Exhibit 99-1
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma financial statements give effect to the
exchange of approximately $690 million in cash by Outdoor Systems, Inc. for
substantially all of Gannett Co., Inc.'s outdoor advertising business. The
transaction involves the sale of assets of certain of the Company's outdoor
subsidiaries and the sale of stock of certain other outdoor subsidiaries.
The unaudited pro forma balance sheet presents the financial position of
Gannett as of March 31, 1996, assuming that the proposed sale had occurred as
of that date. Such pro forma information is based on the historical balance
sheet of the Company at March 31, 1996.
As required by rule 11-02 of regulation S-X, the unaudited pro forma
statements of income have been prepared assuming that the proposed sale
occurred as of the beginning of the earliest period presented. The unaudited
pro forma statements of income reflect the historical results of operations for
Gannett for its fiscal year ended 1995 and first three months of 1996. The 1995
statement also includes the eleven month pro forma effect of the Company's 1995
acquisition of Multimedia, as discussed in note 2 to the financial statements
filed with the Company's 1995 Annual Report on Form 10-K.
The unaudited pro forma financial statements give effect to certain pro
forma adjustments which are described in the notes to these statements.
Nonrecurring charges related to the transaction are not reflected in the
unaudited pro forma financial statements because they are insignificant.
The unaudited pro forma data is presented for informational purposes only
and is not necessarily indicative of the results of operations or financial
position which would have been achieved had this transaction been completed as
of the date indicated, nor is it necessarily indicative of Gannett's future
results of operations or financial position.
The unaudited pro forma financial statements should be read in conjunction
with the historical financial statements of the Company, including the related
notes thereto.
GANNETT CO., INC.
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
MARCH 31, 1996
Sale of
Outdoor Pro Forma Pro Forma
(In thousands) Gannett Business Adjustments Balance Sheet
ASSETS
Cash and marketable securities $ 50,876 $ (195) $ 50,681
Accounts receivable, net 518,173 (46,311) 471,862
Inventories 119,162 (1,128) 118,034
Prepaid expenses and other current assets 110,629 (20,581) 90,048
--------- ------- ------- ---------
Total Current Assets 798,840 (68,215) 730,625
Property, plant and equipment, net 2,066,809 (138,160) 1,928,649
Other assets 3,573,046 (19,688) 3,553,358
--------- ------- ------- ---------
Total Assets $6,438,695 $(226,063) $6,212,632
========= ======= ======= =========
LIABILITIES & SHAREHOLDERS EQUITY
Current maturities of long-term debt $ 123 $ 0 $ 123
Accounts payable and current portion of
film contracts payable 231,019 (11,345) 219,674
Accrued expenses and other current liabilities 341,022 (9,193) 331,829
Dividends payable 49,222 0 49,222
Income taxes 83,909 0 83,909
--------- ------- -------- ---------
Total Current Liabilities 705,295 (20,538) 684,757
Deferred income taxes 322,244 (6,879) 315,365
Long-term debt, less current portion 2,769,474 0 $(499,758)(1) 2,269,716
Postretirement medical and life
insurance liabilities 306,710 0 306,710
Other long-term liabilities 138,640 (259) 138,381
Total Shareholders' equity 2,196,332 (198,387) 499,758 (1) 2,497,703
--------- ------- -------- ---------
Total Liabilities and Shareholders' Equity $6,438,695 $(226,063) $ 0 $6,212,632
========= ======= ======== =========
See accompanying notes to Unaudited Pro Forma Financial Statements.
GANNETT CO., INC.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF INCOME
THREE MONTHS ENDED MARCH 31, 1996
Sale of Pro Forma
(In thousands except Outdoor Pro Forma Statement
per share data) Gannett Business Adjustments of Income
NET OPERATING REVENUES:
Newspapers $ 786,302 $ 786,302
Broadcasting 141,688 141,688
Cable 47,208 47,208
Other 128,962 $(51,131) 77,831
--------- ------ ---------
Total Operating Revenues 1,104,160 (51,131) 1,053,029
--------- ------ ---------
OPERATING COSTS:
Total operating expenses, exclusive of
depreciation & amortization 828,837 (49,701) 779,136
Depreciation 53,135 (4,194) 48,941
Amortization of intangible assets 24,277 (194) 24,083
--------- ------ ---------
Total Operating Expenses 906,249 (54,089) 852,160
--------- ------ ---------
Total Operating Income (loss) 197,911 2,958 200,869
--------- ------ ---------
NON-OPERATING INCOME (EXPENSE)
Interest expense (39,528) $6,847 (1) (32,681)
Other income (expense) (1,583) (1,583)
--------- ------ ----- ---------
Total Non-operating (41,111) 6,847 (34,264)
--------- ------ ----- ---------
Income Before Income Taxes 156,800 2,958 6,847 166,605
Provision for/benefit of Income Taxes (67,450) (1,154) (2,670)(2) (71,274)
--------- ------ ----- ---------
Net Income $ 89,350 $ 1,804 $4,177 $ 95,331
========= ====== ===== =========
Net Income Per Share $0.64 $0.01 $0.03 $0.68
Average Number of Outstanding Shares 140,680 140,680 140,680 140,680
See accompanying notes to Unaudited Pro Forma Financial Statements.
GANNETT CO., INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1995
Sale of Pro Forma
(In thousands except Multimedia Outdoor Pro Forma Statement
per share data) Gannett Pro forma (*) Subtotal Business Adjustments of Income
NET OPERATING REVENUES:
Newspapers $3,088,423 $150,684 $3,239,107 $3,239,107
Broadcasting 466,187 144,412 610,599 610,599
Cable 15,061 159,581 174,642 174,642
Other 437,065 153,832 590,897 $(253,841) 337,056
--------- ------- --------- ------- ---------
Total Operating Revenues 4,006,736 608,509 4,615,245 (253,841) 4,361,404
--------- ------- --------- ------- ---------
OPERATING COSTS:
Total operating expenses, exclusive of
depreciation & amortization 2,944,898 374,623 3,319,521 (209,201) 3,110,320
Depreciation 159,657 53,473 213,130 (15,900) 197,230
Amortization of intangible assets 50,298 48,059 98,357 (776) 97,581
--------- ------- --------- ------- ---------
Total Operating Expenses 3,154,853 476,155 3,631,008 (225,877) 3,405,131
--------- ------- --------- ------- ---------
Total Operating Income 851,883 132,354 984,237 (27,964) 956,273
--------- ------- --------- ------- ---------
NON-OPERATING INCOME (EXPENSE)
Interest expense (52,175) (154,570) (206,745) $29,486 (1) (177,259)
Other income (expense) 3,754 417 4,171 4,171
--------- ------- --------- ------- ------ ---------
Total Non-operating (48,421) (154,153) (202,574) 29,486 (173,088)
--------- ------- --------- ------- ------ ---------
Income Before Income Taxes 803,462 (21,799) 781,663 (27,964) 29,486 783,185
Provision for/benefit of Income Taxes (326,200) (7,600) (333,800) 10,906 (11,500)(2) (334,394)
--------- ------- --------- ------- ------ ---------
Net Income $ 477,262 $(29,399) $ 447,863 $ (17,058) $17,986 $ 448,791
========= ======= ========= ======= ====== =========
Net Income Per Share $3.41 ($0.21) $3.20 ($0.12) $0.13 $3.21
Average Number of Outstanding Shares 139,968 139,968 139,968 139,968 139,968 139,968
* In December, 1995, the Company completed the acquisition of Multimedia, Inc
("Multimedia"). The amounts in this column reflect the estimated results of
operations of the Company and its subsidiaries as though the Multimedia
acquisition was made at the beginning of the year in which the transaction was
consummated along with the related costs of financing the acquisition and the
additional goodwill and depreciation expense associated with the purchase.
Refer to note 2 of the Company's financial statements filed with its 1995
Annual Report on Form 10-K for more information concerning this acquisition.
See accompanying notes to Unaudited Pro Forma Financial Statements.
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
The unaudited pro forma balance sheet has been prepared to reflect the sale
of the Company's outdoor advertising business for an aggregate price of
approximately $690 million in cash.
The unaudited pro forma balance sheet presents the financial position
of the Company as of March 31, 1996 assuming that the transaction occurred as of
that date. Such pro forma information is based on the historical balance sheet
of Gannett as of March 31, 1996, adjusted for the effects of the sale.
As required by rule 11-02 of regulation S-X, the unaudited pro forma statements
of income have been prepared assuming that the proposed sale occurred as of the
beginning of the earliest period presented. The unaudited pro forma statements
of income reflect the historical results of operations for Gannett for its
fiscal year ended 1995 and first three months of 1996. The 1995 pro forma
statement of income also includes the eleven month pro forma effect of the
Company's 1995 acquisition of Multimedia, as presented in note 2 to the
financial statements filed with the Company's 1995 Annual Report on Form 10-K.
The Company believes that the assumptions used in preparing the unaudited pro
forma financial statements provide a reasonable basis for presenting all of the
significant effects of the sale and that the pro forma adjustments give effect
to those assumptions in the unaudited pro forma financial statements.
Note 2 - Pro forma Adjustments
A. Pro forma adjustments to the unaudited condensed balance sheet are made to
reflect the following:
(1) Adjustment to reflect the pay down of long-term debt from the after-tax
proceeds of the sale. The proceeds are reduced by the tax on the estimated
gain on sale of the business, using a combined federal and state tax rate
of 39%.
B. Pro forma adjustments to the March 31, 1996 unaudited condensed statement of
income are made to reflect the following:
(1) Reduction in interest expense due to pay down of long-term debt from the
after-tax proceeds of the sale. The rate used to calculate the reduction
in interest expense is based on the weighted average rate paid by Gannett
for commercial paper during the three-month period ended March 31, 1996.
(2) Record income tax effect of pro forma adjustment described in item 1.
C. Pro forma adjustments to the December 31, 1995 unaudited condensed combined
statement of income are made to reflect the following:
(1) Reduction in interest expense due to pay down of long-term debt from net
proceeds of the sale. The rate used to calculate the reduction in interest
expense is based on the weighted average rate paid by Gannett for
commercial paper during the Company's fiscal year ended December 31, 1995.
(2) Record income tax effect of pro forma adjustment in item 1.