GANNETT CO., INC. SECOND QUARTER CONFERENCE CALL AND WEB CAST

JULY 13, 2004

PRESENTATION Operator Good morning and welcome, ladies and gentlemen, to the Gannett second quarter earnings conference call. At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the Company, we will open the conference up for questions and answers after the presentation. I will now turn the conference over to Gracia Martore. Please go ahead, Ms. Martore. Gracia Martore – Senior Vice President and Chief Financial Officer Thanks. Good morning. Welcome again to our conference call and Webcast to review Gannett's second quarter 2004 results. We hope you have had a chance to review our press releases from this morning, which also can be found at www.gannett.com. Since we met with many of you just three weeks ago at the mid-year media review and there is another conference call scheduled promptly at 11:00, we'll keep our comments relatively brief this morning. With me today are Doug McCorkindale, Chairman, President and CEO; and Jeff Heinz, Director of Investor Relations. Very quickly, as you saw, we earned $1.30 per diluted share this quarter. At the high end of the range we indicated at the mid-year media review and a new record. In the second quarter of 2003, the comparable number was $1.20. This was achieved as a result of strong industry-leading revenue growth in our newspaper segment and with the help of strong political spending on our television station. With respect to the expense side, let me give you an update on newsprint. As we said at the mid-year media review, the price increase announced in the spring settled at less than the announced price and at delayed implementation dates. Since then, eastern Canadian labor and Abitibi reached agreement on a five-year pact, which is expected to be the pattern followed by other local contracts. This will ease the threat of a supply disruption and publishers may begin to scale back inventories, particularly as the industry winds through the seasonally slow summer period. Throughout the second quarter, industry-wide usage trended negatively against 2003, and as always, real consumption of newsprint will determine the strength of the market. Unless demand improves from here, any potential future price increase will encounter the same market dynamics experienced in the spring. For the quarter at Gannett, we reported newsprint expense up about 13.1%, which consisted of an 11% increase in price and an almost 2% increase in usage. On a constant currency, pro forma basis, newsprint expense increased 11%, with price up about 9, and usage up about 1.8%. Usage was primarily impacted by commercial printing activities and USA TODAY's circulation gains.

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In the expense area, we continue to focus on prudent cost control. During the second quarter, our reported expenses increased 10.3% for the newspaper segment. Acquisitions, currency and newsprint clearly impacted that increase. So, and stay with me here, adjusting for acquisitions and currency and excluding newsprint, newspaper segment expenses rose about 4.5%. That increase includes jumps in medical and certain other benefit costs, sales costs, and expenses associated with our non-daily product ramp-up. As we noted previously, our strategy to develop non-dailies and niche publications continues to contribute to our revenue growth. For the quarter, non-daily revenue, which, again, does not include publications such as Clipper, Nursing Spectrum or Army Times, was up 26%. Clipper's year-over-year revenue growth in the quarter was approximately 40%. We are very pleased with the growth of these initiatives and acquisitions. However, it is important to remember that the margin for the non-dailies is around 20% and mid-teens for Clipper. In the non-operating, other expense line, in last year's second quarter, we reported that investment and currency gains offset charges for minority interests and internet investments. These investments in currency gains did not repeat in the second quarter of this year, causing the swing that you see. Turning to the balance sheet for a moment, total debt at quarter end stood at $4 billion, and cash and marketable securities were about $112 million. At this point, our all-in cost of debt is about 3.2%. Capital expenditures for the quarter totaled $63 million. At this point, we are on track to spend about $280 million on CapEx for the year, including the ramp-up of Captivate elevator build-out. With respect to shares outstanding, basic shares at the end of the quarter were 266.9 million and averaged 270.2 million for the quarter. We repurchased 5.3 million shares in the quarter and year to date, through the end of the quarter, we have repurchased 6.4 million shares for about $550 million. So we have clearly used a significant portion of our combined $791 million of authorization. Therefore, the Board authorized an additional $1 billion for share repurchases. At this price level, we believe that Gannett is a very, very attractive investment and repurchasing the shares is a strong use of our free cash flow at this time. Finally, before I turn the call over to Doug, I must remind you that our conference call and Webcast today may include forward-looking statements and our actual results may differ. Factors that might cause that to happen are outlined in our SEC filings. This presentation may also include certain non-GAAP financial measures and we have provided a reconciliation of those measures to the most directly comparable GAAP measures in the press release and on the investor relations portion of our website. Now I'll turn it over to Doug. Douglas McCorkindale, Chairman, President and CEO of Gannett With that introduction, I think we've covered all the pluses and minuses and everything I say can be taken with a grain of salt. Anyway, Gracia, thank you. Good morning, all. As you saw from our press releases this morning, our net income rose 9.3% and operating revenues increased almost 10% for the quarter. That's 6% on a pro forma constant currency basis, for those of you that are interested. Our second quarter revenues statistics were solid. With all of our operating divisions achieving improvement year-over-year and they were led by a 20% plus employment classified growth; however, a

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few of our ad categories are challenging and results continue to be choppy, both among our categories and on a month-to-month basis. Local advertising in our newspapers rose almost 6% in the quarter. In the U.S., across all products, the health, financial and telecommunications categories were strong during the quarter, while department stores and consumer electronics trailed last year's results. A year ago at this time, a couple of department store groups began making significant cuts in spending, followed later in the year by Federated. For the quarter, total department store revenues across all products in the U.S. were off by 8%. But they were off only 4% in June as we began to cycle these cuts. The department stores were about 20% of all of our local revenues in our U.S. community newspapers. Classified revenues in our newspaper segment, and this is U.S. and UK, were up 12.2% in the quarter. Help wanted revenues grew by 23.3%, real estate was up by 10.5, but auto was down by 1.4%. In the U.S., our employment numbers advanced 24.2% for the second quarter. In June, about 75% of all of our domestic newspapers had employment revenues above 2003 and about 60% – such as Westchester and Wilmington and Phoenix and Nashville – had double-digit gains. We continue to see a lag in the improvement in employment classified in the manufacturing-based markets in the Midwest. While those markets that rely on construction, tourism, and the service industries, such as the Far West and the South, have performed best. In automotive in the U.S., the year began with a 3% gain in the first quarter. In recent months, we have seen a noticeable softening and automotive was down 4% for the quarter and over 6% negative in June. Overall, domestic remains weaker than foreign. As Gracia mentioned, our non-daily and online products continue to add to our revenue growth. Online revenues for the entire company grew about 57% for the quarter, and that's 54% improvement year-to-date. At this pace, we are on track to have about 200 million of revenue from Internet activities this year. Revenue for CareerBuilder for the second quarter was up 82% year-over-year and increased 20% sequentially from the first quarter of 2004. CareerBuilder traffic for April and May of 2004 was up 114% compared to the same two-month period last year with 29.4 million unique users. Turning to national advertising, national was up over 10% for the quarter. USA TODAY's ad revenues were up 15.5% for the quarter, reflecting strong demand for color and we're getting some pricing positives. The major ad categories at USA TODAY significantly increased in the quarter. Excluding travel, however, which was flat compared to the second quarter of 2003. Those of you who got up early this morning and watched CNBC, they reported that the Tribune owns USA TODAY. I can assure that it is still part of the Gannett company. As the publisher of USA TODAY, Craig Moon, mentioned at the conference a few weeks ago, USA TODAY will increase its single copy price from 50 to 75 cents on Tuesday, September 7th. This will result in additional expense in the second half and especially in the third quarter, as we will spend about $10 million in coin mechanisms and we will expense those, not capitalize them, and we'll have another several million dollars for promotional efforts. The price increase impacts a little less than 900,000 copies. As is typical of most circulation price increases, we expect a fall-off in circulation in the early month. In addition, we will not realize the full 25 cents increase as some portion of it will be shared with the distributors. Expenses will exceed the revenue gains from the price increase this year, but will be a positive contributor in 2005.

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One additional comment on the price increase and its impact next year, we have seen from some of you a very wide range of revenue estimates, from $20 million to $60 million of increase. We will have a better handle on the price increase and its impact after it's implemented, but at this point, we are more comfortable with the lower end of those range of numbers. Turning to our UK operations, they again delivered excellent results as the UK economy continues to recover. Pro forma revenues for Newsquest for the quarter in pounds were up 6.7%. Costs, as always, were well controlled and as a result, Newsquest operating profit, again, in pounds, was up 24%. As well, the exchange rate was also very favorable for the quarter. Turning to Broadcasting, and by the way, this segment now includes Captivate. As noted in our earnings release, excluding Captivate, television revenues were up 8.6% for the quarter. Operating expenses and operating cash flow increased 5% and 11.7% respectively. Television's operating cash flow margin, excluding Captivate, was over 150 basis points higher for the quarter compared to the same quarter a year ago. As is the case with a number of broadcasters, we are experiencing a significant increase in ad dollars related to the upcoming elections. But excluding political, several of the top ten advertising categories improved. That includes telecommunications, media, banking and financing, and services. However, on the down side, automotive and the restaurant categories, while positive, were not as strong as we have anticipated -- had anticipated – and the packaged goods and retail categories lagged last year's results in the quarter. National on the television side increased more than 16% and local was up about 3.5%. As most of you know, June's TV results were impacted by the death of President Reagan, which resulted in schedule changes, preemptions and some inventory loss to our stations, as well as cancellation of political schedules during that week. Our related pacings for the third quarter are up in the mid to high teens, with August being stronger than July, reflecting the benefits of the Olympics and political ad spending. National is stronger than local at this point. Pacings, however, continue to be volatile and subject to weekly change, but that's where we stand right now and we'll keep you updated as we do with our monthly reports. Finally, in addition to Captivate, this quarter we jointly acquired Cross Media Services with Knight Ridder and Tribune. Cross Media Services is a web services company that helps retailers increase in-store traffic and sales by providing turnkey services for local store promotions on their Web sites and via third party Web sites. They have a client base of about 100 retailers representing the broadest base of clients in the hardline, softline and grocery sectors. With these small acquisitions, along with Clipper, the non-daily and other initiatives, all of these are part of our continuing strategy to widen our reach in the communities we serve. As you've heard me say before, Gannett is in the information business. We measure our presence in the market through a variety of products and we use these products to target specific constituencies, both readers and advertisers, in the format and by the delivery mechanism they prefer. It all starts with the local newspapers advantage as the most recognized and credible source of information. From there, we can leverage our content and aggregate eyeballs across all of the products that we have in the community, the daily, the weeklies, the zip code specific magazines, the young reader and the Spanish-language publications, and online. Getting information to people how they want it, when they want it and where they want it is the foundation of our strategy. Now I'll stop and we'll take your questions.

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QUESTION AND ANSWER

Peter Appert, Goldman Sachs Good morning. Two questions, please. First, on the local advertising results, the June increase was, I thought particularly noteworthy. Doug, you mentioned the benefit from cycling through the retail cut backs from a year ago, but I think even if you pull back the department store cuts, it's still a fairly substantial sequential improvement. So I was hoping you could just drill a little further into what's driving that improvement and if you're seeing sustainability there in July. Then the second question, Gracia, you mentioned the very, very attractive stock price. I'm wondering if that implies that you expect to execute on the $1 billion share repurchase fairly quickly? Should we assume that perhaps we could see all that done through the second half of the year. Thanks. Douglas McCorkindale Good try, Peter. I'll let Gracia handle that one. On the local front, the numbers are not bad, but when you drill down into them, Peter, you'll find that most of the positive is coming from the small and medium-sized advertisers again. So the numbers are getting better. We do go up against the better numbers from last year, but it's still that same category of the small and medium-size advertisers that are adding a good deal of the heft to the revenue picture. The large advertisers, the top 15 as we call them, are still sending some mixed messages and, as you know, some of them, even on the discount level, have been announcing some mixed results in the upcoming months. So we're going to continue to emphasize the small and medium-sized ones to try and get our money there. Gracia, do you want to tell them how much you're going to buy when? Gracia Martore Well, first a little bit more on the local side, I think also those numbers reflect the great job that our US Newspaper Division has been doing on the non-daily side. As Doug said, those small to medium advertisers, a number of those advertisers are coming into our papers as a result of these different publications that they are starting. So clearly that has been a very attractive add-on to our local numbers, and obviously some categories like, across all of our products, furniture, financial, health, and telecom had a good quarter for us year-over-year. With regard to the share repurchases, as always, we will be opportunistic in our buying. We tend to not announce things that we don't intend to execute on, but the timing and the pace are subject to a number of variables, including 10b18 rules, which are a little more restrictive than they were a couple of years ago, that tell you how much you can buy on a daily basis. But, again, we'll see where we go. Obviously, if there were acquisition opportunities, that would have an impact as well on where we would go on the share repurchase side. Peter Appert

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Okay. Great. Thanks. Just one -- back on the non-daily products for one second, Gracia. You gave us the percentage year-to-year changes. Can you give us the actual dollar amounts generated by these products? Gracia Martore Well, Gary Watson mentioned at the Mid-Year Media Review that the annualized run rate for the non-daily side is somewhere between $300 million to $350 million at this point. Douglas McCorkindale It's picking up very nicely though, Peter. We're doing very well there, so I hope come year-end when we have that report, Gary will tell you that it's doing even better. John Janedis - Banc of America Securities Hi, good morning. To the extent that you can in July, can you give a little bit more color on what you're seeing in the auto category, I guess I would say in print, both national and classified, as well as TV. Then also, was the pull back in national telco in June related to the wireless carriers and was it really broad based or just one operator. Thank you. Douglas McCorkindale Lot of questions there. Let me answer in a macro sense. What you may remember is that a number of years ago, we thought the automobile category was going to begin to soften after some very good numbers in 2000 and then into 2001. It's been moving along very nicely until the last couple of months, and we are definitely hearing from the local automobile dealers that they are having trouble moving cars and they are cutting back on their advertising. You asked about July. We don't have any results for July yet, but in chatting with some of our larger newspaper publishers I sense that in most of the U.S., we're getting the same feeling that we had from the June results, namely, a soft automobile market. As I said on the TV side, it's not as soft, but they have been getting some mixed messages too. So across the whole board, the automobile picture is not as robust as it was and this is more relevant for the domestic manufacturers than it is for the foreign manufacturers. Do you want to add anything? Gracia Martore Yeah, just on the telecom side, John, it is a couple of folks, both at the community newspaper level, as well as at the USA TODAY level that we're seeing a pullback on on the telecom side. James March – SG Cowen Securities Hi. Two quick questions. One, Doug, I want to just clarify one of the comments that you made earlier. I think you mentioned that operating income pro forma and constant currency was up 6%. I just wanted to get the corresponding revenue number, which would have been, I guess, pro forma and constant currency all in.

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Douglas McCorkindale That was -- James, that was revenue that's on a constant currency. James March Okay. Douglas McCorkindale We were up 10% on normal and 6% on pro forma constant currency. James March Okay. Thank you. That's helpful. And then secondly, I was wondering if you could flesh out a little bit what's going on in the pricing side. I looked at the June ad revenues up on a pro forma basis, up about 9.8% but then only a 1.1% increase in ROP. I know that there's probably mix issues there. I know that Newsquest is not included in there, but maybe if you could talk a little bit about pricing and is there any way we can kind of look at this and figure out if there is some pricing power, especially here in the states. Douglas McCorkindale Well, Gracia can jump in here. Using USA TODAY as an example, as I mentioned in my comments, pricing has certainly helped their results and they are getting -- they had a 15% increase, 15-plus percent, increase in the quarter and some of that's from color, but obviously some of that's also from pricing. USA TODAY did increase their pricing because they're really getting good results for the advertisers, so those price increases are holding. In the community Newspaper Division, we've been normal and I think we've not been overly aggressive, but not particularly meek. We're not really getting any pushback on price increases in advertising. If we deliver, and when you deliver with the daily and these non-dailies that Gracia mentioned and our online products, if we're giving them the market coverage – and let me comment that that's what we do in the UK also and even to a more serious degree – we're not getting pushback on the price increase. On the other hand, we're not being terribly aggressive. I mean, we're just doing what we think is appropriate. James March Understood. Then just one last follow-up on circulation volume. I was wondering if you could flesh out how things look X-Newsquest and X-USA TODAY. Douglas McCorkindale Do we have that handy? Gracia Martore

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I would say, James, that on the domestic U.S. newspaper side, as Gary mentioned at the Mid-Year Media Review, we are in this transition period with the do-not-call list and reducing our reliance on telemarketing. That was over 40% of our starts previously and our goal is to get that down I think to about 20%. There has been some decline in paid circulation on the morning side, as well as the Sunday side. But we believe that a number of the initiatives that we are using to transition to in this period, such as kiosks and more EZ Pay, will help with our retention efforts and that as we come out of this transition period, that our circulation numbers will strengthen. Douglas McCorkindale James, to be direct to your comment, the larger the newspaper, the more difficult it is to change the mentality. Our smaller newspapers are doing better in adjusting to the new environment and the larger ones are taking more time and more effort and more push from corporate. James March Okay. That's helpful. Bill Drewry – Credit Suisse First Boston Hi, thanks. Two questions. One, on the expense side: Gracia, you mentioned, I think X-newsprint, X-acquisitions, you were up 4.6% in core newspaper costs for Q2. Just wondering if you could give us some guidance for the third quarter and for the second half in general on what the major trends are going to be in labor costs, medical expense, and maybe other. And then a second question on Internet, Doug: You mentioned that $200 million, just wondering, is that pure revenue that's recognized just on the Gannett P&L and just wondering what the growth rate of that was as well. I think you said CareerBuilder was up 80%. But I'm just wondering if that's the same kind of growth rate applicable to the Gannett Internet revenue? Douglas McCorkindale It's not 80, Bill, but it is 57. It's doing very well and that's, that's pure Internet. We allocate the costs and allocate the revenues very carefully, so we want to see what the Internet activities are doing. As you know in the past, we've stated that it is a business. It's not just an ego trip. Gracia, you want to – Gracia Martore Yes, on the expense side, Bill, we'll continue to see the same kind of level on medical cost inflation and increases as we have seen in the first half of the year, which we've talked about previously in the high single digits. On the newsprint front, we'll also have the impact of the price increase that we paid in the latter part of the second quarter, which will impact us in the third and fourth quarters and so those increases, I think we've talked about up in the very low teens. We also continue to ramp up our non-daily product side, so there are expenses associated with doing that, as well as to the extent that Clipper continues to grow. That's a 15% margin kind of business. But as we go through our second half budgeting, we are looking, as we always do, to control any kind of

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discretionary expenses and to just drill that number down as low as possible while continuing to sustain the good business that we're bringing in. There are going be some costs associated with covering the elections and the Olympics on the USA TODAY side as well and then what Doug mentioned earlier with regard to the USA TODAY price increase, that will have an impact on newspaper segment expenses as well. Bill Drewry Which I think that's about $10 million. But with all of that in mind, if your newspaper ad revenue growth was about the same, and obviously it is at a very impressive level, especially versus your peers, but if it stayed at about the same level for the second half and did not sequentially increase given your cost plans, do you think margins in the second half would be flat with margins versus a year ago, or would you start to see a little bit of that, you know, margin leverage off of the higher single digit revenue growth? Douglas McCorkindale It will depend, Bill, on how many of these new ventures we get into. We have a lot of them on the drawing board and we have been introducing them on a modest schedule. If we see some opportunities, we may accelerate them. If we hold them back, you may get some margin improvement because they're expensive to get started. The positive news is all of them that we have done have come in ahead of plan, so that tends to lead to us be a little bit more aggressive. So I can't really answer your question until we see how it goes through and, you know, the third quarter is, compared to the first, in that soft category and a lot of it will depend on the fourth quarter. But we'll try to control these costs. We're getting some mixed messages, as we said, on the revenue side, especially in the automobile category and a few others. So we're going to sit on the expense side and not ramp up until we get a better feel for where the economy is going. Bill Drewry Okay. Great, and did you have a pacing for USA TODAY for either July or anything for the third quarter? Gracia Martore It's still really early in the month, and I have seen the first week and if I told you the numbers, everybody would get all excited. So we'll give you the numbers when we give you the July results. Douglas McCorkindale They are getting good results, Bill, and as you know, circulation numbers have been pretty good. In fact, very good, and that all gets them in a very good posture for the price increase in September. Bill Drewry

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Perfect. Thank you very much. Lauren Fine – Merrill Lynch Thank you very much. I have a couple of questions. I guess one, could you address the up tick in preprints, if there were certain large advertisers that caused that up tick and why that's bounced back? And then also, I guess going back to Peter Appert's question, trying to quantify the revenue of the non-daily, maybe another way to approach it is could you tell us what the ad revenue increase was for just the daily newspapers in the quarter? Then I have a follow-up after that. Douglas McCorkindale See if we have the answers to these things. I don't know whether we break it out there. Gracia Martore When you say the daily newspapers, you're suggesting that we exclude the non-dailies? Douglas McCorkindale The non-dailies, yes. Lauren Fine Right. Gracia Martore I think we've given you the revenue run rate and we've given you the growth rate, so I think you can probably back it out and get there. Douglas McCorkindale I'm looking at the financials trying to respond to your question. We don't have a non-daily breakout that's precise enough to respond to your question other than the run rate and subtract it rather than run it separately. Some of the newspapers, as they report, have mixed the two pieces and we have to go down and get a breakdown. But as Gary said in that $300 million to $350 million range, how we would break that for the quarter, I don't know whether you can be helpful there, Gracia. Gracia Martore But if what you're getting at, Lauren, is our underlying business excluding non-daily growing, the answer is yes.

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Lauren Fine Oh, no. I knew it was growing. Douglas McCorkindale Yes. Lauren Fine Just curious. At what rate? Douglas McCorkindale But clearly the non-daily is – at the 20-plus percent increase in revenue – is adding some pretty good numbers to the overall. But having said that, it's a very small piece when you're talking about, you know, big time revenue numbers at $300 million-plus or so a month just on normal advertising from the Newspaper Division here in the states. The non-daily adds something to it, but it gets lost in the mix, so it may add some little extra, you know, a couple of hundred basis points or 50 basis points. I don't have that to break it out. The preprints, as you focused on earlier, they do relate to newsprint prices and people do move back and forth with them. I think that's one factor. The other factor may be on some of the preprints when you get into the large advertisers, again, on the retail side, there is a good deal of experimenting going on and they're jumping back and forth. But other than that, Gracia, I don't know any particular factor that is driving preprints versus anything else. Gracia Martore I'll get back to you, Lauren, but I think there were a couple of categories that suddenly saw a spike-up on the preprint side in June. I'm not sure that's a trend in the making; rather just a particular month versus another month. So I'm not sure what I would read into either the decline or the lower number in May or the bump-up in June. Lauren Fine Okay. And then I'm curious, two other quick ones. Can you quantify the impact of foreign exchange on the actual earnings figure in the quarter? Gracia Martore Yes, it was a little over 2 cents. Lauren Fine

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Okay. And then on USA TODAY when you think about the pricing power that you've had, which has been pretty remarkable, would you anticipate with some expected decline in circulation from the price increase, that you'll have to have, you know, clearly a more muted price increase as you go into 2005? Douglas McCorkindale No, not if the product continues to be as successful from the reader and the advertiser point of view. I mean, we are delivering a wonderful product and the advertisers are very satisfied with it. As I think we mentioned a few weeks ago, we're getting quite a bit of demand for color so that we've actually had to run a few advance sections, as you've seen, because the demand has exceeded our ability to respond sometimes. Lauren Fine Great. Thank you very much. Douglas Arthur – Morgan Stanley Yeah, couple questions. Doug, do you have an updated number or view on total political and Olympic TV stations for the year? Douglas McCorkindale [Laughter] Doug, I'm laughing because, as you know, we've been pushing our broadcasting folks aggressively on that. The advertising for the first half of – correct me if I'm wrong here – first half of this year, Gracia, was 100% or more higher than it was in 2002 and you'll recall that in 2002, we had about $80 million of political advertising. Now, I'm not saying we can add those two together and get the right result, but it's a very interesting marketplace. If you read yesterday's USA TODAY story and some of the other stories that are going on, both parties are raising a ton of money. Both of them have to make a decision whether they are going to accept the $70 million that you get from the federal government. But if you do that, you've got to limit your spending to that so they have to make up their mind whether they want to go it alone or take that. There is a lot of money sitting around that, depending upon what the decision is, will either have to be spent pre convention by each of the parties, which would bode very well for the third quarter, or it will be spread out over the year and they will have to take their own risks as to whether they can raise $70 million on their own. It's going be an interesting marketplace, but I'm not going to put our broadcasting guys in a bind anymore. Suffice it to say, whatever they think it is, we think it will be more. Douglas Arthur And secondly, with all the activity in the court in the center of the FCC rules, do you have anything to add? My understanding is the FCC is going to get back to the court fairly quickly. Do you have any comment on that?

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Douglas McCorkindale No. That's what we have heard, although I understood they may also be considering an appeal to the Supreme Court. Most of the observers that I've talked to believe that the Third Circuit Court decision left the FCC with a very complicated process where they don't know what they are supposed to do to respond because the Court maintains jurisdiction. So they have to do what they think they want to do and then go back and find out whether it's acceptable. This could be like a ping-pong match and it's quite disruptive to the process. I think the FCC must be considering a number of alternatives. Christa Sober - Thomas Weisel Partners Hi. A couple of questions. First, following on Doug's question, on the political side, I was wondering if maybe you could just quantify the political impact for Q2 alone. And then you indicated that other income was negatively impacted by some of your Internet investments. I was just wondering if you expect a similar magnitude impact for the duration of the year? And another quick follow-up. Douglas McCorkindale No. I'll let Gracia respond to the second one first. I think we had about $14 million. Gracia Martore $14 million. Douglas McCorkindale Of political, but that's not what she meant to say, so why don't you clarify what you said. Gracia Martore With regard to the other non-operating, it wasn't that we had additional losses in Internet. It was that last year we had basically the same level of loss on Internet investments, as well as minority interest expense, but we had some currency gains and some investment gains that were positive that offset those numbers. We simply had the absence of those positives this quarter. I think as we've always said in that other non-operating line, that it's going to swing from several million positive to several million negative, depending on the quarter, depending on a variety of factors. That's about all we can probably say on that. Christa Sober And I know you guys are still in the process of your budgeting for the second half of 2004, but I don't know if you had looked at current First Call. I think the range is $1.14 to $1.25. I don't know if you can comment on that at all at this point.

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Gracia Martore That's the range. Christa Sober That's the range. Douglas McCorkindale It's a little too early. Let's let the pieces come together. We'll bring it to the bottom line if it comes in as you know. Christa Sober Great. Thanks. Fred Searby - J.P. Morgan - Yes, thank you. Your number was particularly good on the help wanted side, and of course we had a somewhat weak non-form payroll number in June, so I was a little bit surprised at the strength. You indicated that it's still a regional issue where you are seeing strength outside of the Midwest, but Midwest is weak. Do you expect a second half recovery there and are there any signs that that's going to pick up? Douglas McCorkindale Maybe I'll have to ask some of the geniuses that are running the U.S. economy. What we're seeing in manufacturing America, we use the Midwest as an example, but I mean, there are – Fred Searby Doug, I don't trust the dismal science. Douglas McCorkindale Yes, well, we are not seeing manufacturing-based employers rushing into the job market to fill slots on the assumption that the economy is picking up. I think many of the jobs that went overseas didn't just go overseas in the last year or two. They went overseas a number of years ago. One of our large manufacturing operators in one of our markets in the Midwest told our publishers that he moved jobs to Mexico 6 years ago and then moved them to China 3 years ago or 2 years ago where the rates were even lower than he was paying in Mexico. So I don't suspect those jobs will ever come back to Middle America in the manufacturing area. So until we see a robust economy that demands production

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in the US, and I use the automobile business we were referring to earlier, I just don't see a big demand picking up in those markets. Now, what we are seeing is a lot of folks starting up smaller, stand-alone businesses and they are hiring folks here and there, but the order of magnitude to make positive employment numbers in some of those manufacturing-based economies, is not yet there. Gracia Martore But it's very much as Doug was saying, a market-to-market phenomenon. We live here in Northern Virginia and the unemployment rate here, I think, is something like 1.9%, which is incredible. And then we have other area of our economies, as Doug was saying, like in the Ohio area and Michigan area that haven't seen a recovery yet. Douglas McCorkindale And they are somewhat relevant to Mr. Bush for election time too, so I don't know whether they think they can do anything to stimulate them, but I think it will be a rough road. Steven Barlow – Prudential Equity Group Thanks. I want to talk a little bit about preprints and retail. I'm trying to figure out if the size of the preprints is declining here even though it looks like in June certainly the volume went up. Are you seeing really the size of these going down from 20 pages to 18 or something on the department store, I guess in particular, but with CVS or an Eckerds and that sort of side. Also is there a way to break out of the total retail revenue? What is preprint revenue? Gracia Martore Steve, we have been seeing that phenomenon. I think Gary commented on it at the Mid-Year Media Review, that we're seeing some of the preprints scale back a little bit in size, as you say, the number of pages. And the revenue from the preprints, you know, is not probably as robust as perhaps the distribution numbers would indicate. But preprints were about 14% of ad revenues in the U.S. in the second quarter. But the revenue gain from preprints in the second quarter and the first quarter are about comparable in the US. Steven Barlow So there still were gains in preprint revenue? Gracia Martore Yes. Douglas McCorkindale

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Yes, absolutely. But you're right. They are getting thinner, Steve. That's another way to say it. Steven Barlow Okay. Are you seeing any change in the frequency of the department stores? Are they doing less days or are they just trying to do better just targeting their promotion? Any thoughts on their approach to advertising and actually whether you're seeing some of them go over to TV at all? Douglas McCorkindale Go over to TV? No. At least not in the -- you know, we've got 22 television stations and, of course, in Phoenix we can watch both sides of the equation. We're not seeing that, although, you know, that's a client-by-client or customer-by-customer call. There is no consistent pattern among the larger department stores. They’re experimenting, as we've mentioned earlier, and trying to reach their customers in whatever way they can, so they will be in preprint. They may go to TV. They may go to direct mail or go to the ROP newspapers. There's a lot of movement around and each one is making a call based upon their own marketing strategy. Alexia Quadrani - Bear Stearns Good morning. Could you give us maybe the breakout of the cash costs on the TV side, program costs, labor costs? Gracia Martore Well, you've got the depreciation and amortization numbers on the business segment piece that we gave you in our earnings release, so you can back out D&A – Alexia Quadrani How about programming and labor? Gracia Martore Programming expenses in the quarter were up slightly and on the labor side, payroll was up a few percent, also impacted by the medical cost side. Alexia Quadrani And then just secondly, on the newspaper side, do you have a number for FTEs in the quarter? Gracia Martore

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I don't have a specific number on FTEs. Douglas McCorkindale No. Gracia Martore We would obviously be adding some FTEs on the non-daily side, but otherwise keeping things pretty tight. Alexia Quadrani Okay. So not much change year-over-year? Gracia Martore Don't think so, but I'll get back to if you there is something different. Douglas McCorkindale I just looked at the numbers. The programming costs are up 1%, so I mean, it's a non-event. Edward Atorino - Fulcrum Global Partners Hi, good morning. On the shares, if you had the basic shares of 266.9 (million) at the end of the quarter, what would be sort of a range of shares to use for the coming quarter? This will depend on the share buyback, but – Gracia Martore Yes, exactly, Ed. It really depends on the share price, but I would say we've typically seen a spread of 2 million to 3 million shares between basic and diluted. So where the share price is now, probably on the lower end of that. Assuming the share price gets back to where it should be, then on the higher end of that. Edward Atorino So shares would be down year to year with the buyback regardless of what happens? Gracia Martore Yes.

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Edward Atorino Now, if you bought in all the shares, that's a lot of shares. So your '05 share base would be down, correct? Gracia Martore Yes. Douglas McCorkindale Yes. Do you have a block for sale, Ed? Edward Atorino Yeah, I'll give you a call later, Doug [Laughter]. We'll work it out. Okay. Thanks very much. Oh, one last question, interest expense? Had you said at, I think one of the or maybe at the Mid-Year Media Review, that the interest costs would be up in the second half? But, frankly, the second quarter was lower than I thought it would be. Would you update your interest expense outlook? Gracia Martore I stand by what I said at the Mid-Year Media Review because we will have the full impact of all the share repurchases that we have done to date in the second half of the year. As well, we are anticipating further ramp ups in interest rates on our commercial paper portfolio as the back half of the year progresses. So that's why certainly in the fourth quarter and perhaps in the third quarter, but definitely in the fourth quarter, we'll see higher interest expense than we saw last year. And again, it will depend on the level of share repurchases we do, and also how quickly or how slowly the Fed ramps up interest rates. Edward Atorino Mr. Greenspan's still -- we'll see what happens. Gracia Martore We'll see. Mike Kupinski - A.G. Edwards Thank you. Thanks for taking the call. Other mediums are reporting that retail and auto activity is picking up in September and October and I was just wondering, are you seeing any indications from your large advertisers about bookings or ad placements in newspapers for those months?

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Douglas McCorkindale No. I don't know what they are looking at, Mike, for September and October. We're not getting a picture that is that far out where – as you know from past conversations in the last couple of years, and it seems to get truer each day and each week – the advertisers are placing their advertising on a much more current basis, so we couldn't begin to tell you what they are going to do in September and October. Obviously, there are some things that are already booked, but to make a broad statement like that is not appropriate for us. Gracia Martore We like to report on what actually runs rather than just bookings. Mike Kupinski Fair enough. And related to the Olympic question again, how much of your inventory is already booked? And I think you're previous guidance for Olympic revenues was in the range of $24 million to $35 million, if I recall. And I know that it was like $25 million I think in 2000. Do you have any update on Olympic revenues? Gracia Martore In 2000, it was about $32 million for the Olympics. Mike Kupinski Okay. Gracia Martore And I think we said that we would hope to achieve somewhere in that range. It will depend on what happens in Athens. Douglas McCorkindale Yes, we're getting some positive results on the Olympic advertising picture, both at USA TODAY and at the television side. But having said that, there are a lot of questions about what's happening related to the Olympics, so some of the larger advertisers are holding back and we're filling the space and the time with smaller and medium-sized advertisers. So it's a little out of the ordinary. It would be nice if it could settle down and give everybody a more comfortable feeling, but I don't think that's going to happen. So that is bouncing around a little bit more than is traditional. Having said that, that's a little bit of a positive because the larger advertisers tend to get a larger discount because of their commitment. And let me add one more wrinkle to this. As I mentioned earlier in response to somebody's question, with all of these political dollars that may be spent and may have to be

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spent, if they have to be spent, they're going be spent pretty aggressively and that could interfere with the inventory that we are counting on for Olympic advertising, especially on the broadcasting side. Mike Kupinski And one final question is that, it was interesting that you had mentioned in a previous call that your employees were selling stock at $90 a share, which appeared to be a little -pretty – timely because that seemed to be pretty close to the top of the market for your stock recently and I was just wondering if your employees are buying stock at these levels. Douglas McCorkindale I didn't know that we said that, but if some of them know exactly where the peak of the market is I think we're going to move them to the finance department. Paul Ginocchio - Deutsche Bank Thanks, Gracia. First, on CareerBuilder, I was a little bit surprised with 80% revenue growth, there was no operating leverage and you had similar sort of losses as a year ago. Could you just sort of talk about the additional costs or why costs are growing at 80% as well? Second, when people are making a choice between dailies and non-dailies, why does it seem like they're making the non-daily choice more often? What's the one unique selling proposition there, if I may? Douglas McCorkindale I'll let Gracia answer, but I don't think we said either of those things. Go ahead, Gracia. Gracia Martore I think number one on the non-daily side, I don't think we said that they were making more choices for the non-daily side. Let's make sure we keep this in reference. It's about $325 million out of a much, much bigger level of revenues that we have. But what we did say is that through the non-daily product, we are attracting advertisers where the daily product may not have been the right solution for them. So for instance, in some of our younger reader-oriented publications, we're able to attract some advertisers that, frankly, you just wouldn't see in the normal daily newspaper. In some of our upscale female demographic magazines, we're probably attracting some advertisers that wouldn't necessarily be attracted to the breadth and mass of the daily newspaper. So I think what we're doing is we're going after different -- and also on the Hispanic side – we're going after different ethnic, different demographic and different age categories and just trying to find additional products to appeal to each one of those segments of the population over and above the growth that we're seeing in our daily newspapers. With regard to CareerBuilder, I don't think that we said that -- we didn't isolate out CareerBuilder and the results specifically with regard to CareerBuilder in that non-operating line. I was making a broad

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statement that all of our equity investments were about the same in that line, which doesn't necessarily mean one thing or another with regard to CareerBuilder. Douglas McCorkindale We're very happy with the way CareerBuilder is going in all categories. Paul Ginocchio You won't make a comment on the profits -- so they're improved, it sounds like, or – Douglas McCorkindale Well we haven't revealed the results of CareerBuilder ourselves and Knight Ridder and Tribune have agreed not to do that, but CareerBuilder is, I would say, ahead of expectations for all three of the partners. We went into it with an understanding of revenue growth and it's done better than anticipated. We did increase the promotion expenses, but the bottom line is not worse off than any of us predicted. It's better off from Gannett's point of view and I think our other partners would agree with that. Gracia Martore And the other thing I think you have to do is look at CareerBuilder in relation to the online efforts of each of the partners, not on a stand-alone basis. That's why we don't just simply comment on CareerBuilder specific profitability or results. Douglas McCorkindale It's a real plus, Paul. We're very happy with it. Paul Ginocchio Great. Thank you very much for the completeness. Operator Thank you. I'll now turn the conference back to Ms. Martore. Gracia Martore Thanks very much for joining us today. Jeff and I will be available if you've got any questions afterward at 703-854-6917. Thanks for joining us.

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Certain statements in this transcript may be forward looking in nature or “forward looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The forward looking statements contained in this transcript are subject to a number of risks, trends and uncertainties that could cause actual performance to differ materially from these forward looking statements. A number of those risks, trends and uncertainties are discussed in the company’s SEC reports, including the company’s annual report on Form 10-K and quarterly reports on Form 10-Q. Any forward looking statements in this transcript should be evaluated in light of these important risk factors. Gannett Co., Inc. is not responsible for updating the information contained in this transcript beyond the published date, or for changes made to this document by wire services or Internet service providers.

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