GANNETT CO., INC. SECOND QUARTER …

                     GANNETT CO., INC. SECOND QUARTER
                       CONFERENCE CALL AND WEBCAST
                                       July 12, 2006




                                     PRESENTATION
________________________________________________________________________
Operator

Good day everyone and welcome to Gannett's second-quarter 2006 earning's conference
call. Today's call is being recorded. Due to the large number of callers we will limit you
to one question or comment. We greatly appreciate your cooperation and courtesy. Our
speakers today will be Craig Dubow, Chairman, President and Chief Executive Officer
and Gracia Martore, Executive Vice President and Chief Financial Officer. At this time, I
would like to turn the call over to Ms. Gracia Martore.

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

Thanks very much and good morning. Welcome to our conference call and Webcast to
review Gannett's second quarter results. Hopefully you've had an opportunity to review
the press releases from this morning, which can also be found at www.Gannett.com.
Since we provided a detailed update at the Mid-Year Media Review just a few weeks
ago, we will keep our comments relatively brief today. With me are Craig Dubow,
President and CEO and, as of July 1, Chairman. Also Jeff Heinz, Director of Investor
Relations. Craig will start off with an overview of the company's initiatives, and I will
follow up with some additional specific details on the quarter.

________________________________________________________________________
Craig Dubow - Gannett Co., Inc. - Chairman, President & CEO

Thanks Gracia and good morning all. We have been hearing now for quite some time that
the newspaper and broadcast industries ­ in fact, all of media ­ are under tremendous
competitive pressures. Along those lines today I want to reiterate some of the points we
made at the Mid-Year Media Review regarding our strategic efforts and the opportunities
that we see in our markets.

Gannett is about local, local content. Our strategic plan is based on our ability to gather,
package and deliver local content the way customers want. To do that we are enhancing
our core assets while we concentrate on continuing ­ I repeat, continuing ­ to quickly
build a robust and profitable digital business.




                                              1
The acquisitions of WATL Atlanta and KTVD in Denver are examples of that strategy.
Creating duopolies is a superb way to enhance our core assets, consumers and advertisers
benefit from stronger programming with a local focus. At the same time, we are boosting
efficiency and the bottom line.

In addition, in May we acquired Planet Discover, a provider of local search technology
that will leverage our community knowledge to provide a better product for our
consumers. Local search is just one area in which we see tremendous opportunity.

Our work in audience aggregation highlights the impact of our reach in our local
communities, a very important concept for our advertisers. Plus, we are delivering our
content in new ways and across a wide array of platforms that benefit both users and
advertisers. And we have the ability to deliver to a mass audience as well as target
specific demographics and interest groups for robust product mix. Listening to our
advertisers and consumers, and delivering what they want, is the driving force behind our
creative new approaches to advertising and online efforts.

Hyper local print and Web sites geared toward specific communities; Web sites that
engage in citizen journalism, conduct community forums and story chats; focus on youth
and prep sports and covering breaking news with video developed by our own
newspaper-based video journalists, are just some of the products and platforms we are
developing. They are creating some very, very good opportunities for us.

Now, turning to our results for the quarter: The broad trends we highlighted at the Mid-
Year Media Review continued in June. As you saw in our release this morning, Gannett
earned $1.31 per diluted share this quarter in line with our expectations. Overall, our
reported operating revenues for the quarter totaled over $2 billion and we generated over
$600 million in operating cash flow. A variety of factors, including the full consolidation
of Detroit, our asset swap with Knight-Ridder and stock compensation expense, had
impact on our revenue and expenses for the quarter. Gracia will walk you through that in
more detail in just a few moments.

Our domestic community newspapers generated revenue growth particularly in the local
and classified categories. Real estate ad demand drove the growth in classified, while
auto continued to lag. Our digital efforts and niche publications contributed strongly to
that growth. As anticipated, our June results softened in comparison to May, which were
the best for the year.

Geographical divergence ­ which for us meant stronger results in the far West and South
­ continued among our domestic markets. After a slow start in the first quarter, USA
TODAY's ad revenues were up almost 1% in the second quarter. They face tougher
comps, particularly in auto in the second half and visibility at this time remains very
limited.

Positive results in the U.S., however, were partially offset by soft ad demand in the UK
which persisted in June, although we are beginning to see some stabilization. Given the



                                             2
strong cost control in the UK, we will take full advantage of their operating leverage
when ad demand returns. Our broadcasting segment generated solid revenue growth for
the quarter as expected, benefiting primarily from strong political and issue-related
advertising and online growth. Based on the strength of our local stations and their
markets, we are well positioned for what we expect will be a very robust election season.

As I mentioned, we are focused on continuing to substantially expand our digital business
and, as a result, we delivered strong online revenue growth. Online revenues for the total
company were up about 29% for the quarter. Our domestic community newspapers
contributed to that growth with increased online revenue of 27%. Online revenues in our
broadcasting segment grew 63%, and USA TODAY.com grew 21%. Our latest monthly
numbers for June show our domestic Web sites had about 22 million unique users and
reached over 14% of the Internet audience. In the UK, Newsquest's online audience
totaled 3.5 million unique visitors with 46.1 million page impressions.

In addition, the CareerBuilder network continues to generate growth in revenues, up 42%
compared to the second quarter of 2005. Traffic for the network increased 16% and
averaged over $22 million for the second quarter.

With our niche and non-daily publications, we are able to deliver targeted audiences to
our advertisers while broadening our footprint in our local market. Revenue for the local
non-daily products, which do not include the Army Times, Nursing Spectrum or Clipper
Magazine, continued to be strong.

Finally, before I turn the call over to Gracia: Many of you are aware that Doug
McCorkindale retired at the end of June after a remarkable 35-year career with Gannett. I
would like to take just a moment to thank him for all that he has done for this company ­
through his financial acumen and his leadership ­ and for me personally, through his
support and counsel. I am honored to be able to succeed him as chairman. So with that,
let me turn the call over to Gracia, and we can move forward.

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

Thanks, Craig. Before we go into the detail on our quarterly results, of course I need to
remind you that 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 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 Web site.

Turning to the actual business at hand, several factors, as Craig said, impacted our
reported results this quarter. The full consolidation of 100% of Detroit's results affected
both revenues and expenses, and also the margin for the newspaper segment. Also, on the
last day of our 2005 fiscal year we completed the expansion and reorganization of the



                                             3
Texas New Mexico Newspapers Partnership. Our percentage of the net results of the
partnership is now included in Other Operating Revenues rather than fully consolidated
in the financial statement ­ similar to what we do with the California Newspaper
Partnership. Also, stock-based compensation expense of a little over $10 million
negatively affected our comparison to 2005. And finally, an unfavorable exchange rate
tempered our results a little bit in the quarter.

Let me fill in some additional details starting with our newspaper segment.

Our reported newspaper ad revenues were up 6.4% for the quarter. Assuming we owned
the same newspapers in both years, total advertising revenues in the segment increased
0.3%. On a constant currency basis, pro forma ad revenues would have been 0.6% higher.
For the quarter, pro forma advertising revenue at our domestic newspapers increased over
2% while ad demand at our UK operations continued to be soft.

At the category level, we experienced the same general trends we had been seeing ­
stronger results in the US compared to the UK, particularly for classified advertising.
Domestic classified advertising increased almost 2% compared to a 1.7% decline for
classified companywide. Real estate advertising for the entire company was up almost
11%. Again, real estate results at our US community newspapers were up 17%, stronger
than in the UK but the UK was also positive. As we noted at the Mid-Year Media
Review, the South and the far West continue to be significantly stronger than other parts
of the country.

Employment advertising for the company as a whole was down over 5% in the quarter.
Again, it was stronger in the US than in the UK, where it was negative. In the US
employment revenues were up about 1% for the quarter.

Automotive at both our domestic community and UK newspapers remained soft, down
over 15%. In our U.S. community newspapers, auto was almost 13% lower. Again, as we
noted at the Mid-Year Media Review, we have increased regional and local dealer
association spending in some of our markets from Toyota, Nissan and Honda. However,
that has not offset the domestic losses.

Pro forma local advertising in the newspaper segment was up almost 3% in the quarter.
Across all products the health, financial, restaurant and particularly the home
improvement category were quite positive, while the department store, grocery and
telecom and a few other categories lagged. National advertising revenue was down
almost 1% despite an increase in USA TODAY's ad revenues of almost 1%. Gains in the
entertainment, financial, telecom, home and building, advocacy and real estate categories
at USA TODAY were partially offset by weakness in automotive, travel, technologies,
and a couple of other categories.

Focusing on the UK briefly, revenues for Newsquest in pounds were down 6% in the
quarter. Newsquest operating profit again in pounds and including several million pounds
of expense for staff reductions was 15% lower. Strong politically related ad demand and



                                            4
online revenue growth drove our broadcast division results. Total revenues as you saw for
broadcast, including Captivate were almost 4% higher compared to last year. Total
revenues at just our TV stations alone were up over 3%. Local ad revenues increased 4%
while national was flat for the quarter.

Looking ahead, the latest pacings for the third quarter overall are up in the low single
digits compared to last year's third quarter. However, we anticipate political will pick up
strongly in the latter part of the quarter. Those dollars are not committed til close to air
time. So they are not reflected in the pacings that we shared with you today. That is how
we're pacing at the moment, although pacings can be volatile as you know. We will keep
you updated in our monthly report.

All of the items I mentioned at the beginning of this had a significant impact on the
quarter from the expense side as well. So as we have done in the past, let me try to sort it
out for you.

As I mentioned, stock-based compensation for the second quarter was $10.3 million.
About $6 million was allocated to the newspaper segment, about $1.3 million to
broadcasting and $3 million to corporate. The charge after tax was $6.4 million or $0.03
per share. In fact, excluding stock-based compensation expense, our EPS would have
been flat year-over-year.

Overall, our reported expenses are up 9.5%. However, again excluding stock-based
compensation, and on a pro forma basis, the company's costs increased 1%.

Looking at expenses for each of our businesses, in the newspaper segment our reported
expenses were 9.8% higher. However, on a pro forma basis ­ and that is assuming we
owned 100% of Detroit and the same complement of properties in the second quarter of
'06 as well as '05 ­ newspaper expenses would have been up slightly over 1% and
excluding stock-based compensation would have been less than 1%. Reported newsprint
expense increased slightly over 12% comprised of price increases of about 10% and
about 2% higher usage. Again, Detroit and other acquisitions had a significant impact on
this. On a pro forma basis, newsprint expense was up about 5% with usage down 5%.

Let me give you one last cut on the expense side, which you normally look for. Pro forma
newspaper segment expenses excluding stock-based compensation and newsprint
expense, increased less than two tenths of 1%. In our broadcasting segment, operating
expenses were up 4.7% on a reported basis. Excluding again stock compensation, costs
increased 3.4%.

Finally, reported corporate expenses were $3 million higher due entirely to stock option
expense.

Before I move to the balance sheet, I want to provide a brief update on newsprint.
Gannett had six-month price arrangements covering a substantial amount of our
requirements in the first half. These arrangements will continue through the second half.



                                             5
As you know, producers are seeking another $40 price increase effective August 1.
However, declining consumption and an oversupply in the western US are expected to
challenge these efforts. Looking offshore, Chinese producers are adding nearly 2 million
tons of newsprint capacity with 75% of that volume coming online by year end. We
believe a substantial amount of that tonnage will be exported to North America. In fact,
we are trialing Chinese paper in anticipation that it will be an alternative. Given these
dynamics, and as we've said before, it isn't unreasonable to suggest the marketplace is
approaching the upper limit on pricing.

Turning to the balance sheet, total debt at quarter end stood at $5 billion and cash and
marketables were $134 million. At this point, our all-in cost of debt is 5.3% with
commercial paper at 5.2%. We issued $1.25 billion of debt in May, comprised of $750
million of three-year floating notes based on three-month LIBOR, and $500 million of
five-year notes with a coupon of 5.75%. Capital expenditures for the quarter totaled
approximately $50 million and $91 million year to date, which is in line with our
assumption of $240 million for the year.

With respect to shares outstanding, basic shares at the end of the quarter were 236.7
million, and the quarterly average was 237.4 million. We repurchased 1.3 million shares
in the second quarter. We continue to balance our share repurchase activity with
acquisition activity. To date, we have announced or closed on a little over $500 million of
acquisitions, including Planet Discover, the California Newspapers Partnership, WATL
in Atlanta and KTVD in Denver. And that does not include funds that will be needed for
the resolution of the CareerBuilder situation. We will, however, remain active with share
repurchases in the second half of the year.

With that, we will stop and open it for questions.




                           QUESTION AND ANSWER
________________________________________________________________________
John Janedis - Banc of America Securities - Analyst

A couple-part question on the TV business if I could: Gracia, have your forecasts for
political changed at all? And does that low single digit number on the release that you
mentioned include the two TV stations you recently closed on?

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

John, first off we have only closed on the Denver TV station, and that literally just
closed, so those pacings wouldn't reflect the new station. For the other station in Atlanta,
we are still waiting for regulatory approval to come. Again, I would say that, on the TV



                                              6
side, we remain comfortable with the assumptions that we provided at the Mid-Year
Media Review for the full year of low- to mid- teens, and anticipate again that political
revenues will be very strong this quarter. But it will come in more towards the end of the
quarter rather than the beginning, which is the way our budget is constructed and you will
see pacings reflect that as the quarter progresses.

________________________________________________________________________
John Janedis - Banc of America Securities - Analyst

Okay, thanks. And do you think in some of the other categories...are you seeing any kind
of firming in the ones that you mentioned were soft at Mid-Year? Meaning auto and a
couple of others?

________________________________________________________________________
Craig Dubow - Gannett Co., Inc. - Chairman, President & CEO

You know, John, what we have seen is that auto in broadcast ­ as we reported at Mid-
Year ­ was down a bit. We are about flat at this point within the third quarter, which we
look at as a very positive at this point. The services sector is up significantly. Home
improvement is up significantly. Telecom is doing quite well. Medical and Dental is
doing quite well. There are a number of other categories right now that we are feeling
okay about, and the ones I just mentioned we feel much better about. When political
comes in, which we anticipate ­ as Gracia mentioned -predominantly in September, it
should round us out to be right into the forecast range we had. We are feeling very good
about that.

________________________________________________________________________
Debra Schwartz - CSFB - Analyst

I was wondering, can you just give us an update on CareerBuilder with respect to your
option to purchase (inaudible)?

________________________________________________________________________
Craig Dubow - Gannett Co., Inc. - Chairman, President & CEO

What I will say at this time is that we are continuing our negotiations. And, in typical
Gannett fashion, that is all we will comment on until we conclude.

________________________________________________________________________
Debra Schwartz - CSFB - Analyst

Is there a general timetable we can expect?

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO




                                              7
I would expect that there would be resolution of it by the end of the quarter, certainly.

________________________________________________________________________
Lauren Fine - Merrill Lynch - Analyst

I'm wondering if you could comment on how sustainable the cost performance was in this
quarter, and to future quarters, because it was pretty remarkable.

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

Lauren, our expense performance over the last few quarters, over and above what it has
always been historically, has been very strong. Our folks in the field have done a great
job of making their expense performance be in line with their revenue outlook ­ based on
where their individual businesses stand. As we get into the latter part of the year, and we
have a firming up on the revenue side, particularly with political, we will see some of the
costs associated with that. But we anticipate our folks will continue to do the strong job
they have done so far these last few quarters.

________________________________________________________________________
Craig Dubow - Gannett Co., Inc. - Chairman, President & CEO

I would just add that Sue Clark-Johnson's group really has moved in the proper way from
everything that we've asked Lauren, and we're very pleased and certainly expecting that
will continue.

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

As have our folks at Newsquest, who have really done a good job there.

________________________________________________________________________
Craig Dubow - Gannett Co., Inc. - Chairman, President & CEO

Certainly.

________________________________________________________________________
Lauren Fine - Merrill Lynch - Analyst

Relatedly, if you could comment on how things are going in Detroit, both top line but
also specifically on the cost side? How you are doing on improving margins there, at least
holding on, in view of the tough revenue environment.

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO




                                              8
Yes, I think you're spot on there Lauren. The revenue environment there continues to be
tough with all of the associated auto issues. But on the expense side the team there has
really done a strong job, which has enabled us to keep pace with what is happening on the
revenue side. As you know, earlier this year they went to a single edition on Sunday, a
single masthead, and they've done some things on Saturday. The new press there has
enabled them to deal with the people side from a productivity standpoint. They are doing
a good job on expenses, and you will continue to see the benefits of that new press
project with respect to color advertising and in other areas over the next several months.

________________________________________________________________________
Alexia Quadrani - Bear Stearns - Analyst

Just following up on your comments on Newsquest. If you could talk about -- I can see
signs of stabilization -- is it a bit more pronounced or encouraging than you had seen in
the fourth quarter of last year when we thought we might see stabilization then? And how
does the 6% revenue decline in the quarter compare to the decline we saw in Q1? And
lastly, can you give us any more details? Is there one component of Newsquest, whether
it is the help wanted or one component that might be doing a bit better versus everything
else over there?

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

Yes, Alexia, on the 6% decline in ad revenues in the second quarter: My recollection was
that in the first quarter the ad revenue decline was in about the 9% range. But again, we
would point out that the comps did get a little easier in the second quarter, and they will
get a little easier clearly in the second half of the year. While we had given some numbers
out in December, and at Mid-Year Media Review we talked a little bit about how the
management team there feels that, at this point, things have stabilized - that those
declines are not getting worse. Now part of that is helped by the comps, but there have
been some small positive signs in some of our markets there that give them just a little bit
more optimism that we have reached the bottom. We are watching that very carefully.
We will keep expenses in line, and if that is not the case, then our management team
there will do what is necessary to respond to that.

________________________________________________________________________
Craig Dubow - Gannett Co., Inc. - Chairman, President & CEO

To follow on for one second. The one area that we're seeing just a hint of positive at this
point is in the properties category in the Northeast. We mentioned that at Mid-Year, but
that, as of this month, has continued again. It's a little bit unusual because typically we
would have expected to see that in the South. It is a positive, but I don't want to go too far
with that.

________________________________________________________________________
Paul Ginocchio - Deutsche Bank - Analyst



                                              9
Craig, maybe just a comment on what you thought of the NBC upfront? And Gracia, if
you can remind us of the TV revenue exposure to prime time, early and late fringe?
Thank you.

________________________________________________________________________
Craig Dubow - Gannett Co., Inc. - Chairman, President & CEO

NBC with the upfront: It has been difficult for them, to say the least. The impact as it has
flowed down to us from the spot market has certainly had some impact. They have got to
fix the programming issues, and I know that team is working very hard on it. But I have
to say when you take a look at some of the other opportunities, particularly with ABC
and CBS side for us, the pickups have been very nice and the kind of programmatic
scheduling that we've had. The other thing to note, Paul, is that when you look at the
overall late news and how that has been impacted, we have been very blessed in how well
we have operated within a very local environment. Our ratings have been maintained or
grown. We've also seen further growth to help us, particularly in Tampa, Sacramento and
Little Rock. They have had some nice impacts for us. So despite the downside of NBC
and what has occurred through the upfront, we have had a number of offsets that have
been substantial for us.

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

And on the prime time side, I think that represents about 30%.

________________________________________________________________________
Craig Dubow - Gannett Co., Inc. - Chairman, President & CEO

Just over.


________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

A little over 30% of the pie.

________________________________________________________________________
Steven Barlow - Prudential - Analyst

Gracia, can you size the cost savings generated from the headcount reductions in Detroit
and in the UK? And what the dollar amount of those savings might be as well as the
number of bodies that were taken out?

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO



                                            10
With regard to Detroit, specific to the new press project and what we did last year in the
second quarter with regard to the severance charge we took, I think they reduced
headcount by about 80 folks in Detroit. We have done substantially more than that, and it
is in the hundreds at this point. On the Newsquest side I think it is a similar number over
the last year or so. And as to dollar savings, I don't have that right in front of me, but it is
reflected in the expense numbers that we shared.

________________________________________________________________________
Lisa Monaco - Morgan Stanley - Analyst

Craig, can you elaborate on what you're seeing in newspapers in July? And then Gracia,
if you can give us any color on what we should expect for the other revenue line for the
year?

________________________________________________________________________
Craig Dubow - Gannett Co., Inc. - Chairman, President & CEO

With respect to July, it is still a bit early to tell. Frankly, what we had communicated at
Mid-Year is very much in line with what we believe will take place. As Gracia
commented earlier, the West in particular has had some very, very good positives for us.
Overall, we are right where we were with our Mid-Year comments.

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

With regard to the Other Revenue line, there are three pieces that have been impacting
that line. First is Tex-Mex. As I mentioned, we now have those results as a one-line item.
That will continue for the full year because we didn't do that until December. The other
big pieces are PointRoll, which we acquired in June of last year. There was a big increase
in that line in June but now we will have cycled that. What you will see now is simply the
normalized revenue increases from PointRoll, which are quite nice. What came out of
that line in August of last year was Detroit, which was a one-line item and which, as you
know, is now fully consolidated. All of that would add up to us probably seeing
something more modest than the 14% growth or so that we've seen in the Other Revenue
line this quarter.

________________________________________________________________________
Michael Kupinski - A.G.Edwards - Analyst

A few years ago Valassis and Advo discussed a merger, and a newspaper executive at
that time indicated he would pull his newspaper partnerships with Advo if it proceeded
with the merger. Apparently he was concerned about competition. Valassis has now
become a major client of Advo. I was wondering: With the recent merger announcement
between the two, are you concerned about potential competition? Particularly for your




                                              11
preprint products for the weekend or Sunday inserts? And what gives you the comfort
that Valassis would not use Advo for distribution, especially in smaller markets?

________________________________________________________________________
Craig Dubow - Gannett Co., Inc. - Chairman, President & CEO

First of all, we think that the audience we are targeting has a nice match-up with what
they're trying to reach here. And as we look to the future, we are exploring with Valassis
more ways to develop additional partnerships that can make sense in some of our
markets. We are in the process of meeting with them over the next several weeks to
explore this. You probably know, we have some relationships already ongoing -- Detroit
and our California Newspaper Partnership as well.

________________________________________________________________________
Michael Kupinski - A.G.Edwards - Analyst

So you're not concerned that Valassis would use Advo as part of their distribution, or
more so?

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

They may do that, Mike, but the audiences we provide to Valassis are important ones ­
uniquely important ones ­ to the ones they are trying to reach. We will have discussions
with them, and we will see how it goes after those discussions.

________________________________________________________________________
Frederick Searby - JPMorgan - Analyst

I wondered if you could just give us some color on when you would expect the
international CareerBuilder foray into the international markets to actually have an
impact and how that is going? I know they just launched the UK and I think India, so it's
probably not material now. And on share repurchases: You repurchased -- and I know
this is opportunistic ­ 1.3 million shares. Should we assume that things will continue in
that route?

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

With regard to CareerBuilder overseas, as you said, they are in the very initial forays into
that market. They see some opportunities, but it is much too early for us to try to put any
kind of quantification to what that opportunity might be. We are very focused on
continuing to grow our share here in the United States as well, and that is probably the
more important piece of the puzzle right at this moment. As to share repurchases, as I
said, we continue to balance them against acquisition opportunities. We've announced or
completed over $500 million of acquisitions thus far. We have CareerBuilder to pay for,



                                             12
wherever that ends up, and we are looking at a number of opportunities right now. That
will kind of size where we go on the share repurchase front. As I said in my prepared
remarks, we will continue to do share repurchases in the second half of the year.

________________________________________________________________________
Christa Sober Quarles - Thomas Weisel Partners - Analyst

Real estate has been a significant area of strength for you. As you think about going
forward to softness in the market, I guess, how are you preparing for that? And what are
you doing online besides Classified Ventures? Are you looking to be more aggressive in
your online real estate classifieds?

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

On the real estate side, we are enjoying some very positive numbers and anticipate that,
as Sue Clark-Johnson said at Mid-Year, we will continue to see good growth in real
estate as houses stay on the market for longer periods of time. But there comes a point,
and we can't predict when that point will be, it will be a function of interest rates and
other things. If houses stay on the market too long then that becomes problematical. If it
is a soft landing with regard to real estate, we should be in reasonably good shape. We
continue to be aggressive in ramping up our efforts both on the print side through
outbound calling and other aspects on the classified side, as well as our online efforts.
Classified Ventures does a good job for its owners, and we continue to work with them to
be more aggressive in finding more opportunities on the real estate vertical as well as
others.

________________________________________________________________________
Christa Sober Quarles - Thomas Weisel Partners - Analyst

Your primary path then here is to continue to go with the Classified Ventures route as
opposed to doing something perhaps more aggressive on your own?

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

We think Classified Ventures will be very aggressive with these verticals, and we look at
all opportunities and will continue to pursue whatever makes the most sense. But at the
moment Classified Ventures has done a good job for us.

________________________________________________________________________
James Goss - Barrington Research - Analyst

Of the recent acquisitions you've made, such as PointRoll and Planet Discover, I was
wondering how do you see them affecting future comparisons both internally and through




                                           13
applications to the various Internet ventures you have. And are you looking for
acquisitions of a similar nature to supplement your growth in that space?

________________________________________________________________________
Craig Dubow - Gannett Co., Inc. - Chairman, President & CEO

We are looking at it from all sides. What we can grow organically here as well as what
will complement that growth. PointRoll, rich media and what that can mean on the
advertising side, local search with Planet Discover is an integral part of how we can best
serve those local communities. As we evolve, if there is a technology that will really
enhance future opportunities on the topside, that is really what we're after. I think you can
begin to see the thread running through each of these businesses and how that will apply
across the Gannett company. Ultimately, that is what we are after. I've said it in the
prepared remarks: It is all about local. We are being very, very specific and focused on
that and how we can best serve both that ad community as well as the consumer.

________________________________________________________________________
James Goss - Barrington Research - Analyst

Over what period of time do you expect to have an impact, not only on the rate of
profitability, but on the level of dollars that you generate from those areas?

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

PointRoll already is contributing. Their growth rate year to date on the bottom line has
been over 100%. That's off a few million dollar base, but still it is a very important piece
of the puzzle, and they will continue, I'm sure, to have a strong performance. Planet
Discover is more the technology part of it, and what it will drive is our local online
revenue growth. It's already causing us to adjust some of the things that we're doing. Sue
Clark-Johnson reported at Mid-Year Media Review that our local online revenues are up
over 30%. This will be another opportunity for us to turbo charge local revenue growth.
But it is too early for us to try to put a box around what we think those numbers will be
other than to say that, over the next three years, we intend to very, very meaningfully
increase our revenues attributable to the digital side of the business.

________________________________________________________________________
Craig Dubow - Gannett Co., Inc. - Chairman, President & CEO

The real key here is when you look at the local relevance of what we're trying to do,
when you look from a search perspective: In particular, instead of the multitude of hits
you receive off a national service, what we are able to do best is optimize this product as
a best match that local community. What we're trying to do is differentiate within that
local environment, and my view is that in the long-term that is going to really produce
some wonderful results for us, because of the consumer satisfaction. Ultimately that will




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over the long-term here really grow the top side. That is what we're after in trying to
create that better local consumer experience.

________________________________________________________________________
William Bird - Citigroup - Analyst

I was wondering if you could comment on what percent of your help wanted ad revenues
is online now? And what does print versus online growth look like? And also why the Q2
drop in D&A, and what is your expectation for the year?

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

Bill, with regard to the drop in D&A in the second quarter, as you may recall in the
second quarter of last year when we brought up the new Detroit presses, we had some old
equipment in Detroit that we had to take the full depreciation hit for. So our depreciation
ramped up in the second quarter of last year because of this one-off charge. That is why
the depreciation number is lower, although offset a little bit by the fact that we now have
100% of Detroit assets being depreciated through that number. Also, it's due to
acquisitions. The guidance that we gave on D&A at the Mid-Year Media Review still
remains the correct range. As to a breakdown between online and print, we gave you the
online growth numbers in the domestic community newspapers and probably over 50%
of our online revenues in the community newspaper would be from employment upsell.
So that gives you some sense of the magnitude of it.

________________________________________________________________________
Craig Huber - Lehman Brothers - Analyst

I just want to get back to the share repurchase question. You mentioned about $500
million of acquisitions so far. I am wondering here with the stock at 9-year lows, you did
about $600 million of acquisitions last year, but you also bought $1.3 billion of your
stock back last year. This year you've done $500 million of acquisitions; why are you
only spending $60 million, $70 million on stock buyback with stock at 9-year lows? I get
that questions a lot from investors, thanks.

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

The $600 million number you quoted was for the full year, and the $500 million number I
shared with you is what we have done to date, plus there is whatever there will be with
regard to CareerBuilder. Plus there are potentially some other opportunities we are
looking at that will add to that number. Where that number ends up for the year remains
to be seen. I can be pretty sure it is going to be above $600 million. Again, we continue to
balance acquisitions with share repurchases. If we believe the things we are looking at on
the acquisition side ultimately will give us a better return in the intermediate- to the long-
term, then we're going to take advantage of those opportunities. To the extent that they



                                             15
won't, we will be active in the share repurchase market. But that is a decision that is made
on a daily basis and we'll continue to manage it that way.

________________________________________________________________________
Craig Huber - Lehman Brothers - Analyst

I understand all that but the $1.9 billion or so you spent collectively last year, it's a long
way from roughly the $600 million you've done so far, maybe you'll do some more
acquisitions later in the year. But I imagine you would end up net net spending a lot less
than $1.9 billion when the whole year is fully done. Is that a fair comment?

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

I don't know yet. When we came into 2001 we did not anticipate we were going to do
$4.6 billion of acquisitions. And a few months later in pretty rapid fire order, we did. I
can't comment to you on how much I think we will ultimately do in acquisitions this year
or share repurchases because again we will have to see what the opportunities are and
what makes sense for us to do. We throw off $1.2 billion or so in free cash flow and that
is a number we are comfortable reinvesting. If we think there are other opportunities ­
compelling opportunities ­ that will take us above that number, then as we demonstrated
in the past, we will do so.

________________________________________________________________________
Craig Huber - Lehman Brothers - Analyst

But really Gracia the question I guess is, why are all these acquisitions maybe the
exception of CareerBuilder better than buying back your stock at 9-year lows? That's the
question.

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

Because we must see in those acquisition opportunities returns that perhaps will give us
better opportunities than simply buying back our stock at the moment. That is something
we run numbers on all the time; whenever we're looking at an acquisition opportunity, we
also look at the share repurchase model, and we model it out for a number of years. Then
whatever makes the most sense for us to do, we will do. We're not just predisposed to
doing acquisitions because we want to increase, as Doug would have said, the number of
pages in our annual report. We are only predisposed to do acquisitions if we think that
they will create over the medium- to long-term, greater value for us.

________________________________________________________________________
Peter Appert - Goldman Sachs - Analyst




                                              16
First, it definitely looks like the help wanted numbers are decelerating here. I'd be
interested in any insights you have on that and any sense that will continue into the
second half. Second, based on your comments, do you think it is reasonable to assume
that newsprint cost per ton could be flat in '07?

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

Well, it probably isn't fair to assume, if you think about on the newsprint side whatever
piece of the price increase...there would still be some. We are just going to have to see as
we get closer to 2007 where all of these pieces come. But I am not going to rule anything
out.

________________________________________________________________________
Peter Appert - Goldman Sachs - Analyst

But we're approaching sort of $680, I guess, $600-something like that. Maybe that could
be the clearing price you think?

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

I'm not familiar with $680.

________________________________________________________________________
Peter Appert - Goldman Sachs - Analyst

What are you familiar with?

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

A number that is lower than that.

________________________________________________________________________
Peter Appert - Goldman Sachs - Analyst

Okay, and how about your sense of what's going on in the help wanted market? Maybe if
we are past an inflection point where things are starting to accelerate meaningfully?

________________________________________________________________________
Gracia Martore - Gannett Co., Inc. - Executive Vice President & CFO

When you look at some of the numbers that are coming out vis-a-vis the jobs report, it
seems as though we have hit a little bit of a trough in job growth and the like over the last
couple of months. Help wanted would reflect some of that. But whether that is the trend



                                             17
going forward remains to be seen. We continue to see some of the geographical
differences that we've been talking about where we have strong growth in some areas of
the country. In those areas where the economies are more manufacturing or auto based,
they're having a tougher time with the layoffs going on in those communities. Then there
are some communities where we are where the unemployment rate is so low and the
demand for skilled workers so high, but the supply so low, that it has become difficult for
folks. We are seeing a little less advertising because there just isn't the skilled employee
base out there. But this quarter has been kind of funny because of the Easter switch, and
then May was a very strong month on several fronts. Then June. So it has been hard to
discern any real trends out of this quarter. We will just have to see where the next few
months go.



 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
Gracia Martore - Gannett Co., transcript are subject to a number of risks,CFO and
 looking statements contained in this
                                        Inc. - Executive Vice President & trends
 uncertainties that could cause actual performance to differ materially from these forward looking
I think that A number of our call for today. And if you have any further questions please
  statements. concludes those risks, trends and uncertainties are discussed in the company's
give areports, including the at 703-854-6917 or me at extension 6918. Have a great day, and
  SEC call to either Jeff company's annual report on Form 10-K and quarterly reports on Form
thanks Any listening in. statements in this transcript should be evaluated in light of these
  10-Q. for forward looking
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