Gannett Releases Fourth-Quarter 2001 and Full-Year Earnings
McLEAN, VA – Gannett Co., Inc. (NYSE: GCI) reported today that 2001 fourth-quarter diluted earnings per share from continuing operations were 93 cents compared with the record $1.11 for the fourth quarter of 2000. After-tax cash flow per diluted share (defined as after-tax income from continuing operations plus depreciation and amortization expense) was $1.33 in the 2001 fourth quarter versus $1.52 in 2000’s fourth quarter, a 12 percent decline.
For the full year 2001, reported diluted earnings per share from continuing operations were $3.12. For 2000, diluted earnings per share from continuing operations, which excludes the gain from the sale of the assets of Multimedia Cablevision, Inc., were a record $3.63. After-tax cash flow per diluted share from continuing operations was $4.78 in 2001 versus $5.03 in 2000, a 5 percent decline.
Average diluted shares outstanding in the fourth quarter totaled 267,352,000 compared with 265,293,000 in 2000’s fourth quarter. Average diluted shares outstanding for all of 2001 were 266,833,000 compared with 268,118,000 in 2000.
In 2001, Gannett’s fiscal year included 52 weeks compared with 53 weeks in 2000. The fourth quarter was comprised of thirteen weeks versus fourteen weeks in the same quarter of 2000. All of the results below reflect one less week in 2001 than 2000.
Total operating revenues for the company declined 14 percent to $1.62 billion in the fourth quarter of 2001 from $1.89 billion in the similar interval of 2000. Operating cash flow (defined as operating income plus depreciation and amortization) was $547.3 million in the fourth quarter compared with $693.6 million in the corresponding period in 2000. Net income totaled $248.4 million in the fourth quarter of 2001 versus $294.9 million in the same quarter of last year.
For the year, total operating revenues from continuing operations rose 2 percent to $6.34 billion from $6.22 billion for 2000. Operating cash flow declined 7 percent to $2.0 billion from $2.2 billion in 2000.
Commenting on the company’s results, Douglas H. McCorkindale, Chairman, President and CEO said, “Our strong financial discipline, seasoned management team and market diversity allowed Gannett to have the best earnings performance in our industry, despite a very
challenging environment. I am very proud of the contributions made by each Gannett employee in this very difficult year.”
McCorkindale also noted: “Fourth quarter and full year earnings declined from the record levels of 2000 as the advertising recession and weak economy that prevailed all year were further exacerbated by the tragic events of September 11. Our newspapers experienced weaker advertising revenues across the board and particularly in help-wanted classified. As well, our broadcast properties were impacted by the absence of strong political and Olympics related advertising that buoyed 2000’s results. Our Newsquest properties in the UK made a solid contribution to cash flow and earnings.”
NEWSPAPERS
Total newspaper segment operating cash flow, which includes USA TODAY and our UK properties, was $468.8 million in the fourth quarter of 2001, versus $576.2 million in 2000’s fourth quarter. Operating revenues were $1.44 billion in the fourth quarter. Newsprint expense declined 18 percent in the quarter reflecting substantially lower usage and reduced year-over-year prices. For the full year, newsprint expense rose 9 percent, while on a pro forma basis (as if newspapers owned at the end of 2001 were owned for all of both years), it would have declined 2 percent.
At USA TODAY, paid pages declined 30 percent to 1,512 in the fourth quarter compared with 2,169 in 2000’s fourth quarter. Advertising revenues declined 29 percent. USA TODAY’s results in the quarter continued to be impacted by the diminished demand for travel-related advertising in the aftermath of September 11, the advertising recession and fewer business days in the quarter. For the full year, USA TODAY’s advertising revenues fell 22 percent to $334 million and paid pages totaled 5,481, a 24 percent decline.
TELEVISION
In the fourth quarter of 2001, television revenues declined 23 percent to $180.1 million, down from $233.2 million in the fourth quarter of 2000. The revenue decline reflected the weak advertising environment and the difficult comparison with 2000’s fourth quarter, which benefited from strong election-related ad spending, and an extra week. Television operating cash flow decreased to $91.2 million from $131.8 million in 2000’s fourth quarter.
INTERNET
At the end of the year, Gannett had more than 100 domestic publishing-related Web sites, including USATODAY.com, one of the most popular newspaper sites on the Web. The
company also has Web sites in all of its 19 television markets. In December, Gannett’s consolidated domestic Internet audience share was 9 million unique visitors reaching 8 percent of the Internet audience according to Nielsen/Net Ratings. For the year, the company generated approximately $71 million in revenues from Internet activities, up from 2000’s $63 million.
At the beginning of 2002, Gannett adopted the Statement of Financial Accounting Standards (SFAS) No. 142, which changes the accounting rules for goodwill and intangible assets. If these new rules had been in effect for the fourth quarter of 2001, amortization expense would have been $59.4 million lower and diluted earnings per share would have been 21 cents higher, or $1.14.
Had these new accounting rules for goodwill and intangible assets been in effect for all of 2001, diluted earnings per share would have been 80 cents higher, or $3.92. Included in this press release are schedules detailing the impact of SFAS 142 on the company’s earnings, by quarter, for 2001 and 2000.
Gannett Co., Inc. (NYSE:GCI) is an international news and information company that publishes 95 daily newspapers in the USA, including USA TODAY, the nation’s largest-selling daily newspaper. The company also owns in excess of 300 non-daily publications in the USA and USA WEEKEND, a weekly newspaper magazine. In the United Kingdom, Gannett subsidiary Newsquest plc publishes more than 300 titles, including 15 daily newspapers. Gannett also operates 22 television stations in the United States and is an Internet leader with sites sponsored by most of its TV stations and newspapers including USATODAY.com.
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 SEC reports, including the company’s annual report on Form 10-K and quarterly reports on Form 10-Q. Any forward-looking statements in this press release should be evaluated in light of these important risk factors.
Gannett is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this press release by wire services, Internet service providers or other media.
Contact:
Gracia Martore
Senior Vice President of Finance and Treasurer
703-854-6918
CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Thirteen weeks Fourteen weeks
ended ended % Inc
Dec. 30, 2001 Dec. 31, 2000 (Dec)
Net Operating Revenues:
Newspaper advertising $ 1,052,895 $ 1,226,457 (14.2)
Newspaper circulation 307,939 328,431 (6.2)
Television 180,118 233,213 (22.8)
Other 83,185 106,570 (21.9)
------------- ------------- ------
Total 1,624,137 1,894,671 (14.3)
------------- ------------- ------
Operating Expenses:
Cost of sales and operating
expenses, exclusive of
depreciation 831,745 918,473 (9.4)
Selling, general and
administrative expenses,
exclusive of depreciation 245,102 282,625 (13.3)
Depreciation 47,200 50,241 (6.1)
Amortization of intangible assets 61,254 59,260 3.4
------------- ------------- ------
Total 1,185,301 1,310,599 (9.6)
------------- ------------- ------
Operating income 438,836 584,072 (24.9)
------------- ------------- ------
Non-operating income (expense):
Interest expense (31,084) (100,425) (69.0)
Other 1,110 4,451 (75.1)
------------- ------------- ------
Total (29,974) (95,974) (68.8)
------------- ------------- ------
Income before income taxes 408,862 488,098 (16.2)
Provision for income taxes 160,500 193,200 (16.9)
------------- ------------- ------
Net income $ 248,362 $ 294,898 (15.8)
============= ============= ======
Net income per share-basic $0.94 $1.12 (16.1)
===== ===== ======
Net income per share-diluted $0.93 $1.11 (16.2)
===== ===== ======
Dividends per share $0.23 $0.22 4.5
===== ===== ======
CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Fifty-two weeks Fifty-three weeks
ended ended % Inc
Dec. 30, 2001 Dec. 31, 2000 (Dec)
Net Operating Revenues:
Newspaper advertising $ 4,119,773 $ 3,972,936 3.7
Newspaper circulation 1,233,106 1,120,991 10.0
Television 662,652 788,767 (16.0)
Other 328,714 339,624 (3.2)
------------- ------------- ------
Total 6,344,245 6,222,318 2.0
------------- ------------- ------
Operating Expenses:
Cost of sales and operating
expenses, exclusive of
depreciation 3,320,161 3,057,252 8.6
Selling, general and
administrative expenses,
exclusive of depreciation 990,472 971,895 1.9
Depreciation 202,456 195,428 3.6
Amortization of intangible assets 241,321 180,487 33.7
------------- ------------- ------
Total 4,754,410 4,405,062 7.9
------------- ------------- ------
Operating income 1,589,835 1,817,256 (12.5)
------------- ------------- ------
Non-operating income (expense):
Interest expense (221,854) (219,228) 1.2
Other 2,616 10,812 (75.8)
------------- ------------- ------
Total (219,238) (208,416) 5.2
------------- ------------- ------
Income before income taxes 1,370,597 1,608,840 (14.8)
Provision for income taxes 539,400 636,900 (15.3)
------------- ------------- ------
Income from continuing operations 831,197 971,940 (14.5)
------------- ------------- ------
Discontinued Operations:
Income from the operation of
discontinued operations, net
of tax 2,437 --
Gain on sale of cable business,
net of tax 744,700 --
------------- ------------- ------
Net income $ 831,197 $ 1,719,077 (51.6)
============= ============= ======
Earnings from continuing
operations per share-basic $3.14 $3.65 (14.0)
Earnings from discontinued
operations:
Discontinued operations per
share-basic $0.01 --
Gain on sale of cable business
per share-basic $2.79 --
----- ----- -------
Net income per share-basic $3.14 $6.45 (51.3)
===== ===== =======
Earnings from continuing
operations per share-diluted $3.12 $3.63 (14.0)
Earnings from discontinued
operations:
Discontinued operations per
share-diluted $0.01 --
Gain on sale of cable business
per share-diluted $2.77 --
----- ----- -------
Net income per share-diluted $3.12 $6.41 (51.3)
===== ===== =======
Dividends per share $0.90 $0.86 4.7
===== ===== =======
Earnings Summary Excluding
2000 Discontinued Operations
Fifty-two weeks Fifty-three weeks
ended ended % Inc
Dec. 30, 2001 Dec. 31, 2000 (Dec)
------------- ------------- -------
Operating income $ 1,589,835 $ 1,817,256 (12.5)
------------- ------------- -------
Non-operating income (expense):
Interest expense (221,854) (219,228) 1.2
Other 2,616 10,812 (75.8)
------------- ------------- -------
Total (219,238) (208,416) 5.2
------------- ------------- -------
Income before income taxes 1,370,597 1,608,840 (14.8)
Provision for income taxes 539,400 636,900 (15.3)
------------- ------------- -------
Income from continuing operations $ 831,197 $ 971,940 (14.5)
============= ============= =======
Earnings from continuing ----- ----- -------
operations per share-basic $3.14 $3.65 (14.0)
===== ===== =======
Earnings from continuing ----- ----- -------
operations per share-diluted $3.12 $3.63 (14.0)
===== ===== =======
BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Thirteen weeks Fourteen weeks
ended ended % Inc
Dec. 30, 2001 Dec. 31, 2000 (Dec)
Operating Revenues:
Newspaper publishing $ 1,444,019 $ 1,661,458 (13.1)
Television 180,118 233,213 (22.8)
------------- ------------- -----
Total $ 1,624,137 $ 1,894,671 (14.3)
============= ============= =====
Operating Income (net of
depreciation and amortization):
Newspaper publishing $ 379,483 $ 484,616 (21.7)
Television 74,771 115,911 (35.5)
Corporate (15,418) (16,455) 6.3
------------- ------------- -----
Total $ 438,836 $ 584,072 (24.9)
============= ============= =====
Depreciation and Amortization:
Newspaper publishing $ 89,363 $ 91,607 (2.4)
Television 16,458 15,927 3.3
Corporate 2,633 1,967 33.9
------------- ------------- -----
Total $ 108,454 $ 109,501 (1.0)
============= ============= =====
Operating Cash Flow:
Newspaper publishing $ 468,846 $ 576,223 (18.6)
Television 91,229 131,838 (30.8)
Corporate (12,785) (14,488) 11.8
------------- ------------- -----
Total $ 547,290 $ 693,573 (21.1)
============= ============= =====
NOTE:
Operating Cash Flow represents operating income for each of the company's
business segments plus related depreciation and amortization expense.
BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Fifty-two weeks Fifty-three weeks
ended ended % Inc
Dec. 30, 2001 Dec. 31, 2000 (Dec)
Operating Revenues:
Newspaper publishing $ 5,681,593 $ 5,433,551 4.6
Television 662,652 788,767 (16.0)
------------- ------------- -----
Total $ 6,344,245 $ 6,222,318 2.0
============= ============= =====
Operating Income (net of
depreciation and amortization):
Newspaper publishing $ 1,400,609 $ 1,522,350 (8.0)
Television 249,783 359,955 (30.6)
Corporate (60,557) (65,049) 6.9
------------- ------------- -----
Total $ 1,589,835 $ 1,817,256 (12.5)
============= ============= =====
Depreciation and Amortization:
Newspaper publishing $ 369,044 $ 302,544 22.0
Television 67,639 65,210 3.7
Corporate 7,094 8,161 (13.1)
------------- ------------- -----
Total $ 443,777 $ 375,915 18.1
============= ============= =====
Operating Cash Flow:
Newspaper publishing $ 1,769,653 $ 1,824,894 (3.0)
Television 317,422 425,165 (25.3)
Corporate (53,463) (56,888) 6.0
------------- ------------- -----
Total $ 2,033,612 $ 2,193,171 (7.3)
============= ============= =====
NOTE:
Operating Cash Flow represents operating income for each of the company's
business segments plus related depreciation and amortization expense.
Pro Forma Consolidated Statements of Income*
Gannett Co., Inc. and Subsidiaries
Fiscal year ended December 31, 2001
Unaudited, in thousands of dollars (except per share amounts)
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
---------- ---------- ---------- ---------- ----------
Net operating
revenues $1,574,948 $1,627,232 $1,517,928 $1,624,137 $6,344,245
---------- ---------- ---------- ---------- ----------
Operating expenses:
Cost of sales and
operating expenses,
exclusive of
depreciation 839,547 824,030 824,839 831,745 3,320,161
Selling, general
and administrative
expenses, exclusive
of depreciation 254,738 246,324 244,308 245,102 990,472
Depreciation 53,281 51,059 50,916 47,200 202,456
Amortization of
intangible assets 1,833 1,833 1,833 1,834 7,333
---------- ---------- ---------- ---------- ----------
Total 1,149,399 1,123,246 1,121,896 1,125,881 4,520,422
---------- ---------- ---------- ---------- ----------
Operating income 425,549 503,986 396,032 498,256 1,823,823
---------- ---------- ---------- ---------- ----------
Non-operating
(expense) income:
Interest expense (80,442) (61,728) (48,600) (31,084) (221,854)
Other 448 528 530 1,110 2,616
---------- ---------- ---------- ---------- ----------
Total (79,994) (61,200) (48,070) (29,974) (219,238)
---------- ---------- ---------- ---------- ----------
Income before
income taxes 345,555 442,786 347,962 468,282 1,604,585
---------- ---------- ---------- ---------- ----------
Provision for
income taxes 120,100 153,900 120,900 162,800 557,700
---------- ---------- ---------- ---------- ----------
Net income $225,455 $288,886 $227,062 $305,482 $1,046,885
========== ========== ========== ========== ==========
Basic earnings
per share $0.85 $1.09 $0.86 $1.15 $3.95
Diluted earnings
per share $0.85 $1.08 $0.85 $1.14 $3.92
* As if Statement of Financial Accounting Standards No. 142 (SFAS No. 142)
had been adopted prior to 2001.
Pro Forma Consolidated Statements of Income*
Gannett Co., Inc. and Subsidiaries
Fiscal year ended December 31, 2000
Unaudited, in thousands of dollars (except per share amounts)
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
---------- ---------- ---------- ---------- ----------
Net operating
revenues $1,321,320 $1,447,807 $1,558,520 $1,894,671 $6,222,318
---------- ---------- ---------- ---------- ----------
Operating expenses:
Cost of sales and
operating expenses,
exclusive of
depreciation 667,486 683,084 788,209 918,473 3,057,252
Selling, general
and administrative
expenses, exclusive
of depreciation 215,942 227,593 245,735 282,625 971,895
Depreciation 46,608 47,070 51,509 50,241 195,428
Amortization of
intangible assets - - 1,222 1,833 3,055
---------- ---------- ---------- ---------- ----------
Total 930,036 957,747 1,086,675 1,253,172 4,227,630
---------- ---------- ---------- ---------- ----------
Operating income 391,284 490,060 471,845 641,499 1,994,688
---------- ---------- ---------- ---------- ----------
Non-operating
(expense) income:
Interest expense (20,175) (22,666) (75,962) (100,425) (219,228)
Other (1,326) 7,947 (260) 4,451 10,812
---------- ---------- ---------- ---------- ----------
Total (21,501) (14,719) (76,222) (95,974) (208,416)
---------- ---------- ---------- ---------- ----------
Income before
income taxes 369,783 475,341 395,623 545,525 1,786,272
---------- ---------- ---------- ---------- ----------
Provision for
income taxes 135,500 174,000 145,000 199,500 654,000
---------- ---------- ---------- ---------- ----------
Income from
continuing
operations 234,283 301,341 250,623 346,025 1,132,272
---------- ---------- ---------- ---------- ----------
Discontinued
operations 747,137 - - - 747,137
---------- ---------- ---------- ---------- ----------
Net income $981,420 $301,341 $250,623 $346,025 $1,879,409
========== ========== ========== ========== ==========
Basic earnings
per share from
continuing
operations** $0.86 $1.14 $0.95 $1.31 $4.25
Basic earnings
per share** $3.58 $1.14 $0.95 $1.31 $7.05
Diluted earnings
per share from
continuing
operations $0.85 $1.13 $0.94 $1.30 $4.22
Diluted earnings
per share** $3.55 $1.13 $0.94 $1.30 $7.01
* As if Statement of Financial Accounting Standards No. 142 (SFAS No. 142)
had been adopted prior to 2000.
** As a result of rounding and share repurchases made during the year, the
total of the four quarters' earnings per share does not equal the earnings
per share for the year.