Good day, everyone, and welcome to Gannett's Second Quarter 2012 Earnings Conference Call. This call is being recorded. [Operator Instructions] Our speakers for today will be CEO, Gracia Martore; and Jeff Heinz, Director of Investor Relations. At this time, I'd like to turn the call over to Jeff Heinz. Please go ahead.

Thanks. Good morning, and welcome to our conference call and webcast to review Gannett's second quarter results. Hopefully, you have had the opportunity to review this morning's press release. If you've not seen it yet, it is available at www.gannett.com. As we get started, I need to remind you this conference call and webcast include forward-looking statements. Our actual results may differ, and factors that might cause them to differ are outlined in our SEC filings. This presentation also includes certain non-GAAP financial measures. We have provided reconciliations of those measures to the most directly comparable GAAP measures in the press release and on the Investor Relations portion of our website. With that, let me turn the call over to Gracia.

Thanks, Jeff, and thanks all of you for joining us today. This morning, I'm going to be discussing our second quarter results and further updating you on the growth strategy we announced at our Investor Day in February. As you also know, we provided a comprehensive update, both on our strategy and the quarter, at our presentation to the media and entertainment analysts of New York in late June. The transcripts and other documents from that presentation are available on the Investor Relations section of our website for those who would like to do a little bit of a deeper dive. So we'll be a little bit briefer today. Also today joining us is Dave Lougee who, as you know, heads Gannett Broadcasting. He'll be commenting and discussing Broadcasting's strong quarter and the outlook for the second half of the year. So now let's jump into it. It's been a busy quarter, but I believe a very productive one for our company. To start with, we continue to make strong progress on our strategic initiatives, including our new all access content subscription model. As of the end of the quarter, the program was up and running in about 38 of our markets and delivering as expected. In fact, the plan, though we are in the very early innings, helped deliver our first uptick in circulation revenue at U.S. Community Publishing literally in years. It goes without saying that we are extremely pleased with results thus far and much more to come. We rolled out 11 more markets in the last 2 weeks, and now, as they say, past performance is no guarantee but we are expecting larger total USCP circulation revenue gains going forward as the rollout continues. We're making good progress as well in our push into new businesses…

Thanks, Gracia. For the second quarter, Broadcast revenues totaled $205 million, an increase of more than 11% compared to the same quarter last year. Our growth drivers were strong core advertising results, higher political demand and increases in digital and retransmission revenues. Core advertising was led by an increase in the auto category of almost 30%. Auto's been strong all year, but part of the growth this quarter is related to the negative impact last year of the Japanese tsunami, particularly in June. But several other top categories were also up in the quarter including medical, retail, local services, home improvement and financial services, offsetting losses in media and telecom spending. Political, which we'll talk a little bit more about later, totaled $11.8 million in the second quarter, an increase of $9 million over last year. Retransmission revenues were $23 million in the quarter, about 17% higher compared to the second quarter last year. Digital revenues and broadcasting were up 13%, and Captivate, itself, was up 15%. Total adjusted TV revenues, defined to exclude the incremental impact of our even-year political ad demand, were up 6.2%. Expenses in the Broadcasting segment were just -- were up just under 7%, due primarily to an increase in sales and marketing costs associated with the significant ramp-up in revenues and about $2 million in the initiative investments that Gracia referred to earlier. Excluding the strategic investments, operating expenses were up about 5%. Operating income, including the net impact of the strategic initiatives, was up almost 18% compared to the second quarter last year and totaled approximately $95 million. Operating cash flow was up just under -- was $102 million, an increase of just under 16%. Now we will have a very strong third quarter. We already have significantly more dollars on the books…

Thanks, Dave. It's obviously great to be in television, especially Gannett television this year. Now quickly, I want to turn to some balance sheet items before we open it up for questions. As you know, our new capital allocation plan included a 150% dividend increase to $0.80 per share on an annual basis and a $300 million share repurchase authorization targeted to be completed over the next 2 years. During the quarter, we opportunistically repurchased 3.4 million shares at a cost of $45.5 million. At the end of the second quarter, we had approximately $1.66 billion of debt and our all-in cost of debt currently stands at about 6.75%. Cash at quarter end was 212 -- $202 million. We spent $20 million on capital expenditures. And free cash flow totaled $140 million in the quarter after a $22 million contribution to our pension plan. We've contributed about $76 million to the pension plan through the first half of the year. Our guidance had anticipated contributions of approximately $118 million in 2012. However, recent changes in legislation have reduced the required funding in the near to medium term. We now anticipate that we will contribute a total of $94 million for the entire year. At the end of this year -- at the end of last year, our principal pension plan was about 82% funded. The impact of the new legislation will move the funded percentage up to the 90% to 95% range. We expect there will also be an impact on next year's funding, but it is still a little too early to call. Finally, before I open it up for questions, I wanted to remind you that similar to this quarter, we expect the third quarter to reflect continued investments in our strategic initiatives and higher pension expense. Initiative investment is expected to total roughly $10 million to $15 million in the third quarter, and the increase in pension expense will be about $5 million. So to sum up, we are making meaningful progress on all fronts to make Gannett a winner in the digital age. Our initiatives are gaining traction, and there's much more to come. Robust Olympics and political advertising seasons, as Dave said, lie ahead and our all access subscription program is delivering. Second quarter expenses are down despite $30 million in initiative investments as we continue to manage our business carefully. We are making sound investments in our future. Our strong financial position will enable us to deliver on our plan to return approximately $1.3 billion to shareholders through dividends and share repurchases by 2015, while making the investments we need to make for our business and our future. And with that, Dave and I will be happy to take your questions.

[Operator Instructions] And we'll take our first question from Alexia Quadrani with JPMorgan. Alexia S. Quadrani - JP Morgan Chase & Co, Research Division: I'm just trying to get an understanding of where core, though, is pacing into the third quarter. You gave us information on the Olympics and I know political is going to come in heavy, but probably late. I guess any sense on where you think just the core business is pacing if we take out retrans, just the core advertising? And then also, Gracia, if you can just give us a sense of how Publishing is trending in July, if you have any insights there.

Alexia, let me start with second quarter because, frankly, I can give you a much better view of that in the rearview mirror than I can on, in advance of the third quarter on core. But our core for the second quarter finished up about 5%. But frankly, we had some political displacement in June in some of our key political markets where the political funnel began in mid-May. So if you extrapolate the core that we displaced in June, we probably were up closer to 6.5% and 7% if we'd not had that political in core in the second quarter. Where third quarter will end is very difficult to say for us because the Olympics so much affects our inventory and especially political. But it is pacing very good right now. That pace -- and that's industry-wide as core advertisers place their business early in advance of political demand, so it's very difficult to say where it will finish, but the fundamentals appear to be strong. Specifically, auto remains very strong, and frankly, is tracking along with the good sales data that we're all seeing on car sales.

Yes, I would just add to that, that as you know from prior years, Alexia, as we get toward September when the political is really ramping up, that displacement factor becomes a much more important issue. And then when you think about the markets we have like Cleveland, Tampa, St. Louis, Denver, which are going to be very heavy from a swing state perspective, that's going to also result in the displacement. So the core will be, I think as you look into September, artificially lower because of that significant displacement factor that's very focused on a finite set of market.

And August will be artificially higher because of the Olympics, so it's very difficult to give you a good industry number other than to say our number will be good, especially given by Olympics.

Yes. And then, Alexia, on the other parts of our business, we feel very good about the progress on the Publishing side that we're making on circulation. And you saw that U.S. Community Publishing had circulation revenue growth a little over 1%. We would fully expect that, that number would be reasonably higher in the third quarter as the launches continue to take hold and we launch more sites, so that will be a very nice story for Publishing in the third quarter. I hesitate to really comment on advertising because the level of volatility, and as Dave said, the placement of advertising very late, makes it really difficult to hone in on trends. You saw the volatility that we just came through in the second quarter. But a lot will obviously depend on consumers and marketers and how they feel. Olympics will be good for USA TODAY and our sports group there. We're starting out the quarter as we would have expected so a lot will be said over these next few months. And it's -- and obviously, this quarter, September is a very important month with the back-to-school trends that we'll see. So it's just a little early. We'll make sure that we keep everybody updated as the quarter unfolds. And then Newsquest, of course, is doing a terrific job and outperforming their regional press competition on the top line side and certainly on the bottom line side as well. And then on the Digital segment part, CareerBuilder continues to post very good numbers despite what is a very high unemployment rate and a tepid view of the economy. But I think that a lot of the product innovation that they have done at CareerBuilder has resulted in them being able to post very strong numbers even in light of a difficult job environment. And then obviously, for them on the international front, they've done some good acquisitions and that part of the business is a strong positive for them. So we feel good about where we are headed this coming quarter, feel good about the progress we're making on a lot of fronts. The economy, as it will for a lot of industries, will ultimately determine how things go, but broadcast obviously is going to be a terrific home run for us in the third quarter.

And we'll take our next question from John Janedis with UBS.

One for Dave, maybe one for Gracia. First, just on TV. How different is the growth outlook for the non-NBC broadcast stations? And is growth, x political, accelerating or decelerating? And then on the U.K. front, Gracia, the headlines obviously remain negative but you're still seeing that sequential improvement. Were there onetime events in the quarter, and how does early 3Q look from maybe a consumer and business standpoint?

Okay. I'll take the first one, John. Looks, again, with the rearview mirror, it's a little bit better to look at. Frankly, the second quarter for us was better than the first even when you take into account we had the Super Bowl on our 12 NBC stations. So core was overall better in the second quarter than first because January was especially weak. In the third quarter, John, it's sort of hard to tell as Gracia and I referred earlier, because frankly, our numbers are so artificially strong. We've got, in addition to the Olympics, we've got some key NFL football games. We own the Denver Broncos inventory in the preseason with Peyton Manning and all that's attached to that in Denver, which is also a key political state, et cetera, et cetera. So we've got an extraordinarily strong inventory position, so our -- we'll have a disproportionately high share of revenues. And so a little difficult to say where it's all going to fall out in the third quarter on the x political business. But so far, it looks pretty good.

And John, you're right. We have, in the U.K., been certainly outperforming both from the standpoint of what is a very difficult economy as well as the other regional publishing companies in that marketplace. Certainly, in the second quarter, there was the Queen's Jubilee. And as you would expect, we certainly did a lot of work around that to try to generate some revenues out of that. But even when you extract those revenues related to the Jubilee as kind of a one-off event, our numbers would have sequentially been better than the first quarter. And I think if you look at total ad rev, it would have been less than 0.5% impact on ad revenues. So I think a lot of the work that the folks in the U.K., Paul Davidson and his team, are doing on initiatives of their own, revenue initiatives of their own as well as continuing to do a terrific job from an expense standpoint, have put them in a good position to navigate what are even more difficult waters in the U.K.

And quickly, I'm sorry, John, to your question about the non-NBC stations, obviously, it's better to be an NBC station in the third quarter this year. But our large-market CBS affiliates are doing well and I think taking some -- adding some share. So we've got a small mutual fund base to look at relative to the industry, but they're doing well in relative terms given the amount of money the Olympics take from every market.

And we'll take our next question from William Bird with Lazard.

Gracia, I was wondering if you could just talk about what the expense profile will look like for Publishing in the second half. And just bigger picture, how do you think about separation versus integration in driving value at Gannett?

Sure. Thanks, Bill. Let me take the second question first, separation versus integration. You heard us talk a lot about, and I'll ask Dave to comment on this as well, talk a lot about our Digital Marketing Services and talk about the tremendous scale that we have locally. We don't think of these as newspaper markets or broadcast markets. We think of these as local media markets where we have tremendous brands, strong deep relationships with advertisers and marketers. And scale, the scale that, that provides us being in 100-plus local markets. So for instance, when we're thinking about Digital Marketing Services and we're executing against that, you heard me say that we've already rolled it out to all of our TV markets and our top 35 U.S. Community Publishing markets, and we'll be rolling out the rest of them over the course of the year. That's because Digital Marketing Services is something that transcends the platform that you're on, whether it's TV or print because it's a digital opportunity for you. And in each of our markets, we have a strong digital market, digital presence, lots of different digital platforms from mobile to desktop to print and television. So we actually see that as a tremendous advantage for us to have that kind of scale across so many markets, to have those deep brand relationships, deep advertiser and marketing relationships. And we are a trusted advisor to advertisers and marketers in those communities, whether we start from the print platform or the television platform. And Dave, you might mention some of the successes you're seeing on the Digital Marketing side.

Yes, on the Digital Marketing Services product, which frankly as a stand-alone core broadcaster, we probably wouldn't have the infrastructure to support. The fulfillment structure that we've got in place that we're allowed to have in place scaled across our company gives us the ability to take to market a product that our competitors do not. And we are already seeing a sweet spot in the marketplace. I think as Gracia talked about at MEANY, simply put, we have thousands and thousands of local clients and businesses that are getting 20 to 35 calls a month from search and social and SEO and marketing -- different marketing vendors; we come in as a one-stop shop offering and they love it. We're seeing tremendous early success so we're in a position where we're now -- we're getting the supply to meet the demand, which is a high-class problem, as we like to call it. And just to add on to Gracia's point, from a broadcaster's perspective, the ability to be part of a company with 100 local markets and a national brand is something that's unique for us from a strategic standpoint because as the economy recovers, the growth will be in local. And our ability to take to market scaled products in 100 local markets is a differentiator for us as the Broadcast division.

And I think I'd add one more thing to that part and then we can go back to Publishing and their expense profile. I talked about DealChicken today and when you think about what we've done with DealChicken, scaling that up from one market in September of 2010 to 60 markets a short year later, doing that at an incredibly low cost base but generating results that are very good, it's because people know us, people understand us and it isn't our only product. It is part of a full suite of products that we can provide on the Digital Marketing Services to meet the needs of those folks. And so that's just another example of what I think is the terrific integration we see across both our newspapers as well as our television stations. On the Publishing expense profile side, we always will do a good job on the expense side. I can't, this early in the quarter, give you a sense of where we think things will end up. A lot of that will depend, obviously, on the top line picture. But I will say that given the strength of the Digital Marketing Services and the -- what we're seeing is terrific demand for this. You may see us doing some strategic adds to sales forces. We also are adding selectively to our content, local content generation resources, because of our content subscription model. So I think we'll make some strategic investments that make really good sense that we're able to monetize very quickly. Whether it's in that quarter or not, we're not managing for quarter-to-quarter. We're managing for really meeting the demand that we are seeing. So we'll do the great job we always do on expenses. That won't be an issue.

And we'll take our next question from Craig Huber with Huber Research Partners.

My first question, Gracia, is about June. What is the reason why June for the newspapers was materially worse than the prior month? And I have a couple other follow-ups.

Well, in May, we were down a couple of percent. That was our best month, I think, since 2007. We said at MEANY that we expected volatility and that June would not be as strong as May. I think we also saw towards the end of June a little bit of the impact of when July 4 was positioned, because of the weekend prior was in the second quarter and therefore some of the preprint spending and some other things that would have been in June actually probably slipped into July. So with that volatility, we've seen, as I said in my remarks, there are some changes in when certain dates like Mother's Day and other things fell during the quarter and that can have an impact on things. But we fully expected that volatility. I think, at MEANY, we talked about what we expected and we met or exceeded all those expectations. Is there a second part?

And then also, Gracia, if I could -- yes, my second question, your daily and Sunday circulation, what's the percent change there for volume in the U.S. excluding USA TODAY?

Yes, I think in U.S. Community Publishing on a daily basis, it was down about 7.5%. Recall that we have been ramping, as I said, the single-copy prices and we've been introducing the content subscription model. I will tell you that our volume losses are well within, as I said, what we modeled when we shared all of this in February. So we would expect that temporarily those losses would increase, but they are well within the model that we put together to arrive at what we think the contribution is going to be.

And what was Sunday, please?

And Sunday was down about 8.5% or so.

Okay. And then also if I could ask 2 other quick ones. Your investment spending this year of roughly $65 million, what is your expectation right now? How much of that might reoccur next year or was it all just onetime this year?

A lot of it is onetime in terms of technology infrastructure and some of the ramp-up costs on technology around the subscription model. And some of it, frankly, will depend on how quickly things like Digital Marketing Services ramp and other things. So it's a little early for us to say what will recur or not recur next year. Frankly, we'll be happy for some of it to recur because that will certainly show the successes that we are seeing from a lot of these initiatives.

And then lastly, just kind of big picture question, given your 80 newspapers in the U.S., 23 TV stations, what is your sense with all your managers and salespeople on the street out there, what is your general sense of how the economy is doing? What can you help us to kind of think about at the local level across your various platforms in the U.S., how the economy is doing overall.

I think, as we always say, it's a mixed bag. Everybody always talks about the economy as if it's just one thing, but it's really made up of all the local economies, an amalgamation of all of them. And what we see is varying trends. We, as you know, always take a look at California, Arizona, Nevada and Florida. And in those states, what we saw was that auto advertising was -- classified advertising was negative in those 4 states, but positive in the rest of the states. A similar picture on employment. But then in a more macro way, I think what we're seeing right now is some of the southern states being a little weaker and New Jersey being a little weaker than what we've seen in other parts of the company -- country. So it's a bit of a mixed blend of things. You also have the overlay, obviously, around the uncertainty of the election. And you can see that a little bit in some of the retail spend this morning where consumers seem to pull back a little bit given some of the uncertainty they see out there. But as we all know, this has been a volatile several months in the economy, and consumer sentiment and marketer sentiment can change on a dime depending on what the last numbers that come out are. So a little bit hard these days to have a crystal ball that gives you the precision that all of us would love to have. But I think it's a mixed bag, in some economies doing well and some struggling a bit more.

And just lastly, if I could, tax rate for the year. I think your guidance back in December was like in the low 30s. I think it was, on adjusted basis, like 28%, 28.5% this quarter and last. What should people model in for the back half of the year, including potentially onetime items?

Yes, actually, I think when you adjust it as we said in the earnings release, when you adjust it, you have to set out the special charges because they sometimes carry a different tax rate. But I think our tax rate adjusted for that came in at 31% because it's not just a simple calculation of taking an IBT and applying a tax rate. You really have to go through the components. So our actual effective tax rate was about 31% for the quarter. A lot will depend on what settlements we have during the quarter, what percentage our overseas earnings represent of total earnings, et cetera, et cetera. So there's a lot of factors. I think the overall guidance that we gave late last year of low 30s is probably -- low to mid-30s is not a bad range and it'll just depend on what happens during the course of the quarter.

But not to get too much in the weeds here, Gracia, but on Table 5 here on the far right side, the non-GAAP measure excluding all these onetime items, it shows here taxes of $59.3 million, divide that by the $207 million for income before income taxes, you get 28.6%. Is that not the right way to look at that?

No, because...

Because that's the number I'm focusing on.

Yes, because you've also, I think, have some minority interest in there that has a different kind of tax effect. So what we'll do is rather than bore everybody on the call with these details, offline, Jeff will give you a call and he'll walk you through chapter and verse of how we arrive at the 31%.

And we'll take our next question from Doug Arthur with Evercore.

Yes, Gracia, 2 quick things. On the Digital segment, you talked about CareerBuilder up 7%. Can you just expand on kind of what's going on in the non-CareerBuilder businesses such as PointRoll? And then secondly, on interest expense was down quite a bit sequentially in the quarter. Did some of that have to do with the refinancing of the April '12 notes, or what else is behind that?

Well, let me take your last question first. Yes, we refinanced, obviously, part of the notes that came due in -- from cash as well as from our revolving credit agreement. Our revolving credit agreement right now has -- is tied to LIBOR, whatever LIBOR is these days. And so that borrowing is around 2.5%, 2.6% versus the higher rate we were paying on that debt. And then we're also cycling some of the payoff of some other -- payoff of some shorter-term debt with longer-term debt last year that took place that we also have to take into account. So you're absolutely correct in focusing in on that. Then as to the non-CareerBuilder elements of our Digital segment, we have a couple of small pieces in there that reflect businesses that were acquired in the last year or 2 where we are investing in their -- those businesses in a more meaningful way to scale them up, to ramp them up. And so from quarter-to-quarter, there's going to be some volatility in their earnings. And then at PointRoll, obviously, the good news at PointRoll is that they saw an 18% increase in the number of advertisers that worked with them this past quarter. They saw additional campaigns but they did see there is pretty much globally pressure on pricing. And so they, too, as a business are looking at redefining some of the things that they have historically been doing and repositioning themselves for other areas of growth. So I think that sort of, in a nutshell, gets you to what I think you're looking at. Hopefully, that was helpful.

And we'll take our next question from Jim Goss with Barrington Research.

Gracia, just to look at the all access model, stage 1 is basically what you're in the middle of, of raising the prices in print, single-copy and observing some hit on the circulation, hopefully stabilize the units. And then stage 2, which I think you indicated at the recent meeting wasn't very far along in terms of selling the all access subscription to previous nonsubscribers, starting at least with the digital form. When does that kick in, in full force? And what sort of process do you think you're going to be able to use aside from just making -- maybe cutting off web users after certain limited access to sort of engender the added circulation on that basis?

Thanks for the question, Jim. I think the -- maybe to recalibrate, really there isn't stage 1 and stage 2. In the markets where we are introducing the all access content model, at the same time we are also introducing for most of those markets single-copy price increases. So both of those things are going on at the same time. And so as a result, as I mentioned, and we shared in February, we expected that single-copy losses would be in a range of 30% to 40%. Actually, we're doing much better than that in the places where we have instituted that. And then on all access, we also gave ranges that we thought that the all access would impact circulation by about 5 percentage points more than the trend of circulation. In fact, we're doing better than that. On the digital-only, what I would say is that, that is another component of it. But the first 2 components we just talked about, at this point, are the lion's share of what we expect is going to drive the results that we've talked about, that $100 million contribution next year, et cetera. On the digital-only, that's something that we are now really focusing more on from a sense of marketing as well as from a sense of additional offerings, et cetera. But what I will tell you on that is that we are finding that most consumers that we're talking to want to have some frequency of home delivery of the print product in addition to their all access content of all of our digital platforms. That's the vast majority of the consumers that we are dealing with so far. And so that, we believe, is a good thing. But certainly for those who are nonsubscribers or who have not in the past had the experience of interacting with our content, this is a new opportunity for them and so we expect that, that will grow gradually. But none of that, to any degree, was built into the modeling that we did in any meaningful way. Most of it depended on the all access and the single-copy price actions.

Okay. And a couple of related things to that. To the extent that you've had some decline in the unit sales, has that had some impact on the ad revenues you've shown since I presume they're on a CPM basis?

Yes, as I mentioned, I think Bob Dickey indicated at MEANY that from the standpoint of advertising, we are fulfilling every digital campaign, so it has not been an impact there. The other area where it could be an impact obviously would be in preprints where those are based on specific volumes. So to the extent that there's a little bit of an impact on preprint, that was already factored into the models. But everything we assume from an advertising perspective in the short term, we are doing a little bit better than. But ultimately, we believe that by providing new platforms, so having mobile apps and having more robust desktop offerings and having other ways to interact with our content, that opens up additional opportunities for marketers and advertisers to interact with our consumers. And ultimately, during the course of these next few years, we see that as a net plus to the advertising picture.

So they'll be packaged in, basically, in an all access advertising basis as well?

Certainly, that's a possibility along with a variety of other alternatives.

Okay. A couple of final quick things. Are you employing or do you plan to employ any of these strategies at Newsquest? And then perhaps Dave would want to comment on any retrans impact you might see from Arrow?

Sure. Just really quickly on Newsquest. Yes, as we mentioned both in February and again in late June, Paul and his team have conducted a strategic initiative program there. They are just looking at some of the same things that we've been looking at from a circulation standpoint. But you've got to realize that their market is a little different. Where we have a preponderance of home delivery here in the U.S., they are primarily single-copy in the U.K. and they have a lot of free publications, but they are looking at piloting as we did some pricing actions on single-copy. As well on Digital Marketing Services, obviously, that's an area that transcends geography so that's something that obviously scaled to their particular market they'll be focusing in on, and they have very good traction right now on digital. Their digital revenues are up about 10% and they're making some really good progress on the digital front and being focused there as well. And Dave, do you want to close out by answering the retrans question?

Yes, just on Arrow, don't have much to say about it. It's in the early days of the legal fight over that and I think broadcasters, based on the opinions we've gotten, feel fairly good about our legal position on that issue. But and even despite that -- separate from that, it's one of the many distributors and we'll see how it plays out. So it's real early to project what, if any, impact it will have.

I realize it's 11:01. I think we want to have one more question. We'll take one more question and then you've been incredibly indulgent with your time.

And we'll take our next question from Michael Kupinski with Noble Financial.

I'm just following up on Doug Arthur's question. Can you provide some color on your thoughts on the Digital segment revenue for the third quarter and maybe provide your thoughts on the margins for that segment going forward? And then finally, given all the moving parts that you have in your newspaper Publishing division with the access model starting to kick in, lower employee cost and obviously looks like weaker Newsprint prices, do you have any thoughts on margins for the second half of the year? It seems like you're kind of managing yourself to kind of maintain a certain level of margins. Can we expect that margins could improve year-over-year by at least 100 basis points? Or what it -- do you have any thoughts on what the margin improvement could be?

Sure. With respect -- let me just say globally on margins, we don't manage to margins. We manage to bring in revenues and have a very strong bottom line along with that. And so quarter-to-quarter, we're not managing to certain margins. We're running the business for a successful future, and we're making the investments we're making because we believe it's important for us to continue to follow consumers where they are going and allow the advertisers and marketers we serve to engage with them effectively on whatever platform they want to engage on. I think on the digital revenue front on the Digital segment, a lot of that is driven by CareerBuilder. Some of that will depend obviously on where the jobs market goes, but some of that clearly depends on the great innovations that they have been doing around the product set. So we would anticipate, we're hopeful that our revenue growth in the third quarter will be at or above the level that we've generated in the second quarter. And from a margin perspective again, particularly in that segment, that's not an area where we manage margins quarter-to-quarter. We manage -- we always manage incredibly well from an expense perspective. We are diligent. We are fiscally responsible. We're managing to drive revenues because we know that by driving revenues, given the financial discipline we have, a lot of that money will flow to the bottom line so we feel very good about what we can accomplish there. And we -- obviously, there are going to be vagaries, particularly in small new businesses that start up, in investing in them, and we're not going to hold off on an investment just because a margin is a certain level in a certain quarter. But the one thing you can always count on that Gannett Co. to do is to be very fiscally prudent and we will make sure that every dollar that we spent on investment we have a clear track to providing ultimately a very strong return on those dollars.

Fair enough, Gracia. In terms of then your investment spend, you had mentioned repositioning PointRoll and so forth. Do you have any thoughts about how that might be impacted going into the third quarter?

I think we've talked about the potential for initiatives spend to be in that $10 million to $15 million range, and I think that it will fall within those parameters. Good. Thanks very much, Mike, and we appreciate all of you joining us today. I know it was a little bit longer session than normal. We appreciate your interest and we also appreciate the terrific job that all our employees are doing to help us succeed. So have a great day, and if you have any additional questions, please call Jeff Heinz at (703) 854-6917. Have a great day.

That concludes today's conference call. We appreciate your participation.