10-Q 1 gci-20220331.htm 10-Q gci-20220331
0001579684false2022Q112/31TrueP1M.2000015796842022-01-012022-03-310001579684us-gaap:CommonStockMember2022-01-012022-03-310001579684gci:PreferredStockPurchaseRightsMember2022-01-012022-03-3100015796842022-05-02xbrli:shares00015796842022-03-31iso4217:USD00015796842021-12-31iso4217:USDxbrli:shares0001579684us-gaap:SeriesAPreferredStockMember2021-12-310001579684us-gaap:SeriesAPreferredStockMember2022-03-310001579684gci:AdvertisingandMarketingMember2022-01-012022-03-310001579684gci:AdvertisingandMarketingMember2021-01-012021-03-310001579684gci:CirculationMember2022-01-012022-03-310001579684gci:CirculationMember2021-01-012021-03-310001579684gci:OtherRevenueMember2022-01-012022-03-310001579684gci:OtherRevenueMember2021-01-012021-03-3100015796842021-01-012021-03-3100015796842020-12-3100015796842021-03-310001579684us-gaap:CommonStockMember2021-12-310001579684us-gaap:AdditionalPaidInCapitalMember2021-12-310001579684us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001579684us-gaap:RetainedEarningsMember2021-12-310001579684us-gaap:TreasuryStockMember2021-12-310001579684us-gaap:NoncontrollingInterestMember2021-12-310001579684us-gaap:RetainedEarningsMember2022-01-012022-03-310001579684us-gaap:NoncontrollingInterestMember2022-01-012022-03-310001579684us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001579684us-gaap:CommonStockMember2022-01-012022-03-310001579684us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001579684us-gaap:TreasuryStockMember2022-01-012022-03-310001579684us-gaap:CommonStockMember2022-03-310001579684us-gaap:AdditionalPaidInCapitalMember2022-03-310001579684us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001579684us-gaap:RetainedEarningsMember2022-03-310001579684us-gaap:TreasuryStockMember2022-03-310001579684us-gaap:NoncontrollingInterestMember2022-03-310001579684us-gaap:CommonStockMember2020-12-310001579684us-gaap:AdditionalPaidInCapitalMember2020-12-310001579684us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001579684us-gaap:RetainedEarningsMember2020-12-310001579684us-gaap:TreasuryStockMember2020-12-310001579684us-gaap:NoncontrollingInterestMember2020-12-310001579684us-gaap:RetainedEarningsMember2021-01-012021-03-310001579684us-gaap:CommonStockMember2021-01-012021-03-310001579684us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001579684us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001579684us-gaap:TreasuryStockMember2021-01-012021-03-310001579684us-gaap:CommonStockMember2021-03-310001579684us-gaap:AdditionalPaidInCapitalMember2021-03-310001579684us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001579684us-gaap:RetainedEarningsMember2021-03-310001579684us-gaap:TreasuryStockMember2021-03-310001579684us-gaap:NoncontrollingInterestMember2021-03-31gci:stategci:brandsgci:segment0001579684us-gaap:ConvertibleDebtMembergci:TwentyTwentySevenNotesMember2020-11-17xbrli:pure0001579684gci:NewSeniorSecuredTermLoanMembergci:SeniorSecuredTermLoanMember2021-10-152021-10-150001579684gci:NewSeniorSecuredTermLoanMembergci:SeniorSecuredTermLoanMember2021-10-150001579684gci:PrintMember2022-01-012022-03-310001579684gci:PrintMember2021-01-012021-03-310001579684gci:DigitalAdvertisingandMarketingServicesMember2022-01-012022-03-310001579684gci:DigitalAdvertisingandMarketingServicesMember2021-01-012021-03-310001579684us-gaap:AdvertisingMember2022-01-012022-03-310001579684us-gaap:AdvertisingMember2021-01-012021-03-310001579684us-gaap:NonUsMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2022-01-012022-03-310001579684us-gaap:NonUsMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-01-012021-03-310001579684gci:CustomerSubscriptionMembersrt:MinimumMember2022-04-012022-03-310001579684srt:MaximumMembergci:CustomerSubscriptionMember2023-04-012022-03-310001579684gci:AdvertisingMarketingServicesandOtherMember2021-12-310001579684gci:CirculationMember2021-12-310001579684gci:AdvertisingMarketingServicesandOtherMember2020-12-310001579684gci:CirculationMember2020-12-310001579684gci:AdvertisingMarketingServicesandOtherMember2022-01-012022-03-310001579684gci:AdvertisingMarketingServicesandOtherMember2021-01-012021-03-310001579684gci:AdvertisingMarketingServicesandOtherMember2022-03-310001579684gci:CirculationMember2022-03-310001579684gci:AdvertisingMarketingServicesandOtherMember2021-03-310001579684gci:CirculationMember2021-03-310001579684gci:AdvertiserRelationshipsMember2022-03-310001579684gci:AdvertiserRelationshipsMember2021-12-310001579684us-gaap:CustomerRelationshipsMember2022-03-310001579684us-gaap:CustomerRelationshipsMember2021-12-310001579684gci:SubscriberRelationshipsMember2022-03-310001579684gci:SubscriberRelationshipsMember2021-12-310001579684us-gaap:OtherIntangibleAssetsMember2022-03-310001579684us-gaap:OtherIntangibleAssetsMember2021-12-310001579684gci:MastheadsMember2022-03-310001579684gci:MastheadsMember2021-12-310001579684gci:PublishingSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:EmployeeSeveranceMember2022-01-012022-03-310001579684gci:PublishingSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:EmployeeSeveranceMember2021-01-012021-03-310001579684us-gaap:OperatingSegmentsMembergci:DigitalMarketingSolutionsSegmentMemberus-gaap:EmployeeSeveranceMember2022-01-012022-03-310001579684us-gaap:OperatingSegmentsMembergci:DigitalMarketingSolutionsSegmentMemberus-gaap:EmployeeSeveranceMember2021-01-012021-03-310001579684us-gaap:CorporateNonSegmentMemberus-gaap:EmployeeSeveranceMember2022-01-012022-03-310001579684us-gaap:CorporateNonSegmentMemberus-gaap:EmployeeSeveranceMember2021-01-012021-03-310001579684us-gaap:EmployeeSeveranceMember2022-01-012022-03-310001579684us-gaap:EmployeeSeveranceMember2021-01-012021-03-310001579684us-gaap:EmployeeSeveranceMember2021-12-310001579684us-gaap:EmployeeSeveranceMember2022-03-310001579684gci:PublishingSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:FacilityClosingMember2022-01-012022-03-310001579684gci:PublishingSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:FacilityClosingMember2021-01-012021-03-310001579684us-gaap:OperatingSegmentsMembergci:DigitalMarketingSolutionsSegmentMemberus-gaap:FacilityClosingMember2022-01-012022-03-310001579684us-gaap:OperatingSegmentsMembergci:DigitalMarketingSolutionsSegmentMemberus-gaap:FacilityClosingMember2021-01-012021-03-310001579684us-gaap:CorporateNonSegmentMemberus-gaap:FacilityClosingMember2022-01-012022-03-310001579684us-gaap:CorporateNonSegmentMemberus-gaap:FacilityClosingMember2021-01-012021-03-310001579684us-gaap:FacilityClosingMember2022-01-012022-03-310001579684us-gaap:FacilityClosingMember2021-01-012021-03-310001579684gci:NewSeniorSecuredTermLoanMembergci:SeniorSecuredTermLoanMember2022-03-310001579684gci:NewSeniorSecuredTermLoanMembergci:SeniorSecuredTermLoanMember2021-12-310001579684gci:SeniorSecuredTermLoanMembergci:TwentyTwentySixNotesMember2022-03-310001579684gci:SeniorSecuredTermLoanMembergci:TwentyTwentySixNotesMember2021-12-310001579684us-gaap:ConvertibleDebtMembergci:TwentyTwentySevenNotesMember2022-03-310001579684us-gaap:ConvertibleDebtMembergci:TwentyTwentySevenNotesMember2021-12-310001579684us-gaap:ConvertibleDebtMembergci:TwentyTwentyFourNotesMember2022-03-310001579684us-gaap:ConvertibleDebtMembergci:TwentyTwentyFourNotesMember2021-12-310001579684gci:SeniorSecuredTermLoanMembergci:IncrementalTermLoansMember2022-01-310001579684gci:ShareRepurchaseProgramMembergci:SeniorSecuredTermLoanMembergci:IncrementalTermLoansMember2022-01-310001579684gci:SecondTermLoanAmendmentMembergci:SeniorSecuredTermLoanMember2022-03-310001579684srt:MinimumMembergci:NewSeniorSecuredTermLoanMembergci:SeniorSecuredTermLoanMember2021-10-150001579684gci:NewSeniorSecuredTermLoanMembergci:SeniorSecuredTermLoanMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2021-10-152021-10-150001579684us-gaap:BaseRateMembergci:NewSeniorSecuredTermLoanMembergci:SeniorSecuredTermLoanMember2021-10-152021-10-150001579684srt:ScenarioForecastMemberus-gaap:SubsequentEventMembergci:NewSeniorSecuredTermLoanMembergci:SeniorSecuredTermLoanMember2022-06-30gci:plan0001579684gci:NewSeniorSecuredTermLoanMembergci:SeniorSecuredTermLoanMembergci:DebtCovenantRangeOneMember2021-10-15gci:pure0001579684gci:NewSeniorSecuredTermLoanMembergci:SeniorSecuredTermLoanMembergci:DebtCovenantRangeTwoMember2021-10-150001579684gci:DebtCovenantRangeThreeMembergci:NewSeniorSecuredTermLoanMembergci:SeniorSecuredTermLoanMember2021-10-150001579684gci:NewSeniorSecuredTermLoanMembergci:SeniorSecuredTermLoanMember2022-01-012022-03-310001579684gci:SeniorSecuredTermLoanMembergci:TwentyTwentySixNotesMember2021-10-150001579684us-gaap:DebtInstrumentRedemptionPeriodOneMemberus-gaap:SeniorNotesMembergci:TwentyTwentySixNotesMember2021-10-152021-10-150001579684us-gaap:SeniorNotesMembergci:TwentyTwentySixNotesMemberus-gaap:DebtInstrumentRedemptionPeriodTwoMember2021-10-152021-10-150001579684us-gaap:SeniorNotesMembergci:TwentyTwentySixNotesMember2022-01-012022-03-310001579684us-gaap:SeniorNotesMembergci:TwentyTwentySixNotesMember2022-03-310001579684us-gaap:ConvertibleDebtMembergci:TwentyTwentySixNotesMember2022-03-310001579684us-gaap:ConvertibleDebtMemberus-gaap:ScenarioPlanMembergci:TwentyTwentySevenNotesMember2020-11-170001579684us-gaap:ConvertibleDebtMembergci:TwentyTwentySevenNotesMember2021-11-300001579684us-gaap:ConvertibleDebtMemberus-gaap:DebtInstrumentRedemptionPeriodOneMembergci:TwentyTwentySevenNotesMember2020-11-172020-11-170001579684us-gaap:ConvertibleDebtMemberus-gaap:DebtInstrumentRedemptionPeriodOneMembergci:TwentyTwentySevenNotesMember2020-11-170001579684us-gaap:ConvertibleDebtMemberus-gaap:DebtInstrumentRedemptionPeriodTwoMembergci:TwentyTwentySevenNotesMember2020-11-172020-11-170001579684us-gaap:ConvertibleDebtMemberus-gaap:DebtInstrumentRedemptionPeriodTwoMembergci:TwentyTwentySevenNotesMember2020-11-170001579684us-gaap:ConvertibleDebtMembergci:TwentyTwentySevenNotesMember2022-01-012022-03-310001579684us-gaap:ConvertibleDebtMembergci:TwentyTwentySevenNotesMember2021-01-012021-03-310001579684us-gaap:ConvertibleDebtMembergci:TwentyTwentySevenNotesMember2021-03-310001579684us-gaap:ConvertibleDebtMembergci:TwentyTwentySevenNotesMember2020-11-172020-11-170001579684us-gaap:PensionPlansDefinedBenefitMember2022-01-012022-03-310001579684us-gaap:PensionPlansDefinedBenefitMember2021-01-012021-03-310001579684us-gaap:PostemploymentRetirementBenefitsMember2022-01-012022-03-310001579684us-gaap:PostemploymentRetirementBenefitsMember2021-01-012021-03-310001579684us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2022-01-012022-03-310001579684srt:ScenarioForecastMemberus-gaap:PensionPlansDefinedBenefitMemberus-gaap:SubsequentEventMembercountry:US2021-01-012022-09-300001579684us-gaap:FairValueMeasurementsNonrecurringMember2022-03-310001579684us-gaap:FairValueMeasurementsNonrecurringMember2021-12-310001579684us-gaap:WarrantMember2022-01-012022-03-310001579684us-gaap:WarrantMember2021-01-012021-03-310001579684us-gaap:StockOptionMember2022-01-012022-03-310001579684us-gaap:StockOptionMember2021-01-012021-03-310001579684us-gaap:RestrictedStockMember2022-01-012022-03-310001579684us-gaap:RestrictedStockMember2021-01-012021-03-310001579684us-gaap:ConvertibleDebtSecuritiesMember2022-01-012022-03-310001579684us-gaap:ConvertibleDebtSecuritiesMember2021-01-012021-03-310001579684gci:RestrictedStockAwardsMember2022-01-012022-03-310001579684us-gaap:ShareBasedCompensationAwardTrancheOneMember2022-01-012022-03-310001579684us-gaap:ShareBasedCompensationAwardTrancheTwoMember2022-01-012022-03-310001579684us-gaap:ShareBasedCompensationAwardTrancheThreeMember2022-01-012022-03-310001579684us-gaap:PhantomShareUnitsPSUsMember2022-01-012022-03-3100015796842022-02-010001579684us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-12-310001579684us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310001579684us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-310001579684us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310001579684us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-01-012022-03-310001579684us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-03-310001579684us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-03-310001579684us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-03-310001579684us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-03-310001579684us-gaap:AccumulatedTranslationAdjustmentMember2022-03-310001579684us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-03-310001579684us-gaap:AccumulatedTranslationAdjustmentMember2021-03-310001579684gci:PublishingSegmentMember2022-01-012022-03-310001579684gci:PublishingSegmentMemberus-gaap:OperatingSegmentsMembergci:AdvertisingandMarketingMember2022-01-012022-03-310001579684us-gaap:OperatingSegmentsMembergci:AdvertisingandMarketingMembergci:DigitalMarketingSolutionsSegmentMember2022-01-012022-03-310001579684us-gaap:CorporateNonSegmentMembergci:AdvertisingandMarketingMember2022-01-012022-03-310001579684gci:PublishingSegmentMembergci:AdvertisingandMarketingMemberus-gaap:IntersegmentEliminationMember2022-01-012022-03-310001579684gci:AdvertisingandMarketingMemberus-gaap:IntersegmentEliminationMember2022-01-012022-03-310001579684gci:CirculationMembergci:PublishingSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310001579684gci:CirculationMemberus-gaap:OperatingSegmentsMembergci:DigitalMarketingSolutionsSegmentMember2022-01-012022-03-310001579684gci:CirculationMemberus-gaap:CorporateNonSegmentMember2022-01-012022-03-310001579684gci:PublishingSegmentMemberus-gaap:OperatingSegmentsMembergci:OtherRevenueMember2022-01-012022-03-310001579684us-gaap:OperatingSegmentsMembergci:OtherRevenueMembergci:DigitalMarketingSolutionsSegmentMember2022-01-012022-03-310001579684us-gaap:CorporateNonSegmentMembergci:OtherRevenueMember2022-01-012022-03-310001579684gci:PublishingSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310001579684us-gaap:OperatingSegmentsMembergci:DigitalMarketingSolutionsSegmentMember2022-01-012022-03-310001579684us-gaap:CorporateNonSegmentMember2022-01-012022-03-310001579684us-gaap:IntersegmentEliminationMember2022-01-012022-03-310001579684gci:PublishingSegmentMemberus-gaap:OperatingSegmentsMembergci:AdvertisingandMarketingMember2021-01-012021-03-310001579684us-gaap:OperatingSegmentsMembergci:AdvertisingandMarketingMembergci:DigitalMarketingSolutionsSegmentMember2021-01-012021-03-310001579684us-gaap:CorporateNonSegmentMembergci:AdvertisingandMarketingMember2021-01-012021-03-310001579684gci:PublishingSegmentMembergci:AdvertisingandMarketingMemberus-gaap:IntersegmentEliminationMember2021-01-012021-03-310001579684gci:AdvertisingandMarketingMemberus-gaap:IntersegmentEliminationMember2021-01-012021-03-310001579684gci:CirculationMembergci:PublishingSegmentMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310001579684gci:CirculationMemberus-gaap:OperatingSegmentsMembergci:DigitalMarketingSolutionsSegmentMember2021-01-012021-03-310001579684gci:CirculationMemberus-gaap:CorporateNonSegmentMember2021-01-012021-03-310001579684gci:PublishingSegmentMemberus-gaap:OperatingSegmentsMembergci:OtherRevenueMember2021-01-012021-03-310001579684us-gaap:OperatingSegmentsMembergci:OtherRevenueMembergci:DigitalMarketingSolutionsSegmentMember2021-01-012021-03-310001579684us-gaap:CorporateNonSegmentMembergci:OtherRevenueMember2021-01-012021-03-310001579684gci:PublishingSegmentMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310001579684us-gaap:OperatingSegmentsMembergci:DigitalMarketingSolutionsSegmentMember2021-01-012021-03-310001579684us-gaap:CorporateNonSegmentMember2021-01-012021-03-310001579684us-gaap:IntersegmentEliminationMember2021-01-012021-03-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 10-Q
_______________________

    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022

    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-36097
___________________________
GANNETT CO., INC.
(Exact name of registrant as specified in its charter)
___________________________
Delaware38-3910250
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
7950 Jones Branch Drive,McLean,Virginia22107-0910
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (703854-6000
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, par value $0.01 per shareGCIThe New York Stock Exchange
Preferred Stock Purchase RightsN/AThe New York Stock Exchange
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 No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
Accelerated Filer
Non-Accelerated Filer
Smaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes No
As of May 2, 2022, 146,591,116 shares of the registrant's Common Stock were outstanding.







CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our current views regarding, among other things, our future growth, results of operations, performance, business prospects and opportunities, and our environmental, social and governance goals, and are not statements of historical fact. Words such as "anticipate(s)," "expect(s)," "intend(s)," "plan(s)," "project(s)," "believe(s)," "forecast," "will," "aim," "would," "seek(s)," "estimate(s)" and similar expressions are intended to identify such forward-looking statements.

Forward-looking statements are based on management’s current expectations and beliefs and are subject to a number of known and unknown risks, uncertainties, and other factors that could lead to actual results materially different from those described in the forward-looking statements. We can give no assurance our expectations will be attained. Our actual results, liquidity, and financial condition may differ from the anticipated results, liquidity, and financial condition indicated in the forward-looking statements. Forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause our actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others:

General economic and market conditions;
Global hostilities and any resulting effects and uncertainties;
The competitive environment in which we operate;
Risks and uncertainties associated with the ongoing COVID-19 pandemic;
Economic conditions in the various regions of the United States, the United Kingdom, and other regions in which we operate our business;
The shift within the publishing industry from traditional print media to digital forms of publication;
Risks and uncertainties associated with our Digital Marketing Solutions segment, including its significant reliance on Google for media purchases, its international operations, and its ability to develop and gain market acceptance for new products or services;
Declining print advertising revenue and circulation subscribers;
Our ability to grow our digital marketing services initiatives, digital audience, and advertiser base;
Our ability to grow our business organically;
Variability in the exchange rate relative to the U.S. dollar of currencies in foreign jurisdictions in which we operate;
Our ability to realize the anticipated benefits of our acquisitions;
The availability and cost of capital for future investments;
Our indebtedness may restrict our operations and/or require us to dedicate a portion of cash flow from operations to payments associated with our debt;
Our current intention not to pay dividends and our ability to pay dividends in the future, if at all;
Our ability to reduce costs and expenses;
Our ability to maintain proper and effective internal control over financial reporting;
Our ability to recruit and retain key personnel; and
Any shortage of skilled or experienced employees with the capabilities necessary to support our business strategies, or our inability to retain such employees.

Additional risk factors that could cause actual results to differ materially from our expectations include, but are not limited to, the risks identified by us under the heading "Risk Factors" in this Quarterly Report on Form 10-Q, under the heading "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission (the "SEC") on February 24, 2022, and the statements made in subsequent filings. Such forward-looking statements speak only as of the date they are made. Except to the extent required by law, we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or change in events, conditions, or circumstances on which any statement is based.




INDEX TO GANNETT CO., INC.
Q1 2022 FORM 10-Q
 



PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

GANNETT CO., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands, except share dataMarch 31, 2022December 31, 2021
Assets(Unaudited)
Current assets:
Cash and cash equivalents$152,191 $130,756 
Accounts receivable, net of allowance for doubtful accounts of $11,566 and $16,470 as of March 31, 2022 and December 31, 2021, respectively
293,462 328,733 
Inventories37,144 37,662 
Prepaid expenses and other current assets79,548 80,110 
Total current assets562,345 577,261 
Property, plant and equipment, net of accumulated depreciation of $346,271 and $336,500 as of March 31, 2022 and December 31, 2021, respectively
388,367 415,384 
Operating lease assets263,980 271,935 
Goodwill540,894 533,709 
Intangible assets, net694,521 713,153 
Deferred tax assets25,802 32,399 
Pension and other assets307,534 284,228 
Total assets $2,783,443 $2,828,069 
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities$346,368 $357,014 
Deferred revenue185,579 184,838 
Current portion of long-term debt62,860 69,456 
Other current liabilities46,997 51,218 
Total current liabilities641,804 662,526 
Long-term debt783,010 769,446 
Convertible debt396,297 393,354 
Deferred tax liabilities11,711 28,812 
Pension and other postretirement benefit obligations69,687 71,937 
Long-term operating lease liabilities247,487 254,969 
Other long-term liabilities118,721 117,410 
Total noncurrent liabilities1,626,913 1,635,928 
Total liabilities 2,268,717 2,298,454 
Commitments and contingent liabilities (See Note 11)
Equity
Preferred stock, $0.01 par value per share, 300,000 shares authorized, of which 150,000 shares are designated as Series A Junior Participating Preferred Stock, none of which were issued and outstanding at March 31, 2022 and December 31, 2021
  
Common stock, $0.01 par value per share, 2,000,000,000 shares authorized, 151,016,595 shares issued and 147,828,491 shares outstanding at March 31, 2022; 144,667,389 shares issued and 142,299,399 shares outstanding at December 31, 2021
1,510 1,446 
Treasury stock, at cost, 3,188,104 shares and 2,367,990 shares at March 31, 2022 and December 31, 2021, respectively
(11,290)(8,151)
Additional paid-in capital1,397,516 1,400,206 
Accumulated deficit(924,366)(921,399)
Accumulated other comprehensive income51,607 59,998 
Total Gannett stockholders equity514,977 532,100 
Noncontrolling interests(251)(2,485)
Total equity514,726 529,615 
Total liabilities and equity$2,783,443 $2,828,069 
The accompanying notes are an integral part of these condensed consolidated financial statements.
2

GANNETT CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three months ended March 31,
In thousands, except per share amounts20222021
Advertising and marketing services$375,114 $388,357 
Circulation288,602 325,437 
Other84,361 63,290 
Total operating revenues748,077 777,084 
Operating costs469,885 477,798 
Selling, general and administrative expenses221,837 203,684 
Depreciation and amortization47,783 58,103 
Integration and reorganization costs11,398 13,404 
Asset impairments854 833 
(Gain) loss on sale or disposal of assets, net(2,804)4,745 
Other operating expenses1,102 10,576 
Total operating expenses750,055 769,143 
Operating income (loss)(1,978)7,941 
Interest expense26,006 39,503 
Loss on early extinguishment of debt2,743 19,401 
Non-operating pension income(18,213)(23,878)
Loss on convertible notes derivative 126,600 
Other non-operating income, net(1,805)(1,875)
Non-operating expenses8,731 159,751 
Loss before income taxes(10,709)(151,810)
Benefit for income taxes(7,607)(9,109)
Net loss(3,102)(142,701)
Net loss attributable to noncontrolling interests(a)
(135)(385)
Net loss attributable to Gannett$(2,967)$(142,316)
Loss per share attributable to Gannett - basic$(0.02)$(1.06)
Loss per share attributable to Gannett - diluted$(0.02)$(1.06)
Other comprehensive income (loss):
Foreign currency translation adjustments$(7,556)$3,037 
Pension and other postretirement benefit items:
Net actuarial gain (loss)(1,796)1,126 
Amortization of net actuarial (gain) loss (32)20 
Other536 (554)
Total pension and other postretirement benefit items(1,292)592 
Other comprehensive income (loss) before tax(8,848)3,629 
Income tax expense (benefit) related to components of other comprehensive income (loss)(457)206 
Other comprehensive income (loss), net of tax(8,391)3,423 
Comprehensive loss(11,493)(139,278)
Comprehensive loss attributable to noncontrolling interests(a)
(135)(385)
Comprehensive loss attributable to Gannett$(11,358)$(138,893)
(a)     For the three months ended March 31, 2022, there were no redeemable noncontrolling interests included in Net loss attributable to noncontrolling interests. For the three months ended March 31, 2021, Net loss attributable to noncontrolling interests included $385 thousand relating to redeemable noncontrolling interests.

The accompanying notes are an integral part of these condensed consolidated financial statements.
3

GANNETT CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended March 31,
In thousands20222021
Operating activities
Net loss$(3,102)$(142,701)
Adjustments to reconcile net loss to operating cash flows:
Depreciation and amortization47,783 58,103 
Share-based compensation expense3,393 3,423 
Non-cash interest expense5,316 6,118 
(Gain) loss on sale or disposal of assets, net(2,804)4,745 
Loss on convertible notes derivative 126,600 
Loss on early extinguishment of debt2,743 19,401 
Asset impairments854 833 
Pension and other postretirement benefit obligations(27,291)(48,538)
Change in other assets and liabilities, net5,537 33,332 
Cash provided by operating activities32,429 61,316 
Investing activities
Acquisitions, net of cash acquired(15,427) 
Purchase of property, plant and equipment(10,764)(7,607)
Proceeds from sale of real estate and other assets20,471 10,123 
Change in other investing activities(500) 
Cash provided by (used for) investing activities(6,220)2,516 
Financing activities
Payments of deferred financing costs(423)(33,921)
Borrowings under term loans72,500 1,045,000 
Repayments under term loans(47,976)(1,083,791)
Repayments of long-term debt(22,500) 
Acquisition of noncontrolling interests(2,050) 
Payments for employee taxes withheld from stock awards(3,138)(1,707)
Changes in other financing activities(231)(280)
Cash used for financing activities(3,818)(74,699)
Effect of currency exchange rate change on cash(992)314 
Increase (decrease) in cash, cash equivalents and restricted cash21,399 (10,553)
Cash, cash equivalents and restricted cash at beginning of period143,619 206,726 
Cash, cash equivalents and restricted cash at end of period$165,018 $196,173 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4

GANNETT CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
Three months ended March 31, 2022
Common stockAdditional
paid-in
capital
Accumulated other comprehensive income (loss)Accumulated deficitTreasury stockNon-controlling interest
In thousands, except share dataSharesAmountSharesAmountTotal
Balance at December 31, 2021144,667 $1,446 $1,400,206 $59,998 $(921,399)2,368 $(8,151)$(2,485)$529,615 
Net loss attributable to Gannett— — — — (2,967)— — (135)(3,102)
Acquisition of noncontrolling interests— — (4,419)— — — — 2,369 (2,050)
Restricted stock awards settled, net of withholdings615 7 (1,541)— — — — — (1,534)
Restricted share grants5,728 57 (57)— — — — —  
Other comprehensive loss, net(b)
— — — (8,391)— — — (8,391)
Share-based compensation expense— — 3,393 — — — — — 3,393 
Issuance of common stock7 — 62 — — — — — 62 
Treasury stock— — — — — 692 (3,138)— (3,138)
Restricted share forfeiture— — — — — 128 (1)— (1)
Other activity— — (128)— — — —  (128)
Balance at March 31, 2022151,017 $1,510 $1,397,516 $51,607 $(924,366)3,188 $(11,290)$(251)$514,726 
Three months ended March 31, 2021
Common stockAdditional
paid-in
capital
Accumulated other comprehensive income (loss)Accumulated deficitTreasury stock
Non-controlling interest(a)
In thousands, except share dataSharesAmountSharesAmountTotal
Balance at December 31, 2020139,495 $1,395 $1,103,881 $50,173 $(786,437)1,392 $(4,903)$ $364,109 
Net loss attributable to Gannett— — — — (142,316)— — — (142,316)
Restricted stock awards settled, net of withholdings1,057 10 (1,895)— — — — — (1,885)
Restricted share grants3,878 39 (39)— — — — —  
Equity component - 2027 Notes— — 316,252 — — — — — 316,252 
Other comprehensive income, net(b)
— — — 3,423 — — — — 3,423 
Share-based compensation expense— — 3,423 — — — — — 3,423 
Issuance of common stock14 — 61 — — — — — 61 
Remeasurement of redeemable noncontrolling interests— — 126 — — — — — 126 
Treasury stock— — — — — 330 (1,707)— (1,707)
Restricted share forfeiture— — — — — 180 (2)— (2)
Other activity— — 168 — — — — — 168 
Balance at March 31, 2021144,444 $1,444 $1,421,977 $53,596 $(928,753)1,902 $(6,612)$ $541,652 
(a) Excludes Redeemable noncontrolling interests which are reflected in temporary equity.
(b) For the three months ended March 31, 2022 and 2021, Other comprehensive income is net of income tax benefit of $0.5 million and income tax provision of $0.2 million, respectively.
5

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — Description of business and basis of presentation

Description of business
Gannett Co., Inc. ("Gannett", "we", "us", "our", or the "Company") is a subscription-led and digitally-focused media and marketing solutions company committed to empowering communities to thrive. Gannett operates a scalable, data-driven media platform that aligns with consumer and digital marketing trends. We aim to be the premier source for clarity, connections and solutions within our communities. Our strategy is focused on driving audience growth and engagement by delivering deeper content experiences to our consumers, while offering the products and marketing expertise our advertisers desire. We expect the execution of this strategy to enable us to continue our evolution from a more traditional print media business to a digitally-focused content platform.

Our current portfolio of media assets includes USA TODAY, local media organizations in 45 states in the U.S., and Newsquest, a wholly-owned subsidiary operating in the United Kingdom (the "U.K.") with more than 150 local media brands. We also operate a digital marketing solutions company, branded LOCALiQ, which provides a cloud-based platform of products to enable small and medium-sized businesses to accomplish their marketing goals. In addition, we run what we believe is the largest media-owned events business in the U.S., USA TODAY NETWORK Ventures.

Through USA TODAY, our local property network, and Newsquest, we deliver high-quality, trusted content with a commitment to balanced, unbiased journalism, where and when consumers want to engage with it on virtually any device or platform. Additionally, the Company has strong relationships with hundreds of thousands of local and national businesses in both our U.S. and U.K. markets due to our large local and national sales forces and a robust advertising and marketing solutions product suite. The Company reports in two segments, Publishing and Digital Marketing Solutions. We also have a Corporate and other category that includes activities not directly attributable to a specific reportable segment and includes broad corporate functions such as legal, human resources, accounting, analytics, finance, and marketing. A full description of our reportable segments is included in Note 12 — Segment reporting in the notes to the condensed consolidated financial statements.

Impacts of the COVID-19 pandemic

As a result of the COVID-19 pandemic, we initially experienced a significant decline in Advertising and marketing services revenues, which accelerated the secular declines that we continue to experience. We continue to experience constraints on the sales of single copy newspapers, largely tied to reduced business travel and challenges in permitting and attendance at in-person events. While we have seen COVID-19 related operating trends improve since the second quarter of 2020, which represents the quarter that was most significantly impacted by the pandemic, we expect that the COVID-19 pandemic, and the resulting changes in consumer behavior, will continue to have a slight negative impact on our business and results of operations in the near-term, including lower revenues associated with events and lower sales of single copy newspapers. If the COVID-19 pandemic were to revert to conditions that existed during 2020, including measures to help mitigate and control the spread of the virus, we would expect to experience further negative impacts in Advertising and marketing services and Circulation revenues.

Basis of presentation

The condensed consolidated financial statements included in this report are unaudited; however, in the opinion of management, they contain all of the adjustments (consisting of those of a normal, recurring nature) considered necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") applicable to interim periods. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company consolidates entities that it controls due to ownership of a majority voting interest. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.

Use of estimates

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and footnotes thereto. Actual results could differ materially from those estimates.

6

Significant estimates inherent in the preparation of the condensed consolidated financial statements include pension and postretirement benefit obligation assumptions, income taxes, goodwill and intangible asset impairment analysis, valuation of property, plant and equipment and intangible assets.

Recent accounting pronouncements adopted

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

In August 2020, the Financial Accounting Standards Board (the "FASB") issued new guidance ("ASU 2020-06") that simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. In addition to eliminating certain accounting models, the guidance amends the disclosures for convertible instruments and earnings-per-share guidance. It also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. This guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of this guidance did not have a material impact on the accounting for the Company's $497.1 million in aggregate principal amount of 6.0% Senior Secured Convertible Notes due 2027 issued by the Company on November 17, 2020 (the "2027 Notes"), or the condensed consolidated financial statements.

Reference Rate Reform

In March 2020, the FASB issued guidance ("ASU 2020-04"), that provides optional expedients and exceptions for contracts, hedging relationships, and other transactions that reference the London Inter-bank Offered Rate ("LIBOR"). ASU 2020-04 is effective prospectively for all entities through December 31, 2022, when the reference rate replacement activity is expected to have been completed. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During Q1 2022, the Company applied the optional expedient for contract modifications to the amendment of its five-year senior secured term loan facility in an aggregate principal amount of $516.0 million (the "New Senior Secured Term Loan") with Citibank N.A., as collateral agent and administrative agent for the lenders. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements.

Disclosures by Business Entities about Government Assistance

In November 2021, the FASB issued new guidance ("ASU 2021-10") that requires annual disclosures for transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy, including: (i) information about the nature of the transactions and related accounting policy used to account for the transactions; (ii) the line items on the condensed consolidated balance sheets and condensed consolidated statements of operations and comprehensive income (loss) affected by these transactions, including amounts applicable to each line; and (iii) significant terms and conditions of the transactions, including commitments and contingencies. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements.

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers in a Business Combination

In October 2021, the FASB issued new guidance ("ASU 2021-08") that requires an acquirer to recognize and measure certain contract assets and contract liabilities in a business combination in accordance with ASC 606, "Revenue from Contracts with Customers", rather than at fair value on the acquisition date as required under current U.S. GAAP. This guidance is effective for fiscal years beginning after December 15, 2022, with early adoption permitted, including interim periods within those fiscal years. The early adoption of this guidance effective January 1, 2022 did not have a material impact on the condensed consolidated financial statements.

NOTE 2 — Revenues

Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The Company’s condensed consolidated statements of operations and comprehensive income (loss) present revenues disaggregated by revenue type. Sales taxes and other usage-based taxes are excluded from revenues. The following table presents our revenues disaggregated by source:

7

Three months ended March 31,
In thousands20222021
Print advertising$173,518 $193,196 
Digital advertising and marketing services201,596 195,161 
Total advertising and marketing services375,114 388,357 
Circulation288,602 325,437 
Other84,361 63,290 
Total revenues$748,077 $777,084 

For the three months ended March 31, 2022 and 2021, revenues generated from international locations were approximately 8.9% and 7.5% of total revenues, respectively.

Deferred revenues

The Company records deferred revenues when cash payments are received in advance of the Company’s performance obligation. The Company's primary source of deferred revenues is from circulation subscriptions paid in advance of the service provided, which represents future delivery of publications (the performance obligation) to subscription customers. The Company expects to recognize the revenue related to unsatisfied performance obligations over the next one to twelve months in accordance with the terms of the subscriptions.

The Company's payment terms vary by the type and location of the customer and the products or services offered. The period between invoicing and when payment is due is not significant. For certain products or services and customer types, the Company requires payment before the products or services are delivered to the customer. The majority of our subscription customers are billed and pay on monthly terms.

The following table presents changes in the deferred revenues balance by type of revenues:

Three months ended March 31, 2022Three months ended March 31, 2021
In thousandsAdvertising, marketing services, and otherCirculationTotalAdvertising, marketing services, and otherCirculationTotal
Beginning balance$60,665 $124,173 $184,838 $51,686 $134,321 $186,007 
Acquisition 2,388 2,388    
Cash receipts76,125 237,860 313,985 60,117 284,175 344,292 
Revenue recognized(75,463)(240,169)(315,632)(58,953)(280,647)(339,600)
Ending balance$61,327 $124,252 $185,579 $52,850 $137,849 $190,699 

NOTE 3 — Accounts receivable, net

The Company performs its evaluation of the collectability of trade receivables based on customer category. For example, trade receivables from individual subscribers to our publications are evaluated separately from trade receivables related to advertising customers. For advertising trade receivables, the Company applies a "black motor formula" methodology as the baseline to calculate the allowance for doubtful accounts. The reserve percentage is calculated as a ratio of total net bad debts (less write-offs and recoveries) for the prior three-year period to total outstanding trade accounts receivable for the same three-year period. The calculated reserve percentage by customer category is applied to the consolidated gross advertising receivable balance, irrespective of aging. In addition, each category has specific reserves for at risk accounts that vary based on the nature of the underlying trade receivables. Due to the short-term nature of our circulation receivables, the Company reserves all receivables aged over 90 days.

8

The following table presents changes in the allowance for doubtful accounts:
Three months ended March 31,
In thousands20222021
Beginning balance$16,470 $20,843 
Current period provision(2,403)(2,171)
Write-offs charged against the allowance(3,868)(2,805)
Recoveries of amounts previously written-off942 1,206 
Other425 51 
Ending balance$11,566 $17,124 

The calculation of the allowance considers current economic, industry and customer-specific conditions relative to their respective operating environments in the incremental allowances recorded related to high-risk accounts, bankruptcies, receivables in repayment plan and other aging specific reserves. As a result of this analysis, the Company adjusts specific reserves and the amount of allowable credit as appropriate. The collectability of trade receivables related to advertising, marketing services and other customers depends on a variety of factors, including trends in local, regional or national economic conditions that affect our customers' ability to pay. The advertisers in our newspapers and other publications and related websites are primarily retail businesses that can be significantly affected by regional or national economic downturns and other developments that may impact our ability to collect on the related receivables. Similarly, while circulation revenues related to individual subscribers are primarily prepaid, changes in economic conditions may also affect our ability to collect on amounts owed from single copy circulation customers.

For the three months ended March 31, 2022 and 2021, the Company recorded a benefit of $2.4 million and $2.2 million in bad debt expense, respectively. Bad debt expense is included in Selling, general and administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss). For the three months ended March 31, 2022 and 2021, the Company recorded reductions to bad debt expense due to a decrease in required reserves due to lower receivable balances.

NOTE 4 — Goodwill and intangible assets

Goodwill and intangible assets consisted of the following:
March 31, 2022December 31, 2021
 In thousandsGross carrying amountAccumulated
amortization
Net carrying
amount
Gross carrying amountAccumulated
amortization
Net carrying
amount
Finite-lived intangible assets:
Advertiser relationships$455,522 $163,594 $291,928 $453,038 $153,988 $299,050 
Other customer relationships102,798 37,920 64,878 102,486 35,237 67,249 
Subscriber relationships253,890 106,986 146,904 254,162 99,905 154,257 
Other intangible assets68,780 47,519 21,261 68,690 44,291 24,399 
Sub-total$880,990 $356,019 $524,971 $878,376 $333,421 $544,955 
Indefinite-lived intangible assets:
Mastheads169,550 168,198 
Total intangible assets$694,521 $713,153 
Goodwill$540,894 $533,709 

Consistent with the Company’s past practice, the Company performs its annual goodwill and indefinite-lived intangible impairment assessment on the last day of its fiscal second quarter. In addition to the annual impairment test, the Company is required to regularly assess whether a triggering event has occurred under both ASC 350 and/or ASC 360, which would require interim impairment testing.

As of March 31, 2022, the Company performed a review of potential impairment indicators and it was determined that no indicators of impairment were present.

9

NOTE 5 — Integration and reorganization costs and asset impairments

Over the past several years, the Company has engaged in a series of individual restructuring programs, designed primarily to right-size the Company’s employee base, consolidate facilities and improve operations, including those of recently acquired entities. These initiatives impact all the Company’s operations and can be influenced by the terms of union contracts. Costs related to these programs, which primarily include severance expense, facility consolidation and other restructuring-related expenses, are accrued when probable and reasonably estimable or at the time of program announcement.

Severance-related expenses

We recorded severance-related expenses by segment as follows:
Three months ended March 31,
In thousands20222021
Publishing$5,177 $6,779 
Digital Marketing Solutions9 (57)
Corporate and other174 375 
Total$5,360 $7,097 

A rollforward of the accrued severance and related costs included in Accounts payable and accrued expenses on the condensed consolidated balance sheets for the three months ended March 31, 2022 is as follows:
In thousandsSeverance and
related costs
Beginning balance$12,558 
Restructuring provision included in integration and reorganization costs5,360 
Cash payments(5,430)
Ending balance$12,488 

The restructuring reserve balance is expected to be paid out over the next twelve months.

Facility consolidation and other restructuring-related expenses

Facility consolidation and other restructuring-related expenses represent costs for consolidating operations, systems implementation, and outsourcing of corporate functions. We recorded facility consolidation charges and other restructuring-related costs by segment as follows:
Three months ended March 31,
In thousands20222021
Publishing$544 $547 
Digital Marketing Solutions142 223 
Corporate and other5,352 5,537 
Total$6,038 $6,307 

Accelerated depreciation

For the three months ended March 31, 2022 and 2021, the Company incurred accelerated depreciation, a component of Depreciation and amortization expense in the condensed consolidated statements of operations and comprehensive income (loss), of $4.7 million and $9.2 million, respectively, related to the shortened useful life of assets due to the sale of property primarily at the Publishing segment.

10

NOTE 6 — Debt

The Company's debt consisted of the following:

March 31, 2022December 31, 2021
(in millions)Principal balanceUnamortized original issue discountUnamortized deferred financing costsCarrying valuePrincipal balanceUnamortized original issue discountUnamortized deferred financing costsCarrying value
New Senior Secured Term Loan$504.6 $(12.0)$(2.4)$490.2 $480.1 $(14.1)$(2.7)$463.3 
2026 Senior Notes377.5 (12.2)(9.6)355.7 400.0 (13.7)(10.7)375.6 
2027 Notes485.3 (90.4)(1.9)393.0 485.3 (93.2)(2.0)390.1 
2024 Notes3.3   3.3 3.3   3.3 
Total debt$1,370.7 $(114.6)$(13.9)$1,242.2 $1,368.7 $(121.0)$(15.4)$1,232.3 
Less: Current portion of long-term debt$(62.9)$ $ $(62.9)$(69.5)$ $ $(69.5)
Non-current portion of long-term debt$1,307.8 $(114.6)$(13.9)$1,179.3 $1,299.2 $(121.0)$(15.4)$1,162.8 

New Senior Secured Term Loan

On October 15, 2021, Gannett Holdings LLC ("Gannett Holdings"), a wholly-owned subsidiary of the Company, entered into the New Senior Secured Term Loan with Citibank N.A., as collateral agent and administrative agent for the lenders. On January 31, 2022, Gannett Holdings entered into an amendment (the "Term Loan Amendment") to its New Senior Secured Term Loan to provide for new incremental senior secured term loans (the "Incremental Term Loans") in an aggregate principal amount of $50 million. The Incremental Term Loans have substantially identical terms as the New Senior Secured Term Loan and are treated as a single tranche with the New Senior Secured Term Loan. The Term Loan Amendment also amended the New Senior Secured Term Loan to transition the interest rate base from LIBOR to Adjusted Term SOFR and to permit the repurchase of up to $50 million of the Company's common stock, par value $0.01 per share ("Common Stock") under the Stock Repurchase Program (defined below in Note 10 — Supplemental equity information) consummated on or prior to December 31, 2022, in addition to capacity for Gannett Holdings to make restricted payments, including stock repurchases, currently permitted under other provisions of the New Senior Secured Term Loan and our other debt facilities, including the 2026 Senior Secured Notes Indenture and the 2027 Notes Indenture (terms defined below). On March 21, 2022, Gannett Holdings entered into an amendment (the "Second Term Loan Amendment") to its New Senior Secured Term Loan to provide for incremental senior secured term loans in an aggregate principal amount of $22.5 million.

The New Senior Secured Term Loan bears interest at a per annum rate equal to Adjusted Term SOFR (which shall not be less than 0.50% per annum) plus a margin of 5.00% or an alternate base rate (which shall not be less than 1.50% per annum) plus a margin equal to 4.00%. Loans under the New Senior Secured Term Loan may be prepaid, at the option of Gannett Holdings, at any time without premium, except a premium equal to 1.00% of the aggregate principal amount of the loans being repaid in connection with certain refinancing or repricing events that reduce the all-in yield applicable to the loans and occur on or before October 15, 2022. In addition, we are required to repay the New Senior Secured Term Loan from time to time with (i) the proceeds of non-ordinary course asset sales and casualty and condemnation events, (ii) the proceeds of indebtedness not permitted under the New Senior Secured Term Loan, and (iii) the aggregate amount of cash and cash equivalents on hand at the Company and its restricted subsidiaries in excess of $100 million at the end of each fiscal year of the Company. The New Senior Secured Term Loan amortizes in equal quarterly installments, beginning June 30, 2022, at a rate equal to 10.00% per annum (or, if the ratio of debt secured on an equal basis with the New Senior Secured Term Loan less unrestricted cash of the Company and its restricted subsidiaries to Consolidated EBITDA (as such terms are defined in the New Senior Secured Term Loan ) (such ratio, the "First Lien Net Leverage Ratio"), for the most recently ended period of four consecutive fiscal quarters is equal to or less than 1.20 to 1.00, 5.00% per annum). All obligations under the New Senior Secured Term Loan are secured by all or substantially all of the assets of the Company and the wholly-owned domestic subsidiaries of the Company (the "New Senior Secured Term Loan Guarantors"). The obligations of Gannett Holdings under the New Senior Secured Term Loan are guaranteed on a senior secured basis by the Company and the New Senior Secured Term Loan Guarantors.

The New Senior Secured Term Loan contains usual and customary covenants for credit facilities of this type, including a requirement to have minimum unrestricted cash of $30 million as of the last day of each fiscal quarter, and restricts, among other things, our ability to incur debt, grant liens, sell assets, and make investments and pay dividends, in each case with
11

customary exceptions, including an exception that permits dividends and repurchases of outstanding junior debt or equity in (i) an amount of up to $25 million per fiscal quarter if the First Lien Net Leverage Ratio for such fiscal quarter is equal to or less than 2.00 to 1.00, (ii) an amount of up to $50 million per fiscal quarter if the First Lien Net Leverage Ratio for such fiscal quarter is equal to or less than 1.50 to 1.00, and (iii) an unlimited amount if First Lien Net Leverage Ratio for such fiscal quarter is equal to or less than 1.00 to 1.00. As of March 31, 2022, the Company was in compliance with all of the covenants and obligations under the New Senior Secured Term Loan.

The New Senior Secured Term Loan was recorded at carrying value, which approximates fair value in the condensed consolidated balance sheets and was classified as Level 2.

For the three months ended March 31, 2022, the Company recognized interest expense of $6.9 million, paid interest expense of $6.9 million and recognized amortization of original issue discount and deferred financing costs of $0.9 million and $0.2 million, respectively, under the New Senior Secured Term Loan. Additionally, during the three months ended March 31, 2022, the Company recognized losses on early extinguishment of debt of approximately $1.4 million related to the write-off of original issue discount and deferred financing costs as a result of early prepayments on the New Senior Secured Term Loan.

For the three months ended March 31, 2022, the Company made prepayments, inclusive of both mandatory and optional prepayments, totaling $48.0 million, which were classified as financing activities in the condensed consolidated statements of cash flows. As of March 31, 2022, the effective interest rate for the New Senior Secured Term Loan was 6.3%.

Senior Secured Notes due 2026

On October 15, 2021, Gannett Holdings completed a private offering of $400 million aggregate principal amount of 6.00% first lien notes due November 1, 2026 (the "2026 Senior Notes"). The 2026 Senior Notes were issued pursuant to an indenture, dated October 15, 2021 (the "2026 Senior Notes Indenture") among Gannett Holdings, the Company, the guarantors from time to time party thereto (the "2026 Senior Notes Guarantors"), U.S. Bank National Association, as trustee, and U.S. Bank National Association, as collateral agent, registrar, paying agent and authenticating agent.

Interest on the 2026 Senior Notes is payable semi-annually in arrears, beginning on May 1, 2022. The 2026 Senior Notes mature on November 1, 2026, unless redeemed or repurchased earlier pursuant to the 2026 Senior Notes Indenture. The 2026 Senior Notes may be redeemed at the option of Gannett Holdings, in whole or in part, at any time and from time to time after November 1, 2023, at the redemption prices set forth in the 2026 Senior Notes Indenture. At any time prior to such date, Gannett Holdings will be entitled at its option to redeem all, but not less than all, of the 2026 Senior Notes at the "make-whole" redemption price set forth in the 2026 Senior Notes Indenture. Additionally, at any time prior to November 1, 2023, Gannett Holdings may, on one or more occasions, redeem up to 40% of the aggregate principal amount of the 2026 Senior Notes at the redemption price set forth in the 2026 Senior Notes Indenture with the net cash proceeds of certain equity offerings. If certain changes of control with respect to Gannett Holdings or the Company occur, Gannett Holdings must offer to purchase the 2026 Senior Notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase, plus accrued and unpaid interest to, but excluding, the date of purchase. In addition, during any twelve-month period commencing on or after October 15, 2021 and ending prior to November 1, 2023, up to 10% of the aggregate principal amount of the 2026 Senior Notes issued under the 2026 Senior Notes Indenture may be redeemed at a purchase price equal to 103% of the aggregate principal amount of the 2026 Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to but excluding, the redemption date.

The 2026 Senior Notes are unconditionally guaranteed, jointly and severally, on a senior secured basis by the 2026 Senior Notes Guarantors. The 2026 Senior Notes and such guarantees are secured on a first-priority basis by the collateral, consisting of substantially all of the assets of Gannett Holdings and the 2026 Senior Notes Guarantors, subject to certain intercreditor arrangements.

The 2026 Senior Notes Indenture limits the Company and its restricted subsidiaries’ ability to, among other things, make investments, loans, advances, guarantees and acquisitions; incur or guarantee additional debt and issue certain disqualified equity interests and preferred stock; make certain restricted payments, including a limit on dividends on equity securities or payments to redeem, repurchase or retire equity securities or other indebtedness; dispose of assets; create liens on assets to secure debt; engage in transactions with affiliates; enter into certain restrictive agreements; and consolidate, merge, sell or otherwise dispose of all or substantially all of their or a 2026 Senior Notes Guarantor’s assets. These covenants are subject to a number of limitations and exceptions. The 2026 Senior Notes Indenture also contains customary events of default.

12

The 2026 Senior Notes are classified as Level 2 because it is measured at fair value using commonly accepted valuation methodologies and indirectly observable, market-based risk measurements and historical data, and a review of prices and terms available for similar debt instruments.

The unamortized original issue discount and unamortized deferred financing costs will be amortized over the remaining contractual life of the 2026 Senior Notes. For the three months ended March 31, 2022, the Company recognized interest expense of $6.0 million, paid interest expense of $0.6 million and recognized amortization of $1.3 million of deferred financing costs in connection with the 2026 Senior Notes. As of March 31, 2022, the effective interest rate on the 2026 Senior Notes was 7.3%.

In March 2022, the Company entered into a privately negotiated agreement with certain holders of our 2026 Senior Notes and repurchased $22.5 million principal of our outstanding 2026 Senior Notes in exchange for $22.5 million of New Senior Secured Term Loans (discussed above). The repurchase was treated as an extinguishment of a portion of the 2026 Senior Notes and as a result, for the three months ended March 31, 2022, the Company recognized losses on early extinguishment of debt of approximately $1.3 million related to the write-off of deferred financing costs.

Senior Secured Convertible Notes due 2027

The 2027 Notes were issued pursuant to an Indenture dated as of November 17, 2020, as amended by the First Supplemental Indenture dated as of December 21, 2020 and the Second Supplemental Indenture dated as of February 9, 2021 (collectively, the "2027 Notes Indenture"), between the Company and U.S. Bank National Association, as trustee.

In connection with the issuance of the 2027 Notes, the Company entered into an Investor Agreement (the "Investor Agreement") with the holders of the 2027 Notes (the "Holders") establishing certain terms and conditions concerning the rights and restrictions on the Holders with respect to the Holders' ownership of the 2027 Notes. The Company also entered into an amendment to the Registration Rights Agreement dated November 19, 2019, between the Company and FIG LLC, the Company's former manager.

Interest on the 2027 Notes is payable semi-annually in arrears. The 2027 Notes mature on December 1, 2027, unless earlier repurchased or converted. The 2027 Notes may be converted at any time by the holders into cash, shares of the Company’s Common Stock or any combination of cash and Common Stock, at the Company's election. The initial conversion rate is 200 shares of Common Stock per $1,000 principal amount of the 2027 Notes, which is equal to a conversion price of $5.00 per share of Common Stock (the "Conversion Price").

The conversion rate is subject to customary adjustment provisions as provided in the 2027 Notes Indenture. In addition, the conversion rate will be subject to adjustment in the event of any issuance or sale of Common Stock (or securities convertible into Common Stock) at a price equal to or less than the Conversion Price in order to ensure that following such issuance or sale, the 2027 Notes would be convertible into approximately 42% (adjusted for repurchases and certain other events that reduce the outstanding amount of the 2027 Notes) of the Common Stock after giving effect to such issuance or sale (assuming the initial principal amount of the 2027 Notes remains outstanding). After giving effect to the repurchase of $11.8 million in aggregate principal outstanding of the 2027 Notes during the year ended December 31, 2021, such percentage is approximately 41%.

Upon the occurrence of a "Make-Whole Fundamental Change" (as defined in the 2027 Notes Indenture), the Company will in certain circumstances increase the conversion rate for a specified period of time. If a "Fundamental Change" (as defined in the 2027 Notes Indenture) occurs, the Company will be required to offer to repurchase the 2027 Notes at a repurchase price of 110% of the principal amount thereof.

Holders of the 2027 Notes will have the right to put up to approximately $100 million of the 2027 Notes at par on or after the date that is 91 days after the maturity date of the New Senior Secured Term Loan.

Under the 2027 Notes Indenture, the Company can only pay cash dividends up to an agreed-upon amount, provided the ratio of consolidated debt to EBITDA (as such terms are defined in the 2027 Notes Indenture) does not exceed a specified ratio. In addition, the 2027 Notes Indenture provides that, at any time that the Company’s Total Gross Leverage Ratio (as defined in the 2027 Notes Indenture) exceeds 1.5 and the Company approves the declaration of a dividend, the Company must offer to purchase a principal amount of 2027 Notes equal to the proposed amount of the dividend.

Until the four-year anniversary of the issuance date, the Company will have the right to redeem for cash up to approximately $99.4 million of the 2027 Notes at a redemption price of 130% of the principal amount thereof, with such
13

amount reduced ratably by any principal amount of 2027 Notes that has been converted by the holders or redeemed or purchased by the Company.

The 2027 Notes are guaranteed by Gannett Holdings and any subsidiaries of the Company that guarantee the New Senior Secured Term Loan. The 2027 Notes are secured by the same collateral that secures the New Senior Secured Term Loan. The 2027 Notes rank as senior secured debt of the Company and are secured by a second priority lien on the same collateral package that secured the indebtedness incurred in connection with the New Senior Secured Term Loan.

The 2027 Notes Indenture includes affirmative and negative covenants, including limitations on liens, indebtedness, dispositions, loan, advances and investors, sale and leaseback transactions, restricted payments, transactions with affiliates, restrictions on dividends and other payment restrictions affecting restricted subsidiaries, negative pledges and modifications to certain agreements. The 2027 Notes Indenture also requires that the Company maintain, as of the last day of each fiscal quarter, at least $30.0 million of Qualified Cash (as defined in the 2027 Notes Indenture). The 2027 Notes Indenture includes customary events of default.

The 2027 Notes has two components: (i) a debt component, and (ii) an equity component. The debt component of the 2027 Notes is classified as Level 2 because it is measured at fair value using commonly accepted valuation methodologies and indirectly observable, market-based risk measurements and historical data, and a review of prices and terms available for similar debt instruments that do not contain a conversion feature. The fair value of the equity component is classified as Level 3 because it is measured at fair value using a binomial lattice model using assumptions based on market information and historical data, and significant unobservable inputs. As of March 31, 2022 and December 31, 2021, the amount of the conversion feature recorded in Additional paid-in capital was $279.6 million.

For the three months ended March 31, 2022 and 2021, the Company recognized amortization of the original issue discount of $2.9 million and $2.3 million, respectively, and for the three months ended March 31, 2022, recorded amortization of deferred financing costs of $0.1 million in connection with the 2027 Notes. Amortization of deferred financing costs related to the 2027 Notes was immaterial for the three months ended March 31, 2021. In addition, for the three months ended March 31, 2022 and 2021, the Company recognized interest expense of $7.2 million and $7.5 million, respectively, in connection with the 2027 Notes. The effective interest rate on the liability component of the 2027 Notes was 10.5% as of both March 31, 2022 and 2021.

For the three months ended March 31, 2022, no shares were issued upon conversion, exercise, or satisfaction of the required conditions. Refer to Note 10 — Supplemental equity information for details on the convertible debt's impact to diluted earnings per share under the if-converted method.

Senior Convertible Notes due 2024

The $3.3 million principal value of the remaining 4.75% convertible senior notes due 2024 (the "2024 Notes") outstanding is reported as convertible debt in the condensed consolidated balance sheets. As of March 31, 2022, the effective interest rate on the 2024 Notes was 6.05%.

NOTE 7 — Pensions and other postretirement benefit plans

We, along with our subsidiaries, sponsor various defined benefit retirement plans, including plans established under collective bargaining agreements. Our retirement plans include the Gannett Retirement Plan (the "GR Plan"), the Newsquest and Romanes Pension Schemes in the U.K., and other defined benefit and defined contribution plans. We also provide health care and life insurance benefits to certain retired employees who meet age and service requirements.

14

Retirement plan costs include the following components:
Pension benefits
Postretirement benefits
Three months ended March 31,Three months ended March 31,
In thousands2022202120222021
Operating expenses:
Service cost - benefits earned during the period$475 $511 $15 $31 
Non-operating expenses:
Interest cost on benefit obligation18,649 17,031 451 501 
Expected return on plan assets(37,281)(41,430)  
Amortization of actuarial loss (gain)20 35 (52)(15)
Total non-operating (benefit) expenses$(18,612)$(24,364)$399 $486 
Total expense (benefit) for retirement plans$(18,137)$(23,853)$414 $517 

During the three months ended March 31, 2022, we contributed $7.6 million and $2.0 million to our pension and other postretirement plans, respectively. Additionally, in response to the COVID-19 pandemic, our GR Plan in the U.S. has deferred certain contractual contributions and negotiated a contribution payment plan of $5.0 million per quarter starting December 31, 2020 through the end of September 30, 2022.

NOTE 8 — Fair value measurement

In accordance with ASC 820, "Fair Value Measurement," fair value measurements are required to be disclosed using a three-tiered fair value hierarchy which distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Level 1 refers to fair values determined based on quoted prices in active markets for identical assets or liabilities, Level 2 refers to fair values estimated using significant other observable inputs and Level 3 includes fair values estimated using significant unobservable inputs.

As of March 31, 2022 and December 31, 2021, assets and liabilities recorded at fair value and measured on a recurring basis primarily consist of pension plan assets. As permitted by U.S. GAAP, we use net asset values ("NAV") as a practical expedient to determine the fair value of certain investments. These investments measured at NAV have not been classified in the fair value hierarchy.

Refer to Note 6 — Debt for additional discussion regarding fair value of the New Senior Secured Term Loan, the 2026 Senior Notes, the 2027 Notes and the 2024 Notes.

Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Assets held for sale (Level 3) are measured on a nonrecurring basis and are evaluated using executed purchase agreements, letters of intent or third-party valuation analyses when certain circumstances arise. Assets held for sale totaled $5.9 million and $3.5 million as of March 31, 2022 and December 31, 2021, respectively. The Company performs its annual goodwill and indefinite-lived intangible impairment assessment during the second quarter of the year. Any resulting asset impairment would require that the asset be recorded at its fair value. The resulting fair value measurements of the assets are considered to be Level 3 measurements. Refer to Note 4 — Goodwill and intangible assets for additional discussion regarding the annual impairment assessment.

NOTE 9 — Income taxes

The following table outlines our pre-tax net loss and income tax amounts:
Three months ended March 31,
In thousands20222021
Loss before income taxes$(10,709)$(151,810)
Benefit for income taxes(7,607)