Hollinger International Inc. is a newspaper publisher whose assets include The Chicago Sun-Times and a large number of community newspapers in the Chicago area as well as in Canada. 

New York, NY, May 10, 2006 - Hollinger International Inc. (NYSE: HLR) today reported results for the first quarter, ended March 31, 2006. 
The Company reported a total operating loss of $24.3 million compared with an operating loss of $15.8 million for the 2005 first quarter. The Company reported a net loss per share of $0.13 and a loss per share from continuing operations of $0.29 compared with a loss per share of $0.20 and a loss per share from continuing operations of $0.23 in the year-ago first quarter. Net earnings for the quarter include a $14.7 million gain from the sale of the Company’s remaining Canadian operations. 

The change in consolidated operating income was driven by a $15.0 million decline in operating income at the Company’s Sun-Times New Group operating segment (“STNG”). This includes $9.3 million of separation costs recognized in the first quarter of 2006, primarily related to the previously announced 10% reduction of headcount associated with the reorganization of STNG. The remainder of the decline in STNG’s operating income resulted from lower advertising and circulation revenues, partially offset by lower newsprint, labor and other expenses. Operating expenses of the Investment and Corporate Group segment were $17.3 million in the first quarter, down $5.6 million from last year, driven by a $4.0 million decrease in spending related to the Special Committee investigation to $8.0 million this year, as well as lower wages and director and officer liability insurance premiums. 

Gordon A. Paris, Chairman and Chief Executive Officer, said, “Our disappointing results in the first quarter reflect the challenging advertising environment that our industry and, more specifically, our Chicago market are facing. The effects of these industry and regional economic trends were compounded by the disruption to our advertising sales force from an internal investigation, as well as our strategic reorganization. This strategic reorganization, which rationalizes and refocuses our operations, positions STNG for profitable growth by leveraging the full power of our media properties across the greater Chicago area, and by exploiting the range of new media alternatives available to us. The reorganization continues on track, and we expect to see benefits beginning in the second half of the year.” 

Total operating revenues for the quarter were $102.4 million compared with $109.4 million in the year-ago period. All of the Company’s revenues are generated by its STNG operating segment. 

Advertising revenues in the first quarter were $78.9 million, down $5.1 million, or 6% compared with the prior year period. The decline in advertising revenue reflects weak industry advertising trends in the retail and national categories, particularly auto and entertainment. In addition, the Chicago advertising market was weaker than the rest of the country in retail, real estate and recruitment categories. STNG’s total advertising revenue fell more than the market largely due to category mix, temporary impacts of an internal sales investigation previously disclosed, and temporary disruption from the strategic reorganization of the STNG sales force. 

Circulation revenues in the first quarter were down 7.5% compared with the similar period a year ago. The $1.7 million decline reflects lower single-copy sales, intensified competitive discounting of home subscription rates, and the elimination of unprofitable bartered bulk programs.