With eye toward buying, GCI's cash reserves jump

As companies pile up more cash abroad and in the U.S., Gannett's cash stockpile has climbed to nearly a quarter-billion dollars, the highest level since early 2009, according to a new review of regulatory documents.

Although dwarfed by giants such as Microsoft, which has $67 billion, GCI's cash in the bank has grown as Corporate boosted its dividend and stock buybacks while also casting a wider net for possible acquisitions.

Indeed, it appears likely Corporate will devote extra cash to buying more companies, such as the Boston-based advertising firm Rovion, a deal announced in mid-October, rather than sharing more with investors.

"We want to make sure we keep our powder dry to do some great acquisitions," CEO Gracia Martore told media stock analysts in September at a conference sponsored by Goldman Sachs.

Analysts may renew their questions about cash reserves tomorrow at 9 a.m. ET, when Martore leads senior management in a presentation at UBS' Global Media and Communications Conference. (Webcast details.)

Gannett had $237 million in cash and cash-equivalents at the end of the third quarter, according to Corporate's 10-Q filing for the period with the U.S. Securities and Exchange Commission. That was up from $196 million in the same quarter a year before. As recently as this year's first quarter, it stood at just $157 million.

That was the highest amount since the first quarter of 2009, when it briefly soared to $649 million after Corporate borrowed $563 million to pay down debt during the financial crisis roiling markets at the time. (Spreadsheet shows quarter-by-quarter figures.)

Other companies are flush with cash as they manage more conservatively during the choppy economic recovery. Many of those are holding vast stockpiles overseas, where it can only be spent on foreign investments and operations.

Microsoft, General Electric, Apple and others are reluctant to bring that cash home because it will be subject to a 35% tax rate on corporate profits, minus whatever tax they've paid overseas, The Wall Street Journal reported today.

GCI's overseas operations largely consist of its U.K. newspaper division, Newsquest, which publishes 17 dailies. But the company's regulatory filings do not indicate whether much of any cash is being held outside the U.S.