Gannett Co., Inc. Releases July Statistical Report

Business Wire, August 12, 2005

MCLEAN, Va. -- Gannett Co., Inc. (NYSE:GCI) reported today that total pro forma operating revenues for the seventh period ended July 31, 2005 were 0.7 percent higher, resulting from increased advertising demand at the company's local, domestic newspapers offset by revenue declines in its Broadcasting and UK operations. Broadcasting revenues declined 11.1 percent reflecting, primarily, significantly lower political ad spending. For comparison purposes, the drop in the exchange rate of Sterling year-over-year affected the company's results. If the exchange rate had remained constant year-over-year, total pro forma operating revenues would have increased 1.4 percent for the period.

Pro forma (assuming that all properties presently owned were owned in both periods) newspaper advertising revenues in July rose 2.6 percent compared with the seventh period in 2004 on a 2.6 percent decrease in ROP volume. If the exchange rate had remained constant year-over-year, total newspaper advertising revenues would have increased 3.4 percent for the period.

Pro forma local advertising revenues were up 4.7 percent on a 2.5 percent decline in ROP ad volume in July. The performance of the company's small and medium-sized advertisers in its domestic newspapers outpaced the revenue performance of its largest advertisers. In the U.S., across all products, local ad revenue gains were achieved in the department store, health and telecommunications categories while the furniture, financial and restaurant categories lagged last year's comparable period results. On a constant currency basis, pro forma local advertising would have advanced 5.1 percent.

Pro forma classified revenues increased 1.8 percent in the seventh period on a 2.7 percent decline in ROP ad volume. On a constant currency basis, classified revenues would have been 3.1 percent higher. Employment revenues were up 2.7 percent, real estate revenues rose 2.1 percent while automotive revenues were 8.9 percent lower compared to last year's seventh period. Overall, the company's domestic classified results were stronger than its UK results. In the U.S. employment revenues rose 14.1 percent and real estate revenues were up 5.4 percent. On a constant currency basis, employment revenues would have been up 4.2 percent, real estate revenues would have increased 3.6 percent and automotive revenues would have declined 8.2 percent.

Pro forma national advertising revenues in July declined less than 1 percent on flat ad volume. National volume at the company's local domestic newspapers was slightly higher in the period. At USA TODAY, advertising revenues were 1.2 percent lower on a 9.1 percent decline in paid ad pages to 355 from 391. For comparison purposes, USA TODAY's ad revenues were up 14 percent in July of 2004. For the seventh period, at USA TODAY, the automotive, technology, financial and home and building categories were positive while the travel, retail and advocacy categories declined compared to Period 7 in 2004. For the year-to-date, USA TODAY's advertising revenues increased 1.1 percent while paid advertising pages totaled 2,648 versus 2,757 last year.

Pro forma broadcasting revenues, which include Captivate, decreased 11.1 percent in the period. Television revenues were 11.6 percent lower reflecting significantly lower political advertising. Local revenues declined 3.3 percent while national revenues were 23.7 percent lower.

Based on July's results and current pacings for the remainder of the quarter, television revenues for the third quarter of 2005 would be below last year's comparable period in the high teens. This is due, in part, to the absence of over $50 million of political and Olympic advertising that benefited the third quarter of 2004.

In addition to the revenue and statistical summary, attached is a chart which shows the consolidated Gannett Online audience share from Nielsen//Net Ratings. In July, Gannett's consolidated domestic Internet audience share totaled almost 21 million unique visitors reaching approximately 14 percent of the Internet audience.

On August 3, 2005, the company and MediaNews Group announced the reorganization of the Detroit Newspaper Agency. As part of the transaction, Knight Ridder sold its newspaper interests in Detroit to Gannett and MediaNews Group and the two newspaper publishers formed the Detroit Newspaper Partnership, L.P. MediaNews Group acquired The Detroit News from Gannett and Gannett acquired the Detroit Free Press. Beginning in Period 8, Detroit's results will be fully consolidated in the financial statements of Gannett along with a minority interest charge to operations for MediaNews Group's interest.

In a separate transaction, the company announced an exchange of assets with Knight Ridder, Inc. in which Knight Ridder will receive from Gannett The (Boise) Idaho Statesman, and two newspapers in the state of Washington: The (Olympia) Olympian, and The Bellingham Herald. In return, Gannett will receive the Tallahassee (FL) Democrat and cash consideration. The transaction is subject to regulatory approval and is expected to close in early September. After closing, all previously reported results for the former Gannett properties will be reclassified to income from discontinued operations. In addition, a gain resulting from the exchange will be included in discontinued operations.