December 5, 2006

Belo Updates Investment Community

Management highlights transformational initiatives and results, provides early look for 2007

NEW YORK -- Belo Corp. (NYSE: BLC) presented today at the Credit Suisse Media and Telecom Week conference in New York City, and will present on Wednesday, December 6, at the UBS Global Media and Communications conference, providing guidance to the investment community on the Company's business strategies, operations and financial outlook. The full text of the presentation and a replay of the Webcast are available at Investor Relations at

Robert W. Decherd, Belo's chairman, president and chief executive officer, said, "Progress is evident across Belo. We are focusing our businesses to compete effectively in an increasingly Internet-centric marketplace. We are aggressively reshaping Belo's operations to pursue revenue growth while prudently managing expenses. We're determined to remain the content provider of choice in our local markets and we have the resources, strategy and people to make this happen."

Strategy Update

Decherd summarized several transformational initiatives Belo undertook in 2006 that are building the foundation for 2007 and beyond:

In October, IBM assumed responsibility for managing most of the Company's technological infrastructure enterprise-wide to support the Company's future growth. This action allows Belo to utilize the best technology systems available and provides the Company access to deep technological expertise from one of the world's premier technology companies.

A Customer Value Management (CVM) system was launched at The Dallas Morning News in October with the goal of profitably growing audiences. The CVM system accumulates market intelligence that gives a more complete profile of each customer, allowing Belo media companies to better serve the needs of both consumers and advertisers.

Belo hired Dwight Riskey, the former senior vice president of consumer/customer insights at PepsiCo, Inc., to serve as a senior advisor to Belo to evaluate current marketing and research initiatives across the Company.

In September, The Dallas Morning News completed a voluntary severance program for newsroom employees, resulting in a headcount reduction of 109 as part of a broad organizational realignment, adapting print and online products to reflect fundamental changes in the use of media by consumers and advertisers. The Morning News expects approximately $10 million in ongoing annualized savings in direct compensation and benefits from this action.

The Morning News formed a strategic team in July 2006 charged with developing a news and editorial model for the newspaper's future. This initiative focused on audiences and defining the human and financial resources necessary to support a distinguished core newspaper.

The Press-Enterprise adopted an "Internet-first" multimedia business plan and organizational restructuring aimed at more effectively reaching its readers, online users and advertisers. The newspaper eliminated 80 positions in its legacy business and created 30 new positions in online operations for a net reduction of 50 FTE's and ongoing annualized savings of more than $1.5 million.

In April, The Dallas Morning News stopped distributing to areas 200 miles or more outside the Dallas/Fort Worth area. At the same time, all Belo newspapers ceased including third-party barter circulation in reported circulation figures and limited other third-party circulation. These initiatives will result in Belo newspapers providing advertisers with the core audiences they value while achieving ongoing annualized savings of approximately $8 million.

Belo and a consortium of like-minded newspaper companies have formed a partnership with Yahoo! on a wide range of online initiatives. The first element of the partnership is a recruitment advertising solution that combines the power of the consortium's local employment listings with the Yahoo! HotJobs platform. In addition, the consortium and Yahoo! plan to drive new and larger local audiences by working together to provide search, content, local tools and other advertising services.

Major Web site redesigns were launched at all Belo television stations and newspapers from August through December. The revamped sites bring consumers even more immediate, personalized and interactive content online, as well as more robust search capabilities, making Belo's Web sites some of the most advanced local media sites in the nation.

In early November, Belo announced the freezing of the Company's pension plan effective March 31, 2007. This action will significantly reduce the volatility of cash contributions and expense recognition over time.

Financial Impact of Pension Plan Changes

Decherd noted, "To fund transition benefits provided to affected employees, we'll make incremental cash contributions totaling approximately $60 million from 2007 through 2010. After that, the Company will experience savings in cash contributions versus our current retirement program. The net impact on cash should be neutral over the next ten years.

"We'll incur a curtailment charge of approximately $4 million in the fourth quarter of 2006 related to these changes. Belo's 401(k) savings plan expense is estimated to be about $7 million higher overall in 2007 through 2009 than our previous pension expense projections for those years; but, we expect to realize substantial expense savings in subsequent years. The impact to Belo's net earnings per share is projected to be neutral over the first five years, with an estimated positive impact to net earnings per share of $0.08 to $0.12 each year thereafter."

2006 Review

Dennis Williamson, Belo's executive vice president/Chief Financial Officer, commented on the Company's 2006 financial performance to date. "We have had excellent revenue growth in our Television Group in 2006, both including and excluding political revenues, while our newspapers have responded to a challenging advertising environment. We have incurred unusual expenses associated with various transformational initiatives, but have also benefited, particularly in the second half of the year, from proactive decisions we've made," Williamson said.

"Total political revenues were greater than $46 million in the 2006 election cycle much higher than our initial expectations. Although this wasn't a record year of political revenue for Belo's Television Group as a whole, eight of Belo's 20 television stations posted individual record political revenues.

"Based on current projections through the end of 2006, 12 of Belo's 20 television stations are expected to post record spot revenue performance before including political revenues. We expect the Television Group as a whole to post record performance in local spot revenue, total spot excluding political and total spot including political."

"Newspaper Group revenues have decreased 0.2 percent year-to-date through November, including a 5.4 percent decline in October and an increase in November of about one percent for the Newspaper Group and The Dallas Morning News.

2007 Outlook

Looking to 2007, Williamson said, "We're pleased with the progress we've made on many fronts in 2006 and look forward to a productive 2007. This will be a baseline year for Belo, from which we can grow."

Williamson noted items that positively impacted 2006 but will not recur in 2007:

A gain of $7.5 million related to a change-in-control provision in one of the Company's vendor contracts which equates to an EPS impact of about $0.045 per share.

An adjustment of $3.8 million, or $0.04 per share, related to the Texas Legislature's enactment of a new margin tax to replace the previous franchise tax.

Approximately $46 million in political revenue versus $7.3 million in 2005. Political revenue in 2007 should be similar to 2005, likely in the $7 to $10 million range.

Williamson also noted specific items that are expected to impact 2007:

Stock-based compensation expense should be higher in 2007 than 2006 by about $5.4 million, which equates to $0.03 per share.

Bonus expense is expected to increase about $2.7 million, or $0.02 per share, assuming that all operating units achieve target bonuses in 2007.

Final transition costs of $5 million associated with the Company's technology optimization initiative are expected in 2007.

Also, some 2006 initiatives will impact 2007:

Headcount reductions at The Dallas Morning News and The Press-Enterprise will produce ongoing annualized savings in direct compensation and benefits of about $11.5 million. Due to the timing of these reductions, only about $2.5 million in savings was realized in 2006, resulting in an incremental positive impact of about $9 million in 2007.

Belo savings plan expense is expected to increase about $4 million in 2007 related to changes in the Company's retirement benefit and savings plans. The Company will realize significant savings related to these changes beginning in 2010.

Belo will benefit in 2007 from a decrease of approximately $4 million in interest expense, most of which is related to the retirement of 7.125% bonds due in June 2007 via the Company's credit facility.

Williamson continued, "We currently expect Television Group revenues to be essentially flat in 2007 following strong political and Olympics revenue in 2006. Our Newspaper Group is expected to perform better in 2007 than in the second half of 2006, but could still show a slight decline in revenue for full-year 2007. Online revenues are expected to continue strong in both segments in 2007.

"Segment costs and expenses should increase in the low-single digits for 2007. Newsprint expense should decrease due to lower consumption associated with the reduced distribution area for The Dallas Morning News which began in the second quarter of 2006, and a stabilization of newsprint prices. All in all, both consolidated EBITDA and earnings from operations are currently projected to show a single-digit decline for full-year 2007.

"Also, changes in cost allocations to the segments in 2007, primarily the allocation of technology costs held at corporate in 2006, will result in segment EBITDA margin reductions of one to two percentage points in the Television Group and Newspaper Group segments."

Additional information on Belo and its outlook for 2006 and 2007 is available online at, including the full text of the presentations and the archived webcasts.

About Belo

Belo Corp. is one of the nation's largest media companies with a diversified group of market-leading television, newspaper, cable and interactive media assets. A Fortune 1000 company with 7,400 employees and more than $1.5 billion in annual revenues, Belo operates in some of America's most dynamic markets in Texas, the Northwest, the Southwest, the Mid-Atlantic and Rhode Island. Belo owns 19 television stations, six of which are in the 15 largest U.S. broadcast markets. The Company also owns or operates seven cable news channels and manages one television station through a local marketing agreement. Belo's daily newspapers are The Dallas Morning News, The Providence Journal, The Press-Enterprise (Riverside, CA) and the Denton Record-Chronicle (Denton, TX). The Company also publishes specialty publications targeting young adults, and the fast-growing Hispanic market, including Quick and Al D a in Dallas/Fort Worth, and El D and La Prensa in Riverside. Belo operates more than 30 Web sites associated with its operating companies. Additional information is available at or by contacting Carey Hendrickson, vice president/Investor Relations & Corporate Communications, at 214-977-6626.

Statements in this communication concerning Belo's business outlook or future economic performance, anticipated profitability, revenues, expenses, dividends, capital expenditures, investments, future financings, or other financial and non-financial items that are not historical facts, are "forward-looking statements" as the term is defined under applicable federal securities laws. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those statements.

Such risks, uncertainties and factors include, but are not limited to, changes in capital market conditions and prospects, and other factors such as changes in advertising demand, interest rates and newsprint prices; newspaper circulation matters, including changes in readership, and audits and related actions (including the censure of The Dallas Morning News) by the Audit Bureau of Circulations; technological changes, including the transition to digital television and the development of new systems to distribute television and other audio-visual content; development of Internet commerce; industry cycles; changes in pricing or other actions by competitors and suppliers; regulatory changes; adoption of new accounting standards or changes in existing accounting standards by the Financial Accounting Standards Board or other accounting standard-setting bodies or authorities; the effects of Company acquisitions and dispositions; the recovery of the New Orleans market (where the Company owns and operates market-leading television station WWL-TV, the CBS affiliate) from the effects of Hurricane Katrina; general economic conditions; and significant armed conflict, as well as other risks detailed in Belo's other public disclosures, and filings with the Securities and Exchange Commission ("SEC") including the Annual Report on Form 10-K.