DALLAS – A.H. Belo Corp. (NYSE: AHC), the parent of The Providence Journal Co., has amended its existing line of credit, to give the company more flexibility in coping with “the current combination of cyclical and secular pressures, including the nation’s economic downturn,” Chairman, President and CEO Robert W. Decherd said in a statement today. The company also has frozen salaries, effective Nov. 1, and intends to begin selling some real estate holdings next year he added in a letter to shareholders.

"We are pleased with the added financial flexibility provided in this amendment – although at a higher cost – because it provides room for us to make the best strategic and operational decisions to maximize long-term shareholder value and uphold our brand equity,” Decherd said.

The amendments shrink the line of credit by 50 percent, paring the lenders’ total commitment to $50 million, from the previous $100 million; give “a security interest in the company’s accounts receivable and inventory” to the bank group providing the line of credit; set the interest rate at 250 basis points above the London Interbank Offer Rate (LIBOR); waive the fixed-charge-ratio covenant through Jan. 31; and restrict the payment of dividends during that period.

The dividend restriction “does not apply to the dividend declared Sept. 24, to be paid on Nov. 10,” A.H. Belo noted. The company’s credit agreement and amendment – already filed with the U.S. Securities and Exchange Commission (SEC) – are available online at www.sec.gov, along with A.H. Belo’s full financial report for the second quarter of this year, when the company posted a loss of $3.2 million. (READ MORE)

Dechard said today that “the board of directors and management committee are using all available alternatives to improve A.H. Belo’s financial position.”

Besides freezing salaries – and cutting its work force by 13 percent, as previously announced, to save $30 million per year (READ MORE) – those efforts include plans to suspend profit-related contributions to workers’ 401(k) accounts, effective Jan. 1; reduce director fees by 20 percent, at the next annual meeting; and reduce capital expenditures to $18 million or less in 2009 and 2010, he added in his letter to shareholders today. “Many other industries have frozen or reduced wages in response to our country’s economic turmoil,” the CEO said.

In addition, Dechard wrote, “We’ve selected CB Richard Ellis – a prominent national real estate firm – to recommend options for monetizing AHC real estate in Dallas and Providence that is unrelated to daily operations or can be included in a strategic plan to modify where daily operations take place.

“This will be a longer process than other initiatives we’ve undertaken, but should result in some property sales in 2009,” he said.

“The board and management committee are steering carefully between changing long-standing operating protocols and ensuring AHC’s continued ability to achieve and maintain competitive advantage in its markets,” Dechard said. “Accomplishing this balance is the best course to profitability, the restoration of shareholder value, and the perpetuation of distinctive journalism at A. H. Belo’s newspapers and Web sites that serve our fellow citizens.”

A.H. Belo Corp. (NYSE: AHC) – formerly the newspaper group of Belo Corp. (NYSE: BLC) – owns and operates The Providence Journal, The Dallas Morning News and The Press-Enterprise of Riverside, Calif., as well as a variety of specialty publications for the youth and Hispanic markets; the Web sites associated with its publications; and direct-mail and commercial printing businesses. For more information, including the text of Decherd’s letter to shareholders, visit www.AHBelo.com.