Television Company Belo Corp. (BLC) Reports Earnings for Second Quarter 2012

Television Company Belo Corp. (BLC) Reports Earnings for Second Quarter 2012

DALLAS, July 27, 2012 /PRNewswire/ -- Television company Belo Corp. (NYSE: BLC) today reported net earnings per share of $0.24 in the second quarter of 2012 compared to net earnings per share of $0.17 in the second quarter of 2011.

Dunia A. Shive, Belo's president and Chief Executive Officer, said, "Second quarter total revenue increased 7 percent compared to the second quarter of 2011. Political revenue totaled $9.5 million, with $5 million attributable to the Senate primary in Texas. The Company also received meaningful political revenue in Charlotte, Norfolk and St. Louis. Core spot revenue was up in many of the Company's markets in the second quarter of 2012, but was down slightly overall compared to last year due to softness in national spot in certain markets. Third quarter total spot revenue is currently pacing up in the high-teens with strong core and political revenue.

"Combined station and corporate operating costs were 1 percent lower when compared to the second quarter of last year. Our station adjusted EBITDA grew 23 percent compared to the second quarter of 2011 and our station adjusted EBITDA margin was 41 percent.

"During the second quarter, the Company opportunistically repurchased over 1 million shares in the open market at an average price of $5.81."

Second Quarter in Review

Operating Results

The Company generated total revenue of $178 million in the second quarter of 2012, which was $11 million, or 7 percent, higher than the second quarter of 2011.

Political revenue in the second quarter of 2012 totaled $9.5 million, an $8.3 million increase compared to the second quarter of 2011. Total spot revenue, including political, was up 6 percent in the second quarter of 2012 compared to the second quarter of 2011. Total spot revenue, excluding political, was down 0.5 percent with a 2.3 percent increase in local spot revenue and a 5.5 percent decrease in national spot revenue.

Other revenue, which is comprised primarily of Internet advertising, retransmission revenue, and barter and trade advertising, was up 12 percent in the second quarter of 2012 due primarily to double-digit increases in both Internet and retransmission revenue.

Station salaries, wages and employee benefits increased $1.9 million, or 3.5 percent, during the second quarter of 2012 versus the second quarter of 2011 due primarily to annual merit increases for employees and higher accrued performance-based bonus expense. Station programming and other operating costs were down $4.5 million, or 8.5 percent, in the second quarter of 2012 compared to the second quarter of 2011 due primarily to lower syndicated programming expense.

Corporate

Corporate operating costs of $8.6 million in the second quarter of 2012 were $1.9 million higher than the second quarter of 2011 due primarily to higher accrued performance-based bonus expense and investments in interactive initiatives. The Company's combined station and corporate operating costs were 1 percent lower compared to the second quarter of 2011.

Other Items

Belo's depreciation expense totaled $7.5 million in the second quarter of 2012, down from $7.7 million in the second quarter of 2011.

The Company's interest expense was $17.7 million in the second quarter of 2012 compared to $18.1 million in the second quarter of 2011.

Income tax expense increased $5.5 million in the second quarter of 2012 compared to the second quarter of 2011 due primarily to higher pre-tax earnings.

Total debt at June 30, 2012 was $887 million and consisted entirely of fixed-rate debt. Of this amount, $176 million is due May 2013 and is therefore classified as current on the Company's June 30, 2012 balance sheet. Also as of June 30, 2012, the Company had $126 million in cash and temporary cash investments and had nothing drawn on its $200 million revolving credit facility, which does not expire until August 2016. The facility may be used, along with some level of cash, to retire the May 2013 notes.

The Company's total leverage ratio, as defined in the Company's credit facility, was 3.9 times at June 30, 2012, and 3.4 times when including the Company's cash. Belo invested $6.9 million in capital expenditures in the second quarter of 2012.

Non-GAAP Financial Measures

A reconciliation of station adjusted EBITDA to earningsfrom operations and a reconciliation of net earnings to pro forma net earnings are set forth in an exhibit to this release.

Outlook

Looking forward, Shive said, "Third quarter total spot revenue is currently pacing up in the high-teens. We currently expect other revenue, which includes Internet and retransmission revenue, to be up in the low double-digits during the third quarter. As a result, we currently expect the percentage growth in total revenue for the third quarter of 2012 to be up in the mid-to-high teens compared to the prior year, depending on the strength of political. Combined station and corporate operating costs for the third quarter of 2012 are currently expected to be up about 6 percent compared to the prior year's quarter due primarily to higher variable costs associated with higher revenue."

A conference call to discuss this release and other matters of interest to shareholders and analysts will follow at 10:00 a.m. CDT this morning. The conference call will be simultaneously webcast on Belo Corp.'s website (www.belo.com/invest). Following the conclusion of the webcast, a replay of the conference call will be archived on Belo's website. To access the listen-only conference lines, dial 1-800-553-5260. A replay line will be open from 12:00 noon CDT on July 27 until 11:59 p.m. CDT on August 10. To access the replay, dial 800-475-6701 or 320-365-3844. The access code for the replay is 253026.

About Belo Corp.

Television company Belo Corp. (NYSE: BLC) owns and operates 20 television stations (nine in the top 25 markets) and their associated websites. Belo stations, which include affiliations with ABC, CBS, NBC, FOX, and the CW, reach more than 14 percent of U.S. television households in 15 highly-attractive markets. Belo stations rank first or second in nearly all of their local markets. Additional information is available at www.belo.com or by contacting Paul Fry, vice president/Investor Relations & Treasury Operations, at 214-977-4465.

Statements in this communication concerning Belo's business outlook or future economic performance, anticipated profitability, revenues, expenses, capital expenditures, dividends, investments, future financings, impairments, pension matters, and 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, uncertainties regarding changes in capital market conditions and prospects, and other factors such as changes in advertising demand, interest and discount rates and programming and production costs; changes in viewership patterns and demography, and actions by Nielsen and its competitors; changes in the network-affiliate business model for broadcast television; technological changes, and the development of new systems and devices to distribute and consume television and other audio-visual content; changes in the ability to secure, and in the terms of, carriage of Belo programming on cable, satellite, telecommunications and other program distribution methods; development of Internet commerce; industry cycles; changes in pricing or other actions by competitors and suppliers; Federal Communications Commission and other regulatory, tax and legal changes, including changes regarding spectrum; adoption of new accounting standards or changes in existing accounting standards by the Financial Accounting Standards Board or other accounting standard-setting bodies or authorities; the effects of Company acquisitions, dispositions, co-owned ventures, and investments; pension plan matters; general economic conditions; and significant armed conflict, as well as other risks detailed in Belo's other public disclosures and filings with the SEC including Belo's Annual Report on Form 10-K.



Belo Corp.
Consolidated Statements of Operations

Three months ended Six months ended
June 30, June 30,
-------- --------
In thousands, except per share amounts 2012 2011 2012 2011
-------------------------------------- ---- ---- ---- ----
(unaudited) (unaudited) (unaudited) (unaudited)

Net Operating Revenues $177,619 $166,379 $333,517 $317,849

Operating Costs and Expenses
Station salaries, wages and employee
benefits 56,437 54,525 112,136 108,361
Station programming and other operating
costs 48,074 52,565 93,391 102,761
Corporate operating costs 8,550 6,692 16,282 12,991
Pension settlement charge and contribution
reimbursements - - - 20,466
Depreciation 7,472 7,707 14,934 15,631
Total operating costs and
expenses 120,533 121,489 236,743 260,210

Earnings from
operations 57,086 44,890 96,774 57,639

Other Income and (Expense)
Interest expense (17,714) (18,050) (35,376) (36,033)
Other income, net 1,378 649 1,879 829
Total other income and
(expense) (16,336) (17,401) (33,497) (35,204)

Earnings before income taxes 40,750 27,489 63,277 22,435
Income tax expense 14,917 9,402 23,152 8,662
------ ----- ------ -----

Net earnings 25,833 18,087 40,125 13,773

Less: Net (loss) attributable to noncontrolling interests (98) - (98) -
--- --- --- ---

Net earnings attributable to Belo Corp. $25,931 $18,087 $40,223 $13,773
======= ======= ======= =======


Net earnings per share - Basic $0.24 $0.17 $0.38 $0.13
===== ===== ===== =====

Net earnings per share - Diluted $0.24 $0.17 $0.38 $0.13
===== ===== ===== =====

Weighted average shares outstanding
Basic 103,774 103,626 103,854 103,515
Diluted 104,068 104,022 104,163 103,917

Dividends declared per share $ - $0.05 $0.08 $0.05
=== ===== ===== =====




Belo Corp.
Consolidated Condensed Balance Sheets


June 30, December 31,
In thousands 2012 2011
------------ ---- ----
(unaudited)
Assets
Current
assets
Cash and
temporary cash
investments $125,669 $61,118
Accounts
receivable,
net 140,018 149,584
Income tax
receivable 14 31,629
Other
current
assets 20,591 16,692
Total current
assets 286,292 259,023

Property, plant
and equipment,
net 151,356 157,115
Intangible
assets, net 725,399 725,399
Goodwill 423,873 423,873
Other
assets 40,355 46,195

Total assets $1,627,275 $1,611,605
========== ==========


Liabilities and Shareholders' Equity
Current
liabilities
Current portion
of long-term
debt $175,810 $ -
Accounts
payable 17,839 19,677
Accrued
expenses 36,468 34,961
Short-term
pension
obligation 19,737 19,300
Accrued
interest
payable 10,106 10,378
Income
taxes
payable 5,814 12,922
Dividends
payable - 5,189
Deferred
revenue 5,427 3,435
Total current
liabilities 271,201 105,862

Long-term
debt 711,638 887,003
Deferred income
taxes 251,977 244,361
Pension
obligation 83,968 93,012
Other
liabilities 11,763 14,164
Total
shareholders'
equity 296,728 267,203

Total liabilities and shareholders' equity $1,627,275 $1,611,605
========== ==========




Belo Corp.
Non-GAAP to GAAP Reconciliations


Station Adjusted EBITDA
Three months ended Six months ended
June 30, June 30,
-------- --------
In thousands (unaudited) 2012 2011 2012 2011
----------------------- ---- ---- ---- ----


Station Adjusted EBITDA (1) $73,108 $59,289 $127,990 $106,727
Corporate operating costs (8,550) (6,692) (16,282) (12,991)
Depreciation (7,472) (7,707) (14,934) (15,631)
Pension settlement charge and
contribution reimbursements - - - (20,466)
Earnings from operations $57,086 $44,890 $96,774 $57,639


Note 1: Belo's management uses Station Adjusted EBITDA as the primary measure of profitability to evaluate operating
performance and to allocate capital resources and bonuses to eligible operating company employees. Station
Adjusted EBITDA represents the Company's earnings from operations before interest expense, income taxes,
depreciation, amortization, impairment charges, pension settlement charge and contribution reimbursements, and
corporate operating costs. Other income (expense), net is not allocated to television station earnings from
operations because it consists primarily of equity in earnings (losses) from investments in partnerships and
joint ventures and other non-operating income (expense).



Pro Forma Net Earnings
In thousands, except per share amounts (unaudited)
Six months ended Six months ended
June 30, 2012 June 30, 2011
------------- -------------

Earnings EPS Earnings EPS
-------- --- -------- ---

Net earnings attributable to Belo Corp. $40,223 $0.38 $13,773 $0.13

Pension settlement charge and contribution
reimbursements, net of tax - - 13,323 0.13

Pro forma net earnings attributable to Belo Corp. $40,223 $0.38 $27,096 $0.26
======= =======

Note 2: There were no pro forma adjustments for the three months ended June 30, 2012 or 2011.


SOURCE Belo Corp.

Belo Corp.

Web Site: http://www.belo.com


-------
Profile: intent