Exhibit Index begins
                                                on page 11


                SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.   20549

                            FORM 10-K
(Mark One)

 X   Annual report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 [No Fee Required] for the fiscal year ended
     December 28, 1997 or
___  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 [No Fee Required] for the transition period
     from ______________ to _____________.

Commission file number         1-6961

                        GANNETT CO., INC.
      (Exact name of registrant as specified in its charter)

          Delaware                           16-0442930
(State or other jurisdiction of   (I.R.S. Employer Identification No.)
 incorporation or organization)

1100 Wilson Boulevard, Arlington, Virginia        22234
(Address of principal executive offices)       (Zip Code)

(Registrant's telephone number, including area code)  (703) 284-6000

Securities registered pursuant to
Section 12(b) of the Act:
                                      Name of each exchange
Title of each class                   on which registered

Common Stock, Par Value $1.00         New York Stock Exchange

Securities registered pursuant
to Section 12(g) of the Act:

               None
         (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.  Yes X   No __


                                    -1-

<PAGE>

   Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.  [  X   ]

   The aggregate market value of the voting stock held by non-affiliates
of the registrant as of March 2, 1998 was in excess of $17,768,178,823.

   The number of shares outstanding of the registrant's Common Stock,
Par Value $1.00, as of March 2, 1998 was 284,289,821.

Documents incorporated by reference.

   (1) Portions of the registrant's Annual Report to Shareholders
for the fiscal year ended December 28, 1997 in Parts I, II and III.

   (2) Portions of the registrant's Proxy Statement issued in connection
with its Annual Meeting of Shareholders to be held on April 28, 1998.


                                    -2-


<PAGE>

                       CROSS REFERENCE SHEET

     The information required in Parts I, II and III of the Form 10-K
is incorporated by reference to sections of the Company's 1997 Annual
Report to Shareholders ("Annual Report") and its definitive Proxy Statement
for the Annual Meeting of Shareholders to be held April 28, 1998 ("Proxy
Statement") as described below:


Part I


Item 1.   Business.                Form 10-K Information (Annual Report
                                   pp. 53-62); Note 10 - Business Segment
                                   Information (Annual Report p. 48).


Item 2.   Properties.              Properties (Annual Report pp. 57, 59
                                   and 60); Corporate Facilities (Annual
                                   Report p. 62); Markets We Serve (Annual
                                   Report pp. 68-72).


Item 3.   Legal Proceedings.       Note 9 - Commitments, Contingent
                                   Liabilities and Other Matters (Annual
                                   Report p. 47); Regulation (Annual
                                   Report pp. 58, 59, 61 and 62).


Item 4.   Submission of Matters    Not applicable.
          to a Vote of Security
          Holders.


Part II


Item 5.   Market for Registrant's  Gannett Shareholder Services (Annual
          Common Equity and        Report, p. 73); Company
          Related Stockholder      Profile (Annual Report, p. 1);
          Matters                  Gannett Common Stock Prices (Annual
                                   Report p. 22); Dividends (Annual Report
                                   p. 33).


Item 6.   Selected Financial       Eleven-Year Summary and Notes to
          Data.                    Eleven-Year Summary (Annual Report
                                   pp. 50-52).


Item 7.   Management's Discussion  Management's Discussion and Analysis
          and Analysis of          of Results of Operations and Financial
          Financial Condition and  Position (Annual Report pp. 23-33).
          Results of Operations.


Item 7A.  Quantitative and         Not applicable.
          Qualitative Disclosures
          about Market Risk


Item 8.   Financial Statements     Consolidated Financial Statements and
          and Supplementary Data.  Notes to Consolidated Financial State-
                                   ments (Annual Report pp. 34-48).
                                   Effects of inflation and changing prices
                                   (Annual Report p. 33);  Quarterly
                                   Statements of Income (Annual Report
                                   pp. 64-65).


Item 9.   Changes in and           None.
          Disagreements with
          Accountants on Account-
          ing and Financial
          Disclosure.

                                    -3-


<PAGE>


Part III


Item 10.  Directors and Executive        Executive Officers of the
          Officers of the Registrant.    Company are listed below:

          Sara M. Bentley - Group President, Gannett Northwest Newspaper
             Group, and President and Publisher, Statesman Journal
          Michael C. Burrus - President, Multimedia Cablevision, Inc.
          Thomas L. Chapple - Senior Vice President, General Counsel,
             and Secretary
          Richard L. Clapp - Senior Vice President, Personnel
          Susan Clark-Johnson - Senior Group President, Gannett Pacific
             Newspaper Group, and President and Publisher, Reno (Nev.)
             Gazette-Journal
          Michael J. Coleman - Senior Group President, Gannett South Newspaper
             Group, and President and Publisher, FLORIDA TODAY at Brevard
             County
          Robert T. Collins - President, New Jersey Newspaper Group, and
             President and Publisher, Asbury Park Press and Home News
             Tribune, East Brunswick, NJ
          John J. Curley - Chairman and Chief Executive Officer
          Thomas Curley - President and Publisher, USA TODAY
          Philip R. Currie - Senior Vice President, News, Gannett Newspaper
             Division
          Daniel S. Ehrman - Vice President, Planning & Development
          Millicent A. Feller - Senior Vice President, Public Affairs
             and Government Relations
          Lawrence P. Gasho - Vice President, Financial Analysis
          George R. Gavagan - Vice President and Controller
          Denise H. Ivey - Group President, Gannett Gulf Coast Newspaper
             Group, and President and Publisher, Pensacola News Journal
          John B. Jaske - Senior Vice President, Labor Relations and
             Assistant General Counsel
          Gracia C. Martore - Vice President, Treasury Services and
             Investor Relations
          Douglas H. McCorkindale - Vice Chairman and President
          Bern Mebane - Senior Group President, Gannett Piedmont
             Newspaper Group, and President and Publisher, the
             Greenville (S.C.) News
          Larry F. Miller - Executive Vice President and Chief Financial
             Officer
          W. Curtis Riddle - Senior Group President, Gannett East Newspaper
             Group, and President and Publisher, The News Journal
             (Wilmington, DE)
          Carleton F. Rosenburgh - Senior Vice President, Gannett
             Newspaper Division
          Gary F. Sherlock - Group President, Gannett Atlantic Newspaper
             Group, and President and Publisher, Gannett Suburban Newspapers
          Mary P. Stier - Group President, Gannett Midwest Newspaper Group,
             and President and Publisher, Rockford Register Star
          Jimmy L. Thomas - Senior Vice President, Financial Services and
             Treasurer
          Cecil L. Walker - President, Gannett Broadcasting Division
          Gary L. Watson - President, Gannett Newspaper Division

                                    -4-


<PAGE>


          Information concerning the Executive Officers of the Company is
          included in the Annual Report on pages 18 and 19.  Information
          concerning the Board of Directors of the Company is incorporated
          by reference to the Company's Proxy Statement pursuant to General
          Instruction G(3) to Form 10-K.



Item 11.  Executive Compensation.        Incorporated by reference to
                                         the Company's Proxy Statement
                                         pursuant to General
                                         Instruction G(3) to Form 10-K.


Item 12.  Security Ownership of Certain  Incorporated by reference to the
          Beneficial Owners and          Company's Proxy Statement pursuant to
          Management.                    General Instruction G(3) to Form 10-K.


Item 13.  Certain Relationships and      Incorporated by reference to the
          Related Transactions.          Company's Proxy Statement pursuant to
                                         General Instruction G(3) to Form 10-K.

                                    -5-


<PAGE>


Part IV


Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

          (a)  Financial Statements, Financial Statement Schedules and Exhibits.

               (1)  Financial Statements.

               The following financial statements of the Company and the
               accountants' report thereon are included on pages 34 through 49
               of the Company's 1997 Annual Report to Shareholders and are
               incorporated herein by reference:

                  Consolidated Balance Sheets as of December 28, 1997 and
                  December 29, 1996.

                  Consolidated Statements of Income - Fiscal Years Ended
                  December 28, 1997, December 29, 1996, and December 31, 1995.

                  Consolidated Statements of Cash Flows - Fiscal Years Ended
                  December 28, 1997, December 29, 1996, and December 31, 1995.

                  Consolidated Statements of Changes in Shareholders' Equity -
                  December 28, 1997, December 29, 1996, and December 31, 1995.

                  Notes to Consolidated Financial Statements.

                  Report of Independent Accountants.

                                    -6-


<PAGE>

               (2)  Financial Statement Schedules.

               The following financial statement schedules are incorporated by
               reference to "Schedules to Form 10-K Information" appearing on
               pages 66 and 67 of the Company's 1997 Annual Report to
               Shareholders:

                  Schedule V - Property, Plant and Equipment.

                  Schedule VI - Accumulated Depreciation and Amortization of
                  Property, Plant and Equipment.

                  Schedule VIII - Valuation and Qualifying Accounts.

                  Schedule X - Supplementary Income Statement Information.

                  The Report of Independent Accountants on Financial Statement
                  Schedules appears on page 8 of this Annual Report on
                  Form 10-K.

                  Note: Financial statements of the registrant are omitted
                  as the registrant is primarily an operating company and the
                  aggregate of the minority interest in and the debt of
                  consolidated subsidiaries is not material in relation to
                  total consolidated assets.  All other schedules are omitted
                  as the required information is not applicable or the
                  information is presented in the consolidated financial
                  statements or related notes.

               (3)  Pro Forma Financial Information.

               Not Applicable.

               (4)   Exhibits.

               See Exhibit Index for list of exhibits filed with this Annual
               Report on Form 10-K.  Management contracts and compensatory
               plans or arrangements are identified with asterisks on the
               Exhibit Index.

          (b)  Reports on Form 8-K.

               None.

                                    -7-


<PAGE>


               REPORT OF INDEPENDENT ACCOUNTANTS ON
                  FINANCIAL STATEMENT SCHEDULES



To the Board of Directors and Shareholders
of Gannett Co., Inc.


Our audits of the consolidated financial statements referred to
in our report dated February 2, 1998 appearing on page 49 of the
1997 Annual Report to Shareholders of Gannett Co., Inc. (which
report and consolidated financial statements are incorporated by
reference in this Annual Report on Form 10-K) also included an
audit of the Financial Statement Schedules listed in Item 14(a)
of this Form 10-K.  In our opinion, these Financial Statement
Schedules present fairly, in all material respects, the information
set forth therein when read in conjunction with the related consolidated
financial statements.


/s/Price Waterhouse LLP
________________________________
PRICE WATERHOUSE LLP


Washington, D.C.
February 2, 1998


                                    -8-



<PAGE>


                              SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

Dated: February 24, 1998        GANNETT CO., INC. (Registrant)



                                By /s/Douglas H. McCorkindale
                                   ------------------------------
                                   Douglas H. McCorkindale,
                                   Vice Chairman and President


     Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant in the capacities and on the dates indicated.

Dated: February 24, 1998           /s/John J. Curley
                                   ------------------------------
                                   John J. Curley,
                                   Director, Chairman and
                                   Chief Executive Officer


Dated: February 24, 1998           /s/Douglas H. McCorkindale
                                   ------------------------------
                                   Douglas H. McCorkindale,
                                   Director, Vice Chairman and
                                   President


Dated: February 24, 1998           /s/Larry F. Miller
                                   ------------------------------
                                   Larry F. Miller,
                                   Executive Vice President and
                                   Chief Financial Officer


Dated: February 24, 1998           /s/Meredith A. Brokaw
                                   ------------------------------
                                   Meredith A. Brokaw, Director


Dated: February 24, 1998           /s/Peter B. Clark
                                   ------------------------------
                                   Peter B. Clark, Director


Dated: February 24, 1998           /s/Stuart T.K. Ho
                                   ------------------------------
                                   Stuart T.K. Ho, Director


                                    -9-


<PAGE>




Dated: February 24, 1998           /s/Drew Lewis
                                   ------------------------------
                                   Drew Lewis, Director


Dated: February 24, 1998           /s/Josephine P. Louis
                                   ------------------------------
                                   Josephine P. Louis, Director


Dated: February 24, 1998           /s/Thomas A. Reynolds, Jr.
                                   ------------------------------
                                   Thomas A. Reynolds, Jr., Director


Dated: February 24, 1998           /s/Dolores D. Wharton
                                   ------------------------------
                                   Dolores D. Wharton, Director

                                   /s/Karen Hastie Williams
Dated: February 24, 1998           ------------------------------
                                   Karen Hastie Williams, Director





                                    -10-


<PAGE>


                          EXHIBIT INDEX

Exhibit
Number  Exhibit                          Location

3-1     Second Restated Certificate      Incorporated by reference to Exhibit
        of Incorporation of Gannett Co., 3-1 to Gannett Co., Inc's Form 10-K
        Inc.                             for the fiscal year ended December 26,
                                         1993 ("1993 Form 10-K").

        Amendment to Restated            Incorporated by reference to Exhibit
        Certificate of Incorporation.    3-1 to the 1993 Form 10-K.

3-2     By-laws of Gannett Co., Inc.     Incorporated by reference to Exhibit
        (reflects all amendments         3-1 to Gannett Co., Inc.'s Form 10-Q
        through September 24, 1997)      for the fiscal quarter ended
                                         September 28, 1997.

4-1     $1,000,000,000 Revolving         Incorporated by reference to Exhibit
        Credit Agreement among           4-1 to the 1993 Form 10-K.
        Gannett Co., Inc. and the
        Banks named therein.

4-2     Amendment Number One             Incorporated by reference to Exhibit
        to $1,000,000,000 Revolving      4-2 to Gannett Co., Inc.'s Form 10-Q
        Credit Agreement among           for the fiscal quarter ended June 26,
        Gannett Co., Inc. and the        1994.
        Banks named therein.

4-3     Amendment Number Two to          Incorporated by reference to Exhibit
        $1,500,000,000 Revolving         4-3 to Gannett Co., Inc.'s Form 10-K
        Credit Agreement among           for the fiscal year ended
        Gannett Co., Inc. and the        December 31, 1995.
        Banks named therein.

4-4     Amendment Number Three to        Incorporated by reference to Exhibit
        $3,000,000,000 Revolving         4-4 to Gannett Co., Inc.'s Form 10-Q
        Credit Agreement among           for the fiscal quarter ended
        Gannett Co., Inc. and the Banks  September 29, 1996.
        named therein.

4-5     Indenture dated as of March 1,   Incorporated by reference to Exhibit
        1983 between Gannett Co., Inc.   4-2 to Gannett Co., Inc.'s Form 10-K
        and Citibank, N.A., as Trustee.  for the fiscal year ended
                                         December 29, 1985.

4-6     First Supplemental Indenture     Incorporated by reference to Exhibit
        dated as of November 5, 1986     4 to Gannett Co., Inc.'s Form 8-K
        among Gannett Co., Inc.,         filed on November 9, 1986.
        Citibank, N.A., as Trustee, and
        Sovran Bank, N.A., as Successor
        Trustee.

4-7     Second Supplemental Indenture    Incorporated by reference to
        dated as of June 1, 1995,        Exhibit 4 to Gannett Co., Inc.'s
        among Gannett Co., Inc.,         Form 8-K filed on June 15, 1995.
        NationsBank, N.A., as Trustee,
        and Crestar Bank, as Trustee.

4-8    Rights Plan.                      Incorporated by reference to
                                         Exhibit 1 to Gannett Co., Inc.'s
                                         Form 8-K filed on May 23, 1990.

                                   -11-

<PAGE>


10-1    Employment Agreement dated       Incorporated by reference to Gannett
        December 7, 1992 between         Co., Inc.'s Form 10-K for the fiscal
        Gannett Co., Inc. and John J.    year ended December 27, 1992 ("1992
        Curley.*                         Form 10-K").

10-2    Employment Agreement dated       Incorporated by reference to the 1992
        December 7, 1992 between         Form 10-K.
        Gannett Co., Inc. and Douglas H.
        McCorkindale.*

10-3    Gannett Co., Inc. 1978           Incorporated by reference to Exhibit
        Executive Long-Term Incentive    10-3 to Gannett Co., Inc.'s Form 10-K
        Plan*                            for the fiscal year ended
                                         December 28, 1980.  Amendment No. 1
                                         incorporated by reference to
                                         Exhibit 20-1 to Gannett Co., Inc.'s
                                         Form 10-K for the fiscal year ended
                                         December 27, 1981.   Amendment No. 2
                                         incorporated by reference to
                                         Exhibit 10-2 to Gannett Co., Inc.'s
                                         Form 10-K for the fiscal year ended
                                         December 25, 1983.  Amendments Nos. 3
                                         and 4 incorporated by reference to
                                         Exhibit 4-6 to Gannett Co., Inc.'s
                                         Form S-8 Registration Statement
                                         No. 33-28413 filed on May 1, 1989.
                                         Amendments Nos. 5 and 6 incorporated
                                         by reference to Exhibit 10-8 to
                                         Gannett Co., Inc.'s Form 10-K for the
                                         fiscal year ended December 31, 1989.
                                         Amendment No. 7 incorporated by
                                         reference to Gannett Co., Inc.'s
                                         Form S-8 Registration Statement
                                         No. 333-04459 filed on May 24, 1996.
                                         Amendment No. 8 incorporated by
                                         reference to Exhibit 10-3 to Gannett
                                         Co., Inc.'s Form 10-Q for the quarter
                                         ended September 28, 1997. Amendment
                                         dated December 9, 1997 (attached).

10-4    Description of supplemental      Incorporated by reference to Exhibit
        insurance benefits.*             10-4 to the 1993 Form 10-K.

10-5    Gannett Co., Inc. Supplemental   Incorporated by reference to Exhibit
        Retirement Plan, as amended.*    10-8 to Gannett Co., Inc's Form 10-K
                                         for the fiscal year ended
                                         December 27, 1986 ("1986 Form 10-K").

10-6    Gannett Co., Inc. Retirement     Incorporated by reference to Exhibit
        Plan for Directors.*             10-10 to the 1986 Form 10-K.  1991
                                         Amendment incorporated by reference
                                         to Exhibit 10-2 to Gannett Co.,
                                         Inc.'s Form 10-Q for the quarter
                                         ended September 29, 1991.  Amendment
                                         to Gannett Co., Inc. Retirement
                                         Plan for Directors dated October 31,
                                         1996, incorporated by reference to
                                         Exhibit 10-6 to the 1996 Form 10K.

                                    -12-

<PAGE>

10-7    Amended and Restated             Incorporated by reference to Exhibit
        Gannett Co., Inc. 1987           10-1 to Gannett Co., Inc.'s Form 10-Q
        Deferred Compensation Plan.*     for the fiscal quarter ended
                                         September 29, 1996.  Amendment No. 5
                                         incorporated by reference to Exhibit
                                         10-2 to Gannett Co., Inc.'s form 10-Q
                                         for the quarter ended September 28,
                                         1997.

10-8    Gannett Co., Inc. Transitional   Incorporated by reference to Exhibit
        Compensation Plan.*              10-13 to Gannett Co., Inc.'s Form
                                         10-K for the fiscal year ended
                                         December 30, 1990.

11      Statement re computation of      Attached.
        earnings per share.

13      Portions of 1997 Annual Report   Attached.
        to Shareholders incorporated
        by reference.

21      Subsidiaries of Gannett Co.,     Attached.
        Inc.

23      Consent of Independent           Attached.
        Accountants.

27      Financial Data Schedule          Attached.

        The Company agrees to furnish to the Commission, upon request, a copy
        of each agreement with respect to long-term debt not filed herewith
        in reliance upon the exemption from filing applicable to any series
        of debt which does not exceed 10% of the total consolidated assets of
        the Company.

     *  Asterisks identify management contracts, and compensatory plans
        or arrangements.

                                   -13-





                 AMENDMENT TO EXECUTIVE LONG-TERM INCENTIVE PLAN

        On December 9, 1997, the Company's Executive Compensation Committee
adjusted Section 2.1 of the Gannett Co., Inc. 1978 Executive Long-Term
Incentive Plan to increase the 175,000 share maximum to 350,000 to reflect
the Company's October 6, 1997 stock split.







<TABLE>

Calculation of Earnings Per Share

<CAPTION>

                                             Fiscal Year Ended
                                 ----------------------------------------
                                 December 28,  December 29,  December 31,
                                    1997          1996           1995
                                 ------------  ------------  ------------
<S>                              <C>           <C>           <C>

Basic earnings:
   Net income                    $712,679,000  $943,087,000  $477,262,000

   Weighted average number of
     common shares outstanding    283,360,000   281,782,000   280,312,000

   Basic earnings per share             $2.52         $3.35         $1.70

Diluted earnings:
   Net income                    $712,679,000  $943,087,000  $477,262,000

   Weighted average number of
     common shares outstanding    283,360,000   281,782,000   280,312,000

   Dilutive effect of out-
     standing stock options and
     stock incentive rights         2,250,000     1,644,000     2,011,000

   Weighted average number of
     shares outstanding, as
     adjusted                     285,610,000   283,426,000   282,323,000

   Diluted earnings per share           $2.50         $3.33         $1.69

</TABLE>






Company Profile

Gannett Co., Inc. is a diversified news and information company that
publishes newspapers, operates broadcasting stations and cable television
systems, and is engaged in marketing, commercial printing, a newswire
service, data services and news programming. The company has operations
in 45 states, the District of Columbia and Guam.

   Gannett is the largest U.S. newspaper group in terms of circulation, with
87 daily newspapers, including USA TODAY, a variety of non-daily
publications and USA WEEKEND, a weekly newspaper magazine. Total
average paid daily circulation of Gannett's daily newspapers is
approximately 6.7 million.

   Gannett owns and operates 20 television stations in major markets.
Gannett's cable division serves 478,000 subscribers in five states.

   Gannett was founded by Frank E. Gannett in 1906 and incorporated in
1923. The company went public in 1967. Its more than 283 million shares of
common stock are held by more than 14,000 shareholders of record in all 50
states and abroad. The company has 39,000 employees. Corporate
headquarters is located at Arlington, Va.

                                 -1-

Board of Directors

John J. Curley
Chairman and chief executive officer, Gannett Co., Inc. Formerly:
Chairman, president and
 chief executive officer, Gannett Co., Inc.
(1989-1997). Age 59. (b,d,f,g)

Meredith A. Brokaw
Founder, Penny Whistle Toys, Inc., New York City, and author of
children's books. Other directorships: Conservation International,
Washington, D.C. Age 57. (b,d,e)

Peter B. Clark
Former chairman, president and chief executive officer, The Evening News
Association (1969-86). Age 69. (e,g)

Stuart T.K. Ho
Chairman of the board and president, Capital Investment of Hawaii, Inc.
Other directorships: Aloha Airgroup, Inc.; College Retirement Equities
Fund; Capital Investment of Hawaii, Inc.; Pacific Century Financial
Corporation. Age 62. (a,b,c)

Drew Lewis
Former chairman and chief executive officer, Union Pacific Corporation.
Other directorships: American Express Co.; AmTec; FPL Group, Inc.;
Gulfstream Aerospace; Lucent Technologies; Union Pacific Resources
Group Inc. Age 66. (a,d)

Josephine P. Louis
Chairman and chief executive officer, Eximious Inc., and Eximious Ltd.
Other directorships: HDO Productions, Inc.; trustee, Chicago Horticultural
Society; trustee, Chicago Historical Society. Age 67. (a,b,e)

Douglas H. McCorkindale
Vice chairman and president, Gannett Co., Inc. Formerly: Vice chairman
and chief financial and administrative officer, Gannett Co., Inc.
(1985-1997). Other directorships: Continental Airlines, Inc.; Frontier
Corporation; and funds which are part of the Prudential group of mutual
funds. Age 58. (b,f,g)

Thomas A. Reynolds Jr.
Chairman emeritus of Chicago law firm of Winston & Strawn. Other
directorships: Jefferson Smurfit Group; Union Pacific Corporation. Age 69.
(a,b,c)

Dolores D. Wharton
Chairman and CEO, Fund for Corporate Initiatives, Inc. Other
directorships: Capital Bank & Trust Co. Age 70. (c,g)

Karen Hastie Williams
Partner of Washington, D.C., law firm of Crowell & Moring. Other
directorships: Crestar Financial Services Corporation; Continental Airlines,
Inc.; Fannie Mae; SunAmerica, Inc.; Washington Gas Light Company. Age
53. (a)

(a) Member of Audit Committee.
(b) Member of Executive Committee.
(c) Member of Executive Compensation Committee.
(d) Member of Management Continuity Committee.
(e) Member of Public Responsibility and Personnel Practices Committee.
(f) Member of Gannett Management Committee.
(g) Member of Contributions Committee.

                                    -16- , -17 -

Company & Divisional Officers
     Gannett's principal management group is the Gannett Management
Committee, which coordinates overall management policies for the
company. The Gannett Newspaper Operating Committee oversees
operations of the company's Newspaper Division. The members of these
two groups are identified at right and on the previous pages.

     The managers of the company's various local operating units enjoy
substantial autonomy in local policy, operational details, news content and
political endorsements.

     Gannett's headquarters staff includes specialists who provide advice
and assistance to the company's operating units in various phases of the
company's operations.

     At right are brief descriptions of the business experience during the
last five years of the officers of the company and the heads of its national
and regional divisions. Officers serve for a term of one year and may be
re-elected. Information about the two officers who serve as directors (John
J. Curley and Douglas H. McCorkindale) can be found on pages 16-17.

     Pictured on these pages are members of the Gannett Management
Committee and Gannett Newspaper Operating Committee.

(a)  Member of the Gannett Management Committee.

(b)  Member of the Gannett Newspaper Operating Committee.

Christopher W. Baldwin, Vice president, taxes. Formerly: Director, taxes
(1979-1993). Age 54.

Sara M. Bentley, President, Gannett Northwest Newspaper Group, and
president and publisher, Statesman Journal, Salem, Ore. Formerly: President
and publisher, Statesman Journal (1988-1994). Age 46. (b)

Michael C. Burrus, President, Multimedia Cablevision. Formerly: Vice
president, Multimedia, Inc., and president, Multimedia Cablevision and
Multimedia Security (1993-1995); executive vice president, Multimedia
Cablevision (1992-1993); vice president, operations and finance, Multimedia
Cablevision (1985-1992).  Age 43.

Thomas L. Chapple, Senior vice president, general counsel and secretary.
Formerly: Vice president, general counsel and secretary (1991-1995). Age
50. (a)

Richard L. Clapp, Senior vice president/personnel. Formerly: Vice
president, compensation and benefits (1983-1995). Age 57. (a)

Susan Clark-Johnson, Senior group president, Gannett Pacific Newspaper
Group, and president and publisher, Reno (Nev.) Gazette-Journal.
Formerly: President, Gannett West Newspaper Group, and president and
publisher, Reno Gazette-Journal (1985-1994). Age 51. (b)

Michael J. Coleman, Senior group president, Gannett South Newspaper
Group, and president and publisher, FLORIDA TODAY at Brevard
County. Formerly: President, Gannett South Newspaper Group, and
president and publisher, FLORIDA TODAY  (1991-1994). Age 54. (b)

Robert T. Collins, President, New Jersey Newspaper Group, and president
and publisher, Asbury Park Press and Home News Tribune, East
Brunswick, N.J. Formerly: President and publisher, Asbury Park Press and
Home News Tribune (1997-1998); president and publisher, Courier-Post,
Camden, N.J. (1993-1997); president, Gannett East Newspaper Group, and
president and publisher, Courier-Post (1985-1993). Age 54. (b)

Thomas Curley, President and publisher, USA TODAY. Thomas Curley is
the brother of John J. Curley. Age 49. (a)

Philip R. Currie, Senior vice president, news, Newspaper Division.
Formerly: Vice president, news, Newspaper Division (1982-1995). Age
56. (b)

Daniel S. Ehrman Jr., Vice president, planning and development. Formerly:
Senior vice president, Gannett Broadcasting (1995-1997); vice president,
finance and business affairs, Gannett Broadcasting (1984-1995). Age 51.

Millicent A. Feller, Senior vice president, public affairs and government
relations. Age 50. (a)

Lawrence P. Gasho, Vice president, financial analysis. Age 55.

George R. Gavagan, Vice president and controller. Formerly: Vice
president, corporate accounting services (1993-1997); assistant controller
(1986-1993). Age 51.

Denise H. Ivey, President, Gannett Gulf Coast Newspaper Group, and
president and publisher, Pensacola (Fla.) News Journal. Formerly: Vice
president, Gannett South Newspaper Group, and president and publisher,
Pensacola News Journal (1991-1994). Age 47. (b)

John B. Jaske, Senior vice president, labor relations and assistant general
counsel. Age 53. (a)

Kristin H. Kent, Vice president, senior legal counsel and assistant secretary.
Formerly: Vice president, senior legal counsel (1993-1995); senior legal
counsel (1986-1993). Age 47.

Gracia C. Martore, Vice president, treasury services and investor relations.
Formerly: Vice president, treasury services (1993-1996); assistant treasurer
(1985-1993). Age 45.

Myron Maslowsky, Vice president, internal audit. Formerly: Director,
internal audit (1989-1995). Age 43.

Bern Mebane, Senior group president, Gannett Piedmont Newspaper
Group, and president and publisher, The Greenville (S.C.) News. Formerly:
Senior group president, Gannett Piedmont Newspaper Group (1995-1997);
president, Multimedia Newspaper Company (1989-1995). Age 48. (b)

Larry F. Miller, Executive vice president and chief financial officer.
Formerly: Senior vice president, financial planning and controller
(1991-1997). Age 59. (a)

W. Curtis Riddle, Senior group president, Gannett East Newspaper Group,
and president and publisher, The News Journal, Wilmington, Del. Formerly:
President, East Newspaper Group, and president and publisher, Lansing
(Mich.) State Journal (1993-1994); president, Gannett Central Newspaper
Group (1991-1993), and president and publisher, Lansing State Journal
(1990-1993). Age 46. (b)

Carleton F. Rosenburgh, Senior vice president, Gannett Newspaper
Division. Age 58. (b)

Gary F. Sherlock, President, Gannett Atlantic Newspaper Group, and
president and publisher, Gannett Suburban Newspapers. Formerly: Vice
president, Gannett Metro Newspaper Group, and president and publisher,
Gannett Suburban Newspapers (1990-1994). Age 52. (b)

Mary P. Stier, President, Gannett Midwest Newspaper Group, and president
and publisher, Rockford (Ill.) Register Star. Formerly: Vice president,
Gannett Central Newspaper Group (1990-1993), and president and
publisher, Rockford Register Star (1991-1993). Age 40. (b)

Jimmy L. Thomas, Senior vice president, financial services and treasurer.
Age 56. (a)

Wendell J. Van Lare, Vice president, senior labor counsel. Formerly:
Director, labor relations (1980-1993). Age 52.

Cecil L. Walker, President, Gannett Broadcasting Division. Age 61. (a)

Barbara W. Wall, Vice president, senior legal counsel. Formerly: Senior
legal counsel (1990-1993). Age 43.

Gary L. Watson, President, Gannett Newspaper Division. Age 52. (a)(b)

                            -18-, -19-



<PAGE>


Gannett Common Stock Prices

Restated to reflect the 2-for-1 stock split effective Oct. 6, 1997. High-low
range by quarters based on NYSE-composite closing prices.

Year   Quarter        Low      High
- ----   -------       -----    ------

1987   first        $17.97    $24.82
       second       $21.88    $27.44
       third        $24.25    $27.63
       fourth       $15.88    $26.38
1988   first        $16.88    $19.75
       second       $14.69    $17.82
       third        $15.25    $17.13
       fourth       $16.19    $17.50
1989   first        $17.32    $19.13
       second       $18.32    $24.25
       third        $21.82    $24.94
       fourth       $19.75    $22.63
1990   first        $19.75    $22.19
       second       $17.75    $21.13
       third        $14.94    $18.75
       fourth       $15.32    $18.88
1991   first        $17.88    $21.32
       second       $19.88    $22.19
       third        $19.69    $23.32
       fourth       $17.94    $21.13
1992   first        $21.13    $23.94
       second       $20.75    $24.57
       third        $21.94    $24.13
       fourth       $23.00    $26.82
1993   first        $25.32    $27.69
       second       $23.75    $27.38
       third        $23.88    $25.69
       fourth       $23.75    $29.07
1994   first        $26.69    $29.19
       second       $25.32    $27.44
       third        $24.19    $25.82
       fourth       $23.38    $26.69
1995   first        $25.07    $27.50
       second       $26.00    $27.88
       third        $26.50    $27.75
       fourth       $26.44    $32.19
1996   first        $29.63    $35.38
       second       $32.25    $35.82
       third        $32.00    $35.07
       fourth       $34.75    $39.25
1997   first        $35.81    $44.75
       second       $40.50    $50.66
       third        $48.00    $53.00
       fourth       $51.13    $61.81
1998   first        $57.25    $64.56*
* through February 27, 1998

                                   -22-


<PAGE>

Management's responsibility for financial statements

     The management of the company has prepared and is responsible for the
consolidated financial statements and related financial information included
in this report. These financial statements were prepared in accordance with
generally accepted accounting principles. These financial statements
necessarily include amounts determined using management's best judgments
and estimates.

     The company's accounting and other control systems provide reasonable
assurance that assets are safeguarded and that the books and records reflect
the authorized transactions of the company. Underlying the concept of
reasonable assurance is the premise that the cost of control not exceed the
benefit derived. Management believes that the company's accounting and
other control systems appropriately recognize this cost/benefit relationship.

     The company's independent accountants, Price Waterhouse LLP, provide
an independent assessment of the degree to which management meets its
responsibility for fairness in financial reporting. They regularly evaluate the
company's system of internal accounting control and perform such tests and
other procedures as they deem necessary to reach and express an opinion on
the financial statements. The Price Waterhouse LLP report appears on page
49.

     The Audit Committee of the Board of Directors is responsible for reviewing
and monitoring the company's financial reports and accounting practices to
ascertain that they are appropriate in the circumstances. The Audit
Committee consists of five non-management directors, and meets to discuss
audit and financial reporting matters with representatives of financial
management, the internal auditors and the independent accountants. The
internal auditors and the independent accountants have direct access to the
Audit Committee to review the results of their examinations, the adequacy
of internal accounting controls and the quality of financial reporting.


  Douglas H. McCorkindale        Larry F. Miller
  Vice Chairman and President    Executive Vice President and Chief
                                 Financial Officer



Management's discussion and analysis of results of operations and financial
position

Basis of reporting
     Following is a discussion of the key factors that have affected the
company's business over the last three years. This commentary should be
read in conjunction with the company's financial statements, the 11-year
summary of operations and the Form 10-K information that appear in the
following sections of this report.

     The company's fiscal year ends on the last Sunday of the calendar year. The
company's 1997 fiscal year ended on Dec. 28, 1997 and encompassed a
52-week period. The company's 1996 fiscal year encompassed a 52-week
period, and its 1995 year encompassed a 53-week period.

Business acquisitions, exchanges and dispositions

1997 exchange of television stations
     In January 1997, the company concluded a transaction to exchange
WLWT-TV (NBC-Cincinnati) and KOCO-TV (ABC-Oklahoma City) for
WZZM-TV (ABC-Grand Rapids/Kalamazoo/Battle Creek) and WGRZ-TV
(NBC-Buffalo). This exchange, which was necessary to comply with
Federal Communications Commission (FCC) cross-ownership rules, was
accounted for as a non-monetary transaction under which no gain or loss
was recognized. This exchange did not materially affect broadcast operating
results.

1997 acquisitions
     In May 1997, the company acquired KNAZ-TV (NBC-Flagstaff, Ariz.),
KMOH-TV (WB-Kingman, Ariz.) and Printed Media Companies, a
full-service heat-set printer in Minneapolis, Minn. In July 1997, Mary
Morgan, Inc., a commercial printing business in Green Bay, Wis., was
purchased. In August 1997, the company acquired Army Times Publishing
Company, located in Springfield, Va. It publishes six weekly military
newspapers and one monthly defense publication.

     In October 1997, the company acquired New Jersey Press, Inc., which
publishes two dailies, Asbury Park Press and the Home News Tribune of
East Brunswick, and operates In Jersey, an Internet service. The Asbury
Park Press has a daily circulation of approximately 155,000 and 224,000
on Sunday. The Home News Tribune has a daily circulation of approximately
75,000 and 82,000 on Sunday.

     The aggregate purchase price for businesses acquired in 1997 was
approximately $445 million in cash and liabilities assumed. The acquisitions
were accounted for under the purchase method of accounting. The
acquisitions did not materially affect reported results of operations for the
year.

                                      -23-

1997 dispositions
     In January 1997, the company contributed the Niagara Gazette newspaper
to the Gannett Foundation. In April 1997, the company sold its newspaper
in Moultrie, Ga., and in November 1997, the company sold its newspapers
in Tarentum and North Hills, Pa. These newspaper dispositions did not
materially affect results of operations.

Stock split
     On Aug. 19, 1997, the company's Board of Directors approved a
two-for-one stock split effective on Oct. 6, 1997, for shareholders of record
on Sept. 12, 1997. In this report, all share and per-common-share amounts
have been adjusted to reflect the stock split.

Earnings per share
     In the fourth quarter of 1997, the company adopted Statement of Financial
Accounting Standards No. 128, "Earnings Per Share." This standard
requires the presentation of earnings per share data in the company's
financial statements in two ways. The first, "basic" earnings per share, is
computed by dividing net income by the average number of common shares
outstanding. This method of calculation is identical to that used in
previously issued financial statements.

     The second per share presentation, "diluted" earnings per share, gives
effect to the assumed dilution from outstanding stock options and stock
incentive rights (refer to Note 8 to the financial statements on pages 45-47 for
details on options and incentive rights).

     Diluted earnings per share (net income) were less than basic earnings per
share for 1997, 1996 and 1995 by $.02, $.02 and $.01, respectively, a
difference of less than 1% for each of the three years.

Prior-year transactions

Exchange of broadcast stations
     In December 1996, the company concluded a transaction to acquire
WTSP-TV, the CBS affiliate in Tampa-St. Petersburg, Fla., in exchange for
radio stations KIIS/KIIS-FM in Los Angeles, KSDO/KKBH-FM in San
Diego and WDAE/WUSA-FM in Tampa.

     For financial reporting purposes, the company recorded the exchange as
two simultaneous but separate events; that is, a sale of radio stations for
which a non-cash gain was recognized, and the acquisition of the television
station accounted for under the purchase method. The gain reported on the
exchange was measured by the difference between the estimated current fair
value of the assets exchanged over the carrying value or basis in the
properties it exchanged. The estimated fair value of the assets exchanged
was $170 million, while the carrying value or basis in the radio stations was
approximately $12 million. In the fourth quarter of 1996, therefore, for
financial reporting purposes, the company reported a pre-tax, non-cash,
non-operating gain of $158 million on the exchange. The television station
acquired in the exchange was recorded at estimated fair value or $170
million.

     On an after-tax basis, this accounting treatment resulted in a non-cash
increase in earnings of $93 million and earnings per share of $.33 for the
fourth quarter of 1996.

Sale of outdoor advertising business
     In August 1996, the company completed the sale of its outdoor advertising
business for a selling price of $713 million in cash. The company recorded
an after-tax gain of $295 million or $1.05 per share on this sale. The gain
and outdoor operating results for the period leading up to the sale are
reported as a discontinued operation in the company's financial statements.

Sale of Multimedia Entertainment
     In December 1996, the company sold its television entertainment
programming business, Multimedia Entertainment, which had been acquired
in December 1995 as part of the acquisition of Multimedia, Inc.
("Multimedia"). The selling price for this transaction approximated the value
assigned to it by the company upon acquisition. Therefore, no gain was
recognized on the sale.

     The operating results for Multimedia Entertainment for the period leading
up to the sale are reported as a discontinued operation in the company's
financial statements.

     The company's financial statements for 1996 and prior years reflect the
classification of the outdoor and entertainment businesses as discontinued
operations.

                                      -24-


<PAGE>

Results of operations
Consolidated summary

In millions of dollars, except per share amounts

                         1997    Change  1996    Change  1995   Change
                         ------  ------  ------  ------  ------ ------
Operating revenues       $4,729    7%    $4,421    18%   $3,744     4%
Operating expenses       $3,413    2%    $3,355    15%   $2,922     5%
Operating income         $1,316   23%    $1,066    30%   $  822     3%
Income from continuing
 operations, excluding
 gain on exchange of
 broadcast stations      $  713   34%    $  531    15%   $  459     1%
After-tax gain on
 exchange of broadcast
 stations                     0   ---    $   93    ---        0    ---
Income from
 continuing operations,
 as reported             $  713   14%    $  624    36%   $  459     1%
Earnings per share
 from continuing
 operations, excluding
 gain on exchange of
 broadcast stations
     Basic               $ 2.52   34%    $ 1.88    15%   $ 1.64     4%
     Diluted             $ 2.50   34%    $ 1.87    15%   $ 1.63     4%
Earnings per share
 from gain on exchange
 of broadcast stations
     Basic                    0   ---    $  .33    ---        0    ---
     Diluted                  0   ---    $  .33    ---        0    ---
Earnings per share from
 continuing operations,
 as reported
     Basic               $ 2.52   14%    $ 2.21    35%   $ 1.64     4%
     Diluted             $ 2.50   14%    $ 2.20    35%   $ 1.63     4%

     A discussion of the operating results of each of the company's principal
business segments and other factors affecting financial results follows.
Operating cash flow amounts presented with business segment information
represent operating income plus depreciation and amortization of intangible
assets. Such cash flow amounts vary from net cash flow from operating
activities presented in the Consolidated Statements of Cash Flows, because
cash payments for interest and taxes are not reflected therein, nor are the
cash flow effects of non-operating items, discontinued operations or
changes in certain operations-related balance sheet accounts.

Newspapers
     In addition to its local newspapers, the company's newspaper publishing
operations include USA TODAY, USA WEEKEND and Gannett Offset
commercial printing. The newspaper segment in 1997 contributed 80% of
the company's revenues and 76% of its operating income. Record earnings
were achieved by the newspaper segment in 1997, driven by revenue gains
in all major categories and lower newsprint prices. Revenue and earnings
gains were reported for newspapers at large, medium and small markets,
and in all geographic regions. Sharply improved results were reported at
The Detroit News, which continued its rebound from the strike initiated in
mid-1995. Major gains in earnings were also reported in the larger markets
of Cincinnati, Louisville, Des Moines and Westchester County, N.Y. USA
WEEKEND posted record results.

     At USA TODAY, record revenues and earnings were also reported.
Advertising revenues were very strong, comparing favorably with 1996
revenues, which were buoyed by the Summer Olympics in Atlanta.
Newsprint prices were below year-ago levels for most of the year, but they
began to rise in the second quarter of 1997 and in the fourth quarter they
rose slightly above prior-year levels. For the full year, the average newsprint
price was 21% below 1996's average price.

     The complement of local newspapers acquired at the end of 1995 as part of
the purchase of Multimedia, Inc., reported significant earnings gains again in
1997.

     Newspaper properties acquired in 1997 did not materially affect segment
results for the full year, although each contributed positively to consolidated
net income for the year.

    Newspaper operating results were as follows:

In millions of dollars

                        1997   Change   1996   Change   1995   Change
                       ------  ------  ------  ------  ------  ------
Revenues               $3,771     8%   $3,502     7%   $3,260     3%
Expenses               $2,769     2%   $2,716     6%   $2,558     5%
                       ------  ------  ------  ------  ------  ------
Operating income       $1,002    27%   $  786    12%   $  702    (4%)
                       ======  ======  ======  ======  ======  ======
Operating cash flow    $1,170    23%   $  948    11%   $  851    (4%)

     Newspaper operating revenues: Newspaper operating revenues are derived
principally from advertising and circulation sales, which accounted for 70%
and 25%, respectively, of total newspaper revenue in 1997. Other
newspaper publishing revenues are mainly from commercial printing
businesses. The table on the following page presents these components of
reported revenue for the last three years. In this comparison of newspaper
advertising revenues and volume and circulation revenues, changes from
1995 to 1996 are impacted by the longer reporting period in 1995.

                                  -25-

Newspaper publishing revenues, in millions of dollars

                         1997   Change  1996   Change   1995   Change
                       ------  ------  ------  ------  ------  ------
Advertising            $2,634     9%   $2,418     9%   $2,219     3%
Circulation            $  948     3%   $  918     6%   $  869     2%
Commercial printing
  and other            $  189    13%   $  166    (3%)  $  172    (2%)
                       ------  ------  ------  ------  ------  ------
Total                  $3,771     8%   $3,502     7%   $3,260     3%
                       ======  ======  ======  ======  ======  ======

     In the tables that follow, newspaper advertising linage, circulation
volume statistics and related revenue results are presented on a pro forma
basis for newspapers owned at the end of 1997. Newspapers acquired in 1997 are
included as if they were owned throughout the period covered by these
comparisons.

Advertising revenue, in millions of dollars (pro forma)

                        1997   Change   1996   Change   1995   Change
                       ------  ------  ------  ------  ------  ------
Local                  $  897     4%   $  858     2%   $  842     1%
National               $  496    11%   $  445    17%   $  381     5%
Classified             $  945    10%   $  860     7%   $  807     7%
                       ------  ------  ------  ------  ------  ------
Total Run-of-Press     $2,338     8%   $2,163     7%   $2,030     4%
Preprint and other
   advertising         $  407     4%   $  392    (4%)  $  409     3%
                       ------  ------  ------  ------  ------  ------
Total ad revenue       $2,745     7%   $2,555     5%   $2,439     4%
                       ======  ======  ======  ======  ======  ======

Advertising linage, in millions of inches, and preprint distribution
(pro forma)


                        1997   Change   1996   Change   1995   Change
                       ------  ------  ------  ------  ------  ------
Local                    34.7     5%     33.0    (5%)    34.6    (4%)
National                  2.9    14%      2.5    (4%)     2.6    (1%)
Classified               38.6     7%     36.0     1%     35.7     3%
                       ------  ------  ------  ------  ------  ------
Total Run-of-Press       76.2     6%     71.5    (2%)    72.9    (1%)
                       ======  ======  ======  ======  ======  ======
Preprint distribution
(millions)              6,828     3%    6,639    (2%)   6,753     3%


     Reported newspaper ad revenues in 1997 were $216 million greater than in
1996, a 9% increase, while pro forma revenues presented above reflect a 7%
increase. This reported/pro forma variance relates to the 1997 acquisitions
of Army Times Publishing Company and New Jersey Press, Inc.

     Pro forma local ad revenues and linage rose 4% and 5%, respectively. Most
of the company's local newspapers achieved gains in this category as sales
and marketing efforts were enhanced and general economic conditions
improved. Advertising placed by medium and smaller accounts was again
higher in 1997 and business from major accounts also was up.

     National revenues and linage rose 11% and 14%, respectively, fueled by
USA TODAY, which reported a 12% gain in revenue and a 7% linage gain.

     Ad revenue growth at USA TODAY was impressive, as it followed a 30%
gain in 1996 when the newspaper benefited from heavy Summer Olympics
and political advertising.

     USA WEEKEND made a significant contribution to the national revenue
increase as its national ad sales rose 16%. For the company's local
newspapers, national revenues were up 13%.

     Pro forma classified revenues rose 10% on a 7% linage gain. Employment
advertising gains were strongest, followed by real estate and automotive. Ad
rates were higher at most newspapers for most key classified categories.
Employment and classified advertising in general benefited from the strong
economy and the tight labor market.

     Looking to 1998, further ad revenue and volume growth is anticipated in
all segments, although at a slower rate. Price increases are planned at most
properties for most ad segments and the company will continue to expand
and refine its sales and marketing efforts. Changes in national economic
factors such as interest rates, employment levels and the rate of general
economic growth will have an impact on revenues at all of the company's
newspapers.

     Newspaper circulation revenues rose $30 million or 3% in 1997. Most of
the company's local newspapers, along with USA TODAY and USA
WEEKEND, contributed to the gain.

     For local newspapers, morning circulation accounts for approximately 80%
of total daily volume, and evening 20%. On a pro forma basis, local morning
circulation declined .2%. Of the company's local morning circulation
newspapers, 21 of 60 achieved higher average volume for 1997. Average
evening circulation was .6% lower, continuing the national trend. Average
Sunday circulation was 1% lower in 1997.

     At The Detroit News, daily and Sunday circulation rose for the year,
further reversing the effects of the strike initiated in 1995.

     During 1997, the Bellingham (Wash.) Herald and the Iowa City
Press-Citizen converted from evening to morning publication and the
evening Rochester (N.Y.) Times-Union was consolidated with the morning
publication, Democrat and Chronicle.

     Selected price increases were implemented in 1997 at certain newspapers.

     USA TODAY's average daily paid circulation rose 3% to 2,234,474. USA
TODAY reported an average daily paid circulation of 2,169,860 in the ABC
Publisher's Statement for the six months ended Sept. 28, 1997, a 2%
increase over the comparable period a year earlier.

     In 1998, efforts will continue to improve the quality of the circulation
base and subscriber retention. Management also plans further circulation price
increases. Over the three-year period 1996-1998, price increases will have
been implemented at most of the company's newspapers. Circulation
volume and revenues at Detroit are expected to continue to recover. The
company expects circulation revenue growth at most of its newspaper
properties in 1998.

                                   -26-

     Pro forma circulation volume for the company's local newspapers is
summarized in the table below:

Average net paid circulation, in thousands (pro forma)

                        1997   Change   1996   Change   1995   Change
                       ------  ------  ------  ------  ------  ------
Local Newspapers
   Morning              3,572    ---    3,579    (2%)   3,636    ---
   Evening                866    (1%)     872    (8%)     946    (8%)
                       ------  ------  ------  ------  ------  ------
   Total daily          4,438    ---    4,451    (3%)   4,582    (2%)
   Sunday               6,086    (1%)   6,161    (4%)   6,440    (3%)

     For 1996, reported newspaper ad revenues were $198.3 million greater than
in 1995, a 9% increase, while pro forma ad revenues reflect a 5% increase.
The variance in the reported/pro forma percentage increase relates to the
results of the Multimedia newspapers acquired at the end of 1995.

     Pro forma local ad revenues rose 2% for the year, while related linage
was off 5%. Local ad rate increases were implemented at most newspapers in
1996. Trends in both local revenue and linage improved during the second
half of 1996.

     Strong gains in 1996 were achieved in pro forma national ad revenues, up
17%, driven by USA TODAY, which reported a 30% increase in ad
revenues.

     While USA TODAY's ad volume gains were buoyed by the Summer
Olympics and to a lesser extent the fall political elections, it achieved
volume improvement throughout the year and in most major advertising
categories, including travel, financial, retail, telecommunications and
technology.

     Pro forma classified revenues rose 7% in 1996 on a 1% gain in linage.
Revenue gains were achieved in the top three classified categories,
automotive, employment and real estate. Of these, employment was
strongest, up 9%. Ad rates were higher in all categories.

     Newspaper circulation revenues rose 6% or $48.5 million in 1996, mainly
because of added revenues from the Multimedia newspapers and gains at
USA TODAY. Circulation revenues were lower in Detroit because of the
strike.

     On a pro forma basis, local morning circulation declined 2%. Evening
circulation continued to decline, reflecting the national trend. In total,
evening circulation was off 8%.

     For the company's Sunday newspapers, total circulation was down 4% in
1996. Most of the evening and Sunday circulation volume loss was
attributable to the strike in Detroit.

     USA TODAY's average daily paid circulation for 1996 rose 4% to
2,163,941. Circulation revenues at USA TODAY rose 4%. USA TODAY
reported an average daily paid circulation of 2,130,847 in the ABC
Publisher's Statement for the six months ended Sept. 29, 1996, a 3%
increase over the comparable period in 1995.

     For 1995, reported advertising revenues were $66.6 million greater than
in 1994, a 3% increase, while pro forma advertising revenues rose 4%.

     The strongest growth in 1995 was in classified, reflecting gains achieved
in employment and automotive advertising at most of the company's local
newspapers. National advertising revenues reflect significant improvement
also, principally from gains at USA TODAY. USA TODAY advertising
linage grew 3% and advertising revenues rose 7%.

     Local advertising linage was down in 1995, because of the impact of the
strike in Detroit and generally soft conditions for the retail industry. The
company increased advertising rates at certain newspapers in 1995 and ad
revenue was also favorably impacted by the additional week in the 1995
fiscal year. Advertising revenue growth was adversely impacted by the
strike in Detroit.

In millions, as reported

        Newspaper advertising
Year          revenues
- ----    ---------------------
1988           $1,909
1989           $2,018
1990           $1,917
1991           $1,853
1992           $1,882
1993           $2,005
1994           $2,153
1995           $2,219
1996           $2,418
1997           $2,634

     Newspaper circulation revenues rose 2% or $19.7 million in 1995,
reflecting added revenues in December from Multimedia newspapers, the favorable
impact of the 53rd week in fiscal year 1995 and circulation price increases at
certain newspapers. Circulation revenues were adversely affected by the
strike in Detroit. On a pro forma basis, morning circulation was unchanged.
Evening newspaper circulation declined, reflecting the national trend. In
total, evening circulation was off nearly 8%. For the company's Sunday
newspapers, total circulation was down 3%. Most of the evening and
Sunday circulation volume loss was attributable to the strike in Detroit.

     USA TODAY reported an average daily paid circulation of 2,059,017 in the
ABC Publisher's Statement for the six months ended Sept. 24, 1995, a 2%
increase from the comparable period in 1994. For the full year of 1995,
USA TODAY circulation volume and revenue rose 2% and 3%,
respectively.

In millions, as reported

       Newspaper circulation
Year         revenues
- ----   ---------------------
1988          $686
1989          $718
1990          $730
1991          $777
1992          $807
1993          $839
1994          $849
1995          $869
1996          $918
1997          $948

     Newspaper operating expenses: Newspaper operating expenses rose $53
million or 2% in 1997. The company benefited from lower average
newsprint costs for the year. Newsprint expense for the year,
including the effect of acquisitions, was 15% lower than in

                                   -27-

1996. Consumption was higher by 8%, but average prices were down 21%.

     Newsprint prices peaked in early 1996 and then began a steady decline
through the first quarter of 1997. They have risen since, but until the fourth
quarter of 1997, per-ton prices were below year-ago levels. Average prices
for the fourth quarter were about even with 1996.

     Some suppliers have announced plans to increase newsprint prices further
in 1998. However, it is not certain at this time if market conditions will
support these plans. The company's average cost per ton will be higher in
1998 because of the carryover effect of 1997 price increases.

     Payroll costs for newspaper operations rose 7% in 1997, in part because of
the acquired properties but also because of slight increases in headcount,
particularly in the ad sales area, and modest salary and wage increases.

     For 1998, salary and wage increases are expected to be modest and
headcount levels are not expected to change significantly from those at the
end of 1997.

     Newspaper operating expenses rose $158 million or 6% for 1996. Most of
this increase relates to the impact of the Multimedia newspapers and higher
newsprint costs. Newsprint expense for the year, including the effect of
Multimedia newspapers, rose 15%, reflecting greater consumption, up 4%,
and higher average costs per ton, up 11% from 1995.

     Payroll costs rose 4% in 1996, reflecting the Multimedia purchase,
partially offset by savings in Detroit. Year-end employment levels were down
slightly from 1995.

     Strike-related costs in Detroit, principally security and property damage,
were significantly lower for the full year of 1996 than they were for 1995.

     Newspaper operating expenses rose $115 million or 5% in 1995. Newsprint
price increases had a dramatic effect on costs. In total, newsprint expense
rose 33%. The average cost per ton consumed in 1995 rose more than 40%
from 1994's average. For 1995, the company's consumption declined
nearly 5%.

     Payroll costs rose 2% in 1995. Year-end employment levels were down
slightly, principally because of reduced staffing requirements at the Detroit
operations, reflecting efficiencies of the replacement worker group.
Newspaper costs were also affected significantly in 1995 by incremental
costs in Detroit related to the strike, including security costs, repair costs
from strike-related damage and costs for employees "loaned" to Detroit
from other newspapers to assist in publishing operations.

     Newspaper operating income: The company's newspapers produced a
record earnings performance in 1997. Operating profit rose $216 million or
27%. Nearly all local newspapers reported higher profits and significant
gains were achieved in Detroit and other large-city markets, as well as at
USA WEEKEND. At USA TODAY, operating results were sharply higher.

     For 1998, the company expects to achieve further operating income growth
fueled by broad-based revenue growth for its local newspapers and for USA
TODAY. Newspaper earnings growth will be tempered by higher average
newsprint prices for 1998.

     Operating income for the newspaper segment rose $84.7 million or 12% for
1996, reflecting the incremental contribution of Multimedia newspapers and
sharply improved results at USA TODAY and The Detroit News. Higher
newsprint prices and the shorter reporting period tempered these earnings
gains for the full year of 1996.

     Operating income for the newspaper segment declined $32 million in 1995,
primarily because of sharply higher newsprint costs and the effect of the
strike in Detroit. With the principal exception of Detroit, most of the
company's other local newspapers reported improved operating income, as
advertising and circulation revenue gains, coupled with cost controls, more
than offset the impact of newsprint price increases. At USA TODAY,
earnings declined as newsprint expense increased more than 40%.

Broadcasting

     Broadcasting operations at the end of 1997 included 18 television stations
and five radio stations. However, in early fiscal 1998, the company
completed the previously announced sale of its radio stations and the
acquisition of two Maine TV stations. With the completion of the Maine
transaction, Gannett Broadcasting at the start of fiscal 1998 includes 20
television stations reaching 16.3% of U.S. television homes.

     Over the last three years, reported broadcasting revenues, expenses,
operating income and operating cash flows were as follows:

In millions of dollars

                        1997   Change   1996   Change   1995   Change
                       ------  ------  ------  ------  ------  ------
Revenues               $  704     2%   $  687    47%   $  466    15%
Expenses               $  376    (4%)  $  390    38%   $  283     2%
                       ------  ------  ------  ------  ------  ------
Operating income       $  328    10%   $  297    63%   $  183    42%
                       ======  ======  ======  ======  ======  ======
Operating cash flow    $  385    10%   $  349    64%   $  213    35%

     Total reported broadcasting revenues rose $16.6 million or 2% in 1997. On
a pro forma basis, broadcasting revenues rose 4% for the year.

     For television, pro forma local and national advertising revenues
increased 5% and 1%, respectively, over 1996. This reflects strong advertising
demand because of continued high ratings for NBC programming (10 of the
stations owned in 1997 are NBC affiliates) and overall growth in the
economy. The revenue increase was tempered by the absence of incremental
revenues from 1996's Summer Olympics and political advertising. The
stations in Denver, Jacksonville, Phoenix and Minneapolis reported the
strongest revenue growth. Gains were achieved in key categories such as
financial, insurance, health care, telecommunications and packaged goods,
and participation in post-season baseball in Cleveland and Atlanta helped the
division.

     For the five radio stations owned during 1997, revenues rose 17%. Local
and national sales increased in all three markets.

                                   -28-

     Here's a summary of pro forma revenues for television and radio
broadcasting stations owned at the end of 1997:

Pro-forma broadcast revenues, in millions of dollars


                        1997   Change   1996   Change   1995   Change
                       ------  ------  ------  ------  ------  ------
Revenues               $  704     4%   $  677    12%   $  602     9%


     Reported operating costs for broadcast declined $14 million or 4%, mainly
because of Olympics-related costs in 1996. On a pro forma basis, operating
costs declined 2%. Pro forma payroll costs increased 4%, while program
amortization decreased 8%.

     For the third consecutive year, operating income from broadcasting reached
a record high, climbing $31.0 million to $328.3 million in 1997. The 10%
increase reflects continued high demand for TV and radio advertising in most
markets throughout the year and continued cost controls.

     For 1998, increased revenues and operating earnings in broadcasting are
expected. However, TV station performance will be affected by the level of
success of local news programming, network programming and general
economic conditions.

     Total broadcasting revenues rose $220.7 million or 47% in 1996. This
increase includes the effect of the acquisition of five TV stations from
Multimedia in December 1995. On a pro forma basis, broadcasting revenues
rose 12% for the year.

     For television, pro forma local and national advertising revenues each
increased 14% over 1995. Revenues related to NBC's carriage of the 1996
Olympic Games in Atlanta contributed a significant portion of the growth,
particularly at our NBC affiliate WXIA-TV in Atlanta. The incremental
effect of political advertising also boosted revenues.  Reported operating
costs for broadcast rose $106 million or 38%, reflecting ownership of the
Multimedia television stations for all of 1996.

     Total broadcasting revenues rose $60 million or 15% in 1995, reflecting
the December 1995 acquisition of five TV stations and two radio stations from
Multimedia and the December 1994 acquisition of a TV station.  For
television, pro forma local advertising revenues rose 13%, while national ad
revenues rose 6%.

     Reported operating costs for broadcast rose just $6 million or 2% in 1995.
The improvement in broadcast earnings for 1995 reflects gains at all but two
TV stations and two radio stations, the additional week in fiscal 1995 and
the Multimedia acquisition in December 1995.

In millions, as reported

Year   Broadcast revenues
- ----   ------------------
1988         $391
1989         $408
1990         $397
1991         $357
1992         $371
1993         $397
1994         $407
1995         $466
1996         $687
1997         $704

Cable and security
     As part of the Multimedia purchase, the company acquired a cable
television business and an alarm security business, both headquartered in
Wichita, Kan. At the end of 1997, the cable television business served 478,000
subscribers in five states. The alarm security business operated in 10 states.
Operating results from the cable television and alarm security businesses for
1997, 1996 and the month of December 1995 were as follows:

In millions of dollars

                      1997  Change   1996    1995
                      ----  ------   ----    ----

Revenues              $255     9%    $233    $ 18
Expenses              $201     8%    $186    $ 13
                      ----   ----    ----    ----
Operating income      $ 54    15%    $ 47    $  5
                      ====   ====    ====    ====
Operating cash flow   $121     8%    $112    $  9

     Cable television revenues increased 9% in 1997. This revenue increase
reflects a 3% increase in basic subscribers and higher monthly subscription
rates. While the number of pay subscribers increased 2%, associated
revenue decreased by 5% because of the timing of various promotional
campaigns and an overall soft pay-TV market. All other revenue categories,
including advertising and pay-per-view, increased. Alarm security revenues
increased 13% in 1997, reflecting account acquisitions during the year and
additional account installations and purchases (net of account disconnects),
offset by a modest decline in average monitoring revenue per account.

     Cable television operating costs increased 8% in 1997. Program costs were
up 16% and payroll costs increased 9%. Alarm security costs increased
10%.

     On a pro forma basis, cable television revenues increased 10% in 1996.
This revenue increase reflects a 2% increase in basic subscribers and higher
monthly subscription rates. The number of pay subscribers declined 1%. All
revenue categories, including advertising and pay-per-view, increased. On a
pro forma basis, alarm security revenues increased 37% in 1996, reflecting
the December 1995 purchase of approximately 18,000 accounts, additional
account installations and purchases (net of account disconnects), and an
increase in average monitoring revenue per account.

     Cable television pro forma operating costs increased 9% in 1996. Program
costs were up 11% and payroll costs increased 5%. Alarm security costs
increased 29%, reflecting additions to the customer base.

     Operating income for cable and security rose $6.9 million or 15% for 1997.

     In December 1997, the company announced an agreement to acquire cable
systems serving approximately 128,000 subscribers in Kansas from
Tele-Communications, Inc., in exchange for its cable systems serving
approximately 93,000 subscribers in suburban Chicago, plus cash. This
transaction is subject to regulatory approval and is expected to close in
mid-1998. The company sold its alarm security business in March 1998.

                                   -29-

     The company expects increased competition in the future, particularly from
direct-to-home satellite providers. However, the company expects to
increase its cable television revenues and segment operating earnings in
1998 from continued internal growth and the additional subscribers to be
acquired in the exchange with Tele-Communications, Inc.

Consolidated operating expenses
     Over the last three years, the company's consolidated operating expenses
were as follows:

Consolidated operating expenses, in millions of dollars

                        1997   Change    1996   Change   1995   Change
                       ------  ------  ------  ------  ------  ------
Cost of sales          $2,369     --   $2,368    12%   $2,110     7%
Selling, general
 and admin. expenses   $  744     6%   $  699    13%   $  619    (2%)
Depreciation           $  201     4%   $  193    34%   $  144    (2%)
Amortization of
  intangible assets    $  100     6%   $   94    91%   $   49    12%

     Cost of sales for 1997 was unchanged from 1996. Although newsprint
consumption for 1997 increased 8% (including consumption by businesses
acquired in 1997), newsprint expense declined 15% for the year because of
lower newsprint prices. Newsprint savings were offset principally by the
incremental costs of properties acquired in 1997.

     Selling, general and administrative costs (SG&A) rose $44.1 million or 6%
for 1997, primarily because of the effect of properties acquired in 1997.

     Depreciation expense rose $8.1 million or 4% in 1997, while amortization
of intangibles increased $5.6 million or 6%. Both increases are attributable
to newly acquired properties.

     Cost of sales for 1996 rose $258.1 million or 12%. Principal factors
contributing to the increase were the incremental costs of Multimedia
properties and higher average newsprint prices for the year. Newsprint
expense rose 15% for the year, including the cost of Multimedia
consumption. Total newsprint consumption for 1996 was 4% greater than in
1995. The overall increase in cost of goods sold was tempered by the
favorable impact of lower strike-related costs in Detroit and the longer (by
one week) reporting period in 1995.

     SG&A rose $80.4 million or 13% for 1996. Most of this increase relates to
incremental costs of Multimedia properties.

     Depreciation expense rose $49.3 million or 34% for 1996, while
amortization of intangibles rose $45 million or 91%. Both increases are
primarily the result of incremental costs associated with the Multimedia
properties.

     Cost of sales for 1995 rose $141.7 million or 7%. The principal factor
contributing to this increase was the sharp rise in newsprint prices, which
began in 1994. Newsprint expense rose 33% for the year as the average cost
per ton consumed was 40% higher than in 1994. Newsprint consumption in
1995 was reduced by 5%. Other factors contributing to the increase include
strike-related costs in Detroit, the additional week in the 1995 fiscal year
and the operating results for Multimedia businesses for December 1995.

     SG&A declined $10.4 million or 2% in 1995, as reduced charitable
contributions ($20 million lower than in 1994) more than offset modest
increases in other SG&A costs. Promotion costs were also lower in 1995,
particularly for broadcasting.

     Depreciation expense declined $2 million or 2% in 1995, principally
because certain assets from previous acquisitions became fully depreciated.
Amortization of intangible assets was $5 million or 12% higher in 1995
because of amortization for December of the intangible assets recorded in
connection with the Multimedia acquisition.

     Payroll and newsprint costs (along with certain other production material
costs), the largest elements of the company's operating expenses, are
presented below, expressed as a percentage of total pre-tax operating
expenses.

                                    1997   1996    1995
                                  ------  ------  ------
Payroll and employee benefits      43.0%   40.2%   43.7%
Newsprint and other production
   material                        19.0%   21.4%   21.6%

Non-operating income and expense
     Interest expense for 1997 decreased $37.3 million or 28%, reflecting the
paydown of commercial paper borrowings from operating cash flow and the
proceeds from the sale of the outdoor and entertainment businesses in the
second half of 1996. During the fourth quarter of 1997, however, interest
expense increased $.9 million or 4% over the fourth quarter of 1996
because of commercial paper borrowings to finance the New Jersey Press,
Inc., acquisition. The company's financing activities are discussed further in
the Financial Position section of this report. Interest expense for 1998 is
expected to decline with the further paydown of commercial paper
borrowings from strong operating cash flow and part of the proceeds from
the sale of the radio stations and the alarm security business. The change in
other non-operating income from a positive (income) position of $149.1
million in 1996 to a net expense of $15.6 million in 1997 is related to the
non-cash gain of $158 million reported in 1996 (discussed on page 24 of
this report).

     Interest expense for 1996 rose $83.4 million or 160%, reflecting
commercial paper borrowings in December 1995 to finance the acquisition of
Multimedia. Other non-operating income includes the December 1996
non-cash gain of $158 million upon the exchange of broadcast stations,
which is discussed on page 24 of this report.

     Interest expense for the full year of 1995 rose $7 million or 14%. For the
period prior to the Multimedia acquisition, the company's interest expense
was below year-ago levels as outstanding debt had been reduced
substantially. For December, interest expense rose sharply because of
commercial paper borrowings to finance the acquisition.

                                   -30-

Provision for income taxes
     The company's effective income tax rate for continuing operations was
41.1% in 1997, 42.6% in 1996 and 40.6% in 1995. The decrease in the
effective tax rate in 1997 reflects the diminished impact of the amortization
of non-deductible intangible assets because of earnings gains. The increase
in the effective tax rate for 1996 is attributable to amortization of
non-deductible intangible assets recorded in connection with the Multimedia
acquisition. The company expects its effective tax rate to decline further in
1998, as earnings gains will again diminish the impact of the amortization of
non-deductible intangible assets.

Income from continuing operations
     The company reported earnings and basic earnings per share from
continuing operations of $712.7 million or $2.52 per share, both record
highs, up 34% from record results in 1996 (excluding the 1996 non-cash,
non-operating, after-tax gain of $93 million or $.33 per share on the
exchange of broadcast stations).

     The company's operating income, which excludes interest expense and
other non-operating items, reached $1.316 billion in 1997, an increase of
$250 million or 23%. Each of the company's segments reported higher
earnings for the year, with record operating results at USA TODAY and a
favorable year-to-year comparison at The Detroit News. Lower interest costs
and a lower effective tax rate also contributed.

     The average basic shares outstanding for 1997 totaled 283,360,000,
compared with 281,782,000 in 1996, reflecting shares issued for employee
stock awards. Average diluted shares totaled 285,610,000 for 1997 and
283,426,000 for 1996.

     Excluding the non-recurring gain on the exchange of broadcast stations,
earnings in 1996 from continuing operations totaled $530.5 million or $1.88
per share, both record highs, up 15% from record results in 1995. Earnings
from Multimedia properties, net of related amortization, interest and taxes,
contributed to the gain. Strong results at USA TODAY and broadcast
stations were also important factors, along with diminished strike-related
effects in Detroit. Operating income reached $1.066 billion in 1996, an
increase of $244 million or 30%.

     In 1995, earnings from continuing operations totaled $459.4 million or
$1.64 per share. Average shares outstanding for 1995 totaled 280,312,000,
nearly 3% lower than in 1994. Earnings progress was fueled by strong
broadcast results, which helped offset the impact of higher newsprint prices
and the strike in Detroit.

Discontinued operations
     The company's outdoor advertising business, owned since 1979, and its
television entertainment business, acquired with Multimedia in December
1995, were both sold in 1996. An after-tax gain, classified with discontinued
operations, was recorded on the sale of outdoor, which totaled $295 million
or $1.05 per share. The selling price for the entertainment business
approximated the value assigned to it upon acquisition and, therefore, no
gain was recognized.

     Earnings from these businesses for the period they were owned leading up
to the date of sale, are also reported as income from discontinued operations
and collectively amounted to $24.5 million or $.09 per share in 1996,
compared with $17.9 million or $.06 per share in 1995. The increase for
1996 relates principally to nearly a full year of ownership of the
entertainment business, compared with only one month in 1995.

In millions

             Income from
Year    Continuing Operations
- ----    ---------------------
1988           $341
1989           $374
1990           $355
1991           $292
1992           $341**
1993           $389
1994           $455
1995           $459
1996           $530*, $624
1997           $713

*Before non-recurring gain from exchange of broadcast stations
**Before effect of accounting principle changes.  In 1992, the company adopted
Statement of Financial Accounting Standards No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions," and No. 109, "Accounting for
Income Taxes."  In connection therewith, the company recorded a one-time,
non-cash charge in 1992 of $146 million or $.51 per share.

Net income
     Net income for 1997 totaled $712.7 million or $2.52 in earnings per share
(basic), compared with $943.1 million or $3.35 per share in 1996. Results in
1996 include after-tax earnings from discontinued operations of $319.1
million or $1.14 per share, plus an after-tax non-cash gain of $93 million or
$.33 per share on the exchange of broadcast stations.

     In 1996, net income rose $465.8 million or 98% to $943.1 million and
earnings per share reached $3.35, up 97% from $1.70 in 1995. Results in
1996 include after-tax earnings from discontinued operations of $319.1
million or $1.14 per share, plus an after-tax gain of $93 million or $.33 per
share on the exchange of broadcast stations.

     Net income rose $11.9 million or 3% in 1995. Earnings per share reached
$1.70, up 6% from $1.61 in 1994.

     The company's return on shareholders' equity, based on earnings from
continuing operations, is presented in the table below.

In percentages, before non-recurring gains and accounting principle changes:

        Return on shareholders'
Year            equity
- ----    -----------------------
1988             20.1
1989             19.8
1990             17.5
1991             16.2
1992             21.9
1993             22.3
1994             24.4
1995             23.2
1996             20.9
1997             22.2


                                   -31-

     The percentage return on equity shown on the previous page for 1996
declined from 1995 because the results of discontinued operations, including
the gain on the sale of outdoor, and the gain on the exchange of broadcast
stations are included in shareholders' equity, but are excluded from the
amount of earnings from continuing operations used in the calculation.

     With continued earnings growth in 1997, return on equity has risen to a
point within the higher range achieved in recent years.

Other matters: 1998 dispositions
     In April 1997, the company announced that it had entered into an agreement
to sell its remaining radio stations, WGCI-AM/FM in Chicago, KHKS-FM
in Dallas and KKBQ-AM/FM in Houston, to Evergreen Media. The
transaction closed on Dec. 29, 1997, the first day of the company's 1998
fiscal year. On Dec. 30, 1997, the company sold its newspaper in St.
Thomas, Virgin Islands. In March 1998, the company sold its alarm security
business and on Feb. 3, 1998, the company contributed its Saratoga Springs,
N.Y., newspaper to the Gannett Foundation. These transactions will be
reflected in the company's 1998 first quarter financial statements.

Financial Position

Liquidity and capital resources
     The principal changes in the company's financial position for 1997 include
the paydown of debt by $145 million from operating cash flow and the
effect of acquisitions.

     The increase in property, plant and equipment in 1997 reflects capital
spending of $221 million plus amounts recorded in connection with acquired
properties. The increase in intangible assets reflects amounts recorded in
connection with acquired properties. The increase in trade receivables is the
result of revenue growth and amounts from newly acquired companies.
Inventory balances increased because of higher newsprint prices at the end
of 1997 and higher quantities on hand.

     The company's consolidated operating cash flow (defined as operating
income plus depreciation and amortization of intangible assets) totaled
$1.617 billion in 1997 compared with $1.354 billion in 1996 and $1.015
billion in 1995. The increase of $263 million or 19.5% in 1997 reflects
operating improvements for each of the company's business segments,
particularly for newspapers and broadcast. The table below presents
operating cash flow as a percent of sales over the last 10 years.

         Operating cash flow
Year     as a percent of sales
- ----     ---------------------
1988             26.3
1989             27.4
1990             25.8
1991             23.1
1992             24.4
1993             26.1
1994             27.5
1995             27.1
1996             30.6
1997             34.2

     Working capital, or the excess of current assets over current liabilities,
totaled $117.1 million at the end of 1997 and $47.6 million at the end of
1996. Certain key measurements of the elements of working capital for the
last three years are presented in the following chart:

                                  1997      1996      1995
                                --------  --------  --------
Current ratio                   1.2-to-1  1.1-to-1  1.1-to-1
Accounts receivable turnover       7.8       7.7       7.2
Newsprint inventory turnover       7.3       7.1       7.6

A summary of debt transactions in 1997 follows:


In millions of dollars

Long-term debt at end of 1996*        $1,904
Payments in 1997                        (145)
                                      -------
Long-term debt at end of 1997*        $1,759

*including current portion

     The company's operations have historically generated strong positive cash
flow, which, along with the company's program of issuing commercial
paper and maintaining bank revolving credit agreements, has provided
adequate liquidity to meet the company's requirements, including
requirements for acquisitions.

     The company regularly issues commercial paper for cash requirements and
maintains a revolving credit agreement equal to or in excess of any
commercial paper outstanding. The company's commercial paper has been
rated A-1+ and P-1 by Standard & Poor's and Moody's Investors Service,
respectively. The company's senior unsecured long-term debt is rated AA-
by Standard & Poor's and A1 by Moody's Investors Service. The company
has filed a shelf registration statement with the Securities and Exchange
Commission under which up to $1.5 billion of additional debt securities may
be issued. The company's Board of Directors has established a maximum
aggregate level of $3.5 billion for amounts which may be raised through
borrowings or the issuance of equity securities.

     In the absence of additional major cash outlays for acquisitions or share
repurchases, the company expects to repay a significant portion of its
commercial paper obligations and other long-term debt from 1998 operating
cash flow and part of the cash proceeds from the sale of the company's five
remaining radio stations and its alarm security business, both of which
closed in early 1998.

     Note 4 to the company's financial statements on page 41 of this report
provides further information concerning commercial paper transactions and
the company's $3.0 billion revolving credit agreement. The commitment fee
on the revolving credit agreement was reduced from .09% at the end of
1997 to .07% in February 1998.

     The company has a capital expenditure program (not including
business acquisitions) of approximately $256 million planned for 1998,
including approximately $35 million for land and buildings or renovation
of existing facilities, $204 million for machinery and equipment and
cable systems, and $17 million for

                                   -32-

vehicles and other assets. Management reviews the capital expenditure
program periodically and modifies it as required to meet current business
needs. It is expected that the 1998 capital program will be funded from
operating cash flow.

Capital stock
     On Aug. 19, 1997, the company's Board of Directors approved a
two-for-one stock split effective on Oct. 6, 1997, for shareholders of record
on Sept. 12, 1997. In this report, all share and per-common-share amounts
have been adjusted to reflect the stock split. In connection with the split,
$162.2 million was transferred from retained earnings to common stock to
reflect the par value of additional shares issued. There were no share
repurchases in 1997 or 1995. Repurchases in 1996 were not significant.
Certain of the shares previously acquired by the company have been
reissued in settlement of employee stock awards.

     An employee 401(k) Savings Plan was established in 1990 which includes a
company matching contribution in the form of Gannett stock. To fund the
company's matching contribution, an Employee Stock Ownership Plan
(ESOP) was formed which acquired 2,500,000 shares of Gannett stock
from the company for $50 million. The stock purchase was financed with a
loan from the company.

     The company's common stock outstanding at Dec. 28, 1997 totaled
283,874,479 shares, compared with 282,635,410 shares at Dec. 29, 1996.

Dividends
     Dividends declared on common stock amounted to $209.9 million in 1997,
compared with $200.1 million in 1996, reflecting an increase in the dividend
rate and a greater number of shares outstanding.

              Dividends declared
Year               per share
- ----          ------------------
1988                $.51
1989                $.56
1990                $.61
1991                $.62
1992                $.63
1993                $.65
1994                $.67
1995                $.69
1996                $.71
1997                $.74

     In October 1997, the quarterly dividend was increased from $.18 to
$.19 per share.

Cash dividends                     Payment date    Per share
                                   ------------    ---------
1997           4th Quarter         Jan. 2, 1998       $.19
               3rd Quarter         Oct. 1, 1997       $.19
               2nd Quarter         July 1, 1997       $.18
               1st Quarter         April 1, 1997      $.18
1996           4th Quarter         Jan. 2, 1997       $.18
               3rd Quarter         Oct. 1, 1996       $.18
               2nd Quarter         July 1, 1996       $.175
               1st Quarter         April 1, 1996      $.175

Effects of inflation and changing prices
     The company's results of operations and financial condition have not been
significantly affected by inflation and changing prices. In all of its
principal businesses, subject to normal competitive conditions, the company
generally has been able to pass along rising costs through increased selling
prices. Further, the effects of inflation and changing prices on the company's
property, plant and equipment and related depreciation expense have been
reduced as a result of an ongoing capital expenditure program and because
of the availability of replacement assets with improved technology and
efficiency.

Year 2000 issues
     The company has developed a plan to ensure that all of its key computer
systems will be Year 2000 compliant in advance of Dec. 31, 1999. The plan
encompasses all operating properties as well as corporate headquarters. It
also includes review and revision, where necessary, of computer
applications that directly connect elements of the company's business with
customers, suppliers and service providers.
     Implementation of the plan began in 1996 and will continue through 1999.
It involves capital expenditures for new software and hardware, as well as
spending to modify existing software. In most cases, these systems
purchases and modifications will not only provide for Year 2000
compliance, but will also enhance the company's operations. Many of the
changes would have been made in any event, although perhaps on a
different timetable.
     The company does not believe it will face Year 2000 systems problems that
could significantly impact operations or financial results. Costs of achieving
Year 2000 compliance have not been and are not expected to be material to
the company's financial position or results of operations.

                                   -33-


<PAGE>


<TABLE>
CONSOLIDATED BALANCE SHEETS
In thousands of dollars
<CAPTION>

                                                Dec. 28, 1997           Dec. 29, 1996
                                                -------------           -------------
<S>                                            <C>                     <C>

ASSETS
Current assets
Cash                                           $      45,059           $      27,179
Marketable securities, at cost,
  which approximates market                            7,719                   4,023
Trade receivables (less allowance for
  doubtful receivables of $18,020 and
  $18,942, respectively)                             638,311                 569,095
Other receivables                                     45,316                  47,850
Inventories                                          101,080                  73,621
Prepaid expenses                                      47,149                  44,837
                                                ------------            ------------
Total current assets                                 884,634                 766,605
                                                ------------            ------------
Property, plant and equipment
Land                                                 175,884                 174,838
Buildings and improvements                           840,157                 770,456
Cable and security systems                           548,219                 481,053
Machinery, equipment and fixtures                  2,140,148               1,926,058
Construction in progress                              50,429                  70,995
                                                ------------            ------------
Total                                              3,754,837               3,423,400
Less accumulated depreciation                     (1,562,795)             (1,429,340)
                                                ------------            ------------
Net property, plant and equipment                  2,192,042               1,994,060
                                                ------------            ------------
Intangible and other assets
Excess of acquisition cost over the
  value of assets acquired (less
  amortization of $664,666 and $569,527,
  respectively)                                    3,584,393               3,393,931
Investments and other assets (Note 5)                229,282                 195,001
                                                ------------            ------------
Total intangible and other assets                  3,813,675               3,588,932
                                                ------------            ------------
Total assets                                   $   6,890,351           $   6,349,597
                                                ============            ============

</TABLE>

                                        -34-


<PAGE>


<TABLE>
CONSOLIDATED BALANCE SHEETS
In thousands of dollars
<CAPTION>

                                                Dec. 28, 1997           Dec. 29, 1996
                                                -------------           -------------
<S>                                            <C>                     <C>

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt (Note 4)  $      18,375           $      23,302
Accounts Payable
  Trade                                              274,550                 236,560
  Other                                               25,710                  25,278
Accrued liabilities
  Compensation                                       116,656                  93,165
  Interest                                             8,999                  11,361
  Other                                              137,944                 126,832
Dividend payable                                      53,915                  51,890
Income taxes (Note 7)                                 12,893                  46,098
Deferred income                                      118,459                 104,510
                                                ------------            ------------
Total current liabilities                            767,501                 718,996
                                                ------------            ------------
Deferred income taxes (Note 7)                       402,254                 396,170
Long-term debt (Note 4)                            1,740,534               1,880,293
Postretirement medical and life
  insurance liabilities (Note 6)                     312,082                 301,729
Other long-term liabilities                          188,244                 121,591
                                                ------------            ------------
Total liabilities                                  3,410,615               3,418,779
                                                ------------            ------------
Shareholders' equity (Notes 4 and 8)
Preferred stock, par value $1: Authorized
  2,000,000 shares: Issued, none
Common stock, par value $1:  Authorized
  400,000,000 shares: Issued, 324,420,732
  shares and 162,210,366 shares,respectively         324,421                 162,210
Additional paid-in capital                           104,366                  86,126
Retained earnings                                  3,995,712               3,654,681
                                                ------------            ------------
                                                   4,424,499               3,903,017
Less Treasury stock, 40,546,253 shares and
  41,785,322 shares, respectively, at cost          (916,708)               (942,609)
Deferred compensation related to ESOP (Note 8)       (28,055)                (29,590)
                                                ------------            ------------
Total shareholders' equity                         3,479,736               2,930,818
                                                ------------            ------------
Commitments and contingent liabilities
  (Note 9)
                                                ------------            ------------
Total liabilities and shareholders' equity     $   6,890,351           $   6,349,597
                                                ============            ============
</TABLE>

                                    -35-

<PAGE>


<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
In thousands of dollars
<CAPTION>

Fiscal year ended                               Dec. 28, 1997   Dec. 29, 1996   Dec. 31, 1995
                                                -------------   -------------   -------------
<S>                                             <C>             <C>             <C>
Net operating revenues
Newspaper advertising                           $ 2,634,334     $ 2,417,550     $ 2,219,250
Newspaper circulation                               948,141         917,677         869,173
Broadcasting                                        703,558         686,936         466,187
Cable and Security                                  255,263         232,500          17,831
All other                                           188,195         166,444         171,426
                                                -------------   -------------   -------------
Total                                             4,729,491       4,421,107       3,743,867
                                                -------------   -------------   -------------
Operating expenses
Cost of sales and operating expenses,
   exclusive of depreciation                      2,368,572       2,367,848       2,109,743
Selling, general and administrative expenses,
   exclusive of depreciation                        743,578         699,484         619,125
Depreciation                                        201,100         193,011         143,739
Amortization of intangible assets                    99,973          94,359          49,328
                                                -------------   -------------   -------------
Total                                             3,413,223       3,354,702       2,921,935
                                                -------------   -------------   -------------
Operating income                                  1,316,268       1,066,405         821,932
                                                -------------   -------------   -------------
Non-operating income (expense)
Interest expense                                    (98,242)       (135,563)        (52,175)
Interest income                                       6,517           6,727           7,514
Other (Note 2)                                      (15,564)        149,098          (3,760)
                                                -------------   -------------   -------------
Total                                              (107,289)         20,262         (48,421)
                                                -------------   -------------   -------------
Income before income taxes                        1,208,979       1,086,667         773,511
Provision for income taxes                          496,300         462,700         314,100
                                                -------------   -------------   -------------
Income from continuing operations                   712,679         623,967         459,411
Discontinued operations
Income from the operation of discontinued
   operations, net of income taxes of
   $17,940 and $12,100, respectively                                 24,540          17,851
Gain from the sale of discontinued
   operations, net of income taxes of $195,000                      294,580
                                                -------------   -------------   -------------
Total income from discontinued operations                           319,120          17,851
                                                -------------   -------------   -------------
Net income                                      $   712,679     $   943,087     $   477,262
                                                =============   =============   =============
Earnings per share - basic
Earnings from continuing operations                   $2.52           $2.21           $1.64
Earnings from discontinued operations:
   Discontinued operations, net of tax                                 0.09            0.06
   Gain from sale of discontinued operations,
   net of tax                                                          1.05
                                                -------------   ------------    -------------
Net income per share - basic                          $2.52           $3.35           $1.70
                                                =============   ============    =============
Earnings per share - diluted
Earnings from continuing operations                   $2.50           $2.20           $1.63
Earnings from discontinued operations:
   Discontinued operations, net of tax                                 0.09            0.06
   Gain from sale of discontinued operations,
   net of tax                                                          1.04
                                                -------------   ------------    -------------
Net income per share - diluted                        $2.50           $3.33           $1.69
                                                =============   ============    =============
</TABLE>


                                   -36-

<PAGE>


<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands of dollars
<CAPTION>
Fiscal year ended                                     Dec. 28, 1997     Dec. 29, 1996     Dec. 31, 1995
                                                      -------------     -------------     -------------
<S>                                                   <C>               <C>               <C>
Cash flows from operating activities
Net income                                            $     712,679     $     943,087     $     477,262
Adjustments to reconcile net income to operating
  cash flows
Discontinued operations                                                      (319,120)          (17,851)
Depreciation                                                201,100           193,011           143,739
Amortization of intangibles                                  99,973            94,359            49,328
Deferred income taxes                                       (14,244)           68,254            23,636
Other, net                                                  (20,166)         (117,854)           40,775
Increase in receivables                                     (41,684)          (50,046)          (23,093)
(Increase) decrease in inventories                           (6,336)           16,489           (46,998)
(Increase) decrease in film broadcast rights                   (644)            1,755             5,910
(Decrease) increase in accounts payable                     (40,487)          (25,659)           33,561
(Decrease) increase in interest and taxes payable           (26,336)           20,784           (14,053)
Change in other assets and liabilities, net                  17,202          (218,191)          (68,755)
                                                      -------------     -------------     -------------
Net cash flow from operating activities                     881,057           606,869           603,461
                                                      -------------     -------------     -------------
Cash flows from investing activities
Purchase of property, plant and equipment                  (221,251)         (260,047)         (183,536)
Payments for acquisitions, net of cash acquired            (355,343)                         (1,834,862)
Change in other investments                                  (8,099)          (17,513)           (3,326)
Proceeds from sale of certain assets                         40,859           778,716             2,324
Collection of long-term receivables                           5,388             3,248             5,030
                                                      -------------     -------------     -------------
Net cash (used for) provided by investing activities       (538,446)          504,404        (2,014,370)
                                                      -------------     -------------     -------------
Cash flows from financing activities
Proceeds from long-term debt                                                                  2,054,000
Payments of long-term debt                                 (144,903)         (954,924)         (464,973)
Dividends paid                                             (206,557)         (197,417)         (191,947)
Cost of common shares repurchased                                              (1,443)
Proceeds from issuance of common stock                       30,425            26,964            16,200
                                                      -------------     -------------     -------------
Net cash (used for) provided by financing activities       (321,035)       (1,126,820)        1,413,280
                                                      -------------     -------------     -------------
Effect of currency exchange rate change                                          (236)              362
Increase (decrease) in cash and cash equivalents             21,576           (15,783)            2,733
Balance of cash and cash equivalents at
  beginning of year                                          31,202            46,985            44,252
                                                      -------------     -------------     -------------
Balance of cash and cash equivalents at end of year   $      52,778     $      31,202     $      46,985
                                                      =============     =============     =============
</TABLE>

                                   -37-

<PAGE>


<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
In thousands of dollars
Fiscal years ended
December 31, 1995
December 29, 1996
and December 28, 1997
<CAPTION>
                                                                       Foreign                  Deferred
                             Common stock  Additional                 currency                compensation
                                $1 par      paid-in      Retained    translation   Treasury     related
                                value       capital      earnings    adjustment     stock       to ESOP       Total
                             ------------ ------------ ------------- ----------- ------------ ------------ ------------
<S>                          <C>          <C>          <C>           <C>         <C>          <C>          <C>
Balance: Dec. 25, 1994        $  162,212   $   76,604   $ 2,639,440   $ (12,894) $(1,008,199)  $  (34,925)  $1,822,238
                             ------------ ------------ ------------- ----------- ------------ ------------ ------------
Net income, 1995                                            477,262                                            477,262
Dividends declared, 1995:
 $0.69 per share                                           (193,415)                                          (193,415)
Stock options exercised                        (2,042)                                21,931                    19,889
Stock issued under
 incentive plan                                (2,380)                                12,996                    10,616
Tax benefit derived from
 stock incentive plans                          4,629                                                            4,629
Compensation expense
 related to ESOP                                                                                    3,330        3,330
Tax benefit from ESOP                                           465                                                465
Foreign currency
 translation adj./other               (2)                                   636                                    634
                             ------------ ------------ ------------- ----------- ------------ ------------ ------------
Balance: Dec. 31, 1995        $  162,210   $   76,811   $ 2,923,752   $ (12,258) $  (973,272)  $  (31,595)  $2,145,648
                             ------------ ------------ ------------- ----------- ------------ ------------ ------------
Net income, 1996                                            943,087                                            943,087
Dividends declared, 1996:
 $0.71 per share                                           (200,099)                                          (200,099)
Treasury stock acquired                                                               (1,443)                   (1,443)
Stock options exercised                           585                                 26,225                    26,810
Stock issued under
 incentive plan                                   552                                  5,881                     6,433
Tax benefit derived from
 stock incentive plans                          8,178                                                            8,178
Compensation expense
 related to ESOP                                                                                    2,005        2,005
Tax benefit from ESOP                                           435                                                435
Foreign currency
 translation adj./other                                     (12,494)     12,258                                   (236)
                             ------------ ------------ ------------- ----------- ------------ ------------ ------------
Balance: Dec. 29, 1996        $  162,210   $   86,126   $ 3,654,681   $       0  $  (942,609)  $  (29,590)  $2,930,818
                             ------------ ------------ ------------- ----------- ------------ ------------ ------------
Net income, 1997                                            712,679                                            712,679
Dividends declared, 1997:
 $.74 per share                                            (209,867)                                          (209,867)
Stock options exercised                         4,152                                 25,781                    29,933
Stock issued under
 incentive plan                                   114                                    120                       234
Tax benefit derived from
 stock incentive plans                         13,974                                                           13,974
Compensation expense
 related to ESOP                                                                                    1,535        1,535
Tax benefit from ESOP                                           430                                                430
Par values of shares issued
 in 2-for-1 stock split
 effective Oct. 6, 1997          162,211                   (162,211)
                             ------------ ------------ ------------- ----------- ------------ ------------ ------------
Balance: Dec. 28, 1997        $  324,421   $  104,366   $ 3,995,712   $       0  $  (916,708)  $  (28,055)  $3,479,736
                             ------------ ------------ ------------- ----------- ------------ ------------ ------------
</TABLE>

                                   -38-

<PAGE>


Notes to consolidated financial statements

Note 1
Summary of significant accounting policies
     Fiscal year: The company's fiscal year ends on the last Sunday of the
calendar year. The company's 1997 fiscal year ended on Dec. 28, 1997, and
encompassed a 52-week period. The company's 1996 fiscal year
encompassed a 52-week period and its 1995 fiscal year encompassed a 53-week
period.

     Consolidation: The consolidated financial statements include the accounts
of the company and its subsidiaries after elimination of all significant
intercompany transactions and profits.

     Operating agencies: Five of the company's subsidiaries were participants
in joint operating agencies. Each joint operating agency performs the
production, sales and distribution functions for the subsidiary and another
newspaper publishing company under a joint operating agreement. The
company includes its appropriate portion of the revenues and expenses
generated by the operation of the agencies on a line-by-line basis in its
statement of income.

     Inventories: Inventories, which consist principally of newsprint, printing
ink, plate material and production film for the company's newspaper publishing
operations, are valued at the lower of cost (first-in, first-out) or market.

     Property and depreciation: Property, plant and equipment is recorded at
cost, and depreciation is provided generally on a straight-line basis over the
estimated useful lives of the assets. The principal estimated useful lives are:
buildings and improvements, 10 to 40 years; machinery, equipment and
fixtures and cable and alarm systems, four to 30 years. Major renewals and
improvements and interest incurred during the construction period of major
additions are capitalized. Expenditures for maintenance, repairs and minor
renewals are charged to expense as incurred.

     Excess of acquisition cost over fair value of assets acquired: The excess
of acquisition cost over the fair value of assets acquired represents the cost
of intangible assets at the time the subsidiaries were purchased. In accordance
with Opinion 17 of the Accounting Principles Board of the American
Institute of Certified Public Accountants, the excess acquisition cost of
subsidiaries arising from acquisitions accounted for as purchases since Oct.
31, 1970 ($4.18 billion at Dec. 28, 1997) is being amortized over periods
ranging from 15 to 40 years on a straight-line basis.

     Valuation of Long-Lived Assets: Effective Jan. 1, 1996, the company
adopted Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of" (SFAS 121). In accordance with this standard,
the company evaluates the carrying value of long-lived assets to be held and
used, including the excess of acquisition cost over fair value of assets
acquired, whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. The carrying value of a long-lived
asset, including the excess of acquisition cost over fair value of assets
acquired, is considered impaired when the projected undiscounted future
cash flows from the related business unit is less than its carrying value. The
company measures impairment based on the amount by which the carrying
value exceeds the fair market value. Fair market value is determined
primarily using the projected future cash flows discounted at a rate
commensurate with the risk involved. Losses on long-lived assets to be
disposed of are determined in a similar manner, except that fair market
values are reduced for the cost to dispose.

     Other assets: The company's television stations are parties to program
broadcast contracts. These contracts are recorded at the gross amount of
the related liability when the programs are available for telecasting. Program
assets are classified as current (as a prepaid expense) or noncurrent (as an
other asset) in the Consolidated Balance Sheets, based upon the expected
use of the programs in succeeding years. The amount charged to expense
appropriately matches the cost of the programs with the revenues associated
with them. The liability for these contracts is classified as current or
noncurrent in accordance with the payment terms of the contracts. The
payment period generally coincides with the period of telecast for the
programs, but may be shorter.

     Retirement plans: Pension costs under the company's retirement plans are
actuarially computed. It is the policy of the company to fund costs accrued
under its qualified pension plans.

     Postretirement benefits other than pensions: The company
recognizes the cost of postretirement medical and life insurance benefits on
an accrual basis over the working lives of employees expected to receive
such benefits.

     Income taxes: The company accounts for certain income and expense items
differently for financial reporting purposes than for income tax reporting
purposes. Deferred income taxes are provided in recognition of these
temporary differences.

     Per share amounts: In 1997, the company adopted SFAS 128, "Earnings Per
Share." Under SFAS 128, the company reports earnings per share on two
bases, basic and diluted. All basic income per share amounts are based on
the weighted average number of common shares outstanding during the
year. The calculation of diluted earnings per share also considers the
assumed dilution from the exercise of stock options and from stock
incentive rights.

     Minority interest: The company owns a 51% interest in WKYC-TV in
Cleveland, Ohio, and NBC owns a 49% interest. The financial statements of
WKYC-TV are included in the company's financial statements. The
minority interest in operating results is reflected as an element of
non-operating expense in the Consolidated Statements of Income and the
minority interest in the equity of WKYC-TV is reflected with other
long-term liabilities on the Consolidated Balance Sheets.

     Use of estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires the use of estimates and
assumptions that affect the reported amount of assets, liabilities, revenues
and expenses. Actual results could differ from these estimates.

                                   -39-

Note 2
Acquisitions, exchanges and dispositions
     1997: In January 1997, the company concluded a transaction to exchange
WLWT-TV (NBC-Cincinnati) and KOCO-TV (ABC-Oklahoma City) for
WZZM-TV (ABC-Grand Rapids/Kalamazoo/Battle Creek) and
WGRZ-TV(NBC-Buffalo). This exchange was accounted for as a
non-monetary transaction under which no gain or loss was recognized.

     In May 1997, the company acquired KNAZ-TV (NBC-Flagstaff, Ariz.) and
KMOH-TV (WB-Kingman, Ariz.). Also in May 1997, the company
acquired Printed Media Companies. In July, Mary Morgan, Inc., was
purchased and in August 1997, the company acquired Army Times
Publishing Company.

     In October 1997, the company acquired New Jersey Press, Inc., which
publishes two dailies, Asbury Park Press and the Home News Tribune of
East Brunswick.

     The aggregate purchase price for businesses acquired in 1997 was
approximately $445 million in cash and liabilities assumed. The acquisitions
were accounted for under the purchase method of accounting. The
acquisitions did not materially affect reported results of operations for the
year.

     In January 1997, the company contributed the Niagara Gazette newspaper
to the Gannett Foundation. In April 1997, the company sold its newspaper
in Moultrie, Ga., and in November 1997, the company sold its newspapers
in Tarentum and North Hills, Pa. These dispositions did not materially affect
results of operations.

     1996: In December 1996, the company concluded a transaction to acquire
WTSP-TV, the CBS affiliate in Tampa, Fla., in exchange for radio stations
KIIS/KIIS-FM in Los Angeles, KSDO/KKBH-FM in San Diego and
WDAE/WUSA-FM in Tampa. This transaction was completed under the
terms of an asset exchange agreement.

     For financial reporting purposes, the company recorded the exchange as
two simultaneous but separate events; that is, a sale of radio stations for
which a non-cash gain was recognized, and the acquisition of the television
station to be accounted for under the purchase method. The gain reported
on the exchange was measured by the difference between the estimated
current fair value of the assets exchanged over the company's carrying
value or basis in the properties it exchanged. The company estimated the
fair value of the assets exchanged to be $170 million, while its carrying
value or basis in the radio stations was approximately $12 million. In 1996,
therefore, for financial reporting purposes, the company reported a pre-tax,
non-cash, non-operating gain of $158 million on the exchange. The
television station acquired in the exchange was recorded at estimated fair
value or $170 million. On an after-tax basis, this accounting treatment
results in a non-cash increase in earnings from continuing operations of $93
million or $.33 per share (basic).

     A pro forma presentation of the company's income from continuing
operations, excluding the above non-cash, non-operating gain in 1996, is as
follows:

In millions, except per share amounts (pro forma and unaudited)

                   1997    Change      1996      Change       1995     Change
                  ------  --------     -----     -------      -----    -------
Income from
  continuing
  operations     $ 713      34%       $  530       15%        $  459       1%

Earnings per
  share from
  continuing
  operations
  -Basic        $ 2.52      34%       $ 1.88       15%        $ 1.64       4%
  -Diluted      $ 2.50      34%       $ 1.87       15%        $ 1.63       4%


     In August 1996, the company completed the sale of its outdoor advertising
business for $713 million in cash. The company recorded an after-tax gain
of $295 million or $1.05 per share (basic) on this sale. The gain and outdoor
operating results for the period leading up to the sale are reported as
discontinued operations in the company's financial statements.

     In December 1996, the company sold its television entertainment
programming business, Multimedia Entertainment, which had been acquired
in December 1995 as part of the acquisition of Multimedia. The selling price
for this transaction approximated the value assigned to it by the company
upon acquisition. Therefore, no gain was recognized on the sale. The
operating results for Multimedia Entertainment for the period leading up to
the sale are reported as discontinued operations in the company's financial
statements.

     Other properties sold in 1996 were radio stations WMAZ/WAYS-FM in
Macon, Ga. (acquired in the Multimedia purchase), Louis Harris and
Associates, Inc. and Gannett Community Directories. These dispositions did
not have a material effect on the company's operating results or financial
position.

     The following table summarizes, on an unaudited, pro forma basis, the
estimated combined results of operations of the company and its subsidiaries
as though the acquisitions, exchanges and dispositions noted above (except
for certain minor dispositions in 1997 and 1996) were made at the beginning
of the year previous to the year in which the transactions were
consummated. On this basis, these transactions would have resulted in a pro
forma decrease in net income per share (basic/diluted) from continuing
operations of $.03 for 1997. However, this pro forma combined statement
does not necessarily reflect the results of operations as they would have
been if the combined companies had constituted a single entity during those
years.

In millions, except per share amounts (pro forma and unaudited)

Fiscal Year                         1997     1996
                                   ------   ------
Operating revenues*                $4,905   $4,666
Income before taxes*               $1,198   $  944
Income*                            $  705   $  537
Income per share*-Basic            $ 2.49   $ 1.91
Income per share*-Diluted          $ 2.47   $ 1.90

*from continuing operations

                                   -40-

     1995: In December 1995, the company acquired Multimedia, which was
accounted for under the purchase method of accounting. Consideration paid
totaled $1.8 billion, plus the assumption of liabilities of approximately $.5
billion.

Note 3
Statement of cash flows
     For purposes of this statement, the company considers its marketable
securities, which are readily convertible into cash (with original maturity
dates of less than 90 days) and consist of short-term investments in
government securities, commercial paper and money market funds, as cash
equivalents.
     Cash paid in 1997, 1996 and 1995 for income taxes and for interest
(net of amounts capitalized) was as follows:

In thousands of dollars

                              1997        1996      1995
                             --------  --------  --------
Income taxes                 $506,209  $555,642  $316,698
Interest                     $102,228  $142,395  $ 52,094

     Lower income tax paid in 1997 is mainly because of the tax on the gain on
the sale of the outdoor business in 1996, partially offset by incremental
earnings in 1997 from continuing operations.

     In 1996, the company reported a $93 million after-tax non-cash gain on the
exchange of broadcast stations referred to in Note 2.

     Liabilities assumed in connection with 1997 acquisitions totaled
approximately $56 million. In 1995, the company assumed liabilities of
approximately $.5 billion in connection with the Multimedia acquisition.

     In 1996 and 1995, the company issued 272,874 shares and 594,402 shares,
respectively, in settlement of previously granted stock incentive rights. The
compensation liability for these rights of $9.9 million for 1996 and $17
million in 1995 was transferred to shareholders' equity at the time the
shares were issued. In early January 1998, 149,148 shares were issued in
settlement of stock incentive rights granted for the four-year period
1994-1997.

Note 4
Long-term debt
     The long-term debt of the company is summarized below.

In thousands of dollars

                                       Dec. 28, 1997    Dec. 29, 1996
                                       -------------    -------------
Unsecured promissory notes              $ 1,198,695      $ 1,339,078
Notes due 3/1/98, interest at 5.25%         274,920          274,401
Notes due 5/1/00, interest at 5.85%         249,787          249,695
Unsecured obligations                        16,725           16,725
Other indebtedness                           18,782           23,696
                                       -------------    -------------
                                          1,758,909        1,903,595
Less amount included in
 current liabilities                        (18,375)         (23,302)
                                       -------------    -------------
Total long-term debt                    $ 1,740,534      $ 1,880,293
                                       =============    =============


     The unsecured promissory notes at Dec. 28, 1997 were due from Dec. 31,
1997 to Jan. 27, 1998 with rates varying from 5.54% to 5.8%.

     The unsecured promissory notes at Dec. 29, 1996 were due from Dec. 30,
1996 to Jan. 23, 1997 with rates varying from 5.35% to 5.65%.

     The maximum amount of such promissory notes outstanding at the end of
any period during 1997 was $1.3 billion and during 1996 was $2.2 billion.
The daily average outstanding balance was $1.154 billion during 1997 and
$1.873 billion during 1996. The weighted average interest rate was 5.5% for
1997 and 5.4% for 1996.

     The unsecured obligations are due in 2008 to 2009 and bear interest at the
PSA Municipal Index plus .25%. At Dec. 28, 1997 and Dec. 29, 1996 the
weighted average interest rates were 4.4%.

     At Dec. 28, 1997, the company had $3.0 billion of credit available under a
revolving credit agreement. The agreement provides for a revolving credit
period which permits borrowing from time to time up to the maximum
commitment. The revolving credit period extends to Nov. 12, 2000.

                                   -41-

     The commitment fee rate may range from .07% to .175%, depending on
Standard & Poor's or Moody's credit rating of the company's senior
unsecured long-term debt. The rate in effect at Dec. 28, 1997 was .09%. At
the option of the company, the interest rate on borrowings under the
agreement may be at the prime rate, at rates ranging from .13% to .35%
above the London Interbank Offered Rate or at rates ranging from .255% to
 .50% above a certificate of deposit-based rate. The prime rate was 8.5% at
the end of 1997 and 8.25% at the end of 1996. The percentages that will
apply will be dependent on Standard & Poor's or Moody's credit rating of
the company's senior unsecured long-term debt.

     The revolving credit agreement contains restrictive provisions that relate
primarily to the maintenance of net worth of $1.2 billion. At Dec. 28, 1997
and Dec. 29, 1996, net worth was $3.5 billion and $2.9 billion, respectively.

     At Dec. 28, 1997, the unsecured promissory notes and the notes due
March 1, 1998 are supported by the $3.0 billion revolving credit agreement and,
therefore, are classified as long-term debt.

    Approximate annual maturities of long-term debt, assuming that the
company had used the $3.0 billion revolving credit agreement as of the
balance sheet date to refinance existing unsecured promissory notes and the
notes due March 1, 1998, on a long-term basis, are as follows:

In thousands of dollars

1998               $    18,375
1999                        23
2000                 1,723,404
2001                         0
2002                         0
Later years             17,107
                   -----------
Total              $ 1,758,909
                   ===========

     For financial instruments other than long-term debt, including cash and
cash equivalents, trade and other receivables, current maturities of long-term
debt and other long-term liabilities, the amounts reported on the balance
sheet approximate fair value.

     The company estimates the fair value of its long-term debt, based on
borrowing rates available at Dec. 28, 1997, to be $1.740 billion, compared
with the carrying amount of $1.741 billion. At Dec. 29, 1996, the fair value
of long-term debt was estimated at $1.877 billion, compared with a carrying
amount of $1.880 billion.

Note 5
Retirement plans
     The company and its subsidiaries have various retirement plans, including
plans established under collective bargaining agreements and separate plans
for joint operating agencies, under which substantially all full-time
employees are covered. The Gannett Retirement Plan is the company's
principal retirement plan and covers most of the employees of the company
and its subsidiaries. Benefits under the Gannett Retirement Plan are based
on years of service and final average pay. The company's pension plan
assets include marketable securities including common stocks, bonds and
U.S. government obligations and interest-bearing deposits.

     The company's pension cost for 1997, 1996 and 1995 is presented in the
following table:


In thousands of dollars

                                    1997       1996       1995
                                  --------   --------   --------
Service cost-benefits earned
   during the period              $ 47,105   $ 49,552   $ 32,003
Interest cost on projected
   benefit obligation               85,033     80,300     67,882
Actual return on plan assets      (175,405)  (148,767)  (204,239)
Net amortization and deferral
   of actuarial gains               54,147     40,406    117,967
                                  --------   --------   --------
Pension expense for company-
   sponsored retirement plans       10,880     21,491     13,613
Union and other pension cost         4,135      3,244      6,550
                                  --------   --------   --------
Pension cost                      $ 15,015   $ 24,735   $ 20,163
                                  ========   ========   ========

     The majority of the company's pension plans, including the Gannett
Retirement Plan, have plan assets that exceed accumulated benefit
obligations. There are certain plans, however, with accumulated benefit
obligations which exceed plan assets. The tables on the following page
summarize the funded status of the company's pension plans and the related
amounts that are recognized in the Consolidated Balance Sheets:

                                   -42-

In thousands of dollars

                                       Plans for which   Plans for which
                                        assets exceed      accumulated
                                         accumulated        benefits
December 28, 1997                          benefits       exceed assets
                                       ---------------   ---------------
Actuarial present value of benefit
 obligations
Vested benefit obligation              $   926,397       $     42,059
                                       ===============   ===============
Accumulated benefit obligation         $   984,734       $     44,200
                                       ===============   ===============
Projected benefit obligation           $(1,171,008)      $    (72,180)
Plan assets at market value              1,269,090                ---
                                       ---------------   ---------------
Projected benefit obligation less
 than (greater than) plan assets            98,082            (72,180)
Unrecognized net loss                       44,151             17,190
Unrecognized prior service cost            (41,806)               155
Unrecognized net asset
 at year-end                                (3,855)               (93)
                                       ---------------   ---------------
Pension asset (liability) reflected
 in consolidated balance sheet         $    96,572       $    (54,928)
                                       ===============   ===============


In thousands of dollars

                                       Plans for which   Plans for which
                                        assets exceed      accumulated
                                         accumulated        benefits
December 29, 1996                          benefits       exceed assets
                                       ---------------   ---------------
Actuarial present value of benefit
 obligations
Vested benefit obligation              $   793,913       $     37,133
                                       ===============   ===============
Accumulated benefit obligation         $   845,962       $     38,937
                                       ===============   ===============
Projected benefit obligation           $(1,076,930)      $    (60,109)
Plan assets at market value              1,142,962                ---
                                       ---------------   ---------------
Projected benefit obligation
 less than (greater than) plan assets       66,032            (60,109)
Unrecognized net loss                       42,980             11,365
Unrecognized prior service cost              6,481             (1,575)
Unrecognized net (asset)
 obligation at year-end                    (15,323)               463
                                       ---------------   ---------------
Pension asset (liability) reflected
 in consolidated balance sheet         $   100,170       $    (49,856)
                                       ===============   ===============

     The projected benefit obligation was determined using an assumed discount
rate of 7.125% and 7.5% at the end of 1997 and 1996, respectively. The
assumed rate of compensation increase was 5% at the end of 1997 and
1996. The assumed long-term rate of return on plan assets used in
determining pension cost was 10%. Pension plan assets include 1,231,400
shares of the company's common stock valued at $76 million at the end of
1997 and 1,401,400 shares valued at $53 million at the end of 1996. The
company made contributions to the Gannett Retirement Plan of $11 million
in 1996.

Note 6
Postretirement benefits other than pensions
     The company provides health care and life insurance benefits to certain
retired employees. Employees become eligible for benefits after meeting
certain age and service requirements.

     The cost of providing retiree health care and life insurance benefits is
actuarially determined and accrued over the service period of the active
employee group.

     The table below sets forth the amounts included in the Consolidated Balance
Sheets at Dec. 28, 1997 and Dec. 29, 1996 for postretirement medical and
life insurance liabilities:

In thousands of dollars

Accumulated postretirement
benefit obligation:                      Dec. 28, 1997   Dec. 29, 1996
                                         -------------   -------------
Retirees                                 $  (175,147)    $  (144,644)
Fully eligible active plan participants      (13,452)        (16,313)
Other active plan participants               (42,966)        (63,379)
                                         -------------   -------------
                                            (231,565)       (224,336)
Unrecognized net gain                         (7,500)        (23,710)
Unrecognized prior service credit            (73,017)        (53,683)
                                         -------------   -------------
Accrued postretirement benefit cost      $  (312,082)    $  (301,729)
                                         =============   =============


     Postretirement benefit cost for health care and life insurance for
1997, 1996 and 1995 included the following components:

In thousands of dollars
                                         1997       1996      1995
                                       --------  --------  --------
Service cost - benefits earned
 during the period                     $  3,416  $  3,212  $  2,567
Interest cost on accumulated
 postretirement benefit obligation       15,342    14,586    15,722
Net amortization and deferral            (5,474)   (5,253)   (6,118)
                                       --------  --------  --------
Net periodic postretirement
benefit cost                           $ 13,284  $ 12,545  $ 12,171
                                       ========  ========  ========

     At Dec. 28, 1997, the accumulated postretirement benefit obligation was
determined using a discount rate of 7.125% and a health care cost trend rate
of 9% for pre-age 65 benefits, decreasing to 5% in the year 2006 and
thereafter. For post-age 65 benefits, the health care cost trend rate used was
7%, declining to 5% in the year 2002 and thereafter.

     At Dec. 29, 1996, the accumulated postretirement benefit obligation was
determined using a discount rate of 7.5% and a health care cost trend rate of
9% for pre-age 65 benefits, decreasing to 5% in the year 2005 and
thereafter. For post-age 65 benefits, the health care cost trend rate used was
7%, declining to 5% in the year 2001 and thereafter.

     The company's policy is to fund the above-mentioned benefits as claims and
premiums are paid.

     The effect of a 1% increase in the health care cost trend rate used would
result in increases of approximately $14 million in the 1997 accumulated
postretirement benefit obligation and $1 million in the aggregate service and
interest components of the 1997 expense.

                                   -43-

     The company's retiree medical insurance plan provides limits on the
company's share of the cost of such benefits it will pay to future retirees.
The company's share of these benefit costs also depends on employee
retirement age and length of service.

Note 7
Income taxes
     The company's reported income before taxes is virtually all from domestic
sources.

     The provision for income taxes on income from continuing operations
consists of the following:


In thousands of dollars

1997                              Current   Deferred    Total
                                 --------   --------   --------
Federal                          $443,334   $(12,060)  $431,274
State and other                    67,210     (2,184)    65,026
                                 --------   --------   --------
Total                            $510,544   $(14,244)  $496,300
                                 ========   ========   ========

In thousands of dollars

1996                              Current   Deferred    Total
                                 --------   --------   --------
Federal                          $333,200   $ 63,255   $396,455
State and other                    61,246      4,999     66,245
                                 --------   --------   --------
Total                            $394,446   $ 68,254   $462,700
                                 ========   ========   ========

In thousands of dollars

1995                              Current   Deferred    Total
                                 --------   --------   --------
Federal                          $243,692   $ 19,809   $263,501
State and other                    46,772      3,827     50,599
                                 --------   --------   --------
Total                            $290,464   $ 23,636   $314,100
                                 ========   ========   ========


     In addition to the income tax provision presented above for continuing
operations, the company has also recorded federal and state income taxes
payable on discontinued operations of $212.9 million in 1996 (including
$195 million on the gain on the sale of the outdoor business) and $12.1
million in 1995.

     The provision for income taxes on continuing operations exceeds the U.S.
federal statutory tax rate as a result of the following differences:

Fiscal year:                          1997    1996    1995
                                     ------  ------  ------
U.S. statutory tax rate               35.0%   35.0%   35.0%
Increase in
 taxes resulting from:
State/other income taxes net
 of federal income tax benefit         3.3     4.0     3.9
Goodwill amortization not
 deductible for tax purposes           2.5     2.7     1.7
Other, net                             0.3     0.9      --
                                     ------  ------  ------
Effective tax rate                    41.1%   42.6%   40.6%
                                     ======  ======  ======


     Deferred income taxes reflect temporary differences in the recognition of
revenue and expense for tax reporting and financial statement purposes.

     Deferred tax liabilities and assets were composed of the following at the
end of 1997 and 1996:

In thousands of dollars

                                    Dec. 28, 1997    Dec. 29, 1996
                                    -------------    -------------
Liabilities
Accelerated depreciation            $   410,264      $   378,685
Accelerated amortization of
 deductible intangibles                 106,498          102,651
Pension                                  16,883           19,405
Other                                    52,073           75,911
                                    -------------    -------------
Total deferred tax liabilities          585,718          576,652
                                    -------------    -------------
Assets
Accrued compensation costs              (41,615)         (35,665)
Postretirement medical and life        (121,712)        (119,649)
Other                                   (20,137)         (25,168)
                                    -------------    -------------
Total deferred tax assets              (183,464)        (180,482)
                                    -------------    -------------
Net deferred tax liabilities        $   402,254      $   396,170
                                    =============    =============

                                   -44-

Note 8
Capital stock, stock options, incentive plans
     On Aug. 19, 1997, the company's Board of Directors approved a
two-for-one stock split effective on Oct. 6, 1997, for shareholders of record
on Sept. 12, 1997. In this report, all share and per-common-share amounts
have been adjusted to reflect the stock split.

     The company's earnings per share from continuing operations (basic and
diluted) for 1997, 1996 and 1995 are presented below:

                                          1997          1996          1995
                                          ----          ----          ----

Income from continuing operations
   (in thousands)                       $712,679      $623,967      $459,411
Weighted average number of common
   shares outstanding (basic)        283,360,000   281,782,000   280,312,000
Effect of dilutive securities
   Stock options                       1,768,000     1,024,000       719,000
   Stock incentive rights                482,000       620,000     1,292,000
Weighted average number of common
   shares outstanding (diluted)      285,610,000   283,426,000   282,323,000
Earnings per share from
   continuing operations (basic)           $2.52         $2.21         $1.64
Earnings per share from
   continuing operations (diluted)         $2.50         $2.20         $1.63


     The 1997 diluted earnings per share amounts exclude the effects of
1,750,100 stock options awarded in December 1997 with a $59.50 exercise
price as their inclusion would be antidilutive.

     The company's 1978 Executive Long-term Incentive Plan (the Plan)
provides for the granting of stock options, stock incentive rights and option
surrender rights to executive officers and other key employees. During
1996, the Plan was amended to incorporate the following changes: (i)
extend from the last day of the company's 1997 fiscal year to the last day of
the company's 2007 fiscal year the time during which awards may be made;
(ii) increase the maximum aggregate number of shares of Gannett common
stock that may be issued by 24,000,000; (iii) restrict the granting of options
to any participant in any fiscal year to no more than 350,000 shares of
common stock; (iv) extend the exercise period for any stock options to be
issued under the Plan from eight to 10 years after the date of the grant
thereof; and (v) provide that shares of common stock subject to a stock
option or other award that is canceled or forfeited be again made available
for issuance under the Plan.

     Stock options are granted to purchase common stock of the company at not
less than 100% of the fair market value on the day the option is granted.
The exercise period is eight years for options granted prior to Dec. 10, 1996
and 10 years for options granted on that date and subsequent. The options
become exercisable at 25% per year after a one-year waiting period.

     Stock incentive rights entitle the employee to receive one share of common
stock at the end of an incentive period, conditioned upon the employee's
continued employment throughout the incentive period. The incentive
period is normally four years. During the incentive period, the employee
receives cash payments equal to the cash dividend the company would have
paid had the employee owned the shares of common stock issuable under
the incentive rights.

     Under the terms of the Plan, all outstanding awards will be vested if
there is a change in control of the company. Stock options become 100%
exercisable immediately upon a change in control. Option surrender rights
have been awarded, which are related one-for-one to all outstanding stock
options. These rights are effective only in the event of a change in control
and entitle the employee to receive cash for option surrender rights equal to
100% of the difference between the exercise price of the related stock
option and the change-in-control price (which is the highest price paid for a
share of stock as part of the change in control). The Plan also provides for
the payment in cash of the value of stock incentive rights based on the
change-in-control price.

     A summary of the status of the company's stock option and stock incentive
rights plans as of Dec. 28, 1997, Dec. 29, 1996 and Dec. 31, 1995 and
changes during the years ended on those dates is presented below:


                                                     Weighted average
1997 Stock Options                      Shares        exercise price
                                      ----------     ----------------
Outstanding at beginning of year       8,866,658           $29.64
Granted                                1,789,460            59.20
Exercised                             (1,237,089)           24.68
Canceled                                (184,608)           31.28
Outstanding at end of year             9,234,421            36.00
Options exercisable at year end        4,557,488            27.90

Weighted average fair value of
 options granted during the year          $14.71


                                                     Weighted average
1996 Stock Options                      Shares        exercise price
                                      ----------     ----------------
Outstanding at beginning of year       7,932,084           $25.92
Granted                                2,482,960            37.26
Exercised                             (1,298,838)           21.72
Canceled                                (249,548)           28.18
Outstanding at end of year             8,866,658            29.64
Options exercisable at year end        4,019,854            25.23

Weighted average fair value of
 options granted during the year          $ 8.93


                                                     Weighted average
1995 Stock Options                      Shares        exercise price
                                      ----------     ----------------
Outstanding at beginning of year       7,043,748           $23.15
Granted                                2,065,080            31.93
Exercised                             (1,039,490)           19.39
Canceled                                (137,254)           23.78
Outstanding at end of year             7,932,084            25.92
Options exercisable at year end        3,658,458            23.02

Weighted average fair value of
 options granted during the year          $ 6.19

                                   -45-

The following table summarizes information about stock options
outstanding at December 28, 1997:

                             Weighted
                             average    Weighted               Weighted
Range of      Number        remaining   average     Number     average
exercise    outstanding    contractual  exercise  exercisable  exercise
 prices     at 12/28/97     life (yrs)   price    at 12/28/97   price
- --------    -----------    -----------  --------  -----------  --------
$18-20        215,606          1.0       $18.07     215,606     $18.07
 21-28      3,142,364          3.8        25.23   2,866,276      25.38
 32-35      1,776,071          6.0        32.08     888,036      32.08
 36-38      2,310,920          9.0        37.38     577,730      37.38
 41-49         39,360          9.0        45.68       9,840      45.68
 50-60      1,750,100         10.0        59.50
            -----------    -----------  --------  -----------  --------
            9,234,421          6.6        36.00   4,557,488      27.90
            ===========    ===========  ========  ===========  ========



Stock Incentive Rights
Awards made under the 1978 Plan for stock incentive rights were as follows:

                                   1997      1996      1995
                                 --------  --------  --------
Awards granted                    173,325   258,340   305,300


     Awards for 1995 are for the four-year period 1996-1999. Awards for 1996
are for the four-year period 1997-2000. Awards for 1997 are for the
four-year period 1998-2001.

     In January 1998, 149,148 shares of common stock were issued in settlement
of previously granted stock incentive rights for the incentive period ended
December 1997.

     Shares available: Shares available for future grants under the 1978 Plan
totaled 22,328,063 at Dec. 28, 1997.

     Pro forma results: Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" (SFAS 123), establishes a fair
value-based method of accounting for employee stock-based compensation
plans, and encourages companies to adopt that method. However, it also
allows companies to continue to apply the intrinsic value-based method
currently prescribed under Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25). The company has
chosen to continue to report stock-based compensation in accordance with
APB 25, and provides the following pro forma disclosure of the effects of
applying the fair value method to all applicable awards granted. Under APB
Opinion 25 and related Interpretations, no compensation cost has been
recognized for its stock options. The compensation cost that has been
charged against income for its stock incentive rights was $8 million for 1997
and 1996 and $10 million for 1995. Those charges were based on the grant
price of the stock incentive rights recognized over the four-year earnout
periods. Had compensation cost for the company's stock options been
determined based on the fair value at the grant date for those awards as
permitted (but not required) under the alternative method of SFAS 123, the
company's net income and earnings per share would have been reduced to
the pro forma amounts indicated below:

                                     1997          1996
                                  -----------   ----------
Net income (in thousands)
   As reported                     $712,679     $943,087
   Pro forma                       $707,717     $941,226
Earnings per share-Basic
   As reported                        $2.52        $3.35
   Pro forma                          $2.50        $3.34

     The fair value of each option is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 1997, 1996 and 1995, respectively: dividend
yield of 2.15%, 2.34% and 2.5%, expected volatility of 16.28%, 15.25%
and 15.86%, risk-free interest rates of 5.87%, 5.95% and 5.39% and
expected lives of 7 years, 7 years and 5.6 years.

     SFAS 123 is applicable to stock compensation awards granted in fiscal
years that begin after Dec. 15, 1994. Options are granted by the company
primarily in December and begin vesting over a four-year period. Options
granted in December 1995 and thereafter are subject to the pronouncement.
To calculate the pro forma amounts shown above, compensation cost was
recognized over the four-year period of service during which the options
will be earned. As a result, options granted in December of each year
(beginning with December 1995) impact pro forma amounts for following
years but not the year in which they were granted. Because the calculations
do not take into consideration pro forma compensation expense related to
grants made prior to 1995, the pro forma effect on net income shown for
1996 and 1997 is not representative of the pro forma effect on net income in
future years.

401(k) Savings Plan
     On July 1, 1990, the company established a 401(k) Savings Plan. Most
employees of the company (other than those covered by a collective
bargaining agreement) who are scheduled to work at least 1,000 hours
during each year of employment are eligible to participate in the Plan.
Employees may elect to save up to 15% of compensation on a pre-tax basis
subject to certain limits. Through 1997, the company matched, with
company common stock, 25% of the first 4% of employee contributions.
Beginning Jan. 1, 1998, the company match increased to 50% of the first
6% of employee contributions. To fund the company's matching
contribution, an Employee Stock Ownership Plan (ESOP) was formed in 1990

                                   -46-

which acquired 2,500,000 shares of Gannett stock from the company
for $50 million. The stock purchase was financed with a loan from the
company and the shares are pledged as collateral for the loan. The company
makes monthly contributions to the ESOP equal to the ESOP's debt service
requirements less dividends. All dividends received by the ESOP are used to
pay debt service. As the debt is paid, shares are released as collateral and
are available for allocation to participants.

     The company follows the shares allocated method in accounting for its
ESOP. The cost of shares allocated to match employee contributions or to
replace dividends that are used for debt service are accounted for as
compensation expense. The cost of unallocated shares is reported as
deferred compensation in the financial statements. The company may, at its
option, repurchase shares from employees who leave the Plan. The shares
are purchased at fair market value and the difference between the original
cost of the shares and fair market value is expensed at the time of purchase.
All of the shares initially purchased by the ESOP are considered outstanding
for earnings per share calculations. Dividends on allocated and unallocated
shares are recorded as reductions of retained earnings.

     Compensation expense for the 401(k) match and repurchased shares was
$2.4 million in 1997 and $2.8 million in 1996 and 1995. The ESOP shares
as of the end of 1997 and 1996 were as follows:


                                   1997        1996
                                ----------  ----------
Allocated shares                1,097,214   1,020,474
Shares released for allocation     14,470      19,050
Unreleased shares               1,388,316   1,460,476
Shares distributed to
   terminated participants        (23,993)    (17,208)
                                ----------  ----------
ESOP shares                     2,476,007   2,482,792
                                ==========  ==========

     In May 1990, the Board of Directors declared a dividend distribution of
one Preferred Share Purchase Right ("Right") for each common share held,
payable to shareholders of record on June 8, 1990. The Rights become
exercisable when a person or group of persons acquires or announces an
intention to acquire ownership of 15% or more of the company's common
shares. Holders of the Rights may acquire an interest in a new series of
junior participating preferred stock, or they may acquire an additional
interest in the company's common shares at 50% of the market value of the
shares at the time the Rights are exercised. The Rights are redeemable by
the company at any time prior to the time they become exercisable, at a
price of $.01 per Right.

Note 9
Commitments, contingent liabilities and other matters
     Litigation: The company and a number of its subsidiaries are defendants in
judicial and administrative proceedings involving matters incidental to their
business. The company's management does not believe that any material
liability will be imposed as a result of these matters.
     Leases: Approximate future minimum annual rentals payable under
non-cancelable operating leases are as follows:

In thousands of dollars

1998                  $ 34,827
1999                    32,791
2000                    30,673
2001                    28,913
2002                    14,834
Later years             55,442
                      --------
Total                 $197,480
                      ========

     Total minimum annual rentals have not been reduced for future minimum
sublease rentals aggregating approximately $4 million. Total rental costs
reflected in continuing operations were $43 million for 1997, $41 million for
1996 and $40 million for 1995.

     Program broadcast contracts: The company has commitments under
program broadcast contracts totaling $44.8 million for programs to be
available for telecasting in the future.

     In December 1990, the company adopted a Transitional Compensation Plan
("Plan") which provides termination benefits to key executives whose
employment is terminated under certain circumstances within two years
following a change in control of the company. Benefits under the Plan
include a severance payment of up to three years' compensation and
continued life and medical insurance coverage.

     Other matters: In June 1997, SFAS 130, "Reporting Comprehensive
Income," and SFAS 131, "Disclosures about Segments of an Enterprise and
Related Information," were issued. These standards are effective for years
beginning after Dec. 15, 1997. These standards are not expected to have
any impact on the company's reported financial position or results of
operations.

                                   -47-

Note 10
Business operations and segment information
     The company's primary business activities for 1997 include newspaper
publishing, which is the largest segment of its operations; television and
radio broadcasting, the second-largest component; and cable television and
alarm security businesses. Newsprint, which is the principal product used in
the newspaper publishing business, has been and may continue to be subject
to significant price changes from time to time. Virtually all of the company's
operations are in the U.S.

     For financial reporting purposes, the company has established three
separate business segments: newspapers; broadcasting (television and radio);
and cable and security.

     The newspaper segment at the end of 1997 consisted of 89 daily
newspapers in 38 states and two U.S. territories, including USA TODAY, a
national, general-interest daily newspaper; and USA WEEKEND, a
magazine supplement for newspapers. The newspaper segment also includes
non-daily publications, a nationwide network of offset presses for
commercial printing, and several smaller businesses.

     The broadcasting segment's activities for 1997 include the operation of
television and radio stations. During 1997, the company owned 18
television stations and five radio stations. All of the radio stations were
sold and two additional television stations were acquired in early fiscal 1998.

     The cable and security segment, which was acquired in connection with the
Multimedia purchase, is headquartered in Wichita, Kan., and served 478,000
cable television subscribers in five states and served alarm security
customers in 10 states. The alarm security business was sold in early fiscal
1998.

     Separate financial data for each of the company's three business segments
is presented on page 54. Operating income represents total revenue less
operating expenses, depreciation and amortization of intangibles. In
determining operating income by industry segment, general corporate
expenses, interest expense and other income and expense items of a
non-operating nature are not considered. Corporate assets include cash and
marketable securities, certain investments, long-term receivables and plant
and equipment primarily used for corporate purposes. Interest capitalized
has been included as a corporate capital expenditure for purposes of
segment reporting.

                                   -48-

<PAGE>

R
eport of independent accountants

To the Board of Directors and
Shareholders of Gannett Co., Inc.

     In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, of cash flows and of changes in
shareholders' equity present fairly, in all material respects, the financial
position of Gannett Co., Inc. and its subsidiaries at Dec. 28, 1997 and Dec.
29, 1996, and the results of their operations and their cash flows for each of
the three years in the period ended Dec. 28, 1997, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the company's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted
our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.


Price Waterhouse LLP
Washington, D.C.
February 2, 1998


                                   -49-


<PAGE>


<TABLE>
11-Year Summary
In thousands of dollars,
except per share amounts
<CAPTION>
                                             1997           1996           1995           1994           1993           1992
                                         ----------     ----------     ----------     ----------     ----------     ----------
<S>                                      <C>            <C>            <C>            <C>            <C>            <C>

Net operating revenues
Newspaper advertising                    $2,634,334     $2,417,550     $2,219,250     $2,152,671     $2,005,037     $1,882,114
Newspaper circulation                       948,141        917,677        869,173        849,461        838,706        807,093
Broadcasting                                703,558        686,936        466,187        406,608        397,204        370,613
Cable and security                          255,263        232,500         17,831              0              0              0
All other                                   188,195        166,444        171,426        174,655        169,903        167,824
                                         ----------     ----------     ----------     ----------     ----------     ----------
Total (Notes a and b, see page 52)        4,729,491      4,421,107      3,743,867      3,583,395      3,410,850      3,227,644
                                         ----------     ----------     ----------     ----------     ----------     ----------
Operating expenses
Costs and expenses                        3,112,150      3,067,332      2,728,868      2,597,556      2,520,278      2,440,275
Depreciation                                201,100        193,011        143,739        146,054        147,248        139,080
Amortization of intangible assets            99,973         94,359         49,328         44,110         43,771         39,197
                                         ----------     ----------     ----------     ----------     ----------     ----------
Total                                     3,413,223      3,354,702      2,921,935      2,787,720      2,711,297      2,618,552
                                         ----------     ----------     ----------     ----------     ----------     ----------
Operating income                          1,316,268      1,066,405        821,932        795,675        699,553        609,092
Non-operating income (expense)
Interest expense                            (98,242)      (135,563)       (52,175)       (45,624)       (51,250)       (50,817)
Other                                        (9,047)       155,825 (7)      3,754         14,945          5,350          7,814
                                         ----------     ----------     ----------     ----------     ----------     ----------
Income before income taxes                1,208,979      1,086,667        773,511        764,996        653,653        566,089
Provision for income taxes                  496,300        462,700        314,100        309,600        264,400        224,900
                                         ----------     ----------     ----------     ----------     ----------     ----------
Income from continuing operations           712,679        623,967 (7)    459,411        455,396        389,253        341,189
                                         ----------     ----------     ----------     ----------     ----------     ----------
Discontinued operations:
Income from the operation of
   discontinued businesses (net of
   income taxes)                                  0         24,540         17,851         10,003          8,499          4,491
Gain on disposal of Outdoor business
   (net of income taxes)                          0        294,580              0              0              0              0
                                         ----------     ----------     ----------     ----------     ----------     ----------
Total                                             0        319,120         17,851         10,003          8,499          4,491
                                         ----------     ----------     ----------     ----------     ----------     ----------
Income before cumulative effect of
   accounting principle changes             712,679        943,087        477,262        465,399        397,752        345,680
Cumulative effect on prior years of
   accounting principle changes for:
   Income taxes                                   0              0              0              0              0         34,000
   Retiree health and life insurance
     benefits                                     0              0              0              0              0       (180,000)
                                         ----------     ----------     ----------     ----------     ----------     ----------
Net income                                 $712,679       $943,087       $477,262       $465,399       $397,752       $199,680
                                         ==========     ==========     ==========     ==========     ==========     ==========
Operating cash flow (6)                  $1,617,341     $1,353,775     $1,014,999       $985,839       $890,572       $787,369
                                         ----------     ----------     ----------     ----------     ----------     ----------
Per share amounts (1)
Income from continuing operations
   before cumulative effect of accounting
   principle changes: basic/diluted      $2.52/2.50     $2.21/2.20(7)  $1.64/1.63     $1.58/1.57     $1.33/1.32     $1.18/1.18
Net income: basic/diluted                $2.52/2.50     $3.35/3.33     $1.70/1.69     $1.61/1.60     $1.36/1.35     $0.69/0.69
Dividends declared (2)                          .74            .71            .69            .67            .65            .63
Shareholders' equity (3)                      12.26          10.37           7.63           6.52           6.49           5.47
Weighted average number of common
   shares outstanding in thousands (2)      283,360        281,782        280,312        288,552        292,948        288,296
Financial position
Current assets                             $884,634       $766,605       $854,084       $650,837       $757,957       $631,447
Current liabilities                         767,501        718,996        812,772        527,054        455,139        431,551
Working capital                             117,133         47,609         41,312        123,783        302,818        199,896
Long-term debt excluding current
   maturities                             1,740,534      1,880,293      2,767,880        767,270        850,686      1,080,756
Shareholders' equity                      3,479,736      2,930,818      2,145,648      1,822,238      1,907,920      1,580,101
Total assets                              6,890,351      6,349,597      6,503,800      3,707,052      3,823,798      3,609,009
Selected financial percentages and ratios
Percentage increase (decrease)
Earnings from continuing operations,
   after tax (4)                              34.3%(5)       15.5%(5)        0.9%          17.0%          14.1%          16.6%
Earnings from continuing operations,
   after tax, per share
   basic/diluted (4)                    34.0%/33.7%(5) 14.8%/14.7%(5)   3.8%/3.8%    18.8%/18.9%    12.3%/11.9%    22.0%/22.9%
Dividends declared per share                   4.2%           2.9%           3.0%           3.1%           3.2%           1.6%
Book value per share (3)                      18.2%          35.9%          17.0%           0.5%          18.6%           2.1%
Credit ratios
Long-term debt to shareholders' equity        50.0%          64.2%         129.0%          42.1%          44.6%          68.4%
Times interest expense earned                 13.3x           9.0x          15.8x          17.8x          13.8x          12.1x

                                    -50-

<PAGE>


                                             1991           1990           1989           1988           1987
                                         ----------     ----------     ----------     ----------     ----------

Net operating revenues
Newspaper advertising                    $1,852,591     $1,917,477     $2,018,076     $1,908,566     $1,787,077
Newspaper circulation                       777,221        730,426        718,087        685,663        645,356
Broadcasting                                357,383        396,693        408,363        390,507        356,815
Cable and security                                0              0              0              0              0
All other                                   134,720        125,659        115,773        103,217         88,428
                                         ----------     ----------     ----------     ----------     ----------
Total (Notes a and b, see page 52)        3,121,915      3,170,255      3,260,299      3,087,953      2,877,676
                                         ----------     ----------     ----------     ----------     ----------
Operating expenses
Costs and expenses                        2,399,930      2,353,281      2,368,160      2,277,254      2,107,035
Depreciation                                139,268        135,294        134,119        122,439        110,727
Amortization of intangible assets            39,621         39,649         39,100         39,445         35,974
                                         ----------     ----------     ----------     ----------     ----------
Total                                     2,578,819      2,528,224      2,541,379      2,439,138      2,253,736
                                         ----------     ----------     ----------     ----------     ----------
Operating income                            543,096        642,031        718,920        648,815        623,940
Non-operating income (expense)
Interest expense                            (71,057)       (71,567)       (90,638)       (88,557)       (85,681)
Other                                        14,859         10,689        (18,364)         8,292         15,013
                                         ----------     ----------     ----------     ----------     ----------
Income before income taxes                  486,898        581,153        609,918        568,550        553,272
Provision for income taxes                  194,400        226,600        235,500        228,000        254,500
                                         ----------     ----------     ----------     ----------     ----------
Income from continuing operations           292,498        354,553        374,418        340,550        298,772
                                         ----------     ----------     ----------     ----------     ----------
Discontinued operations:
Income from the operation of
   discontinued businesses (net of
   income taxes)                              9,151         22,410         23,091         23,910         20,623
Gain on disposal of Outdoor business
   (net of income taxes)                          0              0              0              0              0
                                         ----------     ----------     ----------     ----------     ----------
Total                                         9,151         22,410         23,091         23,910         20,623
                                         ----------     ----------     ----------     ----------     ----------
Income before cumulative effect of
   accounting principle changes             301,649        376,963        397,509        364,460        319,395
Cumulative effect on prior years of
   accounting principle changes for:
   Income taxes                                   0              0              0              0              0
   Retiree health and life insurance
     benefits                                     0              0              0              0              0
                                         ----------     ----------     ----------     ----------     ----------
Net income                                 $301,649       $376,963       $397,509       $364,460       $319,395
                                         ==========     ==========     ==========     ==========     ==========
Operating cash flow (6)                    $721,985       $816,974       $892,139       $810,699       $770,641
                                         ----------     ----------     ----------     ----------     ----------
Per share amounts (1)
Income from continuing operations
   before cumulative effect of accounting
   principle changes: basic/diluted        $.97/.96     $1.11/1.10     $1.16/1.16     $1.05/1.05       $.93/.92
Net income: basic/diluted                 $1.00/.99     $1.18/1.17     $1.23/1.23     $1.13/1.13       $.99/.98
Dividends declared (2)                         0.62            .61            .56            .51            .47
Shareholders' equity (3)                       5.35           6.49           6.20           5.55           4.97
Weighted average number of common
   shares outstanding in thousands (2)      301,566        320,094        322,506        323,244        323,408
Financial position
Current assets                             $636,101       $668,690       $671,030       $665,031       $601,220
Current liabilities                         443,835        500,203        477,822        500,835        474,775
Working capital                             192,266        168,487        193,208        164,196        126,445
Long-term debt excluding current
   maturities                             1,335,394        848,633        922,470      1,134,737      1,094,321
Shareholders' equity                      1,539,487      2,063,077      1,995,791      1,786,441      1,609,394
Total assets                              3,684,080      3,826,145      3,782,848      3,792,820      3,510,259
Selected financial percentages and ratios
Percentage increase (decrease)
Earnings from continuing operations,
   after tax (4)                             (17.5%)         (5.3%)          9.9%          14.0%          18.1%
Earnings from continuing operations,
   after tax, per
   share: basic/diluted (4)          (12.4%)/(12.7%)  (4.6%)/(5.2%)   10.2%/10.5%    14.0%/14.1%    17.8%/17.3%
Dividends declared per share                   2.5%           9.0%           8.8%           8.5%           9.3%
Book value per share (3)                     (17.5%)          4.7%          11.8%          11.6%          11.9%
Credit ratios
Long-term debt to shareholders' equity        86.7%          41.1%          46.2%          63.5%          68.0%
Times interest expense earned                  7.9x           9.1x           7.7x           7.4x           7.5x

(1) Per share amounts have been based upon average number of shares
    outstanding during each year, giving retroactive effect to
    adjustment in (2).
(2) Shares outstanding and dividends declared have been converted to a comparable basis by
    reflecting retroactively 2-for-1 stock split effective Jan. 6, 1987, and the 2-for-1 stock
    split effective Oct. 6, 1997.
(3) Based upon year-end shareholders' equity and shares outstanding.
(4) Before cumulative effect of accounting principle changes.
(5) Before 1996 gain on exchange of broadcast stations of $93 million
    or $.33 per share.
(6) Operating cash flow represents operating income plus depreciation
    and amortization of intangible assets.
(7) Includes pre-tax gain on exchange of broadcast stations of $158 million
    (after-tax gain of $93 million or $.33 per share).
</TABLE>

                                    -51-

Notes to 11-year summary

     (a) The company and its subsidiaries made the acquisitions listed at right
during the period. The results of operations of these acquired businesses are
included in the accompanying financial information from the date of
purchase. Note 2 of the consolidated financial statements on page 40
contains further information concerning certain of these acquisitions.

     (b) During the period, the company sold substantially all of the assets or
capital stock of certain other subsidiaries and divisions of other
subsidiaries. Note 2 of the consolidated financial statements on page 40
contains further information concerning certain of these dispositions.



Acquisitions 1987-1997
1987
 July 15      Gannett Direct Marketing Services, Inc.
1988
 Feb. 1       WFMY-TV, Greensboro, N.C.
              WTLV-TV, Jacksonville, Fla.
 July 1       New York Subways Advertising Co., Inc.
                 and related companies
1989
 Oct. 31      Rockford Magazine
 Nov. 6       Outdoor advertising displays merged into New Jersey Outdoor
1990
 March 28     Great Falls (Mont.) Tribune
 May 17       Ye Olde Fishwrapper
 June 18      The Shopper Advertising, Inc.
 Sept. 7      Desert Community Newspapers
 Dec. 27      North Santiam Newspapers
 Dec. 28      Pensacola Engraving Co.
1991
 Feb. 11      The Add Sheet
 April 3      New Jersey Publishing Co.
 Aug. 30      The Times Journal Co., including The Journal Newspapers,
                 The Journal Printing Co. (now Springfield Offset)
                 and Telematch
 Oct. 3       Gulf Breeze Publishing Co.
1992
 April 24     Graphic Publications, Inc.
1993
 Jan. 30      The Honolulu Advertiser
 April 24     Tulare Advance-Register
1994
 May 2        Nursing Spectrum
 June 9       Altoona Herald-Mitchellville Index and the
                 Eastern ADvantage
 Dec. 1       KTHV-TV, Little Rock
1995
 Dec. 4       Multimedia, Inc.
1996
 Dec. 9       WTSP-TV, Tampa-St. Petersburg, Fla.
1997
 Jan. 31      WZZM-TV, Grand Rapids, Mich.
 Jan. 31      WGRZ-TV, Buffalo, N.Y.
 May 5        Printed Media Companies
 May 27       KNAZ-TV, Flagstaff, Ariz.
 May 27       KMOH-TV, Kingman, Ariz.
 July 18      Mary Morgan, Inc.
 Aug. 1       Army Times Publishing Co., Inc.
 Oct. 24      New Jersey Press, Inc.

                                   -52-


Form 10-K information

Business of the company
     Gannett Co., Inc. is a diversified information company that operates
primarily in the U.S. Approximately 99% of its revenues are from domestic
operations. Its foreign operations, which are limited, are in certain European
and Asian markets. Its corporate headquarters is in Arlington, Va., near
Washington, D.C. It was incorporated in New York in 1923 and was
reincorporated in Delaware in 1972.

     The company reports three principal business segments: newspaper
publishing, broadcasting, and cable television and alarm security.

     The company's newspapers make up the largest newspaper group in the
U.S. in circulation. At the end of 1997, the company operated 89 daily
newspapers, with a total average daily circulation of approximately 6.7
million for 1997, including USA TODAY. The company also publishes
USA WEEKEND, a weekend newspaper magazine, and a number of
non-daily publications. On Dec. 30, 1997, which falls in the company's
1998 fiscal year, the company sold its newspaper in St. Thomas, Virgin
Islands. On Feb. 3, 1998, the company contributed its newspaper in
Saratoga Springs, N.Y., to the Gannett Foundation.

     On Dec. 28, 1997, the broadcasting division included 18 television
stations in markets with more than 14 million households and five radio
stations. On Dec. 29, 1997, the first day of the company's 1998 fiscal year,
the previously announced sale of the five radio stations was completed. Also,
on Jan. 5, 1998, the company completed the acquisition of NBC affiliate
stations in Portland and Bangor, Maine, bringing its complement of TV
stations to 20.

     The cable business (Multimedia Cablevision) serves 478,000 subscribers in
five states. In December 1997, the company announced that Multimedia
Cablevision would acquire cable systems serving approximately 128,000
subscribers in Kansas, in exchange for its cable systems serving
approximately 93,000 subscribers in suburban Chicago, plus cash.

     The alarm security business, Multimedia Security Service, provided alarm
services to customers in 10 states. In March 1998, the company sold its
alarm security business.

     The company also owns the following: Gannett News Service, which
provides news services for its newspaper operations; Gannett Retail
Advertising Group, which represents the company's newspapers, other than
USA TODAY, in the sale of advertising to national and regional retailers
and service providers; and Gannett Offset, which is composed of the
Gannett Offset print group and Gannett Marketing Services group. The
Gannett Offset print group includes seven non-heatset printing plants and
two heatset printing facilities, including the recent acquisition of Printed
Media Companies of Minneapolis, Minn., which offers seven web and three
sheetfed presses. Gannett Offset's dedicated commercial printing plants are
located in Atlanta, Ga.; Chandler, Ariz.; Minneapolis, Minn.; Miramar, Fla.;
Nashville, Tenn.; Norwood, Mass.; Pensacola, Fla.; St. Louis, Mo.; and
Springfield, Va. Gannett Marketing Services group coordinates the sale of
direct-marketing services through Telematch, a database management and
data enhancement company; Gannett Direct Marketing Services, a
direct-marketing company with operations in Louisville, Ky.; and Gannett
TeleMarketing, a telephone sales and marketing company. The company
also owns electronic information services, including the USA TODAY
Information Network; Gannett Media Technologies International, which
develops and markets software and other products for the publishing
industry; Nursing Spectrum, publisher of biweekly periodicals specializing in
advertising for nursing employment; and Army Times Publishing Company,
which publishes military and defense newspapers.

Business segment financial information
     Selected financial information for the company's business segments is
presented on the following page. For a description of the accounting
policies related to this information, see Note 10 to the company's
consolidated financial statements. Operating cash flow amounts represent
operating income plus depreciation and amortization of intangible assets.

                                   -53-


<PAGE>

In thousands of dollars
Business segment financial information

                                   1997           1996          1995
                                ----------    ----------    ----------
Operating revenues:
Newspaper publishing            $3,770,670    $3,501,671    $3,259,849
Broadcasting                       703,558       686,936       466,187
Cable and Security                 255,263       232,500        17,831
                                ----------    ----------    ----------
                                $4,729,491    $4,421,107    $3,743,867
                                ----------    ----------    ----------
Operating income:
Newspaper publishing            $1,001,965    $  786,235    $  701,569
Broadcasting                       328,311       297,332       182,865
Cable and Security                  54,026        47,127         4,801
Corporate                          (68,034)      (64,289)      (67,303)
                                ----------    ----------    ----------
                                $1,316,268    $1,066,405    $  821,932
                                ----------    ----------    ----------
Depreciation and amortization:
Newspaper publishing            $  168,526    $  161,886    $  148,932
Broadcasting                        56,459        51,561        30,107
Cable and Security                  67,368        64,606         4,407
Corporate                            8,720         9,317         9,621
                                ----------    ----------    ----------
                                $  301,073    $  287,370    $  193,067
                                ----------    ----------    ----------
Operating cash flow:
Newspaper publishing            $1,170,491    $  948,121    $  850,501
Broadcasting                       384,770       348,893       212,972
Cable and Security                 121,394       111,733         9,208
Corporate                          (59,314)      (54,972)      (57,682)
                                ----------    ----------    ----------
                                $1,617,341    $1,353,775    $1,014,999
                                ----------    ----------    ----------
Identifiable assets:
Newspaper publishing            $3,593,932    $3,151,385    $3,210,275
Broadcasting                     1,725,019     1,622,469     1,502,342
Cable and Security               1,223,057     1,210,000     1,188,536
Corporate                          348,343       351,526       325,134
                                ----------    ----------    ----------
                                $6,890,351    $6,335,380(1) $6,226,287(1)
                                ----------    ----------    ----------
Capital expenditures:
Newspaper publishing            $  123,343    $  114,114    $  128,256
Broadcasting                        13,157        14,400        19,923
Cable and Security                  81,256        77,991        17,447
Corporate                            3,495        46,874         7,324
                                ----------    ----------    ----------
                                $  221,251    $  253,379(2) $  172,950(2)
                                ----------    ----------    ----------

(1) Excludes assets related to discontinued operations totaling
    $14,217 in 1996, $276,973 in 1995.
(2) Excludes capital expenditures made for discontinued operations
    totaling $6,668 for 1996, $10,586 for 1995.


Newspaper publishing
     On Dec. 28, 1997, the company operated 89 daily newspapers, including
USA TODAY, and a number of non-daily local publications, in 38 states,
Guam and the U.S. Virgin Islands. The Newspaper Division is
headquartered in Arlington, Va., and on Dec. 28, 1997, it had
approximately 34,300 full-time and part-time employees. Newspaper
operating revenues accounted for approximately 80% of the company's net
operating revenues in 1997, 79% in 1996 and 87% in 1995.

     USA TODAY was introduced in 1982 as the country's first national,
general-interest daily newspaper. It is available in all 50 states and is
available to readers on the day of publication in the top 100 metropolitan
markets in the U.S.

     USA TODAY is produced at facilities in Arlington, Va., and is transmitted
via satellite to offset printing plants around the country. It is printed at
Gannett plants in 21 U.S. markets and under contract at offset plants in 12
other U.S. markets. It is sold at newsstands and vending machines generally
at 50 cents a copy. Mail subscriptions are available nationwide and abroad,
and home and office delivery is offered in many markets. Approximately
64% of its net paid circulation results from single-copy sales at newsstands
or vending machines and the remainder is from home and office delivery,
mail and other sales.

     For 1997, USA TODAY's advertising revenues and volume rose 12% and
7%, respectively. Its circulation revenues and volume rose 4% and 3%,
respectively. USA TODAY's operating income rose dramatically in 1997.

     USA TODAY International is printed from satellite transmission under
contract in London, Frankfurt and Hong Kong, and is distributed in Europe,
the Middle East, Africa and Asia. It is available in more than 90 foreign
countries.

     The Gannett News Service (GNS) is headquartered in Arlington, Va., and
has bureaus in nine other states (see page 71 for more information). GNS
provides national and regional news coverage and sports, features, photo
and graphic services to Gannett newspapers. GNS also is distributed by
syndication to several non-Gannett newspapers, including ones in Chicago,
Salt Lake City, Boston and Seattle.

     The newspaper publishing segment also includes USA WEEKEND, which
is distributed as a weekend newspaper supplement in 526 newspapers
throughout the country, with a total circulation of 21.2 million at the end of
1997.

     At the end of 1997, 61 of the company's daily newspapers, including USA
TODAY, were published in the morning and 28 were published in the
evening.

     Individually, Gannett newspapers are the leading news and information
source with strong brand recognition in their markets. Their durability lies in
the quality of their management, their flexibility, their focus on such
customer-directed programs as NEWS 2000, ADvance and ADQ, and their
capacity to invest in new technology. Collectively, they form a powerful
network to distribute news and advertising information across the nation.

                                   -54-

     In May 1997, the company's commercial printing division, Gannett Offset,
acquired Printed Media Companies, a full-service heat-set printer in
Minneapolis, Minn. In August 1997, the company acquired Army Times
Publishing Company, located in Springfield, Va., which publishes six weekly
military newspapers and one monthly defense publication.

     In October 1997, the company acquired New Jersey Press, Inc., which
publishes the daily Asbury Park Press and Home News Tribune of East
Brunswick, and operates In Jersey, an Internet service. The Asbury Park
Press has a daily circulation of approximately 155,000 and 224,000 on
Sunday. The Home News Tribune has a daily circulation of approximately
75,000 and 82,000 on Sunday.

     News departments across Gannett expanded coverage in critical areas of
their markets - with more attention paid especially to suburban and regional
communities surrounding the central city. The newspapers also presented
more coverage to help readers cope in an ever-changing, faster-moving
society.

     The corporate NEWS 2000 program, aimed at meeting the changing needs
of readers, was revised to concentrate even more strongly on core
journalistic values and to better blend newsroom efforts with the overall
strategic goals of the newspaper. Training in the revised NEWS 2000
approaches was conducted in newsrooms across the company.

     In 1997, the company continued to implement strategies to increase its
revenues from medium and small advertisers in each market it serves.
Revenues from these types of advertisers increased 5% during the year on
top of 9% growth in 1996. Numerous programs were introduced by
Gannett newspapers in 1997 to accomplish these results. The initiatives
focused on sales and rate management, among other areas. Sales
management initiatives included allocating proper resources to increase the
number and quality of sales calls, improving sales compensation and
providing consistent sales training. Rate management programs focused on
selling multiple advertising insertions and reviewing rates and rate structures
to assure they match the opportunities in the market. The company regularly
calculates market potential and develops strategic plans to capitalize on that
potential. Significant efforts will continue to be taken in 1998 to make the
company's personnel increasingly competitive in their leadership, strategic
thinking and marketing skills.

     The Newspaper Division's quality initiative, known as ADQ, produced
positive results in 1997, as the quality of ads and bills improved over the
previous year and credit adjustments continued to decline. With ROP ad
count increasing 3% and total ad revenues up 8% in 1997 over 1996,
Gannett newspapers produced higher volume, and greater quality.

     All of the company's daily newspapers receive the Gannett News Service.
In addition, all subscribe to The Associated Press, and some receive various
supplemental news and syndicated features services.

     The senior executive of each newspaper is the publisher, and the
newspapers have advertising, business, information systems, circulation,
news, market development, human resources and production departments.

     Technological advances in recent years have had an impact on the way
newspapers are produced. Computer-based text editing systems capture
drafts of reporters' stories and are then used to edit and produce type for
transfer by a photographic process to printing plates. All of the company's
daily newspapers are produced by this method. "Pagination" enables
editors to create a newspaper page by computer, avoiding all or part of the
manual "paste-up" of the page before it can be converted into a printing
plate. The company uses pagination systems at 74 newspaper plants.

     Implementation of MASS, the Mobile Advertising Sales System, continued
in 1997. Nine new newspapers received the system, bringing the total
number of newspapers using MASS to 54. The Windows version was
introduced and is being used by 10 newspapers. The total number of sales
reps deployed with MASS laptops is approximately 1,140. Virtual Ad
Space, a sales presentation tool, was installed at the 44 Macintosh-based
newspapers. An additional five newspapers will receive MASS in 1998.

     Celebro Advertising Solutions, originally developed by the company in 1994
as AdLink, is a suite of software applications that offers major Realtors the
capability to control the design, scheduling and content of their advertising
in the newspaper and market their properties on the Internet, and with audio
text/fax back. The Celebro Real Estate System has been installed at 26
Gannett newspapers and at an additional 13 non-Gannett newspapers by
Gannett Media Technologies International (GMTI). In late 1997, GMTI
entered into a marketing and distribution agreement with Automatic Data
Processing, Inc. (ADP) under which GMTI and ADP would work together
to sell and install the Celebro Automotive System to newspapers and auto
dealerships in the United States and Canada.

     The Digital Collections integrated text/photo archive system has been
installed at 34 Gannett newspapers, including Rochester, Des Moines,
Louisville, Honolulu, Wilmington and Tucson. The system stores, retrieves
and distributes text, photos and full-page images of the newspaper in a
digital form that can be searched using an easy-to-use interface. GMTI,
licensed by DiGiCol, the U.S. subsidiary of Gannett and Digital Collections
Verlagsges.mbH, sells and installs Digital Collections systems in North and
South America. Non-Gannett customers include The Milwaukee Journal,
America Online, O'Globo (Rio De Janiero, Brazil), Copesa (Santiago,
Chile), The University of Missouri and Lance Newspapers in Rio De Janiero
and Sao Paulo. Installation at Gannett newspapers will continue in 1998.

     Electronic delivery of news and information, including advertising, will
be a critical part of our future services to our local newspaper markets. 1997
was a year of continued experimenting, learning and positioning ourselves for
opportunities in electronic delivery of our newspapers' information.
However, it was also a year of dramatic expansion based on the lessons we
have learned from our earlier efforts.

     To start 1997 there were 15 newspapers, including USA TODAY, with
Internet projects. At the end of 1997, there were 33 newspapers, including
USA TODAY, with on-line sites and up to 12 more are planned for launch
in the first quarter of 1998.

                                   -55-

     In addition to learning from our experiences, decisions we made in 1995
and 1996 helped achieve this growth. The company was positioned for faster
implementation from a technological and marketing perspective by
becoming a partner in several joint ventures. Gannett's partnerships in
InfiNet, the New Century Network and CareerPath helped with quality
technological support, sales and networking with other newspaper on-line
services, and national distribution of locally developed on-line content.

     Newspapers are well positioned as the leading information providers in
their communities, and have an opportunity to be successful serving their
markets with on-line information as well. However, because this is a different
medium, newspapers cannot simply replicate themselves in their current
print form. Thus, Gannett's strategy is to create on-line products that
specifically serve on-line customers with information and services designed
for delivery in the new interactive medium.

     Specific on-line products should reflect the targeted customer needs in
that market. Thus, different on-line products are offered in different markets.
These include news, classified, real estate guides, employment sites,
entertainment, sports, automotive guides, tourism information, community
information or specialty products about something truly unique in a
community. At year end, more than 100 individual on-line products were
being produced by our newspapers.

     This is still a new effort, with more to learn and understand about the
differences in customer preferences, the medium and how to develop and
create revenue for on-line services. In 1998 the expectation is to continue
the rapid increase in the number of on-line products, improve the products
and continue our progression to profitable on-line services. The company
will also focus on positioning itself correctly today for tomorrow's
opportunities and challenges.

     In the short term, the company's activities in the on-line environment are
not expected to be profitable. However, that, of course, is the longer-term
goal. The company's investment in these areas is not material to the
company's financial position or results of operations.

     With respect to newspaper production, 61 daily newspaper plants print by
the offset process, and 15 plants print using various letterpress processes. In
recent years, improved technology for all of the newspapers has resulted in
greater speed and accuracy and in a reduction in the number of  production
hours worked per page.

     The principal sources of newspaper revenues are circulation and
advertising.

     Circulation: The table that follows summarizes the circulation volume and
revenues of the newspapers owned by the company at the end of 1997.
USA TODAY circulation is included in this table.

     This table assumes that all newspapers owned by the company at the end of
1997 were owned during all years shown:


Circulation: newspapers owned on Dec. 28, 1997

                     Circulation      Daily          Sunday
                       revenues      net paid       net paid
                     in thousands   circulation    circulation
                     ------------   ------------   ------------

1997                   $987,289      6,673,000      6,086,000
1996                   $957,747      6,614,000      6,161,000
1995                   $920,822      6,691,000      6,440,000
1994                   $894,647      6,697,000      6,625,000
1993                   $877,703      6,693,000      6,690,000


     Twenty-nine of the company's local newspapers reported gains in daily
circulation in 1997, and 11 increased Sunday circulation.

     Home-delivery prices for the company's newspapers are established
individually for each newspaper and range from $1.25 to $3.60 per week in
the case of daily newspapers and from $.70 to $2.00 per copy for Sunday
newspapers. The company implemented circulation price increases at 45
newspapers in 1997 and plans additional increases in 1998.

     Additional information about the circulation of the company's newspapers
may be found on pages 26-27 and 68-70 of this annual report.

     Advertising: The newspapers have advertising departments that sell retail,
classified and national advertising. The Gannett Retail Advertising Group
also sells advertising on behalf of the company's newspapers, other than
USA TODAY, to national and regional retailers and service providers. The
company also contracts with outside representative firms that specialize in
the sale of national advertising. A detailed analysis of newspaper advertising
revenues is presented on the following page and on page 26 of this report.

     Retail advertising is display advertising associated with local merchants,
such as department and grocery stores. Classified advertising includes the
ads listed together in sequence by the nature of the ads, such as automobile
sales, real estate sales and "help wanted." National advertising is display
advertising principally from advertisers who are promoting products or
brand names on a nationwide basis. Retail and national advertising may
appear in the newspaper itself or in preprinted sections. Generally there are
different rates for each category of advertising, and the rates for each
newspaper are set independently, varying from city to city.

     The newspapers have made continuing efforts to serve their readers and
advertisers by introducing complete market coverage programs and by
targeting specific market segments desired by many advertisers through the
use of specially zoned editions and other special publications.

     Total newspaper ad revenues on a pro forma basis rose 7%.  All major
advertising classifications showed substantial year-over-year growth during
1997. Retail advertising revenues produced a strong performance, driven by
medium and small advertisers. Revenues from these types of advertisers
increased 5% during the year, while revenues from larger accounts
increased 2%. Classified advertising

                                   -56-

revenues grew 10% on the strength of automotive, real estate, rentals and
help wanted categories. National advertising revenues grew 11% and preprint
revenues grew 4%.

     For 1998, the company expects further advertising revenue growth at most
of its newspaper properties as a result of enhanced sales and marketing
activities. Changes in national economic factors such as interest rates,
employment levels and the rate of general economic growth will have an
impact on revenues at all of the company's newspaper operations.

     During 1996, Gannett commissioned and published a Media Effectiveness
Survey covering the United States, including Gannett and non-Gannett
newspapers. The key finding was that daily newspapers are, by a wide
margin, the medium of choice as consumers' primary advertising/information
source for a wide variety of products and services. The results of the study
were promoted during 1996 and 1997 in an ad campaign positioning newspapers
as "The Welcome Medium." The ads ran in all Gannett newspapers and a variety
of trade publications. They were also shared with the industry, appearing in
more than 220 non-Gannett newspapers.

     The following chart summarizes the advertising linage (in six-column
inches) and advertising revenues of the newspapers owned by the company
at the end of 1997. This chart assumes that all of the newspapers owned at
the end of 1997 were owned throughout the years shown:


Advertising: newspapers owned on Dec. 28, 1997

                     Advertising        Inches of
                    revenues (ROP)    advertising,
                     in thousands  excluding preprints
                     ------------  -------------------
1997                  $2,338,042        76,160,000
1996                  $2,163,195        71,518,000
1995                  $2,030,397        72,877,000
1994                  $1,954,573        73,460,000
1993                  $1,848,852        70,874,000





<PAGE>

     Competition: The company's newspapers compete with other media for
advertising principally on the basis of their advertising rates and their
performance in helping sell the advertisers' products or services. They
compete for circulation principally on the basis of their content and their
price. While most of the company's newspapers do not have daily
newspaper competitors that are published in the same city, in certain of the
company's larger markets, there is such direct competition. Most of the
company's newspapers compete with other newspapers published in nearby
cities and towns and with free distribution and paid advertising weeklies, as
well as other print and non-print media.

     The rate of development of opportunities in and competition from emerging
electronic communications services, including those related to the Internet
and the World Wide Web, is increasing. Through internal development
programs, acquisitions and partnerships, the company's efforts to explore
new opportunities in news, information and communications businesses
have been expanded.

     At the end of 1997, The Cincinnati Enquirer, The Detroit News, The
Honolulu Advertiser, The Tennessean at Nashville and the Tucson (Ariz.)
Citizen were published under joint operating agreements with non-Gannett
newspapers located in the same cities. All of these agreements provide for
joint business, advertising, production and circulation operations and a
contractual division of profits. The editorial and reporting staffs of the
company's newspapers, however, are separate and autonomous from those
of the non-Gannett newspapers.

     Properties: Generally, the company owns the plants that house all aspects
of the newspaper publication process. In the case of USA TODAY, at Dec. 28,
1997, 12 non-Gannett printers were used to print the newspaper in the U.S.
in markets where there are no company newspapers with appropriate
facilities. Three non-Gannett printers in foreign countries are used to print
USA TODAY International. USA WEEKEND and Nursing Spectrum are
also printed under contracts with commercial printing companies. Many of
the company's newspapers also have outside news bureaus and sales
offices, which generally are leased. In a few cities, two or more of the
company's newspapers share combined facilities; and in certain locations,
facilities are shared with other newspaper properties. The company's
newspaper properties have rail siding facilities or access to main roads for
newsprint delivery purposes and are conveniently located for distribution
purposes.

     During the past five years, new or substantial additions or remodeling of
existing newspaper facilities have been completed or are at some stage of
construction at 10 of the company's newspaper operations. Gannett
continues to make significant investments in the renovation of existing or
new facilities where the investment will help to improve the products for its
readers and advertisers as well as improve productivity and operating
efficiencies. The company's facilities are adequate for present operations.

     Raw materials: Newsprint is the basic raw material used to publish
newspapers. During 1997, the company's newsprint consumption was
approximately 891,000 metric tons, including the company's portion of
newsprint consumed at joint operating agencies, consumption by USA
WEEKEND and USA TODAY tonnage consumed at non-Gannett print
sites. Newsprint consumption was up 8% in 1997 because of incremental
consumption by newspaper properties acquired during the year and
generally higher page count throughout the group. The company purchases
newsprint from 28 North American and offshore suppliers under contracts
which expire at various times through 2010.

     During 1997, all of the company's newspapers consumed some recycled
newsprint. For the year, approximately 81% of the company's newsprint
consumption contained recycled content.

     In 1997, newsprint supplies were adequate. The company believes that the
available sources of newsprint, together with present inventories, will
continue to be adequate to supply the needs of its newspapers.

                                   -57-

     The average cost per ton of newsprint consumed in 1997 decreased 21%
compared to the 1996 average cost. Some suppliers have announced plans
to increase prices in 1998. However, it is not certain if market conditions
will support those plans. In the absence of any newsprint price reductions in
1998, the company's average cost per ton consumed will be higher in 1998
because of the carryover effect of newsprint price increases in 1997.

     Regulation: Gannett is committed to protecting the environment. The
company's goal is to ensure its facilities are in compliance with federal,
state and local environmental laws and to incorporate appropriate
environmental practices and standards in our newspaper, broadcast and
cable operations. The company employs a corporate environmental manager
responsible for oversight not only of regulatory compliance but also of
preventive measures. The company is one of the industry leaders in the use
of recycled newsprint. The company increased usage of newsprint
containing recycled content from 42,000 metric tons in 1989 to more than
719,000 metric tons in 1997. The company's newspapers use inks,
photographic chemicals, solvents and fuels. The use and disposal of these
substances may be regulated by federal, state and local agencies. Through
its environmental compliance plan, the company is taking effective measures
to maintain compliance with environmental laws. Any release into the
environment may create obligations to private and governmental entities
under a variety of statutes and rules regulating the environment.

     Several of the company's newspaper subsidiaries have been included among
the potentially responsible parties in connection with the alleged disposal of
ink or other chemical wastes at disposal sites which have been subsequently
identified as inactive hazardous waste sites by the U.S. Environmental
Protection Agency ("EPA") or comparable state agencies. At one of these
sites, one of the company's subsidiaries is a defendant in a case brought by
the EPA where the amount in controversy is approximately $250,000. The
company believes its liability is substantially less and is defending the case.
The company provides for costs associated with these matters in accordance
with generally accepted accounting principles. The company does not
believe that these matters will have any significant impact on its financial
position or results of operations.

     Additional information about the company's newspapers may be found on
pages 68-71 of this report.

Broadcasting
     On Dec. 28, 1997, the company's television division, headquartered in
Arlington, Va., included 18 television stations, in markets with a total of
more than 14 million households. The company's radio division for fiscal
1997 included five radio stations in three markets. In January 1997, the
company exchanged WLWT-TV (NBC-Cincinnati) and KOCO-TV (ABC-Oklahoma City)
for WZZM-TV (ABC-Grand Rapids/Kalamazoo/Battle Creek) and WGRZ-TV
(NBC-Buffalo). The exchange was necessary to comply with Federal
Communications Commission (FCC) cross-ownership rules. In May 1997, the
company acquired KNAZ-TV(NBC-Flagstaff, Ariz.) and KMOH-TV (WB-Kingman, Ariz.).

     Early in the company's 1998 fiscal year, all five radio stations were sold
and the company acquired the NBC-affiliated television stations in Bangor and
Portland, Maine, bringing its complement of television stations to 20.

     At the end of 1997, the broadcasting division had approximately 2,900
full-time and part-time employees. Broadcasting revenues accounted for
approximately 15% of the company's reported operating revenues in 1997,
16% in 1996 and 12% in 1995.

     The principal sources of the company's broadcasting revenues are: 1) local
advertising focusing on the immediate geographic area of the stations; 2)
national advertising; 3) compensation paid by the networks for carrying
commercial network programs; and 4) payments by advertisers to television
stations for other services, such as the production of advertising material.
The advertising revenues derived from a station's local news programs
make up a significant part of its total revenues.

     Advertising rates charged by a television station are based primarily upon
the station's ability to attract viewers, demographics and the number of
television households in the area served by the station. Practically all
national advertising is placed through independent advertising
representatives. Local advertising time is sold by each station's own sales
force.

     Generally, a network provides programs to its affiliated television
stations, sells commercial advertising announcements within the network
programs and compensates the local stations by paying an amount based on the
television station's network affiliation agreement.

     Programming: The costs of locally produced and purchased syndicated
programming are a significant portion of television operating expenses.
Syndicated programming costs are determined based upon largely
uncontrollable market factors, including demand from the independent and
affiliated stations within the market and in some cases from cable
operations. In recent years, the company's television stations have increased
their locally produced news and entertainment programming in an effort to
provide programs that distinguish the stations from the competition and to
better control costs.

                                   -58-

     Properties: The company's broadcasting facilities are adequately equipped
with the necessary television broadcasting equipment. The company owns
transmitter sites in 19 locations and leases sites in three others (including
sites for the Maine television stations).

     During the past five years, new broadcasting facilities or substantial
improvements to existing facilities were completed in Austin, Greensboro,
N.C., Little Rock, Phoenix, Jacksonville, Atlanta and Washington, D.C.
Substantial remodeling is underway in Knoxville and a new facility is being
planned in Cleveland. The company's broadcast facilities are adequate for
present purposes.

     Competition: In each of its broadcasting markets, the company's stations
compete for revenues with other network-affiliated and independent
television and radio broadcasters and with other advertising media, such as
cable television, newspapers, magazines and outdoor advertising. The
company's  broadcasting stations compete principally on the basis of their
market share, advertising rates and audience composition.

     Local news is most important to a station's success and there is a growing
emphasis on other forms of programming that relates to the local
community. Network and syndicated programming constitute the majority
of all other programming broadcast on the company's television stations
and the company's competitive position is directly affected by viewer
acceptance of this programming.

     Other sources of present and potential competition for the company's
broadcasting properties include pay cable, home video and audio recorders
and video disc players, direct broadcast satellite and low power television.
Some of these competing services have the potential of providing improved
signal reception or increased home entertainment selection, and they are
continuing development and expansion.

     Regulation: The company's television stations are operated under the
authority of the Federal Communications Commission (FCC) under the
Communications Act of 1934, as amended (Communications Act), and the
rules and policies of the FCC (FCC Regulations).

     Under amendments to the Communications Act effected by the
Telecommunications Act of 1996 (the 1996 Act), television broadcast
licenses will be granted for a maximum period of eight years. (The period
was formerly five years.) Television broadcast licenses are renewable upon
application to the FCC and in the past usually have been renewed except in
rare cases in which a conflicting application, a petition to deny, a complaint
or an adverse finding as to the licensee's qualifications has resulted in loss
of the license. The company believes it is in substantial compliance with all
applicable provisions of the Communications Act and FCC Regulations.

     FCC Regulations also prohibit concentrations of broadcasting control and
regulate network programming. FCC Regulations governing multiple
ownership prohibit the common ownership or control of most
communications media serving common market areas (for example,
television and radio; television and daily newspapers; radio and daily
newspapers; or television and cable television). Pursuant to the 1996 Act,
permanent waivers can be sought for television and radio ownership in the
top 50 markets, however. Also, the 1996 Act limits the television broadcast
interests held by any person to assure that stations under common control
do not exceed an aggregate national audience reach of 35 percent. (Prior to
enactment of the 1996 Act, the cap on audience reach was 25 percent and
no single party could own more than 12 stations.) Presently, the company's
20 television stations reach an aggregate of 16.3% of U.S. TV households.

     The FCC's consent to the company's December 1995 acquisition of control
of five television stations and two radio stations owned by Multimedia, Inc.
was conditioned on the company's compliance (within 12 months) with
FCC "one-to-a-market" rules. On Jan. 31, 1997, the company traded its
television stations in Oklahoma City and Cincinnati for television stations in
Grand Rapids and Buffalo, which resolved the FCC conditions affecting (1)
cross-ownership of TV and cable systems in the area of Oklahoma City; (2)
cross-ownership of a daily newspaper and a TV station in Cincinnati. In May
1996, the company sold its two radio stations in Macon, Ga., resolving the
FCC radio and TV cross-ownership issue in that market. On Nov. 12, 1996,
the company filed a request to extend its existing waiver for ownership of
both Macon and Atlanta TV stations. The FCC granted an interim extension
on July 30, 1997; however, the company believes that under the FCC's
proposed rulemaking it will be able to maintain ownership of both Macon
and Atlanta TV.

     The 1996 Act deregulated radio and television ownership rules so as to
permit larger ownership groups and, in the top 50 television markets, more
TV-radio combinations than were permitted under prior FCC rules. Also,
competing applications will not be accepted at the time of license renewal,
and will not be entertained at all unless the FCC first concludes that license
renewal would not serve the public interest. It will be necessary for the
FCC to amend many existing FCC Regulations to implement the 1996 Act,
and this process has not yet been completed.

     Additional information about the company's television stations may be
found on page 72 of this annual report.

                                   -59-

Cable
     On Dec. 28, 1997, the company's cable division, headquartered in Wichita,
Kan., operated cable television systems serving 478,000 subscribers in
Kansas, Oklahoma, Illinois, Indiana and North Carolina. The cable division
was acquired on Dec. 4, 1995 as part of the Multimedia purchase. At the
end of 1997, the cable division had approximately 1,000 full-time and
part-time employees.

     Cable television is the distribution of a wide variety of television and
special information programs to subscribers within a community over a network
of fiber-optic and coaxial cable.

     The principal sources of the company's cable division revenues are:
1) monthly fees paid by subscribers for primary services generally consisting
of local and distant broadcast stations and public, educational and
governmental channels required by local franchising authorities and a variety
of satellite-delivered entertainment and information channels; 2) monthly
and per-event fees paid by subscribers for premium television services which
provide special programs such as recently released movies, entertainment
programs or selected sports events. Subscribers can receive these programs
on a designated channel of the cable system which is restricted with
electronic security devices to isolate the pay television signal so that only
subscribers to the service can receive it; and 3) local advertising revenues.

     The company holds approximately 160 franchises from local governing
authorities which permit the company to operate a cable television system in
the granting community. These franchises, which expire at varying dates
ranging from one to 18 years, are generally non-exclusive and may be
terminated for failure to comply with specified conditions. In most cases, the
company is required to pay fees generally ranging from 3% to 5% of a
system's revenues, to the local governing authority granting a franchise.  At
the end of 1997, approximately 117 systems, which account for more than
80% of the company's subscribers, have franchise agreements expiring in
the year 2002 and beyond.

     The following table shows certain cable division information as of the
end of 1997, 1996 and 1995.

                              1997      1996      1995
                            --------  --------  --------
Homes passed                 774,000   761,000   738,000
Basic subscribers            478,000   465,000   458,000
Pay subscribers              340,000   333,000   336,000
Basic penetration              61.8%     61.1%     62.1%
Pay-to-basic ratio             71.1%     71.6%     73.4%
Average monthly revenue
  per cable subscriber        $37.31   $35.00    $32.29

     The company's strategy is to develop clusters of cable television systems
in suburban communities of major metropolitan markets and other areas with
favorable demographics. Management believes that the clustering of cable
systems produces operating, marketing and servicing efficiencies.
Management believes that clustering will also enable the company to
achieve efficiencies in the future deployment of new services such as
video-on-demand, interactive multimedia and competitive access.

     Properties: The company's cable systems and facilities are adequately
equipped with the necessary cable equipment. Prior to acquisition by the
company, the cable division began a major rebuild program to install
fiber-optic cable and upgrade the technical capabilities of its cable systems.
The rebuild program, which will be completed in the first half of 1998,
enhances services through improved picture quality and reliability and
provides the ability to offer additional services to subscribers.

     At Dec. 28, 1997, approximately 94% of the company's cable subscribers
had advanced technical facilities (550MHZ to 750MHZ) capable of 80 and
110 channels of analog capacity, respectively. When the current rebuild
program is completed, more than 95% of the company's customers will be
served by advanced technical facilities. The rebuild plans include the future
integration of digital compression and the installation of interactive
converter boxes where they provide a direct financial return. The company
estimates that approximately 50% of its subscribers might have the new
converters within the next five years. The company believes its
technological upgrades will prepare it for new competitors and potential
revenue opportunities.

     Competition: The company's cable division competes with other companies
and individuals in the submission of applications for additional franchises, in
the renewal of existing franchises and in seeking to acquire operating cable
systems and under-developed franchises. Since most franchises are granted
on a non-exclusive basis, other applicants may obtain franchises in areas
where the company presently operates systems or holds franchises.

     The cable division competes with over-the-air television and radio
broadcasting, newspapers, movie theaters, live entertainment and sporting
events and home video products. Subscription television competition also
includes expanding direct broadcast satellite services, multichannel,
multipoint distribution services and private satellite master antenna
television systems serving condominiums, apartment complexes and other
private residential developments.  The company's cable division competes
for subscription revenues principally on the basis of quality of service,
programming options and pricing. The cable division competes for
advertising revenues principally on the basis of performance in helping sell
the advertisers' products or services, and price.

                                   -60-

     Other matters: In December 1997, the company announced that Multimedia
Cablevision will acquire cable systems serving approximately 128,000
subscribers in Kansas from Tele-Communications, Inc., in exchange for its
cable systems serving approximately 93,000 subscribers in suburban
Chicago, plus cash. The transaction is expected to close during mid-1998.

     The company is a partner with Hyperion Telecommunications, Inc., a
subsidiary of Adelphia Cable, to construct and operate competitive access
telephone services in its Wichita franchise area. The construction of the
network is complete and the partnership is operating.

     Regulation: The cable television industry is subject to extensive federal,
local and, in some cases, state regulation. The Cable Communications Policy
Act of 1984 (the 1984 Act) and its amendments (the 1992 Act and the 1996
Act) govern cable television. The FCC has the principal federal
responsibility for regulating cable matters, including rates, customer service,
ownership, carriage of broadcast signals and other programming, technical
matters, leased access, franchises and consumer equipment standards.

     FCC Regulations prohibit common ownership or control of a television
station and a cable system in the station's Grade B signal coverage area.

     The 1992 Act requires mandatory carriage of certain local over-the-air
television stations ("must-carry" rules) and allows television stations to
prohibit the carriage of their programs by cable systems absent consent
("retransmission consent"). Television stations may elect either must-carry
or retransmission consent on local cable systems. The company's cable
systems have accommodated those stations electing mandatory carriage, and
have entered into retransmission consent agreements with others.

     The 1992 Act rate regulations apply to basic service (which includes
broadcast signals) unless a cable system is subject to "effective
competition." Virtually all cable systems are subject to rate regulation. To
regulate rates for basic service, local officials must follow detailed FCC
guidelines and procedures. The 1992 Act also regulates non-basic (cable
programming) rates. FCC rules also limit rates for consumer equipment. The
rules permit cable companies periodic rate increases for inflation and certain
external costs. Rates for per-channel or per-program premium services are not
subject to regulation.

     The 1984 Act requires a cable operator to obtain a franchise prior to
instituting service, and state and local officials become involved in cable
operator selection, system design and construction, safety, rates, consumer
services and community programming issues. Franchising authorities may
not award an exclusive franchise or unreasonably deny a competitive
franchise. Local authorities may operate their own cable system, though,
notwithstanding the existence of a cable franchise. The 1984 Act permits
local authorities to charge up to 5% of revenues per year as a franchising
fee, and to require certain public cable channels.

    The 1984 Act provides an incumbent cable operator with protections
against denial of its franchise renewal, including the right to a fair hearing
and a right of appeal. Nevertheless, franchise renewal is not assured. Upon
renewal, new or more onerous requirements, such as upgrading of facilities
and services or higher franchising fees, may occur.

     Cable systems are subject to federal copyright licensing in connection
with the carriage of television signals, and receive blanket permission to
retransmit copyrighted material in exchange for royalty payments. The
amount of the royalty payments varies.

     The 1996 Act changed cable television regulation in several respects. It
eliminated the ban on telephone companies offering video services. In some
cases, telephone video services will be exempt from the local franchising
requirement, from rate regulation, and from customer service and other
FCC Regulations. Subject to adoption of final FCC Regulations, the 1996
Act permits cable operators to provide telephone services, without the
requirement of a local franchise. Network/cable cross-ownership now will
be permitted, and the statutory prohibition on broadcast/cable
cross-ownership has been repealed, and the FCC is expected to review its
own broadcast/cable cross-ownership rule.

     While the present rate structure for basic tiers has been retained, the
1996 Act deregulates rates for non-basic services for the company's cable
systems, effective March 31, 1999. The FCC and Congress recently
indicated that the termination of cable programming service tier rates in
March 1999 may be revisited.  Deregulation of rates also will occur
immediately where a telephone company enters the cable franchising area
and offers comparable video programming.

     Telephone companies and cable operators in the same market are prohibited
from entering into joint ventures to provide programming or
telecommunication services directly to subscribers.  Telephone companies
and cable operators each are prohibited from acquiring more than a 10%
financial interest, or any management interest, in the other's operations in
its service area.  For certain small and/or rural service areas, telephone or
cable companies may acquire an interest in the other in its service area,
however.

                                   -61-

Alarm security business
     The company's alarm security business, Multimedia Security Service, was
sold in March 1998.

Corporate facilities
     The company leases office space for its headquarters in Arlington, Va.,
and also owns data processing facilities in nearby Maryland. The capital
expenditure program for 1995, 1996 and 1997 included amounts for
leasehold improvements, land, building, furniture, equipment and fixtures
for headquarters operations. Headquarters facilities are adequate for present
operations. In September 1996, the company purchased 30 acres of land in
Fairfax County, Va., for use as a future site for corporate headquarters and
perhaps other operations.

Employee relations
     At the end of 1997, the company and its subsidiaries had 39,400 full-time
and part-time employees. On the basis of hours worked, the company
employed the equivalent of 35,400 full-time employees. Five of the
company's newspapers were published in 1997 together with non-company
newspapers pursuant to joint operating  agreements, and the employment
numbers above include the company's pro-rata share of employees at those
joint production and business operations.

     Approximately 15% of those employed by the company and its subsidiaries
are represented by labor unions. They are represented by 103 local
bargaining units affiliated with 12 international unions under collective
bargaining agreements. These agreements conform generally with the
pattern of labor agreements in the newspaper and broadcasting industries.
The company does not engage in industrywide or companywide bargaining.
The company strives to maintain good relationships with its employees.

     On July 13, 1995, approximately 2,500 workers from six unions began a
strike against the company's largest local newspaper, The Detroit News, the
Detroit Newspaper Agency and the Detroit Free Press, its agency partner.
The strike was precipitated by unrealistic and excessive demands by the
unions for wage increases and position levels. The strike ended in
mid-February 1997 when the six striking unions made an unconditional offer
to return to work. They continue to attempt a subscriber and advertiser
boycott as they do not yet have contracts.

     Throughout the strike and despite union efforts at stopping delivery of
the newspapers through intimidation and frequent violence, the newspapers
published every day. Over 700 of the original strikers have now returned to
work and approximately 1,100 replacement workers have been employed to
fill other necessary positions. Litigation before the National Labor Relations
Board and in the federal courts concerning the strike and its aftermath
continues.

     The company provides competitive group life and medical insurance
programs for full-time employees at each location. The company pays a
substantial portion of these costs and employees contribute the balance.
Virtually all of the company's units provide retirement or profit-sharing
plans which cover eligible full-time employees.

     In 1990, the company established a 401(k) Savings Plan, which is available
to most of its non-union employees.

                                   -62-

Acquisitions and dispositions 1993-1997
     The growth of the company has resulted from acquisitions of businesses, as
well as from internal expansion. Its significant acquisitions since the
beginning of 1993 are shown below. The company has disposed of several
businesses during this period, which also are presented.


<TABLE>
Acquisitions 1993-1997
<CAPTION>

  Year                                                              Publication times
acquired           Name                   Location                  or business
- -------- ------------------------      --------------             -----------------
<S>      <C>                           <C>                        <C>

1993     The Honolulu Advertiser         Honolulu, Hawaii           Daily
         Tulare Advance-Register         Tulare, Calif.             Daily

1994     Nursing Spectrum                Various                    Biweekly periodicals
         Altoona Herald                  Altoona, Iowa              Weekly; Weekly
           Mitchellville Index and                                  advertising shopper
           the Eastern ADvantage
         KTHV-TV                         Little Rock, Ark.          Television station

1995     Multimedia, Inc.                Greenville, S.C.           Ten daily newspapers,
                                                                    various non-dailies,
                                                                    five television
                                                                    stations, two radio
                                                                    stations, cable
                                                                    television franchises
                                                                    in five states,
                                                                    alarm security
                                                                    business, television
                                                                    entertainment
                                                                    programming

1996     WTSP-TV                         Tampa-St.                  Television station
                                         Petersburg, Fla.

1997     WZZM-TV                         Grand Rapids, Mich.        Television station
         WGRZ-TV                         Buffalo, N.Y.              Television station
         Printed Media Companies         Minneapolis, Minn.         Commercial printing
         KNAZ-TV                         Flagstaff, Ariz.           Television station
         KMOH-TV                         Kingman, Ariz.             Television station
         Mary Morgan, Inc.               Greenbay, Wis.             Commercial printing
         Army Times Publishing Co., Inc. Springfield, Va.           Weekly and Monthly
                                                                    periodicals
         New Jersey Press, Inc.          Asbury Park and East
                                           Brunswick, N. J.         Two daily newspapers
</TABLE>



<TABLE>
Dispositions 1993-1997
<CAPTION>

Year                                                                Publication times
sold               Name                     Location                or business
- -------- ------------------------        --------------             -----------------
<S>      <C>                             <C>                        <C>
1993     Honolulu Star-Bulletin          Honolulu, Hawaii           Daily
         KCMO/KCMO-FM                    Kansas City, Mo.           Radio stations
         KUSA/KSD-FM                     St. Louis, Mo.             Radio stations
         WLVI-TV                         Boston, Mass.              Television station

1994     The Stockton Record             Stockton, Calif.           Daily and Sunday

1995     The Add Sheet                   Columbia, Mo.              Weekly advertising
                                                                    shopper

1996     WMAZ/WAYS-FM                    Macon, Ga.                 Radio stations
         Gannett Outdoor Group           Various major              Outdoor advertising
                                         markets, U.S. and
                                         Canada
         Multimedia Entertainment        New York, N.Y.             Television enter-
                                                                    tainment programming
         Louis Harris and
           Associates, Inc.              New York, N.Y.             Polling and research
         Gannett Community
           Directories                   Paramus, N.J.              Community directories
         KIIS/KIIS-FM                    Los Angeles, Calif.        Radio stations
         KSDO/KKBH-FM                    San Diego, Calif.          Radio stations
         WDAE/WUSA-FM                    Tampa, Fla.                Radio stations

1997     WLWT-TV                         Cincinnati, Ohio           Television station
         KOCO-TV                         Oklahoma City, Okla.       Television station
         Niagara Gazette                 Niagara Falls, N.Y.        Daily newspaper
         The Observer                    Moultrie, Ga.              Daily newspaper
         North Hills News Record         North Hills, Pa.           Daily newspaper
         Valley News Dispatch            Tarentum, Pa.              Daily newspaper

                                    -63-


<PAGE>


</TABLE>


<TABLE>
QUARTERLY STATEMENTS OF INCOME
In thousands of dollars
<CAPTION>
Fiscal year ended December 28, 1997            1st Quarter    2nd Quarter    3rd Quarter    4th Quarter       Total
                                               -----------    -----------    -----------    -----------    -----------
<S>                                            <C>            <C>            <C>            <C>            <C>
Net operating revenues
Newspaper advertising                          $  593,552     $  656,306     $  633,019     $  751,457     $2,634,334
Newspaper circulation                             233,370        232,237        235,439        247,095        948,141
Broadcasting                                      150,606        189,245        164,895        198,812        703,558
Cable and security                                 61,546         64,363         63,502         65,852        255,263
All other                                          37,683         45,676         49,235         55,601        188,195
                                               -----------    -----------    -----------    -----------    -----------
Total                                           1,076,757      1,187,827      1,146,090      1,318,817      4,729,491
                                               -----------    -----------    -----------    -----------    -----------
Operating expenses
Cost of sales and operating expenses,
   exclusive of depreciation                      566,522        575,646        602,418        623,986      2,368,572
Selling, general and administrative expenses,
   exclusive of depreciation                      174,791        179,787        184,092        204,908        743,578
Depreciation                                       49,782         49,976         49,979         51,363        201,100
Amortization of intangible assets                  24,842         24,898         24,900         25,333         99,973
                                               -----------    -----------    -----------    -----------    -----------
Total                                             815,937        830,307        861,389        905,590      3,413,223
                                               -----------    -----------    -----------    -----------    -----------
Operating income                                  260,820        357,520        284,701        413,227      1,316,268
Non-operating (expense) income
Interest expense                                  (25,618)       (24,783)       (23,418)       (24,423)       (98,242)
Other                                              (5,088)        (1,004)        (1,573)        (1,382)        (9,047)
                                               -----------    -----------    -----------    -----------    -----------
Total                                             (30,706)       (25,787)       (24,991)       (25,805)      (107,289)
                                               -----------    -----------    -----------    -----------    -----------
Income before income taxes                        230,114        331,733        259,710        387,422      1,208,979
Provision for income taxes                         95,050        137,000        107,250        157,000        496,300
                                               -----------    -----------    -----------    -----------    -----------
Income from continuing operations                 135,064        194,733        152,460        230,422        712,679
Discontinued operations
Income from the operation of discontinued
   operations, net of income taxes
Gain from the sale of discontinued operations,
   net of income taxes
                                               -----------    -----------    -----------    -----------    -----------
Total income from discontinued operations
                                               -----------    -----------    -----------    -----------    -----------
Net income                                     $  135,064     $  194,733     $  152,460     $  230,422     $  712,679
                                               ===========    ===========    ===========    ===========    ===========
Basic earnings per share
Basic earnings from continuing
   operations                                       $0.48          $0.69          $0.54          $0.81          $2.52
Basic earnings from discontinued operations:
   Discontinued operations, net of tax
   Gain from sale of discontinued
      operations, net of tax
                                               -----------    -----------    -----------    -----------    -----------
Net income per share - basic                        $0.48          $0.69          $0.54          $0.81          $2.52
                                               ===========    ===========    ===========    ===========    ===========
Diluted earnings per share
Diluted earnings from continuing
   operations (1)                                   $0.48          $0.68          $0.53          $0.80          $2.50
Diluted earnings from discontinued operations:
   Discontinued operations, net of tax
   Gain from sale of discontinued
      operations, net of tax
                                               -----------    -----------    -----------    -----------    -----------
Net income per share - diluted (1)                  $0.48          $0.68          $0.53          $0.80          $2.50
                                               ===========    ===========    ===========    ===========    ===========

(1)  As a result of rounding, the total of the four quarters' earnings per share does not equal the earnings per share
     for the year.
</TABLE>

                                    -64-

<PAGE>


<TABLE>
QUARTERLY STATEMENTS OF INCOME
In thousands of dollars
<CAPTION>
Fiscal year ended December 29, 1996         1st Quarter    2nd Quarter    3rd Quarter    4th Quarter       Total
                                            -----------    -----------    -----------    -----------    -----------
<S>                                         <C>            <C>            <C>            <C>            <C>
Net operating revenues
Newspaper advertising                       $  556,885     $  604,980     $  585,814     $  669,871     $2,417,550
Newspaper circulation                          229,417        227,260        229,197        231,803        917,677
Broadcasting                                   141,688        176,306        178,879        190,063        686,936
Cable and security                              56,612         57,732         58,332         59,824        232,500
All other                                       39,281         43,016         40,481         43,666        166,444
                                            -----------    -----------    -----------    -----------    -----------
Total                                        1,023,883      1,109,294      1,092,703      1,195,227      4,421,107
                                            -----------    -----------    -----------    -----------    -----------
Operating expenses
Cost of sales and operating expenses,
   exclusive of depreciation                   590,515        587,515        612,888        576,930      2,367,848
Selling, general and administrative
   expenses, exclusive of depreciation         168,707        168,590        174,533        187,654        699,484
Depreciation                                    48,837         49,034         48,772         46,368        193,011
Amortization of intangible assets               23,515         23,481         23,472         23,891         94,359
                                            -----------    -----------    -----------    -----------    -----------
Total                                          831,574        828,620        859,665        834,843      3,354,702
                                            -----------    -----------    -----------    -----------    -----------
Operating income                               192,309        280,674        233,038        360,384      1,066,405
Non-operating (expense) income
Interest expense                               (39,528)       (38,403)       (34,111)       (23,521)      (135,563)
Other                                           (1,583)          (657)        (3,917)       161,982 (2)    155,825 (2)
                                            -----------    -----------    -----------    -----------    -----------
Total                                          (41,111)       (39,060)       (38,028)       138,461         20,262
                                            -----------    -----------    -----------    -----------    -----------
Income before income taxes                     151,198        241,614        195,010        498,845      1,086,667
Provision for income taxes                      64,750        104,375         83,800        209,775        462,700
                                            -----------    -----------    -----------    -----------    -----------
Income from continuing operations               86,448        137,239        111,210        289,070 (2)    623,967 (2)
Discontinued operations
Income from the operation of discontinued
   operations, net of income taxes               2,902         12,777          8,861                        24,540
Gain from the sale of discontinued
   operations, net of income taxes                                           294,580                       294,580
                                            -----------    -----------    -----------    -----------    -----------
Total income from discontinued operations        2,902         12,777        303,441              0        319,120
                                            -----------    -----------    -----------    -----------    -----------
Net income                                  $   89,350     $  150,016     $  414,651     $  289,070 (2) $  943,087 (2)
                                            ===========    ===========    ===========    ===========    ===========
Basic earnings per share
Basic earnings from continuing
   operations (1)                                $0.31          $0.48          $0.39          $1.02 (2)      $2.21 (2)
Basic earnings from discontinued operations:
   Discontinued operations, net of tax           $0.01          $0.05          $0.03                         $0.09
   Gain from sale of discontinued
     operations, net of tax                                                    $1.05                         $1.05
                                            -----------    -----------    -----------    -----------    -----------
Net income per share - basic (1)                 $0.32          $0.53          $1.47          $1.02 (2)      $3.35 (2)
                                            ===========    ===========    ===========    ===========    ===========

Diluted earnings per share
Diluted earnings from continuing
   operations                                    $0.31          $0.48          $0.39          $1.02 (2)      $2.20 (2)
Diluted earnings from discontinued
   operations:
   Discontinued operations, net of tax            0.01           0.05           0.03                          0.09
   Gain from sale of discontinued
      operations, net of tax                                                    1.04                          1.04
                                            -----------    -----------    -----------    -----------    -----------
Net income per share - diluted                   $0.32          $0.53          $1.46          $1.02 (2)      $3.33 (2)
                                            ===========    ===========    ===========    ===========    ===========

(1)  As a result of rounding, the total of the four quarters' earnings per share does not equal the earnings per share
     for the year.
(2)  Includes pre-tax, non-cash, non-operating gain of $158 million on the December 1996 exchange of broadcast stations
     (after-tax gain of $93 million of $0.33 per share).
</TABLE>



                                    -65-

<PAGE>


<TABLE>
SCHEDULES TO FORM 10-K INFORMATION
In thousands of dollars
Property, plant & equipment
<CAPTION>
                                   Balance at
                                   beginning        Additions              Retirements      Other         Balance at end
Classification                     of period         at cost                 or sales      changes          of period
- -------------------------------- -------------- ------------------------- -------------- ---------------- --------------
<S>                              <C>            <C>                       <C>            <C>              <C>

Dec. 31, 1995
Land                                  $130,166            $11,328                $2,943          $50           $138,601
Buildings & improvements               690,589             56,301                 7,501          121            739,510
Cable and security systems and
 advertising display structures        259,532            407,832                 2,979        1,086            665,471
Machinery, equipment & fixtures      1,669,192            272,112                46,828          417          1,894,893
Construction in progress and
 deposits on contracts                  64,977             56,211                     0            3            121,191
                                 -------------- ------------------------- -------------- ---------------- --------------
                                    $2,814,456           $803,784  (A)(E)       $60,251       $1,677  (D)    $3,559,666
                                 ============== ========================= ============== ================ ==============
Dec. 29, 1996
Land                                  $138,601            $47,982               $11,067        $(678)          $174,838
Buildings & improvements               739,510             54,419                28,455        4,982            770,456
Cable and security systems and
 advertising display structures        665,471             91,953               276,162         (209)           481,053
Machinery, equipment & fixtures      1,894,893            150,005               114,865       (3,975)         1,926,058
Construction in progress and
 deposits on contracts                 121,191            (50,696)                 (913)        (413)            70,995
                                 -------------- ------------------------- -------------- ---------------- --------------
                                    $3,559,666           $293,663  (B)(E)      $429,636        $(293) (D)    $3,423,400
                                 ============== ========================= ============== ================ ==============
Dec. 28, 1997
Land                                  $174,838             $2,544                $1,435         $(63)          $175,884
Buildings & improvements               770,456             73,581                 7,265        3,385            840,157
Cable and security sytems              481,053             76,574                13,383        3,975            548,219
Machinery, equipment & fixtures      1,926,058            260,814                46,508         (216)         2,140,148
Construction in progress and
 deposits on contracts                  70,995              3,637                17,122       (7,081)            50,429
                                 -------------- ------------------------- -------------- ---------------- --------------
                                    $3,423,400           $417,150 (C)(E)      $  85,713      $     0         $3,754,837
                                 ============== ========================= ============== ================ ==============
Notes
(A) Includes assets at acquisition net of adjustments for prior years' acquisitions          $ 620,248
(B) Includes assets at acquisition net of adjustments for prior years' acquisitions          $  33,616
(C) Includes assets at acquisition net of adjustments for prior years' acquisitions          $ 195,899
(D) Principally the effect of current foreign currency translation adjustment.
(E) Includes capitalized interest of $2,529 in 1995, $3,643 in 1996 and $1,624 in 1997.
(F) Generally the rates of depreciation range from 2.5% to 10% for buildings and improvements,
    3.3% to 20% for cable and security systems and 4% to 30% for machinery, equipment and fixtures.
(G) Includes depreciation expense reflected with earnings from discontinued operations of
    $10,676 in 1996 and $15,918 in 1995.

</TABLE>

                                    -66-

<PAGE>



<TABLE>
SCHEDULES TO FORM 10-K INFORMATION


In thousands of dollars
Accumulated depreciation and
amortization of property,
plant and equipment
<CAPTION>

                                   Balance at   Additions charged
                                   beginning         to costs              Retirements      Other         Balance at end
                                   of period       and expenses              or sales      changes          of period
- -------------------------------- -------------- ------------------------- -------------- ---------------- --------------
<S>                              <C>            <C>                       <C>            <C>              <C>

Dec. 31, 1995
Buildings and improvements            $271,529            $25,818                $2,422         $308           $295,233
Cable and security systems and
 advertising display structures        148,980             14,488                 2,046          524            161,946
Machinery, equipment and fixtures      965,803            119,351                53,420           66          1,031,800
                                 -------------- ------------------------- -------------- ---------------- --------------
                                    $1,386,312           $159,657 (F)(G)        $57,888         $898  (D)    $1,488,979
                                 ============== ========================= ============== ================ ==============

Dec. 29, 1996
Buildings and improvements            $295,233            $25,103               $15,139      $(4,422)          $300,775
Cable and security systems and
 advertising display structures        161,946             25,761               169,625       14,515             32,597
Machinery, equipment and fixtures    1,031,800            152,823                87,239       (1,416)         1,095,968
                                 -------------- ------------------------- -------------- ---------------- --------------
                                    $1,488,979           $203,687 (F)(G)       $272,003       $8,677  (D)    $1,429,340
                                 ============== ========================= ============== ================ ==============
Dec. 28, 1997
Buildings and improvements          $  300,775            $24,396                $5,148       $4,057         $  324,080
Cable and security systems              32,597             60,377                 5,976       (3,892)            83,106
Machinery, equipment and fixtures    1,095,968            116,327                56,521         (165)         1,155,609
                                 -------------- ------------------------- -------------- ---------------- --------------
                                    $1,429,340           $201,100 (F)           $67,645      $     0         $1,562,795
                                 ============== ========================= ============== ================ ==============

(D)(F) and (G) See page 66

</TABLE>




<TABLE>
Valuation and qualifying accounts
<CAPTION>

                                Balance at    Additions charged  Additions (reductions)
Allowance for doubtful           beginning         to costs        for acquisitions/       Deductions    Balance at end
receivables                      of period       and expenses        dispositions        from reserves     of period
                               -------------- ------------------ ---------------------- ---------------- --------------
<S>                            <C>            <C>                <C>                    <C>              <C>
Year ended Dec. 31, 1995             $15,846            $19,101                $ 6,394          $19,159        $22,182
Year ended Dec. 29, 1996             $22,182            $22,847                $(1,706)         $24,381        $18,942
Year ended Dec. 28, 1997             $18,942            $22,333                $   618          $23,873        $18,020
</TABLE>



<TABLE>
Supplementary income statement information (from continuing operations)
<CAPTION>
Fiscal year ended                               Dec. 28, 1997     Dec. 29, 1996     Dec. 31, 1995
                                              ------------------ --------------- ----------------
<S>                                           <C>                <C>             <C>
Maintenance and repairs                             $50,631          $47,879          $37,171
Taxes other than payroll and income tax
 Property                                           $20,426          $19,344          $15,956
 Other                                              $10,601          $10,120          $10,436
                                              ------------------ --------------- ----------------
 Total                                              $31,027          $29,464          $26,392
                                              ------------------ --------------- ----------------
</TABLE>

                                    -67-


<PAGE>


<TABLE>
MARKETS WE SERVE
NEWSPAPERS AND NEWSPAPER DIVISION
<CAPTION>
Daily newspapers
    State                                                            Circulation Circulation  Circulation         Joined
  Territory            City                     Newspaper              Morning    Afternoon     Sunday    Founded Gannett   *
- -------------- --------------------- ------------------------------- ----------- ------------ ----------- ------- -------------
<S>            <C>                   <C>                             <C>         <C>          <C>         <C>     <C>
Alabama        Montgomery            The Montgomery Advertiser           58,094                   73,160  1829    1995     (77)
Arizona        Tucson                Tucson Citizen                                   43,946              1870    1976     (41)
Arkansas       Mountain Home         The Baxter Bulletin                 10,556                           1901    1995     (78)
California     Marin County          Marin Independent Journal                        40,530      41,954  1861    1980     (60)
               Palm Springs          The Desert Sun                      49,282                   51,752  1927    1986     (71)
               Salinas               The Californian                     19,767                           1871    1977     (47)
               San Bernardino        The San Bernardino County Sun       79,943                   88,751  1894    1969     (20)
               Tulare                Tulare Advance-Register                           8,057              1882    1993     (76)
               Visalia               Visalia Times-Delta                 22,096                           1859    1977     (48)
Colorado       Fort Collins          Fort Collins Coloradoan             29,296                   36,176  1873    1977     (49)
Connecticut    Norwich               Norwich Bulletin                    31,878                   37,499  1791    1981     (63)
Delaware       Wilmington            The News Journal                   125,011                  149,404  1871    1978     (55)
Florida        Brevard County        FLORIDA TODAY                       87,324                  114,450  1966    1966     (18)
               Fort Myers            News-Press                          89,099                  107,201  1884    1971     (34)
               Pensacola             Pensacola News Journal              61,550                   83,378  1889    1969     (21)
Georgia        Gainesville           The Times                                        22,642      26,985  1947    1981     (62)
Guam           Agana                 Pacific Daily News                  24,467                   23,866  1944    1971     (33)
Hawaii         Honolulu              The Honolulu Advertiser            106,593                  191,588  1856    1993     (75)
Idaho          Boise                 The Idaho Statesman                 64,303                   86,534  1864    1971     (26)
Illinois       Danville              Commercial-News                                  18,828      20,771  1866    1934      (6)
               Rockford              Rockford Register Star              73,473                   85,998  1855    1967     (19)
Indiana        Lafayette             Journal and Courier                 36,846                   44,697  1829    1971     (27)
               Marion                Chronicle-Tribune                   19,571                   22,713  1867    1971     (30)
               Richmond              Palladium-Item                                   19,415      23,674  1831    1976     (40)
Iowa           Des Moines            The Des Moines Register            163,998                  273,131  1849    1985     (67)
               Iowa City             Iowa City Press-Citizen             14,999                           1860    1977     (51)
Kentucky       Louisville            The Courier-Journal                231,191                  315,499  1868    1986     (73)
Louisiana      Monroe                The News-Star                       38,126                   43,100  1890    1977     (54)
               Shreveport            The Times                           76,661                   95,446  1871    1977     (53)
Michigan       Battle Creek          Battle Creek Enquirer                            26,830      35,955  1900    1971     (28)
               Detroit               The Detroit News                                247,299              1873    1986     (70)
                                     The Detroit News and Free Press                             829,803
               Lansing               Lansing State Journal               70,521                   93,717  1855    1971     (25)
               Port Huron            Times Herald                                     31,344      42,438  1900    1970     (22)
Minnesota      St. Cloud             St. Cloud Times                                  28,273      37,920  1861    1977     (46)
Mississippi    Hattiesburg           Hattiesburg American                             24,971      29,190  1897    1982     (65)
               Jackson               The Clarion-Ledger                 106,002                  126,590  1837    1982     (64)
Missouri       Springfield           Springfield News-Leader             63,163                   97,069  1893    1977     (45)
Montana        Great Falls           Great Falls Tribune                 33,344                   39,587  1885    1990     (74)
Nevada         Reno                  Reno Gazette-Journal                66,846                   84,024  1870    1977     (42)
New Jersey     Asbury Park           Asbury Park Press                  155,184                  224,456  1879    1997     (86)
               Bridgewater           The Courier-News                    45,234                   46,512  1884    1927      (4)
               Cherry Hill           Courier-Post                        86,135                   97,044  1875    1959      (8)
               East Brunswick        Home News Tribune                   74,748                   82,008  1879    1997     (87)
               Vineland              The Daily Journal                                17,405              1864    1986     (72)
New York       Binghamton            Press & Sun-Bulletin                66,675                   85,062  1904    1943      (7)
               Elmira                Star-Gazette                        32,012                   44,927  1828    1906      (1)
               Ithaca                The Ithaca Journal                  19,229                           1815    1912      (2)
               Poughkeepsie          Poughkeepsie Journal                42,993                   58,083  1785    1977     (44)
               Rochester             Rochester Democrat and Chronicle   167,836                  246,651  1833    1928      (5)
               Utica                 Observer-Dispatch                   50,525                   61,366  1817    1922      (3)
               Gannett Suburban Newspapers
                Mamaroneck           The Daily Times                                   5,159       5,278  1879    1964     (15)
                Mount Vernon         The Daily Argus                      6,289                    7,515  1892    1964     (14)
                New Rochelle         The Standard-Star                   10,012                   10,681  1908    1964     (12)
                Ossining             The Citizen-Register                              5,823       6,769  1847    1964     (16)
                Peekskill            The Star                                          6,481       8,070  1922    1985     (69)
                Port Chester         The Daily Item                                    8,734       9,369  1885    1964     (13)
                Tarrytown            The Daily News                                    3,280       3,701  1897    1964     (17)
                West Nyack-Rockland  Rockland Journal-News               39,346                   48,183  1850    1964     (10)
                White Plains         The Reporter Dispatch                            47,474      56,306  1829    1964      (9)
                Yonkers              The Herald Statesman                21,258                   26,646  1852    1964     (11)
North Carolina Asheville             Asheville Citizen-Times             60,501                   71,111  1870    1995     (79)
Ohio           Chillicothe           Chillicothe Gazette                              16,356              1800    1977     (52)
               Cincinnati            The Cincinnati Enquirer            201,720                  333,724  1841    1979     (56)
               Fremont               The News-Messenger                               13,968              1856    1975     (38)
               Gallipolis            Gallipolis Daily Tribune             5,535                   11,786  1893    1995     (80)
               Marietta              The Marietta Times                               12,715              1864    1974     (37)
               Pomeroy               The Daily Sentinel                                4,772              1941    1995     (81)
               Port Clinton          News Herald                                       5,902              1864    1975     (39)
Oklahoma       Muskogee              Muskogee Daily Phoenix
                                      and Times-Democrat                 19,361                   20,488  1888    1977     (50)
Oregon         Salem                 Statesman Journal                   60,204                   69,157  1851    1974     (36)
Pennsylvania   Chambersburg          Public Opinion                                   21,673              1869    1971     (24)
               Lansdale              The Reporter                                     19,697              1870    1980     (61)
South Carolina Greenville            The Greenville News                 97,607                  135,325  1874    1995     (82)
South Dakota   Sioux Falls           Argus Leader                        51,265                   73,116  1881    1977     (43)
Tennessee      Clarksville           The Leaf-Chronicle                  21,393                   25,374  1808    1995     (83)
               Jackson               The Jackson Sun                     39,955                   44,103  1848    1985     (68)
               Nashville             The Tennessean                     148,458                  278,159  1812    1979     (57)
Texas          El Paso               El Paso Times                       69,555                   97,657  1879    1972     (35)
Vermont        Burlington            The Burlington Free Press           52,692                   63,954  1827    1971     (23)
Virginia       Arlington             USA TODAY                        2,234,474                           1982    1982     (66)
               Staunton              The Daily News Leader               18,167                   22,164  1904    1995     (84)
Washington     Bellingham            The Bellingham Herald               26,883                   34,252  1890    1971     (31)
               Olympia               The Olympian                        38,615                   46,524  1889    1971     (29)
West Virginia  Huntington            The Herald-Dispatch                 38,769                   44,149  1909    1971     (32)
               Point Pleasant        Point Pleasant Register                           5,219              1862    1995     (85)
Wisconsin      Green Bay             Green Bay Press-Gazette                          57,958      86,682  1915    1980     (58)
               Wausau                Wausau Daily Herald                              24,513      31,734  1903    1980     (59)


* Number in parentheses notes chronological order in which existing newspapers joined Gannett.
</TABLE>


Army Times Publishing Co.
Headquarters:  Springfield, Va.
Publications:  Army Times, Navy Times, Navy Times Marine Corps edition,
               Air Force Times, Federal Times, Defense News, Space News,
               Military Market

Nursing Spectrum
Offices:  Annandale, Va. (serving Washington, D.C./Baltimore); Barrington,
          Ill. (serving Illinois and Indiana); Ft. Lauderdale, Fla.
          (serving Ft. Lauderdale and Tampa); King of Prussia, Pa. (serving
          Philadelphia); Westbury, N.Y. (serving New York and New Jersey);
          Lexington, Mass. (serving New England states)

                                    -68-, -69-, -70-

Non-daily publications:
Weekly, semi-weekly or monthly publications in Alabama,Arizona, Arkansas,
California, Colorado, Delaware, Florida, Georgia, Guam, Idaho,
Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Minnesota, Mississippi,
Missouri,Montana, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma,
Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont,
Virginia, Washington, West Virginia, Wisconsin

USA WEEKEND
Circulation 21.2 million in 526 newspapers
Headquarters:  Arlington, Va.
Advertising offices:  Chicago; Detroit; Los Angeles; New York; San Francisco

Gannett Media Technologies International
Cincinnati, Ohio

Gannett Offset
Headquarters:  Springfield, Va.
Offset sites:  Atlanta; Chandler, Ariz.; Minneapolis, Minn.; Miramar, Fla.;
Nashville, Tenn.; Norwood, Mass.; Olivette, Mo.; Pensacola, Fla.; Springfield,
Va.

Gannett Direct Marketing Services, Inc.
Louisville, Ky.

Gannett TeleMarketing, Inc.
Headquarters:  Springfield, Va.
Operations:  Cincinnati, Ohio; Louisville, Ky.; Nashville, Tenn.;
Silver Spring, Md.

Telematch
Springfield, Va

Gannett Retail Advertising Group
Chicago

Gannett New Media
Arlington, Va.
Functions:  New business opportunity and investment review and
management

Gannett Satellite Information Network
Arlington, Va.

Gannett News Service
Headquarters:  Arlington, Va.
Bureaus: Albany, N.Y.; Baton Rouge, La.; Columbus, Ohio; Harrisburg,
Pa.; Indianapolis, Ind.; Olympia, Wash.; Sacramento, Calif.;
Springfield, Ill.; Tallahassee, Fla.

USA TODAY

Headquarters: Arlington, Va.

Print sites:  Arlington, Texas; Atlanta; Batavia, N.Y.; Brevard
County, Fla.; Chandler, Ariz.; Chicago; Columbia, S.C.;
Fort Collins, Colo.; Fort Myers, Fla.; Gainesville, Ga.;
Greensboro, N.C.; Hattiesburg, Miss.; Kankakee, Ill.;
Lawrence, Kan.; Mansfield, Ohio; Marin County, Calif.;
Miramar, Fla.; Nashville, Tenn.; Newark, Ohio; Norwood, Mass.;
Olympia, Wash.; Pasadena, Texas; Port Huron, Mich.; Richmond, Ind.;
Rockaway, N.J.; St. Cloud, Minn.; St. Louis; Salt Lake City; San
Bernardino, Calif.; Springfield, Va.; Tarentum, Pa.; White Plains,
N.Y.; Wilmington, Del.

International print sites:  Frankfurt, Germany; Hong Kong;
London, England

Regional offices: Atlanta; Boston; Buffalo, N.Y.; Charlotte, N.C.;
Chicago; Cincinnati; Cleveland; Columbus, Ohio; Dallas; Denver;
Detroit; Houston; Indianapolis; Kansas City, Mo.; Los Angeles;
Milwaukee; Minneapolis-St. Paul; Miramar, Fla.; Mountainside, N.J.;
Nashville, Tenn.; New Orleans; Orlando, Fla.; Philadelphia;
Phoenix, Ariz.; Pittsburgh; Port Washington, N.Y.; St. Louis;
San Francisco; Seattle; Springfield, Va.

International offices:  Hong Kong; London, England; Paris, France; Singapore

Advertising offices:  Arlington, Va.; Atlanta; Chicago; Dallas;
Detroit; Hong Kong; London, England; Los Angeles; New York;
San Francisco

USA TODAY Baseball Weekly                Circulation 265,000
Editorial and advertising offices        Arlington, Va.

USA TODAY Information Network            Arlington, Va.

                                    -71-


<TABLE>
BROADCASTING AND CABLE DIVISIONS
Television stations
<CAPTION>
                                                                          **
                                                                       Weekly              Joined
     State               City            Station     Channel/Network   Audience   Founded  Gannett   *
- ---------------- --------------------- ------------ ----------------- ----------- -------- -------------
<S>              <C>                   <C>          <C>               <C>         <C>      <C>
Arizona          Flagstaff             KNAZ-TV      Channel 2/NBC         73,000  1970     1997     (17)
                 Kingman               KMOH-TV      Channel 6/WB           6,000  1988     1997     (18)
                 Phoenix               KPNX-TV      Channel 12/NBC     1,103,000  1953     1979      (3)
Arkansas         Little Rock           KTHV-TV      Channel 11/CBS       400,000  1955     1994      (9)
Colorado         Denver                KUSA-TV      Channel 9/NBC      1,267,000  1952     1979      (2)
District of
 Columbia        Washington            WUSA-TV      Channel 9/CBS      1,911,000  1949     1986      (5)
Florida          Jacksonville          WTLV-TV      Channel 12/NBC       438,000  1957     1988      (7)
                 Tampa-St. Petersburg  WTSP-TV      Channel 10/CBS     1,152,000  1965     1996     (14)
Georgia          Atlanta               WXIA-TV      Channel 11/NBC     1,493,000  1948     1979      (1)
                 Macon                 WMAZ-TV      Channel 13/CBS       207,000  1953     1995     (10)
Maine            Bangor                WLBZ-TV      Channel 2/NBC        132,000  1954     1998     (19)
                 Portland              WCSH-TV      Channel 6/NBC        359,000  1953     1998     (20)
Michigan         Grand Rapids          WZZM-TV      Channel 13/ABC       425,000  1962     1997     (15)
Minnesota        Minneapolis-St. Paul  KARE-TV      Channel 11/NBC     1,290,000  1953     1983      (4)
Missouri         St. Louis             KSDK-TV      Channel 5/NBC      1,087,000  1947     1995     (11)
New York         Buffalo               WGRZ-TV      Channel 2/NBC        543,000  1954     1997     (16)
North Carolina   Greensboro            WFMY-TV      Channel 2/CBS        518,000  1949     1988      (8)
Ohio             Cleveland             WKYC-TV      Channel 3/NBC      1,401,000  1948     1995     (12)
Tennessee        Knoxville             WBIR-TV      Channel 10/NBC       438,000  1956     1995     (13)
Texas            Austin                KVUE-TV      Channel 24/ABC       365,000  1971     1986      (6)


**Weekly audience for television stations is number of TV households reached, according
 to the November 1997 Nielsen book.
*Number in parentheses notes chronological order in which existing stations joined Gannett.

</TABLE>


Multimedia Cablevision Co.
Headquarters:  Wichita, Kan.
Regional offices:  Edmond, Okla.; Oak Lawn, Ill.; Rocky Mount, N.C.;
Wichita, Kan.


GANNETT ON THE NET

News and information about Gannett is available on our Web site -
www.gannett.com.  The following Gannett properties also offer online
services or informational sites on the Web:

USA TODAY
www.usatoday.com

USA WEEKEND
www.usaweekend.com

Asbury Park (N.J.) Press
www.injersey.com

Asheville (N.C.) Citizen Times
www.carolinamountains.com

Press & Sun Bulletin, Binghamton, N.Y.
www.pressconnects.com

FLORIDA TODAY, Brevard County
www.flatoday.com

The Cincinnati Enquirer
enquirer.com

The Des Moines Register
www.dmregister.com

The Detroit News
detnews.com

Home News Tribune, East Brunswick, N.J.
www.injersey.com

Star-Gazette, Elmira, N.Y.
www.star-gazette.com

News-Press, Fort Myers, Fla.
www.southwestfloridaonline.com

Green Bay (Wis.) Press-Gazette
www.greenbaypressgazette.com

The Greenville (S.C.) News
greenvilleonline.com

Journal and Courier, Lafayette, Ind.
www.jconline.com

Lansing (Mich.) State Journal
www.lansinglife.com

The Courier-Journal, Louisville, Ky.
www.courier-journal.com

Marin (County, Calif.) Independent Journal
www.marinij.com

The Tennessean, Nashville
www.tennessean.com

Pensacola (Fla.) News Journal
www.gulfcoastgateway.com

Poughkeepsie (N.Y.) Journal
www.pojonews.com

Reno (Nev.) Gazette-Journal
www.nevadanet.com

Rochester (N.Y.) Democrat and Chronicle
www.rochesterdandc.com

St. Cloud (Minn.) Times
www.sctimes.com

Argus Leader, Sioux Falls, S.D.
www.argusleader.com

Gannett Suburban Newspapers,
Westchester County, N.Y.
www.nynews.com

The News Journal, Wilmington, Del.
www.delewareonline.com

Army Times
www.armytimes.com

Navy Times
www.navytimes.com

Marine Corps Edition of Navy Times
www.navytimes.com/marinetimes

Air Force Times
www.airforcetimes.com

Federal Times
www.federaltimes.com

Defense News
www.defensenews.com

Space News
www.spacenews.com

Gannett Media Technologies International
www.gmti.com

Nursing Spectrum
www.nursingspectrum.com/index.htm

WXIA-TV, Atlanta
www.11alive.com

KVUE-TV, Austin, Texas
www.kvue.com

KUSA-TV, Denver
www.9news.com

WMAZ-TV, Macon, Ga.
www.13wmaz.com

KARE-TV, Minneapolis-St. Paul
www.kare11.com

WUSA-TV, Washington, D.C.
www.wusatv.com

WTSP-TV, Tampa-St.Petersburg, Fla.
www.wtsp.com

                                   -72-

Shareholder Services

Gannett stock
     Gannett Co., Inc. shares are traded on the New York Stock Exchange
with the symbol GCI.

     The Company's transfer agent and registrar is Norwest Bank Minnesota,
N.A. General inquiries and requests for enrollment materials for the
programs described below should be directed to Norwest's Stock Transfer
Department, P.O. Box 64854, St. Paul, MN 55164-0854 or by telephone at
1-800-778-3299.

Gannett is pleased to offer the following shareholder services:

Dividend reinvestment plan
     The Dividend Reinvestment Plan (DRP) provides Gannett shareholders the
opportunity to purchase additional shares of the Company's common stock free
of brokerage fees or service charges through automatic reinvestment of
dividends and optional cash payments.  Cash payments may range from a
minimum of $10 to a maximum of $5,000 per month.

Automatic cash investment service for the DRP
     This service provides a convenient, no-cost method of having money
automatically withdrawn from your checking or savings account each month
and invested in Gannett stock through your DRP account.

Direct deposit service
     Gannett shareholders may have their quarterly dividends electronically
credited to their checking or savings accounts on the payment date at no
additional cost.

Form 10-K
     Information provided by Gannett in its Form 10-K annual report to the
Securities and Exchange Commission has been incorporated in this report.
Copies of the complete Form 10-K annual report may be obtained by writing
the Secretary, Gannett Co., Inc., 1100 Wilson Blvd., Arlington, VA 22234.

Annual meeting
     The annual meeting of shareholders will be held at 10 a.m. Tuesday,
April 28, 1998 at Gannett headquarters.

For more information
     News and information about Gannett is available on our Web site
(www.gannnett.com). Quarterly earnings information will be available
around the middle of April, July and October 1998.
     Shareholders who wish to contact the Company directly about their
Gannett stock should call Shareholder Services at Gannett headquarters,
703-284-6960.

Gannett Headquarters
1100 Wilson Boulevard
Arlington, VA  22234
703-284-6000

Printed on Recycled Paper

                                  -73-




                   SUBSIDIARY LIST


                                                 STATE OF
        Unit                                   Incorporation

 ADVANCED MEDIA SOLUTIONS                        DELAWARE


 THE ADVERTISER COMPANY                          ALABAMA


 ARKANSAS TELEVISION COMPANY                     ARKANSAS


 ARMY TIMES PUBLISHING COMPANY                   DELAWARE


 ASBURY PARK PRESS INC.                          NEW JERSEY


 BAXTER COUNTY NEWSPAPERS, INC.                  ARKANSAS


 CALIFORNIA NEWSPAPERS, INC.                     CALIFORNIA


 CAPE PUBLICATIONS, INC.                         FLORIDA


 CHILDREN'S EDITION, INC.                        KENTUCKY


 CITIZEN PUBLISHING COMPANY                      ARIZONA


 COMBINED COMMUNICATIONS CORPORATION             ARIZONA


 COMBINED COMMUNICATIONS CORPORATION
   OF OKLAHOMA, INC.                             OKLAHOMA


 COURIER BROADWAY CORP.                          KENTUCKY


 COURIER-JOURNAL AND LOUISVILLE
    TIMES COMPANY                                KENTUCKY


 DES MOINES REGISTER AND
    TRIBUNE COMPANY                              IOWA


 THE DESERT SUN PUBLISHING COMPANY               CALIFORNIA


 THE DETROIT NEWS, INC.                          MICHIGAN


 DETROIT NEWSPAPER AGENCY                        MICHIGAN


 DIGICOL, INC.                                   DELAWARE


 EL PASO TIMES, INC.                             DELAWARE


 FEDERATED PUBLICATIONS, INC.                    DELAWARE


 FIRST COAST TOWER GROUP                         FLORIDA


 FORT COLLINS NEWSPAPERS INC.                    COLORADO


 GANNETT ACQUISITION SUBSIDIARY, INC.            DELAWARE


 GANNETT COLORADO BROADCASTING, INC.             DELAWARE


 GANNETT CP, INC.                                DELAWARE


 GANNETT DIRECT MARKETING SERVICES, INC.         KENTUCKY


 GANNETT HAWAII, INC.                            HAWAII


 GANNETT INTERNATIONAL COMMUNICATIONS, INC.      DELAWARE


 GANNETT MASSACHUSETTS SUPPLY
 CORP.              MASSACHUSETTS


 GANNETT MINNESOTA BROADCASTING, INC.            DELAWARE


 GANNETT NATIONAL NEWSPAPER SALES, INC.          DELAWARE


 GANNETT ON-LINE INVESTOR, INC.                  DELAWARE


 GANNETT ON-LINE PARTNER, LLC                    DELAWARE


 GANNETT OUTDOOR CO. OF TEXAS                    TEXAS


 GANNETT PACIFIC CORPORATION                     HAWAII


 GANNETT RIVER STATES PUBLISHING CORPORATION     ARKANSAS


 GANNETT SATELLITE INFORMATION NETWORK, INC.     DELAWARE


 GANNETT SUPPLY CORPORATION                      DELAWARE


 GANNETT TELEMARKETING, INC.                     DELAWARE


 GANSAT ACQUISITION SUBSIDIARY, INC.             DELAWARE


 GUAM PUBLICATIONS, INCORPORATED                 HAWAII


 HAWAII NEWSPAPER AGENCY LIMITED PARTNERSHIP     DELAWARE


 KPNX BROADCASTING COMPANY                       ARIZONA


 KVUE-TV, INC.                                   MICHIGAN


 LAKE CEDAR GROUP LLC                            DELAWARE


 LEAF CHRONICLE COMPANY, INC.                    TENNESSEE


 MACON RADIO CORPORATION                         DELAWARE


 MARY MORGAN, INC.                               WISCONSIN


 MCCLURE NEWSPAPERS, INC.                        DELAWARE


 MEDIA WEST - ATP, INC.                          DELAWARE


 MEDIA WEST - BCN, INC.                          DELAWARE


 MEDIA WEST - CNI, INC.                          DELAWARE


 MEDIA WEST - CPI, INC.                          DELAWARE


 MEDIA WEST - DMR, INC.                          DELAWARE


 MEDIA WEST - DSP, INC.                          DELAWARE


 MEDIA WEST - EPT, INC.                          DELAWARE


 MEDIA WEST - FCN, INC.                          DELAWARE


 MEDIA WEST - FPI, INC.                          DELAWARE


 MEDIA WEST - GRS, INC.                          DELAWARE


 MEDIA WEST - GSI, INC.                          DELAWARE


 MEDIA WEST - LCC, INC.                          DELAWARE


 MEDIA WEST - LCJ, INC.                          DELAWARE


 MEDIA WEST - MCN, INC.                          DELAWARE


 MEDIA WEST - MMI, INC.                          DELAWARE


 MEDIA WEST - MNC, INC.                          DELAWARE


 MEDIA WEST - MSC, INC.                          DELAWARE


 MEDIA WEST - NJP, INC.                          DELAWARE


 MEDIA WEST - NPP, INC.                          DELAWARE


 MEDIA WEST - OPP, INC.                          DELAWARE


 MEDIA WEST - OVP, INC.                          DELAWARE


 MEDIA WEST - PCC, INC.                          DELAWARE


 MEDIA WEST - PNJ, INC.                          DELAWARE


 MEDIA WEST - PPR, INC.                          DELAWARE


 MEDIA WEST - RDC, INC.                          DELAWARE


 MEDIA WEST - RNI, INC.                          DELAWARE


 MEDIA WEST - SBC, INC.                          DELAWARE


 MEDIA WEST - SCN, INC.                          DELAWARE


 MEDIA WEST - SFN, INC.                          DELAWARE


 MEDIA WEST - SJC, INC.                          DELAWARE


 MEDIA WEST - SNI, INC.                          DELAWARE


 MEDIA WEST - SPC, INC.                          DELAWARE


 MEDIA WEST - STI, INC.                          DELAWARE


 MEDIA WEST - TAC, INC.                          DELAWARE


 MEDIA WEST - THC, INC.                          DELAWARE


 MEDIA WEST - UWI, INC.                          DELAWARE


 MEDIA WEST - VNI, INC.                          DELAWARE


 MULTIMEDIA, INC.                                SOUTH CAROLINA


 MULTIMEDIA CABLEVISION, INC.                    SOUTH CAROLINA


 MULTIMEDIA CABLEVISION OF BATAVIA, INC.         ILLINOIS


 MULTIMEDIA CABLEVISION OF CHICAGO RIDGE, INC.   ILLINOIS


 MULTIMEDIA CABLEVISION OF EVERGREEN
    PARK, INC.                                   ILLINOIS


 MULTIMEDIA CABLEVISION OF HOMETOWN, INC.        ILLINOIS


 MULTIMEDIA CABLEVISION OF ILLINOIS, INC.        ILLINOIS


 MULTIMEDIA CABLEVISION OF MIDWEST CITY, INC.    OKLAHOMA


 MULTIMEDIA OF CINCINNATI, INC.                  OHIO


 MULTIMEDIA ENTERPRISE, INC.                     SOUTH CAROLINA


 MULTIMEDIA ENTERTAINMENT, INC.                  SOUTH CAROLINA


 MULTIMEDIA KSDK, INC.                           SOUTH CAROLINA


 MULTIMEDIA PUBLISHING OF NORTH CAROLINA,
     INC.                                        SOUTH CAROLINA


 MULTIMEDIA PUBLISHING OF SOUTH CAROLINA,
      INC.                                       SOUTH CAROLINA


 MULTIMEDIA SECURITY SERVICE, INC.               SOUTH CAROLINA


 MULTIMEDIA SERVICE, INC.                        DELAWARE


 MULTIMEDIA TELECOMMUNICATIONS, INC.             SOUTH CAROLINA


 MULTIMEDIA WBIR, INC.                           SOUTH CAROLINA


 MULTIMEDIA WMAZ, INC.                           SOUTH CAROLINA


 MUSIC CITY NEWS PUBLISHING CO., INC.            TENNESSEE


 NEW JERSEY PRESS, INC.                          NEW JERSEY


 NEWS-PRESS PUBLISHING COMPANY                   FLORIDA


 NORTH COAST PUBLISHERS, INC.                    CALIFORNIA


 THE OHIO VALLEY PUBLISHING COMPANY              OHIO


 OKLAHOMA PRESS PUBLISHING COMPANY               OKLAHOMA


 PACIFIC MEDIA, INC.                             DELAWARE


 PACIFIC AND SOUTHERN COMPANY, INC.              DELAWARE


 PENSACOLA NEWS-JOURNAL INC.                     FLORIDA


 POINT PLEASANT REGISTER COMPANYWEST             VIRGINIA


 PRESS BROADCASTING COMPANY                      NEW JERSEY


 PRESS-CITIZEN COMPANY INC.                      IOWA


 RED CARPET CABLE, INC.                          OKLAHOMA


 RENO NEWSPAPERS, INC.                           NEVADA


 ST. CLOUD NEWSPAPERS INC.                       MINNESOTA


 SALEM COUNTY SAMPLER, INC.                      NEW JERSEY


 SALINAS NEWSPAPERS INC.                         CALIFORNIA


 SHELTER MEDIA COMMUNICATIONS, INC.              CALIFORNIA


 SHINY ROCK MINING CORPORATION                   OREGON


 SIOUX FALLS NEWSPAPERS INC.                     SOUTH DAKOTA


 SOUTHLAND PUBLISHING COMPANY                    DELAWARE


 SPEIDEL NEWSPAPERS INC.                         DELAWARE


 THE STATESMAN-JOURNAL COMPANY                   OREGON


 SUMNER TIMES, INC.                              TENNESSEE


 THE SUN COMPANY OF SAN BERNARDINO,
   CALIFORNIA                                    CALIFORNIA


 TAR RIVER COMMUNICATIONS, INC.                  NORTH CAROLINA


 TELEVISION 12 OF JACKSONVILLE, INC.             FLORIDA


 THE TIMES HERALD COMPANY                        MICHIGAN


 THE TIMES JOURNAL CO. FSC, INC.                 VIRGIN ISLANDS


 TNI PARTNERS                                    ARIZONA


 USA DIGITAL RADIO PARTNERS, L.P.                NEW YORK


 USA TODAY INTERNATIONAL CORPORATION             DELAWARE


 USA WEEKEND, INC.                               DELAWARE


 VISALIA NEWSPAPERS INC.                         CALIFORNIA


 WFMY TELEVISION CORP.                           NORTH CAROLINA


 WKYC HOLDINGS, INC.                             DELAWARE


 WKYC-TV, INC.                                   DELAWARE




                                                        Exhibit 23


                CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statements on Form S-3
(Nos. 33-63673, 33-58686 and 33-53159) and in the Registration Statements
on Form S-8 (Nos. 2-63038, 2-84088, 33-15319, 33-16790, 33-28413, 33-35305,
33-50813, 33-64959, 333-04459 and 333-03941) of Gannett Co., Inc. of our
report dated February 2, 1998 appearing on page 49 of the Annual Report to
Shareholders which is incorporated in this Annual Report on Form 10-K.
We also consent to the incorporation by reference of our report on the
Financial Statement Schedules, which appears on page 8 of this Form 10-K.


/s/ Price Waterhouse LLP
________________________________
PRICE WATERHOUSE LLP


Washington, D.C.
March 23, 1998







<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from the consolidated balance sheets and
statements of income for Gannett Co., Inc. and is
qualified in its entirety by reference to such
financial statements.
</LEGEND>
       
<S>                                     <C>
<PERIOD-TYPE>                           YEAR
<FISCAL-YEAR-END>                             DEC-28-1997
<PERIOD-START>                                DEC-30-1996
<PERIOD-END>                                  DEC-28-1997
<CASH>                                         45,059,000
<SECURITIES>                                    7,719,000
<RECEIVABLES>                                 656,331,000
<ALLOWANCES>                                   18,020,000
<INVENTORY>                                   101,080,000
<CURRENT-ASSETS>                              884,634,000
<PP&E>                                      3,754,837,000
<DEPRECIATION>                              1,562,795,000
<TOTAL-ASSETS>                              6,890,351,000
<CURRENT-LIABILITIES>                         767,501,000
<BONDS>                                                 0
<COMMON>                                      324,421,000
<PREFERRED-MANDATORY>                                   0
<PREFERRED>                                             0
<OTHER-SE>                                  3,155,315,000
<TOTAL-LIABILITY-AND-EQUITY>                6,890,351,000
<SALES>                                     4,729,491,000
<TOTAL-REVENUES>                            4,729,491,000
<CGS>                                       2,368,572,000
<TOTAL-COSTS>                               3,413,223,000
<OTHER-EXPENSES>                               15,564,000
<LOSS-PROVISION>                                        0
<INTEREST-EXPENSE>                             98,242,000
<INCOME-PRETAX>                             1,208,979,000
<INCOME-TAX>                                  496,300,000
<INCOME-CONTINUING>                           712,679,000
<DISCONTINUED>                                          0
<EXTRAORDINARY>                                         0
<CHANGES>                                               0
<NET-INCOME>                                  712,679,000
<EPS-PRIMARY>                                        2.52
<EPS-DILUTED>                                        2.50

        

</TABLE>