Good day, everyone, and welcome to Gannet’s third quarter2007 earnings conference call. This call is being recorded. Due to the largenumber of callers, we will limit you to one question or comment. We greatlyappreciate your cooperation and courtesy. Our speakers for today will be Mr.Craig Dubow, Chairman, President, and CEO, and Gracia Martore, Executive Vice-Presidentand CFO. At this time I will turn the call over to Ms. Gracia Martore. Pleasego ahead.

Thanks, Shannon, and good morning. Welcome again to ourconference call on Webcast today to review our third quarter 2007 results.Hopefully you’ve had a chance to review the press releases from this morningwhich also can be found at www.gannett.com.As Shannon mentioned, with me today are Craig Dubow, Chairman, President andCEO, and Jeff Heinz, Director of Investor Relations. Craig will begin with anoverview of the quarter and update of the strategic initiatives that we haveundertaken and I’ll follow Craig’s remarks with some additional details on thequarter. Craig.

Thanks, Gracia, and good morning to everyone. As you saw inthe release this morning, Gannett earned $1.01 per share from continuingoperations during the third quarter. These results reflect both the positiveand negative that have been impacting us for a while now. On one hand, ourfinancial discipline is the best in breed and our strategic efforts, includingthe growth and development of online are moving along well. Plus, Newsquestperformance continued to improve. On the other hand, challenges of an extremely tough ad environmentremain. This is particularly true in a number of our markets hurt by theslowdown in real estate. There also was the near absence of the politicalspending that boosted results for the third quarter last year. Finally, we tookover $14 million in severance expenses and facility consolidation costs relatedto a number of efforts, both in the US and in the UK. We generated total operating revenues for the quarter of$1.8 billion. Despite the charge that I just mentioned, our operating expenseswere down almost 2%. Operating cash flow for the quarter was $473 million. Ourinternet investments performance improved and our interest expense was downconsiderably compared to third quarter last year. The result was net incomefrom continuing operations of $234 million. Domestically, at our community newspapers the advertisingenvironment continued to be very challenging with the classified categoriesimpacted the most dramatically. The housing slowdown has hindered ad demand inseveral of our markets. Here’s what I mean: Our properties in Arizona,California, Florida, and Nevada account for roughly one-fourth of theadvertising revenues for domestic community newspapers, including Detroit, inthe quarter. But they also represented more than 40% of the decline inadvertising revenue at our domestic community properties and more than 55% ofthe decline in NIBT. Our planning for the rest of the year and for 2008 reflectour belief that the real estate market slow down and…

Thanks, Greg, and good morning again. Before we go intodetail on our quarterly results, I need to remind you that our conference callon Webcast today may include forward looking statements and our actual resultsmay differ. Factors that may cause them to differ are outlined in our SECfiling. This presentation today also includes certain non-GAAP financialmeasures. We’ve provided a reconciliation of those measures to the mostdirectly comparable GAAP measures in the press release and on the investorrelations portion of our website. As Craig mentioned, I’ll be digging a little deeper into ourresults, beginning with the publishing segment. As you saw, our advertising revenues for the third quarterwere down a little over 5.5% on a pro forma basis and because we benefittedfrom the US dollar’s sterling exchange rate, they would have been a little lessthan 7% lower on a constant currency basis. Local was down 3.9%, while nationalalso down about 4%, and classified declined 7.7%. Our domestic newspapers didnot perform as well as Newsquest due primarily to the slowdown in the realestate market that had a significant negative impact on the classifiedcategories. Classified advertising at our domestic community newspapers laggedlast year by about 13.7%, but most of the decline was attributable to the fourmarkets Craig mentioned: Arizona, California, Florida, and Nevada. Once again,the percentage drop in advertising revenue was two times larger in those fourstates than in our other community markets. To put this in better perspective,those four markets generated 24% of ad revenue for our domestic communitynewspapers in the quarter, but drove 43% of the ad revenue decline for thoseproperties. Focusing for a few moments on the domestic classifiedcategory, real estate advertising was down over 21% in the quarter as realestate slow down continued. We can’t overstate the impact real estate is havingon the economies in those markets. In fact, three…

Your first question comes from Craig Huber - LehmanBrothers. Craig Huber - Lehman Brothers: Just in light of what happened with Belo and Scrippsbreaking up their company recently, do you have any inclination to split offyour TV group here, particularly ahead of a political/Olympic year next year?

Craig, when you take a look first of all at Belo, andtwo-thirds of that company being on the broadcast side, it makes sense. Whenyou look at our portfolio, we're virtually the opposite. Just to shift over very quickly, with Scripps and what theydid yesterday, certainly their core side with newspaper and TV stayingtogether, I think really suggests the position that we are in -- and arestaying with at least at this particular time -- as we all go forward. Craig Huber - Lehman Brothers: Have your thoughts changedon that front at all? Do you guys contemplate this?

We look at all ofthese and discuss things, but at this time, no; our position has not changed. Craig Huber - Lehman Brothers: Switching to just the newspapers, as you guys think outstrategically about your pricing for your newspaper advertising for next yearcost categories, what should investors think about here for potential ad ratehikes across the categories? Is there any potential for increased discounts aswe go into the new year? Gracia Martore: As you know, Craig, we are just in the throes of budgetingfor next year and we will share all of that information with the investmentcommunity in early December when we go to the media conferences. Just as a general statement, pricing varies category bycategory and market by market, so it's much too early to make a blanketstatement about pricing going forward. Craig Huber - Lehman Brothers: Do you thinkinvestors, though, should expect any material changes versus your pattern overthe last five or ten years? Gracia Martore: I don't think anymaterial changes versus our pattern over the last few years. Craig Huber - Lehman Brothers: What were the net network revenues in the quarter forCareerBuilder? Gracia Martore: For CareerBuilder thenetwork revenues, we'll just try to quickly look that up as maybe we can go tothe next question and we will try to ferret that out.

Your next question comes from Alexia Quadrani - BearStearns. Alexia Quadrani - Bear Stearns: Just looking at those four markets that you highlighted asbeing the worst hit -- Arizona, California, Florida and Nevada -- is there anyway, knowing that the real estate downturn as you said in your openingcomments, is likely to persist for a while in those markets, is there any wayyou can really try to help the profitability the way you did in Newsquest whenwe were in that period of downturn in those markets? A second question again on those main markets. Are youseeing worse retail or local advertising as a ripple effect into the otherareas of your advertising in those markets than you are in the rest of thecountry? Gracia Martore: Clearly we are taking a number of steps -- both in thosefour markets as well as in other areas -- to address efficiencies and look atfurther consolidations and centralization of various processes where that makessense and where we can drive cost savings. Certainly in those markets we arelooking to do those same things. We continue, as did Newsquest, to look at restructuring andto bring the expense side obviously in sync with what the revenue opportunityis. But at the same time, we don't want to let a short-term economic cycle --which we believe the real estate boom/bust cycle is -- lead us to do thingsthat are not in ultimately the best interest of the local franchises that wehave. So it's a very careful balancing act that we've got to participate in. Alexia Quadrani - Bear Stearns: The other areas ofadvertising in those markets, are you seeing a ripple effect, any weakening inretail more so than the rest of the country? Gracia Martore: I think we're particularly seeing in the areas of furniturewhere to the extent that there…

Your next question comes from Fred Searby – JP Morgan. Fred Searby - JP Morgan: Just following up on CareerBuilder, if you could just giveus any thoughts on what the plans are if potentially to monetize? In the past you all have been somewhatdismissive of the idea, but is there any rethinking there? Secondly, with Newsquest it sounds like real estateclassifieds are quite strong. What are your thoughts given some of the issuesthat are materializing in the mortgage market in the UK?Thank you. Gracia Martore: Fred, you've given mea good entree to catching up on the very first question. CareerBuilder networkrevenues were $200 million in the third quarter; they increased about 17% overthe third quarter of '06 so just to clean up that little housekeeping item. With regard to CareerBuilder, I would not say that we'vebeen dismissive of the idea; I think what we've indicated is that we continueto enjoy, as do our partners, operating CareerBuilder as it is. They have madetremendous strides; being a private company has not, I don't think, impededtheir ability to grow the business very importantly. Obviously all of us look at ways to unlock value in ourcompany and if down the road that was the appropriate thing to do, we wouldcertainly consider it. But at the moment, we believe that the way we areoperating CareerBuilder is in the best interest of all the partners. As to Newsquest and their real estate revenues, we have seena nice pickup in real estate revenues. I think they are entering into thatsweet spot where houses are not being put on the market and being sold beforethey are even actually on the market for a few days. So houses are starting tostay on the market a little bit longer and obviously that sweet spot for advertisingis about where we are beginning to be. We'll just have to see how that plays out. We don't have asense that there's going to be a demonstrably different trend in the fourthquarter at Newsquest on the real estate side, but we'll see as the numbers comein.

Your next question comes from Karl Choi - Merrill Lynch. Karl Choi - Merrill Lynch: Can you give me the figure for FTE, how much it was down atthe end of the quarter, year-over-year? Also, should we expect a similar amountof severance in the fourth quarter? Gracia Martore: With regard to FTEs on an apples-to-apples basis, FTEs Ithink are down in the 6% range year-over-year. Vis-a-vis the fourth quarter,there is the potential for additional severance costs. As you know, our Detroitnewspaper partnership announced a buyout offer there for a number of positionsand we'll just see how that plays out. But yes, I believe there will be additional severance costsand we'll just have to give you a better sense of that, probably at theDecember conference. Karl Choi - Merrill Lynch: Gracia, can you give us the newsprint price declineexcluding currency? I think the 4% that you gave probably included currency,right? Gracia Martore: Yes, it did. Let medig that out and I will come back to you with that number. Karl Choi - Merrill Lynch: Do you have a figure for cash expenses excluding newsprint,how much it was down in the quarter? Gracia Martore: Not excluding newsprint I don't. I just have cash expenses,pro forma constant currency excluding the severance for the newspaper groupdown about 4.5%.

Your next question comes from John Janedis - WachoviaSecurities. John Janedis - Wachovia: Craig and Gracia, you're obviously in a lot of markets andwhen you look at the U.S.portfolio beyond the four that you mentioned, can you maybe share some thoughtson what you're seeing in the local markets? And maybe your sense of the tone aswe head toward the end of the year? Gracia, in terms of the cost side, can you give us a 13-weekpro forma expense number for the fourth quarter of last year? Gracia Martore: Let me take the lastquestion first. We didn't release pro forma numbers for the quarter ex theadditional week. What we did say about the fourth quarter last year was thatthe 53rd week for the company added about $0.04 to $0.05 in EPS. So that's theguidance that we gave. Just getting back to the question that I had previously onnewsprint, constant currency price was down about 5%.

John, with respect tothe other markets, what we're seeing is a better opportunity. I would say it isnowhere near as uneven as what has occurred, particularly in these four statesthat we're talking about. The Midwest frankly has done abit better for us. I don't want to get ahead of that, but it is doing a bitbetter in the key areas. But beyond that, it's just slightly ahead. When youextract these four keys I think you can pretty well lay out what the other keycategories are going to represent. John Janedis - Wachovia: In terms of advertisers, are you feeling -- on the margin exclassifieds -- any better or worse than maybe you felt a quarter or twoquarters ago?

It's probably about the same. I don't think there is anytremendous improvement, at this time anyhow, with the exception obviously inthe UK wherepretty much, as our management team called it over there, it is beginning tohappen; particularly as Gracia talked about, on the employment side as well inthe real estate side. So over there it's a bit of a different story and I thinka number of months ahead of where we are domestically.

Your next question comes from Peter Appert - Goldman Sachs. Peter Appert - Goldman Sachs: I'm hoping you mightshare with us how your thinking is evolving in terms of priorities and capitalallocation? I'm wondering if, in particular, the slight increase in sharerepurchase activity in the third quarter might point to more in that direction?

We want to look very opportunistically and we will continueas is appropriate. Obviously on the other side, you saw what we have done fromthe dividend increase from our last board meeting. Aside from that I thinkwe're going to continue to look from our strategic investments in the best waypossible and as I said in the comments, we are very much looking at how we cantie local opportunities that will scale nationally. So those three keys are really where our focus is at. Beyondthat, again, if there are other opportunities in core sides to this, eitherwith duopoly possibilities or with other areas that we can look atconsolidation for printing and other synergies within the core, believe me, wehave very strong interest and are staying very open to those possibilities aswell. Peter Appert - Goldman Sachs: The strategicacquisitions, Craig, have been relatively small thus far. Are you thinking ofperhaps stepping up the pace of activity there?

We would love to ifthere is something appropriate that would fit with our plan. As you know, welook at and continue to look at everything that is out there. As yet, the verylarge-sized ones have not fit or have been in a pricing position that has madeeconomic sense to us and how we're trying to go about this. Gracia Martore: There are a couple of things that we may be talking about inthe short-term here in those areas, that speak to the strategic initiativesthat Craig talked about. Peter Appert - Goldman Sachs: Gracia, have we reached the point where the operating incomecontribution from Classified Ventures, CareerBuilder, some of the otherInternet assets are sufficient that this other income line could be aconsistent positive on a go-forward basis? Gracia Martore: It's hard to say because there are swings in the timing onthose investments in terms of marketing expense and activities. In the fourthquarter of last year I think we had about $11 million of non-operating incomewhich was a function of a sale of some investments. So it should be in thepositive category, but again, it may shift as to level depending on somespecific one-off items quarter to quarter.

Your next question comes from Paul Ginocchio - DeutscheBank. Paul Ginocchio - Deutsche Bank : Help me understand the level of severance in the thirdquarter. Is it $14 million? What has it been averaging over the last couplequarters, just to help me size it? Display CPM rates, how much are they up andis the improvement accelerating or decelerating on the display side? Thanks. Gracia Martore: I'll start with theseverance costs and then Craig can talk about display. On the severance costs,of the $14.5 million, about a little over $12 million of that was severance andthe other $2 million was related to consolidations and press transfers, whichis reflected in the depreciation line. There is a couple of million dollars ofadditional depreciation in the newspaper segment. In the last couple ofquarters we have identified when we have had sizable severance costs. Lastquarter they were much more nominal, they were sizable in the fourth quarter oflast year and we highlighted that for you and we'll continue to highlight themwhen they are of a size that they are fairly material.

Paul, just inresponse to the CPM side, probably outside of the areas that we have cited inthe four specifics, you're going to see things fairly consistent at this point. Paul Ginocchio - Deutsche Bank : I'm talking aboutonline. I apologize.

From an onlineperspective I think we are seeing some modest increases, certainly as we'regoing along here. That has been pretty consistent from quarter to quarter inwhat we've been able to do in virtually each of the areas from a divisionstandpoint. Gracia Martore: I think as we've been able to do some additional targeting,we've obviously seen better CPMs on the video side where our video streams haveincreased dramatically. We've been able to see some attractive CPMs versus thenormal display CPM.

Just to piggyback onthe video side with what Sue and certainly the broadcast division have done byworking together on that, and that is continuing to exploited it in asignificant way with the training that has continued now for about ayear-and-a-half. Just by looking at the sites, you can see dramatic use ofvideo at this time. The advertising sales folks are working very hard on furtherdeveloping that in a consistent way as we all move forward. So we're veryexcited with where that one is heading.

Your next question comes from Joe Arns - Banc of AmericaSecurities. Joe Arns - Banc of America Securities: With respect to your cost efforts, do you consider yourstaff reductions this year permanent? You mentioned site consolidation, but areyou also looking to offshore certain functions? Gracia Martore: With regard to thestaff reductions, a number of those are permanent as they relate to, forinstance we consolidated and are in the process of consolidating ourcirculation call centers. So those would be permanent reductions as we consolidateabout [five] centers down to three. In other areas where we're using technology more efficientlyand effectively, those would be permanent reductions. But obviously to theextent that there are business conditions which will ultimately pick up, thenclearly there are some of them where we would add back some staffing.

That would bespecific really in the advertising sales area, the feet on the streetopportunities as improvements would come. Gracia Martore: With regard to offshoring, I know in the newspaper divisionwe are looking at some ad production overseas. We have a number of initiativesgoing on right now where we're looking at both domestically consolidatingthings and centralizing things. Also looking at the possibilities of whether itmakes more sense to outsource overseas or to keep them domestically, but tojust simply centralize them.

Your next question comes from James Goss - BarringtonResearch. James Goss - Barrington Research: Related to your Internet activities, aside from thecomponents that wind up in the other income category, is there any way or anywillingness on your part to size that revenue base relative to the total as itcurrently exists? Also, look at the operating margins to the extent that youcan make what you feel are appropriate allocations. Are they more or lessprofitable right now than your traditional businesses? Gracia Martore: In terms of sizingit, Jim, I think each year we indicate at the end of the year the total size ofour online operations. I think we talked about the fact that last year onlinerevenues were over $400 million. We give growth rates, I think, each quarter tohelp with that process and we will obviously report at the end of the yearwhere we stand on the online side. That being said, as you mentioned, thatdoesn't include obviously the pieces of the joint ventures that are held out inthe network and other places. Vis-a-vis the operating margins, we try to do our very bestobviously to fully allocate costs to our online efforts, and obviously withoutthe joys of having newsprint and ink those margins are seemingly better thanour print margin or our broadcast margin. But obviously that will play out overthe long-term and we'll see where all of that takes us. James Goss - Barrington Research: I think you mentioned time sales up slightly, excludingpolitical, in the broadcast area. Next year the Olympics will be in the summerperiod which is right about when the conventions are being held. I'm wondering, how much you do increase thetime slots available to advertising? Do they conflict with one another andyou're not been able to take full advantage of a strong political season andthat you'll have both political and Olympic competing for time at the same timeand squeezing out other advertisers? How does that work, in general?

Jim, I think franklywith what will be a scarcity of inventory as we go through that, it will playout in a very positive way for us. As we are anticipating right now thepolitical will really been picking up as we go from quarter to quarter; again,we're not as concerned with really the overall inventory perspective because wethink we can really leverage that in an appropriate way because of all theother key areas that we have from our local news perspective as well, to takeadvantage of those individual slots that we have available. Certainly when you look at the other networks and what theyare going to have from an availability standpoint, I think there is going to beenough that we can disperse this and positively move this forward, but I dolook at it very specifically as an advantage to us.

Your next question comes from Michael Kupinski - NobleFinancial. Michael Kupinski - Noble Financial: I just had a follow-up question on the political and Olympicyear next year. USA Today historically did well in Olympic and political yearswith a boost from Olympic advertising. I know that you guys have done specialsin USA Today in the past. Are you seeing any dollar commitment for Olympicadvertising at this stage or is it too early? If you can just remind me whatUSA Today did in Olympic revenues in maybe 2006 but more comparatively in 2004?

We'll have to take a look at the comparisons and Gracia willpull that. I would say probably, Michael, at this point it's a little bit earlyyet in what we're seeing from the USA Today perspective. I know we will have aterrific effort over there in what will be taking place from a specialopportunity perspective. As we have done in the past, they have done a veryfine job with it. Gracia Martore: To size it, Mike, in USA Today for Olympics, that'stypically measured in the single millions of dollars. So it's nowhere nearobviously what the amount is on the broadcast side where for instance in 2004with the summer games in Athens Ithink we had almost $29 million of net Olympic revenue; in the Winter Games in'06 a little over$22 million in Olympic revenues. So USA Today does have a good showing, butit's usually in the single millions of dollars. Michael Kupinski - Noble Financial: Did USA Today pick up political advertising in '04? Becauseif I recall there was a little bit of displacement off of television into USAToday in advocacy. Gracia Martore: The advocacy category definitely; but again, we're talkingsingle millions of dollars, we're not talking the kind of level that we saw inthe broadcast side. But certainly that will play a part, and to the extent thatthe political season turns out to be as robust as the pundits are suggesting, Isuspect that USA Today will fare very well in comparison to other years.

Your next question comes from Edward Atorino - BenchmarkCapital. Edward Atorino - Benchmark Capital: You've talked about the new initiatives. Could you maybegive us some sense of whether there are any dollars starting to come from allthese efforts, other than website hits and all that stuff?

Edward, the key here is we're continuing to press. When youlook immediately at some of the most visible elements, the Mom Sites arebeginning, and the answer would be yes, from a revenue standpoint. Certainlyfrom the number of uniques that we are seeing we are finding quite specificways of increasing that traffic through certainly the social networking aspectsof those sites. That is coming together in a very nice way for us. I think whatyou're going to see as we go along is a continuance. As we further develop newareas in a very short fashion here, that will further continue. Gracia Martore: To add on to what Craig said, on the video side we'rebeginning to see the dollars accumulate, albeit they're small dollars at thispoint, that they're starting to be in the seven figure range with regard to ourvideo efforts. In other areas such as our sales restructuring efforts and oursales training efforts in the newspaper division, obviously the largedepartment stores are going to do what they do and we'll have to see where thefourth quarter takes us with the large department stores. But on those small to midsize advertisers that we've reallyfocused on, where we have in fact restructured the salesforce, we are beginningto see nice additions to the number of accounts as well as the dollars comingout of those accounts. So in the areas that we are focusing, both on the digitalside as well as the sales restructuring side, yes. As Craig said, we are seeingthose dollars come in. But we are in the nascent stages of those efforts,rather than really in the mature stage of those efforts. Edward Atorino - Benchmark Capital: I don't know if anybody asked what is sort of the 50 pound gorilla in the room. Wouldyou comment on any thoughts about breaking up the company. Somebody had to askit.

We had talked about that earlier.

Your final question comes from Peter Jacobs - Wells Fargo. Peter Jacobs - Wells Fargo: This is a follow-up question to the question that related tothe size of the online revenue. If we look at that, the $400 million that you citedback at the end of 2006, is that spread both in the newspaper publishingbusiness segment and the broadcasting? Meaning does it include the Captivatebusiness as well? Gracia Martore: No. When I'm giving you those digital revenues we are justsimply counting the online revenues that our broadcast stations are producing;we are not including Captivate in that number. It is spread across Newsquest,broadcast, our community newspapers, USA Today. Peter Jacobs - Wells Fargo: But it's in thebroadcasting business segment? Gracia Martore: Yes, it is. We've reported on the growth of that businesseach quarter.

That is all the time we have for questions. Ms. Martore, I'll turn the conference backover to you for any additional or closing comments. Gracia Martore: Thanks very much for joining us today. If you have anyfurther questions you can give Jeff a call at 703.854.6917, or me at 6918. Havea great day.