s s GANNETT CO., INC. 7950 JONES BRANCH DRIVE, MCLEAN, VA 22107 Gannett 2003 ANNUAL REPORT TABLE OF TABLE OF CONTENTS SHAREHOLDERS SERVICES 2003 Financial Summary . 1 Gannett Stock THIS REPORT WAS WRITTEN AND PRODUCED BY EMPLOYEES Letter to Shareholders . 2 Gannett Co., Inc. shares are traded on the New York Stock Exchange with the symbol GCI. The company’s transfer agent and registrar is Wells Fargo Bank, N.A. General inquiries OF GANNETT. Board of Directors . 7 and requests for enrollment materials for the programs described below should be directed Vice President and Controller Company and Divisional Officers . 8 to Wells Fargo Shareowner Services, P.O. Box 64854, St. Paul, MN 55164-0854 or by George Gavagan telephone at 1-800-778-3299 or at www.wellsfargo.com/shareownerservices. Assistant Controller Dividend reinvestment plan Frank Spasoff Form 10-K The Dividend Reinvestment Plan (DRP) provides Gannett shareholders the opportunity to purchase additional shares of the company’s common stock free of brokerage fees or Director/Consolidation Accounting service charges through automatic reinvestment of dividends and optional cash payments. and Financial Reporting Cash payments may range from a minimum of $10 to a maximum of $5,000 per month. Leslie Sears Vice President/Corporate Automatic cash investment service for the DRP Communications This service provides a convenient, no-cost method of having money automatically Tara Connell withdrawn from your checking or savings account each month and invested in Gannett stock through your DRP account. Senior Manager/Publications Laura Dalton Direct deposit service Gannett shareholders may have their quarterly dividends electronically credited to their Creative Director/Designer checking or savings accounts on the payment date at no additional cost. Michael Abernethy Printing Annual meeting Monroe Litho, Rochester, N.Y. The annual meeting of shareholders will be held at 10 a.m. Tuesday, May 4, 2004, at Gannett headquarters. Photo Credits: For more information News and information about Gannett is available on our Web site (www.gannett.com). Page 2: McCorkindale by Lisa Quarterly earnings information will be available around the middle of April, July and Hartjen. October 2004. We have posted on this site our principles of corporate governance, ethics policy and Page 5: by Stacey Tate, Gannett. the charters for the audit, nominating and public responsibility and executive compensa- tion committees of our board of directors, and we intend to post updates to these corporate Page 7: Directors’ photos by Stacey governance materials promptly if any changes (including through any amendments or Tate, Gannett. Cover photograph of the Gannett/USA TODAY waivers of the ethics policy) are made. This site also provides access to our annual report headquarters building in McLean, Va., on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K as filed by Timothy Hursley with the SEC. Complete copies of our corporate governance materials and our Form 10-K may be obtained by writing the Secretary, Gannett Co., Inc., 7950 Jones Branch Drive, McLean, VA 22107. Shareholders who wish to contact the company directly about their Gannett stock should call Shareholder Services at Gannett headquarters, 703-854-6960. Gannett Headquarters 7950 Jones Branch Drive McLean, VA 22107 703-854-6000 2003 FINANCIAL SUMMARY Operating revenues in millions In thousands, except per share amounts 99 $5067 2003 2002 Change 00 $6184 Operating revenues . $ 6,711,115 $ 6,422,249 4.5% 01 $6300 Operating income . $ 1,981,018 $ 1,926,309 2.8% 02 $6422 Net income . $ 1,211,213 $ 1,160,128 4.4% 03 $6711 Net income per share – diluted . $ 4.46 $ 4.31 3.5% Income from continuing operations, in millions Operating cash flow (1) . $ 2,212,550 $ 2,148,753 3.0% 99 $919 00 $972 Working capital . $ 261,424 $ 174,454 49.9% 01 $831 Long-term debt . $ 3,834,511 $ 4,547,265 (15.7%) 02 $1160 Total assets . $14,706,239 $13,733,014 7.1% 03 $1211 Capital expenditures (2) . $ 277,909 $ 272,754 1.9% Shareholders’ equity . $ 8,422,981 $ 6,911,795 21.9% Income per share (diluted) from continuing operations Dividends per share . $ .98 $ .94 4.3% 99 $3.26 Weighted average common 00 $3.63 shares outstanding – diluted . 271,872 269,286 1.0% 01 $3.12 02 $4.31 (1) Represents operating income plus depreciation and amortization of 03 $4.46 intangible assets. This measure varies from amounts reported in the audited Consolidated Statements of Cash Flows. (2) Excluding capitalized interest. On Dec. 31, 2001, the company adopted Statement of Financial Accounting Standards No. 142 (SFAS No. 142) “Goodwill and Other Intangible Assets,” which favorably affected comparisons of 2003 and 2002 results with prior years. Refer to the discussion in Note 3 to the company’s financial statements on page 38 of the company’s Form 10-K. COMPANY PROFILE Gannett Co., Inc. is a diversified news and information company that publishes newspapers, operates broadcasting stations and is engaged in marketing, commercial printing, a newswire service, data services and news programming. Gannett is an international company with headquarters in McLean, Va., and operations in 43 states, the District of Columbia, Guam, the United Kingdom, Belgium, Germany, Italy and Hong Kong. Gannett is the USA’s largest newspaper group in terms of circulation. The company’s 100 U.S. daily newspapers have a combined daily paid circulation of 7.6 million. They include USA TODAY, the nation’s largest-selling daily newspaper, with a circulation of approx- imately 2.2 million. In addition, Gannett owns a variety of non-daily publications and USA WEEKEND, a weekly newspaper magazine. Newsquest plc, a wholly owned Gannett subsidiary acquired in mid-1999, is one of the largest regional newspaper publishers in the United Kingdom with a portfolio of more than 300 titles. Its publications include 17 daily newspapers with a combined circulation of approximately 725,000. Newsquest also publishes a variety of non-daily publications, including Berrow’s Worcester Journal, the oldest continuously published newspaper in the world. Gannett owns and operates 22 television stations covering 17.8 percent of the USA. Gannett is an Internet leader with sites sponsored by most of its TV stations and newspapers, including USATODAY.com, one of the most popular news sites on the Web. Gannett was founded by Frank E. Gannett and associates in 1906 and incorporated in 1923. The company went public in 1967. Its more than 272 million outstanding shares of common stock are held by approximately 12,800 shareholders of record in all 50 states and several foreign countries. The company has approximately 53,000 employees. 1 LETTER TO SHAREHOLDERS annett once again demonstrated its strength in 2003. We showed our stamina, our staying power and the quality of our management in the face of yet another year of lackluster advertising demand and a Gtepid economy. We achieved record results: Operating revenues were $6.7 billion; net income rose 4 percent to a record $1.21 billion; operating cash flow advanced 3 percent to $2.2 billion. Diluted earnings per share, on a GAAP basis, were a record $4.46, compared with $4.31 for 2002. These terrific numbers are the result of hard work by Gannett employees. Gannett is a company that does well in good times, and really well in tough times. And 2003 was another tough year for the company, the industry and the nation. It was another chapter in the recession that wouldn’t end. There was the war in Iraq, which captured the nation’s attention and turned it away from a recovery early in the year. Our newspapers, television stations and Internet sites produced some of their best journalism during the intense combat period: We had more than 40 journalists in the region – 23 of them embedded with the troops. We won a number of awards and recognition in the industry. But the home front struggled to keep the economy going and advertising suffered. It is only just now recovering. As the worst of the fighting ended in the spring, we became hopeful that some long-sought changes in government regulations would help jump-start activity in the industry. In June, the Federal Communications Commission finally voted to change the rules that bar ownership of a newspaper and television station in the same market. We believe this rule change will allow us to compete even more effectively with the rest of the fast-paced and growing media world. Unfortunately, the changes were blocked almost immediately by court action and Congress. Acquisition discussions slowed and stopped. Douglas H. McCorkindale, Chairman, President and CEO 2 2003 Congress eventually blessed a partial change, allowing companies to own stations that cover up to 39 percent of the country. But the cross-ownership part of the rule remains on hold by the courts. In the end, we believe the courts will come to the right conclusion, permit cross-ownership and allow us to enter more markets and continue to expand our businesses. Then Congress enacted the Do Not Call Registry. This popular law impacted Gannett, since we tradition- ally have sold about half of our subscriptions through phone solicitation. But we responded in a classically Gannett way. We engaged our talent and creativity and devised new ways to appeal to subscribers. Among them: A pilot program underway in Jackson, Tenn., that took the all-out, “cold-turkey” approach – dropping all telemarketing efforts and seeking out other means of getting customers. Lessons learned are being offered throughout the Newspaper Division. Another change by Congress, to the campaign-finance rules, left parties and candidates confused about what spending they could and could not do.