Gannett (GCI)

Q4 2011 Earnings Call

January 30, 2012 10:00 am ET

Executives

Jeffrey Heinz - Director of Investor Relations

Gracia C. Martore - Chief Executive Officer, President and Director

Paul N. Saleh - Chief Financial Officer and Senior Vice President

Analysts

Alexia S. Quadrani - JP Morgan Chase & Co, Research Division

Craig A. Huber - Access 3:42, LLC

Douglas M. Arthur - Evercore Partners Inc., Research Division

John Janedis - UBS Investment Bank, Research Division

James C. Goss - Barrington Research Associates, Inc., Research Division

William G. Bird - Lazard Capital Markets LLC, Research Division

Michael A. Kupinski - Noble Financial Group, Inc., Research Division

Leo Kulp - Citigroup Inc, Research Division

Edward J. Atorino - The Benchmark Company, LLC, Research Division

Avi Steiner - JP Morgan Chase & Co, Research Division

Presentation

Operator

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Good day, ladies and gentlemen, and welcome to Gannett's Fourth Quarter 2011 Earnings Conference Call. One note that today's call is being recorded. [Operator Instructions] Our speakers for today will be Gracia Martore, President and CEO; and Paul Saleh, Chief Financial Officer. At this time, I'd like to turn the conference over to Jeff Heinz. Jeff, please go ahead.

Jeffrey Heinz

Thanks, Sarah. Good morning, and welcome to our conference call and webcast to review Gannett's Fourth Quarter 2011 Results. Hopefully, you have had the opportunity to review this morning's press release. You can also find it at www.gannett.com. Before we get started, however, I need to remind you that this conference call and webcast include forward-looking statements. 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 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.

Gracia C. Martore

Thanks, Jeff, and hello, everyone. Given our recent update at the UBS conference and as you may know with our Investor Day just 3 weeks away, we're going to keep our comments brief this morning as we will be providing a comprehensive look at our businesses, opportunities and related financial policies that day. This morning, I'm going to provide an update on a few of our strategic opportunities and review our results for the quarter. Our Chief Financial Officer, Paul Saleh, will then provide a more detailed discussion of our quarterly results and some balance sheet items and then, of course, we'll open it for questions. Each of our business segments, as always, was solidly profitable in the quarter and for the full year during a period in which the economy showed modest but uneven growth. Our confidence in the ability of our businesses to continue to consistently deliver substantially free cash flow, several hundred million dollars this year despite the economic and secular headwinds, enables us to continue to fund a range of projects important to our future, return capital to shareholders and pay down debt.

Now that we are finished with 2011 and are looking towards 2012, we are well on our way to becoming a leading global media and marketing solutions company. Our powerful 100-plus local markets, combined with our iconic national brands, puts us in a great position to provide the most engaging and high-quality content for our audiences and impactful solutions for advertisers and marketers. Our goal at Gannett is to position our company for future growth and continue to expand our revenue opportunities in the face of modest economic growth and secular change. We also are reshaping our local news organizations by enhancing our content to meet increasing and changing media consumption habits across all platforms: online, tablet, mobile, broadcast and print, and adapting our subscription model to the new media landscape. And we are building businesses that will maximize those strategies extending the reach and enhancing the strength of our rich and recognizable brands. In addition, we are making smart investments for the future as well as increasing the efficiency of our operations. Already underway are several key actions that will help us achieve our vision, which is to be the place consumers turn for trusted news and information, and the partner advertisers choose to reach and engage consumers, particularly in the local markets we serve.

Let me start by telling you how we are reshaping local news. To achieve this, our content as always is key. We are focused on providing trusted, relevant, uniquely tailored content that is a high value in the communities we serve, and we are expanding and maximizing our ability to offer that content via multi-platform distribution channels, meaning we are meeting our consumers wherever and whenever they want. To that end, we have relaunched 100 mobile websites across our local publishing and broadcasting markets that generate 40 million mobile page views per month. In the fourth quarter, we launched iPhone news apps in 15 TV markets that have been downloaded by 260,000 users and generate 1.5 million page views per month in those markets. Currently, we are piloting a new subscription model in 6 markets that builds on the tests we did in 3 markets we've previously mentioned and builds on a better understanding of consumers' needs and preferences. All subscriptions in these markets will include full Web, mobile, e-Editions and tablet access, as well as the reader's choice of frequency of print edition home delivery. Digital access for nonsubscribers will be limited to a small number of free articles per month. This new subscription model appropriately values the unique, local engaging content being produced by our journalists and noted experts in every community we serve. The ability to engage consumers across multiple platforms provides greater value to our business customers, enhancing the ways they reach and connect with local consumers and prospects.

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