Belo Corp. Series A (BLC, Financial) filed Quarterly Report for the period ended 2009-06-30.
BELO CORPORATION is the largest pure-play publicly-traded television station company in the nation. The Company owns and operates twenty television stations including ABC CBS NBC FOX CW and MyNetwork TV affiliates reaching 14 percent of U.S. television households and their associated Web sites in 15 highly-attractive markets across the United States. Nearly all Belo stations rank first or second in their local market based on audience reach. Belo operates nine stations in seven of the top 25 markets in the nation with six stations located in the fast-growing top-15 markets of Dallas/Fort Worth Houston Seattle/Tacoma and Phoenix. Belo Corp. operates more than 25 Web sites building on the Company\'s well-established local and regional brands to generate new customer relationships. Additionally the Company has leveraged its local television assets to create regional cable news channels in Texas the Northwest and Arizona increasing its impact in those regions. Belo Corp. Series A has a market cap of $370 million; its shares were traded at around $3.61 with a P/E ratio of 6.9 and P/S ratio of 0.5. The dividend yield of Belo Corp. Series A stocks is 8.3%. Belo Corp. Series A had an annual average earning growth of 0.5% over the past 10 years.
For the six months ended June 30, 2009, station salaries, wages and employee benefits decreased $21,119, or 17.7 percent, primarily due to decreases in salary expense of $8,458, vacation expense of $3,074 (due to the policy change noted above), 401(k) Plan expense of $3,061, bonus expense of $1,992, pension transition supplement expense of $1,966, sales commissions of $1,918 and self-insured medical insurance costs of $1,158. Station programming and other operating costs decreased $6,509, or 6.3 percent, with decreases in most expense categories, including a $4,611 decrease in advertising expense. For the six month periods, the credits recognized for the FCC decision discussed above were $2,634 and $4,733 for 2009 and 2008, respectively, as two Belo markets converted to this digital equipment in the first half of 2009 versus five Belo markets in the first half of 2008. Corporate operating costs decreased $1,559, or 9.9 percent, in the first six months of 2009, with a decrease in bonus expense of $1,637 and a $1,476 reduction in various other expense categories partially offset by an increase in pension expense of $2,029.
Interest expense decreased in the three and six months ended June 30, 2009, primarily due to the repayment of $350,000 of outstanding 8% Senior Notes in the fourth quarter of 2008 with funds from the revolving credit facility, which has a lower interest rate. Additionally, in the fourth quarter 2008 and the first quarter 2009, the Company purchased a total of $74,075 of the Companys outstanding 6 3/4% Senior Notes due in 2013 and $10,000 of the Companys outstanding 7 1/4% Senior Debentures due in 2027 for a total cost of $52,048. The purchases were also funded with lower rate borrowings under the credit facility.
Other income, net decreased $3,609 in the second quarter 2009 compared to the second quarter 2008. The second quarter of 2009 included $947 in costs related to the relocation of the Companys bureau in Washington, DC and an increase of $500 in the reserve for an investment. Other income, net increased $12,491 in the first half of 2009 compared to the first half of 2008 primarily due to a $14,905 gain related to the Companys first quarter 2009 purchase of debt securities as discussed above. The debt securities were purchased on the open market at a discount. Additionally, the Company sold its interest in a Web site joint venture for a gain of $1,616 in the first half of 2009.
Income taxes decreased $10,797, or 62.7 percent, for the three months ended June 30, 2009, compared with the three months ended June 30, 2008, due to lower taxable income. Income taxes decreased $28,084, or 70.0 percent, for the six months ended June 30, 2009, compared with the six months ended June 30, 2008, due to lower taxable income and a one-time tax charge in the first half of 2008 related to the spin-off of the Companys newspaper businesses and related assets. Although the spin-off otherwise qualifies for tax-free treatment to shareholders, the Company (but not its shareholders) recognized for tax purposes approximately $51,900 of previously deferred intercompany gains related to the transfer of certain intangibles to A. H. Belo, resulting in a federal income tax obligation estimated at $18,235 as of June 30, 2008.
At June 30, 2009, Belo had $615,406 in fixed-rate debt securities as follows: $175,406 of 6-3/4% Senior Notes due 2013, $200,000 of 7-3/4% Senior Debentures due 2027; and $240,000 of 7-1/4% Senior Debentures due 2027. The weighted average effective interest rate for the fixed-rate debt instruments is 7.3%.
Read the The complete ReportBLC is in the portfolios of Michael Price of MFP Investors LLC, Kenneth Fisher of Fisher Asset Management, LLC.
BELO CORPORATION is the largest pure-play publicly-traded television station company in the nation. The Company owns and operates twenty television stations including ABC CBS NBC FOX CW and MyNetwork TV affiliates reaching 14 percent of U.S. television households and their associated Web sites in 15 highly-attractive markets across the United States. Nearly all Belo stations rank first or second in their local market based on audience reach. Belo operates nine stations in seven of the top 25 markets in the nation with six stations located in the fast-growing top-15 markets of Dallas/Fort Worth Houston Seattle/Tacoma and Phoenix. Belo Corp. operates more than 25 Web sites building on the Company\'s well-established local and regional brands to generate new customer relationships. Additionally the Company has leveraged its local television assets to create regional cable news channels in Texas the Northwest and Arizona increasing its impact in those regions. Belo Corp. Series A has a market cap of $370 million; its shares were traded at around $3.61 with a P/E ratio of 6.9 and P/S ratio of 0.5. The dividend yield of Belo Corp. Series A stocks is 8.3%. Belo Corp. Series A had an annual average earning growth of 0.5% over the past 10 years.
Highlight of Business Operations:
For the three months ended June 30, 2009, station salaries, wages and employee benefits decreased $11,643, or 20.4 percent, primarily due to decreases in salary expense of $5,167, vacation expense of $2,963 (due to an announced change to the Companys vacation policy), 401(k) Plan expense of $1,869, sales commissions of $1,085, pension transition supplement expense of $860 and bonus expense of $780. These decreases were partially offset by an increase in medical insurance costs of $1,006. Station programming and other operating costs decreased $935, or 1.9 percent, with decreases in most expense categories, including a $3,029 decrease in advertising expense and a $928 decrease in national representation fees. In 2005, the Federal Communications Commission (FCC) allowed a major wireless provider to finance the replacement of analog newsgathering equipment with digital equipment. The Company recognized credits for this replacement of $765 in the second quarter 2009 and $4,733 in the second quarter 2008, as one Belo market converted to this digital equipment in the second quarter 2009 versus five Belo markets in the second quarter 2008. Corporate operating costs decreased $1,419, or 21.4 percent, in the second quarter 2009, primarily due to an insurance reimbursement.For the six months ended June 30, 2009, station salaries, wages and employee benefits decreased $21,119, or 17.7 percent, primarily due to decreases in salary expense of $8,458, vacation expense of $3,074 (due to the policy change noted above), 401(k) Plan expense of $3,061, bonus expense of $1,992, pension transition supplement expense of $1,966, sales commissions of $1,918 and self-insured medical insurance costs of $1,158. Station programming and other operating costs decreased $6,509, or 6.3 percent, with decreases in most expense categories, including a $4,611 decrease in advertising expense. For the six month periods, the credits recognized for the FCC decision discussed above were $2,634 and $4,733 for 2009 and 2008, respectively, as two Belo markets converted to this digital equipment in the first half of 2009 versus five Belo markets in the first half of 2008. Corporate operating costs decreased $1,559, or 9.9 percent, in the first six months of 2009, with a decrease in bonus expense of $1,637 and a $1,476 reduction in various other expense categories partially offset by an increase in pension expense of $2,029.
Interest expense decreased in the three and six months ended June 30, 2009, primarily due to the repayment of $350,000 of outstanding 8% Senior Notes in the fourth quarter of 2008 with funds from the revolving credit facility, which has a lower interest rate. Additionally, in the fourth quarter 2008 and the first quarter 2009, the Company purchased a total of $74,075 of the Companys outstanding 6 3/4% Senior Notes due in 2013 and $10,000 of the Companys outstanding 7 1/4% Senior Debentures due in 2027 for a total cost of $52,048. The purchases were also funded with lower rate borrowings under the credit facility.
Other income, net decreased $3,609 in the second quarter 2009 compared to the second quarter 2008. The second quarter of 2009 included $947 in costs related to the relocation of the Companys bureau in Washington, DC and an increase of $500 in the reserve for an investment. Other income, net increased $12,491 in the first half of 2009 compared to the first half of 2008 primarily due to a $14,905 gain related to the Companys first quarter 2009 purchase of debt securities as discussed above. The debt securities were purchased on the open market at a discount. Additionally, the Company sold its interest in a Web site joint venture for a gain of $1,616 in the first half of 2009.
Income taxes decreased $10,797, or 62.7 percent, for the three months ended June 30, 2009, compared with the three months ended June 30, 2008, due to lower taxable income. Income taxes decreased $28,084, or 70.0 percent, for the six months ended June 30, 2009, compared with the six months ended June 30, 2008, due to lower taxable income and a one-time tax charge in the first half of 2008 related to the spin-off of the Companys newspaper businesses and related assets. Although the spin-off otherwise qualifies for tax-free treatment to shareholders, the Company (but not its shareholders) recognized for tax purposes approximately $51,900 of previously deferred intercompany gains related to the transfer of certain intangibles to A. H. Belo, resulting in a federal income tax obligation estimated at $18,235 as of June 30, 2008.
At June 30, 2009, Belo had $615,406 in fixed-rate debt securities as follows: $175,406 of 6-3/4% Senior Notes due 2013, $200,000 of 7-3/4% Senior Debentures due 2027; and $240,000 of 7-1/4% Senior Debentures due 2027. The weighted average effective interest rate for the fixed-rate debt instruments is 7.3%.
Read the The complete ReportBLC is in the portfolios of Michael Price of MFP Investors LLC, Kenneth Fisher of Fisher Asset Management, LLC.
