Edgar Filing: BELO CORP

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Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2012

¨	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)

Delaware

75-0135890

(State or other jurisdiction of

incorporation or organization)

(I.R.S. employer

identification no.)

400 South Record Street

Dallas, Texas

75202-4841

(Address of principal executive offices)

(Zip code)

Registrant’s 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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class		Outstanding at October 26, 2012
Common Stock, $0.01 par value		103,133,596*

*	Consisting of 93,994,352 shares of Series A Common Stock and 9,139,244 shares of Series B Common Stock.

BELO CORP.

FORM 10-Q

TABLE OF CONTENTS


		Page
PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements		2

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		17

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		22

Item 4.	Controls and Procedures		22

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings		23

Item 1A.	Risk Factors		23

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		23

Item 3.	Defaults Upon Senior Securities		23

Item 4.	Mine Safety Disclosures		23

Item 5.	Other Information		23

Item 6.	Exhibits		23

	Signatures		29

PART I.

Item 1. Financial Statements

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

Belo Corp. and Subsidiaries


	Three months ended September 30,						Nine months ended September 30,
In thousands, except per share amounts (unaudited)	2012			2011			2012			2011
Net Operating Revenues	$	176,273		$	151,999		$	509,790		$	469,848

Operating Costs and Expenses
Station salaries, wages and employee benefits		54,776			52,467			166,912			160,828
Station programming and other operating costs		50,520			51,788			143,911			154,549
Corporate operating costs		7,501			5,112			23,783			18,103
Pension settlement charge and contribution reimbursements		—			—			—			20,466
Depreciation		7,528			7,614			22,462			23,245

Total operating costs and expenses		120,325			116,981			357,068			377,191

Earnings from operations		55,948			35,018			152,722			92,657

Other Income and (Expense)
Interest expense		(17,683	)		(17,771	)		(53,059	)		(53,804	)
Other income, net		497			986			2,376			1,815

Total other income and (expense)		(17,186	)		(16,785	)		(50,683	)		(51,989	)

Earnings before income taxes		38,762			18,233			102,039			40,668
Income taxes		14,148			4,520			37,300			13,182

Net earnings	$	24,614		$	13,713		$	64,739		$	27,486

Less: Net (loss) attributable to noncontrolling interests		(203	)		—			(301	)		—

Net earnings attributable to Belo Corp.	$	24,817		$	13,713		$	65,040		$	27,486

Earnings Per Share
Basic	$	0.24		$	0.13		$	0.62		$	0.26
Diluted	$	0.24		$	0.13		$	0.62		$	0.26

Weighted Average Shares Outstanding
Basic		103,120			103,681			103,607			103,570
Diluted		103,420			104,039			103,914			103,959

Dividends declared per share	$	0.16		$	0.05		$	0.24		$	0.10

See accompanying Notes to Consolidated Condensed Financial Statements.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

Belo Corp. and Subsidiaries


	Three months ended September 30,					Nine months ended September 30,
In thousands (unaudited)	2012			2011		2012			2011
Net earnings	$	24,614		$	13,713	$	64,739		$	27,486

Other comprehensive income:

Amortization of net actuarial loss, net of tax		624			441		1,872			1,325

Comprehensive income		25,238			14,154		66,611			28,811

Less: comprehensive (loss) attributable to non-controlling interests		(203	)		—		(301	)		—

Comprehensive income attributable to Belo Corp.	$	25,441		$	14,154	$	66,912		$	28,811

See accompanying Notes to Consolidated Condensed Financial Statements.

CONSOLIDATED CONDENSED BALANCE SHEETS

Belo Corp. and Subsidiaries


In thousands, except share and per share amounts (unaudited)	September 30, 2012			December 31, 2011
Assets

Current assets:
Cash and temporary cash investments	$	165,903		$	61,118
Accounts receivable, net		134,903			149,584
Income tax receivable		14			31,629
Other current assets		20,294			16,692

Total current assets		321,114			259,023

Property, plant and equipment, net		148,461			157,115
Intangible assets, net		725,399			725,399
Goodwill		423,873			423,873
Other assets		39,755			46,195

Total assets	$	1,658,602		$	1,611,605

Liabilities and Shareholders’ Equity

Current liabilities:
Current portion of long-term debt	$	175,842		$	—
Accounts payable		17,147			19,677
Accrued expenses		42,658			34,961
Short-term pension obligation		19,375			19,300
Accrued interest payable		18,100			10,378
Income taxes payable		4,254			12,922
Dividends payable		8,251			5,189
Deferred revenue		7,315			3,435

Total current liabilities		292,942			105,862

Long-term debt		711,831			887,003
Deferred income taxes		258,984			244,361
Pension obligation		77,178			93,012
Other liabilities		11,304			14,164

Shareholders’ equity:
Preferred stock, $0.01 par value. Authorized 5,000,000 shares; none issued Common stock, $0.01 par value. Authorized 450,000,000 shares
Series A: Issued 93,994,052 shares at September 30, 2012 and 93,672,489 shares at December 31, 2011		940			937
Series B: Issued 9,139,544 shares at September 30, 2012 and 10,115,193 shares at December 31, 2011		91			101
Additional paid-in capital		1,087,911			1,090,513
Accumulated deficit		(696,809	)		(737,007	)
Accumulated other comprehensive loss		(85,469	)		(87,341	)

Total Belo Corp. shareholders’ equity		306,664			267,203
Noncontrolling interests		(301	)		—

Total shareholders’ equity		306,363			267,203

Total liabilities and shareholders’ equity	$	1,658,602		$	1,611,605

See accompanying Notes to Consolidated Condensed Financial Statements.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

Belo Corp. and Subsidiaries


	Nine months ended September 30,
In thousands (unaudited)	2012			2011
Operations
Net earnings	$	64,739		$	27,486
Adjustments to reconcile net earnings to net cash provided by operations:
Depreciation		22,462			23,245
Pension settlement charge		—			28,699
Pension contributions		(14,926	)		(23,257	)
Deferred income taxes		14,086			2,693
Employee retirement expense		1,992			2,866
Share-based compensation		4,094			1,472
Other non-cash items		1,684			1,261
Equity income from partnerships		(1,444	)		(1,451	)
Other, net		1,720			(349	)
Net change in operating assets and liabilities:
Accounts receivable		13,871			13,828
Income tax receivable		31,615			—
Other current assets		2,561			139
Accounts payable		(3,291	)		(8,682	)
Accrued expenses		10,349			(13,395	)
Accrued interest payable		7,722			7,967
Income taxes payable		(8,668	)		(5,121	)

Net cash provided by operations		148,566			57,401

Investments
Capital expenditures		(15,483	)		(10,215	)
Proceeds from disposition of real estate		—			5,919
Other investments, net		(795	)		(29	)

Net cash used for investments		(16,278	)		(4,325	)

Financing
Net proceeds from revolving debt		—			32,000
Payments on revolving debt		—			(43,000	)
Dividends paid on common stock		(21,780	)		(5,184	)
Common stock repurchased		(5,964	)		—
Net proceeds from exercise of stock options		124			106
Excess tax benefit from option exercises		117			115

Net cash used for financing		(27,503	)		(15,963	)

Net increase in cash and temporary cash investments		104,785			37,113
Cash and temporary cash investments at beginning of period		61,118			8,309

Cash and temporary cash investments at end of period	$	165,903		$	45,422

See accompanying Notes to Consolidated Condensed Financial Statements.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Belo Corp. and Subsidiaries

(in thousands, except share and per share amounts)

(1)

The accompanying unaudited consolidated condensed financial statements of Belo Corp. and subsidiaries (the Company or Belo) include equity investments, in which Belo owns a greater than 50% interest. The consolidated condensed financial statements 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.

Belo considers all highly liquid instruments purchased with a remaining maturity of three months or less to be temporary cash investments. Such temporary cash investments are carried at fair value on a recurring basis using Level 1 inputs.

The Company’s operating segments are defined as its television stations and cable news channels within a given market. The Company has determined that all of its operating segments meet the criteria under Accounting Standards Codification (ASC) 280-10 to be aggregated into one reporting segment.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 2012, are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

All amounts are in thousands, except share and per share amounts, unless otherwise indicated.

(2)

In July 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2012-02, Intangibles –Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. ASU 2012-02 allows companies to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary. Companies can first determine based on certain qualitative factors whether it is “more likely than not” (a likelihood of more than 50 percent) that an indefinite-lived intangible asset is impaired. The new standard is intended to reduce the cost and complexity of testing indefinite-lived intangible assets for impairment. The revised standard is effective for annual and interim impairment tests performed for fiscal years beginning after September 30, 2012 and early adoption is permitted. The Company plans to adopt this new guidance in the fourth quarter of 2012 when completing the annual impairment analysis. The new standard does not affect the manner in which the Company estimates fair value and will not affect the value of the Company’s indefinite-lived intangible assets.

In September 2011, the FASB issued ASU No. 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment. This ASU simplifies goodwill impairment testing by adding a qualitative review step to assess whether quantitative impairment analysis is necessary. Under the amended rule, a company is required to calculate the fair value of a business that contains recorded goodwill if it concludes, based on the qualitative assessment, that it is “more likely than not” that the fair value of that business is less than its book value. If such a decline in fair value is deemed to have occurred, then the quantitative goodwill impairment test that exists under current GAAP must be completed; otherwise, goodwill is deemed to be not impaired and no further testing is required until the next annual test date (or sooner if conditions or events before that date raise concerns of potential impairment in the business). The amended goodwill impairment guidance does not affect the manner in which a company estimates fair value. The new standard is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The value of that goodwill will not be affected by the adoption of this standard. The Company adopted the standard effective January 1, 2012.

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. This ASU requires companies to present the components of net income and other comprehensive income either as one continuous statement or as two consecutive statements. It eliminates the option to present components of other comprehensive income as part of the statement of changes in

stockholders’ equity. The standard does not change the items that must be reported in other comprehensive income, how such items are measured or when they must be reclassified to net income. This standard is effective for interim and annual periods beginning after December 15, 2011. The FASB subsequently deferred the effective date of certain provisions of this standard pertaining to the reclassification of items out of accumulated other comprehensive income. This ASU affects presentation only and will have no effect on the Company’s financial condition, results of operations or cash flows. The Company adopted the standard effective January 1, 2012.

(3)

Belo and A. H. Belo Corporation (A. H. Belo), who have two common directors, are considered related parties under accounting rules. The Company has no ownership interest in A. H. Belo or in any of A. H. Belo’s newspaper businesses or related assets, and A. H. Belo has no ownership interest in the Company or any of the Company’s television station businesses or related assets. Under a services agreement, the Company provides A. H. Belo certain services and/or support, the amounts of which are not significant to the ongoing operations of the Company. Belo and A. H. Belo also co-own certain investments in third party businesses, which are recorded as either equity or cost method investments and are included in other assets. The amount of income from the third party investments included in the Company’s net earnings is immaterial. See Note 8 for disclosures related to the 2011 split of The G.B. Dealey Retirement Pension Plan (Pension Plan) by Belo and A. H. Belo.

(4)	The following table sets forth the reconciliation between weighted average shares used for calculating basic and diluted earnings per share (EPS) for the three and nine months ended September 30, 2012 and 2011.


	Three months ended						Nine months ended
	September 30,						September 30,
In thousands except per share amounts	2012			2011			2012			2011
Income (Numerator)
Net earnings attributable to Belo Corp.	$	24,817		$	13,713		$	65,040		$	27,486
Income to participating securities		(348	)		(164	)		(1,014	)		(322	)

Income available to common shareholders	$	24,469		$	13,549		$	64,026		$	27,164

Shares (Denominator)
Weighted average shares outstanding (basic)		103,120			103,681			103,607			103,570
Dilutive effect of employee stock options		300			358			307			389

Adjusted weighted average shares outstanding		103,420			104,039			103,914			103,959

Earnings per share:
Basic	$	0.24		$	0.13		$	0.62		$	0.26
Diluted	$	0.24		$	0.13		$	0.62		$	0.26

For the three and nine months ended September 30, 2012, the Company excluded common stock options for 6,673,746 shares and 6,677,210 shares, respectively, because to include them would be anti-dilutive. Additionally, for the three and nine months ended September 30, 2012, the Company excluded from the diluted EPS calculation restricted stock units (RSUs) of 1,253,051 because they are participating securities. For the three and nine months ended September 30, 2011, the Company excluded common stock options for 8,794,257 shares and 8,774,657 shares, respectively, because to include them would be anti-dilutive. Additionally, for the three and nine months ended September 30, 2011, the Company excluded from the diluted EPS calculation RSUs of 900,796 because they were participating securities.

(5)

At September 30, 2012, Belo had $887,673 in fixed-rate debt securities as follows: $175,842 of 6³/₄% Senior Notes due 2013; $271,831 of 8% Senior Notes due 2016; $200,000 of 7³/₄% Senior Debentures due 2027; and $240,000 of 7¹/₄% Senior Debentures due 2027. The weighted average effective interest rate for the fixed-rate debt instruments is 7.5%.

At September 30, 2012, Belo had variable-rate debt capacity of $200,000 under a revolving credit agreement (2011 Credit Agreement). As of September 30, 2012, the Company did not have an outstanding balance under the 2011 Credit Agreement, and all unused borrowings were available for borrowing. The Company is required

to maintain certain leverage and interest ratios specified in the 2011 Credit Agreement. The leverage ratio is generally defined as the ratio of debt to cash flow and the senior leverage ratio is generally defined as the ratio of the debt under the credit facility to cash flow. The interest coverage ratio is generally defined as the ratio of interest expense to cash flow. At September 30, 2012, the Company’s leverage ratio was 3.6, its interest coverage ratio was 3.5 and its senior leverage ratio was 0.0. At September 30, 2012, the Company was in compliance with all debt covenant requirements.

In the second quarter 2012, the Company reclassified the balance for the 6³/₄% Senior Notes due May 30, 2013, from long-term debt to short-term debt because the debt is due in less than one year. The Company has elected to redeem the notes early on November 30, 2012 and expects to repay the notes with available cash.

At September 30, 2012 and 2011, the fair value of Belo’s fixed-rate debt was estimated to be $924,488 and $835,441, respectively. The Company’s publicly held long-term debt is classified as being derived from Level 2 inputs, because the fair value for these instruments is determined utilizing observable inputs in non-active markets.

(6)

The Company’s 8% Senior Notes due 2016 are fully and unconditionally guaranteed by each of the Company’s 100%-owned subsidiaries as of the date of issuance. Accordingly, the following condensed consolidating financial statements present the consolidated balance sheets, consolidated statements of operations and comprehensive income (loss) and consolidated statements of cash flows of Belo as parent, the guarantor subsidiaries consisting of Belo’s 100%-owned subsidiaries as of the date of issuance, non-guarantor subsidiaries consisting of subsidiaries subsequent to the date of issuance, and eliminations necessary to arrive at the Company’s information on a consolidated basis. These statements are presented in accordance with the disclosure requirements under Securities and Exchange Commission Regulation S-X, Rule 3-10.

Condensed Consolidating Statement of Operations

For the Three Months Ended September 30, 2012

(in thousands)(unaudited)


							Non-
	Parent			Guarantors			Guarantors			Eliminations			Total
Net Operating Revenues	$	—		$	176,273		$	—		$	—		$	176,273

Operating Costs and Expenses
Station salaries, wages and employee benefits		—			54,755			21			—			54,776
Station programming and other operating costs		—			50,049			471			—			50,520
Corporate operating costs		5,906			1,204			391			—			7,501
Depreciation		319			6,998			211			—			7,528

Total operating costs and expenses		6,225			113,006			1,094			—			120,325

Earnings (loss) from operations		(6,225	)		63,267			(1,094	)		—			55,948

Other Income and (Expense)
Interest expense		(17,677	)		(6	)		—			—			(17,683	)
Intercompany interest		752			(752	)		—			—			—
Other income (expense), net		(60	)		557			—			—			497

Total other income and (expense)		(16,985	)		(201	)		—			—			(17,186	)

Earnings (loss) before income taxes		(23,210	)		63,066			(1,094	)		—			38,762

Income tax benefit (expense)		8,743			(23,290	)		399			—			(14,148	)
Equity in earnings (loss) of subsidiaries		39,284			—			—			(39,284	)		—

Net earnings (loss)		24,817			39,776			(695	)		(39,284	)		24,614
Less: Net (loss) from noncontrolling interests		—			—			(203	)		—			(203	)

Net earnings (loss) attributable to Belo Corp.	$	24,817		$	39,776		$	(492	)	$	(39,284	)	$	24,817

Condensed Consolidating Statement of Comprehensive Income

For the Three Months Ended September 30, 2012

(in thousands)(unaudited)


					Non-
	Parent		Guarantors		Guarantors			Eliminations			Total
Net earnings (loss)	$	24,817	$	39,776	$	(695	)	$	(39,284	)	$	24,614
Amortization of net actuarial loss, net of tax		624		—		—			—			624

Comprehensive income (loss)		25,441		39,776		(695	)		(39,284	)		25,238
Less: comprehensive (loss) attributable to noncontrolling interests		—		—		(203	)		—			(203	)

Comprehensive income (loss) attributable to Belo Corp.	$	25,441	$	39,776	$	(492	)	$	(39,284	)	$	25,441

Condensed Consolidating Statement of Operations

For the Three Months Ended September 30, 2011

(in thousands)(unaudited)


	Parent			Guarantors			Eliminations			Total
Net Operating Revenues	$	—		$	151,999		$	—		$	151,999

Operating Costs and Expenses
Station salaries, wages and employee benefits		—			52,467			—			52,467
Station programming and other operating costs		—			51,788			—			51,788
Corporate operating costs		4,190			922			—			5,112
Pension settlement charge and contribution reimbursements		—			—			—			—
Depreciation		340			7,274			—			7,614

Total operating costs and expenses		4,530			112,451			—			116,981

Earnings (loss) from operations		(4,530	)		39,548			—			35,018

Other Income and (Expense)
Interest expense		(17,753	)		(18	)		—			(17,771	)
Intercompany interest		833			(833	)		—			—
Other income (expense), net		(29	)		1,015			—			986

Total other income and (expense)		(16,949	)		164			—			(16,785	)

Earnings (loss) before income taxes		(21,479	)		39,712			—			18,233

Income tax benefit (expense)		2,976			(7,496	)		—			(4,520	)
Equity in earnings of subsidiaries		32,216			—			(32,216	)		—

Net earnings	$	13,713		$	32,216		$	(32,216	)	$	13,713

Condensed Consolidating Statement of Comprehensive Income

For the Three Months Ended September 30, 2011

(in thousands)(unaudited)


	Parent		Guarantors		Eliminations			Total
Net earnings	$	13,713	$	32,216	$	(32,216	)	$	13,713
Amortization of net actuarial loss, net of tax		441		—		—			441

Comprehensive income	$	14,154	$	32,216	$	(32,216	)	$	14,154

Condensed Consolidating Statement of Operations

For the Nine Months Ended September 30, 2012

(in thousands)(unaudited)


							Non-
	Parent			Guarantors			Guarantors			Eliminations			Total
Net Operating Revenues	$	—		$	509,790		$	—		$	—		$	509,790

Operating Costs and Expenses
Station salaries, wages and employee benefits		—			166,891			21			—			166,912
Station programming and other operating costs		—			143,240			671			—			143,911
Corporate operating costs		19,366			3,050			1,367			—			23,783
Depreciation		909			20,921			632			—			22,462

Total operating costs and expenses		20,275			334,102			2,691			—			357,068

Earnings (loss) from operations		(20,275	)		175,688			(2,691	)		—			152,722

Other Income and (Expense)
Interest expense		(53,030	)		(29	)		—			—			(53,059	)
Intercompany interest		2,241			(2,241	)		—			—			—
Other income, net		2			2,374			—			—			2,376

Total other income and (expense)		(50,787	)		104			—			—			(50,683	)

Earnings (loss) before income taxes		(71,062	)		175,792			(2,691	)		—			102,039

Income tax benefit (expense)		26,796			(65,080	)		984			—			(37,300	)
Equity in earnings (loss) of subsidiaries		109,306			—			—			(109,306	)		—

Net earnings (loss)		65,040			110,712			(1,707	)		(109,306	)		64,739
Less: Net (loss) from noncontrolling interests		—			—			(301	)		—			(301	)

Net earnings (loss) attributable to Belo Corp.	$	65,040		$	110,712		$	(1,406	)	$	(109,306	)	$	65,040

Condensed Consolidating Statement of Comprehensive Income

For the Nine Months Ended September 30, 2012

(in thousands)(unaudited)


					Non-
	Parent		Guarantors		Guarantors			Eliminations			Total
Net earnings (loss)	$	65,040	$	110,712	$	(1,707	)	$	(109,306	)	$	64,739
Amortization of net actuarial loss, net of tax		1,872		—		—			—			1,872

Comprehensive income (loss)		66,912		110,712		(1,707	)		(109,306	)		66,611
Less: comprehensive (loss) attributable to noncontrolling interests		—		—		(301	)		—			(301	)

Comprehensive income (loss) attributable to Belo Corp.	$	66,912	$	110,712	$	(1,406	)	$	(109,306	)	$	66,912

Condensed Consolidating Statement of Operations

For the Nine Months Ended September 30, 2011

(in thousands)(unaudited)


	Parent			Guarantors			Eliminations			Total
Net Operating Revenues	$	—		$	469,848		$	—		$	469,848

Operating Costs and Expenses
Station salaries, wages and employee benefits		—			160,828			—			160,828
Station programming and other operating costs		—			154,549			—			154,549
Corporate operating costs		15,756			2,347			—			18,103
Pension settlement charges and contribution reimbursements		20,466			—			—			20,466
Depreciation		963			22,282			—			23,245

Total operating costs and expenses		37,185			340,006			—			377,191

Earnings (loss) from operations		(37,185	)		129,842			—			92,657

Other Income and (Expense)
Interest expense		(53,739	)		(65	)		—			(53,804	)
Intercompany interest		3,631			(3,631	)		—			—
Other income (expense), net		(94	)		1,909			—			1,815

Total other income and (expense)		(50,202	)		(1,787	)		—			(51,989	)

Earnings (loss) before income taxes		(87,387	)		128,055			—			40,668

Income tax benefit (expense)		29,502			(42,684	)		—			(13,182	)
Equity in earnings of subsidiaries		85,371			—			(85,371	)		—

Net earnings	$	27,486		$	85,371		$	(85,371	)	$	27,486

Condensed Consolidating Statement of Comprehensive Income

For the Nine Months Ended September 30, 2011

(in thousands)(unaudited)


	Parent		Guarantors		Eliminations			Total
Net earnings	$	27,486	$	85,371	$	(85,371	)	$	27,486
Amortization of net actuarial loss, net of tax		1,325		—		—			1,325

Comprehensive income	$	28,811	$	85,371	$	(85,371	)	$	28,811

Condensed Consolidating Balance Sheet

As of September 30, 2012

(in thousands)(unaudited)


	Parent		Guarantors		Non- Guarantors		Eliminations			Total
Assets

Current assets:
Cash and temporary cash investments	$	162,269	$	3,499	$	135	$	—		$	165,903
Accounts receivable, net		292		134,611		—		—			134,903
Income tax receivable		14		—		—		—			14
Other current assets		5,627		14,654		13		—			20,294

Total current assets		168,202		152,764		148		—			321,114

Property, plant and equipment, net		4,267		129,754		14,440		—			148,461
Intangible assets, net		—		725,399		—		—			725,399
Goodwill		—		423,873		—		—			423,873
Deferred income taxes		39,639		—		—		(39,639	)		—
Intercompany receivable		544,916		—		—		(544,916	)		—
Investment in subsidiaries		568,419		—		—		(568,419	)		—
Other assets		19,213		20,475		67		—			39,755

Total assets	$	1,344,656	$	1,452,265	$	14,655	$	(1,152,974	)	$	1,658,602

Liabilities and Shareholders’ Equity

Current liabilities:
Current portion of long-term debt	$	175,842	$	—	$	—	$	—		$	175,842
Accounts payable		6,218		10,810		119		—			17,147
Accrued expenses		13,430		28,933		295		—			42,658
Short-term pension obligation		19,375		—		—		—			19,375
Income taxes payable		4,254		—		—		—			4,254
Deferred revenue		—		7,315		—		—			7,315
Dividends payable		8,251		—		—		—			8,251
Accrued interest payable		18,100		—		—		—			18,100

Total current liabilities		245,470		47,058		414		—			292,942

Long-term debt		711,831		—		—		—			711,831
Deferred income taxes		—		297,884		739		(39,639	)		258,984
Pension obligation		77,178		—		—		—			77,178
Intercompany payable		—		539,704		5,212		(544,916	)		—
Other liabilities		3,814		7,490		—		—			11,304
Total shareholders’ equity		306,363		560,129		8,290		(568,419	)		306,363

Total liabilities and shareholders’ equity	$	1,344,656	$	1,452,265	$	14,655	$	(1,152,974	)	$	1,658,602

Condensed Consolidating Balance Sheet

As of December 31, 2011

(in thousands)


	Parent		Guarantors		Non- Guarantors		Eliminations			Total
Assets

Current assets:
Cash and temporary cash investments	$	59,339	$	1,755	$	24	$	—		$	61,118
Accounts receivable, net		166		149,418		—		—			149,584
Income tax receivable		31,629		—		—		—			31,629
Other current assets		4,621		12,071		—		—			16,692

Total current assets		95,755		163,244		24		—			259,023

Property, plant and equipment, net		3,683		139,335		14,097		—			157,115
Intangible assets, net		—		725,399		—		—			725,399
Goodwill		—		423,873		—		—			423,873
Deferred income taxes		45,831		—		—		(45,831	)		—
Intercompany receivable		687,324		—		—		(687,324	)		—
Investment in subsidiaries		463,580		—		—		(463,580	)		—
Other assets		23,908		22,220		67		—			46,195

Total assets	$	1,320,081	$	1,474,071	$	14,188	$	(1,196,735	)	$	1,611,605

Liabilities and Shareholders’ Equity

Current liabilities:
Accounts payable	$	8,387	$	11,266	$	24	$	—		$	19,677
Accrued expenses		12,975		21,986		—		—			34,961
Short-term pension obligation		19,300		—		—		—			19,300
Income taxes payable		12,922		—		—		—			12,922
Deferred revenue		—		3,435		—		—			3,435
Dividends payable		5,189		—		—		—			5,189
Accrued interest payable		10,378		—		—		—			10,378

Total current liabilities		69,151		36,687		24		—			105,862

Long-term debt		887,003		—		—		—			887,003
Deferred income taxes		—		290,192		—		(45,831	)		244,361
Pension obligation		93,012		—		—		—			93,012
Intercompany payable		—		687,324		—		(687,324	)		—
Other liabilities		3,712		10,452		—		—			14,164
Total shareholders’ equity		267,203		449,416		14,164		(463,580	)		267,203

Total liabilities and shareholders’ equity	$	1,320,081	$	1,474,071	$	14,188	$	(1,196,735	)	$	1,611,605

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended September 30, 2012

(in thousands)(unaudited)


	Parent			Guarantors			Non- Guarantors			Total
Operations
Net cash provided by (used for) operations	$	26,643		$	123,054		$	(1,131	)	$	148,566

Investments
Capital expenditures		(4,721	)		(10,598	)		(164	)		(15,483	)
Other investments, net		(795	)		—			—			(795	)

Net cash used for investments		(5,516	)		(10,598	)		(164	)		(16,278	)

Financing
Dividends paid		(21,780	)		—			—			(21,780	)
Common stock repurchased		(5,964	)		—			—			(5,964	)
Net proceeds from exercise of stock options		124			—			—			124
Excess tax benefit from option exercises		117			—			—			117
Intercompany activity		109,306			(110,712	)		1,406			—

Net cash provided by (used for) financing activities		81,803			(110,712	)		1,406			(27,503	)

Net increase in cash and temporary cash investments		102,930			1,744			111			104,785
Cash and temporary cash investments at beginning of period		59,339			1,755			24			61,118

Cash and temporary cash investments at end of period	$	162,269		$	3,499		$	135		$	165,903

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended September 30, 2011

(in thousands)(unaudited)


	Parent			Guarantors			Total
Operations
Net cash provided by (used for) operations	$	(27,270	)	$	84,671		$	57,401

Investments
Capital expenditures		(3,067	)		(7,148	)		(10,215	)
Proceeds from disposition of real estate		—			5,919			5,919
Other investments, net		(648	)		619			(29	)

Net cash provided by (used for) investments		(3,715	)		(610	)		(4,325	)

Financing
Net proceeds from revolving debt		32,000			—			32,000
Payments on revolving debt		(43,000	)		—			(43,000	)
Dividends paid on common stock		(5,184	)		—			(5,184	)
Net proceeds from exercise of stock options		106			—			106
Excess tax benefit from option exercises		115			—			115
Intercompany activity		85,371			(85,371	)		—

Net cash provided by (used for) financing activities		69,408			(85,371	)		(15,963	)

Net increase (decrease) in cash and temporary cash investments		38,423			(1,310	)		37,113
Cash and temporary cash investments at beginning of period		5,290			3,019			8,309

Cash and temporary cash investments at end of period	$	43,713		$	1,709		$	45,422

(7)

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, RSUs, performance shares, performance units and stock appreciation rights. 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-based bonus awards are also available under the plan.

Share-based compensation cost for awards to Belo’s employees and non-employee directors was $1,980 and $5,893, for the three and nine months ended September 30, 2012. Share-based compensation cost for awards to Belo’s employees and non-employee directors was $116 and $3,838, for the three and nine months ended September 30, 2011.

(8)

In February 2008, the Company spun-off its newspaper businesses and related assets to a separate company, A. H. Belo. Subsequent to the spin-off, Belo retained sponsorship of Pension Plan. As the sole plan sponsor for the Pension Plan, Belo continued to administer benefits for Belo and A. H. Belo current and former employees. In October 2010, Belo and A. H. Belo agreed to split the Pension Plan into separately-sponsored pension plans effective January 1, 2011. Under the agreement, participant benefit liabilities and assets allocable to current and former employees of A. H. Belo and its related newspaper businesses were transferred to new defined benefit pension plans created, sponsored, and managed by or on behalf of A. H. Belo. Effective January 1, 2011, the new A. H. Belo plans were solely responsible for paying participant benefits for the current and former employees of A. H. Belo, and the Company is no longer responsible for those liabilities. The participant benefit liabilities and assets pertaining to current and former employees of Belo, and its related television businesses, continue to be held by the Pension Plan sponsored by and managed by or on behalf of Belo Corp.

For Belo, the pension split transaction was treated as a settlement under ASC 715. Under settlement accounting for pensions, the split of the Company’s Pension Plan resulted in the transfer of $238,833 in Pension Plan assets, and $339,799 in Pension Plan liabilities to the plans sponsored by A. H. Belo. This resulted in a reduction in the net unfunded liability of $100,966, which was recorded as a non-cash settlement gain, and recognition of actuarial losses of $129,665 previously recognized in accumulated other comprehensive loss, which was recorded as a non-cash settlement charge. This settlement gain and charge resulted in a net non-cash settlement charge of $28,699. This charge was partially offset by a final net pension contribution reimbursement of $8,233 received from A. H. Belo as discussed below. The combined result of all pension transactions in the first quarter 2011 is a net charge before taxes of $20,466. Additionally, the Company’s effective tax rate for the first quarter 2011 reflects the impact of deferred tax adjustments of $7,143 in pension settlement items.

Belo’s funding policy is to contribute annually to the Pension Plan amounts sufficient to meet minimum funding requirements as set forth in employee benefit and tax laws, but not in excess of the maximum tax-deductible contribution. For the nine months ended September 30, 2012, the Company made contributions totaling $14,926 to the Pension Plan. During the remaining three months of 2012, the Company expects to make contributions of approximately $4,300 to the Pension Plan. No plan assets are expected to be returned to the Company during the year ending December 31, 2012. For the nine months ended September 30, 2011, the Company made contributions totaling $23,257 to the Pension Plan related to the 2010 and 2011 plan years and A. H. Belo reimbursed the Company $8,233. A. H. Belo has no further obligation to reimburse the Company for any contributions after the 2010 plan year.

Net periodic pension cost includes the following components for the three and nine months ended September 30, 2012 and 2011:


	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Interest cost on projected benefit obligation	$	3,115		$	3,414		$	9,345		$	10,244
Expected return on assets		(3,393	)		(3,018	)		(10,178	)		(9,055	)
Amortization of net loss		960			679			2,880			2,039

Net periodic pension cost before settlement charge		682			1,075			2,047			3,228
Settlement charge		—			—			—			28,699

Net periodic pension cost	$	682		$	1,075		$	2,047		$	31,927

(9)

On May 8, 2012, the shareholders of the Company approved amendments to, and the restatement of, the Company’s Certificate of Incorporation to, among other things, reduce the par value of Belo’s common stock from $1.67 per share to $0.01 per share and reduce the par value of Belo’s preferred stock from $1.00 per share to $0.01 per share. The Company has reflected the change in par values at September 30, 2012, and has retrospectively restated the Consolidated Condensed Balance Sheet as of December 31, 2011, to reflect the change in par values.

Noncontrolling interests on the Condensed Consolidated Balance Sheets relate to a newly formed majority-owned subsidiary. Earnings or losses are recorded each period to the Consolidated Condensed Statement of Earnings for the noncontrolling interests’ proportionate share of the subsidiary’s earnings or losses.

Equity is allocated between controlling and noncontrolling interests as follows:


	Belo Corp. Shareholders’ Equity			Noncontrolling Interests Equity			Total Equity
Balance at December 31, 2011	$	267,203		$	—		$	267,203
Net earnings (loss)		65,040			(301	)		64,739
Dividends declared		(24,842	)		—			(24,842	)
Common stock repurchased		(5,964	)		—			(5,964	)
Share-based compensation		3,114			—			3,114
Accumulated other comprehensive income		1,872			—			1,872
Other		241			—			241

Balance at September 30, 2012	$	306,664		$	(301	)	$	306,363

(10)	Under the terms of the separation and distribution agreement between the Company and A. H. Belo, A. H. Belo has agreed to indemnify the Company for any liability arising out of the lawsuit described in the following paragraph.

On October 24, 2006, 18 former employees of The Dallas Morning News filed a lawsuit against The Dallas Morning News, the Company, and others in the United States District Court for the Northern District of Texas. The plaintiffs’ lawsuit mainly consists of claims of unlawful discrimination and alleged ERISA violations. On March 28, 2011, the District Court granted defendants summary judgment and dismissed all claims. On July 15, 2011, the plaintiffs appealed the decision to the United States Court of Appeals for the Fifth Circuit. The Fifth Circuit affirmed the District Court’s decision. Plaintiffs have until November 19, 2012 to seek review by the U. S. Supreme Court. The Company believes the lawsuit is without merit and is vigorously defending against it.

In addition to the proceeding disclosed above, 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 consolidated results of operations and comprehensive income (loss), liquidity or financial position of the Company.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(dollars in thousands, except share and per share amounts)

The following information should be read in conjunction with the Company’s 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 a publicly-traded pure-play television company. The Company owns 20 television stations (nine in the top 25 U.S. markets) that reach more than 14 percent of U.S. television households, including ABC, CBS, NBC, FOX, CW and MyNetwork TV (MNTV) affiliates, and their associated Web sites, in 15 markets across the United States. The Company owns two local and two regional cable news channels.

The Company believes the success of its media franchises is built upon providing the highest quality local and regional news, entertainment programming and service to the communities in which they operate. These principles have built relationships with viewers, readers, advertisers and online users and have guided Belo’s success.

The following table sets forth the Company’s major media assets as of September 30, 2012:


Market	Market Rank⁽¹⁾		Station/ News Channel	Year Belo Acquired/ Started		Network Affiliation	Number of Commercial Stations in Market⁽²⁾
Dallas/Fort Worth		5	WFAA		1950	ABC		16
Dallas/Fort Worth		5	TXCN		1999	N/A		N/A
Houston		10	KHOU		1984	CBS		15
Seattle/Tacoma		12	KING		1997	NBC		13
Seattle/Tacoma		12	KONG		2000	IND		13
Seattle/Tacoma		12	NWCN		1997	N/A		N/A
Phoenix		13	KTVK		1999	IND		13
Phoenix		13	KASW		2000	CW		13
St. Louis		21	KMOV		1997	CBS		8
Portland⁽³⁾		22	KGW		1997	NBC		8
Charlotte		25	WCNC		1997	NBC		8
San Antonio		36	KENS		1997	CBS		10
Hampton/Norfolk		44	WVEC		1984	ABC		8
Austin		45	KVUE		1999	ABC		7
Louisville		48	WHAS		1997	ABC		7
New Orleans⁽⁴⁾		51	WWL		1994	CBS		8
New Orleans⁽⁵⁾		51	WUPL		2007	MNTV		8
Tucson		70	KMSB		1997	FOX		9
Tucson		70	KTTU		2002	MNTV		9
Spokane		73	KREM		1997	CBS		7
Spokane		73	KSKN		2001	CW		7
Boise⁽⁶⁾		111	KTVB		1997	NBC		5

(1)	Market rank is based on the relative size of the television market Designated Market Area (DMA), among the 210 DMAs generally recognized in the United States, based on the September 2012 Nielsen Media Research report.

(2)	Represents the number of commercial television stations (both VHF and UHF) broadcasting in the market, excluding public stations, low power broadcast stations and cable channels.

(3)	The Company also owns KGWZ-LD, a low power television station in Portland, Oregon.

(4)	WWL also produces “NewsWatch on Channel 15,” a 24-hour daily local news and weather cable channel.

(5)	The Company also owns WBXN-CA, a Class A television station in New Orleans, Louisiana.

(6)	The Company also owns KTFT-LP (NBC), a low power television station in Twin Falls, Idaho.

The discussion of the Company’s financial condition and results of operations that follows provides information that will assist in understanding the Company’s 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 Company’s financial statements.

The Company has network affiliation agreements with ABC, CBS, NBC, FOX, CW and MNTV. The Company’s network affiliation agreements generally provide the station with the exclusive right to broadcast over the air in its local service area all programs transmitted by the network with which the station is affiliated. As part of these agreements, the network has the right to sell most of the advertising time during such broadcasts and has historically paid the Company cash compensation. In 2011, some of the Company’s affiliation agreements included network compensation totaling $4,209. Beginning in 2012, the Company no longer receives cash payments for network compensation. As affiliation agreements have renewed, cash payments to the networks are included in these affiliation agreements for compensation related to programming provided by such networks. The Company renewed one of its network affiliation agreements effective at the beginning of 2010 and another in early 2011; a third major network affiliation agreement expires at the end of 2012. The Company’s two renewed agreements provide for payments to the networks and the third agreement is also expected to include payments to the network in 2013. Cash payments for reverse compensation to networks are included in programming expense.

The principal source of the Company’s revenue is from the sale of local, regional and national advertising. In even numbered years, the Company’s revenue also includes significant revenue from political advertising. Additional discussion regarding the Company’s results of operations for the three and nine months ended September 30, 2012, as compared to the three and nine months ended September 30, 2011, is provided below.

Results of Operations

(Dollars in thousands)


	Three months ended September 30, Percentage									Nine months ended September 30, Percentage
	2012			Change			2011			2012			Change			2011
Net operating revenues	$	176,273			16.0	%	$	151,999		$	509,790			8.5	%	$	469,848

Pension settlement charge and contribution reimbursements		—			NM			—			—			NM			20,466
Other operating costs and expenses		120,325			2.9	%		116,981			357,068			(0.1	%)		356,725

Total operating costs and expenses		120,325			2.9	%		116,981			357,068			(5.3	%)		377,191

Earnings from operations		55,948			59.8	%		35,018			152,722			64.8	%		92,657
Other income and (expense)		(17,186	)		2.4	%		(16,785	)		(50,683	)		(2.5	%)		(51,989	)

Earnings from operations before income taxes		38,762			112.6	%		18,233			102,039			150.9	%		40,668
Income tax expense		(14,148	)		213.0	%		(4,520	)		(37,300	)		183.0	%		(13,182	)

Net earnings		24,614			79.5	%		13,713			64,739			135.5	%		27,486
Less: Net (loss) attributable to non-controlling interests		(203	)		NM			—			(301	)		NM			—

Net earnings attributable to Belo Corp.	$	24,817			81.0	%	$	13,713		$	65,040			136.6	%	$	27,486

NM is not meaningful

Net Operating Revenues


	Three months ended September 30, Percentage							Nine months ended September 30, Percentage
	2012		Change			2011		2012		Change			2011
Spot advertising revenue	$	144,846		17.6	%	$	123,129	$	414,780		8.3	%	$	382,949
Other		31,427		8.9	%		28,870		95,010		9.3	%		86,899

Net operating revenues	$	176,273		16.0	%	$	151,999	$	509,790		8.5	%	$	469,848

Spot advertising revenue increased $21,717, or 17.6 percent, in the three months ended September 30, 2012, as compared to the three months ended September 30, 2011. This increase is due primarily to a $15,599 increase in political advertising revenue. Political revenues are generally higher in even-numbered years than in odd-numbered years due to elections for various state and national offices. Advertising excluding political was up 5.1% with increases in the automotive, consumer services, education and entertainment categories partially offset by decreases in the restaurant, professional services, home improvement and financial services categories. Other revenue increased due to a 20.7 percent increase in retransmission revenue and a 14.1 percent increase in Internet revenue. These increases were partially offset by a decline of $1,220 in network compensation.

Spot advertising revenue increased $31,831, or 8.3 percent, in the nine months ended September 30, 2012, as compared to the nine months ended September 30, 2011. This increase is primarily due to a $25,140 increase in political advertising revenue. Additionally, the Company had increases in the automotive, financial services and travel and tourism categories, partially offset by decreases in the telecommunications, entertainment, restaurants, grocery and healthcare categories. The increase in other revenue is due primarily to a 20.3 percent increase in retransmission revenue, a 13.7 percent increase in Internet revenue, and a $1,432 increase in cable copyright royalty payments, partially offset by a decline of $4,209 in network compensation.

Operating Costs and Expenses

Station salaries, wages and employee benefits increased $2,309, or 4.4 percent, in the three months ended September 30, 2012, compared to the three months ended September 30, 2011, primarily due to an increase of $1,085 related to sales commissions on higher revenue and increases in accrued performance-based bonus expense of $809. Station programming and other operating costs decreased $1,268, or 2.4 percent, in the three months ended September 30, 2012, compared to the three months ended September 30, 2011, primarily related to a $3,815 decrease in

programming costs partially offset by increases of $1,010 in national representation fees related to political revenues and $751 for repair and maintenance expenses. The decrease in programming costs was mostly related to savings in syndicated programming expenses, which were partially offset by a less significant increase in programming payments to the networks.

Station salaries, wages and employee benefits increased $6,084, or 3.8 percent, in the nine months ended September 30, 2012, compared to the nine months ended September 30, 2011, due primarily to an increase of $3,287 related to annual merit increases and sales commissions on higher revenue and increases in accrued performance-based bonus expense of $1,446. Station programming and other operating costs decreased $10,638, or 6.9 percent, in the nine months ended September 30, 2012, compared to the nine months ended September 30, 2011, primarily related to a $17,814 decrease in programming costs. The decrease in programming costs was mostly related to savings in syndicated programming expenses, which were partially offset by a less significant increase in programming payments to the networks. The decrease in programming expense was partially offset by a $1,265 increase in national representation fees related to political revenue, a $1,189 increase in advertising and promotion expense, a $1,408 increase in repair and maintenance expenses and increased spending for revenue-generating interactive initiatives.

Corporate operating costs increased $2,389, or 46.7 percent, in the three months ended September 30, 2012, compared to the three months ended September 30, 2011, due to increases primarily from the effect of the Company’s share price increase during the quarter on previously awarded equity compensation and accrued performance-based bonus expense totaling $2,099. Corporate operating costs increased $5,680, or 31.4 percent, in the nine months ended September 30, 2012, compared to the nine months ended September 30, 2011, primarily due to increases in equity-based compensation expenses and accrued performance-based bonus expense totaling $4,091.

Effective January 1, 2011, Belo split The G. B. Dealey Retirement Pension Plan (Pension Plan), transferring the benefit liabilities and assets pertaining to the current and former employees of A. H. Belo Corporation (A. H. Belo) to plans sponsored and administered by A. H. Belo. The participant benefit liabilities and assets pertaining to current and former employees of Belo, and its related television businesses, continue to be held by the Pension Plan sponsored by and managed by or on behalf of Belo. For Belo, the pension split transaction was treated as a settlement under ASC 715, which resulted in the transfer of $238,833 in Pension Plan assets and $339,799 in Pension Plan liabilities to the plans sponsored by A. H. Belo. These transfers resulted in a net non-cash settlement charge of $28,699. This charge was partially offset by a final net pension contribution reimbursement of $8,233 related to the 2010 plan year received from A. H. Belo. A. H. Belo has no further obligation to reimburse the Company for any contributions after the 2010 plan year. The combined result of all pension settlement transactions in the first quarter of 2011 is a net charge before taxes of $20,466.

Other Income (Expense)

Interest expense decreased $88 and $745 in the three and nine months ended September 30, 2012, respectively, due primarily to decreased amortization of financing costs associated with the variable rate debt related to the amendment of the Company’s credit facility in December 2011.

Income Tax Expense

Income taxes increased $9,628, for the three months ended September 30, 2012, compared with the three months ended September 30, 2011, primarily due to higher pretax earnings in 2012 and a tax benefit in 2011 due to the settlement of certain tax matters. Income taxes increased $24,118 for the nine months ended September 30, 2012, compared with the nine months ended September 30, 2011, primarily due to the $7,143 tax benefit in 2011 related to deferred tax adjustments for the pension settlement charge, settlement of certain tax matters in 2011 and higher pretax earnings in 2012.

Noncontrolling Interest

In the second quarter 2012, the Company entered into a newly formed subsidiary relationship in which the Company owns a greater than 50% interest.

Station-Adjusted EBITDA


	Three months ended September 30, Percentage									Nine months ended September 30, Percentage
	2012			Change			2011			2012			Change			2011
Station-Adjusted EBITDA	$	70,977			48.7	%	$	47,744		$	198,967			28.8	%	$	154,471
Corporate operating costs and expenses		(7,501	)		46.7	%		(5,112	)		(23,783	)		31.4	%		(18,103	)
Depreciation		(7,528	)		(1.1	%)		(7,614	)		(22,462	)		(3.4	%)		(23,245	)
Pension settlement charge and contribution reimbursements		—			NM			—			—			NM			(20,466	)

Earnings from operations	$	55,948			59.8	%	$	35,018		$	152,722			64.8	%	$	92,657

NM is not meaningful

Belo’s management uses Station-Adjusted EBITDA as the primary measure of profitability to evaluate operating performance and to allocate capital resources and bonuses to eligible operating company employees. Station-Adjusted EBITDA represents the Company’s earnings from operations before interest expense, income taxes, depreciation, amortization, impairment charges, pension settlement charge and contribution reimbursements and corporate operating costs and expenses. Other income (expense), net is not allocated to television station earnings from operations because it consists primarily of equity in earnings (losses) from investments in partnerships and joint ventures and other non-operating income (expense). Station-Adjusted EBITDA is a common alternative measure of performance used by investors, financial analysts and rating agencies to evaluate financial performance.

For the three months ended September 30, 2012, Station-Adjusted EBITDA increased $23,233, or 48.7 percent, compared with the three months ended September 30, 2011. For the nine months ended September 30, 2012, Station-Adjusted EBITDA increased $44,496, or 28.8 percent, compared with the nine months ended September 30, 2011. These increases were due to higher revenues and a reduction in expenses, including a decrease in programming costs, all discussed above.

Liquidity and Capital Resources

Net cash provided by operations, bank borrowings and long-term debt are Belo’s primary sources of liquidity.

Operating Cash Flows

Net cash provided by operations was $148,566 in the nine months ended September 30, 2012, compared with $57,401 in the nine months ended September 30, 2011. The 2012 operating cash flows were provided primarily by net earnings adjusted for non-cash items, receipt of a $31,615 federal income tax refund, and routine changes in working capital. The 2011 operating cash flows were primarily provided by net earnings adjusted for non-cash and pension-related items, pension contributions and routine changes in working capital. The increase in net cash provided by operations in 2012 as compared to 2011, is primarily due to higher earnings, related in large part to the non-cash net pension settlement charge in first quarter 2011, the receipt of the federal income tax refund, and lower pension contributions.

The Company contributed $14,926 to its Pension Plan during the nine months ended September 30, 2012 compared to contributions of $23,257 during the nine months ended September 30, 2011. As previously discussed, A. H. Belo was obligated to reimburse the Company for its portion of contributions related to the 2010 plan year the Company made to the Pension Plan. Such reimbursements totaled $8,233 during the nine months ended September 30, 2011. A. H. Belo has no further obligation to reimburse the Company for any contributions after the 2010 plan year.

Investing Cash Flows

Net cash flows used for investing activities were $16,278 in the nine months ended September 30, 2012, compared to $4,325 in the nine months ended September 30, 2011. The 2012 investing cash flows were primarily used for capital expenditures. The 2011 investing cash flows were primarily used for capital expenditures, mostly offset by proceeds from the sale of certain real estate.

Capital Expenditures

Total capital expenditures were $15,483 in the first nine months of 2012 compared with $10,215 in the first nine months of 2011.

Property Transaction

In June 2011, the Company received $5,919 in proceeds from the sale of real estate it had purchased in 2005 for potential construction and recorded an immaterial gain on the sale.

Financing Cash Flows

Net cash flows used for financing activities were $27,503 in the nine months ended September 30, 2012 compared with $15,963 in the nine months ended September 30, 2011. The 2012 financing cash flows consisted primarily of dividends paid and common stock repurchased. The 2011 financing cash flows consisted primarily of borrowings and repayments under the Company’s revolving credit facility and dividends paid.

Long-Term Debt

At September 30, 2012, Belo also had variable-rate debt capacity of $200,000 under a credit agreement (2011 Credit Agreement). As of September 30, 2012, the Company did not have an outstanding balance under the 2011 Credit Agreement, and all unused borrowings were available for borrowing. The Company is required to maintain certain leverage and interest ratios specified in the 2011 Credit Agreement. The leverage ratio is generally defined as the ratio of debt to cash flow and the senior leverage ratio is generally defined as the ratio of the debt under the credit facility to cash flow. The interest coverage ratio is generally defined as the ratio of interest expense to cash flow. At September 30, 2012, the Company’s leverage ratio was 3.6, its interest coverage ratio was 3.5 and its senior leverage ratio was 0.0. At September 30, 2012, the Company was in compliance with all debt covenant requirements.

The Company reclassified the balance of the 6³/₄% Senior Notes due May 30, 2013, from long-term debt to short-term debt because the debt is due in less than one year. The Company has elected to redeem the notes early on November 30, 2012. The Company expects to repay the notes with available cash.

Dividends

On October 29, 2012, the Company declared a special dividend of $0.25 per share on Series A and Series B common stock outstanding to be paid on December 21, 2012, to shareholders of record on November 30, 2012.

On September 20, 2012, the Company declared a quarterly dividend of eight cents per share on Series A and Series B common stock outstanding, to be paid on December 7, 2012, to shareholders of record on November 16, 2012.

On September 7, 2012, the Company paid a quarterly dividend of $8,249, or eight cents per share, on Series A and Series B common stock outstanding as of the record date of August 17, 2012.

On June 1, 2012, the Company paid a quarterly dividend of $8,330, or eight cents per share, on Series A and Series B common stock outstanding as of the record date of May 11, 2012.

On March 2, 2012, the Company paid a quarterly dividend of $5,201, or five cents per share, on Series A and Series B common stock outstanding as of the record date of February 10, 2012.

Share Repurchase

In the first nine months of 2012, the Company repurchased 1,020,653 shares of its Series A common stock pursuant to an authorization from Belo’s Board of Directors originally given in December 2005. There is no expiration date for this authorization. The remaining authorization for the repurchase of shares as of September 30, 2012, was 12,010,063 shares. The total cost of the shares purchased was $5,964. All shares repurchased in the first nine months of 2012 were retired as of September 30, 2012.

Other

On May 8, 2012, the shareholders of the Company approved amendments to, and the restatement of, the Company’s Certificate of Incorporation to, among other things, reduce the par value of Belo’s common stock from $1.67 per share to $0.01 per share and the par value of Belo’s preferred stock from $1.00 per share to $0.01 per share. The Company has reflected the change in par values at September 30, 2012, and has retrospectively restated the Consolidated Condensed Balance Sheet as of December 31, 2011, to reflect the change in par values.

The Company has various sources available to meet its 2012 capital and operating commitments, including cash on hand, short-term investments, internally-generated funds and the $200,000 2011 Credit Agreement. The Company believes its resources are adequate to meet its foreseeable needs.

Forward-Looking Statements

Statements in this Form 10-Q concerning Belo’s business outlook or future economic performance, anticipated profitability, revenues, expenses, capital expenditures, dividends, investments, future financings, impairments, pension matters, and 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 matters include, but are not limited to, uncertainties regarding changes in capital market conditions and prospects, and other factors such as changes in advertising demand, interest and discount rates and programming and production costs; changes in viewership patterns and demography, and actions by Nielsen and its competitors; changes in the network-affiliate business model for broadcast television; technological changes, and the development of new systems and devices to distribute and consume television and other audio-visual content; changes in the ability to secure, and in the terms of, carriage of Belo programming on cable, satellite, telecommunications and other program distribution methods; development of Internet commerce; industry cycles; changes in pricing or other actions by competitors and suppliers; Federal Communications Commission and other regulatory, tax and legal changes, including changes regarding spectrum; 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, dispositions, co-owned ventures and investments; Pension Plan matters; general economic conditions; and significant armed conflict, as well as other risks detailed in Belo’s other public disclosures and filings with the Securities and Exchange Commission (“SEC”), including Belo’s 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 Company’s exposure to market risk from the disclosure included in the Annual Report on Form 10-K for the year ended December 31, 2011.

Item 4.

Controls and Procedures

During the quarter ended September 30, 2012, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, Belo’s internal control over financial reporting.

The Company carried out an evaluation under the supervision and with the participation of the Company’s management, including the Company’s president and Chief Executive Officer and senior vice president/Chief

Financial Officer and Treasurer, of the effectiveness of the Company’s disclosure controls and procedures, as of the end of the period covered by this report. Based upon that evaluation, the president and Chief Executive Officer and senior vice president/Chief Financial Officer and Treasurer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective such that information relating to the Company (including its consolidated subsidiaries) required to be disclosed in the Company’s 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 Company’s management, including the president and Chief Executive Officer and senior vice president/Chief Financial Officer and Treasurer, as appropriate, to allow timely decisions regarding required disclosure.

PART II.

Item 1.

Legal Proceedings

In addition to the proceeding previously described (see Note 10 to the Consolidated Condensed Financial Statements in Part I, Item 1) for which there are no material developments to report, 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.

Item 1A.

Risk Factors

There have been no material changes in the Company’s risk factors from the disclosure included in the Company’s Annual Report on Form-10-K for the year ended December 31, 2011.

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.

Issuer Purchases of Equity Securities

None

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

None.

Item 5.

Other Information

None.

Item 6.

Exhibits

Exhibits marked with an asterisk (*) are incorporated by reference to documents previously filed by the Company with the Securities and Exchange Commission, 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

2.1	*	Separation and Distribution Agreement by and between Belo Corp. and A. H. Belo Corporation dated as of February 8, 2008 (Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 12, 2008 (Securities and Exchange Commission File No. 001-08598)(the “February 12, 2008 Form 8-K”))


3.1	*	Amended and Restated Certificate of Incorporation of the Company dated May 9, 2012 (Exhibit 3.1(i) to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 10, 2012 (Securities and Exchange Commission File No. 001-08598)(the May 10, 2012 Form 8-K”))

3.2	*	Certificate of Designation of Series B Common Stock of the Company dated May 9, 2012 (Exhibit 3.1(i) to the May 10, 2012 Form 8-K)

3.3	*	Amended and Restated Bylaws of the Company, effective March 9, 2009 (Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 11, 2009 (Securities and Exchange Commission File No. 001-08598)(the “March 11, 2009 Form 8-K”))

3.4	*	Amendment No. 1 to the Bylaws of Belo Corp. (as amended and restated effective March 9, 2009) (Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 29, 2011 (Securities and Exchange Commission File No 001-08598))

3.5	*	Amendment No. 2 to the Bylaws of Belo Corp. (as amended and restated effective March 9, 2009)(Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 23, 2011 (Securities and Exchange Commission File No. 001-08598))

4.1		Certain rights of the holders of the Company’s Common Stock are set forth in Exhibits 3.1-3.5 above

4.2	*	Specimen Form of Certificate representing shares of the Company’s Series A Common Stock (Exhibit 4.1 to the May 10, 2012 Form 8-K)

4.3	*	Specimen Form of Certificate representing shares of the Company’s Series B Common Stock (Exhibit 4.2 to the May 10, 2012 Form 8-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 Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 (Securities and Exchange Commission File No. 002-74702)(the “2^ndQuarter 1997 Form 10-Q”))

		(2)	*	$200 million 7³/₄% Senior Debenture due 2027 (Exhibit 4.6(4) to the 2^ndQuarter 1997 Form 10-Q)

		(3)	*	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 2^ndQuarter 1997 Form 10-Q)

		(4)	*	(a)	$200 million 7¹/₄% Senior Debenture due 2027 (Exhibit 4.6(6)(a) to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1997 (Securities and Exchange Commission File No. 002-74702)(the “3^rdQuarter 1997 Form 10-Q”))

			*	(b)	$50 million 7¹/₄% Senior Debenture due 2027 (Exhibit 4.6(6)(b) to the 3^rdQuarter 1997 Form 10-Q)

		(5)	*	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 3^rdQuarter 1997 Form 10-Q)

		(6)	*	Form of Belo Corp. 6³/₄% Senior Notes due 2013 (Exhibit 4.3 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 26, 2006 (Securities and Exchange Commission File No. 001-08598)(the “May 26, 2006 Form 8-K”))

		(7)	*	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)

		(8)	*	Underwriting Agreement Standard Provisions (Debt Securities), dated May 24, 2006 (Exhibit 1.1 to the May 26, 2006 Form 8-K)


	(9)	*	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)	*	Form of Belo Corp. 8% Senior Notes due 2016 (Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 16, 2009 (Securities and Exchange Commission File No. 001-08598)(the “November 16, 2009 Form 8-K”))

	(11)	*	Supplemental Indenture, dated November 16, 2009 among the Company, the Guarantors of the Notes and The Bank of New York Mellon Trust Company, N.A., as Trustee (Exhibit 4.1 to the November 16, 2009 Form 8-K)

	(12)	*	Underwriting Agreement, dated November 10, 2009, between the Company, the Guarantors of the Notes and JPMorgan Securities, Inc. (Exhibit 1.1 to the November 16, 2009 Form 8-K)

10.1	Financing agreements:

	(1)	*	Amendment and Restatement Agreement, dated as of November 16, 2009 to Amended and Restated Five-Year Competitive Advance and Revolving Credit Facility Agreement, dated as of February 26, 2009, among the Company, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other parties thereto (Exhibit 10.1 to the November 16, 2009 Form 8-K)

	(2)	*	Guarantee Agreement dated as of February 26, 2009, among Belo Corp., the Subsidiaries of Belo Corp. identified therein and JPMorgan Chase Bank, N.A. (Exhibit 10.1(4) to the Company’s Annual Report on Form 10-K dated March 2, 2009 (Securities and Exchange Commission File No. 001-08598)

	(3)	*	Form of Supplement, dated as of November 16, 2009, to the Guarantee Agreement dated as of February 26, 2009, among the Company, the Subsidiaries of the Company from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (Exhibit 10.2 to the November 16, 2009 Form 8-K)

	(4)	*	First Amendment dated as of August 11, 2010, to its Amended and Restated Five-Year Competitive Advance and Revolving Credit Facility Agreement dated as of February 26, 2009, as further amended and restated as of November 16, 2009, among the Company, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other parties thereto (Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 13, 2010 (Securities and Exchange Commission File No. 001-08598))

	(5)	*	Amendment and Restated Revolving Credit Facility Agreement, dated as of December 21, 2011, among the Company, as Borrower; JPMorgan Chase Bank, N.A., as Administrative Agent; JPMorgan Securities LLC, Suntrust Robinson Humphrey, Inc., and RBC Capital Markets, as Joint Lead Arrangers and Joint Bookrunners; Suntrust Bank and Royal Bank of Canada as Co-Syndication agents, The Northern Trust Company and Capital One N.A. as Co-Documentation Agents (Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 22, 2011 (Securities and Exchange file No. 001-08598)(the “December 22, 2011 Form 8-K))

	(6)	*	Guarantee Agreement dated as of December 21, 2011, among Belo Corp., the Subsidiaries of Belo Corp. identified therein and JPMorgan Chase Bank, N.A. (Exhibit 10.2 to the December 22, 2011 Form 8-K)

~10.2	Compensatory plans:

	~(1)		Belo Savings Plan:

		*	(a)	Belo Savings Plan Amended and Restated effective January 1, 2008 (Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 11, 2007 (Securities and Exchange Commission File No. 001-08598)(the “December 11, 2007 Form 8-K”))

		*	(b)	First Amendment to the Amended and Restated Belo Savings Plan effective as of January 1, 2008 (Exhibit 10.2(1)(b) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (Securities and Exchange Commission File No. 001-08598))


	*	(c)	Second Amendment to the Amended and Restated Belo Savings Plan effective as of January 1, 2009 (Exhibit 10.2(1)(c) to the Company’s Annual Report on Form 10-K dated March 2, 2009 (Securities and Exchange Commission File No 001-08598)( the “2008 Form 10-K”))

	*	(d)	Third Amendment to the Amended and Restated Belo Savings Plan effective as of April 12, 2009 (Exhibit 10.1 to the March 11, 2009 Form 8-K)

	*	(e)	Fourth Amendment to the Amended and Restated Belo Savings Plan effective as of September 10, 2009 (Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 10, 2009 (Securities and Exchange Commission File No 001-08598))

	*	(f)	Fifth Amendment to the Amended and Restated Belo Savings Plan dated December 3, 2010 (Exhibit 10.2.1(f) to the Company’s Annual Report on Form 10-K dated March 11, 2011 (Securities and Exchange Commission file No. 001-08598))

~(2)	*	Belo 1995 Executive Compensation Plan, as restated to incorporate amendments through December 4, 1997 (Exhibit 10.3(3) to the Company’s Annual Report on Form 10-K dated March 19, 1998 (Securities and Exchange Commission File No. 002-74702))

	*	(a)	Amendment to 1995 Executive Compensation Plan, dated July 21, 1998 (Exhibit 10.2(3)(a) to the Company’s Quarterly report on form 10-Q for the quarter ended June 30, 1998 (Securities and Exchange Commission File No. 002-74702))

	*	(b)	Amendment to 1995 Executive Compensation Plan, dated December 16, 1999 (Exhibit 10.2(3)(b) to the Company’s Annual Report on Form 10-K dated March 15, 2000 (Securities and Exchange Commission File No. 001-08598)(the “1999 Form 10-K”))

	*	(c)	Amendment to 1995 Executive Compensation Plan, dated December 5, 2003 (Exhibit 10.3(3)(c) to the Company’s 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 Company’s Annual Report on Form 10-K dated March 6, 2006 (Securities and Exchange Commission File No. 001-08598)(the “2005 Form 10-K”))

~(3)	*	Management Security Plan (Exhibit 10.3(1) to the Company’s Annual Report on Form 10-K dated March 12, 1997 (Securities and Exchange Commission No. 001-08598))

	*	(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)

~(4)		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)

	*	(b)	Belo Supplemental Executive Retirement Plan As Amended and Restated Effective January 1, 2007 (Exhibit 99.6 to the December 11, 2007 Form 8-K)

	*	(c)	Belo Supplemental Executive Retirement Plan As Amended and Restated Effective January 1, 2008 (Exhibit 10.2(5)(c) to the 2008 Form 10-K)

~(5)	*	Belo Pension Transition Supplement Restoration Plan effective April 1, 2007 (Exhibit 99.5 to the December 11, 2007 Form 8-K)

	*	(a)	First Amendment to the Belo Pension Transition Supplement Restoration Plan, dated May 12, 2009 (Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 14, 2009 (Securities and Exchange Commission File No. 001-08598))

	*	(b)	Second Amendment to the Belo Pension Transition Supplement Restoration Plan, dated March 5, 2010 (Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 8, 2010 (Securities and Exchange Commission file No. 001-08598))


	~(6)	*	Belo 2000 Executive Compensation Plan (Exhibit 4.15 to the Company’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on August 4, 2000 (Securities and Exchange Commission File No. 333-43056))

		*	(a)	First Amendment to Belo 2000 Executive Compensation Plan effective as of December 31, 2000 (Exhibit 10.2(6)(a) to the Company’s Annual Report on Form 10-K dated March 12, 2003 (Securities and Exchange Commission File No. 001-08598 (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)(c) to the 2005 Form 10-K)

	~(7)	*	Belo Amended and Restated 2004 Executive Compensation Plan (Exhibit 10.2(8) to the Company’s Annual Report on Form 10-K dated March 12, 2010 (Securities and Exchange Commission File No. 001-08598)(the “2009 Form 10-K”))

		*	(a)	Form of Belo 2004 Executive Compensation Plan Award Notification for Employee Option Awards (Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 2, 2006 (Securities and Exchange Commission File No. 001-08598))

		*	(b)	Form of Belo 2004 Executive Compensation Plan Award Notification for Employee Time-Based Restricted Stock Unit Awards (Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 5, 2012 (Securities and Exchange Commission file No. 001-08598))

		*	(c)	Form of Award Notification under the Belo 2004 Executive Compensation Plan for Non-Employee Director Awards (Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 12, 2005 (Securities and Exchange Commission File No. 001-08598))

	~(8)	*	Summary of Non-Employee Director Compensation (Exhibit 10.2(9) to the 2009 Form 10-K)

	~(9)	*	Belo Corp. Change In Control Severance Plan (Exhibit 10.2(10) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 (Securities and Exchange Commission File No. 001-08598))

10.3	Agreements relating to the spin-off distribution of A. H. Belo:

	(1)	*	Tax Matters Agreement by and between Belo Corp. and A. H. Belo Corporation dated as of February 8, 2008 (Exhibit 10.1 to the February 12, 2008 Form 8-K)

		*	(a)	First Amendment to Tax Matters Agreement by and between Belo Corp. and A. H. Belo Corporation dated as of September 14, 2009 (Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 15, 2009 (Securities and Exchange Commission File No. 001-08598))

	(2)	*	Employee Matters Agreement by and between Belo Corp. and A. H. Belo Corporation dated as of February 8, 2008 (Exhibit 10.2 to the February 12, 2008 Form 8-K)

		*	(a)	Amendment to Employee Matters Agreement as set forth in the Pension Plan Transfer Agreement dated as of October 6, 2010 (Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 8, 2010 (Securities and Exchange Commission File No. 001-08598)(the “October 8, 2010 Form 8-K”))

	(3)	*	Services Agreement by and between Belo Corp. and A. H. Belo Corporation dated as of February 8, 2008 (Exhibit 10.3 to the February 12, 2008 Form 8-K)


		(4)	*	Pension Plan Transfer Agreement by and between Belo Corp. and A. H. Belo Corporation dated as of October 6, 2010 (Exhibit 10.1 to the October 8, 2010 Form 8-K)

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32	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


¥101.INS		XBRL Instance Document
¥101.SCH		XBRL Taxonomy Extension Schema Document
¥101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
¥101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
¥101.LAB		XBRL Taxonomy Extension Labels Linkbase Document
¥101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

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.


	BELO CORP.

October 31, 2012	By:	/s/ Carey P. Hendrickson
		Carey P. Hendrickson
		Senior Vice President/Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company