SEC Filing | TEGNA Inc.

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 March 28, 1999 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 March 28, 1999 was 279,386,406.

PART I. FINANCIAL INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS EARNINGS SUMMARY Operating income for the first quarter of 1999 rose $23.7 million or 8%. Newspaper publishing earnings were up $21.8 million or 10% for the quarter, reflecting continued strong advertising demand, very strong operating results at USA TODAY and USA WEEKEND, and a favorable comparison year-over-year at The Detroit News. Television earnings declined $0.3 million or less than 1% for the quarter primarily due to the absence of advertising related to the broadcast of the Super Bowl on our NBC-affiliated stations and the Winter Olympics on our CBS- affiliated stations, which buoyed results in the first quarter of 1998. Cable and security segment earnings rose $1.4 million or 10%, but comparisons with last year are tempered by the sale in March 1998 of the alarm security business which was previously reported in this segment. Pro forma operating results for each business segment are discussed in the following sections of this report. Non-operating income for the first quarter of 1998 included a net pre-tax gain of $306.5 million ($183.6 million after-tax) primarily from the disposition of the company's five remaining radio stations and its alarm security business. Excluding this gain, net income rose $19.7 million or 12% for the first quarter of 1999 and diluted earnings per share increased 14% to $0.64. A presentation of first quarter earnings excluding the net non-operating gain follows: Earnings Summary Excluding 1998 Net Non-operating Gain --------------------------- Quarter Ended March 28, March 29, % Inc 1999 1998 (Dec) Operating income $311,917 $288,243 8.2 Non-operating income (expense): Interest expense (16,592) (23,229) (28.6) Other 2,368 829 --- ------- ------- ------ Total (14,224) (22,400) (36.5) Income before income taxes 297,693 265,843 12.0 Provision for income taxes 118,800 106,600 11.4 ------- ------- ------ Net income $178,893 $159,243 12.3 ======= ======= ====== Net income per share-basic $0.64 $0.56 14.3 ===== ===== ====== Net income per share-diluted $0.64 $0.56 14.3 ===== ===== ====== NEWSPAPERS Reported newspaper publishing revenues rose $49.6 million or 5% in the first quarter of 1999, which included a $50.6 million or 8% gain in advertising revenues. These revenue increases include the impact of newspaper publishing acquisitions in 1998. The tables below provide, on a pro forma basis, details of newspaper ad revenue and linage and preprint distribution for the first quarter of 1999 and 1998: Advertising revenue, in thousands of dollars (pro forma) First Quarter 1999 1998 % Change ---- ---- -------- Local $214,818 $208,115 3 National 135,565 116,717 16 Classified 266,465 252,844 5 -------- -------- -- Total Run-of-Press 616,848 577,676 7 Preprint and Other advertising 103,703 97,552 6 -------- -------- -- Total Ad Revenue $720,551 $675,228 7 ======== ======== == Advertising linage, in thousands of inches, and preprint distribution, in millions (pro forma) First Quarter 1999 1998 % Change ---- ---- -------- Local 8,133 7,861 3 National 806 670 20 Classified 10,586 9,876 7 ------ ----- -- Total Run-of-Press linage 19,525 18,407 6 ====== ====== == Preprint distribution 1,740 1,675 4 ===== ===== == Pro forma newspaper advertising revenues rose 7% for the quarter. Local ad revenues and volume increased 3%, and national ad revenues rose 16% on a volume increase of 20%. Classified ad revenues increased 5% on a volume increase of 7%. Most of the company's newspapers, including The Detroit News and USA TODAY, recorded solid gains in advertising revenue. Classified gains were strongest in the employment category. Reported newspaper circulation revenues declined less than 1% for the quarter. Pro forma net paid daily circulation for the company's local newspapers declined 1%, while Sunday circulation was lower by 2%. USA TODAY reported an average daily paid circulation of 2,248,813 in the ABC Publisher's statement for the 26 weeks ended March 28, 1999, a 1% increase over the comparable period a year ago. Operating costs for the newspaper segment increased $27.8 million or 4% for the quarter due to higher newsprint expense and generally higher operating costs. In total, newsprint expense increased 3% due to increased newsprint consumption. Newsprint prices were flat compared to the first quarter of 1998. The company expects newsprint prices to be lower for the remainder of the year as compared to 1998. Newspaper operating income increased $21.8 million or 10% for the quarter, reflecting strong advertising gains throughout the group, a favorable comparison year to year at The Detroit News, strong growth at USA TODAY and USA WEEKEND, and the impact of 1998 acquisitions. Early in the second quarter of 1999, the company contributed The San Bernardino County Sun to a partnership that includes 21 daily California newspapers in exchange for a partnership interest. TELEVISION Reported television revenues increased $0.5 million or less than 1% for the quarter. Operating costs increased $0.8 million or 1%. Reported television operating income declined $0.3 million or less than 1%. These results were tempered by the absence of advertising related to the broadcast of the Super Bowl on the company's NBC-affiliated stations and the Winter Olympics on its CBS-affiliated stations, which buoyed results in the first quarter of 1998. Reported results include the impact of WLTX-TV (CBS) in Columbia, South Carolina, which was purchased in late April of 1998. On a pro forma basis, television station revenues declined 1% for the quarter. Pro forma local television ad revenues increased by 2%, while national ad revenues decreased by 6%. In February 1999, the company announced an agreement to exchange KVUE-TV (ABC) in Austin, Texas for KXTV (ABC) in Sacramento/Stockton/Modesto, California, plus other consideration. This transaction is expected to close later in the second quarter and when completed, Gannett Television will consist of 21 television stations reaching 17.3 percent of the U.S. television market. CABLE AND SECURITY Reported operating revenues for the cable and security segment declined $1.9 million or 3% for the quarter while operating income rose $1.4 million or 10%. In early March 1998, the company sold its alarm security business, previously reported with this segment. On a pro forma basis, excluding the 1998 alarm security results, cable revenues rose $6.5 million or 12% and operating income rose $2.0 million or 15%. In late August 1998, the company completed an exchange of its subscribers and certain cable system assets in the suburban Chicago area (93,000 subscribers) for the TCI Communications, Inc. subscribers and certain cable system assets in Kansas (128,000 subscribers). At the end of the first quarter of 1999, the cable television business served 517,000 subscribers in three states or 63% of homes passed. The increases in cable operating revenues and operating income reflect the increased subscriber base from the asset exchange, higher subscription rates and significant increases in advertising and pay-per-view revenues. NON-OPERATING INCOME AND EXPENSE/PROVISION FOR INCOME TAXES Interest expense decreased $6.6 million or 29% for the quarter, reflecting the pay-down of long-term debt from operating cash flow and the proceeds from the sale of certain businesses in 1998. Non-operating income in the first quarter of 1998 included a net pre-tax gain of $306.5 million ($183.6 million after-tax) as discussed in the Earnings Summary above. The company's effective income tax rate was 39.9% for the quarter versus 40.1% for the same quarter last year. NET INCOME Net income, excluding the $183.6 million net non-operating after-tax gain in 1998 discussed above, rose $19.7 million or 12%. Diluted earnings per share, excluding the net non-operating gain, rose to $0.64 from $0.56, an increase of 14%. The weighted average number of diluted shares outstanding totaled 281,677,000 for the first quarter of 1999, compared to 286,874,000 for the first quarter of 1998. In the last half of 1998, the company repurchased approximately six million shares of common stock at a cost of $329 million. These stock repurchases were partially offset by shares issued upon the exercise of stock options and the settlement of stock incentive rights. Exhibit 11 of this Form 10-Q presents the weighted average number of basic and diluted shares outstanding and the earnings per share for each period. 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 $390.8 million for the first quarter of 1999, compared with $367.7 million for the same period of 1998, a 6% increase. Capital expenditures for the quarter totaled $40.9 million, compared to $33.4 million in 1998. The company's long-term debt was reduced by $315.7 million in the quarter from operating cash flow. In February 1999, the company declared a quarterly dividend of $0.20 per share or $55.9 million, which was paid on April 1, 1999. In May 1999, the company also declared a quarterly dividend of $0.20 per share payable on July 1, 1999. YEAR 2000 General The "Year 2000 Issue" is the result of computer programs that were written using two digits rather than four to define the applicable year. If the company's computer programs with date-sensitive functions are not Year 2000 compliant, they may recognize a date using "00" as the Year 1900 rather than the Year 2000. This could result in a system failure or miscalculations causing disruptions of operations, including, among other things, temporary stoppage of newspaper, broadcast and/or cable operations and the inability to process transactions, send invoices or engage in similar normal business activities. Project The company has developed a plan to ensure that all of its key computer systems will be Year 2000 compliant in advance of December 31, 1999. The plan encompasses all operating properties, corporate headquarters and, where necessary, computer applications that directly interface elements of the company's business with business partners, customers, suppliers and service providers. The plan structure includes several phases: inventory, assessment, detailed analysis, implementation/remediation, audit and contingency planning. The first three phases of inventory, assessment and detailed analysis are complete. The implementation/remediation phase is substantially complete. Audit and contingency planning efforts are also underway and are substantially complete, but will continue to be refined and implemented up to the Year 2000. The company has more than 125 business units which generally operate independently and therefore have separate computer systems and various production and administrative equipment with embedded computer systems. Much of the hardware and software used at the business unit level is standardized and supported centrally. For these systems, Year 2000 issues are being addressed by a centrally managed Information Technology Group. Other Year 2000 issues are being addressed by local personnel at the individual business units with guidance where necessary from headquarters staff or consulting specialists. At the end of the first quarter of 1999, the company has achieved Year 2000 compliance in many critical systems areas. The company's business systems (i.e., marketing, sales support, customer billing and accounts receivable, accounting, accounts payable and payroll) at the majority of its local operating properties and at its headquarters are already Year 2000 compliant. This has been achieved through a systematic roll-out of Year 2000 compliant software where it was necessary. By the end of the first quarter of 1999, more than 90% of these business applications were Year 2000 compliant. For those few properties which still operate business systems that are not Year 2000 compliant, the company has already purchased or developed the necessary software and will be installing it during the second and third quarters of 1999 according to plan. For newspaper operations, critical systems also include publishing systems (i.e., front-end editorial and classified, networks, press and mailroom/distribution systems) and other facility/administrative systems. At the end of the first quarter of 1999, more than 90% of such newspaper publishing systems were Year 2000 compliant. The remaining few newspapers are expected to complete installation of publishing systems by the end of the third quarter of 1999. All facility/administrative systems for the newspaper group are Year 2000 compliant. The company's 21 television stations generally use standard purchased software and systems for production and broadcasting. Each station operates these systems independently on separate hardware platforms. Nearly all critical television station systems have been modified or upgraded as necessary for Year 2000 compliance. For the few remaining systems, compliance will be achieved at various points through the third quarter of 1999 when the desired technology becomes available for purchase and installation. For the cable television business, all business applications and other critical systems for production, distribution and administration are now Year 2000 compliant. The company has requested confirmation of compliance from its third party vendors and, in important cases, has or will run tests to verify compliance. Costs The company's efforts to address potential Year 2000 problems began within its central Information Technology Group in 1995 and were broadened to include all departments/operations in 1997. The costs specifically associated with efforts to achieve Year 2000 compliance are expected to be less than $25 million in the aggregate (exclusive of software and hardware that has been or will be replaced or upgraded in the normal course of business), and more than 90% of such costs were incurred and reported through the end of the first quarter of 1999. Year 2000 compliance costs are not material to the company's financial position or to operating results for any of the years involved and compliance efforts have not significantly affected progress of other information technology plans or programs. Risks The business risks the company would face if it were unable to achieve Year 2000 compliance for its critical systems could vary significantly in degree of seriousness, depending on the system and the business unit affected. The company may be unable to publish certain of its newspapers, broadcast from certain of its television stations and/or deliver programming in certain cable markets. If this occurred, it would most likely be due to Year 2000 related failure of the company's utility, telecommunications or content service providers, not from internal company system failure. The company continues to work directly with these vendors to evaluate risk levels. If the company's operations were affected in this manner, revenue losses would result which would not be fully recovered when normal operations resumed. Incremental repair and start up costs might also be incurred. Given the present state of its Year 2000 compliance program and its plans to complete it as described above, the company does not expect that a significant portion of its operations would be adversely impacted, and even if certain operations were so impacted, it would be only for a limited time. Consequently, management does not believe possible disruptions of this nature would have a material effect on the company's financial condition or results of operations. While the company believes its Year 2000 plan will ensure functionality of all key systems, each business unit and corporate headquarters are also preparing contingency plans. CERTAIN FACTORS AFFECTING FORWARD LOOKING STATEMENTS Certain statements in the company's 1998 Annual Report to Shareholders, its Annual Report on Form 10-K, and in this Quarterly Report contain forward-looking information. The words "expect," "intend," "believe," "anticipate," "likely," "will," and similar expressions generally identify forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties which could cause actual results and events to differ materially from those anticipated in the forward-looking statements. Potential risks and uncertainties which could adversely affect the company's ability to obtain these results include, without limitation, the following factors: (a) increased consolidation among major retailers or other events which may adversely affect business operations of major customers and depress the level of local and national advertising; (b) an economic downturn in some or all of the company's principal newspaper or television markets leading to decreased circulation or local or national advertising; (c) a decline in general newspaper readership patterns as a result of competitive alternative media or other factors; (d) an increase in newsprint or syndication programming costs over the levels anticipated; (e) labor disputes which may cause revenue declines or increased labor costs; (f) acquisitions of new businesses or dispositions of existing businesses; (g) a decline in viewership of major networks and local news programming; and (h) rapid technological changes and frequent new product introductions prevalent in electronic publishing; and (i) the uncertainty associated with the impact of Year 2000 issues on the company, its customers, its vendors and others with whom it does business.

CONSOLIDATED BALANCE SHEETS Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars March 28, 1999 Dec. 27, 1998 ---------------- ---------------- ASSETS Cash $ 37,224 $ 60,103 Marketable securities 12 6,084 Trade receivables, less allowance (1999 - $18,003; 1998 - $19,143) 609,438 664,540 Inventories 87,603 87,176 Prepaid expenses and other receivables 71,928 88,482 --------------- --------------- Total current assets 806,205 906,385 --------------- --------------- Property, plant and equipment Cost 3,705,766 3,666,743 Less accumulated depreciation (1,652,178) (1,602,960) --------------- --------------- Net property, plant and equipment 2,053,588 2,063,783 --------------- --------------- Intangible and other assets Excess of acquisition cost over the value of assets acquired, less amortization 3,767,250 3,794,601 Investments and other assets 220,219 214,711 --------------- --------------- Total intangible and other assets 3,987,469 4,009,312 --------------- --------------- Total assets $ 6,847,262 $ 6,979,480 =============== =============== LIABILITIES & SHAREHOLDERS' EQUITY Current maturities of long-term debt $ $ 7,812 Accounts payable and current portion of film contracts payable 250,315 312,283 Compensation, interest and other accruals 211,897 228,222 Dividend payable 55,937 55,790 Income taxes 113,450 6,395 Deferred income 130,220 117,465 --------------- --------------- Total current liabilities 761,819 727,967 --------------- --------------- Deferred income taxes 445,857 442,359 Long-term debt, less current portion 998,954 1,306,859 Postretirement, medical and life insurance liabilities 308,079 308,145 Other long-term liabilities 221,146 214,326 --------------- --------------- Total liabilities 2,735,855 2,999,656 --------------- --------------- 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. 324,421 324,421 Additional paid-in capital 125,460 126,045 Retained earnings 4,898,280 4,775,313 --------------- --------------- Total 5,348,161 5,225,779 --------------- --------------- Less treasury stock - 45,034,326 shares and 45,419,437 shares respectively, at cost (1,215,220) (1,223,077) Deferred compensation related to ESOP (21,534) (22,878) --------------- --------------- Total shareholders' equity 4,111,407 3,979,824 --------------- --------------- Total liabilities and shareholders' equity $ 6,847,262 $ 6,979,480 =============== ===============

CONSOLIDATED STATEMENTS OF INCOME Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars (except per share amounts) Thirteen weeks ended % Inc March 28, 1999 March 29, 1998 (Dec) -------------- -------------- ----- Net Operating Revenues: Newspaper advertising $ 720,551 $ 669,994 7.5 Newspaper circulation 253,357 254,079 (0.3) Television 161,194 160,692 0.3 Cable and Security 62,126 64,062 (3.0) Other 50,837 51,083 (0.5) --------- --------- ----- Total 1,248,065 1,199,910 4.0 Operating Expenses: Cost of sales and operating expenses, exclusive of depreciation 661,354 642,980 2.9 Selling, general and administrative expenses, exclusive of depreciation 195,886 189,206 3.5 Depreciation 51,102 53,030 (3.6) Amortization of intangible assets 27,806 26,451 5.1 --------- --------- ----- Total 936,148 911,667 2.7 --------- --------- ----- Operating income 311,917 288,243 8.2 Non-operating income (expense): Interest expense (16,592) (23,229) (28.6) Other* 2,368 307,356 **** --------- --------- ----- Total (14,224) 284,127 **** Income before income taxes 297,693 572,370 (48.0) Provision for income taxes 118,800 229,520 (48.2) --------- --------- ----- Net income $ 178,893 $ 342,850 (47.8) ========= ========= ===== Net income per share - basic $0.64 $1.21 (47.1) ===== ===== ===== Net income per share - diluted $0.64 $1.20 (46.7) ===== ===== ===== Dividends per share $0.20 $0.19 5.3 ===== ===== ===== * 1998 results include a net non-operating gain principally from the disposition of several businesses including Radio and Alarm Security. See Management's Discussion and Analysis of Operations for earnings summary excluding net non-operating gain.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars Thirteen weeks ended March 28, 1999 March 29, 1998 -------------- -------------- Cash flows from operating activities Net income $ 178,893 $ 342,850 Adjustments to reconcile net income to operating cash flows: Depreciation 51,102 53,030 Amortization of intangibles 27,806 26,451 Deferred income taxes 3,498 56,122 Other, net 119,963 (248,416) --------- --------- Net cash flow from operating activities 381,262 230,037 --------- --------- Cash flows from investing activities Purchase of property, plant and equipment (40,918) (33,446) Payments for acquisitions, net of cash acquired (500) (113,160) Change in other investments (5,666) (101,103) Proceeds from sale of certain assets 2,500 567,556 Collection of long-term receivables 13,873 --------- --------- Net cash (used for) provided by investing activities (44,584) 333,720 --------- --------- Cash flows from financing activities Payments of long-term debt (315,717) (382,605) Dividends paid (55,694) (53,899) Proceeds from issuance of common stock 5,782 11,319 --------- --------- Net cash used for financing activities (365,629) (425,185) --------- --------- Net (decrease) increase in cash and cash equivalents (28,951) 138,572 Balance of cash and cash equivalents at beginning of year 66,187 52,778 --------- --------- Balance of cash and cash equivalents at end of first quarter $ 37,236 $ 191,350 ========= =========

BUSINESS SEGMENT INFORMATION Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars Thirteen weeks ended % Inc March 28, 1999 March 29, 1998 (Dec) -------------- -------------- ----- Operating Revenues: Newspaper publishing $1,024,745 $975,156 5.1 Television 161,194 160,692 0.3 Cable and Security 62,126 64,062 (3.0) ---------- ---------- ----- Total $1,248,065 $1,199,910 4.0 ========== ========== ===== Operating Income (net of depreciation and amortization): Newspaper publishing $247,675 $225,919 9.6 Television 65,717 65,967 (0.4) Cable and Security 15,325 13,916 10.1 Corporate (16,800) (17,559) 4.3 ---------- ---------- ----- Total $311,917 $288,243 8.2 ========== ========== ===== Depreciation and Amortization: Newspaper publishing $47,697 $46,157 3.3 Television 15,708 14,955 5.0 Cable and Security 13,279 16,154 (17.8) Corporate 2,224 2,215 0.4 ---------- ---------- ----- Total $78,908 $79,481 (0.7) ========== ========== ===== Operating Cash Flow: Newspaper publishing $295,372 $272,076 8.6 Television 81,425 80,922 0.6 Cable and Security 28,604 30,070 (4.9) Corporate (14,576) (15,344) 5.0 ---------- ---------- ----- Total $390,825 $367,724 6.3 ========== ========== ===== NOTES: Operating Cash Flow represents operating income for each of the Company's business segments plus related depreciation and amortization expense. In the first quarter of 1998, the Company sold its Alarm Security Business, which had been reported in the Cable and Security business segment. On a pro forma basis for the first quarter, giving effect to the sale of the Alarm Security Business, cable operations reported gains in revenues of 12%, operating income of 15% and operating cash flow of 8%. In late April 1998, the Company purchased a television station in Columbia, South Carolina. On a pro forma basis for the first quarter, giving effect to this purchase, television operations reported a 1% decline in revenues, operating income and operating cash flow.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS March 28, 1999 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-week period ended March 28, 1999, and the comparative period of 1998, reflect all adjustments which, in the opinion of the company, are necessary for a fair statement of results for the interim periods. 2. Accounting Standards In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" was issued. This standard is effective for fiscal periods beginning after June 15, 1999. The adoption of this standard is not expected to have a material effect on the company's results of operations or financial position. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The company is not subject to market risk associated with derivative financial instruments or derivative commodity instruments, as the company is not a party to any such instruments. The company believes that its market risk from other financial instruments, such as accounts receivable, accounts payable and debt, is not material.

PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. See Exhibit Index for list of exhibits filed with this report. (b) Reports on Form 8-K. 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: May 7, 1999 /s/George R. Gavagan ---------------------------------------- George R. Gavagan Vice President and Controller Dated: May 7, 1999 /s/Thomas L. Chapple ---------------------------------------- Thomas L. Chapple Senior Vice President, General Counsel and Secretary

EXHIBIT INDEX Exhibit Number Exhibit Location 3-1 Second Restated Certificate Incorporated by reference to Exhibit of Incorporation of Gannett Co., 3-1 to Gannett Co., Inc.'s Form 10-K Inc. for the fiscal year ended December 26, 1993 ("1993 Form 10-K"). Amendment incorporated by reference to Exhibit 3-1 to the 1993 Form 10-K. 3-2 By-laws of Gannett Co., Inc. Incorporated by reference to Exhibit (reflects all amendments 3-1 to Gannett Co., Inc.'s Form 10-Q through September 24, 1997) for the fiscal quarter ended September 28, 1997. 4-1 $1,000,000,000 Revolving Incorporated by reference to Exhibit Credit Agreement among 4-1 to the 1993 Form 10-K. Gannett Co., Inc. and the Banks named therein. 4-2 Amendment Number One Incorporated by reference to Exhibit to $1,000,000,000 Revolving 4-2 to Gannett Co., Inc.'s Form 10-Q Credit Agreement among for the fiscal quarter ended June 26, Gannett Co., Inc. and the 1994. Banks named therein. 4-3 Amendment Number Two to Incorporated by reference to Exhibit $1,500,000,000 Revolving 4-3 to Gannett Co., Inc.'s Form 10-K Credit Agreement among for the fiscal year ended Gannett Co., Inc. and the December 31, 1995. Banks named therein. 4-4 Amendment Number Three to Incorporated by reference to Exhibit $3,000,000,000 Revolving 4-4 to Gannett Co., Inc.'s Form 10-Q Credit Agreement among for the fiscal quarter ended Gannett Co., Inc. and the Banks September 29, 1996. named therein. 4-5 Indenture dated as of March 1, Incorporated by reference to Exhibit 1983 between Gannett Co., Inc. 4-2 to Gannett Co., Inc.'s Form 10-K and Citibank, N.A., as Trustee. for the fiscal year ended December 29, 1985. 4-6 First Supplemental Indenture Incorporated by reference to Exhibit dated as of November 5, 1986 4 to Gannett Co., Inc.'s Form 8-K among Gannett Co., Inc., filed on November 9, 1986. Citibank, N.A., as Trustee, and Sovran Bank, N.A., as Successor Trustee. 4-7 Second Supplemental Indenture Incorporated by reference to dated as of June 1, 1995, Exhibit 4 to Gannett Co., Inc.'s among Gannett Co., Inc., Form 8-K filed on 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. 4-9 Amendment Number Four to Incorporated by reference to $3,000,000,000 Revolving Exhibit 4-9 to Gannett Co., Inc.'s Credit Agreement among Form 10-Q filed on August 12, 1998. Gannett Co., Inc. and the Banks named therein. 10-1 Employment Agreement dated Incorporated by reference to Gannett December 7, 1992 between Co., Inc.'s Form 10-K for the fiscal Gannett Co., Inc. and John J. year ended December 27, 1992 ("1992 Curley.* Form 10-K"). 10-2 Employment Agreement dated Incorporated by reference to the 1992 December 7, 1992 between Form 10-K. Gannett Co., Inc. and Douglas H. McCorkindale.* 10-3 Gannett Co., Inc. 1978 Incorporated by reference to Exhibit Executive Long-Term Incentive 10-3 to Gannett Co., Inc.'s Form 10-K Plan* for the fiscal year ended December 28, 1980. Amendment No. 1 incorporated by reference to Exhibit 20-1 to Gannett Co., Inc.'s Form 10-K for the fiscal year ended December 27, 1981. Amendment No. 2 incorporated by reference to Exhibit 10-2 to Gannett Co., Inc.'s Form 10-K for the fiscal year ended December 25, 1983. Amendments Nos. 3 and 4 incorporated by reference to Exhibit 4-6 to Gannett Co., Inc.'s Form S-8 Registration Statement No. 33-28413 filed on May 1, 1989. Amendments Nos. 5 and 6 incorporated by reference to Exhibit 10-8 to Gannett Co., Inc.'s Form 10-K for the fiscal year ended December 31, 1989. Amendment No. 7 incorporated by reference to Gannett Co., Inc.'s Form S-8 Registration Statement No. 333-04459 filed on May 24, 1996. Amendment No. 8 incorporated by reference to Exhibit 10-3 to Gannett Co., Inc.'s Form 10-Q for the quarter ended September 28, 1997. Amendment dated December 9, 1997, incorporated by reference to Gannett Co., Inc.'s 1997 Form 10-K. 10-4 Description of supplemental Incorporated by reference to Exhibit insurance benefits.* 10-4 to the 1993 Form 10-K. 10-5 Gannett Co., Inc. Supplemental Incorporated by reference to Exhibit Retirement Plan, as amended.* 10-8 to Gannett Co., Inc.'s Form 10-K for the fiscal year ended December 27, 1986 ("1986 Form 10-K"). 10-6 Gannett Co., Inc. Retirement Incorporated by reference to Exhibit Plan for Directors.* 10-10 to the 1986 Form 10-K. 1991 Amendment incorporated by reference to Exhibit 10-2 to Gannett Co., Inc.'s Form 10-Q for the quarter ended September 29, 1991. Amendment to Gannett Co., Inc. Retirement Plan for Directors dated October 31, 1996, incorporated by reference to Exhibit 10-6 to the 1996 Form 10K. 10-7 Amended and Restated Incorporated by reference to Exhibit Gannett Co., Inc. 1987 10-1 to Gannett Co., Inc.'s Form 10-Q Deferred Compensation Plan.* for the fiscal quarter ended September 29, 1996. Amendment No. 5 incorporated by reference to Exhibit 10-2 to Gannett Co., Inc.'s Form 10-Q for the quarter ended September 28, 1997. 10-8 Gannett Co., Inc. Transitional Incorporated by reference to Exhibit Compensation Plan.* 10-13 to Gannett Co., Inc.'s Form 10-K for the fiscal year ended December 30, 1990. 11 Statement re computation of Attached. earnings per share. 27 Financial Data Schedules. Attached. The Company agrees to furnish to the 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 Company. * Asterisks identify management contracts and compensatory plans or arrangements.

CALCULATION OF EARNINGS PER SHARE Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars (except per share amounts) Thirteen weeks ended ---------------------- March 28, March 29 1999 1998* ------------ ----------- Basic earnings: Net income $178,893 $342,850 Weighted average number of common shares outstanding 279,314 284,215 Basic earnings per share $0.64 $1.21 Diluted earnings: Net income $178,893 $342,850 Weighted average number of common shares outstanding 279,314 284,215 Dilutive effect of out- standing stock options and stock incentive rights 2,363 2,659 Weighted average number of shares outstanding, as adjusted 281,677 286,874 Diluted earnings per share $0.64 $1.20 * 1998 results include a net non-operating gain principally from the disposition of several businesses including Radio and Alarm Security. Se Management's Discussion and Analysis of Operations for earnings summary excluding net non-operating gain.

5 This schedule contains summary financial information extracted from the consolidated balance sheets and statements of income for Gannett Co., Inc. and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS DEC-26-1999 DEC-28-1998 MAR-28-1999 37,224 12 627,441 18,003 87,603 806,205 3,705,766 1,652,178 6,847,262 765,317 0 324,421 0 0 3,786,986 6,847,262 1,248,065 1,248,065 661,354 936,148 (2,368) 0 16,592 297,693 118,800 178,893 0 0 0 178,893 0.64 0.64