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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 1, 2000
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PULITZER INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-9329 431819711
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
900 North Tucker Boulevard, St. Louis, Missouri 63101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (314) 340-8000
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Not Applicable
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(Former name or former address, if changed since last report)
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This Form 8-K/A amends the Current Report on Form 8-K of
Pulitzer Inc., previously filed with the Securities and Exchange Commission on
May 2, 2000, to file the pro forma financial information required by Item 7 of
Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION
See Exhibit 99.2.
(c) Exhibits
See Exhibit Index.
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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.
PULITZER INC.
Date: May 15, 2000 By: /s/ Ronald H. Ridgway
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Ronald H. Ridgway
Senior Vice President - Finance
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT INDEX TITLE OR DESCRIPTION
<S> <C>
2.1* Joint Venture Agreement, dated as of May 1, 2000, among
Pulitzer Inc., Pulitzer Technologies, Inc., The Herald Company, Inc.
and St. Louis Post-Dispatch LLC.
2.2* Operating Agreement of St. Louis Post-Dispatch LLC, dated as
of May 1, 2000.
2.3* Indemnity Agreement, dated as of May 1, 2000, between The
Herald Company, Inc. and Pulitzer Inc.
99.1* Press release, dated May 1, 2000.
99.2 Unaudited pro forma condensed statement of consolidated financial
position as of March 31, 2000 and the unaudited pro forma condensed
statements of consolidated operations for the year ended December 31,
1999 and for the three months ended March 31, 2000.
* Previously filed.
</TABLE>
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EXHIBIT 99.2
PULITZER INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
INTRODUCTION
The following unaudited pro forma condensed consolidated financial statements
("Pro Forma Financial Statements") give effect to the increased interest of
Pulitzer Inc. (the "Company") and subsidiaries in the results of the operations
of the St. Louis Post-Dispatch Dispatch (the "Post-Dispatch") resulting from the
creation of a new joint venture, known as St. Louis Post-Dispatch LLC ("PD
LLC"). On May 1, 2000, the Company, Pulitzer Technologies, Inc., a wholly-owned
subsidiary of the Company (together with the Company, the "Pulitzer Parties"),
and The Herald Company, Inc. ("Herald") completed the transfer of their
respective interests in the assets and operations of the Post-Dispatch and
certain related businesses to PD LLC (the "Transaction"). Under the terms of the
operating agreement governing PD LLC (the "Operating Agreement"), the Pulitzer
Parties hold a 95 percent interest in the results of operations of PD LLC and
Herald holds a 5 percent interest. Previously, under the terms of the St. Louis
Agency Agreement, which had governed the operations of the Post-Dispatch since
1961, the Company and Herald generally shared its operating profits and losses,
as well as its capital expenditures, on a 50-50 basis. Under the terms of the
Operating Agreement, Herald received on May 1, 2000 a cash distribution of
$306 million from PD LLC. This distribution was financed by a $306 million loan
(the "Loan") to PD LLC from a group of institutional lenders (the "Lenders") led
by Prudential Capital Group, a division of The Prudential Insurance Company of
America. The aggregate principal amount of the Loan is payable on April 28, 2009
and bears interest at an annual rate of 8.05 percent. The Loan is guaranteed by
the Company pursuant to a Guaranty Agreement dated as of May 1, 2000 ("Guaranty
Agreement") with the Lenders. In turn, pursuant to an Indemnity Agreement dated
as of May 1, 2000 ("Indemnity Agreement") entered into between Herald and the
Company, Herald agreed to indemnify the Company for any payments that the
Company may make under the Guaranty Agreement. The Transaction and the Loan are
collectively referred to as the "Transactions." The Transactions will be
treated as a purchase for accounting purposes.
The Pro Forma Financial Statements have been derived by the application of pro
forma adjustments to the Company's historical consolidated financial statements.
The unaudited pro forma condensed statement of consolidated operations for the
periods presented gives effect to the Transactions as if such transactions were
consummated as of the beginning of the periods presented (i.e., as of January 1,
1999 for the fiscal year ended December 31, 1999 and as of January 1, 2000 for
the three months ended March 31, 2000). The unaudited pro forma condensed
statement of consolidated financial position gives effect to the Transactions as
if such transactions had occurred as of March 31, 2000. The adjustments are
described in the accompanying notes.
The Pro Forma Financial Statements should not be considered indicative of actual
results that would have been achieved had the Transactions been completed on the
date or for the periods presented and do not purport to indicate balance sheet
data or results of operations as of any future date or for any future period.
The Pro Forma Financial Statements should be read in conjunction with the
historical consolidated financial statements of the Company and related notes
thereto, included in its 1999 Annual Report on Form 10-K and 2000 First Quarter
Report on Form 10-Q.
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PULITZER INC. AND SUBSIDIARIES
PRO FORMA CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
MARCH 31, 2000
(IN THOUSANDS; UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
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<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 88,627 $ (5,400) (A) $ 82,927
(300) (B)
Marketable securities 312,419 312,419
Trade accounts receivable--net 42,913 42,913
Other 24,171 24,171
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Total current assets 468,130 (5,700) 462,430
PROPERTIES--NET 90,933 12,348 (C) 103,281
INTANGIBLES--NET 355,265 317,790 (H) 673,055
RECEIVABLE FROM THE HERALD
COMPANY 35,290 (35,290) (D)
DEFERRED INCOME TAX ASSET 9,888 14,823 (E) 24,711
OTHER ASSETS 27,720 300 (B) 28,020
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TOTAL $ 987,226 $ 304,271 $ 1,291,497
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LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES $ 46,556 $ -- $ 46,556
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LONG-TERM DEBT 306,000 (F) 306,000
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POSTRETIREMENT AND POST-
EMPLOYMENT BENEFIT
OBLIGATIONS 86,664 86,664
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OTHER LONG-TERM LIABILITIES 38,141 38,141
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MINORITY INTEREST (1,729) (G) (1,729)
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STOCKHOLDERS' EQUITY:
Common stock 85 85
Class B common stock 141 141
Additional paid-in capital 425,737 425,737
Retained earnings 416,470 416,470
Accumulated other comprehensive loss (4,862) (4,862)
Treasury stock (21,706) (21,706)
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Total stockholders' equity 815,865 815,865
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TOTAL $ 987,226 $ 304,271 $ 1,291,497
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</TABLE>
See notes to unaudited pro forma condensed statement of consolidated
financial position.
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PULITZER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED STATEMENT OF
CONSOLIDATED FINANCIAL POSITION
MARCH 31, 2000
(A) Adjustment records the payment of estimated professional fees related to the
Transaction. These professional fees will be treated as additional purchase
price and capitalized as a portion of goodwill with respect to the Transactions.
See Note (H) below.
(B) Adjustment records the payment of financing fees related to the Loan. The
financing fees are recorded as a deferred asset and are amortized over the term
of the Loan.
(C) Adjustment records the contribution to PD LLC of Herald's 50 percent
interest in machinery and equipment used in the operations of the Post-
Dispatch. The adjustment amount represents a preliminary estimate of the fair
value of these fixed assets at the date of contribution, May 1, 2000. The
preliminary allocation to fixed assets is subject to change pending the
completion of all procedures related to recording the Transaction by the
Company. The Company does not anticipate any significant changes to the
allocation and expects the allocation to be finalized by the end of the second
quarter of 2000.
(D) Adjustment records the elimination of the receivable due from Herald for
its 50 percent share in the net liabilities of the Post-Dispatch prior to the
Transaction.
(E) Adjustment records the Company's net deferred tax asset related to its
increased interest in the assets and liabilities of the Post-Dispatch
contributed by Herald in the Transaction.
(F) Adjustment records the principal amount of the Loan borrowed by the PD
LLC on May 1, 2000. The aggregate principal amount of the Loan is payable on
April 28, 2009 and bears interest at an annual rate of 8.05 percent.
(G) Adjustment records Herald's 5 percent share in PD LLC as a result of the
Transaction.
(H) Adjustment records the excess purchase price over the fair value of assets
acquired in the Transactions (i.e., goodwill), computed as follows (in
thousands):
<TABLE>
<S> <C>
PD LLC Loan $ 306,000
Elimination of Herald receivable 35,290
Herald fixed asset contribution (12,348)
Net deferred income tax asset (14,823)
Herald's minority interest (1,729)
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Subtotal 312,390
Estimated professional fees 5,400
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Adjustment to record goodwill $ 317,790
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</TABLE>
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PULITZER INC. AND SUBSIDIARIES
PRO FORMA CONDENSED STATEMENT OF CONSOLIDATED OPERATIONS
YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE DATA; UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Historical Adjustments
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<S> <C> <C> <C>
OPERATING REVENUES - NET $ 391,383 $ 1,977 (A) $ 393,360
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OPERATING EXPENSES:
Operations 148,578 460 (A) 149,038
Selling, general and administrative 154,904 2,953 (A) 155,308
(2,549) (B)
Stock option cash-out and bonuses 26,685 26,685
St. Louis Agency adjustment 25,029 (25,029) (B)
Depreciation and amortization 17,091 2,977 (C) 28,013
7,945 (D)
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Total operating expenses 372,287 (13,243) 359,044
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OPERATING INCOME 19,096 15,220 34,316
INTEREST INCOME 25,377 25,377
INTEREST EXPENSE (24,666) (E) (24,666)
NET LOSS ON MARKETABLE
SECURITIES AND INVESTMENTS (111) (111)
NET OTHER EXPENSE (2,697) (2,697)
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INCOME FROM CONTINUING
OPERATIONS BEFORE PROVISION
(BENEFIT) FOR INCOME TAXES 41,665 (9,446) 32,219
PROVISION (BENEFIT) FOR INCOME TAXES 18,708 (4,051) (F) 14,657
MINORITY INTEREST IN NET EARNINGS OF
SUBSIDIARY (670) (G) (670)
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INCOME (LOSS) FROM CONTINUING
OPERATIONS $ 22,957 $ (6,065) $ 16,892
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BASIC EARNINGS PER SHARE OF STOCK:
Income from continuing operations $ 1.02 $ 0.75
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Weighted average number of shares outstanding 22,578 22,578
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DILUTED EARNINGS PER SHARE OF STOCK:
Income from continuing operations $ 1.02 $ 0.75
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Weighted average number of shares outstanding 22,601 22,601
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</TABLE>
See notes to unaudited pro forma condensed statement of consolidated operations.
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PULITZER INC. AND SUBSIDIARIES
PRO FORMA CONDENSED STATEMENT OF CONSOLIDATED OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE DATA; UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
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<S> <C> <C> <C>
OPERATING REVENUES - NET $ 105,777 $ 592 (A) $ 106,369
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OPERATING EXPENSES:
Operations 38,891 300 (A) 39,191
Selling, general and administrative 43,511 567 (A) 43,405
(673) (B)
St. Louis Agency adjustment 6,845 (6,845) (B)
Depreciation and amortization 6,509 795 (C) 9,290
1,986 (D)
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Total operating expenses 95,756 (3,870) 91,886
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OPERATING INCOME 10,021 4,462 14,483
INTEREST INCOME 5,794 5,794
INTEREST EXPENSE (6,166) (E) (6,166)
NET GAIN ON MARKETABLE
SECURITIES AND INVESTMENTS 2,082 2,082
NET OTHER EXPENSE (910) (910)
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INCOME BEFORE PROVISION
(BENEFIT) FOR INCOME TAXES 16,987 (1,704) 15,283
PROVISION (BENEFIT) FOR INCOME TAXES 7,114 (624) (F) 6,490
MINORITY INTEREST IN NET EARNINGS OF SUBSIDIARY (209) (G) (209)
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NET INCOME (LOSS) $ 9,873 $ (1,289) $ 8,584
=========== =========== ============
BASIC EARNINGS PER SHARE OF STOCK:
Earnings per share $ 0.45 $ 0.39
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Weighted average number of shares outstanding 22,122 22,122
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DILUTED EARNINGS PER SHARE OF STOCK:
Earnings per share $ 0.45 $ 0.39
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Weighted average number of shares outstanding 22,162 22,162
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</TABLE>
See notes to unaudited pro forma condensed statement of consolidated operations.
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PULITZER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED STATEMENT OF CONSOLIDATED OPERATIONS
YEAR ENDED DECEMBER 31, 1999 AND THE THREE MONTHS ENDED MARCH 31, 2000
(A) Adjustments record Herald's 50 percent share of revenues and expenses of
several St. Louis area partnerships between the Company and Herald (the
"Partnerships"), reflecting the contribution of Herald's interest in the
Partnerships to PD LLC at the time of the Transaction. Prior to the
Transaction, the Company reported only its 50 percent share of the
Partnerships' revenue and expenses in its statement of consolidated
operations.
(B) Adjustments eliminate expenses representing payments to Herald for (1)
the rental of its 50 percent share of machinery and equipment used in the
operations of the Post-Dispatch and (2) its 50 percent share of the operating
profit of the Post-Dispatch represented by the St. Louis Agency adjustment.
(C) Adjustment records depreciation expense related to Herald's 50 percent share
of machinery and equipment contributed to PD LLC. The depreciation amount
is based on the estimated fair market values of the machinery and equipment.
Depreciation expense has been computed using the straight-line method based
on estimated useful lives primarily ranging from 3 to 7 years.
(D) Adjustment records amortization expense related to the goodwill recorded
by the Company in connection with the Transactions. Amortization expense has
been computed based on an estimated useful life of 40 years.
(E) Adjustment records interest expense on the $306 million Loan. Interest
expense was computed using the Loan's fixed rate of 8.05 percent. Also
included in the adjustment is the cost of financing fees related to the Loan,
based on a nine year amortization period corresponding to the term of the Loan.
(F) Adjustment records the income tax effect of the pro forma adjustments. The
effective tax rate on pro forma income before taxes differs from the Company's
statutory tax rate of 35 percent due primarily to non-deductible goodwill and
state income taxes.
(G) Adjustment records Herald's 5 percent minority interest in the operating
profit of PD LLC after considering the pro forma adjustments included herein.
For the purpose of computing the minority interest amount, the amortization
expense amount included in Note (D) above is not included in the calculation
of the operating profit of PD LLC.
