##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: September 30, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File No. 1-33741
 A. H. Belo Corporation
 (Exact name of registrant as specified in its charter)
 Delaware(State or other jurisdiction of 
incorporation or organization)
    
    38-3765318(I.R.S. employer
identification no.)P. O. Box 224866
Dallas, Texas(Address of principal executive offices)
    
    75222-4866(Zip code)
 (214) 977-8200
 None
  Yes þ No o
  Yes o No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  Yes o No þ
  Class
    
    Outstanding at October 29, 2010Common Stock, $.01 par value
    
    21,097,956
 
 *
    
    Consisting of 18,578,046 shares of Series A Common Stock and
2,519,910 shares of Series B Common Stock.




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##### 



A. H. BELO CORPORATION
 FORM 10-Q
 TABLE OF CONTENTS
 PagePART I FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    3Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    20Item 4T. Controls and Procedures
    
    
    20PART II OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    21Item 1A. Risk Factors
    
    
    21Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    21Item 3. Defaults Upon Senior Securities
    
    
    21Item 4. Removed and Reserved
    
    
    21Item 5. Other Information
    
    
    21Item 6. Exhibits
    
    
    22Signatures
    
    
    25EX-10.1.7EX-31.1EX-31.2EX-32
  2




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##### Table of Contents



PART I.
 
 Item 1. Financial Statements
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  Three months ended September 30,
    
    
    Nine months ended September 30,In thousands, except per share amounts (unaudited)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Net Operating RevenuesAdvertising
    
    $
    74,388
    
    
    $
    83,816
    
    
    $
    223,578
    
    
    $
    260,638Circulation
    
    
    34,927
    
    
    
    35,228
    
    
    
    105,970
    
    
    
    100,208Other
    
    
    9,817
    
    
    
    7,823
    
    
    
    26,914
    
    
    
    22,019Total net operating revenues
    
    
    119,132
    
    
    
    126,867
    
    
    
    356,462
    
    
    
    382,865Operating Costs and ExpensesSalaries, wages and employee benefits
    
    
    49,322
    
    
    
    51,668
    
    
    
    162,394
    
    
    
    166,283Other production, distribution and operating costs
    
    
    43,280
    
    
    
    48,920
    
    
    
    136,341
    
    
    
    155,652Newsprint, ink and other supplies
    
    
    13,280
    
    
    
    12,302
    
    
    
    36,994
    
    
    
    48,345Asset impairment
    
    
    857
    
    
    
    20,000
    
    
    
    862
    
    
    
    102,689Depreciation
    
    
    7,496
    
    
    
    9,257
    
    
    
    25,101
    
    
    
    29,456Amortization
    
    
    1,310
    
    
    
    1,625
    
    
    
    3,930
    
    
    
    4,874Total operating costs and expenses
    
    
    115,545
    
    
    
    143,772
    
    
    
    365,622
    
    
    
    507,299Income (loss) from operations
    
    
    3,587
    
    
    
    (16,905
    )
    
    
    (9,160
    )
    
    
    (124,434
    )Other Income and ExpenseInterest expense
    
    
    (199
    )
    
    
    (211
    )
    
    
    (605
    )
    
    
    (802
    )Other income (expense), net
    
    
    1,805
    
    
    
    240
    
    
    
    7,798
    
    
    
    362Total other income (expense)
    
    
    1,606
    
    
    
    29
    
    
    
    7,193
    
    
    
    (440
    )Income (loss) before income taxes
    
    
    5,193
    
    
    
    (16,876
    )
    
    
    (1,967
    )
    
    
    (124,874
    )Income tax expense (benefit)
    
    
    621
    
    
    
    (11,110
    )
    
    
    2,760
    
    
    
    (11,331
    )Net income (loss)
    
    $
    4,572
    
    
    $
    (5,766
    )
    
    $
    (4,727
    )
    
    $
    (113,543
    )Net income (loss) per share:Basic
    
    $
    0.21
    
    
    $
    (0.28
    )
    
    $
    (0.23
    )
    
    $
    (5.53
    )Diluted
    
    $
    0.20
    
    
    $
    (0.28
    )
    
    $
    (0.23
    )
    
    $
    (5.53
    )Weighted average shares outstanding:Basic
    
    
    22,127
    
    
    
    20,538
    
    
    
    20,935
    
    
    
    20,529Diluted
    
    
    22,391
    
    
    
    20,538
    
    
    
    20,935
    
    
    
    20,529
 See accompanying Notes to Condensed Consolidated Financial Statements.
 3




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CONDENSED CONSOLIDATED BALANCE SHEETS
  September 30, 2010
    
    
    December 31, 2009In thousands, except share and per share amounts
    
    (unaudited)AssetsCurrent assets:Cash and temporary cash investments
    
    $
    81,304
    
    
    $
    24,503Accounts receivable (net of allowance of $4,352 and $
6,505 at September 30, 2010 and December 31,
2009, respectively)
    
    
    46,245
    
    
    
    62,977Funds held by Belo Corp. for future pension payments
    
    
    3,410
    
    
    
    11,978Inventories
    
    
    9,837
    
    
    
    10,460Assets held for sale
    
    
    5,268
    
    
    
    5,268Prepaids and other current assets
    
    
    6,384
    
    
    
    6,758Total current assets
    
    
    152,448
    
    
    
    121,944Property, plant and equipment at cost:Land
    
    
    27,061
    
    
    
    27,844Buildings and improvements
    
    
    206,659
    
    
    
    211,793Publishing equipment
    
    
    312,224
    
    
    
    348,089Other
    
    
    147,301
    
    
    
    146,174Advance payments on property, plant and equipment
    
    
    3,591
    
    
    
    12,996Total property, plant and equipment
    
    
    696,836
    
    
    
    746,896Less accumulated depreciation
    
    
    516,172
    
    
    
    543,567Property, plant and equipment, net
    
    
    180,664
    
    
    
    203,329Intangible assets, net
    
    
    23,498
    
    
    
    27,427Goodwill
    
    
    24,582
    
    
    
    24,582Investments
    
    
    22,147
    
    
    
    21,314Other assets
    
    
    4,229
    
    
    
    5,831Total assets
    
    $
    407,568
    
    
    $
    404,427
 See accompanying Notes to Condensed Consolidated Financial Statements.
 4




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CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
  September 30, 2010
    
    
    December 31, 2009In thousands, except share and per share amounts
    
    (unaudited)Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    18,734
    
    
    $
    19,191Accrued compensation and benefits
    
    
    23,206
    
    
    
    11,692Other accrued expenses
    
    
    15,023
    
    
    
    18,096Advance subscription payments
    
    
    23,814
    
    
    
    26,713Total current liabilities
    
    
    80,777
    
    
    
    75,692Other post employment benefits
    
    
    3,601
    
    
    
    3,876Deferred income taxes
    
    
    1,125
    
    
    
    223Other liabilities
    
    
    3,204
    
    
    
    3,039Commitments and contingent liabilitiesShareholders equity:Preferred stock, $.01 par value. Authorized
2,000,000 shares; none
issued.
    
    
    
    
    
    
    Common stock, $.01 par value. Authorized
125,000,000 sharesSeries A: issued 18,578,020 and
18,248,970 shares at September 30, 2010
and December 31, 2009, respectively
    
    
    185
    
    
    
    182Series B: issued 2,519,936 and 2,507,590
shares at September 30, 2010 and
December 31, 2009, respectively
    
    
    25
    
    
    
    25Additional paid-in capital
    
    
    490,837
    
    
    
    488,241Accumulated other comprehensive income (loss)
    
    
    2,756
    
    
    
    3,364Accumulated deficit
    
    
    (174,942
    )
    
    
    (170,215
    )Total shareholders equity
    
    
    318,861
    
    
    
    321,597Total liabilities and
shareholders equity
    
    $
    407,568
    
    
    $
    404,427
 See accompanying Notes to Condensed Consolidated Financial Statements.
 5




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CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
  Nine months ended September 30, 2010Common Stock
    
    
    
    
    
    
    Additional
    
    
    OtherShares
    
    
    Shares
    
    
    
    
    
    
    Paid-in
    
    
    Comprehensive
    
    
    RetainedIn thousands, except share amounts (unaudited)
    
    Series A
    
    
    Series B
    
    
    Amount
    
    
    Capital
    
    
    Income
    
    
    Deficit
    
    
    TotalBalance at December 31, 2009
    
    
    18,248,970
    
    
    
    2,507,590
    
    
    $
    207
    
    
    $
    488,241
    
    
    $
    3,364
    
    
    $
    (170,215
    )
    
    $
    321,597Share-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,668
    
    
    
    
    
    
    
    
    
    
    
    1,668Conversion of Series B to Series A
    
    
    31,944
    
    
    
    (31,944
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of shares for restricted stock units
    
    
    72,848
    
    
    
    
    
    
    
    1
    
    
    
    18
    
    
    
    
    
    
    
    
    
    
    
    19Issuance of shares for stock option exercises
    
    
    224,258
    
    
    
    44,290
    
    
    
    2
    
    
    
    951
    
    
    
    
    
    
    
    
    
    
    
    953Income tax on stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (41
    )
    
    
    
    
    
    
    
    
    
    
    (41
    )Amortization of curtailment gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (608
    )
    
    
    
    
    
    
    (608
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,727
    )
    
    
    (4,727
    )Balance at September 30, 2010
    
    
    18,578,020
    
    
    
    2,519,936
    
    
    $
    210
    
    
    $
    490,837
    
    
    $
    2,756
    
    
    $
    (174,942
    )
    
    $
    318,861
 See accompanying Notes to Condensed Consolidated Financial Statements.
 6




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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  Nine months ended September 30,In thousands (unaudited)
    
    2010
    
    
    2009OperationsNet loss
    
    $
    (4,727
    )
    
    $
    (113,543
    )Adjustments to reconcile net loss to net cash provided by operations:Depreciation and amortization
    
    
    29,031
    
    
    
    34,330(Gain)/loss on disposal of fixed assets
    
    
    (6,213
    )
    
    
    Asset impairments
    
    
    862
    
    
    
    103,689Deferred income taxes
    
    
    902
    
    
    
    (1,302
    )Employee retirement benefit expense
    
    
    98
    
    
    
    99Share-based compensation
    
    
    2,336
    
    
    
    1,311Other non-cash items
    
    
    (2,763
    )
    
    
    (890
    )Net changes in operating assets and liabilities:Accounts receivable
    
    
    18,885
    
    
    
    7,465Funds held by Belo Corp. for future pension payments
    
    
    8,568
    
    
    
    Inventories
    
    
    623
    
    
    
    10,988Prepaids and other current assets
    
    
    374
    
    
    
    1,102Other, net
    
    
    726
    
    
    
    (143
    )Accounts payable
    
    
    (457
    )
    
    
    (18,586
    )Accrued compensation and benefits
    
    
    11,514
    
    
    
    (13,684
    )Accrued interest payable
    
    
    
    
    
    
    (11
    )Other accrued expenses
    
    
    (3,073
    )
    
    
    3,279Advance subscription payments
    
    
    (2,899
    )
    
    
    1,781Net cash provided by operations
    
    
    53,787
    
    
    
    15,885InvestmentsCapital expenditures
    
    
    (6,479
    )
    
    
    (7,833
    )Proceeds from sale of fixed assets
    
    
    9,728
    
    
    
    503Other, net
    
    
    (1,167
    )
    
    
    2,336Net cash provided by (used for) investments
    
    
    2,082
    
    
    
    (4,994
    )FinancingProceeds from exercise of stock options
    
    
    932
    
    
    
    Payments on credit facility
    
    
    
    
    
    
    (10,000
    )Cash provided by (used in) financing activities
    
    
    932
    
    
    
    (10,000
    )Net increase in cash and temporary cash investments
    
    
    56,801
    
    
    
    891Cash and temporary cash investments at beginning of period
    
    
    24,503
    
    
    
    9,934Cash and temporary cash investments at end of period
    
    $
    81,304
    
    
    $
    10,825Supplemental DisclosuresInterest paid, net of amounts capitalized
    
    $
    
    
    
    $
    232Income taxes paid, net of refunds
    
    $
    2,400
    
    
    $
    3,400
 See accompanying Notes to Condensed Consolidated Financial Statements.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
   (1)
    
    The accompanying unaudited condensed consolidated financial statements of A. H. Belo
Corporation and its subsidiaries (the Company or A. H. Belo) have been prepared in
accordance with United States Generally Accepted Accounting Principles, (GAAP) for interim
financial information and in accordance with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and footnotes required
by GAAP for complete financial statements. The preparation of consolidated financial
statements in conformity with GAAP requires management to make estimates and assumptions that
affect the amounts reported in the consolidated financial statements and accompanying notes.
Actual results could differ from those estimates. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Transactions between the companies comprising A. H. Belo have
been eliminated in the condensed consolidated financial statements. These condensed
consolidated financial statements should be read in conjunction with the audited financial
statements and footnotes thereto included in the Companys Annual Report on Form 10-K for the
year ended December 31, 2009. Operating results for the three and nine month periods ended
September 30, 2010 are not necessarily indicative of the results that may be expected for the
year ending December 31, 2010.
 (2)
    
    The Company owns and operates three primary daily newspapers: The Dallas Morning News, The
Providence Journal, and The Press-Enterprise(Riverside, CA). Each publishes and distributes
local, state, national, and international news. In addition to these three daily newspapers,
the Company publishes various niche products in the same or nearby markets where the primary
daily newspapers are located. Each of the Companys daily newspapers and niche publications
operates and maintains its own Web site. The Company also operates direct mail and commercial
printing and distribution businesses. The Companys operating segments are defined as its
newspapers within a given market. The Company has determined that according to the applicable
accounting guidance all of its operating segments meet the criteria to be aggregated into one
reporting segment.
 On February 8, 2008, Belo Corp. (Belo) contributed all of the stock of its subsidiaries
engaged in the newspaper business and related assets to A. H. Belo (herein referred to as the
Distribution). On February 8, 2008 (the Distribution Date), Belo also distributed, through
a pro rata, tax-free dividend to its shareholders, 0.20 shares of A. H. Belo Series A common
stock for every share of Belo Series A common stock, and 0.20 shares of A. H. Belo Series B
common stock for every share of Belo Series B common stock, owned as of the close of business
on January 25, 2008. As a result of the Distribution, A. H. Belo issued 17,603,499 shares of
Series A common stock and 2,848,496 shares of Series B common stock. This resulted in A. H. Belo becoming a separate public company with its own management and board of directors. The
assets and liabilities transferred to A. H. Belo were recorded at historical cost as a
reorganization of entities under common control. Following the Distribution, Belo does not have
any ownership interest in A. H. Belo but continues to conduct business with A. H. Belo pursuant
to various agreements, as more fully described in Note 8, and co-own certain investments.
 (3)
    
    Accumulated Other Comprehensive Gain/ (Loss) contains the minimum liability related to
other post-employment benefits and deferral of a gain resulting from a negative plan
amendment to The Press-Enterprisepost-employment benefit plan. This negative plan amendment,
which reduces the plan benefits, was made in 2009. The gain is being recognized over
approximately five years, determined by the average life expectancy to age 65 of the plan
participants at the date of the negative plan amendment and at which point the benefits will
end for the remaining plan participants.
 (4)
    
    The following table sets forth the reconciliation between weighted average shares used for
calculating basic and diluted earnings per share for the three and nine months ended September
30, 2010 and 2009.
 8




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Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Earnings (numerator)Net earnings
    
    $
    4,572
    
    
    $
    (5,766
    )
    
    $
    (4,727
    )
    
    $
    (113,543
    )Shares (denominator)Weighted average shares outstanding (basic)
    
    
    21,085
    
    
    
    20,538
    
    
    
    20,935
    
    
    
    20,529Dilutive effect of participating securities
    
    
    1,042
    
    
    
    
    
    
    
    
    
    
    
    Weighted shares outstanding for Basic EPS
    
    
    22,127
    
    
    
    20,538
    
    
    
    20,935
    
    
    
    20,529Dilutive effect of employee stock options
    
    
    264
    
    
    
    
    
    
    
    
    
    
    
    Adjusted weighted average shares outstanding
    
    
    22,391
    
    
    
    20,538
    
    
    
    20,935
    
    
    
    20,529Earnings per share:Basic
    
    $
    0.21
    
    
    $
    (0.28
    )
    
    $
    (0.23
    )
    
    $
    (5.53
    )Diluted
    
    $
    0.20
    
    
    $
    (0.28
    )
    
    $
    (0.23
    )
    
    $
    (5.53
    )
 For the three and nine months ended September 30, 2010 the Company excluded 3,001,038 and
3,262,944 respectively, of stock-based awards, because to include them would be anti-dilutive.
For the three and nine months ended September 30, 2009 the Company excluded 4,067,034
stock-based awards because to include them would be anti-dilutive.
 (5)
    
    Prior to the Distribution, A. H. Belo established a long-term incentive plan under which
awards may be granted to employees and outside directors in the form of non-qualified stock
options, incentive stock options, restricted shares, restricted stock units, performance
shares, performance units and stock appreciation rights. In addition, options may be
accompanied by stock appreciation rights and limited stock appreciation rights. Rights and
limited rights may also be issued without accompanying options. Cash-based bonus awards are
also available under the plan.
 In connection with the Distribution, holders of outstanding Belo options received an adjusted
Belo option for the same number of shares of Belo common stock as held before the Distribution
but with a reduced exercise price based on the closing price on February 8, 2008. Holders also
received one new A. H. Belo option for every five Belo options held as of the Distribution Date
(the distribution ratio) with an exercise price based on the closing share price on February 8,
2008. The Belo restricted stock units (RSUs) were treated as if they were issued and
outstanding shares. Holders of Belo RSUs retained their existing RSUs and also received A. H. Belo RSUs. The number of A. H. Belo RSUs awarded to Belos RSU holders was determined using the
distribution ratio. As a result, the Belo RSUs and the A. H. Belo RSUs, taken together, had the
same aggregate value, based on the closing prices of the Belo stock and the A. H. Belo stock on
the Distribution Date, as the Belo RSUs immediately prior to the Distribution.
 Stock-based compensation cost recognized for awards to A. H. Belos employees and non-employee
directors was $734 and $3,265 for the three and nine months ended September 30, 2010,
respectively, and $1,489 and $2,598 for the three and nine months ended September 30, 2009,
respectively. No compensation cost is recognized related to options issued by A. H. Belo held
by employees and non-employee directors of Belo. Each stock option and RSU (of A. H. Belo and
of Belo) otherwise have the same terms as the original award. The awards continue to vest as
under the existing vesting schedule based on continued employment with Belo or A. H. Belo, as
applicable. Following the Distribution, A. H. Belo and Belo recognize compensation expense for
any pre-Distribution awards related to their respective employees, regardless of which company
ultimately issues the awards.
 A. H. Belo also recognizes compensation expense for any pre-Distribution awards related to its
employees that were issued under Belos long-term incentive plans. A. H. Belos share-based
compensation expense includes $119 and $50 for the three and nine months ended September 30,
2010, respectively, and $1,458 for the three and $2,542 for the nine months ended September 30,
2009, respectively, related to awards that Belo issued.
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A. H. Belo Stock Option Activity
 The following table summarizes the stock option activity under A. H. Belos long-term incentive
plan for the period ended September 30, 2010:
 Number of
    
    
    Weighted AverageStock Options
    
    
    Exercise PriceOutstanding at December 31, 2009
    
    
    3,127,424
    
    
    $
    14.20Granted
    
    
    
    
    
    $
    Exercised
    
    
    (268,548
    )
    
    $
    2.75Canceled
    
    
    (215,989
    )
    
    $
    7.64Outstanding at September 30, 2010
    
    
    2,642,887
    
    
    $
    15.90
 Of the total A. H. Belo options outstanding at September 30, 2010, 1,606,225 options with
a weighted average exercise price of $12.06 are held by A. H. Belo employees and non-employee
directors. The remaining 1,036,662 stock options are held by Belo employees and non-employee
directors.A. H. Belo RSU Activity
 The following table summarizes the RSU activity under A. H. Belos long-term incentive plan for
the nine-month period ended September 30, 2010:
 Number of
    
    
    Weighted Average PriceRSUs
    
    
    on Date of GrantOutstanding at December 31, 2009
    
    
    438,582
    
    
    $
    16.63Granted
    
    
    775,997
    
    
    $
    6.21Vested
    
    
    (121,540
    )
    
    $
    18.28Canceled
    
    
    (59,611
    )
    
    $
    9.39Outstanding at September 30, 2010
    
    
    1,033,428
    
    
    $
    6.38
 Of the total A. H. Belo RSUs outstanding at September 30, 2010, 992,514 RSUs are held by
A. H. Belo employees and non-employee directors. The remaining 40,914 RSUs are held by Belo
employees and non-employee directors.
 (6)
    
    Subsequent to the Distribution, Belo retained sponsorship of The G. B. Dealey Retirement
Pension Plan (Pension Plan) and, jointly with A. H. Belo, oversees the investments of the
Pension Plan. The Pension Plan is a defined benefit plan created in 1943, and its 9,300
participants include current and former employees of the Company and Belo Corp., and their
respective subsidiaries. The Pension Plan was closed to new participants on June 30, 2000
except for certain union employees at The Providence Journal, for whom the Pension Plan was
closed to new participants on July 30, 2004. On March 31, 2007, the Pension Plan was frozen
and employee participants as a whole ceased earning additional benefits under the Plan. At the
time of the freeze, employee participants received an additional five years of service credit
under the Pension Plan and supplemental annual transition payments for five years were
established under a separate plan subject to certain conditions.
 Belo administers, in accordance with the terms of the Pension Plan, benefits for the Belo and
A. H. Belo current and former employees who participate in the Pension Plan. As sponsor of the
Pension Plan, Belo is solely responsible for directly satisfying the funding obligations with
respect to the Pension Plan and retains sole discretion to determine the amount and timing of
any contributions required to satisfy such funding obligations. Belo also retains the right, in
its sole discretion, to terminate the Pension Plan.
 By prior agreement, A. H. Belo is contractually obligated to reimburse Belo for 60 percent of
each contribution Belo makes to the Pension Plan. As discussed in A. H. Belos 2009 Annual
Report on Form 10-K filed with the SEC on April 15, 2010, the Pension Plan was underfunded, as
determined for financial reporting purposes in accordance with the applicable accounting
guidance, as of December 31, 2009, by $196,000, of which 60 percent is $118,000.
 10




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##### Table of Contents



A. H. Belo accounts for its obligations related to the Pension Plan according to the applicable
accounting guidance for multiemployer pensions, under which it recognizes as net pension cost
the required contribution for each period and recognizes as a liability any contribution
obligation due and unpaid. During the three and nine month-periods ended September 30, 2010,
the Company recognized pension expense for payments to Belo of $300 and $8,572, respectively.
During the three and nine month-periods ended September 30, 2009, the Company recognized no
pension expense as no payments were made to Belo during these periods. The payments to Belo in
2010 were made from the A. H. Belo funds held on deposit by Belo Corp. for future pension
contributions.
 During the fourth quarter of 2010, the Company and Belo announced that the Pension Plan would
be split into separately-sponsored plans on or about January 1, 2011. If the plan is not split
into separately sponsored plans, the Company would expect to be required to make significant
future payments to Belo for reimbursements. In accordance with the applicable accounting
guidance, a liability for these expected future payments is not recorded on the balance sheet
as of September 30, 2010.
 On October 6, 2010, the Company and Belo Corp. entered into a Pension Plan Transfer Agreement
(the Transfer Agreement) to split the Pension Plan into separately-sponsored plans effective
on or about January 1, 2011. Under the Transfer Agreement, benefit liabilities and assets
allocable to the approximately 5,100 current and former employees of the Company and its
newspaper businesses will be transferred to two new defined benefit pension plans created,
sponsored and managed by or on behalf of the Company (the AHC Pension Plans). The new AHC
Pension Plans will become solely responsible for paying those benefits. The benefit liabilities
and assets allocable to the current and former employees of Belo Corp. and its television
businesses will continue to be held by the existing Pension Plan sponsored and managed by or on
behalf of Belo Corp. For plan years starting on and after January 1, 2011, the Company and Belo
Corp. shall each be solely responsible for funding requirements to their respective plans. The
split of the Pension Plan will not change the amount of the benefits any participant has
accrued or is currently receiving.
 The Company anticipates reporting a material non-cash charge for the amount of its unfunded
pension obligation, related to its decision to split the Pension Plan, when it reports
financial results for the three-month period ended December 31, 2010.Based on available
actuarial data and assumptions, including information about assets of the Pension Plan, the
Companys share of the unfunded pension obligation was approximately $118,000 at December 31,
2009. Under the AHC Pension Plans, effective on or about January 1, 2011, future pension
expense and cash contributions will be determined by interest rates, discount rates, return on
assets, regulatory requirements, and actuarial gains and losses.
 In its Form 10-K for the year ended December 31, 2009 the Company estimated its cash
reimbursement obligations to Belo Corp. for 2010 and 2011 were $8.6 million and $22.9 million,
respectively. The Company has met its cash pension reimbursement obligation for calendar year
2010. The Company does not anticipate any cash pension reimbursement expense in the fourth
quarter of 2010.
 (7)
    
    On October 24, 2006, 18 former employees of The Dallas Morning Newsfiled a lawsuit against
various A. H. Belo-related parties in the United States District Court for the Northern
District of Texas. The plaintiffs lawsuit mainly consists of claims of unlawful
discrimination and ERISA violations. In June 2007, the court issued a memorandum order
granting in part and denying in part defendants motion to dismiss. In August 2007 and in
March 2009, the court dismissed certain additional claims. A summary judgment motion seeking
dismissal of all remaining claims against the defendants is pending. A trial date is
tentatively planned for March or April 2011. The Company believes the lawsuit is without
merit and is defending vigorously against it.
 On April 13, 2009, four former independent home delivery contractors of The Press-Enterprise
filed a purported class action lawsuit against A. H. Belo Corporation, Belo Corp.,
Press-Enterprise Company, and others in The Superior Court of the State of California,
Riverside County. Plaintiffs allege, on behalf of themselves and those similarly situated,
that they were improperly classified as independent contractors instead of as employees.
Plaintiffs assert that they and members of the purported class were not paid all wages owed,
including minimum wages, hourly wages, and overtime wages; and that Defendants failed to
provide meal periods and rest periods or compensation in lieu thereof, failed to reimburse for
reasonable and necessary business expenses, unlawfully withheld wages due, failed to provide
accurate wage statements, failed to keep accurate payroll records, failed to pay wages timely,
and thus committed unfair business practices. Plaintiffs filed a first amended complaint in
July 2010 that added a claim under the federal Fair Labor Standards Act. The original and
amended complaints seek recovery of allegedly unpaid wages, meal and rest period payments,
penalties, expenses, interest, attorneys fees, and costs. During the second quarter of 2010,
A. H. Belo Corporation and the other parties to the lawsuit reached a preliminary agreement to
settle the lawsuit, subject to Court approval. The Court preliminarily approved the agreement
on September 16, 2010. A hearing seeking final approval of the Court is set for February 25,
2011. The parties have agreed to cooperate and take all steps necessary and appropriate to
obtain final approval of the settlement, to effectuate its terms and to record the satisfaction
of the judgment with the Court. If
 11




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##### Table of Contents



final approval is granted, the maximum payment under the
settlement, if all class members file valid and timely claims, is $2,500. Accordingly, during
the second quarter of 2010, the Company recorded an accrual for this settlement, in other
accrued expenses on the consolidated balance sheet. The corresponding expense is included in
other production, distribution and operating costs in the consolidated statement of operations.
The Company has made $600 in payments, to an escrow account, per the terms of the settlement
agreement, as of September 30, 2010.
 In addition to the proceedings disclosed above, a number of other legal proceedings are pending
against A. H. Belo, including several actions for alleged libel and/or defamation. In the
opinion of management, liabilities, if any, arising from these other legal proceedings would
not have a material adverse effect on A. H. Belos results of operations, liquidity, or
financial condition.
 (8)
    
    In connection with the Distribution, the Company entered into a separation and distribution
agreement; a services agreement; a tax matters agreement; an employee matters agreement and
other agreements with Belo or its subsidiaries. Under the separation and distribution
agreement, effective as of the Distribution Date, A. H. Belo and Belo have agreed to indemnify
each other and certain related parties from certain liabilities existing or arising from acts
and events occurring, or failing to occur (or alleged to have occurred or to have failed to
occur), regarding each others businesses, whether occurring before, at or after the effective
time of the Distribution.
 Under the services agreement A. H. Belo and Belo (or their respective subsidiaries) provide
each other various services and/or support. Payments made or other consideration provided in
connection with all continuing transactions between the Company and Belo are made on an
arms-length basis.
 The tax matters agreement sets out each partys rights and obligations with respect to payment
deficiencies and refunds, if any, of federal, state, local, or foreign taxes for periods before
and after the Distribution and related matters such as the filing of tax returns and the
conduct of IRS and other audits. Under this agreement, Belo is responsible for all income taxes
prior to the Distribution, except that A. H. Belo is responsible for its share of income taxes
paid on a consolidated basis for the period of January 1, 2008 through February 8, 2008. A. H. Belo is solely responsible for its income taxes subsequent to the Distribution Date.
 On September 14, 2009, the Company and Belo entered into the first amendment to the tax matters
agreement. The amendment allowed for the carry-back of A. H. Belos 2008 net operating loss
to Belos pre-Distribution tax returns. In exchange, the Company and Belo agreed that any
tax refund relating to these net operating losses is for the account of A. H. Belo and will be
held by Belo and applied to the Companys share of future contributions to the Pension Plan.
 On September 24, 2009, Belo filed a net operating loss carryback claim for the Companys
2008 net operating loss to a pre-Distribution tax year. The refund claim generated an $11,978
federal income tax refund. Belo received the refund in the fourth quarter of 2009.
Correspondingly, A. H. Belo reversed the associated valuation allowance on its deferred tax
assets related to the net operating losses carried-back by Belo, resulting in an $11,978 tax
benefit for A. H. Belo. During the three and nine months ended September 30, 2010, $300 and
$8,572 respectively, of such funds held by Belo were distributed to Belo in reimbursement of 60
percent of Belos contribution to the Pension Plan during such period.
 (9)
    
    The Company had approximately $696,836 of property, plant and equipment as of September 30,
2010. In addition to the original cost of these assets, their recorded value is determined by
a number of estimates made by the Company, including estimated useful lives. In accordance
with the applicable accounting guidance, the Company records impairment charges on property,
plant and equipment used in operations when events and circumstances indicate that the assets
may be impaired, the undiscounted cash flows estimated to be generated by those assets are
less than the carrying amount of those assets and the net book value of the assets exceeds
their estimated fair value. In making these determinations, the Company uses certain
assumptions, including, but not limited to: (i) the estimated fair value of the assets; and
(ii) the estimated future cash flows expected to be generated by the assets, which estimates
are based on additional assumptions such as asset utilization, length of service and estimated
salvage values.
 In the third quarter of 2010, the Company sold 8.2 acres and a 32,682 square foot building
located in Plano, Texas, adjacent to The Dallas Morning Newsproduction plant where newspapers
are printed (the North Plant). The sale, which closed in July 2010, resulted in a gain of
approximately $1,357 that was recorded as other income in the consolidated statement of
operations. Also in the third quarter of 2010, the Company sold 4.59 acres and a 76,345 square
foot building located in Arlington, Texas. This site was previously used for printing
operations. The sale resulted in the Company recording a gain of approximately $22 that was
recorded as other income in the consolidated statement of operations.
 12




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##### Table of Contents



(10)
    
    Assets held for sale consist of 49.85 acres of land and a 133,390 square foot
warehouse assembly building located in Dallas near Interstate 20 and Interstate 45 (the South
Plant).During 2009, in an additional step to reduce costs, The Dallas Morning Newselected to
consolidate its production facilities and relocated production equipment from the South Plant
to the North Plant. The South Plant was built in 2007 and was used by The Dallas Morning News
for the collating and assembly of the preprint packages included in the Sunday newspaper. The
Company, with the assistance of a third party, estimated the market value of the South Plant
based on market information for comparable properties in the Dallas-Fort Worth area. The
estimated market value was compared to carrying value and, as a result, the Company recorded
$20,000 of impairment expense in the third quarter of 2009, to align the carrying value with
estimated market value, less selling costs. The Company began marketing the South Plant for
sale during the third quarter of 2009. There have been no changes in the status of the
property since December 31, 2009.Assets held for sale consist of the following:
 September 30, 2010
    
    
    December 31, 2009Land
    
    $
    1,067
    
    
    $
    1,067Building and improvements
    
    
    4,201
    
    
    
    4,201Total assets held for sale
    
    $
    5,268
    
    
    $
    5,268
 (11)
    
    The following table sets forth the Companys goodwill. During the nine months ended
September 30, 2009, the Company recorded a goodwill impairment charge at The Providence
Journalof approximately $80,940. After recording the goodwill impairment charge, no goodwill
remained related to The Providence Journal.
 The Dallas
    
    
    The Providence
    
    
    The Press-Total Goodwill
    
    
    Morning News
    
    
    Journal
    
    
    EnterpriseGross goodwill balance as of January 1, 2009
    
    $
    526,248
    
    
    $
    26,076
    
    
    $
    370,155
    
    
    $
    130,017Accumulated amortization
    
    
    (62,157
    )
    
    
    (1,494
    )
    
    
    (46,421
    )
    
    
    (14,242
    )Accumulated impairment
    
    
    (358,569
    )
    
    
    
    
    
    
    (242,794
    )
    
    
    (115,775
    )Impairment recorded in 2009
    
    
    (80,940
    )
    
    
    
    
    
    
    (80,940
    )
    
    
    Net goodwill balance at December 31, 2009
    
    $
    24,582
    
    
    $
    24,582
    
    
    $
    
    
    
    $
    Gross goodwill balance as of January 1, 2010
    
    
    526,248
    
    
    
    26,076
    
    
    
    370,155
    
    
    
    130,017Accumulated amortization
    
    
    (62,157
    )
    
    
    (1,494
    )
    
    
    (46,421
    )
    
    
    (14,242
    )Accumulated impairment
    
    
    (439,509
    )
    
    
    
    
    
    
    (323,734
    )
    
    
    (115,775
    )Net goodwill balance at September 30, 2010
    
    $
    24,582
    
    
    $
    24,582
    
    
    $
    
    
    
    $
    
 The following table sets forth the Companys identifiable intangible assets, consisting of
subscriber lists that are subject to amortization:
 Total Subscriber
    
    
    The Dallas
    
    
    The Providence
    
    
    The Press-Lists
    
    
    Morning News
    
    
    Journal
    
    
    EnterpriseGross balance at December 31, 2009
    
    $
    114,824
    
    
    $
    22,896
    
    
    $
    78,698
    
    
    $
    13,230Accumulated amortization
    
    
    (87,397
    )
    
    
    (22,896
    )
    
    
    (56,109
    )
    
    
    (8,392
    )Net balance at December 31, 2009
    
    $
    27,427
    
    
    $
    
    
    
    $
    22,589
    
    
    $
    4,838Gross balance at December 31, 2009
    
    $
    114,824
    
    
    $
    22,896
    
    
    $
    78,698
    
    
    $
    13,230Accumulated amortization at September 30, 2010
    
    
    (91,326
    )
    
    
    (22,896
    )
    
    
    (59,388
    )
    
    
    (9,042
    )Net balance at September 30, 2010
    
    $
    23,498
    
    
    $
    
    
    
    $
    19,310
    
    
    $
    4,188
 13




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##### Table of Contents



(12)
    
    On December 3, 2009, the Company entered into the Second Amendment (Second Amendment)
to the Amended and Restated Credit Agreement (the Amended and Restated Credit Agreement as so
amended, the Credit Agreement). Among other matters, the Second Amendment to the Credit
Agreement extended the maturity date of the credit facility from April 30, 2011 to September
30, 2012, reduced the total commitment amount from $50,000 to $25,000, and released the lien
on certain real property securing the facility. The amended facility remains subject to a
borrowing base. If borrowing capacity under the Credit Facility becomes less than $17,500,
then a fixed charge coverage ratio covenant of 1:1 will apply. The Second Amendment also makes
certain minor administrative amendments to the Amended and Restated Pledge and Security
Agreement dated as of January 30, 2009. The decrease in the Companys revolving credit
facility from $50,000 to $25,000 was a decision made by management. Management concluded that
based on estimated future borrowing needs, the cost of the revolving credit facility, and
borrowing base availability, $25,000 was sufficient to meet the Companys borrowing needs.
The borrowing base is calculated using eligible accounts receivable and inventory, as defined
in the Credit Agreement. A decrease in the borrowing base could potentially limit the
Companys borrowing capacity. At September 30, 2010, the Company had eligible collateral to
secure the Credit Agreement of $33,321, resulting in a borrowing base of $25,000. When
letters of credit and other required reserves are deducted from the borrowing base, the
Company had $19,147 of borrowing capacity available under the credit facility. At December
31, 2009, the Company had eligible collateral to secure the Credit Agreement of $44,202,
resulting in a borrowing base of $25,000. When letters of credit and other required reserves
were deducted from the borrowing base, the Company had $18,871 of borrowing capacity available
under the Credit Agreement as of December 31, 2009.At September 30, 2010 and December 31, 2009, the Company had no borrowings under the Credit
Agreement.
 (13)
    
    Management has determined that the fair value of the Companys financial instruments, which
include cash and cash equivalents, accounts receivable, accounts payable and notes payable,
approximate their carrying values as of September 30, 2010 and December 31, 2009 primarily due
to the short-term nature, and/or the variable interest rates associated with such instruments.
The fair value of assets held for sale, based on current market values, also approximate
their carrying values as of September 30, 2010.
 (14)
    
    In connection with the Distribution and after an assessment of their respective downtown
Dallas real estate needs, A. H. Belo and Belo Corp. agreed to co-own, through the creation of
a limited liability company (LLC), The Belo Building, (a seventeen story office building in
downtown Dallas), related parking sites, and other real estate. A. H. Belo and Belo each own
50 percent of the LLC and each lease from the LLC 50 percent of the available rental space in
The Belo Building and related parking sites under long-term leases. These leases are
terminable under various conditions. A third party real estate services firm, engaged by the
LLC, manages The Belo Building and other real estate owned by the LLC. The Company accounts
for this investment using the equity method. Although some of the real estate owned by the
LLC is currently being marketed for sale, management considers all of the investments
long-term in nature. The ability to readily convert these investments into cash is limited.In addition, A. H. Belo and Belo, through their subsidiaries, jointly own 6.6 percent of
Classified Ventures, LLC, (Classified Ventures) a joint venture in which the other owners are
Gannett Co., Inc., The McClatchy Company, Tribune Company, and The Washington Post Company. The
three principal online businesses Classified Ventures operates are cars.com, apartments.com,
and homegain.com. Effective January 1, 2010, the Company started accounting for its investment
in Classified Ventures using the equity method and recorded $582 and $1,560 in earnings for the
three and nine month periods ended September 30, 2010, respectively.In addition to the LLC and Classified Ventures, A. H. Belo has invested in other startup
companies related to the news and information industry. Details of the investment amounts are
in the table below:
 September 30, 2010
    
    
    December 31, 2009LLC owning The Belo Building
    
    $
    16,021
    
    
    $
    16,344Other equity method investments
    
    
    5,269
    
    
    
    2,984Cost method investments
    
    
    857
    
    
    
    1,986Total investments
    
    $
    22,147
    
    
    $
    21,314
 During the nine months ended September 30, 2010, the Companys proportionate share of net
income from one investee in the table above was greater than 10% of A. H. Belos consolidated
net income before taxes. Summarized income statement information for this company for the
first nine months of 2010 follows (unaudited):
 Nine months endedSeptember 30, 20102010Revenue
    
    $
    246,321Gross profit
    
    
    217,044Net income
    
    
    46,635
 14




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##### Table of Contents



(15)
    
    Income taxes are recorded using the liability method in accordance with applicable accounting
guidance. The provision for income taxes reflects the Companys estimate of the effective rate
expected to be applicable for the full fiscal year, adjusted by any discrete events, which are
reported in the period in which they occur. This estimate is re-evaluated each quarter based
on the Companys estimated tax expense for the year.
 The Company recognized income tax expense of approximately $621 and $2,760 for the three months
and nine months ended September 30, 2010, respectively. The Company recognized an income tax
benefit of approximately $11,110 and $11,331 for the three months and nine months ended
September 30, 2009, respectively. The tax expense for the three and nine months ended
September 30, 2010 is primarily attributable to tax expense incurred related to the Texas
margin tax and Rhode Island state income tax and changes in the valuation allowance.The Company currently projects taxable income for the year 2010 for federal and state income
tax purposes, which potentially could be carried back and offset by prior year net operating
losses. Net operating losses can be carried forward to offset future taxable income. The
Companys net operating loss carryforwards begin to expire in the years 2029 and 2030 if not
used.The applicable accounting guidance places a threshold for recognition of deferred tax assets
including net operating loss carryforwards. Based on such criteria, the Company established a
valuation allowance against the deferred tax assets in certain jurisdictions in March of 2009,
as it was more likely than not the benefit resulting from these deferred tax assets would not
be realized. The factors used to assess the likelihood of realization of the deferred tax
assets include reversal of future deferred tax liabilities, available tax planning strategies,
and future taxable income. Any reversal relating to the valuation allowance will be recorded as
a reduction of income tax expense. The quarters change in deferred tax assets is partially
offset by a corresponding decrease in the valuation allowance of approximately $3,133 for the
three months ended September 30, 2010.
 (16)
    
    The total number of authorized shares of common stock is 125,000,000 shares. The Company has
two series of common stock outstanding, Series A and Series B, each with a par value of $0.01
per share. The Series A and Series B shares are identical except as noted herein. Series B
shares are entitled to 10 votes per share on all matters submitted to a vote of shareholders,
while the Series A shares are entitled to one vote per share. Series B shares are convertible
at any time on a one-for-one basis into Series A shares but Series A shares are not
convertible into Series B shares. Shares of the Companys Series A common stock are traded on
the New York Stock Exchange (NYSE symbol: AHC). There is no established public trading market
for shares of Series B common stock. Transferability of the Series B shares is limited to
family members and affiliated entities of the holder. Upon any other type of transfer, the
Series B shares automatically convert into Series A shares.
 (17)
    
    During the fourth quarter of 2010 the Company and Belo announced that the Pension Plan would
be split into separately-sponsored plans on or about January 1, 2011. See Note 6 for
additional information regarding the Pension Plan split.
 15




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
(dollars in thousands, except per share amounts)
 The following information should be read in conjunction with the Companys Condensed Consolidated
Financial Statements and related Notes filed as part of this report.
 Overview
 The Dallas Morning News, The Providence Journal The
Press-Enterprise
  Results of Operations
 (Dollars in thousands, except per share amounts)
 Condensed Consolidated Results of Operations
 Three months ended September 30,
    
    
    Nine months ended September 30,Percentage
    
    
    
    
    
    
    
    
    
    
    Percentage2010
    
    
    Change
    
    
    2009
    
    
    2010
    
    
    Change
    
    
    2009Net operating revenues
    
    $
    119,132
    
    
    
    (6.1
    )%
    
    $
    126,867
    
    
    $
    356,462
    
    
    
    (6.9
    )%
    
    $
    382,865Operating costs and expenses
    
    
    115,545
    
    
    
    (19.6
    )%
    
    
    143,772
    
    
    
    365,622
    
    
    
    (27.9
    )%
    
    
    507,299Other income (expense)
    
    
    1,606
    
    
    
    5,437.9
    %
    
    
    29
    
    
    
    7,193
    
    
    
    1,734.8
    %
    
    
    (440
    )Income (loss) before income taxes
    
    
    5,193
    
    
    
    130.8
    %
    
    
    (16,876
    )
    
    
    (1,967
    )
    
    
    (98.4
    )%
    
    
    (124,874
    )Income tax expense (benefit)
    
    
    621
    
    
    
    105.6
    %
    
    
    (11,110
    )
    
    
    2,760
    
    
    
    124.4
    %
    
    
    (11,331
    )Net income (loss)
    
    $
    4,572
    
    
    
    179.3
    %
    
    $
    (5,766
    )
    
    $
    (4,727
    )
    
    
    (95.8
    )%
    
    $
    (113,543
    )
  Revenues
 Three months ended September 30,
    
    
    Nine months ended September 30,Percentage
    
    
    
    
    
    
    
    
    
    
    Percentage2010
    
    
    Change
    
    
    2009
    
    
    2010
    
    
    Change
    
    
    2009Advertising
    
    $
    74,388
    
    
    
    (11.2
    )%
    
    $
    83,816
    
    
    $
    223,578
    
    
    
    (14.2
    )%
    
    $
    260,638Circulation
    
    
    34,927
    
    
    
    (0.9
    )%
    
    
    35,228
    
    
    
    105,970
    
    
    
    5.8
    %
    
    
    100,208Other
    
    
    9,817
    
    
    
    25.5
    %
    
    
    7,823
    
    
    
    26,914
    
    
    
    22.2
    %
    
    
    22,019Net operating revenues
    
    $
    119,132
    
    
    
    (6.1
    )%
    
    $
    126,867
    
    
    $
    356,462
    
    
    
    (6.9
    )%
    
    $
    382,865
 16




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##### Table of Contents



The Dallas Morning News, The
Press-Enterprise The Providence Journal The Dallas Morning
News The
Press-Enterprise The Providence Journal
 The Dallas Morning News The Providence Journal The Press-Enterprise.
  Operating Costs and Expenses
 Three months ended September 30,
    
    
    Nine months ended September 30,Percentage
    
    
    
    
    
    
    
    
    
    
    Percentage2010
    
    
    Change
    
    
    2009
    
    
    2010
    
    
    Change
    
    
    2009Salaries, wages and employee benefits
    
    $
    49,322
    
    
    
    (4.5
    )%
    
    $
    51,668
    
    
    $
    162,394
    
    
    
    (2.3
    )%
    
    $
    166,283Other production, distribution and operating costs
    
    
    43,280
    
    
    
    (11.5
    )%
    
    
    48,920
    
    
    
    136,341
    
    
    
    (12.4
    )%
    
    
    155,652Newsprint, ink and other supplies
    
    
    13,280
    
    
    
    7.9
    %
    
    
    12,302
    
    
    
    36,994
    
    
    
    (23.5
    )%
    
    
    48,345Asset impairment
    
    
    857
    
    
    
    (95.7
    )%
    
    
    20,000
    
    
    
    862
    
    
    
    (99.2
    )%
    
    
    102,689Depreciation
    
    
    7,496
    
    
    
    (19.0
    )%
    
    
    9,257
    
    
    
    25,101
    
    
    
    (14.8
    )%
    
    
    29,456Amortization
    
    
    1,310
    
    
    
    (19.4
    )%
    
    
    1,625
    
    
    
    3,930
    
    
    
    (19.4
    )%
    
    
    4,874Total operating costs and expenses
    
    $
    115,545
    
    
    
    (19.6
    )
    
    $
    143,772
    
    
    $
    365,622
    
    
    
    (27.9
    )
    
    $
    507,299
  17




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##### Table of Contents



The Dallas Morning News
 The Dallas Morning
News
 Interest Expense
  Other Income, Net
 The Dallas Morning News
 Income Taxes
   18




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##### Table of Contents



Liquidity and Capital Resources
 Operating Cash Flows
    Investing Cash Flows
  Financing Cash Flows
   19




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##### Table of Contents



Forward-Looking Statements
   
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4T. Controls and Procedures
     
    
    Preparing more robust documentation over the Companys analysis and conclusions over the
Companys critical accounting policies;
    
    Preparing more detailed analyses of conclusions reached in (a) the selection of new
accounting policies and (b) the accounting for significant non-routine transactions.
    
    Enhancing management review controls over conclusions reached with regard to
documentation of critical accounting policies, selection of new policies and accounting for
significant non-routine transactions.
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##### Table of Contents



PART II.
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Removed and Reserved
 
 Item 5. Other Information
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##### Table of Contents



Item 6. Exhibits
  Exhibit Number
    
    Description2.1
    
    *
    
    Separation and Distribution Agreement by and between Belo Corp. and A. H. Belo Corporation dated as of
February 8, 2008 (Exhibit 2.1 to the Companys Current Report on Form 8-K filed with the Securities and
Exchange Commission on February 12, 2008 (Securities and Exchange Commission File No. 001-33741) (the February
12, 2008 Form 8-K))3.1
    
    *
    
    Amended and Restated Certificate of Incorporation of the Company (Exhibit 3.1 to Amendment No. 3 to the
Companys Form 10 dated January 18, 2008 (Securities and Exchange Commission File No. 001-33741) (the Third
Amendment to Form 10))3.2
    
    *
    
    Certificate of Designations of Series A Junior Participating Preferred Stock of the Company dated January 11,
2008 (Exhibit 3.2 to Post-Effective Amendment No. 1 to Form 10 dated January 31, 2008 (Securities and Exchange
Commission File No. 001-33741))3.3
    
    *
    
    Amended and Restated Bylaws of the Company, effective January 11, 2008 (Exhibit 3.3 to the Third Amendment to
Form 10)4.1
    
    
    
    Certain rights of the holders of the Companys Common Stock are set forth in Exhibits 3.1-3.3 above4.2
    
    *
    
    Specimen Form of Certificate representing shares of the Companys Series A Common Stock (Exhibit 4.2 to the
Third Amendment to Form 10)4.3
    
    *
    
    Specimen Form of Certificate representing shares of the Companys Series B Common Stock (Exhibit 4.3 to the
Third Amendment to Form 10)4.4
    
    *
    
    Rights Agreement dated as of January 11, 2008 between the Company and Mellon Investor Services LLC (Exhibit
4.4 to the Third Amendment to Form 10)10.1
    
    
    
    Financing agreements:(1)* Credit Agreement dated as of February 4, 2008 among the Company, as Borrower, JPMorgan Chase, N.A., as
Administrative Agent, JPMorgan Securities Inc. and Banc of America Securities LLC, as Joint Lead Arrangers and
Bookrunners, Bank of America, N.A., as Syndication Agent, SunTrust Bank and Capitol One Bank, N.A. as
Co-Documentation Agents (Exhibit 99.1 to the Companys Current Report on Form 8-K filed with the Securities and
Exchange Commission on February 5, 2008 (Securities and Exchange Commission File No. 001-33741))(2)* First Amendment and Waiver to the Credit Agreement dated as of October 23, 2008 (Exhibit 10.1 to the
Companys Current Report on Form 8-K filed with the Securities and Exchange Commission on October 24, 2008
(Securities and Exchange Commission File No. 001-33741))(3)* Amended and Restated Credit Agreement dated as of January 30, 2009, (Exhibit 10.1 to the Companys Current
Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 2009 (Securities and
Exchange Commission File No. 001-33741) (the February 2, 2009 Form 8-K))(4)* Amended and Restated Pledge and Security Agreement dated as of January 30, 2009 (Exhibit 10.2 to the
February 2, 2009 From 8-K)(5)* First Amendment to the Amended and Restated Credit Agreement dated as of August 18, 2009 (Exhibit 10.1(5)
to the Companys Quarterly Report on Form 10-Q file with the Securities and Exchange Commission on December 13,
2009 (Securities and Exchange Commission File No. 001-33741))(6)* Second Amendment to the Amended and Restated Credit Agreement dated as of December 3, 2009, 2009 (Exhibit
10.1 to the Companys Current Report on Form 8-K filed with the Securities and Exchange Commission on December
4, 2009 (Securities and Exchange Commission File No. 001-33741))(7) Third Amendment to the Amended and Restated Credit Agreement dated as of August 18, 2010.
 22




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##### Table of Contents



Exhibit Number
    
    Description10.2
    
    
    
    Compensatory plans and Arrangements:~ (1)*
    
    A. H. Belo Corporation Savings Plan (Exhibit 10.4 to the February 12, 2008 Form 8-K)* (a)
    
    First Amendment to the A. H. Belo Savings Plan dated September 23, 2008 (Exhibit 10.2(1)(A) to the
Companys Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 14, 2008
(Securities and Exchange Commission File No. 001-33741))*(b)
    
    Second Amendment to the A. H. Belo Savings Plan effective March 27, 2009 (Exhibit 10.1 to the Companys
Current Report on From 8-K filed with the Securities and Exchange Commission on April 2, 2009 (Securities and
Exchange Commission File No. 001-33741) (the April 2, 2009
Form 8-K))*(c)
    
    Third Amendment to the A. H. Belo Savings Plan effective March 31, 2009 (Exhibit 10.2 to the April 2, 2009
Form 8-K)*(d)
    
    Fourth Amendment to the A. H. Belo Savings Plan dated September 10, 2009,
(Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the Securities and Exchange
Commission on September 10, 2009 (Securities and Exchange Commission File No. 001-33741))~ (2)*
    
    A. H. Belo Corporation 2008 Incentive Compensation Plan (Exhibit 10.5 to the February 12, 2008 Form 8-K)* (a)
    
    First Amendment to A. H. Belo 2008 Incentive Compensation Plan effective July 23, 2008 (Exhibit
10.2(2)(A) to the Companys Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on
August 14, 2008 (Securities and Exchange Commission File No. 001-33741))*(b)
    
    Form of A. H. Belo 2008 Incentive Compensation Plan Non-Employee Director Evidence of Grant
(for Non-Employee Director Awards) (Exhibit 10.2.2(b) to the Companys Quarterly Report on Form
10-Q filed with the Securities and Exchange Commission on May 13, 2010 (Securities and Exchange
Commission File No. 001-33741) (the 1st Quarter 2010 Form 10-Q))*(c)
    
    Form of A. H. Belo 2008 Incentive Compensation Plan Evidence of Grant (for Employee Awards)
(Exhibit 10.2.2(c) to the 1st Quarter 2010 Form 10-Q)~ (3)*
    
    A. H. Belo Pension Transition Supplement Restoration Plan effective January 1, 2008 (Exhibit 10.6 to the
February 12, 2008 Form 8-K)*(a)
    
    First Amendment to the A. H. Belo Pension Transition Supplement Restoration Plan dated March 31, 2009
(Exhibit 10.4 to the April 2, 2009 From 8-K)~ (4)*
    
    A. H. Belo Corporation Change In Control Severance Plan (Exhibit 10.7 to the February 12, 2008 Form 8-K)* (a)
    
    Amendment to the A. H. Belo Change in Control Severance Plan dated March 31, 2009 (Exhibit 10.3 to the
April 2, 2009 Form 8-K)~ (5)*
    
    John C. McKeon Retention and Relocation Agreement effective September 22, 2010 (Exhibit 10.1 to the
Companys Current Report on Form 8-K filed with the Securities and Exchange Commission on September 28, 2010
(Securities and Exchange Commission File No. 001-33741))
 10.3
    
    Agreements relating to the Distribution of A. H. Belo:(1)*
    
    Tax Matters Agreement by and between Belo Corp. and A. H. Belo Corporation dated as of February 8, 2008
(Exhibit 10.1 to the February 12, 2008 Form 8-K)* (a)
    
    First Amendment to Tax Matters Agreement by and between Belo Corp. and A. H. Belo
Corporation dated September 14, 2009 (Exhibit 10.1 to the Companys Current Report on Form
 23




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##### Table of Contents



Exhibit Number
    
    Description8-K filed with the Securities and Exchange Commission on September 15, 2009 (Securities and
Exchange Commission file No. 00-00371))(2)*
    
    Employee Matters Agreement by and between Belo Corp. and A. H. Belo Corporation dated as of February 8,
2008 (Exhibit 10.2 to the February 12, 2008 Form 8-K)* (a)
    
    Amendment to Employee Matters Agreement as set forth in the Pension Plan Transfer
Agreement dated as of October 6, 2010 (Exhibit 10.1 to the October 8, 2010 Form 8-K)(3)*
    
    Services Agreement by and between Belo Corp. and A. H. Belo Corporation dated as of February 8, 2008
(Exhibit 10.3 to the February 12, 2008 Form 8-K)(4)*
    
    Separation and Distribution Agreement by and between Belo Corp. and A. H. Belo Corporation dated as of
February 8, 2008 (See Exhibit 2.1 to the February 12, 2008 Form 8-K)(5)*
    
    Pension Plan Transfer Agreement by and between Belo Corp. and A. H. Belo Corporation dated as of October
6, 2010 (Exhibit 10.1 to the Companys Report on Form 8-K filed with the Securities and Exchange Commission on
October 8, 2010 (Securities and Exchange Commission File No. 001-33741) (the October 8, 2010 Form 8-K))31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 24




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##### Table of Contents



SIGNATURES
  A. H. BELO CORPORATIONNovember 3, 2010
    By:
    /s/ Alison K. EngelAlison K. EngelSenior Vice President/Chief Financial Officer and
Treasurer (Principal Financial Officer)November 3, 2010
    By:
    /s/ Michael N. LaveyMichael N. LaveyVice President/Corporate Controller
(Principal Accounting Officer) EXHIBIT INDEX
 Exhibit Number
    
    Description10.1(7)
    
    Third Amendment to Amended and Restated Credit Agreement31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 25