DALLAS, April 29 /PRNewswire-FirstCall/ -- Belo Corp. (NYSE:BLC)
today reported first quarter earnings per share of $0.10 from
continuing operations, before spin-off related charges, compared to
$0.15 in the first quarter of 2007. Spin-off related charges
included transaction and financing costs totaling approximately
$3.2 million, net of taxes, and the previously disclosed one- time
tax charge of $18.2 million related to the transfer of certain
intangibles in connection with the spin-off. The reported loss per
share from continuing operations, including the spin-off charges,
was ($0.11) in the first quarter of 2008. The loss per share from
continuing operations excludes the results of Belo's newspaper
businesses and related assets, which were spun off on February 8,
2008. Those results are included in discontinued operations for the
period from January 1 to the February 8 spin-off date and total
($0.04) per share. The reported net loss per share including
discontinued operations was ($0.15) compared to net earnings per
share of $0.15 in the first quarter of 2007. Earnings per share in
the first quarter of 2007 included a credit from the settlement of
the Company's Hurricane Katrina-related insurance claim totaling
$0.02 per share, net of taxes. Dunia A. Shive, Belo's president and
Chief Executive Officer, said, "The completion of the spin-off
marks a major transition in Belo's 166-year history. Belo is now
one of the largest pure-play publicly-traded television companies
in the country. With a leading collection of television assets
located in attractive growth markets, the Company is ideally
positioned to capitalize on both short and long-term opportunities.
"While Belo's results were highlighted by strong first quarter
political revenues and continued impressive growth in its online
businesses, soft advertising conditions contributed to a 2 percent
decline in first quarter total revenue. In addition, the Company
cycled against a very strong performance in first quarter 2007,
which included the airing of the Super Bowl on our five CBS
affiliates in 2007 versus our one FOX affiliate in 2008." First
Quarter in Review Operating Results Total revenues decreased 2
percent in the first quarter of 2008 versus the prior year. Total
spot revenue, including political, was down 5 percent with 6.4
percent and 10 percent decreases in local and national spot,
respectively. First quarter 2008 revenues were affected by a soft
advertising environment, particularly in the automotive category.
The Company's 2008 results were also impacted by the Super Bowl
airing on its single FOX affiliate versus its five CBS affiliates
in 2007, resulting in a $2 million unfavorable revenue variance.
First quarter 2008 political revenues of $5.1 million were up $4.3
million versus the first quarter of 2007. Advertising revenue
associated with Belo's Web sites increased 32 percent to $6.9
million in the first quarter 2008, representing 4 percent of Belo's
total revenues. Total station expenses increased 3.8 percent in the
first quarter versus the same period last year. Station EBITDA in
the first quarter of 2008 was down 11.6 percent versus the prior
year. Corporate Corporate costs and expenses were $13.3 million in
the first quarter of 2008 as compared to $10.6 million in the first
quarter of 2007. First quarter 2008 expenses included $4.2 million
in spin-off related costs before taxes. Excluding these costs,
corporate expenses were $9.1 million, a decrease of 14 percent.
Other Items Belo's depreciation and amortization expense totaled
$10.9 million in the first quarter of 2008, a 1.5 percent decrease
from the first quarter of 2007. Interest expense, which included
financing costs related to the spin-off, decreased $1.4 million, or
5.8 percent, in the first quarter of 2008. Other income (expense),
net, decreased $4.8 million in the first quarter of 2008 due
primarily to a $4 million credit from the settlement of the
Company's Hurricane Katrina-related insurance claim in the first
quarter of 2007. Income tax expense increased $12.9 million in the
first quarter of 2008 compared to the first quarter of 2007 due
primarily to a one-time $18.2 million tax charge related to the
transfer of certain intangible assets in connection with the
spin-off. Total debt at March 31, 2008 was $1.2 billion. The
Company invested $6.4 million in capital expenditures and
repurchased 191,000 shares for a total of $2.2 million in the first
quarter of 2008 to offset share issuances under the Company's
employee benefit plans. Discontinued Operations On February 8,
2008, Belo completed the spin-off of its newspaper businesses and
related assets into a separate publicly-traded company, A. H. Belo
Corporation. The results of operations of the Newspaper Group and
related corporate expenses are classified as discontinued
operations for all periods prior to the spin-off. Non-GAAP
Financial Measures A reconciliation of station EBITDA to earnings
from operations and a reconciliation of earnings per share from
continuing operations to earnings per share from continuing
operations, before spin-off related charges, are set forth in an
exhibit to this release. Second Quarter Outlook In looking to the
second quarter, Shive said, "While local and national spot revenues
are currently pacing better than first quarter, we can't predict
with certainty where the second quarter will finish given that
economic conditions continue to be soft. In addition, we had $5.1
million in political revenue in the first quarter, but expect to
see less political in the second quarter. As in past election
cycles, we expect the majority of political revenue to come in the
back half of the year. Operating expense increases for the
remainder of the year will continue to be managed to lower levels
if economic conditions do not improve." A conference call to
discuss this earnings release and other matters of interest to
shareholders and analysts will follow at 1:00 p.m. CDT 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 1-800-230-1059. A replay line will be open from 3:00
p.m. CDT on April 29 until 11:59 p.m. CDT on May 6, 2008. To access
the replay, dial 800-475-6701 or 320-365-3844. The access code for
the replay is 917929. About Belo Corp. Belo Corp. is one of the
nation's largest pure-play publicly-traded television companies,
with annual revenue of approximately $775 million. The Company owns
and operates 20 television stations reaching more than 14 percent
of U.S. television households, including ABC, CBS, NBC, FOX, CW and
MyNetwork TV affiliates, and their associated Web sites, in 15
highly-attractive markets across the United States. Belo stations
consistently deliver distinguished journalism for which they have
received significant industry recognition including nine Alfred I.
duPont-Columbia University Silver Baton Awards; nine George Foster
Peabody Awards; and 19 national Edward R. Murrow Awards -- all
since 2000, and in each case more than any other commercial station
group in the nation. Nearly all Belo stations rank first or second
in their local market. Belo owns stations in seven of the top 25
markets in the nation, with six stations located in the
fast-growing, top-14 markets of Dallas/Fort Worth, Houston,
Seattle/Tacoma and Phoenix. Additionally, the Company has created
regional cable news channels in Texas and the Northwest increasing
its impact in those regions. Additional information is available at
http://www.belo.com/ or by contacting Paul Fry, vice
president/Investor Relations & Corporate Communications, at
214-977-6835. Statements in this communication concerning Belo's
business outlook or future economic performance, anticipated
profitability, revenues, expenses, dividends, capital expenditures,
investments, future financings, 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 factors include, but are not limited to,
uncertainties regarding the costs, consequences (including tax
consequences) and other effects of the distribution of the
newspaper businesses and related assets of Belo; changes in capital
market conditions and prospects, and other factors such as changes
in advertising demand, interest rates and programming and
production costs; changes in viewership patterns and demography,
and actions by Nielsen; changes in the network-affiliate business
model for broadcast television; technological changes, including
the transition to digital television and the development of new
systems to distribute television and other audio-visual content;
changes in the ability to secure, and in the terms of, carriage of
Belo programming on cable, satellite 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; 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 and co-owned
ventures; general economic conditions; and significant armed
conflict, as well as other risks detailed in Belo's other public
disclosures and filings with the SEC including Belo's Annual Report
on Form 10-K. Belo Corp. Consolidated Statements of Operations
Three months ended March 31, In thousands, except per share amounts
(unaudited) 2008 2007 Net Operating Revenues $174,827 $178,341
Operating Costs and Expenses Station salaries, wages and employee
benefits 62,149 59,498 Station programming and other operating
costs 53,938 52,366 Corporate operating costs 9,090 10,550 Spin-off
related costs 4,249 - Depreciation 10,884 10,608 Amortization - 442
Total operating costs and expenses 140,310 133,464 Earnings from
operations 34,517 44,877 Other income and expense Interest expense
(22,744) (24,151) Other income, net (2) 269 5,087 Total other
income and expense (22,475) (19,064) Earnings from continuing
operations before income taxes 12,042 25,813 Income taxes 22,922
10,038 Net earnings (loss) from continuing operations (10,880)
15,775 Discontinued operations, net of tax (4,499) (324) Net
earnings (loss) $(15,379) $15,451 Net earnings (loss) per share -
Basic Earnings (loss) per share from continuing operations $(0.11)
$0.15 Earnings (loss) per share from discontinued operations (0.04)
- Net earnings (loss) per share - Basic $(0.15) $0.15 Net earnings
(loss) per share - Diluted Earnings (loss) per share from
continuing operations $(0.11) $0.15 Earnings (loss) per share from
discontinued operations (0.04) $ - Net earnings (loss) per share -
Diluted $(0.15) 0.15 Average shares outstanding Basic 102,267
102,271 Diluted (3) 102,267 102,862 Cash dividends declared per
share $0.075 $0.125 Note 1: Certain prior period amounts have been
reclassified to conform to current year presentation and to reflect
discontinued operations. Note 2: Other income (expense), net
consists primarily of equity earnings (losses) from partnerships
and joint ventures and other miscellaneous income (expense). In
2007, other income (expense) included $4,000 related to an
insurance settlement from losses suffered from Hurricane Katrina.
Note 3: Potential dilutive common shares were antidilutive as a
result of the Company's net loss for the three months ended March
31, 2008. As a result, basic and diluted average shares outstanding
were the same for this period. Belo Corp. Consolidated Condensed
Balance Sheets March 31, December 31, In thousands 2008 2007
(unaudited) (unaudited) Assets Current assets Cash and temporary
cash investments $6,545 $11,190 Accounts receivable, net 155,873
181,755 Other current assets 24,542 26,875 Current assets of
discontinued operations - 124,569 Total current assets 186,960
344,389 Property, plant and equipment, net 225,907 228,012
Intangible assets, net 2,045,793 2,045,793 Other assets 63,335
60,799 Long-term assets of discontinued operations - 500,067 Total
assets $2,521,995 $3,179,060 Liabilities and Shareholders' Equity
Current liabilities Accounts payable $17,686 $34,267 Accrued
expenses 59,639 84,754 Other current liabilities 53,425 49,100
Current liabilities of discontinued operations - 81,331 Total
current liabilities 130,750 249,452 Long-term debt 1,186,475
1,168,140 Deferred income taxes 426,745 425,613 Other liabilities
29,163 49,741 Long-term liabilities of discontinued operations -
34,406 Total shareholders' equity 748,862 1,251,708 Total
liabilities and shareholders' equity $2,521,995 $3,179,060 Note 1:
Certain prior period amounts have been reclassified to reflect
discontinued operations. Belo Corp. Non-GAAP to GAAP
Reconciliations Station EBITDA Three months ended March 31, In
thousands (unaudited) 2008 2007 Station EBITDA (1) $58,740 $66,477
Corporate operating costs 9,090 10,550 Spin-off related costs 4,249
- Depreciation 10,884 10,608 Amortization - 442 Earnings from
operations $34,517 $44,877 Note 1: Belo's management uses Station
EBITDA as the primary measure of profitability to evaluate
operating performance and to allocate capital resources and bonuses
to eligible operating company employees. Station EBITDA represents
the Company's earnings from operations before interest expense,
income taxes, depreciation, amortization, corporate expense and
spin-off related operating costs. 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). Earnings From Continuing Operations
Before Spin-Off Related Charges In thousands Three Months ended
Three Months ended (unaudited) March 31, 2008 March 31, 2007
Earnings EPS Shares(2) Earnings EPS Shares Net earnings (loss) from
continuing operations $(10,880) $(0.11) 102,267 $15,775 $0.15
102,862 Spin-off related operating and financing costs, net of tax
3,151 0.03 102,267 - Spin-off related tax charge 18,235 $0.18
102,267 - Net earnings from continuing operations before spin-off
related charges $10,506 $0.10 103,388 $15,775 $0.15 102,862 Note 2:
Potential dilutive common shares were antidilutive as a result of
the Company's net loss from continuing operations for the three
months ended March 31, 2008. As a result, basic weighted average
shares were used in the calculation of net loss per share from
continuing operations for this period. In the absence of the net
loss from continuing operations, potential dilutive common shares
were added to weighted average common shares outstanding in the
calculation of net earnings per share from continuing operations
before spin-off related charges. DATASOURCE: Belo Corp. CONTACT:
Paul Fry, vice president|Investor Relations & Corporate
Communications of Belo Corp., +1-214-977-6835 Web site:
http://www.belo.com/
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