January 18, 2008
Belo Receives IRS Ruling Confirming Spin-Off's Tax-Free Status
Company also Files Form 10 with SEC
DALLAS Belo Corp. (NYSE: BLC) announced that the Company has received a private letter ruling from the Internal Revenue Service confirming that the previously announced decision to spin off the Company's newspaper businesses and related assets will qualify as a tax-free distribution to Belo shareholders for U.S. federal income tax purposes. Belo also announced today the filing of its information statement on Form 10 with the Securities and Exchange Commission.
These two events are important steps in the completion of the spin-off transaction, which is scheduled to close on the distribution date, February 8, 2008. On January 11, 2008, the Company released details of the spin-off transaction as approved by the Board of Directors, including the distribution date, the record date and the distribution ratio of the transaction.
As noted in the Belo press release issued on December 4, 2007, the Company is engaged in performing its annual impairment testing of goodwill and other intangible assets using the methodology prescribed by Statement of Financial Accounting Standards No. 142. The testing is nearing completion and the Company continues to expect to record a non-cash impairment charge for the fourth quarter of 2007. While the charge is expected to be significant from a reported GAAP earnings perspective, it will be a non-cash charge and will not affect the Company's liquidity, cash flows from operating activities or debt covenants, or have any impact on future operations.
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 7,000 employees and approximately $1.6 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 20 television stations, six of which are in the 15 largest U.S. broadcast markets. The Company also owns or operates six cable news stations 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 Dia 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 www.belo.com or by contacting Paul Fry, vice president/Investor Relations & Corporate Communications, at 214-977-6835.
Statements in this communication concerning Belo's business outlook or future economic performance, anticipated profitability, revenue, 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, uncertainties regarding the execution, timing, costs, consequences (including tax consequences), and other effects of the spin-off of the newspaper business of Belo; 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 patterns and demography, and audits and related actions 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; Federal Communications Commission and other 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; 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.