36 NOTE 2 Acquisitions, exchanges and dispositions Revenue recognition:  The company’s revenues include amounts charged to customers for space purchased in the  company’s newspapers, ads placed on its Internet Web sites and for advertising broadcast on the company’s television stations. Newspaper revenues also include circulation revenues for news- papers purchased by readers or distributors. Advertising revenues are recognized, net of agency commissions, in the period when advertising is printed, placed on Web sites or broadcast, and  circulation revenues are recognized when purchased newspapers are distributed. Amounts received from customers in advance of revenue recognition are deferred as liabilities.  Retirement plans:  Pension costs under the company’s  retirement plans are actuarially computed. The company’s policy is to fund costs accrued under its qualified pension plans. Postretirement benefits other than pensions:  The company recognizes the cost of postretirement medical and life insurance benefits on an accrual basis over the working lives of employees expected to receive such benefits.  Income taxes: The company accounts for certain income and expense items differently for financial reporting purposes than for income tax reporting purposes. Deferred income taxes are provided in recognition of these temporary differences. Per share amounts:  The company reports earnings per share on two bases, basic and diluted. All basic income per share amounts are based on the weighted average number of common shares outstanding during the year. The calculation of diluted earnings per share also considers the assumed dilution from the exercise of stock options and from stock incentive rights. Foreign currency translation:  The income statement of Newsquest operations has been translated to U.S. dollars using the average currency exchange rates in effect during the relevant period. Newsquest’s balance sheet has been translated using the currency exchange rate as of the end of the accounting period. The impact of currency exchange rate changes on the translation of Newsquest’s balance sheet is included in comprehensive income, net of tax, and is classified as accumulated other  comprehensive income (loss) in shareholders’ equity. Discontinued operations:  In connection with the sale of the  cable business in early fiscal 2000, the cable operating results are presented in the consolidated statements of income and related discussions as discontinued operations. New accounting pronouncements: Effective Jan. 1, 2001, the company adopted Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” as amended. The adoption of this standard did not have any effect on the company’s results of operations or financial position.  On July 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 141 (SFAS No. 141), “Business Combinations.” In accordance with SFAS No. 141, the company ceased amortizing goodwill for acquisitions after July 1, 2001. In July 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 142 (SFAS No. 142), “Goodwill and Other Intangible Assets.” SFAS No. 142 addresses financial accounting and reporting for goodwill and other intangible assets subsequent to their acquisi- tion. SFAS No. 142 provides that goodwill and intangible assets which have indefinite useful lives will not be amortized but rather will be tested at least annually for impairment. The company adopted SFAS No. 142 effective Dec. 31, 2001, the first day of its fiscal year 2002. Upon adoption, the company ceased amor- tizing goodwill. Based on the current levels of goodwill, this accounting change will increase net income by approximately $216 million annually ($.80 per share based on average diluted shares outstanding in 2001) beginning in 2002. In August 2001, the FASB issued Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” The company does not believe that the adoption of the statement will have a material impact on its financial position or results of operations. 2001:  During 2001, the company purchased the remaining 36% interest in WKYC-TV, Cleveland, that it did not previously own. Additionally, the company purchased several small non-daily  publications in the U.S. and in the U.K. In connection with the acquisition of several non-daily publications in the U.K. (“Dimbleby”), the company issued loan notes totaling approxi- mately 12.7 million British pounds (U.S. $18.3 million) to the shareholders of Dimbleby. These acquisitions, which had an  aggregate purchase price of approximately $186 million, were accounted for under the purchase method of accounting. The company contributed its Marietta (Ohio) Times newspaper to the Gannett Foundation in May 2001. The Gannett Foundation is a not-for-profit, private foundation that makes charitable awards in the communities in which Gannett operates its newspapers and television stations. The company sold its daily newspaper in Lansdale, Pa., in September 2001. These business acquisitions  and dispositions did not materially affect the company’s financial position or results of operations. 2000: In June 2000, Gannett acquired the entire share  capital of News Communications & Media plc (“Newscom”) for approximately 444 million British pounds (U.S. $702 million). Gannett also financed the repayment of Newscom’s existing debt. With the Newscom acquisition, the company now publish- es more than 300 titles in the United Kingdom, including 15 daily newspapers. On July 21, 2000, the company concluded the acquisition  of 19 daily newspapers as well as numerous weekly and niche publications from Thomson Newspapers Inc., for an aggregate purchase price of $1.036 billion. The company acquired eight daily newspapers in Wisconsin, eight daily newspapers in central Ohio, and single daily newspapers in Lafayette, La.; Salisbury, Md.; and St. George, Utah (collectively, “Thomson”). The company completed its acquisition of Central Newspapers, Inc. (“Central”) on Aug. 1, 2000, for an approxi- mate cash purchase price of $2.6 billion. The company also retired Central’s existing debt of approximately $206 million. Central’s properties include The Arizona Republic; The Indianapolis Star; three other dailies in Indiana and one daily in Louisiana; a direct marketing business; CNI Ventures, an Internet and technology investment management group; and other related media and information businesses.