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
June 30, 2002 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.)
7950 Jones Branch Drive, McLean, VA 22107
(Address of principal executive offices) (Zip Code)
(703) 854-6000
(Registrant's telephone number, including area code)
Former address: n/a
(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 June 30, 2002, was 266,841,350.
- 1 -
PART I. FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
OPERATING SUMMARY
Earnings per diluted share were $1.13 for the second quarter of 2002 versus
$1.08 per share on a comparable basis for the second quarter of 2001, a 5%
increase, despite continued challenging operating conditions. For the
year-to-date, earnings per diluted share were $2.04 versus $1.93 per share
on a comparable basis.
At the beginning of 2002, the company adopted Statement of Financial Accounting
Standards (SFAS) No. 142 ("Statement"), which changed the accounting rules for
goodwill and intangible assets. The previously reported diluted earnings per
share of 88 cents for the second quarter of 2001 reflected 20 cents per share
for goodwill amortization expense, net of tax, that would not have been required
had the new Statement been in effect. Similarly, the previously reported
earnings per share of $1.53 for the first six months of 2001 reflected 40 cents
for goodwill amortization expense, net of tax. Note 2 to the Condensed
Consolidated Financial Statements provides additional information on the impact
of this new Statement.
Operating revenues were $1.62 billion for the second quarter, which was a slight
decline of $2.9 million or less than 1%. For the first six months, operating
revenues declined $53.3 million or 2%. Operating income on a comparable basis
for the second quarter was even, and decreased $22.8 million or 2% for the
year-to-date. Newspaper publishing earnings were slightly lower for the
quarter, down $6.0 million or 1%, and decreased $37.1 million or 5% for the
year-to-date. Lower newspaper earnings resulted from a decline in advertising
revenues, most notably national advertising and domestic classified
employment, although the rate of decline for many U.S. newspapers narrowed in
the second quarter of 2002. These revenue declines were partially offset by
cost controls and significantly lower newsprint expense. Television earnings,
on a comparable basis, were up $6.9 million or 8% for the quarter and
$14.9 million or 10% for the year-to-date, benefiting from solid automotive
and better than expected political advertising in the second quarter and Winter
Olympics-related advertising in the first quarter.
Net income increased $15.0 million or 5% in the second quarter and $33.1
million or 6% for the year-to-date, on a comparable basis, reflecting the
operating factors mentioned above and significantly lower interest expense.
NEWSPAPERS
Reported newspaper publishing revenues declined $15.5 million or 1% for the
quarter and $77.5 million or 3% for the year-to-date. Newspaper advertising
revenues decreased $12.0 million or 1% for the quarter and $63.1 million or 3%
for the year-to-date, reflecting generally soft domestic advertising demand.
Refer to Note 6 of the Condensed Consolidated Financial Statements for Business
Segment Information.
- 2 -
The tables below provide, on a pro forma basis, details of newspaper ad revenue
for the second quarter and the first six months of 2002 and 2001. Advertising
linage and preprint distribution details are also provided below; however,
linage and preprint distribution for U.K. publications are not included. This
pro forma presentation reflects operating revenue results as if all properties
owned at the end of the second quarter of 2002 were owned throughout all periods
presented. These tables and related commentary also include the company's pro
rata portion of revenue and linage data for its newspapers participating in
joint operating agencies.
Advertising revenue, in thousands of dollars (pro forma)
Second Quarter 2002 2001 % Change
----------- ----------- --------
Local $ 461,764 $ 462,885 (0)
National 180,918 189,186 (4)
Classified 451,459 453,200 (0)
----------- ----------- -----
Total ad revenue $ 1,094,141 $ 1,105,271 (1)
=========== =========== =====
Advertising linage, in thousands of inches, and preprint distribution,
in millions (pro forma)
Second Quarter 2002 2001 % Change
----------- ----------- --------
Local 9,717 9,894 (2)
National 1,017 1,036 (2)
Classified 14,813 13,857 7
----------- ----------- --------
Total Run-of-Press
linage 25,547 24,787 3
=========== =========== ========
Preprint distribution 2,553 2,449 4
=========== =========== ========
Advertising revenue, in thousands of dollars (pro forma)
Year-to-date 2002 2001 % Change
----------- ----------- --------
Local $ 889,155 $ 896,446 (1)
National 347,970 364,612 (5)
Classified 870,509 910,484 (4)
----------- ----------- -----
Total ad revenue $ 2,107,634 $ 2,171,542 (3)
=========== =========== =====
Advertising linage, in thousands of inches, and preprint distribution,
in millions (pro forma)
Year-to-date 2002 2001 % Change
----------- ----------- --------
Local 18,767 19,024 (1)
National 1,936 1,942 (0)
Classified 28,145 26,995 4
----------- ----------- --------
Total Run-of-Press
linage 48,848 47,961 2
=========== =========== ========
Preprint distribution 5,028 4,885 3
=========== =========== ========
- 3 -
Pro forma newspaper advertising revenues decreased 1% for the quarter and 3% for
the year-to-date. Local ad revenues were flat on a 2% decrease in volume for
the quarter and decreased 1% on a 1% decline in volume for the year-to-date.
National ad revenues decreased 4% for the quarter on a volume decrease of 2%,
while year-to-date revenues were down by 5% with volume nearly even with last
year. Classified ad revenues were flat for the quarter on a volume increase of
7% and down 4% on volume increase of 4% for the year-to-date. Newspaper ad
revenue results reflect a continuing challenging domestic advertising
environment, particularly in the employment category. The company's
U.K. operations also experienced softer employment advertising in the second
quarter of 2002; however, overall classified results for U.K. properties
continue to be stronger than domestic results for both the second quarter and
year-to-date. USA TODAY advertising revenues declined 9% for the quarter and
the year-to-date primarily reflecting the continued diminished demand for
financial, technology and travel-related advertising.
Reported newspaper circulation revenues decreased $923,000 or less than 1%
for the quarter, with year-to-date revenues down $3.2 million or less than 1%.
Pro forma newspaper circulation revenues increased less than 1% for the quarter
and decreased less than 1% for the year-to-date. Pro forma net paid daily
circulation for the company's newspapers, excluding USA TODAY, declined 1%
for the second quarter and the year-to-date, while Sunday circulation was down
less than 1% for both the quarter and the year-to-date. USA TODAY reported
an average daily paid circulation of 2,211,370 in the ABC Publisher's Statement
for the 26 weeks ended March 31, 2002, a 3% decrease over the comparable period
a year ago.
Operating costs for the newspaper segment declined $9.6 million or 1% for the
quarter and $40.3 million or 2% for the year-to-date (on a comparable
accounting basis for goodwill and intangible assets - SFAS 142), largely due
to lower newsprint expense and cost controls, partially offset by increased
pension and other employee benefit expenses. Reported newsprint expense
decreased by 24% for the quarter and 21% for the year-to-date as a result of
significantly lower prices. Newsprint consumption increased 1% for the quarter
and decreased 1% for the year-to-date. Newsprint prices for the remainder of
2002 are expected to be significantly lower on average than in 2001.
Cost savings related to recent employee count reductions will be realized but
offset by increased pension and other employee benefit expenses.
Excluding the positive impact of SFAS 142, newspaper operating income declined
$6.0 million or 1% for the quarter and $37.1 million or 5% for the year-to-date,
reflecting lower advertising revenues partially offset by strong cost controls
and significantly lower newsprint expense. The impact of SFAS No. 142 on the
newspaper segment was to improve operating income by $47.0 million and $94.1
million for the second quarter and year-to-date, respectively.
- 4 -
TELEVISION
Reported television revenues increased $12.6 million or 7% for the second
quarter and $24.2 million or 7% for the year-to-date. Television revenues
benefited from strong automotive and better than expected political advertising
in the second quarter and Winter Olympics-related advertising in the first
quarter. National advertising revenues increased 12% for the quarter and 10%
for the year-to-date, while local advertising revenues increased 4% and 6% for
the quarter and year-to-date, respectively. Operating costs increased $5.7
million or 6% on a comparable basis for the quarter and $9.2 million or 5% for
the year-to-date, reflecting increased selling, pension and other employee
benefit costs. Excluding the positive impact of SFAS No. 142, television
operating income increased by $6.9 million or 8% for the quarter and $14.9
million or 10% for the year-to-date. The impact of SFAS 142 on the television
segment was to improve operating income by $10.6 million and $21.0 million for
the quarter and year-to-date, respectively.
Political advertising is expected to be strong in the second half of 2002, and
overall television earnings for that period, on a comparable accounting basis,
are expected to be above prior year levels.
NON-OPERATING INCOME AND EXPENSE/PROVISION FOR INCOME TAXES
Interest expense was $41.1 million in the second quarter of 2002 versus $61.7
million in the second quarter of 2001 due to significantly lower interest rates
and lower debt levels. Interest expense for the first six months of 2002 was
$69.9 million compared to $142.2 million for the same period in 2001. The daily
average commercial paper balance outstanding was $2.79 billion during the second
quarter of 2002 and $5.31 billion during the second quarter of 2001. The daily
average commercial paper balance outstanding was $3.66 billion during the first
half of 2002 and $5.36 billion during the first half of 2001. The weighted
average interest rates on commercial paper were 1.82% for the second quarter of
2002 and 4.43% for the second quarter of 2001. For the first six months of 2002
and 2001, the weighted average interest rates on commercial paper were 1.82% and
5.16%, respectively.
In March 2002, the company issued $1.8 billion aggregate principal amount of
unsecured global notes. These notes consist of $600 million aggregate
principal amount of 4.95% notes due 2005, $700 million aggregate principal
amount of 5.50% notes due 2007 and $500 million aggregate principal amount of
6.375% notes due 2012. The net proceeds of the offering were used to pay down
commercial paper borrowings. The company's average borrowing rates are
expected to be higher for the remainder of 2002 over the first half average
due to the fixed rate notes. However, overall interest expense for the third
quarter of 2002 is expected to be below prior year levels because of the
favorable spread in commercial paper borrowing rates and lower debt levels.
The company's effective income tax rate was 34.4% for the second quarter and
first half of 2002 versus the reported rate of 39.4% for the same periods
last year. The reduction in the effective rate is primarily a result of the
adoption of SFAS No. 142. On a comparable basis, the effective tax rate for
the second quarter and first half of 2001 would have been 34.8%.
- 5 -
NET INCOME
Net income, on a comparable basis, increased $15.0 million or 5% for
the quarter, and diluted earnings per share increased to $1.13 from $1.08, also
a 5% increase. For the first six months, net income, on a comparable basis,
increased $33.1 million or 6%, while diluted earnings per share increased 6%
to $2.04 from $1.93. The 2001 earnings used in these comparisons includes a
positive adjustment of $0.20 and $0.40 per diluted share for the quarter and the
year-to-date, respectively, for goodwill amortization expense, net of tax,
that would not have been required had SFAS No. 142 been in effect that year.
The weighted average number of diluted shares outstanding for the second quarter
of 2002 totaled 269,473,000, compared to 266,754,000 for the second quarter of
2001. For the first six months of 2002 and 2001, the weighted average number of
diluted shares outstanding totaled 269,013,000 and 266,585,000, respectively.
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, increased less than 1% to $559.4
million for the second quarter of 2002, compared with $556.9 million for the
same period of 2001. The company's consolidated operating cash flow for the
first six months of 2002 and 2001 was $1.02 billion and $1.04 billion,
respectively, a 2% decrease. The operating cash flow results reflect lower
newspaper advertising revenues, partially offset by reduced newspaper expenses
and an increase in television segment advertising revenues and earnings.
The company's consolidated after-tax cash flow (defined as after-tax income plus
depreciation and amortization) increased $15.1 million or 4% for the quarter and
$26.7 million or 4% for the year-to-date, reflecting the operating factors
discussed above, along with significantly lower interest expense.
Working capital declined from the end of the year by $209.5 million, reflecting
lower receivables due to seasonal trends in revenues, lower inventories
due to lower newsprint prices, the pay-down of long-term debt with cash and
marketable securities, and higher current tax liabilities.
Capital expenditures totaled $66.8 million for the second quarter of 2002,
compared to $82.3 million for the second quarter of 2001. For the first six
months of 2002 and 2001, capital expenditures were $124.6 million and $146.4
million, respectively.
In March 2002, as discussed above, the company issued $1.8 billion aggregate
principal amount of unsecured global notes in an underwritten public offering.
The net proceeds of the offering were used to repay outstanding commercial paper
obligations. In total, the company's long term debt decreased by $350.5 million
during the second quarter of 2002 and $581.0 million during the first six months
of 2002, reflecting the pay-down of commercial paper borrowings from operating
cash flows.
- 6 -
Also in March 2002, the company entered into a $2.775 billion revolving credit
agreement providing for up to $1.41 billion in 364-day revolving credit loans
and up to $1.365 billion in 5-year revolving credit loans. The company
terminated its $3.0 billion revolving credit agreement, and its $1.53 billion
revolving credit facility which was due to expire in July 2002. At June 30,
2002, the Company had $4.3 billion of credit available under two revolving
credit agreements.
Under a shelf registration that became effective with the Securities and
Exchange Commission in April 2002, an additional $2.5 billion of unsecured debt
securities can be issued. Any proceeds from the sale of such securities could be
used for general corporate purposes, including capital expenditures, working
capital, securities repurchase programs, repayment of long term and short term
debt and the financing of future acquisitions. The company may also invest funds
that are not required immediately in short term marketable securities.
The company's foreign currency translation adjustment, included in accumulated
other comprehensive income and reported as part of shareholders' equity, totaled
($49.3 million) at the end of the second quarter versus ($104.9 million) at the
end of 2001, reflecting an overall strengthening of Sterling against the U.S.
dollar since the end of the year 2001. Newsquest's assets and liabilities at
June 30, 2002 were translated from Sterling to U.S. dollars at an exchange rate
of $1.53 versus $1.45 at the end of 2001. Newsquest's financial results were
translated at an average rate of $1.46 for the second quarter of 2002 versus
$1.42 for the second quarter of 2001, and at an average rate of $1.44 for the
first half of both years.
The company's regular quarterly dividend of $0.23 per share was declared in the
second quarter of 2002, totaling $61.4 million and paid on July 1, 2002.
OTHER MATTERS
Refer to Note 2 of the Condensed Consolidated Financial Statements for further
discussion of new accounting standards and their impact on reporting of earnings
beginning in 2002.
CERTAIN FACTORS AFFECTING FORWARD-LOOKING STATEMENTS
Certain statements in the company's 2001 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
that 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) a continued economic downturn in
some or all of the company's principal newspaper or television markets leading
to decreased circulation or local, national or classified 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; (h) rapid technological changes
and frequent new product introductions prevalent in electronic publishing; (i)
an increase in interest rates; (j) a weakening in the Sterling to U.S. dollar
exchange rate; and (k) general economic, political and business conditions.
- 7 -
CONDENSED CONSOLIDATED BALANCE SHEETS
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
June 30, 2002 Dec. 30, 2001
---------------- ---------------
ASSETS
Cash $ 57,204 $ 73,905
Marketable securities 21,505 66,724
Trade receivables, less allowance
(2002 - $40,928; 2001 - $39,138) 770,276 805,746
Inventories 82,406 104,848
Prepaid expenses and other receivables 106,242 126,975
---------------- ---------------
Total current assets 1,037,633 1,178,198
---------------- ---------------
Property, plant and equipment
Cost 4,335,145 4,207,074
Less accumulated depreciation (1,850,326) (1,741,604)
---------------- ---------------
Net property, plant and equipment 2,484,819 2,465,470
---------------- ---------------
Other assets
Goodwill, less amortization 8,696,678 8,578,025
Other intangible assets, less amortization 102,667 106,334
Investments and other assets 734,125 768,074
---------------- ---------------
Total other assets 9,533,470 9,452,433
---------------- ---------------
Total assets $ 13,055,922 $ 13,096,101
================ ===============
LIABILITIES & SHAREHOLDERS' EQUITY
Accounts payable and current portion of film
contracts payable $ 281,964 $ 354,622
Compensation, interest and other accruals 279,461 235,093
Dividend payable 61,642 60,947
Income taxes 412,320 323,481
Deferred income 161,309 153,594
---------------- ---------------
Total current liabilities 1,196,696 1,127,737
---------------- ---------------
Deferred income taxes 478,164 503,397
Long-term debt 4,499,039 5,080,025
Postretirement medical and life insurance liabilities 403,125 409,052
Other long-term liabilities 216,237 239,968
---------------- ---------------
Total liabilities 6,793,261 7,360,179
---------------- ---------------
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
800,000,000; issued, 324,420,732 shares. 324,421 324,421
Additional paid-in capital 234,992 210,256
Retained earnings 8,013,663 7,589,069
Accumulated other comprehensive loss (49,609) (103,287)
---------------- ---------------
Total 8,523,467 8,020,459
---------------- ---------------
Less treasury stock - 57,579,382 shares and
58,623,520 shares respectively, at cost (2,254,011) (2,275,737)
Deferred compensation related to ESOP (6,795) (8,800)
---------------- ---------------
Total shareholders' equity 6,262,661 5,735,922
---------------- ---------------
Total liabilities and shareholders' equity $ 13,055,922 $ 13,096,101
================ ===============
The accompanying notes are an integral part of these condensed consolidated financial statements.
- 8 -
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Thirteen weeks ended % Inc
June 30, 2002 July 1, 2001 (Dec)
------------- ------------ ------
Net Operating Revenues:
Newspaper advertising $ 1,045,938 $ 1,057,899 (1.1)
Newspaper circulation 305,096 306,019 (0.3)
Television 191,299 178,692 7.1
Other 81,963 84,622 (3.1)
------------- ------------- -----
Total 1,624,296 1,627,232 (0.2)
------------- ------------- -----
Operating Expenses:
Cost of sales and operating expenses,
exclusive of depreciation 810,361 824,030 (1.7)
Selling, general and administrative
expenses, exclusive of depreciation 254,534 246,324 3.3
Depreciation 53,362 51,059 4.5
Amortization of intangible assets 1,834 59,457 (96.9)
------------- ------------- -----
Total 1,120,091 1,180,870 (5.1)
------------- ------------- -----
Operating income 504,205 446,362 13.0
------------- ------------- -----
Non-operating income (expense):
Interest expense (41,101) (61,728) (33.4)
Other (81) 528 (115.3)
------------- ------------- -----
Total (41,182) (61,200) (32.7)
------------- ------------- -----
Income before income taxes 463,023 385,162 20.2
Provision for income taxes 159,100 151,700 4.9
------------- ------------- -----
Net income $ 303,923 $ 233,462 30.2
============= ============= =====
Net income per share-basic $1.14 $0.88 29.5
===== ===== ====
Net income per share-diluted $1.13 $0.88 28.4
===== ===== ====
Dividends per share $0.23 $0.22 4.5
===== ===== ====
The accompanying notes are an integral part of these condensed consolidated financial statements.
- 9 -
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Twenty-six weeks ended % Inc
June 30, 2002 July 1, 2001 (Dec)
------------- ------------ ------
Net Operating Revenues:
Newspaper advertising $ 2,015,741 $ 2,078,833 (3.0)
Newspaper circulation 615,808 619,028 (0.5)
Television 358,485 334,305 7.2
Other 158,870 170,014 (6.6)
------------- ------------- -----
Total 3,148,904 3,202,180 (1.7)
------------- ------------- -----
Operating Expenses:
Cost of sales and operating expenses,
exclusive of depreciation 1,628,927 1,663,577 (2.1)
Selling, general and administrative
expenses, exclusive of depreciation 502,865 501,062 0.4
Depreciation 106,731 104,340 2.3
Amortization of intangible assets 3,667 118,800 (96.9)
------------- ------------- -----
Total 2,242,190 2,387,779 (6.1)
------------- ------------- -----
Operating income 906,714 814,401 11.3
------------- ------------- -----
Non-operating income (expense):
Interest expense (69,855) (142,170) (50.9)
Other (2,373) 976 (343.1)
------------- ------------- -----
Total (72,228) (141,194) (48.8)
------------- ------------- -----
Income before income taxes 834,486 673,207 24.0
Provision for income taxes 287,000 265,200 8.2
------------- ------------- -----
Net income $ 547,486 $ 408,007 34.2
============= ============= =====
Net income per share-basic $2.05 $1.54 33.1
===== ===== =====
Net income per share-diluted $2.04 $1.53 33.3
===== ===== =====
Dividends per share $0.46 $0.44 4.5
===== ===== =====
The accompanying notes are an integral part of these condensed consolidated financial statements.
- 10 -
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Twenty-six weeks ended
June 30, 2002 July 1, 2001
-------------- --------------
Cash flows from operating activities
Net income $ 547,486 $ 408,007
Adjustments to reconcile net income to
operating cash flows:
Depreciation 106,731 104,340
Amortization of intangibles 3,667 118,800
Deferred income taxes (25,234) (6,783)
Other, net 62,637 56,876
--------- ---------
Net cash flow from operating activities 695,287 681,240
--------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment (124,565) (146,443)
Payments for acquisitions, net of cash acquired (3,200) (133,041)
Change in other investments 27,996 (8,564)
Proceeds from sale of certain assets 3,616 0
--------- ---------
Net cash used for investing activities (96,153) (288,048)
--------- ---------
Cash flows from financing activities
Payment of long-term debt and debt issuance costs (587,187) (330,664)
Dividends paid (122,198) (116,271)
Proceeds from issuance of common stock 46,720 15,922
--------- ---------
Net cash used for financing activities (662,665) (431,013)
--------- ---------
Effect of currency exchange rate change 1,611 (4,717)
--------- ---------
Net decrease in cash and cash equivalents (61,920) (42,538)
Balance of cash and cash equivalents at
beginning of year 140,629 193,196
--------- ---------
Balance of cash and cash equivalents at
end of second quarter $ 78,709 $ 150,658
========= =========
The accompanying notes are an integral part of these condensed consolidated financial statements.
- 11 -
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2002
1. Basis of Presentation
The accompanying unaudited condensed consolidated 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 the Form 10-K and annual
report to shareholders. The financial statements covering the 13-week and
26-week periods ended June 30, 2002, and the comparative periods of 2001,
reflect all adjustments which, in the opinion of the company, are necessary
for a fair statement of results for the interim periods and reflect all normal
and recurring adjustments which are necessary for a fair presentation of
the company's financial position, results of operations and cash flows
as of the dates and for the periods presented.
2. Accounting Standards
On December 31, 2001, the company adopted Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets", which eliminated the
amortization of goodwill and other intangibles with indefinite useful lives.
The company performed an impairment test of its goodwill and determined that
no impairment of the recorded goodwill existed. SFAS No. 142 requires that
goodwill be tested for impairment at least annually and more frequently if an
event occurs which indicates the goodwill may be impaired. The company will
perform its impairment testing during the fourth quarter on an annual basis.
Goodwill and other intangible assets are as follows:
(in thousands of dollars) June 30, 2002 Dec. 30, 2001
-------------- -------------
Accumulated Accumulated
Cost Amortization Cost Amortization
---------- ------------ ---------- ------------
Amortized intangible assets:
Subscriber lists $ 110,000 $ 7,333 $ 110,000 $ 3,666
Unamortized intangible assets:
Goodwill 9,883,287 1,186,609 9,758,081 1,180,056
---------- ---------- ---------- ----------
Total $9,993,287 $1,193,942 $9,868,081 $1,183,722
========== ========== ========== ==========
As of June 30, 2002, Newspaper goodwill, net of amortization, was $7.2 billion
and Television goodwill, net of amortization, was $1.5 billion. Goodwill and
related amortization increased primarily due to the change in currency rates.
Amortization expense for subscriber lists was $1.8 million in the quarter
ended June 30, 2002. Subscriber lists are amortized on a straight-line basis
over 15 years. For each of the next five years, amortization expense relating
to the identified intangibles is expected to be $7.3 million.
As required by SFAS 142, the results for the second quarter and first 26 weeks
of 2001 have not been restated. A reconciliation of net income for those
periods and a comparison to the comparable periods of 2002, as if SFAS 142
had been adopted at the beginning of 2001, is presented below.
- 12 -
Thirteen weeks ended
(dollars in thousands) June 30, 2002 July 1, 2001
-------------- -------------
Reported net income $303,923 $233,462
Add back: goodwill amortization,
net of tax 55,424
-------- --------
Adjusted net income $303,923 $288,886
======== ========
Basic earnings per share:
Reported net income $1.14 $0.88
Add back: goodwill amortization,
net of tax 0.21
----- -----
Adjusted net income $1.14 $1.09
===== =====
Diluted earnings per share:
Reported net income $1.13 $0.88
Add back: goodwill amortization,
net of tax 0.20
----- -----
Adjusted net income $1.13 $1.08
===== =====
Twenty-six weeks ended
(dollars in thousands) June 30, 2002 July 1, 2001
-------------- -------------
Reported net income $547,486 $408,007
Add back: goodwill amortization,
net of tax 106,334
-------- --------
Adjusted net income $547,486 $514,341
======== ========
Basic earnings per share:
Reported net income $2.05 $1.54
Add back: goodwill amortization,
net of tax 0.40
----- -----
Adjusted net income $2.05 $1.94
===== =====
Diluted earnings per share:
Reported net income $2.04 $1.53
Add back: goodwill amortization,
net of tax 0.40
----- -----
Adjusted net income $2.04 $1.93
===== =====
- 13 -
Also, on the first day of its fiscal year, December 31, 2001, the company
adopted SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets." SFAS No. 144 did not have a material impact on the
company's financial position or results of operations.
In June 2002, SFAS No. 146, "Accounting for Costs Associated with
Exit or Disposal Activities", was issued. This standard is effective
for exit or disposal activities that are initiated after December 31,
2002. The adoption of this standard is not expected to have a material
effect on the company's financial position or results of operations.
3. Long-term debt
In March 2002, the company issued $1.8 billion aggregate principal
amount of unsecured global notes in an underwritten public offering.
These notes consist of $600 million aggregate principal amount of
4.95% notes due 2005, $700 million aggregate principal amount of 5.50%
notes due 2007 and $500 million aggregate principal amount of 6.375%
notes due 2012. The net proceeds of the offering were used to pay-
down commercial paper borrowings. The company also entered into a
$2.775 billion revolving credit agreement in March 2002 which consists
of a $1.41 billion 364-day facility which extends to March 2003 and a
$1.365 billion 5-year facility which extends to March 2007. At the
end of the 364-day period, any borrowings outstanding under the 364-
day credit facility are convertible into a one-year term loan at the
company's option. During the first quarter of 2002, the company
terminated its $3.0 billion revolving credit agreement. The company
also terminated its $1.53 billion 364-day revolving credit facility
which was due to expire in July 2002 and under which any outstanding
borrowings were convertible into a two-year term loan. At December 30,
2001, the company had $6.06 billion of credit available under two
revolving credit agreements. At June 30, 2002, the company had $4.3
billion of credit available under two revolving credit agreements.
Under a shelf registration that became effective with the Securities
and Exchange Commission in April 2002, an additional $2.5 billion of
unsecured debt securities can be issued. Any proceeds from the sale
of such securities could be used for general corporate purposes,
including capital expenditures, working capital, securities repurchase
programs, repayment of long term and short term debt and the financing
of future acquisitions. The company may also invest funds that are
not required immediately in short term marketable securities.
- 14 -
Approximate annual maturities of long-term debt, assuming that the
company had used the $4.3 billion revolving credit agreements to
refinance existing unsecured promissory notes on a long-term basis and
assuming the company's other indebtedness was paid on its scheduled
pay dates, are as follows:
In thousands June 30, 2002
--------------
2003 $ 0
2004 0
2005 1,824,121
2006 14,568
2007 2,060,268
Later years 600,082
--------------
Total $ 4,499,039
==============
4. Comprehensive Income
Comprehensive income for the company includes net income; foreign
currency translation adjustments; and unrealized gains or losses on available-
for-sale securities, as defined under SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities."
Comprehensive income totaled $379.5 million for the second quarter of 2002
and $234.4 million for the second quarter of 2001. Net income totaled
$303.9 million and other comprehensive income totaled $75.6 million in
2002. Net income totaled $233.5 million and other comprehensive income
totaled $0.9 million in 2001.
Comprehensive income totaled $601.2 million for the first half of 2002
and $341.3 million for the first half of 2001. Net income totaled $547.5
million and other comprehensive income totaled $53.7 million in 2002.
Net income totaled $408.0 million and other comprehensive losses totaled
$66.7 million in 2001.
5. Outstanding Shares
The weighted average number of common shares outstanding (basic)
in the second quarter totaled 266,785,000 compared to 264,685,000 for the
second quarter of 2001. The weighted average number of diluted shares
outstanding in the second quarter totaled 269,473,000 compared to
266,754,000 for the second quarter of 2001.
The weighted average number of common shares outstanding (basic)
for the first half of 2002 totaled 266,483,000 compared to 264,576,000
in the first half of 2001. The weighted average number of diluted shares
outstanding for the first half of 2002 totaled 269,013,000 compared to
266,585,000 for the first half of 2001.
- 15 -
6. Business Segment Information
BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Thirteen weeks ended % Inc
June 30, 2002 July 1, 2001 (Dec)
------------- ------------ ------
Net Operating Revenues:
Newspaper publishing $ 1,432,997 $ 1,448,540 (1.1)
Television 191,299 178,692 7.1
------------- ------------ -----
Total $ 1,624,296 $ 1,627,232 (0.2)
============= ============ =====
Operating Income
(net of depreciation and amortization):
Newspaper publishing $ 425,225 $ 384,142 10.7
Television 94,463 77,003 22.7
Corporate (15,483) (14,783) (4.7)
------------- ------------ -----
Total $ 504,205 $ 446,362 13.0
============= ============ =====
Depreciation and Amortization:
Newspaper publishing $ 45,315 $ 91,925 (50.7)
Television 6,331 17,100 (63.0)
Corporate 3,550 1,491 138.1
------------- ------------ -----
Total $ 55,196 $ 110,516 (50.1)
============= ============ =====
Operating Cash Flow (1):
Newspaper publishing $ 470,540 $ 476,067 (1.2)
Television 100,794 94,103 7.1
Corporate (11,933) (13,292) 10.2
------------- ------------ -----
Total $ 559,401 $ 556,878 0.5
============= ============ =====
(1) Operating Cash Flow represents operating income for each of the company's
business segments plus related depreciation and amortization expense.
- 16 -
BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Twenty-six weeks ended % Inc
June 30, 2002 July 1, 2001 (Dec)
------------- ------------ ------
Net Operating Revenues:
Newspaper publishing $ 2,790,419 $ 2,867,875 (2.7)
Television 358,485 334,305 7.2
------------- ------------ -----
Total $ 3,148,904 $ 3,202,180 (1.7)
============= ============ =====
Operating Income
(net of depreciation and amortization):
Newspaper publishing $ 769,928 $ 712,927 8.0
Television 167,232 131,269 27.4
Corporate (30,446) (29,795) (2.2)
------------- ------------ -----
Total $ 906,714 $ 814,401 11.3
============= ============ =====
Depreciation and Amortization:
Newspaper publishing $ 90,550 $ 186,068 (51.3)
Television 12,748 34,083 (62.6)
Corporate 7,100 2,989 137.5
------------- ------------ -----
Total $ 110,398 $ 223,140 (50.5)
============= ============ =====
Operating Cash Flow (1):
Newspaper publishing $ 860,478 $ 898,995 (4.3)
Television 179,980 165,352 8.8
Corporate (23,346) (26,806) 12.9
------------- ------------ -----
Total $ 1,017,112 $ 1,037,541 (2.0)
============= ============ =====
(1) Operating Cash Flow represents operating income for each of the company's
business segments plus related depreciation and amortization expense.
- 17 -
PRO FORMA BUSINESS SEGMENT INFORMATION (1)
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Thirteen weeks ended % Inc
June 30, 2002 July 1, 2001 (Dec)
------------- ------------ ------
Net Operating Revenues:
Newspaper publishing $ 1,432,997 $ 1,448,540 (1.1)
Television 191,299 178,692 7.1
------------- ------------ -----
Total $ 1,624,296 $ 1,627,232 (0.2)
============= ============ =====
Operating Income
(net of depreciation and amortization):
Newspaper publishing $ 425,225 $ 431,179 (1.4)
Television 94,463 87,590 7.8
Corporate (15,483) (14,783) (4.7)
------------- ------------ -----
Total $ 504,205 $ 503,986 0.0
============= ============ =====
Depreciation and Amortization:
Newspaper publishing $ 45,315 $ 44,888 1.0
Television 6,331 6,513 (2.8)
Corporate 3,550 1,491 138.1
------------- ------------ -----
Total $ 55,196 $ 52,892 4.4
============= ============ =====
Operating Cash Flow (2):
Newspaper publishing $ 470,540 $ 476,067 (1.2)
Television 100,794 94,103 7.1
Corporate (11,933) (13,292) 10.2
------------- ------------ -----
Total $ 559,401 $ 556,878 0.5
============= ============ =====
(1) As if Statement of Financial Accounting Standards No. 142 (SFAS No. 142)
had been adopted at the beginning of 2001.
(2) Operating Cash Flow represents operating income for each of the company's
business segments plus related depreciation and amortization expense.
- 18 -
PRO FORMA BUSINESS SEGMENT INFORMATION (1)
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Twenty-six weeks ended % Inc
June 30, 2002 July 1, 2001 (Dec)
------------- ------------ ------
Net Operating Revenues:
Newspaper publishing $ 2,790,419 $ 2,867,875 (2.7)
Television 358,485 334,305 7.2
------------- ------------ -----
Total $ 3,148,904 $ 3,202,180 (1.7)
============= ============ =====
Operating Income
(net of depreciation and amortization):
Newspaper publishing $ 769,928 $ 807,035 (4.6)
Television 167,232 152,295 9.8
Corporate (30,446) (29,795) (2.2)
------------- ------------ -----
Total $ 906,714 $ 929,535 (2.5)
============= ============ =====
Depreciation and Amortization:
Newspaper publishing $ 90,550 $ 91,960 (1.5)
Television 12,748 13,057 (2.4)
Corporate 7,100 2,989 137.5
------------- ------------ -----
Total $ 110,398 $ 108,006 2.2
============= ============ =====
Operating Cash Flow (2):
Newspaper publishing $ 860,478 $ 898,995 (4.3)
Television 179,980 165,352 8.8
Corporate (23,346) (26,806) 12.9
------------- ------------ -----
Total $ 1,017,112 $ 1,037,541 (2.0)
============= ============ =====
(1) As if Statement of Financial Accounting Standards No. 142 (SFAS No. 142)
had been adopted at the beginning of 2001.
(2) Operating Cash Flow represents operating income for each of the company's
business segments plus related depreciation and amortization expense.
- 19 -
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The company is not subject to market risk associated with derivative commodity
instruments, as the company is not a party to any such instruments. The
company believes that its market risk from financial instruments, such as
accounts receivable, accounts payable and debt, is not material. The company is
exposed to foreign exchange rate risk primarily due to its operations in the
United Kingdom, which use Sterling as their functional currency, which is
then translated into U.S. dollars.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Securityholders
(a) The Annual Meeting of Shareholders of Gannett Co., Inc.
was held on May 7, 2002.
(b) The following directors were elected at the meeting:
Meredith A. Brokaw Donna E. Shalala
The Board of Directors elected Solomon D. Trujillo to
fill a board vacancy.
The following directors' terms of office continued
after the meeting:
H. Jesse Arnelle James A. Johnson
Douglas H. McCorkindale Stephen P. Munn
Karen Hastie Williams
(c) (i) Two directors were re-elected to the Board of Directors.
Tabulation of votes for each of the nominees is as follows:
For Withhold Authority
Meredith A. Brokaw 218,772,088 1,613,877
Donna E. Shalala 217,543,137 2,842,828
(ii) The proposal to elect PricewaterhouseCoopers LLP as the
company's independent auditor was approved. Tabulation of
votes for the proposal is as follows.
For Against Abstain
Election of
independent auditors 212,322,912 6,913,806 1,149,247
(iii) The shareholder proposal concerning EEO policy and
American Indians was defeated. Tabulation of votes for
the proposal is as follows:
For Against Abstain
Shareholder proposal 12,574,338 182,131,109 4,538,615
- 20 -
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
See Exhibit Index for list of exhibits filed with this
report.
(b) 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: August 7, 2002 By: /s/George R. Gavagan
------------------------------
George R. Gavagan
Vice President and Controller
Dated: August 7, 2002 By: /s/Thomas L. Chapple
------------------------------
Thomas L. Chapple
Senior Vice President, General
Counsel and Secretary
- 21 -
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. Amendment
dated May 2, 2000, incorporated by
reference to Gannett Co., Inc.'s Form
10-Q for the fiscal quarter ended
March 26, 2000.
3-2 By-laws of Gannett Co., Inc. Attached.
(reflects all amendments
through July 23, 2002)
4-1 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.
4-2 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.
4-3 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.
4-4 Rights Plan. Incorporated by reference to
Exhibit 1 to Gannett Co., Inc.'s
Form 8-K filed on May 23, 1990.
Amendment incorporated by reference
to Gannett Co., Inc.'s Form 8-K
filed on May 2, 2000.
4-5 $3,000,000,000 Competitive Incorporated by reference to Exhibit
Advance and Revolving Credit 4-10 to Gannett Co., Inc.'s Form 10-Q
Agreement among Gannett Co., filed on August 9, 2000.
Inc. and the Banks named
therein.
4-6 Amendment Number One to Incorporated by reference to Exhibit
$3,000,000,000 Competitive 4-11 to Gannett Co., Inc.'s Form 10-K
Advance and Revolving Credit for the fiscal year ended December 31,
Agreement among Gannett Co., 2000.
Inc. and the Banks named
therein.
- 22 -
4-7 Amendment Number Two Incorporated by reference to
to $3,000,000,000 Competitive Exhibit 4-12 to Gannett Co., Inc.'s
Advance and Revolving Credit Form 10-Q for the quarter ended
Agreement among Gannett Co., July 1, 2001.
Inc. and the Banks named
therein.
4-8 Form of 4.950% Note due Incorporated by reference to Exhibit
2005. 4.13 to Gannett Co., Inc.'s Form 8-K
filed on March 14, 2002.
4-9 Form of 5.500% Note due 2007. Incorporated by reference to Exhibit
4.14 to Gannett Co., Inc.'s Form 8-K
filed on March 14, 2002.
4-10 Form of 6.375% Note due 2012. Incorporated by reference to Exhibit
4.15 to Gannett Co., Inc.'s Form 8-K
filed on March 14, 2002.
4-11 Third Supplemental Indenture, Incorporated by reference to Exhibit
dated as of March 14, 2002, 4.16 to Gannett Co., Inc.'s Form 8-K
between Gannett Co., Inc. and filed on March 14, 2002.
Wells Fargo Bank Minnesota, N.A.,
as Trustee.
4-12 Competitive Advance and Incorporated by reference
Revolving Credit Agreement to Exhibit 10.11 to Gannett
dated as of March 11, 2002 Co., Inc.'s Form 8-K filed on
among Gannett Co., Inc., the March 14, 2002.
several lenders from time to
time parties thereto,
Bank of America, N.A., as
Administrative Agent, JP Morgan
Chase Bank and Bank One NA, as
Co-Syndication Agents, and
Barclays Bank PLC, as
Documentation Agent.
- 23 -
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. Amendment No. 9
incorporated by reference to Exhibit
10-3 to Gannett Co., Inc.'s Form 10-Q
for the quarter ended June 27, 1999.
Amendment No. 10 incorporated by
reference to Exhibit 10-3 to Gannett
Co., Inc's Form 10-Q for the quarter
ended June 25, 2000. Amendment No. 11
incorporated by reference to
Exhibit 10-3 to Gannett Co., Inc.'s
Form 10-K for the fiscal year ended
December 31, 2000.
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.* 10-5 to Gannett Co., Inc.'s Form 10-K
for the fiscal year ended
December 26, 1999. Amendments No. 1
and 2 incorporated by reference to
Exhibit 10-5 to Gannett Co., Inc.'s
Form 10-K for the fiscal year ended
December 30, 2001.
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.
- 24 -
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. Amendment No. 2 to January 1,
1997 Restatement incorporated by
reference to Exhibit 10-7 to
Gannett Co., Inc.'s Form 10-Q for the
quarter ended June 27, 1999.
Amendments Nos. 3 and 4 incorporated
by reference to Exhibit 10-7 to
Gannett Co., Inc.'s Form 10-K for the
fiscal year ended December 31, 2000.
Amendment No. 5 incorporated by
reference to Exhibit 10-7 to Gannett
Co., Inc.'s Form 10-Q for the quarter
ended July 1, 2001.
10-8 Gannett Co., Inc. Transitional Incorporated by reference to Exhibit
Compensation Plan, as amended 10-8 to Gannett Co., Inc.'s Form
and restated October 22, 2001, 10-K for the fiscal year ended
and as further amended on December 30, 2001.
December 4, 2001.*
10-9 Employment Agreement dated Incorporated by reference to Exhibit
January 1, 2001 between 10-9 to Gannett Co., Inc.'s Form 10-K
Gannett Co., Inc. and Douglas for the fiscal year ended December 31,
H. McCorkindale.* 2000.
10-10 Omnibus Incentive Compensation Incorporated by reference to Exhibit
Plan No. 4 to the Company's Registration
Statement on Form S-8 (Registration
No. 333-60402). Amendment No. 1
incorporated by reference to Exhibit
No. 10-10 to Gannett Co., Inc.'s Form
10-K for the fiscal year ended
December 30, 2001.
11 Statement re computation of Attached.
earnings per share.
99-1 Certification Pursuant to 18 Attached.
U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
99-2 Certification Pursuant to 18 Attached.
U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
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.
- 25 -
CALCULATION OF EARNINGS PER SHARE
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Thirteen weeks ended Twenty-six weeks ended
June 30, July 1, June 30, July 1,
2002 2001 2002 2001
------------ ----------- ----------- -----------
Basic earnings:
Net income $ 303,923 $ 233,462 $ 547,486 $ 408,007
Weighted average number of
common shares outstanding 266,785 264,685 266,483 264,576
Basic earnings per share $1.14 $0.88 $2.05 $1.54
Diluted earnings:
Net income $ 303,923 $ 233,462 $ 547,486 $ 408,007
Weighted average number of
common shares outstanding 266,785 264,685 266,483 264,576
Dilutive effect of outstanding
stock options and stock
incentive rights 2,688 2,069 2,530 2,009
Weighted average number of
shares outstanding, as adjusted 269,473 266,754 269,013 266,585
Diluted earnings per share $1.13 $0.88 $2.04 $1.53
[Reflects all amendments through July 23, 2002]
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 available, 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 notice in writing or by electronic transmission 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 which is approved by all the Directors by
consent in writing or by electronic transmission.
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, wireless or electronic transmission 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 electronic
transmission 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 other 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 or Electronic 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 or by electronic
transmission and such writing or writings or electronic transmission or
transmissions are filed with the minutes of proceedings of the Board. Such
filing shall be in paper form if the minutes are maintained in paper form and
shall be in electronic form if the minutes are maintained in electronic form.
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 or by electronic transmission and the writing or
writings or electronic transmission or transmissions are filed with the minutes
of proceedings of such committee. Such filing shall be in paper form if the
minutes are maintained in paper form and shall be in electronic form if the
minutes are maintained in electronic form.
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.
Section 18. Emergency Provisions. Notwithstanding any other provision in the
Corporation's restated certificate of incorporation or Bylaws, this emergency
Bylaw provision shall be operative (i) during any emergency resulting from an
attack on the United States or on a locality in which the Corporation conducts
its business or customarily holds meetings of its Board of Directors or its
stockholders, or (ii) during any nuclear or atomic disaster, or (iii) during the
existence of any catastrophe, or other similar emergency condition, as a result
of which a quorum of the Board of Directors or a standing committee thereof
cannot readily be convened for action, or (iv) during any other condition that
may be provided under relevant provisions of Delaware Law (each condition
described in clauses (i) through (iv) being referred to below as an
"Emergency"). Pursuant to this Section 18, during any Emergency:
(a) A meeting of the Board of Directors or a committee thereof may be called by
any director or officer by any means feasible under the circumstances.
(b) Unless otherwise provided by the Board during an Emergency, notice of any
meeting of the Board of Directors during such an Emergency may be given only to
such of the directors as it may be feasible to reach at the time and by such
means as may be feasible at the time, including publication, television, radio
or any other means.
(c) The officers or other persons designated on a list approved by the board of
directors before the Emergency, all in such order of priority and subject to
such conditions and for such period of time (not longer than reasonably
necessary after the termination of the Emergency) as may be provided in the
resolution approving the list, shall, to the extent required to provide a quorum
at any meeting of the board of directors, be deemed directors for such meeting.
(d) The Board of Directors, either before or during any such Emergency, may
provide, and from time to time modify, lines of succession in the event that
during such Emergency any or all officers or agents of the corporation shall for
any reason be rendered incapable of discharging their duties.
(e) The Board of Directors, either before or during any such Emergency, may,
effective in the Emergency, change the head office or designate several
alternative head offices or regional offices, or authorize the officers so to
do.
(f) No officer, director or employee acting in accordance with this Section,
with any other emergency bylaw provision, or pursuant to DGCL Section 110 or any
successor section, shall be liable except for willful misconduct.
(g) To the extent not inconsistent with this Section 18, the Bylaws of the
Corporation shall remain in effect during any Emergency and upon its termination
these emergency provisions shall cease to be operative.
(h) Nothing contained in this Section 18 shall be deemed exclusive of any other
provisions for emergency powers consistent with this section that have been or
may be adopted by the Board of Directors.
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,
President and Chief Executive Officer, 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, President and Chief Executive Officer: The Chairman, President
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, and he shall be an ex officio member
of all committees of the Board, except the Executive Compensation and the
Audit Committees.
(b) 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.
(c) 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.
(d) 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.
(e) 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.
(f) 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.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Gannett Co., Inc.
("Gannett") on Form 10-Q for the period ending June 30, 2002 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Douglas H. McCorkindale, chairman, president and chief
executive officer of Gannett, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) the Report fully complies with the requirements of
Section 13(a) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents,
in all material respects, the financial condition and results
of operations of Gannett.
/s/Douglas H. McCorkindale
_______________________________
Douglas H. McCorkindale
Chairman, President and
Chief Executive Officer
August 7, 2002
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Gannett Co., Inc.
("Gannett") on Form 10-Q for the period ending June 30, 2002 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Larry F. Miller, executive vice president/operations and
chief financial officer of Gannett, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, that:
(1) the Report fully complies with the requirements of
Section 13(a) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents,
in all material respects, the financial condition and results
of operations of Gannett.
/s/Larry F. Miller
_______________________________
Larry F. Miller
Executive Vice President/Operations
and Chief Financial Officer
August 7, 2002