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Waltz Deposition Designation • Deposition Designation [8:4] - [8:7] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibits page 8 4 Q. Good morning, Miss Waltz. 5 First, could you state your full 6 name for the record? 7 A. Kathleen Marie Waltz. [9:3] - [9:4] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibits page 9 3 Q. Miss Waltz, by whom are you 4 currently employed? [9:9] - [10:8] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibits page 9 9 any testimony provided at this 10 deposition -- this it George 11 Dougherty -- may be used solely at or 12 in connection with the plan 13 confirmation hearing in the bankruptcy 14 case before Judge Carey, and that any 15 testimony elicited here today cannot 16 be used for any other purpose or in 17 connection with any other action or 18 proceeding. 19 MR. LACK: That's my 20 understanding of the proposed order. 21 Has the judge signed it? 22 MR. DOUGHERTY: I believe so. I 23 don't know for sure. 24 MR. LACK: Okay, that's fine. 25 Thank you. That's my understanding as page 10 1 K. WALTZ 2 well. 3 Q. Miss Waltz, before your 4 retirement, were you employed by the Tribune 5 Company or any of its subsidiaries? 6 A. Yes. 7 Q. For how long? 8 A. 34 years. [10:9] - [37:9] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibits page 10 9 Q. Could you give me, very briefly, 10 a summary of your employment with the 11 Tribune Company from your first position to 12 the last? 13 A. Sure. I started at the Tribune, 14 at the Chicago Tribune, when I was 19 years 15 old, in the classified advertising 16 department. I spent several years selling 17 classified ads on the phone and in some 18 supervisory positions. 19 I then went to what we called 20 the street room, which was outside 21 advertising sales, still in Chicago. And I 22 had some management, sales management 23 positions in retail advertising at the 24 Chicago Tribune. And then went back to 25 manage the classified department, which was page 11 1 K. WALTZ 2 not just the phone room where I started but 3 the outside as well, classified department. 4 And I had some other divisional management 10/3/2011 3:44 PM 1

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Waltz Deposition Designation

• Deposition Designation

[8:4] - [8:7] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 84 Q. Good morning, Miss Waltz.5 First, could you state your full6 name for the record?7 A. Kathleen Marie Waltz.

[9:3] - [9:4] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 93 Q. Miss Waltz, by whom are you4 currently employed?

[9:9] - [10:8] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 99 any testimony provided at this10 deposition -- this it George11 Dougherty -- may be used solely at or12 in connection with the plan13 confirmation hearing in the bankruptcy14 case before Judge Carey, and that any15 testimony elicited here today cannot16 be used for any other purpose or in17 connection with any other action or18 proceeding.19 MR. LACK: That's my20 understanding of the proposed order.21 Has the judge signed it?22 MR. DOUGHERTY: I believe so. I23 don't know for sure.24 MR. LACK: Okay, that's fine.25 Thank you. That's my understanding aspage 101 K. WALTZ2 well.3 Q. Miss Waltz, before your4 retirement, were you employed by the Tribune5 Company or any of its subsidiaries?6 A. Yes.7 Q. For how long?8 A. 34 years.

[10:9] - [37:9] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 109 Q. Could you give me, very briefly,10 a summary of your employment with the11 Tribune Company from your first position to12 the last?13 A. Sure. I started at the Tribune,14 at the Chicago Tribune, when I was 19 years15 old, in the classified advertising16 department. I spent several years selling17 classified ads on the phone and in some18 supervisory positions.19 I then went to what we called20 the street room, which was outside21 advertising sales, still in Chicago. And I22 had some management, sales management23 positions in retail advertising at the24 Chicago Tribune. And then went back to25 manage the classified department, which waspage 111 K. WALTZ2 not just the phone room where I started but3 the outside as well, classified department.4 And I had some other divisional management

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• Deposition Designation5 responsibilities.6 I then went to the president's7 office when John Madigan was president and8 became director of customer satisfaction,9 which was all about customer service10 initiatives throughout the newspaper.11 I then -- I may have those12 backwards. Maybe then I went back to13 classified.14 Then I became vice-president of15 developing businesses when Jack Fuller was16 president of Tribune Company, developing17 businesses, where all the ancillary18 businesses around the newspaper, so it was19 niche publications, early online efforts,20 alternate delivery programs, those kinds of21 things.22 I left Chicago in June of '9723 and went down to the South Florida24 Sun-Sentinel as vice-president and general25 manager, where I had responsibility for allpage 121 K. WALTZ2 the things on the business side of the3 newspaper, advertising, circulation,4 operations, that sort of thing. No news5 involvement.6 After about one year in7 Ft. Lauderdale, I moved to Newport News,8 Virginia, as president and publisher of the9 Daily Press, also a Tribune Company10 newspaper. So that was full CEO11 responsibilities. That was the first time I12 had that entire -- an entire business unit13 like that.14 I was there for two years, and15 then in June of 2000, I moved to Orlando as16 president and publisher of the Orlando17 Sentinel.18 Q. How long were you the19 president/publisher of the Orlando Sentinel?20 A. From June of 2000 until February21 of 2008.22 Q. Can you just very briefly23 describe what is included in the job of24 president and publisher of the Orlando25 Sentinel?page 131 K. WALTZ2 A. The president and publisher of3 the Orlando Sentinel is all of the business4 operations, all of the news operations, and5 all of the editorial or opinion operations.6 It is the only position in the newspaper7 where you have both business and news8 responsibility.9 Q. To whom did you report when10 you -- within the Tribune organization, when11 you were president and publisher of the12 Orlando Sentinel?13 A. For a while, I reported to Jack14 Fuller. For a while, I reported to Greg15 Jansen. For a while, I reported to Scott16 Smith, and for a while, I reported to Bob17 Gremillion.18 And I should also add, just to19 be complete, that for part of the time when20 I was publisher of the Orlando Sentinel, I21 also had oversight responsibility for two of22 the smaller newspapers, the Morning Call in23 Allentown, Pennsylvania, and the Daily Press

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• Deposition Designation24 in Newport News, Virginia.25 Q. Could you just spell for thepage 141 K. WALTZ2 court reporter so we get it correctly in the3 transcript Mr. Gremillion's last name?4 A. G-R-E-M-I-L-L-I-O-N.5 Q. What was the period during which6 you reported to Mr. Gremillion?7 A. That was towards the end of my8 tenure in Orlando. Maybe -- I am not9 exactly sure when it was.10 Q. Let me be more specific. During11 the year 2007, to whom did you report?12 A. I believe that I had two13 different bosses in '07, Scott Smith and14 then Bob Gremillion.15 Q. Can you approximate what portion16 of 2007 you reported to Mr. Smith?17 A. To Mr. Smith?18 Q. Yes.19 A. No, but I reported to Bob -- to20 Scott Smith prior to reporting to Bob. So21 likely the first half -- the earlier portion22 of '07. But I am not really clear on this.23 Q. And what was Mr. Smith's24 position at Tribune when you reported to25 him?page 151 K. WALTZ2 A. Scott Smith was president of the3 publishing group.4 Q. What was Mr. Gremillion's5 position when you reported to him?6 A. He was -- I can't give you an7 exact title. He was the head of what we8 called T-6, which were the six smallest9 Tribune newspapers.10 Q. Which were the six smallest11 Tribune newspapers? Can you name them?12 A. Yes. Fort Lauderdale13 Sun-Sentinel, the Orlando Sentinel, the14 Baltimore Sun, the Hartford Courant, the15 Morning Call in Allentown, Pennsylvania, and16 the Daily Press in Newport News, Virginia.17 Q. Did Mr. Gremillion report to18 Mr. Smith?19 A. Yes, I believe so. I believe20 so.21 Q. Was there someone under22 Mr. Smith who was responsible for the larger23 newspapers owned by the Tribune? Larger24 than the T-6?25 A. Those newspapers reportedpage 161 K. WALTZ2 directly to Scott Smith.3 Q. Those were?4 A. Los Angeles Times, Chicago5 Tribune, and I believe at that point in6 time, Newsday may have been out of the7 family. Depends on what period of time8 you're talking about.9 Q. Newsday was sold by Tribune10 sometime in 2007?11 A. Newsday was sold by Tribune, I12 don't recall when.13 Q. Did you have any role as14 president/publisher of the Orlando Sentinel15 in providing business data to Tribune's16 headquarters or corporate office?

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• Deposition Designation17 A. Yes.18 Q. Let me just see if we can use19 the correct terminology. What was the20 headquarters referred to -- was it referred21 to as the corporate office, or what was the22 term that you used in the Tribune to refer23 to the people in Chicago to whom you24 reported?25 A. Generally, we would refer topage 171 K. WALTZ2 them as Chicago.3 Q. What was your role in providing4 business information or data to the Chicago5 headquarters, to Chicago?6 A. My role was to give them7 information pertinent to the local business8 unit, which was the Orlando Sentinel, and9 also, I would transmit information relative10 to Allentown and the Newport News.11 Q. What was the way in which you12 transmitted that information?13 MR. DOUGHERTY: Object to the14 form.15 Q. Let me see if I can clarify the16 question. When you provided the17 information, did you do it through formal18 reports, through E-mail, through telephone19 conversations? How did you transmit the20 information you provided to Chicago?21 A. I would say yes to all of those22 forms.23 Q. How often did you provide formal24 reports to Chicago on the Orlando Sentinel25 business activities?page 181 K. WALTZ2 A. Not sure what you mean by3 "formal." Anytime we were asked for4 something, we would supply it, and I would5 take it seriously, so that would be formal,6 I guess.7 Q. I guess "formal" may have a8 different concept now with electronic9 communication than it may have had before.10 Let me get away from that term.11 Were there periodic standard12 reports that you provided to Chicago13 concerning the business activities of the14 Orlando Sentinel?15 A. Yes.16 Q. What were they?17 A. There were generally weekly18 phone calls with the publishing group, so19 that would be a conference call forum.20 We would monthly send to Chicago21 in written form any highlights for the22 period that were significant.23 Twice a year, we would do what I24 would call a more formal plan being25 processed, which was the strategic plan inpage 191 K. WALTZ2 the spring and the operating plan or the3 budget in the fall.4 Q. When you had the weekly phone5 calls with the publishing group, who were6 the participants in those calls?7 A. The president of the publishing8 group, whatever corporate staff he wanted on9 the phone, depending upon the agenda. The

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• Deposition Designation10 publishers of all the newspapers, and11 whoever they would request that the business12 units have on the phone, because of whatever13 might be on the agenda.14 Q. So when the president of the15 publishing group -- now I would like to16 focus on the year 2007. During that year,17 Mr. Smith was the person who was on this18 conference call, weekly conference call?19 A. Yes.20 Q. To whom did Mr. Smith report, do21 you know?22 A. Scott reported to Dennis23 FitzSimons, who was the president of Tribune24 Company.25 Q. Was Mr. Gremillion on thesepage 201 K. WALTZ2 conference calls during 2007?3 A. Generally, yes.4 Q. To whom were the monthly written5 highlight reports sent?6 A. They were sent by the local CFO7 and he either sent them to the publishing8 group CEO or the publishing group president9 or both. I don't recall.10 Q. Who was the publishing group11 CEO?12 A. CFO. Sorry.13 Q. Who was the publishing group14 CFO?15 A. Harry Amsden.16 Q. Who was the local CFO for the17 Orlando Sentinel?18 A. Michael Slason, S-L-A-S-O-N.19 Q. You said twice a year there was20 a more formal planning session, the21 strategic plan in the spring and the22 operating plan in the fall. In 2007, do you23 recall when -- let me ask first, did those24 two planning sessions occur in 2007?25 A. Yes.page 211 K. WALTZ2 Q. When did they occur, starting3 with the strategic plan?4 A. I don't recall, other than it5 would have been in the spring.6 Q. And when did the operating7 plan/budget meeting occur?8 A. I don't recall. But they were9 generally in October.10 Q. Do you recall who participated11 in the strategic plan meeting in the spring12 of 2007?13 A. I believe it was held in14 Orlando, and Bob Gremillion came in for that15 meeting.16 Q. That was the strategic plan for17 the Orlando Sentinel, or did it involve the18 other newspapers?19 A. For the Orlando Sentinel.20 Q. Okay. And who participated in21 the operating plan meetings in or around22 October 2007?23 A. I believe, again, that would24 have been Bob Gremillion along with Harry25 Amsden.page 221 K. WALTZ2 Q. In general terms -- well, let me

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• Deposition Designation3 back up. What type of data did you provide4 in the weekly phone calls and monthly5 written reports?6 MR. DOUGHERTY: This is in7 general? We are talking about '07?8 Q. In general, yeah. Well, 2007.9 I am focused on 2007. What types of data10 did you provide in those weekly phone calls11 and monthly written reports?12 A. In general, they would have been13 the same as in any other year, and they14 would focus on major initiatives at the15 local level, if there were any employee16 issues, how you were doing relative to your17 plan or your budget.18 Often, depending on the agenda,19 we wouldn't all speak on those conference20 calls. It would be Chicago speaking. We21 would respond to questions.22 Q. Did those weekly phone calls and23 monthly written reports include revenue --24 A. Yes.25 Q. -- information?page 231 K. WALTZ2 A. Yes.3 Q. Did they include circulation4 information?5 A. Yes.6 Q. Did the revenue break out7 advertising revenue?8 A. Break it out from what?9 Q. Break it out from all revenue.10 Were the revenues segregated into different11 categories?12 A. Yes.13 Q. Such as advertising,14 circulation?15 A. Yes.16 Q. Was the advertising segmented by17 classified, automobile, interactive, and so18 on?19 A. Not always. It could have been.20 Again, it would be if there was anything21 significant happening in one segment of22 business, that's what you would focus on.23 MR. MILES: Not an objection,24 but I will ask something from you as a25 favor for clarification. Because itpage 241 K. WALTZ2 is continuing on here now.3 You asked about both the phone4 calls and the monthly reports, and she5 is answering in a general way. Would6 you mind taking those separately in7 the questions, just in case -- so we8 don't have to come back and ask it all9 over again.10 MR. LACK: That's fine.11 Q. Was your prior answer, did it12 refer to both the weekly calls and the13 monthly reports?14 A. Yes, both.15 Q. Did both the weekly phone calls16 and the monthly written reports include17 information concerning the number of18 subscribers as the circulation, as opposed19 to the circulation revenue?20 MR. DOUGHERTY: This is in21 general in '07?

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• Deposition Designation22 MR. LACK: '07, yes.23 A. Not always. Not always.24 Q. Was the circulation information25 always in the written reports?page 251 K. WALTZ2 A. I believe so.3 Q. With respect to -- strike that.4 Was there some portion of the5 Orlando Sentinel business that was referred6 to as the interactive business?7 A. Yes.8 Q. What did that term "interactive"9 mean in the context of the Orlando Sentinel?10 A. The interactive business was the11 evolution of our news and information and12 advertising from the print product to an13 online product. So it was14 OrlandoSentinel.com.15 It was also participation in16 other Internet initiatives, such as17 cars.com, careerbuilder.com, and smaller,18 just local interactive efforts. So it was a19 news and information site -- plural, sites.20 Q. Was the revenue that came from21 those sites through advertising?22 A. Yes.23 Q. Were -- did anyone pay to24 subscribe to OrlandoSentinel.com, to read25 the site, or was it a free site?page 261 K. WALTZ2 A. It was a free site.3 Q. In the weekly phone calls that4 you had with the publishing group, did you5 provide, during 2007, any projections6 concerning the business of the Orlando7 Sentinel?8 A. I don't recall giving any9 projections on the phone.10 Q. Do you recall during 2007 giving11 any projections in any of your monthly12 written reports?13 A. Yes. I don't recall14 specifically, but that's where it would have15 happened.16 Q. Were projections in each of the17 monthly written reports?18 A. No.19 Q. Do you recall in which months20 you included projections?21 A. No.22 Q. Do you recall in how many, what23 percentage of the months you gave24 projections?25 A. No.page 271 K. WALTZ2 Q. Do you recall what caused you to3 give projections in some months and not4 others?5 A. Because we would have been asked6 by Chicago to give projections.7 Q. Do you recall on what occasions8 you were asked by Chicago to give9 projections in your written monthly reports?10 A. No.11 Q. Do you remember how many times12 during 2007?13 A. No.14 Q. But you do remember doing it at

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• Deposition Designation15 some point in 2007?16 A. Yes.17 Q. And do you recall anything about18 the projections that you gave during 2007?19 A. I don't remember them20 specifically. They would have been21 surrounding advertising revenue or22 circulation revenue.23 Q. And generally, do you recall24 what the projections, what the content of25 the projections was in advertising andpage 281 K. WALTZ2 circulation revenue you gave to Chicago3 during 2007?4 A. In general?5 Q. Yes.6 A. It would have been advertising7 revenue broken out by category.8 Q. What were the categories?9 A. Retail advertising, national10 advertising, classified advertising. Under11 those categories, there could be12 sub-categories.13 Under classified there would be14 real estate, automotive, help wanted would15 be the major ones. Under retail, we would16 look at department store revenue, restaurant17 and amusement revenue and the like.18 Q. When you gave projections in19 2007 in the written reports, for what20 periods did the projections cover?21 A. I don't recall.22 Q. Did they cover the remainder of23 2007?24 A. I would think so. I don't25 recall.page 291 K. WALTZ2 MR. DOUGHERTY: Don't guess. If3 you have a recollection, give him your4 recollection. He probably has5 documents to show you anyways.6 A. If you have documents to show7 me, that would be helpful.8 Q. Well, in some respects I do.9 Sometimes I may. Sometimes I may not. But10 rest assured I will show you some documents11 before the end of the day.12 A. Okay. I don't recall the13 timeframe of the projections.14 Q. When you gave circulation15 projections for circulation revenue, were16 they broken down by -- in a certain way?17 A. If they were broken down, we18 would break them down by home delivery19 versus single-copy sales.20 Q. Do you recall, in general,21 whether the advertising revenue projections22 that you provided to Chicago in 2007 showed23 increases or decreases or stable advertising24 revenues over time?25 A. In '07, we had decreasingpage 301 K. WALTZ2 revenues. Generally. There may have been3 areas that were up, but generally, I think4 they were decreasing.5 Q. Did you project the decrease in6 revenues in advertising to continue in 2008?7 A. I don't know if we talked about

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• Deposition Designation8 '08. I don't know.9 Q. Do you remember whether you10 provided any projections for the interactive11 business of the Orlando Sentinel?12 MR. DOUGHERTY: Again, we are13 focused on --14 MR. LACK: In 2007.15 MR. DOUGHERTY: -- the monthly16 written reports?17 MR. LACK: The monthly written18 reports, yes.19 A. In the monthly written reports,20 I don't know.21 Q. In general, how would you22 describe the economic state of the Orlando23 Sentinel in 2007?24 A. In general, how would I describe25 the economic state? I would describe it aspage 311 K. WALTZ2 healthy.3 Q. And when you say it was healthy,4 what are the criteria you use to describe it5 as being healthy in 2007?6 A. It was profitable.7 Q. And can you quantify in terms8 of, when you say profitable, how profitable9 in dollars was the Orlando Sentinel in 2007?10 A. I don't recall what the numbers11 were. But I am sure we have that document12 somewhere and can look at it.13 Q. Was the Orlando Sentinel more or14 less profitable in 2007 than it was in 2006?15 A. 2006 was a record year for16 profitability and revenue at the Orlando17 Sentinel, and 2007 was below '06.18 Q. Approximately, what percentage19 below '06?20 A. I don't recall.21 Q. In 2007, were revenues at the22 Orlando Sentinel higher or lower than 2006?23 MR. DOUGHERTY: For the whole24 year for 2007?25 MR. LACK: Yes.page 321 K. WALTZ2 A. Sorry, I thought that's what I3 just answered.4 Q. You talked about profitability.5 A. Oh.6 Q. Oh, I'm sorry, you did7 mention -- you did mention profitability and8 revenues in the last question. I apologize.9 How would you describe the10 economic state of the newspaper industry in11 general in 2007?12 MR. DOUGHERTY: Objection to13 form, foundation.14 Q. Were you familiar with the15 economic state of the newspaper industry in16 general?17 A. Yes. Not as much as I was with18 Orlando, of course.19 Q. I understand that.20 A. Okay.21 Q. How would you describe the22 economic state of the newspaper industry in23 2007?24 A. I would say the economic state25 was healthy in 2007 for newspapers as apage 33

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• Deposition Designation1 K. WALTZ2 whole, in general.3 Q. And by healthy, again, with the4 newspaper industry, are you describing that5 in terms of the profitability?6 A. Yes.7 Q. Was there a difference in your8 view of how you viewed the state of the9 Orlando Sentinel's economic health between10 early 2007 and late 2007, the first half and11 the second half of the year, for example?12 A. I think it was healthy all year.13 Q. Was there any trend?14 A. We were coming off of our record15 highs in '06 in revenues. So as expected,16 our revenues were trending downward from17 '06. But I would still call it healthy.18 Q. When you say trending downwards,19 does -- the second half of '07 was less than20 the first half?21 MR. DOUGHERTY: Object to the22 form.23 A. I don't specifically recall.24 Q. Do you recall what you thought25 in the first -- early 2007, let's say thepage 341 K. WALTZ2 first quarter of 2007, do you recall what3 you thought the prospects for the Orlando4 Sentinel were for the second half of 20075 and beyond?6 A. I thought the prospects were7 very good. When you say "and beyond," with8 no specific date, but --9 Q. Well, let me be more specific.10 Did you think the prospects for 2008 were11 better than 2007?12 MR. DOUGHERTY: And I think he13 is asking you to focus on what you14 were thinking in the first quarter of15 '07 with respect to 2008, if anything.16 MR. LACK: That's correct.17 A. I think I would have expected18 '08 to be better after we cycled some of the19 big peaks in real estate advertising, had a20 little more softness in '07. I think that21 would have come back. But it was a while22 ago.23 Q. What do you mean by cycle the24 peaks in the real estate advertising?25 A. In 2005 and in 2006, we had,page 351 K. WALTZ2 what I would consider to be very large gains3 in real estate advertising. And, in fact,4 in '06, our real estate advertising almost5 doubled, and that was because of the market6 as a whole, it was a very hot real estate7 market, and because of some initiatives in8 the products that we put in place, to9 capitalize on that revenue opportunity.10 So we were very high in '05,11 '06. I wouldn't expect -- as you budget12 year over year, I wouldn't expect that trend13 to continue year after year after year. So14 we had some softness in '07. So that15 drove -- that was fueling a lot of the big16 gains in '05 and '06.17 So I would have expected that to18 be a little softer in '07. But I'd expect19 it to come back again in -- just as with

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• Deposition Designation20 many of the other, unemployment numbers, as21 those cycle, so do the advertising numbers.22 Q. When you provided projections to23 Chicago in written reports, did you note24 whether those projections were incorporated25 into corporate-level projections?page 361 K. WALTZ2 MR. MILES: Objection. Again3 this is in 2007?4 MR. LACK: In 2007, yes.5 A. I don't know about the corporate6 projections. I didn't -- did I note if they7 were --8 Q. Yes.9 A. No.10 Q. Did you receive any response to11 any of the projections that you gave to12 Chicago in 2007? In other words, whether13 anyone said they agreed with them, disagreed14 with them, so on?15 A. In general, there would be16 discourse between Chicago and the local17 business units. I don't remember any18 specific conversation.19 MR. LACK: Let me now ask the20 court reporter to mark as Waltz21 Exhibit 1 a document with Production22 Number MS48329, and this is an23 excerpt, this -- that was the first24 production number. This is an excerpt25 from a document, a lengthy documentpage 371 K. WALTZ2 entitled "Rating Agency Presentation3 March 2007."4 I will just read into the record5 the production numbers, because it is6 an excerpt. It starts with 48329, and7 then continues with 48354 through8 48358, and then 48374 to 48375, 483829 through 48384.

[38:5] - [38:11] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 385 Q. Miss Waltz, I would like you to6 look at what's been marked as Waltz7 Exhibit 1 for identification. Realizing8 this is an excerpt from a lengthy document,9 have you ever seen this document before?10 A. I am not sure I have seen this11 exact document.

[38:12] - [40:7] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 3812 Q. If you can page through the13 pages of the exhibit, leaving aside -- the14 labeling of this is "Radio Agency15 Presentation."16 Have you seen any of the data17 that is included in the document before,18 such as data on consolidated historical19 performance and so on?20 MR. DOUGHERTY: Is this -- you21 are giving us a portion of the22 document.23 MR. LACK: That's correct.24 MR. DOUGHERTY: Is this the25 complete financial portion of the

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• Deposition Designationpage 391 K. WALTZ2 document?3 MR. LACK: No. It is an excerpt4 from the document.5 MR. DOUGHERTY: Is this the6 financial section, the complete7 financial section or an excerpt of8 that section as well?9 MR. LACK: I am sure it is an10 excerpt, because I think there is a11 lot more either on financial than --12 this is the part which relates to the13 publishing part, I believe. I am sure14 there is stuff in here about15 broadcasting and entertainment. But16 this is not the complete document, no.17 I am only going to ask her about these18 pages.19 A. Again, while this looks like the20 reports that -- like the reports we used to21 use, and I have seen in the past, I don't22 remember this specific document.23 Q. So is it correct that you24 received information on Tribune Company's25 consolidated historical financialpage 401 K. WALTZ2 performance?3 A. That I received it?4 Q. Yes.5 A. Yes, I think I would have6 received it as part of just other documents.7 But I don't recall it specifically.

[40:14] - [40:23] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 4014 Q. Let's talk about 2007. Were you15 provided with any information from the16 Chicago headquarters about Tribune's17 performance as a whole?18 A. The publishing group, yeah.19 Q. Okay.20 A. The corporate, I would not have21 been involved in anything on the broadcast22 side which would be part of corporate. But23 the publishing group, yes.

[41:15] - [41:24] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 4115 Q. And what was -- what did16 operating cash flow mean in connection with17 the publishing business of Tribune?18 MR. DOUGHERTY: Objection to19 form. Foundation.20 Q. Do you know?21 A. I would consider operating cash22 flow the revenues we took in and the23 expenses that we had in order to run the24 business.

[43:2] - [43:12] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 432 Q. So is it correct that this3 document shows that the operating cash flow4 of the publishing business of Tribune was5 $1,062,000,000 in 2003?

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• Deposition Designation6 A. That's what it says, yes.7 Q. And it declined to 947,000,0008 in 2006?9 A. Yes, that's what it says here.10 Q. And it declined each year from11 2003 to 2006?12 A. At year end, yes.

[43:13] - [44:4] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 4313 Q. Now, if you turn to the page14 with Production Number MS48358, this is a15 page which is entitled "Publishing Financial16 Projections from 2007 to 2011." Do you see17 that?18 A. I see it.19 Q. And were you familiar with the20 information that's contained in this, on21 this page, in the first quarter of 2007?22 MR. DOUGHERTY: Objection to23 form.24 A. Not for the group as a whole,25 no. And this is the group as a whole. Thepage 441 K. WALTZ2 publishing group as a whole.3 Q. Were you familiar with any of4 the information on this or just none of it?

[44:8] - [44:13] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 448 A. I don't know these numbers.9 Q. Okay. Were you familiar with10 the publishing financial projections from11 2007-2011 for the Orlando Sentinel?12 A. Those would be the ones that I13 would submit, yes.

[44:14] - [44:22] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 4414 Q. Now, it's the case, is it not,15 that this document page shows the operating16 cash flow projected for 2007 to be17 $929 million?18 A. Yes, but just a point of19 clarification. I don't know what "PF" means20 where it says "2007 PF." I think the E21 means estimate, but I don't know what "PF"22 means.

[44:23] - [45:22] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 4423 Q. Have you ever seen the letters24 PF used as pro forma?25 A. Oh, no, I don't think so. Okay.page 451 K. WALTZ2 Q. Did you ever see that term used3 when you were employed by Orlando Sentinel?4 A. I have heard the term. I don't5 recall ever seeing the term. I don't6 remember the abbreviation at all.7 Q. Do you recall whether there were8 pro forma projections done in connection9 with the leveraged buyout of Tribune that10 was ongoing in 2007?

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• Deposition Designation11 A. I don't know about pro forma. I12 know that there were projections done. But13 I don't know about -- it's just not a term I14 use.15 Q. Do you recall there were16 projections, whether they were labeled17 pro forma or not?18 A. Yes.19 Q. That the publishing group of20 Tribune would have operating cash flow in21 2007 of $929 million?22 A. I don't remember that number.

[45:23] - [48:17] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 4523 Q. Do you recall, however, that the24 projections were, in the early part of 2007,25 that the operating cash flow of Tribune'spage 461 K. WALTZ2 publishing group would be less in 2007 than3 they were in 2006?4 MR. MILES: Object to form.5 MR. DOUGHERTY: Object to form.6 Foundation.7 A. I only know Orlando.8 Q. Okay. And what do you recall9 about Orlando?10 A. I think our revenues were11 softening in Orlando but, remember, that12 again, that's coming off a record high where13 we doubled some category of business. So14 '06 was a record high and '07 was softer15 than '06 in Orlando.16 Q. Now, do you have any reason to17 believe that the experience in Orlando of18 having 2006 be a record year was also true19 for other parts of Tribune?20 A. I think that it was unique in21 Orlando. In the real estate category -- I22 can't speak to the other newspapers, so I23 don't know, but I would just say that we had24 a very active real estate market in Orlando.25 Q. You would agree, looking at thepage 471 K. WALTZ2 financial information on pages 48355 and3 48358, that for the publishing group as a4 whole, the Tribune, the document does not5 show 2006 as being a record year?6 A. I am speaking only of Orlando.7 Yes.8 Q. Okay. But you would agree that9 the -- if you look at the numbers from 200310 through the 2007 projections, each year is a11 lower operating cash flow than the previous12 one?13 A. For the group as a whole, yes,14 that's what it says.15 Q. Now, were you involved in any16 discussions about the projected operating17 cash flow for Tribune's publishing group as18 a whole?19 MR. MILES: Objection. At what20 time?21 A. No.22 MR. LACK: During 2007.23 A. No, I wouldn't do group24 projections at all.25 Q. I wasn't suggesting that you did

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• Deposition Designationpage 481 K. WALTZ2 the projections yourself. But whether in3 any of the meetings you had, whether they4 were the weekly phone calls or the twice5 annual meetings that you described, was6 there any discussion about the projections7 for the publishing group of Tribune for 20078 and onward?9 MR. MILES: Objection to the10 form. Vague. Compound.11 A. I don't recall.12 Q. Do you recall any discussion13 about whether it made sense for Tribune to14 project increasing operating cash flow from15 2007 to 2011 for the publishing group when16 operating cash flow had declined year after17 year in the preceding years?

[49:3] - [50:6] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 493 A. No, we wouldn't have projected4 something that we didn't think made sense.5 MR. DOUGHERTY: I think he was6 asking a different question.7 MR. LACK: Move to strike the8 answer as not responsive.9 Q. I was asking a different10 question.11 MR. DOUGHERTY: It was a12 confusing question. Let him rephrase.13 A. Sorry.14 Q. I will ask the court reporter to15 read it back. I was asking for discussions16 that you were a participant in.17 MR. DOUGHERTY: In these18 meetings that you had in the spring19 and fall and the phone calls, did you20 have discussions where this topic was21 raised?22 MR. MILES: Of 2007.23 MR. DOUGHERTY: Of 2007.24 So read back the question and25 let's see if we have it.page 501 K. WALTZ2 (Whereupon, the aforementioned3 question was read back by the Court4 Reporter.)5 A. No, I don't recall that6 discussion.

[51:15] - [55:18] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 5115 Q. Were you aware, in the first16 quarter of 2007, that the operating cash17 flow of Tribune's publishing business had18 declined from January to February?19 A. I don't remember that. I don't20 remember.21 Q. Were you aware, in the first22 quarter of 2007, that the operating cash23 flow of -- in Tribune's publishing business24 was 24 percent -- in January 2007, was 2425 percent below what it was in January 2006?page 521 K. WALTZ2 A. I don't know if I knew that3 then.

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• Deposition Designation4 Q. Were you aware, in the first5 quarter of 2007, that the operating cash6 flow of Tribune's publishing business in7 February 2007 was 27 percent below what it8 was in February 2006?9 A. I don't recall that.10 Q. If you turn to the next page,11 48357. This is entitled "Publishing12 Management Projections." If you can just13 look over the bullet points on this page.14 THE VIDEOGRAPHER: Excuse me,15 five minutes of tape remaining.16 Q. Do you recognize any of the17 bullet points on this page as being18 management projections that you were aware19 of in the first quarter of 2007?20 A. I do recall that relative21 specifically to Orlando, the first half of22 '07 would be tough, but we thought it would23 get better, after the real estate24 advertising cycle I told you about. I25 recall that circulation strategies changed,page 531 K. WALTZ2 and we had some volume declines there, and I3 recall that interactive was growing,4 although I don't recall the exact number.5 So this looks reasonable to me.6 Q. How were the circulation7 strategies changing in Orlando?8 A. In Orlando specifically?9 Q. Yes.10 A. In Orlando, we decided to manage11 the circulation number more by what12 circulation would be of the better benefit13 to our advertisers rather than a gross14 circulation number, which is primarily a15 cost consideration.16 I can give you examples if you17 want.18 Q. Yes. One example would be fine.19 A. One example, typically, we would20 sell very, very inexpensively newspapers to21 hotels that they would put outside your22 room, newspapers outside your hotel room.23 And that would give us a large circulation24 number, which we then used when we were25 selling advertising.page 541 K. WALTZ2 But it is expensive to do,3 because you don't get much revenue for the4 newspaper, and it is not that valuable for5 the local Orlando retailers, because, just6 like all of you, you fly in for the day,7 you're not as concerned about what is8 happening. So it is not really good9 circulation for advertisers.10 So we cut back on things like11 the hotel program, which saved us money, and12 we brought the number down. We brought the13 number down intentionally.14 Q. Okay. This page MS48357 refers15 to an 18 percent interactive revenue16 cumulative annual growth rate from 2006 to17 2010. Do you see that?18 A. Yes.19 Q. Was that consistent with your20 expectation in Orlando at the time in the21 early part of 2007?22 MR. DOUGHERTY: Objection to

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• Deposition Designation23 form.24 A. I know that we were expecting25 large double-digit increases. I don'tpage 551 K. WALTZ2 recall if it was 18 percent or not, as it3 states on this sheet. But we were expecting4 big growth in interactive.5 Q. Why?6 A. Because our audience was moving7 online. And as that audience grew, we were8 able to sell more advertising. The9 circulation numbers that we lost didn't10 reflect an audience decline. We actually11 had a greater audience and greater12 readership, because people were reading the13 Orlando Sentinel online as well as the print14 product.15 So our audience was definitely16 growing online, and the advertisers followed17 the eyeballs. So we expected large18 increases in interactive.

[56:11] - [56:18] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 5611 Q. Miss Waltz, do you know what --12 who were the members of the management that13 made the projections shown on Page 48357?14 A. The members of management who15 made the projections, this would have been16 the managers in the publishing group with17 input from the managers of each of the18 business units.

[57:2] - [59:9] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 572 Q. Let me rephrase the question.3 Do you recall that there were4 projections issued by the Tribune in March5 of 2007?6 MR. DOUGHERTY: Object to the7 form.8 A. Are you asking did we do9 projections?10 Q. Yes.11 A. Yes, I believe we did12 projections sometime in '07, but I don't13 remember if it was March or not.14 Q. Do you recall approximately when15 in 2007 the projections were done by16 Tribune?17 MR. MILES: Objection. Asked18 and answered.19 A. I don't exactly remember when20 they were done, no.21 Q. Do you recall there were22 projections done in the first half of the23 year?24 A. I don't exactly know when they25 were done, but I know we did them. Whetherpage 581 K. WALTZ2 it was the first half of the year or March3 or -- I am just not recalling exactly when.4 Q. Do you recall whether the5 projections that were done in 2007 were ever6 revised?7 A. Well, I would use a -- I thought8 a projection was a revision to the plan. So

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• Deposition Designation9 projection -- the plan is the annual budget10 and the projections would be the revisions.11 Q. Let's make sure I understand the12 terminology. The plan that you just13 referred to was issued when, what date?14 A. The plan would be completed in15 the fall, delivered to the board of16 directors, and then that would become the17 budget for the start of the new year.18 Q. The year was a calendar year?19 A. The year was a calendar year.20 Q. So when you say the projection21 is a revision to the plan, you are saying22 that the 2007 projections were a revision to23 the plan that was adopted in the fall of24 2006?25 A. Yes. I would say that apage 591 K. WALTZ2 projection would be an update on how you are3 doing relative to the plan.4 Q. And do you recall how Tribune5 was doing relative to the 2006 plan, in6 early 2007?7 A. I believe early 2007, certainly8 in Orlando, I can't speak to every business9 group, but early 2007 was softer than '06.

[59:10] - [59:12] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 5910 Q. When you say "softer," do you11 mean that Orlando was performing less well12 than planned?

[60:8] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 608 A. In early '07, yes.

[60:9] - [61:15] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 609 Q. How much less in percentage10 terms was Orlando performing less well than11 planned?12 A. I don't recall, but we should13 have the numbers somewhere. I mean if you14 show me the --15 Q. Okay. Were the -- was the16 softness in Orlando's performance in early17 '07 reflected in the projections that you18 saw?19 MR. MILES: Objection, form.20 Timeframe.21 MR. DOUGHERTY: Same objection.22 A. In the projections that I saw?23 Q. Yes.24 A. For Orlando, yes, that would25 have been -- we would have done thosepage 611 K. WALTZ2 projections.3 Q. And were the numbers that you4 provided to Chicago included in the5 projections that came back from Chicago?6 MR. MILES: Objection to form.7 Vague.8 A. Yes. Business units would all9 submit the information and they would roll

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• Deposition Designation10 it up, consolidate it.11 Q. Did you check to see whether the12 projected information you provided to13 Chicago was in fact included in the reports14 that Chicago issued?15 A. No.

[62:7] - [62:12] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 627 Q. So were the projections that you8 recall that were revisions to the plan that9 had been adopted in the fall of 2006 ever10 revised?11 A. Were the projections revised?12 Q. Yes. Were the projections

[62:13] - [63:4] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 6213 revised?14 A. I don't know. I mean, we did a15 plan, and then sometime during that year we16 did a projection, which was a revision, and17 you are asking were they revised again from18 that?19 Q. Yes.20 A. I don't know.21 Q. Did the projections that were22 done in 2007, were those done every year?23 Was what was done in 2007 the same process24 that had been done in previous years?25 A. I don't know. I don't know.page 631 K. WALTZ2 They would only revise a plan if they -- if3 we were asked to do so or they saw a need.4 So I don't know if it was done every year.

[63:14] - [67:2] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 6314 Q. Do you recall that in the early15 part of 2007, Tribune was considering16 entering into a leveraged buyout17 transaction?18 A. Yes.19 Q. To your recollection, did the20 prospect of a leveraged buyout transaction,21 or LBO, have anything to do with the request22 that there be projections made in 2007 to23 revise the plan?24 MR. MILES: Object to the form.25 A. I believe they just asked forpage 641 K. WALTZ2 more information because they were being3 asked for more information.4 Q. And do you have any5 understanding of who was asking for more6 information?7 A. Harry Amsden.8 Q. And do you have any9 understanding of who was asking him for more10 information?11 A. No. It would be people outside12 the company, of course, but I don't know. I13 don't know who was asking him.14 Q. Were you aware, in the first15 half of 2007, that the projections were

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• Deposition Designation16 being supplied to various banking firms?17 A. Yes, I knew that.18 Q. And did you have any19 understanding in the first half of 2007 the20 projections were being provided to a firm21 that was going to do a solvency analysis of22 Tribune?23 A. Yes, I knew that.24 Q. And were you aware that at some25 point in the first half of 2007, there waspage 651 K. WALTZ2 an agreement entered into to do an LBO of3 Tribune?4 A. I'm sorry, that the agreement5 came in the first half of 2007?6 Q. Yes. Yes.7 MR. DOUGHERTY: Objection to8 form. Foundation.9 A. I know that there was an10 agreement. I don't know exactly when that11 agreement was made.12 Q. Did you understand that the LBO13 was going to take place in two steps?14 A. Yes.15 Q. And did you understand that the16 first step took place in June of 2007?17 A. I think I knew that at the time.18 At the time. Looking back, I don't remember19 exactly when it was. But that sounds right.20 Q. Do you recall that the second21 step took place in December of 2007?22 A. Yes.23 Q. Do you recall whether there was24 any revision to the projections done in25 connection with the second step of the LBO?page 661 K. WALTZ2 MR. MILES: Object to the form.3 Are you talking about corporate4 projections or Orlando Sentinel?5 MR. LACK: Corporate6 projections.7 A. Are you asking me if we did more8 projections between the first step and the9 second step?10 Q. Yes.11 A. Yes, I believe so. Yes.12 Q. Do you recall that those were13 revisions to the first set of projections14 that you testified about?15 A. No, because I think -- now16 you're talking about two different sets of17 projections.18 Q. Correct. Do you recall that19 there were two different sets?20 A. I recall one which did take21 place between those two steps. But I don't22 recall the second one.23 Q. You don't recall one that took24 place -- a projection that took place before25 step one was effected in June of 2007?page 671 K. WALTZ2 A. I don't recall, sorry.

[67:3] - [67:12] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 673 Q. Do you recall whether there was4 a process, whether formal or informal, of

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• Deposition Designation5 updating projections in Chicago at the6 corporate office during 2007?7 A. At the corporate office?8 Q. Yes.9 A. No. I mean, our weekly10 telephone conversations that I told you11 about earlier would be updates of a sort.12 But I don't know what happened in corporate.

[67:16] - [67:20] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 6716 MR. LACK: I would like to mark17 as Waltz Exhibit 2 a document with18 Production Numbers EGI-LAW2975219 through 29753, which is a series of20 e-mails.

[68:2] - [68:9] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 682 MR. LACK: I am going to mark as3 Waltz Exhibit 3 for identification a4 document with Production Numbers5 TRB125671 through 125678, which is an6 E-mail with attached spreadsheets.7 The E-mail is from Peter Knapp to8 Chandler Bigelow and Daniel Kazan9 dated April 19, 2007.

[68:15] - [68:20] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 6815 MR. LACK: I would like to mark16 as Exhibit 4 for identification a17 document with Production Number18 EGI-LAW105044, an E-mail from Mark19 Sotir, S-O-T-I-R, to Bill Pate and20 others, dated June 8, 2007.

[68:25] - [69:19] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 6825 Q. I would like you to look firstpage 691 K. WALTZ2 at Exhibit 2, and I would like -- this is a3 series of e-mails, and I would like you to4 look at the third E-mail in the middle of5 the page, from Nils Larsen, L-A-R-S-E-N, to6 Mark Sotir and others, dated March 20, 2007.7 I am not suggesting you have8 seen this E-mail. It is an internal E-mail9 with an entity called EGI, but there was a10 reference in the second bullet point in that11 E-mail that says, quote, Chandler indicated12 on the 9th that management needed to sit13 down and refine their projections for 2007,14 unquote.15 Do you see that line?16 A. Yes.17 Q. You understand Chandler to refer18 to Chandler Bigelow?19 A. Yes.

[70:11] - [74:4] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 7011 Were you aware of any process12 ongoing at Tribune in March of 2007 in which

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• Deposition Designation13 management was refining their projections14 for 2007?15 A. No, other than any updates they16 would ask of us, at the business unit level.17 Q. And those updates were being18 given in weekly calls and monthly reports?19 A. Or if they would -- at any time20 they asked us for something, we would21 respond with it, even if it wasn't as part22 of a weekly update.23 Q. Do you recall being asked, aside24 from weekly updates and monthly reports, for25 updates on projections during 2007?page 711 K. WALTZ2 MR. DOUGHERTY: That's already3 been asked and answered.4 A. We did projections in '07. I5 just don't remember when.6 Q. But I am saying, do you recall7 getting e-mails and phone calls about8 updating projections?9 A. Not specifically.10 Q. Let me turn to Exhibit 3 now.11 The first page of the exhibit is an E-mail12 from Peter Knapp to Mr. Bigelow.13 What was Mr. Knapp's position at14 Tribune at the time?15 A. I believe he worked for Harry16 Amsden in the financial department, but I17 don't know what his position was.18 Q. The E-mail says, quote, "This is19 our latest 'unofficial' projection (with a20 page for each quarter) as loaded into the21 system," end quote.22 Do you see that?23 A. I see that.24 Q. Do you have -- were you aware25 there were unofficial projections thatpage 721 K. WALTZ2 existed at Tribune in or around April 2007?3 MR. DOUGHERTY: Object to the4 form.5 A. I don't know what Peter may have6 meant by "unofficial." Could be just not7 yet finalized. I don't know what he means8 by that.9 Q. I would like you to look at10 Exhibit 4. This E-mail states, quote, "Can11 you guys meet with the Trib's finance team12 on Tuesday afternoon (June 12th) to review13 period five financials? They may show us14 their revised forecast, but are still15 discussing with lawyers what level of detail16 they can discuss," unquote.17 Do you see that?18 A. Yes.19 Q. What is period five, just if you20 can answer that?21 A. What is it?22 Q. Yes.23 A. Roughly May, but periods don't24 line up exactly with months. So sometimes25 you get a five-week period. Sometimes youpage 731 K. WALTZ2 have a four-week period. But roughly period3 five is May.4 Q. How does -- how are the periods5 defined if not by months?

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• Deposition Designation6 A. By four weeks.7 Q. So is the year divided into 138 four-week periods?9 A. Yes.10 Q. Were you aware of whether there11 were any revised forecasts prepared by12 Tribune in or around June of 2007?13 A. Is that different from a14 re-projection?15 Q. Well, I am not sure. I am16 asking whether you heard the term "revised17 forecast" being used at Tribune in or around18 June of 2007.19 A. I don't recall it.20 Q. Are you aware of any revised21 projections in or around June of 2007?22 A. Just the ones that we have23 already talked about.24 Q. Revision to the plan?25 A. Yes.page 741 K. WALTZ2 Q. The plan was the plan for 20073 that was adopted at the end of 2006?4 A. Right.

[74:9] - [74:21] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 749 Q. What is a FAS FAX report?10 A. It is a report that the11 newspapers generate to talk about how many12 newspapers they are selling over a certain13 period, and it is part of what rolls into14 the annual circulation audit.15 Q. When you say annual circulation16 audit, what auditor are you referring to?17 A. The Audit Bureau of Circulation,18 which is an outside firm that audits19 newspapers, so that the number of newspapers20 that we tell our advertisers we are selling,21 we are in fact selling.

[79:2] - [79:11] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 792 MR. LACK: I would also like to3 mark as Waltz Exhibit 6 a document4 entitled "Tribune Publishing5 March 2007 FAS FAX Analysis, April 30,6 2007, Daily (Monday to Friday)7 Analysis." This is an excerpt from a8 larger document.9 The first page is TRB124668, and10 it also includes pages ending in '669,11 '704 through '705 and '707 to '708.

[82:7] - [83:20] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 827 breaks up the newspapers into non-Tribune8 and Tribune groups? If you look, for9 example, on the third page of the exhibit at10 the bottom, it says "Tribune newspapers."11 A. Yes, I see that.12 Q. And the other newspapers on page13 one seem to be listed in order of decreasing14 size.15 A. Well, yes.16 Q. And you don't see the

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• Deposition Designation17 Los Angeles Times, which is one of the18 largest companies in the country, on the19 first page, right? It is in the Tribune20 section only?21 A. I don't see it on the first22 page, no. I do see it later.23 Q. Do you have an understanding of24 who prepared this particular spreadsheet?25 A. No.page 831 K. WALTZ2 Q. Do you recall that -- did the3 FAS FAX -- that is, when ABC issued the FAS4 FAX report, did it include the Tribune5 newspapers in a separate group?6 MR. MILES: Objection,7 foundation.8 A. I don't know. I don't know.9 Q. Do you recall whether it listed10 all the newspapers in some sort of a11 sequence, whether alphabetical or12 circulation order?13 A. All the newspapers in Tribune or14 all the newspapers in the world?15 Q. All the newspapers in the world.16 A. In the country.17 Q. All the newspapers in the18 country.19 A. They would list them by,20 typically by decreasing circulation.

[83:21] - [84:2] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 8321 Q. Does seeing Exhibit 6 in the22 format that it is indicate to you that this23 is a spreadsheet that Tribune prepared from24 data provided by ABC in its FAS FAX report?25 A. I can't tell by looking at thispage 841 K. WALTZ2 who prepared it.

[84:3] - [88:6] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 843 Q. Let me ask you about some of the4 terminology. On the first page, there is a5 heading in Column F. It says "IP '07."6 What does IP mean?7 A. IP as we would use it means8 individually paid. And that's the most9 valuable kind of circulation that there is10 from an advertiser's point of view.11 Q. And individually paid is12 distinguished from what?13 A. Well, for example, if you were a14 home delivery subscriber, you individually15 paid for that newspaper, indicating that you16 wanted that newspaper in your home.17 The hotel program I described to18 you earlier would not be individually paid.19 Anything we sell bulk to a convention, to be20 distributed at a meeting, would not be21 individually paid. It is not as valuable to22 an advertiser as you having the newspaper in23 your home or picking it up on your way to24 work.25 Q. So individually paid includespage 851 K. WALTZ

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• Deposition Designation2 newsstand copies?3 A. Yes.4 Q. And home delivery copies?5 A. Yes.6 Q. But it doesn't include, for7 example, copies that hotels would buy to8 place in front of the guest room doors?9 A. Right.10 Q. But all of the circulation which11 is shown is paid for; right?12 A. Yes.13 MR. MILES: Objection.14 A. Yes, that's --15 Q. I will ask the question again.16 Are the numbers that are shown17 on the FAS FAX report, are they -- what do18 they represent?19 A. All sold newspapers at whatever20 price or however they were sold. But this21 is ABC validating that this is the number of22 newspapers that were sold.23 Q. So there are no free copies24 included here?25 A. I wouldn't think so.page 861 K. WALTZ2 Q. Did hotels buy the newspaper,3 the Sun-Sentinel, at the same price as home4 subscribers?5 A. No.6 Q. There were different prices for7 home subscribers, newsstand and hotels?8 A. Yes.9 Q. Would the hotel price be less10 than home?11 A. Yes.12 Q. Now, I understand your testimony13 that from an advertiser's perspective, the14 most valuable information is the15 individually paid?16 A. Yes.17 Q. From a financial perspective to18 the newspaper, as opposed to the19 advertisers, which is the most important20 measurement of circulation?21 MR. DOUGHERTY: Objection.22 Asked and answered. I think this was23 covered this morning already. She24 shouldn't have to go through it again.25 A. The most important circulationpage 871 K. WALTZ2 would be home delivery circulation to the3 newspaper, because you don't have to sell it4 again every day. You sell it for a period,5 13 weeks up to a year, whatever. It gets6 into your home, so the consumer absolutely7 wants it. It is not always the most8 profitable, but it is the most important.9 And of the days of the week,10 Sunday is the most important.11 Q. Why is that?12 A. Because that's where all the13 advertising is. And the paper itself is14 more expensive, but really it is because15 that's where all the advertising is.16 Q. Now, the home delivery is a17 portion of the IP or individually paid --18 A. Yes.19 Q. -- circulation number, right?20 A. Yes.

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• Deposition Designation21 Q. Does ABC include information on22 home delivery?23 A. Yes. They get that from the24 newspapers. And they come to town and audit25 it and compile it.page 881 K. WALTZ2 Q. Is the home delivery portion of3 IP or individually paid shown on the FAS FAX4 report?5 A. I don't think so. I would have6 to look at one again.

[88:7] - [89:4] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 887 Q. From a total revenue8 perspective, is the total circulation, that9 is individual paid and other, of any10 significance?11 MR. MILES: Object to form.12 MR. DOUGHERTY: Same.13 A. I am sorry, from a revenue14 perspective, does it matter whether it is15 individually paid or other?16 Q. Yes.17 A. Yes, it matters.18 Q. How does it matter?19 A. Because individually paid is20 more important to the newspaper and to the21 advertisers, and others would likely be more22 of a discount program. For example, in23 Orlando there are a lot of conventions in24 Orlando. We might sell bulk of newspapers25 to a convention that comes to town, and theypage 891 K. WALTZ2 would distribute them at the meetings.3 Well, we would sell them for less money in4 bulk than we would sell to individual.

[89:5] - [89:8] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 895 Q. Is the total circulation number6 which is reported on the FAS FAX reports7 irrelevant in terms of assessing the8 business performance of a newspaper?

[89:12] - [89:18] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 8912 A. Is the circulation number13 irrelevant to the business?14 Q. Correct.15 A. No, it is not irrelevant, I16 don't believe.17 Q. Is the total -- the total18 circulation includes -- is all paid copies?

[89:20] - [90:4] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 8920 A. Total circulation is all paid --21 the total circulation as we reported on FAS22 FAX and ABC is all paid. The newspaper may23 do some sampling, but we don't count that as24 paid circulation. So there may be papers25 that are distributed and not paid for, whichpage 90

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• Deposition Designation1 K. WALTZ2 would be very small, because it is3 expensive, and we don't count that as paid4 circulation.

[90:5] - [91:8] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 905 Q. But my question is whether, if6 you are looking at the question of revenue7 for the newspaper, the higher the total8 circulation, the higher the revenue. Is9 that true?10 A. Not necessarily. Not11 necessarily.12 Q. Why not?13 A. Because you can build your14 circulation number by deeply discounting15 copies, giving them to a lot of different16 hotels. So I can distribute a lot of17 newspapers and not earn very much money.18 MR. LACK: Now, let me mark as19 Waltz Exhibit 7 the FAS FAX analysis20 for March 2007 for Sunday. This has21 Production Numbers TRB1246623 through22 '6624 and 1246662 through '6663.23 Again, this is an excerpt from a24 larger document.25 (Whereupon, the document Batespage 911 K. WALTZ2 stamped TRB1246623 through 1246624 and3 1246662 through 1246663 marked as4 Exhibit Waltz-7 for identification as5 of this date by the Reporter.)6 Q. Do you recall seeing this7 document before?8 A. No.

[92:8] - [92:22] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 928 Q. You see that in the -- it shows9 that the Tribune newspapers as a group were10 down 2.9 percent for individual paid11 circulation from March 2006 to March 2007?12 A. Yes.13 Q. And that that was -- that the14 top 39 Tribune newspapers, the total of15 which is shown on the top of pages three and16 four, were down 3.7 percent in that same17 category?18 MR. MILES: Object to the form.19 A. The total of the non-Tribune20 newspapers, which is line 605?21 Q. Yes.22 A. Were down 3.7. Yes, I see it.

[92:23] - [93:2] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 9223 THE WITNESS: You have to hold24 these side by side. You go like that25 and just so the top --page 931 K. WALTZ2 MR. DOUGHERTY: I see.

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• Deposition Designation[93:3] - [93:6] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibits

page 933 Q. Now, do you view this decline in4 the most important element of circulation on5 the most important day of the week as6 indicative of a healthy newspaper industry?

[93:7] - [93:17] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 937 MR. MILES: Object to the form.8 MR. DOUGHERTY: Objection to9 form. Foundation.10 Is my voice coming through?11 THE VIDEOGRAPHER: Very little.12 A. Can I have the question again.13 I'm sorry.14 MR. LACK: Read it back, please.15 (Whereupon, the aforementioned16 question was read back by the Court17 Reporter.)

[93:18] - [94:12] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 9318 A. I don't read this to -- I don't19 believe this to mean it is unhealthy at all.20 MR. LACK: I would like to now21 mark as Exhibit 8 for identification a22 document with Production Number23 EGI-LAW90374 as the first page, and24 this is an excerpt, what follows is an25 excerpt from a document which ispage 941 K. WALTZ2 referred to as the Period 4, 20073 Brown Book.4 What's attached to the first5 page are a series of spreadsheets, and6 I will just represent for the record7 that they are not the complete Brown8 Book, which is more than 100 pages.9 It is an excerpt from the Brown Book.10 The production numbers range, not11 consecutively, from 90381 through12 90519.

[94:25] - [95:22] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 9425 Q. Miss Waltz, have you ever heardpage 951 K. WALTZ2 the term "Brown Book"?3 A. Yes.4 Q. What is the Brown Book, a Brown5 Book?6 A. A Brown Book is a report that7 corporate would generate for corporate use.8 All the financials for the whole company.9 Q. To whom is the Brown Book10 distributed?11 A. Not down to me, so I don't know.12 But I think just the top corporate guys.13 Q. There is a reference here to "E14 Brown Book." Have you ever heard of E Brown15 Book?16 A. No.17 Q. So the testimony is that you18 never received a copy of the Brown Book?

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• Deposition Designation19 A. I have never received a copy of20 the Brown Book, no. I may have seen a copy21 of the Brown Book, but I was not on the22 distribution for the Brown Book.

[96:23] - [98:9] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 9623 Q. -- did you ever see spreadsheets24 in the format that is shown in this page,25 that is operating statements for thepage 971 K. WALTZ2 publishing group of Tribune for a particular3 period?4 A. Yes.5 Q. Do you recall seeing this one?6 A. Not specifically, no.7 Q. Did you get the operating8 statements for the period, each period, the9 end of each period or shortly thereafter?10 A. Yes.11 Q. About how far after the end of12 the period?13 A. I don't know how far after.14 Several days or so. I don't know.15 Q. I would like you to turn to16 page 90384, which is titled "Publishing17 Summary Operations for Period 4, 2007."18 Did you receive this19 spreadsheet?20 A. I don't recall it specifically,21 but I suspect I would have seen it.22 Q. This particular spreadsheet has23 the operating cash flow for each of the24 newspapers; is that right?25 A. Yes.page 981 K. WALTZ2 Q. It specifically has a line for3 Orlando, which refers to the Orlando4 Sentinel; is that right?5 A. Yes. Well, it refers to6 everything in Orlando. So it would be the7 Orlando Sentinel, OrlandoSentinel.com, the8 Spanish language newspaper, all of the9 Orlando operations.

[98:10] - [98:20] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 9810 Q. Okay. Now, is it the case that11 the -- let's look at columns here. On the12 left side, there is a series of columns13 labeled "Period 4."14 A. Yes.15 Q. Which is roughly April 2007?16 A. Yes.17 Q. Now, on the right is "year to18 date," which is January through April 2007,19 approximately?20 A. Yes.

[99:19] - [99:23] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 9919 Q. Now, this report shows that the20 actual operating cash flow of the Orlando21 Sentinel, broadly defined as you have22 described it, in 2006, was $30,984,000?

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• Deposition Designation23 A. Yes.

[100:9] - [103:8] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1009 Q. I am sorry, that was -- this10 shows this number for January to April 2006,11 approximately; is that right?12 A. Yes.13 Q. And this document also shows14 that the plan for January-April, 2007, was15 for the operating cash flow to decrease from16 $30,984,000 to 23,733,000; is that right?17 A. Yes.18 Q. And this document also shows19 that the actual performance of the Orlando20 Sentinel, broadly defined, from January to21 April 2007 was $18,222,000; is that right?22 A. Yes.23 Q. And this also shows in the24 variance column that the Orlando Sentinel25 was -- its performance was 41 percent belowpage 1011 K. WALTZ2 2006 performance for the same period; is3 that right?4 MR. MILES: Objection. You are5 talking about Orlando Sentinel as6 broadly defined?7 MR. LACK: As broadly defined,8 yes. Including the interactive parts.9 A. Including everything?10 Q. Yes. That includes the11 interactive parts.12 A. That would include interactive,13 yes.14 Q. That was 41 percent below the15 performance, in those four months, four16 periods of 2006?17 A. Yes.18 Q. And the Orlando Sentinel,19 broadly defined, performance was 23 percent20 below the plan for 2007; is that right?21 A. Yes, that's what it says here.22 Q. Were you aware of this23 information in or around May of 2007?24 A. Yes.25 Q. And what was your reaction topage 1021 K. WALTZ2 it, at the time?3 A. Again, I would go back to '064 being a record year in Orlando. So I5 expected '07 to be softer. So I don't think6 I was surprised by it.7 Q. Did you expect '07 to be8 41 percent worse than '06?9 A. I expected '07 to come in at the10 plan level, which is less than 41 percent.11 Q. And did you -- but you didn't12 expect '07 to be 23 percent below the plan13 level?14 A. I expected '07 to be at the plan15 level.16 Q. Right. So what was your17 reaction when you saw it was 23 percent18 below the plan level?19 A. I don't recall any particular20 reaction.21 Q. Wasn't this cause for great22 concern?

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• Deposition Designation23 MR. DOUGHERTY: Objection to24 form.25 A. No, I don't think it was causepage 1031 K. WALTZ2 for a great concern, because, again, you are3 budgeting year after year, and you are4 estimating how you are going to be, and5 because it was such a boom year in '05 and6 '06, we planned or estimated how far down we7 would be. We missed some, but it was not --8 I was not alarmed, no.

[103:9] - [103:21] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1039 Q. You did plan that it would be10 down. You planned it would be down from11 about 31 million for that four-period --12 A. To close to 23 -- to 24.13 Q. To close to 24.14 A. Right.15 Q. But it actually came in at 18.16 A. Right.17 Q. So there was a far greater18 decrease than you thought there was going to19 be; is that true?20 A. Well, it was a decrease, and I21 thought it was going to be, yes.

[103:22] - [105:6] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 10322 Q. Well, you don't regard missing23 the plan by 23 percent as a large miss?24 A. I mean, I don't know. I would25 have to drill down deeper into those numberspage 1041 K. WALTZ2 to see where exactly the losses were coming3 from. Did we expect to earn it back4 elsewhere. Did we expect to earn it back5 the next period. Did we think this was an6 aberration of any kind.7 I can't answer that question8 without, you know, looking deeply into the9 numbers and talking to the advertising10 director, the circulation director.11 Q. Do you recall thinking, when you12 saw that the Orlando Sentinel was 23 percent13 below plan, that you would have to make it14 up in order to stay on plan, make it up in15 the remaining eight periods in the year?16 A. In order to stay on plan, we17 either have to increase our revenues or18 decrease our expenses to get back to plan,19 and we would have the rest of the year to do20 that or we would miss plan.21 THE VIDEOGRAPHER: One minute of22 tape remaining.23 Q. Was there any prospect of --24 given that you were already 23 percent below25 plan, was there any prospect of catching uppage 1051 K. WALTZ2 by the end of the year?3 A. I can't answer that now without4 knowing, again, exactly where the losses5 were coming from and how we would have6 addressed them.

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• Deposition Designation[105:22] - [108:10] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibits

page 10522 Q. Miss Waltz, I would like you to23 look, again, at the page of Exhibit 8 with24 the production number 90384. I would like25 you to look at the left side of thepage 1061 K. WALTZ2 spreadsheet, which deals with period four.3 This shows that the operating4 cash flow for the Orlando Sentinel, broadly5 defined, in period four was down 32 percent6 below the plan; is that right?7 A. Yes.8 Q. So the Orlando Sentinel, broadly9 defined, performed worse against -- as10 against the plan in April than it had for11 the four periods of January through April;12 isn't that right?13 A. We were off plan 32 percent in14 April of '07. January through April, we15 were off plan 23 percent. Yes.16 Q. So that indicates to you that17 April was worse than January, February and18 March; isn't that right?19 A. Than January, February, March as20 a whole. I don't have the specific21 breakouts of January, February, and March.22 But as a whole, yes.23 Q. So in other words, the24 performance of the Orlando Sentinel, broadly25 defined, was deteriorating in April relativepage 1071 K. WALTZ2 to earlier in the year; is that right?3 MR. DOUGHERTY: Object to the4 form.5 A. Well, we were off more in April6 than the cumulative of January, February and7 March.8 Q. Were you concerned at the time9 you saw the information that's on this page,10 that -- about April being worse than the11 three periods preceding it?12 MR. DOUGHERTY: Object to the13 form.14 A. I don't recall, because I don't15 know why April was off. I mean, I don't16 remember specifically what is in these17 numbers.18 Q. Do you recall having any19 discussions with people in Chicago in the20 management, in headquarters, about the21 Orlando Sentinel's performance in April as22 compared to earlier in the year?23 A. I don't remember any specific24 conversations. I just don't recall.25 Q. Do you recall being concernedpage 1081 K. WALTZ2 about the April results at the time you3 learned of them?4 MR. DOUGHERTY: Objection.5 Asked and answered.6 A. I don't recall being concerned,7 no. Because I don't know, again, I don't8 know what was happening in April. I just9 don't recall any details under these10 numbers.

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page 10811 Q. But 32 percent is a lot to be12 below plan; wouldn't you agree?13 A. I mean it is below plan. I14 don't know what you mean by a lot to be15 below plan. You never want to be below plan16 at all.17 Q. Right. Right. So if you were18 five percent below plan, would you be19 concerned?20 MR. DOUGHERTY: Object to the21 form.22 A. I don't think so. I mean, I23 don't know at what -- I don't have a number24 in mind at which I would get concerned.25 Q. So you don't know whether atpage 1091 K. WALTZ2 50 percent below plan, you would be3 concerned?4 MR. DOUGHERTY: Object to the5 form.6 A. You know, it would just depend7 on what was happening in the business at the8 time. There are, I imagine, a lot of9 scenarios where you would end up being off10 plan. There may be things in the economy11 that are out of your control, whatever. So12 I can't tell you why I would be upset about13 this.14 Q. Would you agree that if you were15 100 percent below plan, you would have to16 close the paper?17 A. No. I would have to be 10018 percent below actual, I guess. I don't19 know.20 Q. So you can't tell me at what21 point below plan you would be concerned22 about the performance of the Orlando23 Sentinel?24 A. No, I can't.

[109:25] - [117:5] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 10925 Q. Now, if you can turn to the pagepage 1101 K. WALTZ2 with Production Number 90402. This3 spreadsheet is entitled "Interactive4 Operations, Subject of Revenue and FTE5 Superior for 2007."6 Do you see that?7 A. Yes.8 Q. FTE are full-time equivalent9 employees?10 A. Yes.11 Q. And you will see that there is a12 line in the total revenue by market for13 Orlando; is that right?14 A. Yes.15 Q. So does this represent the16 interactive revenues of OrlandoSentinel.com17 and the other MDs that you mentioned?18 A. Yes.19 Q. You mentioned something called20 cars.com?21 A. Yes.22 Q. Was that unique to Orlando?

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• Deposition Designation23 A. No.24 Q. Or careerbuilder.com?25 A. Not unique to Orlando.page 1111 K. WALTZ2 Q. So are those numbers in the3 interactive operations for Orlando in this4 spreadsheet?5 A. The Orlando portion of them6 would be.7 Q. How would you determine the8 Orlando portion of cars.com?9 A. It would be what we sold in10 Orlando and ran on OrlandoSentinel.com, and11 it would be -- there would be a Chicago12 cars.com, and they would count their revenue13 in the Chicago line.14 Cars.com was a company created15 by a number of newspaper companies. So16 Tribune had a piece of cars.com.17 Knight-Ridder had a piece of cars.com. It18 was like an affiliate model, more like a19 broadcast model.20 Q. Just so the record is clear, and21 I am clear, what is cars.com?22 A. Cars.com is an automotive23 website for selling cars that both24 individual car dealers use and individual25 people use to sell their car. You canpage 1121 K. WALTZ2 place -- you can post an ad on cars.com to3 sell your car.4 Q. So it is an online version of5 classified and display advertising for cars?6 A. Yes, that's -- yes.7 Q. And Career Builder, is that the8 same thing for job postings?9 A. Yes.10 Q. Want ads, in other words?11 A. Yes.12 Q. Are job postings also referred13 to as recruitment?14 A. Yes.15 Q. Now, the -- if somebody in16 Orlando was selling their car on cars.com,17 or taking out an ad for the car, for18 cars.com, that would show up as Orlando19 interactive, right?20 A. Yes.21 Q. Now, the spreadsheet that's22 shown on page 90402 shows that the actual23 interactive revenues for Orlando Sentinel,24 including the interactive properties of25 Orlando Sentinel or Orlando Sentinel'spage 1131 K. WALTZ2 portion of those websites, in 2006 was3 $6,679,000; is that right?4 A. In '06, yes.5 Q. And the 2007 plan expected those6 interactive revenues to decline to7 6,559,000?8 A. Yes.9 Q. And during the first four10 periods of 2007, the actual revenues were11 $6,115,000, right?12 A. Yes.13 Q. So in other words, the14 interactive revenue of the Orlando Sentinel15 was seven percent below plan?

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• Deposition Designation16 A. Yes.17 Q. And now, with respect to18 period 4 itself, Orlando Sentinel, in 2006,19 had $1,581,000 of interactive revenue?20 A. Yes.21 Q. And it was expected in the plan22 that that revenue would increase in period 423 to 1,748,000?24 A. Yes.25 Q. Is that right? So while thepage 1141 K. WALTZ2 first four periods of 2007 were planned to3 be down in terms of revenue, the fourth4 period was actually planned to be up; is5 that right?6 A. Yeah -- yes.7 Q. In other words, in the plan8 forecast, there would be a turnaround in the9 interactive operations of the Orlando10 Sentinel sometime around April of 2007?11 MR. DOUGHERTY: Object to the12 form.13 A. No, I don't think that14 necessarily means it would be a turnaround.15 It could be any one of a number of reasons16 why we would expect to do better in April.17 Maybe we were launching a new website.18 There are always new websites coming on.19 Something like Engine Head or something like20 Metro Mix.21 So I would have to know what is22 in those numbers. It could be product23 related, not just volume.24 Q. But April was supposed to be an25 up month in the plan for interactive inpage 1151 K. WALTZ2 Orlando, right?3 A. We expected '07 in April -- the4 April of '07 to be better than April of '06,5 yes, by $200,000.6 Q. In fact, it was worse than7 planned. It was, instead of $1,748,000, it8 was $1,561,000; is that right?9 A. Yes.10 Q. It was 11 percent below plan?11 A. Right.12 Q. Did that concern you at the13 time, that the interactive revenues of14 Orlando Sentinel which were supposed to be15 increasing were in fact decreasing?16 A. I don't think so. I don't think17 so. There is some correlation between the18 print volume and the interactive volume. So19 as we saw print was down in that period, I20 would expect the interactive, there would be21 some correlation there. So I don't think22 that surprised me.23 Q. Did the decline that occurred in24 interactive cause you to question whether25 interactive could have double-digitpage 1161 K. WALTZ2 cumulative average growth rates in 2007?3 MR. DOUGHERTY: Object to the4 form.5 A. No, I wouldn't think so.6 Because, again, the base is smaller so the7 percentages are larger. We are talking8 about $200,000 here, right?

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• Deposition Designation9 Q. Yes.10 A. So no, I don't think -- it11 wouldn't make me think I couldn't get a12 double-digit increase for the year.13 Q. Do you recall how interactive14 ultimately ended up in 2007 for the Orlando15 Sentinel?16 A. I don't, but we can look at the17 numbers.18 Q. Did you have any discussions19 with management in Chicago about downward20 trends in the Orlando Sentinel's business in21 the first four periods of 2007?22 A. I don't recall.23 Q. Did you have any discussions24 with management in Chicago about the25 interactive part of Orlando Sentinel'spage 1171 K. WALTZ2 business and the fact that it was doing3 worse in 2006 when it was planned to do4 better?5 A. I don't recall any conversation.

[117:16] - [117:21] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 11716 12:40 p.m.; we are on the record.17 MR. LACK: I would like to mark18 as Waltz Exhibit 9 for identification19 a document with production numbers20 TRB1243778 through 779, which are two21 E-mail messages from Bob Gremillion.

[118:25] - [120:17] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 11825 Q. Well, this E-mail starts withpage 1191 K. WALTZ2 saying, "Thanks for your participation at3 our guiding team meeting this week."4 A. Yeah, but I don't know that we5 were all on the guiding team. Maybe we6 were. I don't know. But I do remember the7 transformational change initiative.8 Q. That's something that is also9 referred to in the first bullet point as10 transformative change or transformative11 change process?12 A. Yes.13 Q. Whether it is transformational14 or transformative, what was it?15 A. It was a strategic planning16 exercise headed by Bobby Gremillion which he17 did in addition to his regular duties to try18 to improve strategic planning across all of19 publishing, and we -- it had a lot of20 different elements in it, by business unit21 and by departments within business units.22 And there was an outside23 consultant whose name escapes me, but you'd24 probably recognize it if I can think of it,25 who came and led, facilitated a session withpage 1201 K. WALTZ2 all of us. Maybe that was the guiding team.3 I don't recall.4 Q. Was there any transformative5 change implemented at the Tribune as a6 result of this exercise?

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• Deposition Designation7 A. There were initiatives all8 across the company that were labeled9 transformative change. I can't tell you10 whether or not those initiatives would have11 been implemented any way.12 Q. Were any of them implemented at13 the Orlando Sentinel?14 A. I know we had a team that was15 questioning how we -- our work processes,16 but I don't recall any initiative that was17 implemented in Orlando.

[120:18] - [121:9] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 12018 Q. Let me direct you to the second19 paragraph of the E-mail. It says, and I20 will quote it, quote, "However, after21 touring all of the business units and22 through discussion with the publishing and23 interactive group staff, I thought it was24 vital that we take the time to confront our25 significant internal issues as described topage 1211 K. WALTZ2 me with great urgency by our employees3 during each and every one of those4 meetings," end quote.5 Do you have any understanding of6 what Mr. Gremillion was referring to by the7 "significant internal issues"?8 A. None. I have no idea what he is9 referring to.

[121:10] - [121:15] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 12110 Q. Did you participate in any11 meetings with, at the Sentinel, with12 Mr. Gremillion in which any issues were13 described with great urgency by your14 employees?15 A. Not that I can recall.

[121:16] - [121:25] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 12116 Q. The next paragraph says, quote,17 "Also, considering the importance and18 urgency to get the Zell/ESOP deal closed and19 hit our financial goals in the next20 18 months, I thought the agenda detour we21 took on those points was time well spent.22 If we don't get that right, we won't need a23 new vision/mission for Tribune," end quote.24 Do you see that?25 A. I see that.

[122:2] - [122:10] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1222 Q. Do you have any understanding of3 what Mr. Gremillion was referring to about4 the financial goals in the next 18 months?5 A. No.6 Q. Do you have any understanding of7 what he meant when he said, "If we don't get8 that right, we won't need a new9 vision/mission for Tribune"?10 A. No.

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page 12224 Q. Do you recall, having seen this25 E-mail now and having been asked about it,page 1231 K. WALTZ2 whether you were at any of the meetings that3 were discussed in this E-mail?4 A. I recall an off-site meeting5 with the facilitator I told you about, and I6 can recall transformative change was7 discussed, but I don't recall any specific8 meetings that just centered around9 transformational change.10 Q. Do you remember when the11 off-site meeting took place?12 A. No.13 Q. Do you remember whether any of14 the financial goals for the next 18 months15 were discussed?16 A. No, and I didn't -- I don't17 recall that as being part of transformative18 change. I thought transformative change was19 more highest streamline of business and20 doing things differently. But I didn't21 recall transformative change as having22 anything to do with the budgeting or23 financials at all.24 Q. Do you recall what it referred25 to in particular, any examples of anypage 1241 K. WALTZ2 transformative changes that were discussed?3 A. Again, it would be primarily4 just how we went about our jobs and a5 strategic planning initiative, reacting to6 whatever the business issues would be, and7 how we would go about as a team addressing8 those.9 Q. Was there any discussion about10 whether the newspaper industry as a whole11 was undergoing transformative change in the12 sense that newspaper was becoming less and13 less important as a medium as compared to14 online sources of information?15 A. No.16 Q. Do you believe that the17 newspaper industry currently is undergoing18 transformative change in that respect?19 A. I believe it is undergoing20 change, absolutely. I believe it is going21 through an evolution, absolutely, as more

[124:21] - [124:22] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 12421 through an evolution, absolutely, as more22 readers and advertisers move online.

[125:3] - [125:23] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1253 Q. Let me show you now a document I4 would like to mark as Waltz Exhibit 10.5 This has Production Numbers TRB12474786 through 7479. It's a series of E-mails.7 (Whereupon, the document Bates8 stamped TRB1247478 through 1247479 was9 marked as Exhibit Waltz-10 for10 identification as of this date by the

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• Deposition Designation11 Reporter.)12 Q. I would like you to look at the13 last E-mail on the last page of Exhibit 10.14 That's an E-mail that's addressed to you as15 opposed to the other ones which are not.16 This E-mail is entitled -- the17 subject line is, "We need cash..., and it18 was from Mr. Gremillion to yourself and19 several other people, dated June 12, 2007.20 Also labeled "Confidential - please do not21 forward."22 Do you see that E-mail?23 A. Yes, I see it.

[126:21] - [127:4] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 12621 Q. Having reread -- read this22 message, do you recall now having received23 it?24 A. I don't recall it, but I25 understand it.page 1271 K. WALTZ2 Q. You have no reason to think you3 didn't receive it?4 A. No reason.

[127:5] - [130:17] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1275 Q. Mr. Gremillion states in the6 E-mail, quote, "As you know, ad revenue7 trends are not improving fast enough. If we8 don't do something to turn this around - at9 least somewhat - the Zell/ESOP transaction10 could be in jeopardy," unquote.11 Do you see that reference?12 A. Yes.13 Q. Do you have any idea what14 Mr. Gremillion is referring to?15 MR. MILES: Object to form.16 Foundation.17 A. No, I don't. It is something18 about transformational change, I imagine.19 Well, I don't know that. I don't know. It20 only has gone to the people in T-6. This21 did not go to the whole publishing group.22 Q. Just let me make -- understand23 who it actually went to. Who is Vito --24 A. Vito Kahifa --25 Q. Yes.page 1281 K. WALTZ2 A. -- was the general manager in3 Orlando.4 Q. And who is Timothy Kennedy?5 A. He was the publisher in6 Allentown, Pennsylvania.7 Q. Steve Carver?8 A. Publisher, Hartford Courant.9 Q. Digby Solomon?10 A. Publisher Newport News, Daily11 Press.12 Q. And Howard Greenberg?13 A. Publisher -- no, I don't think14 he was the publisher -- yes, I guess he was15 publisher then, of Fort Lauderdale16 Sun-Sentinel.17 Q. Finally, who is Tim Ryan?18 A. Tim Ryan was publisher in

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• Deposition Designation19 Baltimore.20 Q. So those people, including21 yourself, received Mr. Gremillion's we need22 cash E-mail, right?23 A. Right. Remember I told you the24 T-6 reported to Bobby. So these were his25 business units.page 1291 K. WALTZ2 Q. There were cc's sent, to Ken3 De Paola. Who was that?4 A. Ken De Paola was a sales manager5 out of Chicago who would work on advertising6 sales across the group.7 Q. Who was Doug Thomas?8 A. I don't remember what Doug did.9 I don't know. Might be circulation. I10 don't know.11 Q. Leaving aside this particular12 E-mail, did you have conversations with Bob13 Gremillion about ad revenue trends not14 improving fast enough during the period15 around June of 2007?16 A. Not that I recall.17 Q. Did you have any discussions18 with Mr. Gremillion about the Zell/ESOP19 transaction potentially being in jeopardy?20 A. Not that I recall.21 Q. Did you understand that the --22 for the Zell/ESOP transaction to close its23 second step, there had to be a solvency24 opinion for the Tribune?25 A. Yes, I did know that.page 1301 K. WALTZ2 Q. And did you have discussions3 about, with Mr. Gremillion or others in4 Chicago, about whether if advertising5 revenues didn't improve, Tribune could be6 deemed insolvent?7 A. I don't recall that.8 Q. Do you recall any discussions9 about Tribune's solvency with anyone in10 Chicago?11 A. Just that this firm VRC was12 going to render an opinion.13 Q. And was there any discussion14 with people in Chicago about how, if the15 advertising revenues didn't improve, VRC16 might not issue a solvency opinion?17 A. No, I don't remember that.

[131:8] - [131:22] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1318 Q. Do you recall whether there were9 any steps taken to improve ad revenues at10 the Orlando Sentinel in June 2007?11 A. Yes. If we were missing a plan,12 we would have taken initiatives to improve.13 Q. Leaving aside what would have14 been done, do you recall what, if anything,15 was actually done?16 A. I don't recall any specific17 initiatives, no.18 MR. LACK: I would like to mark19 as Waltz Exhibit 11 for identification20 an E-mail with Production Numbers21 TRB472080 through '081 as a series of22 E-mails from August 2007.

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page 13220 Q. Before I ask about the specifics21 in this E-mail, let me just get clear a22 couple of abbreviations that are used here.23 OCF is what?24 A. Operating cash flow.25 Q. And BU is what?page 1331 K. WALTZ2 A. Business unit.3 Q. Okay. Now, let's start with the4 bottom of the first page of Exhibit 11, the5 E-mail from Mr. Gremillion to a number of6 people, including yourself, entitled "Your7 latest projection."8 And it says, in part, quote,9 "Since things are getting so tight, as we10 approach the closing of the Zell deal, we11 are scrutinizing BU projections more than12 ever. I will need each publisher to include13 your rationale (your words, please) for why14 you are changing your OCF projection (due15 next Tuesday, August 14th) up or down from16 last month's (if your projection won't17 change at all, this is not necessary.) A18 short narrative will suffice," end quote.19 This is sent on August 10th,20 2007. Do you see that E-mail?21 A. Yes.

[133:22] - [134:12] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 13322 Q. Now, do you recall receiving23 this E-mail?24 A. Not specifically, no.25 Q. Do you recall being asked bypage 1341 K. WALTZ2 Mr. Gremillion to include a rationale for3 any changes in projections?4 A. I don't recall.5 Q. Do you recall giving6 Mr. Gremillion projections, revised7 projections on a week-by-week basis?8 A. No.9 Q. Do you recall there being any10 pressure on yourself or anyone else not to11 lower projected revenues?12 A. No.

[134:21] - [135:2] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 13421 Q. And actually, the full thing22 says, quote, "The projection you will23 receive tomorrow will be slightly better24 than the projection you received last week,25 not the projection from last month," endpage 1351 K. WALTZ2 quote.

[135:3] - [135:19] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1353 Does this refresh your4 recollection that you provided a projection5 to Mr. Gremillion in the first week of

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• Deposition Designation6 August 2007?7 A. This is my E-mail. I don't8 recall specifically doing that. But that's9 what it indicates.10 Q. This indicates that you gave him11 a projection in the first week in August and12 then you gave him another projection in the13 second week of August?14 A. You know, I wrote it, but it is15 not very well worded. So it says that I16 gave him one last week and he wanted another17 one. I don't know what I meant by not the18 projection from last month.19 Q. Well, let's turn to the second

[136:10] - [137:10] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 13610 Q. So do you recall, in light of11 that, that you had given him a projection12 from week to week where he wanted one from13 month to month?14 A. I don't know that. I think I15 was just -- obviously, I misunderstood16 something that he was asking me.17 Q. But you thought he was asking,18 based on your prior E-mail, how this week19 was compared to last, but he was asking for20 what, how this month compared to last? Is21 that so?22 A. Right. I think he was asking23 month over month, and I thought he was24 asking week over week.25 Q. So in the E-mail that's at thepage 1371 K. WALTZ2 top of Page 472081 -- I'm sorry.3 In the E-mail that's at the top4 of the page TRB472081, you respond to5 Mr. Gremillion's request for your change in6 month-to-month projections; is that right?7 A. Yes.8 Q. You send him an E-mail on9 August 14, 2007?10 A. Yes.

[137:11] - [138:13] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 13711 Q. Can you read that E-mail out12 loud?13 A. "BG, sorry about that. Last14 month's projection was built on the premise15 that we would start to see improvement in16 the advertising for the remainder of the17 year. Particularly real estate would at the18 very least have better comps. But real19 estate has continued to tank, with this week20 being 49 percent below the same week a year21 ago.22 "Real estate and help wanted23 continue to be lethargic with nothing to24 give us optimism, given job creation and the25 housing glut. We reported in today's paperpage 1381 K. WALTZ2 that existing home sales fell 42.6 percent3 from a year ago. That tracks very closely4 to our revenue decline. It will improve, of5 course, but maybe not until '09.6 "We expect national to level off

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• Deposition Designation7 and a slight increase in retail. So the8 projection headed to Chicago later today9 will be approximately five million down in10 OCF, 6.5 in revenue. You will have the11 exact numbers shortly.12 "Hope this better answers your13 question. KMW."

[138:14] - [139:13] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 13814 Q. Now, the statement that you just15 read, that reflected your view at the time16 on August 14, 2007; is that right?17 A. Yes.18 Q. And would you characterize this19 as a pessimistic outlook?20 MR. DOUGHERTY: Object to the21 form.22 A. Well, I would characterize it as23 being realistic. Remember, again, we were24 coming off of '05/'06, which were the record25 years. So I would characterize this aspage 1391 K. WALTZ2 being realistic.3 Q. But this was realistically down4 substantially from what it was a year ago;5 is that right?6 MR. DOUGHERTY: Object to the7 form.8 A. It is down. It says9 specifically how much it was down, and why10 we thought it was down.11 Q. Right. And this week was down12 49 percent below the same week a year ago?13 A. In real estate, yes.

[140:4] - [140:23] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1404 A. Right.5 Q. And you said, quote, "that6 tracks very closely to our revenue decline,"7 end quote. Right?8 A. Right.9 Q. That's just -- the revenue10 decline was down by approximately 4011 percent?12 MR. DOUGHERTY: Object to form.13 A. I don't know about that. But14 what I think I meant by that, there was a15 correlation between housing starts and real16 estate ads and unemployment rates and job17 ads. I think that's what I was trying to18 say there.19 Q. At this time, the economy in the20 Orlando area was having serious21 difficulties; isn't that true?22 MR. DOUGHERTY: Objection to23 form. Foundation.

[140:24] - [142:5] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 14024 Q. How would you describe the25 economy in Orlando, in the Orlandopage 1411 K. WALTZ2 Sentinel's distribution area, at the time

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• Deposition Designation3 you wrote this E-mail?4 A. Well, we were clearly having5 issues in real estate and help wanted, which6 as I say tracks to other economic indicators7 like unemployment rates and housing starts.8 I was still, and am, optimistic about the9 economy in Orlando for other reasons besides10 help wanted ads and real estate ads. At the11 time UCF, the University of Central Florida,12 had received permission to build a medical13 school. The Orlando Magic was building a14 new arena. There was a performing arts15 center which has not yet come out of the16 ground but was on the books. The Burnham17 Institute for Molecular Science was18 relocating scientists from La Jolla to19 Orlando.20 So we felt that was going to21 help diversify the market. I mean, you22 know, I think there are a lot of good things23 happening in Orlando. I think this was a --24 you know, a cycle. That's why I say it will25 improve, of course, but maybe not until '09.page 1421 K. WALTZ2 Q. Right. So you didn't, at the3 time you wrote this, expect there would be4 an improvement in 2008?5 A. I said maybe not until '09.

[142:6] - [142:23] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1426 Q. And the various projects that7 you mentioned in your previous answer,8 including the one with the Orlando Magic,9 was that scheduled to come on live in 2007?10 A. No. It is already up.11 Q. But when did it come -- when did12 it start operations?13 A. I don't remember, because I have14 been gone for a while now. But it's been15 open at least a year, maybe more.16 Q. So you don't recall if it was17 opened in 2008?18 A. No, I don't recall that.19 Q. About a year would be 2010,20 right?21 A. Yes.22 Q. So you wouldn't label the E-mail23 you wrote to Mr. Gremillion as pessimistic?

[143:2] - [143:12] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1432 A. I think it was being realistic.3 Q. But you could be a realist and4 also a pessimist, can't you?5 A. I don't know.6 Q. That's a serious question,7 Miss Waltz.8 A. I don't know. Can one be9 pessimistic and realistic? I don't know.10 Q. Well, but my question is, to be11 more specific, wasn't that what you were12 being in this E-mail?

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• Deposition Designation16 A. I think what I was doing in this17 E-mail was trying to specifically fulfill18 Bobby's request to, in my own words, tell19 him why I was changing my projection.20 Q. Now, the projection was changed21 by revising operating cash flow down22 $5 million, right?23 A. Yes.

[146:4] - [149:8] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1464 Q. So based on April's OCF5 $4 million, the 5 million is roughly a6 month's worth of operating cash flow being7 reduced from the projections?8 A. Based on April, yes, that's9 true. I would just say that a month is not10 a month is not a month. Because the bigger11 months are December with holiday ads,12 November. April is not particularly the13 biggest month.14 Q. Is April the smallest month?15 A. No. I think January is the16 smallest month.17 Q. So April would be roughly the18 middle of the two extremes?19 A. I don't know. But it would20 certainly not be -- certainly not be the21 biggest. But I would have to look at all of22 them, but --23 Q. Now, what response, if any, did24 you get from Mr. Gremillion when you sent to25 Chicago the projection that was downpage 1471 K. WALTZ2 approximately $5 million in OCF?3 A. I don't remember. I don't4 remember his response.5 Q. Do you know whether that6 projection that you gave was reflected in7 any document that you subsequently saw from8 the Chicago headquarters?9 A. I don't know.10 Q. Did there come a time when you11 were asked to meet with people from12 Valuation Research Corporation or VRC?13 A. Yes. I was part of a large14 group that met with them.15 Q. Approximately when did you meet16 with them?17 A. Well, it would have been18 sometime in '07.19 Q. September 20, 2007; does that20 sound approximately right?21 A. Sure.22 Q. Can you tell me what, if23 anything, and there are not that many24 documents on this, so I will ask you first,25 what, if anything, you recall about thepage 1481 K. WALTZ2 meeting you participated in with VRC.3 A. As I recall that meeting, they4 were like -- it was like all the other5 meetings in Chicago, when we would talk to6 people who were interested in the7 transaction. The bankers, et cetera. And I8 would talk about the Orlando market and9 maybe mention Allentown and Newport News.10 But primarily the focus of the meeting was

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• Deposition Designation11 on the larger business units.12 Q. Were you in attendance at the13 entire meeting?14 A. As far as I recall. I don't15 know.16 Q. Do you remember how long it17 lasted, the entire meeting?18 A. These were typically two and a19 half hours. In and out the same day.20 Q. How long was your portion of the21 presentation?22 A. Typically I would say it was no23 longer than five or seven minutes.24 Q. Do you recall generally what you25 told VRC about the Orlando market?page 1491 K. WALTZ2 A. I told them that it was a growth3 market, that it had been growing in the4 population sense, I want to say it was5 something like three percent a year, and6 that Orlando was working to diversify its7 economy, and likely gave a few of the8 examples like I just gave you.

[153:14] - [154:14] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 15314 Q. Now, do you recall that in15 connection with the meeting with VRC, that16 you provided updated projections to Chicago17 headquarters?18 A. I know we did updated19 projections. I don't recall it being linked20 to any particular meeting.21 Q. Do you recall the E-mail I asked22 you about before, you sent to Mr. Gremillion23 on August 14th, about the month-to-month24 change?25 A. Right.page 1541 K. WALTZ2 Q. That followed this E-mail which3 talked about VRC.4 A. Okay.5 Q. Does that refresh your6 recollection at all that Mr. Gremillion was7 seeking your revised projections in order to8 provide updated information to VRC?9 MR. DOUGHERTY: Object to the10 form.11 A. I don't know, because we got12 this request from Harry. So I don't know if13 what Bobby was asking me for was the same14 thing at the same time.

[153:14] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 15314 Q. Now, do you recall that in

[155:6] - [156:10] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1556 Q. My question is, do you recall7 what the standard assumptions were that were8 built into the model?9 A. No.10 Q. Do you recall whether you agreed11 with or disagreed with any of the

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• Deposition Designation12 assumptions that were in the model that you13 were asked to use?14 A. Don't know.15 Q. The second bullet point says,16 quote, "We will ask that you make any17 adjustments to the model that are unique to18 your business unit."19 Do you see that?20 A. Yes.21 Q. Do you recall making any22 adjustments to the model unique to the23 Florida Sentinel -- the Orlando Sentinel?24 A. He references classifieds in25 Florida, so we likely talked about realpage 1561 K. WALTZ2 estate advertising maybe.3 Q. Do you recall making any4 adjustments or changes to the model?5 A. No.6 MR. DOUGHERTY: No, you don't7 recall, or no, you didn't make any8 changes?9 THE WITNESS: No, I don't10 recall.

[156:11] - [156:23] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 15611 Q. If you turn to the first page of12 the exhibit, Exhibit 12, towards the bottom13 of the page, Harry Amsden sends an E-mail on14 August 2, 2007, to you and others, entitled15 "Updating five-year financial model."16 And he states, quote, "One17 additional point on this is to make sure18 that these updated forecasts fully reflect19 progress on strategies within the context of20 transformative change," end quote.21 Do you have any understanding of22 what Mr. Amsden meant by that?23 A. No, I don't.

[156:24] - [157:7] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 15624 Q. Were the strategies within the25 context of transformative change supposed topage 1571 K. WALTZ2 have positive financial benefits to Tribune?3 A. I don't recall what they were,4 other than just new ways of doing things as5 a strategic plan. I cannot think of6 specific initiatives that were labeled7 transformative change.

[157:17] - [158:8] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 15717 Q. I mean, do you understand18 Mr. Amsden to be saying in this E-mail that19 he wants people who are providing forecasts20 to make sure that they reflect positive21 economic developments that were intended to22 result from this transformative change23 program?24 A. No. It sounds to me like if you25 had one of these strategies going on in yourpage 158

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• Deposition Designation1 K. WALTZ2 business unit, to include it.3 Q. So you don't understand the word4 "forecast" to reflect his request that5 people build in positive developments on the6 strategies into the forecast for future7 years?8 A. No.

[159:23] - [160:4] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 15923 My question is, did Mr. Amsden24 ever tell you in any form, orally or E-mail25 or otherwise, that, quote, "we need to sellpage 1601 K. WALTZ2 this hard," unquote, referring to the3 transformative change issues?4 A. No, not that I recall.

[164:24] - [165:21] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 16424 Q. Do you recall any discussion of25 why there were no upside and downsidepage 1651 K. WALTZ2 scenarios at the meeting with VRC?3 A. I don't know. I don't know if4 there were or weren't.5 Q. Do you recall that -- any6 discussion about the attendance, number of7 bankers that ultimately were expected to8 attend the banker meeting?9 A. No, I don't.10 Q. Do you recall any discussion11 about the level of detail of the questions12 asked by the bankers and how it compared to13 the level of detail of questions asked by14 VRC?15 A. I am sorry, I don't.16 MR. LACK: I would like to mark17 as Exhibit 15 a document with18 Production Numbers JPM203587 through19 590. It is entitled "Tribune Company20 Underwriters Due Diligence,21 October 1st, 2007."

[166:3] - [166:14] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1663 Q. Have you ever seen this document4 before?5 A. I don't recall it. It looks6 like an agenda for one of the group7 meetings.8 Q. Do you recall attending a9 meeting at the Gleacher Center of the10 University of Chicago on October 1st, 2007,11 with various bankers?12 A. Yes, I recall the meeting. I13 wouldn't have known the date, but I recall14 the meeting.

[169:6] - [170:2] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1696 Q. Leaving aside the date, let's7 talk about the meeting you remember

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• Deposition Designation8 attending. Did you attend all of the9 meeting or just a part of it?10 A. I don't know.11 Q. Do you recall being on a panel12 making a presentation with individuals named13 Hiller, Smith, Knight & Greenberg?14 A. I don't believe it was a panel.15 I believe we were just each allocated a16 number of minutes to talk about our markets.17 Q. How many minutes did you speak?18 A. Mine were typically shorter. I19 would say five to seven minutes.20 Q. Do you recall making a five- to21 seven-minute presentation to a group of22 bankers?23 A. I remember talking about24 Orlando. I don't know if it was exactly25 five to seven minutes, but that sounds rightpage 1701 K. WALTZ2 to me.

[170:3] - [170:12] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1703 Q. What do you recall saying to the4 bankers during your presentation?5 A. Talked about the Orlando market6 as a whole, the Orlando Sentinel in7 specific, and top-line revenue or8 circulation trends. Or anything they would9 have asked us.10 Q. Do you recall getting any11 questions during the presentation?12 A. I don't.

[172:11] - [172:25] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 17211 Q. Do you recall in connection with12 the bank meeting, there was a package of13 financial data that included a large number14 of spreadsheets which themselves reflected15 projections by the company?16 A. No. The handout that I am17 thinking of was like a single sheet on each18 of the business units.19 Q. And what did the single sheet20 say about the business units?21 A. I would only recall Orlando, and22 I think it was just our top-line revenue, I23 don't know over what period, and any other24 verbiage like highlights of your market or25 something like that.

[173:2] - [173:6] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1732 MR. LACK: Let me mark as3 Exhibit 17 for identification a4 document with Production Numbers5 CHAD125750 entitled "Orlando Sentinel6 2006 to 2012."

[173:21] - [174:10] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 17321 Q. First look at Exhibit 17. This22 is a spreadsheet which is devoted entirely23 to the Orlando Sentinel. Have you ever seen

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• Deposition Designation24 that before?25 A. I don't recall this one.page 1741 K. WALTZ2 Q. So this is not the single sheet3 on the Orlando Sentinel business unit that4 you referred to before?5 A. No. No. It wouldn't have this6 level of detail at all.7 Q. Was the single sheet you are8 referring to largely text as opposed to9 spreadsheets?10 A. Yes.

[174:11] - [175:2] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 17411 Q. Is the -- is the data that is12 shown on Exhibit 17 concerning the Orlando13 Sentinel including estimates for 200714 through 2012 information that you or one of15 your subordinates provided to Chicago16 management?17 MR. DOUGHERTY: Objection to18 form. Foundation.19 A. No. We didn't do anything out20 that far. Our estimates are pro forma. No.21 Q. How far into the future did the22 projections go that your subordinates23 provided to Chicago management?24 A. I think '07 into '08. I know we25 talked about '08, but I don't recall thesepage 1751 K. WALTZ2 at all.

[175:10] - [175:19] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 17510 Q. I will ask the question again.11 Do you recall being the source12 of any of the projection information -- any13 of the projections beyond 2008?14 A. No.15 Q. Do you have any information that16 any of your subordinates provided to Tribune17 management in Chicago any projections beyond18 2008?19 A. Not that I am aware of.

[176:4] - [176:19] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1764 Q. My question is whether you5 provided these figures for 2007 and 2008.6 Let me ask first about 2007. Did you7 provide the estimates for 2007 shown on this8 page?9 A. Yes, I believe so.10 Q. Did you provide the estimates11 for 2008?12 A. I think so. We would have13 called them something other than estimate,14 plan or that kind --15 Q. I'm sorry?16 A. I don't think I would have used17 the word "estimate."18 Q. What would you have said?19 A. Plan.

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• Deposition Designation[176:20] - [176:24] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibits

page 17620 Q. Do you see that on line five,21 entitled "interactive," in the last column,22 it shows a cumulative annualized growth rate23 from 2007 to 2012 of 16.6 percent?24 A. Yes.

[177:7] - [177:14] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1777 Q. Where does the number, the 16.68 percent cumulative annual growth rate for9 2007 to 2012 for Orlando Sentinel10 interactive come from?11 MR. DOUGHERTY: I still object12 to the form of that.13 A. I don't know where that number14 came from.

[178:4] - [178:12] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1784 Q. The growth rate -- the growth5 rate is based -- is it correct that the6 growth rate there is based on data, some of7 which you provided or your subordinates8 provided and some of which your subordinates9 did not provide?10 MR. MILES: Object to the form.11 A. Yes, I would say that is12 correct.

[181:4] - [181:12] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1814 Q. Did you ever receive any5 documents that contained the term "downside6 scenario," "upside scenario" or "base7 model"?8 MR. MILES: Objection.9 Timeframe.10 MR. LACK: During 2007.11 A. No, I don't. I don't remember12 any.

[183:20] - [185:16] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 18320 Q. Do you recall reducing your21 projections for 2007 from what they were22 previously in the year?23 A. Yes. I think we talked about24 that, right.25 Q. Let me just clarify this to makepage 1841 K. WALTZ2 clear. Do you recall the calendar year3 2007, leaving out -- do you recall reducing4 the projections for 2007 from what they were5 previously?6 A. Yes.7 Q. Under the plan?8 A. Yes.9 Q. Do you recall doing that in10 connection with the banker meeting or prior11 to the banker meeting?12 A. I don't know if it had anything13 to do with the banker meeting.14 Q. When do you recall making those

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• Deposition Designation15 reductions?16 A. I don't know. That's what you17 asked me before, and I don't specifically18 remember.19 Q. Do you recall that sometime20 during 2007, the projections were revised so21 that instead of 2008 being higher than 200722 in operating cash flow, it was now lower23 than 2007?24 A. Are you talking about Orlando --25 Q. Well, Orlando or the --page 1851 K. WALTZ2 A. -- or the overall?3 Q. -- overall.4 A. I don't remember that detail. I5 don't remember.6 Q. Do you remember any7 discussion -- were you involved in any8 discussion about the changes in the9 projections?10 MR. DOUGHERTY: For Orlando?11 Q. For either Orlando or corporate?12 A. I remember that we did new13 projections in '07 for Orlando. And I know14 that the publishing group did them. I did15 not participate in the publishing group-wide16 projections.

[188:8] - [190:23] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 1888 Q. We did see an E-mail that you9 wrote to Mr. Gremillion in August in10 which --11 A. Right.12 Q. -- you did revise --13 A. Yes.14 Q. -- some of the projections.15 A. That's right.16 Q. Do you recall whether there was17 anything other than that?18 A. No.19 Q. Going back for a second to that20 E-mail, I think that was 11. Excuse me for21 a second. The first page of 11, Exhibit 11,22 you say in your E-mail to Mr. Gremillion,23 "The projection you will receive tomorrow24 will be slightly better than the projection25 you received last week."page 1891 K. WALTZ2 Do you see that?3 A. Yes.4 Q. "Not the projection from last5 month."6 Does that suggest that this7 refers to at least three projections?8 A. I think the confusion here is9 that when I'm talking about the projections,10 the revised projections, that's a formal11 projection that we submit to Chicago. This,12 to me, when I say "compared to what you13 received last week," is more just like a14 conversation or an update, not a formal15 re-budgeting process.16 So did we talk about it more17 often than once a year? Certainly,18 absolutely. But I am saying that the --19 when I was referring to the re-projection20 that was done in '07, I am talking about

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• Deposition Designation21 actually going back and then re-changing --22 changing what the plan was. I am not23 talking about how did you do this week24 versus your plan.25 Q. So did you provide topage 1901 K. WALTZ2 Mr. Gremillion on several occasions, at3 least three occasions, revised projections4 for your business unit?5 A. I would have given him my6 projections, but I couldn't take it as far7 as to actually go back and do another whole8 formal planning process again.9 But, yes, I would give him10 information frequently.11 Q. Whether he used that to adjust12 the overall company's projections was not13 something you were involved with, right?14 A. That, I don't know.15 Q. But we see there are at least16 three instances where you gave that17 information. Do you recall approximately18 how many times you gave him information?19 A. I don't, but it would be a20 normal thing for us to talk about.21 Q. Would it be normally something22 in the monthly report?23 A. Yes, yes. Sure.

[199:12] - [200:7] 3/2/2011 Waltz, Kathleen Marie with Video and Exhibitspage 19912 Q. Miss Waltz, my name is David13 Miles. I'm with Sidley Austin, and we are14 counsel for the debtors in this proceeding.15 I just have two quick questions.16 One is you talked about, in the17 beginning, weekly phone calls and monthly18 written reports. Did the -- in the weekly19 meetings, did you cover all the same -- all20 the information that was in the monthly,21 written monthly reports, at the same level22 of detail as it was in the written monthly23 reports?24 A. No.25 Q. Did you discuss in the weeklypage 2001 K. WALTZ2 calls every subject that was in the written3 monthly reports?4 A. No.5 Q. Did you discuss in the weekly6 calls the same subjects every single week?7 A. No.

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