e10vq
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
For the quarterly period ended: June 30, 2007
OR
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o |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
Commission File No. 1-8598
Belo Corp.
(Exact name of registrant as specified in its charter)
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Delaware
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75-0135890 |
(State or other jurisdiction of
incorporation or organization)
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(I.R.S. employer
identification no.) |
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P. O. Box 655237 |
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Dallas, Texas
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75265-5237 |
(Address of principal executive offices)
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(Zip code) |
Registrants telephone number, including area code: (214) 977-6606
Former name, former address and former fiscal year, if changed since last report.
None
Indicate by check mark whether registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer or a non-accelerated filer. See definition of accelerated filer and large accelerated
filer in Rule 12b-2 of the Exchange Act. (Check one)
Large Accelerated Filer
þ |
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Accelerated Filter o |
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Non-Accelerated Filter o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act).
Yes o No þ
Indicate the number of shares outstanding of each of the issuers classes of common stock, as
of the latest practicable date.
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Class |
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Outstanding at June 30, 2007 |
Common Stock, $1.67 par value |
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102,203,383* |
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* |
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Consisting of 87,941,349 shares of Series A Common Stock and 14,262,034 shares of
Series B Common Stock. |
BELO CORP.
FORM 10-Q
TABLE OF CONTENTS
PART I
Item 1. Financial Statements
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
Belo Corp. and Subsidiaries
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Three months ended |
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Six months ended |
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June 30, |
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June 30, |
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In thousands, except per share amounts (unaudited) |
2007 |
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2006 |
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2007 |
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2006 |
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Net Operating Revenues |
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$ |
390,505 |
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$ |
403,557 |
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$ |
744,560 |
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$ |
775,280 |
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Operating Costs and Expenses |
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Salaries, wages and employee benefits |
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138,538 |
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142,472 |
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278,915 |
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290,838 |
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Other production, distribution and operating costs |
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125,752 |
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123,596 |
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243,099 |
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235,426 |
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Newsprint, ink and other supplies |
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26,332 |
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34,227 |
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53,179 |
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70,905 |
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Depreciation |
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23,325 |
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22,272 |
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46,091 |
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44,088 |
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Amortization |
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1,625 |
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2,087 |
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3,691 |
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4,174 |
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Total operating costs and expenses |
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315,572 |
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324,654 |
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624,975 |
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645,431 |
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Earnings from operations |
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74,933 |
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78,903 |
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119,585 |
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129,849 |
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Other Income and Expense |
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Interest expense |
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(24,248 |
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(24,430 |
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(48,399 |
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(48,092 |
) |
Other income, net |
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3,245 |
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8,852 |
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8,613 |
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9,700 |
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Total other income and expense |
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(21,003 |
) |
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(15,578 |
) |
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(39,786 |
) |
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(38,392 |
) |
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Earnings |
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Earnings before income taxes |
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53,930 |
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63,325 |
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79,799 |
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91,457 |
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Income taxes |
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17,508 |
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20,666 |
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27,926 |
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31,498 |
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Net earnings |
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$ |
36,422 |
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$ |
42,659 |
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$ |
51,873 |
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$ |
59,959 |
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Net earnings per share |
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Basic |
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$ |
.36 |
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$ |
.41 |
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$ |
.51 |
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$ |
.57 |
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Diluted |
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$ |
.35 |
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$ |
.41 |
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$ |
.50 |
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$ |
.57 |
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Weighted average shares outstanding |
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Basic |
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102,222 |
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104,307 |
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102,246 |
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105,219 |
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Diluted |
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103,178 |
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104,474 |
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103,035 |
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105,523 |
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Dividends declared per share |
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$ |
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$ |
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$ |
.125 |
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$ |
.10 |
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See accompanying Notes to Consolidated Condensed Financial Statements.
1
CONSOLIDATED CONDENSED BALANCE SHEETS
Belo Corp. and Subsidiaries
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In thousands, except share and per share amounts |
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June 30, |
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December 31, |
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(Current year unaudited) |
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2007 |
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2006 |
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Assets |
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Current assets: |
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Cash and temporary cash investments |
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$ |
26,544 |
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$ |
46,291 |
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Accounts receivable, net |
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257,011 |
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276,825 |
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Other current assets |
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56,972 |
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61,047 |
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Total current assets |
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340,527 |
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384,163 |
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Property, plant and equipment, net |
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547,572 |
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560,494 |
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Intangible assets, net |
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1,337,193 |
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1,336,870 |
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Goodwill, net |
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1,237,898 |
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1,237,348 |
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Other assets |
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94,274 |
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95,403 |
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Total assets |
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$ |
3,557,464 |
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$ |
3,614,278 |
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Liabilities and Shareholders Equity |
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Current liabilities: |
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Accounts payable |
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$ |
47,330 |
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$ |
79,605 |
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Accrued expenses |
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92,212 |
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102,004 |
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Dividends payable |
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12,903 |
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Other current liabilities |
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59,695 |
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64,400 |
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Total current liabilities |
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199,237 |
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258,912 |
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Long-term debt |
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1,247,982 |
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1,283,434 |
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Deferred income taxes |
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432,466 |
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435,154 |
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Other liabilities |
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110,292 |
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109,630 |
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Shareholders equity: |
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Preferred stock, $1.00 par value. Authorized
5,000,000 shares; none issued. |
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Common stock, $1.67 par value. Authorized
450,000,000 shares |
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Series A: Issued 87,941,349 shares at June 30, 2007
and 87,706,833 shares at December 31, 2006 |
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146,862 |
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146,471 |
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Series B: Issued 14,262,034 shares at June 30, 2007
and 14,589,345 shares at December 31, 2006 |
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23,818 |
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24,364 |
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Additional paid-in capital |
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897,393 |
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886,501 |
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Retained earnings |
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537,033 |
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506,807 |
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Accumulated other comprehensive loss |
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(37,619 |
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(36,995 |
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Total shareholders equity |
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1,567,487 |
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1,527,148 |
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Total liabilities and shareholders equity |
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$ |
3,557,464 |
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$ |
3,614,278 |
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See accompanying Notes to Consolidated Condensed Financial Statements.
2
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Belo Corp. and Subsidiaries
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Six months ended June 30, |
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In thousands (unaudited) |
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2007 |
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2006 |
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Operations |
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Net earnings |
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$ |
51,873 |
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$ |
59,959 |
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Adjustments to reconcile net earnings
to net cash provided by operations: |
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Depreciation and amortization |
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49,782 |
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48,262 |
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Deferred income taxes |
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(3,813 |
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Share-based compensation |
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8,537 |
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8,330 |
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Other non-cash expenses |
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103 |
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5,913 |
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Equity in earnings from partnerships |
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(661 |
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(632 |
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Other, net |
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(1,400 |
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(5,499 |
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Net change in operating assets and liabilities: |
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Accounts receivable |
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19,795 |
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1,710 |
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Other current assets |
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1,106 |
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(2,101 |
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Accounts payable |
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(32,275 |
) |
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(31,700 |
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Accrued expenses and other current liabilities |
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(7,263 |
) |
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1,282 |
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Interest payable |
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(561 |
) |
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1,276 |
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Income taxes payable |
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(9,745 |
) |
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9,378 |
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Net cash provided by operations |
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79,291 |
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92,365 |
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Investments |
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Capital expenditures |
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(29,736 |
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(34,073 |
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Acquisition |
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(4,268 |
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Other investments |
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(4 |
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1,091 |
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Other, net |
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648 |
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537 |
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Net cash used for investments |
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(33,360 |
) |
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(32,445 |
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Financing |
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Net proceeds from revolving debt |
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661,827 |
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296,980 |
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Payments on revolving debt |
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(462,867 |
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(441,855 |
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Net proceeds from issuance of senior notes |
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248,903 |
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Redemption of senior notes |
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(234,477 |
) |
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Payment of dividends |
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(25,688 |
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(21,117 |
) |
Net proceeds from exercise of stock options |
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12,004 |
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4,677 |
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Purchase of treasury stock |
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(17,152 |
) |
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(103,054 |
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Excess tax benefit from option exercises |
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675 |
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296 |
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Net cash used for financing |
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(65,678 |
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(15,170 |
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Net increase(decrease) in cash and temporary cash investments |
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(19,747 |
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44,750 |
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Cash and temporary cash investments at beginning of period |
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46,291 |
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33,243 |
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Cash and temporary cash investments at end of period |
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$ |
26,544 |
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$ |
77,993 |
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Supplemental Disclosures |
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Interest paid, net of amounts capitalized |
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$ |
49,025 |
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$ |
46,805 |
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Income taxes paid, net of refunds |
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$ |
38,289 |
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$ |
23,507 |
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See accompanying Notes to Consolidated Condensed Financial Statements.
3
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Belo Corp. and Subsidiaries
(in thousands, except per share amounts)
(1) |
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The accompanying unaudited consolidated condensed financial statements of Belo Corp. and
subsidiaries (the Company or Belo) have been prepared in accordance with generally
accepted accounting principles for interim financial information and in accordance with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting principles for
complete financial statements. The balance sheet at December 31, 2006 has been derived from
the audited consolidated financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles for complete
financial statements. |
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In the opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating results for the
three and six-month periods ended June 30, 2007 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2007. For further
information, refer to the consolidated financial statements and footnotes thereto included
in the Companys Annual Report on Form 10-K for the year ended December 31, 2006. |
(2) |
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The following table sets forth the reconciliation between weighted average shares used
for calculating basic and diluted earnings per share for the three and six months ended
June 30, 2007 and 2006: |
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Three months ended |
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Six months ended |
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June 30, |
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June 30, |
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2007 |
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2006 |
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2007 |
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2006 |
|
Weighted average shares for basic earnings
per share |
|
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102,222 |
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|
104,307 |
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|
102,246 |
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|
105,219 |
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Effect of employee stock options and
restricted stock units |
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|
956 |
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|
167 |
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|
789 |
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|
304 |
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|
Weighted average shares for diluted earnings
per share |
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|
103,178 |
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|
104,474 |
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|
103,035 |
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|
105,523 |
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Options excluded due to exercise price in
excess of average market price |
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Number outstanding |
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|
7,231 |
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|
9,772 |
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|
7,490 |
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|
7,667 |
|
Weighted average exercise price |
|
$ |
24.76 |
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$ |
23.42 |
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$ |
24.60 |
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$ |
24.60 |
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Restricted stock units excluded due to
performance conditions not probable of
being achieved |
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Number outstanding |
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|
451 |
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|
|
186 |
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|
451 |
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|
186 |
|
Weighted average exercise price |
|
$ |
18.13 |
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$ |
21.62 |
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$ |
18.13 |
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$ |
21.62 |
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(3) |
|
On January 1, 2007, the Company adopted Financial Accounting Standards Board (FASB)
Interpretation (FIN) 48, Accounting for Uncertainty in Income Taxes. FIN 48, an
interpretation of Statement of Financial Accounting Standard (SFAS) 109, Accounting for
Income Taxes, clarifies the accounting and disclosure requirements for uncertainty in tax
positions as defined by the standard. In connection with the adoption of FIN 48, the
Company has analyzed its filing positions in all significant jurisdictions where it is
required to file income tax returns for the open tax years in such jurisdictions. The
Company has identified as major tax jurisdictions, as defined, its federal income tax return
and its state income tax returns in five states. The Companys federal income tax returns
for the years subsequent to December 31, 2002, remain subject to examination. The Companys
income tax returns in major state income tax jurisdictions remain subject to examination for
various periods subsequent to December 31, 2001. The Company currently believes that all
significant filing positions are highly certain and that, more likely than not, all of its
significant income tax filing positions and deductions would be sustained. Therefore, the
Company has no significant reserves for uncertain tax positions and no adjustments to such
reserves were required upon the adoption of FIN 48. If interest and penalties are assessed,
interest costs will be recognized in interest expense and penalties will be recognized in
operating expenses. |
4
|
|
In September 2006, the FASB issued SFAS 157, Fair Value Measurements. SFAS 157
establishes, among other items, a framework for fair value measurements in the financial
statements by providing a single definition of fair value, provides guidance on the
methods used to estimate fair value and increases disclosures about estimates of fair
value. The effective date of SFAS 157 for the Company is January 1, 2008. The Company is
evaluating the effect of the adoption of this standard. |
(4) |
|
Belo has a long-term incentive plan under which awards may be granted to employees and
outside directors in the form of non-qualified stock options, incentive stock options,
restricted shares, restricted stock units, performance shares, performance units or stock
appreciation rights, the basis of which is Belos long-term performance. In addition, options
may be accompanied by stock appreciation rights and limited stock appreciation rights. Rights
and limited rights may also be issued without accompanying options. Cash bonus awards are
also available under the plan. The Company believes that the long-term incentive plan better
aligns the interests of its employees with those of its shareholders. |
|
|
|
Share-based compensation cost was $4,112 and $3,722, for the three months ended June 30,
2007 and 2006, respectively, and $9,574 and $8,405, for the six months ended June 30, 2007
and 2006, respectively. The total income tax benefit recognized in equity for share-based
compensation arrangements was $665 for the three months ended June 30, 2007. There was no
income tax benefit recognized in the three months ended June 30, 2006. The total income tax
benefit recognized in equity for share-based compensation arrangements was $675 and $296,
for the six months ended June 30, 2007 and 2006, respectively. |
(5) |
|
The Company froze benefits under its defined benefit pension plan (Pension Plan) effective
March 31, 2007. As part of the curtailment of the Pension Plan, the Company announced that it
will provide transition benefits to affected employees, including the granting of five years
of additional credited service under the Pension Plan and supplemental contributions for a
period of up to five years to a defined contribution plan for the benefit of those employees
affected by these changes who remain with the Company. |
|
|
|
The net periodic pension (income) cost for the three and six months ended June 30, 2007
and 2006 includes the following components: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
June 30, |
|
June 30, |
|
|
2007 |
|
2006 |
|
2007 |
|
2006 |
|
Service cost
benefits earned during the period |
|
$ |
|
|
|
$ |
3,012 |
|
|
$ |
1,835 |
|
|
$ |
6,025 |
|
Interest cost on projected benefit obligation |
|
|
7,316 |
|
|
|
7,165 |
|
|
|
14,633 |
|
|
|
14,329 |
|
Expected return on assets |
|
|
(9,087 |
) |
|
|
(8,576 |
) |
|
|
(18,174 |
) |
|
|
(17,152 |
) |
Amortization of net loss |
|
|
480 |
|
|
|
1,720 |
|
|
|
959 |
|
|
|
3,439 |
|
Amortization of unrecognized prior service cost |
|
|
|
|
|
|
154 |
|
|
|
|
|
|
|
308 |
|
|
|
|
Net periodic pension (income) cost |
|
$ |
(1,291 |
) |
|
$ |
3,475 |
|
|
$ |
(747 |
) |
|
$ |
6,949 |
|
|
|
|
|
|
In the first six months of 2007, the Company did not make any contributions to its defined
benefit pension plan. The Company does not expect to make any contributions to the plan
during 2007. |
(6) |
|
For the three and six months ended June 30, 2007 and 2006, total comprehensive income was
comprised as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
June 30, |
|
June 30, |
|
|
2007 |
|
2006 |
|
2007 |
|
2006 |
|
Net earnings |
|
$ |
36,422 |
|
|
$ |
42,659 |
|
|
$ |
51,873 |
|
|
$ |
59,959 |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension benefit obligation adjustments, net of
taxes of $168 and $335, respectively |
|
|
(312 |
) |
|
|
|
|
|
|
(624 |
) |
|
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
(312 |
) |
|
|
|
|
|
|
(624 |
) |
|
|
|
|
|
|
|
Comprehensive income |
|
$ |
36,110 |
|
|
$ |
42,659 |
|
|
$ |
51,249 |
|
|
$ |
59,959 |
|
|
|
|
5
(7) |
|
Long-term debt consists of the following at June 30, 2007 and December 31, 2006: |
|
|
|
|
|
|
|
|
|
|
|
June 30, 2007 |
|
December 31, 2006 |
|
7-1/8% Senior Notes Due June 1, 2007 |
|
$ |
|
|
|
$ |
234,477 |
|
8% Senior Notes Due November 1, 2008 |
|
|
350,000 |
|
|
|
350,000 |
|
6-3/4% Senior Notes Due May 30, 2013 |
|
|
249,022 |
|
|
|
248,957 |
|
7-3/4% Senior Debentures Due June 1, 2027 |
|
|
200,000 |
|
|
|
200,000 |
|
7-1/4% Senior Debentures Due September 15, 2027 |
|
|
250,000 |
|
|
|
250,000 |
|
|
|
|
Total Fixed-rate debt |
|
|
1,049,022 |
|
|
|
1,283,434 |
|
Revolving credit agreement, including
short-term unsecured notes |
|
|
185,000 |
|
|
|
|
|
Uncommitted line of credit |
|
|
13,960 |
|
|
|
|
|
|
|
|
Total
Long-term |
|
$ |
1,247,982 |
|
|
$ |
1,283,434 |
|
|
|
On June 1, 2007, the Company repaid the remaining outstanding balance of the 7-1/8% Senior
Notes of $234,477 at their maturity using available cash balances and borrowings under the
Companys variable-rate revolving credit facility and its uncommitted lines of credit. |
(8) |
|
Belo operates its business in two primary reporting segments, the Television Group and the
Newspaper Group. For the Television Group, Belos operating segments are defined as its
television stations and cable news channels within a given market. These operating segments
are aggregated into the Television Group. For the Newspaper Group, Belos operating segments
are defined as its newspapers within a given market. These operating segments are aggregated
into the Newspaper Group. Belos various operating segments share content at no cost. |
|
|
|
Management uses segment EBITDA as the primary measure of profitability to evaluate
operating performance and to allocate capital resources and bonuses to eligible operating
company employees. Segment EBITDA represents a segments earnings before interest expense,
income taxes, depreciation and amortization. Other income (expense), net is not allocated
to the Companys operating segments because it consists primarily of equity earnings
(losses) from investments in partnerships and joint ventures and other non-operating income
(expense). |
|
|
|
Net operating revenues and segment EBITDA by segment, along with a reconciliation of total
segment EBITDA to net earnings, for the three and six months ended June 30, 2007 and 2006
are shown below. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Six months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2007 |
|
|
2006 |
|
|
2007 |
|
|
2006 |
|
|
Net Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Television Group |
|
$ |
198,229 |
|
|
$ |
193,326 |
|
|
$ |
376,571 |
|
|
$ |
368,018 |
|
Newspaper Group |
|
|
192,276 |
|
|
|
210,231 |
|
|
|
367,989 |
|
|
|
407,262 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net operating revenues |
|
$ |
390,505 |
|
|
$ |
403,557 |
|
|
$ |
744,560 |
|
|
$ |
775,280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Television Group |
|
$ |
82,275 |
|
|
$ |
83,511 |
|
|
$ |
148,750 |
|
|
$ |
150,158 |
|
Newspaper Group |
|
|
42,542 |
|
|
|
45,239 |
|
|
|
67,208 |
|
|
|
72,815 |
|
Corporate |
|
|
(24,934 |
) |
|
|
(25,488 |
) |
|
|
(46,591 |
) |
|
|
(44,862 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment EBITDA |
|
$ |
99,883 |
|
|
$ |
103,262 |
|
|
$ |
169,367 |
|
|
$ |
178,111 |
|
Other income, net |
|
|
3,245 |
|
|
|
8,852 |
|
|
|
8,613 |
|
|
|
9,700 |
|
Depreciation and amortization |
|
|
(24,950 |
) |
|
|
(24,359 |
) |
|
|
(49,782 |
) |
|
|
(48,262 |
) |
Interest expense |
|
|
(24,248 |
) |
|
|
(24,430 |
) |
|
|
(48,399 |
) |
|
|
(48,092 |
) |
Income taxes |
|
|
(17,508 |
) |
|
|
(20,666 |
) |
|
|
(27,926 |
) |
|
|
(31,498 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
36,422 |
|
|
$ |
42,659 |
|
|
$ |
51,873 |
|
|
$ |
59,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9) |
|
On August 23, 2004, August 26, 2004 and October 5, 2004, respectively, three related lawsuits
were filed by purported shareholders of the Company in the United States District Court for
the Northern District of |
6
|
|
Texas against the Company, Robert W. Decherd and Barry Peckham. The complaints arise out of
the circulation overstatement at The Dallas Morning News announced by the Company in 2004,
alleging that the overstatement artificially inflated Belos financial results and thereby
injured investors. The plaintiffs seek to represent a purported class of shareholders who
purchased Belo common stock between May 12, 2003 and August 6, 2004. The complaints allege
violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. On October
18, 2004, the court ordered the consolidation of all cases arising out of the same facts and
presenting the same claims, and on February 7, 2005, plaintiffs filed an amended,
consolidated complaint adding as defendants John L. Sander, Dunia A. Shive, Dennis A.
Williamson and James M. Moroney III. On May 18, 2007, the court partially granted
defendants motions to dismiss plaintiffs second amended complaint to the extent it
dismissed plaintiffs complaint as to defendants John L. Sander, Dunia A. Shive and Dennis
A. Williamson. The motions to dismiss were denied as to the other defendants. No class or
classes have been certified and no amount of damages has been specified. The Company
believes the complaints are without merit and intends to vigorously defend against them. |
|
|
|
On June 3, 2005, a shareholder derivative lawsuit was filed by a purported individual
shareholder of the Company in the 191st Judicial District Court of Dallas County,
Texas, against Robert W. Decherd, Dennis A. Williamson, Dunia A. Shive and John L. Sander,
all of whom are current or retired executive officers of the Company; James M. Moroney III,
an executive officer of The Dallas Morning News; Barry Peckham, a former executive officer
of The Dallas Morning News; and Louis E. Caldera, Judith L. Craven, Stephen Hamblett, Dealey
D. Herndon, Wayne R. Sanders, France A. Córdova, Laurence E. Hirsch, J. McDonald Williams,
Henry P. Becton, Jr., Roger A. Enrico, William T. Solomon, Lloyd D. Ward, M. Anne Szostak
and Arturo Madrid, current or former directors of the Company. The lawsuit makes various
claims asserting mismanagement and breach of fiduciary duty related to the circulation
overstatement at The Dallas Morning News. On May 30, 2007, after a prior discovery stay
ended, the court issued an order administratively closing the case. Under the courts
order, the case is stayed and, as a result, no further action can be taken in the proceeding
unless the case is reinstated. The court retained jurisdiction and the case is subject to
being reinstated by the court or upon motion by any party. The courts order was not a
dismissal with prejudice. |
|
|
|
In 2004, the staff of the Securities and Exchange Commission (the SEC) notified the
Company that the staff was conducting a newspaper industry-wide inquiry into circulation
practices, and inquired specifically about The Dallas Morning News circulation
overstatement. The Company has briefed the SEC on The Dallas Morning News circulation
situation and related matters. The information voluntarily provided to the SEC relates to
The Dallas Morning News, as well as The Providence Journal and The Press-Enterprise. The
Company will continue to respond to additional requests for information that the SEC may
have. |
|
|
|
A number of other legal proceedings are pending against the Company, including several
actions for alleged libel and/or defamation. In the opinion of management, liabilities, if
any, arising from these other legal proceedings would not have a material adverse effect on
the results of operations, liquidity or financial position of the Company. |
|
(10) |
|
In December 2005, the Company entered into a construction contract with Austin Commercial,
L.P. relating to the new Dallas Morning News distribution and production center in southern
Dallas. The contract provides for total payments of approximately $16,055, of which
approximately $104 and $2,859 was paid during the three months ended June 30, 2007, and 2006,
respectively and approximately $2,277 and $3,501 was paid during the six months ended June 30,
2007 and 2006, respectively. Approximately $15,994 has been paid since the inception of the
contract. At June 30, 2007, there was a balance due of approximately $61. Bill Solomon, a
member of Belos Board of Directors, is Chairman of Austin Industries, Inc., the parent
company of Austin Commercial, L.P. |
7
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(dollars in thousands, except per share amounts)
The following information should be read in conjunction with the Companys Consolidated
Condensed Financial Statements and related Notes filed as part of this report.
Overview
Belo Corp. (Belo or the Company), a Delaware corporation, began as a Texas newspaper
company in 1842 and today is one of the nations largest media companies with a diversified group
of market-leading television broadcasting, newspaper publishing, cable news and interactive media
operations. A Fortune 1000 company with approximately $1.6 billion in revenues for the year ended
December 31, 2006, Belo operates news and information franchises in some of Americas most dynamic
markets and regions. The Company owns 20 television stations (six in the top 15 U.S. markets) that
reach 14 percent of U.S. television households, and manages one television station through a local
marketing agreement (LMA). In addition, Belo owns two regional and two local cable news channels
and holds ownership interests in two others. Belos daily newspapers are The Dallas Morning News,
The Providence Journal, The Press-Enterprise (Riverside, CA) and the Denton Record-Chronicle
(Denton, TX). Belo operates more than 30 Web sites, participates in several interactive alliances
and offers a broad range of Internet-based products.
Belo operates its business in two primary reporting segments, the Television Group and the
Newspaper Group. The Television Group consists of the Companys 20 television stations, one
station operated under an LMA and four cable news channels, along with its ownership interests in
two other cable news channels. The Newspaper Group consists of the Companys four daily
newspapers, various niche publications in the same markets and Belos commercial printing
businesses. Both segments operate within the United States and compete against similar and other
types of media on a local, regional and national basis.
The following tables set forth the Companys major media assets by segment as of June 30, 2007:
Television Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
Station |
|
|
|
|
|
|
|
|
|
|
Belo |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
Station |
|
Audience |
|
|
Market |
|
Station/ |
|
Acquired |
|
Network |
|
Analog |
|
Digital |
|
Stations in |
|
Rank in |
|
Share in |
Market |
|
Rank(1) |
|
News Channel |
|
/ Started |
|
Affiliation |
|
Channel |
|
Channel |
|
Market(2) |
|
Market(3) |
|
Market(4) |
|
Dallas/Fort Worth |
|
|
6 |
|
|
WFAA |
|
|
1950 |
|
|
ABC |
|
|
8 |
|
|
|
8.1 |
|
|
|
16 |
|
|
|
1 |
|
|
|
12 |
|
Dallas/Fort Worth |
|
|
6 |
|
|
TXCN |
|
|
1999 |
|
|
IND |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
Houston |
|
|
10 |
|
|
KHOU |
|
|
1984 |
|
|
CBS |
|
|
11 |
|
|
|
11.1 |
|
|
|
15 |
|
|
|
1 |
* |
|
|
11 |
|
Phoenix |
|
|
13 |
|
|
KTVK |
|
|
1999 |
|
|
IND |
|
|
3 |
|
|
|
3.1 |
|
|
|
13 |
|
|
|
1 |
* |
|
|
6 |
|
Phoenix |
|
|
13 |
|
|
KASW |
|
|
2000 |
|
|
CW |
|
|
61 |
|
|
|
61.1 |
|
|
|
13 |
|
|
|
7 |
* |
|
|
3 |
|
Seattle/Tacoma |
|
|
14 |
|
|
KING |
|
|
1997 |
|
|
NBC |
|
|
5 |
|
|
|
5.1 |
|
|
|
13 |
|
|
|
1 |
* |
|
|
12 |
|
Seattle/Tacoma |
|
|
14 |
|
|
KONG |
|
|
2000 |
|
|
IND |
|
|
16 |
|
|
|
16.1 |
|
|
|
13 |
|
|
|
5 |
* |
|
|
2 |
|
Seattle/Tacoma |
|
|
14 |
|
|
NWCN |
|
|
1997 |
|
|
IND |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
St. Louis |
|
|
21 |
|
|
KMOV |
|
|
1997 |
|
|
CBS |
|
|
4 |
|
|
|
4.1 |
|
|
|
8 |
|
|
|
2 |
* |
|
|
12 |
|
Portland |
|
|
23 |
|
|
KGW |
|
|
1997 |
|
|
NBC |
|
|
8 |
|
|
|
8.1 |
|
|
|
8 |
|
|
|
1 |
|
|
|
11 |
|
Charlotte |
|
|
26 |
|
|
WCNC |
|
|
1997 |
|
|
NBC |
|
|
36 |
|
|
|
36.1 |
|
|
|
8 |
|
|
|
3 |
* |
|
|
7 |
|
San Antonio |
|
|
37 |
|
|
KENS |
|
|
1997 |
|
|
CBS |
|
|
5 |
|
|
|
5.1 |
|
|
|
10 |
|
|
|
2 |
|
|
|
10 |
|
San Antonio(5) |
|
|
37 |
|
|
KCWX |
|
|
|
|
|
CW |
|
|
2 |
|
|
|
N/A |
|
|
|
10 |
|
|
|
9 |
* |
|
|
1 |
|
Hampton/Norfolk |
|
|
42 |
|
|
WVEC |
|
|
1984 |
|
|
ABC |
|
|
13 |
|
|
|
13.1 |
|
|
|
8 |
|
|
|
1 |
|
|
|
13 |
|
Louisville |
|
|
48 |
|
|
WHAS |
|
|
1997 |
|
|
ABC |
|
|
11 |
|
|
|
11.1 |
|
|
|
7 |
|
|
|
1 |
* |
|
|
12 |
|
Austin |
|
|
52 |
|
|
KVUE |
|
|
1999 |
|
|
ABC |
|
|
24 |
|
|
|
24.1 |
|
|
|
7 |
|
|
|
1 |
|
|
|
11 |
|
New Orleans (6) |
|
|
54 |
|
|
WWL |
|
|
1994 |
|
|
CBS |
|
|
4 |
|
|
|
4.1 |
|
|
|
8 |
|
|
|
1 |
(7) |
|
|
18 |
(7) |
New Orleans |
|
|
54 |
|
|
WUPL |
|
|
2007 |
|
|
MNTV |
|
|
54 |
|
|
|
54.1 |
|
|
|
8 |
|
|
|
|
(8) |
|
|
|
(8) |
Tucson |
|
|
70 |
|
|
KMSB |
|
|
1997 |
|
|
FOX |
|
|
11 |
|
|
|
11.1 |
|
|
|
9 |
|
|
|
4 |
* |
|
|
4 |
|
Tucson |
|
|
70 |
|
|
KTTU |
|
|
2002 |
|
|
MNTV |
|
|
18 |
|
|
|
18.1 |
|
|
|
9 |
|
|
|
6 |
|
|
|
2 |
|
Spokane |
|
|
77 |
|
|
KREM |
|
|
1997 |
|
|
CBS |
|
|
2 |
|
|
|
2.1 |
|
|
|
7 |
|
|
|
2 |
|
|
|
14 |
|
Spokane |
|
|
77 |
|
|
KSKN |
|
|
2001 |
|
|
CW |
|
|
22 |
|
|
|
22.1 |
|
|
|
7 |
|
|
|
4 |
* |
|
|
3 |
|
Boise(9)(10) |
|
|
118 |
|
|
KTVB |
|
|
1997 |
|
|
NBC |
|
|
7 |
|
|
|
7.1 |
|
|
|
5 |
|
|
|
1 |
|
|
|
24 |
|
|
|
|
* |
|
Tied with one or more stations in the market. |
|
(1) |
|
Market rank is based on the relative size of the television market Designated Market Area
(DMA), among the 210 generally recognized DMAs in the United States, based on the November
2006 Nielsen Media Research report. |
|
(2) |
|
Represents the number of analog television stations (both VHF and UHF) broadcasting in the
market, excluding public stations, low power broadcast stations and cable channels. |
|
(3) |
|
Station rank is derived from the stations rating, which is based on the May 2007 Nielsen
Media Research report of the number of television households tuned to the Companys station
for the Sunday-Saturday 5:00 a.m. to 2:00 a.m. period (sign-on/sign-off) as a percentage of
the number of television households in the market. |
|
(4) |
|
Station audience share is based on the May 2007 Nielsen Media Research report of the number
of television households tuned to the station as a percentage of the number of television
households with sets in use in the market for the sign-on/sign-off period. |
|
(5) |
|
Belo operates KCWX-TV through a local marketing agreement. |
|
(6) |
|
WWL also produces Channel 15 NewsWatch, an around-the-clock local news and weather cable
channel. |
|
(7) |
|
Represents the station rank and audience share of WWL-TV as of the July 2005 Nielsen Media
Research report, prior to Hurricane Katrina. More recent information is unavailable because
Nielsen has not included New Orleans in its ratings since July 2005. Nielsen is expected to
resume reporting ratings in the New Orleans market in July 2007. |
|
(8) |
|
On February 26, 2007, Belo purchased WUPL-TV. Included in the purchase was WBXN-CA, a Class
A television station in New Orleans, Louisiana. The station rank and station audience share
are not available as Nielsen has not rated stations in the New Orleans market since July 2005.
Nielsen is expected to resume reporting ratings in the New Orleans market in July 2007. |
|
(9) |
|
The Company also owns KTFT-LP (NBC), a low power television station in Twin Falls, Idaho. |
|
(10) |
|
Using its digital multicast capabilities, in 2003 KTVB launched 24/7 Local News Channel,,
an around-the-clock local news and weather channel. |
8
Newspaper Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Belo Acquired |
|
Daily |
|
Sunday |
Newspaper |
|
Location |
|
/Started |
|
Circulation (1) |
|
Circulation |
|
The Dallas Morning News |
|
Dallas, TX |
|
October 1885 |
|
|
409,968 |
(2) |
|
|
563,079 |
(2) |
The Providence Journal |
|
Providence, RI |
|
February 1997 |
|
|
155,155 |
(3) |
|
|
205,102 |
(3) |
The Press-Enterprise |
|
Riverside, CA |
|
July 1997 |
|
|
173,015 |
(4) |
|
|
178,062 |
(4) |
Denton Record-Chronicle |
|
Denton, TX |
|
June 1999 |
|
|
13,209 |
(5) |
|
|
16,028 |
(5) |
|
|
|
(1) |
|
Daily circulation is defined as a Monday through Saturday six-day average. |
|
(2) |
|
Average paid circulation data for The Dallas Morning News is obtained from its Publishers
Statement for the six months ended March 31, 2007, as filed with the Audit Bureau of
Circulations (Audit Bureau), subject to audit. |
|
(3) |
|
Average paid circulation data for The Providence Journal is obtained from its Publishers
Statement for the twenty-five weeks ended March 25, 2007, as filed with the Audit Bureau,
subject to audit. |
|
(4) |
|
Average paid circulation data for The Press-Enterprise is obtained from its Publishers
Statement for the six months ended March 31, 2007, as filed with the Audit Bureau, subject to
audit. |
|
(5) |
|
Average paid circulation for the Denton Record-Chronicle is obtained from its Publishers
Statement for the six months ended March 31, 2007, as filed with the Certified Audit of
Circulations, subject to audit. |
The Company intends for the discussion of its financial condition and results of operations
that follows to provide information that will assist in understanding the Companys financial
statements, the changes in certain key items in those statements from period to period and the
primary factors that accounted for those changes, as well as how certain accounting principles,
policies and estimates affect the Companys financial statements. The discussion of results of
operations at the consolidated level is followed by a more detailed discussion of results of
operations by segment.
Results of Operations
(Dollars in thousands, except share and per share amounts)
Consolidated Results of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
|
|
|
|
Percentage |
|
|
|
|
|
|
|
|
|
|
Percentage |
|
|
|
|
|
|
2007 |
|
|
Change |
|
|
2006 |
|
|
2007 |
|
|
Change |
|
|
2006 |
|
|
Net operating revenues |
|
$ |
390,505 |
|
|
|
(3.2 |
%) |
|
$ |
403,557 |
|
|
$ |
744,560 |
|
|
|
(4.0 |
%) |
|
$ |
775,280 |
|
Operating costs and expenses |
|
|
315,572 |
|
|
|
(2.8 |
%) |
|
|
324,654 |
|
|
|
624,975 |
|
|
|
(3.2 |
%) |
|
|
645,431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations |
|
|
74,933 |
|
|
|
(5.0 |
%) |
|
|
78,903 |
|
|
|
119,585 |
|
|
|
(7.9 |
%) |
|
|
129,849 |
|
Other income (expense) |
|
|
(21,003 |
) |
|
|
(34.8 |
%) |
|
|
(15,578 |
) |
|
|
(39,786 |
) |
|
|
3.6 |
% |
|
|
(38,392 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes |
|
|
53,930 |
|
|
|
(14.8 |
%) |
|
|
63,325 |
|
|
|
79,799 |
|
|
|
(12.7 |
%) |
|
|
91,457 |
|
Income taxes |
|
|
(17,508 |
) |
|
|
(15.3 |
%) |
|
|
(20,666 |
) |
|
|
(27,926 |
) |
|
|
(11.3 |
%) |
|
|
(31,498 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
36,422 |
|
|
|
(14.6 |
%) |
|
$ |
42,659 |
|
|
$ |
51,873 |
|
|
|
(13.5 |
%) |
|
$ |
59,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net operating revenue decreased $13,052, or 3.2 percent, from $403,557 in the second quarter
2006 to $390,505 in the second quarter 2007 due to revenue decreases of $17,955 in the Newspaper
Group primarily related to decreases in advertising revenues partially offset by an increase of
$4,903 in the Television Group primarily related to increases in local spot advertising revenue,
Internet advertising revenue and retransmission fees.
Total net operating revenue decreased $30,720, or 4.0 percent, from $775,280 in the six months
ended June 30, 2006, to $744,560 in the six months ended June 30, 2007 due to revenue decreases of
$39,273 in the Newspaper Group primarily related to decreases in advertising revenues partially
offset by an increase of $8,553 in the Television Group primarily related to increases in local and
national spot advertising revenue, Internet advertising revenue and retransmission fees.
Operating costs and expenses decreased $9,082, or 2.8 percent, from $324,654 in the second quarter
2006 to $315,572 in the second quarter 2007. Salaries, wages and employee benefits expense
decreased $3,934, or 2.8 percent, in the second quarter 2007 as compared to the prior year period.
This decrease was primarily due to a decrease in full and part-time salaries of $2,097 because of a
decrease in headcount. In addition a decrease in estimated pension expense of $1,940 resulted from
the Companys curtailment of its defined benefit pension plan effective March 31, 2007, and an
increase in the discount rate applied to future pension obligations. Other production,
distribution and operating costs increased $2,156, or 1.7 percent, in the second quarter 2007 as
9
compared to the second quarter 2006, primarily due to an increase of $2,370 in charitable
contributions resulting from the donation of a tract of land to benefit the City of Dallas, Texas.
Newsprint, ink and other supplies decreased $7,895, or 23.1 percent, in the second quarter 2007 as
compared to the year-earlier period primarily due to lower newsprint costs, which is a combination
of lower prices and lower volume.
Operating costs and expenses decreased $20,456, or 3.2 percent, from $645,431 in the six months
ended June 30, 2006 to $624,975 in the six months ended June 30, 2007. Salaries, wages and
employee benefits expense decreased $11,923, or 4.1 percent, in the six months ended June 30, 2007
as compared to the prior year period. This decrease was primarily due to a decrease in full and
part-time salaries of $5,429 because of a decrease in headcount. In addition a decrease in
estimated pension expense of $4,868 was primarily due to the Companys curtailment of its defined
benefit pension, and an increase in the discount rate applied to future pension obligations. Other
production, distribution and operating costs increased $7,673, or 3.3 percent, in the six months
ended June 30, 2007 as compared to the six months ended June 30, 2006, primarily due to an increase
of $7,415 in outside services attributable to costs associated with technology outsourcing
announced in the second quarter 2006. Newsprint, ink and other supplies decreased $17,726, or 25.0
percent, in the six months ended June 30, 2007 as compared to the year-earlier period primarily due
to lower newsprint costs, which is a combination of lower prices and lower volume.
Other income, net decreased $5,607, or 63.3 percent, in the second quarter 2007 compared to the
second quarter 2006 primarily because in the second quarter 2006, the Company recorded a one-time
gain of $7,536 in miscellaneous income related to a payment associated with a change-in-control
provision in one of Belos vendor contracts.
Other income, net decreased $1,087, or 11.2 percent, in the six months ended June 30, 2007 compared
to the six months ended June 30, 2006. In 2006, the Company recorded a one-time gain of $7,536 in
miscellaneous income related to a payment associated with a change-in-control provision in one of
Belos vendor contracts. The decrease related to this gain was partially offset by the receipt in
2007 of a $4,000 insurance settlement related to losses suffered from Hurricane Katrina.
Income taxes decreased $3,158, or 15.3 percent, for the three months ended June 30, 2007, compared
with the three months ended June 30, 2006, primarily due to lower taxable income and adjustments
related to the implementation of the State of Texas margin tax. In future periods, estimated state
taxes related to the State of Texas margin tax are expected to increase.
Income taxes decreased $3,572, or 11.3 percent, for the six months ended June 30, 2007, compared
with the six months ended June 30, 2006, primarily due to lower taxable income and adjustments
related to the implementation of the State of Texas margin tax. In future periods, estimated state
taxes related to the State of Texas margin tax are expected to increase.
As a result of the factors discussed above, net earnings for the three months ended June 30, 2007
decreased to $36,422 (35 cents per share) from $42,659 (41 cents per share) in the three months
ended June 30, 2006. Net earnings for the six months ended June 30, 2007 decreased to $51,873 (50
cents per share) from $59,959 (57 cents per share) for the six months ended June 30, 2006.
The Company defines Consolidated EBITDA as net earnings before interest expense, income taxes,
depreciation and amortization. Consolidated EBITDA is not a measure of financial performance under
GAAP. Management uses Consolidated EBITDA in internal analyses as a supplemental measure of the
financial performance of the Company to assist it in determining performance comparisons against
its peer group of companies, as well as capital spending and other investing decisions.
Consolidated EBITDA is also a common alternative measure of performance used by investors,
financial analysts, and rating agencies to evaluate financial performance. Consolidated EBITDA
should not be considered in isolation or as a substitute for net earnings, operating income, cash
flows provided by operating activities or other income or cash flow data prepared in accordance
with U.S. GAAP and this non-GAAP measure may not be comparable to similarly titled measures of
other companies.
10
The following table presents a reconciliation of Consolidated EBITDA to net earnings for the three
and six months ended June 30, 2007 and 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
|
|
|
|
Percentage |
|
|
|
|
|
|
|
|
|
|
Percentage |
|
|
|
2007 |
|
|
Change |
|
|
2006 |
|
|
2007 |
|
|
Change |
|
|
2006 |
|
|
Consolidated EBITDA |
|
$ |
103,128 |
|
|
|
(8.0 |
%) |
|
$ |
112,114 |
|
|
$ |
177,980 |
|
|
|
(5.2 |
%) |
|
$ |
187,811 |
|
Depreciation and amortization |
|
|
(24,950 |
) |
|
|
2.4 |
% |
|
|
(24,359 |
) |
|
|
(49,782 |
) |
|
|
3.1 |
% |
|
|
(48,262 |
) |
Interest expense |
|
|
(24,248 |
) |
|
|
(0.7 |
%) |
|
|
(24,430 |
) |
|
|
(48,399 |
) |
|
|
0.6 |
% |
|
|
(48,092 |
) |
Income taxes |
|
|
(17,508 |
) |
|
|
(15.3 |
%) |
|
|
(20,666 |
) |
|
|
(27,926 |
) |
|
|
(11.3 |
%) |
|
|
(31,498 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
36,422 |
|
|
|
(14.6 |
%) |
|
$ |
42,659 |
|
|
$ |
51,873 |
|
|
|
(13.5 |
%) |
|
$ |
59,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated EBITDA decreased $8,986, or 8.0 percent, in the three months ended June 30, 2007,
compared to the three months ended June 30, 2006, primarily due to a decrease in other income
(expense) net, related to the one-time gain of $7,536 in miscellaneous income related to a payment
associated with a change-in-control provision in one of Belos vendor contracts recorded in the
second quarter 2006. Additionally, the Newspaper Group recorded a decrease of $2,697 in segment
EBITDA and the Television Group recorded a decrease of $1,236 in segment EBITDA.
Consolidated EBITDA decreased $9,831, or 5.2 percent, in the six months ended June 30, 2007,
compared to the six months ended June 30, 2006, primarily due to a decrease of $5,607 in Newspaper
Group segment EBITDA, a decrease of $1,408 in Television Group segment EBITDA, and increase in
Corporate expenses of approximately $1,729 and a decrease in other income (expense) net, related
to a one-time gain of $7,536 in miscellaneous income related to a payment associated with a
change-in-control provision in one of Belos vendor contracts, partially offset by the receipt in
2007, of a $4,000 insurance settlement related to losses suffered from Hurricane Katrina.
Television Group
The following discussion reviews segment results for the Companys Television Group, which
currently consists of 20 owned stations and one station operated through an LMA, plus four
wholly-owned cable news channels. The Television Groups operating results for the three and six
months ended June 30, 2007, as compared with the three and six months ended June 30, 2006, were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
|
|
|
|
Percentage |
|
|
|
|
|
|
|
|
|
|
Percentage |
|
|
|
|
|
|
2007 |
|
|
Change |
|
|
2006 |
|
|
2007 |
|
|
Change |
|
|
2006 |
|
|
Net operating revenues |
|
$ |
198,229 |
|
|
2.5 |
% |
|
$ |
193,326 |
|
|
$ |
376,571 |
|
|
|
2.3 |
% |
|
$ |
368,018 |
|
Segment costs and expenses |
|
|
115,954 |
|
|
5.6 |
% |
|
|
109,815 |
|
|
|
227,821 |
|
|
|
4.6 |
% |
|
|
217,860 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA(a) |
|
$ |
82,275 |
|
|
(1.5 |
%) |
|
$ |
83,511 |
|
|
$ |
148,750 |
|
|
|
(0.9 |
%) |
|
$ |
150,158 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Belos management uses segment EBITDA as the primary measure of profitability to evaluate
operating performance and to allocate capital resources and bonuses to eligible operating
company employees. Segment EBITDA represents a segments earnings before interest expense,
income taxes, depreciation and amortization. Other income (expense), net is not allocated to
the Companys operating segments because it consists primarily of equity earnings (losses)
from investments in partnerships and joint ventures and other non-operating income (expense). |
11
Net Operating Revenues
Television Group revenues increased 2.5 percent and 2.3 percent for the three and six months ended
June 30, 2007, over the three and six months ended June 30, 2006, respectively. The table below
presents the components of net operating revenues for the three and six months ended June 30, 2007,
as compared with the three and six months ended June 30, 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
|
|
|
|
Percentage |
|
|
|
|
|
|
|
|
|
|
Percentage |
|
|
|
|
|
|
2007 |
|
|
Change |
|
|
2006 |
|
|
2007 |
|
|
Change |
|
|
2006 |
|
|
Non-political advertising |
|
$ |
183,481 |
|
|
|
4.4 |
% |
|
$ |
175,681 |
|
|
$ |
349,290 |
|
|
|
3.5 |
% |
|
$ |
337,463 |
|
Political advertising |
|
|
2,199 |
|
|
|
(56.8 |
%) |
|
|
5,094 |
|
|
|
2,974 |
|
|
|
(62.4 |
%) |
|
|
7,913 |
|
Other |
|
|
12,549 |
|
|
|
|
% |
|
|
12,551 |
|
|
|
24,307 |
|
|
|
7.4 |
% |
|
|
22,642 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating revenues |
|
$ |
198,229 |
|
|
|
2.5 |
% |
|
$ |
193,326 |
|
|
$ |
376,571 |
|
|
|
2.3 |
% |
|
$ |
368,018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-political advertising revenues increased $7,800, or 4.4 percent, in the second quarter 2007 as
compared to the second quarter 2006. This increase is a combination of a $4,855, or 2.9 percent,
increase in local and national spot revenue and a $2,246, or 47.6 percent, increase in advertising
revenue generated from the Television Groups Web sites as compared with the second quarter 2006.
Spot revenue increases in the home improvement, radio and television, telecommunications and
restaurant categories were partially offset by decreases in the automotive and department store
categories. The spot revenue increases were partially offset by a decrease in political
advertising revenues. Political advertising revenues decreased $2,895, or 56.8 percent, in the
second quarter 2007 as compared with the second quarter 2006. Political revenues are generally
higher in even numbered years than in odd numbered years due to elections for various state and
national offices.
Non-political advertising revenues increased $11,827, or 3.5 percent, in the six months ended June
30, 2007 as compared to the six months ended June 30, 2006. This increase is a combination of a
$7,190, or 2.2 percent, increase in local and national spot revenue and a $3,469, or 39.7 percent,
increase in advertising revenue generated from the Television Groups Web sites as compared with
the six months ended June 30, 2006. Spot revenue increases in the home improvement, restaurant,
telecommunications, radio and television and financial services categories were partially offset by
decreases in the automotive, department store and healthcare categories. The spot revenue
increases were partially offset by a decrease in political advertising revenues. Political
advertising revenues decreased $4,939, or 62.4 percent, in the six months ended June 30, 2007 as
compared with the six months ended June 30, 2006. Political revenues are generally higher in even
numbered years than in odd numbered years due to elections for various state and national offices.
Other revenues increased primarily due to rate increases in retransmission fees.
Segment Costs and Expenses
Television Group segment costs and expenses increased $6,139, or 5.6 percent, in the second quarter
2007 compared to the year-earlier period, primarily due to increases in outside services and
salaries, wages and employee benefits. The increase in outside services is primarily due to
incremental costs associated with technology outsourcing announced in the second quarter 2006. The
increase in salaries, wages and employee benefit expenses is primarily due to increased headcount.
Segment EBITDA for the Television Group decreased $1,236, or 1.5 percent, in the second quarter
2007 compared to the prior year period primarily as a result of the increase in expenses.
Television Group segment costs and expenses increased $9,961, or 4.6 percent, in the six months
ended June 30, 2007 compared to the year-earlier period, primarily due to increases in outside
services, salaries, wages and employee benefits and programming expense. The increase in outside
services is primarily due to incremental costs associated with the technology outsourcing announced
in the second quarter 2006. The increase in salaries, wages and employee benefit expenses is
primarily due to increased headcount. The increase in programming expense is primarily due to
increased rates for syndicated programming. Segment EBITDA for the Television Group decreased
$1,408, or 0.9 percent, in the six months ended June 30, 2007 compared to the prior year period
primarily as a result of the increase in expenses.
12
Newspaper Group
The following discussion reviews segment results for the Companys Newspaper Group, which consists
of four daily newspapers, various niche publications and commercial printing. Discussion of the
three major newspapers generally includes the operations of the related niche publications and
products within their respective markets. The Newspaper Groups operating results for the three
and six months ended June 30, 2007, as compared to the three and six months ended June 30, 2006,
were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
|
|
|
|
Percentage |
|
|
|
|
|
|
|
|
|
|
Percentage |
|
|
|
|
|
|
2007 |
|
|
Change |
|
|
2006 |
|
|
2007 |
|
|
Change |
|
|
2006 |
|
|
Net operating revenues |
|
$ |
192,276 |
|
|
|
(8.5 |
%) |
|
$ |
210,231 |
|
|
$ |
367,989 |
|
|
|
(9.6 |
%) |
|
$ |
407,262 |
|
Segment costs and expenses |
|
|
149,734 |
|
|
|
(9.2 |
%) |
|
|
164,992 |
|
|
|
300,781 |
|
|
|
(10.1 |
%) |
|
|
334,447 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA(a) |
|
$ |
42,542 |
|
|
|
(6.0 |
%) |
|
$ |
45,239 |
|
|
$ |
67,208 |
|
|
|
(7.7 |
%) |
|
$ |
72,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Belos management uses segment EBITDA as the primary measure of profitability to evaluate
operating performance and to allocate capital resources and bonuses to eligible operating
company employees. Segment EBITDA represents a segments earnings before interest expense,
income taxes, depreciation and amortization. Other income (expense), net is not allocated to
the Companys operating segments because it consists primarily of equity earnings (losses)
from investments in partnerships and joint ventures and other non-operating income (expense). |
Net Operating Revenues
Newspaper Group revenues decreased 8.5 percent and 9.6 percent in the three and six months ended
June 30, 2007, respectively, as compared with the three and six months ended June 30, 2006. The
table below presents the components of Newspaper Group net operating revenues for those periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
|
|
|
|
Percentage |
|
|
|
|
|
|
|
|
|
|
Percentage |
|
|
|
|
|
|
2007 |
|
|
Change |
|
|
2006 |
|
|
2007 |
|
|
Change |
|
|
2006 |
|
|
Advertising |
|
$ |
157,704 |
|
|
|
(9.6 |
%) |
|
$ |
174,415 |
|
|
$ |
299,649 |
|
|
|
(10.6 |
%) |
|
$ |
335,176 |
|
Circulation |
|
|
27,893 |
|
|
|
(2.9 |
%) |
|
|
28,737 |
|
|
|
55,511 |
|
|
|
(4.2 |
%) |
|
|
57,921 |
|
Other |
|
|
6,679 |
|
|
|
(5.7 |
%) |
|
|
7,079 |
|
|
|
12,829 |
|
|
|
(9.4 |
%) |
|
|
14,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating revenues |
|
$ |
192,276 |
|
|
|
(8.5 |
%) |
|
$ |
210,231 |
|
|
$ |
367,989 |
|
|
|
(9.6 |
%) |
|
$ |
407,262 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising revenues accounted for approximately 82 percent and 81 percent of total Newspaper Group
revenues for the three and six months ended June 30, 2007, respectively, compared to approximately
82 percent for the three and six months ended June 30, 2006. Circulation revenue accounted for
approximately 15 percent of total Newspaper Group revenues for the three and six months ended June
30, 2007, respectively, compared to approximately 14 percent for the three and six months ended
June 30, 2006. For each of the periods, commercial printing made up most of the remainder of
Newspaper Group revenues.
Net operating revenues for The Dallas Morning News decreased $8,455, or 6.6 percent, in the three
months ended June 30, 2007, as compared to the three months ended June 30, 2006. Advertising
revenues decreased by $8,089, or 7.7 percent, in the three months ended June 30, 2007, when
compared to the three months ended June 30, 2006. General advertising revenues decreased $3,945,
or 23.7 percent, in the three months ended June 30, 2007, as compared to the three months ended
June 30, 2006, primarily due to decreases in the financial and automotive categories. Retail
advertising revenue decreased $1,501, or 6.9 percent, in the three months ended June 30, 2007,
compared to the three months ended June 30, 2006, primarily due to a decrease in the furniture
category. Classified advertising revenues decreased $1,279, or 3.7 percent, primarily due to
decreases in the automotive and real estate categories. Circulation revenue was relatively flat
for the three months ended June 30, 2007, compared to the three months ended June 30, 2006.
Net operating revenues for The Dallas Morning News decreased by $20,336, or 8.2 percent, in the six
months ended June 30, 2007, as compared to the six months ended June 30, 2006. Advertising
revenues decreased by $19,100, or 9.5 percent, in the six months ended June 30, 2007, when compared
to the six months ended June 30, 2006. General advertising revenues decreased $8,814, or 27.5
percent, in the six months ended June 30, 2007, as
13
compared to the six months ended June 30, 2006, primarily due to decreases in the financial,
telecommunications and automotive categories. Retail advertising revenue decreased $2,275, or 5.5
percent, in the six months ended June 30, 2007, compared to the six months ended June 30, 2006,
primarily due to a decrease in the furniture category. Classified advertising revenues decreased
$6,764, or 9.8 percent, primarily due to decreases in the real estate, automotive and employment
categories. Circulation revenue decreased $866, or 2.5 percent, in the six months ended June 30,
2007 compared to the six months ended June 30, 2006.
Net operating revenues for The Providence Journal decreased by $2,881, or 6.9 percent, in the three
months ended June 30, 2007, as compared to the three months ended June 30, 2006. Advertising
revenues decreased $2,457, or 7.1 percent, in the three months ended June 30, 2007, compared to the
three months ended June 30, 2006. Retail advertising revenues decreased $776, or 7.1 percent, due
to decreases in the department store, gaming, furniture and home accessories and amusements
categories. General advertising revenues decreased $286, or 39.5 percent, in the three months
ended June 30, 2007, compared to the three months ended June 30, 2006, primarily due to decreases
in the automotive category. Classified advertising revenue decreased $1,039, or 8.1 percent, in
the three months ended June 30, 2007, compared to the three months ended June 30, 2006, primarily
due to decreases in the employment and real estate categories. Circulation revenue decreased $403,
or 6.0 percent, in the three months ended June 30, 2007, compared to the three months ended June
30, 2006, primarily due to lower overall circulation.
Net operating revenues for The Providence Journal decreased by $6,369, or 7.9 percent, in the six
months ended June 30, 2007, as compared to the six months ended June 30, 2006. Advertising
revenues decreased $5,098, or 7.7 percent for the six months ended June 30, 2007, compared to the
six months ended June 30, 2006. Classified advertising revenue decreased $2,013, or 8.0 percent,
in the six months ended June 30, 2007, compared to the six months ended June 30, 2006, primarily
due to decreases in the employment and real estate categories. Retail advertising revenues
decreased $1,689, or 7.9 percent, due to decreases in the department store, gaming, furniture and
home accessories and amusements categories for the six months ended June 30, 2007, compared to the
six months ended June 30, 2006. General advertising revenues decreased $680, or 42.2 percent, for
the six months ended June 30, 2007, compared to the six months ended June 30, 2006, primarily due
to decreases in the automotive category. Circulation revenue declined $1,192, or 8.9 percent, in
the six months ended June 30, 2007, compared to the six months ended June 30, 2006, primarily due
to lower overall circulation.
Net operating revenues for The Press-Enterprise decreased by $6,619, or 16.1 percent, in the three
months ended June 30, 2007, as compared to the three months ended June 30, 2006. Total advertising
revenues decreased $6,166, or 17.6 percent, in the three months ended June 30, 2007, compared with
the three months ended June 30, 2006. Retail advertising revenues decreased $1,295, or 23.8
percent, primarily due to decreases in department store, home improvement, home furnishings and
grocery categories. General advertising revenues decreased $541, or 16.9 percent, due to decreases
in financial and automotive categories. Classified advertising revenues decreased $3,595, or 21.7
percent, primarily due to decreases in the employment, real estate and automotive categories.
Circulation revenue at The Press-Enterprise decreased $208, or 4.4 percent, when comparing the
three months ended June 30, 2007, to the three months ended June 30, 2006. Commercial printing and
other revenue at The Press-Enterprise declined $245, or 17.1 percent, for the three months ended
June 30, 2007, compared to the three months ended June 30, 2006.
Net operating revenues for The Press-Enterprise decreased $12,568 or 15.7 percent, in the six
months ended June 30, 2007, as compared to the six months ended June 30, 2006. Total advertising
revenues decreased $11,330, or 16.8 percent, in the six months ended June 30, 2007, compared with
the six months ended June 30, 2006. Classified advertising revenues decreased $6,971, or 21.3
percent, primarily due to decreases in the employment, real estate and automotive categories.
Retail advertising revenues decreased $1,996, or 19.9 percent, primarily due to decreases in the
department store, home improvement, home furnishings and grocery categories. General advertising
revenues decreased $774, or 13.2 percent, in the six months ended June 30, 2007, when compared with
the six months ended June 30, 2006, primarily due to decreases in the financial and automotive
categories. Circulation revenue at The Press-Enterprise decreased $352, or 3.7 percent, when
comparing the six months ended June 30, 2007, to the six months ended June 30, 2006. Commercial
printing and other revenue at The Press-Enterprise declined $886, or 29.3 percent, for the six
months ended June 30, 2007, compared to the six months ended June 30, 2006.
Segment Costs and Expenses
Newspaper Group segment costs and expenses decreased $15,258, or 9.2 percent, in the three months
ended June 30, 2007, as compared to the prior year period primarily due to decreases in newsprint,
ink and other supplies,
14
salaries, wages and employee benefits, and other production, distribution and operating costs.
Newsprint, ink and other supplies decreased $7,927, or 23.4 percent, primarily due to lower
newsprint costs which is a combination of lower prices and lower volume, due in part to the
Companys strategic decisions to reduce third party circulation for its publications and to reduce
the geographic distribution area for The Dallas Morning News. Salaries, wages and employee
benefits decreased $4,741, or 6.6 percent, primarily due to the voluntary severance program for
newsroom employees at The Dallas Morning News initiated in the third quarter 2006 which reduced
headcount. In addition to the voluntary severance program, the Newspaper Group recognized a
reduction in estimated pension expense of approximately $1,251 primarily due to the Companys
curtailment of its defined benefit pension plan effective March 31, 2007, and an increase in the
discount rate applied to future pension obligations. Other production, distribution and operating
costs decreased $2,590, or 4.3 percent, primarily due to decreases in distribution and advertising
and promotion partially offset by an increase in outside services. The decrease in distribution
expense is primarily due to the Companys decision to reduce third party circulation at The Dallas
Morning News. The decrease in advertising and promotion is primarily due to decreases at The
Dallas Morning News. These decreases were partially offset by an increase in outside services due
to incremental costs associated with the technology outsourcing announced in the second quarter
2006. As a result of the items discussed above, segment EBITDA for the Newspaper Group decreased
$2,697, or 6.0 percent, for the three months ended June 30, 2007 compared to the three months ended
June 30, 2006.
Newspaper Group segment costs and expenses decreased $33,666, or 10.1 percent, in the six months
ended June 30, 2007, as compared to the prior year period primarily due to decreases in newsprint,
ink and other supplies, salaries, wages and employee benefits, and other production, distribution
and operating costs. Newsprint, ink and other supplies decreased $17,725, or 25.2 percent,
primarily due to lower newsprint costs which is a combination of lower prices and lower volume due
in part to the Companys strategic decisions to reduce third party circulation for its publications
and to reduce the geographic distribution area for The Dallas Morning News. Salaries, wages and
employee benefits decreased $12,615, or 8.6 percent, primarily due to the voluntary severance
program for newsroom employees at The Dallas Morning News initiated in the third quarter 2006. In
addition to the voluntary severance program, the Newspaper Group recognized a reduction in
estimated pension expense of approximately $3,083 primarily due to the Companys curtailment of its
defined benefit pension plan effective March 31, 2007, and an increase in the discount rate applied
to future pension obligations. Other production, distribution and operating costs decreased
$3,326, or 2.8 percent, primarily due to decreases in distribution and advertising and promotion
partially offset by an increase in outside services. The decrease in distribution expense is
primarily due to the Companys decision to reduce third party circulation at The Dallas Morning
News. The decrease in advertising and promotion is primarily due to decreases at The Dallas
Morning News. These decreases were partially offset by an increase in outside services due to
incremental costs associated with the technology outsourcing announced in the second quarter 2006.
As a result of the items discussed above, segment EBITDA for the Newspaper Group decreased $5,607
or 7.7 percent, for the six months ended June 30, 2007 compared to the six months ended June 30,
2006.
Corporate
Corporate costs and expenses decreased $554, or 2.2 percent, in the three months ended June 30,
2007, compared to the three months ended June 30, 2006, primarily due to a decrease in outside
services of $2,918 for consulting fees related to the technology initiatives. Belo expects
consulting costs to continue throughout 2007 at a level consistent with the first six months of
2007. This decrease was partially offset by a charitable contribution of $2,450 attributable to
the donation of a tract of land to benefit the City of Dallas, Texas.
Corporate costs and expenses increased $1,729, or 3.9 percent, in the six months ended June 30,
2007, compared to the six months ended June 30, 2006, primarily due to a charitable contribution of
$2,450 attributable to the donation of a tract of land to benefit the City of Dallas, Texas.
Liquidity and Capital Resources
Operating Cash Flows
Net cash provided by operations, bank borrowings and term debt are Belos primary sources of
liquidity. Net cash provided by operations was $79,291 in the six months ended June 30, 2007
compared with $92,365 in the six months ended June 30, 2006. The changes in cash flows from
operations were primarily caused by routine changes in our working capital requirements, including
a $17,600 federal tax extension payment the Company made in the
15
first quarter 2007. The Company used net cash provided by operations and proceeds from stock
option exercises to fund capital expenditures, make dividend payments and purchase treasury shares.
The Company believes its current financial condition and credit relationships are adequate to fund
its current obligations.
Investing Cash Flows
Net cash flows used for investing activities were $33,360 in the six months ended June 30, 2007
compared with $32,445 in the six months ended June 30, 2006. These cash flows are primarily
attributable to capital expenditures and investments as more fully described below.
Capital Expenditures
Total capital expenditures were $29,736 in the six months ended June 30, 2007 compared with $34,073
in the six months ended June 30, 2006. These were primarily for Television Group and Newspaper
Group facilities and equipment and the building projects mentioned below.
In the first quarter 2007, the Company took possession of the new distribution and production
center for The Dallas Morning News in southern Dallas. The total cost of the land, land
improvements, buildings and equipment is projected to be approximately $50,000. Of the total
estimated costs, approximately $47,959 has been incurred since the beginning of the project and
approximately $2,658 and $4,411 has been incurred in the three and six months ended June 30, 2007,
respectively.
In the first quarter 2007, The Press-Enterprise moved into its new 150,000 square foot, five-story
office building to centralize all news, editorial, advertising, sales and marketing, technology,
production support and administrative functions. The total cost of the project is projected to be
approximately $40,000. Of the total estimated costs, approximately $34,831 has been incurred since
the beginning of the project and approximately $2,465 and $7,748 has been incurred in the three and
six months ended June 30, 2007, respectively.
Acquisition
On February 26, 2007, the Company purchased the assets of WUPL-TV, the My Network TV affiliate, in
New Orleans, Louisiana.
Financing Cash Flows
Net cash flows used for financing activities were $65,678 in the six months ended June 30, 2007
compared to $15,170 in the six months ended June 30, 2006. The 2007 cash flows used are primarily
attributable to dividends on common stock and to a lesser extent than prior years, repurchase of
treasury stock as more fully described below. The 2006 cash flows are primarily attributable to
borrowings and repayments under the Companys revolving credit facility, dividends on common stock,
proceeds from exercises of stock options and purchases of treasury stock.
Long-Term Debt
At June 30, 2007, Belo had $1,049,022 in fixed-rate debt securities as follows: $350,000 of 8%
Senior Notes due 2008; $249,022 of 6-3/4% Senior Notes due 2013, $200,000 of 7-3/4% Senior
Debentures due 2027; and $250,000 of 7-1/4% Senior Debentures due 2027. The weighted average
effective interest rate for the fixed-rate debt instruments is 7.5 percent. On June 1, 2007, the
Company repaid the remaining outstanding balance of the 7-1/8% Senior Notes of $234,477 at their
maturity using available cash balances and borrowings under the Companys variable-rate revolving
credit facility and its uncommitted lines of credit.
At June 30, 2007, the Company had a $1,000,000 variable-rate revolving credit facility under which
borrowings were $185,000. The Company is required to maintain certain ratios as of the end of each
quarter, as defined in its revolving credit agreement. As of June 30, 2007, the Company was in
compliance with all debt covenant requirements. These borrowings may be converted at the Companys
option to revolving debt. Accordingly, such borrowings are classified as long-term debt in the
Companys financial statements. The weighted average effective
16
annual interest rate for this credit facility, which includes a .125 percent commitment fee, is 5.9
percent as of June 30, 2007.
In addition, the Company has uncommitted lines of credit of $60,000, of which $13,960 was
outstanding at June 30, 2007. The uncommitted lines of credit have variable interest rates. These
borrowings may be converted at the Companys option to revolving debt. Accordingly, such
borrowings are classified as long-term debt in the Companys financial statements. As of June 30,
2007, the weighted average effective annual interest rate for borrowings under the lines of credit
was 5.9 percent. All unused borrowings under the Companys revolving credit facility and the
uncommitted lines of credit were available for borrowing as of June 30, 2007.
Dividends
On June 1, 2007, the Company paid first quarter 2007 dividends of $12,778, or 12.5 cents per share,
on Series A and Series B common stock outstanding, to shareholders of record on May 11, 2007. On
March 2, 2007, the Company paid fourth quarter 2006 dividends of $12,787, or 12.5 cents per share,
on Series A and Series B common stock outstanding, to shareholders of record on February 9, 2007.
On July 27, 2007, the Company declared second quarter 2007 dividends of 12.5 cents per share, on
Series A and Series B common stock outstanding, to be paid on September 7, 2007 to shareholders of
record on August 17, 2007.
Share Repurchase Program
In the second quarter 2007, the Company purchased 629,339 shares of its Series A common stock under
a stock repurchase program pursuant to authorization from Belos Board of Directors in December
2005. The remaining authorization for the repurchase of shares as of June 30, 2007 under this
authority was 13,221,716 shares. In addition, the Company has a stock repurchase program
authorizing the purchase of up to $2,500 of common stock annually. During the second quarter 2007,
no shares were repurchased under this program. There is no expiration date for these repurchase
programs. The total cost of the treasury shares purchased in the second quarter 2007 was $13,507.
All shares repurchased in the second quarter 2007 were retired as of June 30, 2007.
Other
The Company has various sources available to meet its 2007 capital and operating commitments,
including cash on hand, short-term investments, internally-generated funds and a $1,000,000
revolving line of credit. The Company believes its resources are adequate to meet its needs.
Recent Accounting Pronouncements
On January 1, 2007, the Company adopted Financial Accounting Standards Board (FASB) Interpretation
(FIN) 48, Accounting for Uncertainty in Income Taxes. FIN 48, an interpretation of Statement of
Financial Accounting Standard (SFAS) 109, Accounting for Income Taxes, clarifies the accounting
and disclosure requirements for uncertainty in tax positions as defined by the standard. In
connection with the adoption of FIN 48, the Company has analyzed its filing positions in all
significant jurisdictions where it is required to file income tax returns for the open tax years in
such jurisdictions. The Company has identified as major tax jurisdictions, as defined, its federal
income tax return and its state income tax returns in five states. The Companys federal income
tax returns for the years subsequent to December 31, 2002, remain subject to examination. The
Companys income tax returns in major state income tax jurisdictions remain subject to examination
for various periods subsequent to December 31, 2001. The Company currently believes that all
significant filing positions are highly certain and that, more likely than not, all of its
significant income tax filing positions and deductions would be sustained. Therefore, the Company
has no significant reserves for uncertain tax positions and no adjustments to such reserves were
required upon the adoption of FIN 48. If interest and penalties are assessed, interest costs will
be recognized in interest expense and penalties will be recognized in operating expenses.
In September 2006, the FASB issued SFAS 157, Fair Value Measurements. SFAS 157 establishes,
among other items, a framework for fair value measurements in the financial statements by
providing a single definition of fair value, provides guidance on the methods used to estimate
fair value and increases disclosures about estimates of fair value. The effective date of SFAS
157 for the Company is January 1, 2008. The Company is evaluating the effect of the adoption of
this standard.
17
Forward-Looking Statements
Statements in this Form 10-Q concerning Belos business outlook or future economic performance,
anticipated profitability, revenues, expenses, dividends, capital expenditures, investments, future
financings or other financial and non-financial items that are not historical facts, are
forward-looking statements as the term is defined under applicable federal securities laws.
Forward-looking statements are subject to risks, uncertainties and other factors that could cause
actual results to differ materially from those statements.
Such risks, uncertainties and factors include, but are not limited to, changes in capital market
conditions and prospects, and other factors such as changes in advertising demand, interest rates
and newsprint prices; newspaper circulation matters, including changes in readership, and audits
and related actions by the Audit Bureau of Circulations; technological changes, including the
transition to digital television and the development of new systems to distribute television and
other audio-visual content; development of Internet commerce; industry cycles; changes in pricing
or other actions by competitors and suppliers; regulatory changes; adoption of new accounting
standards or changes in existing accounting standards by the Financial Accounting Standards Board
or other accounting standard-setting bodies or authorities; the effects of Company acquisitions and
dispositions; the recovery of the New Orleans market, where the Company owns and operates
market-leading television station WWL-TV and recently acquired WUPL-TV, from the effects of
Hurricane Katrina; general economic conditions; and significant armed conflict, as well as other
risks detailed in Belos other public disclosures, and filings with the Securities and Exchange
Commission (SEC), including the Annual Report on Form 10-K.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Other than as disclosed, there have been no material changes in the Companys exposure to market
risk from the disclosure included in the Annual Report on Form 10-K for the fiscal year ended
December 31, 2006.
Item 4. Controls and Procedures
During the quarter ended June 30, 2007, there were no changes in the Companys internal controls
over financial reporting that have materially affected, or are reasonably likely to materially
affect, Belos internal controls over financial reporting.
The Company carried out an evaluation under the supervision and with the participation of the
Companys management, including the Companys Chairman of the Board and Chief Executive Officer and
executive vice president/Chief Financial Officer, of the effectiveness of the Companys disclosure
controls and procedures, as of the end of the period covered by this report. Based upon that
evaluation, the Chairman of the Board and Chief Executive Officer and executive vice
president/Chief Financial Officer concluded that, as of the end of the period covered by this
report, the Companys disclosure controls and procedures were effective such that information
relating to the Company (including its consolidated subsidiaries) required to be disclosed in the
Companys SEC reports (i) is recorded, processed, summarized and reported within the time periods
specified in the SEC rules and forms and (ii) is accumulated and communicated to the Companys
management, including the Chairman of the Board and Chief Executive Officer and executive vice
president/Chief Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure.
PART II
Item 1. Legal Proceedings
In addition to the proceedings disclosed below and those previously disclosed (see Note 9 to the
Consolidated Condensed Financial Statements in Part I, Item 1), a number of other legal proceedings
are pending against the Company, including several actions for alleged libel and/or defamation. In
the opinion of management, liabilities, if any, arising from these other legal proceedings would
not have a material adverse effect on the results of operations, liquidity or financial position of
the Company.
On August 23, 2004, August 26, 2004 and October 5, 2004, respectively, three related lawsuits were
filed by purported shareholders of the Company in the United States District Court for the Northern
District of Texas against the Company, Robert W. Decherd and Barry Peckham. The complaints arise
out of the circulation overstatement at The Dallas Morning News announced by the Company in 2004,
alleging that the overstatement
18
artificially inflated Belos financial results and thereby injured investors. The plaintiffs seek
to represent a purported class of shareholders who purchased Belo common stock between May 12, 2003
and August 6, 2004. The complaints allege violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934. On October 18, 2004, the court ordered the consolidation of all cases
arising out of the same facts and presenting the same claims, and on February 7, 2005, plaintiffs
filed an amended, consolidated complaint adding as defendants John L. Sander, Dunia A. Shive,
Dennis A. Williamson and James M. Moroney III. On May 18, 2007, the court partially granted
defendants motions to dismiss plaintiffs second amended complaint to the extent it dismissed
plaintiffs complaint as to defendants John L. Sander, Dunia A. Shive and Dennis A. Williamson.
The motions to dismiss were denied as to the other defendants. No class or classes have been
certified and no amount of damages has been specified. The Company believes the complaints are
without merit and intends to vigorously defend against them.
On June 3, 2005, a shareholder derivative lawsuit was filed by a purported individual shareholder
of the Company in the 191st Judicial District Court of Dallas County, Texas, against
Robert W. Decherd, Dennis A. Williamson, Dunia A. Shive and John L. Sander, all of whom are current
or retired executive officers of the Company; James M. Moroney III, an executive officer of The
Dallas Morning News; Barry Peckham, a former executive officer of The Dallas Morning News; and
Louis E. Caldera, Judith L. Craven, Stephen Hamblett, Dealey D. Herndon, Wayne R. Sanders, France
A. Córdova, Laurence E. Hirsch, J. McDonald Williams, Henry P. Becton, Jr., Roger A. Enrico,
William T. Solomon, Lloyd D. Ward, M. Anne Szostak and Arturo Madrid, current or former directors
of the Company. The lawsuit makes various claims asserting mismanagement and breach of fiduciary
duty related to the circulation overstatement at The Dallas Morning News. On May 30, 2007, after a
prior discovery stay ended, the court issued an order administratively closing the case. Under the
courts order, the case is stayed and, as a result, no further action can be taken in the
proceeding unless the case is reinstated. The court retained jurisdiction and the case is subject
to being reinstated by the court or upon motion by any party. The courts order was not a
dismissal with prejudice.
Item 1A. Risk Factors
There have been no material changes in the Companys risk factors from the disclosure included in
the Annual Report of Form 10-K for the fiscal year ended December 31, 2006.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
There have been no unregistered sales of equity securities in the last three years. All
repurchases of securities detailed below were retired in the quarter they were repurchased.
Issuer Purchases of Equity Securities
The following table provides information about the Companys Series A common stock repurchases
during the quarter ended June 30, 2007. The Company did not repurchase any shares of Series B
common stock during the quarter ended June 30, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d) |
|
|
|
|
|
|
|
|
|
|
|
(c) |
|
|
Maximum Number of |
|
|
|
|
|
|
|
|
|
|
|
Total Number of |
|
|
Shares that May Yet |
|
|
|
|
|
|
|
|
|
|
|
Shares Purchased as |
|
|
be Purchased Under |
|
|
|
(a) |
|
|
(b) |
|
|
Part of Publicly |
|
|
the Plans or |
|
|
|
Total Number of |
|
|
Average Price Paid |
|
|
Announced Plans or |
|
|
Programs (1) |
|
Period |
|
Shares Purchased |
|
|
per Share |
|
|
Programs |
|
|
|
|
|
April 1, 2007 through
April 30, 2007 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
13,851,055 |
|
May 1, 2007 through
May 31, 2007 |
|
|
258,339 |
|
|
|
20.36 |
|
|
|
258,339 |
|
|
|
13,592,716 |
|
June 1, 2007 through
June 30, 2007 |
|
|
371,000 |
|
|
|
22.18 |
|
|
|
371,000 |
|
|
|
13,221,716 |
|
|
Total |
|
|
629,339 |
|
|
$ |
21.44 |
|
|
|
629,339 |
|
|
|
13,221,716 |
|
|
|
|
|
(1) |
|
In December 2005, the Companys Board of Directors authorized the repurchase of up to
15,000,000 shares of common stock. As of June 30, 2007, the Company had 13,221,716 remaining
shares under the December 2005 repurchase program authority. In addition, Belo has a stock
repurchase program authorizing the purchase of up to $2,500 of Company stock annually. There
is no expiration date for these repurchase programs. |
19
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of the Companys shareholders was held on May 8, 2007. All nominees standing
for election as directors were elected. The following chart indicates the number of votes cast
with respect to each nominee for director:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Withheld |
|
Nominee |
|
For |
|
|
Authority |
|
Louis E. Caldera |
|
|
210,286,054 |
|
|
|
3,025,106 |
|
Judith L. Craven, M.D., M.P.H. |
|
|
209,585,777 |
|
|
|
3,725,383 |
|
Dealey D. Herndon |
|
|
208,758,817 |
|
|
|
4,552,343 |
|
Wayne R. Sanders |
|
|
210,344,684 |
|
|
|
2,966,476 |
|
In addition to those directors elected at the Annual Meeting, the following directors continue in
office: Henry P. Becton, France A. Córdova, Ph.D., Robert W. Decherd, Laurence E. Hirsch, William
T. Solomon, M. Anne Szostak, Lloyd D. Ward and J. McDonald Williams.
At the Annual Meeting, a proposal to approve the ratification of the appointment of Ernst & Young
LLP as Belos independent registered public accounting firm (Proposal II) was approved by the
Companys shareholders. The following chart indicates the number of votes cast for and against and
the number of abstentions with respect to this proposal. There were no broker nonvotes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For |
|
|
Against |
|
|
Abstain |
|
Proposal II |
|
|
211,902,236 |
|
|
|
1,136,059 |
|
|
|
272,865 |
|
At the Annual Meeting, a proposal to elect all directors annually and not by classes was not
approved by the Companys shareholders (Proposal III). The following chart indicates the number of
votes cast for and against and the number of abstentions and broker nonvotes with respect to this
proposal.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For |
|
|
Against |
|
|
Abstain |
|
|
Broker Nonvotes |
|
Proposal III |
|
|
56,489,971 |
|
|
|
145,220,214 |
|
|
|
2,784,937 |
|
|
|
8,816,038 |
|
No other matters were submitted to a vote of security holders at the Annual Meeting.
Item 5. Other Information
On April 26, 2007, the Company announced its consolidated financial results for the quarter ending
March 31, 2007. The press release was widely disseminated and also posted immediately to the
Companys website; however, it was not previously furnished under cover of a Form 8-K. A copy of
the press release is furnished herewith as Exhibit 99.1.
In July 2007 the Federal Communications Commission (FCC) renewed the FCC licenses of
stations KENS, KING, KMOV, KMSB, KONG, KREM, KTTU, KTVB, KTVK, KVUE, WCNC, WHAS, and WWL.
Applications for renewal of the FCC licenses of stations KGW, KHOU, KSKN and WFAA are pending.
Under FCC rules, a license expiration date is automatically extended pending review and grant of
the renewal application.
20
Item 6. Exhibits
Exhibits marked with an asterisk (*) are incorporated by reference to documents previously
filed by the Company with the SEC, as indicated. All other documents are filed with this
report. Exhibits marked with a tilde (~) are management contracts, compensatory plan
contracts or arrangements filed pursuant to Item 601(b)(10)(iii)(A) of Regulation S-K.
|
|
|
Exhibit |
|
|
Number |
|
Description |
|
3.1 *
|
|
Certificate of Incorporation of the Company (Exhibit 3.1 to the Companys Annual
Report on Form 10-K dated March 15, 2000 (Securities and Exchange Commission File No.
001-08598) (the 1999 Form 10-K)) |
|
|
|
3.2 *
|
|
Certificate of Correction to Certificate of Incorporation dated May 13, 1987
(Exhibit 3.2 to the 1999 Form 10-K) |
|
|
|
3.3 *
|
|
Certificate of Designation of Series A Junior Participating Preferred Stock
of the Company dated April 16, 1987 (Exhibit 3.3 to the 1999 Form 10-K) |
|
3.4 *
|
|
Certificate of Amendment of
Certificate of Incorporation of the Company dated May 4, 1988 (Exhibit 3.4 to the 1999 Form 10-K) |
|
|
|
3.5 *
|
|
Certificate of Amendment of Certificate of Incorporation of the Company dated
May 3, 1995 (Exhibit 3.5 to the 1999 Form 10-K) |
|
|
|
3.6 *
|
|
Certificate of Amendment of Certificate of Incorporation of the Company dated
May 13, 1998 (Exhibit 3.6 to the Companys Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998 (Securities and Exchange Commission File No. 002-74702)(the
2nd Quarter 1998 Form 10-Q)) |
|
|
|
3.7 *
|
|
Certificate of Ownership and Merger, dated December 20, 2000, but effective
as of 11:59 p.m. on December 31, 2000 (Exhibit 99.2 to the Companys Current Report on
Form 8-K filed with the Securities and Exchange Commission on December 29, 2000
(Securities and Exchange Commission File No. 001-08598)) |
|
|
|
3.8 *
|
|
Amended Certificate of Designation of Series A Junior Participating Preferred
Stock of the Company dated May 4, 1988 (Exhibit 3.7 to the 1999 Form 10-K) |
|
|
|
3.9 *
|
|
Certificate of Designation of Series B Common Stock of the Company dated May
4, 1988 (Exhibit 3.8 to the 1999 Form 10-K) |
|
|
|
3.10 *
|
|
Amended and Restated Bylaws of the Company, effective December 31, 2000
(Exhibit 3.10 to the Companys Annual Report on Form 10-K dated March 13, 2001
(Securities and Exchange Commission File No. 001-08598)(the 2000 Form 10-K)) |
|
|
|
3.11 *
|
|
Amendment No. 1 to Amended and Restated Bylaws of the Company, effective
February 7, 2003 (Exhibit 3.11 to the Companys Annual Report on Form 10-K dated March
12, 2003 (Securities and Exchange Commission File No. 001-08598)(the 2002 Form 10-K)) |
|
|
|
3.12 *
|
|
Amendment No. 2 to Amended and Restated Bylaws of the Company, effective May
9, 2005 (Exhibit 3.12 to the Companys Quarterly Report on Form 10-Q for the quarter
ended March 31, 2005 (Securities and Exchange Commission File No. 001-08598)) |
|
|
|
3.13 *
|
|
Amendment No. 3 to Amended and Restated Bylaws of the Company, effective July
27, 2007 (Exhibit 99.3 to the Companys Current Report on
Form 8-K filed July 30, 2007
(Securities and Exchange Commission File No. 001-08598) |
21
|
|
|
Exhibit |
|
|
Number |
|
Description |
|
4.1
|
|
Certain rights of the holders of the Companys Common Stock are set forth in
Exhibits 3.1-3.12 above |
|
|
|
4.2 *
|
|
Specimen Form of Certificate representing shares of the Companys Series A
Common Stock (Exhibit 4.2 to the 2000 Form 10-K) |
|
|
|
4.3 *
|
|
Specimen Form of Certificate representing shares of the Companys Series B
Common Stock (Exhibit 4.3 to the 2000 Form 10-K) |
|
|
|
4.4
|
|
Instruments defining rights of debt securities: |
|
|
|
|
|
|
|
(1) *
|
|
Indenture dated as of June 1, 1997 between the Company and
The Chase Manhattan Bank, as Trustee (the Indenture)(Exhibit 4.6(1) to the
Companys Quarterly Report on Form 10-Q for the quarter ended June 30, 1997
(Securities and Exchange Commission File No. 002-74702)(the 2nd
Quarter 1997 Form 10-Q)) |
|
|
(2) *
|
|
(a) $200 million 7-1/8% Senior Note due 2007 (Exhibit
4.6(3)(a) to the 2nd Quarter 1997 Form 10-Q) |
|
|
*
|
|
(b) $100 million 7-1/8% Senior Note due 2007 (Exhibit
4.6(3)(b) to the 2nd Quarter 1997 Form 10-Q) |
|
|
(3) *
|
|
$200 million 7-3/4% Senior Debenture due 2027 (Exhibit 4.6(4)
to the 2nd Quarter 1997 Form 10-Q) |
|
|
(4) *
|
|
Officers Certificate dated June 13, 1997 establishing terms
of debt securities pursuant to Section 3.1 of the Indenture (Exhibit 4.6(5) to
the 2nd Quarter 1997 Form 10-Q) |
|
|
(5) *
|
|
(a) $200 million 7-1/4% Senior Debenture due 2027 (Exhibit
4.6(6)(a) to the Companys Quarterly Report
on Form 10-Q for the quarter ended
September 30, 1997 (Securities and Exchange
Commission
File No. 002-74702)(the
3rd Quarter 1997 Form 10-Q)) |
|
|
*
|
|
(b) $50 million 7-1/4% Senior Debenture due 2027
(Exhibit 4.6(6)(b) to the 3rd Quarter 1997 Form 10-Q) |
|
|
(6) *
|
|
Officers Certificate dated September 26, 1997 establishing
terms of debt securities pursuant to Section 3.1 of the Indenture (Exhibit
4.6(7) to the 3rd Quarter 1997 Form 10-Q) |
|
|
(7) *
|
|
$350 million 8.00% Senior Note due 2008 (Exhibit 4.7(8) to
the Companys Quarterly Report on Form 10-Q for the quarter ended September 30,
2001 (Securities and Exchange Commission File No. 001-08598)(the
3rd Quarter 2001 Form 10-Q)) |
|
|
(8) *
|
|
Officers Certificate dated November 1, 2001 establishing
terms of debt securities pursuant to Section 3.1 of the Indenture (Exhibit
4.7(9) to the 3rd Quarter 2001 Form 10-Q) |
|
|
(9) *
|
|
Form of Belo Corp. 6-3/4% Senior Notes due 2013 (Exhibit 4.3
to the Companys Current Report on Form 8-K filed May 26, 2006 (Securities and
Exchange Commission File No. 001-08598)(the May 26, 2006 Form 8-K)) |
|
|
(10) *
|
|
Officers Certificate dated May 26, 2006 establishing terms
of debt securities pursuant to Section 3.1 of the Indenture (Exhibit 4.2 to the
May 26, 2006 Form 8-K) |
|
|
(11) *
|
|
Underwriting Agreement Standard Provisions (Debt Securities),
dated May 24, 2006 (Exhibit 1.1 to the May 26, 2006 Form 8-K) |
|
|
(12) *
|
|
Underwriting Agreement, dated May 24, 2006, between the
Company, Banc of America Securities LLC and JPMorgan Securities, Inc. (Exhibit
1.2 to the May 26, 2006 Form 8-K) |
10.1 |
|
Financing agreements: |
|
|
|
|
|
|
|
(1) *
|
|
Amended and Restated Five-Year Competitive Advance and
Revolving Credit Facility Agreement dated as of June 7, 2006 among the Company,
as Borrower; JPMorgan Chase Bank, N.A., as Administrative Agent; J.P. Morgan
Securities Inc. and Banc of America Securities LLC, as Joint Lead Arrangers and
Joint Bookrunners; Bank of America, N.A., as Syndication Agent; and SunTrust
Bank, The Bank of New York, and BNP Paribas, as Documentation Agents; and
Mizuho Corporate Bank, Ltd., as Co-Documentation Agent (Exhibit 10.1 to the
Companys Current Report on Form 8-K filed June 7, 2006 (Securities and
Exchange Commission File No. 001-08598)) |
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
~ |
(1) |
|
|
|
Belo Savings Plan: |
|
|
|
|
|
|
*
|
|
(a)
|
|
Belo Savings Plan Amended and Restated effective
August 1, 2004 (Exhibit 10.2(1)(a) to the Companys Quarterly Report on Form
10-Q for the quarter ended June 30, 2004 (Securities and Exchange Commission
File No. 001-08598)(the 2nd Quarter 2004 Form 10-Q)) |
|
|
|
|
|
|
*
|
|
(b)
|
|
First Amendment to the Belo Savings Plan (as Amended
and Restated effective August 1, 2004), dated March 1, 2005 (Exhibit
10.2(1)(b) to the Companys Quarterly Report on Form 10-Q for the quarter
ended March 31, 2006 (Securities and Exchange Commission File No.
001-08598)(the 1st Quarter 2006 Form 10-Q)) |
|
|
|
|
|
|
*
|
|
(c)
|
|
Second Amendment to the Belo Savings Plan (as Amended
and Restated effective August 1, 2004), dated December 1, 2005 (Exhibit
10.2(1)(c) to the 1st Quarter 2006 Form 10-Q) |
|
|
|
|
|
|
*
|
|
(d)
|
|
Third Amendment to the Belo Savings Plan (as Amended
and Restated effective August 1, 2004), dated September 29, 2006 (Exhibit
10.2(1)(d) to the Companys Quarterly Report on Form 10-Q for the quarter
ended September 30, 2006 (Securities and Exchange Commission File No.
001-08598)) |
|
|
|
|
|
|
*
|
|
(e)
|
|
Fourth Amendment to the Belo Savings Plan (as Amended
and Restated effective August 1, 2004), dated November 30, 2006 (Exhibit
10.2(1)(e) to the Companys Annual Report on Form 10-K dated March 1, 2007
(Securities and Exchange Commission File No. 001-08598)(the 2006 Form
10-K)) |
|
|
|
|
|
|
|
|
(f)
|
|
Fifth Amendment to the Belo Savings Plan (as
Amended and Restated effective August 1, 2004), dated May 7, 2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
~ |
(2) |
|
|
|
Belo 1986 Long-Term Incentive Plan: |
|
|
|
|
|
|
*
|
|
(a)
|
|
Belo Corp. 1986 Long-Term Incentive Plan (Effective
May 3, 1989, as amended by Amendments 1, 2, 3, 4 and 5) (Exhibit 10.3(2) to
the Companys Annual Report on Form 10-K dated March 10, 1997 (Securities
and Exchange Commission File No. 001-08598)) |
|
|
|
|
|
|
*
|
|
(b)
|
|
Amendment No. 6 to 1986 Long-Term Incentive Plan,
dated May 6, 1992 (Exhibit 10.3(2)(b) to the Companys Annual Report on
Form 10-K dated March 19, 1998 (Securities and Exchange Commission File No.
002-74702)(the 1997 Form 10-K)) |
|
|
|
|
|
|
*
|
|
(c)
|
|
Amendment No. 7 to 1986 Long-Term Incentive Plan,
dated October 25, 1995 (Exhibit 10.2(2)(c) to the 1999 Form 10-K) |
|
|
|
|
|
|
*
|
|
(d)
|
|
Amendment No. 8 to 1986 Long-Term Incentive Plan,
dated July 21, 1998 (Exhibit 10.3(2)(d) to the 2nd Quarter 1998
Form 10-Q) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
~ |
(3) |
|
* |
|
Belo 1995 Executive Compensation Plan, as restated to incorporate
amendments through December 4, 1997 (Exhibit 10.3(3) to the 1997 Form 10-K) |
|
|
|
|
|
|
*
|
|
(a)
|
|
Amendment to 1995 Executive Compensation Plan,
dated July 21, 1998 (Exhibit 10.2(3)(a) to the 2nd Quarter 1998
Form 10-Q) |
|
|
|
|
|
|
*
|
|
(b)
|
|
Amendment to 1995 Executive Compensation Plan,
dated December 16, 1999 (Exhibit 10.2(3)(b) to the 1999 Form 10-K) |
|
|
|
|
|
|
*
|
|
(c)
|
|
Amendment to 1995 Executive Compensation Plan,
dated December 5, 2003 (Exhibit 10.3(3)(c) to the Companys Annual Report
on Form 10-K dated March 4, 2004 (Securities and Exchange Commission File
No. 001-08598)(the 2003 Form 10-K)) |
|
|
|
|
|
|
*
|
|
(d)
|
|
Form of Belo Executive Compensation Plan Award
Notification for Employee Awards (Exhibit 10.2(3)(d) to the Companys
Annual Report on Form 10-K dated March 6, 2006 (Securities and Exchange
Commission File No. 001-08598)(the 2005 Form 10-K)) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
~ |
(4) |
|
* |
|
Management Security Plan (Exhibit 10.3(1) to the 1996 Form 10-K) |
|
|
|
|
|
|
*
|
|
(a)
|
|
Amendment to Management Security Plan of Belo Corp.
and Affiliated Companies (as Restated Effective January 1, 1982) (Exhibit
10.2(4)(a) to the 1999 Form 10-K) |
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
~ |
(5) |
|
|
|
Belo Supplemental Executive Retirement Plan |
|
|
|
|
|
|
*
|
|
(a)
|
|
Belo Supplemental Executive Retirement Plan As
Amended and Restated Effective January 1, 2004 (Exhibit 10.2(5)(a) to the
2003 Form 10-K) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
~ |
(6) |
|
* |
|
Belo 2000 Executive Compensation Plan (Exhibit 4.15 to the
Companys Registration Statement on Form S-8 (Securities and Exchange Commission
File No. 333-43056) filed with the Securities and Exchange Commission on August
4, 2000) |
|
|
|
|
|
|
*
|
|
(a)
|
|
First Amendment to Belo 2000 Executive Compensation
Plan effective as of December 31, 2000 (Exhibit 10.2(6)(a) to the 2002 Form
10-K) |
|
|
|
|
|
|
*
|
|
(b)
|
|
Second Amendment to Belo 2000 Executive
Compensation Plan dated December 5, 2002 (Exhibit 10.2(6)(b) to the 2002
Form 10-K) |
|
|
|
|
|
|
*
|
|
(c)
|
|
Third Amendment to Belo 2000 Executive Compensation
Plan dated December 5, 2003 (Exhibit 10.2(6)(c) to the 2003 Form 10-K) |
|
|
|
|
|
|
*
|
|
(d)
|
|
Form of Belo Executive Compensation Plan Award
Notification for Employee Awards (Exhibit 10.2(6)(d) to the 2005 Form 10-K) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
~ |
(7) |
|
* |
|
Belo 2004 Executive Compensation Plan (Exhibit 10.2(6) to the
2nd Quarter 2004 Form 10-Q) |
|
|
|
|
|
|
*
|
|
(a)
|
|
Form of Belo 2004 Executive Compensation Plan Award
Notification for Executive Time-Based Restricted Stock Unit Awards (Exhibit
10.1 to the Companys Current Report on Form 8-K filed March 2, 2006
(Securities and Exchange Commission File No. 001-008598) (the March 2,
2006 Form 8-K)) |
|
|
|
|
|
|
*
|
|
(b)
|
|
Form of Belo 2004 Executive Compensation Plan Award
Notification for Employee Awards (Exhibit 10.2 to the March 2, 2006 Form
8-K) |
|
|
|
|
|
|
*
|
|
(c)
|
|
Form of Award Notification under the Belo 2004
Executive Compensation Plan for Non-Employee Director Awards (Exhibit 10.2
to the Companys Current Report on Form 8-K filed December 12, 2005
(Securities and Exchange Commission File No. 001-08598) (the December 12,
2005 Form 8-K)) |
|
|
|
|
|
|
*
|
|
(d)
|
|
First Amendment to the Belo 2004 Executive
Compensation Plan, dated November 30, 2006 (Exhibit 10.2(7)(d) to the 2006
Form 10-K) |
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~ |
(8) |
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* |
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Summary of Non-Employee Director Compensation (Exhibit 10.3 to
the December 12, 2005 Form 8-K) |
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12
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Statements re: Computation of Ratios |
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31.1
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Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 |
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31.2
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Certification of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 |
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32
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Certification of Chief Executive Officer and Chief Financial Officer pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 |
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99.1
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First Quarter 2007 Earnings Press Release dated April 26, 2007. |
24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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BELO CORP.
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July 30, 2007 |
By: |
/s/ Dennis A. Williamson
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Dennis A. Williamson |
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Executive Vice President/
Chief Financial Officer
(Authorized Officer and Principal Financial Officer)
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July 30, 2007 |
By: |
/s/ Alison K. Engel
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Alison K. Engel |
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Vice President/Corporate Controller (Principal Accounting Officer) |
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25