A. H. Belo Corporation (AHC)

[Stock]

Here we go:

Additional Transaction Details

The spin-off is expected to be completed in the first quarter of 2008. The stock distribution ratio and record date will be determined and communicated in late 2007 or early 2008. Following the spin-off, each company will maintain two voting classes of common stock. A.H. Belo Series A shares will have one vote per share and its Series B shares will have ten votes per share. This is the same as Belo's current Series A and Series B shares.

It is expected that upon completion of the transaction, Series A shares for the new A. H. Belo will be listed on the New York Stock Exchange ("NYSE") under a ticker symbol to be determined, while the Series B shares for the new A. H. Belo will not be listed on any exchange for trading. This is the same structure currently in place at Belo. Series A shares of Belo Corp. will continue to trade on the NYSE under the ticker BLC.

In addition to Mr. Decherd, current Belo directors J. McDonald Williams (lead director), Douglas G. Carlston, Louis E. Caldera, Dealey D. Herndon and Laurence E. Hirsch will serve on the board of the new A. H. Belo.

In addition to Mr. Decherd, Ms. Shive and James M. Moroney III, current Belo directors Henry P. Becton, Jr. (lead director), Judith L. Craven, M.D., M.P.H., Dealey D. Herndon, Wayne R. Sanders, William T. Solomon, M. Anne Szostak and Lloyd D. Ward will serve on the board of Belo Corp.

Following the spin-off, A. H. Belo intends to pay an annual dividend of approximately $0.20 per share, paid quarterly, and Belo Corp. intends to pay an annual dividend of approximately $0.30 per share, paid quarterly. The actual amount and timing of each dividend are subject to final determination by the boards of the two companies. Annual capital expenditures are expected to be approximately $30 million for each company.


Belo Corp. will retain all outstanding indebtedness under its existing notes, debentures, and credit facility, which today aggregates to approximately $1.2 billion. Following the spin-off, Belo expects to have a debt-to-cash flow ratio of approximately 4.6 times or slightly higher, which is lower than the television industry average. The Company will have sufficient financial flexibility to service its debt and pay a recurring cash dividend while continuing to invest in other business development opportunities. Allocating any portion of the existing debt to A. H. Belo might limit its ability to obtain a separate and reasonable credit facility. After considering these and other factors, Belo's Board of Directors determined that retaining Belo's existing debt structure results in an appropriate capitalization for both companies.

Consummation of the spin-off transaction is subject to several conditions, including receipt of confirmation of the tax-free treatment of the spin-off by the Internal Revenue Service, receipt of NYSE listing and other regulatory approvals, and the filing and effectiveness of a registration statement on Form 10 with the Securities and Exchange Commission ("SEC"). Investors and shareholders will be able to obtain copies of the registration statement on Form 10 (including the risk factors set forth therein and detailed information pertaining to A. H. Belo), which is expected to be filed within the next 10 business days, as well as SEC filings previously made by Belo, without charge at the SEC's website: www.sec.gov. The Form 10 registration statement and the information statement included therein to be filed with the SEC will be preliminary and subject to change until such time as the SEC declares it effective. Belo will distribute the final information statement to Belo shareholders of record as of the record date established by the Belo board. Approval of the transaction by Belo shareholders, noteholders and debenture holders is not required and no FCC approval relating to Belo's television station licenses is needed.

Goldman, Sachs & Co. is acting as financial advisor, and Baker Botts, Locke Liddell & Sapp, Jones Day, and Wiley Rein are serving as legal advisors to Belo and A. H. Belo.


http://www.belo.com/pressRelease.x2?release=20071001-1279.html