A.H. Belo Outlk Revised to Stable by S&P;Rtgs Affirmed.NEW YORK--(BUSINESS WIRE)--Oct. 26, 1998--Standard & Poor's CreditWire 10/22/98 -- Standard & Poor's today revised the ratings outlook on A.H. Belo Corp. to stable from positive. The triple-'B'-minus corporate credit and senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. ratings for the company were affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. . The outlook change reflects the significant amount of common stock recently repurchased by Belo. As a result, the overall financial profile is not expected to materially improve over the intermediate term. Ratings reflect A.H. Belo's strong market positions and its diversified diversified (di·verˑ·s mix of newspaper publishing (56% of 1997 revenues, 50% of operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. ) and television broadcasting (43%, 52%) properties. Revenues total about $1.4 billion and operating cash flow is over $400 million. In addition, operating cash flow margins are healthy, and the company generates meaningful levels of cash flow after capital expenditures and dividends. These factors are tempered by Belo's significant debt burden incurred as a result of its February 1997 acquisition of the Providence Journal Co. for $1.8 billion in cash and stock. The company's business profile was enhanced by the Providence Journal acquisition, which added nine television stations, and the Providence Journal-Bulletin, the leading newspaper in Rhode Island Rhode Island, island, United States Rhode Island, island, 15 mi (24 km) long and 5 mi (8 km) wide, S R.I., at the entrance to Narragansett Bay. It is the largest island in the state, with steep cliffs and excellent beaches. and southeastern Massachusetts Southeastern Massachusetts is a term that refers to those portions of Massachusetts which are, by their proximity, economically and culturally linked to Providence, Rhode Island as well as Boston. . Belo has six daily newspapers, which also include the Dallas Morning News, the leading newspaper in Texas and the Southwest. The company's television operations consist of 17 network-affiliated stations with a market reach of 14% of the nation's households. The broadcast group is diversified by network affiliation, and most stations are ranked number one or two in their markets. Cash flow measures reflect Belo's approximately $1.6 billion of debt. Both operating cash flow to interest and total debt to operating cash flow are in the high 3 times (x) area. Aided by healthy operating cash flow margins of about 30% and manageable capital expenditure and dividend requirements, the company has the flexibility to reduce its debt levels with its discretionary cash flow Discretionary cash flow Cash flow that is available after the funding of all positive net present value (NPV) capital investment projects; it is available for paying cash dividends, repurchasing common stock, retiring debt, and so on. . However, Belo has repurchased nearly $90 million of its stock through mid-October. OUTLOOK: STABLE Ratings stability reflects the expectation that Belo will maintain its strong market positions and that the overall financial profile will gradually strengthen. -- CreditWire |
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