Gannett Co., Inc. Reports Strong Fourth Quarter Results, Driven by Total Company Revenue Growth of 9 Percent and Non-GAAP Earnings Growth of 20 Percent

Record Revenue and Profitability for Broadcasting

Reported Earnings per Diluted Share of $0.44 and Non-GAAP Earnings per Diluted Share of $0.89

Operating Cash Flow Totaled $385 million Excluding Special Items

Free Cash Flow Totaled $248 million

MCLEAN, Va., Feb. 4, 2013 /PRNewswire/ -- Gannett Co., Inc. (NYSE: GCI), a leading international media and marketing solutions company, today reported strong fourth quarter financial results. Earnings per diluted share, on a GAAP (generally accepted accounting principles) basis were$0.44 for the fourth quarter of 2012 compared to $0.49 for the same quarter last year. Excluding special items in both years, fourth quarter earnings per diluted share were $0.89 in 2012 compared to $0.72 in the fourth quarter of 2011, a 23.6 percent increase.

Gracia Martore, President and Chief Executive Officer, said, "We are proud of our strong operating results this quarter with growth in revenue and margin expansion driving strong cash flow. This caps an extremely productive year in which we successfully implemented our strategy to position Gannett for success in the digital era. For the year, we achieved our first year-over-year increase in company-wide revenue since 2006. During the fourth quarter and for the full year, our Broadcasting business delivered record revenue and profitability. Our television stations significantly increased market share this year reflecting the value of their content and format in gaining new viewers while retaining their loyal base. Not to be outdone, local domestic publishing circulation revenue also increased for the third straight quarter driven by the success of our all access content subscription model. We are meeting or exceeding the revenue and operating profit goals we had for the all access content subscription model. Total digital revenue across Gannett increased 29 percent and represented 25 percent of total revenue.

"Our strategy is gaining momentum, our investments are bearing fruit and we are achieving the results we expected. We enter 2013 with our businesses performing well and poised for even greater success going forward. We remain confident we are well positioned to achieve our goals and to continue delivering on our promise to return increased value to shareholders," Martore said.

Amounts reported in accordance with GAAP are contained in Tables 1 through 4. Certain amounts and comparisons included in the following discussion of GAAP results are supplemented by discussions which exclude the effect of special items. Details of these special items and their effect on GAAP results are included on the Non-GAAP Financial Information Tables 5 through 10 attached to this release. The company's basis for providing discussions of non-GAAP results is detailed below.

Results for the fourth quarter of 2012 include special charges affecting operating income. Non-cash asset impairments, efficiency-driven facility consolidation and workforce restructuring charges totaled $114.6 million ($101.9 million after tax or $0.44 per share). Non-operating items include a $3.8 million ($2.3 million after tax or $0.01 per share) non-cash charge related to the impairment of a minority owned investment.

Results for the fourth quarter of 2011 included special charges affecting operating income of $78.4 million ($49.0 million after-tax or $0.20 per share). Non-operating items for the fourth quarter of 2011 included special charges related to the impairment of certain minority-owned investments that totaled $28.4 million ($17.2 million after-tax or $0.07 per share). In addition, a special tax benefit of $10.7 million or $0.04 per share was recorded.

CONTINUING OPERATIONS

All of the company's Publishing and Broadcast results detailed below were impacted by an extra week in 2012 compared to 2011. Results for the year included 53 weeks compared with 52 weeks in 2011. The fourth quarter was comprised of 14 weeks compared with 13 weeks in the same quarter of 2011. The table below details fourth quarter results on a GAAP and non-GAAP basis and excluding the extra week:

 

 

Click to view table full screen

In thousands of dollars, except per share amounts

 
 

Fourteen 
weeks ended 
Dec. 30, 2012

 

Workforce 
restructuring

 

Facility 
consolidation 
and asset 
impairment 
charges

 

Impact of 
extra week

 

Thirteen 
weeks ended 
Dec. 23, 2012

Operating income

$

220,380

 

$

6,595

 

$

108,013

 

$

(14,647)

 

$

320,341

Equity income in unconsolidated investees, net

6,407

 

 

3,816

 

 

10,223

Interest expense

(38,927)

 

 

 

2,800

 

(36,127)

Total non-operating (expense) income

(26,474)

 

 

3,816

 

2,800

 

(19,858)

Income before income taxes

193,906

 

6,595

 

111,829

 

(11,847)

 

300,483

Provision for income taxes

78,900

 

2,400

 

11,800

 

(4,900)

 

88,200

Net income

115,006

 

4,195

 

100,029

 

(6,947)

 

212,283

Net income attributable to Gannett Co., Inc.

103,085

 

4,195

 

100,029

 

(6,947)

 

200,362

Net income per share - diluted

$

0.44

 

$

0.02

 

$

0.43

 

$

(0.03)

 

$

0.86

 

Net income attributable to Gannett was $103.1 million in the fourth quarter of 2012. Net income attributable to Gannett on a non-GAAP basis increased 20.2 percent to $207.3 million from $172.4 million in 2011. Operating income totaled $220.4 million in the quarter. Non-GAAP operating income including strategic initiative investments of $14.1 million but excluding special items and the extra week totaled $320.3 million, up 10.2 percent compared to the fourth quarter last year. Operating cash flow in the quarter (a non-GAAP term defined as operating income plus special items, depreciation and amortization) was $384.7 million compared to $339.2 million in the fourth quarter a year ago. Excluding the extra week operating cash flow was up 9.1 percent.

Total operating revenues for the company were $1.52 billion in the fourth quarter, a 9.4 percent increase compared to the fourth quarter last year. A substantial increase in Broadcasting segment revenues, higher Publishing segment revenues as well as the extra week in the quarter drove the increase. The increase in Broadcasting segment revenues reflects a record level of political spending in the quarter. Significantly higher circulation revenue in the Publishing segment resulting from the positive impact of the all access content subscription model more than offset a decline in advertising revenues. Digital segment revenues were up due primarily to revenue growth at CareerBuilder. Excluding the extra week in the quarter, total operating revenues were 4.8 percent higher than the year ago quarter.

Operating expenses including the special charges noted above were $1.30 billion in the quarter, 10.4 percent higher than the fourth quarter in 2011. Special charges, higher costs associated with substantial revenue growth in the Broadcasting segment and the extra week in the quarter contributed to the increase. Strategic initiative investments that totaled $14.1 million and a $5.5 million increase in pension expense were partially offset by continued cost reduction and cost efficiency efforts company-wide. Operating expenses on a non-GAAP basis, which exclude special items but include the impact of the investment in strategic initiatives and pension expense, totaled $1.18 billion. Total operating expenses in the quarter excluding special items and the extra week in the quarter were up 3.4 percent.

Total operating revenues for the full year totaled $5.35 billion compared to $5.24 billion a year ago, an increase of over 2 percent. The increase was driven by substantially higher Broadcast revenues reflecting a record $150 million in political ad spending and $37 million associated with the the Summer Olympic Games. Digital segment revenues were 4.7 percent higher. Publishing segment revenues declined 2.7 percent as a 6.2 percent decline in advertising revenues was partially offset by a 5.0 percent increase in circulation revenues. Digital revenues company-wide were$1.29 billion, an increase of 18.7 percent compared to 2011. Operating expenses totaled $4.56 billion. Operating expenses on a non-GAAP basis were up 2.3 percent reflecting $74.2 million of strategic investments and the extra week in 2012 partially offset by company-wide efficiency efforts. On a non-GAAP basis, operating income in 2012 was $960.4 million, a 1.5 percent increase. Net income attributable to Gannett on the same basis was up 6.3 percent to $551.1 million. Earnings per diluted share were $1.79 on a GAAP basis. On a non-GAAP basis, earnings per diluted share were $2.33 compared to $2.13 in 2011. Operating cash flow totaled $1.15 billion in 2012.

Total operating revenues in 2012 excluding the extra week were up 1 percent. On the same basis, Publishing segment revenues were 4.1 percent lower reflecting a 3.1 percent increase in circulation revenue and a 7.4 percent decline in advertising revenues. Broadcasting segment revenues were 24.1 percent higher. Operating expenses, excluding initiative investment, special items and the extra week, were down 0.5 percent. Operating income on the same basis was up 5.7 percent. The extra week in 2012 contributed approximately $0.03 to diluted earnings per share.

In the first quarter of 2012, the company announced a new capital allocation plan that included a 150 percent increase in the annual dividend to $0.80 per share and a $300 million share repurchase program targeted to be completed over the two years following the announcement. During the fourth quarter the company purchased approximately 2.1 million shares for $37.4 million. Year-to-date, shares repurchased totaled 10.3 million shares for $153.9 million.

PUBLISHING

Publishing segment operating revenues in the quarter were $1.04 billion, 3.7 percent higher than the $1.01 billion in the fourth quarter last year reflecting the extra week in the quarter and an increase in circulation revenues. The growth was offset, in part, by lower advertising revenues as the tepid economic recovery continues to impact advertising demand.

Primarily reflecting the impact of the complete rollout of the all access content subscription model and the extra week in the quarter, circulation revenue company-wide was up 16.8 percent. Excluding the extra week, circulation revenues increased 9.3 percent. Local domestic circulation revenue was 23.6 percent higher. This is the third consecutive quarter of circulation revenue growth as customer response has been very positive.

Advertising revenues totaled $657.5 million compared to $670.7 million in the fourth quarter a year ago, a 2.0 percent decline. Excluding the extra week, advertising revenues were 6.5 percent lower, the best quarterly comparison in 2012. Advertising revenues declined 5.6 percent in October, were down 7.4 percent in November, and were 6.7 percent lower in December, excluding the extra week.

Excluding the extra week in the quarter, retail advertising and classified advertising comparisons were the best quarterly comparisons for the year while comparisons for national advertising lagged third quarter comparisons.

The percentage changes for the Publishing segment advertising revenue categories for the quarter were as follows:

 

Fourth Quarter 2012 Year-over-Year Comparisons 
(including extra week in the quarter)

               
 

U.S. 
Publishing 
(including USA

TODAY)

 

Newsquest 
(in pounds)

 

Total 
Publishing 
Segment

(constant 
currency)

 

Total 
Publishing 
Segment

Retail

(1.5)%

 

(1.3)%

 

(1.5)%

 

(1.3)%

National

(6.4)%

 

(13.0)%

 

(6.9)%

 

(6.8)%

Classified

1.8%

 

(5.3)%

 

—%

 

0.5%

 

(1.8)%

 

(4.7)%

 

(2.1)%

 

(2.0)%

 

The percentage changes in the classified categories were as follows:
 

Fourth Quarter 2012 Year-over-Year Comparisons 
(including the extra week in the quarter)

               
 

U.S. 
Publishing

 

Newsquest 
(in pounds)

 

Total 
Publishing 
Segment 
(constant 
currency)

 

Total 
Publishing 
Segment

Automotive

7.3%

 

(5.8)%

 

5.6%

 

5.9%

Employment

(4.4)%

 

(0.7)%

 

(3.4)%

 

(2.8)%

Real Estate

(4.3)%

 

(9.1)%

 

(6.0)%

 

(5.3)%

Legal

10.3%

 

---

 

10.3%

 

10.3%

Other

0.8%

 

(5.9)%

 

(1.5)%

 

(0.8)%

 

1.8%

 

(5.3)%

 

—%

 

0.5%

 

Digital publishing revenues were up 87.1 percent in the quarter reflecting the impact of the all access content subscription model in addition to higher digital advertising and marketing solutions revenue. Digital publishing revenues excluding the extra week were 79.2 percent higher in the quarter. On the same basis, a 100.1 percent increase in digital revenues at our local domestic publishing operations was driven primarily by the all access content subscription model. Digital revenues at USA TODAY and its associated businesses increased 27.9 percent while Newsquest's digital revenues were up 8.8 percent, in pounds.

Publishing segment operating expenses totaled $914.9 million in the quarter compared to $893.0 million in the fourth quarter last year, an increase of 2.4 percent. Operating expenses in the Publishing segment excluding special items, initiative investment and the extra week were relatively unchanged from the fourth quarter a year ago. Newsprint expense was 1.1 percent lower in the quarter due primarily to lower consumption.

Publishing segment operating income, which includes the impact of strategic investments, was $128.7 million. Publishing segment operating income excluding special items totaled $153.2 million in the quarter and operating cash flow was $182.8 million.

BROADCASTING

Results in the Broadcasting segment (which include Captivate) reflected a record level of fourth quarter revenues and operating results. Operating revenues were $287.5 million in the quarter, up 43.9 percent compared to $199.8 million in the fourth quarter last year. Excluding the extra week, revenues in the Broadcasting segment were 39.0 percent higher. The increase was due primarily to a substantial increase in political advertising that leveraged a combination of strong stations and local news positions, a very good political footprint as well as optimal inventory management. Double digit growth in retransmission revenue contributed to revenue growth as well.

Total television revenues were 45.7 percent higher and totaled $280.2 million compared to $192.4 million in the fourth quarter last year. The revenue growth was driven by $91.2 million in politically related advertising during the fourth quarter of 2012. Retransmission revenues were $29.6 million in the quarter compared to $21.4 million in the fourth quarter a year ago, an increase of 38.7 percent. Television station digital revenues were 4.0 percent higher than the fourth quarter of 2011. Based on current trends, the percentage increase in total television revenues is projected to be up in the high-single digits in the first quarter of 2013 as compared to the first quarter of 2012. First quarter 2013 year-over-year comparisons will be unfavorably impacted by the absence of $5.1 million in political revenue and the move of the Super Bowl from NBC to CBS. Excluding political variances year-to-year, the percentage increase in total television revenues is projected to be up in the 10 to 12 percent range in the first quarter.

Broadcasting segment operating expenses totaled $129.6 million, an increase of 17.7 percent compared to the fourth quarter a year ago. The increase reflects higher sales and marketing costs associated with the substantial increase in revenues and the extra week in the quarter. Broadcasting segment operating expenses excluding special items and the extra week in the quarter were 13.9 percent higher. Record operating income totaled $157.9 million and was 76.0 percent higher than the fourth quarter last year while operating cash flow was 69.4 percent higher and totaled $164.8 million. Operating income excluding special items and the extra week was up 69.4 percent compared to the fourth quarter a year ago. Operating cash flow on the same basis was 64.5 percent higher.

DIGITAL

Results in the Digital segment were not impacted by the extra week in the quarter. Digital segment operating revenues were $187.2 million compared to $181.5 million in the fourth quarter last year. Solid revenue growth at CareerBuilder drove the increase. Digital segment operating expenses were substantially higher due primarily to the special charges. Digital segment operating expenses excluding special items were 3.8 percent higher. On the same basis, operating income totaled $39.0 million. Operating cash flow was up 3.7 percent and totaled $48.4 million.

Digital revenues company-wide, including the Digital segment and all digital revenues generated by the other business segments, were $375.6 million, a 29.4 percent increase from the fourth quarter a year ago. Excluding the extra week, digital revenues company-wide were 26.7 percent higher. The increase was driven primarily by the impact of the all access content subscription model as well as higher revenue associated with digital advertising and marketing solutions across all segments.

At the end of the quarter, Gannett had about 120 domestic web sites affiliated with its local publishing and television markets, USA TODAY, Gannett Government Media and Gannett Healthcare Group. USATODAY.com is one of the most popular newspaper sites and the USA TODAY app is a top news app with 17.4 million downloads across iPad, iPhone, Android, Windows and Kindle Fire. In December, Gannett's consolidated domestic Internet audience share increased 7.6 percent from December of 2011 to 54.6 million unique visitors reaching 24.7 percent of the Internet audience, according to Comscore Media Metrix. Newsquest is also an Internet leader in the UK where its network of web sites attracted 76.0 million monthly page impressions from approximately 10.1 million unique users in December 2012. CareerBuilder's unique visitors in the fourth quarter averaged 21.0 million.

NON-OPERATING ITEMS

The company's equity earnings include its share of operating results from unconsolidated investees including the California Newspapers Partnership, Texas-New Mexico Newspapers Partnership, Tucson newspaper partnership and other online/digital businesses including Classified Ventures.

Equity income in unconsolidated investments was $6.4 million, up $12.2 million compared to the fourth quarter a year ago. Excluding special non-cash charges in the fourth quarters of 2012 and 2011, equity income totaled $10.2 million, an increase of $2.2 million. The increase was due primarily to strong results for Classified Ventures and improved results in our newspaper partnerships.

Interest expense was $38.9 million compared to $40.8 million in the fourth quarter last year. The decline was due to lower average debt balances partially offset by higher average interest rates and the extra week in the quarter.

Other non-operating income totaled $6.0 million for the quarter, an increase of $20.9 million from the fourth quarter last year. The increase reflects the gain on an investment in the fourth quarter this year and $14.5 million of non-cash impairment charges for minority-owned cost method businesses in the fourth quarter a year ago. Excluding non-cash impairment charges, other non-operating income was $6.4 million higher compared to the fourth quarter last year.

Net cash flow from operating activities was $258.0 million, while free cash flow (a non-GAAP measure) totaled $248.1 million in the quarter. The balance of long term debt at quarter end was $1.43 billion. Total cash at the end of the quarter was $175.0 million.

USE OF NON-GAAP INFORMATION

The company uses non-GAAP financial performance and liquidity measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures are not to be considered in isolation from or as a substitute for the related GAAP measures, and should be read only in conjunction with financial information presented on a GAAP basis.

In this earnings report, the company discusses non-GAAP financial performance measures that exclude from its reported GAAP results the impact of special items consisting of workforce restructuring charges, facility consolidation expenses, non-cash impairment charges, incremental charges associated with the the company's former chairman and chief executive officer's disability related retirement, pension settlement charges and certain credits to its income tax provision. The company believes that such expenses and credits are not indicative of normal, ongoing operations and their inclusion in results makes for more difficult comparisons between periods and with peer group companies. Workforce restructuring and facility consolidation expenses primarily relate to incremental expenses the company has incurred to consolidate or outsource production processes and centralize other functions. These expenses include payroll and related benefit costs and accelerated depreciation. Non-cash impairment charges were recorded in 2012 and 2011 to reduce the book value of certain intangible assets and investments accounted for under the equity and cost methods to fair value, as the businesses underlying these assets had experienced significant and sustained unfavorable operating results. The pension settlement charges result from the acceleration of expense related to the timing of certain pension payments. Full year results include credits to the tax provision related primarily to tax settlements covering multiple years. The company also recorded in the fourth quarter of 2011 a special tax benefit for deductible stock basis relating to prior year business impairment charges for which no tax benefit could have been previously taken.

The company also discusses operating cash flow, a non-GAAP financial performance measure that it believes offers a useful view of the overall operation of its businesses. This non-GAAP measure is calculated by adding amounts associated with the special expense items described above, as well as depreciation and amortization, to operating income as reported on a GAAP basis. This earnings report also discusses free cash flow, a non-GAAP liquidity measure. Free cash flow is defined as "net cash flow from operating activities" as reported on the statement of cash flows reduced by "purchase of property, plant and equipment" as well as "payments for investments" and increased by "proceeds from investments." The company believes that free cash flow is a useful measure for management and investors to evaluate the level of cash generated by operations and the ability of its operations to fund investments in its businesses, repay indebtedness, add to the company's cash balance, or use in other discretionary activities. Management uses free cash flow to monitor cash available for repayment of indebtedness and in its discussions with the investment community.

Management uses non-GAAP financial performance measures for purposes of evaluating business unit and consolidated company performance. The company therefore believes that each of the non-GAAP measures presented provides useful information to investors by allowing them to view the company's businesses through the eyes of management and the Board of Directors, facilitating comparison of results across historical periods, and providing a focus on the underlying ongoing operating performance of its businesses. In addition, many of the company's peer group companies present similar non-GAAP measures so the presentation of such measures facilitates industry comparisons.

Tabular reconciliations for the non-GAAP financial measures are contained in Tables 5 through 10 attached to this news release.

As previously announced, the company will hold an earnings conference call at 10:00 a.m. ET today. The call can be accessed via a live webcast through the company's web site, www.gannett.com, or listen-only conference lines. U.S. callers should dial 1-888-572-7026 and international callers should dial 719-457-2674 at least 10 minutes prior to the scheduled start of the call. The confirmation code for the conference call is 4766645. To access the replay, dial 1-888-203-1112 in the U.S. International callers should use the number 719-457-0820. The confirmation code for the replay is 4766645. Materials related to the call will be available through the Investor Relations section of the company's web site Monday morning.

About Gannett 
Gannett Co., Inc. is an international media and marketing solutions company that informs and engages more than 100 million people every month through its powerful network of broadcast, digital, mobile and publishing properties. Our portfolio of trusted brands offers marketers unmatched local-to-national reach and customizable, innovative marketing solutions across any platform. Gannett is committed to connecting people - and the companies who want to reach them - with their interests and communities. For more information, visit www.gannett.com.

Certain statements in this press release may be forward looking in nature or "forward looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The forward looking statements contained in this press release are subject to a number of risks, trends and uncertainties that could cause actual performance to differ materially from these forward looking statements. A number of those risks, trends and uncertainties are discussed in the company's SEC reports, including the company's annual report on Form 10-K and quarterly reports on Form 10-Q. Any forward looking statements in this press release should be evaluated in light of these important risk factors.

Gannett is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this press release by wire services, Internet service providers or other media.

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries 
Unaudited, in thousands (except per share amounts)

                       
             

Table No. 1

           
   

Fourteen 
weeks ended 
Dec. 30, 2012

 

Thirteen 
weeks ended 
Dec. 25, 2011

 

% Increase 
(Decrease)

Net operating revenues:

           

Publishing advertising

 

$

657,546

   

$

670,749

   

(2.0)

 

Publishing circulation

 

313,113

   

268,145

   

16.8

 

Digital

 

187,249

   

181,500

   

3.2

 

Broadcasting

 

287,511

   

199,835

   

43.9

 

All other

 

72,890

   

67,526

   

7.9

 

Total

 

1,518,309

   

1,387,755

   

9.4

 
             

Operating expenses:

           

Cost of sales and operating expenses, exclusive of depreciation

 

779,777

   

782,040

   

(0.3)

 

Selling, general and administrative expenses, exclusive of depreciation

 

360,422

   

331,741

   

8.6

 

Depreciation

 

40,426

   

40,768

   

(0.8)

 

Amortization of intangible assets

 

9,291

   

7,753

   

19.8

 

Facility consolidation and asset impairment charges

 

108,013

   

13,193

   

***

 

Total

 

1,297,929

   

1,175,495

   

10.4

 

Operating income

 

220,380

   

212,260

   

3.8

 
             

Non-operating (expense) income:

           

Equity income (loss) in unconsolidated investees, net

 

6,407

   

(5,797)

   

***

 

Interest expense

 

(38,927)

   

(40,831)

   

(4.7)

 

Other non-operating items

 

6,046

   

(14,854)

   

***

 

Total

 

(26,474)

   

(61,482)

   

(56.9)

 
             

Income before income taxes

 

193,906

   

150,778

   

28.6

 

Provision for income taxes

 

78,900

   

26,100

   

***

 

Net income

 

115,006

   

124,678

   

(7.8)

 

Net income attributable to noncontrolling interests

 

(11,921)

   

(7,738)

   

54.1

 

Net income attributable to Gannett Co., Inc.

 

$

103,085

   

$

116,940

   

(11.8)

 
             

Net income per share - basic

 

$

0.45

   

$

0.49

   

(8.2)

 

Net income per share - diluted

 

$

0.44

   

$

0.49

   

(10.2)

 
             

Weighted average number of common shares outstanding:

           

Basic

 

229,368

   

237,219

   

(3.3)

 

Diluted

 

233,980

   

240,419

   

(2.7)

 
             

Dividends declared per share

 

$

0.20

   

$

0.08

   

***

 
 


 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands (except per share amounts)

                       
             

Table No. 2

           
   

Fifty-three 
weeks ended 
Dec. 30, 2012

 

Fifty-two 
weeks ended 
Dec. 25, 2011

 

% Increase 
(Decrease)

Net operating revenues:

           

Publishing advertising

 

$

2,355,922

   

$

2,511,025

   

(6.2)

 

Publishing circulation

 

1,117,042

   

1,063,890

   

5.0

 

Digital

 

718,949

   

686,471

   

4.7

 

Broadcasting

 

906,104

   

722,410

   

25.4

 

All other

 

255,180

   

256,193

   

(0.4)

 

Total

 

5,353,197

   

5,239,989

   

2.2

 
             

Operating expenses:

           

Cost of sales and operating expenses, exclusive of depreciation

 

2,943,847

   

2,961,097

   

(0.6)

 

Selling, general and administrative expenses, exclusive of depreciation

 

1,303,427

   

1,223,485

   

6.5

 

Depreciation

 

160,746

   

165,739

   

(3.0)

 

Amortization of intangible assets

 

33,293

   

31,634

   

5.2

 

Facility consolidation and asset impairment charges

 

122,129

   

27,243

   

***

 

Total

 

4,563,442

   

4,409,198

   

3.5

 

Operating income

 

789,755

   

830,791

   

(4.9)

 
             

Non-operating (expense) income:

           

Equity income in unconsolidated investees, net

 

22,387

   

8,197

   

***

 

Interest expense

 

(150,469)

   

(173,140)

   

(13.1)

 

Other non-operating items

 

8,734

   

(12,921)

   

***

 

Total

 

(119,348)

   

(177,864)

   

(32.9)

 
             

Income before income taxes

 

670,407

   

652,927

   

2.7

 

Provision for income taxes

 

195,400

   

152,800

   

27.9

 

Net income

 

475,007

   

500,127

   

(5.0)

 

Net income attributable to noncontrolling interests

 

(50,727)

   

(41,379)

   

22.6

 

Net income attributable to Gannett Co., Inc.

 

$

424,280

   

$

458,748

   

(7.5)

 
             

Net income per share - basic

 

$

1.83

   

$

1.92

   

(4.7)

 

Net income per share - diluted

 

$

1.79

   

$

1.89

   

(5.3)

 
             

Weighted average number of common shares outstanding:

           

Basic

 

232,327

   

239,228

   

(2.9)

 

Diluted

 

236,690

   

242,768

   

(2.5)

 
             

Dividends declared per share

 

$

0.80

   

$

0.24

   

***

 
 

 

BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars

                       
             

Table No. 3

           
   

Fourteen 
weeks ended 
Dec. 30, 2012

 

Thirteen 
weeks ended 
Dec. 25, 2011

 

% Increase 
(Decrease)

Net operating revenues:

           

Publishing

 

$

1,043,549

   

$

1,006,420

   

3.7

 

Digital

 

187,249

   

181,500

   

3.2

 

Broadcasting

 

287,511

   

199,835

   

43.9

 

Total

 

$

1,518,309

   

$

1,387,755

   

9.4

 
             

Operating income (net of depreciation, amortization and facility consolidation and asset impairment charges):

           

Publishing

 

$

128,662

   

$

113,398

   

13.5

 

Digital

 

(51,006)

   

38,732

   

***

 

Broadcasting

 

157,935

   

89,724

   

76.0

 

Corporate

 

(15,211)

   

(29,594)

   

(48.6)

 

Total

 

$

220,380

   

$

212,260

   

3.8

 
             

Depreciation, amortization and facility consolidation and asset impairment charges:

           

Publishing

 

$

47,524

   

$

42,160

   

12.7

 

Digital

 

99,364

   

7,892

   

***

 

Broadcasting

 

6,894

   

6,884

   

0.1

 

Corporate

 

3,948

   

4,778

   

(17.4)

 

Total

 

$

157,730

   

$

61,714

   

***

 
             

Operating cash flow:

           

Publishing

 

$

176,186

   

$

155,558

   

13.3

 

Digital

 

48,358

   

46,624

   

3.7

 

Broadcasting

 

164,829

   

96,608

   

70.6

 

Corporate

 

(11,263)

   

(24,816)

   

(54.6)

 

Total

 

$

378,110

   

$

273,974

   

38.0

 
                       

Operating cash flow represents operating income from each of the company's business segments plus related depreciation, amortization and facility consolidation and asset impairment charges. See Table No. 9 for reconciliation of amounts to the Condensed Consolidated Statements of Income.

 

 

BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars

                       
             

Table No. 4

           
   

Fifty-three 
weeks ended 
Dec. 30, 2012

 

Fifty-two 
weeks ended 
Dec. 25, 2011

 

% Increase 
(Decrease)

Net operating revenues:

           

Publishing

 

$

3,728,144

   

$

3,831,108

   

(2.7)

 

Digital

 

718,949

   

686,471

   

4.7

 

Broadcasting

 

906,104

   

722,410

   

25.4

 

Total

 

$

5,353,197

   

$

5,239,989

   

2.2

 
             

Operating income (net of depreciation, amortization and facility consolidation and asset impairment charges):

           

Publishing

 

$

368,644

   

$

477,583

   

(22.8)

 

Digital

 

41,700

   

125,340

   

(66.7)

 

Broadcasting

 

443,808

   

302,140

   

46.9

 

Corporate

 

(64,397)

   

(74,272)

   

(13.3)

 

Total

 

$

789,755

   

$

830,791

   

(4.9)

 
             

Depreciation, amortization and facility consolidation and asset impairment charges:

           

Publishing

 

$

147,750

   

$

148,537

   

(0.5)

 

Digital

 

123,990

   

30,693

   

***

 

Broadcasting

 

28,007

   

28,926

   

(3.2)

 

Corporate

 

16,421

   

16,460

   

(0.2)

 

Total

 

$

316,168

   

$

224,616

   

40.8

 
             

Operating cash flow:

           

Publishing

 

$

516,394

   

$

626,120

   

(17.5)

 

Digital

 

165,690

   

156,033

   

6.2

 

Broadcasting

 

471,815

   

331,066

   

42.5

 

Corporate

 

(47,976)

   

(57,812)

   

(17.0)

 

Total

 

$

1,105,923

   

$

1,055,407

   

4.8

 
                       

Operating cash flow represents operating income from each of the company's business segments plus related depreciation, amortization and facility consolidation and asset impairment charges. See Table No. 9 for reconciliation of amounts to the Condensed Consolidated Statements of Income.



 

Click to view table full screen

NON-GAAP FINANCIAL INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)

                                               
                       

The company uses non-GAAP financial performance and liquidity measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures are not to be considered in isolation from or as a substitute for the related GAAP measures and should be read only in conjunction with financial information presented on a GAAP basis.

 

Tables No. 5 through No. 10 reconcile these non-GAAP measures to the most directly comparable GAAP measure.

                       

Table No. 5

                     
 

GAAP 
Measure

 

Special Items

 

Non-GAAP 
Measure

       
 

Fourteen 
weeks ended 
Dec. 30, 2012

 

Workforce 
restructuring

 

Facility 
consolidation 
and asset 
impairment 
charges

 

Fourteen 
weeks ended 
Dec. 30, 2012

       

Cost of sales and operating expenses, exclusive of depreciation

$

779,777

   

$

(5,909)

   

$

   

$

773,868

         

Selling, general and administrative expenses, exclusive of depreciation

360,422

   

(686)

   

   

359,736

         

Facility consolidation and asset impairment charges

108,013

   

   

(108,013)

   

         

Operating expenses

1,297,929

   

(6,595)

   

(108,013)

   

1,183,321

         

Operating income

220,380

   

6,595

   

108,013

   

334,988

         

Equity income in unconsolidated investees, net

6,407

   

   

3,816

   

10,223

         

Total non-operating (expense) income

(26,474)

   

   

3,816

   

(22,658)

         

Income before income taxes

193,906

   

6,595

   

111,829

   

312,330

         

Provision for income taxes

78,900

   

2,400

   

11,800

   

93,100

         

Net income

115,006

   

4,195

   

100,029

   

219,230

         

Net income attributable to Gannett Co., Inc.

103,085

   

4,195

   

100,029

   

207,309

         

Net income per share - diluted

$

0.44

   

$

0.02

   

$

0.43

   

$

0.89

         
                       
 

GAAP 
Measure

 

Special 
Items

 

Non-GAAP 
Measure

 

Thirteen 
weeks ended 
Dec. 25, 2011

 

Workforce 
restructuring

 

Facility 
consolidation 
and asset 
impairment 
charges

 

Former 
Chairman and 
CEO 
incremental 
retirement 
charges

 

Tax benefit of 
business stock 
deduction

 

Thirteen 
weeks ended 
Dec. 25, 2011

Cost of sales and operating expenses, exclusive of depreciation

$

782,040

   

$

(46,468)

   

$

   

$

   

$

   

$

735,572

 

Selling, general and administrative expenses, exclusive of depreciation

331,741

   

(3,984)

   

   

(14,738)

   

   

313,019

 

Facility consolidation and asset impairment charges

13,193

   

   

(13,193)

   

   

   

 

Operating expenses

1,175,495

   

(50,452)

   

(13,193)

   

(14,738)

   

   

1,097,112

 

Operating income

212,260

   

50,452

   

13,193

   

14,738

   

   

290,643

 

Equity income (loss) in unconsolidated investees, net

(5,797)

   

   

13,862

   

   

   

8,065

 

Other non-operating items

(14,854)

   

   

14,529

   

   

   

(325)

 

Total non-operating (expense) income

(61,482)

   

   

28,391

   

   

   

(33,091)

 

Income before income taxes

150,778

   

50,452

   

41,584

   

14,738

   

   

257,552

 

Provision for income taxes

26,100

   

19,400

   

15,300

   

5,900

   

10,700

   

77,400

 

Net income

124,678

   

31,052

   

26,284

   

8,838

   

(10,700)

   

180,152

 

Net income attributable to Gannett Co., Inc.

116,940

   

31,052

   

26,284

   

8,838

   

(10,700)

   

172,414

 

Net income per share - diluted (a)

$

0.49

   

$

0.13

   

$

0.11

   

$

0.04

   

$

(0.04)

   

$

0.72

 
                       

(a) Total per share amount does not sum due to rounding.

 


 

Click to view table full screen

NON-GAAP FINANCIAL INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)

                                                       
                           

Table No. 6

                         
 

GAAP 
Measure

 

Special Items

 

Non-GAAP 
Measure

   
 

Fifty-three 
weeks ended 
Dec. 30, 2012

 

Workforce 
restructuring

 

Facility 
consolidation 
and asset 
impairment 
charges

 

Pension 
settlement 
charges

 

Special tax 
benefits

 

Fifty-three 
weeks ended 
Dec. 30, 2012

   

Cost of sales and operating expenses, exclusive of depreciation

$

2,943,847

   

$

(34,679)

   

$

   

$

   

$

   

$

2,909,168

     

Selling, general and administrative expenses, exclusive of depreciation

1,303,427

   

(5,891)

   

   

(7,946)

   

   

1,289,590

     

Facility consolidation and asset impairment charges

122,129

   

   

(122,129)

   

   

   

     

Operating expenses

4,563,442

   

(40,570)

   

(122,129)

   

(7,946)

   

   

4,392,797

     

Operating income

789,755

   

40,570

   

122,129

   

7,946

   

   

960,400

     

Equity income in unconsolidated investees, net

22,387

   

   

7,036

   

   

   

29,423

     

Total non-operating (expense) income

(119,348)

   

   

7,036

   

   

   

(112,312)

     

Income before income taxes

670,407

   

40,570

   

129,165

   

7,946

   

   

848,088

     

Provision for income taxes

195,400

   

15,900

   

18,700

   

3,200

   

13,100

   

246,300

     

Net income

475,007

   

24,670

   

110,465

   

4,746

   

(13,100)

   

601,788

     

Net income attributable to Gannett Co., Inc.

424,280

   

24,670

   

110,465

   

4,746

   

(13,100)

   

551,061

     

Net income per share - diluted (a)

$

1.79

   

$

0.10

   

$

0.47

   

$

0.02

   

$

(0.06)

   

$

2.33

     
                           
 

GAAP 
Measure

 

Special Items

 

Non-GAAP 
Measure

 

Fifty-two 
weeks ended 
Dec. 25, 2011

 

Workforce 
restructuring

 

Facility 
consolidation 
and asset 
impairment 
charges

 

Former 
Chairman 
and CEO 
incremental 
retirement 
charges

 

Prior year tax 
reserve 
adjustments,
net

 

Tax benefit of 
business stock 
deduction

 

Fifty-two 
weeks ended 
Dec. 25, 2011

Cost of sales and operating expenses, exclusive of depreciation

$

2,961,097

   

$

(66,145)

   

$

   

$

   

$

   

$

   

$

2,894,952

 

Selling, general and administrative expenses, exclusive of depreciation

1,223,485

   

(7,751)

   

   

(14,738)

   

   

   

1,200,996

 

Facility consolidation and asset impairment charges

27,243

   

   

(27,243)

   

   

   

   

 

Operating expenses

4,409,198

   

(73,896)

   

(27,243)

   

(14,738)

   

   

   

4,293,321

 

Operating income

830,791

   

73,896

   

27,243

   

14,738

   

   

   

946,668

 

Equity income in unconsolidated investees, net

8,197

   

   

15,739

   

   

   

   

23,936

 

Other non-operating items

(12,921)

   

   

14,529

   

   

   

   

1,608

 

Total non-operating (expense) income

(177,864)

   

   

30,268

   

   

   

   

(147,596)

 

Income before income taxes

652,927

   

73,896

   

57,511

   

14,738

   

   

   

799,072

 

Provision for income taxes

152,800

   

28,300

   

21,700

   

5,900

   

20,100

   

10,700

   

239,500

 

Net income

500,127

   

45,596

   

35,811

   

8,838

   

(20,100)

   

(10,700)

   

559,572

 

Net income attributable to Gannett Co., Inc.

458,748

   

45,596

   

35,811

   

8,838

   

(20,100)

   

(10,700)

   

518,193

 

Net income per share - diluted (a)

$

1.89

   

$

0.19

   

$

0.15

   

$

0.04

   

$

(0.08)

   

$

(0.04)

   

$

2.13

 
                           

(a) Total per share amount does not sum due to rounding.

 


 

Click to view table full screen

NON-GAAP FINANCIAL INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars

                                       
                   

Table No. 7

                 
 

GAAP 
Measure

 

Special Items

 

Non-GAAP

Measure

   
 

Fourteen 
weeks ended 
Dec. 30, 2012

 

Workforce 
restructuring

 

Facility 
consolidation 
and asset 
impairment 
charges

 

Fourteen 
weeks ended 
Dec. 30, 2012

   

Operating income:

                 

Publishing

$

128,662

   

$

6,595

   

$

17,960

   

$

153,217

     

Digital

(51,006)

   

   

90,053

   

39,047

     

Broadcasting

157,935

   

   

   

157,935

     

Corporate

(15,211)

   

   

   

(15,211)

     

Total

$

220,380

   

$

6,595

   

$

108,013

   

$

334,988

     
                   

Depreciation, amortization and facility

 consolidation and asset impairment charges:

                 

Publishing

$

47,524

   

$

   

$

(17,960)

   

$

29,564

     

Digital

99,364

   

   

(90,053)

   

9,311

     

Broadcasting

6,894

   

   

   

6,894

     

Corporate

3,948

   

   

   

3,948

     

Total

$

157,730

   

$

   

$

(108,013)

   

$

49,717

     
                   

Operating cash flow (a):

                 

Publishing

$

176,186

   

$

6,595

   

$

   

$

182,781

     

Digital

48,358

   

   

   

48,358

     

Broadcasting

164,829

   

   

   

164,829

     

Corporate

(11,263)

   

   

   

(11,263)

     

Total

$

378,110

   

$

6,595

   

$

   

$

384,705

     
                   
 

GAAP 
Measure

 

Special Items

 

Non-GAAP 
Measure

 

Thirteen 
weeks ended 
Dec. 25, 2011

 

Workforce 
restructuring

 

Facility 
consolidation 
and asset 
impairment 
charges

 

Former 
Chairman and 
CEO incremental 
retirement 
charges

 

Thirteen 
weeks ended 
Dec. 25, 2011

Operating income:

                 

Publishing

$

113,398

   

$

49,785

   

$

13,193

   

$

   

$

176,376

 

Digital

38,732

   

   

   

   

38,732

 

Broadcasting

89,724

   

667

   

   

   

90,391

 

Corporate

(29,594)

   

   

   

14,738

   

(14,856)

 

Total

$

212,260

   

$

50,452

   

$

13,193

   

$

14,738

   

$

290,643

 
                   

Depreciation, amortization and facility consolidation and asset impairment charges:

                 

Publishing

$

42,160

   

$

   

$

(13,193)

   

$

   

$

28,967

 

Digital

7,892

   

   

   

   

7,892

 

Broadcasting

6,884

   

   

   

   

6,884

 

Corporate

4,778

   

   

   

   

4,778

 

Total

$

61,714

   

$

   

$

(13,193)

   

$

   

$

48,521

 
                   

Operating cash flow (a):

                 

Publishing

$

155,558

   

$

49,785

   

$

   

$

   

$

205,343

 

Digital

46,624

   

   

   

   

46,624

 

Broadcasting

96,608

   

667

   

   

   

97,275

 

Corporate

(24,816)

   

   

   

14,738

   

(10,078)

 

Total

$

273,974

   

$

50,452

   

$

   

$

14,738

   

$

339,164

 
                   

(a) Refer to Table No. 9


 


 

Click to view table full screen

NON-GAAP FINANCIAL INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars

                                       
                   

Table No. 8

                 
 

GAAP 
Measure

 

Special Items

 

Non-GAAP 
Measure

 

Fifty-three 
weeks ended 
Dec. 30, 2012

 

Workforce 
restructuring

 

Facility 
consolidation 
and asset 
impairment 
charges

 

Pension 
settlement 
charges

 

Fifty-three 
weeks ended 
Dec. 30, 2012

Operating income:

                 

Publishing

$

368,644

   

$

42,226

   

$

32,076

   

$

   

$

442,946

 

Digital

41,700

   

   

90,053

   

   

131,753

 

Broadcasting

443,808

   

   

   

   

443,808

 

Corporate

(64,397)

   

(1,656)

   

   

7,946

   

(58,107)

 

Total

$

789,755

   

$

40,570

   

$

122,129

   

$

7,946

   

$

960,400

 
                   

Depreciation, amortization and facility

 consolidation and asset impairment charges:

                 

Publishing

$

147,750

   

$

   

$

(32,076)

   

$

   

$

115,674

 

Digital

123,990

   

   

(90,053)

   

   

33,937

 

Broadcasting

28,007

   

   

   

   

28,007

 

Corporate

16,421

   

   

   

   

16,421

 

Total

$

316,168

   

$

   

$

(122,129)

   

$

   

$

194,039

 
                   

Operating cash flow (a):

                 

Publishing

$

516,394

   

$

42,226

   

$

   

$

   

$

558,620

 

Digital

165,690

   

   

   

   

165,690

 

Broadcasting

471,815

   

   

   

   

471,815

 

Corporate

(47,976)

   

(1,656)

   

   

7,946

   

(41,686)

 

Total

$

1,105,923

   

$

40,570

   

$

   

$

7,946

   

$

1,154,439

 
 
Click to view table full screen
 
                                       
 

GAAP 
Measure

 

Special Items

 

Non-GAAP 
Measure

 

Fifty-two 
weeks ended 
Dec. 25, 2011

 

Workforce 
restructuring

 

Facility 
consolidation 
and asset 
impairment 
charges

 

Former 
Chairman and 
CEO incremental 
retirement 
charges

 

Fifty-two 
weeks ended 
Dec. 25, 2011

Operating income:

                 

Publishing

$

477,583

   

$

73,229

   

$

27,243

   

$

   

$

578,055

 

Digital

125,340

   

   

   

   

125,340

 

Broadcasting

302,140

   

667

   

   

   

302,807

 

Corporate

(74,272)

   

   

   

14,738

   

(59,534)

 

Total

$

830,791

   

$

73,896

   

$

27,243

   

$

14,738

   

$

946,668

 
                   

Depreciation, amortization and facility

 consolidation and asset impairment charges:

                 

Publishing

$

148,537

   

$

   

$

(27,243)

   

$

   

$

121,294

 

Digital

30,693

   

   

   

   

30,693

 

Broadcasting

28,926

   

   

   

   

28,926

 

Corporate

16,460

   

   

   

   

16,460

 

Total

$

224,616

   

$

   

$

(27,243)

   

$

   

$

197,373

 
                   

Operating cash flow (a):

                 

Publishing

$

626,120

   

$

73,229

   

$

   

$

   

$

699,349

 

Digital

156,033

   

   

   

   

156,033

 

Broadcasting

331,066

   

667

   

   

   

331,733

 

Corporate

(57,812)

   

   

   

14,738

   

(43,074)

 

Total

$

1,055,407

   

$

73,896

   

$

   

$

14,738

   

$

1,144,041

 
                   

(a) Refer to Table No. 9

 

 

Click to view table full screen

NON-GAAP FINANCIAL INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars

                                       
                   

Table No. 9

                 
                   

"Operating cash flow", a non-GAAP measure, is defined as operating income plus depreciation, amortization and facility consolidation and asset impairment charges. Management believes that use of this measure allows investors and management to measure, analyze and compare the performance of its business segment operations at a more detailed level and in a meaningful and consistent manner.

                   

A reconciliation of these non-GAAP amounts to the company's operating income, which the company believes is the most directly comparable financial measure calculated and presented in accordance with GAAP on the company's condensed consolidated statements of income, follow:

                   

Fourteen weeks ended Dec. 30, 2012:

                 
 

Publishing

 

Digital

 

Broadcasting

 

Corporate

 

Consolidated 
Total

                   

Operating cash flow

$

176,186

   

$

48,358

   

$

164,829

   

$

(11,263)

   

$

378,110

 

Less:

                 

Depreciation

(25,324)

   

(4,441)

   

(6,713)

   

(3,948)

   

(40,426)

 

Amortization

(4,240)

   

(4,870)

   

(181)

   

   

(9,291)

 

Facility consolidation and asset impairment charges

(17,960)

   

(90,053)

   

   

   

(108,013)

 

Operating income as reported (GAAP basis)

$

128,662

   

$

(51,006)

   

$

157,935

   

$

(15,211)

   

$

220,380

 
                   

Thirteen weeks ended Dec. 25, 2011:

                 
 

Publishing

 

Digital

 

Broadcasting

 

Corporate

 

Consolidated 
Total

                   

Operating cash flow

$

155,558

   

$

46,624

   

$

96,608

   

$

(24,816)

   

$

273,974

 

Less:

                 

Depreciation

(25,325)

   

(3,962)

   

(6,703)

   

(4,778)

   

(40,768)

 

Amortization

(3,642)

   

(3,930)

   

(181)

   

   

(7,753)

 

Facility consolidation and asset impairment charges

(13,193)

   

   

   

   

(13,193)

 

Operating income as reported (GAAP basis)

$

113,398

   

$

38,732

   

$

89,724

   

$

(29,594)

   

$

212,260

 
                   

Fifty-three weeks ended Dec. 30, 2012:

                 
 

Publishing

 

Digital

 

Broadcasting

 

Corporate

 

Consolidated 
Total

                   

Operating cash flow

$

516,394

   

$

165,690

   

$

471,815

   

$

(47,976)

   

$

1,105,923

 

Less:

                 

Depreciation

(100,109)

   

(16,934)

   

(27,282)

   

(16,421)

   

(160,746)

 

Amortization

(15,565)

   

(17,003)

   

(725)

   

   

(33,293)

 

Facility consolidation and asset impairment charges

(32,076)

   

(90,053)

   

   

   

(122,129)

 

Operating income as reported (GAAP basis)

$

368,644

   

$

41,700

   

$

443,808

   

$

(64,397)

   

$

789,755

 
                   

Fifty-two weeks ended Dec. 25, 2011:

                 
 

Publishing

 

Digital

 

Broadcasting

 

Corporate

 

Consolidated 
Total

                   

Operating cash flow

$

626,120

   

$

156,033

   

$

331,066

   

$

(57,812)

   

$

1,055,407

 

Less:

                 

Depreciation

(106,268)

   

(14,810)

   

(28,201)

   

(16,460)

   

(165,739)

 

Amortization

(15,026)

   

(15,883)

   

(725)

   

   

(31,634)

 

Facility consolidation and asset impairment charges

(27,243)

   

   

   

   

(27,243)

 

Operating income as reported (GAAP basis)

$

477,583

   

$

125,340

   

$

302,140

   

$

(74,272)

   

$

830,791

 
 


 

NON-GAAP FINANCIAL INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars

                 
         

Table No. 10

       
         

"Free cash flow" is a non-GAAP liquidity measure used in addition to and in conjunction with results presented in accordance with GAAP. Free cash flow should not be relied upon to the exclusion of GAAP financial measures.

         

Free cash flow is a non-GAAP liquidity measure that is defined as "Net cash flow from operating activities" as reported on the statement of cash flows reduced by "Purchases of property, plant and equipment" as well as "Payments for investments" and increased by "Proceeds from investments". The company believes that free cash flow is a useful measure for management and investors to evaluate the level of cash generated by operations and the ability of its operations to fund investments in new and existing businesses, return cash to shareholders under the Company's capital program, repay indebtedness, add to the company's cash balance, or to use in other discretionary activities. Management uses free cash flow to monitor cash available for repayment of indebtedness and in its discussions with the investment community.

         
 

Fourteen 
weeks ended 
Dec. 30, 2012

 

Fifty-three 
weeks ended 
Dec. 30, 2012

 
         

Net cash flow from operating activities

$

258,004

   

$

756,740

   

Purchase of property, plant and equipment

(28,864)

   

(91,874)

   

Payments for investments

(1,501)

   

(2,501)

   

Proceeds from investments

20,455

   

35,629

   

Free cash flow

$

248,094

   

$

697,994

   
 

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SOURCE Gannett Co., Inc.

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