February 9, 2001
Belo reports results for 2000 full year and fourth quarter
DALLAS - Belo (NYSE: BLC) today reported 2000 fourth quarter and full-year diluted earnings per share before non-recurring items of $0.27 and $0.82, respectively, compared with $0.23 and $0.73, respectively, for the comparable 1999 periods. After-tax cash flow per share before non-recurring items was $0.69 and $2.40 for the fourth quarter and full year, compared with $0.59 and $2.15 for the same periods in 1999.
Reported earnings per share of $0.76 in the fourth quarter and $1.29 for the full year include $0.58 and $0.56, respectively, from gains on the sales of The Gleaner in Henderson, Kentucky, the Messenger-Inquirer in Owensboro, Kentucky, The Eagle in Bryan-College Station, Texas and KOTV, the CBS affiliate in Tulsa, Oklahoma, a $0.10 non-recurring benefit related to a legal settlement, a $0.16 reserve related to a valuation allowance on certain Internet investments recognizing a decline in value considered to be "other than temporary," and $0.03 in other non-recurring charges. The other non-recurring charges include early retirement costs for Ward L. Huey, Jr., Belo's former vice chairman and president of the Broadcast Division, a programming writedown and a charge related to a year-end advertiser bankruptcy. Reported earnings per share for the fourth quarter and full year 1999 of $0.58 and $1.50, respectively, included non-recurring items of $0.35 and $0.77 per share, respectively.
The following tables summarize Belo's fourth quarter and full year performance. To take into account acquisitions, dispositions and non-recurring items in 1999 and 2000, segment financial highlights are also presented on an "as adjusted" basis:
(1) Revenues and operating cash flows for 1999 and 2000 exclude the effects of non-recurring items and have been adjusted for the following acquisitions and dispositions: the disposition of KXTV (ABC) in Sacramento, California, in an exchange for KVUE-TV (ABC) in Austin, Texas; the acquisition of the Denton Record-Chronicle in Denton, Texas; the disposition of KASA-TV (FOX) in Albuquerque, New Mexico and KHNL-TV (NBC) in Honolulu, Hawaii; the acquisition of KTVK-TV (IND) and KASW-TV (WB) in Phoenix, Arizona; the disposition of The Gleaner in Henderson, Kentucky; the disposition of The Eagle in Bryan-College Station, Texas; the disposition of the Messenger-Inquirer in Owensboro, Kentucky; and the disposition of KOTV (CBS) in Tulsa, Oklahoma.
(2) The intercompany elimination removes $2,470, $207, $16 and $26 of revenues for the three months and $6,677, $1,308, $82 and $58 of revenues for the year ended December 2000 for Broadcasting, Newspaper publishing, Interactive media and Other, respectively, for advertising provided primarily to the Interactive media segment.
(3) After-tax cash flow per share is net earnings plus depreciation and amortization divided by the average shares outstanding. After-tax cash flow per share in 2000 excludes the non-cash expense associated with the valuation allowance on certain Internet investments of $0.16, and in 1999 excludes the non-cash gain of $0.41 associated with the disposition of KXTV (ABC) in Sacramento, California.
Robert W. Decherd, Belo's chairman, president and chief executive officer, said, "2000 was an outstanding year for Belo. Revenues at our television stations and newspapers grew at rates that were at or near the top of their respective industries and our 10 largest operating companies achieved all-time revenues and cash flows.
"Belo's Television Group revenues advanced 10 percent on an as adjusted basis for full-year 2000, including $50 million of political revenues and $10 million of Olympics advertising. With Television Group cash expenses up only 2.7 percent in 2000, broadcasting cash flow grew a robust 20.4 percent. In the fourth quarter, Television Group revenues grew 9.5 percent on the strength of $28.9 million in political revenues and operating cash flow grew almost 21 percent."
"Publishing Division revenues grew 6.5 percent on an as adjusted basis in 2000. Revenue at The Dallas Morning News grew 6.2 percent for the full year. General advertising demand at The Morning News was strong throughout the year and classified employment revenue grew almost 5 percent. Revenues at The Press-Enterprise advanced an impressive 12.1 percent as we continue to capitalize on the growth in the Riverside market. Revenues at The Providence Journal increased about 4 percent in 2000. Publishing Division operating cash flow was up 6.5 percent for the full year with an increase in cash expenses of 6.5 percent. This expense increase is largely due to higher newsprint expense as well as revenue-enhancing initiatives and steps we are taking to modernize the business and management information systems of The Dallas Morning News. Fourth quarter revenues and operating cash flows in the Publishing Division increased 4.1 percent and 6.6 percent, respectively."
"We were very pleased with progress made at Belo Interactive in 2000, particularly in traffic growth on its Web sites. Belo Interactive's 38 Web sites recorded approximately 68 million page views per month in the fourth quarter compared to 56 million in the third quarter, 47 million in the second quarter, and 36 million in the first quarter. The number of unique visitors per month increased to 4.7 million from 3.8 million in the third quarter and 3.4 million in the first and second quarters. Belo Interactive generated $2.7 million of revenue in the fourth quarter and $10.1 million for the full year. Belo's net investment in Belo Interactive operations in the fourth quarter was $4.5 million before product launch expense associated with Digital:Convergence of about $250,000 and intercompany advertising expense associated with Digital:Convergence of $2.6 million."
Decherd added, "Belo's EPS comparison in the first quarter of 2001 will be difficult due to the soft advertising environment that has accompanied the slowing U.S. economy, significantly higher newsprint costs, and continued investment in Belo Interactive. Provided advertising spending rebounds in the second quarter, we believe that Belo can grow revenues and operating cash flow for full year 2001, with better prospects for growth in publishing than broadcasting because of the tremendous political and Olympic dollars realized in 2000. We remain confident that the Company's combination of top-rated television stations, newspapers, cable news channels and interactive media gives Belo the resources to compete successfully with anyone in any market circumstance."
A conference call to discuss the earnings release and other matters of interest to shareholders and analysts will take place today at 1:00 p.m. Central Standard Time. The conference call will be simultaneously Webcast over the World Wide Web. The press and public are invited to participate in the call in a listen-only mode by dialing 1-800-218-0713 or by logging onto www.belo.com and following the instructions set forth on the News Releases page of Belo's Web site (www.belo.com/news.html). Following the conclusion of the Webcast, the conference call will also be available for playback for a period of approximately two weeks on Belo's Web site.
Belo is one of the nation's largest media companies with a diversified group of market-leading broadcasting, publishing, cable and interactive media assets. A Fortune 1000 company with more than 9,000 employees and $1.5 billion in annual revenues, Belo operates news and information franchises in some of America's most dynamic markets and regions, including Texas, the Northwest, Arizona, Southern California, Rhode Island, and the Mid-Atlantic region. Belo owns 17 television stations (six in the top 17 markets) reaching 13.7 percent of U.S. television households; owns or operates six cable news channels; and manages three television stations through local marketing agreements. Belo publishes five daily newspapers including The Dallas Morning News, The Providence Journal and The Press-Enterprise (Riverside, CA.). Belo Interactive's new media businesses include 38 Web sites, several interactive alliances, and a broad range of Internet-based products.
For more information, contact Dunia Shive, Belo's executive vice president and chief financial officer, or Carey Hendrickson, Belo's vice president of investor relations, at 214-977-6606. Additional information, including earnings releases, is available online at http:/www.belo.com.
Statements in this communication concerning the Company's business outlook or future economic performance, anticipated profitability, revenues, expenses, capital expenditures or other financial items and other statements that are not historical facts, are "forward-looking statements" as the term is defined under applicable Federal Securities Laws. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those statements.
Such risks, uncertainties and factors include, but are not limited to, changes in advertising demand, interest rates and newsprint prices; technological changes; development of Internet commerce; industry cycles; changes in pricing or other actions by competitors and suppliers; regulatory changes; the effects of Company acquisitions and dispositions; and general economic conditions, as well as other risks detailed in the Company's filings with the Securities and Exchange Commission ("SEC"), including the Annual Report on Form 10-K.