In Depth

Belo Reveals Details of TV-Newspaper Split

Belo Chairman-CEO Robert Decherd expressed confidence that the plan to split the group’s assets into separate TV and newspaper companies will be good for both entities.

The split “will allow us to focus more narrowly and efficiently on our two discrete businesses,” Mr. Decherd said Wednesday at a presentation of Belo strategic overviews in New York. “This transaction will provide shareholders with greater insight into each business, allowing investors to make decisions most appropriate for their portfolio.

“In the long term, we believe that [TV-centric] Belo Corp. and [newspaper-centric] A.H. Belo will be better positioned as stand-alone companies, each possessing outstanding assets in highly attractive markets capable of supporting future growth and innovation, which will lead to greater shareholder value creation,” he said.

Dunia Shive, who will be president and CEO of Belo Corp., said, “Belo Corp. owns market-leading and diversified assets that deliver strong revenue, while having the ability to withstand regional economic volatility and fluctuations in network performance. These highly rated television stations have won numerous national journalism awards and our strong local Web sites will continue to deliver above-average revenue and audience growth.”

When the spinoff is complete, Belo Corp. will be one of the nation's largest pure-play, publicly traded television companies, with annual revenues of approximately $775 million. The company owns and operates 20 TV stations and their associated Web sites, reaching more than 14% of U.S. TV households in 15 markets. The company also has leveraged its local television assets to create regional cable news channels in Texas and the Northwest.

Belo Corp.'s board of directors recently set the close of business Jan. 25 as the record date and set a stock dividend distribution ratio of 0.20 A.H. Belo shares for each share of Belo Corp. Shareholders will receive cash in lieu of any fractional shares. The distribution of A.H. Belo common stock is expected to occur Feb. 8 to Belo Corp. shareholders of record.

This distribution ratio translates into approximately 17.6 million and 2.9 million shares, respectively, of A.H. Belo Series A and A.H. Belo Series B shares outstanding at the spinoff. Series A common stock of A.H. Belo will begin regular trading on the New York Stock Exchange under the ticker symbol AHC on Feb. 11 and Series A common stock of Belo Corp. will continue to trade on the NYSE under the ticker symbol BLC. There will be no trading market for the shares of A.H. Belo Series B common stock and those shares will not be listed on any exchange.

Belo Corp. plans to maintain a disciplined focus on short- to intermediate-term debt repayment. Its initial annual dividend will likely be $0.30 per share, subject to board approval. The company expects to manage capital expenditures to approximately $30 million annually.

During the conference Wednesday, management provided preliminary 2007 earnings information. The television group’s total revenues for the full year increased 0.8% in 2007 while fourth-quarter 2007 total revenues decreased 2.4% versus fourth-quarter 2006. Total television spot revenues decreased 1.1% in 2007 and 5% in the fourth quarter. Political revenues totaled $14.6 million for the full year, compared with $47 million in 2006; fourth-quarter 2007 political revenues were $8.4 million versus $31.6 million in fourth-quarter 2006. Advertising revenues from the TV group's Web sites increased 41% in 2007 and 43% in the fourth quarter.