## Letter… 

F inally, 2001 is behind us. We knew at the outset that 2001 would be a difficult year. Without the spending generated by the Olympics and elections, and with all indications of a slowing economic environment, we anticipated tough times and prepared for them long in advance. 

But no one could have predicted what happened. The adver- tising environment developed into the worst since World War II. And the events of Sept. 11 were a devastating blow to the already shaky economy. The attacks changed us, changed the company and changed the world. 

Gannett met the challenge. At all our newspapers and television stations, at all our assorted operations and at corporate headquarters, Gannett employees hunkered down and worked. We produced newspapers and television broadcasts that were read or watched by millions more people than ever before. 

The Gannett culture kicked in and people did the day-to-day work of the company with dedication, creativity and intelligence. I am very proud of this company’s people and the way we persevered in 2001. 

In the end, the numbers are not the best we’ve ever had. But our geographic diversity, aggressive cost controls and the hard work of our employees led to one of the best year-over- year earnings in the industry, despite the fact that Gannett has always operated tightly and has some of the highest margins in our business. 

Operating cash flow was $2 billion, down 7% from 2000. Earnings per share from continuing operations were $3.12. Revenues for 2001 were $6.3 billion, up 2% over 2000. 

And there are other bright spots. 

The Internet operations of Gannett’s community newspapers in the aggregate were profitable. This achievement was the result of Gannett’s management philosophy: We simply used caution and wisdom in our approach to the Internet notwith- standing the wild business climate surrounding dot-coms during the past few years. Our rule was to treat the Internet as a busi- ness, and it paid off at the local papers in 2001. Meanwhile, USATODAY.com is suffering revenue declines similar to other national sites. 

Internet operations at Newsquest plc, our division in the United Kingdom, also were profitable. Revenues from all our Internet efforts were about $71 million. 

Newsquest’s operations overall eluded the economic pres- sures that restricted our units in the USA. But we are seeing signs that the U.K. will have some weakening in 2002, especially in employment classifieds. Even so, many economists there predict they will have more positive growth than is projected for the U.S. or the Eurozone. 

The Broadcasting Division proudly reached a milestone in its goal to have top-rated local news shows in each of our markets among the key demographic of adults ages 25-54. For the first time in 2001, all of the stations were No. 1 or No. 2 in their 

