................... 8
Notes to Consolidated Financial Statements................................................................. 9
</TABLE>

2
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

To the Shareholders and Board of Directors
The Times Mirror Company

We have audited the accompanying consolidated balance sheets of The Times
Mirror Company and subsidiaries as of December 31, 1993 and 1992, and the
related consolidated statements of income, shareholders' equity and cash flows
for each of the three years in the period ended December 31, 1993. These
financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of The Times
Mirror Company and subsidiaries at December 31, 1993 and 1992, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1993, in conformity with generally
accepted accounting principles.

As discussed in Notes H and K to the consolidated financial statements, in
1992 the Company changed its method of accounting for income taxes and
postretirement benefits other than pensions.

ERNST & YOUNG LLP

Los Angeles, California
February 3, 1994, except for
Notes I, N, P, Q and R, as to which
the date is November 9, 1994

3
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
(In thousands of dollars, except per share amounts)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------
1993 1992 1991
<S> <C> <C> <C>
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REVENUES......................................................... $3,243,749 $3,155,430 $3,117,174
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COSTS AND EXPENSES
Cost of sales.................................................. 1,759,052 1,716,971 1,701,238
Selling, general and administrative expenses................... 1,215,491 1,172,000 1,164,964
Restructuring charges.......................................... 80,164 202,700 42,300
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3,054,707 3,091,671 2,908,502
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OPERATING PROFIT................................................. 189,042 63,759 208,672

Interest expense............................................... (84,054) (74,281) (76,724)
Nonrecurring charges........................................... (85,614)
Other, net..................................................... 4,797 3,420 9,014
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Income (loss) from continuing operations before income taxes... 109,785 (7,102) 55,348
Income taxes................................................... 58,116 11,267 41,028
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Income (loss) from continuing operations....................... 51,669 (18,369) 14,320

Discontinued operations:
Income from discontinued operations, net of income taxes..... 133,788 75,144 67,634
Gain on sale of discontinued operations, net of income
taxes....................................................... 131,702
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Income before cumulative effect of changes in accounting
principles................................................... 317,159 56,775 81,954
Cumulative effect of changes in accounting principles:
Postretirement benefits, net of income tax benefit of
$84,931..................................................... (133,376)
Income taxes................................................. 10,000
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NET INCOME (LOSS)................................................ $ 317,159 $ (66,601) $ 81,954
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Earnings (loss) per share:
Continuing operations........................................ $ .40 $ (.14) $.11
Discontinued operations:
Income from operations..................................... 1.04 .58 .53
Gain on sale............................................... 1.02
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Before cumulative effect of changes in accounting
principles.................................................. 2.46 .44 .64
Cumulative effect of changes in accounting principles:
Postretirement benefits.................................... (1.04)
Income taxes............................................... .08
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Earnings (loss) per share...................................... $2.46 $ (.52) $.64
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</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)

<TABLE>
<CAPTION>
DECEMBER 31
----------------------
1993 1992
<S> <C> <C>
- -------------------------------------------------------------------------------------------
ASSETS

CURRENT ASSETS
Cash and cash equivalents........................................ $ 46,756 $ 57,881
Accounts receivable, less allowances for doubtful accounts and
returns of
$70,866 and $66,247............................................ 511,347 516,422
Note and other receivables....................................... 296,458
Inventories...................................................... 161,251 167,168
Deferred income taxes............................................ 40,965 49,107
Prepaid and other................................................ 160,097 197,454
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Total current assets............................................. 1,216,874 988,032

PROPERTY, PLANT AND EQUIPMENT
Land............................................................. 96,213 99,314
Buildings........................................................ 621,141 600,900
Machinery and equipment.......................................... 1,351,883 1,370,969
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2,069,237 2,071,183
Less allowances for depreciation and amortization................ 760,609 725,863
- -------------------------------------------------------------------------------------------
1,308,628 1,345,320

OTHER ASSETS
Goodwill......................................................... 714,357 740,784
Net assets of discontinued cable television operations........... 606,678 495,036
Other intangibles................................................ 132,690 135,171
Deferred charges................................................. 156,957 159,766
Other assets..................................................... 363,713 369,236
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1,974,395 1,899,993
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$4,499,897 $4,233,345
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</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS -- CONTINUED
(In thousands of dollars)

<TABLE>
<CAPTION>
DECEMBER 31
----------------------
1993 1992
<S> <C> <C>
- -------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable................................................. $ 380,005 $ 378,148
Short-term debt.................................................. 336,356 100,809
Accrued liabilities.............................................. 94,436 116,834
Employees' compensation.......................................... 97,226 96,275
Income taxes..................................................... 1,232 383
Unearned income.................................................. 177,738 156,208
Other current liabilities........................................ 56,173 34,715
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Total current liabilities........................................ 1,143,166 883,372

LONG-TERM DEBT..................................................... 795,454 1,114,367

OTHER LIABILITIES AND DEFERRALS
Deferred income taxes............................................ 196,869 47,504
Postretirement benefits.......................................... 250,894 252,300
Other liabilities................................................ 214,239 235,156
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662,002 534,960
SHAREHOLDERS' EQUITY
Common stock
Series A, $1 par value: 300,000,000 authorized;
97,588,000 and 96,534,000 issued.............................. 97,588 96,534
Series B, $1 par value; 100,000,000 authorized;
no shares issued
Series C, convertible, $1 par value; 150,000,000
authorized; 32,366,000 and 33,382,000 issued.................. 32,366 33,382
Preferred stock, $1 par value; 4,500,000 shares authorized;
no shares issued
Additional paid-in capital....................................... 167,490 163,896
Retained earnings................................................ 1,687,574 1,513,977
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1,985,018 1,807,789
Less treasury stock, at cost; 1,345,000 Series A shares.......... 61,543 61,543
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1,923,475 1,746,246
Less guaranteed debt of ESOP..................................... 24,200 45,600
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1,899,275 1,700,646
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$4,499,897 $4,233,345
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</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
STATEMENTS OF SHAREHOLDERS' EQUITY

(In thousands of dollars)

<TABLE>
<CAPTION>
THREE YEARS ENDED DECEMBER 31, 1993
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COMMON STOCK ADDITIONAL
------------------------ PAID-IN RETAINED TREASURY GUARANTEED
SERIES A SERIES C CAPITAL EARNINGS STOCK ESOP DEBT TOTAL
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
BALANCE AT JANUARY
1, 1991........... $ 93,497 $ 36,332 $ 150,942 $1,779,685 $ (61,543) $ (81,500) $1,917,413
Conversion of
Series C shares
to Series A
shares.......... 1,550 (1,550)
Transactions
related to stock
option and
restricted stock
plans........... 20 15 6,611 6,646
Dividends on
common stock..... (138,801) (138,801)
Net income........ 81,954 81,954
Reduction of
guaranteed ESOP
debt............. 16,900 16,900
Translation gains
and other........ (104) (104)
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BALANCE AT DECEMBER
31, 1991.......... 95,067 34,797 157,553 1,722,734 (61,543) (64,600) 1,884,008
Conversion of
Series C shares
to Series A
shares.......... 1,438 (1,438)
Transactions
related to stock
option and
restricted stock
plans........... 29 23 6,343 6,395
Dividends on
common stock..... (138,861) (138,861)
Net loss.......... (66,601) (66,601)
Reduction of
guaranteed ESOP
debt............. 19,000 19,000
Translation losses
and other........ (3,295) (3,295)
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BALANCE AT DECEMBER
31, 1992.......... 96,534 33,382 163,896 1,513,977 (61,543) (45,600) 1,700,646
Conversion of
Series C shares
to Series A
shares.......... 1,034 (1,034)
Transactions
related to stock
option and
restricted stock
plans........... 20 18 3,594 3,632
Dividends on
common stock..... (138,887) (138,887)
Net income........ 317,159 317,159
Reduction of
guaranteed ESOP
debt............. 21,400 21,400
Translation
losses........... (4,675) (4,675)
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BALANCE AT DECEMBER
31, 1993.......... $ 97,588 $ 32,366 $ 167,490 $1,687,574 $ (61,543) $ (24,200) $1,899,275
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</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(In thousands of dollars)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------
1993 1992 1991
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) from continuing operations............................ $ 51,669 $ (18,369) $ 14,320
Adjustments to derive cash flows from continuing operating
activities:
Depreciation and amortization..................................... 170,978 158,489 169,906
Amortization of product development costs......................... 55,876 51,948 43,696
Restructuring charges............................................. (35,523) 169,063 32,700
Provision for doubtful accounts................................... 23,105 38,523 40,832
Benefit for deferred income taxes................................. (1,851) (32,593) (8,176)
Nonrecurring charges.............................................. 85,614
Changes in assets and liabilities:
Trade accounts receivable....................................... (34,771) (33,254) (22,456)
Inventories..................................................... 5,618 (265) 674
Accounts payable................................................ 15,184 11,664 18,382
Income taxes.................................................... 75,761 (27,942) (10,305)
Other, net........................................................ (23,587) (13,232) (18,346)
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Net cash provided by continuing operating activities.............. 302,459 304,032 346,841
Income from discontinued operations................................. 133,788 75,144 67,634
Adjustment to derive cash flows from discontinued operating
activities:
Change in net operating assets.................................... (1,454) 104,741 74,172
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Net cash provided by discontinued operating activities............ 132,334 179,885 141,806
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Net cash provided by operating activities......................... 434,793 483,917 488,647
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures................................................ (111,703) (115,740) (156,573)
Proceeds from sales of operating assets............................. 33,546 46,842 46,045
Additions to product development costs.............................. (61,722) (62,002) (62,237)
Acquisitions, net of cash acquired.................................. (54,318) (155,130) (2,025)
Other, net.......................................................... (1,091) 3,989 2,903
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(195,288) (282,041) (171,887)
Net cash used in investing activities of discontinued cable
operations......................................................... (32,033) (178,857) (57,575)
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Net cash used in investing activities............................. (227,321) (460,898) (229,462)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of debt................................................... (311,348) (101,722) (333,891)
Proceeds from issuance of debt...................................... 249,397 243,463 206,994
Dividends paid...................................................... (138,878) (138,846) (138,792)
Reduction of guaranteed ESOP debt................................... (21,400) (19,000) (16,900)
Common stock issuance related to stock options and awards........... 3,632 6,395 6,646
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Net cash used in financing activities............................. (218,597) (9,710) (275,943)
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Increase (decrease) in cash and cash equivalents...................... (11,125) 13,309 (16,758)
Cash and cash equivalents at beginning of year........................ 57,881 44,572 61,330
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Cash and cash equivalents at end of year.............................. $ 46,756 $ 57,881 $ 44,572
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Cash paid during the year for:
Interest (net of amounts capitalized)............................... $ 89,134 $ 80,415 $ 73,010
Income taxes........................................................ 106,540 117,862 101,724
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and its subsidiaries after elimination of all significant intercompany
transactions and balances. Affiliated companies in which the Company owns a 20
percent to 50 percent interest are accounted for by the equity method. The
Company's share of affiliates' operating results is included in "Other, net."

RECLASSIFICATIONS

Certain amounts in previously issued financial statements have been
reclassified to conform to the 1993 presentation.

CHANGES IN ACCOUNTING PRINCIPLES

Effective January 1, 1992, the Company adopted new accounting principles for
income taxes and postretirement benefits. These changes in accounting are
described in Note H and Note K, respectively.

CASH EQUIVALENTS

Cash equivalents consist of investments that are readily convertible into
cash and generally have original maturities of three months or less.

INVENTORIES

Inventories are carried at the lower of cost or market and are determined
under the first-in, first-out method for books and certain finished products,
and under the last-in, first-out method for newsprint, paper and certain other
inventories.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are carried on the basis of cost. Generally,
depreciation is provided on a straight-line basis for buildings, machinery and
equipment.

GOODWILL AND OTHER INTANGIBLES

Goodwill recognized in business combinations accounted for as purchases
subsequent to October 31, 1970 ($700,904,000 at December 31, 1993, and
$727,331,000 at December 31, 1992--net of accumulated amortization of
$145,295,000 and $149,835,000, respectively) is being amortized over a period of
40 years. Goodwill arising from business combinations consummated prior to
November 1, 1970 is not being amortized because, in the opinion of management,
it has not diminished in value. Goodwill amortization expense, including amounts
related to discontinued operations, amounted to $26,737,000 for 1993,
$25,404,000 for 1992, and $25,648,000 for 1991.

Other intangibles arising in connection with acquisitions are being
amortized on a straight-line basis over their estimated useful lives from 3 to
21 years. Accumulated amortization was $98,597,000 and $96,453,000 at December
31, 1993 and 1992, respectively.

The Company assesses on an ongoing basis the recoverability of intangible
assets, including goodwill, based on estimates of future undiscounted cash flows
for the applicable business compared to net book value. If the future
undiscounted cash flow estimate were less than net book value, net book value
would then be reduced to the undiscounted cash flow estimate. The Company also
evaluates the amortization periods of assets, including goodwill and other
intangible assets, to determine whether events or circumstances warrant revised
estimates of useful lives.

DEFERRED CHARGES

Deferred charges, principally book and training material preparation,
printing and duplication costs, are written off over the estimated product life
as the products are sold.

REVENUE RECOGNITION

Revenues from certain products sold with the right of return, principally
books, are recognized net of a provision for estimated returns. Magazine,
newspaper and other subscription revenues are deferred as unearned income at the
time of sale. As products are delivered to subscribers, a pro rata share of the
subscription price is included in revenue.

9
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Magazine subscription selling expenses are deferred as current or noncurrent
assets and charged to expense over the same period as the related revenue is
earned.

RETIREMENT PLANS AND POSTRETIREMENT BENEFITS

The Company has defined benefit pension plans and various other contributory
and noncontributory retirement plans covering substantially all employees. In
general, benefits under the defined benefit plans are based on years of service
and the employee's compensation during the last five years of employment. In
determining net periodic pension expense (income), prior service costs are
amortized on a straight-line basis over 10 years. The defined benefit plans are
funded on a current basis in accordance with the Employee Retirement Income
Security Act of 1974. An Employee Stock Ownership Plan (ESOP) provides benefits
in conjunction with certain defined benefits, and the fair value of ESOP assets
is recognized as an offset to required funding. The majority of the Company's
employees are covered by one defined benefit plan. Funding is not expected to be
required for this plan in the near future as this plan is overfunded.

Postretirement health care and life insurance benefits provided by the
Company were substantially reduced as a result of plan modifications in 1993.
Various unfunded postretirement health care plans cover employees hired before
January 1, 1993, or approximately half of the Company's current employees. The
plans have significantly different provisions for lifetime maximums, retiree
cost-sharing, health care providers, prescription drug coverage and other
benefits. Postretirement life insurance benefits are generally insured by life
insurance policies and cover employees who retired on or before December 31,
1993. Life insurance benefits vary by plan, ranging from $1,000 to $250,000.
Certain employees become eligible for the postretirement health care benefits if
they meet minimum age and service requirements and retire from full-time, active
service.

VOLUNTARY EMPLOYEE BENEFICIARY ASSOCIATION

The Company maintains a Voluntary Employee Beneficiary Association (VEBA)
trust to fund certain health care benefits. At December 31, 1993 and 1992, the
VEBA trust balance of $53,949,000 and $48,895,000, respectively, is included in
"Prepaid and other".

CASH MANAGEMENT SYSTEM

Under the Company's cash management system, the bank notifies the Company
daily of checks presented for payment against its primary disbursing accounts.
The Company transfers funds from other sources such a short-term investments or
commercial paper issuance, to cover the checks presented for payment. This
program results in a book cash overdraft in the primary disbursing accounts as a
result of checks outstanding. The book overdraft, which was reclassified to
accounts payable, was $41,733,000 and $33,112,000 at December 31, 1993 and 1992,
respectively.

NOTE B -- CAPITAL STOCK
Shares of Series A and Series C common stock are identical, except with
respect to voting rights, restrictions on transfer of Series C shares and the
right to convert Series C shares into Series A shares. Series A shares are
entitled to one vote per share and Series C shares are entitled to ten votes per
share. Series C shares are subject to mandatory conversion into Series A shares
upon transfer to any person other than a "Permitted Transferee" as defined in
the Company's Certificate of Incorporation or upon the occurrence of certain
regulatory events. Series B common stock is entitled to one-tenth vote per share
and is available for common stock issuance transactions, such as underwritten
public offerings and acquisitions. The preferred stock is issuable in series
under such terms and conditions as the board of directors may determine.

10
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE C -- ACQUISITION
On October 30, 1992, the Company acquired Wm. C. Brown Communications, Inc.,
a leading publisher of college textbooks. This acquisition was accounted for by
the purchase method and resulted in a non-cash transaction of $30,112,000 for
liabilities assumed. The operations of this company are reflected in the
Company's financial statements from date of acquisition. This acquisition
resulted in goodwill of $66,653,000, which is being amortized over 40 years. Pro
forma results for 1992, assuming this acquisition occurred on January 1, are not
materially different from the results reported.

NOTE D -- RESTRUCTURING CHARGES
Over the past three years, the Company has undertaken a number of
restructuring actions aimed at streamlining or consolidating certain operational
and administrative processes as well as refocusing certain product offerings. In
each of these years, the Company has charged the estimated costs related to
these actions against operations. Remaining liabilities of $116,560,000 related
to these restructuring charges are included in the consolidated balance sheet at
December 31, 1993. The majority of this amount will be spent during 1994, with
the remainder, principally related to lease payments, to be paid over lease
periods extending to 2002.

During 1993, the Company recorded restructuring charges of $80,164,000
($47,724,000 after taxes, or 37 cents per share). More than half of this amount
is for severance or pay-related actions and approximately forty percent relates
to leased facilities, product line changes and other costs necessary to
implement the Company's plans. The remainder includes various asset write-offs.

During 1992, the Company recorded restructuring charges of $202,700,000
($123,248,000 after taxes, or 96 cents per share). Nearly two-thirds of this
amount is for severance or pay-related actions. Approximately fifteen percent is
for leased facilities, while the remainder relates to product line changes and
other costs necessary to implement the restructuring plan at Matthew Bender.

During 1991, the Company recorded restructuring charges of $42,300,000
($25,514,000 after taxes, or 18 cents per share) primarily related to voluntary
early retirement and separation programs at the LOS ANGELES TIMES and THE
BALTIMORE SUN.

NOTE E -- NONRECURRING CHARGES
During 1991, the Company sold Broadcasting Publications, Inc. at a loss of
$20,614,000 and recorded a $65,000,000 write-down of the note and other assets
outstanding from the 1987 sale of THE DENVER POST. These items reduced income
from continuing operations before income taxes by $85,614,000 or $52,985,000 (42
cents per share) after applicable income taxes.

NOTE F -- INTEREST EXPENSE
For the years ended December 31, 1993, 1992 and 1991, interest expense of
$84,445,000, $78,244,000 and $90,261,000, respectively, was incurred; $391,000,
$3,963,000 and $13,537,000 of which was capitalized.

NOTE G -- INVENTORIES
Inventories consist of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31
-------------------------------
1993 1992 1991
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Newsprint, paper and other raw materials...................... $ 39,066 $ 50,633 $ 59,557
Books and other finished products............................. 94,675 91,205 71,788
Work-in-process............................................... 27,510 25,330 20,596
- -----------------------------------------------------------------------------------------------
$ 161,251 $ 167,168 $ 151,941
- -----------------------------------------------------------------------------------------------
</TABLE>

11
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE G -- INVENTORIES (CONTINUED)
Inventories determined on the last-in, first-out method were $26,994,000,
$40,177,000 and $51,133,000 at December 31, 1993, 1992 and 1991, respectively,
and would have been higher by $8,232,000 in 1993, $4,631,000 in 1992 and
$7,427,000 in 1991 had the first-in, first-out method (which approximates
current cost) been used exclusively.

NOTE H -- INCOME TAXES
Income tax expense from continuing operations consists of the following (in
thousands):

<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Current
Federal....................................................... $ 34,561 $ 10,789 $ 14,596
State......................................................... 14,715 19,997 21,158
Foreign....................................................... 10,691 13,074 13,450
Deferred
Federal....................................................... (4,333) (22,627) (9,170)
State......................................................... 2,482 (9,966) 994
- -------------------------------------------------------------------------------------------------
$ 58,116 $ 11,267 $ 41,028
- -------------------------------------------------------------------------------------------------
</TABLE>

The Company adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," and recorded a cumulative adjustment increasing
net income by $10,000,000 (8 cents per share) as of January 1, 1992. There was
no other effect on earnings for 1992. Prior-year financial statements have not
been restated.

The tax effect of temporary differences results in deferred income tax
assets (liabilities) as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31
--------------------
1993 1992
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Accelerated depreciation.............................................. $(185,127) $(145,994)
Retirement and health benefits........................................ (137,361) (123,353)
Postretirement benefits............................................... 109,215 91,094
Valuation and other reserves.......................................... 84,986 68,531
Deferred gain on sale of assets....................................... (84,901)
Other employee benefits............................................... 37,533 38,057
State and local income taxes.......................................... 19,400 10,427
Restructuring charges................................................. 21,785 70,897
Subscription selling expenses......................................... (13,746) (18,217)
Other deferred tax assets............................................. 34,451 37,734
Other deferred tax liabilities........................................ (42,139) (27,573)
- --------------------------------------------------------------------------------------------
$(155,904) $ 1,603
- --------------------------------------------------------------------------------------------
</TABLE>

The above aggregate amounts reflect a current deferred tax asset of
$40,965,000 and $49,107,000 at December 31, 1993 and 1992, respectively, and a
noncurrent deferred tax liability of $196,869,000 and $47,504,000 at December
31, 1993 and 1992, respectively.

12
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE H -- INCOME TAXES (CONTINUED)
Prior to January 1, 1992, deferred income taxes were provided on timing
differences between book and taxable income. Deferred income tax expense
(benefit) for continuing operations for 1991 resulted from the following (in
thousands):

<TABLE>
<CAPTION>
1991
<S> <C>
- ---------------------------------------------------------------------------------------------
Accelerated depreciation.......................................................... $ 21,917
Pension income.................................................................... 8,715
Write-down of assets.............................................................. (23,184)
Restructuring costs............................................................... (9,204)
Self-insurance reserves........................................................... (3,165)
Other............................................................................. (3,255)
- ---------------------------------------------------------------------------------------------
$ (8,176)
- ---------------------------------------------------------------------------------------------
</TABLE>

The difference between actual income tax expense and the U.S. federal
statutory income tax expense for continuing operations is reconciled as follows
(in thousands):

<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
Income (loss) from continuing operations before income taxes:
United States................................................ $ 88,803 $ (28,278) $ 33,285
Foreign...................................................... 20,982 21,176 22,063
- ------------------------------------------------------------------------------------------------
$ 109,785 $ (7,102) $ 55,348
- ------------------------------------------------------------------------------------------------
Federal statutory income tax rate.............................. 35% 34% 34%
Federal statutory income tax expense (benefit)................. $ 38,425 $ (2,415) $ 18,818
Increase (decrease) in income taxes resulting from:
State and local income taxes, net of Federal effect.......... 11,179 6,620 14,620
Goodwill amortization not deductible for tax purposes........ 7,120 6,462 5,601
Book donations value in excess of cost....................... (2,194) (1,881) (1,245)
Foreign tax differentials.................................... 1,154 1,428 3,921
Other........................................................ 2,432 1,053 (687)
- ------------------------------------------------------------------------------------------------
$ 58,116 $ 11,267 $ 41,028
- ------------------------------------------------------------------------------------------------
</TABLE>

NOTE I -- DEBT
Short-term debt consists of the following (in thousands):

13
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE I -- DEBT (CONTINUED)
Long-term debt consists of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31
--------------------
1993 1992
<S> <C> <C>
- -------------------------------------------------------------------------------------------
Commercial paper..................................................... $ 46,231 $ 368,351
7 1/8% Debentures due March 1, 2013.................................. 150,000
7 3/8% Debentures due July 1, 2023................................... 100,000
8 7/8% Notes due March 1, 2001....................................... 100,000 100,000
8.70% Notes due June 15, 1999........................................ 100,000 100,000
8.60% Notes due November 15, 1993.................................... 100,000
8.55% Notes due June 1, 2000......................................... 99,500 100,000
Ten-Year Notes
8 7/8% due February 1, 1998........................................ 100,000 100,000
8% due December 15, 1996........................................... 100,000
8 1/4% due April 1, 1996........................................... 100,000
Medium-Term Notes due from March 20, 1997 to April 3, 2000, with an
average interest rate of 8.63%..................................... 100,000 100,000
Guaranteed debt of ESOP maturing through December 15, 1994........... 24,200 45,600
Others at various interest rates, maturing through 2001.............. 1,761 1,710
- -------------------------------------------------------------------------------------------
821,692 1,215,661
Unamortized discount................................................. (1,882) (485)
Less current maturities.............................................. (24,356) (100,809)
- -------------------------------------------------------------------------------------------
Total long-term debt................................................. $ 795,454 $1,114,367
- -------------------------------------------------------------------------------------------
</TABLE>

Commercial paper borrowings of $358,231,000 and $368,351,000 at December 31,
1993 and 1992, respectively, carried a weighted average interest rate of 3.3% in
1993 and 3.5% in 1992. The Company has agreements with several domestic and
foreign banks for unsecured long-term revolving lines of credit which support
its commercial paper borrowings. The domestic agreements, which expire April 27,
1995, provide for borrowings up to $240,000,000 at the banks' base rates. The
commitment fee is 3/20 of one percent per annum. The foreign agreements, which
expire May 25, 1995, provide for borrowings up to $150,000,000 at interest rates
based on, at the Company's option, London Interbank Offered Rates (LIBOR),
certificate of deposit rates or the bank's base rate. The commitment fee is 1/16
of one percent per annum. As of December 31, 1993, the Company had not borrowed
under the agreements. Commercial paper borrowings aggregating $46,231,000 are
classified as long-term obligations at December 31, 1993, since the Company
intends to refinance this debt on a long-term basis. In addition, the Company
has $51,850,000 of unused standby letters of credit at December 31, 1993.

The ten-year notes are callable three years prior to maturity. A medium-term
note for $30,000,000 is callable two years prior to its maturity date of March
20, 1998. The 8.70% Notes are due at the option of the holder five years prior
to maturity. The 8.55% Notes were due at the option of the holder on June 1,
1993, and $500,000 was repaid on that date. The 8 1/4% Notes due April 1, 1996
were called March 1, 1993 and repaid on April 1, 1993. The 8% Notes due December
15, 1996 were called November 15, 1993 and repaid on December 15, 1993.

The Company has an interest rate swap agreement expiring January 22, 1996.
This agreement is for a $100,000,000 notional amount and exchanges payments to
the Company at a fixed rate of 7.4% for payments by the Company at a variable
rate based on a spread over three month LIBOR set in arrears.

The Company has guaranteed the debt of its Employee Stock Ownership Plan
(ESOP). Over the remaining term of the debt, interest is payable based on the
lesser of (a) 74 percent of the prime rate or

14
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE I -- DEBT (CONTINUED)
(b) 88 percent of the certificate of deposit rate. The Company has entered into
interest rate swap agreements that exchange interest payments at the prime rate
for payments at fixed rates. As a result of these agreements, the effective
interest rate on the ESOP loans varies, but in no event will it exceed 7.44%.

The Company's agreements with banks contain restrictive provisions relating
primarily to levels of indebtedness and maintenance of net worth. Under the most
restrictive of these agreements, consolidated debt may not exceed 135% of
consolidated net worth, and consolidated net worth must be at least
$1,250,000,000.

At December 31, 1993, the aggregate maturities of debt for the five
subsequent years are as follows (in thousands):

<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------

1994.............................................................................. $ 336,356
1995.............................................................................. 47,706
1996.............................................................................. --
1997.............................................................................. 10,000
1998.............................................................................. 140,000
- ---------------------------------------------------------------------------------------------
</TABLE>

The fair value of debt at December 31, 1993, based primarily on the
Company's current refinancing rates for publicly-issued fixed rate debt with
comparable maturities, approximates its carrying value of $1,131,810,000. The
fair value of off-balance-sheet financial instruments is not significant at
December 31, 1993.

In connection with the proposed reorganization (See Note Q), the Company has
commenced a tender offer for $399,500,000 aggregate principal amount of its
fixed-rate debt maturing from 1997 through 2001. The offer is scheduled to end
in mid-December 1994. Proceeds from private sales of short-term securities are
expected to fund the tender and these borrowings are expected to be repaid in
early 1995 when the cable merger is completed. In connection with the short-term
security issuances, the Company expects to increase its unsecured short-term
revolving bank lines of credit to an aggregate amount of $630,000,000. If the
entire $399,500,000 is tendered under the terms of the tender offer, the Company
expects to record an extraordinary loss of approximately $15,000,000 in the
fourth quarter of 1994. In connection with the tender, in September the Company
entered into interest rate swap agreements which commence in January 1995 and
exchange payments at fixed rates for payments at variable rates on an aggregate
principal amount of $200,000,000 of debt. These swaps are expected to be
redeemed upon the successful completion of the tender offer.

In early November 1994, the Company will also file a registration statement
with the Securities and Exchange Commission with respect to long-term debt
securities that it intends to offer to exchange for $250,000,000 of its
outstanding long-term debt in connection with the cable television merger. With
respect to this debt, the Company entered into long-term interest rate swap
agreements commencing January 1995 which exchange payments at fixed rates for
payments at variable rates.

As contemplated by the cable merger agreement, the Company expects to borrow
up to approximately $1.36 billion prior to the merger and the related debt will
be assumed by Cox Cable. Part of the proceeds of these borrowings are expected
to be used to retire the short-term securities issued to finance the debt tender
and to redeem, when first callable on February 1, 1995, the $100,000,000 of
8 7/8% Notes due February 1, 1998.

15
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE J -- STOCK OPTION AND AWARD PLANS
The 1984 and 1988 Executive Stock Option Plans, as amended, and the 1992 Key
Employee Long-Term Incentive Plan (Incentive Plan) provide that options may be
granted to key employees to purchase shares of the Company's common stock at a
price equal to the fair market value at the date of grant. Options granted prior
to December 27, 1991 had a purchase price equal to 75 percent of the fair market
value at the date of grant. The Incentive Plan allows for the granting of
incentive stock options, nonqualified stock options and deferred cash incentive
awards. Options that are not exercised expire ten years from the date of grant.
Options generally vest over a four-year period, except that incentive stock
options generally vest nine years and nine months from the date of grant.
Accelerated vesting for incentive stock options is available, based on
performance goals determined by the Board of Directors over a three-year
performance period. The following table sets forth information relative to the
plans:

<TABLE>
<CAPTION>
NUMBER OPTION
OF SHARES PRICE PER SHARE
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Options Outstanding
January 1, 1991............................................... 902,525 $18.66 to $37.93
Granted..................................................... 820,560 29.44
Exercised................................................... (57,950) 18.66 to 30.90
Canceled.................................................... (55,415)
- -----------------------------------------------------------------------------------------------
Options Outstanding
December 31, 1991............................................. 1,609,720 18.66 to 37.93
Granted..................................................... 456,550 30.13 to 36.94
Exercised................................................... (116,027) 18.66 to 28.36
Canceled.................................................... (55,025) 19.46 to 36.94
- -----------------------------------------------------------------------------------------------
Options Outstanding
December 31, 1992............................................. 1,895,218 18.66 to 37.93
Granted..................................................... 2,425,960 31.25 to 32.13
Exercised................................................... (138,721) 18.66 to 30.71
Canceled.................................................... (170,909) 18.66 to 36.94
- -----------------------------------------------------------------------------------------------
Options Outstanding
December 31, 1993............................................. 4,011,548 $18.66 to $37.93
- -----------------------------------------------------------------------------------------------
Options Exercisable
December 31, 1993............................................. 868,540 $18.66 to $37.93
- -----------------------------------------------------------------------------------------------
</TABLE>

At December 31, 1993, there were 515,492 options outstanding with purchase
prices equal to 75 percent of the fair market value at the date of grant. At
December 31, 1993, there were 239,800 shares of Series A common stock reserved
for future grants under the 1984 and 1988 Executive Stock Option Plans and
1,269,024 shares of Series A common stock reserved for future grants under the
Incentive Plan.

The 1982 and 1987 Restricted Stock Plans provide for the sale of 2,800,000
shares of the Company's common stock to key employees, including officers, at a
price equal to par value. The Incentive Plan generally replaced the restricted
stock sales. At December 31, 1993, there were 1,241,280 shares of Series A
common stock reserved for future sales. The Company expects that future sales,
if any, will not be significant.

16
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE K -- RETIREMENT PLANS AND POSTRETIREMENT BENEFITS
Retirement plan expense, including amounts related to discontinued
operations, of $34,137,000 for 1993, $16,454,000 for 1992, and $19,470,000 for
1991 includes net periodic pension expense (income) for the defined benefit
plans as follows (in thousands):

<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
Service cost -- benefits earned during period.................. $ 55,897 $ 48,325 $ 43,705
Interest cost on projected benefit obligation.................. 57,591 55,245 55,502
Return on plan assets.......................................... (96,143) (96,796) (91,159)
Net amortization and deferral.................................. (8,263) (14,178) (11,005)
- ------------------------------------------------------------------------------------------------
Net periodic pension expense (income).......................... $ 9,082 $ (7,404) $ (2,957)
- ------------------------------------------------------------------------------------------------
</TABLE>

Assumptions used in the actuarial computations were:

<TABLE>
<CAPTION>
DECEMBER 31
-----------------------
1993 1992 1991
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------
Discount rate............................................... 7.5 % 7.0 % 7.5 %
Rate of increase in compensation levels..................... 6.25% 6.25% 6.25%
Expected long-term rate of return on assets................. 9.75% 10.0 % 10.0 %
- -------------------------------------------------------------------------------------
</TABLE>

The following table sets forth the plans' funded status and amounts
recognized in the consolidated balance sheets (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31
--------------------
1993 1992
<S> <C> <C>
- -------------------------------------------------------------------------------------------
Actuarial present value of benefit obligations:
Vested............................................................. $ 582,105 $ 615,625
Nonvested.......................................................... 8,480 12,655
- -------------------------------------------------------------------------------------------
Accumulated benefit obligations...................................... $ 590,585 $ 628,280
- -------------------------------------------------------------------------------------------
Projected benefit obligations........................................ $ 806,986 $ 889,563
Plan assets at fair value............................................ 1,054,781 1,004,419
- -------------------------------------------------------------------------------------------
Excess of plan assets over projected benefit obligations............. 247,795 114,856
Unrecognized net loss from past experience different from that
assumed............................................................. 116,153 272,002
Prior service cost not yet recognized................................ 4,434 5,284
Unrecognized net asset being amortized over 13-15 years.............. (112,224) (133,538)
Other................................................................ 5,008 13,124
- -------------------------------------------------------------------------------------------
Prepaid pension cost................................................. $ 261,166 $ 271,728
- -------------------------------------------------------------------------------------------
</TABLE>

Nearly all of prepaid pension cost is included in "Other Assets" except for
approximately $8,572,000 and $8,835,000 which is included in net assets of
discontinued cable television operations as of December 31, 1993 and 1992,
respectively. Projected benefit obligations decreased by $71,310,000 at December
31, 1993 as a result of the change in the discount rate.

Plan assets include the Company's common stock, other listed stocks, and
corporate and government fixed-income securities. The fair value of plan assets
attributable to the Company's common stock at December 31, 1993 and 1992, was
$192,085,000 and $165,847,000, respectively, of which $161,995,000 and
$137,673,000, respectively, relate to the ESOP.

17
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE K -- RETIREMENT PLANS AND POSTRETIREMENT BENEFITS (CONTINUED)
In 1985, the Company issued and sold shares of common stock at market value
of $150,000,000 to its ESOP. Repayment of the ESOP's bank debt has been
guaranteed by the Company. Company contributions are the primary source of funds
for the ESOP's repayment of its debt. Benefits provided by the ESOP are
coordinated with certain pension benefits. At December 31, 1993, the ESOP held
3,151,365 shares of Series A common stock and 2,427,512 shares of Series C
common stock. The ESOP currently covers approximately two-thirds of the
Company's employees.

Substantially all employees over age 21 with one year of service are
eligible to participate in the Company's Savings Plus Plan. Eligible employees
may contribute from 1 percent to 13 percent of their basic compensation. The
Company makes matching contributions equal to 50 percent of employee before-tax
contributions from 1 percent to 6 percent. Employees may choose among five
investment options, including a Company common stock fund, for investing their
contributions and the Company's matching contribution.

The Company adopted Statement of Financial Accounting Standards No. 106
(SFAS 106) "Employers' Accounting for Postretirement Benefits Other Than
Pensions," and recorded a cumulative charge of $218,307,000 ($133,376,000 net of
taxes, or $1.04 per share) as of January 1, 1992. SFAS 106 requires that
postretirement health care and life insurance be charged to expense over the
period the benefits are earned. The effect of this change in accounting
principle was to increase postretirement expense in 1992 by $20,221,000
($12,133,000 net of taxes, or 9 cents per share).

The net periodic postretirement benefit expense is as follows (in thousands):

<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
- ------------------------------------------------------------------------------------------------
Service cost -- benefits earned during period............................. $ 3,457 $ 10,903
Interest cost on accumulated projected benefit obligation................. 11,110 15,947
Net amortization.......................................................... (8,155)
- ------------------------------------------------------------------------------------------------
Net periodic postretirement expense....................................... $ 6,412 $ 26,850
- ------------------------------------------------------------------------------------------------
</TABLE>

Postretirement benefit expense in 1991, which was charged to expense as
incurred, was not significant.

Assumptions used in the actuarial computations were:

<TABLE>
<CAPTION>
DECEMBER 31
------------------------
1993 1992
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------
Discount rate............................................................... 7.5% 7.0%
Health care cost trend rate................................................. 12.0% 13.0%
- ------------------------------------------------------------------------------------------------------
</TABLE>

At December 31, 1993, the health care cost trend rate of 12 percent was
assumed to ratably decline to 5.5 percent by 2004 and remain at that level. At
December 31, 1992, the health care cost trend rate of 13 percent was assumed to
ratably decline to 5 percent by 2005 and remain at that level.

18
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE K -- RETIREMENT PLANS AND POSTRETIREMENT BENEFITS (CONTINUED)
The following table sets forth the plans' unfunded obligations and amounts
recognized in the consolidated balance sheet (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31
--------------------
1993 1992
<S> <C> <C>
- ----------------------------------------------------------------------------------------------
Actuarial present value of benefit obligations:
Retirees.............................................................. $ 126,334 $ 102,033
Other fully eligible participants..................................... 8,232 9,368
Other active participants............................................. 31,323 39,312
- ----------------------------------------------------------------------------------------------
Accumulated postretirement benefit obligations.......................... 165,889 150,713
Unrecognized net decrease in prior service cost......................... 102,614 114,011
Unrecognized net loss from past experience different from that
assumed................................................................ (17,609) (12,424)
- ----------------------------------------------------------------------------------------------
Postretirement benefit liability........................................ $ 250,894 $ 252,300
- ----------------------------------------------------------------------------------------------
</TABLE>

The assumed health care cost trend rate can significantly affect
postretirement expense and liabilities. An increase of 1% in the health care
cost trend rate would increase 1993 net periodic postretirement expense by
$1,802,000 and increase the accumulated postretirement benefit obligations as of
December 31,1993 by $15,184,000.

In December 1992 the Company amended its postretirement health care and life
insurance benefit plans to substantially reduce benefits. The effect of the plan
amendments, which reduced the accumulated postretirement benefit obligations by
approximately $114,011,000 at December 31, 1992, will be amortized over the
average remaining eligibility period of plan participants.

NOTE L -- LEASES
Rental expense under operating leases, including amounts related to
discontinued operations, amounted to $76,571,000, $79,034,000, and $76,541,000
for the years ended December 31, 1993, 1992 and 1991, respectively. Capital
leases and contingent rentals are not significant. The future minimum lease
payments as of December 31, 1993 for all noncancellable operating leases,
including amounts related to discontinued operations, are as follows (in
thousands):

<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------
1994.............................................................................. $ 51,030
1995.............................................................................. 47,677
1996.............................................................................. 43,220
1997.............................................................................. 41,283
1998.............................................................................. 34,189
Later years....................................................................... 131,322
- ---------------------------------------------------------------------------------------------
Total............................................................................. $ 348,721
- ---------------------------------------------------------------------------------------------
</TABLE>

NOTE M -- EARNINGS AND DIVIDENDS PER SHARE
Earnings per share computations are based upon the weighted average number
of shares of common stock and common stock equivalents outstanding during the
year. Fully diluted earnings per share are the same as the earnings per share
indicated.

Cash dividends declared per share of common stock amounted to $1.08 in 1993,
1992 and 1991.

19
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE N -- BUSINESS SEGMENTS
Financial data regarding the Company's business segments presented on page
21 of this report are incorporated herein by reference.

The Company operates principally in three industries: Newspaper Publishing;
Professional Information; and Consumer Multimedia. Operations in Newspaper
Publishing include the publication and sale of metropolitan newspapers.
Operations in Professional Information include the publishing and sale of
various types of books, including law, medical and college-level business and
economic textbooks, the publishing of aeronautical charts and aviation
information, and training operations. Operations in Consumer Multimedia include
magazines, consumer book publishing, consumer multimedia software and television
programming. Total revenue by industry segment includes sales to unaffiliated
customers and intersegment sales, which are accounted for at market price.

NOTE O -- QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
A summary of the unaudited quarterly results of operations follows (in
thousands of dollars, except per share amounts):

<TABLE>
<CAPTION>
1993 QUARTERS ENDED MAR. 28 JUNE 27 SEPT. 26 DEC. 31
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Revenues.................................................. $ 755,169 $ 784,632 $ 806,882 $ 897,066
- ------------------------------------------------------------------------------------------------------
Costs and expenses
Cost of sales........................................... 421,605 406,005 464,997 466,445
Selling, general and administrative expenses............ 289,305 317,729 279,532 328,925
Restructuring charges................................... 3,750 76,414
- ------------------------------------------------------------------------------------------------------
710,910 723,734 748,279 871,784
- ------------------------------------------------------------------------------------------------------
Operating profit.......................................... 44,259 60,898 58,603 25,282
Interest expense........................................ (22,625) (21,095) (21,057) (19,277)
Other, net.............................................. 1,855 1,638 (1,211) 2,515
- ------------------------------------------------------------------------------------------------------
Income from continuing operations before income taxes..... 23,489 41,441 36,335 8,520
Income taxes.............................................. 11,833 21,040 21,086 4,157
- ------------------------------------------------------------------------------------------------------
Income from continuing operations......................... 11,656 20,401 15,249 4,363
Income from discontinued operations, net of income
taxes.................................................... 18,128 27,461 62,458 25,741
Gain on sale of discontinued operations, net of income
taxes.................................................... 131,702
- ------------------------------------------------------------------------------------------------------
Net income................................................ $ 29,784 $ 47,862 $ 77,707 $ 161,806
- ------------------------------------------------------------------------------------------------------
Earnings per share:
Continuing operations................................... $.09 $.16 $.12 $ .04
Discontinued operations:
Income from operations................................ .14 .21 .48 .20
Gain on sale.......................................... 1.02
- ------------------------------------------------------------------------------------------------------
Earnings per share........................................ $.23 $.37 $.60 $1.26
- ------------------------------------------------------------------------------------------------------
</TABLE>

20
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE O -- QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (CONTINUED)

<TABLE>
<CAPTION>
1992 QUARTERS ENDED MAR. 29 JUNE 28 SEPT. 27 DEC. 31
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Revenues.................................................. $ 737,813 $ 774,888 $ 778,571 $ 864,158
Restructuring charges..................................... 19,000 183,700
Operating profit (loss)................................... 47,955 55,982 63,654 (103,832)
Income (loss) from continuing operations.................. 15,457 20,182 21,786 (75,794)
Income from discontinued operations, net of income
taxes.................................................... 18,130 23,957 18,949 14,108
Cumulative effect of changes in accounting principles..... (123,376)
Net income (loss)......................................... (89,789) 44,139 40,735 (61,686)
Earnings (loss) per share:
Continuing operations................................... .12 .16 .17 (.59)
Discontinued operations................................. .14 .18 .15 .11
Cumulative effect of changes in accounting principles... (.96)
Earnings (loss) per share................................. $(.70) $.34 $.32 $(.48)
- ------------------------------------------------------------------------------------------------------
</TABLE>

NOTE P -- DISCONTINUED OPERATIONS
As a result of the proposed reorganization described in Note Q, the
Company's cable television operations are now reported as discontinued
operations.

On March 29, 1993, the Company announced two agreements for the sale of its
four broadcast television stations to Argyle Television Holdings, Inc. (Argyle).
The sale of KTVI-TV, an ABC affiliate in St. Louis, Missouri, and WVTM-TV, an
NBC affiliate in Birmingham, Alabama, was completed in July. The sale of its
remaining two stations, KDFW-TV in Dallas, Texas, and KTBC-TV in Austin, Texas,
both CBS affiliates, was completed near the end of the year. The sale of the
four stations resulted in an after-tax gain of $131,702,000 net of income tax
expense of $76,928,000, or $1.02 per share. At year-end, the Company exercised
its option to increase the cash and decrease the securities portion of the sale
price and received $320 million in cash as well as warrants in Argyle. Most of
the proceeds were received in January 1994 and were used to redeem commercial
paper.

The results of operations of the Broadcast Television segment have been
reported as discontinued operations in the Statements of Consolidated Income.
Prior year financial statements have been reclassified to present the segment as
a discontinued operation. Operating results of the discontinued operations were
as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------
1993 1992 1991
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Revenues...................................................... $ 565,242 $ 546,543 $ 496,887
- -----------------------------------------------------------------------------------------------
Income before income taxes (1)................................ 227,267 126,675 110,604
Income taxes.................................................. 93,479 51,531 42,970
- -----------------------------------------------------------------------------------------------
Net income (2)................................................ $ 133,788 $ 75,144 $ 67,634
- -----------------------------------------------------------------------------------------------
<FN>
(1) Included in income before income taxes and net income were nonrecurring
gains at cable television as follows: 1993 -- gains on the sale of QVC
Network, Inc. common stock and on the sale of a small cable system totaling
$86,799,000 ($50,364,000 after taxes, or 39 cents per share); 1992 -- gain
on the sale of two Texas cable television systems totaling $8,673,000
($5,026,000 after taxes, or 4 cents per share); 1991 -- gain on the sale of
assets of $14,111,000 ($9,570,000 after taxes, or 7 cents per share).
(2) In July 1992, the Company acquired 20 percent of Community Cablevision
Company, which operates systems serving approximately 42,000 subscribers in
Orange County, California. The remaining 80 percent was acquired on October
1, 1992. This acquisition was accounted for by the purchase method. The
operations of Community Cablevision are reflected from the date of
acquisition.
</TABLE>

21
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE P -- DISCONTINUED OPERATIONS (CONTINUED)
Summarized balance sheet data for the discontinued cable television
operations are as follows (in thousands of dollars):

Balance sheet data for the discontinued broadcast television operations were
not significant and are not segregated in the consolidated balance sheets.

The major components of cash flow for discontinued operations are as follows
(in thousands of dollars):

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------
1993 1992 1991
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Income from discontinued operations.......................... $ 133,788 $ 75,144 $ 67,634
Depreciation and amortization................................ 100,013 84,326 82,242
Nonrecurring gains........................................... (86,799) (8,673) (14,111)
Other, net................................................... (14,668) 29,088 6,041
- ----------------------------------------------------------------------------------------------
Net cash provided by discontinued operating activities..... $ 132,334 $ 179,885 $ 141,806
- ----------------------------------------------------------------------------------------------
Capital expenditures......................................... $(116,914) $ (82,333) $ (60,426)
Proceeds from disposal of assets............................. 91,665 14,952 20,224
Acquisitions, net of cash acquired........................... (1,413) (110,910) (16,531)
Other, net................................................... (5,371) (566) (842)
- ----------------------------------------------------------------------------------------------
Net cash used in investing activities of discontinued cable
operations................................................ $ (32,033) $(178,857) $ (57,575)
- ----------------------------------------------------------------------------------------------
</TABLE>

NOTE Q -- PROPOSED REORGANIZATION
In June 1994, the Company signed an agreement to merge its cable television
operations with Cox Cable Communications, Inc. (Cox Cable). It is contemplated
that prior to the merger the Company will borrow approximately $1.36 billion.
The Company will then transfer all of its non-cable operations, including the
$1.36 billion in cash, into a newly formed entity, New Times Mirror, as part of
a tax-free reorganization. Old Times Mirror, then owning the Company's cable
television operations and obligated to pay the newly incurred debt, will be
merged into Cox Cable. Each share of the Company's Series A and Series C common
stock outstanding prior to the merger will be converted into one share of New
Times Mirror Series A or Series C common stock, respectively. As a result,
voting interests in New Times Mirror will remain the same as voting interests in
Old Times Mirror. In addition, all non-Chandler Trust shareholders will receive
common stock of Cox Cable with an estimated aggregate fair value of
$932,000,000. Due to certain constraints imposed by the terms of the Chandler
Trusts, in lieu of common stock of Cox Cable, the Chandler Trusts will receive
non-voting, Series A cumulative preferred stock in New Times Mirror. The fair
value of the preferred stock received by the Chandler Trusts will be
substantially equivalent to the fair value of the Cox Cable common stock
received by the other shareholders, after giving effect to their respective
proportionate interest in Old Times Mirror. The Company expects this transaction
will increase shareholders'

22
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE Q -- PROPOSED REORGANIZATION (CONTINUED)
equity by approximately $670,000,000 and result in a gain of about $1.62
billion. This transaction is expected to be consummated within the next three to
six months and is subject to certain conditions, including the receipt of
various regulatory approvals.

In connection with the settlement of reorganization-related litigation,
subsequent to the reorganization, shareholders will to be offered the
opportunity to exchange shares of Series A or Series C common stock for shares
of Series B cumulative preferred stock on a one-for-one basis. The Series B
preferred stock will have one vote per share.

At September 25, 1994, the Company had approximately $750,000,000 of
publicly-held notes outstanding. In early November 1994, the Company commenced a
tender offer for $399,500,000 aggregate principal amount of its fixed-rate debt
and expects to file a registration statement with respect to long-term debt
securities that it intends to offer to exchange for $250,000,000 of its
outstanding long-term debt (see Note I).

As previously reported, a number of lawsuits were filed in Delaware and
California seeking to enjoin the proposed reorganization (See Note R for further
information regarding these proceedings). The resolution of these lawsuits is
not expected to have a material adverse effect on the Company's financial
position or results of operations.

NOTE R -- CONTINGENT LIABILITIES
The Company and its subsidiaries are defendants in actions for libel and
other matters arising out of their business operations. In addition from time to
time, the Company and its subsidiaries are involved as parties in various
governmental and administrative proceedings, including environmental matters.
The Company does not believe that any such proceedings currently pending will
have a material adverse effect on its consolidated financial position, although
an adverse resolution in any reporting period of one or more of these matters
could have a material impact on results of operations for that period.

A number of lawsuits were filed in Delaware and California in mid-1994
seeking to enjoin the proposed reorganization described in Note Q. On October
11, 1994, the Company announced an agreement to settle all of the shareholder
litigation related to this proposed reorganization. Under the terms of the
settlement, upon completion of the transactions, the Company will offer
shareholders Series B preferred stock. The Chandler Trusts have agreed not to
participate in this exchange offer. In addition, the settlement calls for the
Company, subject to the exercise of the fiduciary duties of its Board of
Directors, to pay an annual dividend of at least 24 cents per share on its
common stock for the three years following the closing of the merger and to pay
up to $6 million for plaintiffs' attorney fees and expenses, subject to court
approval. The settlement of the litigation is subject to the approval of the
Delaware Chancery Court and the California Superior Court in hearings to be
scheduled before year-end, as well as to certain other conditions. The
settlement of this litigation will not have an adverse material impact on the
Company's financial position or results of operations.

NOTE S -- TRANSACTIONS WITH AN AFFILIATE
To assure a long-term supply of newsprint for the LOS ANGELES TIMES, the
Company has an agreement to purchase specified quantities of newsprint from a
supplier in which the Company has a 20 percent interest. The specified
quantities represent a majority of the LOS ANGELES TIMES' newsprint requirements
and are purchased at prevailing market prices.

23
<PAGE>
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
FIVE-YEAR SUMMARY OF BUSINESS SEGMENT INFORMATION

<TABLE>
<CAPTION>
(IN THOUSANDS OF DOLLARS) 1993 1992 1991 1990 1989
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUES
Newspaper Publishing................... $1,980,717 $1,943,229 $1,974,351 $2,066,872 $2,065,890
Professional Information............... 992,220 935,448 851,633 757,882 654,593
Consumer Multimedia.................... 271,176 277,757 292,157 311,328 305,913
Corporate and Other.................... 391 11,412 56,487
Intersegment Revenues.................. (364) (1,004) (1,358) (1,175) (630)
---------- ---------- ---------- ---------- ----------
$3,243,749 $3,155,430 $3,117,174 $3,146,319 $3,082,253
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
OPERATING PROFIT (LOSS)(1)
Newspaper Publishing................... $ 107,346 $ 19,126 $ 93,094 $ 171,257 $ 309,850
Professional Information............... 174,855 114,348 193,161 165,741 144,836
Consumer Multimedia.................... (3,785) (3,527) (7,775) (9,496) (1,180)
Corporate and Other.................... (89,374) (66,188) (69,808) (59,364) (13,106)
---------- ---------- ---------- ---------- ----------
$ 189,042 $ 63,759 $ 208,672 $ 268,138 $ 440,400
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
IDENTIFIABLE ASSETS
Newspaper Publishing................... $2,012,623 $2,036,453 $2,023,275 $2,044,545 $1,907,900
Professional Information............... 1,030,586 971,833 788,260 753,184 690,416
Consumer Multimedia.................... 288,805 338,895 338,046 412,505 430,263
Corporate and Other.................... 563,686 317,423 341,493 383,616 369,663
Discontinued Operations
Cable Television..................... 606,678 495,036 509,942 484,611 439,185
Broadcast Television................. 285 123,439 120,649 125,109 125,562
Eliminations........................... (2,766) (49,734) (115,526) (83,489) (88,691)
---------- ---------- ---------- ---------- ----------
$4,499,897 $4,233,345 $4,006,139 $4,120,081 $3,874,298
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
DEPRECIATION, AMORTIZATION AND DEPLETION
Newspaper Publishing................... $ 113,877 $ 105,939 $ 110,946 $ 100,458 $ 82,234
Professional Information............... 44,490 40,092 41,640 42,701 40,743
Consumer Multimedia.................... 10,816 10,705 14,656 23,730 24,022
Corporate and Other.................... 1,795 1,753 2,664 2,588 7,616
---------- ---------- ---------- ---------- ----------
$ 170,978 $ 158,489 $ 169,906 $ 169,477 $ 154,615
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
CAPITAL EXPENDITURES
Newspaper Publishing................... $ 66,429 $ 88,226 $ 119,963 $ 231,493 $ 312,473
Professional Information............... 33,006 19,984 19,324 26,080 19,088
Consumer Multimedia.................... 1,718 1,579 1,142 2,744 10,102
Corporate and Other.................... 940 321 494 938 785
Discontinued Operations
Cable Television..................... 116,914 82,333 60,426 66,641 70,590
Broadcast Television................. 3,464 3,141 6,803 6,189
---------- ---------- ---------- ---------- ----------
$ 219,007 $ 195,907 $ 204,490 $ 334,699 $ 419,227
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------

<FN>

(1) Includes restructuring charges as follows (in thousands):
</TABLE>

<TABLE>
<CAPTION>
1993 1992 1991
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Newspaper Publishing..................... $ 33,080 $ 106,700 $ 39,690
Professional Information................. 25,300 96,000 1,160
Corporate and Other...................... 21,784 1,450
---------- ---------- ----------
$ 80,164 $ 202,700 $ 42,300
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

24
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

THE TIMES MIRROR COMPANY

O. JEAN WILLIAMS

--------------------------------------
O. Jean Williams
SECRETARY AND ASSOCIATE GENERAL
COUNSEL
November 10, 1994

25
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------------- ---------------------------------------------------------------------------------------- -----------------
<C> <S> <C>
23 Consent of Ernst & Young LLP, Independent Auditors......................................
</TABLE>

<PAGE>
EXHIBIT 23

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the incorporation by reference in Registration Statements
(Form S-3 Nos. 33-39046, 33-47766 and 33-50145) pertaining to various notes of
The Times Mirror Company and in the Registration Statements (Form S-8 Nos.
33-24080, 2-77412, 2-91347, 2-92163, 33-13423 and 33-51990) pertaining to
certain employee benefit plans of The Times Mirror Company of our report dated
February 3, 1994, except for Notes I, N, P, Q and R, as to which the date is
November 9, 1994, with respect to the consolidated financial statements of The
Times Mirror Company included in this Form 8-K dated November 10, 1994.

ERNST & YOUNG LLP

Los Angeles, California
November 10, 1994