|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
16-0442930
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
7950 Jones Branch Drive, McLean, Virginia
|
|
22107-0910
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large Accelerated Filer
|
ý
|
Accelerated Filer
|
¨
|
|
|
|
|
Non-Accelerated Filer
|
¨
|
Smaller Reporting Company
|
¨
|
|
|
Mar. 29, 2015
|
|
Dec. 28, 2014
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
135,681
|
|
|
$
|
118,484
|
|
Trade receivables, less allowance for doubtful accounts (2015 - $18,476; 2014 - $16,498)
|
831,587
|
|
|
912,004
|
|
||
Other receivables
|
67,372
|
|
|
72,763
|
|
||
Inventories
|
41,732
|
|
|
38,861
|
|
||
Deferred income taxes
|
162,449
|
|
|
158,648
|
|
||
Assets held for sale
|
23,477
|
|
|
69,998
|
|
||
Prepaid expenses and other current assets
|
111,170
|
|
|
109,707
|
|
||
Total current assets
|
1,373,468
|
|
|
1,480,465
|
|
||
Property, plant and equipment
|
|
|
|
||||
Cost
|
3,832,280
|
|
|
3,901,869
|
|
||
Less accumulated depreciation
|
(2,276,092
|
)
|
|
(2,292,654
|
)
|
||
Net property, plant and equipment
|
1,556,188
|
|
|
1,609,215
|
|
||
Intangible and other assets
|
|
|
|
||||
Goodwill
|
4,475,941
|
|
|
4,499,927
|
|
||
Indefinite-lived and amortizable intangible assets, less accumulated amortization
|
3,204,871
|
|
|
3,239,593
|
|
||
Deferred income taxes
|
62,085
|
|
|
63,647
|
|
||
Investments and other assets
|
311,907
|
|
|
312,608
|
|
||
Total intangible and other assets
|
8,054,804
|
|
|
8,115,775
|
|
||
Total assets
(a)
|
$
|
10,984,460
|
|
|
$
|
11,205,455
|
|
|
Mar. 29, 2015
|
|
Dec. 28, 2014
|
||||
|
(Unaudited)
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and current portion of film contracts payable
|
$
|
230,553
|
|
|
$
|
281,784
|
|
Accrued expenses
|
509,017
|
|
|
564,628
|
|
||
Dividends payable
|
45,496
|
|
|
45,309
|
|
||
Income taxes
|
24,380
|
|
|
11,267
|
|
||
Deferred income
|
237,484
|
|
|
217,094
|
|
||
Current portion of long-term debt
|
7,854
|
|
|
7,854
|
|
||
Total current liabilities
|
1,054,784
|
|
|
1,127,936
|
|
||
Noncurrent liabilities
|
|
|
|
||||
Income taxes
|
58,612
|
|
|
56,578
|
|
||
Deferred income taxes
|
664,589
|
|
|
650,372
|
|
||
Long-term debt
|
4,351,548
|
|
|
4,488,028
|
|
||
Post-retirement medical and life insurance liabilities
|
94,596
|
|
|
97,648
|
|
||
Pension liabilities
|
907,996
|
|
|
941,715
|
|
||
Other noncurrent liabilities
|
303,851
|
|
|
333,435
|
|
||
Total noncurrent liabilities
|
6,381,192
|
|
|
6,567,776
|
|
||
Total liabilities
(a)
|
7,435,976
|
|
|
7,695,712
|
|
||
|
|
|
|
||||
Redeemable noncontrolling interest
|
12,817
|
|
|
20,470
|
|
||
|
|
|
|
||||
Commitments and contingent liabilities (See Note 13)
|
|
|
|
|
|
||
|
|
|
|
||||
Equity
|
|
|
|
||||
Gannett Co., Inc. shareholders’ equity
|
|
|
|
||||
Preferred stock of $1 par value per share, 2,000,000 shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock of $1 par value per share, 800,000,000 shares authorized, 324,418,632 shares issued
|
324,419
|
|
|
324,419
|
|
||
Additional paid-in capital
|
527,195
|
|
|
546,406
|
|
||
Retained earnings
|
8,669,892
|
|
|
8,602,369
|
|
||
Accumulated other comprehensive loss
|
(781,037
|
)
|
|
(778,769
|
)
|
||
|
8,740,469
|
|
|
8,694,425
|
|
||
Less treasury stock, at cost (2015 - 97,562,146 shares; 2014 - 97,679,541 shares)
|
(5,445,983
|
)
|
|
(5,439,511
|
)
|
||
Total Gannett Co., Inc. shareholders’ equity
|
3,294,486
|
|
|
3,254,914
|
|
||
Noncontrolling interests
|
241,181
|
|
|
234,359
|
|
||
Total equity
|
3,535,667
|
|
|
3,489,273
|
|
||
Total liabilities, redeemable noncontrolling interest and equity
|
$
|
10,984,460
|
|
|
$
|
11,205,455
|
|
|
Thirteen Weeks Ended
|
||||||
|
Mar. 29, 2015
|
|
Mar. 30, 2014
|
||||
|
|
|
|
||||
Operating Revenues
|
$
|
1,472,765
|
|
|
$
|
1,404,066
|
|
|
|
|
|
||||
Operating Expenses:
|
|
|
|
||||
Cost of sales and operating expenses, exclusive of depreciation
|
700,639
|
|
|
767,532
|
|
||
Selling, general and administrative expenses, exclusive of depreciation
|
447,244
|
|
|
355,213
|
|
||
Depreciation
|
49,483
|
|
|
44,764
|
|
||
Amortization of intangible assets
|
32,087
|
|
|
17,743
|
|
||
Facility consolidation and asset impairment charges
|
12,384
|
|
|
14,820
|
|
||
Total
|
1,241,837
|
|
|
1,200,072
|
|
||
Operating income
|
230,928
|
|
|
203,994
|
|
||
|
|
|
|
||||
Non-operating (expense) income:
|
|
|
|
||||
Equity income in unconsolidated investees, net
|
5,058
|
|
|
8,491
|
|
||
Interest expense
|
(70,759
|
)
|
|
(69,648
|
)
|
||
Other non-operating items
|
22,780
|
|
|
(20,748
|
)
|
||
Total
|
(42,921
|
)
|
|
(81,905
|
)
|
||
|
|
|
|
||||
Income before income taxes
|
188,007
|
|
|
122,089
|
|
||
Provision for income taxes
|
60,523
|
|
|
52,500
|
|
||
Net income
|
127,484
|
|
|
69,589
|
|
||
Net income attributable to noncontrolling interests
|
(14,590
|
)
|
|
(10,430
|
)
|
||
Net income attributable to Gannett Co., Inc.
|
$
|
112,894
|
|
|
$
|
59,159
|
|
|
|
|
|
||||
Net income per share – basic
|
$
|
0.50
|
|
|
$
|
0.26
|
|
Net income per share – diluted
|
$
|
0.49
|
|
|
$
|
0.25
|
|
Dividends declared per share
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
Thirteen Weeks Ended
|
||||||
|
Mar. 29, 2015
|
|
Mar. 30, 2014
|
||||
|
|
|
|
||||
Net income
|
$
|
127,484
|
|
|
$
|
69,589
|
|
Redeemable noncontrolling interest (income not available to shareholders)
|
(1,233
|
)
|
|
(455
|
)
|
||
Other comprehensive income (loss), before tax:
|
|
|
|
||||
Foreign currency translation adjustments
|
(32,309
|
)
|
|
4,653
|
|
||
Pension and other post-retirement benefit items:
|
|
|
|
||||
Amortization of prior service credit, net
|
(618
|
)
|
|
(485
|
)
|
||
Amortization of actuarial loss
|
15,695
|
|
|
11,435
|
|
||
Remeasurement of post-retirement benefits liability
|
—
|
|
|
33,907
|
|
||
Other
|
18,539
|
|
|
(6,116
|
)
|
||
Pension and other post-retirement benefit items
|
33,616
|
|
|
38,741
|
|
||
Other
|
—
|
|
|
242
|
|
||
Other comprehensive income, before tax
|
1,307
|
|
|
43,636
|
|
||
Income tax effect related to components of other comprehensive (loss) income
|
(9,141
|
)
|
|
(16,535
|
)
|
||
Other comprehensive (loss) income, net of tax
|
(7,834
|
)
|
|
27,101
|
|
||
Comprehensive income
|
118,417
|
|
|
96,235
|
|
||
Comprehensive income attributable to noncontrolling interests, net of tax
|
(7,791
|
)
|
|
(10,217
|
)
|
||
Comprehensive income attributable to Gannett Co., Inc.
|
$
|
110,626
|
|
|
$
|
86,018
|
|
|
Thirteen Weeks Ended
|
||||||
|
Mar. 29, 2015
|
|
Mar. 30, 2014
|
||||
|
|
|
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
127,484
|
|
|
$
|
69,589
|
|
Adjustments to reconcile net income to net cash flow from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
81,570
|
|
|
62,507
|
|
||
Facility consolidation and asset impairment charges
|
12,384
|
|
|
14,820
|
|
||
Pension contributions, net of pension expense
|
(5,606
|
)
|
|
(20,890
|
)
|
||
Equity income in unconsolidated investees, net
|
(5,058
|
)
|
|
(8,491
|
)
|
||
Stock-based compensation – equity awards
|
9,114
|
|
|
8,901
|
|
||
Change in other assets and liabilities, net
|
(74,424
|
)
|
|
39,566
|
|
||
Net cash flow from operating activities
|
145,464
|
|
|
166,002
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of property, plant and equipment
|
(19,121
|
)
|
|
(21,851
|
)
|
||
Payments for acquisitions, net of cash acquired
|
(8,624
|
)
|
|
(32,598
|
)
|
||
Payments for investments
|
(5,000
|
)
|
|
(1,000
|
)
|
||
Proceeds from investments
|
7,883
|
|
|
5,759
|
|
||
Proceeds from sale of certain assets
|
103,813
|
|
|
44,735
|
|
||
Net cash flow from (used for) investing activities
|
78,951
|
|
|
(4,955
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Payments of borrowings under revolving credit agreements, net
|
(130,000
|
)
|
|
—
|
|
||
Payments of unsecured floating rate term loans
|
(10,025
|
)
|
|
(7,900
|
)
|
||
Payments of unsecured fixed rate notes
|
—
|
|
|
(250,000
|
)
|
||
Dividends paid
|
(45,257
|
)
|
|
(45,369
|
)
|
||
Cost of common shares repurchased
|
(37,520
|
)
|
|
(37,937
|
)
|
||
Proceeds from issuance of common stock upon settlement of stock awards
|
19,049
|
|
|
9,028
|
|
||
Distribution to noncontrolling interests
|
(1,233
|
)
|
|
(877
|
)
|
||
Deferred payments for acquisitions
|
(1,841
|
)
|
|
(4,330
|
)
|
||
Net cash used for financing activities
|
(206,827
|
)
|
|
(337,385
|
)
|
||
Effect of currency exchange rate change on cash
|
(391
|
)
|
|
112
|
|
||
Increase (decrease) in cash and cash equivalents
|
17,197
|
|
|
(176,226
|
)
|
||
Balance of cash and cash equivalents at beginning of period
|
118,484
|
|
|
469,203
|
|
||
Balance of cash and cash equivalents at end of period
|
$
|
135,681
|
|
|
$
|
292,977
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
||||
Cash paid for taxes, net of refunds
|
$
|
17,675
|
|
|
$
|
7,801
|
|
Cash paid for interest
|
$
|
47,981
|
|
|
$
|
49,798
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Assets held for sale proceeds
|
$
|
—
|
|
|
$
|
157,275
|
|
In thousands
|
Mar. 29, 2015
|
|
Dec. 28, 2014
|
||||
|
|
|
|
||||
Current assets
|
$
|
21,247
|
|
|
$
|
20,541
|
|
Plant, property and equipment, net
|
9,832
|
|
|
10,084
|
|
||
Intangible and other assets
|
29,192
|
|
|
29,412
|
|
||
Total assets
|
$
|
60,271
|
|
|
$
|
60,037
|
|
|
|
|
|
||||
Current liabilities
|
$
|
10,586
|
|
|
$
|
11,635
|
|
Noncurrent liabilities
|
23,829
|
|
|
26,028
|
|
||
Total liabilities
|
$
|
34,415
|
|
|
$
|
37,663
|
|
In thousands
|
Mar. 29, 2015
|
|
Dec. 28, 2014
|
||||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Gross
|
|
Accumulated Amortization
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
4,475,941
|
|
|
$
|
—
|
|
|
$
|
4,499,927
|
|
|
$
|
—
|
|
Indefinite-lived intangibles:
|
|
|
|
|
|
|
|
||||||||
Television station FCC licenses
|
1,191,950
|
|
|
—
|
|
|
1,191,950
|
|
|
—
|
|
||||
Mastheads and trade names
|
951,357
|
|
|
—
|
|
|
951,776
|
|
|
—
|
|
||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
||||||||
Customer relationships
|
1,076,158
|
|
|
233,070
|
|
|
1,078,738
|
|
|
212,438
|
|
||||
Other
|
279,053
|
|
|
60,577
|
|
|
282,856
|
|
|
53,289
|
|
In thousands
|
Broadcasting
|
|
Digital
|
|
Publishing
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance at Dec. 28, 2014:
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
2,578,601
|
|
|
$
|
1,488,139
|
|
|
$
|
7,662,543
|
|
|
$
|
11,729,283
|
|
Accumulated impairment losses
|
—
|
|
|
(151,970
|
)
|
|
(7,077,386
|
)
|
|
(7,229,356
|
)
|
||||
Net balance at Dec. 28, 2014
|
2,578,601
|
|
|
1,336,169
|
|
|
585,157
|
|
|
4,499,927
|
|
||||
Activity during the period:
|
|
|
|
|
|
|
|
||||||||
Acquisitions and adjustments
|
516
|
|
|
2,248
|
|
|
—
|
|
|
2,764
|
|
||||
Impairment
|
—
|
|
|
—
|
|
|
(5,940
|
)
|
|
(5,940
|
)
|
||||
Foreign currency exchange rate changes
|
—
|
|
|
(12,425
|
)
|
|
(8,385
|
)
|
|
(20,810
|
)
|
||||
Total
|
516
|
|
|
(10,177
|
)
|
|
(14,325
|
)
|
|
(23,986
|
)
|
||||
Balance at Mar. 29, 2015:
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
2,579,117
|
|
|
1,477,962
|
|
|
7,554,744
|
|
|
11,611,823
|
|
||||
Accumulated impairment losses
|
—
|
|
|
(151,970
|
)
|
|
(6,983,912
|
)
|
|
(7,135,882
|
)
|
||||
Net balance at Mar. 29, 2015
|
$
|
2,579,117
|
|
|
$
|
1,325,992
|
|
|
$
|
570,832
|
|
|
$
|
4,475,941
|
|
In thousands
|
Mar. 29, 2015
|
|
Dec. 28, 2014
|
||||
|
|
|
|
||||
Unsecured floating rate term loan due quarterly through August 2018
|
$
|
115,300
|
|
|
$
|
123,200
|
|
VIE unsecured floating rate term loans due quarterly through December 2018
|
31,254
|
|
|
33,379
|
|
||
Unsecured notes bearing fixed rate interest at 10% due June 2015
|
66,568
|
|
|
66,568
|
|
||
Unsecured notes bearing fixed rate interest at 6.375% due September 2015
|
250,000
|
|
|
250,000
|
|
||
Unsecured notes bearing fixed rate interest at 10% due April 2016
|
193,429
|
|
|
193,429
|
|
||
Borrowings under revolving credit agreement expiring August 2018
|
510,000
|
|
|
640,000
|
|
||
Unsecured notes bearing fixed rate interest at 7.125% due September 2018
|
250,000
|
|
|
250,000
|
|
||
Unsecured notes bearing fixed rate interest at 5.125% due October 2019
|
600,000
|
|
|
600,000
|
|
||
Unsecured notes bearing fixed rate interest at 5.125% due July 2020
|
600,000
|
|
|
600,000
|
|
||
Unsecured notes bearing fixed rate interest at 4.875% due September 2021
|
350,000
|
|
|
350,000
|
|
||
Unsecured notes bearing fixed rate interest at 6.375% due October 2023
|
650,000
|
|
|
650,000
|
|
||
Unsecured notes bearing fixed rate interest at 5.50% due September 2024
|
325,000
|
|
|
325,000
|
|
||
Unsecured notes bearing fixed rate interest at 7.75% due June 2027
|
200,000
|
|
|
200,000
|
|
||
Unsecured notes bearing fixed rate interest at 7.25% due September 2027
|
240,000
|
|
|
240,000
|
|
||
Total principal long-term debt
|
4,381,551
|
|
|
4,521,576
|
|
||
Other (fair market value adjustments and discounts)
|
(22,149
|
)
|
|
(25,694
|
)
|
||
Total long-term debt
|
4,359,402
|
|
|
4,495,882
|
|
||
Less current portion of long-term debt maturities of VIE loans
|
7,854
|
|
|
7,854
|
|
||
Long-term debt, net of current portion
|
$
|
4,351,548
|
|
|
$
|
4,488,028
|
|
In thousands
|
Thirteen Weeks Ended
|
||||||
|
Mar. 29, 2015
|
|
Mar. 30, 2014
|
||||
|
|
|
|
||||
Service cost-benefits earned during the period
|
$
|
1,334
|
|
|
$
|
1,831
|
|
Interest cost on benefit obligation
|
38,327
|
|
|
42,366
|
|
||
Expected return on plan assets
|
(56,069
|
)
|
|
(58,574
|
)
|
||
Amortization of prior service cost
|
1,882
|
|
|
1,882
|
|
||
Amortization of actuarial loss
|
15,295
|
|
|
11,227
|
|
||
Expense (credit) for company-sponsored retirement plans
|
$
|
769
|
|
|
$
|
(1,268
|
)
|
In thousands
|
Thirteen Weeks Ended
|
||||||
|
Mar. 29, 2015
|
|
Mar. 30, 2014
|
||||
|
|
|
|
||||
Service cost-benefits earned during the period
|
$
|
106
|
|
|
$
|
118
|
|
Interest cost on net benefit obligation
|
993
|
|
|
1,485
|
|
||
Amortization of prior service credit
|
(2,500
|
)
|
|
(2,367
|
)
|
||
Amortization of actuarial loss
|
400
|
|
|
208
|
|
||
Net periodic post-retirement benefit credit
|
$
|
(1,001
|
)
|
|
$
|
(556
|
)
|
In thousands
|
Gannett Co., Inc. Shareholders’ Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
||||||
|
|
|
|
|
|
||||||
Balance at Dec. 28, 2014
|
$
|
3,254,914
|
|
|
$
|
234,359
|
|
|
$
|
3,489,273
|
|
Comprehensive income:
|
|
|
|
|
|
||||||
Net income
|
112,894
|
|
|
14,590
|
|
|
127,484
|
|
|||
Redeemable noncontrolling interest (income not available to shareholders)
|
—
|
|
|
(1,233
|
)
|
|
(1,233
|
)
|
|||
Other comprehensive loss
|
(2,268
|
)
|
|
(5,566
|
)
|
|
(7,834
|
)
|
|||
Total comprehensive income
|
110,626
|
|
|
7,791
|
|
|
118,417
|
|
|||
Dividends declared
|
(45,371
|
)
|
|
—
|
|
|
(45,371
|
)
|
|||
Stock-based compensation
|
9,114
|
|
|
—
|
|
|
9,114
|
|
|||
Treasury shares acquired
|
(37,520
|
)
|
|
—
|
|
|
(37,520
|
)
|
|||
Other activity
|
2,723
|
|
|
(969
|
)
|
|
1,754
|
|
|||
Balance at Mar. 29, 2015
|
$
|
3,294,486
|
|
|
$
|
241,181
|
|
|
$
|
3,535,667
|
|
|
|
|
|
|
|
||||||
Balance at Dec. 29, 2013
|
$
|
2,693,098
|
|
|
$
|
201,695
|
|
|
$
|
2,894,793
|
|
Comprehensive income:
|
|
|
|
|
|
||||||
Net income
|
59,159
|
|
|
10,430
|
|
|
69,589
|
|
|||
Redeemable noncontrolling interest (income not available to shareholders)
|
—
|
|
|
(455
|
)
|
|
(455
|
)
|
|||
Other comprehensive income
|
26,859
|
|
|
242
|
|
|
27,101
|
|
|||
Total comprehensive income
|
86,018
|
|
|
10,217
|
|
|
96,235
|
|
|||
Dividends declared
|
(45,234
|
)
|
|
—
|
|
|
(45,234
|
)
|
|||
Stock-based compensation
|
8,901
|
|
|
—
|
|
|
8,901
|
|
|||
Treasury shares acquired
|
(37,937
|
)
|
|
—
|
|
|
(37,937
|
)
|
|||
Other activity
|
9,296
|
|
|
(1,210
|
)
|
|
8,086
|
|
|||
Balance at Mar. 30, 2014
|
$
|
2,714,142
|
|
|
$
|
210,702
|
|
|
$
|
2,924,844
|
|
In thousands
|
Retirement Plans
|
|
Foreign Currency Translation
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
Thirteen Weeks:
|
|
|
|
|
|
||||||
Balance at Dec. 28, 2014
|
$
|
(1,169,882
|
)
|
|
$
|
391,113
|
|
|
$
|
(778,769
|
)
|
Other comprehensive income (loss) before reclassifications
|
14,831
|
|
|
(26,744
|
)
|
|
(11,913
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
9,645
|
|
|
—
|
|
|
9,645
|
|
|||
Other comprehensive income (loss)
|
24,476
|
|
|
(26,744
|
)
|
|
(2,268
|
)
|
|||
Balance at Mar. 29, 2015
|
$
|
(1,145,406
|
)
|
|
$
|
364,369
|
|
|
$
|
(781,037
|
)
|
|
|
|
|
|
|
||||||
Balance at Dec. 29, 2013
|
$
|
(921,232
|
)
|
|
$
|
427,177
|
|
|
$
|
(494,055
|
)
|
Other comprehensive income before reclassifications
|
15,104
|
|
|
4,653
|
|
|
19,757
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
7,102
|
|
|
—
|
|
|
7,102
|
|
|||
Other comprehensive income
|
22,206
|
|
|
4,653
|
|
|
26,859
|
|
|||
Balance at Mar. 30, 2014
|
$
|
(899,026
|
)
|
|
$
|
431,830
|
|
|
$
|
(467,196
|
)
|
In thousands
|
Thirteen Weeks Ended
|
||||||
|
Mar. 29, 2015
|
|
Mar. 30, 2014
|
||||
|
|
|
|
||||
Amortization of prior service credit
|
$
|
(618
|
)
|
|
$
|
(485
|
)
|
Amortization of actuarial loss
|
15,695
|
|
|
11,435
|
|
||
Total reclassifications, before tax
|
15,077
|
|
|
10,950
|
|
||
Income tax effect
|
(5,432
|
)
|
|
(3,848
|
)
|
||
Total reclassifications, net of tax
|
$
|
9,645
|
|
|
$
|
7,102
|
|
In thousands
|
Fair Value Measurements as of Mar. 29, 2015
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Employee compensation related investments
|
$
|
34,901
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34,901
|
|
Sundry investments
|
37,065
|
|
|
—
|
|
|
—
|
|
|
37,065
|
|
||||
Total assets
|
$
|
71,966
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
71,966
|
|
|
|
|
|
|
|
|
|
||||||||
Contingent consideration payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,974
|
|
|
$
|
7,974
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,974
|
|
|
$
|
7,974
|
|
In thousands
|
Fair Value Measurements as of Dec. 28, 2014
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Employee compensation related investments
|
$
|
41,017
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
41,017
|
|
Sundry investments
|
36,641
|
|
|
—
|
|
|
—
|
|
|
36,641
|
|
||||
Total assets
|
$
|
77,658
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
77,658
|
|
|
|
|
|
|
|
|
|
||||||||
Contingent consideration payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,912
|
|
|
$
|
9,912
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,912
|
|
|
$
|
9,912
|
|
In thousands
|
Thirteen Weeks Ended
|
||||||
|
Mar. 29, 2015
|
|
Mar. 30, 2014
|
||||
|
|
|
|
||||
Net Operating Revenues:
|
|
|
|
||||
Broadcasting
|
$
|
396,794
|
|
|
$
|
382,268
|
|
Digital
|
332,699
|
|
|
179,735
|
|
||
Publishing
|
768,188
|
|
|
842,063
|
|
||
Intersegment eliminations
(a)
|
(24,916
|
)
|
|
—
|
|
||
Total
|
$
|
1,472,765
|
|
|
$
|
1,404,066
|
|
|
|
|
|
||||
Operating Income (net of depreciation, amortization and facility consolidation and asset impairment charges):
|
|
|
|
||||
Broadcasting
|
$
|
175,330
|
|
|
$
|
154,549
|
|
Digital
|
56,153
|
|
|
23,824
|
|
||
Publishing
|
18,305
|
|
|
42,988
|
|
||
Corporate
|
(18,860
|
)
|
|
(17,367
|
)
|
||
Total
|
$
|
230,928
|
|
|
$
|
203,994
|
|
|
|
|
|
||||
Depreciation, amortization and facility consolidation and asset impairment charges:
|
|
|
|
||||
Broadcasting
|
$
|
21,261
|
|
|
$
|
27,194
|
|
Digital
|
32,827
|
|
|
8,288
|
|
||
Publishing
|
36,125
|
|
|
36,591
|
|
||
Corporate
|
3,741
|
|
|
5,254
|
|
||
Total
|
$
|
93,954
|
|
|
$
|
77,327
|
|
|
|
|
|
In thousands, except per share data
|
Thirteen Weeks Ended
|
||||||
|
Mar. 29, 2015
|
|
Mar. 30, 2014
|
||||
|
|
|
|
||||
Net income attributable to Gannett Co., Inc.
|
$
|
112,894
|
|
|
$
|
59,159
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding - basic
|
227,089
|
|
|
227,230
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Restricted stock
|
2,267
|
|
|
2,711
|
|
||
Performance share units
|
1,692
|
|
|
1,239
|
|
||
Stock options
|
883
|
|
|
1,088
|
|
||
Weighted average number of common shares outstanding - diluted
|
231,931
|
|
|
232,268
|
|
||
|
|
|
|
||||
Net income per share - basic
|
$
|
0.50
|
|
|
$
|
0.26
|
|
Net income per share - diluted
|
$
|
0.49
|
|
|
$
|
0.25
|
|
In thousands, except per share data
|
First Quarter
|
|||||||||||||||
|
2015
|
|
% of Total
|
|
2014
|
|
% of Total
|
|
Change
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|||||||
Broadcasting
|
$
|
396,794
|
|
|
27
|
%
|
|
$
|
382,268
|
|
|
27
|
%
|
|
4
|
%
|
Digital
|
332,699
|
|
|
23
|
%
|
|
179,735
|
|
|
13
|
%
|
|
85
|
%
|
||
Publishing
|
768,188
|
|
|
52
|
%
|
|
842,063
|
|
|
60
|
%
|
|
(9
|
%)
|
||
Intersegment eliminations
|
(24,916
|
)
|
|
(2
|
%)
|
|
—
|
|
|
—
|
%
|
|
***
|
|
||
Total operating revenues
|
$
|
1,472,765
|
|
|
100
|
%
|
|
$
|
1,404,066
|
|
|
100
|
%
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating expenses
|
$
|
1,241,837
|
|
|
|
|
$
|
1,200,072
|
|
|
|
|
3
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Operating income:
|
|
|
|
|
|
|
|
|
|
|
||||||
Broadcasting
|
$
|
175,330
|
|
|
76
|
%
|
|
$
|
154,549
|
|
|
76
|
%
|
|
13
|
%
|
Digital
|
56,153
|
|
|
24
|
%
|
|
23,824
|
|
|
12
|
%
|
|
***
|
|
||
Publishing
|
18,305
|
|
|
8
|
%
|
|
42,988
|
|
|
21
|
%
|
|
(57
|
%)
|
||
Corporate
|
(18,860
|
)
|
|
(8
|
%)
|
|
(17,367
|
)
|
|
(9
|
%)
|
|
9
|
%
|
||
Total operating income
|
$
|
230,928
|
|
|
100
|
%
|
|
$
|
203,994
|
|
|
100
|
%
|
|
13
|
%
|
Non-operating expense (income)
|
42,921
|
|
|
|
|
81,905
|
|
|
|
|
(48
|
%)
|
||||
Provision for income taxes
|
60,523
|
|
|
|
|
52,500
|
|
|
|
|
15
|
%
|
||||
Net income attributable to noncontrolling interests
|
14,590
|
|
|
|
|
10,430
|
|
|
|
|
40
|
%
|
||||
Net income attributable to Gannett Co., Inc.
|
$
|
112,894
|
|
|
|
|
$
|
59,159
|
|
|
|
|
91
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
$
|
0.50
|
|
|
|
|
$
|
0.26
|
|
|
|
|
92
|
%
|
||
Diluted
|
$
|
0.49
|
|
|
|
|
$
|
0.25
|
|
|
|
|
96
|
%
|
||
Weighted average number of common shares outstanding:
|
||||||||||||||||
Basic
|
227,089
|
|
|
|
|
227,230
|
|
|
|
|
0
|
%
|
||||
Diluted
|
231,931
|
|
|
|
|
232,268
|
|
|
|
|
0
|
%
|
In thousands
|
First Quarter
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Operating revenues
|
$
|
396,794
|
|
|
$
|
382,268
|
|
|
4
|
%
|
Operating expenses:
|
|
|
|
|
|
|||||
Operating expenses, exclusive of depreciation
|
212,912
|
|
|
200,525
|
|
|
6
|
%
|
||
Depreciation
|
13,296
|
|
|
11,697
|
|
|
14
|
%
|
||
Amortization
|
5,598
|
|
|
5,741
|
|
|
(2
|
%)
|
||
Transformation items
|
(10,342
|
)
|
|
9,756
|
|
|
***
|
|
||
Total operating expenses
|
221,464
|
|
|
227,719
|
|
|
(3
|
%)
|
||
Operating income
|
$
|
175,330
|
|
|
$
|
154,549
|
|
|
13
|
%
|
In thousands
|
First Quarter
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Operating revenues
|
$
|
332,699
|
|
|
$
|
179,735
|
|
|
85
|
%
|
Operating expenses:
|
|
|
|
|
|
|||||
Operating expenses, exclusive of depreciation
|
245,893
|
|
|
147,623
|
|
|
67
|
%
|
||
Depreciation
|
7,853
|
|
|
4,553
|
|
|
72
|
%
|
||
Amortization
|
22,800
|
|
|
3,735
|
|
|
***
|
|
||
Total operating expenses
|
276,546
|
|
|
155,911
|
|
|
77
|
%
|
||
Operating income
|
$
|
56,153
|
|
|
$
|
23,824
|
|
|
***
|
|
In thousands
|
First Quarter
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Operating revenues
|
$
|
768,188
|
|
|
$
|
842,063
|
|
|
(9
|
%)
|
Operating expenses:
|
|
|
|
|
|
|||||
Operating expenses, exclusive of depreciation
|
713,758
|
|
|
762,484
|
|
|
(6
|
%)
|
||
Depreciation
|
24,593
|
|
|
23,260
|
|
|
6
|
%
|
||
Amortization
|
3,689
|
|
|
3,787
|
|
|
(3
|
%)
|
||
Facility consolidation and asset impairment charges
|
7,843
|
|
|
9,544
|
|
|
(18
|
%)
|
||
Total operating expenses
|
749,883
|
|
|
799,075
|
|
|
(6
|
%)
|
||
Operating income
|
$
|
18,305
|
|
|
$
|
42,988
|
|
|
(57
|
%)
|
In thousands
|
First Quarter
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Advertising
|
$
|
444,408
|
|
|
$
|
501,300
|
|
|
(11
|
%)
|
Circulation
|
273,234
|
|
|
282,076
|
|
|
(3
|
%)
|
||
All other
|
50,546
|
|
|
58,687
|
|
|
(14
|
%)
|
||
Total Publishing Segment revenues
|
$
|
768,188
|
|
|
$
|
842,063
|
|
|
(9
|
%)
|
In thousands
|
First Quarter
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Retail
|
$
|
229,565
|
|
|
$
|
252,985
|
|
|
(9
|
%)
|
National
|
59,498
|
|
|
83,702
|
|
|
(29
|
%)
|
||
Classified
|
155,345
|
|
|
164,613
|
|
|
(6
|
%)
|
||
Total Publishing Segment advertising revenues
|
$
|
444,408
|
|
|
$
|
501,300
|
|
|
(11
|
%)
|
|
First Quarter
|
|||||||
|
U.S. Publishing
|
|
Newsquest (in pounds)
|
|
Total Publishing Segment
|
|||
|
|
|
|
|
|
|||
Retail
|
(7
|
%)
|
|
(1
|
%)
|
|
(7
|
%)
|
National
|
(20
|
%)
|
|
(1
|
%)
|
|
(19
|
%)
|
Classified:
|
|
|
|
|
|
|||
Automotive
|
(3
|
%)
|
|
(7
|
%)
|
|
(5
|
%)
|
Employment
|
(2
|
%)
|
|
(5
|
%)
|
|
(5
|
%)
|
Real Estate
|
(1
|
%)
|
|
(10
|
%)
|
|
(8
|
%)
|
Legal
|
(7
|
%)
|
|
—
|
%
|
|
(7
|
%)
|
Other
|
(2
|
%)
|
|
(5
|
%)
|
|
(6
|
%)
|
Total Classified
|
(3
|
%)
|
|
(6
|
%)
|
|
(6
|
%)
|
Total Publishing Segment advertising revenues
|
(8
|
%)
|
|
(4
|
%)
|
|
(8
|
%)
|
•
|
Costs associated with workforce restructuring;
|
•
|
Transformation items;
|
•
|
Non-cash asset impairment charge; and
|
•
|
Other non-operating gain related to the sale of Gannett Healthcare Group and charges related to the planned spin-off of our Publishing business.
|
•
|
Costs associated with workforce restructuring;
|
•
|
Transformation costs;
|
•
|
Other non-operating charges; and
|
•
|
A tax charge related to the sale of our interest in KMOV-TV.
|
In thousands, except share data
|
First Quarter
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Operating revenues
|
$
|
1,472,765
|
|
|
$
|
1,404,066
|
|
|
5
|
%
|
Adjusted operating expenses
|
1,229,020
|
|
|
1,177,307
|
|
|
4
|
%
|
||
Adjusted operating income
|
$
|
243,745
|
|
|
$
|
226,759
|
|
|
7
|
%
|
|
|
|
|
|
|
|||||
Adjusted net income attributable to Gannett Co., Inc.
|
$
|
112,765
|
|
|
$
|
108,424
|
|
|
4
|
%
|
Adjusted diluted earnings per share
|
$
|
0.49
|
|
|
$
|
0.47
|
|
|
4
|
%
|
In thousands
|
First Quarter
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Operating expenses (GAAP basis)
|
$
|
1,241,837
|
|
|
$
|
1,200,072
|
|
|
3
|
%
|
Remove special items:
|
|
|
|
|
|
|||||
Workforce restructuring
|
(13,142
|
)
|
|
(3,465
|
)
|
|
***
|
|
||
Transformation items
|
6,265
|
|
|
(19,300
|
)
|
|
***
|
|
||
Asset impairment charges
|
(5,940
|
)
|
|
—
|
|
|
***
|
|
||
As adjusted (non-GAAP basis)
|
$
|
1,229,020
|
|
|
$
|
1,177,307
|
|
|
4
|
%
|
In thousands
|
First Quarter
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Operating income (GAAP basis)
|
$
|
230,928
|
|
|
$
|
203,994
|
|
|
13
|
%
|
Remove special items:
|
|
|
|
|
|
|||||
Workforce restructuring
|
13,142
|
|
|
3,465
|
|
|
***
|
|
||
Transformation items
|
(6,265
|
)
|
|
19,300
|
|
|
***
|
|
||
Asset impairment charges
|
5,940
|
|
|
—
|
|
|
***
|
|
||
As adjusted (non-GAAP basis)
|
$
|
243,745
|
|
|
$
|
226,759
|
|
|
7
|
%
|
In thousands
|
First Quarter
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Net income attributable to Gannett Co., Inc. (GAAP basis)
|
$
|
112,894
|
|
|
$
|
59,159
|
|
|
91
|
%
|
Net income attributable to noncontrolling interests
|
14,590
|
|
|
10,430
|
|
|
40
|
%
|
||
Provision for income taxes
|
60,523
|
|
|
52,500
|
|
|
15
|
%
|
||
Interest expense
|
70,759
|
|
|
69,648
|
|
|
2
|
%
|
||
Equity income in unconsolidated investees, net
|
(5,058
|
)
|
|
(8,491
|
)
|
|
(40
|
%)
|
||
Other non-operating items
|
(22,780
|
)
|
|
20,748
|
|
|
***
|
|
||
Operating income (GAAP basis)
|
230,928
|
|
|
203,994
|
|
|
13
|
%
|
||
Workforce restructuring
|
13,142
|
|
|
3,465
|
|
|
***
|
|
||
Transformation items
|
(6,265
|
)
|
|
19,300
|
|
|
***
|
|
||
Asset impairment charges
|
5,940
|
|
|
—
|
|
|
***
|
|
||
Adjusted operating income (non-GAAP basis)
|
243,745
|
|
|
226,759
|
|
|
7
|
%
|
||
Depreciation
|
49,483
|
|
|
44,764
|
|
|
11
|
%
|
||
Adjusted amortization (non-GAAP basis)
|
32,087
|
|
|
13,263
|
|
|
***
|
|
||
Adjusted EBITDA (non-GAAP basis)
|
$
|
325,315
|
|
|
$
|
284,786
|
|
|
14
|
%
|
In thousands
|
First Quarter
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Broadcasting Segment operating expenses (GAAP basis)
|
$
|
221,464
|
|
|
$
|
227,719
|
|
|
(3
|
%)
|
Remove special items:
|
|
|
|
|
|
|||||
Workforce Restructuring
|
(348
|
)
|
|
—
|
|
|
***
|
|
||
Transformation items
|
10,342
|
|
|
(9,756
|
)
|
|
***
|
|
||
As adjusted (non-GAAP basis)
|
$
|
231,458
|
|
|
$
|
217,963
|
|
|
6
|
%
|
|
|
|
|
|
|
|||||
Broadcasting Segment operating income (GAAP basis)
|
$
|
175,330
|
|
|
$
|
154,549
|
|
|
13
|
%
|
Remove special items:
|
|
|
|
|
|
|||||
Workforce Restructuring
|
348
|
|
|
—
|
|
|
***
|
|
||
Transformation items
|
(10,342
|
)
|
|
9,756
|
|
|
***
|
|
||
As adjusted (non-GAAP basis)
|
$
|
165,336
|
|
|
$
|
164,305
|
|
|
1
|
%
|
In thousands
|
First Quarter
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Digital Segment operating expenses (GAAP basis)
|
$
|
276,546
|
|
|
$
|
155,911
|
|
|
77
|
%
|
Remove special items:
|
|
|
|
|
|
|||||
Workforce Restructuring
|
(849
|
)
|
|
—
|
|
|
***
|
|
||
Transformation items
|
(2,174
|
)
|
|
—
|
|
|
***
|
|
||
As adjusted (non-GAAP basis)
|
$
|
273,523
|
|
|
$
|
155,911
|
|
|
75
|
%
|
|
|
|
|
|
|
|||||
Digital Segment operating income (GAAP basis)
|
$
|
56,153
|
|
|
$
|
23,824
|
|
|
***
|
|
Remove special items:
|
|
|
|
|
|
|||||
Workforce Restructuring
|
849
|
|
|
—
|
|
|
***
|
|
||
Transformation items
|
2,174
|
|
|
—
|
|
|
***
|
|
||
As adjusted (non-GAAP basis)
|
$
|
59,176
|
|
|
$
|
23,824
|
|
|
***
|
|
In thousands
|
First Quarter
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Publishing Segment operating expenses (GAAP basis)
|
$
|
749,883
|
|
|
$
|
799,075
|
|
|
(6
|
%)
|
Remove special items:
|
|
|
|
|
|
|||||
Workforce restructuring
|
(11,945
|
)
|
|
(3,465
|
)
|
|
***
|
|
||
Transformation items
|
(1,903
|
)
|
|
(9,544
|
)
|
|
(80
|
%)
|
||
Asset impairment charges
|
(5,940
|
)
|
|
—
|
|
|
***
|
|
||
As adjusted (non-GAAP basis)
|
$
|
730,095
|
|
|
$
|
786,066
|
|
|
(7
|
%)
|
|
|
|
|
|
|
|||||
Publishing Segment operating income (GAAP basis)
|
$
|
18,305
|
|
|
$
|
42,988
|
|
|
(57
|
%)
|
Remove special items:
|
|
|
|
|
|
|||||
Workforce restructuring
|
11,945
|
|
|
3,465
|
|
|
***
|
|
||
Transformation items
|
1,903
|
|
|
9,544
|
|
|
(80
|
%)
|
||
Asset impairment charges
|
5,940
|
|
|
—
|
|
|
***
|
|
||
As adjusted (non-GAAP basis)
|
$
|
38,093
|
|
|
$
|
55,997
|
|
|
(32
|
%)
|
In thousands
|
First Quarter
|
||||||
|
2015
|
|
2014
|
||||
|
|
|
|
||||
Income before income taxes as reported
|
$
|
188,007
|
|
|
$
|
122,089
|
|
Net income attributable to noncontrolling interests
|
(14,590
|
)
|
|
(10,430
|
)
|
||
Gannett pretax income (GAAP basis)
|
173,417
|
|
|
111,659
|
|
||
Remove special items:
|
|
|
|
||||
Workforce restructuring
|
13,142
|
|
|
3,465
|
|
||
Transformation items
|
(6,265
|
)
|
|
19,300
|
|
||
Asset impairment charges
|
5,940
|
|
|
—
|
|
||
Non-operating items
|
(25,680
|
)
|
|
20,400
|
|
||
As adjusted (non-GAAP basis)
|
$
|
160,554
|
|
|
$
|
154,824
|
|
|
|
|
|
||||
Provision for income taxes as reported (GAAP basis)
|
$
|
60,523
|
|
|
$
|
52,500
|
|
Remove special items:
|
|
|
|
||||
Workforce restructuring
|
4,743
|
|
|
1,200
|
|
||
Transformation items
|
(2,139
|
)
|
|
8,200
|
|
||
Asset impairment charges
|
2,282
|
|
|
—
|
|
||
Non-operating items
|
(17,620
|
)
|
|
8,300
|
|
||
Special tax charge
|
—
|
|
|
(23,800
|
)
|
||
As adjusted (non-GAAP basis)
|
$
|
47,789
|
|
|
$
|
46,400
|
|
|
|
|
|
||||
Effective tax rate (GAAP basis)
|
34.9
|
%
|
|
47.0
|
%
|
||
As adjusted effective tax rate (non-GAAP basis)
|
29.8
|
%
|
|
30.0
|
%
|
•
|
Broadcasting Segment Revenues
- Broadcasting Segment revenues will be impacted by challenging year-over-year comparisons, due to the cyclical absence of record political revenues. These revenues totaled $159 million in 2014 with $132 million generated in the second half of the year. We anticipate Broadcasting Segment revenues in 2015 will benefit from higher retransmission revenues and television digital revenue growth. Based on current trends, we expect the percentage increase in total television revenues for the second quarter of 2015 compared to the same quarter in 2014 to be up in the mid-single digits despite challenging year-over-year comparisons as the second quarter of 2014 benefited from political advertising of $17 million.
|
•
|
Acquisition of remaining 73% interest in Classified Ventures LLC
- On October 1, 2014, we acquired the remaining 73% interest in Classified Ventures, LLC, which owns Cars.com, for $1.8 billion. With respect to the financial impact of consolidating Cars.com and the impact of the new affiliate agreements that went into effect at closing, we expect a substantial increase in Digital Segment Revenues and Adjusted EBITDA in 2015. The Publishing Segment Adjusted EBITDA year-over-year comparison will be unfavorably impacted by approximately $6 million in each of the second and third quarters of 2015, as a result of changes to the Cars.com affiliate agreement.
|
•
|
Sale of Gannett Healthcare Group and shutdown of USA Weekend
- On December 29, 2014, we sold Gannett Healthcare Group to OnCourse Learning, an online education and training provider. Late in the fourth quarter of 2014, we also shutdown USA Weekend. Publishing Segment revenue comparisons between 2015 and 2014 will be impacted by the absence of approximately $65 million for these two businesses.
|
•
|
Foreign Currency
- Our U.K. publishing operations are conducted through our Newsquest subsidiary. Newsquest earnings are translated at the average British pound-to-U.S. dollar exchange rate. Therefore, a strengthening in that exchange rate will improve Newsquest revenue and earnings contributions to consolidated results. A weakening of that exchange rate (i.e., a stronger U.S. dollar) will have a negative impact. Results for the first quarter of 2015 were translated from the British pound to U.S. dollars at an average rate of 1.52 compared to 1.65 in the first quarter last year. This 8% decline in the exchange rate unfavorably impacted first quarter 2015 revenue comparisons by approximately $10 million and diluted net income per share of approximately $0.01.
|
In thousands
|
First Quarter
|
||||||
|
2015
|
|
2014
|
||||
|
|
|
|
||||
Net cash flow from operating activities
|
$
|
145,464
|
|
|
$
|
166,002
|
|
Purchase of property, plant and equipment
|
(19,121
|
)
|
|
(21,851
|
)
|
||
Payments for investments
|
(5,000
|
)
|
|
(1,000
|
)
|
||
Proceeds from investments
|
7,883
|
|
|
5,759
|
|
||
Free cash flow
|
$
|
129,226
|
|
|
$
|
148,910
|
|
Period
|
|
(a) Total Number of Shares Purchased
|
|
(b) Average Price Paid per Share
|
|
(c) Total Number of Shares Purchased as Part of Publicly Announced Program
|
|
(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
|
||||||
|
|
|
|
|
|
|
|
|
||||||
12/29/14 – 2/1/15
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
148,931,803
|
|
2/2/15 – 3/1/15
|
|
407,000
|
|
|
$
|
34.27
|
|
|
407,000
|
|
|
$
|
134,983,800
|
|
3/2/15 – 3/29/015
|
|
663,000
|
|
|
$
|
35.55
|
|
|
663,000
|
|
|
$
|
111,411,466
|
|
Total First Quarter 2015
|
|
1,070,000
|
|
|
$
|
35.07
|
|
|
1,070,000
|
|
|
$
|
111,411,466
|
|
Date: May 6, 2015
|
GANNETT CO., INC.
|
|
|
|
/s/ Victoria D. Harker
|
|
Victoria D. Harker
|
|
Chief Financial Officer
|
|
(on behalf of Registrant and as Principal Financial Officer)
|
Exhibit
Number
|
|
Exhibit
|
|
Location
|
|
|
|
|
|
3-1
|
|
Third Restated Certificate of Incorporation of Gannett Co., Inc.
|
|
Incorporated by reference to Exhibit 3.1 to Gannett Co., Inc.’s Form 10-Q for the fiscal quarter ended April 1, 2007.
|
|
|
|
|
|
3-1-1
|
|
Amendment to Third Restated Certificate of Incorporation
|
|
Incorporated by reference to Exhibit 3.1 to Gannett Co., Inc.’s Form 8-K dated April 29, 2015 and filed on May 1, 2015.
|
|
|
|
|
|
3-2
|
|
Amended by-laws of Gannett Co., Inc.
|
|
Incorporated by reference to Exhibit 3.2 to Gannett Co., Inc.’s Form 8-K dated July 29, 2014 and filed on August 1, 2014.
|
|
|
|
|
|
4-1
|
|
Specimen Certificate for Gannett Co., Inc.’s common stock, par value $1.00 per share.
|
|
Incorporated by reference to Exhibit 2 to Gannett Co., Inc.’s Form 8-B filed on June 14, 1972.
|
|
|
|
|
|
10-1
|
|
Seventh Amendment, dated as of February 13, 2015, to the Competitive Advance and Revolving Credit Agreement, dated as of December 13, 2004 and effective as of January 5, 2005, as amended and restated as of August 5, 2013 and as further amended by the Sixth Amendment thereto, dated as of September 24, 2013, among Gannett Co., Inc., JPMorgan Chase Bank, N.A., as administrative agent, and the several banks and other financial institutions from time to time parties thereto.
|
|
Attached.
|
|
|
|
|
|
10-2
|
|
Amendment Number 1 to 2001 Omnibus Incentive Compensation Plan (Amended and Restated as of May 4, 2010)*
|
|
Incorporated by reference to Exhibit 10-1 to Gannett Co., Inc.’s Form 8-K dated February 24, 2015 and filed on February 25, 2015.
|
|
|
|
|
|
10-3
|
|
Agreement, dated as of March 1, 2015, by and among the Icahn Group and Gannett Co., Inc.
|
|
Incorporated by reference to Exhibit 99.2 to Gannett Co., Inc.’s Form 8-K filed on March 2, 2015.
|
|
|
|
|
|
10-4
|
|
Compensation for Non-Employee Directors*
|
|
Attached.
|
|
|
|
|
|
10-6-11
|
|
Form of Executive Officer Performance Share Award Agreement*
|
|
Attached.
|
|
|
|
|
|
31-1
|
|
Rule 13a-14(a) Certification of CEO.
|
|
Attached.
|
|
|
|
|
|
31-2
|
|
Rule 13a-14(a) Certification of CFO.
|
|
Attached.
|
|
|
|
|
|
32-1
|
|
Section 1350 Certification of CEO.
|
|
Attached.
|
|
|
|
|
|
32-2
|
|
Section 1350 Certification of CFO.
|
|
Attached.
|
|
|
|
|
|
101
|
|
The following financial information from Gannett Co., Inc. Quarterly Report on Form 10-Q for the quarter ended March 29, 2015, formatted in XBRL includes: (i) Condensed Consolidated Balance Sheets at March 29, 2015 and December 28, 2014, (ii) Condensed Consolidated Statements of Income for the fiscal quarters ended March 29, 2015 and March 30, 2014, (iii) Condensed Consolidated Statements of Comprehensive Income for the fiscal quarters ended March 29, 2015 and March 30, 2014, (iv) Condensed Consolidated Cash Flow Statements for the fiscal quarters ended March 29, 2015 and March 30, 2014, and (v) the Notes to Condensed Consolidated Financial Statements.
|
|
Attached.
|
Period
|
Total
Leverage Ratio
|
Amendment and Restatement Effective Date through the Acquisition Date
|
3.50 to 1.00
|
Acquisition Date through September 30, 2016
|
4.00 to 1.00
|
October 1, 2016 and thereafter
|
3.75 to 1.00”
|
Performance Share Payment Date:
|
On a date specified by the Committee that is within the first 90 days of ____
|
(i)
|
the fraud or intentional misconduct of the Employee contributed (either directly or indirectly) to the noncompliance that resulted in the obligation to restate the Company’s financial statements; and
|
(ii)
|
a lower award of Performance Shares would have been made to the Employee had it been based upon the restated financial results;
|
•
|
The Target Number of Performance Shares under this Award Agreement will be adjusted by multiplying such number by the “RemainCo Stock Conversion Ratio”. The RemainCo Stock Conversion Ratio is equal to (i) divided by (ii) where: (i) is the value of one share of the Company’s Common Stock immediately before the Spin-Off; and (ii) is the value of one share of the Company’s Common Stock immediately after the Spin-Off. Such conversion shall be effected in a manner intended generally to prevent the dilution or enlargement of rights under this Award Agreement, provided that all determinations in connection therewith (including the methodology for determining the value of a share for the RemainCo Stock Conversion Ratio) shall be made by the Committee in its sole discretion.
|
•
|
Except as set forth above, the terms of the Award Agreement shall remain in effect.
|
•
|
As of the date of the Spin-Off, this Award Agreement will be converted into an award agreement to receive a target number of performance shares denominated in common shares of SpinCo. The target number of performance shares under the SpinCo award agreement will be calculated by multiplying Target Number of Performance Shares under this Award Agreement by the “SpinCo Stock Conversion Ratio”. The SpinCo Stock Conversion Ratio is equal to (i) divided by (ii) where: (i) is the value of one share of the Company’s Common Stock immediately before the Spin-Off; and (ii) is the value of one share of SpinCo’s common stock immediately after the Spin-Off. Such conversion shall be effected in a manner intended generally to prevent the dilution or enlargement of rights under this Award Agreement, provided that all determinations in connection therewith (including the methodology for
|
•
|
The Employee’s employment with SpinCo in conjunction with the Spin-Off shall not be treated as an event that cancels Employee’s rights under Section 5 or a termination of employment under Section 6.
|
•
|
Except as set forth above and for appropriate conforming changes (e.g., references to the Company shall instead refer to SpinCo, references to Common Shares shall refer to common stock of SpinCo, references to the Committee shall refer to the committee appointed by SpinCo, a Change in Control under Section 13 shall refer to a Change in Control of SpinCo, etc.), the SpinCo award agreement shall have terms and conditions that are substantially the same as the terms and conditions set forth herein.
|
1.
|
The denominator for calculating Total Shareholder Return shall be adjusted by dividing the value of a share of the Company’s Common Stock on the Performance Period Commencement Date by the RemainCo Conversion Ratio (“Adjusted RemainCo Grant Date Price”).
|
2.
|
The value of any cash dividends on the Company’s Common Stock (which, in accordance with the definition of “Total Shareholder Return” above, are deemed reinvested in the Company’s Common
|
3.
|
In accordance with the definition of “Total Shareholder Return” above, following the Spin-Off, the numerator for calculating Total Shareholder Return will be calculated as the difference between (A) and (B) where (A) is the sum of (i) the price of Company Stock on the relevant measurement dates, plus (ii) dividends paid on such stock between the date of the Spin-Off and the relevant measurement date (which dividends are assumed to be reinvested in the stock), plus (iii) the Adjusted RemainCo Pre-Spin Dividend; and (B) is the Adjusted RemainCo Grant Date Price.
|
4.
|
For purposes of the application of Item 1 under the heading “Other Rules” above, the price of a share of the Company’s Common Stock on the Performance Period Commencement Date shall be treated as equaling the Adjusted RemainCo Grant Date Price.
|
5.
|
The Comparator Companies set forth under “Definitions” above shall be superseded and replaced by the following for the full performance period:
|
Angie’s List, Inc. (ANGI)
|
AOL, Inc. (AOL)
|
Constant Contact, Inc. (CTCT)
|
Discovery Communications Inc. (DISCA)
|
E.W. Scripps (SSP)
|
Gray Television, Inc. (GTN)
|
Groupon, Inc. (GRPN)
|
Harte Hanks, Inc. (HHS)
|
IAC/InteractiveCorp. (IACI)
|
LinkedIn Corporation (LNKD)
|
Media General, Inc. (MEG)
|
Meredith Corp. (MDP)
|
Monster Worldwide Inc. (MWW)
|
NexStar Broadcasting Group, Inc. (NXST)
|
ReachLocal, Inc. (RLOC)
|
Sinclair Broadcast Group, Inc. (SBGI)
|
Tribune Media Co. (TRBAA)
|
Truecar, Inc. (TRUE)
|
Yahoo Inc. (YHOO)
|
|
|
1.
|
The denominator for calculating Total Shareholder Return shall be adjusted by dividing the value of a share of the Company’s Common Stock on the Performance Period Commencement Date by the SpinCo Conversion Ratio (“Adjusted SpinCo Grant Date Price”).
|
2.
|
The value of any cash dividends on the Company’s Common Stock (which, in accordance with the definition of “Total Shareholder Return” above, are deemed reinvested in the Company’s Common Stock) that are paid prior to the date of the Spin-Off (and consequently the assumed reinvestment returns on such dividends) will be adjusted in the same manner as the denominator for Total Shareholder Return (the “Adjusted SpinCo Pre-Spin Dividend”).
|
3.
|
In accordance with the definition of “Total Shareholder Return” above, following the Spin-Off, the numerator for calculating Total Shareholder Return will be calculated as the difference between (A) and (B) where: (A) is the sum of (i) the price of SpinCo common stock on the relevant measurement dates, plus (ii) dividends paid on such stock between the date of the Spin-Off and the relevant measurement date (which dividends are assumed to be reinvested in the stock), plus (iii) the Adjusted SpinCo Pre-Spin Dividend; and (B) is the Adjusted SpinCo Grant Date Price.
|
4.
|
For purposes of the application of Item 1 under the heading “Other Rules” above, the price of a share of the Company’s Common Stock on the Performance Period Commencement Date shall be treated as equaling the Adjusted SpinCo Grant Date Price.
|
5.
|
The Comparator Companies set forth under “Definitions” above shall be superseded and replaced by the following for the full performance period:
|
A.H. Belo Corp. (AHC)
|
Angie’s List, Inc. (ANGI)
|
Constant Contact, Inc. (CTCT)
|
Dex Media,Inc. (DXM)
|
Harte Hanks, Inc. (HHS)
|
Journal Communications Inc. (JRN)
|
Lee Enterprises, Inc. (LEE)
|
McClatchy Co. (MNI)
|
Meredith Corp. (MDP)
|
New Media Investment Group (NEWM)
|
New York Times Co. (NYT)
|
News Corp. (NWSA)
|
ReachLocal, Inc. (RLOC)
|
Time, Inc. (TIME)
|
Tribune Publishing Co. (TPUB)
|
(a)
|
To the extent permitted by Code Section 162(m) and the Plan, the Committee shall have the authority to adjust the number of Performance Shares that are payable under the Award Agreement, adjust the Total Shareholder Return calculations or alter the methodology for calculating the number of Performance Shares to take into account the effects of a stock split, reverse stock split, stock dividend, spin-off, reorganization, recapitalization or similar transaction.
|
(b)
|
The aggregate grant with respect to awards of Performance Shares or Restricted Stock Units made in any one fiscal year to any one participant under the Plan may not exceed the value of five hundred thousand (500,000) Shares.
|
(c)
|
Before any Performance Shares are paid to the Employee, the Committee will certify, in writing, the Company’s satisfaction of the pre-established performance target and the number of Performance Shares payable to the Employee.
|
I,
|
Gracia C. Martore, certify that:
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Gannett Co., Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 6, 2015
|
|
/s/ Gracia C. Martore
|
Gracia C. Martore
|
President and Chief Executive Officer
|
(principal executive officer)
|
I,
|
Victoria D. Harker, certify that:
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Gannett Co., Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 6, 2015
|
|
/s/ Victoria D. Harker
|
Victoria D. Harker
|
Chief Financial Officer (principal financial officer)
|
(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/ Gracia C. Martore
|
Gracia C. Martore
|
President and Chief Executive Officer
|
(principal executive officer)
|
May 6, 2015
|
(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/ Victoria D. Harker
|
Victoria D. Harker
|
Chief Financial Officer (principal financial officer)
|
May 6, 2015
|