Attached files
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| 8-K - FORM 8-K - BELO CORP | d83959e8vk.htm |
Exhibit 99.1
| FOR IMMEDIATE RELEASE Thursday, August 4, 2011 7:30 a.m. CDT |
TELEVISION COMPANY BELO CORP. (BLC) REPORTS RESULTS FOR
SECOND QUARTER 2011
SECOND QUARTER 2011
DALLAS — Belo Corp. (NYSE: BLC), one of the nation’s largest pure-play, publicly-traded
television companies, today reported GAAP net earnings per share in the second quarter of 2011 of
$0.17 compared to GAAP net earnings per share of $0.19 in the second quarter of 2010. The second
quarter of 2010 included a credit of $2.6 million, net of taxes, from pension contribution
reimbursements received from A. H. Belo Corporation (“A. H. Belo”) related to its then-existing
obligation to reimburse Belo for 60 percent of any contributions Belo made to The G. B. Dealey
Retirement Pension Plan (the “Pension Plan”). Excluding the credit, pro forma earnings per share
in the second quarter of 2010 were $0.16 per share.
Dunia A. Shive, Belo’s president and Chief Executive Officer, said, “Belo’s spot revenue
excluding political was up 2.4 percent in the second quarter of 2011 compared to the second quarter
of 2010 despite disruption in the automotive category related to events in Japan.
Automotive cancellations were within our initial expectations for the quarter, and we experienced
strong performance in other key categories such as retail, healthcare and telecommunications.
Excluding automotive revenue, our core spot revenue was up 5 percent in the second quarter of 2011
compared to the second quarter of 2011.”
Second Quarter in Review
Operating Results
Total revenue increased 2.1 percent in the second quarter of 2011 versus the second quarter of
2010. Total spot revenue, excluding political, was up 2.4 percent with a 2 percent increase in
local spot revenue and a 3.2 percent increase in national spot revenue. Core local and
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Belo Announces Second Quarter 2011 Results
August 4, 2011
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national spot revenue was affected by a 6.6 percent decrease in automotive revenue due to the
disruption in auto supply related to events in Japan. Total spot revenue, including political, was
up 1.4 percent in the second quarter of 2011 compared to the second quarter of 2010. Political
revenue in the second quarter of 2011 was $1.4 million lower than the second quarter of 2010.
Other revenue, which includes barter and trade advertising, network compensation, Internet
advertising and retransmission revenue, was up 5.6 percent in the second quarter of 2011 compared
to 2010 due to double-digit percentage 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 percent, during the
second quarter of 2011 versus the second quarter of 2010 due primarily to employee merit increases,
partial reinstatement of the Company’s 401(k) plan matching contribution which was suspended in
2009, and higher station pension expense.
Station programming and other operating costs were up $5.6 million in the second quarter of
2011 compared to second quarter 2010 due primarily to a $3.1 million non-cash expense reduction
related to third-party funding of certain newsgathering equipment in the second quarter of 2010,
and increases in programming, advertising and promotion, and technology costs.
Corporate
Corporate operating costs of $6.7 million in the second quarter of 2011 were $1.2 million
lower than the second quarter of 2010 due primarily to lower expenses for pension, accrued bonuses
and technology support.
Excluding the $3.1 million non-cash expense reduction in the second quarter of 2010 discussed
above, combined station and corporate operating costs were up 3.5 percent in the second quarter of
2011 compared to the second quarter of 2010. On a reported basis, the Company’s combined station
and corporate operating costs were up 6.6 percent in the second quarter of 2011 compared to the
second quarter of 2010.
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Belo Announces Second Quarter 2011 Results
August 4, 2011
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August 4, 2011
Page Three
Other Items
The Company recorded a reduction in operating expenses of $4.2 million in the second quarter
of 2010 related to pension contribution reimbursements received from A. H. Belo pursuant to its
then-existing obligation to reimburse Belo for 60 percent of any pension contributions Belo made prior to the split of the Pension Plan on January 1, 2011.
Belo’s depreciation expense totaled $7.7 million in the second quarter of 2011, down from $8.8
million in the second quarter of 2010.
The Company’s interest expense decreased $1.8 million in the second quarter of 2011 compared
to the second quarter of 2010 due primarily to lower borrowings on its revolving credit facility
and lower ongoing fees resulting from the Company’s election to reduce the commitment amount under
its facility in 2010.
Income tax expense decreased $3.3 million in the second quarter of 2011 compared to the second
quarter of 2010 due primarily to lower pre-tax earnings and the satisfactory resolution of various
pending tax matters.
Total debt at June 30, 2011, was $887 million, which consisted entirely of fixed-rate public
debt. The Company’s total leverage ratio, as defined in the Company’s credit facility, was 3.7
times at June 30, 2011. Belo invested $3.7 million in capital expenditures in the second 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 to pro forma net earnings are set forth in an exhibit to this release.
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Belo Announces Second Quarter 2011 Results
August 4, 2011
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Outlook
Looking to the third quarter, Shive said, “We expect automotive spending to stabilize late in
the third quarter with continued improvement in the fourth quarter. We are currently estimating spot
revenue excluding political to be flat in the third quarter of 2011 compared to the third quarter
of 2010. Our stations generated $11.2 million of political revenue in the third quarter of 2010
which we will cycle against in the third quarter of 2011. As a result, we are currently estimating third quarter total
revenue to be down mid-single digits versus the prior year.
“Combined station and corporate operating costs are currently estimated to be up about 2
percent in the third quarter of 2011 compared to the third quarter of 2010. Also, in July 2011,
the Company received satisfactory resolution of another pending tax matter, which will result in a
tax benefit of approximately $2.4 million in the third quarter of 2011. The Company’s effective
tax rate for the full year 2011 is now expected to be approximately 36 percent.”
A conference call to discuss this release and other matters of interest to shareholders and
analysts will follow at 10:00 a.m. CDT this morning. The conference call will be simultaneously
webcast on Belo Corp.’s website (www.belo.com/invest). Following the conclusion of the webcast, a
replay of the conference call will be archived on Belo’s website. To access the listen-only
conference lines, dial 1-800-288-8960. A replay line will be open from 12:00 p.m. CDT on August 4
until 11:59 p.m. CDT August 18. To access the replay, dial 800-475-6701 or 320-365-3844. The
access code for the replay is 210868.
About Belo Corp.
Belo Corp. (BLC), one of the nation’s largest pure-play, publicly-traded television companies,
owns and operates 20 television stations (nine in the top 25 markets) and their associated websites. 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.
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Belo Announces Second Quarter 2011 Results
August 4, 2011
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August 4, 2011
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Statements in this communication concerning Belo’s business outlook or future economic
performance, anticipated profitability, revenues, expenses, capital expenditures, investments,
future financings, impairments, pension matters, and other financial and non-financial items that
are not historical facts, are “forward-looking statements” as the term is defined under applicable
federal securities laws. Forward-looking statements are subject to risks, uncertainties and other
factors that could cause actual results to differ materially from those statements.
Such risks, uncertainties and factors include, but are not limited to, uncertainties regarding
the costs, consequences (including tax consequences) and other effects of the Company’s 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 Belo’s other public disclosures and filings with the SEC including Belo’s Annual Report
on Form 10-K.
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Belo Corp.
Consolidated Statements of Operations
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| In thousands, except per share amounts | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||
Net Operating Revenues |
$ | 166,379 | $ | 162,982 | $ | 317,849 | $ | 317,314 | ||||||||
Operating Costs and Expenses |
||||||||||||||||
Station salaries, wages and employee benefits |
54,525 | 51,911 | 108,361 | 103,135 | ||||||||||||
Station programming and other operating costs |
52,565 | 47,015 | 102,761 | 92,646 | ||||||||||||
Corporate operating costs |
6,692 | 7,855 | 12,991 | 17,464 | ||||||||||||
Pension settlement charge and contribution reimbursements |
— | (4,200 | ) | 20,466 | (8,272 | ) | ||||||||||
Depreciation |
7,707 | 8,770 | 15,631 | 18,013 | ||||||||||||
Total operating costs and expenses |
121,489 | 111,351 | 260,210 | 222,986 | ||||||||||||
Earnings from operations |
44,890 | 51,631 | 57,639 | 94,328 | ||||||||||||
Other Income and (Expense) |
||||||||||||||||
Interest expense |
(18,050 | ) | (19,815 | ) | (36,033 | ) | (39,703 | ) | ||||||||
Other income, net |
649 | 375 | 829 | 108 | ||||||||||||
Total other income and (expense) |
(17,401 | ) | (19,440 | ) | (35,204 | ) | (39,595 | ) | ||||||||
Earnings before income taxes |
27,489 | 32,191 | 22,435 | 54,733 | ||||||||||||
Income tax expense |
9,402 | 12,666 | 8,662 | 21,666 | ||||||||||||
Net earnings |
$ | 18,087 | $ | 19,525 | $ | 13,773 | $ | 33,067 | ||||||||
Net earnings per share — Basic |
$ | 0.17 | $ | 0.19 | $ | 0.13 | $ | 0.32 | ||||||||
Net earnings per share — Diluted |
$ | 0.17 | $ | 0.19 | $ | 0.13 | $ | 0.31 | ||||||||
Weighted average shares outstanding |
||||||||||||||||
Basic |
103,626 | 103,027 | 103,515 | 102,919 | ||||||||||||
Diluted |
104,022 | 103,456 | 103,917 | 103,342 | ||||||||||||
Dividends declared per share |
$ | 0.05 | $ | — | $ | 0.05 | $ | — | ||||||||
Belo Corp.
Consolidated Condensed Balance Sheets
| June 30, | December 31, | |||||||
| In thousands | 2011 | 2010 | ||||||
| (unaudited) | ||||||||
Assets |
||||||||
Current assets |
||||||||
Cash and temporary cash investments |
$ | 16,061 | $ | 8,309 | ||||
Accounts receivable, net |
141,271 | 144,992 | ||||||
Other current assets |
53,714 | 57,495 | ||||||
Total current assets |
211,046 | 210,796 | ||||||
Property, plant and equipment, net |
149,638 | 164,439 | ||||||
Intangible assets, net |
1,149,272 | 1,149,272 | ||||||
Other assets |
63,795 | 65,883 | ||||||
Total assets |
$ | 1,573,751 | $ | 1,590,390 | ||||
Liabilities and Shareholders’ Equity |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | 18,449 | $ | 20,744 | ||||
Accrued expenses |
53,345 | 88,845 | ||||||
Other current liabilities |
23,718 | 27,611 | ||||||
Total current liabilities |
95,512 | 137,200 | ||||||
Long-term debt |
886,553 | 897,111 | ||||||
Deferred income taxes |
250,675 | 206,765 | ||||||
Other liabilities |
74,106 | 178,672 | ||||||
Total shareholders’ equity |
266,905 | 170,642 | ||||||
Total liabilities and shareholders’ equity |
$ | 1,573,751 | $ | 1,590,390 | ||||
Belo Corp.
Non-GAAP to GAAP Reconciliations
Non-GAAP to GAAP Reconciliations
Station Adjusted EBITDA
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| In thousands (unaudited) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Station Adjusted EBITDA (1) |
$ | 59,289 | $ | 64,056 | $ | 106,727 | $ | 121,533 | ||||||||
Corporate operating costs |
(6,692 | ) | (7,855 | ) | (12,991 | ) | (17,464 | ) | ||||||||
Depreciation |
(7,707 | ) | (8,770 | ) | (15,631 | ) | (18,013 | ) | ||||||||
Pension settlement charge and contribution reimbursements |
— | 4,200 | (20,466 | ) | 8,272 | |||||||||||
Earnings from operations |
$ | 44,890 | $ | 51,631 | $ | 57,639 | $ | 94,328 | ||||||||
| Note 1: | Belo’s 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 Company’s 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
In thousands (unaudited)
| Three months ended | Three months ended | |||||||||||||||
| June 30, 2011 | June 30, 2010 | |||||||||||||||
| Earnings | EPS | Earnings | EPS | |||||||||||||
Net earnings |
$ | 18,087 | $ | 0.17 | $ | 19,525 | $ | 0.19 | ||||||||
Pension settlement charge and contribution reimbursements, net of tax |
— | — | (2,562 | ) | (0.02 | ) | ||||||||||
Pro forma net earnings |
$ | 18,087 | $ | 0.17 | $ | 16,963 | $ | 0.16 | ||||||||
| Six months ended | Six months ended | |||||||||||||||
| June 30, 2011 | June 30, 2010 | |||||||||||||||
| Earnings | EPS | Earnings | EPS | |||||||||||||
Net earnings |
$ | 13,773 | $ | 0.13 | $ | 33,067 | $ | 0.31 | ||||||||
Pension settlement
charge and contribution
reimbursements, net of
tax |
13,323 | 0.13 | (5,046 | ) | (0.05 | ) | ||||||||||
Pro forma net earnings |
$ | 27,096 | $ | 0.26 | $ | 28,021 | $ | 0.27 | ||||||||