UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported):
February 2, 2007
GANNETT CO., INC.
(Exact name of registrant as specified in charter)
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Delaware |
1-6961 |
16-0442930 |
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(State or Other Jurisdiction of Incorporation or |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
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7950 Jones Branch Drive, McLean, Virginia |
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22107-0910 |
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(Address of principal executive offices) |
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(Zip Code) |
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(703) 854-6000 |
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(Registrant's telephone number, including area code) |
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Not Applicable |
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(Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On February 2, 2007, Gannett Co., Inc. reported its consolidated financial results for the fourth quarter ended December 31, 2006. On February 2, 2007, the company also issued a press release announcing the company's statistical report for the period, quarter and year ended December 31, 2006. Copies of these press releases are furnished with this report as exhibits.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
See Index to Exhibits attached hereto.
SIGNATURE
Pursuant to requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Gannett Co., Inc. |
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Date: February 2, 2007 |
By: |
/s/George R. Gavagan |
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George R. Gavagan |
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Vice President and Controller |
INDEX TO EXHIBITS
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Exhibit No. |
Description |
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99.1 |
Gannett Co., Inc. Earnings Press Release dated February 2, 2007. |
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99.2 |
Gannett Co., Inc. Statistical Report Press Release dated February 2, 2007. |
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News Release
IMMEDIATE RELEASE
Friday, February 2, 2007
Gannett Co., Inc. Reports Fourth Quarter
and 2006 Full-Year Results
McLEAN, VA - Gannett Co., Inc. (NYSE: GCI) reported today that 2006 fourth
quarter earnings per diluted share from continuing operations were $1.51
compared with $1.44 per share in the fourth quarter of 2005, a 4.9 percent
increase. The results for the quarter include stock compensation expense of
$12.7 million ($7.9 million after tax or $0.03 per share).
"We are pleased to report record revenues for the year, surpassing $8.0 billion for the first time. We achieved these results in a year of interesting challenges as well as opportunities," said Craig Dubow, chairman, president and CEO of Gannett. "In addition, we have moved forward in significant ways on our strategic initiatives and are positioning the company for future growth."
"For the quarter, our results in the newspaper segment reflect higher
advertising demand particularly for local advertising, a strong finish at USA
TODAY and double digit digital revenue growth. A record level of politically
related advertising demand for the quarter drove strong revenue growth in our
broadcasting segment. Our results, however, were unfavorably impacted by higher
newsprint, stock compensation and interest costs," he added.
Gannett's fiscal year included 53 weeks compared with 52 weeks in 2005. The fourth quarter was comprised of 14 weeks compared with 13 weeks in the same quarter of 2005. All of the company's results detailed below were impacted by the extra week in 2006.
Reported results for the quarter and year include KTVD-TV in Denver and WATL-TV
in Atlanta which the company acquired during the third quarter of 2006.
As previously reported, the company completed the expansion and
reorganization, with MediaNews Group, of the Texas-New Mexico Newspapers
Partnership on December 25, 2005. Results for the partnership are no longer
consolidated in the company's financial statements. The company's 40.6 percent
interest in the partnership results is now included in other operating revenues.
CONTINUING OPERATIONS
Total operating revenues for the company were $2.21 billion in the fourth
quarter, a 7.5 percent increase from the fourth quarter of 2005. The increase reflected
higher advertising demand in the newspaper and broadcasting segments, television
station acquisitions and the additional week in the quarter. Total operating
revenues would have been 7.8 percent higher on a pro forma basis (assuming
Gannett owned the same complement of properties in the fourth quarters of 2006
and 2005). Operating cash flow (defined as operating income plus depreciation
and amortization) was
(more)
$656.1 million compared to $646.2 million in the same quarter of last year. Operating cash flow excluding stock compensation expense increased 3.5 percent to $668.7 million. Net income was $353.5 million in the fourth quarter of 2006 compared with $343.3 million in the year-ago quarter.
Reported operating expenses totaled $1.62 billion for the quarter, an increase of 9.8 percent. The increase reflected higher newsprint costs, stock compensation expense, acquisitions and severance expenses related to a number of efficiency efforts in the UK and U.S., including the consolidation of circulation call centers. Corporate expenses increased 25.4 percent to $21.7 million compared with the fourth quarter of 2005 reflecting stock-based compensation. Corporate expenses excluding stock compensation expense were slightly higher for the quarter.
For the year, total operating revenues were $8.03 billion, a 5.7 percent increase from 2005. On a pro forma basis, total operating revenues would have been 2.1 percent higher. Operating cash flow totaled $2.28 billion for the year versus $2.32 billion in 2005. However, excluding stock-based compensation of $47 million, operating cash flow was on a par with last year's result. Net income was $1.16 billion versus $1.21 billion in 2005.
Average diluted shares outstanding in the fourth quarter totaled 234,790,000
compared with 239,128,000 in 2005's fourth quarter. Average diluted shares
outstanding for all of 2006 were 236,756,000 versus 246,256,000 in 2005.
NEWSPAPERS
Newspaper segment operating revenues totaled $1.94 billion for the fourth quarter, an increase of 4.9 percent from the same interval in 2005. Reported advertising revenues were up 3.7 percent to $1.45 billion for the quarter. Advertising revenues would have been 5.3 percent higher if Gannett had owned the same group of newspapers in both the fourth quarters of 2006 and 2005. Local advertising revenues were up 6.6 percent, national ad revenues were 9.1 percent higher and classified revenues increased 1.7 percent on a comparable basis. In the U.S., pro forma advertising revenues were up 4.9 percent. Operating cash flow for the total newspaper segment, which includes USA TODAY and our UK properties, was $526.4 million in the fourth quarter.
Total newspaper operating expenses increased 8.3 percent, reflecting stock-based compensation expense, higher newsprint expense, consolidation costs and operating costs from the extra week in the quarter. Reported newsprint expense was 6.4 percent higher for the quarter due to higher newsprint prices partially offset by lower volume.
At USA TODAY, advertising revenues were 13.0 percent higher in the fourth quarter compared with the same quarter a year ago. Paid advertising pages totaled 1,348 compared with 1,226 in the year-ago quarter. For the full year, USA TODAY's advertising revenues increased 3.1 percent and paid pages totaled 4,387.
BROADCASTING
Broadcasting segment results for the quarter and year include WATL-TV (acquired in August 2006) and KTVD-TV (acquired in June 2006).
(more)
Broadcasting revenues (which include Captivate) increased 30.3 percent to $270.6 million for the quarter due to a record level of politically related advertising demand, strong revenue growth at Captivate and revenue from the television stations acquired in the third quarter. Substantially higher online revenues also contributed to the growth. Broadcasting revenues would have been up 22.0 percent if Gannett had owned the same group of stations in both the fourth quarters of 2006 and 2005. Reported broadcasting expenses were 26.1 percent higher in the quarter. Excluding stock-based compensation, and on a pro forma basis, broadcasting costs would have been up 16.7 percent. Operating cash flow increased 36.6 percent to $147.4 million compared with the fourth quarter of 2005.
Television revenues were $260.6 million or 29.1 percent higher in the fourth
quarter compared to $201.8 million in the same quarter a year ago. On a pro
forma basis, television revenues would have been 20.7 percent higher. Reported
television expenses grew 26.8 percent and would have been up 16.8 percent on a
pro forma basis and excluding stock-based compensation.
NON-OPERATING ITEMS
Interest expense for the fourth quarter was $80.9 million versus $62.3 million for the same quarter a year ago due to higher interest rates. Other non-operating income primarily reflected gains recorded on the sale of Internet investments, the absence of the Texas-New Mexico Newspapers Partnership minority interest charge and substantially lower losses from digital investments. This was partially offset by non-operating charges for minority interests.
* * * *
At the end of the quarter, Gannett had more than 100 domestic publishing Web sites, including USATODAY.com, one of the most popular newspaper sites on the Web. The company also had Web sites in all of its 19 television markets. In December, Gannett's consolidated domestic Internet audience share was approximately 22.1 million unique visitors reaching 13.7 percent of the Internet audience according to Nielsen//NetRatings. Newsquest is also an Internet leader in the UK where its network of Web sites attracted more than 43 million monthly page impressions from approximately 3.3 million unique users.
All references in this release to "comparable" revenue results and "operating cash flow" are to non-GAAP financial measures. Management believes that this use allows management and investors to analyze and compare the Company's results in a more meaningful and consistent manner. A reconciliation of the non-GAAP operating cash flow amounts to the Company's consolidated statements of income is attached.
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
Investor Relations section of the company's Web site, www.gannett.com, or
listen-only conference lines. U.S. callers should dial 1-800-818-5264 and
international callers should dial 913-981-4910 at least 10 minutes prior to the
scheduled start of the call. The confirmation code for the conference call is
8655942. 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 8655942. Materials related to the call will be available through the Investor
Relations section of the company's Web site Wednesday morning.
(more)
Gannett Co., Inc. is a leading international news and information company that publishes 90 daily newspapers in the USA, including USA TODAY, the nation's largest-selling daily newspaper. The company also owns nearly 1,000 non-daily publications in the USA and USA WEEKEND, a weekly newspaper magazine. Gannett subsidiary Newsquest is the United Kingdom's second largest regional newspaper company. Newsquest publishes nearly 300 titles, including 17 daily newspapers, and a network of prize-winning Web sites. Gannett also operates 23 television stations in the United States and is an Internet leader with sites sponsored by its TV stations and newspapers including USATODAY.com, one of the most popular news sites on the Web.
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.
For investor inquiries, contact:
Jeffrey Heinz
Director, Investor Relations
703-854-6917
jheinz@gannett.com
For media inquiries, contact:
Tara Connell
Vice President of Corporate Communications
703-854-6049
tjconnel@gannett.com
# # #
CONSOLIDATED STATEMENTS OF INCOME Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars (except per share amounts)
Fourteen Thirteen
weeks ended weeks ended % Inc
Dec. 31, 2006 Dec. 25, 2005 (Dec)
Net Operating Revenues:
Newspaper advertising $ 1,446,261 $ 1,394,201 3.7
Newspaper circulation 344,553 328,750 4.8
Broadcasting 270,646 207,649 30.3
Other 146,889 124,354 18.1
----------- ---------- ------
Total 2,208,349 2,054,954 7.5
----------- ---------- ------
Operating Expenses:
Cost of sales and operating
expenses, exclusive of
depreciation 1,196,747 1,089,209 9.9
Selling, general and
administrative expenses,
exclusive of depreciation 355,540 319,551 11.3
Depreciation 60,070 60,575 (0.8)
Amortization of intangible assets 9,917 7,952 24.7
----------- ---------- ------
Total 1,622,274 1,477,287 9.8
----------- ---------- ------
Operating income 586,075 577,667 1.5
----------- ---------- ------
Non-operating income (expense):
Interest expense (80,905) (62,270) 29.9
Other 10,873 68 ***
----------- ---------- ------
Total (70,032) (62,202) 12.6
----------- ---------- ------
Income before income taxes 516,043 515,465 0.1
Provision for income taxes 162,500 172,200 (5.6)
----------- ---------- ------
Net income $ 353,543 $ 343,265 3.0
=========== ========== ======
Net Income per share-basic $1.51 $1.44 4.9
=========== ========== ======
Net Income per share-diluted $1.51 $1.44 4.9
=========== ========== ======
Dividends per share $0.31 $0.29 6.9
=========== ========== ======
Note: Beginning August 1, 2005, Newspaper publishing results (revenues and expenses) reflect 100% of Detroit newspaper operations. Prior to that date, the company's 50% interest in Detroit's operating income was reflected in other revenues. Beginning in 2006, the company's 40.6% investment in the Texas-New Mexico Newspaper Partnership is reflected in other revenue. In 2005 the results of the partnership were fully consolidated.
CONSOLIDATED STATEMENTS OF INCOME Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars (except per share amounts)
Fifty-three Fifty-two
weeks ended weeks ended % Inc
Dec. 31, 2006 Dec. 25, 2005 (Dec)
Net Operating Revenues:
Newspaper advertising $ 5,370,453 $ 5,161,208 4.1
Newspaper circulation 1,306,549 1,264,031 3.4
Broadcasting 854,821 736,452 16.1
Other 501,531 437,248 14.7
----------- ---------- ------
Total 8,033,354 7,598,939 5.7
----------- ---------- ------
Operating Expenses:
Cost of sales and operating
expenses, exclusive of
depreciation 4,438,236 4,061,246 9.3
Selling, general and
administrative expenses,
exclusive of depreciation 1,320,111 1,215,256 8.6
Depreciation 242,781 251,130 (3.3)
Amortization of intangible assets 33,989 23,236 46.3
----------- ---------- ------
Total 6,035,117 5,550,868 8.7
----------- ---------- ------
Operating income 1,998,237 2,048,071 (2.4)
----------- ---------- ------
Non-operating income (expense):
Interest expense (288,040) (210,625) 36.8
Other 9,285 (19,591) ***
----------- ---------- ------
Total (278,755) (230,216) 21.1
----------- ---------- ------
Income before income taxes 1,719,482 1,817,855 (5.4)
Provision for income taxes 558,700 606,600 (7.9)
----------- ---------- ------
Net income from continuing
operations 1,160,782 1,211,255 (4.2)
----------- ---------- ------
Discontinued Operations:
Income from the operation of
discontinued operations,
net of tax - 14,644 ***
Gain on disposal of newspaper
businesses, net of tax - 18,755 ***
----------- ---------- ------
Net Income $ 1,160,782 $ 1,244,654 (6.7)
=========== ========== ======
Earnings from continuing operations per share-basic $4.91 $4.94 (0.6)
Earnings from discontinued
operations:
Earnings from the operation
of discontinued operations
per share-basic - 0.06 ***
Gain on disposal of newspaper
businesses per share-basic - 0.08 ***
----------- ---------- ------
Net Income per share-basic $4.91 $5.08 (3.3)
=========== ========== ======
Earnings from continuing operations per share-diluted $4.90 $4.92 (0.4)
Earnings from discontinued
operations:
Earnings from the operation
of discontinued operations
per share-diluted - 0.06 ***
Gain on disposal of newspaper
businesses per share-diluted - 0.08 ***
----------- ---------- ------
Net Income per share-diluted $4.90 $5.05 (3.0)
=========== ========== ======
Dividends per share $1.20 $1.12 7.1
=========== ========== ======
Note: Beginning August 1, 2005, Newspaper publishing results (revenues and expenses) reflect 100% of Detroit newspaper operations. Prior to that date, the company's 50% interest in Detroit's operating income was reflected in other revenues. Beginning in 2006, the company's 40.6% investment in the Texas-New Mexico Newspaper Partnership is reflected in other revenue. In 2005 the results of the partnership were fully consolidated.
BUSINESS SEGMENT INFORMATION Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars
Fourteen Thirteen
weeks ended weeks ended % Inc
Dec. 31, 2006 Dec. 25, 2005 (Dec)
Net Operating Revenues:
Newspaper publishing $ 1,937,704 $ 1,847,305 4.9
Broadcasting 270,645 207,649 30.3
----------- ---------- ------
Total $ 2,208,349 $ 2,054,954 7.5
=========== ========== ======
Operating Income
(net of depreciation
and amortization):
Newspaper publishing $ 472,620 $ 494,780 (4.5)
Broadcasting 135,199 100,231 34.9
Corporate (21,744) (17,344) (25.4)
----------- ---------- ------
Total $ 586,075 $ 577,667 1.5
=========== ========== ======
Depreciation and Amortization:
Newspaper publishing $ 53,780 $ 56,844 (5.4)
Broadcasting 12,194 7,682 58.7
Corporate 4,013 4,001 0.3
----------- ---------- ------
Total $ 69,987 $ 68,527 2.1
=========== ========== ======
Operating Cash Flow:
Newspaper publishing $ 526,400 $ 551,624 (4.6)
Broadcasting 147,393 107,913 36.6
Corporate (17,731) (13,343) (32.9)
----------- ---------- ------
Total $ 656,062 $ 646,194 1.5
=========== ========== ======
The company's fiscal year ends on the last Sunday of the calendar year. The company's 2006 fiscal year ended on December 31, 2006, and encompassed a 53 week period for the year and a 14 week period for the fourth quarter. The company's 2005 fiscal year and fourth quarter encompassed 52 weeks and 13 weeks, respectively.
Broadcasting includes results from the company's 23 television stations and Captivate Network, Inc. Reported results for quarter and year-to-date include KTVD-TV in Denver and WATL-TV in Atlanta which the company acquired during the third quarter, creating Gannett's second and third duopolies. Captivate is a national news and entertainment network which delivers programming and full motion video advertising through wireless digital video screens in elevators of premier office towers.
Operating Cash Flow represents operating income for each of the company's business segments plus related depreciation and amortization expense. See attachment for reconciliation of amounts to the Consolidated Statements of Income.
Beginning August 1, 2005, Newspaper publishing results reflect 100% of Detroit newspaper operations. Prior to that date, the company's 50% interest in Detroit's operating income was reflected in Newspaper publishing revenues. Beginning in 2006, the company's 40.6% investment in the Texas-New Mexico Newspaper Partnership is reflected in other revenue. In 2005 the results of the partnership were fully consolidated.
Beginning with the first quarter of 2006, the Company began recording stock compensation expense in connection with the requirements of Statement of Financial Accounting Standards No. 123R, "Share-Based Payment". For the fourth quarter of 2006, this non-cash expense item totaled $12.7 million and has been allocated to the Newspaper, Broadcasting and Corporate segments.
BUSINESS SEGMENT INFORMATION Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars
Fifty-three Fifty-two
weeks ended weeks ended % Inc
Dec. 31, 2006 Dec. 25, 2005 (Dec)
Net Operating Revenues:
Newspaper publishing $ 7,178,533 $ 6,862,487 4.6
Broadcasting 854,821 736,452 16.1
----------- ---------- ------
Total $ 8,033,354 $ 7,598,939 5.7
=========== ========== ======
Operating Income
(net of depreciation
and amortization):
Newspaper publishing $ 1,700,154 $ 1,805,221 (5.8)
Broadcasting 379,989 310,935 22.2
Corporate (81,906) (68,085) (20.3)
----------- ---------- ------
Total $ 1,998,237 $ 2,048,071 (2.4)
=========== ========== ======
Depreciation and Amortization:
Newspaper publishing $ 223,544 $ 227,052 (1.5)
Broadcasting 36,675 31,081 18.0
Corporate 16,551 16,233 2.0
----------- ---------- ------
Total $ 276,770 $ 274,366 0.9
=========== ========== ======
Operating Cash Flow:
Newspaper publishing $ 1,923,698 $ 2,032,273 (5.3)
Broadcasting 416,664 342,016 21.8
Corporate (65,355) (51,852) (26.0)
----------- ---------- ------
Total $ 2,275,007 $ 2,322,437 (2.0)
=========== ========== ======
The company's fiscal year ends on the last Sunday of the calendar year. The company's 2006 fiscal year ended on December 31, 2006, and encompassed a 53 week period for the year and a 14 week period for the fourth quarter. The company's 2005 fiscal year and fourth quarter encompassed 52 weeks and 13 weeks, respectively.
Broadcasting includes results from the company's 23 television stations and Captivate Network, Inc. Reported results for quarter and year-to-date include KTVD-TV in Denver and WATL-TV in Atlanta which the company acquired during the third quarter, creating Gannett's second and third duopolies. Captivate is a national news and entertainment network which delivers programming and full motion video advertising through wireless digital video screens in elevators of premier office towers.
Operating Cash Flow represents operating income for each of the company's business segments plus related depreciation and amortization expense. See attachment for reconciliation of amounts to the Consolidated Statements of Income.
Beginning August 1, 2005, Newspaper publishing results reflect 100% of Detroit newspaper operations. Prior to that date, the company's 50% interest in Detroit's operating income was reflected in Newspaper publishing revenues. Beginning in 2006, the company's 40.6% investment in the Texas-New Mexico Newspaper Partnership is reflected in other revenue. In 2005 the results of the partnership were fully consolidated.
Beginning with the first quarter of 2006, the Company began recording stock compensation expense in connection with the requirements of Statement of Financial Accounting Standards No. 123R, "Share-Based Payment". For the fourth quarter of 2006, this non-cash expense item totaled $47.0 million and has been allocated to the Newspaper, Broadcasting and Corporate segments.
NON-GAAP FINANCIAL INFORMATION Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars
"Operating cash flow", a non-GAAP measure, is defined as operating income plus depreciation and amortization of intangible assets. 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 consolidated statements of income, follows:
Fourteen weeks ended December 31, 2006
Newspaper Broadcasting Corporate Consolidated
Publishing Total
Operating cash flow $526,400 $147,393 $(17,731) $656,062
Less:
Depreciation (48,003) (8,054) (4,013) (60,070)
Amortization (5,777) (4,140) - (9,917)
-------- -------- -------- --------
Operating income $472,620 $135,199 $(21,744) $586,075
======== ======== ======== ========
Thirteen weeks ended December 25, 2005
Newspaper Broadcasting Corporate Consolidated
Publishing Total
Operating cash flow $551,624 $107,913 $(13,343) $646,194
Less:
Depreciation (49,080) (7,494) (4,001) (60,575)
Amortization (7,764) (188) - (7,952)
-------- -------- -------- --------
Operating income $494,780 $100,231 $(17,344) $577,667
======== ======== ======== ========
Fifty-three weeks ended December 31, 2006
Newspaper Broadcasting Corporate Consolidated
Publishing Total
Operating cash flow $1,923,698 $416,664 $(65,355) $2,275,007
Less:
Depreciation (194,260) (31,970) (16,551) (242,781)
Amortization (29,284) (4,705) - (33,989)
--------- -------- -------- ---------
Operating income $1,700,154 $379,989 $(81,906) $1,998,237
========= ======== ======== =========
Fifty-two weeks ended December 25, 2005
Newspaper Broadcasting Corporate Consolidated
Publishing Total
Operating cash flow $2,032,273 $342,016 $(51,852) $2,322,437
Less:
Depreciation (204,830) (30,067) (16,233) (251,130)
Amortization (22,222) (1,014) - (23,236)
--------- -------- -------- ---------
Operating income $1,805,221 $310,935 $(68,085) $2,048,071
========= ======== ======== =========
News Release
IMMEDIATE RELEASE
Friday, February 2, 2007
Gannett Co., Inc. Releases December Statistical Report
McLEAN, VA - Gannett Co., Inc. (NYSE: GCI) reported today that total pro forma operating revenues for the twelfth period increased 19.2 percent, compared with the twelfth period in 2005. The twelfth period in 2006, which ended on December 31, spanned five weeks this year instead of the usual four so comparisons are not fully representative of current trends. Without the extra week, total pro forma operating revenues would have been 1.6 percent higher. Pro forma assumes all properties presently owned were owned in both periods.
December
Pro forma newspaper advertising revenues in the five-week December period were up 17.5 percent, compared with the twelfth period in 2005. This was based on increases of 19.2 percent in ROP volume and 13.6 percent in preprint distribution. Excluding the extra week in the twelfth period, pro forma newspaper advertising revenues would have been up 1.2 percent.
Pro forma local advertising revenues increased 17.3 percent on 17.8 percent higher ROP ad volume in the five-week December period. In the U.S., across all products, all categories except financial and home improvement were ahead of last year. Excluding the fifth week in the period, pro forma local advertising revenue would have increased 1.3 percent.
Pro forma classified revenues were 14.2 percent higher in the five-week twelfth period on a 20.4 percent increase in ROP ad volume. Real estate revenues were up 11.1 percent; employment revenues were 9.8 percent higher; and automotive revenues rose 12.9 percent. At our U.S. community newspapers, pro forma classified revenues were 12.7 percent higher for the five-week period. That increase includes growth of 6.7 percent in real estate revenues, 7.2 percent in employment revenues and 14.6 percent in automotive revenues. Pro forma classified revenues would have been flat on a four-week to four-week comparison.
Pro forma national advertising revenues for the five-week December period were 23.8 percent higher on an 18.9 percent increase in ad volume. At our local domestic newspapers, national volume was up 17.1 percent in the period. At USA TODAY, advertising revenues were 24.4 percent higher on an increase in paid ad pages to 538 from 429. During the first four weeks of the period, paid ad pages were 10.9 percent higher. In the twelfth period, USA TODAY posted strong growth in all categories except the technology and advocacy categories.
Pro forma broadcasting revenues, which include Captivate, were up 16.1 percent for the five-week December period. Television revenues increased 14.2 percent for the twelfth period. National
(more)
revenues were 18.5 percent higher, while local revenues increased 11.8 percent. Excluding the fifth week, television revenues decreased 4.4 percent.
Fourth Quarter
For the fourth quarter of 2006, total pro forma operating revenues were 7.8 percent higher. The fourth quarter was comprised of 14 weeks in 2006 versus 13 weeks in 2005. Excluding the extra week, pro forma operating revenues would have increased 2.4 percent.
Pro forma newspaper advertising revenues for the quarter were up 5.3 percent. Excluding the extra week, pro forma advertising revenues were up slightly. The company's domestic advertising revenues were 4.9 percent higher but would have been down 0.6 percent on a 13-week to 13-week comparison basis.
For the quarter, pro forma local advertising increased 6.6 percent. Excluding the extra week, pro forma local advertising revenues would have been up 1.3 percent. Local advertising in the U.S. was 6.2 percent higher for the quarter and would have been up almost 1 percent excluding the extra week.
Pro forma classified revenues for the quarter increased 1.7 percent. Real estate revenues were 4.7 percent higher, while employment was down 1.8 percent and automotive was 4.2 percent lower. Classified revenues would have been down 2.2 percent excluding the extra week. For the 14-week quarter, classified revenues were up slightly at our domestic community newspapers. That increase was comprised of a 1.6 percent increase in real estate offset by a 4.4 percent decline in employment and a 3.4 percent decline in automotive revenues.
Pro forma national advertising revenues were 9.1 percent higher for quarter. At USA TODAY, advertising revenues increased 13.0 percent in the quarter. Paid advertising pages totaled 1,348 compared with 1,226 in the year-ago period. Excluding the extra week in the quarter, national advertising would have been 2.2 percent higher.
Pro forma broadcasting revenues were 22.0 percent higher and television revenues were up 20.7 percent. In a 13-week to 13-week comparison, broadcasting revenues increased 16.6 percent, reflecting higher politically related ad demand. Captivate also helped. Based on current pacings, television revenues for the first quarter of 2007 would lag last year's first quarter in the mid-to-high single digits, reflecting primarily the absence of over $22 million of Olympic revenue that benefited last year's first quarter.
****
In addition to the revenue and statistical summary, attached is a chart which
shows the consolidated Gannett Online audience share for December from
Nielsen//Net Ratings. In December, Gannett's domestic Websites had approximately 22.1 million unique
visitors reaching 13.7 percent of the Internet audience.
(more)
Included in the pro forma advertising and circulation revenue statistics are results for: Exchange & Mart and Auto Exchange (acquired in September 2005); Tallahassee (acquired in August 2005); 100 percent of the Detroit Newspaper Partnership (established in August 2005); Mint Magazine (acquired in July 2005); and Hometown Communications (acquired in March 2005). The pro forma other revenue statistics include the results for PointRoll, Inc. (acquired in June 2005). The pro forma broadcasting revenue statistics include results for KTVD-TV in Denver (acquired in late June 2006 and operated as a duopoly with KUSA-TV) and WATL-TV in Atlanta (acquired in August 2006 and operated as a duopoly with WXIA-TV). Ad linage for Newsquest, Clipper and Nursing Spectrum are not included in the ad volume statistics. Circulation volume numbers for Newsquest's paid daily newspapers are included in the enclosed statistics, but volume from unpaid daily and non-daily publications is not included in the circulation volume statistics. The revenue and statistical data related to the former Gannett-owned newspapers in Bellingham (WA), Olympia (WA) and Boise (ID) as well as the Muskogee (OK) Phoenix, which was contributed to the Gannett Foundation in April 2006, has been excluded from all periods presented.
Gannett Co., Inc. is a leading international news and information company that publishes 90 daily newspapers in the USA, including USA TODAY, the nation's largest-selling daily newspaper. The company also owns nearly 1,000 non-daily publications in the USA and USA WEEKEND, a weekly newspaper magazine. Gannett subsidiary Newsquest is the United Kingdom's second largest regional newspaper company. Newsquest publishes nearly 300 titles, including 17 daily newspapers, and a network of prize-winning Web sites. Gannett also operates 23 television stations in the United States and is an Internet leader with sites sponsored by its TV stations and newspapers including USATODAY.com, one of the most popular news sites on the Web.
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.
Contact: Jeff Heinz
Director, Investor Relations
703-854-6917
jheinz@gannett.com
GANNETT CO., INC. REVENUE & STATISTICAL SUMMARY
Period 12 (November 26, 2006 - December 31, 2006)
%
2006 2005 CHANGE CHANGE
REVENUES:
Advertising:
Local $ 243,322,000 $ 207,388,000 $ 35,934,000 17.3
National 98,615,000 79,625,000 18,990,000 23.8
Classified 162,605,000 142,391,000 20,214,000 14.2
------------- ------------ ----------- ----
Total Advertising $ 504,542,000 $ 429,404,000 $ 75,138,000 17.5
============= ============ =========== ====
Circulation 125,393,000 103,417,000 21,976,000 21.2
Other revenue 52,860,000 38,208,000 14,652,000 38.3
Broadcasting 74,521,000 64,161,000 10,360,000 16.1
------------- ------------ ----------- ----
Total Revenue $ 757,316,000 $ 635,190,000 $ 122,126,000 19.2
============= ============ =========== ====
VOLUME:
Newspaper Inches:
Local 3,643,550 3,092,316 551,234 17.8
National 415,567 349,507 66,060 18.9
Classified 4,502,000 3,739,709 762,291 20.4
------------- ------------ ----------- ----
Total ROP 8,561,117 7,181,532 1,379,585 19.2
============= ============ =========== ====
Preprint Distribution
(in thousands) 1,516,113 1,334,081 182,032 13.6
============= ============ =========== ====
NET PAID CIRCULATION:
Morning (w/USAT) 6,734,296 6,871,901 (137,605) (2.0)
Evening 868,391 895,330 (26,939) (3.0)
------------- ------------ ----------- ----
Total Daily 7,602,687 7,767,231 (164,544) (2.1)
============= ============ =========== ====
Sunday 6,164,029 6,256,802 (92,773) (1.5)
============= ============ =========== ====
Year-to-Date through December 31, 2006
%
2006 2005 CHANGE CHANGE
REVENUES:
Advertising:
Local $ 2,315,039,000 $ 2,261,020,000 $ 54,019,000 2.4
National 874,039,000 864,683,000 9,356,000 1.1
Classified 2,179,694,000 2,205,617,000 (25,923,000) (1.2)
------------- ------------- ----------- ----
Total Advertising $ 5,368,772,000 $ 5,331,320,000 $ 37,452,000 0.7
============= ============= =========== ====
Circulation 1,306,041,000 1,308,796,000 (2,755,000) (0.2)
Other revenue 501,426,000 460,930,000 40,496,000 8.8
Broadcasting 884,568,000 790,759,000 93,809,000 11.9
------------- ------------- ----------- ----
Total Revenue $ 8,060,807,000 $ 7,891,805,000 $ 169,002,000 2.1
============= ============= =========== ====
VOLUME:
Newspaper Inches:
Local 35,152,546 34,773,974 378,572 1.1
National 3,945,539 4,189,571 (244,032) (5.8)
Classified 55,556,478 55,638,037 (81,559) (0.1)
------------- ------------- ----------- ----
Total ROP 94,654,563 94,601,582 52,981 0.1
============= ============= =========== ====
Preprint Distribution
(in thousands) 12,612,518 12,679,266 (66,748) (0.5)
============= ============= =========== ====
NET PAID CIRCULATION:
Morning (w/USAT) 6,973,791 7,095,351 (121,560) (1.7)
Evening 884,926 919,834 (34,908) (3.8)
------------- ------------- ----------- ----
Total Daily 7,858,717 8,015,185 (156,468) (2.0)
============= ============= =========== ====
Sunday 6,267,176 6,412,813 (145,637) (2.3)
============= ============= =========== ====
Note: The above revenue amounts and statistics have been restated to
include all companies presently owned, including KTVD-TV in Denver
(acquired in late June 2006 and operated as a duopoly along with
KUSA-TV), WATL-TV in Atlanta (acquired in August 2006 and operated as
a duopoly along with WXIA-TV), the Exchange & Mart and Auto Exchange
(non-daily publications acquired in September 2005) , the Tallahassee
Democrat (acquired in late August 2005), 100% of the Detroit Newspaper
Partnership (established August 2005), Mint Magazine (acquired in
July 2005), PointRoll, Inc. (acquired in June 2005) and Hometown
Communications (acquired in late March 2005). PointRoll is a
marketing services company with a suite of media products that
delivers enhanced online marketing opportunities for advertisers,
agencies and online publishers. PointRoll is included above in Other
revenue. Hometown is a community publishing company with one daily
newspaper, 62 non-daily community newspapers, 24 community telephone
directories and other specialty and niche publications. The revenue
and statistical data related to the former Gannett owned newspapers
in Bellingham (WA), Olympia (WA) and Boise (ID) as well as the
Muskogee (OK) Phoenix which was contributed to the Gannett Foundation
in April 2006, has been excluded from all periods presented.
Gannett's fiscal year included 53 weeks compared with 52 weeks in
2005. All of the 2006 results in the above chart were impacted by
the extra week.
Operating results from the company's newspaper in Tucson, which
participates in a joint operating agency, are accounted for under the
equity method of accounting and are reported as a single amount in
other operating revenues. Advertising linage statistics from this
newspaper are not included above, however, circulation volume
statistics are included.
Newsquest is a regional newspaper publisher in the United Kingdom
with nearly 300 titles, including paid and unpaid daily and
non-daily products. Circulation volume statistics for Newsquest's 17
paid daily newspapers are included above. Circulation volume
statistics for Sunday Herald are included above in the Sunday
statistics. Circulation volume statistics for Newsquest's unpaid
daily and non-daily publications are not reflected above.
Advertising linage for Newsquest publications is not reflected above.
Circulation volume statistics for Detroit Free Press, a morning
newspaper, are reflected above. Circulation volume statistics for
The Detroit News, an evening newspaper, are not reflected above.
Circulation volume and advertising linage statistics for non-daily
products, including Gannett Healthcare Group (formerly Nursing
Spectrum) and Clipper Magazine are not reflected above.
GANNETT CO., INC. REVENUE & STATISTICAL SUMMARY
4th Quarter 2006 (September 25, 2006 - December 31, 2006)
%
2006 2005 CHANGE CHANGE
REVENUES:
Advertising:
Local $ 668,847,000 $ 627,322,000 $ 41,525,000 6.6
National 261,635,000 239,774,000 21,861,000 9.1
Classified 515,765,000 506,996,000 8,769,000 1.7
------------- ------------- ----------- ----
Total Advertising $ 1,446,247,000 $ 1,374,092,000 $ 72,155,000 5.3
============= ============= =========== ====
Circulation 344,451,000 324,436,000 20,015,000 6.2
Other revenue 146,903,000 127,314,000 19,589,000 15.4
Broadcasting 270,645,000 221,814,000 48,831,000 22.0
------------- ------------- ----------- ----
Total Revenue $ 2,208,246,000 $ 2,047,656,000 $ 160,590,000 7.8
============= ============= =========== ====
VOLUME:
Newspaper Inches:
Local 10,090,353 9,565,570 524,783 5.5
National 1,097,836 1,115,756 (17,920) (1.6)
Classified 13,753,834 13,245,842 507,992 3.8
------------- ------------- ---------- ----
Total ROP 24,942,023 23,927,168 1,014,855 4.2
============= ============= ========== ====
Preprint Distribution
(in thousands) 3,867,978 3,737,733 130,245 3.5
============= ============= ========== ====
NET PAID CIRCULATION:
Morning (w/USAT) 6,965,699 7,072,977 (107,278) (1.5)
Evening 880,857 907,543 (26,687) (2.9)
------------- ------------- ---------- ----
Total Daily 7,846,556 7,980,521 (133,965) (1.7)
============= ============= ========== ====
Sunday 6,240,419 6,374,592 (134,173) (2.1)
============= ============= ========== ====
Note: The above revenue amounts and statistics have been restated to
include all companies presently owned, including KTVD-TV in Denver
(acquired in late June 2006 and operated as a duopoly along with
KUSA-TV), WATL-TV in Atlanta (acquired in August 2006 and operated as
a duopoly along with WXIA-TV), the Exchange & Mart and Auto Exchange
(non-daily publications acquired in September 2005) , the Tallahassee
Democrat (acquired in late August 2005), 100% of the Detroit Newspaper
Partnership (established August 2005), Mint Magazine (acquired in
July 2005), PointRoll, Inc. (acquired in June 2005) and Hometown
Communications (acquired in late March 2005). PointRoll is a
marketing services company with a suite of media products that
delivers enhanced online marketing opportunities for advertisers,
agencies and online publishers. PointRoll is included above in Other
revenue. Hometown is a community publishing company with one daily
newspaper, 62 non-daily community newspapers, 24 community telephone
directories and other specialty and niche publications. The revenue
and statistical data related to the former Gannett owned newspapers
in Bellingham (WA), Olympia (WA) and Boise (ID) as well as the
Muskogee (OK) Phoenix which was contributed to the Gannett Foundation
in April 2006, has been excluded from all periods presented.
Gannett's fiscal year included 53 weeks compared with 52 weeks in
2005. All of the 2006 results in the above chart were impacted by
the extra week.
Operating results from the company's newspaper in Tucson, which
participates in a joint operating agency, are accounted for under the
equity method of accounting and are reported as a single amount in
other operating revenues. Advertising linage statistics from this
newspaper are not included above, however, circulation volume
statistics are included.
Newsquest is a regional newspaper publisher in the United Kingdom
with nearly 300 titles, including paid and unpaid daily and
non-daily products. Circulation volume statistics for Newsquest's 17
paid daily newspapers are included above. Circulation volume
statistics for Sunday Herald are included above in the Sunday
statistics. Circulation volume statistics for Newsquest's unpaid
daily and non-daily publications are not reflected above.
Advertising linage for Newsquest publications is not reflected above.
Circulation volume statistics for Detroit Free Press, a morning
newspaper, are reflected above. Circulation volume statistics for
The Detroit News, an evening newspaper, are not reflected above.
Circulation volume and advertising linage statistics for non-daily
products, including Gannett Healthcare Group (formerly Nursing
Spectrum) and Clipper Magazine are not reflected above.
Gannett Online Internet Audience December 2006
Nielsen//Net Ratings
Home/Work Panel Combined
Unique Visitors Percentage Reach of Per Month Internet Audience
Gannett Online 22,079,000 13.7%