SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended
June 29, 1997 or
_ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from
_______ to _________
Commission file number 1-6961
GANNETT CO., INC.
(Exact name of registrant as specified in its charter)
Delaware 16-0442930
(state or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1100 Wilson Boulevard, Arlington, Virginia 22234
(Address of principal executive offices) (Zip Code)
(703) 284-6000
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No __
The number of shares outstanding of the issuer's Common Stock,
Par Value $1.00, as of June 29, 1997, was 141,725,724.
<PAGE>
PART I. FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
OPERATING SUMMARY
Operating income for the second quarter of 1997 rose $76.8 million
or 27%. Newspaper publishing earnings were up $60.5 million or 30%
for the quarter, reflecting strong advertising demand, a 26%
reduction in newsprint expense, continued strong USA TODAY operating
results and a favorable comparison year to year at The Detroit News.
Broadcasting earnings were up $14.9 million or 18%, reflecting
continued strong demand for TV and radio advertising. Operating
income for the Company's cable and security businesses rose $1.8
million or 15% for the quarter.
Operating income for the first six months of 1997 rose $145.4
million or 31%.
NEWSPAPERS
Newspaper publishing revenues rose $59 million or 7% in the second
quarter of 1997, which included a $51.3 million or 8% gain in
advertising revenues. Newspaper publishing revenues were up $98
million or 6% for the year-to-date, including advertising gains of
$88 million or 8%. The tables below provide, on a pro forma basis,
further details of newspaper ad revenue and linage and preprint
distribution for the second quarter and year-to-date periods of 1997
and 1996:
Advertising revenue, in thousands of dollars (pro forma)
Second Quarter 1997 1996 % Change
Local $211,770 $201,568 5
National 118,054 101,948 16
Classified 232,384 208,782 11
------- ------- --
Total Run-of-Press 562,208 512,298 10
------- ------- --
Preprint and
other advertising 94,098 90,281 4
------- ------- --
Total ad revenue $656,306 $602,579 9
======= ======= ==
Advertising linage, in thousands of inches (pro forma)
Second Quarter 1997 1996 % Change
Local 8,435 7,968 6
National 692 620 12
Classified 9,959 9,227 8
------- ------- --
Total Run-of-Press
linage 19,086 17,815 7
======= ======= ==
Preprint distribution 1,590 1,542 3
<PAGE>
Advertising revenue, in thousands of dollars (pro forma)
Year-to-date 1997 1996 % Change
Local $407,092 $385,063 6
National 220,465 197,684 12
Classified 443,258 401,106 11
------- ------- --
Total Run-of-Press 1,070,815 983,853 9
------- ------- --
Preprint and
other advertising 178,280 173,205 3
------- ------- --
Total ad revenue $1,249,095 $1,157,058 8
======= ======= ==
Advertising linage, in thousands of inches (pro forma)
Year-to-date 1997 1996 % Change
Local 16,201 15,261 6
National 1,312 1,151 14
Classified 18,872 17,558 7
------- ------- --
Total Run-of-Press
linage 36,385 33,970 7
======= ======= ==
Preprint distribution 3,053 2,964 3
In the pro forma presentation above, total advertising revenues for
the Company's newspapers rose 9% for the quarter and 8% for the
year-to-date. Local ad revenues increased 5% for the quarter and 6%
for the first six months with broad based gains recorded by most of
the Company's newspapers. National ad revenues rose 16% for the
quarter and 12% year-to-date, reflecting significant gains by USA
TODAY and USA WEEKEND. Classified advertising revenues increased
11% for the quarter and the year-to-date, reflecting gains across
the newspaper group in all categories, particularly in employment.
Reported newspaper circulation revenues rose 2% for the quarter and
for the first six months. Net paid daily circulation for the
Company's local newspapers was down 1% for the quarter and for the
six-month period, while Sunday circulation declined 1% for the
quarter and 2% for the six-month period. USA TODAY reported an
average daily paid circulation of 2,156,159 in the ABC Publisher's
statement for the 26 weeks ended March 30, 1997, which, subject to
audit, is a 2% increase over the comparable period a year ago.
Operating costs in total for the newspaper segment were flat for the
quarter and were down $22.7 million or 2% for the first six months
due to lower newsprint prices. Newsprint expense declined 26% for
the quarter and 27% year-to-date with consumption up 8% for the
quarter and 7% year-to-date. Newsprint prices are expected to
increase in coming months and the favorable expense comparisons
experienced for the first six months are not likely to continue into
the fourth quarter of 1997.
Newspaper operating income increased $60.5 million or 30% for the
quarter and $120.7 million or 34% for the year-to-date, reflecting
continued strong advertising gains throughout the group, lower
newsprint prices, strong operating results at USA TODAY and USA
WEEKEND and a favorable comparison year to year at The Detroit News.
In April 1997, the Company sold The Observer in Moultrie, Georgia.
In May 1997, the Company's commercial printing division, Gannett
Offset, acquired Printed Media Companies, a full-service heat set
printer based in Minneapolis, Minnesota. These transactions did not
materially affect newspaper operating results for the quarter.
In August 1997, the Company acquired Army Times Publishing Company,
located in Springfield, VA, which publishes six weekly newspapers
and one monthly publication.
Also in August 1997, the Company announced that it had entered into
an agreement to purchase New Jersey Press, Inc., which publishes the
daily Asbury Park Press and Home News & Tribune of East Brunswick,
and operates In Jersey, an Internet service. The Asbury Park Press,
founded in 1879, has a daily circulation of approximately 160,000
and 230,000 on Sunday. The Home News & Tribune has approximately
81,000 daily circulation and 87,000 on Sunday. Closing is expected
to occur in the third quarter of 1997, subject to obtaining
applicable governmental approvals and the satisfaction of other pre-
closing conditions.
BROADCASTING
Broadcast revenues increased $12.9 million or 7% for the second
quarter and $21.9 million or 7% for the first six months, while
operating costs were down $1.9 million or 2% for the quarter and
were flat for the year-to-date.
Pro forma broadcasting revenues increased 9% for the quarter and 8%
for the first six months, reflecting strong demand for television
advertising. Pro forma local television ad revenues grew 8% for the
quarter and 10% for the year-to-date, while pro forma national
revenues rose 9% for the quarter and 5% for the first six months.
Pro forma radio revenues were up 17% for the quarter and 20% for the
first six months.
Reported broadcast operating income rose $14.9 million or 18% for
the quarter and $22.2 million or 17% for the first six months.
Continued high demand for TV and radio advertising, coupled with
cost controls, resulted in stronger earnings at most of the
Company's broadcasting stations.
In January 1997, the Company concluded the transaction with Argyle
Television, Inc. to exchange WLWT-TV (NBC-Cincinnati) and KOCO-TV
(ABC-Oklahoma City) for WZZM-TV (ABC-Grand Rapids/Kalamazoo/Battle
Creek) and WGRZ-TV (NBC-Buffalo). This exchange, which was
necessary to comply with Federal Communication Commission (FCC)
cross-ownership rules, was accounted for as a non-monetary
transaction under which no gain or loss was recognized. This
exchange did not materially affect broadcast operating results for
the quarter.
In April 1997, the Company announced that it had entered into an
agreement to sell its remaining radio stations, WGCI-AM/FM,
Chicago, KHKS-FM, Dallas and KKBQ-AM/FM, Houston, to Evergreen
Media. The transaction is expected to close later this year or in
early 1998.
In May 1997, the Company acquired KNAZ-TV (Flagstaff, AZ) and KMOH-
TV (Kingman, AZ). With the completion of this transaction, Gannett
Broadcasting includes 18 television stations reaching 16 percent of
the U.S. television homes.
CABLE AND SECURITY
Cable television and alarm security operating revenues rose $6.6
million or 11% for the quarter and $11.6 million or 10% for the
year-to-date, while operating expenses rose $4.8 million or 11% for
the quarter and increased $8.1 million or 9% for the first six
months. Operating income from cable and security rose $1.8 million
or 15% for the quarter and $3.5 million or 15% for the year-to-date.
Cable revenues increased 11% for the quarter and 9% for the year-to-
date as the number of basic cable subscribers at quarter end
increased 2% and the number of pay subscribers decreased 3%. Alarm
security revenue rose 16% for the quarter and 14% for the year-to-
date as the number of alarm security subscribers at quarter end
increased 14%.
NON-OPERATING INCOME AND EXPENSE
Interest expense decreased $13.6 million or 35% for the quarter and
$27.5 million or 35% for the year-to-date, reflecting the pay down
of commercial paper borrowings from operating cash flow and the
proceeds from the sale of the outdoor and entertainment businesses
in the second half of 1996.
PROVISION FOR INCOME TAXES
The Company's effective income tax rate was 41.3% for the quarter
and for the year-to-date versus 43.2% and 43.1% for the comparable
periods in 1996. The decrease in the effective tax rate reflects
the diminished impact of the amortization of non-deductible
intangible assets given expected earnings gains in 1997.
NET INCOME
Income from continuing operations rose $57.5 million or 42% for the
quarter and $106.1 million or 47% for the year-to-date. Earnings
per share from continuing operations for the quarter rose to $1.38
from $0.98, an increase of 41%. Earnings per share from continuing
operations for the first six months rose to $2.33 from $1.59 or 47%.
Net income rose $44.7 million or 30% for the quarter and $90.4
million or 38% for the year-to-date. Net income per share rose to
$1.38 from $1.07 for the quarter, an increase of 29%, and to $2.33
from $1.70 for the year-to-date, an increase of 37%. In 1996,
income from the discontinued outdoor advertising and entertainment
operations was $12.8 million or $0.09 per share for the quarter and
$15.7 million or $0.11 per share for the year-to-date.
The weighted average number of shares outstanding totaled
141,621,000 for the second quarter of 1997, compared to 140,845,000
for the second quarter of 1996. Average shares outstanding for the
year-to-date totaled 141,521,000 for 1997 and 140,763,000 for 1996.
The increase in the number of shares outstanding for the quarter and
year-to-date periods is due mainly to the issuance of shares upon
the exercise of stock options and the settlement of stock incentive
rights.
LIQUIDITY AND CAPITAL RESOURCES
The Company's consolidated operating cash flow (defined as operating
income plus depreciation and amortization of intangible assets) as
reported in the accompanying Business Segment Information totaled
$768 million for the first half of 1997, compared with $618 million
a year ago, reflecting strong overall operating results.
Capital expenditures for the year-to-date totaled $92 million,
compared to $107 million in 1996. The Company's long-term debt
(commercial paper obligations) was reduced by $228 million from
operating cash flow in the first half of 1997. The Company's
regular quarterly dividend of $0.36 per share was declared in the
first and second quarters and totaled $102 million.
At the end of the second quarter, the Company's long term debt
included a $275 million note payable due in March 1998. This note
and the Company's commercial paper obligations are supported by a
$3.0 billion revolving credit agreement with a term extending to
November 12, 2000. As a result, these obligations are classified as
long-term debt.
OTHER MATTERS
Expenses for the first six months included the gift of the Niagara
Gazette newspaper to the Gannett Foundation. Subsequent to the
transfer, the Gannett Foundation sold the Niagara Gazette so that
the proceeds could be used to fund the Foundation and its community
grants. The sale also resolved the FCC newspaper-television cross-
ownership issues that arose as a result of the company's acquisition
of a television station in Buffalo, New York.
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
<CAPTION>
June 29, 1997 Dec. 29, 1996
--------------- ---------------
<S> <C> <C>
ASSETS
Cash $ 44,163 $ 27,179
Marketable securities 12,548 4,023
Trade receivables, less allowance
(1997 - $19,299; 1996 - $18,942) 539,279 569,095
Other receivables 37,366 47,850
Inventories 80,694 73,621
Prepaid expenses 29,618 44,837
--------------- ---------------
Total current assets 743,668 766,605
--------------- ---------------
Property, plant and equipment:
Cost 3,523,600 3,423,400
Less accumulated depreciation (1,521,662) (1,429,340)
--------------- ---------------
Net property, plant and equipment 2,001,938 1,994,060
--------------- ---------------
Intangible and other assets:
Excess of acquisition cost over the value of
assets acquired, less amortization
(1997 - $617,665; 1996 - $569,527) 3,371,963 3,393,931
Investments and other assets 204,844 195,001
--------------- ---------------
Total intangible and other assets 3,576,807 3,588,932
--------------- ---------------
Total assets $ 6,322,413 $ 6,349,597
=============== ===============
LIABILITIES & SHAREHOLDERS' EQUITY
Current maturities of long-term debt $ 20,825 $ 23,302
Accounts payable and current portion of film
contracts payable 211,686 261,838
Compensation, interest and other accruals 226,294 231,358
Dividend payable 51,078 51,890
Income taxes 32,103 46,098
Deferred income 107,091 104,510
--------------- ---------------
Total current liabilities 649,077 718,996
--------------- ---------------
Deferred income taxes 387,182 396,170
Long-term debt, less current portion 1,654,394 1,880,293
Postretirement, medical and life insurance liabilities 304,006 301,729
Other long-term liabilities 148,786 121,591
--------------- ---------------
Total liabilities 3,143,445 3,418,779
--------------- ---------------
Shareholders' Equity
Preferred stock of $1 par value per share. Authorized
2,000,000 shares; issued - none.
Common stock of $1 par value per share. Authorized
400,000,000; issued, 162,210,366 shares. 162,210 162,210
Additional paid-in capital 88,201 86,126
Retained earnings 3,882,408 3,654,681
--------------- ---------------
Total 4,132,819 3,903,017
--------------- ---------------
Less treasury stock - 20,484,642 shares and
20,892,661 shares respectively, at cost (925,116) (942,609)
Deferred compensation related to ESOP (28,735) (29,590)
--------------- ---------------
Total shareholders' equity 3,178,968 2,930,818
--------------- ---------------
Total liabilities and shareholders' equity $ 6,322,413 $ 6,349,597
=============== ===============
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
<CAPTION>
Thirteen weeks ended % Inc
June 29, 1997 June 30, 1996 (Dec)
<S> <C> <C> <C>
Net Operating Revenues:
Newspaper advertising $ 656,306 $ 604,980 8.5
Newspaper circulation 232,237 227,260 2.2
Broadcasting 189,245 176,306 7.3
Cable & Security 64,363 57,732 11.5
Other 45,676 43,016 6.2
-------------- -------------- -------
Total 1,187,827 1,109,294 7.1
-------------- -------------- -------
Operating Expenses:
Cost of sales and operating expenses,
exclusive of depreciation 575,646 587,515 (2.0)
Selling, general and administrative
expenses, exclusive of depreciation 179,787 168,590 6.6
Depreciation 49,976 49,034 1.9
Amortization of intangible assets 24,898 23,481 6.0
-------------- -------------- -------
Total 830,307 828,620 0.2
-------------- -------------- -------
Operating income 357,520 280,674 27.4
-------------- -------------- -------
Non-operating income (expense):
Interest expense (24,783) (38,403) (35.5)
Other (1,004) (657) 52.8
-------------- -------------- -------
Total (25,787) (39,060) (34.0)
-------------- -------------- -------
Income before income taxes 331,733 241,614 37.3
Provision for income taxes 137,000 104,375 31.3
-------------- -------------- -------
Income from continuing operations 194,733 137,239 41.9
Discontinued operations:
Income from discontinued operations,
net of income taxes 12,777 (100.0)
-------------- -------------- -------
Net income $ 194,733 $ 150,016 29.8
============== ============== =======
Earnings per share:
Earnings from continuing operations $1.38 $0.98 40.8
Earnings from discontinued
operations, net of tax 0.09 (100.0)
-------- -------- -------
Net income per share $1.38 $1.07 29.0
==== ==== ====
Dividends per share $0.36 $0.35 2.9
==== ==== ====
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
<CAPTION>
Twenty-six weeks ended % Inc
June 29, 1997 June 30, 1996 (Dec)
<S> <C> <C> <C>
Net Operating Revenues:
Newspaper advertising $ 1,249,858 $ 1,161,865 7.6
Newspaper circulation 465,607 456,677 2.0
Broadcasting 339,851 317,994 6.9
Cable & Security 125,909 114,344 10.1
Other 83,359 82,297 1.3
-------------- -------------- ---------
Total 2,264,584 2,133,177 6.2
-------------- -------------- ---------
Operating Expenses:
Cost of sales and operating expenses,
exclusive of depreciation 1,142,168 1,178,030 (3.0)
Selling, general and administrative
expenses, exclusive of depreciation 354,578 337,297 5.1
Depreciation 99,758 97,871 1.9
Amortization of intangible assets 49,740 46,996 5.8
-------------- -------------- ---------
Total 1,646,244 1,660,194 (0.8)
-------------- -------------- ---------
Operating income 618,340 472,983 30.7
-------------- -------------- ---------
Non-operating income (expense):
Interest expense (50,401) (77,931) (35.3)
Other (6,092) (2,240) (172.0)
-------------- -------------- ---------
Total (56,493) (80,171) (29.5)
-------------- -------------- ---------
Income before income taxes 561,847 392,812 43.0
Provision for income taxes 232,050 169,125 37.2
-------------- -------------- ---------
Income from continuing operations 329,797 223,687 47.4
Discontinued operations:
Income from discontinued operations,
net of income taxes 15,679 (100.0)
-------------- -------------- ---------
Net income $ 329,797 $ 239,366 37.8
============== ============== =========
Earnings per share:
Earnings from continuing operations $2.33 $1.59 46.5
Earnings from discontinued
operations, net of tax 0.11 (100.0)
-------- -------- --------
Net income per share $2.33 $1.70 37.1
==== ==== ====
Dividends per share $0.72 $0.70 2.9
==== ==== ====
</TABLE>
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
<CAPTION>
Twenty-six weeks ended
June 29, 1997 June 30, 1996
<S> <C> <C>
Cash flows from operating activities
Net income $ 329,797 $ 239,366
Adjustments to reconcile net income to
operating cash flows:
Discontinued operations 0 15,679
Depreciation 99,758 97,871
Amortization of intangibles 49,740 46,996
Deferred income taxes (8,988) (8,796)
Gain on sale of assets (58) (405)
Other, net 978 (61,325)
--------- ---------
Net cash flow from operating activities 471,227 329,386
--------- ---------
Cash flows from investing activities
Purchase of property, plant & equipment (92,128) (106,642)
Payments for acquisitions, net of cash acquired (50,041) 0
Change in other investments (4,553) (9,183)
Proceeds from sale of certain assets 8,199 4,720
Collection of long-term receivables 3,448 791
--------- ---------
Net cash used for investing activities (135,075) (110,314)
--------- ---------
Cash flow from financing activities
Payments of long-term debt (228,376) (149,695)
Dividends paid (102,069) (96,990)
Proceeds from issuance of common stock 19,802 13,864
--------- ---------
Net cash used for financing activities (310,643) (232,821)
--------- ---------
Effect of currency exchange rate change 0 89
--------- ---------
Net increase (decrease) in cash and cash equivalents 25,509 (13,660)
Balance of cash & cash equivalents at
beginning of year 31,202 46,985
--------- ---------
Balance of cash and cash equivalents at
end of second quarter $ 56,711 $ 33,325
========= =========
</TABLE>
<PAGE>
<TABLE>
BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
<CAPTION>
Thirteen weeks ended % Inc
June 29, 1997 June 30, 1996 (Dec)
<S> <C> <C> <C>
Operating Revenues:
Newspaper publishing $ 934,219 $ 875,256 6.7
Broadcasting 189,245 176,306 7.3
Cable and Security 64,363 57,732 11.5
--------------- --------------- ---------
Total $ 1,187,827 $ 1,109,294 7.1
=============== =============== =========
Operating Income
(net of depreciation and amortization):
Newspaper publishing $ 263,584 $ 203,079 29.8
Broadcasting 96,991 82,109 18.1
Cable and Security 13,884 12,072 15.0
Corporate (16,939) (16,586) (2.1)
--------------- --------------- ---------
Total $ 357,520 $ 280,674 27.4
=============== =============== =========
Depreciation and Amortization:
Newspaper publishing $ 41,363 $ 40,743 1.5
Broadcasting 14,682 12,899 13.8
Cable and Security 16,659 16,317 2.1
Corporate 2,170 2,556 (15.1)
--------------- --------------- ---------
Total $ 74,874 $ 72,515 3.3
=============== =============== =========
Operating Cash Flow:
Newspaper publishing $ 304,947 $ 243,822 25.1
Broadcasting 111,673 95,008 17.5
Cable and Security 30,543 28,389 7.6
Corporate (14,769) (14,030) (5.3)
--------------- --------------- ---------
Total $ 432,394 $ 353,189 22.4
=============== =============== =========
NOTE:
Operating Cash Flow represents operating income for each of the Company's business
segments plus related depreciation and amortization expense.
</TABLE>
<PAGE>
<TABLE>
BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
<CAPTION>
Twenty-six weeks ended % Inc
June 29, 1997 June 30, 1996 (Dec)
<S> <C> <C> <C>
Operating Revenues:
Newspaper publishing $ 1,798,824 $ 1,700,839 5.8
Broadcasting 339,851 317,994 6.9
Cable and Security 125,909 114,344 10.1
--------------- --------------- -------
Total $ 2,264,584 $ 2,133,177 6.2
=============== =============== =======
Operating Income
(net of depreciation and amortization):
Newspaper publishing $ 470,778 $ 350,050 34.5
Broadcasting 154,391 132,148 16.8
Cable and Security 27,249 23,789 14.5
Corporate (34,078) (33,004) (3.3)
--------------- --------------- -------
Total $ 618,340 $ 472,983 30.7
=============== =============== =======
Depreciation and Amortization:
Newspaper publishing $ 82,512 $ 81,459 1.3
Broadcasting 29,494 26,018 13.4
Cable and Security 33,152 32,278 2.7
Corporate 4,340 5,112 (15.1)
--------------- --------------- -------
Total $ 149,498 $ 144,867 3.2
=============== =============== =======
Operating Cash Flow:
Newspaper publishing $ 553,290 $ 431,509 28.2
Broadcasting 183,885 158,166 16.3
Cable and Security 60,401 56,067 7.7
Corporate (29,738) (27,892) (6.6)
--------------- --------------- -------
Total $ 767,838 $ 617,850 24.3
=============== =============== =======
NOTE:
Operating Cash Flow represents operating income for each of the Company's business
segments plus related depreciation and amortization expense.
</TABLE>
<PAGE>
NOTE TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 29, 1997
1. Basis of Presentation
The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with the instructions
for Form 10-Q and, therefore, do not include all information and
footnotes which are normally included in Form 10-K and annual
report to shareholders. The financial statements covering the 13
and 26 week periods ended June 29, 1997, and the comparative periods
of 1996 reflect all adjustments which, in the opinion of the Company,
are necessary for a fair statement of results for the interim periods.
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Securityholders
(a) The Annual Meeting of Shareholders of Gannett Co., Inc.
was held on May 6, 1997.
(b) The following directors were elected at the meeting:
Drew Lewis Dolores D. Wharton
Thomas A. Reynolds, Jr.
The following directors' term of office continued after
the meeting:
Meredith A. Brokaw Douglas H. McCorkindale
Peter B. Clark John J. Curley
Josephine P. Louis Stuart T.K. Ho
(c) (i) Three directors were re-elected to the Board of
Directors. Tabulation of votes for each of the nominees
is as follows:
For Withhold Authority
Drew Lewis 119,317,644 1,417,955
Thomas A. Reynolds, Jr. 119,214,432 1,521,167
Dolores D. Wharton 118,782,330 1,953,269
(ii) The proposal to elect Price Waterhouse as the
Company's independent auditors was approved. Tabulation
of votes for the proposal is as follows:
For Against Abstain
Election of Independent
Auditors 120,218,804 107,693 409,102
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
See Exhibit Index for list of exhibits filed with this
report.
(b) Reports on Form 8-K.
(i) Current Report on Form 8-K dated January 14, 1997
in connection with the exchange of radio stations
for a television station, the sale of Multimedia
Entertainment, and restatement of financial
statements.
<PAGE>
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: August 12, 1997 /s/ Larry F. Miller
----------------------------------------
Larry F. Miller
Senior Vice President/Financial
Planning and Controller
Dated: August 12, 1997 /s/ Thomas L. Chapple
----------------------------------------
Thomas L. Chapple
Senior Vice President, General
Counsel and Secretary
<PAGE>
EXHIBIT INDEX
Exhibit
Number Title or Description Location
3-1 By-laws of Gannett Co., Incorporated by reference to
Inc. [reflects all Exhibit 3-1 to Gannett Co.,
amendments through Inc's Form 10-Q for the fiscal
May 6, 1997] quarter ended March 30, 1997.
4-1 $1,000,000,000 Revolving Incorporated by reference
Credit Agreement among to Exhibit 4-1 to Gannett
Gannett Co., Inc. and Co., Inc.'s Form 10-K for
the Banks named therein. the fiscal year ended
December 26, 1993.
4-2 Amendment Number One to Incorporated by reference
$1,000,000,000 Revolving to Exhibit 4-2 to Gannett
Credit Agreement among Co., Inc.'s Form 10-Q for
Gannett Co., Inc. and the fiscal quarter ended
the Banks named therein. June 26, 1994.
4-3 Amendment Number Two to Incorporated by reference
$1,500,000,000 Revolving to Gannett Co., Inc.'s
Credit Agreement among Form 10-K for the fiscal
Gannett Co., Inc. and year ended December 31,
the Banks named therein. 1995.
4-4 Amendment Number Three Incorporated by reference
to $3,000,000,000 to Exhibit 4-4 to Gannett
Revolving Credit Co., Inc.'s Form 10-Q for
Agreement among Gannett the fiscal quarter ended
Co., Inc. and the Banks September 29, 1996.
named therein, dated as
of August 20, 1996.
4-5 Indenture dated as of Incorporated by reference
March 1, 1983 between to Exhibit 4-2 to Gannett
Gannett Co., Inc. and Co., Inc's Form 10-K for the
Citibank, N.A., as fiscal year ended
Trustee. December 29, 1985.
4-6 First Supplemental Incorporated by reference
Indenture dated as of to Exhibit 4 to Gannett
November 5, 1986 among Co., Inc.'s Form 8-K filed
Gannett Co., Inc., on November 9, 1986.
Citibank, N.A., as
Trustee, and Sovran
Bank, N.A., as
Successor Trustee.
4-7 Second Supplemental Incorporated by reference
Indenture dated as of to Exhibit 4 to Gannett Co.,
June 1, 1995 among Inc.'s Form 8-K filed
Gannett Co., Inc., June 15, 1995
NationsBank, N.A., as
Trustee, and Crestar
Bank, as Trustee.
4-8 Rights Plan. Incorporated by reference
to Exhibit 1 to Gannett Co.,
Inc.'s Form 8-K filed on
May 23, 1990.
10-1 Amended and Restated Incorporated by reference to
Gannett Co., Inc. Exhibit 10-1 to Gannett Co.,
Deferred Compensation Inc.'s Form 10-Q for the
Plan. fiscal quarter ended
September 29, 1996.
11 Statement re computation Attached.
of earnings per share.
27 Financial Data Schedule Attached.
Gannett Co., Inc. agrees to furnish to the Securities and Exchange
Commission, upon request, a copy of each agreement with respect to
long-term debt not filed herewith in reliance upon the exemption from
filing applicable to any series of debt which does not exceed 10% of the
total consolidated assets of the registrant.
<TABLE>
CALCULATION OF EARNINGS PER SHARE
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
<CAPTION>
Thirteen weeks ended Twenty-six weeks ended
June 29, 1997 June 30, 1996 June 29, 1997 June 30, 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Income from continuing operations $ 194,733 $ 137,239 $ 329,797 $ 223,687
Income from discontinued operations 12,777 15,679
--------- --------- --------- ---------
Net Income $ 194,733 $ 150,016 $ 329,797 $ 239,366
========= ========= ========= =========
Weighted average
number of
common shares
outstanding 141,621 140,845 141,521 140,763
========= ========= ========= =========
Income per share from continuing operations $1.38 $0.98 $2.33 $1.59
Income per share from discontinued operations 0.09 .11
----- ----- ----- -----
Net income per share $1.38 $1.07 $2.33 $1.70
===== ===== ===== =====
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from the consolidated balance sheets and
statements of income for Gannett Co., Inc. and is
qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-START> DEC-30-1996
<PERIOD-END> JUN-29-1997
<CASH> 44,163
<SECURITIES> 12,548
<RECEIVABLES> 558,578
<ALLOWANCES> 19,299
<INVENTORY> 80,694
<CURRENT-ASSETS> 743,668
<PP&E> 3,523,600
<DEPRECIATION> 1,521,662
<TOTAL-ASSETS> 6,322,413
<CURRENT-LIABILITIES> 649,077
<BONDS> 0
<COMMON> 162,210
0
0
<OTHER-SE> 3,016,758
<TOTAL-LIABILITY-AND-EQUITY> 6,322,413
<SALES> 2,264,584
<TOTAL-REVENUES> 2,264,584
<CGS> 1,142,168
<TOTAL-COSTS> 1,646,244
<OTHER-EXPENSES> 6,092
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 50,401
<INCOME-PRETAX> 561,847
<INCOME-TAX> 232,050
<INCOME-CONTINUING> 329,797
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 329,797
<EPS-PRIMARY> 2.33
<EPS-DILUTED> 0
</TABLE>
