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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 2, 2001
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MediaNews Group, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 76-0425553
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1560 Broadway, Suite 2100, Denver, CO 80202
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 303-563-6360
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N/A
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(Former name or former address, if changed since last report.)
Amendment No. 1
The registrant's current report on Form 8K dated January 2, 2001, is hereby
amended and supplemented as follows:
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
a. Financial Statements of Businesses Acquired
The audited financial statements of Kearns-Tribune, LLC as of and for
the year ended December 31, 2000.
b. Unaudited Pro Forma Financial Information
1.) Unaudited pro forma consolidated balance sheet as of December 31,
2000.
2.) Unaudited pro forma condensed consolidated statement of
operations for the six months ended December 31, 2000, and the
year ended June 30, 2000.
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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 hereunto duly authorized.
MEDIANEWS GROUP, INC.
Date: May 14, 2001 BY: /s/ Ronald A. Mayo
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Ronald A. Mayo
Vice President,
Chief Financial Officer
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MEDIANEWS GROUP, INC.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
On January 2, 2001, MediaNews Group, Inc. purchased Kearns-Tribune, LLC.
Kearns-Tribune, LLC owns the masthead of the Salt Lake Tribune and a 50%
interest in the Newspaper Agency Corporation ("NAC"). The NAC is operated under
the terms of a Joint Operating Agreement ("JOA") between Kearns-Tribune, LLC and
the Deseret News Publishing Company. Under the terms of the JOA, the NAC is
responsible for performing all the business functions of the Salt Lake Tribune
and the Deseret News, including advertising and circulation sales, production
and distribution. News and editorial at the Salt Lake Tribune is completely
separate from the NAC and is the responsibility of Kearns-Tribune, LLC. While
Kearns-Tribune, LLC owns 50% of the NAC, the net income of the NAC is
distributed 58% to Kearns-Tribune, LLC and 42% to the Deseret News Publishing
Company.
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MEDIANEWS GROUP, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
December 31, 2000
(in Thousands)
Acquisition &
As Pro Forma
ASSETS Reported Adjustments Pro Forma
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CURRENT ASSETS
Cash and cash equivalents .................................. $ 7,217 $ 1,163 $ 8,380
Accounts receivable, less allowance for doubtful
accounts ................................................ 132,296 738 133,034
Inventories of newsprint and supplies ...................... 22,167 -- 22,167
Prepaid expenses and other assets .......................... 6,014 196 6,210
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TOTAL CURRENT ASSETS .................................... 167,694 2,097 169,791
PROPERTY, PLANT AND EQUIPMENT
Land ....................................................... 28,319 3,858 (a) 32,177
Buildings and improvements ................................. 126,424 4,848 (a) 131,272
Machinery and equipment .................................... 384,189 18,365 (a) 402,554
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TOTAL PROPERTY, PLANT AND EQUIPMENT ..................... 538,932 27,071 566,003
Less accumulated depreciation and amoritzation ............. 170,256 -- (b) 170,256
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Net Property, Plant and Equipment ....................... 368,676 27,071 395,747
OTHER ASSETS
Investment in JOAs ......................................... 11,541 174,580 (c) 186,121
Subscriber accounts, net of accumulated amortization ....... 111,471 -- 111,471
Excess of cost over fair value of net assets acquired,
net of accumulated amortization ......................... 503,635 -- 503,635
Covenants not to compete and other identifiable
intangible assets, net of accumulated amortization ...... 9,359 -- 9,359
Other ...................................................... 47,923 2,315 (f),(h) 50,238
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TOTAL OTHER ASSETS ...................................... 683,929 176,895 860,824
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TOTAL ASSETS .................................................... $ 1,220,299 $ 206,063 $ 1,426,362
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See notes to unaudited pro forma financial information.
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MEDIANEWS GROUP, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
December 31, 2000
(In Thousands)
Acquisition &
As Pro Forma
LIABILITIES AND SHAREHOLDERS' EQUITY Reported Adjustments Pro Forma
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CURRENT LIABILITIES
Trade Accounts Payable ..............................................$ 27,221 $ 486 $ 27,707
Accrued liabilities ................................................. 62,541 4,190 (d) 66,731
Unearned income ..................................................... 25,944 -- 25,944
Current portion of long-term debt and capital lease obligation ...... 12,540 107 12,647
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TOTAL CURRENT LIABILITIES ........................................ 128,246 4,783 133,029
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATION .............................. 858,733 201,280 (e) 1,060,013
OTHER LIABILITIES ........................................................ 19,550 -- (g),(h) 19,550
DEFERRED INCOME TAXES .................................................... 55,328 -- 55,328
MINORITY INTEREST ........................................................ 144,288 -- 144,288
SHAREHOLDERS' EQUITY
Common stock ........................................................ 2 -- 2
Additional paid in capital .......................................... 3,631 -- (i) 3,631
Accumulated other comprehensive loss ................................ (1,309) -- (1,309)
Retained earnings ................................................... 13,830 -- (i) 13,830
Common stock in Treasury ............................................ (2,000) -- (2,000)
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TOTAL SHAREHOLDERS' EQUITY ....................................... 14,154 -- 14,154
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ...............................$ 1,220,299 $ 206,063 $ 1,426,362
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See notes to unaudited pro forma financial information.
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MEDIANEWS GROUP, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
Six Months Ended December 31, 2000
(In Thousands, except share data)
Acquisition &
As Pro Forma
Reported Adjustments Pro Forma
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OPERATING REVENUES .......................... $ 486,119 $ 387 $ 486,506
COST AND EXPENSES
Cost of sales .......................... 174,976 4,067 179,043
Selling, general, and administrative ... 215,882 2,870 (a) 218,752
Depreciation and amortization .......... 32,847 1,033 (b) 33,880
Interest expense ....................... 38,995 8,986 (d) 47,981
Other, (net) ........................... 5,464 (65) 5,399
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TOTAL COST AND EXPENSES ............. 468,164 16,891 485,055
EQUITY INCOME IN JOAs ....................... 1,687 15,172 (c) 16,859
GAIN ON SALE OF NEWSPAPER PROPERTY .......... 23,629 -- 23,629
MINORITY INTEREST ........................... 19,103 -- 19,103
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INCOME (LOSS) BEFORE INCOME TAXES ........... 24,168 (1,332) 22,836
INCOME TAX BENEFIT (EXPENSE) ................ (9,644) 540 (e) (9,104)
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NET INCOME (LOSS) ........................... $ 14,524 $ (792) $ 13,732
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EARNINGS (LOSS) PER COMMON SHARE ............ $ 6.33 $ (0.35) $ 5.98
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See notes to unaudited pro forma financial information.
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MEDIANEWS GROUP, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended June 30, 2000
(In Thousands, except share data)
Acquisition &
As Pro Forma
Reported Adjustments Pro Forma
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OPERATING REVENUES .......................... $ 947,301 $ 1,459 $ 948,760
COST AND EXPENSES
Cost of sales .......................... 320,095 8,038 328,133
Selling, general, and administrative ... 441,832 5,451 (a) 447,283
Depreciation and amortization .......... 63,263 2,067 (b) 65,330
Interest expense ....................... 75,758 16,062 (d) 91,820
Other, (net) ........................... 8,387 (288) 8,099
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TOTAL COST AND EXPENSES ............. 909,335 31,330 940,665
EQUITY INCOME IN JOAs ....................... 3,481 30,605 (c) 34,086
GAIN ON SALE OF NEWSPAPER PROPERTY .......... 117,621 -- 117,621
MINORITY INTEREST ........................... 34,092 -- 34,092
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INCOME BEFORE INCOME TAXES .................. 124,976 734 125,710
INCOME TAX BENEFIT (EXPENSE) ................ 5,407 (297) (e) 5,110
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NET INCOME .................................. $ 130,383 $ 437 $ 130,820
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EARNINGS PER COMMON SHARE ................... $ 56.40 $ 0.19 $ 56.59
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See notes to unaudited pro forma financial information.
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MEDIANEWS GROUP, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
NOTE 1: UNAUDITED PRO FORMA ADJUSTMENTS FOR THE JANUARY 2, 2001, ACQUISITION
Acquisition Transaction
The following pro forma adjustments to the historical financial statements of
the newspaper acquired on January 2, 2001. Actual operations of this newspaper
have been included from January 3, 2001.
(a) Pension expense was eliminated as the pension plan was not acquired
and no new defined benefit pension plan will be installed at any of
the acquired newspapers.
(b) Depreciation expense of the acquired assets has been adjusted to
reflect the fair market value of the acquired assets and the useful
lives assigned to these assets.
(c) Adjust equity pick-up from the investment in the Newspaper Agency
Corporation to reflect the adjusted goodwill associated with
Kearns-Tribune LLC's investment in the Newspaper Agency Corporation.
(d) Interest expense has been adjusted to reflect the borrowings and rates
of debt utilized in the acquisition of the assets.
(e) Income taxes reflect the estimated income taxes based on a combined
federal and state income tax rate of 40.5%. Historical income taxes
have been eliminated.
NOTE 2: UNAUDITED PRO FORMA BALANCE SHEET
The following are pro forma adjustments to the historical balance sheet to
reflect the newspaper acquired on January 2, 2001.
(a) Record property, plant and equipment at management's estimated fair
market value at the date of acquisition. These estimates are subject
to change based on the completion of the final purchase accounting.
(b) Eliminate historical accumulated depreciation on the plant and
equipment acquired.
(c) Record estimated fair market value of the investments in the Newspaper
Agency Corporation acquired in the acquisition.
(d) Adjust accrued liabilities to accrue the estimated organization,
closing and other costs associated with completing the Acquisition.
(e) Record long-term debt incurred in the Acquisition.
(f) Eliminate pension assets not acquired in the acquisition.
(g) Eliminate post employment benefit obligation not assumed in the
acquisition.
(h) Deferred compensation and related cash surrender value of life
insurance have been excluded as the asset and liabilities were not
acquired in the acquisition.
(i) Members' equity and retained earnings are eliminated in consolidation.
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EXHIBIT INDEX
Exhibit No. Description
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99.2.3 Kearns-Tribune LLC Consolidated Financial Statements.