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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: MARCH 31, 1998
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.
CLASS OUTSTANDING AT APRIL 30, 1998
----- -----------------------------
Common Stock, $1.67 par value 62,565,804*
* Consisting of 53,248,537 shares of Series A Common Stock and 9,317,267
shares of Series B Common Stock.
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A. H. BELO CORPORATION
FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<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............................... 5
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>
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PART I.
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF EARNINGS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
Three months ended March 31,
- -------------------------------------------------------------------------------------------
In thousands, except per share amounts (unaudited) 1998 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C>
NET OPERATING REVENUES
Broadcasting $ 136,708 $ 92,002
Newspaper publishing 190,170 137,179
Other 2,582 3,521
----------------------------
Total net operating revenues 329,460 232,702
OPERATING COSTS AND EXPENSES
Salaries, wages and employee benefits 112,781 71,378
Other production, distribution and operating costs 83,196 61,308
Newsprint, ink and other supplies 41,828 29,231
Depreciation 21,418 14,356
Amortization 18,644 8,978
----------------------------
Total operating costs and expenses 277,867 185,251
----------------------------
Earnings from operations 51,593 47,451
OTHER INCOME AND EXPENSE
Interest expense (27,234) (13,447)
Other, net 1,272 1,249
----------------------------
Total other income and expense (25,962) (12,198)
EARNINGS
Earnings before income taxes 25,631 35,253
Income taxes 11,996 17,626
----------------------------
Net earnings $ 13,635 $ 17,627
============================
NET EARNINGS PER SHARE
Basic $ .22 $ .39
Diluted $ .22 $ .38
AVERAGE SHARES OUTSTANDING
Basic $ 62,415 $ 45,314
Diluted $ 63,384 $ 45,874
CASH DIVIDENDS DECLARED PER SHARE $ .12 $ .11
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</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
1
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CONSOLIDATED CONDENSED BALANCE SHEETS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
MARCH 31, December 31,
Dollars in thousands (Current year unaudited) 1998 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and temporary cash investments $ 20,807 $ 11,852
Accounts receivable, net 193,149 220,297
Other current assets 44,909 44,847
--------------------------
Total current assets 258,865 276,996
Property, plant and equipment, net 614,923 608,318
Intangible assets, net 2,599,151 2,626,953
Other assets 109,752 110,687
--------------------------
Total assets $ 3,582,691 $ 3,622,954
==========================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 36,402 $ 43,818
Accrued expenses 81,470 104,084
Other current liabilities 65,915 66,560
--------------------------
Total current liabilities 183,787 214,462
Long-term debt 1,589,906 1,614,045
Deferred income taxes 435,225 435,695
Other liabilities 31,714 32,748
Shareholders' equity:
Preferred stock
Common stock, $1.67 par value. Authorized
150,000,000 shares:
Series A: Issued 53,221,849 shares at March 31, 1998
and 52,998,586 shares at December 31, 1997 88,880 88,508
Series B: Issued 9,296,021 shares at March 31, 1998
and 9,283,001 shares at December 31, 1997 15,525 15,503
Additional paid-in capital 1,023,988 1,015,345
Retained earnings 209,421 203,276
Accumulated other comprehensive income 4,800 4,144
--------------------------
Total 1,342,614 1,326,776
Less deferred compensation - restricted shares (555) (772)
--------------------------
Total shareholders' equity 1,342,059 1,326,004
Total liabilities and shareholders' equity $ 3,582,691 $ 3,622,954
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</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
2
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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
Three months ended March 31,
- ------------------------------------------------------------------------------------------
In thousands (unaudited) 1998 1997
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<S> <C> <C>
OPERATIONS
Net earnings $ 13,635 $ 17,627
Adjustments to reconcile net earnings
to net cash provided by operations:
Depreciation and amortization 40,062 23,334
Deferred income taxes 252 7,254
Other, net 1,979 (232)
Net change in current assets and liabilities:
Accounts receivable 27,942 8,738
Other current assets (753) 1,895
Accounts payable (10,616) (4,689)
Accrued expenses (24,066) (9,158)
Other current liabilities 1,143 12,457
----------------------
Net cash provided by operations 49,578 57,226
INVESTMENTS
Acquisitions -- (694,429)
Capital expenditures (12,269) (15,502)
Other, net (4,604) 463
----------------------
Net cash used for investments (16,873) (709,468)
FINANCING
Borrowings for acquisitions -- 894,506
Refinancing of Providence Journal debt -- (200,000)
Net payments on debt (20,939) (34,974)
Payment of dividends on stock (7,490) (3,989)
Net proceeds from exercise of stock options 4,679 974
----------------------
Net cash (used for) provided by financing (23,750) 656,517
Net increase in cash and temporary cash investments 8,955 4,275
Cash and temporary cash investments at beginning of period 11,852 13,829
----------------------
Cash and temporary cash investments at end of period $ 20,807 $ 18,104
======================
SUPPLEMENTAL DISCLOSURES
Value of stock issued for acquisition $ -- $ 870,399
Interest paid, net of amounts capitalized $ 18,223 $ 10,399
Income taxes paid, net of refunds $ 20,750 $ 4,832
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</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
3
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
(1) The accompanying unaudited consolidated condensed financial statements
of A. H. Belo Corporation and subsidiaries (the "Company" or "Belo")
have been prepared in accordance with generally accepted accounting
principles for interim financial information and in accordance with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. The balance sheet at December 31, 1997 has been
derived from the audited consolidated financial statements at that date
but does not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month period ended March
31, 1998 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1998. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K
for the year ended December 31, 1997.
Certain amounts for the prior period have been reclassified to conform
to the current year presentation.
(2) As of January 1, 1998, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive
Income". SFAS No. 130 establishes reporting requirements for
comprehensive income and its components, but has no effect on the
Company's net earnings or total shareholders' equity. SFAS No. 130
requires unrealized gains and losses related to available-for-sale
securities to be included in other comprehensive income. Previously,
these amounts were reported as adjustments to retained earnings. Total
comprehensive income for the three months ended March 31, 1998 and 1997
was $14,291 and $18,221, respectively.
(3) Net operating revenues, earnings from operations, and depreciation and
amortization by industry segment are shown below (in thousands):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Three months ended March 31, 1998 1997
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
NET OPERATING REVENUES
Broadcasting $ 136,708 $ 92,002
Newspaper publishing 190,170 137,179
Other 2,582 3,521
------------- -------------
Total net operating revenues $ 329,460 $ 232,702
============= =============
EARNINGS FROM OPERATIONS
Broadcasting $ 23,642 $ 16,869
Newspaper publishing 39,717 38,877
Other (1,628) (1,534)
Corporate expenses (10,138) (6,761)
------------- -------------
Total earnings from operations $ 51,593 $ 47,451
============= =============
DEPRECIATION AND AMORTIZATION
Broadcasting $ 24,971 $ 14,555
Newspaper publishing 14,330 8,200
Other 268 273
Corporate 493 306
------------- -------------
Total depreciation and amortization $ 40,062 $ 23,334
============= =============
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</TABLE>
4
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
The Company owns 17 network-affiliated television stations that currently reach
14.2 percent of U.S. television households. In addition, the Company manages
four television stations through local marketing agreements. Belo also publishes
six daily newspapers. The following table sets forth the Company's major media
assets by segment as of March 31, 1998:
<TABLE>
<CAPTION>
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BROADCASTING
- ---------------------------------------------------------------------------------------------------------------
NETWORK
MARKET MARKET RANK(a) STATION AFFILIATION STATUS ACQUIRED
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dallas-Fort Worth 8 WFAA ABC Owned March 1950
Houston 11 KHOU CBS Owned February 1984
Seattle-Tacoma 12 KING NBC Owned February 1997
Seattle-Tacoma 12 KONG IND LMA February 1997
Sacramento 20 KXTV ABC Owned February 1984
St. Louis 21 KMOV CBS Owned June 1997
Portland 24 KGW NBC Owned February 1997
Charlotte 28 WCNC NBC Owned February 1997
San Antonio 38 KENS CBS Owned October 1997
Hampton-Norfolk 39 WVEC ABC Owned February 1984
New Orleans 41 WWL CBS Owned June 1994
Albuquerque 48 KASA FOX Owned February 1997
Louisville 50 WHAS ABC Owned February 1997
Tulsa 58 KOTV CBS Owned February 1984
Honolulu 71 KHNL NBC Owned February 1997
Honolulu 71 KFVE UPN LMA February 1997
Spokane 73 KREM CBS Owned February 1997
Spokane 73 KSKN UPN LMA February 1997
Tucson 78 KMSB FOX Owned February 1997
Tucson 78 KTTU UPN LMA February 1997
Boise 125 KTVB NBC Owned February 1997
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
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NEWSPAPER PUBLISHING
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DAILY SUNDAY
NEWSPAPER LOCATION ACQUIRED CIRCULATION(b) CIRCULATION(b)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Dallas Morning News Dallas, TX (c) 521,162 795,030
Providence Journal-Bulletin Providence, RI February 1997 166,968 239,466
The Press-Enterprise Riverside, CA July 1997 166,708 173,187
Messenger-Inquirer Owensboro, KY January 1996 32,008 34,864
The Eagle Bryan-College Station, TX December 1995 23,033 27,929
The Gleaner Henderson, KY March 1997 11,460 13,487
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</TABLE>
5
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<TABLE>
<CAPTION>
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OTHER
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COMPANY DESCRIPTION
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<S> <C>
Belo Productions, Inc. Produces television programming
Northwest Cable News Cable news network distributed to approximately 2 million homes
dallasnews.com Web site featuring daily content from The Dallas Morning News
projo.com Web site featuring daily content from Providence Journal-Bulletin
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Market rank is based on the relative size of the television market or
Designated Market Area ("DMA") among the 211 generally recognized DMA's in
the United States, based on November 1997 Nielsen estimates.
(b) Average paid circulation for the six months ended March 31, 1998, according
to the Audit Bureau of Circulation's FAS-FAX report.
(c) The first issue of The Dallas Morning News was published October 1, 1885.
RESULTS OF OPERATIONS
Net earnings for the first quarter of 1998 were $13,635 (22 cents per share)
compared to $17,627 (38 cents per share) for the first quarter of 1997. Results
for 1998 include the effect of 1997 acquisitions, including: The Providence
Journal Company ("PJC") on February 28, 1997, which included nine television
stations and a daily newspaper; The Gleaner (Henderson, KY) on March 31, 1997;
and The Press-Enterprise (Riverside, CA) on July 25, 1997. In addition to these
acquisitions, the Company exchanged KIRO-TV (Seattle, WA) for KMOV-TV (St.
Louis, MO) effective June 2, 1997 and acquired KENS-TV (San Antonio, TX) in an
exchange for Belo's interest in TVFN, a cable network, on October 15, 1997.
First quarter 1998 net earnings and earnings per share were lower than the
comparable 1997 quarter due to higher amortization and interest expense and a
greater number of shares outstanding as a result of the acquisitions described
above.
To enhance comparability of the Company's segment results of operations for the
three months ended March 31, 1998 and 1997, certain information below is
presented on an "as adjusted" basis and reflects the transactions noted above as
though each had occurred at the beginning of 1997. The discussion that follows
compares segment operations on an adjusted basis only.
<TABLE>
<CAPTION>
As Adjusted As Reported
- -------------------------------------------------------------------------------------------------------
(unaudited) 1998 1997 % Change 1998 1997 % Change
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues
Broadcasting 136,708 124,911 9.4% 136,708 92,002 48.6%
Newspaper publishing 190,170 182,175 4.4% 190,170 137,179 38.6%
Other 2,582 2,476 4.3% 2,582 3,521 (26.7)%
Segment operating cash flow (a)
Broadcasting 48,613 43,127 12.7% 48,613 31,424 54.7%
Newspaper publishing 54,047 54,726 (1.2)% 54,047 47,077 14.8%
Other (1,360) (692) (96.5)% (1,360) (1,261) (7.9)%
- -------------------------------------------------------------------------------------------------------
</TABLE>
(a) Segment operating cash flow is defined as segment earnings from operations
plus depreciation and amortization. Operating cash flow is used in the
television and newspaper publishing industries to analyze and compare
companies on the basis of operating performance, leverage and liquidity.
However, operating cash flow should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
generally accepted accounting principles.
6
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Broadcasting
Broadcasting revenues for the first quarter of 1998 were $136,708, an increase
of 9.4 percent over first quarter 1997 revenues of $124,911. About 45 percent of
the increase is attributable to incremental advertising revenues from the
Company's CBS affiliates during their broadcast of the Winter Olympics.
Political advertising was $1,568 higher in the first three months of 1998 versus
the same period in 1997 due to state elections in Texas, California and
Louisiana. Strong local advertising in Houston, Dallas, Seattle and St. Louis
led to a 13 percent increase in local advertising revenue. National advertising
revenues increased 1.5 percent in the first quarter of 1998 versus the same
period in 1997 as significant gains in St. Louis, Houston, Portland and
Sacramento were offset by national advertising declines in the Dallas, Seattle
and New Orleans markets.
Broadcasting operating cash flow margins for the first quarter of 1998 and 1997
were 35.6 percent and 34.5 percent, respectively. Broadcasting operating cash
flow of $48,613 improved 12.7 percent over last year's first quarter operating
cash flow of $43,127. While revenues increased 9.4 percent, cash expenses
increased 7.7 percent over the first quarter of 1997. Salaries, wages and
employee benefits were 7.9 percent higher in first quarter 1998 compared to
first quarter 1997. Some of the factors contributing to the increase in costs
were additional employees, normal merit adjustments, higher commissions, bonus
accruals and increased costs for pension and 401(k) benefits. Other production,
distribution and operating costs were up 7.7 percent over last year due
primarily to higher programming costs, offset somewhat by savings in advertising
and promotion expenses. Other items contributing to the higher operating
expenses were costs related to covering the Olympics and repairs and
maintenance.
Newspaper Publishing
First quarter 1998 revenues for newspaper publishing were $190,170, or 4.4
percent higher than first quarter 1997 revenues of $182,175. First quarter
revenues at The Dallas Morning News ("TDMN") were up due mostly to classified
advertising gains. Average rates for classified advertising increased while
volumes declined slightly, primarily in the employment category. Retail
advertising revenues were flat as rate increases were offset by volume declines
in nearly all categories. General advertising revenues were down due to volume
declines in communications and airline and other travel advertising. Circulation
revenues for TDMN were down due to slight volume declines.
Revenues for the Providence Journal-Bulletin ("PJB") were up significantly in
the first quarter of 1998 compared to the same period in 1997. Retail
advertising revenues improved substantially due to rate increases as well as
volume gains in the automotive, telecommunications and furniture categories.
Classified advertising revenues were up due primarily to rate increases in the
employment and real estate categories. General advertising revenues declined due
to volume reductions in both airline and automotive advertising. Circulation
revenues for PJB were down compared to last year due to slight volume declines.
Newspaper publishing operating cash flow margins for the newspaper publishing
segment during the first quarters of 1998 and 1997 were 28.4 percent and 30
percent, respectively. Publishing operating cash flow of $54,047 was 1.2 percent
lower than last year's first quarter operating cash flow of $54,726. The 4.4
percent improvement in revenues was offset by a 6.8 percent increase in cash
expenses, primarily due to higher newsprint costs. The average cost per metric
ton of newsprint was about 15 percent higher than the first quarter of 1997 due
to the effect of industry-wide price increases. Other expenses, including
employment related costs, rose less than 5 percent during the first quarter of
1998 compared to the same period in 1997. Higher outside services, commissions
and communications expenses were offset by savings in distribution costs and
lower bad debt expense.
7
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Consolidated results
Depreciation and amortization expenses were higher for the first quarter of 1998
versus 1997 due to the full effect of the prior year acquisitions. Higher
borrowings, also as a result of 1997 acquisitions, resulted in higher first
quarter 1998 versus 1997 interest expense. Additionally, approximately
two-thirds of the Company's debt outstanding during the first quarter of 1998
was fixed-rate debt carrying a weighted average effective interest rate of 7.3
percent. During the same period in 1997, all of the Company's debt was borrowed
under a revolving credit facility with a weighted average borrowing rate of
approximately 6 percent.
The effective tax rate for the first three months of 1998 was 46.8 percent,
compared to 50 percent for the first quarter of 1997. The lower effective rate
reflects higher expected pre-tax earnings for 1998.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operations is the Company's primary source of liquidity for
operations. During the first quarter of 1998, net cash provided by operations
was $49,578, compared to $57,226 for the same period in 1997. An increase in
cash earnings (defined as net earnings plus depreciation and amortization) and
decreases in receivable balances were more than offset by other working capital
changes, including higher first quarter 1998 payments for taxes, interest and
bonuses. Net cash provided by operations was sufficient to fund capital
expenditures and common stock dividends.
Long-term debt decreased $20,939 from December 31, 1997 to March 31, 1998 due to
debt reductions from net cash provided by operations.
At March 31, 1998, the Company had $1 billion in fixed-rate debt securities. The
weighted average effective interest rate for the fixed-rate debt instruments is
7.3 percent. The Company also has $500,000 available for issuance under a shelf
registration statement filed in April of 1997. Future issuances of fixed-rate
debt may be used to refinance variable-rate debt in whole or in part or for
other corporate needs as determined by management.
At March 31, 1998, the Company had a $1 billion five-year variable-rate
revolving credit agreement with a syndicate of 27 banks under which borrowings
were $455,000. In addition, the Company had $112,200 of short-term unsecured
notes outstanding at March 31, 1998. These borrowings may be converted at the
Company's option to revolving debt. Accordingly, such borrowings are classified
as long-term in the Company's financial statements. The Company is required to
maintain certain ratios as of the end of each quarter, as defined in its
revolving credit agreement. As of March 31, 1998, the Company was in compliance
with all debt covenant requirements.
The Company paid first quarter 1998 dividends of $7,490 or 12 cents per share on
Series A and Series B common stock outstanding, compared to $3,989 or 11 cents
per share in the first quarter of 1997. The higher dividends in 1998 were due to
the higher dividend rate and more shares outstanding as a result of the February
1997 PJC acquisition.
First quarter 1998 capital expenditures were $12,269. The majority of this
amount was used for broadcast equipment purchases, including those for the
conversion to digital television, and publishing equipment purchases.
8
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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 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
Exhibits marked with an asterisk (*) are incorporated by reference to
documents previously filed by the Company with the Securities and
Exchange Commission, as indicated. Exhibits marked with a tilde (~) are
management contracts or compensatory plan contracts or arrangements
filed pursuant to Item 601 (b)(10)(iii)(A) of Regulation S-K. All other
documents are filed with this report.
EXHIBIT
NUMBER DESCRIPTION
2.1* Amended and Restated Agreement and Plan of Merger, dated as of
September 26, 1996 (Appendix A of the Joint Proxy
Statement/Prospectus of Belo and Providence Journal included
in Belo's Registration Statement on Form S-4 (Registration No.
333-19337) filed with the Commission on January 8, 1997)
3.1* Certificate of Incorporation of the Company (Exhibit 3.1 to
the Company's Amended Annual Report on Form 10-K/A dated April
8, 1996 (the "1995 Form 10-K/A"))
3.2* Certificate of Correction to Certificate of Incorporation
dated May 13, 1987 (Exhibit 3.2 to the 1995 Form 10-K/A)
3.3* Certificate of Designation of Series A Junior Participating
Preferred Stock of the Company dated April 16, 1987 (Exhibit
3.3 to the 1995 Form 10-K/A)
9
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EXHIBIT
NUMBER DESCRIPTION
3.4* Certificate of Amendment of Certificate of Incorporation of
the Company dated May 4, 1988 (Exhibit 3.4 to the 1995 Form
10-K/A)
3.5* Certificate of Amendment of Certificate of Incorporation of
the Company dated May 3, 1995 (Exhibit 3.5 to the Company's
Annual Report on Form 10-K dated February 28, 1996 (the "1995
Form 10-K"))
3.6* Amended Certificate of Designation of Series A Junior
Participating Preferred Stock of the Company dated May 4, 1988
(Exhibit 3.6 to the 1995 Form 10-K/A)
3.7* Certificate of Designation of Series B Common Stock of the
Company dated May 4, 1988 (Exhibit 3.7 to the 1995 Form
10-K/A)
3.8* Amended and Restated Bylaws of the Company, effective February
13, 1998 (Exhibit 3.8 to the Company's Annual Report on Form
10-K dated March 18, 1998 (the "1997 Form 10-K"))
4.1 Certain rights of the holders of the Company's Common Stock
are set forth in Exhibits 3.1-3.8 above
4.2* Specimen Form of Certificate representing shares of the
Company's Series A Common Stock (Exhibit 4.2 to the 1997 Form
10-K)
4.3* Specimen Form of Certificate representing shares of the
Company's Series B Common Stock (Exhibit 4.3 to the 1997 Form
10-K)
4.4* Amended and Restated Form of Rights Agreement as of February
28, 1996 between the Company and Chemical Mellon Shareholder
Services, L.L.C., a New York banking corporation (Exhibit 4.4
to the 1995 Form 10-K)
4.5* Supplement No. 1 to Amended and Restated Rights Agreement
between the Company and The First National Bank of Boston
dated as of November 11, 1996 (Exhibit 4.5 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1996)
4.6 Instruments defining rights of debt securities:
(1)* Indenture dated as of June 1, 1997 between the Company
and The Chase Manhattan Bank, as Trustee (Exhibit 4.6(1)
to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1997 (the "2nd Quarter
1997 Form 10-Q"))
(2)* (a) $200 million 6-7/8% Senior Note due 2002 (Exhibit
4.6 (2)(a) to the 2nd Quarter 1997 Form 10-Q)
* (b) $50 million 6-7/8% Senior Note due 2002 (Exhibit
4.6 (2)(b) to the 2nd Quarter 1997 Form 10-Q)
(3)* (a) $200 million 7-1/8% Senior Note due 2007 (Exhibit
4.6 (3)(a) to the 2nd Quarter 1997 Form 10-Q)
* (b) $100 million 7-1/8% Senior Note due 2007 (Exhibit
4.6 (3)(b) to the 2nd Quarter 1997 Form 10-Q)
10
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EXHIBIT
NUMBER DESCRIPTION
(4)* $200 million 7-3/4% Senior Debenture due 2027 (Exhibit
4.6 (4) to the 2nd Quarter 1997 Form 10-Q)
(5)* Officer's Certificate dated June 13, 1997 establishing
terms of debt securities pursuant to Section 3.1 of the
Indenture (Exhibit 4.6 (5) to the 2nd Quarter 1997 Form
10-Q)
(6)* (a) $200 million 7-1/4% Senior Debenture due 2027
(Exhibit 4.6 (6)(a) to the Company's Quarterly
Report on Form 10-Q for the quarterly period ended
September 30, 1997 (the "3rd Quarter 1997
Form 10-Q"))
* (b) $50 million 7-1/4% Senior Debenture due 2027
(Exhibit 4.6 (6)(b) to the 3rd Quarter 1997
Form 10-Q)
(7)* Officer's Certificate dated September 26, 1997
establishing terms of debt securities pursuant to
Section 3.1 of the Indenture (Exhibit 4.6 (7) to the 3rd
Quarter 1997 Form 10-Q)
10.1 Contracts relating to television broadcasting:
(1)* Form of Agreement for Affiliation between WFAA-TV in
Dallas, Texas and ABC (Exhibit 10.1 (1) to the 1995 Form
10-K/A)
10.2 Financing agreements:
(1)* Amended and Restated Credit Agreement (Five-year
$1,000,000,000 revolving credit and competitive advance
facility dated as of August 29, 1997 among the Company
and The Chase Manhattan Bank, as Administrative Agent
and Competitive Advance Facility Agent, Bank of America
National Trust and Savings Association and Bank of
Tokyo-Mitsubishi, Ltd. as Co-Syndication Agents, and
NationsBank as Documentation Agent)(Exhibit 10.2(1) to
the 3rd Quarter 1997 Form 10-Q)
10.3 Compensatory plans:
~(1) The A. H. Belo Corporation Employee Savings and
Investment Plan:
* (a) The A. H. Belo Corporation Employee Savings and
Investment Plan Amended and Restated January 1,
1998 (Exhibit 10.3(1)(a) to the 1997 Form 10-K)
* (b) Restated Master Trust Agreement between the
Company and Fidelity Management Trust Company, as
restated and dated March 13, 1998 (Exhibit
10.3(1)(b) to the 1997 Form 10-K)
~(2) The A. H. Belo Corporation 1986 Long-Term Incentive
Plan:
* (a) The A. H. Belo Corporation 1986 Long-Term
Incentive Plan (Effective May 3, 1989, as amended
by Amendments 1, 2, 3, 4, and 5) (Exhibit 10.3
(2) to the Company's Annual Report on Form 10-K
dated March 10, 1997 (the "1996 Form 10-K"))
* (b) Amendment No. 6 to 1986 Long-Term Incentive Plan
(Exhibit 10.3 (2)(b) to the 1997 Form 10-K)
* (c) Amendment No. 7 to 1986 Long-Term Incentive Plan
(Exhibit 10.3(9) to the 1995 Form 10-K)
~(3)* A. H. Belo Corporation 1995 Executive Compensation Plan
as restated to incorporate amendments through December
4, 1997 (Exhibit 10.3 (3) to the 1997 Form 10-K)
11
<PAGE> 14
EXHIBIT
NUMBER DESCRIPTION
~(4)* Management Security Plan (Exhibit 10.3 (1) to the 1996
Form 10-K)
~(5) A. H. Belo Corporation Supplemental Executive Retirement
Plan:
* (a) A. H. Belo Corporation Supplemental Executive
Retirement Plan (Exhibit 10.3(27) to the Company's
Annual Report on Form 10-K dated March 18, 1994
(the "1993 Form 10-K"))
* (b) Trust Agreement dated February 28, 1994, between
the Company and Mellon Bank, N.A. (Exhibit
10.3(28) to the 1993 Form 10-K)
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
27.1 Restated Financial Data Schedule for the year ended December
31, 1996
27.2 Restated Financial Data Schedule for the year ended December
31, 1995
27.3 Restated Financial Data Schedule for the three months ended
March 31, 1997
27.4 Restated Financial Data Schedule for the six months ended June
30, 1997
27.5 Restated Financial Data Schedule for the nine months ended
September 30, 1997
99 Unaudited Pro Forma Combined Condensed Statements of Earnings
reflecting the acquisition of The Providence Journal Company
and the exchange of Television Food Network for KENS-TV for
the three months ended March 31, 1997
(b) Reports on Form 8-K
During the quarter covered by this report, there were no reports on Form
8-K filed.
12
<PAGE> 15
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
May 11, 1998 By: /s/ Michael D. Perry
---------------------------------------
Michael D. Perry
Senior Corporate Vice President and
Chief Financial Officer
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------ ----------- ----------
<S> <C> <C>
2.1 Amended and Restated Agreement and Plan of Merger, dated as of
September 26, 1996 (Appendix A of the Joint Proxy
Statement/Prospectus of Belo and Providence Journal included
in Belo's Registration Statement on Form S-4 (Registration No.
333-19337) filed with the Commission on January 8, 1997) N/A
3.1 Certificate of Incorporation of the Company (Exhibit 3.1 to
the Company's Amended Annual Report on Form 10-K/A dated April
8, 1996 (the "1995 Form 10-K/A")) N/A
3.2 Certificate of Correction to Certificate of Incorporation
dated May 13, 1987 (Exhibit 3.2 to the 1995 Form 10-K/A) N/A
3.3 Certificate of Designation of Series A Junior Participating
Preferred Stock of the Company dated April 16, 1987 (Exhibit
3.3 to the 1995 Form 10-K/A) N/A
3.4 Certificate of Amendment of Certificate of Incorporation of
the Company dated May 4, 1988 (Exhibit 3.4 to the 1995 Form
10-K/A) N/A
3.5 Certificate of Amendment of Certificate of Incorporation of
the Company dated May 3, 1995 (Exhibit 3.5 to the Company's
Annual Report on Form 10-K dated February 28, 1996 (the "1995
Form 10-K")) N/A
3.6 Amended Certificate of Designation of Series A Junior
Participating Preferred Stock of the Company dated May 4, 1988
(Exhibit 3.6 to the 1995 Form 10-K/A) N/A
3.7 Certificate of Designation of Series B Common Stock of the
Company dated May 4, 1988 (Exhibit 3.7 to the 1995 Form
10-K/A) N/A
3.8 Amended and Restated Bylaws of the Company, effective February
13, 1998 (Exhibit 3.8 to the Company's Annual Report on Form
10-K dated March 18, 1998 (the "1997 Form 10-K")) N/A
4.1 Certain rights of the holders of the Company's Common Stock
are set forth in Exhibits 3.1-3.8 above N/A
4.2 Specimen Form of Certificate representing shares of the
Company's Series A Common Stock (Exhibit 4.2 to the 1997 Form
10-K) N/A
4.3 Specimen Form of Certificate representing shares of the
Company's Series B Common Stock (Exhibit 4.3 to the 1997 Form
10-K) N/A
4.4 Amended and Restated Form of Rights Agreement as of February
28, 1996 between the Company and Chemical Mellon Shareholder
Services, L.L.C., a New York banking corporation (Exhibit 4.4
to the 1995 Form 10-K) N/A
4.5 Supplement No. 1 to Amended and Restated Rights Agreement
between the Company and The First National Bank of Boston
dated as of November 11, 1996 (Exhibit 4.5 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1996) N/A
</TABLE>
E-1
<PAGE> 17
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------ ----------- ----------
<S> <C> <C>
4.6 Instruments defining rights of debt securities:
(1) Indenture dated as of June 1, 1997 between the Company
and The Chase Manhattan Bank, as Trustee (Exhibit 4.6(1)
to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1997 (the "2nd Quarter
1997 Form 10-Q")) N/A
(2) (a) $200 million 6-7/8% Senior Note due 2002 (Exhibit
4.6 (2)(a) to the 2nd Quarter 1997 Form 10-Q) N/A
(b) $50 million 6-7/8% Senior Note due 2002 (Exhibit
4.6 (2)(b) to the 2nd Quarter 1997 Form 10-Q) N/A
(3) (a) $200 million 7-1/8% Senior Note due 2007 (Exhibit
4.6 (3)(a) to the 2nd Quarter 1997 Form 10-Q) N/A
(b) $100 million 7-1/8% Senior Note due 2007 (Exhibit
4.6 (3)(b) to the 2nd Quarter 1997 Form 10-Q) N/A
(4) $200 million 7-3/4% Senior Debenture due 2027 (Exhibit
4.6 (4) to the 2nd Quarter 1997 Form 10-Q) N/A
(5) Officer's Certificate dated June 13, 1997 establishing
terms of debt securities pursuant to Section 3.1 of the
Indenture (Exhibit 4.6 (5) to the 2nd Quarter 1997 Form
10-Q) N/A
(6) (a) $200 million 7-1/4% Senior Debenture due 2027
(Exhibit 4.6 (6)(a) to the Company's Quarterly
Report on Form 10-Q for the quarterly period ended
September 30, 1997 (the "3rd Quarter 1997
Form 10-Q")) N/A
(b) $50 million 7-1/4% Senior Debenture due 2027
(Exhibit 4.6 (6)(b) to the 3rd Quarter 1997
Form 10-Q) N/A
(7) Officer's Certificate dated September 26, 1997
establishing terms of debt securities pursuant to
Section 3.1 of the Indenture (Exhibit 4.6 (7) to the 3rd
Quarter 1997 Form 10-Q) N/A
10.1 Contracts relating to television broadcasting:
(1) Form of Agreement for Affiliation between WFAA-TV in
Dallas, Texas and ABC (Exhibit 10.1 (1) to the 1995 Form
10-K/A) N/A
10.2 Financing agreements:
(1) Amended and Restated Credit Agreement (Five-year
$1,000,000,000 revolving credit and competitive advance
facility dated as of August 29, 1997 among the Company
and The Chase Manhattan Bank, as Administrative Agent
and Competitive Advance Facility Agent, Bank of America
National Trust and Savings Association and Bank of
Tokyo-Mitsubishi, Ltd. as Co-Syndication Agents, and
NationsBank as Documentation Agent)(Exhibit 10.2(1) to
the 3rd Quarter 1997 Form 10-Q) N/A
</TABLE>
E-2
<PAGE> 18
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------ ----------- ----------
<S> <C> <C>
10.3 Compensatory plans:
~(1) The A. H. Belo Corporation Employee Savings and
Investment Plan:
(a) The A. H. Belo Corporation Employee Savings and
Investment Plan Amended and Restated January 1,
1998 (Exhibit 10.3(1)(a) to the 1997 Form 10-K) N/A
(b) Restated Master Trust Agreement between the
Company and Fidelity Management Trust Company, as
restated and dated March 13, 1998 (Exhibit
10.3(1)(b) to the 1997 Form 10-K) N/A
~(2) The A. H. Belo Corporation 1986 Long-Term Incentive
Plan:
(a) The A. H. Belo Corporation 1986 Long-Term
Incentive Plan (Effective May 3, 1989, as amended
by Amendments 1, 2, 3, 4, and 5) (Exhibit 10.3
(2) to the Company's Annual Report on Form 10-K
dated March 10, 1997 (the "1996 Form 10-K")) N/A
(b) Amendment No. 6 to 1986 Long-Term Incentive Plan
(Exhibit 10.3 (2)(b) to the 1997 Form 10-K) N/A
(c) Amendment No. 7 to 1986 Long-Term Incentive Plan
(Exhibit 10.3(9) to the 1995 Form 10-K) N/A
~(3) A. H. Belo Corporation 1995 Executive Compensation Plan
as restated to incorporate amendments through December
4, 1997 (Exhibit 10.3 (3) to the 1997 Form 10-K) N/A
~(4) Management Security Plan (Exhibit 10.3 (1) to the 1996
Form 10-K) N/A
~(5) A. H. Belo Corporation Supplemental Executive Retirement
Plan: N/A
(a) A. H. Belo Corporation Supplemental Executive
Retirement Plan (Exhibit 10.3(27) to the Company's
Annual Report on Form 10-K dated March 18, 1994
(the "1993 Form 10-K")) N/A
(b) Trust Agreement dated February 28, 1994, between
the Company and Mellon Bank, N.A. (Exhibit
10.3(28) to the 1993 Form 10-K) N/A
12 Ratio of Earnings to Fixed Charges ---
27 Financial Data Schedule N/A
27.1 Restated Financial Data Schedule for the year ended December
31, 1996 N/A
27.2 Restated Financial Data Schedule for the year ended December
31, 1995 N/A
27.3 Restated Financial Data Schedule for the three months ended
March 31, 1997 N/A
27.4 Restated Financial Data Schedule for the six months ended June
30, 1997 N/A
27.5 Restated Financial Data Schedule for the nine months ended
September 30, 1997 N/A
99 Unaudited Pro Forma Combined Condensed Statements of Earnings
reflecting the acquisition of The Providence Journal Company
and the exchange of Television Food Network for KENS-TV for
the three months ended March 31, 1997 ----
</TABLE>
E-3
<PAGE> 1
A. H. BELO CORPORATION Exhibit 12
Computation of Ratio of Earnings to Fixed Charges
(Dollars in thousands)
<TABLE>
<CAPTION>
Year Ended December 31, Three Months Ended March 31,
--------------------------------------------------------- ----------------------------
1993 1994 1995 1996 1997 1997 1998
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Earnings before income taxes
and the cumulative effect
of accounting changes $ 75,578 $ 107,897 $ 111,014 $ 144,040 $ 154,122 $ 35,253 $ 25,631
Add: Total fixed charges 18,792 17,294 32,089 29,009 94,069 14,019 28,025
Less: Interest capitalized 1,961 138 957 255 510 90 129
--------- --------- --------- --------- --------- --------- ---------
Adjusted earnings $ 92,409 $ 125,053 $ 142,146 $ 172,794 $ 247,681 $ 49,182 $ 53,527
========= ========= ========= ========= ========= ========= =========
Fixed Charges:
Interest $ 16,976 $ 16,250 $ 30,944 $ 27,898 $ 91,288 $ 13,537 $ 27,363
Portion of rental expense
representative of the
interest factor (1) 1,816 1,044 1,145 1,111 2,781 482 662
--------- --------- --------- --------- --------- --------- ---------
Total fixed charges $ 18,792 $ 17,294 $ 32,089 $ 29,009 $ 94,069 $ 14,019 $ 28,025
========= ========= ========= ========= ========= ========= =========
Ratio of Earnings to Fixed Charges 4.92 x 7.23 x 4.43 x 5.96 x 2.63 x 3.51 x 1.91x
========= ========= ========= ========= ========= ========= =========
</TABLE>
- --------------------------------------
(1) For purposes of calculating fixed charges, an interest factor of one third
was applied to total rent expense for the period indicated.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 20,807
<SECURITIES> 0
<RECEIVABLES> 200,668
<ALLOWANCES> (7,519)
<INVENTORY> 20,172
<CURRENT-ASSETS> 258,865
<PP&E> 996,701
<DEPRECIATION> (381,778)
<TOTAL-ASSETS> 3,582,691
<CURRENT-LIABILITIES> 183,787
<BONDS> 1,589,906
0
0
<COMMON> 104,405
<OTHER-SE> 1,237,654
<TOTAL-LIABILITY-AND-EQUITY> 3,582,691
<SALES> 0
<TOTAL-REVENUES> 329,460
<CGS> 0
<TOTAL-COSTS> 237,805
<OTHER-EXPENSES> 40,062
<LOSS-PROVISION> 1,617
<INTEREST-EXPENSE> 27,234
<INCOME-PRETAX> 25,631
<INCOME-TAX> 11,996
<INCOME-CONTINUING> 13,635
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,635
<EPS-PRIMARY> 0.22
<EPS-DILUTED> 0.22
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 13,829
<SECURITIES> 0
<RECEIVABLES> 135,252
<ALLOWANCES> (5,276)
<INVENTORY> 13,873
<CURRENT-ASSETS> 171,925
<PP&E> 658,195
<DEPRECIATION> (287,415)
<TOTAL-ASSETS> 1,224,072
<CURRENT-LIABILITIES> 89,313
<BONDS> 631,857
0
0
<COMMON> 74,452
<OTHER-SE> 296,031
<TOTAL-LIABILITY-AND-EQUITY> 1,224,072
<SALES> 0
<TOTAL-REVENUES> 824,308
<CGS> 0
<TOTAL-COSTS> 593,476
<OTHER-EXPENSES> 65,183
<LOSS-PROVISION> 5,647
<INTEREST-EXPENSE> 27,643
<INCOME-PRETAX> 144,040
<INCOME-TAX> 56,535
<INCOME-CONTINUING> 87,505
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 87,505
<EPS-PRIMARY> 2.14
<EPS-DILUTED> 2.11
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 12,846
<SECURITIES> 0
<RECEIVABLES> 124,705
<ALLOWANCES> (4,164)
<INVENTORY> 20,336
<CURRENT-ASSETS> 165,306
<PP&E> 610,491
<DEPRECIATION> (248,650)
<TOTAL-ASSETS> 1,154,022
<CURRENT-LIABILITIES> 81,668
<BONDS> 557,400
0
0
<COMMON> 63,864
<OTHER-SE> 324,600
<TOTAL-LIABILITY-AND-EQUITY> 1,154,022
<SALES> 0
<TOTAL-REVENUES> 735,343
<CGS> 0
<TOTAL-COSTS> 539,333
<OTHER-EXPENSES> 59,447
<LOSS-PROVISION> 5,888
<INTEREST-EXPENSE> 29,987
<INCOME-PRETAX> 111,014
<INCOME-TAX> 44,438
<INCOME-CONTINUING> 66,576
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 66,576
<EPS-PRIMARY> 1,71
<EPS-DILUTED> 1.68
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 18,104
<SECURITIES> 0
<RECEIVABLES> 186,331
<ALLOWANCES> (8,670)
<INVENTORY> 14,913
<CURRENT-ASSETS> 240,899
<PP&E> 893,230
<DEPRECIATION> (301,347)
<TOTAL-ASSETS> 3,383,128
<CURRENT-LIABILITIES> 181,924
<BONDS> 1,483,957
0
0
<COMMON> 116,986
<OTHER-SE> 1,139,959
<TOTAL-LIABILITY-AND-EQUITY> 3,383,128
<SALES> 0
<TOTAL-REVENUES> 232,702
<CGS> 0
<TOTAL-COSTS> 161,917
<OTHER-EXPENSES> 23,334
<LOSS-PROVISION> 1,788
<INTEREST-EXPENSE> 13,447
<INCOME-PRETAX> 35,253
<INCOME-TAX> 17,626
<INCOME-CONTINUING> 17,627
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,627
<EPS-PRIMARY> 0.39
<EPS-DILUTED> 0.38
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 30,076
<SECURITIES> 0
<RECEIVABLES> 215,906
<ALLOWANCES> (8,631)
<INVENTORY> 13,436
<CURRENT-ASSETS> 284,738
<PP&E> 888,106
<DEPRECIATION> (314,448)
<TOTAL-ASSETS> 3,418,499
<CURRENT-LIABILITIES> 143,579
<BONDS> 1,510,685
0
0
<COMMON> 117,197
<OTHER-SE> 1,165,464
<TOTAL-LIABILITY-AND-EQUITY> 3,418,499
<SALES> 0
<TOTAL-REVENUES> 564,519
<CGS> 0
<TOTAL-COSTS> 386,552
<OTHER-EXPENSES> 59,802
<LOSS-PROVISION> 4,387
<INTEREST-EXPENSE> 36,321
<INCOME-PRETAX> 85,447
<INCOME-TAX> 41,507
<INCOME-CONTINUING> 43,940
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 43,940
<EPS-PRIMARY> 0.82
<EPS-DILUTED> 0.81
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 23,084
<SECURITIES> 0
<RECEIVABLES> 202,738
<ALLOWANCES> (8,914)
<INVENTORY> 21,500
<CURRENT-ASSETS> 297,101
<PP&E> 917,339
<DEPRECIATION> (316,085)
<TOTAL-ASSETS> 3,561,221
<CURRENT-LIABILITIES> 169,660
<BONDS> 1,591,496
0
0
<COMMON> 117,497
<OTHER-SE> 1,181,238
<TOTAL-LIABILITY-AND-EQUITY> 3,561,221
<SALES> 0
<TOTAL-REVENUES> 883,575
<CGS> 0
<TOTAL-COSTS> 616,693
<OTHER-EXPENSES> 96,609
<LOSS-PROVISION> 7,256
<INTEREST-EXPENSE> 63,224
<INCOME-PRETAX> 111,650
<INCOME-TAX> 52,752
<INCOME-CONTINUING> 58,898
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 58,898
<EPS-PRIMARY> 1.04
<EPS-DILUTED> 1.03
</TABLE>
<PAGE> 1
Exhibit 99
A. H. Belo Corporation
Unaudited Pro Forma Combined Condensed Statement of Earnings
Three Months Ended March 31, 1997
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Historical
--------------------------------------------------
Providence
A. H. Belo Journal Less: Add:
Corporation Company TVFN KENS
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Net Operating Revenues
Broadcasting $ 92,002 $ 28,421 $ -- $ 6,175
Newspaper Publishing 137,179 19,590 -- --
Other 3,521 4,351 (4,467) --
--------- --------- --------- ---------
Total Net Operating Revenues 232,702 52,362 (4,467) 6,175
Operating Costs and Expenses 161,917 56,324 (8,841) 3,621
Depreciation 14,356 6,289 (353) 236
Amortization 8,978 3,080 (617) --
--------- --------- --------- ---------
Earnings (Loss) From Operations 47,451 (13,331) 5,344 2,318
Interest Expense (13,447) (2,700) -- --
Other, Net 1,249 13,946 (898) --
--------- --------- --------- ---------
Earnings (Loss) Before Income Taxes 35,253 (2,085) 4,446 2,318
Income Taxes 17,626 (509) 1,956 916
--------- --------- --------- ---------
Net Earnings (Loss) $ 17,627 $ (1,576) $ 2,490 $ 1,402
========= ========= ========= =========
Net Earnings Per Share (j):
$ .38
=========
Weighted Average Shares Outstanding 45,874
=========
</TABLE>
<TABLE>
<CAPTION>
Pro Forma
------------------------------------------------------------
Elimination of PJC TVFN/KENS
AHN(a) Adjustments Adjustments Combined
---------------- ------------- ------------- ---------
<S> <C> <C> <C> <C>
Net Operating Revenues
Broadcasting $ -- $ -- $ -- $ 126,598
Newspaper Publishing -- -- -- 156,769
Other (297) -- -- 3,108
--------- ------------- ------------- ---------
Total Net Operating Revenues (297) -- -- 286,475
Operating Costs and Expenses (8,069) -- -- 204,952
Depreciation (305) 946b 559b 21,728
Amortization -- 4,725c 1,336f 17,502
--------- ------------- ------------- ---------
Earnings (Loss) From Operations 8,077 (5,671) (1,895) 42,293
Interest Expense -- (6,054)d (1,211)g (23,412)
Other, Net (2,454) -- (451)h 11,392
--------- ------------- ------------- ---------
Earnings (Loss) Before Income Taxes 5,623 (11,725) (3,557) 30,273
Income Taxes -- (2,800)e (1,425)i 15,764
--------- ------------- ------------- ---------
Net Earnings (Loss) $ 5,623 $ (8,925) $ (2,132) $ 14,509
========= ============= ============= =========
Net Earnings Per Share (j): $ .23
=========
Weighted Average Shares Outstanding 62,239
=========
</TABLE>
See Notes to Pro Forma Combined Condensed Statements of Earnings
<PAGE> 2
A. H. Belo Corporation
Notes to Unaudited Pro Forma Combined
Condensed Statements of Earnings
NOTE 1: GENERAL
The pro forma combined condensed statements of earnings reflect the acquisition
of The Providence Journal Company and other significant transactions occurring
during the period, as follows:
(i) Issuance of 25,395,000 shares of A. H. Belo Corporation (the "Company" or
"Belo") Series A Common Stock at a price of $34.275 per share and the
payment of $587,096,000 in cash to acquire all of the issued and
outstanding shares of The Providence Journal Company ("PJC") effective
February 28, 1997;
(ii) Exclusion of the operations of America's Health Network ("AHN"). The
Company's interest in AHN was terminated effective July 31, 1997;
(iii) Purchase of KENS-TV in exchange for Belo's interest in Television Food
Network ("TVFN") and $75 million in cash, effective October 15, 1997.
NOTE 2: UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF EARNINGS
Pro forma adjustments giving effect to the PJC acquisition and the TVFN/KENS
exchange in the unaudited pro forma combined condensed statements of earnings
reflect the following:
(a) Elimination of the results of operations of AHN. See Note 1 (ii).
(b) Depreciation of the step-up in basis to the fair market value for fixed
assets acquired.
(c) Amortization of the excess of the purchase price over net tangible assets
acquired, on a straight-line basis over 40 years, except for certain
amounts attributable to newspaper subscriber lists, which are being
amortized over 18 years. This adjustment is net of the elimination of the
PJC historical amortization of excess acquisition costs over the values
assigned to net tangible assets acquired in prior acquisitions.
(d) Increase in interest expense resulting from net borrowings incurred to
finance a portion of the purchase price. The interest rate on borrowings
is assumed to be 6.1%, Belo's weighted average borrowing rate during the
period.
(e) Income tax effect of PJC pro forma adjustments.
(f) Amortization of the excess of the KENS purchase price over net tangible
assets acquired, on a straight-line basis over 40 years.
(g) Increase in interest expense resulting from net borrowings incurred to
finance the cash portion of the KENS purchase price and subsequent
working capital adjustments. The interest rate on borrowings is assumed
to be 6.1%, Belo's weighted average borrowing rate during the period.
(h) Reversal of TVFN minority interest included in the consolidated results.
(i) Income tax effect of TVFN/KENS pro forma adjustments.
(j) Earnings per share based upon the weighted average number of shares of
Belo common and common equivalent shares outstanding, including
25,395,000 shares of Series A Common Stock issued in connection with the
acquisition, as if they had been issued at the beginning of the year.
