ITEM 1. BUSINESS
GENERAL
Media General, Inc., is an independent, publicly owned communications company situated primarily in the Southeast with interests in newspapers, television stations, and interactive media. The Company employs approximately 7,700 people on a full or part-time basis. The Company's businesses are somewhat seasonal; the second and fourth quarters are typically stronger than the first and third quarters.
Through a series of strategically targeted acquisitions and dispositions from 1995 to 2000, the Company has significantly expanded its reach in the Southeast and intensified its focus on newspapers and television stations in this region. Major acquisitions and dispositions have included:
Acquisitions Dispositions
Worrell Newspapers (1995) Media General Cable (1999) Park Communications (1997) Garden State Paper Company (2000) Spartan Communications (2000) Selected Thomson Newspapers (2000)
These transactions along with several other smaller ones culminated in the Company's ownership of 25 daily newspapers and nearly 100 other publications, as well as 26 (21 southeastern) television stations. The Company also operates more than 50 online enterprises
The trend in the publishing and broadcast industries during the 1990s was toward consolidation. Generally, larger companies, like Media General, have acquired smaller family-owned entities based upon their availability; these properties have not reappeared on the market unless the larger companies make strategic decisions to exit a particular market or to exit a segment of their business. This trend has slowed in more recent years, and due to the severely depressed advertising environment in 2001, there were very few transactions consummated in 2001. The Federal Communications Commission (FCC) is in the process of reviewing its regulations on several fronts but the most significant of these from Media General's perspective is the FCC's cross-ownership ban (currently prohibiting the common ownership of a TV station and a newspaper in most markets). The FCC's duopoly regulations (involving the ownership of more than one TV station in the same market) also is presently before the courts. If and when these regulations are repealed or amended, a renewed trend of mergers, swaps and acquisitions affecting the publishing and broadcast industries is expected. The Company expects that this will present opportunities to further its convergence strategy and to grow. The Company believes it is well positioned to capitalize on these opportunities as they arise in the Southeast.
In December 1999 the Company initiated a program to repurchase up to $250 million of its Class A common stock. The Company repurchased, in 1999 and 2000, 4.1 million shares at a cost of approximately $204 million.
INDUSTRY SEGMENTS
The Company operates in three significant industry segments. For financial information related to these segments see pages 34 through 36 of the 2001 Annual Report to Stockholders, which are incorporated herein by reference. These segments are Publishing, Broadcast, and most recently, Interactive Media. On January 1, 2001, the Company launched the Interactive Media Division, the operations of which had historically been a part of Publishing and Broadcast. Additional information related to each of the Company's significant industry segments is included below.
PUBLISHING BUSINESS
At December 30, 2001, the Company's wholly owned publishing operations included daily and Sunday newspapers in Virginia, Florida, North Carolina, Alabama and South Carolina. For a listing of the Company's daily and Sunday newspapers by location, see the chart on page 7 of the 2001 Annual Report to Stockholders, which is incorporated herein by reference. Combined paid circulation for these newspapers in 2001 was as follows:
Newspaper Location Daily Sunday Weekly - ----------------------------------------------------------------------- Virginia 359,000 410,000 52,000 Florida 234,000 310,000 1,000 North Carolina 167,000 177,000 7,000 Alabama 50,000 52,000 2,000 South Carolina 33,000 35,000 8,000
The Company also holds 20% of the common stock of the Denver Post Corporation, the parent company of The Denver Post, a daily newspaper in Denver, Colorado. Effective January 2001, The Denver Post and the Denver Rocky Mountain News entered into a joint-operating agreement under which the competing newspapers combined their advertising, circulation and production operations, while maintaining separate newsrooms.
The newspaper publishing industry in the United States is comprised of hundreds of public and private companies ranging from large national and regional companies, publishing multiple newspapers across many states, to small privately held companies publishing one newspaper in one locality. The Company is among the top ten publicly held newspaper publishing companies in the United States based on both daily circulation and revenues. Moreover, the Company has achieved the number three position in circulation in its chosen southeastern area of focus, with its publications reaching over one million households across the Southeast every week.
All of the Company's newspapers compete for circulation and advertising with other newspapers published nationally and in nearby cities and towns and for advertising with magazines, radio, broadcast and cable television, the Internet and other promotional media. All of the newspapers compete for circulation principally on the basis of content, quality of service and price.
The primary raw material used by the Company in its publishing operations is newsprint, which is purchased at market prices from various Canadian and United States sources, including SP Newsprint Company (SPNC), in which the Company owns a one-third equity interest. SPNC has mills in Dublin, Georgia, and Newberg, Oregon, with a combined annual capacity of 1 million short tons. The publishing operations of the Company consumed approximately 133,000 short tons of newsprint in 2001.
Management of the Company believes that sources of supply under existing arrangements will be adequate in 2002.
BROADCAST BUSINESS
The ownership, operation and sale of broadcast television stations, including those licensed to the Company, are subject to the jurisdiction of the Federal Communications Commission (FCC), which engages in extensive and changing regulation of the broadcasting industry under authority granted by the Communications Act of 1934 (Communications Act) and the rules and regulations of the FCC. The Communications Act requires broadcasters to serve the public interest. Among other things, the FCC assigns frequency bands; determines stations' locations and operating power; issues, renews, revokes and modifies station licenses; assigns and controls changes in ownership or control of station licenses; regulates equipment used by stations; adopts and implements regulations and policies that directly or indirectly affect the ownership, operation and employment practices of stations; regulates certain program content and commercial matters in children's programming; has the authority to impose penalties for violations of its rules or the Communications Act; and imposes annual fees on stations. Reference should be made to the Communications Act, the FCC's rules, public notices and rulings for further information concerning the nature and extent of federal regulation of broadcast television stations.
The Broadcast Television Division operates twenty-six network-affiliated television stations in the United States. The following table sets forth certain information on each of these stations:
(a) Source: November 2001 Nielsen Rating Books. (b) Television broadcast licenses are granted for maximum terms of eight years and are subject to renewal upon application to the FCC. * Sign-On to Sign-Off.
The primary source of revenues for the Company's television stations is the sale of time to national and local advertisers. Additional revenue is derived from the network programming carried by major-network affiliates.
The Company's television stations are in competition for audience and advertising revenues with other television and radio stations and cable television systems as well as magazines, newspapers, the Internet and other promotional media. A number of cable television systems and direct-to-home satellite companies which operate generally on a subscriber payment basis are in business in the Company's broadcasting markets and compete for audience by presenting cable network and other program services. The television stations compete for audience on the basis of program content and quality of reception, and for advertising revenues on the basis of price, share of market and performance.
The television broadcast industry presently is implementing the transition from analog to digital (DTV) technology in accordance with a mandated conversion timetable established by the FCC. The Company's Tampa, Greenville/Spartanburg, and Florence/Myrtle Beach television stations have begun digital broadcasting; the Company's other television stations must begin DTV service by May 1, 2002, except to the extent that the FCC extends this deadline for particular stations.
Congress and the FCC have under consideration, and in the future may adopt, new laws, regulations and policies regarding a wide variety of matters that could affect, directly or indirectly, the operation, ownership and profitability of the Company's broadcast television stations and affect the ability of the Company to acquire additional stations. In addition to the matters noted above, these include, for example, spectrum use fees, political advertising rates, potential restrictions on the advertising of certain products (such as alcoholic beverages) and ownership rule changes. Other matters that could potentially affect the Company's broadcast properties include technological innovations and developments generally affecting competition in the mass communications industry, such as satellite radio and television broadcast service, wireless cable systems, low-power television stations, radio technologies, the advent of telephone company participation in the provision of video programming services, and Internet delivered video programming services.
INTERACTIVE MEDIA BUSINESS
In January 2001 the Company launched its Interactive Media Division, which operates in conjunction with its Publishing and Broadcast Divisions to provide online news, information and entertainment to its customers without geographic restrictions. The Division is comprised of more than 50 interactive enterprises, as well as a minority investment in PowerOne Media, Inc. (formerly AdOne, LLP) and several other dot-com companies. The most established component of the Division is Media General Financial Services, Inc., which compiles and makes available both current and historical data on publicly traded companies to a broad spectrum of users, primarily online financial data services, and also offers other specialized financial products.
Among the online enterprises included in the Interactive Media Division, each of the Company's daily newspapers and television stations is affiliated with a website featuring content from its published products or its television offerings. Online revenues are derived primarily from advertising, which range from static banner ads to interactive advertising to targeted ad campaigns. Additional revenues are generated from classified advertisements placed on the Company's websites. This arrangement has been very successfully converted to an upsell arrangement in several markets and is being rolled-out to others. Under the upsell arrangement, customers pay a small additional fee to have their classified ad placed online, simultaneously.
The Interactive Media Division is acting as the catalyst in the Company's convergence efforts, which can best be seen at TBO.com, where content from both The Tampa Tribune and WFLA-TV is leveraged to create the most comprehensive online news and information service in the Tampa metropolitan area. While the next several years will reflect the expense of starting and growing the Interactive Media Division, the Company expects that it will become profitable in two to three years.
The Company's online enterprises compete for advertising, as well as for users' discretionary time, against newspapers, magazines, radio, broadcast and cable television, other websites and other promotional media. These websites compete for users principally on the basis of depth of content, and for advertisers primarily on the strength of technology to deliver advertisements and the quality of that delivery.
ITEM 2.
ITEM 2. PROPERTIES
The headquarters buildings of Media General, Inc., and the Richmond Times-Dispatch are adjacent to one another in downtown Richmond, Virginia. The Company currently leases both of these buildings and has an option to buy them. The Company owns a third adjacent building which houses the Interactive Media Division's and Broadcast Division's management. The Richmond newspaper is printed at a production and distribution facility located on a site (approximately 90 acres) in Hanover County, Virginia, near Richmond; the acreage beyond the foreseeable needs of the Company is being actively marketed. The Company owns eight other daily newspapers in Virginia, all of which are printed in or around their respective cities at production and distribution facilities situated on parcels of land ranging from one-half acre to six acres. The Tampa, Florida, newspaper is located in a single unit production plant and office building located on a six acre tract in that city. The headquarters of the Company's Brooksville and Sebring, Florida, daily newspapers are located on leased property in their respective cities; however, these newspapers are printed at the Tampa production facility. The Winston-Salem newspaper is headquartered in one building in downtown Winston-Salem; its newspaper is printed at a production and distribution facility located on a nearby 12 acre site. The remaining twelve daily
newspapers (seven in North Carolina, three in Alabama, and one each in South Carolina and Florida) are printed at production and distribution facilities on sites which range from one-half acre to seven acres, all located in or around their respective cities. The Company owns substantially all of its newspaper production equipment, production buildings and the land where these production facilities reside.
The Company's broadcast television station, WFLA-TV in Tampa, Florida, occupies its headquarters and studio building, which is leased by the Company with an option to buy. This building adjoins The Tampa Tribune. This structure also serves as a multimedia news center where efforts are combined and information is shared among The Tampa Tribune, WFLA-TV and TBO.com.
The Company's 26 television stations are located in 12 states (ten southeastern) as follows: four each in Florida, Georgia, South Carolina and Kansas; two in both Mississippi and Tennessee; and one in Alabama, Kentucky, Louisiana, North Carolina, Iowa and Virginia. Substantially all of the television stations are located on land owned by the Company. Twenty station tower sites are owned by the Company; six are leased.
The Interactive Media Division operates out of and in conjunction with the Publishing and Broadcast properties.
The Company considers all of its properties, together with the related machinery and equipment contained therein, to be well maintained, in good operating condition, and adequate for its present and foreseeable future needs.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEMS 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth quarter of 2001.
- -------------------- * The year indicated is the year in which the officer first assumed an office with the Company.
Officers of the Company are elected at the Annual Meeting of the Board of Directors to serve, unless sooner removed, until the next Annual Meeting of the Board of Directors and/or until their successors are duly elected and qualified.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Reference is made to page 45 of the 2001 Annual Report to Stockholders, which is incorporated herein by reference, for information required by this item.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Reference is made to pages 46 and 47 of the 2001 Annual Report to Stockholders, which are incorporated herein by reference, for information required by this item.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to pages 17 through 23 of the 2001 Annual Report to Stockholders, which are incorporated herein by reference, for information required by this item.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Reference is made to pages 21, 22, 33, 34, 42 and 44 of the 2001 Annual Report to Stockholders, which are incorporated herein by reference, for information required by this item.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated financial statements of the Company as of December 30, 2001, and December 31, 2000, and for each of the three fiscal years in the period ended December 30, 2001, and the report of independent auditors thereon, as well as the Company's unaudited quarterly financial data for the fiscal years ended December 30, 2001, and December 31, 2000, are incorporated herein by reference from the 2001 Annual Report to Stockholders pages 24 through 45.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated herein by reference from the Company's definitive proxy statement for the Annual Meeting of Stockholders on May 24, 2002, except as to certain information regarding executive officers included in Part I.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated herein by reference from the Company's definitive proxy statement for the Annual Meeting of Stockholders on May 24, 2002.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated herein by reference from the Company's definitive proxy statement for the Annual Meeting of Stockholders on May 24, 2002.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated herein by reference from the Company's definitive proxy statement for the Annual Meeting of Stockholders on May 24, 2002.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. and 2. Financial Statement Schedules The financial statements and schedules listed in the accompanying index to financial statements and financial schedules are filed as part of this annual report.
3. Exhibits The exhibits listed in the accompanying index to exhibits are filed as part of this annual report.
(b) Reports on Form 8-K None
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES - ITEM 14(a)
Schedules other than Schedule II, listed above, are omitted since they are not required or are not applicable, or the required information is shown in the financial statements or notes thereto.
The consolidated financial statements of Media General, Inc. (except for Note 11 which is provided below), listed in the above index which are included in the Annual Report to Stockholders of Media General, Inc., for the fiscal year ended December 30, 2001, are incorporated herein by reference. With the exception of the pages listed in the above index and the information incorporated by reference included in Parts I, II and IV, the 2001 Annual Report to Stockholders is not deemed filed as part of this report.
The following financial statement footnote was not included in the Annual Report:
NOTE 11: GUARANTOR FINANCIAL INFORMATION
Under the shelf registration filed in August 2001 (See Note 4), the Company's subsidiaries may be required, from time to time, to guarantee debt securities issued from that shelf under certain circumstances. These guarantees would be full and unconditional and on a joint and several basis. For the $200 million in senior notes, which are currently guaranteed by the subsidiaries, the following financial information presents condensed consolidating balance sheets, statements of operations, and statements of cash flows for the parent company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries, together with certain eliminations. The Non-Guarantor Subsidiaries consist of Garden State Paper, sold in the third quarter of 2000, and the Company's cable operations, sold in the fourth quarter of 1999, during their respective periods of ownership.
Media General, Inc. Condensed Consolidating Balance Sheets As of December 30, 2001 (In thousands)
Media General, Inc. Condensed Consolidating Balance Sheets As of December 31, 2000 (In thousands)
Media General, Inc. Condensed Consolidating Statements of Operations Fiscal Year Ended December 30, 2001 (In thousands)
Media General, Inc. Condensed Consolidating Statements of Operations Fiscal Year Ended December 31, 2000 (In thousands)
Media General, Inc. Condensed Consolidating Statements of Operations Fiscal Year Ended December 26, 1999 (In thousands)
Media General, Inc. Condensed Consolidating Statements of Cash Flows Fiscal Year Ended December 30, 2001 (In thousands)
Media General, Inc. Condensed Consolidating Statements of Cash Flows Fiscal Year Ended December 31, 2000 (In thousands)
Media General, Inc. Condensed Consolidating Statements of Cash Flows Fiscal Year Ended December 26, 1999 (In thousands)
Media General, Inc. Schedule II - Valuation and Qualifying Accounts and Reserves Fiscal Years Ended December 30, 2001, December 31, 2000, and December 26, 1999
(a) Amount associated with net acquisitions and dispositions of businesses.
REPORT OF INDEPENDENT AUDITORS
The Partners SP Newsprint Co. and Subsidiaries
We have audited the accompanying consolidated balance sheets of SP Newsprint Co. (a Georgia Partnership) and subsidiaries as of December 30, 2001 and December 31, 2000, and the related consolidated statements of income, partners' capital, and cash flows for each of the three years in the period ended December 30, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of SP Newsprint Co. and subsidiaries at December 30, 2001 and December 31, 2000, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 30, 2001, in conformity with accounting principles generally accepted in the United States.
As discussed in Notes 2 and 8 to the Consolidated Financial Statements, in 2001 the Company changed its method of accounting for derivative financial instruments and hedging activities.
/s/ Ernst & Young LLP
Atlanta, Georgia January 11, 2002
SP Newsprint Co. and Subsidiaries
Consolidated Balance Sheets
See accompanying notes.
SP Newsprint Co. and Subsidiaries
Consolidated Statements of Income
See accompanying notes.
SP Newsprint Co. and Subsidiaries
Consolidated Statements of Partners' Capital
See accompanying notes.
SP Newsprint Co. and Subsidiaries
Consolidated Statements of Cash Flows
See accompanying notes.
Sp Newsprint Co. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2001
1. ORGANIZATION AND OPERATION OF PARTNERSHIP
SP Newsprint Co. (the "Company") is a Georgia partnership which operates newsprint paper mills (one in Dublin, GA. and one in Newberg, OR.) under an agreement ultimately among Cox Enterprises, Inc., Knight-Ridder Newspapers, Inc., and Media General, Inc. (the "Partners"). The Company produces recycled newsprint which is sold to a variety of newspaper publishers mainly in the southeastern and western United States. Historically, the newsprint industry has been highly cyclical, and the market for newsprint is subject to rapid changes. Current forecasts for 2002 reflect significantly lower newsprint prices which are projected to have a substantial adverse impact on 2002 earnings. Such a sustained decline in newsprint prices would impact the Company's ability to execute its capital spending programs and possibly impact compliance with its debt covenants. The Company's exposure to these changes is partially mitigated by the Partners' commitment to purchase a portion of the mills' annual output with a maximum as follows: Cox Enterprises, Inc. - 100,000 tons, Knight-Ridder Newspapers, Inc. - 100,000 tons, and Media General, Inc. - 40,000 tons. In certain circumstances, however, the Partners may make a portion of these commitments available to outside parties or purchase additional tonnage. Approximately 26%, 27% and 38% of the Company's revenues in 2001, 2000 and 1999, respectively, were from sales to the Partners. As of December 30, 2001 and December 31, 2000, the Company had accounts receivable from these Partners of $15,121,000 and $10,658,000, respectively. In addition, the Partners have signed noninterest-bearing notes, with amounts outstanding totaling $20,000,000 at December 30, 2001 and December 31, 2000, which allow the Company to demand payment at any time.
Under terms of the partnership agreement, the Partners contribute capital and share in profits and losses equally. The partnership may be dissolved at any time by mutual agreement of the Partners, but no Partner may cause dissolution without the consent of the other Partners. Under certain conditions, including a buyout by the remaining Partners, the business of the partnership can be continued as a successor partnership without liquidation of its affairs.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, SP Recycling Corp. ("SPRC") (a Georgia Corporation), and Southeast Paper Technology, LLC. All significant intercompany balances and transactions have been eliminated.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results inevitably will differ from those estimates and such differences may be material to the financial statements.
COLLECTIVE BARGAINING ARRANGEMENTS
At December 30, 2001, the Company had approximately 756 hourly and 166 salaried employees. Approximately 276 hourly employees at the Company's Newberg, Oregon mill (Note 5) are represented by the Association of Western Pulp and Paper Workers (the "Union"). The existing agreement with the Union expires on March 31, 2002. While not currently anticipated, the Company's inability to negotiate a new collective bargaining agreement could cause significant reductions in revenues.
CASH AND TEMPORARY INVESTMENTS AND NOTES
For purposes of the statements of cash flows, the Company considers all temporary investments purchased with a maturity of three months or less to be cash equivalents. The carrying amounts reported in the balance sheet for cash and temporary investments and demand notes approximate their fair values.
INVENTORIES
Inventories at year-end consisted of the following (in thousands):
December 30, December 31, 2001 2000 ---------------------------------
Old newspapers $ 5,010 $ 4,338 Materials and supplies 23,312 21,129 Finished goods 959 3,200 Other 915 1,058 --------------------------------- $30,196 $29,725 =================================
Old newspapers ("ONP"), materials and supplies, and finished goods are valued at the lower of moving average cost or net realizable value. Other inventories are valued at the lower of first-in, first-out cost or net realizable value.
ONP is the primary fiber source utilized by the Company in producing newsprint. As with newsprint, ONP costs are highly cyclical and subject to significant change. To help ensure an adequate supply of ONP the Company operates recycling centers, which procure a material portion of its southeastern United States ONP requirements. Additionally, the Company has committed to purchase, at market prices (as defined), minimum annual tons of ONP from a supplier to satisfy a portion of its Newberg, Oregon Mill's (Note 5) production needs. Based on December 30, 2001 delivered cost of ONP, this commitment approximates $15,000,000 in 2002, $11,000,000 in 2003, $8,000,000 in 2004, $7,000,000 in 2005, and $5,000,000 thereafter.
DEPRECIATION, MAINTENANCE, AND REPAIRS
Property, plant, and equipment are stated at cost. For financial reporting purposes, depreciation is determined by the straight-line method using the following estimated useful lives:
Land improvements 10-20 years Buildings 30-45 years Machinery and equipment 3-20 years
For federal income tax purposes, accelerated methods and lives, as allowable under the Internal Revenue Code, are used.
Expenditures for maintenance and repairs are charged to expense as incurred. Maintenance and repairs expense totaled $36,972,000, $41,077,000 and $21,695,000 during 2001, 2000 and 1999, respectively. Expenditures for renewals and betterments are capitalized and depreciated over the related estimated useful lives indicated above.
CAPITALIZED INTEREST
The Company capitalizes interest on borrowed funds during construction. Such interest is allocated to property, plant, and equipment accounts and amortized over the related estimated useful lives indicated above. The amount of interest capitalized was $1,264,000, $247,000 and $0 during 2001, 2000 and 1999, respectively.
SHIPPING AND HANDLING COSTS
The Company classified shipping and handling costs of $31,060,000, $31,404,000, and $16,812,000 as a component of cost of goods sold during 2001, 2000, and 1999, respectively.
INCOME TAXES
The Company is a partnership for income tax purposes. Accordingly, no income taxes are payable or provided for by the Company. Instead, taxable income, credits, etc., are allocated to the partners and are included in their income tax returns. SPRC is subject to income taxes. Tax expense for SPRC has not been material.
GOODWILL
Costs in excess of the fair value of net assets of businesses acquired are amortized using the straightline method over a period of 20 years. Accumulated amortization was $1,320,000 and $682,000 at December 30, 2001 and December 31, 2000, respectively.
The Company reviews the recorded value of its goodwill if events or changes in circumstances indicate that the carrying amount may exceed fair value. Recoverability is then determined by comparing the undiscounted net cash flows, excluding interest, of the assets to which the goodwill applies to the net book value of those assets, including goodwill.
DEFERRED CHARGES
Deferred charges, stated at cost less amortization, include loan procurement costs that are capitalized and amortized over a five year period. Accumulated amortization of deferred charges was $2,695,000 and $1,487,000 at December 30, 2001 and December 31, 2000, respectively.
ACCOUNTS RECEIVABLE
The Company's sales to The Tribune Company represents approximately 18%, 25%, and 4% of net sales in 2001, 2000, and 1999, respectively. Accounts receivable from The Tribune Company was approximately $11,956,000 and $8,673,000 at December 30, 2001 and December 31, 2000, respectively.
The Company performs periodic credit evaluations of its customers' financial condition and does not require collateral. Receivables are generally due within 60 days. Credit losses have not been significant.
REVENUE RECOGNITION
The Company recognizes revenue when title passes to the buyer, which is generally upon shipment.
SEGMENT REPORTING
As of December 30, 2001, the Company operated two newsprint mills in the United States as part of a single operating segment. The mills provide similar products. The facilities also possess similar long-term expected financial performance characteristics. Revenues from the mills are derived principally from newsprint sales to a variety of newspaper publishers mainly in the southeastern and western United States.
NEW ACCOUNTING STANDARDS
In August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 144 ("SFAS 144"), "Accounting for the Impairment or Disposal of Long-Lived Assets." This statement addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supercedes SFAS 121 on the same topic. SFAS 144 is effective for fiscal years beginning after December 15, 2001. The Company expects to adopt SFAS 144 as of January 1, 2002 and is currently assessing the impact of the pronouncement on the consolidated financial statements. Management does not expect the impact to be material to the Company's financial position.
In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets." This statement changes the accounting for goodwill from an amortization method to an impairment-only approach. The Company will adopt this statement in the first quarter of fiscal 2002 and is currently evaluating the impact of the pronouncement on the consolidated financial statements.
In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative Instruments and Hedging Activities," as amended. This statement requires the fair value of derivatives to be recorded as assets or liabilities. Gains or losses resulting from changes in the fair values of derivatives are accounted for currently in
earnings or comprehensive income depending on the purpose of the derivatives and whether they qualify for hedge accounting treatment. SFAS 133 was adopted in the first quarter of fiscal 2001 and the adoption resulted in no significant impact on net income in the consolidated statement of income, and a cumulative loss upon adoption of $2,267,000 charged directly to other comprehensive income. See Note 8 for further discussion.
RECLASSIFICATIONS
Certain reclassifications have been made to prior year amounts to conform with the current year presentation.
FISCAL YEAR
The Company's financial reporting period consists of a five week period and two four week periods per quarter. Accordingly, the Company's fiscal year ends on the last Sunday of December, as defined. The Company's fiscal year consisted of 52 weeks, 53 weeks and 52 weeks for 2001, 2000 and 1999, respectively.
3. UNEXPENDED INDUSTRIAL REVENUE BOND PROCEEDS
In connection with the construction of de-inking process equipment at its Newberg, Oregon Mill (Note 5), the Company issued a total of $78,520,000 in Industrial Revenue Bonds (Note 4). The proceeds were held in trust for the sole benefit of this project. All disbursements from the trust are made by the trustee upon receipt of a qualified requisition for such disbursements. The Company had $0 and $26,961,000 in unexpended proceeds available for construction as of December 30, 2001 and December 31, 2000, respectively. The de-inking process equipment construction was completed and placed into service during October 2001.
4. LONG-TERM DEBT
Long-term debt at year-end consisted of the following (in thousands):
December 30, December 31, 2001 2000 ---------------------------------
Term loan facility $128,000 $170,000 Revolving credit facility - 24,000 2001 Industrial revenue bonds - due 2026 38,000 - 2000 Industrial revenue bonds - due 2025 40,520 40,520 1997 Industrial revenue bonds - due 2017 35,000 35,000 1993 Industrial revenue bonds - due 2013 25,000 25,000 --------------------------------- 266,520 294,520 Less current portion (18,000) (25,000) --------------------------------- $248,520 $269,520 =================================
Scheduled calendar maturities of long-term debt at December 30, 2001 were as follows (in thousands):
2002 $ 18,000 2003 35,000 2004 35,000 2005 40,000 2006 - Thereafter 138,520 ------------- $266,520 =============
The Company is party to a Credit Agreement (the "Agreement") with a group of banks. The Agreement is comprised of a Term Loan Facility in an aggregate amount of $170,000,000 and a Revolving Credit Facility in an aggregate amount of $100,000,000. Amounts available under the Revolving Credit Facility are reduced by certain of the letters of credit issued to secure the industrial revenue bonds. Remaining availability under the Agreement approximated $17 million at December 30, 2001. The Agreement expires on December 31, 2005.
Interest on borrowings under the Agreement is based, at the Company's option, on the Base Rate or Eurodollar Rate plus various percentages, depending upon leverage, all as defined. The interest rate for borrowings under the Agreement was 6.58% and 8.64% as of December 30, 2001 and December 31, 2000, respectively.
The Agreement contains various covenants, including a debt to capital ratio, a minimum interest coverage and a fixed charge coverage ratio with which the Company is required to remain in compliance. The Agreement also contains restrictions pertaining to distributions of cash to partners and additional indebtedness. The Company may make distributions of cash to partners equal to 50% of the Excess Cash Flow, as defined in the Agreement, as long as no events of default have occurred and the Company maintains a specified consolidated leverage ratio.
The Company's Industrial Revenue Bonds bear interest at variable rates ranging from 3.91% to 4.14% at December 30, 2001 and from 5.05% to 6.16% at December 31, 2000. Interest rates on the bonds are reset periodically (daily basis or weekly basis). At such reset dates, the bondholders may require the Company to redeem the Bonds. The Bonds are secured by letters of credit provided by banks in connection with the Agreement which require the banks to purchase any Bonds presented by the bondholders and provide financing for a period of at least one year, subject to ongoing compliance with the various covenants mentioned above.
5. ACQUISITION
On November 10, 1999, the Company acquired certain assets and assumed certain liabilities of a Smurfit Newsprint Corporation newsprint mill in Newberg, Oregon (the "Newberg Mill"). The Company accounted for the acquisition of the Newberg Mill under the purchase method of accounting and the results of its operations are included in the accompanying consolidated financial statements since the acquisition date.
The allocation of the purchase price and acquisition costs to the assets acquired and liabilities assumed is summarized as follows (in thousands):
Current assets $ 9,927 Property, plant, and equipment 203,560 Goodwill 12,268 Liabilities (14,193) ------------- Net cash paid $211,562 =============
6. EMPLOYEE BENEFIT PLANS
The Company has non-contributory defined benefit plans that cover substantially all employees. These plans include a non-bargaining employee plan with benefits based on years of service and the employee's compensation during his highest consecutive five years of compensation during the last ten years of employment and a bargaining employee plan with benefits based upon years of service. The Company contributes an amount that is not less than the minimum funding nor more than the maximum deductible amount to these plans.
The Company has a supplemental retirement plan for members of management. The Company funds the cost of the plan on a pay-as-you-go basis.
Substantially all employees retiring from the Company on or after attaining age 55 who have rendered at least ten years of service, as defined, after age 44 are entitled to certain postretirement health care and life insurance benefits ("OPEB"). These benefits are subject to deductibles, copayment provisions, and other limitations. The Company may amend or change the plan periodically. Effective January 1, 2002, the plan was amended to limit the maximum annual per capita cost per participant paid by the Company to 150% of the amount the Company provided as of January 1, 2002. Employees joining the Company on or after January 1, 2002, are not eligible to participate in the plan. The actuarially determined expected cost of these benefits is charged to expense during the years that the employees render service and earn the benefits. The Company funds these costs on a pay-as-you-go basis.
All bargaining employees retiring from the Company on or after attaining age 55 who have rendered at least ten years of service after November 10, 1999 are entitled to post-retirement health care up to age 65 and a $5,000 death benefit.
The following table sets forth the funded status and amount recognized for the Company's defined benefit pension, supplemental retirement, and OPEB plans in the consolidated balance sheet at year end (in thousands):
The accumulated benefit obligation and the fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets were $8,498,000 and $669,000, respectively as of December 30, 2001, and $7,447,000 and $0 as of December 31, 2000.
Pension plan assets consist of a combination of short-term investments with financial institutions, equity investments, and U.S. government treasury bonds.
The following table sets forth the actuarial assumptions used in determining the actuarial present value of the projected benefit obligations:
The Company's pension and OPEB costs, contributions and benefits paid for each year are set forth in the following table (in thousands):
For the OPEB plan, a one percentage point increase in the assumed health care cost trend rate would have increased the Accumulated Projected Benefit Obligation (APBO) by $397,000 at December 30, 2001 and increased the aggregate service and interest cost components of postretirement benefit expense for 2001 by $265,000. A one percentage point decrease in the assumed health care cost trend rate would have decreased the APBO by $386,000 at December 30, 2001 and decreased the aggregate service and interest cost components of postretirement benefit expense for 2001 by $223,000.
The Company has a deferred compensation plan for members of management. At December 30, 2001 and December 31, 2000, the accrued liability for the future benefits under the plan was $1,784,000 and $1,184,000, respectively. Benefits expense for the plan totaled $976,000, $421,000, and $533,000 in 2001, 2000, and 1999, respectively.
The Company has a voluntary thrift plan for non-bargaining employees under which the Company will match 50% of employee contributions (which are limited for employer matching purposes to a maximum of 6% of annual salary). The Company's thrift plan expense totaled $1,174,000, $1,139,000 and $786,000 in 2001, 2000 and 1999, respectively. The Company also has a voluntary savings plan for bargaining employees under which the Company will match 50% of employee contributions up to a maximum of $700 in a year.
7. COMMITMENTS AND CONTINGENCIES
The Company leases office and warehouse space and equipment. Total rent expense was approximately $5,792,000, $5,307,000 and $3,689,000 in 2001, 2000 and 1999, respectively. Future minimum lease payments under noncancellable operating leases with initial terms of one year or more consisted of the following at December 30, 2001 (in thousands):
2002 $ 3,996 2003 3,331 2004 3,073 2005 2,564 2006 1,698 Thereafter 5,833 ------------------ Total minimum lease payments $20,495 ==================
In connection with the Newberg Mill acquisition (Note 5), the Company assumed an agreement to purchase a minimum monthly supply of steam. This commitment approximates $114,000 per month through December 31, 2007, subject to a number of conditions and provisions which could increase this amount.
As discussed in Notes 1 and 2, the newsprint business is highly cyclical. In addition, the Company is dependent on energy costs, which can change rapidly and the Company's western U.S. operations may be impacted by regional energy matters.
In December 2000, the Company was notified of a claim against it by Smurfit Newsprint Corporation. The claim alleges that the Company is responsible for certain severance costs due union employees at its Newberg, Oregon Mill as a result of Smurfit's termination of its contract with the union in connection with the Company's November 10, 1999 acquisition (Note 5). No specific assertion of an amount has been claimed by Smurfit; however, the Company believes it could exceed $3 million. The Company believes it has no obligation for such costs and is vigorously defending itself. The Company is currently unable to determine the ultimate outcome of this matter. Accordingly, no amounts were accrued with respect to this matter at December 30, 2001.
The Company and its subsidiaries are involved in various other legal proceedings, which are normal to its business. It is the opinion of management that the aforementioned actions and claims, if determined adversely to the Company, will not have a material impact on the financial condition or operations of the Company taken as a whole.
8. FINANCIAL INSTRUMENTS
The carrying value of financial instruments such as cash and temporary investments, trade and other receivables, trade payables and long-term debt approximate their fair values. All derivative financial instruments are carried at fair value. Fair value is determined based on expected future cash flows, discounted at market interest rates, quotes from financial institutions, and other appropriate valuation methodologies.
The Company enters into certain derivative transactions designed to hedge risks associated with specific assets, liabilities or future transactions. The effectiveness of the derivative as a hedge is based on a high correlation between changes in its value and changes in the value of the underlying hedged item. Ineffectiveness related to the Company's derivative transactions is not material. The Company includes in operating results amounts received or paid when the underlying transaction settles. Derivatives are carried at fair value and are included in prepaid expense, other assets and accrued liabilities on the balance sheet. The Company does not enter into or hold derivatives for trading or speculative purposes.
During 2001, the Company entered into a natural gas purchase and sales agreement to fix the price of a portion of its natural gas purchases at $1.89 per thousand cubic feet ("Mcf"). At December 30, 2001 this agreement had a notional amount of 534,000 Mcf through its expiration in October 2005. The net cash to be paid or received under the agreement is accrued and recognized as an adjustment to cost of sales. In the event of early termination of the agreement, any resulting gain or loss would be deferred and amortized as an adjustment to cost of sales over the remaining term of the agreement. The agreement is collateralized by certain natural gas reserves.
During 2000, the Company entered into interest rate swap agreements to reduce the impact of changes in interest rates on a portion of its floating rate debt. The interest agreements are contracts to exchange variable rate for fixed rate interest payments periodically over the life of the agreements based upon the underlying notional amounts of the contracts. The net cash paid or received on these agreements is accrued and recognized as an adjustment to interest expense. In the event of early termination of interest rate swap agreements, any resulting gain or loss would be deferred and amortized as an adjustment to interest expense related to the designated debt obligation over the remaining term of the original interest rate swap agreements. In the event of early extinguishment of a designated debt obligation, any realized or unrealized gain or loss from the associated swap would be recognized in income at the time of extinguishment. As of December 30, 2001, the Company had interest rate swap agreements with notional amounts aggregating $72,500,000 for which it paid a fixed interest rate of 7%. The swaps expire on March 31, 2002.
During 2000, the Company entered into a newsprint swap agreement to fix the market price of a portion of its newsprint sales at $580 per metric ton. At December 31, 2001 this agreement had a notional amount of 5,000 metric tons of newsprint per month through its expiration date on March 31, 2003. The net cash to be paid or received under the agreement is accrued and recognized as an adjustment to net sales. The swap was terminated on January 2, 2002 for $6,604,000. The resulting gain will be deferred and amortized as an adjustment to net sales over the remaining term of the agreement.
The net unrealized gain on derivative instruments recorded in other comprehensive income amounted to $6,324,000 at December 30, 2001, as follows (in thousands).
Remaining Estimated Cost Fair Value Gain (Loss) ---------------------------------------------- Natural gas purchase and sales agreement $1,009 $1,645 $ 636 Interest rate swaps - (916) (916) Newsprint swap - 6,604 6,604 ---------------------------------------------- Total $1,009 $7,333 $6,324 ==============================================
9. OTHER TRANSACTIONS WITH PARTNERS
The Company has a license agreement (amended and restated in November 1987 and expiring in 2002) with Media General, Inc. and Garden State Paper Company, Inc. (a former wholly owned subsidiary of Media General, Inc.) to utilize a de-inking process. The Company must pay a license fee, computed quarterly, equal to 2% of operating profits, as defined, multiplied by the ratio of the tonnage of old newspapers used to manufacture the product to the total tonnage of old newspapers and other fibrous material or substitute used during that quarter. Such fees amounted to $1,197,000, $717,000 and $529,000 in 2001, 2000 and 1999, respectively.
SP NEWSPRINT CO. SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FISCAL YEARS ENDED DECEMBER 30, 2001, DECEMBER 31, 2000, AND DECEMBER 26, 1999
(In thousands)
INDEX TO EXHIBITS
Exhibit Number Description
2.1 Agreement and Plan of Merger dated July 19, 1996, by and among Media General, Inc., MG Acquisitions, Inc., and Park Acquisitions, Inc., incorporated by reference to Exhibit 2.1 of Form 8-K dated January 7, 1997.
2.2 First Amendment to Agreement and Plan of Merger dated as of January 7, 1997, by and among Media General, Inc., MG Acquisitions, Inc., and Park Acquisitions, Inc., incorporated by reference to Exhibit 2.2 of Form 8-K dated January 7, 1997.
2.3 Plan and Agreement of Merger, dated December 8, 1999, by and among Media General, Inc., Media General Communications, Inc., Media General Broadcasting of South Carolina, Inc., Spartan Communications, Inc., and the Principal Shareholders, incorporated by reference to Exhibit 2.1 of Form 8-K dated March 27, 2000.
3 (i) The Amended and Restated Articles of Incorporation of Media General, Inc., incorporated by reference to Exhibit 3.1 of Form 10-K for the fiscal year ended December 31, 1989.
3 (ii) Bylaws of Media General, Inc., amended and restated as of November 7, 2001 incorporated by reference to Exhibit 3 (ii) of Form 10-Q for the period ended September 30, 2001.
10.1 Form of Option granted under the 1976 Non-Qualified Stock Option Plan, incorporated by reference to Exhibit 2.2 of Registration Statement 2-56905.
10.2 Additional Form of Option to be granted under the 1976 Non-Qualified Stock Option Plan, incorporated by reference to Exhibit 2 to Post-Effective Amendment No. 3 Registration Statement 2-56905.
10.3 Addendum dated January 1984, to Form of Option granted under the 1976 Non-Qualified Stock Option Plan, incorporated by reference to Exhibit 10.13 of Form 10-K for the fiscal year ended December 31, 1983.
10.4 Addendum dated June 19, 1992, to Form of Option granted under the 1976 Non-Qualified Stock Option Plan, incorporated by reference to Exhibit 10.15 of Form 10-K for the fiscal year ended December 27, 1992.
10.5 The Media General, Inc., Amended and Restated Restricted Stock Plan, dated January 31, 1996, incorporated by reference to Exhibit 10.10 of Form 10-K for the fiscal year ended December 31, 1995.
10.6 Addendum dated June 19, 1992, to Form of Option granted under the 1987 Non-Qualified Stock Option Plan, incorporated by reference to Exhibit 10.20 of Form 10-K for the fiscal year ended December 27, 1992.
10.7 Media General, Inc., Executive Death Benefit Plan effective January 1, 1991, incorporated by reference to Exhibit 10.17 of Form 10-K for the fiscal year ended December 29, 1991.
10.8 Amendment to the Media General, Inc., Executive Death Benefit Plan dated July 24, 1991, incorporated by reference to Exhibit 10.18 of Form 10-K for the fiscal year ended December 29, 1991.
10.9 Shareholders Agreement, dated May 28, 1987, between Mary Tennant Bryan, Florence Bryan Wisner, J. Stewart Bryan III, and as trustees under D. Tennant Bryan Media Trust, and Media General, Inc., D. Tennant Bryan and J. Stewart Bryan III, incorporated by reference to Exhibit 10.50 of Form 10-K for the fiscal year ended December 31, 1987.
10.10 Media General, Inc., Supplemental 401(K) Plan, amended and restated as of January 1, 2001, incorporated by reference to Exhibit 10.10 of Form 10-K for the fiscal year ended December 31, 2000.
10.11 Media General, Inc., Executive Supplemental Retirement Plan, amended, and restated as of April 23, 1999, incorporated by reference to Exhibit 10 of Form 10-Q for the period ended June 27, 1999.
10.12 Deferred Income Plan for Selected Key Executives of Media General, Inc., and form of Deferred Compensation Agreement thereunder dated as of December 1, 1984, incorporated by reference to Exhibit 10.29 of Form 10-K for the fiscal year ended December 31, 1989.
10.13 Media General, Inc., Management Performance Award Program, adopted November 16, 1990, and effective January 1, 1991, incorporated by reference to Exhibit 10.35 of Form 10-K for the fiscal year ended December 29, 1991.
10.14 Media General, Inc., Deferred Compensation Plan, amended and restated as of January 1, 1999, incorporated by reference to Exhibit 4.3 of Registration Statement 333-69527.
10.15 Media General, Inc., ERISA Excess Benefits Plan, amended and restated as of November 17, 1994, incorporated by reference to Exhibit 10.33 of Form 10-K for the fiscal year ended December 25, 1994.
10.16 Media General, Inc., 1995 Long-Term Incentive Plan, amended and restated as of May 18, 2001, incorporated by reference to Appendix B of the Proxy Statement dated April 2, 2001.
10.17 Media General, Inc., 1996 Employee Non-Qualified Stock Option Plan, adopted as of January 30, 1996, incorporated by reference to Exhibit 10.20 of Form 10-K for the fiscal year ended December 29, 1996.
10.18 Media General, Inc., 1997 Employee Restricted Stock Plan, adopted as of May 16, 1997, incorporated by reference to Exhibit 10.21 of Form 10-K for the fiscal year ended December 29, 1996.
10.19 Media General, Inc., Directors' Deferred Compensation Plan, adopted as of May 16, 1997, incorporated by reference to Exhibit 10.22 of Form 10-K for the fiscal year ended December 29, 1996.
10.20 Amended and Restated Partnership Agreement, dated November 1, 1987, by and among Virginia Paper Manufacturing Corp., KR Newsprint Company, Inc., and CEI Newsprint, Inc., incorporated by reference to Exhibit 10.31 of Form 10-K for the fiscal year ended December 31, 1987.
10.21 Amended and Restated License Agreement, dated November 1, 1987, by and among Media General, Inc., Garden State Paper Company, Inc., and Southeast Paper Manufacturing Co., incorporated by reference to Exhibit 10.32 of Form 10-K for the fiscal year ended December 31, 1987.
10.22 Amended and Restated Umbrella Agreement, dated November 1, 1987, by and among Media General, Inc., Knight - Ridder, Inc., and Cox Enterprises, Inc., incorporated by reference to Exhibit 10.34 of Form 10-K for the fiscal year ended December 31, 1987.
10.23 Amended Newsprint Purchase Contract, dated November 1, 1987, by and among Southeast Paper Manufacturing Co., Media General, Inc., Knight-Ridder, Inc., and Cox Enterprises, Inc., incorporated by reference to Exhibit 10.35 of Form 10-K for the fiscal year ended December 31, 1987.
10.24 Television affiliation letter agreement, dated April 16, 2001, between Media General Broadcast Group and the NBC Television Network.
10.25 Second Amended and Restated Stock and Warrant Purchase and Shareholders' Agreement dated May 20, 1994, by and among Media General, Inc., Affiliated Newspapers Investments, Inc., and Denver Newspapers, Inc., incorporated by reference to Exhibit 2 of Form 8-K dated September 28, 1994.
10.26 Asset Purchase Agreement dated February 13, 1997, by and among Media General Newspapers, Inc., and Newspaper Holdings, Inc., incorporated by reference to Exhibit 10.36 of Form 10-K dated March 27, 1997.
10.27 Credit Agreement, dated June 29, 2001, among Media General, Inc., and various lenders, incorporated by reference to Exhibit 10.1 of Form 10-Q for the period ended July 1, 2001.
13 Media General, Inc., Annual Report to Stockholders for the fiscal year ended December 30, 2001.
21 List of subsidiaries of the registrant.
23.1 Consent of Ernst & Young LLP, Independent Auditors, Richmond.
23.2 Consent of Ernst & Young LLP, Independent Auditors, Atlanta.
Note: Exhibits 10.1 - 10.19 are management contracts or compensatory plans, contracts or arrangements.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
MEDIA GENERAL, INC.
Date: March 27, 2002 /s/ Stewart Bryan III ------------------------------------ J. Stewart Bryan III, Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Marshall N. Morton Vice Chairman, Chief Financial March 27, 2002 - ---------------------------- Officer and Director Marshall N. Morton
/s/ Stephen Y. Dickinson Controller March 27, 2002 - ---------------------------- Stephen Y. Dickinson
/s/ Charles A. Davis Director March 27, 2002 - ---------------------------- Charles A. Davis
/s/ Robert V. Hatcher, Jr. Director March 27, 2002 - ---------------------------- Robert V. Hatcher, Jr.
/s/ John G. Medlin, Jr. Director March 27, 2002 - ---------------------------- John G. Medlin, Jr.
/s/ Thompson L. Rankin Director March 27, 2002 - ---------------------------- Thompson L. Rankin
/s/ Wyndham Robertson Director March 27, 2002 - ---------------------------- Wyndham Robertson
/s/ Henry L. Valentine, II Director March 27, 2002 - ---------------------------- Henry L. Valentine, II
/s/ Walter R. Williams Director March 27, 2002 - ---------------------------- Walter E. Williams