Although Corporate announced Monday that it had reached a final agreement to shift The Cincinnati Enquirer's printing to The Columbus Dispatch, resulting in about 200 layoffs by the end of next year, the agreement was actually signed four days before, according to a new filing this afternoon with federal securities regulators.
The 8-K filing also notes that the agreement is between the Dispatch and the mammoth, new Gannett Publishing Services subsidiary, created in late September to pull together all of GCI's newspaper production and distribution into a separate entity. (I note for the first time, as well, that GPS is a limited liability company. Tax experts may weigh on on the financial implications of that status.)
Details of $60M cost
The 8-K also offers more details about severance, depreciation and other costs associated with the move, which is expected to be complete by the fourth quarter of 2012.
Corporate had previously said that closing the Enquirer's production plant would cost less than $60 million. In today's 8-K, the company says:
"The costs of operating the Columbus printing facility will be shared by the parties to the Agreement, resulting in efficiencies and costs savings for the Company.
"The transition of operations could take up to twelve months to complete. In connection with these actions, the Company estimates that it will incur between $55 million and $59 million in costs and charges. These items include severance costs and charges related to the partial withdrawal from multiemployer pension plans which together will range from $38 million to $42 million and will result in future cash expenditures. In addition, the Company will recognize accelerated depreciation charges on its current printing facilities of approximately $17 million.
"The charge for severance and pension will be recorded by the Company in the fourth quarter of 2011. The charge for accelerated depreciation will begin in the fourth quarter of 2011 and will continue over the period leading up to the start of production activities at the Columbus printing facility, which is expected to be in the fourth quarter of 2012. The pension liability determinations are not likely to be finalized for a considerable period of time, possibly in 2013, and therefore current estimates are likely to change due to interest rates, investment returns and other factors affecting the plans’ funded status."
Details of $60M cost
The 8-K also offers more details about severance, depreciation and other costs associated with the move, which is expected to be complete by the fourth quarter of 2012.
Corporate had previously said that closing the Enquirer's production plant would cost less than $60 million. In today's 8-K, the company says:
"The costs of operating the Columbus printing facility will be shared by the parties to the Agreement, resulting in efficiencies and costs savings for the Company.
"The transition of operations could take up to twelve months to complete. In connection with these actions, the Company estimates that it will incur between $55 million and $59 million in costs and charges. These items include severance costs and charges related to the partial withdrawal from multiemployer pension plans which together will range from $38 million to $42 million and will result in future cash expenditures. In addition, the Company will recognize accelerated depreciation charges on its current printing facilities of approximately $17 million.
"The charge for severance and pension will be recorded by the Company in the fourth quarter of 2011. The charge for accelerated depreciation will begin in the fourth quarter of 2011 and will continue over the period leading up to the start of production activities at the Columbus printing facility, which is expected to be in the fourth quarter of 2012. The pension liability determinations are not likely to be finalized for a considerable period of time, possibly in 2013, and therefore current estimates are likely to change due to interest rates, investment returns and other factors affecting the plans’ funded status."
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ReplyDeleteWith print media coming from Columbus, this will add 2 hours to your paper delivery time. That means your news is 2 more hours out of date. They are going the wrong direction. They need to focus on faster turnaround to compete with electronic media.
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