GANNETT CO., INC. THIRD QUARTER

CONFERENCE CALL AND WEBCAST OCTOBER 12, 2004

PRESENTATION

Operator Good day and welcome to today's Gannett third quarter conference call. This call is being recorded. Our speakers today will be Mr. Douglas H. McCorkindale, Chairman, President and Chief Executive Officer, and Ms. Gracia Martore, Senior Vice President and Chief Financial Officer. At this time I would like to turn the call over to Ms. Martore. Please go ahead, ma'am. Gracia Martore – Senior Vice President and Chief Financial Officer Thanks very much and good morning. Welcome to our conference call and Webcast today to review our third quarter results. We hope you had a chance to review the press releases we issued this morning, which also can be found at www.gannett.com. Since we know this is a busy time for all of you we will keep our comments relatively brief. With me today are Doug McCorkindale, Chairman, President and CEO, and Jeff Heinz, Director of Investor Relations. Very briefly as you saw this morning we earned $1.18 per diluted share this quarter, matching the consensus of estimates as of last Thursday morning. But a late entry moved that rounding up another cent. In the third quarter of 2003, the comparable number was $1.03. I would like to detail a few other areas before I turn the call over to Doug. First, an update on newsprint. At best we can say is that newsprint market conditions are a mixed bag. Daily publisher consumption continues to trend below year-ago levels, offering very little support for higher prices. Yet mill operating rates remain elevated because producers have chosen to idle capacity or convert to other paper grades. Despite the announced September 1 increase of $50, average transaction prices barely moved during the period. In fact, two large producers recently acknowledged the weakness of market fundamentals by officially moving their implementation date from

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September 1 to October 1. We have yet to see consistent or substantive support for higher prices. For the quarter at Gannett, reported newsprint expense was up about 15% which consists of a 12.4% increase in price and a 2.4% increase in usage. On a constant currency, pro forma basis, newsprint expense increased 12.8%, with price up about 10% and usage up a little over 2%. In other expense areas, we continue to focus on prudent cost control. During the quarter, our reported expenses increased 12% for the newspaper segment. Acquisitions, currency and newsprint impacted that increase. Adjusting for acquisitions and currency and excluding newsprint, newspaper segment expenses rose about 5%. In addition to higher benefit and sales costs in the quarter, we also had substantial expenses related to the single copy price increase at USA TODAY and also hurricane-related costs that impacted our Southeast properties. As you also may recall, expenses in the third quarter of 2003 were mitigated by a benefit stemming from changes in certain retiree benefits at U.S. locations that did not repeat this quarter. We also continued to invest in our non-daily initiatives during the quarter. Our strategy to develop non-daily and niche publications continues to be a strong contributor to our revenue growth. For the quarter, non-daily revenue – which again does not include publications such as Clipper, or Nursing Spectrum or Army Times – was up 26%, Clipper’s year-over-year over year revenue growth in the quarter was approximately 46%. We are very pleased with the growth of these initiatives and acquisitions. However, it is also important to remember that the margin for the non-dailies is lower than our daily newspapers and in the mid teens for Clipper. Turning to the balance sheet for a moment, total debt at quarter end stood at $4.58 billion and cash and marketable securities were about $120 million. At this point, our all in cost of debt is about 3.26%. Capital expenditures for the quarter totaled roughly $73 million. At this point we are on track to spend about $280 million on capex for the year, including the ramp up of Captivate’s elevator build-out. With respect to shares outstanding, basic shares at the end of the quarter were 257.1 million, and averaged 261.1 million for the quarter. We repurchased opportunistically 10.1 million shares during the quarter. Year-to-date our repurchases totaled 16.5 million shares at a total cost of approximately $1.4 billion. Finally before I turn the call over to Doug, our conference call and Webcast today may include forward-looking statements and our actual results may differ. Factors that might cause them to differ are outlined in our SEC filings. This presentation also

includes certain non-GAAP financial measures and we 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 Web site. And with those legal issues behind us, Doug, I will turn it over to you. Douglas McCorkindale, Chairman, President and CEO of Gannett Thanks, Gracia. Good morning, all. As most of you will remember at the Mid-Year Media Review in June we noted that we were seeing an improved advertising environment although a few of our ad categories were presenting some challenges. Basically this trend continued thoughout the third quarter. As you saw from the press release this morning, net income and operating revenues increased over 11% for the quarter. On a pro forma, constant currency basis, operating revenues were up almost 7%. Our third quarter revenue stats reflected solid advertising demand led by employment and real estate in the classified category which increased over 20% and 14% respectively. In addition, our broadcasting segment revenues increased 18%, benefiting from the Olympics and the political revenue picture. However, as Gracia mentioned, our results were tempered by the series of hurricanes that moved through Florida in September. Just about every one of our properties were hit by the hurricanes. The impact of the hurricanes reinforced, though, the importance of our local news and information franchises – print, broadcast and online – to the communities which they serve. And our dedicated employees delivered for those communities with the support of the entire Gannett family of resources. One of our Pensacola News Journal readers – and as most of you know Pensacola was severely hit – wrote to us saying: “On behalf of the several thousands of people across the U.S., I would like to recognize the family that is the staff and workers at the Pensacola News Journal for their efforts during Hurricane Ivan. If there's a medal of honor for news reporting and public service, they have earned it.” Many of our employees are listening in on this call and let me thank all of them for the efforts that they performed in Florida, which was above and beyond anything we could expect. As you might imagine, the hurricanes limited our ad demand while preparation for and recovery from the storms have added to our expense picture. Our Florida properties, for those of you who are interested, contribute about 5% of our top line. So the impact has not been inconsequential. We expect some recovery in terms of ad demand although it's a little early to tell how much. This is particularly true in Pensacola, where thousands of homes and businesses were significantly damaged or destroyed completely.

Moving to a more detailed review of our results: Local advertising in our newspapers rose 7.5% in the quarter. In the U.S., across all products, the furniture, health, financial and home improvement categories were strong during the quarter while the department store, entertainment, grocery and telecommunications categories trailed last year's results. Classified revenues in our newspaper segment were up almost 12% in the quarter. Help wanted grew by 20.4%, real estate was up at 14.1%, but auto continued to be challenged and was down 2.1%. Our employment numbers in the U.S. increased over 21% for the third quarter. In the quarter, about 78% of all of our domestic newspapers had employment revenues above 2003, and about 44% actually had double-digit gains. Properties located in the Southeast and the West continued to lead the improvement in employment. In automotive, in the U.S., softening began in the second quarter and continued throughout the third quarter. Auto was down over 6% in September, and 4.6% for the third quarter. Overall, domestic auto remains weaker than foreign. National advertising was up 8.7% for the quarter. USA TODAY's ad revenues were up 10.2% for the quarter, reflecting stronger demand for color and the impact of pricing. The majority of the top ad categories at USA TODAY increased significantly for the quarter. However, travel, retail and telecom declined compared to the third quarter of last year. The auto category – in contrast to our community newspapers – was up over 20% for the third quarter. Over the course of the quarter, retail advertising improved while classified and national softened. We believe this revenue shift is attributable primarily to two factors: First, the Labor Day weekend was in September whereas it was in our August period last year, which helped local advertising but tempered classified advertising. And, the difficult comparisons USA TODAY faced in the latter portion of the quarter had a significant impact on our national numbers. USA TODAY, by the way, will continue to face tough comparisons in the fourth quarter as advertising and revenues increased almost 10% in the same quarter last year. As we previously announced, USA TODAY increased single copy price from 50 cents to 75 cents on Tuesday, Sept. 7 – that’s the day after Labor Day. And, as Gracia noted, the costs associated with the conversion of the coin mechanisms and the promotions did impact our third quarter results and will impact the results for the upcoming quarters. Just five weeks after the price increase was announced and put into effect, we appear to be doing a little bit better than expected. It's really too early to tell for a definite assessment and we will update you all at the year end conferences. But so far the news

is positive. Although we expect the price increase to be a positive contributor to the bottom line in 2005, expenses associated with the price increase will exceed revenue gains for the balance of 2004. We continue to invest in our non-daily and online products and they continue to add to our revenue growth. Online revenues for the entire company grew over 56% for the quarter and over 55% year-to-date. At this pace, we are on track to have about $200 million of revenue from our Internet activities this year. While we are a couple of days away from having revenue numbers for the CareerBuilder Network for the quarter, we anticipate they will have experienced another significant increase both year-over-year and sequentially from the second quarter of 2004. The CareerBuilder Network continues to lead the industry in traffic delivered to employers as the Network had more than 15 million unique visitors in August, which is a 114% increase year-over-year. Turning to our U.K. operations, they again delivered very solid results. Pro forma revenues for Newsquest for the quarter – in pounds – were up almost 6%. Costs, as always, were well controlled and as a result, Newsquest’s NIBT, again in pounds, was up 10%. The exchange rate was very favorable for the quarter. Turning to broadcasting, the segment results now include Captivate. As noted in our earnings release, excluding Captivate, television operating cash flow was up over 35% for the quarter. Revenues increased more than 17 percent, while operating expenses were a little over 2% higher compared to the year-ago quarter. The Summer Olympic Games contributed significantly to our quarterly broadcasting results, generating approximately $25 million to $30 million in advertising during August. Politically related ad spending was also a significant contributor. Some interesting developments, though: Political spending, while strong early in the quarter, slowed down in late August and September as the presidential candidates did not commit their substantial war chests. Election-related advertising has picked up in October and, with three full weeks to the election, we will have to wait and see. But so far it looks like they are beginning to spend their war chest and spend it aggressively. Excluding political, several of the top ten advertising categories for broadcasting improved, including auto, retail, telecom and media. However, overall our core business is not as strong as we had anticipated. Our latest pacings for the fourth quarter are up in the low double-digit range with October stronger than November, obviously reflecting the political ad spending. But

both November and December are positive at this point. National is stronger than local. Pacings, however, continue to be very volatile and are subject to weekly change. That's where we stand right now and we will keep you updated in our monthly reports as we always do. Looking forward to the fourth quarter, we are focused on a few factors. As we have stated on a number of occasions, we believe the economic recovery, while positive, will be choppy, and not as robust as some were predicting at the beginning of the year. Regarding the comparisons we face: Our results in the fourth quarter of 2003, while not up to our pre-Iraq war expectations, were solid and led the industry. Total advertising was up 6%, national classifieds had increased 11% and 8% respectively. And our employment advertising was up 4% in the fourth quarter of last year. Similarly, our broadcasting segment has garnered significant Olympic and political dollars that will not be part of November and December. The post-election advertising environment is difficult to assess at this point. We will keep you up to date, but it is a mixed message we are getting and we want to make sure you understand that. When we view the diversity of our print product both domestically and in the U.K.,the value of the USA TODAY brand and our top local news ratings at our TV stations, put them all together and we expect to finish the year with a solid fourth quarter and the 2004 results will exceed our record performance in 2003, barring some very strange events. Gannett expects to continue to post industry leading results. We have the largest system to gather, process and distribute information in markets both domestically and the U.K. Our strategy is to maximize our presence in our markets through a variety of products focused on various segments of the market. Getting information to people how they want it, when they want it and where they want it is our strategy. Now I will stop and Gracia and I will take questions from you all.

QUESTION AND ANSWER Christa Sober - Thomas Weisel Partners A couple of questions. I got the Olympic contribution but I didn't get the political contribution in the third quarter, if you can give us that. And also the currency contribution for the third quarter if you could, Gracia. I was wondering. It sounds like you are tempering our expectations here for the fourth quarter a bit, noting some of the

difficult comparisons. As you look at it, particularly on the classified side, certainly help wanted starts to ramp up in the third quarter. And, if you could just explain why auto classified is so weak given the glut of inventory out there in the dealers? Thanks. Douglas McCorkindale Let me go first and Gracia can fill in some of the numbers. I don't know whether we are tempering your expectations but we are trying to make sure that people don't just assume that there ‘s a straight line improvement. As we said in June, the results have been a little up and down. As I just mentioned in the broadcasting segment, for example,X political, there's some mixed messages in the core business. Some parts of the country are doing better than others. If the message was all extremely positive Mr. Bush presumably would be telling you about that. It's not happening. It's positive. It's doing well, but it's not a consistent line. And Gracia, you might want to fill in on the numbers. Gracia Martore On the political side, we probably had about $20 million to $24 million of political net in the quarter. On the currency side, the contribution from currency was a little over 2 cents in the quarter, similar to what it was in the second quarter. But again, as we suggested at Mid-Year Media Review, the currency comps get a little more difficult. Currency averaged $1.81 or so this quarter. In the fourth quarter of last year, it averaged $1.69, and it averaged $1.61 in the third quarter. So we will have a little more difficult comp on the exchange rate side. I would echo what Doug said, which is: I don't think we are tempering any more than what we said at the Mid-Year Media Review in June. There are plusses and minuses and we just need everyone to keep all of those in context as they think about the fourth quarter and beyond. Christa Sober - Thomas Weisel Partners And any insight on the auto classified side? Douglas McCorkindale As I said, in the community newspapers we are definitely seeing a softening. There's no doubt about that. It started a little bit late in the second quarter and continued through the third quarter. The automobile dealers simply are not as optimistic about their results

as some of the manufacturers are. And the manufacturers are obviously doing well in pushing their products, as is reflected in USA TODAY and in our broadcasting. Again on the broadcasting front it's positive but not as robust as we had predicted. Douglas Arthur – Morgan Stanley On political and TV, I was wondering if you could be a little bit more specific in terms of markets. Obviously, you have a lot of leading stations in some of the key markets. Where do you think you will see strength in October and where perhaps, based on polling, may you not see it? And then a follow up on the acquisition front. Would you consider, given some of the valuations, getting back into cable at any point in the future? Thanks. Douglas McCorkindale Doug, we like the cable business but, as you know, we got in at less than $2,000 a subscriber and got out at $5,300 per subscriber. From what I hear, the numbers are not down in a range that we could find acceptable at this time. But we did like the business, so it's a question of what's out there. However, I don't think we can be a serious player because some of the other major owners are simply going to have more efficiencies in putting the pieces together than we are. On the political question, as you referred, many of our stations are in the right states. But as I mentioned in the prepared comments ,we definitely saw a slow down in late August and through September. It's clearly picking up now and I'm assuming it will pick up in Missouri, in Cleveland, in Ohio. We are seeing a little activity in Denver, although that's more Senate related. Florida, although there's a lot of mixed thing going on in Florida because of the hurricanes. There is some in Arkansas and in Minneapolis, we should see some results. If they are going to spend the money, we've got the ratings at the stations and we will get it. It's beginning to pick up. As you know most folks think that both campaigns have something like $120 million to $130 million each to spend between soft money and the Federal money and they've got to spend it in the next couple of weeks. So we are optimistic that it will be spent on our stations, at least a big piece of it. Steven Barlow – Prudential Equity Group Thanks. Doug, what have you and the audit committee done over the last four months in light of the circulation scandal and can you say that you are clean and worry-free?

Douglas McCorkindale Many of the things that our friends in the industry are now initiating have been part of the Gannett process for four or five years, if not longer. We had certifications from our circulation people and from our local controllers and from our publishers. And we have been focusing on circulation accounting for a long, long time. So I don't think we've done anything new. Gracia? We've continued what was in place and hopefully there are no problems out there. We are not aware of any concerns any place in the Gannett company. But you may want to add to that. Gracia Martore Steve, as Doug said, we've been vigilant about circulation numbers for a very long time. But, as you would expect in the wake of some of the issues in the industry, we've gone out and reemphasized our circulation practices and procedures, which we would expect that most folks have done. As Doug alluded to, we’ve had the senior circulation exec at each one of our newspapers sign our ethics policy on a yearly basis. They participate in the quarterly rep letter process as part of our quarterly financial review and they began that long before Mr. Sarbanes and Mr. Oxley got together. In addition, if we have a home delivery or single copy manager in a particular location, they are also part of that quarterly rep letter process. We have a lot of control surrounding circulation at all of our business units, including the ABC book being housed in the finance area rather than in the circulation area. So we think we have tempered the level of control with the potential for risk. And we've tried to balance those two things with the idea that you can't catch everything that will happen. But we would hope that our controls would at least catch things early on in the process if you have someone who is particularly bent on trying to gain in the system. But we think that we have good controls in place. Steven Barlow – Prudential Equity Group Fair enough. Switching subjects, how is the cost of oil and energy impacted you and how do you foresee that as you are doing your budgeting in 2005? Gracia Martore On the circulation distribution part of the equation, as oil prices started to increase we had to take a look at that issue in specific places and in specific markets as well as for any of the occupations where our employees use automobiles or we use automobiles or

trucks to either deliver products or look at other things. So we are going to have to continue to be mindful of that, particularly if oil prices remain at $54 per barrel. It also has had some impact on things like the cost of plastic and other materials we use in some of our supplies. Steven Barlow And newspaper margins have been lower each of the last three quarters. I understand the new product side of things. Would you expect we would see newspaper margins lower again in the fourth? Gracia Martore In the fourth. When I think off the top of my head as Doug mentioned earlier, at USA TODAY we had a pretty significant expense related to the coin mechanisms and the promotion campaign. Some of that promotion will continue into the fourth quarter. Also we won't – hopefully – have any of those hurricane-related expenses. We will have some benefit from the retiree issue in the fourth quarter of last year that we will have to compare against. It's all going to depend on where the revenue side of the picture comes out. We will control everything we can control to the best of our ability. But the newsprint side of it, the USA TODAY piece as well as the new product initiatives you alluded to, those are very important and we are going to continue to focus on them because that's part of the longer term strategy and we are not going to just focus on it on a quarterly basis. We’ll have margins that will be strong. Where they will end up, we will just have to see how the revenue picture plays out. Douglas McCorkindale Some of these new products, Steve, the margin is lower going in and will improve in the upcoming quarters and years. But you don't want to push the margin too much on the early end of the start up and hurt the product. It will pick up. Edward Atorino - Fulcrum Global Partners You talked about the USA TODAY costs and the hurricane costs. Would you care to put a number on those things? Douglas McCorkindale

Add them both together – for the whole second half of the year, not the quarter – they are going to be $10 million to $15 million. I’m giving you the full picture for the year for the hurricane costs and USA TODAY. The hurricane costs are a little hard to tell you about, Ed, because if you saw the story in USA TODAY yesterday about Pensacola? Pensacola got hammered. Big time property damage there. And we got hit in Melbourne twice and over in Fort Myers the first time. If you add up all of the costs related to the hurricane and to USA TODAY for the third and the fourth quarter, it's going to be in the $10 million to $15 million range. Edward Atorino - Fulcrum Global Partners Any noticeable change in – what are we in October here? – October ad trends in the retail area or any other newspaper categories? Douglas McCorkindale Little early to tell. We are just not seeing it. We saw a little improvement in retail in the very last week of September. And hopefully that's continuing. But as I said earlier, lots of mixed messages out there and it depends on the market. Some markets are clearly doing better. And that's true on the employment picture, too. We are getting much better results in some markets than we are in the others. As I mentioned in the Southeast and the West the numbers are stronger. So it's a market by market. I don't know the October results except to say that it did pick up a little bit in the last week of September. Bill Bird – Solomon Smith Barney I was wondering if you had an early view on trends at USA TODAY for October and, specifically, I was wondering if you can see any kind of pick up in newspaper travel or entertainment advertising, thanks. Gracia Martore In September, interestingly, travel was a category that was a good category for them whereas in August it had trailed the prior year. So travel actually picked up for them in September. They had good follow through on the auto side as Doug alluded to earlier. I think on the USA TODAY side it is probably a little early to say but we’ve got to be mindful of the fact that in October of last year, USA TODAY’s revenues were up 15%.

So we are going to have a tough comp to go against. And I say at this point probably it's looking more like September than August from a comparison standpoint. But it's so early in the quarter that it's hard to say. Craig Huber – Lehman Brothers Good morning. Thank you. For non newsprint, I think you said the true number was up 5% in the quarter. Would you expect that to be up at a little bit lower rate in the fourth quarter? Douglas McCorkindale Well, I think the USA TODAY expense, as I said in my comments to Ed, we are going to have a little bit more hurricane, hopefully just a little bit more hurricane expense, mostly in Pensacola. Then the rest of the numbers, I don't see any particular trends one way or another, Gracia, do you? Gracia Martore No, no. Again we’ll have that benefit in the fourth quarter of last year which won't repeat. But that's a little less problematic than it was in the third. Nothing that jumps out at us. Douglas McCorkindale Not unless business gets very, very strong and or goes the other way. Right now, as we said earlier Craig, it's a mixed, improved message. It keeps improving but it's not consistent. It's bouncing around a little bit. Gracia Martore We will have some impact of election coverage expense, that kind of thing, but in the big scheme of things it's not going to be big. Craig Huber – Lehman Brothers

Are you saying, just to be clear, a little less than 5 percent? What's your sense? Douglas McCorkindale It's a maybe. It's a maybe. It's a little too early to say. Optimistically I think that's our goal but it's just a little too early to say. Craig Huber – Lehman Brothers Then lastly if I could, on the hurricanes, what is your history in terms of the ad revenue trends you've seen in similar papers over the years? How long does it take for advertising to come back? Could you walk us through what you've seen over the years? Douglas McCorkindale We don’t have had a lot of experience. We haven't had anything like this in the Gannett company. Pensacola had a hurricane several years ago, but it was diminimus compared to this. I talked to some folks in Pensacola yesterday. All of the houses on both sides of the person I talked to are simply gone. They still have sewage systems in downtown Pensacola that are not working. We don't have any order of magnitude to compare this against. Having said that, the report I had from Pensacola this morning indicated that advertising is coming back. A lot of out-of-town folks, huge roofing contractors, are coming in from Texas and elsewhere because most of the houses have lost their roofs. There's a lot of finance companies advertising, trying to help folks out, and insurance companies. I'm told that it does pick up after all the disaster is past and people have to start thinking about the future. But we don't really have a good frame of reference to compare it to. Gracia Martore One of the first hurricanes went through and impacted Fort Myers in this string of hurricanes. And frankly, when all was said and done, because it wasn't a dead on hit, things got back to normal and there wasn't a big blip on the screen. But as Doug said, Pensacola has really been quite impacted. It’s going to take time. As we mentioned earlier, there are a number of businesses that simply don't exist any more. It will take some time for things to get back on track. It's good to see that thing are starting to pick up a bit. Fred Searby - J.P. Morgan -

Thank you, Doug, Gracia. Just a couple of questions. Does the new corporate tax bill in any way affect your tax rate in a material way, given your foreign holdings? Secondly, obviously you've been very aggressive on the share buy-back side. And I'm wondering what your view is going forward if the shares were to weaken somewhat, where are you willing to take leverage and leverage up the balance sheet, if you could give us some thoughts there? Douglas McCorkindale We haven't discussed that latter issue with the board. But as you know we've been opportunistic about buying back the stock when there's not other uses for our money. We will just have to wait and see. We are not predicting the stock going to a lower level. We are assuming after this call it will jump. As to your question on the new tax bill, I read all the reports I could find on it this morning and I can’t find anything in there that's helpful to us. On the other hand, there's nothing that's detrimental to us. Which is good when you are in Washington because you never know what they can do to help you in a negative sense. Lauren Fine – Merrill Lynch Gracia, could you break out the impact from the third and fourth quarter a year ago from the post retirement? Was it roughly, maybe $25 million in one quarter and $5 million the next, or was there a different breakdown in that? Gracia Martore As we reported in the 10(K) for the year, in total for the year it was about $31 million. Substantially more of it was in the third quarter than the fourth quarter although there was a little impact prior to that. But I'd say it was probably in the high single millions or so in the third quarter and a little less in the fourth quarter, if not a little bit more in the third quarter. Douglas McCorkindale We don't have that number in front of us, Lauren, but it was split a little bit more than you suggested.

Lauren Fine – Merrill Lynch That's fine. I'm wondering. It feels like the rate of gain of help wanted has slowed. I know you've given the comment that it's been pretty variable across the country. Any sense as you look at your comparisons going forward of whether you expect that, in total, to hold steady? And is there a way to break down the rate of growth that you're seeing in print and on line? I know you look at them together but it would be helpful to hear the difference. Douglas McCorkindale Let me give you a general comment while Gracia sees if she has any specifics. I think there's room for improvement because, as I said earlier, not all of our markets are above 2003. So there's still a number of markets that could improve. And yet some of them are growing much more aggressively than others. There's room for some catch up. But as to a break down between online, since we sell most of it together, I don't know whether you have any specifics on that. Gracia Martore We kind of look, Lauren, as you can appreciate now, at the two as being integrally tied together and that's why we include the online with it. I can tell you just off the top of my head that clearly both print and the online components are positive so it's not that the print side is negative and the online side is what's driving it into positive territory. They are both quite positive. But I just don't have those underlying numbers. Douglas McCorkindale We give employers the opportunity to pick one or the other or to buy both. And I'd say 98% are buying both. So they are moving in the same direction at the same time. It's in the same markets. The Southeast and the West seem to be growing better than some of the middle America towns. And that's why I think there are some opportunities if the jobs come back in some of those communities for those numbers to improve. Lauren Fine – Merrill Lynch

Okay. Then just two other quick ones. On USA TODAY, I appreciate the help you've given us between that and the hurricanes. But if you could tell us, in the third quarter or better yet in the fourth quarter, how much cost will increase revenue, specifically related to the increase in single copy price? And then last question is on Captivate. If you could give us a sense of the magnitude of the cost of the build out and the timing? Douglas McCorkindale I'm not sure I understand your USA TODAY question. Lauren Fine – Merrill Lynch To the degree that the costs incurred in terms of the conversion of the boxes, et cetera, exceeded the revenue gain that you got? If you could help us understand how much the costs were greater than the revenues in the third quarter or what you think that mix will be in the fourth quarter? Gracia Martore What we said on the USA TODAY issue is the same as we said at the Mid-Year Media Review: The cost and mechanisms in total will be around $9 million or $10 million; that we are going to spend several million dollars on promotion and an ad campaign starting mostly in the third quarter. We are done with the coin mechanism conversion. That had to be pretty much completed by September 7. The ad campaign ramped up in late August - September, and will continue to be ramped up. But we won't have the coin mechanism piece in the fourth quarter nor in the first quarter of next year. So that sort of gets you an order of magnitude. Douglas McCorkindale You add those thing up and it will exceed the net number we get, less 25 cents that we get from the coin machines and from the news stand dealers. That's what we are saying. I don't have a breakdown of how many pennies come from which direction versus the other. We are telling you we do not expect to get over whatever it is, $10 million to $15 million, from the costs in the last couple of months of 2004. We do expect as those costs are behind us to have a positive impact in 2005. Lauren Fine – Merrill Lynch

Then just on Captivate. Any kind of comment you can give us on the timing of the roll-out, I mean the build-up and the cost? Gracia Martore On the capital side, there is several million dollars of capital that's associated with the Captivate build-out this year. And there will be a bigger amount that will be associated with the build-out next year. We are just a little early on the capital side. We haven't yet gone to the board with the capital budget. But obviously the Captivate build-out next year will be more significant than it was for us this year on the capital side. But as we mentioned to you, we are in an investment mode at Captivate from a P&L standpoint. So those expenses have exceeded the revenue that we generated and will into next year. John Janedis - Banc of America Securities You mentioned margins for Clipper. Is it fair to say that the rest of the non-daily portfolio is in that range as well, or maybe slightly below? And can you give us your thoughts on the potential margins a few years out for those papers? Thanks. Douglas McCorkindale John, the margins for the non Clipper piece of non-daily is higher and is increasing, as I said in reference to somebody's question earlier, as the products roll-out. Then when Gracia was commenting on the Clipper margins she was indicating it is on the low side of that non-daily, not on the high side. Gracia Martore Just so you understand, John, we are not managing that part of the business for margin. We are managing to bring more dollars to the bottom line of the Gannett company. And we are delighted that a Clipper has a 46% revenue growth rate. While it has margins in the mid-teens, and there's potential there to improve that side of the equation, we are delighted to have that top-line growth and the dollars that brings to the bottom line – similar to what we feel about our non-daily side. We are delighted to have 15% margin or a 20% margin on $100 million of revenue rather than a 50% margin on $2 million of revenue, being simplistic about it.

Peter Appert, Goldman Sachs Can you tell us what's left on the share repurchase at this point? And Doug, can you share with us some preliminary big picture views on what ’05 might hold for Gannett company. And in particular I'm wondering if the 5% underlying cost growth you talked about in the fourth quarter was a starting point we should think about for next year. Gracia Martore Peter on the share repurchase side, as we said we spent about $1.4 billion through the end of the third quarter. We had a total of almost $1.8 billion in authorization this year. So at the end of the third quarter, we had about $400 million remaining. Douglas McCorkindale On the cost side, Peter, I would hope we wouldn’t be in the 5% range but it will depends on where newsprint goes. I know the health cost picture is beginning to solidify itself into an acceptable range, but a range where we know where we have to go. On the other side of the equation, 40-plus percent is payroll and related fringe benefits. If the wage picture stays reasonable it, too, will be beneath that number. I think we can do a little bit better next year but we haven't done the budgeting yet for 2005. All that is in the process now and as you know we let it come up from the bottom rather than dictate it from the top. Our managers understand the revenue picture and the cost picture and they will control the costs. I'm optimistic it will come in less than that. Peter Appert, Goldman Sachs How about from a revenue standpoint does your gut say '05 is going to be a replay of '04? Douglas McCorkindale I don't know, Peter. I thought '04 was going to be better than it's turning out to be. As I said numerous times, the rate of growth is positive but it’s choppy. And so we've been wrong here, although we are doing better than most if not everybody else in our business. I don't know what to expect. I want to wait and see 100-some odd Gannett locations tell us what is happening in the American economy. We have a great benefit from having all these properties. We have all these microeconomic models and they

come in and we add all the pieces together. Clearly on the broadcasting side, you are not going to have the Olympics and political advertising. So they’ll struggle as they always do in the off years. Years ago, you didn't have that but now the swings are very noticeable. As the economic picture picks up, I think we will do fine. We will get the dollars if they are there. Bill Drewry – Credit Suisse First Boston It sounds like once political advertising is over, TV is going to be running maybe in the low, lower single digits. Is that right? Gracia Martore That's where our pacings are at the moment, Bill. In November and December. But again it's really too early to the say. Douglas McCorkindale But the core business, Bill, is not as strong as we had anticipated. Auto is 30-plus percent and it's a little bit of a mixed message. The community newspapers are not doing well in auto. USA TODAY is doing very well but broadcasting is sort of in the middle. We’ve got to see what happens to that core business. And with this inventory switching all around with the political gains, we are just getting too many mixed messages. So, we’ll know in a little bit, a couple weeks here. Bill Drewry With the newspaper cash flow growth up 5% in the third quarter, X new investments, non-daily revenue and the costs associated with that and acquisitions, would that number in core domestic newspaper business, or you can include Newsquest if you want, would that profit number, growth number have been higher or lower X the new stuff? Douglas McCorkindale Higher, it's got to be higher but I don't know order of magnitude. If you take out the USA TODAY expenses just for the price increase and the vending machines and then you take out all the start-ups for the non-daily. If you put all the non-daily pieces

together, Clipper and everything else and we’ve got over $700 million in revenue there, so we are spending some money and we are making some money. And we will make even more. But I can't -- Gracia Martore Our margin, if you take out the start ups and the Clippers and all the other one off items as Doug mentioned, yes, our margin would have been higher. But would our total dollars of cash flow have been higher? No. Bill Drewry No. No, I'm just talking growth rate, not absolute dollars, obviously. Gracia Martore Yeah, our growth rate would have been -- Douglas McCorkindale Yes, it would have been higher. Bill Drewry – Credit Suisse First Boston Perfect. Last question, on retail and this is a little bit bigger picture as well. I think you said it was up 6.1% for the third quarter pro forma and on a constant currency basis. Just wondering, do you have that number for just the U.S. market? And just again bigger picture, wondering, do you think, Doug, that that is a cyclically driven number at this point? We've heard talk about discounters, et cetera, continuing to weigh on retail results. It seems like a pretty robust number considering how weak consumer spending has been versus expectation in the U.S. this year. Do you think there's any secular issues that play here in retail or is that purely a cyclically driven number at this point? Douglas McCorkindale

A big piece of our growth numbers is something from the small and medium-size retailers. As you know we've been emphasizing that. For a long time now. The big guys, the top 15 as we categorize them, are still sending us mixed messages. But, to give you a gut feeling, I think the consumers are a little bit more cautious now than they were X months ago. Although they did come back in the last week of September. So it's bouncing around. The concern that we've had this year is the lack of the straight line easy to predict numbers. So I'm having trouble knowing which way it's going to happen, Bill, because the messages are not clear. But, Gracia, to get to Bill's question, Newsquest doesn't have that much. Gracia Martore If you look at our local number excluding Newsquest, all products, our local advertising domestically would have been up a little over 6% for the quarter. So we are seeing that growth domestically. In part, it is because we cycled some of the cuts from the department stores over last few months and in fact in period nine saw a little better follow-through from some of the department stores. But we will just have to wait and see how that also shakes out as we get into the holiday season. Douglas McCorkindale Some of the big ones in the top 15 are up and some of them are down. I'm just looking at a chart here, there doesn't seem to be any consistent pattern. Obviously K-Mart is down, but the rest of them, some are up and some are down. James Goss – Barrington Research Thank you. I have a couple of them, actually. One, first a remark. Doug, your description of the economic picture as being positive but choppy seems consistent with what you said for about two years. Douglas McCorkindale At least a year. James Goss

I think maybe even two but you've done pretty well during the course of that. I'm wondering is that how this entire upturn plays out and if so can you deal with it as you have been dealing with it? And also with classifieds, can you categorize how you've been doing by market size, whether the larger markets or smaller markets have done better relatively speaking, not that you are very large. And talk about the shift to online, the proportionate mix? And then a couple of other side things. Are there any other international market opportunities like the U.K. that you see? And with regard to M&A, you mentioned cable. Are you looking at radio again, given that those public market values are very depressed? Douglas McCorkindale You have a whole list there. Let me bounce around and cover them and Gracia will look up some of the numbers at the same time. Maybe start at the end and go backwards. We look at a number of things on the international front but, as you know, we are cautious about being able to manage them. And the U.K. has worked out very, very well for us because we had a wonderful management team. We have looked at a few others, but…. There's nothing on the horizon that we can see. There are some international opportunities available but in my view some of them are because the locals have decided they don't want them and some folks are trying to unload them on companies in the U.S. that seem to write checks. But we are not going to be one of those companies. On radio, we are not looking at anything in radio of size right now. There are some small station opportunities that may fit with Gannett newspapers but we haven't been approached and we are not looking at anything in radio. We did well in the radio business and got forced out because of the cross ownership rule. So we like the business but we are not looking at anything. To go back to your first question on the choppy recovery and basically can we perform, well, yes. That's what we do for living. And you expect us to perform so all of our troops move in whatever direction is appropriate. It would be nicer if the lines were simple and clear and moving in the right direction everywhere but they are not. So each of the Gannett managers and publishers have to respond and that's true on the television side, too. They have to respond to what's happening. So we will get the performance that is there from every Gannett market. We cannot make it happen if it's not there but we will perform where the opportunities present themselves. As to the big and small market questions, that's more of a regional issue than it is a small and big market. You may recall that during the tough times of the last three or four years we had Gannett markets that actually didn't go down. They were mostly the small markets. So they never suffered too much and they are obviously not coming up very much

because they didn't go down. Some of our larger markets did get hurt. Some of them have come back and others like Detroit are really suffering. They still haven't seen the response. On the other hand, Phoenix has bounced back nicely and as I said earlier it's more of a regional result than a market size result. I can't remember every question. James Goss The only other one was classified mix shift -- Douglas McCorkindale Zero, as we said earlier I think in response to Lauren’s question. We are selling them either combined or separate and we are selling them about 98% if it goes online and if it's in print, just in print or in print and online. We’re getting very few folks asking for just online on a stand alone basis. Obviously CareerBuilder is a different bag from the rest of it because they don't have a print combination to sell but it's sold on an uptick basis from the Gannett papers and from the Tribune and from Knight Ridder. This is true in the U.K., too, by the way, that people who will by print will by the online. Not too many people are buying just online. It's a diminimus number at this point. We keep watching it but it's a joint sale in automobile or real estate or employment. Obviously employment is the biggest category to look at in terms of absolute dollars so we are following that a little more closely. That's what's happening in our markets. Operator At this time I would like to turn the call back over to our host today for closing and final remarks. Gracia Martore Thanks very much for joining us today. If you have any further follow on questions feel free to call Jeff at (703)854-6917 or me at 6918. Have a great day and thanks for listening in. 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.