Doug McCorkindale presented Gannett's financial results and outlook at the annual Media and Entertainment Analysts of New York meeting. He reported that February advertising revenues increased 6% overall, with local up 7%, classified up 6%, and national up 2%. However, broadcasting revenues declined 4% due to tough comparisons from the prior year's Super Bowl and political advertising. McCorkindale expressed optimism that Gannett can achieve competitive top-line growth despite difficult comparisons. Gary Watson and Craig Moon then provided more details on the successes of Gannett's newspaper and USA TODAY divisions.

1. Gannett Lunch Presentation at
Media and Entertainment Analysts of New York
March 15, 2005
(Edited for clarification)
Opening
Doug Arthur:
I am a big believer in starting these meetings quickly and moving them along. So on
behalf of the Media and Entertainment Analysts Society of New York, I am Doug
Arthur. And welcome to the annual Gannett lunch.
And with that, I am pleased to introduce the Chairman, President, and Chief Executive
Officer of Gannett, Doug McCorkindale.
Doug McCorkindale:
Thank you, Doug.
Good afternoon and welcome to our annual presentation at this venue. Some of us
were discussing earlier that we use to do this downtown when there was one great big
Wall Street analyst meeting. I am going back to the Seventies. Most of you were not
even in this business maybe not even alive when I started. I had hair that was a lot
darker too, and I had some. Anyway, as promised, we have avoided St. Patrick’s Day
this year. So you all got here.
Our format today will be similar to previous meetings. I’ll begin with a general
overview, touch on February’s results and mention a couple of other areas of interest.
Then Gary Watson, President of the community Newspaper Division at Gannett, will
update you on our domestic newspapers in his group and discuss some of the
continuing successes we are having with our non-daily and online efforts. Craig
Dubow will then follow, the President and CEO of Gannett Broadcasting. He’ll talk, I
hope positively, about the television business. But obviously he has to overcome the
challenge of the record level of revenue we had with the Olympics and politics in 2004.
Craig will probably be telling you what is going to be happening in 2006. And Craig
Moon will then follow-up with USA TODAY and talk about its progress and, in
particular, the very good successes that USA TODAY online is having.
Please note over here on my right, we have the safe harbor provision. Hope you read it.
Even more so I hope you understand it. The lawyers will be very happy.
Turning to where we were at the earnings conference call at the end of January, I think I
noted that we expect 2005 to be similar in many respects to 2004. Obviously we think it
will be better than 2004, barring some external events – hopefully none negative. We

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expect the economy and ad demand to still be a little uneven as it was in ‘04. We’ve
also noted that we face some headwinds in 2005, particularly the absence of Olympics
and political advertising that I just mentioned. And we should have a little less benefit
from currency. We will also obviously have to overcoming our own pretty good
comparisons from last year.
But we are optimistic and confident that, despite the difficult comparisons, we can
achieve top line results that will be more than competitive within our industry. We got
off to slow start in January, as Newsquest results in particular were negatively impacted
by the calendar shift in the week right after Christmas. In contrast, the results in January
were pretty good for our domestic community newspapers. That group’s pro forma ad
revenues increased almost 7 percent.
We reported February ad results yesterday. I assume all of you have seen it. As you
know, pro forma newspaper advertising revenue was up 6 percent after a gain of about
5 percent in January. Local advertising advanced over 7 percent; classified increased
slightly over 6 percent and national was up 2 percent. Again, we expect these results
will be among the best in the industry. The strength of the pound did have a small,
small positive influence on our results although not nearly the same sort of impact we
had seen last year. In fact, the pro forma newspaper segment results for February
would have been virtually the same on a constant currency basis.
Our results in February reflect the value of our economic and geographic diversity and
the mix that we have of local and national brands. Pro forma ad revenues for our
domestic community newspapers increased approximately 6 percent, driven by local
advertising and our non-daily and online initiatives. And at USA TODAY revenues
were up 9 percent in February. Craig will give you some more details on that in a
moment.
As I mentioned, in the UK at Newsquest, after the slow start in January, we did see
some more positive impact or improvement in February. And we are going up against
very strong comparisons in the UK in 2004. Year-to-date, though, our results in the UK
are softer than we projected. Ad revenues in February, in pounds, increased 1 percent
compared to last year’s increase of 8 percent. Year-to-date in the UK, ad revenues,
again in pounds, were down 3 percent.
Also in the down category, pro forma broadcasting revenues were down 4 percent in
February. Television revenues – excluding Captivate – declined approximately 4.5
percent. Local television advertising declined about 1 percent while national was down
almost 13 percent from last year. Again that is the Super Bowl, and the political part of
it. The first quarter of 2005 we face the challenge of replacing $10 million to $11 million
of ad revenue related to the Super Bowl and political that we had in the first quarter of

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2004. But in addition to that, the core television business has softer than we would like
it to be. Particularly, as I was discussing during the cocktail piece in the automobile
category. Craig Dubow will give you some more detail in his remarks.
But, let me bring you up to date on some of the other positive things going on.
We continue to invest in our strategy to increase our reach and coverage in our
domestic markets through non-daily publications. Domestically, the number of non-
dailies publications continues to grow. We are very, very pleased with the revenue
results that we are getting from these publications. Excluding Clipper Magazine, Army
Times and Nursing Spectrum, which are three specialty publications that some of you
know about, we expect revenue from our non-daily publications in the US in 2005 to be
over $375 million. Gary Watson will discuss this and a few of the other successes he is
having in that area in a few moments.
And on the online side, we’re continuing to produce great results. Through February,
online, the growth rate was over 50 percent. That is on the revenue side. Actually, on
the bottom line, it was better than that. And as I was asked again during the cocktails, it
is profitable. We believe the online business is a business not an ego trip. All of
Gannett’s online operations are profitable.
One additional note, as some of you have mentioned, we received regulatory approval
on March 7 to acquire the assets of the Hometown Communications Network, Inc.
Hometown is rather a small transaction which for some reason got a lot of attention in
Washington. It is a community publishing company with newspapers – one daily and
59 weeklies – has a few telephone directories, shoppers and some niche publications in
Michigan, Ohio and Kentucky. This tuck-in acquisition provides a platform for us to
serve the area between Detroit and Lansing with an additional local daily and to
expand our operations in Detroit, Lansing and Cincinnati. The purchase of the weeklies
is a strategic opportunity to better serve readers with targeted local news – and the
advertisers with zoned products. We expect this to close very early in the second
quarter.
Turning to newsprint for a moment, which some of you asked about. During our recent
earnings call, we said newsprint consumption was unlikely to support higher paper
prices. It now appears that several producers agree with that observation and they’ve
pushed back the date for a first quarter price increase from March 1 to April 1. Paper
usage continues to trail year ago levels and buyer and producer inventories climb.
Gannett will not be impacted by a price increase in the first quarter, and as we’ve
previously indicated, we have secured fixed price deals with several of our suppliers
that will carry us through the first half of 2005.

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Let me update you on a few of the operating assumptions that we summarized at the
year end conferences. Although we continue to fine tune these through the year, there
are two that I think you should be aware of. We now expect our tax rate in 2005 to be
approximately 33.5 percent for the year rather than the 34 percent we mentioned earlier.
We expect our interest expense for the first quarter to be closer to $45 million than the
$40 million that some of you have projected in your models.
And finally, remember that last year we recognized a non-monetary gain in the first
quarter in the exchange of our daily newspaper in Gainesville for several newspapers in
Tennessee. That will not appear. We will not have that benefit in the first quarter of
2005.
Finally – as John Kornreich referred to without maybe knowing it – at current levels, we
believe our stock is undervalued and woefully underappreciated, John. So this has been
a strong buying opportunity for us.
John: We are going to take that $85,000 and we are buying a thousand shares of
Gannett and we expect a dividend. (Refers to $85,000 the MEANY group has in its
coffers)
Doug: Ok. Gary you can follow that.
Gary Watson: Thanks Doug and good afternoon.
As several of us discussed during the reception, 2005 is off to an encouraging start at
our domestic newspapers and ancillary publications.
As Doug indicated, with one or two exceptions which I am sure we will talk about,
nearly every revenue category is showing pro forma increases over last year.
Let me start with classified.
Resale real estate, both in print and online, is solid, while developer revenues have been
sluggish. This is simply due to a lack of inventory. They are between cycles in some of
our major development markets. We’ll see that pick up as new projects come online
later in the year.
Automotive, as you all know, is struggling. Year-to-date the revenues, and this is again
across all product lines, is off just under 3 percent from a year ago. It is the domestic
dealers, primarily those up and down the East Coast, that are hurting the worst.

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Employment is strong across all product lines. Through the first two months, it was up
22 percent. Newspaper ROP help wanted revenue is plus 10 percent and online
employment is up 95 percent. I think that online number really says it all about the
continuing success our CareerBuilder partnership.
While I’m on the subject of employment, let me digress just a moment. We’ve seen the
job formation picture improve in our markets just as it has nationally in the last few
months. More than a dozen of our SMAs have added jobs at a rate faster than the
overall U.S. increase. We now have only five markets with fewer people employed than
a year ago.
Four of them are tied to the auto industry, Detroit and Lansing, MI; Greenville, SC; and
Indianapolis. The fifth market is Rochester, NY, the home of Kodak.
Turning to retail, total ROP and preprint revenues – again this includes all products –
are doing well, at least so far, after two months, with a gain of better than 6.5 percent.
Among the key segments: department stores – and when was the last time anybody
said that. Health, telecomm, and home improvement are solidly in plus territory. The
only weak segment we’ve seen is furniture.
Many of you have asked and even speculated about the impact of the Sears-Kmart and
Federated-May mergers. There’s no question most newspapers will take a revenue hit
from one or both of these deals. But it is really difficult to even speculate on the dollar
amount until we see more of the details of the two consolidations on a market-by-
market basis. However, for those who might be inclined to do a Chicken Little
impersonation over the mergers, consider the following: The department store segment,
despite the recovery we have seen in the past several months, is becoming less and less
critical to our success with each passing year. Let me give you an example: In 2001,
department stores generated about 22 percent of retail ad revenues. The current run
rate shows this segment is generating only 18 percent of retail. Now, many of you have
heard me say for the last several years the keystone in our advertising strategy is the
diversification of our base of customers. Which is another way of saying we will not
continue to rely on department stores or any of the other big-space, big revenue
advertisers. We’re also helped by the diversification of our product lines. Retail
revenues in our non-daily products are up 24 percent as we continue to launch and
acquire new publications.
By the way, in the second half of ’04 we added 141 new non-daily and specialty titles.
We’re now at 760 separate publications here in the U.S. Following up on Doug’s
comment, when the non-daily products that are part of our local newspaper portfolios
are combined with the likes of Clipper, the military publications, and our nursing
weeklies, that total revenue run rate currently stands at over $700 million dollars. Just to

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be clear, none of the non-daily data include the soon-to-be closed Hometown
publications. That is all pre-Hometown.
Our ever-growing online business also buffers us from undue harm resulting from the
department store consolidations. Online retail revenue also is up 24 percent and really
is just coming of age as more and more locally based retailers begin to make serious use
of the Web. We now think retail online revenues will exceed $30 million dollars this
year.
Let me put it all in perspective for you.
Department stores contributed about 10 percent of total advertising revenue four years
ago. Today it’s less than 7 percent. And, just to close the loop for online, through two
months total Web-based revenues, the Web sites associated with Newspaper Division
properties have increased 61 percent over ’04. The revenue run rate stands at about
$200 million or more than 6 percent of total ad revenues.
One other statistic may interest those who have expressed the idea that we can grow
revenues through rate increases. As some of you know, I’m not an unabashed
proponent of this premise given the increasing competition in any media market today
and the low inflation rate. However, we are seeing stronger rate yields so far this year
and it’s due primarily to increased color advertising in many of our markets. Our
average revenue per inch of advertising is running more than 3 percent above last year.
Just a couple of closing comments on costs. Through the use of technology and
consolidation of operations and functions, we’ve been quietly reducing our workforce.
As of last month, excluding the two growth areas that are online and non-daily, we’ve
reduced our staffing levels by about 2.5 percent from the same period a year ago. This
has permitted us to hold our core-newspaper payroll increase this year to less than 1.5
percent.
On the subject of newsprint, with newsprint prices still expected to increase either in the
high-single or low-double digits, we’ve also been working to limiting our consumption.
Through February, we are using about 4.5 percent less paper for our newspapers than
in ’04. We’ve done this through better management of waste and returns and some
operational changes. The new generation of presses, such as those installed last year in
Louisville and Honolulu, have smaller page dimensions and therefore use less
newsprint. We will continue to pursue this approach. In fact, in the next week or so we
will announce the purchase of the first Berliner format press in North America. The
Berliner format, which is widely used in Europe, has even smaller page dimensions.
We’ve also reducing the web widths at all of our single-wide press operations and
we’re testing light-weight newsprint at all of our larger locations.

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With that, I will turn it over to Craig Moon.
Craig Moon: Thank you, Gary. Good afternoon.
Right after the Olympics, we experienced a slow down in ad placement which lasted
almost the next five months. In the middle of January, we began to see a change.
Campaigns began to be released. In February, our advertising revenue finished 9%
above 2004 actuals. Our Super Bowl preview and Daytona NASCAR sections broke
revenue records.
There has been a lot of navel gazing about the interest in the Oscars. I’ll have to say the
interest of USA TODAY readers in the event was at record levels. Here’s a recap of
USA TODAY’s results in print: We had our first Oscar preview section, which was
bought out by L’Oreal. On the Web, we totaled 53% more visits and 180% more page
views, to almost seven million page views for that event. In March, we estimate that
our ad revenue looks a lot like February. We expect it to be in the 9% range over the
last year with a lot of activity and a lot of new business in the pipeline. But, as ad
placement bookings become closer to the actual run date it becomes harder to forecast
and it is a bit problematic looking too far ahead.
Our strongest performing segments for the quarter will be: financial, up over 20% and
packaged goods, up about 40%. In financial, our audience size and frequent touches to
the business traveler sell well. The packaged goods segment has benefited from our
selling approach, which has really narrowed our categories and selling focus as we have
targeted advertisers who have shown a likelihood to advertise in print.
Travel continues to improve with additional spending from the airlines and our hotel
partners. We expect the first quarter in the 8% to 10% gain range.
Technology continues to improve. We estimate March will be up 40% because of a buy
with Microsoft, which will now anchor our newly re-designed and improved market
trends page on Mondays. HP just kicked off a new consumer campaign on March 8th.
Automotive has been soft with losses from a few imports operations. We estimate
revenue down in the 2% to 4% range when we compare to last year for first quarter.
And we remain cautious looking forward with that segment as a lot of the mass media
buys appear to be going to more targeted media, including our own website site.
In our telecommunications category, performance has experienced large decreases due
to the telecom mergers. Our largest loss was from AT&T Wireless, which last year

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fueled a very large first quarter, almost 55% at segment. This category is estimated at
2% under last year.
In January, for the second consecutive year, we raised our advertising rates 8% and
continue to see little or no pushback in the marketplace. We continue to be the best
value in the print media world. Obviously, this pricing strategy will make a strong
contribution going forward.
In terms of circulation, we expect our ABC Publisher’s Statement for six months ending
March 31st to show a year-over-year gain. That’s especially impressive after realizing
we raised our single copy price to 75 cents on September 7th. These results are a
testament to USA TODAY’s brand strength in our key audience segments. They are
business travelers, sports fans and time-stressed but information-hungry consumers.
On April 17th, our website, USATODAY.com, will be ten years old. The site has
matured and has been instrumental in growing our national footprint. In the Fall MIR
2004 study, we reached 6.2 million users a day across print and online. That’s a 30%
increase from the days with unduplicated reach – from the print-only days ten years
ago. So, as we have grown audience, we have also grown affluence. And we have been
able to grow faster than the U.S. and our competitors. In 1995, 18% of our audience had
a household income of more than $100,000. Today, it is over 30%. That’s a strong
advertising story.
Dotcom’s 2004 revenue was up 48% and our Nielsen//NetRating audience growth
increased 55% over the prior year. It’s interesting that almost 50% of the revenue
growth is coming from new products, e.g. geo/behavioral targeting, travel specials and
deals, syndication and new classified partners. In January, revenue year-to-year online
was up by 45% and, in February, revenue grew by 44%. We are seeing growth in
almost every segment, but our entertainment, financial, tech and telecommunication are
the fastest growing.
In 2005, we expect to improve our Life offerings across all platforms, which we believe
will aggressively build new audience for us. We intend to move our best content across
all platforms including mobile. As the one true national newspaper, we remain a
progressive, entertaining way to be in the know. In fact, in 2005, I think you will hear
consumers say more often: “I saw it in USA TODAY” as we publish unique, compelling
information and drive the nation’s conversations.
With that, Craig Dubow.
Craig Dubow: Thank you Craig and good afternoon. It is a pleasure to be with all of
you again.

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When we met last year, I told you that our strategy for 2004 was to maximize big
events, certainly to exploit every business development opportunity that we could. And
looking back on 2004, we had great a success with this strategy. Gannett Broadcasting
achieved some very strong results in political advertising as well as with the Olympics
on our NBC stations. And with the Super Bowl and the enhanced CBS Prime schedule,
we have also had continued success there, as well as our newly developed business
area.
Obviously, we will not have many of these “Big Event” opportunities this year. With
the loss of political billing in particular, we will have some tough year over year
comparisons. This is not to say that we won’t have other opportunities. Our stations
will take full advantage of every opportunity and create some new ones as we go along.
With that said, we are still experiencing softness in our major category pacing vs. 1Q
’04. On an overall basis, our pacing for 1Q 05 and March 05, is off in the mid single
digits over last year.
Three of our top 5 categories, including #1 auto and #2 retail and #3 restaurants, are all
at a negative pace against last year.
Here is where things stand right now for our top 5 categories, on a composite national
and local basis against 1Q ’04. These are as of 3/10, last Thursday, when we did our
gross orders.
Auto is off in the low single digits.
1.
Retail is also off in the low single digits
2.
Restaurants are down in the mid single digits
3.
Services are positive in the mid single digits.
4.
Packaged goods are also positive, in the mid double digits.
5.
For auto, we have had a stronger performance on the national side vs. our local. The
pacing just turned slightly positive on a national basis, in the low single digits. Local
billing is at a negative pace vs. 1Q ’04 and it is off in the high single digits. The auto
industry’s drop in sales in January was troubling, as this month is generally an
indicator of how the year will go, from a sales standpoint. The reports on February sales
for GM and Ford were also disappointing, which also caused us more concern. We have
seen more positive stories with foreign auto and truck sales. The severe weather, which
I hope is behind us, – am sure you all are – may have had some pretty significant
impacts on our auto sales as we look forward.
On the retail side, January and February results were strong and better than expected in
the retail industry. Despite the fact that forecasters are encouraged by the recent reports

10. Page 10
which show stronger than expected growth, we have yet to see this turn into an
enhanced revenue opportunity on the television side. Our pace is still negative. We are
still hoping that an early Easter (March 27th) would have a positive impact on pacing for
the end of 1Q.
Turning to new business, despite the challenges with core, we still have great
opportunities in 2005. Business development is one of our most important revenue-
generating priorities, especially as the competitive media landscape continues to
change. Our results have been impressive. In 2004, our stations had double-digit
increases in newly developed business over their 2003 results. This record growth in
2004 came on top of strong Olympic and political billing, which makes it doubly
impressive, and demonstrates the impact of our stations’ commitment in this area.
For 2005, we are projecting business development revenue to show again double digit
growth.
Our new business efforts also have an online element, and we are making strides to
continue that growth as well.
Let’s talk for a second about the preliminary sweeps results. We have not received the
rating books as yet for the sweep, But we expect very strong demographic performance
across our key time periods when the books do come in. Here is how we performed on
a household basis, for our 13 metered markets that we do have.
In the morning news: in nine out of 13 markets, we are ranked #1 or #2, and we are
ranked #1 in six of our markets.
In late news: We are #1 or #2 in each of our metered markets, and we are ranked #1 in
seven of the 13.
Captivate, switching to that for a moment. We see Captivate as another great
opportunity in ‘05, and we are pleased with their performance track, making progress
in signing up several new major accounts. We have also made some key format changes
which we believe will translate into sales gains. The key change is extending the length
of ads from 10 to 15 seconds, consistent with the televison standard. This change makes
it easier for TV Advertisers to place their ads on Captivate screens. We’ve also
redesigned the graphic layout of the screens to make it easier to repurpose print ads.
We are making progress with joint selling efforts between our television stations in
Atlanta and Denver and Captivate, with the opportunity to place schedules on our
stations and on Captivate screens.

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Doug, let me turn it back over to you.
Doug McCorkindale: So what does all of this translate into for a number in the quarter?
I know that there is very little interest in that but I will mention it anyway. Looking at
your estimates most of you seem to be in the $1.04 to $1.06 range for the first quarter,
and we are comfortable with those estimates. However, as those of you who have been
around here a long time know, 45 percent of the first quarter comes in in March. So it is
all going to depend on how we do in the month of March. Numbers are coming in
pretty good, as you’ve heard on the print side in the U.S. and they’re soft in
broadcasting and a little softer than we had expected in the UK.
The details for 2004… where are they? They are out back. We have the annual report
and the proxy statement. Most of you want to know about ownership of the stock by
the officers. Gannett has a guideline for the top 5 officers. We must own Gannett 5
times the salary range mid-point and for other executive officers it is 2 times. In
addition to that, 25 percent of the bonuses are paid in Gannett stock. If you read the
proxy statement, you know I have a heck of a lot of money tied up in Gannett.
Gracia, why don’t you come up here to the podium in case we have some serious
financial questions.
Question and Answer Session
Doug McCorkindale: Bill?
Bill: Thanks Doug. Three simple questions:
One, on the fundamentals: If newspaper advertising continues to get better here, if auto
helps you out in the second half, or whatever it is, retail and help wanted continue to
get better, what is the incremental margin? If you do, lets say, 6% to 7 % newspaper ad
growth rather than mid single digits, how much of that incremental can you bring to
the bottom line? That is one question.
Two: Can you describe how big Captivate is for us now?
And three, maybe this is for Craig: On technology advertising. Just wondering if you
are taking share? In that sector you know, Wall Street Journal continues to see really
big downturns and your number is going completely the other way. Just wondering if
you are taking shares from them or somebody else?
Doug McCorkindale: Well, I will let Craig start. We have had this report by Mr. Arthur
here indicating that there is going to be a great deal of technology and telecom. So…it is
not in any of these numbers yet but when. OK? … Mr. Moon, talk about technology
and then Craig Dubow talk a little bit about Captivate. And then Gary, you can indicate

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how you are going to get profit margins up, even though they are the highest in the
industry.
Craig Moon: For us, in technology, our publication is considered a place where
consumer advertising is to be, not necessarily B2B. We try to grow B2B all the time so
whatever the Wall Street Journal is seeing has little to do with what we are actually
doing in the marketplace. You know we have a set of competitors within that segment,
being mostly magazine competitors. We believe that in the first quarter and the year
we will grow share along with revenue.
Doug McCorkindale: Do you want to tell them how big Captivate is? It is going to be
bigger. What do you have 5,000 elevators.
Craig Dubow: Yes, about 5,500 right now.
Doug: So he is below expectations. He should be up about 8,000 or 9,000. Right?
Craig Dubow: Well we’re going to be up in the mid-7,000 share as we get into the end
of the year. We hope. I would probably say to you the way to look at it right now is
about like a mid-sized television station. Our expectations are that it would become a
much larger participant as we move into ’06 - ’07. We’ve had some nice growth; some
great opportunity with a number of new accounts and we are happy with the progress.
Doug McCorkindale: And Bill, you know a mid-sized television station in Gannett
should have about a 45 percent cash flow margin so I am assuming Craig that we will
get Captivate … Just kidding for those of you who are listening. There are smiles… It
has a way to go, but it has really good potential.
And Gary, what about bringing the money to the bottom line?
Gary Watson: Can I talk about telecom instead? (Chuckles)
You know, Bill, there’s no simple way to answer that. The incremental margin on an
additional preprint is extremely high. Our distribution center cost is about 18% of
revenue. So when that 30th pre-print comes in the door – the last one in the door – it
almost all falls right to the bottom line. In ROP, it is different. You have got some
variable costs, newsprint commissions. It is still a good business, but it is not as high an
incremental margin. Our sales costs run in the 7% to 8% of revenue. So we do pretty
well. Newsprint is what newsprint is. You know you can only go up or down in 2-4
page increments, so if you pull in that one extra full page ad you may burn through a
little newsprint to get it done. Now, with the new generation of presses, you have a
little greater flexibility, which we are seeing. That is one of the reasons we are able to

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control our consumption. Boy, I hope you are right? Six percent 7%-8%, you would like
to see in retail, ROP and pre-print? Yeah, there are some uncertainties out there right
now as we go through the rest of the year. One is the department store merger I alluded
to. But everything else looks pretty solid going into this year. And, Doug, we are up
about 24% in telecom in the first two periods. So we are seeing exactly what you were
alluding too.
New Questioner: Doug, on the used car classified? I understand, used car sales are the
strongest in a couple of years. Should that translate into better used car ads as the year
moves along? Is there some kind of correlation there?
Gary Watson: There are two kinds of used car dealers: There are the franchised
dealers, these are the new car dealers and the independent dealers, the dirt lot dealers.
We have never done very well with the independent dealer. So we have started some
auto publications, news products, in about a dozen of our markets. And they are really
targeted right at the independent dealers. We have had some good success with it.
Places like Fort Collins, CO, Nashville. Detroit is doing well with its auto publications.
That is a piece of the business that has long been held by Autotrader, and some of the
other shopper-specific type publications. But with our relationships with the franchise
dealers, who also see used cars as a bigger piece of their business, we’re able to leverage
some of that. We are doing it primarily through the niche products; some liners, but
predominately through the niche products.
Doug McCorkindale: John?
John Kornreich: I have two question for Gary and one for you Doug.
Gary, I have been following this company for a mere 28 years. And these are the
weakest circulation figures that I have ever seen in the company. Usually it is up a half
percent, down a half percent. Taking out USA TODAY, the figures I saw in your
monthly statistics were down 3% daily and down 3% Sunday. That is starting to get
really meaningful, where it would impact ad rates. It looks to me like it actually is
impacting ad rates. In December, you said that you are looking for 3% to 5 % increases
in ad rates. But you also said that the rate yield is only up 3% and that’s with a better
mix. So if you are going for 3%-5% and only getting three, that with a richer color mix,
that means there must be some push backs with advertisers saying you can’t ask for five
when the circulation is down three.
The question for Doug is: I think Michael Eisner said that other day when asked…. I
am not seeking to retain the Chairmanship. Then somebody said to him there, but what
if you are asked? So that same question to you.

14. Page 14
Doug McCorkindale: Go ahead Gary.
(Laughing)
Gary: John, was there a question with what you said?
John: Are you getting push back with weak circulation?
Gary: No. No. It is a function of our customers with the current inflation rate and the
pressure on their pricing they are putting the same pressure on us. You are not going to
see it in rates, John. You are going to see it in pre-print revenue. You are going to face
some losses. Let me talk about those losses. There are two things that you have got to
keep in mind. Remember, when the Do Not Call list came in to effect in the fall of ’03,
we said this was a sea change for our business and we were going to have to restructure
how we go about selling circulation. The larger the market the more difficult this has
been and that is true right up to Phoenix. We are getting that under control. We are
starting to see better results in Phoenix, Nashville and other places. Second, we have
not attempted to mask that softness as a result of lower sales through increased third
party, NIE (Newspapers In Education) or other things. Absent USA TODAY, we run
about 3% in what Steve Barlow calls “other” paid circulation. That is probably the
lowest percentage of any of the major companies. We haven’t tried to mask it. If you
just look at the ABC number you might go “Oh my God.” And look at a couple of other
companies and say “well, gee they are doing well.” Well, peel the onion a bit to see
what is going on inside of it. We will see significantly better numbers as we go through
the year. In Phoenix, we are still not in positive territory on a six month ABC basis, but
the declines are less. We have cut the year-to-year declines in half in the last two or
three months. We expect to be in positive territory in Phoenix, as we should be, and you
have every reason to ask why we haven’t been. So John, to answer your two questions,
it is pre-print revenue that is at most at risk when you see circulation decline, particular
Sunday. It has taken a while to adjust to the new world of the Do Not Call list.
Doug McCorkindale: I don’t know what you were asking, John, of me. But if you were
getting to the succession issue, which was probably your subtle why of asking the
question. Unlike some other companies, the full board of directors is involved in this
process, every single one of them. And unlike some other companies they are actually
interviewing people in depth, including the folks that are sitting at this table up here
with me. We are looking at inside and outside people. We are going through more
than one interview in many cases. And we are asking a lot of questions about the folks.
They are doing a very, very thorough job. I am very pleased to see every single

15. Page 15
member of the board involved in every conversation. It is not a committee of two, it is
the full group.
John: If the board came to you and said: “We would like you to stay on another two of
three years,” what might your reaction be?
Doug McCorkindale: Well, we’ll see. My contract runs through the summer of 2006. I
remember when you had dark hard and I had dark hair. I have been doing this a long
time and we have a lot of good folks, so it may be time for some new leadership in
Gannett. But I will be around to help them out.
Doug McCorkindale: Doug (Arthur) you had a question?
Doug Arthur: Yes. Slightly more mundane subject matter. You mentioned pre-print,
Gary. Your unit numbers look pretty strong year to date. I know that there were some
issues with pre print industry wide last year with the drug stores but it looks like that
part of the industry is starting to come back. Is it and how big a part of retail it that?
And then Gracia, on non newsprint costs: You guys were up a fair amount in ’04 with a
lot of new product introductions. You said that you are going to continue to do that in
’05 but is it an easier comparison on non newsprint? Thanks.
Gary: Pre-print. Two categories are doing extremely well: consumer electronics and
home improvement. Best Buy has increased its spending fairly significantly in the first
couple of months as has Lowes, and some others. Department stores seem to have been
swinging back and forth. Department stores were very strong in pre-prints in January
and then they weren’t quite as strong, still in plus ground, in February. But ROP went
up. So there is some movement going on with some of the department store folks
between ROP and pre-print. But it’s consumer electronics and home improvement that
is really driving some of the very nice gains that we are seeing in pre-prints.
Doug Arthur: Ok. Is that instead of total local advertising?
Gary: Going up or down?
Doug Arthur: What is the percentage ballpark?
Gary: I have to think about it Doug. Let me do the math in my head.
Gracia: On the non-newprint cost, we’ve talked about the fact that benefit costs will be
impacting that again this year.. It is additive to what we see each year. We have done
some things to mitigate those increases and we will bring them in line with the numbers
that we gave you in our assumptions, or maybe a little bit better. On the new product

16. Page 16
side, as Gary has alluded to, that is an important part of our strategy in the local
community to really capture the advertising dollars. We will continue to do those
product initiations. What ever those expenses are, they are. But that is an important
revenue initiative for us. We are comfortable with the numbers that we gave out in the
assumptions in December. We may be able to do a little bit better than that, but we will
just have to see how things play out.
Doug: Lauren?
Lauren: Hi. Two questions? One for Craig, on the Broadcast side. If you can talk about
the status with your affliation agreements, the ones that expire this year? And what is
network comp as a percent of the total and did that go down again?
And separately for both Gary and Doug: If you think about the non-daily print
publications, if you were to really look at the ones that you have had for several years,
are they really adding to your growth rate after a couple of years? Or is it really in the
ramp-up that they are adding to the growth rate? As you look over time, will they be
incremental or allow you to stay at the same growth rate?
Doug McCorkindale: Gary can add, but the non-daily, they bring the revenue in. We
don’t keep them all. If they don’t succeed, they disappear. Their growth rate in
revenue is increasing and, importantly, related to some of the questions you have been
asking on expenses, early on, they don’t make any money for the most part although
most of them have come on the profitable side much earlier than anticipated. Both the
top line and the bottom line is growing in the right direction. Gary I don’t know
whether you want to add anything to that ?
Gary: Well, I think your question Lauren is once you get past the startup cost, do they
flatten out. The answer is yes and no. Some do, but in many cases it is a market
segment where we started with a very low penetration and that can grow. I will give
you an example. The younger reader products that we started a couple years ago. They
are more profitable today than they were a year ago – in places like Indianapolis,
Cincinnati, Louisville – because they are digging deeper and deeper into that market
segment. For some there is no question you will get a certain percentage and they
become part of the portfolio in, some might say, a mature business. So the answer is it
depends on the product.
Doug McCorkindale: Craig?
Craig Dubow: First we have great relationships with all three of the networks. We are
currently in discussion with NBC. Have been for a while and all of that is moving
forward. In fact, we were just up here within the last few weeks meeting with that

17. Page 17
group. We are also in discussions with CBS and that is also moving forward very
positively. ABC has concluded. We are very pleased with that. I guess I can say on the
comp side, we all know the direction that this is heading. Are we there yet? Not
entirely. We will see over the next few years. Our stations, I think as you are very
aware, bring significant value to the networks because of the raw strength that we have.
What we are trying to do is leverage that strength into how we negotiate these
agreements forward looking. So there are trends out there right now but, at least as we
sit here today, we are not out of it yet.
Doug McCorkindale: Question over there?
Questioner: Doug, it would be just like your company now, given that radio stocks are
so out of favor now, to maybe step into that market now? These radio stocks are
trading, at what, mid teens? On a per capital basis, cheaper than many of the newspaper
divisions out there. Any interest in that, as opposed doing newspapers or television
stations. I mean you hit a home run here several years ago going into the UK. What’s
your thought about radio? And do you view the cyclical concerns your folks have
about radio any more so than what you are dealing with on a newspaper front?
Doug McCorkindale: To answer the latter question first, no. We got out of radio. Not
because we wanted to but because cross ownership rules did not allow us to grow
when they liberalized the radio ownership rules. So we think you can make good
money in radio. We are not looking at any radio right now. It is a line of business we
have been in. We know how to manage it. We were in cable and we got out at $5,300 a
sub. The prices have come down somewhat.
We will do anything that we can manage and make money for you all. Radio would be
on the table but we are not looking at it. And we still have the cross ownership rules. I
was telling my lunch table that we had that discussion on Saturday night. I happen to
be seated next to a high official in the U.S. Government, trying to get him to decide who
is going to be the next chairman of the FCC. We’d like to get on with this but, as you
know, with the court cases on appeal. I don’t know where that goes to get back to the
FCC level. We’ve got to get on with this. It is just holding up a lot of discussion,
especially for smaller companies that have, what I would call, somewhat nervous
advisors, who see a roadblock and are afraid to take the next step. But radio would
really be prohibited for us until we get those rules changed. If you have 100
newspapers, it really has a big overlap with the radio market.
Questioner: (inaudible)
Doug McCorkindale: Those of us who have been doing this… I think radio was going
to be out of business in ’48. Then it was not any good. Then it was the hottest thing

18. Page 18
since sliced bread. And some of you suggested that they were going to put us out of
business in Cincinnati. If you know how to run media companies, you can make
money. It may not be the fast growth area but if you run them well you can make good
money. Our television division has a little challenge this year but they still have 50%
profit margin that is better then the automobile business. Allen?
Allen: Couple of questions. Just following up. You were one of the first to say that
radio was getting some push back from the advertisers because of too much clutter, you
know, too much inventory thrown on the market. Have you seen that change in a
meaningful way with Clear Channel less is more? And couple of questions on the TV
side. One. I am a little unclear if Captivate is included in your TV station numbers and
those numbers you report. In terms of the revenues, just TV stations, or whether they
include any peripheral businesses? And then last one is: When Direct TV rolls out their
local into local, do they have to get separate carriage agreements or new carriage
agreements for HD? Are you negotiating for any cash re-transmission fees on those
signals?
Doug McCorkindale: Craig, why don’t you take that? On the Captivate numbers, the
television revenues with a decline of the 4.5 percent I mentioned? That excluded
Captivate. It is in the numbers that you see, but we tend to break it out and Craig is
talking about pacing numbers, so obviously, there’s nothing to do with Captivate.
Craig, why don’t answer the rest of Allen’s question. And Gary, I don’t know if you are
seeing any different answer on radio but you can think about that while Craig is
answering the question.
Craig Dubow: First on the re-trans: Yes, we do see cash on the re-trans with respect to
satellite. We have a number of markets currently with local into local on the analog
side, or as they they call their digital. We will be pursuing agreements as we go forward
with the satellite companies, definitely. Time is going to tell. We are just entering into
this new window and we will see. Specifically in Denver, with our first local high
definition newscast we have quite a bit to offer. There are different leverage points
depending on where we are in the country. We will also be offering a new service this
May in Washington. Again, as we look to put these agreements together, there is quite
a different offering we have for the table.
Allen: Are your stations up in those markets on HD?
Craig Dubow: Well, we are up across the board on a pass-through basis for all our
properties. We have, as I said, one specific production for all of our newscasts in
Denver up. We will be doing the same thing in Washington. Those will be the only
two at this point. That is not a requirement at this time but we believe that there is great

19. Page 19
opportunity to be in that business. But all the rest definitely are up and have been
compliant for over four years for the most part.
Doug McCorkindale: Allen, this HDTV, all-news show we are doing in Denver. You
ought to take a look at it. It is spectacular and it is a money maker, where almost
everything else in HDTV is an expense. We have packaged that in the right why and
got the right sponsorship and advertisers and it is actually a profit center. Gary do you
have any other views on radio? We really had not thought about it.
Gary: I really had not thought about it. But based on what we are seeing with some of
the pricing it seems to be … the war is between local radio and local cable. Where you
can buy a ton of spots for almost nothing. The prices just keep going down and down
and down. So that is where the real battle is. Again there is always going to be a price
point at which some people will be persuaded by that. Do we want to compete at that?
Totally commoditize our business? I don’t think so. There is that difference in value.
That is where I see the battle going on.
Doug McCorkindale: Somebody in the back.
Paul Ginocchio: Two questions. First the Corzen study came out last week and was
quite complementary of your market share gains online and your recruitment. Did you
see the study and why are you gaining when others are losing? Then second, you put a
TV anchor on your Wilmington newspaper website and they are doing a couple of
broadcasts a day. What is that teaching you about people’s ability or wanting to watch
video on a newspaper website? Thanks.
Gary: First one? Understand that it is necessary to have a local web site and a national
distribution system. That is what CareerBuilder does for us, Tribune, and Knight-
Ridder, that it does not do for many of the other newspaper-based Web players. So
that is it. We saw that several years ago and I think that is the foremost reason.
Second, what we are doing in Wilimington is beta testing. As the pipe gets bigger to
more customers, that is going to be a greater value. We are looking to emulating it in
some other locations. It has gone pretty well. They are actually starting to sell some
advertising around it. Sponsorships, basically like sponsoring a TV broadcast. For
those of you who are not familiar with it, we run two loops a day. We are actually
updating it in the afternoon now. And it runs about 3 minutes. So you can come in and
get some broadcast-type news highlights. Wilimington has no television of its own, it is
all Philadelphia. And we will particularly be looking at it in markets where there is no
local TV.

20. Page 20
Questioner: The Times had a article about charging subscribers for online services,
which only the Journal does now. Would you discuss that issue?
Doug McCorkindale: Well, the Times called us and asked us what we were going to
do and we told them we would follow The Times’ good example. So right now we are
not charging for it.
Same Questioner: Do you see a day when you would charge?
Doug McCorkindale: I would like to see that because, as some of you have heard me
say in the past, it is our traditional properties that are creating the news products. We
are now pressing the left hand button to go out on the Internet and the whole
economics of the Internet has to have somebody pay for it. Right now, with minor
exceptions, it is the advertiser. Some of the studies that I see, you know, to cover all of
this we would only have to double the total advertising expenditures in the United
States. I don’t think that is likely to happen. The advertiser is going to have to get the
bang for the buck. But we think our advertisers are doing pretty well. This local item
that Gary mentioned; our strategy is local, local, local. Cover the total market. Use the
newspaper, use the non-daily publications, use the online, use talking heads out of the
news room if necessary, maybe add a radio signal if one was appropriate and we could
do it and just cover the local market so that the readers and the advertisers and viewers
want to go to a Gannett site to get what they can get. I would have to know about that
market. But whether someday they will pay for it, I don’t know but right now I don’t
think we are ready to test it.
Yes?
New Questioner: Could you just come out on the change in the auditor? Was there any
dispute? Anything you can say about that?
Doug McCorkindale: Gracia is our chief financial officer. I am glad you are sitting at
the head table.
Gracia: There were no disagreements, as we indicated in the 8K. It was simply that
Price Waterhouse had been our auditors for 28 years. Good corporate governance
suggests that you might look at that from time to time. We took a look at it and decided
that we could get a strong quality audit from the folks at E&Y at a favorable,
competitive price.
Doug McCorkindale: Very well stated.

21. Page 21
Questioner: Just following on John’s question on circulation. I was just wondering if
you talked specifically about any new strategies you are looking at to replace the
customers previously acquired through telesales.
Gary: Yes. New? No, but we have had to expand. The industry got kind of lazy, in
terms of relying more and more on telemarketing. Well, it’s not there anymore.
Depending in some markets where as many as 55% of residential phone numbers are on
the Do Not Call registry. So you have to expand the other ways you go about selling.
Whether is it is crews, kiosks, you name it we are doing it. Online. We now have some
software that we can do real time sales online, called ICON. So we have to step up. But
it got too easy to do it the other way because you would just put more money in the top
and it would churn out more orders in the bottom. Unfortunately those orders had
lowest retention. We are seeing an increase in our retention over the last year in the
range of 4% to 5%. Now that does not sound like much but it really is. If you can
increase your retention by that number in 4%-5% range, that means you are going to, in
the longer term, need to write fewer orders. We are not quite there year. It just means
that you have to be much more creative. We have had to reconstruct our sales
machinery in all of our newspapers. Because you are not going to write 50% -55%-60%
of your pressured starts are not going to come from telemarketing. Well, they could,
but you would burn through the market every three weeks. And then you reach a point
of diminishing returns. It would just backfire in your face. Our goal was to get down to
no more than about 25 % of our orders written through telemarketing.
Deb?
Deb: I just wanted to follow up on, I mean, with telemarketing you can call existing
customers?
Gary: Aha.
Deb: Are you saying they are only customers for three weeks and then you are calling
them again? Don’t you sell longer subscriptions?
Gary: No. No. I am saying if you wanted to sell 50% of your starts with telemarketing,
you would have to burn through the market. You would end up calling the same
people over and over every three weeks. And that is just not going to work.
Deb: So my question is: What percentage of your customers, subscription customers
now, have credit cards so they don’t have to call and it keeps charging them.

22. Page 22
Gary: We have what is called EZPAY. We have doubled that in the last couple of
years. We are in the mid teens. And some markets are over 50%.
Doug McCorkindale: Question back there. Yes sir.
Questioner: You have mentioned that the stocks are clearly undervalued. You talked
about share repurchase activities. Can you talk more about that? Maybe how many
shares you purchased in quarter to date?
Doug McCorkindale: Gracia?
Gracia: We have been very active in the first quarter and we will share with you, during
our first quarter earnings call in April, what activity we have done in the first quarter.
But we have been very active in the first quarter.
Doug McCorkindale: Doug (Arthur)?
Doug Arthur: Craig, in some of your smaller markets where you have dominance, like
Knoxville for example, are you prepared to play hard ball with the cable operators in
those kinds of markets where your service is absolutely necessary to the cable operator?
Sort of maybe even on a pilot basis try a couple of markets and see what happens.
Because it is not going to impact Gannett in its totality very much anyway.
Craig Dubow: Well, first of all, we have pretty good relations already in Knoxville. We
have a second channel at this point that we have a full news loop service that is quite
profitable for us. But in some of the other markets where we don’t, we are going to try
and take a look at everything as we go forward on this. But our intentions are to receive
the value that we believe we have in these signals. To date, we have done very, very
well with that and I have no reason to believe that as we go into this next round that it
should be any different.
Doug Arthur: If I could push it? Could you describe the intent of some of the small
broadcasters to extract cash payments in some of these smaller markets? Would you
personify that as crazy, reasonable or let’s wait and see?
Craig Dubow: I think that it’s got to be let’s wait and see, because every market is
going to be a little bit different. Certainly, the strength of the station within that market,
how local that station is, is really going to dictate where things will to end up. Again, it
is also going to depend on the operator from an NSO standpoint that is in that market.
Is it part of a large group or is it some of the smaller owned? There are a lot of variables
so I would have to say let’s wait and see.

23. Page 23
Doug McCorkindale: Ellen?
Ellen: I have two questions for Gary. You said, 3% and there is no push back from
advertisers. Would it be at 5%. I mean is there a point at which they are going to say
we have to do this?
Gary: I don’t know.
Ellen: You have not had that?
Gary: You know, when you talk about pricing, you take your rates on your rate card
up – you can take it up 10%. It depends on the packages that you are building with the
individual advertisers. Now, there is no question that we have been looking at
packages to drive some of this business into our new products, be they non-daily or
online.
Ellen: Well isn’t that a statement about rates? This is my next question. Just the fact
that they are going in the newer product is that saying that is lower rates and would
they rather go there rather than pay the full increase on the ROP product?
Gary: There could be some buy back and there is. We try to be very, very careful with
that. By doing so, what we do is… it is called drift. With all of our new products, we
have to be careful that after a year you look at the total dollars being spent by an
individual advertiser and has it shifted dramatically out of the daily newspaper into
these new products? We have seen that where we are not careful about how we
structure the packages. Structuring the packages, the bundles if you will, that we use.
We are very sensitive to drift.
Doug: Doug, I think that some of the people are rushing out. I don’t want to hold them
out from rushing to the market to get buy the Gannett stock. We will be here thank you
all.
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