<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): September 4, 1997
A. H. BELO CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-8598 74-0135890
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
P.O. BOX 655237
DALLAS, TEXAS 75265-5237
(Address of principal executive offices)
(214) 977-6606
(Registrant's Telephone No.)
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
On October 15, 1997, A. H. Belo Corporation ("Belo") completed the sale
of its interest in Television Food Network, G.P. ("TVFN") to the E.W. Scripps
Company ("Scripps"). As previously reported on the Company's Current Report on
Form 8-K dated September 4, 1997 (which is being amended by this Amendment No.
1), on that date Belo entered into an agreement to purchase KENS-TV (CBS) and
KENS-AM in San Antonio, Texas from Scripps in exchange for Belo's interest in
the TVFN and Cable Program Management Co. ("CPMCO"), the managing general
partner of TVFN, and $75 million in cash. In conjunction with the transfer of
its interest in TVFN and CPMCO, on October 15, 1997, Belo began operating
KENS-TV and KENS-AM under a local marketing agreement with Scripps pending FCC
approval of the KENS transfer. Belo funded $37,500,000 of the cash payment in
the transaction through its revolving credit facility. The remaining $37,500,000
will be funded when the FCC licenses and other assets of the stations are
transferred to Belo. This transfer is pending the receipt of FCC approval and
the satisfaction of all other conditions contained in the Exchange Agreement
(the "Exchange Agreement"), which has been previously filed as Exhibit 2.1
hereto, as amended by that First Amendment, which is attached hereto as Exhibit
2.2. A copy of the Company's press release dated October 15, 1997 announcing
the completion of the sale of Belo's interest in the TVFN and CPMCO to Scripps
is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The
description of the transaction contained in the press release is qualified in
its entirety by reference to the Exchange Agreement, as amended.
<PAGE> 3
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
a. Financial Statements of Business to be Acquired.
None
b. Pro Forma Financial Information.
<PAGE> 4
A. H. Belo Corporation
Unaudited Pro Forma Combined Condensed Balance Sheet
As of June 30, 1997
(in thousands)
<TABLE>
<CAPTION>
----------------------------------------- ----------------------------
Historical
-----------------------------------------
Less: Add: Pro Forma
Belo TVFN KENS Adjustments Combined
----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Assets
Cash and cash equivalents $ 30,076 $ (9,362) $ 615 $ -- $ 21,329
Accounts receivable, net of allowance
for doubtful accounts 207,275 (3,679) 5,542 -- 209,138
Other current assets 47,387 (9,649) 1,678 -- 39,416
Property, plant and equipment, net 573,658 (4,034) 7,612 -- 577,236
Intangible assets, net 2,389,937 (98,697) -- 227,750(a) 2,518,990
Other assets, net 170,166 (15,236) 1,882 -- 156,812
----------- ----------- ----------- ----------- -----------
$ 3,418,499 $ (140,657) $ 17,329 $ 227,750 $ 3,522,921
=========== =========== =========== =========== ===========
Liabilities and Shareholders' Equity
Total current liabilities $ 143,579 $ (4,551) $ 2,702 $ 9,500(b) $ 151,230
Long-term debt 1,510,685 -- -- 75,000(c) 1,585,685
Other liabilities 481,574 (11,106) 2,877 30,000(d) 503,345
Shareholders' equity 1,282,661 (125,000) 11,750 113,250 1,282,661
----------- ----------- ----------- ---------- ------------
$ 3,418,499 $ (140,657) $ 17,329 $ 227,750 $ 3,522,921
=========== =========== ========== ============ ============
</TABLE>
See Notes to Pro Forma Combined Condensed Financial Statements
<PAGE> 5
A. H. Belo Corporation
Unaudited Pro Forma Combined Condensed Statement of Earnings
Six Months Ended June 30, 1997
(in thousands)
<TABLE>
<CAPTION>
------------- ---------------------- ------------------------
Historical
Previously ----------------------
Reported Less: Add: Pro Forma
Belo (a) TVFN KENS Adjustments Combined
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net Operating Revenues
Broadcasting $ 272,617 $ -- $ 13,260 $ -- $ 285,877
Newspaper Publishing 328,127 -- -- -- 328,127
Other 15,840 (9,480) -- -- 6,360
--------- --------- --------- --------- ---------
Total Net Operating Revenues 616,584 (9,480) 13,260 -- 620,364
Operating Cost and Expenses 434,807 (18,527) 7,144 -- 423,424
Depreciation 40,792 (753) 499 -- 40,538
Amortization 33,793 (1,234) -- 2,847(b) 35,406
--------- --------- --------- --------- ---------
Earnings (Loss) From Operations 107,192 11,034 5,617 (2,847) 120,996
Interest Expense (45,075) 46 -- (2,288)(c) (47,317)
Other, Net 15,095 (771) -- (1,273)(d) 13,051
--------- --------- --------- --------- ---------
Earnings (Loss) Before Income Taxes 77,212 10,309 5,617 (6,408) 86,730
Income Taxes 37,772 3,993 2,219 (2,588)(e) 41,396
--------- --------- --------- --------- ---------
Net Earnings (Loss) $ 39,440 $ 6,316 $ 3,398 $ (3,820) $ 45,334
========= ========= ========= ========= =========
Net Earnings Per Share $ 0.63 $ 0.73
========= =========
Weighted Average Shares Outstanding 62,468 62,468
========= =========
</TABLE>
See Notes to Pro Form Combined Condensed Financial Statements.
<PAGE> 6
A. H. Belo Corporation
Unaudited Pro Forma Combined Condensed Statement of Earnings
Six Months Ended June 30, 1996
(in thousands)
<TABLE>
<CAPTION>
--------- --------------------- ----------------------
Historical
Previously ---------------------
Reported Less: Add: Pro Forma
Belo (a) TVFN KENS Adjustments Combined
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net Operating Revenues
Broadcasting $ 259,159 $ -- $ 12,501 $ -- $ 271,660
Newspaper Publishing 300,990 -- -- -- 300,990
Other 10,711 (6,334) -- -- 4,377
--------- --------- --------- --------- ---------
Total Net Operating Revenues 570,860 (6,334) 12,501 -- 577,027
Operating Cost and Expenses 450,707 (14,541) 7,038 -- 443,204
Depreciation 37,792 (711) 519 -- 37,600
Amortization 33,980 (1,234) -- 2,847 (b) 35,593
--------- --------- --------- --------- ---------
Earnings (Loss) From Operations 48,381 10,152 4,944 (2,847) 60,630
Interest Expense (41,711) -- -- (2,175)(c) (43,886)
Other, Net 14,408 (80) -- (3,306)(d) 11,022
--------- --------- --------- --------- ---------
Earnings (Loss) Before Income Taxes 21,078 10,072 4,944 (8,328) 27,766
Income Taxes 14,633 3,889 1,953 (3,306)(e) 17,169
--------- --------- --------- --------- ---------
Net Earnings (Loss) $ 6,445 $ 6,183 $ 2,991 $ (5,022) $ 10,597
========= ========= ========= ========= =========
Net Earnings Per Share $ 0.10 $ 0.16
========= =========
Weighted Average Shares Outstanding 66,148 66,148
========= =========
</TABLE>
See Notes to Pro Forma Combined Condensed Financial Statements
<PAGE> 7
A. H. BELO CORPORATION
NOTES TO PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS
(unaudited)
NOTE 1: GENERAL
On October 15, 1997, A. H. Belo Corporation (the "Company" or "Belo") purchased
certain assets of KENS-TV (CBS) ("KENS") in San Antonio, Texas from The E. W.
Scripps Company ("Scripps") in exchange for Belo's interest in the Television
Food Network ("TVFN") and $37.5 million in cash. Belo will purchase the
remaining assets of KENS, including its FCC licenses, upon FCC approval, at
which time a final payment of $37.5 million will be made. The transaction was
financed with funds from the Company's existing revolving credit facility.
The pro forma combined condensed statements of earnings include the previously
reported Unaudited Pro Forma Combined Condensed Statements of Earnings as
presented in Exhibit 99 to the Company's Quarterly Report on Form 10-Q for the
period ending June 30, 1997, which have been adjusted to reflect Belo's
acquisition of The Providence Journal Company for the entire period. These pro
forma combined condensed statements of earnings have then been adjusted for the
subsequent disposition of TVFN and acquisition of KENS and assume final
completion of the transaction, including the transfer of FCC licenses and
payment of the full $75 million. The accompanying pro forma combined condensed
balance sheet assumes the transaction was completed on June 30, 1997. The
accompanying pro forma combined condensed statements of earnings assume the
transaction was completed at the beginning of the periods indicated.
These pro forma financial statements are not necessarily indicative of the
financial position that would have actually been obtained had the transaction
occurred on June 30, 1997 or the results of operations that would have actually
been obtained had the transaction occurred on January 1, 1996 or 1997. These
pro forma financial statements should be read in conjunction with the
consolidated financial statements of the Company included in the annual report
for the year ended December 31, 1996 filed on Form 10-K, the consolidated
financial statements of The Providence Journal Company for the year ended
December 31,1996 filed on current report Form 8-K and the quarterly report for
the six-month period ended June 30, 1997 filed on Form 10-Q.
NOTE 2: PRO FORMA COMBINED CONDENSED BALANCE SHEET
(a) Amount represents adjustments to reflect the preliminary purchase price
allocation to KENS net assets acquired, including an adjustment related to
the tax consequences of the transaction and excluding consideration of
working capital adjustments, as summarized below:
Value of TVFN $125,000
Additional cash consideration 75,000
Estimated transaction costs and other adjustments 9,500
--------
Total purchase price 209,500
Less net assets acquired (11,750)
--------
KENS intangibles 197,750
Plus tax adjustment 30,000
--------
Incremental intangibles $227,750
========
(b) To accrue certain transaction costs and estimated purchase price
adjustments related to the acquisition of KENS.
(c) To record additional revolving debt issued to fund the cash portion of the
KENS purchase price.
(d) To record taxes associated with the transaction.
<PAGE> 8
NOTE 3: PRO FORMA COMBINED STATEMENTS OF EARNINGS FOR THE SIX MONTHS ENDED JUNE
30, 1997 AND 1996
(a) "Previously Reported Belo" is comprised of Belo historical information for
the six-month period ended June 30, 1997 and 1996 as adjusted for certain
pro forma financial results related to the February 28, 1997 acquisition of
The Providence Journal Company. These pro forma results are included as
Exhibit 99 of the Company's quarterly report on Form 10-Q for the six-month
period ended June 30, 1997.
(b) To record amortization expense on $227,750 of KENS intangibles over a
period of 40 years.
(c) To adjust interest expense on $75 million paid to Scripps using the
Company's weighted average revolving debt rates of 6.1% and 5.8% for the
six-month periods ended June 30, 1997 and 1996, respectively.
(d) To reverse TVFN pre-tax minority interest included in the consolidated
results.
(e) To adjust income taxes for the effect of the pro forma adjustments
described in (b), (c) and (d) above.
<PAGE> 9
c. Exhibits.
*2.1 Exchange Agreement, dated as of September 4, 1997 by and among Belo
Holdings, Inc., Colony Cable Networks, Inc., PJ Programming, Inc., BHI
Sub, Inc. and The E.W. Scripps Company.
2.2 Form of First Amendment to Exchange Agreement, dated as of October
15, 1997, by and among Belo Holdings, Inc., Colony Cable Networks,
Inc., PJ Programming, Inc., BHI Sub, Inc. and The E.W. Scripps
Company.
*99.1 Press Release, dated September 4, 1997.
99.2 Press Release, dated October 15, 1997.
- ----------------
*Filed previously with the Current Report on Form 8-K of Belo dated September 4,
1997.
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
A. H. BELO CORPORATION
Dated: October 30, 1997 By: /s/ Michael D. Perry
--------------------------------
Michael D. Perry
Senior Corporate Vice President and
Chief Financial Officer
<PAGE> 11
EXHIBIT LIST
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
*2.1 Exchange Agreement, dated as of September 4, 1997 by and among
Belo Holdings, Inc., Colony Cable Networks, Inc., PJ Programming,
Inc., BHI Sub, Inc. and The E.W. Scripps Company.
2.2 First Amendment to Exchange Agreement, dated as of October 15,
1997, by and among Belo Holdings, Inc., Colony Cable Networks,
Inc., PJ Programming, Inc., BHI Sub, Inc. and The E.W. Scripps
Company.
*99.1 Press Release, dated September 4, 1997.
99.2 Press Release, dated October 15, 1997.
</TABLE>
- ----------------
*Filed previously with the Current Report on Form 8-K of Belo dated September 4,
1997.
<PAGE> 1
EXHIBIT 2.2
FIRST AMENDMENT TO EXCHANGE AGREEMENT
THIS FIRST AMENDMENT TO EXCHANGE AGREEMENT (this "Amendment"), dated as of
October 15, 1997, is entered into by and between BELO HOLDINGS, INC., a
Delaware corporation ("Belo Holding"), COLONY CABLE NETWORKS, INC., a Rhode
Island corporation ("Colony"), PJ PROGRAMMING, INC., a Rhode Island corporation
("PJPI"), BHI SUB, INC., a Delaware corporation ("Belo Sub" and, with Belo
Holdings, Colony and PJPI, sometimes hereinafter referred to as the "Belo
Entities"), and THE E.W. SCRIPPS COMPANY, an Ohio corporation ("Scripps").
W I T N E S S E T H
WHEREAS, Belo Holdings, Colony, PJPI, Belo Sub, and Scripps are parties to
that certain Exchange Agreement, dated as of September 4, 1997 (the "Exchange
Agreement");
WHEREAS, the parties hereto desire to amend the Exchange Agreement,
subject to the terms and conditions of this Amendment; and
WHEREAS, the parties hereto are willing to amend the Exchange Agreement,
pursuant to the terms and conditions of this Amendment.
NOW, THEREFORE, in consideration of the foregoing and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms
used herein shall have the meanings, if any, assigned to them in the Exchange
Agreement.
2. Amendments to Exchange Agreement.
(a) Section 102(c). Section 10.2(c) of the Exchange Agreement is
hereby amended and restated in its entirety as follows:
"(c) Notwithstanding any other provision of this Agreement to the
contrary: (i) no party hereto will be liable to any other party hereto
pursuant to this Section 10.2 or otherwise except to the extent that the
aggregate amount of losses indemnified thereunder exceeds $2,5000,000; (ii)
the total aggregate liability of the Belo Entities, on the one hand, and
Scripps, on the other hand, for losses that may arise under this Section
10.2 or otherwise will not exceed $25,000,000; and (iii) any claims for
losses pursuant to this Section 10.2 or otherwise can only be made in
respect of indemnifiable claims actually filed or commenced on or prior to
eighteen months after the First Closing Date. Notwithstanding any other
provision of this Agreement to the contrary, each party's liability for
losses relating to indemnifiable claims for Taxes ("Tax
<PAGE> 2
Losses") shall be without limit in dollar amount (although still subject
to Section 10.2 (c) (i), except for matters referred to in Section 2.9 of
the Belo Disclosure Schedule, which such matters shall be without limit in
dollar amount and shall not be subject to Section 10.2 (c)(i) and claims
for Tax Losses pursuant hereto may be made at any time."
3. Effective Date. This Amendment will be come effective as of the date
first above written.
4. Miscellaneous.
(a) Except as expressly amended herein, all terms, covenants and
provisions of the Exchange Agreement are and shall remain in full force and
effect.
(b) This Amendment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. No third party
beneficiaries are intended in connection with this Amendment.
(c) This Amendment shall be governed by, construed and enforced in
accordance with the laws of the State of Texas without regard to its conflicts
of laws and principles.
(d) This Amendment may be executed in several counterparts, and all
counterparts so executed shall constitute one agreement, binding on the parties
hereto, notwithstanding that the parties are not signatory to the same
counterpart.
(e) In addition to other remedies provided herein, if a party defaults in
the performance of its obligations under this Amendment and fails to complete
the transactions contemplated hereby, as and when herein set forth, and the
other party shall not be in material default, such party shall be entitled to
apply for and obtain specific performance, which shall be in addition to any and
all other rights and remedies available to such party at law or in equity.
Each party hereby acknowledges that monetary damages alone would not be an
adequate compensation to the other party, and agrees that if any action is
brought seeking specific performance, each party shall waive the defense that
there is an adequate remedy at law.
2
<PAGE> 3
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their duly authorized officers, all as of the day and year first
above written.
BELO HOLDINGS, INC.
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
COLONY CABLE NETWORKS, INC.
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
PJ PROGRAMMING, INC.
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
BHI SUB, INC.
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
THE E.W. SCRIPPS COMPANY
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
3
<PAGE> 1
Exhibit 99.2
News Release
[A.H. BELO CORPORATION LETTERHEAD]
Belo Finalizes the Sale of Its Interest in the
Television Food Network to the E.W. Scripps Company
DALLAS, Oct. 15 /PRNewswire/ -- Belo (NYSE: BLC) announced today that it
has finalized the sale of its interest in the Television Food Network (TVFN) to
the E.W. Scripps Company.
On September 4, 1997, Belo reached an agreement to sell its interest in
TVFN to Scripps in exchange for KENS-TV (CBS) and KENS-AM in San Antonio,
Texas, and $75 million in cash. Belo's agreement with Scripps was subject to
government and other approvals as well as the completion of Scripps' purchase
of KENS-TV and KENS-AM from Harte-Hanks Communications, Inc. The
Scripps/Harte-Hanks transaction was also completed today. Belo will operate
KENS-TV and KENS-AM under a local marketing agreement with Scripps until FCC
approval is obtained and the parties close on the sale of the two properties.
San Antonio is the nation's 38th-largest television market. The addition
of KENS-TV, San Antonio's leading television station, will increase the size of
Belo's station group from 16 to 17 network-affiliated television stations and
extend its reach of U.S. television households to 14.1 percent. Belo's Texas
television ownership also includes WFAA-TV (ABC) in Dallas-Fort Worth and
KHOU-TV (CBS) in Houston.
Belo is one of the nation's largest media companies with a diversified
group of television broadcasting, newspaper publishing, cable news network and
electronic media assets. The Company's television group currently reaches 13.5
percent of U.S. television households, including three stations in the top 12
television markets: WFAA-TV (ABC) in Dallas-Fort Worth; KHOU-TV (CBS) in
Houston; and KING-TV (NBC) in Seattle-Tacoma. Belo has seven stations in the
top 30 markets, 11 stations in the top 50 markets, and network-affiliation as
follows: four ABC affiliates, five CBS affiliates, five NBC affiliates and two
FOX affiliates. In addition, the Company manages five television stations
through local marketing agreements, owns three local or regional cable news
channels and owns Belo Productions, Inc.
Belo's Publishing Division is headed by The Dallas Morning News
(dallasnews.com), which has the country's seventh largest Sunday circulation
and the ninth largest daily circulation, and the Providence Journal-Bulletin
(projo.com), the leading newspaper in Rhode Island and southeastern
Massachusetts. Belo also owns the Press-Enterprise in Riverside, California;
the Messenger-Inquirer in Owensboro, Kentucky; The Eagle in Bryan-College
Station, TX; the Arlington Morning News in Arlington, Texas; and The Gleaner in
Henderson, Kentucky.
SOURCE A.H. Belo Corporation
-0- 10/15/97
/CONTACT: Harold Gaar of A.H. Belo Corporation, 214-977-7650/(BLC)
-0-
