SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 28, 1997 or _ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _______ to _________ Commission file number 1-6961 GANNETT CO., INC. (Exact name of registrant as specified in its charter) Delaware 16-0442930 (state or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1100 Wilson Boulevard, Arlington, Virginia 22234 (Address of principal executive offices) (Zip Code) (703) 284-6000 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No __ The number of shares outstanding of the issuer's Common Stock, Par Value $1.00, as of September 28, 1997, was 141,838,379. Restated for the Company's two-for-one stock split that became effective on October 6, 1997, the number of shares outstanding of the issuer's Common Stock, Par Value $1.00, as of September 28, 1997, was 283,676,758.
PART I. FINANCIAL INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS OPERATING SUMMARY Operating income for the third quarter of 1997 rose $51.7 million or 22% to a total of $284.7 million. Newspaper publishing earnings were up $58.0 million or 36% for the quarter, reflecting strong advertising demand, a 15% reduction in newsprint expense, continued strong USA TODAY operating results and a favorable comparison year to year at The Detroit News. Broadcasting earnings declined $4.2 million or 6%, reflecting the absence of Summer Olympics related advertising which buoyed results in the third quarter of 1996. Operating income for the Company's cable and security businesses rose $.8 million or 7% for the quarter. Operating income for the first nine months of 1997 rose $197.0 million or 28% and totaled $903.0 million. NEWSPAPERS Newspaper publishing revenues rose $62.2 million or 7% in the third quarter of 1997, which included a $47.2 million or 8% gain in advertising revenues. Newspaper publishing revenues were up $160.2 million or 6% for the year-to-date, including advertising gains of $135.2 million or 8%. The tables below provide, on a pro forma basis, further details of newspaper ad revenue and linage and preprint distribution for the third quarter and year-to-date periods of 1997 and 1996: Advertising revenue, in thousands of dollars (pro forma) Third Quarter 1997 1996 % Change Local $ 199,487 $ 189,682 5 National 112,622 103,543 9 Classified 233,427 213,345 9 ------- ------- -- Total Run-of-Press 545,536 506,570 8 Preprint and other advertising 89,848 85,407 5 ------- ------- -- Total ad revenue $ 635,384 $ 591,977 7 ======= ======= ==
Advertising linage, in thousands of inches (pro forma) Third Quarter 1997 1996 % Change Local 7,982 7,554 6 National 634 538 18 Classified 9,852 9,146 8 ------ ----- -- Total Run-of-Press linage 18,468 17,238 7 ====== ====== == Preprint distribution 1,507 1,470 3 Advertising revenue, in thousands of dollars (pro forma) Year-to-date 1997 1996 % Change Local $ 606,549 $ 574,749 6 National 346,912 315,102 10 Classified 679,120 616,384 10 --------- --------- -- Total Run-of-Press 1,632,581 1,506,235 8 Preprint and other advertising 268,449 258,912 4 --------- --------- -- Total ad revenue $1,901,030 $1,765,147 8 ========= ========= == Advertising linage, in thousands of inches (pro forma) Year-to-date 1997 1996 % Change Local 24,070 22,681 6 National 1,937 1,679 15 Classified 28,550 26,568 7 ------ ------ -- Total Run-of-Press linage 54,557 50,928 7 ====== ====== == Preprint distribution 4,560 4,434 3 In the pro forma presentation above, total advertising revenues for the Company's newspapers rose 7% for the quarter and 8% for the year-to-date. Local ad revenues increased 5% for the quarter and 6% for the first nine months. National ad revenues rose 9% for the quarter and 10% year-to-date, reflecting significant gains by USA TODAY and USA WEEKEND. Classified advertising revenues increased 9% for the quarter and 10% for the year-to-date, reflecting gains in all categories, particularly in employment. Reported newspaper circulation revenues rose 3% for the quarter and 2% for the first nine months. Net paid daily circulation for the Company's local newspapers was down 1% for the quarter and for the nine-month period, while Sunday circulation also declined 1% for the quarter and for the nine-month period. USA TODAY reported an average daily paid circulation of 2,169,860 in the ABC Publisher's statement for the 26 weeks ended September 28, 1997, which, subject to audit, is a 2% increase over the comparable period a year ago. Operating costs in total for the newspaper segment were up $4.2 million or 1% for the quarter and were down $18.6 million or 1% for the first nine months due primarily to lower newsprint prices. Newsprint expense declined 15% for the quarter and 23% year-to-date with consumption up 7% for the quarter and year-to-date. If current pricing trends continue, newsprint expense for the fourth quarter may be up slightly compared to the fourth quarter of 1996. Newspaper operating income increased $58.0 million or 36% for the quarter and $178.7 million or 35% for the year-to- date, reflecting continued strong advertising gains throughout the group, lower newsprint prices, strong operating results at USA TODAY and USA WEEKEND and a favorable comparison year to year at The Detroit News. In April 1997, the Company sold The Observer in Moultrie, Georgia. In May 1997, the Company's commercial printing division, Gannett Offset, acquired Printed Media Companies, a full-service heat set printer based in Minneapolis, Minnesota. In August 1997, the Company acquired Army Times Publishing Company, located in Springfield, Virginia, which publishes six weekly newspapers and one monthly publication. These transactions did not materially affect newspaper operating results for the quarter or year-to-date period. In October 1997, the Company acquired New Jersey Press, Inc., which publishes the daily Asbury Park Press and Home News & Tribune of East Brunswick, and operates In Jersey, an Internet service. The Asbury Park Press, founded in 1879, has a daily circulation of approximately 160,000 and 230,000 on Sunday. The Home News & Tribune has a daily circulation of approximately 81,000 and 87,000 on Sunday. This transaction was completed after the close of the third quarter and will be recorded under the purchase method of accounting in the fourth quarter. It will not materially affect newspaper operating results. BROADCASTING Broadcast revenues declined $14.0 million or 8% for the third quarter, reflecting the absence of Summer Olympics related advertising which buoyed results in the third quarter of 1996. For the first nine months, broadcast revenues increased $7.9 million or 2%. Operating costs were down $9.8 million or 9% for the quarter and were down $10.1 million or 4% for the year-to-date. Pro forma broadcasting revenues declined 5% for the quarter and increased 3% for the first nine months. Pro forma local television ad revenues declined 4% for the quarter and grew 5% for the year-to-date, while pro forma national revenues declined 9% for the quarter and were flat for the first nine months. Pro forma radio revenues were up 15% for the quarter and 18% for the first nine months. Reported broadcast operating income declined $4.2 million or 6% for the quarter and increased $18.0 million or 9% for the first nine months. Third quarter earnings comparisons were adversely affected, particularly at the Company's NBC affiliates, by the absence of Summer Olympics related advertising that boosted revenues in the third quarter of 1996. Continued high demand for TV and radio advertising, coupled with cost controls, resulted in stronger earnings at most of the company's other broadcasting stations for the quarter and the first nine months. In January 1997, the Company concluded the transaction with Argyle Television, Inc. to exchange WLWT-TV (NBC- Cincinnati) and KOCO-TV (ABC-Oklahoma City) for WZZM-TV (ABC-Grand Rapids/Kalamazoo/Battle Creek) and WGRZ-TV (NBC- Buffalo). This exchange, which was necessary to comply with Federal Communication Commission (FCC) cross-ownership rules, was accounted for as a non-monetary transaction under which no gain or loss was recognized. This exchange did not materially affect broadcast operating results for the quarter or year-to-date period. In April 1997, the Company announced that it had entered into an agreement to sell its remaining radio stations, WGCI-AM/FM, Chicago, KHKS-FM, Dallas and KKBQ-AM/FM, Houston, to Evergreen Media. The transaction is expected to close later this year or in early 1998. In May 1997, the Company acquired KNAZ-TV (Flagstaff, AZ) and KMOH-TV (Kingman, AZ). With the completion of this transaction, Gannett Broadcasting includes 18 television stations reaching 15.7 percent of the U.S. television homes. This transaction did not materially affect broadcast operating results for the quarter or year-to-date period. In October 1997, the Company announced that it had entered into an agreement to purchase WCSH-TV, the NBC television affiliate in Portland, Maine, and WLBZ-TV, the NBC television affiliate in Bangor, Maine. The transaction is subject to Federal Communications Commission and other approvals. Closing is expected to occur near the end of 1997. Upon completion of this transaction, Gannett Broadcasting will consist of 20 television stations reaching 16.2 percent of U.S. television homes. This transaction will not materially affect broadcast operating results. CABLE AND SECURITY Cable television and alarm security operating revenues rose $5.2 million or 9% for the quarter and $16.7 million or 10% for the year-to-date, while operating expenses rose $4.4 million or 9% for the quarter and increased $12.5 million or 9% for the first nine months. Operating income from cable and security rose $.8 million or 7% for the quarter and $4.2 million or 12% for the year-to-date. Cable revenues increased 9% for the quarter and for the year-to-date as the number of basic cable subscribers at quarter end increased 3% and the number of pay subscribers decreased 1%. Alarm security revenue rose 10% for the quarter and 13% for the year-to-date as the number of alarm security subscribers at quarter end increased 13%. NON-OPERATING INCOME AND EXPENSE Interest expense decreased $10.7 million or 31% for the quarter and $38.2 million or 34% for the year-to-date, reflecting the pay down of commercial paper borrowings from operating cash flow and the proceeds from the sale of the outdoor and entertainment businesses in the second half of 1996. PROVISION FOR INCOME TAXES The Company's effective income tax rate was 41.3% for the quarter and for the year-to-date versus 43% for the comparable periods in 1996. The decrease in the effective tax rate reflects the diminished impact of the amortization of non-deductible intangible assets given expected earnings gains in 1997. INCOME FROM CONTINUING OPERATIONS AND NET INCOME On August 19, 1997, the Company's Board of Directors approved a two-for-one stock split effective on October 6, 1997, for shareholders of record on September 12, 1997. In this Form 10-Q, all share and per-common-share amounts have been adjusted to reflect the stock split and $162.2 million was transferred from retained earnings to common stock to reflect the par value of additional shares issued. Income from continuing operations rose $41.3 million or 37% and totaled $152.5 million for the quarter and rose $147.4 million or 44% and totaled $482.3 million for the year-to- date. Earnings per share from continuing operations for the quarter rose to $0.54 from $0.39, an increase of 39%. Earnings per share from continuing operations for the first nine months rose to $1.70 from $1.18 or 44%. Net income including discontinued operations declined $262.2 million or 63% for the quarter and $171.8 million or 26% for the year-to-date. Net income per share declined to $0.54 from $1.47 for the quarter, a decrease of 63%, and to $1.70 from $2.32 for the year-to-date, a decrease of 27%. The third quarter and year-to-date declines were the result of the sale in the third quarter of 1996 of the outdoor advertising business, which yielded an after-tax gain of $294.6 million or $1.05 per share. Income in 1996 from the discontinued outdoor advertising and entertainment operations was $8.9 million or $0.03 per share for the quarter and $24.5 million or $0.09 per share for the year- to-date. The weighted average number of shares outstanding totaled 283,597,000 for the third quarter of 1997, compared to 281,888,000 for the third quarter of 1996. Average shares outstanding for the year-to-date totaled 283,227,000 for 1997 and 281,646,000 for 1996. The increase in the number of shares outstanding for the quarter and year-to-date periods is due mainly to the issuance of shares upon the exercise of stock options and the settlement of stock incentive rights. LIQUIDITY AND CAPITAL RESOURCES The Company's consolidated operating cash flow (defined as operating income plus depreciation and amortization of intangible assets) as reported in the accompanying Business Segment Information totaled $1,127.4 million for the first nine months of 1997, compared with $923.1 million a year ago, a 22% increase, reflecting strong overall operating results. Capital expenditures for the year-to-date totaled $142.1 million, compared to $195.3 million in 1996. The Company's long-term debt (commercial paper obligations) was reduced by $290.8 million from operating cash flow in the first nine months of 1997. The Company declared quarterly dividends of $0.18 per share in each of the first and second quarters and increased the dividend to $0.19 per share in the third quarter. Dividends totaled $152.2 million for the first nine months. At the end of the third quarter, the Company's long term debt included $275 million in 5.25% notes payable due in March 1998. These notes and the Company's commercial paper obligations are supported by a $3.0 billion revolving credit agreement with a term extending to November 12, 2000. As a result, these obligations are classified as long-term debt. OTHER MATTERS Expenses for the first nine months included the gift of the Niagara Gazette newspaper to the Gannett Foundation. Subsequent to the transfer, the Gannett Foundation sold the Niagara Gazette so that the proceeds could be used to fund the Foundation and its community grants. The sale also resolved the FCC newspaper-television cross-ownership issues that arose as a result of the company's acquisition of television station WGRZ in Buffalo, New York.
<TABLE> CONSOLIDATED BALANCE SHEETS Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars <CAPTION> Sept. 28, 1997 Dec. 29, 1996 --------------- --------------- <S> <C> <C> ASSETS Cash $ 44,155 $ 27,179 Marketable securities 1,969 4,023 Trade receivables, less allowance (1997 - $17,310; 1996 - $18,942) 552,850 569,095 Other receivables 36,218 47,850 Inventories 93,826 73,621 Prepaid expenses 43,659 44,837 --------------- --------------- Total current assets 772,677 766,605 --------------- --------------- Property, plant and equipment Cost 3,578,270 3,423,400 Less accumulated depreciation (1,565,100) (1,429,340) --------------- --------------- Net property, plant and equipment 2,013,170 1,994,060 --------------- --------------- Intangible and other assets Excess of acquisition cost over the value of assets acquired, less amortization (1997 - $642,606; 1996 - $569,527) 3,400,493 3,393,931 Investments and other assets 212,598 195,001 --------------- --------------- Total intangible and other assets 3,613,091 3,588,932 --------------- --------------- Total assets $ 6,398,938 $ 6,349,597 =============== =============== LIABILITIES & SHAREHOLDERS' EQUITY Current maturities of long-term debt $ 18,375 $ 23,302 Accounts payable and current portion of film contracts payable 239,465 261,838 Compensation, interest and other accruals 256,983 231,358 Dividend payable 54,335 51,890 Income taxes 6,852 46,098 Deferred income 118,055 104,510 --------------- --------------- Total current liabilities 694,065 718,996 --------------- --------------- Deferred income taxes 361,907 396,170 Long-term debt, less current portion 1,594,970 1,880,293 Postretirement, medical and life insurance liabilities 307,898 301,729 Other long-term liabilities 156,861 121,591 --------------- --------------- Total liabilities 3,115,701 3,418,779 --------------- --------------- Shareholders' Equity Preferred stock of $1 par value per share. Authorized 2,000,000 shares; issued - none. Common stock of $1 par value per share. Authorized 400,000,000; issued, 324,420,732 shares. 324,421 162,210 Additional paid-in capital 89,372 86,126 Retained earnings 3,818,771 3,654,681 --------------- --------------- Total 4,232,564 3,903,017 --------------- --------------- Less treasury stock - 40,743,974 shares and 41,785,322 shares respectively, at cost (920,592) (942,609) Deferred compensation related to ESOP (28,735) (29,590) --------------- --------------- Total shareholders' equity 3,283,237 2,930,818 --------------- --------------- Total liabilities and shareholders' equity $ 6,398,938 $ 6,349,597 =============== =============== Note: All common share amounts have been adjusted to reflect the two-for-one stock split effective on October 6, 1997. </TABLE>
<TABLE> CONSOLIDATED STATEMENTS OF INCOME Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars (except per share amounts) <CAPTION> Thirteen weeks ended % Inc Sept. 28, 1997 Sept. 29, 1996 (Dec) <S> <C> <C> <C> Net Operating Revenues: Newspaper advertising $ 633,019 $ 585,814 8.1 Newspaper circulation 235,439 229,197 2.7 Broadcasting 164,895 178,879 (7.8) Cable & Security 63,502 58,332 8.9 Other 49,235 40,481 21.6 ------------- ------------ ------- Total 1,146,090 1,092,703 4.9 ------------- ------------ ------- Operating Expenses: Cost of sales and operating expenses, exclusive of depreciation 602,418 612,888 (1.7) Selling, general and administrative expenses, exclusive of depreciation 184,092 174,533 5.5 Depreciation 49,979 48,772 2.5 Amortization of intangible assets 24,900 23,472 6.1 ------------- ------------ ------- Total 861,389 859,665 0.2 ------------- ------------ ------- Operating income 284,701 233,038 22.2 ------------- ------------ ------- Non-operating income (expense): Interest expense (23,418) (34,111) (31.3) Other (1,573) (3,917) (59.8) ------------- ------------ ------- Total (24,991) (38,028) (34.3) ------------- ------------ ------- Income before income taxes 259,710 195,010 33.2 Provision for income taxes 107,250 83,800 28.0 ------------- ------------ ------- Income from continuing operations 152,460 111,210 37.1 Discontinued operations: Income from discontinued operations, net of income tax 8,861 (100.0) Gain from sale of discontinued operations, net of income tax 294,580 (100.0) ------------- ------------ ------- Net income $ 152,460 $ 414,651 (63.2) ============= ============ ======= Earnings per share: Earnings from continuing operations $0.54 $0.39 38.5 Earnings from discontinued operations, net of tax 0.03 (100.0) Gain from sale of discontinued operations, net of tax 1.05 (100.0) -------- -------- ------- Net income per share $0.54 $1.47 (63.3) ==== ==== ==== Dividends per share $0.19 $0.18 5.6 ==== ==== ==== NOTE: All per common share amounts have been adjusted to reflect the two-for-one stock split effective on October 6, 1997. </TABLE>
<TABLE> CONSOLIDATED STATEMENTS OF INCOME Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars (except per share amounts) <CAPTION> Thirty-nine weeks ended % Inc Sept. 28, 1997 Sept. 29, 1996 (Dec) <S> <C> <C> <C> Net Operating Revenues: Newspaper advertising $ 1,882,877 $ 1,747,679 7.7 Newspaper circulation 701,046 685,874 2.2 Broadcasting 504,746 496,873 1.6 Cable & Security 189,411 172,676 9.7 Other 132,594 122,778 8.0 ------------ ------------ ------- Total 3,410,674 3,225,880 5.7 ------------ ------------ ------- Operating Expenses: Cost of sales and operating expenses, exclusive of depreciation 1,744,586 1,790,918 (2.6) Selling, general and administrative expenses, exclusive of depreciation 538,670 511,830 5.2 Depreciation 149,737 146,643 2.1 Amortization of intangible assets 74,640 70,468 5.9 ------------ ------------ ------- Total 2,507,633 2,519,859 (0.5) ------------ ------------ ------- Operating income 903,041 706,021 27.9 ------------ ------------ ------- Non-operating income (expense): Interest expense (73,819) (112,042) (34.1) Other (7,665) (6,157) 24.5 ------------ ------------ ------- Total (81,484) (118,199) (31.1) ------------ ------------ ------- Income before income taxes 821,557 587,822 39.8 Provision for income taxes 339,300 252,925 34.2 ------------ ------------ ------- Income from continuing operations 482,257 334,897 44.0 Discontinued operations: Income from discontinued operations, net of income tax 24,540 (100.0) Gain from sale of discontinued operations, net of income tax 294,580 (100.0) ------------ ------------ ------- Net income $ 482,257 $ 654,017 (26.3) ============ ============ ======= Earnings per share: Earnings from continuing operations $1.70 $1.18 44.1 Earnings from discontinued operations, net of tax 0.09 (100.0) Gain from sale of discontinued operations, net of tax 1.05 (100.0) -------- -------- -------- Net income per share $1.70 $2.32 (26.7) ==== ==== ==== Dividends per share $0.55 $0.53 3.8 ==== ==== ==== NOTE: All per common share amounts have been adjusted to reflect the two-for-one stock split effective on October 6, 1997. </TABLE>
<TABLE> CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars <CAPTION> Thirty-nine weeks ended Sept. 28, 1997 Sept. 29, 1996 <S> <C> <C> Cash flows from operating activities Net income $ 482,257 $ 654,017 Adjustments to reconcile net income to operating cash flows: Discontinued operations (319,120) Depreciation 149,737 146,643 Amortization of intangibles 74,640 70,468 Deferred income taxes (13,500) (13,351) Other, net (21,688) 17,376 --------- --------- Net cash flow from operating activities 671,446 556,033 --------- --------- Cash flows from investing activities Purchase of property, plant and equipment (142,062) (195,322) Payments for acquisitions, net of cash acquired (98,721) Change in other investments (10,501) (18,341) Proceeds from sale of certain assets 8,993 720,928 Collection of long-term receivables 3,828 1,205 --------- --------- Net cash (used for) provided by investing activities (238,463) 508,470 --------- --------- Cash flow from financing activities Payments of long-term debt (290,787) (927,739) Dividends paid (152,226) (146,407) Cost of common shares repurchased (1,436) Proceeds from issuance of common stock 24,952 16,906 --------- --------- Net cash used for financing activities (418,061) (1,058,676) --------- --------- Effect of currency exchange rate change (236) --------- --------- Net increase in cash and cash equivalents 14,922 5,591 Balance of cash and cash equivalents at beginning of year 31,202 46,985 --------- --------- Balance of cash and cash equivalents at end of third quarter $ 46,124 $ 52,576 ========= ========= </TABLE>
<TABLE> BUSINESS SEGMENT INFORMATION Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars <CAPTION> Thirteen weeks ended % Inc Sept. 28, 1997 Sept. 29, 1996 (Dec) <S> <C> <C> <C> Operating Revenues: Newspaper publishing $ 917,693 $ 855,492 7.3 Broadcasting 164,895 178,879 (7.8) Cable and Security 63,502 58,332 8.9 -------------- ---------- ------- Total $ 1,146,090 $ 1,092,703 4.9 ============== ========== ======= Operating Income (net of depreciation and amortization): Newspaper publishing $ 217,793 $ 159,783 36.3 Broadcasting 71,884 76,116 (5.6) Cable and Security 12,323 11,546 6.7 Corporate (17,299) (14,407) (20.1) -------------- ---------- ------- Total $ 284,701 $ 233,038 22.2 ============== ========== ======= Depreciation and Amortization: Newspaper publishing $ 41,065 $ 40,282 1.9 Broadcasting 14,404 12,886 11.8 Cable and Security 17,196 16,609 3.5 Corporate 2,214 2,467 (10.3) -------------- ---------- ------- Total $ 74,879 $ 72,244 3.6 ============== ========== ======= Operating Cash Flow: Newspaper publishing $ 258,858 $ 200,065 29.4 Broadcasting 86,288 89,002 (3.0) Cable and Security 29,519 28,155 4.8 Corporate (15,085) (11,940) (26.3) -------------- ---------- ------- Total $ 359,580 $ 305,282 17.8 ============== ========== ======= NOTE: Operating Cash Flow represents operating income for each of the Company's business segments plus related depreciation and amortization expense. </TABLE>
<TABLE> BUSINESS SEGMENT INFORMATION Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars <CAPTION> Thirty-nine weeks ended % Inc Sept. 28, 1997 Sept. 29, 1996 (Dec) <S> <C> <C> <C> Operating Revenues: Newspaper publishing $ 2,716,517 $ 2,556,331 6.3 Broadcasting 504,746 496,873 1.6 Cable and Security 189,411 172,676 9.7 ------------- ---------- ------- Total $ 3,410,674 $ 3,225,880 5.7 ============= ========== ======= Operating Income (net of depreciation and amortization): Newspaper publishing $ 688,569 $ 509,833 35.1 Broadcasting 226,275 208,264 8.6 Cable and Security 39,573 35,335 12.0 Corporate (51,376) (47,411) (8.4) ------------- ---------- ------- Total $ 903,041 $ 706,021 27.9 ============= ========== ======= Depreciation and Amortization: Newspaper publishing $ 123,577 $ 121,741 1.5 Broadcasting 43,898 38,904 12.8 Cable and Security 50,348 48,887 3.0 Corporate 6,554 7,579 (13.5) ------------- ---------- ------- Total $ 224,377 $ 217,111 3.3 ============= ========== ======= Operating Cash Flow: Newspaper publishing $ 812,146 $ 631,574 28.6 Broadcasting 270,173 247,168 9.3 Cable and Security 89,921 84,222 6.8 Corporate (44,822) (39,832) (12.5) ------------- ---------- ------- Total $ 1,127,418 $ 923,132 22.1 ============= ========== ======= NOTE: Operating Cash Flow represents operating income for each of the Company's business segments plus related depreciation and amortization expense. </TABLE>
NOTE TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS September 28, 1997 1. Basis of Presentation The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not include all information and footnotes which are normally included in Form 10-K and annual report to shareholders. The financial statements covering the 13 and 39 week periods ended September 28, 1997, and the comparative periods of 1996 reflect all adjustments which, in the opinion of the Company, are necessary for a fair statement of results for the interim periods.
PART II. OTHER INFORMATION Item 5. Other Information Effective December 9, 1997, Karen Hastie Williams was elected to the Company's Board of Directors. With her election, the Board numbers 10. Ms. Williams will serve on the Board for a term that expires at the annual meeting of shareholders held in 2000. The following appointments were made effective September 24, 1997: Douglas H. McCorkindale, Vice Chairman and President Larry F. Miller, Executive Vice President and Chief Financial Officer George R. Gavagan, Vice President and Controller Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. See Exhibit Index for list of exhibits filed with this report. (b) Reports on Form 8-K. None.
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: November 12, 1997 /s/ George R. Gavagan ---------------------------------------- George R. Gavagan Vice President and Controller Dated: November 12, 1997 /s/ Thomas L. Chapple ---------------------------------------- Thomas L. Chapple Senior Vice President, General Counsel and Secretary
EXHIBIT INDEX Exhibit Number Title or Description Location 3-1 By-laws of Gannett Co., Attached Inc. 4-1 $1,000,000,000 Revolving Incorporated by reference Credit Agreement among to Exhibit 4-1 to Gannett Gannett Co., Inc. and Co., Inc.'s Form 10-K for the Banks named therein. the fiscal year ended December 26, 1993. 4-2 Amendment Number One to Incorporated by reference $1,000,000,000 Revolving to Exhibit 4-2 to Gannett Credit Agreement among Co., Inc.'s Form 10-Q for Gannett Co., Inc. and the fiscal quarter ended the Banks named therein. June 26, 1994. 4-3 Amendment Number Two to Incorporated by reference $1,500,000,000 Revolving to Gannett Co., Inc.'s Credit Agreement among Form 10-K for the fiscal Gannett Co., Inc. and year ended December 31, the Banks named therein. 1995. 4-4 Amendment Number Three Incorporated by reference to $3,000,000,000 to Exhibit 4-4 to Gannett Revolving Credit Co., Inc.'s Form 10-Q for Agreement among Gannett the fiscal quarter ended Co., Inc. and the Banks September 29, 1996. named therein, dated as of August 20, 1996. 4-5 Indenture dated as of Incorporated by reference March 1, 1983 between to Exhibit 4-2 to Gannett Gannett Co., Inc. and Co., Inc's Form 10-K for the Citibank, N.A., as fiscal year ended Trustee. December 29, 1985. 4-6 First Supplemental Incorporated by reference Indenture dated as of to Exhibit 4 to Gannett November 5, 1986 among Co., Inc.'s Form 8-K filed Gannett Co., Inc., on November 9, 1986. Citibank, N.A., as Trustee, and Sovran Bank, N.A., as Successor Trustee. 4-7 Second Supplemental Incorporated by reference Indenture dated as of to Exhibit 4 to Gannett Co., June 1, 1995 among Inc.'s Form 8-K filed Gannett Co., Inc., June 15, 1995 NationsBank, N.A., as Trustee, and Crestar Bank, as Trustee. 4-8 Rights Plan. Incorporated by reference to Exhibit 1 to Gannett Co., Inc.'s Form 8-K filed on May 23, 1990. 10-1 Amended and Restated Incorporated by reference to Gannett Co., Inc. Exhibit 10-1 to Gannett Co., Deferred Compensation Inc.'s Form 10-Q for the Plan. fiscal quarter ended September 29, 1996. 10-2 Amendment No. 5 to Attached. Deferred Compensation Plan 10-3 Amendment No. 8 to Attached. Executive Long Term Incentive Plan 11 Statement re computation Attached. of earnings per share. 27 Financial Data Schedule Attached. Gannett Co., Inc. agrees to furnish to the Securities and Exchange Commission, upon request, a copy of each agreement with respect to long-term debt not filed herewith in reliance upon the exemption from filing applicable to any series of debt which does not exceed 10% of the total consolidated assets of the registrant.