<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: MARCH 31, 2000
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, 2000
----- -----------------------------
Common Stock, $1.67 par value 118,869,671*
* Consisting of 99,846,701 shares of Series A Common Stock and 19,022,970
shares of Series B Common Stock.
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<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............................... 6
Item 3. Quantitative and Qualitative Disclosures about Market Risk..................... 10
PART II OTHER INFORMATION
Item 1. Legal Proceedings.............................................................. 10
Item 2. Changes in Securities.......................................................... 10
Item 3. Defaults Upon Senior Securities................................................ 10
Item 4. Submission of Matters to a Vote of Security Holders............................ 10
Item 5. Other Information.............................................................. 10
Item 6. Exhibits and Reports on Form 8-K............................................... 10
</TABLE>
i
<PAGE> 3
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) 2000 1999
--------- ----------
<S> <C> <C>
NET OPERATING REVENUES
Broadcast $ 152,975 $ 131,255
Newspaper publishing 206,117 191,344
Interactive media 2,187 1,259
Other 3,219 2,762
--------- ---------
Total net operating revenues 364,498 326,620
OPERATING COSTS AND EXPENSES
Salaries, wages and employee benefits 130,439 115,761
Other production, distribution and operating costs 90,886 79,496
Newsprint, ink and other supplies 38,616 41,150
Depreciation 24,399 22,277
Amortization 20,920 18,695
--------- ---------
Total operating costs and expenses 305,260 277,379
--------- ---------
Earnings from operations 59,238 49,241
OTHER INCOME AND EXPENSE
Interest expense (31,480) (26,570)
Other, net 648 1,217
--------- ---------
Total other income and expense (30,832) (25,353)
EARNINGS
Earnings before income taxes 28,406 23,888
Income taxes 13,013 11,298
--------- ---------
Net earnings $ 15,393 $ 12,590
========= =========
NET EARNINGS PER SHARE
Basic $ .13 $ .11
Diluted $ .13 $ .11
AVERAGE SHARES OUTSTANDING
Basic 118,715 118,331
Diluted 119,032 119,016
DIVIDENDS PER SHARE $ .07 $ .06
--------- ---------
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
1
<PAGE> 4
CONSOLIDATED CONDENSED BALANCE SHEETS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
March 31, December 31,
Dollars in thousands (Current year unaudited) 2000 1999
---------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and temporary cash investments $ 24,922 $ 45,593
Accounts receivable, net 228,596 245,949
Other current assets 49,254 60,416
---------- ----------
Total current assets 302,772 351,958
Property, plant and equipment, net 661,556 655,002
Intangible assets, net 2,857,333 2,853,192
Other assets 129,258 116,112
---------- ----------
Total assets $3,950,919 $3,976,264
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 43,550 $ 69,891
Accrued expenses 106,227 109,324
Other current liabilities 55,359 80,623
---------- ----------
Total current liabilities 205,136 259,838
Long-term debt 1,870,485 1,849,490
Deferred income taxes 419,165 422,465
Other liabilities 56,663 54,634
Shareholders' equity:
Preferred stock, $1.00 par value. Authorized 5,000,000 shares; none issued.
Common stock, $1.67 par value. Authorized 450,000,000 shares
Series A: Issued 99,844,153 shares at March 31, 2000
and 99,515,495 shares at December 31, 1999 166,740 166,191
Series B: Issued 18,986,216 shares at March 31, 2000
and 19,142,616 shares at December 31, 1999 31,707 31,968
Additional paid-in capital 887,784 885,522
Retained earnings 313,239 306,156
---------- ----------
Total shareholders' equity 1,399,470 1,389,837
---------- ----------
Total liabilities and shareholders' equity $3,950,919 $3,976,264
========== ==========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
2
<PAGE> 5
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
In thousands (unaudited) 2000 1999
-------- --------
<S> <C> <C>
OPERATIONS
Net earnings $ 15,393 $ 12,590
Adjustments to reconcile net earnings
to net cash provided by operations:
Depreciation and amortization 45,319 40,972
Deferred income taxes 610 24
Non cash expenses 3,704 4,165
Other, net (5,025) (1,266)
Net change in current assets and liabilities:
Accounts receivable 17,010 24,849
Other current assets 7,614 (573)
Accounts payable (19,684) (19,399)
Accrued expenses (7,234) (8,968)
Other current liabilities (24,169) 19,708
-------- --------
Net cash provided by operations 33,538 72,102
INVESTMENTS
Capital expenditures (30,889) (26,529)
Acquisitions (16,100) --
Investments in Interactive media (12,573) --
Other, net (902) (79)
-------- --------
Net cash used for investments (60,464) (26,608)
FINANCING
Purchase of treasury shares -- (21,793)
Net borrowings (payments) on debt 14,338 (16,801)
Payment of dividends on stock (8,310) (7,103)
Net proceeds from exercise of stock options 227 512
-------- --------
Net cash provided by (used for) financing 6,255 (45,185)
Net increase (decrease) in cash and temporary cash investments (20,671) 309
Cash and temporary cash investments at beginning of period 45,593 19,451
-------- --------
Cash and temporary cash investments at end of period $ 24,922 $ 19,760
======== ========
SUPPLEMENTAL DISCLOSURES
Interest paid, net of amounts capitalized $ 25,570 $ 17,884
Income taxes paid, net of refunds $ 45,104 $ (193)
-------- --------
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
3
<PAGE> 6
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, 1999 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, 2000 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2000. 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, 1999.
Certain amounts for the prior period have been reclassified to conform
to the current year presentation, including the reclassification of
prior year data to reflect segment operations of the Interactive media
segment.
(2) The following table sets forth the reconciliation between weighted
average shares used for calculating basic and diluted earnings per
share for the three months ended March 31, 2000 and 1999 (in
thousands):
<TABLE>
<CAPTION>
Three months ended March 31, 2000 1999
-------- ---------
<S> <C> <C>
Weighted average shares for basic earnings per share 118,715 118,331
Effect of employee stock options 317 685
-------- ---------
Weighted average shares for diluted earnings per share 119,032 119,016
-------- ---------
</TABLE>
4
<PAGE> 7
(3) Net operating revenues, earnings from operations, depreciation and
amortization and operating cash flow by industry segment are shown
below (in thousands):
<TABLE>
<CAPTION>
Three months ended March 31, 2000 1999
--------- ---------
<S> <C> <C>
NET OPERATING REVENUES
Broadcast $ 152,975 $ 131,255
Newspaper publishing 206,117 191,344
Interactive media 2,187 1,259
Other 3,219 2,762
--------- ---------
Total net operating revenues $ 364,498 $ 326,620
========= =========
EARNINGS FROM OPERATIONS
Broadcast $ 31,653 $ 21,479
Newspaper publishing 43,729 38,881
Interactive media (3,545) (1,244)
Other (1,508) (1,718)
Corporate expenses (11,091) (8,157)
--------- ---------
Total earnings from operations $ 59,238 $ 49,241
========= =========
DEPRECIATION AND AMORTIZATION
Broadcast $ 27,991 $ 24,525
Newspaper publishing 15,255 14,848
Interactive media 237 101
Other 817 665
Corporate 1,019 833
--------- ---------
Total depreciation and amortization $ 45,319 $ 40,972
========= =========
OPERATING CASH FLOW
Broadcast $ 59,644 $ 46,004
Newspaper publishing 58,984 53,729
Interactive media (3,308) (1,143)
Other (691) (1,053)
Corporate (10,072) (7,324)
--------- ---------
Total operating cash flow $ 104,557 $ 90,213
========= =========
</TABLE>
5
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS)
The Company is an owner and operator of 18 television stations and
publisher of seven daily newspapers. The following table sets forth the
Company's major media assets by segment as of March 31, 2000:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Television Broadcasting
- -------------------------------------------------------------------------------------------------------------------------
Network
Market Market Rank(a) Station Affiliation Status Acquired
- ---------------------------- ------------------- ------------- ------------- --------------- ----------------------------
<S> <C> <C> <C> <C> <C>
Dallas/Fort Worth 7 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 Owned(c) March 2000(c)
Phoenix 17 KTVK IND Owned November 1999
Phoenix 17 KASW WB Owned(c) March 2000(c)
St. Louis 21 KMOV CBS Owned June 1997
Portland 23 KGW NBC Owned February 1997
Charlotte 28 WCNC NBC Owned February 1997
San Antonio 37 KENS CBS Owned October 1997
New Orleans 41 WWL CBS Owned June 1994
Hampton/Norfolk 42 WVEC ABC Owned February 1984
Louisville 48 WHAS ABC Owned February 1997
Tulsa 58 KOTV CBS Owned February 1984
Austin 61 KVUE ABC Owned June 1999
Tucson 72 KMSB FOX Owned February 1997
Tucson 72 KTTU UPN LMA February 1997
Spokane 78 KREM CBS Owned February 1997
Spokane(b) 78 KSKN UPN/WB LMA February 1997
Boise 125 KTVB NBC Owned February 1997
- ---------------------------- ------------------- ------------- ------------- --------------- ----------------------------
- ---------------------------------------- ----------------------------- ----------------- ---------------- ---------------
Newspaper Publishing
- ---------------------------------------- ----------------------------- ----------------- ---------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
Daily Sunday
Newspaper Location Acquired Circulation(e) Circulation(e)
- ---------------------------------------- ----------------------------- ----------------- ---------------- ---------------
<S> <C> <C> <C> <C>
The Dallas Morning News
("TDMN") Dallas, TX (d) 523,099 783,944
The Providence Journal ("PJ") Providence, RI February 1997 166,888 237,629
The Press-Enterprise ("PE") Riverside, CA July 1997 173,132 180,008
Messenger-Inquirer Owensboro, KY January 1996 31,917 34,824
The Eagle Bryan-College Station, TX December 1995 24,620 28,633
Denton Record-Chronicle Denton, TX June 1999 15,967 18,808
The Gleaner Henderson, KY March 1997 11,109 13,044
- ---------------------------------------- ----------------------------- ----------------- ---------------- ---------------
- ----------------------------------- -------------------------------------------------------------------------------------
Other
- ----------------------------------- -------------------------------------------------------------------------------------
Company Description
- ----------------------------------- -------------------------------------------------------------------------------------
Northwest Cable News ("NWCN") Cable news network
offering regional news distributed to
approximately 2 million homes in the Pacific
Northwest
Texas Cable News ("TXCN") Cable news network offering regional news in Texas beginning January 1, 1999
- ----------------------------------- -------------------------------------------------------------------------------------
</TABLE>
(a) Market rank is based on the relative size of the television market, or
Designated Market Area ("DMA"), among the 210 generally recognized DMAs
in the United States, based on November 1999 Nielsen estimates.
(b) The primary affiliation is with UPN. The WB network is currently a
secondary affiliation.
(c) Belo acquired KONG-TV and KASW-TV, previously operated as LMAs, on
March 1, 2000 for $16,100 in cash.
(d) The first issue of The Dallas Morning News was published by Belo on
October 1, 1885.
(e) Average paid circulation for the six months ended March 31, 2000,
according to the Audit Bureau of Circulation's FAS-FAX report, except
for The Providence Journal and The Gleaner, for which circulation data
is for the six months ended September 30, 1999; and except for the
Denton Record-Chronicle, for which circulation data is taken from the
Certified Audit of Circulations Report for the twelve-month period
ended December 31, 1999 (unaudited).
6
<PAGE> 9
RESULTS OF OPERATIONS
Consolidated Results of Operations
The Company recorded net earnings for the first quarter of 2000 of $15,393 (13
cents per share) compared with $12,590 (11 cents per share) for the first
quarter of 1999. First quarter 2000 net earnings were higher than the comparable
1999 quarter due to higher revenues that were partially offset by higher
operating costs, primarily for salaries, wages and employee benefits.
Depreciation and amortization expense for the first quarter of 2000 ($45,319)
was 10.6 percent higher than the first quarter of 1999 ($40,972), due to prior
year capital expenditures and the acquisitions of KVUE-TV, the Denton
Record-Chronicle, and KTVK-TV and KASW-TV, offset somewhat by the dispositions
of KXTV, KASA-TV, KHNL-TV and KFVE-TV.
Interest expense for the first quarter of 2000 ($31,480) was 18.5 percent higher
than the first quarter of 1999 ($26,570), reflecting higher borrowings due to
acquisitions and higher weighted average interest rates.
The effective tax rate for the first quarter of 2000 was 45.8 percent, compared
with 47.3 percent for the first quarter of 1999.
Segment Results of Operations
To enhance comparability of the Company's results of operations for the quarters
ended March 31, 2000 and 1999, certain information below is presented on an "as
adjusted" basis and includes the acquisitions of KVUE-TV, the Denton
Record-Chronicle, KTVK-TV and KASW-TV and the dispositions of KXTV, KASA-TV,
KHNL-TV and KFVE-TV as though each had occurred at the beginning of the
respective periods presented. Additionally, the prior year segments have been
restated to reflect the reclassification of Belo's interactive businesses to the
Interactive media operating segment.
<TABLE>
<CAPTION>
As Reported As Adjusted
(in thousands) (in thousands)
Three months ended March 31, Three months ended March 31,
--------------------------------- ---------------------------------
2000 1999 % Chg. 2000 1999 % Chg.
---------- ---------- ------ ---------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Net operating revenues
Broadcast $ 152,975 $ 131,255 16.5% $ 152,975 $ 140,815 8.6%
Newspaper publishing 206,117 191,344 7.7% 206,117 194,060 6.2%
Interactive media 2,187 1,259 73.7% 2,187 1,495 46.3%
Other 3,219 2,762 16.5% 3,219 2,762 16.5%
--------- ---------- ---------- ----------
Segment revenues $ 364,498 $ 326,620 11.6% $ 364,498 $ 339,132 7.5%
========== ========== ========== ==========
Operating cash flow
Broadcast $ 59,644 $ 46,004 29.6% $ 59,644 $ 50,630 17.8%
Newspaper publishing 58,984 53,729 9.8% 58,984 53,794 9.6%
Interactive media (3,308) (1,143) (189.4)% (3,308) (1,034) (219.9)%
Other (691) (1,053) 34.4% (691) (1,053) 34.4%
----------- ----------- ----------- ----------
Segment operating cash flow $ 114,629 $ 97,537 17.5% $ 114,629 $ 102,337 12.0%
========== ========== ========== ==========
</TABLE>
The discussion that follows compares segment operations on an "as adjusted"
basis only.
7
<PAGE> 10
Broadcast Division
Broadcast revenues for the first quarter of 2000 were $152,975, an increase of
8.6 percent compared with first quarter 1999 revenues of $140,815. Advertising
revenues in 2000 were favorably impacted by the broadcast of the Super Bowl on
Belo's four ABC television stations, political revenues of just over $4 million
and .com advertising of about $4 million. The strongest revenue performance was
recorded at the Company's large-market stations in Dallas/Fort Worth,
Seattle/Tacoma and Houston. Other stations reporting strong revenue growth were
in the Phoenix, St. Louis, Portland, Charlotte, San Antonio and Austin markets.
Broadcast operating cash flow margins improved to 39 percent in the first
quarter of 2000 from 36 percent in the first quarter of 1999. Broadcast
operating cash flow increased 17.8 percent, from $50,630 in the first quarter of
1999 to $59,644 in the first quarter of 2000. Cash operating expenses were up
3.5 percent, primarily due to higher salaries, wages and benefits.
Newspaper Publishing Division
Newspaper publishing revenues increased 6.2 percent in the first quarter of 2000
to $206,117 as compared to the prior year period of $194,060. The Dallas Morning
News reported an increase in total revenues of approximately 4 percent from the
first quarter of 1999. General advertising revenues increased approximately 31
percent due to strength in the telecommunications, technology and financial
services categories. Retail advertising revenue was approximately 4.7 percent
less in the first quarter of 2000 as compared with the first quarter of 1999,
due primarily to lower spending by large department stores. Classified revenues
were relatively flat compared to the prior year. Improvement in classified
employment linage, which began in the fourth quarter of 1999, accelerated in the
first quarter of 2000, finishing the quarter down slightly from the first
quarter of 1999.
The Providence Journal reported an increase in first quarter 2000 revenues of
approximately 6 percent and an increase in operating cash flow of more than 18
percent as compared to the prior year period. Full-run retail, classified and
general revenues were all higher than first quarter 1999.
The Press-Enterprise reported an increase in revenues of 19.4 percent and an
increase in cash flow of approximately 75 percent during the first quarter of
2000 as compared with the first quarter of 1999. Revenues improved in all major
advertising categories with the most significant improvement in classified
advertising.
Newspaper publishing operating cash flow margins during the first quarters of
2000 and 1999 were 28.6 percent and 27.7 percent, respectively. Newspaper
publishing operating cash flow increased 9.6 percent during the first quarter of
2000 as compared to the first quarter of 1999. Cash operating expenses were up
approximately 4.9 percent. Higher expenses related to incentive-based
compensation, revenue-enhancing initiatives, promotion and distribution were
partially offset by lower newsprint expense, primarily due to lower prices.
Newsprint prices are, however, expected to be higher for the remainder of the
year due to the effect of industry-wide price increases implemented April 1,
2000.
Interactive Media
Interactive media revenues increased 46.3 percent, from $1,495 in the first
quarter of 1999 to $2,187 in the first quarter of 2000, reflecting the Company's
increased focus on the new segment and the addition of a dedicated management
team in mid-1999. The Interactive media segment reported operating cash flow
deficits of $3,308 and $1,034 in the first quarters of 2000 and 1999,
respectively, reflecting increased staffing and levels of operations.
Other
Other revenues consist of Belo's regional cable news operations, NWCN and TXCN.
Other revenues increased from $2,762 in the first quarter of 1999 to $3,219 in
the first quarter of 2000, an improvement of 16.5 percent, reflecting increased
revenue at both NWCN and TXCN. Cash expenses increased only 2.5 percent,
resulting in a 34.4 percent decrease in cash operating losses. NWCN's positive
cash flow in the first quarter of 2000 was more than offset by continued TXCN
start-up losses.
8
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operations, bank borrowings and term debt are the Company's
primary sources of liquidity. During the first quarter of 2000, net cash
provided by operations was $33,538, compared with $72,102 for the same period in
1999. Tax payments in the first quarter of 2000 included $35,600 for taxes due
on the sale of the Company's interest in Falcon Communications in the fourth
quarter of 1999. Total debt increased $14,338 from December 31, 1999 to March
31, 2000 due primarily to cash payments of $16,100 for the KONG-TV and KASW-TV
acquisitions.
At March 31, 2000, the Company had $1 billion in fixed-rate debt securities as
follows: $250,000 of 6 7/8 percent Senior Notes due 2002; $300,000 of 7 1/8
percent Senior Notes due 2007; $200,000 of 7 3/4 percent Senior Debentures due
2027; and $250,000 of 7 1/4 percent Senior Debentures due 2027. 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, 2000, the Company had a $1 billion variable-rate revolving credit
agreement with a syndicate of 26 banks under which borrowings were $819,000.
Borrowings under the agreement mature upon expiration of the agreement on August
29, 2002, with one year extensions possible through August 29, 2004, at the
request of the Company and with the consent of the participating banks. In
addition, the Company had $45,000 of short-term unsecured notes outstanding at
March 31, 2000. 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, 2000, the
Company was in compliance with all debt covenant requirements.
The Company paid first quarter 2000 dividends of $8,310 or 7 cents per share on
Series A and Series B common stock outstanding, compared with $7,103 or 6 cents
per share in the first quarter of 1999.
First quarter 2000 capital expenditures were $30,889. Approximately $14,500 of
this amount represents payments on a new press at TDMN. Substantially all of the
remaining expenditures were for broadcast equipment purchases including those
for the conversion to digital television, and other publishing equipment
purchases.
Also during the first three months of 2000, Belo Interactive made additional
investments totaling $12,573 in certain companies that provide solutions for
strategy implementation. These investments were funded by cash provided by
operations.
Forward-Looking Statements
Statements in this Form 10-Q concerning the Company's future financings, as well
as any other statements concerning the Company's business outlook or future
economic performance, anticipated profitability, revenues, expenses, cash flows
or other financial and non-financial items that are not historical facts, are
"forward-looking statements" as the term is defined under applicable Federal
Securities Laws. Forward-looking statements are subject to risks, uncertainties
and other factors that could cause actual results to differ materially from
those statements.
Such risks, uncertainties and factors include, but are not limited to, changes
in capital market conditions and prospects; other factors such as changes in
advertising demand, interest rates and newsprint prices; technological changes;
development of Internet commerce; industry cycles; changes in pricing or other
actions by competitors and suppliers; regulatory changes; the effects of Company
acquisitions and dispositions; and general economic conditions, as well as other
risks detailed in the Company's filings with the Securities and Exchange
Commission ("SEC"), including the Annual Report on Form 10-K and in the
Company's periodic press releases.
9
<PAGE> 12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
No disclosure required.
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
results of operations, liquidity 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.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
3.1 * Certificate of Incorporation of the Company (Exhibit 3.1 to the
Company's Amended Annual Report on Form 10-K dated March 15, 2000
(the "1999 Form 10-K"))
3.2 * Certificate of Correction to Certificate of Incorporation dated
May 13, 1987 (Exhibit 3.2 to the 1999 Form 10-K)
3.3 * Certificate of Designation of Series A Junior Participating
Preferred Stock of the Company dated April 16, 1987 (Exhibit 3.3
to the 1999 Form 10-K)
3.4 * Certificate of Amendment of Certificate of Incorporation of the
Company dated May 4, 1988 (Exhibit 3.4 to the 1999 Form 10-K)
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
3.5 * Certificate of Amendment of Certificate of Incorporation of
the Company dated May 3, 1995 (Exhibit 3.5 to the "1999 Form
10-K")
3.6 * Certificate of Amendment of Certificate of Incorporation of
the Company dated May 15, 1998 (Exhibit 3.6 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 1998 (the "2nd Quarter 1998 Form 10-Q"))
3.7 * Amended Certificate of Designation of Series A Junior
Participating Preferred Stock of the Company dated May 4, 1988
(Exhibit 3.7 to the 1999 Form 10-K)
3.8 * Certificate of Designation of Series B Common Stock of the
Company dated May 4, 1988 (Exhibit 3.8 to the 1999 Form 10-K)
3.9 * Amended and Restated Bylaws of the Company, effective February
10, 2000 (Exhibit 3.9 to the 1999 Form 10-K)
4.1 Certain rights of the holders of the Company's Common Stock
are set forth in Exhibits 3.1-3.9 above
4.2 * Specimen Form of Certificate representing shares of the
Company's Series A Common Stock (Exhibit 4.2 to the Company's
Annual Report on Form 10-K dated March 18, 1998 (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 1999 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)
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
(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 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)
10.2 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) First Amendment to A. H. Belo Corporation Employee
Savings and Investment Plan (Exhibit 10.3(1)(b) to
the Company's Annual Report on Form 10-K dated March
17, 1999 (the "1998 Form 10-K"))
* (c) Second Amendment to A. H. Belo Corporation Employee
Savings and Investment plan (Exhibit 10.3(1)(c) to
the 1998 Form 10-K)
* (d) 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 10.2(2)(c) to the 1999 Form 10-K)
* (d) Amendment No. 8 to 1986 Long-Term Incentive Plan
(Exhibit 10.3(2)(d) to the 2nd Quarter 1998 Form
10-Q)
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
~(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)
* (a) Amendment to 1995 Executive Compensation Plan, dated
July 21, 1998 (Exhibit 10.3(3)(a) to the 2nd Quarter
1998 Form 10-Q)
~(4) A. H. Belo Corporation Supplemental Executive
Retirement Plan:
* Belo Supplemental Executive Retirement Plan as Amended
and Restated Effective January 1, 2000 (Exhibit 10.2(5)
to the 1999 form 10-K)
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
During the quarter covered by this report, there were no reports on
Form 8-K filed.
13
<PAGE> 16
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 9, 2000 By: /s/ DUNIA A. SHIVE
------------------------------
Dunia A. Shive
Senior Vice President/
Chief Financial Officer
14
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------- ----------- ----------
<S> <C> <C>
3.1 * Certificate of Incorporation of the Company (Exhibit 3.1 to the Company's Amended
Annual Report on Form 10-K dated March 15, 2000 (the "1999 Form 10-K")) N/A
3.2 * Certificate of Correction to Certificate of Incorporation dated May 13, 1987
(Exhibit 3.2 to the 1999 Form 10-K) 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 1999 Form 10-K) N/A
3.4 * Certificate of Amendment of Certificate of Incorporation of the Company
dated May 4, 1988 (Exhibit 3.4 to the 1999 Form 10-K) N/A
3.5 * Certificate of Amendment of Certificate of Incorporation of the Company
dated May 3, 1995 (Exhibit 3.5 to the "1999 Form 10-K") N/A
3.6 * Certificate of Amendment of Certificate of Incorporation of the Company dated
May 15, 1998 (Exhibit 3.6 to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 1998 (the "2nd Quarter 1998 Form 10-Q")) N/A
3.7 * Amended Certificate of Designation of Series A Junior Participating Preferred
Stock of the Company dated May 4, 1988 (Exhibit 3.7 to the 1999 Form 10-K) N/A
3.8 * Certificate of Designation of Series B Common Stock of the Company dated
May 4, 1988 (Exhibit 3.8 to the 1999 Form 10-K) N/A
3.9 * Amended and Restated Bylaws of the Company, effective February 10, 2000
(Exhibit 3.9 to the 1999 Form 10-K) N/A
4.1 Certain rights of the holders of the Company's Common Stock are set forth in
Exhibits 3.1-3.9 above N/A
4.2 * Specimen Form of Certificate representing shares of the Company's Series A
Common Stock (Exhibit 4.2 to the Company's Annual Report on Form 10-K
dated March 18, 1998 (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 1999 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>
<PAGE> 18
<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 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>
<PAGE> 19
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------- ----------- ----------
<S> <C> <C>
10.2 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) First Amendment to A. H. Belo Corporation Employee Savings
and Investment Plan (Exhibit 10.3(1)(b) to the Company's
Annual Report on Form 10-K dated March 17, 1999 (the "1998
Form 10-K")) N/A
* (c) Second Amendment to A. H. Belo Corporation Employee Savings
and Investment plan (Exhibit 10.3(1)(c) to the 1998 Form 10-K) N/A
* (d) 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 10.2(2)(c)
to the 1999 Form 10-K) N/A
* (d) Amendment No. 8 to 1986 Long-Term Incentive Plan (Exhibit 10.3(2)(d)
to the 2nd Quarter 1998 Form 10-Q) 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
* (a) Amendment to 1995 Executive Compensation Plan, dated
July 21, 1998 (Exhibit 10.3(3)(a) to the 2nd Quarter 1998 Form 10-Q) N/A
~(4) A. H. Belo Corporation Supplemental Executive Retirement Plan:
* Belo Supplemental Executive Retirement Plan as Amended and
Restated Effective January 1, 2000 (Exhibit 10.2(5) to the 1999 form 10-K) N/A
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
During the quarter covered by this report, there were no reports on
Form 8-K filed.
<PAGE> 1
EXHIBIT 12
A.H. BELO CORPORATION
Computation of Ratio of Earnings to Fixed Charges
(Dollars in thousands)
<TABLE>
<CAPTION>
Three months ended
Year Ended December 31, March 31,
----------------------------------------- -------- -------------------
1995 1996 1997 1998 1999 1999 2000
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Earnings before income taxes
and the cumulative effect
of accounting charges $111,014 $144,040 $154,122 $130,460 $276,453 $ 23,888 $ 28,406
Add: Total fixed charges 32,089 29,009 94,069 112,082 116,032 27,959 32,778
Less: Interest capitalized 957 255 510 1,680 2,552 755 710
-------- -------- -------- -------- -------- -------- --------
Adjusted earnings $142,146 $172,794 $247,681 $240,862 $389,933 $ 51,092 $ 60,474
======== ======== ======== ======== ======== ======== ========
Fixed Charges:
Interest $ 30,944 $ 27,898 $ 91,288 $109,318 $113,160 $ 27,325 $ 32,190
Portion of rental expense
representative of the
interest factor (1) 1,145 1,111 2,781 2,764 2,872 634 588
-------- -------- -------- -------- -------- -------- --------
Total fixed charges $ 32,089 $ 29,009 $ 94,069 $112,082 $116,032 $ 27,959 $ 32,778
======== ======== ======== ======== ======== ======== ========
Ratio of Earnings to Fixed Charges 4.43 x 5.96 x 2.63 x 2.15 x 3.36 x 1.83 x 1.84 x
======== ======== ======== ======== ======== ======== ========
</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-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 24,922
<SECURITIES> 0
<RECEIVABLES> 235,820
<ALLOWANCES> (7,224)
<INVENTORY> 18,667
<CURRENT-ASSETS> 302,772
<PP&E> 1,176,390
<DEPRECIATION> (514,834)
<TOTAL-ASSETS> 3,950,919
<CURRENT-LIABILITIES> 205,136
<BONDS> 1,870,485
0
0
<COMMON> 198,447
<OTHER-SE> 1,201,023
<TOTAL-LIABILITY-AND-EQUITY> 3,950,919
<SALES> 0
<TOTAL-REVENUES> 364,498
<CGS> 0
<TOTAL-COSTS> 259,941
<OTHER-EXPENSES> 45,319
<LOSS-PROVISION> 2,338
<INTEREST-EXPENSE> 31,480
<INCOME-PRETAX> 28,406
<INCOME-TAX> 13,013
<INCOME-CONTINUING> 15,393
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,393
<EPS-BASIC> 0.13
<EPS-DILUTED> 0.13
</TABLE>
