<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 1, 1995
A. H. BELO CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-8598 75-0135890
(State or other jurisdiction (Commission (I. R. S. Employer
of incorporation) File Number) Identification No.)
P. O. Box 655237
Dallas, Texas 75265-5237
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(214) 977-6606
<PAGE> 2
Item 2. Acquisition or Disposition of Assets.
On February 1, 1995, A. H. Belo Corporation (the "Company"), acquired Third
Avenue Television, Inc., holder of certain assets of KIRO Television, Third
Avenue Productions and KIRO Direct (collectively, "KIRO") from KIRO, Inc. On
the same date, the Company acquired the FCC license of television station
KIRO-TV and certain other related assets from Bonneville Holding Company
("BHC"). The purchase price was $162,500,000 in cash, plus transaction costs.
The acquisition was completed according to the terms of the Stock Sale
Agreement dated as of November 29, 1994 between the Company and KIRO, Inc., and
the Asset Sale Agreement dated as of November 29, 1994 between the Company and
BHC.
Item 7. Financial Statements and Exhibits.
The undersigned hereby files the following financial statements, pro forma
financial information and exhibits as part of this report:
7(a). Financial Statements of Business Acquired.
Audited combined financial statements of KIRO Television,
Third Avenue Productions, and KIRO Direct ("the Divisions" or
"KIRO") for the following periods:
Combined Balance Sheet as of December 31, 1994;
Combined Statement of Income and Divisional Equity for
the year ended December 31, 1994;
Combined Statement of Cash Flows for the year ended
December 31, 1994;
Notes to Combined Financial Statements.
The foregoing Financial Statements, together with the
Independent Auditors' Report, are included on pages F-1
through F-10 of this report.
7(b). Pro Forma Financial Information.
Pro Forma Consolidated Condensed Balance Sheet as of December
31, 1994;
Pro Forma Consolidated Statement of Earnings for the Year
Ended December 31, 1994;
Notes to Pro Forma Consolidated Financial Statements.
The foregoing Pro Forma Financial Information is included on
pages P-1 through P-5 of this report.
7(c). Exhibits.
The following exhibits are included as part of this report:
2.1 Stock Sale Agreement dated as of November 29, 1994
between KIRO, Inc. and A. H. Belo Corporation
2.2 Asset Sale Agreement dated as of November 29, 1994
between Bonneville Holding Company and A. H. Belo
Corporation
23.1 Consent of Deloitte & Touche LLP
99.1 Press Release of the Company dated January 31, 1995
<PAGE> 3
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amended report to be signed on its behalf by
the undersigned, thereunto duly authorized.
A. H. BELO CORPORATION
(Registrant)
By: /s/Michael D. Perry
Michael D. Perry
Senior Vice President and Chief
Financial Officer
Date: April 10, 1995
<PAGE> 4
ITEM 7 (a)
FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
<PAGE> 5
KIRO TELEVISION, THIRD AVENUE
PRODUCTIONS, AND KIRO DIRECT
(divisions of KIRO, Inc.)
================================================================================
FINANCIAL STATEMENTS FOR THE
YEAR ENDED DECEMBER 31, 1994, AND
INDEPENDENT AUDITORS' REPORT
F-1
<PAGE> 6
INDEPENDENT AUDITORS' REPORT
KIRO Television, Third Avenue Productions,
and KIRO Direct
Seattle, Washington
We have audited the accompanying combined balance sheet of KIRO Television,
Third Avenue Productions, and KIRO Direct (divisions of KIRO, Inc.) (the
Divisions) as of December 31, 1994, and the related combined statements of
income and divisional equity and of cash flows for the year then ended. These
financial statements are the responsibility of the Divisions' management. Our
responsibility is to express an opinion on these combined financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the 1994 combined financial statements present fairly, in all
material respects, the combined financial position of the Divisions at December
31, 1994, and the results of their operations and cash flows for the year then
ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared from the separate
records maintained by the Divisions and may not necessarily be indicative of
the conditions that would have existed or the results of operations if the
Divisions had been operated as unaffiliated companies. Portions of certain
income and expenses represent allocations made from corporate items applicable
to KIRO, Inc. as a whole.
/s/ Deloitte & Touche LLP
February 24, 1995
F-2
<PAGE> 7
KIRO TELEVISION, THIRD AVENUE
PRODUCTIONS, AND KIRO DIRECT
- -----------------------------
(divisions of KIRO, Inc.)
COMBINED BALANCE SHEET
DECEMBER 31, 1994
================================================================================
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS:
Trade accounts receivable, net of allowance for
doubtful accounts of $369,000 $ 9,631,977
Other accounts and notes receivable 30,689
Deferred tax asset (Note 1) 620,285
Other current assets 47,512
-------------
Total current assets 10,330,463
PROPERTY, at cost:
Land 1,603,424
Buildings and leasehold improvements 6,727,629
Furniture, fixtures, and equipment 28,778,235
-------------
37,109,288
Less accumulated depreciation (24,610,972)
-------------
Net property 12,498,316
OTHER ASSETS, at cost 274,757
-------------
TOTAL $ 23,103,536
=============
</TABLE>
F-3
<PAGE> 8
================================================================================
LIABILITIES AND DIVISIONAL EQUITY
<TABLE>
<S> <C>
CURRENT LIABILITIES:
Accounts payable $ 1,003,899
Advertising services due 88,587
Accrued salaries, commissions, and bonuses 619,202
Accrued vacation 680,953
Accrued property taxes 156,268
Net due to parent (Notes 1 and 3) 5,211,753
Other 364,736
-------------
Total current liabilities 8,125,398
DEFERRED FEDERAL INCOME TAXES (Note 3) 592,663
-------------
Total liabilities 8,718,061
COMMITMENTS AND CONTINGENCIES (Notes 2 and 5)
DIVISIONAL EQUITY 14,385,475
-------------
TOTAL $ 23,103,536
=============
</TABLE>
____
2
F-4
<PAGE> 9
KIRO TELEVISION, THIRD AVENUE
PRODUCTIONS, AND KIRO DIRECT
- -----------------------------
(divisions of KIRO, Inc.)
COMBINED STATEMENT OF INCOME AND DIVISIONAL EQUITY
YEAR ENDED DECEMBER 31, 1994
================================================================================
<TABLE>
<S> <C>
GROSS REVENUE:
Television $ 49,208,285
Third Avenue Productions 3,743,430
KIRO Direct 1,149,690
-------------
Total gross revenue 54,101,405
Agency and representative commissions (7,639,855)
-------------
Net revenue 46,461,550
DIRECT AND OPERATING EXPENSES:
Direct expenses 1,500,599
Operating and programming expenses 19,351,133
Selling and promotion expenses 5,225,576
General and administrative expenses 6,945,407
Depreciation expense 2,595,951
FCC license royalty fees (Note 1) 1,082,582
-------------
Total direct and operating expenses 36,701,248
-------------
Operating income 9,760,302
OTHER INCOME (EXPENSE):
Interest income 950
Other, net (30,875)
-------------
Other expense, net (29,925)
-------------
Income before provision for federal income tax 9,730,377
PROVISION FOR FEDERAL INCOME TAX (Note 3) 3,398,820
-------------
NET INCOME 6,331,557
DIVISIONAL EQUITY:
Beginning of year 14,190,918
Cash dividends (6,137,000)
-------------
End of year $ 14,385,475
=============
</TABLE>
_____
3
F-5
<PAGE> 10
KIRO TELEVISION, THIRD AVENUE
PRODUCTIONS, AND KIRO DIRECT
- -----------------------------
(divisions of KIRO, Inc.)
COMBINED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1994
================================================================================
<TABLE>
<S> <C>
OPERATING ACTIVITIES:
Net income $ 6,331,557
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 2,595,591
Deferred federal income tax 9,359
Cash provided (used) by changes in operating
assets and liabilities:
Trade accounts receivable (1,047,601)
Other current assets 9,735
Accounts payable (363,017)
Advertising services due (35,335)
Accrued salaries, commissions, and bonuses 28,529
Accrued vacation 16,158
Accrued property taxes (41,628)
Net due to parent 960,121
Other (12,093)
------------
Net cash provided by operating activities 8,451,376
INVESTING ACTIVITIES:
Acquisitions of property, net (2,216,210)
Other (98,166)
------------
Net cash used by investing activities (2,314,376)
FINANCING ACTIVITIES:
Cash dividends (6,137,000)
------------
NET INCREASE IN CASH
CASH:
Beginning of year
------------
End of year $ -
============
</TABLE>
____
4
F-6
<PAGE> 11
KIRO TELEVISION, THIRD AVENUE
PRODUCTIONS, AND KIRO DIRECT
- -----------------------------
(divisions of KIRO, Inc.)
NOTES TO COMBINED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1994
================================================================================
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES
GENERAL: KIRO Television, Third Avenue Productions, and KIRO Direct (the
Divisions) are divisions of KIRO, Inc., a wholly owned subsidiary of
Bonneville International Corporation (BIC). The Divisions operate a
television station (KIRO Television), a video production facility (Third
Avenue Productions), and a direct response marketing division (KIRO
Direct), all located in Seattle, Washington.
The financial statements include a proportionate allocation of KIRO, Inc.'s
current assets; furniture, fixtures, and equipment; other assets, current
liabilities; and indirect general and administrative expenses, allocated to
the Divisions based on the Divisions' historical revenues, which in
management's opinion is a reasonable basis for allocation, and provides for
charges which reflect reasonable costs of doing business. Amounts
allocated to the Divisions from KIRO, Inc. as of and for the year ended
December 31, 1994, include current assets of $24,047; furniture, fixtures,
and equipment of $459,920; other assets of $110,988; current liabilities of
$877,946; general and administrative expenses of $2,996,533; and other
expense of $32,471.
The dividends paid by the Divisions to KIRO, Inc. are based on the
Divisions' proportionate share of KIRO, Inc.'s combined net income.
PURCHASE AND SALES AGREEMENT: On November 29, 1994, KIRO, Inc. entered
into a purchase and sales agreement with A. H. Belo Corporation to sell the
Divisions for cash of $162,500,000. The transaction closed effective
February 1, 1995.
RELATED PARTY TRANSACTIONS: The Divisions engage in various transactions
with their parent. The Divisions are allocated royalty fee expense paid by
KIRO, Inc. to an affiliate for the Divisions' use of the Federal
Communications Commission television broadcast licenses owned by the
affiliate. Total expense for 1994 was $1,082,582.
All cash generated by the Divisions is considered to be transferred to
KIRO, Inc. on a daily basis. Such amounts are included in due to parent in
the balance sheet at December 31, 1994.
A reconciliation of the net amounts due to parent at December 31, 1994, is
as follows:
<TABLE>
<S> <C>
Cash transfers $ 739,710
Royalty fees 1,082,582
Current federal income taxes payable (Note 3) 3,389,461
----------
Total due to parent $5,211,753
==========
</TABLE>
No interest has been provided on amounts due to parent. The average
balance due to parent during the year ended December 31, 1994, was
$3,639,765.
____
5
F-7
<PAGE> 12
TELEVISION PROGRAM RIGHTS: The cost of television program rights and the
related obligation are recorded at the date the programs become available
for broadcasting. Certain rights are acquired in barter transactions, which
are accounted for based on the estimated fair value of advertising air time
to be provided by the Divisions over the contract term, plus any required
cash payments. All programs acquired under contracts and through barter
transactions were unavailable for broadcasting as of December 31, 1994.
Accordingly, there are no program rights or related obligations recorded as
of the balance sheet date.
DEPRECIATION POLICIES: For financial statement purposes, depreciation of
property is provided using the straight-line method over the following
estimated useful lives:
<TABLE>
<CAPTION>
Years
-----
<S> <C>
Buildings 15 - 40
Furniture and fixtures 6 - 10
Equipment 3 - 20
</TABLE>
REVENUE: Broadcasting revenue is recognized as the advertising is
broadcast. Included in revenue are nonmonetary amounts arising from the
trading of advertising for television program rights, services, and
merchandise. Such transactions are recorded based on the fair value of
goods and services received or of advertising exchanged for television
program rights.
NOTE 2: TELEVISION PROGRAM CONTRACTS
As of December 31, 1994, the Divisions were committed to purchase program
material, which was not available for telecasting, under broadcasting license
agreements for cash totalling $3,032,668. The cost of these rights and the
related liabilities have not been included in the accompanying financial
statements as the program material was not available for broadcasting at the
balance sheet date. Future cash payments required under these agreements are
as follows:
<TABLE>
<S> <C>
1995 $ 2,200,668
1996 832,000
------------
$ 3,032,668
============
</TABLE>
NOTE 3: FEDERAL INCOME TAX
The results of the Divisions' operations, as reflected in the financial
statements of KIRO, Inc., are included in the consolidated federal income tax
return filed by Deseret Management Corporation, the parent company of BIC. The
amount due to parent for the Divisions' current tax liability determined on a
separate return basis is $3,389,461 at December 31, 1994 (Note 1).
The Divisions adopted Statement of Financial Accounting Standards (SFAS) No.
109, Accounting for Income Taxes, effective January 1, 1993. This Statement
supersedes Accounting Principles Board Opinion No. 11 and SFAS No. 96. The
Divisions had not previously adopted SFAS No. 96.
____
6
F-8
<PAGE> 13
Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The tax effects of
significant items comprising the Divisions' deferred tax asset and liability as
of December 31, 1994, are as follows:
<TABLE>
<CAPTION>
Current Noncurrent
------------ -----------
<S> <C> <C>
Deferred tax assets:
Retirement benefit obligations $ - $ 344,856
Deferred compensation 130,940
Accrued vacation costs 290,084
Provision for bad debts 169,591
Other 29,670
------------ -----------
620,285 344,856
Deferred tax liabilities:
Difference between book and
tax basis of property 937,519
----------- -----------
Net deferred tax asset (liability) $ 620,285 $ (592,663)
=========== ===========
</TABLE>
The provision for income taxes for the year ended December 31, 1994, consists
of the following:
<TABLE>
<S> <C>
Continuing operations:
Current tax expense $ 3,389,461
Deferred tax expense 9,359
-----------
Total $ 3,398,820
===========
</TABLE>
NOTE 4: EMPLOYEE PENSION PLANS
The Divisions participate in a defined benefit retirement plan which generally
covers all employees with one or more years of service who are at least 21
years of age. The plan is administered and managed by an affiliated entity.
Benefits are based on years of service and the average of each employee's
highest five consecutive, of the last ten, years of compensation. Net pension
expense allocated to the Divisions under this plan for the year ended December
31, 1994, was $420,367.
The Divisions also provide monetary benefits (fixed monthly dollar amounts
toward the purchase of medical, dental, and life insurance) for retired
employees under a plan administered and managed by an affiliated entity. The
retirees pay the difference between the fixed amounts and the total premium
rates. The Divisions have not committed to make any future increases in the
fixed monthly dollar amounts. In 1993, the Divisions began advance funding for
postretirement medical and life benefits for employees retiring on or after
January 1, 1994. Benefits for employees who retired before January 1, 1994,
continue to be funded on a pay-as-you-go basis. Expense allocated to the
Divisions under these plans for the year ended December 31, 1994, was $51,448.
The Divisions also participate in a cash or deferred plan offered by an
affiliated entity. Employees over 21 years of age may participate in this
plan. Participants have the option to contribute up to 17% of their pretax
compensation subject to the excess contribution limitations imposed by the tax
law. The Divisions match a certain percentage of employee contributions.
Expense allocated to the Divisions under this plan was $296,753 for the year
ended December 31, 1994.
____
7
F-9
<PAGE> 14
NOTE 5: COMMITMENTS AND CONTINGENCIES
As of December 31, 1994, in the normal course of business, the Divisions have
outstanding commitments of approximately $8,523,000 for audience surveys, news
wire services, and personnel contracts.
Various parties have asserted claims against the Divisions which management
believes to be in the normal course of business. Based on the advice of legal
counsel, management believes that future settlement of all claims at December
31, 1994, will not have a significant adverse effect on the Divisions'
financial position, results of operations, or cash flows.
____
8
F-10
<PAGE> 15
ITEM 7 (b)
PRO FORMA FINANCIAL INFORMATION
<PAGE> 16
A. H. BELO CORPORATION
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED)
DECEMBER 31, 1994
(IN THOUSANDS)
<TABLE>
<CAPTION>
A. H. Belo Pro Forma
Corporation KIRO Adjustments Pro Forma
------------ --------- ----------- ------------
(Note 2)
<S> <C> <C> <C> <C>
Assets
Current assets
Cash and temporary cash investments $ 9,294 $ - $ - $ 9,294
Accounts receivable, net 99,825 9,663 (9,663) (a) 99,825
Other current assets 21,218 668 (668) (a) 21,218
----------- --------- ---------- ------------
Total current assets 130,337 10,331 (10,331) 130,337
Property, plant and equipment, at cost:
Land 19,803 1,603 3,136 (c) 24,542
Buildings 126,632 6,728 1,563 (c) 134,923
Newspaper publishing equipment 188,006 - 188,006
Broadcast equipment 118,816 28,778 (2,853) (c) 144,741
Other 40,369 - 4,126 (c) 44,495
Advance payments on plant and
equipment expenditures 28,352 - 28,352
----------- --------- ---------- ------------
Total property, plant and equipment 521,978 37,109 5,972 565,059
Less accumulated depreciation 209,824 24,611 (24,611) (c) 209,824
----------- --------- ---------- ------------
Property, plant and equipment, net 312,154 12,498 30,583 355,235
Investment in assets of KIRO 162,762 (b)
(162,762) (c)
Intangible assets, net 422,217 - 120,231 (c) 542,448
Other assets 49,083 275 (275) (a) 49,083
----------- --------- ---------- ------------
Total assets $ 913,791 $ 23,104 $ 140,208 $ 1,077,103
=========== ========= ========== ============
Liabilities
Current liabilities
Accounts payable and accrued expenses $ 62,590 $ 2,825 $ (2,275) (a) $ 63,140
Other accrued liabilities 21,147 89 ( 89) (a) 21,147
Due to parent company - 5,212 (5,212) (a) -
----------- --------- ---------- ------------
Total current liabilities 83,737 8,126 (7,576) 84,287
Long-term debt 330,400 - 162,762 (b) 493,162
Deferred income taxes 110,324 593 (593) (a) 110,324
Other liabilities 6,795 - 6,795
Shareholders' equity
Divisional equity - 14,385 (11,948) (c) -
(2,437) (a)
Common stock - Series A 23,779 - 23,779
Common stock - Series B 9,389 - 9,389
Other shareholders' equity 349,367 - 349,367
----------- --------- ---------- ------------
Total shareholders' equity 382,535 14,385 (14,385) 382,535
Total liabilities and shareholder's equity $ 913,791 $ 23,104 $ 140,208 $ 1,077,103
=========== ========= ========== ============
</TABLE>
See accompanying notes
P-1
<PAGE> 17
A. H. BELO CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
KIRO WWL-TV
A. H. Belo Pro Forma Pro Forma
Corporation KIRO Adjustments Adjustments Pro Forma
---------- ---------- ---------- ---------- ----------
(Note 3) (Note 4)
<S> <C> <C> <C> <C> <C>
Net operating revenues
Newspaper publishing $ 369,366 $ - $ $ $ 369,366
Broadcasting 258,759 46,462 1,155 (a) 13,282 319,658
---------- ---------- ---------- ---------- ----------
Total net operating revenues 628,125 46,462 1,155 13,282 689,024
Operating costs and expenses
Salaries, wages and employee benefits 178,264 18,027 (1,304) (b) 3,556 198,543
Newsprint, ink and other supplies 106,270 - 106,270
Other production, distribution and
operating costs 166,187 16,078 1,155 (a) 3,981 186,318
(1,083) (c)
Depreciation 32,854 2,596 2,380 (d) 2,251 (a) 40,081
Amortization 13,551 - 3,006 (e) 851 (b) 17,408
---------- ---------- ---------- ---------- ----------
Total operating costs and expenses 497,126 36,701 4,154 10,639 548,620
---------- ---------- ---------- ---------- ----------
Earnings from operations 130,999 9,761 (2,999) 2,643 140,404
Other income and expense
Interest expense (16,112) - (7,813) (f) (2,182)(c) (26,107)
Other, net (6,990) (30) 108 (6,912)
---------- ---------- ---------- ---------- ----------
Total other income and expense (23,102) (30) (7,813) (2,074) (33,019)
Earnings
Earnings before income taxes 107,897 9,731 (10,812) 569 107,385
Income taxes 39,030 3,399 (3,784) (g) 229 (d) 38,874
---------- ---------- ---------- ---------- ----------
Net earnings $ 68,867 $ 6,332 $ (7,028) $ 340 $ 68,511
========== ========== ========== ========== ==========
Weighted average shares
outstanding 20,223 20,223
Earnings per share $ 3.41 $ 3.39
========== ==========
</TABLE>
See accompanying notes.
P-2
<PAGE> 18
A. H. BELO CORPORATION
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1: GENERAL
On February 1, 1995, A. H. Belo Corporation (the "Company"), acquired Third
Avenue Television, Inc., holder of certain assets of KIRO Television,
Third Avenue Productions and KIRO Direct (collectively, "KIRO") from KIRO,
Inc. On the same date, the Company acquired the FCC license of television
station KIRO-TV and certain other related assets from Bonneville Holding
Company ("BHC"). The purchase price was $162,500,000 in cash, plus
transaction costs.
The acquisition was completed according to the terms of the Stock Sale
Agreement dated as of November 29, 1994 between the Company and KIRO, Inc.,
and the Asset Sale Agreement dated as of November 29, 1994 between the
Company and BHC (collectively, the "Purchase Agreements").
References herein to "KIRO" mean the combined operations of KIRO
Television, Third Avenue Productions and KIRO Direct.
The transaction was financed with funds from the Company's existing
revolving credit facility at variable rates. However, for purposes of the
pro forma financial results, the Company has assumed an interest rate
representing the average rate on the revolving credit facility for the year
ended December 31, 1994, which was 4.8 percent.
At the time of the purchase, KIRO-TV operated as the CBS network affiliate
in Seattle, Washington. Under the Company's ownership, however, KIRO-TV
will operate as a United Paramount Network affiliated television station.
The effect of this change, if any, is not determinable and is therefore not
reflected in the accompanying pro forma financial statements.
The pro forma financial statements present the historical consolidated
financial statements of the Company adjusted for the acquisition. The
accompanying pro forma consolidated condensed balance sheet assumes the
transaction was completed on December 31, 1994. The accompanying pro forma
consolidated statement of earnings assumes the transaction was completed on
January 1, 1994 and also includes the operations of WWL-TV for the five-
month period from January 1, 1994 through May 31, 1994. Television station
WWL-TV was previously purchased by the Company effective June 1, 1994 (see
Note 4).
These pro forma financial statements are not necessarily indicative of the
financial position that would have actually been attained had the
acquisitions occurred on December 31, 1994 or the results of operations
that would have actually been attained had the acquisitions occurred on
January 1, 1994. These pro forma financial statements should be read in
conjunction with the consolidated financial statements of the Company
included in the annual report filed on Form 10-K for the year ended
December 31, 1994 and the combined financial statements of the Divisions of
KIRO, Inc., included in Item 7(a) of this Form 8-K/A.
P-3
<PAGE> 19
NOTE 2: PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
The pro forma adjustments to the historical balance sheet are as follows:
(a) To eliminate assets and liabilities of KIRO not included in the
Purchase Agreements.
(b) To record the investment in the assets of KIRO and the related
borrowings to fund the acquisition.
(c) To allocate the purchase price to property, plant and equipment (at
estimated fair value) and excess cost over values assigned to tangible
assets of purchased subsidiaries and eliminate divisional equity.
NOTE 3: PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS FOR THE YEAR ENDED
DECEMBER 31, 1994 - KIRO
The pro forma adjustments to the historical statement of earnings for the
year ended December 31, 1994 are as follows:
(a) To reclassify certain commissions paid from a reduction of revenues to
other production, distribution and operating costs to conform to
presentation practices of the Company.
(b) To adjust salaries, wages and employee benefits for a decrease in the
number of employees after the acquisition as provided for in the Purchase
Agreements.
(c) To eliminate FCC license royalty fees charged to KIRO by BHC. The FCC
license was acquired by the Company.
(d) To adjust depreciation expense based on the estimated fair market
value of property, plant and equipment as of the acquisition date.
(e) To adjust amortization of excess cost over values assigned to tangible
assets of purchased subsidiaries of $120,231,000 over 40 years.
(f) To record interest expense at a rate of approximately 4.8 percent on
net borrowings of $162,762,000. The interest rate is the average revolving
debt rate for the year ended December 31, 1994. A change of 1/8 of one
percent in revolving debt rates would affect the pro forma results by
$132,000, after taxes.
(g) To reflect an adjustment to federal income taxes at a rate of 35
percent related to the net reduction in consolidated operating results
arising from KIRO's results of operations for the year ended December 31,
1994, adjusted for the pro forma items noted above.
P-4
<PAGE> 20
NOTE 4: PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS FOR THE YEAR ENDED
DECEMBER 31, 1994 - WWL-TV
On June 1, 1994, the Company, through its wholly-owned subsidiary, WWL-TV,
Inc., acquired the assets of television station WWL-TV, the CBS affiliate
in New Orleans, Louisiana, from Rampart Operating Partnership for
approximately $110,000,000 in cash. The transaction was financed with
funds from the Company's existing revolving credit facility. WWL-TV's
results of operations for the seven-month period from June 1, 1994 through
December 31, 1994 are included in A. H. Belo Corporation results of
operations.
Pro forma adjustments for WWL-TV reflect results of operations for the
five-month period from January 1, 1994 through May 31, 1994, adjusted for
the following:
(a) Depreciation expense for five months based on the estimated fair
market value of property, plant and equipment as of the acquisition date.
(b) Amortization expense for five months related to excess cost over
values assigned to tangible assets of purchased subsidiaries of $81,673,000
over 40 years.
(c) Interest expense for five months at an average rate of approximately
4.8 percent on borrowings of $110,000,000. A change of 1/8 of one percent
in revolving debt rates would affect the pro forma results by $34,000,
after taxes.
(d) Federal and State income tax expense at an effective rate of 40.2
percent on the net earnings of WWL-TV for the five months ended May 31,
1994, adjusted for the pro forma adjustments noted above.
P-5
<PAGE> 21
ITEM 7(c)
EXHIBITS
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQ.
NUMBER DESCRIPTION PAGE NO.
- ------ ----------- --------
<S> <C> <C>
2.1 Stock Sale Agreement dated as of November 29, 1994
between KIRO, Inc. and A. H. Belo Corporation N/A
2.2 Asset Sale Agreement dated as of November 29, 1994
between Bonneville Holding Company and A. H. Belo Corporation N/A
23.1 Consent of Deloitte & Touche LLP _____
99.1 Press Release of the Company dated January 31, 1995 N/A
</TABLE>
E-1
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in A. H. Belo Corporation's
Registration Statements (Form S-8 No. 33-30994 and Form S-8 No. 33-32526)
pertaining to its Employee Savings and Investment Plan and 1986 Long-Term
Incentive Plan of our report dated February 24, 1995 with respect to the
combined financial statements of KIRO Television, Third Avenue
Productions, and KIRO Direct for the year ended December 31, 1994 appearing
in A. H. Belo Corporation's Form 8-K/A dated April 10, 1995.
/S/Deloitte & Touche LLP
Seattle, Washington
April 7, 1995
E-2
