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ANT O,INC. CO., GANNETT CO., INC. ANNUAL REPORT ANNUAL 1999 ONE SMART COOKIE s 1999 ANNUAL REPORT 1999 ANNUAL

1100 WILSON BLVD., ONE

ARLINGTON, VA 22234 SMART

WWW.GANNETT.COM COOKIE THIS REPORT WAS WRITTEN AND PRODUCED BY EMPLOYEES OF GANNETT.

Senior Vice President/Public Affairs and Government Relations Mimi Feller

Treasurer and Vice President/ Investor Relations

Vice President and Controller George Gavagan

Director/Consolidation Accounting and Financial Reporting Wallace Cooney

FINANCIAL SUMMARY•1999 AT A GLANCE SHAREHOLDER SERVICES Director/Public Affairs and Government Relations GANNETT STOCK Tara Connell In thousands, except per share amounts 90 $3170 Gannett Co., Inc. shares are traded on the Stock Exchange with the symbol GCI. 1999 1998 Change 91 $3122 The company’s transfer agent and registrar is Norwest Bank Minnesota, N.A. General inquiries and requests Senior Manager/Publications 92 $3228 Operating revenues $5,260,190 $4,880,691 7.8% for enrollment materials for the programs described below should be directed to Norwest’s Shareowner 93 $3411 Laura Dalton Operating income 1,563,101 1,385,814 12.8% 94 $3583 Services, P.O. Box 64854, St. Paul, MN 55164-0854 or by telephone at 1-800-778-3299. Income from continuing 95 $3726 Art Director/Designer operations before 96 $4189 Gannett is pleased to offer the following shareholder services: Michael Abernethy non-recurring gains (1) 886,607 782,818 13.3% 97 $4474 Net non-operating gains 32,780 183,607 — 98 $4881 DIVIDEND REINVESTMENT PLAN Senior Corporate Writer Income from 99 $5260 The Dividend Reinvestment Plan (DRP) provides Gannett shareholders the opportunity to purchase additional Mary Hardie 919,387 continuing operations 966,425 (4.9%) Operating revenues in millions shares of the company’s common stock free of brokerage fees or service charges through automatic Earnings from discontinued reinvestment of dividends and optional cash payments. Cash payments may range from a minimum of $10 to Printing operations, net 38,541 33,488 15.1% 90 $355 a maximum of $5,000 per month. Monroe Litho, Rochester, N.Y. Net income 957,928 999,913 (4.2%) 91 $292 Income per share from 92 $341 AUTOMATIC CASH INVESTMENT SERVICE FOR THE DRP continuing operations before 93 $389 This service provides a convenient, no-cost method of having money automatically withdrawn from your check- non-recurring gains – diluted (1) 3.15 2.74 14.9% Photo Credits: 94 $455 ing or savings account each month and invested in Gannett stock through your DRP account. Income per share from net 95 $457 Cover photograph by Tenley Truxell- non-operating gains – diluted 0.11 0.64 — 96 $503 Svenson, Gannett. Page 2: Curley and DIRECT DEPOSIT SERVICE Income per share from 97 $681 McCorkindale by Truxell-Svenson, continuing operations – diluted 3.26 3.38 (3.5%) 98 $782 Gannett shareholders may have their quarterly dividends electronically credited to their checking or savings Gannett. Page 5: McCorkindale and Brown by Colin Beere. Page 6: Income per share from 99 $886 accounts on the payment date at no additional cost. AmeriCorps by Tamara Reynolds. Page discontinued operations – diluted 0.14 0.12 16.8% Income from continuing operations before net non-operating gains, in millions 7: Ethics by Craig Bailey, Net income per share – diluted 3.40 3.50 (2.8%) FORM 10-K TODAY. Page 9: Henry and Wanninger by Information provided by Gannett in its Form 10-K annual report to the Securities and Exchange Commission has Operating cash flow (2) 1,843,192 1,639,277 12.4% 90 $1.10 Bob Nandell, The Des Moines (Iowa) been incorporated in this report. Copies of the complete Form 10-K annual report may be obtained by writing 91 $.96 Register; Zito by Truxell-Svenson, 92 $1.18 the Secretary, Gannett Co., Inc., 1100 Wilson Blvd., Arlington, VA 22234. Gannett. Page 10: Town Crier by Gary Working capital $ 191,444 $ 178,418 7.3% 93 $1.32 Atkinson, Evening Press. Page 11: Long-term debt 2,463,250 1,306,859 88.5% 94 $1.57 ANNUAL MEETING Reader Holidays by Jim Holden, The 95 $1.62 Total assets 9,006,446 6,979,480 29.0% The annual meeting of shareholders will be held at 10 a.m. Tuesday, May 2, 2000 at Gannett headquarters. Daily Argus. Page 12: Erik Sundvall, USA 96 $1.78 TODAY. Page 13: Baseball Weekly by Capital expenditures (3) 239,438 220,449 8.6% 97 $2.39 FOR MORE INFORMATION Barbara Jean Germano, Baseball Weekly. Shareholders’ equity 4,629,646 3,979,824 16.3% 98 $2.74 News and information about Gannett is available on our Web site (www.gannett.com). Quarterly earnings Page 14: Whatever by Tom Strand. 99 $3.15 Page 15: Gallivan and Demler by Bob Dividends per share .82 .78 5.1% information will be available around the middle of April, July and October 2000. Income per share (diluted) from continuing operations before net non-operating gains Collignon. Page 16: Truxell-Svenson, Shareholders who wish to contact the company directly about their Gannett stock should call Shareholder Average common Gannett. Page 18-20: Dave Leonard, shares outstanding – diluted 281,608 285,711 (1.4%) Services at Gannett headquarters, 703-284-6960. except Moon by Melissa Moore, The (1) Excluding a 1999 net non-operating gain principally from the exchange of KVUE-TV Herald-Dispatch, Huntington, W. Va. in Austin, , for KXTV-TV in Sacramento, Calif., totaling $55 million pre-tax GANNETT HEADQUARTERS and Vega by Robert McKean, and $33 million after tax ($.11 per share-basic and diluted) and a 1998 net non- Newspapers. operating gain principally from the disposition of several businesses, including 1100 Wilson Boulevard radio and alarm security, totaling $307 million pre-tax and $184 million after tax Arlington, VA 22234 ($.65 per share–basic and $.64 per share–diluted). 703-284-6000 ? Printed on recycled paper (2) Represents operating income plus depreciation and amortization of intangible assets. (3) Excluding capitalized interest and discontinued operations. 77 COMPANY PROFILE: mately 45,800employees. T shares ofcommonstockareheldbyapproximately14,000shareholdersrecordinall50statesandseveral foreigncountries. theoldestcontinuouslypublishednewspaperinworld. includingBerrow’s Worcester Journal, publications, Newsquestalsopub Itspublicationsinclude11dailynewspaperswithacombinedcirculationofapproximately450,000. 180 titles. aweeklynewspapermagazine. andUSA WEEKEND, variety ofnon-dailypublications, withacirculationofapproximately2.3million TheyincludeUSA thenation’sTODAY, largest-sellingdailynewspaper, 6.6 million. Germany andHongKong. England, Guam, theDistrictofColumbia, andoperations in45states, Va., in Arlington, Gannettisaninternationalcomp dataservicesandnewsprogramming. anewswireservice, commercialprinting, engaged inmarketing, ant a one yFakE ant n soitsi 96adicroae n12.Tecmaywn ulci 97 Itsmore The company wentpublicin1967. Gannettandassociatesin1906incorporated in1923. Gannett wasfoundedbyFrank E. The companyownsandoperates 21televisionstationscovering17.4percentoftheUSA. isoneofthelargestregionalnewspaperpublishersinEng awhollyownedGannettsubsidiaryacquiredinmid-1999, plc, dailynewspapershaveacombineddail Thecompany’s 74U.S. Gannett istheUSA’s largestnewspapergroupintermsofcirculation. ant o,Ic sadvriidnw n nomto opn htpbihsnwppr,operates broadcastingstationsandis isadiversifiednewsandinformationcompanythatpublishesnewspapers, Inc. Gannett Co., 77 76 70 21 18 16 14 12 10 6 2 GANNETT SHAREHOLDERSERVICES GLOSSARY OFFINANCIAL TERMS SERVE MARKETS WE FINANCIALS TABLE OFCONTENTS COMPANY AND DIVISIONALOFFICERS BOARD OFDIRECTORS BROADCASTING TODAY USA NEWSQUEST PLC NEWSPAPERS SHAREHOLDERS LETTER TO nadto,Gannettownsa Inaddition, . he companyhasapproxi- lishes avarietyofnon-daily land withaportfolioof y paidcirculationof any withheadquarters than278million 1 TABLE OF CONTENTS Gannett ended the second millennium with a great performance: 1999 was our eighth consecutive year

of record revenues and profits.

Our newspapers led the way, helped by the longest economic expansion in history. Gannett’s revenues

increased 8 percent to almost $5.3 billion and earnings advanced 13 percent to approximately $886

million. Our operating cash flow increased 12 percent to $1.84 billion, another record level. Behind the

success was strong advertising demand at all the papers, a smart acquisition overseas and lower

newsprint prices. And USA TODAY had record operating results. Not included is a one-time gain from the

exchange of our ABC affiliate in the smaller Austin, Texas, market for the ABC affiliate in Sacramento, Calif.,

the number 20 television market, and cash.

Also excluded are the contributions of the Cable Division, which was sold on Jan. 31, 2000 to Cox

LETTER TO SHAREHOLDERS

Gannett Chairman and CEO John J. Curley (left) and Vice Chairman and President Douglas H. McCorkindale

Communications for approximately $2.7 billion in cash or about $5,200 per subscriber, the upper end of

the price range for cable.

Cable was part of the Multimedia acquisition, a deal that exceeded our expectations over the years.

We paid $2.3 billion for all of Multimedia in 1995 and, since then, sold the entertainment, security and

cable divisions plus a few small properties for a total of $3 billion. We still own all of the significant news-

papers and television stations that were part of the deal – and Multimedia added to our earnings in every

quarter we owned it.

Gannett’s strategic focus continues to be on using our substantial cash flow to and expand

quality products and to make acquisitions in the news, information and related fields. In 1999, we made

a number of smart investments consistent with those goals.

2 so quickly. this sizetoenhanceearnings unusual foranacquisitionof in 1999.We believeit’svery Newsquest addedtoearnings anticipated interestrates, performance, andlower-than- goodoperating company’s opportunities. Becauseofthe tioned tocapitalizeonthese initiatives andiswell-posi- individual andindustrywide efforts throughanumberof It hasexpanded itsInternet site intheUnitedKingdom. per grouptolaunchaWeb was thefirstregionalnewspa- communities. Newsquestalso satisfy theneedsoftheir valued, trustedproductsthat news andinformationthrough ours, isonprovidinglocal discipline. innovation andfinancial who shareourcultureof managed bysuperbpeople high-quality properties, Brown, wefoundagroupof under theleadershipofJim t most significantoverseas thedealwasGannett’s lion, England. At about$1.7bil- newspaper publishersin one ofthelargestregional acquisition ofNewsquestplc, ransaction ever. InNewsquest, Newsquest’s focus,like In July, wecompletedthe to addmoreproductsand markets. In2000, weintend teristics oftheindividual based ontheuniquecharac- and numerousspecialtysites sites community-oriented sites, richclassifiedverticals, These productsincludenews offer onlineto480-plus. doubled theproductswe the yearandwemorethan Web sitesgrewto60over of ourdomesticnewspaper Gannett in1999.Thenumber Internet wasthebusinessof isn’t budging. the playingfield,FCC Congress seemwillingtolevel While somemembersof properties inthesamemarket. newspapers andbroadcast bars Gannettfromowning unchanged bytheFCC,still rule,left cross-ownership that secondstation.Butthe possible forustoacquire rules,makes it Commission, includingnew Federal Communications ownership regulationsbythe ening ofseveralbroadcast affiliate,WTLV.NBC Aloos- where wealreadyownthe WJXX inJacksonville,Fla., small televisionstation, an agreementtopurchasea The businessofthe In November, wereached television markets in1999. through Web sitesin13ofour launched newmediaactivities dot.com world. almost unheardofinthe profit fortheentireyear– USATODAY.com madea ships exploded in1999and and e-commercesponsor- added. Advertising revenue multimedia coveragewas content wasenhancedand Internet leader. Overtheyear, its positionin1999asan USATODAY.com solidified general newssiteontheWeb, our printproducts. generating subscriptionsfor who arenotreadersand sites areattractingvisitors AndourWebties weserve. advertisers inthecommuni- enjoy withourreadersand relationships wealready and enhancethestrong those importantlocalbrands, use theInternettoleverage newspapers willcontinueto ultimately, profits.Our generate revenueand, pers toextend theirbrand, for ourcommunitynewspa- and anexciting opportunity small-market newspapersites. launch theremainderof As themostvisited The Internetisachallenge Our broadcastgroup 6 percentfortheyear.” expenses thatdeclined national –andnewsprint particularly inclassifiedand advertising demand– benefiting fromstrong record earnersin1999, “Our newspaperswere 3 LETTER TO SHAREHOLDERS GANNETT’S BASIC GAME PLAN Each of our major stations has The Newspaper Division

BUSINESS DEFINITION made significant progress in published the Principles of Gannett is an international $5.3 billion news, information and creating a new business around Ethical Conduct for communications company. its Web activities and we plan Newsrooms, continuing We operate with the belief that improving products and sound to have Web sites in all our TV Gannett’s leadership role in management will lead to higher profits for our shareholders. markets in 2000. demanding proper press The underlying theme in our ads is: “A world of different voices Overall, Gannett generated conduct and high ethical where freedom speaks.” about $40 million in revenue standards in news gathering. Our assets include: in 1999 from Internet activi- While the world of news and • USA TODAY; ties, with a minimal loss. information explodes, our • Daily and weekly community newspapers and specialty Gannett stock became one goal is to stay ahead of the publications; of our smart investments in pack while building credibility • Television stations in many Top 25 and growth markets; 1999. In late August, we with readers. • Online news, information and advertising. activated our share repurchase The strategy made for good program and bought almost journalism and good business. STRATEGIC VISION 2.4 million shares at a total Readership was up in • Create and expand quality products through innovation; cost of about $163 million for 1999, proving value should • Make acquisitions in news, information and communications and the year. Early in 2000, we be measured by the number related fields that make strategic and economic sense. believed that our stock price of people who read a newspa- did not reflect the underlying per, not solely by the number OPERATING PRINCIPLES value and strength of our who buy it. Increasingly, the • Provide effective leadership and efficient management; businesses and decided to industry and the advertising • Achieve a positive return on new and acquired products and repurchase additional stock. world are taking notice, and properties in a reasonable period of time, while recognizing those Subsequently, the Board studies of readership are with high growth potential may take more time; approved another $500 million underway, both at Gannett • Increase profitability and increase return on equity and investment authorization. On February 23, and nationally. over the long term; having used a substantial por- Our newspapers were • Enhance the quality and editorial integrity of our products, tion of that authorization, the record earners in 1999, recognizing that quality products ultimately lead to higher profits; Board approved an additional benefiting from strong adver- • Guarantee respect for and fairness in dealing with employees; $500 million for purchases of tising demand – particularly • Offer a diverse environment where opportunity is based on merit; Gannett stock. in classified and national – • Show commitment and service to communities where we do Even while taking advan- and newsprint expenses that business; tage of international expansion declined 6 percent for the • Deliver customer satisfaction; opportunities, Gannett’s year. We also enjoyed another • Dispose of assets that have limited or no potential or where an sights in 1999 remained year of profit improvement at offer has been made that the Board of Directors believes is in the focused on credibility and The Detroit News, our New best interest of the shareholders; dedicated to local news and Jersey properties and USA • In all activities, we show respect for the First Amendment and our our communities. WEEKEND. And while responsibility to it.

4 LETTER TO LETTER TO SHAREHOLDERS

newsprint prices will increase to bring news and informa- spending should improve Above: Newsquest Executive in 2000, we don’t expect tion to the newspaper and revenues and earnings in 2000 Chairman James Brown (right) market conditions to result in USATODAY.com. while our stations take advan- and Douglas McCorkindale, when substantially higher prices for Programs expanding read- tage of the opportunities to the acquisition of Newsquest was publishers. ership, such as USA TODAY’s attract new viewers and grow announced in 1999. USA TODAY had its best innovative plan to attract our core product: local news. year ever and is the nation’s college students, will continue And investments in technology largest selling daily newspaper to broaden its reach with will continue as we move with readership at 5.4 million important new audiences. deeper into the digital age. and average circulation of And the new year will bring But whether we’re talking approximately 2.3 million the first significant redesign in about core products or copies per day reported by USA TODAY’s 17-year history. technology-driven expansions, the Audit Bureau of 1999 was a challenging our smartest investments are Circulations. Advertising year for our television sta- still our employees. That’s revenues grew 17 percent as tions. The absence of major why 1999 saw us stress, at several of the paper’s largest special events on our stations corporate and in the field, ad categories experienced – the , Winter recruiting and retaining double digit growth. Dot.com Olympics and strong election talent. “Grow Your Own” is advertising added to the spending, all of which an important objective at boom: USA TODAY led all bolstered results in 1998 – Gannett. major print publications in made for difficult comparisons As we enter the 21st the share of paid dot.com in 1999. With the trade of century, we will continue to advertising pages. our Austin, Texas, station for expand our traditional Looking ahead for USA one in Sacramento, our 21 businesses, explore new TODAY, 2000 is an election stations covered 17.4 percent opportunities and enhance and an Olympics year, of U.S. households. our values. And in that promising a boost in ad We expect to close on the process, we will always work spending. Internet brand- second Jacksonville station in to meet the needs of the building will continue as we the first half of 2000. communities we serve. That’s take advantage of our solid Olympics and election ad the smart thing to do. foundation and seek out new opportunities. In 2000, Gannett’s Broadcasting Division will join with USA TODAY to bring content from The Nation’s Newspaper to John J. Curley Douglas H. McCorkindale our TV stations, and to make Chairman and Vice Chairman and President use of our stations’ resources Chief Executive Officer

5 Record revenues and record operating profits spurred by continued growth in

classified ads and a strong performance in national advertising marked 1999 for

Gannett’s U.S. Newspaper Division.

The division’s 73 community newspapers sold an average of 1,130 more ads

per day in 1999 than in 1998, reflecting the newspapers’ successes in selling to

a larger number of smaller advertisers. Total pro forma advertising revenues

increased more than 4 percent in 1999; run-of-press volume increased almost

5 percent. Operating profits increased at most of the newspapers.

Classified revenues increased 7 percent over 1998. Key growth areas in

classified included employment, automotive and real estate.

At USA WEEKEND, strong ad categories included retail and pharmaceuticals.

NEWSPAPERS

For USA WEEKEND’s Make A Difference Day, Nashville AmeriCorps volunteers clean up a blighted block where the Salvation Army Adult Rehabilitation Center helps drug addicts.

The weekly newspaper magazine also saw an increase in technology business,

including ads for dot.coms, which grew substantially to $3.3 million.

In 1999, USA WEEKEND revamped its design and content with an eye to

capturing a larger share of readers ages 25-44. USA WEEKEND remains the

nation’s fastest growing newspaper magazine. (See story, page 7).

Gannett newspapers’ daily and Sunday net paid circulation were down

slightly, with circulation revenue closing 1 percent lower. Net paid circulation,

however, doesn’t tell the whole story. Research indicates overall readership,

(continued on page 8)

6 Wal-Mart Foundation, along with theGannettFoundation in USAWEEKEND than everbefore Two millionpeople DIFFERENCE MAKING A Newman raising money. states indonatingtimeand leaders andcitizensofall50 ment officials,charitable Tony Stewart,joinedgovern- Foreman andNASCAR driver McEntire, boxer George superstarReba country-music America HeatherFrench, day ofvolunteering. event intothenation October 1999,turningthe Make ADifferenceDayin million in541newspapers newspapers, upfrom21.2 reaching 21.8millionin563 13th consecutiveyear, newspaper magazinein1999. high pointsfortheweekly people haveparticipated. Day, morethaneightmillion created Make ADifference Points ofLightFoundation, END, inpartnershipwiththe Since 1992whenUSAWEEK- charitable grantsforprojects. contributed to$2.6millionin Partnerships with Celebrities, includingMiss Circulation grewforthe That wasjustoneofmany ’ s Ownandthe – participated ’ – s annual ’ more s largest , 32 percent. advertising in1998,increasing recovered fromaseveredropin The pharmaceuticalcategory from Sears,RoebuckandCo. with muchofthatbusiness grew 87percentover1998, Bullard. Theretailcategory CEO andEditorMarcia USA WEEKENDPresident, well aheadofexpectations, says Top 10market. USA WEEKENDintoanother Examiner andChronicleput Sunday SanFrancisco 1998. Theadditionofthe WEEKEND readers respondedtoUSA popular culturecontinued. Coverage ofentertainmentand finance andfoodstories. health, technology, personal and content,addingmore WEEKEND revampeditslook survey, sponsoredjointlyby “ 36,000 peoplevotedina show ChannelOne.Some ed withthein-classroomTV Annual Teen Survey, conduct- participated inthe12th Nearly 200,000students (www.usaweekend.com). magazine quizzes, manyviathe Stories oftheCentury More than500,000 During theyear, USA Advertising finishedtheyear ’ s onlinesite ’ s pollsand ”

Freedom Forum USA WEEKENDandthe focusing onnews-gathering the increaseinlawsuits media; andaneedtoaddress over publicdistrustofthe tive reporting;adeepconcern strong buthonorableinvestiga- principles: adesiretosupport prompted creationofthe Watson saysseveral factors members ofthemedia. attention ofreadersandother garnered theimmediate Principles ofEthicalConduct Newspaper Division for itsnewsrooms.The detailed guidelinesonethics In 1999,Gannettsetout NEWSPAPERS ETHICS TOPPED reprint aDecemberstory, Management Agencyasked to too. TheFederal Emergency magazine saved herlife. editors shefeltthearticlehad story. Onewomantoldthe TV newsshowspicked upthe victims. Majornewspapersand to reliefworkers andflood The articlewillbedistributed the deadlyeffectsofmold. Your HouseKillingYou?, Readers reactedtothe Division PresidentGary ’ s reportingefforts, (continued onpage9) ’ AGENDA ’ s Newseum. ’ s ” on “ Is and factualerrorsonproofs. Marge Belllookformisspellings BillPowelland Sharon Kelly, nity proofreadersGeneCate, commu- Fromleft, see mistakes. the newspapere-mailswhenthey sending others prooffromhome, Theyand the paperondeadline. the newspaperofficeandproof dozen areinvitedtocome several Periodically, responded. About100 as proofreaders. inviting readerstovolunteer County publishedacolumn atBrevard effort, Above: As partofitscredibility 7 1999 NEWSPAPERS paid circulation plus pass-along readership, has grown industrywide and for

Gannett community newspapers in the past decade. In an effort to better reflect

the actual number of readers, 12 Gannett newspapers published readership

audits in 1999 conducted by the Audit Bureau of Circulations.

On the Internet, 1999 was a year for expansion both of content and product

lines for the community newspapers. Revenue from online operations in the

fourth quarter of 1999 was more than triple the amount for the first quarter of

1998. Traffic is now in excess of 50 million page views per month. The number

of products has doubled to more than 480. The division’s goal for 2000 is to

launch online sites for the remaining Gannett dailies.

Among the division’s smart choices in 1999 was publication by the division

NEWSPAPERS (continued from page 6)

of the Principles of Ethical Conduct for Newsrooms, giving reporters and

editors a comprehensive guide to ethical and effective methods of news

gathering. Training on the guidelines was conducted at Gannett newspapers

throughout the year. (See story, page 7.)

Gannett newspapers also began the conversion from a 54-inch web width to

a 50-inch web. The narrower page makes newspapers easier to carry, hold and

fold – and reduces newsprint expense. Eight daily newspapers switched in 1999.

More than 50 newspapers and offset print sites will have converted to the

narrower web width by the end of 2000.

Installation of the Gannett-developed Genesys software, which provides a

universal customer database to our newspapers’ circulation and advertising

departments, was completed, closing out the three-year development and

installation period.

Regionally, Gannett papers made smart moves that increased circulation.

The Des Moines Register and the Iowa City Press-Citizen began jointly pro-

ducing a new Sunday edition. The Johnson County edition of The Sunday

Register, which includes a 24-32 page wrap produced by -Citizen, is

distributed throughout the Iowa City/Johnson County, Iowa, area. This new prod-

uct resulted in increased paid circulation for the Sunday Des Moines Register

and ad revenues for the Press-Citizen.

And the St. Cloud (Minn.) Times converted its weekday edition to morning

publication and introduced a number of content improvements. An immediate

circulation gain was the result.

For more on the Newspaper Division’s financial performance, see page 25.

8 improve thecommunity ties offeredbytheInternetto technology andtheopportuni- Gannett tookadvantageof TECHNOLOGY ON TARGET • • • and inpublicpresentations: public throughthenewspapers are beingsharedwiththe during theyear. Theguidelines program ontheprinciples nalists wentthroughatraining of stories. methods andnotonthetruth reader concerns. processes andrespondto explain theirjournalistic er representativestohelp newspapers appointedread- directly totheeditor. Other accuracy andcredibility group tobringissuesof impaneled areaderadvisory Huntington, W. Va., The Herald-Dispatchat credibility issues. it onaccuracyandother form invitingreaderstorate “ phone hotlineandadaily Advertiser nowhasatele- (Ala.) The Montgomery and lateronpublicradio. in itsSundayForum section six-week dialogueonethics Press engagedreadersina The Burlington(Vt.)Free About 5,000Gannettjour- report card ” incoupon CareerPath.com andClassified branded sitessuchas munity effortstonationally run thegamutfromlocalcom- more. apartments, homes,jobsand helping themsearchforcars, more informationonlinewhile The goal:togiveconsumers vices andspecialtyproducts. with linkstonationwideser- line classifiedsandtheirreach presences enhancedtheiron- putting themontheInternet. variety ofways,including stories, graphicsandadsina gies, newspapersnowcanuse their communities. local newsandinformationin for position astherepository newspapers solidifytheir imaging. and direct-to-plate modems, pagelayoutsoftware camera-ready material,cellular scanners, flatbedscannersfor digital cameras,remoteimage toolssuchas state-of-the-art content. Theprocessuses deadlines andmoretimely allowing forlatereditorial to anall-digitalworkflow, products andservices. newspapers andoffernew Online classifiedproducts Most newspaperswithWeb Using thenewtechnolo- Going digitalhashelped More newspapersswitched vendors. licensing feesfromoutside company thecostofsoftware its developmentwillsavethe for salesoutsideofGannett, guides anddirectories. movie andcommunityevent estate, automotive,dining, format forproducingreal papers aneasy-to-customize print media.Itoffersnews- the flowfromWeb pagesinto newspapers toeasilymanage information andalsoallows newspaper contentintoonline product. El Paso, Texas, installedthe Hill,N.J.,and Iowa, Cherry Ky., ,DesMoines, Del.,Louisville, Wilmington, in Pottsville, Pa. Later, newspaper and anon-Gannett (Ala.)Advertiser Montgomery TODAY atBrevardCounty, the Palm Springs,Calif., FLORIDA debuted atTheDesertSun online cityguides.Thesoftware media buildandmaintain help newspapersandother softwaredesignedto CityServer International launchedCelebro Gannett MediaTechnologies Newhomenetwork.com. Apartments.com and Ventures While ithasthepotential converts CityServer Early intheyear, ’ Cars.com, edition of The SundayRegister. theJohnsonCounty edition, jointly producedSunday Chuck Wanninger holdtheir City Press-CitizenPublisher Publisher BarbaraHenryandIowa Above left: Above right: of CelebroCityServersoftware. demonstrates theeffectiveness President andCEODanZIto Technologies International Des MoinesRegister Gannett Media 9 1999 NEWSPAPERS Gannett made a smart choice in July when it acquired Newsquest plc, says the British company’s Executive

Chairman James Brown. “It is a fine company and there’s no doubt, in my view, that Gannett got a bargain.”

Newsquest is one of the largest regional newspaper publishers in England, with 180 publications including

11 dailies. The purchase expands Gannett’s international reach, giving the company a major foothold in the

United Kingdom.

About one-third of Newsquest’s newspapers are more than 100 years old. Berrow’s Worcester Journal,

established in 1690, is the oldest continuously published newspaper in the world. While maintaining this fine

tradition, Newsquest has been a leader in expanding into new lines of Web-based products and technology. In

1995, Newsquest was the first regional newspaper group in the U.K. to launch a Web site. Since then it has con-

tinued to build its Web-based strategy, skill base and knowledge, with every Newsquest newspaper having an

Internet presence. In 1999, it pioneered a new e-commerce service called Shoppers World. (See story, page 11.)

NEWSQUEST PLC

York town crier John Redpath catches up on what’s happening in Britain’s Evening Press.

Newsquest also publishes lifestyle and business magazines, local information guides and seasonal publica-

tions. In 1999, new launches included Limited Edition, a glossy, high-quality lifestyle magazine, local business

news magazines and a guide to local Web sites.

Newspapers and magazines are not the only products offered by Newsquest. In 1999, the company

expanded a service that now books more than 100,000 people a year on vacations, trips to the theater and other

leisure pursuits. (See story, page 11.) The year also saw an extension of the range of local exhibitions organized

by Newsquest, including auto and bridal shows and job and technology fairs.

Meanwhile, quality remains a top priority. Among the honors bestowed in 1999: The Westmorland Gazette

was named Weekly Newspaper of the Year by the U.K. Press Gazette, a journalism publication.

For more on Newsquest’s financial performance, see page 25.

10 ing togetherthreemajoronline under theFish4 banner, bring- advertising ontheInternet publishers grouptheirclassified Several leadingregional “Fish4” inSeptember1999. relaunched andrenamed Newsquest helpedfound,was ADHunterU.K.,which service, covering mostoftheU.K. Newsquest hassucceededin Through thisnetworkofsites, specific localinformation. national resourcesaswell allowing userstoaccessmajor together newsandsports, isBritain”partners. “This brings was developedwithseveral team affiliationorothermeans. interest group,hobby, sports forms ofcommunitydefinedby of thenewspapersbutalsonew nity withinthecirculationarea not onlythetraditionalcommu- is…”Web“This sitesembraces communities.” Thenetworkof its newssitesinto“digital U.K. publishersandconverted teamed withotherleading Kingdom. development intheUnited being attheforefrontofInternet Newsquest hasareputationfor INTERNET PRESENCE NEWSQUEST EXPANDS The sites’onlineclassified A nationalportalsitealso In 1999,Newsquest to-person onlineauction to-person andmerchant- person-to-person acquired 10percentofthe Auctions.Freeserve Newsquest made astrategicinvestmentin developments. tional focustoInternet-related Digital Media,providesaddi- separate division,Newsquest number isgrowing. have jumpedonboard,andthe over 4,000itemsforsale– and businesses–withwell World. Morethan160shops calledShoppers a newservice Newsquest in1999pioneered threat ofe-commerce, people’s concernsaboutthe committed totheinitiative. site. Sponsorsalreadyhave is…” within thelocal“This ning tobuildtheirownsites schoolsarebegin- this service, age andupdateremotely. Using clubs andassociationscanman- pages whichorganizations, the sitesbycreatingcommunity level. narrow downtothemostlocal Users cansearchnationallyor features 1.9millionbusinesses. service Fish4it! onlinedirectory Fish4jobs andFish4cars. The sites–Fish4homes, service In early2000,Newsquest The formationin1999ofa To answerlocalbusiness Newsquest furtherenhanced the phone. their vacationwithoutlifting andbeginbooking services database ofdestinationsand Newsquest online canlearnmoreabout ested inbookingavacation ing popular. Nowthoseinter- their Web sites,whichareprov- to newspapers placedlinks End ofLondon. concerts, usuallyintheWest and daytripstoshows tospecialevents packages and HongKong. 11 daysofsightseeinginChina Valentine destinations, rangingfroma regional andinternational Holidays A HIT WITH READERS VACATION SERVICE papers andcash. in Newsquest’sregionalnews- inreturnforadvertising service people in1999booked papers, morethan100,000 around theglobe. todifferentlocations packages offering anevenwiderrangeof in1999by vacation service sion ofitssuccessfulreader Newsquest continuedexpan- “ In 1999,manyNewsquest Also offered:cruises,travel Through Newsquestnews- Reader Holidays ” ’ s Weekend inParis to todozensoflocal, ’ s program,accessa ” on “ Reader brand. advertising undertheFish4 to grouptheironlineclassified with otherregionalpublishers Above right: London’sEnd. West such astothe Aldwych Theatre in — andtoplacescloserhome, flung locationsaroundtheworld customers bookvacationstofar- servicehelps “Reader Holidays” Above left: Newsquest’s popular Newsquest partners 11 1999 NEWSQUEST PLC Advertising success marked 1999 for USA TODAY. From the launch of the front page color ad (see story, page 13)

to capitalizing on the economic boom, the nation’s newspaper made one smart move after another.

Ad revenues for the year grew 17 percent, the number of ad pages increased 13 percent and the scope of the ads

broadened. USA TODAY also led all major publications in paid dot.com advertising and a 38 percent increase in

international revenue was logged.

Growth was the word in circulation as well, despite the challenges of stiffer competition, earlier rush hours and

heavier traffic. The paper registered its 17th annual increase in average daily circulation. An innovative readership

program brought USA TODAY to 160 college campuses in 1999, with more in line for 2000.

Under new Editor Karen Jurgensen, editorial introduced a stock index, the Internet 100, and increased coverage of

the “e-world.” A “Readers’ Bill of Rights,” accuracy surveys and stepped-up training of editors and reporters honed skills.

Breaking news remained the biggest driver of traffic on USATODAY.com.Nearly 15 million different people per month

USA TODAY

USA TODAY is offered to students in U.S. college and residence halls, such as at George Washington University in Washington, D.C.

were clicking on the site by year’s end, a 79 percent increase over 1998. Revenues were up 89 percent, making the site

one of the few media money-makers on the Web.

Technological advances in 1999 allowed production of USA TODAY to be totally digital. Installations of a new editing

system and a single-copy sales and distribution system were completed successfully. Arriving in the year 2000 will be

computer-to-plate technology that will provide newsrooms with later deadlines and readers with earlier delivery times.

Other developments in 2000: Five print sites will be added in Lansing, Mich., Las Vegas, Raleigh, N.C., and in Belgium

and Italy. The year also will bring the first significant redesign in USA TODAY’s history as the paper moves from a

54-inch to a 50-inch web width. And USATODAY.com will work with Gannett Broadcasting to bring USA TODAY content

to Gannett TV station newscasts.

For more on USA TODAY’s financial performance, see page 25.

12 USATODAY.com Olympics coverageandlater Jurgensen says. ing andeditorialcontent, the differencebetweenadvertis- with stories. readers apttoconfusetheads “ concurred withthedecision. for atleastayear. advertiser tookonedayaweek when circulationishigher. Each $1.2 millionayearforFriday, Monday throughThursdayand a once-a-weekplacement associate publisher. vice president/advertisingand says CarolynBivens,senior nearly one-inch-deepspace, quickly committedtothe the bottomofPage One. publishing displayadsalong October whenitbegan the U.S.newspaperpackin USA TODAY broke awayfrom PAGEOPENS TOFRONT ADS space to already hadbeenusingthat space becauseUSATODAY don other countries. on frontpagesarestandardin section frontsforyearsandads We AT&T, theTuesday advertiser Editor Karen Jurgensen Editor Karen Cost is$1millionayearfor Five marqueeadvertisers The frontpageads ’ ’ t encroachoneditorial ve runadsontheinside promote firstits “ They cantell ” . Norare

” and currency. cation providingimmediacy new andefficientways, dented impactanddoingitin create uniqueandunprece- is terrific.It USA TODAY. Itstargetaudience cations worldwide. president/marketing communi- Stephen Graham,AT&T vice Weekly tomake thefirst Sporting GoodsallowsBaseball column. sponsors theFantasy Insider Keith Cutler. SportsLine CBS ‘ comparable toUSATODAY on Page 3, sponsors thecoloradlocated 1999. MajorLeagueBaseball high-profile advertisersin partnerships withseveral April, securednewmulti-year publication, 9yearsoldthis revenues atall-timehighs.The advertising andcirculation had itsbestyearever, with USA TODAY BaseballWeekly MORE OF THE GAME BASEBALL FANS GET products. and wireless services its consumer, businessand front pagespacetopromote among thefive,isusingits window Another dealwithRawlings “ We ’ re alwayslookingto ’ ads, “ ’ s anationalpubli- a key position, ” ” saysPublisher “ We like ” says ’ s tied totheevent. The SportingNewshadbeen National Leagues.For years, position intheAmericanand fielding achievementateach given annuallyforoutstanding GoldGloveAwards, Rawlings exclusive announcementofthe tribute toBaseballWeekly deal isacoupforusand Weekly results exclusively forBaseball 700-plus members,with Baseball Researchtopollits the SocietyforAmerican the Century For its the jobofanadvancescout. readers afirst-handlookat Pat Dobsonforaweek,giving followed SanFrancisco Giants taking amuscleenhancer. It Mark McGwirehadstopped that St.LouisCardinalsslugger paper wasthefirsttoreport tant enterpriseefforts.The baseball, and withinthebusinessof presence amongbaseballfans totalbaseballweekly.com. and interactiveWeb sitecalled presence withanenhanced will beefupitsInternet history. editor inBaseballWeekly ated themostlettersto Readers alsofoundimpor- This spring,thepublication “ ’ s use.Thelistgener- Top 100Playersof ” Cutlersays. ” list,itasked “ To getthis ’ s ’ s ’ 1999 Arizona Fall Leaguegame. TODAY Baseball Weekly beforea catch uponthenewsinUSA Texas RangerpitcherMattMiller Sox catcherSteveLomasneyand Above right: the chancetobuyspace. Advertisersjumpedat October. publishing front-pageadsin Above left: USA TODAYbegan Top prospectsRed 13 1999 USA TODAY Swapping the Austin, Texas, TV station for cash and KXTV-TV in Sacramento, Calif., a significantly larger market,

was just one of the Broadcasting Division’s strategic moves in 1999. Another: the agreement to buy WJXX-TV in

Jacksonville, Fla. The deal giving the company a second station in the community was announced on the day federal

regulations changed to allow such duopolies.

Gannett remained a leader in its core product – local news. Six Gannett stations were consistently No. 1 in news in

their markets for viewers between the key ages of 25-54: KARE-TV at Minneapolis-St. Paul, KSDK-TV at St. Louis,

WMAZ-TV at Macon, Ga., KUSA-TV at , WBIR-TV at Knoxville and WCSH-TV at Portland, .

Quality local programming at Gannett stations also attracted industrywide recognition in 1999. Jacksonville’s

WTLV-TV, Washington, D.C.’s WUSA-TV and KARE-TV were winners of four prestigious national 1999 Edward R. Murrow

Awards. KARE’s “Whatever,” a weekly magazine show for teenagers, won Association of Broadcasters’

first Education Foundation Service to America Award. The station also won two Iris Awards from the National

BROADCASTING

KARE-TV woos young viewers with an award-winning weekly news program about “Whatever.” Series producer Erin Zdechlik is pictured on the set with some of the show’s teen anchors.

Association of Television Program Executives.

Revenues were up 1 percent in 1999. The absence of the Super Bowl on NBC affiliates, no Winter Olympics on CBS

affiliates and lack of significant political advertising, all of which bolstered revenues in 1998, made for a challenging

1999 and shifted the stations’ business development efforts into high gear. Dot.coms emerged as a new source of

revenue in high Internet penetration areas such as Washington, D.C., , Denver, Minneapolis and Sacramento.

Interactive Web sites served 13 markets. The stations used the Internet to enhance their brands, extend their

products and create new business around their Web activities. In 2000, Broadcasting will be expanding its Web

presence in all the markets and will maximize the opportunities that an election/Olympics year provides.

For more on the Broadcasting Division’s financial performance, see page 28.

14 day discuss storiesthatarein reporter localizesanationalstory WGRZ information. Stratton USATODAY.com & andBryant the studentsareguidedto into thecurriculum.Then teachers incorporatethestories WGRZ morningtheanchorson Every “ newspaper toclassrooms. plan isdelivereddailywiththe schools in1983.Thelesson program thepaperbeganin educational lessonplan,a named afterUSATODAY New York. Thepilotprojectis and privateschoolsinWestern high schoolstudentsinpublic and theInternettomiddle the powerofTV, thenewspaper about newsevents. area childrenandtheirparents in aprojectdesignedtoeducate &Stratton career collegeBryant USATODAY.com andlocal joining withUSATODAY, to schoolthisSeptember, Buffalo, N.Y. ON EDUCATION INITIATIVE WITH USA TODAY BUFFALOUP TVTEAMS Experience Today Every Wednesday,Every during How addingTVto “ ’ s USATODAY. Inschool, Experience Today ’ ’ s s 6p.m.newscast,a ’ s Web siteforadditional “ Daybreak ’ s WGRZ-TV went ” ” works: show ” brings ’ s Today too. watch andreadusasadults, habit forkidssothatthey USA TODAY willbecomea that watchingusandreading customer loyalty. We are expected. project addedanother80.More rooms intheregion.WGRZ USA TODAY versa. with theirparents but theylearntocommunicate going onintheworld,hesays, Not onlydokidsdiscoverwhat general manageratWGRZ. Green,presidentand Darryll something totalkabout, in schooltoday?, parents ask, life. Whentheygethomeand tion isandhowitappliesinreal They learnwhatcriticalinforma- morning onTV, theninschool. also discussesthestory. program, station Gannett TVstationswerethere news eventsin1999,and Big localstoriesbecamenational ON MAJORNATIONAL STORIES STATIONSTV TAKELEAD THE from Says Green: Before thecollaboration, “ ” Kids hearaboutnewsinthe

“ ” Experience Today. ’ wasinabout100class- s weeklypublicaffairs “ Common Ground, ‘ ’ What didyoulearn s “ “ Experience ’ We theyhave – andvice ’ ’ re building re hoping ” ” The says ’ ll ’ s ” ’ s • • • • networks andtheworld. other Gannettstations,the to coverthemfortheirmarkets, children andthenhimself. workers, hiswifeand spree, killingnineoffice losses, wentonashooting upset overstockmarket coverage whenadaytrader, eight hoursofcontinuous the firstvideoandnearly In June,WXIAprovided helicopter. firefighter danglingfroma rescued byaheroicAtlanta hours untiltheworker was station fire. Viewerswatchedthe tion craneabovearaging was trappedatopaconstruc- to reportthataworkman WXIA-TV wasthefirst Also inApril,Atlanta market incoverage. KUSA-TV, whichledthe captured inAprilbyDenver school shootingswas The horroroftheColumbine News DirectorTom Lindner. news wasinsatiable, “ to otherGannettstations. and feeding storiestoNBC Ventura Minnesota Gov. Jesse broadcast coverageof Paul wasintheforefrontof KARE-TV atMinneapolis-St. The appetiteforVentura ’ s livecoveragefortwo ’ s firstyearinoffice, ” ’ says s ’ s Columbine HighSchoolshootings. continuous coverageofthe providedhoursoflive, KUSA Denver major newsstories. led theirmarketsinbroadcasting Above right: viewers what Maryalice DemlertellBuffalo anchors PeteGallivanand morning WGRZ Above left: Every weekday Gannett TV stations Gannett TV ’ s inUSA TODAY. ’ s “ Daybreak ” ’ s 15 1999 BROADCASTING BOARD OF DIRECTORS

CURLEY HO M C CORKINDALE

ARNELLE LEWIS PALMISANO

BROKAW LOUIS WILLIAMS

16 directorships: D.C.; Women International, Washington, of children Inc., NewYork City, andauthor Founder, Penny WhistleToys, BROKAW MEREDITH A. Other directorships: Carlyle, Sandridge&Rice. N.C., lawfirmofWomble, Of counseltoWinston-Salem, JESSEARNELLE H. Formerly: officer, GannettCo.,Inc. Chairman andchiefexecutive CURLEY JOHN J. Group, Inc.Age66.(d,e) Union Pacific Resources Waste Management,Inc.; Armstrong World Industries; Eastman ChemicalCo.; Inc.; Textron Corporation; 1997). Age61.(b,d,f,g) Gannett Co.,Inc.(1989- and chiefexecutive officer, Care. Age59.(b,d,e) Chairman, president ’ s books. Conservation ’ s First Health FPL Group, Other March 25,1986;Reynolds,sinceJune26,1979. ontheboardsince 1999. Clarkhadserved from theGannettBoardofDirectorsonMay4, &Strawn,retired lawfirmWinston Thomas A.Reynolds,chairmanemeritusof CEO ofTheEveningNewsAssociation,and Peter B.Clark,formerchairman,presidentand A SPECIAL THANKS (a,b,c) Financial Corporation.Age64. Equities Fund; Pacific Century Inc.; CollegeRetirement directorships: Eximious Ltd. officer, EximiousInc.,and Chairman andchiefexecutive LOUIS JOSEPHINE P. Inc. Age68.(a,d) Union Pacific Resources Group Group, Inc.;MillenniumBank; American ExpressCo.;FPL Corporation. executive officer, UnionPacific Former chairmanandchief DREW LEWIS of Hawaii,Inc. president, CapitalInvestment Chairman oftheboardand HO STUART T.K. (a,b,e) Historical Society. Age 70. Society; trustee,Chicago trustee, ChicagoHorticultural ships: HDO Productions,Inc.; Aloha Airgroup, Other directorships: Other director- Other (1985-1997). officer, GannettCo.,Inc. financial andadministrative Vice chairmanandchief Gannett Co.,Inc. Vice chairmanandpresident, MCCORKINDALE DOUGLAS H. Other directorships: Moring. law firmofCrowell& Partner ofWashington, D.C., KAREN HASTIE WILLIAMS Age 48.(a,c) Enterprise SystemsGroup. group executive, IBM Senior vicepresidentand PALMISANO SAMUEL J. funds. Age60.(b,f,g) Prudential groupofmutual funds whicharepartofthe Inc.; GlobalCrossingLtd.;and Light Company. Age55.(a,c) Fannie Mae;Washington Gas Continental Airlines,Inc.; Corporation; Financial Services ships: Continental Airlines, Other director- Formerly: Crestar Committee. (g) MemberofContributions Management Committee. (f) MemberofGannett Practices Committee. Responsibility andPersonnel (e) MemberofPublic Continuity Committee. (d) MemberofManagement Compensation Committee. (c) MemberofExecutive Committee. (b) MemberofExecutive (a) Memberof Audit Committee. 17 BOARD OF DIRECTORS BENTLEY CLAPP• COLEMAN J. CURLEY•

CHAPPLE• CLARK-JOHNSON COLLINS T. CURLEY•

COMPANY AND Gannett’s principal management CHRISTOPHER W. BALDWIN, SUSAN CLARK-JOHNSON, DIVISIONAL group is the Gannett Management Vice president, taxes. Age 56. Senior group president, OFFICERS Committee, which coordinates Gannett Pacific Newspaper overall management policies for the SARA M. BENTLEY, Group, and president and company. The Gannett Newspaper President, Gannett Northwest publisher, Reno (Nev.) Operating Committee oversees opera- Newspaper Group, and presi- Gazette-Journal. Age 53. tions of the company’s newspaper dent and publisher, Statesman division. The Gannett Broadcasting Journal, Salem, Ore. Age 48. MICHAEL J. COLEMAN, Operating Committee coordinates Senior group president, management policies for the JAMES T. BROWN, Gannett South Newspaper company’s television stations. The Executive chairman, Newsquest. Group, and president and members of these three groups Age 64. publisher, FLORIDA TODAY are identified at right and on the at Brevard County. Age 56. previous pages. THOMAS L. CHAPPLE, The managers of the company’s Senior vice president, general ROBERT T. COLLINS, various local operating units enjoy counsel and secretary. Formerly: President, New Jersey substantial autonomy in local policy, Vice president, general counsel Newspaper Group, and operational details, news content and and secretary (1991-1995). president and publisher, political endorsements. Age 52.• , Home Gannett‘s headquarters staff News Tribune, East Brunswick, includes specialists who provide RICHARD L. CLAPP, N.J., and Ocean County advice and assistance to the Senior vice president/human Newspapers. Formerly: company’s operating units in various resources. Formerly: Vice President and publisher, phases of the company’s operations. president, compensation and Asbury Park Press and Home At right are brief descriptions of benefits (1983-1995). News Tribune (1997-1998); the business experience during the Age 59.• president and publisher, last five years of the officers of the Courier-Post, Cherry Hill, N.J. company and the heads of its national (1993-1997). Age 56. and regional divisions. Officers serve for a term of one year and may be re-elected. Information about the two officers who serve as directors (John J. Curley and Douglas H. McCorkindale) can be found on pages 16-17.

18 DIERCKS CURRIE (1994-1996). Age45. KVUE-TV, Austin, Texas president andgeneralmanager, St. Louis(1996-1998); and generalmanager, KSDK-TV, Television. Senior vicepresident,Gannett DIERCKS, ARDYTH R. Formerly: Newspaper Division. Senior vicepresident,news, CURRIE, PHILIP R. Formerly: and publisher, USATODAY. administration, andpresident Senior vicepresident, THOMAS CURLEY, (1982-1995). Age58. news, NewspaperDivision Age 51. is thebrotherofJohnJ.Curley. (1991-1998). ThomasCurley publisher, USATODAY • Vice president, President and Formerly: President FELLER DUBOW • analysis. Age57. Vice president,financial GASHO, LAWRENCE P. relations. Age52. affairs andgovernment Senior vicepresident,public FELLER, MILLICENT A. (1984-1995). Age53. affairs, GannettBroadcasting president, financeandbusiness Broadcasting (1995-1997);vice Senior vicepresident,Gannett development. Vice president,planningand EHRMANJR., DANIEL S. Age 45. WXIA-TV, Atlanta (1992-1996). President andgeneralmanager, Gannett Television. Executive vicepresident, DUBOW, CRAIG A. Formerly: • IVEY JASKE Formerly: • Formerly: Vice presidentandcontroller. GAVAGAN, GEORGE R. continued onnext page Broadcasting. Senior vicepresident,Gannett MALLARY, RICHARD A. counsel. Age55. relations andassistantgeneral Senior vicepresident,labor JASKE, JOHN B. Age 49. Pensacola (Fla.)NewsJournal. president andpublisher, Newspaper Group,and President, GannettGulfCoast IVEY, DENISE H. (1993-1997). Age53. corporate accountingservices Age 57. Broadcasting (1989-1995). president, news,Gannett Vice president, M MALLARY C CORKINDALE Formerly: • Vice • Broadcasting OperatingCommittee. Operating CommitteeandGannett GannettNewspaper Committee, bers oftheGannettManagement Pictured onthesepagesaremem- • Committee. Broadcasting Operating Member oftheGannett Committee. Newspaper Operating Member oftheGannett Management Committee. Member oftheGannett 19 COMPANY & DIVISIONAL OFFICERS MILLER• OGDEN ROSENBURGH STIER WALKER•

MOON RIDDLE SHERLOCK VEGA WATSON•

COMPANY AND GRACIA C. MARTORE, ROGER OGDEN, WENDELL J. VAN LARE, DIVISIONAL Treasurer and vice president, Vice president, Gannett Vice president, senior labor OFFICERS investor relations. Formerly: Television, and president and counsel. Age 54. Vice president, treasury general manager, KUSA-TV, services and investor relations Denver, Colo. Age 54. FRANK J. VEGA, (1996-1998); vice president, President and CEO, Detroit treasury services (1993-1996). W. CURTIS RIDDLE, Newspapers. Age 51. Age 47. Senior group president, Gannett East Newspaper CECIL L. WALKER, MYRON MASLOWSKY, Group, and president and President, Gannett Vice president, internal audit. publisher, , Broadcasting Division. Formerly: Director, internal Wilmington, Del. Age 48. Age 63.• audit (1989-1995). Age 45. CARLETON F. ROSENBURGH, BARBARA W. WALL, LARRY F. MILLER, Senior vice president, Gannett Vice president, senior legal Executive vice president and Newspaper Division. Age 60. counsel. Age 45. chief financial officer. Formerly: Senior vice president, financial GARY F. SHERLOCK, GARY L. WATSON, planning and controller President, Gannett Atlantic President, Gannett Newspaper (1991-1997). Age 61.• Newspaper Group, and Division. Age 54.• president and publisher, The CRAIG A. MOON, Journal News, Westchester President, Piedmont County, N.Y. Age 54. Newspaper Group, and president and publisher, MARY P. STIER, , Nashville. President, Gannett Midwest Formerly: Vice president, Newspaper Group, and presi- Gannett South Newspaper dent and publisher, Rockford Group, and president and (Ill.) Register Star. Age 42. publisher, The Tennessean (1991-1999). Age 50.

20 54 37 36 34 23 23 22 76 68 66 55 52 51 39 38 CONSOLIDATED STATEMENTS OFINCOME CONSOLIDATED BALANCESHEETS POSITION RESULTS OFOPERATIONS OF AND FINANCIAL MANAGEMENT FINANCIAL STATEMENTS MANAGEMENT’S RESPONSIBILITYFOR COMMON STOCK PRICES GLOSSARY OFFINANCIAL TERMS SCHEDULES TO FORM10-KINFORMATION QUARTERLY STATEMENTS OFINCOME FORM 10-KINFORMATION NOTES TO 11-YEARSUMMARY 11-YEAR SUMMARY REPORT OFINDEPENDENT ACCOUNTANTS STATEMENTS NOTES TO CONSOLIDATED FINANCIAL IN SHAREHOLDERS CONSOLIDATED STATEMENTS OFCHANGES CONSOLIDATED STATEMENTS OFCASHFLOWS ’ S DISCUSSION ANDANALYSISS ’ EQUITY 21 1999 FINANCIALS GANNETT COMMON STOCK PRICES 89 $17.32 $19.13 $18.32 $24.25 High-low range by quarters based on NYSE-composite closing $21.82 $24.94 prices. $19.75 $22.63

90 $19.75 $22.19 $17.75 $21.13 $14.94 $18.75 $15.32 $18.88

91 $17.88 $21.32 $19.88 $22.19 $19.69 $23.32 $17.94 $21.13

92 $21.13 $23.94 $20.75 $24.57 $21.94 $24.13 $23.00 $26.82

93 $25.32 $27.69 $23.75 $27.38 $23.88 $25.69 $23.75 $29.07

94 $26.69 $29.19 $25.32 $27.44 $24.19 $25.82 $23.38 $26.69

95 $25.07 $27.50 $26.00 $27.88 $26.50 $27.75 $26.44 $32.19

96 $29.63 $35.38 $32.25 $35.82 $32.00 $35.07 $34.75 $39.25

97 $35.81 $44.75 $40.50 $50.66 $48.00 $53.00 $51.13 $61.81

98 $57.25 $69.94 $65.13 $74.69 $55.81 $73.56 $48.94 $68.06

99 $61.81 $70.25 $61.81 $75.44 $66.81 $76.94 $68.81 $79.31

00 $61.75 $83.25•

• Through Feb. 25, 2000

22 necessarily includeamountsdeterminedusingmanagement principles intheUnitedStates.Thesefinancialstatements were preparedinaccordancewithgenerallyacceptedaccounting information includedinthisreport.Thesefinancialstatements for theconsolidatedfinancialstatementsandrelated The managementofthecompanyhaspreparedandisresponsible FOR FINANCIALSTATEMENTS MANAGEMENT relationship. control systemsappropriatelyrecognizethiscost/benefit Management believesthatthecompany the premisethatcostofcontrolnotexceed thebenefitderived. the company. Underlyingtheconceptofreasonableassuranceis that thebooksandrecordsreflectauthorizedtransactionsof provide reasonableassurancethatassetsaresafeguardedand judgments andestimates. Douglas H. McCorkindale Larry F. Executive VicePresident Larry Miller Vice ChairmanandPresident Douglas H. McCorkindale the qualityoffinancialreporting. examinations, theadequacyofinternalaccountingcontrolsand access totheAudit Committee toreviewtheresultsoftheir internal auditorsandtheindependentaccountantshavedirect the internalauditorsandindependentaccountants.The reporting matterswithrepresentativesoffinancialmanagement, management directors,andmeetstodiscussauditfinancial the circumstances.TheAudit Committeeconsistsoffivenon- and accountingpracticestoascertainthattheyareappropriatein for reviewingandmonitoringthecompany appears onpage51. financial statements.ThePricewaterhouseCoopersLLPreport toreachandexpress anopiniononthe as theydeemnecessary accounting controlsandperformsuchtestsotherprocedures reporting. Theyregularlyevaluatethecompany which managementmeetsitsresponsibilityforfairnessinfinancial Coopers LLP, provideanindependentassessmentofthedegreeto The company The company The Audit Committee oftheBoardDirectorsisresponsible ’ ’ s accountingandothercontrolsystems s independentaccountants,Pricewaterhouse- ’ S RESPONSIBILITY and ChiefFinancial Officer ’ s accountingandother ’ s financialreports ’ s systemofinternal ’ s best $1.8 billion. newspaper publishingoperations, totaledapproximately the Sacramentotelevisionstation andcertainsmallernon-daily for businessesandassetsacquiredin1999includingNewsquest, newspapers inexchange forapartnership interest. County Suntoapartnershipthatincludes21dailyCalifornia this transaction. gain of$55million($33aftertax)principallyasaresult of In itssecondquarter, thecompanyreportedanetnon-operating the Sacramentostationaccountedforunderpurchasemethod. gainwasrecognizedandtheacquisitionof which anon-operating ous butseparateevents;thatis,asaleofitsAustin TVstationfor purposes, thecompanyrecordedexchange astwosimultane- Sacramento, Calif., plus cashconsideration.For financialreporting in Austin, Texas, and receivedKXTV-TV, affiliatein theABC transaction underwhichitexchanged affiliateKVUE-TV itsABC financial statementsfromJuly26,1999forward. Newsquest was recordedunderthepurchasemethodofaccountingand effectively owned100%ofNewsquestshares.Theacquisition offer unconditionalinallrespectsandshortlythereafter, Gannett operating cashflow. OnJuly26,1999,Gannettdeclaredthe were financedprincipallybycommercialpaperborrowingsand Share purchasescommencedinthethirdquarterof1999and Gannett alsofinancedtherepaymentofNewsquest approximately 922millionpoundssterling(U.S. $1.5billion). for eachof200.4millionfullydilutedshares,atotalprice and weeklynewspapers,freenewspapers. England withaportfolioof180titlesthatincludepaid-fordaily are publishingandprintingregionallocalnewspapersin 1999, andencompasseda52-weekperiod.Thecompany calendar year. Thecompany this report. Form 10-Kinformationthatappearinthefollowingsectionsof ofoperationsandthe financial statements,the11-yearsummary shouldbereadinconjunctionwiththecompany commentary and 1997fiscalyearsalsoencompassed52-weekperiods. of Newsquestplc( On June24,1999,Gannettmadeacashoffertoacquirethestock 1999 exchangesanddispositions Business acquisitions, the company Following isadiscussionofthekey factorsthathaveaffected Basis ofreporting OPERATIONS AND FINANCIALPOSITION AND ANALYSIS OFRESULTS OF MANAGEMENT The aggregatepurchaseprice,includingliabilitiesassumed, In March1999,thecompanycontributedTheSanBernardino On June1,1999,thecompanycompletedabroadcaststation The offerwasfor460pence(U.S.$7.26)incashorloannotes The company ’ s resultsofoperationsareincludedinthecompany ’ s businessoverthelastthreefiscalyears.This ’ s fiscalyearendsonthelastSundayof “ Newsquest ’ S DISCUSSION ’ s 1999fiscalyearendedonDec.26, ” ). Newsquest ’ s principalactivities ’ s existing debt. ’ s 1998 ’ ’ s s 23 1999 FINANCIALS Subsequent event – January 31, 2000 1997 On January 31, 2000, the previously announced sale of the In January 1997, the company exchanged WLWT-TV (NBC) in assets of the company’s subsidiary, Multimedia Cablevision, Inc., Cincinnati and KOCO-TV (ABC) in City for WZZM-TV to Cox Communications, Inc. of Atlanta, Ga., was completed. (ABC) in Grand Rapids and WGRZ-TV (NBC) in Buffalo. This The sale price for the cable business was approximately $2.7 exchange was necessary to comply with Federal Communications billion in cash, which resulted in an after-tax gain of approximately Commission (FCC) cross-ownership rules. $740 million or $2.64 per diluted share. The gain will be reported In May 1997, the company acquired KNAZ-TV (NBC) in in Gannett’s first quarter of 2000. The proceeds from the sale were Flagstaff, Ariz., KMOH-TV (WB, now NBC) in Kingman, Ariz., and used to pay down commercial paper obligations. Printed Media Companies in Minneapolis, Minn. In July 1997, Although the cable sale was finalized in the year 2000, for Mary Morgan, Inc., a printing business in Green Bay, Wis., was financial reporting purposes, the cable operating results for 1999 purchased, and in August 1997, the company acquired Army and all prior years for which it was owned by the company have Times Publishing Company in Springfield, Va., which produces been reclassified in the statements of income and related discus- military newspapers and a monthly defense publication. sions as discontinued operations. Likewise for the year 2000, cable In October 1997, the company acquired New Jersey Press, operating results for the period up to the sale date, along with the Inc., which publishes two dailies, the Asbury Park Press and the gain on the sale, will be reported as discontinued operations. The of East Brunswick. cable business (along with the alarm security business sold in The aggregate purchase price for businesses acquired in 1997 1998) was previously reported as a separate segment by the was approximately $445 million in cash and liabilities assumed. company. These acquisitions were accounted for under the purchase method of accounting. 1998 In January 1997, the company contributed the In the first quarter of 1998, the company sold its five remaining newspaper to the Gannett Foundation. In April 1997, the compa- radio stations, its alarm security business and its newspaper in St. ny sold its newspaper in Moultrie, Ga., and in November 1997, Thomas, Virgin Islands. The company also contributed its news- the company sold its newspapers in Tarentum and North Hills, Pa. paper in Saratoga Springs, N.Y., to the Gannett Foundation. The company recorded a net non-operating gain of $307 million ($184 million after tax), principally as a result of these transactions. The company purchased television stations WCSH-TV (NBC) in Portland, Maine, and WLBZ-TV (NBC) in Bangor, Maine, early in the first quarter and WLTX-TV (CBS) in Columbia, S.C., in April 1998. In the third quarter of 1998, the company sold five small- market daily newspapers in , Illinois and and completed the acquisition of several newspapers in New Jersey, including The in Morristown and the Ocean County Observer in Toms River. Also in the third quarter of 1998, the company completed a transaction with TCI Communications, Inc., under which it exchanged its subscribers and certain cable system assets in the suburban Chicago area (93,000 subscribers) for subscribers and certain cable system assets of TCI in Kansas (128,000 subscribers). The aggregate purchase price for businesses and assets acquired in 1998 was approximately $370 million in cash. These acquisitions were accounted for under the purchase method of accounting.

24 reported operations, as from continuing Earnings pershare of properties on sale/exchange excluding gains operations, from continuing Earnings pershare as reported operations, continuing Income from of properties on sale/exchange After-tax gains properties sale/exchange of excluding gainson operations, continuing Income from Operating income Operating expenses consolidated summary ofthecompany consolidated summary Operating earningsreachedanotherrecordlevelin1999.A Consolidated summary Note thatthecompany RESULTS OFCONTINUINGOPERATIONS security businesses. million aftertax)principallyfromthesaleofradioandalarm gainof$307million($184 first quarter1998netnon-operating television stationfortheSacramentostation,and million aftertax)principallyfromtheexchange oftheAustin gainof$55million($33 second quarter1999netnon-operating below. separatesfromongoingresultsthe Notethatthissummary discontinued operations. reclassified inthestatementsofincomeandrelateddiscussionsas 2000.Allcableoperatingresultshavebeen was soldinJanuary cussed belowdonotincluderesultsfromthecablebusinesswhich properties sale/exchange of from gainson Earnings pershare Operating revenues In millionsofdollars,except pershareamounts Diluted Diluted Basic Basic Diluted Basic 3.26(4%) $ 3.29(4%) $ .11 .11 $ $ 3.1515% $ 3.1815% $ (5%) 919 $ $33 88613% $ 3,6976% $ 5,2608% $ 15313% $1,563 99Change 1999 ’ s resultsofcontinuingoperationsdis- .84%$23 13% 14% 2.39 $ 2.41 $ 3.3842% $ 3.4142% $ $.64$.65 34% 35% 2.39 $ 2.41 $ 2.7415% $ 2.7615% $ 14% 681 $ 42% 966 $ 35% 184 $ 681 $ 78215% $ 24% $1,262 1% 10% $3,212 $1,386 7% $3,495 9% $4,474 $4,881 9% 1998 Change Change 1997 ’ s resultsispresented cash flow Operating income Operating Expenses Total and other printing Commercial Circulation Revenues In millionsofdollars company printing. Thenewspapersegmentin1999contributed86%ofthe non-daily newspapersinEngland,andGannettOffsetcommercial END, Newsquest,purchasedin1999,whichpublishesdailyand paper publishingoperationsincludeUSATODAY, USAWEEK- In additiontoitsdomesticlocalnewspapers,thecompany Newspapers Advertising Newspaper publishingrevenues,inmillionsofdollars Newspaper operatingrevenues: which, onaverage,were12%lowerthanin1998. dramatically. revenues atUSATODAY rose17%,andearningswereup and earningsgrowthatUSATODAY andUSAWEEKEND.Ad also gainsatmostU.S.localnewspapers,andsignificantrevenue ing theresultsfromnewlyacquiredNewsquestoperationsbut earnings wereachievedbythenewspapersegmentin1999,reflect- of reportedrevenuesforthelastthreeyears. printing businesses.Thetablebelowpresentsthesecomponents newspaper publishingrevenuesaremainlyfromcommercial advertising placedwithnewspaperInternetproducts.Other revenues in1999.Ad revenuesincludethosederivedfrom accounted for73%and23%,respectively, oftotalnewspaper derived principallyfromadvertisingandcirculationsales,which accounts. tions orchangesincertainoperations-relatedbalancesheet items,discontinuedopera- the cashfloweffectsofnon-operating payments forinterestandtaxes arenotreflectedtherein,nor ed intheConsolidatedStatementsofCashFlowsbecausecash fromnetcashflowoperatingactivitiespresent- amounts vary ciation andamortizationofintangibleassets.Suchcashflow ness segmentinformationrepresentoperatingincomeplusdepre- income follows.Operatingcashflowamountspresentedwithbusi- and broadcastingsegmentsalongwithotherfactorsaffectingnet Newspaper operatingresultswereasfollows: Newspaper earningsalsowereaidedbylowernewsprintprices A discussionofoperatingresultsthecompany ’ s revenuesand83%ofitsoperatingincome.Record 4529% 5% $4,532 216 $ 1% $1,023 12% $3,293 $1,499 16% $1,499 16% $1,292 9% 6% $3,240 $4,532 99Change 1999 99Change 1999 Newspaper operatingrevenuesare 4191%$,7 8% 18913% $3,771 $ 10% 9% $4,159 9483% 206 $ $ 9% 7% $2,634 $1,010 12% $2,943 1241%$11023% 1,170 $ 27% $1,294 11% 1,002 $ 2% $1,109 11% $2,769 $3,7718% $3,050 10% 10% $4,159 98Cag 1997Change Change 1998 98Cag 1997Change Change 1998 ’ s newspaper ’ s news- 25 1999 FINANCIALS In the tables that follow, newspaper advertising linage, Pro forma classified revenue in 1999 rose 6% on a 9% linage circulation volume statistics and related revenue results are gain. Employment ad revenue gains were the strongest, followed presented on a pro forma basis for newspapers owned at the end by automotive and then real estate. The continued strong econo- of 1999. my and the tight labor market were key factors in these revenue For Newsquest, advertising and circulation revenues are fully gains, along with added marketing and sales resources. reflected in the amounts below, as are daily paid circulation vol- umes. Advertising linage for Newsquest is not reflected, however. 90 $1917 91 $1853 Advertising revenues, in millions of dollars (pro forma) 92 $1882 93 $2005 1999 Change 1998 Change 1997 Change 94 $2153 Local $1,007 (1%) $1,012 4% $ 975 5% 95 $2219 96 $2418 National $ 647 15% $ 565 9% $ 516 10% 97 $2634 Classified $1,397 6% $1,314 9% $1,203 11% 98 $2943 Total Run- 99 $3293 of-Press $3,051 6% $2,891 7% $2,694 8% Newspaper advertising revenues in millions, as reported Preprint and other Looking to the year 2000, further ad revenue and volume advertising $ 483 6% $ 456 2% $ 446 6% growth is anticipated in all categories. Generally modest price Total ad increases are planned at most properties, and the company will revenue $3,534 6% $3,347 7% $3,140 8% continue to expand and refine sales and marketing efforts. Changes in national economic factors such as interest rates, Advertising linage, in millions of inches, and preprint distribution (pro forma) employment levels and the rate of general economic growth will 1999 Change 1998 Change 1997 Change impact revenues at all of the company’s newspapers. Local 34.8 0% 34.9 3% 33.8 5% Newspaper circulation revenues rose $12 million or slightly National 3.5 15% 3.0 7% 2.8 13% more than 1% in 1999. Incremental circulation revenues from Classified 45.0 9% 41.5 9% 38.0 8% Newsquest offset declines in domestic circulation revenue. On Total Run- a pro forma basis, circulation revenues declined slightly less of-Press 83.3 5% 79.4 6% 74.6 7% than 1%. Preprint For local newspapers, morning circulation accounts for distribution (millions) 7,515 3% 7,287 7% 6,812 3% approximately 80% of total daily volume, while evening circulation accounts for 20%. On a pro forma basis, local morning circulation declined 1%, evening circulation declined 2% and Sunday Reported newspaper advertising revenues for 1999 were $350 circulation declined 2%. Selected circulation price increases were million greater than in 1998, a 12% increase, while pro forma rev- implemented in 1999 at certain newspapers. During 1999, the enues presented above reflect a 6% increase. The variance in these St. Cloud (Minn.) Times and the Vineland (N.J.) Daily Journal two comparisons relates principally to the Newsquest properties were converted from evening to morning publications. acquired in July 1999. USA TODAY’s average daily circulation for 1999 rose .1% to Pro forma local ad revenues and linage were down slightly (less 2,274,621. USA TODAY reported an average daily paid circulation than 1%) for the full year. Ad spending by the larger retailers in of 2,235,808 in the ABC Publisher’s Statement for the six months our markets declined for the year, reflecting closings and consoli- ended Sept. 26, 1999, a 1% increase over the comparable period a dations, but this was mostly offset by greater revenue from year ago. expanded sales and marketing efforts directed toward small and medium sized advertisers. 90 $730 Pro forma national ad revenues and linage rose 15%, driven 91 $777 92 $807 principally by USA TODAY, which reported a 19% gain in 93 $839 revenues on a 14% linage gain. National ad revenue growth also 94 $849 was strong at USA WEEKEND and at several large daily newspaper 95 $869 properties. 96 $918 97 $948 98 $1010 99 $1023 Newspaper circulation revenues in millions, as reported

26 Total daily Sunday Evening at certainnewspapers. Westchester County, N.Y. morning andSundaypublication,TheJournalNews,basedin Gannett SuburbanNewspaperswereconsolidatedintoone from aneveningtoamorningpublication,andthe10daily lower in1998. continuing thenationaltrend.Average Sundaycirculationwas1% rose 1%.Average eveningcirculationwaslessthan1%lower, revenue aswell.Onaproformabasis,localmorningcirculation USA TODAY andUSAWEEKEND,reportedhighercirculation although mostofthecompany acquired in1997and1998contributedsignificantlytothegains, 1998. Incrementalrevenuefromthenewspaperbusinesses followed byrealestateandautomotive. gain. Employmentadvertisingrevenuegainswerethestrongest, 1997 anda30%gainin1996. revenue growthatUSATODAY in1998followeda12%gain reported a12%gainintotaladrevenuesand9%linagegain.Ad respectively, in1998fueledprincipallybyUSATODAY, which marketing effortsandbythestrongeconomy. gains inlocalrevenueswerespurredbyenhancedsalesand spending bymajorretailerswasslightlylowerin1998.Theoverall category, particularlyfrommediumandsmalleraccounts.Ad 3%, respectively. Mostlocalnewspapersachievedgainsinthis 1998 and1997. forma variancerelatesprincipallytonewspaperacquisitionsin revenues presentedabovereflecta7%increase.Thisreported/pro million greaterthanin1997,a12%increase,whileproforma newspapers issummarizedinthetablebelow: slightly highervolume. increases areplannedatcertainnewspapers,alongwithoverall most ofitsnewspaperpropertiesin2000.Circulationprice Newspapers Local Average netpaidcirculationvolume,inthousands(proforma) Morning Selected circulationpriceincreaseswereimplementedin1998 During 1998,theBattleCreek(Mich.)Enquirerwasconverted Pro formaclassifiedrevenuesin1998rose9%onalinage Pro formanationaladrevenuesandlinagerose9%7%, Pro formalocaladrevenuesandlinagein1998rose4% Reported newspaperadvertisingrevenuesfor1998were$309 Pro formacirculationvolumeforthecompany The companyexpects modestcirculationrevenuegrowthat Newspaper circulationrevenuesrose$62millionor7%in ,8 (1%) 4,788 (1%) 3,828 ,1 (2%) 5,813 99Change 1999 6 (2%) 960 ’ s localnewspapers,alongwith ,4 1)6,022(1%) 4,8061% (1%) 1% 3,8231% 5,942 4,854 1% 3,875 98Cag 97Change 1997 Change 1998 7 983(2%) — 979 ’ s local Sunday circulationwas1%lower. 1997 whileaverageeveningcirculationwas2%lower. Average WEEKEND, contributedtothegain. 1997. Mostlocalnewspapers,alongwithUSATODAY andUSA most newspapersforkey classifiedcategories. followed byrealestateandautomotive.Ad rates werehigherat age gain.Employmentadvertisingrevenuegainswerestrongest, 13%. enues rose16%,andlocalnewspapernationalrevenueswereup revenues anda7%linagegain.USAWEEKEND in 1997,respectively. USATODAY reporteda12%gainintotalad company New JerseyPress,Inc. the 1997acquisitionsofArmyTimes PublishingCompanyand reflect an8%increase.Thisreported/proformavariancerelatesto greater thanin1996,a9%increase,whileproformarevenues comparable periodayearago. the sixmonthsendedSept.27,1998,a2%increaseover Publisher circulation of2,213,255intheABC 2% to2,271,767.USATODAY reportedanaveragedailypaid most ofthecompany 2000 willbetemperedbywebwidthreductionsto50inchesat be slightlyhigherthanin1999.Theincreaseconsumption prices declined12%. rose nearly7%(dueprincipallytoNewsquest),averagenewsprint of acquisitions,was6%lowerthanin1998.Whileconsumption in July1999.Newsprintexpense fortheyear, includingtheeffect cipally byincrementalcostsfromNewsquestpropertiesacquired rose $190million,or6%,in1999.Theincreasewascausedprin- comparable periodin1996. the sixmonthsendedSept.28,1997,a2%increaseover Publisher circulation of2,169,860intheABC to 2,234,474.USATODAY reportedanaveragedailypaid newspapers. with themorningpublication,DemocratandChronicle. and theeveningRochester(N.Y.) Times-Union wasconsolidated convertedfromeveningtomorningpublication City Press-Citizen strike initiatedin1995. Sunday circulationrosefortheyear, reversingtheeffects ofthe USA TODAY Newspaper operatingexpense: On aproformabasis,localmorningcirculationrose1%in Newspaper circulationrevenuesrose$30millionor3%in Pro formaclassifiedrevenuesrose11%in1997onan8%lin- Pro formanationaladrevenuesandlinagerose10%13% Pro formalocaladrevenuesandlinagerose5%.Mostofthe Reported newspaperadrevenuesfor1997were$216million USA TODAY Selected priceincreaseswereimplementedin1997atcertain During 1997,TheBellingham(Wash.) HeraldandtheIowa For 2000,newsprintconsumptionandpricesareexpected to ’ s localnewspapersachievedgainsinthiscategory. ’ ’ s averagedailypaidcirculationfor1998rose s averagedailypaidcirculationin1997rose3% ’ s U.S.newspapers,includingUSATODAY. Newspaper operatingexpenses At TheDetroitNews,dailyand ’ ’ s Statementfor s Statementfor ’ s nationalrev- 27 1999 FINANCIALS Payroll costs for newspaper operations rose 10% in 1999, in Broadcasting part because of the Newsquest acquisition but also because of The company’s broadcasting operations at the end of 1999 staffing increases in marketing and ad sales and modest pay included 21 television stations in markets reaching 17.4 increases. percent of U.S. television homes. For 2000, moderate pay increases are planned and staffing lev- Over the last three years, reported broadcasting revenues, els are expected to be up slightly. expenses, operating income and operating cash flows were as Newspaper operating expenses rose $281 million or 10% in follows: 1998. The increase was caused principally by incremental costs In millions of dollars from newspaper properties acquired in 1997 and 1998. Newsprint 1999 Change 1998 Change 1997 Change expense for the year, including the effect of acquisitions, was 18% higher than in 1997. Both consumption and average prices were Revenues $729 1% $721 3% $704 2% higher by approximately 9%. Expenses $391 4% $377 1% $376 (4%) Payroll costs for newspaper operations rose 9% in 1998, in Operating part because of acquired properties but also because of increases income $338 (2%) $344 5% $328 10% in headcount, particularly in marketing and ad sales, and pay Operating increases. cash flow $400 (1%) $404 5% $385 10% Newspaper operating expenses rose $53 million or 2% in 1997. The company benefited from lower average newsprint costs for the Reported broadcast results are affected by the station exchange year. Newsprint expense for the year, including the effect of acqui- on June 1, 1999 of KVUE-TV in Austin for KXTV-TV in sitions, was 15% lower than in 1996. Consumption was higher by Sacramento. (Refer to page 23 for details of the transaction.) Total 8%, but average prices were down 21%. broadcast reported revenues rose $7 million or 1% for 1999. Payroll costs for newspaper operations rose 7% in 1997, in However, on a pro forma basis, giving effect to the part because of the acquired properties but also because of slight Austin/Sacramento station exchange, total station revenues were increases in headcount, particularly in ad sales, and modest pay slightly less than 1% lower for the full year. Pro forma local rev- increases. enues rose 5% for the year, while national revenues were down Newspaper operating income: The company’s newspapers pro- 7%. The decline in national ad revenue in comparison with 1998 duced record earnings in 1999. Operating profit rose $182 million reflects in part revenue spikes in 1998 on CBS stations for the or 16%. The Newsquest properties acquired in July 1999 con- Winter Olympics and on NBC affiliates for the Super Bowl and tributed to the profit gain. Earnings were strong at Detroit, the the Seinfeld program, and from generally strong political/issue company’s New Jersey Group and at USA WEEKEND. Most of advertising. the company’s local U.S. newspapers reported earnings gains. For Reported operating expenses for broadcast were up 4%, reflect- USA TODAY, 1999 was another record year as operating profit ing the impact of the Austin/Sacramento station exchange. On a rose dramatically. pro forma basis, operating costs were down slightly. Pro forma pay- Newsquest financial results were translated from British pounds roll was up 1%. to U.S. dollars using a weighted average rate of $1.62 for the For 2000, television revenues and earnings are expected to period it was owned in 1999. improve considerably, buoyed by incremental ad revenues from the For 2000, newspaper operating profits are expected to show Olympics and political campaigns. continued growth, reflecting full-year results at Newsquest, gener- In November 1999, the company announced an agreement to ally higher profits at most local domestic newspapers and further acquire WJXX-TV, the ABC affiliate in Jacksonville, Fla. Closing is earnings gains at USA TODAY. expected to occur as soon as regulatory approvals are obtained. Newspapers operating profit rose $107 million or 11% in The company also will continue to own WTLV-TV, the NBC 1998. While newspaper properties acquired in 1997 and 1998 affiliate in Jacksonville. contributed significant earnings, most of the company’s local A summary of pro forma revenues for television stations owned newspapers also reported higher profits. Earnings gains at Detroit at the end of 1999 follows: and at USA TODAY were among the strongest. Pro forma broadcast revenues, in millions of dollars Newspapers earnings were sharply higher in 1997; operating 1999 Change 1998 Change 1997 Change profit rose $216 million or 27%. Nearly all local newspapers reported higher profits and significant gains were achieved in Revenues $732 (1%) $736 6% $692 2% Detroit and other large-city markets, as well as at USA WEEKEND. At USA TODAY, operating results were sharply higher.

28 decreased 9%. Pro formapayrollincreased4%,whileprogramexpenses 1996. Onaproformabasis,operatingexpenses declined2%. $14 millionor4%,mainlybecauseofOlympics-relatedcostsin even with1996. local advertisingrevenuesup5%andnational 1997. Onaproformabasis,broadcastingrevenuesrose2%with most markets throughouttheyearandcostcontrols. the resultofcontinuedstrongdemandfortelevisionadvertisingin high, climbing$15millionto$344million.The5%increasewas with payrollcostsup4%andprogram1%over1997. 1998. Onaproformabasis,operatingexpenses increased2%, overall revenuegrowthaswell. stations.Strongpoliticaladvertisingcontributedtothe its CBS the company Advertising revenuesbenefited fromtheSuperBowlbroadcaston affiliates)andoverallgrowthintheeconomy.were NBC programming(12companystations advertising demandforNBC increased 6%and9%,respectively, over1997,reflectingstrong 6% fortheyear. Proformalocalandnationaladvertisingrevenues 3% in1998.Onaproformabasis,broadcastingrevenuesrose Broadcasting revenuesinmillions,asreported 99 98 97 96 95 94 93 92 91 90 Reported operatingexpenses forbroadcastin1997 declined Reported broadcastingrevenuesrose$17millionor2%in Operating incomein1998frombroadcastingreachedarecord Reported operatingexpenses forbroadcastwereup1% Total reportedbroadcastingrevenuesrose$18millionor ’ s NBC stations and the Winter Olympicsairingon stationsandtheWinter s NBC $357 $371 $397 $397 $407 $466 $687 $704 $721 $729 assets of intangible Amortization Depreciation expenses and admin. general Selling, increases wereattributabletonewlyacquiredproperties. amortization ofintangiblesincreased$6millionor8%.Both the effectofpropertiesacquiredinthatyear. of propertiesacquiredin1997. Newsprint savingswereoffsetprincipallybytheincrementalcosts declined 15%fortheyearbecauseoflowernewsprintprices. consumption bybusinessesacquiredin1997),newsprintexpense newsprint consumptionfor1997increased8%(including acquisitions. million or11%becauseofcostsassociatedwith1997and1998 newly acquiredproperties.Amortizationofintangiblesrose$9 due toincreaseddepreciationexpense fromcapital additionsand and 1998. newspaper advertisingexpenses fromproperties acquired in1997 and 1998alsocontributedtothisincrease. newsprint prices.Othercostsfrombusinessesacquiredin1997 in consumption(includingacquisitions)and9%higheraverage Newsprint expense rose18%fortheyearbecause ofa9%increase Newsquest. million or23%dueto1998and1999acquisitions,principally of theNewsquestacquisition.Amortizationintangiblesrose$21 generally highernewspaperadvertisingexpenses. for theyeardueprimarilytoNewsquestacquisitionand newsprint pricesdropped12%ascomparedto1998. a 7%increaseinconsumption(includingacquisitions).Average particularly Newsquest.Newsprintexpense decreased6%despite increased costsfrombusinessesacquiredin1998and1999, Cost ofsales Consolidated operatingexpenses, inmillionsofdollars expenses wereasfollows: Over thelastthreeyears,company Consolidated operatingexpenses Depreciation expense rose$5millionor3%in1997,while SG&A rose$42millionor6%for1997,primarilybecauseof Cost ofsalesfor1997wasunchangedfrom1996.Although Depreciation expense in1998wasup7%from the prioryear SG&A rose5%for1998,mainlybecauseofincremental Cost ofsalesfor1998increased$227millionor10%. Cost ofsalesfor1999wereup$110millionor4%,reflecting Depreciation expense increased3%duringtheyear asaresult Selling, generalandadministrativecosts(SG&A)wereup9% 1 23% 111 $ 3% 9% 169 $ 809 $ 4% $2,608 99Change 1999 6 %$13 3% 6% 153 $ 706 $90 $ 7% 11% 5% $81 164 8%$ 743 $ $2,272 10% $2,499 1998 Change 1997 Change 1997 Change 1998 ’ s consolidatedoperating ––

29 1999 FINANCIALS Payroll and newsprint costs (along with certain other Income from continuing operations production material costs), the largest elements of the company’s In 1999, the company reported income from continuing opera- operating expenses, are presented below, expressed as a tions of $919 million or $3.26 per diluted share. However, this percentage of total pre-tax operating expenses. reflects the net non-operating gain principally from the exchange transaction discussed on page 23. This net gain 1999 1998 1997 totaled $55 million pre-tax ($33 million after tax or $.11 per Payroll and employee benefits 45.7% 44.7% 44.1% diluted share). Newsprint and other For 1998, the company reported income from continuing oper- production material 19.5% 21.4% 20.1% ations of $966 million or $3.38 per diluted share. This amount reflects the net non-operating gain principally from the sale of Non-operating income and expense radio and alarm security businesses in the first quarter of the year. Interest expense for 1999 increased $15 million or 19%, reflecting This net gain totaled $307 million pre-tax ($184 million after tax significantly increased commercial paper borrowings in the second or $.64 per diluted share). half of 1999 as a result of the Newsquest acquisition. Interest For purposes of evaluating the company’s earnings progress expense in 2000 is expected to decline significantly due to repay- from ongoing operations, the earnings summary below excludes ment of commercial paper borrowings from proceeds from the sale the effect of these non-operating gains in 1999 and 1998. of the company’s cable division on Jan. 31, 2000. The company’s financing activities are discussed further in the financial position In millions of dollars, except per share amounts section of this report. Earnings summary excluding 1999 and 1998 net non-operating gains Other non-operating income for 1999 includes the second 1999 Change 1998 Change 1997 Change quarter net non-operating gain of $55 million principally from the Operating income $1,563 13% $1,386 10% $1,262 24% exchange of the television stations discussed above. Non-operating Interest expense for 1998 decreased $19 million or 19%, expense reflecting the paydown of fixed-rate debt and commercial paper Interest expense (95) 19% (80) (19%) (98) (28%) borrowings from operating cash flow and the proceeds from the Other 4 — (1) (87%) (9) 241% sale of certain businesses. Total (91) 12% (81) (25%) (107) (22%) Other non-operating income for 1998 includes the first quarter net non-operating gain of $307 million principally from the sale of Income before income taxes 1,472 13% 1,305 13% 1,155 31% radio and alarm security businesses. Provision for Interest expense for 1997 decreased $37 million or 28%, income taxes 586 12% 523 10% 474 25% reflecting the paydown of commercial paper borrowings from oper- Income from ating cash flow and the proceeds from the sale of the outdoor and continuing operations $ 886 13% $ 782 15% $ 681 35% entertainment businesses in 1996. Earnings per share from Provision for income taxes continuing The company’s effective income tax rate for continuing operations operations – diluted $ 3.15 15% $ 2.74 15% $ 2.39 34% was 39.8% in 1999, 40.0% in 1998 and 41.0% in 1997. The decrease in the effective tax rate in 1999 and 1998 reflects lower Excluding non-recurring items, the company’s reported state taxes and the diminished impact of the amortization of non- earnings from continuing operations in 1999 were $886 million, deductible intangible assets. a 13% increase with diluted earnings per share at $3.15, up 15%; operating income reached $1.563 billion, an increase of $177 million or 13%. The strong, record showing in operating income and after-tax results for 1999 came from newspapers. Broadcast earnings were down 2%. Interest expense was 19% higher.

30 effective taxrate. comparison atTheDetroitNews,lowerinterestcostsanda record operatingresultsatUSATODAY, afavorableyear-to-year business segmentsreportedhigherearningsfortheyear, with an increaseof$243millionor24%.Boththecompany The company highs, up35%and34%,respectively, fromrecordresultsin1996. operations of$681millionor$2.39perdilutedshare,bothrecord interest costsandalowereffectivetaxratealsocontributed. USA TODAY andstrongimprovementatTheDetroitNews.Lower ments reportedhigherearningsfortheyear, withrecordresultsat $124 millionor10%.Boththenewspaperandbroadcastingseg- 15%. Operatingincomereached$1.386billion,anincreaseof operations was$782millionor$2.74perdilutedshare,bothup ments ofapproximately $740millionor$2.64per dilutedshare. company willrecognizeanafter-tax gaininits2000financialstate- completed. Saleproceedswereapproximately $2.7 billionandthe Communications, Inc.,andonJan.31,2000,thesaleofcablewas announced ithadagreedtosellitscablebusinessCox reported withinthecablesegment.InJuly1999,company the companysolditsalarmsecuritybusiness,whichhadbeen acquired cabletelevisionandalarmsecurityoperations.In1998, As partoftheMultimediapurchasein1995,company Discontinued operations * Beforeeffectofaccountingprinciplechanges 9 $886 Income fromcontinuingoperationsinmillions 99 98 97 96 95 94 93 92 91 90 Before netnon-recurringgainsfromsale/exchange ofbusinesses For 1997,thecompanyreportedearningsfromcontinuing Excluding non-recurringitems,1998incomefromcontinuing ’ s operatingincomereached$1.262billionin1997, $292 $341* $355 $389 $455 $459 $503 $681 $782 ’ s After taxearnings Operating cashflow Operating income Expenses operations usedinthecalculation. but areexcluded fromtheamount ofearningsfromcontinuing sale/exchange ofbusinessesareincluded inshareholders from theprioryearsbecausenon-recurringgains ings fromcontinuingoperations,ispresentedinthetablebelow. totaled 279,048,000for1999and283,097,0001998. 281,608,000, comparedto285,711,000in1998.Basicshares discussed. segment overthelastthreeyearswereasfollows: three states.Reportedoperatingresultsforthecableandsecurity 523,000subscribersin 1999, thecabletelevisionbusinessserved reported asanelementofdiscontinuedoperations.At theendof related discussions.Thegainuponsalein2000willlikewise be owned asdiscontinuedoperationsinitsstatementsofincomeand cable segmentoperatingresultsfor1999andallpriorperiods from thecompany after-taxnet non-operating gainof$33millionor$0.11pershare discontinued operationsof$39millionor$0.14pershare,anda diluted sharein1999whichincludesafter-tax earningsfrom The companyreportednetincomeof$958millionor$3.40per Net Income Revenues In millionsofdollars hne)inpercentages changes) onshareholders’equity(beforenon-recurringgainsandaccountingprinciple Return 920.6 99 98 97 96 95 94 93 92 91 90 The percentagereturnonequityfor1999and1998declined The company Average dilutedsharesoutstandingfor1999totaled In connectionwiththecablesale,companyhasreclassified ’ s returnonshareholders ’ s exchange oftelevisionstationspreviously 918% 39 4% $ 14% $118 66 4% $ 7% $192 $258 99Change 1999 98Cag 1997 Change 1998 3 %$31 $121 54 $ 6% (6%) $33 7% $114 $255 58 (9%)$201 $ (6%) $183 $241 16.2 ’ equity, basedonearn- 17.5 19.8 21.0 21.3 21.9 22.3 ’ equity, 23.0 24.4 31 1999 FINANCIALS FINANCIAL POSITION Working capital, or the excess of current assets over current liabilities, totaled $191 million at the end of 1999 and $178 Liquidity and capital resources million at the end of 1998. Certain key measurements of the The principal changes in the company’s financial position for elements of working capital for the last three years are presented 1999 relate to the Newsquest acquisition, with an aggregate cost in the following chart: of approximately $1.5 billion which was funded principally by Working capital measurements commercial paper borrowings. 1999 1998 1997 Changes in property, plant and equipment in 1999 reflect capi- Current ratio 1.2-to-1 1.2-to-1 1.2-to-1 tal spending of $258 million plus amounts recorded in connection with newly acquired properties, principally Newsquest. The Accounts receivable turnover 7.4 7.9 7.8 increase in intangible assets is primarily due to amounts recorded Newsprint inventory turnover 7.3 7.5 7.3 in connection with the Newsquest acquisition, and the increases in working capital balances are likewise due to Newsquest. The The company’s operations have historically generated strong increase in investments and other assets in 1999 is primarily the positive cash flow, which, along with the company’s program of result of the company’s contribution of The San Bernardino issuing commercial paper and maintaining bank revolving credit County Sun to a partnership that includes a number of daily agreements, has provided adequate liquidity to meet the compa- newspapers in exchange for a partnership interest. ny’s requirements, including those for acquisitions. The company purchased $163 million in treasury shares in the The company regularly issues commercial paper for cash second half of 1999. The company’s foreign currency translation requirements and maintains a revolving credit agreement equal adjustment, related to Newsquest and reported as part of share- to or in excess of any commercial paper outstanding. The holders’ equity, totaled $14.3 million, net of tax, at Dec. 26, 1999. company’s commercial paper has been rated A-1+ and P-1 by This reflects the strengthening of the pound against the U.S. dollar Standard & Poor’s and Moody’s Investors Service, respectively. since the Newsquest acquisition date. Newsquest’s assets and The company’s senior unsecured long-term debt is rated AA- by liabilities were translated from British pounds to U.S. dollars at the Standard & Poor’s and A1 by Moody’s Investors Service. The Dec. 26, 1999 exchange rate of $1.62. company has a shelf registration statement with the Securities The company’s consolidated operating cash flow (defined as and Exchange Commission under which up to $1.5 billion of operating income plus depreciation and amortization of intangible additional debt securities may be issued. The company’s Board assets) totaled $1.843 billion in 1999 compared to $1.639 billion of Directors has established a maximum aggregate level of $3.5 in 1998 and $1.496 billion in 1997. The cash flow increase of billion for amounts which may be raised through borrowings or $204 million or 12% in 1999 reflects significant operating income the issuance of equity securities. growth for the company’s newspaper segment. The table below The company repaid its commercial paper obligations from the presents operating cash flow as a percent of revenue over the last pre-tax proceeds from the sale of the company’s cable division on 10 years. Jan. 31, 2000. Commercial paper borrowings are expected to be made later in 2000 for income tax requirements on the cable sale 90 25.8 and also may be necessary for acquisitions or additional share 91 23.1 repurchases. 92 24.4 93 26.1 Note 4 to the company’s financial statements on page 42 of 94 27.5 this report provides further information concerning commercial 95 27.0 paper transactions and the company’s $3.0 billion revolving credit 96 29.7 agreement. 97 33.4 98 33.6 The company has a capital expenditure program (not including 99 35.0 business acquisitions) of approximately $325 million planned for Operating cash flow, as a percent of revenue 2000, including approximately $144 million for land and buildings or renovation of existing facilities, including costs associated with the new USA TODAY and corporate headquarters facility, $162 million for machinery and equipment, and $19 million for vehicles and other assets. Management reviews the capital expenditure program periodically and modifies it as required to meet current business needs. It is expected that the 2000 capital program will be funded from operating cash flow.

32 increase inthedividendrate. $.20 to$.21pershare. ahdvdnsPyetdt Per share Payment date 1998 1999 Cash dividends Dividends declaredpershare in 1999,comparedwith$221million1998,reflecting Dividends declaredoncommonstockamountedto$229million Dividends been reissuedinsettlementofemployeestockawards. Certain ofthesharespreviouslyacquiredbycompanyhave repurchase ofanadditional$500millioncompanystock. cost of$163million.Inearly2000,theBoardauthorized chased approximately 2.4millionsharesofitscommonstockata stock atacostof$329millionandin1999,thecompanypur- repurchased atotalofapproximately 6millionsharesofcommon to $750millionofitscompanystock.During1998,the In 1998,thecompanyannouncedauthorizationstorepurchaseup Capital stock Dec. 27,1998. totaled 277,926,431shares,comparedwith279,001,295sharesat the company. $50 million.Thestockpurchasewasfinancedwithaloanfrom acquired 2,500,000sharesofGannettstockfromthecompanyfor Employee StockOwnershipPlan(ESOP)wasformedwhich Gannett stock.To fundthecompany which includesacompanymatchingcontributionintheformof the parvalueofadditionalsharesissued. was transferredfromretainedearningstocommonstockreflect reflect thisstocksplit.Inconnectionwiththesplit,$162.2million share andper-common-share amountshavebeenadjustedto for-one stockspliteffectiveonOct.6,1997.Inthisreport,all 9 $.82 99 98 97 96 95 94 93 92 91 90 In October1999,thequarterlydividendwasincreasedfrom In 1997,thecompany The company An employee401(k)SavingsPlanwasestablishedin1990 ’ s commonstockoutstandingatDec.26,1999, s ure pi ,19 $.19 $.19 $.20 April1,1998 July1,1998 1st Quarter Oct.1,1998 $.20 2nd Quarter Jan.2, 1999 3rd Quarter 4th Quarter s ure pi ,19 $.20 $.20 $.21 1999 April1, 1999 July1, 1st Quarter 1999 1, $.21 Oct. 2nd Quarter 2000 3, 3rd Quarter Jan. 4th Quarter ’ s BoardofDirectorsapprovedatwo- ’ s matchingcontribution,an $.61 $.62 $.63 $.65 $.67 $.69 $.71 $.74 $.78 an dollars. as itsfunctionalcurrencywhichisthentranslatedintoU.S. due toitsacquisitionofNewsquest,whichusestheBritishpound technology andefficiency. the availabilityofreplacementassetswithimproved reduced asaresultofanongoingcapitalexpenditure programand and equipmentrelateddepreciationexpense havebeen inflation andchangingpricesonthecompany rising coststhroughincreasedsellingprices.Further, theeffectsof conditions, thecompanygenerallyhasbeenabletopassalong In allofitsprincipalbusinesses,subjecttonormalcompetitive not beensignificantlyaffectedbyinflationandchangingprices. on thecompany adoption ofthisstandardisnotexpected tohaveamaterialeffect effective forfiscalperiodsbeginningafterJune15,2000.The Instruments andHedgingActivities tions systemswereYear 2000compliant.Thecompany ensure allofthecompany began in1995andresultedthedevelopmentofaplanto The company Year 2000 The company Effects ofinflationandchangingpricesothermatters Certain statementsinthecompany Certain factorsaffectingforward-lookingstatements results foranyoftheyearsinvolved. not materialtothecompany Costs associatedwitheffortstoachieveYear 2000compliancewere successful; nosignificantYear 2000problemswereencountered. “ information.Thewords forward-looking Shareholders anditsAnnualReportonForm 10-Kcontain U.S. dollarexchange rate. electronic publishing;and(i)a weakening intheBritishpoundto changes andfrequentnewproduct introductionsprevalentin networks andlocalnewsprogramming; (h)rapidtechnological tions ofexisting businesses;(g) adeclineinviewershipofmajor increased laborcosts;(f)acquisitions ofnewbusinessesordisposi- pated; (e)labordisputeswhich maycauserevenuedeclinesor newsprint orsyndicationprogrammingcostsoverthelevelsantici- of competitivealternativemediaorotherfactors;(d)anincrease in (c) adeclineingeneralnewspaperreadershippatternsasresult to decreasedcirculationorlocal,nationalclassifiedadvertising; the company national advertising;(b)aneconomicdownturninsomeorall of operations ofmajorcustomersanddepressthelevellocal major retailersorothereventswhichmayadverselyaffectbusiness tation, thefollowingfactors:(a)increasedconsolidationamong the company statements. those anticipatedintheforward-looking could causeactualresultsandeventstodiffermateriallyfrom statements aresubjecttocertainrisksanduncertaintieswhich statements.Theseforward-looking erally identifyforward-looking believe, In June1998,SFAS No.133, The companyisexposed toforeignexchange rateriskprimarily Potential risksanduncertaintieswhichcouldadverselyaffect ”

“ anticipate, ’ ’ ’ ’ s principalnewspaperortelevisionmarkets leading s abilitytoobtaintheseresultsinclude,withoutlimi- s effortstoaddresspotentialYear 2000problems s resultsofoperationsandfinancialconditionhave ’ s resultsofoperationsorfinancialposition. ”

“ likely, ’ s key computerandtelecommunica- ’ s financialpositionortooperating ”

“ will “ Accounting forDerivative ’ ” s 1999AnnualReportto ” was issued.Thisstandardis andsimilarexpressions gen- “ expect, ’ s property, plant ”

“ intend, ’ s planwas ” 33 1999 FINANCIALS CONSOLIDATED BALANCE SHEETS

In thousands of dollars Assets Dec. 26, 1999 Dec. 27, 1998 Current assets Cash $ 46,148 $ 60,103 Marketable securities, at cost, which approximates market 12 6,084 Trade receivables (less allowance for doubtful receivables of $30,694 and $19,143, respectively) 800,682 664,540 Other receivables 80,753 52,619 Inventories 95,014 87,176 Prepaid expenses 52,613 35,863 Total current assets 1,075,222 906,385 Property, plant and equipment Land 182,138 180,786 Buildings and improvements 886,655 839,210 Cable systems (Note 2) 424,907 413,059 Machinery, equipment and fixtures 2,259,362 2,123,468 Construction in progress 130,850 110,220 Total 3,883,912 3,666,743 Less accumulated depreciation (1,660,060) (1,602,960) Net property, plant and equipment 2,223,852 2,063,783 Intangible and other assets Excess of acquisition cost over the value of assets acquired (less accumulated amortization of $867,606 and $749,680, respectively) 5,398,227 3,794,601 Investments and other assets (Note 5) 309,145 214,711 Total intangible and other assets 5,707,372 4,009,312 Total assets $ 9,006,446 $ 6,979,480

34 Total liabilitiesandshareholders Commitments andcontingentliabilities(Note9) Total shareholders Deferred compensationrelatedtoESOP(Note8) respectively, atcost Less Treasury stock,46,494,301sharesand45,419,437shares, Accumulated othercomprehensive income Retained earnings Additional paid-incapital Issued, 324,420,732shares,astobothyears Common stock,parvalue$1:Authorized, 400,000,000shares: Issued, none Preferred stock,parvalue$1:Authorized, 2,000,000shares: Shareholders Total liabilities Other long-termliabilities Postretirement medicalandlifeinsuranceliabilities(Note6) Long-term debt(Note4) Deferred incometaxes (Note7) Total currentliabilities Deferred income Income taxes (Note7) Dividend payable Accrued liabilities Accounts payable Current maturitiesoflong-termdebt(Note4) Current liabilities In thousandsofdollars CONSOLIDATED BALANCESHEETS Liabilities andshareholders Other Interest Other Compensation Trade ’ equity(Notes4and8) ’ equity ’ equity ’ equity e.2,1999 26, Dec. $ 0,000 $ 9,006,446 $ (1,359,263) 6,007,875 2,463,250 4,629,646 5,504,810 4,376,800 479,547 883,778 127,844 145,684 120,581 312,277 153,267 324,421 245,825 304,400 (18,966) 77,553 58,297 36,312 25,377 5,230 Dec. 27,1998 7,812 $ 6,979,480 $ (1,223,077) 1,306,859 3,979,824 5,225,779 4,775,313 2,999,656 442,359 727,967 117,465 114,708 108,301 282,798 126,045 324,421 214,326 308,145 (22,878) 55,790 29,485 6,395 5,213 35 1999 FINANCIALS CONSOLIDATED STATEMENTS OF INCOME

In thousands of dollars Fiscal year ended Dec. 26, 1999 Dec. 27, 1998 Dec. 28, 1997 Net operating revenues Newspaper advertising $3,292,894 $ 2,942,995 $2,634,334 Newspaper circulation 1,022,520 1,010,238 948,141 Broadcasting 728,642 721,298 703,558 All other 216,134 206,160 188,195 Total 5,260,190 4,880,691 4,474,228 Operating expenses Cost of sales and operating expenses, exclusive of depreciation 2,608,469 2,498,876 2,272,080 Selling, general and administrative expenses, exclusive of depreciation 808,529 742,538 706,201 Depreciation 169,460 163,776 152,964 Amortization of intangible assets 110,631 89,687 80,741 Total 3,697,089 3,494,877 3,211,986 Operating income 1,563,101 1,385,814 1,262,242 Non-operating income (expense) Interest expense (94,619) (79,412) (98,242) Interest income 5,739 19,318 6,517 Other (Note 2) 52,966 286,005 (15,564) Total (35,914) 225,911 (107,289) Income before income taxes 1,527,187 1,611,725 1,154,953 Provision for income taxes 607,800 645,300 473,600 Income from continuing operations 919,387 966,425 681,353 Income from the operation of discontinued operations, net of income taxes of $27,700, $24,200 and $22,700, respectively 38,541 33,488 31,326 Net income $ 957,928 $ 999,913 $ 712,679 Earnings per share – basic Earnings from continuing operations $3.29 $3.41 $2.41 Earnings from discontinued operations, net of tax .14 .12 .11 Net income per share – basic $3.43 $3.53 $2.52 Earnings per share – diluted Earnings from continuing operations $3.26 $3.38 $2.39 Earnings from discontinued operations, net of tax .14 .12 .11 Net income per share – diluted $3.40 $3.50 $2.50

36 Decrease inaccountspayable Change inotherassetsandliabilities,net Deferred incometaxes Balance ofcashandequivalentsatbeginningyear Decrease (increase)infilmbroadcastrights Other, net,includinggainsonsales Proceeds from(paymentsof)long-termdebt Cash flowsfromfinancingactivities (Increase) decreaseininventories Increase (decrease)ininterestandtaxes payable Proceeds fromsaleofcertainassets Amortization ofintangibles Collection oflong-termreceivables Purchase ofproperty, plantandequipment Cash flowsfrominvestingactivities Depreciation Increase inreceivables Proceeds fromissuanceofcommonstock Cost ofcommonsharesrepurchased Dividends paid Change inotherinvestments Payments foracquisitions,netofcashacquired Discontinued operations,netoftax operating cashflows Adjustments toreconcilenetincome Balance ofcashandequivalentsatendyear (Decrease) increaseincashandequivalents Effect ofcurrencyexchange ratechange Net cashprovided by(usedfor)financingactivities Net cash(usedfor)provided byinvestingactivities Net cashflowfrom operatingactivities Net income Cash flowsfromoperatingactivities In thousandsofdollars CONSOLIDATED STATEMENTS OFCASHFLOWS Fiscal yearended e.2,1999 26, Dec. 957,928 $ 46,160 $ (1,727,025) (1,496,649) 1,146,886 (163,228) (226,274) (258,443) 110,631 169,460 (34,805) (70,014) (49,269) (38,541) (20,027) (18,561) 560,044 915,865 72,223 11,555 21,983 66,187 33,681 38,450 (7,624) 3,359 8,178 68 e.2,19 Dec.28,1997 Dec. 27,1998 9,1 712,679 $ 999,913 $ 617$ 52,778 $ 66,187 $ 9403 (321,035) (206,557) (144,903) (994,063) (328,956) (218,853) (470,207) (355,343) (221,251) (369,804) (244,425) 3094 (20,166) (360,944) 3,8)(31,326) (33,488) 6,7 152,964 163,776 6,0 40,859 665,001 881,057 970,535 1,7)(40,487) (14,777) 1,4)(8,099) (16,244) 2,3)(41,684) (29,732) 104(6,336) (14,244) 11,054 40,105 697(538,446) 36,937 698115,896 96,928 80,741 89,687 27831,202 21,576 30,425 52,778 13,409 23,953 ,5 (26,336) 7,951 ,0 5,388 2,409 2(644) 62 37 1999 FINANCIALS CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

In thousands of dollars Fiscal years ended Common Accumulated Deferred December 28, 1997, stock Additional other compensation December 27, 1998 $1 par paid-in Retained comprehensive Treasury related and December 26, 1999 value capital earnings income stock to ESOP Total Balance: Dec. 29, 1996 $162,210 $ 86,126 $3,654,681 $ (942,609) $(29,590) $2,930,818 Net income, 1997 712,679 712,679 Dividends declared, 1997: $.74 per share (209,867) (209,867) Stock options exercised 4,152 25,781 29,933 Stock issued under incentive plan 114 120 234 Tax benefit derived from stock incentive plans 13,974 13,974 Compensation expense related to ESOP 1,535 1,535 Tax benefit from ESOP 430 430 Par value of shares issued in 2-for-1 stock split effective Oct. 6, 1997 162,211 (162,211) Balance: Dec. 28, 1997 $324,421 $104,366 $3,995,712 $ (916,708) $(28,055) $3,479,736 Net income, 1998 999,913 999,913 Dividends declared, 1998: $.78 per share (220,718) (220,718) Treasury stock acquired (328,956) (328,956) Stock options exercised 4,870 19,285 24,155 Stock issued under incentive plan (1,255) 3,302 2,047 Tax benefit derived from stock incentive plans 18,064 18,064 Compensation expense related to ESOP 5,177 5,177 Tax benefit from ESOP 406 406 Balance: Dec. 27, 1998 $324,421 $126,045 $4,775,313 $(1,223,077) $(22,878) $3,979,824 Net income, 1999 957,928 957,928 Foreign currency translation adjustment, net of taxes of $9,130 $ 14,280 14,280 Unrealized gain on securities, net of taxes of $7,095 11,097 11,097 Total comprehensive income 983,305 Dividends declared, 1999: $.82 per share (228,781) (228,781) Treasury stock acquired (163,228) (163,228) Stock options exercised 7,916 23,490 31,406 Stock issued under incentive plan (2,154) 3,552 1,398 Tax benefit derived from stock incentive plans 21,460 21,460 Compensation expense related to ESOP 3,912 3,912 Tax benefit from ESOP 350 350 Balance: Dec. 26, 1999 $324,421 $ 153,267 $ 5,504,810 $25,377 $ (1,359,263) $ (18,966) $ 4,629,646

38 periods. company Dec. 26,1999,andencompasseda52-weekperiod.The renewals arechargedtoexpense asincurred. are capitalized.Expendituresformaintenance,repairsandminor interest incurredduringtheconstructionperiodofmajoradditions tems, fourto30years.Majorrenewalsandimprovements 10 to40years;machinery, equipmentandfixturescablesys- principal estimatedusefullivesare:buildingsandimprovements, straight-line basisovertheestimatedusefullivesofassets.The recorded atcost,anddepreciationisprovidedgenerallyona 40 yearsonastraight-linebasis. ($6.14 billionatDec.26,1999)isbeingamortizedgenerallyover from acquisitionsaccountedforaspurchasessinceOct.31,1970, Accountants, theexcess acquisitioncostofsubsidiariesarising Principles BoardoftheAmericanInstituteCertifiedPublic were purchased.InaccordancewithOpinion17oftheAccounting resents thecostofintangibleassetsattimesubsidiaries excess ofacquisitioncostoverthefairvalueassetsacquiredrep- risk involved.Losses onlong-livedassetstobe disposed ofare ed futurecashflows discountedataratecommensurate withthe value. Fair market valueisdetermined primarilyusingtheproject- valueexceeds thefairmarketon theamountbywhichcarrying value.Thecompanymeasuresimpairmentbased than itscarrying counted futurecashflowsfrom therelatedbusinessunitareless assets acquired,isconsideredimpaired whentheprojectedundis- asset, includingtheexcess ofacquisitioncostoverfairvalue valueofalong-lived amount maynotberecoverable.Thecarrying ever eventsorchangesincircumstancesindicatethatthecarrying excess ofacquisitioncostoverfairvalueassetsacquired,when- valueoflong-livedassetstobeheldandused,includingthe rying Fiscal year: Summary ofsignificantaccountingpolicies NOTE 1 FINANCIAL STATEMENTS CONSOLIDATEDNOTES TO line basisinitsstatementofincome. expenses generatedbytheoperationofagenciesonaline-by- company includesitsappropriateportionoftherevenuesand publishing companyunderajointoperatingagreement.The andanothernewspaper distribution functionsforthesubsidiary joint operatingagencyperformstheproduction,salesand subsidiaries wereparticipantsinjointoperatingagencies.Each of thecalendaryear. Thecompany current yearpresentation. prior-year informationhasbeenreclassifiedtoconformwiththe of allsignificantintercompanytransactionsandprofits.Certain the accountsofcompanyanditssubsidiariesafterelimination (first-in, first-out) ormarket. (first-in, first-out) newspaper publishingoperations,arevaluedatthelowerofcost printing ink,platematerialandproductionfilmforthecompany Valuation Assets: ofLong-Lived Excess ofacquisitioncostoverfairvalueassetsacquired: Inventories: Operating agencies: Consolidation: Property anddepreciation: ’ s 1998and1997fiscalyearsalsoencompassed52-week The company Inventories, consistingprincipallyofnewsprint, The consolidatedfinancialstatementsinclude Four ofthecompany ’ s fiscalyearendsonthelastSunday Property, plantandequipmentis The companyevaluatesthecar- ’ s 1999fiscalyearendedon ’ s newspaper The ’ s stock optionsandfromincentiverights. per sharealsoconsiderstheassumeddilutionfromexercise of outstanding duringtheyear. Thecalculationofdilutedearnings are basedontheweightedaveragenumberofcommonshares two bases,basicanddiluted.Allincomepershareamounts period oftelecastfortheprograms,butmaybeshorter. the contracts.Thepaymentperiodgenerallycoincideswith as currentornoncurrentinaccordancewiththepaymenttermsof associated withthem.Theliabilityforthesecontractsisclassified appropriately matchesthecostofprogramswithrevenues programs insucceedingyears.Theamountchargedtoexpense Consolidated BalanceSheets,basedupontheexpected useofthe a prepaidexpense) ornoncurrent(asanotherasset)inthe available fortelecasting.Programassetsareclassifiedascurrent(as gross amountoftherelatedliabilitywhenprogramsare program broadcastcontracts.Thesecontractsarerecordedatthe expected toreceivesuchbenefits. benefits onanaccrualbasisovertheworkinglivesofemployees recognizes thecostofpostretirementmedicalandlifeinsurance financial position. to haveamaterialeffectonthe company after June15,2000.Theadoption ofthisstandardisnotexpected was issued.Thisstandardiseffective forfiscalperiodsbeginning “ income inshareholders net oftax,andisclassifiedasaccumulatedothercomprehensive Newsquest of currencyexchange ratechangesonthetranslationof exchange rateasoftheendaccountingperiod.Theimpact Newsquest currency exchange ratesineffectduringtherelevantperiod. Newsquest hasbeentranslatedtoU.S.dollarsusingtheaverage not beenseparatelypresentedin thebalancesheet. by thecompany. Assets andliabilitiesfromthecablebusinesshave ness soldin1998)waspreviouslyreportedasaseparatesegment operations. Thecablebusiness(alongwiththealarmsecuritybusi- the statementsofincomeandrelateddiscussionsasdiscontinued cable business,theoperatingresultshavebeenreclassified in provided in recognition of these temporary differences. provided inrecognitionofthesetemporary for incometaxreportingpurposes.Deferredtaxes are expense itemsdifferentlyforfinancialreportingpurposesthan reduced forthecosttodispose. determined inasimilarmanner, except thatfairmarket valuesare could differfromtheseestimates. amount ofassets,liabilities,revenuesandexpenses. Actual results the useofestimatesandassumptionsthataffectreported conformity withgenerallyacceptedaccountingprinciplesrequires to fundcostsaccruedunderitsqualifiedpensionplans. retirement plansareactuariallycomputed.Thecompany Accounting forDerivativeInstrumentsandHedging Activities Income taxes: Postretirement benefitsotherthanpensions: Retirement plans: Other assets: New accountingpronouncements: Discontinued operations: Use ofestimates: Foreign currencytranslation: Per shareamounts: ’ ’ s balancesheetisincludedincomprehensiveincome, s balancesheethasbeentranslatedusingthecurrency The company The companyaccountsforcertainincomeand The preparationoffinancialstatementsin Pension costsunderthecompany The companyreportsearningspershareon ’ equity. In connectionwiththesaleof ’ s televisionstationsarepartiesto The incomestatementof In June1998,SFAS No. 133, ’ s resultsofoperationsor The company ’ s ’ s policyis ” 39 1999 FINANCIALS NOTE 2 Although the cable sale was finalized in the year 2000, for Acquisitions, exchanges and dispositions financial reporting purposes, the cable operating results for 1999 1999: On June 24, 1999, Gannett made a cash offer to acquire and all prior years for which it was owned by the company have the stock of Newsquest plc (“Newsquest”). Newsquest’s principal been reclassified in the statements of income and related discus- activities are publishing and printing regional and local newspapers sions as discontinued operations. Likewise for the year 2000, cable in England with a portfolio of 180 titles that include paid-for daily operating results for the period up to the sale date, along with the and weekly newspapers, and free weekly newspapers. gain on the sale, will be reported as discontinued operations. The The offer was for 460 pence (U.S. $7.26) in cash or loan notes cable business (along with the alarm security business sold in for each of 200.4 million fully diluted shares, for a total price of 1998) was previously reported as a separate segment by the approximately 922 million pounds sterling (U.S. $1.5 billion). company (refer to page 31 for additional information). Gannett also financed the repayment of Newsquest’s existing debt. 1998: In the first quarter of 1998, the company sold its five Share purchases commenced in the third quarter of 1999 and remaining radio stations, its alarm security business and its news- were financed principally by commercial paper borrowings and paper in St. Thomas, Virgin Islands. It also contributed its news- operating cash flow. On July 26, 1999, Gannett declared the paper in Saratoga Springs, N.Y., to the Gannett Foundation. The offer unconditional in all respects and shortly thereafter, Gannett company recorded a net non-operating gain of $307 million ($184 effectively owned 100% of Newsquest shares. The acquisition million after tax), principally as a result of these transactions. was recorded under the purchase method of accounting and The company purchased television stations WCSH-TV (NBC) Newsquest’s results of operations are included in the company’s in Portland, Maine, and WLBZ-TV (NBC) in Bangor, Maine, early financial statements from July 26, 1999 forward. in the first quarter and WLTX-TV (CBS) in Columbia, S.C., in April On June 1, 1999, the company completed a broadcast station 1998. transaction under which it exchanged its ABC affiliate KVUE-TV In the third quarter of 1998, the company sold five small- in Austin, Texas, and received KXTV-TV, the ABC affiliate in market daily newspapers in Ohio, Illinois and West Virginia and Sacramento, Calif., plus cash consideration. For financial reporting completed the acquisition of several newspapers in New Jersey, purposes, the company recorded the exchange as two simultane- including The Daily Record in Morristown and the Ocean County ous but separate events; that is, a sale of its Austin TV station for Observer in Toms River. Also in the third quarter of 1998, the which a non-operating gain was recognized, and the acquisition of company completed a transaction with TCI Communications, Inc., the Sacramento station accounted for under the purchase method. under which it exchanged its subscribers and certain cable system In its second quarter, the company reported a net non-operating assets in the suburban Chicago area (93,000 subscribers) for sub- gain of $55 million ($33 million after tax) principally as a result of scribers and certain cable system assets of TCI in Kansas (128,000 this transaction. subscribers). In March 1999, the company contributed The San Bernardino The aggregate purchase price for businesses and assets acquired County Sun to a partnership that includes 21 daily California in 1998 was approximately $370 million in cash. The acquisitions, newspapers in exchange for a partnership interest. which were accounted for under the purchase method of account- The aggregate purchase price, including liabilities assumed, ing, did not materially affect reported results of operations for the for businesses and assets acquired in 1999 including Newsquest, year. the Sacramento television station and certain smaller non-daily 1997: In January 1997, the company exchanged WLWT-TV newspaper publishing operations, totaled approximately $1.8 (NBC) in Cincinnati and KOCO-TV (ABC) in for billion. WZZM-TV (ABC) in Grand Rapids and WGRZ-TV (NBC) in Subsequent event – January 31, 2000: On Jan. 31, 2000, the Buffalo. This exchange was necessary to comply with FCC previously announced sale of the assets of the company’s sub- cross-ownership rules and did not materially affect broadcast sidiary, Multimedia Cablevision, Inc., to Cox Communications, operating results. Inc. of Atlanta, Ga., was completed. In May 1997, the company acquired KNAZ-TV (NBC) in The sale price for the cable business was approximately $2.7 Flagstaff, Ariz., and KMOH-TV (WB, now NBC) in Kingman, Ariz. billion in cash, which resulted in an after-tax gain of approximately Also in May 1997, the company acquired Printed Media $740 million or $2.64 per diluted share. The gain will be reported Companies. In July 1997, Mary Morgan, Inc., was purchased, and in Gannett’s first quarter of 2000. The proceeds from the sale were in August 1997, the company acquired Army Times Publishing used to pay down commercial paper obligations. Company. In October 1997, the company acquired New Jersey Press, Inc., which publishes two dailies, the Asbury Park Press and the Home News Tribune of East Brunswick.

40 Income pershare* Income pershare* Income* Income beforetaxes* operations continuing share from Earnings per *from continuingoperations Operating revenues* Fiscal year In millions,except pershareamounts(proformaandunaudited) These dispositionsdidnotmateriallyaffectresultsofoperations. the companysolditsnewspapersinTarentum andNorthHills,Pa. pany solditsnewspaperinMoultrie,Ga.,andNovember1997, newspaper totheGannettFoundation. In April1997,thecom- operations fortheyear. of accounting,andtheydidnotmateriallyaffectreportedresults The acquisitionswereaccountedforunderthepurchasemethod incashandliabilitiesassumed. was approximately $445million those years. combined companieshadconstitutedasingleentityduring reflect theresultsofoperationsastheywouldhavebeenif However, thisproformacombinedstatementdoes notnecessarily gainspreviouslydiscussed)of$.21. 1998 netnon-operating (diluted) fromcontinuingoperations(excluding the1999and increaseinincomepershare would haveresultedinapro-forma made atthebeginningof1998.Onthisbasis,thesetransactions 2000)were effects ofthecabledivisionsalecompletedinJanuary exchanges anddispositionsnotedabove(includingtheproforma company anditssubsidiariesasthoughtheacquisitions, basis, theestimatedcombinedresultsofoperations in 1999and1998discussedabove,isasfollows: from continuingoperations,excluding gains thenetnon-operating operations continuing Income from In millionsofdollars,except pershareamounts(unaudited) – – Diluted Basic An unaudited earnings summary ofthecompany An unauditedearningssummary 1997,thecompanycontributedNiagaraGazette In January The aggregatepurchasepriceforbusinessesacquiredin1997 The followingtablesummarizes,onanunaudited,proforma – – Diluted Basic 31 15% 15% $3.15 $3.18 13% 886 $ 99Change 1999 27 5 23 34% 35% $2.39 $2.41 15% 15% 35% $2.74 $2.76 681 $ 15% 782 $ 98Cag 97Change 1997 Change 1998 $1,571 $5,544 946 $ 1999 $3.36 $3.39 ’ s income 836 $ $1,393 $5,358 1998 $2.93 $2.95 Interest shareholders million and$6.0million,respectively, weretransferredto ties forthoserights,whichequaled$6.3million,$5.5 years. Asaresultofissuingthoseshares,thecompensationliabili- rights whosefour-year grantperiodsendedinDecemberofthose of commonstock,respectively, insettlement ofstockincentive 161,646and149,148shares 1997, thecompanyissued137,168, respectively. acquisitions totaledapproximately $17millionand $56million, Newsquest totaled approximately $365million,with$181millionrelatedto Income taxes In thousandsofdollars interest (netofamountscapitalized)wasasfollows: paper andmoneymarket funds,ascashequivalents. short-term investmentsingovernmentsecurities,commercial (with originalmaturitydatesoflessthan90days)andconsist marketable securities,whicharereadilyconvertibleintocash For purposesofthisstatement,thecompanyconsidersits Statement ofcashflows NOTE 3 In each January followingtheyearsended1999,1998and In eachJanuary Liabilities assumedinconnectionwith1998and1997 Liabilities assumedinconnectionwith1999acquisitions Cash paidin1999,1998and1997forincometaxes andfor ’ s outstandingdebtobligations. ’ equity. $100,547 $596,873 1999 $ 84,808 $626,409 981997 1998 $102,228 $506,209 41 1999 FINANCIALS NOTE 4 The commitment fee rate may range from .07% to .175%, Long-term debt depending on Standard & Poor’s or Moody’s credit rating of the The long-term debt of the company is summarized below. company’s senior unsecured long-term debt. The rate in effect at Dec. 26, 1999, was .07%. At the option of the company, the In thousands of dollars interest rate on borrowings under the agreement may be at the Dec. 26, 1999 Dec. 27, 1998 prime rate, at rates ranging from .13% to .35% above the London Unsecured promissory notes $2,113,763 $1,003,328 Interbank Offered Rate or at rates ranging from .255% to .50% Notes due 5/1/00, interest at 5.85% 249,982 249,884 above a certificate of deposit-based rate. The prime rate was 8.5% Other indebtedness 99,505 61,459 at the end of 1999 and 7.75% at the end of 1998. The percent- 2,463,250 1,314,671 ages that will apply will be dependent on Standard & Poor’s or Less amount included in Moody’s credit rating of the company’s senior unsecured long- current liabilities — (7,812) term debt. Total long-term debt $2,463,250 $1,306,859 The revolving credit agreement contains restrictive provisions that require the maintenance of net worth of $2.0 billion. At The unsecured promissory notes at Dec. 26, 1999, were due Dec. 26, 1999, and Dec. 27, 1998, net worth was $4.6 billion and from Dec. 27, 1999, to Jan. 31, 2000, with rates varying from $4.0 billion, respectively. 5.50% to 6.03%. At Dec. 26, 1999, the unsecured promissory notes and the The unsecured promissory notes at Dec. 27, 1998, were due notes due May 1, 2000, were supported by the $3.0 billion from Dec. 28, 1998, to Jan. 19, 1999, with rates varying from revolving credit agreement and, therefore, are classified as long- 4.82% to 5.21%. term debt. The maximum amount of such promissory notes outstanding As discussed in Note 2, the company sold its cable business on at the end of any period during 1999 and 1998 was $2.2 billion Jan. 31, 2000. The proceeds from the sale were used to pay down and $1.2 billion, respectively. The daily average outstanding commercial paper obligations. balance was $1.3 billion during 1999 and $1 billion during 1998. Approximate annual maturities of long-term debt, assuming The weighted average interest rate was 5.2% for 1999 and 5.5% that the company had used the $3.0 billion revolving credit for 1998. agreement as of the balance sheet date to refinance existing Other indebtedness includes the loan notes issued by the unsecured promissory notes and the notes due May 1, 2000, on a company to the former shareholders of Newsquest plc in connec- long-term basis, are as follows: tion with its acquisition as more fully discussed in Note 2. The In thousands of dollars notes bear interest at .5% below the London Interbank Offered 2000 Rate subject to a cap of 6.5%. Interest is payable semiannually. The notes are due on Dec. 31, 2006, but may be redeemed by the 2001 company on June 30, 2000, and on each interest payment date 2002 thereafter. The remaining other indebtedness at Dec. 26, 1999, has 2003 $ 2,379,495 maturities ranging from 2000 to 2013 at interest rates ranging 2004 from 3.7% to 10%. Later years 83,755 At Dec. 26, 1999, the company had $3.0 billion of credit Total $ 2,463,250 available under a revolving credit agreement. The agreement provides for a revolving credit period which permits borrowing At Dec. 26, 1999, and Dec. 27, 1998, the company estimates from time to time up to the maximum commitment. The revolving that the amount reported on the balance sheet for financial credit period extends to July 1, 2003. instruments, including long-term debt, cash and cash equivalents, trade and other receivables, current maturities of long-term debt and other long-term liabilities, approximate fair value.

42 retirement plans for company-sponsored Pension expense pension cost Union andother service (credit)cost Amortization ofprior Expected returnonplanassets Amortization ofactuarialloss obligation Interest costonbenefit Pension cost Amortization oftransitionasset during theperiod Service cost-benefitsearned In thousandsofdollars presented inthefollowingtable: deposits. bonds andU.S.governmentobligationsinterest-bearing plan assetsincludemarketable securitiessuchascommonstocks, andfinalaveragepay.years ofservice Thecompany sidiaries. BenefitsundertheGannettRetirementPlanarebasedon covers mostoftheU.S.employeescompanyanditssub- Retirement Planisthecompany substantially allfull-timeemployeesarecovered.TheGannett and separateplansforjointoperatingagencies,underwhich including plansestablishedundercollectivebargainingagreements The companyanditssubsidiarieshavevariousretirementplans, Retirement plans NOTE 5 The company ’ s pensioncostsfor1999,1998and1997are ’ 19,818 $ (146,168) 60,834 $ 103,412 s principalretirementplanand 14,747 1999 (3,754) 5,071 1,407 (984) ,3 $ 15,015 7,737 $ $47,105 51,249 $ 1544 (112,040) (135,484) 373 1,790 (3,773) 981997 1998 41185,033 94,171 426 (11,008) (4,226) ,5 4,135 10,880 5,357 2,380 443 ’ s pension Change inbenefitobligation Actual returnonplanassets beginning ofyear Fair valueofplanassetsat Change inplanassets end ofyear Net benefitobligationat Gross benefitspaid Acquisitions/plan mergers Actuarial (gain)loss Plan amendments Plan participants Interest cost Service cost beginning ofyear Net benefitobligationat In thousandsofdollars Consolidated BalanceSheet Amounts recognizedin Net amountrecognizedatendofyear Unrecognized nettransitionasset Unrecognized priorservicecredit Unrecognized netactuarial(gain)loss Funded statusatendofyear end ofyear Fair valueofplanassetsat Gross benefitspaid Acquisitions/plan mergers Employer contributions Plan participants 1,239,800 sharesvaluedat$80milliontheendof1998. common stockvaluedat$101milliontheendof1999and Pension planassetsinclude1,242,300sharesofthecompany return onplanassetsusedindeterminingpensioncostwas10%. the endofeach1999and1998.Theassumedlong-termrate of respectively. Theassumed rateofcompensationincreasewas5%at discount rateof8.0%and6.75%attheend19991998, also areprovided. Consolidated BalanceSheetsforthecompany pension plans.Therelatedamountsthatarerecognizedinthe obligations, planassetsandfundedstatusofthecompany Accrued benefitcost Prepaid benefitcost The netbenefitobligationwasdeterminedusinganassumed The followingtableprovidesareconciliationofbenefit ’ ’ contributions contributions e.2,1999 26, Dec. $1,470,826 $1,470,403 $1,474,411 73,451 $ 111,232 $ 37,781 $ 292,738 $ $1,763,141 (185,452) (218,942) (91,092) (35,783) (91,092) 264,905 106,090 103,412 111,201 60,834 1,947 5,354 1,947 (232) 253 ’ s retirementplans Dec. 27,1998 63,039 $ 110,531 $ 47,492 $ (3,585) $ $1,470,826 $1,269,090 $1,474,411 $1,243,188 (39,790) (70,883) (70,883) 116,914 151,892 102,927 ’ (1,214) (3,791) 92,081 57,550 94,171 51,249 s — — 3,813 ’ s 43 1999 FINANCIALS NOTE 6 At Dec. 26, 1999, the accumulated postretirement benefit obli- Postretirement benefits other than pensions gation was determined using a discount rate of 8.0% and a health The company provides health care and life insurance benefits to care cost trend rate of 7.5% for pre-age 65 benefits, decreasing to certain retired employees who meet certain age and service 5% in the year 2005 and thereafter. For post-age 65 benefits, the requirements. The cost of providing retiree health care and life health care cost trend rate used was 5.5%, declining to 5% in the insurance benefits is actuarially determined and accrued over the year 2001 and thereafter. service period of the active employee group. At Dec. 27, 1998, the accumulated postretirement benefit obli- Postretirement benefit cost for health care and life insurance for gation was determined using a discount rate of 6.75% and a health 1999, 1998 and 1997 included the following components: care cost trend rate of 8% for pre-age 65 benefits, decreasing to 5% in the year 2005 and thereafter. For post-age 65 benefits, the In thousands of dollars health care cost trend rate used was 6%, declining to 5% in the 1999 1998 1997 year 2001 and thereafter. Service cost - benefits earned during the period $ 3,796 $ 3,118 $ 3,416 The company’s policy is to fund the above-mentioned benefits Interest cost on net benefit as claims and premiums are paid. obligation 14,901 14,378 15,342 The effect of a 1% increase in the health care cost trend rate Amortization of prior service credit (8,478) (5,578) (5,303) used would result in increases of approximately $13 million in the Amortization of actuarial loss (gain) 20 235 (171) 1999 postretirement benefit obligation and $1 million in the Net periodic postretirement aggregate service and interest components of the 1999 expense. benefit cost $10,239 $12,153 $13,284 The effect of a 1% decrease in the health care cost trend rate used would result in decreases of approximately $11 million in the The table below provides a reconciliation of benefit obligations and 1999 postretirement benefit obligation and $1 million in the funded status of the company’s postretirement benefit plans: aggregate service and interest components of the 1999 expense. The company’s U.S. retiree medical insurance plan limits the In thousands of dollars company’s share of the cost of such benefits it will pay to future Dec. 26, 1999 Dec. 27, 1998 retirees. The company’s share of these benefit costs also depends Change in benefit obligation on employee retirement age and length of service. Net benefit obligation at beginning of year $238,346 $231,565 Service cost 3,796 3,118 Interest cost 14,901 14,378 Plan participants’ contributions 4,656 4,402 Plan amendments (8,341) Actuarial (gain) loss (28,142) 13,798 Acquisitions/plan mergers 3,392 Gross benefits paid (21,356) (20,574) Net benefit obligation at end of year $215,593 $238,346 Change in plan assets Fair value of plan assets at beginning of year –– –– Employer contributions 16,700 16,172 Plan participants’ contributions 4,656 4,402 Gross benefits paid (21,356) (20,574) Fair value of plan assets at end of year –– –– Funded status at end of year $215,593 $238,346 Unrecognized net actuarial gain (loss) 21,519 (6,154) Unrecognized prior service credit 67,288 75,953 Accrued postretirement benefit cost $304,400 $308,145

44 Effective taxrate Other, net deductible fortaxpurposes Goodwill amortizationnot of federalincometaxbenefit State/other incometaxes net taxes resultingfrom: Increase in taxrate U.S. statutory Fiscal year 62,162 Total following differences: taxrateasaresultofthe exceeds theU.S.federalstatutory (2,643) Deferred million in1999,$241998and$231997. Current 64,805 state incometaxes payableondiscontinuedoperations of$28 85,356 continuing operations,thecompanyalsorecordedfederaland 411,438 $ $(17,490) 4,747 Total State andother $428,928 Total 80,609 Federal 1997 $559,944 In thousandsofdollars Deferred 31,144 $ Total Current State andother $528,800 Federal 1998 In thousandsofdollars Total Foreign State andother Federal 1999 In thousandsofdollars operations consistsofthefollowing: The provisionforincometaxes onincomefromcontinuing Income taxes NOTE 7 The provisionforincometaxes oncontinuingoperations In additiontotheincometaxprovisionpresentedabovefor 4373$2,3)$473,600 $ $(20,133) $493,733 $645,300 35,891 $ $609,409 $607,800 $18,108 $520,693 $589,692 $14,791 $505,902 urn eerdTotal Deferred Current 08311512,048 75,059 1,185 2,132 10,863 72,927 39.8% 35.0% 1999 (0.1) 1.7 3.2 40.0% 35.0% 981997 1998 (0.4) 1.9 3.5 41.0% 35.0% 0.4 2.1 3.5 Other Total deferredtaxassets Postretirement medicalandlife Accrued compensationcosts Assets Total deferredtaxliabilities Pension Net deferredtaxliabilities Other deductible intangibles Accelerated amortizationof following attheendof1999and1998: financial statementpurposes. recognition ofrevenueandexpense fortaxreportingand Accelerated depreciation Liabilities In thousandsofdollars Deferred taxliabilitiesandassetswerecomposedofthe differencesinthe Deferred incometaxes reflecttemporary e.2,1999 26, Dec. 479,547 $ 403,846 $ (202,189) (118,310) 681,736 148,258 114,547 (20,784) (63,095) 15,085 Dec. 27,1998 442,359 $ 392,374 $ (196,508) (120,177) 638,867 120,475 109,807 (20,613) (55,718) 16,211 45 1999 FINANCIALS NOTE 8 The company’s 1978 Executive Long-term Incentive Plan (the Capital stock, stock options, incentive plans Plan) provides for the granting of stock options, stock incentive On Aug. 19, 1997, the company’s Board of Directors approved a rights and option surrender rights to executive officers and other two-for-one stock split effective on Oct. 6, 1997, for shareholders key employees. The Plan may issue up to 24,000,000 shares of of record on Sept. 12, 1997. In this report, all share and per-com- Gannett common stock through the end of 1997. The Plan mon-share amounts have been adjusted to reflect the stock split. restricts the granting of options to any participant in any fiscal year The company’s earnings per share from continuing operations to no more than 350,000 shares of common stock and the exer- (basic and diluted) for 1999, 1998 and 1997 are presented below: cise period for any stock options issued under the Plan is 10 years after the date of the grant thereof. The Plan provides that shares of In thousands, except per share amounts common stock subject to a stock option or other award that is 1999 1998 1997 canceled or forfeited again be available for issuance under the Plan. Income from continuing Stock options are granted to purchase common stock of the operations $919,387 $966,425 $681,353 company at not less than 100% of the fair market value on the day Weighted average number of common shares the option is granted. The exercise period is eight years for options outstanding (basic) 279,048 283,097 283,360 granted prior to Dec. 10, 1996, and 10 years for options granted Effect of dilutive securities on that date and subsequent. The options become exercisable at Stock options 2,217 2,197 1,768 25% per year after a one-year waiting period. Stock incentive rights 343 417 482 Stock incentive rights entitle the employee to receive one share Weighted average number of common stock at the end of an incentive period, conditioned of common shares outstanding (diluted) 281,608 285,711 285,610 upon the employee’s continued employment throughout the incentive period. The incentive period is normally four years. Earnings per share from continuing operations (basic) $3.29 $3.41 $2.41 During the incentive period, the employee receives cash payments Earnings per share from equal to the cash dividend the company would have paid had the continuing operations (diluted) $3.26 $3.38 $2.39 employee owned the shares of common stock issuable under the incentive rights. The 1999, 1998 and 1997 diluted earnings per share amounts Under the Plan, all outstanding awards will be vested if there is exclude the effects of 3,150,090, 2,500,210 and 1,750,100 stock a change in control of the company. Stock options become 100% options outstanding, respectively, as their inclusion would be exercisable immediately upon a change in control. Option surren- antidilutive. der rights have been awarded, which relate one-for-one to all In the third quarter of 1998, the company announced an outstanding stock options. These rights are effective only upon a authorization to repurchase up to $250 million of company stock. change in control and entitle the employee to receive cash for That authorization was substantially used by the end of the third option surrender rights equal to 100% of the difference between quarter, and the Board approved an additional $500 million the exercise price of the related stock option and the change-in- authorization on Sept. 30. Under these authorizations, the compa- control price (which is the highest price paid for a share of stock ny purchased approximately 6 million shares of common stock in as part of the change in control). The Plan also provides for the 1998 for $329 million and approximately 2.4 million shares in payment in cash of the value of stock incentive rights based on the 1999 for $163 million. In early 2000, the Board approved an change-in-control price. authorization for the company to repurchase up to $500 million in additional common stock.

46 acld(8,0)31.28 24.68 59.20 (184,608) 36.00 27.90 (1,237,089) 1,789,460 $14.71 9,234,421 4,557,488 options grantedduringtheyear Weighted averagefairvalueof $29.64 Options exercisable atyearend 40.49 Outstanding atendofyear 26.91 Canceled 8,866,658 65.00 Exercised (244,291) Granted (931,604) Outstanding atbeginningofyear 31.93 43.59 2,514,210 $17.32 5,365,913 10,572,736 options grantedduringtheyear Weighted averagefairvalueof $36.00 Options exercisable atyearend Outstanding atendofyear 9,234,421 Canceled Exercised Granted Outstanding atbeginningofyear options grantedduringtheyear Weighted averagefairvalueof Options exercisable atyearend Outstanding atendofyear Canceled Exercised Granted Outstanding atbeginningofyear presented below: and Dec.28,1997,changesduringtheyearsthenendedis stock incentiverightsplansasofDec.26,1999,27,1998, 97SokOto ciiy Weighted 1997 StockOptionActivity Weighted 1998 StockOptionActivity 1999 StockOption Activity A summary ofthestatuscompany A summary 2468152.57 12,406,841 $43.59 10,572,736 11834 30.04 (1,158,304) hrsexercise price Shares ,3,2 38.43 6,236,725 74.21 3,180,365 $25.04 1796 52.47 (187,956) hrsexercise price Shares hrsexercise price Shares ’ s stockoptionand Weighted average average average ag fNme eann aeaeNme average Number average remaining Number of Range 26, 1999,follows: 1978 Plantotaled16,872,659atDec.26,1999. incentive periodendedDecember1999. in settlementofpreviouslygrantedstockincentiverightsforthe for 1999arethefour-year period2000-2003. Awards for1998are for thefour-year period1999-2002.Awards Awards granted follows: Awards madeunderthePlanforstockincentiverightswereas Stock IncentiveRights Those chargeswerebasedonthegrantpriceofstockincentive $8 millionfor1999,$71998and1997. has beenchargedagainstincomeforitsstockincentiverightswas been recognizedforitsstockoptions.Thecompensationcostthat Opinion 25andrelatedInterpretations,nocompensationcost has value methodtoallapplicableawardsgranted.UnderAPB following proformadisclosureoftheeffectsapplyingfair based compensationinaccordancewithAPB25,andprovidesthe (APB 25).Thecompanyhaschosentocontinuereportstock- Opinion No.25, method currentlyprescribedunderAccounting PrinciplesBoard allows companiestocontinueapplytheintrinsicvalue-based encourages companiestoadoptthatmethod.However, italso accounting foremployeestock-basedcompensationplansand Compensation, exercise outstanding contractual exercise exercisable exercise contractual exercise exercise outstanding rcsa 22/9lf ys rc t1/69 price at12/26/99 price life(yrs) at12/26/99 prices 2-82048322$56 ,0,8 $25.61 2,004,883 $25.61 2.2 2,004,883 $23-28 07 ,5,1 . 7.67,3 $71.82 70,335 $65.02 $45.98 $59.50 628,296 24,795 $74.26 782,975 $65.02 $34.76 $59.50 $45.98 9.9 2,725,441 9.0 $35.14 8.0 7.0 3,150,515 2,464,185 70-75 5.7 1,565,950 33,060 61-68 50-60 3,188,248 41-49 32-38 Further informationaboutstockoptionsoutstandingatDec. Pro formaresults:SFAS No.123, Shares available:availableforfuturegrantsunderthe 2000,137,168sharesofcommonstockwereissued In January Awards for1997are for thefour-year period1998-2001. 2468172$25 ,3,2 $38.43 6,236,725 $52.57 7.2 12,406,841 ” establishes afairvalue-basedmethodof “ Accounting forStockIssuedtoEmployees Weighted vrg egtdWeighted average Weighted 169,290 1999 “ Accounting forStock-Based 6,8 173,325 168,785 98 1997 1998 ” 47 1999 FINANCIALS rights recognized over the four-year earnout periods. Had 401(k) Savings Plan compensation cost for the company’s stock options been deter- On July 1, 1990, the company established a 401(k) Savings Plan. mined based on the fair value at the grant date for those awards as Most employees of the company (other than those covered by a permitted (but not required) under the alternative method of SFAS collective bargaining agreement) who are scheduled to work at No. 123, the company’s results of operations and related per share least 1,000 hours during each year of employment are eligible to amounts would have been reduced to the pro forma amounts participate in the Plan. Employees may elect to save up to 15% of indicated below: compensation on a pre-tax basis subject to certain limits. Through In thousands, except per share amounts 1997, the company matched, with company common stock, 25% of the first 4% of employee contributions. Beginning Jan. 1, 1998, 1999 1998 1997 the company match increased to 50% of the first 6% of employee Net income contributions. To fund the company’s matching contribution, an As reported $957,928 $999,913 $712,679 Employee Stock Ownership Plan (ESOP) was formed in 1990 Pro forma $942,733 $991,385 $707,717 which acquired 2,500,000 shares of Gannett stock from the Income from company for $50 million. The stock purchase was financed with a continuing operations loan from the company, and the shares are pledged as collateral for As reported $919,387 $966,425 $681,353 the loan. The company makes monthly contributions to the ESOP Pro forma $904,192 $957,897 $676,391 equal to the ESOP’s debt service requirements less dividends. All Net income per share – basic dividends received by the ESOP are used to pay debt service. As As reported $3.43 $3.53 $2.52 the debt is paid, shares are released as collateral and are available Pro forma $3.38 $3.50 $2.50 for allocation to participants. Net income per share – diluted The company follows the shares allocated method in account- As reported $3.40 $3.50 $2.50 ing for its ESOP. The cost of shares allocated to match employee Pro forma $3.35 $3.47 $2.48 contributions or to replace dividends that are used for debt Income from continuing service are accounted for as compensation expense. The cost of operations per share – basic unallocated shares is reported as deferred compensation in the As reported $3.29 $3.41 $2.41 financial statements. The company, at its option, may repurchase Pro forma $3.24 $3.38 $2.39 shares from employees who leave the Plan. The shares are Income from continuing purchased at fair market value, and the difference between the operations per share – diluted original cost of the shares and fair market value is expensed at As reported $3.26 $3.38 $2.39 the time of purchase. All of the shares initially purchased by the Pro forma $3.21 $3.35 $2.37 ESOP are considered outstanding for earnings per share calculations. Dividends on allocated and unallocated shares are The fair value of each option is estimated on the date of grant recorded as reductions of retained earnings. using the Black-Scholes option-pricing model with the following Compensation expense for the 401(k) match and repurchased weighted-average assumptions used for grants in 1999, 1998 and shares was $8.9 million in 1999, $7.3 million in 1998 and $2.4 1997, respectively: dividend yield of 1.38%, 1.69% and 2.15%; million in 1997. The ESOP shares as of the end of 1999 and 1998 expected volatility of 22.31%, 20.62% and 16.28%; risk-free were as follows: interest rates of 6.34%, 4.66% and 5.87%; and expected lives of seven years each. 1999 1998 SFAS No. 123 applies to stock compensation awards granted in Allocated shares 1,559,218 1,335,933 fiscal years that began after Dec. 15, 1994. Options are granted Shares released for allocation 44,812 40,950 by the company primarily in December and begin vesting over Unreleased shares 895,970 1,103,117 a four-year period. Options granted in December 1995 and Shares distributed to terminated participants (53,563) (40,454) thereafter are subject to the pronouncement. To calculate the pro ESOP shares 2,446,437 2,439,546 forma amounts shown above, compensation cost was recognized over the four-year period of service during which the options will be earned. As a result, options granted in December of each year (beginning with December 1995) impact pro forma amounts for following years but not the year in which they were granted.

48 ed shareoptionplan,availabletoeligibleemployeesofNewsquest. common stocktoberegisteredinconnectionwithasavingsrelat- become exercisable, atapriceof$.01perRight. redeemable bythecompanyatanytimepriortothey shares atthetimeRightsareexercised. TheRightsare the company ing preferredstock,ortheymayacquireanadditionalinterestin Rights mayacquireaninterestinanewseriesofjuniorparticipat- of 15%ormorethecompany persons acquiresorannouncesanintentiontoacquireownership 1990. TheRightsbecomeexercisable whenapersonorgroupof common shareheld,payabletoshareholdersofrecordonJune8, bution ofonePreferredSharePurchaseRight( In November1999,theBoardauthorized2,000,000sharesof In May1990,theBoardofDirectorsdeclaredadividenddistri- ’ s commonsharesat50%ofthemarket valueofthe ’ s commonshares.Holdersofthe “ Right ” ) foreach Compensation Plan( $174 million. potential commitmentundertheagreementisapproximately WKYC shares.Thecompany inApril1999wherebyGannettacquiredanadditional 7%of NBC shares inWKYC-TV overafour-year period.Aputwasmadeby 19,136 86,935 either partytoinitiateapurchase/saleofsomeorallNBC 22,187 26,079 40,780 44,154 $ Total years Later 2004 2003 2002 2001 2000 In thousandsofdollars matters incidentaltotheirbusiness.Thecompany defendants injudicialandadministrativeproceedingsinvolving Litigation: Thecompanyandanumberofitssubsidiariesare Commitments andcontingentliabilities NOTE 9 continued lifeandmedicalinsurancecoverage. severance paymentofuptothreeyears in controlofthecompany. Benefits underthePlanincludea under certaincircumstanceswithintwoyearsfollowingachange benefits tokey executives whoseemploymentisterminated with NBC. Termswith NBC. oftheagreementpermit(butdon agreement December 1998,thecompanyenteredintoaPut-Call ownsa42%interest. In National BroadcastingCompany(NBC) programs tobeavailablefortelecastinginthefuture. under programbroadcastcontractstotaling$109.5millionfor million for1999,$441998and$421997. Total rentalcostsreflectedincontinuingoperationswere$50 minimum subleaserentalsaggregatingapproximately $9million. under non-cancelableoperatingleasesareasfollows: result ofthesematters. does notbelievethatanymaterialliabilitywillbeimposedasa In December1990,thecompanyadoptedaTransitional The companypresentlyownsa58%interestinWKYC-TV and Program broadcastcontracts:Thecompanyhascommitments Total minimumannualrentalshavenotbeenreducedforfuture Leases: Approximate futureminimumannualrentalspayable “ Plan ’’ ) whichprovidestermination ’ s maximumaggregateremaining ’ compensationand ’ s management ’ t require) 239,271 $ ’ s 49 1999 FINANCIALS NOTE 10 In thousands of dollars Business operations and segment information Business segment financial information The company has determined that its reportable segments based 1999 1998 1997 on its management and internal reporting structure are newspaper Operating revenues publishing, which is the largest segment of its operations; and Newspaper publishing $4,531,548 $4,159,393 $3,770,670 secondly, broadcasting (television). As discussed in Note 2, the Broadcasting 728,642 721,298 703,558 cable division’s operating results, identifiable assets and capital $5,260,190 $4,880,691 $4,474,228 expenditures have been retroactively excluded from the segment Operating income data presented herein as the division has been reclassified in the Newspaper publishing $1,291,665 $1,109,221 $1,001,965 statements of income and related discussions as discontinued operations. Broadcasting 337,537 343,512 328,311 The newspaper segment at the end of 1999 consisted of 74 Corporate (3) (66,101) (66,919) (68,034) U.S. daily newspapers in 38 states and one U.S. territory, includ- $1,563,101 $1,385,814 $1,262,242 ing USA TODAY, a national, general-interest daily newspaper; and Depreciation and USA WEEKEND, a magazine supplement for newspapers. The amortization newspaper segment also includes Newsquest (acquired in 1999) Newspaper publishing $ 207,720 $ 184,718 $ 168,526 which is a regional newspaper publisher in England with a portfo- Broadcasting 62,861 60,023 56,459 lio of 180 titles that include paid-for daily and weekly newspapers, Corporate (3) 9,510 8,722 8,720 and free weekly newspapers. The newspaper segment in the U.S. $ 280,091 $ 253,463 $ 233,705 also includes non-daily publications, a nationwide network of off- Operating cash flow (4) set presses for commercial printing and several smaller businesses. Newspaper publishing $1,499,385 $1,293,939 $1,170,491 Newsprint, which is the principal product used in newspaper Broadcasting 400,398 403,535 384,770 publishing, has been and may continue to be subject to significant Corporate (3) (56,591) (58,197) (59,314) price changes from time to time. $1,843,192 $1,639,277 $1,495,947 The broadcasting segment’s activities for 1999 include the Identifiable assets (1) operation of 21 U.S. television stations. Newspaper publishing $5,548,738 $ 3,682,839 $3,593,932 The company’s foreign revenues in 1999 totaled approximately Broadcasting 1,931,034 1,872,351 1,725,019 $239 million, principally from publications distributed in England. Corporate (3) 427,429 355,236 348,343 The company’s long-lived assets in foreign countries totaled $7,907,201 $5,910,426 $5,667,294 approximately $1.8 billion at Dec. 26, 1999, principally in Capital expenditures (2) England. Newspaper publishing $ 169,259 $ 164,479 $ 123,343 Separate financial data for each of the company’s business segments is presented in the table which follows. The accounting Broadcasting 24,831 25,548 13,157 policies of the segments are those described in Note 1. The com- Corporate (3) 51,055 32,032 3,495 pany evaluates the performance of its segments based on operating $ 245,145 $ 222,059 $ 139,995 income and operating cash flow. Operating income represents total (1) Excludes assets related to discontinued operations totaling $1,112,527 in 1999, $1,069,054 in 1998, and $1,223,057 in 1997. revenue less operating expenses, depreciation and amortization of (2) Excludes capital expenditures made for discontinued operations totaling intangibles. In determining operating income by industry segment, $13,298 for 1999, $22,366 for 1998, and $81,256 for 1997. general corporate expenses, interest expense, interest income, and (3) Corporate amounts represent those not directly related to the company’s two other income and expense items of a non-operating nature are not business segments. considered, as such items are not allocated to the company’s seg- (4) Operating cash flow amounts represent operating income plus depreciation and amortization of intangible assets. Such cash flow amounts in total vary from ments. Operating cash flow represents operating income plus net cash flow from operating activities presented in the Consolidated Statements depreciation and amortization of intangible assets. Corporate of Cash Flows. assets include cash and marketable securities, certain investments, long-term receivables and plant and equipment primarily used for corporate purposes. Interest capitalized has been included as a corporate capital expenditure for purposes of segment reporting.

50 statements aretheresponsibilityofcompany principles generallyacceptedintheUnitedStates.Thesefinancial in theperiodendedDec.26,1999conformitywithaccounting of theiroperationsandcashflowsforeachthethreeyears subsidiaries atDec.26,1999and27,1998,theresults respects, thefinancialpositionofGannettCo.,Inc.andits of changesinshareholders the relatedconsolidatedstatementsofincome,cashflowsand In ouropinion,theaccompanyingconsolidatedbalancesheetsand To theBoardofDirectorsandShareholdersGannettCo.,Inc. REPORT OFINDEPENDENT ACCOUNTANTS January 31,2000 January Washington, D.C. PricewaterhouseCoopers LLP basis fortheopinionexpressed above. presentation. We believethatourauditsprovideareasonable management, andevaluatingtheoverallfinancialstatement accounting principlesusedandsignificantestimatesmadeby amounts anddisclosuresinthefinancialstatements,assessing includes examining, onatestbasis,evidencesupportingthe the financialstatementsarefreeofmaterialmisstatement.Anaudit perform theaudittoobtainreasonableassuranceaboutwhether accepted intheUnitedStates,whichrequirethatweplanand these statementsinaccordancewithauditingstandardsgenerally statements basedonouraudits.We conductedourauditsof our responsibilityistoexpress anopiniononthesefinancial ’ equitypresentfairly, inallmaterial ’ s management; 51 1999 FINANCIALS 11-YEAR SUMMARY

In thousands of dollars, except per share amounts 1999 1998 1997 1996 Net operating revenues Newspaper advertising $ 3,292,894 $ 2,942,995 $ 2,634,334 $ 2,417,550 Newspaper circulation 1,022,520 1,010,238 948,141 917,677 Broadcasting 728,642 721,298 703,558 686,936 All other 216,134 206,160 188,195 166,444 Total (Notes a and b, see page 54) 5,260,190 4,880,691 4,474,228 4,188,607 Operating expenses Costs and expenses 3,416,998 3,241,414 2,978,281 2,946,565 Depreciation 169,460 163,776 152,964 147,721 Amortization of intangible assets 110,631 89,687 80,741 75,043 Total 3,697,089 3,494,877 3,211,986 3,169,329 Operating income 1,563,101 1,385,814 1,262,242 1,019,278 Non-operating income (expense) Interest expense (94,619) (79,412) (98,242) (135,563) Other 58,705 (11) 305,323(9) (9,047) 155,825 (7) Income before income taxes 1,527,187 1,611,725 1,154,953 1,039,540 Provision for income taxes 607,800 645,300 473,600 442,900 Income from continuing operations 919,387(11) 966,425(9) 681,353 596,640 (7) Discontinued operations: Income from the operation of discontinued businesses (net of income taxes) (12) 38,541 33,488 31,326 51,867 Gain on disposal of Outdoor business (net of income taxes) 294,580 Total 38,541 33,488 31,326 346,447 Income before cumulative effect of accounting principle changes 957,928 999,913 712,679 943,087 Cumulative effect on prior years of accounting principle changes for: Income taxes Retiree health and life insurance benefits Net income $ 957,928 $ 999,913 $ 712,679 $ 943,087 Operating cash flow (5) $ 1,843,192 $ 1,639,277 $ 1,495,947 $ 1,242,042 Per share amounts (1) Income from continuing operations before cumulative effect of accounting principle changes: basic / diluted $3.29/ $3.26 (11) $3.41/$3.38 (9) $2.41/$2.39 $2.12/$2.11 (7) Net income: basic / diluted $3.43/$3.40 $3.53/$3.50 $2.52/$2.50 $3.35/$3.33 Dividends declared (2) .82 .78 .74 .71 Weighted average number of common shares outstanding in thousands: basic/diluted (2) 279,048/281,608 283,097/285,711 283,360/285,610 281,782/283,426 Financial position Working capital $ 191,444 $ 178,418 $ 146,057 $ 47,609 Long-term debt excluding current maturities 2,463,250 1,306,859 1,740,534 1,880,293 Shareholders’ equity 4,629,646 3,979,824 3,479,736 2,930,818 Total assets 9,006,446 6,979,480 6,890,351 6,349,597 Selected financial percentages and ratios Percentage increase (decrease) Earnings from continuing operations, after tax (4) 13.3%(10) 14.9%(8) 35.4% 10.2% (6) Earnings from continuing operations, after tax, per share: basic/diluted (4) 14.9%/14.9% (10) 14.5%/14.6%(8) 36.9%/34.3% 8.0%/9.9% (6) Dividends declared per share 5.1% 5.4% 4.2% 2.9% Return on equity (3) 20.6% 21.0% 21.3% 19.8% Credit ratios Long-term debt to shareholders’ equity 53.2% 32.8% 50.0% 64.2% Times interest expense earned 17.1X 21.3X 12.8X 8.7X

(1) Per share amounts have been based upon average number of shares outstanding (4) Before cumulative effect of accounting principle changes. during each year, giving retroactive effect to adjustment in (2). (5) Operating cash flow represents operating income plus depreciation and amortization (2) Shares outstanding and dividends declared have been converted to a comparable basis of intangible assets. by reflecting retroactively the 2-for-1 stock split effective Oct. 6, 1997. (6) Before 1996 after-tax gain on exchange of broadcast stations of $93 million or $.33 (3) Based upon average shareholders’ equity (continuing operations before non-recurring per share. gains and accounting principle changes). (7) Includes pre-tax gain on exchange of broadcast stations of $158 million (after-tax gain of $93 million or $.33 per share).

52 (9) Includes pre-tax net non-operating gainprincipallyfromthedispositionof radio Includespre-taxnetnon-operating (9) Before1998$184millionafter-taxgainprincipallyfromthe netnon-operating (8) 8,1/8,2 8,5/9,4 9,4/9,5 8,9/9,7 0,6/0,6 2,9/2,3 322,506/323,932 320,094/322,830 301,566/303,267 288,296/290,174 292,948/294,659 288,552/290,148 280,312/282,323 per share-basicand$.64share-diluted). and alarmsecuritybusinessesof$307million (after-tax gainof$184millionor$.65 per share-diluted). disposition oftheradioandalarmsecuritybusinesses ($.65pershare-basicand$.64 132$1373$3288$1986$1226$1847$193,208 $ 168,487 $ 192,266 $ 199,896 $ 302,818 $ 123,783 $ 41,312 $ ,0,9 8,3 9,7 8,6 2,8 1,7 892,139 $ 397,509 $ 816,974 $ 376,963 $ 721,985 $ 301,649 $ 787,369 $ 199,680 $ 890,572 $ 397,752 $ 985,839 $ 465,399 $ 1,005,791 $ 477,262 $ ,1,5 ,5,7 ,0,3 ,8,1 ,5,9 ,1,7 2,018,076 $ 1,917,477 $ 1,852,591 $ 1,882,114 $ 2,005,037 $ 2,152,671 $ 2,219,250 $ 17/16 16/16 13/13 .9$6 10/.9$.8$.7$1.23/$1.23 $1.18/$1.17 $1.00/$.99 $.69/$.69 $1.36/$1.35 $1.61/$1.60 $1.70/$1.69 16/16 15/15 13/13 11/11 .7$9 11/11 $1.16/$1.16 $1.11/$1.10 $.97/$.96 $1.18/$1.18 $1.33/$1.32 $1.58/$1.57 $1.63/$1.62 .%32 88/89 23/19 20/29 1.%/1.% 46)(.% 10.2%/10.5% (4.6%)/(5.2%) (12.4%)/(12.7%) 22.0%/22.9% 12.3%/11.9% 18.8%/18.9% 3.2%/3.2% ,0,0 ,8,2 ,1,9 ,1,5 ,7,1 ,2,2 2,541,379 2,528,224 2,578,819 2,618,552 2,711,297 2,787,720 2,908,905 ,2,4 ,9,5 ,2,7 ,4,7 ,9,3 ,5,8 2,368,160 3,260,299 2,353,281 3,170,255 2,399,930 3,121,915 2,440,275 3,227,644 2,520,278 3,410,850 2,597,556 3,583,395 2,720,245 3,726,036 ,6,8 6,7 5,8 ,8,5 ,3,9 4,3 922,470 3,782,848 1,995,791 3,826,145 848,633 2,063,077 3,684,080 1,335,394 1,539,487 3,609,009 1,080,756 1,580,101 3,823,798 850,686 1,907,920 3,707,052 1,822,238 767,270 6,503,800 2,145,648 2,767,880 95 94 93 92 91 90 1989 1990 1991 1992 1993 1994 1995 7,6 6,9 9,5 4,8 0,4 7,6 397,509 376,963 301,649 345,680 397,752 465,399 477,262 5,2 5,9 8,5 4,8 9,9 5,5 374,418 235,500 609,918 354,553 226,600 718,920 581,153 292,498 642,031 194,400 486,898 341,189 224,900 543,096 566,089 389,253 264,400 609,092 653,653 455,396 309,600 699,553 764,996 456,626 312,084 795,675 768,710 817,131 4,5 4,5 4,4 3,8 3,6 3,9 134,119 115,773 135,294 408,363 125,659 139,268 396,693 718,087 134,720 139,080 357,383 730,426 167,824 147,248 777,221 370,613 807,093 169,903 146,054 397,204 838,706 174,655 141,151 406,608 849,461 171,426 466,187 869,173 5,7)(564 5,5)(087 7,5)(157 (90,638) (71,567) (71,057) (50,817) (51,250) (45,624) (52,175) 2.%4.%4.%6.%8.%4.%46.2% 41.1% 86.7% 68.4% 44.6% 42.1% 129.0% 0661,0 ,9 ,9 ,5 24023,091 22,410 9,151 4,491 8,499 8,499 10,003 10,003 20,636 20,636 7594,1 3713,9 9613,4 39,100 39,649 39,621 39,197 43,771 44,110 47,509 30 44 23 19 62 75 19.8% 17.5% 16.2% 7.7X 21.9% 9.1X 7.9X 13.8X12.1X 22.3% 17.8X 24.4% 15.7X 23.0% ,5 4955307841,5 069(18,364) 10,689 14,859 7,814 5,350 14,945 3,754 .%31 .%16 .%90 8.8% 9.9% 9.0% (5.3%) 2.5% (17.5%) 1.6% 16.6% 3.2% 14.1% 3.1% 17.0% 3.0% 0.3% 6 6 6 6 6 6 .56 .61 .62 .63 .65 .67 .69 (180,000) 1)Includesresultsfrombusinessessoldandaccountedforasdiscontinued operations (12) gainprincipallyfromtheexchange Includespre-taxnetnon-operating ofKVUE-TV for (11) Before1999$33million after-taxgainprincipallyfromtheexchange netnon-operating (10) 34,000 ,9 ,5 24023,091 22,410 9,151 4,491 outdoor -1989to1996). (cable -1995to1999;security1998; entertainment-1995to1996; KXTV-TV of$55million(after-tax gainof$33millionor$.11per share). of KVUE-TV forKXTV-TV ($.11pershare). 53 1999 FINANCIALS NOTES TO 11-YEAR SUMMARY

(a) The company and its subsidiaries made the acquisitions (b) During the period, the company sold or otherwise disposed of listed below during the period. The results of operations of these substantially all of the assets or capital stock of certain other acquired businesses are included in the accompanying financial subsidiaries and divisions of other subsidiaries. Note 2 of the information from the date of acquisition. Note 2 of the consolidat- consolidated financial statements on page 40 contains further ed financial statements on page 40 contains further information information concerning certain of these dispositions. concerning certain of these acquisitions.

Acquisitions 1989-1999 1989 1997 Oct. 31 Rockford Magazine Jan. 31 WZZM-TV, Grand Rapids, Mich. Nov. 6 Outdoor advertising displays merged into New Jersey Outdoor Jan. 31 WGRZ-TV, Buffalo, N.Y. 1990 May 5 Printed Media Companies March 28 Great Falls (Mont.) Tribune May 27 KNAZ-TV, Flagstaff, Ariz. May 17 Ye Olde Fishwrapper May 27 KMOH-TV, Kingman, Ariz. June 18 The Shopper Advertising, Inc. July 18 Mary Morgan, Inc. Sept. 7 Desert Community Newspapers Aug. 1 Army Times Publishing Co., Inc. Dec. 27 North Santiam Newspapers Oct. 24 New Jersey Press, Inc. Dec. 28 Pensacola Engraving Co. 1998 1991 Jan. 5 WCSH-TV, Portland, Maine Feb. 11 The Add Sheet Jan. 5 WLBZ-TV, Bangor, Maine April 3 New Jersey Publishing Co. April 30 WLTX-TV, Columbia, S.C. Aug. 30 Journal Co., May 31 Classified Gazette, San Rafael, Calif. including The Journal Newspapers, July 7 Ocean County Observer, Toms River, N.J. The Journal Printing Co. (now Springfield Offset) and Telematch July 7 Daily Record, Morristown, N.J. Oct. 3 Gulf Breeze Publishing Co. July 7 Manahawkin Newspapers, Manahawkin, N.J. Aug. 31 TCI Cable Kansas 1992 Aug. 31 New Castle County Shopper’s Guide, Brandywine Valley April 24 Graphic Publications, Inc. Weekly and Autos plus, Wilmington, Del. 1993 1999 Jan. 30 The Advertiser March 17 The Reporter, Melbourne, Fla. April 24 Tulare Advance-Register March 29 Lehigh Acres News-Star, Lehigh Acres, Fla. 1994 June 1 Dealer Magazine, Reno, Nev. May 2 Nursing Spectrum June 1 KXTV-TV, Sacramento, Calif. June 9 Altoona Herald-Mitchellville Index and the Eastern ADvantage July 26 Newsquest plc, United Kingdom Dec. 1 KTHV-TV, Little Rock Sept. 28 Tucker Communications, Inc., Westchester Co., N.Y. 1995 Sept. 29 Pennypower Shopping News, Branson & Springfield, Mo. Dec. 4 Multimedia, Inc. 1996 Dec. 9 WTSP-TV, Tampa-St. Petersburg, Fla.

54 segments: newspaperpublishingandtelevisionbroadcasting. York in 1923andwasreincorporatedinDelaware1972. Arlington, Va., nearWashington, D.C.ItwasincorporatedinNew European andAsianmarkets. Itscorporateheadquartersisin operations inEngland,ithaslimitedforeigncertain of itsrevenuesarefromdomesticoperations.Inadditionto operates primarilyintheU.S.andEngland.Approximately 95% Gannett Co.,Inc.isadiversifiedinformationcompanythat Business ofthecompany FORM 10-KINFORMATION two heatsetprintingfacilities.GannettOffset Offset printgroupincludessevennon-heatsetprintingplantsand Group.TheGannett print groupandGannettMarketing Services and GannettOffset,whichiscomposedoftheOffset providers; advertising tonationalandregionalretailersservice company tions; GannettRetailAdvertising Group,whichrepresentsthe foritsnewspaperopera- whichprovidesnewsservices Service, magazine, andanumberofnon-dailypublications. company alsopublishesUSAWEEKEND,aweekend newspaper approximately 7.1millionfor1999,includingUSATODAY. The 85 dailynewspapers,withatotalaveragecirculationof publishers inEngland.At theendof1999,companyoperated acquired Newsquestplc,oneofthelargestregionalnewspaper group intheU.S.circulation,and1999company discussions elsewhereinthisreport. operations inthecompany its resultsfor1999andprioryearsaretreatedasdiscontinued households. television stationsinmarkets withmorethan17.5million Company, anddefensenewspapers. whichpublishes military advertising fornursingemployment;andArmyTimes Publishing Nursing Spectrum,publisherofbiweeklyperiodicalsspecializing in markets softwareandotherproductsforthepublishingindustry; Gannett MediaTechnologies International,whichdevelopsand ices atmanyofitslocalnewspapersandtelevisionstations; The companyalsoownsUSATODAY.com andotherInternetserv- Gannett TeleMarketing, atelephonesalesandmarketing company. direct-marketing companywithoperationsinLouisville, Ky.; and a enhancement company;GannettDirectMarketing Services, through:Telematch,services adatabase management anddata Groupcoordinatesthesaleofdirect-marketing Marketing Services Mass.; Pensacola, Fla.;St.Louis,Mo.;andSpringfield,Va. Gannett Minneapolis, Minn.;Miramar, Fla.;Nashville,Tenn.; Norwood, cial printingplantsarelocatedinAtlanta, Ga.;Chandler, Ariz.; The company The companypresentlyreportstwoprincipalbusiness The newspapersegmentincludesthefollowing:GannettNews The company On Dec.26,1999,thebroadcastingdivisionincluded21 ’ s newspapers,otherthanUSATODAY, inthesaleof ’ ’ s newspapersmake upthelargestnewspaper s cablebusinesswassoldonJan.31,2000,and ’ s statementsofincomeandrelated ’ s dedicatedcommer- circulation of21.8millionattheend1999. magazine in563newspapersthroughoutthecountry, withatotal WEEKEND, whichisdistributedasaweekend newspaper City, BostonandSeattle. newspapers,includingonesinChicago,SaltLake non-Gannett newspapers. GNSalsoisdistributedbysyndicationtoseveral toGannett and sports,features,photographicservices information). GNSprovidesnationalandregionalnewscoverage Va., andhasbureausinnineotherstates(seepage72formore operation turnedprofitableinthelatterpartof1999. month bytheendof1999anditsrevenueincreased89%.This in morethan60foreigncountries. tributed inEurope,theMiddleEast,Africa andAsia. Itisavailable under contractinLondon,Frankfurt andHongKong,isdis- sharply in1999. 17% and13%,respectively. USATODAY office delivery, mailandothersales. stands orvendingmachinesandtheremainderisfromhome of itsnetpaidcirculationresultsfromsingle-copysalesatnews- isofferedinmanymarkets. Approximately 67% and officedelivery Mail subscriptionsareavailablenationwideandabroad,home newsstands andvendingmachinesgenerallyat50centsacopy. contract atoffsetplantsin14otherU.S.markets. Itissoldat try. ItisprintedatGannettplantsin19U.S.markets andunder transmitted viasatellitetooffsetprintingplantsaroundthecoun- top 100metropolitanmarkets intheU.S. states andisavailabletoreadersonthedayofpublicationin national, general-interestdailynewspaper. Itisavailableinall50 approximately 35,200full-timeandpart-timeemployees. headquartered inArlington,Va., andonDec.26,1999,ithad publications, in38statesandGuam.TheNewspaperDivisionis including USATODAY, andanumberofnon-dailylocal On Dec.26,1999,thecompanyoperated74dailynewspapers, Newspaper publishing/UnitedStates distribute newsandadvertisinginformationacrossthenation. in newtechnology. Collectively, theyformapowerfulnetworkto NEWS 2000,ADvanceandADQ,theircapacitytoinvest their flexibility, theirfocusonsuchcustomer-directed programsas markets. Theirdurabilityliesinthequalityoftheirmanagement, information sourcewithstrongbrandrecognitionintheir were publishedintheevening. including USATODAY, werepublishedinthemorningand15 At theendof1999,59company The newspaperpublishingsegmentalsoincludesUSA (GNS)isheadquarteredinArlington, Gannett NewsService USATODAY.com reachednearly15milliondifferentpeopleper USA TODAY Internationalisprintedfromsatellitetransmission For 1999,USATODAY USA TODAY isproducedatfacilitiesinArlington,Va., andis USA TODAY wasintroducedin1982asthecountry Individually, Gannett newspapers aretheleadingnewsand ’ s advertisingrevenuesandvolumerose ’ s operatingincomerose ’ s dailynewspapers, ’ s first 55 1999 FINANCIALS News departments across Gannett continued to emphasize The newspapers’ quality initiative, known as ADQ, produced coverage of the key franchise subject – local news. Many news- for the fifth consecutive year improved ad quality and reduced papers expanded efforts to reach more local readers by increasing credit cost. With ROP ad count up and total ad revenues up in or enhancing coverage of additional local communities around the 1999 over 1998, Gannett newspapers produced higher volume core cities. with higher quality. In June 1999 at a meeting of Gannett publishers and editors, The online strategy at Gannett local newspapers is consistent the Newspaper Division introduced the Principles of Ethical with the overall Gannett philosophy in serving our newspapers’ Conduct for Newsrooms, guidelines to better address issues of communities. The role of the local newspaper is to serve the local information gathering and presentation. The program’s aim is to reader and advertiser; local newspaper products and services, set out the high standards expected and practiced at the newspa- including online products, must be designed to serve community pers. The five key principles state that our newsrooms are commit- needs. ted to: seeking and reporting the truth in a truthful way; serving The company is taking an aggressive approach to providing the public interest; exercising fair play; maintaining independence; online information products that position its local newspapers to and acting with integrity. grow and enhance their franchises as the leading information Training in the program took place in the fall and extended to providers in their communities. all newsrooms. By year-end, nearly 5,000 journalists had partici- Internet publishing, by its nature, paired with good business pated in training programs. The principles also were spelled out in approaches, demands more national economies of scale, and stan- the newspapers for readers in each community, and editors make dardization of products and technology than traditional newspaper sure that newsrooms remain focused on these principles. publishing. The company takes advantage of national economies, Another major effort in newsrooms was special coverage of national partnerships and national-level technology by adapting Y2K issues and the coming of the new millennium. Newspapers them to its local markets. Various approaches and different levels presented some year-long features, special historic sections and of activity are employed based on the specific needs and opportu- sections looking ahead to the next century. Gannett News Service nities in each market. moved substantial material for use by newspapers throughout A principal achievement in 1998 was growth of newspapers the year. Each newspaper presented extensive local – as well as online. By Dec. 31, 1998, 54 newspapers had online projects. This national and world – coverage of events Dec. 31, 1999, and into was up from 30 at the end of 1997. In 1999, growth of Internet Jan. 1, 2000. All of the company’s daily newspapers receive products at newspapers already launched was emphasized. As a Gannett News Service. In addition, all subscribe to The Associated result, the number of newspapers online rose to 60 at the end of Press, and some receive various supplemental news and syndicated 1999, but the number of products these papers offered rose from features services. 238 to over 480. In 1999, the company continued to implement strategies to These products are each designed to offer penetrating specific increase its revenues from medium and smaller advertisers in information on important subjects and include not only local each market it serves. Revenues from these types of advertisers news, but also guides for home buying, employment and job infor- increased again in 1999. Initiatives focused on sales and rate mation, automotive, entertainment, and tourism, as well as other management, among other areas. Sales management initiatives specialty products such as Space Online in Brevard County, Fla., included allocating proper resources to increase the number and or the Derby in Louisville, Ky. quality of sales calls, improving sales compensation and providing Revenue for newspaper Internet activities has more than tripled consistent sales training. Rate management programs focused on from the first quarter, 1998 through the fourth quarter of 1999. selling multiple advertising insertions and reviewing rates and rate The company expects sharp revenue growth again in 2000. structures to assure they match the opportunities in the market. The company is also pursuing opportunities to develop nation- The company regularly calculates market potential and develops al Internet businesses. By partnering with other companies, using strategic plans to capitalize on that potential. Significant efforts will the strength of local newspaper franchises and adding to the effi- continue to be taken in 2000 to make the company’s personnel ciencies of the Internet to deliver both nationally and locally, increasingly competitive in their leadership, strategic thinking and unique opportunities to develop new national businesses are being marketing skills. created. In addition, these partnerships enhance local efforts by providing additional content, advertising opportunities and techni- cal resources that help Gannett’s local newspapers improve their products and services.

56 the company and Automotive categories. local employmentadvertisers. thelocalpapercanofferto expands theproductsandservices company and,atthesametime,makes the national employmentservice printing plates.Allofthecompany edit andproducetypefortransferbyaphotographicprocessto systems capturedraftsofreporters the waynewspapersareproduced.Computer-based text editing and productiondepartments. circulation, news,market development,humanresources,online the newspapershaveadvertising,business,informationsystems, site-by-site basis. reliable, basichostingtechnologythancouldbeprovidedona duced bythismethod. for shootingremoteshotsofspaceshuttlelaunches. extremely low-light situationsor, inthecaseofFLORIDA TODAY, among the10.Somenewspaperskeep oneortwo filmcamerasfor Nashville, Fort HillandHuntingtonare Myers,ElPaso, Cherry converted tovirtuallyalldigitalphotodepartments.Louisville, major storm.InadditiontoRochester, 10othernewspapers have newspaper plant,thusprovidingreaderswithdramaticphotosofa where theytransmittedphotosfromlaptopcomputerstothe impassable, butphotographerswereabletoworkfromhome during thespring1999snowstorminRochester, N.Y. Roadswere late-breaking photographsintothenewspaper. One example was tal cameras,whichprovidegreaterflexibility and speedingetting ensuring Y2Kcompliancealongwithprovidingmajorupgrades. systems werereplacedfromlate1998throughtheendof1999 plants. Twenty-five editorialsystemsand26classifiedadvertising plate. Thecompanyusespaginationsystemsat67newspaper “ newspaper pagebycomputer, avoidingallorpartof themanual paste-up InfiNet, whichprovidesInternetsitehostingexpertise, enables Classified Ventures, whichcreatessimilarbenefitsinRealEstate Career Path, whichofferstheopportunitytobuildastrong Some examples are: Technological advancesinrecentyearshavehadanimpacton The seniorexecutive ofeachnewspaperisthepublisher, and Gannett newsroomsaremakingthetransitionfromfilmtodigi- ’ ’’ s localemploymentsitesricherforusersand ofthepagebeforeitcanbeconvertedintoaprinting ’ s paperstohavebetter, morecost-efficient, “ Pagination ’ ’’ ’ storiesandthenareusedto s dailynewspapersarepro- enableseditorstocreatea All Gannettnewsroomsnowhavedigitalarchives. Gannett Installation ofa Paulo), PrensaLibre(Guatemala)andKohla deSaoPaulo (Brazil). Newspapers(RioDeJanieroandSao Newspapers (Virginia),Lance The (Ind.)Star, TheUniversityofMissouri, Journal Brazil), Copesa(Santiago,Chile),thePrinceton(N.J.)Packet, The Journal,AmericaOnline,O customersinclude installations intheUnitedStates.Non-Gannett there are5installationsinSouthAmericaand12non-Gannett North andSouthAmerica.InadditiontotheGannettinstallations, Verlagsges.mbH, sellsandinstallsDigitalCollectionssystemsin ofGannettandDigitalCollections DiGiCol, theU.S.subsidiary interface.GMTI,licensedby be searchedusinganeasy-to-use and full-pageimagesofthenewspaperinadigitalformthatcan Tucson. Thesystemstores,retrievesanddistributestext, photos Detroitand Des Moines,Louisville,Honolulu,Wilmington, has beeninstalledat46Gannettnewspapers,includingRochester, rolled outtoallnewspaperdivisionWeb sitesin2000. wasfieldtestedinPalm SpringsandBrevard and willbe CityServer directories andguidesonnewspaperWeb sites.HostedbyInfiNet, provides newspaperswithdatabaseandpublishingtoolstobuild Gannett newspapers.Celebro advertising systemsareinstalledatsixGannettandtwonon- Gannett MediaTechnologies International(GMTI).Celebro auto newspapersby newspapers andatanadditional24non-Gannett Celebro RealEstateSystemhasbeeninstalledat28Gannett properties ontheInternet,andwithaudiotext/fax back.The and contentoftheiradvertisinginthenewspapermarket their enables majorrealestateagentstocontrolthedesign,scheduling pany in1994asAdLink, isasuiteofsoftwareapplicationsthat More newspaperswilldeploypalmtopsin2000. palmtop technologywassuccessfullytestedatfournewspapers. first quarterof2000.In1999,aversionMASSthatrunson more newspapersarescheduledtoimplementthisprocessinthe billing system,ratherthanenteringthisinformationmanually. Four electronically uploadinginsertionordersdirectlyintothebusiness with morethan1,200laptopsdeployed.Eightnewspapersare sales presentations.MASSiscurrentlyinstalledat54newspapers, productivity toolsformanagingtheirschedules;andsoftware Calculatorforpricingads; enue information;anelectronicRate sales executives customer, withup-to-date contractandsalesrev- sales forceautomationsoftware.Thislaptoptechnologyprovides The MobileAdvertising SalesSystem,orMASS,isGannett The DigitalCollectionsintegratedtext/photo archivesystem Celebro Advertising Solutions,originallydevelopedbythecom- ’ s Maryland OperationsCenterwascompletedin1999. s Maryland “ light ” version employing a central server basedat versionemployingacentralserver ’ s newestproduct,CityServer, ’ Globo (RioDeJaniero, ’ s 57 1999 FINANCIALS With respect to newspaper production, 56 daily newspaper Competition: The company’s newspapers compete with other plants print by the offset process, and 15 plants print using vari- media for advertising principally on the basis of their advertising ous letterpress processes. In recent years, improved technology for rates and their performance in helping sell the advertisers’ prod- all of the newspapers has resulted in greater speed and accuracy ucts or services. They compete for circulation principally on the and in a reduction in the number of production hours worked. basis of their content and price. While most of the company’s The company expects this trend to continue in 2000. newspapers do not have daily newspaper competitors that are pub- The principal sources of newspaper revenues are circulation lished in the same city, in certain of the company’s larger markets, and advertising. there is such direct competition. Most of the company’s newspa- Circulation: Sixteen of the company’s local newspapers report- pers compete with other newspapers published in nearby cities ed gains in daily circulation in 1999, and seven increased Sunday and towns and with free distribution and paid advertising week- circulation. Home-delivery prices for the company’s newspapers lies, as well as other print and non-print media. are established individually for each newspaper and range from The rate of development of opportunities in, and competition $1.50 to $2.86 per week in the case of daily newspapers and from from, emerging electronic communications services, including $.71 to $2.35 per copy for Sunday newspapers. The company those related to the Internet and the Web, is increasing. Through implemented circulation price increases at 20 newspapers in 1999 internal development programs, acquisitions and partnerships, the and plans increases at 30 newspapers in 2000. company’s efforts to explore new opportunities in news, informa- Additional information about the circulation of the company’s tion and communications businesses have expanded. newspapers may be found on pages 26-27, 60 and 70-72 of this At the end of 1999, , The Detroit annual report. News, The Honolulu Advertiser and the Tucson (Ariz.) Citizen Advertising: The newspapers have advertising departments that were published under joint operating agreements with non- sell retail, classified and national advertising. The Gannett Retail Gannett newspapers located in the same cities. All of these Advertising Group also sells advertising on behalf of the compa- agreements provide for joint business, advertising, production and ny’s newspapers, other than USA TODAY, to national and regional circulation operations and a contractual division of profits. The retailers and service providers. The company also contracts with editorial and reporting staffs of the company’s newspapers, howev- outside representative firms that specialize in the sale of national er, are separate and autonomous from those of the non-Gannett advertising. A further analysis of newspaper advertising revenues is newspapers. presented on pages 26 and 60 of this report. Properties: Generally, the company owns the plants that house Retail advertising is display advertising associated with local all aspects of the newspaper publication process. In the case of merchants, such as department and grocery stores. Classified USA TODAY, at Dec. 26, 1999, 14 non-Gannett printers were advertising includes ads listed together in sequence by the nature used to print the newspaper in U.S. markets where there are no of the ads, such as automobile sales, real estate sales and “help company newspapers with appropriate facilities. Three non- wanted.” National advertising is display advertising principally Gannett printers in foreign countries are used to print USA from advertisers who are promoting products or brand names TODAY International. USA WEEKEND and Nursing Spectrum also nationally. Retail and national advertising may appear in the news- are printed under contracts with commercial printing companies. paper itself or in preprinted sections. Generally there are different Many of the company’s newspapers also have outside news rates for each category of advertising, and the rates for each news- bureaus and sales offices, which generally are leased. In a few paper are set independently, varying from city to city. cities, two or more of the company’s newspapers share combined The newspapers have made continuing efforts to serve their facilities; and in certain locations, facilities are shared with other readers and advertisers by introducing complete market coverage newspaper properties. The company’s newspaper properties have programs and by targeting specific market segments desired by rail siding facilities or access to main roads for newsprint delivery many advertisers through the use of specially zoned editions and purposes and are conveniently located for distribution purposes. other special publications.

58 pany Agency ( hazardous wastesitesbytheU.S.EnvironmentalProtection disposal siteswhichhavebeensubsequentlyidentifiedasinactive with theallegeddisposalofinkorotherchemicalwastesat included amongthepotentiallyresponsiblepartiesinconnection a varietyofstatutesandrulesregulatingtheenvironment. may createobligationstoprivateandgovernmentalentitiesunder comply withenvironmentallaws.Anyreleaseintotheenvironment tal complianceplan,thecompanyistakingeffectivemeasuresto lated byfederal,stateandlocalagencies.Throughitsenvironmen- and fuels.Theusedisposalofthesesubstancesmayberegu- company 42,000 metrictonsin1989to825,0001999.The its purchaseofnewsprintcontainingsomerecycledcontentfrom leaders intheuseofrecyclednewsprint.Thecompanyincreased but alsopreventivemeasures.Thecompanyisoneoftheindustry compliance manager responsibleforoverseeingnotonlyregulatory operations. Thecompanyemploysacorporateenvironmental rate appropriateenvironmentalpracticesandstandardsinour federal, state,localandforeignenvironmentallawstoincorpo- pany well asimproveproductivityandoperatingefficiencies.Thecom- will helptoimprovetheproductsforitsreadersandadvertisersas in therenovationofexisting ornewfacilitieswheretheinvestment per operations.Gannettcontinuestomake significantinvestments are atsomestageofconstruction23thecompany remodeling ofexisting newspaperfacilitieshavebeencompletedor ment. Thecompany be foundonpages70-73ofthisreport. cant impactonitsfinancialpositionorresultsofoperations. company doesnotbelievethatthesematterswillhaveanysignifi- accordance withgenerallyacceptedaccountingprinciples.The The companyprovidesforcostsassociatedwiththesemattersin believes itsliabilityissubstantiallylessanddefendingthecase. amount incontroversymayexceed $300,000.Thecompany Several ofthecompany Regulation: During thepastfiveyears,neworsubstantialadditions Additional informationaboutthecompany ’ ’ s subsidiariesare s facilitiesareadequateforpresentoperations. “ ’ EPA s newspapersuseinks,photographicchemicals,solvents ” ) orcomparablestateagencies.Generally, thecom- Gannett iscommittedtoprotectingtheenviron- ’ s goalistoensureitsfacilitiescomplywith de minimus ’ s newspapersubsidiarieshavebeen parties. At onesuchsite,the ’ s newspapersmay ’ s newspa- company was ownedin1999,Newsquestcontributedslightlytothe was accountedforunderthepurchasemethod.For theperiodit dailies (10eveningtitlesandonemorningtitle).Theacquisition publishers inEngland,with180publicationstotal,including11 stock ofNewsquestplc,onethelargestregionalnewspaper In thethirdquarterof1999,companypurchasedall Newspapers/England communication businesses. radio andbillboard,Internet-based news,informationand per andmagazinepublishers,other advertisingmediasuchas principal competitorsincludeotherregionalandnationalnewspa- insurance andastockoptionlinked savingsplan. its employeeswitharetirementplanthatincorporateslife management.Newsquestprovides Newsquest subsidiary local staffcouncilsforconsultationandcommunicationwith full-time andpart-timeemployees.Newsquestemployeeshave properties maybefoundonpage74. purposes. AlistingofNewsquestpublishingcentersandkey Morden, Surrey. Allofitspropertiesareadequateforpresent are producedandleasesotherfacilities.Itsheadquartersisin classified andretailadvertisingshoppingservices. information ofspecialinteresttoitscommunities,aswell of localandnationalWeb siteswhichoffernewsandother ship withotherbusinesses,Newsquesthasestablishedanumber offered bytheInternet.Throughinternalgrowthandinpartner- information franchisesthroughdevelopmentofopportunities booking service. anditoffersatravel/vacation leaflets inthecommunitiesitserves Newsquest alsodistributesasubstantialvolumeofadvertising with anattractivelevelofqualitylocaleditorialcontent. Newsquest At theendof1999,Newsquesthad13suchclustersinEngland. markets, thussatisfyingtheneedsofitsadvertisersandaudiences. thesameorcontiguous advertising amongnewspapersserving newspaper alongsideapaid-forallowscross-sellingof The clusteringoftitlesand,usually, thepublicationofafree and advertisersarangeofattractiveproductscoveringthemarket. personnel resources.Thisalsoenablesthegrouptoofferreaders clusters tomaximizetheuseofmanagement,finance,printingand among Newsquest greater volumeandimportanceoffreenon-dailypublications revenue andcirculationisalesserpercentreflectingthe operations, adrevenueatNewsquestisagreaterpercentoftotal account formuchoftheremainder. Comparedto U.S. newspaper 85%. Circulationrevenuesrepresent12%andprintingactivities component ofNewsquest $500 million.AswithU.S.newspapers,advertisingisthelargest Newsquest newspapersoperateincompetitivemarkets. Their At theendof1999,Newsquesthad approximately 5,900 Newsquest ownscertainoftheplantswhereitsnewspapers Newsquest isactivelyseekingtomaximizethevalueofitslocal Newsquest Newsquest managesitspublishingactivitiesaroundgeographic ’ s consolidatedearnings. ’ s policyistoproducefreeandpaid-fornewspapers ’ s fullyearrevenuesfor1999wereinexcess of ’ s titles. ’ s revenue,comprisingapproximately 59 1999 FINANCIALS Key revenue and expense data – for all newspapers combined The company’s ad revenues include revenues from Internet The table that follows summarizes the circulation volume and activities. At this time, the company’s Internet activities are not revenues of U.S. newspapers owned by the company at the end material to results of operations or financial condition taken as of 1999, including USA TODAY. The table also includes circula- a whole. tion revenue for all Newsquest publications and circulation volume For 2000, further ad revenue and volume growth is anticipated for Newsquest’s eleven paid daily newspapers. This table assumes in all categories. Generally modest price increases are planned at that all newspapers owned by the company at the end of 1999 most properties, and the company will continue to expand and were owned during all years shown: refine sales and marketing efforts. Changes in economic factors such as interest rates, employment levels and the rate of general Circulation: newspapers owned on Dec. 26, 1999 economic growth will have an impact on revenue at all of the Circulation Daily Sunday company’s newspapers. revenues net paid net paid in thousands circulation circulation Raw materials: Newsprint is the basic raw material used to 1999 $1,054,077 7,063,000 5,813,000 publish newspapers. During 1999, the company’s total newsprint consumption was 1,033,000 metric tons, including the company’s 1998 $1,062,223 7,126,000 5,942,000 portion of newsprint consumed at joint operating agencies, con- 1997 $1,043,486 7,041,000 6,022,000 sumption by USA WEEKEND, USA TODAY tonnage consumed at 1996 $1,021,982 6,939,000 6,076,000 non-Gannett print sites and consumption by Newsquest. 1995 $ 993,282 6,970,000 6,342,000 Newsprint consumption was up 7% in 1999. The company pur- chases newsprint from 23 North American, European and other The following chart summarizes the advertising linage (in six- offshore suppliers under contracts, which expire at various times column inches) and advertising revenues of the newspapers owned through 2010. by the company at the end of 1999. For Newsquest, advertising During 1999, all of the company’s newspapers consumed some revenues are reflected but linage is not. The chart assumes that all recycled newsprint. For the year, more than 80% of the company’s of the newspapers owned at the end of 1999 were owned through- newsprint purchases contained recycled content. out the years shown: In 1999, newsprint supplies were adequate. The company believes that the available sources of newsprint, together with Advertising: newspapers owned on Dec. 26, 1999 present inventories, will continue to be adequate to supply the Advertising Inches of needs of its newspapers. revenues (ROP) advertising, in thousands excluding preprints The average cost per ton of newsprint consumed in 1999 declined 12% compared to the 1998 average cost. 1999 $3,050,697 83,322,000 1998 $2,890,559 79,406,000 1997 $2,694,339 74,570,000 1996 $2,486,942 69,684,000 1995 $2,338,712 70,383,000

Total newspaper ad revenues on a pro forma basis rose 6% in 1999. Most major advertising classifications showed substantial year-over-year growth during 1999. However, local ad revenues and linage were down slightly (less then 1%) for the full year. Ad spending by larger retailers declined for the year, reflecting closings and consolidations, but this was mostly offset by greater revenue from expanded sales and marketing efforts directed toward small and medium sized advertisers. Classified advertising revenues grew 6% on the strength of the employment, automotive, and real estate categories. National advertising revenues increased 15%. Preprint revenues grew 6%.

60 at areducedlevel.Theamountofthereductionisnotmaterial. continue toreceivecompensationunderthesenewagreements, affiliates andtheywillexpire inDecember2005.Thecompanywill completed negotiationstorenewtheagreementsforits13NBC several havingbeenrenewedin1999.Thecompanyhas affiliatesrunthrough2004-2005, with (Macon) ofitssixCBS agreements whichexpire in2005.Theagreements forallbutone affiliation agreements.Thecompany agreement. ing anamountbasedonthetelevisionstation the networkprogramsandcompensateslocalstationsbypay- sion stations,sellscommercialadvertisingannouncementswithin by eachstation pendent advertisingrepresentatives.Localtimeissold station. Practicallyallnationaladvertisingisplacedthroughinde- bythe and thenumberoftelevisionhouseholdsinareaserved marily uponthestation significant partofitstotalrevenues. tion andtobettercontrolcosts. provide programsthatdistinguish thestationsfromcompeti- produced newsandentertainment programminginaneffortto the company market andinsomecasesfromcableoperations.Inrecentyears, demand fromtheindependentandaffiliatedstationswithin based uponlargelyuncontrollablemarket factors,including operating expenses. Syndicatedprogrammingcostsaredetermined syndicated programmingareasignificantportionoftelevision revenues derivedfromastation such astheproductionofadvertisingmaterial.The payments byadvertiserstotelevisionstationsforotherservices, commercialnetworkprograms;and4) the networksforcarrying of thestations;2)nationaladvertising;3)compensationpaidby are: 1)localadvertisingfocusingontheimmediategeographicarea 15% in1998and16%1997. reported operatingrevenuesfromcontinuingoperationsin1999, revenues accountedforapproximately 14%ofthecompany imately 3,000full-timeandpart-timeemployees.Broadcasting continue toownWTLV-TV, affiliateinJacksonville. theNBC approvalsareobtained.Thecompanyalsowill soon asregulatory affiliateinJacksonville,Fla.ClosingisexpectedABC tooccuras the companyannouncedanagreementtoacquireWJXX-TV, the Sacramento, Calif., pluscashconsideration.InNovember1999, Austin, Texas, andreceivedKXTV-TV, affiliatein theABC action underwhichitexchanged affiliateKVUE-TV itsABC in June 1,1999,thecompanycompletedabroadcaststationtrans- markets withatotalofmorethan17.5millionhouseholds.On headquartered inArlington,Va., included21televisionstationsin On Dec.26,1999,thecompany Broadcasting For allofitsstations,thecompanyispartytonetwork Generally, anetworkprovidesprogramstoitsaffiliatedtelevi- Advertising rateschargedbyatelevisionstationarebasedpri- Programming: The principalsourcesofthecompany At theendof1999,broadcastingdivisionhadapprox- ’ s televisionstationshaveemphasized theirlocally ’ s ownsalesforce. The costsoflocallyproducedandpurchased ’ s abilitytoattractviewers,demographics ’ s localnewsprogramsmake upa ’ s televisiondivision, ’ s two ABC affiliateshave s twoABC ’ s broadcastingrevenues ’ s networkaffiliation ’ s ny (FCC Regulations). (Communications Act), andtherulespoliciesofFCC (FCC) undertheCommunicationsAct of1934,asamended under theauthorityofFederal CommunicationsCommission purposes. 2000. Thecompany additional stationfacilitieswillbeconvertedtoDTVduring (DTV) wascompletedatfivesitesin1998and1999.Four in .Facility expansion toaccommodateDigitalTelevision Columbia andAtlanta. Anewfacilitywillbecompletedin2000 Greensboro, N.C.,LittleRock,Phoenix,Jacksonville,Knoxville, substantial improvementstoexisting facilitieswerecompletedin sites in8others. The companyownstransmittersitesin22locationsandleases televisionbroadcastingequipment. equipped withthenecessary associated withDigitalTelevision. Thecompany Internet enableddevicesandanydigitalspectrumopportunities ing localelectronicmediaspace,whichincludesInternetor and outdooradvertising.Thestationsalsocompeteintheemerg- advertising media,suchascabletelevision,newspapers,magazines and independenttelevisionradiobroadcasterswithother advertising ratesandaudiencecomposition. stations competeprincipallyonthebasisoftheirmarket share, do notdeliveranacceptableviewingsignal. approval signalstrengthmeasurementstandards,thatlocalstations bylocaltelevisionstationsifitisdetermined,usingFCC- served carriers toretransmitdistantnetworktelevisionstationsintoareas sent ofeachtelevisionstation.Thenewlawalsopermitssatellite May 29,2000,satellitecarrierswillberequiredtoobtainthecon- new law. ofanylocalsignalbeyond Inordertocontinue delivery are currentlybeingdeliveredbysatellitecarrierspursuanttothis the stations carriers toretransmitlocaltelevisionstationssubscriberswithin Act of1999wasenacted,whichforthefirsttimepermitssatellite continuing developmentandexpansion. or increasedhomeentertainmentselection,andtheyare havethepotentialofprovidingimprovedsignalreception services satellite andlowpowertelevision.Someofthesecompeting video andaudiorecordersdiscplayers,directbroadcast company ming. Othersourcesofpresentandpotentialcompetitionforthe position isdirectlyaffectedbyvieweracceptanceofthisprogram- the company constitute themajorityofallotherprogrammingbroadcaston to thelocalcommunity. Networkandsyndicatedprogramming is agrowingemphasisonotherformsofprogrammingthatrelate ’ s stationscompeteforrevenueswithothernetwork-affiliated Competition: Properties: Regulation: During thepastfiveyears,newbroadcastingfacilitiesor Local newsismostimportanttoastation In November1999,theSatelliteHomeViewerImprovement ’ s broadcastingpropertiesincludepaycable,home ’ market. Severalofthecompany ’ s televisionstations,andthecompany The company The company In eachofitsbroadcastingmarkets, thecompa- ’ s broadcastfacilitiesareadequateforpresent ’ ’ s broadcastingfacilitiesareadequately s televisionstationsareoperated ’ ’ s televisionstations s success,andthere ’ s broadcasting ’ s competitive 61 1999 FINANCIALS Television broadcast licenses are granted for periods of eight Cable years. They are renewable by broadcasters upon application to the On Jan. 31, 2000, the previously announced sale of the assets of FCC and usually are renewed except in rare cases in which a con- the company’s subsidiary, Multimedia Cablevision, Inc., to Cox flicting application, a petition to deny, a complaint or an adverse Communications, Inc. of Atlanta, Ga., was completed. finding as to the licensee’s qualifications results in loss of the At the end of fiscal 1999, the company’s cable division operat- license. The company believes it is in substantial compliance with ed systems serving 523,000 subscribers in Kansas, all applicable provisions of the Communications Act and FCC Oklahoma and North Carolina, and had approximately 1,100 Regulations. full-time and part-time employees. The principal sources of the FCC Regulations also prohibit concentrations of broadcasting company’s cable division revenues were: 1) monthly fees paid by control and regulate network programming. FCC Regulations subscribers for primary services generally consisting mainly of governing multiple ownership limit, or in some cases, prohibit the local and distant broadcast stations and public, educational and common ownership or control of most communications media governmental channels; 2) monthly and per-event fees; and 3) serving common market areas (for example, television and radio; local advertising revenues. television and daily newspapers; radio and daily newspapers; or The sale price for the cable business was approximately $2.7 television and cable television). In August 1999, the FCC substan- billion in cash, which resulted in an after-tax gain of approximately tially rewrote a number of its broadcast ownership rules, including $740 million or $2.64 per diluted share. The gain will be reported restrictions on local television ownership, radio-television cross- in Gannett’s first quarter, 2000. ownership, and attribution of broadcast ownership interests. One Although the cable sale was finalized in the year 2000, for significant rule change permits common ownership of two televi- financial reporting purposes, the cable operating results for 1999 sion stations in the same market, provided eight independently and all prior years for which it was owned by the company have owned television stations remain in the market following the been reclassified in the statements of income as discontinued combination and provided that at least one of the commonly operations. Likewise for the year 2000, cable operating results for owned stations is not among the market’s top four rated stations. the period up to the sale date, along with the gain on the sale, will It is under this standard that the company has agreed to acquire be reported as discontinued operations. a second television station in the Jacksonville, Fla. market. The FCC’s action removed the interim waivers previously granted to allow the company to own television stations with overlapping signals in the Atlanta and Macon, Ga., markets and in the Portland and Bangor, Maine markets, since such waivers are no longer nec- essary. The FCC also adopted rules to permit common ownership of a number (depending on market size) of radio stations and a televi- sion station serving the same community. The FCC retained its rule prohibiting a party from having attributable interests in televi- sion stations which collectively reach more than 35 percent of all U.S. television households. The FCC will continue to review this limitation as required by Congress. Presently, the company’s 21 television stations reach an aggregate of 17.4% of U.S. TV house- holds. Additional information about the company’s television stations may be found on page 73 of this annual report.

62 completed in2001. Building constructionbeganin1999andisscheduledtobe TODAY andcorporateheadquarters. use asafuturesiteforUSA the companypurchased30acresoflandinFairfax County, Va., for facilities areadequateforpresentoperations.InSeptember1996, equipment andfixturesforheadquartersoperations.Headquarters ed amountsforleaseholdimprovements,land,building,furniture, The capitalexpenditure programfor1997,1998and1999includ- Va., andalsoownsdataprocessingfacilitiesinnearbyMaryland. The companyleasesofficespaceforitsheadquartersinArlington, Corporate facilities company mately 45,800full-timeandpart-timeemployees.Four ofthe At theendof1999,companyanditssubsidiarieshadapproxi- Employee relations ny and employeescontributethebalance.Virtuallyallofcompa- location. Thecompanypaysasubstantialportionofthesecosts insurance programsforfull-timedomesticemployeesateach striking unionsareongoing. at theDetroitNewspapers.Negotiationswithotherformerly unions previouslyonstrike, underwhichitsmemberswillwork was reachedwiththeDetroitTypographical Union,one ofthe 1999,a10-yearagreement its aftermathcontinues.InFebruary Relations Boardandinthefederalcourtsconcerningstrike and positions.LitigationbeforetheNationalLabor fill othernecessary approximately 700replacementworkers havebeenemployedto of theoriginalstrikers havenowreturnedtowork and day.violence, thenewspaperspublishedevery Morethan1,000 ofthenewspapersthroughintimidationandfrequent delivery advertiser boycott. return towork.Theycontinueattemptasubscriberand 1997 whenthesixstrikingunionsmadeanunconditionalofferto increases andpositionlevels.Thestrike endedin mid-February by unrealisticandexcessive demandsbytheunionsforwage ,its agencypartner. Thestrike wasprecipitated per, TheDetroitNews,theNewspaperAgencyand unions beganastrike againstthecompany strives tomaintaingoodrelationshipswithitsemployees. orcompanywidebargaining.Thecompany engage inindustrywide newspaper andbroadcastingindustries.Thecompanydoesnot conform generallywiththepatternoflaboragreementsin unions undercollectivebargainingagreements.Theseagreements by 86localbargainingunitsaffiliatedwithnineinternational subsidiaries arerepresentedbylaborunions.They operations. shareofemployeesatthosejointproductionandbusiness pro-rata and theemploymentnumbersaboveincludecompany non-company newspaperspursuanttojointoperatingagreements, is availabletomostofitsdomesticnon-unionemployees. eligible full-timeemployees. ’ s unitsprovideretirementorprofit-sharingplanswhichcover The companyprovidescompetitivegrouplifeandmedical Throughout thestrike anddespiteunionefforts at stopping On July13,1995,approximately 2,500workers fromsix Approximately 12%ofthoseemployedbythecompanyandits In 1990,thecompanyestablisheda401(k)SavingsPlan,which ’ s newspaperswerepublishedin1999togetherwith ’ s largestlocalnewspa- ’ s 63 1999 FINANCIALS Acquisitions and dispositions 1995-1999 The growth of the company has resulted from acquisitions of businesses, as well as from internal expansion. Its significant acquisitions since the beginning of 1995 are shown below. The company has disposed of several businesses during this period, which are presented on the following page.

Acquisitions 1995-1999 Year acquired Name Location Publication times or business 1995 Multimedia, Inc. Greenville, S.C. Ten daily newspapers, various non-dailies, five television stations, two radio stations, cable television franchises in five states, alarm security business, television entertainment programming 1996 WTSP-TV Tampa-St. Petersburg, Fla. Television station 1997 WZZM-TV Grand Rapids, Mich. Television station WGRZ-TV Buffalo, N.Y. Television station Printed Media Companies Minneapolis, Minn. Commercial printing KNAZ-TV Flagstaff, Ariz. Television station KMOH-TV Kingman, Ariz. Television station Mary Morgan, Inc. Green Bay, Wis. Commercial printing Army Times Publishing Co., Inc. Springfield, Va. Weekly and monthly periodicals New Jersey Press, Inc. Asbury Park and East Brunswick, N.J. Two daily newspapers 1998 WCSH-TV Portland, Maine Television station WLBZ-TV Bangor, Maine Television station WLTX-TV Columbia, S.C. Television station Ocean County Observer Toms River, N.J. Daily newspaper Daily Record Morristown, N.J. Daily newspaper Manahawkin Newspapers Manahawkin, N.J. Weekly newspapers Classified Gazette San Rafael, Calif. Semi-weekly newspaper New Castle County Shopper’s Guide Wilmington, Del. Weekly advertising shopper Brandywine Valley Weekly Wilmington, Del. Weekly advertising shopper Autos plus Wilmington, Del. Weekly advertising shopper TCI Cable Kansas Kansas Cable television systems 1999 The Reporter Melbourne, Fla. Weekly newspaper Lehigh Acres News-Star Lehigh Acres, Fla. Weekly newspaper Dealer Magazine Reno, Nev. Weekly magazine KXTV-TV Sacramento, Calif. Television station Newsquest plc United Kingdom Daily and weekly newspapers Tucker Communications, Inc. Westchester Co., N.Y. Weekly newspaper Pennypower Shopping News Branson & Springfield, Mo. Weekly newspaper

64 1999 Publicationtimesorbusiness 1998 Location 1997 Name 1996 1995 Year disposed Dispositions 1995-1999 VET utn ea Television station Dailynewspaper Austin, Texas Dailynewspaper Cabletelevisionsystems Dailynewspaper Dailynewspaper Dailynewspaper Dailynewspaper station Radio Dailynewspaper Alarmsecuritybusiness stations Radio stations Radio Pomeroy, SuburbanChicago,Ill. Ohio Point Pleasant,W.Va. SanBernardino,Calif. Chillicothe,Ohio Dailynewspaper Gallipolis,Ohio Dailynewspaper Danville,Ill. KVUE-TV Dallas,Texas SaratogaSprings,N.Y. The SanBernardinoCountySun Dailynewspaper Dailynewspaper Dailynewspaper Television station TelevisionMultimedia CableIllinois station Wichita, Kan. ,Texas Point PleasantRegister The DailySentinel stations Chicago,Ill. Radio Gallipolis DailyTribune stations Radio stations Radio Commercial-News Moultrie,Ga. Tarentum, Pa. Multimedia SecurityService OklahomaCity, Okla. St.Thomas,V.I. NiagaraFalls, N.Y. The Saratogian Cincinnati,Ohio NorthHills,Pa. KHKS-FM KKBQ/KKBQ-FM Communitydirectories WGCI/WGCI-FM stations Radio Television entertainmentprogramming The VirginIslandsDailyNews Tampa, Fla. Weekly Polling andresearch advertisingshopper SanDiego,Calif. LosAngeles,Calif. Valley NewsDispatch North HillsNewsRecord The Observer Outdooradvertising Niagara Gazette KOCO-TV WLWT-TV Paramus, N.J. WDAE/WUSA-FM NewYork, N.Y. Macon,Ga. NewYork, N.Y. Columbia,Mo. KSDO/KKBH-FM Various majormarkets, KIIS/KIIS-FM Gannett CommunityDirectories Louis HarrisandAssociates,Inc. Gannett OutdoorGroup WMAZ/WAYS-FM The Add Sheet U.S. andCanada 65 1999 FINANCIALS QUARTERLY STATEMENTS OF INCOME

In thousands of dollars Fiscal year ended December 26, 1999 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Net operating revenues Newspaper advertising $ 720,551 $ 788,274 $ 817,844 $ 966,225 $ 3,292,894 Newspaper circulation 253,357 248,812 255,754 264,597 1,022,520 Broadcasting 161,194 194,480 166,770 206,198 728,642 All other 50,837 48,052 53,193 64,052 216,134 Total 1,185,939 1,279,618 1,293,561 1,501,072 5,260,190 Operating expenses Cost of sales and operating expenses, exclusive of depreciation 635,732 620,682 659,654 692,401 2,608,469 Selling, general and administrative expenses, exclusive of depreciation 187,986 190,525 205,716 224,302 808,529 Depreciation 42,715 42,130 44,325 40,290 169,460 Amortization of intangible assets 22,914 23,170 30,500 34,047 110,631 Total 889,347 876,507 940,195 991,040 3,697,089 Operating income 296,592 403,111 353,366 510,032 1,563,101 Non-operating (expense) income Interest expense (16,592) (13,852) (26,474) (37,701) (94,619) Other 2,368 55,305 (2) 1,588 (556) 58,705 (2) Total (14,224) 41,453 (24,886) (38,257) (35,914) Income before income taxes 282,368 444,564 328,480 471,775 1,527,187 Provision for income taxes 112,400 176,950 130,700 187,750 607,800 Income from continuing operations 169,968 267,614 (2) 197,780 284,025 919,387 (2) Income from discontinued operations, net 8,925 9,356 9,699 10,561 38,541 Net income $ 178,893 $ 276, 970 (2) $ 207,479 $ 294,586 $ 957,928 (2) Basic earnings per share Basic earnings from continuing operations $.61 $.96 (2) $.70 $1.02 $3.29 (2) Basic earnings from discontinued operations, net .03 .03 .04 .04 .14 Net income per share – basic $.64 $.99 (2) $.74 $1.06 $3.43 (2) Diluted earnings per share Diluted earnings from continuing operations (1) $.61 $.95 (2) $.70 $1.01 $3.26 (2) Diluted earnings from discontinued operations, net .03 .03 .04 .04 .14 Net income per share – diluted (1) $.64 $.98 (2) $.74 $1.05 $3.40 (2)

Earnings summary, excluding non-recurring net non-operating gains

In thousands of dollars Fiscal year ended December 26, 1999 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Income from continuing operations, as reported $169,968 $ 267,614 $ 197,780 $ 284,025 $ 919,387 Less: after-tax gains on sale/exchange of businesses 32,780 32,780 Income from continuing operations, as adjusted $169,968 $ 234,834 $ 197,780 $ 284,025 $ 886,607 Diluted earnings per share from continuing operations, as adjusted (1) $.61 $.84 $.70 $1.01 $3.15

(1) As a result of rounding, the total of the four quarters’ earnings per share does not equal the earnings per share for the year. (2) Includes second quarter net gain principally from the exchange of KVUE-TV in Austin, Texas, for KXTV-TV in Sacramento, Calif., ($55 million pre-tax, $33 million after-tax, $.11 per share-basic and diluted).

66 prtn noe 7,2 7,9 9,8 3,0 1,385,814 437,408 298,783 375,296 274,327 Operating income prtos sajse 1 $5 .5$5 .9$2.74 $.89 183,607 $.59 $.75 782,818 $ .12 966,425 $ 248,879 $.53 $ Total 248,879 .12 $3.38(2) $ 168,466 $ .03 4thQuarter $3.41(2) 168,466 $ 305,323(2) 214,346 $.89 3rdQuarter $ .03 33,488 214,346 and $.64pershare-diluted). $ 2ndQuarter .03 $.89 (3,654) (2) Includesfirstquarternetgainonsaleofcertainbusinesses,includingradio andalarmsecurity($307millionpre-tax,$1 $151,127 645,300 (1) Asaresultofrounding,thetotalfourquarters 1stQuarter (79,412) 183,607 $.59 1,611,725 $334,734 operations, asadjusted(1) .03 8,856 (877) Diluted earningspersharefromcontinuing 166,230 $.59 Income fromcontinuingoperations,asadjusted .03 (18,645) 415,109 Less: after-tax gainsonsale/exchange ofbusinesses Income fromcontinuingoperations,asreported $.75 8,053 112,250 Fiscal yearendedDecember27,1998 .03 2,498 (17,190) In thousandsofdollars 280,716 89,687 $.75 .03 206,160 742,538 $1.17(2) summary,Earnings excluding gains non-recurringnetnon-operating 143,100 307,356(2) 8,463 (20,348) 357,446 23,741 $1.18(2) .03 56,579 Net incomepershare 197,526 223,720 Diluted earningsfromdiscontinuedoperations,net (23,229) 558,454 Diluted earningsfromcontinuingoperations(1) 2,498,876 8,116 22,482 pershare Diluted earnings 180,548 49,825 Net incomepershare 1,010,238 631,648 Basic earningsfromdiscontinuedoperations,net 163,776 Basic earningsfromcontinuingoperations 21,733 183,826 $2,942,995 pershare Basic earnings 251,863 48,673 Net income 625,258 Income fromdiscontinuedoperations,net 39,780 818,979 $ Income from 180,638 21,731 continuingoperations 251,534 51,083 Provision forincometaxes 624,414 Income beforeincometaxes 707,347 $ 40,760 Total 252,762 Other 721,298 617,556 Interest expense 746,675 $ (expense) income Non-operating 41,640 Total 254,079 202,682 Total 669,994 $ Amortization ofintangibleassets 4thQuarter Depreciation 41,596 159,125 exclusive ofdepreciation 3rdQuarter Selling, generalandadministrativeexpenses, expenses, exclusive ofdepreciation Cost ofsalesandoperating 2ndQuarter 198,799 Operating expenses 1stQuarter Total All other Broadcasting 160,692 Newspaper circulation Newspaper advertising Net operatingrevenues Fiscal yearendedDecember 27,1998 In thousandsofdollars QUARTERLY STATEMENTS OFINCOME – – diluted(1) basic ’ earningspersharedoesnotequaltheforyear. 4,5()$2289$1659$2775$999,913(2) $ 257,735 $ 176,519 $ 222,809 $ 342,850(2) $ ,3,4 ,4,0 ,6,3 ,3,0 4,880,691 1,330,103 1,167,831 1,246,909 1,135,848 6,2 7,1 6,4 9,9 3,494,877 892,695 869,048 871,613 861,521 8,2 1,5)(807 2,9)225,911 (22,299) (18,067) (17,850) 284,127 334,734(2) 214,346 168,466 248,879 966,425(2) 966,425(2) 248,879 168,466 214,346 334,734(2) 12()$7 .2$9 $3.50(2) $3.53(2) $.92 $.92 $.62 $.62 $.78 $1.20(2) $.78 $1.21(2) 84 millionafter-tax, $.65pershare-basic 67 1999 FINANCIALS SCHEDULES TO FORM 10-K INFORMATION

In thousands of dollars Property, plant and equipment Balance at Balance at Classification beginning of period Additions at cost Retirements or sales Other changes end of period Dec. 28, 1997 Land $ 174,838 $ 2,544 $ 1,435 $ (63) $ 175,884 Buildings and improvements 770,456 73,581 7,265 3,385 840,157 Cable and security systems 481,053 76,574 13,383 3,975 548,219 Machinery, equipment and fixtures 1,926,058 260,814 46,508 (216) 2,140,148 Construction in progress and deposits on contracts 70,995 3,637 17,122 (7,081) 50,429 $ 3,423,400 $ 417,150 (A)(E) $ 85,713 $ 0 $3,754,837 Dec. 27, 1998 Land $ 175,884 $ 7,769 $ 987 $ (1,880) $ 180,786 Buildings and improvements 840,157 10,022 13,790 2,821 839,210 Cable and security systems 548,219 24,218 159,634 256 413,059 Machinery, equipment and fixtures 2,140,148 126,006 140,424 (2,262) 2,123,468 Construction in progress and deposits on contracts 50,429 58,859 133 1,065 110,220 $ 3,754,837 $ 226,874 (B)(E) $314,968 $ 0 $3,666,743 Dec. 26, 1999 Land $ 180,786 $ 5,901 $ 4,853 $ 304 $ 182,138 Buildings and improvements 839,210 83,975 37,189 659 886,655 Cable 413,059 13,680 1,821 (11) 424,907 Machinery, equipment and fixtures 2,123,468 308,547 171,525 (1,128) 2,259,362 Construction in progress and deposits on contracts 110,220 21,810 1,318 138 130,850 $ 3,666,743 $ 433,913 (C)(E) $216,706 $ (38)(D) $3,883,912 Notes (A) Includes assets at acquisition net of adjustments for prior years’ acquisitions. $ 195,899 (B) Includes assets at acquisition net of adjustments for prior years’ acquisitions. $ (17,551) (C) Includes assets at acquisition net of adjustments for prior years’ acquisitions. $ 175,470 (D) Principally the effect of current foreign currency translation adjustment. (E) Includes capitalized interest of $1,624 in 1997, $1,610 in 1998 and $5,707 in 1999. (F) Generally the rates of depreciation range from 2.5% to 10% for buildings and improvements, 3.3% to 20% for cable and 4% to 30% for machinery, equipment and fixtures. (G) Includes depreciation expense from cable and security reflected in earnings from discontinued operations of $31,806 in 1999, $37,907 in 1998 and $48,136 in 1997.

68 Total Other Property Taxes otherthanpayrollandincometax ereddDc 8 97$892$233$68$383$18,020 $19,143 $23,873 $19,714 $(1,240) 618 $ $22,077 $22,333 of period $18,020 1,179,394 Maintenance andrepairs $18,942 345,891 from reserves Fiscal yearended $ 83,106 Supplementary incomestatementinformation(from continuingoperations) 77,675 dispositions 1999 (9,122) 26, Year endedDec. 1,155,609 9,318 Year endedDec. 27,1998 costsandexpenses $ to 324,080 beginning ofperiod Year endedDec.28,1997 $ (3,892) Allowance fordoubtfulreceivables (196) 112,208 (165) 12,941 $ Valuation accounts andqualifying 4,057 5,976 $ Seepage68 (D)(F)(G) 36,369 145,115 56,521 25,434 $ Machinery, equipmentandfixtures 5,148 $ Cable 60,377 1,155,609 Buildings andimprovements 324,080 $ 1999 31,134 26, Dec. 116,327 24,396 $ 32,597 Machinery, equipment andfixtures Cable 83,106 1,095,968 Buildings andimprovements 300,775 $ Dec. 27,1998 Machinery, equipment andfixtures Cable andsecuritysystems Buildings andimprovements Dec. 28,1997 depreciationandamortizationofproperty,Accumulated plantandequipment In thousandsofdollars SCHEDULES TO FORM10-KINFORMATION einn fpro ocssadepne eieet rslsOhrcags endofperiod Otherchanges Retirementsorsales tocostsandexpenses beginning ofperiod 16290$2126()()$4,7 D $1,660,060 (D) 9 $ $144,175 (G) (F) 201,266 $ $1,602,960 4,9 2,5 1,1 503 346,433 $ (5,003) $ $16,511 22,056 $ 345,891 $ ,7,9 5,4 2,2 ,1 1,212,333 5,012 126,421 154,348 1,179,394 15275$2163()G 1158$0$1,602,960 0 $ $161,518 $1,562,795 0 $ (F)(G) 201,683 $ 67,645 $1,562,795 $ (F)(G) 201,100 $ $1,429,340 aac t diin hre o custos eutosBalanceatend Deductions foracquisitions/ charged Additions Balance at aac t Adtoscagd Balanceat charged Additions Balance at 1,4 2,1 ,1 2,8 $30,694 $24,081 9,419 $ $26,213 $19,143 7652,6 ,4 101,294 0 1,243 24,862 77,675 e.2,1999 26, Dec. $33,932 $ $24,898 $45,862 0 9,034 Additions/(reductions) e.2,19 Dec.28,1997 Dec. 27,1998 3,4 $28,673 $18,072 $47,159 $31,843 $22,725 $45,792 918$10,601 $9,118 69 1999 FINANCIALS MARKETS WE SERVE

ADDITIONAL OPERATIONS Newspapers Guam Hawaii Newsquest plc England DAILY NEWSPAPERS (see page 74) USAT PRINT SITES USAT Print Sites GNS BUREAUS England TELEVISION STATIONS Germany Hong Kong

NEWSPAPERS AND NEWSPAPER DIVISION

Daily newspapers State Circulation Joined Territory City Newspaper Morning Afternoon Sunday Founded Gannett Alabama Montgomery 54,659 70,104 1829 1995 (65) Arizona Tucson 40,601 1870 1976 (31) Mountain Home 11,224 1901 1995 (66) California Marin County Marin Independent Journal 39,606 40,494 1861 1980 (49) Palm Springs 51,117 53,422 1927 1986 (59) Salinas The Californian 19,421 1871 1977 (37) Tulare Tulare Advance-Register 8,257 1882 1993 (64) Visalia Visalia Times-Delta 21,906 1859 1977 (38) Colorado Fort Collins 28,584 35,339 1873 1977 (39) Connecticut Norwich Norwich Bulletin 30,086 36,367 1791 1981 (52) Delaware Wilmington The News Journal 124,509 146,125 1871 1978 (44)

70 ho icnai TeCnint nurr2512313414 99(45) 1979 1841 (67) 1995 321,314 1870 71,030 (6) 1943 205,112 1904 Muskogee Daily Phoenix 79,392 57,930 (32) 1977 TheCincinnatiEnquirer (71) 1997 Muskogee 1870 (62) 1990 1879 84,517 62,453 1885 Asheville Citizen-Times Cincinnati 222,215 (35) Oklahoma 1977 (36) 1977 39,297 1893 (54) 1982 1861 Asheville 95,823 Ohio 1897 38,585 67,247 North Carolina 158,397 26,983 Press&Sun-Bulletin (43) 1977 33,722 22,414 (18) 1971 1890 Binghamton 64,867 1900 (61) 41,909 1986 28,441 RenoGazette-Journal 34,407 New York 1868 Park Press Asbury (56) 1985 299,539 (17) 1971 GreatFalls Tribune (16) 1971 1849 SpringfieldNews-Leader 1829 Park Asbury Reno 37,049 1864 254,679 (23) (51) 1981 (10) 1971 1967 25,781 43,839 GreatFalls HattiesburgAmerican 86,584 St.CloudTimes Springfield 1947 (63) 1944 1855 83,846 1993 New Jersey 228,132 Nevada 26,659 21,609 1856 Montana Hattiesburg Missouri St.Cloud 22,549 158,194 188,416 (9) 37,141 1966 BattleCreek Enquirer Mississippi 64,545 TheNews-Star 72,105 Minnesota 1966 TheCourier-Journal 22,422 BattleCreek 112,396 TheDesMoinesRegister 108,543 Monroe Louisville JournalandCourier DesMoines TheIdahoStatesman RockfordRegister Star 88,342 Kentucky TheHonoluluAdvertiser Pacific DailyNews Lafayette Iowa Rockford Boise TheTimes Honolulu Hagatna Illinois Gainesville FLORIDA TODAY Idaho Hawaii Guam BrevardCounty Florida Daily newspapers ertr iyNwpprMrigAtronSna one Gannett Founded Sunday Afternoon NewspaperMorning City Territory State otCitn Nw ead60116 95(29) 1975 (27) 1864 1974 1975(28) 1864 1856 6,031 (4) 1922 (2) 12,205 1912 (1) 1817 1906 14,059 1815 (8) 58,799 1964 (60) 1828 1986 (34) 1977 1829 42,303 1864 1785 175,262 (73) (3) 1918 1998 55,073 1833 (74) 1900 48,157 (7) 1998 1959 (5) 242,218 51,341 1850 1927 (72) 30,175 1875 1997 TheMarietta Times News Herald 18,983 146,141 10,000 1884 98,035 TheNews-Messenger 1879 41,640 42,477 79,260 Port Clinton 17,463 175,134 Marietta Observer-Dispatch 47,221 (53) 1982 Fremont RochesterDemocratandChronicle 10,538 1837 (12) 1970 84,538 News Journal The TheIthacaJournal (58) Westchester 1986 County Star-Gazette 121,335 42,359 1900 (15) 72,763 1971 Utica 1873 Rochester 43,294 (42) 1855 TheDaily Journal 1977 Poughkeepsie Ithaca 31,030 OceanCountyObserver 91,872 1871 Elmira DailyRecord 104,055 89,952 (41) 1977 Vineland HomeNewsTribune 238,445 Courier-Post Toms River 1860 (30) CourierNews 1976 Morristown (20) 1971 East Brunswick 70,147 1831 Hill Cherry 1867 Bridgewater 73,328 23,217 TheClarion-Ledger 22,469 19,454 State Journal Lansing Times Herald Jackson 15,116 (24) 1971 TheDetroitNews (11) 1969 20,206 Port Huron 1884 1889 Lansing TheTimes 106,752 82,385 Detroit IowaCityPress-Citizen Shreveport Palladium-Item Chronicle-Tribune 88,998 Iowa City 62,717 Richmond Marion Pensacola NewsJournal TheNews-Press Pensacola Fort Myers h eri esadFe rs 771,632 The DetroitNewsandFree Press n ie-eort1,4 04118 97 (40) 1977 1888 20,411 19,541 and Times-Democrat iclto Joined Circulation 71 1999 FINANCIALS Daily newspapers State Circulation Joined Territory City Newspaper Morning Afternoon Sunday Founded Gannett Oregon Salem 58,821 66,784 1851 1974 (26) Chambersburg Public Opinion 21,323 1869 1971 (14) Lansdale The Reporter 19,177 1870 1980 (50) Greenville 98,953 133,874 1874 1995 (68) South Dakota Sioux Falls 52,599 74,475 1881 1977 (33) Clarksville The Leaf-Chronicle 20,839 25,318 1808 1995 (69) Jackson 39,654 44,276 1848 1985 (57) Nashville The Tennessean 189,756 269,220 1812 1979 (46) Texas El Paso 76,289 95,876 1879 1972 (25) Vermont Burlington The Burlington Free Press 51,528 62,195 1827 1971 (13) Virginia Arlington USA TODAY 2,274,621 1982 1982 (55) Staunton Leader 18,243 21,838 1904 1995 (70) Washington Bellingham The Bellingham Herald 26,251 33,287 1890 1971 (21) Olympia The Olympian 39,735 45,928 1889 1971 (19) West Virginia Huntington The Herald-Dispatch 36,822 42,869 1909 1971 (22) Wisconsin Green Bay Green Bay Press-Gazette 59,099 84,866 1915 1980 (47) Wausau 23,513 30,843 1903 1980 (48)

Number in parentheses notes chronological order in which existing newspapers joined Gannett.

Army Times Publishing Co. Gannett Media Technologies International Cincinnati, Ohio Headquarters: Springfield, Va. Publications: Army Times, Navy Times, Marine Corps Times, Air Force Gannett Offset Times, Federal Times, Defense News, Space News, Military Market Headquarters: Springfield, Va. Offset sites: Atlanta, Ga.; Chandler, Ariz.; Minneapolis, Minn.; Nursing Spectrum Miramar, Fla.; Nashville, Tenn.; Norwood, Mass.; Olivette, Mo.; Offices: Falls Church, Va. (serving Washington, D.C./); Pensacola, Fla.; Springfield, Va. Hoffman Estates, Ill. (serving Illinois and Indiana); Ft. Lauderdale, Fla. Gannett Offset Marketing Services Group (serving Ft. Lauderdale and Tampa); King of Prussia, Pa. (serving and the Delaware Valley); Westbury, N.Y. (serving New York Gannett Direct Marketing Services, Inc. Louisville, Ky. and New Jersey); Lexington, Mass. (serving states) Gannett TeleMarketing, Inc. Headquarters: Springfield, Va. Non-daily publications Operations: Cambridge, Mass.; Cincinnati, Ohio; Columbia, Mo.; Weekly, semi-weekly or monthly publications in Alabama, Arizona, Arkansas, Louisville, Ky.; Nashville, Tenn.; Silver Spring, Md.; Towson, Md. California, Colorado, Connecticut, Delaware, Florida, Georgia, Guam, Hawaii, Telematch Springfield, Va. Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Jersey, New York, North Gannett Retail Advertising Group Chicago Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia, Wisconsin and Juarez, Mexico Gannett Satellite Information Network Arlington, Va.

USA WEEKEND Gannett News Service Circulation 21.8 million in 563 newspapers Headquarters: Arlington, Va. Headquarters: Arlington, Va. Bureaus: Albany, N.Y.; Baton Rouge, La.; Columbus, Ohio; Harrisburg, Pa.; Indianapolis, Ind.; Olympia, Wash.; Sacramento, Calif.; Advertising offices: Chicago; Detroit; Los Angeles; New York Springfield, Ill.; Tallahassee, Fla.

72 ooao evr UAT Canl9NC ,5,0 921979 1999 1952 1986 1955 1,258,000 1949 1,012,000 Channel9/NBC 1,983,000 Channel10/ABC KUSA-TV Channel9/CBS KXTV-TV WUSA-TV Jacksonville Denver 1955 373,000 Sacramento Channel11/CBS Washington Florida District ofColumbia KTHV-TV Colorado California LittleRock Arkansas ot aoia ouba LXT Canl1/B 4,0 931998 1988 1995 1953 1998 1949 240,000 1948 1954 1983 579,000 1979 1,305,000 131,000 Channel19/CBS 1953 1948 Channel3/NBC Channel2/CBS WLTX-TV Channel2/NBC 1,311,000 1,564,000 WFMY-TV WKYC-TV 416,000 Channel11/NBC WLBZ-TV Channel11/NBC Channel10/NBC Columbia KARE-TV WBIR-TV 461,000 WXIA-TV Greensboro Knoxville Tennessee 1,065,000 Channel2/NBC South Carolina Cleveland 1962 396,000 Minneapolis-St.Paul Channel5/NBC Ohio WGRZ-TV Bangor North Carolina Channel13/ABC KSDK-TV New York Buffalo WZZM-TV St. Louis Missouri Atlanta Minnesota Michigan GrandRapids Maine Georgia New Orleans;Orlando,Fla.;Philadelphia;Phoenix,Ariz.;;Port Washington, N.Y.; St.Louis;SanFrancisco; Seattle; City, Vegas;Indianapolis; Kansas Mo.;Las LosAngeles;Milwaukee; Minneapolis-St.Paul; Miramar, Fla.;Mountainside,N.J.;Nas Salt Lake City;SanBernardino,Calif.;Salt Lake Springfield,Va.; Tarentum, Pa.; WhitePlains,N.Y.; Wilmington,Del. Norwood, Mass.;Olympia,Wash.; Pasadena, Texas; Port Huron,Mich.;Richmond,Ind.;Rockaway, N.J.;St.Cloud,Minn.;Louis Mansfield,Ohio;MarinCounty, Kan.; Calif.; Ill.;Lawrence, Miramar,Gainesville, Ga.;Hattiesburg,Miss.;Kankakee, Fla.;Nas OnNov. 16,1999,GannettenteredintoanagreementwithAllbrittonJacksonvilleInc.toacquireandoperateWJXX-TV, theABC * • Channel2/NBC KNAZ-TV Flagstaff Arizona Television stations USATODAY.com Editorial andadvertisingoffices: USA TODAY BaseballWeekly Advertising offices: International offices: Regional offices: International printsites: Print sites: Headquarters: USA TODAY BROADCASTING continue toownandoperateWTLV-TV, affiliateinJacksonville.ThetransactionissubjecttoFCCand otherapprovals. theNBC Audience numbersfallbelowminimumreportingstandards. Weekly audienceisnumberofTVhouseholds reached,accordingtotheNovember1999Nielsenbook. tt Ct tto hne/ewr Audience Channel/Network Station City State Arlington, Texas; Atlanta; Batavia,N.Y.; BrevardCounty, Fla.;Chandler, Ariz.;Chicago;Columbia,S.C.;Fort Collins,Colo.; Arlington, Va. Atlanta; ;Buffalo,N.Y.; Charlotte,N.C.;Chicago;Cincinnati;Cleveland;Columbus,Ohio; Dallas;Denver;Detroit;Houst Arlington, Va.; Atlanta; Chicago;Dallas;Detroit;London, England;LosAngeles;NewYork; SanFrancisco hei PXT Canl1/B 11800 93 1979 1953 1,128,000 Channel12/NBC Channel6/NBC KPNX-TV KMOH-TV Phoenix Kingman Hong Kong;London,England;Paris, France; Singapore otadWS-VCanl6NC330015 1998 1995 1953 1953 333,000 228,000 1996 Channel6/NBC Channel13/CBS 1965 WCSH-TV 1,168,000 WMAZ-TV Channel10/CBS Portland WTSP-TV Macon Tampa-St. Petersburg Frankfurt, Germany;HongKong;London,England * Arlington, Va. Arlington, Va. Circulation 280,000 TVT Canl1/B 7,0 971988 1957 471,000 Channel 12/NBC WTLV-TV eky Joined Weekly affiliate inJacksonville,Fla.Gannettwillalso • 14 1995 1947 Springfield,Va. 15 1995 1956 hville, Tenn.; Newark,Ohio; 98 1997 1997 1988 1970 94 1997 1954 hville, Tenn.; one Gannett Founded 1994 ; Salisbury, N.C.; 1997 Fort Myers,Fla.; on; 73 1999 FINANCIALS NEWSQUEST PLC

DAILY NEWSPAPERS

SHADED AREA IN MAP TO LEFT REPRESENTS DAILY AND NON-DAILY CIRCULATION AREAS

Daily newspapers Circulation Joined City Newspaper Morning Afternoon Saturday Founded Gannett Basildon Evening Echo 44,342 1969 1999 Blackburn Lancashire Evening Telegraph 43,181 37,207 1886 1999 Bolton Bolton Evening News 41,636 32,927 1867 1999 Bradford Telegraph & Argus 52,766 50,200 1868 1999 Brighton Evening Argus 49,122 46,716 1880 1999 Colchester Evening Gazette 28,551 1970 1999 Darlington 67,822* 67,822* 1870 1999 Oxford Oxford Mail 32,159 29,403 1928 1999 Swindon Evening Advertiser 26,584 22,899 1854 1999 Worcester Worcester Evening News 23,141 19,134 1937 1999 York Evening Press 41,945* 41,945* 1882 1999 * Monday-Saturday inclusive

Non-daily publications North West, Yorkshire, North East, Midlands, South East, South West, Essex, London, South Coast

74 Rockford (Ill.)RegisterStar Rochester (N.Y.) DemocratandChronicle Reno (Nev.) Gazette-Journal Poughkeepsie (N.Y.) Journal Pensacola (Fla.)NewsJournal Calif. Palm Springs, The DesertSun, Wash. Olympia, The Olympian, Nashville The Tennessean, N.J. Morristown, Daily Record, The Montgomery(Ala.) Advertiser Calif.) IndependentJournal Marin (County, Ky. Louisville, The Courier-Journal, Lansing (Mich.)StateJournal Ind. Lafayette, Journal andCourier, The Jackson(Tenn.) Sun Miss. Jackson, The Clarion-Ledger, Iowa City(Iowa)Press-Citizen W.Va. Huntington, The Herald-Dispatch, The Honolulu Advertiser The Greenville(S.C.) News Green Bay(Wis.) Press-Gazette Fla. FortMyers, The News-Press, Fort CollinsColoradoan El Paso (Texas) Times N.Y. Elmira, Star-Gazette, N.J. EastBrunswick, Home News Tribune, The DetroitNews The DesMoinesRegister The CincinnatiEnquirer N.J. CherryHill, Courier-Post, The Burlington(Vt.)FreePress Boise The IdahoStatesman, N.J. Bridgewater, , County Brevard FLORIDA TODAY, N.Y. Binghamton, Press &Sun-Bulletin, The Bellingham(Wash.) Herald Asheville (N.C.) Citizen-Times Asbury Park (N.J.) Press USA WEEKEND USA TODAY NEWSPAPERSNEWSPAPERDIVISION AND informational sitesontheInternet: www.gannett.com. News andinformationaboutGannettisavailableonourWeb site, GANNETT ON THE NET GANNETT ON THE NET The following Gannett properties also offer online services or The followingGannettpropertiesalsoofferonlineservices www.PensacolaNewsJournal.com www.montgomeryadvertiser.com www.democratandchronicle.com www.greenbaypressgazette.com www.burlingtonfreepress.com www.lansingstatejournal.com www.honoluluadvertiser.com www.courierpostonline.com www.binghamtonpress.com www.bellinghamherald.com www.idahostatesman.com www.desertsunonline.com www.courier-journal.com DesMoinesRegister.com www.clarionledger.com www.citizen-times.com www.press-citizen.com www.usaweekend.com www.theolympian.com www.elpasotimes.com www.star-gazette.com www.injersey.com/hnt www.tennessean.com www.news-press.com www.jacksonsun.com www.coloradoan.com www.dailyrecord.com greenvilleonline.com www.pojonews.com www.usatoday.com www.hdonline.com www.flatoday.com www.jconline.com www.injersey.com www.marinij.com www.rrstar.com www.c-n.com detnews.com www.rgj.com enquirer.com Air Force Times Marine Corps Times Navy Times Army Times Del. Wilmington, The NewsJournal, N.Y. Westchester County, The JournalNews, Wausau (Wis.) DailyHerald N.Y. Utica, Observer-Dispatch, Tucson (Ariz.)Citizen N.J. Toms River, Ocean CountyObserver, Springfield (Mo.) News-Leader La. Shreveport, The Times, Ore. Salem, Statesman Journal, Cloud(Minn.) Times St. S.D. SiouxFalls, Argus Leader, UAT,Wsigo,D.C. Washington, WUSA-TV, Fla. Petersburg, Tampa-St. WTSP-TV, Mo. Louis, St. KSDK-TV, Calif. Sacramento, KXTV-TV, Maine Portland, WCSH-TV, Ariz. Phoenix, KPNX-TV, Paul Minneapolis-St. KARE-TV, Ga. Macon, WMAZ-TV, Fla. Jacksonville, WTLV-TV, N.C. Greensboro, WFMY-TV, Denver KUSA-TV, S.C. Columbia, WLTX-TV, Ohio Cleveland, WKYC-TV, Maine Bangor, WLBZ-TV, Atlanta WXIA-TV, BROADCASTING Newsquest MediaGroup NEWSQUEST PLC Gannett Media Technologies International Gannett DirectMarketingServices Nursing Spectrum Military City Space News Defense News Federal Times www.wausaudailyherald.com www.statesmanjournal.com www.injersey.com/observer www.nursingspectrum.com www.delawareonline.com www.ozarksgateway.com www.nyjournalnews.com www.tucsoncitizen.com www.defensenews.com www.airforcetimes.com www.marinetimes.com www.federaltimes.com www.newsquest.co.uk www.nwlouisiana.com www.argusleader.com www.spacenews.com www.militarycity.com www.armytimes.com www.navytimes.com www.13wmaz.com www.wusatv9.com www.12news.com www.sctimes.com www.uticaod.com www.11alive.com www.kare11.com www.9news.com www.wcsh6.com www.gdms.com www.wfmy.com www.wkyc.com www.wtsp.com www.wlbz.com www.ksdk.com www.gmti.com www.wltx.com www.wtlv.com www.kxtv.com 75 1999 FINANCIALS GANNETTGLOSSARY ON OF THE FINANCIAL NET TERMS

Presented below are definitions CURRENT ASSETS – Cash and INVENTORIES – Raw materials, RETAINED EARNINGS – The of certain key financial and other assets that are expected principally newsprint, used in earnings of the company not operational terms that we hope to be converted to cash within the business. paid out as dividends to will enhance your reading and one year. shareholders. understanding of Gannett’s 1999 NEWSPAPER ADVERTISING Annual Report. CURRENT LIABILITIES – REVENUES – Amounts charged STATEMENT OF CASH FLOWS – Amounts owed that will be to customers for space (“adver- A financial statement that ADVERTISING LINAGE – paid within one year. tising linage”) purchased in reflects cash flows from Measurement term for the the company’s newspapers. operating, investing and volume of space sold as DEPRECIATION – A charge There are three major types of financing activities, providing a advertising in the company’s against the company’s earnings advertising revenue: retail ads comprehensive view of changes newspapers; refers to number that allocates the cost of prop- from local merchants, such as in the company’s cash and of column inches, with each erty, plant and equipment over department stores; classified cash equivalents. newspaper page composed of the estimated useful lives of the ads, which include automotive, six columns. assets. real estate and “help wanted”; STATEMENT OF CHANGES IN and national ads, which SHAREHOLDERS’ EQUITY – BALANCE SHEET – A summary DISCONTINUED OPERATION – promote products or brand A statement that reflects statement that reflects the A principal business that has names on a nationwide basis. changes in the common stock, company’s assets, liabilities been sold and is reported retained earnings and other and shareholders’ equity at a separately from continuing OPERATING CASH FLOW – equity accounts. particular point in time. operations in the statement of Operating income adjusted for income. major non-cash expenses, STATEMENT OF INCOME – BROADCASTING REVENUES – depreciation and amortization A financial statement that Primarily amounts charged to DIVIDEND – Payment by the of intangible assets. reflects the company’s profit customers for commercial company to its shareholders of by measuring revenues and advertising aired on the compa- a portion of its earnings. PRO FORMA – A manner of expenses. ny’s television stations as well presentation intended to as radio stations prior to 1998. EARNINGS PER SHARE improve comparability of finan- STOCK INCENTIVE RIGHTS – (BASIC) – The company’s cial results; it assumes business An award that gives key CIRCULATION – The number of earnings divided by the average purchases/dispositions were employees the right to receive newspapers sold to customers number of shares outstanding completed at the beginning of shares of the company’s stock each day (“paid circulation”). for the period. the earliest period discussed without payment at the end The company keeps separate (i.e., results are compared for of an incentive period, condi- records of morning, evening EARNINGS PER SHARE all periods but only for busi- tioned on their continued and Sunday circulation. (DILUTED) – The company’s nesses presently owned). employment throughout the earnings divided by the average incentive period. CIRCULATION REVENUES – number of shares outstanding PURCHASE – A business acqui- Amounts charged to newspaper for the period, giving effect to sition. The acquiring company STOCK OPTION – An award readers or distributors. assumed dilution from out- records at its cost the acquired that gives key employees the Charges vary from city to city standing stock options and assets less liabilities assumed. right to buy shares of the and depend on the type of stock incentive rights. The reported income of an company’s stock at the market sale (i.e., subscription or acquiring company includes price of the stock at the date of single copy) and distributor EXCESS OF ACQUISITION the operations of the acquired the award. arrangements. COST OVER FAIR VALUE company from the date of OF ASSETS ACQUIRED – acquisition. COMPREHENSIVE INCOME – In a business purchase, this The change in equity (net represents the excess of RESULTS OF CONTINUING assets) of the company from amounts paid over fair value of OPERATIONS – A key section transactions and other events tangible assets acquired (also of the statement of income from non-owner sources. referred to as intangible assets which presents operating Comprehensive income com- or goodwill). Generally this results for the company’s prises net income and other cost is written off against oper- principal ongoing businesses items previously reported ations over periods of up to 40 (newspaper and broadcasting). directly in shareholders’ equity, years. (Also see “Purchase.”) principally foreign currency translation adjustment. 76 THIS REPORT WAS WRITTEN AND PRODUCED BY EMPLOYEES OF GANNETT.

Senior Vice President/Public Affairs and Government Relations Mimi Feller

Treasurer and Vice President/ Investor Relations Gracia Martore

Vice President and Controller George Gavagan

Director/Consolidation Accounting and Financial Reporting Wallace Cooney

FINANCIAL SUMMARY•1999 AT A GLANCE SHAREHOLDER SERVICES Director/Public Affairs and Government Relations GANNETT STOCK Tara Connell In thousands, except per share amounts 90 $3170 Gannett Co., Inc. shares are traded on the New York Stock Exchange with the symbol GCI. 1999 1998 Change 91 $3122 The company’s transfer agent and registrar is Norwest Bank Minnesota, N.A. General inquiries and requests Senior Manager/Publications 92 $3228 Operating revenues $5,260,190 $4,880,691 7.8% for enrollment materials for the programs described below should be directed to Norwest’s Shareowner 93 $3411 Laura Dalton Operating income 1,563,101 1,385,814 12.8% 94 $3583 Services, P.O. Box 64854, St. Paul, MN 55164-0854 or by telephone at 1-800-778-3299. Income from continuing 95 $3726 Art Director/Designer operations before 96 $4189 Gannett is pleased to offer the following shareholder services: Michael Abernethy non-recurring gains (1) 886,607 782,818 13.3% 97 $4474 Net non-operating gains 32,780 183,607 — 98 $4881 DIVIDEND REINVESTMENT PLAN Senior Corporate Writer Income from 99 $5260 The Dividend Reinvestment Plan (DRP) provides Gannett shareholders the opportunity to purchase additional Mary Hardie 919,387 continuing operations 966,425 (4.9%) Operating revenues in millions shares of the company’s common stock free of brokerage fees or service charges through automatic Earnings from discontinued reinvestment of dividends and optional cash payments. Cash payments may range from a minimum of $10 to Printing operations, net 38,541 33,488 15.1% 90 $355 a maximum of $5,000 per month. Monroe Litho, Rochester, N.Y. Net income 957,928 999,913 (4.2%) 91 $292 Income per share from 92 $341 AUTOMATIC CASH INVESTMENT SERVICE FOR THE DRP continuing operations before 93 $389 This service provides a convenient, no-cost method of having money automatically withdrawn from your check- non-recurring gains – diluted (1) 3.15 2.74 14.9% Photo Credits: 94 $455 ing or savings account each month and invested in Gannett stock through your DRP account. Income per share from net 95 $457 Cover photograph by Tenley Truxell- non-operating gains – diluted 0.11 0.64 — 96 $503 Svenson, Gannett. Page 2: Curley and DIRECT DEPOSIT SERVICE Income per share from 97 $681 McCorkindale by Truxell-Svenson, continuing operations – diluted 3.26 3.38 (3.5%) 98 $782 Gannett shareholders may have their quarterly dividends electronically credited to their checking or savings Gannett. Page 5: McCorkindale and Brown by Colin Beere. Page 6: Income per share from 99 $886 accounts on the payment date at no additional cost. AmeriCorps by Tamara Reynolds. Page discontinued operations – diluted 0.14 0.12 16.8% Income from continuing operations before net non-operating gains, in millions 7: Ethics by Craig Bailey, FLORIDA Net income per share – diluted 3.40 3.50 (2.8%) FORM 10-K TODAY. Page 9: Henry and Wanninger by Information provided by Gannett in its Form 10-K annual report to the Securities and Exchange Commission has Operating cash flow (2) 1,843,192 1,639,277 12.4% 90 $1.10 Bob Nandell, The Des Moines (Iowa) been incorporated in this report. Copies of the complete Form 10-K annual report may be obtained by writing 91 $.96 Register; Zito by Truxell-Svenson, 92 $1.18 the Secretary, Gannett Co., Inc., 1100 Wilson Blvd., Arlington, VA 22234. Gannett. Page 10: Town Crier by Gary Working capital $ 191,444 $ 178,418 7.3% 93 $1.32 Atkinson, Evening Press. Page 11: Long-term debt 2,463,250 1,306,859 88.5% 94 $1.57 ANNUAL MEETING Reader Holidays by Jim Holden, The 95 $1.62 Total assets 9,006,446 6,979,480 29.0% The annual meeting of shareholders will be held at 10 a.m. Tuesday, May 2, 2000 at Gannett headquarters. Daily Argus. Page 12: Erik Sundvall, USA 96 $1.78 TODAY. Page 13: Baseball Weekly by Capital expenditures (3) 239,438 220,449 8.6% 97 $2.39 FOR MORE INFORMATION Barbara Jean Germano, Baseball Weekly. Shareholders’ equity 4,629,646 3,979,824 16.3% 98 $2.74 News and information about Gannett is available on our Web site (www.gannett.com). Quarterly earnings Page 14: Whatever by Tom Strand. 99 $3.15 Page 15: Gallivan and Demler by Bob Dividends per share .82 .78 5.1% information will be available around the middle of April, July and October 2000. Income per share (diluted) from continuing operations before net non-operating gains Collignon. Page 16: Truxell-Svenson, Shareholders who wish to contact the company directly about their Gannett stock should call Shareholder Average common Gannett. Page 18-20: Dave Leonard, shares outstanding – diluted 281,608 285,711 (1.4%) Services at Gannett headquarters, 703-284-6960. except Moon by Melissa Moore, The (1) Excluding a 1999 net non-operating gain principally from the exchange of KVUE-TV Herald-Dispatch, Huntington, W. Va. in Austin, Texas, for KXTV-TV in Sacramento, Calif., totaling $55 million pre-tax GANNETT HEADQUARTERS and Vega by Robert McKean, Detroit and $33 million after tax ($.11 per share-basic and diluted) and a 1998 net non- Newspapers. operating gain principally from the disposition of several businesses, including 1100 Wilson Boulevard radio and alarm security, totaling $307 million pre-tax and $184 million after tax Arlington, VA 22234 ($.65 per share–basic and $.64 per share–diluted). 703-284-6000 ? Printed on recycled paper (2) Represents operating income plus depreciation and amortization of intangible assets. (3) Excluding capitalized interest and discontinued operations. 77 ANT O,INC. GANNETT CO., GANNETT CO., INC. ANNUAL REPORT ANNUAL 1999 ONE SMART COOKIE s 1999 ANNUAL REPORT 1999 ANNUAL

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