<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NO. 1-8598
A. H. BELO CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 75-0135890
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) 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
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 X NO
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
CLASS OUTSTANDING AT JULY 31, 1995
----- -----------------------------
<S> <C>
Common Stock, $1.67 par value 38,881,847*
</TABLE>
____________
* Consisting of 29,500,983 shares of Series A Common Stock and 9,380,864
shares of Series B Common Stock.
================================================================================
<PAGE> 2
A. H. BELO CORPORATION
FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations . . . . . . . . . . . . . 7
PART II OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . . . . . . 9
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . 9
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
i
<PAGE> 3
PART I.
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF EARNINGS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
Three months Six months
ended June 30, ended June 30,
--------------------------------------------------------------------------------------------------------------
In thousands, except per share amounts
(unaudited) 1995 1994 1995 1994
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
--NET OPERATING REVENUES
Newspaper publishing $ 101,166 $ 91,107 $ 194,466 $ 174,028
Broadcasting 88,603 63,830 158,342 112,956
--------------------------------------------------------------------------------------------------------------
Total net operating revenues 189,769 154,937 352,808 286,984
--------------------------------------------------------------------------------------------------------------
--OPERATING COSTS AND EXPENSES
Salaries, wages and employee benefits 52,238 43,099 102,468 84,348
Newsprint, ink and other supplies 33,067 25,077 62,305 50,254
Other production, distribution and operating costs 49,694 40,259 93,334 76,277
Depreciation 10,769 7,836 21,083 15,163
Amortization 4,357 3,262 8,463 6,354
--------------------------------------------------------------------------------------------------------------
Total operating costs and expenses 150,125 119,533 287,653 232,396
--------------------------------------------------------------------------------------------------------------
Earnings from operations 39,644 35,404 65,155 54,588
--------------------------------------------------------------------------------------------------------------
--OTHER INCOME AND EXPENSE
Interest expense (7,607) (3,483) (14,223) (6,303)
Other, net (Note 6) 3,033 509 3,323 985
--------------------------------------------------------------------------------------------------------------
Total other income and expense (4,574) (2,974) (10,900) (5,318)
--------------------------------------------------------------------------------------------------------------
--EARNINGS
Earnings before income taxes 35,070 32,430 54,255 49,270
Income taxes 13,872 12,919 21,614 19,721
--------------------------------------------------------------------------------------------------------------
Net earnings $ 21,198 $ 19,511 $ 32,641 $ 29,549
--------------------------------------------------------------------------------------------------------------
--EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE $ .53 $ .48 $ .81 $ .72
--------------------------------------------------------------------------------------------------------------
Average shares outstanding 40,044 40,486 40,148 40,768
--------------------------------------------------------------------------------------------------------------
Cash dividends declared per share $ .080 $ .075 $ .155 $ .150
--------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
1
<PAGE> 4
CONSOLIDATED CONDENSED BALANCE SHEETS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
In thousands JUNE 30, December 31,
(Current year unaudited) 1995 1994
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
--ASSETS
Current assets:
Cash and temporary cash investments $ 10,120 $ 9,294
Accounts receivable, net 110,129 99,825
Other current assets 23,858 21,218
---------------------------------------------------------------------------------------------------------
Total current assets 144,107 130,337
---------------------------------------------------------------------------------------------------------
Property, plant and equipment, at cost:
Land 24,542 19,803
Buildings 135,069 126,632
Newspaper publishing equipment 192,877 188,006
Broadcast equipment 151,018 118,816
Other 46,619 40,369
Advance payments on plant and equipment expenditures 32,509 28,352
---------------------------------------------------------------------------------------------------------
Total property, plant and equipment 582,634 521,978
Less accumulated depreciation (230,357) (209,824)
---------------------------------------------------------------------------------------------------------
Net property, plant and equipment 352,277 312,154
---------------------------------------------------------------------------------------------------------
Excess cost over values assigned to
tangible assets of purchased subsidiaries 516,084 403,268
Other intangibles, net 18,314 18,949
Other assets, at cost 47,103 49,083
---------------------------------------------------------------------------------------------------------
Total assets $ 1,077,885 $ 913,791
---------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 5
CONSOLIDATED CONDENSED BALANCE SHEETS (CONTINUED)
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
In thousands, except share data JUNE 30, December 31,
(Current year unaudited) 1995 1994
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
--LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 49,346 $ 62,590
Other current liabilities 19,149 21,147
---------------------------------------------------------------------------------------------------------
Total current liabilities 68,495 83,737
---------------------------------------------------------------------------------------------------------
Long-term debt 499,400 330,400
Deferred income taxes 113,666 110,324
Other liabilities 7,980 6,795
Shareholders' equity:
Preferred stock, $1.00 par value. Authorized
5,000,000 shares; none issued
Common stock, $1.67 par value. Authorized
150,000,000 shares:
Series A: Issued 29,654,417 shares at June 30, 1995
and 28,477,776 shares at December 31, 1994 49,523 23,779
Series B: Issued 9,417,560 shares at June 30, 1995
and 11,243,976 shares at December 31, 1994 15,727 9,389
Additional paid-in capital 95,542 124,431
Retained earnings 232,578 230,959
---------------------------------------------------------------------------------------------------------
Total 393,370 388,558
Deferred compensation - restricted shares (5,026) (6,023)
---------------------------------------------------------------------------------------------------------
Total shareholders' equity 388,344 382,535
---------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $1,077,885 $ 913,791
---------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
3
<PAGE> 6
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
Six months
ended June 30,
-----------------------------------------------------------------------------------------------------------
In thousands
(unaudited) 1995 1994
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
--OPERATIONS
Net earnings $ 32,641 $ 29,549
Adjustments to reconcile net earnings
to net cash provided by operations:
Depreciation and amortization 29,546 21,517
Deferred income taxes 3,942 3,976
Non-cash adjustments and allowances 876 65
Other, net 75 (279)
Net change in current assets and liabilities:
Accounts receivable (11,092) (8,661)
Other current assets (3,200) 3,162
Accounts payable and accrued expenses (13,794) (3,443)
Other current liabilities (192) 6,699
-----------------------------------------------------------------------------------------------------------
Net cash provided by operations 38,802 52,585
-----------------------------------------------------------------------------------------------------------
-- INVESTMENTS
Acquisitions (163,303) (110,038)
Capital expenditures (18,438) (15,235)
Other, net 4,640 711
-----------------------------------------------------------------------------------------------------------
Net cash used for investments (177,101) (124,562)
-----------------------------------------------------------------------------------------------------------
-- FINANCING
Borrowings for acquisitions 163,313 110,000
Net proceeds from (payments on) revolving debt 5,687 (6,000)
Payments to repurchase stock (28,795) (32,073)
Payments of dividends on stock (6,141) (6,061)
Net proceeds from exercise of stock options 5,061 4,260
-----------------------------------------------------------------------------------------------------------
Net cash provided by financing 139,125 70,126
-----------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and temporary cash investments 826 (1,851)
-----------------------------------------------------------------------------------------------------------
Cash and temporary cash investments at beginning of period 9,294 8,943
-----------------------------------------------------------------------------------------------------------
Cash and temporary cash investments at end of period $ 10,120 $ 7,092
-----------------------------------------------------------------------------------------------------------
--SUPPLEMENTAL DISCLOSURES
Interest paid, net of amounts capitalized $ 13,810 $ 6,351
Income taxes paid, net of refunds $ 18,298 $ 9,044
-----------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
4
<PAGE> 7
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
(1) The unaudited consolidated condensed financial statements as of
June 30, 1995 and for the three and six-month periods ended June 30,
1995 and 1994 and related notes should be read in conjunction with the
audited consolidated financial statements and related notes as of
December 31, 1994.
(2) In the opinion of A. H. Belo Corporation (the "Company" or "Belo")
management, the accompanying unaudited consolidated condensed
financial statements contain all adjustments necessary to present
fairly the Company's financial position as of June 30, 1995, and its
results of operations and cash flows for the indicated periods. All
such adjustments are of a normal recurring nature.
Certain amounts for the prior periods have been reclassified to
conform to the current year presentation.
(3) On June 1, 1994, Belo 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. On
February 1, 1995, Belo acquired Third Avenue Television, Inc., holder
of the assets of television station KIRO-TV in Seattle, Washington.
On the same date, Belo acquired the FCC license of television station
KIRO-TV and certain other related assets from Bonneville Holding
Company. The purchase price was approximately $162,500,000 in cash,
plus transaction costs.
The costs of the acquisitions have been allocated on the basis of the
estimated fair market values of the assets acquired. These
allocations resulted in excess cost over values assigned to tangible
assets of purchased subsidiaries for WWL-TV of $81,673,000 and for
KIRO-TV of $120,643,000. The KIRO-TV purchase price allocation is
still preliminary. These amounts are being amortized on a
straight-line basis over 40 years.
The pro forma financial results of operations below, which reflect
purchase price adjustments including average revolving debt rates in
effect for the periods presented, assume both the WWL-TV and KIRO-TV
transactions took place at the beginning of each of the periods
presented (in thousands):
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Six months ended June 30, 1995 1994
-------------------------------------------------------------------------------------
<S> <C> <C>
Net operating revenues $ 355,803 $ 323,120
Net earnings $ 31,800 $ 29,253
Net earnings per share $ .79 $ .72
-------------------------------------------------------------------------------------
</TABLE>
A change of 1/8 of one percent in revolving debt rates would affect
the pro forma results by $107,000 after taxes.
The pro forma financial information is provided for informational
purposes only and is not necessarily representative of the operating
results that would have occurred had the acquisitions been completed
as of the indicated dates, nor is it indicative of future operating
results.
(4) The Company amended their $600,000,000 variable rate revolving debt
agreement effective July 28, 1995, to increase available borrowings to
$800,000,000. The terms of the amended agreement are substantially
the same as those of the original agreement. The amended agreement
expires on July 28, 2000, with an extention to July 28, 2001 at the
request of the Company and consent of the participating banks.
5
<PAGE> 8
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
(5) On June 9, 1995, Belo completed a two-for-one stock split in the form
of a dividend whereby one additional share of Series A or Series B
Common Stock was issued for each corresponding share of Series A or
Series B Common Stock held on May 19, 1995. A total of 19,847,771
shares were issued. In connection with the stock split, common stock
was increased and additional paid in capital charged for the aggregate
par value of the shares that were issued. All share and per share
data have been restated to retroactively reflect the stock split.
(6) In June 1995, Belo sold its investment in 15,267 shares of Stauffer
Communications, Inc. stock for $4,327,000. The carrying value of the
stock was $1,921,000, resulting in a net gain of $1,564,000 (4 cents
per share). The Company had previously recorded a net charge of
$1,567,000 (4 cents per share) in September 1994, when 58,835 shares
of Stauffer Communications Inc. stock were donated to the Dallas
Morning News--WFAA Foundation.
(7) During 1995, Belo repurchased 960,060 shares of treasury stock for an
aggregate purchase price of $28,795,000. All of these shares have
been retired, resulting in a $28,795,000 reduction in total
shareholders' equity.
(8) Net operating revenues, earnings from operations, and depreciation and
amortization by industry segment are shown below (in thousands):
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
Three months ended Six months ended
June 30, June 30,
1995 1994 1995 1994
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET OPERATING REVENUES
Newspaper publishing $ 101,166 $ 91,107 $ 194,466 $ 174,028
Broadcasting 88,603 63,831 158,342 112,957
Intersegment revenues - (1) - (1)
---------------------------------------------------------------------------------------------------------------
$ 189,769 $ 154,937 $ 352,808 $ 286,984
---------------------------------------------------------------------------------------------------------------
EARNINGS FROM OPERATIONS
Newspaper publishing $ 17,919 $ 17,716 $ 33,387 $ 28,624
Broadcasting 25,604 21,049 39,744 32,547
Corporate expenses (3,879) (3,361) (7,976) (6,583)
---------------------------------------------------------------------------------------------------------------
$ 39,644 $ 35,404 $ 65,155 $ 54,588
---------------------------------------------------------------------------------------------------------------
DEPRECIATION AND AMORTIZATION
Newspaper publishing $ 5,327 $ 5,167 $ 10,712 $ 10,298
Broadcasting 9,623 5,781 18,487 10,919
Other 176 150 347 300
---------------------------------------------------------------------------------------------------------------
$ 15,126 $ 11,098 $ 29,546 $ 21,517
---------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company's primary source of liquidity is cash provided by
operations, which was $38,802,000 for the six months ended June 30, 1995. This
compares with $52,585,000 generated during the corresponding period in 1994.
The decrease in cash provided by operations is primarily the result of changes
in working capital, specifically, higher receivables, a reduction in payables
and accrued expenses due to timing of payments in 1995 and the timing of tax
payments in 1994. Cash from operations for the six months of 1995 was
sufficient to fund capital expenditures and dividends on common stock . Excess
cash from operations was also used to fund a portion of treasury stock
repurchases.
On February 1, 1995, Belo acquired KIRO-TV. The purchase price was
approximately $162,500,000 in cash, plus transaction costs. The acquisition
was completed using funds from Belo's existing revolving credit agreement. The
transaction was accounted for as a purchase. At the time of the acquisition,
KIRO-TV was a CBS television affiliate; however, under Belo's ownership, the
station is being operated as a United Paramount Network affiliate.
At June 30, 1995, Belo had access to a $600,000,000 variable rate
revolving credit agreement, on which borrowings at that time were $395,000,000.
The agreement was amended in July of 1995 to increase available borrowings to
$800,000,000. The amended agreement expires on July 28, 2000 with an extension
to July 28, 2001 at the request of the Company, and with consent of the
participating banks. The extra borrowing capacity will be used for general
corporate purposes including the purchase of additional treasury shares and
possible future acquisitions. From time to time, short-term unsecured notes
are also used as a source of financing. Based on the Company's intent and
ability to renew short-term notes through the revolving credit agreement,
short-term borrowings are classified as long-term. At June 30, 1995, Belo had
$98,000,000 in short-term notes outstanding. Total debt outstanding increased
by $169,000,000 from December 31, 1994 due primarily to the KIRO-TV acquisition
and the repurchase of stock.
Belo has in place a stock repurchase program authorizing the purchase
of up to $2,500,000 of Company stock annually. In addition, as of June 30,
1995, Belo had the authority to purchase approximately 658,000 shares of Series
A Common Stock remaining from a previous authorization by the Board of
Directors.
At June 30,1995, Belo's ratio of long-term debt to total
capitalization was 56.3 percent, compared to 46.3 percent at the end of 1994.
The change during the first half of 1995 was due to the KIRO-TV acquisition and
the repurchase of stock.
Capital expenditures year-to-date in 1995 were $18,438,000.
Significant capital projects for the period included additional publishing
equipment and major building renovations at The Dallas Morning News and the
continuation of a building and studio remodeling project at Belo's Houston
station. Belo expects to finance future capital expenditures using net cash
generated from operations and, when necessary, borrowings under the revolving
credit agreement.
Belo paid dividends of $6,141,000 or 15 1/2 cents per share on Series
A and Series B Common Stock outstanding during the first half of 1995 compared
to $6,061,000 (15 cents per share) during the same period in 1994. In
addition, during the second quarter of 1995, Belo completed a two-for-one stock
split in the form of a dividend. All record holders of Series A and Series B
stock as of May 19, 1995 received an equal number of Series A or Series B
shares on June 9, 1995. All information set forth in this report, including
earnings and dividends per share and average shares outstanding, has been
restated to retroactively reflect the stock split.
7
<PAGE> 10
RESULTS OF OPERATIONS
Belo's net earnings for the three and six-month periods ended June 30,
1995 were $21,198,000 (53 cents per share) and $32,641,000 (81 cents per
share), respectively. Earnings for the comparable periods in 1994 were
$19,511,000 (48 cents per share) and $29,549,000 (72 cents per share).
Earnings for the three and six months ended June 30, 1995 include a net gain of
$1,564,000 (4 cents per share) from the sale of Belo's investment in Stauffer
Communications, Inc. stock. Year-to-date earnings for 1994 include a credit
of $631,000 (1 cent per share) for the reversal of certain music license fees
accrued in previous periods. Excluding these one-time items, comparable
quarter and year-to-date earnings per share are 49 cents and 77 cents in 1995
versus 48 cents and 71 cents in 1994.
In addition to the one-time items noted above, comparisons between
1995 and 1994 are also affected by the composition of Belo's Broadcast
Division. Results for 1994 include one month of WWL-TV operations, which was
acquired on June 1, 1994. Results for 1995 include five months of operations
of KIRO-TV, which was purchased by Belo on February 1, 1995.
Revenues for the quarter and year-to-date 1995 of $189,769,000 and
$352,808,000 were 22.5 percent and 22.9 percent better than comparable 1994
revenues of $154,937,000 and $286,984,000. Publishing revenues for the quarter
were $101,166,000, an increase of 11 percent over 1994 second quarter revenues
of $91,107,000. Publishing revenues for the six-month period of $194,466,000
were up 11.7 percent over 1994 year-to-date revenues of $174,028,000.
Publishing revenue increases were the result of increased advertising rates .
Gains from the rate increases were partially offset, however, by volume
declines, primarily in the retail and general advertising categories. On a
year-to-date basis, classified advertising volumes have increased slightly,
due to strong first quarter employment advertising. For the second quarter,
however, classified lineage was down slightly from last year. Second quarter
and year-to-date circulation revenues were higher in 1995 due to price
increases implemented in 1994, and slightly increased circulation volume for
both daily and Sunday in the second quarter. Year-to-date Sunday average
circulation was still slightly below 1994 due to lower first quarter totals.
Broadcast revenues for the second quarter of 1995 were $88,603,000
versus $63,830,000 in 1994, while year-to-date broadcast revenues were
$158,342,000 in 1995 versus $112,956,000 in 1994. WWL-TV and KIRO-TV revenues
accounted for the majority of the increase. On a same-station basis, revenues
increased 9.9 percent for the quarter and 11.4 percent for the six-month
period. The most significant increases in broadcast revenues, on both a
quarter and year-to-date basis, were in national advertising and network
compensation. Excluding the new stations, national revenues were up 9.6
percent and 11.2 percent for the three and six-month periods, primarily due to
automotive advertising. Additional network compensation revenues contributed
more than 40 percent of the year-to-year same-station revenue improvement due
to renegotiated contracts. Local revenues were also up from last year's second
quarter and year-to-date totals due to strong performances in both the Dallas
and Hampton-Norfolk markets. These gains were offset somewhat, however, by
lower 1995 political advertising.
Operating expenses of $150,125,000 for the quarter and $287,653,000
for the year-to-date were also significantly higher than 1994 expenses of
$119,533,000 and $232,396,000. Excluding KIRO-TV and WWL-TV, expenses were up
11.4 percent for the quarter and 10.6 percent on a year-to-date basis. The most
significant increase in operating expense was newsprint, ink and other
supplies, which increased approximately 32 percent and 24 percent during the
three and six-month periods. Newsprint prices have increased by approximately
50 percent and 41 percent for the quarterly and year-to-date periods. The full
impact of the price increases has been slightly offset by the elimination of
the Sunday magazine supplement and by the Company's conservation efforts.
However, newsprint prices are expected to continue to rise. Compensation and
benefits increased on a same-station year-to-date basis by 8.4 percent, due to
more employees, merit increases and overtime pay associated with coverage of
the Oklahoma City bombing in April of 1995. All other expense categories, when
compared on a same-station basis, increased only modestly above 1994 levels.
8
<PAGE> 11
Interest expense in 1995 for both the three and six-month periods is
substantially higher than in 1994 due to increased borrowings for acquisitions.
Higher average revolving debt rates (6.4 percent year-to-date in 1995 versus
4.3 percent in 1994) also contributed to the increase in expense.
PART II.
ITEM 1. LEGAL PROCEEDINGS
There are a number of legal proceedings pending against the Company,
including several actions for alleged libel. In the opinion of management,
liabilities, if any, arising from these actions are either covered by insurance
or would not have a material adverse effect on the operations or financial
position of the Company.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 10.4(1) First Amendment to Credit Agreement dated as of
July 28, 1995
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
During the quarter covered by this report, there was a report on Form
8-K filed on May 3, 1995, containing information under Item 5 concerning the
Company's two-for-one stock split effective June 9, 1995, for shareholders of
record on May 19, 1995.
9
<PAGE> 12
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.
A. H. BELO CORPORATION
August 10, 1995 By: /S/Michael D. Perry
-------------------------------
Michael D. Perry
Senior Vice President and
Chief Financial Officer
10
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQ.
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------ ----------- ------
<S> <C> <C>
10.4 (1) First Amendment to Credit Agreement dated
as of July 28, 1995 ------
27 Financial Data Schedule ------
</TABLE>
11
<PAGE> 1
EXHIBIT 10.4(1)
================================================================================
FIRST AMENDMENT TO
CREDIT AGREEMENT
DATED AS OF JULY 28, 1995
AMONG
A. H. BELO CORPORATION,
AS BORROWER,
AND
CITICORP SECURITIES, INC.,
AS SYNDICATION AGENT,
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS ADMINISTRATIVE AGENT,
AND
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
AS DOCUMENTATION AGENT,
AND
THE BANKS LISTED HEREIN,
AS LENDERS
================================================================================
<PAGE> 2
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated as
of July 28, 1995, is among A. H. BELO CORPORATION, a Delaware corporation
("Borrower"), the financial institutions listed on the signature pages hereof
(collectively the "Lenders" and, individually a "Lender"), CITICORP
SECURITIES, INC., in its capacity as syndication agent for the Lenders (the
"Syndication Agent"), THE FIRST NATIONAL BANK OF CHICAGO, in its capacity as
administrative agent for the Lenders (the "Administrative Agent"), and TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, in its capacity as documentation agent for
the Lenders (the "Documentation Agent") (the Syndication Agent, the
Administrative Agent and the Documentation Agent are collectively referred to
herein as the "Managing Agents" and, individually as a "Managing Agent").
WHEREAS, Borrower, the Managing Agents and certain of the Lenders
entered into that certain Credit Agreement dated as of August 5, 1994 (as
amended, modified, supplemented, renewed or restated from time to time, the
"Agreement");
WHEREAS, Borrower has requested the Lenders and the Managing Agents to
increase the Commitments by $200,000,000 to $800,000,000;
WHEREAS, Borrower has requested the Lenders and the Managing Agents to
extend the Facility Termination Date by approximately one (1) year to July 28,
2000; and
WHEREAS, in order to accommodate the requests of Borrower, the
Lenders, the Managing Agents and Borrower have agreed to the terms of this
Amendment;
NOW, THEREFORE, for and in consideration of the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. Capitalized terms used in this
Amendment, to the extent not otherwise defined herein, shall have the same
meanings as in the Agreement, as amended hereby.
<PAGE> 3
ARTICLE 2
Amendments
Section 2.1 Addition of Definitions to Section 1.1 of the
Agreement. Effective as of the date hereof, Section 1.1 of the Agreement is
hereby amended by adding thereto in alphabetical order under Section 1.1 the
following new definitions to read in their entirety as follows:
"MaXaM" shall mean MaXaM Entertainment, a Texas limited
partnership entitled BLC World Television, Ltd., d/b/a MaXaM
Entertainment, whose partners include Belo Investment Corporation and
Belo Ventures, Inc., both of such partners being wholly-owned
subsidiaries of Borrower, such partnership having been formed in 1994
for the purpose of distributing television programs to the domestic
television, cable and international market places.
"Managing Agents" shall mean collectively the Syndication
Agent, the Administrative Agent and the Documentation Agent
andManaging Agent shall mean any one of them as defined in the
preamble hereto, and any and all references in the Agreement and the
Loan Documents to "Co-Agent" or "Co-Agents" shall be deleted in their
entireties and in place thereof the terms "Managing Agent" and
"Managing Agents," respectively, shall be substituted therefor.
Section 2.2 Amendments to Definitions Contained In Section 1.1 of
the Agreement. Effective as of the date hereof, the following definitions set
forth in Section 1.1 of the Agreement are hereby amended by deleting the
existing definitions for such terms in their respective entireties and
substituting the following definitions in place thereof:
"Commitment" shall mean, as to any Lender, such Lender's Pro
Rata Percentage of $800,000,000 as set forth opposite such Lender's
name under the heading "Commitment" on Schedule 1 hereto, or in the
Assignment and Acceptance executed by a Lender and an Eligible
Assignee pursuant to Section 9.13, as such amount may be reduced or
terminated from time to time pursuant to Sections 2.4 or 2.6 or
Article 8 hereof, and Commitments" shall mean, collectively, the
Commitments for all of the Lenders.
"Facility Termination Date" shall mean July 28, 2000, or such
later date as this Agreement may be extended to pursuant to the terms
of Section 2.20 hereof, or the earlier date on which the Commitments
are canceled by Borrower or otherwise terminated pursuant to this
Agreement.
"Indebtedness" shall mean, without duplication, Borrower's and
each Subsidiary's (i) obligations for borrowed money, (ii) obligations
representing the deferred purchase price of property (including,
without limitation, under Film Contracts) other than accounts payable
arising in connection with the purchase of inventory in the ordinary
course of business and in accordance with past practice, (iii)
obligations secured by any Lien upon Property, (iv) obligations
created under any
2
<PAGE> 4
conditional purchase or other title retention agreements, (v)
Capitalized Lease Obligations, (vi) Letters of Credit, bonds or
similar instruments, and (vii) obligations under Guaranties; provided,
however, that Indebtedness shall not include (a) obligations of
Borrower or any Subsidiary, not exceeding $8,000,000 in the aggregate,
incurred in connection with the self-insurance program or employee
benefit plans and programs of Borrower or its Subsidiaries, and (b)
Guaranties of Borrower or any Subsidiary given with respect to the
obligations of MaXaM in the ordinary course of MaXaM's business, such
Guaranties not to exceed $25,000,000 in the aggregate at any one time
outstanding.
Section 2.3 Amendment to Section 2.20 of the Agreement.
Effective as of the date hereof, Section 2.20 of the Agreement is hereby
amended and restated in its entirety to read as follows:
2.20 Extension of Facility Termination Date. Provided an
Unmatured Default or Default has not occurred and is continuing
hereunder or under any other Loan Document, Borrower may at any time
during the period from one (1) year after the Closing Date to one (1)
year before the Facility Termination Date, request the Managing Agents
and the Lenders in writing to extend the Facility Termination Date by
one (1) year to July 28, 2001. Upon the timely receipt of such
written request for a one (1) year extension of the Facility
Termination Date from Borrower, the Managing Agents and the Lenders
shall in their sole discretion determine (which determination must be
unanimous) whether the Facility Termination Date shall be extended by
an additional one (1) year period and the Administrative Agent, on
behalf of itself, the other Managing Agents and the Lenders, shall
advise Borrower in writing of their determination no later than thirty
(30) days after receipt of such written request for the extension from
Borrower.
Section 2.4 Amendment to Section 6.11 of the Agreement.
Effective as of the date hereof, Section 6.11 of the Agreement is hereby
amended and restated in its entirety to read as follows:
6.11 Stock Redemptions. Borrower will not, nor will it
permit any Subsidiary to, redeem, repurchase or otherwise acquire or
retire any of Borrower's common stock at any time outstanding, in an
aggregate cumulative amount exceeding $100,000,000 for the period from
July 28, 1995 to the Facility Termination Date.
Section 2.5 Amendment to Section 7.9 of the Agreement. Effective
as of the date hereof, Section 7.9 of the Agreement is hereby amended and
restated in its entirety to read as follows:
7.9 Borrower or any Subsidiary shall fail within ninety
(90) days to pay, bond or otherwise discharge any judgment or order
for the payment of money in excess of $5,000,000, exclusive of amounts
covered by insurance, which is not stayed on appeal or otherwise being
appropriately contested in good faith.
Section 2.6 Amendment to Schedule 1 of the Agreement. Effective
as of the date hereof, Schedule 1 of the Agreement is hereby amended and
restated in its entirety to read as set forth in Schedule 1 hereto.
3
<PAGE> 5
Section 2.7 Amendment to Schedule 2 of the Agreement. Effective
as of the date hereof, Schedule 2 of the Agreement is hereby amended and
restated in its entirety to read as set forth in Schedule 2 hereto.
Section 2.8 Amendment to Form of Note (Ratable Loans). Effective
as of the date hereof, the form of Note (Ratable Loans) as set forth in Exhibit
"A" to the Agreement is hereby amended and restated in its entirety to be
substantially in the form of "Exhibit A" hereto.
Section 2.9 Amendment to Form of Note (Competitive Bid Loans).
Effective as of the date hereof, the form of Note (Competitive Bid Loans) as
set forth in Exhibit "B" to the Agreement is hereby amended and restated in its
entirety to be substantially in the form of Exhibit "B" hereto.
Section 2.10 Addition of New Lenders. Effective as of the date
hereof, each Lender a signatory hereto shall upon execution and delivery of
this Amendment become a Lender under the Agreement, as amended, with the amount
of its respective Commitment set forth on Schedule 1 hereto. Each new Lender a
party to this Amendment acknowledges having received a copy of the Agreement
and the various closing documents related thereto as part of its due diligence
in becoming a Lender under the Agreement by virtue of this Amendment.
ARTICLE 3
Ratifications, Representations and Warranties
Section 3.1 Ratifications. The terms and provisions set forth
in this Amendment shall modify and supersede all inconsistent terms and
provisions set forth in the Agreement, and except as expressly modified and
superseded by this Amendment, the terms and provisions of the Agreement are
ratified and confirmed in all respects and shall continue in full force and
effect. Borrower, the Lenders and the Managing Agents agree that the Agreement
as amended hereby shall continue to be legal, valid, binding and enforceable in
accordance with its terms.
Section 3.2 Representation and Warranties. Borrower hereby
represents and warrants to the Lenders and the Managing Agents that (i) the
execution, delivery and performance of this Amendment and any and all other
Loan Documents executed and/or delivered in connection herewith have been
authorized by all requisite action on the part of Borrower and will not violate
the Certificate of Incorporation or Bylaws of Borrower, (ii) the
representations and warranties contained in the Agreement, as amended hereby,
or any other Loan Document are true and correct on and as of the date hereof as
though made on and as of the date hereof, provided, however, that
representations and warranties with respect to MaXaM as a Subsidiary shall
refer to a Texas limited partnership and any and all references to corporate
charter documents and corporate formalities shall mean and include, without
limitation, the limited partnership agreement of MaXaM and its formation under
Texas law, (iii) no Event of Default has occurred and is continuing and no
event or condition has occurred that with the giving of notice or lapse of time
or both would be an Event of Default and (iv) Borrower is in full compliance
with all covenants and agreements contained in the Agreement, as amended
hereby.
4
<PAGE> 6
ARTICLE 4
Conditions Precedent
Section 4.1 Conditions. This amendment shall not be effective
unless and until Borrower has furnished to the Documentation Agent in form and
substance satisfactory to the Lenders (or otherwise has satisfied the Lenders
in the case of subclause (k) of this Section 4.1):
(a) This Amendment shall have been duly executed and
delivered by the parties hereto;
(b) Either (i) a copy of the Certificate of Incorporation
of Borrower, together with all amendments, certified by the Secretary
of State of Delaware or (ii) a certificate signed by the Secretary or
Assistant Secretary of Borrower to the effect that the Certificate of
Incorporation of Borrower has not been amended, modified or altered
since August 5, 1994 and is in full force and effect as of the date
hereof;
(c) A certificate of good standing of Borrower from the
Secretary of State of Delaware;
(d) A certificate of good standing of Borrower, from the
Comptroller of Public Accounts of the State of Texas;
(e) Either (i) a copy of the Bylaws of Borrower certified
by the Secretary or Assistant Secretary of Borrower as being a true
and correct copy of its Bylaws, or (ii) a certificate signed by the
Secretary or Assistant Secretary of Borrower to the effect that the
Bylaws have not been amended, modified or altered since August 5, 1994
and such Bylaws remain in full force and effect;
(f) A certificate signed by the Secretary or Assistant
Secretary of Borrower certifying as to a true and correct copy of the
Board of Directors' resolutions authorizing the execution, delivery
and performance of the Amendment and the Loan Documents related
thereto and borrowing under the Agreement as so amended;
(g) An incumbency certificate, executed by the Secretary
or Assistant Secretary of Borrower, which shall identify by name and
title and bear the signature of the officers of Borrower authorized to
sign the Amendment and the Loan Documents related thereto and to make
borrowings under the Agreement, upon which certificate the Lenders
shall be entitled to rely until informed of any change in writing by
Borrower;
(h) A written opinion of Borrower's General Counsel,
addressed to the Managing Agents and the Lenders in substantially the
form of Exhibit "C" hereto, and a written opinion of Locke Purnell
Rain Harrell, addressed to the Managing Agents and the Lenders,
opining on the enforceability of this Amendment and the Notes under
Texas law;
5
<PAGE> 7
(i) A certificate, signed by the Vice President and
Treasurer of Borrower or the Senior Vice President and Chief Financial
Officer of Borrower, stating that on the date hereof no Default or
Unmatured Default has occurred and is continuing under the Agreement
and the representations and warranties contained in Article 3 hereof,
the Agreement and all other Loan Documents are true and correct;
(j) A new Note (Ratable Loans) executed and delivered by
Borrower payable to the order of each Lender in the amount of its
Commitment and a new Note (Competitive Bid Loans) executed and
delivered by Borrower payable to the order of each Lender up to the
maximum amount of the Commitments for all Lenders;
(k) Such other documents as any Lender or its counsel may
have reasonably requested; and
(l) All corporate proceedings taken in connection with
the transactions contemplated by this Amendment and all documents,
instruments and other legal matters incident thereto shall be
satisfactory to the Documentation Agent and its legal counsel, Jenkens
& Gilchrist, a Professional Corporation.
Section 4.2 Treatment of Outstanding Loans. On the date the
conditions precedent set forth in Section 4.1 of this Amendment have been
satisfied, all outstanding Eurodollar Loans made under the Agreement prior to
the effectiveness to this Amendment shall be deemed to be Eurodollar Bid Rate
Loans under the Agreement by each of the Lenders a party to this Amendment, and
the existing Lenders holding such Eurodollar Loans shall continue to hold their
respective portions thereof until the expiration of the applicable Eurodollar
Interest Period. Such deemed Eurodollar Bid Rate Loans shall continue to
accrue interest at their respective interest rates in effect and applicable
thereto, and in each case shall mature on the last day of the applicable
Eurodollar Interest Period.
ARTICLE 5
Miscellaneous
Section 5.1 Survival of Representations and Warranties. All
representations and warranties made in this Amendment or any other Loan
Document, including any Loan Document furnished in connection with this
Amendment, shall survive the execution and delivery of this Amendment and the
other Loan Documents, and no investigation by the Lenders or the Managing
Agents, or any closing, shall affect the representations and warranties or the
right of the Lenders or the Managing Agents to rely upon them.
Section 5.2 Expenses. As provided in the Agreement, Borrower
shall reimburse the Managing Agents for any and all costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' fees and expenses for
the Managing Agents), paid or incurred by the Managing Agents in connection
with the preparation, review, execution and delivery of this Amendment and the
other Loan Documents related thereto. Borrower shall reimburse the Managing
Agents and the Lenders for any and all costs, internal charges and
out-of-pocket expenses (including reasonable
6
<PAGE> 8
attorneys' fees and expenses) paid or incurred by the Lenders in connection
with collection and enforcement of the Loan Documents. The obligations of
Borrower under this Section 5.2 shall survive termination of the Agreement.
Section 5.3 Reference to Agreement. Each of the Loan Documents,
including the Agreement and any and all other agreements, documents or
instruments now or hereafter executed and delivered pursuant to the terms
hereof or pursuant to the terms of the Agreement as amended hereby, are hereby
amended so that any reference in such Loan Documents to the Agreement shall
mean a reference to the Agreement as amended hereby.
Section 5.4 No Waiver. No failure on the part of the Lenders or
the Managing Agents to exercise any right, power or privilege under the
Agreement, no delay in exercising any such right, power or privilege, and no
course of dealing with respect to any right, power or privilege under the
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under the Agreement preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. No consent or waiver, express or implied, by the Lenders or the
Managing Agents to or for the breach of or deviation from any covenant,
condition or duty by Borrower shall be deemed a consent or waiver to or of any
other breach of the same or any other covenant, condition or duty.
Section 5.5 Severability. Any provision of this Amendment held
by a court of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of this Amendment and the effect thereof
shall be confined to the provision so held to be invalid or unenforceable.
Section 5.6 Applicable Law. THIS AMENDMENT AND ALL OTHER
TRANSACTION DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN
MADE AND TO BE PERFORMABLE IN DALLAS, DALLAS COUNTY, TEXAS AND SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
Section 5.7 Successors and Assigns. This Amendment is binding
upon and shall inure to the benefit of the Lenders, the Managing Agents and
Borrower and their respective successors and assigns, except that Borrower may
not assign or transfer any of its rights or obligations hereunder without the
prior written consent of the Lenders and the Managing Agents.
Section 5.8 Counterparts. This Amendment may be executed in
one or more counterparts, each of which when so executed shall be deemed to be
an original, but all of which when taken together shall constitute one and the
same instrument.
Section 5.9 Headings. The headings, captions and arrangements
used in this Amendment are for reference and convenience only, and shall not
affect the interpretation or meaning of any provision of this Amendment.
7
<PAGE> 9
Section 5.10 Non-Application of Chapter 15 of the Texas Credit
Code. The provisions of Chapter 15 of the Texas Credit Code (Vernon's
Annotated Texas Statutes, Article 5069-15) are specifically declared by the
parties not to be applicable to this Amendment or any of the Loan Documents or
the transactions contemplated hereby.
Section 5.11 Effect of this Amendment. The Agreement, as amended
by this Amendment, shall remain in full force and effect except that any
reference therein, or in any other of the Loan Documents referring to the
Agreement, shall be deemed to refer to the Agreement as amended by this
Amendment.
Section 5.12 Oral Agreements. THE AGREEMENT, AS AMENDED BY THIS
AMENDMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS THE ENTIRE
AGREEMENT BETWEEN THE PARTIES, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective duly authorized officers as of the date first
above written.
BORROWER:
--------
A. H. BELO CORPORATION
By: /s/ VICKY C. TEHERANI
Name: Vicky C. Teherani
Title: Vice President and Treasurer
Address:
Communications Center
400 South Record Street
Dallas, Texas 75202
Telecopy: (214) 977-6603
Attention: Ms. Vicky C. Teherani
Vice President and Treasurer
8
<PAGE> 10
MANAGING AGENTS AND LENDERS:
---------------------------
CITICORP SECURITIES, INC.,
as Syndication Agent
By: /s/ ROBERT A. KELLER
Name: Robert A. Keller
Title: Vice President
Address:
399 Park Avenue, 9th Floor
New York, New York 10043
Telecopy: 212-832-9137
Attention: Carolyn Kee
9
<PAGE> 11
Commitment: THE FIRST NATIONAL BANK OF CHICAGO,
---------- Individually and as Administrative Agent
$75,000,000.00
By: /s/ JOHN M. SPEER
Name: John M. Speer
Title: Vice President
Address:
Mail Suite 0629; 1FNP-14
One First National Plaza
Chicago, Illinois 60670
Telecopy: 213-732-8587
Attention: John M. Speer
Communications Division
10
<PAGE> 12
Commitment: TEXAS COMMERCE BANK NATIONAL
----------
$75,000,000.00 ASSOCIATION
Individually and as Documentation Agent
By: /s/ KEVIN KELTY
Name: Kevin Kelty
Title: Senior Vice President
Address:
P. O. Box 660197
Dallas, Texas 75266-0197
Telecopy: 214-922-2990
Attention: Kevin Kelty
11
<PAGE> 13
Commitment: CITICORP U.S.A., INC.,
---------- Individually
$75,000,000.00
By: /s/ ROBERT KELLER
Name: Robert Keller
Title: Vice President
AS-ATTORNEY-IN-FACT
Address:
399 Park Avenue, 4th Floor
New York, New York 10043
Telecopy: 212-793-6873
Attention: Robert Keller
Media Group
12
<PAGE> 14
Commitment: FIRST INTERSTATE BANK OF TEXAS, N.A.
----------
$55,000,000.00
By: /s/ CONNER J. DUFFY
Name: Conner J. Duffy
Title: Vice President
Address:
1445 Ross Avenue, 3rd Floor
Dallas, Texas 75202
Telecopy: 214-740-1543
Attention: Connor J. Duffey
13
<PAGE> 15
Commitment: NATIONSBANK OF TEXAS, N.A.
----------
$65,000,000.00
By: /s/ TODD SHIPLEY
Name: Todd Shipley
Title: Senior Vice President
Address:
901 Main Street, 67th Floor
Dallas, Texas 75202
Telecopy: 214-508-0980
Attention: Todd Shipley
14
<PAGE> 16
Commitment: SOCIETE GENERALE, SOUTHWEST AGENCY
----------
$75,000,000.00
By: /s/ CHRISTOPHER J. SPELTZ
Name: Christopher J. Speltz
Title: Vice President
Address:
2001 Ross Avenue, #4800
Dallas, Texas 75201
Telecopy: 214-979-1104
Attention: Chris Speltz
15
<PAGE> 17
Commitment: BANK OF AMERICA NT & SA
----------
$65,000,000.00
By: /s/ JON M. VARNELL
Name: Jon M. Varnell
Title: Managing Director
Address:
555 South Flower Street
Los Angeles, California 90071
Telecopy: 213-228-3145
Attention: Robert Lagace
16
<PAGE> 18
Commitment: THE BANK OF CALIFORNIA, N.A.
----------
$40,000,000.00
By: /s/ JOHN C. LEE
Name: John C. Lee
Title: Banking Officer
Address:
400 California Street, 14th Floor
San Francisco, California 94104
Telecopy: 415-765-3146
Attention: Paul Gaenger
17
<PAGE> 19
Commitment: THE BANK OF TOKYO, LTD.
----------
$65,000,000.00
By: /s/ JOHN E. BECKWITH
Name: John E. Beckwith
Title: Vice President
Address:
2001 Ross Avenue, Suite 3150
Dallas, Texas 75201
Telecopy: 214-954-1007
Attention: John E. Beckwith
18
<PAGE> 20
Commitment: CREDIT LYONNAIS CAYMAN ISLAND
---------- BRANCH
$65,000,000.00
By: /s/ ROBERT IVOSEVICH
Name: Robert Ivosevich
Title: Authorized Signature
Address:
c/o Credit Lyonnais Dallas Representative Office
3210 Lincoln Plaza
500 N. Akard
Dallas, Texas 75201
Telecopy No.: (214) 954-3312
19
<PAGE> 21
Commitment: THE FUJI BANK, LIMITED
----------
$40,000,000.00
By: /s/ PHILIP C. LAUINGER, III
Name: Philip C. Lauinger, III
Title: Vice President and Joint Manager
Address:
Two Houston Center, Suite 4100
1221 McKinney Street
Houston, Texas 77010
Telecopy: 713-759-0048
Attention: Philip C. Lauinger, III
20
<PAGE> 22
Commitment: THE TOYO TRUST AND BANKING COMPANY,
---------- LTD.
$35,000,000.00
By: /s/ KAZUHIKO YAMAUCHI
Name: Kazuhiko Yamauchi
Title: Vice President
Address:
437 Madison Avenue, 37th Floor
New York, New York 10022
Telecopy: 212-371-4963
Attention: Sharon Bonelli
21
<PAGE> 23
Commitment: ABN AMRO BANK N.V.
----------
$35,000,000.00
By: /s/ LILA JORDAN
Name: Lila Jordan
Title: Vice President
By: /s/ WILLIAM H. WELCH
Name: William H. Welch
Title: Group Vice President
Address:
3 Riverway, Suite 1700
Houston, Texas 77506
Telecopy: 713-629-7533
Attention: Lila Jordan
22
<PAGE> 24
Commitment: PNC BANK, NATIONAL ASSOCIATION
----------
$35,000,000.00
By: /s/ MARLENE DOONER
Name: Marlene Dooner
Title: Vice President
Address:
100 South Broad Street, 9th Floor
Philadelphia, Pennsylvania 19110
Telecopy: 215-585-6680
Attention: Marlene Dooner
23
<PAGE> 25
SCHEDULE 1
List of Lenders and Commitments
<TABLE>
<CAPTION>
Lenders Commitment (Ratable Loans)
------- --------------------------
<S> <C>
THE FIRST NATIONAL BANK OF CHICAGO $75,000,000.00
TEXAS COMMERCE BANK NATIONAL ASSOCIATION $75,000,000.00
CITICORP U.S.A., INC. $75,000,000.00
FIRST INTERSTATE BANK OF TEXAS, N.A. $55,000,000.00
NATIONSBANK OF TEXAS, N.A. $65,000,000.00
SOCIETE GENERALE, SOUTHWEST AGENCY $75,000,000.00
BANK OF AMERICA NT & SA $65,000,000.00
THE BANK OF CALIFORNIA, N.A. $40,000,000.00
THE BANK OF TOKYO, LTD. $65,000,000.00
CREDIT LYONNAIS CAYMAN ISLAND BRANCH $65,000,000.00
THE FUJI BANK, LIMITED $40,000,000.00
THE TOYO TRUST AND BANKING COMPANY, LTD. $35,000,000.00
ABN AMRO BANK N.V. $35,000,000.00
PNC BANK, NATIONAL ASSOCIATION $35,000,000.00
---------------
TOTAL $800,000,000.00
===============
</TABLE>
<PAGE> 26
SCHEDULE 2
List of Subsidiaries
A. H. Belo Corporation & Subsidiaries
As of July 28, 1995
<TABLE>
<CAPTION>
NAME STATE OF FORMATION DATE OF INCORPORATION OWNERSHIP
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------
A. H. Belo Corporation Delaware March 2, 1987 Holding Company
-----------------------------------------------------------------------------------------------------------------
Belo Productions, Inc. Delaware July 10, 1986 100%*
-----------------------------------------------------------------------------------------------------------------
Belo Investment Corporation Delaware July 1, 1986 100%*
-----------------------------------------------------------------------------------------------------------------
Belo, Inc. Delaware December 21, 1992 100%*
-----------------------------------------------------------------------------------------------------------------
The Belo Company Delaware December 28, 1993 100%*
-----------------------------------------------------------------------------------------------------------------
Belo Ventures, Inc. Delaware December 28, 1992 100%*
-----------------------------------------------------------------------------------------------------------------
NTV, Inc. Delaware September 11, 1989 100%*
-----------------------------------------------------------------------------------------------------------------
The Dallas Morning News, Inc. Delaware November 22, 1991 100%*
-----------------------------------------------------------------------------------------------------------------
New Path Media, Inc. Delaware July 20, 1994 100% owned by The
Dallas Morning
News, Inc.
-----------------------------------------------------------------------------------------------------------------
DFW Printing Company, Inc. Delaware November 4, 1991 100%*
-----------------------------------------------------------------------------------------------------------------
DFW Suburban Newspapers, Inc. Delaware November 13, 1990 100%*
-----------------------------------------------------------------------------------------------------------------
News-Texan, Inc. Texas August 29, 1963 100%*
-----------------------------------------------------------------------------------------------------------------
WFAA-TV, Inc. Delaware November 22, 1991 100%*
-----------------------------------------------------------------------------------------------------------------
Great Western Broadcasting Corp. Delaware November 12, 1958 100%*
-----------------------------------------------------------------------------------------------------------------
KOTV, Inc. Delaware March 25, 1954 100%*
-----------------------------------------------------------------------------------------------------------------
WVEC Television, Inc. Delaware July 1, 1986 100%*
-----------------------------------------------------------------------------------------------------------------
KHOU-TV, Inc. Delaware November 22, 1991 100%*
-----------------------------------------------------------------------------------------------------------------
WWL-TV, Inc. Delaware March 9, 1994 100%*
-----------------------------------------------------------------------------------------------------------------
Third Avenue Television, Inc. Delaware December 31, 1994 100%*
-----------------------------------------------------------------------------------------------------------------
BLC World Television, Ltd., d/b/a Texas October 1, 1994 51%**
MaXaM Entertainment
-----------------------------------------------------------------------------------------------------------------
</TABLE>
* By A. H. Belo Corporation
** By Belo Investment Corporation and Belo Ventures, Inc.
<PAGE> 27
EXHIBIT "A"
NOTE
(Ratable Loans)
$__________________________ _______________________, 19_____
A. H. BELO CORPORATION, a Delaware corporation ("Borrower"), promises
to pay, on or before the Facility Termination Date (as defined in the Agreement
referred to below), to the order of _______________________________________
(the "Lender") the lesser of the principal sum of
$___________________________________________ and No/100 Dollars
($________________________) or the aggregate unpaid principal amount of all
Loans made by the Lender to Borrower pursuant to Sections 2.1 and 2.2 of the
Credit Agreement (as the same may be amended or modified, the "Agreement")
hereinafter referred to, in lawful money of the United States in immediately
available funds at the main office of The First National Bank of Chicago in
Chicago, Illinois, as Administrative Agent, together with interest on the
unpaid principal amount hereof at the rates and on the dates determined in
accordance with the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Ratable Loan and the date and amount of each
principal payment hereunder.
This Note (Ratable Loans) is one of the Notes issued pursuant to, and
is entitled to the benefits of, the Credit Agreement dated as of August 5,
1994, as amended by that certain First Amendment to Credit Agreement dated as
of July 28, 1995, among Borrower, Citicorp Securities, Inc., as Syndication
Agent, The First National Bank of Chicago, individually and as Administrative
Agent, Texas Commerce Bank National Association, individually and as
Documentation Agent, and the banks named therein, including the Lender, to
which Agreement, as it may be further amended from time to time, reference is
hereby made for a statement of the terms and conditions under which this Note
may be prepaid or its maturity date accelerated. Capitalized terms used herein
and not otherwise defined herein are used with the meanings attributed to them
in the Agreement.
Notwithstanding anything to the contrary contained herein, no
provision of this Note shall require the payment or permit the collection of
interest in excess of the Maximum Rate. If any excess of interest in such
respect is herein provided for, or shall be adjudicated to be so provided, in
this Note or otherwise in connection with this loan transaction, the provisions
of this paragraph shall govern and prevail, and neither Borrower nor the
successors or assigns of Borrower shall be obligated to pay the excess amount
of such interest, or any other excess sum paid for the use, forbearance or
detention of sums loaned pursuant hereto. If for any reason interest in excess
of the Maximum Rate shall be deemed charged, required or permitted by any court
of competent jurisdiction, any such excess shall be applied as a payment and
reduction of the principal of indebtedness evidenced by this Note, and, if the
principal amount hereof has been paid in full, any remaining excess shall
forthwith be paid to Borrower. In determining whether or not the interest paid
or payable exceeds the Maximum Rate, Borrower and the Lenders shall, to the
extent
<PAGE> 28
permitted by applicable law, (a) characterize any non-principal payment as an
expense, fee, or premium rather than as interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate and
spread in equal or unequal parts the total amount of interest throughout the
entire contemplated term of the indebtedness evidenced by this Note so that the
interest for the entire term does not exceed the Maximum Rate.
Borrower and each endorser and other party ever liable for payment of
any sums of money payable on this Note jointly and severally waive notice
(except for notice specifically required by the terms of the Credit Agreement),
presentment, demand for payment, protest, notice of protest and non-payment or
dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, diligence in collecting, grace and all other formalities of
any kind, and consent to all extensions without notice for any period or
periods of time and partial payments, before or after maturity, and any
impairment of any collateral securing this Note, all without prejudice to the
holder. The holder shall similarly have the right to deal in any way, at any
time, with one or more of the foregoing parties without notice to any other
party, and to grant any such party any extensions of time for payment of any of
said indebtedness, or to release or substitute any such party, or to grant any
other indulgences or forbearances whatsoever, without notice to any other party
and without in any way affecting the personal liability of any party hereunder.
THIS NOTE AND THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
A. H. BELO CORPORATION
By:_______________________
Name:_____________________
Title:____________________
<PAGE> 29
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE (RATABLE LOANS) OF ___________________________________
<TABLE>
<CAPTION>
Principal Maturity of Principal Amount
Date Amount of Loan Interest Period Paid Unpaid Balance
---- -------------- --------------- ---- --------------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 30
EXHIBIT "B"
NOTE
(Competitive Bid Loans)
$800,000,000.00 __________ __, 1995
A. H. BELO CORPORATION, a Delaware corporation ("Borrower"), promises
to pay, on or before the Facility Termination Date (as defined in the Agreement
referred to below), to the order of _________________________________ (the
"Lender") the aggregate unpaid principal amount of all Competitive Bid Loans
made by the Lender to Borrower pursuant to Sections 2.1 and 2.3 of the Credit
Agreement (as the same may be amended or modified, the "Agreement") hereinafter
referred to, in lawful money of the United States in immediately available
funds at the main office of The First National Bank of Chicago, as
Administrative Agent, in Chicago, Illinois, together with interest, in like
money and funds, on the unpaid principal amount hereof at the rates and on the
dates determined in accordance with the Agreement. Borrower shall pay each
Competitive Bid Loan in full on the last day of such Competitive Bid Loan's
applicable Interest Period.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or otherwise record in accordance with its usual practice, the
date and amount of each Competitive Bid Loan and the date and amount of each
principal payment hereunder.
This Note (Competitive Bid Loans) is one of the Notes issued pursuant
to, and is entitled to the benefits of, the Credit Agreement dated as of August
5, 1994, as amended by that certain First Amendment to Credit Agreement dated
as of July 28, 1995, among Borrower, Citicorp Securities, Inc., as Syndication
Agent, The First National Bank of Chicago, individually and as Administrative
Agent, Texas Commerce Bank National Association, individually and as
Documentation Agent, and the banks named therein, including the Lender, to
which Agreement, as it may be further amended from time to time, reference is
hereby made for a statement of the terms and conditions under which this Note
may be prepaid or its maturity date accelerated. Capitalized terms used herein
and not otherwise defined herein are used with the meanings attributed to them
in the Agreement.
Each Note (Competitive Bid Loans) issued pursuant to the Agreement is
in the amount of $800,000,000.00, provided, however, that the aggregate
principal amount of Loans under this Note may not exceed the aggregate of
Commitments from all Lenders under the Agreement.
Notwithstanding anything to the contrary contained herein, no
provision of this Note shall require the payment or permit the collection of
interest in excess of the Maximum Rate. If any excess of interest in such
respect is herein provided for, or shall be adjudicated to be so provided, in
this Note or otherwise in connection with this loan transaction, the provisions
of this paragraph shall govern and prevail, and neither Borrower nor the
successors or assigns of Borrower shall be
<PAGE> 31
obligated to pay the excess amount of such interest, or any other excess sum
paid for the use, forbearance or detention of sums loaned pursuant hereto. If
for any reason interest in excess of the Maximum Rate shall be deemed charged,
required or permitted by any court of competent jurisdiction, any such excess
shall be applied as a payment and reduction of the principal of indebtedness
evidenced by this Note, and, if the principal amount hereof has been paid in
full, any remaining excess shall forthwith be paid to Borrower. In determining
whether or not the interest paid or payable exceeds the Maximum Rate, Borrower
and the Lenders shall, to the extent permitted by applicable law, (a)
characterize any non-principal payment as an expense, fee, or premium rather
than as interest, (b) exclude voluntary prepayments and the effects thereof,
and (c) amortize, prorate, allocate and spread in equal or unequal parts the
total amount of interest throughout the entire contemplated term of the
indebtedness evidenced by this Note so that the interest for the entire term
does not exceed the Maximum Rate.
Borrower and each endorser and other party ever liable for payment of
any sums of money payable on this Note jointly and severally waive notice
(except for notice specifically required by the terms of the Credit Agreement),
presentment, demand for payment, protest, notice of protest and non-payment or
dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, diligence in collecting, grace and all other formalities of
any kind, and consent to all extensions without notice for any period or
periods of time and partial payments, before or after maturity, and any
impairment of any collateral securing this Note, all without prejudice to the
holder. The holder shall similarly have the right to deal in any way, at any
time, with one or more of the foregoing parties without notice to any other
party, and to grant any such party any extensions of time for payment of any of
said indebtedness, or to release or substitute any such party, or to grant any
other indulgences or forbearances whatsoever, without notice to any other party
and without in any way affecting the personal liability of any party hereunder.
THIS NOTE AND THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
A. H. BELO CORPORATION
By:_______________________
Name:_____________________
Title:____________________
<PAGE> 32
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE (COMPETITIVE BID LOANS) OF _________________________
<TABLE>
<CAPTION>
Principal Maturity of Principal Amount
Date Amount of Loan Interest Period Paid Unpaid Balance
---- -------------- --------------- ---- --------------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 33
EXHIBIT "C"
[Letterhead of the General Counsel of the Borrower]
July 28, 1995
The Managing Agents and Lenders who are parties
to the Credit Agreement described below.
Gentlemen:
I am Senior Vice President, Secretary and General Counsel for A. H.
Belo Corporation, a Delaware corporation (the "Borrower"), and have
participated as an officer of the Borrower in the execution and delivery of the
First Amendment to Credit Agreement among the Borrower, Citicorp Securities,
Inc., as Syndication Agent, The First National Bank of Chicago, individually
and as Administrative Agent, Texas Commerce Bank National Association,
individually and as Documentation Agent, and the other Lenders named therein,
providing for Loans in an aggregate principal amount not exceeding $800,000,000
at any one time outstanding and dated as of July 28, 1995 (the "Amendment").
All capitalized terms not otherwise defined and used in this opinion shall have
the meanings attributed to them in the Amendment.
I am a member of the Bar of the State of Texas. My opinions expressed
below are limited to the law of the State of Texas, Federal law of the United
States and the General Corporation Law of the State of Delaware.
I have examined the Borrower's Certificate of Incorporation, Bylaws,
resolutions, the Loan Documents and such other matters of fact and law which I
deem necessary in order to render this opinion. Based upon the foregoing, it
is my opinion that:
1. The Borrower and each Subsidiary are corporations duly
incorporated, validly existing and in good standing under the laws of their
states of incorporation and have all requisite corporate authority to conduct
their business in each jurisdiction in which their business is conducted.
2. The execution and delivery this date of the Amendment, the
Notes and any other Loan Documents (referred to collectively hereinafter as the
"Loan Documents") by the Borrower and the performance by the Borrower of the
Obligations and the consummation of the transactions contemplated by the Loan
Documents have been duly authorized by all necessary corporate action and
proceedings on the part of the Borrower and will not:
(a) require any consent of the Borrower's stockholders;
<PAGE> 34
(b) violate any law or the Borrower's or any Subsidiary's
Certificate or Articles of Incorporation or Bylaws or, to my knowledge
after reasonable inquiry, any rule, regulation, order, writ, judgment,
injunction, decree or award binding on or affecting the Borrower or
any Subsidiary or any material indenture, instrument or agreement
binding upon the Borrower or any Subsidiary; or
(c) result in, or require, the creation or imposition of
any Lien pursuant to the provisions of any indenture, instrument or
agreement binding upon the Borrower or any Subsidiary except as set
forth in the Loan Documents.
3. The Loan Documents have been duly executed and delivered by
the Borrower and constitute legal, valid and binding obligations of the
Borrower enforceable in accordance with their terms except to the extent
enforcement (a) of the indemnification provisions of the Agreement may be
limited by applicable securities laws and public policies, and (b) may be
limited by Debtor Relief Laws and subject also to the availability of equitable
remedies if equitable remedies are sought.
4. There is no non-FCC litigation or proceeding pending or, to
the best of my knowledge, threatened against the Borrower or any Subsidiary
which, collectively or individually, has a substantial likelihood of resulting
in a Material Adverse Effect (except as set forth on Schedule 4 to the
Agreement).
5. No approval, authorization, consent or order of any
governmental authority, which has not been obtained by the Borrower or any
Subsidiary, is required to be obtained by the Borrower or any Subsidiary in
connection with the execution and delivery of the Loan Documents, the
borrowings under the Agreement or in connection with the payment by the
Borrower of the Obligations.
6. The Borrower and each of its Subsidiaries have been duly
issued, and they validly hold, as of this date, all material licenses, permits,
certificates and other authorizations from the FCC which are necessary to
enable each of them to own and operate the television stations owned and
operated by each of them on the date hereof and to conduct their respective
businesses as now being conducted, and to the best of my knowledge, the
Borrower and each of the Subsidiaries are operating in accordance with the
terms of such licenses, permits, certificates or other authorizations and in
accordance with the Communications Act of 1934, as amended, and all applicable
material rules and regulations of the FCC promulgated pursuant thereto.
7. Neither the execution and delivery by the Borrower of the Loan
Documents nor the fulfillment of or compliance with any of the provisions
thereof will (a) result in a violation of any currently applicable law,
statute, rule or regulation administered or promulgated by the FCC, or (b)
require any authorization, consent, approval, exemption or other action by, or
any notice to or filing with, the FCC (other than routine filings after the
date of this opinion with the FCC under Section 73.3613(b) (3) and (5) of the
FCC's Rules and Regulations) pursuant to any currently applicable law, statute,
rule or regulation administered by the FCC to which the Borrower or any
Subsidiary is subject.
2
<PAGE> 35
8. To the best of my knowledge after reasonable inquiry, no
proceeding, claim, lawsuit, investigation or other action is (a) currently
pending before the FCC, or (b) to my knowledge after reasonable inquiry,
threatened in writing and received by any radio or television station operated
by the Borrower or any Subsidiary and not currently before the FCC, which has a
substantial likelihood of resulting in a Material Adverse Effect.
9. Neither the Borrower nor any Subsidiary is an "investment
company" as that term is defined in, or is otherwise subject to regulation
under, the Investment Company Act of 1940.
Very truly yours,
3
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 10,120
<SECURITIES> 0
<RECEIVABLES> 114,964
<ALLOWANCES> (4,835)
<INVENTORY> 12,316
<CURRENT-ASSETS> 144,107
<PP&E> 582,634
<DEPRECIATION> (230,357)
<TOTAL-ASSETS> 1,077,885
<CURRENT-LIABILITIES> 68,495
<BONDS> 499,400
<COMMON> 65,250
0
0
<OTHER-SE> 323,094
<TOTAL-LIABILITY-AND-EQUITY> 1,077,885
<SALES> 0
<TOTAL-REVENUES> 352,808
<CGS> 0
<TOTAL-COSTS> 258,107
<OTHER-EXPENSES> 29,546
<LOSS-PROVISION> 2,565
<INTEREST-EXPENSE> 14,223
<INCOME-PRETAX> 54,255
<INCOME-TAX> 21,614
<INCOME-CONTINUING> 32,641
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,641
<EPS-PRIMARY> 0.81
<EPS-DILUTED> 0.81
</TABLE>
