DALLAS, Oct. 7 /PRNewswire-FirstCall/ -- Belo Corp.
(NYSE: BLC), one of the nation's largest pure-play, publicly-traded
television companies, announced today that the Company and A. H.
Belo Corporation have agreed to split The G. B. Dealey Retirement
Pension Plan ("Pension Plan" or "Plan") into separately-sponsored
plans effective on or about January 1,
2011. The split of the Pension Plan follows the
spin-off in February 2008 of Belo
Corp.'s newspaper businesses and related assets into a separate
publicly-traded company, A. H. Belo Corporation ("A. H. Belo"). The Pension Plan is a
defined benefit plan created in 1943, and its 9,300 participants
include current and former employees of Belo Corp. and A. H. Belo, and their respective subsidiaries.
Benefits under the Plan were frozen in 2007. At the
time of the 2008 spin-off, Belo Corp. remained the sole sponsor and
administrator of the Pension Plan for all participants, and
A. H. Belo agreed to share
investment oversight responsibilities with Belo Corp. and was
obligated to reimburse Belo Corp. for 60 percent of each
contribution Belo Corp. made to the Pension Plan.
Under the agreement between Belo Corp. and A. H. Belo, on or about January 1, 2011, benefit liabilities and assets
allocable to the approximately 5,100 current and former employee
participants of A. H. Belo and its
newspaper businesses will be transferred in accordance with
government regulations to two new defined benefit pension plans
created, sponsored and managed by or on behalf of A. H. Belo, and the new A. H. Belo plans will become solely responsible
for paying those benefits. The benefit liabilities and assets
allocable to current and former employee participants of Belo Corp.
and its television businesses will continue to be held by the
existing Pension Plan sponsored and managed by or on behalf of Belo
Corp. For plan years starting on and after January 1, 2011, Belo Corp. and A. H. Belo shall each be solely responsible for
contributions made to their respective plans. The split of
the Plan will not change the amount of the benefits any participant
has accrued or is currently receiving.
"Completion of the Pension Plan split will enable the companies
to manage their respective plans in accordance with their own
considerations and strategy," said Dunia A.
Shive, Belo's president and Chief Executive Officer.
The Pension Plan was closed to new participants on June 30, 2000 except for certain union employees
at The Providence Journal, for whom the Plan was closed to
new participants on July 30, 2004.
On March 31, 2007, the Pension
Plan was frozen and all participants ceased earning additional
benefits under the Plan.
For Belo Corp., the pension split transaction will be treated as
a settlement of a portion of the Pension Plan liability for
accounting purposes. Under settlement accounting, the pension
split is expected to result in a significant reduction to Belo
Corp.'s net unfunded pension liability, with an associated
reduction in pension-related deferred tax assets and a significant
increase in the Company's total shareholders' equity. In
addition, Belo Corp.'s future annual pension expense is expected to
be significantly less.
Belo Corp. currently expects to report a non-cash loss
associated with the split of the Pension Plan in the first quarter
of 2011 in the range of $19 to $23
million with an associated tax benefit in the range of
$5 to $7 million; however, the actual
amount of the non-cash loss and associated tax benefit is
subject to change and may be more or less than these ranges
depending on several factors, including differences in the
Company's current estimates related to asset performance, the
discount rate, contributions and benefit payments. The
non-cash loss has two primary components: a settlement gain
related to the transfer to A. H.
Belo of its portion of the net unfunded pension liability
and a settlement loss related to the immediate recognition, upon
the transfer of the Plan's assets and liabilities, of previously
unrecognized actuarial pension losses. These unrecognized
losses were previously recorded as part of the Company's
accumulated other comprehensive income. The non-cash loss,
before taxes, will be shown on a separate line within operating
costs and expenses on the Company's Statement of Operations.
About Belo Corp.
Belo Corp. (NYSE: BLC), one of the nation's largest pure-play,
publicly-traded television companies, owns and operates 20
television stations (nine in the top 25 markets) and their
associated Web sites. Belo stations, which include
affiliations with ABC, CBS, NBC, FOX, and the CW, reach more than
14 percent of U.S. television households in 15 highly attractive
markets. Belo stations rank first or second in nearly all of
their local markets. Additional information is available at
www.belo.com or by contacting Paul
Fry, vice president/Investor Relations & Treasury
Operations, at 214-977-6835.
Statements in this communication concerning Belo's business
outlook or future economic performance, anticipated profitability,
revenues, expenses, capital expenditures, 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 factors include, but are not
limited to, uncertainties regarding the costs, consequences
(including tax consequences) and other effects of Belo's spin-off
distribution of its newspaper businesses and related assets to
A. H. Belo and the associated
agreements between Belo and A. H.
Belo relating to various matters; 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, 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,
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; 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 Belo 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 SEC including
Belo's Annual Report on Form 10-K.
SOURCE Belo Corp.
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