Gannett Co., Inc. Reports Strong Fourth Quarter Results, Driven by Total Company Revenue Growth of 9 Percent and Non-GAAP Earnings Growth of 20 Percent
"Our strategy is gaining momentum, our investments are bearing fruit and we are achieving the results we expected. We enter 2013 with our businesses performing well and poised for even greater success going forward. We remain confident we are well positioned to achieve our goals and to continue delivering on our promise to return increased value to shareholders," Martore said.
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.
Results for the fourth quarter of 2012 include special charges affecting operating income. Non-cash asset impairments, efficiency-driven facility consolidation and workforce restructuring charges totaled
Results for the fourth quarter of 2011 included special charges affecting operating income of
CONTINUING OPERATIONS
All of the company's Publishing and Broadcast results detailed below were impacted by an extra week in 2012 compared to 2011. Results for the year included 53 weeks compared with 52 weeks in 2011. The fourth quarter was comprised of 14 weeks compared with 13 weeks in the same quarter of 2011. The table below details fourth quarter results on a GAAP and non-GAAP basis and excluding the extra week:
In thousands of dollars, except per share amounts |
|||||||||||||||||||
Fourteen |
Workforce |
Facility |
Impact of |
Thirteen |
|||||||||||||||
Operating income |
$ |
220,380 |
$ |
6,595 |
$ |
108,013 |
$ |
(14,647) |
$ |
320,341 |
|||||||||
Equity income in unconsolidated investees, net |
6,407 |
— |
3,816 |
— |
10,223 |
||||||||||||||
Interest expense |
(38,927) |
— |
— |
2,800 |
(36,127) |
||||||||||||||
Total non-operating (expense) income |
(26,474) |
— |
3,816 |
2,800 |
(19,858) |
||||||||||||||
Income before income taxes |
193,906 |
6,595 |
111,829 |
(11,847) |
300,483 |
||||||||||||||
Provision for income taxes |
78,900 |
2,400 |
11,800 |
(4,900) |
88,200 |
||||||||||||||
Net income |
115,006 |
4,195 |
100,029 |
(6,947) |
212,283 |
||||||||||||||
Net income attributable to Gannett Co., Inc. |
103,085 |
4,195 |
100,029 |
(6,947) |
200,362 |
||||||||||||||
Net income per share - diluted |
$ |
0.44 |
$ |
0.02 |
$ |
0.43 |
$ |
(0.03) |
$ |
0.86 |
Net income attributable to
Total operating revenues for the company were
Operating expenses including the special charges noted above were
Total operating revenues for the full year totaled
Total operating revenues in 2012 excluding the extra week were up 1 percent. On the same basis, Publishing segment revenues were 4.1 percent lower reflecting a 3.1 percent increase in circulation revenue and a 7.4 percent decline in advertising revenues. Broadcasting segment revenues were 24.1 percent higher. Operating expenses, excluding initiative investment, special items and the extra week, were down 0.5 percent. Operating income on the same basis was up 5.7 percent. The extra week in 2012 contributed approximately
In the first quarter of 2012, 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
Primarily reflecting the impact of the complete rollout of the all access content subscription model and the extra week in the quarter, circulation revenue company-wide was up 16.8 percent. Excluding the extra week, circulation revenues increased 9.3 percent. Local domestic circulation revenue was 23.6 percent higher. This is the third consecutive quarter of circulation revenue growth as customer response has been very positive.
Advertising revenues totaled
Excluding the extra week in the quarter, retail advertising and classified advertising comparisons were the best quarterly comparisons for the year while comparisons for national advertising lagged third quarter comparisons.
The percentage changes for the Publishing segment advertising revenue categories for the quarter were as follows:
Fourth Quarter 2012 Year-over-Year Comparisons |
|||||||
U.S. TODAY) |
Newsquest |
Total (constant |
Total |
||||
Retail |
(1.5)% |
(1.3)% |
(1.5)% |
(1.3)% |
|||
National |
(6.4)% |
(13.0)% |
(6.9)% |
(6.8)% |
|||
Classified |
1.8% |
(5.3)% |
—% |
0.5% |
|||
(1.8)% |
(4.7)% |
(2.1)% |
(2.0)% |
The percentage changes in the classified categories were as follows:
Fourth Quarter 2012 Year-over-Year Comparisons |
|||||||
U.S. |
Newsquest |
Total |
Total |
||||
Automotive |
7.3% |
(5.8)% |
5.6% |
5.9% |
|||
Employment |
(4.4)% |
(0.7)% |
(3.4)% |
(2.8)% |
|||
Real Estate |
(4.3)% |
(9.1)% |
(6.0)% |
(5.3)% |
|||
Legal |
10.3% |
--- |
10.3% |
10.3% |
|||
Other |
0.8% |
(5.9)% |
(1.5)% |
(0.8)% |
|||
1.8% |
(5.3)% |
—% |
0.5% |
Digital publishing revenues were up 87.1 percent in the quarter reflecting the impact of the all access content subscription model in addition to higher digital advertising and marketing solutions revenue. Digital publishing revenues excluding the extra week were 79.2 percent higher in the quarter. On the same basis, a 100.1 percent increase in digital revenues at our local domestic publishing operations was driven primarily by the all access content subscription model. Digital revenues at
Publishing segment operating expenses totaled
Publishing segment operating income, which includes the impact of strategic investments, was
BROADCASTING
Results in the Broadcasting segment (which include Captivate) reflected a record level of fourth quarter revenues and operating results. Operating revenues were
Total television revenues were 45.7 percent higher and totaled
Broadcasting segment operating expenses totaled
DIGITAL
Results in the Digital segment were not impacted by the extra week in the quarter. Digital segment operating revenues were
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 was
Interest expense was
Other non-operating income totaled
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, non-cash impairment charges, incremental charges associated with the the company's former chairman and chief executive officer's disability related retirement, pension settlement charges 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. Non-cash impairment charges were recorded in 2012 and 2011 to reduce the book value of certain intangible assets and investments accounted for under the equity and cost methods to fair value, as the businesses underlying these assets had experienced significant and sustained unfavorable operating results. The pension settlement charges result from the acceleration of expense related to the timing of certain pension payments. Full year results include credits to the tax provision related primarily to tax settlements covering multiple years. The company also recorded in the fourth quarter of 2011 a special tax benefit for deductible stock basis relating to prior year business impairment charges for which no tax benefit could have been previously taken.
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 |
|||||||||||
Table No. 1 |
|||||||||||
Fourteen |
Thirteen |
% Increase |
|||||||||
Net operating revenues: |
|||||||||||
Publishing advertising |
$ |
657,546 |
$ |
670,749 |
(2.0) |
||||||
Publishing circulation |
313,113 |
268,145 |
16.8 |
||||||||
Digital |
187,249 |
181,500 |
3.2 |
||||||||
Broadcasting |
287,511 |
199,835 |
43.9 |
||||||||
All other |
72,890 |
67,526 |
7.9 |
||||||||
Total |
1,518,309 |
1,387,755 |
9.4 |
||||||||
Operating expenses: |
|||||||||||
Cost of sales and operating expenses, exclusive of depreciation |
779,777 |
782,040 |
(0.3) |
||||||||
Selling, general and administrative expenses, exclusive of depreciation |
360,422 |
331,741 |
8.6 |
||||||||
Depreciation |
40,426 |
40,768 |
(0.8) |
||||||||
Amortization of intangible assets |
9,291 |
7,753 |
19.8 |
||||||||
Facility consolidation and asset impairment charges |
108,013 |
13,193 |
*** |
||||||||
Total |
1,297,929 |
1,175,495 |
10.4 |
||||||||
Operating income |
220,380 |
212,260 |
3.8 |
||||||||
Non-operating (expense) income: |
|||||||||||
Equity income (loss) in unconsolidated investees, net |
6,407 |
(5,797) |
*** |
||||||||
Interest expense |
(38,927) |
(40,831) |
(4.7) |
||||||||
Other non-operating items |
6,046 |
(14,854) |
*** |
||||||||
Total |
(26,474) |
(61,482) |
(56.9) |
||||||||
Income before income taxes |
193,906 |
150,778 |
28.6 |
||||||||
Provision for income taxes |
78,900 |
26,100 |
*** |
||||||||
Net income |
115,006 |
124,678 |
(7.8) |
||||||||
Net income attributable to noncontrolling interests |
(11,921) |
(7,738) |
54.1 |
||||||||
Net income attributable to Gannett Co., Inc. |
$ |
103,085 |
$ |
116,940 |
(11.8) |
||||||
Net income per share - basic |
$ |
0.45 |
$ |
0.49 |
(8.2) |
||||||
Net income per share - diluted |
$ |
0.44 |
$ |
0.49 |
(10.2) |
||||||
Weighted average number of common shares outstanding: |
|||||||||||
Basic |
229,368 |
237,219 |
(3.3) |
||||||||
Diluted |
233,980 |
240,419 |
(2.7) |
||||||||
Dividends declared per share |
$ |
0.20 |
$ |
0.08 |
*** |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
|||||||||||
Table No. 2 |
|||||||||||
Fifty-three |
Fifty-two |
% Increase |
|||||||||
Net operating revenues: |
|||||||||||
Publishing advertising |
$ |
2,355,922 |
$ |
2,511,025 |
(6.2) |
||||||
Publishing circulation |
1,117,042 |
1,063,890 |
5.0 |
||||||||
Digital |
718,949 |
686,471 |
4.7 |
||||||||
Broadcasting |
906,104 |
722,410 |
25.4 |
||||||||
All other |
255,180 |
256,193 |
(0.4) |
||||||||
Total |
5,353,197 |
5,239,989 |
2.2 |
||||||||
Operating expenses: |
|||||||||||
Cost of sales and operating expenses, exclusive of depreciation |
2,943,847 |
2,961,097 |
(0.6) |
||||||||
Selling, general and administrative expenses, exclusive of depreciation |
1,303,427 |
1,223,485 |
6.5 |
||||||||
Depreciation |
160,746 |
165,739 |
(3.0) |
||||||||
Amortization of intangible assets |
33,293 |
31,634 |
5.2 |
||||||||
Facility consolidation and asset impairment charges |
122,129 |
27,243 |
*** |
||||||||
Total |
4,563,442 |
4,409,198 |
3.5 |
||||||||
Operating income |
789,755 |
830,791 |
(4.9) |
||||||||
Non-operating (expense) income: |
|||||||||||
Equity income in unconsolidated investees, net |
22,387 |
8,197 |
*** |
||||||||
Interest expense |
(150,469) |
(173,140) |
(13.1) |
||||||||
Other non-operating items |
8,734 |
(12,921) |
*** |
||||||||
Total |
(119,348) |
(177,864) |
(32.9) |
||||||||
Income before income taxes |
670,407 |
652,927 |
2.7 |
||||||||
Provision for income taxes |
195,400 |
152,800 |
27.9 |
||||||||
Net income |
475,007 |
500,127 |
(5.0) |
||||||||
Net income attributable to noncontrolling interests |
(50,727) |
(41,379) |
22.6 |
||||||||
Net income attributable to Gannett Co., Inc. |
$ |
424,280 |
$ |
458,748 |
(7.5) |
||||||
Net income per share - basic |
$ |
1.83 |
$ |
1.92 |
(4.7) |
||||||
Net income per share - diluted |
$ |
1.79 |
$ |
1.89 |
(5.3) |
||||||
Weighted average number of common shares outstanding: |
|||||||||||
Basic |
232,327 |
239,228 |
(2.9) |
||||||||
Diluted |
236,690 |
242,768 |
(2.5) |
||||||||
Dividends declared per share |
$ |
0.80 |
$ |
0.24 |
*** |
BUSINESS SEGMENT INFORMATION |
|||||||||||
Table No. 3 |
|||||||||||
Fourteen |
Thirteen |
% Increase |
|||||||||
Net operating revenues: |
|||||||||||
Publishing |
$ |
1,043,549 |
$ |
1,006,420 |
3.7 |
||||||
Digital |
187,249 |
181,500 |
3.2 |
||||||||
Broadcasting |
287,511 |
199,835 |
43.9 |
||||||||
Total |
$ |
1,518,309 |
$ |
1,387,755 |
9.4 |
||||||
Operating income (net of depreciation, amortization and facility consolidation and asset impairment charges): |
|||||||||||
Publishing |
$ |
128,662 |
$ |
113,398 |
13.5 |
||||||
Digital |
(51,006) |
38,732 |
*** |
||||||||
Broadcasting |
157,935 |
89,724 |
76.0 |
||||||||
Corporate |
(15,211) |
(29,594) |
(48.6) |
||||||||
Total |
$ |
220,380 |
$ |
212,260 |
3.8 |
||||||
Depreciation, amortization and facility consolidation and asset impairment charges: |
|||||||||||
Publishing |
$ |
47,524 |
$ |
42,160 |
12.7 |
||||||
Digital |
99,364 |
7,892 |
*** |
||||||||
Broadcasting |
6,894 |
6,884 |
0.1 |
||||||||
Corporate |
3,948 |
4,778 |
(17.4) |
||||||||
Total |
$ |
157,730 |
$ |
61,714 |
*** |
||||||
Operating cash flow: |
|||||||||||
Publishing |
$ |
176,186 |
$ |
155,558 |
13.3 |
||||||
Digital |
48,358 |
46,624 |
3.7 |
||||||||
Broadcasting |
164,829 |
96,608 |
70.6 |
||||||||
Corporate |
(11,263) |
(24,816) |
(54.6) |
||||||||
Total |
$ |
378,110 |
$ |
273,974 |
38.0 |
||||||
Operating cash flow represents operating income from each of the company's business segments plus related depreciation, amortization and facility consolidation and asset impairment charges. See Table No. 9 for reconciliation of amounts to the Condensed Consolidated Statements of Income. |
BUSINESS SEGMENT INFORMATION |
|||||||||||
Table No. 4 |
|||||||||||
Fifty-three |
Fifty-two |
% Increase |
|||||||||
Net operating revenues: |
|||||||||||
Publishing |
$ |
3,728,144 |
$ |
3,831,108 |
(2.7) |
||||||
Digital |
718,949 |
686,471 |
4.7 |
||||||||
Broadcasting |
906,104 |
722,410 |
25.4 |
||||||||
Total |
$ |
5,353,197 |
$ |
5,239,989 |
2.2 |
||||||
Operating income (net of depreciation, amortization and facility consolidation and asset impairment charges): |
|||||||||||
Publishing |
$ |
368,644 |
$ |
477,583 |
(22.8) |
||||||
Digital |
41,700 |
125,340 |
(66.7) |
||||||||
Broadcasting |
443,808 |
302,140 |
46.9 |
||||||||
Corporate |
(64,397) |
(74,272) |
(13.3) |
||||||||
Total |
$ |
789,755 |
$ |
830,791 |
(4.9) |
||||||
Depreciation, amortization and facility consolidation and asset impairment charges: |
|||||||||||
Publishing |
$ |
147,750 |
$ |
148,537 |
(0.5) |
||||||
Digital |
123,990 |
30,693 |
*** |
||||||||
Broadcasting |
28,007 |
28,926 |
(3.2) |
||||||||
Corporate |
16,421 |
16,460 |
(0.2) |
||||||||
Total |
$ |
316,168 |
$ |
224,616 |
40.8 |
||||||
Operating cash flow: |
|||||||||||
Publishing |
$ |
516,394 |
$ |
626,120 |
(17.5) |
||||||
Digital |
165,690 |
156,033 |
6.2 |
||||||||
Broadcasting |
471,815 |
331,066 |
42.5 |
||||||||
Corporate |
(47,976) |
(57,812) |
(17.0) |
||||||||
Total |
$ |
1,105,923 |
$ |
1,055,407 |
4.8 |
||||||
Operating cash flow represents operating income from each of the company's business segments plus related depreciation, amortization and facility consolidation and asset impairment charges. See Table No. 9 for reconciliation of amounts to the Condensed Consolidated Statements of Income. |
NON-GAAP FINANCIAL 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. |
|||||||||||||||||||||||
Tables No. 5 through No. 10 reconcile these non-GAAP measures to the most directly comparable GAAP measure. |
|||||||||||||||||||||||
Table No. 5 |
|||||||||||||||||||||||
GAAP |
Special Items |
Non-GAAP |
|||||||||||||||||||||
Fourteen |
Workforce |
Facility |
Fourteen |
||||||||||||||||||||
Cost of sales and operating expenses, exclusive of depreciation |
$ |
779,777 |
$ |
(5,909) |
$ |
— |
$ |
773,868 |
|||||||||||||||
Selling, general and administrative expenses, exclusive of depreciation |
360,422 |
(686) |
— |
359,736 |
|||||||||||||||||||
Facility consolidation and asset impairment charges |
108,013 |
— |
(108,013) |
— |
|||||||||||||||||||
Operating expenses |
1,297,929 |
(6,595) |
(108,013) |
1,183,321 |
|||||||||||||||||||
Operating income |
220,380 |
6,595 |
108,013 |
334,988 |
|||||||||||||||||||
Equity income in unconsolidated investees, net |
6,407 |
— |
3,816 |
10,223 |
|||||||||||||||||||
Total non-operating (expense) income |
(26,474) |
— |
3,816 |
(22,658) |
|||||||||||||||||||
Income before income taxes |
193,906 |
6,595 |
111,829 |
312,330 |
|||||||||||||||||||
Provision for income taxes |
78,900 |
2,400 |
11,800 |
93,100 |
|||||||||||||||||||
Net income |
115,006 |
4,195 |
100,029 |
219,230 |
|||||||||||||||||||
Net income attributable to Gannett Co., Inc. |
103,085 |
4,195 |
100,029 |
207,309 |
|||||||||||||||||||
Net income per share - diluted |
$ |
0.44 |
$ |
0.02 |
$ |
0.43 |
$ |
0.89 |
|||||||||||||||
GAAP |
Special |
Non-GAAP |
|||||||||||||||||||||
Thirteen |
Workforce |
Facility |
Former |
Tax benefit of |
Thirteen |
||||||||||||||||||
Cost of sales and operating expenses, exclusive of depreciation |
$ |
782,040 |
$ |
(46,468) |
$ |
— |
$ |
— |
$ |
— |
$ |
735,572 |
|||||||||||
Selling, general and administrative expenses, exclusive of depreciation |
331,741 |
(3,984) |
— |
(14,738) |
— |
313,019 |
|||||||||||||||||
Facility consolidation and asset impairment charges |
13,193 |
— |
(13,193) |
— |
— |
— |
|||||||||||||||||
Operating expenses |
1,175,495 |
(50,452) |
(13,193) |
(14,738) |
— |
1,097,112 |
|||||||||||||||||
Operating income |
212,260 |
50,452 |
13,193 |
14,738 |
— |
290,643 |
|||||||||||||||||
Equity income (loss) in unconsolidated investees, net |
(5,797) |
— |
13,862 |
— |
— |
8,065 |
|||||||||||||||||
Other non-operating items |
(14,854) |
— |
14,529 |
— |
— |
(325) |
|||||||||||||||||
Total non-operating (expense) income |
(61,482) |
— |
28,391 |
— |
— |
(33,091) |
|||||||||||||||||
Income before income taxes |
150,778 |
50,452 |
41,584 |
14,738 |
— |
257,552 |
|||||||||||||||||
Provision for income taxes |
26,100 |
19,400 |
15,300 |
5,900 |
10,700 |
77,400 |
|||||||||||||||||
Net income |
124,678 |
31,052 |
26,284 |
8,838 |
(10,700) |
180,152 |
|||||||||||||||||
Net income attributable to Gannett Co., Inc. |
116,940 |
31,052 |
26,284 |
8,838 |
(10,700) |
172,414 |
|||||||||||||||||
Net income per share - diluted (a) |
$ |
0.49 |
$ |
0.13 |
$ |
0.11 |
$ |
0.04 |
$ |
(0.04) |
$ |
0.72 |
|||||||||||
(a) Total per share amount does not sum due to rounding. |
NON-GAAP FINANCIAL INFORMATION |
|||||||||||||||||||||||||||
Table No. 6 |
|||||||||||||||||||||||||||
GAAP |
Special Items |
Non-GAAP |
|||||||||||||||||||||||||
Fifty-three |
Workforce |
Facility |
Pension |
Special tax |
Fifty-three |
||||||||||||||||||||||
Cost of sales and operating expenses, exclusive of depreciation |
$ |
2,943,847 |
$ |
(34,679) |
$ |
— |
$ |
— |
$ |
— |
$ |
2,909,168 |
|||||||||||||||
Selling, general and administrative expenses, exclusive of depreciation |
1,303,427 |
(5,891) |
— |
(7,946) |
— |
1,289,590 |
|||||||||||||||||||||
Facility consolidation and asset impairment charges |
122,129 |
— |
(122,129) |
— |
— |
— |
|||||||||||||||||||||
Operating expenses |
4,563,442 |
(40,570) |
(122,129) |
(7,946) |
— |
4,392,797 |
|||||||||||||||||||||
Operating income |
789,755 |
40,570 |
122,129 |
7,946 |
— |
960,400 |
|||||||||||||||||||||
Equity income in unconsolidated investees, net |
22,387 |
— |
7,036 |
— |
— |
29,423 |
|||||||||||||||||||||
Total non-operating (expense) income |
(119,348) |
— |
7,036 |
— |
— |
(112,312) |
|||||||||||||||||||||
Income before income taxes |
670,407 |
40,570 |
129,165 |
7,946 |
— |
848,088 |
|||||||||||||||||||||
Provision for income taxes |
195,400 |
15,900 |
18,700 |
3,200 |
13,100 |
246,300 |
|||||||||||||||||||||
Net income |
475,007 |
24,670 |
110,465 |
4,746 |
(13,100) |
601,788 |
|||||||||||||||||||||
Net income attributable to Gannett Co., Inc. |
424,280 |
24,670 |
110,465 |
4,746 |
(13,100) |
551,061 |
|||||||||||||||||||||
Net income per share - diluted (a) |
$ |
1.79 |
$ |
0.10 |
$ |
0.47 |
$ |
0.02 |
$ |
(0.06) |
$ |
2.33 |
|||||||||||||||
GAAP |
Special Items |
Non-GAAP |
|||||||||||||||||||||||||
Fifty-two |
Workforce |
Facility |
Former |
Prior year tax |
Tax benefit of |
Fifty-two |
|||||||||||||||||||||
Cost of sales and operating expenses, exclusive of depreciation |
$ |
2,961,097 |
$ |
(66,145) |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
2,894,952 |
|||||||||||||
Selling, general and administrative expenses, exclusive of depreciation |
1,223,485 |
(7,751) |
— |
(14,738) |
— |
— |
1,200,996 |
||||||||||||||||||||
Facility consolidation and asset impairment charges |
27,243 |
— |
(27,243) |
— |
— |
— |
— |
||||||||||||||||||||
Operating expenses |
4,409,198 |
(73,896) |
(27,243) |
(14,738) |
— |
— |
4,293,321 |
||||||||||||||||||||
Operating income |
830,791 |
73,896 |
27,243 |
14,738 |
— |
— |
946,668 |
||||||||||||||||||||
Equity income in unconsolidated investees, net |
8,197 |
— |
15,739 |
— |
— |
— |
23,936 |
||||||||||||||||||||
Other non-operating items |
(12,921) |
— |
14,529 |
— |
— |
— |
1,608 |
||||||||||||||||||||
Total non-operating (expense) income |
(177,864) |
— |
30,268 |
— |
— |
— |
(147,596) |
||||||||||||||||||||
Income before income taxes |
652,927 |
73,896 |
57,511 |
14,738 |
— |
— |
799,072 |
||||||||||||||||||||
Provision for income taxes |
152,800 |
28,300 |
21,700 |
5,900 |
20,100 |
10,700 |
239,500 |
||||||||||||||||||||
Net income |
500,127 |
45,596 |
35,811 |
8,838 |
(20,100) |
(10,700) |
559,572 |
||||||||||||||||||||
Net income attributable to Gannett Co., Inc. |
458,748 |
45,596 |
35,811 |
8,838 |
(20,100) |
(10,700) |
518,193 |
||||||||||||||||||||
Net income per share - diluted (a) |
$ |
1.89 |
$ |
0.19 |
$ |
0.15 |
$ |
0.04 |
$ |
(0.08) |
$ |
(0.04) |
$ |
2.13 |
|||||||||||||
(a) Total per share amount does not sum due to rounding. |
NON-GAAP FINANCIAL INFORMATION |
|||||||||||||||||||
Table No. 7 |
|||||||||||||||||||
GAAP |
Special Items |
Non-GAAP Measure |
|||||||||||||||||
Fourteen |
Workforce |
Facility |
Fourteen |
||||||||||||||||
Operating income: |
|||||||||||||||||||
Publishing |
$ |
128,662 |
$ |
6,595 |
$ |
17,960 |
$ |
153,217 |
|||||||||||
Digital |
(51,006) |
— |
90,053 |
39,047 |
|||||||||||||||
Broadcasting |
157,935 |
— |
— |
157,935 |
|||||||||||||||
Corporate |
(15,211) |
— |
— |
(15,211) |
|||||||||||||||
Total |
$ |
220,380 |
$ |
6,595 |
$ |
108,013 |
$ |
334,988 |
|||||||||||
Depreciation, amortization and facility consolidation and asset impairment charges: |
|||||||||||||||||||
Publishing |
$ |
47,524 |
$ |
— |
$ |
(17,960) |
$ |
29,564 |
|||||||||||
Digital |
99,364 |
— |
(90,053) |
9,311 |
|||||||||||||||
Broadcasting |
6,894 |
— |
— |
6,894 |
|||||||||||||||
Corporate |
3,948 |
— |
— |
3,948 |
|||||||||||||||
Total |
$ |
157,730 |
$ |
— |
$ |
(108,013) |
$ |
49,717 |
|||||||||||
Operating cash flow (a): |
|||||||||||||||||||
Publishing |
$ |
176,186 |
$ |
6,595 |
$ |
— |
$ |
182,781 |
|||||||||||
Digital |
48,358 |
— |
— |
48,358 |
|||||||||||||||
Broadcasting |
164,829 |
— |
— |
164,829 |
|||||||||||||||
Corporate |
(11,263) |
— |
— |
(11,263) |
|||||||||||||||
Total |
$ |
378,110 |
$ |
6,595 |
$ |
— |
$ |
384,705 |
|||||||||||
GAAP |
Special Items |
Non-GAAP |
|||||||||||||||||
Thirteen |
Workforce |
Facility |
Former |
Thirteen |
|||||||||||||||
Operating income: |
|||||||||||||||||||
Publishing |
$ |
113,398 |
$ |
49,785 |
$ |
13,193 |
$ |
— |
$ |
176,376 |
|||||||||
Digital |
38,732 |
— |
— |
— |
38,732 |
||||||||||||||
Broadcasting |
89,724 |
667 |
— |
— |
90,391 |
||||||||||||||
Corporate |
(29,594) |
— |
— |
14,738 |
(14,856) |
||||||||||||||
Total |
$ |
212,260 |
$ |
50,452 |
$ |
13,193 |
$ |
14,738 |
$ |
290,643 |
|||||||||
Depreciation, amortization and facility consolidation and asset impairment charges: |
|||||||||||||||||||
Publishing |
$ |
42,160 |
$ |
— |
$ |
(13,193) |
$ |
— |
$ |
28,967 |
|||||||||
Digital |
7,892 |
— |
— |
— |
7,892 |
||||||||||||||
Broadcasting |
6,884 |
— |
— |
— |
6,884 |
||||||||||||||
Corporate |
4,778 |
— |
— |
— |
4,778 |
||||||||||||||
Total |
$ |
61,714 |
$ |
— |
$ |
(13,193) |
$ |
— |
$ |
48,521 |
|||||||||
Operating cash flow (a): |
|||||||||||||||||||
Publishing |
$ |
155,558 |
$ |
49,785 |
$ |
— |
$ |
— |
$ |
205,343 |
|||||||||
Digital |
46,624 |
— |
— |
— |
46,624 |
||||||||||||||
Broadcasting |
96,608 |
667 |
— |
— |
97,275 |
||||||||||||||
Corporate |
(24,816) |
— |
— |
14,738 |
(10,078) |
||||||||||||||
Total |
$ |
273,974 |
$ |
50,452 |
$ |
— |
$ |
14,738 |
$ |
339,164 |
|||||||||
(a) Refer to Table No. 9 |
NON-GAAP FINANCIAL INFORMATION |
|||||||||||||||||||
Table No. 8 |
|||||||||||||||||||
GAAP |
Special Items |
Non-GAAP |
|||||||||||||||||
Fifty-three |
Workforce |
Facility |
Pension |
Fifty-three |
|||||||||||||||
Operating income: |
|||||||||||||||||||
Publishing |
$ |
368,644 |
$ |
42,226 |
$ |
32,076 |
$ |
— |
$ |
442,946 |
|||||||||
Digital |
41,700 |
— |
90,053 |
— |
131,753 |
||||||||||||||
Broadcasting |
443,808 |
— |
— |
— |
443,808 |
||||||||||||||
Corporate |
(64,397) |
(1,656) |
— |
7,946 |
(58,107) |
||||||||||||||
Total |
$ |
789,755 |
$ |
40,570 |
$ |
122,129 |
$ |
7,946 |
$ |
960,400 |
|||||||||
Depreciation, amortization and facility consolidation and asset impairment charges: |
|||||||||||||||||||
Publishing |
$ |
147,750 |
$ |
— |
$ |
(32,076) |
$ |
— |
$ |
115,674 |
|||||||||
Digital |
123,990 |
— |
(90,053) |
— |
33,937 |
||||||||||||||
Broadcasting |
28,007 |
— |
— |
— |
28,007 |
||||||||||||||
Corporate |
16,421 |
— |
— |
— |
16,421 |
||||||||||||||
Total |
$ |
316,168 |
$ |
— |
$ |
(122,129) |
$ |
— |
$ |
194,039 |
|||||||||
Operating cash flow (a): |
|||||||||||||||||||
Publishing |
$ |
516,394 |
$ |
42,226 |
$ |
— |
$ |
— |
$ |
558,620 |
|||||||||
Digital |
165,690 |
— |
— |
— |
165,690 |
||||||||||||||
Broadcasting |
471,815 |
— |
— |
— |
471,815 |
||||||||||||||
Corporate |
(47,976) |
(1,656) |
— |
7,946 |
(41,686) |
||||||||||||||
Total |
$ |
1,105,923 |
$ |
40,570 |
$ |
— |
$ |
7,946 |
$ |
1,154,439 |
GAAP |
Special Items |
Non-GAAP |
|||||||||||||||||
Fifty-two |
Workforce |
Facility |
Former |
Fifty-two |
|||||||||||||||
Operating income: |
|||||||||||||||||||
Publishing |
$ |
477,583 |
$ |
73,229 |
$ |
27,243 |
$ |
— |
$ |
578,055 |
|||||||||
Digital |
125,340 |
— |
— |
— |
125,340 |
||||||||||||||
Broadcasting |
302,140 |
667 |
— |
— |
302,807 |
||||||||||||||
Corporate |
(74,272) |
— |
— |
14,738 |
(59,534) |
||||||||||||||
Total |
$ |
830,791 |
$ |
73,896 |
$ |
27,243 |
$ |
14,738 |
$ |
946,668 |
|||||||||
Depreciation, amortization and facility consolidation and asset impairment charges: |
|||||||||||||||||||
Publishing |
$ |
148,537 |
$ |
— |
$ |
(27,243) |
$ |
— |
$ |
121,294 |
|||||||||
Digital |
30,693 |
— |
— |
— |
30,693 |
||||||||||||||
Broadcasting |
28,926 |
— |
— |
— |
28,926 |
||||||||||||||
Corporate |
16,460 |
— |
— |
— |
16,460 |
||||||||||||||
Total |
$ |
224,616 |
$ |
— |
$ |
(27,243) |
$ |
— |
$ |
197,373 |
|||||||||
Operating cash flow (a): |
|||||||||||||||||||
Publishing |
$ |
626,120 |
$ |
73,229 |
$ |
— |
$ |
— |
$ |
699,349 |
|||||||||
Digital |
156,033 |
— |
— |
— |
156,033 |
||||||||||||||
Broadcasting |
331,066 |
667 |
— |
— |
331,733 |
||||||||||||||
Corporate |
(57,812) |
— |
— |
14,738 |
(43,074) |
||||||||||||||
Total |
$ |
1,055,407 |
$ |
73,896 |
$ |
— |
$ |
14,738 |
$ |
1,144,041 |
|||||||||
(a) Refer to Table No. 9 |
NON-GAAP FINANCIAL INFORMATION |
|||||||||||||||||||
Table No. 9 |
|||||||||||||||||||
"Operating cash flow", a non-GAAP measure, is defined as operating income plus depreciation, amortization and facility consolidation and asset impairment 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 condensed consolidated statements of income, follow: |
|||||||||||||||||||
Fourteen weeks ended Dec. 30, 2012: |
|||||||||||||||||||
Publishing |
Digital |
Broadcasting |
Corporate |
Consolidated |
|||||||||||||||
Operating cash flow |
$ |
176,186 |
$ |
48,358 |
$ |
164,829 |
$ |
(11,263) |
$ |
378,110 |
|||||||||
Less: |
|||||||||||||||||||
Depreciation |
(25,324) |
(4,441) |
(6,713) |
(3,948) |
(40,426) |
||||||||||||||
Amortization |
(4,240) |
(4,870) |
(181) |
— |
(9,291) |
||||||||||||||
Facility consolidation and asset impairment charges |
(17,960) |
(90,053) |
— |
— |
(108,013) |
||||||||||||||
Operating income as reported (GAAP basis) |
$ |
128,662 |
$ |
(51,006) |
$ |
157,935 |
$ |
(15,211) |
$ |
220,380 |
|||||||||
Thirteen weeks ended Dec. 25, 2011: |
|||||||||||||||||||
Publishing |
Digital |
Broadcasting |
Corporate |
Consolidated |
|||||||||||||||
Operating cash flow |
$ |
155,558 |
$ |
46,624 |
$ |
96,608 |
$ |
(24,816) |
$ |
273,974 |
|||||||||
Less: |
|||||||||||||||||||
Depreciation |
(25,325) |
(3,962) |
(6,703) |
(4,778) |
(40,768) |
||||||||||||||
Amortization |
(3,642) |
(3,930) |
(181) |
— |
(7,753) |
||||||||||||||
Facility consolidation and asset impairment charges |
(13,193) |
— |
— |
— |
(13,193) |
||||||||||||||
Operating income as reported (GAAP basis) |
$ |
113,398 |
$ |
38,732 |
$ |
89,724 |
$ |
(29,594) |
$ |
212,260 |
|||||||||
Fifty-three weeks ended Dec. 30, 2012: |
|||||||||||||||||||
Publishing |
Digital |
Broadcasting |
Corporate |
Consolidated |
|||||||||||||||
Operating cash flow |
$ |
516,394 |
$ |
165,690 |
$ |
471,815 |
$ |
(47,976) |
$ |
1,105,923 |
|||||||||
Less: |
|||||||||||||||||||
Depreciation |
(100,109) |
(16,934) |
(27,282) |
(16,421) |
(160,746) |
||||||||||||||
Amortization |
(15,565) |
(17,003) |
(725) |
— |
(33,293) |
||||||||||||||
Facility consolidation and asset impairment charges |
(32,076) |
(90,053) |
— |
— |
(122,129) |
||||||||||||||
Operating income as reported (GAAP basis) |
$ |
368,644 |
$ |
41,700 |
$ |
443,808 |
$ |
(64,397) |
$ |
789,755 |
|||||||||
Fifty-two weeks ended Dec. 25, 2011: |
|||||||||||||||||||
Publishing |
Digital |
Broadcasting |
Corporate |
Consolidated |
|||||||||||||||
Operating cash flow |
$ |
626,120 |
$ |
156,033 |
$ |
331,066 |
$ |
(57,812) |
$ |
1,055,407 |
|||||||||
Less: |
|||||||||||||||||||
Depreciation |
(106,268) |
(14,810) |
(28,201) |
(16,460) |
(165,739) |
||||||||||||||
Amortization |
(15,026) |
(15,883) |
(725) |
— |
(31,634) |
||||||||||||||
Facility consolidation and asset impairment charges |
(27,243) |
— |
— |
— |
(27,243) |
||||||||||||||
Operating income as reported (GAAP basis) |
$ |
477,583 |
$ |
125,340 |
$ |
302,140 |
$ |
(74,272) |
$ |
830,791 |
NON-GAAP FINANCIAL INFORMATION |
||||||||
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. |
||||||||
Free cash flow is a non-GAAP liquidity measure that is defined as "Net cash flow from operating activities" as reported on the statement of cash flows reduced by "Purchases 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 new and existing businesses, return cash to shareholders under the Company's capital program, repay indebtedness, add to the company's cash balance, or to 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. |
||||||||
Fourteen |
Fifty-three |
|||||||
Net cash flow from operating activities |
$ |
258,004 |
$ |
756,740 |
||||
Purchase of property, plant and equipment |
(28,864) |
(91,874) |
||||||
Payments for investments |
(1,501) |
(2,501) |
||||||
Proceeds from investments |
20,455 |
35,629 |
||||||
Free cash flow |
$ |
248,094 |
$ |
697,994 |
(Logo: http://photos.prnewswire.com/prnh/20120103/PH28972LOGO)
SOURCE
For investor inquiries, contact: Jeffrey Heinz, Vice President, Investor Relations, 703-854-6917, jheinz@gannett.com; For media inquiries, contact: Jeremy Gaines, Vice President, Corporate Communications, 703-854-6049, jmgaines@gannett.com