Good day, everyone, and welcome to Gannett’s Q3 2014 Earnings Conference Call. This call is being recorded. (Operator instructions.) Our speakers for today will be Gracia Martore, President and Chief Executive Officer; and Victoria Harker, Chief Financial Officer. At this time I’d like to turn the conference over to Jeff Heinz, Vice President Investor Relations. Please go ahead, sir.

Thanks, Jaime. Good morning and welcome to our earnings call and webcast. Today our President and CEO Gracia Martore and our CFO Victoria Harker will review Gannett’s Q3 results. After their commentary we’ll open up the call for questions. Hopefully you’ve had the opportunity to review this morning’s press release. If you’ve not seen it yet it’s available at www.gannett.com. Before we get started I’d like to remind you that this conference call and webcast 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. We’ve 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 good morning everyone, and let me join Jeff in welcoming you to our Q3 earnings call. Today I’m going to provide a high-level summary of Gannett’s performance in Q3 during which we reached some significant milestones in the continuing evolution of the Gannett Company. After that Victoria will review the financial results of each of our segments, provide some detail on special items and cover some balance sheet items. And Dave Lougee and Bob Dickey are here with us as well to help during the Q&A session. So let’s get right to it. We achieved outstanding Q3 results with each of our three businesses turning in solid performances during the quarter. Total company revenue as you saw was $1.4 billion, an improvement of approximately 15% over Q3 2013. On a pro forma basis, revenue growth of 4% once again outpaced expenses during the quarter reflecting our unflagging efforts to ensure that we are operating at the absolute highest levels of efficiency. With a sizable increase in revenue and expenses held in check, earnings per share were $0.59 on a non-GAAP basis, a substantial increase of 37% over Q3 last year. Our operating income and adjusted EBITDA showed meaningful improvement with double-digit growth on a non-GAAP basis and pro forma basis. In addition we achieved another strong quarter of free cash flow, generating an increase of 76% over Q3 last year. Now we had an extremely busy and productive Q3 as you saw, and that included some developments that you all are aware of, such as the announcement we made in early August regarding our acquisition of all of Cars.com and our plans to separate into two highly-focused, industry-leading publicly-traded companies of scale. But we also continued to advance our strategic transformation plan behind the scenes as you’ll…

Thanks, Gracia, and good morning everyone. As Gracia’s already mentioned the Q3 financial results highlight the outstanding progress we’ve made in the strategic transformation of our company. Before I review the results by segment as well as our capital allocation efforts during the quarter I’d like to spend a few minutes reviewing several special items which are included in our results to help provide additional context for our recurring trends. During the quarter, our ongoing efforts to transform the business, initiated over two years ago, resulted in greater operating efficiencies and effectiveness across the portfolio as well as new revenue opportunities. To that end this quarter we incurred $3 million in workforce restructuring expenses coupled with $7 million in other transformation costs related to restructuring our real estate portfolio. These operating special items totaled $10 million with an EPS impact of about $0.03 per share. From a non-operating standpoint during the quarter we incurred $20 million in costs related to the London Broadcast and Cars.com acquisitions as well as our planned spinoff. As a result, total operating and non-operating special items for the quarter were $30 million with an associated GAAP EPS impact of about $0.10 per share. In addition, during Q3 we also recognized a $6 million favorable tax adjustment on the sale of a television station with an associated EPS benefit of $0.02 per share. Beyond this, during the quarter we incurred $11 million in costs associated with our strategic initiatives spending which continue to drive significant cost savings. Our efficiency programs include further consolidation of our printing and distribution platforms as well as our real estate footprint, the hubbing of our financial support organizations and streamlining our customer service efforts. As a result of these savings we continue to invest in our new initiatives. Let’s turn to…

Thanks, Victoria. We have clearly momentum building across many areas of our business and we are relentlessly focused on finding every opportunity to better serve our audiences. Our strong, predictable cash flows and healthy balance sheet provide us with the financial flexibility necessary to fuel these efforts and to make investments that will continue to drive growth. We feel really good about the way each of our businesses is positioned amid today’s increasingly digital media landscape. Clearly our Publishing and Broadcasting businesses are buttressed by strong digital strategies. The needs and preferences of our readers and viewers may be changing but we have used that dynamic to our advantage as we have developed and continue to develop new and innovative ways to reach them. We are also very optimistic about where we are with digitally-focused offerings, especially given the addition of Cars.com to our portfolio. We expect to close out 2014 on a very good note, and while we are looking forward to the closing of our separation transaction for the next few quarters we remain laser-focused on executing the strategies we’ve outlined and delivering consistently positive results across each of our business segments. Before we move to Q&A I want to remind everyone that next Wednesday, October 29th, we’re hosting an investor meeting focused on our newly-expanded digital portfolio, specifically the two major pieces Cars.com and CareerBuilder as I mentioned earlier. The meeting will be held at 9:00 AM at the Parker Meridian in New York City and we are looking forward to seeing many of you there. If you have any questions about the event please call Jeff Heinz and you can reach him at 703-854-6917. Now I’d like to open it up for questions. Operator?

Thank you. (Operator instructions.) And we’ll take our first question from William Bird with FBR. William Bird – FBR Capital Markets: Good morning. Gracia, where does your ABC renewal stand? Is your reverse payment in the expense base yet? And though it wasn’t under ownership do you have a sense of how Cars performed in the quarter? Thank you.

Let me start with the ABC negotiation and with respect to whether the expected expense for reverse retrans – we have been accruing at what we think is the appropriate level since the expiration of the affiliation agreement earlier this year. So that is in fact baked into our expense numbers in the quarter. We have been having a very collaborative and good set of conversations I think we are you know, soon to conclude those negotiations and I believe that they will be good for both of our companies and reflect the strong partnership and good feelings we have towards ABC. Dave, I don’t know if you want to add anything?

Yeah, I’ll just add that obviously for the Belo stations, that agreement doesn’t end till the end of this year so those numbers were also already in there as you pointed out. So as you said we’ve been accruing for the Gannett stations and it’s not uncommon for ABC in the past, for those deals to go on for many months just as we work through a lot of issues. But we’ve worked through an enormous amount of issues, more than I think have been done in the past and some signed agreements. So as Gracia said we’re working through them and it’s been a very good process, and we should be wrapping up very soon.

And on Cars.com I frankly haven’t seen the numbers but I believe they’ve done exactly what we had hoped if not slightly better. William Bird – FBR Capital Markets: Thank you.

Thanks, Bill.

And we’ll take our next question from Jim Goss with Barrington Research. Jim Goss – Barrington Research : Thanks, I’ve got a couple of them, one relating to Broadcasting. CBS and FOX have both been more aggressive in terms of programming cost payments or reverse comp demands and also in terms of affiliation agreements. And I’m just wondering your view of the impact on the industry environment in terms of acquisition potential and revenue opportunities.

Yeah, let me start and then I’ll ask Dave of course to jump in. First off, you know, I can’t really speak to FOX because we don’t have any, we have two small FOX affiliates but that’s clearly not an issue for us. With respect to other affiliation agreements, the only negotiations we have had are with ABC so I really can’t speak specifically to CBS or for that matter to NBC at this point. To refresh everyone’s memory, our CBS agreements don’t come up for renewal until the end of next year and NBC in early 2017. But you know, I think I would say conceptually that there’s been a lot of speculation by a lot of folks, with emphasis on “speculation” but not necessarily a lot of facts. And there have been a lot of different-sized groups and individual stations that we hear lots of things about in the marketplace. But I have to tell you I think we all have to remember that there are really two pieces to this equation: first the retrans side where we continue and will continue to work on closing the gap between what we are paid for our content and the value we provide versus what others such as some sports folks are paid. And we are working each and every time we negotiate to close that gap and appropriately reflect our value. Now, on the reverse retrans side you know, there’s lots of different formulations out there that we are hearing but I think it all boils down to we believe in having strong relationships with our network partners. We believe in them getting fair value for what they bring to the table and you know, we particularly appreciate the great job that Les has done with respect to programming…

I’ll begin it but then I’ll smartly turn it over to Bob Dickey. What I’d like to say and reinforce is that the addition of those USA Today sections as you heard me talk about earlier and the impact that we are seeing on the value that our subscribers feel and have expressed; and the less likelihood to churn their subscriptions, and their engagement with this content – both the USA Today section and the paper as a whole – I think bodes very well for not only our circulation revenue but I think it bodes well for our conversations with advertisers. But Bob, why don’t you jump in here?

Yeah, we’re very, very happy with the results in our larger markets. Frankly they’ve performed slightly better than we had projected. And to Gracia’s point, in the markets for which the local USA Today edition is included, those markets, our top 30, 35 markets are performing a number of percentage points better than the smaller markets that at this time do not have a full USA Today local edition. So from a circulation standpoint we’re very happy with both the volume, the retention at this point in time, starting with our largest market – Phoenix – which is doing very well with their most recent price increases. As it relates to advertising trends, that is really not as much a market size as a geographic issue. Certain parts of the country like the Northeast are more challenged than where we’re seeing some great results like in the Midwest and the state of Florida. Jim Goss – Barrington Research : Alright, thank you very much.

Thanks, Jim.

And we’ll take our next question from Doug Arthur with Evercore. Doug Arthur – Evercore Partners : Gracia, you lost me a little bit on your expectations for political in Q4. You were making various comparisons to the last midterm and then to ’12. Can you just go over those again? And I’m wondering if Dave could kind of break down the “other” category, the $33.964 million that you broke out in terms of TV – how does that break down? Thanks.

Yeah, let me start and I apologize for any confusion that I caused. Let me start by saying we had record political and we will have record high Q4 political for a non-Presidential year this year. In Q4 what we’re looking at is an expectation that political will be you know, anywhere to high-singles to even potentially, depending on runoffs and the like, low-teens above 2010’s Q4. And against 2012, if you exclude Presidential which is typically I think around 35% of political, then we will see a nice increase against what we accomplished ex-Presidential in 2012. So we feel extremely good about political and believe that once again political is really an important… Political spending finds strong affiliate television in those markets where there are competitive races to be the compelling vehicle to advertise on. You know, getting to the portfolio it depends on your footprint a lot, and in Little Rock for instance we’re having a tsunami of political this year whereas in 2012 and 2010 there was virtually nothing. In Denver we’re ahead of 2012 in Q3 which included Presidential last time and will I think double what we achieved in 2010. And I could go on and on but really it’s the footprint, it’s the strength of your station in the market and then it’s really smart inventory management, and we are blessed with the fact that we have all three of those things going at the same time.

And Doug, to your second question, the majority of that $33 million is digital and a few various other revenue streams that we’ve got at some stations. But the vast majority of that is digital. Doug Arthur – Evercore Partners : Okay, and just as a clarification, Gracia, when you’re comparing Q4 ’14 to ’10 is that pro forma?

Yes, absolutely, yes. Yes, totally. Doug Arthur – Evercore Partners : Okay, thank you.

Thanks, Doug.

And we’ll take our next question from John Janedis with Jefferies. John Janedis – Jefferies : Hi, thank you. Good morning, Gracia. I’m just wondering, back to reverse retrans for a moment, would there be any benefit or would you consider negotiating the CBS or NBC deals early? And then are you increasing your hours of local news?

To be honest with you on CBS, the affiliation agreement is coming up at the end of next year so we will be talking with them into 2015 – so I’m not sure there’s anything really early that we would be doing there. And you know, we’ll just have to see how these things play out. Dave, do you want to talk about additional hours of news programming which is what we’re doing.

The answer is yes we are. I don’t have that number right in front of me but each year we add more and more news programming – not just news programming but also local non-news programming. So we continue on a pro forma basis, to the last question; we are adding all the time. John Janedis – Jefferies : Okay, great. Thank you.

Thanks, John.

And we’ll take our next question from Joan Lappin with Gramercy Capital. Joan Lappin – Gramercy Capital : Good morning and congratulations on more good work. I have one question about Digital, which is it grew 4% but at some point aren’t we expecting that growth to accelerate to a higher percentage than that if that’s your future?

Absolutely and I think you’re going to see that even more manifest in Q4 as we fully consolidate Cars.com. And on a pro forma basis that accelerates certainly that growth rate. I think also at CareerBuilder where they’ve done a fantastic job as Victoria pointed out in not only ramping up their new product developments in what I would think we would all argue has been, at least until fairly recently a very tepid job environment. And I think in the acquisitions that they have done over the last couple of years that Victoria mentioned in Broadbean and EMSI they are very much focused on the faster-growing software as a service business and data analytics around employment solutions. So I think what you’re going to see is absolutely that steady progression of increasing Digital segment revenues over the next several years as many of the investments we’ve been making in that business continue to ramp up. Joan Lappin – Gramercy Capital : One segment, Gracia, that you had made a big fuss about three years ago was sports and you don’t talk about that much anymore. So is that one of those segments or is that, you know…

Well actually sports would not be in the Digital segment. Let me just go back: in our Digital segment we include our ownership, our 53% ownership of CareerBuilder and ShopLocal, PointRoll and a couple of other smaller digital businesses. The digital revenues with respect to our sports initiatives and other initiatives that our Broadcasting group and our Publishing group do are embedded in their numbers. So when we talk about the growth of digital in Publishing for instance and in Broadcasting, that would encompass those kinds of initiatives. And in fact I think we talked about digital growth at USA Today being very, very strong this quarter. So we are seeing that digital growth in those divisions, and then the segment itself includes the businesses that we own like CareerBuilder, soon-to-be Cars.com, ShopLocal, PointRoll and a couple of other small businesses. And then obviously Broadcasting’s digital revenues were up 20% in the quarter. So I think you see that as we mentioned those numbers that we are seeing the growth in digital in our divisions as well as in our Digital segment. Joan Lappin – Gramercy Capital : Thanks.

You’re welcome. Joan Lappin – Gramercy Capital : See you next week.

Yes, I look forward to it.

And we’ll take our next question from Alexia Quadrani with JPMorgan. Alexia Quadrani – JPMorgan : Hi, thank you. Gracia, you mentioned I think in your opening comments about the crowding out of the core advertising due to the strong political in the Broadcasting segment. I guess is there any more color you can give on the health of the underlying advertising. Obviously the softness seems to be skewed because of the political – I guess any color on the overall health of that market just in general would be great. And then just a follow-up on your newspaper commentary, your ability to generate the nice increases in circulation revenue in part because of the insertion of USA Today. I guess when you circle all that do you think there’s still room for any price increases on that printed copy?

Let me start with the Broadcast question and I’ll certainly ask Dave to jump in as well; and then I’ll ask Bob Dickey to share with you pricing opportunities. With respect to the core I think universally folks were disappointed with national advertising in Q2 – it was softer. There were a variety of reasons including The World Cup and other events that perhaps muted national advertising. And at the time, during our Q2 earnings call we indicated that we saw improved broadcasting results – not necessarily positive for Q3 because of that displacement pattern but certainly improved from Q2. And that is in fact exactly what happened. In fact, in July national advertising was up a few percent; and then obviously as political crowded out and pricing obviously for political goes up we saw national being more tempered. But again national in totality in Broadcasting for Q3 was better than what we saw in Q2, and similarly for USA Today they saw a better national outcome in Q3 than they saw in Q2. So it’ll be a little tough in Q4 obviously to be able to demonstrate that underlying strength in our core business because when you think about the level of political that we will write primarily in a month and a week it’s extraordinary. And so I was just in Little Rock a couple of weeks ago and frankly I was tuning into our station of course, and I have to tell you it was political ad after political ad after political ad – which was wonderful to see, great for democracy, but obviously didn’t leave a lot of room for other folks who wanted to advertise their products and services. But Dave, why don’t you add anything you’d like?

Yeah, just to expound on what you said about national – national was better in Q3 on an absolute basis even with political displacement which is significantly higher in Q3 than in Q2. So what we had said on the last call, that national was improving on an absolute basis, is true. Alexia Quadrani – JPMorgan : Alright, thank you.

Thanks, Alexia. I think we have time for one more question.

Thank you, ma’am, and that final question will come from Craig Huber with Huber Research Partners. Craig Huber – Huber Research Partners : Yes, good morning, Gracia, just a few simple questions here. The first one if I could: what was the organic auto TV advertising percent change there in the quarter and how is that tracking for Q4?

Obviously auto advertising like many of our other categories was impacted, and that’s particularly a category… Since it’s about 25% or so of our advertising spend in Broadcast – that’s particularly a category that’s going to be impacted by that phenomenon that I just talked to you about that I saw in Little Rock. So it’s really hard for us to give category numbers because I’m not sure that they’re in any way meaningful. Craig Huber – Huber Research Partners : Okay. And then can you talk a little bit further, if you’d just maybe update us on your outlook for the Belo cost savings and synergy numbers versus what you originally gave investors? It obviously closed about ten months ago but how have those numbers changed please?

You know, we’re very, very pleased with what we have been accomplishing with the Belo stations. As we said at the time that we acquired them these were incredibly strong stations and we could take advantage of number one, our after-acquired clauses in many of our retrans agreements; but as well obviously some corporate expense and some other things that we could just consolidate as we have already consolidated them in the Gannett stations. And so I think at the time we said we would achieve synergies of about $75 million, Victoria?

Right, and it’s been a little bit even better than that as I just said in my remarks, about $0.43 so right on target for us.

Yeah, if not ahead of that number. So that’s a real homerun for us and we’re delighted with the progress that we’ve made there, and we’ve got the new London stations in Texas that we’re equally as excited about and enthusiastic about and they’re doing a wonderful job integrating into the family over these last few months. And we’ll be doing a lot of work there as well to help them with integrating into the scale of the Gannett Company. Craig Huber – Huber Research Partners : Then lastly, Gracia, if I can ask you on network compensation – you touched on a lot about this today – but is there anything you’re hearing from the broadcast networks, or do you see it playing out this way, that the TV station affiliates would maybe take on some more inventory during the prime time hours or other, what had been traditionally broadcast network hours; or more advertising inventory you would take on but you would have to pay a higher network compensation?

I’m going to ask Dave Lougee to speak to that.

Hey, Craig. We’ve always had good dialogs with the networks about where there may be a better trade of inventory. When we did a deal with NBC on the Olympics a few years ago there was some inventory – they coveted that. Maybe it was of more value to them than to us. So that’s always going on at an affiliate board level across the industry, not on a group-by-group basis as part of any discussion. So those would not really be tied into affiliate contracts but it would be part of the overall affiliate relationship and does happen all the time. Craig Huber – Huber Research Partners : Okay, thank you.

Thank you. And we very much appreciate all of you joining us today and sharing in the great news that we had to deliver today. If you have any lingering questions please give Jeff a call and thank you all so much for joining us and spending time with us.