http://www.morningstar.com/earnings/54692156-gannett-co-inc-gci-q2-2013.aspx

Gannett Co Inc GCI
Q2 2013 Earnings Call Transcript

Transcript Call Date 07/22/2013

Operator: Good day, everyone, and welcome to Gannett's Second Quarter 2013 Earnings Conference Call. This call is being recorded. Due to the large number of callers, we will limit you to one question or comment. We greatly appreciate your cooperation and courtesy. Our speakers for today will be Gracia Martore, President and Chief Executive Officer; and Victoria Harker, Chief Financial Officer.

At this time, I would like to turn the call over to Jeff Heinz, Vice President, Investor Relations. Please go ahead.

Jeffrey Heinz - Director, IR: Thanks, Jessica. Good morning and welcome to our earnings call and webcast. Today our President and CEO, Gracia Martore; and our CFO, Victoria Harker will review Gannett's second quarter results. After their prepared commentary, we will open up the call for questions. Hopefully, you've had the opportunity to review this morning's press release. If you have not seen it yet, it's available at gannett.com.

Before we get started I'd like to remind you that this conference call and webcast includes forward-looking statements and our actual results may differ. Factors that might cause them to differ are outlined in our SEC filings.

This presentation also includes certain non-GAAP financial measures. We have provided reconciliations of those measures to the most directly comparable GAAP measures in the press release and on the Investor Relations portion of our website.

With that, let me turn the call over to Gracia.

Gracia C. Martore - President and CEO: Thanks, Jeff, and good morning. Let me join Jeff in welcoming you to our call. First, I'm going to discuss some highlights from the quarter, including the good progress we're seeing on our strategic plan and then recap our biggest news of the quarter, our pending acquisition of Belo Corp., and after that, I'm going to turn it over to Victoria, who is going to cover the performance of each of our business segments and some balance sheet items as well. Then, of course, we'll move onto any questions that you all might have.

Turning to the second quarter financial results, we are very pleased that earnings per share increased 4% to $0.58 per share excluding special items, especially in light of the very mixed economic backdrop, and our comparisons and broadcasting due to political spending. This growth was primarily driven by the continued success of our all access content subscription model, very strong companywide Digital results, and solid results in our Broadcast segment, despite those political headwinds.

Total revenue, as you saw this morning was $1.3 billion in line with the second quarter of last year, as revenue increases in circulation and the Broadcasting and Digital segments almost completely offset a decline in advertising revenue in our Publishing segment. Expenses, excluding special items were by and large unchanged in the quarter. I am pleased to report that the impact of our cost control and efficiency efforts counterbalanced our investments and our strategic initiatives and higher expenses related to higher revenues in Digital. Each of our segments remained strongly profitable as operating income from the quarter excluding special items was approximately $229 million, while operating cash flow totaled $277 million.

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