Good day, everyone and welcome to Gannett's third quarter 2009 earnings conference call. (Operator Instructions) Our speakers for today will be Craig Dubow, Chairman, President, and CEO; and Gracia Martore, Executive Vice President and CFO. At this time, I would like to turn the call over to Miss Gracia Martore. Please go ahead, Madam.

Thanks, Laura and good morning. Welcome to our conference call and webcast to review Gannett's third quarter 2009 results. Hopefully you have had the opportunity to review our press release this morning and it also can be found at www.gannett.com. Before we get started, however, I need to remind you as always 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. We have provided a reconciliation of those measures to the most directly comparable GAAP measures in the press release and on the investor relations portion of our website. Craig will provide an update on our strategic efforts and summarize our quarterly results briefly. I will follow with a more detailed look at the numbers, as well as some balance sheet items. Now let me turn the call over to Craig, and welcome back.

Thanks, Gracia. Before we begin the discussion of our third quarter results, I would like to mention a few things. First, I am very glad to be back and I am looking forward to discussing the Gannett Company with you today. The surgeries, the recovery, and rehab all went well and I am happy to say I am on a road to a full recovery. I received messages from many of you and I want to thank you for your kind thoughts. Secondly, I’d like to thank Gracia and the management team and all of our employees for their outstanding work during my leave. We continued to move forward on several strategic initiatives and that is testament to the strength of our management team here at Gannett. An important step was achieved in very late September with the launch and successful completion of our $500 million bond financing. The transaction was extremely well-received in the capital markets and gives us some flexibility as we manage our capital structure. At the same time, we announced estimate ranges for several key results for the third quarter. I am very pleased to report that we exceeded even our expectations due to a better-than-anticipated finish to the quarter. This was driven primarily by better trends in advertising and our continued success in lowering cost and achieving greater efficiencies across all of our business segments. Before we get into the quarter, I wanted to update you on the progress of some of those initiatives. Despite the continued weak economy, which we believe is still pretty fragile, a great deal has been accomplished in several key areas. We continue to execute on our long-term strategy. We are positioning the company for when the economy rebounds and at the same time, meet the continued consumer demand for…

Thanks, Craig. I’ll provide a little more detail on our operating segments and cover some non-operating and balance sheet items. Moving to the segments, in publishing our total revenues on a pro forma basis were about 22% lower and ad revenues were down about 28%. As Craig noted, we are seeing some favorable trends here. Ad declines continue to slow and those declines were a few percentage points better than the second quarter, which was an improvement also over the first quarter. And September was our best comparison month thus far this year. Domestic ad revenues for the quarter were down 26% while at Newsquest, they were down almost 29% in pounds. Once again, comparisons this quarter were the best thus far this year. At Newsquest, the difference was significant. The third quarter comparisons for ad revenue in pounds were 8 percentage points better than the second quarter and 10 percentage points better than the first. The results for each of our major categories were in the press release this morning as follows -- retail was about 22% lower while national was 25% and classified revenue was about 37% lower. But the trend was moving in the right direction and again, September was the best year-over-year comparison month of the year. Retail advertising, although down, finished the quarter slightly better than the second quarter. In the U.S., across all products, the department stores and furniture categories remain challenged, although the third quarter comparisons for both categories were better than the two prior quarters. Retail advertising results in pounds in the U.K. followed much of the same pattern. National advertising, however, was a bit tougher in the third quarter. Advertising revenue at USA Today was about 37% lower. Ad demand there continues to be hampered by the lingering dramatic slowdown in…

(Operator Instructions) Our first question will be from John Janedis with Wells Fargo Securities.

I know it’s still early but can you talk about what you are seeing from a ratings perspective on your evening news and what impact Leno is having on revenue? And when you look at the 4Q guidance of down low 20s at this point, how different do you think it would be if NBC decided to go with a more traditional schedule? Thanks.

You know, just taking a look first at the programming, my sense of it is that right now we would probably be in a little better position with the traditional prime but it’s awfully early to tell yet and from an overall standpoint, when you take a look at that, I think Leno itself is going to give us some opportunity as we move forward. But taking a look at the news, again what we must do is be certain that we are doing everything we can locally. So it’s again early on all of this to really tell any impacts that we are going to have in that direction but we’ll see where it goes and keep you posted as we move forward.

Your next question comes from the line of Alexia Quadrani with J.P. Morgan.

Thank you and welcome back, Craig. My question is on the cost side -- if you could share with us what your preliminary thinking is on the costs for next year. Is the decline we saw in this quarter a good run-rate for next year? And did you have the furloughs? Did the furloughs continue into Q3 and what are your thoughts going forward? And maybe also touch on the newsprint -- have you stockpiled an above average amount given the possibility of some price increases ahead?

You know, Alexia, it’s a little early for us to comment on the cost side for next year. We are literally just beginning to look at the budgets that are bubbling up from our local units. What I will tell you is that a lot will depend on what the revenue outlook is for next year. I don’t think we assume that the revenue outlook next year is going to be quite as difficult as it was this year but we’ll have to take a look at that and then some of the expense initiatives that we’ve done are ongoing and permanent reductions. We’ll cycle some of those but then there have been new ones, obviously, in July and beyond that will benefit us well into next year. We did not do furloughs in the third quarter nor do we have plans to do furloughs in the fourth quarter, so that about $25 million of expense benefit that we received in the second quarter, and I guess it was about $20 million or so in the first quarter, did not repeat in the third quarter, nor will it repeat in the fourth quarter. On the newsprint side, I would say that we’ve always done a good job on the inventory management side and given where prices are buttressed by some black liquor tax credits that some of the newsprint companies have enjoyed, we certainly have added to our inventory levels, as have others, I’m sure, in the industry.

All right. Thank you.

Your next question comes from the line of Peter Jacobs with Ragen Mackenzie.

Good morning. Just a quick question, and that is could you just update us where you are in your financial covenant ratios, please?

Sure. We will close the third quarter at about 3.03 times and our covenant is 3.5 times max, and as we’ve said previously, we had expected that the covenant would peak in the third quarter although interestingly, it’s not too far -- in fact, I think right on top of where it ended the second quarter and in the fourth quarter, we have about $55 million of severance cash expense that we took in the fourth quarter of last year that won't repeat. So we would anticipate that that ratio would be lower as well in the fourth quarter.

Okay, great. Thank you.

Your next question comes from the line of Alexia Quadrani with J.P. Morgan as a follow-up question.

Just a follow-up question on USA Today -- I may have missed it but what was the circulation revenue in the quarter and are any other ad categories outside from the core travel, are you seeing weakness there as well?

Alexia, with regard to USA Today circulation revenue, I think that Dave Hunkey has indicated that for the full year, circulation revenue is about flat. As you’ll recall, we had a price increase in the fourth quarter of last year so now we are going to be cycling that price increase in the fourth quarter and as well as you know, USA Today circulation has been impacted by the tremendous downturn in travel related and lodging related vacancy levels and just simple lack of traveling and that’s obviously an important component for USA Today but I would add that USA Today continues to be the number one newspaper in print circulation in the country. Our subscription levels were virtually flat in the quarter, despite obviously the impact on single copy and newsstand sales and hotel delivery as a result of the travel impact. And the good news is that we have maintained every single one of our hotel contracts throughout this recession and feel very good about how we are positioned. I will remind you that back after 9/11, our hotel distribution I think back then was off about 30%. And then from September of ’02 to September of ’08, I think our hotel distribution was up about -- a little more than 50%. So we anticipate that as the economy improves and as hotel and airline traffic comes back, that we will see the typical bounce that USA Today has always see in that aftermath of those kinds of events.

Just in addition, two other areas, packaged goods and restaurants, have also had some positive impact during the quarter so there are, in addition to the travel on the negative side, those other areas are certainly working for us and we are looking to seeing that to continue, Alexia.

Thank you.

Your next question comes from Michael Kupinski with Noble Financial Group.

Thank you. Sorry for the little background noise and welcome back, Craig. Just -- you may have mentioned this earlier but I was just curious in terms of the regional disparities that you might have in terms of the newspapers, you’ve made mention in the past about some of your most difficult markets, so I was just wondering if you could just talk a little bit about what you are seeing in those difficult markets. Are you seeing in terms of company wide trends, are they in line, are they below? Could you just give us a little bit more color there?

You know, on the regional trends, things have I think evened out a bit but we continue to see, for instance, in a Florida where we have Fort Meyers where there was a huge amount of speculation in secondary, third, fourth homes and folks were speculating, we continue to see obviously tremendous pressures there. Conversely in Bravard, Florida, which is not too too far from Fort Meyers on the other coast, we are actually seeing things, trends abate a little bit in that market. In Phoenix, things are continuing to struggle a bit on the real estate side but I think they’ve done a good job of recasting their structure. So we continue to see in the real estate side the California, Florida, Arizona, Nevada being very difficult but in those other categories, it really is very much a community by community difference.

And Gracia, in the past press releases, you indicated that those difficult markets in Florida, Nevada, California, represented a larger percentage of the decline in print, in classifieds. So were they basically in line with the company-wide performance in the quarter or were they still trending well below the company-wide performance?

They still would have trended probably 10 percentage points worse on the real estate vertical than in our other markets but the gap in the other verticals like employment and real estate are not that inconsistent.

Okay, terrific. Thank you.

Your next question comes from John [Corright] with Sandler Capital.

Question one -- can you update us on what you see as cash pension contributions, which I think are nothing this year, but ‘010 and ’11? And also, I still think you have something like $1 billion of face value bonds that are due in ’11 and ’12. Have you been buying any of those in or do you plan -- do you think that’s a good idea to buy them in or is all free cash flow simply going to go to reducing the bank debt?

John, on the pension side, as we’ve said, we will not have any mandatory cash contributions in 2009, we will not have any mandatory -- to the best of our knowledge, at this point, given where our pension fund stands -- in 2010. Obviously 2011 and 2012 depend a lot on what assumptions you make on returns, discount rates, employee population, et cetera, et cetera. Our pension plan I think on a preliminary basis is up about 20% or so for the first nine months of this year. A lot will depend on where the market and we end the year and where interest rates are, because that discount rate obviously can have a fairly significant impact on things as well. With respect to the bonds due in ’11 and in ’12, as you may recall we did extend the maturity of some of those ‘11s and ‘12s, I think about over $250 million of those maturities were extended in to 15s and 16s. Obviously we’ll continue to look at things on a very opportunistic basis and if we saw opportunities to do some things to further move maturities around and it made good economic sense for us, then we would do that. I think we have about $740 million of the ‘11s and ‘12s still due in ’11 and ’12 out of the $1 billion that we started with.

Gracia, also while I have you, I know it’s early but if necessary, can you hold CapEx next year to the $80 million type range? I mean, are there any projects that just have to get done next year?

Well, we are just actually finalizing our capital budge and it looks like it will come in in that range and we’ve taken a look at sort of a five-year horizon and we are pretty comfortable that for pure maintenance CapEx plus doing every project that provides a strong ROI, that the $85 million or so, including CareerBuilder, will be a sufficient number for us to continue to grow the strategic part of our business as well as to maintain our existing traditional businesses. We have no big new press projects or any other -- you know, like a DTV conversion, that are on the horizon. Obviously if something like that came up, then that would mean a shift in our thinking but no regulatory issues that we are aware of that would cause us to spend outside of that $85 million range.

Gracia, I just want to say that you and your team have been incredibly nimble in restructuring the balance sheet, because I remember back in -- when you had the New York City analysts luncheon, your bonds were yielding I think over 20% and I couldn’t figure out how you could do any refinancing, and here you are, you’ve done basically $750 million of financing just in the last few months so -- yet you are very light on your feet. Terrific.

Thanks very much. I just need to lose a few pounds, but yeah, thanks. I think we’ve got time for one more -- two more questions.

Your next question comes from Craig Huber, a private investor.

Yes, good morning and welcome back, Craig. Glad to hear your back is doing better. I guess a two- or three-part question. Can you just tell us, Gracia, your daily and Sunday circulation decline in the third quarter, how was that year over year? And then also, this roughly 28% ad revenue decline in the newspapers in the quarter, how much of that would think is from advertising rate as opposed to volume? I think last quarter, you thought it was about 5 percentage points.

Yeah, on the circulation side of things, I think the declines were similar to what we saw in the second quarter and I think at that time, when Bob Dickey talked about it, he mentioned the fact that we’ve taken a number of aggressive pricing actions on virtually every one of our newspapers. We’ve also reduced permanently some of that out of NDM or an area that’s important to our advertisers, so some of that circulation has been moved out. We’ve also seen some morphing to e-editions, like at USA Today and some other things that we are doing. Clearly we are going to be very careful on continued pricing actions and it is not dissimilar to what we’ve seen in the past where when you take aggressive pricing actions, you see a fall-off in circulation and then you spend some money on retention efforts and on start pressure and the like, and that circulation builds back up. But net net, you see the benefit and we continue to see the benefit of those pricing actions in our revenues. As to rate, I don’t think we can probably add much more than what we said on the second quarter earnings call that you know, again rate there’s not on monolithic rate. There’s online products, there are mobile products, there are all kinds of products that are in the mix and you know, in that 5% range, whether it’s give or take a couple of percentage points, hard to hone in particularly and specifically on that, other than to say that I think we are trying to be sensitive to our advertisers and the situations they find themselves in and trying to be more creative with them and helping them get through this difficult economic period for them as well. And then I think we will have tremendously solidified those relationships and as the economy improves, we will see more dollars flow out of them, as we always had hoped.

And Gracia, is that to say the circulation daily was -- I think you said second quarter pretty much it was down in the 11% range --

It was down in -- yeah, I think it’s in the low- to mid-teens, in that vicinity.

Okay. And then just also, as a point of clarification on CareerBuilder, the numbers you threw out, for the CareerBuilder sales force only generated revenues, how much were those down in the quarter year over year, please?

Year over year in the quarter I think we said that they were down -- let’s see -- CB generated -- they were down about 22% versus the prior year.

Great. Thank you very much.

Your final question comes as a follow-up from John Janedis with Wells Fargo.

Thanks for taking the follow-up -- just very quickly, for housekeeping, looking out to ‘010 for TV, does the retrans component stay around that $56 million or so, or 14 to 15 per quarter? Or is there another step up there?

There will be some step-ups as we move along, John.

Significant, Craig, year over year? Or is it more like a CPI number?

Probably more in the CPI range would probably be more realistic?

Okay.

Well, what do you think CPI is, John?

I’m not an economist, but not very much.

Well, I think we might do a little better than that.

Okay, and just on the Olympics front, I think you did $22 million back in ’06. Would you expect any kind of large change from that number, or would it be pretty close, do you think?

You know, it’s a little early yet for us to tell. I think with the time zones, with everything that we’ve got going for us, there may be a possibility but again, we’ve got a lot to look at with the advertisers and where this economy comes back. I don’t think it’s unrealistic but it’s a little early to try and figure that one out entirely yet.

Okay, thanks. Good luck.

Okay. We can take one last question and then we have to wrap it up.

Our final question comes from Jim Goss with Barrington Research.

Thank you. I was wondering with the discussion of the e-edition, if you are moving towards the notion of charging for at least some of the premium content and maybe talk about how the considerations might be changing as we move into an era where the debt has to pay for itself as well. And on a corollary, with the -- were you suggesting that the decline in circ at USA Today was basically due to lower occupancy rates at the hotels with whom you have the contracts?

It’s number one, lower vacancy rates at hotels that we have contracts at; number two, it’s lower number of travelers just in general, so airport newsstands, those kinds of things. So it’s a combination I think of all of those factors. Craig, did you want to --

On the --

On the daily circ, the first part of the --

The charging for premium content issue.

Right. You know, we have been, Jim, as you know looking at this for quite a period of time and strategically, we have lots of considerations on the table. We’re not at this point ready to make any pronouncements as to direction but it’s again, with lots of study, lots of research, and I think what you are seeing us do is really become very customer focused from a content standpoint on what that differentiation will be in really creating value, so it’s something to stay tuned with but we’ve done a lot of research and we are going to continue looking at it.

Okay, and maybe one last thing -- Craig, do you have any thoughts on the NBC as a cable network? That’s popped up into the whole set of discussions around NBC Universal and even if that would take years to unwind with affiliate relationships, it probably wouldn’t be viewed as a good trend for the largest NBC affiliate group operator. Is there any reality to that whole notion at all and how would you react?

You know, obviously we are not anywhere a part of those discussions but I think your conclusion, it probably wouldn’t be in the very best interest of us from the affiliate standpoint, but we’re just going to have to wait and see. There’s an awful lot going on in those discussions and time will tell and we will respond appropriately at that time.

Thanks very much.

Laura, I think that concludes our call.

Wonderful, thank you. That concludes today’s conference and thank you for your participation.