Exhibit 99-2
UNAUDITED INTERIM FINANCIAL STATEMENTS
CENTRAL NEWSPAPERS, INC.
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
JUNE 25, DECEMBER 26,
2000 1999
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(IN THOUSANDS)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $ 20,538 $ 27,643
Marketable securities..................................... 1,374 4,396
Accounts receivable (net of allowances of $3,066 and
$3,305)................................................ 81,819 100,221
Notes receivable.......................................... 34,341
Inventories............................................... 9,525 11,396
Deferred income taxes..................................... 6,859 6,533
Other current assets...................................... 9,165 7,215
-------- --------
Total current assets...................................... 129,280 191,745
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PROPERTY, PLANT AND EQUIPMENT:
Land...................................................... 18,835 18,898
Buildings and improvements................................ 138,068 136,951
Leasehold improvements.................................... 1,674 1,636
Machinery and equipment................................... 434,019 427,668
Construction in progress.................................. 21,695 3,270
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614,291 588,423
Less accumulated depreciation.......................... 341,234 322,838
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273,057 265,585
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OTHER ASSETS:
Land held for development................................. 5,249 5,229
Goodwill and other intangibles............................ 79,401 120,207
Investment in affiliates.................................. 81,227 9,802
Other..................................................... 67,944 55,698
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233,821 190,936
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TOTAL ASSETS................................................ $636,158 $648,266
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CENTRAL NEWSPAPERS, INC.
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
JUNE 25, DECEMBER 26,
2000 1999
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(IN THOUSANDS)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.......................................... $ 27,169 $ 32,421
Short-term bank debt and notes payable.................... 209,233 27,789
Accrued compensation...................................... 22,226 27,281
Dividends payable......................................... 4,974 5,360
Accrued expenses and other liabilities.................... 18,435 16,649
Federal and state income taxes............................ 2,293 12,803
Deferred revenue.......................................... 23,259 31,619
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Total current liabilities.............................. 307,589 153,922
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DEFERRED INCOME TAXES....................................... 29,489 29,626
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LONG-TERM DEBT.............................................. 200,000
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POSTRETIREMENT AND OTHER NONCURRENT LIABILITIES............. 99,742 97,097
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REDEEMABLE PREFERRED STOCK ISSUED BY SUBSIDIARY............. 18,920 18,920
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SHAREHOLDERS' EQUITY:
Preferred stock -- issuable in series:
Authorized -- 25,000,000 shares
Issued -- none
Class A common stock -- without par value:
Authorized -- 150,000,000 shares
Issued and outstanding -- 32,729,690 and 33,146,031
shares................................................ 46,902 38,953
Class B common stock -- without par value:
Authorized -- 130,000,000 shares
Issued and outstanding -- 55,336,010 and 55,356,010
shares................................................ 55 55
Retained earnings......................................... 135,944 110,250
Unamortized value of restricted stock..................... (2,788) (3,018)
Accumulated other comprehensive income.................... 305 2,461
-------- --------
180,418 148,701
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.................. $636,158 $648,266
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CENTRAL NEWSPAPERS, INC.
UNAUDITED CONSOLIDATED STATEMENT OF INCOME
13 Weeks Ended 26 Weeks Ended
June 25 June 27 June 25 June 27
2000 1999 2000 1999
------- ------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
OPERATING REVENUES:
Advertising........................................... $150,646 $150,148 $294,334 $293,318
Circulation........................................... 37,857 38,621 77,784 78,430
Other................................................. 11,035 13,359 28,336 23,415
-------- -------- -------- --------
199,538 202,128 400,454 395,163
-------- -------- -------- --------
OPERATING EXPENSES:
Compensation.......................................... 64,587 64,975 132,076 130,113
Newsprint and ink..................................... 26,962 26,009 53,790 55,394
Other operating costs................................. 52,121 53,619 109,238 103,622
Depreciation and amortization......................... 12,635 12,937 25,969 25,352
Work force reduction cost............................. 1,242 292 1,242 292
Gain on sale of subsidiary............................ (34,154)
-------- -------- -------- --------
157,547 157,832 288,161 314,773
-------- -------- -------- --------
OPERATING INCOME........................................ 41,991 44,296 112,293 80,390
OTHER INCOME (principally investment income)............ 1,727 1,652 5,184 3,604
OTHER EXPENSES (principally interest expense)........... (4,102) (3,639) (8,260) (7,826)
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES.............................. 39,616 42,309 109,217 76,168
PROVISION FOR INCOME TAXES.............................. 14,895 16,922 42,225 30,637
-------- -------- -------- --------
INCOME BEFORE MINORITY INTEREST AND EQUITY IN
AFFILIATES .......................................... 24,721 25,387 66,992 45,531
MINORITY INTEREST IN SUBSIDIARIES....................... (112) (267)
EQUITY IN NET EARNINGS (LOSS) OF AFFILIATES............. (5,173) (182) (6,918) (75)
-------- -------- -------- --------
NET INCOME.............................................. $ 19,548 $ 25,093 $ 60,074 $ 45,189
-------- -------- -------- --------
NET INCOME PER COMMON SHARE:
Basic................................................. $ 0.51 $ 0.61 $ 1.56 $ 1.11
Diluted............................................... $ 0.50 $ 0.60 $ 1.52 $ 1.07
DIVIDENDS DECLARED PER CLASS A COMMON SHARE $ 0.13 $ 0.12 $ 0.26 $ 0.24
AVERAGE COMMON SHARES OUTSTANDING:
(combined Class A and equivalent Class B shares)
Basic................................................. 38,216 40,901 38,419 40,827
Diluted............................................... 39,262 42,171 39,472 42,173
CENTRAL NEWSPAPERS, INC.
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
26 Weeks Ended
JUNE 25, JUNE 27,
2000 1999
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(IN THOUSANDS)
OPERATING ACTIVITIES:
Net income................................................ $ 60,074 $ 45,189
Items which did not use (provide) cash:
Depreciation and amortization........................... 25,969 25,352
Postretirement and pension benefits..................... 984 3,911
Gain on disposition of assets........................... (1,742)
Minority interest in earnings of subsidiaries........... 662 267
Equity loss in Affiliate................................ 6,918 75
Deferred income taxes................................... (2,341) 474
Amortization of restricted stock awards................. 855 859
Other................................................... (38,122) 378
Net proceeds from trading securities.................... 12,690
Net change in other current assets and liabilities...... 16,101 11,306
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Net cash provided by operating activities............ 71,100 98,759
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INVESTING ACTIVITIES:
Purchases of property, plant and equipment................ (33,651) (14,510)
Acquisitions.............................................. (17,681)
Other..................................................... (5,922) (2,756)
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Net cash used in investing activities................ (39,573) (34,947)
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FINANCING ACTIVITIES:
Cash dividends paid....................................... (9,964) (9,789)
Dividends paid to minority interest....................... (993) (2,060)
Proceeds from exercise of stock options................... 5,469 1,528
Repayments of debt........................................ (7,830) (45,017)
Repurchase of common stock................................ (25,314)
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Net cash used in financing activities................ (38,632) (55,338)
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(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS............ (7,105) 8,474
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD................ 27,643 24,774
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CASH AND CASH EQUIVALENTS, END OF PERIOD.................... $ 20,538 $ 33,248
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SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid......................................... $ 58,426 $ 26,090
Interest paid............................................. 7,795 7,343
Issuance of restricted stock, net......................... 625 3,056
CENTRAL NEWSPAPERS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
1. Central Newspapers, Inc. and its subsidiaries ("Central") is a
media and information company. Through its flagship newspapers, The Arizona
Republic and The Indianapolis Star, Central publishes the only major dailies
in the greater Phoenix metropolitan area and central Indiana, and also operates
those markets' leading local Internet portals, azcentral.com in Arizona and
indy.com in Indianapolis. Central also owns and operates several smaller
newspapers as well as other related media and information businesses.
In a Form 8-K filing dated June 29, 2000, Central reported that it had entered
into an agreement and plan of merger to be acquired by Gannett Co., Inc.
("Gannett"). On August 1, 2000, Gannett announced that it had completed its
cash tender offer for the outstanding Class A Common Stock and Class B Common
Stock of Central and had assumed control of Central's operations.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and revenues and expenses
as of and for the period ending with the financial reporting date. Actual
results could differ from those estimates.
2. The accompanying unaudited consolidated financial statements do not
include all of the information and disclosures that are normally included in
Form 10-K and the annual report to shareholders. These financial statements
should be read in conjunction with Central's audited consolidated financial
statements and related notes for the year ended December 26, 1999. The
accompanying consolidated financial statements have been prepared in accordance
with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The
consolidated statement of financial position at December 26, 1999, has been
derived from audited financial statements. In the opinion of Central's
management, the unaudited consolidated financial statements reflect all
adjustments which are necessary to present fairly, Central's financial
position, results of operations and cash flows for the interim periods
presented. All adjustments are of a normal recurring nature. Such statements
are not necessarily indicative of the results to be expected for the full year.
3. Basic EPS is computed based upon the weighted average number of common
shares outstanding in each year. The Class B common stock is included in the
computation as if converted to Class A common stock at a ratio of 10 shares of
Class B common stock to one share of Class A common stock. Diluted EPS includes
the effect of stock options granted under Central's Stock Compensation Plan
and Long Term Incentive Plan.
4. Certain amounts in the financial statements have been reclassified to
conform with the 2000 presentation.