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 28, 1997 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 28, 1997, was 141,838,379. Restated for
the Company's two-for-one stock split that became effective on October 6,
1997, the number of shares outstanding of the issuer's Common Stock, Par
Value $1.00, as of September 28, 1997, was 283,676,758.
PART I. FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
OPERATING SUMMARY
Operating income for the third quarter of 1997 rose $51.7
million or 22% to a total of $284.7 million. Newspaper
publishing earnings were up $58.0 million or 36% for the
quarter, reflecting strong advertising demand, a 15%
reduction in newsprint expense, continued strong USA TODAY
operating results and a favorable comparison year to year
at The Detroit News.
Broadcasting earnings declined $4.2 million or 6%,
reflecting the absence of Summer Olympics related
advertising which buoyed results in the third quarter of
1996. Operating income for the Company's cable and
security businesses rose $.8 million or 7% for the quarter.
Operating income for the first nine months of 1997 rose
$197.0 million or 28% and totaled $903.0 million.
NEWSPAPERS
Newspaper publishing revenues rose $62.2 million or 7% in
the third quarter of 1997, which included a $47.2 million
or 8% gain in advertising revenues. Newspaper publishing
revenues were up $160.2 million or 6% for the year-to-date,
including advertising gains of $135.2 million or 8%.
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 1997 and 1996:
Advertising revenue, in thousands of dollars (pro forma)
Third Quarter 1997 1996 % Change
Local $ 199,487 $ 189,682 5
National 112,622 103,543 9
Classified 233,427 213,345 9
------- ------- --
Total Run-of-Press 545,536 506,570 8
Preprint and
other advertising 89,848 85,407 5
------- ------- --
Total ad revenue $ 635,384 $ 591,977 7
======= ======= ==
Advertising linage, in thousands of inches (pro forma)
Third Quarter 1997 1996 % Change
Local 7,982 7,554 6
National 634 538 18
Classified 9,852 9,146 8
------ ----- --
Total Run-of-Press
linage 18,468 17,238 7
====== ====== ==
Preprint distribution 1,507 1,470 3
Advertising revenue, in thousands of dollars (pro forma)
Year-to-date 1997 1996 % Change
Local $ 606,549 $ 574,749 6
National 346,912 315,102 10
Classified 679,120 616,384 10
--------- --------- --
Total Run-of-Press 1,632,581 1,506,235 8
Preprint and
other advertising 268,449 258,912 4
--------- --------- --
Total ad revenue $1,901,030 $1,765,147 8
========= ========= ==
Advertising linage, in thousands of inches (pro forma)
Year-to-date 1997 1996 % Change
Local 24,070 22,681 6
National 1,937 1,679 15
Classified 28,550 26,568 7
------ ------ --
Total Run-of-Press
linage 54,557 50,928 7
====== ====== ==
Preprint distribution 4,560 4,434 3
In the pro forma presentation above, total advertising
revenues for the Company's newspapers rose 7% for the
quarter and 8% for the year-to-date. Local ad revenues
increased 5% for the quarter and 6% for the first nine
months. National ad revenues rose 9% for the quarter and
10% year-to-date, reflecting significant gains by USA TODAY
and USA WEEKEND. Classified advertising revenues increased
9% for the quarter and 10% for the year-to-date, reflecting
gains in all categories, particularly in employment.
Reported newspaper circulation revenues rose 3% for the
quarter and 2% for the first nine months. Net paid daily
circulation for the Company's local newspapers was down 1%
for the quarter and for the nine-month period, while Sunday
circulation also declined 1% for the quarter and for the
nine-month period. USA TODAY reported an average daily
paid circulation of 2,169,860 in the ABC Publisher's
statement for the 26 weeks ended September 28, 1997, which,
subject to audit, is a 2% increase over the comparable
period a year ago.
Operating costs in total for the newspaper segment were up
$4.2 million or 1% for the quarter and were down $18.6
million or 1% for the first nine months due primarily to
lower newsprint prices. Newsprint expense declined 15% for
the quarter and 23% year-to-date with consumption up 7% for
the quarter and year-to-date. If current pricing trends
continue, newsprint expense for the fourth quarter may be
up slightly compared to the fourth quarter of 1996.
Newspaper operating income increased $58.0 million or 36%
for the quarter and $178.7 million or 35% for the year-to-
date, reflecting continued strong advertising gains
throughout the group, lower newsprint prices, strong
operating results at USA TODAY and USA WEEKEND and a
favorable comparison year to year at The Detroit News.
In April 1997, the Company sold The Observer in Moultrie,
Georgia. In May 1997, the Company's commercial printing
division, Gannett Offset, acquired Printed Media Companies,
a full-service heat set printer based in Minneapolis,
Minnesota. In August 1997, the Company acquired Army Times
Publishing Company, located in Springfield, Virginia, which
publishes six weekly newspapers and one monthly
publication. These transactions did not materially affect
newspaper operating results for the quarter or year-to-date
period.
In October 1997, the Company acquired New Jersey Press,
Inc., which publishes the daily Asbury Park Press and Home
News & Tribune of East Brunswick, and operates In Jersey,
an Internet service. The Asbury Park Press, founded in
1879, has a daily circulation of approximately 160,000 and
230,000 on Sunday. The Home News & Tribune has a daily
circulation of approximately 81,000 and 87,000 on Sunday.
This transaction was completed after the close of the third
quarter and will be recorded under the purchase method of
accounting in the fourth quarter. It will not materially
affect newspaper operating results.
BROADCASTING
Broadcast revenues declined $14.0 million or 8% for the
third quarter, reflecting the absence of Summer Olympics
related advertising which buoyed results in the third
quarter of 1996. For the first nine months, broadcast
revenues increased $7.9 million or 2%. Operating costs
were down $9.8 million or 9% for the quarter and were down
$10.1 million or 4% for the year-to-date.
Pro forma broadcasting revenues declined 5% for the quarter
and increased 3% for the first nine months. Pro forma
local television ad revenues declined 4% for the quarter
and grew 5% for the year-to-date, while pro forma national
revenues declined 9% for the quarter and were flat for the
first nine months. Pro forma radio revenues were up 15% for
the quarter and 18% for the first nine months.
Reported broadcast operating income declined $4.2 million
or 6% for the quarter and increased $18.0 million or 9% for
the first nine months. Third quarter earnings comparisons
were adversely affected, particularly at the Company's NBC
affiliates, by the absence of Summer Olympics related
advertising that boosted revenues in the third quarter of
1996. Continued high demand for TV and radio advertising,
coupled with cost controls, resulted in stronger earnings
at most of the company's other broadcasting stations for
the quarter and the first nine months.
In January 1997, the Company concluded the transaction with
Argyle Television, Inc. to exchange WLWT-TV (NBC-
Cincinnati) and KOCO-TV (ABC-Oklahoma City) for WZZM-TV
(ABC-Grand Rapids/Kalamazoo/Battle Creek) and WGRZ-TV (NBC-
Buffalo). This exchange, which was necessary to comply
with Federal Communication Commission (FCC) cross-ownership
rules, was accounted for as a non-monetary transaction
under which no gain or loss was recognized. This exchange
did not materially affect broadcast operating results for
the quarter or year-to-date period.
In April 1997, the Company announced that it had entered
into an agreement to sell its remaining radio stations,
WGCI-AM/FM, Chicago, KHKS-FM, Dallas and KKBQ-AM/FM, Houston,
to Evergreen Media. The transaction is expected to close
later this year or in early 1998.
In May 1997, the Company acquired KNAZ-TV (Flagstaff, AZ)
and KMOH-TV (Kingman, AZ). With the completion of this
transaction, Gannett Broadcasting includes 18 television
stations reaching 15.7 percent of the U.S. television
homes. This transaction did not materially affect broadcast
operating results for the quarter or year-to-date period.
In October 1997, the Company announced that it had entered
into an agreement to purchase WCSH-TV, the NBC television
affiliate in Portland, Maine, and WLBZ-TV, the NBC
television affiliate in Bangor, Maine. The transaction is
subject to Federal Communications Commission and other
approvals. Closing is expected to occur near the end of
1997. Upon completion of this transaction, Gannett
Broadcasting will consist of 20 television stations
reaching 16.2 percent of U.S. television homes. This
transaction will not materially affect broadcast operating
results.
CABLE AND SECURITY
Cable television and alarm security operating revenues rose
$5.2 million or 9% for the quarter and $16.7 million or 10%
for the year-to-date, while operating expenses rose $4.4
million or 9% for the quarter and increased $12.5 million
or 9% for the first nine months. Operating income from
cable and security rose $.8 million or 7% for the quarter
and $4.2 million or 12% for the year-to-date.
Cable revenues increased 9% for the quarter and for the
year-to-date as the number of basic cable subscribers at
quarter end increased 3% and the number of pay subscribers
decreased 1%. Alarm security revenue rose 10% for the
quarter and 13% for the year-to-date as the number of alarm
security subscribers at quarter end increased 13%.
NON-OPERATING INCOME AND EXPENSE
Interest expense decreased $10.7 million or 31% for the
quarter and $38.2 million or 34% for the year-to-date,
reflecting the pay down of commercial paper borrowings from
operating cash flow and the proceeds from the sale of the
outdoor and entertainment businesses in the second half of
1996.
PROVISION FOR INCOME TAXES
The Company's effective income tax rate was 41.3% for the
quarter and for the year-to-date versus 43% for the
comparable periods in 1996. The decrease in the effective
tax rate reflects the diminished impact of the amortization
of non-deductible intangible assets given expected earnings
gains in 1997.
INCOME FROM CONTINUING OPERATIONS AND NET INCOME
On August 19, 1997, the Company's Board of Directors
approved a two-for-one stock split effective on October 6,
1997, for shareholders of record on September 12, 1997. In
this Form 10-Q, all share and per-common-share amounts have
been adjusted to reflect the stock split and $162.2 million
was transferred from retained earnings to common stock to
reflect the par value of additional shares issued.
Income from continuing operations rose $41.3 million or 37%
and totaled $152.5 million for the quarter and rose $147.4
million or 44% and totaled $482.3 million for the year-to-
date. Earnings per share from continuing operations for
the quarter rose to $0.54 from $0.39, an increase of 39%.
Earnings per share from continuing operations for the first
nine months rose to $1.70 from $1.18 or 44%.
Net income including discontinued operations declined
$262.2 million or 63% for the quarter and $171.8 million or
26% for the year-to-date. Net income per share declined to
$0.54 from $1.47 for the quarter, a decrease of 63%, and to
$1.70 from $2.32 for the year-to-date, a decrease of 27%.
The third quarter and year-to-date declines were the result
of the sale in the third quarter of 1996 of the outdoor
advertising business, which yielded an after-tax gain of
$294.6 million or $1.05 per share. Income in 1996 from the
discontinued outdoor advertising and entertainment
operations was $8.9 million or $0.03 per share for the
quarter and $24.5 million or $0.09 per share for the year-
to-date.
The weighted average number of shares outstanding totaled
283,597,000 for the third quarter of 1997, compared to
281,888,000 for the third quarter of 1996. Average shares
outstanding for the year-to-date totaled 283,227,000 for
1997 and 281,646,000 for 1996. The increase in the number
of shares outstanding for the quarter and year-to-date
periods is due mainly to the issuance of shares upon the
exercise of stock options and the settlement of stock
incentive rights.
LIQUIDITY AND CAPITAL RESOURCES
The Company's consolidated operating cash flow (defined as
operating income plus depreciation and amortization of
intangible assets) as reported in the accompanying Business
Segment Information totaled $1,127.4 million for the first
nine months of 1997, compared with $923.1 million a year
ago, a 22% increase, reflecting strong overall operating
results.
Capital expenditures for the year-to-date totaled $142.1
million, compared to $195.3 million in 1996. The Company's
long-term debt (commercial paper obligations) was reduced
by $290.8 million from operating cash flow in the first
nine months of 1997. The Company declared quarterly
dividends of $0.18 per share in each of the first and
second quarters and increased the dividend to $0.19 per
share in the third quarter. Dividends totaled $152.2
million for the first nine months.
At the end of the third quarter, the Company's long term
debt included $275 million in 5.25% notes payable due in
March 1998. These notes and the Company's commercial paper
obligations are supported by a $3.0 billion revolving
credit agreement with a term extending to November 12,
2000. As a result, these obligations are classified as
long-term debt.
OTHER MATTERS
Expenses for the first nine months included the gift of the
Niagara Gazette newspaper to the Gannett Foundation.
Subsequent to the transfer, the Gannett Foundation sold the
Niagara Gazette so that the proceeds could be used to fund
the Foundation and its community grants. The sale also
resolved the FCC newspaper-television cross-ownership
issues that arose as a result of the company's acquisition
of television station WGRZ in Buffalo, New York.
CONSOLIDATED BALANCE SHEETS
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Sept. 28, 1997 Dec. 29, 1996
--------------- ---------------
ASSETS
Cash $ 44,155 $ 27,179
Marketable securities 1,969 4,023
Trade receivables, less allowance
(1997 - $17,310; 1996 - $18,942) 552,850 569,095
Other receivables 36,218 47,850
Inventories 93,826 73,621
Prepaid expenses 43,659 44,837
--------------- ---------------
Total current assets 772,677 766,605
--------------- ---------------
Property, plant and equipment
Cost 3,578,270 3,423,400
Less accumulated depreciation (1,565,100) (1,429,340)
--------------- ---------------
Net property, plant and equipment 2,013,170 1,994,060
--------------- ---------------
Intangible and other assets
Excess of acquisition cost over the value of
assets acquired, less amortization
(1997 - $642,606; 1996 - $569,527) 3,400,493 3,393,931
Investments and other assets 212,598 195,001
--------------- ---------------
Total intangible and other assets 3,613,091 3,588,932
--------------- ---------------
Total assets $ 6,398,938 $ 6,349,597
=============== ===============
LIABILITIES & SHAREHOLDERS' EQUITY
Current maturities of long-term debt $ 18,375 $ 23,302
Accounts payable and current portion of film
contracts payable 239,465 261,838
Compensation, interest and other accruals 256,983 231,358
Dividend payable 54,335 51,890
Income taxes 6,852 46,098
Deferred income 118,055 104,510
--------------- ---------------
Total current liabilities 694,065 718,996
--------------- ---------------
Deferred income taxes 361,907 396,170
Long-term debt, less current portion 1,594,970 1,880,293
Postretirement, medical and life insurance liabilities 307,898 301,729
Other long-term liabilities 156,861 121,591
--------------- ---------------
Total liabilities 3,115,701 3,418,779
--------------- ---------------
Shareholders' Equity
Preferred stock of $1 par value per share. Authorized
2,000,000 shares; issued - none.
Common stock of $1 par value per share. Authorized
400,000,000; issued, 324,420,732 shares. 324,421 162,210
Additional paid-in capital 89,372 86,126
Retained earnings 3,818,771 3,654,681
--------------- ---------------
Total 4,232,564 3,903,017
--------------- ---------------
Less treasury stock - 40,743,974 shares and
41,785,322 shares respectively, at cost (920,592) (942,609)
Deferred compensation related to ESOP (28,735) (29,590)
--------------- ---------------
Total shareholders' equity 3,283,237 2,930,818
--------------- ---------------
Total liabilities and shareholders' equity $ 6,398,938 $ 6,349,597
=============== ===============
Note: All common share amounts have been adjusted to reflect the two-for-one stock split
effective on October 6, 1997.
CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Thirteen weeks ended % Inc
Sept. 28, 1997 Sept. 29, 1996 (Dec)
Net Operating Revenues:
Newspaper advertising $ 633,019 $ 585,814 8.1
Newspaper circulation 235,439 229,197 2.7
Broadcasting 164,895 178,879 (7.8)
Cable & Security 63,502 58,332 8.9
Other 49,235 40,481 21.6
------------- ------------ -------
Total 1,146,090 1,092,703 4.9
------------- ------------ -------
Operating Expenses:
Cost of sales and operating
expenses, exclusive of depreciation 602,418 612,888 (1.7)
Selling, general and administrative
expenses, exclusive of depreciation 184,092 174,533 5.5
Depreciation 49,979 48,772 2.5
Amortization of intangible assets 24,900 23,472 6.1
------------- ------------ -------
Total 861,389 859,665 0.2
------------- ------------ -------
Operating income 284,701 233,038 22.2
------------- ------------ -------
Non-operating income (expense):
Interest expense (23,418) (34,111) (31.3)
Other (1,573) (3,917) (59.8)
------------- ------------ -------
Total (24,991) (38,028) (34.3)
------------- ------------ -------
Income before income taxes 259,710 195,010 33.2
Provision for income taxes 107,250 83,800 28.0
------------- ------------ -------
Income from continuing operations 152,460 111,210 37.1
Discontinued operations:
Income from discontinued operations,
net of income tax 8,861 (100.0)
Gain from sale of discontinued
operations, net of income tax 294,580 (100.0)
------------- ------------ -------
Net income $ 152,460 $ 414,651 (63.2)
============= ============ =======
Earnings per share:
Earnings from continuing operations $0.54 $0.39 38.5
Earnings from discontinued
operations, net of tax 0.03 (100.0)
Gain from sale of discontinued
operations, net of tax 1.05 (100.0)
-------- -------- -------
Net income per share $0.54 $1.47 (63.3)
==== ==== ====
Dividends per share $0.19 $0.18 5.6
==== ==== ====
NOTE: All per common share amounts have been adjusted to reflect the two-for-one
stock split effective on October 6, 1997.
CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Thirty-nine weeks ended % Inc
Sept. 28, 1997 Sept. 29, 1996 (Dec)
Net Operating Revenues:
Newspaper advertising $ 1,882,877 $ 1,747,679 7.7
Newspaper circulation 701,046 685,874 2.2
Broadcasting 504,746 496,873 1.6
Cable & Security 189,411 172,676 9.7
Other 132,594 122,778 8.0
------------ ------------ -------
Total 3,410,674 3,225,880 5.7
------------ ------------ -------
Operating Expenses:
Cost of sales and operating expenses,
exclusive of depreciation 1,744,586 1,790,918 (2.6)
Selling, general and administrative
expenses, exclusive of depreciation 538,670 511,830 5.2
Depreciation 149,737 146,643 2.1
Amortization of intangible assets 74,640 70,468 5.9
------------ ------------ -------
Total 2,507,633 2,519,859 (0.5)
------------ ------------ -------
Operating income 903,041 706,021 27.9
------------ ------------ -------
Non-operating income (expense):
Interest expense (73,819) (112,042) (34.1)
Other (7,665) (6,157) 24.5
------------ ------------ -------
Total (81,484) (118,199) (31.1)
------------ ------------ -------
Income before income taxes 821,557 587,822 39.8
Provision for income taxes 339,300 252,925 34.2
------------ ------------ -------
Income from continuing operations 482,257 334,897 44.0
Discontinued operations:
Income from discontinued operations,
net of income tax 24,540 (100.0)
Gain from sale of discontinued
operations, net of income tax 294,580 (100.0)
------------ ------------ -------
Net income $ 482,257 $ 654,017 (26.3)
============ ============ =======
Earnings per share:
Earnings from continuing operations $1.70 $1.18 44.1
Earnings from discontinued
operations, net of tax 0.09 (100.0)
Gain from sale of discontinued
operations, net of tax 1.05 (100.0)
-------- -------- --------
Net income per share $1.70 $2.32 (26.7)
==== ==== ====
Dividends per share $0.55 $0.53 3.8
==== ==== ====
NOTE: All per common share amounts have been adjusted to reflect the two-for-one
stock split effective on October 6, 1997.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Thirty-nine weeks ended
Sept. 28, 1997 Sept. 29, 1996
Cash flows from operating activities
Net income $ 482,257 $ 654,017
Adjustments to reconcile net income to
operating cash flows:
Discontinued operations (319,120)
Depreciation 149,737 146,643
Amortization of intangibles 74,640 70,468
Deferred income taxes (13,500) (13,351)
Other, net (21,688) 17,376
--------- ---------
Net cash flow from operating activities 671,446 556,033
--------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment (142,062) (195,322)
Payments for acquisitions, net of cash acquired (98,721)
Change in other investments (10,501) (18,341)
Proceeds from sale of certain assets 8,993 720,928
Collection of long-term receivables 3,828 1,205
--------- ---------
Net cash (used for) provided by investing activities (238,463) 508,470
--------- ---------
Cash flow from financing activities
Payments of long-term debt (290,787) (927,739)
Dividends paid (152,226) (146,407)
Cost of common shares repurchased (1,436)
Proceeds from issuance of common stock 24,952 16,906
--------- ---------
Net cash used for financing activities (418,061) (1,058,676)
--------- ---------
Effect of currency exchange rate change (236)
--------- ---------
Net increase in cash and cash equivalents 14,922 5,591
Balance of cash and cash equivalents at
beginning of year 31,202 46,985
--------- ---------
Balance of cash and cash equivalents at
end of third quarter $ 46,124 $ 52,576
========= =========
BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Thirteen weeks ended % Inc
Sept. 28, 1997 Sept. 29, 1996 (Dec)
Operating Revenues:
Newspaper publishing $ 917,693 $ 855,492 7.3
Broadcasting 164,895 178,879 (7.8)
Cable and Security 63,502 58,332 8.9
-------------- ---------- -------
Total $ 1,146,090 $ 1,092,703 4.9
============== ========== =======
Operating Income
(net of depreciation and amortization):
Newspaper publishing $ 217,793 $ 159,783 36.3
Broadcasting 71,884 76,116 (5.6)
Cable and Security 12,323 11,546 6.7
Corporate (17,299) (14,407) (20.1)
-------------- ---------- -------
Total $ 284,701 $ 233,038 22.2
============== ========== =======
Depreciation and Amortization:
Newspaper publishing $ 41,065 $ 40,282 1.9
Broadcasting 14,404 12,886 11.8
Cable and Security 17,196 16,609 3.5
Corporate 2,214 2,467 (10.3)
-------------- ---------- -------
Total $ 74,879 $ 72,244 3.6
============== ========== =======
Operating Cash Flow:
Newspaper publishing $ 258,858 $ 200,065 29.4
Broadcasting 86,288 89,002 (3.0)
Cable and Security 29,519 28,155 4.8
Corporate (15,085) (11,940) (26.3)
-------------- ---------- -------
Total $ 359,580 $ 305,282 17.8
============== ========== =======
NOTE:
Operating Cash Flow represents operating income for each of the Company's business
segments plus related depreciation and amortization expense.
BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Thirty-nine weeks ended % Inc
Sept. 28, 1997 Sept. 29, 1996 (Dec)
Operating Revenues:
Newspaper publishing $ 2,716,517 $ 2,556,331 6.3
Broadcasting 504,746 496,873 1.6
Cable and Security 189,411 172,676 9.7
------------- ---------- -------
Total $ 3,410,674 $ 3,225,880 5.7
============= ========== =======
Operating Income
(net of depreciation and amortization):
Newspaper publishing $ 688,569 $ 509,833 35.1
Broadcasting 226,275 208,264 8.6
Cable and Security 39,573 35,335 12.0
Corporate (51,376) (47,411) (8.4)
------------- ---------- -------
Total $ 903,041 $ 706,021 27.9
============= ========== =======
Depreciation and Amortization:
Newspaper publishing $ 123,577 $ 121,741 1.5
Broadcasting 43,898 38,904 12.8
Cable and Security 50,348 48,887 3.0
Corporate 6,554 7,579 (13.5)
------------- ---------- -------
Total $ 224,377 $ 217,111 3.3
============= ========== =======
Operating Cash Flow:
Newspaper publishing $ 812,146 $ 631,574 28.6
Broadcasting 270,173 247,168 9.3
Cable and Security 89,921 84,222 6.8
Corporate (44,822) (39,832) (12.5)
------------- ---------- -------
Total $ 1,127,418 $ 923,132 22.1
============= ========== =======
NOTE:
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 28, 1997
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 28, 1997, and the comparative periods
of 1996 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 5. Other Information
Effective December 9, 1997, Karen Hastie Williams was
elected to the Company's Board of Directors. With her
election, the Board numbers 10. Ms. Williams will
serve on the Board for a term that expires at the
annual meeting of shareholders held in 2000.
The following appointments were made effective
September 24, 1997:
Douglas H. McCorkindale, Vice Chairman and President
Larry F. Miller, Executive Vice President and Chief
Financial Officer
George R. Gavagan, Vice President and Controller
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.
None.
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 12, 1997 /s/ George R. Gavagan
----------------------------------------
George R. Gavagan
Vice President and Controller
Dated: November 12, 1997 /s/ Thomas L. Chapple
----------------------------------------
Thomas L. Chapple
Senior Vice President, General
Counsel and Secretary
EXHIBIT INDEX
Exhibit
Number Title or Description Location
3-1 By-laws of Gannett Co., Attached
Inc.
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 Incorporated by reference
to $3,000,000,000 to Exhibit 4-4 to Gannett
Revolving Credit Co., Inc.'s Form 10-Q for
Agreement among Gannett the fiscal quarter ended
Co., Inc. and the Banks September 29, 1996.
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 Incorporated by reference to
Gannett Co., Inc. Exhibit 10-1 to Gannett Co.,
Deferred Compensation Inc.'s Form 10-Q for the
Plan. fiscal quarter ended
September 29, 1996.
10-2 Amendment No. 5 to Attached.
Deferred Compensation
Plan
10-3 Amendment No. 8 to Attached.
Executive Long Term
Incentive 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.
[Reflects all amendments through September 24, 1997]
BY-LAWS
OF
GANNETT CO., INC.
ARTICLE I.
Meetings of Stockholders
Section 1. Annual Meetings: The annual meeting of the
stockholders for the election of directors and for the
transaction of such other business as may come before the
meeting shall be held on such date and at such hour as shall
each year be fixed by the Board of Directors.
Section 2. Special Meetings: Except as otherwise
required by law and subject to the rights of the holders of
any class or series of stock having a preference over the
Common Stock as to dividends or upon liquidation, special
meetings of the stockholders may be called only by the
Chairman of the Board or by the Board of Directors pursuant
to a resolution approved by a majority of the entire Board of
Directors.
Section 3. Place of Meeting: Meetings of stockholders
of the Corporation shall be held at such place, either within
or without the State of Delaware, as shall be fixed by the
Board of Directors in the case of meetings called by the
Board, or by the Chairman of the Board in the case of
meetings called by the Chairman, and specified in the notice
of said meeting.
Section 4. Notice of Meetings: Except as otherwise
permitted or provided by law or these By-laws, written notice
of each meeting of the stockholders shall be given to each
stockholder of record entitled to vote at such meeting,
whether annual or special, not less than ten (10) nor more
than sixty (60) days before the day on which the meeting is
to be held. A written waiver of notice of any meeting of
stockholders, signed by the person entitled to notice,
whether before or after the time stated therein, shall be
deemed equivalent to notice. Notice of any adjourned meeting
of stockholders shall not be required to be given, except
where expressly required by law.
Section 5. Organization: At each meeting of the
stockholders, the Chairman of the Board, or in his absence,
the Vice Chairman, or in the absence of both officers, an
officer selected by the Chairman of the Board, or if the
Chairman of the Board has made no selection, an officer
selected by the Board, shall act as chairman of the meeting
and the Secretary or, in his absence, an Assistant Secretary,
if one be appointed, shall act as secretary of the meeting.
In case at any meeting none of the officers who have been
designated to act as chairman or secretary of the meeting,
respectively, shall be present, a chairman or secretary of
the meeting, as the case may be, shall be chosen by the vote
of a majority in interest of the stockholders of the
Corporation present in person or by proxy and entitled to
vote at such meeting.
Section 6. Quorum and Conduct of Meetings.
(a) At each meeting of the stockholders, except
where otherwise provided by law, the holders of a
majority of the issued and outstanding shares of each
class of stock of the Corporation entitled to vote at
such meeting shall constitute a quorum for the
transaction of business and a majority in amount of
such quorum shall decide any questions that may come
before the meeting. In the absence of a quorum, a
majority in interest of the stockholders of the
Corporation present in person or by proxy and entitled
to vote, or, if no stockholder entitled to vote is
present, any officer entitled to preside at, or act as
secretary of, such meeting, shall have the power to
adjourn the meeting from time to time until
stockholders holding the requisite amount of stock
shall be present or represented. At any such adjourned
meeting at which a quorum shall be present, any
business may be transacted which might have been
transacted at the meeting as originally called.
(b) The date and time of the opening and the
closing of the polls for each matter upon which the
stockholders will vote at a meeting shall be announced
at the meeting by the chairman of the meeting. The
Board of Directors may adopt by resolution such rules
and regulations for the conduct of the meeting of
stockholders as it shall deem appropriate. Except to
the extent inconsistent with such rules and regulations
as adopted by the Board of Directors, the chairman of
any meeting of stockholders shall have the right and
authority to prescribe such rules, regulations and
procedures and to do all such acts as, in the judgment
of such chairman, are appropriate for the proper
conduct of the meeting. Such rules, regulations or
procedures, whether adopted by the Board of Directors
or prescribed by the chairman of the meeting, may
include, without limitation, the following: (i) the
establishment of an agenda or order of business for the
meeting; (ii) rules and procedures for maintaining
order at the meeting and the safety of those present;
(iii) limitations on attendance at or participation in
the meeting to stockholders of record of the
Corporation, their duly authorized and constituted
proxies or such other persons as the chairman of the
meeting shall determine; (iv) restrictions on entry to
the meeting after the time fixed for the commencement
thereof; and (v) limitations on the time allotted to
questions or comments by participants. Unless and to
the extent determined by the Board of Directors or the
chairman of the meeting, meetings of stockholders shall
not be required to be conducted in accordance with the
rules of parliamentary procedure.
Section 7. Voting.
(a) At each meeting of stockholders every
stockholder of record of the Corporation entitled
to vote at such meeting shall be entitled to one
vote for each share of stock of the Corporation
registered in his name on the books of the
Corporation on the record date for such meeting.
Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to
corporate action in writing without a meeting may
authorize another person or persons to act for
him by proxy. Such proxy shall be appointed by
an instrument in writing, subscribed by such
stockholder or by his attorney thereunto
authorized and delivered to the secretary of the
meeting, or shall otherwise be executed and
transmitted as may be permissible under
applicable law; provided, however, that no proxy
shall be voted on after three years from its date
unless said proxy provides for a longer period.
At all meetings of the stockholders, all matters
(except where other provision is made by statute,
by the Certificate of Incorporation or by these
By-laws) shall be decided by the vote of a
majority of the stock present in person or by
proxy and entitled to vote at the meeting. At
each meeting of stockholders for the election of
Directors, the voting for Directors need not be
by ballot unless the chairman of the meeting or
the holders, present in person or by proxy, of a
majority of the stock of the Corporation entitled
to vote at such meeting shall so determine.
(b) The date and time of the opening and the
closing of the polls for each matter upon which
the stockholders will vote at a meeting shall be
announced at the meeting. No ballot, proxies or
votes, nor any revocations thereof or changes
thereto, shall be accepted by the inspectors
after the closing of the polls unless a proper
court upon application by a stockholder shall
determine otherwise.
(c) The Corporation shall, in advance of any
meeting of stockholders, appoint one or more
inspectors to act at the meeting and make a
written report thereof. The Corporation may
designate one or more persons as alternate
inspectors to replace any inspector who fails to
act. If no inspector or alternate is able to act
at a meeting of stockholders, the person
presiding at the meeting shall appoint one or
more inspectors to act at the meeting. Each
inspector, before entering upon the discharge of
his or her duties, shall take and sign an oath
faithfully to execute the duties of inspector
with strict impartiality and according to the
best of his or her ability.
(d) The inspectors shall (i) ascertain the number
of shares outstanding and the voting power of
each, (ii) determine the shares represented at a
meeting and the validity of proxies and ballots,
(iii) count all votes and ballots, (iv) determine
and retain for a reasonable period a record of
the disposition of any challenges made to any
determination by the inspectors, (v) certify
their determination of the number of shares
represented at the meeting and their count of all
votes and ballots, and (vi) perform such other
duties as may be required by law or designated by
the Secretary of the Corporation. In performing
their duties, the inspectors of election shall
follow applicable law and the instructions of the
Secretary.
Section 8. List of Stockholders: It shall be the duty
of the Secretary or other officer of the Corporation who
shall have charge of its stock ledger, either directly or
through another officer of the Corporation designated by him
or through a transfer agent or transfer clerk appointed by
the Board of Directors, to prepare and make, at least ten
(10) days before every meeting of the stockholders, a
complete list of the stockholders entitled to vote thereat,
arranged in alphabetical order and showing the address of
each stockholder and the number of shares registered in the
name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours, for said ten
(10) days, either at a place within the city where the
meeting is to be held, which place shall be specified in the
notice of meeting, or, if not so specified, at the place
where said meeting is to be held. The list shall be produced
and kept at the time and place of said meeting during the
whole time thereof and subject to the inspection of any
stockholder who shall be present thereat. The original or
duplicate stock ledger shall be the only evidence as to who
are the stockholders entitled to examine the stock ledger,
such list or the books of the Corporation, or to vote in
person or by proxy at such meeting.
Section 9. Stockholder Action: Any action required or
permitted to be taken by the stockholders of the Corporation
must be effected at a duly called annual or special meeting
of such holders and may not be effected by any consent in
writing by such holders.
ARTICLE II.
Board of Directors
Section 1. General Power: The property, business and
affairs of the Corporation shall be managed by or under the
direction of the Board of Directors.
Section 2. Number and Terms: Except as otherwise
fixed pursuant to the provisions of Article FOURTH of the
Certificate of Incorporation relating to the rights of the
holders of any class or series of stock having a preference
over the Common Stock as to dividends or upon liquidation to
elect additional directors under specified circumstances, the
number of the directors of the Corporation shall be fixed
from time to time by majority vote of the entire Board of
Directors. The directors, other than those who may be
elected by the holders of any class or series of stock having
preference over the Common Stock as to dividends or upon
liquidation, shall be classified, with respect to the time
for which they severally hold office, into three classes, as
nearly equal in number as possible, as determined by the
Board of Directors, one class to be originally elected for a
term expiring at the annual meeting of stockholders to be
held in 1986, another class to be originally elected for a
term expiring at the annual meeting of stockholders to be
held in 1987, and another class to be originally elected for
a term expiring at the annual meeting of stockholders to be
held in 1988, with the members of each class to hold office
until their successors are elected and qualified. At each
annual meeting of the stockholders of the Corporation, the
successors of the class of directors whose term expires at
that meeting shall be elected to hold office for a term
expiring at the annual meeting of stockholders held in the
third year following the year of their election.
Section 3. Qualifications of Directors: No one shall
be eligible to serve as a member of the Board of Directors
after the first annual meeting of shareholders following his
or her seventieth birthday, or, in the case of anyone who has
at any time served as an executive of this Corporation, after
the first annual meeting of shareholders following his or her
sixty-fifth birthday or the date on which he or she retires
under the Corporation's retirement plan, whichever occurs
first. Every person who is elected a director of this
Corporation at the 1989 annual meeting of shareholders of
this Corporation or thereafter shall at the time of his or
her election to the Board, and at all times during his or her
tenure as a director, own, directly or beneficially
(beneficial ownership to be determined in accordance with the
Securities Exchange Act of 1934), at least one thousand
shares of the common stock of this Corporation.
Section 4. Nominations: Subject to the rights of any
class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation to elect directors
under specified circumstances, nominations for the election
of directors may be made by the Board of Directors or a
committee appointed by the Board of Directors or by any
stockholder entitled to vote in the election of directors
generally. However, any stockholder entitled to vote in the
election of directors generally may nominate one or more
persons for election as director at a meeting only if written
notice of such stockholder's intent to make such nomination
or nominations has been given, either by personal delivery or
by United States mail, postage prepaid, to the Secretary of
the Corporation not later than (i) with respect to an
election to be held at an annual meeting of stockholders, 90
days in advance of such meeting, and (ii) with respect to an
election to be held at a special meeting of stockholders for
the election of directors, the close of business on the tenth
day following the date on which notice of such meeting is
first given to stockholders. Each such notice shall set
forth: (a) the name and address of the stockholder who
intends to make the nomination and of the person or persons
to be nominated; (b) a representation that the stockholder is
a holder of record of stock of the Corporation entitled to
vote at such meeting and intends to appear in person or by
proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all
arrangements or understandings between stockholder and each
nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations
are to be made by the stockholder; (d) such other information
regarding each nominee proposed by such stockholder as would
be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange
Commission, had the nominee been nominated, or intended to be
nominated, by the Board of Directors; and (e) the consent of
each nominee to serve as a director of the Corporation if so
elected. The chairman of the meeting may refuse to
acknowledge the nomination of any person not made in
compliance with the foregoing procedure.
Section 5. Notice of Stockholder Business: At an
annual meeting of the stockholders, only such business shall
be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual meeting,
business must be (a) specified in the notice of meeting (or
any supplement thereto) given by or at the direction of the
Board of Directors, (b) otherwise properly brought before the
meeting by or at the direction of the Board of Directors, or
(c) otherwise properly brought before the meeting by a
stockholder. For business to be properly brought before an
annual meeting by a stockholder, the stockholder must have
given timely notice thereof in writing to the Secretary of
the Corporation. To be timely, a stockholder's notice must
be delivered to or mailed and received at the principal
executive offices of the Corporation, not less than 90 days
prior to the meeting. A stockholder's notice to the
Secretary shall set forth as to each matter the stockholder
proposes to bring before the annual meeting (a) a brief
description of the business desired to be brought before the
annual meeting and the reasons for conducting such business
at the annual meeting, (b) the name and address, as they
appear on the Corporation's books, of the stockholder
proposing such business, (c) the class and number of shares
of the Corporation which are beneficially owned by the
stockholder, and (d) any material interest of the stockholder
in such business. Notwithstanding anything in the By-laws to
the contrary, no business shall be conducted at an annual
meeting except in accordance with the procedures set forth in
this Section 5. The chairman of an annual meeting shall, if
the facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting and in
accordance with the provisions of this Section 5 and if he
should so determine, he shall so declare to the meeting and
any such business not properly brought before the meeting
shall not be transacted.
Section 6. Election: At each annual meeting of
stockholders, Directors shall, except as otherwise required
or provided by law or by the Certificate of Incorporation, be
elected by a plurality of the votes cast at such meeting by
the holders of stock entitled to vote in the election. Each
Director shall hold office until his successor shall be
elected and qualified, or until his death, or until he shall
resign or shall have been removed in the manner hereinafter
provided, or until he shall cease to qualify.
Section 7. Resignation: Any Director of the
Corporation may resign at any time by giving written notice
to the Corporation. The resignation of any Director shall
take effect at the time specified therein, and, unless
otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 8. Removal of Directors: Any Director may be
removed from office, with cause, by the affirmative vote of
the holders of record of a majority of the combined voting
power of the outstanding shares of Stock entitled to vote
generally in the election of directors, voting together as a
single class and without cause, only by the affirmative vote
of the holders of 80% of the combined voting power of the
then outstanding shares of stock entitled to vote generally
in the election of directors, voting together as a single
class.
Section 9. Newly Created Directorships and Vacancies:
Except as otherwise fixed pursuant to the provisions of
Article FOURTH of the Certificate of Incorporation relating
to the rights of the holders of any class or series of stock
having preference over the Common Stock as to dividends or
upon liquidation to elect additional directors under
specified circumstances, newly created directorships
resulting from any increase in the number of directors and
any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or other cause shall
be filled by the affirmative vote of a majority of the
remaining directors then in office, even though less than a
quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence shall hold office for
the remainder of the full term of the class of directors in
which the new directorship was created or the vacancy
occurred and until such director's successor shall have been
elected and qualified. No decrease in the number of
directors constituting the Board of Directors shall shorten
the term of any incumbent director.
Section 10. First Meeting: After each annual election
of Directors and on the same day, the Board of Directors may
meet for the purpose of organization, the election of
officers and the transaction of other business at the place
where regular meetings of the Board of Directors are held.
Notice of such meeting need not be given. Such meeting may
be held at any other time or place which shall be specified
in a notice given as hereinafter provided for special
meetings of the Board of Directors or in a consent and waiver
of notice thereof signed by all the Directors.
Section 11. Regular Meetings: Regular meetings of the
Board of Directors shall be held at such places and at such
times as may from time to time be fixed by the Board. Notice
of regular meetings need not be given.
Section 12. Special Meetings: Special meetings of the
Board of Directors shall be held at any time upon the call of
the Chairman of the Board or any two of the Directors.
Notice of each such meeting shall be mailed to each Director,
addressed to him at his residence or usual place of business,
at least three days before the day on which the meeting is to
be held, or shall be sent to him by telegraph, cable or
wireless so addressed or shall be delivered personally or by
telephone at least 24 hours before the time the meeting is to
be held. Each notice shall state the time and place of the
meeting but need not state the purposes thereof, except as
otherwise herein expressly provided. Notice of any meeting
of the Board of Directors need not, however, be given to any
Director, if waived by him in writing or by telegraph, cable,
wireless or other form of recorded communication or if he
shall be present at such meeting; and any meeting of the
Board shall be a legal meeting without any notice thereof
having been given if all of the Directors of the Corporation
then in office shall be present thereat.
Members of the Board of Directors, or any committee
designated by such Board, may participate in a meeting of
such Board or committee by means of conference telephone or
similar communications equipment by means of which all
persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this provision shall
constitute presence in person at such meeting.
Section 13. Quorum and Manner of Acting: Except as
otherwise provided by statute or by these By-laws, a majority
of the authorized number of Directors shall be required to
constitute a quorum for the transaction of business at any
meeting, and the affirmative vote of a majority of the
Directors present at the meeting shall be necessary for the
adoption of any resolution or the taking of any other action.
In the absence of a quorum, the Director or Directors present
may adjourn any meeting from time to time until a quorum be
had. Notice of any adjourned meeting need not be given.
Section 14. Written Consent: Any action required or
permitted to be taken at any meeting of the Board of
Directors may be taken without a meeting if all members of
the Board consent thereto in writing and such writing or
writings are filed with the minutes of proceedings of the
Board.
Section 15. Compensation: The Board of Directors
shall have the authority to fix the compensation of Directors
for services in any capacity and to provide that the
Corporation shall reimburse each Director for any expenses
paid to him on account of his attendance at any regular or
special meeting of the Board. Nothing herein contained shall
be construed so as to preclude any Director from serving the
Corporation in any other capacity, or from serving any of its
stockholders, subsidiaries or affiliated corporations in any
capacity and receiving proper compensation therefor.
Section 16. Executive and Other Committees: The Board
of Directors may in its discretion by resolution passed by a
majority of the Directors present at a meeting at which a
quorum is present designate an Executive Committee and one or
more other committees, each consisting of one or more of the
Directors of the Corporation, and each of which, to the
extent provided in the resolution and the laws of the State
of Delaware, shall have and may exercise all the powers and
authority of the Board of Directors in the management of the
business and affairs of the Corporation and may authorize the
seal of the Corporation to be affixed to all papers which may
require it; provided, however, that no such committee shall
have power or authority as to the following matters:
(1) The amendment of the Certificate of Incorporation
of the Corporation (except as provided under the
Delaware General Corporation Law);
(2) The amendment of the By-laws of the Corporation;
(3) Approval or recommending to stockholders any
action which must be submitted to stockholders
for approval under the Delaware General
Corporation Law.
Unless a greater proportion is required by the
resolution designating a committee of the Board of Directors,
a majority of the entire authorized number of members of such
committee shall constitute a quorum for the transaction of
business, and the act of a majority of the members voting on
any item of business, if a quorum votes, shall be the act of
such committee. Any action required, or permitted to be
taken at any meeting of a committee of the Board of
Directors, may be taken without a meeting if all members of
such committee consent thereto in writing and the writing or
writings are filed with the minutes of proceedings of such
committee.
Section 17. Indemnification.
(a) Each person (including, here and
hereinafter, the heirs, executors,
administrators, or estate of such person) (1) who
is or was a Director or officer of the
Corporation, (2) who is or was an agent or
employee of the Corporation other than an officer
and as to whom the Corporation has agreed to
grant such indemnity, or (3) who is or was
serving at the request of the Corporation as its
representative in the position of a director or
officer of another corporation, partnership,
joint venture, trust or other enterprise, shall
be indemnified by the Corporation as of right to
the full extent permitted or authorized by the
General Corporation Law of the State of Delaware
as the same exists or may hereafter be amended
against any fine, liability, cost or expense
asserted against him or incurred by him in his
capacity as such director, officer, agent,
employee, or representative, or arising out of
his status as such director, officer, agent,
employee, or representative. The Corporation may
maintain insurance, at its expense, to protect
itself and any such person against any such fine,
liability, cost or expense, whether or not the
Corporation would have the power to indemnify him
against such liability under the General
Corporation Law of the State of Delaware.
(b) The right to indemnification
conferred in this Section shall be a contract
right and shall include the right to be paid by
the Corporation the expenses incurred in
connection with any matter covered by paragraph
(a) of this Section 17 in advance of its final
disposition (hereinafter an "advance payment of
expenses"). If the Delaware General Corporation
Law requires, however, an advance payment of
expenses incurred by an indemnitee in his or her
capacity as a director or officer shall be made
only upon delivery to the Corporation of an
undertaking, by or on behalf of such indemnitee,
to repay all amounts so advanced if it shall
ultimately be determined by final judicial
decision that such indemnitee is not entitled to
be indemnified for such expenses. Such expenses
incurred by other employees, agents, or
representatives, or by directors or officers who
become the subject of a lawsuit by reason of
actions other than in their capacity as a
director or officer, may be so paid upon such
terms and conditions as the Board of Directors
deems appropriate.
(c) If a request for indemnification is
not paid in full within sixty days, or if a
request for advance payment of expenses is not
paid in full within twenty days, after receipt by
the Corporation of the written request, the
indemnitee may at any time thereafter, prior to
such payment, bring suit against the Corporation
to recover the unpaid amount of the claim. If
successful in whole or in part in such suit, the
indemnitee shall be entitled also to recover from
the Corporation the expenses reasonably incurred
in prosecuting the claim. Neither the failure of
the Board of Directors, legal counsel, or the
stockholders of the Corporation to make a
determination that the indemnitee is entitled to
indemnification, nor a determination by any of
them that the indemnitee is not entitled to
indemnification, for whatever reason, shall
create a presumption in such a suit that the
indemnitee has not met the applicable standard of
conduct, nor shall it be a defense to such suit.
In any such suit the burden of establishing that
the indemnitee is not entitled to indemnification
or an advance payment of expenses shall be on the
Corporation.
(d) The rights to indemnification and
advance payment of expenses hereunder shall be in
addition to any other right which any director,
officer, employee, agent, or representative may
have under any statute, provision of the
Certificate of Incorporation, By-law, agreement,
vote of stockholders or directors, or otherwise.
ARTICLE III.
Officers
Section 1. Officers Enumerated: The Board of
Directors, as soon as may be practicable after the annual
election of Directors, shall elect a Chairman and Chief
Executive Officer, a Vice Chairman and President, one or more
Vice Presidents (one or more of whom may be designated
Executive Vice President or Senior Vice President), a
Secretary, a Treasurer, and a Controller and from time to
time may elect or appoint such other officers as it may
determine. Any two or more offices may be held by the same
person.
Section 2. Term of Office: Each officer shall hold
office for the term for which he is elected or appointed and
until his successor has been elected or appointed and
qualified or until his death or until he shall resign or
until he shall have been removed in the manner hereinafter
provided.
Section 3. Powers and Duties: The officers of the
Corporation shall each have such powers and authority and
perform such duties in the management of the property and
affairs of the Corporation as from time to time may be
prescribed by the Board of Directors and, to the extent not
so prescribed, they shall each have such powers and authority
and perform such duties in the management of the property and
affairs of the Corporation, subject to the control of the
Board, as generally pertain to their respective offices.
Without limitation of the foregoing:
(a) Chairman and Chief Executive Officer: The
Chairman and Chief Executive Officer shall be the
chief executive officer of the Corporation and
shall preside at all meetings of the Board and of
the Executive Committee of the Board and at all
meetings of stockholders. He shall be a director
of the Corporation. He shall be an ex officio
member of all committees of the Board, except the
Executive Compensation and the Audit Committees.
(b) Vice Chairman and President: The Vice Chairman
and President shall have such powers and
authority and perform such duties in the general
management and operations of the Corporation as
are incident to these offices and as shall be
delegated to him by the Chairman and Chief
Executive Officer or the Board of Directors. He
shall be a director of the Corporation. In the
event of the death, resignation, removal,
disability or absence of the Chairman and Chief
Executive Officer, he shall possess the powers
and perform the duties of such officer.
(c) Vice Presidents: The Board of Directors shall
determine the powers and duties of the respective
Vice Presidents and may, in its discretion, fix
such order of seniority among the respective Vice
Presidents as it may deem advisable.
(d) Secretary: The Secretary shall issue notices of
all meetings of the stockholders and Directors
where notices of such meetings are required by
law or these By-laws and shall keep the minutes
of such meetings. He shall sign such instruments
and attest such documents as require his
signature of attestation and affix the corporate
seal thereto where appropriate.
(e) Treasurer: The Treasurer shall have custody of
all funds and securities of the Corporation and
shall sign all instruments and documents as
require his signature. He shall perform all acts
incident to the position of Treasurer, subject to
the control of the Board of Directors.
(f) Controller: The Controller shall be in charge of
the accounts of the Corporation and he shall have
such powers and perform such duties as may be
assigned to him by the Board of Directors.
(g) General Counsel: The General Counsel shall have
general control of all matters of legal import
concerning the Corporation.
Section 4. Temporary Absence: In case of the
temporary absence or disability of any officer of the
Corporation, except as otherwise provided in these By-laws,
the Chairman of the Board, the President, the Vice Chairman,
any Vice President, the Secretary or the Treasurer may
perform any of the duties of any such other officer as the
Board of Directors or Executive Committee may prescribe.
Section 5. Resignations: Any officer may resign at
any time by giving written notice of his resignation to the
Corporation. Any such resignation shall take effect at the
time specified therein; and, unless otherwise specified
therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 6. Removal: Any officer may be removed,
either with or without cause, at any time by action of the
Board of Directors.
Section 7. Vacancies: A vacancy in any office because
of death, resignation, removal or any other cause may be
filled by the Board of Directors.
Section 8. Compensation: The salaries of the officers
shall be fixed from time to time by the Board of Directors.
Nothing contained herein shall preclude any officer from
serving the Corporation in any other capacity, including that
of director, or from serving any of its stockholders,
subsidiaries or affiliated corporations in any capacity and
receiving a proper compensation therefor.
Section 9. Contracts, Checks, etc.: All contracts and
agreements authorized by the Board of Directors, and all
checks, drafts, bills of exchange or other orders for the
payment of money, notes or other evidences of indebtedness,
issued in the name of the Corporation, shall be signed by
such person or persons and in such manner as may from time to
time be designated by the Board of Directors, which
designation may be general or confined to specific instances.
Section 10. Proxies in Respect of Securities of Other
Corporations: Unless otherwise provided by resolution
adopted by the Board of Directors, the Chairman of the Board,
the President and Chief Executive Officer, the Vice Chairman,
a Vice President, or the Secretary or an Assistant Secretary
or the Treasurer or an Assistant Treasurer, or any one of
them, may exercise or appoint an attorney or attorneys, or an
agent or agents, to exercise in the name and on behalf of the
Corporation the powers and rights which the Corporation may
have as the holder of stock or other securities in any other
corporation to vote or to consent in respect of such stock or
other securities; and the Chairman of the Board, the
President and Chief Executive Officer, the Vice Chairman, a
Vice President, or the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer may instruct the
person or persons so appointed as to the manner of exercising
such powers and rights and the Chairman of the Board, the
President and Chief Executive Officer, the Vice Chairman, a
Vice President, or the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer may execute or cause
to be executed in the name and on behalf of the Corporation
and under its corporate seal, or otherwise, all such ballots,
consents, proxies, powers of attorney or other written
instruments as they or either of them may deem necessary in
order that the Corporation may exercise such powers and
rights. Any stock or other securities in any other
corporation which may from time to time be owned by or stand
in the name of the Corporation may, without further action,
be endorsed for sale or transfer or sold or transferred by
the Chairman of the Board, the President and Chief Executive
Officer, the Vice Chairman, or a Vice President, or the
Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer of the Corporation or any proxy appointed
in writing by any of them.
ARTICLE IV.
Shares and Their Transfer
Section 1. Certificates of Stock: Every stockholder
shall be entitled to have a certificate certifying the number
of shares of stock of the Corporation owned by him signed by,
or in the name of, the Corporation by the Chairman of the
Board, or the President and Chief Executive Officer, the Vice
Chairman, or a Vice President and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant
Secretary of the Corporation. Any of or all of the
signatures on the certificate may be a facsimile. In case
any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if he were such
officer, transfer agent or registrar.
Section 2. Transfers: Certificates shall be
registered for transfer on the stock books of the Corporation
in person or by attorney, but, except as hereinafter provided
in the case of loss, destruction or mutilation of
certificates, no transfer of stock shall be entered until the
previous certificate, if any, given for the same shall have
been surrendered and canceled.
Section 3. Lost, Destroyed or Mutilated Certificates:
The Corporation may issue a new certificate of stock of the
same tenor and same number of shares in place of a
certificate theretofore issued by it which is alleged to have
been lost, stolen or destroyed; provided, however, the Board
of Directors or the Executive Committee or the Secretary of
the Corporation may require the owner of the lost, stolen or
destroyed certificate, or his legal representative, to give
the Corporation a bond of indemnity, in form and with one or
more sureties satisfactory to the Board or the Executive
Committee, sufficient to indemnify it against any claim that
may be made against the Corporation on account of the alleged
loss, theft or destruction of any such certificate or the
issuance of such new certificate.
Section 4. Record Date: The Board of Directors may
fix a record date, which record date shall not precede the
date upon which the resolution fixing the record date is
adopted by the board of directors, and which shall not be
more than sixty (60) nor less than ten (10) days before the
date of such meeting, nor more than sixty (60) days prior to
any other action, as a record date for the determination of
the stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other
distribution or allotment of any rights or entitled to
exercise any rights with respect to any change, conversion or
exchange of stock or for the purpose of any other lawful
action. If no record date is fixed, (a) the record date for
determining stockholders entitled to notice of or to vote at
a meeting of stockholders shall be at the close of business
on the day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the day
next preceding the day upon which the meeting is held, and
(b) the date for determining stockholders for any other
purpose shall be at the close of business on the day on which
the Board of Directors adopts the resolution relating
thereto. A determination of stockholders of record entitled
to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 5. Books and Records: The books and records
of the Corporation may be kept at such places within or without the
State of Delaware as the Board of Directors may from time to
time determine.
ARTICLE V.
Seal
The Board of Directors shall provide a corporate seal,
which shall be in the form of a circle and shall bear the
name of the Corporation, the year in which the Corporation
was incorporated (1971) and the words "Corporate Seal -
Delaware" and such other words or figures as the Board of
Directors may approve and adopt.
ARTICLE VI.
Amendments
Except as otherwise provided by these By-laws, the
Certificate of Incorporation, or by operation of law, the By-
laws of the Corporation may be made, altered or repealed by
vote of the stockholders at any annual or special meeting of
stockholders called for that purpose or by the affirmative
vote of a majority of the directors then in office given at
any regular or special meeting of the Board of Directors.
GANNETT CO., INC.
1987 DEFERRED COMPENSATION PLAN
Amendment No. 5
The Gannett Co., Inc., 1987 Deferred
Compensation Plan (the "Plan") is hereby amended as
follows, effective as of June 23, 1997:
1. Subsection 2.9(d) is amended by deleting
the current provision in its entirety and
substituting in its place the following:
(d) In the event of a Participant's death or
disability before the Participant has
received all of his or her Deferred
Compensation Accounts, the value of the
Accounts shall be paid to the
Participant's designated beneficiary, in
the case of death, or to the Participant,
in the case of disability, at such time
and in such form of payment as is set
forth on the applicable designation form
signed by the Participant, or as the
Committee determines, in its sole
discretion.
Beneficiary designations shall be
submitted on the form specified by the
Company. If a Participant so chooses, a
separate beneficiary designation may be
made for each Deferred Compensation
Account. The filing of a new beneficiary
designation shall automatically revoke
any previous beneficiary designation. In
the event a beneficiary designation has
not been made, or the beneficiary was not
properly designated (in the sole
discretion of the Company), has died or
cannot be found, all payments after death
shall be paid to the Participant's
estate. In case of disputes over the
proper beneficiary, the Company reserves
the right to make any or all payments to
the Participant's estate.
2. Article 2 is amended by adding to the end
thereof the following new Section 2.11:
2.11 Company Contributions
The Company may, in its sole discretion,
make direct cash contributions to the
accounts or subaccounts on behalf of any
eligible Participant. The amount and
timing of such contributions shall be
subject to the approval of the Executive
Compensation Committee of the Board of
Directors and that Committee may impose
vesting or other requirements on such
accounts.
Except as otherwise provided in
this Section, accounts so established
shall be subject to the same terms,
conditions, and elections as are
applicable to other accounts under the
Plan. The Company shall initially
specify the time and method of payment of
amounts from such accounts and may change
the time and method of payment at any
time, no later than twelve months before
payments are scheduled to begin. The
Company may accelerate payments at any
time. The Company's decisions as to the
time and method of payment need not fall
within the provisions of the Plan
applicable to other deferred compensation
accounts, but shall be subject to the
approval of the Executive Compensation
Committee.
This Amendment was approved by the Executive
Compensation Committee of the Board of Directors of
the Corporation on August 18, 1997.
GANNETT CO., INC.
1978 EXECUTIVE LONG TERM INCENTIVE PLAN
AMENDMENT NO. 8
Section 2.6 of the 1978 Executive Long
Term Incentive Plan is hereby amended to provide as
follows:
2.6 Death of Optionee
Upon the death of the optionee, any
rights to the extent exercisable on the date
of death may be exercised by the optionee's
estate, or by a person who acquires the right
to exercise such Option by bequest or
inheritance or by reason of the death of the
optionee, provided that such exercise occurs
within both the remaining effective Term of
the Option and one year after the optionee's
death. The Committee, in its discretion, may
extend the exercise period to up to three
years following the death of the optionee,
provided that no such extension shall extend
the Term of any Option beyond the maximum
term applicable to such Option.
This Amendment was approved by the Executive
Compensation Committee of the Board of Directors of
the Corporation on August 18, 1997.
CALCULATION OF EARNINGS PER SHARE
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Thirteen weeks ended Thirty-nine weeks ended
Sept. 28, 1997 Sept. 29, 1996 Sept. 28, 1997 Sept. 29, 1996
--------- --------- --------- ---------
Income from continuing operations $ 152,460 $ 111,210 $ 482,257 $ 334,897
Income from discontinued operations
Discontinued operations, net of tax 8,861 24,540
Gain from sale of discontinued operations,
net of tax 294,580 294,580
--------- --------- --------- ---------
Net Income $ 152,460 $ 414,651 $ 482,257 $ 654,017
========= ========= ========= =========
Weighted average number of
common shares outstanding 283,597 281,888 283,227 281,646
========= ========= ========= =========
Income per share from continuing operations $0.54 $0.39 $1.70 $1.18
Income per share from discontinued operations
Discontinued operations, net of tax 0.03 0.09
Gain from sale of discontinued operations,
net of tax 1.05 1.05
----- ----- ----- -----
Net income per share $0.54 $1.47 $1.70 $2.32
===== ===== ===== =====
NOTE: All common share amounts have been adjusted to reflect the two-for-one stock split
effective on October 6, 1997.
5
1,000
9-MOS
DEC-28-1997
DEC-30-1996
SEP-28-1997
44,155
1,969
570,160
17,310
93,826
772,677
3,578,270
1,565,100
6,398,938
694,065
0
324,421
0
0
2,958,816
6,398,938
3,410,674
3,410,674
1,744,586
2,507,633
7,665
0
73,819
821,557
339,300
482,257
0
0
0
482,257
1.70
0
