-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QPo9dsdLwJ1LznvGmSQIPD73i062CtLQKhvEm+RddlzJ4+tqbWzkZE6fjZxOCurF GmwmFeDcSk4Bq8/Ibrkq/g== 0000039899-00-000001.txt : 20000216 0000039899-00-000001.hdr.sgml : 20000216 ACCESSION NUMBER: 0000039899-00-000001 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000215 ITEM INFORMATION: FILED AS OF DATE: 20000215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GANNETT CO INC /DE/ CENTRAL INDEX KEY: 0000039899 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 160442930 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-06961 FILM NUMBER: 545542 BUSINESS ADDRESS: STREET 1: 1100 WILSON BLVD CITY: ARLINGTON STATE: VA ZIP: 22234 BUSINESS PHONE: 7032846000 MAIL ADDRESS: STREET 1: 1100 WILSON BLVD 28TH FLOOR CITY: ARLINGTON STATE: VA ZIP: 22234 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: February 15, 2000 GANNETT CO., INC. (Exact name of registrant as specified in its charter) Delaware 1-6961 16-0442930 (State or other (Commission (IRS Employer jurisdiction File Number) Identification No.) of incorporation) 1100 Wilson Boulevard, Arlington, Virginia 22234 (Address of principal executive offices)(Zip Code) (703) 284-6000 (Registrant's telephone number, including area code) ITEM 2. DISPOSITION OF ASSETS Pursuant to an Asset Purchase Agreement dated July 22, 1999 between Multimedia Cablevision, Inc. and Cox Communications, Inc., on January 31, 2000 Gannett Co., Inc. sold substantially all of the assets of its cable division for approximately $2.7 billion in cash. Upon closing, an after-tax gain of approximately $740 million was recognized which, along with the cable and security segment operating results, will be reported as discontinued operations in the company's financial statements. The company has used the proceeds from this transaction to pay down its commercial paper borrowings. Included in this filing is pro forma financial information for 1999 and 1998 as detailed in Exhibit 99-1. EARNINGS SUMMARY OF INCOME FROM CONTINUING AND DISCONTINUED OPERATIONS After giving effect to the discontinued operations reporting discussed above, the company's earnings, excluding nonrecurring net non-operating gains principally from the sales/exchanges of various businesses in 1999 and 1998, are as follows. Unaudited, in thousands of dollars (except per share amounts) Earnings summary Excluding net non-operating gains Fifty-two weeks ended Dec. 26, 1999 Dec. 27, 1998 Dec. 28, 1997 ------------- ------------- ------------- Operating income $ 1,563,101 $ 1,385,814 $ 1,262,242 Non-operating income (expense) Interest expense (94,619) (79,412) (91,725) Other 4,175 (1,204) (15,564) ------------- ------------- ------------- Total (90,444) (80,616) (107,289) Income before income taxes 1,472,657 1,305,198 1,154,953 Provision for income taxes 586,050 522,380 473,600 ------------- ------------- ------------- Income from continuing operations 886,607 782,818 681,353 Discontinued operations: Income from the operation of discontinued operations, net of tax 38,541 33,488 31,326 ------------- ------------- ------------- Net income $ 925,148 $ 816,306 $ 712,679 ============= ============= ============= Earnings per share - basic Earnings from continuing operations $3.18 $2.76 $2.41 Earnings from discontinued operations: Discontinued operations, net of tax $0.14 $0.12 $0.11 ----- ----- ----- Net income per share - basic $3.32 $2.88 $2.52 ===== ===== ===== Earnings per share - diluted Earnings from continuing operations $3.15 $2.74 $2.39 Earnings from discontinued operations: Discontinued operations, net of tax $0.14 $0.12 $0.11 ----- ----- ----- Net income per share - diluted $3.29 $2.86 $2.50 ===== ===== ===== Unaudited, in thousands of dollars (except per share amounts) Earnings summary Excluding net non-operating gains Thirteen weeks ended % Inc March 28, 1999 March 29, 1998 (Dec) Operating income $ 296,592 $ 274,327 8.1 Non-operating income (expense) Interest expense (16,592) (23,229) (28.6) Other 2,368 829 185.6 ----------- ----------- ------ Total (14,224) (22,400) (36.5) Income before income taxes 282,368 251,927 12.1 Provision for income taxes 112,400 100,800 11.5 ----------- ----------- ------ Income from continuing operations 169,968 151,127 12.5 Discontinued operations: Income from the operation of discontinued operations, net of tax 8,925 8,116 10.0 ----------- ----------- ------ Net income $ 178,893 $ 159,243 12.3 =========== =========== ====== Earnings per share - basic Earnings from continuing operations $0.61 $0.53 15.1 Earnings from discontinued operations: Discontinued operations, net of tax $0.03 $0.03 -- ----- ----- ---- Net income per share - basic $0.64 $0.56 14.3 ===== ===== ==== Earnings per share - diluted Earnings from continuing operations $0.61 $0.53 15.1 Earnings from discontinued operations: Discontinued operations, net of tax $0.03 $0.03 -- ----- ----- ---- Net income per share - diluted $0.64 $0.56 14.3 ===== ===== ==== Unaudited, in thousands of dollars (except per share amounts) Earnings summary Excluding net non-operating gains Thirteen weeks ended % Inc June 27, 1999 June 28, 1998 (Dec) Operating income $ 403,111 $ 375,296 7.4 Non-operating income (expense) Interest expense (13,852) (20,348) (31.9) Other 775 2,498 (69.0) ----------- ----------- ------ Total (13,077) (17,850) (26.7) Income before income taxes 390,034 357,446 9.1 Provision for income taxes 155,200 143,100 8.5 ----------- ----------- ------ Income from continuing operations 234,834 214,346 9.6 Discontinued operations: Income from the operation of discontinued operations, net of tax 9,356 8,463 10.6 ----------- ----------- ------ Net income $ 244,190 $ 222,809 9.6 =========== =========== ====== Earnings per share - basic Earnings from continuing operations $0.84 $0.75 12.0 Earnings from discontinued operations: Discontinued operations, net of tax $0.03 $0.03 -- ----- ----- ---- Net income per share - basic $0.87 $0.78 11.5 ===== ===== ==== Earnings per share - diluted Earnings from continuing operations $0.84 $0.75 12.0 Earnings from discontinued operations: Discontinued operations, net of tax $0.03 $0.03 -- ----- ----- ---- Net income per share - diluted $0.87 $0.78 11.5 ===== ===== ==== Unaudited, in thousands of dollars (except per share amounts) Earnings summary Excluding net non-operating gains Thirteen weeks ended % Inc Sept. 26, 1999 Sept. 27, 1998 (Dec) Operating income $ 353,366 $ 298,783 18.3 Non-operating income (expense) Interest expense (26,474) (17,190) 54.0 Other 1,588 (877) (281.1) ----------- ------------ ------- Total (24,886) (18,067) 37.7 Income before income taxes 328,480 280,716 17.0 Provision for income taxes 130,700 112,250 16.4 ----------- ------------ ------- Income from continuing operations 197,780 168,466 17.4 Discontinued operations: Income from the operation of discontinued operations, net of tax 9,699 8,053 20.4 ----------- ------------ ------- Net income $ 207,479 $ 176,519 17.5 =========== ============ ======= Earnings per share - basic Earnings from continuing operations $0.70 $0.59 18.6 Earnings from discontinued operations Discontinued operations, net of tax $0.04 $0.03 33.3 ----- ----- ---- Net income per share - basic $0.74 $0.62 19.4 ===== ===== ==== Earnings per share - diluted Earnings from continuing operations $0.70 $0.59 18.6 Earnings from discontinued operations Discontinued operations, net of tax $0.04 $0.03 33.3 ----- ----- ---- Net income per share - diluted $0.74 $0.62 19.4 ===== ===== ==== Unaudited, in thousands of dollars (except per share amounts) Earnings Summary Excluding net non-operating gains Thirteen weeks ended % Inc Dec. 26, 1999 Dec. 27, 1998 (Dec) Operating income $ 510,032 $ 437,408 16.6 Non-operating income (expense) Interest expense (37,701) (18,645) 102.2 Other (556) (3,654) (84.8) ----------- ----------- ------ Total (38,257) (22,299) 71.6 Income before income taxes 471,775 415,109 13.7 Provision for income taxes 187,750 166,230 12.9 ----------- ----------- ------ Income from continuing operations 284,025 248,879 14.1 Discontinued operations: Income from the operation of discontinued operations, net of tax 10,561 8,856 19.3 ----------- ----------- ------ Net income $ 294,586 $ 257,735 14.3 =========== =========== ====== Earnings per share - basic Earnings from continuing operations $1.02 $0.89 14.8 Earnings from discontinued operations: Discontinued operations, net of tax $0.04 $0.03 19.9 ----- ----- ------ Net income per share - basic $1.06 $0.92 14.9 ===== ===== ====== Earnings per share - diluted Earnings from continuing operations $1.01 $0.89 14.7 Earnings from discontinued operations: Discontinued operations, net of tax $0.04 $0.03 19.8 ----- ----- ------ Net income per share - diluted $1.05 $0.92 14.8 ===== ===== ====== The earnings summaries above exclude the following: - The second quarter of 1999 net pre-tax gain of $55 million ($33 million after-tax or $0.11 per share-basic and $0.11 per share-diluted) principally from the exchange of KVUE-TV in Austin, Texas for KXTV-TV in Sacramento, California. - The first quarter of 1998 net pre-tax gain of $306.5 million ($184 million after-tax or $0.65 per share-basic and $0.64 per share diluted) principally from the disposition of the company's five remaining radio stations and its alarm security business. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS See exhibit index for list of exhibits. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GANNETT CO., INC. Dated: February 15, 2000 By: /s/George R. Gavagan ------------------------- George R. Gavagan Vice President and Controller EXHIBIT INDEX Exhibit Number Title or Description - ------- ---------------------- 99-1 Unaudited pro forma condensed balance sheet as of December 26, 1999 and the unaudited pro forma condensed combined statements of income for the years ended December 26, 1999 and December 27, 1998 and the quarters ended March 28, 1999 and March 29, 1998; June 27, 1999 and June 28, 1998; September 26, 1999 and September 27, 1998; December 26, 1999 and December 27, 1998. EX-99.1 2 PRO FORMA FINANCIALS Exhibit 99-1 UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION The following unaudited pro forma condensed combined financial statements give effect to the exchange of approximately $2.7 billion in cash by Cox Communications, Inc. for substantially all of Gannett Co., Inc.'s cable business. The unaudited pro forma condensed combined balance sheet presents the financial position of Gannett as of December 26, 1999, assuming that the sale had occurred as of that date. Such pro forma information is based on the historical balance sheet of the company at December 26, 1999. The unaudited pro forma condensed combined statements of income reflect the historical results of continuing operations for Gannett for the periods presented. As required by Rule 11-02 of Regulation S-X, the unaudited pro forma condensed combined statements of income have been prepared assuming that the sale occurred as of the beginning of the period presented. The 1999 and 1998 statements also include the pro forma effect of the company's 1999 acquisition of Newsquest plc, as discussed in the company's 8-K filings dated October 5, 1999 and December 7, 1999. The unaudited pro forma financial statements give effect to certain pro forma adjustments which are described in the notes to these statements. The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations or financial position which would have been achieved had this transaction been completed as of the date indicated, nor is it necessarily indicative of Gannett's future results of operations or financial position. The unaudited pro forma condensed combined financial statements should be read in conjunction with the historical financial statements of the company, including the related notes thereto. Gannett Co., Inc. Unaudited Pro Forma Condensed Balance Sheet December 26, 1999 (in thousands)
Sale of Cable Pro Forma Pro Forma Gannett Business Adjustments Balance Sheet ASSETS Current assets Cash and marketable securities $ 46,160 $ 46,160 Accounts receivable, net 881,435 (54,835) 826,600 Inventories 95,014 (10) 95,004 Prepaid expenses and other current assets 52,613 (17,605) 35,008 ----------- ------------ ------------ ----------- Total current assets 1,075,222 (72,450) 1,002,772 Property, plant and equipment, net 2,223,852 (345,150) 1,878,702 Excess of acquisition cost over the value of assets acquired, net 5,398,227 (704,678) 4,693,549 Other assets 309,145 (4,577) 304,568 ----------- ------------ ------------ ----------- Total assets $9,006,446 $(1,126,855) $7,879,591 =========== ============ ============ =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and current portion of film contracts payable $ 348,589 $ (4,764) $ 343,825 Accrued expenses and other current liabilities 399,339 (32,453) 366,886 Dividends payable 58,297 58,297 Income taxes 77,553 77,553 ----------- ------------ ------------ ----------- Total current liabilities 883,778 (37,217) 846,561 Deferred income taxes 479,547 (102,100) 377,447 Long-term debt, less current portion 2,463,250 (1,727,742) (1) 735,508 Postretirement medical and life insurance liabilities 304,400 304,400 Other long-term liabilities 245,825 245,825 Total shareholders' equity 4,629,646 (987,538) 1,727,742 5,369,850 ----------- ------------ ------------ ----------- Total liabilities and shareholders' equity $9,006,446 $(1,126,855) $7,879,591 =========== ============ ============ =========== See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Information.
Gannett Co., Inc. and subsidiaries Unaudited Pro Forma Condensed Combined Statement of Income Fifty-two weeks ended December 26, 1999 Unaudited, in thousands of dollars (except per share amounts)
Pro Forma Newsquest Pro Forma Statement Gannett Pro Forma Subtotal Adjustments of Income Net operating revenues Newspaper advertising $ 3,292,894 $ 249,707 $ 3,542,601 $ 3,542,601 Newspaper circulation 1,022,520 33,930 1,056,450 1,056,450 Broadcasting 728,642 728,642 728,642 All other 216,134 7,619 223,753 223,753 ------------ ----------- ------------ ----------- ------------ Total 5,260,190 291,256 5,551,446 5,551,446 Operating expenses Cost of sales and operating expenses, exclusive of depreciation 2,608,469 142,391 2,750,860 2,750,860 Selling, general and administrative expenses, exclusive of depreciation 808,529 52,665 861,194 861,194 Depreciation 169,460 11,181 180,641 180,641 Amortization of intangible assets 110,631 23,010 133,641 133,641 ------------ ----------- ------------ ----------- ------------ Total 3,697,089 229,247 3,926,336 3,926,336 ------------ ----------- ------------ ----------- ------------ Operating income 1,563,101 62,009 1,625,110 1,625,110 Non-operating income (expense) Interest expense (94,619) (45,367) (139,986) 89,408 (1) (50,578) Other 58,705 (634) 58,071 58,071 ------------ ----------- ------------ ----------- ------------ Total (35,914) (46,001) (81,915) 89,408 7,493 Income before income taxes 1,527,187 16,008 1,543,195 89,408 1,632,603 Provision for income taxes 607,800 6,475 614,275 33,974 (2) 648,249 ------------ ----------- ------------ ----------- ------------ Income from continuing operations $ 919,387 $ 9,533 $ 928,920 $ 55,434 $ 984,354 ============ =========== ============ =========== ============ Earnings per share from continuing operations - basic $ 3.29 $ 3.53 ====== ====== Earnings per share from continuing operations - diluted $ 3.26 $ 3.50 ====== ====== See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Information.
Gannett Co., Inc. and subsidiaries Unaudited Pro Forma Condensed Combined Statement of Income Fifty-two weeks ended December 27, 1998 (in thousands of dollars, except per share amounts)
Pro Forma Newsquest Pro Forma Statement Gannett Pro Forma Subtotal Adjustments of Income Net operating revenues Newspaper advertising $ 2,942,995 $ 433,886 $ 3,376,881 $ 3,376,881 Newspaper circulation 1,010,238 62,310 1,072,548 1,072,548 Broadcasting 721,298 721,298 721,298 All other 206,160 10,592 216,752 216,752 ------------ ----------- ------------ ----------- ------------ Total 4,880,691 506,788 5,387,479 5,387,479 Operating expenses Cost of sales and operating expenses, exclusive of depreciation 2,498,876 229,123 2,727,999 2,727,999 Selling, general and administrative expenses, exclusive of depreciation 742,538 126,124 868,662 868,662 Depreciation 163,776 19,042 182,818 182,818 Amortization of intangible assets 89,687 42,052 131,739 131,739 ------------ ----------- ------------ ----------- ------------ Total 3,494,877 416,341 3,911,218 3,911,218 ------------ ----------- ------------ ----------- ------------ Operating income 1,385,814 90,447 1,476,261 1,476,261 Non-operating income (expense) Interest (expense) income, net (60,094) (101,073) (161,167) 94,568 (1) (66,599) Other 286,005 286,005 286,005 ------------ ----------- ------------ ----------- ------------ Total 225,911 (101,073) 124,838 94,568 219,406 Income before income taxes 1,611,725 (10,626) 1,601,099 94,568 1,695,667 Provision for income taxes 645,300 (4,500) 640,800 35,936 (2) 676,736 ------------ ----------- ------------ ----------- ------------ Income from continuing operations $ 966,425 $ (6,126) $ 960,299 $ 58,632 $ 1,018,931 ============ =========== ============ =========== ============ Earnings per share from continuing operations - basic $ 3.41 $ 3.60 ====== ====== Earnings per share from continuing operations - diluted $ 3.38 $ 3.57 ====== ====== See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Information.
Gannett Co., Inc. and subsidiaries Unaudited Pro Forma Condensed Combined Statement of Income Thirteen weeks ended March 28, 1999 Unaudited, in thousands of dollars (except per share amounts)
Pro Forma Newsquest Pro Forma Statement Gannett Pro Forma Subtotal Adjustments of Income Net operating revenues Newspaper advertising $ 720,551 $ 113,852 $ 834,403 $ 834,403 Newspaper circulation 253,357 15,513 268,870 268,870 Broadcasting 161,194 161,194 161,194 All other 50,837 3,088 53,925 53,925 ------------ ----------- ------------ ----------- ------------ Total 1,185,939 132,453 1,318,392 1,318,392 Operating expenses Cost of sales and operating expenses, exclusive of depreciation 635,732 63,815 699,547 699,547 Selling, general and administrative expenses, exclusive of depreciation 187,986 23,603 211,589 211,589 Depreciation 42,715 4,933 47,648 47,648 Amortization of intangible assets 22,914 10,315 33,229 33,229 ------------ ----------- ------------ ----------- ------------ Total 889,347 102,666 992,013 992,013 ------------ ----------- ------------ ----------- ------------ Operating income 296,592 29,787 326,379 326,379 Non-operating income (expense) Interest (expense) income (16,592) (20,337) (36,929) 20,633 (1) (16,296) Other 2,368 (317) 2,051 2,051 ------------ ----------- ------------ ----------- ------------ Total (14,224) (20,654) (34,878) 20,633 (14,245) Income before income taxes 282,368 9,133 291,501 20,633 312,134 Provision for income taxes 112,400 3,582 115,982 7,840 (2) 123,822 ------------ ----------- ------------ ----------- ------------ Income from continuing operations $ 169,968 $ 5,551 $ 175,519 $ 12,793 $ 188,312 ============ =========== ============ =========== ============ Earnings per share from continuing operations - basic $ 0.61 $ 0.67 ====== ====== Earnings per share from continuing operations - diluted $ 0.61 $ 0.67 ====== ====== See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Information.
Gannett Co., Inc. and subsidiaries Unaudited Pro Forma Condensed Combined Statement of Income Thirteen weeks ended June 27, 1999 Unaudited, in thousands of dollars (except per share amounts)
Pro Forma Newsquest Pro Forma Statement Gannett Pro Forma Subtotal Adjustments of Income Net operating revenues Newspaper advertising $ 788,274 $ 111,400 $ 899,674 $ 899,674 Newspaper circulation 248,812 15,043 263,855 263,855 Broadcasting 194,480 194,480 194,480 All other 48,052 3,646 51,698 51,698 ------------ ----------- ------------ ----------- ------------ Total 1,279,618 130,089 1,409,707 1,409,707 Operating expenses Cost of sales and operating expenses, exclusive of depreciation 620,682 63,660 684,342 684,342 Selling, general and administrative expenses, exclusive of depreciation 190,525 23,545 214,070 214,070 Depreciation 42,130 5,038 47,168 47,168 Amortization of intangible assets 23,170 10,315 33,485 33,485 ------------ ----------- ------------ ----------- ------------ Total 876,507 102,558 979,065 979,065 ------------ ----------- ------------ ----------- ------------ Operating income 403,111 27,531 430,642 430,642 Non-operating income (expense) Interest (expense) income (13,852) (20,337) (34,189) 20,633 (1) (13,556) Other 55,305 (317) 54,988 54,988 ------------ ----------- ------------ ----------- ------------ Total 41,453 (20,654) 20,799 20,633 41,432 Income before income taxes 444,564 6,877 451,441 20,633 472,074 Provision for income taxes 176,950 2,894 179,844 7,840 (2) 187,684 ------------ ----------- ------------ ----------- ------------ Income from continuing operations $ 267,614 $ 3,983 $ 271,597 $ 12,793 $ 284,390 ============ =========== ============ =========== ============ Earnings per share from continuing operations - basic $ 0.96 $ 1.02 ====== ====== Earnings per share from continuing operations - diluted $ 0.95 $ 1.01 ====== ====== See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Information.
Gannett Co., Inc. and subsidiaries Unaudited Pro Forma Condensed Combined Statement of Income Thirteen weeks ended September 26, 1999 Unaudited, in thousands of dollars (except per share amounts)
Pro Forma Newsquest Pro Forma Statement Gannett Pro Forma Subtotal Adjustments of Income Net operating revenues Newspaper advertising $ 817,844 $ 24,455 $ 842,299 $ 842,299 Newspaper circulation 255,754 3,374 259,128 259,128 Broadcasting 166,770 166,770 166,770 All other 53,193 885 54,078 54,078 ------------ ----------- ------------ ----------- ------------ Total 1,293,561 28,714 1,322,275 1,322,275 Operating expenses Cost of sales and operating expenses, exclusive of depreciation 659,654 14,916 674,570 674,570 Selling, general and administrative expenses, exclusive of depreciation 205,716 5,517 211,233 211,233 Depreciation 44,325 1,210 45,535 45,535 Amortization of intangible assets 30,500 2,380 32,880 32,880 ------------ ----------- ------------ ----------- ------------ Total 940,195 24,023 964,218 964,218 ------------ ----------- ------------ ----------- ------------ Operating income 353,366 4,691 358,057 358,057 Non-operating income (expense) Interest (expense) income (26,474) (4,693) (31,167) 24,071 (1) (7,096) Other 1,588 1,588 1,588 ------------ ----------- ------------ ----------- ------------ Total (24,886) (4,693) (29,579) 24,071 (5,508) Income before income taxes 328,480 (2) 328,478 24,071 352,549 Provision for income taxes 130,700 (1) 130,699 9,147 (2) 139,846 ------------ ----------- ------------ ----------- ------------ Income from continuing operations $ 197,780 $ (1) $ 197,779 $ 14,924 $ 212,703 ============ =========== ============ =========== ============ Earnings per share from continuing operations - basic $ 0.70 $ 0.76 ====== ====== Earnings per share from continuing operations - diluted $ 0.70 $ 0.75 ====== ====== See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Information.
Gannett Co., Inc. and subsidiaries Unaudited Pro Forma Condensed Combined Statement of Income Thirteen weeks ended December 26, 1999 Unaudited, in thousands of dollars (except per share amounts)
Pro Forma Pro Forma Statement Gannett Adjustments of Income Net operating revenues Newspaper advertising $ 966,225 $ 966,225 Newspaper circulation 264,597 264,597 Broadcasting 206,198 206,198 All other 64,052 64,052 ------------ ------------ ----------- Total 1,501,072 1,501,072 Operating expenses Cost of sales and operating expenses, exclusive of depreciation 692,401 692,401 Selling, general and administrative expenses, exclusive of depreciation 224,302 224,302 Depreciation 40,290 40,290 Amortization of intangible assets 34,047 34,047 ------------ ------------ ----------- Total 991,040 991,040 ------------ ------------ ----------- Operating income 510,032 510,032 Non-operating income (expense) Interest expense (37,701) 24,071 (1) (13,630) Other (556) (556) ------------ ------------ ----------- Total (38,257) 24,071 (14,186) Income before income taxes 471,775 24,071 495,846 Provision for income taxes 187,750 9,147 (2) 196,897 ------------ ------------ ----------- Income from continuing operations $ 284,025 $ 14,924 $ 298,949 ============ ============ =========== Earnings per share from continuing operations - basic $ 1.02 $ 1.08 ====== ====== Earnings per share from continuing operations - diluted $ 1.01 $ 1.07 ====== ====== See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Information.
Gannett Co., Inc. and subsidiaries Unaudited Pro Forma Condensed Combined Statement of Income Thirteen weeks ended March 29, 1998 (in thousands of dollars, except per share amounts)
Pro Forma Newsquest Pro Forma Statement Gannett Pro Forma Subtotal Adjustments of Income Net operating revenues Newspaper advertising $ 669,994 $ 111,812 $ 781,806 $ 781,806 Newspaper circulation 254,079 16,634 270,713 270,713 Broadcasting 160,692 160,692 160,692 All other 51,083 2,612 53,695 53,695 ------------ ----------- ------------ ----------- ------------ Total 1,135,848 131,058 1,266,906 1,266,906 Operating expenses Cost of sales and operating expenses, exclusive of depreciation 617,556 58,665 676,221 676,221 Selling, general and administrative expenses, exclusive of depreciation 180,638 32,043 212,681 212,681 Depreciation 41,596 4,955 46,551 46,551 Amortization of intangible assets 21,731 10,513 32,244 32,244 ------------ ----------- ------------ ----------- ------------ Total 861,521 106,176 967,697 967,697 ------------ ----------- ------------ ----------- ------------ Operating income 274,327 24,882 299,209 299,209 Non-operating income (expense) Interest (expense) income, net (18,772) (25,268) (44,040) 23,642 (1) (20,398) Other 302,899 302,899 302,899 ------------ ----------- ------------ ----------- ------------ Total 284,127 (25,268) 258,859 23,642 282,501 Income before income taxes 558,454 (386) 558,068 23,642 581,710 Provision for income taxes 223,720 (164) 223,556 8,984 (2) 232,540 ------------ ----------- ------------ ----------- ------------ Income from continuing operations $ 334,734 $ (222) $ 334,512 $ 14,658 $ 349,170 ============ =========== ============ =========== ============ Earnings per share from continuing operations - basic $ 1.18 $ 1.23 ====== ====== Earnings per share from continuing operations - diluted $ 1.17 $ 1.22 ====== ====== See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Information.
Gannett Co., Inc. and subsidiaries Unaudited Pro Forma Condensed Combined Statement of Income Thirteen weeks ended June 28, 1998 (in thousands of dollars, except per share amounts)
Pro Forma Newsquest Pro Forma Statement Gannett Pro Forma Subtotal Adjustments of Income Net operating revenues Newspaper advertising $ 746,675 $ 110,404 $ 857,079 $ 857,079 Newspaper circulation 252,762 15,371 268,133 268,133 Broadcasting 198,799 198,799 198,799 All other 48,673 2,420 51,093 51,093 ------------ ----------- ------------ ----------- ------------ Total 1,246,909 128,195 1,375,104 1,375,104 Operating expenses Cost of sales and operating expenses, exclusive of depreciation 624,414 55,466 679,880 679,880 Selling, general and administrative expenses, exclusive of depreciation 183,826 30,860 214,686 214,686 Depreciation 41,640 4,883 46,523 46,523 Amortization of intangible assets 21,733 10,513 32,246 32,246 ------------ ----------- ------------ ----------- ------------ Total 871,613 101,722 973,335 973,335 ------------ ----------- ------------ ----------- ------------ Operating income 375,296 26,473 401,769 401,769 Non-operating income (expense) Interest (expense) income, net (16,265) (25,268) (41,533) 23,642 (1) (17,891) Other (1,585) (1,585) (1,585) ------------ ----------- ------------ ----------- ------------ Total (17,850) (25,268) (43,118) 23,642 (19,476) Income before income taxes 357,446 1,205 358,651 23,642 382,293 Provision for income taxes 143,100 512 143,612 8,984 (2) 152,596 ------------ ----------- ------------ ----------- ------------ Income from continuing operations $ 214,346 $ 693 $ 215,039 $ 14,658 $ 229,697 ============ =========== ============ =========== ============ Earnings per share from continuing operations - basic $ 0.75 $ 0.81 ====== ====== Earnings per share from continuing operations - diluted $ 0.75 $ 0.80 ====== ====== See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Information.
Gannett Co., Inc. and subsidiaries Unaudited Pro Forma Condensed Combined Statement of Income Thirteen weeks ended September 27, 1998 (in thousands of dollars, except per share amounts)
Pro Forma Newsquest Pro Forma Statement Gannett Pro Forma Subtotal Adjustments of Income Net operating revenues Newspaper advertising $ 707,347 $ 111,477 $ 818,824 $ 818,824 Newspaper circulation 251,534 15,141 266,675 266,675 Broadcasting 159,125 159,125 159,125 All other 49,825 2,681 52,506 52,506 ------------ ----------- ------------ ----------- ------------ Total 1,167,831 129,299 1,297,130 1,297,130 Operating expenses Cost of sales and operating expenses, exclusive of depreciation 625,258 58,120 683,378 683,378 Selling, general and administrative expenses, exclusive of depreciation 180,548 31,841 212,389 212,389 Depreciation 40,760 4,483 45,243 45,243 Amortization of intangible assets 22,482 10,513 32,995 32,995 ------------ ----------- ------------ ----------- ------------ Total 869,048 104,957 974,005 974,005 ------------ ----------- ------------ ----------- ------------ Operating income 298,783 24,342 323,125 323,125 Non-operating income (expense) Interest (expense) income, net (11,228) (25,268) (36,496) 23,642 (1) (12,854) Other (6,839) (6,839) (6,839) ------------ ----------- ------------ ----------- ------------ Total (18,067) (25,268) (43,335) 23,642 (19,693) Income before income taxes 280,716 (926) 279,790 23,642 303,432 Provision for income taxes 112,250 (393) 111,857 8,984 (2) 120,841 ------------ ----------- ------------ ----------- ------------ Income from continuing operations $ 168,466 $ (533) $ 167,933 $ 14,658 $ 182,591 ============ =========== ============ =========== ============ Earnings per share from continuing operations - basic $ 0.59 $ 0.64 ====== ====== Earnings per share from continuing operations $ 0.59 $ 0.64 ====== ====== See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Information.
Gannett Co., Inc. and subsidiaries Unaudited Pro Forma Condensed Combined Statement of Income Thirteen weeks ended December 27, 1998 (in thousands of dollars, except per share amounts)
Pro Forma Newsquest Pro Forma Statement Gannett Pro Forma Subtotal Adjustments of Income Net operating revenues Newspaper advertising $ 818,979 $ 100,193 $ 919,172 $ 919,172 Newspaper circulation 251,863 15,164 267,027 267,027 Broadcasting 202,682 202,682 202,682 All other 56,579 2,879 59,458 59,458 ------------ ----------- ------------ ----------- ------------ Total 1,330,103 118,236 1,448,339 1,448,339 Operating expenses Cost of sales and operating expenses, exclusive of depreciation 631,648 56,872 688,520 688,520 Selling, general and administrative expenses, exclusive of depreciation 197,526 31,380 228,906 228,906 Depreciation 39,780 4,721 44,501 44,501 Amortization of intangible assets 23,741 10,513 34,254 34,254 ------------ ----------- ------------ ----------- ------------ Total 892,695 103,486 996,181 996,181 ------------ ----------- ------------ ----------- ------------ Operating income 437,408 14,750 452,158 452,158 Non-operating income (expense) Interest (expense) income, net (13,829) (25,269) (39,098) 23,642 (1) (15,456) Other (8,470) (8,470) (8,470) ------------ ----------- ------------ ----------- ------------ Total (22,299) (25,269) (47,568) 23,642 (23,926) Income before income taxes 415,109 (10,519) 404,590 23,642 428,232 Provision for income taxes 166,230 (4,455) 161,775 8,984 (2) 170,759 ------------ ----------- ------------ ----------- ------------ Income from continuing operations $ 248,879 $ (6,064) $ 242,815 $ 14,658 $ 257,473 ============ =========== ============ =========== ============ Earnings per share from continuing operations - basic $ 0.89 $ 0.92 ====== ====== Earnings per share from continuing operations - diluted $ 0.89 $ 0.91 ====== ====== See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Information.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION Note 1 - Basis of Presentation The unaudited pro forma balance sheet has been prepared to reflect the sale of the company's cable business for an aggregate price of approximately $2.7 billion in cash. After-tax proceeds from the sale are approximately $1.7 billion. The unaudited pro forma balance sheet presents the financial position of the company as of December 26, 1999 assuming that the transaction occurred as of that date. Such pro forma information is based on the historical balance sheet of Gannett as of December 26, 1999 adjusted for the effects of the sale. The unaudited pro forma condensed combined statements of income reflect the historical results of continuing operations for Gannett for the periods presented. As required by Rule 11-02 of Regulation S-X, the unaudited pro forma condensed combined statements of income have been prepared assuming that the sale occurred as of the period presented. The 1999 and 1998 pro forma statements of income also include the pro forma effect of the company's 1999 acquisition of Newsquest, as discussed in Note 4. The company believes that the assumptions used in preparing the unaudited pro forma financial statements provide a reasonable basis for presenting all of the significant effects of the sale and that the pro forma adjustments give effect to those assumptions in the unaudited pro forma condensed combined financial statements. Note 2 - Pro Forma Adjustments A. Pro forma adjustments to the unaudited condensed balance sheet are made to reflect the following: (1) Adjustment to reflect the pay down of long-term debt from the after-tax proceeds of the sale. The proceeds are reduced by the tax on the estimated gain on sale of the business, using a combined federal and state tax rate of 39%, net of deferred taxes. B. Pro forma adjustments to the unaudited condensed combined statements of income are made to reflect the following: (1) Reduction in interest expense due to pay down of long-term debt from the after-tax proceeds of the sale. The rate used to calculate the reduction in interest expense is based on the weighted average rate paid by Gannett for commercial paper during the relevant period. (2) Record income tax effect of pro forma adjustments described in item 1, using a combined federal and state tax rate of 38%, which differs from the tax rate discussed above due to characteristics of the cable division sale. Note 3 - Pro Forma Adjustments for 1997 If the cable business had been sold at the beginning of the company's 1997 fiscal year, the pro forma interest expense reduction adjustment would be $94.6 million, along with a pro forma income tax increase adjustment of $35.9 million. In 1997, income from continuing operations and diluted earnings per share from continuing operations were $681 million and $2.39, respectively. On a pro forma basis, taking into account the adjustments described above, income from continuing operations and diluted earnings per share from continuing operations for 1997 would have been $740 million and $2.59, respectively. Note 4 - Other On July 26, 1999, the company completed the acquisition of Newsquest plc ("Newsquest"). The amounts in the Newsquest pro forma column reflect the estimated results of operations of the company and its subsidiaries as though the Newsquest acquisition was made at the beginning of the period presented along with the related costs of financing the acquisition and the additional amortization expense associated with the purchase. Refer to the company's 8-K filings dated October 5, 1999 and December 7, 1999 for additional information regarding this acquisition. -----END PRIVACY-ENHANCED MESSAGE-----