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Last updated on April 24, 2014 at 5:01 EDT

Gannett Co., Inc. Reports Strong Fourth Quarter Results, Driven by Total Company Revenue Growth of 9 Percent and Non-GAAP Earnings Growth of 20 Percent

February 4, 2013

MCLEAN, Va., Feb. 4, 2013 /PRNewswire/ — Gannett Co., Inc. (NYSE: GCI), a leading international media and marketing solutions company, today reported strong fourth quarter financial results. Earnings per diluted share, on a GAAP (generally accepted accounting principles) basis were $0.44 for the fourth quarter of 2012 compared to $0.49 for the same quarter last year. Excluding special items in both years, fourth quarter earnings per diluted share were $0.89 in 2012 compared to $0.72 in the fourth quarter of 2011, a 23.6 percent increase.

Gracia Martore, President and Chief Executive Officer, said, “We are proud of our strong operating results this quarter with growth in revenue and margin expansion driving strong cash flow. This caps an extremely productive year in which we successfully implemented our strategy to position Gannett for success in the digital era. For the year, we achieved our first year-over-year increase in company-wide revenue since 2006. During the fourth quarter and for the full year, our Broadcasting business delivered record revenue and profitability. Our television stations significantly increased market share this year reflecting the value of their content and format in gaining new viewers while retaining their loyal base. Not to be outdone, local domestic publishing circulation revenue also increased for the third straight quarter driven by the success of our all access content subscription model. We are meeting or exceeding the revenue and operating profit goals we had for the all access content subscription model. Total digital revenue across Gannett increased 29 percent and represented 25 percent of total revenue.

“Our strategy is gaining momentum, our investments are bearing fruit and we are achieving the results we expected. We enter 2013 with our businesses performing well and poised for even greater success going forward. We remain confident we are well positioned to achieve our goals and to continue delivering on our promise to return increased value to shareholders,” Martore said.

Amounts reported in accordance with GAAP are contained in Tables 1 through 4. Certain amounts and comparisons included in the following discussion of GAAP results are supplemented by discussions which exclude the effect of special items. Details of these special items and their effect on GAAP results are included on the Non-GAAP Financial Information Tables 5 through 10 attached to this release. The company’s basis for providing discussions of non-GAAP results is detailed below.

Results for the fourth quarter of 2012 include special charges affecting operating income. Non-cash asset impairments, efficiency-driven facility consolidation and workforce restructuring charges totaled $114.6 million ($101.9 million after tax or $0.44 per share). Non-operating items include a $3.8 million ($2.3 million after tax or $0.01 per share) non-cash charge related to the impairment of a minority owned investment.

Results for the fourth quarter of 2011 included special charges affecting operating income of $78.4 million ($49.0 million after-tax or $0.20 per share). Non-operating items for the fourth quarter of 2011 included special charges related to the impairment of certain minority-owned investments that totaled $28.4 million ($17.2 million after-tax or $0.07 per share). In addition, a special tax benefit of $10.7 million or $0.04 per share was recorded.

CONTINUING OPERATIONS

All of the company’s Publishing and Broadcast results detailed below were impacted by an extra week in 2012 compared to 2011. Results for the year included 53 weeks compared with 52 weeks in 2011. The fourth quarter was comprised of 14 weeks compared with 13 weeks in the same quarter of 2011. The table below details fourth quarter results on a GAAP and non-GAAP basis and excluding the extra week:

    In thousands of dollars, except per share amounts

                                                        Fourteen                        Workforce       Facility           Impact of     Thirteen
                                                       weeks ended                    restructuring   consolidation       extra week    weeks ended
                                                      Dec. 30, 2012                                     and asset                      Dec. 23, 2012
                                                                                                       impairment
                                                                                                         charges
                                                                                                         -------
    Operating income                                                         $220,380               $6,595          $108,013            $(14,647)    $320,341
    Equity income in unconsolidated investees, net                    6,407                       -           3,816                -     10,223
    Interest expense                                                (38,927)                      -              -             2,800    (36,127)
    Total non-operating (expense) income                            (26,474)                      -           3,816             2,800    (19,858)
    Income before income taxes                                      193,906                   6,595         111,829           (11,847)   300,483
    Provision for income taxes                                       78,900                   2,400          11,800            (4,900)    88,200
    Net income                                                      115,006                   4,195         100,029            (6,947)   212,283
    Net income attributable to Gannett Co., Inc.                    103,085                   4,195         100,029            (6,947)   200,362
    Net income per share - diluted                                              $0.44                $0.02             $0.43              $(0.03)       $0.86

Net income attributable to Gannett was $103.1 million in the fourth quarter of 2012. Net income attributable to Gannett on a non-GAAP basis increased 20.2 percent to $207.3 million from $172.4 million in 2011. Operating income totaled $220.4 million in the quarter. Non-GAAP operating income including strategic initiative investments of $14.1 million but excluding special items and the extra week totaled $320.3 million, up 10.2 percent compared to the fourth quarter last year. Operating cash flow in the quarter (a non-GAAP term defined as operating income plus special items, depreciation and amortization) was $384.7 million compared to $339.2 million in the fourth quarter a year ago. Excluding the extra week operating cash flow was up 9.1 percent.

Total operating revenues for the company were $1.52 billion in the fourth quarter, a 9.4 percent increase compared to the fourth quarter last year. A substantial increase in Broadcasting segment revenues, higher Publishing segment revenues as well as the extra week in the quarter drove the increase. The increase in Broadcasting segment revenues reflects a record level of political spending in the quarter. Significantly higher circulation revenue in the Publishing segment resulting from the positive impact of the all access content subscription model more than offset a decline in advertising revenues. Digital segment revenues were up due primarily to revenue growth at CareerBuilder. Excluding the extra week in the quarter, total operating revenues were 4.8 percent higher than the year ago quarter.

Operating expenses including the special charges noted above were $1.30 billion in the quarter, 10.4 percent higher than the fourth quarter in 2011. Special charges, higher costs associated with substantial revenue growth in the Broadcasting segment and the extra week in the quarter contributed to the increase. Strategic initiative investments that totaled $14.1 million and a $5.5 million increase in pension expense were partially offset by continued cost reduction and cost efficiency efforts company-wide. Operating expenses on a non-GAAP basis, which exclude special items but include the impact of the investment in strategic initiatives and pension expense, totaled $1.18 billion. Total operating expenses in the quarter excluding special items and the extra week in the quarter were up 3.4 percent.

Total operating revenues for the full year totaled $5.35 billion compared to $5.24 billion a year ago, an increase of over 2 percent. The increase was driven by substantially higher Broadcast revenues reflecting a record $150 million in political ad spending and $37 million associated with the the Summer Olympic Games. Digital segment revenues were 4.7 percent higher. Publishing segment revenues declined 2.7 percent as a 6.2 percent decline in advertising revenues was partially offset by a 5.0 percent increase in circulation revenues. Digital revenues company-wide were $1.29 billion, an increase of 18.7 percent compared to 2011. Operating expenses totaled $4.56 billion. Operating expenses on a non-GAAP basis were up 2.3 percent reflecting $74.2 million of strategic investments and the extra week in 2012 partially offset by company-wide efficiency efforts. On a non-GAAP basis, operating income in 2012 was $960.4 million, a 1.5 percent increase. Net income attributable to Gannett on the same basis was up 6.3 percent to $551.1 million. Earnings per diluted share were $1.79 on a GAAP basis. On a non-GAAP basis, earnings per diluted share were $2.33 compared to $2.13 in 2011. Operating cash flow totaled $1.15 billion in 2012.

Total operating revenues in 2012 excluding the extra week were up 1 percent. On the same basis, Publishing segment revenues were 4.1 percent lower reflecting a 3.1 percent increase in circulation revenue and a 7.4 percent decline in advertising revenues. Broadcasting segment revenues were 24.1 percent higher. Operating expenses, excluding initiative investment, special items and the extra week, were down 0.5 percent. Operating income on the same basis was up 5.7 percent. The extra week in 2012 contributed approximately $0.03 to diluted earnings per share.

In the first quarter of 2012, the company announced a new capital allocation plan that included a 150 percent increase in the annual dividend to $0.80 per share and a $300 million share repurchase program targeted to be completed over the two years following the announcement. During the fourth quarter the company purchased approximately 2.1 million shares for $37.4 million. Year-to-date, shares repurchased totaled 10.3 million shares for $153.9 million.

PUBLISHING

Publishing segment operating revenues in the quarter were $1.04 billion, 3.7 percent higher than the $1.01 billion in the fourth quarter last year reflecting the extra week in the quarter and an increase in circulation revenues. The growth was offset, in part, by lower advertising revenues as the tepid economic recovery continues to impact advertising demand.

Primarily reflecting the impact of the complete rollout of the all access content subscription model and the extra week in the quarter, circulation revenue company-wide was up 16.8 percent. Excluding the extra week, circulation revenues increased 9.3 percent. Local domestic circulation revenue was 23.6 percent higher. This is the third consecutive quarter of circulation revenue growth as customer response has been very positive.

Advertising revenues totaled $657.5 million compared to $670.7 million in the fourth quarter a year ago, a 2.0 percent decline. Excluding the extra week, advertising revenues were 6.5 percent lower, the best quarterly comparison in 2012. Advertising revenues declined 5.6 percent in October, were down 7.4 percent in November, and were 6.7 percent lower in December, excluding the extra week.

Excluding the extra week in the quarter, retail advertising and classified advertising comparisons were the best quarterly comparisons for the year while comparisons for national advertising lagged third quarter comparisons.

The percentage changes for the Publishing segment advertising revenue categories for the quarter were as follows:

                                     Fourth Quarter 2012 Year-over-Year Comparisons
                                          (including extra week in the quarter)
                                          ------------------------------------

                    U.S.                              Newsquest                        Total             Total
                 Publishing                          (in pounds)                    Publishing        Publishing
               (including USA                                                         Segment           Segment
                   TODAY)                                                            (constant
                                                                                     currency)
                                                                                     --------
    Retail                    (1.5)%                                (1.3)%                     (1.5)%            (1.3)%
    National                  (6.4)%                               (13.0)%                     (6.9)%            (6.8)%
    Classified                  1.8%                                (5.3)%                        -%              0.5%
                              (1.8)%                                (4.7)%                     (2.1)%            (2.0)%
                              -----                                 -----                      -----             -----

The percentage changes in the classified categories were as follows:

                                  Fourth Quarter 2012 Year-over-Year Comparisons
                                     (including the extra week in the quarter)
                                     ----------------------------------------

                   U.S.                         Newsquest                           Total             Total
                Publishing                     (in pounds)                       Publishing        Publishing
                                                                                   Segment           Segment
                                                                                  (constant
                                                                                  currency)
                                                                                  --------
    Automotive               7.3%                             (5.8)%                          5.6%              5.9%
    Employment             (4.4)%                             (0.7)%                        (3.4)%            (2.8)%
    Real Estate            (4.3)%                             (9.1)%                        (6.0)%            (5.3)%
    Legal                   10.3%                               ---                          10.3%             10.3%
    Other                    0.8%                             (5.9)%                        (1.5)%            (0.8)%
                             1.8%                             (5.3)%                           -%              0.5%
                             ---                              -----                           ---               ---

Digital publishing revenues were up 87.1 percent in the quarter reflecting the impact of the all access content subscription model in addition to higher digital advertising and marketing solutions revenue. Digital publishing revenues excluding the extra week were 79.2 percent higher in the quarter. On the same basis, a 100.1 percent increase in digital revenues at our local domestic publishing operations was driven primarily by the all access content subscription model. Digital revenues at USA TODAY and its associated businesses increased 27.9 percent while Newsquest’s digital revenues were up 8.8 percent, in pounds.

Publishing segment operating expenses totaled $914.9 million in the quarter compared to $893.0 million in the fourth quarter last year, an increase of 2.4 percent. Operating expenses in the Publishing segment excluding special items, initiative investment and the extra week were relatively unchanged from the fourth quarter a year ago. Newsprint expense was 1.1 percent lower in the quarter due primarily to lower consumption.

Publishing segment operating income, which includes the impact of strategic investments, was $128.7 million. Publishing segment operating income excluding special items totaled $153.2 million in the quarter and operating cash flow was $182.8 million.

BROADCASTING

Results in the Broadcasting segment (which include Captivate) reflected a record level of fourth quarter revenues and operating results. Operating revenues were $287.5 million in the quarter, up 43.9 percent compared to $199.8 million in the fourth quarter last year. Excluding the extra week, revenues in the Broadcasting segment were 39.0 percent higher. The increase was due primarily to a substantial increase in political advertising that leveraged a combination of strong stations and local news positions, a very good political footprint as well as optimal inventory management. Double digit growth in retransmission revenue contributed to revenue growth as well.

Total television revenues were 45.7 percent higher and totaled $280.2 million compared to $192.4 million in the fourth quarter last year. The revenue growth was driven by $91.2 million in politically related advertising during the fourth quarter of 2012. Retransmission revenues were $29.6 million in the quarter compared to $21.4 million in the fourth quarter a year ago, an increase of 38.7 percent. Television station digital revenues were 4.0 percent higher than the fourth quarter of 2011. Based on current trends, the percentage increase in total television revenues is projected to be up in the high-single digits in the first quarter of 2013 as compared to the first quarter of 2012. First quarter 2013 year-over-year comparisons will be unfavorably impacted by the absence of $5.1 million in political revenue and the move of the Super Bowl from NBC to CBS. Excluding political variances year-to-year, the percentage increase in total television revenues is projected to be up in the 10 to 12 percent range in the first quarter.

Broadcasting segment operating expenses totaled $129.6 million, an increase of 17.7 percent compared to the fourth quarter a year ago. The increase reflects higher sales and marketing costs associated with the substantial increase in revenues and the extra week in the quarter. Broadcasting segment operating expenses excluding special items and the extra week in the quarter were 13.9 percent higher. Record operating income totaled $157.9 million and was 76.0 percent higher than the fourth quarter last year while operating cash flow was 69.4 percent higher and totaled $164.8 million. Operating income excluding special items and the extra week was up 69.4 percent compared to the fourth quarter a year ago. Operating cash flow on the same basis was 64.5 percent higher.

DIGITAL

Results in the Digital segment were not impacted by the extra week in the quarter. Digital segment operating revenues were $187.2 million compared to $181.5 million in the fourth quarter last year. Solid revenue growth at CareerBuilder drove the increase. Digital segment operating expenses were substantially higher due primarily to the special charges. Digital segment operating expenses excluding special items were 3.8 percent higher. On the same basis, operating income totaled $39.0 million. Operating cash flow was up 3.7 percent and totaled $48.4 million.

Digital revenues company-wide, including the Digital segment and all digital revenues generated by the other business segments, were $375.6 million, a 29.4 percent increase from the fourth quarter a year ago. Excluding the extra week, digital revenues company-wide were 26.7 percent higher. The increase was driven primarily by the impact of the all access content subscription model as well as higher revenue associated with digital advertising and marketing solutions across all segments.

At the end of the quarter, Gannett had about 120 domestic web sites affiliated with its local publishing and television markets, USA TODAY, Gannett Government Media and Gannett Healthcare Group. USATODAY.com is one of the most popular newspaper sites and the USA TODAY app is a top news app with 17.4 million downloads across iPad, iPhone, Android, Windows and Kindle Fire. In December, Gannett’s consolidated domestic Internet audience share increased 7.6 percent from December of 2011 to 54.6 million unique visitors reaching 24.7 percent of the Internet audience, according to Comscore Media Metrix. Newsquest is also an Internet leader in the UK where its network of web sites attracted 76.0 million monthly page impressions from approximately 10.1 million unique users in December 2012. CareerBuilder’s unique visitors in the fourth quarter averaged 21.0 million.

NON-OPERATING ITEMS

The company’s equity earnings include its share of operating results from unconsolidated investees including the California Newspapers Partnership, Texas-New Mexico Newspapers Partnership, Tucson newspaper partnership and other online/digital businesses including Classified Ventures.

Equity income in unconsolidated investments was $6.4 million, up $12.2 million compared to the fourth quarter a year ago. Excluding special non-cash charges in the fourth quarters of 2012 and 2011, equity income totaled $10.2 million, an increase of $2.2 million. The increase was due primarily to strong results for Classified Ventures and improved results in our newspaper partnerships.

Interest expense was $38.9 million compared to $40.8 million in the fourth quarter last year. The decline was due to lower average debt balances partially offset by higher average interest rates and the extra week in the quarter.

Other non-operating income totaled $6.0 million for the quarter, an increase of $20.9 million from the fourth quarter last year. The increase reflects the gain on an investment in the fourth quarter this year and $14.5 million of non-cash impairment charges for minority-owned cost method businesses in the fourth quarter a year ago. Excluding non-cash impairment charges, other non-operating income was $6.4 million higher compared to the fourth quarter last year.

Net cash flow from operating activities was $258.0 million, while free cash flow (a non-GAAP measure) totaled $248.1 million in the quarter. The balance of long term debt at quarter end was $1.43 billion. Total cash at the end of the quarter was $175.0 million.

USE OF NON-GAAP INFORMATION

The company uses non-GAAP financial performance and liquidity measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures are not to be considered in isolation from or as a substitute for the related GAAP measures, and should be read only in conjunction with financial information presented on a GAAP basis.

In this earnings report, the company discusses non-GAAP financial performance measures that exclude from its reported GAAP results the impact of special items consisting of workforce restructuring charges, facility consolidation expenses, non-cash impairment charges, incremental charges associated with the the company’s former chairman and chief executive officer’s disability related retirement, pension settlement charges and certain credits to its income tax provision. The company believes that such expenses and credits are not indicative of normal, ongoing operations and their inclusion in results makes for more difficult comparisons between periods and with peer group companies. Workforce restructuring and facility consolidation expenses primarily relate to incremental expenses the company has incurred to consolidate or outsource production processes and centralize other functions. These expenses include payroll and related benefit costs and accelerated depreciation. Non-cash impairment charges were recorded in 2012 and 2011 to reduce the book value of certain intangible assets and investments accounted for under the equity and cost methods to fair value, as the businesses underlying these assets had experienced significant and sustained unfavorable operating results. The pension settlement charges result from the acceleration of expense related to the timing of certain pension payments. Full year results include credits to the tax provision related primarily to tax settlements covering multiple years. The company also recorded in the fourth quarter of 2011 a special tax benefit for deductible stock basis relating to prior year business impairment charges for which no tax benefit could have been previously taken.

The company also discusses operating cash flow, a non-GAAP financial performance measure that it believes offers a useful view of the overall operation of its businesses. This non-GAAP measure is calculated by adding amounts associated with the special expense items described above, as well as depreciation and amortization, to operating income as reported on a GAAP basis. This earnings report also discusses free cash flow, a non-GAAP liquidity measure. Free cash flow is defined as “net cash flow from operating activities” as reported on the statement of cash flows reduced by “purchase of property, plant and equipment” as well as “payments for investments” and increased by “proceeds from investments.” The company believes that free cash flow is a useful measure for management and investors to evaluate the level of cash generated by operations and the ability of its operations to fund investments in its businesses, repay indebtedness, add to the company’s cash balance, or use in other discretionary activities. Management uses free cash flow to monitor cash available for repayment of indebtedness and in its discussions with the investment community.

Management uses non-GAAP financial performance measures for purposes of evaluating business unit and consolidated company performance. The company therefore believes that each of the non-GAAP measures presented provides useful information to investors by allowing them to view the company’s businesses through the eyes of management and the Board of Directors, facilitating comparison of results across historical periods, and providing a focus on the underlying ongoing operating performance of its businesses. In addition, many of the company’s peer group companies present similar non-GAAP measures so the presentation of such measures facilitates industry comparisons.

Tabular reconciliations for the non-GAAP financial measures are contained in Tables 5 through 10 attached to this news release.

As previously announced, the company will hold an earnings conference call at 10:00 a.m. ET today. The call can be accessed via a live webcast through the company’s web site, www.gannett.com, or listen-only conference lines. U.S. callers should dial 1-888-572-7026 and international callers should dial 719-457-2674 at least 10 minutes prior to the scheduled start of the call. The confirmation code for the conference call is 4766645. To access the replay, dial 1-888-203-1112 in the U.S. International callers should use the number 719-457-0820. The confirmation code for the replay is 4766645. Materials related to the call will be available through the Investor Relations section of the company’s web site Monday morning.

About Gannett
Gannett Co., Inc. is an international media and marketing solutions company that informs and engages more than 100 million people every month through its powerful network of broadcast, digital, mobile and publishing properties. Our portfolio of trusted brands offers marketers unmatched local-to-national reach and customizable, innovative marketing solutions across any platform. Gannett is committed to connecting people – and the companies who want to reach them – with their interests and communities. For more information, visit www.gannett.com.

Certain statements in this press release may be forward looking in nature or “forward looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The forward looking statements contained in this press release are subject to a number of risks, trends and uncertainties that could cause actual performance to differ materially from these forward looking statements. A number of those risks, trends and uncertainties are discussed in the company’s SEC reports, including the company’s annual report on Form 10-K and quarterly reports on Form 10-Q. Any forward looking statements in this press release should be evaluated in light of these important risk factors.

Gannett is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this press release by wire services, Internet service providers or other media.

    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    Gannett Co., Inc. and Subsidiaries
    Unaudited, in thousands (except per share amounts)

    Table No. 1
                                                       Fourteen               Thirteen       % Increase
                                                     weeks ended             weeks ended     (Decrease)
                                                    Dec. 30, 2012           Dec. 25, 2011
                                                    -------------           -------------
    Net operating
     revenues:
    Publishing advertising                                         $657,546                           $670,749             (2.0)
    Publishing circulation                                313,113                   268,145                     16.8
    Digital                                               187,249                   181,500                      3.2
    Broadcasting                                          287,511                   199,835                     43.9
    All other                                              72,890                    67,526                      7.9
                                                           ------                    ------
    Total                                               1,518,309                 1,387,755                      9.4
                                                        ---------                 ---------                      ---

    Operating expenses:
    Cost of sales and
     operating expenses,
     exclusive of
     depreciation                                         779,777                   782,040                     (0.3)
    Selling, general and
     administrative
     expenses, exclusive
     of depreciation                                      360,422                   331,741                      8.6
    Depreciation                                           40,426                    40,768                     (0.8)
    Amortization of
     intangible assets                                      9,291                     7,753                     19.8
    Facility consolidation
     and asset impairment
     charges                                              108,013                    13,193                           ***
                                                          -------                    ------
    Total                                               1,297,929                 1,175,495                     10.4
    Operating income                                      220,380                   212,260                      3.8
                                                          -------                   -------                      ---

    Non-operating
     (expense) income:
    Equity income (loss)
     in unconsolidated
     investees, net                                         6,407                    (5,797)                          ***
    Interest expense                                      (38,927)                  (40,831)                    (4.7)
    Other non-operating
     items                                                  6,046                   (14,854)                          ***
                                                            -----                   -------
    Total                                                 (26,474)                  (61,482)                   (56.9)
                                                          -------                   -------                    -----

    Income before income
     taxes                                                193,906                   150,778                     28.6
    Provision for income
     taxes                                                 78,900                    26,100                           ***
                                                           ------                    ------
    Net income                                            115,006                   124,678                     (7.8)
    Net income
     attributable to
     noncontrolling
     interests                                            (11,921)                   (7,738)                    54.1
                                                          -------                    ------
    Net income
     attributable to
     Gannett Co., Inc.                                             $103,085                           $116,940            (11.8)
                                                                   ========                           ========            =====

    Net income per share -
     basic                                                            $0.45                              $0.49             (8.2)
    Net income per share -
     diluted                                                          $0.44                              $0.49            (10.2)

    Weighted average
     number of common
     shares outstanding:
    Basic                                                 229,368                   237,219                     (3.3)
    Diluted                                               233,980                   240,419                     (2.7)

    Dividends declared per
     share                                                            $0.20                              $0.08              ***

    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    Gannett Co., Inc. and Subsidiaries
    Unaudited, in thousands (except per share amounts)

    Table No. 2
                                                     Fifty-three                Fifty-two      % Increase
                                                     weeks ended               weeks ended     (Decrease)
                                                    Dec. 30, 2012             Dec. 25, 2011
                                                    -------------             -------------
    Net operating
     revenues:
    Publishing advertising                                         $2,355,922                          $2,511,025            (6.2)
    Publishing circulation                              1,117,042                   1,063,890                       5.0
    Digital                                               718,949                     686,471                       4.7
    Broadcasting                                          906,104                     722,410                      25.4
    All other                                             255,180                     256,193                      (0.4)
                                                          -------                     -------
    Total                                               5,353,197                   5,239,989                       2.2
                                                        ---------                   ---------                       ---

    Operating expenses:
    Cost of sales and
     operating expenses,
     exclusive of
     depreciation                                       2,943,847                   2,961,097                      (0.6)
    Selling, general and
     administrative
     expenses, exclusive
     of depreciation                                    1,303,427                   1,223,485                       6.5
    Depreciation                                          160,746                     165,739                      (3.0)
    Amortization of
     intangible assets                                     33,293                      31,634                       5.2
    Facility consolidation
     and asset impairment
     charges                                              122,129                      27,243                            ***
                                                          -------                      ------
    Total                                               4,563,442                   4,409,198                       3.5
    Operating income                                      789,755                     830,791                      (4.9)
                                                          -------                     -------                      ----

    Non-operating
     (expense) income:
    Equity income in
     unconsolidated
     investees, net                                        22,387                       8,197                            ***
    Interest expense                                     (150,469)                  (173,140)                     (13.1)
    Other non-operating
     items                                                  8,734                     (12,921)                           ***
                                                            -----                     -------
    Total                                                (119,348)                  (177,864)                     (32.9)
                                                         --------                    --------                     -----

    Income before income
     taxes                                                670,407                     652,927                       2.7
    Provision for income
     taxes                                                195,400                     152,800                      27.9
                                                          -------                     -------
    Net income                                            475,007                     500,127                      (5.0)
    Net income
     attributable to
     noncontrolling
     interests                                            (50,727)                    (41,379)                     22.6
                                                          -------                     -------
    Net income
     attributable to
     Gannett Co., Inc.                                               $424,280                            $458,748            (7.5)
                                                                     ========                            ========            ====

    Net income per share -
     basic                                                              $1.83                               $1.92            (4.7)
    Net income per share -
     diluted                                                            $1.79                               $1.89            (5.3)

    Weighted average
     number of common
     shares outstanding:
    Basic                                                 232,327                     239,228                      (2.9)
    Diluted                                               236,690                     242,768                      (2.5)

    Dividends declared per
     share                                                              $0.80                               $0.24             ***

    BUSINESS SEGMENT INFORMATION
    Gannett Co., Inc. and Subsidiaries
    Unaudited, in thousands of dollars

    Table No. 3
                                                      Fourteen                                      Thirteen                            % Increase
                                                    weeks ended                                    weeks ended                          (Decrease)
                                                   Dec. 30, 2012                                  Dec. 25, 2011
                                                   -------------                                  -------------
    Net operating revenues:
    Publishing                                                                     $1,043,549                                                  $1,006,420                      3.7
    Digital                                              187,249                                         181,500                                               3.2
    Broadcasting                                         287,511                                         199,835                                              43.9
    Total                                                                          $1,518,309                                                  $1,387,755                      9.4
                                                                                   ==========                                                  ==========                      ===

    Operating income (net of
     depreciation, amortization
     and facility consolidation
     and asset impairment
     charges):
    Publishing                                                                       $128,662                                                    $113,398                     13.5
    Digital                                              (51,006)                                         38,732                                                       ***
    Broadcasting                                         157,935                                          89,724                                              76.0
    Corporate                                            (15,211)                                       (29,594)                                             (48.6)
    Total                                                                            $220,380                                                    $212,260                      3.8
                                                                                     ========                                                    ========                      ===

    Depreciation, amortization and
     facility consolidation and
     asset impairment charges:
    Publishing                                                                        $47,524                                                     $42,160                     12.7
    Digital                                               99,364                                           7,892                                                       ***
    Broadcasting                                           6,894                                           6,884                                               0.1
    Corporate                                              3,948                                           4,778                                             (17.4)
    Total                                                                            $157,730                                                     $61,714                      ***
                                                                                     ========                                                     =======                      ===

    Operating cash flow:
    Publishing                                                                       $176,186                                                    $155,558                     13.3
    Digital                                               48,358                                          46,624                                               3.7
    Broadcasting                                         164,829                                          96,608                                              70.6
    Corporate                                            (11,263)                                       (24,816)                                             (54.6)
    Total                                                                            $378,110                                                    $273,974                     38.0
                                                                                     ========                                                    ========                     ====

    Operating cash flow represents operating income from each of the company's business segments plus related depreciation, amortization and facility consolidation and asset
     impairment charges. See Table No. 9 for reconciliation of amounts to the Condensed Consolidated Statements of Income.

    BUSINESS SEGMENT INFORMATION
    Gannett Co., Inc. and Subsidiaries
    Unaudited, in thousands of dollars

    Table No. 4
                                                    Fifty-three                                     Fifty-two                           % Increase
                                                    weeks ended                                    weeks ended                          (Decrease)
                                                   Dec. 30, 2012                                  Dec. 25, 2011
                                                   -------------                                  -------------
    Net operating revenues:
    Publishing                                                                     $3,728,144                                                  $3,831,108                      (2.7)
    Digital                                              718,949                                         686,471                                               4.7
    Broadcasting                                         906,104                                         722,410                                              25.4
    Total                                                                          $5,353,197                                                  $5,239,989                       2.2
                                                                                   ==========                                                  ==========                       ===

    Operating income (net of
     depreciation, amortization
     and facility consolidation
     and asset impairment
     charges):
    Publishing                                                                       $368,644                                                    $477,583                     (22.8)
    Digital                                               41,700                                         125,340                                             (66.7)
    Broadcasting                                         443,808                                         302,140                                              46.9
    Corporate                                            (64,397)                                       (74,272)                                             (13.3)
    Total                                                                            $789,755                                                    $830,791                      (4.9)
                                                                                     ========                                                    ========                      ====

    Depreciation, amortization and
     facility consolidation and
     asset impairment charges:
    Publishing                                                                       $147,750                                                    $148,537                      (0.5)
    Digital                                              123,990                                          30,693                                                       ***
    Broadcasting                                          28,007                                          28,926                                              (3.2)
    Corporate                                             16,421                                          16,460                                              (0.2)
    Total                                                                            $316,168                                                    $224,616                      40.8
                                                                                     ========                                                    ========                      ====

    Operating cash flow:
    Publishing                                                                       $516,394                                                    $626,120                     (17.5)
    Digital                                              165,690                                         156,033                                               6.2
    Broadcasting                                         471,815                                         331,066                                              42.5
    Corporate                                            (47,976)                                       (57,812)                                             (17.0)
    Total                                                                          $1,105,923                                                  $1,055,407                       4.8
                                                                                   ==========                                                  ==========                       ===

    Operating cash flow represents operating income from each of the company's business segments plus related depreciation, amortization and facility consolidation and asset
     impairment charges. See Table No. 9 for reconciliation of amounts to the Condensed Consolidated Statements of Income.

    NON-GAAP FINANCIAL INFORMATION
    Gannett Co., Inc. and Subsidiaries
    Unaudited, in thousands of dollars (except per share amounts)

    The company uses non-GAAP financial performance and liquidity measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures are not to be considered in isolation from or as a substitute for the related GAAP measures and should be read only in conjunction with financial information presented on a GAAP basis.

    Tables No. 5 through No. 10 reconcile these non-GAAP measures to the most directly comparable GAAP measure.

    Table No. 5
                                                                                                                                                   GAAP                          Special Items                                 Non-GAAP
                                                                                                                                                  Measure                                                                    Measure
                                                                                                                                                  -------                                                                    -------
                                                                                                                                                 Fourteen                   Workforce                   Facility                   Fourteen
                                                                                                                                               weeks ended               restructuring                consolidation              weeks ended
                                                                                                                                              Dec. 30, 2012                                             and asset               Dec. 30, 2012
                                                                                                                                                                                                        impairment
                                                                                                                                                                                                         charges

    Cost of sales and operating expenses, exclusive of depreciation                                                                                           $779,777                                       $(5,909)                                    $                 -                                                      $773,868
    Selling, general and administrative expenses, exclusive of depreciation                                                                         360,422                          (686)                                    -                                      359,736
    Facility consolidation and asset impairment charges                                                                                             108,013                             -                             (108,013)                                            -
    Operating expenses                                                                                                                            1,297,929                        (6,595)                            (108,013)                                    1,183,321
    Operating income                                                                                                                                220,380                         6,595                               108,013                                      334,988
    Equity income in unconsolidated investees, net                                                                                                    6,407                             -                                 3,816                                       10,223
    Total non-operating (expense) income                                                                                                            (26,474)                            -                                 3,816                                      (22,658)
    Income before income taxes                                                                                                                      193,906                         6,595                               111,829                                      312,330
    Provision for income taxes                                                                                                                       78,900                         2,400                                11,800                                       93,100
    Net income                                                                                                                                      115,006                         4,195                               100,029                                      219,230
    Net income attributable to Gannett Co., Inc.                                                                                                    103,085                         4,195                               100,029                                      207,309
    Net income per share - diluted                                                                                                                               $0.44                                         $0.02                                                   $0.43                                                         $0.89

                                                                                                                                                   GAAP                                                    Special                                                             Non-GAAP
                                                                                                                                                  Measure                                                   Items                                                               Measure
                                                                                                                                                  -------                                                   -----                                                               -------
                                                                                                                                                 Thirteen                   Workforce                   Facility                   Former                   Tax benefit of               Thirteen
                                                                                                                                               weeks ended               restructuring                consolidation             Chairman and                business stock             weeks ended
                                                                                                                                              Dec. 25, 2011                                             and asset                    CEO                       deduction              Dec. 25, 2011
                                                                                                                                                                                                        impairment               incremental
                                                                                                                                                                                                         charges                  retirement
                                                                                                                                                                                                                                   charges
                                                                                                                                                                                                                                                                                                ---
    Cost of sales and operating expenses, exclusive of depreciation                                                                                           $782,040                                      $(46,468)                                    $                 -                                   $                         -                               $      -  $735,572
    Selling, general and administrative expenses, exclusive of depreciation                                                                         331,741                        (3,984)                                    -                                      (14,738)                                  -                                       313,019
    Facility consolidation and asset impairment charges                                                                                              13,193                             -                               (13,193)                                           -                                   -                                             -
    Operating expenses                                                                                                                            1,175,495                      (50,452)                               (13,193)                                     (14,738)                                  -                                     1,097,112
    Operating income                                                                                                                                212,260                        50,452                                13,193                                       14,738                                   -                                       290,643
    Equity income (loss) in unconsolidated investees, net                                                                                            (5,797)                            -                                13,862                                            -                                   -                                         8,065
    Other non-operating items                                                                                                                       (14,854)                            -                                14,529                                            -                                   -                                          (325)
    Total non-operating (expense) income                                                                                                            (61,482)                            -                                28,391                                            -                                   -                                       (33,091)
    Income before income taxes                                                                                                                      150,778                        50,452                                41,584                                       14,738                                   -                                       257,552
    Provision for income taxes                                                                                                                       26,100                        19,400                                15,300                                        5,900                              10,700                                        77,400
    Net income                                                                                                                                      124,678                        31,052                                26,284                                        8,838                             (10,700)                                      180,152
    Net income attributable to Gannett Co., Inc.                                                                                                    116,940                        31,052                                26,284                                        8,838                             (10,700)                                      172,414
    Net income per share - diluted (a)                                                                                                                           $0.49                                         $0.13                                                   $0.11                                                         $0.04                                 $(0.04)    $0.72

    (a) Total per share amount does not sum due to rounding.

    NON-GAAP FINANCIAL INFORMATION
    Gannett Co., Inc. and Subsidiaries
    Unaudited, in thousands of dollars (except per share amounts)

    Table No. 6
                                                                                 GAAP                                    Special Items                                            Non-GAAP
                                                                                Measure                                                                                            Measure
                                                                                -------                                                                                            -------
                                                                             Fifty-three                  Workforce         Facility                  Pension        Special tax                Fifty-three
                                                                             weeks ended                restructuring     consolidation             settlement        benefits                  weeks ended
                                                                            Dec. 30, 2012                                 and asset                 charges                                Dec. 30, 2012
                                                                                                                          impairment
                                                                                                                           charges

    Cost of sales and operating expenses, exclusive of depreciation                        $2,943,847                         $(34,679)                        $                -                           $      -                      $      -              $2,909,168
    Selling, general and administrative expenses, exclusive of depreciation     1,303,427                       (5,891)                         -                          (7,946)                          -                  1,289,590
    Facility consolidation and asset impairment charges                           122,129                            -                  (122,129)                               -                           -                          -
    Operating expenses                                                          4,563,442                     (40,570)                  (122,129)                          (7,946)                          -                  4,392,797
    Operating income                                                              789,755                       40,570                    122,129                           7,946                           -                    960,400
    Equity income in unconsolidated investees, net                                 22,387                            -                      7,036                               -                           -                     29,423
    Total non-operating (expense) income                                         (119,348)                           -                      7,036                               -                           -                  (112,312)
    Income before income taxes                                                    670,407                       40,570                    129,165                           7,946                           -                    848,088
    Provision for income taxes                                                    195,400                       15,900                     18,700                           3,200                      13,100                    246,300
    Net income                                                                    475,007                       24,670                    110,465                           4,746                     (13,100)                   601,788
    Net income attributable to Gannett Co., Inc.                                  424,280                       24,670                    110,465                           4,746                     (13,100)                   551,061
    Net income per share - diluted (a)                                                          $1.79                            $0.10                                      $0.47                              $0.02                        $(0.06)                  $2.33

                                                                                 GAAP                                                 Special Items                                         Non-GAAP
                                                                                Measure                                                                                                      Measure
                                                                                -------                                                                                                      -------
                                                                              Fifty-two                  Workforce        Facility                  Former       Prior year tax            Tax benefit of                Fifty-two
                                                                             weeks ended              restructuring     consolidation               Chairman         reserve               business stock               weeks ended
                                                                            Dec. 25, 2011                                 and asset                 and CEO       adjustments,               deduction                Dec. 25, 2011
                                                                                                                          impairment              incremental          net
                                                                                                                           charges                retirement
                                                                                                                                                    charges
                                                                                                                                                                                                                    ---
    Cost of sales and operating expenses, exclusive of depreciation                        $2,961,097                         $(66,145)                        $                -                           $      -                      $      -            $          -  $2,894,952
    Selling, general and administrative expenses, exclusive of depreciation     1,223,485                       (7,751)                         -                         (14,738)                          -                          -            1,200,996
    Facility consolidation and asset impairment charges                            27,243                            -                    (27,243)                              -                           -                          -                    -
    Operating expenses                                                          4,409,198                     (73,896)                    (27,243)                        (14,738)                          -                          -            4,293,321
    Operating income                                                              830,791                       73,896                     27,243                          14,738                           -                          -              946,668
    Equity income in unconsolidated investees, net                                  8,197                            -                     15,739                               -                           -                          -               23,936
    Other non-operating items                                                     (12,921)                           -                     14,529                               -                           -                          -                1,608
    Total non-operating (expense) income                                         (177,864)                           -                     30,268                               -                           -                          -            (147,596)
    Income before income taxes                                                    652,927                       73,896                     57,511                          14,738                           -                          -              799,072
    Provision for income taxes                                                    152,800                       28,300                     21,700                           5,900                      20,100                     10,700              239,500
    Net income                                                                    500,127                       45,596                     35,811                           8,838                     (20,100)                   (10,700)             559,572
    Net income attributable to Gannett Co., Inc.                                  458,748                       45,596                     35,811                           8,838                     (20,100)                   (10,700)             518,193
    Net income per share - diluted (a)                                                          $1.89                            $0.19                                      $0.15                              $0.04                        $(0.08)                 $(0.04)      $2.13

    (a) Total per share amount does not sum due to rounding.

    NON-GAAP FINANCIAL INFORMATION
    Gannett Co., Inc. and Subsidiaries
    Unaudited, in thousands of dollars

    Table No. 7
                                                                                             GAAP                             Special Items                      Non-GAAP
                                                                                            Measure                                                              Measure
                                                                                            -------                                                              -------
                                                                                           Fourteen                  Workforce                        Facility                  Fourteen
                                                                                         weeks ended               restructuring                   consolidation              weeks ended
                                                                                        Dec. 30, 2012                                            and asset              Dec. 30, 2012
                                                                                                                                                 impairment
                                                                                                                                                  charges

    Operating income:
    Publishing                                                                                         $128,662                                 $6,595                                       $17,960                            $153,217
    Digital                                                                                   (51,006)                         -                          90,053                              39,047
    Broadcasting                                                                              157,935                          -                               -                             157,935
    Corporate                                                                                 (15,211)                         -                               -                             (15,211)
    Total                                                                                              $220,380                                 $6,595                                      $108,013                            $334,988
                                                                                                       ========                                 ======                                      ========                            ========

    Depreciation, amortization and facility
     consolidation and asset impairment charges:
    Publishing                                                                                          $47,524                            $                  -                                        $(17,960)                          $29,564
    Digital                                                                                    99,364                          -                        (90,053)                               9,311
    Broadcasting                                                                                6,894                          -                               -                               6,894
    Corporate                                                                                   3,948                          -                               -                               3,948
    Total                                                                                              $157,730                            $                  -                                       $(108,013)                          $49,717
                                                                                                       ========                          ===                ===                                       =========                           =======

    Operating cash flow (a):
    Publishing                                                                                         $176,186                                 $6,595                                 $                      -                          $182,781
    Digital                                                                                    48,358                          -                               -                              48,358
    Broadcasting                                                                              164,829                          -                               -                             164,829
    Corporate                                                                                 (11,263)                         -                               -                             (11,263)
    Total                                                                                              $378,110                                 $6,595                                 $                      -                          $384,705
                                                                                                       ========                                 ======                               ===                    ===                          ========

                                                                                             GAAP                                    Special Items                                    Non-GAAP
                                                                                            Measure                                                                                    Measure
                                                                                            -------                                                                                    -------
                                                                                           Thirteen                Workforce                      Facility                  Former                       Thirteen
                                                                                         weeks ended            restructuring                  consolidation             Chairman and                   weeks ended
                                                                                        Dec. 25, 2011                                            and asset             CEO incremental                Dec. 25, 2011
                                                                                                                                                 impairment               retirement
                                                                                                                                                  charges                   charges
                                                                                                                                                                                                                   ---
    Operating income:
    Publishing                                                                                         $113,398                                $49,785                                       $13,193                         $         -          $176,376
    Digital                                                                                    38,732                          -                               -                                   -                    38,732
    Broadcasting                                                                               89,724                        667                               -                                   -                    90,391
    Corporate                                                                                 (29,594)                         -                               -                              14,738                   (14,856)
    Total                                                                                              $212,260                                $50,452                                       $13,193                             $14,738          $290,643
                                                                                                       ========                                =======                                       =======                             =======          ========

    Depreciation, amortization and facility consolidation and asset impairment charges:
    Publishing                                                                                          $42,160                            $         -                                      $(13,193)                        $         -           $28,967
    Digital                                                                                     7,892                          -                               -                                   -                     7,892
    Broadcasting                                                                                6,884                          -                               -                                   -                     6,884
    Corporate                                                                                   4,778                          -                               -                                   -                     4,778
    Total                                                                                               $61,714                            $         -                                      $(13,193)                        $         -           $48,521
                                                                                                        =======                          ===       ===                                      ========                       ===       ===           =======

    Operating cash flow (a):
    Publishing                                                                                         $155,558                                $49,785                                 $           -                         $         -          $205,343
    Digital                                                                                    46,624                          -                               -                                   -                    46,624
    Broadcasting                                                                               96,608                        667                               -                                   -                    97,275
    Corporate                                                                                 (24,816)                         -                               -                              14,738                   (10,078)
    Total                                                                                              $273,974                                $50,452                                 $           -                             $14,738          $339,164
                                                                                                       ========                                =======                               ===         ===                             =======          ========

    (a) Refer to Table No. 9

    NON-GAAP FINANCIAL INFORMATION
    Gannett Co., Inc. and Subsidiaries
    Unaudited, in thousands of dollars

    Table No. 8
                                                      GAAP                               Special Items                                   Non-GAAP
                                                     Measure                                                                             Measure
                                                     -------                                                                             -------
                                                  Fifty-three                Workforce                     Facility                 Pension               Fifty-three
                                                  weeks ended              restructuring                consolidation             settlement              weeks ended
                                                 Dec. 30, 2012                                         and asset                 charges              Dec. 30, 2012
                                                                                                       impairment
                                                                                                        charges
                                                                                                        -------
    Operating income:
    Publishing                                                    $368,644                                      $42,226                                            $32,076        $       -   $442,946
    Digital                                             41,700                         -                                  90,053                                         -  131,753
    Broadcasting                                       443,808                         -                                       -                                         -  443,808
    Corporate                                          (64,397)                  (1,656)                                       -                                     7,946  (58,107)
    Total                                                         $789,755                                      $40,570                                           $122,129           $7,946   $960,400
                                                                  ========                                      =======                                           ========           ======   ========

    Depreciation, amortization and facility
     consolidation and asset impairment charges:
    Publishing                                                    $147,750                      $                     -                                           $(32,076)       $       -   $115,674
    Digital                                            123,990                         -                                (90,053)                                         -   33,937
    Broadcasting                                        28,007                         -                                       -                                         -   28,007
    Corporate                                           16,421                         -                                       -                                         -   16,421
    Total                                                         $316,168                      $                     -                                          $(122,129)       $       -   $194,039
                                                                  ========                    ===                   ===                                          =========      ===     ===   ========

    Operating cash flow (a):
    Publishing                                                    $516,394                                      $42,226                             $                    -        $       -   $558,620
    Digital                                            165,690                         -                                       -                                         -  165,690
    Broadcasting                                       471,815                         -                                       -                                         -  471,815
    Corporate                                          (47,976)                  (1,656)                                       -                                     7,946  (41,686)
    Total                                                       $1,105,923                                      $40,570                             $                    -           $7,946 $1,154,439
                                                                ==========                                      =======                           ===                  ===           ====== ==========

                                                      GAAP                                  Special Items                                  Non-GAAP
                                                     Measure                                                                                Measure
                                                     -------               ---                                                              -------
                                                   Fifty-two                    Workforce                  Facility        Former                     Fifty-two
                                                  weeks ended                 restructuring             consolidation   Chairman and                 weeks ended
                                                 Dec. 25, 2011                                            and asset   CEO incremental               Dec. 25, 2011
                                                                                                          impairment     retirement
                                                                                                           charges         charges
                                                                                                                                                                ---
    Operating income:
    Publishing                                                    $477,583                          $73,229                          $27,243                            $        -   $578,055
    Digital                                            125,340                            -                        -                       -                      125,340
    Broadcasting                                       302,140                          667                        -                       -                      302,807
    Corporate                                          (74,272)                           -                        -                  14,738                      (59,534)
    Total                                                         $830,791                          $73,896                          $27,243                               $14,738   $946,668
                                                                  ========                          =======                          =======                               =======   ========

    Depreciation, amortization and facility
     consolidation and asset impairment charges:
    Publishing                                                    $148,537                      $         -                         $(27,243)                           $        -   $121,294
    Digital                                             30,693                            -                        -                       -                       30,693
    Broadcasting                                        28,926                            -                        -                       -                       28,926
    Corporate                                           16,460                            -                        -                       -                       16,460
    Total                                                         $224,616                      $         -                         $(27,243)                           $        -   $197,373
                                                                  ========                    ===       ===                         ========                          ===      ===   ========

    Operating cash flow (a):
    Publishing                                                    $626,120                          $73,229                     $          -                            $        -   $699,349
    Digital                                            156,033                            -                        -                       -                      156,033
    Broadcasting                                       331,066                          667                        -                       -                      331,733
    Corporate                                          (57,812)                           -                        -                  14,738                      (43,074)
    Total                                                       $1,055,407                          $73,896                     $          -                               $14,738 $1,144,041
                                                                ==========                          =======                   ===        ===                               ======= ==========

    (a) Refer to Table No. 9

    NON-GAAP FINANCIAL INFORMATION
    Gannett Co., Inc. and Subsidiaries
    Unaudited, in thousands of dollars

    Table No. 9

    "Operating cash flow", a non-GAAP measure, is defined as operating income plus depreciation, amortization and facility consolidation and asset impairment charges. Management believes that use of this measure allows investors and management to measure, analyze and compare the performance of its business segment operations at a more
     detailed level and in a meaningful and consistent manner.

    A reconciliation of these non-GAAP amounts to the company's operating income, which the company believes is the most directly comparable financial measure calculated and presented in accordance with GAAP on the company's condensed consolidated statements of income, follow:

    Fourteen weeks ended Dec. 30, 2012:
                                                                                                                 Publishing                  Digital                  Broadcasting            Corporate                Consolidated
                                                                                                                                                                                                                           Total
                                                                                                                                                                                                                           -----

    Operating cash flow                                                                                                       $176,186                                      $48,358                                    $164,829                                 $(11,263)                                  $378,110
    Less:
    Depreciation                                                                                                    (25,324)                       (4,441)                             (6,713)                           (3,948)                      (40,426)
    Amortization                                                                                                     (4,240)                       (4,870)                               (181)                                -                        (9,291)
    Facility consolidation and asset impairment charges                                                             (17,960)                     (90,053)                                   -                                 -                      (108,013)
    Operating income as reported (GAAP basis)                                                                                 $128,662                                     $(51,006)                                   $157,935                                 $(15,211)                                  $220,380
                                                                                                                              ========                                     ========                                    ========                                 ========                                   ========

    Thirteen weeks ended Dec. 25, 2011:
                                                                                                                 Publishing                  Digital                  Broadcasting            Corporate                Consolidated
                                                                                                                                                                                                                           Total
                                                                                                                                                                                                                           -----

    Operating cash flow                                                                                                       $155,558                                      $46,624                                     $96,608                                 $(24,816)                                  $273,974
    Less:
    Depreciation                                                                                                    (25,325)                       (3,962)                             (6,703)                           (4,778)                      (40,768)
    Amortization                                                                                                     (3,642)                       (3,930)                               (181)                                -                        (7,753)
    Facility consolidation and asset impairment charges                                                             (13,193)                            -                                   -                                 -                       (13,193)
    Operating income as reported (GAAP basis)                                                                                 $113,398                                      $38,732                                     $89,724                                 $(29,594)                                  $212,260
                                                                                                                              ========                                      =======                                     =======                                 ========                                   ========

    Fifty-three weeks ended Dec. 30, 2012:
                                                                                                                 Publishing                  Digital                  Broadcasting            Corporate                Consolidated
                                                                                                                                                                                                                           Total
                                                                                                                                                                                                                           -----

    Operating cash flow                                                                                                       $516,394                                     $165,690                                    $471,815                                 $(47,976)                                $1,105,923
    Less:
    Depreciation                                                                                                   (100,109)                     (16,934)                            (27,282)                           (16,421)                     (160,746)
    Amortization                                                                                                    (15,565)                     (17,003)                                (725)                                -                       (33,293)
    Facility consolidation and asset impairment charges                                                             (32,076)                     (90,053)                                   -                                 -                      (122,129)
    Operating income as reported (GAAP basis)                                                                                 $368,644                                      $41,700                                    $443,808                                 $(64,397)                                  $789,755
                                                                                                                              ========                                      =======                                    ========                                 ========                                   ========

    Fifty-two weeks ended Dec. 25, 2011:
                                                                                                                 Publishing                  Digital                  Broadcasting            Corporate                Consolidated
                                                                                                                                                                                                                           Total
                                                                                                                                                                                                                           -----

    Operating cash flow                                                                                                       $626,120                                     $156,033                                    $331,066                                 $(57,812)                                $1,055,407
    Less:
    Depreciation                                                                                                   (106,268)                     (14,810)                            (28,201)                           (16,460)                     (165,739)
    Amortization                                                                                                    (15,026)                     (15,883)                                (725)                                -                       (31,634)
    Facility consolidation and asset impairment charges                                                             (27,243)                            -                                   -                                 -                       (27,243)
    Operating income as reported (GAAP basis)                                                                                 $477,583                                     $125,340                                    $302,140                                 $(74,272)                                  $830,791
                                                                                                                              ========                                     ========                                    ========                                 ========                                   ========

    NON-GAAP FINANCIAL INFORMATION
    Gannett Co., Inc. and Subsidiaries
    Unaudited, in thousands of dollars

    Table No. 10

    "Free cash flow" is a non-GAAP liquidity measure used in addition to and in conjunction with results presented in
     accordance with GAAP. Free cash flow should not be relied upon to the exclusion of GAAP financial measures.

    Free cash flow is a non-GAAP liquidity measure that is defined as "Net cash flow from operating activities" as
     reported on the statement of cash flows reduced by "Purchases of property, plant and equipment" as well as
     "Payments for investments" and increased by "Proceeds from investments". The company believes that free cash flow
     is a useful measure for management and investors to evaluate the level of cash generated by operations and the
     ability of its operations to fund investments in new and existing businesses, return cash to shareholders under the
     Company's capital program, repay indebtedness, add to the company's cash balance, or to use in other discretionary
     activities. Management uses free cash flow to monitor cash available for repayment of indebtedness and in its
     discussions with the investment community.

                                       Fourteen                  Fifty-three
                                     weeks ended                 weeks ended
                                    Dec. 30, 2012              Dec. 30, 2012
                                    -------------              -------------

    Net cash flow
     from operating
     activities                                     $258,004                                  $756,740
    Purchase of
     property,
     plant and
     equipment                            (28,864)                     (91,874)
    Payments for
     investments                           (1,501)                       (2,501)
    Proceeds from
     investments                           20,455                        35,629
    Free cash flow                                  $248,094                                  $697,994
                                                    ========                                  ========

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SOURCE Gannett Co., Inc.


Source: PR Newswire