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20180630 Q2

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





Form 10-Q





QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2018 

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file no. 1-33741





Picture 1



A. H. Belo Corporation

(Exact name of registrant as specified in its charter)







 

 





 

 

Texas

 

38-3765318

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

P. O. Box 224866, Dallas, Texas 75222-4866

 

(214) 977-8222

(Address of principal executive offices, including zip code)

 

(Registrant’s telephone number, including area code)



Former name, former address and former fiscal year, if changed since last report.

None

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  



Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes      No  



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):





 

 

 

 

 

 

Large accelerated filer:  

 

Accelerated filer:  

 

Non-accelerated filer:  

 

Smaller reporting company:  

 

 

 

 

(Do not check if a smaller reporting company)

Emerging growth company  

 

 

 

 



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).      Yes      No 



Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest possible date.





 

 



 

 



 

Outstanding at

Class

 

July 31, 2018

Common Stock, $.01 par value

 

21,696,702





Total Common Stock consists of 19,227,147 shares of Series A Common Stock and 2,469,555 shares of Series B Common Stock. 

 

 


 

Table of Contents

 



A. H. BELO CORPORATION



FORM 10-Q



TABLE OF CONTENTS





 

 

 





 

 

 

 

 

Page

PART I

Item 1.

Financial Information

 

PAGE   3

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

PAGE 18

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

 

PAGE 25

Item 4.

Controls and Procedures

 

PAGE 25

 

 

 

 

PART II 

 

 

Item 1.

Legal Proceedings

 

PAGE 27

Item 1A.

Risk Factors

 

PAGE 27

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

PAGE 27

Item 3.

Defaults Upon Senior Securities

 

PAGE 27

Item 4.

Mine Safety Disclosures

 

PAGE 27

Item 5.

Other Information

 

PAGE 27

Item 6.

Exhibits

 

PAGE 28

Signatures

 

PAGE 31

Exhibit Index

 

PAGE 32



 

A. H. Belo Corporation Second Quarter 2018 on Form 10-Q


 

Table of Contents

 



PART I

Item 1.  Financial Information



A. H. Belo Corporation and Subsidiaries

Consolidated Statements of Operations





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended June 30,

 

Six Months Ended June 30,

In thousands, except share and per share amounts (unaudited)

 

2018

 

2017

 

2018

 

2017

Net Operating Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Advertising and marketing services

 

$

26,397 

 

$

36,022 

 

$

52,138 

 

$

71,226 

Circulation

 

 

17,921 

 

 

19,088 

 

 

35,668 

 

 

38,254 

Printing, distribution and other

 

 

6,851 

 

 

7,979 

 

 

12,816 

 

 

14,510 

Total net operating revenue

 

 

51,169 

 

 

63,089 

 

 

100,622 

 

 

123,990 

Operating Costs and Expense:

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

 

21,529 

 

 

25,712 

 

 

46,201 

 

 

54,446 

Other production, distribution and operating costs

 

 

22,833 

 

 

29,736 

 

 

45,847 

 

 

58,062 

Newsprint, ink and other supplies

 

 

5,461 

 

 

5,993 

 

 

10,772 

 

 

11,894 

Depreciation

 

 

2,535 

 

 

2,727 

 

 

5,008 

 

 

5,233 

Amortization

 

 

200 

 

 

199 

 

 

400 

 

 

399 

Asset impairments

 

 

(22)

 

 

 —

 

 

(22)

 

 

228 

Total operating costs and expense

 

 

52,536 

 

 

64,367 

 

 

108,206 

 

 

130,262 

Operating loss

 

 

(1,367)

 

 

(1,278)

 

 

(7,584)

 

 

(6,272)

Other income, net

 

 

891 

 

 

766 

 

 

1,779 

 

 

1,288 

Loss Before Income Taxes

 

 

(476)

 

 

(512)

 

 

(5,805)

 

 

(4,984)

Income tax provision (benefit)

 

 

58 

 

 

293 

 

 

(1,257)

 

 

251 

Net Loss

 

$

(534)

 

$

(805)

 

$

(4,548)

 

$

(5,235)



 

 

 

 

 

 

 

 

 

 

 

 

Per Share Basis

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.03)

 

$

(0.04)

 

$

(0.21)

 

$

(0.24)

Number of common shares used in the per share calculation:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

21,738,545 

 

 

21,743,390 

 

 

21,756,678 

 

 

21,717,032 



See the accompanying Notes to the Consolidated Financial Statements.

 

A. H. Belo Corporation Second Quarter 2018 on Form 10-Q     3


 

Table of Contents

 

A. H. Belo Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended June 30,

 

Six Months Ended June 30,

In thousands (unaudited)

 

2018

 

2017

 

2018

 

2017

Net Loss

 

$

(534)

 

$

(805)

 

$

(4,548)

 

$

(5,235)

Other Comprehensive Income (Loss), Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of actuarial losses

 

 

157 

 

 

56 

 

 

315 

 

 

113 

Total other comprehensive income, net of tax

 

 

157 

 

 

56 

 

 

315 

 

 

113 

Total Comprehensive Loss

 

$

(377)

 

$

(749)

 

$

(4,233)

 

$

(5,122)



See the accompanying Notes to the Consolidated Financial Statements.

 

A. H. Belo Corporation Second Quarter 2018 on Form 10-Q     4


 

Table of Contents

 

A. H. Belo Corporation and Subsidiaries

Consolidated Balance Sheets







 

 

 

 

 

 

  

 

 

 

 

 

 



 

June 30,

 

December 31,

In thousands, except share amounts (unaudited)

 

2018

 

2017

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

56,751 

 

$

57,660 

Accounts receivable (net of allowance of $719 and $1,055 at June 30, 2018

and December 31, 2017, respectively)

 

 

19,931 

 

 

26,740 

Inventories

 

 

4,101 

 

 

3,171 

Prepaids and other current assets

 

 

10,515 

 

 

13,734 

Assets held for sale

 

 

1,089 

 

 

1,089 

Total current assets

 

 

92,387 

 

 

102,394 

Property, plant and equipment, at cost

 

 

421,211 

 

 

418,730 

Less accumulated depreciation

 

 

(391,972)

 

 

(387,024)

Property, plant and equipment, net

 

 

29,239 

 

 

31,706 

Intangible assets, net

 

 

3,673 

 

 

4,073 

Goodwill

 

 

13,973 

 

 

13,973 

Deferred income taxes, net

 

 

7,051 

 

 

5,355 

Other assets

 

 

4,311 

 

 

5,347 

Total assets

 

$

150,634 

 

$

162,848 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

7,254 

 

$

10,303 

Accrued compensation and benefits

 

 

7,947 

 

 

8,243 

Other accrued expense

 

 

5,186 

 

 

4,275 

Advance subscription payments

 

 

11,525 

 

 

11,670 

Total current liabilities

 

 

31,912 

 

 

34,491 

Long-term pension liabilities

 

 

20,844 

 

 

23,038 

Other post-employment benefits

 

 

1,169 

 

 

2,052 

Other liabilities

 

 

6,912 

 

 

5,568 

Total liabilities

 

 

60,837 

 

 

65,149 

Shareholders’ equity:

 

 

 

 

 

 

Preferred stock, $.01 par value; Authorized 2,000,000 shares; none issued

 

 

 —

 

 

 —

Common stock, $.01 par value; Authorized 125,000,000 shares

 

 

 

 

 

 

Series A: issued 20,851,648 and 20,700,292 shares at June 30, 2018

and December 31, 2017, respectively

 

 

209 

 

 

208 

Series B: issued 2,469,635 and 2,469,755 shares at June 30, 2018

and December 31, 2017, respectively

 

 

24 

 

 

24 

Treasury stock, Series A, at cost; 1,591,141 and 1,430,961 shares held at June 30, 2018

and December 31, 2017, respectively

 

 

(12,127)

 

 

(11,302)

Additional paid-in capital

 

 

495,708 

 

 

494,989 

Accumulated other comprehensive loss

 

 

(24,617)

 

 

(24,932)

Accumulated deficit

 

 

(369,400)

 

 

(361,288)

Total shareholders’ equity

 

 

89,797 

 

 

97,699 

Total liabilities and shareholders’ equity

 

$

150,634 

 

$

162,848 



See the accompanying Notes to the Consolidated Financial Statements.

A. H. Belo Corporation Second Quarter 2018 on Form 10-Q     5


 

Table of Contents

 

A. H. Belo Corporation and Subsidiaries

Consolidated Statements of Shareholders’ Equity









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Common Stock

 

 

 

Treasury Stock

 

 

 

 

 

 

 

 

In thousands, except share amounts  (unaudited)

Shares   
Series A

Shares
Series B

Amount

Additional
Paid-in
Capital

 

Shares
Series A

Amount

Accumulated
Other
Comprehensive
Loss

Accumulated
Deficit

Noncontrolling
Interests

Total

Balance at December 31, 2016

20,620,461 

2,472,680 

$

231 

$

499,552 

 

(1,416,881)

$

(11,233)

$

(39,308)

$

(361,324)

$

1,234 

$

89,152 

Net loss

 —

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

(5,235)

 

 —

 

(5,235)

Other comprehensive income

 —

 —

 

 —

 

 —

 

 —

 

 —

 

113 

 

 —

 

 —

 

113 

Distributions to noncontrolling interests

 —

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

(118)

 

(118)

Issuance of shares for restricted stock units

76,906 

 —

 

 

(1)

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

Share-based compensation

 —

 —

 

 —

 

626 

 

 —

 

 —

 

 —

 

 —

 

 —

 

626 

Purchases of noncontrolling interests

 

 

 

 

 

(5,506)

 

 

 

 

 

 

 

 

 

(1,116)

 

(6,622)

Conversion of Series B to Series A

115 

(115)

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

Dividends

 —

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

(3,563)

 

 —

 

(3,563)

Balance at June 30, 2017

20,697,482 

2,472,565 

$

232 

$

494,671 

 

(1,416,881)

$

(11,233)

$

(39,195)

$

(370,122)

$

 —

$

74,353 

Balance at December 31, 2017

20,700,292 

2,469,755 

$

232 

$

494,989 

 

(1,430,961)

$

(11,302)

$

(24,932)

$

(361,288)

$

 —

$

97,699 

Net loss

 —

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

(4,548)

 

 —

 

(4,548)

Other comprehensive income

 —

 —

 

 —

 

 —

 

 —

 

 —

 

315

 

 —

 

 —

 

315

Treasury stock purchases

 —

 —

 

 —

 

 —

 

(160,180)

 

(825)

 

 —

 

 —

 

 —

 

(825)

Issuance of shares for restricted stock units

151,236

 —

 

 1

 

(1)

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

Share-based compensation

 —

 —

 

 —

 

720

 

 —

 

 —

 

 —

 

 —

 

 —

 

720

Conversion of Series B to Series A

120

(120)

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

Dividends

 —

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

(3,564)

 

 —

 

(3,564)

Balance at June 30, 2018

20,851,648

2,469,635

$

233

$

495,708

 

(1,591,141)

$

(12,127)

$

(24,617)

$

(369,400)

$

 —

$

89,797



See the accompanying Notes to the Consolidated Financial Statements.

 

A. H. Belo Corporation Second Quarter 2018 on Form 10-Q     6


 

Table of Contents

 

A. H. Belo Corporation and Subsidiaries

Consolidated Statements of Cash Flows







 

 

 

 

 

 



 

 

 

 

 

 



 

Six Months Ended June 30,

In thousands (unaudited)

 

2018

 

2017

Operating Activities

 

 

 

 

 

 

Net loss

 

$

(4,548)

 

$

(5,235)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

5,408 

 

 

5,632 

Net periodic pension and other post-employment benefit

 

 

(1,861)

 

 

(1,718)

Share-based compensation

 

 

720 

 

 

626 

Deferred income taxes

 

 

(1,696)

 

 

 —

Loss on investment related activity

 

 

 —

 

 

250 

Loss on disposal of fixed assets

 

 

208 

 

 

 —

Asset impairments

 

 

(22)

 

 

228 

Changes in working capital and other operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

Accounts receivable

 

 

6,809 

 

 

5,154 

Inventories, prepaids and other current assets

 

 

2,289 

 

 

(921)

Other assets

 

 

1,036 

 

 

637 

Accounts payable

 

 

(3,049)

 

 

(625)

Compensation and benefit obligations

 

 

(497)

 

 

(175)

Other accrued expenses

 

 

3,414 

 

 

(890)

Advance subscription payments

 

 

(145)

 

 

(411)

Other post-employment benefits

 

 

(901)

 

 

(30)

Net cash provided by operating activities

 

 

7,165 

 

 

2,522 

Investing Activities

 

 

 

 

 

 

Purchases of assets

 

 

(3,697)

 

 

(4,789)

Net cash used for investing activities

 

 

(3,697)

 

 

(4,789)

Financing Activities

 

 

 

 

 

 

Purchases of noncontrolling interests

 

 

 —

 

 

(9,231)

Dividends paid

 

 

(3,552)

 

 

(3,538)

Distributions to noncontrolling interests

 

 

 —

 

 

(179)

Purchases of treasury stock

 

 

(825)

 

 

 —

Net cash used for financing activities

 

 

(4,377)

 

 

(12,948)

Net decrease in cash and cash equivalents

 

 

(909)

 

 

(15,215)

Cash and cash equivalents, beginning of period

 

 

57,660 

 

 

80,071 

Cash and cash equivalents, end of period

 

$

56,751 

 

$

64,856 



 

 

 

 

 

 

Supplemental Disclosures

 

 

 

 

 

 

Income tax paid, net (refund)

 

$

(2,315)

 

$

1,163 

Noncash investing and financing activities:

 

 

 

 

 

 

Investments in property, plant and equipment payable

 

 

170 

 

 

160 

Dividends payable

 

 

1,786 

 

 

1,788 



See the accompanying Notes to the Consolidated Financial Statements.

 



 

A. H. Belo Corporation Second Quarter 2018 on Form 10-Q     7


 

Table of Contents

 

A. H. Belo Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

 

Note 1:  Basis of Presentation and Recently Issued Accounting Standards



Description of Business.    A. H. Belo Corporation and subsidiaries are referred to collectively herein as “A. H. Belo” or the “Company.” The Company, headquartered in Dallas, Texas, is a leading local news and information publishing company with commercial printing, distribution and direct mail capabilities, as well as expertise in emerging media and digital marketing. With a continued focus on extending the Company’s media platform, A. H. Belo delivers news and information in innovative ways to a broad spectrum of audiences with diverse interests and lifestyles. The Company publishes The Dallas Morning News (www.dallasnews.com), Texas’ leading newspaper and winner of nine Pulitzer Prizes, and various niche publications targeting specific audiences.  In December 2017, the Company completed the sale of the Denton Record-Chronicle and the Company no longer owns newspaper operations in Denton, Texas.



Basis of Presentation.     The interim consolidated financial statements included herein are unaudited; however, they include adjustments of a normal recurring nature which, in the Company’s opinion, are necessary to present fairly the interim consolidated financial information as of and for the periods indicated. All significant intercompany balances and transactions have been eliminated in consolidation. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. All dollar amounts presented herein, except share and per share amounts, are in thousands, unless the context indicates otherwise.



The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net operating revenues and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates.



Recently Adopted Accounting Pronouncements.



In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09Revenue from Contracts with Customers (Topic 606). This guidance prescribes a single comprehensive model for entities to use in the accounting of revenue arising from contracts with customers. The core principle contemplated by this new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount reflecting the consideration the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. Since May 2014, the FASB issued clarifying updates to the new standard specifically to address certain core principles including the identification of performance obligations, licensing guidance, the assessment of the collectability criterion, the presentation of taxes collected from customers, noncash considerations, contract modifications, and completed contracts at transition. The new guidance will supersede virtually all existing revenue guidance under GAAP and is effective for fiscal years beginning after December 31, 2017. There are two transition options available to entities, the full retrospective approach, in which the Company would restate prior periods, or the modified retrospective approach. The Company adopted ASU 2014-09 using the modified retrospective approach as of January 1, 2018;  see Note 3 – Revenue.



In March 2017, the FASB issued ASU 2017-07 – Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This update clarifies the presentation and classification of the components of net periodic benefit cost in the Consolidated Statement of Operations. Specifically, this standard requires the service cost component of net periodic benefit cost to be recorded in the same income statement line as other employee compensation costs and all other components of net periodic benefit cost must be presented as non-operating items. The Company adopted this standard retrospectively as of January 1, 2018. The Company’s defined benefit plans have been frozen, so the Company is no longer incurring service costs related to the plans. Therefore, the entire net periodic pension and other post-employment expense (benefit) will be presented in the Consolidated Statements of Operations in non-operating income (expense).



As a result of adopting this guidance, total operating costs and expense increased $931 and $1,861 for the three and six months ended June 30, 2018, respectively,  and $859 and $1,718 for the three and six months ended June 30, 2017, respectively, with the offsetting change recorded to non-operating income (expense). There was no impact to net income (loss), retained earnings and earnings per share for both years.

A. H. Belo Corporation Second Quarter 2018 on Form 10-Q     8


 

Table of Contents

 

New Accounting Pronouncements.    The FASB issued the following accounting pronouncements and guidance, which may be applicable to the Company but have not yet become effective.



In February 2016, the FASB issued ASU 2016-02Leases (Topic 842). This update requires an entity to recognize a right-of-use asset and a lease liability for virtually all of its leases. The liability will be equal to the present value of lease payments. The asset will generally be based on the liability. For income statement purposes operating leases will result in straight-line expense and finance leases will result in expenses similar to current capital leases. The guidance also requires additional disclosures to enable users of financial statements to understand the amount, timing and uncertainty of cash flows arising from leases. The guidance will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years and will be applied using the modified retrospective approach. Early adoption is permitted. The Company is currently reviewing its various lease agreements and assessing the potential impact of adopting the new standard. The Company believes it will have a significant impact related to how it accounts for real estate operating leases. Upon adoption, the Company expects to record additional assets and liabilities related to leases, but has not yet quantified its impact on the Company's consolidated financial statements.



In February 2017, the FASB issued ASU 2017-06 – Plan Accounting – Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962) and Health and Welfare Benefit Plans (Topic 965):  Employee Benefit Plan Master Trust Reporting. This update clarifies the presentation requirements for a plan’s interest in a master trust and requires more detailed disclosures of the plan’s interest in the master trust. The guidance will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the requirements of this update and has not yet determined its impact on the Company’s consolidated financial statements.



Note 2:  Segment Reporting



The Company identified two reportable segments based on reporting structure and the go-to-market for the Company’s service and product offerings. The two reportable segments are Publishing and Marketing Services.



The Publishing segment includes the Company’s core print and digital operations associated with its newspapers, niche publications and related websites and apps. These operations generate revenue from sales of advertising within its newspaper and digital platforms, subscription and retail sales of its newspapers, commercial printing and distribution services, primarily related to national and regional newspapers, and preprint advertisers. Businesses within the Publishing segment leverage the production facilities, subscriber and advertiser base, and digital news platforms to provide additional contribution margin. The Company evaluates Publishing operations based on operating profit and cash flows from operating activities.



The Marketing Services segment includes the operations of DMV Digital Holdings Company (“DMV Holdings”),  Your Speakeasy, LLC (“Speakeasy”) and digital advertising through Connect (programmatic advertising). The Company operates this integrated portfolio of assets within its Marketing Services segment as separate businesses that sell digital marketing and advertising through different channels, including programmatic advertising and content marketing within the social media environment.



Based on the organization of the Company’s structure and organizational chart, the Company’s chief operating decision maker (the “CODM”) is its Chief Executive Officer. As of May 17, 2018, Robert W. Decherd became the CODM upon Jim Moroney’s retirement. The CODM allocates resources and capital to the Publishing and Marketing Services segments at the segment level.

A. H. Belo Corporation Second Quarter 2018 on Form 10-Q     9


 

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The tables below set forth summarized financial information for the Company’s reportable segments.







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended June 30,

 

Six Months Ended June 30,



 

2018

 

2017

 

2018

 

2017

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Publishing

 

$

45,522 

 

$

54,822 

 

$

89,532 

 

$

108,313 

Marketing Services

 

 

5,647 

 

 

8,267 

 

 

11,090 

 

 

15,677 

Total

 

$

51,169 

 

$

63,089 

 

$

100,622 

 

$

123,990 



 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

Publishing

 

$

(1,745)

 

$

(2,067)

 

$

(7,880)

 

$

(7,651)

Marketing Services

 

 

378 

 

 

789 

 

 

296 

 

 

1,379 

Total

 

$

(1,367)

 

$

(1,278)

 

$

(7,584)

 

$

(6,272)



 

 

 

 

 

 

 

 

 

 

 

 

Noncash Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Publishing

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

$

2,498 

 

$

2,706 

 

$

4,934 

 

$

5,197 

Asset impairments

 

 

(22)

 

 

 —

 

 

(22)

 

 

228 

Total

 

$

2,476 

 

$

2,706 

 

$

4,912 

 

$

5,425 



 

 

 

 

 

 

 

 

 

 

 

 

Marketing Services

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

$

37 

 

$

21 

 

$

74 

 

$

36 

Amortization

 

 

200 

 

 

199 

 

 

400 

 

 

399 

Total

 

$

237 

 

$

220 

 

$

474 

 

$

435 







 

 

 

 

 

 



 

 

 

 

 

 



 

June 30,

 

December 31,



 

2018

 

2017

Total Assets

 

 

 

 

 

 

Publishing

 

$

127,657 

 

$

137,409 

Marketing Services

 

 

22,977 

 

 

25,439 

Total

 

$

150,634 

 

$

162,848 



Net periodic pension and other post-employment expense (benefit) is now included in non-operating income (expense) in the Consolidated Statements of Operations; see Note 1 – Basis of Presentation and Recently Issued Accounting Standards.  As a result of adopting the new retirement benefits guidance, Publishing operating costs and operating loss increased $931 and $1,861 for the three and six months ended June 30, 2018, respectively,  and $859 and $1,718 for the three and six months ended June 30, 2017, respectively.

A. H. Belo Corporation Second Quarter 2018 on Form 10-Q     10


 

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Note 3:  Revenue



Adoption of ASU 2014-09 – Revenue from Contracts with Customers (Topic 606)



On January 1, 2018, the Company adopted ASU 2014-09 using the modified retrospective approach applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented in accordance with the new guidance under ASU 2014-09, while prior period amounts are not restated.



The table below sets forth the impact on the Company’s Consolidated Statements of Operations for the three and six months ended June 30, 2018, due to the adoption of the new revenue guidance. There was no impact to opening retained earnings.







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended June 30, 2018

 

Six Months Ended June 30, 2018



 

As Reported

 

Balances Without Adoption

 

Effect of Change (Decrease)

 

As Reported

 

Balances Without Adoption

 

Effect of Change (Decrease)

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising and marketing services

 

$

26,397 

 

$

29,303 

 

$

(2,906)

 

$

52,138 

 

$

57,897 

 

$

(5,759)

Circulation

 

 

17,921 

 

 

18,190 

 

 

(269)

 

 

35,668 

 

 

36,195 

 

 

(527)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other production, distribution and operating costs

 

$

22,833 

 

$

26,008 

 

$

(3,175)

 

$

45,847 

 

$

52,133 

 

$

(6,286)



The impact to advertising and marketing services revenue was related to digital advertising placed on third-party websites where the Company acted as an agent. Prior to adoption, such revenue was generally recorded gross, but under the new standard this revenue is recorded net. The impact to circulation revenue was related to home delivery subscriptions where the Company recorded revenue for the grace period of newspapers delivered after a subscription expires. Prior to adoption, any non-payment of grace was recorded as bad debt expense, but under the new standard this is considered variable consideration and revenue is reduced for the non-payment.



Revenue Recognition



Revenue is recognized when obligations under the terms of a contract with our customer are satisfied. This occurs when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Sales tax collected concurrent with revenue-producing activities are excluded from revenue.



Accounts receivable are reported net of a valuation reserve that represents an estimate of amounts considered uncollectible. The Company estimates the allowance for doubtful accounts based on historical write-off experience and the Company’s knowledge of the customers’ ability to pay amounts due. Accounts are written-off after all collection efforts fail; generally, after one year has expired. Expense for such uncollectible amounts is included in other production, distribution and operating costs.



The table below sets forth revenue disaggregated by revenue source. As stated above, prior period amounts have not been restated under the modified retrospective approach.





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended June 30,

 

Six Months Ended June 30,



 

2018

 

2017

 

 

2018

 

2017

Advertising revenue

 

$

20,750 

 

$

27,755 

 

$

41,048 

 

$

55,549 

Digital services

 

 

4,462 

 

 

7,426 

 

 

8,549 

 

 

13,708 

Other services

 

 

1,185 

 

 

841 

 

 

2,541 

 

 

1,969 

Advertising and marketing services

 

26,397 

 

 

36,022 

 

 

52,138 

 

 

71,226 

Circulation

 

 

17,921 

 

 

19,088 

 

 

35,668 

 

 

38,254 

Printing, distribution and other

 

 

6,851 

 

 

7,979 

 

 

12,816 

 

 

14,510 

Total Revenue

 

$

51,169 

 

$

63,089 

 

$

100,622 

 

$

123,990 



Advertising and Marketing Services Revenue



Advertising revenue, included in the Publishing segment results, is generated by selling print and digital advertising products. Print advertising revenue represents sales of advertising space within the Company’s core and niche newspapers, as well as preprinted advertisements inserted into the Company’s core newspapers and niche publications or distributed to non-subscribers through the mail. Digital advertising is generated by selling banner and real estate classified advertising on The Dallas Morning News’ website

A. H. Belo Corporation Second Quarter 2018 on Form 10-Q     11


 

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dallasnews.com, online employment and obituary classified advertising on third-party websites sold under a print/digital bundle package and sales of online automotive classifieds on the cars.com platform.



Digital services and other services revenues are included in the Marketing Services segment results. Digital services revenue includes targeted and multi-channel (programmatic) advertising placed on third-party websites, content development, social media management, search optimization, and other consulting. Other services revenue is primarily generated from the sale of promotional merchandise.



Advertising and marketing services revenue is primarily recognized at a point in time when the ad or service is complete and delivered. If the customer has signed a contract for additional services in the future, that revenue is not recognized until the delivery date. In addition, certain digital advertising revenue related to website access is recognized over time, based on the customers’ monthly rate.



For ads placed on certain third-party websites, the Company must evaluate whether it is acting as the principal, where revenue is reported on a gross basis, or acting as the agent, where revenue is reported on a net basis. Generally, the Company reports advertising revenue for ads placed on third-party websites on a net basis, meaning the amount recorded to revenue is the amount billed to the customer net of amounts paid to the publisher of the third-party website. The Company is acting as the agent because the publisher controls the advertising inventory.



Circulation



Circulation revenue, included in the Publishing segment results, is generated primarily by selling home delivery and digital subscriptions, as well as single copy sales to non-subscribers. Home delivery and single copy revenue is recognized at a point in time when the paper is delivered or purchased. Digital subscriptions are recognized over time, based on the customers’ monthly rate.



Printing, Distribution and Other



Printing, distribution and other revenue, included in the Publishing segment results, is primarily generated from printing and distribution of other newspapers, as well as production of preprinted advertisements for other newspapers. Printing, distribution and other revenue is recognized at a point in time when the product or service is delivered.



Remaining Performance Obligations



The Company has various Publishing advertising contracts and Marketing Services digital services contracts that range from 13 months to 36 months. The Company recognizes revenue on the advertising contracts over the term of the agreement at a point in time when the service or product is delivered. The Company recognizes revenue on the digital services contracts over time, based on the customers’ monthly rate. At June 30, 2018, the remaining performance obligation was $2,307. The Company expects to recognize approximately $787 over the remainder of 2018 and $1,520 thereafter.



Deferred Revenue



Deferred revenue is recorded when cash payments are received in advance of the Company’s performance, including amounts which are refundable. The short-term and long-term deferred revenue increase of $391 for the six months ended June 30, 2018, was primarily driven by cash payments received in advance of satisfying our performance obligations, offset by $8,631 of revenue recognized that was included in the deferred revenue balance as of December 31, 2017.



Practical Expedients and Exemptions



The Company generally expenses sales commissions and circulation acquisition costs when incurred because the amortization period would have been one year or less. These costs are recorded within employee compensation and benefits expense and other production, distribution and operating costs expense, respectively.



The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less and contracts for which revenue is recognized at the amount invoiced for services performed.







A. H. Belo Corporation Second Quarter 2018 on Form 10-Q     12


 

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Note 4: Acquisitions



In February 2017, the Company acquired the remaining 30 percent voting interest in Speakeasy for a cash purchase price of $2,111, and in  March 2017, the Company acquired the remaining 20 percent voting interest in DMV Holdings for a cash purchase price of $7,120. The initial purchase of 80 percent voting interest in DMV Holdings occurred in January 2015. DMV Holdings holds all outstanding ownership interests of three Dallas-based businesses, Distribion, Inc., Vertical Nerve, Inc. and CDFX, LLC. These businesses specialize in local marketing automation, search engine marketing, and direct mail and promotional products, respectively. These acquisitions complement the product and service offerings currently available to A. H. Belo clients, thereby strengthening the Company’s diversified product portfolio and allowing for greater penetration in a competitive advertising market. Operating results of the businesses acquired have been included in the Consolidated Statements of Operations from the initial acquisition date forward.



Pro-rata distributions.    In connection with the 2015 acquisition of 80 percent voting interest in DMV Holdings, the shareholder agreement provided for a pro-rata distribution of 50 percent and 100 percent of DMV Holdings’ free cash flow for fiscal years 2016 and 2015, respectively. Free cash flow is defined as earnings before interest, taxes, depreciation and amortization less capital expenditures, debt amortization and interest expense, as applicable. In the six months ended June 30, 2017, the Company recorded pro-rata distributions to noncontrolling interests of $163 in connection with this agreement based on 2016 free cash flow as defined.



Note 5Goodwill and Intangible Assets



The table below sets forth goodwill and other intangible assets by reportable segment as of June 30, 2018 and December 31, 2017.  In the first quarter of 2017, the Company reorganized reporting units based on reporting structure and the go-to-market for the Company’s service and product offerings. The Company’s Publishing and Marketing Services segments each operate as a single reporting unit.





 

 

 

 

 



 

 

 

 

 



June 30,

 

December 31,



2018

 

2017

Goodwill

 

 

 

 

 

Marketing Services

$

13,973 

 

$

13,973 



 

 

 

 

 

Intangible Assets

 

 

 

 

 

Marketing Services

 

 

 

 

 

Cost

$

6,470 

 

$

6,470 

Accumulated Amortization

 

(2,797)

 

 

(2,397)

Net Carrying Value

$

3,673 

 

$

4,073 



Marketing Services’ intangible assets consist of $4,950 of customer relationships with estimated useful lives of 10 years and $1,520 of developed technology with an estimated useful life of five years. In 2017, the Publishing segment’s fully amortized intangible assets were written-off and had no remaining useful life. Aggregate amortization expense was $200 and $400 for the three and six months ended June 30, 2018, respectively, and $199 and $399 for the three and six months ended June 30, 2017, respectively.



As a result of the first quarter 2017 segment reorganization, certain goodwill and intangible assets previously reported in the Marketing Services segment were moved to the Publishing segment, which was fully impaired as of December 31, 2016. Therefore, the Company recorded a noncash goodwill impairment charge of $228 in the first quarter of 2017.



The Company tested the Marketing Services segment’s goodwill for impairment as of December 31, 2017, using a discounted cash flow methodology with a peer-based, risk-adjusted weighted average cost of capital, combined with a market approach using peer-based earnings multiples. The Company believes the use of a discounted cash flow approach, combined with the market approach, is the most reliable indicator of the estimated fair value of the business. Upon completion of the annual test, it was determined the Marketing Services reporting unit’s fair value exceeded its carrying value by approximately 93 percent. Accordingly, no impairment was warranted.

A. H. Belo Corporation Second Quarter 2018 on Form 10-Q     13


 

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Note 6Long-term Incentive Plan



A. H. Belo sponsors a long-term incentive plan (the “Plan”) under which 8,000,000 shares of the Company’s Series A and Series B common stock are authorized for equity-based awards. Awards may be granted to A. H. Belo employees and outside directors in the form of non-qualified stock options, incentive stock options, restricted share awards,  restricted stock units (“RSUs”), performance shares, performance units or stock appreciation rights. In addition, stock options may be accompanied by full and limited stock appreciation rights. Rights and limited stock appreciation rights may also be issued without accompanying stock options. Awards under the Plan were also granted to holders of stock options issued by A. H. Belo’s former parent company in connection with the Company’s separation from its former parent in 2008. Due to the expiration of the Plan on February 8, 2018, A. H. Belo implemented, and shareholders approved, a new long-term incentive plan (the “2017 Plan”) under which an additional 8,000,000 shares of the Company’s Series A and Series B common stock are authorized for equity-based awards. Like its predecessor plan, awards under the 2017 Plan may be granted to A. H. Belo employees and outside directors in the form of non-qualified stock options, incentive stock options, restricted share awards, RSUs, performance shares, performance units or stock appreciation rights.



Stock Options.    Stock options granted under the Plan are fully vested and exercisable. No options have been granted since 2009, and all compensation expense associated with stock options has been fully recognized as of June 30, 2018.



There were 100,344 options outstanding at a weighted average exercise price of $6.46 as of June 30, 2018 and December 31, 2017. No options were exercised in the six months ended June 30, 2018 and 2017. As of June 30, 2018, the aggregate intrinsic value of outstanding options was $8 and the weighted average remaining contractual life of the Company’s stock options was less than one year. 



Restricted Stock Units.    The Company’s RSUs have service and/or performance conditions and, subject to retirement eligibility, vest over a period of up to three years. Vested RSUs are redeemed 60 percent in A. H. Belo Series A common stock and 40 percent in cash over a period of up to three years. As of June 30, 2018, the liability for the portion of the awards to be redeemed in cash was $828.



The table below sets forth a summary of RSU activity under the Company’s long-term incentive plans.





 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Total
RSUs

 

Issuance of
Common
Stock

 

RSUs
Redeemed in
Cash

 

Cash
Payments at
Closing Price
of Stock

 

Weighted
Average Price
on Date of
Grant

Non-vested at December 31, 2017

224,053 

 

 

 

 

 

 

 

 

$

6.07 

Granted

338,210 

 

 

 

 

 

 

 

 

 

5.08 

Canceled

(3,711)

 

 

 

 

 

 

 

 

 

6.06 

Vested and outstanding

(184,774)

 

 

 

 

 

 

 

 

 

5.38 

Vested and issued

(114,248)

 

68,543 

 

45,705 

 

$

235 

 

 

6.29 

Non-vested at June 30, 2018

259,530 

 

 

 

 

 

 

 

 

 

5.17 



In the six months ended June 30, 2018, the Company issued 82,693 shares of Series A common stock and 55,128 shares were redeemed in cash for RSUs that were previously vested as of December 31, 2017. In addition,  337,778 and 290,825 RSUs were vested and outstanding as of June 30, 2018 and December 31, 2017, respectively.



The fair value of RSU grants is determined using the closing trading price of the Company’s Series A common stock on the grant date. As of June 30, 2018, unrecognized compensation expense related to non-vested RSUs totaled $1,418, which is expected to be recognized over a weighted average period of 2.4 years.



Compensation Expense.     A. H. Belo recognizes compensation expense for awards granted under the Company’s long-term incentive plans over the vesting period of the award. Compensation expense related to granted RSUs is set forth in the table below.





 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



RSUs

Redeemable

in Stock

 

RSUs
 Redeemable
 in Cash

 

Total
RSU Awards
 Expense

Three Months Ended June 30,

 

 

 

 

 

 

 

 

2018

$

103 

 

$

34 

 

$

137 

2017

 

185 

 

 

38 

 

 

223 

Six Months Ended June 30,

 

 

 

 

 

 

 

 

2018

$

720 

 

$

312 

 

$

1,032 

2017

 

626 

 

 

317 

 

 

943 













A. H. Belo Corporation Second Quarter 2018 on Form 10-Q     14


 

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Note 7:  Income Taxes



The Company calculates the income tax provision based on the year-to-date pretax loss adjusted for permanent differences and discrete items on a pro-rata basis. As such, a discrete tax rate was calculated for the period.



In December 2017, the Tax Cuts and Jobs Act (the “2017 Tax Act”) was enacted. The 2017 Tax Act includes a number of changes to existing U.S. tax laws that impact the Company, most notably a reduction of the U.S. corporate income tax rate from 35 percent to 21 percent for tax years beginning after December 31, 2017. The 2017 Tax Act also provides for the acceleration of depreciation for certain assets placed into service after September 27, 2017, as well as prospective changes beginning in 2018, including repeal of the domestic manufacturing deduction, acceleration of tax revenue recognition, capitalization of research and development expenditures, additional limitations on executive compensation and limitations on the deductibility of interest.

 

The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Accordingly, the Company’s deferred tax assets and liabilities were remeasured to reflect the reduction in the U.S. corporate income tax rate from 35 percent to 21 percent, resulting in a $3,570 decrease in income tax benefit for the year ended December 31, 2017.



The Company recognized income tax provision (benefit) of $58 and $293 for the three months ended June 30, 2018 and 2017, respectively, and $(1,257) and $251 for the six months ended June 30, 2018 and 2017, respectively. The income tax provision (benefit) was calculated using the newly enacted income tax rate of 21 percent,  resulting in a $398 decrease in income tax benefit for the six months ended June 30, 2018. Effective income tax rates were 21.7 percent and (5.0) percent for the six months ended June 30, 2018 and 2017, respectively. The effective income tax rate for the six months ended June 30, 2018, was due to changes in the valuation allowance, an increase in the net operating loss deferred tax asset and the effect of the Texas margin tax. The change to the valuation allowance was a decrease of $362 for the six months ended June 30, 2018, primarily due to the pension liability, accrued bonuses and the allowance for bad debt.



A refund of $3,210 was received in the second quarter of 2018, for a  tax benefit recognized in 2016 that was carried back against taxes paid in 2014. The tax benefit was the result of the abandonment of the Company’s ownership interest in Wanderful Media, LLC and the sale of the Company’s equity investment in Homesnap, Inc. in the fourth quarter of 2016.



Note 8Pension and Other Retirement Plans



Defined Benefit Plans.   The Company sponsors the A. H. Belo Pension Plans (the “Pension Plans”), which provide benefits to approximately 1,500 current and former employees of the Company. A. H. Belo Pension Plan I provides benefits to certain current and former employees primarily employed with The Dallas Morning News or the A. H. Belo corporate offices. A. H. Belo Pension Plan II provides benefits to certain former employees of The Providence Journal Company. This obligation was retained by the Company upon the sale of the newspaper operations of The Providence Journal.  No additional benefits are accruing under the A. H. Belo Pension Plans, as future benefits were frozen.



No contributions are required to the A. H. Belo Pension Plans in 2018 under the applicable tax and labor laws governing pension plan funding.



Net Periodic Pension Benefit



The Company’s estimates of net periodic pension expense or benefit are based on the expected return on plan assets, interest on the projected benefit obligations and the amortization of actuarial gains and losses that are deferred in accumulated other comprehensive loss. The table below sets forth components of net periodic pension benefit, which are included in non-operating income (expense) in the Consolidated Statements of Operations.







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended June 30,

 

Six Months Ended June 30,



 

2018

 

2017

 

2018

 

2017

Interest cost

 

$

1,797 

 

$

2,386 

 

$

3,593 

 

$

4,772 

Expected return on plans' assets

 

 

(2,893)

 

 

(3,314)

 

 

(5,787)

 

 

(6,627)

Amortization of actuarial loss

 

 

167 

 

 

74 

 

 

335 

 

 

149 

Net periodic pension benefit

 

$

(929)

 

$

(854)

 

$

(1,859)

 

$

(1,706)



Defined Contribution Plans.   The A. H. Belo Savings Plan (the “Savings Plan”), a defined contribution 401(k) plan, covers substantially all employees of A. H. Belo. Participants may elect to contribute a portion of their pretax compensation as provided by the

A. H. Belo Corporation Second Quarter 2018 on Form 10-Q     15


 

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Savings Plan and the Internal Revenue Code. Employees can contribute up to 100 percent of their annual eligible compensation less required withholdings and deductions up to statutory limits. The Company provides an ongoing dollar-for-dollar match of eligible employee contributions, up to 1.5 percent of the employees’ compensation. During the three months ended June 30, 2018 and 2017, the Company recorded expense of $211 and $231, respectively, and during the six months ended June 30, 2018 and 2017, the Company recorded expense of $454 and $495, respectively, for matching contributions to the Savings Plan.

 

Note 9Shareholders’ Equity



Dividends.    On May 16, 2018, the Company’s board of directors declared  an $0.08 per share dividend to shareholders of record and holders of RSUs as of the close of business on August 17, 2018, which is payable on September 7, 2018. During the three months ended June 30, 2018, the Company recorded $1,786 to accrue for dividends declared but not yet paid.



Treasury Stock.   The Company repurchased shares of its common stock pursuant to a publicly announced share repurchase program authorized by the Company’s board of directors. In the fourth quarter of 2017, the Company resumed open market repurchases under a repurchase plan agreement limited to a total of $2,500.  During the second quarter of 2018, the Company repurchased 51,402 shares of its Series A common stock at a total cost of $270.



Outstanding Shares.    The Company had Series A and Series B common stock outstanding of 19,260,507 and 2,469,635, respectively, net of treasury shares at June 30, 2018. At December 31, 2017, the Company had Series A and Series B common stock outstanding of 19,269,331 and 2,469,755, respectively, net of treasury shares.



Accumulated other comprehensive loss.    Accumulated other comprehensive loss consists of actuarial gains and losses attributable to the A. H. Belo Pension Plans,  gains and losses resulting from Pension Plans’ amendments and other actuarial experience attributable to other post-employment benefit (“OPEB”) plans. The Company records amortization of the components of accumulated other comprehensive loss in employee compensation and benefits in its Consolidated Statements of Operations. Gains and losses associated with the A. H. Belo Pension Plans are amortized over the weighted average remaining life expectancy of the Pension Plans’ participants. Gains and losses associated with the Company’s OPEB plans are amortized over the average remaining service period of active OPEB plans’ participants. Net deferred tax assets related to amounts recorded in accumulated other comprehensive loss are fully reserved.



The table below sets forth the changes in accumulated other comprehensive loss, net of tax, as presented in the Company’s consolidated financial statements.







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended June 30,



 

2018

 

2017



 

Total

 

Defined
benefit pension
plans

 

Other post-

employment

benefit plans

 

Total

 

Defined
benefit pension
plans

 

Other post-

employment

benefit plans

Balance, beginning of period

 

$

(24,774)

 

$

(25,266)

 

$

492 

 

$

(39,251)

 

$

(39,662)

 

$

411 

Amortization

 

 

157 

 

 

167 

 

 

(10)

 

 

56 

 

 

74 

 

 

(18)

Balance, end of period

 

$

(24,617)

 

$

(25,099)

 

$

482 

 

$

(39,195)

 

$

(39,588)

 

$

393 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Six Months Ended June 30,



 

2018

 

2017



 

Total

 

Defined
benefit pension
plans

 

Other post-
employment
benefit plans

 

Total

 

Defined
benefit pension
plans

 

Other post-
employment
benefit plans

Balance, beginning of period

 

$

(24,932)

 

$

(25,434)

 

$

502 

 

$

(39,308)

 

$

(39,737)

 

$

429 

Amortization

 

 

315 

 

 

335 

 

 

(20)

 

 

113 

 

 

149 

 

 

(36)

Balance, end of period

 

$

(24,617)

 

$

(25,099)

 

$

482 

 

$

(39,195)

 

$

(39,588)

 

$

393 



A. H. Belo Corporation Second Quarter 2018 on Form 10-Q     16


 

Table of Contents

 











Note 10:  Earnings Per Share



The table below sets forth the reconciliation for net loss and weighted average shares used for calculating basic and diluted earnings per share (“EPS”). The Company’s Series A and Series B common stock equally share in the distributed and undistributed earnings.







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended June 30,

 

Six Months Ended June 30,