SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report: December 7, 1999
GANNETT CO., INC.
(Exact name of registrant as specified in its charter)
Delaware 1-6961 16-0442930
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
1100 Wilson Boulevard, Arlington, Virginia 22234
(Address of principal executive offices)(Zip Code)
(703) 284-6000
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
OVERVIEW
On July 27, 1999, the company announced an agreement to sell the assets of
its cable division to Cox Communications, Inc. for approximately $2.7 billion
in cash. Closing is expected to occur in early 2000. Upon closing, a gain
will be recognized which, along with the cable and security segment operating
results, will be reported as discontinued operations in the company's
financial statements. The company expects to use the after-tax proceeds from
this transaction to pay down its long-term debt.
Included in this filing are financial statements for 1999, 1998, 1997
and 1996 which reflect this reclassification change. Also included in
this filing are the unaudited pro forma condensed combined financial
statements of Gannett Co., Inc. and Newsquest plc which also reflect this
reclassification change.
EARNINGS SUMMARY OF INCOME FROM CONTINUING AND DISCONTINUED OPERATIONS
After giving effect to the reclassifications discussed above, the
company's earnings, excluding nonrecurring net non-operating gains principally
from the disposition of various businesses in 1999, 1998 and 1996, are as
follows.
Unaudited, in thousands of dollars (except per share amounts)
Earnings summary
Excluding net non-operating gains
Thirteen weeks ended % Inc
March 28, 1999 March 29, 1998 (Dec)
Operating income $ 296,592 $ 274,327 8.1
Non-operating income (expense)
Interest expense (16,592) (23,229) (28.6)
Other 2,368 829 185.6
----------- ----------- ------
Total (14,224) (22,400) (36.5)
Income before income taxes 282,368 251,927 12.1
Provision for income taxes 112,400 100,800 11.5
----------- ----------- ------
Income from continuing operations 169,968 151,127 12.5
Discontinued operations:
Income from the operation of
discontinued operations, net of tax 8,925 8,116 10.0
----------- ----------- ------
Net income $ 178,893 $ 159,243 12.3
=========== =========== ======
Earnings per share - basic
Earnings from continuing operations $0.61 $0.53 15.1
Earnings from discontinued operations:
Discontinued operations, net of tax $0.03 $0.03 --
----- ----- ----
Net income per share - basic $0.64 $0.56 14.3
===== ===== ====
Earnings per share - diluted
Earnings from continuing operations $0.61 $0.53 15.1
Earnings from discontinued operations:
Discontinued operations, net of tax $0.03 $0.03 --
----- ----- ----
Net income per share - diluted $0.64 $0.56 14.3
===== ===== ====
Unaudited, in thousands of dollars (except per share amounts)
Earnings summary
Excluding net non-operating gains
Thirteen weeks ended % Inc
June 27, 1999 June 28, 1998 (Dec)
Operating income $ 403,111 $ 375,296 7.4
Non-operating income (expense)
Interest expense (13,852) (20,348) (31.9)
Other 775 2,498 (69.0)
----------- ----------- ------
Total (13,077) (17,850) (26.7)
Income before income taxes 390,034 357,446 9.1
Provision for income taxes 155,200 143,100 8.5
----------- ----------- ------
Income from continuing operations 234,834 214,346 9.6
Discontinued operations:
Income from the operation of
discontinued operations, net of tax 9,356 8,463 10.6
----------- ----------- ------
Net income $ 244,190 $ 222,809 9.6
=========== =========== ======
Earnings per share - basic
Earnings from continuing operations $0.84 $0.75 12.0
Earnings from discontinued operations:
Discontinued operations, net of tax $0.03 $0.03 --
----- ----- ----
Net income per share - basic $0.87 $0.78 11.5
===== ===== ====
Earnings per share - diluted
Earnings from continuing operations $0.84 $0.75 12.0
Earnings from discontinued operations:
Discontinued operations, net of tax $0.03 $0.03 --
----- ----- ----
Net income per share - diluted $0.87 $0.78 11.5
===== ===== ====
Unaudited, in thousands of dollars (except per share amounts)
Earnings summary
Excluding net non-operating gains
Thirteen weeks ended % Inc Thirty-nine weeks ended % Inc
Sept. 26, 1999 Sept. 27, 1998 (Dec) Sept. 26, 1999 Sept. 27, 1998 (Dec)
-------------- -------------- ----- -------------- -------------- -----
Operating income $ 353,366 $ 298,783 18.3 $ 1,053,069 $ 948,406 11.0
Non-operating income (expense)
Interest expense (26,474) (17,190) 54.0 (56,918) (60,767) (6.3)
Other 1,588 (877) (281.1) 4,731 2,450 93.1
----------- ------------ ------- ------------ ------------ ------
Total (24,886) (18,067) 37.7 (52,187) (58,317) (10.5)
Income before income taxes 328,480 280,716 17.0 1,000,882 890,089 12.4
Provision for income taxes 130,700 112,250 16.4 398,300 356,150 11.8
----------- ------------ ------- ------------ ------------ ------
Income from continuing operations 197,780 168,466 17.4 602,582 533,939 12.9
Discontinued operations:
Income from the operation of
discontinued operations, net of tax 9,699 8,053 20.4 27,980 24,632 13.6
----------- ------------ ------- ------------ ------------ ------
Net income $ 207,479 $ 176,519 17.5 $ 630,562 $ 558,571 12.9
=========== ============ ======= ============ ============ ======
Earnings per share - basic
Earnings from continuing operations $0.70 $0.59 18.6 $2.16 $1.87 15.5
Earnings from discontinued operations
Discontinued operations, net of tax $0.04 $0.03 33.3 $0.10 $0.09 11.1
----- ----- ---- ----- ----- ----
Net income per share - basic $0.74 $0.62 19.4 $2.26 $1.96 15.3
===== ===== ==== ===== ===== ====
Earnings per share - diluted
Earnings from continuing operations $0.70 $0.59 18.6 $2.14 $1.86 15.1
Earnings from discontinued operations
Discontinued operations, net of tax $0.04 $0.03 33.3 $0.10 $0.09 11.1
----- ----- ---- ----- ----- ----
Net income per share - diluted $0.74 $0.62 19.4 $2.24 $1.95 14.9
===== ===== ==== ===== ===== ====
Unaudited, in thousands of dollars (except per share amounts)
Earnings Summary
Thirteen weeks ended
December 27, 1998
Operating income $ 437,408
Non-operating income (expense)
Interest expense (18,645)
Other (3,654)
-----------
Total (22,299)
Income before income taxes 415,109
Provision for income taxes 166,230
-----------
Income from continuing operations 248,879
Discontinued operations:
Income from the operation of
discontinued operations, net of tax 8,856
-----------
Net income $ 257,735
===========
Earnings per share - basic
Earnings from continuing operations $0.89
Earnings from discontinued operations:
Discontinued operations, net of tax $0.03
-----
Net income per share - basic $0.92
=====
Earnings per share - diluted
Earnings from continuing operations $0.89
Earnings from discontinued operations:
Discontinued operations, net of tax $0.03
-----
Net income per share - diluted $0.92
=====
Unaudited, in thousands of dollars (except per share amounts)
Earnings summary
Excluding net non-operating gains
Fifty-two weeks ended
Dec. 27, 1998 Dec. 28, 1997 Dec. 29, 1996
------------- ------------- -------------
Operating income $ 1,385,814 $ 1,262,242 $ 1,019,278
Non-operating income (expense)
Interest expense (79,412) (91,725) (135,563)
Other (1,204) (15,564) (2,656)
------------- ------------- -------------
Total (80,616) (107,289) (138,219)
Income before income taxes 1,305,198 1,154,953 881,059
Provision for income taxes 522,380 473,600 377,900
------------- ------------- -------------
Income from continuing operations 782,818 681,353 503,159
Discontinued operations:
Income from the operation of
discontinued operations,
net of tax 33,488 31,326 51,867
Gain from the sale of discontinued
operations, net of income tax
of $195,000 294,580
------------- ------------- -------------
Total income from discontinued
operations 33,488 31,326 346,447
------------- ------------- -------------
Net income $ 816,306 $ 712,679 $ 849,606
============= ============= =============
Earnings per share - basic
Earnings from continuing
operations $2.76 $2.41 $1.79
Earnings from discontinued
operations:
Discontinued operations, net
of tax $0.12 $0.11 $0.18
Gain from sale of discontinued
operations, net of tax $1.05
----- ----- -----
Net income per share - basic $2.88 $2.52 $3.02
===== ===== =====
Earnings per share - diluted
Earnings from continuing
operations $2.74 $2.39 $1.78
Earnings from discontinued
operations:
Discontinued operations, net
of tax $0.12 $0.11 $0.18
Gain from sale of discontinued
operations, net of tax $1.04
----- ----- -----
Net income per share - diluted $2.86 $2.50 $3.00
===== ===== =====
Note: The discontinued operations in 1996 include results from the cable and
security segment, along with the outdoor advertising business and Multimedia
Entertainment, both of which were sold in 1996.
The earnings summaries above exclude the following:
- The second quarter of 1999 net pre-tax gain of $55 million ($33 million
after-tax or $0.12 per share-basic and $0.11 per share-diluted) principally
from the exchange of KVUE-TV in Austin, Texas for KXTV-TV in Sacramento,
California.
- The first quarter of 1998 net pre-tax gain of $306.5 million ($184 million
after-tax or $0.65 per share-basic and $0.64 per share diluted) principally
from the disposition of the company's five remaining radio stations and its
alarm security business.
- The fourth quarter of 1996 pre-tax gain of $158 million ($93 million
after-tax or $0.33 per share) from the exchange of broadcast stations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
See exhibit index for list of exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
GANNETT CO., INC.
Dated: December 7, 1999 By: /s/George R. Gavagan
-------------------------
George R. Gavagan
Vice President and Controller
EXHIBIT INDEX
Exhibit
Number Title or Description
- ------- ----------------------
99-1 Unaudited statements of income and business
segment information for the quarters ended
March 28, 1999 and March 29, 1998; June 27, 1999
and June 28, 1998; September 26, 1999 and
September 27, 1998; and December 27, 1998; for the
three quarters ended September 26, 1999 and
September 27, 1998; and for the years ended
December 27, 1998; December 28, 1997; and
December 29, 1996, reflecting the reclassification
of the cable and security segment as a
discontinued operation.
99-2 Unaudited pro forma condensed combined statements
of income of Gannett Co., Inc. and Newsquest plc
for the twenty-six weeks ended June 27, 1999 and
the year ended December 27, 1998, reflecting the
reclassification of the cable and security segment
as a discontinued operation.