Gracia Martore – Executive Vice President, Chief Financial Officer Craig Dubow – Chairman, President, Chief Executive Officer

John Janedis – Wachovia Alexia Quadrani – J.P. Morgan Craig Huber – Barclays Capital [Peter Jacobs – Raymond McKenzie] James Goss – Barrington Research Edward Atorino – Benchmark Michael Kupinski – Noble Financial Timothy Stabos – Stabos Asset Management

Welcome to Gannett's first quarter 2009 conference call. (Operator Instructions) Our speakers today will be Mr. Craig Dubow, Chairman, President and CEO and Gracia Martore, Executive Vice President and CFO. At this time I would like to turn the call over to Gracia Martore.

Good morning. Welcome to our conference call and web cast today to review Gannett's first quarter 2009 results. We hope you've had a chance to review our press release this morning. It also can be found at www.gannett.com. With me today are Craig Dubow, Chairman, President and CEO and Jeff Hines, Director of Investor Relations. We gave you a thorough update at our MEANY Luncheon Presentation in mid March, so we'll keep our prepared comments this morning brief. Today, Craig will provide an update on some of our most recent initiatives and a summary of our results for the first quarter. Then I'll cover the results for each of our segments as well as some balance sheet items. Now let me turn it over to Craig.

Thanks Gracia, and good morning all. The unprecedented weakness in the economy continues to impact the operations of just about every industry sector in the U.S. and globally. Of course, that has put significant pressure on advertising demand across all media including the Gannett company. Even so, we continue to transform our businesses and have progressed on several fronts. Our strategic premise is straightforward; quality content attracts consumers and that draws advertisers. That said, effective execution is absolutely critical amid the cross currents created by a tough economy, changing consumer demands and technological advances. Although the current environment makes it difficult, we have been transforming our business for some time now as we adjust to changing consumer appetites for news and information. We believe this puts us in a very good position to take advantage of the opportunities that are created in the new media landscape. Throughout the transformation, we have assessed our business from top to bottom for more effective content gathering, to distribution across multiple platforms, to more streamlined and efficient operations to robust digital presences. During the quarter, we have moved forward on several of these fronts. Production and distribution are key areas in our publishing operations and we are fundamentally changing the way we approach this as part of our business. We are putting in place agreements and partnerships that the industry would never have considered just a few years ago. We have started or we are discussing a number of agreements to print the papers of other publishers in addition to our own and we have partnered in some of our communities to have others print our papers. In a sense, we have taken the efficiency captured by the clustering of properties to the next level. In terms of distribution on the circulation side, we have increased subscription and single copy rates in many of our markets. At the same time, we are assessing the profitability and advertiser demand for certain routes. Raising rates has helped on the top line and has driven circulation revenue up while assessing routes has changed the cost structure and improved our operating leverage. Once again, we are not simply cutting costs here, but are looking for ways to fundamentally change the business concurrently with an eye toward improving the product. Our consumer centric changes in Detroit are a prime example of this. The official launch of these changes was on March 30 and by all accounts it has been a very successful launch. We are certain there was heightened interest in our newly formatted designed newspapers but the fact that it was a very strong news day with GM and the Wagoner story as well as Michigan State making the Final Four certainly didn't hurt. We now know that the newsrooms passed the test of how well the Express Edition could handle a major news day. Traffic to our digital E editions which are exact replicas of our print newspapers accessed online have been exceptionally strong. After the launch, traffic has continued to be strong with an influx of new visitors as well as increases daily in the average time spent and the number of pages viewed. With the Express Editions, we introduced a managed fixed inventory concept to our advertisers. Advertising space was virtually sold out for the first five days and continues to be strong for the month of April with advertisers shifting to an early reservation system to ensure publishing dates. As was our goal, we attracted new advertisers to the Express Editions and are seeing good presence from our core advertisers. We also saw several local retail advertisers increase the size of their ads on smaller distribution Express Edition days, another specific goal. So consumers are intrigued with E editions and stay interested in the content, and advertisers both core and new saw value in that connection. These are early headlines and we'll keep you posted on how all this proceeds. Content is the linchpin for our efforts in Detroit. In all of our business for that matter and content won as our company wide initiative designed to improve the quality and efficiency of content development and delivery at Gannett. Using a virtual command center, Content One will work to end duplicative content gathering, guide major event coverage across the company and seek new ways to use our content across multiple platforms and in multiple venues. The effort will be strongly linked to research and very consumer oriented. We moved forward with Content One during the quarter overseeing company wide NCAA tournament coverage, helping coordinate our response to the tragic Binghamton shooting spree, launching an experimental green web site and realigning our in house aggregation efforts and generally changing the culture around deeper cooperation. One thing I want to make clear; Content One is not just an exercise in cost reduction. It is all about smarter quality content gathering and opening new markets for our efforts. It is yet another way we believe that we can retool business operations around our content. On the digital front, the value of content has played a key role in recent successful development. During the quarter, we completed an agreement with Pro Quest in which they are paying us to administer our archived content, including repackaging and distribution of that content. They have also agreed to digitize some pre-1923 content. The agreement will make it more efficient, cost effective and profitable to manage the content, and supports the validity of the long term value of our content. Unfortunately, the soft economy limited opportunities for revenue growth in the quarter, and that has required us to make some very difficult decisions, not the least of which was our recent announcement that there will be furloughs for the second quarter in addition to those announced in the first quarter. We had some focused reductions in force in the first quarter as well due to consolidations and other specific business changes. The furloughs have been an effective strategy to manage across while maintaining productivity as we work through the economic downturn. Employees managed through it amazingly well, and I'd like to commend everyone for their efforts. Gracia will discuss the impact of these efforts in more detail in just a few moments. One comment before we move to the results for the quarter; the current economic environment will abate eventually and we believe we will be in the best position both structurally and financially to benefit when it does. In the toughest advertising market in memory in what has traditionally been the smallest quarter of the year, we generated $230 million in operating cash flow. Now, turning to the results for the quarter; earnings per share were $0.34. That amount includes a pension settlement gain of about $25 million after tax or $0.11 per share and costs related to restructurings of $4 million after tax or $0.02 per share. As a reminder, last year's first quarter results included a gain on the sale of land of $0.07 per share. Excluding these one time items, earnings per share were $0.25 compared to $0.77 per share in the first quarter last year. Our operating revenues totaled $1.4 billion. Total expenses including the pension settlement gain as well as severance and facility related costs were $1.2 billion, a decline from last years first quarter of over 10%. Excluding the one time items I mentioned, reported operating expenses were almost 8% lower. That includes the effect of consolidation of Career Builder and Shop Local in our digital segment in the first quarter. So on a pro forma basis, assuming we consolidated Career Building and Shop Local for both quarters, and excluding one time items, operating expenses were almost 18% lower. Our first quarter results reflect the impact of the continued weakness in the economy. The revenue trends we highlighted through February carried through March. Operating revenues overall were down about 18%. Publishing revenues were about 27% lower this quarter compared to a year ago. Retail was down in the low 20%. National's decline was about 31% and classified was about 46% lower. Although lower, our advertising category stabilized over the course of the quarter both here and in the U.K. Circulation revenue here in the U.S. was up 1% reflecting some of the price increases I noted in my earlier comments. Broadcasting revenue was also hindered by the soft economic environment as well and declined 16%. While we generated roughly $14 million in television station retransmission fees, online revenue was up about 9% and we benefited from the Super Bowl on our NBC affiliates. That was not enough to overcome the weakness in other categories primarily in the auto and retail categories and significantly lower political related advertising. Based on trends at this point, we expect television revenue in the second quarter to be down in the high teens. In our digital segment, revenues were just over $143 million reflecting primarily the consolidation of Career Builder and Shop Local. Operating cash flow totaled about $8 million for the quarter. On a pro forma basis, assuming Career Building and Shop Local has been fully consolidated for 2009 and 2008; operating revenues in the digital segment would have been down about 13% while operating expenses were almost 22% lower. As a result, operating cash flow on a pro forma basis had a positive swing of about $20 million from last year. Drilling down a little bit on the digital segment and focusing on Career Builders results for a moment, Career Builders North American network revenue, which as a reminder, consists of revenues from Career Builders own sales efforts in addition to the revenue from the network of owner affiliated newspapers, was about $141 million for the quarter, down about 27%. The vast majority of the revenue, over 80% was generated by Career Builder and the rest came from the owner affiliated newspapers. The decline reflects significantly lower revenue from the owner affiliated newspapers as employment up sell opportunities continued to reflect lower print demand. The market for Careers Builder's directly sources revenue is not immune to the current economic situation and declined about 16% in the quarter, which we believe will compare very favorably with other online recruitment sites. Average network traffic for the quarter was $23.8 million, unchanged from a year ago. In March, Career Builder network traffic was $22.7 million. For consolidation purposes on our financial statements we include Career Builder network revenues less those revenues for Career Builder already accounted for in our publishing segment and revenue for the other owner affiliated newspapers. On a pro forma basis, assuming Career Builder had been consolidated for the first quarters of 2009 and 2008; revenue there would have been down about 15%. Total online revenue in the first quarter company wide which includes digital revenue for our publishing and broadcasting segments as well as digital was approximately $225 million. Before I turn the call over to Gracia, I wanted to note that Craig Moon, the President and publisher of U.S.A. Today, announced his retirement at the end of March. Craig has maintained the great value of the U.S.A Today brand and has managed it through some difficult times, and I want to thank him for all of his hard work. With that, let me turn the call over to Gracia.

Before we go into detail on our quarterly results, I need to remind you that our conference call and web cast today may include forward-looking statements and our actual results may differ. Factors that might cause them to differ are outlined in our SEC filings. This presentation also includes certain non-GAAP financial measures and we provide a reconciliation of those measures to the most directly comparable GAAP measures in the press release and also on our investor relations portion of our web site. This morning, I'll go into a little more detail regarding revenue and expenses in our business segments and finally, I'll cover some of our non operating and balance sheet items. Advertising revenues in the quarter were down about 34% and would have been 30% lower on a constant currency basis, reflecting the declines of about 28% domestically and 39% in pounds at News Quest. All of our advertising categories were lower in the quarter with retail and national down 23% and 31% respectively while classified declined over 46%. Retail advertising demand softened during the quarter both here and in the U.K. In the U.S., across all products the department store and furniture categories were the most dramatically impacted. National advertising was lower as well in the quarter but was slightly better in March compared to January and February. Advertising revenue was about 34% lower at U.S.A. Today. The telecom, pharmaceutical and advocacy categories were positive in the quarter although weakness in the entertainment, travel and financial categories overshadowed those gains. In classified advertising, here too trends we highlighted through February continued into March. Declines in auto, employment and real estate were roughly 39%, 62% and 61% respectively. The exchange rate however, negatively impacted our results in the quarter. If you exclude the impact of currency that would have moderated revenue declines in each of the classified categories I mentioned by an average of about five percentage points. In the U.K., the weakness in the economy is persisting in much the same way it has here in the U.S. Advertising revenue in pounds was almost 39% lower with retail down about 23%, national about 31% and classified about 45%. Within classified, the declines for auto, employment and real estate were about 43%, 51, and 60% respectively in pounds. Craig told you about broadcasting and digital in detail so I won't cover revenue for those segments. However, as Craig noted, our results this quarter reflect the impact of a number of cost efficiency efforts that we put in place during '08 and into 2009. We did have a fairly small expense for severance and cost related to some facility consolidations in the quarter. The pension settlement gain impacted the publishing expense line. Let me give you some additional detail on that gain. During the first quarter, we negotiated a settlement of an underfunded union pension plan obligation. The company will pay approximately $15 million to fund the plan over the next 24 months in exchange for a complete withdrawal from the plan and release from any future funding or contribution obligations to it. In connection with this agreement, the company recorded a settlement gain of almost $40 million representing the excess of its previously recorded liability for the underfunding over the $15 million settlement amount. As expected, the furloughs also helped us to contain costs, saving us roughly $20 million in the first quarter. As Craig mentioned, total reported operating expenses excluding one time items but including the impact of the furloughs were down almost 8%, but again, that includes the consolidation of expenses for Career Builder and Shop Local. And, if we exclude those one time costs as well as the pension settlement gain, on a pro forma basis, expenses were actually down 18%. The pension settlement gain impacted the publishing segment operating expenses. On a reported basis if you exclude the gain and the restructuring costs publishing operating expenses were down about 18%. That reflects all of the efforts we focused on in 2008. It also reflects lower newsprint expense driven by significantly lower consumption. Newsprint expense was 15.6% lower due to a decline in consumption of almost 30% which was more than offset by an increase in usage prices of over 20%. Focusing on the current news print situation, 200 news print market prices weakened throughout the first quarter because of a global decline in demand. Despite production cuts by producers, this downward price pressure continues into the second quarter and we believe beyond. Company wide press reductions and the use of lighter basis weight newsprint will have a positive impact on our newsprint expenses. Given market conditions, we believe the interests of paper makers and publishers are best served by focusing our efforts on eliminating regional price variances and achieving improved cost efficiencies at the producer level. Turning for a moment to expenses in our broadcasting segment, they were also lower, a decline of about 12% as efficiency efforts took hold there as well. Within the digital segment, folks in our digital group as well as Career Builder did an extraordinary job with their costs. On a pro forma basis, expenses in digital were down almost 22% and as Craig mentioned we have a strong positive swinging cash flow as a result. Costs were not however, reduced at the expense of growing our digital businesses. Before I move to the balance sheet discussion, let me cover some of our non operating items. Starting this quarter, we adopted FAS 160 which impacts primarily the way we report the 49.2% interest in Career Builder we don't own, and actually adds a couple of lines to the bottom of the P&L. Since consolidating Career Builder in the third quarter, our statement of income reflects 100% of Career Builder results. The new presentation requires us to remove the non controlling interest and report it as a separate line item. We then report net income attributable to Gannett which excludes that minority interest piece. The bottom line is, the new presentation does not change the bottom line, but apparently provides more transparency. We reported a loss from our unconsolidated investees this quarter of $2.7 million which was down from a loss of $11.8 million in the first quarter of '08. The decline was due primarily to the absence of our equity share of losses from Career Builder and Shop Local which are now consolidated. Softer results at our newspaper publishing partnerships in California and other places partially offset the lower losses. Income from other non operating items was about $2.5 million, down significantly from $24.2 million last year and reflects the absence of the $25.5 million gain on the sale of land last year that Craig mentioned. Finally, before we open it up for questions, there are a number of balance sheet items I'd like to discuss. As we disclosed in the 10-K when we ended the fourth quarter, we had about $632 million in floating rate notes due in May of 2009 as well as $500 million in bonds maturing in 2011 and $500 million in 2012. During the first quarter, we repurchased approximately $69 million more of our 2009 maturities through private transactions at a discount. Therefore, at quarter end we had approximately $563 million of our 2009 bonds outstanding. Given the ebb and flow of the level of concern by investors regarding the banks and their financial wherewithal, prior to quarter end, we borrowed under our revolver, sufficient funds to repay all of the $563 million coming due in May. So when you see our balance sheet at the end of the first quarter and our 10-Q, you'll see total gross debt of $4.3 billion, but then you'll also see $649 million in cash and cash equivalents and that additional cash represents primarily the prefunding of those named maturities. Net debt at quarter end was $3.7 billion and our all in cost of debt is about 4.25% at the moment. Subsequent to quarter end, we announced a private exchange offer for our 5.75% notes due in '11 and our 6 3/8% notes due in '12. Given the private placement structure of the transaction, we cannot comment on it other than to tell you we undertook it to further manage the maturities of our outstanding debt. We will release some information updating you on the transaction after the April 21 early participation deadline. Finally a quick comment on capital expenditures. They were about a little less than $19 million for the quarter including about $1 million for Career Builder. That compares to CapEx in the first quarter of '08 of a little over $28 million. Now we'll stop and Craig and I will be happy to take your questions.

(Operator Instructions) Your first question comes from John Janedis – Wachovia. John Janedis – Wachovia: Could you talk about the auto category on the TV stations? What did it look like in 1Q? Are you seeing a pick up? And longer term, how are you thinking about potential excess inventory due to the structural issues and what do CPM's look like?

From a television standpoint, Q1 has been very, very difficult because as I think we mentioned in the comments here, down in the high 40% range. The period three numbers did not see much improvement. I would say at best we're about where we were through the quarter. Obviously there's an enormous amount going on in Detroit that is having significant impact in that regard. As far as visibility, it is extremely limited as you might imagine particularly with these kind of numbers at this point, but our groups are still participating in any way possible with the sector.

With regard to CPM's on the TV side, obviously with lower demand there is pressure on pricing so that's clearly having an impact on the automotive category as well as other categories. And as to the future on auto spending on the television side, we're going to have to wait and see where the big three end up over the next several months and what those look like in terms of their ability to continue to operate. So we're just watching it as all of the rest of you are watching it and seeing how those numbers will progress. We have anecdotally seen at the local community level some auto dealers coming back into the paper and also online. In fact, on the online side in our community newspapers we actually had level to slightly up online revenues in the auto category. John Janedis – Wachovia: On the furloughs, should 2Q look like 1Q in terms of that $20 million?

It's a little early for us to say. We think it will be $20 million plus or minus, but there were some different nuances on the program in the second quarter than in the first quarter. Our officers and other key management employees are actually asked to take the equivalent of two weeks of furlough rather than one week of furlough, but then some of our lower paid folks in some cases were asked to take less or none at all. So we'll have to see how that plays out as well. We negotiate; we can't mandatorily require our unions and others who are under employment contracts or personal services contracts to take furloughs. So we continue to discuss that with them and negotiate that with some of the unions. So as we have a better sense of it as the quarter progresses, we'll certainly provide some additional guidance, but it will be in that range plus or minus.

I would just add that probably the biggest piece to this and why we'll learn later is just because of the difficulty in scheduling and all of those issues related so that's when the visibility will come clear to us, once that is resolved.

Your next question comes from Alexia Quadrani – J.P. Morgan. Alexia Quadrani – J.P. Morgan: On the domestic, domestic revenue increased in the quarter. Did it also increase at U.S.A.? Today and with some of the hotel changes and newspaper delivery policies, what is your outlook for circulation at U.S.A. Today going forward?

The Marriott piece has just taken place and we are going to be moving through that. Obviously the consumer is going to select. We are quite confident that will come together and we will deal with that in an ongoing basis. Obviously it's going to have some impact from an overall circ standpoint so we're going to be watching that and following it very, very closely. Your second question relative to auto however, we are also down at U.S.A. Today there probably in the low to mid 20% on a percent basis. Alexia Quadrani – J.P. Morgan: Was circ at U.S.A. Today positive as well in the quarter?

Yes. On the revenue side, circulation revenues for the quarter were up in the low single digits at U.S.A. Today. And one other thing I might add, while certainly the Marriott decision will allow more choice for their guests, we have just recently completed the signing of a contract with another large group that actually has more circulation with us than Marriott and they will continue at the 100% level. And we're also continuing to work with Marriott through print and online mobile and our Go boards in their hotel lobby so we'll continue to reach all of the guests that Marriott has through one form or another of our media. Alexia Quadrani – J.P. Morgan: Just jumping over to News Quest for a second, and I think at your investor day it looked like February wasn't too much for us if I remember correctly than January. I know one month is really too early to call for a bottom, but I'm curious how March trended, just trying to see if there's a bottom in News Quest at all.

I would hate to say bottom at this point, but maybe leveling might be a better term to look at. It's been for several weeks that we've seen that and the categories are not demonstrably lessened. So from that perspective, from our view, that's an optimistic way to look at it. Alexia Quadrani – J.P. Morgan: And Advocate just filed for bankruptcy. I guess that's not a big surprise for anybody, but does that change your outlook for how you're budgeting newsprint expense for the rest of the year?

We're just going to have to see what happens and what ends up happening with their mills so we'll continue to follow on the news, but at this point as we all know there's a surplus of supply of newsprint on the market globally and we think that will continue to drive pricing downward.

Your next question comes from Craig Huber – Barclays Capital. Craig Huber – Barclays Capital: You usually have a pretty good sense of how U.S.A. Today is going with forward bookings. I was wondering how that paper is trending with ad revenues in the month of April. And then also could you speak about daily and Sunday circulation volume, what the percent change was in the first quarter and separating out U.S.A. Today?

Just taking a look as I said a little earlier, the visibility in particular is extremely limited. We are seeing as I mentioned, a bit of leveling as we move forward but I would suggest at this point that April continues to have a very, very limited view as to what we're seeing at this point.

Your next question comes from [Peter Jacobs – Raymond McKenzie] [Peter Jacobs – Raymond McKenzie]: Could you please talk a little bit more about the digital platform and the operating income there versus the fourth quarter and also reconcile that with the decline in cash flows that we also saw in the digital business? I'm trying to think about the profitability of that business segment going forward.

As we said in our prepared remarks, actually in the digital segment, if you look at it on a pro forma basis, when you look at it on a reported basis in the first quarter of last year, Career Builder and Shop Local were not consolidated in our numbers so you're looking at apples and oranges. But as both Craig and I mentioned, actually the swing in cash flow in the first quarter of '09 versus '08 was actually a positive swing of about $20 million. The other thing I would remind you of in the digital segment is that the first quarter is traditionally the smallest quarter of the year because we tend to have a big ramp up in marketing and promotion expenses in the first quarter, particularly at Career Builder and some of our other digital businesses. So Career Builder, despite having pro forma revenues that declined year over year actually posted a nice increase in their bottom cash flow. As well, I'd point out that Shop Local which is a much smaller business but one that we purchased 100% of in the third quarter of last year, and is now consolidated, that business which had traditionally had, we were investing we and our partners were investing in and had negative cash flow. Actually since the time of the acquisition, has shown a nice positive, and in fact, had a very nice positive swing in cash flow in the first quarter. So it is meeting or exceeding the expectations we had for it when we acquired it fully. So that gives you some sense of the digital segment dynamics in the first quarter. [Peter Jacobs – Raymond McKenzie]: Let me just follow that up if I could. Looking at it from the fourth quarter of '08 to the first quarter of 2009 and the decline there which was pretty significant both on an operating income basis and a cash flow basis, does that change your expectations for the digital business? Is there something other than seasonality that we need to be thinking of fourth quarter to first quarter or would this be in line with what you would have been expecting two months ago?

As we said in the fourth quarter and as we repeated in mid March, the fourth quarter is always the largest quarter of the year for our digital businesses, and the first quarter is always the smallest quarter of the year because of that substantial ramp up in promotion expenses. So what I would say to you is despite the fact that Career Builders revenues were down, their operating cash flow was up year over year and so what I would say to you is that we are very pleased with the results that we are seeing in the digital segment and they are in fact on track with what we were anticipating.

Your next question comes from James Goss – Barrington Research. James Goss – Barrington Research: Just one point of clarification in terms of financial risk. Do I understand the $500 million from 2011 would be the next maturity on the horizon so you don't have anything to deal with until then?

Only as I mentioned the May of '09 maturity but we've obviously taken care of that in pre funding. But yes, the '11 is the next maturity. James Goss – Barrington Research: A little bit more on the digital issue, of the units you have besides the Career Builder which is obviously the largest exposure, how would you rank the specific units in terms of contribution to revenue or cash flow base on an annualized basis?

Point Roll would come next and then Shop Local. And then obviously we have several other smaller pieces. The acquisition of Ripple6 that we did late last year, Schedule Star is another small piece. But clearly the biggest pieces as we've said, Career Builder the lion's share followed by Point Roll followed by Shop Local. James Goss – Barrington Research: So all of those others are just very minute at this stage.

Yes. James Goss – Barrington Research: Do you think you're going to expand your presence either via acquisition or internal development or will this be the palate for now and also, you might talk about the interaction between Point Roll and Shop Local that I though you viewed as an opportunity once you had both of them under wing.

I think the answer here is very direct in what we are trying to do either through organic growth in the Mom's Like Me and other verticals that we are producing. This is an ongoing development that the group is doing and certainly that will continue as we see opportunity in those specific areas either as I said by organic or otherwise, we will pursue that. So I'm pretty confident that you're going to see other expansions as we go forward here. James Goss – Barrington Research: And the Point Roll, Shop Local?

We had said that there would be a great opportunity to create that consolidation and precisely what the group and Chris had recommended at the time, I think we saw just in that first quarter as Gracia had mentioned, we brought those together and really took advantage of both of those operations and had virtually immediate results. That was very gratifying. I think that the opportunity as we're seeing it, I know from a renewal standpoint with respect to Shop Local and the retailers is moving forward as expected despite the headwinds certainly from the consumer side on this. But all of that is moving ahead property and our expectations are right there with it. So for every reason that it was brought together, we're very comfortable that will continue.

Your next question comes from Edward Atorino – Benchmark. Edward Atorino – Benchmark: You've done a magnificent job on getting costs down at 18%. That's very impressive. Is that trend sort of in place for the next couple of quarters and is there any more game plan to take another whack at costs somewhere down the road.

As we look at this and we have continuously said to you all, we are going to be very conscious of where the expense is and monitor it on an ongoing basis. That is I think a hallmark of this company so that we can have those expenses certainly in line with the revenue opportunity here. That's not going to change. We are continuously looking for more opportunity. As we mentioned in the prepared comments as well, some synergies are really beginning to come together as we pursue other opportunities with other publishers as we will either print for them or they will print for us. That is new. That is now going to be on an ongoing basis and then further from that as well from a distribution stand point, we are distributing for others. So there is going to continuously be a line here that we are watching very closely. But that's something obviously you know we take very seriously. Edward Atorino – Benchmark: On these outsourcing and sort of restructuring the printing and distribution, are you sort of offloading some of your print to other people and taking on others? Net net will you be doing more or less printing?

That's to be determined. We are in lots of conversations. Most recently in Pensacola we announced that we would be printed by the newspaper in Mobile there, but in other places we are going to be printing other newspapers. And on the distribution side, U.S.A. Today has picked up a few newspapers that they're now distributing both among our community newspapers as well as external newspapers. So it's going to be some combination of both and we'll just have to see what makes the most sense from a productivity standpoint and from an efficiency standpoint whether it makes more sense for us to print or for someone else to print it. Edward Atorino – Benchmark: Are your outsourcing anything else? Have you closed any newspapers?

We have looked at outsourcing some things. We have outsourced some ad production. That's something that we always look at but we're very careful to make sure that the savings that are being proffered are real savings and not just illusionary savings. We've closed a few weeklies in the Michigan area and a few other areas, but we have not closed any daily newspapers.

Your next question comes from Michael Kupinski – Noble Financial. Michael Kupinski – Noble Financial: How significant are the changes in the affiliate piece with Associated Press for the company? I don't know if you can quantify that. And if you can, can you discuss options that you're considering in terms of distribution of your newspaper content over alternative platforms and the terms of charging for that content. Should you decide to extract any of those payments for the use of your content, does that complicate your arrangement with Associated Press in any way? And my final question is you gave some thoughts on where debt levels were expected to be at the end of the first quarter which came right in line with your expectations. I was wondering if you had thoughts of where debt would be at the end of the second quarter.

Starting with the AP and the cost, there basically has been a significant change as you're aware from the AP. Each of our groups is currently analyzing all of that and a final determination has not been concluded yet but we will be moving forward with that as we progress here. Obviously the differences in the amount of content and how the content would be moved is really a part of the equation so all of that is being determined at this point. As far as other distribution platforms, we are going to as we have I think demonstrated pretty regularly here, participate across any all platforms determined by that consumer. That is the big piece to the equation here. I think just in the mobile area itself, obviously we are gearing up for Android. We have I think a huge success right now from the Apple I-phone application for U.S.A. Today. That will be quickly followed by several others in the travel category etc. that will be coming along here very quickly. But I can say the uptake on those uses has become very significant and I think when you begin to look at the applications you see the commitment as a company we have to further progressing in a tethered or un-tethered arena as it would best apply. But the answer bottom line is, we will participate where the consumer determines they want our content. Michael Kupinski – Noble Financial: When did the affiliate fee lower the way AP's hit? You're still negotiating those right now or is that coming in the second quarter?

We're in the process. That would actually come into play next year, but we're in full discussions among the group for determination and I think that's correct. I'll have to double check the date on it. There was two versions. I think what you're referring to is part two to this. We have some that is in current release and then what was announced at NAA to the AP meeting, there will be yet a second that will take place later on and that's what we're trying to determine right now as we relook at the contracts. Michael Kupinski – Noble Financial: And currently how much do you pay to the Associated Press?

That's just something we haven't ever put out before, I'm sorry.

On your debt level question, it's a little early in the quarter to really forecast quarter end debt. What I will tell you though is that all of the free cash flow that we generate during the quarter or a great share of it will obviously be spent in reducing debt and as well, we'll have the benefit in the second quarter of the substantially reduced dividend payment that we clearly didn't have in the first quarter as well as CapEx is lower, will be lower for the full year so we'll get the benefit of that in the additional free cash flow side of it. So we'll be focused on paying down debt for the remainder of the quarter. Michael Kupinski – Noble Financial: Did you provide what the CapEx is supposed to be in the second quarter?

No. I said that it was about $18 million in the first quarter and we've given guidance that our original budget on CapEx was about $150 million, but we're expecting that spending will come in probably substantially lower than that. It may be in the $100 million range for the year.

Your next question comes from Craig Huber – Barclays Capital. Craig Huber – Barclays Capital: The second question I was asking about daily and Sunday circulation volume year over year in the first quarter with and without U.S.A. Today please.

Daily circulation down for the quarter in the 10% range. I think that reflects a number of things. Number one as you know, we indicated that we have had a number of pricing increases both in single copy as well as home delivery, and there's always that reduction in circulation in the early aftermath of those kinds of price increases. As well, I think we and others have looked at all of our outlying circulation, margin circulation and have taken a hard look at that given where things stand and have been careful in reducing that kind of circulation temporarily as we got through this deep economic downturn. So a couple of the factors obviously impacting the circulation numbers. Craig Huber – Barclays Capital: What was it if you exclude U.S.A. Today, and also with Sunday too please.

I think that Craig Moon, the number I gave you, Sunday would have been about half of that kind of decline, that 10% decline we talked about. U.S.A. Today, I think Craig Moon talked about in mid March that their circulation will probably be down 7% to 7.5% in the March ABC Report. So their circulation, you can extrapolate that from about we have about six million or so of circulation daily. Craig Huber – Barclays Capital: You've taken a very unique approach in media doing two rounds of furloughs here as opposed to outright layoffs. How much thought have you given to potentially doing a second week of furloughs in the second quarter and what's your thought of the third quarter another week of furloughs here?

I think we said, I said that actually in the second quarter for the officers of the company as well as key management people across all of our divisions, we in fact are instituting the one week that we had in the first quarter as well as a second week, either a second week of furlough or a pay reduction, temporary pay reduction which is the equivalent of an additional week. So we are doing two weeks for some portion of our more senior folks here at Gannet. We're going to have to look at where economic conditions are, where business conditions are as the quarter continues to evolve and we'll have to see where that takes us vis a vis furloughs or other actions that we may or may not have to do on the expense side. Craig Huber – Barclays Capital: I guess what I'm wondering here is if you end up doing a week of furloughs on average for each of the four quarters this year, so you have 48 weeks of labor costs this year. What are you doing as you think out to next year? If you don't do it, you have roughly 52 weeks next year. Are you looking at potentially doing an 8% to 10% head count reduction? Nobody wants to lose their job of course but to potentially lock this in as you go into 2010?

Well first off you're assuming we're going to do furloughs again in the third and fourth quarters and as I said, that determination has not been made yet. We're going to have to see where economic and business conditions are, and then we're going to have to see where economic and business conditions are when we begin our budgeting process for 2010. So it's very premature for us to think about what our comparisons are going to look like either on the expense side or on the revenue side come 2010. You have to look at both of those in conjunction before we make decisions like that and it's just simply too early for us to do that. Craig Huber – Barclays Capital: How much is your newspaper online revenues down in the first quarter?

Our newspaper online in the U.S. Community Publishing, they're down about 20%, but what I would point out is that employment which is about 30% or so of our online revenue, if you take out employment, our digital revenues in the U.S. Community Publishing were actually up in the low single digits led by National which was up dramatically and reflects I think a lot of the good work being done on Mom's and other verticals to not only attract local advertising dollars, but also national advertising dollars.

Your next question comes from Timothy Stabos – Stabos Asset Management. Timothy Stabos – Stabos Asset Management: With the common stock at $3.65, the belief it seems is that you're not going to get these ad revenues back. As a shareholder, I have my own opinion on that, but I think it's important for management to go on the record. What percent of this decline in ad revenues in the view of management is secular versus cyclical?

We have talked a lot about the cycles that everything is going through. We are I think up front in suggesting that there has been a portion of secular change across the board here and certainly when you look at moving through that, we will then begin to cycle clearly on the real estate side at some point here in the near future or in the future. Let me not term it as near. But we will see that cycle. And I think there is a combination. The clear message here is why we're trying to ramp as rapidly as we can on the digital side. We know where our core is. We are trying to make certain that we are going to be on the multi platform opportunity at this point so we can take advantage then from both directions. Our believe is that if things are leveling a bit, hopefully sometime at the end of the year and beyond, we may begin to see some advertisers poking back into this in some pretty significant ways, but all of that is to come as we look to the future. Timothy Stabos – Stabos Asset Management: I've looked at 25 years of this company's operating income as a percent of revenue and you guys are pretty consistently in the low 20's in the 1980's to about 1995 with the exception of the early '90's recession yet you had a 30% operating income as a percent of revenue in '99 and 2002, and we've drifted down to the low to mid 20's, 23% in 2007 and obviously it's gotten worse. Is there any reason this business at least over long term can at least be a 20% operating income as a percent of revenue? I'm not saying this year, I'm not saying next year, but give me a sense.

Our belief on this is that we are going to look at the improvements as we move along. But again, let me restate as we view all of this, there's going to be the transformation that we have been very involved in and trying to make certain where the consumer directs their use from a platform basis to where we will be. So it gets very difficult to lay out a clear path with the kind of view we have today. We want to be very cautious but the whole point here is that we are moving to the platforms quite clearly that the consumers are dictating from that perspective.

I think the other thing we'd say is that we have never managed the company for margins and if we have a trade off in having substantially more revenue but a 15% margin versus having less revenue at a 20% margin, I think we would intelligently choose the 15% margin at a much higher revenue base. So I don't think margin tells the whole story. That's just one small piece of it. I think that what we re focused on in our transformation is to continue to have a terrific core business that's appropriately sized to whatever that revenue opportunity is and then to also grow a dynamic and robust digital business which I think we have begun to show in the numbers that we are putting forth over the last couple of quarters.

That concludes the question and answer session today. At this time, Ms. Martore, I would like to turn the conference back over to you for any additional or closing comments.

Thanks very much. We appreciate you joining us today and if you have any additional questions please feel free to call Jeff at 703-854-6917 or me at 6918. Have a terrific day.