DALLAS, Feb. 8 /PRNewswire-FirstCall/ -- Belo Corp. (NYSE:BLC)
today reported net earnings per share for the fourth quarter and
full-year 2006 of $0.50 and $1.26, respectively, compared with
$0.36 and $1.12, respectively, for the fourth quarter and full-year
2005. 2006 in Review Robert W. Decherd, Belo's chairman, president,
and chief executive officer, said, "Belo finished 2006 with a
strong fourth quarter propelled by the same factors that produced
our solid full-year 2006 financial performance: outstanding revenue
performance by the Television Group, diligent expense management,
and continued rapid growth in online revenues. In the fourth
quarter, consolidated revenues increased six percent and
consolidated EBITDA rose 13 percent, with double-digit segment
EBITDA growth in both the Television Group and Newspaper Group.
"From an operating standpoint, Belo made significant progress
during 2006 in focusing our businesses to compete in an
increasingly Internet-centric marketplace. We undertook numerous
transformational initiatives in 2006 and our operations will
continue to evolve in 2007 as we aggressively move Belo's
businesses forward and shape them to reflect fundamental changes in
media usage habits by consumers and advertisers. "In 2006, the
Television Group achieved its highest spot revenues ever -- both
including and excluding political revenues -- with an increase in
total spot revenue of nearly 10 percent versus 2005. Despite the
challenging advertising environment faced by newspapers across the
country through most of 2006, Belo's Newspaper Group revenues
declined less than one percent for the full year, including an
estimated incremental $25 million in 2006 circulation revenue
related to the change in the distribution methods initially
implemented in 2005 at The Dallas Morning News. Online ad revenues
associated with Belo's Web sites grew to $64 million in 2006, a 48
percent increase versus the prior year, including an increase of 43
percent in the fourth quarter -- the seventh time in the last eight
quarters that online ad revenues have increased by 40 percent or
more." Fourth quarter 2006 earnings include special charges
totaling $0.03 per share (a pre-tax charge of $4.1 million related
to the freezing of benefits under Belo's pension plan and a pre-tax
severance charge of $1.3 million related to a voluntary severance
program at The Dallas Morning News announced in September 2006) and
credits totaling $0.05 per share (a credit of $3.1 million
resulting from favorable claims experience in 2006 for the
Company's workers compensation and self-insured medical programs
and a credit of $3 million resulting from the favorable settlement
of certain state tax liabilities). Fourth quarter 2006 also
includes an expense of $5.7 million for stock-based compensation,
or $0.04 per share. In addition to the fourth quarter items noted
above, full-year 2006 results include the following: * additional
severance expense, as previously disclosed, related to personnel
reductions at The Dallas Morning News and The Press- Enterprise of
$5.9 million, or $0.04 per share; * transition costs related to the
Company's technology initiatives of approximately $22 million, or
$0.13 per share; * additional stock-based compensation expense of
$11 million, or $0.07 per share; * a gain of $7.5 million, or $0.05
per share, related to a change-in- control provision in one of the
Company's vendor contracts; and, * a credit of $3.8 million, or
$0.04 per share, related to the Texas Legislature's enactment of a
new margin tax to replace the previous franchise tax. Stock-based
compensation expense recorded in 2006 is incremental to 2005 as
Belo began expensing stock-based compensation expense in 2006 in
accordance with new accounting rules; this expense will continue in
2007. Also, the Company's total technology costs in 2007, which
will include approximately $5 million in final transition costs and
a full year of technology out-tasking expense, are expected to be
similar to total technology costs (including transition costs) in
2006. Full-year 2005 earnings include a $3.5 million credit to
network compensation to adjust for previously deferred revenue
related to Belo's NBC affiliation agreement, or $0.02 per share,
and an estimated net earnings per share impact of $0.06 from lost
revenues and incremental expenses related to Hurricanes Katrina and
Rita. Consolidated Belo's fourth quarter 2006 consolidated revenue
increased six percent to $437 million versus the fourth quarter of
2005, while full-year 2006 revenue increased 4.1 percent to $1.59
billion as compared to full-year 2005. Political revenues in Belo's
Television Group were $32 million in the fourth quarter and $47
million for full-year 2006. Consolidated EBITDA increased 13
percent in the fourth quarter of 2006 and slightly for full-year
2006. Total operating costs and expenses increased 3.2 percent in
the fourth quarter of 2006 versus the fourth quarter of 2005 and
5.7 percent for full-year 2006. Television Group Television Group
total and spot revenues both increased 17 percent in the fourth
quarter, including political revenue, with double-digit increases
at 16 of Belo's 19 television stations. Local and national spot
revenue increased 0.4 percent. Political revenues were $32 million
in the fourth quarter of 2006 compared to $3.3 million in the
fourth quarter of 2005. For the full- year 2006, Television Group
revenues increased 9.5 percent with a 9.7 percent increase in spot
revenue. Full-year 2006 political revenues were $47 million
compared to $7.3 million for full-year 2005. Advertising revenues
from Belo's Television Group Web sites increased 47 percent in the
fourth quarter and 55 percent for the full year. Television Group
segment costs and expenses increased 6.2 percent in the fourth
quarter of 2006 versus the prior year with a 31 percent increase in
segment EBITDA. For the full year, the Television Group's segment
costs and expenses increased 3.5 percent while segment EBITDA
increased 19 percent. The Television Group's segment EBITDA margin
of 47.3 percent in the fourth quarter was the highest quarterly
margin ever reported by Belo's Television Group. Newspaper Group
Newspaper Group total revenues decreased 3.2 percent in the fourth
quarter of 2006 versus the previous year with a decline in
advertising revenue of 3.6 percent. The fourth quarter of 2006 had
one more Sunday than the fourth quarter of 2005. Adjusting for the
additional Sunday, Newspaper Group total and advertising revenues
were down approximately 4.8 percent and 5.4 percent, respectively.
On the same basis, advertising revenue decreased 5.3 percent at The
Dallas Morning News, six percent at The Providence Journal and 5.4
percent at The Press-Enterprise. Advertising revenues associated
with the Newspaper Group's Web sites increased 41 percent versus
the fourth quarter of the prior year. For the full year, Newspaper
Group total revenue decreased 0.6 percent with a 1.9 percent
decrease in advertising revenue, including a 46 percent increase in
Web site advertising revenue. Newspaper Group segment costs and
expenses decreased 6.9 percent in the fourth quarter of 2006 versus
the fourth quarter of 2005, yielding an increase in fourth quarter
Newspaper Group segment EBITDA of 11 percent. Newsprint expense
decreased 18 percent in the fourth quarter with a 25 percent
decrease in consumption, some of which is related to planned
initiatives implemented in April 2006 that reduced state and
third-party circulation at The Dallas Morning News. For full-year
2006, segment costs and expenses for the Newspaper Group increased
2.4 percent including a 7.2 percent decrease in newsprint expense.
Segment EBITDA for the Newspaper Group decreased 11 percent for
full-year 2006. Corporate Corporate costs and expenses were $30.9
million in the fourth quarter of 2006 as compared to $15.5 million
in the fourth quarter of 2005, including approximately $3 million
in transition costs associated with enterprise-wide technology
initiatives, the initial quarterly technology out-tasking expense
of $7.3 million and stock-based compensation expense of $3.4
million. Beginning in 2007, the technology out-tasking costs will
be allocated approximately 30 percent to the Newspaper Group, 20
percent to the Television Group and the balance to Corporate.
Corporate costs and expenses were $100 million for full-year 2006
as compared to $60 million for full-year 2005, mostly due to
transition costs of approximately $21 million associated with
enterprise-wide technology initiatives, the initial quarterly
technology out-tasking expense of $7.3 million and $11 million of
incremental stock-based compensation expense. Belo's total
depreciation and amortization expense increased slightly in the
fourth quarter of 2006 and decreased slightly for the full year as
compared to the same periods in 2005. Total debt at December 31,
2006, was $1.3 billion. The Company repurchased 1.2 million shares
in the fourth quarter for a total of $23 million and invested $52
million in capital expenditures. For full-year 2006, the Company
repurchased 7.6 million shares for a total of $144 million (or an
average price per share of $19.13) and, as planned, invested $114
million in capital expenditures. Interest expense decreased 1.5
percent in the fourth quarter. Belo's leverage ratio, as defined in
the Company's credit facility, was 3.0 times at December 31, 2006.
Non-GAAP Financial Measures A reconciliation of Consolidated EBITDA
to net earnings is set forth in an exhibit to this release. First
Quarter 2007 Outlook Regarding Belo's outlook for the first quarter
of 2007, Dunia A. Shive, Belo's president/Media Operations, said,
"Comparables for Belo's Television Group will be difficult in 2007,
beginning in the first quarter as we cycle against an 8.7 percent
increase in spot revenue in the first quarter of 2006, which
benefited from incremental political and Olympics revenue. Still,
we currently expect total Television Group revenue to show some
slight growth for the quarter as a whole. "Like all newspapers,
Belo's Newspaper Group will face continuing challenges in the first
quarter. We expect our Newspaper Group revenue to be lower in the
first quarter of 2007 than in the first quarter of 2006, which was
our newspapers' best quarter last year. "Online ad revenue
associated with the Web sites of Belo's television stations and
newspapers is expected to continue growing at a strong rate in the
first quarter of 2007. Consolidated operating costs and expenses in
the first quarter are currently expected to increase at a
low-single digit rate versus the prior year." Decherd said, "Last
fall, I noted that Belo will provide less specific financial
guidance beginning in 2007. We are mindful that peer companies have
made recent statements about either discontinuing or reaffirming
the issuance of monthly statistical reports. Over the next few
weeks, we will be considering the value of providing monthly
reports from a shareholder perspective, knowing that increasingly,
a single month's performance is not necessarily a reliable
indicator of quarterly advertising patterns. Regardless of the
frequency with which we issue such data, our aim is to provide the
investment community with value-added information that offers
meaningful insight into Belo's operating trends." A conference call
to discuss this earnings release and other matters of interest to
shareholders and analysts will follow at 1:00 p.m. CST this
afternoon. The conference call will be simultaneously Webcast on
the Company's Web site (http://www.belo.com/invest ). Following the
conclusion of the Webcast, a replay of the conference call will be
archived on Belo's Web site. To access the listen-only conference
lines, dial 1-800-700-8174. A replay line will be open from 4:30
p.m. CST on February 8 until 11:59 p.m. CST on February 15. To
access the replay, dial 800-475-6701 or 320-365-3844. The access
code for the replay is 860414. About Belo Belo Corp. is one of the
nation's largest media companies with a diversified group of
market-leading television, newspaper, cable and interactive media
assets. A Fortune 1000 company with 7,100 employees and $1.6
billion in annual revenues, Belo operates in some of America's most
dynamic markets in Texas, the Northwest, the Southwest, the
Mid-Atlantic and Rhode Island. Belo owns 19 television stations,
six of which are in the 15 largest U.S. broadcast markets. The
Company also owns or operates seven cable news channels and manages
one television station through a local marketing agreement. Belo's
daily newspapers are The Dallas Morning News, The Providence
Journal, The Press-Enterprise (Riverside, CA) and the Denton
Record-Chronicle (Denton, TX). The Company also publishes specialty
publications targeting young adults, and the fast-growing Hispanic
market, including Quick and Al Dia in Dallas/Fort Worth, and El D
and La Prensa in Riverside. Belo operates more than 30 Web sites
associated with its operating companies. Additional information is
available at http://www.belo.com/ or by contacting Carey
Hendrickson, vice president/Investor Relations & Corporate
Communications, at 214-977-6626. Statements in this communication
concerning Belo's business outlook or future economic performance,
anticipated profitability, revenues, expenses, 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 (including the
censure of The Dallas Morning News) 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 WWL-TV, from the effects of
Hurricane Katrina; 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 the Annual Report on Form 10-K. BELO
Corp. Consolidated Statements of Earnings Three months ended Twelve
months ended December 31, December 31, In thousands, except per
share amounts (unaudited) 2006 2005 2006 2005 Net Operating
Revenues $436,597 $411,937 $1,588,272 $1,525,770 Operating Costs
and Expenses Salaries, wages and employee benefits 145,580 135,242
581,516 544,806 Other production, distribution and operating costs
133,116 126,463 488,855 446,216 Newsprint, ink and other supplies
32,138 38,804 133,758 142,911 Depreciation 21,721 21,653 87,384
87,511 Amortization 2,087 2,087 8,348 8,380 Total operating costs
and expenses 334,642 324,249 1,299,861 1,229,824 Earnings from
operations 101,955 87,688 288,411 295,946 Other income and expense
Interest expense (22,618) (22,956) (95,654) (91,004) Other income
(expense), net (1) 966 653 10,926 2,018 Total other income and
expense (21,652) (22,303) (84,728) (88,986) Earnings Earnings
before income taxes 80,303 65,385 203,683 206,960 Income taxes
28,954 25,459 73,157 79,272 Net earnings $51,349 $39,926 $130,526
$127,688 Net earnings per share Basic $.50 $.37 $1.26 $1.14 Diluted
$.50 $.36 $1.26 $1.12 Average shares outstanding Basic 102,262
109,204 103,701 112,104 Diluted 102,433 110,208 103,882 113,552
Cash dividends declared per share $0.125 $0.10 $0.475 $0.40 Certain
amounts have been reclassified to conform to the current
presentation. Note 1: Other income (expense), net consists
primarily of equity earnings (losses) from partnerships and joint
ventures and other miscellaneous income (expense). BELO Corp.
Consolidated Condensed Balance Sheets December 31, December 31, In
thousands 2006 2005 Assets Current assets Cash and temporary cash
investments $46,291 $33,243 Accounts receivable, net 276,825
262,240 Other current assets 61,047 60,794 Total current assets
384,163 356,277 Property, plant and equipment, net 560,494 534,112
Intangible assets, net 2,574,218 2,582,566 Other assets 95,403
116,258 Total assets $3,614,278 $3,589,213 Liabilities and
Shareholders' Equity Current liabilities Accounts payable $79,605
$91,210 Accrued expenses 102,004 97,142 Short term debt --- ---
Other current liabilities 77,303 59,077 Total current liabilities
258,912 247,429 Long-term debt 1,283,434 1,244,875 Deferred income
taxes 435,154 445,730 Other liabilities 109,630 117,698 Total
shareholders' equity 1,527,148 1,533,481 Total liabilities and
shareholders' equity $3,614,278 $3,589,213 Note: Certain amounts
have been reclassified to conform to the current presentation. BELO
Corp. Segment Information Three months ended Twelve months ended
December 31, December 31, In thousands (unaudited) 2006 2005 2006
2005 Television Group Net operating revenues $223,384 $191,638
$770,539 $703,426 Segment costs and expenses 117,726 110,828
444,870 429,910 Segment EBITDA $105,658 $80,810 $325,669 $273,516
Newspaper Group Net operating revenues $213,213 $220,299 $817,733
$822,344 Segment costs and expenses 162,181 174,228 659,155 643,967
Segment EBITDA $51,032 $46,071 $158,578 $178,377 Corporate Costs
and expenses $30,927 $15,453 $100,104 $60,056 Certain amounts have
been reclassified to conform to the current presentation. Note 1:
Belo's 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 segment's earnings before
interest expense, income taxes, depreciation and amortization.
Other income (expense), net is not allocated to the Company's
operating segments because it consists primarily of equity earnings
(losses) from investments in partnerships and joint ventures and
other non-operating income (expense). BELO Corp. Consolidated
EBITDA In thousands (unaudited) Three months ended Twelve months
ended December 31, December 31, In thousands (unaudited) 2006 2005
2006 2005 Consolidated EBITDA (1) $126,729 $112,081 $395,069
$393,855 Depreciation and Amortization (23,808) (23,740) (95,732)
(95,891) Interest Expense (22,618) (22,956) (95,654) (91,004)
Income Taxes (28,954) (25,459) (73,157) (79,272) Net Earnings
$51,349 $39,926 $130,526 $127,688 Note 1: 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 accounting principles
generally accepted in the United States. Management uses
Consolidated EBITDA in internal analyses as a supplemental measure
of the financial performance of the Company to assist it with
determining consolidated performance targets and 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 similarity titled measures of
other companies. DATASOURCE: Belo Corp. CONTACT: Carey Hendrickson,
vice president-Investor Relations & Corporate Communications of
Belo Corp., +1-214-977-6626 Web site: http://www.belo.com/
http://www.belo.com/invest
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