UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended: September 30, 2010
OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission File No. 1-8598
Belo Corp.
(Exact name of registrant as specified in its charter)
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Delaware
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75-0135890
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(State or other jurisdiction of
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(I.R.S. employer
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incorporation or organization)
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identification no.)
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P. O. Box 655237
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Dallas, Texas
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75265-5237
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(Address of principal executive offices)
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(Zip code)
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Registrants telephone number, including area code:
(214) 977-6606
Former name, former address and former fiscal year, if changed since last report.
None
Indicate by check mark whether registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes
þ
No
o
Indicate by check mark whether the registrant 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
o
No
o
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:
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Large accelerated filer
o
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Accelerated filer
þ
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Non-accelerated filer
o
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Smaller reporting company
o
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes
o
No
þ
Indicate the number of shares outstanding of each of the issuers classes of common stock, as
of the latest practicable date.
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Class
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Outstanding at October 26, 2010
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Common Stock, $1.67 par value
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103,143,359*
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*
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Consisting of 91,991,460 shares of Series A Common Stock
and 11,151,899 shares of
Series B Common Stock.
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BELO CORP.
FORM 10-Q
TABLE OF CONTENTS
1
PART I.
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Item 1.
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Financial Statements
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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Belo Corp. and Subsidiaries
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Three months ended
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Nine months ended
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September 30,
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September 30,
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In thousands, except per share amounts (unaudited)
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2010
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2009
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2010
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2009
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Net Operating Revenues
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$
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163,853
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$
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140,617
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$
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481,167
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$
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418,923
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Operating Costs and Expenses
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Station salaries, wages and employee benefits
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53,273
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47,002
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156,408
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145,211
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Station programming and other operating costs
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51,573
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49,972
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144,219
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147,556
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Corporate operating costs
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8,738
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7,743
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26,202
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21,891
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Pension contribution reimbursement
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(300
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)
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(8,572
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)
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Depreciation
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8,449
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11,520
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26,462
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32,279
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Impairment charge
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242,144
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242,144
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Total operating costs and expenses
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121,733
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358,381
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344,719
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589,081
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Earnings (loss) from operations
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42,120
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(217,764
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)
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136,448
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(170,158
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)
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Other Income and (Expense)
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Interest expense
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(20,037
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(15,654
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(59,740
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)
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(45,566
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)
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Other income (expense), net
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21
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(657
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)
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129
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12,907
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Total other income and (expense)
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(20,016
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)
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(16,311
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)
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(59,611
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)
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(32,659
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Earnings (loss) before income taxes
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22,104
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(234,075
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)
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76,837
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(202,817
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)
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Income tax expense (benefit)
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8,159
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(83,554
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)
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29,825
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(71,502
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)
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Net earnings (loss)
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$
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13,945
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$
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(150,521
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$
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47,012
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$
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(131,315
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)
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Earnings (Loss) Per Share
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Basic
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$
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0.13
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$
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(1.47
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$
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0.45
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$
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(1.28
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)
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Diluted
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$
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0.13
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$
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(1.47
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)
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$
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0.45
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$
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(1.28
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)
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Weighted Average Shares Outstanding
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Basic
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103,107
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102,536
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102,982
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102,471
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Diluted
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103,502
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102,536
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103,397
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102,471
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Dividends declared per share
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$
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$
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$
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$
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0.075
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See accompanying Notes to Consolidated Condensed Financial Statements.
2
CONSOLIDATED CONDENSED BALANCE SHEETS
Belo Corp. and Subsidiaries
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In thousands, except share and per share amounts
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September 30,
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December 31,
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(unaudited)
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2010
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2009
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Assets
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Current assets:
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Cash and temporary cash investments
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$
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11,827
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$
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4,800
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Accounts receivable, net
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133,846
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139,911
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Other current assets
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21,908
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31,413
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Total current assets
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167,581
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176,124
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Property, plant and equipment, net
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168,393
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177,475
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Intangible assets, net
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725,399
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725,399
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Goodwill
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423,873
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423,873
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Other assets
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74,009
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81,590
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Total assets
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$
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1,559,255
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$
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1,584,461
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Liabilities and Shareholders Equity
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Current liabilities:
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Accounts payable
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$
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17,768
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$
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20,736
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Accrued expenses
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50,514
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41,922
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Short-term pension obligation
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26,977
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14,277
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Accrued interest payable
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18,604
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10,682
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Income taxes payable
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3,132
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12,052
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Deferred revenue
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9,932
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4,228
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Total current liabilities
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126,927
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103,897
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Long-term debt
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948,899
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1,028,219
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Deferred income taxes
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180,174
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169,888
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Pension obligation
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159,086
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182,065
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Other liabilities
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22,099
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28,561
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Shareholders equity:
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Preferred stock, $1.00 par value. Authorized
5,000,000 shares; none issued
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Common stock, $1.67 par value. Authorized
450,000,000 shares
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Series A: Issued 91,989,328 shares at September 30, 2010
and 90,956,337 shares at December 31, 2009
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153,622
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151,897
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Series B: Issued 11,154,031 shares at September 30, 2010
and 11,642,354 shares at December 31, 2009
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18,627
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19,443
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Additional paid-in capital
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914,308
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911,989
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Accumulated deficit
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(824,902
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)
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(871,913
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)
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Accumulated other comprehensive loss
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(139,585
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)
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(139,585
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)
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Total shareholders equity
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122,070
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71,831
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Total liabilities and shareholders equity
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$
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1,559,255
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$
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1,584,461
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See accompanying Notes to Consolidated Condensed Financial Statements.
3
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Belo Corp. and Subsidiaries
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Nine months ended September 30,
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In thousands (unaudited)
|
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2010
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2009
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Operations
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Net earnings (loss)
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$
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47,012
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$
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(131,315
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)
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Adjustments to reconcile net earnings
to net cash provided by operations:
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Impairment charge
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242,144
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Gain on repurchase of senior notes
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(14,905
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)
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Depreciation
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26,462
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32,279
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Pension contribution
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(14,287
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)
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Employee retirement expense
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3,861
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(371
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)
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Deferred income tax
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16,095
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(71,074
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)
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Share-based compensation
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|
2,097
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|
|
|
3,787
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Other non-cash items
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(5,735
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)
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|
2,962
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Equity income from partnerships
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(221
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)
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271
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Other, net
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(2,227
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)
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(3,119
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)
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Net change in operating assets and liabilities:
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Accounts receivable
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5,034
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|
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22,261
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Other current assets
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11,066
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|
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(977
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)
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Accounts payable
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(5,842
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)
|
|
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(5,766
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)
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Accrued expenses
|
|
|
14,443
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|
|
|
(13,167
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)
|
Accrued interest payable
|
|
|
8,601
|
|
|
|
2,010
|
|
Income taxes payable
|
|
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(8,668
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)
|
|
|
(15,370
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)
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|
|
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Net cash provided by operations
|
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|
97,691
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|
|
|
49,650
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Investments
|
|
|
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Capital expenditures
|
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(10,614
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)
|
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(4,466
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)
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Other investments
|
|
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(119
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)
|
|
|
2,240
|
|
Other, net
|
|
|
|
|
|
|
718
|
|
|
|
|
|
|
|
|
Net cash used for investments
|
|
|
(10,733
|
)
|
|
|
(1,508
|
)
|
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|
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Financing
|
|
|
|
|
|
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|
|
Net proceeds from revolving debt
|
|
|
49,700
|
|
|
|
114,600
|
|
Payments on revolving debt
|
|
|
(129,700
|
)
|
|
|
(124,600
|
)
|
Purchase of senior notes
|
|
|
|
|
|
|
(25,260
|
)
|
Payment of dividends on common stock
|
|
|
|
|
|
|
(15,375
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)
|
Net proceeds from exercise of stock options
|
|
|
33
|
|
|
|
|
|
Excess tax benefit from option exercises
|
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used for financing
|
|
|
(79,931
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)
|
|
|
(50,635
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and temporary cash investments
|
|
|
7,027
|
|
|
|
(2,493
|
)
|
Cash and temporary cash investments at beginning of period
|
|
|
4,800
|
|
|
|
5,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and temporary cash investments at end of period
|
|
$
|
11,827
|
|
|
$
|
3,277
|
|
|
|
|
|
|
|
|
See accompanying Notes to Consolidated Condensed Financial Statements.
4
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Belo Corp. and Subsidiaries
(in thousands, except per share amounts)
(1)
|
|
The accompanying unaudited consolidated condensed financial statements of Belo Corp. and
subsidiaries (the Company or Belo) have been prepared in accordance with generally accepted
accounting principles for interim financial information and in accordance with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally accepted accounting
principles for complete financial statements.
|
The Companys 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 for aggregation into one reportable segment under Accounting Standards Codification
(ASC) 280-10.
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, 2010, are not necessarily indicative of the
results that may be expected for the year ending December 31, 2010. For further information,
refer to the consolidated financial statements and footnotes thereto included in the Companys
Annual Report on Form 10-K for the year ended December 31, 2009.
All amounts are in thousands, except per share amounts, unless otherwise indicated.
(2)
|
|
On February 8, 2008, the Company completed the spin-off of its former newspaper businesses
and related assets into A. H. Belo Corporation (A. H. Belo), which has its own management
and board of directors. Except as noted below, the Company has no further ownership
interest in A. H. Belo or in any newspaper businesses or related assets, and A. H. Belo has
no ownership interest in the Company or any television station businesses or related assets.
Belo has not recognized any revenues or costs generated by A. H. Belo that would have been
included in its financial results were it not for the spin-off. Belos relationship with A.
H. Belo is governed by a separation and distribution agreement, a services agreement, a tax
matters agreement, an employee matters agreement, and certain other agreements between the
two companies or their respective subsidiaries. Belo and A. H. Belo also co-own certain
downtown Dallas, Texas, real estate through a limited liability company. Belo and A. H.
Belo also co-own other investments in third party businesses and have some overlap in board
members and shareholders. Although the services related to these agreements generate
continuing cash flows between Belo and A. H. Belo, the amounts are not significant to the
ongoing operations of the Company. In addition, the agreements and other relationships do
not provide Belo with the ability to significantly influence the operating or financial
policies of A. H. Belo and, therefore, do not constitute significant continuing involvement.
Additionally, on October 6, 2010, Belo Corp and A. H. Belo agreed to split The G. B. Dealey
Retirement Pension Plan (Pension Plan) into separately-sponsored pension plans effective
January 1, 2011. Under this agreement, which becomes effective January 1, 2011, A. H. Belo
is required to reimburse the Company for 56.5 percent of each contribution the Company makes
to the Pension Plan related to the 2010 plan year. See Note 11 for more information on A.
H. Belos obligations regarding the Pension Plan.
|
5
(3)
|
|
The following table sets forth the reconciliation between weighted average shares used for
calculating basic and diluted earnings per share for the three and nine months ended
September 30, 2010 and 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Nine months ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
Earnings (Numerator)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
$
|
13,945
|
|
|
$
|
(150,521
|
)
|
|
$
|
47,012
|
|
|
$
|
(131,315
|
)
|
Less: Income to participating securities
|
|
|
(201
|
)
|
|
|
|
|
|
|
(720
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income available to common shareholders
|
|
|
13,744
|
|
|
|
(150,521
|
)
|
|
|
46,292
|
|
|
|
(131,315
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares (Denominator)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding (basic)
|
|
|
103,107
|
|
|
|
102,536
|
|
|
|
102,982
|
|
|
|
102,471
|
|
Dilutive effect of employee stock options
|
|
|
395
|
|
|
|
|
|
|
|
415
|
|
|
|
|
|
Dilutive effect of restricted stock units (RSU)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted weighted average shares outstanding
|
|
|
103,502
|
|
|
|
102,536
|
|
|
|
103,397
|
|
|
|
102,471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.13
|
|
|
|
(1.47
|
)
|
|
|
0.45
|
|
|
|
(1.28
|
)
|
Diluted
|
|
|
0.13
|
|
|
|
(1.47
|
)
|
|
|
0.45
|
|
|
|
(1.28
|
)
|
For the three months ended September 30, 2010, the Company excluded 10,546 options and 361
restricted stock units (RSUs) because to include them would be anti-dilutive. For the nine
months ended September 30, 2010, the Company excluded 10,529 options and 359 RSUs because to
include them would be anti-dilutive. For the three and nine months ended September 30, 2009,
the Company excluded 12,600 options and 1,158 RSUs due to the net loss from operations during
those periods.
(4)
|
|
On January 1, 2010, the Company adopted the amendment to ASC 820-10, which expands fair value
disclosure requirements. These disclosures are effective for fiscal years beginning after
December 15, 2009. This amendment affects disclosure requirements only and has no effect on
the Companys financial position or results of operations.
|
(5)
|
|
Goodwill and indefinite-lived intangible assets (FCC licenses) are required to be tested at
least annually for impairment or between annual tests if an event occurs or circumstances
change that would, more likely than not, reduce the fair value of a reporting unit below its
carrying amount. The Companys indefinite-lived intangible assets represent FCC licenses in
markets (as defined by Nielsen Media Researchs Designated Market Area report) where the
Companys stations operate. Goodwill is evaluated by reporting unit, with each reporting unit
consisting of the television station(s) and cable news operations within a market. The
Company measures the fair value of goodwill and indefinite-lived intangible assets annually as
of December 31.
|
Fair value estimates are inherently sensitive, particularly with respect to FCC licenses. For
goodwill, managements annual review process involved analyzing the key estimates and
assumptions used to determine the discounted cash flow calculations of estimated fair value for
Belo reporting units. Significant assumptions used in these estimates include projected
revenues and related growth rates over time and in perpetuity, forecasted operating margins,
estimated tax rates, capital expenditures, and required working capital needs, and an
appropriate risk-adjusted weighted-average cost of capital. For FCC licenses, managements
annual review process involved analyzing key estimates and assumptions used to determine the
discounted cash flow calculations of estimated fair value for Belos FCC licenses. Significant
assumptions include costs and time associated with start-up, initial capital investments, and
forecasts related to overall market performance over time. On a quarterly basis, management
reviews the fair value estimates and the inputs into those estimates for indicators of
impairment. Based on the Companys review, management believes that the fair values of its
reporting units and indefinite-lived intangible assets exceed their carrying amounts at
September 30, 2010; therefore, no adjustment to goodwill or indefinite-lived intangible assets
is necessary.
6
(6)
|
|
At September 30, 2010, Belo had $885,899 in fixed-rate debt securities as follows: $175,604
of 6
3
/
4
% Senior Notes due 2013; $270,295 of 8% Senior Notes due 2016; $200,000 of 7
3
/
4
% Senior
Debentures due 2027; and
$240,000 of 7
1
/
4
% Senior Debentures due 2027. The weighted average effective interest rate for
the fixed-rate debt instruments is 7.5%.
|
At September 30, 2010, Belo also had variable-rate debt under a credit agreement (Amended 2009
Credit Agreement). The Company is required to maintain certain leverage and interest ratios
specified in the agreement. The leverage ratio is generally defined as the ratio of total debt
to cash flow and the senior leverage ratio is generally defined as the ratio of the debt under
the credit agreement to cash flow. The interest coverage ratio is generally defined as the
ratio of interest expense to cash flow. At September 30, 2010, the Companys leverage ratio was
4.3, its interest coverage ratio was 2.9 and its senior leverage ratio was 0.3. As of September
30, 2010, the balance outstanding under the Amended 2009 Credit Agreement was $63,000, the
weighted average interest rate was 3.0 percent, and all unused borrowings were available for
borrowing. At September 30, 2010, the Company was in compliance with all debt covenant
requirements.
On August 12, 2010, the Company amended the Amended 2009 Credit Agreement to decrease the
borrowing capacity under the agreement from $460,750 to $205,000, earlier than previously
scheduled. Prior to the amendment, the agreement provided for the commitments to decrease to
$205,000 on June 7, 2011. In connection with the decrease in capacity, the Company recorded a
charge of $1,225 related to the write-off of debt issuance costs. This charge is included in
interest expense.
At September 30, 2010, the fair values of Belos 6
3
/
4
% Senior Notes due May 30, 2013, 8% Senior
Notes due November 15, 2016, 7
3
/
4
% Senior Debentures due June 1, 2027, and 7
1
/
4
% Senior Debentures
due September 15, 2027, were estimated to be $182,962, $297,000, $177,000, and $208,200,
respectively. The fair value is estimated using quoted market prices and yields obtained
through independent pricing sources, taking into consideration the underlying terms of the debt,
such as the coupon rate and term to maturity (Level 1 inputs). The Company believes the credit
facility, as recorded, approximates fair value as the interest rates are variable based on
current market rates.
(7)
|
|
In November 2009, the Company issued Senior Notes that are fully and unconditionally
guaranteed by each of the Companys 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 consolidated statements
of cash flows of Belo as parent, the guarantor subsidiaries consisting of Belos current
100%-owned subsidiaries, and eliminations necessary to arrive at the Companys 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.
|
7
Condensed Consolidating Statement of Operations
For the Three Months Ended September 30, 2010
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guarantor
|
|
|
|
|
|
|
|
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Revenues
|
|
$
|
|
|
|
$
|
163,853
|
|
|
$
|
|
|
|
$
|
163,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Station salaries, wages and employee benefits
|
|
|
|
|
|
|
53,273
|
|
|
|
|
|
|
|
53,273
|
|
Station programming and other operating costs
|
|
|
|
|
|
|
51,573
|
|
|
|
|
|
|
|
51,573
|
|
Corporate operating costs
|
|
|
7,894
|
|
|
|
844
|
|
|
|
|
|
|
|
8,738
|
|
Pension contribution reimbursement
|
|
|
(300
|
)
|
|
|
|
|
|
|
|
|
|
|
(300
|
)
|
Depreciation
|
|
|
355
|
|
|
|
8,094
|
|
|
|
|
|
|
|
8,449
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
7,949
|
|
|
|
113,784
|
|
|
|
|
|
|
|
121,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from operations
|
|
|
(7,949
|
)
|
|
|
50,069
|
|
|
|
|
|
|
|
42,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income and (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(20,010
|
)
|
|
|
(27
|
)
|
|
|
|
|
|
|
(20,037
|
)
|
Intercompany interest
|
|
|
1,722
|
|
|
|
(1,722
|
)
|
|
|
|
|
|
|
|
|
Other income (expense), net
|
|
|
(124
|
)
|
|
|
145
|
|
|
|
|
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income and (expense)
|
|
|
(18,412
|
)
|
|
|
(1,604
|
)
|
|
|
|
|
|
|
(20,016
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before income taxes
|
|
|
(26,361
|
)
|
|
|
48,465
|
|
|
|
|
|
|
|
22,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense)
|
|
|
3,281
|
|
|
|
(11,440
|
)
|
|
|
|
|
|
|
(8,159
|
)
|
Equity in earnings of subsidiaries
|
|
|
37,025
|
|
|
|
|
|
|
|
(37,025
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
$
|
13,945
|
|
|
$
|
37,025
|
|
|
$
|
(37,025
|
)
|
|
$
|
13,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
Condensed Consolidating Statement of Operations
For the Three Months Ended September 30, 2009
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guarantor
|
|
|
|
|
|
|
|
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Revenues
|
|
$
|
|
|
|
$
|
140,617
|
|
|
$
|
|
|
|
$
|
140,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Station salaries, wages and employee benefits
|
|
|
|
|
|
|
47,002
|
|
|
|
|
|
|
|
47,002
|
|
Station programming and other operating costs
|
|
|
|
|
|
|
49,972
|
|
|
|
|
|
|
|
49,972
|
|
Corporate operating costs
|
|
|
6,670
|
|
|
|
1,073
|
|
|
|
|
|
|
|
7,743
|
|
Depreciation
|
|
|
574
|
|
|
|
10,946
|
|
|
|
|
|
|
|
11,520
|
|
Impairment charge
|
|
|
|
|
|
|
242,144
|
|
|
|
|
|
|
|
242,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
7,244
|
|
|
|
351,137
|
|
|
|
|
|
|
|
358,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(7,244
|
)
|
|
|
(210,520
|
)
|
|
|
|
|
|
|
(217,764
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income and (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(15,619
|
)
|
|
|
(35
|
)
|
|
|
|
|
|
|
(15,654
|
)
|
Intercompany interest
|
|
|
1,721
|
|
|
|
(1,721
|
)
|
|
|
|
|
|
|
|
|
Other expense, net
|
|
|
(436
|
)
|
|
|
(221
|
)
|
|
|
|
|
|
|
(657
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income and (expense)
|
|
|
(14,334
|
)
|
|
|
(1,977
|
)
|
|
|
|
|
|
|
(16,311
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(21,578
|
)
|
|
|
(212,497
|
)
|
|
|
|
|
|
|
(234,075
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
|
7,186
|
|
|
|
76,368
|
|
|
|
|
|
|
|
83,554
|
|
Equity in earnings (loss) of subsidiaries
|
|
|
(136,129
|
)
|
|
|
|
|
|
|
136,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
$
|
(150,521
|
)
|
|
$
|
(136,129
|
)
|
|
$
|
136,129
|
|
|
$
|
(150,521
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
Condensed Consolidating Statement of Operations
For the Nine Months Ended September 30, 2010
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guarantor
|
|
|
|
|
|
|
|
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Revenues
|
|
$
|
|
|
|
$
|
481,167
|
|
|
$
|
|
|
|
$
|
481,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Station salaries, wages and employee benefits
|
|
|
|
|
|
|
156,408
|
|
|
|
|
|
|
|
156,408
|
|
Station programming and other operating costs
|
|
|
|
|
|
|
144,219
|
|
|
|
|
|
|
|
144,219
|
|
Corporate operating costs
|
|
|
23,378
|
|
|
|
2,824
|
|
|
|
|
|
|
|
26,202
|
|
Pension contribution reimbursement
|
|
|
(8,572
|
)
|
|
|
|
|
|
|
|
|
|
|
(8,572
|
)
|
Depreciation
|
|
|
1,426
|
|
|
|
25,036
|
|
|
|
|
|
|
|
26,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
16,232
|
|
|
|
328,487
|
|
|
|
|
|
|
|
344,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from operations
|
|
|
(16,232
|
)
|
|
|
152,680
|
|
|
|
|
|
|
|
136,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income and (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(59,650
|
)
|
|
|
(90
|
)
|
|
|
|
|
|
|
(59,740
|
)
|
Intercompany interest
|
|
|
5,128
|
|
|
|
(5,128
|
)
|
|
|
|
|
|
|
|
|
Other income (expense), net
|
|
|
(338
|
)
|
|
|
467
|
|
|
|
|
|
|
|
129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income and (expense)
|
|
|
(54,860
|
)
|
|
|
(4,751
|
)
|
|
|
|
|
|
|
(59,611
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before income taxes
|
|
|
(71,092
|
)
|
|
|
147,929
|
|
|
|
|
|
|
|
76,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense)
|
|
|
29,586
|
|
|
|
(59,411
|
)
|
|
|
|
|
|
|
(29,825
|
)
|
Equity in earnings of subsidiaries
|
|
|
88,518
|
|
|
|
|
|
|
|
(88,518
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
$
|
47,012
|
|
|
$
|
88,518
|
|
|
$
|
(88,518
|
)
|
|
$
|
47,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
Condensed Consolidating Statement of Operations
For the Nine Months Ended September 30, 2009
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guarantor
|
|
|
|
|
|
|
|
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Revenues
|
|
$
|
|
|
|
$
|
418,923
|
|
|
$
|
|
|
|
$
|
418,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Station salaries, wages and employee benefits
|
|
|
|
|
|
|
145,211
|
|
|
|
|
|
|
|
145,211
|
|
Station programming and other operating costs
|
|
|
|
|
|
|
147,556
|
|
|
|
|
|
|
|
147,556
|
|
Corporate operating costs
|
|
|
19,828
|
|
|
|
2,063
|
|
|
|
|
|
|
|
21,891
|
|
Depreciation
|
|
|
2,700
|
|
|
|
29,579
|
|
|
|
|
|
|
|
32,279
|
|
Impairment charge
|
|
|
|
|
|
|
242,144
|
|
|
|
|
|
|
|
242,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
22,528
|
|
|
|
566,553
|
|
|
|
|
|
|
|
589,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(22,528
|
)
|
|
|
(147,630
|
)
|
|
|
|
|
|
|
(170,158
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income and (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(45,455
|
)
|
|
|
(111
|
)
|
|
|
|
|
|
|
(45,566
|
)
|
Intercompany interest
|
|
|
5,128
|
|
|
|
(5,128
|
)
|
|
|
|
|
|
|
|
|
Other income (expense), net
|
|
|
13,521
|
|
|
|
(614
|
)
|
|
|
|
|
|
|
12,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income and (expense)
|
|
|
(26,806
|
)
|
|
|
(5,853
|
)
|
|
|
|
|
|
|
(32,659
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(49,334
|
)
|
|
|
(153,483
|
)
|
|
|
|
|
|
|
(202,817
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
|
19,200
|
|
|
|
52,302
|
|
|
|
|
|
|
|
71,502
|
|
Equity in earnings (loss) of subsidiaries
|
|
|
(101,181
|
)
|
|
|
|
|
|
|
101,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
$
|
(131,315
|
)
|
|
$
|
(101,181
|
)
|
|
$
|
101,181
|
|
|
$
|
(131,315
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
Condensed Consolidating Balance Sheet
As of September 30, 2010
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guarantor
|
|
|
|
|
|
|
|
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and temporary cash investments
|
|
$
|
10,200
|
|
|
$
|
1,627
|
|
|
$
|
|
|
|
$
|
11,827
|
|
Accounts receivable, net
|
|
|
146
|
|
|
|
133,700
|
|
|
|
|
|
|
|
133,846
|
|
Other current assets
|
|
|
8,193
|
|
|
|
13,715
|
|
|
|
|
|
|
|
21,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
18,539
|
|
|
|
149,042
|
|
|
|
|
|
|
|
167,581
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
3,586
|
|
|
|
164,807
|
|
|
|
|
|
|
|
168,393
|
|
Intangible assets, net
|
|
|
|
|
|
|
725,399
|
|
|
|
|
|
|
|
725,399
|
|
Goodwill, net
|
|
|
|
|
|
|
423,873
|
|
|
|
|
|
|
|
423,873
|
|
Deferred income taxes
|
|
|
74,163
|
|
|
|
|
|
|
|
(74,163
|
)
|
|
|
|
|
Intercompany receivable
|
|
|
225,180
|
|
|
|
|
|
|
|
(225,180
|
)
|
|
|
|
|
Investment in subsidiaries
|
|
|
949,790
|
|
|
|
|
|
|
|
(949,790
|
)
|
|
|
|
|
Other assets
|
|
|
43,499
|
|
|
|
30,510
|
|
|
|
|
|
|
|
74,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,314,757
|
|
|
$
|
1,493,631
|
|
|
$
|
(1,249,133
|
)
|
|
$
|
1,559,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
8,508
|
|
|
$
|
9,260
|
|
|
$
|
|
|
|
$
|
17,768
|
|
Accrued expenses
|
|
|
17,180
|
|
|
|
33,334
|
|
|
|
|
|
|
|
50,514
|
|
Short-term pension obligation
|
|
|
26,977
|
|
|
|
|
|
|
|
|
|
|
|
26,977
|
|
Income taxes payable
|
|
|
3,132
|
|
|
|
|
|
|
|
|
|
|
|
3,132
|
|
Deferred revenue
|
|
|
|
|
|
|
9,932
|
|
|
|
|
|
|
|
9,932
|
|
Accrued interest payable
|
|
|
18,604
|
|
|
|
|
|
|
|
|
|
|
|
18,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
74,401
|
|
|
|
52,526
|
|
|
|
|
|
|
|
126,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
948,899
|
|
|
|
|
|
|
|
|
|
|
|
948,899
|
|
Deferred income taxes
|
|
|
|
|
|
|
254,337
|
|
|
|
(74,163
|
)
|
|
|
180,174
|
|
Pension obligation
|
|
|
159,086
|
|
|
|
|
|
|
|
|
|
|
|
159,086
|
|
Intercompany payable
|
|
|
|
|
|
|
225,180
|
|
|
|
(225,180
|
)
|
|
|
|
|
Other liabilities
|
|
|
10,301
|
|
|
|
11,798
|
|
|
|
|
|
|
|
22,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
|
122,070
|
|
|
|
949,790
|
|
|
|
(949,790
|
)
|
|
|
122,070
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders equity
|
|
$
|
1,314,757
|
|
|
$
|
1,493,631
|
|
|
$
|
(1,249,133
|
)
|
|
$
|
1,559,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
Condensed Consolidating Balance Sheet
As of December 31, 2009
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guarantor
|
|
|
|
|
|
|
|
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and temporary cash investments
|
|
$
|
3,646
|
|
|
$
|
1,154
|
|
|
$
|
|
|
|
$
|
4,800
|
|
Accounts receivable, net
|
|
|
361
|
|
|
|
139,550
|
|
|
|
|
|
|
|
139,911
|
|
Other current assets
|
|
|
11,193
|
|
|
|
20,220
|
|
|
|
|
|
|
|
31,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
15,200
|
|
|
|
160,924
|
|
|
|
|
|
|
|
176,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
4,655
|
|
|
|
172,820
|
|
|
|
|
|
|
|
177,475
|
|
Intangible assets, net
|
|
|
|
|
|
|
725,399
|
|
|
|
|
|
|
|
725,399
|
|
Goodwill, net
|
|
|
|
|
|
|
423,873
|
|
|
|
|
|
|
|
423,873
|
|
Deferred income taxes
|
|
|
77,210
|
|
|
|
|
|
|
|
(77,210
|
)
|
|
|
|
|
Intercompany receivable
|
|
|
431,275
|
|
|
|
|
|
|
|
(431,275
|
)
|
|
|
|
|
Investment in subsidiaries
|
|
|
782,606
|
|
|
|
|
|
|
|
(782,606
|
)
|
|
|
|
|
Other assets
|
|
|
51,594
|
|
|
|
29,996
|
|
|
|
|
|
|
|
81,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,362,540
|
|
|
$
|
1,513,012
|
|
|
$
|
(1,291,091
|
)
|
|
$
|
1,584,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
10,882
|
|
|
$
|
9,854
|
|
|
$
|
|
|
|
$
|
20,736
|
|
Accrued expenses
|
|
|
17,181
|
|
|
|
24,741
|
|
|
|
|
|
|
|
41,922
|
|
Short-term pension obligation
|
|
|
14,277
|
|
|
|
|
|
|
|
|
|
|
|
14,277
|
|
Income taxes payable
|
|
|
12,052
|
|
|
|
|
|
|
|
|
|
|
|
12,052
|
|
Deferred revenue
|
|
|
|
|
|
|
4,228
|
|
|
|
|
|
|
|
4,228
|
|
Accrued interest payable
|
|
|
10,682
|
|
|
|
|
|
|
|
|
|
|
|
10,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
65,074
|
|
|
|
38,823
|
|
|
|
|
|
|
|
103,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
1,028,219
|
|
|
|
|
|
|
|
|
|
|
|
1,028,219
|
|
Deferred income taxes
|
|
|
|
|
|
|
247,098
|
|
|
|
(77,210
|
)
|
|
|
169,888
|
|
Pension obligation
|
|
|
182,065
|
|
|
|
|
|
|
|
|
|
|
|
182,065
|
|
Intercompany payable
|
|
|
|
|
|
|
431,275
|
|
|
|
(431,275
|
)
|
|
|
|
|
Other liabilities
|
|
|
15,351
|
|
|
|
13,210
|
|
|
|
|
|
|
|
28,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
|
71,831
|
|
|
|
782,606
|
|
|
|
(782,606
|
)
|
|
|
71,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders equity
|
|
$
|
1,362,540
|
|
|
$
|
1,513,012
|
|
|
|
(1,291,091
|
)
|
|
$
|
1,584,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13
Condensed Consolidating Statement of Cash Flows
For the Nine Months Ended September 30, 2010
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guarantor
|
|
|
|
|
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used for) operations
|
|
$
|
(80,145
|
)
|
|
$
|
177,836
|
|
|
$
|
97,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(554
|
)
|
|
|
(10,060
|
)
|
|
|
(10,614
|
)
|
Other, net
|
|
|
|
|
|
|
(119
|
)
|
|
|
(119
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash used for investments
|
|
|
(554
|
)
|
|
|
(10,179
|
)
|
|
|
(10,733
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from revolving debt
|
|
|
49,700
|
|
|
|
|
|
|
|
49,700
|
|
Payments on revolving debt
|
|
|
(129,700
|
)
|
|
|
|
|
|
|
(129,700
|
)
|
Net proceeds from exercise of stock options
|
|
|
33
|
|
|
|
|
|
|
|
33
|
|
Excess tax benefit from option exercises
|
|
|
36
|
|
|
|
|
|
|
|
36
|
|
Intercompany activity
|
|
|
167,184
|
|
|
|
(167,184
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used for) financing activities
|
|
|
87,253
|
|
|
|
(167,184
|
)
|
|
|
(79,931
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and temporary
cash investments
|
|
|
6,554
|
|
|
|
473
|
|
|
|
7,027
|
|
Cash and temporary cash investments at beginning
of period
|
|
|
3,646
|
|
|
|
1,154
|
|
|
|
4,800
|
|
|
|
|
|
|
|
|
|
|
|
Cash and temporary cash investments at end
of period
|
|
$
|
10,200
|
|
|
$
|
1,627
|
|
|
$
|
11,827
|
|
|
|
|
|
|
|
|
|
|
|
14
Condensed Consolidating Statement of Cash Flows
For the Nine Months Ended September 30, 2009
(in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guarantor
|
|
|
|
|
|
|
Parent
|
|
|
Subsidiaries
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used for) operations
|
|
$
|
(61,927
|
)
|
|
$
|
111,577
|
|
|
$
|
49,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(533
|
)
|
|
|
(3,933
|
)
|
|
|
(4,466
|
)
|
Other, net
|
|
|
792
|
|
|
|
2,166
|
|
|
|
2,958
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used for) investments
|
|
|
259
|
|
|
|
(1,767
|
)
|
|
|
(1,508
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from revolving debt
|
|
|
114,600
|
|
|
|
|
|
|
|
114,600
|
|
Payments on revolving debt
|
|
|
(124,600
|
)
|
|
|
|
|
|
|
(124,600
|
)
|
Purchase of senior notes
|
|
|
(25,260
|
)
|
|
|
|
|
|
|
(25,260
|
)
|
Payment of dividends on common stock
|
|
|
(15,375
|
)
|
|
|
|
|
|
|
(15,375
|
)
|
Intercompany activity
|
|
|
109,625
|
|
|
|
(109,625
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used for) financing activities
|
|
|
58,990
|
|
|
|
(109,625
|
)
|
|
|
(50,635
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and temporary
cash investments
|
|
|
(2,678
|
)
|
|
|
185
|
|
|
|
(2,493
|
)
|
Cash and temporary cash investments at beginning
of period
|
|
|
4,592
|
|
|
|
1,178
|
|
|
|
5,770
|
|
|
|
|
|
|
|
|
|
|
|
Cash and temporary cash investments at end
of period
|
|
$
|
1,914
|
|
|
$
|
1,363
|
|
|
$
|
3,277
|
|
|
|
|
|
|
|
|
|
|
|
(8)
|
|
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 Belos employees and non-employee directors was
$1,023 and $4,622, for the three and nine months ended September 30, 2010, respectively.
Share-based compensation cost for awards to Belos employees and non-employee directors was
$2,173 and $3,906 for the three and nine months ended September 30, 2009, respectively. No
compensation cost is recognized related to options issued by Belo but held by employees and
non-employee directors of A. H. Belo.
(9)
|
|
The net periodic pension cost (benefit) for the three and nine months ended September 30,
2010 and 2009, includes the following components:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Nine months ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest cost on projected benefit obligation
|
|
$
|
8,251
|
|
|
$
|
8,150
|
|
|
$
|
24,577
|
|
|
$
|
24,758
|
|
Expected return on assets
|
|
|
(8,063
|
)
|
|
|
(8,662
|
)
|
|
|
(23,953
|
)
|
|
|
(25,990
|
)
|
Amortization of net loss
|
|
|
1,186
|
|
|
|
312
|
|
|
|
3,384
|
|
|
|
1,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic pension cost (benefit)
|
|
$
|
1,374
|
|
|
$
|
(200
|
)
|
|
$
|
4,008
|
|
|
$
|
(188
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
Belos current funding policy is to contribute annually to the Pension Plan amounts sufficient
to meet the minimum funding requirements of employee benefit and tax laws, but not in excess of
the maximum tax-deductible contribution. A. H. Belo is required to reimburse the Company for 60
percent of each contribution the Company makes to the Pension Plan on or prior to December 31,
2010. Effective January 1, 2011, A. H.
Belo is required to reimburse the Company for 56.5 percent for each contribution the Company
makes to the Pension Plan related to the 2010 plan year. For the three and nine months ended
September 30, 2010, the Company made Pension Plan contributions of $500 and $14,287,
respectively, and received reimbursements from A. H. Belo of $300 and $8,572, respectively.
Pension contribution reimbursements received are classified as a credit to operating costs and
expenses in the consolidated statements of operations. The Company made no contributions to the
Pension Plan during 2009. No plan assets are expected to be returned to the Company during the
fiscal year ending December 31, 2010. See Note 11 for subsequent events related to the Pension
Plan.
(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
lawsuits described in the following two paragraphs.
|
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. In June 2007, the court issued a memorandum order
granting in part and denying in part defendants motion to dismiss. In August 2007 and March
2009, the Court dismissed certain additional claims. A summary judgment motion seeking
dismissal of all remaining claims against all defendants is pending. A trial date is set for
March or April 2011. The Company believes the lawsuit is without merit and is vigorously
defending against it.
On April 13, 2009, four former independent contractor newspaper carriers of
The
Press-Enterprise
, on behalf of themselves and other similarly situated individuals, filed a
purported class-action lawsuit against A. H. Belo, Belo, Press Enterprise Company, and as yet
unidentified defendants in the Superior Court of the State of California, County of Riverside.
The complaint alleges that the defendants violated California laws by allegedly improperly
categorizing the plaintiffs and the purported class members as independent contractors rather
than employees, and in doing so, allegedly failed to pay minimum, hourly and overtime wages to
the purported class members and allegedly failed to comply with other laws and regulations
applicable to an employer-employee relationship. Plaintiffs and purported class members are
seeking minimum wages, unpaid regular and overtime wages, unpaid rest break and meal period
compensation, reimbursement of expenses and losses incurred by them in discharging their duties,
payment of minimum wage to all employees who failed to receive minimum wage for all hours worked
in each payroll period, penalties, injunctive and other equitable relief, and reasonable
attorneys fees and costs. On May 5, 2010, A. H. Belo and the other parties to the lawsuit
reached a preliminary agreement to settle the lawsuit, subject to Court approval. The Court
granted preliminary approval of the agreement on September 16, 2010; a hearing seeking final
approval of the Court is set for February 2011. The parties have agreed to cooperate and take
all steps necessary and appropriate to obtain final approval of the settlement, to effectuate
its terms, and to record the satisfaction of judgment with the Court. As previously noted, A.
H. Belo has agreed to indemnify the Company for any liability arising out of this lawsuit; no
payment is required of the Company.
In addition to the proceedings disclosed above, a number of other legal proceedings are pending
against the Company, including several actions for alleged libel and/or defamation. In the
opinion of management, liabilities, if any, arising from these other legal proceedings would not
have a material adverse effect on the consolidated results of operations, liquidity or financial
position of the Company.
(11)
|
|
In October 2010, Belo Corp. and A. H. Belo agreed to split the Pension Plan into
separately-sponsored pension plans effective January 1, 2011. The Pension Plan was created in
1943 and was closed to new participants in 2000, except for certain union employees at
The
Providence Journal,
for whom the Pension Plan was closed to new participants in 2004. On
March 31, 2007, the Pension Plan was frozen and all participants ceased earning additional
benefits. Under the October 6, 2010 agreement, participant benefit liabilities and assets
allocable to approximately 5,100 current and former employees of A. H. Belo and its related
newspaper businesses will be transferred 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 participant benefits. The participant benefit liabilities
and assets allocable to current and former employees of Belo Corp. and its related television
businesses will continue to be held by the Pension Plan sponsored by and managed by or on
behalf of Belo Corp.
|
16
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 Company estimates that
approximately 55% to 60% of its total net pension obligation will be transferred to A. H. Belo
and result in a settlement gain, and a similar percentage of previously unrecognized losses in
the Companys accumulated other comprehensive income will be recognized as a settlement loss.
The Company currently expects these items to result in a first quarter 2011 non-cash loss of
approximately $19,000 to $23,000 with an associated tax benefit of approximately $5,000 to
$7,000. The actual amount of the non-cash loss and associated tax benefit is subject to change
from these estimates and may be more or less than these amounts depending on several factors,
including differences in the Companys current estimates related to asset performance, the
discount rate, contributions and benefit payments.
For all plan years beginning on or after January 1, 2011, Belo Corp. and A. H. Belo shall each
be solely responsible for contributions made to their respective plans. The pension split
transaction will not change the amount of benefits that any participant has accrued or is
currently receiving.
|
|
|
Item 2.
|
|
Managements Discussion and Analysis of Financial Condition and Results of Operations
(dollars in thousands, except per share amounts)
|
The following information should be read in conjunction with the Companys Consolidated
Condensed Financial Statements and related Notes filed as part of this report.
Overview
Belo Corp. (Belo or the Company), a Delaware corporation, began as a Texas newspaper company in
1842 and today is one of the nations largest publicly-traded pure-play television companies. The
Company owns 20 television stations (nine in the top 25 U.S. markets) that reach 14 percent of U.S.
television households, including ABC, CBS, NBC, FOX and CW affiliates, and their associated Web
sites, in 15 highly-attractive markets across the United States. The Company owns two local and
two regional cable news channels and holds ownership interests in two others. At December 31,
2009, the Company managed one television station through a local marketing agreement (LMA), which
expired on April 24, 2010.
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 Belos success.
The following table sets forth the Companys major media assets as of September 30, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Station
|
|
|
|
|
|
|
|
Station/
|
|
Year Belo
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
Station
|
|
|
Audience
|
|
|
|
Market
|
|
|
News
|
|
Acquired/
|
|
|
Network
|
|
|
|
|
|
Stations in
|
|
|
Rank in
|
|
|
Share in
|
|
Market
|
|
Rank
(1)
|
|
|
Channel
|
|
Started
|
|
|
Affiliation
|
|
Channel
|
|
|
Market
(2)
|
|
|
Market
(3)
|
|
|
Market
(4)
|
|
Dallas/Fort Worth
|
|
|
5
|
|
|
WFAA
|
|
|
1950
|
|
|
ABC
|
|
|
8
|
|
|
|
16
|
|
|
|
2
|
|
|
|
5
|
|
Dallas/Fort Worth
|
|
|
5
|
|
|
TXCN
|
|
|
1999
|
|
|
N/A
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Houston
|
|
|
10
|
|
|
KHOU
|
|
|
1984
|
|
|
CBS
|
|
|
11
|
|
|
|
15
|
|
|
|
2
|
|
|
|
7
|
|
Phoenix
|
|
|
12
|
|
|
KTVK
|
|
|
1999
|
|
|
IND
|
|
|
3
|
|
|
|
13
|
|
|
|
6
|
|
|
|
3
|
|
Phoenix
|
|
|
12
|
|
|
KASW
|
|
|
2000
|
|
|
CW
|
|
|
61
|
|
|
|
13
|
|
|
|
7
|
|
|
|
2
|
|
Seattle/Tacoma
|
|
|
13
|
|
|
KING
|
|
|
1997
|
|
|
NBC
|
|
|
5
|
|
|
|
13
|
|
|
|
1
|
|
|
|
7
|
|
Seattle/Tacoma
|
|
|
13
|
|
|
KONG
|
|
|
2000
|
|
|
IND
|
|
|
16
|
|
|
|
13
|
|
|
|
6
|
*
|
|
|
1
|
|
Seattle/Tacoma
|
|
|
13
|
|
|
NWCN
|
|
|
1997
|
|
|
N/A
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
St. Louis
|
|
|
21
|
|
|
KMOV
|
|
|
1997
|
|
|
CBS
|
|
|
4
|
|
|
|
8
|
|
|
|
3
|
|
|
|
7
|
|
Portland
(5)
|
|
|
22
|
|
|
KGW
|
|
|
1997
|
|
|
NBC
|
|
|
8
|
|
|
|
8
|
|
|
|
1
|
*
|
|
|
7
|
|
Charlotte
|
|
|
23
|
|
|
WCNC
|
|
|
1997
|
|
|
NBC
|
|
|
36
|
|
|
|
8
|
|
|
|
3
|
|
|
|
5
|
|
San Antonio
|
|
|
37
|
|
|
KENS
|
|
|
1997
|
|
|
CBS
|
|
|
5
|
|
|
|
10
|
|
|
|
2
|
|
|
|
6
|
|
Hampton/Norfolk
|
|
|
43
|
|
|
WVEC
|
|
|
1984
|
|
|
ABC
|
|
|
13
|
|
|
|
8
|
|
|
|
1
|
|
|
|
8
|
|
Austin
|
|
|
44
|
|
|
KVUE
|
|
|
1999
|
|
|
ABC
|
|
|
24
|
|
|
|
7
|
|
|
|
1
|
|
|
|
7
|
|
Louisville
|
|
|
50
|
|
|
WHAS
|
|
|
1997
|
|
|
ABC
|
|
|
11
|
|
|
|
7
|
|
|
|
2
|
|
|
|
8
|
|
New Orleans
(6)
|
|
|
52
|
|
|
WWL
|
|
|
1994
|
|
|
CBS
|
|
|
4
|
|
|
|
8
|
|
|
|
1
|
|
|
|
11
|
|
New Orleans
(7)
|
|
|
52
|
|
|
WUPL
|
|
|
2007
|
|
|
MNTV
|
|
|
54
|
|
|
|
9
|
|
|
|
5
|
*
|
|
|
2
|
|
Tucson
|
|
|
67
|
|
|
KMSB
|
|
|
1997
|
|
|
FOX
|
|
|
11
|
|
|
|
9
|
|
|
|
4
|
|
|
|
4
|
|
Tucson
|
|
|
67
|
|
|
KTTU
|
|
|
2002
|
|
|
MNTV
|
|
|
18
|
|
|
|
9
|
|
|
|
6
|
|
|
|
2
|
|
Spokane
|
|
|
75
|
|
|
KREM
|
|
|
1997
|
|
|
CBS
|
|
|
2
|
|
|
|
7
|
|
|
|
2
|
|
|
|
11
|
|
Spokane
|
|
|
75
|
|
|
KSKN
|
|
|
2001
|
|
|
CW
|
|
|
22
|
|
|
|
7
|
|
|
|
5
|
|
|
|
2
|
|
Boise
(8)(9)
|
|
|
113
|
|
|
KTVB
|
|
|
1997
|
|
|
NBC
|
|
|
7
|
|
|
|
5
|
|
|
|
1
|
|
|
|
18
|
|
|
|
|
(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
2010 Nielsen Media Research report.
|
17
|
|
|
(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)
|
|
Station rank is derived from the stations rating, which is based on the July 2010 Nielsen
Media Research report of the number of television households tuned to the Companys station
for the Sunday-Saturday 5:00 a.m. to 2:00 a.m. period (sign-on/sign-off) as a percentage of
the number of television households in the market.
|
|
(4)
|
|
Station audience share is based on the July 2010 Nielsen Media Research report of the number
of television households tuned to the station as a percentage of the number of television
households with sets in use in the market for the sign-on/sign-off period.
|
|
(5)
|
|
The Company also owns KGWZ-LD, a low power television station in Portland, Oregon.
|
|
(6)
|
|
WWL also produces NewsWatch on Channel 15, a 24-hour daily local news and weather cable
channel.
|
|
(7)
|
|
The Company also owns WBXN-CA, a Class A television station in New Orleans, Louisiana.
|
|
(8)
|
|
The Company also owns KTFT-LD (NBC), a low power television station in Twin Falls, Idaho.
|
|
(9)
|
|
Using its digital multicast capabilities, KTVB operates 24/7 Local News Channel, a 24-hour
daily local news and weather channel.
|
|
*
|
|
Tied with one or more other stations in the market.
|
The Company intends for the discussion of its financial condition and results of operations
that follows to provide information that will assist in understanding the Companys financial
statements, the changes in certain key items in those statements from period to period and the
primary factors that accounted for those changes, as well as how certain accounting principles,
policies and estimates affect the Companys financial statements.
The Company has network affiliation agreements with ABC, CBS, NBC, FOX, and CW. Belo recently
reached an agreement with ABC for the renewal of its network affiliation agreements related to its
stations in Dallas/Fort Worth, Austin, Louisville and Hampton/Norfolk. In addition, the Company
recently completed network affiliation renewals with CBS for its stations in Houston, San Antonio
and New Orleans. Payments to the network under the agreements are recorded as programming expense.
Generally, a substantial majority of the Companys revenues are generated from the sale of local,
regional and national advertising. Advertisers generally reduce their advertising spending during
economic downturns, which was seen throughout the prior year. Advertising conditions improved late
in 2009 and have strengthened through the third quarter of 2010. The Olympics, the Super Bowl,
increased political revenues and improved advertising conditions across a number of categories,
particularly automotive, combined to contribute to better pricing, and higher margins in the first
nine months of 2010 as compared to the first nine months of 2009. Additional discussion regarding
the Companys results of operations for the three and nine months ended September 30, 2010 as
compared to the three and nine months ended September 30, 2009 is provided below.
Results of Operations
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
|
|
|
2010
|
|
|
Change
|
|
|
2009
|
|
|
2010
|
|
|
Change
|
|
|
2009
|
|
Net operating revenues
|
|
$
|
163,853
|
|
|
|
16.5
|
%
|
|
$
|
140,617
|
|
|
$
|
481,167
|
|
|
|
14.9
|
%
|
|
$
|
418,923
|
|
Operating costs and expenses
|
|
|
121,733
|
|
|
|
4.7
|
%
|
|
|
116,237
|
|
|
|
344,719
|
|
|
|
(0.6
|
%)
|
|
|
346,937
|
|
Impairment charge
|
|
|
|
|
|
|
N/A
|
|
|
|
242,144
|
|
|
|
|
|
|
|
N/A
|
|
|
|
242,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from operations
|
|
|
42,120
|
|
|
|
N/A
|
|
|
|
(217,764
|
)
|
|
|
136,448
|
|
|
|
N/A
|
|
|
|
(170,158
|
)
|
Other income (expense)
|
|
|
(20,016
|
)
|
|
|
22.7
|
%
|
|
|
(16,311
|
)
|
|
|
(59,611
|
)
|
|
|
82.5
|
%
|
|
|
(32,659
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before income taxes
|
|
|
22,104
|
|
|
|
N/A
|
|
|
|
(234,075
|
)
|
|
|
76,837
|
|
|
|
N/A
|
|
|
|
(202,817
|
)
|
Income tax expense (benefit)
|
|
|
8,159
|
|
|
|
N/A
|
|
|
|
(83,554
|
)
|
|
|
29,825
|
|
|
|
N/A
|
|
|
|
(71,502
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
$
|
13,945
|
|
|
|
N/A
|
|
|
$
|
(150,521
|
)
|
|
$
|
47,012
|
|
|
|
N/A
|
|
|
$
|
(131,315
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
|
|
|
2010
|
|
|
Change
|
|
|
2009
|
|
|
2010
|
|
|
Change
|
|
|
2009
|
|
Non-political advertising
|
|
$
|
135,147
|
|
|
|
10.2
|
%
|
|
$
|
122,630
|
|
|
$
|
409,911
|
|
|
|
11.9
|
%
|
|
$
|
366,352
|
|
Political advertising
|
|
|
11,160
|
|
|
|
437.3
|
%
|
|
|
2,077
|
|
|
|
19,943
|
|
|
|
333.8
|
%
|
|
|
4,597
|
|
Other
|
|
|
17,546
|
|
|
|
10.3
|
%
|
|
|
15,910
|
|
|
|
51,313
|
|
|
|
7.0
|
%
|
|
|
47,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating revenues
|
|
$
|
163,853
|
|
|
|
16.5
|
%
|
|
$
|
140,617
|
|
|
$
|
481,167
|
|
|
|
14.9
|
%
|
|
$
|
418,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18
Non-political advertising revenues increased $12,517, or 10.2 percent, in the three months ended
September 30, 2010, compared to the three months ended September 30, 2009. This increase is
primarily due to a $11,011, or 9.8 percent, increase in local and national spot revenue. Spot
revenue increased primarily in the automotive, telecommunications, financial services, retail and
travel categories. Internet advertising revenues increased $1,674, or 22.7 percent. Political
advertising revenues increased $9,083 in the third quarter 2010 as compared with the third quarter
2009. Political revenues impacted stations in all Belo markets during the third quarter of 2010.
Three of those markets made up a significant portion of total political revenues. Political
revenues are generally higher in even-numbered years than in odd-numbered years due to elections
for various state and national offices.
Non-political advertising revenues increased $43,559, or 11.9 percent, in the nine months ended
September 30, 2010, compared to the nine months ended September 30, 2009. This increase is
primarily due to a $40,860, or 12.1 percent, increase in local and national spot revenue. Spot
revenue increased primarily in the automotive, retail, grocery, financial services, healthcare and
telecommunications categories. Internet advertising revenues increased $3,290, or 15.7 percent.
Political advertising revenues increased $15,346 in the nine months ended September 30, 2010,
compared with the nine months ended September 30, 2009. Political revenues are generally higher in
even-numbered years than in odd-numbered years due to elections for various state and national
offices.
Operating Costs and Expenses
Station salaries, wages and employee benefits increased $6,271, or 13.3 percent, in the three
months ended September 30, 2010, compared to the three months ended September 30, 2009. This
increase is primarily due to a 2009 credit for vacation accruals of $1,436 due to the Companys
decision to convert to a paid-time-off (PTO) vacation policy in the second quarter 2009, bonus
accruals of $2,104 in the third quarter 2010 compared to virtually no bonus expense in 2009, and
increases in pension and pension transition expenses of $1,228. Station programming and other
operating costs increased $1,601, or 3.2 percent, in the three months ended September 30, 2010,
compared to the three months ended September 30, 2009, primarily due to increases in outside
services and national representation fees associated with higher national revenues. Corporate
operating costs increased $995 in the third quarter 2010, primarily related to an increase of
$1,065 in pension and pension transition expenses and an increase of $842 in bonus expense. These
increases were partially offset by decreases in share-based compensation and lower technology costs
related to the insourcing of technology operations in 2010.
Station salaries, wages and employee benefits increased $11,197, or 7.7 percent, in the nine months
ended September 30, 2010, compared to the nine months ended September 30, 2009. This increase is
primarily due to increases in bonus accruals of $5,443, a 2009 credit for vacation accruals of
$4,414 due to the second quarter 2009 decision to convert to a PTO vacation policy, a 2009 credit
of $2,110 for self-insured medical costs, and increases in pension and pension transition expenses
of $3,711. These increases were partially offset by decreases in severance costs of $2,562, and
401(k) plan expense of $1,896. Station programming and other operating costs decreased $3,337 or
2.3 percent, primarily due to a non-cash expense reduction of $4,423, relating to a 2005 Federal
Communications Commission (FCC) decision that allowed a major wireless provider to finance the
replacement of analog newsgathering equipment with digital equipment in exchange for stations
vacating the analog spectrum earlier than required. Six Belo markets converted to this digital
equipment in the first nine months of 2010 and only two Belo markets converted in the first nine
months of 2009. Corporate operating costs increased $4,311 in the nine months ended September 30,
2010, primarily related to increases in bonus expense of $3,305 and pension and pension transition
expenses of $2,913. These increases were partially offset by a decrease in technology-related
expenses of $2,700.
Belos current 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. A. H. Belo was required to reimburse the Company for
60 percent of each contribution the Company made to the Pension Plan for the three and nine months
ended September 30, 2010; during such periods the Company made Pension Plan contributions of $500
and $14,287, respectively, and received reimbursements from A. H. Belo of $300 and $8,572,
respectively. Pension contribution reimbursements received from A. H. Belo are classified as a
credit to operating costs and expenses in the consolidated statements of operations.
19
Other Income and (Expense)
Interest expense increased $4,383 and $14,174 in the three and nine months ended September 30,
2010, respectively, primarily due to increased interest costs associated with the issuance of
$275,000 of 8% Senior Notes in November
2009, and the amortization of the discount and refinancing costs associated with the note offering
and concurrent amendment to the credit facility. These borrowings were previously included in the
Companys lower-rate revolving credit facility. Additionally, on August 12, 2010, the Company
amended the Amended 2009 Credit Agreement to decrease the borrowing capacity under the agreement
from $460,750 to $205,000, earlier than previously scheduled. In connection with the decrease in
capacity, the Company recorded a charge to interest expense of $1,225 related to the write-off of
debt issuance costs. Other income (expense), net increased $678 in the third quarter 2010 compared
to the third quarter 2009, primarily due to a $1,273 loss on the sale of a non-operating asset in
the third quarter 2009. Other income (expense), net decreased $12,778 in the nine months ended
September 30, 2010, primarily due to a $14,905 gain related to the Companys first quarter 2009
purchase of debt securities. The debt securities were purchased on the open market at a discount.
Additionally, in the first quarter 2009, the Company sold its interest in a Web site joint venture
for a gain of $1,616.
Income taxes increased, for the three and nine months ended September 30, 2010, compared with the
three and nine months ended September 30, 2009, primarily due to the tax benefit related to the
2009 impairment charge. For the nine months ended September 30, 2010 and 2009, the Companys
effective tax rate was 38.8 percent and 35.3 percent, respectively.
Station Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
|
|
|
2010
|
|
|
Change
|
|
|
2009
|
|
|
2010
|
|
|
Change
|
|
|
2009
|
|
Station Adjusted EBITDA
|
|
$
|
59,007
|
|
|
|
35.2
|
%
|
|
|
43,643
|
|
|
|
180,540
|
|
|
|
43.1
|
%
|
|
|
126,156
|
|
Corporate operating costs and expenses
|
|
|
(8,738
|
)
|
|
|
12.9
|
%
|
|
|
(7,743
|
)
|
|
|
(26,202
|
)
|
|
|
19.7
|
%
|
|
|
(21,891
|
)
|
Depreciation
|
|
|
(8,449
|
)
|
|
|
(26.7
|
%)
|
|
|
(11,520
|
)
|
|
|
(26,462
|
)
|
|
|
(18.0
|
%)
|
|
|
(32,279
|
)
|
Pension contribution reimbursement
|
|
|
300
|
|
|
|
N/A
|
|
|
|
|
|
|
|
8,572
|
|
|
|
N/A
|
|
|
|
|
|
Impairment charge
|
|
|
|
|
|
|
N/A
|
|
|
|
(242,144
|
)
|
|
|
|
|
|
|
N/A
|
|
|
|
(242,144
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) from operations
|
|
$
|
42,120
|
|
|
|
N/A
|
|
|
$
|
(217,764
|
)
|
|
$
|
136,448
|
|
|
|
N/A
|
|
|
$
|
(170,158
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Belos 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 Companys earnings from operations before
interest expense, income taxes, depreciation, amortization, impairment charges, pension
contribution reimbursement 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, 2010, Station Adjusted EBITDA increased $15,364, or 35.2
percent, compared with the three months ended September 30, 2009. For the nine months ended
September 30, 2010, Station Adjusted EBITDA increased $54,384, or 43.1 percent, compared with the
nine months ended September 30, 2009. These increases were due to the revenue increases and
expense fluctuations discussed above.
Liquidity and Capital Resources
Net cash provided by operating activities, bank borrowings and long-term debt are Belos primary
sources of liquidity.
Operating Cash Flows
Net cash provided by operations was $97,691 in the nine months ended September 30, 2010, compared
with $49,650 in the nine months ended September 30, 2009. The 2010 operating cash flows were
primarily provided by net earnings adjusted for non-cash charges and routine changes in working
capital. The 2009 operating cash flows were primarily provided by net losses adjusted to net
earnings after adding back the impairment charge, and adjusted for other non-cash charges and a
decrease in accounts receivable, partially offset by cash used for routine changes in other working
capital items.
20
The Company made $14,287 in contributions to the Pension Plan during the nine months ended
September 30, 2010. No pension contributions were made or required to be made in 2009. As
previously discussed, A. H. Belo is obligated to reimburse the Company for 60 percent of any
contributions the Company makes to the Pension Plan on or prior to December 31, 2010. Such
reimbursements totaled $8,572 during the nine months ended September 30, 2010. Effective January
1, 2011, A. H. Belo is required to reimburse the Company for 56.5 percent for each contribution the
Company makes to the Pension Plan related to the 2010 plan year.
In October 2010, Belo Corp. and A. H. Belo agreed to split the Pension Plan into
separately-sponsored pension plans effective January 1, 2011. The Pension Plan was created in 1943
and was closed to new participants in 2000, except for certain union employees at
The Providence
Journal,
for whom the Pension Plan was closed to new participants in 2004. On March 31, 2007, the
Pension Plan was frozen and all participants ceased earning additional benefits. Under the October
6, 2010 agreement, participant benefit liabilities and assets allocable to approximately 5,100
current and former employees of A. H. Belo and its related newspaper businesses will be transferred
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 participant
benefits. The participant benefit liabilities and assets allocable to current and former employees
of Belo Corp. and its related television businesses will continue to be held by the Pension Plan
sponsored by and managed by or on behalf of 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 Company estimates that
approximately 55% to 60% of its total net pension obligation will be transferred to A. H. Belo and
result in a settlement gain, and a similar percentage of previously unrecognized losses in the
Companys accumulated other comprehensive income will be recognized as a settlement loss. The
Company currently expects these items to result in a first quarter 2011 non-cash loss of
approximately $19,000 to $23,000 with an associated tax benefit of approximately $5,000 to $7,000.
The actual amount of the non-cash loss and associated tax benefit is subject to change from these
estimates and may be more or less than these amounts depending on several factors, including
differences in the Companys current estimates related to asset performance, the discount rate,
contributions and benefit payments.
For all plan years beginning on or after January 1, 2011, Belo Corp. and A. H. Belo shall each be
solely responsible for contributions made to their respective plans. The pension split transaction
will not change the amount of benefits that any participant has accrued or is currently receiving.
Investing Cash Flows
Net cash flows used for investing activities were $10,733 in the nine months ended September 30,
2010, compared to $1,508 in the nine months ended September 30, 2009. The 2010 investing cash
flows were primarily used for capital expenditures and the 2009 cash flows were primarily used for
capital expenditures partially offset by cash flows provided by the Companys sale of its interest
in a Web site joint venture for a gain of $1,616.
Capital Expenditures
Total capital expenditures were $10,614 in the first nine months of 2010 compared with $4,466 in
the first nine months of 2009.
Financing Cash Flows
Net cash flows used for financing activities were $79,931 in the nine months ended September 30,
2010 compared with $50,635 in the nine months ended September 30, 2009. The 2010 financing
activity cash flows consisted primarily of borrowings and repayments under the Companys revolving
credit facility. The 2009 financing activity cash flows consisted primarily of borrowings and
repayments under the Companys revolving credit facility, purchase of debt securities and dividends
on common stock.
Long-Term Debt
At September 30, 2010, Belo had $885,899 in fixed-rate debt securities as follows: $175,604 of 6
3
/
4
%
Senior Notes due 2013; $270,295 of 8% Senior Notes due 2016; $200,000 of 7
3
/
4
% Senior Debentures due
2027; and $240,000 of 7
1
/
4
% Senior Debentures due 2027. The weighted average effective interest rate
for the fixed-rate debt instruments is 7.5%.
21
At September 30, 2010, Belo also had variable-rate debt under its credit agreement (Amended 2009
Credit Agreement). The Company is required to maintain certain leverage and interest ratios
specified in the agreement. The leverage ratio is generally defined as the ratio of total debt to
cash flow and the senior leverage ratio is generally defined as the ratio of the debt under the
credit agreement to cash flow. The interest coverage ratio is generally defined as the ratio of
interest expense to cash flow. At September 30, 2010, the Companys leverage ratio was 4.3, its
interest coverage ratio was 2.9 and its senior leverage ratio was 0.3. As of September 30, 2010,
the balance outstanding under the Amended 2009 Credit Agreement was $63,000, the weighted average
interest rate was 3.0 percent, and all unused borrowings were available for borrowing. At
September 30, 2010, the Company was in compliance with all debt covenant requirements.
On August 12, 2010, the Company amended the Amended 2009 Credit Agreement to decrease the borrowing
capacity under the agreement from $460,750 to $205,000, earlier than previously scheduled.
Share Repurchase Program
The Company has a stock repurchase program pursuant to authorization from Belos Board of Directors
in December 2005. There is no expiration date for this repurchase program. The remaining
authorization for the repurchase of shares as of September 30, 2010, under this authority was
13,030,716 shares. During the first nine months of 2010, no shares were repurchased under this
program. The Amended 2009 Credit Agreement, which became effective November 15, 2009, does not
permit share repurchases.
Other
The Company has various sources available to meet its 2010 capital and operating commitments,
including cash on hand, short-term investments, internally-generated funds and a $205,000 revolving
credit facility. The Company believes its resources are adequate to meet its foreseeable needs.
Recent Accounting Pronouncements
On January 1, 2010, the Company adopted the amendment to ASC 820-10, which expands fair value
disclosure requirements. These disclosures are effective for fiscal years beginning after December
15, 2009. This amendment affects disclosure requirements only and has no effect on the Companys
financial position or results of operations.
Forward-Looking Statements
Statements in this Form 10-Q concerning Belos 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 the Companys spin-off
distribution of its newspaper businesses and related assets to A. H. Belo and the associated
agreements between the Company 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 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; 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 Belos other public disclosures and filings with the Securities and Exchange Commission
(SEC), including the Annual Report on Form 10-K.
22
|
|
|
Item 3.
|
|
Quantitative and Qualitative Disclosures About Market Risk
|
Other than as disclosed, there have been no material changes in the Companys exposure to market
risk from the disclosure included in the Annual Report on Form 10-K for the fiscal year ended
December 31, 2009.
|
|
|
Item 4.
|
|
Controls and Procedures
|
During the quarter ended September 30, 2010, there were no changes in the Companys internal
control over financial reporting that have materially affected, or are reasonably likely to
materially affect, Belos internal control over financial reporting.
The Company carried out an evaluation under the supervision and with the participation of the
Companys management, including the Companys president and Chief Executive Officer and senior vice
president/Chief Financial Officer, of the effectiveness of the Companys disclosure controls and
procedures, as of the end of the period covered by this report. Based upon that evaluation, the
president and Chief Executive Officer and senior vice president/Chief Financial Officer concluded
that, as of the end of the period covered by this report, the Companys disclosure controls and
procedures were effective such that information relating to the Company (including its consolidated
subsidiaries) required to be disclosed in the Companys SEC reports (i) is recorded, processed,
summarized and reported within the time periods specified in the SEC rules and forms and (ii) is
accumulated and communicated to the Companys management, including the president and Chief
Executive Officer and senior vice president/Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure.
PART II.
|
|
|
Item 1.
|
|
Legal Proceedings
|
In addition to proceedings previously disclosed (see Note 10 to the Consolidated Condensed
Financial Statements in Part I, Item 1) for which there are no material developments to report, a
number of other legal proceedings are pending against the Company, including several actions for
alleged libel and/or defamation. In the opinion of management, liabilities, if any, arising from
these other legal proceedings would not have a material adverse effect on the results of
operations, liquidity or financial position of the Company.
There have been no material changes in the Companys risk factors from the disclosure included in
the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2009.
|
|
|
Item 2.
|
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
There have been no unregistered sales of equity securities during the period covered in this
report. There have been no issuer purchases of equity securities during the period covered by this
report.
|
|
|
Item 3.
|
|
Defaults Upon Senior Securities
|
None.
|
|
|
Item 4.
|
|
Removed and Reserved
|
|
|
|
Item 5.
|
|
Other Information
|
None.
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.
23
|
|
|
|
|
|
|
|
|
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 Companys 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
|
*
|
|
Certificate of Incorporation of the Company (Exhibit 3.1 to the Companys
Annual Report on Form 10-K dated March 15, 2000 (Securities and Exchange Commission
File No. 001-08598) (the 1999 Form 10-K))
|
|
|
|
|
|
|
|
|
|
|
3.2
|
*
|
|
Certificate of Correction to Certificate of Incorporation dated May 13, 1987
(Exhibit 3.2 to the 1999 Form 10-K)
|
|
|
|
|
|
|
|
|
|
|
3.3
|
*
|
|
Certificate of Designation of Series A Junior Participating Preferred Stock
of the Company dated April 16, 1987 (Exhibit 3.3 to the 1999 Form 10-K)
|
|
|
|
|
|
|
|
|
|
|
3.4
|
*
|
|
Certificate of Amendment of Certificate of Incorporation of the Company dated
May 4, 1988 (Exhibit 3.4 to the 1999 Form 10-K)
|
|
|
|
|
|
|
|
|
|
|
3.5
|
*
|
|
Certificate of Amendment of Certificate of Incorporation of the Company dated
May 3, 1995 (Exhibit 3.5 to the 1999 Form 10-K)
|
|
|
|
|
|
|
|
|
|
|
3.6
|
*
|
|
Certificate of Amendment of Certificate of Incorporation of the Company dated
May 13, 1998 (Exhibit 3.6 to the Companys Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998 (Securities and Exchange Commission File No. 002-74702)(the
2
nd
Quarter 1998 Form 10-Q))
|
|
|
|
|
|
|
|
|
|
|
3.7
|
*
|
|
Certificate of Ownership and Merger, dated December 20, 2000, but effective
as of 11:59 p.m. on December 31, 2000 (Exhibit 99.2 to the Companys Current Report on
Form 8-K filed with the Securities and Exchange Commission on December 29, 2000
(Securities and Exchange Commission File No. 001-08598))
|
|
|
|
|
|
|
|
|
|
|
3.8
|
*
|
|
Amended Certificate of Designation of Series A Junior Participating Preferred
Stock of the Company dated May 4, 1988 (Exhibit 3.7 to the 1999 Form 10-K)
|
|
|
|
|
|
|
|
|
|
|
3.9
|
*
|
|
Certificate of Designation of Series B Common Stock of the Company dated May
4, 1988 (Exhibit 3.8 to the 1999 Form 10-K)
|
|
|
|
|
|
|
|
|
|
|
3.10
|
*
|
|
Amended and Restated Bylaws of the Company, effective March 9, 2009 (Exhibit
3.1 to the Companys 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))
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
|
Certain rights of the holders of the Companys Common Stock are set forth in
Exhibits 3.1-3.10 above
|
|
|
|
|
|
|
|
|
|
|
4.2
|
*
|
|
Specimen Form of Certificate representing shares of the Companys Series A
Common Stock (Exhibit 4.2 to the Companys Annual Report on Form 10-K dated March 13,
2001 (Securities and Exchange Commission File No. 001-08598)(the 2000 Form 10-K))
|
|
|
|
|
|
|
|
|
|
|
4.3
|
*
|
|
Specimen Form of Certificate representing shares of the Companys Series B
Common Stock (Exhibit 4.3 to the 2000 Form 10-K)
|
24
|
|
|
|
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
|
|
|
|
|
|
|
|
4.4
|
|
|
Instruments defining rights of debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
*
|
|
|
Indenture dated as of June 1, 1997 between the Company and
The Chase Manhattan Bank, as Trustee (the Indenture)(Exhibit 4.6(1) to the
Companys Quarterly Report on Form 10-Q for the quarter ended June 30, 1997
(Securities and Exchange Commission File No. 002-74702)(the 2
nd
Quarter 1997 Form 10-Q))
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
*
|
|
|
$200 million 7-3/4% Senior Debenture due 2027 (Exhibit 4.6(4)
to the 2
nd
Quarter 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
nd
Quarter 1997 Form 10-Q)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
*
|
|
|
(a) $200 million 7-1/4% Senior Debenture due 2027 (Exhibit
4.6(6)(a) to the Companys Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997 (Securities and Exchange Commission File No. 002-74702)(the
3
rd
Quarter 1997 Form 10-Q))
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
|
(b) $50 million 7-1/4% Senior Debenture due 2027
(Exhibit 4.6(6)(b) to the 3
rd
Quarter 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
rd
Quarter 1997 Form 10-Q)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
*
|
|
|
Form of Belo Corp. 6-3/4% Senior Notes due 2013 (Exhibit 4.3
to the Companys 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 4.2 to
the Companys 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)
|
*
|
|
|
Amended and Restated Five-Year Competitive Advance and
Revolving Credit Facility Agreement dated as of June 7, 2006 among the Company,
as Borrower; JPMorgan Chase Bank, N.A., as Administrative Agent; J.P. Morgan
Securities Inc. and Banc of America Securities LLC, as Joint Lead Arrangers and
Joint Bookrunners; Bank of America, N.A., as Syndication Agent; and SunTrust
Bank, The Bank of New York, and BNP Paribas, as Documentation Agents; and
Mizuho Corporate Bank, Ltd., as Co-Documentation Agent (Exhibit 10.1 to the
Companys Current Report on Form 8-K filed with the Securities and Exchange
Commission on June 7, 2006 (Securities and Exchange Commission File No.
001-08598))
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
*
|
|
|
First Amendment dated as of February 4, 2008 to the Amended
and Restated Five-Year Competitive Advance and Revolving Credit Facility
Agreement dated as of June 7, 2006 among the Company and the Lenders party
thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (Exhibit 99.1 to
the Companys Current Report on Form 8-K filed with the Securities and Exchange
Commission on February 5, 2008 (Securities and Exchange Commission File No.
001-08598))
|
25
|
|
|
|
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
*
|
|
|
Second Amendment dated as of February 26, 2009 to the Amended
and Restated Five-Year Competitive Advance and Revolving Credit Facility
Agreement dated as of June 7,
2006 among the Company and the Lenders party thereto and JPMorgan Chase
Bank, N.A. as Administrative Agent (Exhibit 10.1(3) to the Companys Annual
Report on Form 10-K dated March 2, 2009 (Securities and Exchange Commission
File No. 001-08598)(the 2008 Form 10-K))
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
*
|
|
|
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 2008 Form 10-K)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
*
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
*
|
|
|
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 part thereto and JPMorgan Chase
Bank, N.A., as Administrative Agent (Exhibit 10.2 to the November 16, 2009 Form
8-K)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7)
|
*
|
|
|
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 Companys 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))
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
|
Compensatory plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
Belo Savings Plan:
|
|
|
|
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*
|
|
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(a) Belo Savings Plan Amended and Restated effective
January 1, 2008 (Exhibit 99.1 to the Companys 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))
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*
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(b) First Amendment to the Amended and Restated Belo
Savings Plan effective as of January 1, 2008 (Exhibit 10.2(1)(b) to the
Companys Quarterly Report on Form 10-Q for the quarter ended June 30, 2008
(Securities and Exchange Commission File No. 001-08598))
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*
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(c) Second Amendment to the Amended and Restated Belo
Savings Plan effective as of January 1, 2009 (Exhibit 10.2(1)(c) to the 2008
Form 10-K)
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*
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(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)
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*
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|
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(e) Fourth Amendment to the Amended and Restated Belo
Savings Plan effective as of September 10, 2009 (Exhibit 10.1 to the
Companys 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))
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(2)
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Belo 1986 Long-Term Incentive Plan:
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*
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(a) Belo Corp. 1986 Long-Term Incentive Plan (Effective
May 3, 1989, as amended by Amendments 1, 2, 3, 4 and 5) (Exhibit 10.3(2) to
the Companys Annual Report on Form 10-K dated March 10, 1997 (Securities
and Exchange Commission File No. 001-08598)(the 1996 Form 10-K))
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*
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(b) Amendment No. 6 to 1986 Long-Term Incentive Plan,
dated May 6, 1992 (Exhibit 10.3(2)(b) to the Companys Annual Report on
Form 10-K dated March 19, 1998 (Securities and Exchange Commission File No.
002-74702)(the 1997 Form 10-K))
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*
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(c) Amendment No. 7 to 1986 Long-Term Incentive Plan,
dated October 25, 1995 (Exhibit 10.2(2)(c) to the 1999 Form 10-K)
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*
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(d) Amendment No. 8 to 1986 Long-Term Incentive Plan,
dated July 21, 1998 (Exhibit 10.3(2)(d) to the 2
nd
Quarter 1998
Form 10-Q)
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26
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Exhibit
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Number
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Description
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(3)
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*
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Belo 1995 Executive Compensation Plan, as restated to
incorporate amendments through December 4, 1997 (Exhibit 10.3(3) to the 1997
Form 10-K)
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*
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(a) Amendment to 1995 Executive Compensation Plan,
dated July 21, 1998 (Exhibit 10.2(3)(a) to the 2
nd
Quarter 1998
Form 10-Q)
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*
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(b) Amendment to 1995 Executive Compensation Plan,
dated December 16, 1999 (Exhibit 10.2(3)(b) to the 1999 Form 10-K)
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*
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(c) Amendment to 1995 Executive Compensation Plan,
dated December 5, 2003 (Exhibit 10.3(3)(c) to the Companys Annual Report
on Form 10-K dated March 4, 2004 (Securities and Exchange Commission File
No. 001-08598)(the 2003 Form 10-K))
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*
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(d) Form of Belo Executive Compensation Plan Award
Notification for Employee Awards (Exhibit 10.2(3)(d) to the Companys
Annual Report on Form 10-K dated March 6, 2006 (Securities and Exchange
Commission File No. 001-08598)(the 2005 Form 10-K))
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(4)
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*
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Management Security Plan (Exhibit 10.3(1) to the 1996 Form
10-K)
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*
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(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)
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(5)
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Belo Supplemental Executive Retirement Plan
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*
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(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)
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*
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(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)
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*
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|
(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)
|
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(6)
|
*
|
|
|
Belo Pension Transition Supplement Restoration Plan effective
April 1, 2007 (Exhibit 99.5 to the December 11, 2007 Form 8-K)
|
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|
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*
|
|
|
(a) First Amendment to the Belo Pension Transition
Supplement Restoration Plan, dated May 12, 2009 (Exhibit 10.1 to the
Companys 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))
|
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|
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*
|
|
|
(b) Second Amendment to the Belo Pension Transition
Supplement Restoration Plan, dated March 5, 2010 (Exhibit 10.1 to the
Companys 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))
|
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(7)
|
*
|
|
|
Belo 2000 Executive Compensation Plan (Exhibit 4.15 to the
Companys 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))
|
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|
|
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|
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*
|
|
|
(a) First Amendment to Belo 2000 Executive Compensation
Plan effective as of December 31, 2000 (Exhibit 10.2(6)(a) to the Companys
Annual Report on Form 10-K dated March 12, 2003 (Securities and Exchange
Commission File No. 001-08598 (the 2002 Form 10-K))
|
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*
|
|
|
(b) Second Amendment to Belo 2000 Executive
Compensation Plan dated December 5, 2002 (Exhibit 10.2(6)(b) to the 2002
Form 10-K)
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
*
|
|
|
(c) Third Amendment to Belo 2000 Executive Compensation
Plan dated December 5, 2003 (Exhibit 10.2(6)(c) to the 2003 Form 10-K)
|
|
|
|
|
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|
|
|
|
|
|
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|
|
*
|
|
|
(d) Form of Belo Executive Compensation Plan Award
Notification for Employee Awards (Exhibit 10.2(6)(d) to the 2005 Form 10-K)
|
27
|
|
|
|
|
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|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
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|
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|
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(8)
|
*
|
|
|
Belo Amended and Restated 2004 Executive Compensation Plan
(Exhibit 10.2(8) to the Companys Annual Report on Form 10-K dated March 12,
2010(Securities and Exchange Commission File No. 001-08598)(the 2009 Form
10-K))
|
|
|
|
|
|
|
|
|
|
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|
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|
*
|
|
|
(a) Form of Belo 2004 Executive Compensation Plan Award
Notification for Executive Time-Based Restricted Stock Unit Awards (Exhibit
10.1 to the Companys Current Report on Form 8-K filed with the Securities
and Exchange Commission on March
2, 2006 (Securities and Exchange Commission File No. 001-08598) (the
March 2, 2006 Form 8-K))
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
*
|
|
|
(b) Form of Belo 2004 Executive Compensation Plan Award
Notification for Employee Awards (Exhibit 10.2 to the March 2, 2006 Form
8-K)
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
*
|
|
|
(c) Form of Award Notification under the Belo 2004
Executive Compensation Plan for Non-Employee Director Awards (Exhibit 10.2
to the Companys Current Report on Form 8-K filed with the Securities and
Exchange Commission on December 12, 2005 (Securities and Exchange
Commission File No. 001-08598))
|
|
|
|
|
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|
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|
|
(9)
|
*
|
|
|
Summary of Non-Employee Director Compensation (Exhibit
10.2(9) to the 2009 Form 10-K)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10)
|
*
|
|
|
Belo Corp. Change In Control Severance Plan (Exhibit 10.2(10)
to the Companys 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 Companys 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 Companys 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 October 8,
2010 Form 8-K)
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
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|
|
|
|
|
|
|
|
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
|
28
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 28, 2010
|
By:
|
/s/ Carey P. Hendrickson
|
|
|
|
Carey P. Hendrickson
|
|
|
|
Senior Vice President/Chief Financial Officer
(Principal Financial and Accounting
Officer)
|
|
|
29
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