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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-K
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED: DECEMBER 31, 2001
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NO. 1-8598
BELO CORP.
(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
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- -------------------
SERIES A COMMON STOCK, $1.67 PAR VALUE NEW YORK STOCK EXCHANGE
PREFERRED SHARE PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
Securities registered pursuant to
Section 12(g) of the Act: SERIES B COMMON STOCK, $1.67 PAR VALUE
--------------------------------------
(Title of class)
Indicate by check mark whether the 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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. | |
The aggregate market value of the registrant's voting stock held by
nonaffiliates on February 28, 2002, based on the closing price for the
registrant's Series A Common Stock on such date as reported on the New York
Stock Exchange, was approximately $2,438,621,865. *
Shares of Common Stock outstanding at February 28, 2002: 111,098,946 shares.
(Consisting of 92,863,636 shares of Series A Common Stock and 18,235,310 shares
of Series B Common Stock.)
* For purposes of this calculation, the market value of a share of Series B
Common Stock was assumed to be the same as the share of Series A Common
Stock into which it is convertible.
Documents incorporated by reference:
Portions of the registrant's Proxy Statement relating to the Annual Meeting of
Shareholders to be held May 8, 2002 are incorporated by reference into Part III
(Items 10, 11, 12 and 13). Also incorporated by reference into Part II are
certain items included in the Company's 2001 Annual Report to Shareholders
(Items 5, 6, 7, 7A and 8).
BELO CORP.
FORM 10-K
TABLE OF CONTENTS
PAGE
----
PART I
Item 1. Business....................................................... 1
Item 2. Properties..................................................... 11
Item 3. Legal Proceedings.............................................. 12
Item 4. Submission of Matters to a Vote of Security Holders............ 12
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters...................................................... 12
Item 6. Selected Financial Data........................................ 12
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 12
Item 7A. Quantitative and Qualitative Disclosures about Market Risks.... 12
Item 8. Financial Statements and Supplementary Data.................... 13
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure..................................... 13
PART III
Item 10. Directors and Executive Officers of the Registrant............. 13
Item 11. Executive Compensation......................................... 13
Item 12. Security Ownership of Certain Beneficial Owners and Management. 13
Item 13. Certain Relationships and Related Transactions................. 13
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K..................................................... 13
Signatures................................................................ 18
PART I
ITEM 1. BUSINESS
Belo Corp. ("Belo" or the "Company") is one of the nation's largest media
companies, with a diversified group of market-leading television broadcasting,
newspaper publishing, cable news and interactive media operations. A Fortune
1000 company with $1.4 billion in 2001 revenues, Belo operates news and
information franchises in some of America's most dynamic markets and regions.
The Company owns 19 television stations (six in the top 16 markets) that reach
13.9 percent of U.S. television households, and manages one television station
through a local marketing agreement ("LMA"). Belo also publishes four daily
newspapers with a combined daily circulation of approximately 900,000 copies and
a combined Sunday circulation of more than 1.2 million copies. In addition, Belo
owns or operates six cable news channels. Belo's Internet subsidiary, Belo
Interactive, Inc. ("Belo Interactive"), includes 34 Web sites, several
interactive alliances and a broad range of Internet-based products.
The Company believes the success of its media franchises is built upon
providing local and regional news and information and community service of the
highest caliber. These principles have attracted and built relationships with
viewers, readers and advertisers and have guided Belo's success for 160 years.
Note 13 to the Consolidated Financial Statements, which is included in
Belo's Annual Report to Shareholders, contains information about the Company's
industry segments for the years ended December 31, 2001, 2000 and 1999.
TELEVISION GROUP
Belo's Television Group is the nation's fifth largest non-network owned
station group based on audience share. The Company owns 19 television stations
and manages one station under an LMA. In the 15 markets in which the Company
operates, eight of Belo's stations are ranked number one and four are ranked
number two in "sign-on/sign-off" audience rating, based on November 2001 Nielsen
estimates. Belo has six stations in the top 16 markets and 14 stations in the
top 50 markets. Belo's stations collectively reach 13.9 percent of U.S.
television households.
Belo's stations are primarily concentrated in three high-growth regions:
Texas, the Northwest and the Southwest. Six of the Company's stations are
located in four of the fastest growing major metropolitan areas in the country:
- ABC affiliate WFAA-TV in Dallas/Fort Worth;
- CBS affiliate KHOU-TV in Houston;
- NBC affiliate KING-TV and independent KONG-TV in Seattle/Tacoma; and
- Independent KTVK-TV and WB affiliate KASW-TV in Phoenix.
The Company has a balanced portfolio of network-affiliated stations with
four ABC affiliates, four NBC affiliates and five CBS affiliates, and at least
one large market station associated with each network . In addition, Belo owns
two independent ("IND") stations, one Warner Brothers Network ("WB") affiliate,
one FOX affiliate and two United Paramount Network ("UPN") affiliates and
operates one additional UPN affiliate under an LMA. This balance provides
stability to Belo's revenue stream regardless of which network leads prime time.
Belo's television stations have been recognized with numerous local, state
and national awards for outstanding news coverage. Since 1957, Belo's television
stations have garnered 15 Alfred I. duPont-Columbia Awards, 12 George Foster
Peabody Awards and 2219 Edward R. Murrow Awards - the industry's most
prestigious honors.
The Company's television broadcasting operations began in 1950 with the
acquisition of WFAA shortly after the station began operations. In 1984, the
Company expanded its television operations with the purchase of stations in
Houston, Sacramento, Hampton/Norfolk and Tulsa. In June 1994 and February 1995,
the Company acquired stations in New Orleans and Seattle/Tacoma, respectively.
The Providence Journal Company acquisition in February
1
1997 added nine television stations, including NBC affiliate KING in
Seattle/Tacoma. In accordance with Federal Communications Commission ("FCC")
regulations, which at that time prohibited ownership of two or more stations in
a single market, Belo exchanged its UPN affiliate, KIRO-TV, in Seattle/Tacoma
for CBS affiliate KMOV-TV in St. Louis in June 1997. In October 1997, Belo
acquired CBS affiliate KENS-TV in San Antonio. In June 1999, Belo acquired
KVUE-TV, the ABC affiliate in Austin in exchange for KXTV, the Company's ABC
affiliate in Sacramento. KASA-TV (FOX) in Albuquerque and KHNL-TV (NBC) in
Honolulu were sold in October 1999, and KTVK (IND) in Phoenix was acquired in
November 1999. On March 1, 2000, Belo acquired KONG (IND) in Seattle/Tacoma and
KASW (WB) in Phoenix, which were previously operated by Belo under LMAs. At the
end of December 2000, Belo sold KOTV (CBS) in Tulsa. On October 1, 2001, Belo
purchased KSKN-TV, the UPN/WB affiliate in the Spokane, Washington television
market and on March 12, 2002, Belo purchased KTTU-TV, the UPN affiliate in
Tucson. Prior to the acquisitions, Belo operated KSKN and KTTU under LMAs.
The following table sets forth information for each of the Company's
stations (including stations with which it has an LMA) and their markets as of
December 31, 2001:
- ------------------------------------------------------------------------------------------------------------
Number of Station Station
Market Commercial Rank in Audience
Rank Year Network Stations in Market Share in
Market (1) Station Acquired Affiliation(2) Channel Market(3) (4) Market(5)
- ------------------------------------------------------------------------------------------------------------
Dallas/Fort Worth 7 WFAA 1950 ABC 8 15 1 13
Houston 11 KHOU 1984 CBS 11 16 2 12
Seattle/Tacoma 12 KING 1997 NBC 5 14 1 14
Seattle/Tacoma 12 KONG 2000 IND 16 14 6* 2
Phoenix 16 KTVK 1999 IND 3 12 3 9
Phoenix 16 KASW 2000 WB 61 12 6* 5
St. Louis 22 KMOV 1997 CBS 4 8 2* 14
Portland 23 KGW 1997 NBC 8 8 1* 13
Charlotte 27 WCNC 1997 NBC 36 8 3 9
San Antonio 37 KENS 1997 CBS 5 10 1* 13
San Antonio (6) 37 KBEJ --- UPN 2 10 6 1
Hampton/Norfolk 42 WVEC 1984 ABC 13 7 2* 10
New Orleans 43 WWL 1994 CBS 4 8 1 20
Louisville 50 WHAS 1997 ABC 11 9 1* 13
Austin 54 KVUE 1999 ABC 24 6 2 12
Tucson 73 KMSB 1997 FOX 11 9 4 10
Tucson (7) 73 KTTU --- UPN 18 9 5* 3
Spokane 78 KREM 1997 CBS 2 6 1* 14
Spokane 78 KSKN 2001 UPN/WB 22 6 5 3
Boise (8) 121 KTVB 1997 NBC 7 6 1 22
- ------------------------------------------------------------------------------------------------------------
(1) Market rank is based on the relative size of the television market
Designated Market Area ("DMA"), among the 210 generally recognized
DMAs in the United States, based on November 2001 Nielsen estimates.
(2) Substantially all the revenue of the Company's television stations
is derived from advertising. Less than 4 percent of television
revenue is provided by compensation paid by networks to the
television stations for broadcasting network programming.
(3) Represents the number of television stations (both VHF and UHF)
broadcasting in the market, excluding public stations, low power
broadcast stations and national cable channels.
(4) Station rank is derived from the station's rating, which is based on
November 2001 Nielsen estimates of the number of television
households tuned to the Company's station for the Sunday-Saturday
7:00 a.m. to 1:00 a.m. period ("sign-on/sign-off") as a percentage
of the number of television households in the market.
(5) Station audience share is based on November 2001 Nielsen estimates
of the number of television households tuned to the station as a
percentage of the number of television households with sets in use
in the market for the sign-on/sign-off period.
(6) Operated under an LMA.
(7) On March 12, 2002, Belo acquired KTTU. Prior to the acquisition,
Belo operated KTTU under an LMA.
(8) The Company also owns KTFT-LP (NBC), a low power television station
in Twin Falls, Idaho.
* Tied with one or more other stations in the market.
The principal source of revenue for Belo's television stations is the sale
of air time to local and national advertisers. In 2001, approximately 93.6
percent of total television revenues was derived from spot revenues. Network
compensation was 3.7 percent of total television revenues.
Commercial television stations generally fall into one of three
categories. The first category of stations includes those affiliated with one of
the four major national networks (ABC, CBS, NBC and FOX). The second category is
comprised of stations affiliated with newer national networks, such as UPN, WB
and Paxson Communications Corporation. The third category includes independent
stations that are not affiliated with any network and rely
2
principally on local and syndicated programming. Affiliation with a television
network can have a significant influence on the revenues of a television station
because the audience ratings generated by a network's programming can affect the
rates at which a station can sell advertising time. Generally, rates for
national and local spot advertising sold by the Company are determined by each
station, which receives all of the revenues, net of agency commissions, for that
advertising. Rates are influenced by the demand for advertising time, the
popularity of the station's programming and market size.
The Company's network affiliation agreements generally provide the station
with the exclusive right to broadcast in its local service area all programs
transmitted by the network with which the station is affiliated. In return, the
network has the right to sell most of the advertising time during such
broadcasts. Stations generally receive a specified amount of network
compensation for broadcasting network programming. To the extent that a
station's preemptions of network programming exceed a designated amount, that
compensation may be reduced. Network compensation is also subject to reduction
by the network during the term of an affiliation agreement under other
circumstances, with provisions for advance notice. The Company has network
affiliation agreements in place with ABC, CBS, NBC, FOX, WB and UPN. The Company
and FOX are currently negotiating a new agreement. Belo's station with which it
has an LMA has an affiliation agreement with UPN.
NEWSPAPER GROUP
Belo's Newspaper Group comprises four daily newspapers with a combined
daily circulation of approximately 900,000 copies and a combined Sunday
circulation of more than 1.2 million copies. The group is led by The Dallas
Morning News, which has the country's seventh-largest Sunday circulation and
tenth-largest daily circulation. Recognized as one of the elite newspapers in
America, The Dallas Morning News has earned six Pulitzer Prizes since 1986 for
its news reporting and photography initiatives. The Providence Journal, the
Company's second largest publication based on total circulation, has won four
Pulitzer Prizes and Belo's third largest publication, The Press-Enterprise, has
won one Pulitzer Prize. Belo also owns the Denton Record-Chronicle in Denton,
Texas and operates certain commercial printing businesses.
The Company's principal newspaper, The Dallas Morning News, was
established in 1885 and is one of the leading newspaper franchises in America.
Its success is founded upon the highest standards of journalistic excellence,
with an emphasis on comprehensive news and information, and community service.
The Company acquired The Providence Journal in February 1997. The Providence
Journal also has a long history of journalistic excellence and service to its
community and is America's oldest major daily newspaper of general circulation
and continuous publication. Belo acquired The Press-Enterprise in July 1997 and
the Denton Record-Chronicle in June 1999.
The following table sets forth information concerning the Company's daily
newspaper operations:
- ------------------------------------------------------------------------------------------------------------
2001 2000
------------------------------ ------------------------------
Daily Sunday Daily Sunday
Newspaper Location Circulation(1) Circulation(1) Circulation(1) Circulation(1)
- -------------------------------------------------------------------------- ------------------------------
The Dallas Morning News Dallas, TX 514,665 776,387 520,157 785,758
The Providence Journal Providence, RI 165,880 233,751 162,358 230,636
The Press-Enterprise Riverside, CA 168,765 176,968 166,935 174,636
Denton Record-Chronicle Denton, TX 15,969 20,428 15,835 19,443
- ------------------------------------------------------------------------------------------------------------
(1) Average paid circulation is for the six months ended September 30, 2001
and 2000, respectively, according to the Audit Bureau of Circulation's
FAS-FAX report, except for the Denton Record-Chronicle, for which 2001
circulation data is taken from the Certified Audit of Circulations Report
for the twelve-month period ended December 31, 2000 and 2000 circulation
data is taken from the Certified Audit of Circulations Report for the
six-month period ended September 30, 2000 (unaudited).
The Company's three largest newspapers, The Dallas Morning News, The
Providence Journal and The Press-Enterprise, provide coverage of local, state,
national and international news. The Dallas Morning News is distributed
throughout the Southwest, though its circulation is concentrated primarily in
the 12 counties surrounding Dallas. The Providence Journal is the leading
newspaper in Rhode Island and southeastern Massachusetts. The Press-Enterprise
is distributed throughout Riverside County and the Inland Empire area of
southern California.
3
Belo's newspaper group derives its revenue from advertising, circulation
and commercial printing. For the year ended December 31, 2001, advertising
revenue accounted for 85 percent of total newspaper revenue while circulation
revenue accounted for 12.3 percent and commercial printing accounted for most of
the remaining amount.
The following table sets forth information concerning the prices of the
Company's daily newspapers as of December 31, 2001:
---------------------------------------------------
Newsstand Price(1)
-------------------------
Newspaper Daily Sunday
---------------------------------------------------
The Dallas Morning News $.50 $1.50
The Providence Journal $.50 $2.00
The Press-Enterprise $.25 $1.25
Denton Record-Chronicle $.25 $1.00
---------------------------------------------------
(1) Newsstand price represents the rate for single copy sales.
Newspapers are typically sold to distributors and subscribers at
prices less than the newsstand price.
The basic material used in publishing Belo's newspapers is newsprint.
Currently, newsprint is primarily purchased from five suppliers. In addition,
The Providence Journal purchases approximately 50 percent of its newsprint from
other suppliers under long-term contracts. These contracts provide for certain
minimum purchases per year. Less than 5 percent of the Company's newsprint is
purchased on the spot market in privately negotiated transactions. Management
believes its sources of newsprint, along with available alternate sources, are
adequate for the Company's current needs.
During 2001, Belo's publishing operations consumed approximately 220,000
metric tons of newsprint at an average cost of $569 per metric ton. Consumption
of newsprint in the previous year was approximately 269,000 metric tons
(including approximately 8,000 metric tons for newspapers sold at the end of
2000) at an average cost per metric ton of $520. Newsprint prices rose from late
1999 through the first half of 2001 but have subsequently declined due to lower
demand resulting from the slowdown in the U.S. economy.
INTERACTIVE MEDIA
The Internet is a powerful resource through which the Company continuously
explores ways to expand the scope of its core businesses while creating
innovative services for its viewers, readers and advertisers. Interactive
editions of Belo's newspapers along with the Web sites of each of the Company's
television stations provide consumers with accurate and timely news and
information as well as a variety of other products and services. Belo obtains
immediate feedback through online communication with its audience, which allows
the Company to tailor the way in which it delivers news and information to
better serve the needs of its audience.
The majority of Belo Interactive's Web sites are associated with the
Company's television stations and newspapers and primarily provide news and
information. According to Nielsen/NetRatings, Belo Interactive has seven of the
top 25 local television-affiliated Web sites in the U.S., and the Company's
newspaper-affiliated Web sites in Dallas and Providence are the leading local
media sites in those market areas.
Revenues for Belo Interactive in 2001 were principally derived from
advertising on its various Web sites and, to a much lesser extent, fees
generated from Internet service provider subscriptions and data retrieval
services.
In 2001, the Company purchased a minority equity position in Classified
Ventures, LLC and joined the affiliated network of cars.com, Classified
Venture's leading automotive site. In addition, in 2001, the Company joined the
CareerBuilder network which offers on-line job seekers and employers both local
and national access to employment and resume postings.
CABLE NEWS
Belo's cable news operations include Texas Cable News ("TXCN") and
Northwest Cable News ("NWCN"), which provide regional news coverage in a
comprehensive 24-hour a day format, utilizing the news resources of the
4
Company's television stations and newspapers in Texas and television stations in
the Northwest. The Company also operates four cable news channels in partnership
with Cox Communications and others, which provide local market coverage in New
Orleans, Louisiana (NewsWatch on Channel 15), Phoenix, Arizona (Arizona
NewsChannel and !Mas! Arizona) and Hampton/Norfolk, Virginia (Local News on
Cable). These cable news channels also utilize the news resources of the
television stations owned by the Company in those markets. !Mas! Arizona is the
Southwest's first Spanish-language cable news, information and sports channel.
The channel became available to viewers in September 2000 and provides in-depth
coverage of local issues and stories in the community.
During 2001 and 2000, Belo announced the formation of news partnerships
with Time Warner Cable that call for the creation of 24-hour local cable news
channels in Houston and San Antonio, Texas and in Charlotte, North Carolina.
Each of these news channels is expected to be available to viewers in 2002.
COMPETITION
The success of broadcasting operations depends on a number of factors,
including the general strength of the economy, the ability to provide attractive
programming, audience ratings, relative cost efficiency for advertisers in
reaching audiences as compared to other advertising media, technical
capabilities and governmental regulations and policies. Competition for
advertising revenues at Belo's television stations, as well as its daily
newspapers, Web sites and cable news operations, includes other television
stations and newspapers (including those owned and operated by Belo), direct
broadcast satellite ("DBS"), radio stations, cable television systems, outdoor
advertising, the Internet, magazines and direct mail advertising.
The four major national television networks are represented in each
television market in which Belo has a television station. Competition for
advertising sales and local viewers within each market is intense, particularly
among the network-affiliated television stations.
The entry of local telephone companies and other multichannel video
programming distributors into the market for video programming services has also
had an impact on competition in the television industry. Belo is unable to
predict the effect that these or other technological and related regulatory
changes will have on the television industry or on the future results of Belo's
operations.
The Dallas Morning News' primary newspaper competitor in certain areas of
the Dallas/Fort Worth market is the Fort Worth Star-Telegram. The Providence
Journal has five competing daily newspapers in the Rhode Island market and The
Press-Enterprise has four daily newspaper competitors in the Riverside County
market.
FCC REGULATION
GENERAL. Belo's television broadcast operations are subject to the
jurisdiction of the FCC under the Communications Act of 1934, as amended (the
"Communications Act"). Among other things, the Communications Act empowers the
FCC to:
- assign frequency bands;
- determine stations' operating frequencies, location and power;
- issue, renew, revoke and modify station licenses;
- regulate equipment used by stations;
- impose penalties for violation of the Communications Act or of FCC
regulations;
- impose fees for processing applications and other administrative
functions; and
- adopt regulations to carry out the Communications Act's provisions.
5
The Communications Act also prohibits the assignment of a broadcast
license or the transfer of control of a broadcast licensee without prior FCC
approval. Under the Communications Act, the FCC also regulates certain aspects
of the operation of cable television systems and other electronic media that
compete with television stations. The Communications Act would prohibit Belo's
subsidiaries from continuing as broadcast licensees if record ownership of, or
power to vote, more than one-fourth of Belo's stock were to be held by aliens,
foreign governments or their representatives, or by corporations formed under
the laws of foreign countries.
STATION LICENSES. Under the Communications Act, as amended by the
Telecommunications Act of 1996 (the "1996 Act"), the FCC grants television
station licenses for terms of up to eight years. The 1996 Act also requires
renewal of a television license if the FCC finds that:
- the station has served the public interest, convenience and
necessity;
- there have been no serious violations by the licensee of either the
Communications Act or the FCC's rules and regulations; and
- there have been no other violations by the licensee of either the
Communications Act or the FCC's rules and regulations which, taken
together, constitute a pattern of abuse.
In making its determination, the FCC cannot consider whether the public
interest would be better served by a party other than the renewal applicant.
Under the 1996 Act, competing applications for the same frequency may be
accepted only after the FCC has denied an incumbent's application for renewal of
a license.
The current license expiration dates for each of Belo's television
broadcast stations are as follows:
WVEC .................................................. October 1, 2004
WCNC .................................................. December 1, 2004
WWL .................................................. June 1, 2005
WHAS .................................................. August 1, 2005
KMOV .................................................. February 1, 2006
KENS .................................................. August 1, 2006
KHOU .................................................. August 1, 2006
KVUE .................................................. August 1, 2006
WFAA .................................................. August 1, 2006
KASW .................................................. October 1, 2006
KMSB .................................................. October 1, 2006
KTTU .................................................. October 1, 2006
KTVB .................................................. October 1, 2006
KTVK .................................................. October 1, 2006
KING .................................................. February 1, 2007
KONG .................................................. February 1, 2007
KGW .................................................. February 1, 2007
KREM .................................................. February 1, 2007
KSKN .................................................. February 1, 2007
The current license expiration date for KBEJ, the television station with
which the Company has an LMA, is August 1, 2006.
OWNERSHIP RULES. The FCC's ownership rules, as modified pursuant to the
1996 Act and in subsequent FCC proceedings, limit the aggregate audience reach
of television stations that may be under common ownership, operation and
control, or in which a single person or entity may hold office or have more than
a specified interest or
6
percentage of voting power, to 35 percent of the total national audience. FCC
rules also limit common ownership, operation and control of, or cognizable or
"attributable" interests or voting power in:
- television stations serving the same area;
- television stations and radio stations serving the same area;
- television stations and daily newspapers serving the same area; and
- television stations and cable systems serving the same area.
The FCC's ownership rules affect the number, type and location of
newspaper, broadcast and cable television properties that Belo might acquire in
the future. For example, under current FCC rules, Belo generally may not acquire
any daily newspaper or cable television property in a market where it now owns
or has an interest in a television station deemed attributable under FCC rules.
Belo's ownership of The Dallas Morning News and WFAA, which are both located in
the Dallas/Fort Worth DMA, predates the adoption of the FCC's rules regarding
newspaper/broadcast cross-ownership and was "grandfathered" by the FCC.
In August 1999, the FCC concluded long-standing proceedings to review and
revise several of its rules regulating television station ownership and the
standards used to determine what types of interests are considered to be
attributable under its rules. As modified in 1999, and in an order on
reconsideration issued in January 2001, one of these rules, the so-called
"duopoly" rule, permits a party to own two or more television stations that (1)
are located in separate DMAs or (2) are located in the same DMA, but do not have
overlapping Grade B service contours. In addition, a party may acquire a second
television station in the same DMA where it already owns or has an interest in a
television station, if:
- at least eight television "voices" (independently owned and operated
stations whose Grade B signals overlap the Grade B contour of at
least one of the stations in the proposed combination, excluding
LMAs) will remain in the market following the acquisition of the new
television station; and
- one of the two stations is not ranked among the top four stations in
the market based on Nielsen audience share ratings.
It is pursuant to this duopoly rule that Belo acquired KONG, KASW, KSKN
and KTTU, which are located in the same DMA as Belo's stations KING, KTVK, KREM
and KMSB, respectively. In addition, the FCC's rules provide that future waivers
of the duopoly restrictions will be available to permit acquisition of "failed"
or "failing" stations or unbuilt stations, subject to some conditions.
In its August 1999 decision, as modified by the January 2001
reconsideration orders, the FCC relaxed its restrictions on the common ownership
of television and radio stations. The FCC rules generally permit the common
ownership of up to two television and six radio stations, or one television and
seven radio stations, provided at least 20 independent media "voices" would
remain in the market. In addition, the FCC's rules provide that future waivers
of the television/radio ownership restrictions generally will be available to
permit the acquisition of "failed" stations.
The FCC's January 2001 reconsideration orders made several minor changes
to the FCC's attribution rules. Under the FCC's attribution rules as they stand
after the reconsideration orders, the following relationships and interests
generally are attributable for purposes of the agency's broadcast ownership
restrictions:
- All officers and directors of a licensee and its direct or indirect
parent(s);
- Voting stock interests of at least five percent;
- Stock interests of at least 20 percent, if the holder is a passive
institutional investor (investment companies, banks, insurance
companies);
- Any equity interest in a limited partnership or limited liability
company, unless properly "insulated" from management activities; and
7
- Equity and/or debt interests which in the aggregate exceed 33
percent of a licensee's total assets, if the interest holder
supplies more than 15 percent of the station's total weekly
programming, or is a same-market broadcast company, cable operator
or newspaper.
Under the 1996 Act, the FCC must review all of its broadcasting ownership
rules biennially to determine if they remain necessary in the public interest.
In June 2000, the FCC completed its 1998 biennial review of its rules and
decided to retain the 35 percent national television ownership limitation, the
cable system/television station cross-ownership rule and the limit on the number
of radio stations a company may own in a given market. In addition, the FCC
proposed to consider limited changes to the newspaper/broadcast cross-ownership
rule. In January 2001, the FCC completed its 2000 biennial review, making no
additional relevant changes to its ownership rules.
On February 19, 2002, the U.S. Court of Appeals for the D.C. Circuit
issued a decision reviewing the FCC's retention of the 35 percent national
television ownership limitation and the cable system/television station
cross-ownership rule. Concluding that the FCC had not justified their retention,
the court struck down the cable system/television cross ownership rule and
remanded the 35 percent limitation to the FCC for further consideration. On
remand, the FCC will be required to justify the rule as necessary in the public
interest. Belo cannot predict the outcome of the proceeding on remand or whether
the FCC will seek review of the Court of Appeals' decision before the Supreme
Court.
In September 2001, the FCC initiated a proceeding to determine whether any
changes should be made to its newspaper/broadcast cross-ownership rule. In
November 2001, the FCC initiated a proceeding to review its rules governing the
ownership of multiple radio stations within a single market. Belo cannot predict
the outcome of any of these proceedings.
PROGRAMMING AND OPERATIONS. The FCC has significantly reduced its
regulation of the programming and other operations of broadcast stations in
recent years, including elimination of formal ascertainment requirements and
guidelines concerning the amounts of some types of programming and commercial
matter that may be broadcast. There are, however, FCC rules and policies, and
rules and policies of other federal agencies, that regulate matters such as
network/affiliate relations, cable systems' carriage of syndicated and network
television programming on distant stations, political advertising practices,
obscene and indecent programming, accessibility of television programming to
audience members who are visually or hearing disabled, application procedures
and other areas affecting the business or operations of broadcast stations.
The courts have refused to overturn the FCC's invalidation of most aspects
of the Fairness Doctrine, which had required broadcasters to present contrasting
views on controversial issues of public importance. In October 2000, the U.S.
Court of Appeals for the D.C. Circuit ordered the FCC to repeal the personal
attack and political editorializing rules, which had their origins in the
Fairness Doctrine and which required broadcasters to provide free response time
to certain individuals or groups. The FCC may consider re-instituting fairness
obligations at a later date.
The Children's Television Act of 1990 limits the permissible amount of
commercial matter in children's television programs and requires each television
station to present educational and informational children's programming. The FCC
subsequently adopted stricter children's programming requirements, including a
requirement that television broadcasters provide a minimum of three hours of
children's educational programming per week. In October 2000, the FCC extended
indefinitely the requirement that broadcasters report on their children's
programming activities on a quarterly basis, and the agency now is considering a
requirement that broadcasters place their children's programming reports on
their own Web sites. To date, the FCC has not resolved this issue. Broadcasters
also are required to place "issues/programs lists" in their public inspection
files to provide their communities with information on their level of "public
interest" programming.
In April 1998, the U.S. Court of Appeals for the D.C. Circuit concluded
that the FCC's longstanding Equal Employment Opportunity ("EEO") regulations
were unconstitutional. In January 2000, the FCC adopted new EEO rules, which
imposed job information dissemination, recruitment and reporting requirements.
In January 2001, however, the U.S. Court of Appeals for the D.C. Circuit
struck down the FCC's new EEO rules. The CommissionFCC thereafter suspended the
rules, except for the general obligation not to engage in employment
8
discrimination based on race, color, religion, national origin or sex. In
December 2001, the FCC voted to open a new proceeding to re-establish EEO rules
for broadcasters, which would reinstate various requirements. Belo cannot
predict the outcome of this proceeding.
The FCC has adopted various regulations to implement provisions of the
Cable Television Consumer Protection and Competition Act of 1992, as amended by
the 1996 Act, governing the relationship between broadcasters and cable
operators. Among other matters, these regulations require cable systems to
devote a specified portion of their channel capacity to the carriage of the
signals of local television stations and permit TV stations to elect between
having a right to mandatory carriage on local cable systems, referred to as
"must carry rights," or a right to restrict or prevent cable systems from
carrying the station's signal without the station's permission, referred to as
"retransmission consent". The Communications Act and FCC regulations also
contain measures to facilitate competition among cable systems, telephone
companies and other systems in the distribution of TV signals, video programming
and other services.
DIGITAL TELEVISION SERVICE. In April 1997, the FCC adopted rules for
implementing digital television ("DTV") service in the United States.
Implementation of DTV will improve the technical quality of television signals
received by viewers and will give television broadcasters the flexibility to
provide new services, including high-definition television or multiple programs
of standard definition television and data transmission.
On April 3, 1997, a second channel on which to initially provide separate
DTV programming or simulcast its analog programming was assigned to all
broadcasters holding a license to operate a full-power television station or a
construction permit for such a station. These second channels are assigned for
an eight-year transition period scheduled to end in 2006. Stations were required
to construct their DTV facilities and be on the air with a digital signal
according to a schedule set by the FCC based on the type of station and the size
of the market in which it is located. For example, all ABC, CBS, NBC and FOX
network affiliates in the ten largest markets were required to be on the air
with a digital signal by May 1, 1999. Several stations in large markets
voluntarily committed in writing to the FCC to build DTV facilities by November
1, 1998. The Company's network-affiliated stations in Dallas, Houston and
Seattle met the accelerated schedule. Affiliates of the four major networks in
the top 30 markets were required to begin transmitting digital signals by
November 1999. Belo's stations in St. Louis, Portland and Charlotte each met
this schedule. Except as noted below, all other commercial broadcasters must
follow suit by May 1, 2002. Belo's remaining stations expect to meet this
schedule, except for Belo's stations in Austin, Spokane and Tucson which have
filed applications to obtain FCC-approved extensions.
At the end of the DTV transition period, analog television transmissions
will cease and DTV channels will be reassigned to a smaller segment of the
broadcasting spectrum comprising channels 2-51. Some of the vacated spectrum has
been allocated to public safety transmissions, while the remainder will be
auctioned for use by other telecommunications services.
The FCC hopes to complete the full transition to DTV by 2006. Although the
FCC has targeted December 31, 2006 as the date by which all television
broadcasters must return their analog licenses, the Balanced Budget Act of 1997
allows broadcasters to keep both their analog and digital licenses until at
least 85 percent of the television households in their respective markets can
receive a digital signal. In addition, pursuant to a September 2001 FCC order,
broadcasters operating on channels 59-69 who voluntarily give up one of their
channels as a result of a "band-clearing agreement" may continue to operate in
analog until December 31, 2005, or until at least 70 percent of the television
households in their respective markets can receive a digital signal. Local
zoning laws and the lack of qualified tall-tower builders to construct the
facilities needed for DTV operations, as well as other factors, including the
pace of DTV receiver production and sales, may cause delays in the DTV
transition. The FCC has periodically reviewed and will continue to periodically
review the progress of DTV and make adjustments to the 2006 target date, if
necessary.
In January 2001, the FCC issued a further order reviewing various DTV
transition issues. In particular, the order required commercial stations with
both analog and digital channel assignments within the DTV core spectrum
(channels 2-51) to elect their permanent post-transition DTV channel by December
1, 2003. The order also required commercial broadcasters to provide a DTV signal
that replicates their current analog service area by December 1, 2004, or else
lose interference protection in those portions of their existing service area
not covered by their digital signal. In addition, the order required commercial
stations to provide a stronger digital signal to their communities of license
than was previously required.
9
In November 2001, the FCC issued a reconsideration order on DTV transition
issues which modified many of the rules the agency established in January 2001.
Significantly, the reconsideration order temporarily defers the FCC's previously
established deadlines for broadcasters to (1) choose their permanent
post-transition DTV channel; (2) provide a DTV signal that replicates their
analog service area; and (3) build maximized DTV facilities. The FCC intends to
establish deadlines for these requirements in its next periodic review of the
DTV transition and emphasized that none of the deadlines will be after the later
of December 31, 2006 or the date by which 85 percent of the television
households in a licensee's market are capable of receiving the signals of DTV
stations. The order also permits broadcasters to request special temporary
authority to construct initial minimal DTV facilities (i.e., facilities that
only cover their cities of license) while retaining interference protection for
their allotted and maximized facilities. The order further allows commercial
stations subject to the May 1, 2002 construction deadline (i.e., stations not in
the top 30 markets) to initially broadcast a digital signal during prime time
hours only.
In January 2001, the FCC issued an order addressing the must carry rights
of digital television broadcasters. Although the FCC deferred making a decision
as to whether broadcasters are entitled to simultaneous carriage of both their
digital and analog signals during the transition to DTV, the FCC did determine
the following:
- Digital-only television stations may immediately assert carriage
rights on local cable systems;
- Television stations that return their analog spectrum and convert to
digital operations are entitled to must carry rights; and
- A digital-only station asserting must carry rights is entitled only
to carriage of a single programming stream and other
"program-related" content, regardless of the number of programs it
broadcasts simultaneously on its digital spectrum.
Several parties have filed petitions for reconsideration of various parts
of the FCC's DTV must carry decision. Those petitions remain pending before the
agency, and Belo cannot predict what changes, if any, the FCC will make to its
DTV must carry rules on reconsideration.
In December 1999, the FCC commenced a proceeding seeking comment on the
public interest obligations of television broadcast licensees. Specifically, the
FCC requested information in four general areas:
- The new flexibility and capabilities of digital television, such as
multiple channel transmission;
- Service to local communities, including information on public
interest activities and disaster relief;
- Enhancing access to the media by persons with disabilities and using
DTV to encourage diversity in the digital era; and
- Enhancing the quality of political discourse.
In commencing the proceeding, the FCC did not propose specific new rules or
policies, but stated that it was seeking to create a forum for public debate on
how broadcasters can best serve the public interest during and after the
transition to DTV.
In addition, the FCC has commenced, but not completed, a proceeding
specifically addressing the children's programming obligations of DTV broadcast
licensees and how the current children's programming rules should apply to DTV.
In this proceeding, the FCC is considering a number of measures that might
increase licensees' current obligation to air at least three hours of
educational programming per week.
SATELLITE TRANSMISSION OF LOCAL TELEVISION SIGNALS. In November 1999,
Congress enacted the Satellite Home Viewer Improvement Act of 1999 ("SHVIA"),
which established a copyright licensing system for limited distribution of
television network programming to DBS viewers and directed the FCC to initiate
rulemaking proceedings to implement the new system. SHVIA also extended the
current system of satellite distribution of distant network signals to unserved
households (i.e., those that do not receive a Grade B signal from a local
network affiliate).
10
As part of those rulemakings, the FCC established a market-specific
requirement for mandatory carriage of local television stations, similar to that
applicable to cable systems, for those markets in which a satellite carrier
chooses to provide any local signal, beginning January 1, 2002. Stations in
affected markets were required to make must carry elections by July 1, 2001. The
July 1, 2001 election is effective from January 1, 2002 to December 31, 2005.
The DBS industry challenged SHVIA and the FCC's DBS must carry rules in
federal court. In December 2001, a panel of the U.S. Court of Appeals for the
Fourth Circuit upheld the federal law that requires DBS carriers to carry the
signals of all local television stations in markets where they elect to carry
any local signals. The ruling means that, starting January 1, 2002, DBS
operators were required to carry all local television stations in the local
markets they currently serve unless they opt to discontinue local service to
those markets. The court also upheld an FCC rule that permits DBS operators to
offer all local television stations on a single tier or an a la carte basis.
The foregoing does not purport to be a complete summary of all the
provisions of the Communications Act, other applicable statutes or the
regulations and policies of the FCC thereunder. Proposals for additional or
revised regulations and requirements are pending before and are considered by
Congress and federal regulatory agencies from time to time. Belo cannot predict
the effect of existing and proposed federal legislation, regulations and
policies on its business. Also, various of the foregoing matters are now, or may
become, the subject of court litigation and Belo cannot predict the outcome of
any such litigation or the impact on its business.
EMPLOYEES
As of December 31, 2001, the Company had approximately 7,820 employees.
Belo has approximately 900 employees who are represented by various employee
unions. Approximately 400 of these employees are located in Providence, Rhode
Island, with the remaining union employees working at various television
stations and other properties. Belo believes its relations with its employees
are satisfactory.
ITEM 2. PROPERTIES
At December 31, 2001, Belo owned broadcast operating facilities in the
following U. S. cities: Dallas, Texas (WFAA); Houston, Texas (KHOU); Seattle,
Washington (KING and KONG); Phoenix, Arizona (KTVK and KASW); Portland, Oregon
(KGW); Charlotte, North Carolina (WCNC); San Antonio, Texas (KENS); New Orleans,
Louisiana (WWL); Norfolk, Virginia (WVEC); Louisville, Kentucky (WHAS); Austin,
Texas (KVUE); Tucson, Arizona (KMSB and KTTU); Spokane, Washington (KREM and
KSKN); and Boise, Idaho (KTVB). The Company also leases broadcast facilities for
the operations of KMOV in St. Louis, Missouri. Three of the Company's broadcast
facilities use broadcast towers that are jointly owned with another television
station in the same market (WFAA, KGW and KENS). The broadcast towers associated
with the Company's other television stations are wholly-owned by the Company.
The Company leases a facility in Washington, D.C. that is used by its
television and newspaper operations for the gathering and distribution of news
from the Nation's capital. This facility includes a broadcast studio as well as
general office space.
The Company owns and operates a newspaper printing facility and
distribution center in Plano, Texas where eight high-speed offset presses are
housed to print The Dallas Morning News and, beginning in February 2002, the
Denton Record-Chronicle. Certain other operations of The Dallas Morning News are
housed in a Company-owned, four-story building in downtown Dallas. The
non-production operations of the Denton Record-Chronicle are housed in a
Company-owned, two-story building in Denton, Texas.
The Company also owns and operates a newspaper printing facility in
Providence, Rhode Island where three high-speed flexographic presses are housed
to print The Providence Journal. The remainder of The Providence Journal's
operations is housed in a Company-owned, five-story building in downtown
Providence.
The Company owns and operates a newspaper publishing facility and a
commercial printing facility in Riverside, California. The newspaper publishing
facility is located in downtown Riverside, California and is
11
equipped with three high-speed offset presses to print The Press-Enterprise. The
non-production operations of The Press-Enterprise are also housed in this
facility.
Each of Belo's three large market newspapers' facilities is equipped with
computerized input and photocomposition equipment and other equipment that is
used in the production of both news and advertising copy.
TXCN's operations are conducted from a fully-equipped digital television
facility located in downtown Dallas. NWCN conducts its regional cable news
operations from the KING facility.
The Company's corporate operations, several departments of The Dallas
Morning News and certain broadcast administrative functions have offices located
in downtown Dallas in a seventeen-story office building owned by the Company.
The Company also leases space for its secondary data center in Irving, Texas.
The operations of Belo Interactive are located at each of Belo's
individual operating units and in leased office space in downtown Dallas.
All of the foregoing operations have additional leasehold and other
interests that are used in their respective activities and are not materially
important physical properties. The Company believes its properties are in
satisfactory condition and are well maintained, and that such properties are
adequate for present operations.
ITEM 3. LEGAL PROCEEDINGS
There are legal proceedings pending against the Company, including a
number of actions for alleged libel and slander. In the opinion of management,
liabilities, if any, arising from these actions would not have a material
adverse effect on the consolidated results of operations, liquidity or financial
position of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of shareholders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year covered by this Form 10-K.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information set forth under the heading "Market Data" and "Note 9:
Common and Preferred Stock" contained in the 2001 Annual Report to Shareholders
is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information set forth under the heading "Selected Financial Data"
contained in the 2001 Annual Report to Shareholders is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information set forth under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations" contained in the 2001
Annual Report to Shareholders is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The information set forth under the heading "Market Risks" contained in
the 2001 Annual Report to Shareholders is incorporated herein by reference.
12
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information set forth under the headings "Consolidated Statements of
Earnings," "Consolidated Balance Sheets," "Consolidated Statements of
Shareholders' Equity," "Consolidated Statements of Cash Flows" and "Notes to
Consolidated Financial Statements," together with the "Report of Independent
Auditors" contained in the 2001 Annual Report to Shareholders is incorporated
herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information set forth under the headings "Proposal: Election of
Directors," "Executive Officers," and "Stock Ownership - Section 16(a)
Beneficial Ownership Reporting Compliance" contained in the definitive Proxy
Statement for the Company's Annual Meeting of Shareholders to be held on May 8,
2002, is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information set forth under the heading "Executive Compensation"
contained in the definitive Proxy Statement for the Company's Annual Meeting of
Shareholders to be held on May 8, 2002, is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information set forth under the heading "Stock Ownership" contained in
the definitive Proxy Statement for the Company's Annual Meeting of Shareholders
to be held on May 8, 2002, is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth under the headings "Information about the Board
and its Committees - Certain Relationships" and "- Compensation Committee
Interlocks and Insider Participation" contained in the definitive Proxy
Statement for the Company's Annual Meeting of Shareholders to be held on May 8,
2002, is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) The financial statements referenced in Item 8 are incorporated
herein by reference to the 2001 Annual Report to Shareholders, a
portion of which is filed as Exhibit 13 to this Form 10-K.
(2) The financial schedules required by Regulation S-X are either not
applicable or are included in the information provided in the Notes
to Consolidated Financial Statements, which are incorporated herein
by reference to the 2001 Annual Report to Shareholders.
13
(3) 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
------ -----------
3.1 * Certificate of Incorporation of the Company (Exhibit 3.1
to the Company's 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)
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 13, 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 * Certificate of Ownership and Merger, dated December 20,
2000, but effective as of 11:59 p.m. on December 31,
2000 (Exhibit 99.2 to Belo's Current Report on Form 8-K
filed with the Commission on December 29, 2000)
3.8 * 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)
3.9 * Certificate of Designation of Series B Common Stock of
the Company dated May 4, 1988 (Exhibit 3.8 to the 1999
Form 10-K)
3.10 * Amended and Restated Bylaws of the Company, effective
December 31, 2000 (Exhibit 3.10 to the Company's Annual
Report on 10-K dated March 13, 2001 (the "2000 Form
10-K"))
4.1 Certain rights of the holders of the Company's Common
Stock are set forth in Exhibits 3.1-3.10 above
4.2 * Specimen Form of Certificate representing shares of the
Company's Series A Common Stock (Exhibit 4.2 to the 2000
Form 10-K)
4.3 * Specimen Form of Certificate representing shares of the
Company's Series B Common Stock (Exhibit 4.3 to the 2000
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)
14
EXHIBIT
NUMBER DESCRIPTION
------ -----------
4.6 * Supplement No. 2 to Amended and Restated Rights
Agreement between the Company and The First National
Bank of Boston dated as of June 5, 1998 (Exhibit 4.6 to
the 2000 Form 10-K)
4.7 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)
(4) * $200 million 7-3/4% Senior Debenture due 2027
(Exhibit 4.6(4) to the 2nd Quarter 1997 Form
10-Q)
(5) * Officers' 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) * Officers' 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)
(8) * $350 million 8.00% Senior Note due 2008 (Exhibit
4.6(8) to the Company's Quarterly Report on Form
10-Q for the quarterly period ended September
30, 2001 (the "3rd Quarter 2001 Form 10-Q"))
(9) * Officers' Certificate dated November 1, 2001
establishing terms of debt securities pursuant
to Section 3.1 of the Indenture (Exhibit 4.6(9)
to the 3rd Quarter 2001 Form 10-Q)
10.1 Financing agreements:
(1) Five-year Credit Agreement dated as of November
29, 2001 among the Company, as Borrower; J.P.
Morgan Chase Bank, as Administrative Agent and as
Competitive Advance Facility Agent; J.P. Morgan
Securities Inc. and Banc of America Securities
LLC, as Co-Advisors, Co-Arrangers and Joint
Bookrunners; Bank of America, N.A., Fleet National
Bank and the Bank of New York, as Co-Syndication
Agents; BNP Paribas, as Documentation Agent; and
the Fuji Bank Limited and SunTrust Bank, as Senior
Managing Agents.
15
EXHIBIT
NUMBER DESCRIPTION
------ -----------
10.2 Compensatory plans:
~(1) Belo Savings Plan:
* (a) Belo Savings Plan Amended and Restated July
1, 2000 (Exhibit 10.2(1) to the Company's
Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2000 (the
"2nd Quarter 2000 Form 10-Q"))
* (b) First Amendment to the Belo Savings Plan
effective December 31, 2000 (Exhibit
10.2(1)(b) to the 2000 Form 10-K)
~(2) Belo 1986 Long-Term Incentive Plan:
* (a) Belo Corp. 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 Company's
Annual Report on Form 10-K dated March 19,
1998 (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)
~(3) * Belo 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)
* (b) Amendment to 1995 Executive Compensation
Plan, dated December 16, 1999 (Exhibit
10.3(3)(b) to the 1999 Form 10-K)
~(4) * Management Security Plan (Exhibit 10.3(1) to the
1996 Form 10-K)
* (a) Amendment to Management Security Plan of
Belo Corp. and Affiliated Companies (as
Restated Effective January 1, 1982) (Exhibit
10.2(4)(a) to the 1999 Form 10-K)
~(5) Belo Supplemental Executive Retirement Plan
* (a) Belo Supplemental Executive Retirement Plan
As Amended and Restated Effective January 1,
2000 (Exhibit 10.2(5)(a) to the 1999 Form
10-K)
* (b) First Amendment to Belo Supplemental
Executive Retirement Plan as Amended and
Restated Effective January 1, 2000, dated
July 27, 2000 (Exhibit 10.2(5) to the 2nd
Quarter 2000 Form 10-Q)
~(6) * Belo 2000 Executive Compensation Plan (Exhibit
4.15 to Registration Statement Form S-8 (No.
333-43056) filed with the Securities and
Exchange Commission on August 4, 2000)
~(7) * Retirement Agreement between the Company and
Burl Osborne, dated June 27, 2001 (Exhibit
10.2(8) to Company's Quarterly Report on Form
10-Q for the quarterly period ended June 30,
2001)
12 Ratio of Earnings to Fixed Charges
13 Portions of the 2001 Annual Report to Shareholders (Items 5, 6, 7,
7A and 8)
21 Subsidiaries of the Company
23 Consent of Ernst & Young LLP
16
EXHIBIT
NUMBER DESCRIPTION
------ -----------
24 Power of Attorney (set forth on the signature page(s)
hereof)
(b) Reports on Form 8-K.
The following reports were filed on Form 8-K during the quarter for
which this report is filed:
(1) Current Report on Form 8-K (Date of Event: October 29, 2001)
filed on November 1, 2001 reporting that the Company entered
into an Underwriting Agreement with Banc of America Securities
LLC and J.P. Morgan Securities Inc., as representatives of the
underwriters named therein, for the sale of $350,000,000
aggregate principal amount of the Company's 8.00% Senior Notes
due 2008.
(2) Current Report on Form 8-K (Date of Event: October 24, 2001)
filed on October 26, 2001 reporting the issuance of a press
release announcing the Company's results for the third quarter
of fiscal 2001.
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
BELO CORP.
By: /S/ Robert W. Decherd
------------------------------------
Robert W. Decherd
Chairman of the Board, President
& Chief Executive Officer
Dated: March 15, 2002
POWER OF ATTORNEY
The undersigned hereby constitute and appoint Robert W. Decherd, Michael
J. McCarthy and Dunia A. Shive, and each of them and their substitutes, our true
and lawful attorneys-in-fact with full power to execute in our name and behalf
in the capacities indicated below any and all amendments to this report and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, and hereby ratify and
confirm all that such attorneys-in-fact, or any of them, or their substitutes
shall lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/S/Robert W. Decherd Chairman of the Board, March 15, 2002
- --------------------------------- President & Chief
Robert W. Decherd Executive Officer
/S/John W. Bassett, Jr. Director March 15, 2002
- ---------------------------------
John W. Bassett, Jr.
/S/Henry P. Becton, Jr. Director March 15, 2002
- ---------------------------------
Henry P. Becton, Jr.
/S/Louis E. Caldera Director March 15, 2002
- ---------------------------------
Louis E. Caldera
/S/Judith L. Craven, M.D., M.P.H. Director March 15, 2002
- ---------------------------------
Judith L. Craven, M.D., M.P.H.
/S/Roger A. Enrico Director March 15, 2002
- ---------------------------------
Roger A. Enrico
/S/Stephen Hamblett Director March 15, 2002
- ---------------------------------
Stephen Hamblett
/S/Dealey D. Herndon Director March 15, 2002
- ---------------------------------
Dealey D. Herndon
18
SIGNATURE TITLE DATE
--------- ----- ----
/S/Laurence E. Hirsch Director March 15, 2002
- ---------------------------------
Laurence E. Hirsch
/S/Arturo Madrid, Ph.D. Director March 15, 2002
- ---------------------------------
Arturo Madrid, Ph.D.
/S/Burl Osborne Director March 15, 2002
- ---------------------------------
Burl Osborne
/S/William T. Solomon Director March 15, 2002
- ---------------------------------
William T. Solomon
/S/Lloyd D. Ward Director March 15, 2002
- ---------------------------------
Lloyd D. Ward
/S/J. McDonald Williams Director March 15, 2002
- ---------------------------------
J. McDonald Williams
/S/Dunia A. Shive Executive Vice President/ March 15, 2002
- --------------------------------- Chief Financial Officer
Dunia A. Shive (Principal Financial Officer
and Principal Accounting
Officer)
19
Index to Exhibits
EXHIBIT
NUMBER DESCRIPTION
------ -----------
3.1 * Certificate of Incorporation of the Company (Exhibit 3.1
to the Company's 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)
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 13, 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 * Certificate of Ownership and Merger, dated December 20,
2000, but effective as of 11:59 p.m. on December 31,
2000 (Exhibit 99.2 to Belo's Current Report on Form 8-K
filed with the Commission on December 29, 2000)
3.8 * 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)
3.9 * Certificate of Designation of Series B Common Stock of
the Company dated May 4, 1988 (Exhibit 3.8 to the 1999
Form 10-K)
3.10 * Amended and Restated Bylaws of the Company, effective
December 31, 2000 (Exhibit 3.10 to the Company's Annual
Report on 10-K dated March 13, 2001 (the "2000 Form
10-K"))
4.1 Certain rights of the holders of the Company's Common
Stock are set forth in Exhibits 3.1-3.10 above
4.2 * Specimen Form of Certificate representing shares of the
Company's Series A Common Stock (Exhibit 4.2 to the 2000
Form 10-K)
4.3 * Specimen Form of Certificate representing shares of the
Company's Series B Common Stock (Exhibit 4.3 to the 2000
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)
EXHIBIT
NUMBER DESCRIPTION
------ -----------
4.6 * Supplement No. 2 to Amended and Restated Rights
Agreement between the Company and The First National
Bank of Boston dated as of June 5, 1998 (Exhibit 4.6 to
the 2000 Form 10-K)
4.7 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)
(4) * $200 million 7-3/4% Senior Debenture due 2027
(Exhibit 4.6(4) to the 2nd Quarter 1997 Form
10-Q)
(5) * Officers' 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) * Officers' 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)
(8) * $350 million 8.00% Senior Note due 2008 (Exhibit
4.6(8) to the Company's Quarterly Report on Form
10-Q for the quarterly period ended September
30, 2001 (the "3rd Quarter 2001 Form 10-Q"))
(9) * Officers' Certificate dated November 1, 2001
establishing terms of debt securities pursuant
to Section 3.1 of the Indenture (Exhibit 4.6(9)
to the 3rd Quarter 2001 Form 10-Q)
10.1 Financing agreements:
(1) Five-year Credit Agreement dated as of November
29, 2001 among the Company, as Borrower; J.P.
Morgan Chase Bank, as Administrative Agent and as
Competitive Advance Facility Agent; J.P. Morgan
Securities Inc. and Banc of America Securities
LLC, as Co-Advisors, Co-Arrangers and Joint
Bookrunners; Bank of America, N.A., Fleet National
Bank and the Bank of New York, as Co-Syndication
Agents; BNP Paribas, as Documentation Agent; and
the Fuji Bank Limited and SunTrust Bank, as Senior
Managing Agents.
EXHIBIT
NUMBER DESCRIPTION
------ -----------
10.2 Compensatory plans:
~(1) Belo Savings Plan:
* (a) Belo Savings Plan Amended and Restated July
1, 2000 (Exhibit 10.2(1) to the Company's
Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2000 (the
"2nd Quarter 2000 Form 10-Q"))
* (b) First Amendment to the Belo Savings Plan
effective December 31, 2000 (Exhibit
10.2(1)(b) to the 2000 Form 10-K)
~(2) Belo 1986 Long-Term Incentive Plan:
* (a) Belo Corp. 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 Company's
Annual Report on Form 10-K dated March 19,
1998 (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)
~(3) * Belo 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)
* (b) Amendment to 1995 Executive Compensation
Plan, dated December 16, 1999 (Exhibit
10.3(3)(b) to the 1999 Form 10-K)
~(4) * Management Security Plan (Exhibit 10.3(1) to the
1996 Form 10-K)
* (a) Amendment to Management Security Plan of
Belo Corp. and Affiliated Companies (as
Restated Effective January 1, 1982) (Exhibit
10.2(4)(a) to the 1999 Form 10-K)
~(5) Belo Supplemental Executive Retirement Plan
* (a) Belo Supplemental Executive Retirement Plan
As Amended and Restated Effective January 1,
2000 (Exhibit 10.2(5)(a) to the 1999 Form
10-K)
* (b) First Amendment to Belo Supplemental
Executive Retirement Plan as Amended and
Restated Effective January 1, 2000, dated
July 27, 2000 (Exhibit 10.2(5) to the 2nd
Quarter 2000 Form 10-Q)
~(6) * Belo 2000 Executive Compensation Plan (Exhibit
4.15 to Registration Statement Form S-8 (No.
333-43056) filed with the Securities and
Exchange Commission on August 4, 2000)
~(7) * Retirement Agreement between the Company and
Burl Osborne, dated June 27, 2001 (Exhibit
10.2(8) to Company's Quarterly Report on Form
10-Q for the quarterly period ended June 30,
2001)
12 Ratio of Earnings to Fixed Charges
13 Portions of the 2001 Annual Report to Shareholders (Items 5, 6, 7,
7A and 8)
21 Subsidiaries of the Company
23 Consent of Ernst & Young LLP
EXHIBIT
NUMBER DESCRIPTION
------ -----------
24 Power of Attorney (set forth on the signature page(s)
hereof)
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.