Revised Fourth-Quarter and Full-Year 2000 Earnings
ARLINGTON, VA – Gannett announced today that diluted earnings per share from continuing operations advanced 10 percent to a record $1.11 in the fourth quarter of 2000, from $1.01 in the year earlier quarter. After tax cash flow per diluted share (defined as after tax income from continuing operations plus depreciation and amortization expense, per diluted share) rose 19 percent to $1.52, up from $1.28 in the prior year quarter.
For the year 2000, reported diluted earnings per share from continuing operations, which excludes the gain from the sale of the assets of Multimedia Cablevision, Inc., increased 15 percent to a record $3.63. For 1999, diluted earnings per share from continuing operations, excluding a net non-operating after-tax gain from a television exchange, were $3.15. After tax cash flow per diluted share, which excludes a net non-operating gain in 1999, and discontinued operations in both years, increased 21 percent to $5.03 from $4.14 in 1999.
Average diluted shares outstanding in the quarter totaled 265,293,000 compared with 280,333,000 in 1999’s fourth quarter. Average diluted shares outstanding in 2000 were 268,118,000 compared to 281,608,000 in 1999. During 2000, the company repurchased approximately 14.7 million shares of common stock.
Results for the quarter include the operations of: News Communications & Media PLC acquired in June 2000; 19 daily newspapers along with numerous weekly and niche publications acquired from Thomson Newspapers Inc. in July 2000; and Central Newspapers, Inc. acquired in August 2000. Operating results exclude cable, which is reported as a discontinued operation.
Also, in 2000, Gannett’s fiscal year included 53 weeks compared with 52 weeks in 1999. The fourth quarter was comprised of 14 weeks compared with 13 weeks in the same quarter of 1999.
The company’s results for the quarter and the year also reflect new rules by the Financial Accounting Standards Board which change the way companies account for certain partnerships and joint ventures. In this report, and going forward, we will include the net results of two 50 percent owned joint operating agencies in other operating revenue as part of the newspaper segment results. In the past, each income statement line included our pro rata share of these operations’ results. We have restated all prior period results to reflect this change.
Operating revenues from continuing operations in the fourth quarter advanced 30 percent to $1,894,671,000, from $1,460,132,000 in the fourth quarter of 1999. If Gannett had owned the same group of properties in both quarters, revenues from continuing operations would have increased 6 percent. During the quarter, reported revenues from our United Kingdom operations were unfavorably impacted by the decline in the exchange rate for Sterling. If the exchange rate had remained constant year-over-year, pro forma revenues would have increased 7 percent. Operating cash flow (defined as operating income from continuing operations plus depreciation and amortization) advanced 19 percent in the fourth quarter to $693,573,000 from $584,369,000 in the year earlier interval.
For the year, operating revenues from continuing operations were 22 percent higher at $6,222,318,000. Operating cash flow increased 19 percent from $1,843,192,000 to $2,193,171,000. Operating income rose 16 percent to $1,817,256,000 while income from continuing operations, which excludes the $745 million after-tax gain from the sale of cable, advanced 10 percent to $971,940,000.
In a statement, the company said that 2000 was the ninth consecutive year of record revenues, profits and cash flow. Recent acquisitions boosted cash flow and after tax cash flow per share, while incremental interest expense and goodwill amortization associated with these properties tempered reported earnings per share. The newspaper segment posted record operating results for the quarter and the year, benefiting from solid advertising demand and contributions from the Newsquest properties to cash flow and earnings per share. Newsprint expense rose 46 percent for the quarter and 20 percent for the year as a result of higher usage related to recent acquisitions, and from higher prices, particularly in the fourth quarter. On a pro forma basis, newsprint expense would have risen 17 percent in the fourth quarter and 2 percent for the year. The television group achieved improved operating results in the quarter buoyed by strong political ad spending. For the full year, television results also benefited from Summer Olympics related advertising.
Operating cash flow from newspapers grew 21 percent in the fourth quarter to $576,223,000, and revenues rose 32 percent over the same period last year. If the same group of newspapers had been held in both quarters, pro forma advertising revenues would have increased 6 percent in the quarter, including an 8 percent gain in national, a 4 percent increase in classified and a 3 percent advance in local. Pro forma newspaper advertising volume advanced 5 percent for the quarter.
At USA TODAY, advertising revenues grew 6 percent in the fourth quarter. Paid advertising pages totaled 2,169 in the quarter compared with 2,203 in the same period of 1999. For the full year, paid advertising pages advanced 7 percent to 7,188 compared with 6,741 in 1999. Advertising revenues gained 12 percent in 2000 to $430 million.
Television revenues rose 13 percent to $233,213,000 from $206,198,000 in the fourth quarter of 2000, benefiting from strong election related ad spending. Operating cash flow advanced 8 percent to $131,838,000.
Gannett has 95 domestic newspaper Web sites, including USATODAY.com, the No. 1 newspaper site and a leading general interest news site on the Internet. The company also has Web sites in all of its 19 television markets. In addition, all of Newsquest’s newspapers have an Internet presence. For 2000, the company generated approximately $63 million in revenue from Internet activities.
On February 1, Douglas H. McCorkindale, Gannett’s CEO and President, added the title of Chairman, succeeding the former Chairman, John J. Curley, who retired.
Gannett Co., Inc. is an international news and information company that publishes 99 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 nearly 300 titles, including 15 daily newspapers. Gannett also operates 22 television stations in the United States.
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
Gannett Co., Inc.
Treasurer and Vice President/Investor Relations
703-284-6918
gmartore@gci1.gannett.com
CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)Quarter Ended % Inc
Dec. 31, 2000 Dec. 26, 1999 (Dec)Net Operating Revenues:
Newspaper advertising $ 1,226,457 $ 918,081 33.6
Newspaper circulation 328,431 251,615 30.5
Television 233,213 206,198 13.1
Other 106,570 84,238 26.5
------------- ------------- ----
Total 1,894,671 1,460,132 29.8Operating Expenses:
Cost of sales and operating
expenses, exclusive of
depreciation (1) 918,473 654,143 40.4
Selling, general and administrative
expenses, exclusive of
depreciation (1) 282,625 221,620 27.5
Depreciation 50,241 40,290 24.7
Amortization of intangible assets 59,260 34,047 74.1
------------- ------------- ----
Total 1,310,599 950,100 37.9
------------- ------------- ----
Operating income 584,072 510,032 14.5
------------- ------------- ----
Non-operating income (expense):
Interest expense (100,425) (37,701) 166.4
Other 4,451 (556) ---
------------- ------------- ----
Total (95,974) (38,257) 150.9
------------- ------------- ----
Income before income taxes 488,098 471,775 3.5
Provision for income taxes 193,200 187,750 2.9
------------- ------------- ----
Income from continuing operations 294,898 284,025 3.8
------------- ------------- ----
Discontinued Operations:
Income from the operation of
discontinued operations, net
of tax 10,561 ---
------------- ------------- ----
Net income $ 294,898 $ 294,586 0.1
============= ============= ====Earnings from continuing
operations per share-basic $1.12 $1.02 9.8
----- ----- ----
Earnings from discontinued
operations:
Discontinued operations per
share-basic 0.04 ---
----- ----- ----Net income per share-basic $1.12 $1.06 5.7
===== ===== ====Earnings from continuing
operations per share-diluted $1.11 $1.01 9.9
----- ----- ----
Earnings from discontinued
operations:
Discontinued operations per
share-diluted $0.04 ---
----- ----- ----Net income per share-diluted $1.11 $1.05 5.7
===== ===== ====
Dividends per share $0.22 $0.21 4.8
===== ===== ====CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)Fiscal Year Ended % Inc
Dec. 31, 2000 Dec. 26, 1999 (Dec)Net Operating Revenues:
Newspaper advertising $ 3,972,936 $ 3,115,250 27.5
Newspaper circulation 1,120,991 971,114 15.4
Television 788,767 728,642 8.3
Other 339,624 280,356 21.1
-------------- -------------- ----
Total 6,222,318 5,095,362 22.1Operating Expenses:
Cost of sales and operating
expenses, exclusive of
depreciation (1) 3,057,252 2,459,749 24.3
Selling, general and
administrative expenses,
exclusive of depreciation (1) 971,895 792,421 22.6
Depreciation 195,428 169,460 15.3
Amortization of intangible assets 180,487 110,631 63.1
-------------- -------------- ----
Total 4,405,062 3,532,261 24.7
-------------- -------------- ----
Operating income 1,817,256 1,563,101 16.3Non-operating income (expense):
Interest expense (219,228) (94,619) 131.7
Other 10,812 58,705 (81.6)
-------------- -------------- ----
Total (208,416) (35,914) ---
-------------- -------------- ----Income before income taxes 1,608,840 1,527,187 5.3
Provision for income taxes 636,900 607,800 4.8
-------------- -------------- ----
Income from continuing operations 971,940 919,387 5.7Discontinued Operations:
Income from the operation of
discontinued operations,
net of tax 2,437 38,541 (93.7)
Gain on sale of cable business,
net of tax 744,700 ---
-------------- -------------- ----
Net income $ 1,719,077 $ 957,928 79.5
============== ============== =====Earnings from continuing
operations per share-basic $3.65 $3.29 10.9
----- ----- ----
Earnings from discontinued
operations:
Discontinued operations
per share-basic $0.01 $0.14 (92.9)
----- ----- ----
Gain on sale of cable business
per share-basic $2.79 ---
----- ----- ----Net income per share-basic $6.45 $3.43 88.0
===== ===== ====Earnings from continuing
operations per share-diluted $3.63 $3.26 11.3
----- ----- ----
Earnings from discontinued
Discontinued operations
per share-diluted $0.01 $0.14 (92.9)
----- ----- ----
Gain on sale of cable business
per share-diluted $2.77 ---
----- ----- ----Net income per share-diluted $6.41 $3.40 88.5
===== ===== ====Dividends per share $0.86 $0.82 4.9
===== ===== ====NOTE: 1999 results include a net non-operating gain principally from the
exchange of KVUE-TV in Austin, Texas, for KXTV-TV in Sacramento,
California totaling $55 million pre-tax and $33 million after-tax.(1) Certain 1999 amounts have been reclassified to conform with the current
year presentation.Earnings Summary Excluding
1999 Net Non-operating Gain
and Discontinued OperationsFiscal Year Ended % Inc
Dec. 31, 2000 Dec. 26, 1999 (Dec)Operating income $ 1,817,256 $ 1,563,101 16.3
Non-operating income (expense):
Interest expense (219,228) (94,619) 131.7
Other 10,812 4,175 159.0
-------------- -------------- ----
Total (208,416) (90,444) 130.4
-------------- -------------- ----Income before income taxes 1,608,840 1,472,657 9.2
Provision for income taxes 636,900 586,050 8.7
-------------- -------------- ----
Income from continuing operations $ 971,940 $ 886,607 9.6
============== ============== ====
Earnings from continuing
operations per share-basic $3.65 $3.18 14.8
===== ===== ====Earnings from continuing
operations per share-diluted $3.63 $3.15 15.2
===== ===== ====BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollarsQuarter Ended % Inc
Dec. 31, 2000 Dec. 26, 1999 (Dec)Operating Revenues:
Newspaper publishing $1,661,458 $1,253,934 32.5
Television 233,213 206,198 13.1
---------- ---------- ----
Total $1,894,671 $1,460,132 29.8
========== ========== ====Operating Income (net of
depreciation and amortization):
Newspaper publishing $484,616 $418,812 15.7
Television 115,911 107,013 8.3
Corporate (16,455) (15,793) (4.2)
---------- ---------- ----
Total $584,072 $510,032 14.5
========== ========== ====Depreciation and Amortization:
Newspaper publishing $91,607 $56,551 62.0
Television 15,927 15,563 2.3
Corporate 1,967 2,223 (11.5)
---------- ---------- ----
Total $109,501 $74,337 47.3
========== ========== ====Operating Cash Flow:
Newspaper publishing $576,223 $475,363 21.2
Television 131,838 122,576 7.6
Corporate (14,488) (13,570) (6.8)
---------- ---------- ----
Total $693,573 $584,369 18.7
========== ========== ====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 dollarsFiscal Year Ended % Inc
Dec. 31, 2000 Dec. 26, 1999 (Dec)Operating Revenues:
Newspaper publishing $5,433,551 $4,366,720 24.4
Television 788,767 728,642 8.3
---------- ---------- ----
Total $6,222,318 $5,095,362 22.1
========== ========== ====Operating Income (net of
depreciation and amortization):
Newspaper publishing $1,522,350 $1,291,665 17.9
Television 359,955 337,537 6.6
Corporate (65,049) (66,101) 1.6
---------- ---------- ----
Total $1,817,256 $1,563,101 16.3
========== ========== ====Depreciation and Amortization:
Newspaper publishing $302,544 $207,720 45.6
Television 65,210 62,861 3.7
Corporate 8,161 9,510 (14.2)
---------- ---------- ----
Total $375,915 $280,091 34.2
========== ========== ====Operating Cash Flow:
Newspaper publishing $1,824,894 $1,499,385 21.7
Television 425,165 400,398 6.2
Corporate (56,888) (56,591) (0.5)
---------- ---------- ----
Total $2,193,171 $1,843,192 19.0
========== ========== ====NOTES:
Operating Cash Flow represents operating income for each of the company's
business segments plus related depreciation and amortization expense.