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
March 26, 2000 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 March 26, 2000 was 266,499,524.
<PAGE>
PART I. FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
OPERATIONS
ACQUISITIONS AND DISPOSITIONS
The sale of the assets of the company's cable division for
$2.7 billion was completed on January 31, 2000. Upon closing, an
after-tax gain of approximately $745 million or $2.69 per diluted
share was recognized which, along with the cable segment
operating results, are reported as discontinued operations in the
company's financial statements.
On March 17, 2000, the company completed the acquisition of
WJXX-TV, the ABC affiliate in Jacksonville, Florida. Gannett
continues to own and operate WLTV-TV, the NBC affiliate in
Jacksonville.
EARNINGS SUMMARY
Operating income from continuing operations for the first quarter
of 2000 rose $60.9 million or 21%. Newspaper publishing
earnings were up $59.8 million or 24% for the quarter, reflecting
continued strong classified and national advertising demand,
record operating results at USA TODAY, and the positive impact
of Newsquest plc, a U.K. based newspaper company acquired in
July 1999. Television earnings were up $0.4 million or 1% for the
quarter.
Income from continuing operations for the first quarter rose
$33.0 million or 19%. Earnings per share from continuing operations
was $0.74 (diluted), up 22%.
After-tax income from the operation of the cable division, which
was sold on January 31, 2000, was $2.4 million, and the after-tax
gain from the sale of the cable division was $744.7 million. In
total, discontinued operations contributed $2.70 per share
(diluted). Net income for the quarter was $3.44 per share
(diluted).
NEWSPAPERS
The company completed the acquisition of Newsquest on July 26,
1999, which has a significant impact on operating results
comparisons in the first quarter of 2000 versus the first quarter of
1999.
Reported newspaper publishing revenues rose $172.9 million or
17% in the first quarter, reflecting strong domestic advertising
demand and the impact of revenues at the Newsquest properties.
Newspaper advertising revenues increased by $153.2 million or
21%.
The tables below provide, on a pro forma basis, details of
newspaper ad revenue, including the newly acquired Newsquest
properties, for the first quarter of 2000 and 1999. Advertising
linage and preprint distribution details are also provided below;
however, linage and preprint distribution for Newsquest
publications are not included.
<PAGE>
Advertising revenue, in thousands of dollars (pro forma)
2000 1999 % Change
Local $231,924 $234,548 (1)
National 166,331 144,009 16
Classified 359,257 335,613 7
-------- -------- ----
Total Run-of-Press 757,512 714,170 6
Preprint and other advertising 116,277 107,655 8
-------- -------- ----
Total ad revenue $873,789 $821,825 6
======== ======== ====
Advertising linage, in thousands of inches, and preprint
distribution, in millions (pro forma)
2000 1999 % Change
Local 7,909 7,992 (1)
National 914 783 17
Classified 11,372 10,409 9
-------- -------- ----
Total Run-of-Press linage 20,195 19,184 5
======== ======== ====
Preprint distribution 1,790 1,699 5
======== ======== ====
Pro forma newspaper advertising revenues rose 6% for the
quarter. Local ad revenues and volume declined by 1%. National
ad revenues rose 16% on a volume increase of 17%. Classified ad
revenues increased 7% on a volume increase of 9%. Most of the
company's newspapers, including USA TODAY, recorded solid
gains in advertising revenue. Classified gains were strongest in the
employment and real estate categories.
Reported newspaper circulation revenues increased by $13.7
million or 5% for the first quarter, reflecting the impact of the
Newsquest acquisition. Pro forma net paid daily circulation for the
company's local newspapers declined by less than 1%. Sunday
circulation was lower by 1%. USA TODAY reported an average
daily paid circulation of 2,282,072 in the ABC Publisher's
statement for the 26 weeks ended March 26, 2000, a 1.5%
increase over the comparable period a year ago.
Operating costs for the newspaper segment increased
$113.1 million or 15% for the first quarter, largely due to the added
costs from the Newsquest properties. In total, newsprint expense
decreased 3%. Newsprint consumption rose 14%, while newsprint
prices were significantly lower than in the first quarter of 1999.
The company expects newsprint prices to rise modestly, which will
result in higher newsprint prices for the second half of 2000 versus
the second half of 1999.
Newspaper operating income increased $59.8 million or 24%,
reflecting strong advertising gains throughout the group,
particularly in national and classified advertising, very strong
operating results at USA TODAY, lower newsprint prices, and the
positive impact of the recently acquired Newsquest properties.
TELEVISION
Reported television revenues increased $5.6 million or 3% for the
quarter, while operating costs increased $5.2 million or 5%. On a
pro forma basis, television station revenues increased 2%. Pro
forma local revenues decreased 3%, while national revenues
increased 11%. Reported television operating income increased
$0.4 million or 1% for the quarter. Television comparisons
continue to be impacted by the exchange of Gannett's station in
Austin, TX, for a station in Sacramento, CA, plus other
consideration, which occurred in June 1999.
On March 17, 2000, the company completed the acquisition of
WJXX-TV, the ABC affiliate in Jacksonville, Florida. Gannett
continues to own and operate WTLV-TV, the NBC affiliate in
Jacksonville. This transaction is not expected to materially affect
the operating results of the company. Gannett Television now
consists of 22 television stations reaching 17.4 percent of the U.S.
television market.
NON-OPERATING INCOME AND EXPENSE/PROVISION
FOR INCOME TAXES
Interest expense increased $3.6 million or 22% for the quarter,
reflecting increased commercial paper borrowings due to the 1999
Newsquest acquisition and 1999 and 2000 share repurchases. This
increase, however, was tempered by the pay-down of commercial
paper borrowings during the first quarter from proceeds of the sale
of the cable division and from operating cash flows. Non-
operating expense for the first quarter reflected costs associated
with minority investments in internet businesses, net of interest
earned from cable sale proceeds invested in marketable securities.
The company's effective income tax rate was 39.6% for the
quarter versus 39.8% for the same period last year, reflecting
lower state taxes and the diminished impact of the amortization of
non-deductible intangible assets.
NET INCOME
Income from continuing operations rose $33.0 million or 19% for
the quarter. Diluted earnings per share from continuing operations
rose to $0.74 from $0.61 per share, a 22% increase.
Net income including discontinued operations totaled $950.2
million for the first quarter. Income per share (diluted), including
discontinued operations, was $3.44 for the quarter compared to
$0.64 in 1999. Discontinued operations, including the after-tax
gain on the sale of the cable division and the after-tax earnings of
cable for the weeks leading up to the sale, totaled $747.1 million
or $2.70 per diluted share.
The weighted average number of diluted shares outstanding in the
quarter totaled 276,207,000, compared to 281,677,000 for the
first quarter of 1999. On February 1, 2000, the company
announced that its Board approved a new $500 million share
repurchase authorization. On February 23, 2000, having used a
substantial portion of that authorization, the Board approved an
additional $500 million for share repurchases. During the first
quarter of 2000, the company repurchased approximately 11.7
million shares of common stock at a cost of approximately $776.4
million. These stock repurchases were partially offset by shares
issued upon the exercise of stock options and settlement of stock
incentive rights. Exhibit 11 of this Form 10-Q presents the
weighted average number of basic and diluted shares outstanding
and the earnings per share for each period. Further share
repurchases under the Board's authorization have been completed
in the second quarter of 2000.
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 $437.9 million for the first three months of
2000, compared with $362.2 million for the same period of 1999,
a 21% increase, reflecting strong overall operating results and the
acquisition of Newsquest.
Capital expenditures for the quarter totaled $44.2 million,
compared to $40.9 million in 1999. The company's debt was
reduced by $1.8 billion during the quarter and cash and marketable
securities increased by $347.2 million, reflecting the use of
proceeds from the sale of the cable division. The sale also resulted
in significant decreases in the company's excess of acquisition cost
over the value of assets acquired and its property, plant and
equipment. Current liabilities exceed current assets at the end of
the first quarter primarily as a result of income taxes due on the
gain from the sale of the cable division that will be paid in the
second quarter. This income tax payment is expected to be funded
principally from the liquidation of marketable securities and from
commercial paper borrowings.
The company's foreign currency translation adjustment, included
in accumulated other comprehensive income and reported as part
of shareholders' equity, totaled $1.5 million at the end of the first
quarter versus $14.3 million at the end of 1999, reflecting a
weakening of the British pound against the U.S. dollar since the
end of the year. Newsquest's assets and liabilities at March 26,
2000, were translated from British pounds to U.S. dollars at an
exchange rate of $1.59. Newsquest's operating results during the
first quarter were translated at the average rate of $1.60.
The company's regular quarterly dividend of $0.21 per share was
declared in the first quarter of 2000. Dividends declared totaled
$56.8 million. In May 2000, the company also declared a
quarterly dividend of $0.21 per share payable on July 3, 2000.
In May 2000, the company's shareholders approved an amendment
to the company's certificate of incorporation to increase the
authorized number of shares to 802,000,000 of which 800,000,000
shares shall be common stock and 2,000,000 shares shall be
preferred stock, both with a $1 par value. Refer to Exhibit 3.1 for
additional information.
Also in May 2000, the company announced that its board of
directors approved an amendment to its Shareholder Rights Plan
to extend the expiration date of the Rights to May 31, 2010 and
increase the initial exercise price of each Preferred Stock Purchase
Right to $280. Refer to the 8-K filed by the company on May 2, 2000
for additional information.
OTHER MATTERS
In May 2000, the company announced that Douglas H.
McCorkindale would succeed John J. Curley as chief executive
officer on June 1. Curley will continue as chairman until he retires
early next year when he is 62. McCorkindale, who is 60, is
president and vice chairman. He will continue to hold those titles
until Curley retires when McCorkindale becomes chairman,
president and CEO.
CERTAIN FACTORS AFFECTING FORWARD-LOOKING
STATEMENTS
Certain statements in the company's 1999 Annual Report to
Shareholders, its Annual Report on Form 10-K, and in this
Quarterly Report contain forward-looking information. The words
"expect," "intend," "believe," "anticipate," likely," "will" and
similar expressions generally identify forward-looking statements.
These forward-looking statements are subject to certain risks and
uncertainties which could cause actual results and events to differ
materially from those anticipated in the forward-looking
statements.
Potential risks and uncertainties which could adversely affect the
company's ability to obtain these results include, without
limitation, the following factors: (a) increased consolidation among
major retailers or other events which may adversely affect business
operations of major customers and depress the level of local and
national advertising; (b) an economic downturn in some or all of
the company's principal newspaper or television markets leading
to decreased circulation or local, national or classified advertising;
(c) a decline in general newspaper readership patterns as a result of
competitive alternative media or other factors; (d) an increase in
newsprint or syndication programming costs over the levels
anticipated; (e) labor disputes which may cause revenue declines
or increased labor costs; (f) acquisitions of new businesses or
dispositions of existing businesses; (g) a decline in viewership of
major networks and local news programming; (h) rapid
technological changes and frequent new product introductions
prevalent in electronic publishing; and (i) a weakening in the
British pound to U.S. dollar exchange rate.
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
<CAPTION>
March 26, 2000 Dec. 26, 1999
---------------- ---------------
<S> <C> <C>
ASSETS
Cash $ 59,571 $ 46,148
Marketable securities 333,757 12
Trade receivables, less allowance
(2000 - $29,288; 1999 - $30,694) 695,996 800,682
Inventories 99,272 95,014
Prepaid expenses and other receivables 93,727 133,366
---------------- ---------------
Total current assets 1,282,323 1,075,222
---------------- ---------------
Property, plant and equipment
Cost 3,475,861 3,883,912
Less accumulated depreciation (1,591,080) (1,660,060)
---------------- ---------------
Net property, plant and equipment 1,884,781 2,223,852
---------------- ---------------
Intangible and other assets
Excess of acquisition cost over the value of
assets acquired, less amortization 4,715,355 5,398,227
Investments and other assets 323,702 309,145
---------------- ---------------
Total intangible and other assets 5,039,057 5,707,372
---------------- ---------------
Total assets $ 8,206,161 $ 9,006,446
================ ===============
<PAGE>
LIABILITIES & SHAREHOLDERS' EQUITY
Accounts payable and current portion of film
contracts payable $ 305,756 $ 348,589
Compensation, interest and other accruals 233,498 271,495
Dividend payable 56,755 58,297
Income taxes 1,180,093 77,553
Deferred income 117,277 127,844
---------------- ---------------
Total current liabilities 1,893,379 883,778
---------------- ---------------
Deferred income taxes 363,137 479,547
Long-term debt, less current portion 650,492 2,463,250
Postretirement medical and life insurance liabilities 304,061 304,400
Other long-term liabilities 255,688 245,825
---------------- ---------------
Total liabilities 3,466,757 4,376,800
---------------- ---------------
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, 324,420,732 shares. 324,421 324,421
Additional paid-in capital 154,413 153,267
Retained earnings 6,398,147 5,504,810
Accumulated other comprehensive income 9,895 25,377
---------------- ---------------
Total 6,886,876 6,007,875
---------------- ---------------
Less treasury stock - 57,921,208 shares and
46,494,301 shares respectively, at cost (2,129,867) (1,359,263)
Deferred compensation related to ESOP (17,605) (18,966)
---------------- ---------------
Total shareholders' equity 4,739,404 4,629,646
---------------- ---------------
Total liabilities and shareholders' equity $ 8,206,161 $ 9,006,446
================ ===============
</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
March 26, 2000 March 28, 1999 (Dec)
------------- ------------- -----
<S> <C> <C> <C>
Net Operating Revenues:
Newspaper advertising $ 873,789 $ 720,551 21.3
Newspaper circulation 267,062 253,357 5.4
Television 166,789 161,194 3.5
Other 56,803 50,837 11.7
------------- ------------ -----
Total 1,364,443 1,185,939 15.1
Operating Expenses:
Cost of sales and operating expenses,
exclusive of depreciation (1) 700,696 629,881 11.2
Selling, general and administrative
expenses, exclusive of
depreciation (1) 225,855 193,837 16.5
Depreciation 46,608 42,715 9.1
Amortization of intangible assets 33,766 22,914 47.4
------------- ------------ -----
Total 1,006,925 889,347 13.2
------------- ------------ -----
Operating income 357,518 296,592 20.5
Non-operating income (expense):
Interest expense (20,175) (16,592) 21.6
Other (1,326) 2,368 --
------------- ------------ -----
Total (21,501) (14,224) 51.2
Income before income taxes 336,017 282,368 19.0
Provision for income taxes 133,000 112,400 18.3
------------- ------------ -----
Income from continuing operations 203,017 169,968 19.4
Discontinued operations:
Income from the operation of
discontinued operations, net of tax 2,437 8,925 (72.7)
Gain on sale of cable business,
net of tax 744,700 --
------------- ------------ -----
Net income $ 950,154 $ 178,893 --
============= ============ =====
Earnings from continuing
operations per share-basic $0.74 $0.61 21.8
Earnings from discontinued operations:
Earnings from the operation of
discontinued operations per
share-basic $0.01 $0.03 (72.2)
Gains on sale of cable business
per share-basic $2.72 --
----- ----- -----
Net income per share-basic $3.47 $0.64 --
===== ===== =====
Earnings from continuing
operations per share-diluted $0.74 $0.61 21.8
Earnings from discounted operations:
Earnings from the operation of
discountinued operations per
share-diluted $0.01 $0.03 (72.2)
Gain on sale of cable business
per share-diluted $2.69 --
----- ----- -----
Net income per share-diluted $3.44 $0.64 --
===== ===== =====
Dividends per share $0.21 $0.20 5.0
===== ===== =====
(1) Certain 1999 amounts have been reclassified to conform with the current
year presentation.
</TABLE>
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
<CAPTION>
Thirteen weeks ended
March 26, 2000 March 28, 1999
-------------- --------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 950,154 $ 178,893
Adjustments to reconcile net income to
operating cash flows:
Discontinued operations (2,437) (8,925)
Depreciation 46,608 43,435
Amortization of intangibles 33,766 23,262
Deferred income taxes (116,410) 3,498
Other, net (491,929) 141,099
--------- ---------
Net cash flow from operating activities 419,752 381,262
--------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment (44,224) (40,918)
Payments for acquisitions, net of cash acquired (89,384) (500)
Change in other investments (12,899) (5,666)
Proceeds from sale of certain assets 2,714,362 2,500
Collection of long-term receivables 1,900 0
--------- ---------
Net cash provided by (used for) investing activities 2,569,755 (44,584)
--------- ---------
Cash flows from financing activities
Payment of long-term debt (1,812,758) (315,717)
Dividends paid (58,358) (55,694)
Cost of common shares repurchased (776,410) 0
Proceeds from issuance of common stock 5,378 5,782
--------- ---------
Net cash used for financing activities (2,642,148) (365,629)
--------- ---------
Effect of currency exchange rate change (191)
--------- ---------
Net increase (decrease) in cash and cash equivalents 347,168 (28,951)
Balance of cash and cash equivalents at
beginning of year 46,160 66,187
--------- ---------
Balance of cash and cash equivalents at
end of first quarter $ 393,328 $ 37,236
========= =========
</TABLE>
<PAGE>
<TABLE>
BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
<CAPTION>
Thirteen weeks ended % Inc
March 26, 2000 March 28, 1999 (Dec)
-------------- -------------- -----
<S> <C> <C> <C>
Operating Revenues:
Newspaper publishing $1,197,654 $1,024,745 16.9
Television 166,789 161,194 3.5
------------- ------------ -----
Total $1,364,443 $1,185,939 15.1
============= ============ =====
Operating Income (net of
depreciation and amortization):
Newspaper publishing $307,435 $247,675 24.1
Television 66,127 65,717 0.6
Corporate (16,044) (16,800) 4.5
------------- ------------ -----
Total $357,518 $296,592 20.5
============= ============ =====
Depreciation and Amortization:
Newspaper publishing $62,289 $47,697 30.6
Television 16,126 15,708 2.7
Corporate 1,959 2,224 (11.9)
------------- ------------ -----
Total $80,374 $65,629 22.5
============= ============ =====
Operating Cash Flow:
Newspaper publishing $369,724 $295,372 25.2
Television 82,253 81,425 1.0
Corporate (14,085) (14,576) 3.4
------------- ------------ -----
Total $437,892 $362,221 20.9
============= ============ =====
NOTE:
Operating Cash Flow represents operating income for each of the company's
business segments plus related depreciation and amortization expense.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
March 26, 2000
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 the Form 10-K and annual
report to shareholders. The financial statements covering the 13-week
period ended March 26, 2000, and the comparative period of
1999, reflect all adjustments which, in the opinion of the company,
are necessary for a fair statement of results for the interim periods.
2. Accounting Standards
In June 1998, SFAS No. 133, "Accounting for Derivative Instruments
and Hedging Activities" was issued. This standard is effective
for fiscal periods beginning after June 15, 2000. The adoption
of this standard is not expected to have a material effect on the
company's results of operations or financial position.
3. Comprehensive Income
SFAS No. 130, "Reporting Comprehensive Income" established standards for
reporting comprehensive income. Comprehensive income for the company includes
net income, foreign currency translation adjustments and unrealized gains on
available-for-sale securities, as defined under SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities". Comprehensive income
totaled $934.7 million for the first quarter. Other comprehensive income
relates to foreign currency translation adjustments and unrealized gains on
available-for-sale securities, net of tax. The accumulated other comprehensive
income was net of a deferred income tax liability of $6.3 million at March 26,
2000.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The company is not subject to market risk associated with derivative financial
instruments or derivative commodity instruments, as the company is not a party
to any such instruments. The company believes that its market risk from other
financial instruments, such as accounts receivable, accounts payable and debt,
is not material. The company is exposed to foreign exchange rate risk primarily
due to its acquisition of Newsquest, which uses British pounds as its
functional currency which is then translated into U.S. dollars.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
See Exhibit Index for list of exhibits filed with this
report.
(b) (i) Current Report on Form 8-K dated February 15, 2000, in
connection with the company's sale of its cable business.
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: May 4, 2000 By: /s/George R. Gavagan
------------------------------------
George R. Gavagan
Vice President and Controller
Dated: May 4, 2000 By: /s/Thomas L. Chapple
------------------------------------
Thomas L. Chapple
Senior Vice President, General
Counsel and Secretary
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit Location
3-1 Second Restated Certificate Incorporated by reference to Exhibit
of Incorporation of Gannett Co., 3-1 to Gannett Co., Inc.'s Form 10-K
Inc. for the fiscal year ended December 26,
1993 ("1993 Form 10-K"). Amendment
incorporated by reference to Exhibit
3-1 to the 1993 Form 10-K. Amendment
dated May 2, 2000, attached.
3-2 By-laws of Gannett Co., Inc. Incorporated by reference to Exhibit
(reflects all amendments 3-1 to Gannett Co., Inc.'s Form 10-Q
through September 24, 1997) for the fiscal quarter ended
September 28, 1997.
4-1 $1,000,000,000 Revolving Incorporated by reference to Exhibit
Credit Agreement among 4-1 to the 1993 Form 10-K.
Gannett Co., Inc. and the
Banks named therein.
4-2 Amendment Number One Incorporated by reference to Exhibit
to $1,000,000,000 Revolving 4-2 to Gannett Co., Inc.'s Form 10-Q
Credit Agreement among for the fiscal quarter ended June 26,
Gannett Co., Inc. and the 1994.
Banks named therein.
4-3 Amendment Number Two to Incorporated by reference to Exhibit
$1,500,000,000 Revolving 4-3 to Gannett Co., Inc.'s Form 10-K
Credit Agreement among for the fiscal year ended
Gannett Co., Inc. and the December 31, 1995.
Banks named therein.
4-4 Amendment Number Three to Incorporated by reference to Exhibit
$3,000,000,000 Revolving 4-4 to Gannett Co., Inc.'s Form 10-Q
Credit Agreement among for the fiscal quarter ended
Gannett Co., Inc. and the Banks September 29, 1996.
named therein.
4-5 Indenture dated as of March 1, Incorporated by reference to Exhibit
1983 between Gannett Co., Inc. 4-2 to Gannett Co., Inc.'s Form 10-K
and Citibank, N.A., as Trustee. for the fiscal year ended
December 29, 1985.
4-6 First Supplemental Indenture Incorporated by reference to Exhibit
dated as of November 5, 1986 4 to Gannett Co., Inc.'s Form 8-K
among Gannett Co., Inc., filed on November 9, 1986.
Citibank, N.A., as Trustee, and
Sovran Bank, N.A., as Successor
Trustee.
4-7 Second Supplemental Indenture Incorporated by reference to
dated as of June 1, 1995, Exhibit 4 to Gannett Co., Inc.'s
among Gannett Co., Inc., Form 8-K filed on 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.
Amendment incorporated by reference
to Gannett Co., Inc.'s Form 8-K
filed on May 2, 2000.
4-9 Amendment Number Four to Incorporated by reference to
$3,000,000,000 Revolving Exhibit 4-9 to Gannett Co., Inc.'s
Credit Agreement among Form 10-Q filed on August 12, 1998.
Gannett Co., Inc. and the
Banks named therein.
10-1 Employment Agreement dated Incorporated by reference to Gannett
December 7, 1992 between Co., Inc.'s Form 10-K for the fiscal
Gannett Co., Inc. and John J. year ended December 27, 1992 ("1992
Curley.* Form 10-K").
10-2 Employment Agreement dated Incorporated by reference to the 1992
December 7, 1992 between Form 10-K.
Gannett Co., Inc. and Douglas H.
McCorkindale.*
10-3 Gannett Co., Inc. 1978 Incorporated by reference to Exhibit
Executive Long-Term Incentive 10-3 to Gannett Co., Inc.'s Form 10-K
Plan* for the fiscal year ended
December 28, 1980. Amendment No. 1
incorporated by reference to
Exhibit 20-1 to Gannett Co., Inc.'s
Form 10-K for the fiscal year ended
December 27, 1981. Amendment No. 2
incorporated by reference to
Exhibit 10-2 to Gannett Co., Inc.'s
Form 10-K for the fiscal year ended
December 25, 1983. Amendments Nos. 3
and 4 incorporated by reference to
Exhibit 4-6 to Gannett Co., Inc.'s
Form S-8 Registration Statement
No. 33-28413 filed on May 1, 1989.
Amendments Nos. 5 and 6 incorporated
by reference to Exhibit 10-8 to
Gannett Co., Inc.'s Form 10-K for the
fiscal year ended December 31, 1989.
Amendment No. 7 incorporated by
reference to Gannett Co., Inc.'s
Form S-8 Registration Statement
No. 333-04459 filed on May 24, 1996.
Amendment No. 8 incorporated by
reference to Exhibit 10-3 to Gannett
Co., Inc.'s Form 10-Q for the quarter
ended September 28, 1997. Amendment
dated December 9, 1997, incorporated
by reference to Gannett Co., Inc.'s
1997 Form 10-K. Amendment No. 9
incorporated by reference to Exhibit
10-3 to Gannett Co., Inc.'s Form 10-Q
for the quarter ended June 27, 1999.
10-4 Description of supplemental Incorporated by reference to Exhibit
insurance benefits.* 10-4 to the 1993 Form 10-K.
10-5 Gannett Co., Inc. Supplemental Incorporated by reference to Exhibit
Retirement Plan, as amended.* 10-5 to Gannett Co., Inc.'s Form 10-K
for the fiscal year ended
December 26, 1999.
10-6 Gannett Co., Inc. Retirement Incorporated by reference to Exhibit
Plan for Directors.* 10-10 to the 1986 Form 10-K. 1991
Amendment incorporated by reference
to Exhibit 10-2 to Gannett Co.,
Inc.'s Form 10-Q for the quarter
ended September 29, 1991. Amendment
to Gannett Co., Inc. Retirement
Plan for Directors dated October 31,
1996, incorporated by reference to
Exhibit 10-6 to the 1996 Form 10K.
10-7 Amended and Restated Incorporated by reference to Exhibit
Gannett Co., Inc. 1987 10-1 to Gannett Co., Inc.'s Form 10-Q
Deferred Compensation Plan.* for the fiscal quarter ended
September 29, 1996. Amendment No. 5
incorporated by reference to Exhibit
10-2 to Gannett Co., Inc.'s Form 10-Q
for the quarter ended September 28,
1997. Amendment No. 2 to January 1,
1997 Restatement incorporated by
reference to Exhibit 10-7 to
Gannett Co., Inc.'s Form 10-Q for the
quarter ended June 27, 1999.
10-8 Gannett Co., Inc. Transitional Incorporated by reference to Exhibit
Compensation Plan.* 10-13 to Gannett Co., Inc.'s Form
10-K for the fiscal year ended
December 30, 1990.
11 Statement re computation of Attached.
earnings per share.
27 Financial Data Schedules. Attached.
The company agrees to furnish to the 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 company.
* Asterisks identify management contracts and compensatory plans
or arrangements.
<PAGE>
CERTIFICATE OF SECOND AMENDMENT
OF THE
SECOND RESTATED CERTIFICATE OF
INCORPORATION
OF
GANNETT CO., INC.
The undersigned, being the Vice Chairman and President
of Gannett Co., Inc. (the "Corporation"), a corporation
organized and existing under the laws of the State of
Delaware, hereby certifies that a second amendment of the
Second Restated Certificate of Incorporation of the
Corporation has been duly adopted by the Board of Directors
and the Stockholders of the Corporation, in accordance with
Section 242 of the Delaware General Corporation Law, as follows:
Article "FOURTH" is amended to read in its entirety as
follows:
FOURTH: The total number of shares of all
classes of stock which the Corporation shall have authority
to issue is Eight Hundred Two Million (802,000,000) shares
of which Eight Million (800,000,000) shares shall be
Common Stock of the par value of One Dollar ($1.00) per
share and Two Million (2,000,000) shares shall be
Preferred Stock of the par value of One Dollar ($1.00) per
share. A statement of the designations of the authorized
classes of stock or of any series thereof, and the powers,
preferences and relative, participating, optional or other
special rights and qualifications, limitations or restrictions
thereof, or of the authority of the Board of Directors to fix
by resolution or resolutions such designations and
other terms, is as follows:
A. Preferred Stock. The shares of Preferred
Stock may be issued from time to time in one or more
series. The Board of Directors is hereby vested with
authority to fix by resolution or resolutions the
designation of each series of Preferred Stock and the
powers, preferences and relative, participating, optional or
other special rights and qualifications, limitations or
restrictions thereof, including without limiting the generality
of the foregoing, such provisions as may be desired
concerning the dividend rights, the dividend rate, conversion
rate, conversion rights, voting rights, rights in terms of
redemption (including sinking fund provisions), the
redemption price or prices, and the liquidation preferences
and such other subjects or matters as may be fixed by
resolution or resolutions of the Board of Directors
under the General Corporation Law of Delaware; and to fix
the number of shares constituting any such series, and to
increase or decrease the number of shares of any such series
(but not below the number of shares thereof then
outstanding). In case the number of shares of any such
series shall be so decreased, the shares constituting such
decrease shall resume the status which they had prior to the
adoption of the resolution or resolutions originally fixing the
number of shares of such series.
B. Common Stock. Subject to all of the
preferences and rights of the Preferred Stock or a series
thereof that may be fixed by a resolution or resolutions of
the Board of Directors, (i) dividends may be paid on the
Common Stock of the Corporation as and when declared by
the Board of Directors, out of funds of the Corporation
legally available for the payment of such dividends, and (ii)
each share of the Common Stock of the Corporation will be
entitled to one vote on all matters on which such stock is
entitled to vote.
IN WITNESS WHEREOF, the undersigned has subscribed this
Certificate by order of the Board of Directors of the
Corporation and hereby affirms under penalties of perjury
that the facts stated herein are true this 2nd day of May, 2000.
/s/Douglas H. McCorkindale
________________________________
Douglas H. McCorkindale
Vice Chairman and President
ATTEST:
/s/Thomas L. Chapple
_______________________________
Thomas L. Chapple
Secretary
CALCULATION OF EARNINGS PER SHARE
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
<TABLE>
Thirteen weeks ended
March 26, March 28,
2000 1999
------------ -----------
<S> <C> <C>
Basic earnings:
Income from continuing operations $203,017 $169,968
Discontinued operations:
Earnings from operation of
cable business $2,437 $8,925
Gain on sale of cable business $744,700 $0
Net income $950,154 $178,893
Weighted average number of
common shares outstanding 273,958 279,314
Earnings from continuing
operations per share-basic $0.74 $0.61
Earnings from the operation of
cable business per share-basic $0.01 $0.03
Gains on sale of cable business
per share-basic $2.72 $0.00
Basic earnings per share $3.47 $0.64
Diluted earnings:
Income from continuing operations $203,017 $169,968
Discontinued operations:
Earnings from operation of
cable business $2,437 $8,925
Gain on sale of cable business $744,700 $0
Net income $950,154 $178,893
Weighted average number of
common shares outstanding 273,958 279,314
Dilutive effect of outstanding 2,249 2,363
stock options and stock
incentive rights
Weighted average number of
shares outstanding, as adjusted 276,207 281,677
Earnings from continuing
operations per share-diluted $0.74 $0.61
Earnings from the operation of
cable business per share-diluted $0.01 $0.03
Gains on sale of cable business
per share-diluted $2.69 $0.00
Diluted earnings per share $3.44 $0.64
</TABLE>
<PAGE>
<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> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> DEC-27-1999
<PERIOD-END> MAR-26-2000
<CASH> 59,571
<SECURITIES> 333,757
<RECEIVABLES> 725,284
<ALLOWANCES> 29,288
<INVENTORY> 99,272
<CURRENT-ASSETS> 1,282,323
<PP&E> 3,475,861
<DEPRECIATION> 1,591,080
<TOTAL-ASSETS> 8,206,161
<CURRENT-LIABILITIES> 1,893,379
<BONDS> 0
<COMMON> 324,421
0
0
<OTHER-SE> 4,414,983
<TOTAL-LIABILITY-AND-EQUITY> 8,206,161
<SALES> 1,364,443
<TOTAL-REVENUES> 1,364,443
<CGS> 700,696
<TOTAL-COSTS> 1,006,925
<OTHER-EXPENSES> 1,326
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,175
<INCOME-PRETAX> 336,017
<INCOME-TAX> 133,000
<INCOME-CONTINUING> 203,017
<DISCONTINUED> 747,137
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 950,154
<EPS-BASIC> 3.47
<EPS-DILUTED> 3.44
<PAGE>
</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> 3-MOS
<FISCAL-YEAR-END> DEC-26-1999
<PERIOD-START> DEC-28-1998
<PERIOD-END> MAR-28-1998
<CASH> 37,224
<SECURITIES> 12
<RECEIVABLES> 627,441
<ALLOWANCES> 18,003
<INVENTORY> 87,603
<CURRENT-ASSETS> 806,205
<PP&E> 3,705,766
<DEPRECIATION> 1,652,178
<TOTAL-ASSETS> 6,847,262
<CURRENT-LIABILITIES> 765,317
<BONDS> 0
<COMMON> 324,421
0
0
<OTHER-SE> 3,786,986
<TOTAL-LIABILITY-AND-EQUITY> 6,847,262
<SALES> 1,185,939
<TOTAL-REVENUES> 1,185,939
<CGS> 629,881
<TOTAL-COSTS> 889,347
<OTHER-EXPENSES> (2,368)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,592
<INCOME-PRETAX> 282,368
<INCOME-TAX> 112,400
<INCOME-CONTINUING> 169,968
<DISCONTINUED> 8,925
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 178,893
<EPS-BASIC> 0.64
<EPS-DILUTED> 0.64
<PAGE>
</TABLE>
