Annual Report
About Us
Gannett Co., Inc. (“Gannett”, “we”, “us”, “our”, or the “Company”) is a diversified media company with
expansive reach at the national and local level dedicated to empowering and enriching communities.
We seek to inspire, inform, and connect audiences as a sustainable, growth focused media and digital
marketing solutions company. We endeavor to deliver essential content, marketing solutions, and
experiences for curated audiences, advertisers, consumers, and stakeholders by leveraging our diverse
teams and suite of products to enrich the local communities and businesses we serve.
96
Pulitzer Prizes
won since 1918
~187
million
monthly unique visitors, on
average(1)
OVER 80%
of our daily media brands
domestically have been published
for more than 100 years
A reach of
~ 1 in 2 adults
in the U.S.
through our
USA TODAY
NETWORK(3)
million
digital-only paid
subscriptions in 2023
15+
thousand
average monthly DMS core
platform customers in 2023(2)
$1.1
billion
in total digital revenues in 2023
or 39% of total revenues
Our Portfolio
Our current portfolio of trusted media
brands includes the USA TODAY NETWORK,
comprised of the national publication, USA
TODAY, and local media organizations in the
United States (the “U.S.”), and Newsquest,
a wholly-owned subsidiary operating in the
United Kingdom (the “U.K.”). Our digital
marketing solutions brand, LocaliQ, uses
innovation and software to enable small
and medium-sized businesses to grow,
and USA TODAY NETWORK Ventures, our
events division, creates impactful consumer
engagements, promotions, and races.
Our Commitment
Through USA TODAY, our network of local
properties, and Newsquest, we deliver high-
quality, trusted content with a commitment
to balanced, unbiased journalism, where
and when consumers want to engage. We
have strong relationships with hundreds of
thousands of local and national businesses
in both our U.S. and U.K. markets due to our
large local and national sales forces and a
robust advertising and digital marketing
solutions product suite. Our strategy
prioritizes maximizing the monetization
of our audience through the growth of
increasingly diverse and highly recurring
digital businesses. We expect the execution
of this strategy to enable us to continue our
evolution to a predominantly digital media
company. We deliver value to our customers,
advertisers, partners and shareholders with
essential content, joyful experiences, and
relevant digital solutions.
(1) Approximately 187 million average monthly unique visitors in 2023 with approximately 136 million average monthly unique visitors coming from our USA TODAY NETWORK
(based on December 2023 Comscore Media Metrix®) and approximately 51 million average monthly unique visitors resulting from our U.K. digital properties (based on Adobe
Analytics).
(2) Core platform customers is defined as customers utilizing the Company’s proprietary digital marketing services platform that are sold by either our direct or local market
teams.
(3) Based on December 2023 Comscore Media Metrix®.
Letter to Shareholders
Dear Shareholders,
As a diversified media company with expansive reach, our goal is to empower communities to thrive.
Gannett achieves this by inspiring, informing and connecting audiences as a sustainable, growth-
focused media and digital marketing solutions company. We seek to drive audience growth and
engagement by delivering broad content experiences to our consumers, while offering the products and
marketing expertise our advertisers desire. The Company’s strategy prioritizes recurring digital revenue
growth, which is expected to lead to sustainable total revenue growth. Our anticipated growth extends
beyond subscription relationships and involves driving audience growth through a more relevant and
diversified portfolio, creating experiences and joyful content with various monetization opportunities,
while maintaining a focus on the continued execution of our digital marketing solutions business.
The execution of this strategy is expected to enable us to continue our evolution to a predominately
digital media company. As a result, we are experiencing solid progress in our digital businesses, with
total digital revenues of over $1 billion in 2023, by expanding our audience and increasing engagement,
as well as improving the overall monetization of our audience. Equally important, our Digital Marketing
Solutions (“DMS”) business continues to showcase remarkable resilience with continued growth in 2023
and strong fundamentals across several key metrics.
Moving forward, we intend to create stockholder value through a variety of methods, including organic
growth driven by our consumer and business-to-business strategies, as well as through paying down
debt to strengthen our capital structure.
The four key operating pillars of our strategy include:
1. Stable foundation for ongoing growth
2. Expanded reach with our customer segments
3. Diversified digital revenues
4. Foundational commitment to environmental, social and governance matters that impact our
customers and communities
Operational Highlights:
We continued to make notable progress across our digital businesses in 2023. Our digital revenue
strategy is rooted in audience expansion and increased engagement, as well as growing diversified
platform monetization at each point in the consumer journey. We believe the greatest revenue
opportunity lies in a comprehensive monetization strategy that maximizes revenue across the
entire spectrum of our 187 million average monthly unique visitors(1). Gannett serves an engaged
and expanding audience, which we believe offers us great potential for diversified, predictable and
repeatable revenue growth.
In 2023, Gannett grew its audience and engagement and continues to leverage data and AI to better
engage with our audience. We believe we are well positioned to translate this growth into more
advertising opportunities, more digital subscription opportunities, and further monetization through
our growing partnership portfolio. In 2023, we refined our subscription acquisition efforts to attract
and retain highly engaged, long-term and more profitable subscribers. This renewed focus on a more
strategic acquisition and pricing model resulted in new highs in digital-only subscription revenue and
digital-only average revenue per user (“ARPU”) in the fourth quarter of 2023. We believe we have
continued upside in both areas as we maintain our focus on smarter customer acquisition, in-depth local
Letter to Shareholders
content, and effective pricing strategies. Equally impressive, our initiatives around audience expansion
and increased engagement led to the best quarterly performance in our digital advertising business in
the fourth quarter of 2023.
Another key component to translate audience growth into increased monetization per user is
partnerships. We made great strides with partnerships in 2023 as we aligned with brands that share
our values, provide valuable content to our users and allow us to further diversify the monetization of
our audience and content platform. Our five announced partnerships in 2023 have created a new digital
revenue stream with significant potential and at a very high margin, which has become immediately
accretive to our total revenue and free cash flow. While we expect to launch new partnerships in
2024, the more substantial revenue growth is expected to come from scaling our existing portfolio of
partnerships, further embedding the content across our platform, and driving increased engagement.
In parallel to the digital revenue growth in our media properties is the growth of our DMS business.
Our DMS business continued to operate at a high level in 2023 with more than $475 million of highly
recurring revenue, double-digit Adjusted EBITDA margins, healthy ARPU, and customer budget
retention rates over 95%. Our strategic plan for 2024 involves continuing to optimize and grow our
core DMS solutions through new verticals while at the same time expanding our product portfolio with
AI-powered software solutions, which we believe will increase our total addressable market and core
platform revenue.
We believe the foundation for stability, and the fuel for investment in digital growth, is enabled through
the continued optimization of our traditional print businesses. Our results in print subscription revenue
continued to showcase promising improvements driven by the actions we have implemented to enhance
the subscriber experience. As a result, our service levels and the percentage of open routes are at their
best levels in two years, while the conversion to mail delivery has proven to be a consistent and effective
delivery model to our consumers in the areas where staffing delivery routes is more of a persistent
challenge.
We believe our employees are our greatest asset and the foundation of our business is the people
and employees who make our day-to-day operations possible. Inclusion, diversity, and equity (“ID&E”)
are core pillars of our organization and in 2023 we continued to make great strides. In early 2024, we
published our fourth installment of an annual report focused on our ID&E efforts. The 2023 Inclusion
Report outlined then-current workforce diversity data, Gannett’s inclusion goals that reach into 2025, as
well as the steps we are taking to achieve our goals.
Gannett remains consistent, committed, and intentional in our quest to be a leader in ID&E. In 2023,
Gannett was recognized in the 2023 Best Places to Work for LGBTQ Equality. In 2023, for the sixth year
in a row, Gannett received a perfect score of 100 on the Corporate Equality Index, the nation’s premier
benchmarking survey and report measuring corporate policies and practices related to LGBTQ workplace
equality and inclusion. Gannett was also recognized for the third time by Forbes as one of America’s Best
Employers for Diversity. In addition, Gannett is a proud Gold recipient of Mental Health America’s Bell
Seal for Workplace Mental Health, awarded for our commitment to employee mental health and well-
being.
As a leading media organization, our longstanding corporate social responsibility position is driven by
our deep commitment to our communities. We are dedicated to ensuring that we have mindful and
ethical business practices that positively impact our world. In early 2024, we published our 2024 ESG
Report detailing the progress we made on our U.N. Sustainable Development Goals (“U.N. SDGs”) that
include Reduced Inequalities, Climate Action, and Peace, Justice, and Strong Institutions. The 2024
ESG Report included noteworthy highlights such as improvements to our workplace diversity, further
reductions in our total paper consumption, and the successful completion of our inaugural climate
disclosure project questionnaires for climate change and forests.
Letter to Shareholders
Gannett is committed to ensuring our coverage is widely available, actively promoted across our media
sites and marketed to our millions of registered users. In January 2024, we published our network-wide
2023 Journalism Impact Report, which highlighted what we believe are the most influential articles we
produced in 2023 and covers topics such as coverage on ID&E, as well as climate change. The Company
commits to the ongoing publishing of an annual network-wide Journalism Impact Report, which
surfaces the top stories we produced that led to action.
Debt Paydown:
In 2023 we continued to optimize our capital structure and repaid approximately $142 million of debt,
reducing our first lien net leverage by approximately 25% in 2023 to 2.0x. We continue to focus on
debt reduction and improvement in our capital structure and during 2024 we anticipate debt reduction
of approximately $110 million through non-strategic asset dispositions and continued free cash flow
improvement.
2024 and Beyond:
We made excellent progress executing on our strategy to drive our digital transformation in 2023. Over
the past year, we’ve expanded our digital audience, improved engagement, grown the monetization
of our audience, and driven significantly improved financial results over the prior year. As these results
show, we are building momentum toward a sustainable digital growth business, with a strong balance
sheet. We have a top tier, passionate leadership team, a dynamic content strategy, and a growing DMS
business. We feel the momentum shifting at Gannett and we are heading into 2024 with incredible
optimism.
Sincerely,
Michael E. Reed
Chairman and Chief Executive Officer
April 1, 2024
Cautionary Note Regarding Forward-Looking Statements: Certain items herein may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding
our business outlook, digital revenue performance and growth, growth in our DMS segment, our total addressable market, core
platform revenue, growth of and demand for our digital-only subscriptions, digital marketing and advertising services, digital-
only subscription revenue, audience growth, monetization strategy and opportunities, expectations regarding our free cash flows,
revenues, cash flows, expectations regarding our growth rate, including growth in revenues and Adjusted EBITDA, our ability to
create stockholder value, our expectations, in terms of both amount and timing, with respect to debt repayment, real estate and
other non-strategic asset sales, economic impacts, our capital structure, our strategy, our environmental, social, and governance
goals, our partnerships, our ability to achieve our operating priorities, growth of ARPU, our long-term opportunities, and future
revenue trends and our ability to influence trends. Words such as “expect(s)”, “plan(s)”, “believes(s)”, “anticipate”, “will”, “seek “,
“intend”, “goal”, “should”, and similar expressions are intended to identify such forward-looking statements. These statements are
based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties. These and other
risks and uncertainties could cause actual results to differ materially from those described in the forward-looking statements, many
of which are beyond our control. The Company can give no assurance its expectations will be attained. Accordingly, you should
not place undue reliance on any forward-looking statements contained herein. For a discussion of some of the risks and important
factors that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed
from time to time in the Company’s most recent Annual Report on Form 10-K, our quarterly reports on Form 10-Q, and our other
filings with the Securities and Exchange Commission. Furthermore, new risks and uncertainties emerge from time to time, and it is
not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those
contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this Annual Report.
Except to the extent required by law, the Company expressly disclaims any obligation to release publicly any updates or revisions
to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or
change in events, conditions or circumstances on which any statement is based.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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, 2023
☐ 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 001-36097
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)
38-3910250
(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
Trading Symbol
GCI
Name of Each Exchange on Which Registered
The New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company,"
and "emerging growth company" in Rule 12b-2 of the Exchange Act:
Large accelerated filer
☐
Accelerated filer
☒
Non-accelerated filer
☐
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ☐ No ☒
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 30, 2023 was approximately $320.4 million. The registrant
has no non-voting common equity.
As of February 16, 2024, 148,814,354 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 Stockholders for 2024 is incorporated by reference in Part III
to the extent described therein.
INDEX TO GANNETT CO., INC.
2023 FORM 10-K
Cautionary Note Regarding Forward-Looking Statements
Part I
Item 1.
Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 1C. Cybersecurity
Item 2.
Item 3.
Properties
Legal Proceedings
Item 4. Mine Safety Disclosures
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Item 6.
[Reserved]
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Item 8.
Item 9.
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Part III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
Item 14.
Part IV
Item 15. Exhibits and Financial Statement Schedules
Item 16.
Form 10-K Summary
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K, including "Item 1 — Business," "Item 1A — Risk Factors" and "Item 7 —
Management's Discussion and Analysis of Financial Condition and Results of Operations," contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our current
views regarding, among other things, our future growth, results of operations, performance, business prospects and
opportunities, and our environmental, social and governance goals, and are not statements of historical fact. Words such as
"anticipate(s)," "expect(s)," "intend(s)," "plan(s)," target(s)," "strive(s)," "forecast, " "goal," "project," "believe(s)," "will,"
"aim," "would," "could," "can," "may," "seek(s)," "estimate(s)" and similar expressions are intended to identify such forward-
looking statements.
Forward-looking statements are based on management's current expectations and beliefs and are subject to a number of
known and unknown risks, uncertainties, and other factors that could lead to actual results materially different from those
described in the forward-looking statements. We can give no assurance our expectations will be attained. Our actual results,
liquidity, and financial condition may differ from the anticipated results, liquidity, and financial condition indicated in the
forward-looking statements. Forward-looking statements are not a guarantee of future performance and involve risks and
uncertainties, and there are certain important factors that could cause our actual results to differ, possibly materially, from
expectations or estimates reflected in such forward-looking statements, including, among others, the risks identified by us under
the heading "Risk Factors" in Item 1A of this report, as well as other risks and factors identified from time to time in our
subsequent filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on any such
forward-looking statements, which speak only as of the date they are made. Except to the extent required by law, we expressly
disclaim any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to
reflect any change in our expectations with regard thereto or change in events, conditions, or circumstances on which any
statement is based.
3
Table of Contents
ITEM 1. BUSINESS
Overview
PART I
Gannett Co., Inc. ("Gannett", "we", "us", "our", or the "Company") is a diversified media company with expansive reach at
the national and local level dedicated to empowering and enriching communities. We seek to inspire, inform, and connect
audiences as a sustainable, growth focused media and digital marketing solutions company. We endeavor to deliver essential
content, marketing solutions, and experiences for curated audiences, advertisers, consumers, and stakeholders by leveraging our
diverse teams and suite of products to enrich the local communities and businesses we serve.
Our current portfolio of trusted media brands includes the USA TODAY NETWORK, comprised of the national
publication, USA TODAY, and local media organizations in the United States (the "U.S."), and Newsquest, a wholly-owned
subsidiary operating in the United Kingdom (the "U.K."). Our digital marketing solutions brand, LocaliQ, uses innovation and
software to enable small and medium-sized businesses ("SMBs") to grow, and USA TODAY NETWORK Ventures, our events
division, creates impactful consumer engagements, promotions, and races.
Through USA TODAY, our network of local properties, and Newsquest, we deliver high-quality, trusted content with a
commitment to balanced, unbiased journalism, where and when consumers want to engage. We have strong relationships with
hundreds of thousands of local and national businesses in both our U.S. and U.K. markets due to our large local and national
sales forces and a robust advertising and digital marketing solutions product suite. Our strategy prioritizes maximizing the
monetization of our audience through the growth of increasingly diverse and highly recurring digital businesses. We expect the
execution of this strategy to enable us to continue our evolution to a predominantly digital media company. We deliver value to
our customers, advertisers, partners and shareholders with essential content, joyful experiences, and relevant digital solutions.
We report in three segments: Domestic Gannett Media, Newsquest and Digital Marketing Solutions ("DMS"). We also
have a Corporate and other category that includes activities not directly attributable to a specific reportable segment and
includes broad corporate functions, such as legal, human resources, accounting, analytics, finance, marketing and technology,
as well as other general business costs. Effective with the fourth quarter of 2023, the Company is reporting financial
information for its Newsquest business in a separate segment. Previously, the financial information for this segment was
aggregated with Domestic Gannett Media and, together, formed the Gannett Media reportable segment. As a result, the
Company has revised its historical disclosures to reflect the new Domestic Gannett Media and Newsquest reportable segments
for all years presented. A full description of our reportable segments is included in Note 14 — Segment reporting in the notes to
the Consolidated financial statements.
The Company has prioritized growing our digital audience through investments in content, data, marketing and product to
enhance our products and further align with digital preferences of consumers and marketers. In 2023, total digital revenues,
which includes Digital advertising and marketing services revenues, Digital-only subscription revenues, and Other Digital
revenues, including digital syndication, affiliate, production and licensing revenues, grew to $1.1 billion, or 39% of our total
revenues. With approximately two million paid digital-only subscribers as of December 31, 2023, our paid digital-digital
subscriptions outnumber our print subscriptions. Our U.S. media network, which includes USA TODAY and our network of
local properties, averaged approximately 136 million(a) unique visitors monthly during 2023 to our digital platforms. In the
U.K., Newsquest is a publishing and digital leader with a network of websites that averaged approximately 51 million(b) unique
visitors monthly during 2023. In total, we averaged 187 million(a)(b) unique visitors across both the Domestic Gannett Media and
Newsquest segments during 2023.
We are committed to a diversified media strategy that is expected to create a stable foundation for revenue and profit
growth. The Company's strategy prioritizes recurring digital revenue growth, which is expected to lead to sustainable total
revenue growth. Our anticipated growth extends beyond subscription relationships and involves driving audience growth
through a more relevant and diversified portfolio, creating experiences and joyful content with various monetization
opportunities, while maintaining a focus on the continued execution of our DMS business.
We believe that a number of factors and industry trends have, and will continue to, present risks and challenges to our
business. For a detailed discussion of certain factors that could affect our business, results of operations and financial condition,
see "Item 1A — Risk Factors."
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Table of Contents
Domestic Gannett Media Segment
Our Domestic Gannett Media segment is comprised of USA TODAY, daily and weekly content brands in approximately
220 local U.S. markets across 43 states and our community events business, USA TODAY NETWORK Ventures. As of
December 31, 2023, we operated approximately 340 digital news and media brands across our portfolio.
Our core print offerings include: (i) home delivery offered on a subscription basis ("home delivery"), (ii) single copy, and
(iii) non-daily publications (i.e., shoppers and niche publications).
Many of our publications are located in small and mid-size markets where we are often the primary provider of
comprehensive local market news and information. Our content is primarily devoted to topics we believe are essential and
highly relevant to our audiences, such as local news and politics, community and regional events, health and wellness, personal
finance, youth sports, local schools, obituaries, and crime news.
To support the ongoing digital transformation among our portfolio of products, the Company frequently evaluates the
frequency, number, and types of products within each publication type. Strategies for reaching our over 100 million monthly
print and digital consumers evolve as the audience becomes more digital. The number of products within each publication type
shifts regularly as the Company identifies opportunities to best serve consumer and advertiser needs.
Our digital-only subscription offerings include the following products: (i) local media brands, (ii) USA TODAY, (iii)
sports, and (iv) games.
In addition to our core print and digital-only subscription offerings, we provide access to Electronic-Editions ("E-
Newspapers") to all subscribers of home delivery in Domestic Gannett Media markets. Our E-Newspapers are digital replicas of
our print editions and contain the same news coverage, sports coverage, puzzles, and games. In addition, the E-Newspapers
allow subscribers to read and browse different sections across our portfolio of brands, clip and share articles with friends and
family, adjust text size, and access previous editions published within the last 30 days. We believe the transition to E-
Newspapers enhances the subscriber experience, leads the consumer through the print to digital continuum, and provides an
opportunity to expand the total addressable market for print advertisers.
More than 80% of our daily media brands domestically have been published for more than 100 years. We believe the
longevity of our publications demonstrates the value and relevance of the local information we provide and has created a strong
foundation of reader loyalty and a highly-recognized media brand name in each community we serve.
We reach a large, diverse audience through our print and digital daily and non-daily publications throughout the U.S. As of
December 31, 2023, our journalism network is powered by an integrated and award-winning news organization comprised of
approximately 3,200 journalists with deep roots in approximately 220 local communities, plus USA TODAY.
Since its introduction in 1982, USA TODAY has been a cornerstone of the national media landscape under its recognizable
and respected brand. It also serves as the foundation for our newsroom network, the USA TODAY NETWORK, which allows
for content sharing capabilities across our local and national markets. Since 1918, our newsrooms have won 96 Pulitzer Prizes.
Most recently, in 2023, two USA TODAY NETWORK news organizations were named as Pulitzer Prize finalists. The Detroit
Free Press was a finalist in the Criticism category, while the Austin American-Statesman was a finalist in Public Service. This
marks five Pulitzer Prize winners and nine finalists awarded to Gannett journalists in the last six years.
The scale of our consumer audience across the Domestic Gannett Media segment, combined with a full funnel suite of
products, makes us an attractive marketing partner to various local and national businesses trying to reach consumers. We reach
approximately 1 in 2 adults(a) in the U.S., led by USA TODAY and amplified by local media brands within the USA TODAY
NETWORK. We are the leading news media publisher in the U.S. in terms of circulation and have the fourth largest digital
audience in the News and Information category, based on the December 2023 Comscore Media Metrix®; per those metrics, our
content reaches more people digitally than Fox News Media, CNN Network, CBS News, New York Times Digital, or
WashingtonPost.com.(a)
During 2023, our U.S. media network, which includes USA TODAY and our network of local properties, had a total digital
audience of approximately 136 million(a) monthly unique visitors, on average. In addition, during 2023, the combined average
daily print readership was approximately 3.2 million on Sunday and 2.9 million daily Monday through Saturday, primarily
driven by our U.S. local property network and to a lesser extent, USA TODAY. While our print audience skews to an older
demographic, our digital audience skews younger as evidenced by approximately 50%(a) of the total U.S. digital millennial
audience (ages 27 - 42) that accessed our USA TODAY NETWORK content monthly, on average, during 2023.
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Table of Contents
The Domestic Gannett Media segment generates revenue primarily through advertising and subscriptions to our print and
digital products, augmented by full funnel advertising solutions including digital marketing services, and, to a lesser extent,
commercial printing and distribution. The Domestic Gannett Media segment is focused on monetizing its digital audience,
through multiple digital revenue touchpoints, such as digital subscriptions, affiliate and content partnerships, digital advertising
leveraging both first and third-party data, new product offerings, and sports verticals. We believe this strategic focus, coupled
with our unwavering commitment to delivering relevant and essential content, will enable us to better optimize our audience
and accelerate our digital revenue growth.
Advertising and Marketing
In 2023, Advertising and marketing services revenues at the Domestic Gannett Media segment were $925.5 million, which
represented 44% of total Domestic Gannett Media segment revenues, up from 43% in 2022, making it our single largest
revenue category in 2023.
We track our Print advertising revenues in two primary categories: local and national, and classified. Below are
descriptions of the categories:
•
•
Local and national advertising includes ads run in our print products, such as our daily or non-daily publications, and
are either display advertising or preprinted inserts. Local advertising is associated with local store fronts or locally
owned businesses and national advertising is principally associated with advertisers who are promoting national
products or brands throughout the USA TODAY NETWORK. Examples include retailers, commercial banks, airlines,
and telecommunications.
Classified advertising includes major categories such as legal, obituaries, automotive, employment, and real estate or
rentals.
We track our Digital advertising and marketing services revenues in three main categories: digital media, digital classified,
and digital marketing services. Below are descriptions of these three categories:
•
•
•
Digital media includes direct sold display advertising as well as programmatic advertising and leverages both first and
third-party data delivered on either our digital products or off-platform through omnichannel partners or on
distribution channels.
Digital classified encompasses digital advertising revenues associated with our classified partnerships, including auto,
employment and real estate as well as legal, and obituaries.
Digital marketing services represents our integrated, proprietary marketing platform that helps local businesses build
their online presence through high conversion websites, drives awareness and leads through products such as search
engine marketing, manages and nurtures leads through our marketing automation platform, and measures which
activities are most effective. Our digital marketing services utilize digital inventory across a number of third-party
websites.
Our advertising teams employ a multi-product and platform approach to advertising sales. We operate sales teams in local
markets as well as national and centralized sales teams, in conjunction with self-service options, to maximize the scale of our
network. Our advertising teams sell a full portfolio of print and digital advertising, including digital marketing services. This
diverse set of products can be specifically tailored to the individual needs of advertisers from small, locally owned merchants to
large, complex national brands. 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. We believe that our nationally scaled sales force, trusted expertise,
and broad portfolio of print and digital advertising and marketing products position us well to solve these challenges. Through
our media planning process, we present advertisers with targeted, integrated solutions that help them reach this shifting
audience.
Circulation
In 2023, Domestic Gannett Media segment Circulation revenues of $854.5 million comprised 41% of total Domestic
Gannett Media segment revenues, down from 43% in 2022. Print circulation volumes declined more significantly beginning
with the second quarter of 2022, as compared to historical trends. We implemented a number of customer centric initiatives and
changes during 2023 that we believe will stabilize this trend, as well as extend the overall life of our print subscriber base.
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Circulation revenues in the U.S. are derived from our all access content subscription model, single-copy sales of our
publications, and digital-only subscriptions.
Our all access content subscription model in our local markets includes a home delivered print product along with access to
our content via multiple digital platforms, with subscription prices varying by market, frequency, and product, among other
variables. As of December 31, 2023, we had 1.2 million print subscribers.
Growing our paid digital-only subscription revenue remains one of our top priorities given the highly recurring nature of
this revenue and, in 2023, we adopted a more balanced approach between increasing profitability and growing paid digital-only
subscriptions. We will continue to pursue subscriptions growth, but we have become more targeted in our acquisition strategy.
We have experimented with several offer strategies and rate structures and, based on these learnings, we have focused our
subscriber acquisition efforts on acquiring highly engaged, long-term, profitable subscribers as well as extending the
subscribers lifetime value. As a result of this targeted acquisition strategy, we achieved our highest digital-only average revenue
per user ("Digital-only ARPU") in the second half of 2023. Refer to "Key Performance Indicators" in Management's Discussion
and Analysis of Financial Condition and Results of Operations" below for further discussion of Digital-only ARPU. We believe
that we will continue to experience growth in Digital-only ARPU and expect ongoing paid digital-only subscription revenue
growth as we continue to strategically focus on an informed customer acquisition, content, and pricing strategy. We continue to
believe we have significant opportunity to grow paid digital-only subscriptions in the future as we expand our content and our
product offerings.
Access to our digital content typically grants registered users complimentary access to a restricted number of articles before
prompting them to subscribe for expanded content privileges. Registered users exhibit a more favorable conversion rate to paid
subscriptions compared to anonymous users. The collective audience of registered users, along with our paid digital-only
subscribers, serves as a valuable source of first-party data, enhancing our understanding of user behavior and preferences. We
believe this strategic alignment contributes to the growth and sustainability of our digital offerings.
In the U.S. local markets, Circulation revenue is largely subscription based, with approximately 88% of Circulation
revenues derived from our all access content subscription model and digital-only subscriptions in 2023.
In addition to the subscription model in our U.S. local markets, single-copy print editions continue to be sold at retail
outlets and accounted for approximately 11% of daily and 14% of Sunday net paid circulation volume in 2023. Approximately
46% of the net paid circulation volumes of USA TODAY in 2023 was generated by single-copy sales at retail outlets, vending
machines, or hotels that provide copies to their guests. Net paid circulation volumes of USA TODAY also include home and
office delivery, mail, educational, and other sales.
Other Revenues
Other revenues, includes Other Digital revenues, which are derived mainly from digital syndication, affiliate, production
and licensing revenues. In 2023, Domestic Gannett Media segment Other revenues of $315.8 million comprised 15% of total
Domestic Gannett Media segment revenues, up from 14% in 2022. In 2023, 67% of our Other Digital revenues were from
digital syndication, which involves content produced by our teams and republished on third-party websites. Revenues from
digital syndication are primarily derived from revenue shares with those third-party vendors. We are focused on increasing the
overall monetization of our content platform, and a key component of this strategy includes creating incremental revenue
streams through affiliate and content partnerships with top-tier organizations. In 2023, we entered into five partnerships across
major verticals, including sports, gaming and finance. Affiliate and content partnerships provide relevant content to our organic
audience and are expected to drive audience growth and engagement, along with higher margin revenues. We believe this
strategic expansion will enable us to reach a wider market, increase our digital revenues, and enhance the overall monetization
of our platform. We expect our affiliate revenue streams to become a more significant contributor to our overall revenue over
the next few years.
Events
USA TODAY NETWORK Ventures, our events and promotions business, connects communities and diversifies the
Company's traditional media offerings. In 2023, USA TODAY NETWORK Ventures produced 217 events for the Company
with a collective attendance (in-person and virtual) of nearly 1.0 million. Our portfolio of events includes predominantly in-
person events, augmented by virtual races and other activities to fully leverage the brand. The majority of events in 2023
occurred in-person and our 2023 attendance increased to approximately 667 thousand attendees.
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USA TODAY NETWORK Ventures creates impactful consumer engagement and experiences through world-class events,
endurance races, promotions, and timing and event production technologies. Our portfolio includes the largest high school
sports recognition program in the country, USA TODAY High School Sports Awards, and other brands, including the Official
Community's Choice Awards, American Influencer Awards, Hot Chocolate 15K/5K, RAGBRAI, Detroit Free Press Marathon
and many more. Our events are managed with our proprietary ticketing and registration platform, EnMotive®, one of the largest
race timing companies in the U.S.
USA TODAY NETWORK Ventures revenues are generated primarily through sponsorship sales, race registrations, and
ticket sales, which are reported in other revenues, and print and digital advertising and marketing revenues.
Production and Distribution
As of December 31, 2023, Gannett Publishing Services ("GPS") owned and/or operated 21 production facilities. Each of
our production facilities produced 16 publications on average during 2023. By clustering our production resources, utilizing
excess capacity for commercial work, or outsourcing where cost-beneficial, we seek to reduce the operating costs of our
publications while increasing the quality of our small and mid-size market publications that would typically not otherwise have
access to high quality production facilities. We believe we are able to reduce future capital expenditure needs by having fewer
overall pressrooms and buildings.
GPS leverages our existing assets, including employee talent and experience, physical plants and equipment, and our vast
national and local distribution networks to produce print products for both Gannett and third-party customers. GPS is
particularly focused on optimizing our geographic footprint to most efficiently produce and transport our printed products. GPS
is responsible for internal and external printing, packaging, and distribution. The distribution of our daily newspapers is
typically outsourced to independent, locally based, third-party distributors that also distribute a majority of our weekly
newspapers and non-newspaper publications. We continuously evaluate lower cost options for newspaper delivery.
We continue to refine our production and distribution methods. In 2023, we converted 46 publications to same-day mail
delivery via the U.S. Postal Service in certain markets where it is viable from a customer and financial perspective. Our goal is
to reliably deliver to the consumer, and lower costs in some cases, as well as eliminate unprofitable distribution routes where
possible. We intend to continue to explore mail delivery in 2024.
Competition
Our Domestic Gannett Media operations and affiliated digital platforms compete with other media and digital companies
for advertising and marketing spend. Our Domestic Gannett Media operations also compete for circulation and readership
against other news and information outlets and amateur content creators, some of which offer their content free of charge. Each
of our publications compete for advertising revenues to varying degrees with traditional media outlets such as direct mail,
yellow pages, radio, outdoor advertising, broadcast and cable television, magazines, local, regional and national newspapers,
shoppers, and other print and online media sources, including local blogs. We also increasingly compete with digital and social
media companies, as well as advertising networks and other programmatic buying channels for advertising revenues.
Development of opportunities in, and competition from, digital and social media, including websites, mobile applications,
and social products continues to increase. There is very little barrier to entry and limited capital requirements for new
companies to enter the market with competitive digital products. Additionally, we are generally not compensated for the use of
our original content by third-party digital products and social platforms.
The Domestic Gannett Media segment expects to continue to protect its audience market share and to expand its audience
reach in the digital media industry through a focus on high quality content and journalism, internal audience development
efforts, content distribution programs, acquisitions, and partnerships. Additionally, the Domestic Gannett Media segment
expects to continue to improve its suite of advertising and marketing services products through both internal development and
partnerships.
Joint Operating Agencies
Our Domestic Gannett Media subsidiaries in Detroit, Michigan and York, Pennsylvania 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 partners' share of profits.
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Major Publications and Markets We Serve
The USA TODAY NETWORK operates as a network, leveraging integrated shared support for back-office operations such
as content design and layout services, print and digital creative development, certain sales and service platforms, technology,
data, and accounting and finance. We centrally manage production and distribution across our entire newsroom network to
maximize efficiency. We also leverage a single content management platform, allowing for content sharing across our portfolio
of brands. However, we believe that it is critically important that our U.S. local property network operate at the local level and
utilize the centralized infrastructure in a manner that maximizes each property's individual performance.
The following table sets forth information regarding the number of production facilities in our Domestic Gannett Media
segment as of December 31, 2023:
Alabama
Arizona
California
Delaware
Florida
Illinois
Indiana
Iowa
Massachusetts
Michigan
Mississippi
Missouri
New Jersey
North Carolina
Ohio
Rhode Island
Tennessee
Texas
Wisconsin
Total
LOCAL PROPERTY NETWORK PRODUCTION FACILITIES
State / Territory
Production Facilities
1
1
1
1
2
1
1
1
1
1
1
1
2
1
1
1
1
1
1
21
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The following table lists information for our major publications and their affiliated digital platforms in the U.S. In 2023, we
updated our reporting methodology for Daily and Sunday circulation to reflect reported subscription volumes versus figures
from Alliance for Audited Media ("AAM"). Previously reported AAM volumes included print, digital non replica, and affiliated
publications.
SUBSCRIPTION LOCAL MEDIA ORGANIZATIONS AND AFFILIATED DIGITAL PLATFORMS / DOMESTIC
Daily(1)
113,228
2023
Sunday(1)
—
Digital-only(1)
142,212
Daily(1)
132,877
2022
Sunday(1)
—
Location
USA Today
Detroit, MI
Phoenix, AZ
Milwaukee, WI
Indianapolis, IN
Columbus, OH
Cincinnati, OH
Des Moines, IA
Palm Beach, FL
Austin, TX
Nashville, TN
Louisville, KY
Rochester, NY
Providence, RI
Sarasota, FL
Oklahoma City, OK
Bergen County, NJ
Naples, FL
Asbury Park, NJ
30,186
48,273
30,887
23,259
18,840
22,242
18,278
20,144
13,544
14,817
19,059
18,520
18,237
17,565
13,677
18,183
13,866
14,212
73,357
70,485
52,365
33,802
28,747
33,281
28,317
24,991
19,057
21,537
27,294
28,336
22,683
20,968
18,742
22,380
16,384
19,736
129,131
65,946
60,271
52,536
44,776
39,749
36,165
33,325
38,132
35,064
26,554
23,623
24,323
25,099
27,209
21,890
26,778
21,456
35,931
56,864
37,967
27,604
23,060
25,740
21,682
23,332
17,004
17,829
22,942
22,966
21,322
21,174
17,459
22,694
16,262
17,441
Digital-only(1)
120,682
132,203
69,956
62,436
58,362
43,306
40,543
36,739
31,333
39,238
36,070
29,421
25,337
24,312
25,093
27,846
23,048
27,687
22,449
15,664
84,008
83,601
63,995
40,403
34,906
39,918
33,115
29,151
23,303
26,803
32,997
35,105
26,423
24,935
24,162
28,008
18,872
24,355
28,655
Akron, OH
(1) Daily, Sunday and Digital-only reflect reported subscription volumes as of December 31, 2023 and 2022.
23,604
18,607
16,746
22,790
Newsquest Segment
Our Newsquest segment in the U.K. is comprised of over 220 digital news and media brands across our portfolio, including
over 150 daily and weekly newspapers and over 70 magazines as of December 31, 2023.
Our core print offerings include: (i) home delivery offered on a subscription basis ("home delivery"), (ii) single copy, and
(iii) non-daily publications (i.e., shoppers and niche publications).
Many of our publications are located in small and mid-size markets where we are often the primary provider of
comprehensive local market news and information. Our content is primarily devoted to topics we believe are essential and
highly relevant to our audiences, such as local news and politics, community and regional events, health and wellness, personal
finance, youth sports, local schools, obituaries, and crime news.
Our digital-only subscription offerings include the following products: (i) local media brands, (ii) magazines, and (iii)
sports.
We reach a large, diverse audience through our print and digital daily and non-daily publications throughout the U.K. As of
December 31, 2023, our journalism network is powered by an integrated and award-winning news organization comprised of
approximately 500 journalists.
The scale of our consumer audience across the Newsquest segment, combined with a full funnel suite of products, makes
us an attractive marketing partner to various local and national businesses trying to reach consumers. In the U.K., Newsquest
had a digital audience in 2023 of approximately 51 million(b) monthly unique users, on average, with a total average print
readership of 4.2 million every week.
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The Newsquest segment generates revenue primarily through advertising, single-copy sales and subscriptions to our print
and digital products, augmented by full funnel advertising solutions including digital marketing services, and, to a lesser extent,
commercial printing and distribution. The Newsquest segment is focused on monetizing its large organic audience of
approximately 51 million(b) monthly unique visitors, on average, through multiple digital revenue touchpoints, such as digital
subscriptions, affiliate and content partnerships, digital advertising leveraging both first and third-party data, new product
offerings, and sports verticals. We believe this strategic focus, coupled with our unwavering commitment to delivering
engaging and essential content, will enable us to better optimize our audience and accelerate our digital revenue growth.
Advertising and Marketing
In 2023, Advertising and marketing services revenues at the Newsquest segment were $134.1 million, which represented
57% of total Newsquest segment revenues, down from 58% in 2022.
We track our Print advertising revenues in two primary categories: local and national, and classified. Below are
descriptions of the categories:
•
•
Local and national advertising includes ads run in our print products, such as our daily or non-daily publications.
Classified advertising includes major categories such as legal, obituaries, automotive, employment, and real estate or
rentals.
We track our Digital advertising and marketing services revenues in three main categories: digital media, digital classified,
and digital marketing services. Below are descriptions of these three categories:
•
•
•
Digital media includes direct sold display advertising as well as programmatic advertising and leverages both first and
third-party data delivered on either our digital products or off-platform through omnichannel partners or on
distribution channels.
Digital classified encompasses digital advertising revenues associated with our classified partnerships, including auto,
employment and real estate as well as legal, and obituaries.
Digital marketing services represents our integrated, proprietary marketing platform that helps local businesses build
their online presence through high conversion websites, drives awareness and leads through products such as search
engine marketing, manages and nurtures leads through our marketing automation platform, and measures which
activities are most effective. Our digital marketing services utilize digital inventory across a number of third-party
websites.
Our advertising teams employ a multi-product and platform approach to advertising sales. We operate sales teams in local
markets as well as a national sales agency, in conjunction with self-service options, to maximize the scale of our network. Our
advertising teams sell a full portfolio of print and digital advertising, including digital marketing services. This diverse set of
products can be specifically tailored to the individual needs of advertisers from small, locally owned merchants to large,
complex national brands. We believe 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. We believe our local sales force, trusted expertise, and broad portfolio of print and
digital advertising and marketing products position us well to solve these challenges. Through our media planning process, we
present advertisers with targeted, integrated solutions that help them reach this shifting audience.
Circulation
In 2023, Newsquest segment Circulation revenues of $73.3 million comprised 31% of total Newsquest segment revenues,
consistent with 31% in 2022.
Growing our paid digital-only subscription revenue remains one of our top priorities given the highly recurring nature of
this revenue, and in 2023, our paid digital-only subscriptions grew 41%. We believe our digital-only subscription growth is
rooted in unique, essential content. To continue growing and accelerating our digital-only subscription base, we intend to
capitalize on our large organic audience and leverage data to understand our users' interests and curate an experience that will
drive engagement and loyalty. We continue to believe we have significant opportunity to grow paid digital-only subscriptions in
the future as we expand our content and our product offerings.
Access to our digital content typically grants registered users complimentary access to a restricted number of articles before
prompting them to subscribe for expanded content privileges. Registered users exhibit a more favorable conversion rate to paid
subscriptions compared to anonymous users. The collective audience of registered users, along with our paid digital-only
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subscribers, serves as a valuable source of first-party data, enhancing our understanding of user behavior and preferences. We
believe this strategic alignment contributes to the growth and sustainability of our digital offerings.
Other Revenues
Other revenues, includes Other Digital revenues, which are derived mainly from digital syndication and commercial
printing. In 2023, Newsquest segment Other revenues of $26.6 million comprised 11% of total Newsquest segment revenues,
consistent with 11% in 2022.
Production and Distribution
As of December 31, 2023, the Newsquest segment owned and/or operated four production facilities. By clustering our
production resources, utilizing excess capacity for commercial work, or outsourcing where cost-beneficial, we seek to reduce
the operating costs of our publications while increasing the quality of our small and mid-size market publications that would
typically not otherwise have access to high quality production facilities. We believe we are able to reduce future capital
expenditure needs by having fewer overall pressrooms and buildings.
The Newsquest segment operates its publishing activities in a similar manner to GPS (as described in the Domestic Gannett
Media segment discussion above), through regional and central teams to maximize the use of management, finance, printing,
and personnel resources. This approach allows the business to leverage a variety of back-office and administrative activities to
optimize financial results and enables Newsquest to offer readers and advertisers a range of attractive products across the
market.
Competition
Our Newsquest segment operations and affiliated digital platforms compete with other media and digital companies for
advertising and marketing spend. Our operations also compete for circulation and readership against other news and
information outlets and amateur content creators, some of which offer their content free of charge. Each of our publications
compete for advertising revenues to varying degrees with traditional media outlets such as direct mail, radio, outdoor
advertising, broadcast and cable television, magazines, local, regional and national newspapers, and other print and online
media sources, including local blogs. We also increasingly compete with digital and social media companies, as well as
advertising networks and other programmatic buying channels for advertising revenues.
Development of opportunities in, and competition from, digital and social media, including websites, mobile applications,
and social products continues to increase. There is very little barrier to entry and limited capital requirements for new
companies to enter the market with competitive digital products. Additionally, we are generally not compensated for the use of
our original content by third-party digital products and social platforms.
The Newsquest segment expects to continue to protect its audience market share and to expand its audience reach in the
digital media industry through a focus on high quality content and journalism, internal audience development efforts, content
distribution programs, acquisitions, and partnerships. Additionally, the Newsquest segment expects to continue to improve its
suite of advertising and marketing services products through both internal development and partnerships.
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The Newsquest segment has a portfolio of over 150 news brands and more than 70 magazines, published in print and online
in the U.K. With a digital audience in 2023 averaging approximately 51 million(b) monthly unique users and more than 4.2
million total weekly average print readers. In addition to local news brands, the Newsquest segment owns the digital businesses
s1jobs and s1Homes, Exchange & Mart, and a specialist magazine business.
The following table presents information for our major local media organizations and affiliated digital platforms operated
by our Newsquest segment in the U.K. as of December 31, 2023:
DAILY PAID-FOR LOCAL MEDIA ORGANIZATIONS AND AFFILIATED DIGITAL PLATFORMS / NEWSQUEST
Title
Location
Basildon & Southend Echo
Basildon, Southend on Sea
Bournemouth - The Daily Echo
Bournemouth
Bradford Telegraph & Argus
Colchester Daily Gazette
Dorset Echo
East Anglian Daily Times
Eastern Daily Press
Glasgow - Evening Times
Greenock Telegraph
Ipswich Star
Lancashire Telegraph
News & Star
Norwich Evening News
Oxford Mail
South Wales Argus - Newport
Bradford
Colchester
Dorset
Ipswich
Norwich
Glasgow
Greenock
Ipswich
Blackburn, Burnley
Carlisle
Norwich
Oxford
Newport
Southampton - Southern Daily Echo
Southampton
Swindon Advertiser
The Argus Brighton
The Bolton News
The Herald, Scotland
The Leader
The Mail
Swindon
Brighton
Bolton
Glasgow, Edinburgh
Wrexham
Cumbria
The National, Scotland
Glasgow, Edinburgh
The Northern Echo
The Press - York
Worcester News
Darlington
York
Worcester
Circulation
Monday - Saturday(1)
7,853
Digital-only(2)
867
5,600
4,487
3,666
4,185
6,882
13,485
6,084
4,691
2,744
3,217
2,050
2,893
4,291
3,797
6,199
3,893
4,095
3,954
11,351
3,131
2,358
2,986
9,036
5,387
2,797
2,892
1,795
559
1,059
1,973
2,190
769
1,003
701
970
839
570
1,481
817
1,805
1,384
1,611
1,599
7,455
264
481
8,592
1,962
1,505
838
(1) Print circulation is based on reported copy sales per issue for the period January 2023 to December 2023.
(2) Digital-only reflects reported subscription volumes as of December 31, 2023.
Digital Marketing Solutions Segment
Our DMS segment is dedicated to helping local businesses succeed through digital advertising and marketing solutions.
The DMS segment, under the brand LocaliQ, is a sophisticated, cloud-based platform of fully-digital products that delivers
customers and drives leads through technology and insights.
We provide businesses with innovative technology and expertise to propel them forward, and our DMS platform is
distinguished by its proprietary:
• Marketing automation and management tools;
•
•
•
Patent-pending artificial intelligence bidding engines with goal-based and omnichannel advertising optimization;
Customizable reporting that can integrate with third-party platforms; and
Simple setup that works without configuration.
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Our DMS platform is used by a growing number of local businesses to find, convert, and keep customers. It is an all-in-one
marketing platform that optimizes any marketing budget to deliver more relevant messages to local consumers with a suite of
marketing automation, channel campaign management, customer relationship management and insight tools. We believe local
businesses want a single, unified solution to solve their digital marketing needs. Our DMS products and solutions help SMBs
thrive in four primary ways:
•
•
•
Building online presence (e.g., websites and landing pages, local listings, search engine optimization, social media
management, live chat);
Driving consumer awareness and generating business leads with advertising (e.g., search engine marketing, social
advertising, mobile advertising, display advertising, video and over the top advertising, targeted email marketing);
Building an audience while managing and nurturing leads and customers (e.g., lead alert tools, lead management, lead
engagement and automation); and
• Measuring and knowing what works and optimizing future marketing campaigns (e.g., conversion analytics, data
integrations, client center, customer tracking, cross-channel optimization, lead attribution, campaign reporting).
Utilizing our digital growth platforms and solutions, we build long-term, recurring revenue relationships while fulfilling
our mission of helping local SMBs thrive. We believe we have a true advantage of successfully reaching the SMBs given our
scaled salesforce, long-standing involvement in and knowledge of the communities in which we operate, and vast data
accumulated through decades of campaign management. We believe we offer a lower cost of acquisition for our customers
based on our extensive data and experience in optimizing campaigns. We also believe we have the technology, the experience,
and the relationships to provide best-in-class metrics.
As of December 31, 2023, the majority of our DMS customers have recurring relationships with us. With customer budget
retention rates of 95% in 2023, we believe the DMS segment provides a stable and predictable business model. In addition, we
believe that ongoing investment in product and marketing, combined with sales channel expansion, are critical to capitalizing
on the approximately 33 million SMBs in the U.S. As of December 31, 2023, our DMS business had approximately 15,100 core
platform customers.
We run an efficient operating model by leveraging our entire sales organization, which includes local sales in our media
markets, direct and national sales, and inside sales channels, who utilize a single customer relationship management tool and
service all clients and campaigns through our proprietary LocaliQ platform. We believe this scaled, national sales force
provides our DMS business a unique advantage. The LocaliQ platform has centralized post-sales functions and utilizes
integrated shared support for back-office operations such as accounting and finance. These centralized post-sales functions are
located both domestically and internationally to provide for the most efficient and variable servicing costs.
DMS Advertising and marketing services revenues are subject to moderate seasonality due primarily to fluctuations in
marketing budgets for seasonal businesses. We believe the diversification of the product suite will, over time, reduce the impact
from seasonal fluctuations.
Products
Digital marketing requires a holistic view of how online presence, advertising and conversion efforts work together to get
results. Our solutions work across the USA TODAY NETWORK and major online platforms such as Google, Facebook,
Microsoft, Snap, and others. Our product portfolio offers a simple all-in-one platform powered by artificial intelligence and
service experts that grows and adapts with the needs of local business owners. For example, some businesses might need to
significantly improve their websites and focus on converting sales leads, while others may need to focus on building awareness
of their business and driving more leads to their site and social pages. LocaliQ DMS identifies the biggest opportunities and
provides solutions by recommending the right mix of product platform features and measuring results.
We have a proprietary set of technologies that enables a business to receive a score on their overall marketing efforts,
shows them how they stack up against their competitors, and recommends a comprehensive set of solutions to help them
achieve their goals. This customized solution is sold as a subscription to our LocaliQ DMS platform. This platform removes the
concerns of unexpected overages and misaligned goals and allows us to set performance-based pricing. The platform optimizes
to produce the best results for the business and service experts are assigned to assist with each account, as needed. Our
proprietary technologies include:
•
Our online presence solutions offer high conversion websites, with e-commerce, custom content creation to empower
businesses to look professional, and human or bot-enabled live chat which ties into our lead conversion tools. These
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•
•
•
products are designed to work in concert with our digital advertising products with a goal of enhancing clients'
marketing return on investment.
Our online advertising products include award-winning technology for bidding and budget management as well as
patent-pending machine learning algorithms which optimize multiple advertising channels and campaigns toward a
goal with a single budget. Search engine marketing, which is recorded as Advertising and marketing services revenues,
accounted for 67% of our DMS segment's total revenues for the year ended December 31, 2023.
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 tools designed to significantly improve
the conversion of leads to customers and to help 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 reminding them to follow up
on each lead. Our lead conversion software also provides reports to show how many leads clients are getting from each
marketing source and other important business insights.
Our additional cloud-based software solutions, offered as a channel partner, include a customer relationship
management solution tailored for SMBs, a market-leading collaboration and productivity tool, and voice-over-IP
software. Our software solutions are available in North America and our lead conversion software is available in all of
our 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 DMS segment has sales operations in the U.S.,
Canada, New Zealand, Australia, India and the U.K. During 2023, approximately 95% of our DMS segment revenues were
generated in North America and the remaining 5% from other international markets. All DMS 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 digital marketing services at highly competitive prices
and, increasingly, we compete with SMB marketing providers who offer solutions tailored for specific verticals. In addition, the
online publishers that we utilize for clients, such as Google, Facebook, 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. Further, a proliferation of marketing automation tools continues
to commoditize the DMS environment while actions from major technology companies have caused challenges to advertising
agencies.
Government Regulation
We are subject to a variety of laws, rules, and regulations in numerous jurisdictions within the U.S. and in each of the
countries where we conduct business. These laws, rules and regulations cover several diverse areas, including environmental
matters, employee health and safety, data and privacy protection and anti-trust provisions. These U.S. federal, state, and foreign
laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly
evolving and can be subject to significant change. For example, many jurisdictions have enacted or are considering enacting
privacy or data protection laws and regulations that apply to the processing or protection of personal information as well as laws
and regulations governing the use of artificial intelligence. Data and privacy protection laws, rules and regulations are
applicable to our businesses and the compliance costs and operational burdens imposed by these laws and regulations could be
significant. As a result of the often rapidly evolving changes, the application, interpretation, and enforcement of these and other
applicable laws and regulations are often uncertain and may be interpreted and applied inconsistently from jurisdiction to
jurisdiction and inconsistently with our current policies and practices. We are committed to conducting our business in
accordance with applicable laws, rules, and regulations.
Environmental Regulation
The Company is committed to its strategy of protecting the environment. Our goal is to ensure our production and
distribution facilities comply with applicable federal, state, local, and foreign environmental laws and to incorporate appropriate
environmental practices and standards in our operations. We believe we are one of the industry leaders in the use of recycled
newsprint. During 2023, 13% of our domestic newsprint purchases contained recycled content, with average recycled content of
20%.
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Our operations use inks, solvents, and fuels. The use, management, and disposal of certain of these substances are regulated
by environmental agencies. In addition, there is increasing attention in the U.S. and worldwide concerning the issue of climate
change and the effect of greenhouse gas emissions. The Company believes that understanding and managing greenhouse gas
emissions is important to effectively mitigate our impact to the environment. We plan to complete a comprehensive greenhouse
gas emissions report that is expected to allow us to redefine our commitment around our carbon footprint. See "Climate
Change" below.
We retain a corporate environmental legal consultant who, along with internal and outside counsel, provides advice on
regulatory compliance and preventive measures. We believe we are in substantial compliance with all applicable laws and
regulations for the protection of the environment and the health and safety of our employees based upon existing facts presently
known to us. Compliance with applicable federal, state, local, and foreign environmental laws and regulations relating to the
discharge of substances into the environment, the disposal of hazardous wastes, and other related activities has had, and will
continue to have, an impact on our operations but has been accomplished to date without having a material adverse effect on
our operations. While it is difficult to estimate the timing and ultimate costs to be incurred due to uncertainties about the status
of laws, regulations, and technology, based on information currently known to us and insurance procured with respect to certain
environmental matters, we do not expect environmental costs or contingencies to be material or to have a material adverse
effect on our financial performance. Our operations involve risks in these areas, however, and we cannot provide assurance that
we will not incur material costs or liabilities in the future which could adversely affect us. See also "Item 1A — Risk Factors"
in this Annual Report on Form 10-K.
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. During 2023, we purchased newsprint as well as other specialty paper grades from
16 domestic and global suppliers. Our total consumption was approximately 114,000 metric tons in 2023, a decrease of 24%
from 2022, which included consumption by our owned and operated print sites, third-party printing sites, and Newsquest, and
includes consumption for Gannett products as well as products printed commercially for third-parties. Newsprint capacity
reductions through the closure of mills or the conversion of paper machines to other products or grades of paper has reduced the
number of newsprint suppliers over the years. North American suppliers are becoming a larger share of the global market and
consequently domestic supply is susceptible to longer delivery times and pricing volatility tied to economic and geopolitical
factors. An increase in supplier operating expenses due to, among other things, the rising cost of raw materials and energy,
combined with inflationary pressures impact the overall cost of newsprint. The availability and price of newsprint is subject to
numerous risks and uncertainties, which are described more fully under "Item 1A — Risk Factors" in this Annual Report on
Form 10-K.
Strategy
Gannett is committed to inspiring, informing and connecting audiences as a sustainable, growth-focused media and digital
marketing solutions company. We endeavor to deliver essential content, marketing solutions and experiences for curated
audiences, advertisers, consumers, and stakeholders by leveraging our diverse teams and suite of products to enrich the local
communities and businesses we serve. The execution of this strategy is expected to allow us to continue our evolution from a
more traditional print media business to a sustainable, growth-focused media and digital marketing solutions company.
We intend to create stockholder value through a variety of methods, including organic growth driven by our consumer and
business-to-business strategies, as well as through paying down debt to strengthen our capital structure.
Create a stable foundation for growth
Gannett continues to optimize and improve our foundation – completing systems consolidations and migrations, improving
process workflows, and ensuring we have synergy across the organization to deliver the stabilization required to fuel our plan
into the future. We also continue to invest in our people and in the skills needed to support our future aims and to retain our
talent by remaining an attractive place to work.
Expand our reach
Key to our ongoing growth is expanding our base – whether clients in our DMS segment or audience in our Domestic
Gannett Media and Newsquest segments – and optimizing our revenue streams across this growing base. For both the Domestic
Gannett Media and Newsquest segments, this includes content expansion, establishing a seamless print to digital continuum to
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introduce clients, readers, viewers, and listeners to a broader range of products we offer. For the DMS segment, expanding our
client base and core revenue is anticipated to be supplemented by the development of a complementary software model.
Diversify digital revenues
We expect to continue to expand the ways that we grow digital revenues through innovative partnerships and developing
new products and services that meet the needs of consumers and businesses. Examples of this growth strategy include our
intention to continue to expand partnerships that rely on our unique and large audience base and developing new DMS software
solutions.
Building on our environmental, social and governance focus to foster culture and community both internally and externally
We will continue our environmental, social and governance ("ESG") journey that is rooted in our strategic mission to
empower our communities to thrive and putting our customers at the center of everything we do. We support that mission with
clearly defined values that aim to influence not only what we do, but how we do it, with one of the core pillars focusing on our
ongoing commitments to inclusion, diversity, and equity ("ID&E"). From our internal efforts around recruiting, development
and retention, to our external efforts to provide high quality products and excellent customer service, we believe our strategic
focus will benefit from our continued commitment to building upon our culture and community values.
Macroeconomic Environment
The U.S. and global economies and markets experienced increased volatility in 2023, and are expected to continue to
experience volatility, due to factors, including higher inflation, increased interest rates, banking volatility, and other geopolitical
events that are anticipated to continue in 2024. Uncertain economic conditions adversely impacted our advertising revenues,
and the occurrence of these factors has resulted in a reduction in demand for our print and digital advertising, reduced the rates
for our advertising, and caused marketers to shift, reduce or stop spend. The impact of these uncertain macroeconomic
conditions has not changed substantially since the initial volatility that began in the second quarter of 2022.
These challenging conditions, especially higher inflation and interest rates, have negatively impacted the consumer and
resulted in increased price sensitivity from our print and paid digital-only subscribers. Consumer purchases of discretionary
items, including our products and services, generally decline during periods of economic uncertainty, when disposable income
is reduced or when there is a reduction in consumer confidence. SMBs are facing a more complex marketing environment and
need to create digital presence to capture audiences online. Advertisers are increasingly looking for more effective ways to
analyze their return on marketing investments and are seeking solutions that offer greater attribution. We believe we offer a
broad suite of digital marketing services products that offer a single, unified solution to meet their digital marketing needs.
As a result of the macroeconomic volatility, we have experienced rising costs, including costs associated with labor,
newsprint, delivery, ink, printing plates, fuel, and utilities. However, we believe that the inflationary pressures peaked in 2022
and we are beginning to realize and expect we may continue to realize lower prices related to newsprint costs. We are also
exposed to potential increases in interest rates associated with our five-year senior secured term loan facility in an original
aggregate principal amount of $516 million (the "Senior Secured Term Loan"), which as of December 31, 2023, accounted for
approximately 31% of our outstanding debt, as well as fluctuations in foreign currency exchange rates, primarily related to our
operations in the U.K. We expect continued uncertainty and volatility in the U.S. and global economies which will continue to
impact our business.
Recent U.S. and international tax legislation
On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the "Inflation Reduction Act"),
which includes, among other provisions, changes to the U.S. corporate income tax system, including a 15% minimum tax based
on "average adjusted financial statement income" exceeding $1 billion for any three consecutive years preceding the tax year
and a 1% excise tax on net repurchases of stock in excess of $1 million after December 31, 2022. During the year ended
December 31, 2023, we did not experience a material financial impact from the Inflation Reduction Act. We do not anticipate a
material financial impact from the Inflation Reduction Act during 2024.
We are subject to income taxes and various other taxes in the U.S. and in many foreign jurisdictions; therefore, changes in
both domestic and international tax laws or regulations have affected and may affect our effective tax rate, results of operations,
and cash flows. The Organization for Economic Co-operation and Development (the "OECD")/G20 Inclusive Framework on
Base Erosion and Profit Shifting has agreed on a two-pillar approach to address tax challenges arising from the digitalization of
the global economy by (i) allocating profits to market jurisdictions ("Pillar One") and (ii) ensuring multinational enterprises pay
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a minimum level of tax regardless of where the headquarters are located or the jurisdictions in which the company operates
("Pillar Two"). Pillar One targets multinational groups with global revenue exceeding €20 billion and a profit-to-revenue ratio
of more than 10%. Companies subject to Pillar One will be required to allocate profits and pay taxes to market jurisdictions.
Based on the current proposed revenue and profit thresholds, we do not expect to be subject to tax changes associated with
Pillar One. Pillar Two focuses on global profit allocation and a global minimum tax rate. In December 2022, the European
Union ("EU") Member States formally adopted the EU's Pillar Two Directive, which generally provides for a minimum
effective tax rate of 15%, as established by the OECD Pillar Two Framework that was supported by over 130 countries
worldwide. The EU Pillar Two Directive became effective on January 1, 2024.
The U.K. has enacted legislation to implement the OECD's Pillar Two rules with the passing of Finance (No.2) Act 2023.
The legislation introduces a global minimum effective tax rate of 15% by implementing a domestic top-up tax and a
multinational top-up tax for U.K. multinational corporations effective January 1, 2024. Other countries are also actively
considering changes to their tax laws to adopt certain parts of the OECD's proposals. We do not expect that Pillar Two will
have a material impact on the Consolidated financial statements.
Seasonality
Our revenues are subject to moderate seasonality, primarily due to fluctuations in advertising volumes. Advertising and
marketing services revenues for our Domestic Gannett Media segment are typically highest in the fourth quarter, primarily due
to fluctuations in advertising volumes tied to the holidays, regional weather, and levels of activity in our various markets, some
of which have a high degree of seasonal residents and tourists. Revenues in our DMS segment experience moderate seasonality
in the first quarter due to fluctuations in the seasonal needs of our advertising customers. 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. Uncertain economic
conditions continued to adversely impact our advertising revenues during 2023, and the occurrence of these factors has resulted
in a reduction in demand for our print and digital advertising, reduced the rates for our advertising, and caused marketers to
shift, reduce or stop spend. Refer to "Macroeconomic Environment" above for further discussion.
Employees and Human Capital Resources
We believe our employees are our greatest asset and the foundation of our business is the people and employees who make
our day-to-day operations possible. ID&E are core pillars of our organization, and we regularly track our progress on workforce
demographics. In 2023, we published our third installment of an annual report focused on our ID&E efforts. The 2023 Inclusion
Report outlined then-current workforce diversity data, Gannett's inclusion goals that reach into 2025, as well as the steps we are
taking to achieve our goals. The 2023 Inclusion Report also highlighted how we are working to meet our goals, including
through our employee resource groups ("ERGs") where we leverage the unique strengths, views, and experiences of our
employees to build community, drive engagement, and deliver business impact. Gannett expects to continue to publish
company-wide workforce demographics twice a year. In addition, we launched our Employee Self-Identification Survey for the
third consecutive year to gain increased visibility and perspective into our workforce demographic data, including the many
aspects of identity, such as having military experience, having a disability, identifying as LGBTQ+, and more.
Gannett remains consistent, committed, and intentional in our quest to be a leader in ID&E. In 2023, Gannett was
recognized in the 2023 Best Places to Work for LGBTQ Equality. In 2023, for the sixth year in a row, Gannett received a
perfect score of 100 on the Corporate Equality Index, the nation's premier benchmarking survey and report measuring corporate
policies and practices related to LGBTQ workplace equality and inclusion. Gannett was also recognized for the third time by
Forbes as one of America's Best Employers for Diversity. In addition, Gannett is a proud Gold recipient of Mental Health
America's Bell Seal for Workplace Mental Health, awarded for our commitment to employee mental health and well-being.
Enabling a positive employee experience, within a values-based, inclusive work culture, remains a top priority at Gannett.
Aligned to our purpose, we endeavor to provide engaging work and foster a learning culture that supports our employees' ability
to reach their goals and continue to develop new skills and capabilities. We aim to cultivate a safe, diverse, inclusive, and
equitable culture with broad promotion of our values, and participation in our ERGs, with twelve active ERGs operating in the
Company as of December 31, 2023. We operate within a "4c" model, where the strategic pillars of Career, Culture, Company,
and Community are used to establish goals, determine topics for programming and live discussions, as well as track progress
and successes. Our programming includes intersectional ERG events, monthly Town Hall meetings with our Chief Executive
Officer and senior leadership, and many communication channels, including, as an example, our monthly Together employee
newsletter, which shares strategies on topics such as hybrid working, staying socially and professionally connected, and
highlighting individual employee career progression stories.
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Throughout the year we engage employees through lifecycle milestones to capture feedback through diverse channels in
order to maintain a clear pulse on the employee experience. Annually, the performance review process includes goal setting as
well as manager feedback, coaching and individual development plans to assist with the career growth of our employees.
During 2023, there was an added focus each month on enabling management effectiveness by sharing specific programs, tools,
forums, and communications for people managers. We also have implemented a Company-wide mentor platform to further
enable career elevation progress.
We understand the critical need for succession planning and have developed talent and succession plans with customized
development plans for critical roles within the organization. On an annual basis, our Board of Directors reviews the succession
plans for key senior leadership positions. Our learning programs have been designed to successfully orient employees, build
leadership capabilities and meet individual development needs. Through our centralized Learning Experience Platform, we
deliver and manage both internally developed and customized programs such as our leadership development program, as well
as partner programs. To further our employees' experience, we offer a volunteer time benefit and community giving campaigns,
inclusive holidays, including flexible holiday time for individuals to elect their desired holiday observations.
As of December 31, 2023, we employed approximately 10,000 employees in the U.S., of which approximately 17% are
represented by labor unions, most of which are affiliated with one of seven international unions. As of December 31, 2023,
there were approximately 2,800 employees outside of the U.S., including approximately 1,900 employed by Newsquest in the
U.K. Our U.K. subsidiaries bargain with two unions over working practices, wages, and health and safety issues. Most of our
unionized employees work under collective bargaining agreements that have expired, are in the negotiation process, or are
negotiating towards an initial collective bargaining agreement. As of December 31, 2023, there were approximately 73 existing
collective bargaining agreements and 16 bargaining units negotiating initial contracts. While we have experienced isolated work
stoppages from time to time, we believe relations with our employees are generally good.
Environmental, Social and Governance Initiatives
As a leading media organization, our longstanding corporate social responsibility position is driven by our deep
commitment to our communities. We are dedicated to ensuring that we have mindful and ethical business practices that
positively impact our world. In early 2023, we published our 2023 ESG Report detailing the progress we made on our U.N.
Sustainable Development Goals ("U.N. SDGs") that include Reduced Inequalities, Climate Action, and Peace, Justice, and
Strong Institutions. The 2023 ESG Report included noteworthy highlights such as improving our workplace diversity,
expanding our systems infrastructure to provide Scope 1 and 2 emissions for our entire global carbon footprint, and reducing
the number of manufacturing facilities.
Gannett is committed to ensuring our coverage is widely available, actively promoted across our media sites and marketed
to our millions of registered users. In January 2024, we published our network-wide 2023 Journalism Impact Report, which
highlighted what we believe are the most influential articles we produced in 2023 and covers topics such as coverage on ID&E,
as well as climate change. The Company commits to the ongoing publishing of an annual network-wide Journalism Impact
Report, which surfaces the top stories we produced that led to action.
The well-being of our employees is of paramount importance to us and we are committed to maintaining a corporate
culture that conducts business in a responsible and ethical manner that includes promoting, protecting and supporting human
rights across our operations and throughout our entire organization, which is why we have adopted a company-wide Human
Rights Policy. This policy expands upon an existing policy enacted by our U.K. operations. Our Human Rights Policy covers
areas such as our commitment to diversity and inclusion, a safe and healthy workplace, our communities and stakeholders, and
freedom of association and collective bargaining, which helps ensure our employees' right to form and choose whether to join a
labor union without fear of reprisal, intimidation, or harassment. The Human Rights Policy also reflects our commitment to
bargaining in good faith with chosen representatives of such groups in accordance with applicable laws.
Climate Change
Essential to Gannett's mission of empowering communities to thrive are the pillars that make up our corporate social
responsibility platform. As part of our commitment to social responsibility, Gannett strives to minimize its environmental
impact through sustainable business practices for sourcing, consumption, and waste. We have taken a number of steps within
the organization in an effort to reduce our use of water, to recover and recycle electricity and fossil fuels when possible, and to
pursue green energy options where available. We continue to reduce the number of presses in operation by consolidating print
operations and by significantly reducing the square footage of our office space through consolidation of offices, in many cases,
to more energy efficient spaces. We are committed to completing a comprehensive Greenhouse Gas emissions report that is
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expected to allow us to redefine our commitment and set targets around our carbon footprint. We also strive to incorporate
sustainability throughout our supply usage and supply chain.
We invested in a best-in-class carbon accounting software, Net Zero Cloud, and partnered with Green Impact to implement
this software and enhance our ability to capture emissions data on an expanded number of assets and scopes. To build upon our
progress in measuring and tracking our Scope 1 and 2 emissions, we have plans to expand into Scope 3 categories. Gannett
recognizes that if we are to contribute towards achieving net zero, we need to establish our full carbon footprint baseline,
implementing reduction strategies along our journey.
Gannett continues to harness employee enthusiasm through Sustainability Forward, which is an ERG focused on bringing
together a community of employees who are passionate about ESG topics. Sustainability Forward aims to align initiatives and
efforts that support Gannett’s commitment to sustainability, climate, people, and communities with a mission to contribute to a
better, more inclusive, and equitable planet. In 2023, the group hosted monthly meetings, community initiatives, and company-
wide events and training geared toward education, climate change solutions, traditions and investing in companies dedicated to
saving our planet. With consistent growth throughout the year, the Sustainability Forward ERG ended 2023 with approximately
140 employees across the Company.
Gannett is committed to continuing to include more detailed articles to provide broader context to news in health,
environment and science and include in-depth analyses that explore questions of how and why health and climate trends matter
to our readers. In 2023, Gannett’s U.S. National Climate Change Cross team published approximately 9,000 stories, newsletters
or major projects about climate change and the environment. Additionally, the USA TODAY NETWORK publishes a weekly
newsletter, Climate Point, that curates content about the environment, sustainability, and climate change from across the
network for a national audience, helping readers make better informed decisions for themselves, their families, and their
communities.
Corporate Governance and Public Information
The address of Gannett's website is www.gannett.com. Stockholders can access a wide variety of information on Gannett's
website, under the "Investor Relations" tab, including corporate governance information, news releases, Securities and
Exchange Commission ("SEC") filings, and information Gannett is required to post online pursuant to applicable SEC and New
York Stock Exchange ("NYSE") rules. Gannett makes available via its website all filings it makes under the Securities
Exchange Act of 1934, as amended, including Forms 10-K, 10-Q, and 8-K, as well as any related amendments as soon as
reasonably practicable after they are filed with, or furnished to, the SEC. All such filings are available free of charge. The
content of, or information available on, Gannett's website and any other website referred to in this report are not a part of, and
are not incorporated by reference into, this report unless expressly noted otherwise.
Use of Website to Distribute Material Company Information
The Company's website address is www.gannett.com. The Company uses its website as a channel of distribution for
important company information and we use the investors.gannett.com websites as a means of disclosing material non-public
information and for complying with our disclosure obligations under Regulation FD. Important information, including press
releases, analyst and other presentations, transcripts, and financial information regarding the Company, is routinely posted on
and accessible on the Investor Relations and News and Events subpages of its website, which are accessible by clicking on the
tab labeled "Investor Relations" and "News and Events", respectively, on the website home page. The Company also uses its
website to expedite public access to time-critical information regarding the Company in advance of or in lieu of distributing a
press release or a filing with the SEC disclosing the same information. Therefore, investors should look to the Investor
Relations, and News and Events subpages of the Company’s website for important and time-critical information. Visitors to the
Company's website can also register to receive automatic e-mail and other notifications alerting them when new information is
made available on the Company's website.
References
(a) 2023 Comscore Inc., US Multi-Platform, Desktop 2+ and Total Mobile 18+, December 2019-December 2023
(b) Newsquest used Adobe Analytics to identify unique visitors between January 2023 and December 2023
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ITEM 1A. RISK FACTORS
You should carefully consider the following risks and other information in this Annual Report on Form 10-K in evaluating
us and our common stock, par value $0.01 per share (the "Common Stock"). Any of the following risks could materially and
adversely affect our results of operations, our financial condition, and the market price of our Common Stock. Although the risk
factors are grouped by general category, many of the risks described in a given category relate to multiple categories.
The following is a summary of some of the risks and uncertainties that could materially adversely affect our business,
financial condition, and results of operations, which are discussed in more detail below:
Risk Factor Summary
•
•
• We operate in a highly competitive business environment, and our success depends on our ability to compete effectively,
including through the implementation of our strategic initiatives and development of new and enhanced products and
services.
Our indebtedness could materially and adversely affect our business or financial condition.
Certain actions, including our ability to incur additional indebtedness, require the consent of our lenders and note holders
which, if not provided, would limit our ability to take advantage of future opportunities.
Our inability to raise funds necessary to repurchase the 2026 Senior Notes or the 2027 Notes, upon a change of control as
described in the 2026 Senior Notes Indenture or fundamental change as described in the 2027 Notes Indenture, may lead to
defaults under such indentures and under agreements governing our existing or future indebtedness. In addition, a change
of control may constitute a default under the Senior Secured Term Loan, the 2026 Senior Notes or the 2027 Notes.
Our strategy of growing our paid digital-only subscriber base may negatively impact advertising revenues in the near term.
•
• We may be unsuccessful in our efforts to execute our digital revenue strategy and optimize our revenue streams.
•
•
Our DMS segment substantially utilizes online media acquired from third parties and our business could be materially
adversely affected if these companies take actions that are adverse to our interests or otherwise restrict our ability to do
business.
Any required changes in targeting, such as the deprecation of third-party cookies, could materially and adversely impact
our advertising revenues and business results, and impair our ability to acquire consumers efficiently.
Volatility in the U.S. and global economies, macroeconomic events, market disruptions, and other events outside of our
control, have had, and may in the future have, a material and adverse impact on our business, financial condition, and
results of operations.
Our ability to generate revenues is highly sensitive to the strength of the local economies in which we operate and the
demographics of the local communities that we serve.
The collectability of accounts receivable under adverse economic conditions could deteriorate to a greater extent than
provided for in our financial statements and in our projections of future results.
Our financial results are subject to risks associated with our international operations.
Foreign exchange variability could materially and adversely affect our consolidated operating results.
Domestic and/or foreign jurisdictions may enact gross receipts taxes on our digital services which, if we are required to
pay, could materially adversely affect our cash flows and financial condition.
Foreign jurisdictions in which we operate may enact rules to address the tax challenges of the digitization of the global
economy, such as those from the Organization for Economic Co-operation and Development, which could have a material
adverse impact on our consolidated financial statements.
Our possession and use of personal information and the use of payment cards by our customers and users present risks and
expenses that could harm our business. Unauthorized access to or disclosure or manipulation of such data, whether through
breach of our, or our third-party service providers', network security or otherwise, could expose us to liabilities and costly
litigation and damage our reputation.
Privacy and security-related laws and other data security requirements are constantly evolving and may increase our
compliance costs and potential for liability, either of which may have an adverse effect on our business, financial condition,
and results of operations.
Defects, delays, or interruptions in the cloud-based hosting services we utilize, both directly and indirectly, could adversely
affect our reputation and operating results.
•
•
•
•
•
•
•
•
•
•
•
• We use artificial intelligence ("AI") and may use new technologies in our business, and challenges with properly managing
their use by us or third parties could result in reputational harm, competitive harm, and legal liability, and adversely affect
our results of operations.
Any significant increase in newsprint costs or disruptions in our newsprint supply chain, including as a result of
manufacturing facility closures and on-going capacity shifts between newsprint and specialty paper grades, transportation
and other issues that are challenging supplier deliveries, increased demand, and inflationary pressures, may materially and
adversely affect our business, results of operations and financial condition.
•
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•
•
The value of our goodwill and intangible assets may become impaired, which could materially and adversely affect future
reported results of operations.
If we fail to maintain proper and effective internal control over financial reporting, our operating results and our ability to
operate our business could be harmed.
• We may not be able to protect intellectual property rights upon which our business relies and, if we lose intellectual
property protection, our assets may lose value.
• We are subject to environmental and employee safety and health laws and regulations that could cause us to incur
significant compliance expenditures and liabilities.
The Internal Revenue Service may disallow all or part of a worthless stock loss and bad debt deduction.
•
• We may not be able to generate future taxable income which may prevent our realization of deferred tax assets or require
us to establish valuation allowances which could materially and adversely affect future reported results of operations.
• We are required to use a portion of our cash flows to make contributions to our pension plans, which diverts cash flow
•
from operations, and the amount of required future contributions may be difficult to estimate.
The loss of the services of any of our key personnel, reduced staffing levels, or our inability to attract qualified personnel in
the future may materially and adversely affect our ability to operate or grow our business effectively.
• We rely on equity-based compensation to attract, retain, and motivate our key employees, which may result in price
pressures on our Common Stock, stockholder dilution and increased usage of shares under our equity incentive plan during
periods in which our stock price is depressed. Our ability to continue a competitive long-term equity-based incentive
program required to attract and retain talent may be hindered, and alternative incentive models may cause our cash flows to
be reduced.
A shortage of skilled or experienced employees with the capabilities necessary to support our business strategies, or our
inability to retain such employees, could pose a risk to achieving our business objectives, which could materially adversely
affect our business and profitability.
A number of our employees are unionized, and our business and results of operations could be materially adversely
affected if current or additional labor negotiations or contracts were to further restrict our ability to maximize the efficiency
of our operations.
Sustained increases in costs of employee health and welfare benefits may reduce our profitability.
FIG LLC (the "Former Manager") is not liable to us for certain acts or omissions performed in accordance with, and prior
to the termination of, our former management agreement (the "Former Management Agreement"), and for certain matters
in connection with the termination of our relationship with the Former Manager, and we may incur liability for such acts or
omissions.
Our stock price is subject to volatility and there can be no assurance that the market for our stock will provide adequate
liquidity.
Our Common Stock may be delisted from the NYSE if we fail to comply with continued listing standards.
Sales or issuances of shares of our Common Stock, including upon conversion of the 2027 Notes, could materially
adversely affect the market price of our Common Stock.
•
•
•
•
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• We presently have no intention to declare or pay a dividend, the terms of our indebtedness restrict our ability to pay
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dividends, and we may not be able to pay dividends in the future or at all.
The percentage ownership of our existing stockholders may be diluted in the future, including upon conversion of the 2027
Notes, and holders of the 2027 Notes may possess significant voting power following conversion of the 2027 Notes.
An "ownership change" could limit our ability to utilize our net operating loss carryforwards and other tax attributes, which
could result in our payment of income taxes earlier than if we were able to fully utilize our net operating loss and other tax
benefit carryforwards.
Provisions in our amended and restated certificate of incorporation, our amended and restated bylaws and of Delaware law
may prevent or delay an acquisition of the Company, which could decrease the trading price of our Common Stock.
Our ability to compete may be materially and adversely affected if adequate capital is not available. In addition, future
offerings of debt securities, which would rank senior to our Common Stock upon our liquidation, and future offerings of
equity securities, which may be senior to our Common Stock for the purposes of dividend and liquidating distributions,
may be dilutive and materially and adversely affect the market price of our Common Stock.
Risks Related to Competition
We operate in a highly competitive business environment, and our success depends on our ability to compete effectively,
including through the implementation of our strategic initiatives and development of new and enhanced products and
services.
We face significant competition from other providers of news, information, and entertainment services, including both
traditional and other providers, some of which provide their products free of charge. This competition continues to intensify as
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a result of changes in technologies, platforms and business models and corresponding changes in consumer and customer
behavior, and we may be adversely affected if consumers or customers migrate to other alternatives. In addition, to be
successful, we must provide the type and quality of content our consumers desire. The number of choices available to
consumers for content consumption has increased and may adversely impact demand for, and the price consumers are willing to
pay for our products and services. Consumption of our content on third-party delivery platforms may also lead to loss of
distribution and pricing control, loss of a direct relationship with consumers and lower engagement and subscription rates.
Further, news and subscription fatigue among consumers has become more widespread and could continue to grow. These
trends and developments have adversely affected, and may continue to adversely affect, our circulation and subscription
revenue and advertisers' willingness to purchase advertising from us, as well as increase subscriber acquisition, retention, and
other costs.
Technological developments have in some cases also increased competition by lowering barriers to entry. Other digital
platforms and technologies, such as user-generated content platforms and self-publishing tools, have reduced the effort and
expense of producing and distributing certain types of content on a wide scale, allowing digital-only content providers,
customers, suppliers and other third parties to compete with us, often at a lower cost. Additional digital distribution channels,
such as digital marketplaces, have presented, and may continue to present, challenges to our business models, which could
adversely affect sales volume and pricing.
In addition, the competitive landscape may shift if other industry players adopt AI more swiftly. Furthermore, ethical
concerns and public sentiment regarding AI could have reputational implications. See also the risk factor below under the
heading "We use AI and may use new technologies in our business, and challenges with properly managing their use by us or
third parties could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of
operations."
In order to compete effectively, we must differentiate and distinguish our brands and our products and services, respond to
and develop new technologies, distribution channels and platforms, products and services, and anticipate and consistently
respond to changes in consumer and customer needs, preferences and behaviors. For example, we rely on brand awareness,
reputation and acceptance of our content and other products and services in order to retain and grow our consumers and
subscribers. However, consumer preferences change frequently and are difficult to predict, and when faced with a multitude of
choices, consumers may place greater value on the convenience and price of products and services than they do on their source,
quality, or reliability. Online traffic and product and service purchases are also driven by internet search results, referrals from
social media and other platforms and visibility on digital marketplace platforms and in mobile app stores. Search engine results
and digital marketplace and mobile app store rankings are based on algorithms that are changed frequently, and social media
and other platforms may also vary their emphasis on what content to highlight for users. Use of AI in search engines could
result in decreased viewership and engagement with our media content. Any failure to successfully manage and adapt to these
changes across our businesses, including those affecting how our content, apps, products, and services are discovered,
prioritized, displayed, and monetized, could impede our ability to compete effectively by significantly decreasing traffic to our
offerings, lowering advertiser interest in those offerings, increasing costs if free traffic is replaced with paid traffic and lowering
product sales and subscriptions. A loss in the expected popularity or discoverability of our content or other products and
services could have a material adverse effect on our business, financial condition, or results of operations.
We expect to continue to pursue new strategic initiatives and develop new and enhanced products and services in order to
remain competitive. We have incurred, and expect to continue to incur, significant costs in order to implement our strategies
and develop new products and services, as well as other costs to acquire, develop, adopt, upgrade and exploit new and existing
technologies and attract and retain employees with the necessary knowledge and skills to support our priorities. There can be no
assurance any of our strategic initiatives, products or services will be successful in the manner or time period or at the cost we
expect or that we will realize the anticipated benefits we expect to achieve. The failure to realize those benefits could have a
material adverse effect on our business, results of operations and financial condition.
Some of our current and potential competitors may have fewer regulatory burdens, better competitive positions in certain
areas, greater access to sources of content, data, technology or other services or strategic relationships or easier access to
financing, which may allow them to respond more effectively to changes in technology, consumer and customer needs,
preferences and behavior and market conditions. Continued consolidation among competitors in certain industries in which we
operate may increase these advantages, including through greater scale, financial leverage, or access to content, data,
technology and other offerings. If we are unable to compete successfully against existing or future competitors, our business,
results of operations and financial condition could be materially and adversely affected.
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Our indebtedness could materially and adversely affect our business or financial condition.
Risks Related to Our Indebtedness
Our indebtedness, incurred from time to time, could have significant consequences on our future operations, including
making it more difficult for us to satisfy our debt obligations and our other ongoing business obligations, which may result in
defaults, and limit our flexibility in planning for, or reacting to, and increasing our vulnerability to, changes in our business, the
industries in which we operate, and the overall economy. Our outstanding indebtedness includes the Senior Secured Term Loan,
the 2026 Senior Notes and the 2027 Notes (each as defined below). On October 15, 2021, Gannett Holdings LLC ("Gannett
Holdings"), our wholly-owned subsidiary, issued $400 million aggregate principal amount of 6.00% first lien notes due
November 1, 2026 (the "2026 Senior Notes") and entered into a five-year senior secured term loan facility in an original
aggregate principal amount of $516 million (the "Senior Secured Term Loan") with Citibank N.A., as collateral agent and
administrative agent for the lenders. In addition, on January 31, 2022, Gannett Holdings entered into an amendment to the
Senior Secured Term Loan to provide for incremental term loans (the "Incremental Term Loans") in an aggregate principal
amount not to exceed $50 million. In addition, on March 21, 2022, Gannett Holdings exchanged an aggregate principal amount
equal to $22.5 million of the 2026 Senior Notes for $22.5 million of new term loans under the Senior Secured Term Loan, and
on April 8, 2022, Gannett Holdings exchanged an aggregate principal amount equal to $7.5 million of the 2026 Senior Notes
for $7.5 million of new term loans under the Senior Secured Term Loan (collectively, the "Exchanged Term Loans"). All
obligations under the Senior Secured Term Loan (including the Incremental Term Loans and the Exchanged Term Loans,
unless otherwise specified) and the 2026 Senior Notes are secured by all or substantially all of the assets of the Company and
the wholly-owned domestic subsidiaries of the Company. We may incur additional indebtedness in the future.
The Senior Secured Term Loan matures on October 15, 2026, and bears interest at the Adjusted Term Secured Overnight
Financing Rate ("Adjusted Term SOFR") (which shall not be less than 0.50% per annum) plus a margin equal to 5.00% per
annum or an alternate base rate (which shall not be less than 1.50% per annum) plus a margin equal to 4.00% per annum.
Accordingly, we are required to dedicate a substantial portion of cash flow from operations to fund interest payments. The
Senior Secured Term Loan is amortized at $15.1 million per quarter (or, if the ratio of Total Indebtedness secured on an equal
priority basis with the Senior Secured Term Loan (net of Unrestricted Cash) to Consolidated EBITDA (as such terms are
defined in the Senior Secured Term Loan) for the most recently ended period of four consecutive fiscal quarters is equal to or
less than 1.20 to 1.00, $7.6 million per quarter). In addition, we are required to repay the Senior Secured Term Loan from time
to time with (i) the proceeds of non-ordinary course asset sales and casualty and condemnation events, (ii) the proceeds of
indebtedness that is not otherwise permitted under the Senior Secured Term Loan and (iii) the aggregate amount of cash and
cash equivalents on hand at the Company and its restricted subsidiaries in excess of $100 million as of the last day of any fiscal
year of the Company (beginning with the fiscal year ended December 31, 2021). Our debt service obligations reduce the
amount of cash flow available to fund our working capital, capital expenditures, investments and potential distributions to
stockholders. Moreover, there can be no assurance that we will be able to generate sufficient cash flow to satisfy our debt
service obligations. Our ability to satisfy our debt service obligations depends on our ability to generate cash flow from
operations, which is subject to a variety of risks, including general economic conditions and the strength of our competitors,
which are outside our control.
The terms of our indebtedness impose significant operating and financial restrictions on us. The Senior Secured Term
Loan, the 2026 Senior Notes, and the 6.0% Senior Secured Convertible Notes due 2027 (the "2027 Notes") require us to
comply with numerous affirmative and negative covenants, including, in the case of the New Senior Secured Loan and the 2027
Notes, a requirement to maintain minimum liquidity of $30.0 million at the end of each fiscal quarter, and restrictions limiting
our ability to, among other things, incur additional indebtedness, make investments and acquisitions, pay certain dividends, sell
assets, merge, incur certain liens, enter into agreements with our affiliates, change our business, engage in sale/leaseback
transactions, and modify our organizational documents. These requirements may make it impractical to declare and pay
dividends at any time that the requirements are in effect. Stockholders also should be aware that they have no contractual or
other legal right to dividends that have not been declared. See also "Risks Related to our Common Stock" below.
A failure to satisfy our debt service obligations on the Senior Secured Term Loan, a breach of a covenant in the Senior
Secured Term Loan, or a material breach of a representation or warranty in the Senior Secured Term Loan, among other events
specified in the Senior Secured Term Loan, could give rise to a default, which could give rise to the right of our lenders to
declare our indebtedness, together with accrued interest and other fees, to be immediately due and payable. A failure to satisfy
our debt service or conversion obligations on the 2026 Senior Notes or the 2027 Notes, among other events specified in the
Indenture dated as of October 15, 2021 (the "2026 Senior Notes Indenture") or the Indenture dated as of November 17, 2020, as
amended by the First Supplemental Indenture dated as of December 21, 2020 and the Second Supplemental Indenture dated as
of February 9, 2021 (collectively, the "2027 Notes Indenture"), could also give rise to a default, which could give rise to the
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right of noteholders to declare the principal of the 2026 Senior Notes and/or the 2027 Notes, together with accrued and unpaid
interest, to be immediately due and payable. A default under the Senior Secured Term Loan or any of our indentures could also
lead to a default under the other agreements governing our existing or future indebtedness (including the Senior Secured Term
Loan or any of our indentures, as the case may be). An acceleration of our indebtedness would have a material adverse effect on
our business, financial condition, results of operations, cash flows and stock price.
Certain actions, including our ability to incur additional indebtedness, require the consent of our lenders and note
holders which, if not provided, would limit our ability to take advantage of future opportunities.
Our loan agreements, including the Senior Secured Term Loan, the 2026 Senior Notes and the 2027 Notes, contain
restrictions and covenants that limit our ability to take certain actions without requisite lender approval, approval of the holders
of a majority in principal amount of the notes then outstanding, or modification of the loan agreements. These limitations
include restrictions on our ability to incur additional indebtedness or refinance our existing debt, make certain investments and
acquisitions, pay certain dividends, sell assets, merge, incur certain liens, enter into agreements with our affiliates, change our
business, engage in sale/leaseback transactions, and modify our organizational documents. While we have historically partnered
with lenders that we have established relationships with and whose priorities and interests are familiar to us, many of the
lenders or holders under the Senior Secured Term Loan and the holders of the 2026 Senior Notes are not historic relationships.
There is no assurance that these lenders will approve or consent to our activities, even if the activities are in the best interests of
our stockholders. If we are unable to secure the required consent of our lenders or noteholders, our ability to take advantage of
future opportunities, including acquisition or financing opportunities, could be restricted.
Our inability to raise funds necessary to repurchase the 2026 Senior Notes or the 2027 Notes, upon a change of control
as described in the 2026 Senior Notes Indenture or fundamental change as described in the 2027 Notes Indenture, may lead
to defaults under such indentures and under agreements governing our existing or future indebtedness. In addition, a
change of control may constitute a default under the Senior Secured Term Loan, the 2026 Senior Notes or the 2027 Notes.
Upon the occurrence of a change of control, as defined in the 2026 Senior Notes Indenture, we must, if certain other
conditions are met, make an offer to repurchase the 2026 Senior Notes at a price equal to 101% of the principal amount thereof,
together with any accrued and unpaid interest, if any, to, but excluding, the date of the repurchase. Similarly, upon the
occurrence of a fundamental change, as defined in the 2027 Note Indenture, we must, if certain other conditions are met, make
an offer to repurchase the 2027 Notes at a price equal to 110% of the principal amount thereof, together with any accrued and
unpaid interest, if any, to, but excluding, the date of the repurchase. If we become obligated to repurchase the 2026 Senior
Notes or 2027 Notes upon a change of control, we may not have enough available cash or may be unable to obtain financing at
the time we are required to make purchases of the notes being surrendered. In addition, our ability to repurchase the notes is
limited by the agreements governing our existing indebtedness (including the notes and the Senior Secured Term Loan) and
may also be limited by law or regulation, or by agreements that will govern our future indebtedness. Our failure to repurchase
the 2026 Senior Notes or 2027 Notes at a time when the repurchase is required by the 2026 Senior Notes Indenture or the 2027
Notes Indenture, respectively, would constitute a default under the respective indenture. A default under the governing
indenture or the change of control itself could also lead to a default under agreements governing our existing or future
indebtedness (including the Senior Secured Term Loan).
The Senior Secured Term Loan provides, and future credit agreements or other agreements relating to indebtedness to
which we become a party may provide, that the occurrence of certain change of control events with respect to Gannett would
constitute a default thereunder. If we experience a change of control event that triggers a default under our Senior Secured Term
Loan, we may seek a waiver of such default or may attempt to refinance the Senior Secured Term Loan. In the event we do not
obtain such a waiver or refinance the Senior Secured Term Loan, such default could result in amounts outstanding under our
Senior Secured Term Loan being declared due and payable.
The Senior Secured Term Loan, the 2026 Senior Notes, and the 2027 Notes contain, and future indebtedness that we may
incur may contain, prohibitions on the occurrence of certain events that would constitute a change of control or, in the case of
the 2026 Senior Notes and the 2027 Notes, require the repurchase of such indebtedness upon a change of control. Moreover, the
exercise by the holders of their right to require us to repurchase their 2026 Senior Notes or the 2027 Notes could cause a default
under such indebtedness, even if the change of control itself does not, due to the financial effect of such repurchase on us.
Finally, the ability to pay cash to the holders of the 2026 Senior Notes or the 2027 Notes following the occurrence of a change
of control may be limited by our then existing financial resources. There can be no assurance that sufficient funds will be
available when necessary to make any required repurchases.
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Risks Related to Digital Commerce and Media
Our strategy of growing our paid digital-only subscriber base may negatively impact advertising revenues in the near
term.
A key element of our consumer strategy is growing our paid digital-only subscriber base, which may lead to declines in our
existing advertising revenue. To implement our strategy and grow our paid digital-only subscriber base, we may need to restrict
certain content from non-subscriber access or limit the amount of content non-subscribers can view in an effort to encourage
non-subscribers to become paid digital subscribers. In the short-term, this strategy may reduce the number of unique visitors
accessing our content and, in turn, reduce our digital advertising revenue. Over time, the anticipated increase in the number of
paid digital-only subscribers is expected to increase our circulation revenue derived from paid digital-only subscribers as well
as our digital advertising revenues. However, there can be no assurance that we will be able to increase the number of our paid
digital-only subscribers in amounts or within the time periods we expect. If we are unable to grow or retain the volume of such
subscribers, our circulation and advertising revenues could decline materially and adversely affecting our results of operations
and financial condition.
Declining subscriber volume can also lead to more marked declines in advertising revenue. Print subscriber volume
declines directly impact preprint and other print revenues that are linked to the number of subscribers. In terms of digital
advertising revenues, news aggregation websites and customized news feeds (often free to users) reduce traffic on our websites
and related digital advertising revenues. While we do sell paid digital-only subscriptions for our content through some of these
news aggregators, we have reduced our ability to fully monetize those users since they do not engage with our content within
our own platforms. If traffic levels stagnate or decline, and/or print subscriber volume continues to decline, we may not be able
to maintain or increase the advertising rates or attract new advertising customers. Further, we are generally not compensated for
the consumption of our original content on third-party digital products and social platforms.
We may be unsuccessful in our efforts to execute our digital revenue strategy and optimize our revenue streams.
Print-related revenue streams have continued to decline at a significant pace. We have focused on offsetting traditional
print advertising and circulation revenue declines in part by diversifying our sources of revenue through the development and
acquisition of complementary businesses with growth potential. For example, our business USA TODAY NETWORK
Ventures produces local events.
There can be no assurance that we will be able to grow revenue from these or other complementary businesses we may
develop internally or acquire, or that any revenue generated by new business lines will be adequate to offset revenue declines
from our legacy businesses. For example, technological developments could adversely affect the availability, applicability,
marketability and profitability of the suite of SMB services we offer. Technological developments and any changes we make to
our business strategy may require significant capital investments, and such investments may be restricted by the Senior Secured
Term Loan.
These complementary businesses also face competition from various digital media providers, such as Google, which may
have more resources to invest in product development and marketing. Our salesforce may not be able to utilize the relationships
we have throughout our local property network to effectively sell these products. If we are unable to diversify our traditional
revenues with revenues from complementary businesses, we may experience persistent declines in revenue which could
materially and adversely affect our results of operations and financial condition.
Our DMS segment substantially utilizes online media acquired from third parties and our business could be materially
adversely affected if these companies take actions that are adverse to our interests or otherwise restrict our ability to do
business.
Our DMS segment substantially utilizes online media acquired from third parties, particularly Google, Facebook, and
Microsoft, which account for a large majority of all U.S. internet searches and traffic. These companies, and the other
companies with which we do business, have no obligation to conduct business with us, and may decide at any time and for any
reason to significantly curtail or inhibit our ability to do business with them. Additionally, any of these companies may make
significant changes to their respective business models, policies, systems, plans or ownership, and those changes could impair
or inhibit the manner in which they sell their advertising units or otherwise conduct their business with us. For example, new
privacy controls and tracking transparency frameworks that have been implemented or may be implemented in the future, by
platforms such as Facebook, Google, and Apple would limit our ability to access and use data from consumers through those
platforms, which we rely on for digital advertising and marketing. Any such controls or transparency frameworks may impair
our ability to market to consumers. Any new developments or rumors of developments regarding business practices at
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companies that affect the online advertising industry may materially and adversely affect our products or services, or create
perceptions with our clients that our ability to compete in the online marketing industry has been impaired.
Any required changes in targeting, such as the deprecation of third-party cookies, could materially and adversely impact
our advertising revenues and business results, and impair our ability to acquire consumers efficiently.
We use certain practices and techniques, such as utilizing third-party cookies, to enhance our customer’s online experience
by allowing us to customize and display relevant content and advertising. As a response to growing concern over data privacy,
third parties, including major browsers, are phasing out third-party cookies, commonly referred to as "cookie deprecation". For
example, Google Chrome has restricted third-party cookies by default for one percent of users and has announced that it will
phase out cookies for 100% of users in 2024. The industry-wide shift towards cookie deprecation presents a challenge as the
advertising industry has yet to find a universally accepted solution to address the impact on programmatic advertising. If we are
unable to find alternative strategies to address data privacy changes, our ability to provide certain types of advertising may be
compromised or may result in lower rates and revenues, and our business results could be materially and adversely affected. In
addition, cookie deprecation may result in difficulties delivering relevant audience targeting and our customer acquisition
strategies may become less efficient.
Risks Related to Macroeconomic Factors
Volatility in the U.S. and global economies, macroeconomic events, market disruptions, and other events outside of our
control, have had, and may in the future have, a material and adverse impact on our business, financial condition, and
results of operations.
Current and future conditions in the economy have an inherent degree of uncertainty and are impacted by political, market,
health and social events or conditions. As a result, it is difficult to estimate the level of growth or contraction for the economy
as a whole. It is even more difficult to estimate growth or contraction in various parts, sectors and regions of the economy,
including the markets in which we participate. We are currently operating in, and expect for the foreseeable future to continue
to operate in, a period of economic uncertainty and market volatility, including as a result of higher inflation, increased interest
rates, supply chain disruptions, fluctuating foreign currency exchange rates and other geopolitical events. These conditions have
had, and may continue to have, a negative impact on our business, including the demand for advertising and advertising
revenues.
Advertisers have responded, and may in the future respond, to such economic uncertainty by reducing their budgets or
shifting priorities or spending patterns, which has had and could have a material adverse impact on our business. Continued
declines in market spend or advertisers' changing priorities in response to any further economic slowdown or decline could have
a material adverse impact on our business.
Challenging economic conditions, especially higher inflation and interest rates, have had, and may continue to have, an
adverse impact on our consumers and consumer spending, which, in turn, could materially and adversely affect our business.
Discretionary purchases, including for our products and services, generally decline during periods of economic uncertainty,
when disposable income is reduced or when there is a reduction in consumer confidence.
Higher interest rates, which may continue to fluctuate, could result in increased borrowing costs which may negatively
affect our operating results. We are exposed to potential increases in interest rates associated with our Senior Secured Term
Loan. Further, if the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to
obtain in a timely manner, if at all, or on favorable terms, as well as more costly or dilutive. Further, rising interest rates may
negatively impact our ability to sell or dispose of our real estate and other assets which in turn may impact our ability to repay
debt.
Our operations in foreign jurisdictions have also been affected by volatile markets, uncertain economies, and geopolitical
and local events. We have been and will continue to be impacted by fluctuations in foreign currency exchange rates, primarily
related to our operations in the U.K.
We have been, and may continue to be, impacted by inflation, higher costs associated with labor, newsprint, ink, printing
plates, fuel, delivery costs and utilities, higher interest rates, and supply chain disruptions. Global or regional recessions,
perceived or actual, higher unemployment and declines in income levels may also materially and adversely affect our business
and financial condition.
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Adverse changes may also occur as a result of other events outside of our control, including pandemics and other health
crises, political uncertainties, hostilities or social unrest, war, terrorism or other similar events, declining oil prices, wavering
customer confidence, volatility in stock markets, contraction of credit availability, declines in real estate values, natural
disasters, severe weather events (which may occur with increasing frequency and intensity), or other factors affecting economic
conditions in general. These changes may negatively affect the sales of our products, increase exposure to losses from bad
debts, increase the cost and decrease the availability of financing, or increase costs associated with publishing and distributing
our publications. For example, the COVID-19 pandemic caused significantly increased economic and demand uncertainty,
inflationary pressure in the U.S., U.K. and elsewhere, supply chain disruptions, volatility in the capital markets, a decline in
consumer confidence, changes in consumer behavior, significant economic deterioration, and an increasingly competitive labor
market. The COVID-19 pandemic and the resulting business and travel restrictions led to decreased demand for our advertising
services, as well as reductions in the single copy and commercial distribution of our newspapers. Declining revenue may impair
our ability to generate sufficient cash flows to service our existing or any future debt obligations, including the Senior Secured
Term Loan, the 2026 Senior Notes, and the 2027 Notes. There can be no assurance that cost constraint actions, if any, taken in
response to the pandemic or any future crisis outside our control, will offset possible future impacts of the crisis. Any measures
taken to preserve cash flow and defer payments into future periods, such as the deferral of pension obligations in connection
with the COVID-19 pandemic, could have a greater impact on cash flow in future periods as we also incur such payments in the
normal course of business. Moreover, such measures, and other measures we may implement in the future in response to a
crisis, may negatively impact our reputation and our ability to attract and retain employees. See "Risks Related to Pension
Obligations and Employees" below. Accordingly, the COVID-19 pandemic had, and future events outside of our control may
have, the effect of heightening various risks described in this Annual Report on Form 10-K. Any sustained economic downturn
in the U.S. or any of the other countries in which we conduct significant business, other adverse macroeconomic events, market
disruptions, or other events outside of our control, could materially and adversely affect our business, operating results, and
financial condition.
Our ability to generate revenues is highly sensitive to the strength of the local economies in which we operate and the
demographics of the local communities that we serve.
Our advertising revenues and, to a lesser extent, circulation revenues, depend upon a variety of factors specific to the
communities that our publications serve. These factors include, among others, the size and demographic characteristics of the
local population, local economic conditions in general and the economic condition of the retail segments of the communities
that our publications serve. If the local economy, population or prevailing retail environment of a community we serve
experiences a downturn, our publications, revenues and profitability in that market could be materially and adversely affected.
Our advertising revenues are also susceptible to negative trends in the general economy that affect customer spending and is
impacted by other external factors such as competitors' pricing, and advertisers' decisions to increase or decrease their
advertising expenditures in response to anticipated consumer demand. The advertisers in our newspapers and other publications
and related websites are primarily retail businesses that can be significantly affected by regional or national economic
downturns and other developments. For example, many traditional retail companies continue to face greater competition from
online retailers and face uncertainty in their businesses, which has reduced and may continue to reduce their advertising
spending. Declines in the U.S. economy could also significantly affect key advertising revenue categories, including classified
ads such as help wanted, real estate, and automotive.
The collectability of accounts receivable under adverse economic conditions could deteriorate to a greater extent than
provided for in our financial statements and in our projections of future results.
Adverse economic conditions in the U.S. and in other areas where we operate may increase our exposure to losses resulting
from financial distress, insolvency and the potential bankruptcy of our advertising customers. Our accounts receivable is stated
at net estimated realizable value, and our allowance for doubtful accounts represents our best estimate of credit exposure and is
determined based on several factors, including the length of time the receivables are past due, historical payment trends and
current economic factors. If such collectability estimates prove inaccurate, adjustments to future operating results could occur.
Our financial results are subject to risks associated with our international operations.
Risks Related to International Operations
The Newsquest segment operates in the U.K., and the DMS segment has international sales operations in the U.K.,
Australia, New Zealand and Canada, as well as campaign support services in India. Revenue from international operations
comprised 10% of our total revenue for the year ended December 31, 2023. Our ability to manage these international operations
successfully is subject to numerous risks inherent in foreign operations, including:
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Challenges or uncertainties arising from unexpected legal, political, economic, 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 certain foreign countries;
Compliance with legal or regulatory requirements, including with respect to internet services, privacy and data
protection, censorship, banking and money transfers, and sale transactions, 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;
Difficulties in staffing and managing foreign operations, as well as the existence of workers' councils and labor unions,
which could make it more difficult to terminate underperforming employees;
Currency fluctuations and price controls or other restrictions on foreign currency; and
Potential adverse tax and legislation consequences, including difficulties in repatriating earnings generated abroad.
Any of the foregoing factors could materially and adversely impact our international operations, which could harm our
overall business, operating results, and financial condition.
In addition, the exit of the U.K. from the European Union ("Brexit") may continue to adversely affect economic and market
conditions in the U.K. and the European Union, create ongoing uncertainty around doing business in the U.K. and result in
additional costs and compliance obligations, including with respect to tariffs and other trade barriers, data protection and
transfer, tax rates and the recruitment and retention of employees. Further, there is no current trade agreement between the U.K.
and the U.S. The risk remains that Brexit, as well as the lack of a U.S.-U.K. trade agreement, could affect the attractiveness of
the U.K. as a global investment center and, as a result, could have a detrimental impact on economic growth in the country.
Foreign exchange variability could materially and adversely affect our consolidated operating results.
Our financial statements are denominated in U.S. dollars however, certain of our operations are conducted in currencies
other than our reporting currency because we conduct operations in foreign jurisdictions. For example, Newsquest operates in
the U.K., and its operations are conducted in foreign currency, primarily the British pound sterling. Weakening in the British
pound sterling to U.S. dollar exchange rate has in the past, and could in the future, diminish Newsquest's contributions to our
results of operations. If the value of currency in any of the jurisdictions where we conduct business weakens as compared with
the U.S. dollar, our operations in those jurisdictions similarly will contribute less to our results. Since our financial statements
are denominated in U.S. dollars, changes in foreign currency exchange rates between the U.S. dollar and other currencies have
had, and will continue to have, a currency translation impact on our earnings when the results of those operations that are
reported in foreign currencies are translated into U.S. dollars for inclusion in our consolidated financial statements, which
could, in turn, have a material adverse effect on our reported results of operations in a given period or in specific markets.
Domestic and/or foreign jurisdictions may enact gross receipts taxes on our digital services which, if we are required to
pay, could materially adversely affect our cash flows and financial condition.
The U.K. imposes a 2% Digital Services Tax ("DST") that applies to gross revenue of specified digital business models
deriving value from participation of their U.K.-based users. The tax is intended to apply to search engines, social media
platforms, and online marketplaces. Newsquest's revenue from its small online marketplace is currently below the threshold at
which the DST applies. If Newsquest's applicable revenues grew to exceed the threshold and/or if DST was to become
applicable more widely to online advertising, we may have to pay additional cash taxes, which could materially and adversely
affect our results of operations, financial condition, and cash flows.
Maryland enacted the first tax targeting digital advertising in the United States. The scaled rate between 2.5% and 10%
Digital Advertising Gross Revenues Tax will be imposed on annual gross revenues derived from digital advertising services.
The rate of tax varies depending on the amount of revenue a company earns. However, as amended, the legislation exempts
digital advertising by a "broadcast entity" or a "news media entity." Maryland's new digital advertising tax could be the
beginning of a wave of similar new taxes on digital advertising enacted by other states that are experiencing budget shortfalls
and economic distress. Adoption of similar taxes in U.S. states, particularly if such states do not exempt broadcast or news
media entities, could materially and adversely affect our results of operations, financial condition, and cash flows.
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Risks Related to International Tax Legislation
Foreign jurisdictions in which we operate may enact rules to address the tax challenges of the digitization of the global
economy, such as those from the Organization for Economic Co-operation and Development, which could have a material
adverse impact on our consolidated financial statements.
The Organization for Economic Co-operation and Development (the "OECD")/G20 Inclusive Framework on Base Erosion
and Profit Shifting has agreed on a two-pillar approach to address tax challenges arising from the digitalization of the global
economy by (i) allocating profits to market jurisdictions ("Pillar One") and (ii) ensuring multinational enterprises pay a
minimum level of tax regardless of where the headquarters are located or the jurisdictions in which the company operates
("Pillar Two"). Pillar One targets multinational groups with global revenue exceeding €20 billion and a profit-to-revenue ratio
of more than 10%. Companies subject to Pillar One will be required to allocate profits and pay taxes to market jurisdictions.
Pillar Two focuses on global profit allocation and a global minimum tax rate. In December 2022, the European Union ("EU")
Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of
15%, as established by the OECD Pillar Two Framework that was supported by over 130 countries worldwide. The EU Pillar
Two Directive became effective on January 1, 2024. Other countries are also actively considering changes to their tax laws to
adopt certain parts of the OECD's proposals. Based on the current proposed revenue and profit thresholds, we do not expect to
be subject to tax changes associated with Pillar One or Pillar Two, but will continue to evaluate the potential future impact of
both the proposals on our consolidated financial statements and related disclosures. The potential impact of any future rules or
regulations to address the tax challenges arising from the digitization of the global economy could have a material adverse
effect on our consolidated financial statements.
Risks Related to Cybersecurity and Artificial Intelligence
Our possession and use of personal information and the use of payment cards by our customers and users present risks
and expenses that could harm our business. Unauthorized access to or disclosure or manipulation of such data, whether
through breach of our, or our third-party service providers', network security or otherwise, could expose us to liabilities and
costly litigation and damage our reputation.
Our information systems, both online and on-premise, store and process confidential subscriber and other user data, such as
names, email addresses, phone numbers, addresses, and other personal information. Therefore, maintaining our network and
identity security is critical. In addition, we rely on the technology, systems, and services provided by third-party vendors and
outsourced service providers (including cloud-based service providers) for a variety of operations, including encryption and
authentication technology, employee email, domain name registration, content delivery to customers, administrative functions
(including payroll processing and certain finance and accounting functions), technology functions (including application
development and technology support functions) and other operations.
We regularly face risks related to cybersecurity incidents and threats, including attempts by malicious actors, which may be
external or internal threat actors, to breach our security and compromise our information technology systems. Because we are a
news reporting organization, these risks also include attempts by attackers to manipulate or misrepresent our news reporting.
Attackers may use a blend of technology and social engineering techniques (including denial of service attacks, phishing
attempts intended to induce our employees and users to disclose information or unwittingly provide access to systems or data,
and other techniques) to disrupt service or exfiltrate data. Cybersecurity incidents and threats are constantly evolving,
increasing the difficulty of detecting and successfully defending against them. We and the third parties with which we work
may be more vulnerable to the risk from activities of this nature as a result of operational changes such as significant increases
in remote work. To date, no cybersecurity incidents or threats have had, either individually or in the aggregate, a material
adverse effect on our business, financial condition, or results of operations.
In addition, our systems, and those of the third parties with which we work and on which we rely, may be vulnerable to
interruption or damage that can result from the effects of natural disasters or climate change (such as increased storm severity
and flooding); fires; power, systems or internet outages; acts of terrorism; pandemics; or other similar events.
We have implemented controls and taken other preventative measures designed to strengthen our systems against such
cybersecurity incidents and threats, including measures designed to reduce the impact of a security breach at our third-party
vendors and outsourced service providers. Efforts to prevent hackers from disrupting our service or otherwise accessing our
systems are expensive to develop, implement and maintain. These efforts require ongoing monitoring and updating as
technologies change and efforts to overcome security measures become more sophisticated and may limit the functionality of or
otherwise negatively impact our products, services, and systems. Although the costs of the controls and other measures we have
taken to date have not had a material effect on our financial condition, results of operations or liquidity, the costs and effort to
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respond to a cybersecurity incident or threat and/or to mitigate any security vulnerabilities that may be identified in the future
could be significant.
Additionally, we depend on the security of our third-party service providers and business partners. Unauthorized use of or
inappropriate access to our, or our third-party service providers' or business partners' networks, computer systems and services
could potentially jeopardize the security of confidential information of our customers or users, including payment card (credit
or debit) information. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage
systems change frequently and often are not recognized until launched against a target, we or our third-party service providers
or business partners may be unable to anticipate these techniques or to implement adequate preventative measures. Non-
technical means, such as actions or omissions by an employee or contractor, can also result in a data breach or other
cybersecurity incident. A party that is able to circumvent our security measures could misappropriate our proprietary
information or the information of our vendors, business partners, customers or users, cause interruption in our operations, or
damage our computers or those of our vendors, business partners, customers or users. As a result of any such breaches or
incidents, vendors, business partners, customers, users or other third parties may assert claims of liability against us and these
activities may subject us to governmental fines or penalties, legal claims, adversely impact our reputation, and interfere with our
ability to provide our products and services, all of which may have an adverse effect on our business, financial condition, and
results of operations. The coverage and limits of our insurance policies may not be adequate to reimburse us for losses caused
by security breaches or other cybersecurity incidents.
A significant number of our customers authorize us to bill their payment card accounts directly for all amounts charged by
us. These customers provide payment card information and other personally identifiable information which, depending on the
particular payment plan, may be maintained to facilitate future payment card transactions. Under payment card rules and our
contracts with our card processors, if there is a breach of payment card information that we store, we could be liable to the
banks that issue the payment cards for their related expenses and penalties. In addition, if we fail to follow payment card
industry data security standards, even if there is no compromise of customer information, we could incur significant fines or
lose our ability to give our customers the option of using payment cards. If we were unable to accept payment cards, our
business would be seriously harmed.
There can be no assurance that any security measures we, or our third-party service providers, take will be effective in
preventing a data breach. We may need to expend significant resources to protect against security breaches or to address
problems caused by breaches. If an actual or perceived breach of our security occurs, the perception of the effectiveness of our
security measures could be harmed and we could lose customers or users. Failure to protect confidential customer data or to
provide customers with adequate notice of our privacy policies could also subject us to liabilities imposed by international or
United States federal and state regulatory agencies or courts. We could also be subject to evolving international, federal and
state laws that impose data breach notification requirements, specific data security obligations, or other customer privacy-
related requirements. Our failure to comply with any of these laws or regulations may have an adverse effect on our business,
financial condition, and results of operations.
Privacy and security-related laws and other data security requirements are constantly evolving and may increase our
compliance costs and potential for liability, either of which may have an adverse effect on our business, financial condition,
and results of operations.
Many jurisdictions have enacted or are considering enacting privacy or data protection laws and regulations that apply to
the processing or protection of personal information. These laws and regulations may impose additional security breach
notification requirements, notice and consent requirements and specific data security obligations, and may also provide for a
private right of action or statutory damages. The compliance costs and operational burdens imposed by these laws and
regulations could be significant. Failure to protect confidential data, provide individuals with adequate notice of our privacy
policies or obtain required valid consent, could subject us to liabilities imposed by the jurisdictions where we operate. Further,
because some of our products and services are available on the internet, we may be subject to laws or regulations exposing us to
liability or compliance obligations even in jurisdictions where we do not have a substantial presence.
Existing privacy-related laws and regulations are evolving and are subject to potentially differing interpretations. Various
federal and state legislative and regulatory bodies, as well as foreign legislative and regulatory bodies, may expand current laws
or enact new laws regarding privacy and data protection. For example, the General Data Protection Regulation adopted by the
EU and the Data Protection Act of 2018 in the U.K. impose stringent data protection requirements and significant penalties for
noncompliance; California's Consumer Privacy Act created data privacy rights, which other states have implemented as well;
and the EU's anticipated ePrivacy Regulation is expected to impose, with respect to electronic communications and website
cookies, additional data protection and data processing requirements beyond those of the current EU ePrivacy Directive. Any
failure or perceived failure by us, or the third-party service providers upon which we rely, to comply with laws and regulations
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that govern our business operations, as well as any failure or perceived failure by us, or the third-party service providers upon
which we rely, to comply with our own posted policies, could result in claims against us by governmental entities or others,
negative publicity and a loss of confidence in us by our customers, users and advertisers. Each of these potential consequences
could materially adversely affect our business and results of operations.
Defects, delays, or interruptions in the cloud-based hosting services we utilize, both directly and indirectly, could
adversely affect our reputation and operating results.
Third-party subscription-based software services as well as public cloud infrastructure services are utilized to provide
solutions for many of our computing and bandwidth needs. Any interruptions to these services generally could result in
interruptions in service to our subscribers and advertisers and/or our critical business functions, notwithstanding any contractual
service level commitments, business continuity or disaster recovery plans or agreements that may currently be in place with
some of these providers. This could result in unanticipated downtime and/or harm to our operations, reputation, and operating
results. A transition from these services to different cloud providers would be difficult to implement and cause us to incur
significant time and expense. In addition, if hosting costs increase over time and/or if we require more computing or storage
capacity as a result of subscriber growth or otherwise, our costs could increase disproportionately.
We use AI and may use new technologies in our business, and challenges with properly managing their use by us or
third parties could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of
operations.
We have incorporated and may continue to incorporate AI solutions and other new technologies into our platform,
offerings, services and features, and these applications have become and may become important in our operations over time.
Our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us, which
could impair our ability to compete effectively and adversely affect our results of operations. If our competitors and other third
parties adopt AI applications that use our content without end users visiting our network of websites, our digital advertising and
subscription revenues could be reduced and we could lose additional monetization opportunities. The introduction of AI
applications into our business may disrupt our relationship with employees and/or result in labor disputes if the AI tools are
viewed as displacing work from newsrooms, which could adversely affect our business and results of operations. Additionally,
if the content, analyses, or recommendations that AI applications assist in producing, or our descriptions of our AI use in
contexts where we make AI disclosures, are or are alleged to be deficient, inaccurate, or biased, our reputation, business,
financial condition, and results of operations may be adversely affected.
The use of AI applications may result in cybersecurity incidents that implicate the personal data of end users of such
applications or other confidential data. Any such cybersecurity incidents related to our use of AI applications could adversely
affect our reputation and results of operations and expose us to civil litigation and/or regulatory actions. AI applications also
introduce risks to our ability to protect our intellectual property, to the extent large language models have used our content to
train AI tools. Similarly, if we use open-source AI applications, we could be subject to claims of infringement of others’
intellectual property, which could adversely affect our business and results of operations.
AI also presents emerging ethical and legal issues and our use of AI may result in brand or reputational harm, competitive
harm, or legal liability. The rapid evolution of AI, including proposed and future regulation of AI, such as the EU AI Act, could
significantly impact our business and will require significant resources to develop, test and maintain our platform, offerings,
services, and features to help us implement AI ethically and in a compliant manner in order to minimize unintended, harmful
impacts.
Additional Risks Related to Our Business
Any significant increase in newsprint costs or disruptions in our newsprint supply chain, including as a result of
manufacturing facility closures and on-going capacity shifts between newsprint and specialty paper grades, transportation
and other issues that are challenging supplier deliveries, increased demand, and inflationary pressures, may materially and
adversely affect our business, results of operations and financial condition.
Our ability to supply the needs of our print operations depends upon the continuing availability of newsprint at an
acceptable price, and our results of operations may be impacted significantly by changes in newsprint prices. The price of
newsprint has historically been volatile, and a number of factors may cause prices to increase, including capacity reductions
through the closure and consolidation of newsprint mills or the conversion of newsprint mills to other products or grades of
paper, which has reduced the number of newsprint suppliers over the years. North American newsprint is supplied by nine
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manufacturers with only three mills in the United States. Offshore exports are approaching 50% of total North America
shipments and will increase as domestic demand declines and global newsprint capacity is removed. North American suppliers
are becoming a larger share of the global market and consequently domestic supply is susceptible to longer delivery times and
pricing volatility tied to economic and geopolitical factors. An increase in supplier operating expenses due to, among other
things, rising raw material, energy, transportation and other distribution costs, and inflationary pressures impact the overall cost
of newsprint and delivery and lead to supply chain disruptions. We may not be able to secure alternative providers quickly and
cost-effectively, which could disrupt our printing and distribution operations or increase the cost of printing and distributing our
newspapers. Shortages of newsprint have historically resulted in, and may in the future result in, higher prices. We generally
maintain only a 30- to 55-day inventory of newsprint. The timely procurement of necessary production materials is critical and
any significant increase in the cost of newsprint, or undersupply or other significant disruption in the newsprint supply chain,
could have a material adverse effect on our business, results of operations and financial condition.
The value of our goodwill and intangible assets may become impaired, which could materially and adversely affect
future reported results of operations.
Our goodwill and indefinite-lived intangible assets, which include mastheads, are subject to annual impairment testing, and
more frequent testing upon the occurrence of certain events or significant changes in our circumstances, to determine whether
the fair value of such assets is less than their carrying value. In such a case, a non-cash charge to earnings may be necessary in
the relevant period, which could materially and adversely affect future reported results of operations. At December 31, 2023,
the carrying value of our goodwill, indefinite-lived intangible assets and amortizable intangible assets was $533.9 million,
$166.9 million and $357.5 million, respectively.
We performed goodwill and indefinite-lived intangible impairment tests in the fourth quarter of 2023 with the assistance of
third-party valuation specialists and determined that there were no goodwill or intangible impairments.
Management assumptions used to calculate fair value are highly subjective and involve forecasts of future economic and
market conditions and their impact on operating performance. Changes in key assumptions impacting the analyses could result
in the recognition of additional impairment. There can be no assurance that we will not be required to take an impairment
charge in the future which could have a material adverse effect on our results of operations. While we believe our judgments
represent reasonably possible outcomes based on available facts and circumstances, adverse changes to the assumptions,
including those related to macroeconomic factors, comparable public company trading values and prevailing conditions in the
capital markets, could lead to future declines in the fair value of a reporting unit. If our future operating results are not in line
with the cash flow forecasts underlying our impairment analysis, we could have an impairment of our goodwill or intangible
assets in the future and such impairment could materially affect our operating results. We continually evaluate whether current
factors or indicators, such as prevailing conditions in the business environment, capital markets or the economy generally, and
actual or projected operating results, require the performance of an interim impairment assessment of goodwill, as well as other
long-lived assets. For example, any significant shortfall, now or in the future, in advertising revenues or subscribers and/or
consumer acceptance of our products could lead to a downward revision in the fair value of certain reporting units.
If we fail to maintain proper and effective internal control over financial reporting, our operating results and our ability
to operate our business could be harmed.
The Sarbanes-Oxley Act and related rules and regulations require that management report annually on the effectiveness of
our internal control over financial reporting and assess the effectiveness of our disclosure controls and procedures on a quarterly
basis. Maintaining and adapting our internal controls is expensive and requires significant management attention. Moreover, as
we continue to evolve, our internal controls may become more complex and require additional resources to ensure they remain
effective amid dynamic regulatory and other guidance.
If we fail to maintain adequate internal controls, including any failure to implement required new or improved controls, or
if we experience difficulties in their implementation, we could fail to meet our financial reporting obligations and our business,
financial results as well as our reputation could be harmed.
We may not be able to protect intellectual property rights upon which our business relies and, if we lose intellectual
property protection, our assets may lose value.
Our business depends on our intellectual property, including, but not limited to, our titles, mastheads, content and
proprietary software, which we may attempt to protect through patents, copyrights, trade laws and contractual restrictions, such
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as confidentiality agreements. We believe our proprietary and other intellectual property rights are important to our success and
our competitive position.
Despite our efforts to protect our proprietary rights, unauthorized third parties may attempt to copy or otherwise obtain and
use our content, services and other intellectual property, and we cannot be certain that the steps we have taken will prevent any
misappropriation or confusion among consumers and merchants, or unauthorized use of these rights. If we are unable to
procure, protect and enforce our intellectual property rights, we may not realize the full value of these assets, and our business
may suffer. If we must litigate to enforce our intellectual property rights or determine the validity and scope of the proprietary
rights of third parties, such litigation may be costly and divert the attention of our management from day-to-day operations.
We are subject to environmental and employee safety and health laws and regulations that could cause us to incur
significant compliance expenditures and liabilities.
Our operations are subject to federal, state and local laws and regulations pertaining to the environment, storage tanks and
the management and disposal of wastes at our facilities. Under various environmental laws, a current or previous owner or
operator of real property may be liable for contamination resulting from the release or threatened release of hazardous or toxic
substances or petroleum at that property. Such laws often impose liability on the owner or operator without regard to fault, and
the costs of any required investigation or cleanup can be substantial. Although in connection with certain of our acquisitions we
have rights to indemnification for certain environmental liabilities, these rights may not be sufficient to reimburse us for all
losses that we might incur if a property acquired by us has environmental contamination. In addition, although in connection
with certain of our acquisitions we have obtained insurance policies for coverage for certain potential environmental liabilities,
these policies have express exclusions to coverage as well as express limits on amounts of coverage and length of term.
Accordingly, these insurance policies may not be sufficient to provide coverage for us for all losses that we might incur if a
property acquired by us has environmental contamination.
Our operations are also subject to various employee safety and health laws and regulations, including those pertaining to
occupational injury and illness, employee exposure to hazardous materials and employee complaints. Environmental and
employee safety and health laws tend to be complex, comprehensive and frequently changing. As a result, we may be involved
from time to time in administrative and judicial proceedings and investigations related to environmental and employee safety
and health issues. These proceedings and investigations could result in substantial costs to us, divert our management's attention
and adversely affect our ability to sell, lease or develop our real property. Furthermore, if it is determined that we are not in
compliance with applicable laws and regulations, or if our properties are contaminated, it could result in significant liabilities,
fines or the suspension or interruption of the operations of specific printing facilities.
Future events, such as changes in existing laws and regulations, new laws or regulations or the discovery of conditions not
currently known to us, may give rise to additional compliance or remedial costs that could be material.
The Internal Revenue Service may disallow all or part of a worthless stock loss and bad debt deduction.
We made an election in 2017 to treat one of our international subsidiaries as a disregarded entity for U.S. federal income
tax purposes, which resulted in worthless stock and bad debt deductions of $100.9 million, yielding a tax benefit of
$32.5 million. The Internal Revenue Service ("IRS") is auditing these tax deductions, and as such, the audit could result in the
reversal of all or part of the income tax benefit. To account for this uncertainty, a reserve of $11.3 million was established to
reduce the benefit to an estimated realizable value of $21.2 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 materially and 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.
We may not be able to generate future taxable income which may prevent our realization of deferred tax assets or
require us to establish valuation allowances which could materially and adversely affect future reported results of
operations.
We have deferred tax assets reported on our balance sheet, net of valuation allowances and deferred tax liabilities of $35.1
million. If we do not have taxable income in future years, we may be required to establish a valuation allowance against the
deferred tax assets that are not currently valued.
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Risks Related to Pension Obligations and Employees
We are required to use a portion of our cash flows to make contributions to our pension plans, which diverts cash flow
from operations, and the amount of required future contributions may be difficult to estimate.
We, along with our subsidiaries, sponsor various defined benefit retirement plans, including plans established under
collective bargaining agreements. Our retirement plans include (i) the Gannett Retirement Plan (the "GR Plan"), (ii) the
Newsquest and Romanes Pension Schemes in the U.K., (iii) the Newspaper Guild of Detroit Pension Plan, (iv) the George W.
Prescott Publishing Company Pension Plan and (v) the Times Publishing Company Defined Benefit Pension Plan.
Our pension plans invest in a variety of equity and debt securities. Future volatility and disruption in the equity and bond
markets could cause declines in the asset values of our pension plans. As of December 31, 2023, the value of our pension assets
exceeded our pension benefit obligations and our retirement plans were overfunded by approximately $125.9 million on a U.S.
generally accepted accounting principles ("U.S. GAAP") basis.
During the year ended December 31, 2023, we made $0.1 million in contributions to the GR Plan. Beginning with the
quarter ended December 31, 2022, and ending with the quarter ending September 30, 2024, the GR Plan's appointed actuary has
and will certify the GR Plan's funded status for each quarter (the "Quarterly Certification") in accordance with U.S. GAAP. If
the GR Plan is less than 100% funded, we will make a $1.0 million contribution to the GR Plan no later than 60 days following
the receipt of the Quarterly Certification, provided, however, that our obligation to make additional contractual contributions
will terminate the earlier of (a) the day following the date that a contractual contribution would be due for the quarter ending
September 30, 2024, and (b) the date we have made a total of $5.0 million of contractual contributions subsequent to June 30,
2022. 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. Various factors, including future
investment returns, interest rates, and potential pension legislative changes, may impact the timing and amount of future
pension contributions. In addition, changes in key assumptions used to determine minimum funding requirements could result
in increased future contributions. As a result, we may need to make additional pension contributions above what is currently
estimated, which could reduce the cash available for our businesses.
The loss of the services of any of our key personnel, reduced staffing levels, or our inability to attract qualified
personnel in the future may materially and adversely affect our ability to operate or grow our business effectively.
The success of our business depends heavily on our ability to retain knowledgeable, experienced personnel that execute
critical functions for us, any of whom may be difficult to replace. It will also be necessary for us to be able to continue to attract
and retain such qualified personnel in the future. Demand for experienced, capable talent remains intense and highly
competitive. As we continue to implement our business strategy and transform the organization, cost control initiatives have
resulted in a reduced workforce, causing management to operate with reduced capacity in some areas of our business. Reduced
staffing levels may materially and adversely affect our ability to conduct our operations and other functions effectively and
impact our profitability and cash flow, especially under economic pressures. Further, if we are unable to have competitive
compensation programs, the incentives provided by our securities or by other compensation and benefits arrangements are
ineffective, or there are perceived or actual limitations for growth opportunities, we may experience increased turnover and loss
of critical capabilities. Reduced talent acquisition capacity, limited employee investment and industry pressures, may further
challenge our ability to hire in a competitive market. While we have entered into letter agreements with certain of our key
personnel, these agreements do not ensure that such personnel will continue in their present capacity with us for any particular
period of time and we do not have agreements with all of our critical personnel. Further, we do not have key employee
insurance for any of our current management or other key personnel. The loss of any key personnel or critical employee would
require our remaining key personnel to divert immediate and substantial attention to seek a replacement. The loss of the
services of any of our existing key personnel, including senior officers and critical talent, as a result of competition or for any
other reason, or an inability to find a suitable replacement for any departing key employee on a timely basis could materially
and adversely affect our ability to operate or grow our business.
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We rely on equity-based compensation to attract, retain, and motivate our key employees, which may result in price
pressures on our Common Stock, stockholder dilution and increased usage of shares under our equity incentive plan during
periods in which our stock price is depressed. Our ability to continue a competitive long-term equity-based incentive
program required to attract and retain talent may be hindered, and alternative incentive models may cause our cash flows to
be reduced.
We rely upon equity awards including stock option awards, restricted stock awards, restricted stock units and preferred
stock units as a component of our employee and director compensation programs to align our directors', officers' and
employees' interests with the interests of our stockholders, to attract and retain key talent and provide competitive compensation
packages. During periods in which our stock price declines, we may be required to issue equity awards under the terms of our
existing incentive plan covering a larger number of shares than anticipated to meet the current market level of compensation
required to retain key employees given the strong demand for talent. We also may be required to use a greater percentage of our
cash flow for incentive, retention and hiring payments, which would reduce the cash flow available for other purposes and
could have a material adverse effect on our ability to attract and retain talent necessary to run our business. Our stock price also
may face incremental downward pressure as employees sell more shares into the market than anticipated. In addition,
stockholders may experience additional dilution to the extent we are required to seek, and we obtain, stockholder approval to
expand the size of our employee equity incentive pool in order to maintain a competitive compensation position.
A shortage of skilled or experienced employees with the capabilities necessary to support our business strategies, or our
inability to retain such employees, could pose a risk to achieving our business objectives, which could materially adversely
affect our business and profitability.
Production and distribution of our various publications and service lines requires skilled and experienced employees. We
need to hire and retain qualified employees to support our business strategies. We may be constrained in hiring and retaining
sufficient qualified employees due to general labor shortages, shifts in workforce availability or interest in our sector, any hiring
freeze we have or may in the future impose, any pandemic or public health crises, or due to challenging macroeconomic market
conditions. A shortage of such employees, as well as increased turnover rates, could have an adverse impact on our productivity
and costs, our ability to expand, develop and distribute new products, our entry into new markets, and our ability to achieve our
business goals. The cost of retaining or hiring such employees could exceed our expectations, which could materially and
adversely affect our results of operations and continued labor constraints may limit our profitability due to the impact of rising
wages.
A number of our employees are unionized, and our business and results of operations could be materially adversely
affected if current or additional labor negotiations or contracts were to further restrict our ability to maximize the efficiency
of our operations.
As of December 31, 2023, we employed approximately 10,000 employees in the U.S., of whom approximately 1,700 (or
approximately 17%) were represented by seven unions. 32% of the unionized employees are in four states: Michigan, Ohio,
Wisconsin and Indiana and represented 13%, 7%, 5% and 7% of all our union employees, respectively.
Although our newspapers have not experienced a union strike in the recent past nor do we anticipate a union strike to
occur, we cannot preclude the possibility that a strike may occur at one or more of our newspapers at some point in the future.
We believe that, in the event of a newspaper strike, we would be able to continue to publish and deliver to subscribers, which is
critical to retaining advertising and circulation revenues, although there can be no assurance of this. Further, settlement of actual
or threatened labor disputes or an increase in the number of our employees covered by collective bargaining agreements can
have unknown effects on our labor costs, productivity and flexibility.
Sustained increases in costs of employee health and welfare benefits may reduce our profitability.
In recent years, we have experienced significant increases in the cost of employee benefits because of economic factors
beyond our control, including increases in health care costs. Some of these factors may continue to put upward pressure on the
cost of providing medical benefits. Although we have actively sought to control increases in these costs, there can be no
assurance that we will succeed in limiting cost increases and continued upward pressure could reduce the profitability of our
businesses.
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Risks Related to the Termination of our Relationship with our Former Manager
Our Former Manager is not liable to us for certain acts or omissions performed in accordance with, and prior to the
termination of, the Former Management Agreement, and for certain matters in connection with the termination of our
relationship with the Former Manager, and we may incur liability for such acts or omissions.
Pursuant to, and prior to the termination of, the Former Management Agreement, the Former Manager assumed no
responsibility other than to render the services called for thereunder in good faith and was not responsible for any action of our
Board of Directors in following or declining to follow its advice or recommendations. The Former Manager, its members,
managers, officers and employees are not liable to us or any of our subsidiaries, to our Board of Directors, or our or any
subsidiary's stockholders or partners for any acts or omissions by the Former Manager, its members, managers, officers or
employees, except by reason of acts constituting bad faith, willful misconduct, gross negligence or reckless disregard of the
Former Manager's duties under the Former Management Agreement that occurred prior to its termination. Pursuant to the
Termination Agreement, our indemnification obligations to the Former Manager and its affiliates under the Former
Management Agreement survive its termination indefinitely. In addition, pursuant to the Termination Agreement, the Former
Manager will be held harmless with respect to certain acts and omissions performed in connection with the Termination
Agreement except by reason of acts or omissions constituting bad faith, willful misconduct, gross negligence or reckless
disregard of the Former Manager's performance under the Termination Agreement. As a result, we may incur liabilities as a
result of certain acts or omissions by the Former Manager, which could materially and adversely impact our business and
results of operations.
Risks Related to our Common Stock
Our stock price is subject to volatility and there can be no assurance that the market for our stock will provide adequate
liquidity.
The market price of our Common Stock may fluctuate widely, depending upon many factors, some of which may be
beyond our control. These factors include, without limitation:
•
•
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Risks and uncertainties associated with public health matters and other events outside of our control;
Our business profile and market capitalization may not fit the investment objectives of any stockholder;
A shift in our investor base;
Our quarterly or annual earnings, or those of other comparable companies;
Actual or anticipated fluctuations in our operating results;
Risks relating to our ability to meet long-term forecasts;
Announcements by us or our competitors of significant investments, acquisitions or dispositions, strategic
developments and other material events;
The failure of securities analysts to cover our Common Stock;
Changes in earnings estimates by securities analysts or our ability to meet those estimates;
The operating and stock price performance of other comparable companies;
Negative public perception of us, our competitors, or industry;
Overall market fluctuations;
Changes in accounting standards, policies guidance, interpretations or principles; and
General economic conditions.
In addition, our Board of Directors has authorized the repurchase of up to $100 million of our Common Stock (the "Stock
Repurchase Program"). The amount and timing of the purchases, if any, will depend on a number of factors, including, but not
limited to, the price and availability of the shares, trading volume, capital availability, Company performance and general
economic and market conditions. Further, future repurchases under our Stock Repurchase Program may be subject to various
conditions under the terms of our various debt instruments and agreements, unless an exception is available or we obtain a
waiver or similar relief. The Stock Repurchase Program will continue in effect until the approved dollar amount has been used
to repurchase shares or the program is terminated by further action of the Board of Directors. This repurchase program has no
termination date and may be suspended or discontinued at any time. The Stock Repurchase Program does not require us to
repurchase any specific number of shares of Common Stock or any shares of Common Stock at all. We cannot assure
stockholders that any specific number of shares of Common Stock, if any, will be repurchased under the Stock Repurchase
Program. The Company does not currently anticipate repurchasing any shares of Common Stock during the first quarter of
2024. Our stock repurchases, if any, could affect the trading price of our stock, the volatility of our stock price, reduce our cash
reserves, and may be suspended or discontinued at any time, which may result in a decrease in our stock price.
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Further, stock markets in general and recently have experienced volatility that has often been unrelated to the operating
performance of a particular company. These broad market fluctuations may adversely affect the trading price of our Common
Stock. Additionally, these and other external factors have caused and may continue to cause the market price and demand for
our Common Stock to fluctuate, which may limit or prevent investors from readily selling their shares of Common Stock and
may otherwise negatively affect the liquidity of our Common Stock.
Our Common Stock may be delisted from the NYSE if we fail to comply with continued listing standards.
Our Common Stock currently trades on the New York Stock Exchange ("NYSE"), and the continued listing of our
Common Stock on the NYSE is subject to our compliance with a number of listing standards, including minimum share price
requirements. If we fall out of compliance with NYSE's listing standards and fail to regain compliance within the applicable
cure periods, our Common Stock may be delisted from the NYSE. Failure to maintain our NYSE listing could negatively
impact us and our stockholders by reducing the willingness of investors to hold our Common Stock because of the resulting
decreased price, liquidity and trading of our Common Stock, and analyst coverage, among others.
Sales or issuances of shares of our Common Stock, including upon conversion of the 2027 Notes, could materially
adversely affect the market price of our Common Stock.
Sales or issuances of substantial amounts of shares of our Common Stock in the public market, or the perception that such
sales or issuances might occur, could adversely affect the market price of our Common Stock. The issuance of our Common
Stock in connection with property, portfolio or business acquisitions or the settlement of awards that may be granted under our
Incentive Plans (as defined below) or otherwise could also have an adverse effect on the market price of our Common Stock.
In accordance with the Investor Agreement among the Company and the holders of the 2027 Notes (the "Holders")
establishing certain terms and conditions concerning the rights and restrictions on the Holders with respect to the Holders'
ownership of the 2027 Notes, the Holders have certain registration rights with respect to the shares of Common Stock to be
issued upon conversion of the 2027 Notes. In addition, Holders who receive Common Stock upon conversion of the 2027 Notes
may be able to sell these shares of Common Stock pursuant to any applicable exemption under the Securities Act of 1933, as
amended, or the rules promulgated thereunder, including Rule 144, if applicable. If significant quantities of the Common Stock
are sold, or if it is perceived that they may be sold, the trading price of the Common Stock could be adversely affected.
We presently have no intention to declare or pay a dividend, the terms of our indebtedness restrict our ability to pay
dividends, and we may not be able to pay dividends in the future or at all.
We presently have no intention to declare or pay a dividend, and there can be no assurance that we will pay dividends in
the future.
Our Senior Secured Term Loan contains terms that restrict our ability to pay dividends or make other distributions. Under
the Senior Secured Term Loan, we can only pay cash dividends up to an agreed-upon amount and provided that the ratio of
Total Indebtedness secured on an equal priority basis with the Senior Secured Term Loan (net of Unrestricted Cash) to
Consolidated EBITDA (as such terms are defined in the Senior Secured Term Loan) does not exceed a specified ratio. The
2026 Senior Notes Indenture and the 2027 Notes Indenture contain similar dividend restrictions. The 2027 Notes Indenture also
provides that, at any time that the Company's Total Gross Leverage Ratio (as defined in the 2027 Notes Indenture) exceeds 1.5
and we approve the declaration of a dividend, we must offer to purchase a principal amount of 2027 Notes equal to the
proposed amount of the dividend. This repurchase offer requirement may make it impractical to declare and pay dividends at
any time that the requirement is in effect. Stockholders also should be aware that they have no contractual or other legal right to
dividends that have not been declared.
Any determination by our Board of Directors regarding dividends will depend on a variety of factors, including the
Company's U.S. GAAP net income, free cash flow generated from operations or other sources, liquidity position and potential
alternative uses of cash, such as acquisitions, as well as economic conditions and expected future financial results. There can be
no guarantee regarding the timing and amount of any dividends. Our ability to pay dividends in the future will depend on our
future financial performance, which, in turn, depends on the successful implementation of our strategy and on financial,
competitive, regulatory, technical and other factors, general economic conditions, demand and selling prices for our products,
and other factors specific to our industry or specific projects, many of which are beyond our control. Therefore, our ability to
generate free cash flow depends on the performance of our operations and could be limited by decreases in our profitability or
increases in costs, capital expenditures, or debt servicing requirements.
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The percentage ownership of our existing stockholders may be diluted in the future, including upon conversion of the
2027 Notes, and holders of the 2027 Notes may possess significant voting power following conversion of the 2027 Notes.
We have issued and may continue to issue equity in order to raise capital or in connection with future acquisitions and
strategic investments, which would dilute investors' percentage ownership in Gannett. In addition, a stockholder's percentage
ownership may be diluted if we issue equity instruments such as debt and equity financing. Further, the percentage ownership
of our existing stockholders may be diluted in the future as a result of any issuances of our shares upon exercise of any
outstanding options or warrants, or issuances of shares under our equity incentive plans.
To the extent that we raise additional capital through the sale of equity or convertible debt securities (such as the 2027
Notes), a stockholder's ownership interest in our Company may be diluted, and the terms of these securities may include
liquidation or other preferences that adversely affect a stockholder's rights. Debt and equity financings, if available, may
involve agreements that include covenants limiting or restricting our ability to take specific actions, such as redeeming our
shares, making investments, incurring additional debt, making capital expenditures, declaring dividends or placing limitations
on our ability to acquire, sell or license intellectual property rights.
The percentage ownership of our existing stockholders may be diluted in the future as result of the issuance of Common
Stock due to conversion of the 2027 Notes. Each 2027 Note may be converted into shares of Common Stock at an initial
conversion rate of 200 shares of Common Stock per $1,000 principal amount of Notes (subject to adjustment as provided in the
Indenture, the "Conversion Rate"). Based on the number of shares outstanding on February 16, 2024, conversion of all of the
2027 Notes into Common Stock (assuming no adjustments to the Conversion Rate) would result in the issuance of an aggregate
of 97.1 million shares of the Common Stock representing approximately 39% of the shares outstanding as of February 16, 2024
and conversion of all of the 2027 Notes into Common Stock (assuming the maximum increase in the Conversion Rate as a
result of certain events, including, subject to exceptions as described in the Indenture, the acquisition of 50% or more of voting
power of our securities by a person or group, a stockholder-approved liquidation of us, the delisting of our Common Stock, or
certain changes of control, but no other adjustments to the Conversion Rate) would result in the issuance of an aggregate of
287.2 million shares of the Common Stock representing approximately 66% of the shares outstanding as of February 16, 2024.
To our knowledge, a majority in aggregate principal amount of the 2027 Notes are held by entities controlled, managed or
advised by a large financial sponsor. In the event that a holder of a majority or even a significant portion of the 2027 Notes
were to convert their notes into Common Stock, such a holder could possess significant voting power with respect to our
Common Stock and may have interests that are different from, or adverse to, the interests of our other stockholders. From time
to time, investors (including holders of a significant portion of the 2027 Notes) may acquire additional 2027 Notes or shares of
Common Stock, and we are unable to predict or monitor such ownership.
Any sales in the public market of the Common Stock issuable upon such conversion could adversely affect prevailing
market prices of our Common Stock. In addition, the existence of the 2027 Notes may encourage short selling by market
participants because the conversion of the 2027 Notes could be used to satisfy short positions. Further, the anticipated
possibility of conversion of the 2027 Notes into shares of our Common Stock could depress the price of our Common Stock.
An "ownership change" could limit our ability to utilize our net operating loss carryforwards and other tax attributes,
which could result in our payment of income taxes earlier than if we were able to fully utilize our net operating loss and
other tax benefit carryforwards.
Federal and state tax laws impose restrictions on the utilization of net operating loss ("NOL") carryforwards and other tax
attributes in the event of an "ownership change" as defined by Section 382 of the Code ("Section 382"). Generally, an
"ownership change" occurs if the percentage of the value of the stock that is owned by one or more direct or indirect "five
percent stockholders" increases by more than 50% over their lowest ownership percentage at any time during an applicable
testing period (typically, three years). Under Section 382, if a corporation undergoes an "ownership change," such corporation's
ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its income may be limited. While
no "ownership change" has resulted in annual limitations, future changes in our stock ownership, which may be outside of our
control, may trigger an "ownership change." In addition, future equity offerings or acquisitions that have equity as a component
of the consideration could result in an "ownership change." Furthermore, the issuance of Common Stock upon the conversion of
the 2027 Notes (in the event we elect to issue Common Stock upon any such conversions, rather than cash), may trigger an
"ownership change." If an "ownership change" occurs in the future, utilization of our NOL carryforwards or other tax attributes
may be limited, which could potentially result in increased future tax liability to us.
Provisions in our amended and restated certificate of incorporation, our amended and restated bylaws and of Delaware
law may prevent or delay an acquisition of the Company, which could decrease the trading price of our Common Stock.
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Our amended and restated certificate of incorporation, our amended and restated bylaws and Delaware law contain
provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids
unacceptably expensive to the raider and to encourage prospective acquirers to negotiate with our Board of Directors rather than
to attempt a hostile takeover. These provisions provide for:
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Amendment of provisions in our amended and restated certificate of incorporation and amended and restated bylaws
regarding the election of directors, the term of office of directors, the filling of director vacancies and the resignation
and removal of directors only upon the affirmative vote of at least 80% of the then issued and outstanding shares of
our capital stock entitled to vote thereon;
Amendment of provisions in our amended and restated certificate of incorporation regarding corporate opportunity
only upon the affirmative vote of at least 80% of the then issued and outstanding shares of our capital stock entitled to
vote thereon;
Removal of directors only for cause and only with the affirmative vote of at least 80% of the voting interest of
stockholders entitled to vote in the election of directors;
Our Board of Directors to determine the powers, preferences and rights of our preferred stock and to issue such
preferred stock without stockholder approval;
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws prevent
stockholders from calling special meetings of our stockholders;
Advance notice requirements applicable to stockholders for director nominations and actions to be taken at annual
meetings;
A prohibition, in our amended and restated certificate of incorporation, stating that no holder of shares of our Common
Stock will have cumulative voting rights in the election of directors, which means that the holders of majority of the
issued and outstanding shares of our Common Stock can elect all the directors standing for election; and
Action by our stockholders outside a meeting, in our amended and restated certificate of incorporation and our
amended and restated bylaws, only by unanimous written consent.
Public stockholders who might desire to participate in these types of transactions may not have an opportunity to do so,
even if the transaction is considered favorable to stockholders. These anti-takeover provisions could substantially impede the
ability of public stockholders to benefit from a change in control or a change in our management and Board of Directors and, as
a result, may adversely affect the market price of our Common Stock and a stockholder's ability to realize any potential change
of control premium.
Our ability to compete may be materially and adversely affected if adequate capital is not available. In addition, future
offerings of debt securities, which would rank senior to our Common Stock upon our liquidation, and future offerings of
equity securities, which may be senior to our Common Stock for the purposes of dividend and liquidating distributions, may
be dilutive and materially and adversely affect the market price of our Common Stock.
Our ability to be competitive in the marketplace is dependent on the availability of adequate capital. We may raise
additional capital through the issuance of debt or equity securities (including preferred stock) from time to time. There is no
guarantee that we will file or have an effective shelf registration statement on file with the SEC, which could impact our ability
to engage in future offerings and could impair our ability to raise additional capital quickly in response to changing
requirements and market conditions.
In addition, upon liquidation, holders of our debt securities (including holders of our 2026 Senior Notes and 2027 Notes)
and preferred stock, if any, and lenders with respect to other borrowings (including the lenders under the Senior Secured Term
Loan) will be entitled to our available assets prior to the holders of our Common Stock. Preferred stock could have a preference
on liquidating distributions or a preference on dividend payments that could limit our ability to pay dividends to the holders of
our Common Stock.
Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other
factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, holders of
our Common Stock bear the risk of our future offerings reducing the market price of our Common Stock and diluting the value
of their holdings in our stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
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Cybersecurity Risk Management and Strategy
We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats
(as such term is defined in Item 106(a) of Regulation S-K), including, among other things, operational risks, intellectual
property theft, fraud, extortion, harm to employees or customers, violation of privacy or security laws and other litigation and
legal risks, and reputational risks.
We employ various cybersecurity processes and controls to aid in our efforts to identify, assess, and manage our material
risks from cybersecurity threats and to protect against, detect, and respond to cybersecurity incidents (as such term is defined in
Item 106(a) of Regulation S-K). To identify and assess material risks from cybersecurity threats, we consider and gather
information with respect to the confidentiality, integrity, and availability of our information systems (as defined in Item 106(a)
of Regulation S-K). We have adopted policies and procedures that are designed to assist us with managing identified risks at a
system and organizational level and assessing the materiality of the risk, its severity, and potential mitigations or remediations.
Our enterprise risk management program considers cybersecurity threat risks alongside other company risks as part of our
overall risk assessment process.
The risk identification process includes: (i) identifying information systems and assets, including physical and virtual
devices, software, data, data transfers, external systems, and cloud resources; (ii) reviewing organizational business processes,
identities, access, and roles (including privileged access), asset configurations, technology policies, standards, controls, and
processes; (iii) analyzing the criticality of assets and business processes and sensitivity of data; and (iv) identifying
vulnerabilities and threats to the identified assets, data, and processes, from both internal and external sources, including threat
intelligence, previous cybersecurity incidents, and third-party assessments.
Our processes also consider risks associated with our use of third-party service providers and business partners, including
those in our supply chain or who have access to our customer and employee data or our information systems. Third-party
service provider and business partners risks are included within our cybersecurity risk management program, as well as the risk
identification and assessment processes, both of which are discussed above. In addition, cybersecurity and privacy
considerations affect the selection and oversight of our third-party service providers and business partners, as well as third-party
specific integration plans. Additionally, we generally require those third parties that could introduce significant cybersecurity
risk to us to agree by contract to manage their cybersecurity risks in a specified manner, and to agree to be subject to
cybersecurity audits, which we conduct as appropriate.
We employ a range of tools and services to inform our risk preparedness, identification, assessment and remediation
processes, including, among others, continuous monitoring, regular reoccurring security and compliance activities, training,
threat intelligence, business processes, change management, strategic planning, annual assessments, and periodic testing and
assessments performed by qualified security personnel and by third-party firms. As part of the above-described processes, we
engage with third-party firms to perform independent assessments, including internal and external penetration tests, social
engineering tests, configuration assessments, security plan and program assessments, compliance assessments, and incident
response readiness exercises to help identify areas for continued focus, improvement and/or compliance.
Identified risks are evaluated and assessed by the Company's security review council, comprised of various security,
technology, and privacy staff members and management. A member of management is assigned as the risk owner and takes an
active role in managing the risk, including determining the risk response and risk treatment plan, as well as participates in
assessing any residual risk. Our Chief Information Security Officer oversees our cybersecurity risk management program.
In the event of a potential material risk, the risk is reported to the Chief Information Security Officer, the Chief Technology
Officer, and to the appropriate member of senior management responsible for the function where the risk has been identified.
The risk is then reviewed by the Disclosure Committee, which includes among others, the Company's Chief Executive Officer,
Chief Financial Officer, Chief Legal Officer, and Chief Accounting Officer to make a determination of whether the risk is
material.
In 2023, our business strategy, results of operations, and financial condition have not been materially affected by risks from
cybersecurity threats but we cannot provide assurance that they will not be materially affected in the future by such risks or any
future material incidents. We describe whether and how risks from identified cybersecurity threats, including as a result of any
previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business
strategy, results of operations, or financial condition, under the heading "Risks Related to Cybersecurity and Artificial
Intelligence" under Risk Factors in this Annual Report on Form 10-K, which disclosures are incorporated by reference herein.
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Cybersecurity Governance
Cybersecurity is an important part of our risk management processes and an area of increasing focus for our Board of
Directors and management. Our Board of Directors is responsible for the oversight of risks from cybersecurity threats. Each
quarter or as needed, the Board of Directors receives an overview from management of our cybersecurity program and strategy
covering topics such as cybersecurity incidents and response, progress towards pre-determined risk-mitigation-related goals,
results from third-party assessments, cybersecurity staffing, compliance status, and material cybersecurity threat risks or
incidents and developments, as well as the steps management has taken to respond to any such risks. In such sessions, our Chief
Information Security Officer is available to the Board of Directors to discuss any relevant cybersecurity matters. In addition, at
least bi-annually, the Chief Information Security Officer and Chief Technology Officer report to the Board of Directors about
cybersecurity threat risks, among other cybersecurity related matters.
Our cybersecurity risk management and strategy processes discussed above, are led by our Chief Information Security
Officer and Chief Technology Officer, both of whom are Certified Information Systems Security Professionals ("CISSP").
Specifically, our Chief Information Security Officer has approximately nine years of experience developing cybersecurity
strategy, incident response, and implementing cybersecurity programs for public media companies and our Chief Technology
Officer has approximately 15 years of experience developing cybersecurity strategy, incident response, and implementing
cybersecurity programs.
ITEM 2. PROPERTIES
Historically, our corporate headquarters has been located in McLean, Virginia, where we lease approximately 176 thousand
square feet, under a lease terminating in October 2030. The Company has decided to relocate its corporate headquarters to its
executive offices located in New York, New York and exit, cease use and continue to seek subleases for its McLean facility.
Effective March 31, 2024, our new corporate headquarters will be located in New York, New York, which occupies
approximately 24 thousand square feet, under a lease agreement terminating in May 2031. We also have an executive office in
Pittsford, New York, where we lease approximately 7 thousand square feet, under a lease agreement terminating in December
2026.
Our domestic facilities occupy approximately 6.1 million square feet in the aggregate, of which approximately 4.5 million
square feet are 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 can be found in Item
1. Business, under "Major Publications and Markets We Serve." 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, U.K., occupies approximately 698 thousand square feet in the U.K.
spread over 60 locations. Of this, approximately 339 thousand square feet spread over 46 locations are leased from third parties,
including three production facilities. Included in Newsquest's 14 owned premises is one production facility.
Our digital marketing services companies under the brand LocaliQ is headquartered in Woodland Hills, California, and has
sales and other offices and data centers in two locations in two states: California and Texas. In addition, LocaliQ has eleven
locations in four other countries: Australia, India, New Zealand, and the Netherlands. These properties include leased buildings
and data centers. In total, LocaliQ properties occupy approximately 161 thousand square feet. 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 Senior
Secured Term Loan. We believe 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 13 — Commitments, contingencies and other matters —
Legal Proceedings of the notes to the Consolidated financial statements, which is incorporated herein by reference.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
Market Information and Holders
Our Common Stock trades on the NYSE under the trading symbol "GCI." As of February 16, 2024, there were
approximately 3,916 holders of record of our Common Stock.
Dividends
We presently have no intention to declare or pay a dividend, and there can be no assurance that we will pay dividends in
the future. In addition, the terms of our indebtedness, including the Senior Secured Term Loan, the 2026 Senior Notes Indenture
and the 2027 Notes Indenture, have terms that restrict our ability to pay dividends.
Issuer Purchases of Equity Securities
In February 2022, our Board of Directors authorized the repurchase of up to $100 million (the "Stock Repurchase
Program") of our Common Stock, par value $0.01 per share. Repurchases may be made from time to time through open market
purchases or privately negotiated transactions, pursuant to one or more plans established pursuant to Rule 10b5-1 under the
Securities Exchange Act of 1934, as amended, or by means of one or more tender offers, in each case, as permitted by securities
laws and other legal requirements. The amount and timing of the purchases, if any, will depend on a number of factors,
including, but not limited to, the price and availability of the Company's shares, trading volume, capital availability, Company
performance and general economic and market conditions. The Stock Repurchase Program may be suspended or discontinued
at any time. Further, future repurchases under our Stock Repurchase Program may be subject to various conditions under the
terms of our various debt instruments and agreements, unless an exception is available or we obtain a waiver or similar relief.
The Stock Repurchase Program will continue in effect until the approved dollar amount has been used to repurchase shares or
the program is terminated by further action of the Board of Directors. The Stock Repurchase Program does not require us to
repurchase any specific number of shares of Common Stock or any shares of Common Stock at all. We cannot assure
stockholders that any specific number of shares of Common Stock, if any, will be repurchased under the Stock Repurchase
Program.
During the year ended December 31, 2023, we did not repurchase any shares of Common Stock under the Stock
Repurchase Program. As of December 31, 2023, the remaining authorized amount under the Stock Repurchase Program was
approximately $96.9 million. The Company does not currently anticipate repurchasing any shares of Common Stock during the
first quarter of 2024.
ITEM 6. [RESERVED]
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
We are a diversified media company with expansive reach at the national and local level dedicated to empowering and
enriching communities. We seek to inspire, inform, and connect audiences as a sustainable, growth focused media and digital
marketing solutions company. We endeavor to deliver essential content, marketing solutions, and experiences for curated
audiences, advertisers, consumers, and stakeholders by leveraging our diverse teams and suite of products to enrich the local
communities and businesses we serve.
Our current portfolio of trusted media brands includes the USA TODAY NETWORK, comprised of the national
publication, USA TODAY, and local media organizations in the United States (the "U.S."), and Newsquest, a wholly-owned
subsidiary operating in the United Kingdom (the "U.K."). Our digital marketing solutions brand, LocaliQ, uses innovation and
software to enable small and medium-sized businesses ("SMBs") to grow, and USA TODAY NETWORK Ventures, our events
division, creates impactful consumer engagements, promotions, and races.
Through USA TODAY, our network of local properties, and Newsquest, we deliver high-quality, trusted content with a
commitment to balanced, unbiased journalism, where and when consumers want to engage. We have strong relationships with
hundreds of thousands of local and national businesses in both our U.S. and U.K. markets due to our large local and national
sales forces and a robust advertising and digital marketing solutions product suite. Our strategy prioritizes maximizing the
monetization of our audience through the growth of increasingly diverse and highly recurring digital businesses. We expect the
execution of this strategy to enable us to continue our evolution to a predominantly digital media company. We deliver value to
our customers, advertisers, partners and shareholders with essential content, joyful experiences, and relevant digital solutions.
We report in three segments: Domestic Gannett Media, Newsquest and Digital Marketing Solutions ("DMS"). We also
have a Corporate and other category that includes activities not directly attributable to a specific reportable segment and
includes broad corporate functions, such as legal, human resources, accounting, analytics, finance, marketing and technology,
as well as other general business costs. Effective with the fourth quarter of 2023, we are reporting financial information for our
Newsquest business in a separate segment. Previously, the financial information for this segment was aggregated with Domestic
Gannett Media and, together, formed the Gannett Media reportable segment. As a result, we have revised our historical
disclosures to reflect the new Domestic Gannett Media and Newsquest reportable segments for all years presented. A full
description of our reportable segments is included in Note 14 — Segment reporting in the notes to the Consolidated financial
statements.
Business Trends
We have considered several industry trends when assessing our business strategy:
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Print advertising and circulation revenues continue to decline as our audience increasingly moves to digital platforms.
We seek to optimize our print operations to efficiently manage for the declining print audience. We are focused on
converting a growing digitally-focused audience into paid digital-only subscribers to our publications.
Inflationary prices across a number of categories such as labor, fuel, delivery costs, newsprint, ink, and printing plates
have had and are expected to continue to have a negative impact on our overall cost structure year-over-year. In the
short term, we believe the impact of inflationary pressure peaked in 2022.
Our revenues and results of operations have been and can be significantly influenced by general macroeconomic
conditions, including, but not limited to, interest rates, inflation, housing demand, employment levels, and consumer
confidence. We believe that these factors are contributing to uncertainty in SMBs, which is resulting in lower levels of
advertising performance and reduced spending in categories such as home services.
Data privacy standards continue to evolve and implementation of standards may result in incremental costs. Privacy
standards, such as third-party cookie deprecation, are anticipated to impact the advertising industry more significantly
in 2024. We utilize first-party data to assist our customer's advertising needs but an industry-wide solution to address
impacts to programmatic advertising has not yet been developed.
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Recent Developments
Debt repurchase
In November 2023, we received a waiver from certain lenders of our five-year senior secured term loan facility in an
original aggregate principal amount of $516.0 million (the "Senior Secured Term Loan") that reduced the scheduled quarterly
amortization payments payable to those lenders by $12.0 million for the three months ended December 31, 2023, so long as
such reduced amount was used to purchase a portion of our 6.00% first lien notes due November 1, 2026 (the "2026 Senior
Notes") at a discount to par value. In November 2023, we entered into a privately negotiated agreement with certain holders of
our $400 million aggregate principal amount of 2026 Senior Notes, and repurchased $14.0 million of principal of our
outstanding 2026 Senior Notes at a discount to par value. As a result of this repurchase of our 2026 Senior Notes, we
recognized a net gain on the early extinguishment of debt of approximately $1.4 million during the fourth quarter of 2023,
which included the write-off of unamortized original issue discount and deferred financing costs.
In addition, during the fourth quarter of 2023, we repaid approximately $9.9 million of our Senior Secured Term Loan,
including quarterly amortization payments. As a result of the repayment related to our Senior Secured Term Loan, we
recognized a net loss on the early extinguishment of debt of approximately $0.1 million during the fourth quarter of 2023,
which included the write-off of unamortized original issue discount and deferred financing costs.
Corporate office relocation
On February 15, 2024, we decided we will relocate our corporate headquarters from McLean, Virginia to our existing
leased office space in New York, New York effective March 31, 2024. We will exit, cease use and continue to seek subleases
for our leased facility in McLean. As a result of the headquarters relocation, we expect to record impairment charges of
approximately $45.0 million during the three months ended March 31, 2024 related to the McLean operating lease right-of-use
asset and the associated leasehold improvements.
Certain Matters Affecting Comparability
The following items affect period-over-period comparisons and will continue to affect period-over-period comparisons for
future results:
(Gain) loss on sale or disposal of assets, net
For the year ended December 31, 2023, we recognized a net gain on the sale of assets of $40.1 million, primarily related to
net gains of $38.9 million at the Domestic Gannett Media segment due to the sales of production facilities as part of our plan to
monetize non-core assets, and a gain of $1.4 million at our Corporate and other category related to the sale of intellectual
property.
For the year ended December 31, 2022, we recognized a net gain on the sale of assets of $6.9 million, primarily related to
net gains of $6.7 million at the Domestic Gannett Media segment, mainly driven by the sales of production facilities as part of
our plan to monetize non-core assets.
For the year ended December 31, 2021, we recognized a net loss on the sale of assets of $17.2 million, primarily related to
a net loss of $27.4 million at the Domestic Gannett Media segment, partially offset by a net gain of $9.9 million at the
Newsquest segment, mainly driven by the sales of production facilities as part of our plan to monetize non-core assets.
Integration and reorganization costs
For the year ended December 31, 2023, we incurred Integration and reorganization costs of $24.5 million. Of the total costs
incurred, $18.5 million were related to severance activities and $6.0 million were related to other costs, including costs for
consolidating operations, primarily related to costs associated with systems implementation and the outsourcing of corporate
functions, partially offset by the reversal of withdrawal liabilities related to multiemployer pension plans of $6.4 million based
on settlement of the withdrawal liabilities.
For the year ended December 31, 2022, we incurred Integration and reorganization costs of $88.0 million. Of the total costs
incurred, $57.6 million were related to severance activities and $30.4 million were related to other costs, including a withdrawal
liability related to multiemployer pension plans of $8.6 million, which was expensed as a result of ceasing contributions, costs
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for consolidating operations, primarily related to systems implementation and the outsourcing of corporate functions, and
facilities consolidation expenses, primarily associated with exiting a lease.
For the year ended December 31, 2021, we incurred Integration and reorganization costs of $49.3 million. Of the total costs
incurred, $16.5 million were related to severance activities and $32.8 million were related to other costs, including costs for
consolidating operations, such as costs associated with systems integrations.
Foreign currency
Our U.K. media operations are conducted through our Newsquest subsidiary. In addition, we have foreign operations in
regions such as Canada, Australia, New Zealand and India. 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. Currency translation fluctuations may impact revenue, expense, and operating income results for our
international operations. Foreign currency headwinds have increased significantly as the U.S. dollar strengthened in relation to
many foreign currencies, including the U.K. pound sterling. Foreign currency exchange rate fluctuations negatively impacted
our revenues and profitability during the year ended December 31, 2023, and may continue to negatively impact our financial
results in the future.
Strategy
We are committed to inspiring, informing and connecting audiences as a sustainable, growth-focused media and digital
marketing solutions company. We endeavor to deliver essential content, marketing solutions and experiences for curated
audiences, advertisers, consumers, and stakeholders by leveraging our diverse teams and suite of products to enrich the local
communities and businesses we serve. The execution of this strategy is expected to allow us to continue our evolution from a
more traditional print media business to a sustainable, growth-focused media and digital marketing solutions company.
We intend to create stockholder value through a variety of methods, including organic growth driven by our consumer and
business-to-business strategies, as well as through paying down debt to strengthen our capital structure.
Create a stable foundation for growth
We continue to optimize and improve our foundation – completing systems consolidations and migrations, improving
process workflows, and ensuring we have synergy across the organization to deliver the stabilization required to fuel our plan
into the future. We also continue to invest in our people and in the skills needed to support our future aims and to retain our
talent by remaining an attractive place to work.
Expand our reach
Key to our ongoing growth is expanding our base – whether clients in our DMS segment or audience in our Domestic
Gannett Media and Newsquest segments – and optimizing our revenue streams across this growing base. For both the Domestic
Gannett Media and Newsquest segments, this includes content expansion, establishing a seamless print to digital continuum to
introduce clients, readers, viewers, and listeners to a broader range of products we offer. For the DMS segment, expanding our
client base and core revenue is anticipated to be supplemented by the development of a complementary software model.
Diversify digital revenues
We expect to continue to expand the ways that we grow digital revenues through innovative partnerships and developing
new products and services that meet the needs of consumers and businesses. Examples of this growth strategy include our
intention to continue to expand partnerships that rely on our unique and large audience base and developing new DMS software
solutions.
Building on our environmental, social and governance focus to foster culture and community both internally and externally
We will continue our environmental, social and governance ("ESG") journey that is rooted in our strategic mission to
empower our communities to thrive and putting our customers at the center of everything we do. We support that mission with
clearly defined values that aim to influence not only what we do, but how we do it, with one of the core pillars focusing on our
ongoing commitments to inclusion, diversity, and equity ("ID&E"). From our internal efforts around recruiting, development
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and retention, to our external efforts to provide high quality products and excellent customer service, we believe our strategic
focus will benefit from our continued commitment to building upon our culture and community values.
Macroeconomic Environment
The U.S. and global economies and markets experienced increased volatility in 2023, and are expected to continue to
experience volatility, due to factors, including higher inflation, increased interest rates, banking volatility, and other geopolitical
events that are anticipated to continue in 2024. Uncertain economic conditions adversely impacted our advertising revenues,
and the occurrence of these factors has resulted in a reduction in demand for our print and digital advertising, reduced the rates
for our advertising, and caused marketers to shift, reduce or stop spend. The impact of these uncertain macroeconomic
conditions has not changed substantially since the initial volatility that began in the second quarter of 2022.
These challenging conditions, especially higher inflation and interest rates, have negatively impacted the consumer and
resulted in increased price sensitivity from our print and paid digital-only subscribers. Consumer purchases of discretionary
items, including our products and services, generally decline during periods of economic uncertainty, when disposable income
is reduced or when there is a reduction in consumer confidence. SMBs are facing a more complex marketing environment and
need to create digital presence to capture audiences online. Advertisers are increasingly looking for more effective ways to
analyze their return on marketing investments and are seeking solutions that offer greater attribution. We believe we offer a
broad suite of digital marketing services products that offer a single, unified solution to meet their digital marketing needs.
As a result of the macroeconomic volatility, we have experienced rising costs, including costs associated with labor,
newsprint, delivery, ink, printing plates, fuel, and utilities. However, we believe that the inflationary pressures peaked in 2022
and we are beginning to realize and expect we may continue to realize lower prices related to newsprint costs. We are also
exposed to potential increases in interest rates associated with our Senior Secured Term Loan, which as of December 31, 2023,
accounted for approximately 31% of our outstanding debt, as well as fluctuations in foreign currency exchange rates, primarily
related to our operations in the U.K. We expect continued uncertainty and volatility in the U.S. and global economies which
will continue to impact our business.
Recent U.S. and international tax legislation
On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the "Inflation Reduction Act"),
which includes, among other provisions, changes to the U.S. corporate income tax system, including a 15% minimum tax based
on "average adjusted financial statement income" exceeding $1 billion for any three consecutive years preceding the tax year
and a 1% excise tax on net repurchases of stock in excess of $1 million after December 31, 2022. During the year ended
December 31, 2023, we did not experience a material financial impact from the Inflation Reduction Act. We do not anticipate a
material financial impact from the Inflation Reduction Act during 2024.
We are subject to income taxes and various other taxes in the U.S. and in many foreign jurisdictions; therefore, changes in
both domestic and international tax laws or regulations have affected and may affect our effective tax rate, results of operations,
and cash flows. The Organization for Economic Co-operation and Development (the "OECD")/G20 Inclusive Framework on
Base Erosion and Profit Shifting has agreed on a two-pillar approach to address tax challenges arising from the digitalization of
the global economy by (i) allocating profits to market jurisdictions ("Pillar One") and (ii) ensuring multinational enterprises pay
a minimum level of tax regardless of where the headquarters are located or the jurisdictions in which the company operates
("Pillar Two"). Pillar One targets multinational groups with global revenue exceeding €20 billion and a profit-to-revenue ratio
of more than 10%. Companies subject to Pillar One will be required to allocate profits and pay taxes to market jurisdictions.
Based on the current proposed revenue and profit thresholds, we do not expect to be subject to tax changes associated with
Pillar One. Pillar Two focuses on global profit allocation and a global minimum tax rate. In December 2022, the European
Union ("EU") Member States formally adopted the EU's Pillar Two Directive, which generally provides for a minimum
effective tax rate of 15%, as established by the OECD Pillar Two Framework that was supported by over 130 countries
worldwide. The EU Pillar Two Directive became effective on January 1, 2024.
The U.K. has enacted legislation to implement the OECD's Pillar Two rules with the passing of Finance (No.2) Act 2023.
The legislation introduces a global minimum effective tax rate of 15% by implementing a domestic top-up tax and a
multinational top-up tax for U.K. multinational corporations effective January 1, 2024. Other countries are also actively
considering changes to their tax laws to adopt certain parts of the OECD's proposals. We do not expect that Pillar Two will
have a material impact on the Consolidated financial statements.
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Seasonality
Our revenues are subject to moderate seasonality, primarily due to fluctuations in advertising volumes. Advertising and
marketing services revenues for our Domestic Gannett Media segment are typically highest in the fourth quarter, primarily due
to fluctuations in advertising volumes tied to the holidays, regional weather, and levels of activity in our various markets, some
of which have a high degree of seasonal residents and tourists. Revenues in our DMS segment experience moderate seasonality
in the first quarter due to fluctuations in the seasonal needs of our advertising customers. 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. Uncertain economic
conditions continued to adversely impact our advertising revenues during 2023, and the occurrence of these factors has resulted
in a reduction in demand for our print and digital advertising, reduced the rates for our advertising, and caused marketers to
shift, reduce or stop spend. Refer to "Macroeconomic Environment" above for further discussion.
Environmental, Social and Governance Initiatives
As a leading media organization, our longstanding corporate social responsibility position is driven by our deep
commitment to our communities. We are dedicated to ensuring that we have mindful and ethical business practices that
positively impact our world. In early 2023, we published our 2023 ESG Report detailing the progress we made on our U.N.
Sustainable Development Goals ("U.N. SDGs") that include Reduced Inequalities, Climate Action, and Peace, Justice and
Strong Institutions. The 2023 ESG Report included noteworthy highlights such as improving our workplace diversity,
expanding our systems infrastructure to provide Scope 1 and 2 emissions for our entire global carbon footprint, and reducing
the number of manufacturing facilities.
We are committed to ensuring our coverage is widely available, actively promoted across our media sites and marketed to
our millions of registered users. In January 2024, we published our network-wide 2023 Journalism Impact Report, which
highlighted what we believe are the most influential articles we produced in 2023 and covers topics such as coverage on ID&E,
as well as climate change. We are committed to the ongoing publishing of an annual network-wide Journalism Impact Report,
which surfaces the top stories we produced that led to action.
The well-being of our employees is of paramount importance to us and we are committed to maintaining a corporate
culture that conducts business in a responsible and ethical manner that includes promoting, protecting and supporting human
rights across our operations and throughout our entire organization, which is why we have adopted a company-wide Human
Rights Policy. This policy expands upon an existing policy enacted by our U.K. operations. Our Human Rights Policy covers
areas such as our commitment to diversity and inclusion, a safe and healthy workplace, our communities and stakeholders, and
freedom of association and collective bargaining, which helps ensure our employees' right to form and choose whether to join a
labor union without fear of reprisal, intimidation, or harassment. The Human Rights Policy also reflects our commitment to
bargaining in good faith with chosen representatives of such groups in accordance with applicable laws.
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RESULTS OF OPERATIONS
Consolidated Summary
A summary of our consolidated results is presented below:
Year ended December 31,
In thousands, except per share
amounts
Revenues:
Local and national print
Classified print
Print advertising
Digital media
Digital marketing services (a)
Digital classified
Digital advertising and
marketing services
Advertising and marketing
2023
2022
$ Change % Change
2021
$ Change % Change
$
329,956 $
246,589
576,545
404,298
266,584
670,882
280,596
476,958
53,015
299,775
467,909
57,571
(74,342)
(19,995)
(94,337)
(19,179)
9,049
(4,556)
(18) % $
(8) %
(14) %
502,014 $
290,272
792,286
(97,716)
(23,688)
(121,404)
(6) %
2 %
(8) %
363,149
443,775
51,951
(63,374)
24,134
5,620
(19) %
(8) %
(15) %
(17) %
5 %
11 %
810,569
825,255
(14,686)
(2) %
858,875
(33,620)
(4) %
services
1,387,114
1,496,137
(109,023)
(7) % 1,651,161
(155,024)
(9) %
Print circulation
Digital-only subscription
Circulation
772,200
155,621
927,821
952,019
132,618
1,084,637
(179,819)
23,003
(156,816)
(19) % 1,149,186
100,488
17 %
(14) % 1,249,674
(197,167)
32,130
(165,037)
(17) %
32 %
(13) %
Other (b)
348,615
364,529
(15,914)
(4) %
307,248
57,281
19 %
Total revenues
2,663,550
2,945,303
(281,753)
(10) % 3,208,083
(262,780)
(8) %
Total operating expenses (a)
Operating income (loss)
Non-operating expenses
Loss before income taxes
Provision for income taxes
Net loss
Net loss attributable to
noncontrolling interests
Net loss attributable to
2,577,279
86,271
92,436
(6,165)
21,729
(27,894)
2,978,902
(33,599)
43,307
(76,906)
1,349
(78,255)
(401,623)
119,870
49,129
70,741
20,380
50,361
(13) % 3,099,006
109,077
196,998
(87,921)
48,250
(136,171)
***
***
(92) %
***
(64) %
(120,104)
(142,676)
(153,691)
11,015
(46,901)
57,916
(4) %
***
(78) %
(13) %
(97) %
(43) %
(103)
(253)
150
(59) %
(1,209)
956
(79) %
Gannett
$
(27,791) $
(78,002) $
50,211
(64) % $
(134,962) $
56,960
(42) %
Loss per share attributable to
Gannett - basic
Loss per share attributable to
Gannett - diluted
$
$
(0.20) $
(0.57) $
0.37
(65) % $
(1.00) $
0.43
(43) %
(0.20) $
(0.57) $
0.37
(65) % $
(1.00) $
0.43
(43) %
*** Indicates an absolute value percentage change greater than 100.
(a) Amounts are net of intersegment eliminations of $150.5 million, $143.5 million and $129.3 million for the years ended December 31, 2023, 2022 and 2021,
respectively, which represent digital advertising marketing services revenues and expenses associated with products sold by sales teams in our Domestic
Gannett Media and Newsquest segments but fulfilled by our DMS segment. When discussing segment results, these revenues and expenses are presented
gross but are eliminated in consolidation.
(b) Other revenues included Other Digital revenues, including digital syndication, affiliate, production and licensing revenues of $84.2 million, $80.7 million
and $68.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Revenues
Advertising and marketing services revenues are generated by the Domestic Gannett Media, Newsquest and DMS
segments. At both the Domestic Gannett Media and Newsquest segments, Advertising and marketing services revenues are
generated by the sale of 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
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digital marketing services delivered by our DMS segment. At the DMS segment, Advertising and marketing services revenues
are generated through multiple services, including search advertising, display advertising, search optimization, social media,
website development, web presence products, customer relationship management, and software-as-a-service solutions.
Circulation revenues are generated by the Domestic Gannett Media and Newsquest segments, and are derived from home
delivery, digital distribution and single copy sales of our publications.
Other revenues are primarily generated by the Domestic Gannett Media and Newsquest segments. Other revenues
generated by the Domestic Gannett Media segment are mainly derived from commercial printing, distribution arrangements,
revenues from our events business, digital content syndication and affiliate revenues and third-party newsprint sales. Other
revenues generated by the Newsquest segment are mainly derived from digital production revenues and commercial printing.
To a lesser extent Other revenues generated at our Corporate and other category are mainly driven by sales of cloud-based
products with expert guidance and support.
Operating expenses
Operating expenses consist primarily of the following:
•
Operating costs at the Domestic Gannett Media and Newsquest segments include labor, newsprint and delivery costs
and at the DMS segment include the cost of online media acquired from third parties and costs to manage and operate
our marketing solutions and technology infrastructure;
Selling, general and administrative expenses include labor, payroll, outside services, benefits costs and bad debt
expense;
Depreciation and amortization;
Integration and reorganization costs include severance charges and other costs, including those for the purpose of
consolidating our operations (i.e., facility consolidation expenses and integration-related costs);
Impairment charges, including costs incurred related to goodwill, intangible assets and property, plant, and equipment;
Gains or losses on the sale or disposal of assets; and
Other operating expenses, including third-party debt expenses as well as acquisition-related costs.
•
•
•
•
•
•
Refer to Segment results below for a discussion of the results of operations by segment.
Non-operating (income) expense
Interest expense: For the year ended December 31, 2023, Interest expense was $111.8 million compared to $108.4 million
for the year ended December 31, 2022. The increase in interest expense for the year ended December 31, 2023 compared to
2022 was primarily due to the impact of the increase in interest rates on our Senior Secured Term Loan, partially offset by a
lower debt balance, mainly driven by quarterly amortization payments on our Senior Secured Term Loan and repurchases of
our 2026 Senior Notes. For the year ended December 31, 2022, Interest expense was $108.4 million compared to $135.7
million for the year ended December 31, 2021. The decrease in interest expense for the year ended December 31, 2022
compared to 2021 was mainly due to a lower debt balance and the impact of lower interest rates on our outstanding fixed-rate
debt, partially offset by an increase in interest rates on the Senior Secured Term Loan.
Gain on early extinguishment of debt: For the years ended December 31, 2023 and 2022, we recognized gains on the early
extinguishment of debt of $4.5 million and $0.4 million, respectively. The increase in the Gain on the early extinguishment of
debt for the year ended December 31, 2023 compared to 2022 was mainly due to refinancing activities related to our 2026
Senior Notes and Senior Secured Term Loan. For the year ended December 31, 2021, we incurred a loss on the early
extinguishment of debt of $48.7 million. The decrease for the year ended December 31, 2022 compared to 2021 was mainly due
to the absence in 2022 of the refinancing activities which occurred in 2021, including the refinancing of our five-year, senior-
secured term loan facility in an aggregate principal amount of $1.045 billion (the "5-Year Term Loan") in the fourth quarter of
2021 and the payoff of our five-year, senior-secured 11.5% term loan facility with Apollo Capital Management, L.P., which
was made in the first quarter of 2021. Refer to "Recent Developments – Debt repurchase" above for further discussion of our
2026 Senior Notes.
Non-operating pension income: For the year ended December 31, 2023, Non-operating pension income was $9.4 million
compared to $59.0 million in 2022. The decrease in Non-operating pension income for the year ended December 31, 2023
compared to 2022 was primarily due to a decrease in the expected return on plan assets, mainly driven by a decrease in assets
following the annuity contract entered into during 2022, related to the Gannett Retirement Plan (the "GR Plan"). For the year
ended December 31, 2022, Non-operating pension income was $59.0 million compared to $95.4 million in 2021. The decrease
in Non-operating pension income for the year ended December 31, 2022 compared to 2021 was primarily due to a decrease in
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the expected return on plan assets held by the GR Plan, mainly driven by a more conservative asset allocation, and to a lesser
extent, the reduction to the GR Plan assets as a result of the pension annuity entered into during the third quarter of 2022.
Loss on convertible notes derivative: For the years ended December 31, 2023 and 2022, we had no Loss on convertible
notes derivative. For the year ended December 31, 2021, Loss on convertible notes derivative was $126.6 million, reflecting the
increase in the fair value of the derivative liability as a result of the increase in our stock price.
Other non-operating income, net: Other non-operating income, net consisted of certain items that fall outside of our normal
business operations. For the year ended December 31, 2023, we recorded Other non-operating income, net of $5.4 million
compared to $5.7 million in 2022. For the year ended December 31, 2022, Other non-operating income, net, was $5.7 million
compared to $18.7 million in 2021. The decrease in Other non-operating income, net for the year ended December 31, 2022
compared to 2021 was primarily due to the absence in 2022 of the reversal of an accrual related to a legal matter in 2021.
Provision for income taxes
The following table summarizes our pre-tax loss before income taxes and income tax accounts:
In thousands
Loss before income taxes
Provision for income taxes
Effective tax rate
NM indicates not meaningful.
Year ended December 31,
2023
2022
2021
$
(6,165) $
(76,906)
$
(87,921)
21,729
NM
1,349
(1.8) %
48,250
NM
Our effective tax rate for the year ended December 31, 2023 was not meaningful. The tax provision for 2023 was primarily
impacted by the valuation allowances on non-deductible U.S. interest expense carryforwards, the global intangible low-taxed
income inclusion from our U.K. operations, nondeductible compensation, and state and local tax expense, partially offset by the
benefit from the pre-tax book loss.
Our effective tax rate for the year ended December 31, 2022 was negative 1.8%. The tax provision for 2022 was primarily
impacted by the valuation allowances on non-deductible U.S. interest expense carryforwards, the global intangible low-taxed
income inclusion, the release of uncertain tax positions in the U.S., and the reduction in the blended state tax rate, which were
offset by the tax benefit of the pre-tax book loss.
Our effective tax rate for the year ended December 31, 2021 was not meaningful given the income tax provision associated
with a loss before income taxes. The tax provision was primarily impacted by the derivative revaluation, which is nondeductible
for federal tax purposes, the creation of valuation allowances on non-deductible interest expense carryforwards, and deemed
income from global intangible low-taxed income inclusion, offset by the change in the deferred tax rate from 19% to 25% in the
U.K. and the income tax impact of Paycheck Protection Program ("PPP") loan forgiveness.
Net loss attributable to Gannett and diluted loss per share attributable to Gannett
Net loss attributable to Gannett and diluted loss per share attributable to Gannett were $27.8 million and $0.20 for the year
ended December 31, 2023, respectively, $78.0 million and $0.57 for the year ended December 31, 2022, respectively, and
$135.0 million and $1.00 for the year ended December 31, 2021, respectively. The changes reflect the various items discussed
above and below in "Segment Results."
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Segment Results
Domestic Gannett Media segment 2023 compared to 2022
A summary of our Domestic Gannett Media segment comparing the year ended December 31, 2023 to the year ended
December 31, 2022 is presented below:
In thousands
Revenues:
Year ended December 31,
2023
2022
$ Change
% Change
Advertising and marketing services
$
925,539 $
1,034,416 $
(108,877)
Circulation
Other
Total revenues
Operating expenses:
Operating costs
Selling, general and administrative expenses
Depreciation and amortization
Integration and reorganization costs
Asset impairments
Gain on sale or disposal of assets, net
Other operating expenses
Total operating expenses
Operating income
854,542
315,772
2,095,853
1,362,815
540,843
112,201
5,582
1,370
(38,937)
139
1,012,525
332,865
2,379,806
1,544,708
631,414
130,557
55,575
1,056
(6,738)
2
(157,983)
(17,093)
(283,953)
(181,893)
(90,571)
(18,356)
(49,993)
314
(32,199)
137
1,984,013
2,356,574
(372,561)
$
111,840 $
23,232 $
88,608
(11%)
(16%)
(5%)
(12%)
(12%)
(14%)
(14%)
(90%)
30%
***
***
(16%)
***
*** Indicates an absolute value percentage change greater than 100.
Revenues
The following table provides the breakout of Revenues by category:
In thousands
Local and national print
Classified print
Print advertising
Digital media
Digital marketing services
Digital classified
Digital advertising and marketing services
Year ended December 31,
2023
2022
$ Change
% Change
$
292,211 $
209,490
501,701
363,772 $
230,969
594,741
238,706
140,589
44,543
423,838
260,417
133,219
46,039
439,675
(71,561)
(21,479)
(93,040)
(21,711)
7,370
(1,496)
(15,837)
(20%)
(9%)
(16%)
(8%)
6%
(3%)
(4%)
Advertising and marketing services
925,539
1,034,416
(108,877)
(11%)
Print circulation
Digital-only subscription
Circulation
Other(a)
704,158
150,384
854,542
884,854
127,671
1,012,525
(180,696)
22,713
(157,983)
(20%)
18%
(16%)
315,772
332,865
(17,093)
(5%)
Total revenues
(12%)
(a) Other revenues included Other Digital revenues, including digital content syndication and affiliate revenues of $67.5 million and $65.8 million for the years
2,095,853 $
2,379,806
(283,953)
$
ended December 31, 2023 and 2022, respectively.
52
Table of Contents
For the year ended December 31, 2023, Local and national print advertising revenues decreased compared to 2022,
primarily due to a decrease in advertiser inserts, mainly due to volume declines, and a decrease in local and national print
advertisements, mainly due to the ongoing decline associated with secular trends and both a shift and a reduction in spend from
customers driven by macroeconomic factors. In addition, the decrease in Local and national print advertising revenues was also
due to the absence in 2023 of revenues of $25.7 million associated with both businesses divested and non-core products which
were sunset in 2023 and 2022. For the year ended December 31, 2023, Classified print advertising revenues decreased
compared to 2022, primarily due to lower spend on classified advertisements, mainly driven by lower spend on obituary
notifications and real estate advertisements, partially offset by an increase in spend on employment advertisements. In addition,
the decrease in Classified print advertising revenues was also due to the absence in 2023 of revenues of $5.6 million associated
with non-core products which were sunset in 2023 and 2022.
For the year ended December 31, 2023, Digital media revenues decreased compared to 2022, driven by decreases in both
domestic national and local revenue volumes and a reduction in digital advertising demand as a result of a more challenging
macroeconomic environment, including declining CPMs (cost per thousand impressions). For the year ended December 31,
2023, Digital marketing services revenues increased compared to 2022, primarily due to an increase in rates, partially offset by
a decrease in client counts. For the year ended December 31, 2023, Digital classified revenues decreased compared to 2022, due
to lower spend on employment and obituary notifications, partially offset by higher spend on automotive advertisements.
For the year ended December 31, 2023, Print circulation revenues decreased compared to 2022, due to a decline in home
delivery as a result of a reduction in the volume of subscribers, partially offset by an increase in rates, as well as a decline in
single copy due to a reduction in volume. In addition, the decrease in Print circulation revenues was due to the absence in 2023
of revenues of $6.8 million associated with non-core products which were sunset in 2023 and 2022. For the year ended
December 31, 2023, Digital-only subscription revenues increased compared to 2022, due to an increase in Digital-only
subscription average revenue per user ("Digital-only ARPU") of 7.8%, mainly due to product mix. Refer to "Key Performance
Indicators" below for further discussion of Digital-only ARPU.
For the year ended December 31, 2023, Other revenues decreased compared to 2022, primarily due to a decline in
commercial print volume and a decline in digital syndication, partially offset by an increase in event revenues, mainly driven by
an increase in registration fees and higher merchandising revenues, driven by higher attendance, partially offset by slightly
fewer events, as well as an increase in digital revenues related to affiliate agreements.
Operating expenses
For the year ended December 31, 2023, Operating costs decreased $181.9 million compared to 2022. The following table
provides the breakout of the decrease in Operating costs:
In thousands
Newsprint and ink
Distribution
Compensation and benefits
Outside services
Other
Total operating costs
Year ended December 31,
2023
2022
$ Change
% Change
$
99,760 $
129,077 $
323,750
393,196
326,695
219,414
370,594
487,868
333,137
224,032
(29,317)
(46,844)
(94,672)
(6,442)
(4,618)
$
1,362,815 $
1,544,708 $
(181,893)
(23%)
(13%)
(19%)
(2%)
(2%)
(12%)
For the year ended December 31, 2023, Newsprint and ink costs decreased compared to 2022, primarily due to a decline
associated with lower revenues, partially offset by an increase of $2.4 million driven by the change in the cost of newsprint.
For the year ended December 31, 2023, Distribution costs decreased compared to 2022, primarily due to a decrease of
$51.2 million associated with lower home delivery and single copy revenues, partially offset by an increase of $4.4 million,
driven by higher postage costs primarily due to conversion to mail delivery in multiple markets. Included in the decline of
Distribution costs was the absence in 2023 of expenses of $16.8 million associated with both businesses divested and non-core
products which were sunset in 2023 and 2022.
For the year ended December 31, 2023, Compensation and benefits costs decreased compared to 2022, primarily due to
lower payroll expense of $69.5 million, driven by a decrease in headcount tied to ongoing cost control initiatives, including
facility closures and conversion to mail delivery in multiple markets, and to a lesser extent, lower employee benefit costs of
53
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$25.1 million, mainly due to a decrease in insurance costs due to a decrease in headcount and a decline in employer 401(k) plan
matching contributions, which were suspended in the third quarter of 2022.
For the year ended December 31, 2023, Outside services costs, which includes professional services fulfilled by third
parties, media fees and other digital costs, and paid search and ad serving services, decreased compared to 2022, primarily due
to a decrease of $12.4 million in various expenses, including costs related to news and editorial, professional services, outside
printing, and software licensing, partially offset by an increase of $6.0 million in third-party media fees.
For the year ended December 31, 2023, Other costs decreased compared to 2022, primarily due to lower facility related
expenses associated with real estate sales and lower promotion expenses.
For the year ended December 31, 2023, Selling, general and administrative expenses decreased by $90.6 million compared
to 2022. The following table provides the breakout of the decrease in Selling, general and administrative expenses:
In thousands
Compensation and benefits
Outside services and other
Total selling, general and administrative expenses
Year ended December 31,
2023
2022
$ Change
% Change
$
$
255,491 $
289,761 $
285,352
341,653
540,843 $
631,414 $
(34,270)
(56,301)
(90,571)
(12%)
(16%)
(14%)
For the year ended December 31, 2023, Compensation and benefits costs decreased compared to 2022, primarily due to
lower payroll expense of $24.0 million, driven by a decrease in headcount tied to ongoing cost control initiatives and lower
commissions related to revenue performance, and to a lesser extent, lower employee benefit costs of $10.3 million, including a
decrease in employer 401(k) plan matching contributions, which were suspended in the third quarter of 2022.
For the year ended December 31, 2023, Outside services and other costs, which include services fulfilled by third parties,
decreased compared to 2022, due to a decrease in costs related to technology, promotions, and professional services.
For the year ended December 31, 2023, Depreciation and amortization expense decreased compared to 2022, reflecting the
impact of fewer print facilities in 2023 compared to 2022.
For the year ended December 31, 2023, Integration and reorganization costs decreased compared to 2022, mainly due to a
decrease in severance costs of $30.7 million and a decrease in other costs of $19.3 million. The decrease in other costs was
primarily due to the reversal of withdrawal liabilities related to multiemployer pension plans of $6.4 million based on settlement
of the withdrawal liability, and the absence in 2023 of an accrual of $8.6 million made in 2022 related to a multiemployer
pension plan, as well as lower facility and consolidation costs in 2023 compared to 2022.
For the years ended December 31, 2023 and 2022, we recognized net gains on the sale of assets of $38.9 million and
$6.7 million, respectively, primarily related to sales of production facilities as part of our plan to monetize non-core assets.
Domestic Gannett Media segment Adjusted EBITDA
In thousands
Net income attributable to Gannett
Non-operating pension income
Depreciation and amortization
Integration and reorganization costs
Other operating expenses
Asset impairments
Gain on sale or disposal of assets, net
Other items
Adjusted EBITDA (non-GAAP basis)(a)
Net income attributable to Gannett margin
Adjusted EBITDA margin (non-GAAP basis)(a)(b)
2023
Year ended December 31,
$ Change
2022
% Change
$
114,254
$
63,225
$
(705)
112,201
5,582
139
1,370
(38,937)
737
(35,921)
130,557
55,575
2
1,056
(6,738)
(108)
51,029
35,216
(18,356)
(49,993)
137
314
(32,199)
845
$
194,641
$
207,648
$
(13,007)
5.5 %
9.3 %
2.7 %
8.7 %
81%
(98%)
(14%)
(90%)
***
30%
***
***
(6%)
54
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*** Indicates an absolute value percentage change greater than 100.
(a) See "Non-GAAP Financial Measures" below for additional information about non-GAAP measures.
(b) We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Revenues.
For the year ended December 31, 2023, the decrease in Domestic Gannett Media segment Adjusted EBITDA compared to
2022 was primarily attributable to the changes discussed above. In addition, for the year ended December 31, 2023, the
decrease in Non-operating pension income compared to 2022 was primarily due to a decrease in the expected return on plan
assets mainly driven by a decrease in assets following the annuity contract entered into during 2022 related to the GR Plan.
Domestic Gannett Media segment 2022 compared to 2021
A summary of our Domestic Gannett Media segment comparing the year ended December 31, 2022 to the year ended
December 31, 2021 is presented below:
In thousands
Operating revenues:
Year ended December 31,
2022
2021
$ Change
% Change
Advertising and marketing services
$
1,034,416 $
1,219,241 $
(184,825)
Circulation
Other
Total operating revenues
Operating expenses:
Operating costs
Selling, general and administrative expenses
Depreciation and amortization
Integration and reorganization costs
Asset impairments
(Gain) loss on sale or disposal of assets, net
Other operating expenses
Total operating expenses
Operating income
*** Indicates an absolute value percentage change greater than 100.
1,012,525
332,865
2,379,806
1,544,708
631,414
130,557
55,575
1,056
(6,738)
2
1,179,100
279,776
2,678,117
1,622,214
676,954
150,185
14,721
3,881
27,397
—
(166,575)
53,089
(298,311)
(77,506)
(45,540)
(19,628)
40,854
(2,825)
(34,135)
2
2,356,574
2,495,352
(138,778)
$
23,232 $
182,765 $
(159,533)
(15%)
(14%)
19%
(11%)
(5%)
(7%)
(13%)
***
(73%)
***
***
(6%)
(87%)
55
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Operating revenues
The following table provides the breakout of Operating revenues by category:
In thousands
Local and national print
Classified print
Print advertising
Digital media
Digital marketing services
Digital classified
Digital advertising and marketing services
Year ended December 31,
2022
2021
$ Change
% Change
$
363,772 $
469,211 $
(105,439)
230,969
594,741
260,417
133,219
46,039
439,675
259,081
728,292
324,843
125,861
40,245
490,949
(28,112)
(133,551)
(64,426)
7,358
5,794
(51,274)
(22%)
(11%)
(18%)
(20%)
6%
14%
(10%)
Advertising and marketing services
1,034,416
1,219,241
(184,825)
(15%)
Print circulation
Digital-only subscription
Circulation
Other(a)
884,854
127,671
1,083,760
95,340
1,012,525
1,179,100
(198,906)
32,331
(166,575)
332,865
279,776
53,089
(18%)
34%
(14%)
19%
(11%)
Total operating revenues
(a) Other revenues included Other Digital revenues, including digital content syndication and affiliate revenues of $65.8 million and $57.4 million for the years
2,379,806 $
2,678,117 $
(298,311)
$
ended December 31, 2022 and 2021, respectively.
The overall decline in Print advertising revenues for the year ended December 31, 2022 compared to 2021 was driven
primarily by secular industry trends impacting all categories. In addition, during the year ended December 31, 2022, and
specifically beginning in the second quarter of 2022, we saw an acceleration in the rate of decline of our Print advertising
revenues as a result of macroeconomic factors. For the year ended December 31, 2022, Local and national print advertising
revenues decreased compared to 2021, primarily due to a decrease in advertiser inserts, mainly due to volume declines, as well
as the absence of $37.3 million of revenues associated with both businesses divested and non-core products which were sunset
in 2022 and 2021. For the year ended December 31, 2022, Classified print advertising revenues decreased compared to 2021
due to lower spend on classified advertisements, primarily related to a decline in obituary notifications, and to a lesser extent
declines in real estate and automotive advertisements. In addition, the decrease in Classified print advertising revenues was also
due to the absence in 2022 of revenues of $8.0 million associated with non-core products which were sunset in 2022 and 2021.
For the year ended December 31, 2022, Digital media revenues decreased compared to 2021, driven by changes in
monetization with our sports affiliates as well as lower page views related to increased subscriber-only content, secular trends in
news consumption and lower overall digital advertising spend. In addition, during the year ended December 31, 2022, we
experienced a reduction in digital advertising demand as a result of a more challenging macroeconomic environment. For the
year ended December 31, 2022, Digital marketing services revenues increased compared to 2021, due to an increase in client
counts as well as an increase in rates. For the year ended December 31, 2022, Digital classified revenues increased compared to
2021, due to higher client spend, primarily due to increased spend on automotive advertisements, partially offset by lower
spend on obituary and employment notifications.
For the year ended December 31, 2022, Print circulation revenues decreased compared to 2021, due to a decline in home
delivery sales, mainly driven by a reduction in the volume of subscribers, partially offset by an increase in rates, as well as a
decline in single copy sales reflecting the overall secular trends impacting the industry and increasing sensitivity from
customers related to price increases and product changes. In addition, during the year ended December 31, 2022, and
specifically beginning in the second quarter of 2022, the decline in print circulation revenues accelerated as compared to the
same period in the prior year as our audience increasingly moved to digital platforms, and as a result of consumer price
sensitivity. For the year ended December 31, 2022, Digital-only subscription revenues increased compared to 2021, driven by
an increase of 24.6% in paid digital-only subscriptions, including those subscribers on introductory subscription offers, to
approximately 2 million as of December 31, 2022, partially offset by a decline in Digital-only ARPU. Refer to "Key
56
Table of Contents
Performance Indicators" in Management's Discussion and Analysis of Financial Condition and Results of Operations" below
for further discussion of Digital-only ARPU.
For the year ended December 31, 2022, Other revenues increased compared to 2021, primarily due to commercial print
growth in local markets, an increase in digital content syndication volume and other digital revenues, and an increase in event
revenues (though not to pre-pandemic levels) as we hosted more in-person events with higher attendance as compared to the
same period in the prior year.
Operating expenses
For the year ended December 31, 2022, Operating costs decreased $77.5 million compared to 2021. The following table
provides the breakout of the decrease in Operating costs:
In thousands
Newsprint and ink
Distribution
Compensation and benefits
Outside services
Other
Total operating costs
Year ended December 31,
2022
2021
$ Change
% Change
$
129,077 $
96,391 $
370,594
487,868
333,137
224,032
418,402
510,646
324,784
271,991
$
1,544,708 $
1,622,214 $
32,686
(47,808)
(22,778)
8,353
(47,959)
(77,506)
34%
(11%)
(4%)
3%
(18%)
(5%)
For the year ended December 31, 2022, Newsprint and ink costs increased compared to 2021, primarily due to an increase
in newsprint prices of $21.8 million driven by inflationary pressures and supply chain issues impacting the industry, as well as
growth in our commercial print business, partially offset by the decline in volume of home delivery and single copy sales as
well as reduction of print offerings.
For the year ended December 31, 2022, Distribution costs decreased compared to 2021, primarily due to a decrease of
$36.1 million associated with lower home delivery and single copy revenues and $11.7 million of lower postage costs
associated with lower volumes. Included in the decline in Distribution costs was the absence in 2022 of expenses of
$28.0 million associated with both businesses divested and non-core products which were sunset in 2022 and 2021.
For the year ended December 31, 2022, Compensation and benefits costs decreased compared to 2021, primarily due to
lower payroll expenses of $31.5 million driven by a decrease in headcount tied to ongoing cost control initiatives, partially
offset by the absence of $12.1 million of PPP loan forgiveness received in 2021.
For the year ended December 31, 2022, Outside services costs, which include outside printing, professional services
fulfilled by third parties, paid search and ad serving, feature services, and credit card fees, increased compared to 2021,
primarily due to an increase of $4.8 million in third-party media fees and an increase of $3.6 million in various expenses,
mainly related to events, driven by the number and mix of live versus virtual events compared to the prior year.
For the year ended December 31, 2022, Other costs decreased compared to 2021, due primarily to the absence of expenses
associated with both businesses divested and non-core products which were sunset in 2022 and 2021 and cost management
initiatives.
For the year ended December 31, 2022, Selling, general and administrative expenses decreased by $45.5 million compared
to 2021. The following table provides the breakout of the decrease in Selling, general and administrative expenses:
In thousands
Compensation and benefits
Outside services and other
Total selling, general and administrative expenses
Year ended December 31,
2022
2021
$ Change
% Change
$
$
289,761 $
336,824 $
(47,063)
341,653
340,130
1,523
631,414 $
676,954 $
(45,540)
(14%)
—%
(7%)
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For the year ended December 31, 2022, Compensation and benefits costs decreased compared to 2021, primarily due to
lower payroll expense of $34.1 million driven by headcount savings, as well as lower employee benefit costs of $17.2 million,
including medical, partially offset by the absence of PPP loan forgiveness of $4.3 million received in 2021.
For the year ended December 31, 2022, Outside services and other costs, which include services fulfilled by third parties,
increased slightly compared to 2021, due to higher professional services costs and higher marketing and acquisition costs
associated with growing subscribers.
For the year ended December 31, 2022, Depreciation and amortization expense decreased compared to 2021, reflecting the
impact of fewer print facilities compared to 2021.
For the year ended December 31, 2022, Integration and reorganization costs increased compared to 2021, mainly due to an
increase in severance costs of $27.1 million, primarily driven by our voluntary severance program in the fourth quarter of 2022
related to cost savings initiatives as well as ongoing integration and restructuring activities, and an increase in other costs of
$13.8 million, including a withdrawal liability which was expensed as a result of ceasing contributions to a multiemployer
pension plan, and an increase in facility consolidation expenses associated with exiting a lease.
For the year ended December 31, 2022, we recognized a net gain on the sale of assets of $6.7 million compared to a net
loss of $27.4 million for the year ended December 31, 2021 related to the sales of production facilities as part of our plan to
monetize non-core assets.
Domestic Gannett Media segment Adjusted EBITDA
In thousands
Net income attributable to Gannett
Non-operating pension income
Depreciation and amortization
Integration and reorganization costs
Other operating expenses
Asset impairments
(Gain) loss on sale or disposal of assets, net
Other items
Adjusted EBITDA (non-GAAP basis)(a)
Net income attributable to Gannett margin
Adjusted EBITDA margin (non-GAAP basis)(a)(b)
2022
Year ended December 31,
$ Change
2021
% Change
$
63,225
$
263,524
$
(200,299)
(35,921)
130,557
55,575
2
1,056
(6,738)
(108)
(72,216)
150,185
14,721
—
3,881
27,397
(2,559)
36,295
(19,628)
40,854
2
(2,825)
(34,135)
2,451
$
207,648
$
384,933
$
(177,285)
2.7 %
8.7 %
9.8 %
14.4 %
(76%)
(50%)
(13%)
***
***
(73%)
***
(96%)
(46%)
*** Indicates an absolute value percentage change greater than 100.
(a) See "Non-GAAP Financial Measures" below for additional information about non-GAAP measures.
(b) We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Revenues.
For the year ended December 31, 2022, the decrease in Domestic Gannett Media segment Adjusted EBITDA compared to
2021 was primarily attributable to the changes discussed above. In addition, for the year ended December 31, 2022, the
decrease in Non-operating pension income compared to 2021 was primarily due to a decrease in the expected return on plan
assets held by the GR Plan, mainly driven by a more conservative asset allocation, and to a lesser extent, the reduction to the
GR Plan assets as a result of the pension annuity entered into during the third quarter of 2022.
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Newsquest segment 2023 compared to 2022
A summary of our Newsquest segment results comparing the year ended December 31, 2023 to the year ended December
31, 2022 is presented below:
In thousands
Revenues:
Year ended December 31,
2023
2022
$ Change
% Change
Advertising and marketing services
$
134,126 $
136,294 $
Circulation
Other
Total revenues
Operating expenses:
Operating costs
Selling, general and administrative expenses
Depreciation and amortization
Integration and reorganization costs
Gain on sale or disposal of assets, net
Other operating expenses
Total operating expenses
Operating income
Revenues
73,279
26,575
233,980
120,264
63,947
8,792
1,763
(42)
215
72,112
26,224
234,630
125,405
69,563
7,374
4,425
(319)
725
194,939
207,173
$
39,041 $
27,457 $
(2,168)
1,167
351
(650)
(5,141)
(5,616)
1,418
(2,662)
277
(510)
(12,234)
11,584
(2%)
2%
1%
—%
(4%)
(8%)
19%
(60%)
(87%)
(70%)
(6%)
42%
The following table provides the breakout of Revenues by category:
In thousands
Local and national print
Classified print
Print advertising
Digital media
Digital marketing services
Digital classified
Digital advertising and marketing services
Year ended December 31,
2023
2022
$ Change
% Change
$
37,745 $
37,099
74,844
40,526 $
35,615
76,141
41,890
8,920
8,472
59,282
39,358
9,263
11,532
60,153
(2,781)
1,484
(1,297)
2,532
(343)
(3,060)
(871)
(7%)
4%
(2%)
6%
(4%)
(27%)
(1%)
Advertising and marketing services
134,126
136,294
(2,168)
(2%)
Print circulation
Digital-only subscription
Circulation
Other(a)
68,042
5,237
73,279
67,165
4,947
72,112
877
290
1,167
26,575
26,224
351
1%
6%
2%
1%
Total revenues
—%
(a) Other revenues included Other Digital revenues, including digital production revenues of $10.4 million and $9.5 million for the years ended December 31,
233,980 $
234,630
(650)
$
2023 and 2022, respectively.
For the year ended December 31, 2023, Local and national print advertising revenues decreased compared to 2022,
primarily due to a reduction in spend driven by the ongoing decline associated with secular trends reflecting the shift to digital
platforms, partially offset by an increase reflecting the impact of an acquisition in the first quarter of 2022. For the year ended
December 31, 2023, Classified print advertising revenues increased compared to 2022, primarily due to spend on legal
59
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notifications driven by the impact of an acquisition in the first quarter of 2022, partially offset by lower spend on real estate,
employment, and automobile classified advertisements.
For the year ended December 31, 2023, Digital media revenues increased compared to 2022, driven by the impact of an
acquisition in the first quarter of 2022. For the year ended December 31, 2023, Digital classified revenues decreased compared
to 2022, due to lower spend on employment notifications.
For the year ended December 31, 2023, Print circulation revenues increased compared to 2022, primarily due to the impact
of an acquisition in the first quarter of 2022.
Operating expenses
For the year ended December 31, 2023, Operating costs decreased $5.1 million compared to 2022. The following table
provides the breakout of the decrease in Operating costs:
In thousands
Newsprint and ink
Distribution
Compensation and benefits
Outside services
Other
Total operating costs
Year ended December 31,
2023
2022
$ Change
% Change
$
13,351 $
15,039 $
13,325
50,144
16,033
27,411
14,697
51,032
16,924
27,713
(1,688)
(1,372)
(888)
(891)
(302)
$
120,264 $
125,405 $
(5,141)
(11%)
(9%)
(2%)
(5%)
(1%)
(4%)
For the year ended December 31, 2023, Newsprint and ink costs decreased compared to 2022, primarily due to a decline
associated with lower volume due to the decline in revenues and a reduction in the cost of newsprint.
For the year ended December 31, 2023, Distribution costs decreased compared to 2022, primarily due to a decline
associated with lower revenues.
For the year ended December 31, 2023, Compensation and benefits costs decreased compared to 2022, primarily due to
lower payroll and employee benefit expenses driven by integration savings due to decreased headcount associated with an
acquisition in the first quarter of 2022.
For the year ended December 31, 2023, Outside services costs, which includes professional services fulfilled by third
parties, media fees and other digital costs, and paid search and ad serving services, decreased compared to 2022 due to lower
miscellaneous expenses driven by cost control initiatives.
For the year ended December 31, 2023, Selling, general and administrative expenses decreased by $5.6 million compared
to 2022. The following table provides the breakout of the decrease in Selling, general and administrative expenses:
In thousands
Compensation and benefits
Outside services and other
Total selling, general and administrative expenses
Year ended December 31,
2023
2022
$ Change
% Change
$
$
47,350 $
50,708 $
16,597
18,855
63,947 $
69,563 $
(3,358)
(2,258)
(5,616)
(7%)
(12%)
(8%)
For the year ended December 31, 2023, Compensation and benefits costs decreased compared to 2022, primarily due to
lower payroll and employee benefit expenses driven by a reduction in headcount tied to integration activities associated with an
acquisition in the first quarter of 2022, as well as ongoing cost control initiatives.
For the year ended December 31, 2023, Outside services and other costs decreased compared to 2022, primarily due to a
reduction in technology spend tied to integration activities associated with an acquisition in the first quarter of 2022.
For the year ended December 31, 2023, Depreciation and amortization expense increased compared to 2022, mainly due to
higher accelerated depreciation as a result of exiting space and higher amortization of capitalized software.
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For the year ended December 31, 2023, Integration and reorganization costs decreased compared to 2022, mainly due to a
decrease in severance costs of $2.5 million and a decrease in other costs of $0.2 million.
Newsquest segment Adjusted EBITDA
In thousands
Net income attributable to Gannett
Non-operating pension income
Depreciation and amortization
Integration and reorganization costs
Other operating expenses
Gain on sale or disposal of assets, net
Other Items
Adjusted EBITDA (non-GAAP basis)(a)
Net income attributable to Gannett margin
Adjusted EBITDA margin (non-GAAP basis)(a)(b)
2023
Year ended December 31,
$ Change
2022
% Change
$
49,257
$
49,301
$
(8,677)
8,792
1,763
215
(42)
(1,180)
(23,032)
7,374
4,425
725
(319)
1,553
$
50,128
$
40,027
$
21.1 %
21.4 %
21.0 %
17.1 %
(44)
14,355
1,418
(2,662)
(510)
277
(2,733)
10,101
—%
(62%)
19%
(60%)
(70%)
(87%)
***
25%
*** Indicates an absolute value percentage change greater than 100.
(a) See "Non-GAAP Financial Measures" below for additional information about non-GAAP measures.
(b) We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Revenues.
For the year ended December 31, 2023, the increase in Newsquest segment Adjusted EBITDA compared to 2022 was
primarily attributable to the changes discussed above. In addition, for the year ended December 31, 2023, the decrease in Non-
operating pension income compared to 2022 was primarily due to an increase in interest rates.
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Newsquest segment 2022 compared to 2021
A summary of our Newsquest segment comparing the year ended December 31, 2022 to the year ended December 31, 2021
is presented below:
In thousands
Revenues:
Year ended December 31,
2022
2021
$ Change
% Change
Advertising and marketing services
$
136,294 $
117,962 $
Circulation
Other
Total revenues
Operating expenses:
Operating costs
Selling, general and administrative expenses
Depreciation and amortization
Integration and reorganization costs
Asset impairments
Gain on sale or disposal of assets, net
Other operating expenses
Total operating expenses
Operating income
72,112
26,224
234,630
125,405
69,563
7,374
4,425
—
(319)
725
70,569
20,087
208,618
100,259
59,812
7,027
1,239
95
(9,929)
—
207,173
158,503
18,332
1,543
6,137
26,012
25,146
9,751
347
3,186
(95)
9,610
725
48,670
$
27,457 $
50,115 $
(22,658)
*** Indicates an absolute value percentage change greater than 100.
Revenues
The following table provides the breakout of Revenues by category:
In thousands
Local and national print
Classified print
Print advertising
Digital media
Digital marketing services
Digital classified
Digital advertising and marketing services
Year ended December 31,
2022
2021
$ Change
% Change
$
40,526 $
35,615
76,141
32,803 $
31,191
63,994
39,358
9,263
11,532
60,153
36,445
5,872
11,651
53,968
7,723
4,424
12,147
2,913
3,391
(119)
6,185
Advertising and marketing services
136,294
117,962
18,332
Print circulation
Digital-only subscription
Circulation
Other(a)
67,165
4,947
72,112
65,421
5,148
70,569
1,744
(201)
1,543
26,224
20,087
6,137
31%
Total revenues
12%
(a) Other revenues included Other Digital revenues, including digital production revenues of $9.5 million and $7.0 million for the years ended December 31,
234,630 $
208,618
26,012
$
2022 and 2021, respectively.
For the year ended December 31, 2022, Local and national print advertising revenues increased compared to 2021,
primarily due to $12.1 million of revenues associated with an acquisition in the first quarter of 2022, partially offset by a
reduction in spend from customers due to macroeconomic factors. For the year ended December 31, 2022, Classified print
62
16%
2%
31%
12%
25%
16%
5%
***
(100%)
(97%)
***
31%
(45%)
24%
14%
19%
8%
58%
(1%)
11%
16%
3%
(4%)
2%
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advertising revenues increased compared to 2021, primarily due to $6.7 million of revenues associated with an acquisition in
the first quarter of 2022, partially offset by lower spend on classified advertisements, including real estate and automotive.
For the year ended December 31, 2022, Digital media revenues increased compared to 2021, primarily due to $3.1 million
of revenues associated with an acquisition in the first quarter of 2022. For the year ended December 31, 2023, Digital marketing
services revenues increased compared to 2022, primarily due to $1.7 million of revenues associated with an acquisition in the
first quarter of 2022 as well as an increase in client counts.
For the year ended December 31, 2022, Print circulation revenues increased compared to 2021, primarily due to
$11.7 million of revenues associated with an acquisition in the first quarter of 2022, partially offset by a reduction in volume
offset by higher rates.
For the year ended December 31, 2022, Other revenues increased compared to 2021, primarily due to $4.0 million of
revenues associated with an acquisition in the first quarter of 2022.
Operating expenses
For the year ended December 31, 2022, Operating costs increased $25.1 million compared to 2021. The following table
provides the breakout of the increase in Operating costs:
In thousands
Newsprint and ink
Distribution
Compensation and benefits
Outside services
Other
Total operating costs
Year ended December 31,
2022
2021
$ Change
% Change
$
15,039 $
9,166 $
14,697
51,032
16,924
27,713
13,010
43,161
13,508
21,414
5,873
1,687
7,871
3,416
6,299
$
125,405 $
100,259 $
25,146
64%
13%
18%
25%
29%
25%
For the year ended December 31, 2022, Newsprint and ink costs increased compared to 2021, primarily associated with
higher revenues due to an acquisition in the first quarter of 2022.
For the year ended December 31, 2022, Distribution costs increased compared to 2021, primarily due to an acquisition in
the first quarter of 2022.
For the year ended December 31, 2022, Compensation and benefits costs increased compared to 2021, primarily due to an
acquisition in the first quarter of 2022.
For the year ended December 31, 2022, Outside services costs, which includes professional services fulfilled by third
parties, media fees and other digital costs, and paid search and ad serving services, increased compared to 2021, primarily due
to an acquisition in the first quarter of 2022.
For the year ended December 31, 2022, Other costs increased compared to 2021, primarily due to an acquisition in the first
quarter of 2022.
For the year ended December 31, 2022, Selling, general and administrative expenses increased by $9.8 million compared to
2021. The following table provides the breakout of the increase in Selling, general and administrative expenses:
In thousands
Compensation and benefits
Outside services and other
Total selling, general and administrative expenses
Year ended December 31,
2022
2021
$ Change
% Change
$
$
50,708 $
44,613 $
18,855
15,199
69,563 $
59,812 $
6,095
3,656
9,751
14%
24%
16%
For the year ended December 31, 2022, Compensation and benefits costs increased compared to 2021, primarily due to an
acquisition in the first quarter of 2022.
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For the year ended December 31, 2022, Outside services and other costs increased compared to 2021, primarily due to an
acquisition in the first quarter of 2022.
For the year ended December 31, 2022, Integration and reorganization costs increased compared to 2021, mainly due to an
increase in severance costs of $3.3 million, partially offset by a decrease in other costs of $0.1 million.
For the year ended December 31, 2021, we incurred a net gain of $9.9 million on the sale of assets as part of our plan to
monetize non-core assets.
Newsquest segment Adjusted EBITDA
In thousands
Net income attributable to Gannett
Non-operating pension income
Depreciation and amortization
Integration and reorganization costs
Other operating expenses
Asset Impairments
Gain on sale or disposal of assets, net
Other Items
Adjusted EBITDA (non-GAAP basis)(a)
Net income attributable to Gannett margin
Adjusted EBITDA margin (non-GAAP basis)(a)(b)
2022
Year ended December 31,
$ Change
2021
% Change
$
49,301
$
72,575
$
(23,274)
(23,032)
(23,141)
7,374
4,425
725
—
(319)
1,553
7,027
1,239
—
95
(9,929)
1,174
109
347
3,186
725
(95)
9,610
379
$
40,027
$
49,040
$
(9,013)
21.0 %
17.1 %
34.8 %
23.5 %
(32%)
—%
5%
***
***
(100%)
(97%)
32%
(18%)
*** Indicates an absolute value percentage change greater than 100.
(a) See "Non-GAAP Financial Measures" below for additional information about non-GAAP measures.
(b) We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Revenues.
For the year ended December 31, 2022, the decrease in Newsquest segment Adjusted EBITDA compared to 2021 was
primarily attributable to the changes discussed above.
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Digital Marketing Solutions segment 2023 compared to 2022
A summary of our DMS segment results is presented below:
In thousands
Revenues:
Advertising and marketing services
Total revenues
Operating expenses:
Operating costs
Selling, general and administrative expenses
Depreciation and amortization
Integration and reorganization costs
Loss on sale or disposal of assets, net
Total operating expenses
Operating income
Revenues
Year ended December 31,
2023
2022
$ Change
% Change
477,909
477,909
336,056
88,630
23,795
784
324
468,883
468,883
323,646
87,657
26,431
1,108
179
449,589
439,021
$
28,320 $
29,862 $
9,026
9,026
12,410
973
(2,636)
(324)
145
10,568
(1,542)
2%
2%
4%
1%
(10%)
(29%)
81%
2%
(5%)
For the year ended December 31, 2023, Advertising and marketing services revenues increased compared to 2022,
primarily due to growth in the core direct business, including growth in revenues associated with both local and multi-location
customers, and an increase in core platform average revenue per user ("Core platform ARPU") of 6.5% for the year ended
December 31, 2023, partially offset by the impact of the sunset of non-core products. Refer to "Key Performance Indicators"
below for further discussion of Core platform ARPU.
Operating expenses
For the year ended December 31, 2023, Operating costs increased $12.4 million compared to 2022. The following table
provides the breakout of the increase in Operating costs:
In thousands
Outside services
Compensation and benefits
Other
Total operating costs
Year ended December 31,
2023
2022
$ Change
% Change
$
294,073 $
283,380 $
35,604
6,379
32,633
7,633
$
336,056 $
323,646 $
10,693
2,971
(1,254)
12,410
4%
9%
(16%)
4%
For the year ended December 31, 2023, Outside services costs, which includes professional services fulfilled by third
parties, media fees and other digital costs, and paid search and ad serving services, increased compared to 2022, due to an
increase in expenses associated with third-party media fees driven by a corresponding increase in revenues.
For the year ended December 31, 2023, Compensation and benefits costs increased compared to 2022, primarily due to an
increase in payroll expense driven by higher headcount.
For the year ended December 31, 2023, Other costs decreased compared to 2022, primarily due to lower facility related
expenses, mainly as a result of exiting space associated with the sunset of non-core products.
For the year ended December 31, 2023, Selling, general and administrative expenses increased $1.0 million compared to
2022. The following table provides the breakout of the increase in Selling, general and administrative expenses:
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In thousands
Compensation and benefits
Outside services and other
Total selling, general and administrative expenses
Year ended December 31,
2023
2022
$ Change
% Change
$
$
76,190 $
74,867 $
12,440
12,790
88,630 $
87,657 $
1,323
(350)
973
2%
(3%)
1%
For the year ended December 31, 2023, Compensation and benefits costs increased compared to 2022, primarily due to an
increase in payroll expense of $2.9 million, driven by a higher bonus accrual, partially offset by lower employee benefit costs of
$1.5 million, mainly due to a decline in employer 401(k) plan matching contributions, which were suspended in the third
quarter of 2022.
For the year ended December 31, 2023, Outside services and other costs decreased compared to 2022, due to a decrease in
various miscellaneous expenses.
For the year ended December 31, 2023, Depreciation and amortization expense decreased compared to 2022, primarily due
to a decrease in amortization expense, resulting from the impact of intangibles becoming fully amortized in the fourth quarter of
2022, partially offset by an increase in depreciation expense related to capitalized software.
DMS segment Adjusted EBITDA
In thousands
Net income attributable to Gannett
Depreciation and amortization
Integration and reorganization costs
Loss on sale or disposal of assets, net
Other items
Adjusted EBITDA (non-GAAP basis)(a)
Net income attributable to Gannett margin
Adjusted EBITDA margin (non-GAAP basis)(a)(b)
Year ended December 31,
2023
2022
$ Change
% Change
$
28,841
$
26,919
$
23,795
784
324
(521)
26,431
1,108
179
2,943
$
53,223
$
57,580
$
6.0 %
11.1 %
5.7 %
12.3 %
1,922
(2,636)
(324)
145
(3,464)
(4,357)
7%
(10%)
(29%)
81%
***
(8%)
*** Indicates an absolute value percentage change greater than 100.
(a) See "Non-GAAP Financial Measures" below for additional information about non-GAAP measures.
(b) We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Revenues.
For the year ended December 31, 2023, the decrease in DMS segment Adjusted EBITDA compared to 2022 was primarily
attributable to the changes discussed above. In addition, for the year ended December 31, 2023, Other items decreased
compared to 2022, mainly due to foreign currency fluctuations.
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Digital Marketing Solutions segment 2022 compared to 2021
A summary of our DMS segment results is presented below:
In thousands
Operating revenues:
Year ended December 31,
2022
2021
$ Change
% Change
Advertising and marketing services
$
468,883 $
441,394 $
27,489
Other
Total operating revenues
Operating expenses:
Operating costs
Selling, general and administrative expenses
Depreciation and amortization
Integration and reorganization costs
Loss (gain) on sale or disposal of assets, net
Total operating expenses
Operating income
*** Indicates an absolute value percentage change greater than 100.
Operating revenues
—
468,883
323,646
87,657
26,431
1,108
179
439,021
905
442,299
299,014
92,325
30,061
1,710
(604)
422,506
$
29,862 $
19,793 $
(905)
26,584
24,632
(4,668)
(3,630)
(602)
783
16,515
10,069
6%
(100%)
6%
8%
(5%)
(12%)
(35%)
***
4%
51%
For the year ended December 31, 2022, Advertising and marketing services revenues increased compared to 2021,
primarily due to growth in the core direct business, as well as a growth in revenues associated with local markets, partially
offset by the impact of the sunset of non-core products.
Operating expenses
For the year ended December 31, 2022, Operating costs increased $24.6 million compared to 2021. The following table
provides the breakout of the increase in Operating costs:
In thousands
Outside services
Compensation and benefits
Other
Total operating costs
Year ended December 31,
2022
2021
$ Change
% Change
$
283,380 $
260,504 $
32,633
7,633
31,136
7,374
$
323,646 $
299,014 $
22,876
1,497
259
24,632
9%
5%
4%
8%
For the year ended December 31, 2022, Outside services costs, which include professional services fulfilled by third
parties, media fees and other digital costs, paid search and ad serving services, increased compared to 2021 due to an increase in
expenses associated with third-party media fees, driven by a corresponding increase in revenues.
For the year ended December 31, 2022, Compensation and benefits costs increased compared to 2021, primarily due to an
increase in payroll expense driven by higher headcount.
For the year ended December 31, 2022, Selling, general and administrative expenses decreased $4.7 million compared to
2021. The following table provides the breakout of the decrease in Selling, general and administrative expenses:
In thousands
Compensation and benefits
Outside services and other
Total selling, general and administrative expenses
Year ended December 31,
2022
2021
$ Change
% Change
$
$
74,867 $
69,749 $
12,790
22,576
87,657 $
92,325 $
5,118
(9,786)
(4,668)
7%
(43%)
(5%)
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For the year ended December 31, 2022, Compensation and benefits costs increased compared to 2021, primarily due to an
increase in payroll expense of $4.6 million driven by higher headcount, including an increase in incentive pay of $0.7 million,
driven by a corresponding increase in revenues, and an increase in employee benefit costs of $0.5 million, mainly due to higher
employer 401(k) plan matching contributions.
For the year ended December 31, 2022, Outside services and other costs decreased compared to 2021, due to a decrease in
various miscellaneous expenses, including lower technology and software costs and lower lease expenses, partially offset by
higher marketing and promotion costs, mainly driven by lead generation.
For the year ended December 31, 2022, Depreciation and amortization expense decreased compared to 2021, primarily due
to the impact of capitalized software fully amortized in the third quarter of 2021 related to the sunsetting of a non-core product.
DMS segment Adjusted EBITDA
In thousands
Net income attributable to Gannett
Depreciation and amortization
Integration and reorganization costs
Loss (gain) on sale or disposal of assets, net
Other items
Adjusted EBITDA (non-GAAP basis)(a)
Net income attributable to Gannett margin
Adjusted EBITDA margin (non-GAAP basis)(a)(b)
Year ended December 31,
2022
2021
$ Change
% Change
$
26,919
$
18,442
$
26,431
1,108
179
2,943
30,061
1,710
(604)
1,351
$
57,580
$
50,960
$
5.7 %
12.3 %
4.2 %
11.5 %
8,477
(3,630)
(602)
783
1,592
6,620
46%
(12%)
(35%)
***
***
13%
*** Indicates an absolute value percentage change greater than 100.
(a) See "Non-GAAP Financial Measures" below for additional information about non-GAAP measures.
(b) We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Revenues.
For the year ended December 31, 2022, the increase in DMS segment Adjusted EBITDA compared to 2021 was primarily
attributable to the changes discussed above. In addition, for the year ended December 31, 2022, Other items increased
compared to 2021, mainly due to foreign currency losses.
Corporate and other category 2023 compared to 2022
For the year ended December 31, 2023, Corporate and other revenues were $6.3 million compared to $5.4 million for the
year ended December 31, 2022.
For the year ended December 31, 2023, Corporate and other operating expenses decreased $20.4 million compared to 2022.
The following table provides the breakout of the decrease in Corporate and other operating expenses:
In thousands
Operating expenses:
Operating costs
Selling, general and administrative expenses
Depreciation and amortization
Integration and reorganization costs
Other operating expenses
Gain on sale or disposal of assets, net
Total operating expenses
*** Indicates an absolute value percentage change greater than 100.
Year ended December 31,
2023
2022
$ Change
% Change
23,356
41,919
17,834
16,339
1,196
(1,446)
10,050
63,854
17,660
26,866
1,165
(5)
$
99,198 $
119,590 $
13,306
(21,935)
174
(10,527)
31
(1,441)
(20,392)
***
(34%)
1%
(39%)
3%
***
(17%)
For the year ended December 31, 2023, Corporate and other operating expenses decreased compared to 2022, primarily
due to a decrease in Selling, general and administrative expenses, mainly driven by a decrease of $29.3 million in payroll and
employee benefit costs, a decrease in Integration and reorganization costs, primarily due to a decrease in severance costs of
$6.2 million and a decrease in other costs of $4.3 million, mainly due to a decrease in system integration costs and an increase
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in the gain on sale of assets driven by a $1.4 million gain on the sale of intellectual property, partially offset by an increase in
Operating costs.
Corporate and other category 2022 compared to 2021
For the year ended December 31, 2022, Corporate and other operating revenues were $5.4 million compared to $8.4
million for the year ended December 31, 2021.
For the year ended December 31, 2022, Corporate and other operating expenses decreased $32.4 million compared to 2021.
The following table provides the breakout of the decrease in Corporate and other operating expenses:
In thousands
Operating expenses:
Operating costs
Selling, general and administrative expenses
Depreciation and amortization
Integration and reorganization costs
Other operating expenses
(Gain) loss on sale or disposal of assets, net
Year ended December 31,
2022
2021
$ Change
% Change
10,050
63,854
17,660
26,866
1,165
(5)
8,780
73,592
16,685
31,614
20,952
344
1,270
(9,738)
975
(4,748)
(19,787)
(349)
14%
(13%)
6%
(15%)
(94%)
***
(21%)
Total operating expenses
$
119,590 $
151,967 $
(32,377)
*** Indicates an absolute value percentage change greater than 100.
For the year ended December 31, 2022, Corporate and other operating expenses decreased compared to 2021, primarily
due to a decrease in Other operating expenses driven by the absence in 2022 of third-party fees that were expensed in 2021
related to the 5-Year Term Loan, the 2026 Senior Notes, and to a lesser extent the Senior Secured Term Loan, a decrease in
Selling, general and administrative expenses driven primarily by a decrease of $7.9 million in payroll and employee benefits
costs and a $3.1 million decrease in other costs, including repairs and maintenance and utilities, partially offset by $1.3 million
of higher outside services, including legal fees, and a decrease in Integration and reorganization costs, mainly driven by a
$15.4 million decline in costs associated with systems implementation and outsourcing of corporate functions, partially offset
by a $10.7 million increase in severance costs.
LIQUIDITY AND CAPITAL RESOURCES
Our primary cash requirements are for working capital, debt obligations, and capital expenditures.
We expect to fund our operations and debt service requirements through cash provided by our operating activities. We
expect we will have adequate capital resources and liquidity to meet our ongoing working capital needs, borrowing obligations,
and all required capital expenditures for at least the next twelve months. However, a further economic downturn or an increased
rate of revenue declines would negatively impact our revenue, cash provided by operating activities and liquidity. We continue
to implement cost reduction initiatives to reduce our ongoing level of operating expense. We believe our ability to realize
benefits from our cost reduction initiatives will be necessary to offset the continued secular decline in our legacy print business
revenue streams. We believe that these measures are important in response to the overall challenging macroeconomic
environment that we are facing. Refer to "Overview - Macroeconomic Environment" above for further discussion.
Details of our cash flows are included in the table below:
In thousands
Cash provided by operating activities
Cash provided by investing activities
Cash used for financing activities
Effect of currency exchange rate change on cash
Increase (decrease) in cash, cash equivalents and restricted cash
Year ended December 31,
2023
2022
$
$
94,574 $
46,979
(135,511)
(234)
5,808 $
40,776
22,124
(102,867)
1,152
(38,815)
Cash flows provided by operating activities: Our largest source of cash provided by operating activities is Advertising
revenues, primarily generated from Local and national advertising and marketing services revenues (retail, classified, and
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online). Additionally, we generate cash through circulation subscribers, commercial printing and delivery services to third
parties, and events. Our primary uses of cash from our operating activities include compensation, newsprint, delivery, and
outside services.
For the year ended December 31, 2023, cash flows provided by operating activities were $94.6 million compared to $40.8
million for the year ended December 31, 2022. The increase in cash flows provided by operating activities was primarily due to
an increase in operating income, a decrease in contributions to our pension and other postretirement benefit plans, lower
inventory and lower compensation costs, partially offset by lower cash receipts related to deferred revenues, a decrease in
accounts payable due to lower cost structure and payment management and an increase in severance payments.
Cash flows provided by investing activities: For the year ended December 31, 2023, cash flows provided by investing
activities were $47.0 million compared to $22.1 million for the year ended December 31, 2022. The increase in cash flows
provided by investing activities was primarily due to lower payments for acquisitions, net of cash acquired, of $15.4 million, a
decrease in purchases of property, plant, and equipment of $7.3 million and an increase in proceeds from the sale of real estate
and other assets of $1.8 million.
Cash flows used for financing activities: For the year ended December 31, 2023, cash flows used for financing activities
were $135.5 million compared to $102.9 million for the year ended December 31, 2022. The increase in cash used for financing
activities was primarily due to the higher overall repayments of long-term debt, net of borrowings in 2022.
Debt
As of December 31, 2023, the carrying value of our outstanding debt totaled $1.045 billion, which consisted of $344.1
million related to the Senior Secured Term Loan, $281.2 million related to the 2026 Senior Notes, $416.0 million related to the
2027 Notes (defined below), and $3.3 million related to the remaining 4.75% convertible senior notes due April 15, 2024 (the
"2024 Notes").
The Senior Secured Term Loan bears interest at a per annum rate equal to the Adjusted Term SOFR (which shall not be less
than 0.50% per annum) plus a margin equal to 5.00% or an alternate base rate (which shall not be less than 1.50% per annum)
plus a margin equal to 4.00%. We are required to repay the Senior Secured Term Loan from time to time with (i) the proceeds
of non-ordinary course asset sales and casualty and condemnation events, (ii) the proceeds of indebtedness not permitted under
the Senior Secured Term Loan, and (iii) the aggregate amount of cash and cash equivalents on hand at the Company and its
restricted subsidiaries in excess of $100 million at the end of each fiscal year of the Company. Subsequent to the amendment
effective as of April 8, 2022, the Senior Secured Term Loan is amortized at a rate equal to $15.1 million per quarter (or, if the
ratio of debt secured on an equal basis with the Senior Secured Term Loan less unrestricted cash of the Company and its
restricted subsidiaries to Consolidated EBITDA (as such terms are defined in the Senior Secured Term Loan) (such ratio, the
"First Lien Net Leverage Ratio"), for the most recently ended period of four consecutive fiscal quarters is equal to or less than
1.20 to 1.00, $7.6 million per quarter). All obligations under the Senior Secured Term Loan are secured by all or substantially
all of the assets of the Company and the wholly-owned domestic subsidiaries of the Company (the "Senior Secured Term Loan
Guarantors"). The obligations of Gannett Holdings under the Senior Secured Term Loan are guaranteed on a senior secured
basis by the Company and the Senior Secured Term Loan Guarantors. For the year ended December 31, 2023, we made $88.0
million of prepayments, including quarterly amortization payments, on the Senior Secured Term Loan.
Interest on the 2026 Senior Notes is payable semi-annually in arrears. The 2026 Senior Notes mature on November 1, 2026,
unless redeemed or repurchased earlier pursuant to the 2026 Senior Notes Indenture. During the year ended December 31,
2023, we entered into privately negotiated agreements with certain holders of our 2026 Senior Notes, and repurchased $53.6
million of principal of our outstanding 2026 Senior Notes at a discount to par value.
Interest on the 6.0% Senior Secured Convertible Notes due 2027 (the "2027 Notes") is payable semi-annually in arrears. The
2027 Notes mature on December 1, 2027, unless earlier repurchased or converted. The 2027 Notes may be converted at any
time by the holders into cash, shares of our common stock, par value $0.01 per share (the "Common Stock") or any
combination of cash and Common Stock, at our election. The initial conversion rate is 200 shares of Common Stock per $1,000
principal amount of the 2027 Notes, which is equal to a conversion price of $5.00 per share of Common Stock (the "Conversion
Price"). For the year ended December 31, 2023, no shares were issued upon conversion, exercise, or satisfaction of the required
conditions.
Our Senior Secured Term Loan, 2024 Notes, 2026 Senior Notes and 2027 Notes all contain usual and customary covenants
and events of default. As of December 31, 2023, we were in compliance with all such covenants and obligations.
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Refer to Note 8 — Debt for additional discussion regarding our debt.
Additional information
We continue to evaluate our results of operations, liquidity and cash flows, and as part of these measures, we have taken
steps to manage cash outflow by rationalizing expenses and implementing various cost management initiatives. We do not
presently pay a quarterly dividend and there can be no assurance that we will pay dividends in the future. In addition, the terms
of our indebtedness, including the Senior Secured Term Loan, the 2026 Senior Notes Indenture and the 2027 Notes Indenture
have terms that restrict our ability to pay dividends.
On February 1, 2022, our Board of Directors authorized the repurchase of up to $100 million (the "Stock Repurchase
Program") of our Common Stock. Repurchases may be made from time to time through open market purchases or privately
negotiated transactions, pursuant to one or more plans established pursuant to Rule 10b5-1 under the Securities Exchange Act
of 1934, as amended, or by means of one or more tender offers, in each case, as permitted by securities laws and other legal
requirements. The amount and timing of the purchases, if any, will depend on a number of factors, including, but not limited to,
the price and availability of our shares, trading volume, capital availability, our performance and general economic and market
conditions. The Stock Repurchase Program may be suspended or discontinued at any time. Further, future repurchases under
our Stock Repurchase Program may be subject to various conditions under the terms of our various debt instruments and
agreements, unless an exception is available or we obtain a waiver or similar relief.
During the year ended December 31, 2023, we did not repurchase any shares of Common Stock under the Stock
Repurchase Program. As of December 31, 2023, the remaining authorized amount under the Stock Repurchase Program was
approximately $96.9 million. The Company does not currently anticipate repurchasing any shares of Common Stock during the
first quarter of 2024.
Beginning with the quarter ended December 31, 2022, and ending with the quarter ending September 30, 2024, the GR
Plan's appointed actuary has and will certify the GR Plan's funded status for each quarter (the "Quarterly Certification") in
accordance with U.S. GAAP. If the GR Plan is less than 100% funded, we will make a $1.0 million contribution to the GR Plan
no later than 60 days following the receipt of the Quarterly Certification, provided, however, that our obligation to make
additional contractual contributions will terminate the earlier of (a) the day following the date that a contractual contribution
would be due for the quarter ending September 30, 2024, and (b) the date we have made a total of $5.0 million of contractual
contributions subsequent to June 30, 2022. As of December 31, 2023, the GR Plan was more than 100% funded.
We expect our capital expenditures during the year ended December 31, 2024 to total approximately $50 million to
$60 million. These capital expenditures are anticipated to be primarily comprised of projects related to digital product
development, costs associated with our print and technology systems, and system upgrades.
Our leverage may adversely affect our business and financial performance and restricts our operating flexibility. The level
of our indebtedness and our ongoing cash flow requirements may expose us to a risk that a substantial decrease in operating
cash flows due to, among other things, continued or additional adverse economic conditions or adverse developments in our
business, could make it difficult for us to meet the financial and operating covenants contained in our Senior Secured Term
Loan, the 2026 Senior Notes, and the 2027 Notes. In addition, our leverage may limit cash flow available for general corporate
purposes such as capital expenditures as well as share repurchases and acquisitions and our flexibility to react to competitive,
technological, and other changes in our industry and economic conditions generally. We continue to closely monitor economic
factors, including, but not limited to, the current inflationary market and rising interest rates, and we expect to continue to take
the steps necessary to appropriately manage liquidity.
As of December 31, 2023, we had no off-balance sheet arrangements that are reasonably likely to have a material current or
future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
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Contractual obligations and commitments
We enter into various contractual arrangements as a part of our operations. Many of these contractual obligations are
discussed in the notes to our Consolidated financial statements. As of December 31, 2023, material obligations discussed in the
notes to our Consolidated financial statements included (i) principal payments on our long-term debt discussed in Note 8 —
Debt, (ii) operating leases discussed in Note 4 — Leases, and (iii) pension and postretirement benefits discussed in Note 9 —
Pensions and other postretirement benefit plans. We anticipate interest payments associated with our long-term debt totaling
$79.6 million in 2024, $70.0 million in 2025 and $90.0 million thereafter. Due to uncertainty with respect to the timing of
future cash flows associated with unrecognized tax benefits at December 31, 2023, we are unable to make reasonably reliable
estimates of the period of cash settlement. See Note 11 — Income taxes to the Consolidated financial statements for a further
discussion of income taxes.
In addition, we have purchase obligations which include digital licenses and information technology services, printing
contracts, professional services, interactive marketing agreements, and other legally binding commitments. As of December 31,
2023, we had future purchase obligations totaling $163.2 million due in 2024, $66.0 million due in 2025, and $27.0 million due
thereafter. Amounts for which we are liable under purchase orders outstanding at December 31, 2023 are reflected in the
Consolidated balance sheets as Accounts payable and accrued liabilities. We also have other noncurrent liabilities totaling $2.6
million due in 2024, $2.0 million due in 2025, and $5.1 million due thereafter.
NON-GAAP FINANCIAL MEASURES
A non-GAAP financial measure is generally defined as one that purports to measure historical or future financial
performance, financial position, or cash flows, but excludes or includes amounts that would not be so excluded or included in
the most comparable U.S. generally accepted accounting principles ("U.S. GAAP") measure.
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures we believe offer a useful view of the
overall operation of our businesses and may be different than similarly-titled measures used by other companies. We define
Adjusted EBITDA as Net income (loss) attributable to Gannett before (1) Income tax expense (benefit), (2) Interest expense,
(3) Gains or losses on the early extinguishment of debt, (4) Non-operating pension income, (5) Loss on convertible notes
derivative, (6) Depreciation and amortization, (7) Integration and reorganization costs, (8) Other operating expenses, including
third-party debt expenses and acquisition costs, (9) Asset impairments, (10) Goodwill and intangible impairments, (11) Gains or
losses on the sale or disposal of assets, (12) Share-based compensation, and (13) certain other non-recurring charges. We define
Adjusted EBITDA margin as Adjusted EBITDA divided by total Revenues.
Management's use of Adjusted EBITDA and Adjusted EBITDA margin
Adjusted EBITDA and Adjusted EBITDA margin are not measurements of financial performance under U.S. GAAP and
should not be considered in isolation or as an alternative to income (loss) from operations, net income (loss), or any other
measure of performance or liquidity derived in accordance with U.S. GAAP. We believe these non-GAAP financial measures,
as we have defined them, are helpful in identifying trends in our day-to-day performance because the items excluded have little
or no significance on our day-to-day operations. These measures provide an assessment of controllable expenses and afford
management the ability to make decisions which are expected to facilitate meeting current financial goals as well as achieve
optimal financial performance.
We use Adjusted EBITDA and Adjusted EBITDA margin as measures of our day-to-day operating performance, which is
evidenced by the publishing and delivery of news and other media and excludes certain expenses that may not be indicative of
our day-to-day business operating results.
Limitations of Adjusted EBITDA and Adjusted EBITDA margin
Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools. They should not be viewed in
isolation or as a substitute for U.S. GAAP measures of earnings or cash flows. Material limitations in making the adjustments to
our earnings to calculate Adjusted EBITDA and Adjusted EBITDA margin and using these non-GAAP financial measures as
compared to U.S. GAAP net income (loss) include: the cash portion of interest/financing expense, income tax (benefit)
provision, and charges related to asset impairments, which may significantly affect our financial results.
Management believes these items are important in evaluating our performance, results of operations, and financial position.
We use non-GAAP financial measures to supplement our U.S. GAAP results in order to provide a more complete
understanding of the factors and trends affecting our business.
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Adjusted EBITDA and Adjusted EBITDA margin are not alternatives to Net income (loss) attributable to Gannett and
margin as calculated and presented in accordance with U.S. GAAP. As such, they should not be considered or relied upon as
substitutes or alternatives for any such U.S. GAAP financial measures. We strongly urge you to review the reconciliation of Net
income (loss) attributable to Gannett to Adjusted EBITDA and Adjusted EBITDA margin along with our Consolidated
financial statements included elsewhere in this Annual Report on Form 10-K. We also strongly urge you not to rely on any
single financial measure to evaluate our business. In addition, because Adjusted EBITDA and Adjusted EBITDA margin are
not measures of financial performance under U.S. GAAP and are susceptible to varying calculations, the Adjusted EBITDA and
Adjusted EBITDA margin measures as presented in this report may differ from and may not be comparable to similarly titled
measures used by other companies.
The table below shows the reconciliation of Net loss attributable to Gannett to Adjusted EBITDA and Net loss attributable
to Gannett margin to Adjusted EBITDA margin for the periods presented:
In thousands
Net loss attributable to Gannett
Provision for income taxes
Interest expense
Gain on early extinguishment of debt
Non-operating pension income
Loss on convertible notes derivative
Depreciation and amortization
Integration and reorganization costs(a)
Other operating expenses
Asset impairments
Gain on sale or disposal of assets, net
Share-based compensation expense
Other items
Adjusted EBITDA (non-GAAP basis)
Net loss attributable to Gannett margin
Adjusted EBITDA margin (non-GAAP basis)
Year ended December 31,
$
2023
(27,791)
21,729
111,776
(4,529)
(9,382)
—
162,622
24,468
1,550
1,370
(40,101)
16,567
9,404
2022
(78,002)
2021
(134,962)
$
$
1,349
108,366
(399)
(58,953)
—
182,022
87,974
1,892
1,056
(6,883)
16,751
2,110
48,250
135,748
48,708
(95,357)
126,600
203,958
49,284
20,952
3,976
17,208
18,439
(9,092)
$
267,683
$
257,283
$
433,712
(1.0) %
10.0 %
(2.6) %
8.7 %
(4.2) %
13.5 %
(a) For the years ended December 31, 2023, 2022 and 2021, Integration and restructuring costs mainly reflect severance-related expenses and other
restructuring-related expenses, which represent costs for consolidating operations, systems implementation, outsourcing of corporate functions and facility
consolidations.
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KEY PERFORMANCE INDICATORS
A key performance indicator ("KPI") is generally defined as a quantifiable measurement or metric used to gauge
performance, specifically to help determine strategic, financial, and operational achievements, especially compared to those of
similar businesses.
We define Digital-only ARPU as digital-only subscription average monthly revenues divided by the average digital-only
paid subscriptions within the respective period. We define Core platform ARPU as core platform average monthly revenues
divided by average monthly customer count within the period. We define Core platform revenues as revenue derived from
customers utilizing our proprietary digital marketing services platform that are sold by either our direct or local market teams.
Management believes Digital-only ARPU, Core platform ARPU, digital-only paid subscriptions, core platform revenues
and core platform average customer count are KPIs that offer useful information in understanding consumer behavior, trends in
our business, and our overall operating results. Management utilizes these KPIs to track and analyze trends across our
segments.
The following tables provide information regarding certain KPIs for the Domestic Gannett Media, Newsquest and DMS
2023
2022
Change % Change
2021
Change % Change
Year ended December 31,
$
6.46 $
5.99 $
0.47
7.8 % $
6.02 $
(0.03)
(0.5) %
$
6.14 $
7.44 $
(1.30)
(17.5) % $
9.23 $
(1.79)
(19.4) %
$
6.45 $
6.04 $
0.41
6.8 % $
6.13 $
(0.09)
(1.5) %
segments:
In thousands, except ARPU
Domestic Gannett Media:
Digital-only ARPU
Newsquest:
Digital-only ARPU
Total Gannett:
Digital-only ARPU
DMS:
Core platform revenues
Core platform ARPU
Core platform average customer count
15.1
15.7
(0.6)
(3.8) %
14.8
0.9
$ 473,172 $ 462,067 $
2,459 $
$
2,620 $
11,105
161
2.4 % $ 421,468 $
2,367 $
6.5 % $
40,599
92
9.6 %
3.9 %
6.1 %
In thousands
Digital-only paid subscriptions:
Domestic Gannett Media:
Newsquest
Total Gannett
CRITICAL ACCOUNTING ESTIMATES
2023
2022
As of December 31,
% Change
2021
% Change
1,912
83
1,995
1,970
59
2,029
(2.9) %
40.7 %
(1.7) %
1,581
52
1,633
24.6 %
13.5 %
24.2 %
The preparation of financial statements in conformity with U.S. GAAP requires management to make decisions based on
estimates, assumptions, and factors it considers relevant to the circumstances. Such decisions include the selection of applicable
principles and the use of judgment in their application, the results of which could differ from those anticipated.
Goodwill and Indefinite-Lived Intangible Assets
Goodwill is tested for impairment annually on November 30 and 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. We have the option
to qualitatively assess whether it is more likely than not that the fair value of a reporting unit is less than its carrying value,
although we did not elect to use this option for the Company's evaluation as of November 30, 2023. If we elect to perform a
qualitative assessment and conclude it is more likely than not that the fair value of the reporting unit is equal to or greater than
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its carrying value, no further assessment of that reporting unit's goodwill is necessary; otherwise goodwill must be tested for
impairment. 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. We generally determine 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 involve 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, and future economic and market conditions. If the carrying value of
the reporting unit exceeds the estimate of fair value, we calculate the impairment as the excess of the carrying value of goodwill
over its implied fair value.
While the Company believes its judgments represent reasonably possible outcomes based on available facts and
circumstances, adverse changes to the assumptions, including those related to macroeconomic factors, comparable public
company trading values and prevailing conditions in the capital markets, could lead to future declines in the fair value of a
reporting unit. The Company continually evaluates whether current factors or indicators, such as prevailing conditions in the
business environment, capital markets or the economy generally, and actual or projected operating results, require the
performance of an interim impairment assessment of goodwill, as well as other long-lived assets. For example, any significant
shortfall, now or in the future, in advertising revenues or subscribers and/or consumer acceptance of our products could lead to
a downward revision in the fair value of certain reporting units.
Newspaper mastheads (newspaper titles) are not subject to amortization as it has been determined that the useful lives of
such mastheads are indefinite. Newspaper mastheads are tested for impairment annually, or more frequently if events or
changes in circumstances indicate the asset might be impaired. The impairment test consists of a comparison of the fair value of
each group of mastheads with their carrying amount. We used a relief from royalty approach, which utilizes a discounted cash
flow model to determine the fair value of newspaper mastheads. Our judgments and estimates of future operating results in
determining the reporting unit fair values are consistently applied in determining the fair value of mastheads.
The performance of our annual impairment analysis resulted in no impairments to goodwill or indefinite-lived intangible
assets for the year ended December 31, 2023. See Note 6 — Goodwill and intangible assets for further discussion. If our future
operating results are not in line with the cash flow forecasts underlying our impairment analysis, we could have an impairment
of our goodwill or intangible assets in the future and such impairment could materially affect our operating results.
Long-Lived Assets
We evaluate the carrying value of property, plant, and equipment and finite-lived intangible assets for impairment
whenever events or changes in circumstances indicate that the carrying value of an asset group may not be recoverable. The
evaluation is performed by asset group, which is the lowest level of identifiable cash flows independent of other assets. The
assessment of recoverability is based on management's estimates by comparing the sum of the estimated undiscounted cash
flows generated by the underlying asset groups to its carrying value of the asset groups to determine whether an impairment
existed at its lowest level of identifiable cash flows. If the carrying amount of the asset group is greater than the expected
undiscounted cash flows to be generated by the asset group, an impairment is recognized to the extent the carrying value of
such asset group exceeds its fair value. The market approach is used in some cases to estimate the fair value of property, plant,
and equipment, particularly when there is a change in the use of an asset.
As part of ongoing cost-efficiency programs, we have ceased a number of print operations. Pursuant to these actions,
certain assets and real estate to be retired have been assessed for impairment.
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Revenue Recognition
Our contracts with customers sometimes include promises to transfer multiple products and services to a customer.
Revenue from sales agreements that contain multiple performance obligations are allocated to each obligation based on the
relative standalone selling price. We determine standalone selling prices based on observable prices charged to customers. See
Note 2 — Summary of significant accounting policies for further discussion.
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.
We account for income taxes under the provisions of ASC 740, "Income Taxes" ("ASC 740"). Under ASC 740, deferred
tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and
liabilities using tax rates in effect for the year in which the differences are expected to affect taxable income. The assessment of
the realizability of deferred tax assets involves a high degree of judgment and complexity. Valuation allowances are established
when necessary to reduce deferred tax assets to the amounts that are expected to be realized. When we determine that it is more
likely than not that we will be able to realize our deferred tax assets in the future in excess of our net recorded amount, an
adjustment to the deferred tax asset would be made and reflected either in income or as an adjustment to goodwill. This
determination will be made by considering various factors, including our expected future results, that in our judgment will make
it more likely than not that these deferred tax assets will be realized.
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.
ASC 740 prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its
financial statements uncertain tax positions that a company has taken or expects to take on a tax return. Under ASC 740, the
financial statements reflect expected future tax consequences of such positions presuming the taxing authorities' full knowledge
of the position and all relevant facts, but without considering time values. Recognized income tax positions are measured at the
largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in
the period in which the change in judgment occurs.
Pension and Postretirement Liabilities
ASC 715, "Compensation—Retirement Benefits," requires recognition of an asset or liability in the consolidated balance
sheet reflecting the funded status of pension and other postretirement benefit plans, such as retiree health and life, with current-
year changes in the funded status recognized in the statement of stockholders' equity.
The determination of pension plan obligations and expense is based on a number of actuarial assumptions. Two critical
assumptions are the expected long-term rate of return on plan assets and the discount rate applied to pension plan obligations.
For other postretirement benefit plans, which provide for certain health care and life insurance benefits for qualifying retired
employees and which are not funded, critical assumptions in determining other postretirement benefit obligations and expense
are the discount rate and the assumed health care cost-trend rates.
Our pension plans had assets valued at $1.8 billion as of December 31, 2023 and the plans' benefit obligation was $1.7
billion, resulting in the plans being 108% funded at such date.
For 2023, the assumption used for the funded status discount rate was 5.40% 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 2023 would have increased plan obligations by approximately $31.6 million. A 50 basis point change
in the discount rate used to calculate the benefit for 2023 would have decreased total pension plan expense for 2023 by
approximately $2.4 million. To determine the expected long-term rate of return on pension plan assets, we consider the current
and expected asset allocations, as well as historical and expected returns on various categories of plan assets, input from the
actuaries and investment consultants, and long-term inflation assumptions. For our principal retirement plan, we used an
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assumption of 5.3% for our expected return on pension plan assets for 2023. If we were to reduce our expected rate of return
assumption by 50 basis points, the benefit for 2023 would have increased by approximately $4.4 million.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk from changes in interest rates, commodity prices, and foreign currency exchange rates.
Changes in these factors could cause fluctuations in earnings and cash flow. In the normal course of business, exposure to
certain of these market risks is managed as described below.
Interest Rates
We generally manage our risk associated with changes in interest rates through the use of a combination of variable and
fixed-rate debt. As of December 31, 2023, we had variable and fixed-rate debt totaling $350.4 million and $780.2 million,
respectively. Our variable-rate debt consisted of the Senior Secured Term Loan which bears interest at the Adjusted Term
Secured Overnight Financing Rate. A hypothetical interest rate increase of 100 basis points would have increased our interest
expense related to our variable-rate debt and likewise decreased our income and cash flows by approximately $3.5 million for
the year ended December 31, 2023. See Note 8 — Debt to our Consolidated financial statements for further discussion of our
debt.
Commodity Prices
Certain operating expenses of ours are sensitive to commodity price fluctuations, as well as inflation. Our primary
commodity price exposures are newsprint and, to a lesser extent, ink, which in the aggregate represented approximately 4% and
5% of our total operating expenses for the years ended December 31, 2023 and 2022, respectively. A hypothetical $10 per
metric ton increase in newsprint price would not have materially impacted our results of operations or cash flows based on
newsprint usage for the year ended December 31, 2023 of approximately 114,000 metric tons.
Foreign Currency
We are exposed to foreign exchange rate risk due to our 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 to our DMS segment which has operating activities
denominated in currencies other than the U.S. dollar, including the Australian dollar, Canadian dollar, Indian rupee, and New
Zealand dollar.
Translation gains or losses affecting the Consolidated statements of operations and comprehensive income (loss) have not
been significant in the past. Cumulative foreign currency translation gains and losses reported as part of equity equated to a loss
of $1.2 million at December 31, 2023, primarily due to the strengthening of the U.S. dollar compared to the British pound
sterling, and a loss of $14.9 million at December 31, 2022. A hypothetical 10% fluctuation of the price of the British pound
sterling and the currencies in our DMS segment against the U.S. dollar would not have materially impacted operating income
for the year ended December 31, 2023.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FINANCIAL STATEMENTS
Management's Report on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm (PCAOB ID: 248)
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)
Consolidated Balance Sheets
Consolidated Statements of Operations and Comprehensive Income (Loss)
Consolidated Statements of Cash Flows
Consolidated Statements of Equity
Notes to Consolidated Financial Statements
Page
79
80
81
82
83
84
85
86
87
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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 Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended. The Company's internal control over
financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) 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 (iii) 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.
Internal control over financial reporting is designed to provide reasonable assurance to the Company's management and
Board of Directors regarding the preparation of reliable financial statements for external purposes in accordance with generally
accepted accounting principles. Internal control over financial reporting includes self-monitoring mechanisms and actions taken
to correct deficiencies as they are identified. Because of the inherent limitations in any internal control, no matter how well
designed, misstatements may occur and not be prevented or detected. Accordingly, even effective internal control over financial
reporting can provide only reasonable assurance with respect to financial statement preparation. Further, the evaluation of the
effectiveness of internal control over financial reporting was made as of a specific date, and continued effectiveness in future
periods is subject to the risks that controls may become inadequate because of changes in conditions or to the degree that
compliance with the policies and procedures may decline.
Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the
framework set forth in "Internal Control-Integrated Framework" issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework). Based on its evaluation, management concluded that, as of December 31, 2023, the
Company's internal control over financial reporting is effective based on the specified criteria.
The effectiveness of internal control over financial reporting as of December 31, 2023 has been audited by the Company's
independent registered public accounting firm, Grant Thornton LLP, as stated in their report on page 80 herein.
79
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Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
Gannett Co., Inc.
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of Gannett Co., Inc. and subsidiaries (the "Company") as of
December 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). In our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in
the 2013 Internal Control—Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
("PCAOB"), the consolidated financial statements of the Company as of and for the year ended December 31, 2023, and our
report dated February 22, 2024, expressed an unqualified opinion on those financial statements.
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/ GRANT THORNTON LLP
New York, New York
February 22, 2024
80
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Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
Gannett Co., Inc.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheet of Gannett Co., Inc. and subsidiaries (the "Company") as of
December 31, 2023, the related consolidated statements of operations and comprehensive income (loss), equity, and cash flows
for the year ended December 31, 2023, and the related notes (collectively referred to as the "financial statements"). In our
opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December
31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with
accounting principles generally accepted in the United States of America.
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, 2023, based on criteria established in
the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO"), and our report dated February 22, 2024 expressed an unqualified opinion.
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 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 the financial statements are free of material misstatement, whether due to
error or fraud. Our audit 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 audit 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 audit provides a reasonable basis for our opinion.
Critical audit matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or
required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the
financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there
are no critical audit matters.
/s/ GRANT THORNTON LLP
We have served as the Company's auditor since 2023.
New York, New York
February 22, 2024
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Report of Independent Registered Public Accounting Firm
To the Stockholders 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, 2022
and 2021, the related consolidated statements of operations and comprehensive income (loss), equity and cash flows for each of
the three years in the period ended December 31, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2022, 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, 2022, 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 23, 2023 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 served as the Company's auditor from 2007 to 2023.
Tysons, VA
February 23, 2023, except for the recast 2022 and 2021 segment information discussed in Note 1, as to which the date is
February 22, 2024.
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GANNETT CO., INC.
CONSOLIDATED BALANCE SHEETS
In thousands, except share data
Assets
Current assets:
Cash and cash equivalents
Accounts receivable, net of allowance for doubtful accounts of $16,338 and $16,697, respectively
Inventories
Prepaid expenses
Other current assets
Total current assets
Property, plant, and equipment, net
Operating lease assets
Goodwill
Intangible assets, net
Deferred tax assets
Pension and other assets
Total assets
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities
Deferred revenue
Current portion of long-term debt
Operating lease liabilities
Other current liabilities
Total current liabilities
Long-term debt
Convertible debt
Deferred tax liabilities
Pension and other postretirement benefit obligations
Long-term operating lease liabilities
Other long-term liabilities
Total noncurrent liabilities
Total liabilities
Commitments and contingent liabilities (see Note 13)
Equity
Preferred stock, $0.01 par value per share, 300,000 shares authorized, none of which were issued and
December 31,
2023
December 31,
2022
$
$
$
100,180 $
266,096
26,794
36,210
14,957
444,237
239,087
221,733
533,876
524,350
37,125
180,839
2,181,247 $
293,444 $
120,502
63,752
45,763
10,052
533,513
564,836
416,036
2,028
42,661
203,871
100,989
1,330,421
1,863,934
94,255
289,415
45,223
46,205
32,679
507,777
305,994
233,322
533,166
613,358
56,618
143,320
2,393,555
351,848
153,648
60,452
44,872
6,218
617,038
695,642
405,681
1,439
50,710
219,109
108,563
1,481,144
2,098,182
outstanding at December 31, 2023 and December 31, 2022
—
—
Common stock, $0.01 par value per share, 2,000,000,000 shares authorized; 158,554,705 shares issued
and 148,939,463 shares outstanding at December 31, 2023; 153,286,104 shares issued and
146,223,179 shares outstanding at December 31, 2022
Treasury stock, at cost, 9,615,242 shares and 7,062,925 shares at December 31, 2023 and
December 31, 2022, respectively
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive loss
Total Gannett stockholders' equity
Noncontrolling interests
Total equity
Total liabilities and equity
The accompanying notes are an integral part of these consolidated financial statements.
1,586
1,533
(17,393)
1,426,325
(1,027,192)
(65,541)
317,785
(472)
317,313
2,181,247 $
(14,737)
1,409,578
(999,401)
(101,231)
295,742
(369)
295,373
2,393,555
$
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GANNETT CO., INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
In thousands, except per share amounts
Advertising and marketing services
Circulation
Other
Total revenues
Operating costs
Selling, general and administrative expenses
Depreciation and amortization
Integration and reorganization costs
Asset impairments
(Gain) loss on sale or disposal of assets, net
Other operating expenses
Total operating expenses
Operating income (loss)
Interest expense
(Gain) loss on early extinguishment of debt
Non-operating pension income
Loss on convertible notes derivative
Other non-operating income, net
Non-operating expenses
Loss before income taxes
Provision for income taxes
Net loss
Net loss attributable to noncontrolling interests
Net loss attributable to Gannett
Loss per share attributable to Gannett - basic
Loss per share attributable to Gannett - diluted
Other comprehensive income (loss):
Foreign currency translation adjustments
Pension and other postretirement benefit items:
Net actuarial gain (loss)
Amortization of net actuarial gain (loss)
Change in prior service cost
Amortization of prior service cost
Equity method investments
Other
Total pension and other postretirement benefit items
Other comprehensive income (loss) before tax
Income tax provision (benefit) related to components of other comprehensive
income (loss)
Other comprehensive income (loss), net of tax
Year ended December 31,
2023
2022
2021
$
1,387,114 $
1,496,137 $
1,651,161
927,821
348,615
2,663,550
1,692,031
735,339
162,622
24,468
1,370
(40,101)
1,550
1,084,637
364,529
2,945,303
1,860,353
852,488
182,022
87,974
1,056
(6,883)
1,892
1,249,674
307,248
3,208,083
1,901,564
902,064
203,958
49,284
3,976
17,208
20,952
2,577,279
2,978,902
3,099,006
86,271
111,776
(4,529)
(9,382)
—
(5,429)
92,436
(6,165)
21,729
(33,599)
108,366
(399)
(58,953)
—
(5,707)
43,307
(76,906)
1,349
109,077
135,748
48,708
(95,357)
126,600
(18,701)
196,998
(87,921)
48,250
$
$
$
$
$
(27,894) $
(78,255) $
(136,171)
(103)
(253)
(1,209)
(27,791) $
(78,002) $
(134,962)
(0.20) $
(0.20) $
(0.57) $
(0.57) $
(1.00)
(1.00)
13,683 $
(24,008) $
(604)
33,135
(185,282)
13,811
(305)
3,307
(502)
610
(7,415)
28,830
42,513
6,823
35,690
(500)
—
66
—
5,283
(180,433)
(204,441)
(43,212)
(161,229)
64
—
—
—
(387)
13,488
12,884
3,059
9,825
Comprehensive income (loss)
Comprehensive loss attributable to noncontrolling interests(a)
Comprehensive income (loss) attributable to Gannett
(a) For the years ended December 31, 2023 and 2022, there were no redeemable noncontrolling interests included in Net loss attributable to noncontrolling
interests. For the year ended December 31, 2021, Net loss attributable to noncontrolling interests included $1.1 million, relating to redeemable noncontrolling
interests.
(239,231) $
(239,484)
7,899 $
7,796
(253)
(103)
$
(125,137)
(126,346)
(1,209)
The accompanying notes are an integral part of these consolidated financial statements.
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GANNETT CO., INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands
Operating activities
Net loss
Adjustments to reconcile net loss to operating cash flows:
Depreciation and amortization
Share-based compensation expense
Non-cash interest expense
Provision for deferred income taxes
(Gain) loss on sale or disposal of assets, net
Loss on convertible notes derivative
(Gain) loss on early extinguishment of debt
Asset impairments
Pension and other postretirement benefit obligations
Change in other assets and liabilities:
Accounts receivable, net
Inventory
Prepaid expenses
Accounts payable and accrued liabilities
Deferred revenue
Other assets and liabilities
Cash provided by operating activities
Investing activities
Acquisitions, net of cash acquired
Purchase of property, plant, and equipment
Proceeds from sale of real estate and other assets
Change in other investing activities
Cash provided by investing activities
Financing activities
Payments of deferred financing costs
Borrowings of long-term debt
Repayments of long-term debt
Repurchase of convertible debt
Acquisition of noncontrolling interests
Treasury stock
Changes in other financing activities
Cash used for financing activities
Effect of currency exchange rate change on cash
Increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of year
Cash, cash equivalents and restricted cash at end of year
Year ended December 31,
2022
2023
2021
$
(27,894) $
(78,255) $
(136,171)
162,622
16,567
21,199
11,514
(40,101)
—
(4,529)
1,370
(13,917)
34,135
18,510
16,680
(65,094)
(29,971)
(6,517)
94,574
—
(38,116)
85,298
(203)
46,979
182,022
16,751
21,303
2,549
(6,883)
—
(399)
1,056
(80,012)
44,943
(7,434)
3,244
(23,653)
(30,076)
(4,380)
40,776
(15,432)
(45,376)
83,504
(572)
22,124
203,958
18,439
25,507
44,970
17,208
126,600
48,708
3,976
(150,824)
(33,246)
(2,824)
5,576
(33,457)
931
(11,898)
127,453
(125)
(39,560)
111,765
(1,433)
70,647
—
—
(133,821)
—
—
(2,642)
952
(135,511)
(234)
5,808
104,804
110,612 $
(1,652)
80,000
(170,994)
—
(2,050)
(6,555)
(1,616)
(102,867)
1,152
(38,815)
143,619
104,804 $
(21,071)
1,934,940
(2,156,046)
(15,012)
—
(3,244)
(739)
(261,172)
(35)
(63,107)
206,726
143,619
$
The accompanying notes are an integral part of these consolidated financial statements.
85
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GANNETT CO., INC.
CONSOLIDATED STATEMENTS OF EQUITY
In thousands
Common stock
Shares
$
Additional
paid-in
capital
Accumulated
other
comprehensive
income (loss)
Accumulated
deficit
Treasury stock
Shares
$
Non-
controlling
interests(a)
Total
equity
Balance at December 31, 2020 139,495 $ 1,395 $ 1,103,881 $
50,173 $
(786,437)
1,392 $ (4,903) $
— $ 364,109
Net loss attributable to Gannett
—
—
Restricted share grants
Restricted stock awards settled,
net of withholdings
3,883
1,072
39
10
—
(39)
(1,912)
—
—
—
(134,962)
—
—
—
—
—
Other comprehensive income,
net(b)
Share-based compensation
expense
Equity component - 2027 Notes
Issuance of common stock
Remeasurement of redeemable
noncontrolling interests
Treasury stock
Restricted share forfeiture
Other activity
—
—
—
9,825
—
—
—
—
217
—
—
2
—
—
—
—
—
—
—
—
18,439
279,557
136
126
—
—
18
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
597
379
—
—
—
—
—
—
—
—
(3,244)
(4)
—
(66)
(135,028)
—
—
—
—
—
—
—
—
—
(1,902)
9,825
18,439
279,557
138
126
(3,244)
(4)
(2,419)
(2,401)
Balance at December 31, 2021 144,667 $ 1,446 $ 1,400,206 $
Net loss attributable to Gannett
Acquisition of noncontrolling
—
—
—
59,998 $
—
(921,399)
(78,002)
2,368 $ (8,151) $
—
—
(2,485) $ 529,615
(78,255)
(253)
interests
Restricted share grants
Restricted stock awards settled,
net of withholdings
Performance stock units settled,
net of withholdings
Other comprehensive loss,
net(b)
Share-based compensation
expense
Issuance of common stock
Treasury stock
Restricted share forfeiture
Other activity
—
7,127
—
71
615
563
7
6
(4,419)
(71)
(1,737)
(892)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(161,229)
—
—
—
—
16,751
314
—
—
—
3
—
—
—
135
—
—
(395)
—
—
—
—
—
—
—
—
—
—
—
—
1,568
3,127
—
—
—
—
—
—
—
(6,555)
(31)
—
2,369
—
—
—
(2,050)
—
(1,730)
(886)
—
(161,229)
—
—
—
—
—
16,751
138
(6,555)
(31)
(395)
Balance at December 31, 2022 153,286 $ 1,533 $ 1,409,578 $
(101,231) $
(999,401)
7,063 $ (14,737) $
(369) $ 295,373
Net loss attributable to Gannett
—
—
Restricted share grants
Performance stock units settled,
net of withholdings
4,682
97
47
1
—
(47)
(127)
—
—
—
(27,791)
—
—
—
—
—
Other comprehensive income,
net(b)
Share-based compensation
expense
Issuance of common stock
Treasury stock
Restricted share forfeiture
Other activity
—
—
—
35,690
—
—
—
—
16,567
490
—
—
—
5
—
—
—
95
—
—
259
—
—
—
—
—
—
—
—
—
—
—
—
1,132
1,420
—
—
—
—
—
—
—
(2,642)
(14)
—
(103)
(27,894)
—
—
—
—
—
—
—
—
—
(126)
35,690
16,567
100
(2,642)
(14)
259
Balance at December 31, 2023 158,555 $ 1,586 $ 1,426,325 $
(a) Excludes Redeemable noncontrolling interests which are reflected in temporary equity.
(b) Other comprehensive income (loss) is net of an income tax provision of $6.8 million for the year ended December 31, 2023, net of an income tax benefit of
9,615 $ (17,393) $
(472) $ 317,313
(65,541) $
(1,027,192)
$43.2 million for the year ended December 31, 2022 and net of an income tax provision of $3.1 million for the year ended December 31, 2021.
The accompanying notes are an integral part of these consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 — Description of business and basis of presentation
Description of business
Gannett Co., Inc. ("Gannett", "we", "us", "our", or the "Company") is a diversified media company with expansive reach at
the national and local level dedicated to empowering and enriching communities. We seek to inspire, inform, and connect
audiences as a sustainable, growth focused media and digital marketing solutions company. We endeavor to deliver essential
content, marketing solutions, and experiences for curated audiences, advertisers, consumers, and stakeholders by leveraging our
diverse teams and suite of products to enrich the local communities and businesses we serve.
Our current portfolio of trusted media brands includes the USA TODAY NETWORK, comprised of the national
publication, USA TODAY, and local media organizations in the United States (the "U.S."), and Newsquest, a wholly-owned
subsidiary operating in the United Kingdom (the "U.K."). Our digital marketing solutions brand, LocaliQ, uses innovation and
software to enable small and medium-sized businesses ("SMBs") to grow, and USA TODAY NETWORK Ventures, our events
division, creates impactful consumer engagements, promotions, and races.
Through USA TODAY, our network of local properties, and Newsquest, we deliver high-quality, trusted content with a
commitment to balanced, unbiased journalism, where and when consumers want to engage. We have strong relationships with
hundreds of thousands of local and national businesses in both our U.S. and U.K. markets due to our large local and national
sales forces and a robust advertising and digital marketing solutions product suite. Our strategy prioritizes maximizing the
monetization of our audience through the growth of increasingly diverse and highly recurring digital businesses. We deliver
value to our customers, advertisers, partners and shareholders with essential content, joyful experiences, and relevant digital
solutions.
We report in three segments: Domestic Gannett Media, Newsquest and Digital Marketing Solutions ("DMS"). We also
have a Corporate and other category that includes activities not directly attributable to a specific reportable segment and
includes broad corporate functions, such as legal, human resources, accounting, analytics, finance, marketing and technology,
as well as other general business costs. Effective with the fourth quarter of 2023, the Company is reporting financial
information for its Newsquest business in a separate segment. Previously, the financial information for this segment was
aggregated with Domestic Gannett Media and, together, formed the Gannett Media reportable segment. As a result, the
Company has revised its historical disclosures to reflect the new Domestic Gannett Media and Newsquest reportable segments
for all years presented. A full description of our reportable segments is included in Note 14 — Segment reporting. Additionally,
certain other disclosures in Note 3 — Revenues, Note 6 — Goodwill and intangible assets and Note 7 — Integration and
reorganization costs and asset impairments have been revised to reflect the new reportable segments.
Basis of presentation
The Consolidated financial statements include all the assets, liabilities, revenues, expenses and cash flows of entities which
Gannett controls due to ownership of a majority voting interest ("subsidiaries"). All significant intercompany accounts and
transactions have been eliminated in consolidation. The Company consolidates entities that it controls due to ownership of a
majority voting interest.
Use of estimates
The preparation of the financial statements in conformity with U.S. generally accepted accounting principles ("U.S.
GAAP") requires management to make estimates and assumptions that affect the amounts reported in the Consolidated financial
statements and footnotes thereto. Actual results could differ materially from those estimates.
Significant estimates inherent in the preparation of the Consolidated financial statements include pension and
postretirement benefit obligation assumptions, income taxes, goodwill and intangible asset impairment analysis, valuation of
property, plant, and equipment and the mark to market of the conversion feature associated with the convertible debt.
Reclassifications
Certain reclassifications have been made to the prior year Consolidated financial statements to conform to classifications
used in the current year. These reclassifications had no impact on net loss, shareholders' equity or cash flows as previously
reported.
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NOTE 2 — Summary of significant accounting policies
Cash, cash equivalents and restricted cash and Supplementary cash flow information
Cash equivalents represent highly liquid certificates of deposit which have original maturities of three months or less.
Restricted cash is held as cash collateral for certain business operations. Restricted cash primarily consists of funding for letters
of credit, cash held in an irrevocable grantor trust for our deferred compensation plans and cash held with banking institutions
for insurance plans.
The following table presents a reconciliation of cash, cash equivalents and restricted cash:
In thousands
Cash and cash equivalents
Restricted cash, included in prepaid expenses and other current assets
Restricted cash, included in other assets
Total cash, cash equivalents and restricted cash
December 31,
2023
2022
2021
$
100,180 $
94,255 $
130,756
371
10,061
563
9,986
4,606
8,257
$
110,612 $
104,804 $
143,619
The following table presents supplementary cash flow information, including non-cash investing and financing activities:
In thousands
Net cash paid (refund) for taxes, net
Cash paid for interest
Non-cash investing and financing activities:
Accrued capital expenditures
Accounts receivable
Year ended December 31,
2023
2022
2021
$
8,222 $
3,409 $
(8,324)
89,335
86,485
103,879
2,390
699
1,682
Accounts receivable are stated at amounts due from customers, net of allowances, which reflect the Company's expected
credit losses based on historical experience as well as current and expected economic conditions.
Inventory
Inventory consists principally of newsprint, which is valued at the lower of cost or net realizable value. Cost is determined
using the first-in, first-out ("FIFO") method.
Property, plant, and equipment, software development costs and depreciation
Property, plant, and equipment are recorded at cost or at fair value for property, plant, and equipment related to acquired
businesses. Routine maintenance and repairs are expensed as incurred. Depreciation is calculated under the straight-line method
over the estimated useful lives. Leasehold improvements are amortized under the straight-line method over the shorter of the
lease term or estimated useful life of the asset.
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 Operating costs in the accompanying Consolidated statements of
operations and comprehensive income (loss).
Property, plant, and equipment and software development costs are evaluated for impairment in accordance with our policy
for amortizable intangible assets and other long-lived assets.
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A breakout of property, plant, and equipment and software is presented below:
In thousands
Land
Buildings and improvements
Machinery and equipment
Capitalized software
Furniture and fixtures
Construction in progress
Total
Less: accumulated depreciation(a)
December 31,
2023
2022
Useful Lives (range)
$
21,990 $
147,171
258,432
114,122
23,541
10,239
575,495
(336,408)
30,328
179,657
320,414
95,480
28,904
11,733
666,516
(360,522)
10 years
3 years
3 years
7 years
-
-
-
-
30 years
20 years
5 years
10 years
Property, plant, and equipment, net
(a) Includes accumulated depreciation of capitalized software of approximately $74.4 million and $62.5 million for the years ended December 31, 2023 and
239,087 $
305,994
$
2022, respectively.
Depreciation expense was $72.6 million, $86.4 million, and $100.9 million for the years ended December 31, 2023, 2022,
and 2021, respectively.
Goodwill, intangible and long-lived assets
Goodwill represents the excess of acquisition cost over the fair value of assets acquired, including identifiable intangible
assets, net of liabilities assumed. Indefinite-lived intangible assets consist of newspaper mastheads and finite-lived intangible
assets consist of advertiser, subscriber and other customer relationships, as well as trade names, and developed technology.
Newspaper mastheads are not amortized because it has been determined that the useful lives of such mastheads are indefinite.
Intangible assets that have finite useful lives are amortized over those useful lives.
Goodwill is tested for impairment annually as of November 30 and 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. We perform our
impairment analysis on each of our reporting units. We evaluate our reporting units annually, as well as when changes in our
operating structure occur. The Company has the option to qualitatively assess whether it is more likely than not that the fair
value of a reporting unit is less than its carrying value. If the Company elects to perform a qualitative assessment and concludes
it is more likely than not that the fair value of the reporting unit is equal to or greater than its carrying value, no further
assessment of that reporting unit's goodwill is necessary; otherwise goodwill must be tested for impairment. 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 involve 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, and future economic and market conditions. If the carrying value of the reporting
unit exceeds the estimate of fair value, we calculate the impairment as the excess of the carrying value of goodwill over its
implied fair value.
Indefinite-lived intangible assets, which are newspaper mastheads, are tested for impairment annually or more frequently if
events or changes in circumstances indicate the asset might be impaired. The impairment test consists of a comparison of the
fair value of each group of mastheads with their carrying amount. We use a relief from royalty approach which utilizes a
discounted cash flow model to determine the fair value of newspaper mastheads. Our judgments and estimates of future
operating results in determining the reporting unit fair values are consistently applied in determining the fair value of
mastheads.
The Company assesses the recoverability of its long-lived assets, including property, plant, and equipment and finite-lived
intangible assets, whenever events or changes in circumstances indicate their carrying amounts may not be recoverable. The
evaluation is performed by asset group, which is the lowest level of identifiable cash flows independent of other assets. The
assessment of recoverability is based on management's estimates by comparing the sum of the estimated undiscounted cash
flows generated by the underlying asset groups to its carrying value of the asset groups to determine whether an impairment
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existed at its lowest level of identifiable cash flows. If the carrying amount of the asset group is greater than the expected
undiscounted cash flows to be generated by the asset group, an impairment is recognized to the extent the carrying value of
such asset group exceeds its fair value.
All three of our reporting units have goodwill balances. We conducted our goodwill and indefinite-lived intangible asset
impairment testing in the fourth quarter of 2023 and did not identify any impairment. In addition, we had no impairments of
goodwill and indefinite-lived intangible assets in 2022 and 2021.
See Note 6 — Goodwill and intangible assets for further discussion of Goodwill and intangible assets.
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. The Company establishes a valuation allowance if it is more likely than
not that all or a portion of a deferred tax asset will not be realized. See Note 11 — Income taxes for further discussion.
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.
Fair value of financial instruments
The carrying value of the Company's cash equivalents, accounts receivable, accounts payable, and accrued liabilities
approximate fair value due to the short maturity of these instruments. A discussion of the fair value level of the Company's debt
and embedded conversion option is disclosed in Note 8 — Debt. For further details surrounding our policies on fair value
measurement, including the fair values of our pension plan assets, refer to Note 10 — Fair value measurement.
Deferred financing costs
Deferred financing costs consist of costs incurred in connection with debt financings and are recorded as a contra-liability
in Long-term debt on the Consolidated balance sheets. Such costs are amortized using the effective interest method over the
estimated remaining term of the debt. This amortization represents a component of Interest expense.
Revenue recognition
Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that
reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Our contracts with
customers sometimes include promises to transfer multiple products and services to a customer. Revenue from sales agreements
that contain multiple performance obligations are allocated to each obligation based on the relative standalone selling price. We
determine standalone selling prices based on observable prices charged to customers.
Advertising and marketing services revenues
The Company generates Print advertising revenues primarily by delivering advertising in its national publication, USA
TODAY, and in its local publications including newspapers. Advertising revenues are categorized as local retail, local
classified, online, and national. Print advertising revenue is recognized upon publication of the advertisement.
Digital advertising and marketing revenues are generated primarily by online marketing products provided by our DMS
segment. The Company enters 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.
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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.
We recognize revenue when the performance obligation is satisfied.
Circulation revenues
Circulation revenues are derived from print and digital subscriptions as well as single copy sales at retail stores, vending
racks and boxes. Circulation revenues from subscribers are generally billed to customers at the beginning of the subscription
period and are typically recognized over the subscription period as the performance obligations are delivered. The term of
customer subscriptions normally ranges from one to twelve months. Circulation revenues from single-copy income are
recognized based on the date of publication.
Other revenues
The Company provides commercial printing services to third parties as a means to generate incremental revenue and utilize
excess printing capacity. Customers consist primarily of other publishers that do not have their own printing presses and do not
compete with other Gannett publications. The Company also prints other commercial materials, including flyers, business cards
and invitations. Revenue is generally recognized upon delivery. In addition, the Company generates revenues from its events
and promotions business. Revenues are generated primarily through ticket sales, endurance events and race management
services. Revenue is generally recognized when the event occurs.
Practical expedients and exemptions
The Company generally expenses sales commissions or other costs to obtain contracts when incurred because the
amortization period is generally one year or less. These costs are recorded within Selling, general and administrative expenses.
The Company does not disclose unsatisfied performance obligations for (i) contracts with an original expected length of
one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which the Company has the right
to invoice for services performed.
Deferred revenues
The Company records deferred revenues when cash payments are received in advance of the Company's performance
obligation. The Company's primary source of deferred revenues is from circulation subscriptions paid in advance of the service
provided, which represents future delivery of publications (the performance obligation) to subscription customers. The
Company expects to recognize the revenue related to unsatisfied performance obligations over the next one to twelve months in
accordance with the terms of the subscriptions.
The Company's payment terms vary by the type and location of the customer and the products or services offered. The
period between invoicing and when payment is due is not significant. For certain products or services and customer types, the
Company requires payment before the products or services are delivered to the customer. The majority of our subscription
customers are billed and required to pay on monthly terms.
Advertising costs
Advertising costs are expensed in the period incurred. The Company incurred total advertising expenses for the years
ended December 31, 2023, 2022, and 2021 of $41.9 million, $56.8 million, and $45.3 million, respectively.
Pension and postretirement liabilities
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
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recognized over the estimated average future service period. We also recognize liabilities associated with the withdrawal from
multiemployer pension plans. See Note 9 — Pensions and other postretirement benefit plans for further details.
Share-based compensation
Share-based payments to employees and members of the Board of Directors, including grants of stock options and
restricted stock, are recognized in the Consolidated financial statements over the service period (generally the vesting period)
based on fair values measured on grant dates, less forfeitures. The Company accounts for forfeitures as they occur.
Self-insurance liability accruals
The Company maintains self-insured medical and workers' compensation programs. The Company purchases stop loss
coverage from third parties, which limits our exposure to large claims. The Company records a liability for healthcare and
workers' compensation costs during the period in which they occur, including an estimate of incurred but not reported claims.
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. at our Newsquest
segment and international operations at our DMS segment, were $234.0 million and $39.5 million, respectively, for the year
ended December 31, 2023. Our long-lived assets in foreign countries, at our Newsquest segment and international operations at
our DMS segment were $130.8 million and $7.5 million, respectively, as of December 31, 2023.
Leases
We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease assets, Other
current liabilities, and Long-term operating lease liabilities on our Consolidated balance sheets. Operating lease right-of-use
("ROU") assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments
over the lease term at commencement date. The rates implicit within the Company's leases are generally not determinable;
therefore, the Company uses judgment to determine the incremental borrowing rate used to calculate the present value of lease
payments. The incremental borrowing rate is determined using our credit rating and information available related to similar
terms and payments as of the commencement date. ROU assets are assessed for impairment in accordance with the Company's
accounting policy for long-lived assets.
Our lease terms include options to extend or terminate. The period which is subject to an option to extend the lease is
included in the lease term if it is reasonably certain that the option will be exercised. The period which is subject to an option to
terminate the lease is included if it is reasonably certain that the option will not be exercised. Lease expense for minimum lease
payments is recognized on a straight-line basis over the lease term.
For all material classes of leased assets, we do not separate lease components from non-lease components, and account for
both components as a single lease component. For certain equipment leases, we apply a portfolio approach to account for the
operating lease ROU assets and liabilities.
Accounts payable and accrued liabilities
A breakout of Accounts payable and accrued liabilities is presented below:
In thousands
Accounts payable
Compensation
Taxes (primarily property, sales, and payroll taxes)
Benefits
Interest
Other
December 31,
2023
2022
$
142,215 $
189,094
82,160
9,990
19,422
5,617
34,040
87,937
11,940
21,942
6,162
34,773
Accounts payable and accrued liabilities
$
293,444 $
351,848
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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. Legal costs expected to be incurred in connection with
loss contingencies are expensed as incurred.
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 operations and comprehensive income (loss) and
are classified as Accumulated other comprehensive loss in the Consolidated balance sheets and Consolidated statements of
equity.
Recent accounting pronouncements adopted
Reference rate reform
In March 2020, the Financial Accounting Standards Board (the "FASB") issued guidance, ASU 2020-04, that provides
optional expedients and exceptions for contracts, hedging relationships, and other transactions that reference the London Inter-
bank Offered Rate ("LIBOR"). The guidance in ASU 2020-04 (as amended by ASU 2022-06 in December 2022) is optional
and may be elected over time as reference rate reform activities occur through December 31, 2024. During the quarter ended
March 31, 2022, the Company applied the optional expedient for contract modifications to the amendment of its five-year
senior secured term loan facility in an original aggregate principal amount of $516.0 million (the "Senior Secured Term Loan")
with Citibank N.A., as collateral agent and administrative agent for the lenders. The adoption of this guidance did not have a
material impact on the Consolidated financial statements.
Accounting for convertible instruments and contracts in an entity's own equity
In August 2020, the FASB issued guidance, ASU 2020-06, that simplifies the accounting for convertible instruments by
reducing the number of accounting models for convertible debt instruments and convertible preferred stock. In addition to
eliminating certain accounting models, the guidance amends the disclosures for convertible instruments and earnings-per-share
guidance. It also amends the guidance for the derivatives scope exception for contracts in an entity's own equity to reduce form-
over-substance-based accounting conclusions. The adoption of this guidance, effective January 1, 2022, did not have a material
impact on the accounting for the Company's $497.1 million in aggregate principal amount of 6.0% Senior Secured Convertible
Notes due 2027 issued by the Company on November 17, 2020 (the "2027 Notes"), or on the Consolidated financial statements.
Accounting for contract assets and contract liabilities from contracts with customers in a business combination
In October 2021, the FASB issued guidance, ASU 2021-08, that requires an acquirer to recognize and measure certain
contract assets and contract liabilities in a business combination in accordance with ASC 606, "Revenue from Contracts with
Customers," rather than at fair value on the acquisition date as required under current U.S. GAAP. This guidance is effective for
fiscal years beginning after December 15, 2022, with early adoption permitted, including interim periods within those fiscal
years. The early adoption of this guidance effective January 1, 2022 did not have a material impact on the Consolidated
financial statements.
Disclosures by business entities about government assistance
In November 2021, the FASB issued guidance, ASU 2021-10, that requires annual disclosures for transactions with a
government that are accounted for by applying a grant or contribution accounting model by analogy, including: (i) information
about the nature of the transactions and related accounting policy used to account for the transactions; (ii) the line items on the
Consolidated balance sheets and Consolidated statements of operations and comprehensive income (loss) affected by these
transactions, including amounts applicable to each line; and (iii) significant terms and conditions of the transactions, including
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commitments and contingencies. The early adoption of this guidance effective January 1, 2022, did not have a material impact
on the Consolidated financial statements.
Recent accounting pronouncements not yet adopted
Disclosure improvements
In October 2023, the FASB issued guidance, ASU 2023-06, that incorporates several disclosure and presentation
requirements into the FASB’s Accounting Standards Codification (the "Codification") currently residing in Securities and
Exchange Commission ("SEC") Regulation S-X and Regulation S-K. As the Company is currently subject to these SEC
requirements, ASU 2023-06 is not expected to have a material impact on the Consolidated financial statements. The effective
date for each amendment in the Codification will be the date on which the SEC's removal of the related disclosure from
Regulation S-X or Regulation S-K becomes effective. If, by June 30, 2027, the SEC has not removed the existing disclosure
requirements from Regulation S-X or Regulation S-K, the pending disclosure requirements will be removed from the
Codification and will not become effective for any entity. ASU 2023-06 will be applied prospectively.
In November 2023, the FASB issued guidance, ASU 2023-07, which will improve reportable segment disclosure
requirements primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 applies to all public
entities that are required to report segment information in accordance with ASC 280, "Segment Reporting." The Company will
be required to report these enhanced segment disclosures starting in annual periods beginning after December 15, 2023 and
requires retrospective application to all prior periods presented in the financial statements. The Company does not expect the
adoption of this guidance will have a material impact on the Consolidated financial statements.
In November 2023, the FASB issued guidance, ASU 2023-09, which enhances annual income tax disclosures. ASU
2023-09 requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on
income taxes paid. ASU 2023-09 will be effective for annual periods beginning after December 15, 2024. The Company is
currently evaluating the provisions of the updated guidance and assessing the impact on the Consolidated financial statements.
NOTE 3 — Revenues
Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that
reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
The Company's Consolidated statements of operations and comprehensive income (loss) present revenues disaggregated by
revenue type. Sales taxes and other usage-based taxes are excluded from revenues.
The following tables present our revenues disaggregated by segment and revenue type:
94
Year ended December 31, 2023
Domestic
Gannett
Media
Newsquest
Digital
Marketing
Solutions
Corporate
and other
Intersegment
Eliminations Consolidated
$
292,211 $
37,745 $
— $
— $
— $
329,956
Table of Contents
In thousands
Local and national print
Classified print
Print advertising
Digital media
Digital marketing services
Digital classified
Digital advertising and marketing services
209,490
501,701
238,706
140,589
44,543
423,838
37,099
74,844
41,890
8,920
8,472
—
—
—
477,909
—
59,282
477,909
Advertising and marketing services
925,539
134,126
477,909
Print circulation
Digital-only subscription
Circulation
Other(a)(b)
704,158
150,384
854,542
68,042
5,237
73,279
315,772
26,575
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,268
—
—
—
246,589
576,545
280,596
(150,460)
476,958
—
53,015
(150,460)
810,569
(150,460)
1,387,114
—
—
—
—
772,200
155,621
927,821
348,615
(150,460) $ 2,663,550
Total revenues
(a) For the year ended December 31, 2023, included Other Digital revenues of $67.5 million, $10.4 million, and $6.3 million at the Domestic Gannett Media and
$ 2,095,853 $
233,980 $
477,909 $
6,268 $
Newsquest segments and the Corporate and other category, respectively.
(b) At the Domestic Gannett Media segment, Other Digital revenues include digital content syndication and affiliate revenues, at the Newsquest segment, Other
Digital revenues include digital production revenues, and at the Corporate and other category, Other Digital revenues include licensing revenues.
Year ended December 31, 2022
Domestic
Gannett
Media
Newsquest
Digital
Marketing
Solutions
Corporate
and other
Intersegment
Eliminations Consolidated
$
363,772 $
40,526 $
— $
— $
— $
404,298
In thousands
Local and national print
Classified print
Print advertising
Digital media
Digital marketing services
Digital classified
Digital advertising and marketing services
230,969
594,741
260,417
133,219
46,039
439,675
35,615
76,141
39,358
9,263
11,532
60,153
—
—
—
468,883
—
468,883
Advertising and marketing services
1,034,416
136,294
468,883
Print circulation
Digital-only subscription
Circulation
Other(a)(b)
884,854
127,671
1,012,525
67,165
4,947
72,112
332,865
26,224
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,440
—
—
—
266,584
670,882
299,775
(143,456)
467,909
—
57,571
(143,456)
825,255
(143,456)
1,496,137
—
—
—
—
952,019
132,618
1,084,637
364,529
(143,456) $ 2,945,303
Total revenues
(a) For the year ended December 31, 2022, included Other Digital revenues of $65.8 million, $9.5 million, and $5.4 million at the Domestic Gannett Media and
$ 2,379,806 $ 234,630 $
468,883 $
5,440 $
Newsquest segments and the Corporate and other category, respectively.
(b) At the Domestic Gannett Media segment, Other Digital revenues include digital content syndication and affiliate revenues, at the Newsquest segment, Other
Digital revenues include digital production revenues, and at the Corporate and other category, Other Digital revenues include licensing revenues.
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In thousands
Local and national print
Classified print
Print advertising
Digital media
Digital marketing services
Digital classified
Digital advertising and marketing services
Year ended December 31, 2021
Domestic
Gannett
Media
Newsquest
Digital
Marketing
Solutions
Corporate
and other
Intersegment
Eliminations Consolidated
$
469,211 $
32,803 $
— $
— $
— $
502,014
259,081
728,292
324,843
125,861
40,245
490,949
31,191
63,994
36,445
5,872
11,651
53,968
—
—
409
440,985
—
—
—
1,452
379
55
—
—
—
290,272
792,286
363,149
(129,322)
443,775
—
51,951
441,394
1,886
(129,322)
858,875
Advertising and marketing services
1,219,241
117,962
441,394
1,886
(129,322)
1,651,161
Print circulation
Digital-only subscription
Circulation
Other(a)(b)
1,083,760
95,340
1,179,100
65,421
5,148
70,569
—
—
—
5
—
5
279,776
20,087
905
6,480
—
—
—
—
1,149,186
100,488
1,249,674
307,248
Total revenues
(a) For the year ended December 31, 2021, included Other Digital revenues of $57.4 million, $7.0 million, $0.9 million, and $3.3 million at the Domestic
$ 2,678,117 $
208,618 $
442,299 $
(129,322) $ 3,208,083
8,371 $
Gannett Media, Newsquest and DMS segments and the Corporate and other category, respectively.
(b) At the Domestic Gannett Media segment, Other Digital revenues include digital content syndication and affiliate revenues, at the Newsquest segment, Other
Digital revenues include digital production revenues, and at DMS segment and the Corporate and other category, Other Digital revenues include licensing
revenues.
Revenues generated from international operations comprised 10.3%, 9.3%, and 7.7% of total revenues for the years ended
December 31, 2023, 2022, and 2021, respectively.
The following table presents the change in the deferred revenues balance by type of revenue:
In thousands
Beginning balance
Acquisition
Year ended December 31, 2023
Year ended December 31, 2022
Advertising,
marketing
services and
other
Circulation
Total
Advertising,
marketing
services and
other
Circulation
Total
$
46,327 $
107,321 $
153,648 $
60,665 $
124,173 $
184,838
—
—
—
—
2,388
2,388
Cash receipts, net of refunds
293,079
804,620
1,097,699
273,308
939,473
1,212,781
Revenue recognized
Ending balance
NOTE 4 — Leases
(305,443)
(825,402)
(1,130,845)
(287,646)
(958,713)
(1,246,359)
$
33,963 $
86,539 $
120,502 $
46,327 $
107,321 $
153,648
We lease certain real estate, vehicles, and equipment. Our leases have remaining lease terms of one to 13 years, some of
which may include options to extend the leases, and some of which may include options to terminate the leases. The exercise of
lease renewal options is at our sole discretion. The depreciable lives of assets and leasehold improvements are limited by the
expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise.
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The components of lease expense are as follows:
In thousands
Operating lease cost (a)
Short-term lease cost (b)
Variable lease cost
Year ended December 31,
2022
2021
2023
$
64,845 $
900
13,200
73,103 $
929
13,002
80,213
886
11,464
92,563
Net lease cost
(a) Includes sublease income of $9.1 million, $7.7 million, and $6.5 million for the years ended December 31, 2023, 2022, and 2021, respectively.
(b) Excludes expenses relating to leases with a lease term of one month or less.
78,945 $
87,034 $
$
In 2023, the Company sold two properties in Michigan and Arizona for a total of $60.5 million, which resulted in a net gain
of $39.3 million. Contemporaneously with the closing of the sales, the Company entered into leases pursuant to which we
leased back the properties for cumulative annual rent of $39.9 million, subject to annual escalations. The leases are accounted
for as operating leases.
Supplemental information related to leases are as follows:
In thousands, except lease term and discount rate
Year ended December 31,
2022
2021
2023
Cash paid for amounts included in the measurement of operating lease liabilities
$
76,338
$
79,659
$
Right-of-use assets obtained in exchange for operating lease obligations
(Gain) loss on sale and leaseback transactions, net
31,501
(40,221)
15,272
(12,249)
Weighted-average remaining lease term (in years)
Weighted-average discount rate
6.4
13.0 %
6.8
12.6 %
Future minimum lease payments under non-cancellable leases are as follows:
81,380
38,137
1,938
7.3
12.8 %
In thousands
2024
2025
2026
2027
2028
Thereafter
Total future minimum lease payments
Less: Imputed interest
Total
NOTE 5 — Accounts receivable, net
Year ended
December 31,
72,031
61,421
49,531
42,269
37,825
112,133
375,210
125,576
249,634
$
$
The Company performs its evaluation of the collectability of trade receivables based on customer category. For example,
trade receivables from individual subscribers to our publications are evaluated separately from trade receivables related to
advertising customers. For advertising trade receivables, the Company applies a "black motor formula" methodology as the
baseline to calculate the allowance for doubtful accounts. The reserve percentage is calculated as a ratio of total net bad debts
(less write-offs and recoveries) for the prior three-year period to total outstanding trade accounts receivable for the same three-
year period. The calculated reserve percentage by customer category is applied to the consolidated gross advertising receivable
balance, irrespective of aging. In addition, each category has specific reserves for at risk accounts that vary based on the nature
of the underlying trade receivables. Due to the short-term nature of our circulation receivables, the Company reserves all
receivables aged over 90 days.
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The following table presents changes in the allowance for doubtful accounts:
In thousands
Beginning balance
Current period provision
Write-offs charged against the allowance
Recoveries of amounts previously written-off
Other
Ending balance
Year ended December 31,
2023
2022
$
$
16,697 $
12,316
(17,143)
4,325
143
16,338 $
16,470
9,498
(14,333)
4,567
495
16,697
The calculation of the allowance considers current economic, industry and customer-specific conditions relative to their
respective operating environments in the incremental allowances recorded related to high-risk accounts, bankruptcies,
receivables in repayment plan and other aging specific reserves. As a result of this analysis, the Company adjusts specific
reserves and the amount of allowable credit as appropriate. The collectability of trade receivables related to advertising,
marketing services and other customers depends on a variety of factors, including trends in local, regional, or national economic
conditions that affect our customers' ability to pay. The advertisers in our newspapers and other publications and related
websites are primarily retail businesses that can be significantly affected by regional or national economic downturns and other
developments that may impact our ability to collect on the related receivables. Similarly, while circulation revenues related to
individual subscribers are primarily prepaid, changes in economic conditions may also affect our ability to collect on amounts
owed from single copy circulation customers.
For the years ended December 31, 2023 and 2022, the Company recorded $12.3 million and $9.5 million in bad debt
expense, respectively, which is included in Selling, general and administrative expenses on the Consolidated statements of
operations and comprehensive income (loss).
NOTE 6 — Goodwill and intangible assets
Goodwill and intangible assets consisted of the following:
In thousands
Finite-lived intangible assets:
Advertiser relationships
Other customer relationships
Subscriber relationships
Other intangible assets
Sub-total
Indefinite-lived intangible assets:
Mastheads
Total intangible assets
Goodwill
December 31, 2023
December 31, 2022
Gross
carrying
amount
Accumulated
amortization
Net
carrying
amount
Gross
carrying
amount
Accumulated
amortization
Net
carrying
amount
$
446,609 $
236,168 $
210,441 $
445,775 $
192,032 $
253,743
101,819
251,099
68,780
56,601
155,528
62,536
45,218
95,571
6,244
102,224
251,083
68,780
45,811
126,899
55,932
56,413
124,184
12,848
$
868,307 $
510,833 $
357,474 $
867,862 $
420,674 $
447,188
166,876
524,350
533,876
$
$
166,170
613,358
533,166
$
$
As of December 31, 2023, the weighted average amortization periods for amortizable intangible assets were 11.1 years for
advertiser relationships, 9.7 years for other customer relationships, 10.3 years for subscriber relationships, and 3.9 years for
other intangible assets. The weighted average amortization period in total for all amortizable intangible assets is 10.1 years.
For the years ended December 31, 2023, 2022, and 2021, amortization expense was $90.0 million, $95.6 million, and
$103.1 million, respectively.
As of December 31, 2023, the estimated future amortization expense for each of the five fiscal years was as follows: 2024 -
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$89.2 million; 2025 - $82.0 million; 2026 - $63.9 million; 2027 - $62.3 million; and 2028 and thereafter - $60.1 million.
Changes in the carrying amount of Goodwill by segment are as follows:
In thousands
Balance at December 31, 2021
Acquisitions
Divestitures
Foreign exchange
Balance at December 31, 2022
Acquisitions
Divestitures
Foreign exchange
Balance at December 31, 2023
Domestic Gannett
Media
Newsquest
Digital Marketing
Solutions
Total
$
$
$
401,253 $
14,985 $
117,471 $
533,709
990
(1,147)
10
401,106 $
—
(46)
(3)
1,869
—
(2,265)
14,589 $
30
(82)
811
—
—
—
2,859
(1,147)
(2,255)
117,471 $
533,166
—
—
—
30
(128)
808
401,057 $
15,348 $
117,471 $
533,876
As of both December 31, 2023 and 2022, the carrying amount of goodwill reflected accumulated impairment losses of
$340.8 million, $70.5 million and $44.1 million related to impairments at the Domestic Gannett Media, Newsquest and Digital
Marketing Solutions segments, respectively.
Annual impairment assessment
The Company performed its goodwill and indefinite-lived intangible impairment assessment in the fourth quarter of 2023
with the assistance of third-party valuation specialists. Determining fair value requires the exercise of significant judgments,
including judgments about appropriate discount rates, long-term growth rates, company earnings multiples and relevant
comparable transactions, as applicable, and the amount and timing of expected future cash flows. The cash flows employed in
the analysis are based on the Company's internal forecasts, which considered the current and expected future economic and
market conditions for each reporting unit. The long-term growth rates are dependent on various factors and could be adversely
impacted by a sustained decrease in overall market growth rates, the competitive environment, relative currency exchange rates
and a sustained increase in inflation, all of which the Company considered in determining the long-term growth rates used in
the 2023 analysis, which ranged from 0% to 3.0%. The discount rates for each reporting unit are determined based on the
inherent risks of each reporting unit's underlying operations and may be impacted by adverse changes in the macroeconomic
environment and volatility in the equity and debt markets. The Company considered these factors in determining the discount
rates used in the 2023 analysis, which ranged from 17.0% to 22.5%.
For goodwill, the Company determined the fair value of each reporting unit using a combination of a discounted cash flow
analysis and a market-based approach. During the fourth quarter of 2023, the Company compared the fair value of each
reporting unit to its carrying amount, which resulted in the fair value of all the reporting units being in excess of their carrying
values.
For mastheads, the Company applied a "relief from royalty" approach, a discounted cash flow model, reflecting current
assumptions, to determine the fair value of indefinite-lived intangible assets. During the fourth quarter of 2023, the Company
compared the fair value of each indefinite-lived intangible asset to its carrying amount, which resulted in the fair value of each
indefinite-lived intangible asset being in excess of its carrying value.
In addition to the annual impairment test, the Company is required to regularly assess whether a triggering event has
occurred under ASC 360, "Property, Plant and Equipment ("ASC 360"), which would require interim impairment testing. As of
December 31, 2023, the Company performed a review of potential indicators for its long-lived asset groups under ASC 360 and
it was determined that no indicators of impairment were present.
During 2022 and 2021, there were no impairments of goodwill and indefinite-lived intangible assets.
While the Company believes its judgments represent reasonably possible outcomes based on available facts and
circumstances, adverse changes to the assumptions, including those related to macroeconomic factors, comparable public
company trading values and prevailing conditions in the capital markets, could lead to future declines in the fair value of a
reporting unit. The Company continually evaluates whether current factors or indicators, such as prevailing conditions in the
business environment, capital markets or the economy generally, and actual or projected operating results, require the
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performance of an interim impairment assessment of goodwill, as well as other long-lived assets. For example, any significant
shortfall, now or in the future, in advertising revenues or subscribers and/or consumer acceptance of our products could lead to
a downward revision in the fair value of certain reporting units.
NOTE 7 — Integration and reorganization costs and asset impairments
Over the past several years, the Company has engaged in a series of individual restructuring programs, designed primarily
to right-size the Company's employee base, consolidate facilities and improve operations, including those of recently acquired
entities. These initiatives impact all the Company's operations and can be influenced by the terms of union contracts. Costs
related to these programs, which primarily include severance, facility consolidation and other restructuring-related expenses, are
accrued when probable and reasonably estimable or at the time of program announcement.
Severance-related expenses
The Company recorded severance-related expenses by segment as follows:
In thousands
Domestic Gannett Media
Newsquest
Digital Marketing Solutions
Corporate and other
Total
Year ended December 31,
2023
2022
2021
9,935
1,762
756
6,064
40,654
4,216
434
12,310
$
18,517 $
57,614 $
13,576
953
321
1,621
16,471
A roll-forward of the accrued severance and related expenses included in Accounts payable and accrued liabilities on the
Consolidated balance sheets for the years ended December 31, 2023 and 2022 is as follows:
In thousands
Balance at December 31, 2021
Restructuring provision included in integration and reorganization costs
Cash payments
Balance at December 31, 2022
Restructuring provision included in integration and reorganization costs
Cash payments
Balance at December 31, 2023
Other restructuring-related expenses
Severance and
related expenses
$
$
12,558
57,614
(40,399)
29,773
18,517
(41,362)
6,928
Other restructuring-related expenses represent costs for consolidating operations, systems implementation, outsourcing of
corporate functions and facility consolidations. The Company recorded Other restructuring-related costs by segment as follows:
In thousands
Domestic Gannett Media(a)
Newsquest
Digital Marketing Solutions
Corporate and other
Total
Year ended December 31,
2023
2022
2021
(4,353)
14,921
1
28
209
674
10,275
14,556
$
5,951 $
30,360 $
1,145
286
1,389
29,993
32,813
(a) For the year ended December 31, 2023, Other restructuring-related costs at the Domestic Gannett Media segment reflected the reversal of withdrawal
liabilities related to multiemployer pension plans based on settlement of the withdrawal liability. For the year ended December 31, 2022, Other restructuring-
related costs at the Domestic Gannett Media segment reflected a withdrawal liability which was expensed as a result of ceasing contributions to a
multiemployer pension plan, as well as facilities consolidation expenses associated with exiting a lease.
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Accelerated depreciation
The Company incurred accelerated depreciation, a component of Depreciation and amortization expense in the
Consolidated statements of operations and comprehensive income (loss) of $6.7 million, $12.5 million, and $15.3 million for
the years ended December 31, 2023, 2022, and 2021, respectively, related to the shortened useful life of assets due to the
closing of production facilities and sale of property, primarily at the Domestic Gannett Media segment.
NOTE 8 — Debt
The Company's debt consisted of the following:
In millions
Senior Secured Term Loan $
2026 Senior Notes
2027 Notes
2024 Notes
Total debt
Less: Current portion of
long-term debt
$
$
December 31, 2023
Unamortized
original issue
discount
Unamortized
deferred
financing
costs
Principal
balance
Carrying
value
Principal
balance
December 31, 2022
Unamortized
original issue
discount
Unamortized
deferred
financing
costs
350.4 $
(5.2) $
(1.1) $
344.1 $
438.4 $
(8.9) $
(1.9) $
291.6
485.3
3.3
(5.8)
(67.8)
—
(4.6)
(1.5)
—
281.2
416.0
3.3
345.2
485.3
3.3
(9.4)
(81.2)
—
(7.3)
(1.7)
—
Carrying
value
427.6
328.5
402.4
3.3
1,130.6 $
(78.8) $
(7.2) $
1,044.6 $
1,272.2 $
(99.5) $
(10.9) $
1,161.8
(63.8) $
— $
— $
(63.8) $
(60.5) $
— $
— $
(60.5)
Non-current portion of
long-term debt
$
1,066.8 $
(78.8) $
(7.2) $
980.8 $
1,211.7 $
(99.5) $
(10.9) $
1,101.3
Senior Secured Term Loan
On October 15, 2021, Gannett Holdings LLC ("Gannett Holdings"), a wholly-owned subsidiary of the Company, entered
into the Senior Secured Term Loan in an original aggregate principal amount of $516.0 million with Citibank N.A., as collateral
agent and administrative agent for the lenders. On January 31, 2022, Gannett Holdings entered into an amendment (the "Term
Loan Amendment") to the Senior Secured Term Loan to provide for new incremental senior secured term loans (the
"Incremental Term Loans") in an aggregate principal amount of $50 million. The Incremental Term Loans have substantially
identical terms as the Senior Secured Term Loan and are treated as a single tranche with the Senior Secured Term Loan. The
Term Loan Amendment also amended the Senior Secured Term Loan to transition the interest rate base from the London Inter-
bank Offered Rate ("LIBOR") to the Adjusted Term Secured Overnight Financing Rate ("Adjusted Term SOFR"). Effective as
of March 21, 2022 and April 8, 2022, Gannett Holdings entered into two separate amendments to the Senior Secured Term
Loan to provide for incremental senior secured term loans totaling an aggregate principal amount of $30.0 million (collectively,
the "Exchanged Term Loans"). The Exchanged Term Loans have substantially identical terms as the Senior Secured Term Loan
and Incremental Term Loans and are treated as a single tranche with the Senior Secured Term Loan and the Incremental Term
Loans.
The Senior Secured Term Loan bears interest at a per annum rate equal to the Adjusted Term SOFR (which shall not be
less than 0.50% per annum) plus a margin equal to 5.00% or an alternate base rate (which shall not be less than 1.50% per
annum) plus a margin equal to 4.00%. Loans under the Senior Secured Term Loan may be prepaid, at the option of Gannett
Holdings, at any time without premium. In addition, we are required to repay the Senior Secured Term Loan from time to time
with (i) the proceeds of non-ordinary course asset sales and casualty and condemnation events, (ii) the proceeds of indebtedness
not permitted under the Senior Secured Term Loan, and (iii) the aggregate amount of cash and cash equivalents on hand at the
Company and its restricted subsidiaries in excess of $100 million at the end of each fiscal year of the Company. Subsequent to
the amendment effective as of April 8, 2022, the Senior Secured Term Loan is amortized at $15.1 million per quarter (or, if the
ratio of debt secured on an equal basis with the Senior Secured Term Loan less unrestricted cash of the Company and its
restricted subsidiaries to Consolidated EBITDA (as such terms are defined in the Senior Secured Term Loan) (such ratio, the
"First Lien Net Leverage Ratio"), for the most recently ended period of four consecutive fiscal quarters is equal to or less than
1.20 to 1.00, $7.6 million per quarter). All obligations under the Senior Secured Term Loan are secured by all or substantially
all of the assets of the Company and the wholly-owned domestic subsidiaries of the Company (the "Senior Secured Term Loan
Guarantors"). The obligations of Gannett Holdings under the Senior Secured Term Loan are guaranteed on a senior secured
basis by the Company and the Senior Secured Term Loan Guarantors.
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The Senior Secured Term Loan contains usual and customary covenants for credit facilities of this type, including a
requirement to have minimum unrestricted cash of $30 million as of the last day of each fiscal quarter, and restricts, among
other things, our ability to incur debt, grant liens, sell assets, make investments and pay dividends, in each case with customary
exceptions, including an exception that permits dividends and repurchases of outstanding junior debt or equity in (i) an amount
of up to $25 million per fiscal quarter if the First Lien Net Leverage Ratio for such fiscal quarter is equal to or less than 2.00 to
1.00, (ii) an amount of up to $50 million per fiscal quarter if the First Lien Net Leverage Ratio for such fiscal quarter is equal to
or less than 1.50 to 1.00, and (iii) an unlimited amount if First Lien Net Leverage Ratio for such fiscal quarter is equal to or less
than 1.00 to 1.00. As of December 31, 2023, the Company was in compliance with all of the covenants and obligations under
the Senior Secured Term Loan.
As of December 31, 2023 and 2022, the Senior Secured Term Loan was recorded at carrying value, which approximated
fair value, in the Consolidated balance sheets and was classified as Level 2.
For the years ended December 31, 2023 and 2022, the Company recognized interest expense of $40.0 million and $33.5
million, respectively, and paid cash interest of $40.0 million and $33.3 million, respectively. For the years ended December 31,
2023 and 2022, the Company recognized amortization of original issue discount of $2.8 million and $3.5 million, respectively,
and amortization of deferred financing costs of $0.6 million and $0.7 million, respectively. Additionally, during the years ended
December 31, 2023 and 2022, the Company recognized a loss on early extinguishment of debt of $1.1 million and $2.2 million,
respectively, related to the write-off of original issue discount and deferred financing costs as a result of early prepayments on
the Senior Secured Term Loan.
For the year ended December 31, 2023, the Company made $88.0 million of prepayments, including quarterly amortization
payments, on the Senior Secured Term Loan, which were classified as financing activities in the Consolidated statements of
cash flows. During 2023, the Company received waivers from certain lenders of the Senior Secured Term Loan that reduced the
scheduled quarterly amortization payments payable to those lenders by $25.1 million for the year ended December 31, 2023,
and which was the amount used by the Company to repurchase a portion of its 2026 Senior Notes (defined below). As of
December 31, 2023, the effective interest rate for the Senior Secured Term Loan was 11.3%.
Senior Secured Notes due 2026
On October 15, 2021, Gannett Holdings completed a private offering of $400 million aggregate principal amount of 6.00%
first lien notes due November 1, 2026 (the "2026 Senior Notes"). The 2026 Senior Notes were issued pursuant to an indenture,
dated October 15, 2021 (the "2026 Senior Notes Indenture") among Gannett Holdings, the Company, the guarantors from time
to time party thereto (the "2026 Senior Notes Guarantors"), U.S. Bank National Association, as trustee, and U.S. Bank National
Association, as collateral agent, registrar, paying agent and authenticating agent.
During 2023, the Company entered into privately negotiated agreements with certain holders of our 2026 Senior Notes, and
for the year ended December 31, 2023, repurchased $53.6 million of principal of our outstanding 2026 Senior Notes at a
discount to par value. In connection with the repurchase of our 2026 Senior Notes during 2023, the Company received waivers
from certain lenders of the Senior Secured Term Loan which reduced the scheduled quarterly amortization payments payable to
those lenders by $25.1 million for the year ended December 31, 2023. As a result of these transactions, for the year ended
December 31, 2023, the Company recognized a gain on the early extinguishment of debt of approximately $5.6 million, which
included the write-off of unamortized original issue discount and deferred financing costs.
During 2022, the Company entered into privately negotiated agreements with certain holders of our 2026 Senior Notes, and
for the year ended December 31, 2022, repurchased $54.8 million of principal of our outstanding 2026 Senior Notes at a
discount to par value. In connection with the repurchases of our 2026 Senior Notes during 2022, the Company exchanged an
aggregate principal amount equal to $30.0 million of the 2026 Senior Notes for $30.0 million of the Exchanged Term Loans. As
a result of these transactions, for the year ended December 31, 2022, the Company recognized a gain on the early
extinguishment of debt of approximately $2.6 million, which included the write-off of unamortized original issue discount and
deferred financing costs.
Interest on the 2026 Senior Notes is payable semi-annually in arrears, beginning on May 1, 2022. The 2026 Senior Notes
mature on November 1, 2026, unless redeemed or repurchased earlier pursuant to the 2026 Senior Notes Indenture. The 2026
Senior Notes may be redeemed at the option of Gannett Holdings, in whole or in part, at any time and from time to time after
November 1, 2023, at the redemption prices set forth in the 2026 Senior Notes Indenture. If certain changes of control with
respect to Gannett Holdings or the Company occur, Gannett Holdings must offer to purchase the 2026 Senior Notes at a
purchase price in cash equal to 101% of the principal amount thereof on the date of purchase, plus accrued and unpaid interest
to, but excluding, the date of purchase.
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The 2026 Senior Notes are unconditionally guaranteed, jointly and severally, on a senior secured basis by the 2026 Senior
Notes Guarantors. The 2026 Senior Notes and such guarantees are secured on a first-priority basis by the collateral, consisting
of substantially all of the assets of Gannett Holdings and the 2026 Senior Notes Guarantors, subject to certain intercreditor
arrangements.
The 2026 Senior Notes Indenture limits the Company and its restricted subsidiaries' ability to, among other things, make
investments, loans, advances, guarantees and acquisitions; incur or guarantee additional debt and issue certain disqualified
equity interests and preferred stock; make certain restricted payments, including a limit on dividends on equity securities or
payments to redeem, repurchase or retire equity securities or other indebtedness; dispose of assets; create liens on assets to
secure debt; engage in transactions with affiliates; enter into certain restrictive agreements; and consolidate, merge, sell or
otherwise dispose of all or substantially all of their or the 2026 Senior Notes Guarantor's assets. These covenants are subject to
a number of limitations and exceptions. The 2026 Senior Notes Indenture also contains customary events of default.
As of December 31, 2023 and 2022, the 2026 Senior Notes were recorded at carrying value in the Consolidated balance
sheets. As of December 31, 2023, the carrying value of the 2026 Senior Notes did not approximate fair value. The 2026 Senior
Notes were classified as Level 2, and based on unadjusted quoted prices in the active market obtained from third-party pricing
services, the Company determined that the estimated fair value of the 2026 Senior Notes was $256.6 million as of
December 31, 2023 and was primarily affected by fluctuations in market interest rates.
The unamortized original issue discount and deferred financing costs will be amortized over the remaining contractual life
of the 2026 Senior Notes using the effective interest method. For the years ended December 31, 2023 and 2022, the Company
recognized interest expense of $19.5 million and $22.3 million, respectively, and paid cash interest of $20.1 million and $23.9
million, respectively. For the years ended December 31, 2023 and 2022, the Company recognized amortization of original issue
discount of $2.3 million and $2.7 million, respectively, and amortization of deferred financing costs of $1.8 million and $2.1
million, respectively. The effective interest rate on the 2026 Senior Notes was 7.3% as of December 31, 2023.
Senior Secured Convertible Notes due 2027
The 2027 Notes were issued pursuant to an Indenture dated as of November 17, 2020, as amended by the First
Supplemental Indenture dated as of December 21, 2020 and the Second Supplemental Indenture dated as of February 9, 2021
(collectively, the "2027 Notes Indenture"), between the Company and U.S. Bank National Association, as trustee.
In connection with the issuance of the 2027 Notes, the Company entered into an Investor Agreement (the "Investor
Agreement") with the holders of the 2027 Notes (the "Holders") establishing certain terms and conditions concerning the rights
and restrictions on the Holders with respect to the Holders' ownership of the 2027 Notes. The Company also entered into an
amendment to the Registration Rights Agreement dated November 19, 2019, between the Company and FIG LLC.
Interest on the 2027 Notes is payable semi-annually in arrears. The 2027 Notes mature on December 1, 2027, unless earlier
repurchased or converted. The 2027 Notes may be converted at any time by the holders into cash, shares of the Company's
common stock, par value $0.01 per share (the "Common Stock") or any combination of cash and Common Stock, at the
Company's election. The initial conversion rate is 200 shares of Common Stock per $1,000 principal amount of the 2027 Notes,
which is equal to a conversion price of $5.00 per share of Common Stock (the "Conversion Price").
In November 2021, the Company entered into separate, privately negotiated agreements with certain holders of our 2027
Notes and repurchased $11.8 million in aggregate principal amount of our outstanding 2027 Notes for $15.3 million in cash,
including accrued interest. The repurchase was treated as an extinguishment of a portion of the 2027 Notes and as a result, for
the year ended December 31, 2021, the Company recognized a loss on extinguishment of $0.8 million and a write-off of
unamortized original issue discount of $2.3 million and an immaterial write-off of unamortized deferred financing costs. The
repurchase of the 2027 Notes resulted in a $4.2 million reduction in Additional paid-in capital, net of tax, in the Consolidated
balance sheets. The remaining 2027 Notes are convertible into 97.1 million shares of Common Stock, based on a conversion
price of $5.00 per share.
The conversion rate is subject to customary adjustment provisions as provided in the 2027 Notes Indenture. In addition, the
conversion rate will be subject to adjustment in the event of any issuance or sale of Common Stock (or securities convertible
into Common Stock) at a price equal to or less than the Conversion Price in order to ensure that following such issuance or sale,
the 2027 Notes would be convertible into approximately 42% (adjusted for repurchases and certain other events that reduce the
outstanding amount of the 2027 Notes) of the Common Stock after giving effect to such issuance or sale (assuming the initial
principal amount of the 2027 Notes remains outstanding). After giving effect to the repurchase of $11.8 million in aggregate
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principal amount of outstanding 2027 Notes during the year ended December 31, 2021, such percentage was approximately
41%.
Upon the occurrence of a "Make-Whole Fundamental Change" (as defined in the 2027 Notes Indenture), the Company will
in certain circumstances increase the conversion rate for a specified period of time. If a "Fundamental Change" (as defined in
the 2027 Notes Indenture) occurs, the Company will be required to offer to repurchase the 2027 Notes at a repurchase price of
110% of the principal amount thereof.
Holders of the 2027 Notes will have the right to put up to approximately $100 million of the 2027 Notes at par on or after
the date that is 91 days after the maturity date of the Senior Secured Term Loan.
Under the 2027 Notes Indenture, the Company can only pay cash dividends up to an agreed-upon amount, provided the
ratio of consolidated debt to EBITDA (as such terms are defined in the 2027 Notes Indenture) does not exceed a specified ratio.
In addition, the 2027 Notes Indenture provides that, at any time that the Company's Total Gross Leverage Ratio (as defined in
the 2027 Notes Indenture) exceeds 1.5 and the Company approves the declaration of a dividend, the Company must offer to
purchase a principal amount of 2027 Notes equal to the proposed amount of the dividend.
Until the four-year anniversary of the issuance date, the Company will have the right to redeem for cash up to
approximately $99.4 million of the 2027 Notes at a redemption price of 130% of the principal amount thereof, with such
amount reduced ratably by any principal amount of 2027 Notes that has been converted by the holders or redeemed or
purchased by the Company.
The 2027 Notes are guaranteed by Gannett Holdings and any subsidiaries of the Company that guarantee the Senior
Secured Term Loan. The 2027 Notes are secured by the same collateral that secures the Senior Secured Term Loan. The 2027
Notes rank as senior secured debt of the Company and are secured by a second priority lien on the same collateral package that
secured the indebtedness incurred in connection with the Senior Secured Term Loan.
The 2027 Notes Indenture includes affirmative and negative covenants, including limitations on liens, indebtedness,
dispositions, loans, advances and investors, sale and leaseback transactions, restricted payments, transactions with affiliates,
restrictions on dividends and other payment restrictions affecting restricted subsidiaries, negative pledges, and modifications to
certain agreements. The 2027 Notes Indenture also requires that the Company maintain, as of the last day of each fiscal quarter,
at least $30.0 million of Qualified Cash (as defined in the 2027 Notes Indenture). The 2027 Notes Indenture includes customary
events of default.
The 2027 Notes have two components: (i) a debt component, and (ii) an equity component. As of December 31, 2023, the
debt component of the 2027 Notes was recorded at carrying value in the Consolidated balance sheets. The carrying value of the
2027 Notes reflected the balance of the unamortized discount related to the value of the conversion feature assessed at inception
and did not approximate fair value as of December 31, 2023. The 2027 Notes were classified as Level 2, and based on
unadjusted quoted prices in the active market obtained from third-party pricing services, the Company determined that the
estimated fair value of the 2027 Notes was $395.6 million as of December 31, 2023, and was primarily affected by fluctuations
in market interest rates and the price of the Company's Common Stock.
At the Special Meeting of stockholders of the Company, held on February 26, 2021, our stockholders approved the
issuance of the maximum number of shares of Common Stock issuable upon conversion of the 2027 Notes. As a result, the
conversion option can be share-settled in full. The Company concluded that as of February 26, 2021, the conversion option
qualified for equity classification and the bifurcated derivative liability no longer needed to be accounted for as a separate
derivative on a prospective basis from the date of reassessment. As of February 26, 2021, the fair value of the conversion option
of $316.2 million was reclassified to Equity as Additional paid-in capital. Any remaining debt discount that arose at the date of
debt issuance from the original bifurcation will continue to be amortized through interest expense.
As of February 26, 2021, the date of reassessment, the estimated fair value of the derivative liability for the embedded
conversion feature was $316.2 million which was reported within Convertible debt in the Consolidated balance sheets. The
increase in the fair value of the derivative liability of $126.6 million at the date of reassessment and reclassification to Equity
was due to the increase in our stock price, partially offset by the increase in the discount rate, and was recorded in earnings for
the year ended December 31, 2021. The loss due to the revaluation of the derivative is not deductible for tax purposes. The
assumptions used to determine the fair value as of February 26, 2021 were:
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Annual volatility
Discount rate
Stock price
February 26, 2021
70.0 %
12.2 %
4.95
$
The fair value of the equity component was classified as Level 3 because it was measured at fair value using a binomial
lattice model using assumptions based on market information and historical data, and significant unobservable inputs. As of
each of December 31, 2023 and December 31, 2022, the amount of the conversion feature recorded in Additional paid-in capital
was $279.6 million.
The unamortized original issue discount and deferred financing costs will be amortized over the remaining contractual life
of the 2027 Notes. For the years ended December 31, 2023 and 2022, the Company recognized interest expense of $29.1
million and $29.1 million, respectively, and paid cash interest of $29.1 million and $29.1 million, respectively. For the years
ended December 31, 2023 and 2022, the Company recognized amortization of original issue discount of $13.4 million and
$12.1 million, respectively, and amortization of deferred financing costs of $0.3 million and $0.3 million, respectively. The
effective interest rate on the liability component of the 2027 Notes was 10.5% as of both December 31, 2023 and December 31,
2022.
For the year ended December 31, 2023, no shares were issued upon conversion, exercise, or satisfaction of the required
conditions. Refer to Note 12 — Supplemental equity and other information for details on the convertible debt's impact to
diluted earnings per share under the if-converted method.
Senior Convertible Notes due 2024
The $3.3 million principal value of the remaining 4.75% convertible senior notes due April 15, 2024 (the "2024 Notes")
outstanding is reported within the Current portion of long-term debt in the December 31, 2023 Consolidated balance sheet. As
of December 31, 2023, the effective interest rate on the 2024 Notes was 6.05%. As of December 31, 2023 and 2022, the 2024
Notes were recorded at carrying value, which approximated fair value, in the Consolidated balance sheets and were classified as
Level 2.
Future debt obligation payments
Future debt obligation payments for the year ended December 31, are as follows:
In millions
2024
2025
2026
2027
2028 and thereafter
Total debt obligations
Principal payments
$
$
63.8
60.5
521.0
485.3
—
1,130.6
NOTE 9 — Pensions and other postretirement benefit plans
We, along with our subsidiaries, sponsor various defined benefit retirement plans, including plans established under
collective bargaining agreements. Our retirement plans include the Gannett Retirement Plan (the "GR Plan"), the Newsquest
and Romanes Pension Schemes in the U.K. (the "U.K. Pension Plans"), the Newspaper Guild of Detroit Pension Plan, the
George W. Prescott Publishing Company Pension Plan (the "GWP Plan") and the Times Publishing Company Defined Benefit
Pension Plan (the "TPC Plan"). The GWP Plan was amended to freeze all future benefit accruals by December 31, 2008, except
for a select group of union employees whose benefits were frozen in 2009, the GR Plan was amended to freeze all future benefit
accruals by August 1, 2008, except for a select group of unions and the TPC Plan was frozen as of May 31, 2007, prior to the
Company's acquisition of the TPC Plan.
The Company also maintains several postretirement medical and life insurance plans which cover certain employees. We
also 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
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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.
The following table presents the change in the projected benefit obligation for the years ended December 31:
In thousands
Pension benefits
Postretirement benefits
2023
2022
2023
2022
Projected benefit obligation at beginning of period
$
1,642,180 $
3,003,324 $
47,043 $
64,038
Service cost
Interest cost
Change in prior service cost
Actuarial loss (gain)
Foreign currency translation
Benefits and expenses paid
Pension settlement
1,366
84,449
—
21,769
33,973
(125,692)
—
1,754
71,733
—
(724,223)
(107,930)
(147,640)
(454,838)
40
2,334
(3,307)
109
—
(4,500)
—
77
1,770
—
(14,092)
—
(4,750)
—
Projected benefit obligation at end of period
$
1,658,045 $
1,642,180 $
41,719 $
47,043
The following table presents the change in the fair value of plan assets for the years ended December 31, and the plans'
funded status at December 31:
In thousands
Pension benefits
Postretirement benefits
2023
2022
2023
2022
Fair value of plan assets at beginning of period
$
1,720,810 $
3,218,953 $
— $
Actual return on plan assets
Employer contributions
Pension settlement
Benefits paid
Foreign currency translation
150,371
1,441
—
(125,692)
36,968
(792,302)
18,140
(454,838)
(147,640)
(121,503)
Fair value of plan assets at end of period
$
1,783,898 $
1,720,810 $
Funded status at end of period
Unrecognized actuarial loss (gain)
Unrecognized prior service cost
Net prepaid (accrued) benefit cost
125,853
90,813
1,581
218,247
78,630
118,914
1,561
199,105
Amounts recognized in the Consolidated balance sheets at December 31, are listed below:
—
4,500
—
(4,500)
—
— $
(41,719)
(13,555)
(2,738)
(58,012)
—
—
4,750
—
(4,750)
—
—
(47,043)
(16,154)
—
(63,197)
In thousands
Other assets
Accounts payable and accrued liabilities
Pension and other postretirement benefit obligations
Pension benefits
Postretirement benefits
2023
2022
2023
2022
$
131,881 $
87,909 $
— $
282
5,746
332
8,947
4,804
36,915
16,293
—
5,280
41,763
16,154
Accumulated other comprehensive (loss) income
(92,394)
(120,475)
Net prepaid (accrued) benefit cost
$
218,247 $
199,105 $
(58,012) $
(63,197)
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Accumulated pension benefit obligations were $1.7 billion and $1.6 billion as of December 31, 2023 and 2022,
respectively. For the Funded plans, the fair value of plan assets exceeds both the projected benefit obligation and accumulated
benefit obligation. For the Underfunded plans, the projected benefit obligation and accumulated benefit obligation exceed the
fair value of plan assets. The following table presents information about funded and underfunded pension plans at December
31:
In thousands
Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets
Funded plans
Underfunded plans
2023
2022
2023
2022
$
1,602,112 $
1,584,658 $
55,933 $
1,601,306
1,733,993
1,583,793
1,672,568
55,933
49,905
57,522
57,522
48,242
Net periodic benefit cost and amounts recognized in Other comprehensive income (loss)
The combined net pension and postretirement expense (benefit) recognized in the Consolidated statements of operations
and comprehensive income (loss) was $8.0 million, $57.1 million, and $93.2 million for the years ended December 31, 2023,
2022, and 2021, respectively.
The following table presents the components of net periodic benefit cost and amounts recognized in Other comprehensive
income (loss) at December 31, 2023, 2022, and 2021:
In thousands
Components of net periodic benefit cost:
Operating expenses:
Service cost - benefits earned during the
period
Non-operating expenses:
Interest cost on benefit obligations
Expected return on plan assets
Amortization of actuarial loss (gain)
Amortization of prior service costs
Pension settlement gain
Other adjustment
Pension benefits
2022
2021
2023
Postretirement benefits
2022
2021
2023
$
1,366 $
1,754 $
2,064 $
40 $
77 $
89
84,449
(95,358)
2,185
67
—
—
(8,657)
(7,291) $
71,733
(131,295)
89
66
(727)
—
(60,134)
(58,380) $
68,139
(165,390)
152
—
—
72
(97,027)
(94,963) $
2,334
—
(2,490)
(569)
—
—
(725)
(685) $
1,770
—
(589)
—
—
—
1,181
1,258 $
1,758
—
(88)
—
—
—
1,670
1,759
Total non-operating (benefit) expense
Total (benefit) expense for retirement plans
Other changes in plan assets and benefit obligations recognized in Other
$
comprehensive income (loss):
Net actuarial (gain) loss
Amortization of net actuarial (loss) gain
Change in prior service cost
Amortization of prior service costs
Other adjustment
(Gain) loss recognized in Other comprehensive
income (loss)
$
(33,244) $ 199,374 $
(2,185)
—
(67)
6,805
(89)
—
(66)
(5,283)
(5,875) $
(152)
—
—
387
109 $
2,490
(3,307)
569
—
(14,092) $
589
—
—
—
(7,936)
88
—
—
—
$
(28,691) $ 193,936 $
(5,640) $
(139) $
(13,503) $
(7,848)
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Assumptions
The following assumptions were used in connection with the Company's actuarial valuation of its pension plans and
postretirement benefit obligations at December 31:
Weighted average discount rate
Rate of increase in future compensation levels (a)
Current year medical trend
Ultimate year medical trend
Year of ultimate trend
(a) Relates only to the Newspaper Guild of Detroit defined benefit pension plans.
Pension benefits
Postretirement benefits
2023
2022
2023
2022
5.1 %
2.0 %
N/A
N/A
N/A
5.4 %
2.0 %
N/A
N/A
N/A
5.4 %
N/A
6.3 %
4.5 %
2031
5.7 %
N/A
6.5 %
4.5 %
2031
The following assumptions were used to calculate the net periodic benefit cost for the Company's pension plans and
postretirement benefit obligations at December 31, 2023, 2022, and 2021:
Weighted average discount rate
Rate of increase in future compensation levels (a)
Weighted average expected return on assets
Current year medical trend
Ultimate year medical trend
Year of ultimate trend
Pension benefits
Postretirement benefits
2023
2022
2021
2023
2022
2021
5.4 %
2.0 %
5.7 %
N/A
N/A
N/A
3.8 %
2.0 %
4.8 %
N/A
N/A
N/A
2.2 %
2.0 %
5.3 %
N/A
N/A
N/A
5.7 %
N/A
N/A
6.5 %
4.5 %
2031
3.0 %
N/A
N/A
6.0 %
4.5 %
2028
2.6 %
N/A
N/A
6.0 %
4.5 %
2028
(a) Relates only to the Newspaper Guild of Detroit defined benefit pension plans.
To determine the expected long-term rate of return on pension plan assets, the Company considers the current and expected
asset allocations as well as historical and expected returns on various categories of plan assets, input from the actuaries and
investment consultants, and long-term inflation assumptions. The expected allocation of pension plan assets is based on a
diversified portfolio consisting of domestic and international equity securities and fixed income securities. This expected return
is then applied to the fair value of plan assets. The Company amortizes experienced gains and losses, including the effects of
changes in actuarial assumptions and plan provisions, over a period equal to the average future service of plan participants or
over the average remaining life expectancy of inactive participants. The Company updates the estimates used to measure the
defined benefit pension assets and obligations annually or upon a remeasurement event.
The fiduciaries of the pension plans set investment policies and strategies for the pension trusts. Objectives include
preserving the funded status of the plan and balancing risk against return.
The weighted average target asset allocation of our plans for 2024 and allocations at the end of 2023 and 2022, 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.
Purchase of pension annuity contract
Target
allocation
2024
22%
62%
16%
100%
Allocation of plan assets
2023
24%
57%
19%
100%
2022
16%
60%
24%
100%
On August 31, 2022, Gannett Media Corp., a wholly-owned subsidiary of the Company, as sponsor of the GR Plan, entered
into an agreement pursuant to which the GR Plan used a portion of its assets to purchase annuities from two insurance
companies (the "Insurers") and transferred approximately $450 million of the GR Plan's pension liabilities and related pension
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assets. As of August 31, 2022, this agreement irrevocably transferred to the Insurers future GR Plan benefit obligations for
certain U.S. retirees and beneficiaries ("Participants") beginning with payments due to the Participants on November 1, 2022
(the "Effective Date") and Gannett Media Corp. has no financial responsibility for the Participants' benefits on or after such
date. As of the Effective Date, the Insurers assumed responsibility for administrative and customer service support, including
distribution of payments to the Participants. Participants' benefits were not reduced as a result of this transaction. As a result of
this transaction, we were required to remeasure the related plan benefit obligations and assets as of August 31, 2022 reflecting
the use of an updated discount rate. The plan remeasurement resulted in a decrease of $99.9 million to our net funded pension
obligation, which included a decrease in benefit obligation of $281.8 million (primarily due to an increase in the discount rate
from 2.95% at January 1, 2022 to 5.05%) and an incremental decrease in plan assets of $381.7 million. In addition, we
recognized a noncash pension settlement gain of $0.7 million ($0.5 million after tax) for the GR Plan for the year ended
December 31, 2022, which represented the accelerated recognition of actuarial gains that were included in accumulated other
comprehensive income (loss) within stockholders' equity.
Contributions
We are contractually obligated to contribute to our pension and postretirement benefit plans. During the year ended
December 31, 2023, we contributed $1.4 million and $4.5 million to our pension and other postretirement plans, respectively.
Beginning with the quarter ended December 31, 2022, and ending with the quarter ending September 30, 2024, the GR Plan's
appointed actuary has and will certify the GR Plan's funded status for each quarter (the "Quarterly Certification") in accordance
with U.S. GAAP. If the GR Plan is less than 100% funded, the Company will make a $1.0 million contribution to the GR Plan
no later than 60 days following the receipt of the Quarterly Certification, provided, however, that the Company's obligation to
make additional contractual contributions will terminate the earlier of (a) the day following the date that a contractual
contribution would be due for the quarter ending September 30, 2024, and (b) the date the Company has made a total of
$5.0 million of contractual contributions subsequent to June 30, 2022. As of December 31, 2023, the GR Plan was more than
100% funded.
Future contributions to our pension and postretirement benefit plans, which we are contractually obligated to contribute, are
estimated to be $13.0 million in 2024. Contributions beyond 2024 are not estimated 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. These future contributions do not include additional contributions which may be required to meet Internal
Revenue Service ("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.
Estimated future benefit payments
We estimate making the following benefit payments, which reflect expected future service:
In thousands
2024
2025
2026
2027
2028
Thereafter
Pension
benefits
Postretirement
benefits
$
139,335 $
137,694
135,636
136,027
130,738
563,088
4,932
4,663
4,395
4,144
3,894
16,151
The amounts above exclude the participants' share of the benefit cost. We expect no subsidy benefits for 2024 and beyond.
Multiemployer plans
The Company is a participant in six multiemployer pension plans covering certain employees with collective bargaining
agreements ("CBAs"). The risks of participating in these multiemployer plans are different from single-employer plans in the
following aspects:
• The Company plays no part in the management of plan investments or any other aspect of plan administration;
• Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other
participating employers;
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•
•
If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the
remaining participating employers; and
If the Company chooses to stop participating in some of its multiemployer plans, the Company may be required to pay
those plans in an amount based on the unfunded status of the plan, referred to as withdrawal liability.
The Company's participation in these plans for the year ended December 31, 2023, is outlined in the table below. The
"EIN/Pension Plan Number" column provides the Employee Identification Number ("EIN") and the three-digit plan number.
Unless otherwise noted, the two most recent Pension Protection Act zone statuses available are for the plans for the years ended
December 31, 2023, and 2022, respectively. The zone status is based on information the Company 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 (i) less than 80% funded and (ii) 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. The Company
makes all required contributions to these plans as determined under the respective CBAs. For each of the plans listed below, the
Company's contribution represented less than 5% of total contributions to the plan.
Pension Plan Name
CWA/ITU Negotiated Pension Plan
Zone status
Year Ended
EIN/Plan
number
13-6212879/001
December
31, 2023
Red
December
31, 2022
Red
FIP/RP status
pending/
implemented
Implemented
Contributions
(In thousands)
2023
2022
$ 255 $ 276 $ 369
2021
Surcharge
imposed
No
GCIU—Employer Retirement Benefit
Plan(a)
The Newspaper Guild International Pension
Plan(a)
91-6024903/001
Red
Red
Implemented
41
42
63
52-1082662/001
Red
Red
Implemented
14
15
12
No
No
IAM National Pension Plan(a) (b)
51-6031295/002
Red
Red
Implemented
147
177
188
Yes
Teamsters Pension Trust Fund of
Philadelphia and Vicinity(a)
23-1511735/001 Green as
of Apr.
30, 2023
Green as
of Apr.
29, 2022
N/A
965
1,249
1,098
N/A
Expiration
dates of
CBAs
March 30,
2024 and
April 25,
2024
4/25/2024
10/6/2021
January 6,
2024 and
January 8,
2024
6/2/2022
Central Pension Fund of the International
Union of Operating Engineers and
Participating Employers(a)
Total
36-6052390/001
Green
Green
N/A
58
56
59
N/A
1/9/2024
$ 1,480 $ 1,815 $ 1,789
(a) This plan has elected to utilize special amortization provisions provided under the Preservation of Access to Care for Medicare Beneficiaries and Pension
Relief Act of 2010.
(b) The trustees of this plan have voluntarily elected to put the fund in critical status to strengthen its funding position.
As of December 31, 2023, the total unpaid balance for the Company's withdrawal liabilities was approximately $35.1
million, which are payable over 15.2 years.
Defined contribution plans
Employees are immediately eligible to participate in the Gannett Media Corp. 401(k) Savings Plan (the "Gannett 401(k)
Plan") and can elect to save up to 75% of compensation on a pre-tax basis, subject to IRS limitations. Effective January 1, 2021,
employees covered under collective bargaining agreements are eligible to participate in the Gannett 401(k) Plan only if
participation has been bargained, unless previously eligible in the New Media Investment Group Inc. Retirement Savings Plan
(the "New Media 401(k) Plan"). The plan's matching formula is 100% of the first 4% of employee contributions and 50% on the
next 2% of employee contributions. Matching contributions to the Gannett 401(k) Plan, with the exception of certain employees
covered under collective bargaining agreements, were suspended in August 2020. Beginning on July 4, 2021 or July 5, 2021 (as
applicable) matching contributions to the Gannett 401(k) Plan were reinstated with eligible pay. In addition, in October 2022,
matching contributions to the Gannett 401(k) Plan, with the exception of certain employees covered under collective bargaining
agreements, were suspended and have not resumed. For the years ended December 31, 2023, 2022, and 2021, the Company's
matching contributions were $0.8 million, $13.5 million, and $8.2 million, respectively.
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NOTE 10 — Fair value measurement
In accordance with ASC 820, "Fair Value Measurement," fair value measurements are required to be disclosed using a
three-tiered fair value hierarchy which distinguishes between assumptions based on market data (observable inputs) and the
Company's own assumptions (unobservable inputs). Level 1 refers to fair values determined based on quoted prices in active
markets for identical assets or liabilities, Level 2 refers to fair values estimated using significant other observable inputs and
Level 3 includes fair values estimated using significant unobservable inputs.
As of December 31, 2023, and 2022, assets and liabilities recorded at fair value and measured on a recurring basis
primarily consist of pension plan assets. As permitted by U.S. GAAP, we use net asset values ("NAV") as a practical expedient
to determine the fair value of certain investments. These investments measured at NAV have not been classified in the fair
value hierarchy.
The Company's debt is recorded on the Consolidated balance sheets at carrying value. Refer to Note 8 — Debt for
additional discussion regarding fair value of the Company's debt instruments.
Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on
an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of
impairment). Assets held for sale (Level 3) are measured on a nonrecurring basis and are evaluated using executed purchase
agreements, letters of intent or third-party valuation analyses when certain circumstances arise. The Company had assets held
for sale of $0.2 million and $8.4 million as of December 31, 2023 and 2022, respectively. Any resulting asset impairment from
the Company's annual goodwill and indefinite-lived intangible impairment assessment would require that the asset be recorded
at its fair value. The resulting fair value measurements of the assets are considered to be Level 3 measurements. Refer to Note 6
— Goodwill and intangible assets for additional discussion regarding the annual impairment assessment.
The following table sets forth by level, within the fair value hierarchy, the fair values of assets related to the following
pension plans: the (i) GWP Plan, (ii) TPC Plan, (iii) GR Plan, (iv) U.K. Pension Plans and (v) Newspaper Guild of Detroit
Pension Plan as of December 31, 2023:
Pension Plan Assets and Liabilities as of December 31, 2023
Level 1
Level 2
Level 3
Total
In thousands
Assets:
Cash and cash equivalents
Corporate common stock
Corporate and government bonds
Real estate
Mutual funds
Exchange traded funds
Interest in common/collective trusts:
Equities
Fixed income
Partnership/joint venture interests
Partnerships/joint ventures
Total plan assets at fair value
Liabilities:
Other liabilities
Total plan liabilities at fair value
Hedge funds
Total plan assets at fair value excluding those measured at NAV $
—
153,647 $
Instruments measured at NAV using the practical expedient:
Real estate funds
Interest in common/collective trusts - fixed income
$
11,524 $
1,899 $
— $
98,309
—
—
22,764
21,050
—
—
—
—
—
133,503
—
—
—
—
169,932
—
253,403
—
—
—
296,624
691,479
—
—
1,243,405 $
13,423
98,309
253,403
133,503
22,764
21,050
296,624
691,479
169,932
48,695
352,130 $
48,695
1,749,182
9,576
23,396
3,213
$
1,785,367
$
$
(1,469) $
(1,469) $
— $
— $
— $
— $
(1,469)
(1,469)
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The following table sets forth a summary of changes in the fair value of the Level 3 pension plan assets for the year ended
December 31, 2023:
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
Balance at
end of
year
$ 132,593 $
166,184
63,054
2,683 $
4,164
3,141
2
—
— $
—
—
—
13 $
(1,786) $
30,714
—
—
(25,917)
—
—
— $ 133,503
169,932
48,695
(5,213)
(17,500)
(2)
—
$ 361,833 $
9,988 $
— $
30,727 $
(27,703) $
(22,715) $ 352,130
In thousands
Assets:
Real estate
Partnership/joint venture interests
Hedge funds
Other assets
Total assets
Liabilities:
Other liabilities
$
2,008 $
— $
— $
— $
— $
(2,008) $
—
There were no transfers between Levels 1 and 2 for the year ended December 31, 2023.
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The following table sets forth by level, within the fair value hierarchy, the fair values of assets and liabilities related to the
following pension plans: the (i) GWP Plan, (ii) TPC Plan, (iii) GR Plan, (iv) U.K. Pension Plans and (v) the Newspaper Guild
of Detroit Pension Plan as of December 31, 2022:
Pension Plan Assets and Liabilities as of December 31, 2022(a)
In thousands
Assets:
Cash and cash equivalents
Corporate common stock
Corporate and government bonds
Real estate
Mutual funds
Exchange traded funds
Interest in common/collective trusts:
Equities
Fixed income
$
Partnership/joint venture interests
Hedge funds
Other assets
Total plan assets at fair value, excluding those measured at NAV $
Assets measured at NAV using the practical expedient:
Real estate funds
Interest in common/collective trusts - fixed income
Partnership/joint venture interests
Total plan assets at fair value
Liabilities:
Level 1
Level 2
Level 3
Total
11,133 $
111,351
—
—
24,346
18,494
—
—
—
—
—
165,324 $
1,660 $
—
246,555
—
—
—
252,718
614,718
—
—
—
— $
—
—
132,593
—
—
—
—
166,184
63,054
2
1,115,651 $
361,833 $
$
12,793
111,351
246,555
132,593
24,346
18,494
252,718
614,718
166,184
63,054
2
1,642,808
12,415
21,547
48,927
1,725,697
Other liabilities
(4,887)
(4,887)
Total plan liabilities at fair value
(a) Certain reclassifications have been made to the 2022 table above to conform to classifications used in the current year. These reclassifications had no impact
(2,381) $
(2,381) $
(2,008) $
(2,008) $
(498) $
(498) $
$
$
on the leveling of assets or liabilities within the table nor on the total plan assets or liabilities held at fair value as of December 31, 2022.
The following table sets forth a summary of changes in the fair value of the Level 3 pension plan assets and liabilities for
the year ended December 31, 2022:
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
Balance at
end of
year
$ 150,589 $
186,817
100,828
2
$ 438,236 $
(29,890) $
(9,315)
2,226
—
(36,979) $
— $
—
—
—
— $
18,819 $
37,712
—
—
56,531 $
(6,925) $
(31,648)
—
—
(38,573) $
— $ 132,593
166,184
63,054
2
(57,382) $ 361,833
(17,382)
(40,000)
—
In thousands
Assets:
Real estate
Partnership/joint venture interests
Hedge funds
Other assets
Total assets
Liabilities:
Other liabilities
$
2,008 $
— $
— $
— $
— $
— $
2,008
There were no transfers between Levels 1 and 2 for the year ended December 31, 2022.
Valuation methodologies used for pension plan assets and liabilities measured at fair value are as follows:
•
Corporate common stock is valued primarily at the closing price reported on the active market on which the individual
securities are traded;
Corporate bonds are a type of debt security issued by a corporation and are primarily valued using trades or quotes in
secondary markets for that specific issue or similar security;
Investments in direct real estate in the U.K. 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.
•
•
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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;
•
•
•
• Mutual funds are valued at the daily closing price as reported by the fund. Mutual funds held are open ended funds that
are registered with the SEC. These funds are required to publish their NAV and to transact at that price. The mutual
funds held are deemed to be actively traded;
Exchange traded funds are valued at the closing price reported on the active market on which the individual securities
are traded;
Interests in common/collective trusts are primarily equity and fixed income investments valued using the NAV
provided by the administrator of the underlying fund available daily to the administrator of the respective plan. Where
the daily NAV is not provided, interests in common/collective trusts are valued either through the use of a NAV 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;
Investments in partnerships and joint venture interests classified in Level 3 are valued 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. As of both December 31, 2023 and 2022, there were $3.3 million and
$4.0 million, respectively, in unfunded commitments related to partnership/joint venture interests. One of the
investments in partnerships and joint venture interests represents a limited partnership commingled fund valued using
the NAV as reported by the fund manager; and
Investments in hedge funds consist 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. 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.
•
We review appraised values, audited financial statements and additional information to evaluate fair value estimates from
our investment managers and/or fund administrator.
NOTE 11 — Income taxes
The components of Loss before income taxes consist of the following:
In thousands
Domestic
Foreign
Loss before income taxes
The Provision for income taxes consists of the following:
In thousands
Current:
Federal
State and local
Foreign
Total current
Deferred:
Federal
State and local
Foreign
Total deferred
Year ended December 31,
2022
2021
2023
$
$
(55,073) $
(121,840) $
(152,796)
48,908
44,934
64,875
(6,165) $
(76,906) $
(87,921)
Year ended December 31,
2022
2021
2023
$
(311) $
(3,579) $
1,705
8,821
10,215
6,436
399
4,679
11,514
804
1,575
(1,200)
(692)
(5,868)
9,109
2,549
579
1,180
1,521
3,280
27,842
1,663
15,465
44,970
48,250
Provision for income taxes
$
21,729 $
1,349 $
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The Provision for income taxes varies from the federal statutory tax rate as a result of the following differences:
In percentage
Federal statutory tax rate
(Increase) decrease in taxes resulting from:
State and local income taxes, net of federal benefit
Debt refinancing
Change in valuation allowance
Foreign tax rates differences
Non-deductible parking
Non-deductible meals, entertainment
Gain (loss) on foreign exchange rate
Stock compensation windfall/(shortfall)
Partnership permanent differences
Tegna indemnification release
Foreign entities loss adjustments
Newsquest permanent differences
Nondeductible compensation
Provision to return and deferred tax adjustments
Capital loss carryforward
Paycheck Protection Program Loan forgiveness
Global intangible low-taxed income
Branch income
Profit on non-qualifying land and buildings
Uncertain tax positions
Deduction for interest expense
Other expenses
Effective tax rate
NM indicates not meaningful.
Year ended December 31,
2022
2021
2023
21.0 %
21.0 %
21.0 %
3.6
—
(130.0)
(9.2)
(2.5)
(12.8)
2.4
(24.2)
(2.0)
(2.8)
(1.3)
(7.6)
(13.4)
(45.1)
—
—
(112.7)
5.4
0.2
(134.5)
102.7
10.3
6.0
—
(30.9)
0.4
(0.2)
(0.9)
0.4
(0.2)
(0.1)
(0.7)
(1.6)
(0.1)
(2.3)
5.4
—
—
(4.6)
1.2
0.1
(2.6)
8.5
(0.6)
(3.0)
(30.2)
(40.6)
0.8
(0.3)
(0.9)
(0.2)
(0.2)
—
(0.4)
(0.5)
3.2
(0.4)
(4.9)
(1.6)
3.8
(5.8)
1.6
2.4
(8.6)
8.4
1.5
NM
(1.8) %
NM
Our effective tax rate for the year ended December 31, 2023 was not meaningful. The tax provision for 2023 was primarily
impacted by the valuation allowances on non-deductible U.S. interest expense carryforwards, the global intangible low-taxed
income inclusion from our U.K. operations, nondeductible compensation, and state and local tax expense, partially offset by the
benefit from the pre-tax book loss.
Our effective tax rate for the year ended December 31, 2022 was negative 1.8%. The tax provision for 2022 was primarily
impacted by the valuation allowances on non-deductible U.S. interest expense carryforwards, the global intangible low-taxed
income inclusion, the release of uncertain tax positions in the U.S., and the reduction in the blended state tax rate, which were
offset by the tax benefit of the pre-tax book loss.
Recent U.S. and international tax legislation
On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the "Inflation Reduction Act"),
which includes, among other provisions, changes to the U.S. corporate income tax system, including a 15% minimum tax based
on "average adjusted financial statement income" exceeding $1 billion for any three consecutive years preceding the tax year
and a 1% excise tax on net repurchases of stock in excess of $1 million after December 31, 2022. During the year ended
December 31, 2023, we did not experience a material financial impact from the Inflation Reduction Act. We do not anticipate a
material financial impact from the Inflation Reduction Act during 2024.
We are subject to income taxes and various other taxes in the U.S. and in many foreign jurisdictions; therefore, changes in
both domestic and international tax laws or regulations have affected and may affect our effective tax rate, results of operations,
and cash flows. The Organization for Economic Co-operation and Development (the "OECD")/G20 Inclusive Framework on
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Base Erosion and Profit Shifting has agreed on a two-pillar approach to address tax challenges arising from the digitalization of
the global economy by (i) allocating profits to market jurisdictions ("Pillar One") and (ii) ensuring multinational enterprises pay
a minimum level of tax regardless of where the headquarters are located or the jurisdictions in which the company operates
("Pillar Two"). Pillar One targets multinational groups with global revenue exceeding €20 billion and a profit-to-revenue ratio
of more than 10%. Companies subject to Pillar One will be required to allocate profits and pay taxes to market jurisdictions.
Based on the current proposed revenue and profit thresholds, we do not expect to be subject to tax changes associated with
Pillar One. Pillar Two focuses on global profit allocation and a global minimum tax rate. In December 2022, the European
Union ("EU") Member States formally adopted the EU's Pillar Two Directive, which generally provides for a minimum
effective tax rate of 15%, as established by the OECD Pillar Two Framework that was supported by over 130 countries
worldwide. The EU Pillar Two Directive became effective on January 1, 2024.
The U.K. has enacted legislation to implement the OECD's Pillar Two rules with the passing of Finance (No.2) Act 2023.
The legislation introduces a global minimum effective tax rate of 15% by implementing a domestic top-up tax and a
multinational top-up tax for U.K. multinational corporations effective January 1, 2024. Other countries are also actively
considering changes to their tax laws to adopt certain parts of the OECD's proposals. We do not expect that Pillar Two will
have a material impact on the Consolidated financial statements.
The tax effects of each type of temporary differences and carryforwards that give rise to significant portions of our deferred
tax assets and deferred tax liabilities are presented below:
In thousands
Deferred tax liabilities:
Fixed assets
Right of use asset
Convertible debt
Pension and other postretirement benefit obligations
Definite and indefinite lived intangible assets
Total deferred tax liabilities
Deferred tax assets:
Accrued compensation costs
Accrued liabilities
Disallowed interest
Goodwill
Pension and other postretirement benefit obligations
Partnership investments
Loss carryforwards
Lease liabilities
Other
Total deferred tax assets
Less: Valuation allowances
Total net deferred tax assets
Net deferred tax assets
December 31,
2023
2022
$
(5,565) $
(60,384)
(18,441)
(8,388)
(20,457)
(13,850)
(61,366)
(22,808)
—
(32,197)
$
(113,235) $
(130,221)
12,900
14,676
115,030
3,200
—
4,231
224,505
58,828
27,000
15,507
15,837
103,012
6,605
7,671
4,491
248,516
61,511
22,309
$
$
$
460,370 $
485,459
(312,038)
(300,059)
148,332 $
185,400
35,097 $
55,179
In assessing the realizability of deferred tax assets, management considered whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary differences become deductible. During the
year ended December 31, 2023, the Company recorded an additional $12.0 million of valuation allowances against its deferred
tax assets. The net increase in the valuation allowance was primarily due to changes in the U.S. disallowed interest expense
carryforward of $12.0 million, a decrease of $4.7 million related to foreign valuation allowances, an increase related to currency
translation adjustments of $3.0 million and other increases in the valuation allowance of $1.7 million. The Company considered
all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation
allowance for deferred tax assets was needed. The Company reached the conclusion it was appropriate to record a valuation
allowance against a portion of its federal deferred tax assets in light of available evidence. We relied on evidence shown by
reversing taxable temporary differences, as well as expectations of future taxable income with the appropriate tax character.
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During the year ended December 31, 2022, the Company recorded an additional $25.7 million of valuation allowances against
its deferred tax assets. The increase in the valuation allowance is primarily due to increases in the U.S. disallowed interest
expense carryforward, increases related to acquisitions, and decreases related to currency translation adjustment. The Company
continues to maintain its existing valuation allowance against net deferred tax assets in many of its state and foreign
jurisdictions as it is not believed to be more likely than not that its deferred tax assets will be realized in such jurisdictions.
The following table summarizes the activity related to our valuation allowance for deferred tax assets for the year ended
December 31, 2023 (In thousands):
Balance at
beginning of period
Additions/
(reductions)
charged to expenses
Additions/
(reductions) for
acquisitions/
dispositions
Other additions to
(deductions from)
reserves
Foreign currency
translation
Balance at end of
period
$
300,059 $
9,024 $
— $
— $
2,954 $
312,037
The aforementioned valuation allowance relates to indefinite-lived intangible assets, nondeductible interest expense
carryforwards, capital losses, state and foreign net operating losses and other tax attributes.
As of December 31, 2023, the Company had $444.5 million of Federal net operating loss ("NOL") carryforwards, $478.3
million of Federal disallowed business interest expense carryforwards, $1.088 billion of apportioned state NOL carryforwards
and $203.9 million of foreign net NOL carryforwards. Additionally, as of December 31, 2023, the Company had $6.0 million of
other business tax credits, $0.3 million of foreign tax credits, $4.9 million of state credits and $43.8 million of foreign capital
loss carryforwards. The Federal NOL carryforwards begin to expire in 2033 and the state NOL carryforwards began to expire in
2023. The foreign NOLs begin to expire in 2030. The tax credits begin to expire in 2024. A portion of the NOLs are subject to
the limitations of the Internal Revenue Code Section 382. This section provides limitations on the availability of NOL
carryforwards to offset income if a corporation undergoes an "ownership change," generally defined as a greater than 50%
change in equity ownership over a three-year period. The most recent analysis of our historical ownership change was
completed through December 31, 2023. Based on the analysis, we do not anticipate a current limitation on tax attributes.
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
Reductions due to lapsed statutes of limitations
Foreign currency translation
Balance at end of year
Year ended December 31,
2022
2021
2023
$
43,697 $
46,082 $
40,885
7,017
1,327
(652)
(208)
1,640
5,411
—
(2,664)
(2,264)
(2,868)
6,574
607
(1,984)
—
—
$
52,821 $
43,697 $
46,082
At December 31, 2023, the Company's uncertain tax positions of $52.6 million, if recognized, would impact the effective
tax rate. It is reasonably possible that the total amount of unrecognized tax benefits related to certain of the Company's
uncertain tax positions could decrease by as much as $10 million to $16 million within the next twelve months as a result of
ongoing audits, foreign judicial proceedings, lapses of statutes of limitations, or regulatory developments. The Company
recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. At December 31,
2023 and 2022, the accrual for uncertain tax positions included $4.6 million and $3.9 million of interest and penalties,
respectively.
The Company files a federal consolidated income tax return for which the statute of limitations remains open for any year
for which a net operating loss is utilized, which for the Company is the 2010 tax year and subsequent years. U.S. state
jurisdictions have statute of limitations generally ranging from 3 to 6 years. On November 19, 2019, New Media Investment
Group Inc. ("New Media") completed its acquisition of Gannett Co., Inc. (which was renamed Gannett Media Corp. and is
referred to as "Legacy Gannett"). The federal income tax returns for calendar years 2015-2017 for Legacy Gannett are under
federal audit. The U.K. income tax returns for calendar years 2018-2021 for Newsquest Capital Ltd. are under audit. The statute
of limitations for the Company's U.K. income tax return remains open for tax years for 2021 and forward.
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NOTE 12 — Supplemental equity and other information
Loss per share
The following table sets forth the information to compute basic and diluted loss per share:
In thousands, except per share data
Net loss attributable to Gannett
Basic weighted average shares outstanding
Diluted weighted average shares outstanding
Loss per share attributable to Gannett - basic
Loss per share attributable to Gannett - diluted
Year ended December 31,
2023
2022
2021
$
(27,791) $
(78,002) $
(134,962)
139,633
139,633
136,903
136,903
134,783
134,783
$
$
(0.20) $
(0.20) $
(0.57) $
(0.57) $
(1.00)
(1.00)
The Company excluded the following securities from the computation of diluted income per share because their effect
would have been antidilutive:
In thousands
Warrants (a)
Stock options
Restricted stock grants (b)
2027 Notes (c)
Year ended December 31,
2023
2022
2021
—
6,068
8,608
97,057
845
6,068
8,616
97,057
845
6,068
9,854
98,168
(a) The warrants expired on November 26, 2023.
(b) Includes Restricted stock awards ("RSA"), Restricted stock units ("RSU") and Performance stock units ("PSU").
(c) Represents the total number of shares that would be convertible at December 31, 2023 and 2022 as stipulated in the 2027 Notes Indenture. The amount for
the year ended December 31, 2021 reflects the adjustment for the weighted average impact of the repurchase of $11.8 million aggregate principal of 2027
Notes as described below.
The 2027 Notes may be converted at any time by the holders into cash, shares of the Company's Common Stock or any
combination of cash and Common Stock, at the Company's election. In November 2021, the Company entered into separate,
privately negotiated agreements with certain holders of our 2027 Notes and repurchased $11.8 million aggregate principal of
outstanding 2027 Notes. Conversion of all of the 2027 Notes into Common Stock (assuming the maximum increase in the
conversion rate as a result of a Make-Whole Fundamental Change but no other adjustments to the conversion rate), would result
in the issuance of an aggregate of 287.2 million shares of Common Stock. The Company has excluded approximately 190.1
million shares from the loss per share calculation, representing the difference between the total number of shares that would be
convertible at December 31, 2023 and the total number of shares issuable assuming the maximum increase in the conversion
rate.
Share-based compensation
Share-based compensation expense was $16.6 million, $16.8 million, and $18.4 million for the years ended December 31,
2023, 2022, and 2021, respectively, and is included in Selling, general and administrative expenses on the Consolidated
statements of operations and comprehensive income (loss). Total compensation cost not yet recognized related to non-vested
awards as of December 31, 2023 was $15.9 million, which is expected to be recognized over a weighted average period of 1.6
years through August 2025.
Equity awards
On June 5, 2023, the Company's 2023 Stock Incentive Plan (the "2023 Incentive Plan") was approved by the Company's
stockholders and became effective. The 2023 Incentive Plan replaced the Company's 2020 Omnibus Incentive Compensation
Plan (the "2020 Incentive Plan"), which had replaced the Company's 2015 Omnibus Incentive Compensation Plan (the "2015
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Incentive Plan"), such that no further awards were or will be granted pursuant to the 2020 Incentive Plan and the 2015 Incentive
Plan.
With respect to restricted stock awards ("RSAs") granted pursuant to award agreements under the 2023 Incentive Plan, if
service terminates for certain specified conditions, all unvested shares of restricted stock may be forfeited. During the period
prior to the lapse and removal of the vesting restrictions, a grantee of a RSA will have all the rights of a stockholder, including
without limitation, the right to vote and the right to receive dividends or other distributions, if any. Any dividends or other
distributions that are declared with respect to the shares of restricted stock will be paid at the time such shares vest. The value of
the RSAs on the date of issuance is recognized in Selling, general, and administrative expenses over the vesting period with a
corresponding increase to additional paid-in-capital. Beginning in 2023, RSAs granted generally vest in equal annual
installments over a three-year period subject to the participants' continued employment with the Company and the terms of the
applicable award agreements. RSAs granted prior to 2023 vest 33.3% on the first and second anniversary of the date of grant,
and 33.4% on the third anniversary of the date of grant, subject to the participants' continued employment with the Company
and the terms of the applicable award agreement.
The following table outlines RSA activity:
2023
Year ended December 31,
2022
2021
Number
of RSAs
(In thousands)
Weighted-
average
grant date
fair value
Number
of RSAs
(In thousands)
Weighted-
average
grant date
fair value
Number
of RSAs
(In thousands)
Weighted-
average
grant date
fair value
Unvested at beginning of year
Granted
Vested
Forfeited
Unvested at end of year
8,616 $
5,171
(3,910)
(1,421)
8,456 $
4.40
1.87
4.11
3.68
3.09
6,949 $
7,427
(2,633)
(3,127)
8,616 $
4.32
4.29
4.63
3.75
4.40
5,181 $
4,100
(1,956)
(376)
6,949 $
3.39
5.29
3.80
4.76
4.32
As of December 31, 2023, the aggregate intrinsic value of unvested RSAs was $19.4 million.
Restricted stock units ("RSUs") generally vest in equal annual installments over a three-year period subject to the
participants' continued employment with the Company and the terms of the applicable award agreement, and we recognize
compensation costs for these awards based on the fair market value of the award as of the grant date.
Performance stock units ("PSUs") are subject to the achievement of certain performance goals over the eligible period and
the terms of the applicable award agreement. Compensation cost ultimately recognized for these PSUs will equal the grant-date
fair market value of the unit that coincides with the actual outcome of the performance conditions. On an interim basis, we
record compensation cost based on the expected level of achievement of the performance conditions.
The following table outlines RSU and PSU activity:
2023
Year ended December 31,
2022
2021
Number
of RSUs &
PSUs
(In thousands)
Weighted-
average
grant date
fair value
Number
of RSUs &
PSUs
(In thousands)
Weighted-
average
grant date
fair value
Number
of RSUs &
PSUs
(In thousands)
Weighted-
average
grant date
fair value
Unvested at beginning of year
Granted (a)
Vested
Forfeited and canceled (b)
Unvested at end of year
(a) There were no RSUs granted during the years ended December 31, 2023, 2022 and 2021.
(b) For the years ended December 31, 2023 and 2022, includes 900 thousand and 332 thousand, respectively, of PSUs canceled since the performance goals
2,905 $
332
(1,905)
(332)
1,000 $
2,513 $
2,000
(1,576)
(32)
2,905 $
1,000 $
332
(152)
(999)
181 $
3.04
1.83
3.04
2.85
1.83
4.05
4.63
4.58
4.63
3.04
6.28
3.04
6.28
6.28
4.05
were not achieved during the eligible period. There were no PSUs canceled during the year ended December 31, 2021.
As of December 31, 2023, the aggregate intrinsic value of unvested PSUs was $0.4 million.
119
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Stock options
As of December 31, 2023, FIG LLC, the former manager of the Company, held stock options exercisable for 6,068
thousand shares of Common Stock, all of which are exercisable and had a weighted-average grant date fair value, weighted-
average exercise price and weighted-average remaining contractual term of $1.78, $13.97 and 4.2 years, respectively.
Cash awards
The Company grants certain employees either long-term cash awards ("LTCAs") or cash performance units ("CPUs").
During 2023, our LTCAs and CPUs were granted during the first quarter, and in the future we anticipate the majority of our
LTCAs and CPUs to be granted in the third quarter of our fiscal year. CPUs generally vest and pay out in cash on the third
anniversary of the grant date based upon the achievement of threshold goals depending on actual performance against financial
objectives over a three-year period. LTCAs generally vest and pay out in cash on the first, second and third anniversaries of the
date of grant. As of December 31, 2023, there was approximately $8.9 million of unrecognized compensation expense related to
cash awards.
Preferred stock
The Company has authorized 300,000 shares of preferred stock, par value $0.01 per share, issuable in one or more series
designated by the Company's Board of Directors, none of which are outstanding. There were no issuances of preferred stock
during the year ended December 31, 2023.
Stock repurchase program
On February 1, 2022, the Company's Board of Directors authorized the repurchase of up to $100 million (the "Stock
Repurchase Program") of the Company's Common Stock. Repurchases may be made from time to time through open market
purchases or privately negotiated transactions, pursuant to one or more plans established pursuant to Rule 10b5-1 under the
Securities Exchange Act of 1934, as amended, or by means of one or more tender offers, in each case, as permitted by securities
laws and other legal requirements. The amount and timing of the purchases, if any, will depend on a number of factors,
including, but not limited to, the price and availability of the Company's shares, trading volume, capital availability, Company
performance and general economic and market conditions. The Stock Repurchase Program may be suspended or discontinued
at any time. Further, future repurchases under our Stock Repurchase Program may be subject to various conditions under the
terms of our various debt instruments and agreements, unless an exception is available or we obtain a waiver or similar relief.
During the year ended December 31, 2023, we did not repurchase any shares of Common Stock under the Stock
Repurchase Program. As of December 31, 2023, the remaining authorized amount under the Stock Repurchase Program was
approximately $96.9 million.
120
Table of Contents
Accumulated other comprehensive income (loss)
The following tables summarize the components of, and the changes in, Accumulated other comprehensive income (loss),
net of tax:
Pension and
postretirement
benefit plans
Foreign
currency
translation
Total
$
In thousands
Balance at December 31, 2020
Other comprehensive income (loss) before reclassifications
Amounts reclassified from accumulated other comprehensive income (a) (b)
Net current period other comprehensive income (loss), net of taxes
Balance at December 31, 2021
Other comprehensive loss before reclassifications
Amounts reclassified from accumulated other comprehensive loss (a) (b) (c)
Net current period other comprehensive loss, net of taxes
Balance at December 31, 2022
Other comprehensive income before reclassifications
Amounts reclassified from accumulated other comprehensive loss (a) (b)
Net current period other comprehensive income, net of taxes
Balance at December 31, 2023
(a) Accumulated other comprehensive income (loss) component represents amortization of actuarial loss and is included in the computation of net periodic
(24,008)
—
(24,008)
(14,880) $
13,683
—
13,683
(1,197) $
(86,351) $
22,639
(632)
22,007
(64,344) $
50,173
9,778
47
9,825
59,998
(160,360)
(869)
(161,229)
(101,231)
36,322
(632)
35,690
(65,541)
40,441 $
10,382
47
10,429
50,870 $
9,732 $
(604)
—
(604)
9,128 $
(136,352)
(869)
(137,221)
$
$
$
benefit cost. See Note 9 — Pensions and other postretirement benefit plans.
(b) Amounts reclassified from accumulated other comprehensive income (loss) are recorded net of tax impacts of $0.2 million, $0.3 million, and $0.02 million
for the years ended December 31, 2023, 2022, and 2021, respectively.
(c) Amounts reclassified from accumulated other comprehensive income (loss) include a net pension settlement gain of $0.7 million ($0.5 million, net of tax) for
the year ended December 31, 2022. See Note 9 — Pensions and other postretirement benefit plans.
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NOTE 13 — Commitments, contingencies and other matters
Legal proceedings
The Company is and may become involved from time to time in legal proceedings in the ordinary course of its business,
including, but not limited to, matters such as libel, invasion of privacy, intellectual property infringement, wrongful termination
actions, complaints alleging employment discrimination, and regulatory investigations and inquiries. In addition, the Company
is involved from time to time in governmental and administrative proceedings concerning employment, labor, environmental,
and other claims. Insurance coverage mitigates potential loss for certain of these matters. Historically, such claims and
proceedings have not had a material adverse effect on the Company's consolidated results of operations or financial position.
We are also defendants in judicial and administrative proceedings involving matters incidental to our business. Although
the Company is unable to predict with certainty the eventual outcome of any litigation, regulatory investigation or inquiry, in
the opinion of management, the Company does not expect its current and any threatened legal proceedings to have a material
adverse effect on the Company's business, financial position or consolidated results of operations. Given the inherent
unpredictability of these types of proceedings, however, it is possible that future adverse outcomes could have a material effect
on the Company's financial results.
On June 20, 2023, the Company filed a civil action against Google LLC and Alphabet Inc. (together, "Google") in the U.S.
District Court in the Southern District of New York seeking injunctive relief and damages for the anticompetitive
monopolization of advertising technology markets and for deceptive commercial practices. The Company's complaint details
more than a dozen anticompetitive and deceptive acts that the Company believes demonstrate Google's unfair control and
manipulation of all sides of each online advertising transaction. The Company intends to vigorously pursue this action.
However, at this stage, the Company is unable to predict the outcome or impact on its business and financial results. The
Company is accounting for this matter as a gain contingency, and will record any such gain in future periods, if and when the
contingency is resolved, in accordance with ASC 450, "Contingencies." We do not expect pursuing this lawsuit to be a
significant cost to us.
The Company was a defendant in a lawsuit titled Scott O. Sapulpa ("Plaintiff") v. Gannett Co., Inc. in the District Court in
the State of Oklahoma. In February 2024, a jury found for the Plaintiff and awarded compensatory damages of $5 million and
$20 million in punitive damages. While we cannot predict with certainty the ultimate outcome of this action, the Company
intends to seek appellate review of the case. We are currently unable to estimate a range of reasonably possible loss; however,
we believe that damages, if any, would be covered by the Company's insurance policies. As a result, we believe the outcome
will not have a material impact on the Company's consolidated financial statements.
Other
Purchase obligations
We have future expected purchase obligations, in the normal course of operations, of $256.2 million related to digital
licenses and information technology services, printing contracts, professional services, interactive marketing agreements, and
other legally binding commitments. Amounts which we are liable for under purchase orders outstanding at December 31, 2023,
are reflected in the Consolidated balance sheets as Accounts payable 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
Other long-term liabilities in the Consolidated balance sheets, are established on an actuarial basis with the advice of consulting
actuaries and totaled $43.1 million and $51.1 million as of December 31, 2023 and 2022, respectively.
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NOTE 14 — Segment reporting
We define our reportable segments based on the way the Chief Operating Decision Maker ("CODM"), which is our Chief
Executive Officer, manages the operations for purposes of allocating resources and assessing performance. Effective with the
fourth quarter of 2023, the Company is reporting financial information for its Newsquest business in a separate segment.
Previously, the financial information for this segment was aggregated with Domestic Gannett Media and, together, formed the
Gannett Media reportable segment. As a result, the Company has revised its historical disclosures to reflect the new Domestic
Gannett Media and Newsquest reportable segments for all years presented. Our reportable segments include the following:
• Domestic Gannett Media is comprised of our portfolio of local, regional, and national newspaper publishers. The
results of this segment include Advertising and marketing services revenues from local, classified, and national
advertising across multiple platforms, including print, online, mobile, and tablet as well as niche publications,
Circulation revenues from home delivery, digital distribution and single copy sales of our publications, and Other
revenues, mainly from commercial printing, distribution arrangements, revenues from our events business, digital
content syndication and affiliate revenues, and third-party newsprint sales.
• Newsquest is comprised of our portfolio of international newspaper publishers. The results of this segment include
Advertising and marketing services revenues from local, classified, and national advertising across multiple platforms,
including print, online, mobile, and tablet as well as niche publications, Circulation revenues from home delivery,
digital distribution and single copy sales of our publications, and Other revenues, mainly from digital production
revenues and commercial printing.
• Digital Marketing Solutions is comprised of our digital marketing services companies under the brand LocaliQ. The
results of this segment include Advertising and marketing services revenues through multiple services, including
search advertising, display advertising, search optimization, social media, website development, web presence
products, customer relationship management, and software-as-a-service solutions.
In addition to the reportable segments above, we have a Corporate and other category that includes activities not directly
attributable to a specific reportable segment. This category primarily consists of broad corporate functions, including legal,
human resources, accounting, analytics, finance, marketing and technology, as well as 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 measures used by other companies. We define Adjusted EBITDA as Net
income (loss) attributable to Gannett before (1) Income tax expense (benefit), (2) Interest expense, (3) Gains or losses on the
early extinguishment of debt, (4) Non-operating pension income, (5) Loss on convertible notes derivative, (6) Depreciation and
amortization, (7) Integration and reorganization costs, (8) Other operating expenses, including third-party debt expenses and
acquisition costs, (9) Asset impairments, (10) Goodwill and intangible impairments, (11) Gains or losses on the sale or disposal
of assets, (12) Share-based compensation, and (13) certain other non-recurring charges.
Management considers Adjusted EBITDA to be an important 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 that we do not
believe are indicative of each segment's core operating performance.
123
Table of Contents
In thousands
Revenues:
Domestic Gannett Media
Newsquest
Digital Marketing Solutions
Corporate and other
Intersegment Eliminations
Total revenues
Adjusted EBITDA:
Domestic Gannett Media
Newsquest
Digital Marketing Solutions
Corporate and other
Net loss attributable to noncontrolling interests
Interest expense
(Gain) loss on early extinguishment of debt
Non-operating pension income
Loss on convertible notes derivative
Depreciation and amortization
Integration and reorganization costs(a)
Other operating expenses
Asset impairments
(Gain) loss on sale or disposal of assets, net
Share-based compensation expense
Other items
Loss before income taxes
Provision for income taxes
Net loss
Year ended December 31,
2022
2021
2023
2,095,853
2,379,806
2,678,117
233,980
477,909
6,268
234,630
468,883
5,440
208,618
442,299
8,371
(150,460)
(143,456)
(129,322)
2,663,550
2,945,303
3,208,083
194,641
50,128
53,223
(30,309)
103
111,776
(4,529)
(9,382)
—
162,622
24,468
1,550
1,370
(40,101)
16,567
9,404
(6,165)
21,729
(27,894)
207,648
40,027
57,580
(47,972)
253
108,366
(399)
(58,953)
—
182,022
87,974
1,892
1,056
(6,883)
16,751
2,110
(76,906)
1,349
(78,255)
384,933
49,040
50,960
(51,221)
1,209
135,748
48,708
(95,357)
126,600
203,958
49,284
20,952
3,976
17,208
18,439
(9,092)
(87,921)
48,250
(136,171)
Net loss attributable to noncontrolling interests
$
(103) $
(253) $
(1,209)
Net loss attributable to Gannett
(a) For the years ended December 31, 2023, 2022 and 2021, Integration and restructuring costs mainly reflect severance-related expenses and other
(27,791) $
(78,002) $
$
(134,962)
restructuring-related expenses, which represent costs for consolidating operations, systems implementation, outsourcing of corporate functions and facility
consolidations.
Asset information by segment is not a key measure of performance used by the CODM function. 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.
NOTE 15 — Subsequent events
On February 15, 2024, the Company decided to relocate its Corporate headquarters from McLean, Virginia to its existing
leased office space in New York, New York effective March 31, 2024. The Company will exit, cease use and continue to seek
subleases for its leased facility in McLean. As a result of the headquarters relocation, the Company expects to record
impairment charges of approximately $45.0 million during the three months ended March 31, 2024 related to the McLean
operating lease right-of-use asset and the associated leasehold improvements.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
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"), as of the end of the
period covered by this report. Based on this evaluation, our principal executive officer and our principal financial officer have
concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in reports
filed or submitted by the Company under the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms and that information required to be disclosed by the Company is accumulated
and communicated to the Company's management to allow timely decisions regarding the required disclosure.
Management's Report on Internal Control Over Financial Reporting
Management's report on internal control over financial reporting and the attestation report of our independent registered
public accounting firm on our internal control over financial reporting are set forth in Item 8 of this Annual Report on Form 10-
K and are incorporated by reference herein.
Changes in Internal Control Over Financial Reporting
There has been no change in the Company's internal control over financial reporting (as such term is defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) during the Company's fourth quarter of the fiscal year ended December 31,
2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
125
Table of Contents
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
PART III
The information captioned "Information Concerning our Director Nominees" under the heading "Proposal No. 1 Election of
Directors," the information captioned "Named Executive Officers" under the heading "Compensation Discussion and Analysis,"
and the information captioned "Statement on Corporate Governance," "Board and Committee Meetings," "Audit Committee,"
and "Nominating and Corporate Governance Committee" under the heading "Environmental, Social and Governance Matters"
in our 2024 proxy statement is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information under the headings "Compensation Discussion and Analysis," "Compensation Committee Report," and
"CEO Pay Ratio" in our 2024 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" under the heading "Compensation Discussion and
Analysis" and the information under the heading "Common Stock Ownership of Certain Beneficial Owners and Management"
in our 2024 proxy statement is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information captioned "Determination of Director and Director Nominee Independence" under the heading
"Environmental, Social and Governance Matters" and the information under the heading "Related Persons Transactions" in our
2024 proxy statement is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information under the heading "Proposal No. 2 Ratification of the Appointment of Grant Thornton LLP as our
Independent Registered Public Accounting Firm" in our 2024 proxy statement is incorporated herein by reference.
126
Table of Contents
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 78.
(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
3.1
3.2
3.3
3.4
Amended and Restated Certificate of Incorporation of the
Company.
Certificate of Amendment to the Amended and Restated
Certificate of Incorporation of the Company.
Certificate of Designation of Series A Junior
Participating Preferred Stock of Gannett Co., Inc.
Certificate of Elimination of the Series A Junior
Participating Preferred Stock of Gannett Co., Inc.
3.5
Amended and Restated Bylaws of the Company.
4.1
4.2
4.3
4.4
4.5
4.6
4.7
Indenture (including Form of Note) with respect to
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.
First Supplemental Indenture, dated as of November 19,
2019, by and among Gannett Co., Inc., New Media
Investment Group Inc., and U.S. Bank National
Association.
Indenture with respect to 6.000% Convertible Senior
Secured Notes due 2027, dated as of November 17, 2020,
by and between Gannett Co., Inc., the Subsidiary
Guarantors from time to time party thereto and U.S.
Bank National Association, as a Trustee.
First Supplemental Indenture, dated as of December 21,
2020, by and between Gannett Co., Inc., the Subsidiary
Guarantors from time to time party thereto and U.S.
Bank National Association, as trustee.
Second Supplemental Indenture, dated as of February 9,
2021, by and between Gannett Co., Inc., the Subsidiary
Guarantors from time to time party thereto and U.S.
Bank National Associations, as trustee.
Fourth Supplemental Indenture, dated as of January 31,
2022, by and among Gannett Co., Inc., the Subsidiary
Guarantors from time to time party thereto and U.S.
Bank National Association, as trustee.
Indenture with respect to 6.000% First Lien Notes due
2026, dated as of October 15, 2021, by and among
Gannett Co., Inc., Gannett Holdings LLC, the Guarantors
from time to time party thereto, U.S. Bank National
Association, as trustee, and U.S. Bank National
Association, as collateral agent, registrar, paying agent
and authenticating agent.
127
Location
Incorporated by reference to Exhibit 3.1 to the
Company's Quarterly Report on Form 10-Q, filed
August 2, 2018.
Incorporated by reference to Exhibit 3.1 to the
Company's Current Report on Form 8-K, filed
November 20, 2019.
Incorporated by reference to Exhibit 3.1 to the
Company's Current Report on Form 8-K, filed April 7,
2020.
Incorporated by reference to Exhibit 3.1 to the
Company's Current Report on Form 8-K, filed May 8,
2023.
Incorporated by reference to Exhibit 3.2 to the
Company's Current Report on Form 8-K, filed
November 20, 2019.
Incorporated by reference to Exhibit 4.1 to Legacy
Gannett's Current Report on Form 8-K, filed April 9,
2018.
Incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K, filed
November 20, 2019.
Incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K, filed
November 18, 2020.
Incorporated by reference to Exhibit 10.2 to the
Company's Current Report on Form 8-K, filed
December 22, 2020.
Incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K, filed
February 12, 2021.
Incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K, filed
February 4, 2022.
Incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K, filed October
18, 2021.
Table of Contents
Description of Securities Registered under Section 12 of
the Securities Exchange Act of 1934, as amended.
Filed herewith.
4.8
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
Credit Agreement, dated as of November 19, 2019, by
and among Gannett Co., Inc., Gannett Holdings LLC,
each person listed as a guarantor on the signature pages
thereto, the lenders from time to time party thereto and
Cortland Capital Market Services LLC, as collateral
agent and administrative agent.
Amendment No. 1, dated as of December 9, 2019, to the
Credit Agreement, by and among Gannett Co., Inc.,
Gannett Holdings LLC, each person listed as a guarantor
on the signature pages thereto, the lenders from time to
time party thereto and Cortland Capital Market Services
LLC, as collateral agent and administrative agent.
Amendment No. 2, dated as of April 6, 2020, to the
Credit Agreement, by and among Gannett Co., Inc.,
Gannett Holdings LLC, each person listed as a guarantor
on the signature pages thereto, the lenders from time to
time party thereto and Cortland Capital Market Services
LLC, as collateral agent and administrative agent.
Amendment No. 3, dated as of October 30, 2020, to the
Credit Agreement, by and among Gannett Co., Inc.,
Gannett Holdings LLC, each Guarantor party thereto, the
lenders from time to time party thereto and Alter Domus
Products Corp., as collateral and administrative agent.
Amendment No. 4, dated as of November 17, 2020, to
the Credit Agreement, by and among Gannett Co., Inc.,
Gannett Holdings LLC, each Guarantor party thereto, the
Lenders from time to time party thereto and Alter Domus
Products Corp., as collateral and administrative agent.
Amendment No. 5, dated as of December 21, 2020, to the
Credit Agreement, by and among Gannett Co., Inc.,
Gannett Holdings LLC, each Guarantor party thereto, the
lenders party thereto and Alter Domus Products Corp., as
administrative agent and collateral agent.
Registration Rights Agreement, dated as of November
19, 2019, by and among Gannett Co., Inc., FIG LLC and
such other persons from time to time party thereto.
Amendment No. 1 to Registration Rights Agreement,
dated as of November 17, 2020, by and among Gannett
Co., Inc. and FIG LLC.
10.9
10.10
Amended and Restated Management and Advisory
Agreement, dated August 5, 2019, between New Media
Investment Group Inc. and FIG LLC.
Termination Agreement, dated as of December 21, 2020,
by and between Gannett Co., Inc. and FIG LLC.
10.11
Gannett Co., Inc. 2023 Annual Bonus Plan.*†
10.12
Gannett Co., Inc. 2023 Stock Incentive Plan.*
128
Incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K, filed
November 20, 2019.
Incorporated by reference to Exhibit 10.3 to the
Company’s Quarterly Report on Form 10-Q, filed May
7, 2020.
Incorporated by reference to Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q, filed May
7, 2020.
Incorporated by reference to Exhibit 10.4 to the
Company's Annual Report on Form 10-K, filed
February 26, 2021.
Incorporated by reference to Exhibit 10.4 to the
Company's Current Report on Form 8-K, filed
November 18, 2020.
Incorporated by reference to Exhibit 10.3 to the
Company's Current Report on Form 8-K, filed
December 22, 2020.
Incorporated by reference to Exhibit 10.2 to the
Company's Current Report on Form 8-K, filed
November 20, 2019.
Incorporated by reference to Exhibit 10.3 to the
Company's Current Report on Form 8-K, filed
November 18, 2020.
Incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K, filed August
6, 2019.
Incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K, filed
December 22, 2020.
Incorporated by reference to Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q, filed May
4, 2023.
Incorporated by reference to Exhibit 99.1 to the
Company's Registration Statement on Form S-8
(Registration No. 333-272656), filed June 15, 2023.
Table of Contents
10.13
10.14
10.15
10.16
10.17
10.18
10.19
10.20
10.21
10.22
10.23
10.24
10.25
10.26
10.27
10.28
10.29
10.30
10.31
Form of Gannett Co., Inc. Director Restricted Stock
Award Agreement (2023 Stock Incentive Plan)*
2020 Omnibus Incentive Compensation Plan, adopted as
of February 26, 2020.*
Amendment No. 1 to 2020 Omnibus Incentive
Compensation Plan.*
Form of Nonqualified Stock Option Agreement between
New Media Investment Group Inc. and Fortress
Operating Entity I LP.*
Form of Nonqualified Stock Option Agreement between
New Media Investment Group Inc. and Fortress
Operating Entity I LP.
Form of Gannett Co., Inc. Director Restricted Stock
Award Agreement (2020 Omnibus Incentive
Compensation Plan, as amended).*
Gannett Co., Inc. Form of Employee Restricted Stock
Grant Agreement (2020 Omnibus Incentive
Compensation Plan, as amended).*
Form of Gannett Co., Inc. Employee Performance
Restricted Stock Unit Grant Agreement (2020 Omnibus
Incentive Compensation Plan, as amended).*
Form of Gannett Co., Inc. Employee Cash Performance
Unit Award Agreement (2020 Omnibus Incentive
Compensation Plan, as amended).*
Form of Gannett Co., Inc. Employee Restricted Stock
Grant Agreement (2020 Omnibus Incentive
Compensation Plan, as amended).*
Form of Gannett Co., Inc. Employee Long-Term Cash
Award Agreement (2020 Omnibus Incentive
Compensation Plan, as amended).*
2015 Change in Control Severance Plan, as amended and
restated as of December 23, 2020.*
Key Employee Severance Plan, as amended and restated
as of December 23, 2020.*
Form of Indemnification Agreement to be entered into by
New Media Investment Group Inc. with each of its
executive officers and directors.
Offer Letter Agreement, dated March 25, 2020, by and
between Gannett Co., Inc. and Douglas E. Horne.*
Offer Letter Agreement, dated December 21, 2020, by
and between Gannett Co., Inc. and Michael E. Reed.*
Gannett Co., Inc. Performance Restricted Stock Unit
Grant Agreement between Gannett Co., Inc. and Michael
Reed, dated as of January 8, 2021.*
Amended and Restated Performance Restricted Stock
Unit Grant Agreement between Gannett Co., Inc. and
Michael Reed, effective as of January 8, 2021.*
Employee Performance Restricted Stock Unit Grant
Agreement between Gannett Co., Inc. and Michael Reed,
effective as of January 8, 2021.*
Incorporated by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q, filed
November 2, 2023.
Incorporated by reference to Exhibit 10.3 to the
Company's Annual Report on Form 10-K, filed March
2, 2020.
Incorporated by reference to Exhibit 10.3 to the
Company's Current Report on Form 8-K, filed
December 28, 2020.
Incorporated by reference to Exhibit 10.38 of the
Company’s Annual Report on Form 10-K, filed March
19, 2014.
Attached as Exhibit A to the Amended and Restated
Management and Advisory Agreement filed as Exhibit
10.10 hereto.
Incorporated by reference to Exhibit 10.16 to the
Company's Annual Report on Form 10-K, filed
February 26, 2021.
Incorporated by reference to Exhibit 10.17 to the
Company's Annual Report on Form 10-K, filed
February 26, 2021.
Incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q, filed May
5, 2022.
Incorporated by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q, filed May
4, 2023.
Incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q, filed May
4, 2023.
Incorporated by reference to Exhibit 10.3 to the
Company's Quarterly Report on Form 10-Q, filed May
4, 2023.
Incorporated by reference to Exhibit 10.2 to the
Company's Current Report on Form 8-K, filed
December 28, 2020.
Incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K, filed
December 28, 2020.
Incorporated by reference to Exhibit 10.11 to the
Company’s Registration Statement on Form 10/A (File
No. 001-36097), filed November 8, 2013.
Incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K, filed April 6,
2020.
Incorporated by reference to Exhibit 10.50 to the
Company's Annual Report on Form 10-K, filed
February 26, 2021.
Incorporated by reference to Exhibit 99.1 to the
Company's Registration Statement on Form S-8
(Registration No. 333-251972), filed January 8, 2021.
Incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q, filed May
7, 2021.
Incorporated by reference to Exhibit 10.3 to the
Company's Quarterly Report on Form 10-Q, filed May
7, 2021.
129
Table of Contents
10.32
10.33
10.34
10.35
10.36
10.37
16.1
21.1
23.1
23.2
31.1
31.2
32.1
32.2
97.1*
Investor Agreement, dated as of November 17, 2020, by
and among Gannett Co., Inc., the other Persons signatory
thereto and such other Persons, if any, that from time to
time become party thereto as Holders.
Incorporated by reference to Exhibit 10.2 to the
Company's Current Report on Form 8-K, filed
November 18, 2020.
Credit Agreement, dated as of February 9, 2021, among
Gannett Co., Inc., Gannett Holdings LLC, each
Guarantor party thereto, the Lenders from time to time
party thereto and Citibank, N.A., as collateral and
administrative agent.
First Lien Credit Agreement, dated as of October 15,
2021, by and among Gannett Co., Inc., Gannett Holdings
LLC, each Guarantor party thereto, the Lenders from
time to time party thereto, Citibank, N.A., as collateral
agent and administrative agent for the Lenders.
Amendment No. 1, dated as of January 31, 2022, to the
First Lien Credit Agreement dated as of October 15,
2021, by and among Gannett Co., Inc., Gannett Holdings
LLC, the Guarantors from time to time party thereto, the
Lenders from time to time party thereto, and Citibank
N.A., as administrative agent and collateral agent.
Amendment No. 2, dated as of March 21, 2022, to the
First Lien Credit Agreement dated as of October 15,
2021, as amended, by and among Gannett Co., Inc.,
Gannett Holdings LLC, the Guarantors from time to time
party thereto, the Lenders from time to time party
thereto, and Citibank N.A., as administrative agent and
collateral agent.
Amendment No. 3, dated as of April 8, 2022, to the First
Lien Credit Agreement dated as of October 15, 2021, as
amended, by and among Gannett Co., Inc., Gannett
Holdings LLC, the Guarantors from time to time party
thereto, the Lenders from time to time party thereto, and
Citibank N.A., as administrative agent and collateral
agent.
Letter from Ernst & Young LLP to the Securities and
Exchange Commission dated March 13, 2023.
List of subsidiaries.
Consent of Ernst & Young LLP.
Consent of Grant Thornton LLP.
Certification of Principal Executive Officer pursuant to
Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act
of 1934.
Certification of Principal Financial Officer pursuant to
Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act
of 1934.
Section 1350 Certification of Principal Executive
Officer.
Section 1350 Certification of Principal Financial Officer.
Gannett Co., Inc. Policy for the Recovery of Erroneously
Awarded Compensation.
Incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K, filed
February 12, 2021.
Incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K, filed October
18, 2021.
Incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K, filed
February 4, 2022.
Incorporated by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q, filed
August 4, 2022.
Incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q, filed
August 4, 2022.
Incorporated by reference to Exhibit 16.1 to the
Company's Current Report on Form 8-K, filed March
13, 2023.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
Furnished herewith.
Furnished herewith.
Filed herewith.
130
Table of Contents
101
104
The following financial information from Gannett Co.,
Inc. Annual Report on Form 10-K for the year ended
December 31, 2023, formatted in Inline XBRL includes:
(i) Consolidated Balance Sheets; (ii) Consolidated
Statements of Operations and Comprehensive Income
(Loss); (iii) Consolidated Statements of Cash Flows; (iv)
Consolidated Statements of Equity; and (v) the Notes to
Consolidated Financial Statements.
Cover Page Interactive Data File (formatted as Inline
XBRL and contained in Exhibit 101).
Filed herewith.
Filed herewith.
* Management contract or compensatory plan or arrangement.
†
Portions of this exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K.
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.
ITEM 16. FORM 10-K SUMMARY
None.
131
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 22, 2024 GANNETT CO., INC. (Registrant)
By:
/s/ Douglas E. Horne
Douglas E. Horne
Chief Financial Officer
(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 22, 2024
/s/ Theodore Janulis
Theodore Janulis, Director
Dated: February 22, 2024
/s/ John Jeffry Louis
John Jeffry Louis, Director
Dated: February 22, 2024
/s/ Maria Miller
Maria Miller, Director
Dated: February 22, 2024
/s/ Michael E. Reed
Michael E. Reed
Director, Chairman
Dated: February 22, 2024
Dated: February 22, 2024
Dated: February 22, 2024
/s/ Michael E. Reed
Michael E. Reed
Chief Executive Officer and
President (principal executive
officer)
/s/ Douglas E. Horne
Douglas E. Horne
Chief Financial Officer
(principal financial officer)
/s/ Cindy Gallagher
Cindy Gallagher
Chief Accounting Officer
(principal accounting officer)
Dated: February 22, 2024
/s/ Debra Sandler
Debra Sandler, Director
Dated: February 22, 2024
/s/ Kevin Sheehan
Kevin Sheehan, Director
Dated: February 22, 2024
/s/ Laurence Tarica
Laurence Tarica, Director
Dated: February 22, 2024
/s/ Barbara Wall
Barbara Wall, Director
Dated: February 22, 2024
/s/ Amy Reinhard
Amy Reinhard, Director
132
Performance Graph
The following graph compares the cumulative total return for our common stock (stock price plus reinvested
dividends, if any) with the comparable return of the S&P 600, the Russell 2000, and the S&P 1500 Publishing
& Printing index. The graph assumes an investment of $100 in Gannett’s common stock and in each of the
indices on December 31, 2018, and that all dividends, if any, were reinvested. The past performance of
Gannett’s common stock is not an indication of future performance.
Gannett Co., Inc.
Gannett Co., Inc.
Gannett Co., Inc.
Gannett Co., Inc.
Total Return Performance
Total Return Performance
250
250
Gannett Co., Inc.
Gannett Co., Inc.
Russell 2000 Index
Russell 2000 Index
200
200
S&P 600 Index
S&P 600 Index
S&P 1500 Publishing & Printing Index
S&P 1500 Publishing & Printing Index
150
150
100
100
)
$
(
)
$
(
e
u
e
u
l
a
V
x
e
d
n
l
a
V
x
e
d
n
I
I
50
50
0
12/31/18
0
12/31/18
12/31/19
12/31/19
12/31/20
12/31/20
12/31/21
12/31/21
12/31/22
12/31/22
12/31/23
12/31/23
Period Ending
Period Ending
12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23
12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23
23.29
100.00
23.29
160.85
100.00
160.85
168.73
100.00
168.73
174.98
100.00
174.98
53.96
53.96
172.90
172.90
173.29
173.29
172.08
172.08
34.02
34.02
150.58
150.58
136.64
136.64
138.94
138.94
64.59
64.59
125.53
125.53
122.78
122.78
115.11
115.11
20.55
20.55
137.56
137.56
145.39
145.39
130.79
130.79
100.00
100.00
100.00
100.00
Index
Index
Gannett Co., Inc.
Gannett Co., Inc.
Russell 2000 Index
Russell 2000 Index
S&P 600 Index
S&P 600 Index
S&P 1500 Publishing & Printing Index
S&P 1500 Publishing & Printing Index
Source: S&P Global Market Intelligence
©2024
Board of Directors
Michael E. Reed – Chairman, Chief Executive Officer and President, Gannett Co., Inc.
Kevin M. Sheehan – Lead Director(a), (b), (e) – Chairman, Dave & Buster’s Entertainment, Inc.
Theodore P. Janulis(a), (b), (c) – Founder and Principal, Investable Oceans
John Jeffry Louis III(b), (c), (e) – Co-Founder and Former Chairman, Parson Capital Corporation
Maria M. Miller(a), (c), (e) – Former Chief Marketing Officer, Bahamas Paradise Cruise Line
Amy Reinhard(a), (d) – President of Advertising, Netflix, Inc.
Debra A. Sandler(c), (d) – President and Chief Executive Officer, La Grenade Group, LLC
Laurence Tarica(c), (d) – Former President and Chief Operating Officer, Jimlar Corporation
Barbara W. Wall(d) – Former Chief Legal Officer, Gannett Media Corp.
Key:
(a) Member of Audit Committee
(b) Member of Compensation Committee
(c) Member of Nominating and Corporate Governance Committee
(d) Member of Transformation Committee
(e) Member of the Share Repurchase Committee
Corporate Officers
Michael E. Reed – Chief Executive Officer and President
Douglas E. Horne – Chief Financial Officer
Corporate Headquarters
Gannett Co., Inc.
1675 Broadway, 23rd Floor
New York, NY 10019
Tel: 703-854-6000
www.gannett.com
Independent Registered Public Accounting Firm
Grant Thornton LLP
757 Third Avenue
New York, NY 10017
Shareholder Services, Transfer Agent & Registrar
Equiniti Trust Company, LLC
55 Challenger Road, 2nd Floor
Ridgefield Park, NJ 07660
Tel: 800-937-5449
Stock Exchange Listing
Gannett Co., Inc. is listed on the New York Stock Exchange (NYSE:GCI)
Investor Information Services
Gannett Co., Inc.
1675 Broadway, 23rd Floor
New York, NY 10019
Tel: 703-854-3000
Email: investors@gannett.com
Corporate Information
We invite you to learn more about Gannett’s business at investors.gannett.com. Our investor relations
site includes an electronic version of this report, investor presentations, earnings conference calls, press
releases, SEC filings, Company history, and information about the Company’s governance and Board of
Directors.
Gannett Co., Inc.
1675 Broadway, 23rd Floor
New York, NY 10019
703-854-3000
gannett.com