Exhibit 99.1
Thursday, February 6, 2003
Gannett Co., Inc. Reports Fourth Quarter
And 2002 Full-Year Results
McLEAN, VA Gannett Co., Inc. (NYSE: GCI) reported today
that 2002 fourth quarter earnings per diluted share, on a GAAP
(generally accepted accounting principles) basis, were $1.29 versus
93 cents per share for the fourth quarter of 2001, a 39 percent
increase. For the full year 2002, diluted earnings per share, on a
GAAP basis, were $4.31, a 38 percent increase over the $3.12 for
2001.
Net income increased 40 percent to $347 million in the fourth
quarter of 2002 versus $248.4 million in the same quarter of last
year. Operating cash flow (defined as operating income plus
depreciation and amortization) rose 14 percent to $624.6 million in
2002's fourth quarter from $547.3 million in the year earlier
quarter, reflecting very strong television results and another
quarter of improved newspaper performance. Total operating
revenues for the company increased 7 percent to $1.73 billion in
the quarter from $1.61 billion in the similar interval in 2001.
For the full year net income rose 40 percent to $1.16 billion from
$831.2 million in 2001. Operating cash flow rose 6 percent to $2.1
billion from $2.0 billion in 2001. Operating revenues increased 2
percent to $6.42 billion for the year.
If SFAS No. 142 (which changes the accounting rules for
goodwill and intangible assets) had been in effect for all of 2001,
defined as "comparable basis," earnings per diluted share would
have increased 13 percent for the quarter from $1.14 in 2001 to
$1.29 in 2002. For the full year, earnings per diluted share would
have risen 10 percent to $4.31 from $3.92. On a comparable basis,
operating income for the fourth quarter would have been up 14
percent from last year's $498.3 million. Net income would have
increased 14 percent from $305.5 million to $347 million in the
fourth quarter and 11 percent, from $1 billion to $1.2 billion, for
the full year on a comparable basis. Included in the press release
are "comparable basis" schedules detailing fourth quarter and full
year results for 2001 as if SFAS No. 142 had been adopted at the
beginning of 2001.
Average diluted shares outstanding in the fourth quarter
totaled 269,799,000 compared with 267,352,000 in 2001's fourth
quarter. Average diluted shares outstanding for all of 2002 were
269,286,000 versus 266,833,000 in 2001.
Commenting on the company's performance, Douglas H.
McCorkindale, Chairman, President and CEO, said: "We are very
pleased to report another quarter of strong year-over-year earnings
growth led by robust television results and another solid
performance by our newspaper operations. Our television properties
achieved strong year-over-year gains propelled by record political
advertising spending and a continued favorable advertising
environment for our highly rated television stations. Our
newspaper operations reported their best quarter of revenue and
operating cash flow gains all year. Newsprint expense declined 13
percent for the quarter. In the UK, our Newsquest properties
achieved their strongest advertising revenue gains all year in the
fourth quarter and made a strong contribution to earnings."
NEWSPAPERS
Total newspaper segment operating cash flow increased 8
percent to $506.3 million in the fourth quarter, versus $468.8
million in the same quarter of 2001. Operating revenues were $1.5
billion for the quarter. Assuming Gannett had owned the same group
of newspapers in both the fourth quarter of this year and last
year, advertising revenues would have risen 4 percent. On the same
basis, local advertising revenues were 3 percent higher, classified
increased 6 percent and national revenues rose 5 percent.
Newspaper ad volume increased 4 percent. Reported newsprint
expense declined in the quarter, reflecting substantially lower
year-over-year prices but a small uptick in consumption.
At USA TODAY, advertising revenues increased 2 percent in the
fourth quarter, the first year-over-year gain in advertising
revenues since the fourth quarter of 2000. Paid advertising pages
totaled 1,438 compared with 1,512 in the same quarter of 2001. For
the full year, USA TODAY's advertising revenues declined 6 percent
to $314 million and paid pages totaled 4,869, an 11 percent
decline.
TELEVISION
In the fourth quarter of 2002, television operating cash flow
jumped 41 percent to $128.7 million from $91.2 million in the year
earlier quarter. Television revenues rose 27 percent to $228.8
million reflecting record political advertising and solid growth in
other categories.
At the end of the year, Gannett had more than 100 domestic
publishing Web sites, including USATODAY.com, one of the most
popular newspaper sites on the Web. The company also had Web sites
in all of its 19 television markets. In December, Gannett's
consolidated domestic Internet audience share was 11.8 million
unique visitors reaching about 9 percent of the Internet audience
according to Nielsen//Net Ratings. Newsquest is also an Internet
leader in the United Kingdom where its network of Web sites
attracts more than 14.3 million monthly page impressions from more
than 1.1 million unique users. For the year, the company generated
approximately $91 million of revenues from Internet activities,
about a 27 percent increase over last year.
All references in this release to "comparable" financial
results and "operating cash flow" are to non-GAAP financial
measures. Management believes that this use allows management and
investors to analyze and compare the Company's results in a more
meaningful and consistent manner.
Gannett Co., Inc. is a leading international news and
information company that publishes 94 daily newspapers in the USA,
including USA TODAY, the nation's largest-selling daily newspaper.
The company also owns in excess of 400 non-daily publications in
the USA and USA WEEKEND, a weekly newspaper magazine. Gannett
subsidiary Newsquest is the United Kingdom's second largest
regional newspaper company. Newsquest publishes more than 300
titles, including 15 daily newspapers, and a network of prize-
winning Web sites. 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, one
of the most popular news sites on the web.
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.
For investor inquiries, contact:
Gracia Martore
Senior Vice President and Chief Financial Officer
703-854-6918
gmartore@gannett.com
CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Thirteen weeks ended % Inc
Dec. 29, 2002 Dec. 30, 2001 (Dec)
Net Operating Revenues:
Newspaper advertising $ 1,100,021 $ 1,052,895 4.5
Newspaper circulation 296,192 296,959 (0.3)
Television 228,779 180,118 27.0
Other 101,230 83,185 21.7
------------- ------------- ------
Total 1,726,222 1,613,157 7.0
------------- ------------- ------
Operating Expenses:
Cost of sales and operating
expenses, exclusive of
depreciation 838,750 820,765 2.2
Selling, general and
administrative expenses,
exclusive of depreciation 262,893 245,102 7.3
Depreciation 53,814 47,200 14.0
Amortization of intangible
assets 1,830 61,254 (97.0)
------------- ------------- ------
Total 1,157,287 1,174,321 (1.5)
------------- ------------- ------
Operating income 568,935 438,836 29.6
------------- ------------- ------
Non-operating income
(expense):
Interest expense (36,795) (31,084) 18.4
Other (7,034) 1,110 (733.7)
------------- ------------- ------
Total (43,829) (29,974) 46.2
------------- ------------- ------
Income before income taxes 525,106 408,862 28.4
Provision for income taxes 178,100 160,500 11.0
------------- ------------- ------
Net income $ 347,006 $ 248,362 39.7
============= ============= ======
Net income per share-basic $1.30 $0.94 38.3
===== ===== ======
Net income per share-diluted $1.29 $0.93 38.7
===== ===== ======
Dividends per share $0.24 $0.23 4.3
===== ===== ======
Note: Certain immaterial charges relating to sales promotions have
been reclassified from cost of sales and operating expenses to
a reduction of circulation revenue; the reclassification had no
effect on operating income or net income.
CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Fifty-two weeks ended % Inc
Dec. 29, 2002 Dec. 30, 2001 (Dec)
Net Operating Revenues:
Newspaper advertising $ 4,122,685 $ 4,119,773 0.1
Newspaper circulation 1,182,103 1,188,467 (0.5)
Television 771,303 662,652 16.4
Other 346,158 328,714 5.3
------------- ------------- ------
Total 6,422,249 6,299,606 1.9
------------- ------------- ------
Operating Expenses:
Cost of sales and operating
expenses, exclusive of
depreciation 3,254,003 3,275,522 (0.7)
Selling, general and
administrative expenses,
exclusive of depreciation 1,019,493 990,472 2.9
Depreciation 215,117 202,456 6.3
Amortization of intangible
assets 7,327 241,321 (97.0)
------------- ------------- ------
Total 4,495,940 4,709,771 (4.5)
------------- ------------- ------
Operating income 1,926,309 1,589,835 21.2
------------- ------------- ------
Non-operating income
(expense):
Interest expense (146,359) (221,854) (34.0)
Other (15,422) 2,616 (689.5)
------------- ------------- ------
Total (161,781) (219,238) (26.2)
------------- ------------- ------
Income before income taxes 1,764,528 1,370,597 28.7
Provision for income taxes 604,400 539,400 12.1
------------- ------------- ------
Net income $ 1,160,128 $ 831,197 39.6
============= ============= ======
Net income per share-basic $4.35 $3.14 38.5
===== ===== ======
Net income per share-diluted $4.31 $3.12 38.1
===== ===== ======
Dividends per share $0.94 $0.90 4.4
===== ===== ======
Note: Certain immaterial charges relating to sales promotions have
been reclassified from cost of sales and operating expenses to
a reduction of circulation revenue; the reclassification had no
effect on operating income or net income.
BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Thirteen weeks ended % Inc
Dec. 29, 2002 Dec. 30, 2001 (Dec)
Net Operating Revenues:
Newspaper publishing $ 1,497,443 $ 1,433,039 4.5
Television 228,779 180,118 27.0
------------- ------------- ------
Total $ 1,726,222 $ 1,613,157 7.0
============= ============= ======
Operating Income (net
of depreciation and
amortization):
Newspaper publishing $ 461,438 $ 379,483 21.6
Television 122,394 74,771 63.7
Corporate (14,897) (15,418) 3.4
------------- ------------- ------
Total $ 568,935 $ 438,836 29.6
============= ============= ======
Depreciation and
Amortization:
Newspaper publishing $ 44,867 $ 89,363 (49.8)
Television 6,281 16,458 (61.8)
Corporate 4,496 2,633 70.8
------------- ------------- ------
Total $ 55,644 $ 108,454 (48.7)
============= ============= ======
Operating Cash Flow (1):
Newspaper publishing $ 506,305 $ 468,846 8.0
Television 128,675 91,229 41.0
Corporate (10,401) (12,785) 18.6
------------- ------------- ------
Total $ 624,579 $ 547,290 14.1
============= ============= ======
After-tax Cash Flow (2):
Total $ 402,650 $ 356,816 12.8
============= ============= ======
(1) Operating Cash Flow represents operating income for each of the
company's business segments plus related depreciation and
amortization expense.
(2) After-tax Cash Flow represents net income after tax plus
depreciation and amortization expense.
Note: Certain immaterial charges relating to sales promotions have
been reclassified from cost of sales and operating expenses to
a reduction of circulation revenue; the reclassification had no
effect on operating income or net income.
BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Fifty-two weeks ended % Inc
Dec. 29, 2002 Dec. 30, 2001 (Dec)
Net Operating Revenues:
Newspaper publishing $ 5,650,946 $ 5,636,954 0.2
Television 771,303 662,652 16.4
------------- ------------- ------
Total $ 6,422,249 $ 6,299,606 1.9
============= ============= ======
Operating Income (net
of depreciation and
amortization):
Newspaper publishing $ 1,615,664 $ 1,400,609 15.4
Television 371,132 249,783 48.6
Corporate (60,487) (60,557) 0.1
------------- ------------- ------
Total $ 1,926,309 $ 1,589,835 21.2
============= ============= ======
Depreciation and
Amortization:
Newspaper publishing $ 181,669 $ 369,044 (50.8)
Television 25,429 67,639 (62.4)
Corporate 15,346 7,094 116.3
------------- ------------- ------
Total $ 222,444 $ 443,777 (49.9)
============= ============= ======
Operating Cash Flow (1):
Newspaper publishing $ 1,797,333 $ 1,769,653 1.6
Television 396,561 317,422 24.9
Corporate (45,141) (53,463) 15.6
------------- ------------- ------
Total $ 2,148,753 $ 2,033,612 5.7
============= ============= ======
After-tax Cash Flow (2):
Total $ 1,382,572 $ 1,274,974 8.4
============= ============= ======
(1) Operating Cash Flow represents operating income for each of the
company's business segments plus related depreciation and
amortization expense.
(2) After-tax Cash Flow represents net income after tax plus
depreciation and amortization expense.
Note: Certain immaterial charges relating to sales promotions have
been reclassified from cost of sales and operating expenses to
a reduction of circulation revenue; the reclassification had no
effect on operating income or net income.
COMPARABLE BASIS CONSOLIDATED STATEMENTS OF INCOME (1)
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Thirteen weeks ended % Inc
Dec. 29, 2002 Dec. 30, 2001 (Dec)
Net Operating Revenues:
Newspaper advertising $ 1,100,021 $ 1,052,895 4.5
Newspaper circulation 296,192 296,959 (0.3)
Television 228,779 180,118 27.0
Other 101,230 83,185 21.7
------------- ------------- ------
Total 1,726,222 1,613,157 7.0
------------- ------------- ------
Operating Expenses:
Cost of sales and operating
expenses, exclusive of
depreciation 838,750 820,765 2.2
Selling, general and
administrative expenses,
exclusive of depreciation 262,893 245,102 7.3
Depreciation 53,814 47,200 14.0
Amortization of intangible
assets 1,830 1,834 (0.2)
------------- ------------- ------
Total 1,157,287 1,114,901 3.8
------------- ------------- ------
Operating income 568,935 498,256 14.2
------------- ------------- ------
Non-operating income
(expense):
Interest expense (36,795) (31,084) 18.4
Other (7,034) 1,110 (733.7)
------------- ------------- ------
Total (43,829) (29,974) 46.2
------------- ------------- ------
Income before income taxes 525,106 468,282 12.1
Provision for income taxes 178,100 162,800 9.4
------------- ------------- ------
Net income $ 347,006 $ 305,482 13.6
============= ============= ======
Net income per share-basic $1.30 $1.15 13.0
===== ===== ======
Net income per share-diluted $1.29 $1.14 13.2
===== ===== ======
Dividends per share $0.24 $0.23 4.3
===== ===== ======
(1) As if Statement of Financial Accounting Standards No. 142
(SFAS No. 142) had been adopted at the beginning of 2001.
Note: Certain immaterial charges relating to sales promotions have
been reclassified from cost of sales and operating expenses to
a reduction of circulation revenue; the reclassification had no
effect on operating income or net income.
COMPARABLE BASIS CONSOLIDATED STATEMENTS OF INCOME (1)
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Fifty-two weeks ended % Inc
Dec. 29, 2002 Dec. 30, 2001 (Dec)
Net Operating Revenues:
Newspaper advertising $ 4,122,685 $ 4,119,773 0.1
Newspaper circulation 1,182,103 1,188,467 (0.5)
Television 771,303 662,652 16.4
Other 346,158 328,714 5.3
------------- ------------- ------
Total 6,422,249 6,299,606 1.9
------------- ------------- ------
Operating Expenses:
Cost of sales and operating
expenses, exclusive of
depreciation 3,254,003 3,275,522 (0.7)
Selling, general and
administrative expenses,
exclusive of depreciation 1,019,493 990,472 2.9
Depreciation 215,117 202,456 6.3
Amortization of intangible
assets 7,327 7,333 (0.1)
------------- ------------- ------
Total 4,495,940 4,475,783 0.5
------------- ------------- ------
Operating income 1,926,309 1,823,823 5.6
------------- ------------- ------
Non-operating income
(expense):
Interest expense (146,359) (221,854) (34.0)
Other (15,422) 2,616 (689.5)
------------- ------------- ------
Total (161,781) (219,238) (26.2)
------------- ------------- ------
Income before income taxes 1,764,528 1,604,585 10.0
Provision for income taxes 604,400 557,700 8.4
------------- ------------- ------
Net income $ 1,160,128 $ 1,046,885 10.8
============= ============= ======
Net income per share-basic $4.35 $3.95 10.1
===== ===== ======
Net income per share-diluted $4.31 $3.92 9.9
===== ===== ======
Dividends per share $0.94 $0.90 4.4
===== ===== ======
(1) As if Statement of Financial Accounting Standards No. 142
(SFAS No. 142) had been adopted at the beginning of 2001.
Note: Certain immaterial charges relating to sales promotions have
been reclassified from cost of sales and operating expenses to a
reduction of circulation revenue; the reclassification had no
effect on operating income or net income.
COMPARABLE BASIS BUSINESS SEGMENT INFORMATION (1)
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Thirteen weeks ended % Inc
Dec. 29, 2002 Dec. 30, 2001 (Dec)
Net Operating Revenues:
Newspaper publishing $ 1,497,443 $ 1,433,039 4.5
Television 228,779 180,118 27.0
------------- ------------- ------
Total $ 1,726,222 $ 1,613,157 7.0
============= ============= ======
Operating Income (net
of depreciation and
amortization):
Newspaper publishing $ 461,438 $ 428,311 7.7
Television 122,394 85,363 43.4
Corporate (14,897) (15,418) 3.4
------------- ------------- ------
Total $ 568,935 $ 498,256 14.2
============= ============= ======
Depreciation and
Amortization:
Newspaper publishing $ 44,867 $ 40,535 10.7
Television 6,281 5,866 7.1
Corporate 4,496 2,633 70.8
------------- ------------- ------
Total $ 55,644 $ 49,034 13.5
============= ============= ======
Operating Cash Flow (2):
Newspaper publishing $ 506,305 $ 468,846 8.0
Television 128,675 91,229 41.0
Corporate (10,401) (12,785) 18.6
------------- ------------- ------
Total $ 624,579 $ 547,290 14.1
============= ============= ======
After-tax Cash Flow (3):
Total $ 402,650 $ 354,516 13.6
============= ============= ======
(1) As if Statement of Financial Accounting Standards No. 142
(SFAS No. 142) had been adopted at the beginning of 2001.
(2) Operating Cash Flow represents operating income for each of the
company's business segments plus related depreciation and
amortization expense.
(3) After-tax Cash Flow represents net income after tax plus
depreciation and amortization expense.
Note: Certain immaterial charges relating to sales promotions have
been reclassified from cost of sales and operating expenses to
a reduction of circulation revenue; the reclassification had no
effect on operating income or net income.
COMPARABLE BASIS BUSINESS SEGMENT INFORMATION (1)
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Fifty-two weeks ended % Inc
Dec. 29, 2002 Dec. 30, 2001 (Dec)
Net Operating Revenues:
Newspaper publishing $ 5,650,946 $ 5,636,954 0.2
Television 771,303 662,652 16.4
------------- ------------- ------
Total $ 6,422,249 $ 6,299,606 1.9
============= ============= ======
Operating Income (net
of depreciation and
amortization):
Newspaper publishing $ 1,615,664 $ 1,592,389 1.5
Television 371,132 291,991 27.1
Corporate (60,487) (60,557) 0.1
------------- ------------- ------
Total $ 1,926,309 $ 1,823,823 5.6
============= ============= ======
Depreciation and
Amortization:
Newspaper publishing $ 181,669 $ 177,264 2.5
Television 25,429 25,431 (0.0)
Corporate 15,346 7,094 116.3
------------- ------------- ------
Total $ 222,444 $ 209,789 6.0
============= ============= ======
Operating Cash Flow (2):
Newspaper publishing $ 1,797,333 $ 1,769,653 1.6
Television 396,561 317,422 24.9
Corporate (45,141) (53,463) 15.6
------------- ------------- ------
Total $ 2,148,753 $ 2,033,612 5.7
============= ============= ======
After-tax Cash Flow (3):
Total $ 1,382,572 $ 1,256,674 10.0
============= ============= ======
(1) As if Statement of Financial Accounting Standards No. 142
(SFAS No. 142) had been adopted at the beginning of 2001.
(2) Operating Cash Flow represents operating income for each of the
company's business segments plus related depreciation and
amortization expense.
(3) After-tax Cash Flow represents net income after tax plus
depreciation and amortization expense.
Note: Certain immaterial charges relating to sales promotions have
been reclassified from cost of sales and operating expenses to
a reduction of circulation revenue; the reclassification had no
effect on operating income or net income.