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8-K - FORM 8-K - BELO CORP | d81664e8vk.htm |
EX-99.2 - EX-99.2 - BELO CORP | d81664exv99w2.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Wednesday, April 27, 2011
7:30 a.m. CDT
Wednesday, April 27, 2011
7:30 a.m. CDT
TELEVISION COMPANY BELO CORP. (BLC) REPORTS RESULTS FOR
FIRST QUARTER 2011
FIRST QUARTER 2011
DALLAS Belo Corp. (NYSE: BLC), one of the nations largest pure-play, publicly-traded
television companies, today reported pro forma earnings per share of $0.09 in the first quarter of
2011 versus pro forma earnings per share of $0.11 in the first quarter of 2010. Pro forma earnings
per share in the first quarter of 2011 exclude a net non-cash charge, after taxes, of $13.3
million, or $0.13 per share, related to the January 2011 split of The G. B. Dealey Retirement
Pension Plan (Pension Plan) with A. H. Belo Corporation (A. H. Belo). Pro forma earnings per
share in the first quarter of 2010 exclude a credit of $2.5 million, net of taxes, or $0.02 per
share, from pension contribution reimbursements received from A. H. Belo related to its obligation
to reimburse Belo for 60 percent of any pension contributions Belo made to the Pension Plan prior
to the completion of the split. Including these items, net earnings (loss) per share in the first
quarter of 2011 were ($0.04) compared to $0.13 per share in the first quarter of 2010.
Dunia A. Shive, Belos president and Chief Executive Officer, said, Belos spot revenue
excluding political was up slightly in the first quarter of 2011 despite difficult comparisons to
the first quarter of 2010, which included significant Olympics and Super Bowl revenue. The
Companys station adjusted EBITDA was $47.4 million in the first quarter of 2011. During the
quarter, the Company paid off the remaining balance of its revolving credit facility. While we
expect to draw on the facility to accommodate interest payments in the second quarter, we currently
expect to begin accumulating a cash balance in the back half of the year as the Companys next
tranche of debt does not mature until May 2013.
Shive also noted that Belos Board of Directors lifted the Companys dividend suspension, with
the declaration of a $0.05 per share quarterly dividend as detailed in a separate press release,
also issued today.
-more-
Belo Announces First Quarter 2011 Results
April 27, 2011
Page Two
April 27, 2011
Page Two
First Quarter in Review
Operating Results
Total revenue decreased 1.9 percent in the first quarter of 2011 versus the first
quarter of 2010. Total spot revenue, excluding political, was up 0.4 percent with a 2.1 percent
increase in local spot revenue and a 2.7 percent decrease in national spot revenue. Core local and
national spot revenue was affected by the loss of Olympics and Super Bowl revenue from the first
quarter of 2010, which totaled $10.7 million. Total spot revenue, including political, was down
4.2 percent in the first quarter of 2011 compared to the first quarter of 2010. Political revenue
in the first quarter of 2011 was $5.9 million lower than the first quarter of 2010.
Other revenue, which includes barter and trade advertising, network compensation, Internet
advertising and retransmission revenue, was up 10 percent in the first quarter of 2011 due
primarily to increases in Internet and retransmission revenue, which were partially offset by a
decrease in network compensation.
Station salaries, wages and employee benefits increased $2.6 million, or 5.1 percent, during
the first quarter of 2011 versus the first quarter of 2010 due primarily to employee merit
increases, partial reinstatement of the Companys 401(k) plan matching contribution which was
suspended in 2009, and higher station pension expense.
Station programming and other operating costs were up $4.6 million in the first quarter of
2011 compared to the first quarter 2010 due primarily to a $3.9 million non-cash expense reduction
related to third-party funding of certain newsgathering equipment in the first quarter of 2010.
Station adjusted EBITDA was $47.4 million for the first quarter of 2011, and the station
adjusted EBITDA margin for the first quarter of 2011 was 31 percent.
Corporate
Corporate operating costs of $6.3 million in the first quarter of 2011 were $3.3 million lower
than the first quarter of 2010 due primarily to lower accrued bonus expense, a decrease in outside
services expense primarily related to lower technology costs, and lower pension expense.
- more -
Belo Announces First Quarter 2011 Results
April 27, 2011
Page Three
April 27, 2011
Page Three
The Companys reported combined station and corporate operating costs were up 3.6 percent in
the first quarter of 2011 compared to the first quarter of 2010.
Other Items
On January 3, 2011, Belo announced the completion of the split of the Pension Plan with A. H.
Belo. In the first quarter of 2011, the Company recorded a net non-cash charge of $20.5 million
related to the Pension Plan split, with an associated tax benefit of $7.1 million. The $20.5
million charge is shown as a separate component of total operating costs and expenses on Belos
Consolidated Statements of Operations. The Company also recorded an
increase in equity of $72
million and a reduction in its unfunded pension liability of $117 million in the first quarter 2011
in connection with the split.
The Company recorded a reduction in operating expenses of $4.1 million in the first quarter of
2010 related to pension contribution reimbursements received from A. H. Belo pursuant to its
obligation to reimburse Belo for 60 percent of any pension contributions Belo made to the Pension
Plan prior to the split.
Belos depreciation expense totaled $7.9 million in the first quarter of 2011, down from $9.2
million in the first quarter of 2010.
The Companys interest expense decreased $1.9 million in the first quarter of 2011 compared to
the first quarter of 2010 due primarily to lower borrowings on its revolving credit facility and
lower ongoing fees associated with the Companys election to reduce the commitment amount under its
facility in 2010.
Income tax expense decreased $9.7 million in the first quarter of 2011 compared to the first
quarter of 2010 due primarily to the $7.1 million tax benefit related to the Pension Plan split and
lower pre-tax earnings. The Companys full year effective tax rate for 2011 is currently expected
to be around 40 percent.
- more -
Belo Announces First Quarter 2011 Results
April 27, 2011
Page Four
April 27, 2011
Page Four
Total debt at March 31, 2011, was $886 million, which consisted entirely of fixed-rate debt.
The Company paid down the remaining $11 million of its revolving credit facility during the quarter
and had approximately $9 million invested in marketable securities at March 31, 2011. The
Companys total leverage ratio, as defined in the Companys credit facility, was 3.6 times at March
31, 2011, down from 3.7 times at December 31, 2010. Belo invested $3 million in capital
expenditures in the first quarter of 2011 and currently expects full year capital expenditures to
be approximately $16 million.
Non-GAAP Financial Measures
A reconciliation of station adjusted EBITDA to earnings from operations and a reconciliation
of net earnings (loss) to pro forma net earnings are set forth in an exhibit to this release.
Outlook
Looking to the second quarter, Shive said, While we have not yet seen a significant change in
the overall pace of our business related to ongoing events in Japan, we do expect some level of
disruption in the second quarter, particularly in the automotive category. While pacings currently
reflect a higher percentage growth rate, we are currently estimating spot revenue excluding
political to be flat to up low-single digits in the second quarter of 2011 compared to the second
quarter of 2010 due to the uncertainty surrounding auto supply in the second quarter.
For the second quarter of 2011, combined station and corporate operating costs are currently
estimated to be up about 8 percent compared to the second quarter of 2010. Excluding a $3.1
million non-cash expense reduction related to third-party funding of certain newsgathering
equipment in the second quarter of 2010, combined station and corporate operating costs are
estimated to be up about 5 percent.
-more-
Belo Announces First Quarter 2011 Results
April 27, 2011
Page Five
April 27, 2011
Page Five
A conference call to discuss this release and other matters of interest to shareholders and
analysts will follow at 1:00 p.m. CDT this afternoon. The conference call will be simultaneously
Webcast on Belo Corp.s Web site (www.belo.com/invest). Following the conclusion of the Webcast, a
replay of the conference call will be archived on Belos Web site. To access the listen-only
conference lines, dial 1-877-764-2008. A replay line will be open from 3:00 p.m. CDT on April 27
until 11:59 p.m. CDT May 11. To access the replay, dial 800-475-6701 or 320-365-3844. The access
code for the replay is 200861.
About Belo Corp.
Belo Corp. (BLC), one of the nations largest pure-play, publicly-traded television companies,
owns and operates 20 television stations (nine in the top 25 markets) and their associated Web
sites. Belo stations, which include affiliations with ABC, CBS, NBC, FOX, and
the CW, reach more than 14 percent of U.S. television households in 15 highly-attractive markets.
Belo stations rank first or second in nearly all of their local markets. Additional information is
available at www.belo.com or by contacting Paul Fry, vice president/Investor Relations & Treasury
Operations, at 214-977-4465.
Statements in this communication 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 Corporation 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 and devices to distribute and consume
television and other audio-visual content; changes in the ability to secure, and in the terms of,
carriage of Belo programming on cable, satellite, telecommunications and other program distribution
methods; development of Internet commerce; industry cycles; changes in pricing or other actions by
competitors and suppliers; Federal Communications Commission and other regulatory, tax and legal
changes; 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 SEC including Belos Annual Report
on Form 10-K.
-30-
Belo Corp.
Consolidated Statements of Operations
Three months ended | ||||||||
March 31, | ||||||||
In thousands, except per share amounts | 2011 | 2010 | ||||||
(unaudited) | (unaudited) | |||||||
Net Operating Revenues |
$ | 151,470 | $ | 154,332 | ||||
Operating Costs and Expenses |
||||||||
Station salaries, wages and employee benefits |
53,836 | 51,224 | ||||||
Station programming and other operating costs |
50,196 | 45,631 | ||||||
Corporate operating costs |
6,299 | 9,609 | ||||||
Pension settlement charge and contribution reimbursements |
20,466 | (4,072 | ) | |||||
Depreciation |
7,924 | 9,243 | ||||||
Total operating costs and expenses |
138,721 | 111,635 | ||||||
Earnings from operations |
12,749 | 42,697 | ||||||
Other Income and (Expense) |
||||||||
Interest expense |
(17,983 | ) | (19,888 | ) | ||||
Other income (expense), net |
180 | (267 | ) | |||||
Total other income and (expense) |
(17,803 | ) | (20,155 | ) | ||||
Earnings (loss) before income taxes |
(5,054 | ) | 22,542 | |||||
Income tax (benefit) expense |
(740 | ) | 9,000 | |||||
Net earnings (loss) |
$ | (4,314 | ) | $ | 13,542 | |||
Net earnings (loss) per share Basic |
$ | (0.04 | ) | $ | 0.13 | |||
Net earnings (loss) per share Diluted |
$ | (0.04 | ) | $ | 0.13 | |||
Weighted average shares outstanding |
||||||||
Basic |
103,403 | 102,809 | ||||||
Diluted |
103,403 | 103,225 |
Belo Corp.
Consolidated Condensed Balance Sheets
March 31, | December 31, | |||||||
In thousands | 2011 | 2010 | ||||||
(unaudited) | ||||||||
Assets |
||||||||
Current assets |
||||||||
Cash and temporary cash investments |
$ | 12,383 | $ | 8,309 | ||||
Accounts receivable, net |
131,240 | 144,992 | ||||||
Other current assets |
74,741 | 57,495 | ||||||
Total current assets |
218,364 | 210,796 | ||||||
Property, plant and equipment, net |
159,006 | 164,439 | ||||||
Intangible assets, net |
1,149,272 | 1,149,272 | ||||||
Other assets |
63,576 | 65,883 | ||||||
Total assets |
$ | 1,590,218 | $ | 1,590,390 | ||||
Liabilities and Shareholders Equity |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | 17,349 | $ | 20,744 | ||||
Accrued expenses |
76,425 | 88,845 | ||||||
Other current liabilities |
30,080 | 27,611 | ||||||
Total current liabilities |
123,854 | 137,200 | ||||||
Long-term debt |
886,331 | 897,111 | ||||||
Deferred income taxes |
246,338 | 206,765 | ||||||
Other liabilities |
80,818 | 178,672 | ||||||
Total shareholders equity |
252,877 | 170,642 | ||||||
Total liabilities and shareholders equity |
$ | 1,590,218 | $ | 1,590,390 | ||||
Belo Corp.
Non-GAAP to GAAP Reconciliations
Station Adjusted EBITDA
Three months ended | ||||||||
March 31, | ||||||||
In thousands (unaudited) | 2011 | 2010 | ||||||
Station Adjusted EBITDA (1) |
$ | 47,438 | $ | 57,477 | ||||
Corporate operating costs |
(6,299 | ) | (9,609 | ) | ||||
Depreciation |
(7,924 | ) | (9,243 | ) | ||||
Pension settlement charge
and contribution
reimbursements |
(20,466 | ) | 4,072 | |||||
Earnings from operations |
$ | 12,749 | $ | 42,697 | ||||
Note 1: | 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 settlement charge and contribution reimbursements, and corporate operating costs. Other income (expense), net is not allocated to television station earnings from operations because it consists primarily of equity in earnings (losses) from investments in partnerships and joint ventures and other non-operating income (expense). |
Pro Forma Net Earnings
Three months ended | Three months ended | |||||||||||||||
March 31, 2011 | March 31, 2010 | |||||||||||||||
In thousands (unaudited) | Earnings | EPS | Earnings | EPS | ||||||||||||
Net earnings (loss) |
$ | (4,314 | ) | $ | (0.04 | ) | $ | 13,542 | $ | 0.13 | ||||||
Pension settlement
charge and contribution
reimbursements, net of
tax |
13,323 | 0.13 | (2,484 | ) | (0.02 | ) | ||||||||||
Pro forma net earnings |
$ | 9,009 | $ | 0.09 | $ | 11,058 | $ | 0.11 | ||||||||