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
September 29, 1996 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 September 29, 1996, was 140,956,749.
PART I. FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
SALE OF OUTDOOR ADVERTISING BUSINESS
On August 22, 1996, the Company completed the sale of its Outdoor
advertising business to Outdoor Systems, Inc. for a purchase
price of $713,000,000 in cash. The Company recorded an after-tax
gain of $294,580,000 or $2.09 per share on this sale. Operating
results for the third quarter and year-to-date exclude this gain
as well as earnings from the outdoor division for the period
leading up to the sale. The gain, along with Outdoor operating
results, are reported as a discontinued operation in the
Company's financial statements. Prior year results have been
reclassified to conform with the current year presentation.
EXCHANGE OF GANNETT RADIO STATIONS FOR WTSP-TV,
TAMPA
On September 26, 1996, the Company entered into an agreement with
Jacor Communications, Inc., to exchange the Company's radio stations
KIIS-AM/FM, Los Angeles; KSDO-AM/KKBH-FM, San Diego; and WDAE-AM/WUSA-FM,
Tampa, for WTSP-TV, the CBS television affiliate in Tampa. Closing is
expected to occur in the fourth quarter, as soon as regulatory approvals
are obtained.
OPERATING SUMMARY
Operating income for the third quarter of 1996 rose $80.8 million
or 51% from the year earlier quarter, reflecting in part earnings
from Multimedia properties acquired in December 1995. Earnings
from broadcasting rose sharply, up $37.6 million or 98%.
Multimedia television stations contributed to this growth along
with significant earnings gains from the Company's other stations
as a group. Strong demand for television advertising during the
Summer Olympics was a significant factor in the earnings
improvement. The Company's new cable business reported operating
income of $10.4 million for the quarter.
Newspaper publishing earnings rose $23.1 million or 17% from the
year earlier quarter. The improved earnings reflect the results
of Multimedia newspapers as well as higher earnings at USA Today,
fueled principally by the Olympics. A strike began at The
Detroit News on July 13, 1995. The level of losses from the
early months of the strike has declined, thus contributing to
overall earnings gains. Newspaper earnings gains were tempered
by higher newsprint prices and consumption.
Income from the Company's other businesses was $8.6 million,
reflecting the results of the alarm security and entertainment
businesses acquired with the Multimedia purchase.
Operating income for the first nine months of 1996 rose $174.7
million or 31%.
NEWSPAPERS
Reported newspaper publishing revenues rose $96.7 million or 13%
for the third quarter of 1996 and $210.2 million or 9% for the
year-to-date, reflecting in part revenues reported by Multimedia
newspapers. Newspaper advertising revenue rose $77 million or
15% for the quarter and $155 million or 10% for the first nine
months.
The tables below provide, on a pro forma basis, further details
of newspaper ad revenue and linage and preprint distribution for
the third quarter and year-to-date periods of 1996 and 1995:
Advertising revenue, in thousands of dollars (pro forma)
Third quarter 1996 1995 % Change
Local $193,516 $185,523 4
National 93,428 73,812 27
Classified 212,956 193,098 10
Total Run-of-Press 499,900 452,433 10
Preprint and
other advertising 85,254 83,916 2
Total ad revenue $585,154 $536,349 9
Advertising linage, in thousands of inches (pro forma)
Third quarter 1996 1995 % Change
Local 7,710 7,916 (3)
National 542 525 3
Classified 9,289 9,014 3
Total Run-of-Press
linage 17,541 17,455 0
Preprint distribution (000's) 1,476 1,450 2
Advertising revenue, in thousands of dollars (pro forma)
Year-to-date 1996 1995 % Change
Local $ 589,652 $ 590,706 0
National 281,997 243,878 16
Classified 615,260 580,401 6
Total Run-of-Press 1,486,909 1,414,985 5
Preprint and
other advertising 258,424 261,597 (1)
Total ad revenue $1,745,333 $1,676,582 4
Advertising linage, in thousands of inches (pro forma)
Year-to-date 1996 1995 % Change
Local 23,179 24,315 (5)
National 1,696 1,685 1
Classified 26,973 26,609 1
Total Run-of-Press
linage 51,848 52,609 (1)
Preprint distribution (000's) 4,453 4,548 (2)
In the pro forma presentation above, total advertising revenues
for the Company's newspapers rose 9% for the quarter and 4% for
the first nine months. Local ad revenues increased 4% for the
quarter and were even for the year-to-date. National ad revenue
rose 27% for the quarter and 16% year-to-date, reflecting strong
advertising revenue gains by USA Today. Classified advertising,
up 10% for the quarter and 6% year-to-date, reflects gains across
the newspaper group, with continued improvement in the
employment, auto and real estate categories. Ad revenues in all
categories were bolstered by improvement at The Detroit News.
Reported newspaper circulation revenues rose 9% for the quarter
and 8% for the year-to-date. On a pro forma basis, circulation
revenues were up 5% for the quarter and 3% for the year-to-date.
Net paid daily circulation for the Company's local newspapers was
down 2% for the quarter and 3% for the first nine months, while
Sunday circulation declined 4% for the quarter and 5% for the
year-to-date. The decline in local daily and Sunday circulation
was due in part to the effect of the strike in Detroit. USA
Today reported an average daily paid circulation of 2,130,847 in
the ABC Publisher's statement for the nine months ended September
29, 1996, which, subject to audit, is a 3% increase over the
comparable period a year ago.
Operating costs for the newspaper segment rose $73.6 million or
12% for the quarter and $192.4 million or 10% for the year-to-date,
reflecting added costs from the Multimedia newspapers.
Higher newsprint prices continued to have a negative effect on
cost comparisons. In total, reported newsprint expense rose 14%
for the quarter and 31% for the year-to-date. Consumption was
above 1995 levels for both the quarter and the year-to-date
periods, including added usage of Multimedia newspapers and
greater usage at The Detroit News and at USA Today. Pro forma
consumption was up 4% for the quarter and was even for the year-to-date.
Newsprint prices have softened in recent months and for
the fourth quarter of 1996 will be below prior-year levels.
Newspaper cost increases also reflect higher benefit costs,
goodwill amortization, and one-time costs associated with a new
labor agreement and changes in circulation operations in major
newspaper markets.
Reported newspaper operating income increased $23.1 million or
17% for the quarter and $17.8 million or 4% for the first nine
months.
BROADCASTING
Broadcast revenues increased $74 million or 71% for the third
quarter and $174.2 million or 54% for the first nine months,
while operating costs were up $36.5 million or 55% for the
quarter and $78.1 million or 37% for the year-to-date. Results
for the 1996 quarter and year-to-date periods include the
Multimedia television stations. On a pro forma basis, broadcast
revenues increased 25% for the quarter and 14% for the first nine
months, reflecting strong demand for television advertising,
particularly during the Summer Olympics.
Pro forma local television ad revenues grew 30% for the quarter
and 17% year-to-date, while national revenues increased 35% for
the quarter and 17% for the first nine months. Pro forma radio
revenues were up slightly for the quarter and for the first nine
months.
Broadcasting operating income rose $37.6 million or 98% for the
quarter and $96.1 million or 86% for the year-to-date, reflecting
earnings from the new Multimedia stations as well as improved
results from most of the Company's other television stations.
The Company's nine NBC affiliates reported substantial year-over-
year gains for the quarter and first nine months of 1996, driven
by the Olympics and generally strong ratings for the network's
programs. Pro forma operating income for the radio group was up
9% for the quarter and 15% for the first nine months of 1996.
In May, 1996, the Company sold two Macon, Ga., radio stations
which were acquired as part of the Multimedia purchase in
December, 1995. This transaction does not significantly affect
broadcast operating results comparisons for 1996.
CABLE
Cable television revenues were $48 million in the third quarter
of 1996 and $143.5 million for the first nine months. On a pro
forma basis, cable revenues increased 8% for the quarter and 10%
for the year-to-date. Basic subscribers totaled approximately
460,000 at the end of the quarter, equal to 61% of homes passed.
Pay subscribers totaled approximately 335,000 at September 30,
1996. Operating income from cable totaled $10.4 million for the
quarter and $32.1 million for the year-to-date, and operating
cash flow was $23.9 million for the quarter and $72 million for the first
nine months.
OTHER BUSINESSES
The principal businesses included in this segment are the
television entertainment programming and alarm security
businesses acquired in the Multimedia purchase.
The entertainment programming and alarm security businesses were
both profitable for the quarter and for the year-to-date. The
revenue and earnings for the alarm security business are growing;
however, revenue and earnings for the entertainment business have
been adversely affected by the cessation of the Donahue show and
by competition.
NON-OPERATING INCOME AND EXPENSE
Interest expense rose $25 million or 274% for the quarter and
$80.3 million or 253% for the year-to-date, reflecting interest
on commercial paper borrowings to finance the Multimedia
acquisition in December, 1995. Average rates were lower for both
the quarter and the year-to-date periods.
PROVISION FOR INCOME TAXES
The Company's effective income tax rate on earnings from
continuing operations was 43% for the quarter and for the year-to-date.
The increase in the effective rate from 40.5% in 1995
is attributable to amortization of non-deductible intangible
assets recorded in connection with the Multimedia acquisition.
INCOME FROM CONTINUING OPERATIONS AND NET INCOME
Income from continuing operations rose $25 million or 28% for the
third quarter and $37.2 million or 12% for the year-to-date.
Earnings per share from continuing operations rose to $.82 from
$.64 for the quarter, an increase of 28%, and were $2.47 for the
first nine months of 1996, an increase of 11% over 1995.
Net income including discontinued operations totaled $414.7
million for the quarter and $654 million for the first nine
months. Including discontinued operations, net income per share
was $2.94 for the quarter and $4.64 for the year-to-date.
Discontinued operations, including the after-tax gain on the sale
of Outdoor and the after-tax earnings of Outdoor for the months
leading up to the sale, totaled $299.3 million or $2.12 per share
for the quarter compared to $5.8 million or $.05 per share for
the year-earlier quarter. For the year-to-date, earnings from
discontinued operations totaled $305.8 million or $2.17 per share
compared to $10.7 million or $.08 per share in 1995.
The weighted average number of shares outstanding totaled
140,944,000 for the third quarter of 1996, compared to
140,181,000 for the third quarter of 1995. Average shares
outstanding for the year-to-date totaled 140,823,000 for 1996 and
140,103,000 for 1995. The increase in the number of shares
outstanding for the quarter and year-to-date periods is due
mainly to the exercise of stock options.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operating activities as reported in the
accompanying Consolidated Statements of Cash Flow totaled $556
million for the first nine months of 1996, compared with $396
million a year ago. The increase is due principally to operating
cash flow from Multimedia properties acquired in December, 1995.
Principal uses of cash flow in 1996 were capital expenditures,
reduction of debt and dividends.
Capital expenditures for the year-to-date totaled $195.3 million
in 1996, compared to $106.4 million in 1995. The increase
reflects capital spending for the newly acquired Multimedia
businesses, particularly cable and alarm security, and the
purchase of land in Fairfax County, Va., for possible use as a
future site for corporate headquarters and perhaps other operations.
The Company's long-term debt was reduced by $928 million in the
first nine months of 1996 from the sale of the Outdoor advertising
business and from operating cash flow. The Company declared regular
quarterly dividends of $0.35 per share in the first and second
quarters of 1996 and $0.36 per share in the third quarter. Dividends
declared totaled $149.3 million.
CONSOLIDATED BALANCE SHEETS
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Sept. 29, 1996 Dec. 31, 1995
------------- -------------
ASSETS
Cash $ 49,162 $ 46,962
Marketable securities 3,414 23
Trade receivables, less allowance
(1996 - $19,549; 1995 - $22,182) 519,025 587,896
Other receivables 53,523 33,663
Inventories 82,675 111,653
Prepaid expenses 67,886 73,887
------------ ------------
Total current assets 775,685 854,084
------------ ------------
Property, plant and equipment:
Cost 3,395,197 3,559,666
Less accumulated depreciation (1,425,694) (1,488,979)
------------ ------------
Net property, plant and equipment 1,969,503 2,070,687
------------ ------------
Intangible and other assets:
Excess of acquisition cost over
the value of assets acquired, less amortization
(1996 - $580,562; 1995 - $491,743) 3,287,854 3,386,600
Investments and other assets 212,255 192,429
------------ ------------
Total intangible and other assets 3,500,109 3,579,029
------------ ------------
Total assets $ 6,245,297 $ 6,503,800
============ ============
LIABILITIES & SHAREHOLDERS' EQUITY
Current maturities of long-term debt $ 29 $ 90,751
Accounts payable and current portion of film
contracts payable 213,871 279,594
Compensation, interest and other accruals 285,424 276,295
Dividend payable 52,105 49,208
Income taxes 261,496 15,071
Deferred income 103,292 101,853
------------ ------------
Total current liabilities 916,217 812,772
------------ ------------
Deferred income taxes 293,764 327,916
Long-term debt, less current portion 1,930,863 2,767,880
Postretirement medical and life insurance liabilities 308,739 305,700
Other long-term liabilities 127,760 143,884
------------ ------------
Total liabilities 3,577,343 4,358,152
------------ ------------
Shareholders' Equity:
Preferred stock of $1 par value per share. Authorized
2,000,000 shares, issued - none
Common stock of $1 par value per share. Authorized
400,000,000, issued 162,210,366 shares 162,210 162,210
Additional paid-in capital 77,280 76,811
Retained earnings 3,415,971 2,923,752
Foreign currency translation adjustment 0 (12,258)
------------ ------------
Total 3,655,461 3,150,515
------------ ------------
Less treasury stock - 21,253,617 shares and
21,645,721 shares respectively, at cost (957,810) (973,272)
Deferred compensation related to ESOP (29,697) (31,595)
------------ ------------
Total shareholders' equity 2,667,954 2,145,648
------------ ------------
Total liabilities and shareholders' equity $ 6,245,297 $ 6,503,800
============ ============
CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Thirteen weeks ended % Inc
Sept. 29, 1996 Sept. 24, 1995 (Dec)
Net Operating Revenues:
Newspaper advertising $ 585,814 $ 508,821 15.1
Newspaper circulation 229,197 209,445 9.4
Broadcasting 178,879 104,787 70.7
Cable 48,237
Other 75,614 41,810 80.9
--------- ------- -----
Total 1,117,741 864,863 29.2
--------- ------- -----
Operating Expenses:
Cost of sales and operating expenses,
exclusive of depreciation 627,345 510,661 22.8
Selling, general and administrative
expenses, exclusive of depreciation 177,004 148,996 18.8
Depreciation 48,876 34,347 42.3
Amortization of intangible assets 24,040 11,168 115.3
--------- ------- -----
Total 877,265 705,172 24.4
--------- ------- -----
Operating income 240,476 159,691 50.6
--------- ------- -----
Non-operating income (expense):
Interest expense (34,111) (9,113) (274.3)
Other (3,917) 1,100 (456.1)
--------- ------- -----
Total (38,028) (8,013) (374.6)
--------- ------- -----
Income before income taxes 202,448 151,678 33.5
Provision for income taxes 87,100 61,400 41.9
--------- ------- -----
Income from continuing operations 115,348 90,278 27.8
Discontinued operations:
Income from outdoor operations, net of
taxes of $3,140 and $3,900 respectively 4,723 5,823 (18.9)
Gain on sale of outdoor, net of taxes of
$195,000 294,580
--------- ------- -----
Net income $ 414,651 $ 96,101 331.5
========= ======= =====
Earnings per share:
Earnings from continuing operations $0.82 $0.64 28.1
Earnings from discontinued operations:
Outdoor operations, net of tax $0.03 $0.05 (40.0)
Gain on sale of outdoor business,
net of tax $2.09
---- ---- -----
Net income per share $2.94 $0.69 326.1
==== ==== =====
Dividends per share $0.36 $0.35 2.9
==== ==== =====
(See note on page 2 of Consolidated Statements of Income)
CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Thirty-nine weeks ended % Inc
Sept. 29, 1996 Sept. 24, 1995 (Dec)
Net Operating Revenues:
Newspaper advertising $ 1,747,679 $ 1,592,697 9.7
Newspaper circulation 685,874 635,454 7.9
Broadcasting 496,873 322,650 54.0
Cable 143,483
Other 235,705 122,639 92.2
--------- --------- -----
Total 3,309,614 2,673,440 23.8
--------- --------- -----
Operating Expenses:
Cost of sales and operating expenses,
exclusive of depreciation 1,841,173 1,519,507 21.2
Selling, general and administrative
expenses, exclusive of depreciation 519,602 460,880 12.7
Depreciation 146,954 104,543 40.6
Amortization of intangible assets 72,172 33,536 115.2
--------- --------- -----
Total 2,579,901 2,118,466 21.8
--------- --------- -----
Operating income 729,713 554,974 31.5
--------- --------- -----
Non-operating income (expense):
Interest expense (112,042) (31,723) (253.2)
Other (6,157) (627) (882.0)
--------- --------- -----
Total (118,199) (32,350) (265.4)
--------- --------- -----
Income before income taxes 611,514 522,624 17.0
Provision for income taxes 263,325 211,600 24.4
--------- --------- -----
Income from continuing operations 348,189 311,024 11.9
Discontinued operations:
Income from outdoor operations, net of
taxes of $7,540 and $7,300, 11,248 10,706 5.1
respectively
Gain on sale of outdoor, net of taxes of
$195,000 294,580
--------- --------- -----
Net income $ 654,017 $ 321,730 103.3
========= ========= =====
Earnings per share:
Earnings from continuing operations $2.47 $2.22 11.3
Earnings from discontinued operations:
Outdoor operations, net of tax $0.08 $0.08 0.0
Gain on sale of outdoor business,
net of tax $2.09
---- ---- -----
Net income per share $4.64 $2.30 101.7
==== ==== =====
Dividends per share $1.06 $1.03 2.9
==== ==== =====
Note: The Company sold its Outdoor Advertising business in August, 1996
and for financial statement purposes for 1996 and all prior periods is
reporting Outdoor Advertising as a discontinued operation. Outdoor results
are therefore excluded from the operating results above and instead are
reflected separately as discontinued operations one-line, net of tax basis.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Thirty-nine weeks ended
Sept. 29, 1996 Sept. 24, 1995
Cash flows from operating activities
Net income $ 654,017 $ 321,730
Adjustments to reconcile net income to
operating cash flows:
Discontinued operations (305,828) (10,706)
Depreciation 146,954 104,543
Amortization of intangibles 72,172 33,536
Deferred income taxes (13,351) (13,168)
Gain on sale of assets (574) (123)
Other, net 13,312 21,011
Changes in other assets &
liabilities, net (10,669) (60,824)
--------- ---------
Net cash flow from operating activities 556,033 395,999
--------- ---------
Cash flows from investing activities
Purchase of property, plant & equipment (195,322) (106,376)
Change in other investments (18,341) (2,320)
Proceeds from sale of certain assets 720,928 1,622
Collection of long-term receivables 1,205 4,711
--------- ---------
Net cash provided by (used for)
investing activities 508,470 (102,363)
--------- ---------
Cash flow from financing activities
Payments of long-term debt (927,739) (166,936)
Dividends paid (146,407) (142,915)
Cost of common shares repurchased (1,436)
Proceeds from issuance of common stock 16,906 7,227
--------- ---------
Net cash used for financing activities (1,058,676) (302,624)
--------- ---------
Effect of currency exchange rate change (236) 273
--------- ---------
Net increase (decrease) in cash and cash equivalents 5,591 (8,715)
Balance of cash & cash equivalents at
beginning of year 46,985 44,252
--------- ---------
Balance of cash and cash equivalents at
end of third quarter $ 52,576 $ 35,537
========= =========
BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Quarter ended % Inc
Sept. 29, 1996 Sept. 24, 1995 (Dec)
Operating Revenues:
Newspaper publishing $ 849,220 $ 752,527 12.8
Broadcasting 178,879 104,787 70.7
Cable 48,237
Other businesses 41,405 7,549 448.5
--------- --------- -----
Total $ 1,117,741 $ 864,863 29.2
========= ========= =====
Operating Income
(net of depreciation & amortization):
Newspaper publishing $ 159,732 $ 136,603 16.9
Broadcasting 76,116 38,513 97.6
Cable 10,410 -
Other businesses 8,625 (259) *
Corporate (14,407) (15,166) 5.0
--------- --------- -----
Total $ 240,476 $ 159,691 50.6
========= ========= =====
Depreciation and Amortization:
Newspaper publishing $ 40,013 $ 35,885 11.5
Broadcasting 12,886 6,991 84.3
Cable 13,532 -
Other businesses 4,018 284 *
Corporate 2,467 2,355 4.8
--------- --------- -----
Total $ 72,916 $ 45,515 60.2
========= ========= =====
Operating Cash Flow:
Newspaper publishing $ 199,745 $ 172,488 15.8
Broadcasting 89,002 45,504 95.6
Cable 23,942 -
Other businesses 12,643 25 *
Corporate (11,940) (12,811) 6.8
--------- --------- -----
Total $ 313,392 $ 205,206 52.7
========= ========= =====
(See notes on page 2 of business segment information)
BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Year-to-date % Inc
Sept. 29, 1996 Sept. 24, 1995 (Dec)
Operating Revenues:
Newspaper publishing $ 2,538,627 $ 2,328,422 9.0
Broadcasting 496,873 322,650 54.0
Cable 143,483 -
Other businesses 130,631 22,368 484.0
--------- --------- -----
Total $ 3,309,614 $ 2,673,440 23.8
========= ========= =====
Operating Income
net of depreciation and amortization):
Newspaper publishing $ 510,394 $ 492,623 3.6
Broadcasting 208,264 112,119 85.8
Cable 32,133 -
Other businesses 26,333 (188) *
Corporate (47,411) (49,580) 4.4
------- ------- ----
Total $ 729,713 $ 554,974 31.5
======= ======= ====
Depreciation and Amortization:
Newspaper publishing $ 120,989 $ 108,746 11.3
Broadcasting 38,904 21,061 84.7
Cable 39,883 -
Other businesses 11,771 839 *
Corporate 7,579 7,433 2.0
------- ------- ----
Total $ 219,126 $ 138,079 58.7
======= ======= ====
Operating Cash Flow:
Newspaper publishing $ 631,383 $ 601,369 5.0
Broadcasting 247,168 133,180 85.6
Cable 72,016 -
Other businesses 38,104 651 *
Corporate (39,832) (42,147) 5.5
------- ------- ----
Total $ 948,839 $ 693,053 36.9
======= ======= ====
NOTES:
(1) The Company sold its Outdoor Advertising business in August,
1996 and for financial statement purposes for 1996 and all prior periods is
reporting Outdoor Advertising as a discontinued operation. Outdoor results
are therefore excluded from the "Other businesses" segment reflected above.
(2) Operating Cash Flow represents operating income for each of the
Company's business segments plus related depreciation and amortization expense.
NOTE TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 29, 1996
1. Basis of Presentation
The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with the instructions
for Form 10-Q and, therefore, do not include all information and
footnotes which are normally included in Form 10-K and annual
report to shareholders. The financial statements covering the 13
and 39 week periods ended September 29, 1996, and the comparative
periods of 1995 reflect all adjustments which, in the opinion of the
Company, are necessary for a fair statement of results for the interim
periods.
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) Reports on Form 8-K.
(I) Current Report on Form 8-K dated July 10, 1996
in connection with the sale of the Company's
outdoor advertising business.
(ii) Current Report on Form 8-K dated August 22,
1996 in connection with the closing of the sale of
the Company's outdoor advertising 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: November 13, 1996 /s/
----------------------------------------
Larry F. Miller
Senior Vice President/Financial
Planning and Controller
Dated: November 13, 1996 /s/
----------------------------------------
Thomas L. Chapple
Senior Vice President, General
Counsel and Secretary
EXHIBIT INDEX
Exhibit
Number Title or Description Location
4-1 $1,000,000,000 Revolving Incorporated by reference
Credit Agreement among to Exhibit 4-1 to Gannett
Gannett Co., Inc. and Co., Inc.'s Form 10-K for
the Banks named therein. the fiscal year ended
December 26, 1993.
4-2 Amendment Number One to Incorporated by reference
$1,000,000,000 Revolving to Exhibit 4-2 to Gannett
Credit Agreement among Co., Inc.'s Form 10-Q for
Gannett Co., Inc. and the fiscal quarter ended
the Banks named therein. June 26, 1994.
4-3 Amendment Number Two to Incorporated by reference
$1,500,000,000 Revolving to Gannett Co., Inc.'s
Credit Agreement among Form 10-K for the fiscal
Gannett Co., Inc. and year ended December 31,
the Banks named therein. 1995.
4-4 Amendment Number Three Attached.
to $3,000,000,000
Revolving Credit
Agreement among Gannett
Co., Inc. and the Banks
named therein, dated as
of August 20, 1996.
4-5 Indenture dated as of Incorporated by reference
March 1, 1983 between to Exhibit 4-2 to Gannett
Gannett Co., Inc. and Co., Inc's Form 10-K for the
Citibank, N.A., as fiscal year ended
Trustee. December 29, 1985.
4-6 First Supplemental Incorporated by reference
Indenture dated as of to Exhibit 4 to Gannett
November 5, 1986 among Co., Inc.'s Form 8-K filed
Gannett Co., Inc., on November 9, 1986.
Citibank, N.A., as
Trustee, and Sovran
Bank, N.A., as
Successor Trustee.
4-7 Second Supplemental Incorporated by reference
Indenture dated as of to Exhibit 4 to Gannett Co.,
June 1, 1995 among Inc.'s Form 8-K filed
Gannett Co., Inc., June 15, 1995
NationsBank, N.A., as
Trustee, and Crestar
Bank, as Trustee.
4-8 Rights Plan. Incorporated by reference
to Exhibit 1 to Gannett Co.,
Inc.'s Form 8-K filed on
May 23, 1990.
10-1 Amended and Restated Attached.
Gannett Co., Inc.
Deferred Compensation
Plan.
11 Statement re computation Attached.
of earnings per share.
27 Financial Data Schedule Attached.
Gannett Co., Inc., agrees to furnish to the Securities and Exchange
Commission, upon request, a copy of each agreement with respect to
long-term debt not filed herewith in reliance upon the exemption from
filing applicable to any series of debt which does not exceed 10% of the
total consolidated assets of the registrant.
AMENDMENT NUMBER THREE
to
$3,000,000,000
REVOLVING CREDIT AGREEMENT
dated as of December 1, 1993
between
GANNETT CO., INC.
and
BANK OF AMERICA NT&SA,
MORGAN GUARANTY TRUST COMPANY,
NATIONSBANK N.A. (CAROLINAS), FIRST CHICAGO NBD,
CITIBANK, N.A.,
THE FUJI BANK, LIMITED, TORONTO DOMINION (TEXAS), INC.,
WACHOVIA BANK OF GEORGIA, N.A., BANK OF HAWAII,
WELLS FARGO BANK, THE BANK OF NOVA SCOTIA,
THE CHASE MANHATTAN BANK, N.A.,
DEUTSCHE BANK AG, MARINE MIDLAND BANK,
PNC BANK, NATIONAL ASSOCIATION,
ROYAL BANK OF CANADA, THE SANWA BANK, LIMITED,
CRESTAR BANK, THE NORTHERN TRUST COMPANY, and
THE FIRST NATIONAL BANK OF MARYLAND,
as amended
GANNETT CO., INC.
Amendment Number Three
to
$3,000,000,000
Revolving Credit Agreement
This Amendment Number Three is made as of August 20, 1996
between Gannett Co., Inc., a Delaware corporation ("Gannett"), and
the Banks signatory hereto (each called a "Bank" and collectively
the "Banks"). Unless otherwise defined herein, all capitalized terms
used herein shall have the meaning ascribed to such terms in the
Agreement (as defined below).
Gannett entered into a $1,000,000,000 Revolving Credit Agreement
with the Banks dated December 1, 1993 (the "Agreement"). On
August 1, 1994, pursuant to Amendment Number One to the Agreement,
the Agreement was amended to increase the aggregate commitment
to $1,500,000,000, extend the Expiration Date and modify the Facility Fee.
On November 13, 1995, pursuant to Amendment Number Two to the
Agreement, the Agreement was amended to increase the aggregate
commitment to $3,000,000,000, extend the Expiration Date, modify the
Facility Fee, adjust the Applicable Margin in effect with respect to
the Money Market Rate and the Eurodollar Rate, and amend Schedule 1 to
the Agreement.
Gannett and the Banks wish to further amend the Agreement to modify
the notice requirements with respect to Alternate Rate Advances, to
eliminate a certain representation regarding environmental matters as
a condition to lending and to reflect a change in certain of the Banks.
The parties hereby agree as follows:
1. The terms "this Agreement," "hereunder," "herein" and similar
references in the Agreement shall be deemed to refer to the Agreement
as amended hereby.
2. Section 3(b)(i) of the Agreement shall be amended in its
entirety to read as follows:
3(b). Money Market and Alternate Rate Advances
(i) For each Money Market Advance and Alternate Rate Advance,
Gannett shall deliver to the Servicing Bank notice
before such proposed Borrowing specifying the total
amount of such Borrowing, whether it is to be comprised
of Money Market Advances or Alternate Rate Advances,
the applicable N.Y. Interest Period, the amount
thereof which is to be loaned by each Bank, the date of
such proposed Borrowing and the Maturity Date, which
shall not be later than the Expiration Date. Notice
with respect to Money Market Advances shall be delivered
at least one Business Day prior to the proposed Borrowing.
Notice with respect to Alternate Rate Advances may be
delivered on or prior to the date of the proposed
Borrowing, provided that with respect to same day notice
such notice shall have been received by the Servicing
Bank by 12:00 p.m. (New York, New York time) on the date
of the proposed Borrowing. Upon its receipt of Gannett's
notice, the Servicing Bank shall promptly notify each
Bank by telecopy of the date of the proposed borrowing,
the amount to be loaned by such Bank, whether it is to
be a Money Market Advance or an Alternate Rate Advance,
the N.Y. Interest Period and the Maturity Date, which
shall be the last day of the N.Y. Interest Period.
Thereafter, the Servicing Bank shall forward a
xerographic copy of Gannett's notice to each other Bank.
On the date specified in any such notice with respect
to Money Market Advances or Alternate Rate Advances for
which longer than same day notice has been provided,
each Bank shall make its share of the Borrowing available
in immediately available funds to Gannett at the principal
office of the Servicing Bank prior to 11:00 a.m.
(New York, New York time). With respect to Alternate
Rate Advances for which same day notice has been provided,
each Bank shall make its share of the Borrowing available
in immediately available funds to Gannett at the principal
office of the Servicing Bank as promptly as possible
following notice from the Servicing Bank as to the
proposed Borrowing, and in any event prior to 2:00 p.m.
on such day.
3. Section 7(a) shall be amended by deleting from clause (ii) thereof
the words "and 5(h)" and inserting before the reference to "5(g)" and in
place of the comma preceding the reference to 5(g) the word "and".
4. Schedule 1 of the Agreement shall be amended in its entirety to
read as set forth in Schedule 1 to this Amendment, and those financial
institutions whose names appear on Schedule 1 hereto shall each be a
"Bank" and, collectively, the "Banks" for all purposes under the Agreement
and this Amendment No. 3.
5. The terms of this Agreement shall be in addition to and shall in no
way impair the full force and effect of the Agreement (except as specifically
amended herein).
6. This Amendment may be executed by the parties in as many
counterparts as may be deemed necessary and convenient, and by the different
parties on separate counterparts, each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute but one and
the same instrument.
7. THIS AMENDMENT NUMBER THREE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties have executed this Amendment
Number Three as of the date first written above.
GANNETT CO., INC.
/s/
By: ___________________________________
Name: Gracia C. Martore
Title: Vice President/Treasury Services
BANK OF AMERICA NT&SA
/s/
By: ___________________________________
Name: Amy S. Trapp
Title: Vice President
THE CHASE MANHATTAN BANK, N.A. (as
successor by merger with Chemical Bank)
/s/
By: ___________________________________
Name: John J. Huber, III
Title: Managing Director
MORGAN GUARANTY TRUST COMPANY
/s/
By: ___________________________________
Name: Eugenia Wilds
Title: Vice President
NATIONSBANK N.A. (CAROLINAS)
/s/
By: ___________________________________
Name: Daniel J. Rabbitt
Title: Officer
FIRST CHICAGO NBD (formerly known as The
First National Bank of Chicago)
/s/
By: ___________________________________
Name: Michael P. King
Title: Corporate Banking Officer
CITIBANK, N.A.
/s/
By: ___________________________________
Name: Eric Hattner, Attorney-in-Fact
Title: Vice President
THE FUJI BANK, LIMITED
/s/
By: ___________________________________
Name: Toshiaki Yakura
Title: SVP and Group Head
TORONTO DOMINION (TEXAS), INC.
/s/
By: ___________________________________
Name: Neva Nesbitt
Title: Vice President
WACHOVIA BANK OF GEORGIA, N.A.
/s/
By: ___________________________________
Name: Fitzhugh L. Wickham
Title: Vice President
BANK OF HAWAII
/s/
By: ___________________________________
Name: Bruce Helberg
Title: Officer
WELLS FARGO BANK (as successor by merger with
First Interstate Bank of California)
/s/
By: ___________________________________
Name: Daniel H. Ham
Title: Vice President
THE BANK OF NOVA SCOTIA
/s/
By: ___________________________________
Name: Vincent J. Fitzgerald, Jr.
Title: Authorized Signatory
DEUTSCHE BANK AG
/s/
By: ___________________________________
Name: Saead Ahmad
Title: Assistant Vice President
/s/
By: ___________________________________
Name: John R. Lilly
Title: Vice President
MARINE MIDLAND BANK
/s/
By: ___________________________________
Name: Gay R. Nudd
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
/s/
By: ___________________________________
Name: Daniel E. Hopkins
Title: Vice President
ROYAL BANK OF CANADA
/s/
By: ___________________________________
Name: Barbara Meyer
Title: Senior Manager
THE SANWA BANK, LIMITED
/s/
By: ___________________________________
Name: William M. Plough
Title: Vice President
CRESTAR BANK
/s/
By: ___________________________________
Name: William F. Lindlaw
Title: Vice President
THE NORTHERN TRUST COMPANY
/s/
By: ___________________________________
Name: Joseph Yacullo
Title: Vice President
THE FIRST NATIONAL BANK OF MARYLAND
/s/
By: ___________________________________
Name: Shaun E. Murphy
Title: Vice President
SCHEDULE 1
COMMITMENTS OF THE BANKS
NAME, ADDRESS AND TELECOPY COMMITMENT
AMOUNT
NUMBER OF BANK
CO-ARRANGERS
Bank of America NT&SA $250,000,000
1850 Gateway Blvd.
Concord, CA 94520
Telecopy: 510-675-7531 or 7532
With a copy to:
Bank of America NT&SA
335 Madison Avenue
New York, NY 10017
Telecopy: 212-270-2056
The Chase Manhattan Bank, N.A. $250,000,000
(as successor by merger with Chemical Bank)
270 Park Avenue
New York, NY 10017
Telecopy: 212-270-2056
Morgan Guaranty Trust Company $250,000,000
60 Wall Street, 22nd Floor
New York, NY 10260-0060
Telecopy: 212-648-5018
NationsBank N.A. (Carolinas) $250,000,000
Communications Finance Division
901 Main Street, 64th Floor
Dallas, TX 75202-3748
First Chicago NBD $250,000,000
(formerly known as The First National
Bank of Chicago)
One First National Plaza
Mail Suite 0374
Chicago, Il 60670-0083
Telecopy: 312-732-3885
CO-AGENTS
Citibank, N.A. $150,000,000
399 Park Avenue
New York, NY 10043
Telecopy: 212-793-6873
The Fuji Bank, Limited $150,000,000
Two World Trade Center, 79th Floor
New York, NY 10048
Telecopy: 212-912-9407
Toronto Dominion (Texas), Inc. $150,000,000
909 Fannin, Suite 1700
Houston, TX 77010
Telecopy: 713-951-9921
With a copy to:
The Toronto-Dominion Bank
31 West 52nd Street
New York, NY 10019-6101
Telecopy: 212-262-1926
Wachovia Bank of Georgia, N.A. $150,000,000
191 Peachtree Street, N.E.
Atlanta, GA 30303
Telecopy: 404-332-6898
LEAD MANAGERS
Bank of Hawaii $125,000,000
130 Merchant Street, 20th Floor
Honolulu, HI 96813
Telecopy: 602-752-8007
With a copy to:
Bank of Hawaii
1839 S. Alma School Board
Suite 150
Mesa, Arizona 85210
Telecopy: 602-752-8007
Wells Fargo Bank $125,000,000
(as successor by merger with
First Interstate Bank of California)
885 Third Avenue
New York, NY 10022-4802
Telecopy: 212-593-5238
The Bank of Nova Scotia
$100,000,000
New York Agency1 Liberty Plaza, 26th Floor
New York, NY 10006
Telecopy: 212-225-5090 or 5091
The Chase Manhattan Bank, N.A. $100,000,000
One Chase SquareCorp. Industries Dept.
Tower 9
Rochester, NY 14643
Telecopy: 716-258-4258
Deutsche Bank AG $100,000,000
New York Branch and/or
Cayman Islands Branch
31 West 52nd Street
New York, N.Y. 10019
Telecopy: 212-474-7936
Marine Midland Bank $100,000,000
One Marine Midland Plaza
Rochester, New York 14639
Telecopy: 716-238-7140
PNC Bank, National Association $100,000,000
Communications Banking Division
MS 12-09-01
Land Title Building
100 South Broad Street
Philadelphia, PA 19110
Attn: Scott C. Meves
Telecopy: 215-585-6680
Royal Bank of Canada $100,000,000
c/o Grand Cayman (North America #1) Branch
Financial Square
New York, N.Y. 10005-3531
Telecopy: 212-428-2372
The Sanwa Bank, Limited
$100,000,000
Atlanta AgencyGeorgia-Pacific Center
Suite 4750
133 Peachtree Street, N.E.
Atlanta, GA 30303
Telecopy: 404-589-1629
LENDERS
Crestar Bank $ 75,000,000
1445 New York Avenue, N.W.
Corporate Division - Third Floor
Washington, DC 20005
Telecopy: 202-879-6137
The Northern Trust Company $ 75,000,000
50 South LaSalle Street - B11
Chicago, IL 60675
Telecopy: 312-444-3508
The First National Bank of Maryland $ 50,000,000
1800 K Street, N.W., Suite 1010
Washington, DC 20006
Telecopy: 202-775-4838
TOTAL $3,000,000,000
GANNETT CO., INC.
DEFERRED COMPENSATION PLAN
[Restatement as of January 1, 1997]
GANNETT CO., INC.
DEFERRED COMPENSATION PLAN
[Restatement as of January 1, 1997]
Table of Contents
Page
1.0 BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Introduction . . . . . . . . . . . . . . . . . . . . 1
2.0 EXPLANATION OF PLAN. . . . . . . . . . . . . . . . . . . . 1
2.1 Effective Date . . . . . . . . . . . . . . . . . . . 1
2.2 Eligibility. . . . . . . . . . . . . . . . . . . . . 1
2.3 Interest in the Plan; Deferred
Compensation Account . . . . . . . . . . . . . . . 1
2.4 Amount of Deferral . . . . . . . . . . . . . . . . . 2
2.5 Time of Election of Deferral . . . . . . . . . . . . 2
2.6 Accounts and Investments . . . . . . . . . . . . . . 3
2.7 Participant's Option to Reallocate Amounts . . . . . 4
2.8 Reinvestment of Income . . . . . . . . . . . . . . . 4
2.9 Payment of Deferred Compensation . . . . . . . . . . 5
2.10 Manner of Electing Deferral, Choosing
Investments and Choosing Payment Options . . . . . 8
3.0 ADMINISTRATION OF THE PLAN. . . . . . . . . . . . . . . . 9
3.1 Statement of Account . . . . . . . . . . . . . . . . 9
3.2 Assignability. . . . . . . . . . . . . . . . . . . . 9
3.3 Business Days. . . . . . . . . . . . . . . . . . . . 9
3.4 Administration . . . . . . . . . . . . . . . . . . . 9
3.5 Amendment. . . . . . . . . . . . . . . . . . . . . . 9
3.6 Liability. . . . . . . . . . . . . . . . . . . . . 10
GANNETT CO., INC.
DEFERRED COMPENSATION PLAN
[Restatement as of January 1, 1997]
1.0 BACKGROUND
1.1 Introduction
The Gannett Co., Inc. Deferred Compensation Plan ("Plan")
was adopted to provide the opportunity for Directors to
defer to future years all or part of their fees and key
employees to defer to future years all or part of their
salary, bonus and/or shares of Gannett common stock issued
pursuant to Stock Incentive Rights ("SIRs") under the
Gannett Co., Inc. 1978 Long-Term Incentive Plan
("Compensation") payable by Gannett Co., Inc. ("Company") as
part of their retirement and financial planning. This
restatement is intended to provide additional flexibility in
payment terms, to reduce administrative burdens and to
reflect legal developments since the Plan's initial
adoption.
2.0 EXPLANATION OF PLAN
2.1 Effective Date
The Plan was initially effective July 1, 1987. This
amendment and restatement is effective January 1, 1997.
2.2 Eligibility
The Plan is available to (a) Directors of the Company and
(b) officers and employees of the Company who reside in the
United States and who are designated as eligible by the
Deferred Compensation Committee described in Section 3.4
("Committee"). No employee may be designated as eligible
unless the employee belongs to "a select group of management
or highly compensated employees" as defined in Title I of
ERISA.
2.3 Interest in the Plan; Deferred Compensation Account
For each eligible person who elects to defer Compensation
("Participant"), one or more Deferred Compensation Accounts
shall be established in accordance with Section 2.6(a). A
Participant's interest in the Plan shall be the
Participant's right to receive payments under the terms of
the Plan. A Participant's payments from the Plan shall be
based upon the value attributable to the Participant's
Deferred Compensation Accounts. The value attributable to a
Deferred Compensation Account on a particular date is equal
to the value on that date of the hypothetical investments
(or actual investments if a trust is established) held in
that Account.
2.4 Amount of Deferral
(a) A Participant may elect to defer receipt of all or a
part of his or her Compensation provided that the
minimum deferral for any type of Compensation to be
deferred must be $5,000 for the year of deferral or, in
the case of deferred SIRs, such minimum number of
shares as the Committee may determine. In any year in
which the percentage selected for deferral amounts to
less than $5,000 of the type of Compensation being
deferred or fewer than the designated number of SIRs,
there shall be no deferral of that type of Compensation
for that year.
(b) Notwithstanding the foregoing, Compensation shall not
be deferred to the extent that the deferral would cause
the Participant to have insufficient funds available to
provide for all withholdings he or she has authorized
to be made, or are required by law to be made, from his
or her Compensation.
2.5 Time of Election of Deferral
(a) An election to defer Compensation must be made before
the Compensation is earned. In the case of salary and
Directors' fees, the election to defer must be made
prior to the year in which the services to which the
salary or Directors' fees relate will be performed. In
the case of bonuses and SIRs, the election to defer
must be made prior to the year in which the bonuses or
SIRs will be paid.
(b) Once made, an election to defer for a particular year
is irrevocable.
(c) A Director may elect to defer Directors' fees payable
for services rendered after June 30, 1987, either under
the terms of this Plan or under the terms of the
Gannett Co., Inc. Plan for the Deferral of Directors'
Fees adopted May 1, 1979 (the "Directors' Plan").
Whenever a Director has an account under the Directors'
Plan, he or she may elect to have his or her account
balance or any part thereof under the Directors' Plan
deemed invested in the fund or funds available under
this Plan, as designated by the Director, or under the
Directors' Plan. Such elections shall be made by
written notice to the Company, and shall be pursuant
to Section 2.7 of this Plan. Any amounts allocated to
this Plan may be allocated and reallocated as this Plan
provides. Except for these changes in computing future
account balances, all other terms and conditions of the
Directors' Plan and the elections made thereunder shall
continue to apply to amounts deferred under the
Directors' Plan.
2.6 Accounts and Investments
(a) Effective for deferrals on and after January 1, 1997,
all Participant records, reports and elections after an
initial election shall be maintained on the basis of
Payment Commencement Dates (as defined in Section
2.9(b)), i.e., all amounts that have been elected to be
paid in full, or to commence payment, in a designated
calendar year shall be aggregated in a single Deferred
Compensation Account for a Participant for purposes of
subsequent recordkeeping and for elections that may be
available with respect to the deferred amounts, such as
investment elections and payment method elections.
Deferrals prior to January 1, 1997, shall be accounted
for in accordance with the accounts in effect on
December 31, 1996.
(b) The amount of Compensation deferred will be credited to
the Participant's Deferred Compensation Account or
Accounts as soon as practicable after the Compensation
would have been paid had there been no election to
defer.
The amounts credited in a Deferred Compensation Account
will be deemed invested in the fund or funds designated
by the Participant from among funds selected by the
Committee, which may include the following or any
combination of the following:
(i) money market funds;
(ii) bond funds;
(iii) equity funds; and
(iv) the Gannett stock fund.
In the discretion of the Committee, funds may be added,
deleted or substituted from time to time.
Information on the specific funds permitted under the
Plan shall be made available by the Committee to the
Participants. If the Committee adds, deletes or
substitutes a particular fund, the Committee shall
notify Participants in advance of the change and
provide Participants with the opportunity to change
their allocations among funds in connection with such
addition, deletion or substitution.
A Participant may allocate contributions to his or her
Deferred Compensation Accounts among the available
funds pursuant to such procedures and requirements as
may be specified by the Committee from time to time.
(c) All deferrals under this Plan and the earnings credited
to them are fully vested at all times.
(d) The right of any Participant to receive future payments
under the provisions of the Plan shall be a contractual
obligation of the Company but shall be subject to the
claims of the creditors of the Company in the event of
the Company's insolvency or bankruptcy as provided in
the trust agreement.
Plan assets may, in the Company's discretion, be placed
in a trust (the "Rabbi Trust") but will nevertheless
continue to be subject to the claims of the Company's
creditors in the event of the Company's insolvency or
bankruptcy as provided in the trust agreement. In any
event, the Plan is intended to be unfunded under Title
I of ERISA.
2.7 Participant's Option to Reallocate Amounts
A Participant may elect to reallocate amounts in his or her
Deferred Compensation Accounts among the available funds
pursuant to such procedures and requirements as may be
specified by the Committee from time to time.
2.8 Reinvestment of Income
Income from a fund investment in a Deferred Compensation
Account shall be reinvested in that fund as soon as
practicable under the terms of that fund.
2.9 Payment of Deferred Compensation
(a) No withdrawal may be made from the Participant's
Deferred Compensation Accounts except as provided in
this Section.
(b) At the time a deferral election is made, the
Participant shall choose the date on which payment of
the amount credited to the Deferred Compensation
Account is to commence, which date shall be either
April 1 or October 1 of the year specified by the
Participant ("Payment Commencement Date"). In the case
of Director Participants, the Payment Commencement Date
shall be no later than the first day of the month
following the Participant's retirement from the Board.
In the case of key employee Participants, the Payment
Commencement Date shall be no later than October 1 of
the year following the year during which the key
employee becomes 65 years of age.
Notwithstanding the foregoing paragraph: (i) for all
elections to defer occurring on or after November 1,
1991, (ii) in the event that the Committee adds or
substitutes a particular fund or funds, or (iii) if a
Participant elects to reallocate amounts in his or her
Deferred Compensation Accounts among available funds,
the Committee shall have the right to fix Payment
Commencement Dates and/or the date or dates upon which
the value attributable to a Deferred Compensation
Account is to be determined or paid, or modify such
previously elected dates (but in no event to a date
earlier than the date originally elected by the
Participant) in order to comply with the requirements
of the added, substituted or available fund or funds,
pursuant to such procedures and requirements as may be
specified by the Committee from time to time.
(c) At the time the election to defer is made, the
Participant may choose to receive payments either
(i) in a lump sum, or (ii) if the Payment Commencement
Date is during a year in which the Participant could
have retired under a retirement plan of the Company, in
up to ten annual installments. If a Participant elects
to receive benefits in the installment form of payment
but terminates employment for any reason, except death
or disability as described in (d) below, before
reaching his or her early or normal retirement date
under the retirement plan, the Committee, in its sole
discretion, shall determine whether to distribute such
Participant's benefits in the form of five annual
installment payments, or as a lump sum. In either
case, such payment shall begin as soon as
administratively practicable following the
Participant's termination of employment. The method of
paying a Deferred Compensation Account is the "Method
of Payment." The amount of any payment under the Plan
shall be the value attributable to the Deferred
Compensation Account on the last day of the month
preceding the month of the payment date, divided by the
number of payments remaining to be made, including the
payment for which the amount is being determined.
(d) In the event of a Participant's death or total
disability before the Participant has received all of
his or her Deferred Compensation Accounts, the value of
the Accounts (excluding the amount being paid in
installments described in the following sentence) shall
be paid either (i) in a lump sum, or (ii) in two to ten
annual installments commencing on the first day of
April of the year following the Participant's death or
total disability, as Participant at the time of
deferral may elect. If a Participant is receiving
installment payments from a Deferred Compensation
Account at the time of death or total disability, the
balance in that Account shall be paid to the
Participant's estate or to the Participant over the
installments remaining to be paid.
(e) A Participant may not change an initial Payment
Commencement Date or Method of Payment for a Deferred
Compensation Account after an election has been made
except as provided in this subsection (e) as follows:
(i) The Method of Payment elected by a Participant may
be changed by the Participant's written election
to the Committee at any time up to 36 months prior
to the earlier of the Payment Commencement Date or
the Participant's termination of employment. Any
change of an earlier election that is made within
36 months of the earlier of the Payment
Commencement Date or the Participant's termination
shall be disregarded by the Committee;
(ii) The year initially elected by the Participant as
the Payment Commencement Date may never be
changed. However, at any time prior to the
December 31 preceding such year, the Participant
may change the exact date of payment in the
payment year to the first day of any month in such
year, provided that the Participant gives the
Committee notice of such change at least 90 days
before the date benefit payments are to commence
and provided that if the Participant has elected
installment payments the total amount to be paid
to the Participant during the payment commencement
year shall be the same as the total amount that
would have been paid in the absence of such
election with each monthly installment in the
Payment Commencement Year adjusted accordingly.
Restrictions on changing Payment Commencement Dates and
Methods of Payment shall not prevent the Participant
from choosing a different Payment Commencement Date
and/or Method of Payment for amounts to be deferred in
subsequent years.
(f) Notwithstanding any Payment Commencement Date or Method
of Payment selected by a Participant, if the
Participant's employment with the Company terminates
other than (i) at or after early or normal retirement
pursuant to a retirement plan of the Company, (ii) by
reason of the Participant's death, or (iii) by reason
of the Participant's total disability, the Committee,
in its sole discretion, shall determine whether to
distribute such Participant's benefits in the form of
five annual installment payments, or as a lump sum. In
either case, such payment shall begin as soon as
administratively practicable following the
Participant's termination of employment.
(g) If, in the discretion of the Committee, the Participant
has a need for funds due to an unforeseeable emergency
benefits may be paid prior to the Participant's Payment
Commencement Date. For this purpose, an unforeseeable
emergency means an unanticipated emergency that is
caused by an event beyond the control of the
Participant or the Participant's beneficiary and that
would result in severe financial hardship if early
withdrawal were not permitted. A payment based upon
financial hardship cannot exceed the amount required to
meet the immediate financial need created by the
hardship. The Participant requesting a hardship
payment must supply the Committee with a statement
indicating the nature of the need that created the
financial hardship, the fact that all other reasonably
available resources are insufficient to meet the need,
and any other information which the Committee decides
is necessary to evaluate whether a financial hardship
exists.
(h) In the Company's discretion, payments from the Plan may
be made in cash or in the kind of property represented
by the fund or funds selected by the Participant.
(i) All contributions to the Plan and all payments from the
Plan, whether made by the Company or the Trustee, shall
be subject to all taxes required to be withheld under
applicable laws and regulations of any governmental
authorities.
2.10 Manner of Electing Deferral, Choosing Investments and
Choosing Payment Options
(a) In order to make any elections or choices permitted
hereunder, the Participant must give written notice to
the Committee. A notice electing to defer Compensation
shall specify:
(i) the percentage and type of Compensation to be
deferred;
(ii) the funds chosen by the Participant;
(iii) the Method of Payment to the Participant and the
Method of Payment to the Participant's estate in
the event of the Participant's death; and
(iv) the Payment Commencement Date.
(b) An election by a Participant to defer Compensation
shall apply only to Compensation deferred in the
calendar year for which the election is effective.
However, the designation of the Payment Commencement
Date for this year will require that all deferrals from
all years with the same Payment Commencement Date shall
constitute a single Deferred Compensation Account and
any other Plan elections such as investments, will
apply to all assets held in this Deferred Compensation
Account regardless of the year of deferral.
(c) Prior to the commencement of each calendar year, the
Committee will provide election forms to permit
Participants to defer Compensation to be earned during
that calendar year.
(d) The last form received by the Committee directing an
allocation of amounts in a Deferred Compensation
Account among the funds available shall govern until
changed by the receipt by the Committee of a subsequent
allocation form.
3.0 ADMINISTRATION OF THE PLAN
3.1 Statement of Account
Statements setting forth the values of the funds deemed to
be held in a Participant's Deferred Compensation Accounts
will be sent to each Participant quarterly or more often as
the Committee may elect. A Participant shall have two years
from the date a statement has been sent to question the
accuracy of the statement. If no objection is made to the
statement, it shall be deemed to be accurate and thereafter
binding on the Participant for all purposes.
3.2 Assignability
The benefits payable under this Plan shall not revert to the
Company or be subject to the Company's creditors prior to
the Company's insolvency or bankruptcy, nor, except pursuant
to will or the laws of descent and distribution, shall they
be subject in any way to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge,
garnishment, execution or levy of any kind by the
Participant, the Participant's beneficiary or the creditors
of either, including such liability as may arise from the
Participant's bankruptcy.
3.3 Business Days
In the event any date specified herein falls on a Saturday,
Sunday, or legal holiday, such date shall be deemed to refer
to the next business day thereafter.
3.4 Administration
This Plan shall be administered by the Deferred Compensation
Committee, which shall consist of employees of the Company
appointed by the Chief Executive Officer. The Committee has
sole discretion to determine eligibility to participate in
this Plan, to determine the eligibility for and the amount
of benefits, to interpret the Plan, to adopt rules relating
to its administration and to take any other action it deems
appropriate to administer the Plan. The decisions of the
Committee shall be final and binding on the Participants.
3.5 Amendment
This Plan may at any time and from time to time be amended
or terminated by the Board of Directors or the Compensation
Committee of the Board of Directors of the Company. A
change in the number or type of funds available shall not be
considered an amendment of the Plan. No amendment or
termination shall, without the consent of a Participant,
adversely affect such Participant's interest in the Plan.
3.6 Liability
(a) Except in the case of willful misconduct, no Director
or employee of the Company shall be personally liable
for any act done or omitted to be done by such person
with respect to this Plan.
(b) The Company shall indemnify, to the fullest extent
permitted by law, members of the Committee and
Directors and employees of the Company, both past and
present, to whom are or were delegated duties,
responsibilities and authority with respect to the
Plan, against any and all claims, losses, liabilities,
fines, penalties and expenses (including, but not
limited to, all legal fees relating thereto),
reasonably incurred by or imposed upon such persons,
arising out of any act or omission in connection with
the operation and administration of the Plan, other
than willful misconduct.
CALCULATION OF EARNINGS PER SHARE
Gannett Co., Inc. and Subsidiaries
In thousands of dollars (except per share amounts)
Thirteen weeks ended Thirty-nine weeks ended
Sept. 29, 1996 Sept. 24, 1995 Sept. 29, 1996 Sept. 24, 1995
--------- --------- --------- ---------
Income from continuing operations $ 115,348 $ 90,278 $ 348,189 $ 311,024
Income from discontinued operations
Income from outdoor operations, net of tax 4,723 5,823 11,248 10,706
Gain on sale of outdoor business, net of tax 294,580 294,580
--------- --------- --------- ---------
Net Income $ 414,651 $ 96,101 $ 654,017 $ 321,730
========= ========= ========= =========
Weighted average
number of
common shares
outstanding 140,944 140,181 140,823 140,103
========= ========= ========= =========
Income per share from continuing operations $0.82 $0.64 $2.47 $2.22
Income per share from discontinued operations
Income per share from outdoor operations 0.03 0.05 0.08 0.08
Income per share from gain on sale of outdoor 2.09 0.00 2.09 0.00
----- ----- ----- -----
Net income per share $2.94 $0.69 $4.64 $2.30
===== ===== ===== =====
5
1,000
9-MOS
DEC-29-1996
JAN-1-1996
SEP-29-1996
49,162
3,414
538,575
19,549
82,675
775,686
3,395,198
1,425,695
6,245,298
916,218
0
162,210
0
0
2,505,744
6,245,298
3,309,614
3,309,614
1,841,173
2,579,901
6,157
0
112,042
611,514
263,325
348,189
305,828
0
0
654,017
4.64
0
