Financial Data and Key Metrics Changes - Total operating revenues for Q3 2022 were $717.9 million, a decrease of 10.3% year-over-year, with same-store revenues down 9% [42] - Adjusted EBITDA totaled $51.9 million, down 49.1% year-over-year, with an adjusted EBITDA margin of 7.2% compared to 12.8% in the prior quarter [44] - The net loss attributable to Gannett was $54.1 million, which included significant depreciation and amortization costs [48] Business Line Data and Key Metrics Changes - Digital revenues accounted for approximately 36% of total revenue, totaling $256.4 million, a decrease of 2.3% year-over-year on a same-store basis [49] - Digital-only circulation revenue grew 35.4% year-over-year to $34.5 million, with ARPU increasing approximately 2% [50] - Digital marketing solutions revenue reached a record high of $120 million, up 3.4% year-over-year, with adjusted EBITDA for the segment at $15.7 million, reflecting a strong margin of 13.1% [51][52] Market Data and Key Metrics Changes - The company ended Q3 with 1.98 million paid digital-only subscribers, representing nearly 30% year-over-year growth, surpassing 2 million in October [16] - The average monthly unique visitors reached 178 million, with 126 million from the USA TODAY network [20] Company Strategy and Development Direction - The company is focused on digital transformation, shifting from legacy print to more stable recurring digital revenue streams [14] - Cost control initiatives are being implemented to improve adjusted EBITDA and margins, with a target of $200 million to $240 million in annualized cost savings [58][36] - Partnerships with brands like the Weather Channel and T-Mobile are being pursued to expand audience and monetization opportunities [24] Management's Comments on Operating Environment and Future Outlook - Management noted that while the macro environment remains challenging, there are signs of stabilization and improvement in trends compared to Q2 [8] - The company expects significant improvements in adjusted EBITDA and total revenue in Q4, driven by recent cost actions [62] - The target for revenue stabilization and growth is set for 2024, with confidence in achieving this goal [72] Other Important Information - The company has repaid $130 million of debt year-to-date and is on track to repay $150 million to $200 million by the end of 2022 [18] - A significant pension liability transfer was executed, which is expected to yield approximately $20 million in future savings [57] Q&A Session Summary Question: Have inflationary cost pressures seen any mitigation? - Management noted slight improvements in fuel costs but continued increases in distribution costs due to investments in route coverage [66] Question: Are the cost reduction efforts primarily about outsourcing? - Management confirmed that outsourcing is a significant part of the strategy, along with internal process improvements [67] Question: When does the company expect to achieve flattish organic growth? - The target for achieving revenue stabilization and growth is set for 2024 [72] Question: Is the $29 million inflationary impact year-over-year or sequential? - Management clarified that the $29 million is a year-over-year impact [73] Question: How does the company view broader inflation pressures? - Management expressed that stabilization has been seen across most categories, with no significant further increases expected at present [75]

Part I. Financial Information [ITEM 1. Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) This section presents Gannett's unaudited condensed consolidated financial statements and detailed notes for the periods ended September 30, 2022, and December 31, 2021 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$2.48 billion**, liabilities to **$2.17 billion**, and equity to **$313.1 million** by September 30, 2022, from December 31, 2021 | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | | :-------------------- | :----------- | :----------- | | Total Assets | $2,481,652 | $2,828,069 | | Total Liabilities | $2,168,517 | $2,298,454 | | Total Equity | $313,135 | $529,615 | - Cash and cash equivalents decreased from **$130,756 thousand** at December 31, 2021, to **$124,867 thousand** at September 30, 2022[12](index=12&type=chunk) - Accounts receivable, net, decreased from **$328,733 thousand** to **$270,440 thousand**[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) The company reported a net loss of **$54.1 million** for Q3 2022 and **$110.9 million** for the nine months, with total operating revenues declining due to advertising and circulation decreases | Metric (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Operating Revenues | $717,902 | $800,185 | $2,214,639 | $2,381,544 | | Operating Income (Loss) | $(25,143) | $31,102 | $(48,345) | $84,488 | | Net Income (Loss) | $(54,122) | $14,545 | $(110,924) | $(113,447) | | Diluted EPS | $(0.39) | $0.09 | $(0.81) | $(0.84) | - Advertising and marketing services revenue decreased by **12%** for the three months ended September 30, 2022, and by **8%** for the nine months ended September 30, 2022, compared to the prior year periods[14](index=14&type=chunk) - Circulation revenue decreased by **14%** for the three months and **12%** for the nine months ended September 30, 2022, year-over-year[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased to **$33.0 million** for the nine months ended September 30, 2022, while financing cash outflow significantly reduced due to lower debt repayments | Metric (in thousands) | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | | Operating Activities | $32,982 | $133,347 | | Investing Activities | $19,081 | $39,236 | | Financing Activities | $(58,044) | $(212,284) | | Decrease in Cash | $(7,428) | $(39,312) | - The decrease in operating cash flow was primarily due to lower cash receipts related to deferred revenues (**$35.3 million** decrease), an increase in taxes paid (**$11.8 million** increase), and the absence of **$16.4 million** in PPP funding received in 2021[215](index=215&type=chunk) - Cash used for financing activities decreased due to lower net repayments under term loans (**$163.5 million** decrease) and a **$33.0 million** decrease in deferred financing costs payments[217](index=217&type=chunk) [Condensed Consolidated Statements of Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Total equity declined to **$313.1 million** by September 30, 2022, primarily due to a net loss of **$110.8 million** and other comprehensive loss of **$107.8 million** | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | | :-------------------- | :----------- | :----------- | | Total Equity | $313,135 | $529,615 | | Accumulated Deficit | $(1,032,168) | $(921,399) | | Accumulated Other Comprehensive (Loss) Income | $(47,803) | $59,998 | - Net loss attributable to Gannett for the nine months ended September 30, 2022, was **$110,769 thousand**[19](index=19&type=chunk) - Other comprehensive loss, net of tax, for the nine months ended September 30, 2022, was **$107,801 thousand**, primarily due to foreign currency translation adjustments and pension/postretirement benefit items[19](index=19&type=chunk)[107](index=107&type=chunk) [NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=10&type=section&id=NOTES%20TO%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed explanations of financial statements, covering business, accounting policies, revenue, assets, debt, pensions, taxes, equity, and segment reporting [NOTE 1 — Description of business and basis of presentation](index=10&type=section&id=NOTE%201%20%E2%80%94%20Description%20of%20business%20and%20basis%20of%20presentation) Gannett, a subscription-led media and marketing solutions company, restructured its U.S. operations, facing ongoing negative impacts from the COVID-19 pandemic - Gannett is a subscription-led and digitally-focused media and marketing solutions company[21](index=21&type=chunk) - Strategic organizational restructuring in June 2022 centralized U.S. operations within Gannett Media and Digital Marketing Solutions (DMS)[22](index=22&type=chunk) - The COVID-19 pandemic continues to negatively impact Advertising and marketing services revenues and Circulation revenues, particularly single-copy newspapers and event attendance[25](index=25&type=chunk) [NOTE 2 — Revenues](index=11&type=section&id=NOTE%202%20%E2%80%94%20Revenues) Total operating revenues decreased by **10%** for Q3 and **7%** for the nine months, driven by declines in print advertising and circulation, despite growth in other revenues | Revenue Type (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Print advertising | $159,324 | $190,044 | $506,295 | $584,165 | | Digital advertising and marketing services | $202,523 | $221,976 | $614,275 | $636,322 | | Circulation | $264,732 | $306,702 | $827,958 | $942,398 | | Other | $91,323 | $81,463 | $266,111 | $218,659 | | Total revenues | $717,902 | $800,185 | $2,214,639 | $2,381,544 | - International revenues were approximately **9.6%** and **9.4%** of total revenues for the three and nine months ended September 30, 2022, respectively, an increase from **7.9%** and **7.7%** in the prior year periods[34](index=34&type=chunk) - Deferred revenues primarily consist of circulation subscriptions paid in advance, expected to be recognized over the next one to twelve months[35](index=35&type=chunk) [NOTE 3 — Accounts receivable, net](index=12&type=section&id=NOTE%203%20%E2%80%94%20Accounts%20receivable%2C%20net) Allowance for doubtful accounts decreased to **$12.1 million**, while bad debt expense increased to **$5.1 million** for the nine months due to higher write-offs | Metric (in thousands) | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | | Beginning balance | $16,470 | $20,843 | | Current period provision | $5,074 | $3,478 | | Write-offs | $(13,149) | $(10,998) | | Ending balance | $12,056 | $16,411 | - Bad debt expense for the nine months ended September 30, 2022, was **$5.1 million**, an increase from **$3.5 million** in the prior year, driven by increased write-offs and reserves for circulation revenue[40](index=40&type=chunk) [NOTE 4 — Goodwill and intangible assets](index=13&type=section&id=NOTE%204%20%E2%80%94%20Goodwill%20and%20intangible%20assets) Total intangible assets decreased to **$638.3 million**, while goodwill slightly increased; impairment assessment showed no impairment but reduced headroom for Domestic Gannett Media | Asset Type (in thousands) | Sep 30, 2022 (Net) | Dec 31, 2021 (Net) | | :------------------------ | :----------------- | :----------------- | | Finite-lived intangible assets | $471,232 | $544,955 | | Indefinite-lived intangible assets (Mastheads) | $167,105 | $168,198 | | Total Intangible Assets | $638,337 | $713,153 | | Goodwill | $537,898 | $533,709 | - The excess of fair value over carrying value for the Domestic Gannett Media reporting unit decreased from **126%** in 2021 to **22%** in 2022, indicating reduced headroom[43](index=43&type=chunk) - No impairment indicators were present as of September 30, 2022, but adverse changes in macroeconomic factors or market conditions could lead to future declines in fair value[45](index=45&type=chunk)[46](index=46&type=chunk) [NOTE 5 — Integration and reorganization costs and asset impairments](index=14&type=section&id=NOTE%205%20%E2%80%94%20Integration%20and%20reorganization%20costs%20and%20asset%20impairments) Integration and reorganization costs significantly increased to **$33.3 million** for Q3 and **$60.5 million** for the nine months, driven by severance and facility consolidation | Cost Type (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :----------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Severance-related expenses | $15,737 | $2,660 | $32,734 | $10,886 | | Facility consolidation and other restructuring-related expenses | $17,574 | $10,959 | $27,720 | $24,581 | | Total Integration and reorganization costs | $33,311 | $13,619 | $60,454 | $35,467 | - The increase in facility consolidation costs for Gannett Media was due to a withdrawal liability from a multiemployer pension plan and expenses from exiting a lease[50](index=50&type=chunk) - Accelerated depreciation related to print facility closures was **$0.3 million** for the three months and **$10.5 million** for the nine months ended September 30, 2022[51](index=51&type=chunk) [NOTE 6 — Debt](index=16&type=section&id=NOTE%206%20%E2%80%94%20Debt) Total debt decreased to **$1.20 billion**; the New Senior Secured Term Loan had a **6.4%** effective rate, and **$37.0 million** of 2026 Senior Notes were repurchased | Debt Type (in millions) | Sep 30, 2022 (Carrying Value) | Dec 31, 2021 (Carrying Value) | | :---------------------- | :---------------------------- | :---------------------------- | | New Senior Secured Term Loan | $455.7 | $463.3 | | 2026 Senior Notes | $344.3 | $375.6 | | 2027 Notes | $399.2 | $390.1 | | 2024 Notes | $3.3 | $3.3 | | Total Debt | $1,202.5 | $1,232.3 | - The New Senior Secured Term Loan had an effective interest rate of **6.4%** as of September 30, 2022, and **$92.2 million** in prepayments were made during the nine months ended September 30, 2022[59](index=59&type=chunk)[222](index=222&type=chunk) - For the nine months ended September 30, 2022, **$37.0 million** of 2026 Senior Notes principal was repurchased, resulting in a **$0.4 million** loss on early extinguishment of debt[67](index=67&type=chunk)[228](index=228&type=chunk) - The 2027 Notes had an effective interest rate of **10.5%** as of September 30, 2022[79](index=79&type=chunk)[241](index=241&type=chunk) [NOTE 7 — Pensions and other postretirement benefit plans](index=19&type=section&id=NOTE%207%20%E2%80%94%20Pensions%20and%20other%20postretirement%20benefit%20plans) Non-operating pension income decreased due to lower asset returns; a **$450 million** pension liability transfer reduced net funded obligation by **$99.9 million** | Metric (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Non-operating pension income | $(14,990) | $(23,860) | $(51,363) | $(71,644) | | Total expense (benefit) for retirement plans | $(14,837) | $(23,785) | $(50,892) | $(71,429) | - On August 31, 2022, Gannett Media Corp. transferred approximately **$450 million** of GR Plan pension liabilities and related assets to insurers, resulting in a **$99.9 million** decrease in net funded pension obligation[85](index=85&type=chunk) - A noncash pension settlement gain of **$0.7 million** (**$0.5 million** after tax) was recognized for the GR Plan for the quarter ended September 30, 2022[85](index=85&type=chunk) [NOTE 8 — Fair value measurement](index=21&type=section&id=NOTE%208%20%E2%80%94%20Fair%20value%20measurement) Fair value measurements primarily cover pension assets and debt, with most debt classified as Level 2, 2027 Notes equity as Level 3, and **$0.6 million** in assets held for sale - Assets and liabilities recorded at fair value on a recurring basis primarily consist of pension plan assets, for which NAV is used as a practical expedient[89](index=89&type=chunk) - The New Senior Secured Term Loan and 2026 Senior Notes are classified as Level 2 for fair value measurement[57](index=57&type=chunk)[65](index=65&type=chunk) - The equity component of the 2027 Notes is classified as Level 3 due to significant unobservable inputs[78](index=78&type=chunk) - Assets held for sale (Level 3) totaled **$0.6 million** as of September 30, 2022[91](index=91&type=chunk) [NOTE 9 — Income taxes](index=21&type=section&id=NOTE%209%20%E2%80%94%20Income%20taxes) Pre-tax losses of **$36.0 million** for Q3 and **$78.3 million** for nine months resulted in negative effective tax rates due to valuation allowances and GILTI inclusion | Metric (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Income (loss) before income taxes | $(36,024) | $17,529 | $(78,275) | $(101,880) | | Provision for income taxes | $18,098 | $2,984 | $32,649 | $11,567 | | Effective tax rate | (50.2)% | 17.0% | (41.7)% | (11.4)% | - The provision for income taxes in 2022 was mainly driven by valuation allowances on non-deductible interest expense carryforwards and global intangible low-taxed income inclusion[92](index=92&type=chunk)[93](index=93&type=chunk) - Unrecognized tax benefits that could impact the effective tax rate were approximately **$43.2 million** as of September 30, 2022[94](index=94&type=chunk) [NOTE 10 — Supplemental equity information](index=22&type=section&id=NOTE%2010%20%E2%80%94%20Supplemental%20equity%20information) Diluted loss per share was **$0.39** for Q3 and **$0.81** for nine months; **$3.1 million** was used to repurchase **800 thousand** shares under the **$100 million** program | Metric (in thousands, except per share) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income (loss) attributable to Gannett | $(54,114) | $14,687 | $(110,769) | $(112,514) | | Diluted weighted average shares outstanding | 137,008 | 239,453 | 136,857 | 134,610 | | Diluted income (loss) per share | $(0.39) | $0.09 | $(0.81) | $(0.84) | - Share-based compensation expense was **$4.5 million** for the three months and **$13.3 million** for the nine months ended September 30, 2022[100](index=100&type=chunk) - During the nine months ended September 30, 2022, **800 thousand** shares of Common Stock were repurchased for approximately **$3.1 million** under the Stock Repurchase Program, with **$96.9 million** remaining authorized[106](index=106&type=chunk) [NOTE 11 — Commitments, contingencies and other matters](index=24&type=section&id=NOTE%2011%20%E2%80%94%20Commitments%2C%20contingencies%20and%20other%20matters) Gannett is involved in various legal proceedings, but management does not expect a material adverse effect on financial position or results of operations - The Company is involved in legal proceedings such as libel, invasion of privacy, intellectual property infringement, wrongful termination, and regulatory investigations[108](index=108&type=chunk) - Management does not expect current and threatened legal proceedings to have a material adverse effect on the Company's business, financial position, or consolidated results of operations[109](index=109&type=chunk) [NOTE 12 — Segment reporting](index=24&type=section&id=NOTE%2012%20%E2%80%94%20Segment%20reporting) Gannett operates in Gannett Media and DMS segments, using Adjusted EBITDA; consolidated Adjusted EBITDA for Q3 2022 was **$51.9 million** (**7.2%** margin) - Reportable segments are Gannett Media and Digital Marketing Solutions (DMS)[110](index=110&type=chunk)[111](index=111&type=chunk) - Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures used by the CODM to evaluate segment performance and allocate resources[113](index=113&type=chunk) | Metric (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Consolidated Adjusted EBITDA | $51,909 | $102,067 | $166,931 | $318,301 | | Consolidated Adjusted EBITDA margin | 7.2% | 12.8% | 7.5% | 13.4% | [NOTE 13 — Other supplemental information](index=27&type=section&id=NOTE%2013%20%E2%80%94%20Other%20supplemental%20information) Total cash and equivalents decreased to **$136.2 million**; cash paid for interest was **$51.0 million**, and accounts payable totaled **$342.8 million** | Metric (in thousands) | Sep 30, 2022 | Sep 30, 2021 | | :-------------------- | :----------- | :----------- | | Cash and cash equivalents | $124,867 | $141,302 | | Restricted cash | $11,324 | $26,112 | | Total cash, cash equivalents and restricted cash | $136,191 | $167,414 | | Metric (in thousands) | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | | Cash paid for taxes, net of refunds | $2,726 | $(9,031) | | Cash paid for interest | $51,021 | $80,280 | | Accounts Payable and Accrued Liabilities (in thousands) | Sep 30, 2022 | Dec 31, 2021 | | :-------------------------------------- | :----------- | :----------- | | Accounts payable | $162,646 | $157,257 | | Compensation | $86,596 | $107,585 | | Total Accounts payable and accrued liabilities | $342,815 | $357,014 | [NOTE 14 — Subsequent events](index=28&type=section&id=NOTE%2014%20%E2%80%94%20Subsequent%20events) In October 2022, Gannett agreed to repurchase **$17.8 million** of 2026 Senior Notes, expecting a **$3.0 million** gain on early extinguishment of debt - In October 2022, the Company agreed to repurchase **$17.8 million** of 2026 Senior Notes at **78.0%** of par value[126](index=126&type=chunk) - This transaction is expected to result in a gain on early extinguishment of debt of approximately **$3.0 million** in the fourth quarter of 2022[126](index=126&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Gannett's financial condition and operations, covering business overview, trends, strategic outlook, and segment performance amidst print-to-digital shifts and macroeconomic challenges - Gannett is a subscription-led and digitally-focused media and marketing solutions company[129](index=129&type=chunk) - Strategic organizational restructuring in June 2022 centralized U.S. operations within Gannett Media and Digital Marketing Solutions (DMS)[130](index=130&type=chunk) - Key business trends include declining print advertising and circulation, a complex digital marketing environment for SMBs, and increased costs due to inflation[133](index=133&type=chunk)[138](index=138&type=chunk) [OVERVIEW](index=29&type=section&id=OVERVIEW) Gannett, a subscription-led media company, restructured its operations, facing declining print revenues and inflation, while focusing on digital growth and strategic investments [Business Trends](index=29&type=section&id=Business%20Trends) Print advertising and circulation revenues continue to decline, digital marketing faces reduced demand, and the company experiences constrained newsprint and inflationary cost pressures - Print advertising and circulation revenues continue to decline, with an accelerated rate in Q2 and Q3 2022 due to macroeconomic factors and consumer price sensitivity[133](index=133&type=chunk) - Digital Marketing Solutions segment experienced longer sales cycles and reduced demand for digital advertising in Q3 2022 due to a challenging macroeconomic environment[133](index=133&type=chunk) - Newsprint availability is constrained, and inflationary prices across labor, fuel, delivery, newsprint, ink, and printing plates are negatively impacting the cost structure[138](index=138&type=chunk) [Recent Developments](index=30&type=section&id=Recent%20Developments) Recent developments include a **$17.8 million** debt repurchase, a **$450 million** pension liability transfer, and **$3.1 million** in stock repurchases under the **$100 million** program - Debt Repurchase: In October 2022, the Company repurchased **$17.8 million** of 2026 Senior Notes at **78.0%** of par, expecting a **$3.0 million** gain on early extinguishment of debt[135](index=135&type=chunk) - Pension Annuity Contract: On August 31, 2022, **$450 million** of pension liabilities and assets were transferred to insurers, decreasing net funded pension obligation by **$99.9 million** and recognizing a **$0.7 million** noncash pension settlement gain[136](index=136&type=chunk) - Stock Repurchase Program: **800 thousand** shares of Common Stock were repurchased for approximately **$3.1 million** during the nine months ended September 30, 2022, with **$96.9 million** remaining authorized[138](index=138&type=chunk) [Environmental, Social and Governance Initiatives](index=31&type=section&id=Environmental%2C%20Social%20and%20Governance%20Initiatives) Gannett formalized its ESG strategy in 2021, aligning with U.N. SDGs, focusing on Reduced Inequalities, Climate Action, and Peace, Justice & Strong Institutions - Gannett formed an executive-led, cross-functional committee in 2021 to formalize an ESG strategy[139](index=139&type=chunk) - Key ESG priorities are Reduced Inequalities, Climate Action, and Peace, Justice & Strong Institutions, aligning with U.N. Sustainable Development Goals[140](index=140&type=chunk) [Certain matters affecting comparability](index=31&type=section&id=Certain%20matters%20affecting%20comparability) Increased integration and reorganization costs, accelerated depreciation, and foreign currency headwinds negatively impacted comparability and profitability in 2022 - Integration and reorganization costs were **$33.3 million** for Q3 2022 and **$60.5 million** for the nine months, including severance and facility consolidation expenses[141](index=141&type=chunk) - Accelerated depreciation from printing facility closures was **$0.3 million** for Q3 2022 and **$10.5 million** for the nine months[142](index=142&type=chunk) - Foreign currency headwinds, particularly the strengthening U.S. dollar, negatively impacted revenues and profitability from U.K. operations[143](index=143&type=chunk) [Outlook for 2022](index=31&type=section&id=Outlook%20for%202022) Gannett's 2022 outlook focuses on accelerating digital subscriber and marketing services growth, optimizing traditional businesses, and investing in new ventures to become a subscription-led platform - Strategic focus areas include accelerating digital subscriber growth, driving digital marketing services growth, optimizing traditional print and advertising, and prioritizing investments in growth businesses[145](index=145&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk) - USA TODAY NETWORK Ventures hosted **65 events** in Q3 2022 and **152 events** for the nine months, with event revenues decreasing **9.9%** in Q3 but expected to increase for the full year[148](index=148&type=chunk) [Macroeconomic Environment](index=32&type=section&id=Macroeconomic%20Environment) Increased macroeconomic volatility, including inflation and interest rates, negatively impacted advertising revenues, consumer spending, and increased operating costs for Gannett - Increased volatility in U.S. and global economies due to inflation, interest rates, supply chain disruptions, and foreign currency fluctuations[150](index=150&type=chunk) - Adversely impacted advertising revenues and reduced demand for print and digital advertising in Q2 and Q3 2022[150](index=150&type=chunk)[151](index=151&type=chunk) - Increased consumer price sensitivity, labor shortages, and delivery challenges negatively impacted print circulation volumes[152](index=152&type=chunk) - Higher costs associated with labor, newsprint, delivery, ink, printing plates, fuel, and utilities, along with exposure to rising interest rates[153](index=153&type=chunk) [Impacts of the COVID-19 pandemic](index=33&type=section&id=Impacts%20of%20the%20COVID-19%20pandemic) The COVID-19 pandemic accelerated declines in advertising revenues and continues to negatively impact event attendance and single-copy newspaper sales - COVID-19 pandemic initially caused a significant decline in Advertising and marketing services revenues, accelerating secular declines[155](index=155&type=chunk) - Ongoing negative impact on revenues and attendance associated with events and lower sales of single-copy newspapers due to changes in consumer behavior[155](index=155&type=chunk) [Seasonality](index=33&type=section&id=Seasonality) Gannett's revenues are moderately seasonal, typically peaking in Q4, but Q2 and Q3 2022 advertising revenues were adversely impacted by economic uncertainty - Revenues are subject to moderate seasonality, with advertising and marketing services revenues typically highest in the fourth quarter due to holiday fluctuations[156](index=156&type=chunk) - Uncertain economic conditions in Q2 and Q3 2022 adversely impacted advertising revenues, leading to reduced demand and rates[156](index=156&type=chunk) [RESULTS OF OPERATIONS](index=34&type=section&id=RESULTS%20OF%20OPERATIONS) Consolidated operating revenues decreased by **10%** for Q3 and **7%** for nine months, resulting in net losses, with Gannett Media declining and Digital Marketing Solutions growing | Metric (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Operating Revenues | $717,902 | $800,185 | $2,214,639 | $2,381,544 | | Operating Income (Loss) | $(25,143) | $31,102 | $(48,345) | $84,488 | | Net Income (Loss) attributable to Gannett | $(54,114) | $14,687 | $(110,769) | $(112,514) | - Print advertising revenues decreased by **16%** for the three months and **13%** for the nine months, while digital advertising and marketing services decreased by **9%** and **3%** respectively[158](index=158&type=chunk) - Circulation revenues declined by **14%** for the three months and **12%** for the nine months[158](index=158&type=chunk) [Consolidated Summary](index=34&type=section&id=Consolidated%20Summary) Total operating revenues decreased by **10%** for Q3 and **7%** for nine months, leading to operating and net losses, with non-operating expenses significantly lower due to prior year derivative loss absence | Metric (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Operating Revenues | $717,902 | $800,185 | $2,214,639 | $2,381,544 | | Operating Income (Loss) | $(25,143) | $31,102 | $(48,345) | $84,488 | | Net Income (Loss) attributable to Gannett | $(54,114) | $14,687 | $(110,769) | $(112,514) | - Non-operating expenses decreased by **84%** for the nine months ended September 30, 2022, primarily due to the absence of a **$126.6 million** loss on convertible notes derivative in the prior year[158](index=158&type=chunk)[166](index=166&type=chunk) - Interest expense decreased due to a lower debt balance and lower interest rates on fixed-rate debt[163](index=163&type=chunk) [Segment Results](index=38&type=section&id=Segment%20Results) Gannett Media revenues and Adjusted EBITDA declined significantly, while Digital Marketing Solutions saw revenue and Adjusted EBITDA growth driven by core direct business and local markets [Gannett Media segment](index=38&type=section&id=Gannett%20Media%20segment) Gannett Media's revenues decreased by **12%** for Q3 and **8%** for nine months, with print and digital media declines, but digital-only circulation grew by **34%** and Adjusted EBITDA fell significantly | Metric (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Operating Revenues | $633,006 | $715,807 | $1,968,269 | $2,139,937 | | Operating Income (Loss) | $(6,087) | $58,246 | $19,471 | $170,891 | | Adjusted EBITDA | $46,023 | $101,001 | $165,527 | $317,398 | - Print advertising revenues decreased by **16%** for the three months and **13%** for the nine months, driven by secular trends and macroeconomic factors[174](index=174&type=chunk) - Digital-only circulation revenues increased by **34%** for the three months and **33%** for the nine months, driven by a **28.5%** increase in paid digital-only subscribers to approximately **1.98 million**[178](index=178&type=chunk) [Digital Marketing Solutions segment](index=43&type=section&id=Digital%20Marketing%20Solutions%20segment) DMS segment revenues increased by **3%** for Q3 and **6%** for nine months, driven by client growth and ARPU, with operating income and Adjusted EBITDA also showing increases | Metric (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Operating Revenues | $120,049 | $116,771 | $347,771 | $329,089 | | Operating Income | $8,005 | $6,198 | $19,584 | $12,377 | | Adjusted EBITDA | $15,690 | $15,024 | $41,176 | $36,725 | - Advertising and marketing services revenues increased due to growth in the core direct business and local markets, partially offset by the sunset of non-core products[197](index=197&type=chunk) - Operating costs increased due to higher expenses associated with third-party media fees, driven by corresponding revenue growth[199](index=199&type=chunk) [Corporate and other category](index=46&type=section&id=Corporate%20and%20other%20category) Corporate and other operating revenues decreased, while operating expenses also declined due to lower professional fees, compensation, and integration costs | Metric (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Operating revenues | $1,328 | $1,649 | $4,042 | $6,428 | | Operating costs | $2,372 | $6,039 | $2,589 | $14,534 | | Selling, general and administrative expenses | $13,524 | $15,222 | $57,738 | $43,386 | - Operating expenses decreased primarily due to lower professional fees, reduced compensation and benefits, and a decrease in integration and reorganization costs[209](index=209&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=48&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Operating cash flow significantly decreased to **$33.0 million**, while financing cash outflow reduced; the company plans to meet liquidity needs through operations and cost reductions, facing leverage risks | Cash Flow (in thousands) | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :----------------------- | :-------------------------- | :-------------------------- | | Operating activities | $32,982 | $133,347 | | Investing activities | $19,081 | $39,236 | | Financing activities | $(58,044) | $(212,284) | - Decrease in operating cash flow primarily due to lower cash receipts related to deferred revenues (**$35.3 million**), increased taxes paid (**$11.8 million**), and absence of **$16.4 million** PPP funding from 2021[215](index=215&type=chunk) - Capital expenditures for the remainder of 2022 are expected to be approximately **$9.5 million**, focused on digital product development, print/technology systems, and system upgrades[247](index=247&type=chunk) - The company's leverage may adversely affect its business and financial performance, restricting operating flexibility and cash flow for corporate purposes[249](index=249&type=chunk) [CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES](index=53&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20USE%20OF%20ESTIMATES) No material changes to critical accounting policies and estimates have occurred since the December 31, 2021 Annual Report on Form 10-K - No material changes to critical accounting policies and use of estimates since the December 31, 2021 Annual Report on Form 10-K[251](index=251&type=chunk) [NON-GAAP FINANCIAL MEASURES](index=53&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) Gannett uses Adjusted EBITDA and Adjusted EBITDA margin as non-GAAP measures to evaluate operating performance, excluding non-operating and non-cash items, with limitations acknowledged - Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures used to evaluate overall business operations[253](index=253&type=chunk) - Adjusted EBITDA excludes items such as income tax, interest expense, gains/losses on debt extinguishment, non-operating pension income, depreciation and amortization, integration and reorganization costs, asset impairments, and share-based compensation[253](index=253&type=chunk) | Metric (in thousands) | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income (loss) attributable to Gannett | $(54,114) | $14,687 | $(110,769) | $(112,514) | | Adjusted EBITDA | $51,909 | $102,067 | $166,931 | $318,301 | | Adjusted EBITDA margin | 7.2% | 12.8% | 7.5% | 13.4% | [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Gannett faces market risks from interest rate and foreign currency fluctuations, with **$467.9 million** in variable-rate debt and a **$35.8 million** cumulative foreign currency translation loss - Exposed to market risk from changes in interest rates and foreign currency exchange rates[260](index=260&type=chunk) - As of September 30, 2022, variable-rate debt totaled **$467.9 million** (New Senior Secured Term Loan) and fixed-rate debt totaled **$851.6 million**[261](index=261&type=chunk) - A hypothetical **150 basis point** interest rate increase would decrease income and cash flows by approximately **$5.3 million** for the nine months ended September 30, 2022[261](index=261&type=chunk) - Cumulative foreign currency translation loss reported as part of equity was **$35.8 million** at September 30, 2022, primarily due to the strengthening U.S. dollar against the British pound sterling[263](index=263&type=chunk) [Interest Rates](index=55&type=section&id=Interest%20Rates) Gannett manages interest rate risk with **$467.9 million** in variable-rate debt; a **150 basis point** increase would decrease income and cash flows by **$5.3 million** for nine months - Variable-rate debt was **$467.9 million** and fixed-rate debt was **$851.6 million** as of September 30, 2022[261](index=261&type=chunk) - The New Senior Secured Term Loan bears interest at Adjusted Term SOFR plus a margin, with Adjusted Term SOFR at **2.46%** as of September 30, 2022[261](index=261&type=chunk) - A hypothetical **150 basis point** interest rate increase would decrease income and cash flows by approximately **$1.8 million** for three months and **$5.3 million** for nine months[261](index=261&type=chunk) [Foreign Currency](index=55&type=section&id=Foreign%20Currency) Gannett's foreign currency risk stems from U.K. and DMS operations, resulting in a **$35.8 million** cumulative translation loss due to a strengthening U.S. dollar - Exposure to foreign exchange rate risk primarily from U.K. operations (British pound sterling) and DMS segment operations in various currencies (e.g., Australian dollar, Canadian dollar, Indian rupee, New Zealand dollar)[262](index=262&type=chunk) - Cumulative foreign currency translation losses reported as part of equity were **$35.8 million** at September 30, 2022, mainly due to the strengthening U.S. dollar[263](index=263&type=chunk) - A hypothetical **10%** fluctuation in foreign currency rates would not have materially impacted operating income for the three and nine months ended September 30, 2022[264](index=264&type=chunk) [ITEM 4. Controls and Procedures](index=55&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Gannett's disclosure controls and procedures were effective as of September 30, 2022, with no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were effective as of September 30, 2022[265](index=265&type=chunk) - No material changes in internal control over financial reporting during the quarter ended September 30, 2022[266](index=266&type=chunk) [Disclosure Controls and Procedures](index=55&type=section&id=Disclosure%20Controls%20and%20Procedures) Gannett's CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2022, ensuring timely and accurate information reporting - The Company's Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of September 30, 2022[265](index=265&type=chunk) [Changes in Internal Control over Financial Reporting](index=55&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes in internal control over financial reporting occurred during the quarter ended September 30, 2022 - No material changes in internal control over financial reporting during the quarter ended September 30, 2022[266](index=266&type=chunk) Part II. Other Information [ITEM 1. Legal Proceedings](index=56&type=section&id=ITEM%201.%20Legal%20Proceedings) No material developments in legal proceedings have occurred since the December 31, 2021 Annual Report on Form 10-K - No material developments in legal proceedings since the Annual Report on Form 10-K for the fiscal year ended December 31, 2021[268](index=268&type=chunk) [ITEM 1A. Risk Factors](index=56&type=section&id=ITEM%201A.%20Risk%20Factors) Gannett faces significant macroeconomic risks, including inflation, interest rates, and supply chain disruptions, impacting advertising demand and the success of cost control initiatives - Volatility in U.S. and global economies, higher inflation, increased interest rates, supply chain disruptions, and geopolitical events have adversely impacted business[271](index=271&type=chunk) - Challenging economic conditions have reduced demand for print and digital advertising, lowered rates, and increased consumer price sensitivity[271](index=271&type=chunk)[272](index=272&type=chunk) - Inability to successfully implement cost control programs and initiatives to improve profitability could materially and adversely affect future financial results[277](index=277&type=chunk) [Risks Related to Macroeconomic Factors](index=56&type=section&id=Risks%20Related%20to%20Macroeconomic%20Factors) Economic uncertainty, including inflation, rising interest rates, and supply chain disruptions, negatively impacts advertising demand, consumer spending, and increases borrowing costs - Economic uncertainty, including higher inflation, increased interest rates, and supply chain disruptions, has negatively impacted advertising demand and revenues[271](index=271&type=chunk) - Increased consumer price sensitivity, labor shortages, and delivery challenges have negatively impacted print circulation volumes[272](index=272&type=chunk) - Higher interest rates could increase borrowing costs, and foreign currency fluctuations impact international operations[273](index=273&type=chunk)[274](index=274&type=chunk) [Additional Risks Related to Our Business](index=57&type=section&id=Additional%20Risks%20Related%20to%20Our%20Business) Failure to successfully implement cost control and profitability initiatives poses a material risk to Gannett's future financial results and liquidity - Failure to successfully implement cost control programs and initiatives to improve profitability could materially and adversely affect future financial results and liquidity[277](index=277&type=chunk) - The actual amount and timing of cost savings from these initiatives may differ from current expectations[277](index=277&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Gannett repurchased **800 thousand** shares for **$3.1 million** under its **$100 million** Stock Repurchase Program, with **$96.9 million** remaining authorized - Board authorized a **$100 million** Stock Repurchase Program in February 2022[278](index=278&type=chunk) - During the nine months ended September 30, 2022, **800 thousand** shares of Common Stock were repurchased for approximately **$3.1 million**[278](index=278&type=chunk) - As of September 30, 2022, **$96.9 million** remained authorized under the Stock Repurchase Program[278](index=278&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=57&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the reporting period - No defaults upon senior securities[279](index=279&type=chunk) [ITEM 4. Mine Safety Disclosures](index=57&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Gannett's operations - This item is not applicable[280](index=280&type=chunk) [ITEM 5. Other Information](index=57&type=section&id=ITEM%205.%20Other%20Information) No other information is reported under this item - No other information reported[281](index=281&type=chunk) [ITEM 6. Exhibits](index=58&type=section&id=ITEM%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including a binding term sheet, officer certifications, and Inline XBRL financial information - Includes a Binding Term Sheet with Tipico USA Technology, Inc. and Tipico US Group Corp[283](index=283&type=chunk) - Certifications of Principal Executive Officer and Principal Financial Officer are filed[283](index=283&type=chunk) - Financial information is formatted in Inline XBRL[283](index=283&type=chunk) [Signatures](index=59&type=section&id=Signatures) The report is signed by Douglas E. Horne, CFO and Chief Accounting Officer, on November 3, 2022 - Report signed by Douglas E. Horne, Chief Financial Officer and Chief Accounting Officer, on November 3, 2022[287](index=287&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________ FORM 10-Q _______________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-36097 ___________________________ GANNETT CO., INC. (Exact name of registrant as specified in its charter) Delaware 38-3910250 (S ...

Gannett Co., Inc. (NYSE:GCI) Q1 2022 Earnings Conference Call May 5, 2022 8:30 AM ET Company Participants Matthew Esposito - IR Mike Reed - Chairman and CEO Doug Horne - CFO Conference Call Participants Doug Arthur - Huber Research Lee Cooperman - Omega Family Operator Greetings and welcome to Gannett Co., Inc. 1Q Earnings Conference Call. [Operator Instructions] As a reminder this conference is being recorded. I would now like to turn the conference over to your host Matthew Esposito with Investor Relatio ...

| --- | --- | |------------------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Q1 2022 Earnings | | | | | | | | | | | | May 5, 2022 | | Disclaimer and Notes 2 In General. This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with any such verbal or written comments, is referred to herein as the "Presentation." Gannett Co., Inc. is referred to in this Presentation as "Gannett," "we," "us," "our" o ...

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides Gannett Co., Inc.'s unaudited condensed consolidated financial information for the quarter ended March 31, 2022 [ITEM 1. FINANCIAL STATEMENTS](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Gannett Co., Inc.'s unaudited condensed consolidated financial statements for the quarter ended March 31, 2022, including balance sheets, statements of operations, cash flows, and equity, along with detailed notes explaining business operations, accounting policies, revenue recognition, debt, and segment reporting [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, detailing assets, liabilities, and equity as of March 31, 2022 Condensed Consolidated Balance Sheets (In thousands) | In thousands | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $152,191 | $130,756 | | Accounts receivable, net | $293,462 | $328,733 | | Total current assets | $562,345 | $577,261 | | Total assets | $2,783,443 | $2,828,069 | | **Liabilities and equity** | | | | Total current liabilities | $641,804 | $662,526 | | Long-term debt | $783,010 | $769,446 | | Convertible debt | $396,297 | $393,354 | | Total liabilities | $2,268,717 | $2,298,454 | | Total equity | $514,726 | $529,615 | | Total liabilities and equity | $2,783,443 | $2,828,069 | - Total assets decreased by **$44.6 million** from December 31, 2021, to March 31, 2022, primarily due to decreases in accounts receivable, property, plant and equipment, and intangible assets[12](index=12&type=chunk) - Total liabilities decreased by **$29.7 million**, driven by reductions in current liabilities and deferred tax liabilities, partially offset by an increase in long-term debt[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Details the company's financial performance, including revenues, expenses, and net loss for the period Condensed Consolidated Statements of Operations (In thousands, except per share amounts) | In thousands, except per share amounts | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Total operating revenues | $748,077 | $777,084 | | Total operating expenses | $750,055 | $769,143 | | Operating income (loss) | $(1,978) | $7,941 | | Non-operating expenses | $8,731 | $159,751 | | Loss before income taxes | $(10,709) | $(151,810) | | Benefit for income taxes | $(7,607) | $(9,109) | | Net loss attributable to Gannett | $(2,967) | $(142,316) | | Loss per share attributable to Gannett - basic | $(0.02) | $(1.06) | | Loss per share attributable to Gannett - diluted | $(0.02) | $(1.06) | - Total operating revenues decreased by **3.7%** year-over-year, from **$777.1 million** in Q1 2021 to **$748.1 million** in Q1 2022[14](index=14&type=chunk) - Net loss attributable to Gannett significantly improved from **$(142.3) million** in Q1 2021 to **$(3.0) million** in Q1 2022, primarily due to the absence of a **$126.6 million** loss on convertible notes derivative in 2022[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Cash provided by operating activities | $32,429 | $61,316 | | Cash provided by (used for) investing activities | $(6,220) | $2,516 | | Cash used for financing activities | $(3,818) | $(74,699) | | Increase (decrease) in cash, cash equivalents and restricted cash | $21,399 | $(10,553) | | Cash, cash equivalents and restricted cash at end of period | $165,018 | $196,173 | - Cash provided by operating activities decreased by **$28.9 million**, from **$61.3 million** in Q1 2021 to **$32.4 million** in Q1 2022[15](index=15&type=chunk) - Cash used for financing activities significantly decreased from **$74.7 million** in Q1 2021 to **$3.8 million** in Q1 2022, mainly due to lower repayments under term loans and deferred financing costs[15](index=15&type=chunk) [Condensed Consolidated Statements of Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Outlines changes in stockholders' equity, including common stock and accumulated deficit Condensed Consolidated Statements of Equity (In thousands, except share data) | In thousands, except share data | Balance at December 31, 2021 | Balance at March 31, 2022 | | :--- | :--- | :--- | | Common stock (shares) | 144,667 | 151,017 | | Common stock (amount) | $1,446 | $1,510 | | Additional paid-in capital | $1,400,206 | $1,397,516 | | Accumulated deficit | $(921,399) | $(924,366) | | Total Gannett stockholders equity | $532,100 | $514,977 | | Total equity | $529,615 | $514,726 | - Total equity decreased by **$14.9 million** from December 31, 2021, to March 31, 2022, primarily due to net loss attributable to Gannett and other comprehensive loss[17](index=17&type=chunk) - Common stock shares outstanding increased from **144,667 thousand** to **151,017 thousand**, reflecting restricted stock awards settled and grants[17](index=17&type=chunk) [NOTE 1 — Description of business and basis of presentation](index=10&type=section&id=NOTE%201%20%E2%80%94%20Description%20of%20business%20and%20basis%20of%20presentation) Describes Gannett's business operations, segments, and the basis for financial statement presentation - Gannett is a subscription-led, digitally-focused media and marketing solutions company, operating USA TODAY, local media in 45 U.S. states, Newsquest in the U.K., and the digital marketing solutions company LOCALiQ[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) - The Company reports in two segments: Publishing and Digital Marketing Solutions, with a Corporate and other category for broad corporate functions[20](index=20&type=chunk) - The COVID-19 pandemic continues to have a slight negative impact on Advertising and marketing services and Circulation revenues, particularly affecting single copy newspaper sales and in-person events[21](index=21&type=chunk) [NOTE 2 — Revenues](index=11&type=section&id=NOTE%202%20%E2%80%94%20Revenues) Provides a detailed breakdown of the company's revenue streams and their year-over-year changes Revenues by Source (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Print advertising | $173,518 | $193,196 | | Digital advertising and marketing services | $201,596 | $195,161 | | Total advertising and marketing services | $375,114 | $388,357 | | Circulation | $288,602 | $325,437 | | Other | $84,361 | $63,290 | | Total revenues | $748,077 | $777,084 | - Total revenues decreased by **$29.0 million (3.7%)** year-over-year. Print advertising declined by **$19.7 million (10%)**, and Circulation decreased by **$36.8 million (11%)**[31](index=31&type=chunk) - Digital advertising and marketing services revenues increased by **$6.4 million (3%)**, and Other revenues grew by **$21.1 million (33%)**[31](index=31&type=chunk) [NOTE 3 — Accounts receivable, net](index=12&type=section&id=NOTE%203%20%E2%80%94%20Accounts%20receivable,%20net) Details the composition of accounts receivable and changes in the allowance for doubtful accounts Allowance for Doubtful Accounts (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Beginning balance (allowance for doubtful accounts) | $16,470 | $20,843 | | Ending balance (allowance for doubtful accounts) | $11,566 | $17,124 | - The allowance for doubtful accounts decreased from **$16.5 million** at the beginning of the period to **$11.6 million** at March 31, 2022, reflecting a **$2.4 million** benefit in bad debt expense due to lower receivable balances[36](index=36&type=chunk)[37](index=37&type=chunk) [NOTE 4 — Goodwill and intangible assets](index=13&type=section&id=NOTE%204%20%E2%80%94%20Goodwill%20and%20intangible%20assets) Presents the carrying values of goodwill and intangible assets, noting any changes or impairment assessments Goodwill and Intangible Assets (In thousands) | In thousands | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total intangible assets, net | $694,521 | $713,153 | | Goodwill | $540,894 | $533,709 | - Total net intangible assets decreased by **$18.6 million**, while goodwill increased by **$7.2 million** from December 31, 2021, to March 31, 2022[38](index=38&type=chunk) - No indicators of impairment for goodwill or indefinite-lived intangible assets were present as of March 31, 2022[39](index=39&type=chunk) [NOTE 5 — Integration and reorganization costs and asset impairments](index=14&type=section&id=NOTE%205%20%E2%80%94%20Integration%20and%20reorganization%20costs%20and%20asset%20impairments) Reports expenses related to business integration, reorganization, and asset impairments Integration and Reorganization Costs (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Severance-related expenses | $5,360 | $7,097 | | Facility consolidation and other restructuring-related expenses | $6,038 | $6,307 | | Accelerated depreciation | $4,700 | $9,200 | - Total integration and reorganization costs were **$11.4 million** in Q1 2022, down from **$13.4 million** in Q1 2021, reflecting decreased severance and facility consolidation activities[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) - Accelerated depreciation related to shortened asset useful lives from property sales decreased from **$9.2 million** in Q1 2021 to **$4.7 million** in Q1 2022[43](index=43&type=chunk) [NOTE 6 — Debt](index=15&type=section&id=NOTE%206%20%E2%80%94%20Debt) Details the company's debt structure, including term loans, senior notes, and recent debt activities Debt Carrying Values (In millions) | In millions | March 31, 2022 (Carrying value) | December 31, 2021 (Carrying value) | | :--- | :--- | :--- | | New Senior Secured Term Loan | $490.2 | $463.3 | | 2026 Senior Notes | $355.7 | $375.6 | | 2027 Notes | $393.0 | $390.1 | | 2024 Notes | $3.3 | $3.3 | | Total debt | $1,242.2 | $1,232.3 | - Total debt increased by **$9.9 million** from December 31, 2021, to March 31, 2022, primarily due to incremental term loans under the New Senior Secured Term Loan[44](index=44&type=chunk)[45](index=45&type=chunk) - The Company entered into amendments for its New Senior Secured Term Loan, adding **$72.5 million** in incremental term loans and transitioning the interest rate base from LIBOR to Adjusted Term SOFR[45](index=45&type=chunk) - In March 2022, the Company repurchased **$22.5 million** principal of 2026 Senior Notes in exchange for New Senior Secured Term Loans, resulting in a **$1.3 million** loss on early extinguishment of debt[58](index=58&type=chunk)[184](index=184&type=chunk) [NOTE 7 — Pensions and other postretirement benefit plans](index=18&type=section&id=NOTE%207%20%E2%80%94%20Pensions%20and%20other%20postretirement%20benefit%20plans) Provides information on the company's pension and postretirement benefit plan expenses and contributions Retirement Plan Expenses (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Total expense (benefit) for retirement plans | $(18,137) | $(23,853) | | Total non-operating (benefit) expenses | $(18,612) | $(24,364) | | Service cost - benefits earned during the period | $475 | $511 | - Non-operating pension income decreased from **$23.9 million** in Q1 2021 to **$18.2 million** in Q1 2022, mainly due to a lower expected return on plan assets from a more conservative asset allocation[76](index=76&type=chunk)[136](index=136&type=chunk) - The Company contributed **$7.6 million** to pension plans and **$2.0 million** to other postretirement plans during Q1 2022[76](index=76&type=chunk) [NOTE 8 — Fair value measurement](index=19&type=section&id=NOTE%208%20%E2%80%94%20Fair%20value%20measurement) Explains the fair value hierarchy and measurement of assets and liabilities on a recurring and nonrecurring basis - Fair value measurements are categorized into a three-tiered hierarchy (Level 1, 2, 3) based on observable and unobservable inputs[77](index=77&type=chunk) - Assets and liabilities measured at fair value on a recurring basis primarily consist of pension plan assets, with certain investments measured at Net Asset Value (NAV) as a practical expedient[78](index=78&type=chunk) - Assets held for sale, totaling **$5.9 million** as of March 31, 2022, are measured at fair value on a nonrecurring basis (Level 3) using purchase agreements or third-party valuations[80](index=80&type=chunk) [NOTE 9 — Income taxes](index=19&type=section&id=NOTE%209%20%E2%80%94%20Income%20taxes) Presents the company's income tax benefit, effective tax rate, and unrecognized tax benefits Income Tax Details (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Loss before income taxes | $(10,709) | $(151,810) | | Benefit for income taxes | $(7,607) | $(9,109) | | Effective tax rate | 71.0 % | 6.0 % | - The benefit for income taxes in Q1 2022 was **$7.6 million**, driven by pre-tax loss and the release of tax reserves, partially offset by valuation allowances on non-deductible interest expense carryforwards, resulting in an effective tax rate of **71.0%**[82](index=82&type=chunk) - Unrecognized tax benefits that could impact the effective tax rate were approximately **$49.0 million** as of March 31, 2022, up from **$45.0 million** at December 31, 2021[83](index=83&type=chunk) [NOTE 10 — Supplemental equity information](index=20&type=section&id=NOTE%2010%20%E2%80%94%20Supplemental%20equity%20information) Offers additional details on equity, including share data, loss per share, and share-based compensation Supplemental Equity and Per Share Data (In thousands, except per share data) | In thousands, except per share data | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Net loss attributable to Gannett | $(2,967) | $(142,316) | | Basic weighted average shares outstanding | 136,425 | 134,075 | | Diluted weighted average shares outstanding | 136,425 | 134,075 | | Loss per share attributable to Gannett - basic | $(0.02) | $(1.06) | | Loss per share attributable to Gannett - diluted | $(0.02) | $(1.06) | - Diluted loss per share improved significantly from **$(1.06)** in Q1 2021 to **$(0.02)** in Q1 2022[86](index=86&type=chunk) - The Company recognized **$3.4 million** in share-based compensation expense for both Q1 2022 and Q1 2021[88](index=88&type=chunk) - The Board authorized a Stock Repurchase Program of up to **$100 million** of Common Stock on February 1, 2022, with no repurchases made as of March 31, 2022[92](index=92&type=chunk) [NOTE 11 — Commitments, contingencies and other matters](index=22&type=section&id=NOTE%2011%20%E2%80%94%20Commitments,%20contingencies%20and%20other%20matters) Discusses legal proceedings and other contingent matters affecting the company - Gannett is involved in various legal proceedings in the ordinary course of business, including libel, intellectual property, and employment claims[95](index=95&type=chunk) - Management believes current and threatened legal proceedings are not expected to have a material adverse effect on the Company's business, financial position, or consolidated results of operations[96](index=96&type=chunk) [NOTE 12 — Segment reporting](index=23&type=section&id=NOTE%2012%20%E2%80%94%20Segment%20reporting) Provides financial performance data for the company's Publishing and Digital Marketing Solutions segments - Gannett operates in two reportable segments: Publishing (local, regional, national, and international newspaper publishers) and Digital Marketing Solutions (LOCALiQ)[98](index=98&type=chunk)[102](index=102&type=chunk) - Adjusted EBITDA and Adjusted EBITDA margin are key non-GAAP metrics used by the Chief Operating Decision Maker (CEO) to evaluate segment performance and allocate resources[100](index=100&type=chunk)[101](index=101&type=chunk) Consolidated Adjusted EBITDA by Segment (In thousands) | In thousands | Q1 2022 Adjusted EBITDA | Q1 2021 Adjusted EBITDA | | :--- | :--- | :--- | | Publishing | $68,648 | $102,208 | | Digital Marketing Solutions | $11,180 | $9,172 | | Corporate and other | $(15,657) | $(10,915) | | Consolidated Adjusted EBITDA | $64,171 | $100,465 | - Consolidated Adjusted EBITDA decreased by **$36.3 million (36.1%)** year-over-year, with Publishing segment Adjusted EBITDA declining by **32.8%** and Digital Marketing Solutions segment Adjusted EBITDA increasing by **21.9%**[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) [NOTE 13 — Other supplemental information](index=24&type=section&id=NOTE%2013%20%E2%80%94%20Other%20supplemental%20information) Includes additional cash flow details, such as cash paid for taxes and interest Cash and Restricted Cash (In thousands) | In thousands | March 31, 2022 | March 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $152,191 | $163,505 | | Restricted cash | $12,827 | $32,668 | | Total cash, cash equivalents and restricted cash | $165,018 | $196,173 | Cash Paid for Taxes and Interest (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Cash paid for taxes, net of refunds | $846 | $(997) | | Cash paid for interest | $7,531 | $13,528 | - Cash paid for interest decreased by **$6.0 million (44.3%)** year-over-year[107](index=107&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=26&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides a detailed discussion and analysis of Gannett's financial condition, results of operations, and business trends for the three months ended March 31, 2022, compared to the same period in 2021. It covers consolidated performance, segment-specific results, liquidity, capital resources, and non-GAAP financial measures [OVERVIEW](index=26&type=section&id=OVERVIEW) Introduces Gannett's strategic focus as a subscription-led, digitally-focused media and marketing solutions company - Gannett is a subscription-led and digitally-focused media and marketing solutions company, aiming to drive audience growth and engagement through deeper content experiences and digital marketing expertise[110](index=110&type=chunk) - The Company's portfolio includes USA TODAY, local media in 45 U.S. states, Newsquest in the U.K., and the digital marketing solutions company LOCALiQ, along with USA TODAY NETWORK Ventures for events[111](index=111&type=chunk)[112](index=112&type=chunk) [Business Trends](index=26&type=section&id=Business%20Trends) Highlights key industry trends impacting Gannett, including digital shifts, SMB needs, and cost inflation - Print advertising continues to decline as audiences shift to digital platforms; focus is on converting digital audiences to digital-only subscribers - SMBs require digital presence, addressed by LOCALiQ's broad suite of digital marketing services - COVID-19 pandemic negatively impacts in-person events and single copy newspaper sales - Newsprint availability is constrained globally, leading to increased costs due to inflation in energy and fuel[113](index=113&type=chunk) [Recent Developments](index=27&type=section&id=Recent%20Developments) Reports on recent company initiatives, such as the publication of its inaugural ESG report - Gannett published its inaugural 2022 ESG report, detailing efforts aligned with U.N. Sustainable Development Goals, prioritizing Reduced Inequalities, Climate Action, and Peace, Justice & Strong Institutions[114](index=114&type=chunk)[115](index=115&type=chunk) [Certain matters affecting comparability](index=27&type=section&id=Certain%20matters%20affecting%20comparability) Discusses factors like integration costs, accelerated depreciation, and foreign currency impacts on comparability - Integration and reorganization costs decreased to **$11.4 million** in Q1 2022 from **$13.4 million** in Q1 2021, primarily due to lower severance and facility consolidation expenses[116](index=116&type=chunk) - Accelerated depreciation from printing operation closures decreased to **$4.7 million** in Q1 2022 from **$9.2 million** in Q1 2021[117](index=117&type=chunk) - Foreign currency fluctuations impact revenue, expense, and operating income for international operations in the U.K., Canada, Australia, New Zealand, and India[118](index=118&type=chunk) [Outlook for 2022](index=28&type=section&id=Outlook%20for%202022) Outlines Gannett's strategic priorities and expectations for the upcoming year, focusing on digital growth and efficiency - Accelerate digital subscriber growth by leveraging its newsroom network and developing new digital subscription offerings - Drive digital marketing services growth by expanding LOCALiQ into local markets and using data to inform new advertising products - Optimize traditional print businesses through efficiency, process improvements, and aligning with digital subscription strategies - Prioritize investments in growth businesses like USA TODAY NETWORK Ventures, which saw **83% revenue increase** in Q1 2022 - Build an inclusive and diverse culture, with published inclusion goals for 2025 and an annual workforce diversity report[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) - The COVID-19 pandemic is expected to continue having a slight negative impact on business operations in the near-term, particularly on event revenues and single copy newspaper sales[125](index=125&type=chunk)[126](index=126&type=chunk) - Revenues are subject to moderate seasonality, with Advertising and marketing services typically highest in the fourth quarter due to holiday advertising volumes[127](index=127&type=chunk) [RESULTS OF OPERATIONS](index=30&type=section&id=RESULTS%20OF%20OPERATIONS) Provides a comprehensive analysis of the company's financial performance for the reporting period [Consolidated Summary](index=30&type=section&id=Consolidated%20Summary) Presents a high-level overview of Gannett's consolidated financial results, including revenues and net loss Consolidated Financial Summary (In thousands, except per share amounts) | In thousands, except per share amounts | Three months ended March 31, 2022 | Three months ended March 31, 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $748,077 | $777,084 | $(29,007) | (4)% | | Advertising and marketing services | $375,114 | $388,357 | $(13,243) | (3)% | | Circulation | $288,602 | $325,437 | $(36,835) | (11)% | | Other | $84,361 | $63,290 | $21,071 | 33% | | Net loss attributable to Gannett | $(2,967) | $(142,316) | $139,349 | (98)% | | Loss per share attributable to Gannett - diluted | $(0.02) | $(1.06) | $1.04 | (98)% | - Consolidated operating revenues decreased by **4%** year-over-year, primarily driven by declines in print advertising and circulation, partially offset by growth in digital marketing services and other revenues[129](index=129&type=chunk) - Net loss attributable to Gannett significantly improved by **98%** due to the absence of a large loss on convertible notes derivative in the prior year[129](index=129&type=chunk) [Operating revenues](index=30&type=section&id=Operating%20revenues) Details the various sources of the company's operating revenues, including advertising, circulation, and other income - Advertising and marketing services revenues are generated by both Publishing (print and digital advertising, digital marketing services) and Digital Marketing Solutions (search, display, SEO, social media, website development)[130](index=130&type=chunk) - Circulation revenues come from home delivery, digital distribution, and single copy sales of publications[131](index=131&type=chunk) - Other revenues are mainly from commercial printing, distribution, events, digital content syndication, and third-party newsprint sales[132](index=132&type=chunk) [Operating expenses](index=32&type=section&id=Operating%20expenses) Describes the primary categories of expenses incurred in the company's operations - Operating costs include labor, newsprint, delivery, and third-party online media acquisition - Selling, general and administrative expenses cover labor, payroll, outside services, benefits, and bad debt - Integration and reorganization costs include severance and facility consolidation expenses - Other operating expenses include third-party debt and acquisition-related costs[133](index=133&type=chunk) [Non-operating (income) expense](index=32&type=section&id=Non-operating%20(income)%20expense) Reports financial items outside of core operations, such as interest expense and pension income Non-Operating Expenses (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Interest expense | $26,006 | $39,503 | | Loss on early extinguishment of debt | $2,743 | $19,401 | | Non-operating pension income | $(18,213) | $(23,878) | | Loss on convertible notes derivative | $0 | $126,600 | - Interest expense decreased by **$13.5 million (34.2%)** due to a lower debt balance and reduced interest rates[134](index=134&type=chunk) - Loss on early extinguishment of debt decreased by **$16.7 million (86.4%)** due to the payoff of a senior-secured term loan in Q1 2021[135](index=135&type=chunk) - The absence of a **$126.6 million** loss on convertible notes derivative in Q1 2022 significantly improved non-operating expenses[137](index=137&type=chunk) [Benefit for income taxes](index=32&type=section&id=Benefit%20for%20income%20taxes) Explains the income tax benefit and the factors influencing the effective tax rate Income Tax Benefit and Rate (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Loss before income taxes | $(10,709) | $(151,810) | | Benefit for income taxes | $(7,607) | $(9,109) | | Effective tax rate | 71.0 % | 6.0 % | - The effective tax rate increased significantly from **6.0%** in Q1 2021 to **71.0%** in Q1 2022, primarily due to the pre-tax loss and the release of tax reserves, partially offset by valuation allowances on non-deductible interest expense carryforwards[140](index=140&type=chunk) [Net loss attributable to Gannett and diluted loss per share attributable to Gannett](index=33&type=section&id=Net%20loss%20attributable%20to%20Gannett%20and%20diluted%20loss%20per%20share%20attributable%20to%20Gannett) Focuses on the company's net loss and per-share performance Net Loss and Diluted EPS (In thousands, except per share data) | In thousands, except per share data | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Net loss attributable to Gannett | $(2,967) | $(142,316) | | Diluted loss per share attributable to Gannett | $(0.02) | $(1.06) | - Net loss attributable to Gannett improved from **$142.3 million** in Q1 2021 to **$3.0 million** in Q1 2022, leading to a significant improvement in diluted loss per share from **$(1.06)** to **$(0.02)**[141](index=141&type=chunk) [Segment Results](index=33&type=section&id=Segment%20Results) Provides a detailed breakdown of financial performance for each of Gannett's operating segments [Publishing segment](index=33&type=section&id=Publishing%20segment) Analyzes the financial performance of the company's traditional publishing business Publishing Segment Performance (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $670,419 | $699,585 | $(29,166) | (4)% | | Advertising and marketing services | $298,762 | $314,310 | $(15,548) | (5)% | | Circulation | $288,602 | $325,436 | $(36,834) | (11)% | | Other revenues | $83,055 | $59,839 | $23,216 | 39% | | Operating income | $25,592 | $42,355 | $(16,763) | (40)% | | Adjusted EBITDA (non-GAAP basis) | $68,648 | $102,208 | $(33,560) | (33)% | - Publishing segment total operating revenues decreased by **4%**, driven by a **10%** decline in print advertising and an **11%** decrease in circulation, partially offset by a **39%** increase in other revenues[142](index=142&type=chunk)[143](index=143&type=chunk) - Digital-only circulation revenues increased by **30%** due to a **44%** increase in paid digital-only subscribers, reaching approximately **1.75 million**[145](index=145&type=chunk) - Operating income for the Publishing segment decreased by **40%**, and Adjusted EBITDA decreased by **33%** year-over-year[142](index=142&type=chunk)[157](index=157&type=chunk) [Digital Marketing Solutions segment](index=36&type=section&id=Digital%20Marketing%20Solutions%20segment) Examines the financial performance of the company's digital marketing services business Digital Marketing Solutions Segment Performance (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $109,709 | $102,281 | $7,428 | 7% | | Advertising and marketing services | $109,709 | $101,376 | $8,333 | 8% | | Operating income | $4,414 | $1,177 | $3,237 | *** | | Adjusted EBITDA (non-GAAP basis) | $11,180 | $9,172 | $2,008 | 22% | - Digital Marketing Solutions segment total operating revenues increased by **7%**, driven by **8%** growth in advertising and marketing services revenues from core direct business and local markets[159](index=159&type=chunk)[160](index=160&type=chunk) - Operating income for the Digital Marketing Solutions segment increased significantly by **over 100%**, and Adjusted EBITDA increased by **22%** year-over-year[159](index=159&type=chunk)[165](index=165&type=chunk) - Operating costs increased by **10%** due to higher third-party media fees associated with increased revenues, while Selling, general and administrative expenses decreased by **7%** due to lower miscellaneous and bad debt expenses[161](index=161&type=chunk)[162](index=162&type=chunk) [Corporate and other category](index=38&type=section&id=Corporate%20and%20other%20category) Reports on financial results for corporate functions and other unallocated items Corporate and Other Operating Results (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Operating revenues | $1,306 | $3,074 | $(1,768) | (57)% | | Total operating expenses | $33,290 | $38,665 | $(5,375) | (14)% | - Corporate and other operating revenues decreased by **57%**, while total operating expenses decreased by **14%**, primarily due to the absence of **$10.2 million** in third-party fees expensed in Q1 2021[167](index=167&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=38&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Assesses the company's ability to meet its financial obligations and fund operations - Primary cash requirements are for working capital, debt obligations, and capital expenditures, expected to be funded by operating activities and available financing capacity[168](index=168&type=chunk) Cash Flow Summary (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Cash provided by operating activities | $32,429 | $61,316 | | Cash provided by (used for) investing activities | $(6,220) | $2,516 | | Cash used for financing activities | $(3,818) | $(74,699) | | Increase (decrease) in cash, cash equivalents and restricted cash | $21,399 | $(10,553) | - Cash provided by operating activities decreased by **$28.9 million**, mainly due to lower cash receipts from deferred revenues and a decrease in accounts payable, partially offset by lower severance payments and interest paid[170](index=170&type=chunk) - Cash used for financing activities decreased by **$70.9 million**, primarily due to lower repayments under term loans and deferred financing costs, despite **$22.5 million** in repayments for 2026 Senior Notes[172](index=172&type=chunk) - The Company expects capital expenditures for the remainder of 2022 to be approximately **$35.5 million**, focused on digital product development, print/technology systems, and system upgrades[200](index=200&type=chunk) - The Company does not currently pay a quarterly dividend and has no intention to reinstate it, with debt terms restricting dividend payments[198](index=198&type=chunk) [CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES](index=43&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20USE%20OF%20ESTIMATES) Reaffirms the consistency of critical accounting policies and estimates with prior reports - There have been no material changes to the critical accounting policies and use of estimates discussed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021[203](index=203&type=chunk) [NON-GAAP FINANCIAL MEASURES](index=43&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) Defines and reconciles non-GAAP financial measures used to evaluate performance - Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures used to evaluate ongoing operating performance, excluding items not indicative of core operations[205](index=205&type=chunk)[206](index=206&type=chunk) Non-GAAP Financial Measures (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Net loss attributable to Gannett | $(2,967) | $(142,316) | | Adjusted EBITDA (non-GAAP basis) | $64,171 | $100,465 | | Net loss attributable to Gannett margin | (0.4)% | (18.3)% | | Adjusted EBITDA margin (non-GAAP basis) | 8.6 % | 12.9 % | - Adjusted EBITDA decreased by **$36.3 million (36.1%)** year-over-year, and Adjusted EBITDA margin decreased from **12.9%** to **8.6%**[211](index=211&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=45&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section states that there have been no material changes to the quantitative and qualitative disclosures about market risks since the fiscal year ended December 31, 2021, as reported in the Company's Form 10-K - No material changes to market risk disclosures were reported for the quarter ended March 31, 2022, compared to the previous Form 10-K[212](index=212&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=45&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of the Company's disclosure controls and procedures as of March 31, 2022, and reports no material changes in internal control over financial reporting during the quarter - The Company's Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of March 31, 2022[213](index=213&type=chunk) - There were no material changes in internal control over financial reporting during the first quarter ended March 31, 2022[214](index=214&type=chunk) [PART II. OTHER INFORMATION](index=46&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section presents additional non-financial disclosures required in the quarterly report [ITEM 1. LEGAL PROCEEDINGS](index=46&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Refers to the relevant note for details on ongoing legal matters - Information on legal proceedings is incorporated by reference from Note 11 of the condensed consolidated financial statements[217](index=217&type=chunk) [ITEM 1A. RISK FACTORS](index=46&type=section&id=ITEM%201A.%20RISK%20FACTORS) States that there are no new material risk factors since the last annual report - No material changes to the risk factors were reported for the quarter ended March 31, 2022, compared to the previous Form 10-K[218](index=218&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=46&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) Confirms no unregistered equity sales or use of proceeds during the period - No unregistered sales of equity securities or use of proceeds occurred during the period[219](index=219&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=46&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) Confirms no defaults on senior securities during the reporting period - No defaults upon senior securities occurred during the period[220](index=220&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=46&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) States that this disclosure item is not applicable to the company - Mine Safety Disclosures are not applicable to Gannett Co., Inc[221](index=221&type=chunk) [ITEM 5. OTHER INFORMATION](index=46&type=section&id=ITEM%205.%20OTHER%20INFORMATION) Confirms no other material information to report under this item - No other information is reported under this item[222](index=222&type=chunk) [ITEM 6. EXHIBITS](index=47&type=section&id=ITEM%206.%20EXHIBITS) Lists all documents filed as exhibits to the Form 10-Q - Fourth Supplemental Indenture, dated January 31, 2022 - Amendment No. 1 to the First Lien Credit Agreement, dated January 31, 2022 - Form of Gannett Co., Inc. Employee Performance Restricted Stock Unit Grant Agreement - Certifications of Principal Executive Officer and Principal Financial Officer (Rule 13a-14(a)/15d-14(d) and Section 1350)[224](index=224&type=chunk) [Signatures](index=48&type=section&id=Signatures) Provides the official signatures for the submitted Form 10-Q - The report was signed by Douglas E. Horne, Chief Financial Officer and Chief Accounting Officer, on May 5, 2022[228](index=228&type=chunk)

| --- | --- | |-------------------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Q4 2021 Earnings | | | | | | | | | | | | February 24, 2022 | | Disclaimer and Notes 2 In General. This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with any such verbal or written comments, is referred to herein as the "Presentation." Gannett Co., Inc. is referred to in this Presentation as "Gannett," "we," ...

Gannett Co., Inc. (NYSE:GCI) Q4 2021 Results Conference Call February 24, 2022 8:30 AM ET Company Participants Mike Reed - Chief Executive Officer Doug Horne - Chief Financial Officer Trisha Gosser - Investor Relations Operator Greetings and welcome to Gannett Fourth Quarter Earnings Conference Call. [Operator Instructions]. I would now like to turn the call over to your host Trisha Gosser, Investor Relations. Please go ahead. Hello, Ms. Gosser, your line is unmuted, can you hear us? Hello, Ms. Gosser, ca ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 ☐ 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 38-3910250 (State or Other Jurisdictio ...

The Path Forward January 13, 2022 1 Disclaimer and Notes In General. This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with any such verbal or written comments, is referred to herein as the "Presentation." Gannett Co., Inc. is referred to in this Presentation as "Gannett," "we," "us," "our" or the "Company". Prior to November 19, 2019, our corporate name was New Media Investment Group Inc. ("New Media") and Gannett Co., Inc ...