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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, 1993
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NO. 1-8598
A. H. BELO CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 75-0135890
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
P. O. BOX 655237
DALLAS, TEXAS 75265-5237
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 977-6606
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 registrant (1) has filed all reports
required to be filed by Sections 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, 1994 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 $823,474,630.*
Shares of Common Stock outstanding at February 28, 1994: 20,264,186 shares.
(Consisting of 14,531,341 shares of Series A Common Stock and 5,732,845 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 sent to shareholders in regard
to the Annual Meeting of Shareholders to be held May 4, 1994 are incorporated
by reference into Part III (Items 10, 11, 12 and 13).
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A. H. BELO CORPORATION
FORM 10-K
TABLE OF CONTENTS
PAGE
PART I
Item 1. Business 1
Item 2. Properties 5
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of Security Holders 6
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters 7
Item 6. Selected Financial Data 7
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 8
Item 8. Financial Statements and Supplementary Data (see Index to Financial Statements
and Schedules below) 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 19
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Report of Independent Auditors 21
Consolidated Statements of Earnings for the years ended December 31, 1993, 1992 and 1991 22
Consolidated Balance Sheets as of December 31, 1993 and 1992 23
Consolidated Statements of Shareholders' Equity for the years ended December 31, 1993, 1992
and 1991 25
Consolidated Statements of Cash Flows for the years ended December 31, 1993, 1992 and 1991 26
Notes to Consolidated Financial Statements 27
Management's Responsibility for Financial Statements 38
Financial Statement Schedules:
Schedule V - Property, Plant and Equipment for the years ended December 31, 1993, 1992
and 1991 39
Schedule VI - Accumulated Depreciation of Property, Plant and Equipment for the
years ended December 31, 1993, 1992 and 1991 40
Schedule VIII - Valuation and Qualifying Accounts for the years ended December 31, 1993,
1992 and 1991 41
Schedule X - Supplementary Earnings Statement Information for the years ended
December 31, 1993, 1992 and 1991 42
(i)
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PART I
ITEM 1. BUSINESS
A. H. Belo Corporation (the "Company" or "Belo") owns and operates
newspapers and network-affiliated television stations in five U.S. cities.
The Company traces its roots to The Galveston Daily News, which began
publishing in 1842. Incorporated in Texas in 1926, the Company was reorganized
as a Delaware corporation in 1987. (References herein to "Company" or "Belo"
mean A. H. Belo Corporation and its wholly-owned subsidiaries unless the
context otherwise specifies.)
The Company's principal newspaper is The Dallas Morning News. In addition,
the Company publishes eight community newspapers for certain suburbs in the
Dallas-Fort Worth metropolitan area. The Company also owns and operates
network-affiliated VHF television broadcast stations in Dallas-Fort Worth and
Houston, Texas; Sacramento-Stockton-Modesto, California;
Norfolk-Portsmouth-Newport News-Hampton, Virginia and Tulsa, Oklahoma.
Note 11 to the Consolidated Financial Statements, included on page 35 of
this document, contains information about the Company's industry segments for
the years ended December 31, 1993, 1992 and 1991.
NEWSPAPER PUBLISHING
The Company's wholly-owned subsidiary, The Dallas Morning News, Inc.,
publishes the Company's principal newspaper, The Dallas Morning News, each
morning, including Sunday. Published continuously since 1885, The Dallas
Morning News provides coverage of local, state, national and international
news. The Morning News is distributed throughout the Southwest, though its
circulation is concentrated primarily in the twelve counties surrounding Dallas
and Fort Worth: Collin, Dallas, Denton, Ellis, Henderson, Hood, Hunt, Johnson,
Kaufman, Parker, Rockwall and Tarrant counties.
The Dallas Morning News strives to serve the public interest by maintaining
a strong and independent voice in matters of public concern. It is the policy
of the Company to allocate such resources as may be necessary to maintain
excellence in news reporting and editorial comment in The Dallas Morning News.
The Dallas Morning News serves a large readership in its primary market.
Average paid circulation for the six months ended September 30, 1993, according
to the unaudited Publisher's Statement of the Audit Bureau of Circulations, an
independent agency, was 527,387 daily and 814,404 on Sunday, an increase of 2.5
percent and .6 percent, respectively, over the six months ended September 30,
1992, which were 514,342 daily and 809,188 on Sunday.
In December 1991, the Company's principal competitor, the Dallas Times
Herald (owned by Times Herald Printing Company), ceased operations and sold
substantially all of its assets to the Company for $55.7 million. The primary
daily newspaper competing with The Dallas Morning News in its marketing area is
the Fort Worth Star-Telegram, owned by Capital Cities/ABC, Inc.. The Dallas
Morning News also competes for advertising with television and radio stations
(including a television station owned and operated by the Company), magazines,
direct mail, cable television, billboards and other newspapers (including the
other newspapers owned and operated by the Company).
The basic material used in publishing The Dallas Morning News is newsprint.
The average unit price of newsprint consumed during 1993 was higher than that
of the prior year due to a market-wide increase in newsprint prices. At
present, newsprint is purchased from eight suppliers. During 1993, the
Company's three largest providers of newsprint provided approximately 65
percent of the annual requirements, but the Company is not dependent on any one
of these suppliers. Management believes its sources of newsprint, along with
alternate sources that are available, are adequate for its current needs.
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In January 1994, the Company restructured the operations of its
wholly-owned subsidiary, Dallas-Fort Worth Suburban Newspapers, Inc.. As part
of the restructuring, Dallas-Fort Worth Suburban Newspapers, Inc., was split
into two wholly-owned subsidiaries, DFW Suburban Newspapers, Inc., and DFW
Printing Company, Inc.. DFW Suburban Newspapers, Inc. will continue to publish
its six paid circulation newspapers for suburban communities in the Dallas-Fort
Worth metropolitan area. These publications are delivered one to two days a
week. In addition, two free newspapers are published once a week. Each of the
Company's community publications has its own sales, circulation, news and
editorial personnel, and several of the publications currently maintain
separate offices. All administrative functions, however, are centralized and
all of the newspapers are printed at a plant in Arlington, Texas. This plant
is owned and operated by DFW Printing Company, Inc., which in addition to
printing the suburban newspapers, conducts the Company's commercial printing
operations.
TELEVISION BROADCASTING
The following table lists relevant information about the Company's
television broadcasting stations:
STATION, NUMBER OF
CHANNEL, DMA TELEVISION
MARKET AND NATIONAL EXPIRATION BROADCAST
NETWORK TV HOMES MARKET DATE OF STATIONS IN
AFFILIATION IN DMA (1) RANK (1) FCC LICENSE (2) MARKET (3)
- -------------- ------------ ---------- ---------------- ----------
WFAA-TV, Ch. 8 1,816,700 8th August 1, 1993 6 VHF
Dallas-Fort Worth, TX 9 UHF
(ABC)
KHOU-TV, Ch. 11 1,510,580 10th August 1, 1998 4 VHF
Houston, TX 8 UHF
(CBS)
KXTV, Ch. 10 1,099,950 19th December 1, 1993 4 VHF
Sacramento- 6 UHF
Stockton-Modesto, CA
(CBS)
WVEC-TV, Ch. 13 612,880 39th October 1, 1996 3 VHF
Norfolk-Portsmouth- 3 UHF
Newport News-Hampton, VA
(ABC)
KOTV, Ch. 6 456,430 59th June 1, 1993 5 VHF
Tulsa, OK 5 UHF
(CBS)
_____________________________
(1) Designated Market Area ("DMA") is an exclusive geographic area
consisting of all counties in which the local stations receive a preponderance
of total viewing hours. DMA data, which is published by the A. C. Nielsen
Company ("Nielsen"), is a significant factor in determining television
advertising rates. All the information shown above is as of November 1993.
(2) Applications for renewal of the licenses for certain stations are
pending before the Federal Communications Commission, and the stations'
licenses are by statute continued in effect pending action thereon.
(3) The number of television broadcasting stations is as of November 1993
and is based on information published by Nielsen. In each of these markets,
one of the VHF stations indicated is a non-commercial public broadcasting
television station, except for Dallas-Fort Worth, where there are two VHF
stations that are non-commercial public broadcasting stations, and
Norfolk-Portsmouth-Newport News-Hampton, where there are no VHF non-commercial
public broadcasting stations. In addition, there is one UHF non-commercial
public broadcasting station in Norfolk- Portsmouth-Newport News-Hampton and one
in Tulsa.
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Affiliation with a television network can have a significant influence
on the revenues of a television station because the audience share drawn by a
network's programming can affect the rates at which a station can sell
advertising time. The Federal Communications Commission ("FCC") regulates
certain provisions of television station's network affiliation contracts. The
television networks compete for affiliations with licensed television stations
through program commitments and local marketing support. From time to time,
local television stations also solicit network affiliations on the basis of
their ability to provide a network better access to a particular market.
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 both by the
demand for advertising time and the popularity of the station's programming.
Most advertising during network programs is sold by the networks, which pay
their affiliated stations negotiated fees for broadcasting such programs and
advertising.
The Company's television broadcast properties compete for advertising
revenues directly with other media such as newspapers (including those owned
and operated by the Company), billboard advertising, magazines, direct mail
advertising, radio, other television stations, cable television systems, and
indirectly, with motion picture theaters and other news and entertainment
media. The success of broadcast operations depends on a number of factors,
including the general strength of the national and local economy, the ability
to provide attractive programming, audience ratings, relative cost efficiency
in reaching audiences as compared to other advertising media, technical
capabilities and governmental regulations and policies.
Each of the three major television networks is represented in each
television market in which the Company has a television broadcast station.
Each of the markets is served by at least two other commercial VHF television
stations and at least two commercial UHF television stations. Competition for
advertising sales and local viewers within each market is intense, particularly
among the network-affiliated commercial VHF television stations. In the
Dallas-Fort Worth market, the other commercial VHF stations are owned by Argyle
Television Holdings, Inc., LIN Broadcasting Corporation and Gaylord
Entertainment Company. In Houston, the other commercial VHF stations are
owned by Capital Cities/ABC, Inc. and H & C Communications, Inc. (sale pending
to The Washington Post Company). In the Sacramento-Stockton-Modesto market,
Kelly Broadcasting Company and Continental Broadcasting Ltd. also own
commercial VHF stations. The Norfolk-Portsmouth-Newport News- Hampton market
is served by two other commercial VHF stations, one owned by LIN Broadcasting
Corporation and the other by Narragansett Capital Associates, L. P.. In the
Tulsa market, the two other commercial VHF stations are owned by Scripps Howard
Inc. and Perpetual Corporations Communications (Allbritton Communications
Company). Fox-affiliated stations also compete in each of Belo's markets for
advertising sales and local viewers. The Fox-affiliated stations in Belo's
broadcast markets are all commercial UHF television stations and are owned by
the following companies: Fox Television Stations, Inc., in Dallas-Fort Worth;
The Fox Network in Houston; Renaissance Communications in
Sacramento-Stockton-Modesto; WTVZ, Inc. in Norfolk-Portsmouth-Newport
News-Hampton; and Clear Channel Television in Tulsa.
REGULATION OF TELEVISION BROADCASTING
The Company's television broadcasting operations are subject to the
jurisdiction of the FCC under the Communications Act of 1934, as amended (the
"Act"). Among other things, the Act empowers the FCC to assign frequency
bands; determine stations' frequencies, location and power; issue, renew,
revoke and modify station licenses; regulate equipment used by stations; impose
penalties for violation of the Act or of FCC regulations; impose fees for
processing applications and other administrative functions; and adopt
regulations to carry out the Act's provisions. The Act also prohibits the
assignment of a broadcast license or the transfer of control of a broadcast
licensee without prior FCC approval. Under the Act, the FCC also regulates
certain aspects of the operation of cable television systems and other
electronic media that compete with broadcast stations.
The Act would prohibit the Company's subsidiaries from continuing as
broadcast licensees if record ownership or power to vote more than one-fourth
of the Company's stock were to be held by aliens or foreign governments or
their representatives, or if an officer or more than one-fourth of the
Company's directors were aliens.
Under the Act, television broadcast licenses may be granted for
maximum periods of five years and are renewable upon proper application for
additional five-year terms. Renewal applications are granted without hearing
if there are no competing applications or issues raised by petitioners to deny
such applications that would cause the
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FCC to order a hearing. A full comparative hearing is required if competing
applications are filed. A federal court of appeals has affirmed an FCC
decision that recognizes an incumbent licensee's "renewal expectancy" based on
substantial service to its community. The precise parameters of licensees'
renewal expectancies in comparative proceedings are ambiguous at the present
time. This ambiguity may lead to new FCC rules or policies as the result of
pending FCC rulemaking proceedings, or Congressional legislation reforming the
comparative renewal process.
Applications for renewal of broadcast licenses for three of the
Company's stations are pending before the FCC. The stations' licenses are by
statute continued pending action thereon. The current license expiration dates
for each of the Company's television broadcast stations are set forth in the
table under "Business-Television Broadcasting."
FCC rules limit the total number of television broadcast 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 percentage of
voting power. FCC rules also place certain limits on common ownership,
operation and control of, or cognizable interests or voting power in, (a)
broadcast stations serving the same area, (b) broadcast stations and daily
newspapers serving the same area and (c) television broadcast stations and
cable systems serving the same area. The Company's ownership of The Dallas
Morning News and WFAA-TV, which are both located in the Dallas-Fort Worth area
and serve the same market area, predate the adoption of the FCC's rules
regarding cross-ownership, and the Company's ownership of The Dallas Morning
News and WFAA has been "grandfathered" by the FCC.
These FCC rules affect the number, type and location of newspaper,
broadcast and cable television properties that the Company might acquire in the
future. For example, under current rules, the Company could not acquire any
daily newspaper, broadcast or cable television properties in a market in which
it now owns or has an interest deemed attributable under Commission rules in a
television station, except that the Commission's rules provide that waivers of
their restrictions could be granted to permit the Company's acquisition of
radio stations in the Dallas, Houston and Sacramento markets. Under current
FCC regulations, and in light of the Company's current investments, the Company
could acquire outright two more television stations (not including "satellite"
television stations which rebroadcast all or most of a parent station's
programming) in other markets without disposing of any stations (provided the
number of television households in the sum of all Company-owned stations' Area
of Dominant Influence ("ADI") did not exceed 25 percent of the total television
households in the nation, counting only 50 percent of ADI households for UHF
stations). The FCC has instituted rulemaking proceedings looking toward
possible relaxation of certain of these rules regulating television station
ownership. The Company recently announced that it has reached an agreement in
principle to purchase WWL-TV in New Orleans, Louisiana. See Note 12 of Notes
to Consolidated Financial Statements on page 36. If the purchase is
consummated, the Company could acquire outright one more television station
under the parameters described above.
The FCC has significantly reduced its past regulation of broadcast
stations, including elimination of formal ascertainment requirements and
guidelines concerning amounts of certain 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, equal employment opportunity, application
procedures and other areas affecting the business or operations of broadcast
stations. The FCC has modified its rules which restrict network participation
in program production and syndication, an action which is the subject of
pending review proceedings. The Supreme Court has refused to review a lower
court decision that upheld FCC action invalidating most aspects of the Fairness
Doctrine, which had required broadcasters to present contrasting views on
controversial issues of public importance. The FCC may, however, continue to
regulate other aspects of fairness obligations in connection with certain types
of broadcasts. The FCC has adopted rules to implement the Children's
Television Act of 1990, which, among other provisions, 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 has adopted various regulations to implement certain
provisions of the Cable Television Consumer Protection and Competition Act of
1992 ("1992 Cable Act") which, among other matters, includes provisions
respecting the carriage of television stations' signals by cable television
systems and requiring mid-license term review of television stations' equal
employment opportunity practices. Certain provisions of the 1992 Cable Act,
including the provisions respecting cable systems' carriage of local television
stations, are the subject of pending judicial review proceedings. The FCC has
also modified its rules to enable local telephone companies to provide a "video
dialtone" service that would be similar to the ordinary telephone dialtone and
would provide access for
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consumers to a wide variety of services including video programming. This
decision is the subject of pending judicial review proceedings.
Proposals for additional or revised regulations and requirements are
pending before and are being considered by Congress and federal regulatory
agencies from time to time. The FCC is at present considering modification or
elimination of rules respecting territorial exclusivity in non-network program
arrangements; rules relating to telephone company ownership of cable television
systems; and policies with respect to high definition television. The Company
cannot predict the effect of existing and proposed federal regulations and
policies on its broadcast business.
The foregoing does not purport to be a complete summary of all the
provisions of the Act or the regulations and policies of the FCC thereunder.
Also, various of the foregoing matters are now, or may become, the subject of
court litigation, and the Company cannot predict the outcome of any such
litigation or the impact on its broadcast business.
EMPLOYEE RELATIONS
As of December 31, 1993, the Company had 2,863 full-time employees.
There are 37 full-time and 17 part-time composing room employees of The Dallas
Morning News represented by a union. The union contract covering these
employees expires on June 19, 1994.
There are 28 full-time and one part-time television broadcasting
employees of WFAA-TV represented by a union under a contract that expires on
September 11, 1994.
ITEM 2. PROPERTIES
The Company's corporate offices and certain departments of The Dallas
Morning News are located in downtown Dallas in a portion of a 17-story office
building owned by the Company.
The Company owns and operates a newspaper printing facility in Plano,
Texas (the "North Plant"), in which eight high-speed offset presses are housed
to print The Dallas Morning News. Expansion of these facilities to accommodate
increased circulation and provide greater publishing flexibility was completed
during 1993.
The remainder of The Dallas Morning News' operations are housed in a
Company-owned five-story building in downtown Dallas. This facility is
equipped with computerized input and photocomposition facilities and other
equipment that is used in the production of both news and advertising copy.
DFW Suburban Newspapers, Inc. and DFW Printing Company, Inc.
operations are located at a Company-owned plant in Arlington, Texas. This
facility is pledged as security for certain industrial revenue bonds issued in
1985.
The studios and offices of WFAA-TV occupy Company-owned facilities in
downtown Dallas. The Company also owns 50 percent of the outstanding capital
stock of Hill Tower, Inc. ("Hill Tower"), owner of a 1,500-foot transmitting
tower and antennas located in Cedar Hill, Texas. The remaining 50 percent of
Hill Tower is owned by the CBS television affiliate in Dallas, a subsidiary of
Argyle Television Holdings, Inc.. This equipment is used by both WFAA and the
CBS television affiliate.
KHOU-TV operates from Company-owned facilities located in Houston.
The station's transmitter is located near DeWalt, Texas and includes a
2,000-foot tower. The facility is wholly-owned by the Company.
KXTV operates from Company-owned facilities located in Sacramento,
California. The station's 2,000-foot tower and transmitter system are located
in Sacramento County, California. The tower and transmitter building are owned
by a joint venture between the Company and a subsidiary of Anchor Media, Ltd.,
which owns and operates the ABC television affiliate in Stockton. KXTV leases
the transmitter site from the joint venture.
WVEC-TV operates from Company-owned facilities in Hampton and Norfolk,
Virginia. The Company-owned transmitting facilities include a 980-foot tower
and antenna in Driver, Virginia. WVEC also leases additional building space
adjacent to the Company-owned facilities, which houses the marketing and
business departments.
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KOTV operates from Company-owned facilities located in Tulsa,
Oklahoma. The station's transmitting system is located near Tulsa. The
transmitter site and 1,839-foot tower are owned by a joint venture between the
Company and Scripps Howard Inc., owner and operator of the NBC television
affiliate in Tulsa. The balance of KOTV's transmitting equipment is owned by
the station.
All of the foregoing subsidiaries have additional leasehold interests
that are used in their respective operations.
The Company also owns certain land and a building located near
downtown Dallas that were acquired from the Dallas Times Herald in December
1991. Sale of this property is expected to be completed in 1994.
The Company believes its properties are in good condition and 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. In the opinion of management,
liabilities, if any, arising from these actions are either covered by insurance
or would not have a material adverse effect on the operations 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 security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year covered by this Form 10-K.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's authorized common equity consists of 150 million shares of
Common Stock, par value $1.67 per share. Currently, 50 million shares are
designated as Series A Common Stock and 15 million shares are designated as
Series B Common Stock. The Series A and Series B shares are identical in all
respects except that Series B shares are entitled to ten votes per share on all
matters submitted to a vote of shareholders, while the Series A shares are
entitled to one vote per share; transferability of the Series B shares is
limited to family members and affiliated entities of the holder; and Series B
shares are convertible at any time on a one-for-one basis into Series A shares.
Shares of the Company's Series A Common Stock are traded on the New York Stock
Exchange (NYSE symbol: BLC).
The following table lists the high and low closing prices and last sale
prices for Series A Common Stock as reported by the New York Stock Exchange for
the last two years.
------------------------------------------------------------------------------------------
DIVIDEND
HIGH LOW CLOSE PAID
------------------------------------------------------------------------------------------
1993
Fourth Quarter 53 44 1/4 53 .14
Third Quarter 49 5/8 45 1/4 46 3/8 .14
Second Quarter 48 3/4 39 3/4 46 3/4 .14
First Quarter 42 5/8 38 3/4 40 1/4 .14
------------------------------------------------------------------------------------------
1992
Fourth Quarter 46 39 1/4 42 .14
Third Quarter 46 3/4 41 1/4 42 3/4 .14
Second Quarter 44 1/4 34 3/8 44 .13
First Quarter 38 1/2 30 3/4 35 .13
------------------------------------------------------------------------------------------
On February 28, 1994, the closing price for the Company's Series A Common
Stock, as reported on the New York Stock Exchange, was $52 1/4 and the
approximate number of shareholders of record of the Series A Common Stock at
the close of business on such date was 720. There is no established public
trading market for shares of Series B Common Stock, and such shares are subject
to significant restrictions on transfer. Series B shares, however, are
convertible at any time into Series A shares on a one-for-one basis. On
February 28, 1994, there were approximately 589 holders of record of shares of
Series B Common Stock.
ITEM 6. SELECTED FINANCIAL DATA
- ---------------------------------------------------------------------------------------------------------------
Dollars in thousands, except per share amounts 1993 1992 1991 1990 1989
- ---------------------------------------------------------------------------------------------------------------
Newspaper publishing revenues $335,642 $314,701 $249,737 $246,493 $237,921
Broadcasting revenues 209,193 201,241 181,848 192,567 179,187
- ---------------------------------------------------------------------------------------------------------------
Net operating revenues $544,835 $515,942 $431,585 $439,060 $417,108
Net earnings (A) $ 51,077 $ 37,170 $ 12,392 $ 29,591 $ 23,394
Per share amounts:
Net earnings per common and
common equivalent share $ 2.53 $ 1.90 $ .65 $ 1.55 $ 1.16
Cash dividends declared $ .56 $ .54 $ .52 $ .48 $ .44
- ---------------------------------------------------------------------------------------------------------------
Total assets (B) $796,156 $758,527 $746,384 $694,255 $701,250
Long-term debt $277,400 $302,151 $337,100 $280,054 $291,011
- ---------------------------------------------------------------------------------------------------------------
(A) Net earnings for 1993 includes an increase of $6,599,000 (33 cents per
share) representing the cumulative effect of adopting Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes", effective January
1, 1993.
(B) In December 1991, the Company purchased substantially all of the
operating assets of the Dallas Times Herald newspaper for $55,673,000. Also
see accompanying Management's Discussion and Analysis of Financial Condition
and Results of Operations and Notes to Consolidated Financial Statements.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
During 1993, net cash provided by operations was $84,818,000, compared to
$78,336,000 in 1992. Cash from operations continues to be Belo's primary
source of liquidity. The $6,482,000 increase in net cash provided by
operations from 1992 to 1993 resulted primarily from increased earnings and
lower payments for taxes. In 1993, cash provided by operations was sufficient
to fund capital expenditures and dividends on common stock and to make
unscheduled repayments of long-term debt. An additional $17,242,000 was
generated through the exercise of stock options in 1993, which was also used to
pay down debt.
At December 31, 1993, Belo had access to a $450,000,000 variable rate revolving
credit agreement on which borrowings at that time were $250,000,000. Belo also
uses short-term unsecured notes from time to time as a source of financing
temporary cash requirements, when rates are favorable. At December 31, 1993,
Belo had $21,000,000 of such short-term notes outstanding. On January 15,
1993, Belo retired its 9.45% Notes due in 1993 in the amount of $100,000,000 by
borrowing under its revolving credit agreement and in December 1993, another
$100,000,000 in 8 5/8% debt was redeemed, also with proceeds from the revolving
credit agreement.
During 1993, Belo entered into agreements that cap at 6 percent the interest on
$75,000,000 of variable rate borrowings. These agreements expire in 1996.
Capital expenditures in 1993 were $60,169,000 (excluding $1,961,000 of
capitalized interest) compared to $26,750,000 (excluding $395,000 of
capitalized interest) in 1992. Nearly 45 percent of these expenditures were
for the expansion of The Dallas Morning News' North Plant production facility.
The expansion project was substantially completed in the third quarter of 1993
and provides increased press capacity and greater publishing flexibility.
Other significant capital additions for 1993 include the replacement of the
news department computer system of The Dallas Morning News, expansion and
renovation of certain Belo broadcast station facilities and completion of a new
transmitter at the Virginia station. In addition, Belo purchased the building
in which its corporate offices and several departments of The Dallas Morning
News are located. The Company expects to finance future capital expenditures
using net cash generated from operations and, when necessary, bank borrowings.
Required future payments for capital expenditures in 1994 are $9,992,000 and
total capital expenditures in 1994 are expected to be approximately
$50,000,000.
Dividends of $11,128,000 were paid in 1993 compared to $10,381,000 in 1992.
These 1993 dividends represent a total of 56 cents per share of outstanding
Series A and Series B Common Stock. Dividends of 54 cents per share were paid
in 1992.
On December 31, 1993, Belo's ratio of long-term debt to total capitalization
was 44.5 percent, compared to 51.8 percent at the end of 1992. The improvement
in 1993 is primarily due to earnings in excess of dividend payments, funds
generated through the exercise of stock options, and a $25,000,000 reduction in
long-term debt.
In December 1993, the Board of Directors authorized purchases of up to
1,000,000 shares of the Company's Series A Common Stock from time to time. The
Company has the authority to purchase approximately 357,000 shares remaining
from a previous Board authorization. In addition, the Company has in place a
repurchase program authorizing the purchase of up to $2,500,000 of Company
stock annually.
Belo believes that its present financial condition and credit relationships
will enable it to adequately meet its current obligations and provide for
future growth.
8
11
RESULTS OF OPERATIONS
Belo recorded 1993 net earnings of $51,077,000 or $2.53 per share, compared to
$37,170,000 ($1.90 per share) in 1992 and $12,392,000 (65 cents per share) in
1991. Earnings in 1993 were affected by certain nonrecurring items, including
a $6,599,000 increase (33 cents per share) representing the cumulative effect
of adopting Statement of Financial Accounting Standards ("SFAS") No. 109 in
January 1993. This increase was partially offset in the third quarter when
Belo recorded a $2,249,000 (11 cents per share) adjustment to deferred taxes
following an increase in the federal income tax rate from 34 percent to 35
percent. Also included in 1993 earnings is a fourth quarter restructuring
charge of $5,822,000 (19 cents per share), related primarily to the write-off
of goodwill and a reduction in the carrying value of production assets
associated with the newspaper operations of Dallas-Fort Worth Suburban
Newspapers, Inc. ("DFWSN"), a wholly-owned subsidiary of Belo. The production
assets adjusted include building and improvements and publishing equipment.
The restructuring decision was made in an effort to streamline operations and
reduce costs of DFWSN's newspaper publishing and commercial printing
operations. The restructuring was substantially completed in January 1994. In
the fourth quarter, Belo reversed certain music license fee accruals totaling
$3,349,000 (10 cents per share). This action was in response to an agreement
between the All Industry Television Music License Committee and the American
Society of Composers, Authors and Publishers, defining the formula used to
compute licensing fees for the use of certain music in television broadcasts
from 1984 to 1994. The formula was approved by a New York Federal District
Court Magistrate in the fourth quarter. Net earnings for 1993 excluding the
above special items were $2.40 per share.
In 1992, net earnings of $37,170,000 or $1.90 cents per share, included a
$4,019,000 (16 cents per share) increase in earnings before taxes from a
property damage settlement with the United States Navy. Excluding this
one-time gain, 1992 earnings were $1.74 per share.
Net earnings in 1991 were hampered by an overall weak economy, especially in
Texas, where Belo's three largest subsidiaries operate. Earnings for 1991 were
also affected by several items, including a favorable Internal Revenue Service
("IRS") settlement which increased net earnings by $6,787,000. Offsetting this
amount, however, were a number of unusual one-time charges, including a
$4,000,000 unfavorable judgment in a lawsuit against one of Belo's broadcast
subsidiaries; a $4,000,000 reserve for a note receivable related to a previous
asset sale; a $1,500,000 settlement of an antitrust lawsuit; a $1,384,000
provision for post-retirement benefits; a $1,259,000 write-down of certain
broadcast film contract rights; and $1,241,000 in early retirement charges.
The net effect on 1991 earnings of these unusual items was a decrease of 7
cents per share. Excluding these items, earnings for 1991 were 72 cents per
share.
Interest expense in 1993 was 37.8 percent less than 1992 interest expense. The
most significant contributing factor to the current year savings was lower
interest rates. In January 1993, Belo replaced $100,000,000 of 9.45 percent
notes with proceeds from the revolving credit agreement, which had an average
interest rate of 3.7 percent during 1993. A similar financing of debt took
place in December 1993, when $100,000,000 of 8 5/8 percent notes were redeemed
using proceeds from the revolving credit agreement. Also contributing to the
decrease in 1993 interest expense was Belo's lower average debt outstanding and
the capitalization of $1,961,000 of interest in 1993 versus 1992 capitalized
interest of $395,000. Interest expense in 1992 was relatively unchanged when
compared to 1991 interest expense.
Other income and expense in 1993 includes a $986,000 gain on the sale of two
parcels of non-operating real estate and several smaller, individually
insignificant items. As noted earlier, 1992's other income and expense
included a gain of $4,019,000 before taxes, related to a property damage
settlement with the United States Navy. Other income and expense for 1991
included the $4,000,000 reserve for a note receivable and $1,500,000 for the
settlement of an antitrust lawsuit.
The Company's effective tax rate in 1993 was 41.1 percent, which compares to
39.6 percent in 1992 and 33.4 percent in 1991. The effective rate in 1993 was
affected by an increase in the federal income tax rate, which resulted in an
increase in current tax expense and a $2,249,000 increase in deferred tax
expense to adjust deferred taxes to the 35 percent rate. The 1993 rate was
favorably impacted by the reversal of certain tax accruals as a result of new
tax legislation regarding amortization of intangibles. The effective rate in
1991 was favorably impacted by reversals of tax accruals related to IRS
settlements.
9
12
NEWSPAPER PUBLISHING
In 1993, newspaper publishing revenues represented 61.6 percent of consolidated
revenues, compared to 61 percent in 1992 and 57.9 percent in 1991. The
composition of revenues in each of these three years was essentially the same,
with advertising accounting for approximately 87 percent, circulation 11
percent and other publishing revenues, primarily commercial printing, 2
percent.
Newspaper advertising volume for The Dallas Morning News, Belo's principal
newspaper, is measured in column inches. Volume for the last three years was
comprised as follows:
----------------------------------------------------------------------------------------------------
In thousands 1993 1992 1991
----------------------------------------------------------------------------------------------------
Full-run ROP inches:
Classified 2,068.8 1,997.6 1,888.3
Retail 1,661.5 1,640.6 1,623.7
General 262.1 279.9 270.4
----------------------------------------------------------------------------------------------------
Total 3,992.4 3,918.1 3,782.4
----------------------------------------------------------------------------------------------------
Total publishing revenues in 1993 were $335,642,000, up 6.7 percent from
revenues of $314,701,000 earned in 1992. Classified advertising revenues were
nearly 11 percent better than last year due to both linage and rate increases.
The increase in linage was primarily attributable to automotive and employment
advertising. Retail and general advertising revenues also improved in 1993
relative to 1992, primarily due to increased rates. Circulation revenues
increased 5.9 percent in 1993 primarily from a January 1, 1993 increase in the
price of a Sunday single-copy and the weekend subscription rate.
Revenues in 1992 of $314,701,000 improved 26 percent over 1991 revenues of
$249,737,000. Higher advertising volumes, combined with rate increases,
generated the 1992 advertising revenue improvement. Average circulation
increased by approximately 25 percent daily and 30 percent Sunday after the
December 1991 closure of the Dallas Times Herald. Based primarily on this
increased circulation, the Company announced a 15 percent rate increase across
substantially all advertising categories, effective on January 15, 1992.
Additional rate increases ranging from 6.5 percent to 11.5 percent were
announced in the third quarter of 1992. The Company also experienced volume
gains in all advertising categories, with the most significant increases in
general and classified advertising.
The Company believes that its advertising rates continue to compare favorably
with competing media and have not negatively affected advertising volumes.
Future demand for advertising in the Dallas-Fort Worth area will continue to
depend on general economic conditions of the Southwest region and the United
States as a whole. Management further believes that increased circulation from
the conversion of former Dallas Times Herald readers was substantially realized
in 1992. Thus, the ability of the Company to generate continued growth in
circulation and advertising revenues will likely depend on the ability of its
newspapers to compete successfully in the highly competitive Dallas-Fort Worth
media market, where numerous news and advertising alternatives are available.
In addition, various market and demographic factors, such as circulation and
readership trends, retail sales activity, inflation and population growth will
also affect future revenues.
Earnings from newspaper publishing operations in 1993 were $44,293,000 after a
$5,822,000 restructuring charge related to DFWSN. Excluding the restructuring
charge, earnings were $50,115,000, an increase of 16.6 percent from 1992.
While total publishing revenues increased 6.7 percent, operating expenses
(excluding the charge) increased only 5.1 percent, resulting in an operating
margin of 14.9 percent versus 13.7 percent in 1992. Salaries, wages and
employee benefits rose primarily as a result of merit increases and an increase
in the number of full-time employees. Newsprint expense was up due to both
increased consumption associated with the linage increase and a higher average
cost per ton. Contributing to the increase in linage was the publishing of
special sports sections in connection with the Dallas Cowboys' appearance in
the Super Bowl. The volume variance accounted for approximately 60 percent of
the overall increase in newsprint expense. In addition, expansion of delivery
routes resulted in increased distribution expenses. Depreciation expense was
higher in 1993 than in 1992 following the completion of The Dallas Morning News
North Plant expansion project. Partially offsetting these increases were
savings in outside services, bad debt expense and property taxes.
10
13
Earnings from publishing operations increased to $42,974,000 in 1992 from
$21,417,000 in 1991, resulting in operating margins of 13.7 percent and 8.6
percent, respectively. Revenue increases outpaced higher operating costs,
resulting in operating margin improvement. The 1992 increase in salaries,
wages and employee benefits was from merit increases, more employees, higher
benefit costs and incentive bonuses. Newsprint consumed, and consequently
newsprint costs, were higher in 1992 compared to 1991 due to the increase in
circulation mentioned before. However, a significant decline in the average
price of newsprint in 1992 helped to mitigate the volume variance.
Amortization of intangibles was included in 1992 earnings from newspaper
publishing operations for the first time following the December 1991 purchase
of an intangible asset from the Dallas Times Herald.
BROADCASTING
Belo's five television broadcast subsidiaries contributed 38.4 percent of total
1993 revenues compared to 39 percent in 1992 and 42.1 percent in 1991.
Broadcast revenues for 1993 of $209,193,000 increased 4 percent over 1992
revenues of $201,241,000. In 1992, revenues improved 10.7 percent from the
$181,848,000 of the previous year. Broadcast revenues for the last three years
were derived as follows:
--------------------------------------------------------------------------------
1993 1992 1991
--------------------------------------------------------------------------------
National advertising 48% 47% 48%
Local advertising 42% 41% 41%
Other revenue 10% 12% 11%
--------------------------------------------------------------------------------
The broadcast revenue mix has been relatively stable over the last three years,
with a slight variation in 1992 other revenue due to higher political
advertising.
Local and national advertising revenues in 1993 increased 6.2 percent and 6.6
percent, respectively, compared to 1992 revenues. Stations in Houston,
Virginia and Tulsa combined for an overall revenue gain of $9,266,000 while
Dallas station revenues were relatively flat and the California station
experienced a slight revenue decline. In 1993, all of Belo's broadcast
stations with the exception of the Dallas station experienced an increase in
local advertising revenues. National advertising revenues increased at all but
Belo's California station. Contributing factors to the 1993 improvements
include strong ratings performances, healthier local economies and competitive
pricing strategies. The industry categories contributing the most to
advertising revenues were restaurants, automobiles, department stores and
health care. Partially offsetting these revenue gains, however, were a
significant decrease in political advertising compared to 1992, a weaker
California economy and the effect of competitive forces.
The favorable revenue performance in 1992 compared to 1991 was due to improved
demand for both local and national advertising, combined with a higher than
expected volume of political advertising for national, state and local
elections. Political revenues in 1992 were $4,780,000 higher than in 1991,
accounting for 25 percent of the overall year-to-year increase. National and
local advertising increased by 9.8 percent and 9 percent, respectively, in 1992
from 1991. National advertising revenues were higher in 1992, due, in part, to
broadcast of the Super Bowl and Winter Olympics by Belo's three CBS-affiliated
stations.
Broadcast earnings from operations for 1993 were $63,240,000, including a
$3,349,000 increase related to the reversal of certain music license fee
accruals. Excluding the music license fee adjustment, earnings from broadcast
operations were $59,891,000 compared to $56,461,000 in 1992, an increase of 6.1
percent. In addition to the overall 4 percent increase in revenues, operating
costs increased only 3.3 percent, excluding the music license fee adjustment.
Contributing to the increase in 1993 expenses were higher salaries, wages and
employee benefits due to merit increases, higher benefit costs and an increase
in the number of employees in the broadcast division. Communications and
travel expenses were higher in 1993 than in 1992 due to coverage of significant
news stories, including the Dallas Cowboys' trip to the 1993 Super Bowl, the
Presidential Inauguration, and the Branch Davidian story in Waco, Texas.
These increases were partially offset by savings in 1993 programming expense.
Earnings from broadcast operations were $56,461,000 in 1992, compared with
$41,553,000 in 1991. The 1991 broadcast earnings were reduced by several
one-time charges, including a $4,000,000 charge for an unfavorable judgment in
an employment-related lawsuit, a $1,259,000 write-down of certain broadcast
film contract rights and a $788,000 charge for early retirement costs.
Excluding these items, comparable earnings increased by $8,861,000 in 1992 from
1991. The increase in broadcast earnings resulted from the $19,393,000
increase in revenues, partially offset by increases in salary and benefit costs
due to merit increases, health care expenses and incentive compensation.
11
14
In recent years, the television broadcast industry has been affected by
increased competition for viewing audiences. Belo continues to compete
aggressively for advertisers and viewing audiences in markets that offer many
alternative media outlets. Future earnings growth will likely depend on the
ability to offer competitive audience delivery to advertisers and on general
economic conditions.
OTHER MATTERS
On February 23, 1994, Belo announced an agreement in principle to purchase the
assets of WWL-TV, the CBS affiliate in New Orleans, Louisiana for $110,000,000.
Belo intends to borrow funds from its revolving credit agreement to complete
the transaction. The transaction, which is subject to the signing of a
definitive agreement, as well as customary closing conditions, including
approval by appropriate government agencies, will be accounted for as a
purchase. The Company expects that a definitive agreement will be entered into
by early spring and that the transaction will be completed during the third
quarter of 1994.
At the end of 1993, Belo adjusted the discount rate used in computing the
accumulated pension benefit obligation from 9 percent to 7.5 percent and
changed the expected rate of return on plan assets from 11 percent to 10.25
percent. The effect of these changes is expected to increase 1994 pension
costs by approximately $2,000,000.
In 1993, the Financial Accounting Standards Board released SFAS No. 112,
"Employers' Accounting for Postemployment Benefits." The requirements of the
standard, which relate primarily to workers' compensation, disability,
severance pay and other benefits provided after employment but before
retirement, do not differ significantly from existing accounting practices
employed by the Company. Therefore, planned adoption of the standard in
January 1994 is not expected to significantly affect the Company's net
earnings.
In the Cable Television Consumer Protection and Competition Act of 1992,
Congress gave commercial broadcast stations new rights with respect to cable
television systems located in the television markets they serve. Under this
new law, each commercial broadcast station has the right, at its election,
either to demand that their signal be carried on local cable television systems
or, alternatively, to require these cable systems to obtain the station's
consent in order to retransmit the broadcast station's signal. The Company's
broadcast stations have elected the retransmission consent right with respect
to most local cable systems. The Company's broadcast stations have completed
agreements granting retransmission consent in exchange for various forms of
consideration with substantially all of the cable systems in the television
markets in which such stations are located. While some of these agreements are
short-term, expiring within the next few months, the Company anticipates that
it will be able to replace these with longer-term agreements before their
expiration.
The net effect of inflation on Belo's operations and net income has not been
material in the last few years because of a relatively low rate of inflation
during this period and because of efforts to lessen the effect of rising costs
through a strategy of improved productivity, cost control and, when warranted,
increased prices.
12
15
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements, together with the report of
independent auditors and financial statement schedules, are included on pages
21 through 42 of this document. Financial statement schedules other than those
included have been omitted because the required information is contained in the
consolidated financial statements or related notes, or such information is not
applicable.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information set forth under the headings "Outstanding Capital
Stock and Stock Ownership of Directors and Principal Shareholders," "Executive
Officers of the Company" and "Election of Directors" contained in the
definitive Proxy Statement for the Company's Annual Meeting of Shareholders to
be held on May 4, 1994, is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information set forth under the heading "Executive Compensation
and Other Matters" and "Election of Directors" contained in the definitive
Proxy Statement for the Company's Annual Meeting of Shareholders to be held on
May 4, 1994, is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information set forth under the heading "Outstanding Capital Stock
and Stock Ownership of Directors and Principal Shareholders" in the definitive
Proxy Statement for the Company's Annual Meeting of Shareholders to be held on
May 4, 1994, is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth under the headings "Executive Compensation
and Other Matters" and "Election of Directors" contained in the definitive
Proxy Statement for the Company's Annual Meeting of Shareholders to be held on
May 4, 1994, is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) The financial statements listed in the Index to Financial
Statements and Schedules included in the Table of Contents are
filed as part of this report.
(2) The schedules listed in the Index to Financial Statements and
Schedules included in the Table of Contents are filed as part
of this report.
(3) Exhibits
Certain of the exhibits to this report are hereby incorporated
by reference, as specified:
13
16
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
3.1 Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to the Company's Annual Report on Form
10-K dated March 19, 1992 (the "1991 Form 10-K"))
3.2 Certificate of Correction to Certificate of Incorporation dated
May 13, 1987 (incorporated by reference to Exhibit 3.2 to the
Company's Annual Report on Form 10-K dated March 18, 1993 (the
"1992 Form 10-K"))
3.3 Certificate of Designation of Series A Junior Participating
Preferred Stock of the Company dated April 16, 1987
(incorporated by reference to Exhibit 3.3 to the 1991 Form 10-K)
3.4 Certificate of Amendment of Certificate of Incorporation of the
Company dated May 4, 1988 (incorporated by reference to Exhibit
3.4 to the 1992 Form 10-K)
3.5 Amended Certificate of Designation of Series A Junior
Participating Preferred Stock of the Company dated May 4, 1988
(incorporated by reference to Exhibit 3.5 to the 1992 Form 10-K)
3.6 Certificate of Designation of Series B Common Stock of the
Company dated May 4, 1988 (incorporated by reference to Exhibit
3.6 to the 1992 Form 10-K)
3.7 Bylaws of the Company, effective December 16, 1992 (incorporated
by reference to Exhibit 3.7 to the 1992 Form 10-K)
4.1 Certain rights of the holders of the Company's Common Stock are
set forth in Exhibits 3.1-3.6 above
4.2 Specimen Form of Certificate representing shares of the
Company's Series A Common Stock (incorporated by reference to
Exhibit 4.2 to the 1992 Form 10-K)
4.3 Specimen Form of Certificate representing shares of the
Company's Series B Common Stock (incorporated by reference to
Exhibit 4.3 to the Company's Annual Report on Form 10-K dated
March 20, 1989)
4.4 Form of Rights Agreement, dated March 10, 1986 between the
Company and RepublicBank Dallas, National Association as Rights
Agent, which includes as Exhibit B thereto the Form of Right
Certificate (incorporated by reference to Exhibit 4.8 to the
1991 Form 10-K)
4.5 Supplement No. 1 to Rights Agreement (incorporated by reference
to Exhibit 4.9 to the 1991 Form 10-K)
4.6 Supplement No. 2 to Rights Agreement (incorporated by reference
to Exhibit 4.9 to the 1992 Form 10-K)
4.7 Supplement No. 3 to Rights Agreement (incorporated by reference
to Exhibit 4.10 to the 1992 Form 10-K)
4.8 Supplement No. 4 to Rights Agreement dated December 12, 1988
substituting Manufacturers Hanover Trust Company as Rights Agent
4.9 Supplement No. 5 to Rights Agreement (incorporated by reference
to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 1993)
10.1 Contracts relating to television broadcasting:
(1) Contract for Affiliation between KOTV in Tulsa,
Oklahoma and CBS, with Network Affiliation Consent
(incorporated by reference to Exhibit 10.1(1) to the
1991 Form 10-K)
(2) Contract for Affiliation between KHOU-TV in Houston,
Texas and CBS, with Network Affiliation Consent
(incorporated by reference to Exhibit 10.1(2) to the
1991 Form 10-K)
14
17
EXHIBIT
NUMBER DESCRIPTION
------- -----------
(3) Letter Amendment, dated June 11, 1993, to Contract
for Affiliation between KHOU-TV in Houston, Texas and
CBS
(4) Contract for Affiliation between KXTV in Sacramento,
California and CBS (incorporated by reference to
Exhibit 10.3 to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended March 31,
1993 (the "First Quarter 1993 Form 10-Q"))
(5) Contract for Affiliation between WFAA-TV in Dallas,
Texas and ABC, with Network Affiliation Consent
(incorporated by reference to Exhibit 10.1(4) to the
Company's Annual Report on Form 10-K dated March 28,
1991 (the "1990 Form 10-K"))
(6) Rider One to Contract for Affiliation between WFAA-TV
in Dallas, Texas and ABC (incorporated by reference
to Exhibit 10.1 to the First Quarter 1993 Form 10-Q)
(7) Contract for Affiliation between WVEC-TV in
Hampton-Norfolk, Virginia and ABC, with Network
Affiliation Consent (incorporated by reference to
Exhibit 10.1(5) to the 1991 Form 10-K)
10.2 Contracts relating to newspaper publication:
(1) Founding agreement dated July 28, 1987 between the
Company and Newsprint South, Inc. for newsprint
supply (incorporated by reference to Exhibit 10.2(2)
to the 1990 Form 10-K)
(2) Amendment to the founding agreement dated June 30,
1990 between the Company and Newsprint South, Inc.
for newsprint supply (incorporated by reference to
Exhibit 10.2(3) to the 1990 Form 10-K)
10.3 (1) Management Security Plan (incorporated by reference
to Exhibit 10.4(1) to the 1991 Form 10-K)
(2) Stock Option Plan (incorporated by reference to
Exhibit 10.4(2) to the 1991 Form 10-K)
(3) Amendment to Stock Option Plan by the Compensation
Committee of the Board of Directors (incorporated by
reference to Exhibit 10.4(3) to the 1991 Form 10-K)
(4) Amendments to Stock Option Plan (incorporated by
reference to Exhibit 10.4(4) to the 1991 Form 10-K)
(5) Amendment to Stock Option Plan dated December 19,
1986 (incorporated by reference to Exhibit 10.4(5) to
the 1991 Form 10-K)
(6) Amendment to Stock Option Plan dated February 22, 1989
(7) 1986 Long-Term Incentive Plan (incorporated by
reference to Exhibit 10.4(7) to the 1991 Form 10-K)
(8) Amendment No. 1 to 1986 Long-Term Incentive Plan
dated October 22, 1986 (incorporated by reference to
Exhibit 10.4(8) to the 1991 Form 10-K)
(9) Amendment No. 2 to 1986 Long-Term Incentive Plan
effective January 1, 1987 (incorporated by reference
to Exhibit 10.3(9) to the 1992 Form 10-K)
(10) Amendment No. 3 to 1986 Long-Term Incentive Plan
dated May 4, 1988
15
18
EXHIBIT
NUMBER DESCRIPTION
------- -----------
(11) Amendment No. 4 to 1986 Long-Term Incentive Plan dated May
13, 1988
(12) Amendment No. 5 to 1986 Long-Term Incentive Plan dated
February 22, 1989
(13) Amendment No. 6 to 1986 Long-Term Incentive Plan dated May
6, 1992 (incorporated by reference to Exhibit 10.3(13) to
the 1992 Form 10-K)
(14) The A. H. Belo Corporation Employee Savings and Investment
Plan (incorporated by reference to Exhibit 10.4(13) to the
Company's Annual Report on Form 10-K dated March 27, 1990
(the "1989 Form 10-K"))
(15) First Amendment to the A. H. Belo Corporation Employee
Savings and Investment Plan, dated January 29, 1992
(incorporated by reference to Exhibit 10.3(15) to the 1992
Form 10-K)
(16) Second Amendment to the A. H. Belo Corporation Employee
Savings and Investment Plan, dated October 22, 1992
(incorporated by reference to Exhibit 10.3(16) to the 1992
Form 10-K)
(17) Third Amendment to the A. H. Belo Corporation Employee
Savings and Investment Plan (incorporated by reference to
Exhibit 10.2 to the First Quarter 1993 Form 10-Q)
(18) Fourth Amendment to the A. H. Belo Corporation Employee
Savings and Investment Plan (incorporated by reference to
Exhibit 4.14 to Post-Effective Amendment No. 1 to Form S-8
(Registration No. 33-30994))
(19) Fifth Amendment to the A. H. Belo Corporation Employee
Savings and Investment Plan
(20) The G. B. Dealey Retirement Pension Plan (as amended and
restated effective January 1, 1988)
(21) First Amendment to the G. B. Dealey Retirement Pension Plan
(22) Second Amendment to the G. B. Dealey Retirement Pension Plan
(23) Third Amendment to the G. B. Dealey Retirement Pension Plan
(24) Fourth Amendment to the G. B. Dealey Retirement Pension Plan
(25) Fifth Amendment to the G. B. Dealey Retirement Pension Plan
(26) Master Trust Agreement, effective as of July 1, 1992,
between A. H. Belo Corporation and Mellon Bank, N. A.
(27) A. H. Belo Corporation Supplemental Executive Retirement
Plan
(28) Trust Agreement dated February 28, 1994, between the
Company and Mellon Bank, N. A.
(29) Summary of A. H. Belo Corporation Executive Compensation
Program (incorporated by reference to Exhibit 10.3(18) to
the 1992 Form 10-K)
(30) Employment and Consultation Agreement between A. H. Belo
Corporation and James P. Sheehan (incorporated by reference
to Exhibit 10.1 to the Company's Quarterly Report on Form
10-Q for the quarterly period ended September 30, 1993)
10.4 (1) Credit Agreement dated October 27, 1988, between the
Company and The First National Bank of Chicago as Managing
Agent (incorporated by reference to Exhibit 10.4(1) to the
1992 Form 10-K)
16
19
EXHIBIT
NUMBER DESCRIPTION
------- -----------
(2) Amendment No. 1 to 1988 Credit Agreement between the
Company and The First National Bank of Chicago as
Managing Agent dated November 8, 1989 (incorporated
by reference to Exhibit 10.5(4) to the 1990 Form
10-K)
(3) Amendment No. 2 to 1988 Credit Agreement between the
Company and The First National Bank of Chicago as
Managing Agent dated April 24, 1991 (incorporated by
reference to Exhibit 10.5(5) to the 1991 Form 10-K)
(4) Amendment Agreement dated May 14, 1992, between the
Company and The First National Bank of Chicago as
Managing Agent (incorporated by reference to Exhibit
10.4(4) to the 1992 Form 10-K)
(5) Amendment Agreement dated November 6, 1992, between
the Company and The First National Bank of Chicago as
Managing Agent (incorporated by reference to Exhibit
10.4(5) to the 1992 Form 10-K)
(6) Loan Agreement dated October 1, 1985, between City of
Arlington Industrial Development Corporation and
Dallas-Fort Worth Suburban Newspapers, Inc.
(incorporated by reference to Exhibit 10.5(2) to the
1991 Form 10-K)
(7) Letter of Credit and Reimbursement Agreement dated as
of June 2, 1987, between Dallas-Fort Worth Suburban
Newspapers, Inc. and The Sanwa Bank, Limited, Dallas
Agency covering $6,400,000 City of Arlington
Industrial Development Corporation Industrial
Development Revenue Bonds (incorporated by reference
to Exhibit 10.5(3) to the 1991 Form 10-K)
(8) Amendment and Waiver Agreement dated as of December
30, 1992, by and between the Company and The Sanwa
Bank, Limited, Dallas Agency (incorporated by
reference to Exhibit 10.4(8) to the 1992 Form 10-K)
10.5 Joint Venture Agreement dated August 1, 1989, between the
Company and Universal Press Syndicate (incorporated by
reference to Exhibit 10.6 to the 1989 Form 10-K)
21 Subsidiaries of the Company
23 Consent of Ernst & Young
Executive Compensation Plans and Arrangements:
Management Security Plan--1991 Form 10-K, Exhibit 10.4(1)
Stock Option Plan--1991 Form 10-K, Exhibit 10.4(2)
Amendment to Stock Option Plan by the Compensation Committee of the Board of
Directors--1991 Form 10-K, Exhibit 10.4(3)
Amendments to Stock Option Plan--1991 Form 10-K, Exhibit 10.4(4)
Amendment to Stock Option Plan dated December 19, 1986--1991 Form 10-K,
Exhibit 10.4(5)
Amendment to Stock Option Plan dated February 22, 1989--filed herewith as
Exhibit 10.3(6)
1986 Long-Term Incentive Plan--1991 Form 10-K, Exhibit 10.4(7)
17
20
Amendment No. 1 to 1986 Long-Term Incentive Plan dated October 22, 1986--
1991 Form 10-K, Exhibit 10.4(8)
Amendment No. 2 to 1986 Long-Term Incentive Plan effective January 1, 1987--
1992 Form 10-K, Exhibit 10.3(9)
Amendment No. 3 to 1986 Long-Term Incentive Plan dated May 4, 1988--filed
herewith as Exhibit 10.3(10)
Amendment No. 4 to 1986 Long-Term Incentive Plan dated May 13, 1988--filed
herewith as Exhibit 10.3(11)
Amendment No. 5 to 1986 Long-Term Incentive Plan dated February 22, 1989
--filed herewith as Exhibit 10.3(12)
Amendment No. 6 to 1986 Long-Term Incentive Plan dated May 6, 1992--1992
Form 10-K Exhibit 10.3(13)
The A. H. Belo Corporation Employee Savings and Investment Plan--1989 Form
10-K, Exhibit 10.4(13)
First Amendment to the A. H. Belo Corporation Employee Savings and
Investment Plan, dated January 29, 1992--1992 Form 10-K, Exhibit 10.3(15)
Second Amendment to the A. H. Belo Corporation Employee Savings and
Investment Plan, dated October 22, 1992--1992 Form 10-K, Exhibit 10.3(16)
Third Amendment to the A. H. Belo Corporation Employee Savings and
Investment Plan--First Quarter 1993 Form 10-Q, Exhibit 10.2
Fourth Amendment to the A. H. Belo Corporation Employee Savings and
Investment Plan--Post-Effective Amendment No. 1 to Form S-8, Exhibit 4.14
Fifth Amendment to the A. H. Belo Corporation Employee Savings and
Investment Plan--filed herewith as Exhibit 10.3(19)
The G. B. Dealey Retirement Pension Plan (as amended and restated effective
January 1, 1988)--filed herewith as Exhibit 10.3(20)
First Amendment to the G. B. Dealey Retirement Pension Plan--filed herewith
as Exhibit 10.3(21)
Second Amendment to the G. B. Dealey Retirement Pension Plan--filed
herewith as Exhibit 10.3(22)
Third Amendment to the G. B. Dealey Retirement Pension Plan--filed herewith
as Exhibit 10.3(23)
Fourth Amendment to the G. B. Dealey Retirement Pension Plan--filed
herewith as Exhibit 10.3(24)
Fifth Amendment to the G. B. Dealey Retirement Pension Plan--filed herewith
as Exhibit 10.3(25)
A. H. Belo Corporation Supplemental Executive Retirement Plan--filed
herewith as Exhibit 10.3(27)
Summary of A. H. Belo Corporation Executive Compensation Program--1992 Form
10-K, Exhibit 10.3(18)
Employment and Consultation Agreement between A. H. Belo Corporation and
James P. Sheehan--Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 1993, Exhibit 10.1
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
18
21
SIGNATURES
Pursuant to the requirements of Sections 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.
A. H. BELO CORPORATION
By: /s/ Robert W. Decherd
Robert W. Decherd
Chairman of the Board, President
& Chief Executive Officer
Dated: March 18, 1994
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, President March 18, 1994
Robert W. Decherd & Chief Executive Officer
/S/Ward L. Huey, Jr. Vice Chairman of the March 18, 1994
Ward L. Huey, Jr. Board and President of the
Company's Broadcast Division
/S/Burl Osborne Director, Publisher March 18, 1994
Burl Osborne and Editor of The Dallas
Morning News, Inc.
/S/John W. Bassett, Jr. Director March 18, 1994
John W. Bassett, Jr.
/S/Judith L. Craven, M.D., M.P.H. Director March 18, 1994
Judith L. Craven, M.D., M.P.H.
/S/Joe M. Dealey Director and Former March 18, 1994
Joe M. Dealey Chairman of the Board
/S/Dealey D. Herndon Director March 18, 1994
Dealey D. Herndon
/S/Lester A. Levy Director March 18, 1994
Lester A. Levy
/S/Arturo Madrid, Ph.D. Director March 18, 1994
Arturo Madrid, Ph.D.
19
22
SIGNATURE TITLE DATE
--------- ----- ----
/S/James M. Moroney, Jr. Director and Former March 18, 1994
James M. Moroney, Jr. Chairman of the Board
/S/Reece A. Overcash, Jr. Director March 18, 1994
Reece A. Overcash, Jr.
/S/Hugh G. Robinson Director March 18, 1994
Hugh G. Robinson
/S/William H. Seay Director March 18, 1994
William H. Seay
/S/William T. Solomon Director March 18, 1994
William T. Solomon
/S/Thomas B. Walker, Jr. Director March 18, 1994
Thomas B. Walker, Jr.
/S/J. McDonald Williams Director March 18, 1994
J. McDonald Williams
/S/Michael D. Perry Senior Vice President and March 18, 1994
Michael D. Perry Chief Financial Officer
/S/Dunia A. Shive Controller March 18, 1994
Dunia A. Shive
20
23
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
A. H. Belo Corporation
We have audited the accompanying consolidated balance sheets of A. H. Belo
Corporation and subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of earnings, shareholders' equity, and cash flows for
each of the three years in the period ended December 31, 1993. Our audit also
included the financial statement schedules listed in the Index at Item 14(a).
These financial statements and schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of A. H. Belo
Corporation and subsidiaries at December 31, 1993 and 1992, and the
consolidated results of their operations and cash flows for each of the three
years in the period ended December 31, 1993, in conformity with generally
accepted accounting principles. Also in our opinion, the related financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly, in all material respects, the
information set forth therein.
As discussed in Note 5 to the consolidated financial statements, effective
January 1, 1993, the Company changed its method of accounting for income taxes.
/s/ERNST & YOUNG
Dallas, Texas
January 26, 1994,
except for Note 12, as to which the date is February 23, 1994.
21
24
CONSOLIDATED STATEMENTS OF EARNINGS
A. H. Belo Corporation and Subsidiaries
Years ended December 31,
- -----------------------------------------------------------------------------------------------------------------------------
In thousands, except per share amounts 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------
NET OPERATING REVENUES
Newspaper publishing $ 335,642 $314,701 $249,737
Broadcasting 209,193 201,241 181,848
- -----------------------------------------------------------------------------------------------------------------------------
Total net operating revenues 544,835 515,942 431,585
- -----------------------------------------------------------------------------------------------------------------------------
OPERATING COSTS AND EXPENSES
Salaries, wages and employee benefits (Note 6) 161,170 149,139 125,515
Newsprint, ink and other supplies 105,395 97,498 86,427
Other production, distribution and operating costs (Note 8) 145,310 151,640 137,722
Depreciation 25,281 23,547 22,965
Amortization 12,383 12,492 11,099
Restructuring charge (Note 2) 5,822 - -
- -----------------------------------------------------------------------------------------------------------------------------
Total operating costs and expenses 455,361 434,316 383,728
- -----------------------------------------------------------------------------------------------------------------------------
Earnings from operations 89,474 81,626 47,857
- -----------------------------------------------------------------------------------------------------------------------------
OTHER INCOME AND EXPENSE
Interest expense (Note 4) (15,015) (24,159) (23,882)
Other, net 1,119 4,106 (5,370)
- -----------------------------------------------------------------------------------------------------------------------------
Total other income and expense (13,896) (20,053) (29,252)
- -----------------------------------------------------------------------------------------------------------------------------
EARNINGS
Earnings before income taxes and cumulative
effect of change in accounting 75,578 61,573 18,605
Income taxes (Note 5) 31,100 24,403 6,213
- -----------------------------------------------------------------------------------------------------------------------------
Earnings before cumulative effect of change in accounting 44,478 37,170 12,392
Cumulative effect of change in accounting for
income taxes (Note 5) 6,599 - -
- -----------------------------------------------------------------------------------------------------------------------------
Net earnings $ 51,077 $ 37,170 $ 12,392
- -----------------------------------------------------------------------------------------------------------------------------
EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
Earnings before cumulative effect of change in accounting $ 2.20 $ 1.90 $ .65
Cumulative effect of change in accounting $ .33 $ - $ -
Net earnings $ 2.53 $ 1.90 $ .65
- -----------------------------------------------------------------------------------------------------------------------------
Weighted average common and common equivalent
shares outstanding 20,204 19,567 19,110
- -----------------------------------------------------------------------------------------------------------------------------
See accompanying Notes to Consolidated Financial Statements.
22
25
CONSOLIDATED BALANCE SHEETS
A. H. Belo Corporation and Subsidiaries
ASSETS December 31,
- ------------------------------------------------------------------------------------------------------------------------
In thousands 1993 1992
- ------------------------------------------------------------------------------------------------------------------------
Current assets:
Cash and temporary cash investments $ 8,943 $ 2,683
Accounts receivable (net of allowance of
$3,684 and $3,475 in 1993 and 1992, respectively) 80,023 75,021
Inventories 11,734 8,569
Deferred income taxes (Note 5) 6,053 7,377
Other current assets 10,632 8,778
- ------------------------------------------------------------------------------------------------------------------------
Total current assets 117,385 102,428
- ------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment, at cost:
Land 15,065 14,575
Buildings 116,466 89,350
Newspaper publishing equipment 183,211 139,632
Broadcast equipment 93,276 87,426
Other 35,610 34,667
Advance payments on plant and equipment
expenditures (Note 8) 8,679 42,136
- ------------------------------------------------------------------------------------------------------------------------
Total property, plant and equipment 452,307 407,786
Less accumulated depreciation 182,295 170,409
- ------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment, net 270,012 237,377
- ------------------------------------------------------------------------------------------------------------------------
Intangible assets, net:
Excess cost over values assigned to tangible
assets of purchased subsidiaries 333,880 346,648
Other intangibles 20,221 21,743
- ------------------------------------------------------------------------------------------------------------------------
Total intangible assets, net 354,101 368,391
- ------------------------------------------------------------------------------------------------------------------------
Other assets, at cost (Note 6) 54,658 50,331
- ------------------------------------------------------------------------------------------------------------------------
Total assets $ 796,156 $758,527
========================================================================================================================
23
26
CONSOLIDATED BALANCE SHEETS (CONTINUED)
A. H. Belo Corporation and Subsidiaries
LIABILITIES AND SHAREHOLDERS' EQUITY December 31,
- -------------------------------------------------------------------------------------------------------------------
In thousands, except share data 1993 1992
- -------------------------------------------------------------------------------------------------------------------
Current liabilities:
Accounts payable $ 16,555 $ 18,296
Accrued compensation and benefits 20,092 17,626
Other accrued expenses 12,895 18,087
Accrued interest payable 2,219 5,881
Advance subscription payments 6,913 6,508
Income taxes payable (Note 5) 1,057 3,318
- -------------------------------------------------------------------------------------------------------------------
Total current liabilities 59,731 69,716
- -------------------------------------------------------------------------------------------------------------------
Long-term debt (Note 4) 277,400 302,151
Deferred income taxes (Note 5) 107,308 101,707
Other liabilities (Note 6) 5,618 3,711
Commitments and contingent liabilities (Note 8)
Shareholders' equity (Notes 7 and 9):
Preferred stock, $1.00 par value. Authorized
5,000,000 shares; none issued.
Common stock, $1.67 par value. Authorized
150,000,000 shares;
Series A: Issued 14,467,182 and 13,433,969 shares
in 1993 and 1992, respectively; 24,161 22,435
Series B: Issued 5,743,099 and 6,157,489 shares
in 1993 and 1992, respectively. 9,591 10,283
Additional paid-in capital 116,451 94,005
Retained earnings 201,246 161,297
- -------------------------------------------------------------------------------------------------------------------
Total 351,449 288,020
Less deferred compensation - restricted shares 5,350 6,778
- -------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 346,099 281,242
- -------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 796,156 $ 758,527
- -------------------------------------------------------------------------------------------------------------------
See accompanying Notes to Consolidated Financial Statements.
24
27
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
A. H. Belo Corporation and Subsidiaries
Dollars in thousands, except share and per share amounts Three years ended December 31, 1993
- ----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK TREASURY STOCK
Additional
Shares Shares Paid-in Retained Shares
Series A Series B Amount Capital Earnings Series A Amount
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT JAN. 1, 1991 14,314,857 6,781,517 $35,231 $77,773 $215,663 (2,369,644) $(97,433)
Exercise of stock options 52,215 96,350 247 3,119
Shares received upon cancellation
of restricted shares (22,869) (720)
Shares received upon
exercise of options (69,752) (2,136)
Restricted shares awarded 72,160 122 2,019
Amortization of restricted
shares
Tax benefit from long-term
incentive plan 440
Purchase of treasury stock (11,600) (355)
Retirement of treasury stock (2,473,865) (4,132) (12,725) (83,787) 2,473,865 100,644
Net earnings 12,392
Cash dividends declared
($.52 per share) (9,760)
Conversion of Series B
to Series A 210,242 (210,242)
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DEC. 31, 1991 12,175,609 6,667,625 $31,468 $70,626 $134,508 - -
Exercise of stock options 513,696 183,698 1,165 16,100
Restricted shares awarded 50,830 85 2,871
Amortization of restricted
shares
Tax benefit from long-term
incentive plan 4,408
Net earnings 37,170
Cash dividends declared
($.54 per share) (10,381)
Conversion of Series B
to Series A 693,834 (693,834)
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DEC. 31, 1992 13,433,969 6,157,489 $32,718 $94,005 $161,297 - -
Exercise of stock options 505,295 87,326 990 16,252
Restricted shares awarded 37,192 62 2,576
Amortization of restricted
shares
Forfeiture of restricted
shares (10,990) (18) (450)
Tax benefit from long-term
incentive plan 4,068
Net earnings 51,077
Cash dividends declared
($.56 per share) (11,128)
Conversion of Series B
to Series A 501,716 (501,716)
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DEC. 31, 1993 14,467,182 5,743,099 $33,752 $116,451 $201,246 - -
- ----------------------------------------------------------------------------------------------------------------------------------
Deferred
Compensation
Restricted
Shares Total
- -------------------------------------------------------------
BALANCE AT JAN. 1, 1991 $(7,013) $224,221
Exercise of stock options 3,366
Shares received upon cancellation
of restricted shares 720 -
Shares received upon
exercise of options (2,136)
Restricted shares awarded (2,141) -
Amortization of restricted
shares 1,889 1,889
Tax benefit from long-term
incentive plan 440
Purchase of treasury stock (355)
Retirement of treasury stock -
Net earnings 12,392
Cash dividends declared
($.52 per share) (9,760)
Conversion of Series B
to Series A -
- -------------------------------------------------------------
BALANCE AT DEC. 31, 1991 $(6,545) $230,057
Exercise of stock options 17,265
Restricted shares awarded (2,956) -
Amortization of restricted
shares 2,723 2,723
Tax benefit from long-term
incentive plan 4,408
Net earnings 37,170
Cash dividends declared
($.54 per share) (10,381)
Conversion of Series B
to Series A -
- -------------------------------------------------------------
BALANCE AT DEC. 31, 1992 $(6,778) $281,242
Exercise of stock options 17,242
Restricted shares awarded (2,638) -
Amortization of restricted
shares 3,781 3,781
Forfeiture of restricted
shares 285 (183)
Tax benefit from long-term
incentive plan 4,068
Net earnings 51,077
Cash dividends declared
($.56 per share) (11,128)
Conversion of Series B
to Series A -
- -------------------------------------------------------------
BALANCE AT DEC. 31, 1993 $(5,350) $346,099
- -------------------------------------------------------------
See accompanying Notes to Consolidated Financial Statements.
25
28
CONSOLIDATED STATEMENTS OF CASH FLOWS
A. H. Belo Corporation and Subsidiaries
CASH PROVIDED (USED) Years ended December 31,
- -------------------------------------------------------------------------------------------------------------------
In thousands 1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net earnings $ 51,077 $ 37,170 $12,392
Adjustments to reconcile net earnings to net cash
provided by operations:
Depreciation and amortization 37,664 36,039 34,064
Deferred income taxes 10,969 6,511 (23,270)
Non-cash adjustments and allowances 209 1,617 6,134
Cumulative effect of change in accounting (Note 5) (6,599) - -
Restructuring charge (Note 2) 5,822 - -
Other, net 1,262 2,492 (5,474)
Net change in current assets and liabilities:
Accounts receivable (5,211) (3,021) (4,495)
Inventories and other current assets (6,685) (1,335) 620
Accounts payable (1,338) 2,318 (3,256)
Accrued compensation and benefits 2,466 4,424 (2,819)
Other accrued liabilities (5,518) 279 5,957
Accrued interest payable (3,662) (2,938) 3,579
Income taxes payable 4,362 (5,220) 10,032
- -------------------------------------------------------------------------------------------------------------------
Net cash provided by operations 84,818 78,336 33,464
- -------------------------------------------------------------------------------------------------------------------
INVESTMENTS
Capital expenditures (62,130) (27,145) (19,741)
Acquisition of Dallas Times Herald assets (Note 3) - - (55,673)
Acquisition of other assets - (22,624) (8,898)
Asset dispositions 2,458 848 824
- -------------------------------------------------------------------------------------------------------------------
Net cash used for investments (59,672) (48,921) (83,488)
- -------------------------------------------------------------------------------------------------------------------
FINANCING
Repayment of long-term debt (200,000) - -
Net proceeds from (payments on) revolving debt 175,000 (35,000) 57,000
Payments of dividends on stock (11,128) (10,381) (9,760)
Payments to repurchase stock - - (355)
Net proceeds from exercise of stock options 17,242 17,265 1,230
- -------------------------------------------------------------------------------------------------------------------
Net cash provided by (used for) financing (18,886) (28,116) 48,115
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and
temporary cash investments 6,260 1,299 (1,909)
- -------------------------------------------------------------------------------------------------------------------
Cash and temporary cash investments at beginning of year 2,683 1,384 3,293
Cash and temporary cash investments at end of year $ 8,943 $ 2,683 $ 1,384
- -------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES (NOTE 10)
- -------------------------------------------------------------------------------------------------------------------
See accompanying Notes to Consolidated Financial Statements.
26
29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) PRINCIPLES OF CONSOLIDATION The consolidated financial statements
include the accounts of A. H. Belo Corporation (the "Company" or
"Belo") and its wholly-owned subsidiaries after the elimination of all
significant intercompany accounts and transactions.
Certain amounts for the prior years have been reclassified to conform
to the current year presentation.
B) STATEMENT OF CASH FLOWS For the purpose of the Consolidated
Statements of Cash Flows, the Company considers all highly liquid debt
instruments purchased with a remaining maturity of three months or
less to be temporary cash investments. Such temporary cash
investments are carried at cost which approximates fair value.
C) INVENTORIES Inventories, consisting primarily of newsprint, ink and
other supplies used in printing newspapers, are stated at the lower of
average cost or market value.
D) PROPERTY, PLANT AND EQUIPMENT Depreciation of property, plant and
equipment is provided principally on a straight-line basis over the
estimated useful lives of the assets as follows:
ESTIMATED
USEFUL LIVES
Buildings and improvements 5-20 years
Newspaper publishing equipment 5-20 years
Broadcast equipment 7-15 years
Other 3-10 years
E) INTANGIBLE ASSETS, NET Intangible assets, net includes primarily the
excess cost applicable to subsidiaries acquired since 1984 which is
being amortized on a straight-line basis over 40 years. The carrying
value of intangible assets is periodically reviewed to determine if
impairment exists. In 1993, the Company determined that excess cost
associated with its suburban newspaper operations was not recoverable
(see Note 2).
Also included in Intangible assets, net is the intangible asset
acquired in 1991 (see Note 3) which is being amortized on a straight-
line basis over its currently estimated useful life of 18 years.
Accumulated amortization of intangible assets was $112,775,000 and
$100,392,000 at December 31, 1993 and 1992, respectively.
F) EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE Earnings per common
and common equivalent share are based on the weighted average number
of shares outstanding during the period, including common equivalent
shares representing dilutive stock options.
27
30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
NOTE 2: RESTRUCTURING CHARGE
The Consolidated Statement of Earnings for 1993 includes a $5,822,000
charge related to Dallas-Fort Worth Suburban Newspapers, Inc. ("DFWSN"), that
consists primarily of the write-off of goodwill and a reduction in the carrying
value of production assets to their fair value. The production assets adjusted
include building and improvements and publishing equipment. The charge was
recognized in conjunction with the decision to restructure DFWSN upon the
determination that the carrying value of these assets was not recoverable.
Fair value of production assets was determined principally by market value.
The restructuring was substantially completed in January 1994.
NOTE 3: ACQUISITION
In December 1991, the Company acquired substantially all of the
operating assets of the Dallas Times Herald newspaper for $55,673,000, after
the newspaper's owner, Times Herald Printing Company, ceased publication of the
newspaper. The majority of the assets acquired consisted of newspaper presses
and other operating equipment, land, buildings and intangible assets.
Following the Company's purchase price allocation, $28,717,000 was included in
property, plant and equipment and $23,135,000 was included in intangible
assets, net.
NOTE 4: LONG-TERM DEBT
Long-term debt consists of the following:
----------------------------------------------------------------------------------
In thousands 1993 1992
----------------------------------------------------------------------------------
Revolving credit agreement $250,000 $ 30,000
Short-term unsecured notes classified
as long-term debt 21,000 66,000
9.45% Unsecured Notes due 1993 - 100,000
8 5/8% Unsecured Notes due 1996 - 99,751
Other 6,400 6,400
----------------------------------------------------------------------------------
$277,400 $302,151
==============================
At the end of 1993, the Company had access to $450,000,000 in
revolving credit on which the borrowings were $250,000,000 and $30,000,000 at
December 31, 1993 and 1992, respectively. Average interest rates were 3.7
percent and 4.2 percent in 1993 and 1992, respectively. Loans under the
revolving credit agreement bear interest at a rate based, at the option of the
Company, on the participating bank's prime rate, certificate of deposit rate or
LIBOR. The agreement also provides for commitment fees ranging from 1/8 to 1/4
percent per annum depending on the amount of unused commitment. Each January 1
and July 1, until expiration of the commitment on July 1, 1998, the commitment
is reduced. Available credit as of January 1, 1994 is $418,750,000. No
mandatory repayment of amounts outstanding at December 31, 1993, including
short-term borrowings classified as long-term, would be required to be made
until January 1, 1996.
The revolving credit agreement contains certain covenants, including
the maintenance of cash flow in relation to both the Company's leverage and its
fixed charges, and a limitation on repurchases of the Company's stock. The
Company is in compliance with these covenants at December 31, 1993.
During 1993, the Company continued to use various short-term unsecured
notes as an additional source of financing. At both December 31, 1993 and
1992, the average interest rate on this debt was 3.7 percent. Due to the
Company's intent to renew the short-term notes and its continued ability to
refinance this debt on a long-term basis through its revolving credit
agreement, $21,000,000 and $66,000,000 of short-term notes outstanding at
December 31, 1993 and 1992, respectively, have been classified as long-term.
28
31
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
The 9.45% Unsecured Notes matured on January 15, 1993 and were
redeemed using proceeds from the revolving credit agreement. On December 16,
1993, the Company exercised an option to redeem its 8 5/8% Unsecured Notes due
in 1996 at par plus accrued interest, also using proceeds from the revolving
credit agreement.
In 1993, 1992 and 1991, the Company incurred interest costs of
$16,976,000, $24,554,000 and $24,254,000, respectively, of which $1,961,000,
$395,000 and $372,000, respectively, were capitalized as components of
construction cost.
At December 31, 1993, the Company had outstanding letters of credit of
$7,509,000 issued in the ordinary course of business.
During 1993, the Company entered into agreements that cap at 6 percent
the interest on $75,000,000 of variable rate borrowings. These agreements
expire in 1996.
Because substantially all of the Company's debt is due under the
variable rate revolving credit agreement, no significant differences exist
between the carrying value and fair value.
NOTE 5: INCOME TAXES
Effective January 1, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes" changing to the liability method of accounting for income taxes.
Under this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and
liabilities, and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse. As permitted by SFAS
No. 109, prior years' financial statements have not been restated to reflect
the change. The cumulative effect of adopting SFAS No. 109 as of January 1,
1993 is to increase net earnings by $6,599,000 or 33 cents per share.
Subsequent to the adoption of SFAS No. 109, the federal income tax
rate was increased from 34 percent to 35 percent, retroactive to January 1,
1993. The Company's deferred taxes were adjusted to reflect the new tax rate,
resulting in an increase in deferred tax expense of $2,249,000. Deferred tax
expense also reflects a decrease of $1,000,000 for the reversal of certain tax
accruals as a result of new tax legislation regarding the amortization of
intangibles.
Income tax expense (benefit) consists of the following:
----------------------------------------------------------------------------------------------------
In thousands 1993 1992 1991
----------------------------------------------------------------------------------------------------
Current
Federal $17,385 $15,585 $ 27,477
State 2,746 2,307 2,006
----------------------------------------------------------------------------------------------------
Total current 20,131 17,892 29,483
----------------------------------------------------------------------------------------------------
Deferred 10,969 6,511 (23,270)
----------------------------------------------------------------------------------------------------
Total $31,100 $24,403 $ 6,213
----------------------------------------------------------------------------------------------------
Effective tax rate 41.1% 39.6% 33.4%
----------------------------------------------------------------------------------------------------
29
32
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
Income tax provisions for the years ended December 31, 1993, 1992 and
1991 differ from amounts computed by applying the applicable U.S. federal
income tax rate as follows:
----------------------------------------------------------------------------------------------------
In thousands 1993 1992 1991
----------------------------------------------------------------------------------------------------
Computed expected income tax expense $26,452 $20,935 $ 6,326
Amortization of excess cost 2,235 2,235 2,226
Effect of 1% rate increase on deferred taxes 2,249 - -
Reduction for change in law regarding
amortization of acquired intangible asset (1,000) - -
State income taxes 2,601 2,001 1,324
Undistributed earnings in equity affiliate - (670) -
IRS tax settlement - - (3,783)
Other (1,437) (98) 120
----------------------------------------------------------------------------------------------------
$31,100 $24,403 $ 6,213
----------------------------------------------------------------------------------------------------
During 1992, the Company and one of its equity affiliates settled a
claim against the United States Navy which resulted in an increase in equity in
earnings of an equity affiliate of $1,901,000, on which no taxes were provided
by the Company because such undistributed earnings are expected to remain
invested in that affiliate.
During December 1991, the Company reached a settlement with the
Internal Revenue Service ("IRS") resolving all pending audit issues in
connection with an IRS examination of the Company's tax returns for 1984
through 1988. The principal issue in the examination was the deductibility of
the amortization of value of network affiliation agreements and FCC licenses of
four of the Company's television stations acquired in 1984. The settlement
resulted in a $6,787,000 increase in net earnings from the reversal of excess
income taxes and interest accruals in connection with the IRS examination.
Significant components of the Company's deferred tax liabilities and
assets as of December 31, 1993, are as follows:
In thousands
-------------------------------------------------------------------------
Deferred tax liabilities:
Excess tax depreciation and amortization $102,297
Deferred gain on sale of assets 5,425
Expenses deductible for tax purposes in a year
different than the year accrued 4,610
Other 4,829
-------------------------------------------------------------------------
Total deferred tax liabilities $117,161
-------------------------------------------------------------------------
Deferred tax assets:
State taxes $ 4,448
Deferred compensation 3,048
Expenses deductible for tax purposes in a year
different than the year accrued 4,950
Other 3,460
-------------------------------------------------------------------------
Total deferred tax assets $ 15,906
-------------------------------------------------------------------------
Net deferred tax liability $101,255
-------------------------------------------------------------------------
30
33
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
The sources of deferred income taxes and the tax effect of each for
years prior to the adoption of SFAS No. 109 are as follows:
In thousands 1992 1991
-------------------------------------------------------------------------------------------------
Excess tax depreciation and amortization $3,220 $(19,037)
Interest expense 337 2,800
Alternative Minimum Tax 3,965 (3,068)
Other expenses deductible for tax purposes
in a year different than the year accrued (3,034) (1,782)
Other, net 2,023 (2,183)
-------------------------------------------------------------------------------------------------
$6,511 $(23,270)
-------------------------------------------------------------------------------------------------
NOTE 6: EMPLOYEE RETIREMENT PLANS
The Company sponsors a noncontributory defined benefit pension plan
covering substantially all employees. The benefits are based on years of
service and the average of the employee's five years of highest annual
compensation earned during the most recently completed ten years of employment.
The funding policy is to contribute annually to the plan an amount at
least equal to the minimum required contribution for a qualified retirement
plan, but not in excess of the maximum tax deductible contribution.
The following table sets forth the plan's funded status and prepaid
pension costs (included in other assets on the Consolidated Balance Sheets) at
December 31, 1993 and 1992:
In thousands 1993 1992
--------------------------------------------------------------------------------------------------
Actuarial present value of benefit obligation:
Vested benefit obligation $(65,824) $(51,553)
Accumulated benefit obligation $(66,225) $(51,896)
Projected benefit obligation for service
rendered to date $(83,236) $(60,697)
Plan assets at fair value, invested primarily
in equity securities 74,754 65,186
--------------------------------------------------------------------------------------------------
Plan assets (less than) in excess of projected benefit
obligation (8,482) 4,489
Unrecognized net loss 25,031 9,886
Unrecognized net transition asset being recognized
over 12.3 years (5,302) (6,535)
Unrecognized prior service cost 915 1,060
--------------------------------------------------------------------------------------------------
Prepaid pension cost $ 12,162 $ 8,900
--------------------------------------------------------------------------------------------------
The increase in unrecognized net loss is the result of the change in
the discount rate from 9 percent to 7.5 percent.
31
34
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
The net periodic pension cost (benefit) includes the following
components:
In thousands 1993 1992 1991
----------------------------------------------------------------------------------------------------
Service cost - benefits earned during the period $ 2,284 $ 1,858 $ 1,449
Interest cost on projected benefit obligation 5,782 5,109 4,381
Actual return on plan assets (9,294) (3,447) (8,021)
Net amortization and deferral 1,784 (4,563) 407
----------------------------------------------------------------------------------------------------
Net periodic pension cost (benefit) $ 556 $(1,043) $(1,784)
----------------------------------------------------------------------------------------------------
Assumptions used in the accounting for the defined benefit plan are:
1993 1992 1991
----------------------------------------------------------------------------------------------------
Discount rate in determining benefit obligation 7.50% 9.00% 9.00%
Discount rate in determining net periodic pension
cost (benefit) 9.00% 9.00% 9.50%
Expected long-term rate of return on assets 10.25% 11.00% 10.00%
Rate of increase in future compensation 5.00% 5.00% 6.00%
----------------------------------------------------------------------------------------------------
The Company sponsors a defined contribution plan that covers
substantially all of its employees. Subject to certain dollar limits,
employees may contribute a percentage of their salaries to this plan, and the
Company will match a portion of the employee's contributions. The Company's
contributions totaled $1,895,000, $1,135,000 and $799,000 in 1993, 1992 and
1991, respectively. Contributions were higher in 1993 following a change in
the Company's matching percentage from 35 percent to 50 percent.
The Company also sponsors unfunded non-qualified retirement and death
benefit plans for key employees. The Company had recorded a liability for
these plans of $3,994,000 and $2,174,000 at December 31, 1993 and 1992,
respectively, most of which is classified as long-term in other liabilities on
the Consolidated Balance Sheets. Expense recognized in 1993, 1992 and 1991 was
$1,412,000, $908,000 and $405,000, respectively.
NOTE 7: LONG-TERM INCENTIVE PLAN
The Company's current long-term incentive plan has been in place since
1986. There are, however, stock options awarded under a prior plan, which
will remain outstanding until they are exercised, canceled or expire. The
following table presents the status of the stock options awarded under the
prior plan. At December 31, 1993, all of these options were exercisable.
PRIOR STOCK OPTION PLAN
----------------------------------------------------------------------------------------------------
SHARES SHARES OPTION PRICE
SERIES A SERIES B PER SHARE
----------------------------------------------------------------------------------------------------
Options outstanding at January 1, 1991 236,964 237,874 $ 9-26
Exercised (32,275) (66,915) 9-26
----------------------------------------------------------------------------------------------------
Options outstanding at December 31, 1991 204,689 170,959 $ 9-26
Exercised (181,899) (117,819) 9-26
----------------------------------------------------------------------------------------------------
Options outstanding at December 31, 1992 22,790 53,140 $ 20-26
Exercised (20,925) (50,195) 20-26
----------------------------------------------------------------------------------------------------
Options outstanding at December 31, 1993 1,865 2,945 $ 22-26
----------------------------------------------------------------------------------------------------
32
35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
Awards under the 1986 long-term incentive plan may be granted to
employees in the form of incentive stock options, non-qualified stock options,
restricted shares or performance units, the values of which are based on the
long-term performance of the Company. In addition, options may be accompanied
by stock appreciation rights and limited stock appreciation rights. Rights and
limited rights may also be issued without accompanying options. The plan was
amended in 1988 to provide for a one-time grant of non-qualified options to
purchase 2,500 shares of Series A Common Stock to non-employee directors and to
eliminate the previous limit on the number of restricted shares that may be
issued. The plan was also amended in 1992 to provide for automatic annual
grants through 1997 of non-qualified options to non-employee directors serving
after the 1992 Annual Meeting of Shareholders and an additional one-time grant
of options to purchase 10,000 shares of Series A Common Stock to those
directors subsequently elected. The amendment also increased the number of
shares for which awards could be made under the plan.
The maximum aggregate number of shares of common stock that may be
granted in relation to options, restricted shares and rights, and limited
rights issued without accompanying options is 3,600,000 less the number of
performance units granted under the plan. The maximum number of performance
units that may be granted under the plan is 3,600,000 less the number of
options, restricted shares and rights, and limited rights issued without
accompanying options granted.
Grants made under the 1986 long-term incentive plan during 1993, 1992
and 1991 are summarized below:
1986 LONG-TERM INCENTIVE PLAN
NON-QUALIFIED STOCK OPTIONS RESTRICTED SHARES
OPTION
SHARES SHARES PRICE SHARES SHARES PRICE
SERIES A SERIES B PER SHARE SERIES A SERIES B PER SHARE
- -------------------------------------------------------------------------------------------------------------------
Outstanding at Jan. 1, 1991 1,163,104 187,850 $24-37 296,170 50,000 $24-38
Granted 502,720 - 29-30 72,160 - 29-32
Exercised (19,940) (29,435) 24-26 - - -
Vested - - - (32,988) (29,750) 24-38
Canceled (17,800) - 24-37 (22,869) - 32
- -------------------------------------------------------------------------------------------------------------------
Outstanding at Dec. 31, 1991 1,628,084 158,415 $24-37 312,473 20,250 $24-38
Granted 314,580 - 40 50,830 - 40-42
Exercised (331,797) (65,879) 24-37 - - -
Vested - - - (71,488) (20,250) 24-42
Canceled (15,140) (240) 25-37 - - -
- -------------------------------------------------------------------------------------------------------------------
Outstanding at Dec. 31, 1992 1,595,727 92,296 $24-40 291,815 - $29-42
Granted 317,955 - 40-49 37,192 - 49-53
Exercised (484,370) (37,131) 24-40 - - 29-53
Vested - - - (106,225) - -
Canceled (61,285) - 29-40 (10,990) - 29-49
- -------------------------------------------------------------------------------------------------------------------
Outstanding at Dec. 31, 1993 1,368,027 55,165 $24-49 211,792 - $29-53
- -------------------------------------------------------------------------------------------------------------------
The non-qualified options granted under the Company's long-term
incentive plan become exercisable in cumulative installments over a period of
three years. On December 31, 1993, of the 1,423,192 options outstanding,
821,659 were exercisable. Performance units and shares of Series A Common Stock
reserved for grants under the plan were 613,874 and 896,746 at December 31,
1993 and 1992, respectively.
A provision for the restricted shares is made ratably over the
restriction period. Expense recognized under the plan for restricted shares
was $3,598,000, $2,723,000 and $1,889,000 in 1993, 1992 and 1991, respectively.
33
36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
NOTE 8: COMMITMENTS AND CONTINGENT LIABILITIES
The Company is involved in certain claims and litigation related to
its operations. In the opinion of Management, liabilities, if any, arising
from these claims and litigation are either covered by insurance or would not
have a material adverse effect on the consolidated financial statements of the
Company. In 1991, the Company recorded a $4,000,000 accrual for a judgment
resulting from an unfavorable verdict in an employment-related lawsuit.
Commitments for the purchase of first-run broadcast film contract
rights totaled approximately $60,635,000 at December 31, 1993.
Advance payments on plant and equipment expenditures at December 31,
1993 primarily relate to renovations of existing facilities owned by certain
Belo broadcasting stations. Required future payments for capital expenditures
are $9,992,000 and $882,000 in 1994 and 1995, respectively.
In December 1993, the Company purchased the building in which it had
been leasing office space. The building had been constructed by a partnership
in which the Company was a limited partner prior to 1992. Lease expense for
the building in 1991 was $2,807,000. Total lease expense for property and
equipment, including the office space through November 1993, was $5,447,000,
$6,130,000 and $5,780,000 in 1993, 1992 and 1991, respectively.
Future minimum rental payments for operating lease agreements are as
follows:
In thousands
---------------------------------------------
1994 $2,018
1995 989
1996 315
1997 81
1998 67
1999 and beyond 31
---------------------------------------------
$3,501
---------------------------------------------
NOTE 9: COMMON AND PREFERRED STOCK
The Company has two series of common stock authorized, issued and
outstanding, Series A and Series B. The shares are identical except that
Series B shares are entitled to ten votes per share on all matters submitted to
a vote of shareholders, while the Series A shares are entitled to one vote per
share. Transferability of the Series B shares is limited to family members and
affiliated entities of the holder. Series B shares are convertible at any time
on a one-for-one basis into Series A shares.
Each outstanding share of common stock is accompanied by one preferred
share purchase right which entitles shareholders to purchase 1/100th of a share
of Series A Junior Participating Preferred Stock. The rights will not be
exercisable until a party either acquires beneficial ownership of 30 percent of
the Company's common stock or makes a tender offer for at least 30 percent of
its common stock. The rights expire in 1996. If the Company is acquired in a
merger or business combination, each right has an initial exercise price of
$175 (subject to adjustment) and can be used to purchase the common stock of
the surviving company having a market value of twice the exercise price of each
right. The number of shares of Series A Junior Participating Preferred Stock
reserved for possible conversion of these rights is equivalent to one
one-hundredth of the number of shares of common stock issued and outstanding
plus the number of shares reserved for grant under the 1986 Long-Term Incentive
Plan and Stock Option Plan.
34
37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
NOTE 10: SUPPLEMENTAL CASH FLOW INFORMATION
Net cash provided by operations reflects cash payments for interest
and income taxes as follows:
In thousands 1993 1992 1991
---------------------------------------------------------------------------------
Interest paid, net of amounts
capitalized $18,677 $27,097 $29,192
Income taxes paid, net of refunds $15,679 $23,112 $20,338
---------------------------------------------------------------------------------
NOTE 11: INDUSTRY SEGMENT INFORMATION
The Company operates in two industries: newspaper publishing and
television broadcasting. Operations in the newspaper publishing industry
involve the sale of advertising space in published issues, the sale of
newspapers to distributors and individual subscribers and commercial printing.
Operations in the broadcast industry involve the sale of air time for
advertising and the broadcast of entertainment, news and other programming for
both local markets and syndication. Net operating revenues by industry segment
include sales to unaffiliated customers and intersegment revenues, which before
their elimination, are accounted for on the same basis as revenues from
unaffiliated customers.
Selected segment data is as follows:
In thousands 1993 1992 1991
-----------------------------------------------------------------------------------------------------
NET OPERATING REVENUES
Newspaper publishing $335,651 $314,718 $249,755
Broadcasting 209,457 201,241 181,847
Intersegment revenues (273) (17) (17)
-----------------------------------------------------------------------------------------------------
$544,835 $515,942 $431,585
-----------------------------------------------------------------------------------------------------
EARNINGS FROM OPERATIONS
Newspaper publishing $ 44,293(A) $ 42,974 $ 21,417
Broadcasting 63,240(B) 56,461 41,553 (C)
Corporate expenses (18,059) (17,809) (15,113)(D)
-----------------------------------------------------------------------------------------------------
$ 89,474 $ 81,626 $ 47,857
-----------------------------------------------------------------------------------------------------
IDENTIFIABLE ASSETS
Newspaper publishing $263,855 $245,589 $246,772
Broadcasting 446,175 444,237 456,008
Other 86,126 68,701 43,604
-----------------------------------------------------------------------------------------------------
$796,156 $758,527 $746,384
-----------------------------------------------------------------------------------------------------
DEPRECIATION AND AMORTIZATION
Newspaper publishing $ 17,374 $ 16,247 $ 14,640
Broadcasting 20,039 19,460 19,057
Other 251 332 367
------------------------------------------------------------------------------------------------------
$ 37,664 $ 36,039 $ 34,064
-----------------------------------------------------------------------------------------------------
CAPITAL EXPENDITURES
Newspaper publishing $ 36,765 $ 17,381 $ 6,224
Broadcasting 16,996 9,666 13,309
Other 8,369 98 208
-----------------------------------------------------------------------------------------------------
$ 62,130 $ 27,145 $ 19,741
-----------------------------------------------------------------------------------------------------
(A) Included in Newspaper publishing earnings from operations in 1993 is a
$5,822,000 restructuring charge consisting primarily of the write-off of
goodwill and a reduction in the carrying value of production assets related to
the restructuring of DFWSN (see Note 2).
(B) Included in Broadcasting earnings from operations in 1993 is a
$3,349,000 reversal of certain music license fee accruals.
(C) Included in Broadcasting earnings from operations in 1991 is a
$788,000 provision for early retirement costs, a $1,259,000 write-down of
certain broadcast film contract rights and a $4,000,000 accrual for an adverse
judgement in an employment-related lawsuit.
(D) Included in corporate expenses in 1991 is a $1,500,000 settlement of
an antitrust lawsuit as part of the agreement to acquire the Dallas Times
Herald assets (see Note 3).
35
38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
NOTE 12: SUBSEQUENT EVENT
On February 23, 1994, the Company announced an agreement in principle
to purchase the assets of a television broadcast station in New Orleans,
Louisiana for $110,000,000. The Company anticipates that the acquisition will
be financed using borrowings from its revolving credit agreement. The
transaction, which is subject to the signing of a definitive agreement, as well
as customary closing conditions, including approval by appropriate government
agencies, will be accounted for as a purchase. The Company expects that a
definitive agreement will be entered into by early spring and that the
transaction will be completed during the third quarter of 1994.
36
39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
NOTE 13: QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
Following is a summary of the Unaudited Quarterly Results of Operations for
1993 and 1992:
In thousands, except per share amounts 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
- -------------------------------------------------------------------------------------------------------------------
1993
Net operating revenues
Newspaper publishing $ 78,780 $ 84,747 $ 83,309 $ 88,815
Broadcasting 44,122 59,154 49,314 56,867
Intersegment revenues (62) (97) (84) (30)
- -------------------------------------------------------------------------------------------------------------------
$122,840 $ 143,804 $132,539 $ 145,652
- -------------------------------------------------------------------------------------------------------------------
Earnings from operations
Newspaper publishing $ 11,010 $ 13,160 $ 10,887 $ 9,236(D)
Broadcasting 8,283 22,042 12,187 20,728(E)
Corporate expenses (3,737) (4,985) (3,686) (5,651)
- -------------------------------------------------------------------------------------------------------------------
$ 15,556 $ 30,217 $ 19,388 $ 24,313
- -------------------------------------------------------------------------------------------------------------------
Earnings before cumulative effect of
change in accounting $ 7,271 $ 16,143 $ 7,934 $ 13,130
Cumulative effect of change in accounting 6,599(A) - - -
- -------------------------------------------------------------------------------------------------------------------
Net earnings $ 13,870 $ 16,143 $ 7,934(C) $ 13,130
- -------------------------------------------------------------------------------------------------------------------
Earnings per common and common equivalent share:
Before cumulative effect
of change in accounting $ .37 $ .80 $ .39 $ .64
Cumulative effect of change in accounting $ .33 $ - $ - $ -
Net earnings $ .70 $ .80 $ .39 $ .64
- -------------------------------------------------------------------------------------------------------------------
1992
Net operating revenues
Newspaper publishing $ 71,176 $ 80,943 $ 78,916 $ 83,683
Broadcasting 43,533 53,221 48,887 55,600
Intersegment revenues (1) (14) (1) (1)
- -------------------------------------------------------------------------------------------------------------------
$114,708 $ 134,150 $127,802 $ 139,282
- -------------------------------------------------------------------------------------------------------------------
Earnings from operations
Newspaper publishing $ 7,703 $ 14,117 $ 11,157 $ 9,997
Broadcasting 8,780 17,102 12,544 18,035
Corporate expenses (3,697) (4,522) (4,615) (4,975)
- -------------------------------------------------------------------------------------------------------------------
$ 12,786 $ 26,697 $ 19,086 $ 23,057
- -------------------------------------------------------------------------------------------------------------------
Net earnings $ 6,453(B) $ 12,452 $ 7,117 $ 11,148(F)
- -------------------------------------------------------------------------------------------------------------------
Net earnings per common and
common equivalent share $ .33 $ .63 $ .36 $ .56
- -------------------------------------------------------------------------------------------------------------------
(A) Amount represents the cumulative effect of adopting SFAS No. 109,
"Accounting for Income Taxes" (see Note 5).
(B) A settlement of a claim against the United States Navy was reached in
which the Company and one of its equity affiliates were among the plaintiffs.
The Company's portion of the settlement and its equity in earnings of the
affiliate increased earnings before income taxes by $4,019,000 and net earnings
by $3,235,000 or 16 cents per share. The $4,019,000 gain is included in Other,
net on the Consolidated Statements of Earnings. The equity in earnings
amounted to $1,901,000, on which no taxes are provided by the Company because
such undistributed earnings are expected to remain invested in that affiliate.
(C) Belo's income tax provision in the third quarter reflects a $2,249,000
charge representing an adjustment to deferred taxes following an increase in
the federal income tax rate from 34 percent to 35 percent (see Note 5).
(D) Included in Newspaper publishing earnings from operations for the
fourth quarter of 1993 is a $5,822,000 restructuring charge consisting
primarily of the write-off of goodwill and a reduction in the carrying value of
production assets related to the restructuring of DFWSN (see Note 2).
(E) Included in Broadcasting earnings from operations for the fourth
quarter of 1993 is a $3,349,000 reversal of certain music license fee accruals.
(F) Belo's income tax provision in the fourth quarter of 1992 reflects a
$1,101,000 benefit resulting from the favorable resolution of a franchise tax
issue.
37
40
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS
The Management of A. H. Belo Corporation is responsible for the preparation of
the Company's consolidated financial statements, as well as for their integrity
and objectivity. Those statements are prepared using generally accepted
accounting principles, they include amounts that are based on our best
estimates and judgments, and we believe they are not misstated due to material
fraud or error. Management has also prepared the other information in the
Annual Report and is responsible for its accuracy and its consistency with the
financial statements.
Management maintains a system of internal control that is designed to provide
reasonable assurance of the integrity and reliability of the financial
statements, the protection of assets from unauthorized use or disposition, and
the prevention and detection of fraudulent financial reporting. That system of
internal control provides for appropriate division of responsibility, and is
documented in written policies and procedures. These policies and procedures
are updated as necessary and communicated to those employees having a
significant role in the financial reporting process. Management continually
monitors the system of internal control for compliance.
Management believes that, as of December 31, 1993, the Company's system of
internal control is adequate to accomplish the objectives described above.
Management recognizes, however, that no system of internal control can ensure
the elimination of all errors and irregularities, and it recognizes that the
cost of the internal controls should not exceed the value of the benefits
derived.
Finally, Management recognizes its responsibility for fostering a strong
ethical climate within the Company according to the highest standards of
personal and professional conduct, and this responsibility is delineated in the
Company's written statement of business conduct. That statement of business
conduct addresses, among other things, the necessity for due diligence and
integrity, avoidance of potential conflicts of interest, compliance with all
applicable laws and regulations, and the confidentiality of proprietary
information.
/S/ Robert W. Decherd
Robert W. Decherd
Chairman of the Board, President & Chief Executive Officer
/S/ Michael D. Perry
Michael D. Perry
Senior Vice President & Chief Financial Officer
38
41
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
A. H. Belo Corporation and Subsidiaries
In thousands
- -------------------------------------------------------------------------------------------------------------------
BALANCE AT RETIREMENTS BALANCE
BEGINNING ADDITIONS, OTHER AND OTHER AT END
CLASSIFICATION OF PERIOD AT COST ADDITIONS(1) ADJUSTMENTS(2) OF PERIOD
- -------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1993
Land $ 14,575 $ 915 $ - $ (425) $ 15,065
Buildings 89,350 9,670 - 17,446 116,466
Newspaper publishing equipment 139,632 3,061 - 40,518 183,211
Broadcast equipment 87,426 8,948 - (3,098) 93,276
Other 34,667 1,889 - (946) 35,610
Advance payments on plant and
equipment expenditures 42,136 37,647 - (71,104) 8,679
- -------------------------------------------------------------------------------------------------------------------
$407,786 $62,130 $ - $(17,609) $452,307
- -------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1992
Land $ 13,626 $ 949 $ - $ - $ 14,575
Buildings 87,613 1,862 - (125) 89,350
Newspaper publishing equipment 137,860 1,567 2,370 (2,165) 139,632
Broadcast equipment 77,195 12,622 - (2,391) 87,426
Other 33,520 3,699 1,092 (3,644) 34,667
Advance payments on plant and
equipment expenditures 10,435 6,446 25,255 - 42,136
- -------------------------------------------------------------------------------------------------------------------
$360,249 $27,145 $ 28,717 $ (8,325) $407,786
- -------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1991
Land $ 13,434 $ 10 $ - $ 182 $ 13,626
Buildings 85,775 2,244 - (406) 87,613
Newspaper publishing equipment 136,132 2,039 - (311) 137,860
Broadcast equipment 77,358 6,487 - (6,650) 77,195
Other 33,910 3,715 - (4,105) 33,520
Advance payments on plant and
equipment expenditures 5,189 5,246 - - 10,435
- -------------------------------------------------------------------------------------------------------------------
$351,798 $19,741 $ - $(11,290) $360,249
- -------------------------------------------------------------------------------------------------------------------
(1) Amounts represent allocation of purchase price for assets acquired
from the Dallas Times Herald in December 1991.
(2) In 1993, retirements and other adjustments includes the
reclassification of advance payments related to completion of the expansion of
The Dallas Morning News' North Plant production facility, and the reduction of
the carrying value of certain assets of DFWSN.
39
42
SCHEDULE VI - ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
A. H. Belo Corporation and Subsidiaries
In thousands
- ------------------------------------------------------------------------------------------------------------------------
BALANCE AT RETIREMENTS BALANCE
BEGINNING AND OTHER AT END
CLASSIFICATION OF PERIOD ADDITIONS ADJUSTMENTS(1) OF PERIOD
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1993
Buildings $ 40,093 $ 4,336 $ (1,815) $ 42,614
Newspaper publishing equipment 50,578 10,238 (3,995) 56,821
Broadcast equipment 56,513 6,476 (3,954) 59,035
Other 23,225 4,231 (3,631) 23,825
- ------------------------------------------------------------------------------------------------------------------------
$ 170,409 $ 25,281 $ (13,395) $182,295
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1992
Buildings $ 35,763 $ 3,946 $ 384 $ 40,093
Newspaper publishing equipment 43,918 9,285 (2,625) 50,578
Broadcast equipment 52,465 6,304 (2,256) 56,513
Other 22,193 4,012 (2,980) 23,225
- ------------------------------------------------------------------------------------------------------------------------
$ 154,339 $ 23,547 $ (7,477) $170,409
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1991
Buildings $ 31,723 $ 4,164 $ (124) $ 35,763
Newspaper publishing equipment 35,552 8,753 (387) 43,918
Broadcast equipment 53,250 6,244 (7,029) 52,465
Other 21,438 3,804 (3,049) 22,193
- ------------------------------------------------------------------------------------------------------------------------
$ 141,963 $ 22,965 $ (10,589) $154,339
- ------------------------------------------------------------------------------------------------------------------------
(1) In 1993, retirements and other adjustments includes the reduction of
the carrying value of certain assets of DFWSN.
40
43
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
A. H. Belo Corporation and Subsidiaries
In thousands
- ------------------------------------------------------------------------------------------------------------------------
ADDITIONS
BALANCE AT CHARGED CHARGED BALANCE
BEGINNING TO COSTS & TO OTHER AT END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS(1) OF PERIOD
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1993
Deducted from asset accounts:
Allowance for doubtful
accounts $ 3,475 $ 4,617 - $(4,408) $3,684
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1992
Deducted from asset accounts:
Allowance for doubtful
accounts $ 6,952 $ 3,758 - $(7,235) $3,475
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1991
Deducted from asset accounts:
Allowance for doubtful
accounts and note $ 2,877 $ 8,715 - $(4,640) $6,952
- ------------------------------------------------------------------------------------------------------------------------
(1) Uncollectible accounts written off, net of recoveries and other
miscellaneous adjustments.
41
44
SCHEDULE X - SUPPLEMENTARY EARNINGS STATEMENT INFORMATION
A. H. Belo Corporation and Subsidiaries
In thousands Years ended December 31,
- ----------------------------------------------------------------------------------------------------------------------------------
Description 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------------------
Maintenance and repairs $ 5,986 $ 5,658 $ 4,087
Advertising costs (unaffiliated) $ 9,146 $ 9,357 $ 7,276
42
45
EXHIBIT SEQ.
NUMBER DESCRIPTION PAGE NO.
- ------ ----------- --------
3.1 Certificate of Incorporation of the Company (incorporated by reference
to Exhibit 3.1 to the Company's Annual Report on Form 10-K dated
March 19, 1992 (the "1991 Form 10-K")) N/A
3.2 Certificate of Correction to Certificate of Incorporation dated
May 13, 1987 (incorporated by reference to Exhibit 3.2 to the Company's
Annual Report on Form 10-K dated March 18, 1993 (the "1992 Form 10-K")) N/A
3.3 Certificate of Designation of Series A Junior Participating Preferred
Stock of the Company dated April 16, 1987 (incorporated by reference to
Exhibit 3.3 to the 1991 Form 10-K) N/A
3.4 Certificate of Amendment of Certificate of Incorporation of the Company
dated May 4, 1988 (incorporated by reference to Exhibit 3.4 to the
1992 Form 10-K) N/A
3.5 Amended Certificate of Designation of Series A Junior Participating
Preferred Stock of the Company dated May 4, 1988 (incorporated by
reference to Exhibit 3.5 to the 1992 Form 10-K) N/A
3.6 Certificate of Designation of Series B Common Stock of the Company dated
May 4, 1988 (incorporated by reference to Exhibit 3.6 to the
1992 Form 10-K) N/A
3.7 Bylaws of the Company, effective December 16, 1992 (incorporated by
reference to Exhibit 3.7 to the 1992 Form 10-K) N/A
4.1 Certain rights of the holders of the Company's Common Stock are set
forth in Exhibits 3.1-3.6 above N/A
4.2 Specimen Form of Certificate representing shares of the Company's
Series A Common Stock (incorporated by reference to Exhibit 4.2 to
the 1992 Form 10-K) N/A
4.3 Specimen Form of Certificate representing shares of the Company's
Series B Common Stock (incorporated by reference to Exhibit 4.3
to the Company's Annual Report on Form 10-K dated March 20, 1989) N/A
4.4 Form of Rights Agreement, dated March 10, 1986 between the Company
and RepublicBank Dallas, National Association as Rights Agent, which
includes as Exhibit B thereto the Form of Right Certificate
(incorporated by reference to Exhibit 4.8 to the 1991 Form 10-K) N/A
4.5 Supplement No. 1 to Rights Agreement (incorporated by reference to
Exhibit 4.9 to the 1991 Form 10-K) N/A
E-1
46
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
4.6 Supplement No. 2 to Rights Agreement (incorporated by reference to
Exhibit 4.9 to the 1992 Form 10-K) N/A
4.7 Supplement No. 3 to Rights Agreement (incorporated by reference to
Exhibit 4.10 to the 1992 Form 10-K) N/A
4.8 Supplement No. 4 to Rights Agreement dated December 12, 1988
substituting Manufacturers Hanover Trust Company as Rights Agent -----
4.9 Supplement No. 5 to Rights Agreement (incorporated by reference to
Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1993) N/A
10.1 Contracts relating to television broadcasting:
(1) Contract for Affiliation between KOTV in Tulsa, Oklahoma and
CBS, with Network Affiliation Consent (incorporated by
reference to Exhibit 10.1(1) to the 1991 Form 10-K) N/A
(2) Contract for Affiliation between KHOU-TV in Houston, Texas and
CBS, with Network Affiliation Consent (incorporated by reference
to Exhibit 10.1(2) to the 1991 Form 10-K) N/A
(3) Letter Amendment, dated June 11, 1993, to Contract for
Affiliation between KHOU-TV in Houston, Texas and CBS ----
(4) Contract for Affiliation between KXTV in Sacramento, California
and CBS (incorporated by reference to Exhibit 10.3 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1993 (the "First Quarter 1993 Form 10-Q")) N/A
(5) Contract for Affiliation between WFAA-TV in Dallas, Texas and ABC,
with Network Affiliation Consent (incorporated by reference to
Exhibit 10.1(4) to the Company's Annual Report on Form 10-K dated
March 28, 1991 (the "1990 Form 10-K")) N/A
(6) Rider One to Contract for Affiliation between WFAA-TV in Dallas,
Texas and ABC (incorporated by reference to Exhibit 10.1 to the
First Quarter 1993 Form 10-Q) N/A
(7) Contract for Affiliation between WVEC-TV in Hampton-Norfolk,
Virginia and ABC, with Network Affiliation Consent (incorporated
by reference to Exhibit 10.1(5) to the 1991 Form 10-K) N/A
E-2
47
EXHIBIT SEQ.
NUMBER DESCRIPTION PAGE NO.
- ------ ----------- --------
10.2 Contracts relating to newspaper publication:
(1) Founding agreement dated July 28, 1987 between the Company and
Newsprint South, Inc. for newsprint supply (incorporated by
reference to Exhibit 10.2(2) to the 1990 Form 10-K) N/A
(2) Amendment to the founding agreement dated June 30, 1990 between
the Company and Newsprint South, Inc. for newsprint supply
(incorporated by reference to Exhibit 10.2(3) to the 1990 Form 10-K) N/A
10.3 (1) Management Security Plan (incorporated by reference to Exhibit 10.4(1)
to the 1991 Form 10-K) N/A
(2) Stock Option Plan (incorporated by reference to Exhibit 10.4(2)
to the 1991 Form 10-K) N/A
(3) Amendment to Stock Option Plan by the Compensation Committee of the
Board of Directors (incorporated by reference to Exhibit 10.4(3)
to the 1991 Form 10-K) N/A
(4) Amendments to Stock Option Plan (incorporated by reference to
Exhibit 10.4(4) to the 1991 Form 10-K) N/A
(5) Amendment to Stock Option Plan dated December 19, 1986 (incorporated
by reference to Exhibit 10.4(5) to the 1991 Form 10-K) N/A
(6) Amendment to Stock Option Plan dated February 22, 1989 ----
(7) 1986 Long-Term Incentive Plan (incorporated by reference to
Exhibit 10.4(7) to the 1991 Form 10-K) N/A
(8) Amendment No. 1 to 1986 Long-Term Incentive Plan dated
October 22, 1986 (incorporated by reference to Exhibit 10.4(8)
to the 1991 Form 10-K) N/A
(9) Amendment No. 2 to 1986 Long-Term Incentive Plan effective
January 1, 1987 (incorporated by reference to Exhibit 10.3(9)
to the 1992 Form 10-K) N/A
(10) Amendment No. 3 to 1986 Long-Term Incentive Plan dated May 4, 1988 ----
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48
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
(11) Amendment No. 4 to 1986 Long-Term Incentive Plan dated May 13, 1988 ----
(12) Amendment No. 5 to 1986 Long-Term Incentive Plan dated
February 22, 1989 ----
(13) Amendment No. 6 to 1986 Long-Term Incentive Plan dated May 6, 1992
(incorporated by reference to Exhibit 10.3(13) to the 1992 Form 10-K) N/A
(14) The A. H. Belo Corporation Employee Savings and Investment Plan
(incorporated by reference to Exhibit 10.4(13) to the Company's
Annual Report on Form 10-K dated March 27, 1990 (the "1989 Form 10-K")) N/A
(15) First Amendment to the A. H. Belo Corporation Employee Savings and
Investment Plan, dated January 29, 1992 (incorporated by reference
to Exhibit 10.3(15) to the 1992 Form 10-K) N/A
(16) Second Amendment to the A. H. Belo Corporation Employee Savings
and Investment Plan, dated October 22, 1992 (incorporated by
reference to Exhibit 10.3(16) to the 1992 Form 10-K) N/A
(17) Third Amendment to the A. H. Belo Corporation Employee Savings
and Investment Plan (incorporated by reference to Exhibit 10.2
to the First Quarter 1993 Form 10-Q) N/A
(18) Fourth Amendment to the A. H. Belo Corporation Employee Savings
and Investment Plan (incorporated by reference to Exhibit 4.14
to Post-Effective Amendment No. 1 to Form S-8
(Registration No. 33-30994)) N/A
(19) Fifth Amendment to the A. H. Belo Corporation Employee Savings
and Investment Plan ----
(20) The G. B. Dealey Retirement Pension Plan (as amended and restated
effective January 1, 1988) ----
(21) First Amendment to the G. B. Dealey Retirement Pension Plan ----
(22) Second Amendment to the G. B. Dealey Retirement Pension Plan ----
(23) Third Amendment to the G. B. Dealey Retirement Pension Plan ----
E-4
49
EXHIBIT SEQ.
NUMBER DESCRIPTION PAGE NO.
- ------ ----------- --------
(24) Fourth Amendment to the G. B. Dealey Retirement Pension Plan ----
(25) Fifth Amendment to the G. B. Dealey Retirement Pension Plan ----
(26) Master Trust Agreement, effective as of July 1, 1992, between
A. H. Belo Corporation and Mellon Bank, N. A. ----
(27) A. H. Belo Corporation Supplemental Executive Retirement Plan ----
(28) Trust Agreement dated February 28, 1994, between the Company
and Mellon Bank, N. A. ----
(29) Summary of A. H. Belo Corporation Executive Compensation Program
(incorporated by reference to Exhibit 10.3(18) to the 1992 Form 10-K) N/A
(30) Employment and Consultation Agreement between A. H. Belo Corporation
and James P. Sheehan (incorporated by reference to Exhibit 10.1
to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 1993) N/A
10.4 (1) Credit Agreement dated October 27, 1988, between the Company and
The First National Bank of Chicago as Managing Agent (incorporated
by reference to Exhibit 10.4(1) to the 1992 Form 10-K) N/A
(2) Amendment No. 1 to 1988 Credit Agreement between the Company and
The First National Bank of Chicago as Managing Agent dated
November 8, 1989 (incorporated by reference to Exhibit 10.5(4)
to the 1990 Form 10-K) N/A
(3) Amendment No. 2 to 1988 Credit Agreement between the Company and
The First National Bank of Chicago as Managing Agent dated
April 24, 1991 (incorporated by reference to Exhibit 10.5(5)
to the 1991 Form 10-K) N/A
(4) Amendment Agreement dated May 14, 1992, between the Company and
The First National Bank of Chicago as Managing Agent (incorporated
by reference to Exhibit 10.4(4) to the 1992 Form 10-K) N/A
(5) Amendment Agreement dated November 6, 1992, between the Company
and The First National Bank of Chicago as Managing Agent
(incorporated by reference to Exhibit 10.4(5) to the 1992
Form 10-K) N/A
E-5
50
EXHIBIT SEQ.
NUMBER DESCRIPTION PAGE NO.
- ------ ----------- --------
(6) Loan Agreement dated October 1, 1985, between City of Arlington
Industrial Development Corporation and Dallas-Fort Worth Suburban
Newspapers, Inc. (incorporated by reference to Exhibit 10.5(2)
to the 1991 Form 10-K) N/A
(7) Letter of Credit and Reimbursement Agreement dated as of
June 2, 1987, between Dallas-Fort Worth Suburban Newspapers,
Inc. and The Sanwa Bank, Limited, Dallas Agency covering
$6,400,000 City of Arlington Industrial Development Corporation
Industrial Development Revenue Bonds (incorporated by reference
to Exhibit 10.5(3) to the 1991 Form 10-K) N/A
(8) Amendment and Waiver Agreement dated as of December 30, 1992,
by and between the Company and The Sanwa Bank, Limited,
Dallas Agency (incorporated by reference to Exhibit 10.4(8)
to the 1992 Form 10-K) N/A
10.5 Joint Venture Agreement dated August 1, 1989, between the Company and
Universal Press Syndicate (incorporated by reference to Exhibit 10.6
to the 1989 Form 10-K) N/A
21 Subsidiaries of the Company ----
23 Consent of Ernst & Young ----
E-6