Gannett Co., Inc. Reports Third Quarter Results Including Total Revenue Growth of 3 Percent and Net Income Growth of 33 Percent
Martore went on to say, "Our results this quarter demonstrate that the growth strategy we announced in February is gaining traction. Our all access content subscription model has been rolled out in 71 markets and is delivering the circulation revenue gains we anticipated. Our digital marketing services business is operational in all markets and we are excited by its long term prospects. In September, we re-launched our flagship
Results for the third quarter of 2012 include
Results for the third quarter of 2011 included special charges affecting operating income related to workforce restructuring which totaled
Amounts reported in accordance with GAAP are contained in Tables 1 through 4. Certain amounts and comparisons included in the following discussion of GAAP results are supplemented by discussions which exclude the effect of special items. Details of these special items and their effect on GAAP results are included on the Non-GAAP Financial Information Tables 5 through 10 attached to this release. The company's basis for providing discussions of non-GAAP results is detailed below.
CONTINUING OPERATIONS
Net income attributable to
Total operating revenues for the company in the third quarter were 3.4 percent higher than the prior year and totaled
Operating expenses including the special charges noted above were
In the first quarter, the company announced a new capital allocation plan that included a 150 percent increase in the annual dividend to
PUBLISHING
Publishing segment operating revenues in the quarter were
Advertising revenues totaled
Third Quarter 2012 Year-over-Year Comparisons |
||||
U.S. Publishing (including USA TODAY) |
Newsquest (in pounds) |
Total Publishing Segment (constant currency) |
Total Publishing Segment |
|
Retail |
(6.9%) |
(5.5%) |
(6.8%) |
(7.0%) |
National |
(7.6%) |
(12.1%) |
(7.9%) |
(8.1%) |
Classified |
(3.4%) |
(7.7%) |
(4.6%) |
(5.1%) |
(6.0%) |
(7.4%) |
(6.2%) |
(6.6%) |
All major advertising category comparisons in the third quarter were in line with or better than second quarter comparisons. Retail advertising was down 7.0 percent in the quarter as tepid economic growth impacted ad demand. Soft national ad demand domestically and in the
Classified advertising revenues in the U.S. declined 3.4 percent, in line with second quarter comparisons. Automotive advertising was 1.3 percent higher compared to the third quarter in 2011. Employment was 4.4 percent lower due, in part, to tepid job growth. Real estate advertising was down 10.2 percent. The year-over-year comparison was stronger than the second quarter comparison and reflects modest improvements in the housing market. Classified advertising comparisons, in pounds, at Newsquest were uneven in the quarter and were 7.7 percent lower compared to the third quarter last year.
The percentage changes in the classified categories were as follows:
Third Quarter 2012 Year-over-Year Comparisons |
||||
U.S. Publishing |
Newsquest (in pounds) |
Total Publishing Segment (constant currency) |
Total Publishing Segment |
|
Automotive |
1.3% |
(14.9%) |
(1.1%) |
(1.5%) |
Employment |
(4.4%) |
(4.0%) |
(4.3%) |
(5.0%) |
Real Estate |
(10.2%) |
(9.2%) |
(9.9%) |
(10.6%) |
Legal |
1.2% |
--- |
1.2% |
1.2% |
Other |
(7.0%) |
(6.5%) |
(6.9%) |
(7.6%) |
(3.4%) |
(7.7%) |
(4.6%) |
(5.1%) |
The rollout of the all access content subscription model drove a 5.6 percent increase in company-wide circulation revenue. Circulation revenue at our local domestic publishing operations grew for the second consecutive quarter and was up 9.8 percent.
The impact of the all access content subscription model as well as an increase in digital advertising and marketing solutions resulted in a 64.6 percent increase in digital publishing revenues. Digital revenues at our local domestic publishing operations were 76.0 percent higher due primarily to the all access content subscription model. At
Reported publishing segment operating expenses were
BROADCASTING
Results in the Broadcasting segment (which include Captivate) reflected a record level of third quarter revenues and operating results. Operating revenues were 36.0 percent higher in the quarter and totaled
Television revenues were up 38.1 percent to
Broadcasting segment operating expenses were
DIGITAL
Digital segment operating revenues totaled
Digital revenues company-wide, including the Digital segment and all digital revenues generated by the other business segments, were
At the end of the quarter,
NON-OPERATING ITEMS
The company's equity earnings include its share of operating results from unconsolidated investees including the
Equity income in unconsolidated investments totaled
Interest expense was
The reconciliation of the company's effective tax rate on a GAAP and non-GAAP basis is below:
Tax Rate Calculation |
||||
GAAP |
Non-GAAP |
|||
Thirteen weeks ended Sept. 23, 2012 |
Thirteen weeks ended Sept. 25, 2011 |
Thirteen weeks ended Sept. 23, 2012 |
Thirteen weeks ended Sept. 25, 2011 |
|
Income before taxes (per Table 5) |
187,308 |
156,580 |
205,232 |
167,142 |
Noncontrolling interest (per Table 1) |
(15,525) |
(11,992) |
(15,525) |
(11,992) |
Income before taxes attributable to GCI |
171,783 |
144,588 |
189,707 |
155,150 |
Provision for income taxes (per Table 5) |
38,700 |
44,800 |
58,800 |
49,000 |
Effective Tax Rate |
22.5% |
31.0% |
31.0% |
31.6% |
Net cash flow from operating activities was
USE OF NON-GAAP INFORMATION
The company uses non-GAAP financial performance and liquidity measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures are not to be considered in isolation from or as a substitute for the related GAAP measures, and should be read only in conjunction with financial information presented on a GAAP basis.
In this earnings report, the company discusses non-GAAP financial performance measures that exclude from its reported GAAP results the impact of special items consisting of workforce restructuring charges, facility consolidation expenses, pension settlement charges, charges to investments accounted for under the equity method and certain credits to its income tax provision. The company believes that such expenses and credits are not indicative of normal, ongoing operations and their inclusion in results makes for more difficult comparisons between periods and with peer group companies. Workforce restructuring and facility consolidation expenses primarily relate to incremental expenses the company has incurred to consolidate or outsource production processes and centralize other functions. These expenses include payroll and related benefit costs and accelerated depreciation. The pension settlement charges result from the acceleration of expense related to the timing of certain pension payments. The charge related to the equity method investment in 2011 reflects the reduction of book value to fair value caused by significant and sustained declines in the operating performance of an investee. The charge in 2012 reflects accelerated depreciation recognized by an investee related to outsourcing certain production processes. The credits to the tax provision are related primarily to tax settlements covering multiple years.
The company also discusses operating cash flow, a non-GAAP financial performance measure that it believes offers a useful view of the overall operation of its businesses. This non-GAAP measure is calculated by adding amounts associated with the special expense items described above, as well as depreciation and amortization, to operating income as reported on a GAAP basis. This earnings report also discusses free cash flow, a non-GAAP liquidity measure. Free cash flow is defined as "net cash flow from operating activities" as reported on the statement of cash flows reduced by "purchase of property, plant and equipment" as well as "payments for investments" and increased by "proceeds from investments." The company believes that free cash flow is a useful measure for management and investors to evaluate the level of cash generated by operations and the ability of its operations to fund investments in its businesses, repay indebtedness, add to the company's cash balance, or use in other discretionary activities. Management uses free cash flow to monitor cash available for repayment of indebtedness and in its discussions with the investment community.
Management uses non-GAAP financial performance measures for purposes of evaluating business unit and consolidated company performance. The company therefore believes that each of the non-GAAP measures presented provides useful information to investors by allowing them to view the company's businesses through the eyes of management and the Board of Directors, facilitating comparison of results across historical periods, and providing a focus on the underlying ongoing operating performance of its businesses. In addition, many of the company's peer group companies present similar non-GAAP measures so the presentation of such measures facilitates industry comparisons.
Tabular reconciliations for the non-GAAP financial measures are contained in Tables 5 through 10 attached to this news release.
As previously announced, the company will hold an earnings conference call at
About
Certain statements in this press release may be forward looking in nature or "forward looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The forward looking statements contained in this press release are subject to a number of risks, trends and uncertainties that could cause actual performance to differ materially from these forward looking statements. A number of those risks, trends and uncertainties are discussed in the company's
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
||||||
Gannett Co., Inc. and Subsidiaries |
||||||
Unaudited, in thousands (except per share amounts) |
||||||
Table No. 1 |
||||||
Thirteen |
Thirteen |
|||||
weeks ended |
weeks ended |
% Inc |
||||
Sept. 23, 2012 |
Sept. 25, 2011 |
(Dec) |
||||
Net Operating Revenues: |
||||||
Publishing advertising |
$ 552,676 |
$ 591,676 |
(6.6) |
|||
Publishing circulation |
276,655 |
262,099 |
5.6 |
|||
Digital |
182,022 |
173,930 |
4.7 |
|||
Broadcasting |
237,039 |
174,340 |
36.0 |
|||
All other |
60,869 |
63,989 |
(4.9) |
|||
Total |
1,309,261 |
1,266,034 |
3.4 |
|||
Operating Expenses: |
||||||
Cost of sales and operating expenses, exclusive of depreciation |
720,941 |
721,888 |
(0.1) |
|||
Selling, general and administrative expenses, exclusive of depreciation |
318,385 |
297,001 |
7.2 |
|||
Depreciation |
40,460 |
41,263 |
(1.9) |
|||
Amortization of intangible assets |
8,045 |
7,721 |
4.2 |
|||
Facility consolidation charges |
4,231 |
- |
*** |
|||
Total |
1,092,062 |
1,067,873 |
2.3 |
|||
Operating income |
217,199 |
198,161 |
9.6 |
|||
Non-operating (expense) income: |
||||||
Equity income in unconsolidated investees, net |
3,005 |
2,563 |
17.2 |
|||
Interest expense |
(35,829) |
(40,939) |
(12.5) |
|||
Other non-operating items |
2,933 |
(3,205) |
*** |
|||
Total |
(29,891) |
(41,581) |
(28.1) |
|||
Income before income taxes |
187,308 |
156,580 |
19.6 |
|||
Provision for income taxes |
38,700 |
44,800 |
(13.6) |
|||
Net income |
148,608 |
111,780 |
32.9 |
|||
Net income attributable to noncontrolling interests |
(15,525) |
(11,992) |
29.5 |
|||
Net income attributable to Gannett Co., Inc. |
$ 133,083 |
$ 99,788 |
33.4 |
|||
Net income per share - basic |
$ 0.58 |
$ 0.42 |
38.1 |
|||
Net income per share - diluted |
$ 0.56 |
$ 0.41 |
36.6 |
|||
Weighted average number of common shares outstanding |
||||||
Basic |
230,556 |
239,688 |
(3.8) |
|||
Diluted |
235,550 |
243,350 |
(3.2) |
|||
Dividends declared per share |
$ 0.20 |
$ 0.08 |
*** |
|||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
||||||
Gannett Co., Inc. and Subsidiaries |
||||||
Unaudited, in thousands (except per share amounts) |
||||||
Table No. 2 |
||||||
Thirty-nine |
Thirty-nine |
|||||
weeks ended |
weeks ended |
% Inc |
||||
Sept. 23, 2012 |
Sept. 25, 2011 |
(Dec) |
||||
Net Operating Revenues: |
||||||
Publishing advertising |
$ 1,698,376 |
$ 1,840,276 |
(7.7) |
|||
Publishing circulation |
803,929 |
795,745 |
1.0 |
|||
Digital |
531,700 |
504,971 |
5.3 |
|||
Broadcasting |
618,593 |
522,575 |
18.4 |
|||
All other |
182,290 |
188,667 |
(3.4) |
|||
Total |
3,834,888 |
3,852,234 |
(0.5) |
|||
Operating Expenses: |
||||||
Cost of sales and operating expenses, exclusive of depreciation |
2,164,070 |
2,179,057 |
(0.7) |
|||
Selling, general and administrative expenses, exclusive of depreciation |
943,005 |
891,744 |
5.7 |
|||
Depreciation |
120,320 |
124,971 |
(3.7) |
|||
Amortization of intangible assets |
24,002 |
23,881 |
0.5 |
|||
Facility consolidation charges |
14,116 |
14,050 |
0.5 |
|||
Total |
3,265,513 |
3,233,703 |
1.0 |
|||
Operating income |
569,375 |
618,531 |
(7.9) |
|||
Non-operating (expense) income: |
||||||
Equity income in unconsolidated investees, net |
15,980 |
13,994 |
14.2 |
|||
Interest expense |
(111,542) |
(132,309) |
(15.7) |
|||
Other non-operating items |
2,688 |
1,933 |
39.1 |
|||
Total |
(92,874) |
(116,382) |
(20.2) |
|||
Income before income taxes |
476,501 |
502,149 |
(5.1) |
|||
Provision for income taxes |
116,500 |
126,700 |
(8.1) |
|||
Net income |
360,001 |
375,449 |
(4.1) |
|||
Net income attributable to noncontrolling interests |
(38,806) |
(33,641) |
15.4 |
|||
Net income attributable to Gannett Co., Inc. |
$ 321,195 |
$ 341,808 |
(6.0) |
|||
Net income per share - basic |
$ 1.38 |
$ 1.42 |
(2.8) |
|||
Net income per share - diluted |
$ 1.35 |
$ 1.40 |
(3.6) |
|||
Weighted average number of common shares outstanding |
||||||
Basic |
233,390 |
239,897 |
(2.7) |
|||
Diluted |
237,699 |
243,551 |
(2.4) |
|||
Dividends declared per share |
$ 0.60 |
$ 0.16 |
*** |
BUSINESS SEGMENT INFORMATION |
||||||
Gannett Co., Inc. and Subsidiaries |
||||||
Unaudited, in thousands of dollars |
||||||
Table No. 3 |
||||||
Thirteen weeks ended |
Thirteen weeks ended |
% Inc |
||||
Sept. 23, 2012 |
Sept. 25, 2011 |
(Dec) |
||||
Net Operating Revenues: |
||||||
Publishing |
$ 890,200 |
$ 917,764 |
(3.0) |
|||
Digital |
182,022 |
173,930 |
4.7 |
|||
Broadcasting |
237,039 |
174,340 |
36.0 |
|||
Total |
$ 1,309,261 |
$ 1,266,034 |
3.4 |
|||
Operating Income (net of depreciation, amortization and facility consolidation charges): |
||||||
Publishing |
$ 73,731 |
$ 107,942 |
(31.7) |
|||
Digital |
39,912 |
34,350 |
16.2 |
|||
Broadcasting |
118,672 |
68,552 |
73.1 |
|||
Corporate |
(15,116) |
(12,683) |
19.2 |
|||
Total |
$ 217,199 |
$ 198,161 |
9.6 |
|||
Depreciation, amortization and facility consolidation charges: |
||||||
Publishing |
$ 33,276 |
$ 30,186 |
10.2 |
|||
Digital |
8,391 |
7,729 |
8.6 |
|||
Broadcasting |
6,879 |
7,118 |
(3.4) |
|||
Corporate |
4,190 |
3,951 |
6.0 |
|||
Total |
$ 52,736 |
$ 48,984 |
7.7 |
|||
Operating Cash Flow: |
||||||
Publishing |
$ 107,007 |
$ 138,128 |
(22.5) |
|||
Digital |
48,303 |
42,079 |
14.8 |
|||
Broadcasting |
125,551 |
75,670 |
65.9 |
|||
Corporate |
(10,926) |
(8,732) |
25.1 |
|||
Total |
$ 269,935 |
$ 247,145 |
9.2 |
|||
Operating Cash Flow represents operating income for each of the company's business segments plus related depreciation, amortization and facility consolidation charges. See Table No. 9 for reconciliation of amounts to the Condensed Consolidated Statements of Income. |
||||||
BUSINESS SEGMENT INFORMATION |
||||||
Gannett Co., Inc. and Subsidiaries |
||||||
Unaudited, in thousands of dollars |
||||||
Table No. 4 |
||||||
Thirty-nine weeks ended |
Thirty-nine weeks ended |
% Inc |
||||
Sept. 23, 2012 |
Sept. 25, 2011 |
(Dec) |
||||
Net Operating Revenues: |
||||||
Publishing |
$ 2,684,595 |
$ 2,824,688 |
(5.0) |
|||
Digital |
531,700 |
504,971 |
5.3 |
|||
Broadcasting |
618,593 |
522,575 |
18.4 |
|||
Total |
$ 3,834,888 |
$ 3,852,234 |
(0.5) |
|||
Operating Income (net of depreciation, amortization and facility consolidation charges): |
||||||
Publishing |
$ 239,982 |
$ 364,185 |
(34.1) |
|||
Digital |
92,706 |
86,608 |
7.0 |
|||
Broadcasting |
285,873 |
212,416 |
34.6 |
|||
Corporate |
(49,186) |
(44,678) |
10.1 |
|||
Total |
$ 569,375 |
$ 618,531 |
(7.9) |
|||
Depreciation, amortization and facility consolidation charges: |
||||||
Publishing |
$ 100,226 |
$ 106,377 |
(5.8) |
|||
Digital |
24,626 |
22,801 |
8.0 |
|||
Broadcasting |
21,113 |
22,042 |
(4.2) |
|||
Corporate |
12,473 |
11,682 |
6.8 |
|||
Total |
$ 158,438 |
$ 162,902 |
(2.7) |
|||
Operating Cash Flow: |
||||||
Publishing |
$ 340,208 |
$ 470,562 |
(27.7) |
|||
Digital |
117,332 |
109,409 |
7.2 |
|||
Broadcasting |
306,986 |
234,458 |
30.9 |
|||
Corporate |
(36,713) |
(32,996) |
11.3 |
|||
Total |
$ 727,813 |
$ 781,433 |
(6.9) |
|||
Operating Cash Flow represents operating income for each of the company's business segments plus related depreciation, amortization and facility consolidation charges. See Table No. 9 for reconciliation of amounts to the Condensed Consolidated Statements of Income. |
||||||
NON-GAAP FINANCIAL INFORMATION Gannett Co., Inc. and Subsidiaries
Tables No. 5 through No. 10 reconcile these non-GAAP measures to the most directly comparable GAAP measure.
|
||||||||||||||
Table No. 5 |
||||||||||||||
Non-GAAP |
||||||||||||||
GAAP Measure |
Special Items |
Measure |
||||||||||||
Thirteen |
Facility |
Pension |
Thirteen |
|||||||||||
weeks ended |
Workforce |
consolidation |
settlement |
Special |
weeks ended |
|||||||||
Sept. 23, 2012 |
restructuring |
charges |
charges |
tax benefits |
Sept. 23, 2012 |
|||||||||
Cost of sales and operating expenses, |
||||||||||||||
exclusive of depreciation |
$ 720,941 |
$ (6,706) |
$ - |
$ - |
$ - |
$ 714,235 |
||||||||
Selling, general and administrative expenses, |
||||||||||||||
exclusive of depreciation |
318,385 |
(1,244) |
- |
(2,523) |
- |
314,618 |
||||||||
Facility consolidation charges |
4,231 |
- |
(4,231) |
- |
- |
- |
||||||||
Operating expenses |
1,092,062 |
(7,950) |
(4,231) |
(2,523) |
- |
1,077,358 |
||||||||
Operating income |
217,199 |
7,950 |
4,231 |
2,523 |
- |
231,903 |
||||||||
Equity income in unconsolidated investees, net |
3,005 |
- |
3,220 |
- |
- |
6,225 |
||||||||
Total non-operating (expense) income |
(29,891) |
- |
3,220 |
- |
- |
(26,671) |
||||||||
Income before income taxes |
187,308 |
7,950 |
7,451 |
2,523 |
- |
205,232 |
||||||||
Provision for income taxes |
38,700 |
3,000 |
3,000 |
1,000 |
13,100 |
58,800 |
||||||||
Net income |
148,608 |
4,950 |
4,451 |
1,523 |
(13,100) |
146,432 |
||||||||
Net income attributable to Gannett Co., Inc. |
133,083 |
4,950 |
4,451 |
1,523 |
(13,100) |
130,907 |
||||||||
Net income per share - diluted |
$ 0.56 |
$ 0.02 |
$ 0.02 |
$ 0.01 |
$ (0.06) |
$ 0.56 |
(a) |
|||||||
(a) Total per share amount does not sum due to rounding. |
Non-GAAP |
||||||||||
GAAP Measure |
Special Items |
Measure |
||||||||
Thirteen |
Asset |
Thirteen |
||||||||
weeks ended |
Workforce |
impairment |
weeks ended |
|||||||
Sept. 25, 2011 |
restructuring |
charges |
Sept. 25, 2011 |
|||||||
Cost of sales and operating expenses, |
||||||||||
exclusive of depreciation |
$ 721,888 |
$ (7,467) |
$ - |
$ 714,421 |
||||||
Selling, general and administrative expenses, |
||||||||||
exclusive of depreciation |
297,001 |
(1,218) |
- |
295,783 |
||||||
Operating expenses |
1,067,873 |
(8,685) |
- |
1,059,188 |
||||||
Operating income |
198,161 |
8,685 |
- |
206,846 |
||||||
Equity income in unconsolidated investees, net |
2,563 |
- |
1,877 |
4,440 |
||||||
Total non-operating (expense) income |
(41,581) |
- |
1,877 |
(39,704) |
||||||
Income before income taxes |
156,580 |
8,685 |
1,877 |
167,142 |
||||||
Provision for income taxes |
44,800 |
3,400 |
800 |
49,000 |
||||||
Net income |
111,780 |
5,285 |
1,077 |
118,142 |
||||||
Net income attributable to Gannett Co., Inc. |
99,788 |
5,285 |
1,077 |
106,150 |
||||||
Net income per share - diluted |
$ 0.41 |
$ 0.02 |
$ - |
$ 0.44 |
(a) |
|||||
(a) Total per share amount does not sum due to rounding. |
NON-GAAP FINANCIAL INFORMATION |
||||||||||||||
Gannett Co., Inc. and Subsidiaries |
||||||||||||||
Unaudited, in thousands of dollars (except per share amounts) |
||||||||||||||
Table No. 6 |
||||||||||||||
Non-GAAP |
||||||||||||||
GAAP Measure |
Special Items |
Measure |
||||||||||||
Thirty-nine |
Facility |
Pension |
Thirty-nine |
|||||||||||
weeks ended |
Workforce |
consolidation |
settlement |
Special |
weeks ended |
|||||||||
Sept. 23, 2012 |
restructuring |
charges |
charges |
tax benefits |
Sept. 23, 2012 |
|||||||||
Cost of sales and operating expenses, |
||||||||||||||
exclusive of depreciation |
$ 2,164,070 |
$ (28,770) |
$ - |
$ - |
$ - |
$ 2,135,300 |
||||||||
Selling, general and administrative expenses, |
||||||||||||||
exclusive of depreciation |
943,005 |
(5,205) |
- |
(7,946) |
- |
929,854 |
||||||||
Facility consolidation charges |
14,116 |
- |
(14,116) |
- |
- |
- |
||||||||
Operating expenses |
3,265,513 |
(33,975) |
(14,116) |
(7,946) |
- |
3,209,476 |
||||||||
Operating income |
569,375 |
33,975 |
14,116 |
7,946 |
- |
625,412 |
||||||||
Equity income in unconsolidated investees, net |
15,980 |
- |
3,220 |
- |
- |
19,200 |
||||||||
Total non-operating (expense) income |
(92,874) |
- |
3,220 |
- |
- |
(89,654) |
||||||||
Income before income taxes |
476,501 |
33,975 |
17,336 |
7,946 |
- |
535,758 |
||||||||
Provision for income taxes |
116,500 |
13,500 |
6,900 |
3,200 |
13,100 |
153,200 |
||||||||
Net income |
360,001 |
20,475 |
10,436 |
4,746 |
(13,100) |
382,558 |
||||||||
Net income attributable to Gannett Co., Inc. |
321,195 |
20,475 |
10,436 |
4,746 |
(13,100) |
343,752 |
||||||||
Net income per share - diluted |
$ 1.35 |
$ 0.09 |
$ 0.04 |
$ 0.02 |
$ (0.06) |
$ 1.45 |
(a) |
|||||||
(a) Total per share amount does not sum due to rounding. |
||||||||||||||
Non-GAAP |
||||||||||||||
GAAP Measure |
Special Items |
Measure |
||||||||||||
Facility |
||||||||||||||
consolidation |
||||||||||||||
Thirty-nine |
and asset |
Prior year |
Thirty-nine |
|||||||||||
weeks ended |
Workforce |
impairment |
tax reserve |
weeks ended |
||||||||||
Sept. 25, 2011 |
restructuring |
charges |
adjustments, net |
Sept. 25, 2011 |
||||||||||
Cost of sales and operating expenses, |
||||||||||||||
exclusive of depreciation |
$ 2,179,057 |
$ (19,677) |
$ - |
$ - |
$ 2,159,380 |
|||||||||
Selling, general and administrative expenses, |
||||||||||||||
exclusive of depreciation |
891,744 |
(3,767) |
- |
- |
887,977 |
|||||||||
Facility consolidation charges |
14,050 |
- |
(14,050) |
- |
- |
|||||||||
Operating expenses |
3,233,703 |
(23,444) |
(14,050) |
- |
3,196,209 |
|||||||||
Operating income |
618,531 |
23,444 |
14,050 |
- |
656,025 |
|||||||||
Equity income in unconsolidated investees, net |
13,994 |
- |
1,877 |
- |
15,871 |
|||||||||
Total non-operating (expense) income |
(116,382) |
- |
1,877 |
- |
(114,505) |
|||||||||
Income before income taxes |
502,149 |
23,444 |
15,927 |
- |
541,520 |
|||||||||
Provision for income taxes |
126,700 |
8,900 |
6,400 |
20,100 |
162,100 |
|||||||||
Net income |
375,449 |
14,544 |
9,527 |
(20,100) |
379,420 |
|||||||||
Net income attributable to Gannett Co., Inc. |
341,808 |
14,544 |
9,527 |
(20,100) |
345,779 |
|||||||||
Net income per share - diluted |
$ 1.40 |
$ 0.06 |
$ 0.04 |
$ (0.08) |
$ 1.42 |
|||||||||
NON-GAAP FINANCIAL INFORMATION |
||||||||||
Gannett Co., Inc. and Subsidiaries |
||||||||||
Unaudited, in thousands of dollars |
||||||||||
Table No. 7 |
||||||||||
Non-GAAP |
||||||||||
GAAP Measure |
Special Items |
Measure |
||||||||
Thirteen |
Facility |
Pension |
Thirteen |
|||||||
weeks ended |
Workforce |
consolidation |
settlement |
weeks ended |
||||||
Sept. 23, 2012 |
restructuring |
charges |
charges |
Sept. 23, 2012 |
||||||
Operating Income |
||||||||||
Publishing |
$ 73,731 |
$ 7,950 |
$ 4,231 |
$ - |
$ 85,912 |
|||||
Digital |
39,912 |
- |
- |
- |
39,912 |
|||||
Broadcasting |
118,672 |
- |
- |
- |
118,672 |
|||||
Corporate |
(15,116) |
- |
- |
2,523 |
(12,593) |
|||||
Total Operating Income |
$ 217,199 |
$ 7,950 |
$ 4,231 |
$ 2,523 |
$ 231,903 |
|||||
Depreciation, amortization and facility consolidation charges |
||||||||||
Publishing |
$ 33,276 |
$ - |
$ (4,231) |
$ - |
$ 29,045 |
|||||
Digital |
8,391 |
- |
- |
- |
8,391 |
|||||
Broadcasting |
6,879 |
- |
- |
- |
6,879 |
|||||
Corporate |
4,190 |
- |
- |
- |
4,190 |
|||||
Total depreciation, amortization and facility consolidation charges |
$ 52,736 |
$ - |
$ (4,231) |
$ - |
$ 48,505 |
|||||
Operating Cash Flow (a) |
||||||||||
Publishing |
$ 107,007 |
$ 7,950 |
$ - |
$ - |
$ 114,957 |
|||||
Digital |
48,303 |
- |
- |
- |
48,303 |
|||||
Broadcasting |
125,551 |
- |
- |
- |
125,551 |
|||||
Corporate |
(10,926) |
- |
- |
2,523 |
(8,403) |
|||||
Total Operating Cash Flow |
$ 269,935 |
$ 7,950 |
$ - |
$ 2,523 |
$ 280,408 |
|||||
(a) Refer to Table No. 9. |
||||||||||
Non-GAAP |
||||||||||
GAAP Measure |
Special Items |
Measure |
||||||||
Thirteen |
Thirteen |
|||||||||
weeks ended |
Workforce |
weeks ended |
||||||||
Sept. 25, 2011 |
restructuring |
Sept. 25, 2011 |
||||||||
Operating Income |
||||||||||
Publishing |
$ 107,942 |
$ 8,685 |
$ 116,627 |
|||||||
Digital |
34,350 |
- |
34,350 |
|||||||
Broadcasting |
68,552 |
- |
68,552 |
|||||||
Corporate |
(12,683) |
- |
(12,683) |
|||||||
Total Operating Income |
$ 198,161 |
$ 8,685 |
$ 206,846 |
|||||||
Depreciation, amortization and facility consolidation charges |
||||||||||
Publishing |
$ 30,186 |
$ - |
$ 30,186 |
|||||||
Digital |
7,729 |
- |
7,729 |
|||||||
Broadcasting |
7,118 |
- |
7,118 |
|||||||
Corporate |
3,951 |
- |
3,951 |
|||||||
Total depreciation, amortization and facility consolidation charges |
$ 48,984 |
$ - |
$ 48,984 |
|||||||
Operating Cash Flow (a) |
||||||||||
Publishing |
$ 138,128 |
$ 8,685 |
$ 146,813 |
|||||||
Digital |
42,079 |
- |
42,079 |
|||||||
Broadcasting |
75,670 |
- |
75,670 |
|||||||
Corporate |
(8,732) |
- |
(8,732) |
|||||||
Total Operating Cash Flow |
$ 247,145 |
$ 8,685 |
$ 255,830 |
|||||||
(a) Refer to Table No. 9. |
NON-GAAP FINANCIAL INFORMATION |
||||||||||
Gannett Co., Inc. and Subsidiaries |
||||||||||
Unaudited, in thousands of dollars |
||||||||||
Table No. 8 |
||||||||||
Non-GAAP |
||||||||||
GAAP Measure |
Special Items |
Measure |
||||||||
Thirty-nine |
Facility |
Pension |
Thirty-nine |
|||||||
weeks ended |
Workforce |
consolidation |
settlement |
weeks ended |
||||||
Sept. 23, 2012 |
restructuring |
charges |
charges |
Sept. 23, 2012 |
||||||
Operating Income |
||||||||||
Publishing |
$ 239,982 |
$ 35,631 |
$ 14,116 |
$ - |
$ 289,729 |
|||||
Digital |
92,706 |
- |
- |
- |
92,706 |
|||||
Broadcasting |
285,873 |
- |
- |
- |
285,873 |
|||||
Corporate |
(49,186) |
(1,656) |
- |
7,946 |
(42,896) |
|||||
Total Operating Income |
$ 569,375 |
$ 33,975 |
$ 14,116 |
$ 7,946 |
$ 625,412 |
|||||
Depreciation, amortization and facility consolidation charges |
||||||||||
Publishing |
$ 100,226 |
$ - |
$ (14,116) |
$ - |
$ 86,110 |
|||||
Digital |
24,626 |
- |
- |
- |
24,626 |
|||||
Broadcasting |
21,113 |
- |
- |
- |
21,113 |
|||||
Corporate |
12,473 |
- |
- |
- |
12,473 |
|||||
Total depreciation, amortization and facility consolidation charges |
$ 158,438 |
$ - |
$ (14,116) |
$ - |
$ 144,322 |
|||||
Operating Cash Flow (a) |
||||||||||
Publishing |
$ 340,208 |
$ 35,631 |
$ - |
$ - |
$ 375,839 |
|||||
Digital |
117,332 |
- |
- |
- |
117,332 |
|||||
Broadcasting |
306,986 |
- |
- |
- |
306,986 |
|||||
Corporate |
(36,713) |
(1,656) |
- |
7,946 |
(30,423) |
|||||
Total Operating Cash Flow |
$ 727,813 |
$ 33,975 |
$ - |
$ 7,946 |
$ 769,734 |
|||||
(a) Refer to Table No. 9. |
||||||||||
Non-GAAP |
||||||||||
GAAP Measure |
Special Items |
Measure |
||||||||
Thirty-nine |
Facility |
Thirty-nine |
||||||||
weeks ended |
Workforce |
consolidation |
weeks ended |
|||||||
Sept. 25, 2011 |
restructuring |
charges |
Sept. 25, 2011 |
|||||||
Operating Income |
||||||||||
Publishing |
$ 364,185 |
$ 23,444 |
$ 14,050 |
$ 401,679 |
||||||
Digital |
86,608 |
- |
- |
86,608 |
||||||
Broadcasting |
212,416 |
- |
- |
212,416 |
||||||
Corporate |
(44,678) |
- |
- |
(44,678) |
||||||
Total Operating Income |
$ 618,531 |
$ 23,444 |
$ 14,050 |
$ 656,025 |
||||||
Depreciation, amortization and facility consolidation charges |
||||||||||
Publishing |
$ 106,377 |
$ - |
$ (14,050) |
$ 92,327 |
||||||
Digital |
22,801 |
- |
- |
22,801 |
||||||
Broadcasting |
22,042 |
- |
- |
22,042 |
||||||
Corporate |
11,682 |
- |
- |
11,682 |
||||||
Total depreciation, amortization and facility consolidation charges |
$ 162,902 |
$ - |
$ (14,050) |
$ 148,852 |
||||||
Operating Cash Flow (a) |
||||||||||
Publishing |
$ 470,562 |
$ 23,444 |
$ - |
$ 494,006 |
||||||
Digital |
109,409 |
- |
- |
109,409 |
||||||
Broadcasting |
234,458 |
- |
- |
234,458 |
||||||
Corporate |
(32,996) |
- |
- |
(32,996) |
||||||
Total Operating Cash Flow |
$ 781,433 |
$ 23,444 |
$ - |
$ 804,877 |
||||||
(a) Refer to Table No. 9. |
NON-GAAP FINANCIAL INFORMATION |
||||||||||
Gannett Co., Inc. and Subsidiaries |
||||||||||
Unaudited, in thousands of dollars |
||||||||||
Table No. 9 |
||||||||||
"Operating cash flow," a non-GAAP measure, is defined as operating income plus depreciation, amortization and facility consolidation charges. Management believes that use of this measure allows investors and management to measure, analyze and compare the performance of its business segment operations at a more detailed level and in a meaningful and consistent manner. |
||||||||||
A reconciliation of these non-GAAP amounts to the company's operating income, which the company believes is the most directly comparable financial measure calculated and presented in accordance with GAAP on the company's consolidated statements of income, follows: |
||||||||||
Thirteen weeks ended Sept. 23, 2012 |
||||||||||
Publishing |
Digital |
Broadcasting |
Corporate |
Consolidated Total |
||||||
Operating cash flow |
$ 107,007 |
$ 48,303 |
$ 125,551 |
$ (10,926) |
$ 269,935 |
|||||
Less: |
||||||||||
Depreciation |
(25,165) |
(4,408) |
(6,697) |
(4,190) |
(40,460) |
|||||
Amortization |
(3,880) |
(3,983) |
(182) |
- |
(8,045) |
|||||
Facility consolidation charges |
(4,231) |
- |
- |
- |
(4,231) |
|||||
Operating income as reported (GAAP basis) |
$ 73,731 |
$ 39,912 |
$ 118,672 |
$ (15,116) |
$ 217,199 |
|||||
Thirteen weeks ended Sept. 25, 2011 |
||||||||||
Publishing |
Digital |
Broadcasting |
Corporate |
Consolidated Total |
||||||
Operating cash flow |
$ 138,128 |
$ 42,079 |
$ 75,670 |
$ (8,732) |
$ 247,145 |
|||||
Less: |
||||||||||
Depreciation |
(26,568) |
(3,807) |
(6,937) |
(3,951) |
(41,263) |
|||||
Amortization |
(3,618) |
(3,922) |
(181) |
- |
(7,721) |
|||||
Operating income as reported (GAAP basis) |
$ 107,942 |
$ 34,350 |
$ 68,552 |
$ (12,683) |
$ 198,161 |
|||||
Thirty-nine weeks ended Sept. 23, 2012 |
||||||||||
Publishing |
Digital |
Broadcasting |
Corporate |
Consolidated Total |
||||||
Operating cash flow |
$ 340,208 |
$ 117,332 |
$ 306,986 |
$ (36,713) |
$ 727,813 |
|||||
Less: |
||||||||||
Depreciation |
(74,785) |
(12,493) |
(20,569) |
(12,473) |
(120,320) |
|||||
Amortization |
(11,325) |
(12,133) |
(544) |
- |
(24,002) |
|||||
Facility consolidation charges |
(14,116) |
- |
- |
- |
(14,116) |
|||||
Operating income as reported (GAAP basis) |
$ 239,982 |
$ 92,706 |
$ 285,873 |
$ (49,186) |
$ 569,375 |
|||||
Thirty-nine weeks ended Sept. 25, 2011 |
||||||||||
Publishing |
Digital |
Broadcasting |
Corporate |
Consolidated Total |
||||||
Operating cash flow |
$ 470,562 |
$ 109,409 |
$ 234,458 |
$ (32,996) |
$ 781,433 |
|||||
Less: |
||||||||||
Depreciation |
(80,943) |
(10,848) |
(21,498) |
(11,682) |
(124,971) |
|||||
Amortization |
(11,384) |
(11,953) |
(544) |
- |
(23,881) |
|||||
Facility consolidation charges |
(14,050) |
- |
- |
- |
(14,050) |
|||||
Operating income as reported (GAAP basis) |
$ 364,185 |
$ 86,608 |
$ 212,416 |
$ (44,678) |
$ 618,531 |
|||||
NON-GAAP FINANCIAL INFORMATION |
|||||||
Gannett Co., Inc. and Subsidiaries |
|||||||
Unaudited, in thousands of dollars |
|||||||
Table No. 10 |
|||||||
"Free cash flow" is a non-GAAP liquidity measure used in addition to and in conjunction with results presented in accordance with GAAP. Free cash flow should not be relied upon to the exclusion of GAAP financial measures. |
|||||||
Thirteen |
Thirty-nine |
||||||
weeks ended |
weeks ended |
||||||
Sept. 23, 2012 |
Sept. 23, 2012 |
||||||
Net cash flow from operating activities |
$ 182,154 |
$ 498,736 |
|||||
Purchase of property, plant and equipment |
(24,658) |
(63,010) |
|||||
Payments for investments |
(500) |
(1,000) |
|||||
Proceeds from investments |
4,781 |
15,174 |
|||||
Free cash flow |
$ 161,777 |
$ 449,900 |
|||||
(Logo: http://photos.prnewswire.com/prnh/20120103/PH28972LOGO)
SOURCE
Investors, Jeffrey Heinz, Vice President, Investor Relations, +1-703-854-6917, jheinz@gannett.com, or Media, Jeremy Gaines, Vice President, Corporate Communications, +1-703-854-6049, jmgaines@gannett.com