Gannett Co., Inc. Reports Third Quarter Results

Business Wire, Oct 24, 2008

NON-OPERATING ITEMS

The company's equity share of operating earnings or losses from our unconsolidated investees including the California Newspapers Partnership, Texas-New Mexico Newspapers Partnership, Tucson and online/new technology businesses is reported in "Equity income (losses) in unconsolidated investees, net" in the non-operating section of the Consolidated Statements of Income. These amounts include the company's equity share of results for CareerBuilder and ShopLocal for periods prior to September 3, 2008 and June 30, 2008, respectively.

The decline in equity income from unconsolidated investees for the third quarter of 2008 was due primarily to: lower results from our newspaper partnerships reflecting the challenging publishing advertising environment; continued investment in digital assets like Metromix; and the inclusion of CareerBuilder results for two months in the quarter compared to 3 months in last year's third quarter.

The decrease in other non-operating items reflects the inclusion of minority interest expense related to CareerBuilder, a reduced level of investment income and foreign currency charges associated primarily with UK pound-denominated transactions.

Interest expense for the third quarter was $46.8 million, a 25.7 percent decline compared to $63.0 million for the third quarter in 2007. The decline was due to lower interest rates and average debt balances.

As expected, some favorable tax settlements of prior year state return positions and a lower UK statutory tax rate impacted the tax rate for the quarter. We expect further favorable tax settlements in the fourth quarter.

At the end of the quarter, Gannett had more than 100 domestic publishing Web sites, including USATODAY.com, one of the most popular newspaper sites on the Web. The company also had Web sites in all of its 19 television markets. In September, Gannett's consolidated domestic Internet audience share was 25.4 million unique visitors reaching 15.6 percent of the Internet audience according to Nielsen//NetRatings. Newsquest is also an Internet leader in the UK where its network of Web sites attracted more than 85.6 million monthly page impressions from approximately 6.5 million unique users. CareerBuilder's average unique visitors year-to-date totaled 23.4 million, an increase of almost 6 percent compared to last year.

All references in this release to "comparable" revenue results and "operating cash flow" are to non-GAAP financial measures. Management believes that this use allows management and investors to analyze and compare the Company's results in a more meaningful and consistent manner. A reconciliation of the non-GAAP operating cash flow amounts to the Company's consolidated statements of income is attached.

As previously announced, the company will hold an earnings conference call at 10:00 a.m. ET today. The call can be accessed via a live Webcast through the Investor Relations section of the company's Web site, www.gannett.com, or listen-only conference lines. U.S. callers should dial 1-888-215-7015 and international callers should dial 913-312-1504 at least 10 minutes prior to the scheduled start of the call. The confirmation code for the conference call is 5339774. To access the replay, dial 1-888-203-1112 in the U.S. International callers should use the number 719-457-0820. The confirmation code for the replay is 5339774. Materials related to the call will be available through the Investor Relations section of the company's Web site Friday morning.