<PAGE> 1
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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) October 31, 1996
------------------------------
Garden State Newspapers, Inc.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 22-2675173
- ------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1560 Broadway, Suite 1450, Denver, CO 80202
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 837-0886
----------------------------
N/A
- ------------------------------------------------------------------------------
(Former name or former address, if changed since last
report.)
Amendment No. 1
The Company's current report on Form 8-K, dated November 13, 1996, is
hereby amended and supplemented as follows.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
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<PAGE> 2
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
The following Financial Statements and Pro Forma Financial Information are
hereby filed as a part of this report.
(a) Financial Statements of Business Acquired
(1) Audited combined financial statements of the operations and
the assets acquired and liabilities assumed in conjunction
with the October 31, 1996, acquisition of the Pasadena
Star-News, Whittier Daily Review, San Gabriel Valley Tribune,
Times Standard, The Evening Sun and various related
publications for the nine months ended September 28, 1996 and
years ended December 30, 1995 and December 31, 1994,
respectively.
(b) Pro Forma Financial Information (Unaudited)
(1) Pro forma condensed consolidated balance sheet as of
September 30, 1996.
(2) Pro forma condensed consolidated statement of operations for
the three months ended September 30, 1996 and the year ended
June 30, 1996.
<PAGE> 3
GARDEN STATE NEWSPAPERS, INC.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The accompanying unaudited pro forma consolidated statements of operations for
the three months ended September 30, 1996, and the year ended June 30, 1996,
give effect to the acquisition of substantially all the assets and liabilities
used in publishing the Pasadena Star-News, Whittier Daily News, San Gabriel
Valley Tribune, Times- Standard, The Evening Sun and various related
publications, collectively referred to as the "Acquisition," as if the
Acquisition had occurred on July 1, 1996 and July 1, 1995, respectively.
These pro forma statements are not necessarily indicative of the future
operations or of the consolidated results of operations had the Acquisition
actually taken place on July 1, 1996 or July 1, 1995. The pro forma financial
information should be read in conjunction with the Company's historical
financial statements and notes thereto appearing in the Company's Forms 10-K
and 10-Q for the periods ending June 30, 1996 and September 30, 1996,
respectively.
<PAGE> 4
GARDEN STATE NEWSPAPERS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 1996
(Amounts in Thousands)
<TABLE>
<CAPTION>
ASSETS Acquisition
and
As Pro Forma
Reported Adjustments Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents ..................................... $ 2,630 $ 4 $ 2,634
Accounts receivable, less allowance
for doubtful accounts ........................................ 27,496 6,001 33,497
Inventories of newsprint and supplies ......................... 4,347 1,153(a) 5,500
Prepaid expenses and other assets ............................. 3,906 207 4,113
------------ ------------ ------------
TOTAL CURRENT ASSETS ...................................... 38,379 7,365 45,744
PROPERTY, PLANT AND EQUIPMENT
Land .......................................................... 5,184 2,678(b) 7,862
Buildings and improvements .................................... 32,702 6,935(b) 39,637
Machinery and equipment ....................................... 89,408 28,852(b) 118,260
------------ ------------ ------------
Total Property, Plant and Equipment ....................... 127,294 38,465 165,759
Less accumulated depreciation and amortization ................ (52,274) -- (c) (52,274)
------------ ------------ ------------
Net Property, Plant and Equipment ......................... 75,020 38,465 113,485
OTHER ASSETS
Investment in partnership ..................................... 6,091 -- 6,091
Subscriber accounts, net of accumulated
amortization ................................................. 42,565 16,200(b) 58,765
Excess of cost over fair value of net assets acquired,
net of accumulated amortization .............................. 65,252 75,192(d) 140,444
Covenants not to compete and other identifiable
intangible assets, net of accumulated amortization ........... 8,025 -- 8,025
Other ......................................................... 1,896 -- 1,896
------------ ------------ ------------
TOTAL OTHER ASSETS ........................................ 123,829 91,392 215,221
------------ ------------ ------------
TOTAL ASSETS .................................................... $ 237,228 $ 137,222 $ 374,450
============ ============ ============
</TABLE>
See notes to unaudited pro forma financial information.
<PAGE> 5
GARDEN STATE NEWSPAPERS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 1996
(In Thousands)
<TABLE>
<CAPTION>
Acquisition
and
As Pro Forma
Reported Adjustments Pro Forma
------------ ------------ ------------
LIABILITIES AND SHAREHOLDERS' DEFICIT
<S> <C> <C> <C>
CURRENT LIABILITIES
Trade accounts payable .................... $ 5,183 $ 449 $ 5,632
Accrued liabilities ....................... 17,656 4,470 (e) 22,126
Unearned income ........................... 6,984 2,353 9,337
Income taxes .............................. 488 -- 488
Current portion of long-term debt and
capital lease obligation ................ 11,237 10,000 (f) 21,237
------------ ------------ ------------
TOTAL CURRENT LIABILITIES ............. 41,548 17,272 58,820
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATION ................................. 199,204 119,950 (g) 319,154
OTHER LIABILITIES ........................... 6,320 -- 6,320
DEFERRED INCOME TAXES ....................... 11,686 -- 11,686
SHAREHOLDERS' DEFICIT
Common stock .............................. 1 -- 1
Additional paid in capital ................ 78,570 -- 78,570
Deficit ................................... (100,101) -- (100,101)
------------ ------------ ------------
TOTAL SHAREHOLDERS' DEFICIT ............. (21,530) -- (21,530)
------------ ------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS'
DEFICIT ................................. $ 237,228 $ 137,222 $ 374,450
============ ============ ============
</TABLE>
See notes to unaudited pro forma financial information.
<PAGE> 6
GARDEN STATE NEWSPAPERS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended September 30, 1996
(In Thousands)
<TABLE>
<CAPTION>
Acquisition
and
As Pro Forma
Reported Adjustments Pro Forma
------------ ------------ ------------
<S> <C> <C> <C>
OPERATING REVENUES .......................... $ 61,080 $ 16,974 $ 78,054
COST AND EXPENSES
Cost of sales ............................. 23,568 5,560(a)(c)(e) 29,128
Selling, general, and administrative ...... 26,518 6,957(b)(c)(d) 33,475
Depreciation and amortization ............. 5,138 1,613(f) 6,751
Interest expense .......................... 6,334 2,477(g) 8,811
Other, (net) ............................ 207 -- 207
------------ ------------ ------------
TOTAL COST AND EXPENSES ............... 61,765 16,607 78,372
------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME
TAXES ..................................... (685) 367 (318)
INCOME TAX EXPENSE .......................... (53) (16)(h) (69)
------------ ------------ ------------
NET INCOME (LOSS) ........................... $ (738) $ 351 $ (387)
============ ============ ============
</TABLE>
See notes to unaudited pro forma financial information.
<PAGE> 7
GARDEN STATE NEWSPAPERS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended June 30, 1996
(In Thousands)
<TABLE>
<CAPTION>
Acquisition
and
As Pro Forma
Reported Adjustments Pro Forma
-------------- -------------- --------------
<S> <C> <C> <C>
OPERATING REVENUES .......................... $ 245,430 $ 68,912 $ 314,342
COST AND EXPENSES
Cost of sales ............................. 98,469 28,700(a)(c)(e) 127,169
Selling, general, and administrative ...... 102,238 24,611(b)(c)(d) 126,849
Depreciation and amortization ............. 21,841 6,453(f) 28,294
Interest expense .......................... 27,414 9,909(g) 37,323
Other, (net) ............................ 4,511 -- 4,511
-------------- -------------- --------------
TOTAL COST AND EXPENSES ............... 254,473 69,673 324,146
GAIN ON SALE OF NEWSPAPER PROPERTY .......... 8,291 -- 8,291
-------------- -------------- --------------
LOSS BEFORE INCOME TAXES .................... (752) (761) (1,513)
INCOME TAX BENEFIT .......................... 2,012 -- (h) 2,012
-------------- -------------- --------------
NET INCOME (LOSS) ........................... $ 1,260 $ (761) $ 499
============== ============== ==============
</TABLE>
See notes to unaudited pro forma financial information.
<PAGE> 8
GARDEN STATE NEWSPAPERS, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
NOTE 1: UNAUDITED PRO FORMA BALANCE SHEETS
(a) Adjust newsprint inventory to the Company's historical cost
during the applicable period.
(b) Record property, plant and equipment and subscriber lists at
their estimated fair market value at the date of acquisition.
(c) Eliminate historical accumulated depreciation on the plant and
equipment acquired.
(d) Record the excess of cost over the fair market value of assets
acquired.
(e) Accrued liabilities has been adjusted to accrue the estimated
organization, closing and other cost associated with completing
the Acquisition.
(f) Record the current portion of long-term debt incurred in the
Acquisition.
(g) Record long-term debt incurred in the Acquisition, net of the
current portion.
NOTE 2: UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
(a) Adjust cost of sales to reflect the newsprint saving of
adjusting the web width of the presses to 50 inches and to
reflect the Company's historical cost of newsprint.
(b) 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.
(c) Certain personnel who were employed by the newspapers prior to
acquisition were not hired or replaced by Garden State
subsequent to the acquisition. Accordingly, the cost of
employing these individuals has been eliminated.
(d) Certain excessive executive bonuses have been eliminated.
(e) Effective with the acquisition certain cost savings have been
implemented with respect to the acquired newspapers including
the cost of acquiring plates, comics, TV books and Sunday
magazines. The cost savings have been reflected as a pro forma
adjustment.
<PAGE> 9
GARDEN STATE NEWSPAPERS, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION--CONTINUED
NOTE 2: UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS--CONTINUED
(f) Depreciation and amortization 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.
(g) Interest expense has been adjusted to reflect the borrowings and
rates of debt utilized in the acquisition of the assets.
(h) Income taxes reflect the estimated state taxes that would be due
if Garden State had owned the acquired newspapers during the pro
forma periods presented. Historical income taxes have been
eliminated.
<PAGE> 10
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.
GARDEN STATE NEWSPAPERS, INC.
Date: January 13, 1997 By: /s/ Joseph J. Lodovic, IV
-------------------------
Joseph J. Lodovic, IV
Executive Vice President,
Chief Financial Officer
<PAGE> 11
EXHIBIT INDEX
- -------------------------------------------------------------------
99.1 Combined Financial Statements
Acquired Newspapers (Formerly Divisions of
Thomson Newspapers Inc.)
<PAGE> 1
Combined Financial Statements
Acquired Newspapers
(Formerly Divisions of Thomson
Newspapers Inc.)
Nine months ended September 28, 1996 and years ended
December 30, 1995 and December 31, 1994
with Report of Independent Auditors
<PAGE> 2
Acquired Newspapers
(Formerly Divisions of Thomson Newspapers Inc.)
Combined Financial Statements
Nine months ended September 28, 1996 and years
ended December 30, 1995 and December 31, 1994
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors ............................................1
Audited Combined Financial Statements
Combined Statements of Assets Acquired and Liabilities Assumed.............2
Combined Statements of Operations..........................................3
Combined Statements of Cash Flows .........................................4
Notes to Combined Financial Statements ....................................5
</TABLE>
<PAGE> 3
Report of Independent Auditors
Board of Directors
Garden State Newspapers, Inc.
We have audited the accompanying combined statements of assets acquired and
liabilities assumed of the Acquired Newspapers (formerly Divisions of Thomson
Newspapers Inc.--see Note 1) as of September 28, 1996 and December 30, 1995,
and the related combined statements of operations and cash flows for the
nine-month period ended September 28, 1996 and the years ended December 30,
1995 and December 31, 1994. These financial statements are the responsibility
of Acquired Newspapers' management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
The combined statements of assets acquired and liabilities assumed have been
prepared pursuant to the Asset Purchase Agreement described in Note 1 between
Thomson Newspapers Inc. and Garden State Newspapers, Inc. dated October 31,
1996, and are not intended to be a complete presentation of the combined assets
and liabilities of the Acquired Newspapers.
In our opinion, the combined statements of assets acquired and liabilities
assumed referred to above present fairly, in all material respects, the
combined assets acquired and liabilities assumed of the Acquired Newspapers as
of September 28, 1996 and December 30, 1995 pursuant to the Asset Purchase
Agreement referred to in Note 1 in conformity with generally accepted
accounting principles, and the combined statements of operations and cash flows
of the Acquired Newspapers referred to above present fairly, in all material
respects, the operations and cash flows for the nine-month period ended
September 28, 1996 and the years ended December 30, 1995 and December 31, 1994
in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Denver, Colorado
December 31, 1996
1
<PAGE> 4
Acquired Newspapers
(Formerly Divisions of Thomson Newspapers Inc.)
Combined Statements of Assets Acquired and Liabilities Assumed
<TABLE>
<CAPTION>
SEPTEMBER 28 December 30
1996 1995
----------------------------
(in thousands)
<S> <C> <C>
ASSETS ACQUIRED
Current assets:
Cash $ 4 $ 4
Trade accounts receivable, less allowance for
doubtful accounts of $982 and $1,407 at September
28, 1996 and December 30, 1995, respectively 5,934 6,713
Other receivables 67 59
Inventories of newsprint and supplies 1,240 1,413
Prepaid expenses and other current assets 207 232
----------------------------
Total current assets 7,452 8,421
Property, plant and equipment:
Land 2,727 2,727
Buildings and improvements 25,158 26,847
Machinery and equipment 50,554 48,398
----------------------------
Total property, plant and equipment 78,439 77,972
Less accumulated depreciation and amortization (33,685) (30,609)
----------------------------
Net property, plant and equipment 44,754 47,363
----------------------------
$ 52,206 $ 55,784
============================
LIABILITIES ASSUMED AND NET ASSETS ACQUIRED
Current liabilities:
Trade accounts payable $ 449 $ 328
Accrued employee compensation 1,092 762
Accrued liabilities 1,679 2,451
Unearned income 2,353 2,167
----------------------------
Total current liabilities assumed 5,573 5,708
Net assets acquired 46,633 50,076
----------------------------
$ 52,206 $ 55,784
============================
</TABLE>
See accompanying notes.
2
<PAGE> 5
Acquired Newspapers
(Formerly Divisions of Thomson Newspapers Inc.)
Combined Statements of Operations
<TABLE>
<CAPTION>
NINE MONTHS YEAR ENDED
ENDED ---------------------------------
SEPTEMBER 28 DECEMBER 30 DECEMBER 31
1996 1995 1994
----------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Revenues:
Advertising $36,397 $51,580 $49,374
Circulation 11,291 13,773 11,847
Other 3,348 3,620 2,955
----------------------------------------------------------
Total revenues 51,036 68,973 64,176
Costs and expenses:
Cost of sales 19,850 25,815 26,471
Selling, general and administrative 21,001 30,683 33,303
Depreciation and amortization 3,079 4,105 4,238
Severance payments - 736 1,802
----------------------------------------------------------
Total costs and expenses 43,930 61,339 65,814
----------------------------------------------------------
Income (loss) before income taxes 7,106 7,634 (1,638)
Income tax expense (benefit) 2,913 3,130 (672)
----------------------------------------------------------
Net income (loss) $ 4,193 $ 4,504 $ (966)
==========================================================
</TABLE>
See accompanying notes.
3
<PAGE> 6
Acquired Newspapers
(Formerly Divisions of Thomson Newspapers Inc.)
Combined Statements of Cash Flows
<TABLE>
<CAPTION>
NINE MONTHS YEAR ENDED
ENDED ---------------------------------------
SEPTEMBER 28 DECEMBER 30 DECEMBER 31
1996 1995 1994
-------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $4,193 $4,504 $ (966)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 3,079 4,105 4,238
Provision for losses on accounts receivable 654 863 1,360
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable 125 (1,240) (1,157)
(Increase) decrease in other receivables (8) 11 51
Decrease (increase) in newsprint and
supplies 173 17 (449)
Decrease (increase) in prepaid expenses and
other current assets 25 (48) 191
(Decrease) increase in accounts payable and
and accrued liabilities (43) (107) 506
Increase in unearned income 186 114 173
-----------------------------------------------------------
Net cash flows from operating activities 8,384 8,219 3,947
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (470) (809) (1,309)
-----------------------------------------------------------
Net cash flows from investing activities (470) (809) (1,309)
CASH FLOWS FROM FINANCING ACTIVITIES
Transfer to Thomson Newspapers Inc. (7,914) (7,410) (2,639)
-----------------------------------------------------------
Net cash flows from financing activities (7,914) (7,410) (2,639)
-----------------------------------------------------------
Increase (decrease) in cash - - (1)
Cash at beginning of year 4 4 5
-----------------------------------------------------------
Cash at end of year $ 4 $ 4 $ 4
===========================================================
</TABLE>
See accompanying notes.
4
<PAGE> 7
Acquired Newspapers
(Formerly Divisions of Thomson Newspapers Inc.)
Notes to Combined Financial Statements
September 28, 1996
1. COMBINED FINANCIAL STATEMENTS
The accompanying combined financial statements reflect the operations of the
Pasadena Star-News, Whittier Daily News, San Gabriel Valley Tribune,
Times-Standard, The Evening Sun and other related publications (collectively
referred to as the "Acquired Newspapers"), which operated as various divisions
of Thomson Newspapers Inc. On October 31, 1996 pursuant to a signed Asset
Purchase Agreement, Thomson Newspapers Inc. ("Thomson") sold substantially all
of the assets used in the publication of the Acquired Newspapers to Garden
State Newspapers, Inc. ("Garden State") and Garden State agreed to assume
certain liabilities directly related to the operation of the Acquired
Newspapers. The Acquired Newspapers are in the business of publishing daily and
weekly newspapers.
2. SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS
BASIS OF PRESENTATION
The accompanying combined financial statements include the accounts of the
Acquired Newspapers described above. These statements are presented as if the
Acquired Newspapers had existed as an entity separate from its parent, Thomson,
during the periods presented and include the historical assets, liabilities,
revenues and expenses that are directly related to the operations of the
Acquired Newspapers. All transactions between the Acquired Newspapers have been
eliminated upon combination. Because the Acquired Newspapers operations were
included in the financial statements of Thomson on a divisional basis, there
are no separate historical equity accounts for the Acquired Newspapers. The
financial information included herein may not necessarily be indicative of what
the financial position, results of operations or cash flows would have been if
the Acquired Newspapers were a separate, stand-alone company during the periods
presented.
USE OF ESTIMATES
The preparation of financial statements in accordance with generally accepted
accounting principles requires the use of estimates and assumptions that affect
the reported amounts of assets, liabilities, revenues and expenses. Actual
results could differ from these estimates.
5
<PAGE> 8
Acquired Newspapers
(Formerly Divisions of Thomson Newspapers Inc.)
Notes to Combined Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS (CONTINUED)
INVENTORIES
Inventories, which largely consist of newsprint, are valued at a standard
intercompany cost charged by Thomson. The Acquired Newspapers unaudited pro
forma cost of sales related to newsprint used would have been $20.9 million,
$25.9 million and $22.7 million for the nine months ended September 28, 1996
and the years ended December 30, 1995 and December 31, 1994, respectively,
based on Garden State's average historical newsprint costs.
SEVERANCE PAYMENTS
In the year ended December 31, 1994, the Pasadena Star-News, Whittier Daily
News and San Gabriel Valley Tribune underwent a downsizing, in which the work
force at these newspapers was permanently reduced. In 1995, the above
newspapers again permanently eliminated certain executive-level positions. The
cost associated with these staff reductions has been included in severance
payments in the accompanying combined financial statements.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are recorded at cost. Buildings and machinery and
equipment are depreciated using the straight-line method over the expected
useful lives of the individual assets.
LONG-LIVED ASSETS
The carrying value of long-lived assets is reviewed annually; if at any time
the facts or circumstances at any of the Acquired Newspapers operations
indicate impairment of long-lived asset values, as a result of a continual
decline in performance or as a result of fundamental changes in a newspaper's
market, a determination is made as to whether the carrying value of the
newspaper's long-lived assets exceeds estimated realizable value. For purposes
of this determination, estimated realizable value is evaluated based on values
placed on comparable newspaper properties, generally based on a multiple of
revenue and operating profit (before depreciation and amortization).
6
<PAGE> 9
Acquired Newspapers
(Formerly Divisions of Thomson Newspapers Inc.)
Notes to Combined Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS (CONTINUED)
INCOME TAXES
The operations of the Acquired Newspapers have historically been included in
Thomson's federal and state income tax returns. For the combined statements of
operations the provision for income tax expense (benefit) was calculated on a
separate return basis at an effective combined federal and state tax rate of
41%. Under the terms of the Asset Purchase Agreement all tax assets and
liabilities are excluded from the purchase and accordingly have not been
reflected in the combined statements of assets acquired and liabilities
assumed.
PENSION AND 401(K) PLANS
Certain employees of the Acquired Newspapers participated in Thomson's defined
benefit pension plan (the "Plan"). The cost of an employee's participation in
the Plan is based on an estimate from Thomson, the cost of which has been
included in the accompanying financial statements. Upon acquisition the Plan
benefits were frozen and the participants were fully vested in those benefits.
However, because Garden State did not acquire the Plan or any ongoing liability
of participation in the Plan, no disclosure of the Plan's assets, liabilities,
service cost, interest cost or other component of pension expense has been
included herein. Expenses associated with this Plan for the nine months ended
September 28, 1996 and the years ended December 30, 1995 and December 31, 1994
were approximately $270,000, $437,000 and $141,000, respectively.
Non-union employees of the Acquired Newspapers who work a minimum of 1,000
hours per year were also eligible to participate in Thomson's 401(k) Savings
Plan after one year of service. For participants earning less than $50,000
compensation per year, Thomson matched each dollar contributed to the plan at
50% on the first 2% of salary contributed and 25% on contributions greater than
2% but less than 5%. Participants earning more than $50,000 per year had their
contributions matched at 25% of each dollar contributed up to the first 5%. The
expenses associated with the 401(k) plan for the nine months ended September
28, 1996 and the years ended December 30, 1995 and December 31, 1994 were
approximately $95,000, $115,000 and $127,000, respectively,
3. LEASES
The Acquired Newspapers lease certain facilities and equipment under operating
leases, some of which contain renewal or escalation clauses. Rent expense was
approximately $181,000, $153,000 and $161,000 for the nine months ended
September 28, 1996 and the
7
<PAGE> 10
Acquired Newspapers
(Formerly Divisions of Thomson Newspapers Inc.)
Notes to Combined Financial Statements (continued)
3. LEASES (CONTINUED)
years ended December 30, 1995 and December 31, 1994, respectively. Contingent
rentals are not significant. Future minimum payments on operating leases are as
follows:
<TABLE>
<CAPTION>
FISCAL YEAR ENDING DECEMBER 31
- ------------------ -----------
(in thousands)
<S> <C>
1996 and 1997 $ 239
1998 191
1999 150
2000 136
2001 136
Thereafter 483
------
$1,335
======
</TABLE>
8
