Gannett Annual Report 2018

← All annual reports

FY2018 Annual Report · Gannett

Loading PDF…

2
0
1
8
A
n
n
u
a

R
e
p
o
r
t

G
a
n
n
e
t
t
C
o

.
,

n
c
.

Gannett Co., Inc.
7950 Jones Branch Dr.
McLean, VA 22107

gannett.com

S
T
N
E
T
N
O
C

01 | Company Profile

02 | Letter to Shareholders

04 | Board of Directors

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 Equiniti Trust
Company. General inquiries should be directed to EQ Shareowner Services,
P.O. Box 64854, St. Paul, MN 55164-0854, by telephone at 800-778-3299, or at
shareownersonline.com.

FINANCE

Ali Engel

Senior Vice President,

Chief Financial Officer and Treasurer

CORPORATE GOVERNANCE

We have posted on our web site (www.gannett.com) our principles of corporate
governance, ethics policy and the charters for the audit, transformation,
nominating and public responsibility, and executive compensation committees
of our board of directors, and we intend to post updates to these corporate
governance materials promptly if any changes (including through any
amendments or waivers of the ethics policy) are made. This site also provides
access to our annual report on Form 10-K, quarterly reports on Form 10-Q and
current reports on Form 8-K as filed with the SEC. Our chief executive officer and
our chief financial officer have delivered, and we have filed with our 2018 Form
10-K, all certifications required by the rules of the SEC. Complete copies of our
corporate governance materials and our Form 10-K may be obtained by writing
our Secretary at our corporate headquarters.

For information about Gannett’s practices, programs and policies concerning
environmental, social and governance matters, go to www.gannett.com/
corporate-responsibility.

FOR MORE INFORMATION

News and information about Gannett is available at www.gannett.com. Quarterly
earnings information will be available in May, August and November 2019.
Shareholders who wish to contact the company directly about their Gannett
stock should call Shareholder Services at Gannett headquarters, 703-854-6960.

MEDIA RELATIONS

Amber Allman

Vice President, Corporate Events

and Communications

THIS REPORT WAS WRITTEN

AND PRODUCED BY

EMPLOYEES OF GANNETT.

Printing
Action Printing, Fond du Lac, WI

Printed on recycled paper.

Gannett is committed to sustainability.

The annual report is printed on

Forestry Stewardship Council (FSC)

certified paper from managed forests

and is printed with soy-based ink. We

also embrace a digital workflow to

reduce paper use.

GANNETT HEADQUARTERS

7950 Jones Branch Drive
McLean, VA 22107
703-854-6000

INVESTOR RELATIONS

Stacy Cunningham
Vice President, Financial Planning & Investor Relations
investors@gannett.com
703-854-3168

COMPANY PROFILE

Gannett is a leading global, digitally focused media
and marketing solutions company, reaching nearly
49% of the U.S. digital population.

Gannett’s consumer brands include USA TODAY
NETWORK’s award-winning portfolio of premium
media brands, including the iconic USA TODAY
and more than 100 local media organizations in 34
states and Guam, as well as niche passion brands.
Gannett’s newsrooms are recognized by their peers
for their journalism excellence and have collectively
earned 69 Pulitzer Prizes.

USA TODAY NETWORK’s tremendous local-to-
national reach touches the lives of about 126
million people on average each month* with trusted
content, consumer experiences, membership
benefits and advertiser products and services.
Overall, USA TODAY NETWORK consistently ranks
among the top four in total audience in Comscore’s
news and information category and is a top news
destination for millennials, reaching 47%, or
36 million U.S. millennials monthly.

In the U.K., Newsquest is a publishing and digital
leader with more than 150 local media brands and a
network of web sites, which attracts more than 25
million unique visitors monthly.

As a company with a rich tradition of industry
leadership and innovation, Gannett continues to
leverage and grow its content through innovative
forms and platforms, including augmented reality,
360-degree video, podcasts and video. For example,
USA TODAY NETWORK’s “Kind” video franchise –
Humankind, Animalkind and Militarykind – attracted
more than 5.1 billion views across platforms in 2018.

Gannett also continues to broaden its award-
winning marketing solutions products and services
to meet emerging consumer and client needs. Over
the last two-and-a-half years, the company has
acquired ReachLocal, SweetIQ and WordStream to
offer end-to-end Do-It-For-Me and Do-It-Yourself

*Comscore

digital marketing services for a range of clients.
Launched in 2018, LOCALiQ is the company’s
unified, data-driven marketing solutions brand that
combines Gannett’s products and services under
one banner, providing all that clients need to reach
customers and grow their businesses.

The scope of the products and services Gannett
can provide businesses is comprehensive and
spans both print and digital solutions, including
search engine optimization, display advertising
across desktop, mobile, social and video, data
insights, websites, local listings, live chats and lead
engagement and automation.

The company leverages the extraordinary unique
insights and data it has culled from previous
advertising campaigns to provide clients with the
best options for investing their marketing dollars.
This ability enables the company to combine its
knowledge, intelligent technology, proven expertise,
and the power of the USA TODAY NETWORK for a
great client experience.

At the company’s core is the belief that workplace
diversity, inclusion and equity are essential to
Gannett’s culture and business success. The
company is committed to having a workforce that
reflects the communities it serves and to creating
an environment where everyone feels included and
empowered to achieve their best.

Gannett has several employee engagement and
charitable contribution programs that support local
communities. The largest initiative is A Community
Thrives, through which the company builds on the
strength of USA TODAY NETWORK and harnesses
the philanthropic passions of its employees and
the communities it serves to have positive impact.
A Community Thrives operates under the auspices
of Gannett Foundation, which since its inception in
1991 has donated more than $200 million to non-
profits to support building better communities.

LETTER TO SHAREHOLDERS

DEAR SHAREHOLDERS:

On behalf of Gannett, we want to thank you for your
support of our company. We are all working very
hard to make great things happen for our readers,
our clients and our communities and continue to be
as focused as ever on delivering for our investors.

All-in-all, 2018 was a transformative year for
Gannett. We continued to execute against a
number of strategic initiatives, building upon
and leveraging our outstanding content and our
marketing solutions products and services to
further empower our readers and our clients.

Our premium local news brands, USA TODAY
and niche media delivered high-quality, trusted
content, which drove reader engagement higher
than ever. On the business side, we have continued
growing our digital revenues, with our total digital
advertising and marketing services revenues
rising 4.9%, reaching 47% of total advertising and
marketing services revenue, nearly hitting that
important 50% milestone.

Other highlights of the year:

• We achieved $2.9 billion in revenue of which $1
billion was digital revenue, and $322 million in
adjusted EBITDA.

• National digital media revenues finished strong
in the fourth quarter, up 18% year-over-year,
with solid results from both our premium and
programmatic channels.

• Propelled by audience gains for the midterm

elections and other breaking news, November
2018 traffic to the USA TODAY NETWORK reached
133 million unique users, hitting an all-time
record for us, according to Comscore. In the same
month, we passed the Yahoo/Huffington Post
network to be No. 3 in the news and information
space.

• Our mobile audience continued to grow, with a

10% year-over-year increase.

• In addition, we drove great year-over-year growth

in digital subscriptions, up 46% vs. 2017.

Marketing Solutions

On the Marketing Solutions side, our teams are
finding innovative ways to help our clients achieve the
results they need from their marketing investments.

We made significant progress on our strategic
Marketing Solutions sales reorganization, better

aligning our sales organization to meet the needs of our
various client segments.

As part of our launch of LOCALiQ,
our new data-driven marketing
solutions brand, we initiated the full release of our
Grader tool, which provides guidance, context, and
recommendations around a business’s online marketing
presence. LOCALiQ Grader combines insights and data
intelligence to enable businesses to compare their
digital presence to that of their competitors – and it has
been a big hit with our clients.

Our national sales team achieved a key milestone in
2018 – more than 75% of USA TODAY’s advertising
revenues were digital – and the team achieved total
advertising revenue growth for the second year in a
row. Given the challenges facing many digital media
publishers today, these results underscore the strong
execution of our strategy by our national sales team
and the strength of the USA TODAY brand.

We saw good progress related to our
newest acquisition, WordStream,
with financial results that were ahead
of our expectations in the first six
months of ownership. WordStream is
focused on various revenue initiatives, including cross-
selling SweetIQ’s solutions and product development
efforts to drive continued strong growth in 2019.

Consumer

Our consumer organization is focused on growing
overall digital audience and engagement as
we create products and experiences that drive
continued growth of our digital subscriber base and
retain print subscribers.

Highlighting the success of our audience
development strategy is our robust audience
growth. According to Comscore, in 2018 we
averaged 126 million unique visitors each month, a
strong performance relative to our peer set.

The depth and breadth of USA TODAY NETWORK,
too, gives us tremendous resources to fuel our
journalism and have an impact on some of the most
important issues facing our world. One focus this
year has been to combine engaging technology,
visuals and insightful data to help us tell the story.

Our “321 Launch” is a first-of-
its-kind augmented reality space
app that allows users to engage
with rocket launches in a new

way. On launch day, the app syncs a 3D rocket on
your device to a live rocket on a Florida launch pad.
Your AR rocket fires its engines and blasts off at the

| LETTER TO SHAREHOLDERS same time as the actual rocket. It was created by
combining the technical wizardry of USA TODAY
NETWORK’s Emerging Tech team with the launch
expertise of FLORIDA TODAY’s space team.

Likewise, our longform investigative
podcast, “The City,” which looks
at hidden power structures of
American cities, included an
industry-first augmented reality
trailer and quickly reached #6

on the Apple podcast chart. “The City” has been
lauded by critics and podcast listeners alike and
was named by Apple Podcasts as one of the best
podcasts of 2018.

In fact, Gannett was named a Fast Company “Most
Innovative Company” for our work in using Virtual
Reality and Augmented Reality to deliver original
content and experiences to consumers.

Further, our exceptional
journalism was honored by
our peers with three

Pulitzer Prizes in the following categories: The
Arizona Republic | USA TODAY NETWORK won for
explanatory reporting for its project “The Wall:
Unknown Stories, Unintended Consequences,” The
Cincinnati Enquirer staff won for local reporting
with “Seven Days of Heroin,” and The Des Moines
Register’s Andie Dominick won for editorial writing.
Our use of aerial video, podcasts and virtual reality,
synched with excellent reporting on “The Wall,”
also earned us the “Best Innovation Project on a
Website” award from Editor & Publisher.

To further deepen audience
engagement, we are making
additional investments in
video content where we are experiencing strong
returns. Our Product teams redesigned our
video player, which drove improved usage and
monetization. Overall, we grew the number of total
network video views, up 172% year-over-year.
Our “Kind” brands – Humankind, Animalkind and
Militarykind – finished 2018 with more than
5.1 billion views across platforms. This was a more
than 264% increase from 2017.

Our mobile redesign, too, enabled USA TODAY
NETWORK to create a cohesive look across
its publications with new tools targeting
personalization features.

In addition, we continue to focus on deepening
audience engagement by personalizing content
for readers, from article recommendations to
advertising delivery – and we’ve just started.

There’s much more to come as we look at ways to
further grow digital consumer revenue.

Looking ahead:
We remain committed to running our operations
efficiently to support our journalism and enable
investment while also staying focused on shareholder
returns.

Consumers and businesses have many choices and it’s
important to continue to grow the content, products
and services they want so that we are essential to
their lives. We are excited about the considerable
opportunities in front of us and believe our best days
are ahead as we focus on driving value into the future.

Best regards,

J. Jeffry Louis

Robert J. Dickey
President and CEO, Gannett Co., Inc.

Note from CEO Robert Dickey:

As announced in
December, I’m planning
on retiring by May 7
and Gannett’s Board of
Directors has initiated a
process to find the best
qualified candidate to
succeed me.

I have been with Gannett nearly 30 years
and it has been a true privilege and an
honor to serve as CEO since our launch as
a new company in 2015 and to head up the
publishing division prior to that time.

I’m proud of what we have achieved, from
the creation of the USA TODAY NETWORK to
the acquisition of ReachLocal. Each year I see
the passion that our employees have for this
organization and for our mission to help build
a better world, which fuels our efforts on all
fronts.

In the meantime, until a successor is named,
I continue to press forward, alongside my
colleagues, as we further position this
company for long-term success.

Annual Report |
BOARD OF DIRECTORS

J. JEFFRY LOUIS | Age 56

Chairman, Gannett Co., Inc.; Co-founder
and Former Chairman, Parson Capital
Corporation

Other directorships and trusteeships: The
Olayan Group and S. C. Johnson & Son, Inc.
(a,b)

STEPHEN W. COLL | Age 60

Dean of the Graduate School of Journalism
for Columbia University in New York
(c,d)

ROBERT J. DICKEY | Age 61

President and CEO. Former President,
Gannett U.S. Community Publishing Division,
formerly Newspaper Division; former Senior
Group President, Gannett’s Pacific Group
and Chairman of Phoenix Newspapers Inc.

Other directorships: The Associated Press
(d)

JOHN E. CODY | Age 72

Former Executive Vice President and Chief
Operating Officer of Broadcast Music, Inc.

Other directorships: Creative & Dreams Music
Network, LLC and Core Rights, LLC
(a,b)

LILA IBRAHIM | Age 49

Chief Operating Officer, Deep Mind
Technologies

Other directorships: Team4Tech
(b,d)

DONALD FELSINGER | Age 71

Former Executive Chairman, Sempra Energy

Other directorships: Archer-Daniels-Midland
and Northrop Grumman Corp.
(a,b)

TONY A. PROPHET | Age 60

Chief Equality Officer, Salesforce
(a,c)

LAWRENCE S. KRAMER | Age 68

Chairman of The Street, Inc.; Former
President of USA TODAY

Other directorships and trusteeships: Harvard
Business Publishing, Syracuse University
(c,d)

CHLOE R. SLADDEN | Age 44

Co-founder and co-CEO at Honeycomb Labs;
Co-founder and Principal of #angels and
former Vice President, Media, Twitter, Inc.
(c,d)

DEBRA A. SANDLER | Age 59

President and CEO, La Grenade Group, LLC

Other directorships and trusteeships: Archer-
Daniels-Midland, Hofstra University, The Ad
Council, LEAD, Executive Leadership Council
(a,c)

Board Committees:
(a) Member of Audit Committee
(b) Member of Executive Compensation Committee
(c) Member of Nominating and Public Responsibility Committee
(d) Member of Transformation Committee

| BOARD OF DIRECTORS UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-K

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-36874
GANNETT CO., INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or Other Jurisdiction of Incorporation or Organization)

7950 Jones Branch Drive, McLean, Virginia
(Address of principal executive offices)

47-2390983
(I.R.S. Employer Identification No.)

22107-0910
(Zip Code)

Registrant's telephone number, including area code: (703) 854-6000

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

Title of Each Class
Common Stock, par value $0.01 per share

Name of Each Exchange on Which Registered
The New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Securities registered pursuant to Section 12(g) of the Act: None

Yes

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

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

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 (Check box if no delinquent filers).

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 Act). Yes

The aggregate market value of the voting common equity held by non-affiliates of the registrant based on the closing sales price of the
registrant's Common Stock as reported on The New York Stock Exchange on June 29, 2018 was $1,263,846,668. The registrant has no non-
voting common equity.

As of February 22, 2019, 114,464,701 shares of the registrant's Common Stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The definitive proxy statement relating to the registrant's Annual Meeting of Shareholders for 2019 is incorporated by reference in Part III

to the extent described therein.

INDEX TO GANNETT CO., INC.
2018 FORM 10-K

Business

Risk Factors

Unresolved Staff Comments

Properties

Legal Proceedings

Mine Safety Disclosures

Part I

Part II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities

Selected Financial Data

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item No.

1A.

1B.

7A.

Quantitative and Qualitative Disclosures about Market Risk

Financial Statements and Supplementary Data

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

9A.

Controls and Procedures

Directors, Executive Officers and Corporate Governance

Executive Compensation

Part III

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Certain Relationships and Related Transactions, and Director Independence

Principal Accountant Fees and Services

Part IV

Exhibits and Financial Statement Schedules

Form 10-K Summary

Page

103

105

106

107

110

ITEM 1. BUSINESS

Overview

PART I

Gannett Co., Inc. (Gannett, we, us, our, or the company) is an innovative, digitally focused media and marketing solutions

company committed to fostering the communities in our network and helping them build relationships with their local
businesses.

Gannett owns ReachLocal, Inc. (ReachLocal), a digital marketing solutions company, the USA TODAY NETWORK
(made up of USA TODAY (USAT) and 109 local media organizations in 34 states in the U.S. and Guam, including digital sites
and affiliates), and Newsquest (a wholly owned subsidiary operating in the United Kingdom (U.K.) with more than 150 local
media brands). Through the USA TODAY NETWORK and Newsquest, Gannett delivers high-quality, trusted content where
and when consumers want to engage with it on virtually any device or platform. Additionally, the company has strong
relationships with thousands of marketers 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 operating segments, publishing and
ReachLocal, plus a corporate and other category. A full description of our segments is included in Note 14 — Segment
reporting of the notes to the consolidated financial statements.

The company has made both internal and external digital investments to align with the shift in spending habits to digital

products by both consumers and marketers. In 2018, we acquired WordStream, Inc. (WordStream), a self-service, software-as-
a-solution digital marketing services company that broadened our product suite and expanded our client base. In 2018, total
digital revenues were $1.1 billion, or 36% of total company revenues. The USA TODAY NETWORK, with more than 3,200
journalists, averaged approximately 126 million(a) (see "References" section below) monthly unique visitors who access content
through desktops, smartphones, and tablets. In November 2018, the company achieved a record 133 million(a) unique digital
visitors in the U.S. In the U.K., Newsquest is a publishing and digital leader with approximately 800 journalists and a network
of web sites that attracts over 25 million(b) unique visitors monthly.

Publishing Segment

Our publishing segment comprises the USA TODAY NETWORK (as described above) and Newsquest. Since its

introduction in 1982, USA TODAY has been a cornerstone of the national news landscape and is a recognizable and respected
brand. Through the execution of our business strategy since our spin-off, we have taken a series of steps that have culminated in
the creation of the USA TODAY NETWORK.

•

In 2015, we leveraged the strong USA TODAY brand and created the USA TODAY NETWORK, the largest local to

national media network in the country, with full-scale content sharing capabilities across all sites.

•

In 2017, we started a branding refresh of our print and digital products across our U.S. markets with the goal to unify
our digital network, modernize our visual storytelling, create a more contemporary look for our advertisers and partnerships,
and attract new audiences.

•

In 2018, we completed the brand refresh and were recognized with several awards, including “Best Global New Print

Product” as awarded by the International News Media Association. Additionally, the USA TODAY NETWORK was awarded
three Pulitzer Prizes in 2018 for local reporting, editorial writing, and explanatory journalism, highlighting our ability to
integrate in-depth reporting with cutting edge technology. We also expanded the size of our investigative journalism team and
launched “The City,” named one of Apple's Best Podcasts in 2018.

•

In 2018, we also launched LOCALiQ, our new data-driven, marketing solutions brand which packages together all of
our advertising and marketing capabilities including products such as search engine marketing, display retargeting, location
and reputation management, and website development.

The scale of our consumer audience across our publishing business makes us an attractive marketing partner to various

national and local businesses trying to reach consumers. We are the leading newspaper publisher in the U.S. in terms of
circulation and have the fourth largest digital audience in the News and Information category based on December 2018
Comscore Media Metrics; per those metrics, our content reaches more people digitally than Fox News, CBSnews.com, New
York Times Digital, BuzzFeed.com, or WashingtonPost.com.(a)

• At our U.S. local publishing operations, the average daily print readership is approximately 11 million on Sundays and
5 million daily Monday through Saturday, while the digital audience averages nearly 45 million(a) unique visitors per month.
At our flagship brand, USA TODAY, print readership averages over 1.6 million daily Monday to Friday, while the digital
audience averages approximately 81 million(a) unique visitors per month. While our print audience tends to skew to an older
demographic, our digital audience skews younger as evidenced by 47%(a) of the total U.S. digital millennial audience (ages
18 - 34) accessing USA TODAY NETWORK content monthly.

•

In the U.K., our wholly-owned subsidiary Newsquest has a total average print readership of over 8 million every

week. Newsquest’s digital audience in 2018 had an average of 25.3 million(b) monthly unique users.

As digital media consumption shifts to mobile devices and social media, our audiences on these platforms continue to

grow. The USA TODAY NETWORK consistently ranks in the top three in mobile web unique visitors in the News and
Information category, finishing December 2018 at #1(a). Total mobile web page views for the USA TODAY NETWORK grew
10%(b) in December 2018, evidence our content successfully resonates on mobile devices. On social platforms, we focus on
creating franchises to drive user engagement and had great success with our "Kind" brands (Animalkind, Humankind, and
Militarykind). In 2018, the Kind brands produced 5.1 billion(c) video views and added more than 8.9 million followers. These
results show that regardless of platform, our content drives engagement. At Newsquest, mobile monthly unique users also
increased 1%(b) and mobile article page views grew 3%(b) in 2018 on a year-over-year basis.

The publishing segment generates revenue primarily through advertising and subscriptions to our print and digital
publications and to a lesser extent commercial printing and distribution, marketing, and data services. USA TODAY and our
local publications have developed an efficient operating model utilizing integrated shared support for back-office operations
such as financial services and accounting, content design and layout services, print and digital creative development, and
certain sales and service platforms. This model also serves as a point of leverage and synergy opportunity with respect to
businesses acquired by the company.

Advertising: In 2018, publishing segment advertising and marketing services revenues of $1.3 billion comprised 51% of
total publishing segment revenues, down from 53% in 2017. We track our print advertising in three primary categories: local,
national, and classified. Below are descriptions of the three categories:

• Local advertising is associated with local merchants or locally owned businesses. Ads run in our print products, such
as our daily or non-daily publications, and are either run-of-press (ROP) or preprinted inserts (typically stand-alone, multiple
page fliers inserted into daily and Sunday print products).

• National advertising is principally associated with advertisers who are promoting national products or brands.
Examples are retailers, commercial banks, airlines, and telecom. It also includes national brands that advertise in our local
markets. Similar to local, ads are either ROP or preprints.

• Classified advertising includes the major categories of automotive, employment, legal, and real estate/rentals.
Advertising for classified segments is published in the classified sections or other sections within the publication and in
certain magazines.

In 2018, we split our digital advertising and marketing services revenues into three main categories: digital media, digital

classified, and digital marketing services. Below are descriptions of these three categories:

• Digital media represents all display advertising either delivered on our products or off-platform on partner channels

such as Facebook Instant Articles and Apple News.

• Digital classified encompasses digital advertising revenues associated with our classified partnerships including auto

(Cars.com) and employment (PandoLogic) as well as real estate, legal, and obituaries.

• Digital marketing services represents the suite of ReachLocal products being offered in our local markets as well as e-

mail marketing.

2018 was a year of transition as we restructured and focused our local sales organization to better align with our customers

based on level of spending and marketing objectives. In focusing our local sales organization, we categorized the retail teams
into three main categories: metros/communities, strategics, and SMB (small and medium-sized business), with sales strategies
tailored to individual client accounts rather than a “one size fits all" approach. We also centralized our pre-sales client solutions
team and streamlined our post-sales operations, gaining efficiencies and improving post-sales reporting. In conjunction with the
sales and post-sales reorganizations, in September 2018 we launched LOCALiQ, our go-to-market product solution brand that
better packages our broad set of marketing solutions to enable a more consultative sale. In addition to our local sales
organizations, we also have separate sales organizations that focus on the national, classified (employment and SMB
classifieds), and auto categories, key categories utilizing unique sales approaches.

Our advertising teams employ a multi-platform approach to advertising sales, which can be specifically tailored to the

individual needs of advertisers from small, locally-owned merchants to large, complex businesses. We believe local and
national advertisers find it challenging to manage the complexity of their media budgets, particularly on the digital side, and are
seeking to reach a shifting audience while also desiring to influence attitudes and behavior at each stage of the purchase path.
Our diverse sales force, unique industry scale, and broad portfolio of print and digital products position us well to solve these
challenges. Through our media planning process, we present advertisers with targeted, integrated solutions that help advertisers
reach this shifting audience. To help improve the planning process and maximize our clients' return on investment, in the third
quarter of 2018 we launched our “Grader” tool. Grader is a proprietary digital auditing technology that provides guidance,
context, and recommendations around a business’ online marketing presence, including specific budgets with a defined set of
outcomes that can be expected by the client. Grader combines smart insights and data intelligence to empower a business by
comparing its digital presence to that of its competitors. The technology provides recommendations of marketing approaches
without costly trial and error, leading to a much better and faster return on investment.

Our advertising revenues are subject to moderate seasonality due primarily to fluctuations in advertising volumes. Our

advertising revenues for publishing are typically highest in the company's fourth quarter due to holiday and seasonal
advertising and lowest in the first quarter following the holiday season. The volume of advertising sales in any period is also
impacted by other external factors such as competitors' pricing, advertisers' decisions to increase or decrease their advertising
expenditures in response to anticipated consumer demand, and general economic conditions.

Circulation: In 2018, publishing segment circulation revenues of $1.1 billion comprised 42% of total publishing segment

revenues, up from 40% in 2017. In a trend generally consistent within the domestic publishing industry, print circulation
volumes declined in 2018. Circulation revenues in the U.S. are derived from our Full Access Content Subscription Model,
single-copy sales, hotel sales, and digital-only subscriptions. Circulation revenues at Newsquest are more centered on single-
copy sales with a larger portion of weekly paid-for titles and free titles as compared to our U.S. publications. Additionally,
Newsquest employs a regional model, generally involving clustering products, which allows for the cross-selling of advertising
serving the same or contiguous markets.

Our Full Access Content Subscription Model in our local markets includes access to our content via multiple platforms

including websites, smartphone and tablet applications, and e-newspapers, with subscription prices that vary according to the
frequency of delivery of the print edition. Also available to subscribers are digital only or digital plus Sunday subscriptions. We
currently have approximately 1.8 million digital activated subscribers via our Full Access Content Subscription Model. We
offer our customers EZ Pay, a payment system which automatically deducts subscription payments from customers' credit cards
or bank accounts; we see better subscriber retention with our EZ Pay customers. At the end of 2018, EZ Pay was used by 60%
of all subscribers at local U.S. Gannett sites (not including USA TODAY).

Growing our digital-only subscribers is a strategic priority and, in 2018, our digital-only subscribers increased by 46% to

approximately 504,000. Our primary digital subscriber acquisition strategies include on-site promotion, e-mail marketing,
social marketing, and event marketing. A variety of pricing strategies are used throughout the year, including discounted
introductory periods and sales, to encourage trial and habituation before transitioning to the full price rate. In the U.S. local
markets, approximately 82% of circulation revenue is derived from our Full Access Content Subscription Model and digital-
only subscriptions.

In addition to the subscription model in our U.S. local markets, single-copy print editions continue to be sold at retail
outlets and account for approximately 11% of daily and 20% of Sunday net paid circulation volume. Approximately 77% of net
paid circulation volumes of USA TODAY are generated by single-copy sales at retail outlets, vending machines, or hotels that
provide copies to their guests. The remainder is generated by home and office delivery, mail, educational, and other sales.

Production and Distribution: Gannett Publishing Services (GPS) was formed to improve the efficiency and reduce the

cost associated with the production and distribution of the Gannett printed products across all divisions in the U.S. GPS
manages the production and circulation operations for all our local daily and non-daily newspapers as well as USA TODAY and
runs a commercial printing and delivery business that generates revenues from third party publishers.

GPS leverages our existing assets, including employee talent and experience, physical plants and equipment, and our vast

national and local distribution networks. GPS is particularly focused on maximizing our geographic footprint to most
efficiently produce and transport our printed product. GPS is responsible for internal and external printing, packaging, and
distribution. Over the last several years, GPS has actively outsourced printing activities to competitive local market or regional
printing businesses in situations where the cost to outsource would benefit Gannett. Alternatively, in certain cases, GPS will
utilize excess printing capacity to print competitor and other publications.

Newsquest operates its publishing activities in a similar manner to GPS, through regional centers to maximize the use of

management, finance, printing, and personnel resources. This regional approach allows the business to leverage a variety of
back-office and administrative activities to optimize financial results and enables the group to offer readers and advertisers a
range of attractive products across the market.

Competition: Our U.S. and U.K. publishing operations and affiliated digital platforms compete with other media and
digital companies for advertising and marketing spend. Our publishing operations also compete for circulation and readership
against other news and information outlets and amateur content creators. While very few of our publishing operations have
similar daily print competitors that are published in the same city, our print products compete with the following types of
businesses:

• National, regional and smaller suburban area newspapers and free or paid publications

• Other media including magazines, television, direct mail, cable television, radio, outdoor/billboard advertising,

directories, e-mail marketing, web sites, mobile-device platforms, and social platforms.

Development of opportunities in, and competition from, digital media, including web sites, tablet, mobile, and social
products continues to increase. As such, there is very little barrier to entry and limited capital requirements for new companies
to enter the market with competitive digital products. The company will continue to expand its audience reach in the digital
media industry through internal audience development efforts, content distribution programs, acquisitions, and partnerships to
protect its audience market share. Additionally, the company will continue to improve its suite of advertising and marketing
services products through both internal development, acquisitions and partnerships to protect its advertising market share.

Environmental Regulation: The company is committed to protecting the environment. Our goal is to ensure our
production and distribution facilities comply with federal, state, local, and foreign environmental laws and to incorporate
appropriate environmental practices and standards in our operations. We are one of the industry leaders in the use of recycled
newsprint. During 2018, 17% of our domestic newsprint purchases contained recycled content, with average recycled content
of 45%.

Our operations use inks, solvents, and fuels. The use, management, and disposal of these substances are sometimes
regulated by environmental agencies. We retain a corporate environmental consultant who, along with internal and outside
counsel, oversees regulatory compliance and preventive measures. Some of our subsidiaries have been included among the
potentially responsible parties in connection with sites that have been identified as possibly requiring environmental
remediation, although we do not currently anticipate these designations will have a material impact on our results of operations
or cash flows.

Raw Materials: Newsprint, which is the basic raw material used in our print publications, has been and may continue to be

subject to significant price changes from time to time. For example, in the first half of 2018, many Canadian producers were
subjected to significant anti-dumping and countervailing duties upon importation of newsprint into the U.S. which resulted in
higher newsprint prices and tighter supply from the Canadian producers. Prices ultimately came down in the second half of the
year as the duties were eliminated by the International Trade Commission in September 2018, but this example serves as a
reminder of the price and supply volatility that can impact the market.

We purchase newsprint primarily from 14 domestic and global suppliers. During 2018, our total newsprint consumption

was approximately 220,000 metric tons, including consumption by our owned and operated print sites, third-party printing
sites, and Newsquest. Newsprint consumption in 2018 was 19% less than in 2017. We continue to moderate newsprint
consumption and expense through the use of lighter basis weight paper. Our ability to supply the needs of our publishing
operations depends upon the continuing availability of newsprint at an acceptable price, and the results of operations of our
publishing segment may be impacted significantly by changes in newsprint prices. The availability and price of newsprint is
subject to numerous risks and uncertainties, which are described more fully under “Risk Factors” in this Annual Report on
Form 10-K.

Joint Operating Agencies: Our publishing subsidiaries in Detroit and York each participate in a joint operating agency
(JOA). In each instance, the JOA performs the production, sales, distribution, and back office functions for our subsidiaries and
the publisher of another publication pursuant to a joint operating agreement. Operating results for the Detroit and York JOAs
are fully consolidated along with a charge for the minority partner's share of profits.

ReachLocal Segment

The mission of our ReachLocal segment is to deliver customers to local businesses. ReachLocal, Inc., which was founded

in 2004 and acquired by Gannett in 2016, helps local businesses advertise online to find those customers. We believe local
businesses want a single, unified solution to solve their digital marketing needs. Our total digital marketing solution consists of
products and solutions in two categories: digital advertising (including search engine marketing, social advertising, and display
advertising) and subscription solutions (including software solutions such as lead conversion software and field management
software and presence solutions such as websites, search engine optimization, listings management, and live chat). In July
2018, Gannett acquired WordStream, a provider of cloud-based software-as-a-service (SaaS) solutions for local and regional
businesses and agencies to optimize their digital advertising campaigns. WordStream’s solutions are included with our
subscription solutions.

Products: Our digital advertising products are headlined by our search engine marketing (SEM) solution that combines
search engine marketing optimized across multiple publishers, call tracking and call recording services, and industry leading
campaign performance transparency. Our SEM offering is a leading product for local businesses and has won numerous awards
since its rollout, including most recently winning Google's Quality Score Champion Award in North America. It is optimized
for local markets in each of the locations in which our ReachLocal segment operates. Search engine marketing accounted for
67% of our ReachLocal segment’s revenue for the year ended December 31, 2018.

We also offer online advertising products focused on maximizing local businesses’ exposure by displaying their ads on
websites that, in the aggregate, reach more than 90% of the U.S. online audience. We offer a Facebook advertising solution that
incorporates our proprietary goal-based smart optimization. Our display products include a retargeting solution to target
consumers who have previously visited a specific client's website through one of our digital advertising campaigns or who have
previously searched for a client's keywords and other display products. These products are generally available in North
America and selectively available in ReachLocal's international markets.

In addition, we offer a number of subscription solutions. Our software solutions include our WordStream software and

related services that enable our clients to optimize their own digital advertising campaigns ("do-it-yourself"). Our lead
conversion software is a marketing automation platform that includes tools for capturing web traffic information and converting
leads into new customers for clients. We provide clients with tools designed to significantly improve their conversion of leads
to customers and also help clients stay top-of-mind during the prospect's decision-making process by using integrated
marketing automation to send new prospects targeted e-mails and alerts to the client's staff reminding them to follow up on
each lead. Our lead conversion software also provides reports to show clients how many leads they are getting from each
marketing source and other important business insights. Our field management solution is a cloud-based business management
software for service businesses and allows us to provide an end-to-end solution to clients that starts with lead generation (e.g.,
digital advertising), includes lead conversion, and then closes and manages the business relationship. Our software solutions are
available in North America and our lead conversion software is available in all of our markets.

Our subscription solutions also include presence solutions, including websites, search engine optimization, live chat,
listings management, store locator, and other products and solutions, all focused on expanding and leveraging clients' web
presence. Often, these products are designed to work in concert with our digital advertising products with a goal of enhancing
clients’ marketing return on investment. These products are generally available in North America and selectively available in
our international markets.

Distribution: We deliver our suite of products and solutions to local businesses through a combination of our proprietary

technology platform, our sales force, and select third-party agencies and resellers. Our ReachLocal segment has sales
operations in the United States, Canada, Australia, New Zealand, and Brazil. Approximately 82% of revenues are derived in
North America and the remaining 18% from other international markets. All ReachLocal segment revenues are digital
revenues.

Competition: The market for local online advertising solutions is intensely competitive and rapidly changing. The market

is highly fragmented as there are a number of smaller companies which provide internet marketing services at highly
competitive prices and, increasingly, we compete with vertical-specific SMB marketing providers who offer solutions tailored
for specific verticals. In addition, the online publishers that we utilize for clients, such as Google, Yahoo!, and Microsoft,
generally offer their products and services through self-service platforms. Many traditional offline media companies also offer
online advertising solutions and have large, direct sales forces and digital publishing properties. With the introduction of new
technologies and market entrants, we expect competition to intensify in the future.

Strategy

Gannett’s vision is to become essential to consumers and marketers seeking meaningful connections with their

communities across print, digital and other channels. We are committed to a business strategy that drives audience growth and
engagement by delivering deeper content experiences to our audience while offering the products and marketing expertise our
advertisers desire. The execution of this strategy should allow the company to continue its evolution from a more traditional
print media business to a digitally focused media and marketing services business.

Key elements of our strategy are as follows:

Leverage nationwide scale and local presence to expand and deepen our relationships with consumers and marketers.

The broad reach of both the USA TODAY NETWORK, with 109 local properties plus USA TODAY, and Newsquest, with
more than 150 local media brands, gives us the ability to deepen our relationships with both consumers and advertisers at a
national and local level. Through the USA TODAY NETWORK, we bring consumers the local news and information that
impacts their day-to-day lives while keeping them informed of the national events that impact their country. To further drive
audience growth and engagement across our domestic and international media brands, we will leverage the network to expand
our content offerings to extend beyond news into new verticals, including lifestyle content such as food, health, and fitness. We
intend to deepen our relationships with our subscribers by offering a membership model providing access to local events and
experiences. For advertisers, we plan to leverage our broad sales footprint and strong customer relationships to aggressively
expand our digital marketing services business into our local markets, both domestically and internationally. Given our
extensive client base and volume of digital campaigns, we will also use data and insights to offer new and dynamic advertising
products that can deliver superior results.

Accelerate expansion of our digital businesses through innovative consumer experiences and new marketing solutions.
In 2018, we continued the development of new consumer experiences through new storytelling platforms like podcasts as well
as improving our digital products. We will continue to deepen overall engagement and drive audience growth in 2019 by further
expanding our product offerings in these new mediums. During 2018, we further extended and scaled ReachLocal’s digital
marketing offerings in our local markets. In 2019, we will continue to expand our digital marketing footprint through
LOCALiQ as well as integrating WordStream’s software-as-a-service (SaaS) product offering. We will also continue to evolve
our branded content offerings while building new and innovative ad products that will drive engagement for our local and
national advertisers.

Pursue opportunistic acquisitions. We are well-positioned to pursue value-enhancing investments and acquisitions while

being both disciplined and opportunistic in our acquisition strategy. Our balance sheet remains strong and our cash flow
generation capabilities provide us with the financial flexibility to pursue opportunities of various sizes. In 2018, our focus
shifted from acquiring traditional print businesses to digital acquisitions that either expand our digital marketing services
portfolio or broaden our content offerings. For example, we acquired WordStream, a software-as-a-service (SaaS) provider
focused on the “do-it-yourself” category of the digital marketing services market, which added a new capability to the product
portfolio of ReachLocal. We will still explore traditional print acquisitions that fit our geographic profile and offer strong
synergy opportunities.

Maximize the value of our legacy print business and rationalize our cost base. We will continue to drive the profitability

of our traditional print operations by rationalizing our cost infrastructure and maximizing our revenue base. To drive greater
cost savings, we will continue to centralize operations to increase efficiencies with focus on our printing and distribution
centers, content creation network, advertising sales and finance operations structure. Our economies of scale will enable us to

continue to reduce supply chain costs while streamlining the process of producing newspapers. We will also explore
outsourcing certain business functions to reduce costs. On the revenue side, we will implement new initiatives aimed at
increasing our advertisers' return on investment while reducing our overall advertiser churn. Our circulation pricing strategy
will center on strategic price increases while delivering greater value to our most loyal subscribers through membership
opportunities.

Maintain a flexible balance sheet with emphasis on capital allocation. Through aggressive cost management and

disciplined financial policies, we have been able to maintain a strong balance sheet with relatively low debt levels compared to
our peers. Our strong balance sheet has enabled us to keep a flexible capital allocation policy with an emphasis on returning
cash to shareholders. Since the spin-off from our former parent, we have paid a quarterly dividend of $0.16 per share to
shareholders. In addition, our Board of Directors approved a new three-year, $100 million share repurchase program in May
2018, replacing our initial program dated July 2015. As of December 31, 2018, 5.75 million shares have been repurchased
under the legacy program at an average cost of $8.70 per share while no shares have been repurchased under the new plan.

Strategic Acquisitions

WordStream, Inc. (WordStream): In July 2018, we completed the acquisition of WordStream. WordStream provides
software that enables SMBs to optimize the performance of marketing campaigns on Google, Facebook, and other major
advertising platforms through a variety of software-as-a-service (SaaS) product offerings. WordStream's end-to-end solution
supports SMBs across the entire digital marketing workflow from ad creation to campaign execution to optimization to tracking
and reporting.

SweetIQ Analytics Corp. (SweetIQ): In April 2017, we completed the acquisition of SweetIQ. SweetIQ is a provider of
location and reputation management software that enables businesses to manage their location data and measure consumer
engagement.

ReachLocal, Inc. (ReachLocal): In August 2016, we completed the acquisition of ReachLocal. ReachLocal offers online

marketing, digital advertising, software-as-a-service, and web presence products and solutions to small and medium-sized
businesses. It delivers its suite of products and solutions to local businesses through a combination of its proprietary technology
platform, its sales force, and select third-party agencies and resellers.

North Jersey Media Group, Inc. (NJMG): In July 2016, we completed the acquisition of certain assets of NJMG. NJMG is

a media company with print and digital publishing operations serving primarily the northern New Jersey market. Its brands
include such established names as The Record (Bergen County) and The Herald.

Journal Media Group, Inc. (JMG): In April 2016, we completed the acquisition of JMG. JMG is a media company with
print and digital publishing operations serving 15 U.S. markets in nine states, including the Milwaukee Journal Sentinel, the
Knoxville News Sentinel, and The Commercial Appeal in Memphis. The acquisition expanded our print and digital publishing
operations domestically.

History

Our newspaper business was founded by Frank E. Gannett and associates in 1906 and incorporated in 1923. We were
separated from our former parent on June 29, 2015 when our former parent distributed 98.5% of the outstanding shares of
Gannett common stock (also referred to herein as the spin-off or separation) to its stockholders on a pro rata basis. We are listed
on the New York Stock Exchange under the symbol GCI and are headquartered in McLean, VA near Washington, DC.

Employees

We employed approximately 13,700 persons at our subsidiaries in the U.S. as of December 31, 2018. Approximately 14%

of those employed by us in the U.S. are represented by labor unions, most of which are affiliated with one of seven
international unions. These represented employees are covered by approximately 29 collective bargaining agreements. These
agreements conform generally with the pattern of labor agreements in the publishing industry. We do not engage in industry-
wide or company-wide bargaining. Our U.K. subsidiaries bargain with two unions over working practices, wages, and health
and safety issues only. There were approximately 3,280 employees outside of the U.S., including approximately 2,600
employed by Newsquest in the U.K.

Internet Access

Our reports on Forms 10-K, 10-Q, and 8-K and all amendments to those reports are available without charge through the

company's website (www.gannett.com) on the internet as soon as reasonably practicable after they are electronically filed with
or furnished to the U.S. Securities and Exchange Commission (SEC). We also will disclose on this website changes to, or
waivers of, our corporate Ethics Policy. Information on our website does not constitute part of this Form 10-K.

References

(a) Comscore Media Metrics

(b) Adobe Analytics

Major Publications and Markets We Serve

We reach a large, diverse audience through our print and digital daily and non-daily publications throughout the U.S. Our
local and national media brands are united under the USA TODAY NETWORK, the largest local to national media network in
the U.S. The network is powered by an integrated and award-winning news organization comprising more than 3,200
journalists with deep roots in 109 local communities, plus USA TODAY, and a combined reach of more than 126 million
visitors monthly.

The following table lists information for our major publications and their affiliated digital platforms in the U.S. as of

December 31, 2018:

Title

Related Website(s)

Location

USA TODAY

Detroit Free Press

The Arizona Republic

Milwaukee Journal Sentinel

The Indianapolis Star

The Cincinnati Enquirer

The Courier-Journal

The Record

www.usatoday.com

www.freep.com

www.azcentral.com

www.jsonline.com

www.indystar.com

www.cincinnati.com

McLean, Virginia

Detroit, Michigan

Phoenix, Arizona

Milwaukee, Wisconsin

Indianapolis, Indiana

Cincinnati, Ohio

www.courier-journal.com

Louisville, Kentucky

www.northjersey.com

Bergen, New Jersey

The Des Moines Register

www.desmoinesregister.com

Des Moines, Iowa

Daily(a)
2,632,392

148,904

130,283

111,251

84,831

71,749

70,339

68,630

59,921

Sunday(a)
2,554,405

933,926

378,602

170,791

196,584

141,934

157,396

90,352

129,462

Democrat and Chronicle
(a) Daily and Sunday combined average circulation is print, digital replica, digital non-replica, and affiliated publications according to the Alliance for Audited

www.democratandchronicle.com Rochester, New York

100,479

57,773

Media's September 2018 Quarterly Publisher's Statement.

The following table presents information for our local media organizations and affiliated digital platforms within the USA

TODAY NETWORK on a state-by-state basis, including the major publications listed in the table above, as of December 31,
2018:

USA TODAY NETWORK MEDIA ORGANIZATIONS AND AFFILIATED DIGITAL PLATFORMS

State / Territory

Number of Local
Media
Organizations(a)
1

Alabama

Arizona

Arkansas

California

Colorado

Delaware

Florida

Guam

Indiana

Iowa

Kentucky

Louisiana

Maryland

Michigan

Minnesota

Mississippi

Missouri

Montana

Nevada

New Jersey

New Mexico

New York

North Carolina

Ohio

Oregon

Pennsylvania

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

Daily(a)
13,124

130,283

5,599

66,619

15,238

41,685

152,276
(a)

142,463

66,804

74,163

37,122

7,627

193,221

13,597

27,779

18,844

14,470

20,745

165,179

25,844

138,453

20,430

120,114

20,809

43,078

37,697

20,454

160,589

61,337

7,706

8,463

Sunday(a)
16,691

378,602

68,982

19,145

76,677

246,782
(a)

274,640

129,967

162,169

47,200

9,949

1,117,025

17,208

31,389

39,246

15,916

41,415

224,703

21,962

202,875

37,889

192,342

25,602

60,023

92,061

43,885

305,673

148,383

9,487

9,927

2,648,758

11,696

2,573,380

13,244

Wisconsin
(a) Daily and Sunday combined average circulation is print, digital replica, digital non-replica, and affiliated publications according to the Alliance for Audited
Media's September 2018 Quarterly Publisher's Statement. Note certain publications may be excluded from the company's reporting to the Alliance for
Audited Media because they are lower frequency dailies that do not have a 5-day average or are located outside of the contiguous United States.

302,500

216,661

Newsquest has a portfolio of over 150 news brands and more than 150 magazines, published in print and online in the U.K.

With a digital audience of more than 25 million users a month and more than 8.0 million readers in print, Newsquest's content
is read by a substantial portion of the U.K. population. In addition to local news brands, Newsquest owns the digital businesses
s1, Exchange & Mart, and a specialist magazine business.

The following table presents information for our major local media organizations and affiliated digital platforms operated
by Newsquest in the U.K. as of December 31, 2018. All circulation figures are according to ABC results for the period January
to June 2018.

DAILY PAID-FOR LOCAL MEDIA ORGANIZATIONS AND AFFILIATED DIGITAL PLATFORMS / NEWSQUEST
Circulation
Monday - Saturday
15,978

Local Media
Organization / Web Site

Basildon, Southend on Sea

www.echo-news.co.uk

Publication

City

Basildon & Southend Echo

Bolton News

Bolton

www.theboltonnews.co.uk

Bournemouth - The Daily Echo

Bournemouth

www.bournemouthecho.co.uk

Bradford Telegraph & Argus

Colchester Daily Gazette

Dorset Echo

Glasgow - Evening Times
Greenock Telegraph(a)
Lancashire Telegraph

Oxford Mail

South Wales Argus - Newport

Bradford

Colchester

Dorset

Glasgow

Greenock

www.thetelegraphandargus.co.uk

www.gazette-news.co.uk

www.dorsetecho.co.uk

www.eveningtimes.co.uk

www.greenocktelegraph.co.uk

Blackburn, Burnley

www.lancashiretelegraph.co.uk

Oxford

Newport

www.oxfordmail.co.uk

www.southwalesargus.co.uk

Southampton - Southern Daily Echo

Southampton

www.dailyecho.co.uk

Swindon Advertiser

The Argus Brighton

The Herald, Scotland
The National, Scotland(a)
The Northern Echo

The Press - York

Worcester News

The Leader

The Mail

News & Star

Swindon

Brighton

Glasgow, Edinburgh

Darlington

York

Worcester

Wrexham

Cumbria

Carlisle

www.swindonadvertiser.co.uk

www.theargus.co.uk

www.heraldscotland.co.uk

www.thenational.scot

www.thisisthenortheast.co.uk

www.yorkpress.co.uk

www.worcesternews.co.uk

www.leaderlive.co.uk

www.nwemail.co.uk

www.newsandstar.co.uk

(a)

Circulation figures are according to ABC results for the period January to December 2017 as 2018 results are not available.

8,166

11,521

11,204

8,232

8,700

19,130

8,959

8,149

9,038

9,362

13,665

8,481

10,212

24,265

9,746

20,323

11,922

5,995

8,603

5,287

6,467

ITEM 1A. RISK FACTORS

In addition to the other information contained or incorporated by reference into this Form 10-K, prospective investors
should consider carefully the following risk factors before investing in our securities. The risks described below may not be the
only risks we face. Additional risks that we do not yet perceive or that we currently believe are immaterial may adversely affect
our business and the trading price of our securities.

Risks Relating to Our Business

Risks Relating to Our Business Strategy

We may be unsuccessful in effectively implementing our business strategy or achieving all of its expected benefits.

Gannett’s vision is to become the daily destination for consumers and marketers seeking meaningful connections with their

communities across print, digital, and other channels. We are committed to a business strategy that is focused on driving
audience growth and engagement by delivering deeper content experiences to our audience while offering the products and
marketing expertise our advertisers desire. Accordingly, we have realigned our management team to focus on two primary
areas: marketing solutions and consumer.

Our ability to implement our strategy effectively is subject to several risks, including:

• The strategy may require significant time and investment, and the investments may result in lower margins and

increase our operating expenses or capital expenditures;

• The reorganization of personnel, including senior executives, required to implement our strategy may be disruptive to,
or cause uncertainty in, our business. The failure to ensure a smooth transition and effective transfer of knowledge
involving senior employees could hinder our strategic execution and succession planning;

• We may be unsuccessful in recruiting and retaining the talent required to operate and grow our digital marketing

solutions and content businesses or to internally develop related technologies. We expect to face competition for such
talent from larger or more well established digital companies with a stronger digital brand association and greater
resources; and

• The technology required to support our digital marketing solutions or consumer businesses may be unavailable, and

we may be unsuccessful in developing it internally.

Even if we implement our strategy effectively, it may not produce an increase in digital revenues that sufficiently offsets
the declines we are experiencing in our traditional print media business. If we fail to implement our strategy effectively or if our
strategy ultimately does not yield a sufficient increase in digital revenues, our business, financial condition, and results of
operations may be adversely affected.

The reorganization of our sales force to better align with our business strategy may be disruptive to our operations, and

it might not yield the long-term benefits we expect.

In 2018, we initiated a reorganization of our advertising sales organization to better align with our business strategy. The
reorganization aims to better align our sales organization with the needs of our various client categories. As part of this effort,
we launched LOCALiQ, a data-driven marketing solution designed to combine all of our online and offline advertising
offerings into a comprehensive, simplified package.

The reorganization of our advertising sales organization is subject to several risks, including:

• The reorganization may be disruptive to existing relationships with advertisers;

• We may be unsuccessful in training our existing sales force on our entire suite of advertising products and services,
including additional products or services we may add to our suite through acquisitions or internal development;

• We may be unsuccessful in recruiting and retaining sales personnel with the knowledge and skills required to market

our products and services effectively; and

• The LOCALiQ brand may not achieve recognition in the market.

If the disruption caused by the sales reorganization persists longer than anticipated or we are unable to achieve the long-

term benefits anticipated, our business, financial condition, and results of operations may be adversely affected.

Risks Relating to Our Publishing Segment

Our publishing segment's operating results will be materially adversely affected if we do not respond successfully to the

shift in our consumers’ preferences, behaviors, and demographics away from traditional print and towards digital media
and the associated shift in the allocation of advertising expenditures. Significant capital investments may be needed to
respond to this shift.

Advances in technology have led to a proliferation of delivery methods for news and information. The number of
consumers who access news and information online through personal computers, smartphones, handheld tablets, and mobile
devices has increased dramatically over the past decade and likely will continue to increase. This trend is furthered by
demographic shifts, with traditional print newspaper readers getting older and younger generations developing the habit of
consuming news through digital media. As a result, the media industry has experienced rapid evolution in consumer demands
and expectations. Presented with a multitude of media choices and sources of free information, consumers seem to be focusing
more on the convenience and price of content and less on the source, quality, or reliability of content. The consumption and
acceptance of poorly-sourced news online and through social media has undercut certain competitive advantages that we
possessed as a trusted provider of local news and information across the USA TODAY NETWORK and at Newsquest. As a
result, the publishing business is generally characterized by declining print circulation revenues. In addition, the advertising
revenues generated by media companies have been affected significantly by the shift in advertising expenditures towards digital
media. Media companies generally charge much lower rates for digital advertising than for print advertising due to the range of
advertising choices across digital products and platforms and the large inventory of available digital advertising space, and
mobile advertising rates typically are even lower than desktop digital rates.

Our success therefore depends on our ability to develop and manage our digital businesses in response to the shift in
consumers’ preferences, behavior, and demographics, as well as the related shift in the allocation of advertising expenditures as
described above. In particular, we must continue to:

•

Increase digital audiences, grow the number of digital-only subscribers to our consumer products, and increase how
much they pay for those products;

• Attract advertisers to our digital products;

• Tailor our products for mobile devices;

•

Structure our sales force to market our entire suite of advertising products and services, including print, digital display,
and digital marketing services;

• Attract and retain employees with the skills and knowledge needed to successfully operate digital businesses;

• Manage the transition to a digital business from historical print businesses, including by reducing the physical and

distribution infrastructure and related fixed costs associated with those businesses;

• Broaden our content offerings to encompass offerings outside of the traditional news and information category; and

•

Invest funds and resources in digital opportunities.

If we are unable to exploit new and existing technologies to distinguish our publishing segment's products from those of

our competitors, develop in a timely manner compelling new products that engage users across multiple platforms, expand our
content offerings beyond the news and information category, or offer effective online and offline advertising solutions to our
marketing clients, our business, financial condition, and results of operations may be adversely affected. Responding to the
changes described above may require us to make significant capital investments and incur significant research and development
costs related to building, maintaining, and evolving our technology infrastructure, and our ability to make the level of
investments required may be limited.

As digital revenues increase as a proportion of our total revenues, we will become increasingly subject to risks

associated with digital media operations.

As we increasingly transition from traditional print businesses to digital media businesses, we expect our digital revenues

to increase as a percentage of our total revenues in future periods. We therefore expect to face increasing risks related to our
digital media operations, including:

• Rates we achieve in the marketplace for the advertising inventory on our digital platforms may be adversely affected

by:

News aggregation websites and customized news feeds (often free to users), which may reduce our traffic

levels by creating a disincentive for users to visit our websites or use our digital products;

Our inability to successfully manage changes in search engine optimization and social media traffic to

increase our digital presence and visibility, which also may reduce our traffic levels; or

Our inability to maintain and improve the performance of our customers' advertising on our digital properties;

• Our use of subscription models (which requires users to pay for content after accessing a limited number of pages or
news articles for free on our websites each month) or increases in the rates for digital subscriptions may cause
consumers to opt out of subscription offers in greater numbers than anticipated or result in fewer page views or unique
visitors to our websites than projected;

• Technical or other problems could prevent us from delivering our products in a rapid and reliable manner or otherwise
affect the user experience, and users could develop negative views about the quality or usefulness of our products;

• New delivery platforms may lead to pricing restrictions, loss of distribution control, or loss of direct relationships with

consumers;

• Mobile devices, including smartphones and tablets, may present challenges for traditional display advertising; and

• Technology developed to block the display of advertising on websites could proliferate, impairing our ability to

generate digital revenues.

Our inability to respond successfully to these or similar challenges could materially adversely impact our ability to

maintain and grow our digital revenues.

Our media businesses operate in highly competitive markets, and our ability to maintain market share and generate

operating revenues depends on how effectively we compete with existing and new competition.

Our media businesses compete for audiences and advertising revenue with newspapers and other media such as the
Internet, magazines, broadcast, cable and satellite television, radio, direct mail, outdoor billboards, and yellow pages. Some of
our current and potential competitors have greater financial and other resources than we do. If we fail to compete effectively
with competing newspapers and other media, our results of operations may be materially adversely affected. In addition, our
publications generate a significant portion of their advertising revenues from a few categories, including automotive and
employment classified advertising. As a result, even in the absence of a recession or economic downturn, technological,
industry, or other changes specifically affecting these advertising sources could reduce advertising revenues and materially and
adversely affect our results of operations. Further, our print editions and digital platforms compete directly with well-
established websites dedicated to classified advertising, particularly in the automotive, employment, real estate, and legal
verticals. Our results may be negatively affected if we do not compete effectively online in the classified advertising market.

Economic conditions may adversely affect demand for print and digital advertising, which could lead to further revenue

declines in our publishing segment.

Our advertising revenues depend on the strength of the economy. Our revenues are sensitive to economic trends and
uncertainties, as well as discretionary spending by advertisers both at the national level and in the local markets we serve. A
decline in the financial or economic prospects of current or periodic advertisers could alter their spending priorities. Certain
segments of the economy have been challenged in recent years, particularly in the brick and mortar retail sector, and total
advertising revenues have declined as a result. Advertising revenues may worsen if advertisers reduce their budgets, shift their
spending priorities, are forced to consolidate, or cease operations.

Revenue from printing and distributing publications for third parties may be adversely affected by many of the same

business and industry risks facing us.

We generate a portion of our revenue from printing and distributing third-party publications, and our relationships with
these third parties are generally pursuant to short-term contracts. Those third parties may be negatively affected by the same
macroeconomic and industry trends affecting our media business such as the sensitivity to perceived economic weakness of
discretionary spending by advertisers and subscribers, circulation declines, shifts in consumer habits, and the increasing
popularity of digital media. If the third-party publications are negatively affected by these trends, they may reduce the volume
of publications they print or distribute through us, and as a result we may lose some, or all, of the associated revenue.

The market for newsprint supply continues to experience consolidation and rationalization in response to declining
demand, which has resulted in significant volatility in the price of newsprint and challenges in obtaining newsprint from
suppliers on a timely basis.

Our publishing operations depend significantly upon the continuing availability of newsprint, and our publishing segment's

results of operations are affected significantly by changes in newsprint prices. The supply of available newsprint continues to
decline as producers respond to declining demand by closing paper mills or converting them to packaging, other grades of
paper or specialty products. The closure or conversion of a paper mill, in whole or part, can cause a sudden contraction in the
availability of newsprint, leading to price volatility and unexpected challenges in obtaining newsprint on a timely basis. We
import a significant portion of our newsprint from Canada. During the first half of 2018, anti-dumping and countervailing
duties were imposed on Canadian manufacturers of newsprint, resulting in higher prices from our Canadian producers. These
tariffs were rescinded in September 2018, but similar tariffs could be imposed in the future, further impacting the price of
imported newsprint.

In addition, the price and availability of newsprint to us may be further impacted by:

•

Increases in supplier operating expenses due to rising raw material or energy costs or other factors;

Further reduction in the number of suppliers due to continuing consolidation of North American newsprint mills;

• Challenges in maintaining existing relationships with newsprint suppliers;

•

Increases in freight costs; and

• Unavailability of trucks or other means of transporting newsprint due to changes in trucking regulations and other

factors.

Our publishing segment’s operating expenses may rise if newsprint prices increase significantly. In addition, if newsprint is

undersupplied in the U.S. or U.K. for a protracted period or we experience significant supply chain disruptions, our business
and operations may be materially and adversely affected. We may, among other actions, be forced to limit the length of certain
publications or the frequency with which we print certain publications, which could adversely affect our reputation and
advertiser or subscriber retention.

Our business or results of operations could suffer if we fail to protect our publishing segment's intellectual property and

other proprietary rights.

Our publishing segment's ability to compete depends, in part, upon our intellectual property, including our trademarks (e.g.,

mastheads), copyrights (e.g., content), and proprietary technology (e.g., digital platforms). If we are unable to protect this
intellectual property, we may not realize the full value of our intellectual property assets, and our business and results of

operations may suffer. We rely on a combination of intellectual property rights, including contractual provisions, confidentiality
procedures and agreements, and trademark, copyright, patent, unfair competition, trade secret, and other laws to protect our
intellectual property. However, these methods afford only limited protection and may not be adequate. For example,
technological advancements have facilitated the unauthorized duplication and wide dissemination of content, making
enforcement of our intellectual property rights in content more challenging. Litigation or proceedings in Federal court or before
the U.S. Patent and Trademark Office or other governmental authorities and administrative bodies may be necessary to enforce
our intellectual property rights. Our efforts to enforce or protect our rights may be ineffective and could result in substantial
costs and diversion of resources.

In addition, third parties might claim that the conduct of our businesses or use of intellectual property infringes upon their
intellectual property rights. Any intellectual property litigation or claims brought against us, whether or not meritorious, could
result in substantial costs and diversion of our resources, and we may not achieve favorable outcomes in all cases. The terms of
any settlement or judgment may require us to pay substantial amounts to the other party or cease exercising our rights in the
intellectual property. We might have to seek a license to continue practices found to be in violation of a third party's rights,
which may not be available on reasonable terms, or at all.

Labor strikes, lockouts and protracted negotiations could lead to business interruptions and increased operating costs,

either for our businesses or for our suppliers.

As of December 31, 2018, union employees comprised approximately 14% of our workforce. We are required to negotiate

collective bargaining agreements on an ongoing basis. If we, or our suppliers, are unable to renew expiring collective
bargaining agreements, affected unions or others could implement strikes, lockouts, work stoppages, or other business
interruptions. A significant labor dispute could materially adversely affect our operating revenues, cash flows, or operating
income by, among other matters, disrupting our ability to provide customers with our products or services. In addition, even if
labor negotiations are resolved successfully, they may lead to greater overall employee costs.

Risks Relating to Our ReachLocal Segment

Weak economic conditions may adversely affect demand for our digital marketing solutions, which may adversely affect

business and operating results of our ReachLocal segment.

The revenues generated by our ReachLocal segment are sensitive to economic fluctuations. Many small and medium-sized

businesses (SMBs) have modest advertising budgets. To the extent economic conditions worsen, our existing and potential
clients may no longer consider investment in our online marketing solutions a necessity or may elect to reduce advertising
budgets. Historically, economic downturns have resulted in overall reductions in advertising spending. In particular, online
marketing advertising solutions may be viewed by some of our existing and potential clients as a lower priority and may be
among the first expenditures reduced as a result of unfavorable economic conditions. These developments could cause us to
respond by temporarily reducing hiring or taking other measures and could have an adverse effect on our business, operating
results, and financial condition.

Our ReachLocal segment's future revenues depend substantially on our ability to successfully develop and launch new

products and services, acquire complimentary products and services, and market those products and services in our local
markets.

Our ReachLocal segment's ability to stay competitive and generate future revenue depends substantially on its successful

development and launch of new products and services on a timely basis. We may be unable to develop new solutions due to
employee turnover, failure to sustain the required level of investment in product and technology development, or difficulties of
designing complex software products, achieving desired functionality, and integrating the new products with its existing
technology. In addition, we intend to supplement our offerings through acquisitions of businesses offering complimentary
products and services such as our acquisition of WordStream in 2018. We may be unsuccessful in integrating acquired products
and services with our existing offerings or may be unable to devote sufficient resources to the further development of the
acquired products and services.

Even after developing or acquiring new solutions, we may be unable to launch them successfully. The sale of new or

additional features, products and services, the value of which may be different from our current solutions or less easily
understood by clients, may require increasingly sophisticated sales efforts as well as additional salesforce training and client
education, any of which could increase operating expenses. Further, the future revenues of our ReachLocal segment depend
substantially on our ability to market the entire LOCALiQ suite of products and solutions, including the publishing segment’s
print and display advertising and the ReachLocal segment’s digital marketing services, to clients in our local markets. If we are

unsuccessful in selling all of our products and services in our local markets, the ReachLocal segment’s results of operations
may be adversely affected.

The market in which our ReachLocal segment operates is intensely competitive, which may adversely impact our

margins. If we do not compete effectively, the segment’s operating results may be adversely affected.

Our ReachLocal segment operates in a highly competitive market. The market for online marketing solutions is rapidly
changing and, with the emergence of new technologies and market entrants, we expect competition to intensify in the future.
Some of our competitors offer products similar to ours at a lower price, putting pressure on us to lower our prices (thereby
reducing margins) or lose clients. Our digital marketing services competitors include online publishers, traditional media
companies, local SMB marketing providers, SMB marketing technology providers, and new competitors that we may face as
we launch new products or enter new markets. Many of our current and potential competitors enjoy substantial competitive
advantages such as greater name recognition, longer operating histories, and substantially greater financial, technical, and other
resources. If we fail to compete successfully against current and potential competitors, our operating results could be adversely
affected.

Our ReachLocal segment purchases most of its media from Google, and its business could be adversely affected if
Google takes actions that are adverse to our interests or if we fail to meet advertiser or spend targets necessary for receiving
rebates from Google. Similar actions from Yahoo!, Microsoft, and other media providers also could adversely affect the
segment's business.

Most of ReachLocal's cost of sales relates to the purchase of media, and a substantial majority of the media it purchases is
from Google. In addition, a substantial portion of WordStream's revenue consists of rebates from Google for achieving certain
advertiser or spend targets. Google accounts for a large majority of all U.S. searches, and Google's share in foreign markets is
often even greater. As a result, we expect our ReachLocal segment will depend upon media purchases and rebates from Google
for the foreseeable future. This dependence makes that business vulnerable to actions Google may take to change the manner in
which it sells AdWords, provides rebates to us, or conducts its business. In addition, any new developments or rumors of
developments regarding Google's business practices that affect the local online advertising industry may adversely affect our
products or create perceptions with clients that our ability to compete in the online marketing industry has been impaired. These
risks also apply to other publishers with whom we do business, including Yahoo! and Microsoft, though to a lesser degree.

Our business or results of operations could suffer if we fail to protect our ReachLocal segment's intellectual property

and other proprietary rights.

Our ReachLocal segment's business is heavily dependent on intellectual property, including proprietary technology. As

with our publishing segment, we rely on a combination of intellectual property rights, including contractual provisions,
confidentiality procedures and agreements, and trademark, copyright, patent, unfair competition, trade secret, and other laws to
protect our intellectual property. However, these methods afford only limited protection and may not be adequate. In addition,
because our ReachLocal segment sells its solutions internationally, we may need to enforce our rights under the laws of
countries that do not protect proprietary rights to as great an extent as do the laws of the United States. As a result, despite our
efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our online marketing and reporting
solutions, technology, software, and functionality or obtain and use information that we consider proprietary. Litigation or
proceedings before the U.S. Patent and Trademark Office or other governmental authorities and administrative bodies may be
necessary to enforce our intellectual property rights. Our efforts to enforce or protect our rights may be ineffective and could
result in substantial costs and diversion of resources. In addition, as with our publishing segment, third parties might claim the
conduct of our businesses or use of intellectual property infringes upon their intellectual property rights. Any such claims could
result in substantial costs or diversion of resources and could adversely affect our business and operating results.

Other General Business Risks

Our ability to operate effectively could be impaired if we fail to attract and retain key personnel.

Our success depends substantially upon the continuing contributions of our senior management team and other key

employees. Qualified individuals are in high demand, and our senior management and other key employees possess knowledge
of our business and industry that may be difficult to replace. Our loss of members of senior management or key employees or
our failure to attract and retain highly-skilled personnel for key positions could materially adversely affect our business. We
therefore will incur significant costs to retain our key employees and to recruit new employees in the future.

In December 2018, we announced our Chief Executive Officer intends to retire in 2019, and we have launched a

succession process. We may incur significant costs and our businesses may experience disruption in the process of recruiting a
new Chief Executive Officer and during the subsequent transition period.

Our business, reputation, and results of operations could be negatively affected if our information technology systems

fail to perform adequately or if we become subject to significant data security breaches or other security threats or
disruptions.

Our information technology systems are critically important to operating our business efficiently and effectively. We rely

on our information technology systems to manage our business data, communications, news and advertising content, digital
products, order entry, fulfillment, and other business processes. We also use third-party technology and systems for many
operations including encryption and authentication, employee e-mail, domain name registration, content delivery to customers,
and back-office support. Our information technology systems and any third-party systems on which we rely could fail to
perform as anticipated or could be disrupted or damaged by natural disasters, fires, power outages, acts of terrorism, or other
similar events. Any such failures or disruptions could result in transaction errors, processing inefficiencies, late or missed
publications, and loss of sales and customers, any of which could negatively affect our business or results of operations.

In addition, attempts to compromise information technology systems occur regularly across many industries and sectors,

and the techniques used to perpetrate such compromises (e.g., viruses, worms, or other malware, denial of service attacks,
malicious social engineering, and employee malfeasance) are constantly changing. Maintaining the security of our systems is
critically important both due to our reliance on those systems and because they store and process confidential subscriber,
employee, and other sensitive personal data. Although we and our third-party service providers have implemented security
measures and other controls designed to prevent breaches, these precautions might fail to defend against future cyber-attacks or
prevent breaches or other disruptions to our systems or those of our third-party providers. Because cyber-attacks evolve quickly
and often are not recognized until after they are launched, we may be unable to anticipate them or implement adequate
measures to prevent a breach. A significant breach could result in, among other things:

•

Improper disclosures of personal data or confidential information;

• Expenditures of significant resources to remedy the breach and defend against further attacks;

• Diversion of management's attention and resources; and

• Liability under laws that protect personal data.

The foregoing consequences could result in increased operating costs, loss of revenue, and harm to our reputation. Though

we maintain cyber risk insurance, this insurance may not be sufficient to cover all losses from any future breaches of our
systems.

Recent and future strategic acquisitions, investments, and partnerships may expose us to a variety of risks that might

disrupt our business and adversely affect our results of operations.

Our strategic plan involves strategic acquisitions of digital businesses as well as targeted acquisitions of high-quality

publishing businesses that we believe offer strong synergies with our existing portfolio. Any such acquisitions may involve
significant new risks that could adversely affect our results of operations or cash flows such as:

• Distraction of management attention from our current business operations;

•

Strain on our human resources;

Insufficient new revenue to offset expenses;

Integration challenges arising from factors such as combining company cultures and facilities;

Failure to achieve expected synergies or implement effective cost controls;

Inability to integrate acquired digital products, services, or technologies into our existing business's offerings;

Inability to retain key employees of acquired businesses;

• Applicability of new regulatory or foreign law requirements; and

• Liabilities and other exposures not discovered in our due diligence process.

We could fail to execute effectively our acquisition strategy if we cannot identify suitable acquisition targets or obtain

regulatory approvals required to complete or realize the anticipated benefits of potential acquisitions. In addition, in order to
consummate acquisitions or other strategic transactions, we may need to obtain additional financing from banks or through
public or private offerings of debt or equity securities, which financing might not be available on attractive terms or at all.

Our strategic plan could also involve investments in or partnerships with other companies, which may involve risks such

as:

• Our inability to control the operations of our investee or partner;

• Our investee or partner's failure to achieve its business or financial goals or otherwise successfully implement its

business plan; or

• Our inability to monetize an investment due to transfer restrictions and our lack of control over the timing or process

for any potential disposition of our equity interest.

Each of the foregoing risks could decrease the benefits we realize from an investment or partnership. We may receive little

or no return on these investments, and we may be required to record charges to earnings if the companies in which we have
invested decrease in value.

We may be unsuccessful in managing or growing our international operations.

Newsquest operates in the U.K., and ReachLocal has international sales operations in Australia, New Zealand, Canada, and
Brazil as well as campaign support services in India. Revenue from Newsquest accounted for 12% of our publishing segment's
total revenue for the year ended December 31, 2018. Revenue from international operations outside North America accounted
for 18% of our ReachLocal segment's total revenue for the year ended December 31, 2018. Our ability to manage these
international operations successfully is subject to numerous risks inherent in foreign operations, including:

• Challenges or uncertainties arising from unexpected legal, political, or systemic events;

• Difficulties or delays in developing a network of clients in international markets;

• Restrictions on the ability of U.S. companies to do business in foreign countries;

• Different legal or regulatory requirements, including with respect to internet services, privacy and data protection,

censorship, banking and money transmitting, and selling, which may limit or prevent the offering of our products in
some jurisdictions or otherwise harm our business;

•

International intellectual property laws that may be insufficient to protect our intellectual property or permit us to
successfully defend our intellectual property in international lawsuits;

• Different employee/employer relationships and the existence of workers' councils and labor unions, which could make

it more difficult to terminate underperforming salespeople;

• Difficulties in staffing and managing foreign operations;

• Difficulties in accounts receivable collection;

• Currency fluctuations and price controls or other restrictions on foreign currency;

•

Potential adverse tax consequences including difficulties in repatriating earnings generated abroad; and

• Lack of infrastructure to adequately conduct electronic commerce transactions.

Any of the foregoing factors could adversely impact our international operations, which could harm our overall business,

operating results, and financial condition.

Foreign exchange variability could materially and adversely affect our consolidated operating results.

Our financial statements are denominated in U.S. dollars. Newsquest operates in the U.K., and its operations are conducted
in foreign currency, primarily the British pound sterling. Continued weakness or further weakening in the British pound sterling
to U.S. dollar exchange rate could further diminish Newsquest's contributions to our results of operations. In addition, our
ReachLocal segment conducts operations in several foreign jurisdictions. If the value of currency in any of those jurisdictions
weakens as compared with the U.S. dollar, our ReachLocal segment's operations in those jurisdictions similarly will contribute
less to our results.

The U.K. vote to leave the European Union could adversely impact our business, results of operations, and financial

condition.

There remains substantial uncertainty surrounding the U.K.’s vote to leave the European Union (“Brexit”). Any impact of
the Brexit vote depends on the terms of the U.K.’s withdrawal from the European Union, which was formally initiated in 2017
and could take several years to accomplish. Businesses will face significant uncertainty and potentially additional compliance
costs as the details of the U.K.-European Union relationship are refined during the transition period, which could impact levels
of investment and overall business activity in the U.K. As a result, the U.K.’s withdrawal from the European Union could result
in an economic downturn in Newsquest’s markets, which could depress the demand for our products and services.

The value of our existing goodwill and intangible assets may become impaired, depending upon future operating

results.

Goodwill and other intangible assets were approximately $949.9 million as of December 31, 2018, representing
approximately 38% of our total assets. As required under U.S. GAAP, we periodically evaluate our goodwill and other
intangible assets to determine whether all or a portion of their carrying values may no longer be recoverable. Continued
declines in print advertising and circulation revenues, coupled with the erosion of general economic, market, or business
conditions could negatively affect our business and stock price, which may require us to record impairment charges to goodwill
or other intangible assets when we perform such evaluations. Any such charges would adversely affect future reported results of
operations and stockholders' equity but would not affect our cash flow.

Our pension plans are underfunded, and we must use a portion of our cash flows to make required contributions.

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 (GRP), the Gannett 2015
Supplemental Retirement Plan, the Newsquest Pension Scheme in the U.K., the Newspaper Guild of Detroit Pension Plan, and
a supplemental retirement plan we assumed pursuant to our acquisition of JMG. Many of our retirement plans were
underfunded as of December 31, 2018 by a total of $294.4 million on a U.S. GAAP basis. The excess of pension benefit
obligations over assets is expected to give rise to required pension contributions over the next several years. Various factors,
including future investment returns, interest rates, and potential pension legislative changes, may impact the timing and amount
of future pension contributions. We have committed to make a contribution of $25.0 million to the GRP in 2019 and 2020, as
well as a $15.0 million contribution in 2021. We expect to contribute approximately $30.5 million to the U.K. Pension Plans in
2019, $25.2 million in 2020, and $22.9 million in 2021. We also expect to make aggregate contributions of $29.6 million to our
other underfunded plans in fiscal year 2019 as well as additional contributions thereafter. Our ability to make contribution
payments will depend on our future cash flows, which are subject to general economic, financial, competitive, business,
legislative, regulatory, and other factors beyond our control.

Adverse results from litigation or governmental investigations or changes in the regulatory environment could force us

to change our business practices, impede our efforts to transform our business, or negatively affect our operating results.

From time to time, we are a party to litigation and regulatory, environmental, and other proceedings with governmental
authorities and administrative agencies. Adverse outcomes in lawsuits or investigations could result in significant monetary
damages or injunctive relief that could adversely affect our operating results or financial condition as well as our ability to
conduct our businesses as they presently are conducted. In addition, new laws or regulations or changes in existing laws or
regulations could result in penalties for non-compliance or reduction in revenues and could limit our ability to transform our
businesses in accordance with our strategic plan.

A portion of our revenues is earned under an affiliation agreement with cars.com, which may be terminated or amended

to provide for less favorable terms in the future.

In connection with our separation from our former parent, we entered into a modified affiliation agreement with cars.com,
which at the time was an affiliate of our former parent. The agreement was intended to permit our local markets to continue to
earn advertising revenues from cars.com for up to five years after the separation, although the agreement may be terminated
earlier in certain circumstances, including if we fail to achieve specified performance standards. We may cease to earn revenues
under this agreement, or the amount of such revenues may be materially reduced, if the agreement is terminated or not renewed
at the end of its five-year term (or if it is renewed on less favorable terms), and we are unable to find a suitable substitute. In
addition, to the extent the agreement contains exclusivity or non-compete provisions, including restrictions on our ability to use
a competing service or to compete with our counterparty, it could limit our ability to maximize our performance in the
provision of online automobile sales services.

We could incur significant liability if the separation were determined to be a taxable transaction.

In connection with the separation, our former parent received an opinion from outside tax counsel to the effect that the

requirements for tax-free treatment under Section 355 of the Code would be satisfied. The opinion relied on certain facts,
assumptions, representations, and undertakings from our former parent and us regarding the past and future conduct of the
companies' respective businesses and other matters. If any of these facts, assumptions, representations, or undertakings were
incorrect or not satisfied, we and our stockholders may not be able to rely on the opinion of tax counsel and could be subject to
significant tax liabilities. Further, notwithstanding the opinion of tax counsel, the IRS could determine upon audit that the
separation is taxable if it determines that any of these facts, assumptions, representations, or undertakings were incorrect or
violated, if it disagrees with the conclusions in the opinion, or for other reasons, including as a result of certain significant
changes in the share ownership of our company or our former parent after the separation. If the separation were determined to
be taxable for U.S. federal income tax purposes, our former parent and its stockholders that are subject to U.S. federal income
tax could incur significant U.S. federal income tax liabilities, and we could incur significant liabilities.

The Internal Revenue Service may disallow all or part of a worthless stock loss and bad debt deduction.

During 2017, we made an election to treat one of our ReachLocal international subsidiaries as a disregarded entity for U.S.
federal income tax purposes. This election resulted in worthless stock and bad debt deductions of $101.0 million, yielding a tax
benefit of $32.0 million. These tax deductions are subject to audit and possible adjustment by the IRS, which could result in the
reversal of all or part of the income tax benefit. To account for this uncertainty, a reserve of $11.0 million has been established
to reduce the benefit to an estimated realizable value of $21.0 million. While we believe this represents our best estimate of the
benefit to be realized upon final acceptance of our tax return, the IRS could reject or reduce the amount of tax benefit related to
these deductions. If the IRS rejects or reduces the amount of this income tax benefit, we may have to pay additional cash
income taxes, which could adversely affect our results of operations, financial condition, and cash flows. We cannot guarantee
what the ultimate outcome or amount of the benefit we receive, if any, will be.

The potential enactment of a Digital Services Tax in the U.K. may impact future results.

On October 29, 2018, Her Majesty’s Treasury issued budget guidance describing the framework of a proposed Digital
Services Tax (DST) in the United Kingdom. This tax would apply beginning in year 2020. The 2% DST would apply to gross
revenue of specified digital business models deriving value from participation of their users. While the tax is intended to apply
to search engines, social media platforms, and online marketplaces, it may be applied to online advertising when the users of
our publications receive advertising based on their participation with the publication. If the DST is enacted, we may have to pay
additional cash taxes which could adversely affect our results of operations, financial condition, and cash flows.

Risks Relating to our Stock and our Debt Arrangements

We cannot guarantee the timing, declaration, amount, or payment of dividends on our common stock.

The timing, declaration, amount, and payment of future dividends to stockholders falls within the discretion of our Board

of Directors. The Board's decisions regarding the payment of dividends will depend on many factors such as our financial
condition, earnings, capital requirements, any future debt service obligations, covenants under our existing or future debt
agreements, industry practice, legal requirements, regulatory constraints, and other factors the Board deems relevant. Our
ability to pay dividends will depend on our ongoing ability to generate cash from operations.

Our debt agreements contain restrictions that limit our flexibility in operating our business.

Our debt agreements contain various covenants that limit our flexibility in operating our businesses, including our ability to
engage in specified types of transactions. Subject to certain exceptions, these covenants restrict our ability and the ability of our
subsidiaries to, among other things:

•

Permit certain liens on current or future assets;

• Enter into certain corporate transactions;

•

Incur additional indebtedness;

• Make certain payments or declare certain dividends or distributions;

• Dispose of certain property;

•

Prepay or amend the terms of other indebtedness; and

• Enter into certain transactions with affiliates.

We may not have the ability to raise the funds necessary to settle conversions of our convertible notes or to repurchase

the notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon
conversion or repurchase of the notes.

In April 2018, we completed the sale of $201.3 million in aggregate principal amount of our 4.75% Convertible Senior

Notes due 2024. Holders of the notes will have the right to require us to repurchase their notes upon the occurrence of a
fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the notes to be
repurchased, plus accrued and unpaid interest, if any. In addition, upon conversion of the notes, unless we elect to deliver solely
shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will
be required to make cash payments in respect of the notes being converted. However, we may not have enough available cash
or be able to obtain financing at the time we are required to make repurchases of notes surrendered therefor or notes being
converted. In addition, our ability to repurchase the notes or to pay cash upon conversions of the notes may be limited by law,
by regulatory authority, or by agreements governing our future indebtedness.

Our failure to repurchase notes at a time when the repurchase is required by the indenture governing the notes or to pay any
cash payable on future conversions of the notes as required by the indenture would constitute a default under such indenture. A
default under the indenture governing the notes or the fundamental change itself could also lead to a default under the
agreements governing our other indebtedness. If the repayment of the related indebtedness were to be accelerated after any
applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the notes or
make cash payments upon conversions thereof.

The conditional conversion feature of the notes, if triggered, may adversely affect our financial condition and operating

results.

In the event the conditional conversion feature of the notes is triggered, holders of notes will be entitled to convert the
notes at any time during specified periods at their option. If one or more holders elect to convert their notes, unless we elect
(subject to certain limitations to our election) to satisfy our conversion obligation by delivering solely shares of our common
stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our
conversion obligation through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do
not elect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the
outstanding principal of the notes as a current rather than long-term liability, which would result in a material reduction of our
net working capital.

Certain provisions of our certificate of incorporation and by-laws and Delaware law may discourage a takeover of our

company.

Our amended and restated certificate of incorporation and amended and restated by-laws contain certain provisions that

may discourage, delay, or prevent a change in our management or control over us. For example, our amended and restated
certificate of incorporation and amended and restated by-laws, collectively:

• Authorize the issuance of preferred stock that could be issued by our Board of Directors to thwart a takeover attempt;

•

Provide that vacancies on our Board of Directors, including vacancies resulting from an enlargement of our Board,
may be filled only by a majority vote of directors then in office;

Place limits on which stockholders may call special meetings of stockholders and limit the actions that may be taken at
such stockholder-called special meetings;

•

Prohibit stockholder action by written consent; and

• Establish advance notice requirements for nominations of candidates for elections as directors or to bring other

business before an annual meeting of our stockholders.

These provisions could discourage potential acquisition proposals and could delay or prevent a change in control, even
though a majority of stockholders may consider such proposal, if effected, desirable. Such provisions could also make it more
difficult for third parties to remove and replace the members of our Board of Directors. Moreover, these provisions may inhibit
increases in the trading price of our common stock that may result from takeover attempts or speculation.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our corporate headquarters are in McLean, VA, where we lease approximately 178,551 square feet. The lease provides for

an initial term of 15 years with two five-year renewal options.

Our publishing domestic facilities occupy approximately 11.2 million square feet in the aggregate, of which approximately
3.8 million square feet is leased from third parties. Many of our local media organizations also have outside news bureaus, sales
offices, and distribution centers that are leased from third parties. A listing of publishing centers and key locations may be
found in the Major Publications and Markets We Serve section of Item 1. Business. We own some of the plants that house most
aspects of the publication process but in certain locations have outsourced printing or combined the printing of multiple
publications.

Newsquest, our subsidiary headquartered in London, occupies approximately 1.3 million square feet in the U.K. spread

over 92 locations. Of this, 0.3 million square feet (or 57 locations) are leased from third parties. Newsquest's owned premises
include four printing facilities. A fifth printing facility is leased.

ReachLocal, our subsidiary headquartered in Woodland Hills, CA, has sales and other offices in 27 locations in 16 states -

Arizona, California, Colorado, Florida, Georgia, Illinois, Louisiana, Maryland, Massachusetts, Minnesota, New York, North
Carolina, Pennsylvania, Texas, Virginia, and Washington. In addition, ReachLocal has 18 locations in five additional countries -
Australia, Brazil, Canada, India, and New Zealand. These properties, which total approximately 259,900 square feet, include
leased buildings and data centers. Excluded from total square footage but included in location counts are serviced office spaces.

All of our material real properties owned by our material domestic subsidiaries are mortgaged as collateral for our
revolving credit facility. We believe that our current facilities, including the terms and conditions of the relevant lease
agreements, are adequate to operate our businesses as currently conducted.

ITEM 3. LEGAL PROCEEDINGS

Information regarding legal proceedings may be found in Note 12 — Commitments, contingencies and other matters of the

notes to consolidated financial statements.

Environmental

From time to time, some of our current and former subsidiaries have been included among potentially responsible parties

in connection with sites that have been identified as possibly requiring environmental remediation. These environmental
proceedings are highly complex, and require a variety of issues to be resolved, including the extent of contamination, the nature
and extent of investigation and remedial action that may ultimately be required, and the number of parties that will be required
to contribute to such investigation and remediation costs, before our liability for them, if any, will be known.

In March 2011, the Advertiser Company (Advertiser), a subsidiary that publishes the Montgomery Advertiser, was notified
by the U.S. Environmental Protection Agency (EPA) that it had been identified as a potentially responsible party (PRP) for the
investigation and remediation of groundwater contamination in downtown Montgomery, Alabama. The Advertiser is a member
of the Downtown Environmental Alliance, which has agreed to jointly fund and conduct all required investigation and
remediation. In 2016, the Advertiser and other members of the Downtown Environmental Alliance reached a settlement with
the U.S. EPA regarding the costs the U.S. EPA spent to investigate the site. The U.S. EPA has transferred responsibility for
oversight of the site to the Alabama Department of Environmental Management, which has approved the work plan for the
additional site investigation that is currently underway. The Advertiser's final costs cannot be determined until the investigation
is complete, a determination is made on whether any remediation is necessary, and contributions from other PRPs are finalized.

Other Matters

In January 2014, a class action lawsuit was filed against Gannett in the U.S. District Court for the District of New Jersey

(Casagrand et al v. Gannett Co., Inc., et al). The suit claims various violations of the Telephone Consumer Protection Act
(TCPA) arising from allegedly improper telemarketing calls made to consumers by one of our vendors. The plaintiffs sought to
certify a class that would include all telemarketing calls made by the vendor or us. The TCPA provides for statutory damages of
$500 per violation ($1,500 for willful violations). In April 2016, we agreed to settle all claims raised. The settlements, which
have not been fully paid, are reflected in our financial statements as of December 31, 2018 and were not material to our results
of operations, financial position, or cash flows.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER
PURCHASES OF EQUITY SECURITIES

Our shares are traded on the New York Stock Exchange under the symbol GCI. Information regarding outstanding shares,
shareholders, and dividends may be found in Item 1. Business and Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations of this Form 10-K.

Purchases of equity securities

In May 2018, our Board of Directors approved a new share repurchase program authorizing us to repurchase shares with an

aggregate value of up to $100 million over a three-year period, replacing our initial program dated July 2015. Shares may be
repurchased either in the open market or in privately negotiated block transactions. Management's decision to repurchase shares
will depend on share price and other corporate liquidity requirements. We expect share repurchases may occur from time to
time over the three years. Under current and legacy programs, we have repurchased a total of 5.75 million shares.

Comparison of shareholder return – 2018

The below analysis compares the performance of our common stock from the date of our separation from our former
parent company on June 29, 2015 to December 31, 2018 compared to the Russell 2000 Index, the S&P 500 Index, and an index
made up of peer companies. Our peer group includes the following entities:

- A. H. Belo Corporation

- Lee Enterprises, Inc.

- The New York Times Company

- News Corporation

- The McClatchy Company

- Tribune Publishing Company

- Meredith Corporation

- Yelp, Inc.

- New Media Investment Group, Inc.

- Harte-Hanks, Inc.

These entities are collectively known as the "Peer Group". The following changes have occurred within the Peer Group

since the date of our separation from our former parent:

• ReachLocal, Inc. was included in the Peer Group until we acquired 100% of its outstanding common stock in August

2016. Refer to Note 4 — Acquisitions to the accompanying consolidated financial statements for additional details on the
acquisition of ReachLocal.

• Constant Contact, Inc. was included in the Peer Group until Endurance International Group acquired 100% of its

outstanding common stock in November 2015.

• Angie's List, Inc. was included in the Peer Group until InterActive Corp. completed the acquisition of 100% of its

outstanding common stock in October 2017.

• Time, Inc. was included in the Peer Group until Meredith Corporation completed the acquisition of 100% of its

outstanding common stock in January 2018.

The S&P 500 Index includes 500 U.S. companies in the industrial, utilities, technology, and financial sectors and is

weighted by market capitalization. The Russell 2000 index includes 2,000 companies across a variety of industries whose
market capitalizations are generally between $300 million and $2 billion. In 2018, the company elected to change its
benchmark index from the S&P 500 to the Russell 2000 because the company believes the Russell 2000 provides for a better
comparison of returns with entities of similar size and market capitalization versus the S&P 500. For the current year only,
comparisons of the company's returns to both indices will be included in the graph.

The following graph depicts representative results of investing $100 in our common stock, the Russell 2000 Index, the
S&P 500 Index, and the Peer Group index at closing on June 29, 2015. It assumes dividends were reinvested monthly with
respect to our common stock, daily with respect to the Russell 2000 and S&P 500, and monthly with respect to each Peer
Group company.

Gannett Co., Inc.

Russell 2000 Index

S&P 500 Index

Peer Group

June 2015

December 2015 December 2016 December 2017 December 2018

100.00 $

117.16 $

91.78 $

101.23 $

85.34 $

75.08 $

111.34 $

113.66 $

88.82 $

94.78 $

127.64 $

138.47 $

126.43 $

74.32

113.59

130.97

130.12

ITEM 6. SELECTED FINANCIAL DATA

Selected financial data for the years 2014 through 2018 is contained in the table below and is derived from our audited
financial statements for those years. The information in this section is not necessarily indicative of the results of operations to
be expected for future years and should be read in conjunction with Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations and the consolidated financial statements and related notes thereto included elsewhere in
this Annual Report on Form 10-K. The financial information included herein for periods prior to our separation from our
former parent on June 29, 2015 may not necessarily reflect what our financial position, results of operations, and cash flows
would have been had we been an independent publicly-traded company during the periods presented.

Fiscal year 2017 comprises 53 weeks, and all other fiscal years presented in the table below comprise 52 weeks.

In thousands, except per share amounts

Total operating revenue

Operating income

Net income

Earnings per share - basic

Earnings per share - diluted

Other selected financial data

Dividends declared per share

2018

2,916,838

28,762

15,040

0.13

0.64

Weighted average number of common shares outstanding:

Basic

Diluted

Financial position and cash flow

Cash and cash equivalents

Long-term debt, excluding current maturities $

112,970

115,751

93,559

304,264

Total assets

2,478,411

NOTES TO SELECTED FINANCIAL DATA

Restructuring charges and asset impairments

2017

3,146,480

67,571

6,887

0.06

0.64

113,047

115,610

120,589

355,000

2,569,977

2016

3,047,474

89,370

52,710

0.45

0.44

0.64

116,018

118,625

114,324

400,000

2,844,681

2015

2,885,012

164,505

146,091

1.27

1.25

0.32

2014

3,171,878

262,331

210,705

1.83

—

115,165

116,695

114,959

196,696

71,947

— $

—

2,427,799

2,384,460

We incurred restructuring costs of $67.9 million in 2018, $44.3 million in 2017, $45.8 million in 2016, $77.4 million in
2015, and $51.1 million in 2014. We recorded asset impairment charges of $50.5 million in 2018, $46.8 million in 2017, $55.9
million in 2016, $29.1 million in 2015, and $4.0 million in 2014.

Acquisitions

We, along with our subsidiaries, made the significant acquisitions listed below during the period. There were no significant

dispositions. The results of operations of these acquired businesses are included in the accompanying selected financial
information from the date of acquisition.

Year Name
2018 WordStream

SweetIQ

Location
Boston, Massachusetts

Montreal, Canada

Description
Provider of cloud-based software-as-a-service solutions

Digital marketing solutions firm

2017

2016

2015

Journal Media Group

Milwaukee, Wisconsin

Media company with print and digital publishing operations

North Jersey Media Group Woodland Park, New Jersey

Media company with print and digital publishing operations

ReachLocal

Woodland Hills, California

Digital marketing solutions firm

Texas-New Mexico
Newspapers Partnership
Romanes Media Group

Texas, New Mexico, Pennsylvania

Media company with print and digital publishing operations

Scotland, Berkshire, Northern Ireland Media company with print and digital publishing operations

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Certain factors affecting forward-looking statements

Certain statements in this Annual Report on Form 10-K contain certain forward-looking statements regarding business
strategies, market potential, future financial performance, and other matters. Forward-looking statements include all statements
that are not historical facts. The words "believe," "expect," "estimate," "could," "should," "intend," "may," "plan," "seek,"
"anticipate," "project," and similar expressions, among others, generally identify "forward-looking statements" which speak
only as of the date the statements were made and are not guarantees of future performance. The matters discussed in these
forward-looking statements are subject to many risks, trends, uncertainties, and other factors that could cause actual results to
differ materially from those projected, anticipated, or implied in the forward-looking statements. Where, in any forward-
looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the
current plans and expectations of our management, is expressed in good faith, and is believed to have a reasonable basis.
However, there can be no assurance the expectation or belief will result, be achieved, or be accomplished. Whether or not any
such forward-looking statements are in fact achieved will depend on future events, some of which are beyond our control.
Except as may be required by law, we undertake no obligation to modify or revise any forward-looking statements to reflect
new information, events, or circumstances occurring after the date of this report. Factors, risks, trends, and uncertainties that
could cause actual results or events to differ materially from those projected, anticipated, or implied include the matters
described above under "Management's Discussion and Analysis of Financial Condition and Results of Operations," the
statements made under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations", and the following other factors, risks, trends and uncertainties:

• Our ability to achieve our strategic transformation;

•

Potential disruption due to the reorganization of our sales force;

• An accelerated decline in general print readership and/or advertiser patterns as a result of changing consumer

preferences, competitive alternative media, or other factors;

• An inability to adapt to technological changes or grow our digital businesses;

• Risks associated with the operation of an increasingly digital business, such as rapid technological changes, challenges

associated with new delivery platforms, declines in web traffic levels, technical failures, and proliferation of ad
blocking technologies;

• Competitive pressures in the markets in which we operate;

• Macroeconomic trends and conditions;

•

Increases in newsprint costs over the levels anticipated or declines in newsprint supply;

• Risks and uncertainties associated with our ReachLocal 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;

• Our ability to protect our intellectual property or defend successfully against infringement claims;

• Our ability to attract and retain talent;

• Labor relations, including, but not limited to, labor disputes which may cause business interruptions, revenue declines

or increased labor costs;

•

Potential disruption or interruption of our IT systems due to accidents, extraordinary weather events, civil unrest,
political events, terrorism or cyber security attacks;

• Risks and uncertainties related to strategic acquisitions or investments, including distraction of management attention,
incurrence of additional debt, integration challenges, and failure to realize expected benefits or synergies or to operate
businesses effectively following acquisitions;

• Risks and uncertainties related to MNG Enterprises, Inc.'s unsolicited proposal to acquire the company and related

nomination of six candidates for election to the company's board of directors, which could, among other matters, cause
us to incur significant expense and impact the trading value of our securities;

• Variability in the exchange rate relative to the U.S. dollar of currencies in foreign jurisdictions in which we operate;

• Risks associated with our underfunded pension plans;

• Adverse outcomes in litigation or proceedings with governmental authorities or administrative agencies, or changes in
the regulatory environment, any of which could encumber or impede our efforts to improve operating results or the
value of assets;

• Volatility in financial and credit markets which could affect the value of retirement plan assets and our ability to raise
funds through debt or equity issuances and otherwise affect our ability to access the credit and capital markets at the
times and in the amounts needed and on acceptable terms;

• Risks to our liquidity related to the redemption, conversion, and similar features of our convertible notes; and

• Other uncertainties relating to general economic, political, business, industry, regulatory and market conditions.

Executive summary

Gannett is a media and marketing solutions company whose wide variety of digital content reaches 126 million unique

visitors a month. The company has many relevant digital products, including web sites, mobile platforms, and apps affiliated
with its local and international brands. The company also comprises 110 daily U.S. print products, including USA TODAY, and
150 publications in the U.K. Total U.S. daily print and digital circulation averages 3 million, rising to 5 million on Sundays. In
the U.K., weekly print circulation averages approximately 8.0 million.

The scope of marketing solutions products and services Gannett provides businesses through its ReachLocal segment
ranges from search and social media advertising, data insights, websites, local listings, and search engine optimization to
mobile, social, video, live chats, lead engagement, and automation. Our operations also include commercial printing.

Basis of reporting

The following is a discussion of the key factors that have affected our accounting for or reporting on the business over the

last three fiscal years. This commentary should be read in conjunction with our financial statements, selected financial data, and
the remainder of this Form 10-K.

Fiscal year: Starting in 2018, our fiscal year coincides with the Gregorian calendar. In 2017 and prior, our fiscal years
ended on the last Sunday of the calendar year. Our fiscal year for 2018 was a 52-week year ending on December 31, 2018.
Fiscal year 2017 was a 53-week year ending on December 31, 2017, and fiscal year 2016 was a 52-week year ending on
December 25, 2016.

Advertising and marketing services revenues: In 2018, we realigned the presentation of web presence and software-as-a-
service revenues from other revenues to advertising and marketing services revenues on the Consolidated statements of income.
As a result of this updated presentation, advertising and marketing services revenues increased and other revenues decreased
$46.2 million, $34.6 million, and $9.2 million for 2018, 2017, and 2016, respectively. Operating revenues, net income, retained
earnings, and earnings per share remained unchanged.

Certain matters affecting current and future operating results

The following developments affect period-over-period comparisons and will affect period-over-period comparisons for

future results:

Acquisitions

• WordStream, Inc. (WordStream) – In July 2018, our ReachLocal segment completed the acquisition of WordStream, a

provider of cloud-based software-as-a-service solutions for local and regional businesses and agencies, for approximately
$132.5 million, net of cash acquired. In addition, up to $20.0 million of additional consideration is payable in 2019 and
2020 based upon the achievement of certain revenue targets.

•

SweetIQ Analytics Corp. (SweetIQ) – In April 2017, we completed the acquisition of SweetIQ, a location and customer
engagement software provider, for approximately $31.8 million, net of cash acquired. SweetIQ's customers include
businesses with multi-location brands and agencies that target local marketing.

• ReachLocal, Inc. (ReachLocal) – In August 2016, we completed the acquisition of 100% of the outstanding common stock

of ReachLocal for approximately $162.5 million, net of cash acquired. ReachLocal offers online marketing, digital
advertising, software-as-a-service, and web presence products and solutions to local businesses.

• Certain assets of North Jersey Media Group, Inc. (NJMG) – In July 2016, we completed the acquisition of certain assets of
NJMG for approximately $38.6 million. NJMG is a media company with print and digital publishing operations serving
primarily the northern New Jersey market.

•

Journal Media Group, Inc. (JMG) – In April 2016, we completed the acquisition of 100% of the outstanding common
stock of JMG for approximately $260.6 million, net of cash acquired. JMG is a media company with print and digital
publishing operations serving 15 U.S. markets in nine states.

• We completed other immaterial acquisitions during the periods presented.

Restructuring and asset impairment costs

Over the past several years, we have engaged in a series of individual restructuring programs designed to right size our

employee base and improve operations, including those of recently acquired entities. In addition, we have engaged in facility
consolidation initiatives which include the disposition of older, under-utilized buildings, relocations to more efficient, flexible,
digitally-oriented office spaces, efforts to reconfigure spaces to take advantage of leasing and subleasing opportunities, and the
combination of production and distribution operations where possible. These facility consolidation and other cost savings plans
led us to recognize severance charges, asset impairment charges, shutdown costs, and charges associated with reducing the
useful lives of certain assets. As part of our plans, we are selling certain assets which we have classified as held-for-sale and
reduced carrying values to equal fair value less costs to dispose. In addition, we had impairments of intangible assets which
were principally a result of cash flow projections which were lower than expected.

In conjunction with these programs, we incurred restructuring costs of $67.9 million in 2018, $44.3 million in 2017, and
$45.8 million in 2016. Included in these restructuring costs are severance costs of $51.1 million in 2018, $37.0 million in 2017,
and $43.5 million in 2016. In 2018, we offered an early retirement opportunity program (EROP) for certain employees in our
Domestic Publishing and Corporate units for which $27.8 million of severance costs were incurred and are included in the
severance costs above.

We recorded asset impairment charges of $50.5 million in 2018, $46.8 million in 2017, and $55.9 million in 2016. We also

recorded accelerated depreciation of $16.7 million in 2018, $44.0 million in 2017, and $3.2 million in 2016.

Foreign currency

Our U.K. publishing operations are conducted through our Newsquest subsidiary. In addition, ReachLocal has foreign
operations in regions such as Asia-Pacific and South America. Our earnings from operations in foreign regions are translated
into U.S. dollars at average exchange rates prevailing during the period, and assets and liabilities are translated at exchange
rates in effect at the balance sheet date.

With respect to Newsquest, the average exchange rate used to translate U.K. results was 1.33 for 2018, 1.29 for 2017, and
1.36 for 2016. Translation fluctuations impact our U.K. revenue, expense, and operating income results. The 4% increase in the
exchange rate from 2017 to 2018 favorably impacted 2018 revenue comparisons by approximately $10.5 million. The 5%
decrease in the exchange rate from 2016 to 2017 unfavorably impacted 2017 revenue comparisons by approximately $16.1
million.

Impacts stemming from foreign currency translation gains and losses at our ReachLocal segment unfavorably impacted

revenue by $3.8 million in 2018. In 2017 and 2016, foreign currency translation gains and losses were immaterial.

Newsprint supply

The newsprint supply available to U.S. publishers is volatile. In 2017, North American newsprint producers permanently
removed production capacity approaching one million metric tonnes per year, and similar production capacity reductions were
witnessed outside of North America. In addition, in the first six months of 2018, many Canadian producers were subjected to
significant anti-dumping and countervailing duties upon importation of newsprint into the U.S. Those duties were ultimately
eliminated by the International Trade Commission in September 2018, but their imposition in the first half of 2018 disrupted
the newsprint market by driving prices higher and incentivizing Canadian producers to reduce their shipments of newsprint into
the United States.

As a result of the above, newsprint prices remained elevated throughout 2018; however, newsprint expense at our
publishing segment was effectively flat in 2018 as rising prices were offset by declines in circulation volumes and usage.

Outlook for 2019

As we move into 2019, we remain focused on executing our strategic vision of being essential to consumers and marketers

seeking meaningful connections with their communities across print, digital, and other channels. In 2018, we completed our
organizational realignment that reorganized our business into two functions - Marketing Solutions and Consumer. In our
Marketing Solutions business, we are focused on developing a more comprehensive suite of marketing products and services,
including the integration of the recent WordStream acquisition. Although print advertising will remain challenged due to market
pressures, we are aggressively focused on driving a deeper penetration of our digital advertising and marketing service products
within our local client base as well as acquiring new clients. Our Consumer organization is focused on growing our audiences
and deepening engagement, in part by expanding our spectrum of content beyond traditional news into new verticals and
platforms. We will continue to strive to maximize operational excellence by working to maximize the efficiency of our print,
sales, administrative, and distribution functions to reduce costs. We also will continue to pursue our strategy of growing our
business through selective acquisitions and investments.

RESULTS OF OPERATIONS

Consolidated summary

A summary of our segment results is presented below:

In thousands, except per share amounts

Operating revenues:

Publishing

ReachLocal

Corporate and other

Intersegment eliminations

Total operating revenues

Operating expenses:

Publishing

ReachLocal

Corporate and other

Intersegment eliminations

Total operating expenses

Operating income

Non-operating income (expense)

Income before income taxes

Provision for income taxes

Net income

Diluted earnings per share

2018(1)

2017(1)

Change

2016(1)

Change

2,559,563

2,812,243

411,505

7,417

(61,647)

358,728

4,835

(29,326)

2,916,838

3,146,480

2,395,564

2,592,566

412,608

141,551

(61,647)

377,667

138,002

(29,326)

2,888,076

3,078,909

28,762

1,397

30,159

15,119

15,040

0.13

67,571

(26,830)

40,741

33,854

6,887

0.06

(9%)

15%

53%

***

(7%)

(8%)

***

(6%)

(57%)

***

(26%)

(55%)

***

2,933,095

110,144

4,235

—

3,047,474

2,697,697

128,872

131,535

—

2,958,104

89,370

(22,942)

66,428

13,718

52,710

0.44

(4%)

***

14%

***

(4%)

***

(24%)

17%

(39%)

***

(87%)

(86%)

*** Indicates an absolute value percentage change greater than 100.
(1) Fiscal year 2017 comprises 53 weeks while fiscal years 2018 and 2016 comprise 52 weeks.

Intersegment eliminations in the preceding table represent digital marketing services revenues and expenses associated

with products sold by our U.S. local publishing sales teams but which are fulfilled by our ReachLocal segment. When
discussing segment results, these revenues and expenses are presented gross but are eliminated in consolidation.

To facilitate a comparison of our publishing results without the impact of acquisitions, the 53rd week of revenues and
expenses, and foreign currency translation fluctuations, 2017 same store revenues and expenses for purposes of comparison to
2016 are calculated as follows:

• Reported revenues or expenses
• Less: revenues or expenses for our 2017 publishing acquisitions from the date of the acquisition through the end of the

year

• Less: revenues or expenses for our 2016 publishing acquisitions from the beginning of fiscal year 2017 through the

first year anniversary of their applicable acquisition date

• Less: 53rd week revenue or expenses

• Less: operations exited in 2017

• Add (less): decreases (increases) in foreign currency translation impacts based on a constant currency calculation

Same store revenues and expenses are not presented for 2018 because no material publishing acquisitions occurred in 2018

or 2017. As we continue to integrate our acquisitions, allocations of certain expenses related to acquired businesses may
change. These adjustments may impact the comparability of same store expense numbers across periods; however, such
impacts are expected to be immaterial.

Operating revenues:

Our publishing segment generates revenue primarily through advertising and marketing services and subscriptions to our

print and digital publications. Our advertising teams sell local, national, and classified print advertising products, digital
advertising offerings such as digital classified advertisements, digital media such as display advertisements run on our
platforms as well as third-party sites, and digital marketing services such as search advertising offered through and delivered by
our ReachLocal segment. Circulation revenues are derived principally from home delivery and single copy sales of our
publications and distributing our publications on our digital platforms. Other revenues are derived mainly from commercial
printing and distribution arrangements.

Our ReachLocal segment generates advertising and marketing services revenues through multiple services including search
advertising, display advertising, search optimization, social media, website development, web presence products, and software-
as-a-service solutions.

Revenue comparisons 2018 - 2017:

Total operating revenues were $2.9 billion in 2018, a decrease of 7% from 2017. This decrease was primarily attributable

to continued softness in publishing segment advertising and marketing services revenues of $185.7 million reflecting decreased
demand for print advertising, as well as declines in circulation revenues of $57.7 million due to lower circulation volumes,
partially offset by increases from our strategic pricing programs. These declines in operating revenues were partially offset by
the increase in revenues of $52.8 million from ReachLocal, primarily attributable to the acquisition of WordStream, the
migration of publishing segment customers onto the ReachLocal platform, and increases in average revenue per customer.
Overall, operating revenues declined by $40.5 million due to six fewer days in 2018 compared to 2017. Additionally, foreign
currency rate fluctuations positively impacted operating revenues by $6.7 million.

Revenue comparisons 2017 - 2016:

Total operating revenues were $3.1 billion in 2017, an increase of 3% from 2016 primarily attributable to revenue growth
of $248.6 million from ReachLocal, which was acquired in August 2016. Publishing revenues decreased 4% from 2016 which
was primarily attributable to the continued softness in publishing segment same store advertising revenues of $212.5 million,
reflecting decreased demand for print advertising, as well as declining trends in same store circulation revenues of $84.3
million due to lower circulation volumes partially offset by revenues from our 2016 publishing acquisitions of $157.5 million
and 53rd week revenues of $49.1 million. Additionally, foreign currency rate fluctuations negatively impacted publishing
revenues by $16.1 million.

Operating expenses:

Payroll and benefits are the largest components of our operating expenses. Other significant operating expenses include

production and distribution costs.

Operating expense comparisons 2018 - 2017:

During 2018, total operating expenses decreased 6% to $2.9 billion compared to 2017. Publishing segment expenses
decreased by $197.0 million, primarily attributable to continued cost efficiency efforts and reductions in cost of sales due to
lower print advertising and circulation revenues. This decrease was partially offset by an increase in operating expenses from
ReachLocal of $34.9 million, primarily attributable to the acquisition of WordStream and higher cost of sales associated with
digital marketing services revenue growth. Corporate expenses increased 3% compared to 2017 primarily due to an increase in
restructuring costs. Foreign currency rate fluctuations also increased expenses by $5.6 million.

Impacting 2018 operating expenses, and included in the numbers above, were severance-related charges of $51.1 million,

asset impairment charges of $50.5 million, accelerated depreciation of $16.7 million, facility consolidation charges of $16.8
million, and acquisition costs of $7.6 million. Impacting 2017 operating expenses, and included in the numbers above, were
asset impairment charges of $46.8 million, accelerated depreciation of $44.0 million, severance-related charges of $37.0
million, facility consolidation charges of $7.3 million, and acquisition costs of $5.2 million.

Operating expense comparisons 2017 - 2016:

During 2017, total operating expenses increased 4% to $3.1 billion compared to 2016. Contributing to the increase were
operating expenses associated with our 2016 publishing acquisitions of $158.0 million, expense increases of $248.8 million

from ReachLocal, which was acquired in August 2016, and 53rd week expenses of $45.5 million. These additional expenses
were partially offset by the continued company-wide cost efficiency efforts and lower newsprint expenses. Foreign currency
rate fluctuations also reduced expenses by $13.5 million.

Impacting 2016 operating expenses were asset impairment charges of $55.9 million, severance-related charges of $43.5

million, acquisition costs of $31.9 million, accelerated depreciation of $3.2 million, and facility consolidation charges of $2.2
million.

Publishing segment

A summary of our publishing segment results is presented below:

In thousands

Operating revenues:

2018(1)

2017(1)

Change

2016(1)

Change

Advertising and marketing services

1,311,217

1,496,883

(12%)

1,602,845

Circulation

Other

Total operating revenues

Operating expenses:

Cost of sales

Selling, general and administrative expenses

Depreciation and amortization

Restructuring costs

Asset impairment charges

Total operating expenses

1,063,022

185,324

2,559,563

1,626,011

574,406

96,148

48,904

50,095

1,120,739

194,621

2,812,243

1,767,226

605,954

135,214

37,376

46,796

2,395,564

2,592,566

Operating income
(1) Fiscal year 2017 comprises 53 weeks while fiscal years 2018 and 2016 comprise 52 weeks.

163,999

219,677

(5%)

(9%)

(8%)

(5%)

(29%)

31%

(8%)

(25%)

1,133,676

196,574

2,933,095

1,850,230

641,394

105,102

45,031

55,940

2,697,697

235,398

(7%)

(1%)

(4%)

(6%)

29%

(17%)

(16%)

(4%)

(7%)

Operating revenues:

Revenue comparisons 2018 - 2017:

Advertising and marketing services revenues were $1.3 billion for 2018, a decrease of 12% compared to 2017, which was

primarily attributable to a $201.9 million decline in print advertising revenues as a result of reduced demand consistent with
general trends adversely impacting the publishing industry and a $18.6 million decline due to six fewer days in 2018 compared
to 2017. Partially offsetting this decline was an increase in digital advertising and marketing services revenues of $16.2 million.
Foreign currency exchange rates positively affected advertising and marketing services revenues by $6.7 million.

Print advertising revenues were $880.5 million in 2018, a decrease of 19% compared to 2017. Local and national print
advertising revenues were $396.6 million and $200.0 million, respectively, for 2018, a decrease of 18% and 23%, respectively,
compared to 2017. These declines were attributable to reduced demand consistent with general trends adversely impacting the
publishing industry. Classified print advertising revenues of $283.9 million for 2018 decreased 16% compared to 2017,
primarily attributable to declines in the automotive, employment, and real estate categories of $19.1 million, $11.7 million, and
$11.0 million, respectively. Overall, print advertising revenues declined by $11.8 million due to six fewer days in 2018
compared to 2017. Foreign currency exchange rates positively affected print advertising revenues by $4.9 million.

Digital advertising and marketing services revenues were $430.8 million for 2018, an increase of 4% compared to 2017.
Digital media revenues were $279.1 million for 2018, an increase of 3% compared to 2017, primarily due to growth in national
premium and programmatic sales. Digital classified revenues were $73.9 million for 2018, a decrease of 17% compared to
2017 due to decreases in the digital classified employment and automotive categories of $8.0 million and $3.9 million,
respectively. Digital marketing services revenues were $77.8 million for 2018, an increase of 42% compared to 2017. This
increase was attributable to growth in the number of clients and an increase in the average spend per client due to the transition
of our local markets to the ReachLocal technology and product platform. Overall, digital advertising revenues were negatively
impacted by $6.8 million due to six fewer days in 2018 compared to 2017. Foreign currency exchange rates positively affected
total digital advertising and marketing services revenues by $1.8 million.

Circulation revenues were $1.1 billion for 2018, a decrease of 5% compared to 2017. Print circulation revenues were
$816.0 million for 2018, a decrease of 9% from 2017, due to a reduction in volume of our single copy and home delivery sales,
reflecting general industry trends, offset by increases from our strategic pricing programs. Digital circulation revenues were
$247.0 million for 2018, a 10% increase from 2017, primarily due to the refinement of the allocation to digital revenues based
on frequency of delivery. Overall, circulation revenues declined by $13.5 million due to six fewer days in 2018 compared to
2017. Foreign currency exchange rates positively affected circulation revenues by $3.0 million.

Commercial printing and other revenues of $185.3 million in 2018 decreased 5% compared to 2017 due to reduced
demand consistent with general industry trends. Other revenues accounted for approximately 7% of total revenues for the year.

Revenue comparisons 2017 - 2016:

Advertising and marketing services revenues were $1.5 billion for 2017, a decrease of 7% compared 2016. This decrease

was attributable to the decline in same store advertising revenues of 13% due to lower print advertising demand consistent with
general trends adversely impacting the publishing industry. This decline was partially offset by advertising revenues associated
with our 2016 publishing acquisitions of $90.6 million and 53rd week advertising revenues of $20.7 million. Foreign currency
exchange rates negatively affected advertising revenues by $10.3 million.

Print advertising revenues were $1.1 billion for 2017, a decrease of 10% compared to 2016. Same store local and national

print advertising revenues were $438.0 million and $240.9 million, respectively, for 2017, a decrease of 18% and 19%,
respectively, compared to 2016. These declines were attributable to reduced demand consistent with general trends adversely
impacting the publishing industry. Same store classified print advertising revenues of $312.0 million for 2017 decreased 17%
compared to 2016, primarily attributable to declines in the automotive, employment, and real estate categories of $19.0 million,
$13.2 million, and $12.9 million, respectively. These declines were partially offset by print advertising revenues associated with
our 2016 publishing acquisitions of $79.3 million and 53rd week print advertising revenues of $15.7 million. Foreign currency
exchange rates negatively affected print advertising revenues by $7.5 million.

Digital advertising and marketing services revenues were $414.5 million for 2017, an increase of 5% compared to 2016.
This increase was attributable to digital advertising and marketing revenues associated with our 2016 publishing acquisitions of
$11.3 million and 53rd week digital advertising and marketing revenues of $5.0 million. Same store digital media revenues
were $258.4 million for 2017, an increase of 4% compared to 2016, primarily due to growth in programmatic sales as well as
increases in mobile display and audience extension revenues. Same store digital classified revenues were $87.2 million for
2017, a decrease of 10% compared to 2016 due to decreases in the digital classified employment and automotive categories of
$6.6 million and $0.3 million, respectively. Same store digital marketing services revenues were $53.9 million for 2017, an
increase of 7% compared to 2016. This increase was attributable to growth in the number of clients and an increase in the
average spend per client due to the transition of our local markets to the ReachLocal technology and product platform. Foreign
currency exchange rates negatively affected total digital advertising and marketing services revenues by $2.8 million.

Circulation revenues were $1.1 billion for 2017, a decrease of 1% compared to 2016. This decrease was primarily
attributable to the decline in same store circulation revenues of 7%. The decrease was partially offset by circulation revenues
associated with our 2016 publishing acquisitions of $55.3 million and 53rd week circulation revenues of $19.3 million. Print
circulation revenues on a same store basis were $842.3 million for 2017, a 5% decrease from the same period in 2016 due to a
reduction in volume, reflecting general industry trends, offset by increases from our strategic pricing programs. Digital
circulation revenues on a same store basis were $207.1 million for 2017, a 17% decrease from the same period in 2016 due to a
reduction in volume and changes in fair value pricing used to allocate full access subscription revenues between print and
digital circulation. Foreign currency exchange rates negatively affected circulation revenues by $4.5 million.

Commercial printing and other revenues of $194.6 million in 2017 decreased 1% compared to 2016 due to reduced
demand consistent with general industry trends. Other revenues accounted for approximately 7% of total revenues for the year.

Operating expenses:

Operating expense comparisons 2018 - 2017:

Cost of sales for 2018 decreased 8% from 2017 to $1.6 billion. This decrease was primarily driven by continued cost
efficiency efforts as well as an overall decline in circulation volumes that reduced production and distribution costs by 13% and
9%, respectively. Foreign currency rate fluctuations increased expenses by $5.5 million.

Total selling, general, and administrative expenses for 2018 decreased 5% from 2017 to $574.4 million, primarily

attributable to continued company-wide cost efficiency efforts, resulting in a 2% decrease in employee benefits costs and other
reductions in information technology and marketing expenses of 17% and 14%, respectively. Foreign currency exchange rate
fluctuations increased selling, general, and administrative expenses by $3.3 million.

Depreciation and amortization expense for 2018 was $96.1 million, a 29% decrease compared to 2017 primarily

attributable to a decrease of $27.3 million in accelerated depreciation associated with our facility consolidation efforts. Foreign
currency exchange fluctuations increased depreciation expense by $0.4 million.

Impacting 2018 operating expenses were asset impairment charges of $50.1 million and restructuring charges of $48.9
million. Impacting 2017 operating expenses were asset impairment charges of $46.8 million and restructuring charges of $37.4
million.

Operating expense comparisons 2017 - 2016:

Cost of sales for 2017 decreased 4% from 2016 to $1.8 billion. Cost of sales on a same store basis decreased 12%, driven

primarily by a decrease in newsprint costs and an overall decline in circulation volumes that reduced production and
distribution costs. Newsprint costs on a same store basis of $127.0 million decreased 17% primarily due to lower consumption.
Foreign currency rate fluctuations also reduced expenses by $8.1 million. Partially offsetting the decrease in cost of sales was
the inclusion of costs associated with our 2016 publishing acquisitions of $116.3 million.

Total selling, general, and administrative expenses for 2017 decreased 6% from 2016 to $606.0 million. Selling, general,

and administrative expenses on a same store basis decreased 12%, primarily attributable to continued company-wide cost
efficiency efforts. Foreign currency exchange rate fluctuations also reduced selling, general, and administrative expenses by
$4.8 million. Partially offsetting the decrease in selling, general, and administrative expenses was the inclusion of costs
associated with our 2016 publishing acquisitions of $31.9 million.

Depreciation and amortization expense for 2017 was 29% higher compared to 2016 primarily due to $44.0 million of
accelerated depreciation expense incurred in 2017 associated with our facility consolidation efforts compared to $3.2 million of
accelerated deprecation incurred in same period in 2016. Depreciation and amortization expenses associated with our 2016
publishing acquisitions were $9.8 million. Foreign currency exchange fluctuations reduced depreciation expense by $0.6
million.

Impacting 2016 operating expenses were asset impairment charges of $55.9 million and restructuring charges of $45.0

million.

Publishing segment Adjusted EBITDA

In thousands

2018

2017

Operating income (GAAP basis)

163,999

Depreciation and amortization

Restructuring costs

Asset impairment charges

Acquisition-related items

Other items

96,148

48,904

50,095

—

2,351

219,677

135,214

37,376

46,796

375

(7,018)

Adjusted EBITDA (non-GAAP basis)

361,497

432,420

*** Indicates an absolute value percentage change greater than 100.

Change

(25%)

(29%)

31%

(100%)

***

(16%)

2016

Change

235,398

105,102

45,031

55,940

777

1,860

444,108

(7%)

29%

(17%)

(16%)

(52%)

***

(3%)

Adjusted EBITDA for our publishing segment decreased 16% from 2017 to 2018. This decline was primarily attributable
to declines in print advertising and circulation revenues partially offset by growth in digital advertising and marketing services
revenues as well as ongoing operating efficiencies. Adjusted EBITDA was favorably impacted by $0.8 million attributable to
foreign exchange rate changes.

Adjusted EBITDA for our publishing segment decreased 3% from 2016 to 2017. The decrease was primarily attributable to
declines in same store publishing revenues due to the continued softness in print advertising revenues and declining circulation

trends. In addition, there was an unfavorable foreign exchange rate impact of $3.3 million in 2017 compared to 2016. Partially
offsetting these decreases were the increased contributions from our 2016 acquisitions.

ReachLocal

ReachLocal was acquired and became a new operating segment in August 2016. A summary of our ReachLocal segment

results is presented below:

In thousands

2018(1)

2017(1)

Change

2016(1)

Change

Advertising and marketing services

411,505

Total operating revenues

Operating Expenses:

Cost of sales

Selling, general and administrative expenses

Depreciation and amortization

Restructuring costs

Asset impairment charges

Total operating expenses

Operating loss

411,505

222,728

142,590

42,000

4,913

377

412,608

(1,103)

358,728

207,289

135,496

33,902

980

—

377,667

(18,939)

15%

24%

***

(94%)

110,144

67,414

48,582

12,236

640

—

128,872

(18,728)

***

53%

—%

***

*** Indicates an absolute value percentage change greater than 100.
(1) Fiscal year 2018 comprises 52 weeks, fiscal year 2017 comprises 53 weeks, and fiscal year 2016 comprises 20 weeks.

December
31, 2018

December
31, 2017

December
25, 2016

As of Date
Active Clients (a)
Active Product Units (b)
(a) Active Clients is a number calculated to approximate the number of clients served. Active Clients is calculated by adjusting the number of Active Product
Units to combine clients with more than one Active Product Unit as a single Active Client. Clients with more than one location are generally reflected as
multiple Active Clients with the exception of SweetIQ and WordStream clients. SweetIQ and WordStream clients are generally reflected as single clients
regardless of the number of locations served. Because this number includes clients served through ReachLocal's reseller channel, Active Clients includes
entities with which ReachLocal does not have a direct contractual relationship. Numbers are rounded to the nearest hundred and do not include (1) clients at
Newsquest using the ReachLocal platform (as ReachLocal does not recognize the revenues associated with these services) and (2) clients from operations
which were exited or sold as of the end of the period.
(b) Active Product Units is a number calculated to approximate the number of individual products, licenses, or services we are providing under contract for
Active Clients. For example, if we were performing both SEM and display campaigns for a client that also licenses lead conversion software, we would
consider each service separately, resulting in three Active Product Units. Similarly, if a client purchases SEM campaigns for two different products or purposes,
we consider each product or purpose as separate Active Product Units. Numbers are rounded to the nearest hundred.

15,300

37,500

27,900

19,000

40,300

20,800

Operating revenues:

Revenue comparisons 2018 - 2017:

Advertising and marketing services revenues were $411.5 million for 2018, an increase of 15% compared to 2017, which

included revenues from international entities of $96.3 million for 2018 as compared to $96.4 million for 2017. The increase
was primarily attributable to higher revenues of $32.3 million from continued growth in sales from the migration of publishing
segment customers onto the ReachLocal platform and a $4.8 million increase in revenues generated from SweetIQ.
Additionally, WordStream was acquired in July 2018, which contributed revenues of $29.1 million since the acquisition date.
The increase in revenues was partially offset by lower revenues of $11.7 million due to the sale of ReachLocal's German and
Japanese affiliates in 2018. Additionally, advertising and marketing services revenues declined by $5.8 million due to six fewer
days in 2018 compared to 2017.

The increase in Active Clients as of December 31, 2018 as compared to December 31, 2017 is primarily attributable to the

addition of WordStream clients, partially offset by reductions in smaller and lower spending clients in North America, mostly
from our international customer base, and the impact of the sale of ReachLocal's German and Japanese affiliates in 2018. The
increase in Active Product Units as of December 31, 2018 as compared to December 31, 2017 is primarily attributable to the

addition of WordStream and continued cross selling of other ReachLocal products to new and existing bases, partially offset by
attrition in Active Clients.

Revenue comparisons 2017 - 2016:

Advertising and marketing services revenues were $358.7 million for 2017, which included revenues from international

operations of $96.4 million. In 2017, $29.3 million of advertising revenues were recognized as a result of the transition of
publishing segment customers to the ReachLocal platform. Additionally, SweetIQ was acquired in April 2017, which
contributed revenues of $5.2 million since the acquisition date. Advertising and marketing services revenues were $110.1
million for 2016 which included revenues from international entities of $33.1 million. Advertising and marketing services
revenues for 2016 were negatively impacted by $8.9 million from the revaluation of deferred revenue attributable to the
purchase price accounting applied at the acquisition date.

The increase in Active Clients and Active Product Units as of December 31, 2017 as compared to December 25, 2016 is

attributable to a mixture of organic growth from the North America base business, the migration of the publishing segment
digital advertising clients to the ReachLocal platform, the acquisition of SweetIQ, and the onboarding of a significant number
of new clients in Brazil, partially offset by declines in Europe and Asia Pacific.

Operating expenses:

Operating expense comparisons 2018 - 2017:

Cost of sales, which includes online media acquired from third parties, costs to manage and operate ReachLocal's solutions

and technology infrastructure, and other third-party direct costs, was $222.7 million for 2018, an increase of 7% compared to
2017. Cost of online media acquired from third-party publishers totaled $173.8 million for 2018 compared to $163.3 million for
2017. This increase was attributable to an increase of $4.6 million due to cost of sales from the acquisition of WordStream and
additional costs associated with the migration of publishing segment customers onto the ReachLocal platform. Cost of sales as
a percentage of revenue declined due to scaling of the ReachLocal business and the addition of WordStream's higher margins.

Selling, general, and administrative expenses consist primarily of personnel and related expenses for selling and marketing
staff, product development and engineering professionals, and other general and administrative functions. Total selling, general,
and administrative expenses were $142.6 million for 2018, an increase of 5% compared to 2017. Selling and marketing
expenses increased 3% as compared to 2017 due to increased expenses from WordStream of $7.8 million, partially offset by
reduced costs from the shutdown of operations in Europe and Japan. Product and technology expenses increased 27%
compared to 2017 primarily due to increased WordStream expenses of $3.2 million. Other selling, general, and administrative
costs increased 5% as compared to 2017 due to increased expenses of $4.9 million from the acquisition of WordStream
partially offset by cost reduction efforts in North America and the shutdown of operations in Europe and Japan.

Depreciation and amortization were $42.0 million for 2018, an increase of 24% compared to 2017. This increase was
primarily attributable to amortization related to the WordStream acquisition and a full year of amortization expense from the
SweetIQ acquisition.

Operating expense comparisons 2017 - 2016:

Cost of sales was $207.3 million for 2017, which included online media acquired from third-party publishers totaling
$163.3 million. Cost of sales was $67.4 million in 2016, which included online media acquired from third-party publishers of
$66.3 million.

Selling, general, and administrative expenses were $135.5 million for 2017 and $48.6 million for 2016. 2017 totals
included salaries, benefits, and other costs related to sales and marketing staff of $43.5 million, commission expense of $32.0
million, general and administrative expenses of $26.2 million, and product and technology expenses of $8.3 million. 2016
totals included salaries, benefits, and other costs of $16.5 million, commission expense of $10.0 million, general and
administrative expenses of $8.7 million, and product and technology expenses of $3.0 million.

Depreciation and amortization was $33.9 million for 2017, which included amortization of developed technology

intangible assets of $27.9 million. Depreciation and amortization was $12.2 million for 2016, which included amortization of
developed technology intangible assets of $6.6 million.

ReachLocal segment Adjusted EBITDA

In thousands

Operating loss (GAAP basis)

Depreciation and amortization

Restructuring costs

Asset impairment charges

Acquisition-related items

Other items

2018

2017

(1,103) $

42,000

4,913

377

459

1,249

(18,939)

33,902

980

—

567

Adjusted EBITDA (non-GAAP basis)

47,895

16,553

*** Indicates an absolute value percentage change greater than 100.

Change

(94%)

24%

***

2016

Change

(18,728)

12,236

640

—

(5,852)

***

53%

—%

***

Adjusted EBITDA for our ReachLocal segment was $47.9 million in 2018 compared to $16.6 million in 2017. Profitability
improved in 2018 due to the addition of the higher margin WordStream business of $9.7 million, the scaling of revenues on the
ReachLocal platform, and growth in average revenue per client.

Adjusted EBITDA for our ReachLocal segment was $16.6 million in 2017 compared to a $5.9 million loss in 2016. The
adjusted EBITDA loss in 2016 is attributable to the exclusion of $8.9 million in revenue due to the purchase price accounting
revaluation of deferred revenue applied at the acquisition date.

Corporate and other

Corporate operating revenues were $7.4 million in 2018, $4.8 million in 2017, and $4.2 million in 2016.

Corporate operating expenses were $141.6 million for 2018, an increase of 3% compared to 2017. Included in corporate

operating expenses for 2018 were $8.8 million of severance-related charges and $5.3 million of facility consolidation charges.
Included in corporate operating expenses for 2017 were $5.9 million of severance-related charges. The increase in restructuring
charges was partially offset by a decrease in depreciation expense of $3.2 million.

Corporate operating expenses were $138.0 million in 2017, an increase of 5% compared to 2016. The increase in expense
was primarily driven by increase in depreciation expense of $7.1 million, severance-related charges of $5.8 million, and other
business transformation costs, including changes to our expense allocation structure. These increases were offset by a reduction
in acquisition-related expenses of $27.1 million.

Non-operating income (expense)

Interest expense: Interest expense for the year ended December 31, 2018 was $24.7 million compared to $17.1 million in

2017. The increase in interest expense is due to a higher effective interest rate incurred on our convertible debt of 7.91% as
compared to an average effective interest rate on our Credit Facility of 4.0%, partially offset by the reduced balance on our
Credit Facility of $135.0 million in 2018 as compared to a balance of $355.0 million in 2017.

Interest expense for the year ended December 31, 2017 was $17.1 million compared to $12.8 million in 2016. The increase

in interest expense was primarily attributable to the timing of additional borrowings under the Credit Facility.

Other non-operating items, net: Our non-operating items, net, are driven by certain items that fall outside of our normal
business operations. Our non-operating items, net, consisted of $26.1 million in income for 2018 compared to $9.7 million in
expense in 2017. The increase in other non-operating income was due primarily to a decrease of $30.9 million in non-operating
pension expense and $10.3 million in gains on the sale of businesses in 2018, partially offset by increases in other non-
operating expenses.

Our non-operating items, net, consisted of $9.7 million in expense for 2017 compared to $10.2 million in expense in 2016.

As a result of our early adoption of new accounting guidance, included in non-operating expenses are certain net periodic
pension and postretirement benefit costs of $21.0 million in 2017 and $9.9 million in 2016. Other non-operating expense, net,
for 2017 also included a $2.8 million gain on investment.

Income tax expense (benefit)

The following table outlines our pre-tax net income and income tax expense amounts:

In thousands

Pre-tax net income

Income tax expense

Effective tax rate

2018

2017

2016

30,159

40,741

15,119

33,854

66,428

13,718

50%

83%

21%

Our effective income tax rate for the year ended December 31, 2018 was 50%. This rate was primarily impacted by
goodwill impairment related to certain tax assets in the U.K. and an increase in the valuation allowance related to intangible
assets. Without these two items, the effective income tax rate would have been 16%, which is lower than the statutory tax rate
due to the carryback of net operating losses to a higher tax rate year.

The decrease in the effective income tax rate from 2017 to 2018 was primarily driven by the enactment of the Tax Cuts and

Jobs Act (the “Tax Act”) in December 2017. The Tax Act contains significant changes to corporate taxation, including a
reduction of the corporate tax rate from 35% to 21%, limitation of the tax deduction for interest expense to 30% of earnings,
limitation of the deduction for net operating losses to 80% of current year taxable income, elimination of net operating loss
carrybacks for losses generated after 2017, one time taxation of offshore earnings at reduced rates regardless of whether they
are repatriated, elimination of U.S. tax on foreign earnings (subject to certain important exceptions), immediate deductions for
certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business
deductions and credits. The Tax Act also includes certain provisions that offset the benefits of the rate reduction such as repeal
of the domestic production deduction and disallowance of performance based officers’ compensation in excess of $1 million.

As of December 31, 2018, we have finalized our calculation of historical foreign earnings and have concluded we are not
subject to the Transition Tax, resulting in no adjustment to provisional amounts recorded in 2017. In 2017, we remeasured our
deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%
for U.S. federal tax purposes. For the year ended December 31, 2018, upon further analysis and refinement of our calculation,
we have recognized a favorable adjustment of $2.6 million to the provisional amounts recorded at December 31, 2017, which is
included as a component of income tax expense from continuing operations. This amount is primarily related to the carryback
of net operating losses into higher tax rate years. We consider the enactment date remeasurement of deferred tax assets and
liabilities to be completed. We have also elected to account for the tax liability from GILTI tax in the year the tax is incurred.

Our deferred tax assets were further reduced through the establishment of valuation allowances related to unamortizable
intangible assets for two of our publishing properties of $7.6 million and a valuation allowance on share-based compensation of
$1.9 million, which were recorded as additional income tax expense in 2018.

Our pre-tax income earned in foreign jurisdictions continues in 2016 through 2018 to be higher than domestic pre-tax

income primarily due to the higher expenses domestically related to restructuring charges and asset impairment charges.

Net income and earnings per share

Net income: Net income was $15.0 million for 2018 compared to net income of $6.9 million for 2017. The increase in net
income is primarily attributable to the increase in other non-operating items of $35.8 million and the decrease in the provision
for income taxes of $18.7 million, offset by a decrease in operating income of $38.8 million.

Net income was $6.9 million for 2017 compared to $52.7 million for 2016. The decrease in net income is primarily
attributable to the decline in operating income of $21.8 million and the increase in the provision for income taxes of $20.1
million.

Diluted earnings per share: Diluted earnings per share were $0.13 for 2018 compared to earnings per share of $0.06 for

2017. The increase in diluted earnings per share for 2018 compared to 2017 was primarily attributable to the increase in net
income discussed above.

Diluted earnings per share were $0.06 for 2017 compared to $0.44 for 2016. The decrease in diluted earnings per share for

2017 compared to 2016 was primarily attributable to the decline in net income discussed above.

Liquidity and capital resources

Our operations, which have historically generated strong positive cash flow, along with our Credit Facility, are expected to

provide sufficient liquidity to allow us to pursue strategic acquisitions and simultaneously meet our financial requirements,
including those for investments, dividends, and share repurchases.

Details of our cash flows are included in the table below:

In thousands

Net cash flow from operating activities

Net cash flow used for investing activities

Net cash flow from (used for) financing activities

Effect of currency exchange rate change
Net increase (decrease) in cash

Operating cash flows

2018

2017

2016

157,517

236,023

167,923

(128,526)

(57,869)

1,707
(27,171) $

(87,569)

(141,786)

(848)
5,820

(519,073)

271,418

(272)
(80,004)

Our net cash flow from operating activities was $157.5 million for 2018 compared to $236.0 million of net cash flow from

operating activities for 2017. The decrease in net cash flow from operating activities was primarily attributable to additional
pension and postretirement contributions of $22.4 million. In addition, we made U.S. tax payments, net of refunds of $5.4
million and foreign tax payments, net of refunds of $0.6 million during 2018, compared to tax refunds, net of payments, of
$18.9 million in 2017. The remainder of the change in cash flows from operating activities is attributed to the decrease in
operating revenues of 7% not completely offset by the decline in cost of sales of 8% and selling, general, and administrative
expenses of 3% as well as the overall timing of payments and receipts.

Our net cash flow from operating activities was $236.0 million in 2017 compared to $167.9 million of net cash flow from

operating activities in 2016. The increase in net cash flow from operating activities was primarily attributable to tax refunds,
net of payments, in 2017 of $18.9 million compared to tax payments, net of refunds, in 2016 of $25.7 million. In addition,
pension and other postretirement contributions decreased by $34.8 million. The remainder of the change in cash flows from
operating activities is due to the overall timing of payments and receipts.

In addition to any other contributions that may be required, we expect to contribute approximately $25.0 million to the

Gannett Retirement Plan in 2019, as well as $47.0 million in 2020 and $15.0 million in 2021. Of the $47.0 million estimated
contribution for 2020, we are contractually obligated to contribute $25.0 million. We also expect to contribute approximately
$30.5 million to the U.K. Pension Plans in 2019, $25.2 million in 2020 and $22.9 million in 2021. In 2019, we also expect to
make aggregate contributions of $29.6 million to our other underfunded plans and expect to make additional contributions
thereafter.

Investing cash flows

Cash flows used for investing activities totaled $128.5 million for 2018 primarily driven by payments of $131.2 million for

acquisitions, primarily related to the WordStream acquisition, and capital expenditures of $63.1 million, partially offset by
proceeds from sales of certain assets of $69.7 million.

Cash flows used for investing activities totaled $87.6 million for 2017 primarily driven by capital expenditures of $72.3

million and payments of $44.3 million for acquisitions, primarily related to the SweetIQ acquisition, partially offset by
proceeds from sales of certain assets of $28.4 million.

Cash flows used by investing activities totaled $519.1 million for 2016 primarily driven by payments of $464.1 million for
our 2016 acquisitions, capital expenditures of $60.0 million, and investments of $12.4 million, partially offset by proceeds from
sales of certain assets of $17.4 million.

Financing cash flows

Cash flows used for financing activities totaled $57.9 million for 2018, which included net repayments of borrowings

under our Credit Facility of $220.0 million, partially offset by net proceeds from our convertible debt offering of $195.3
million. In addition, we had payments of dividends to our shareholders of $72.3 million and payments for employee taxes

withheld from stock awards of $6.7 million, partially offset by proceeds from the sale and leaseback of properties accounted for
under the financing method of $45.9 million.

Cash flows used for financing activities totaled $141.8 million for 2017, primarily consisting of payment of dividends of

$72.3 million, net repayments of borrowings under our Credit Facility of $45.0 million, and share repurchases of $17.4 million.

Cash flows from financing activities were $271.4 million for 2016, primarily as a result of net proceeds from borrowings
under our Credit Facility of $400.0 million to fund our 2016 acquisitions, partially offset by the payment of dividends of $92.5
million, and share repurchases of $32.7 million.

Revolving credit facility

We maintain a secured revolving credit facility pursuant to which we may borrow up to an aggregate principal amount of
$500 million (credit facility). Under the credit facility, we may borrow at an applicable margin above the Eurodollar base rate
(LIBOR loan) or the higher of the Prime Rate, the Federal Funds Effective Rate plus 0.50%, or the one month LIBOR rate plus
1.00% (ABR loan). The applicable margin is determined based on our total leverage ratio but differs between LIBOR loans and
ABR loans. For LIBOR-based borrowing, the margin varies from 2.00% to 2.50%. For ABR-based borrowing, the margin
varies from 1.00% to 1.50%. Up to $50 million of the credit facility is available for issuance of letters of credit. The credit
facility matures on June 29, 2020.

Customary fees related to the credit facility, including commitment fees on the undrawn commitments of between 0.30%
and 0.40% per annum, are payable quarterly in arrears, and are based on our total leverage ratio. Borrowings under the credit
facility are guaranteed by our wholly-owned material domestic subsidiaries. All obligations of Gannett and each subsidiary
guarantor under the credit facility are or will be secured by first priority security interests in our equipment, inventory, accounts
receivable, fixtures, general intangibles and other personal property, mortgages on certain material real property, and pledges of
the capital stock of each subsidiary guarantor.

Under the credit facility, our consolidated interest coverage ratio cannot be less than 3.00:1.00, and our total leverage ratio
cannot exceed 3.00:1.00, in each case as of the last day of the test period consisting of the last four consecutive fiscal quarters.
We were in compliance with these financial covenants as of December 31, 2018.

The credit facility also contains a number of covenants that, among other things, limit or restrict our ability, subject to
certain exceptions, to: (i) permit certain liens on current or future assets, (ii) enter into certain corporate transactions, (iii) incur
additional indebtedness, (iv) make certain payments or declare certain dividends or distributions, (v) dispose of certain
property, (vi) make certain investments, (vii) prepay or amend the terms of other indebtedness, or (viii) enter into certain
transactions with our affiliates. We were in compliance with these covenants as of December 31, 2018.

As of December 31, 2018, we had $135.0 million in outstanding borrowings under the credit facility and $23.1 million of

letters of credit outstanding, leaving $341.9 million of availability.

Convertible debt

On April 9, 2018, we completed an offering of 4.75% convertible senior notes, with an initial offering size of $175.0
million aggregate principal amount. As part of the offering, the initial purchaser of the notes exercised its option to purchase an
additional $26.3 million aggregate principal amount of notes, resulting in total aggregate principal of $201.3 million and net
proceeds of approximately $195.3 million. Interest on the notes is payable semi-annually in arrears. The notes mature on
April 15, 2024 with our earliest redemption date being April 15, 2022. The stated conversion rate of the notes is 82.4572 shares
per $1,000 in principal or approximately $12.13 per share.

Upon conversion, we have the option to settle in cash, shares of our common stock, or a combination of the two.
Additionally, holders may convert the notes at their option prior to January 15, 2024 only if one or more of the following
conditions are present: (1) if, during any 20 of the 30 trading days immediately preceding a quarter end, our common stock
trading price is 130% of the stated conversion price, (2) if, during the five business day period after any ten consecutive trading
day period, the trading price per $1,000 principal amount of notes is less than 98% of the product of (a) the last reported sale
price of the company's common stock and (b) the conversion rate on each such trading day, or (3) a qualified change in control
event occurs. Depending on the nature of the triggering event, the conversion rate may also be subject to adjustment.

As of December 31, 2018, no shares were issued upon conversion, exercise, or satisfaction of the required conditions

because no conversion triggers were considered met during the period.

Share repurchase program

In May 2018, our Board of Directors approved a share repurchase program authorizing us to repurchase shares with an

aggregate value of up to $100 million over a three-year period, replacing our initial program dated July 2015. Shares may be
repurchased either in the open market or in privately negotiated block transactions. Management's decision to repurchase shares
depends on several factors, including share price and other corporate liquidity requirements. Under these current and legacy
programs, we did not repurchase any shares in 2018. In 2017, we repurchased 2.0 million shares at a cost of $17.4 million. In
2016, we repurchased 3.8 million shares at a cost of $32.7 million.

Operating results non-GAAP information

Presentation of non-GAAP information: We use non-GAAP financial performance and liquidity measures to supplement

the financial information presented on a GAAP basis. These non-GAAP financial measures should not be considered in
isolation from or as a substitute for the related GAAP measures and should be read together with financial information
presented on a GAAP basis.

In this report, we present adjusted EBITDA, adjusted net income, and adjusted diluted earnings per share (EPS), which are
non-GAAP financial performance measures that exclude from our reported GAAP results the impact of certain items consisting
primarily of workforce restructuring charges, facility consolidation costs, and non-cash asset impairment charges. We believe
such expenses, charges, and gains are not indicative of normal, ongoing operations, and their inclusion in results makes for
more difficult comparisons between years and with peer group companies. In the future, however, we are likely to incur
expenses, charges, and gains similar to the items for which the applicable GAAP financial measures have been adjusted and to
report non-GAAP financial measures excluding such items. Accordingly, exclusion of those or similar items in our non-GAAP
presentations should not be interpreted as implying the items are non-recurring, infrequent, or unusual.

We define our non-GAAP measures, which may not be comparable to similarly titled measures reported by other

companies, as follows:

• Adjusted EBITDA is a non-GAAP financial performance measure we believe offers a useful view of the overall operation of
our businesses. Adjusted EBITDA is defined as net income before (1) income taxes, (2) interest expense, (3) equity income,
(4) other non-operating items, (5) restructuring costs (including severance-related and facility consolidation costs) (6)
acquisition-related expenses (including certain integration expenses), (7) asset impairment charges, (8) other items
(including certain business transformation costs, litigation expenses, multi-employer pension withdrawals, and gains or
losses on certain investments), (9) depreciation, and (10) amortization. When adjusted EBITDA is discussed in this report,
the most directly comparable GAAP financial measure is net income.

• Adjusted net income is a non-GAAP financial performance measure we use for the purpose of calculating adjusted EPS.
Adjusted net income is defined as net income before the adjustments we apply in calculating adjusted EPS as described
below. We believe presenting adjusted net income is useful to enable investors to understand how we calculate adjusted EPS,
which provides a useful view of the overall operation of our business. When adjusted net income is described in this report,
the most directly comparable GAAP financial measure is net income.

• Adjusted EPS is a non-GAAP financial performance measure we believe offers a useful view of the overall operation of our
business. We define adjusted EPS as EPS before tax-effected (1) restructuring costs (including severance-related and facility
consolidation costs), (2) asset impairment charges, (3) acquisition-related expenses (including certain integration expenses),
(4) non-operating gains and losses, and (5) other items (including certain business transformation expenses, litigation
expenses, multi-employer pension withdrawals, and gains or losses on certain investments). The tax impact on these non-
GAAP tax deductible adjustments is based on the estimated statutory tax rates for the U.K. of 19% and the U.S. of 25.5%. In
addition, tax is adjusted in certain years for non-recurring items such as non-deductible acquisition costs, a tax benefit
related to a worthless stock and bad debt deduction, effects related to the passage of the Tax Cuts and Jobs Act, and a
valuation allowance on deferred tax assets related to the tax basis of certain intangibles. When adjusted EPS is discussed in
this report, the most directly comparable GAAP financial measure is diluted EPS.

• Free cash flow is a non-GAAP liquidity measure that adjusts our reported GAAP results for items we believe are critical to

the ongoing success of our business. We define free cash flow as cash flow from operating activities less capital
expenditures, which results in a figure representing free cash flow available for use in operations, additional investments,
debt obligations, and returns to shareholders. When free cash flow is discussed in this report, the most directly comparable
GAAP financial measure is net cash from operating activities.

We use non-GAAP financial measures for purposes of evaluating our performance and liquidity. Therefore, we believe

each of the non-GAAP measures presented provides useful information to investors by allowing them to view our businesses
through the eyes of our management and Board of Directors, facilitating comparison of results across historical periods, and
providing a focus on the underlying ongoing operating performance of our business. Many of our peer group companies present
similar non-GAAP measures to better facilitate industry comparisons.

Discussion of non-GAAP measures: The following is a discussion of our as adjusted non-GAAP financial results.

Adjusted EBITDA

Reconciliations of adjusted EBITDA from net income presented in accordance with GAAP on our Consolidated statements

of income are presented below:

In thousands

Net income (GAAP basis)

Provision for income taxes

Interest expense

Other non-operating items, net

Operating income (GAAP basis)

Depreciation and amortization

Restructuring costs

Asset impairment charges

Acquisition-related items

Other items

2018

2017

15,040

15,119

24,669

(26,066)

28,762

6,887

33,854

17,142

9,688

67,571

157,714

191,885

67,926

50,472

7,555

9,302

44,284

46,796

5,202

4,195

Change
***

(55%)

44%

***

(57%)

(18%)

53%

45%

***

2016

Change

52,710

13,718

12,791

10,151

89,370

132,964

45,757

55,940

32,683

3,181

(87%)

***

34%

(5%)

(24%)

44%

(3%)

(16%)

(84%)

32%

Adjusted EBITDA (non-GAAP basis)

321,731

359,933

(11%)

359,895

*** Indicates an absolute value percentage change greater than 100.

Adjusted EBITDA decreased 11% from 2017 to 2018. This decline was primarily attributable to declines in print

advertising and circulation revenues, partially offset by growth in digital advertising and marketing services revenues as well as
ongoing operating efficiencies. Adjusted EBITDA was favorably impacted by $0.9 million due to foreign exchange rate
changes.

Adjusted EBITDA in 2017 was flat compared to 2016. This was primarily due to the contributions from our acquisitions as

well as additional EBITDA from the 53rd week of operations in 2017, offset by the continued softness in print advertising
revenues and declining circulation trends. Also impacting adjusted EBITDA was an unfavorable foreign exchange rate impact
of $3.3 million in 2017 compared to 2016.

Adjusted diluted EPS

Reconciliations of adjusted diluted earnings per share from net income presented in accordance with GAAP on our

Consolidated statements of income are presented below:

In thousands, except per share amounts

2018

2017

Change

2016

Change

Restructuring costs (including accelerated
depreciation)

Asset impairment charges

Acquisition-related items

(Gains) losses from non-operating activities

Other items

Pretax impact

Income tax impact of above items
Estimated effect of U.S. statutory tax rate
change
Other tax-related items
Impact of items affecting comparability on
net income

Net income (GAAP basis)
Impact of items affecting comparability on
net income

Adjusted net income (non-GAAP basis)

Earnings per share - diluted (GAAP basis)
Impact of items affecting comparability on
net income
Adjusted earnings per share - diluted (non-
GAAP basis)
Diluted weighted average number of common
shares outstanding (GAAP basis)
Diluted weighted average number of common
shares outstanding (non-GAAP basis)

84,654

50,472

7,555

(12,064)

4,996

135,613

(30,913)

(2,583)

7,564

109,681

15,040

109,681

124,721

0.13

0.95

1.08

88,331

46,796

5,202

(4,710)

(3,276)

132,343

(50,826)

42,776

(12,169)

(4%)

45%

***

(39%)

***

112,124

(2%)

6,887

112,124

119,011

0.06

0.97

1.03

***

(2%)

***

(2%)

—%

48,975

55,940

32,683

3,115

1,860

142,573

(50,609)

—

91,964

80%

(16%)

(84%)

***

(7%)

***

22%

52,710

(87%)

91,964

144,674

0.44

0.78

1.22

118,625

22%

(18%)

(86%)

24%

(16%)

(3%)

115,751

115,610

115,751

115,610

*** Indicates an absolute value percentage change greater than 100.

Adjusted diluted earnings per share was $1.08 for 2018 compared to $1.03 in 2017. The increase in adjusted diluted EPS
was attributable to the same factors discussed above for adjusted EBITDA in addition to a decrease in non-operating pension
expenses.

Adjusted diluted earnings per share was $1.03 for 2017 compared to $1.22 in 2016. The decline in adjusted diluted EPS
was attributable to the same factors discussed above for adjusted EBITDA in addition to changes in non-operating income and
expenses, particularly pension expense and interest expense.

Free cash flow

Reconciliations of free cash flow from cash flow from operating activities presented in accordance with GAAP on our

Consolidated statements of cash flow are presented below:

In thousands

Cash flow from operating activities

Capital expenditures

Free cash flow

2018

2017

Change

2016

Change

157,517

(63,143)

94,374

236,023

(72,325)

163,698

(78,506) $
9,182

(69,324) $

167,923

(60,048)

107,875

68,100

(12,277)

55,823

Free cash flow for 2018 decreased by $69.3 million from the same period in 2017. This decrease was primarily attributable

to the decrease in net cash flow from operating activities of $78.5 million compared to 2017. The decrease in net cash flow
from operating activities was primarily attributable to additional pension and other postretirement contributions of $22.4
million. In addition, we made tax payments, net of refunds of $6.0 million in 2018 compared to tax refunds, net of payments, in
2017 of $18.9 million. The remainder of the change in free cash flow is attributed to the decrease in operating revenues of 7%
not completely offset by the decline in cost of sales of 8% and selling, general, and administrative expenses of 3% as well as the
overall timing of payments and receipts, partially offset by a decrease in cash outflows for capital expenditures of $9.2 million
during 2018 compared to 2017.

Free cash flow for 2017 increased by $55.8 million from the same period in 2016. This increase was primarily attributable
to the increase in net cash flow from operating activities of $68.1 million compared to 2016. The increase in net cash flow from
operating activities was primarily attributable to tax refunds, net of payments, in 2017 of $18.9 million compared to tax
payments, net of refunds, in 2016 of $25.7 million. In addition, pension and other postretirement contributions decreased by
$34.8 million. Partially offsetting these increases in cash flows was an increase in cash outflows for capital expenditures during
2017 of $12.3 million, which was primarily attributable to software development.

Contractual obligations and commitments

The following table summarizes the expected cash outflows resulting from financial contracts and commitments as of the

year ended December 31, 2018:

In thousands

Total

2019

2020 - 2021

2022 - 2023

Thereafter

Payments Due by Period

396,180

Operating leases (a)
Purchase obligations (b) (e)
Other noncurrent liabilities (c)
Retirement plan contributions (d)
Total
$
(a) See Note 12 — Commitments, contingencies and other matters to the consolidated financial statements.
(b)

1,071,509

148,583

123,851

291,510

521,838

29,605

54,188

29,640

59,134

151,915

69,663

96,602

74,932

115,740

—

165,512

105,600

—

318,215

190,672

271,112

Includes purchase obligations related to wire services, interactive marketing agreements, professional services, paper distribution agreements, printing
contracts, and other legally binding commitments. Amounts for which we are liable under purchase orders outstanding at December 31, 2018 are reflected
in the Consolidated Balance Sheets as accounts payable and accrued liabilities and are excluded from the table above.

(c) Consists of unfunded and under-funded postretirement benefit plans excluding the Gannett Retirement Plan and Newsquest Pension Scheme. Unfunded
plans include the Gannett 2015 Supplemental Retirement Plan, the Gannett Retiree Welfare Plan, and a SERP plan which was assumed pursuant to our
acquisition of JMG. Under-funded plans include the Newspaper Guild of Detroit Plan. Contributions beyond the next fiscal year are excluded due to
uncertainties regarding significant assumptions involved in estimating these contributions such as interest rate levels as well as the amount and timing of
invested asset returns.

(d) Consists of amounts we are contractually obligated to contribute to the GRP and Newsquest Pension Scheme. This total does not include additional

contributions which may be required to meet IRS minimum funding standards as these contributions are subject to uncertainties regarding significant
assumptions involved in their estimation such as interest rate levels as well as the amount and timing of invested asset returns.
In January 2019, a material new contract was signed requiring incremental purchase obligations of $52.5 million for 2019 and $63.0 million for 2020.

(e)

Due to uncertainty with respect to the timing of future cash flows associated with unrecognized tax benefits at

December 31, 2018, we are unable to make reasonably reliable estimates of the period of cash settlement. Therefore, $24.6
million of unrecognized tax benefits have been excluded from the contractual obligations table above. See Note 10 — Income
taxes to the consolidated financial statements for a further discussion of income taxes.

Off-balance sheet arrangements

As of December 31, 2018, we had no material off-balance sheet arrangements as defined in the rules of the Securities and

Exchange Commission.

Capital stock

In May 2018, we announced our Board of Directors approved a share repurchase program authorizing us to repurchase
shares with an aggregate value of up to $100 million over a three-year period, replacing our initial program dated July 2015.
Shares may be repurchased either in the open market or in privately negotiated block transactions. Management's decision to
repurchase shares will depend on share price and other corporate liquidity requirements. We expect that share repurchases may
occur from time to time over the three years. Under current and legacy programs, 5.8 million shares have been repurchased at a
total cost of $50.0 million through December 31, 2018.

The Gannett Co., Inc. 401(k) Savings Plan, our principal defined contribution plan, includes a company matching

contribution in the form of our stock. We fund the match by buying our stock in the open market and depositing it in the
participant's account. Beginning in 2019, we will fund the match based on the investment elections of the plan participants.

Our common stock outstanding, net of treasury stock, at December 31, 2018, totaled 113.1 million shares, compared to
111.8 million shares at December 31, 2017 and 112.9 million shares at December 25, 2016. As of February 22, 2019, our shares
were held by 5,691 holders of record.

Dividends

Dividends declared on common stock amounted to $72.3 million in 2018.

On February 27, 2019, the Board of Directors declared a dividend of $0.16 per share, payable on March 25, 2019, to

shareholders of record as of the close of business March 11, 2019.

We expect to continue to pay regular quarterly cash dividends on our common stock. Future cash dividends will be at the

discretion of our Board of Directors, and the amount of cash dividends per share will depend upon, among other things, our
future earnings, financial condition, results of operations, level of indebtedness, capital requirements and surplus, contractual
restrictions, the number of shares of common stock outstanding, as well as the legal requirements, regulatory constraints, and
other factors that our Board of Directors deems relevant. Our ability to pay cash dividends on our common stock is subject to
our continued compliance with the terms of our Credit Facility, including compliance with all financial and other covenants.

Seasonality

Our revenues are subject to moderate seasonality due primarily to fluctuations in advertising volumes. Our advertising
revenues for publishing are typically highest in the company's fourth quarter due to holiday and seasonal advertising and lowest
in the first quarter following the holiday season. The volume of advertising sales in any period is also impacted by other
external factors such as competitors' pricing, advertisers' decisions to increase or decrease their advertising expenditures in
response to anticipated consumer demand, and general economic conditions.

Critical accounting policies and the use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management

to make estimates and assumptions about future events that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ significantly from those estimates. We believe the following discussion
addresses our most critical accounting policies, which are those that are important to the presentation of our financial condition
and results of operations and require management's most subjective and complex judgments.

Business combinations: We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities

assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase
consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value
of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to
intangible assets.

Critical estimates in valuing certain identifiable assets include, but are not limited to, expected long-term market growth,

future expected operating expenses, cost of capital, and appropriate discount rates. Management's estimates of fair value are
based upon assumptions believed to be reasonable but which are inherently uncertain and unpredictable. As a result, actual
results may differ from estimates.

Goodwill: As of December 31, 2018, we had $779.6 million of goodwill, which represented approximately 31% of our
total assets. Goodwill represents the excess of acquisition cost over the fair value of assets acquired, including identifiable
intangible assets, net of liabilities assumed. Goodwill is tested for impairment annually on the first day of our fourth quarter or
between annual tests if events occur or circumstances change that would more likely than not reduce the fair value of a
reporting unit below its carrying amount.

In 2018, the company early adopted new accounting guidance which simplifies the goodwill impairment quantitative test
by removing the requirement to perform a two-step analysis. Before performing the annual goodwill impairment test, we are
first permitted to perform a qualitative assessment to determine if the quantitative test must be completed. The qualitative
assessment considers events and circumstances such as macroeconomic conditions, industry and market conditions, cost factors
and overall financial performance, as well as company and specific reporting unit specifications. If, after performing this
assessment, we conclude it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we
are required to perform a quantitative test. Otherwise, the test is not required. For 2018, a qualitative assessment was not used.

In the quantitative test, we are required to determine the fair value of each reporting unit and compare it to the carrying

amount of the reporting unit. Fair value of the reporting unit is defined as the price that would be received to sell the unit as a
whole in an orderly transaction between market participants at the measurement date. The company generally determines the
fair value of a reporting unit using a combination of a discounted cash flow analysis and a market-based approach. Estimates of
fair value include inputs that are subjective in nature, involve uncertainties and matters of significant judgment that are made at
a specific point in time. Changes in key assumptions from period to period could significantly affect the estimates of fair value.
Significant assumptions used in the fair value estimates include projected revenues and related growth rates over time,
projected operating cash flow margins, discount rates, valuation multiples of entities engaged in the same or similar lines of
business, and future economic and market conditions.

After considering the above factors, if the carrying amount of the reporting unit exceeds its fair value, a goodwill

impairment is recorded for the amount of carrying value which exceeds the fair value. Fair value of the reporting units depends
on several factors, including the future strength of the economy in our principal markets. New and developing competition as
well as technological change could also adversely affect future fair value estimates. Any one or a combination of these factors
could lead to declines in reporting unit fair values and result in goodwill impairment charges.

All three of our reporting units (Domestic Publishing, the U.K. Group, and ReachLocal) have goodwill balances. The
estimated fair value of the Domestic Publishing and ReachLocal reporting units exceeded the carrying value at the most recent
measurement date by 7% and 26%, respectively. The carrying value of our U.K. Group reporting unit exceeded the fair value,
and a goodwill impairment charge of $13.8 million was recorded. While the goodwill of the Domestic Publishing reporting unit
is not currently impaired, there could be an impairment in the future as a result of changes in certain assumptions. In estimating
the fair value of the U.K. Group and Domestic Publishing reporting units, the company assumed the rate of revenue decline
will decrease over time which has been factored into our long term growth rates and has also assumed there will be additional
cost saving measures implemented that will partially offset the revenue declines. Though we believe the financial projections
used to determine the fair value of the reporting units are reasonable and achievable, the fair value could be adversely affected
if the reporting units are not able to execute on customer opportunities or realize cost savings. Other significant assumptions
that could impact the estimated fair value include discount rates and market multiples. When determining these assumptions
and preparing projections, we consider each reporting unit’s historical results and trends as well as general economic
conditions, the risk-free interest rate environment, competitor efforts, and customer spending patterns. Although the
assumptions used reflect Gannett’s best estimates as of the valuation date, changes in assumptions would affect the estimation
of the fair value. A 1% increase in the Domestic Publishing reporting unit weighted average cost of capital would result in the
estimated fair value exceeding the carrying value for the reporting unit by 4%. As of December 31, 2018, our reporting units
(Domestic Publishing, the U.K. Group, and ReachLocal) have goodwill balances representing 55%, 19%, and 26%,
respectively, of the total goodwill balance of $779.6 million.

Intangible assets (indefinite-lived and amortizable): Intangible assets consist of mastheads, trade names, domain names,

developed technology, and customer relationships.

Local mastheads (e.g., publishing periodical titles and web site domain names) and certain trade names are not subject to

amortization. As a result, they are tested for impairment annually on the first day of the fourth quarter or more frequently if

events or changes in circumstances suggest the asset might be impaired. The quantitative impairment test consists of a
comparison of the fair value of each masthead, domain name, or trade name with its carrying amount. We use a relief from
royalty approach which utilizes a discounted cash flow model to determine the fair value of each masthead, domain name, or
trade name. Management's judgments and estimates of future operating results in determining the intangibles fair values are
consistently applied to each underlying business in determining the fair value of each intangible asset. In 2018, following this
testing, we recognized impairment charges of $11.4 million. These charges were to bring the recorded indefinite-lived
intangibles equal to their implied fair values based on future projections.

Our amortizable intangible assets consist mainly of developed technology, customer relationships, and certain trade names

and mastheads. Developed technology comprises digital marketing solutions and other technology acquired as part of the
ReachLocal, SweetIQ, and WordStream transactions. Customer relationships include subscriber lists and advertiser
relationships. These asset values are amortized systematically over their estimated useful lives. When triggering events are
identified, an impairment assessment of our definite-lived intangibles is performed using the excess earnings method. The
excess earnings method approach utilizes the present value of projected cash flows expected to be generated by the intangibles
less charges representing the contribution of other assets to those cash flows. In 2018, following this testing, we recognized
impairment charges of $4.6 million. These charges were to bring the recorded definite-lived intangibles equal to their implied
fair values based on future projections.

Property, plant and equipment: Property, plant, and equipment are recorded at cost and depreciated on a straight-line basis

over the estimated useful lives of such assets. Changes in circumstances such as technological advances or changes to our
business model or capital strategy could result in actual useful lives differing from our estimates. In cases where we determine
the useful life of property, plant, and equipment should be shortened, we would, after evaluating for impairment, depreciate the
asset over its revised remaining useful life thereby increasing depreciation expense.

Accelerated depreciation was recorded in 2018 and 2017 for certain property, plant, and equipment, reflecting specific

decisions to consolidate production and other business services.

We review our property, plant, and equipment assets for potential impairment at the asset group level (generally at the local

business level) by comparing the carrying value of such assets with the expected undiscounted cash flows to be generated by
those asset groups and local business units. The carrying value of a long-lived asset group is considered impaired when the
projected undiscounted future cash flows are less than their carrying value. We measure impairment based on the amount by
which the carrying value exceeds the fair value. In 2018, we recognized $20.8 million of impairment charges primarily
resulting from assets we have classified as held-for-sale in connection with our facility consolidation and cost saving initiatives.

Pension accounting: We, along with our subsidiaries, have various defined benefit retirement plans under which

substantially all of the benefits have been frozen in previous years.

We account for our pension plans in accordance with the applicable accounting guidance, which requires us to include the

funded status of our pension plans in our balance sheets and to recognize, as a component of other comprehensive income
(loss), the gains or losses that arise during the period but are not recognized in pension expense. Pension expenses associated
with service costs are reported on the Consolidated statements of income as Cost of sales or Selling, general and administrative
expenses. All other pension expenses are reported on the Consolidated statements of income as Other non-operating items, net.

The determination of pension plan obligations and expense is dependent upon a number of assumptions regarding future
events, the most important of which are the discount rate applied to pension plan obligations and the expected long-term rate of
return on plan assets. The discount rate assumption is based on investment yields available at year-end on corporate bonds rated
AA and above with a maturity to match the expected benefit payment stream. A decrease in discount rates would increase
pension obligations.

We establish the expected long-term rate of return by developing a forward-looking, long-term return assumption for each
pension fund asset class, taking into account factors such as the expected real return for the specific asset class and inflation. A
single long-term rate of return is then calculated as the weighted average of the target asset allocation percentages and the long-
term return assumption for each asset class. We apply the expected long-term rate of return to the fair value of the pension
assets in determining the dollar amount of the expected return. Changes in the expected long-term return on plan assets would
increase or decrease pension plan expense. The effects of actual results differing from these assumptions are accumulated as
unamortized gains and losses. A corridor approach is used in the amortization of these gains and losses by amortizing the
balance exceeding the greater of 10% of the beginning balances of the projected benefit obligation or the fair value of the plan
assets. The amortization period is based on the average life expectancy of plan participants, which is currently estimated to be
approximately 20 years for our principal retirement plan.

For 2018, the assumption used for the funded status discount rate was 4.30% for our principal retirement plan obligations.

As an indication of the sensitivity of pension liabilities to the discount rate assumption, a 50 basis point reduction in the
discount rate at the end of 2018 would have increased plan obligations by approximately $81.0 million. A 50 basis point change
in the discount rate used to calculate 2018 expense would have changed total pension plan expense for 2018 by approximately
$1.8 million. We assumed a rate of 7.25% for our long-term expected return on pension assets used for our principal retirement
plan. As an indication of the sensitivity of pension expense to the long-term rate of return assumption, a 50 basis point decrease
in the expected rate of return on pension assets would have increased estimated pension plan expense for 2018 by
approximately $8.4 million.

Income taxes: We are subject to income taxes in the U.S. and various foreign jurisdictions in which we operate and record
our tax provision for the anticipated tax consequences in our reported results of operations. Tax laws are complex and subject to
different interpretations by the taxpayer and respective government taxing authorities. Significant judgment is required in
determining our tax expense and in evaluating our tax positions including evaluating uncertainties in the application of tax laws
and regulations.

Our annual tax rate is based on our income, statutory tax regulations and rates, and tax planning opportunities available in

the various jurisdictions in which we operate. Significant management judgment is required in determining our provision for
income taxes, deferred tax assets and liabilities, and the valuation allowance recorded against our net deferred tax assets, if any.
In assessing the likelihood of realization of deferred tax assets, management considers estimates of the amount and character of
future taxable income.

Our actual effective tax rate and income tax expense could vary from estimated amounts due to the future impacts of

various items, including changes in income tax laws, tax planning and our forecasted financial condition, and results of
operations in future periods. Although we believe current estimates are reasonable, actual results could differ from these
estimates.

We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be
sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized
from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized
upon ultimate settlement. Significant management judgment is required to determine whether the recognition threshold has
been met and, if so, the appropriate amount of unrecognized tax benefits to be recorded in the consolidated financial
statements. Management re-evaluates tax positions each period in which new information about recognition or measurement
becomes available. Our policy is to recognize, when applicable, interest and penalties on unrecognized income tax benefits as
part of Provision for income taxes.

The effect of a 1% change in the effective tax rate for 2018 would have resulted in a change of $0.3 million in the

Provision for income taxes and net income.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

We believe that our market risk from financial instruments, such as accounts receivable, and accounts payable, is not

material.

We are exposed to fluctuations in interest rates on borrowings outstanding under our Credit Facility. Based on the variable-

rate debt outstanding as of December 31, 2018, we estimate that a 1% increase or decrease in interest rates would have
increased or decreased interest expense by $1.4 million for the period ended December 31, 2018.

We are exposed to foreign exchange rate risk due to our publishing operations in the U.K., for which the British pound

sterling is the functional currency. We are also exposed to foreign exchange rate risk due our ReachLocal segment which has
operating activities denominated in currencies other than the U.S. dollar, including the Australian dollar, Canadian dollar,
Indian rupee, New Zealand dollar, Singapore dollar, and Brazilian real. We have exited businesses at our ReachLocal segment
in 2018 with currencies in the European euro, Japanese yen, and Mexican peso.

Translation gains or losses affecting the Consolidated statements of income have not been significant in the past.

Our cumulative foreign currency translation adjustments reported as part of our equity totaled $312.5 million at

December 31, 2018, $344.3 million at December 31, 2017, and $300.3 million at December 25, 2016.

Newsquest's assets and liabilities were translated from British pounds sterling to U.S. dollars at the December 31, 2018
exchange rate of 1.27, at the December 31, 2017 exchange rate of 1.35, and at the December 25, 2016 exchange rate of 1.23.
Newsquest's financial results were translated at an average rate of 1.33 for 2018, 1.29 for 2017, and 1.36 for 2016.

If the price of the British pound sterling against the U.S. dollar had been 10% more or less than the actual price, operating
income would have increased or decreased approximately $0.1 million for the period ended December 31, 2018. In addition, a
10% fluctuation in each of ReachLocal's currencies relative to the U.S. dollar would have increased or decreased operating
income by approximately $0.3 million for the period ended December 31, 2018.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Cash Flows

Consolidated Statements of Equity

Notes to Consolidated Financial Statements

Page

Report of Independent Registered Public Accounting Firm

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

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Gannett Co., Inc. (the Company) as of December 31, 2018 and
2017, the related consolidated statements of income, comprehensive income (loss), equity and cash flows for each of the three
fiscal years in the period ended December 31, 2018, and the related notes (collectively referred to as the “consolidated financial
statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
the Company at December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2018, based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework) and our report dated February 27, 2019 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2014.

Tysons, Virginia

February 27, 2019

GANNETT CO., INC.
CONSOLIDATED BALANCE SHEETS

In thousands, except share data

Assets

Current assets

Cash and cash equivalents

Accounts receivable, less allowance for doubtful accounts of $11,088 and $11,588

Other receivables

Inventories

Prepaid income taxes

Prepaid expenses and other current assets

Total current assets

Property, plant and equipment, net

Goodwill

Intangible assets, net

Deferred income taxes

Pension assets

Other assets

Total assets

Liabilities and equity

Current liabilities

December 31,

2018

2017

93,559

343,617

19,230

44,619

18,835

60,701

580,561

796,009

779,597

170,344

51,039

48,077

52,784

120,589

352,546

26,296

30,199

4,286

55,932

589,848

933,334

737,716

139,654

102,492

2,103

64,830

2,478,411

2,569,977

Accounts payable and accrued liabilities

387,003

Deferred revenue

Other current liabilities

Total current liabilities

Income taxes

Postretirement medical and life insurance liabilities

Pension liabilities

Long-term portion of revolving credit facility

Convertible debt

Other noncurrent liabilities

Total noncurrent liabilities

Total liabilities

Commitments and contingent liabilities (see Note 12)

117,083

47,482

551,568

21,679

69,938

319,084

135,000

169,264

176,772

891,737

1,443,305

387,406

122,791

—

510,197

15,181

83,344

421,876

355,000

—

166,984

1,042,385

1,552,582

Equity

Preferred stock of $0.01 par value per share, 5,000,000 shares authorized, none issued
Common stock of $0.01 par value per share, 500,000,000 shares authorized, 118,875,977 and

117,547,116 shares issued

Treasury stock at cost, 5,750,000 shares

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive loss

Total equity

Total liabilities and equity

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

—

1,189

(50,046)

1,175

(50,046)

1,822,094

1,786,941

(121,435)

(616,696)

(64,158)

(656,517)

1,035,106

1,017,395

2,478,411

2,569,977

GANNETT CO., INC.
CONSOLIDATED STATEMENTS OF INCOME

In thousands, except per share data

Fiscal year ended

Operating revenues:

December 31,
2018

December 31,
2017

December 25,
2016

Advertising and marketing services

1,661,075

1,826,233

1,712,989

Circulation

Other

Total operating revenues

Operating expenses:

Cost of sales

Selling, general and administrative expenses

Depreciation and amortization

Restructuring costs

Asset impairment charges

Total operating expenses

Operating income

Non-operating income (expense):

Interest expense

Other non-operating items, net

Non-operating income (expense)

Income before income taxes

Provision for income taxes

Net income

Earnings per share - basic

Earnings per share - diluted

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

1,063,022

192,741

2,916,838

1,120,739

199,508

3,146,480

1,133,676

200,809

3,047,474

1,803,496

1,959,638

1,927,895

808,468

157,714

67,926

50,472

2,888,076

28,762

836,306

191,885

44,284

46,796

3,078,909

67,571

(24,669)

26,066

1,397

30,159

15,119

15,040

0.13

(17,142)

(9,688)

(26,830)

40,741

33,854

6,887

0.06

795,548

132,964

45,757

55,940

2,958,104

89,370

(12,791)

(10,151)

(22,942)

66,428

13,718

52,710

0.45

0.44

GANNETT CO., INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

In thousands

Fiscal year ended

Net income

Other comprehensive income (loss), before tax:

Foreign currency translation adjustments

Pension and other postretirement benefit items:

Actuarial income (loss):

Actuarial income (loss) arising during the period

Amortization of actuarial loss

Prior service credit (cost):

Change in prior service cost

Amortization of prior service cost

Settlement charge

Other

Pension and other postretirement benefit items

Other comprehensive income (loss) before tax

Income tax effect related to components of other comprehensive income (loss)

Other comprehensive income (loss), net of tax

Comprehensive income (loss)

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

December 31,
2018

December 31,
2017

December 25,
2016

15,040

6,887

52,710

(31,800)

43,990

(84,526)

(61,836)

63,441

92,052

(3,409)

1,609

(5,843)

86,014

54,214

(14,393)

39,821

223,087

72,759

—

3,023

—

(36,477)

262,392

306,382

(79,987)

226,395

54,861

233,282

(334,653)

62,155

(1,002)

1,883

(49)

67,959

(203,707)

(288,233)

78,745

(209,488)

(156,778)

GANNETT CO., INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

In thousands

Fiscal year ended

Operating activities

Net income

Adjustments to reconcile net income to operating cash flows:

Depreciation and amortization

Facility consolidation costs

Asset impairment charges

Stock-based compensation - equity awards

Provision for deferred income taxes

Pension and other postretirement expense, net of contributions

Decrease in accounts receivable

Decrease (increase) in other receivables

Decrease (increase) in inventories

Decrease in accounts payable

Increase (decrease) in interest and taxes payable

Decrease in accrued expenses

Increase (decrease) in deferred revenue

Other, net

Net cash provided by operating activities

Investing activities

Purchase of property, plant and equipment

Payments for acquisitions, net of cash acquired

Payments for investments

Proceeds from sale of certain assets

Changes in other investing activities

Net cash used for investing activities

Financing activities

Repayments of borrowings under revolving credit facilities

Proceeds from borrowings under revolving credit facilities

Proceeds from convertible debt

Dividends paid

Proceeds from sale and leaseback transactions

Payments for employee taxes withheld from stock awards

Proceeds from issuance of common stock upon settlement of stock awards

Changes in other financing activities

Cost of common shares repurchased

Net cash (used for) provided by financing activities

Effect of currency exchange rate change

Increase (decrease) in cash, cash equivalents, and restricted cash

Balance of cash, cash equivalents, and restricted cash at beginning of year

December 31,
2018

December 31,
2017

December 25,
2016

15,040

6,887

52,710

157,714

191,885

132,964

16,832

50,472

19,151

25,605

(88,681)

16,084

7,541

(14,423)

(13,908)

(8,062)

(1,360)

(5,738)

(18,750)

157,517

(63,143)

(131,150)

(3,963)

69,730

—

(128,526)

(425,000)

205,000

195,321

(72,317)

45,915

(6,708)

309

(389)

—

(57,869)

1,707

(27,171)

144,032

7,271

46,796

20,341

31,511

(39,363)

13,175

(6,487)

10,602

(22,211)

14,469

(38,386)

(12,507)

12,040

236,023

(72,325)

(44,343)

(3,827)

28,438

4,488

(87,569)

(80,000)

35,000

—

(72,314)

—

(7,318)

730

(505)

(17,379)

(141,786)

(848)

5,820

138,212

2,231

55,940

20,576

15,734

(84,600)

28,132

6,597

(7,504)

(22,485)

3,246

(25,517)

2,700

(12,801)

167,923

(60,048)

(464,065)

(12,419)

17,405

(519,073)

(80,000)

480,000

—

(92,495)

—

(3,667)

562

(315)

(32,667)

271,418

(272)

(80,004)

218,216

138,212

Balance of cash, cash equivalents, and restricted cash at end of year

116,861

144,032

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

GANNETT CO., INC.
CONSOLIDATED STATEMENTS OF EQUITY

In thousands, except per share data

Balance at December 27, 2015

1,156

— $ 1,708,291

22,553

(673,424) $ 1,058,576

Common
Stock
$0.01 Par
Value

Treasury
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Total

Net income, 2016

Other comprehensive loss, net of tax

Total comprehensive loss

Dividends declared, 2016: $0.64 per share

Purchase of treasury stock

Stock options exercised

Restricted stock awards settled

Performance share units settled

Stock-based compensation

Other activity

—

(32,667)

—

561

(5,822)

(3,002)

20,576

49,301

52,710

—

(73,994)

—

52,710

(209,488)

(156,778)

(73,994)

(32,667)

562

(5,817)

(2,998)

20,576

49,301

—

Balance at December 25, 2016

1,166

(32,667) $ 1,769,905

1,269

(882,912) $

856,761

Net income, 2017

Other comprehensive income, net of tax

Total comprehensive income

Dividends declared, 2017: $0.64 per share

Purchase of treasury stock

Stock options exercised

Restricted stock awards settled

Performance share units settled

Stock-based compensation

Other activity

—

(17,379)

—

729

(3,368)

(1,195)

20,341

529

6,887

—

(72,314)

—

226,395

—

6,887

226,395

233,282

(72,314)

(17,379)

730

(3,362)

(1,193)

20,341

529

Balance at December 31, 2017

1,175

(50,046) $ 1,786,941

(64,158) $

(656,517) $ 1,017,395

Net income, 2018

Other comprehensive income, net of tax

Total comprehensive income

Dividends declared, 2018: $0.64 per share

Stock options exercised

Restricted stock awards settled

Performance share units settled

Stock-based compensation

Convertible debt conversion feature

Other activity

—

308

(3,840)

(2,437)

19,151

21,777

194

15,040

—

(72,317)

—

39,821

—

15,040

39,821

54,861

(72,317)

309

(3,830)

(2,434)

19,151

21,777

194

Balance at December 31, 2018

1,189

(50,046) $ 1,822,094

(121,435) $

(616,696) $ 1,035,106

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — Basis of presentation

Description of business: Gannett Co., Inc. is an innovative, digitally focused media and marketing solutions company

committed to fostering the communities in our network and helping them build relationships with their local businesses.
Gannett owns ReachLocal, Inc., a digital marketing solutions company, the USA TODAY NETWORK (made up of USA
TODAY and 109 local media organizations in 34 states in the U.S. and Guam, including digital sites and affiliates), and
Newsquest (a wholly owned subsidiary operating in the United Kingdom with more than 150 local media brands). Through the
USA TODAY NETWORK and Newsquest, Gannett delivers high-quality, trusted content where and when consumers want to
engage with it on virtually any device or platform.

NOTE 2 — Summary of significant accounting policies

Basis of presentation and consolidation: The consolidated financial statements include our accounts and those which we

control after elimination of all intercompany balances, transactions, and profits.

Beginning in 2018, we have realigned the presentation of web presence and software-as-a-service revenues from other
revenues to advertising and marketing services revenue on the Consolidated statements of income. As a result of this updated
presentation, advertising and marketing services revenues increased and other revenues decreased $46.2 million, $34.6 million,
and $9.2 million for 2018, 2017, and 2016, respectively. Operating revenues, net income, and retained earnings, and earnings
per share remained unchanged.

Use of estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles

(U.S. GAAP) requires us to make estimates, judgments, and assumptions that affect the amounts reported in the consolidated
financial statements and footnotes thereto. Actual results could differ from those estimates. Significant estimates include
amounts for income taxes, pension and other post-employment benefits, and valuation of long-lived and intangible assets.

Segment presentation: We classify our operations into two reportable segments: publishing and ReachLocal. In addition to

these reportable segments, we have a corporate and other category that includes activities not directly attributable or allocable
to a specific segment. The publishing reporting segment is an aggregation of two operating segments: Domestic Publishing and
the U.K. Group.

Business combinations: We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities

assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase
consideration over the values of these identifiable assets and liabilities is recorded as goodwill. Goodwill is assigned to the
reporting unit that benefits from the synergies arising from the business combination. When determining the fair value of assets
acquired and liabilities assumed, we make significant estimates and assumptions, especially with respect to intangible assets.

Critical estimates in valuing certain identifiable assets include, but are not limited to, expected long-term revenues, future

expected operating expenses, cost of capital, and appropriate discount rates. Our estimates of fair value are based upon
assumptions believed to be reasonable but which are inherently uncertain and unpredictable and, as a result, actual results may
differ from estimates.

Revenue recognition: Our revenues are recognized when control of the promised goods or services is transferred to our
customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. For
further details surrounding our major revenue streams and specific recognition principles, refer to Note 3 — Revenues.

Cash and cash equivalents: Cash equivalents consist of investments with original maturities of three months or less.

Accounts receivable and allowance for doubtful accounts: Accounts receivable are recorded at invoiced amounts and

generally do not bear interest. The allowance for doubtful accounts reflects our estimate of credit exposure and is determined
principally on the basis of our collection experience, aging of our receivables, and significant individual account credit risk.
Credit is extended based upon an evaluation of the customer's financial position, and generally collateral is not required.

Inventories: Inventories, consisting principally of newsprint, printing ink, and plate material for our publishing operations,

are valued at the lower of cost (first-in, first-out) or net realizable value.

Assets held for sale: We classify assets to be sold as held for sale in the period in which all of the following criteria are
met: (1) we commit to a plan to sell the disposal group, (2) the disposal group is available for immediate sale in its present
condition, (3) an active program to locate a buyer has been initiated, and (4) the sale is expected to qualify for recognition as a
completed sale within one year, except if events or circumstances beyond our control extend the period of time required to sell.
Assets held for sale are measured at the lower of carrying value or fair value less any costs to sell.

Property, software development costs, 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 estimated useful
lives are 10 to 40 years for buildings and improvements and 3 to 30 years for machinery, equipment, and fixtures. Changes in
the estimated useful life of an asset, which could happen as a result of facility consolidations, can affect depreciation expense
and net income. 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.

We capitalize costs to develop software for internal use when it is determined the development efforts will result in new or

additional functionality or new products. Costs incurred prior to meeting these criteria and costs associated with ongoing
maintenance are expensed as incurred and included in Cost of sales, in addition to amortization of capitalized software
development costs, in the accompanying Consolidated statements of income. We monitor our existing capitalized software
costs and reduce their carrying value as a result of releases rendering previous features or functions obsolete. Software
development costs are evaluated for impairment in accordance with our policy for finite-lived intangible assets and other long-
lived assets. Costs capitalized as internal use software are amortized on a straight-line basis over an estimated useful life of 3 to
5 years.

A breakout of property, plant and equipment and software is presented below:

In thousands
Land

Buildings and improvements

Machinery, equipment, and fixtures

Software

Construction in progress

Total
Accumulated depreciation

Net property, plant and equipment

December 31,
2018

December 31,
2017

102,789

663,705

1,276,898

152,091

13,057

114,354

800,777

1,310,138

122,743

14,837

2,208,540

2,362,849

(1,412,531)

(1,429,515)

796,009

933,334

Leases: Operating lease rentals are expensed on a straight-line basis over the life of the lease. At lease inception, we
determine the lease term by excluding renewal options that are not reasonably assured. Additionally, the depreciable life of
leased assets and leasehold improvements is limited by the expected lease term.

Valuation of long-lived assets: We evaluate the carrying value of long-lived assets (mostly property, plant, and equipment,
intangible assets and software) to be held and used whenever events or changes in circumstances indicate the carrying amount
may not be recoverable. The carrying value of a long-lived asset group is considered impaired when the projected undiscounted
future cash flows are less than their carrying value. We measure impairment based on the amount by which the carrying value
exceeds the fair value. Fair 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 values are reduced for the cost to dispose.

Goodwill and other intangible assets: Goodwill represents the excess of acquisition cost over the fair value of assets
acquired, including identifiable intangible assets, net of liabilities assumed. Goodwill is tested for impairment annually on the
first day of the fourth quarter or between annual tests if events occur or circumstances change that would more likely than not
reduce the fair value of a reporting unit below its carrying amount.

first permitted to perform a qualitative assessment to determine if the quantitative test must be completed. The qualitative
assessment considers events and circumstances such as macroeconomic conditions, industry and market conditions, cost factors
and overall financial performance, as well as company and specific reporting unit specifications. If, after performing this
assessment, we conclude it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we
are required to perform a quantitative test. Otherwise, the test is not required. For 2018, a qualitative assessment was not used.

In the quantitative test, we are required to determine the fair value of each reporting unit and compare it to the carrying

amount of the reporting unit. Fair value of the reporting unit is defined as the price that would be received to sell the unit as a
whole in an orderly transaction between market participants at the measurement date. The company generally determines the
fair value of a reporting unit using a combination of a discounted cash flow analysis and a market-based approach. Determining
the fair value of the reporting units is judgmental in nature and involves the use of significant estimates and assumptions. These
estimates and assumptions include changes in revenue and operating margins used to project future cash flows, discount rates,
valuation multiples of entities engaged in the same or similar lines of business, and future economic and market conditions.

After considering the above factors, if the carrying amount of the reporting unit exceeds its fair value, a goodwill

For indefinite-lived intangible assets, we perform an impairment test annually or more often if circumstances dictate.
Intangible assets that have definite useful lives are amortized over those useful lives and are evaluated for impairment as
described above.

Customer relationships, which include subscriber lists and advertiser relationships, are amortized on a straight-line basis
over their useful lives. Developed technology consists of digital marketing solutions and other technology acquired as part of
the ReachLocal, SweetIQ, and WordStream transactions and is amortized on a straight-line basis over their useful lives. Other
intangibles are primarily definite lived trade names and are amortized on a straight-line basis over their useful lives. The useful
lives of our definite-lived intangible assets range from 3 to 11 years.

Investments: Investments in entities for which we do not have control but have the ability to exercise significant influence

over operating and financial policies are accounted for under the equity method. Our share of net earnings and losses from
these ventures is included in Other non-operating items, net in the Consolidated statements of income. The net carrying value
of investments recorded under the equity method was $1.1 million at December 31, 2018 and $3.1 million at December 31,
2017.

We account for non-marketable investments under the cost method. The aggregate carrying value of these investments, net

of impairment, was $5.0 million at December 31, 2018 and $7.9 million at December 31, 2017.

We regularly review our investments for impairment, including when the carrying value of an investment exceeds its
related market value. If it has been determined that an investment has sustained an other-than-temporary decline in its value,
the investment is written-down to its fair value. The factors we consider in determining an other-than-temporary decline in
value has occurred include (i) the market value of the security in relation to its cost basis, (ii) the financial condition of the
investee, and (iii) our intent and ability to retain the investment for a sufficient period of time to allow for recovery in the
market value of the investment. The carrying values of certain investments in which we own a non-controlling interest were
written down to fair value because the business underlying the investments experienced sustained operating losses, leading us
to conclude the investments were impaired. These impairments, which were recorded in the Other non-operating items, net line
item of the Consolidated statements of income, totaled $2.7 million, $0.4 million, and $3.0 million in 2018, 2017, and 2016,
respectively.

Accounts payable and accrued expenses: A breakout of accounts payable and accrued expenses is presented below:

In thousands
Compensation

Taxes (primarily property and sales taxes)

Benefits

Other

Total accrued liabilities

Accounts payable

December 31,
2018

December 31,
2017

102,872

16,804

43,824

71,483

234,983

152,020

85,530

20,175

42,995

73,370

222,070

165,336

387,406

Total accrued liabilities and accounts payable

387,003

Retirement plans: Pension and other postretirement benefit costs under our defined benefit retirement plans are actuarially

determined. For plans with frozen benefits, we recognize the cost of postretirement benefits such as pension, medical, and life
insurance benefits on an accrual basis over the average life expectancy of employees expected to receive such benefits. For
active plans, costs are recognized over the estimated average future service period.

Equity-based employee compensation: We grant restricted stock units as well as performance shares to our employees as a

form of compensation. The expense for such awards is based on the grant date fair value of the award and is recognized on a
straight-line basis over the requisite service period, which is generally three or four-year incentive periods for restricted stock
units and the three-year incentive period for performance shares. Expense for performance share awards granted to participants
meeting certain retirement eligibility criteria as defined in the equity compensation plan is recognized using the accelerated
attribution method.

Income taxes: Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are

recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.

We also evaluate any uncertain tax positions and recognize a liability for the tax benefit associated with an uncertain tax
position if it is more likely than not that the tax position will not be sustained on examination by the taxing authorities upon
consideration of the technical merits of the position. The tax benefits recognized in the financial statements from such positions
are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. We
record a liability for uncertain tax positions taken or expected to be taken in a tax return. Any change in judgment related to the
expected ultimate resolution of uncertain tax positions is recognized in earnings in the period in which such change occurs.

Loss contingencies: We are subject to various legal proceedings, claims, and regulatory matters, the outcomes of which are

subject to significant uncertainty. We determine whether to disclose or accrue for loss contingencies based on an assessment of
whether the risk of loss is remote, reasonably possible, or probable and whether it can be reasonably estimated. We accrue for
loss contingencies when such amounts are probable and reasonably estimable. If a contingent liability is only reasonably
possible, we will disclose the potential range of the loss if material and estimable.

Foreign currency translation: The statements of income of foreign operations have been translated to U.S. dollars using

the average currency exchange rates in effect during the relevant period. The balance sheets have been translated using the
currency exchange rates as of the end of the accounting period. The impact of currency exchange rate changes on the
translation of the balance sheets are included in Comprehensive income (loss) in the Consolidated statements of comprehensive
income (loss) and are classified as Accumulated other comprehensive loss in the Consolidated balance sheets and Consolidated
statements of equity.

Concentration of risk: Due to the distributed nature of our operations, we are not subject to significant concentrations of

risk relating to customers, products, or geographic locations. Our foreign revenues, principally from businesses in the U.K. and
ReachLocal international operations, totaled approximately $391.3 million in 2018, $390.7 million in 2017, and $371.7 million
in 2016. Our long-lived assets in foreign countries, principally in the U.K. and ReachLocal international operations, totaled
approximately $333.2 million at December 31, 2018, $338.0 million at December 31, 2017, and $354.4 million at
December 25, 2016.

Supplementary cash flow information: Supplementary cash flow information, including non-cash investing and financing

activities, are as follows:

In thousands
Cash paid for taxes, net of refunds

Cash paid for interest

Accrued capital expenditures

December 31,
2018

December 31,
2017

December 25,
2016

6,036

12,355

4,335

(18,887) $

16,912

5,886

25,719

10,081

5,639

New accounting pronouncements adopted: The following are new accounting pronouncements which we have adopted in

fiscal year 2018:

Revenue from Contracts with Customers: We adopted Financial Accounting Standards Board (FASB) guidance which
prescribes a single comprehensive model for entities to use in the accounting of revenue arising from contracts with customers.
The new guidance is centered around the core principle that an entity should recognize revenue to depict the transfer of
promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in
exchange for those goods or services. We adopted the new revenue recognition standard using the modified retrospective
approach; however, we did not record any one-time adjustments to beginning retained earnings as a result of adopting the new
guidance. Refer to Note 3 — Revenues for further details regarding the nature, amount, timing, and uncertainty of revenue and
cash flows arising from contracts with our customers.

Cash and Cash Equivalents, including Statement of Cash Flows and Restricted Cash: We adopted FASB guidance

requiring entities to disclose, in their statements of cash flows, the change during the period in the total of cash, cash
equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, restricted cash and
restricted cash equivalents must now be included within the total of cash and cash equivalents when reconciling the beginning
and end of period totals shown on the statement of cash flows. The guidance was adopted retrospectively, and the impact was
not material to our consolidated financial results.

Restricted cash primarily consists of cash held in an irrevocable grantor trust for our deferred compensation plans and cash

held with banking institutions for insurance plans. The restrictions will lapse when benefits are paid to plan participants and
their beneficiaries as specified in the plans. The following table presents a reconciliation of cash, cash equivalents, and
restricted cash:

In thousands
Cash and cash equivalents

Restricted cash included in other current assets

Restricted cash included in investments and other assets

Total cash, cash equivalents and restricted cash

December 31,
2018

December 31,
2017

December 25,
2016

93,559

120,589

114,324

2,963

20,339

2,942

20,501

3,200

20,688

116,861

144,032

138,212

Financial Assets and Financial Liabilities: We adopted FASB guidance revising the classification and measurement of
investments in equity securities and the presentation of certain fair value changes in financial liabilities measured at fair value.
The impact of adopting this guidance was not material to our consolidated financial results.

Business Combinations—Definition of a Business: We adopted FASB guidance which amends the definition of a business.

This new guidance now requires an entity to evaluate if substantially all of the fair value of gross assets acquired is
concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and
activities is not a business. The impact of adopting this guidance was not material to our consolidated financial results.

Intangibles—Goodwill and Other: We adopted FASB guidance which simplifies the subsequent measurement of goodwill.
The guidance permits an entity to perform its goodwill impairment test by comparing the fair value of a reporting unit with its
carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting
unit’s fair value, with such losses not exceeding the total amount of goodwill allocated to that reporting unit. This guidance was
applied for the calculation of goodwill impairment recognized during the year ended December 31, 2018. See Note 6 —
Goodwill and other intangible assets for further details.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income: We adopted FASB guidance
surrounding the reclassification of stranded tax effects resulting from the Tax Cuts and Jobs Act. Accordingly, we elected not to
reclassify stranded tax effects from accumulated other comprehensive income to retained earnings, and the resulting impact of
adopting this guidance was not material to our consolidated financial results.

New accounting pronouncements not yet adopted: The following are new accounting pronouncements that we are

evaluating for future impacts on our financial position:

Leases: In February 2016, the FASB issued updated guidance modifying lease accounting for both lessees and lessors to
increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as
operating leases under previous accounting standards and disclosing key information about leasing arrangements. This
guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted.

We will adopt the new standard effective January 1, 2019 on a modified retrospective basis and will not restate

comparative periods. We will elect the package of practical expedients permitted under the transition guidance, which allows us
to carryforward 1) our historical lease classification, 2) our assessment on whether a contract is or contains a lease, and 3) our
treatment of initial direct costs for any leases that exist prior to adoption of the new standard. We will also elect to combine
lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize
the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term.

Adoption of the standard will have a material impact on our consolidated balance sheets in the form of the recognition of

additional right of use assets and lease liabilities for existing operating leases with a lease term greater than twelve months. We
also expect a transition adjustment related to gains on sale-leaseback transactions which were previously deferred. Other than
disclosed, we do not expect the new standard to have a material impact on our remaining consolidated financial statements. The
adoption of the new standard will result in additional disclosures around the amount, timing and uncertainty of cash flows
arising from leases including quantitative and qualitative information including significant judgments in applying the new
standard.

Compensation—Stock Compensation: In June 2018, the FASB issued new guidance which expands the scope of share-

based compensation accounting by applying, with limited exceptions, the specific requirements of employee stock
compensation to the accounting for non-employee awards granted in exchange for goods and services. This guidance is
effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are evaluating the provisions of
the updated guidance and assessing the impact on our consolidated financial statements.

Intangibles—Internal-Use Software: In August 2018, the FASB issued new guidance which aligns the requirements for

capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for
capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an
internal-use software license. This guidance is effective for fiscal years beginning after December 15, 2019. Early adoption of
the amendments is permitted, including adoption in any interim period. We are evaluating the provisions of the updated
guidance and assessing the impact on our consolidated financial statements.

Fair Value Measurement—Disclosure Framework: In August 2018, the FASB issued new guidance that changes disclosure
requirements related to fair value measurements as part of the disclosure framework project. The disclosure framework project
aims to improve the effectiveness of disclosures in the notes to the financial statements by focusing on requirements that clearly
communicate the most important information to users of the financial statements. This guidance is effective for fiscal years
beginning after December 15, 2019, with early adoption permitted. We are evaluating the provisions of the updated guidance
and assessing the impact on our consolidated financial statements.

Compensation—Retirement Plans: In August 2018, the FASB issued new guidance that changes disclosures related to
defined benefit pension and other postretirement benefit plans as part of the disclosure framework project. This guidance is
effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We are evaluating the provisions of
the updated guidance and assessing the impact on our consolidated financial statements.

NOTE 3 — Revenues

In January 2018, we adopted the new revenue recognition accounting pronouncement, Accounting Standards Codification

(ASC) 606 – Revenue from Contracts with Customers, using the modified retrospective method applied to those contracts
which were not completed as of the adoption date. Results for reporting periods beginning after January 1, 2018 are presented
under ASC 606 while prior period amounts are not adjusted and continue to be reported in accordance with legacy accounting
under ASC 605 – Revenue recognition. We did not record any one-time adjustments to beginning retained earnings as a result
of adopting the new guidance.

The following table presents our revenues disaggregated by source:

In thousands

Print advertising

Digital advertising and marketing services

Total advertising and marketing services

Circulation
Other

Total revenues

Fiscal year ended

December 31,
2018

December 31,
2017(1)

December 31,
2016(1)

880,448

1,082,351

1,208,361

780,627

1,661,075

1,063,022

192,741

743,882

1,826,233

1,120,739

199,508

504,628

1,712,989

1,133,676

200,809

2,916,838

3,146,480

3,047,474

(1) Prior period amounts have not been adjusted under the modified retrospective method.

Revenues generated from international locations comprised 13% of our 2018 revenues, 12% of our 2017 revenues, and

12% of our 2016 revenues.

Recognition principles: Our revenues are recognized when control of the promised goods or services is transferred to our

customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
Additionally, sales and usage-based taxes are excluded from revenues.

Advertising and marketing services revenues: Our advertising and marketing services revenues include amounts charged

to advertisers for space purchased in our newspapers, ads placed on our digital platforms, other advertising products and
services such as preprints and direct mail, the provision and sale of online marketing, web presence, and software-as-a-service
products through our ReachLocal segment, and revenues from other miscellaneous products and services. Print advertising is
recognized in the period when advertising is printed. Digital advertising is recognized when placed on digital platforms either
by cost per impression or cost per day. Web presence and software-as-a-service solutions are recognized when the products or
services are delivered to the customer. Other advertising product and service revenues are recognized when advertisements or
services are delivered.

For online marketing products provided by our ReachLocal segment, we enter into agreements for products in which our
clients typically pay in advance and on a monthly basis. These prepayments include all charges for the included technology and
any media services, management, third-party content, and other costs and fees, all of which are accounted for as a single
performance obligation. Revenue is then recognized as we purchase and deliver media on behalf of the customer and perform
other marketing-related services.

For our advertising and marketing services revenues, we evaluate whether we are the principal (i.e., report revenues on a
gross basis) or agent (i.e., report revenues on a net basis) by performing analyses regarding whether we control the provision of
specified goods or services before they are transferred to our customers. We report advertising and marketing services revenues
gross when we control advertising inventory before it is transferred to the customer. Our control is evidenced by us being
primarily responsible or sharing responsibility for the fulfillment of services and maintaining control over transaction pricing.

Certain customers may receive credits, which are accounted for as a separate performance obligation. We estimate these
amounts based on the expected amount to be provided to customers and reduce revenues recognized. We recognize revenue
when the performance obligation is satisfied.

Circulation revenues: Our circulation revenues include revenues for content delivered to consumers via print and digital

products purchased by readers or distributors. Single copy circulation revenues are recognized on a daily basis as purchased

newspapers are distributed, net of provisions for related returns. Circulation revenues from digital and home delivery
subscriptions are recognized over the subscription period as the performance obligations are delivered.

Other revenues: Our other revenues consist primarily of amounts received from commercial printing and distribution

arrangements. Commercial printing and distribution revenues are recognized when the product is delivered to the customer.

Arrangements with multiple performance obligations: We have various advertising and circulation agreements which

have both print and digital performance obligations. Revenues from sales agreements that contain multiple performance
obligations are allocated to each obligation based on the relative standalone selling price. We generally determine standalone
selling prices based on the prices charged to customers or using expected cost plus a margin that is appropriate for that good or
service.

Deferred revenue: Amounts received from customers in advance of revenue recognition are deferred as liabilities. The

following table presents changes in the deferred revenue balance for the twelve months ended December 31, 2018 by type of
revenue:

in thousands

Year ended December 31, 2018

Beginning balance

Acquired deferred revenue
Cash receipts

Revenue recognized

Ending balance

Advertising,
Marketing
Services,
and Other

Circulation

Total

33,986

88,805

122,791

2,676

280,228

—

2,676

831,954

1,112,182

(281,148)

(839,418)

(1,120,566)

35,742

81,341

117,083

The company’s primary source of deferred revenue is from circulation subscriptions paid in advance of the service
provided. The majority of our subscription customers are billed and pay on monthly terms, but subscription periods range
between one and twelve months. The remaining deferred revenue balance relates to advertising and other revenue. The $5.7
million decrease in deferred revenue as compared to the year ended December 31, 2017 is primarily the result of reductions in
the number of prepaid subscribers year over year.

Practical expedients and exemptions: We generally expense sales commissions when incurred because the amortization

period would have been one year or less. These costs are recorded within Cost of sales. Additionally, we do not disclose the
value of unsatisfied performance obligations because the vast majority of our contracts have original expected lengths of one
year or less and our payment terms are generally short-term in nature unless a customer is in bankruptcy.

NOTE 4 — Acquisitions

2018 Acquisitions

WordStream: In July 2018, our ReachLocal segment completed the acquisition of WordStream, a provider of cloud-based

software-as-a-service solutions for local and regional businesses and agencies, for approximately $132.5 million, net of cash
acquired. In addition, up to $20.0 million of additional consideration is earned quarterly beginning in the third quarter of 2018
through the fourth quarter of 2019 based upon the achievement of certain revenue targets. The fair value of the contingent
consideration at the acquisition date was $9.5 million. As of December 31, 2018, $4.8 million of the consideration is payable to
the former shareholders and is included in Other current liabilities on the Consolidated balance sheets. Based on WordStream's
revenue results, the fair value of the remaining contingent obligation as of December 31, 2018 was estimated at $4.5 million
and is included within Other noncurrent liabilities on the Consolidated balance sheets. We financed the transaction through
borrowings under our Credit Facility and cash on hand.

The allocation of the purchase price is preliminary pending the finalization of the fair value of the acquired net assets and
liabilities assumed, deferred income taxes, and assumed income and non-income based tax liabilities. As of the acquisition date,
the purchase price was assigned to the acquired assets and assumed liabilities as follows:

In thousands

Cash and restricted cash acquired

Other current assets

Property, plant and equipment

Developed technology

Customer relationships

Trade names

Goodwill

Total assets acquired

Current liabilities

Noncurrent liabilities

Total liabilities assumed

Net assets acquired

20,954

9,159

1,072

63,030

21,420

1,105

67,483

184,223

3,987

17,303

21,290

162,933

Acquired property, plant, and equipment is depreciated on a straight-line basis over the assets' respective estimated

remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the
identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets
acquired that do not qualify for separate recognition, including assembled workforce and non-contractual relationships as well
as expected future synergies. Goodwill associated with the acquisition of WordStream is allocated to the ReachLocal segment.
We do not expect the purchase price allocated to goodwill and intangibles to be deductible for tax purposes.

Other: During 2018, we completed other immaterial acquisitions.

2017 Acquisitions

SweetIQ: In April 2017, our ReachLocal subsidiary completed the acquisition of SweetIQ, a location and customer
engagement software provider, for approximately $31.8 million, net of cash acquired. SweetIQ's customers include businesses
with multi-location brands and agencies that target local marketing.

The allocation of the purchase price was based upon estimated fair values. The determination of the fair value of assets
acquired and liabilities assumed has been completed and the final allocation is as follows: goodwill of $18.8 million, intangible
assets of $15.2 million (comprised of trade names, customer relationships, and developed technology), noncurrent assets of
$0.6 million, noncurrent liabilities of $1.8 million, and positive net working capital of $0.3 million. Goodwill is calculated as
the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future
economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including
assembled workforce and non-contractual relationships as well as expected future synergies. Goodwill associated with the
acquisition of SweetIQ is allocated to the ReachLocal segment. We do not expect the purchase price allocated to goodwill and
intangibles to be deductible for tax purposes.

Other: During 2017, we completed other immaterial acquisitions.

2016 Acquisitions

ReachLocal: In August 2016, we completed the acquisition of 100% of the outstanding common stock of ReachLocal for

approximately $162.5 million, net of cash acquired. ReachLocal offers online marketing, digital advertising, software-as-a-
service, and web presence products and solutions to small and medium sized businesses. It delivers its suite of products and
solutions to local businesses through a combination of its proprietary technology platform, its sales force, and select third-party
agencies and resellers.

The allocation of the purchase price was based upon estimated fair values. The determination of the fair value of the assets

acquired and liabilities assumed has been completed and the final allocation of the purchase price is as follows:

In thousands

Cash acquired

Other current assets

Property, plant and equipment

Developed technology

Customer relationships

Other intangible assets

Goodwill

Other noncurrent assets

Total assets acquired

Current liabilities

Noncurrent liabilities

Total liabilities assumed

Net assets acquired

13,195

14,612

13,486

54,000

22,500

12,000

120,165

9,852

259,810

63,005

21,062

84,067

175,743

Acquired property, plant, and equipment is depreciated on a straight-line basis over the assets' respective estimated

remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the
identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets
acquired that do not qualify for separate recognition, including assembled workforce and non-contractual relationships as well
as expected future synergies. Goodwill associated with the acquisition of ReachLocal is allocated entirely to the ReachLocal
segment. We do not expect the purchase price allocated to goodwill and trade names to be deductible for tax purposes.

ReachLocal, including WordStream and SweetIQ, is a separate segment, and its results of operations are provided in Note

14 — Segment reporting.

Assets of North Jersey Media Group: In July 2016, we completed the acquisition of certain assets of NJMG for
approximately $38.6 million. NJMG is a media company with print and digital publishing operations serving primarily the
northern New Jersey market. Its brands include such established names as The Record (Bergen County) and The Herald.

The allocation of the purchase price was based upon estimated fair values. The determination of the fair value of the assets
acquired and liabilities assumed has been completed, and the final allocation of the purchase price is as follows: property, plant,
and equipment of $26.0 million, goodwill of $7.4 million, intangible assets of $7.2 million (comprised largely of mastheads,
customer relationships, and non-compete agreements), noncurrent assets of $1.0 million, noncurrent liabilities of $0.3 million,
and net negative working capital of $1.7 million. Goodwill is calculated as the excess of the consideration transferred over the
fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other
intangible assets acquired that do not qualify for separate recognition, including assembled workforce and non-contractual
relationships as well as expected future synergies. Goodwill related to the acquisition of NJMG is allocated to the publishing
segment. We expect the purchase price allocated to goodwill and mastheads will be deductible for tax purposes.

Journal Media Group: In April 2016, we completed the acquisition of 100% of the outstanding common stock of JMG for
approximately $260.6 million, net of cash acquired. Further, approximately $2.3 million of the purchase price paid was treated
as post-acquisition expense for accounting purposes. JMG is a media company with print and digital publishing operations
serving 15 U.S. markets in nine states, including the Milwaukee Journal Sentinel, the Knoxville News Sentinel, and The
Commercial Appeal in Memphis. The acquisition expanded our print and digital publishing operations domestically.

The allocation of the purchase price was based upon estimated fair values. The determination of the fair value of the assets

acquired and liabilities assumed has been completed and the final allocation of the purchase price is as follows:

In thousands

Cash acquired

Other current assets

Property, plant and equipment

Mastheads

Customer relationships

Goodwill

Other noncurrent assets

Total assets acquired

Current liabilities

Noncurrent liabilities

Total liabilities assumed

Net assets acquired

36,825

54,571

264,357

30,440

12,440

25,258

3,825

427,716

71,519

61,151

132,670

295,046

Acquired property, plant, and equipment is depreciated on a straight-line basis over the assets' respective estimated

remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the
identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets
acquired that do not qualify for separate recognition, including assembled workforce and non-contractual relationships as well
as expected future synergies. Any goodwill recognized related to the acquisition of JMG was allocated to the publishing
segment. We expect the purchase price allocated to goodwill and mastheads will not be deductible for tax purposes.

Other: During 2016, we completed other immaterial acquisitions.

NOTE 5 — Restructuring activities and asset impairment charges

Over the past several years, we have engaged in a series of individual restructuring programs designed to right size our

employee base, consolidate facilities, and improve operations, including those of recently acquired entities. Facility
consolidation and other cost savings plans led us to recognize restructuring costs, which consist of severance-related expenses,
facility consolidation charges, accelerated depreciation, which is included as part of depreciation and amortization, and asset
impairment charges which are reported in the Consolidated statements of income. As part of our plans, we are selling certain
assets which we have classified as held-for-sale and for which we have reduced the carrying values to equal the fair values less
costs to dispose.

Severance-related expenses: We recorded severance-related expenses by segment as follows:

In thousands

Publishing

ReachLocal

Corporate and Other

Total

2018

2017

2016

40,284

30,105

42,800

2,050

8,760

980

5,928

640

51,094

37,013

43,526

Included in the above totals for 2018 are charges of $27.8 million related to an early retirement opportunity program

(EROP) extended to certain employees in our Domestic Publishing and Corporate units.

The activity and balance of severance-related liabilities, which are recorded within Accounts payable and accrued

liabilities in the Consolidated balance sheets, are as follows:

In thousands

Balance at December 25, 2016

Payments

Expense

Balance at December 31, 2017

Payments

Expense

Balance at December 31, 2018

Severance
Activities

18,651

(45,102)

37,013

10,562

(28,682)

51,094

32,974

Facility consolidation charges and accelerated depreciation: We recorded facility consolidation charges by segment as

follows:

In thousands

Publishing

ReachLocal

Corporate and Other

Total

2018

2017

2016

8,620

7,271

2,231

2,863

5,349

—

16,832

7,271

2,231

We incurred accelerated depreciation of $16.7 million, $44.0 million, and $3.2 million for 2018, 2017, and 2016,

respectively. These expenses were related to the publishing segment.

Asset impairment charges: We recorded asset impairment charges of $50.5 million, $46.8 million, and $55.9 million for

2018, 2017, and 2016, respectively.

We recorded impairment charges for property, plant, and equipment as follows:

In thousands

Publishing

ReachLocal

Total

2018

2017

2016

20,380

377

20,757

40,267

—

40,267

31,528

—

31,528

We recorded impairment charges for goodwill and indefinite-lived intangibles as follows:

In thousands

Publishing

Total

2018

2017

2016

25,152

3,115

14,485

We recorded impairment charges for definite-lived intangibles as follows:

In thousands

Publishing

Total

2018

2017

2016

4,563

3,414

9,927

Property sales: In February 2018, we sold property in Nashville, Tennessee and entered into a 15-month rent-free

leaseback agreement. The sale generated net proceeds of approximately $41.8 million and is accounted for under the financing
method. The property, which has a net book value of approximately $11.6 million as of December 31, 2018, remains on the
balance sheet and will continue to be depreciated until the lease terminates. We recorded the financing liability within Other
current liabilities in the Consolidated balance sheets. The sale, along with any related gain, will be recognized when the lease
terminates.

In December 2018, we sold property in Phoenix, Arizona and entered into a 7-year leaseback agreement. The sale
generated proceeds of approximately $33.9 million. We recorded a total deferred gain of $13.2 million in the Consolidated
balance sheets, $1.9 million of which is within Other current liabilities and $11.3 million is within Other noncurrent liabilities.
This gain will be recognized in retained earnings upon adoption of the new leasing standard in 2019.

NOTE 6 — Goodwill and other intangible assets

Goodwill, indefinite lived intangible assets, and definite lived intangible assets consist of the following:

In thousands

December 31, 2018

Goodwill

Indefinite lived intangibles:

Mastheads and trade names

Definite lived intangible assets:

Developed technology

Customer relationships

Other

Total

December 31, 2017

Goodwill

Indefinite lived intangibles:

Mastheads and trade names

Definite lived intangible assets:

Developed technology

Customer relationships

Other

Total

Gross

Accumulated
Amortization

Net

779,597

— $

779,597

34,008

—

34,008

130,652

101,975

14,680

1,060,912

737,716

46,156

68,853

89,616

13,591

(50,488)

(52,491)

(7,992)

80,164

49,484

6,688

(110,971) $

949,941

— $

737,716

—

46,156

(26,139)

(47,945)

(4,478)

42,714

41,671

9,113

955,932

(78,562) $

877,370

Intangible amortization expense was $36.6 million in 2018, $30.6 million in 2017, and $14.9 million in 2016. The increase

is due to the full year amortization of the intangibles acquired as a result of our 2017 acquisitions as well as the intangibles
acquired as a result of our 2018 acquisitions. The weighted average remaining amortization periods for customer relationships,
acquired technology, and other amortizable intangibles are approximately 8.1, 5.5 and 2.0 years, respectively.

The projected annual amortization expense related to amortizable intangibles as of December 31, 2018 is as follows:

In thousands

2019

2020

2021

2022

2023

34,493

21,156

18,290

15,646

15,135

The balances and changes in the carrying amount of goodwill by segment are as follows:

In thousands

Balance at December 25, 2016:

Goodwill

Accumulated impairment losses

Net balance at December 25, 2016

Activity during the year:

Acquisitions and adjustments

Foreign currency exchange rate changes

Total

Balance at December 31, 2017:

Goodwill

Accumulated impairment losses

Net balance at December 31, 2017

Activity during the year:

Acquisitions and adjustments

Impairment loss

Foreign currency exchange rate changes

Total

Balance at December 31, 2018:

Goodwill

Accumulated impairment losses

Net balance at December 31, 2018

Publishing

ReachLocal

Consolidated

6,925,236

(6,346,429)

578,807

119,481

—

119,481

7,044,717

(6,346,429)

698,288

3,238

15,421

19,451

1,318

18,659

20,769

22,689

16,739

39,428

7,116,038

(6,518,572)

140,250

—

7,256,288

(6,518,572)

597,466

140,250

737,716

(13,810)

(10,249)

67,483

—

(1,617)

(23,985) $

65,866

67,557

(13,810)

(11,866)

41,881

6,991,780

(6,418,299)

206,116

—

7,197,896

(6,418,299)

573,481

206,116

779,597

In fiscal year 2018, the company early adopted new accounting guidance simplifying the goodwill impairment quantitative

test by removing the requirement to perform a two-step analysis. In connection with the annual budget process in the fourth
quarter, strategic five-year financial projections were developed. These projections were used as a key input into the annual
goodwill impairment test performed in the fourth quarter. Consistent with our accounting policy, we applied a combination of a
discounted cash flow method and market-based approach reflecting current assumptions for each reporting unit. We compared
the fair value of each reporting unit to its carrying amount, which resulted in the carrying value of the U.K. reporting group
being in excess of the fair value. As a result, we recorded a non-cash goodwill impairment charge of $13.8 million in 2018. The
Domestic Publishing and ReachLocal reporting units' fair values exceeded their respective carrying values.

In fiscal years 2017 and 2016, we performed quantitative step one analyses of each of our reporting units as part of the
annual goodwill impairment evaluation under legacy accounting for goodwill guidance. We determined the fair values of all
reporting units were in excess of the individual reporting units' carrying values, and, accordingly, step two analyses were not
required, and no goodwill impairment was recorded.

NOTE 7 — Debt

Revolving credit facility: We maintain a secured revolving credit facility pursuant to which we may borrow up to an
aggregate principal amount of $500 million (credit facility). Under the credit facility, we may borrow at an applicable margin
above the Eurodollar base rate (LIBOR loan) or the higher of the Prime Rate, the Federal Funds Effective Rate plus 0.50%, or
the one month LIBOR rate plus 1.00% (ABR loan). The applicable margin is determined based on our total leverage ratio but
differs between LIBOR loans and ABR loans. For LIBOR-based borrowing, the margin varies from 2.00% to 2.50%. For ABR-
based borrowing, the margin varies from 1.00% to 1.50%. Up to $50 million of the credit facility is available for issuance of
letters of credit. The credit facility matures on June 29, 2020.

Customary fees related to the credit facility, including commitment fees on the undrawn commitments of between 0.30%
and 0.40% per annum, are payable quarterly in arrears, and are based on our total leverage ratio. Borrowings under the credit
facility are guaranteed by our wholly-owned material domestic subsidiaries. All obligations of Gannett and each subsidiary
guarantor under the Credit Facility are or will be secured by first priority security interests in our equipment, inventory,

accounts receivable, fixtures, general intangibles and other personal property, mortgages on certain material real property, and
pledges of the capital stock of each subsidiary guarantor.

As of December 31, 2018, we had $135.0 million in outstanding borrowings under the credit facility and $23.1 million of

letters of credit outstanding, leaving $341.9 million of availability.

Convertible debt: On April 9, 2018, we completed an offering of 4.75% convertible senior notes, with an initial offering
size of $175.0 million aggregate principal amount. As part of the offering, the initial purchaser of the notes exercised its option
to purchase an additional $26.3 million aggregate principal amount of notes, resulting in total aggregate principal of $201.3
million and net proceeds of approximately $195.3 million. Interest on the notes is payable semi-annually in arrears. The notes
mature on April 15, 2024 with our earliest redemption date being April 15, 2022. The stated conversion rate of the notes is
82.4572 shares per $1,000 in principal or approximately $12.13 per share.

The $201.3 million principal value of the notes was bifurcated into debt and equity components. The $171.1 million

liability component is measured at fair value using the present value of its cash flows at a discount rate of 7.91% and is
reported as convertible debt in the Consolidated balance sheets. The liability component of the convertible debt is classified as
Level 2 because it is measured at fair value using commonly accepted valuation methodologies and indirectly observable,
market-based risk measurements. The residual amount of $30.2 million is recorded within additional paid-in capital in the
equity section of the Consolidated balance sheets. $6.3 million of debt issuance costs were allocated between liabilities and
equity in proportion to the allocation of the principal value of the notes, with $5.4 million allocated to liabilities and $0.9
million allocated to equity. These debt issuance costs will be amortized over the 6-year contractual life of the notes. The
unamortized discount totaled $27.3 million as of December 31, 2018, which will be amortized over the remaining contractual
life of the notes. For the year ended December 31, 2018, interest expense on the notes totaled $6.9 million. Amortization of
debt issuance costs was $0.7 million for the year ended December 31, 2018. Amortization of the discount was $2.9 million for
the year ended December 31, 2018. The effective interest rate on the liability component of the notes was 7.91% as of
December 31, 2018.

For the year ended December 31, 2018, no shares were issued upon conversion, exercise, or satisfaction of the required
conditions because no conversion triggers were met during the period. Refer to Note 11 — Supplemental equity information for
details on the convertible debt's impact to diluted earnings per share under the treasury stock method.

NOTE 8 — Retirement plans

Defined benefit retirement plans: We, along with our subsidiaries, have various defined benefit retirement plans, including

plans established under collective bargaining agreements. The disclosure tables below include the assets and obligations of the
Gannett Retirement Plan (GRP), the Newsquest and Romanes Pension Schemes in the U.K. (U.K. Pension Plans), the
Newspaper Guild of Detroit Pension Plan, the 2015 SERP, and a supplemental non-qualified retirement plan we assumed
pursuant to our acquisition of JMG (JMG Plan). We use a December 31 measurement date convention for all retirement plans.

Our pension costs, which include costs for our qualified and non-qualified plans, are presented in the following table:

In thousands

Operating expenses:

2018

2017

2016

Service cost—benefits earned during the period

2,192

2,300

3,066

Non-operating expenses:

Interest cost on benefit obligation

Expected return on plan assets

Amortization of prior service costs

Amortization of actuarial loss

Settlement charge

Total non-operating expenses (benefit)

Total expense (benefit) for retirement plans

101,232

(173,165)

126

63,801

3,092

(4,914)

111,272

(169,700)

6,670

72,656

—

20,898

(2,722) $

23,198

125,413

(183,697)

6,667

62,095

(49)

10,429

13,495

The following table provides a reconciliation of pension benefit obligations (on a projected benefit obligation measurement

basis), plan assets and funded status, along with the related amounts that are recognized in the Consolidated balance sheets.

In thousands

Change in benefit obligations

Benefit obligations at beginning of year

Service cost

Interest cost

Plan amendments

Actuarial gain

Foreign currency translation

Gross benefits paid

Acquisitions

Curtailments

Settlements

Other actuarial adjustments

Benefit obligations at end of year

Change in plan assets

Fair value of plan assets at beginning of year

Actual return on plan assets

Employer contributions

Gross benefits paid

Acquisitions

Settlements

Foreign currency translation

Fair value of plan assets at end of year

Funded status at end of year

Amounts recognized in Consolidated balance sheets

Noncurrent assets

Accrued benefit cost—current

Accrued benefit cost—noncurrent

December 31,
2018

December 31,
2017

3,137,179

3,161,581

2,192

101,232

(92,402)

(171,723)

(51,824)

(203,179)

58,395

1,483

(7,592)

21,394

2,795,155

2,699,837

(69,434)

76,656

(203,179)

58,435

(7,592)

(52,416)

2,300

111,272

—

(24,356)

89,915

(203,279)

—

(254)

—

3,137,179

2,411,007

365,597

53,990

(203,279)

—

(254)

72,776

2,502,307

2,699,837

(292,848) $

(437,342)

48,077

2,103

(21,841) $

(17,569)

(319,084) $

(421,876)

The funded status (on a projected benefit obligation basis) of our plans at December 31, 2018, is as follows:

In thousands

GRP
SERP (a)
U.K. Pension Plans

Newspaper Guild of Detroit Plan
JMG Plan (a)

Total
(a) The SERP and JMG Plans are unfunded, unsecured liabilities.

Fair Value of
Plan Assets

Benefit
Obligation

Funded
Status

1,565,406

1,797,991

(232,585)

—

846,554

90,347

—

96,858

798,606

98,745

2,955

(96,858)

47,948

(8,398)

(2,955)

2,502,307

2,795,155

(292,848)

The following table presents information for our retirement plans for which accumulated benefits exceed assets:

In thousands

Accumulated benefit obligation

Fair value of plan assets

December 31,
2018

December 31,
2017

$
$

1,994,423
1,655,753

$
$

3,132,445
2,699,837

The following table presents information for our retirement plans for which assets exceed accumulated benefits:

In thousands

Accumulated benefit obligation

Fair value of plan assets

December 31,
2018

December 31,
2017

$
$

798,606
846,554

$
$

—
—

The following table presents information for our retirement plans for which projected benefit obligations exceed assets:

In thousands

Projected benefit obligation

Fair value of plan assets

December 31,
2018

December 31,
2017

$
$

1,996,549
1,655,753

$
$

3,137,179
2,699,837

The following table presents information for our retirement plans for which assets exceed projected benefit obligations:

In thousands

Projected benefit obligation

Fair value of plan assets

December 31,
2018

December 31,
2017

$
$

798,606
846,554

$
$

—
—

The following table summarizes the pre-tax amounts recorded in Accumulated other comprehensive loss that are currently

unrecognized as a component of pension expense for our retirement plans as of the dates presented.

In thousands

Net actuarial losses

Prior service credit (cost)

Amounts in accumulated other comprehensive loss

December 31,
2018

December 31,
2017

(1,562,204) $
65,461

(1,540,698)
(22,593)

(1,496,743) $

(1,563,291)

The actuarial loss amounts expected to be amortized from Accumulated other comprehensive loss into net periodic benefit

cost in 2019 are $62.7 million. The prior service credit amounts expected to be amortized from Accumulated other
comprehensive loss into net periodic benefit cost in 2019 are $2.0 million.

Changes in plan assets and benefit obligations recognized in Comprehensive income (loss) consist of the following:

In thousands

Current year actuarial loss

Change in prior service cost

Actuarial gain due to settlement

Amortization of actuarial loss

Amortization of prior service costs

Foreign currency gain

Other actuarial adjustments

Total

2018

70,945

(92,052)

(1,609)

(63,801)

(126)

(12,536)

21,320

(77,859)

Pension costs: The following weighted average assumptions for all the plans were used to determine net pension costs:

Discount rate

Expected return on plan assets

Rate of compensation increase

2018

3.35%

6.73%

2.95%

2017

3.63%

7.24%

2.95%

2016

4.24%

7.60%

2.95%

The expected return on plan assets assumption was determined based on plan asset allocations, a review of historic capital

market performance, historical plan asset performance and a forecast of expected future plan asset returns.

Benefit obligations and funded status: The following weighted average assumptions were used to determine the year-end

benefit obligations:

Discount rate

Rate of compensation increase

December 31,
2018

December 31,
2017

3.86%

2.00%

3.34%

2.95%

Total contributions made for our plans during 2018, as well as expected contributions, are as follows:

In thousands

2018

2019

2020

2021

25,167

GRP (a)
U.K. Pension Plans (b)
SERP (c)
Newspaper Guild of Detroit Plan (c)
JMG Plan (c)
Total
$
(a) Of the 2020 estimated contribution, $25 million represents a contractual obligation to the Gannett Retirement Plan.
(b) Contributions for our U.K. Pension Plans were translated to U.S. dollars at the prevailing December 31, 2018 balance sheet exchange rate of 1.27.
(c) Contributions beyond the next fiscal year are excluded due to uncertainties regarding significant assumptions involved in estimating these contributions

—
—
—
72,194

21,580
—
261
77,322

13,538
136
590
76,656

—
—
—
37,858

37,225

15,000

30,481

25,000

47,000

25,194

22,858

such as interest rate levels as well as the amount and timing of invested asset returns.

In June 2018, the inflation index used to determine payments to beneficiaries of the Newsquest pension plan was changed

from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI). As a result of this change, we remeasured the plan at
June 30, 2018 and recognized actuarial gains of $33.1 million during the year ended December 31, 2018 and a net prior service
credit of $103.4 million within Accumulated other comprehensive loss in the Consolidated balance sheets.

Plan assets: The weighted average target asset allocation of our plans for 2019 and allocations at the end of 2018 and

2017, by asset category, are presented in the table below:

Equity securities

Debt securities
Alternative investments (a)
Total
(a) Alternative investments include real estate, private equity and hedge funds.

Target
Allocation

2019

36%

46%

18%

100%

Allocation of Plan Assets

2018

36%

48%

16%

100%

2017

46%

40%

14%

100%

The primary objective of company-sponsored retirement plans is to provide eligible employees with scheduled pension

benefits; the "prudent man" guideline is followed with regard to the investment management of retirement plan assets.
Consistent with prudent standards for preservation of capital and maintenance of liquidity, the goal is to earn the highest
possible total rate of return while minimizing risk. The principal means of reducing volatility and exercising prudent investment
judgment is diversification by asset class and by investment manager; consequently, portfolios are constructed to attain prudent
diversification in the total portfolio, each asset class, and within each individual investment manager's portfolio. Investment
diversification is consistent with the intent to minimize the risk of large losses. All objectives are based upon an investment
horizon spanning five years so that interim market fluctuations can be viewed with the appropriate perspective. The target asset
allocation represents the long-term perspective. Retirement plan assets will be rebalanced periodically to align them with the
target asset allocations. Risk characteristics are measured and compared with an appropriate benchmark quarterly; periodic
reviews are made of the investment objectives and the investment managers. Actual investment losses on our Gannett
Retirement Plan assets were 3.4% for 2018 compared to returns of 20.2% for 2017 and 0.4% for 2016.

As of December 31, 2018, retirement plan assets did not include any shares of our common stock. Prior to the sale of its

shares of our stock, the plan received an immaterial amount of dividends during 2018.

Cash flows: We estimate the following benefit payments will be made from retirement plan assets, which reflect expected

future service, as appropriate. The amounts below represent the benefit payments for our plans.

In thousands
2019

2020

2021

2022

2023

2024 - 2028

401(k) savings plan

281,361

193,954

190,532

188,040

185,864

886,556

Generally, employees who are scheduled to work at least 1,000 hours during the year are eligible to participate in our

principal defined contribution plan, The Gannett Co., Inc. 401(k) Savings Plan (the 401(k) Plan). Employees covered under
collective bargaining agreements are eligible to participate in the 401(k) Plan only if participation has been bargained.
Employees can elect to save up to 50% of compensation on a pre-tax basis subject to certain limits.

For most participants, the plan's matching formula is 100% of the first 5% of employee contributions. We also make

additional employer contributions on behalf of certain long-term employees. Compensation expense related to 401(k)
contributions was $26.6 million in 2018, $29.0 million in 2017, and $28.8 million in 2016. We settle the 401(k) employee
match obligation payable in company stock by buying our stock in the open market and depositing it in the participants'
accounts.

In connection with our acquisitions of JMG and ReachLocal, as discussed in Note 4 — Acquisitions, we assumed 401(k)
savings plans. The JMG 401(k) savings plan (JMG Plan) continued to cover former JMG employees until the JMG plan was
merged with the 401(k) Plan in March 2017. For most participants in this plan, the matching formula was 50% of the first 7%
of employee contributions, and the employer match obligation is settled in cash. Additionally, the ReachLocal defined
contribution plan was merged with the 401(k) Plan in July 2017.

Multi-employer plans that provide pension benefits

We contribute to a number of multi-employer defined benefit pension plans under the terms of collective-bargaining
agreements (CBAs) that cover our union-represented employees. The risks of participating in these multi-employer plans are
different from single-employer plans in the following aspects:

• We play no part in the management of plan investments or any other aspect of plan administration.

• Amounts we contribute to the multi-employer plan may be used to provide benefits to employees of other participating

employers.

•

If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the

remaining participating employers.

•

If we choose to stop participating in some of our multi-employer plans, we may be required to pay those plans an

amount based on the unfunded status of the plan, referred to as a withdrawal liability.

Our participation in these plans for the annual period ended December 31, 2018, is outlined in the table below. The "EIN/

Plan Number" column provides the Employee Identification Number (EIN) and the three-digit pension plan number. Unless
otherwise noted, the two most recent Pension Protection Act (PPA) zone statuses available are for the plan's year-end at
December 31, 2018 and December 31, 2017. The zone status is based on information that we received from the plan and is
certified by the plan's actuary. Among other factors, plans in the red zone are generally less than 65% funded; plans in the
orange zone are both a) less than 80% funded and b) have an accumulated/expected funding deficiency in any of the next six
plan years, net of any amortization extensions; plans in the yellow zone meet either one of the criteria mentioned in the orange
zone; and plans in the green zone are at least 80% funded. The "FIP/RP Status Pending/Implemented" column indicates plans
for which a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented. The last
column lists the expiration date(s) of the collective-bargaining agreement(s) to which the plans are subject.

We make all required contributions to these plans as determined under the respective CBAs. For each of the plans listed

below, our contribution represented less than 5% of total contributions to the plan. This calculation is based on the plan
financial statements issued at the end of December 31, 2017. At the date we issue our financial statements, Forms 5500 were
unavailable for the plan years ending after December 31, 2017.

We incurred $2.3 million in expenses for multi-employer withdrawal liabilities in 2018, no such expenses in 2017, and

$2.0 million in 2016. We released withdrawal liabilities of $1.5 million in 2018, $7.8 million in 2017, and none for 2016.
Current liabilities on the Consolidated balance sheets include $3.1 million and $2.9 million at December 31, 2018, and
December 31, 2017, respectively, and other noncurrent liabilities on the Consolidated balance sheets include $31.8 million and
$33.0 million at December 31, 2018, and December 31, 2017, respectively, for such withdrawal liabilities.

Multi-employer Pension Plans

Pension Plan Name

EIN Number/

Plan Number

CWA/ITU Negotiated Pension Plan

13-6212879/001

Zone Status
Dec. 31,

2018

Red

2017

Red

FIP/RP Status
Pending/
Implemented

Contributions
(in thousands)

2018

2017

2016

Surcharge
Imposed

Expiration
Dates of
CBAs

Implemented

$ 471 $ 431 $ 478

4/10/2019

GCIU—Employer Retirement Benefit
Plan(a)
IAM National Pension Plan(a)

Teamsters Pension Trust Fund of
Philadelphia and Vicinity(a)

91-6024903/001

Red

Implemented

51-6031295/002

Green

241

278

Yes

4/30/2019

23-1511735/001 Yellow

Yellow

Implemented

1,361

1,347

1,473

(b)

Central Pension Fund of the International
Union of Operating Engineers and
Participating Employers(a)

36-6052390/001

Green as
of Jan.
31, 2018

Green as
of Jan.
31, 2017

4/30/2019

Total
(a) This plan has elected to utilize special amortization provisions provided under the Preservation of Access to Care for Medicare Beneficiaries and Pension

$ 2,194 $2,131 $2,345

(b)

Relief Act of 2010.
In February 2018, an interim agreement was executed to maintain the terms and contributions of the plan past the expiration date of 12/21/2017. This
agreement is subject to additional negotiation.

NOTE 9 — Postretirement benefits other than pension

We provide health care and life insurance benefits to certain retired employees who meet age and service requirements.

Most of our retirees contribute to the cost of these benefits and retiree contributions are increased as actual benefit costs
increase.

The cost of providing retiree health care and life insurance benefits is actuarially determined. Our policy is to fund benefits

as claims and premiums are paid. We use a December 31 measurement date for these plans.

Postretirement benefit cost for health care and life insurance included the following components:

In thousands

Operating expenses:

Service cost – benefits earned during the period
Non-operating expenses:

Interest cost on net benefit obligation

Amortization of prior service credit

Amortization of actuarial (gain) loss

Other actuarial adjustments

Total non-operating cost (benefit)

2018

2017

2016

173

151

202

2,965

(3,535)

(360)

—

(930)

3,605

(3,648)

103

—

4,038

(4,794)

415

(350)

(691)

(489)

Net periodic postretirement expense (benefit)

(757) $

211

The table below provides a reconciliation of benefit obligations and funded status of our postretirement benefit plans:

In thousands

Change in benefit obligations

Net benefit obligations at beginning of year

Service cost

Interest cost

Plan participants' contributions

Actuarial gain

Foreign currency translation

Gross benefits paid

Net benefit obligations at end of year

Change in plan assets

Fair value of plan assets at beginning of year

Employer contributions

Plan participants' contributions

Gross benefits paid

Fair value of plan assets at end of year

Benefit obligation at end of year

Amounts recognized in Consolidated Balance Sheets
Accrued benefit cost—current

Accrued benefit cost—noncurrent

December 31,
2018

December 31,
2017

92,366

99,661

173

2,965

—

(9,109)

(165)

(8,546)

77,684

— $

8,546

—

(8,546)

— $

151

3,605

1,014

(2,210)

—

(9,855)

92,366

—

8,841

1,014

(9,855)

—

77,684

92,366

(7,746) $

(69,938) $

(9,022)

(83,344)

The following table summarizes the pre-tax amounts recorded in Accumulated other comprehensive loss that are currently

unrecognized as a component of net periodic postretirement benefit credit as of the dates presented:

In thousands

Net actuarial gains (losses)

Prior service credit

Amounts in accumulated other comprehensive loss

December 31,
2018

December 31,
2017

5,515

15,529

21,044

(3,233)

19,063

15,830

The actuarial gain and prior service credit estimated to be amortized from Accumulated other comprehensive loss into net

periodic benefit cost in 2019 are $0.8 million and $3.3 million, respectively.

Changes in plan assets and benefit obligations recognized in Other comprehensive income consist of the following:

In thousands

Current year actuarial gain

Amortization of actuarial gain

Amortization of prior service credit

Total

2018

(9,109)

360

3,535

(5,214)

Postretirement benefit costs: The following assumptions were used to determine postretirement benefit cost:

Discount rate

Health care cost trend rate

Ultimate trend rate

Year that ultimate trend rate is reached

2018

2017

2016

3.60%

5.80%

5.00%

2022

4.01%

5.80%

5.00%

2022

4.27%

5.70%

4.77%

2019

Benefit obligations and funded status: The following assumptions were used to determine the year-end benefit obligation:

Discount rate
Health care cost trend rate assumed for next year (a)
Ultimate trend rate

Year that ultimate trend rate is reached

December 31,
2018

December 31,
2017

4.30%

—

5.00%

2022

3.60%

5.80%

5.00%

2022

(a) As of December 31, 2018, the current year health care cost trend rate was not used to value the benefit obligation. The benefit obligation was estimated

based on the maximum benefits for plan participants.

Assumed health care cost trend rates have an effect on the amounts reported for the health care plans. The effect of a 1%
change in the health care cost trend rate would have no impact on the 2018 postretirement benefit obligation and would result
in no measurable change in the aggregate service and interest components of the 2018 expense.

Cash flows: We expect to make the following benefit payments, which reflect expected future service. The amounts below

represent the benefit payments for our plans.

In thousands

2019

2020

2021

2022

2023

2024 - 2028

Benefit
Payments

7,746

7,288

6,902

6,577

6,250

26,541

The amounts above exclude the participants' share of the benefit cost. We expect no subsidy benefits for 2019 and beyond.

NOTE 10 — Income taxes

The provision (benefit) for income taxes consists of the following:

In thousands

2018
Federal

State and other

Foreign

Total

In thousands

2017
Federal

State and other

Foreign

Total

In thousands

2016
Federal

State and other

Foreign

Total

Current

Deferred

Total

(11,160) $

19,468

1,056

(382)

375

5,762

8,308

1,431

5,380

(10,486) $

25,605

15,119

Current

Deferred

Total

2,210

28,775

(787)

920

(4,652)

7,388

2,343

31,511

30,985

(5,439)

8,308

33,854

Current

Deferred

Total

(7,094) $

8,278

(528)

5,606

262

7,194

(2,016) $

15,734

1,184

(266)

12,800

13,718

The components of net income before income taxes consist of the following:

In thousands

Domestic

Foreign

Total

2018

2017

2016

7,852

22,307

30,159

4,006

36,735

40,741

19,349

47,079

66,428

The provision for income taxes varies from the U.S. federal statutory tax rate as a result of the following differences:

U.S. statutory tax rate

Increase (decrease) in taxes resulting from:

State/other income taxes net of federal income tax

Valuation allowance

Impact of rate change in U.S. and foreign tax jurisdictions

Goodwill impairment

Net of additional reserves and lapse of statutes of limitations

Meals and entertainment

Transaction costs

Statutory rate differential and permanent differences in earnings in foreign jurisdictions
Stock-based compensation (a)
Worthless stock and bad debt deduction

Other, net

Effective tax rate

2018

2017

2016

21.0%

35.0%

2.6

29.0

(9.4)

9.1

(9.1)

4.3

3.1

(3.0)

(1.1)

—

3.6

(0.7)

20.0

105.3

—

29.1

5.1

—

(17.5)

(3.9)

(90.0)

0.9

(3.8)

3.5

1.6

—

3.3

2.7

3.4

(10.7)

(12.3)

—

(2.0)

50.1%

83.3%

20.7%

(a) We adopted new accounting guidance related to employee stock-based compensation in the fourth quarter of 2016. The adoption reduced our 2016 full year

combined income tax provision for federal, state, and foreign by $8.9 million and the tax rate by approximately 13.5%.

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 are adjusted for enacted changes in tax laws or tax rates of the
various tax jurisdictions. The amount of such adjustments for 2018 was $2.8 million compared to 2017 adjustments of $42.2
million and 2016 adjustments of $1.1 million. The adjustments for 2018 and 2017 are mainly related to the statutory rate
reduction in the United States, and the adjustments in 2016 were due to rate reductions in U.K. statutory rates.

Our deferred tax assets were further reduced for the establishment of valuation allowances related to unamortizable

intangible assets for two of our publishing properties of $7.6 million and a valuation allowance on share-based compensation of
$1.9 million, which was recorded as additional income tax expense in 2018.

Deferred tax liabilities and assets were composed of the following at the end of 2018 and 2017:

In thousands

Liabilities

Accelerated depreciation

Total deferred tax liabilities

Assets

Pension and postretirement benefits

Loss carryforwards

Basis difference and amortization of intangibles

Accrued compensation costs

Partnership investments including impairments

Federal tax benefits of uncertain state tax positions

Other

Total deferred tax assets

Valuation allowance

Total net deferred tax assets

Noncurrent deferred tax assets (net of deferred tax liabilities of $1,872 and $1,209 at December 31, 2018
and December 31, 2017, respectively)

2018

2017

(47,849) $

(47,849)

(69,048)

103,393

144,837

74,104

35,000

28,698

10,736

1,238

26,593

279,762

(182,746)

49,167

68,914

57,012

25,596

9,171

2,026

33,539

341,095

(170,764)

101,283

Included in total deferred tax assets are valuation allowances of approximately $182.7 million in 2018 and $170.8 million

in 2017, primarily related to unamortizable intangible assets, foreign tax credits, state net operating losses, state credits, and

foreign losses available for carry forward to future years. The current year increase in valuation allowances was primarily
related to unamortizable intangible assets, state net operating losses, share-based compensation, and foreign net operating
losses. The valuation allowance is based on an analysis of future sources of taxable income and other sources of positive and
negative evidence and whether it is more likely than not that the identified deferred tax assets will not be realized before their
expiration.

The following table summarizes the activity related to our valuation allowance for deferred tax assets for the year ended

December 31, 2018:

In thousands

Balance at
Beginning of
Period

Additions/
(Reductions)
Charged to
Expenses

Additions/
(Reductions) for
Acquisitions/
Dispositions

Other (Deductions
from)/Additions to
Reserves

Foreign Currency
Translation

Balance at
End of Period

170,764

13,960

1,894

(777) $

(3,095) $

182,746

Realization of deferred tax assets for which valuation allowances have not been established is dependent upon generating

sufficient future taxable income. We expect to realize the benefit of these deferred tax assets through future reversals of our
deferred tax liabilities, through the recognition of taxable income in the allowable carryback and carryforward periods, and
through implementation of future tax planning strategies. Although realization is not assured, we believe it is more likely than
not that all deferred tax assets for which valuation allowances have not been established will be realized.

The aforementioned valuation allowance includes amounts relating to certain U.S. and foreign tax attributes that are
deemed unrealizable as of December 31, 2018. The following table summarizes the specific tax attributes and related valuation
allowances.

In thousands

Tax attribute

U.S. Federal net operating loss carryforwards

Foreign net operating loss carryforwards

Foreign capital loss carryforwards

Apportioned state net operating loss carryforwards

Gross Amount

Valuation
Allowance

Remaining
Life

9,100

—

2033 to 2035

271,100

32,300

(263,200)

(22,400)

Various

319,600

(300,300)

2019 to 2037

Additionally, as of December 31, 2018, the company had approximately $2.9 million of foreign tax credits, $5.9 million of

state tax credits, and $4.7 million of Research and Development Tax Credits. These credits expire in varying amounts starting
in 2019. We have provided for a valuation allowance of approximately $8.8 million against these credits.

The following table summarizes the activity related to unrecognized tax benefits, excluding the federal tax benefit of state

tax deductions:

In thousands

Change in unrecognized tax benefits

Balance at beginning of year

Additions based on tax positions related to the current year

Additions for tax positions of prior years

Reductions for tax positions of prior years

Settlements

Reductions due to lapse of statutes of limitations

Balance at end of year

2018

2017

2016

32,984

23,890

—

1,335

(5,867)

—

(3,875)

15,850

136

—

(4,727)

(2,165)

24,577

32,984

17,032

125

9,416

(792)

—

(1,891)

23,890

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $22.5 million as

of December 31, 2018, $30.1 million as of December 31, 2017, and $17.3 million as of December 25, 2016.

We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. We also

recognize interest income attributable to overpayment of income taxes and from the reversal of interest expense previously
recorded for uncertain tax positions which are subsequently released as a component of income tax expense. We recognized
income from interest and the release of penalty reserves of $0.8 million in 2018, $5.3 million in 2017, and $0.6 million in 2016.
The amount of accrued interest and payables related to unrecognized tax benefits was $1.2 million as of December 31, 2018,
$0.9 million as of December 31, 2017, and $3.8 million as of December 25, 2016.

We file income tax returns in the United States, various states, and certain foreign jurisdictions. The tax years 2014 through

2017 generally remain subject to examination by the Internal Revenue Services and other foreign tax authorities. Tax years
prior to 2014 remain subject to examination by certain states in instances where we have extended the statutes of limitations.

It is reasonably possible the amount of unrecognized benefit with respect to certain of our unrecognized tax positions will
significantly increase or decrease within the next 12 months. These changes may be the result of settlement of ongoing audits,
lapses of statutes of limitations, or regulatory developments. At this time, we estimate the amount of our gross unrecognized tax
positions may decrease by up to approximately $1.3 million within the next 12 months primarily due to lapses of statutes of
limitations.

In connection with the spin-off, we entered into a tax matters agreement with our former parent which states each

company's rights and responsibilities with respect to payment of taxes, tax return filings, and control of tax examinations. We
are generally responsible for taxes allocable to periods (or portions of periods) beginning after the spin-off. Although any
changes with regard to additional income tax liabilities which relate to periods prior to the spin-off may impact our effective tax
rate in the future, we may be entitled to seek indemnification for these items from our former parent under the tax matters
agreement.

In December 2017, the Tax Cuts and Jobs Act (the Tax Act) was signed into law. The Tax Act contains significant changes

to corporate taxation, including a reduction of the corporate tax rate from 35% to 21%, limitation of the tax deduction for
interest expense to 30% of earnings, limitation of the deduction for net operating losses to 80% of current year taxable income,
elimination of net operating loss carrybacks for losses generated after 2017, one time taxation of offshore earnings at reduced
rates (Transition Tax) regardless of whether offshore earnings are repatriated, the U.S. tax on foreign earnings with a new tax
regime, Global Intangible Low-Taxed Income (GILTI), immediate deductions for certain new investments instead of
deductions for depreciation expense over time, and modifying or repealing many business deductions and credits. The Tax Act
also includes certain provisions that offset the benefits of the rate reduction such as repeal of the domestic production deduction
and disallowance of the deduction of performance-based officers’ compensation in excess of $1 million.

As of December 31, 2018, we have finalized our calculation of historical foreign earnings and have concluded we are not
subject to the Transition Tax, resulting in no adjustment to provisional amounts recorded in 2017. Further, at the end of 2017,
we had remeasured our deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future,
which is generally 21% for U.S. federal tax purposes. For the year ended December 31, 2018, upon further analysis and
refinement of our calculation, we have recognized a favorable adjustment of $2.6 million to the provisional amounts recorded
at December 31, 2017, which is included as a component of income tax expense from continuing operations. This amount is
primarily related to the carryback of net operating losses into higher tax rate years. We consider the enactment date
remeasurement of deferred tax assets and liabilities to be completed. We have also elected to account for the tax liability from
GILTI tax in the year the tax is incurred.

NOTE 11 — Supplemental equity information

Earnings per share

Our earnings per share (basic and diluted) for each fiscal year is presented below:

In thousands, except per share amounts

Net income

2018

2017

2016

15,040

6,887

Weighted average number of common shares outstanding (basic)

112,970

113,047

Effect of dilutive securities

Restricted stock units (RSUs)

Performance shares (PSUs)

Stock options

1,681

1,026

1,515

928

120

52,710

116,018

1,475

881

251

Weighted average number of common shares outstanding (diluted)

115,751

115,610

118,625

Earnings per share (basic)

Earnings per share (diluted)

0.13

0.06

0.45

0.44

The diluted earnings per share amounts exclude the effects of approximately 1.1 million, 0.7 million, and 0.4 million shares

outstanding for 2018, 2017, and 2016, respectively, as their inclusion would be antidilutive.

In accordance with accounting for dilutive securities under the treasury stock method, no shares related to our convertible
notes were included in our calculation of diluted EPS for any of the years presented because no conversion triggers were met
during the period.

Share repurchase program

In May 2018, our Board of Directors approved a share repurchase program authorizing us to repurchase shares with an

We did not repurchase any shares in 2018 under these current and legacy programs. In 2017, we repurchased 2.0 million

shares at a cost of $17.4 million. In 2016, we repurchased 3.8 million shares at a cost of $32.7 million.

Equity-based awards

We established the Gannett Co. Inc. 2015 Omnibus Incentive Compensation Plan (the Plan) for the purpose of granting
equity-based and cash-based awards to Gannett employees and directors. The Plan permits the granting of non-qualified stock
options, incentive stock options, stock appreciation rights, restricted stock, stock awards, restricted stock units (RSUs),
performance shares, performance share units (PSUs), and cash-based awards. Awards may be granted to our employees and
members of the Board of Directors. The Executive Compensation Committee of the Board of Directors administers the plan
and initially reserved 11.0 million shares of our common stock for issuance. In 2017, our shareholders approved a new total
reserve of shares available for issuance of 18.0 million, and in 2018, our shareholders approved an increase in the total reserve
to 24.1 million. The Plan provides that shares of common stock subject to awards granted become available again for issuance
if such awards are canceled or forfeited. We currently issue stock-based compensation to employees in the form of PSUs and
RSUs. We currently issue stock-based compensation to members of our Board of Directors in the form of RSUs. Award grants
to our employees are generally made on January 1, and grants to members of our Board of Directors are generally made in
connection with the date of our annual meetings or commencement of service for a new member.

PSU awards generally have a three-year vesting period with the number of shares earned (0% to 200% of the target award)

determined based upon how our total shareholder return (TSR) compares to the TSR of a peer group of media companies
during the three-year period. PSUs generally vest on a pro rata basis if an employee terminates before the end of the
performance period due to death, disability, or retirement. Non-vested PSUs are generally forfeited upon termination for any
other reason. The fair value and compensation expense of each PSU is determined on the date of grant by using a Monte Carlo
valuation model. Each PSU is equal to and paid in one share of our common stock but carries no voting or dividend rights.

RSU awards have varying incentive periods and grant one share of common stock for each RSU granted. For awards
granted from 2014 to 2017, RSUs generally vest 25% per year over the four-year incentive period. For awards granted in 2018,
RSUs vest 33% per year over a three-year incentive period. For all RSU grants, expense is recognized on a straight-line basis
over the incentive period based on the grant date fair value.

Compensation expense for PSU and RSU awards is recognized net of forfeitures.

Members of our Board of Directors receive grants of RSUs as well as cash compensation. Director RSUs generally vest in

quarterly installments over one year. Expense is recognized on a straight-line basis over the vesting period based on the grant
date fair value.

The Executive Compensation Committee may grant other types of awards that are valued in whole or in part by reference

to or that are otherwise based on the fair market value of our common stock or other criteria which they establish such as the
achievement of performance goals. The maximum aggregate grant of PSU and RSU awards that may be awarded to any
participant in any fiscal year cannot exceed 500,000 shares of common stock, and the maximum aggregate amount of cash-
based awards that may be awarded to any participant in any fiscal year cannot exceed $10 million.

Determining fair value of PSUs

Valuation and amortization method – We determine the fair value of PSUs using the Monte Carlo valuation model. This
model projects probable future stock prices for us and our peer group companies subject to certain price caps at the conclusion
of the three-year incentive period. Key inputs into the Monte Carlo valuation model include expected term, expected volatility,
expected dividend yield, and the risk-free rate. Each assumption is discussed below.

Expected term – The expected term represents the period that our stock-based awards are expected to be outstanding. The

expected term for PSU awards is based on the incentive period of three years.

Expected volatility – The fair value of stock-based awards reflects volatility factors calculated using historical market data
for our common stock and the common stock of our peer group when the Monte Carlo method is used. The time frame used is
equal to the expected term.

Expected dividend – The dividend assumption is based on our expectations about our dividend policy on the date of grant.

Risk-free interest rate – The risk-free interest rate is based on the yield to maturity at the time of the award grant on zero-

coupon U.S. government bonds having a remaining life equal to the award's expected term.

The following assumptions were used to estimate the fair value of PSU awards that were granted:

Expected term

Expected volatility

Risk-free interest rate

Expected dividend yield

Determining fair value of RSUs

2018

3 yrs.

39.60%

1.98%

5.52%

2017

3 yrs.

39.90%

1.47%

6.59%

2016

3 yrs.

42.20%

1.31%

3.93%

For RSUs, the grant-date fair value is calculated at the share price on the date of grant less the present value of estimated

dividends which will be granted during the vesting period.

Stock-based compensation expense

Stock-based compensation expense for Gannett employee participants in both plans have been included within selling,

general, and administrative expense within the Consolidated statements of income. Prior to the distribution date, stock-based
compensation expense for Gannett participants in the former parent plan was allocated to us.

The following table shows the stock-based compensation related amounts recognized in the Consolidated statements of

income for equity awards:

In thousands

Restricted stock and RSUs

Performance shares
Total stock-based compensation

Restricted stock and RSUs

2018

2017

2016

13,863

5,288
19,151

13,135

7,206
20,341

12,889

7,687
20,576

As of December 31, 2018, there was $16.9 million of unrecognized compensation cost related to non-vested restricted
stock and RSUs. This amount will be adjusted for future forfeitures and recognized on a straight-line basis over a weighted
average period of 1.8 years. As of December 31, 2017 and December 25, 2016, there was $19.5 million and $23.4 million of
unrecognized compensation cost related to non-vested restricted stock and RSUs, respectively, with a weighted average
remaining period of 2.4 years in each period.

A summary of restricted stock and RSU awards is presented below:

Outstanding and unvested at December 27, 2015

Granted

Settled

Canceled

Outstanding and unvested at December 25, 2016

Granted

Settled

Canceled

Outstanding and unvested at December 31, 2017

Granted

Settled

Canceled

Outstanding and unvested at December 31, 2018

PSUs

2,778,207

1,483,127

(1,066,056)

(376,442)

2,818,836

2,251,936

(2,373,277)

(433,482)

2,264,013

1,687,446

(826,801)

(622,079)

2,502,579

Weighted
Average
Fair Value

10.91

13.36

10.06

11.81

12.40

8.04

11.36

10.37

9.55

10.23

9.80

9.92

9.83

As of December 31, 2018, there was $4.0 million of unrecognized compensation cost related to non-vested PSUs. This
amount will be adjusted for future forfeitures and recognized over a weighted average period of 1.6 years. As of December 31,
2017 and December 25, 2016, there was $3.7 million and $4.9 million of unrecognized compensation cost related to non-vested
PSUs, respectively, with a weighted average period remaining of 1.7 years in each period.

A summary of the PSU awards is presented below:

Outstanding and unvested at December 27, 2015

Granted

Vested

Canceled

Outstanding and unvested at December 25, 2016

Granted

Vested

Canceled

Outstanding and unvested at December 31, 2017

Granted

Vested

Canceled

Outstanding and unvested at December 31, 2018

Target
Number of
Shares

Weighted
Average
Fair Value

793,674

373,658

(265,110)

(128,075)

774,147

1,012,030

(209,838)

(426,048)

1,150,291

358,541

(374,749)

(238,565)

895,518

15.52

19.30

13.83

16.34

17.82

10.86

17.67

14.58

12.92

13.29

16.27

12.83

11.69

Stock Options: As of December 31, 2018, December 31, 2017, and December 25, 2016, all stock options were fully vested.
Options were exercised with an intrinsic value of approximately $0.3 million, $0.6 million, and $0.9 million in 2018, 2017, and
2016, respectively.

A summary of our stock option awards is presented below:

Outstanding and exercisable at December 27, 2015

Exercised

Canceled

Outstanding and exercisable at December 25, 2016

Exercised

Canceled

Outstanding and exercisable at December 31, 2017

Exercised

Canceled

Outstanding and exercisable at December 31, 2018

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Term
(in years)

Aggregate
Intrinsic
Value

5.58

5.46

9.40

5.37

5.18

5.52

5.56

5.48

5.52

5.60

2.6

4,378,900

1.9

1,304,798

1.2

901,207

0.5

266,206

411,883

(102,842)

(18,774)

290,267

(140,699)

(170)

149,398

(56,153)

(2,246)

90,999

Accumulated other comprehensive loss

The elements of our Accumulated other comprehensive loss consisted of pension, retiree medical and life insurance
liabilities and foreign currency translation. The following tables summarize the components of, and changes in, Accumulated
other comprehensive loss, net of tax:

In thousands

2018

Balance at beginning of year

Other comprehensive income (loss) before reclassifications

Amounts reclassified from accumulated other comprehensive loss

Balance at end of year

In thousands

2017

Balance at beginning of year

Other comprehensive income before reclassifications

Amounts reclassified from accumulated other comprehensive loss

Balance at end of year

In thousands

2016

Balance at beginning of year

Other comprehensive loss before reclassifications

Amounts reclassified from accumulated other comprehensive loss

Balance at end of year

Retirement
Plans

Foreign
Currency
Translation

Total

(1,000,791) $

344,274

(656,517)

26,442

45,179

(31,800)

—

(5,358)

45,179

(929,170) $

312,474

(616,696)

Retirement
Plans

Foreign
Currency
Translation

Total

(1,183,196) $

300,284

(882,912)

133,623

48,782

43,990

—

177,613

48,782

(1,000,791) $

344,274

(656,517)

Retirement
Plans

Foreign
Currency
Translation

(1,058,234) $

384,810

(166,253)

41,291

(84,526)

—

Total

(673,424)

(250,779)

41,291

(1,183,196) $

300,284

(882,912)

Accumulated other comprehensive loss components are included in the computation of net periodic postretirement costs
(see Note 8 — Retirement plans and Note 9 — Postretirement benefits other than pension for more detail). Reclassifications out
of Accumulated other comprehensive loss related to these postretirement plans include the following:

In thousands

Amortization of prior service credit

Amortization of actuarial loss

Total reclassifications, before tax

Income tax effect

Total reclassifications, net of tax

2018

2017

2016

(3,409) $

3,023

63,441

60,032

(14,853)

72,759

75,782

(27,000)

45,179

48,782

1,883

62,155

64,038

(22,747)

41,291

NOTE 12 — Commitments, contingencies and other matters

Telephone Consumer Protection Act (TCPA) litigation: In January 2014, a class action lawsuit was filed against Gannett

in the U.S. District Court for the District of New Jersey (Casagrand et al v. Gannett Co., Inc., et al). The suit claims various
violations of the Telephone Consumer Protection Act (TCPA) arising from allegedly improper telemarketing calls made to
consumers by one of our vendors. The plaintiffs sought to certify a class that would include all telemarketing calls made by the
vendor or us. The TCPA provides for statutory damages of $500 per violation ($1,500 for willful violations). In April 2016, we
agreed to settle all claims raised. The settlements, which have not been fully paid, are reflected in our financial statements as of
December 31, 2018 and are not material to our results of operations, financial position, or cash flows.

Environmental contingency: In March 2011, the Advertiser Company (Advertiser), a subsidiary that publishes the

Montgomery Advertiser, was notified by the U.S. Environmental Protection Agency (EPA) that it had been identified as a
potentially responsible party (PRP) for the investigation and remediation of groundwater contamination in downtown
Montgomery, Alabama. The Advertiser is a member of the Downtown Environmental Alliance, which has agreed to jointly
fund and conduct all required investigation and remediation. In 2016, the Advertiser and other members of the Downtown
Environmental Alliance reached a settlement with the U.S. EPA regarding the costs the U.S. EPA spent to investigate the site.
The U.S. EPA has transferred responsibility for oversight of the site to the Alabama Department of Environmental
Management, which has approved the work plan for the additional site investigation that is currently underway. The
Advertiser's final costs cannot be determined until the investigation is complete, a determination is made on whether any
remediation is necessary, and contributions from other PRPs are finalized.

Other litigation: We are defendants in judicial and administrative proceedings involving matters incidental to our business.

While the ultimate results of these proceedings cannot be predicted with certainty, we expect the ultimate resolution of all
pending or threatened claims and litigation will not have a material effect on our consolidated results of operations, financial
position, or cash flows.

Leases: Future minimum lease commitments for non-cancellable operating leases (primarily real-estate) are as follows:

In thousands

2019

2020

2021

2022

2023

Later years

Total

59,134

50,969

45,633

40,825

34,107

165,512

396,180

Expected future sublease income on these lease commitments is expected to be approximately $8.3 million. Total rent

expense was $53.8 million in 2018, $54.2 million in 2017, and $48.7 million in 2016.

Purchase obligations: We have future expected purchase obligations of $521.8 million related to wire services, interactive

marketing agreements, professional services, paper distribution agreements, printing contracts, and other legally binding
commitments. In addition, in January 2019 we signed a material amendment to an existing contract. Under this amendment, we
have incremental future expected purchase obligations of $52.5 million in 2019 and $63.0 million in 2020. Amounts which we
are liable for under purchase orders outstanding at December 31, 2018 are reflected in the Consolidated balance sheets as
Accounts payable and accrued liabilities and are excluded from the amounts referred to above.

Self-insurance: We are self-insured for most of our employee medical coverage and for our casualty, general liability, and
libel coverage (subject to a cap above which third party insurance is in place). The liabilities, which are reflected in Accounts
payable and accrued liabilities and Other noncurrent liabilities in the Consolidated balance sheets, are established on an
actuarial basis with the advice of consulting actuaries and total $59.3 million and $66.4 million as of December 31, 2018 and
December 31, 2017, respectively.

NOTE 13 — Fair value measurement

Fair value measurement

We measure and record certain assets and liabilities at fair value in the accompanying consolidated financial statements.
Guidance surrounding the valuation of assets and liabilities establishes a hierarchy for those instruments measured at fair value.
This hierarchy distinguishes between assumptions based on market data (observable inputs) and our own assumptions
(unobservable inputs) and consists of three levels:

Level 1 – Quoted market prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than Level 1 inputs that are either directly or indirectly observable; and

Level 3 – Unobservable inputs developed using our own estimates and assumptions, which reflect those that a market

participant would use.

As of December 31, 2018 and December 31, 2017, 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 as a practical expedient to
determine the fair value of certain investments. These investments measured at net asset value have not been classified in the
fair value hierarchy.

Contingent earn-out liabilities resulting from business combinations are also recorded at fair value on a recurring basis.
The company's fair value estimate of the 2019 earn-out liability related to the company’s acquisition of WordStream in July
2018 was $4.5 million as of December 31, 2018. The WordStream earn-out liability is affected by the expected amount and
timing of future revenues, which are Level 3 inputs as they have no observable market.

The Credit Facility is recorded at carrying value, which approximates fair value, in the Consolidated balance sheets and is

classified as Level 3.

The amounts presented in the table below are intended to permit reconciliation to the amounts presented in the

Consolidated balance sheets.

The following tables set forth, by level within the fair value hierarchy, the December 31 measurement date fair values of

our pension plans assets relating to the GRP, the U.K. Pension Plans, and the Newspaper Guild of Detroit Pension Plan:

Pension Plan Assets/Liabilities

In thousands

Fair value measurement as of December 31, 2018

Assets:

Cash and cash equivalents

Corporate common stock

Real estate

Interest in common/collective trusts:

Equities

Fixed income

Partnership/joint venture interests

Hedge funds

Derivative contracts
Total assets at fair value excluding those measured
at net asset value
Instruments measured at net asset value using the practical expedient:

Real estate funds

Interest in common/collective trusts:

Equities

Fixed income

Partnership/joint venture interests

Hedge funds

Total assets at fair value

Liabilities:

Derivative liabilities

Total liabilities at fair value

Level 1

Level 2

Level 3

Total

64,873

2,647

464,830

—

217,168

417,788

—

— $

—

107,410

—

132,277

115,323

67,520

464,830

107,410

217,168

417,788

132,277

115,323

529,703

637,603

355,018

1,522,324

12,690

222,476

712,350

34,789

184

2,504,813

— $

(498) $

(2,008) $

(2,506)

In thousands

Fair value measurement as of December 31, 2017

Assets:
Cash and cash equivalents
Corporate common stock
Real estate
Interest in common/collective trusts:

Equities
Fixed income

Interest in registered investment companies
Partnership/joint venture interests
Hedge funds
Derivative contracts
Total assets at fair value excluding those measured
at net asset value
Instruments measured at net asset value using the practical expedient:
Real estate funds
Interest in common/collective trusts:

Equities
Fixed income

Interest in registered investment companies
Partnership/joint venture interests
Hedge funds
Total assets at fair value
Liabilities:
Derivative liabilities
Total liabilities at fair value

Level 1

Level 2

Level 3

Total

22,496
652,066
—

2,953
—
—

— $
—
112,374

25,449
652,066
112,374

306,967
301,181
108,416
75,907
132,554
23

—
—
108,416
—
—
—

306,967
301,181
—
—
—
—

—
—
—
75,907
132,554
23

782,978

611,101

320,858

1,714,937

12,583

258,867
634,060
38,747
42,810
339
2,702,343

$
$

— $
— $

(498) $
(498) $

(2,008) $
(2,008) $

(2,506)
(2,506)

Valuation methodologies used for assets and liabilities measured at fair value are as follows:

• Corporate stock is valued primarily at the closing price reported on the active market on which the individual

securities are traded.

•

Investments in direct real estate have been valued by an independent qualified valuation professional in the U.K. using
a valuation approach that capitalizes any current or future income streams at an appropriate multiplier. Investments in
real estate funds are mainly valued utilizing the net asset valuations provided by the underlying private investment
companies or through proprietary models with varying degrees of complexity.

Interests in common/collective trusts and interests in 103-12 investments are primarily equity and fixed income
investments valued either through the use of a net asset value as provided monthly by the fund family or fund
company or through proprietary models with varying degrees of complexity. Shares in the common/collective trusts
are generally redeemable upon request.

Interests in registered investment companies are primarily valued using the published net asset values as quoted
through publicly available pricing sources or through proprietary models with varying degrees of complexity.
Additionally, the interests are redeemable on request.

Investments in partnerships and joint venture interests classified in Level 3 are valued based on an assessment of each
underlying investment, considering items such as expected cash flows, changes in market outlook, and subsequent
rounds of financing. These investments are included in Level 3 of the fair value hierarchy because exit prices tend to
be unobservable and reliance is placed on the above methods. Most of the partnerships are general leveraged buyout
funds, others include a venture capital fund, a fund formed to invest in special credit opportunities, an infrastructure
fund and a real estate fund. Interest in partnership investments could be sold on the secondary market but cannot be
redeemed. Instead, distributions are received as the underlying assets of the funds are liquidated. There are $7.2
million in unfunded commitments related to partnership/joint venture interests. One of the Plan's investments in
partnerships and joint venture interests represents a limited partnership commingled fund valued using the net asset
value as reported by the fund manager.

•

Investments in hedge funds consist of investments that were formed to invest in mortgage and trading opportunities
and are valued at the net asset value as reported by the fund managers. Additionally, there is an investment that
consists of a fund of hedge funds whose strategy is to produce a return uncorrelated with market movements. This
fund is classified as a Level 3 because its valuation is derived from unobservable inputs and a proprietary assessment
of the underlying investments. Shares in the hedge funds are generally redeemable twice a year or on the last business
day of each quarter with at least 60 days written notice subject to a potential 5% holdback.

• Derivatives primarily consist of forward and swap contracts. Forward contracts are valued at the spot rate, plus or
minus forward points between the valuation date and maturity date. Swaps are valued at the mid-evaluation price
using discounted cash flow models. Items in Level 3 are valued based on the market values of other securities for
which they represent a synthetic combination.

We review appraised values, audited financial statements and additional information to evaluate fair value estimates from

our investment managers or fund administrator. The following tables set forth a summary of changes in the fair value of our
pension plan assets and liabilities that are categorized as Level 3:

Level 3 Pension Plan Assets/Liabilities

In thousands

For the year ended December 31, 2018

Actual Return on Plan
Assets

Relating to
Assets Still
Held at
Report
Date

Relating to
Assets Sold
During the
Period

Balance at
Beginning
of Year

Purchases

Sales

Settlements

Transfers
In and/or
Out of
Level 3 (a)

Balance at
End of
Year

112,374

(5,513) $

— $

3,485

(2,936) $

— $

107,410

75,907

132,554

4,911

2,769

(15)

—

64,908

(571)

—

(12,878)

(20,000)

—

132,277

115,323

320,858

2,152

— $

68,393

(3,507) $

(32,878) $

— $

355,018

Assets:

Real estate
Partnership/joint
venture interests

Hedge funds

Derivative contracts
Total

Liabilities:

Derivative liabilities $

(2,008) $

— $

(2,008)

(a) Our policy is to recognize transfers in and transfers out as of the beginning of the reporting period.

In thousands
For the year ended December 31, 2017

Actual Return on Plan
Assets

Relating to
Assets Still
Held at
Report
Date

Relating to
Assets Sold
During the
Period

Balance at
Beginning
of Year

Purchases

Sales

Settlements

Transfers I
n and/or
Out of
Level 3(a)

Balance at
End of
Year

Assets:

Real estate
Partnership/joint
venture interests

Hedge funds

Derivative contracts
Total

Liabilities:

83,522

12,735

— $

16,117

— $

112,374

75,967

173,937

9,763

8,617

(10)

—

14,152

(1,740)

—

(22,235)

(50,000)

—

75,907

132,554

333,459

31,105

— $

30,269

(1,740) $

(72,235) $

— $

320,858

Derivative liabilities $

(2,008) $

— $

(2,008)

(a) Our policy is to recognize transfers in and transfers out as of the beginning of the reporting period.

There were no transfers between Levels 1 and 2 for the years ended December 31, 2018 and December 31, 2017.

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). Our assets that are measured on a nonrecurring basis are assets held for sale (Level 3), which are evaluated by
using executed purchase agreements, letters of intent or third party valuation analyses when certain circumstances arise.

The non-financial assets measured at fair value on a nonrecurring basis in the accompanying Consolidated balance sheets

are for Assets held for sale at December 31, 2018 and December 31, 2017 of $23.3 million and $18.9 million, respectively.

NOTE 14 — Segment reporting

We define our reportable segments based on the way the Chief Operating Decision Maker (CODM), currently the Chief

Executive Officer, manages the operations for purposes of allocating resources and assessing performance. Our reportable
segments include the following:

• Publishing, which consists of our portfolio of local, regional, national, and international newspaper publishers. The
results of this segment include local, classified, and national advertising revenues consisting of both print and digital
advertising, circulation revenues from the distribution of our publications on our digital platforms, home delivery of
our publications, single copy sales, and other revenues from commercial printing and distribution arrangements. The
publishing reportable segment is an aggregation of two operating segments: domestic publishing and the U.K.

• ReachLocal, which consists exclusively of our ReachLocal digital marketing solutions subsidiaries. The results of this
segment include advertising revenues from our search and display services and other revenues related to web presence
and software solutions provided by ReachLocal.

In addition to the above operating segments, we have a corporate and other category that includes activities not directly

attributable to a specific segment. This category primarily consists of broad corporate functions and includes legal, human
resources, accounting, finance, and marketing as well as activities such as tax settlements and other general business costs.

In the ordinary course of business, our reportable segments enter into transactions with one another. While intersegment

transactions are treated like third-party transactions to determine segment performance, the revenues and expenses recognized
by the segment that is the counterparty to the transaction are eliminated in consolidation and do not affect consolidated results.

The CODM uses adjusted EBITDA to evaluate the performance of the segments and allocate resources. Adjusted EBITDA

is a non-GAAP financial performance measure we believe offers a useful view of the overall operation of our businesses and
may be different than similarly-titled non-GAAP financial measures used by other companies. Adjusted EBITDA is defined as
net income before (1) income taxes, (2) interest expense, (3) equity income, (4) other non-operating items, (5) restructuring
costs, (6) acquisition-related expenses (including integration expenses), (7) asset impairment charges, (8) other items (including
certain business transformation costs, litigation expenses, multi-employer pension withdrawals, and gains or losses on certain
investments), (9) depreciation, and (10) amortization. When adjusted EBITDA is discussed in this report, the most directly
comparable GAAP financial measure is net income.

Management considers adjusted EBITDA to be the appropriate metric to evaluate and compare the ongoing operating
performance of our segments on a consistent basis across reporting periods as it eliminates the effect of items which we do not
believe are indicative of each segment's core operating performance.

100

The following table presents our segment information:

In thousands

2018
Advertising and marketing services - external
sales
Advertising and marketing services -
intersegment sales

Circulation

Other

Total revenues

Adjusted EBITDA

2017
Advertising and marketing services - external
sales
Advertising and marketing services -
intersegment sales

Circulation

Other

Total revenues

Adjusted EBITDA

2016
Advertising and marketing services - external
sales

Circulation

Other

Total revenues

Adjusted EBITDA

Publishing

ReachLocal

Corporate and
Other

Intersegment
Eliminations

Consolidated

1,249,570

411,505

— $

1,661,075

61,647

1,063,022

185,324

2,559,563

361,497

—

411,505

47,895

—

7,417

(61,647)

—

1,063,022

192,741

7,417

(61,647) $

2,916,838

(87,661) $

— $

321,731

1,467,557

358,728

(52) $

— $

1,826,233

29,326

1,120,739

194,621

2,812,243

432,420

—

358,728

16,553

—

4,887

(29,326)

—

1,120,739

199,508

4,835

(29,326) $

3,146,480

(89,040) $

— $

359,933

1,602,845

110,144

— $

1,712,989

1,133,676

196,574

2,933,095

444,108

—

4,235

—

1,133,676

200,809

110,144

4,235

— $

3,047,474

(5,852) $

(78,361) $

— $

359,895

The following table presents our reconciliation of adjusted EBITDA to net income:

In thousands

Net income (GAAP basis)

Provision for income taxes

Interest expense

Other non-operating items, net

Operating income (GAAP basis)

Depreciation and amortization

Restructuring costs

Asset impairment charges

Acquisition-related items

Other items

2018

2017

2016

15,040

6,887

15,119

24,669

(26,066)

28,762

157,714

67,926

50,472

7,555

9,302

33,854

17,142

9,688

67,571

52,710

13,718

12,791

10,151

89,370

191,885

132,964

44,284

46,796

5,202

4,195

45,757

55,940

32,683

3,181

Adjusted EBITDA (non-GAAP basis)

321,731

359,933

359,895

Asset information by segment is not a key measure of performance used by the CODM. Accordingly, we have not
disclosed asset information by segment. Additionally, equity income in unconsolidated investees, net, interest expense, other
non-operating items, net, and provision for income taxes, as reported in the consolidated financial statements, are not part of
operating income and are primarily recorded at the corporate level.
101

NOTE 15 — Quarterly statements of income (unaudited)

Selected unaudited financial data for each quarter of the last two fiscal years is presented as follows:

In thousands, except per share amounts

Fiscal year ended December 31, 2018
Operating revenues

Operating income (loss)
Net income (loss)*

Per share computations
Earnings (loss) per share—basic

Earnings (loss) per share—diluted

Dividends per share

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Total

722,951

730,768

(339) $

(377) $

18,100

16,306

0.00

0.16

0.14

0.16

711,714

13,535

13,352

0.12

0.11

0.16

751,405

2,916,838

(2,534) $

(14,241) $

28,762

15,040

(0.13) $

0.16

0.13

0.64

Weighted average number of shares outstanding
Basic

112,756

Diluted
* Net income (loss) figures per the table above were impacted by the following:

112,756

112,946

116,219

113,047

116,271

113,126

112,970

115,751

•

Net loss for the first quarter of 2018 includes restructuring costs of $9.3 million, accelerated depreciation of $5.2 million, and asset impairment
charges of $3.8 million.
Net income for the second quarter of 2018 includes restructuring costs of $12.6 million, asset impairment charges of $10.5 million, and accelerated
depreciation of $4.2 million.
Net income for the third quarter of 2018 includes restructuring costs of $11.5 million, asset impairment charges of $1.7 million and accelerated
depreciation of $2.7 million.
Net loss for the fourth quarter of 2018 includes restructuring costs of $34.5 million, asset impairment charges $34.5 million, and accelerated
depreciation of $4.6 million.

In thousands, except per share amounts

Fiscal year ended December 31, 2017
Operating revenues

Operating income

Net income (loss)**

Per share computations
Earnings (loss) per share—basic

Earnings (loss) per share—diluted

Dividends per share

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Total

773,457

1,033

(2,079) $

774,507

10,504

(487) $

744,274

11,778

23,044

(0.02) $

0.16

(0.00) $

0.16

0.20

0.16

854,242

44,256

(13,591) $

3,146,480

67,571

6,887

(0.12) $

0.16

0.06

0.64

Weighted average number of shares outstanding
Basic

113,495

Diluted
** Net income (loss) figures per the table above were impacted by the following:

113,495

113,652

113,253

115,774

111,787

113,047

115,610

•
•

•

Net loss for the first quarter of 2017 includes restructuring costs of $12.6 million and accelerated depreciation of $9.8 million.
Net loss for the second quarter of 2017 includes asset impairment charges of $14.7 million, restructuring costs of $9.8 million, and accelerated
depreciation of $13.8 million.
Net income for the third quarter of 2017 includes restructuring costs of $5.8 million, accelerated depreciation of $14.0 million, and a net tax benefit
of $20.1 million related to a worthless stock and bad debt deduction for one of our ReachLocal international subsidiaries.
Net loss for the fourth quarter of 2017 includes asset impairment charges of $26.8 million, restructuring costs of $16.1 million, accelerated
depreciation of $6.4 million, tax expense of $42.8 million resulting from the revaluation of deferred tax assets and liabilities in connection with the
Tax Cuts and Jobs Act, tax expense of $7.7 million related to the revaluation of a deferred tax asset associated with a deferred intercompany
transaction, and an incremental tax benefit of $0.9 million related to the worthless stock and bad debt deduction.

NOTE 16 — Subsequent events

On February 27, 2019, the Board of Directors declared a dividend of $0.16 per share, payable on March 25, 2019, to

shareholders of record as of the close of business March 11, 2019.

102

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal

financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule
13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based on this evaluation,
our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were
effective as of the end of the period covered by this annual report.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such
term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal
control over financial reporting based on the framework in Internal Control - Integrated Framework (2013 framework) issued
by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation, our management
concluded that our internal control over financial reporting was effective as of December 31, 2018.

Management's assessment of and conclusion on the effectiveness of internal control over financial reporting did not include
the internal controls of WordStream, Inc., which was acquired in July 2018. We began consolidating the results of WordStream
in the 2018 consolidated financial statements of Gannett Co., Inc. in connection with the acquisition, which represented
approximately 7% of total assets at December 31, 2018 and 1% of total revenue for the year ended December 31, 2018. Due to
the timing of this acquisition and as permitted by SEC guidance, management excluded WordStream from its December 31,
2018 assessment of internal control over financial reporting.

The effectiveness of our internal control over financial reporting as of December 31, 2018, has been audited by Ernst &
Young LLP, an independent registered public accounting firm, as stated in its report which is included elsewhere in this item.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during our fiscal quarter ended
December 31, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.

103

Report of Independent Registered Public Accounting Firm

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

Opinion on Internal Control over Financial Reporting

We have audited Gannett Co., Inc.’s internal control over financial reporting as of December 31, 2018, based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework) (the COSO criteria). In our opinion, Gannett Co., Inc. (the Company) maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2018, based on the COSO criteria.

As indicated in the accompanying Management's Report on Internal Control Over Financial Reporting, management’s assessment of and
conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of WordStream, Inc.,
which is included in the 2018 consolidated financial statements of the Company and constituted 7% of total assets as of December 31,
2018 and 1% of revenue for the year then ended. Our audit of internal control over financial reporting of the Company also did not include
an evaluation of the internal control over financial reporting of WordStream, Inc.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
the consolidated balance sheets of Gannett Co., Inc. as of December 31, 2018 and 2017, the related consolidated statements of income,
comprehensive income (loss), equity and cash flows for each of the three fiscal years in the period ended December 31, 2018, and the
related notes and our report dated February 27, 2019 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control
Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based
on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such
other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations
of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Tysons, Virginia

February 27, 2019

104

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

PART III

The information captioned "The Nominees," "Audit Committee," and "Nominating and Public Responsibility Committee"

under the heading "PROPOSAL 1 – ELECTION OF DIRECTORS" and the information under the headings "ETHICS
POLICY" and "SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE" in our 2019 proxy statement is
incorporated herein by reference.

The following sets forth information regarding our executive officers as of the date of this Form 10-K.

Robert J. Dickey
President and Chief Executive Officer (June 2015-present). Formerly, prior to the separation: President, U.S. Community Publishing
(February 2008-2015); Senior Group President, Gannett's Pacific Group and Chairman of Phoenix Newspapers Inc. (2005-2008).
Age 61.

Alison K. Engel
Senior Vice President, Chief Financial Officer and Treasurer (June 2015-present). Formerly: Senior Vice President, Chief Financial
Officer and Treasurer of A. H. Belo Corporation (2008-2014). Age 48.

Kristopher Barton
Chief Product Officer (January 2019 to present). Formerly: Chief Product Officer, USA TODAY Network (November 2017 to January
2019); Chief Product Officer of ReachLocal, Inc. (February 2012 to November 2017); and Chief Operating Officer of Nero AG (2010
to 2012); Executive Vice President of Global Products of Nero (2006 to 2010). Age 43.

Kevin Gentzel
President, USA TODAY NETWORK Marketing Solutions (January 2019-present). Formerly: Chief Revenue Officer (July 2015 -
January 2019); Head of Advertising Sales, North America of Yahoo! (2014 to 2015); Chief Revenue Officer of The Washington Post
(2013 to 2014); Chief Revenue Officer of NDN (2012 to 2013); and Chief Revenue Officer at Forbes Media (2010 to 2012). Age 48.

David Harmon
Chief People Officer (July 2015-present). Formerly: Deputy Director and Chief Human Capital Officer of Federal Reserve Board
(2012-2015); and Executive Vice President, Human Resources of AOL Inc. (2007-2011). Age 51.

Alex Meza
Vice President of Corporate Development (May 2018-present). Formerly: VP, Corporate Development (2015 to 2018); and VP,
Finance, U.S. Community Publishing (2011-2015). Age 48.

Maribel Perez Wadsworth
President, USA TODAY NETWORK (November 2017-present). Formerly: Senior Vice President and Chief Transformation Officer
(January 2017-November 2017) and Senior Vice President and Chief Strategy Officer (June 2015-December 2016). Formerly, prior to
the separation: Vice President, Strategic Initiatives, U.S. Community Publishing (2014-2015); Vice President, Audience Development
and Engagement, U.S. Community Publishing (2012-2014). Age 46.

Henry Faure Walker
Chief Executive Officer of Newsquest Media Group (April 2014-present). Formerly: Digital Director of Johnston Press plc
(2010-2014); General Manager of Scotsman Publications Ltd. (2006-2010). Age 46.

Barbara Wall
Senior Vice President and Chief Legal Officer (June 2015-present). Formerly, prior to the separation: Vice President, Senior Associate
General Counsel and Chief Ethics Officer (2009-2015). Age 64.

Andy Yost
Chief Marketing Officer (June 2015-present). Formerly, prior to the separation: Senior Vice President, Consumer Marketing
(2014-2015); Senior Vice President, Marketing and Customer Relationship Management of Viacom Media Networks (2010-2014).
Age 53.

105

ITEM 11. EXECUTIVE COMPENSATION

The information under the headings "EXECUTIVE COMPENSATION," "DIRECTOR COMPENSATION,"
"OUTSTANDING DIRECTOR EQUITY AWARDS AT FISCAL YEAR-END," "COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION" and "RELATED TRANSACTIONS" in our 2019 proxy statement is
incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS

The information captioned "EQUITY COMPENSATION PLAN INFORMATION" and "SECURITIES BENEFICIALLY
OWNED BY DIRECTORS, EXECUTIVE OFFICERS AND PRINCIPAL SHAREHOLDERS" in our 2019 proxy statement is
incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information captioned "Director Independence" under the heading "PROPOSAL 1 – ELECTION OF DIRECTORS"
and the information under the headings "COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION"
and "RELATED TRANSACTIONS" in our 2019 proxy statement is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information under the heading "PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM" in our 2019 proxy statement is incorporated herein by reference.

106

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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

(1) Financial Statements.

As listed in the Index to Financial Statements and Supplementary Data on page 54.

(2) Financial Statement Schedules.

All schedules are omitted as the required information is not applicable or the information is presented in the consolidated

financial statements or related notes.

(3) Exhibits.

Exhibit
Number

Exhibit

Location

2-1

2-2

2-3

3-1

3-2

4-1

10-1

10-2

10-3

10-4

10-5

10-6

10-7

Separation and Distribution Agreement, dated as of June 26,
2015, by and between Parent and the Company.

Agreement and Plan of Merger, dated as of May 9, 2018, by
and among Gannett Co., Inc., Orca Merger Sub, Inc.,
WordStream, Inc. and Shareholder Representative Services
LLC.

Incorporated by reference to Exhibit 2-1 to the Company's
Registration Statement on Form S-3, filed by the Company
with the SEC on June 29, 2015.

Incorporated by reference to Exhibit 2.1 to the Company’s
Current Report on Form 8-K filed by the Company with the
SEC on May 10, 2018.

Letter Agreement, dated as of June 20, 2018, by and among
Gannett Co., Inc., Orca Merger Sub, Inc., WordStream, Inc.
and Shareholder Representative Services LLC.

Incorporated by reference to Exhibit 2.2 to the Company’s
Current Report on Form 8-K filed by the Company with the
SEC on July 2, 2018.

Amended and Restated Certificate of Incorporation of the
Company.

Amended and Restated Bylaws of the Company, effective
December 31, 2017.

Indenture (including Form of Note) with respect to Gannett
Co., Inc.’s 4.750% Convertible Senior Notes due 2024, dated
as of April 9, 2018, between Gannett Co., Inc. and U.S. Bank
National Association, as trustee.

Transition Services Agreement, dated as of June 26, 2015, by
and between Parent and the Company.

Tax Matters Agreement, dated as of June 26, 2015, by and
between Parent and the Company.

Employee Matters Agreement, dated as of June 26, 2015, by
and between Parent and the Company.*

Credit Agreement among the Company, the several lenders
from time to time party thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, PNC Bank, N.A. and U.S.
Bank, National Association, as Co-Syndication Agents, dated
as of June 29, 2015.

Incorporated by reference to Exhibit 3-1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June
26, 2016.

Incorporated by reference to Exhibit 3-1 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on December 14, 2017.

Incorporated by reference to Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed by the Company with the
SEC on April 9, 2018.

Incorporated by reference to Exhibit 10-1 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on June 30, 2015.

Incorporated by reference to Exhibit 10-2 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on June 30, 2015.

Incorporated by reference to Exhibit 10-1 to the Company's
Registration Statement on Form S-3, filed by the Company
with the SEC on June 29, 2015.

Incorporated by reference to Exhibit 10-4 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on June 30, 2015.

Security Agreement, made by the Company and certain of its
Subsidiaries, in favor of JPMorgan Chase Bank, N.A., as
Administrative Agent, dated as of June 29, 2015.

Incorporated by reference to Exhibit 10-5 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on June 30, 2015.

Trademark Security Agreement, dated as of June 29, 2015,
by the Company and certain of its Subsidiaries, in favor of
JPMorgan Chase Bank, N.A., as Administrative Agent.

Incorporated by reference to Exhibit 10-6 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on June 30, 2015.

Guarantee Agreement made by the Subsidiary Guarantors
listed on the signature page thereto in favor of JPMorgan
Chase Bank, N.A., as Administrative Agent, dated as of June
29, 2015.

Incorporated by reference to Exhibit 10-7 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on June 30, 2015.

10-8

Form of Mortgage.

Incorporated by reference to Exhibit 10-24 to the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 27, 2015.

107

10-9

Form of Deed of Trust.

Incorporated by reference to Exhibit 10-25 to the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 27, 2015.

10-10

10-11

10-12

10-13

10-14

10-15

10-16

10-17

10-18

10-19

10-20

10-21

Schedule of Mortgages or Deeds of Trust Granted by
Gannett Subsidiaries.

Filed herewith.

First Amendment to the Credit Agreement.

2015 Deferred Compensation Plan Rules for Pre-2005
Deferrals.*

Amendment No. 1 to 2015 Deferred Compensation Plan
Rules for Pre-2005 Deferrals.*

Incorporated by reference to Exhibit 10-27 to the Company's
Annual Report on Form 10-K, filed by the Company with
the SEC on February 25, 2016.

Incorporated by reference to Exhibit 10-8 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on June 30, 2015.

Incorporated by reference to Exhibit 10-2 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on June 6, 2017.

Gannett Co., Inc. 2015 Deferred Compensation Plan Rules
for Pre-2005 Deferrals, Amendment No. 2, effective as of
July 31, 2018.*

Incorporated by reference to Exhibit 10.2 to the Company's
Current Report on Form 8-K filed by the Company with the
SEC on August 1, 2018.

Gannett Co., Inc. 2015 Deferred Compensation Plan Rules
for Pre-2005 Deferrals, Amendment No. 3, effective as of
October 17, 2018.*

Incorporated by reference to Exhibit 10-4 to the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 2018.

2015 Deferred Compensation Plan Rules for Post-2004
Deferrals.*

Amendment No. 1 to 2015 Deferred Compensation Plan
Rules for Post-2004 Deferrals.*

Amendment No. 2 to 2015 Deferred Compensation Plan
Rules for Post-2004 Deferrals.*

Incorporated by reference to Exhibit 10-9 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on June 30, 2015.

Incorporated by reference to Exhibit 10-1 to the Company's
Current Report on Form 8-K filed by the Company with the
SEC on December 2, 2016.

Incorporated by reference to Exhibit 10-1 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on June 6, 2017.

Gannett Co., Inc. 2015 Deferred Compensation Plan Rules
for Post-2004 Deferrals, Amendment No. 3, effective as of
July 31, 2018.*

Incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K filed by the Company with the
SEC on August 1, 2018.

Gannett Co., Inc. 2015 Deferred Compensation Plan Rules
for Post-2004 Deferrals, Amendment No. 4, effective as of
October 17, 2018.*

Incorporated by reference to Exhibit 10-2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 2018.

Gannett Co., Inc. 2015 Deferred Compensation Plan Rules
for Post-2004 Deferrals, Amendment No. 5, effective as of
December 7, 2018.*

Filed herewith.

10-22

2015 Supplemental Retirement Plan.*

10-23

Supplemental Executive Medical Plan.*

10-24

10-25

Supplemental Executive Medical Plan for Retired
Executives.*

Amendment No. 1 to Supplemental Executive Medical Plan
for Retired Executives.*

10-26

2015 Key Executive Life Insurance Plan.*

10-27

2015 Key Executive Life Insurance Plan Participation
Agreement.*

10-28

2015 Omnibus Incentive Compensation Plan.*

10-29

10-30

Amendment No. 1 to 2015 Omnibus Incentive
Compensation Plan.*

Amendment No. 2 to 2015 Omnibus Incentive
Compensation Plan.*

Incorporated by reference to Exhibit 10-10 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on June 30, 2015.

Incorporated by reference to Exhibit 10-11 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on June 30, 2015.

Incorporated by reference to Exhibit 10-12 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on June 30, 2015.

Incorporated by reference to Exhibit 10-20 to the Company's
Annual Report on Form 10-K, filed by the Company with
the SEC on February 22, 2017.

Incorporated by reference to Exhibit 10-13 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on June 30, 2015.

Incorporated by reference to Exhibit 10-14 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on June 30, 2015.

Incorporated by reference to Exhibit 4-1 to the Company's
Registration Statement on Form S-3, filed by the Company
with the SEC on June 29, 2015.

Incorporated by reference to Exhibit 10-1 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on May 11, 2017.

Incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K filed by the Company with the
SEC on May 9, 2018.

108

10-34

10-35

10-36

10-37

10-38

10-39

10-40

10-41

10-42

10-43

10-31

Letter Agreement with Robert J. Dickey.*

10-32

Transition Services Agreement, dated November 30, 2018,
by and between Gannett Co., Inc. and Robert J. Dickey.*

10-33

Letter Agreement with Alison K. Engel.*

Letter Agreement between Gannett Co., Inc. and Sharon T.
Rowlands.*

Amendment No. 1 to Letter Agreement between Gannett
Co., Inc. and Sharon T. Rowlands.*

Employment Letter between ReachLocal, Inc. and Sharon T.
Rowlands, dated March 31, 2014.*

Amendment to Employment Letter between ReachLocal,
Inc. and Sharon T. Rowlands, dated November 1, 2015.*

Amendment to Employment Letter between ReachLocal,
Inc. and Sharon T. Rowlands, effective August 9, 2016.*

Letter Agreement, dated January 7, 2019, between Gannett
Co., Inc. and Kevin Gentzel.*

Incorporated by reference to Exhibit 10-15 to the Company's
Registration Statement on Form 10, filed by the Company
with the SEC on June 9, 2015.

Incorporated by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K filed by the Company with the
SEC on December 6, 2018.

Incorporated by reference to Exhibit 10-16 to the Company's
Registration Statement on Form 10, filed by the Company
with the SEC on June 9, 2015.

Incorporated by reference to Exhibit 10-29 to the Company's
Annual Report on Form 10-K, filed by the Company with
the SEC on February 22, 2017.

Incorporated by reference to Exhibit 10-1 to the Company's
Current Report on Form 8-K, filed by the Company with the
SEC on November 13, 2017.

Incorporated by reference to Exhibit 10-1 of the Current
Report on Form 8-K filed by ReachLocal, Inc. with the SEC
on April 2, 2014.

Incorporated by reference to Exhibit 10-1 of the Quarterly
Report on Form 10-Q for the quarter ended September 30,
2015 filed by ReachLocal, Inc. with the SEC on November
9, 2015.

Incorporated by reference to Exhibit 10-32 to the Company's
Annual Report on Form 10-K, filed by the Company with
the SEC on February 22, 2017.

Incorporated by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K filed by the Company with the
SEC on January 11, 2019.

Employment Retention Agreement, dated as of January 15,
2019, by and between Gannett Co., Inc. and Alison K.
Engel.*

Incorporated by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K filed by the Company with the
SEC on January 18, 2019.

Employment Retention Agreement, dated as of November
30, 2018, by and between Gannett Co., Inc. and Barbara W.
Wall.*

Incorporated by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K filed by the Company with the
SEC on December 7, 2018.

Employment Retention Agreement, dated as of January 15,
2019, by and between Gannett Co., Inc. and Barbara W.
Wall.*

Incorporated by reference to Exhibit 10.2 to the Company’s
Current Report on Form 8-K filed by the Company with the
SEC on January 18, 2019.

Employment Contract between Newsquest Media Group
Limited and Henry Faure Walker.*

10-44

Termination Benefits Agreement with Lawrence S. Kramer.*

10-45

Agreement and Release with Lawrence S. Kramer.*

10-46

Form of Director RSU Award Agreement.*

10-47

10-48

10-49

10-50

10-51

Form of Executive Officer Restricted Stock Unit Award
Agreement (2016).*

Form of Executive Officer Restricted Stock Unit Award
Agreement (2018).*

Form of Executive Officer Restricted Stock Unit Award
Agreement (2019).*

Form of Executive Officer Performance Share Unit Award
Agreement (2016).*

Form of Executive Officer Performance Share Unit Award
Agreement (2018).*

109

Incorporated by reference to Exhibit 10-36 to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 27, 2015.

Incorporated by reference to Exhibit 10-19 to the Company's
Registration Statement on Form 10, filed by the Company
with the SEC on June 9, 2015.

Incorporated by reference to Exhibit 10-20 to the Company's
Registration Statement on Form 10, filed by the Company
with the SEC on June 9, 2015.

Incorporated by reference to Exhibit 10-1 to the Company's
Current Report on Form 8-K filed by the Company with the
SEC on July 30, 2015.

Incorporated by reference to Exhibit 10-3 to the Company's
Current Report on Form 8-K filed by the Company with the
SEC on December 14, 2015.

Incorporated by reference to Exhibit 10-2 to the Company's
Current Report on Form 8-K filed by the Company with the
SEC on December 14, 2017.

Incorporated by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K filed by the Company with the
SEC on December 12, 2018.

Incorporated by reference to Exhibit 10-4 to the Company's
Current Report on Form 8-K filed by the Company with the
SEC on December 14, 2015.

Incorporated by reference to Exhibit 10-1 to the Company's
Current Report on Form 8-K filed by the Company with the
SEC on December 14, 2017.

10-52

10-53

10-54

10-55

10-56

Form of Executive Officer Performance Share Unit Award
Agreement (2019).*

Form of Executive Officer Cash Performance Unit Award
Agreement (2018).*

Form of Executive Officer Performance Unit Award
Agreement (2019).*

Form of Retention RSU Award Agreement with Sharon T.
Rowlands.*

Form of Retention Cash Award Agreement with Sharon T.
Rowlands.*

10-57

2015 Change in Control Severance Plan, as amended.

Incorporated by reference to Exhibit 10.2 to the Company’s
Current Report on Form 8-K filed by the Company with the
SEC on December 12, 2018.

Incorporated by reference to Exhibit 10-3 to the Company's
Current Report on Form 8-K filed by the Company with the
SEC on December 14, 2017.

Incorporated by reference to Exhibit 10.3 to the Company’s
Current Report on Form 8-K filed by the Company with the
SEC on December 12, 2018.

Incorporated by reference to Exhibit 10-42 to the Company's
Annual Report on Form 10-K, filed by the Company with
the SEC on February 22, 2017.

Incorporated by reference to Exhibit 10-43 to the Company's
Annual Report on Form 10-K, filed by the Company with
the SEC on February 22, 2017.

Incorporated by reference to Exhibit 10-3 to the Company's
Quarterly Report on Form 10-Q filed by the Company with
the SEC on August 3, 2017.

10-58

10-59

10-60

10-61

21-1

31-1

31-2

32-1

32-2

101

Amended and Restated Executive Severance Plan, effective
as of December 7, 2018.

Filed herewith.

Form of Indemnification Agreement.

Incorporated by reference to Exhibit 10-1 to the Company's
Current Report on Form 8-K filed by the Company with the
SEC on December 14, 2015.

Gannett Co., Inc. Clawback Policy, effective December 9,
2015, as amended as of December 7, 2018.

Filed herewith.

Summary of Non-Employee Director Compensation.*

Incorporated by reference to the Company's definitive Proxy
Statement on Schedule 14A filed by the Company with the
SEC on March 23, 2018.

List of subsidiaries.

Attached.

Consent of Independent Registered Public Accounting Firm.

Attached.

Rule 13a-14(a) Certification of CEO.

Rule 13a-14(a) Certification of CFO.

Section 1350 Certification of CEO.

Section 1350 Certification of CFO.

The following financial information from Gannett Co., Inc.
Annual Report on Form 10-K for the year ended December
31, 2018, formatted in XBRL includes: (i) Consolidated
Balance Sheets at December 31, 2018 and December 31,
2017; (ii) Consolidated Statements of Income for the 2018,
2017 and 2016 fiscal years; (iii) Consolidated Statements of
Comprehensive Income (Loss) for the 2018, 2017 and 2016
fiscal years; (iv) Consolidated Cash Flow Statements for the
2018, 2017 and 2016 fiscal years; (v) Consolidated
Statements of Equity for the 2018, 2017 and 2016 fiscal
years; and (vi) the Notes to Consolidated Financial
Statements.

We agree 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 our total
consolidated assets.

* Asterisks identify management contracts and compensatory plans or arrangements.

ITEM 16. FORM 10-K SUMMARY

None.

110

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 27, 2019 GANNETT CO., INC. (Registrant)

By:

/s/ Alison K. Engel
Alison K. Engel

Senior Vice President, Chief

Financial Officer and Treasurer
(principal financial officer)

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 27, 2019

/s/ Robert J. Dickey
Robert J. Dickey

President and Chief Executive

Officer (principal executive
officer)

/s/ Alison K. Engel
Alison K. Engel

Senior Vice President, Chief

Financial Officer and Treasurer
(principal financial officer)

/s/ Lori C. Locke
Lori C. Locke

Vice President and Controller

(principal accounting officer)

Dated: February 27, 2019

/s/ John E. Cody

John E. Cody, Director

Dated: February 27, 2019

/s/ Stephen W. Coll

Stephen W. Coll, Director

Dated: February 27, 2019

/s/ Robert J. Dickey

Robert J. Dickey, Director

Dated: February 27, 2019

/s/ Donald E. Felsinger

Donald E. Felsinger, Director

Dated: February 27, 2019

/s/ Lila Ibrahim

Lila Ibrahim, Director

Dated: February 27, 2019

/s/ Lawrence S. Kramer

Lawrence S. Kramer, Director

Dated: February 27, 2019

/s/ John Jeffry Louis

John Jeffry Louis

Director, Chairman

Dated: February 27, 2019

/s/ Tony A. Prophet

Tony A. Prophet, Director

Dated: February 27, 2019

/s/ Debra A. Sandler

Debra A. Sandler, Director

Dated: February 27, 2019

/s/ Chloe R. Sladden

Chloe R. Sladden, Director

111

This page is left intentionally blank

S
T
N
E
T
N
O
C

01 | Company Profile

02 | Letter to Shareholders

04 | Board of Directors

SHAREHOLDER SERVICES

GANNETT STOCK

FINANCE

Ali Engel

Senior Vice President,

Chief Financial Officer and Treasurer

CORPORATE GOVERNANCE

For information about Gannett’s practices, programs and policies concerning
environmental, social and governance matters, go to www.gannett.com/
corporate-responsibility.

FOR MORE INFORMATION

MEDIA RELATIONS

Amber Allman

Vice President, Corporate Events

and Communications

THIS REPORT WAS WRITTEN

AND PRODUCED BY

EMPLOYEES OF GANNETT.

Printing
Action Printing, Fond du Lac, WI

Printed on recycled paper.

Gannett is committed to sustainability.

The annual report is printed on

Forestry Stewardship Council (FSC)

certified paper from managed forests

and is printed with soy-based ink. We

also embrace a digital workflow to

reduce paper use.

GANNETT HEADQUARTERS

7950 Jones Branch Drive
McLean, VA 22107
703-854-6000

INVESTOR RELATIONS

Stacy Cunningham
Vice President, Financial Planning & Investor Relations
investors@gannett.com
703-854-3168

2
0
1
8
A
n
n
u
a

R
e
p
o
r
t

G
a
n
n
e
t
t
C
o

.
,

n
c
.

Gannett Co., Inc.
7950 Jones Branch Dr.
McLean, VA 22107

gannett.com