Gannett Q2 2007 Earnings Call Transcript

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2007-07-18 09:39:26.0

Tags: Gannett

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Peter Appert - Goldman Sachs.

Peter Appert - Goldman Sachs

Gracia, can you quantify please the FX impact on EPS and related to that within the non-operating items, is there any greater granularity you could give us in terms of what the contribution from CB was and other more operating items versus more one-time items? Thanks.

Gracia Martore

Sure, Peter. With regard to foreign exchange and the currency impact for the quarter, similar to other quarters we benefited by about $0.02 in the quarter from the currency. Typically in the past the swing has been in that $0.01 to $0.02 range.

With regard to the non-operating area, there were really three primary drivers of the significant swing year over year. First one was improved performance from our Internet investments, including CareerBuilder and Classified Ventures, particularly. So we saw about a mid single-digit million swing in the totality of those Internet investments led by CareerBuilder and Classified Ventures.

I would suggest, however, that you have to be careful about that because those results can be a little bit more volatile because of the timing of marketing spend and the rest. But that is what was achieved in the second quarter, and obviously we are very, very pleased with the progress that CareerBuilder and Classified Ventures made.

The second piece was a sale of some land here in McLean and again, that was sort of a mid single-digit kind of net gain.

The last piece was some interest income and some changes in value of some marketable securities that we hold and that also contributed probably the rest of the swing. So hopefully that gives you a little bit better granularity on those items.

Operator

Your next question comes from Edward Atorino - Benchmark.

Edward Atorino - Benchmark

If I look at the depreciation and interest line would we run out depreciation at the second quarter rate? It looks like interest expense might tail off for the second half with the debt where it is, compared to the first half.

Gracia Martore

Ed, let me address those two. On the depreciation line actually, as I mentioned in our prepared remarks, that line was impacted this quarter by some accelerated depreciation related to some plant consolidations that we've done in a couple of places. So I think if you look at the assumption that we made at the midyear media review for depreciation expense, I think that is a good number to look at for the full year.

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