UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_______________________
FORM 10-Q


_______________________
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 24, 2017June 30, 2021
OR

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to ☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number:number 001-36097

___________________________
New Media Investment Group Inc.
GANNETT CO., INC.
(Exact name of registrant as specified in its charter)

___________________________
Delaware38-3910250
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
Delaware38-3910250
(State or other jurisdiction of
incorporation or organization)
7950 Jones Branch Drive,		McLean,
(I.R.S. Employer
Identification No.)
Virginia		22107-0910
1345 Avenue of the Americas 45th floor,
New York, NY
10105
(Address of principal executive offices)(Zip Code)
Telephone: (212) 479-3160
(Registrant’sRegistrant's telephone number, including area code)code: (703) 854-6000

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, par value $0.01 per shareGCIThe New York Stock Exchange
Preferred Stock Purchase RightsN/AThe New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesý☒No¨☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).Yesý☒No¨☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See definitionthe definitions of “large"large accelerated filer,” “accelerated filer”" "accelerated filer," "smaller reporting company," and “smaller reporting company”"emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated Filerý☐Accelerated filerFiler¨☒
Non-accelerated filerNon-Accelerated Filer¨☐Smaller reporting companyReporting Company¨☐
Emerging growth companyGrowth Company¨☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).: Yes ¨☐ No ý

☒
As of October 24, 2017, 53,220,185August 3, 2021, 142,617,066 shares of the registrant’s common stockregistrant's Common Stock were outstanding.





CAUTIONARY NOTE REGARDING FORWARD LOOKING INFORMATION
FORWARD-LOOKING STATEMENTS


Certain statements in this reportQuarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that1995. Forward-looking statements reflect our current views regarding, among other things, our future growth, results of operations, performance, and business prospects and opportunities, as well as otherand are not statements that are other thanof historical fact. Words such as “anticipate(s)"anticipate(s),” “expect(s)”" "expect(s), “intend(s)”" "intend(s), “plan(s)”" "plan(s), “target(s)”" "target(s), “project(s)”" "project(s), “believe(s)”" "believe(s), “will”" "forecast," "will," "aim," "would," "seek(s), “aim”, “would”, “seek(s)”, “estimate(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 that our expectations will be attained. Our actual results, liquidity, and financial condition may differ from the anticipated results, liquidity, and financial condition indicated in these forward-looking statements. These forward lookingforward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause our actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others:
general
•General economic and market conditions;
economic•The competitive environment in which we operate;
•Risks and uncertainties associated with the ongoing COVID-19 pandemic;
•Economic conditions in the Northeast, Southeast and Midwestvarious regions of the United States;States, the United Kingdom, and other regions in which we operate our business;
declining advertising and circulation revenues;
our ability to grow our digital marketing and business services and digital audience and advertiser base;
the growing•The shift within the publishing industry from traditional print media to digital forms of publication;
•Risks and uncertainties associated with our Digital Marketing Solutions segment, including its significant reliance on Google for media purchases, its international operations, and its ability to develop and gain market acceptance for new products or services;
•Declining print advertising revenue and circulation subscribers;
•Our ability to grow our digital marketing services initiatives, digital audience, and advertiser base;
•Our ability to grow our business organically through both our consumer and smallorganically;
•Variability in the exchange rate relative to medium size business strategies:the U.S. dollar of currencies in foreign jurisdictions in which we operate;
our ability to acquire local media print assets at attractive valuations;
the•The risk that we may not realize the anticipated benefits of our recent or potential future acquisitions;
the•The availability and cost of capital for future investments;
our•Our indebtedness may restrict our operations and / and/or require us to dedicate a portion of cash flow from operations to the payment of principalpayments associated with our debt;
•Our current intention not to pay dividends and interest;
our ability to pay dividends consistent with prior practice or at all;
our•Our ability to reduce costs and expenses;
our•Our ability to realize the benefits of the Management Agreement (as defined below);remediate a material weakness in our internal control over financial reporting; and
the impact of any material transactions with the Manager (as defined below) or one of its affiliates, including the impact of any actual, potential or perceived conflicts of interest;
effects of the pending merger of Fortress Investment Group LLC with affiliates of SoftBank Group Corp.;
the competitive environment in which we operate; and
our•Our ability to recruit and retain key personnel.personnel, as well as any shortage of skilled or experienced employees, including journalists.

Additional risk factors that could cause actual results to differ materially from our expectations include, but are not limited to, the risks identified by us under the heading “Risk Factors” in Part II, Item 1A of this report.our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2021, and the statements made in subsequent filings. Such forward-looking statements speak only as of the date on which 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.







Page
PART I.
FINANCIAL INFORMATION

Item 1.
Financial Statements
Condensed Consolidated Balance Sheets as of September 24, 2017 (unaudited) and December 25, 2016
4
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 24, 2017 and September 25, 2016
5
Unaudited Condensed Consolidated Statement of Stockholders’ Equity for the nine months ended September 24, 2017
6
Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 24, 2017 and September 25, 2016
7
Notes to Unaudited Condensed Consolidated Financial Statements
8
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
25
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
39
Item 4.
Controls and Procedures
39
PART II.
OTHER INFORMATION
Item 1.
Legal Proceedings
40
Item 1A.
Risk Factors
40
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
54
Item 3.
Defaults Upon Senior Securities
55
Item 4.
Mine Safety Disclosures
55
Item 5.
Other Information
55
Item 6.
Exhibits
55
Signatures
57


INDEX TO GANNETT CO., INC.

Q2 2021 FORM 10-Q

Item No.Page
Part I. Financial Information
1
2
2
25
3
46
4
46
Part II. Other Information
1
47
1A
47
2
47
3
47
4
47
5
47
6
47
49


Table of Contents
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements
ITEM 1. FINANCIAL STATEMENTS

NEW MEDIA INVESTMENT GROUP
GANNETT CO., INC. AND SUBSIDIARIES
Condensed Consolidated Balance SheetsCONDENSED CONSOLIDATED BALANCE SHEETS
In thousands, except share dataJune 30, 2021December 31, 2020
Assets(Unaudited)
Current assets:
Cash and cash equivalents$158,563 $170,725 
Accounts receivable, net of allowance for doubtful accounts of $17,955 and $20,843 as of June 30, 2021 and December 31, 2020, respectively291,452 314,305 
Inventories34,535 35,075 
Prepaid expenses and other current assets113,275 116,581 
Total current assets597,825 636,686 
Property, plant and equipment, net of accumulated depreciation of $362,677 and $362,029 as of June 30, 2021 and December 31, 2020, respectively522,347 590,272 
Operating lease assets278,389 289,504 
Goodwill534,218 534,088 
Intangible assets, net770,811 824,650 
Deferred tax assets58,571 90,240 
Other assets211,627 143,474 
Total assets$2,973,788 $3,108,914 
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities$351,919 $378,246 
Deferred revenue184,619 186,007 
Current portion of long-term debt106,644 128,445 
Other current liabilities49,939 48,602 
Total current liabilities693,121 741,300 
Long-term debt823,009 890,323 
Convertible debt396,964 581,405 
Deferred tax liabilities22,567 6,855 
Pension and other postretirement benefit obligations90,019 99,765 
Long-term operating lease liabilities262,390 274,460 
Other long-term liabilities157,708 151,847 
Total noncurrent liabilities1,752,657 2,004,655 
Total liabilities2,445,778 2,745,955 
Redeemable noncontrolling interests(2,067)(1,150)
Commitments and contingent liabilities (See Note 12)00
Equity
Preferred stock, $0.01 par value, 300,000 shares authorized, of which 150,000 shares are designated as Series A Junior Participating Preferred Stock, NaN of which were issued and outstanding at June 30, 2021 and December 31, 20200 0 
Common stock of $0.01 par value per share, 2,000,000,000 shares authorized, 144,638,938 shares issued and 142,624,274 shares outstanding at June 30, 2021; 139,494,741 shares issued and 138,102,993 shares outstanding at December 31, 20201,446 1,395 
Treasury stock at cost, 2,014,664 shares and 1,391,748 shares at June 30, 2021 and December 31, 2020, respectively(6,935)(4,903)
Additional paid-in capital1,395,191 1,103,881 
Accumulated deficit(913,638)(786,437)
Accumulated other comprehensive income54,013 50,173 
Total equity530,077 364,109 
Total liabilities and equity$2,973,788 $3,108,914 
(In thousands, except share data)
 September 24, 2017 December 25, 2016
 (unaudited)  
ASSETS   
Current assets:   
Cash and cash equivalents$160,541
 $172,246
Restricted cash3,406
 3,406
Accounts receivable, net of allowance for doubtful accounts of $5,714 and $5,478 at September 24, 2017 and December 25, 2016, respectively127,652
 138,115
Inventory18,282
 18,167
Prepaid expenses21,683
 18,720
Other current assets21,029
 19,694
Total current assets352,593

370,348
Property, plant, and equipment, net of accumulated depreciation of $161,218 and $130,839 at September 24, 2017 and December 25, 2016, respectively366,710
 381,319
Goodwill202,388
 227,954
Intangible assets, net of accumulated amortization of $60,528 and $43,632 at September 24, 2017 and December 25, 2016, respectively337,473
 351,477
Other assets5,883
 4,932
Total assets$1,265,047

$1,336,030
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:   
Current portion of long-term debt$4,527
 $14,387
Accounts payable24,905
 19,105
Accrued expenses82,324
 84,389
Deferred revenue80,375
 77,987
Total current liabilities192,131

195,868
Long-term liabilities:   
Long-term debt356,536
 338,860
Long-term liabilities, less current portion14,053
 12,597
Deferred income taxes9,773
 7,786
Pension and other postretirement benefit obligations24,106
 25,946
Total liabilities596,599

581,057
Stockholders’ equity:   
Common stock, $0.01 par value, 2,000,000,000 shares authorized at September 24, 2017 and December 25, 2016; 53,354,393 and 53,543,226 issued at September 24, 2017 and December 25, 2016, respectively527
 531
Additional paid-in capital702,093
 742,543
Accumulated other comprehensive loss(3,894) (3,977)
(Accumulated deficit) retained earnings(29,205) 16,293
Treasury stock, at cost, 134,208 and 46,438 shares at September 24, 2017 and December 25, 2016, respectively(1,073) (417)
Total stockholders’ equity668,448

754,973
Total liabilities and stockholders’ equity$1,265,047

$1,336,030
SeeThe accompanying notes to unauditedare an integral part of these condensed consolidated financial statements.


NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income
(In thousands, except per share data)
2
 Three months ended September 24, 2017 Three months ended September 25, 2016 Nine months ended September 24, 2017 Nine months ended September 25, 2016
Revenues:       
Advertising$159,481
 $164,683
 $482,427
 $502,474
Circulation112,792
 104,693
 334,160
 312,664
Commercial printing and other44,903
 37,461
 130,986
 106,633
Total revenues317,176
 306,837
 947,573
 921,771
Operating costs and expenses:       
Operating costs177,724
 172,972
 532,535
 519,982
Selling, general, and administrative106,809
 100,052
 319,338
 306,165
Depreciation and amortization18,257
 17,014
 54,621
 50,364
Integration and reorganization costs2,210
 5,197
 6,817
 7,532
Impairment of long-lived assets—
 —
 6,485
 —
Goodwill and mastheads impairment—
 —
 27,448
 —
Loss (gain) on sale or disposal of assets686
 974
 (1,860) 3,325
Operating income11,490
 10,628
 2,189
 34,403
Interest expense7,848
 7,391
 22,283
 22,269
Loss on early extinguishment of debt4,767
 —
 4,767
 —
Other income(88) (62) (75) (316)
(Loss) income before income taxes(1,037) 3,299
 (24,786) 12,450
Income tax expense (benefit)934
 504
 2,557
 (4,695)
Net (loss) income$(1,971) $2,795
 $(27,343) $17,145
(Loss) income per share:       
Basic:       
Net (loss) income$(0.04) $0.06
 $(0.52) $0.39
Diluted:       
Net (loss) income$(0.04) $0.06
 $(0.52) $0.38
Dividends declared per share$0.35
 $0.33
 $1.05
 $0.99
Comprehensive (loss) income$(1,944) $2,815
 $(27,260) $17,206
Table of Contents
SeeGANNETT CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three months ended June 30,Six months ended June 30,
In thousands, except per share amounts2021202020212020
Advertising and marketing services$420,110 $356,918 $808,467 $843,929 
Circulation310,259 342,646 635,696 717,369 
Other73,906 67,436 137,196 154,385 
Total operating revenues804,275 767,000 1,581,359 1,715,683 
Operating costs473,172 476,735 950,970 1,043,199 
Selling, general and administrative expenses222,904 226,484 426,588 525,622 
Depreciation and amortization48,242 66,327 106,345 144,352 
Integration and reorganization costs8,444 32,306 21,848 60,560 
Asset impairments0 6,859 833 6,859 
Goodwill and intangible impairments0 393,446 0 393,446 
Net loss on sale or disposal of assets5,294 88 10,039 745 
Other operating expenses774 2,379 11,350 8,348 
Total operating expenses758,830 1,204,624 1,527,973 2,183,131 
Operating income (loss)45,445 (437,624)53,386 (467,448)
Interest expense35,264 57,928 74,767 115,827 
Loss on early extinguishment of debt2,834 369 22,235 1,174 
Non-operating pension income(23,906)(17,553)(47,784)(36,099)
Loss on Convertible notes derivative0 0 126,600 0 
Other income, net(1,148)(6,261)(3,023)(4,616)
Non-operating expense13,044 34,483 172,795 76,286 
Income (loss) before income taxes32,401 (472,107)(119,409)(543,734)
Provision (benefit) for income taxes17,692 (34,276)8,583 (25,297)
Net income (loss)14,709 (437,831)(127,992)(518,437)
Net loss attributable to redeemable noncontrolling interests(406)(938)(791)(1,392)
Net income (loss) attributable to Gannett$15,115 $(436,893)$(127,201)$(517,045)
Income (loss) per share attributable to Gannett - basic$0.11 $(3.32)$(0.95)$(3.95)
Income (loss) per share attributable to Gannett - diluted$0.10 $(3.32)$(0.95)$(3.95)
Other comprehensive income (loss):
Foreign currency translation adjustments$1,750 $(2,552)$4,787 $(16,585)
Pension and other postretirement benefit items:
Net actuarial loss(1,426)(8,078)(300)(8,078)
Amortization of net actuarial loss (gain)(5)(11)15 (25)
Other(292)95 (846)1,061 
Total pension and other postretirement benefit items(1,723)(7,994)(1,131)(7,042)
Other comprehensive income (loss) before tax27 (10,546)3,656 (23,627)
Income tax benefit related to components of other comprehensive income (loss)(390)(2,059)(184)(2,063)
Other comprehensive income (loss), net of tax417 (8,487)3,840 (21,564)
Comprehensive income (loss)15,126 (446,318)(124,152)(540,001)
Comprehensive loss attributable to redeemable noncontrolling interests(406)(938)(791)(1,392)
Comprehensive income (loss) attributable to Gannett$15,532 $(445,380)$(123,361)$(538,609)
The accompanying notes to unauditedare an integral part of these condensed consolidated financial statements.



NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statement of Stockholders’ Equity
(In thousands, except share data)
3
 Common stock Additional
paid-in capital		 
Accumulated 
other
comprehensive
income (loss)
 
(Accumulated deficit) retained 
earnings
 Treasury stock Total
 Shares Amount Shares Amount
Balance at December 25, 201653,543,226
 $531
 $742,543
 $(3,977) $16,293
 46,438
 $(417) $754,973
Net loss—
 —
 —
 —
 (27,343) —
 —
 (27,343)
Net actuarial loss and prior service cost, net of income taxes of $0—
 —
 —
 83
 —
 —
 —
 83
Restricted share grants202,287
 —
 225
 —
 —
 —
 —
 225
Non-cash compensation expense—
 —
 2,364
 —
 —
 —
 —
 2,364
Offering costs—
 —
 (111) —
 —
 —
 —
 (111)
Purchase of treasury stock—
 —
 —
 —
 —
 87,770
 (656) (656)
Repurchase of common stock(391,120) (4) (4,997) —
 —
 —
 —
 (5,001)
Common stock cash dividend—
 —
 (37,931) —
 (18,155) —
 —
 (56,086)
Balance at September 24, 201753,354,393
 $527
 $702,093
 $(3,894) $(29,205) 134,208
 $(1,073) $668,448
Table of Contents
See
GANNETT CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30,
In thousands20212020
Operating activities
Net loss$(127,992)$(518,437)
Adjustments to reconcile net loss to operating cash flows:
Depreciation and amortization106,345 144,352 
Share-based compensation expense9,202 18,968 
Non-cash interest expense11,531 11,902 
Net loss on sale or disposal of assets10,039 745 
Loss on Convertible notes derivative126,600 0 
Loss on early extinguishment of debt22,235 1,174 
Goodwill and intangible impairments0 393,446 
Asset impairments833 6,859 
Pension and other postretirement benefit obligations(78,038)(49,064)
Change in other assets and liabilities, net11,832 14,695 
Net cash provided by operating activities92,587 24,640 
Investing activities
Purchase of property, plant and equipment(15,821)(22,157)
Proceeds from sale of real estate and other assets23,341 17,792 
Change in other investing activities(335)1,339 
Net cash provided by (used for) investing activities7,185 (3,026)
Financing activities
Payments of debt issuance costs(33,921)0 
Borrowings under term loans1,045,000 0 
Repayments under term loans(1,129,605)(18,985)
Payments for employee taxes withheld from stock awards(2,030)(1,942)
Changes in other financing activities(423)596 
Net cash used for financing activities(120,979)(20,331)
Effect of currency exchange rate change on cash625 (780)
(Decrease) increase in cash, cash equivalents and restricted cash(20,582)503 
Balance of cash, cash equivalents and restricted cash at beginning of period206,726 188,664 
Balance of cash, cash equivalents and restricted cash at end of period$186,144 $189,167 
The accompanying notes to unauditedare an integral part of these condensed consolidated financial statements.


NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)
4
 Nine months ended
September 24, 2017		 Nine months ended
September 25, 2016
Cash flows from operating activities:   
Net (loss) income$(27,343) $17,145
Adjustments to reconcile net (loss) income to net cash provided by operating activities:   
Depreciation and amortization54,621
 50,364
Non-cash compensation expense2,364
 1,846
Non-cash interest expense1,710
 2,089
Deferred income taxes1,987
 (4,983)
(Gain) loss on sale or disposal of assets(1,860) 3,325
Non-cash charge to investments250
 —
Non-cash loss on early extinguishment of debt2,344
 —
Impairment of long-lived assets6,485
 —
Goodwill and mastheads impairment27,448
 —
Pension and other postretirement benefit obligations(1,803) (1,797)
Changes in assets and liabilities:   
Accounts receivable, net16,806
 24,170
Inventory373
 (835)
Prepaid expenses(2,666) (1,051)
Other assets(1,479) (1,858)
Accounts payable5,382
 (987)
Accrued expenses(2,989) (19,514)
Deferred revenue(2,318) (1,809)
Other long-term liabilities1,456
 1,207
Net cash provided by operating activities80,768

67,312
Cash flows from investing activities:   
Purchases of property, plant, and equipment(7,206) (7,731)
Proceeds from sale of publications and other assets14,669
 3,234
Acquisitions, net of cash acquired(41,700) (107,712)
Net cash used in investing activities(34,237)
(112,209)
Cash flows from financing activities:   
Payment of debt issuance costs(3,470) —
Borrowings under term loans20,000
 —
Repayments under term loans(12,632) (2,632)
Payment of offering costs(431) —
Purchase of treasury stock(656) (417)
Repurchase of common stock(5,001) —
Payment of dividends(56,046) (44,172)
Net cash used in financing activities(58,236)
(47,221)
Net decrease in cash and cash equivalents(11,705) (92,118)
Cash and cash equivalents at beginning of period172,246
 146,638
Cash and cash equivalents at end of period$160,541
 $54,520
Table of Contents
See
GANNETT CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
Three months ended June 30, 2021
Common stockAdditional
Paid-in
Capital		Accumulated other comprehensive income (loss)Accumulated DeficitTreasury stock
In thousands, except share dataSharesAmountSharesAmountTotal
Balance at March 31, 2021144,443,628 $1,444 $1,421,977 $53,596 $(928,753)1,901,927 $(6,612)$541,652 
Net income attributable to Gannett— — — — 15,115 — — 15,115 
Restricted stock awards settled, net of withholdings5,198 — (11)— — — — (11)
Restricted share grants— — — — — — — — 
Equity component of the 2027 Notes— — (32,534)— — — — (32,534)
Other comprehensive income, net of income tax benefit of $390— — — 417 — — 417 
Share-based compensation expense— — 5,779 — — — — 5,779 
Issuance of common stock190,112 2 — — — — — 2 
Treasury stock— — — — — 62,835 (323)(323)
Restricted share forfeiture— — — — — 49,902 — — 
Other activity— — (20)— — — — (20)
Balance at June 30, 2021144,638,938 $1,446 $1,395,191 $54,013 $(913,638)2,014,664 $(6,935)$530,077 
Three months ended June 30, 2020
Common stockAdditional
Paid-in
Capital		Accumulated other comprehensive income (loss)Accumulated DeficitTreasury stock
In thousands, except share dataSharesAmountSharesAmountTotal
Balance at March 31, 2020132,715,532 $1,327 $1,093,705 $(4,875)$(196,110)657,165 $(4,491)$889,556 
Net loss attributable to Gannett— — — — (436,893)— — (436,893)
Restricted stock awards settled, net of withholdings251,250 3 (109)— — — — (106)
Restricted share grants3,531,279 36 (36)— — — — 0 
Other comprehensive loss, net of income tax benefit of $2,059— — — (8,487)— — — (8,487)
Share-based compensation expense— — 7,391 — — — — 7,391 
Issuance of common stock387,259 3 1,021 — — — — 1,024 
Treasury stock— — — — — 55,236 (326)(326)
Restricted share forfeiture— — — — — 58,572 (1)(1)
Other activity— — (73)— — — — (73)
Balance at June 30, 2020136,885,320 $1,369 $1,101,899 $(13,362)$(633,003)770,973 $(4,818)$452,085 
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GANNETT CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY [CONTINUED]
(Unaudited)
Six months ended June 30, 2021
Common stockAdditional
Paid-in
Capital		Accumulated other comprehensive income (loss)Accumulated DeficitTreasury stock
In thousands, except share dataSharesAmountSharesAmountTotal
Balance as of December 31, 2020139,494,741 $1,395 $1,103,881 $50,173 $(786,437)1,391,748 $(4,903)$364,109 
Net loss attributable to Gannett— — — — (127,201)— — (127,201)
Restricted stock awards settled, net of withholdings1,061,840 10 (1,906)— — — — (1,896)
Restricted share grants3,877,836 39 (39)— — — — 0 
Equity component of the 2027 Notes— — 283,718 — — — — 283,718 
Other comprehensive income, net of income tax benefit of $184— — — 3,840 — — — 3,840 
Share-based compensation expense— — 9,202 — — — — 9,202 
Issuance of common stock204,521 2 61 — — — — 63 
Remeasurement of redeemable noncontrolling interests— — 126 — — — — 126 
Treasury stock— — — — — 393,153 (2,030)(2,030)
Restricted share forfeiture— — — — — 229,763 (2)(2)
Other activity— — 148 — — — — 148 
Balance at June 30, 2021144,638,938 $1,446 $1,395,191 $54,013 $(913,638)2,014,664 $(6,935)$530,077 
Six months ended June 30, 2020
Common stockAdditional
Paid-in
Capital		Accumulated other comprehensive income (loss)Accumulated DeficitTreasury stock
In thousands, except share dataSharesAmountSharesAmountTotal
Balance as of December 31, 2019129,386,258 $1,294 $1,090,694 $8,202 $(115,958)394,714 $(2,876)$981,356 
Net loss attributable to Gannett— — — — (517,045)— — (517,045)
Restricted stock awards settled, net of withholdings2,508,585 25 (9,953)— — — — (9,928)
Restricted share grants4,346,313 44 (44)— — — — 0 
Other comprehensive loss, net of income tax benefit of $2,063— — — (21,564)— — — (21,564)
Share-based compensation expense— — 18,968 — — — — 18,968 
Issuance of common stock644,164 6 2,570 — — — — 2,576 
Treasury stock— — — — — 317,687 (1,941)(1,941)
Restricted share forfeiture— — — — — 58,572 (1)(1)
Other activity— — (336)— — — — (336)
Balance at June 30, 2020136,885,320 $1,369 $1,101,899 $(13,362)$(633,003)770,973 $(4,818)$452,085 
The accompanying notes to unauditedare an integral part of these condensed consolidated financial statements.


6
NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements
(In thousands, except share and per share data)

Table of Contents

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Unaudited Financial Statements
NOTE 1 — Description of Business and basis of presentation

Description of Business
Gannett Co., Inc. ("Gannett", "we", "us", "our", or the "Company") is a subscription-led and digitally-focused media and marketing solutions company committed to empowering communities to thrive. We aim to be the premier source for clarity, connections and solutions within our communities. Our strategy is focused on driving audience growth and engagement by delivering deeper content experiences to our consumers, while offering the products and marketing expertise our advertisers desire. The accompanying unauditedexecution of this strategy is expected to allow the Company to continue its evolution from a more traditional print media business to a digitally-focused content platform.

Our current portfolio of media assets includes USA TODAY, local media organizations in 46 states in the U.S., and Newsquest, a wholly-owned subsidiary operating in the United Kingdom (the "U.K.") with more than 120 local media brands. Gannett also owns the digital marketing services companies ReachLocal, Inc. ("ReachLocal"), UpCurve, Inc. ("UpCurve"), and WordStream, Inc. ("WordStream"), which are marketed under the LOCALiQ brand, and runs the largest media-owned events business in the U.S., USA TODAY NETWORK Ventures.

Through USA TODAY, our local property network, and Newsquest, Gannett delivers high-quality, trusted content where and when consumers want to engage on virtually any device or platform. Additionally, the Company has strong relationships with thousands of local and national businesses in both our U.S. and U.K. markets due to our large local and national sales forces and a robust advertising and marketing solutions product suite. The Company reports in 2 segments: Publishing and Digital Marketing Solutions ("DMS"). A full description of our segments is included in Note 13 — Segment reporting in the notes to the condensed consolidated financial statements.

Impacts of the COVID-19 pandemic

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

We have implemented, and continue to implement, measures to reduce costs and preserve cash flow. These measures include, evaluating and applying for all governmental relief programs for which we are eligible, including the Paycheck Protection Program ("PPP"), suspension of the quarterly dividend and refinancing of our debt, as well as reductions in discretionary spending. In addition, we are continuing with our previously disclosed plan to monetize non-core assets.

In connection with the CARES Act, we have received $16.4 million in PPP funding in support of certain of our locations that were meaningfully affected by the COVID-19 pandemic. As of June 30, 2021, PPP loans of $16.4 million are included in Other long-term liabilities in the condensed consolidated balance sheets and in Operating activities in the condensed consolidated statements of cash flows. Interest expense related to PPP funding was immaterial for the three and six months ended June 30, 2021. Management intends to apply for forgiveness of the PPP loans in accordance with applicable guidelines.

Basis of presentation

Our condensed consolidated financial statements of New Media Investment Group Inc. and its subsidiaries (together, the “Company” or “New Media”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and applicable provisions of Regulation S-X, each as promulgated by the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in comprehensive annual financial statements presented in accordance with GAAP have generally been condensed or omitted pursuant to SEC rules and regulations.
Management believes that the accompanying condensed consolidated financial statements contain all adjustments (which include normal recurring adjustments) that,are unaudited; however, in the opinion of management, arethey contain all of the adjustments (consisting of those of a normal, recurring nature) considered necessary to present fairly the Company’s consolidated financial condition,position, results of operations, and cash flows for the periods presented.presented in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") applicable to interim periods. All significant intercompany accounts and transactions have been eliminated in consolidation. The resultsCompany consolidates entities that it controls due to ownership of operations for interim periods are not necessarily indicative of the results that may be expected for the full year. Thesea majority voting interest. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notesincluded in our Annual Report on Form 10-K for the year ended December 25, 2016, included in the Company’s Annual Report on Form 10-K.31, 2020.
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Use of estimates

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported amounts of assets and liabilities and disclosure of contingent assets and liabilities atin the date of theunaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.footnotes thereto. Actual results could differ from those estimates.
New Media was formed as a Delaware corporation on June 18, 2013. New Media was capitalized by and issued 1,000 common shares to Newcastle Investment Corp. (“Newcastle”). New Media had no operations until November 26, 2013, when it assumed control of GateHouse Media, Inc. ("GateHouse") and Local Media Group Holdings LLC.  GateHouse was determined to be the predecessor to New Media, as the operations of GateHouse comprise substantially all of the business operations of the combined companies. Newcastle owned approximately 84.6% of New Media until February 13, 2014, upon which date Newcastle distributed the shares that it held in New Media to its shareholders on a pro rata basis.
The Company’s operating segments (Eastern US Publishing ("East"), Central US Publishing ("Central"), Western US Publishing ("West"), and BridgeTower) are aggregated into one reportable segment.
The newspaper industry and the Company have experienced declining revenue and profitability over the past several years. As a result, the Company has implemented, and continues to implement, plans to reduce costs and preserve cash flow. This includes cost-reduction programs and the sale of non-core assets. The Company believes these initiatives along with cash provided by operating activities will provide it with the financial resources necessary to investSignificant estimates inherent in the business and provide sufficient cash flow to enable the Company to meet its commitments. However, the Company did recognize goodwill and mastheads impairments during the second quarter of 2017. Refer to Note 5 for further discussion.
Long-Lived Asset Impairment
As partpreparation of the ongoing cost reduction programs, the Company is consolidating print facilities, and during the nine months ended September 24, 2017, the Company ceased printing operations at 12 facilities.  As a result, the Company recognized an impairment charge of $6,485 and accelerated depreciation of $2,429 during the nine months ended September 24, 2017.
Dispositions
On June 2, 2017, the Company completed its sale of the Mail Tribune, located in Medford, Oregon, for approximately $14,700, including estimated working capital.  As a result, a pre-tax gain of approximately $5,400, net of selling expenses, is included in (Gain) Loss on sale or disposal of assets on the Consolidated Statement of Operations and Comprehensive (Loss) Income since the disposition did not qualify for treatment as a discontinued operation.
Reclassifications


Certain amounts in the prior period's condensed consolidated financial statements have been reclassifiedinclude pension and postretirement benefit obligation assumptions, income taxes, goodwill and intangible asset impairment analysis, valuation of property, plant and equipment and intangible assets and the mark to conform tomarket of the current year presentation.conversion feature associated with the convertible debt.
Recently Issued
Recent accounting pronouncements adopted

Simplifying the Accounting Pronouncementsfor Income Taxes

In May 2014,December 2019, the Financial Accounting Standards Board (“FASB”(the "FASB") issued new guidance that simplifies the accounting for income taxes. The guidance amends the rules for recognizing deferred taxes for investments, performing intraperiod tax allocations and calculating income taxes in interim periods. It also reduces complexity in certain areas, including accounting for transactions that result in a step-up in the tax basis of goodwill and allocating taxes to members of a consolidated group. This guidance is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. While adopting this guidance allowed the Company to record a tax benefit for the first quarter of 2021 because year-to-date losses on interim periods are no longer limited to losses annually forecasted, it did not have a material impact on the Company's condensed consolidated financial statements in the second quarter of 2021.

Recent accounting pronouncements not yet adopted

Accounting Standards Update (“ASU”for Convertible Instruments and Contracts in an Entity’s Own Equity

In August 2020, the FASB issued new guidance ("ASU 2020-06") No. 2014-09, “Revenue from Contractsthat simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. In addition to eliminating certain accounting models, the guidance amends the disclosures for convertible instruments and earnings-per-share guidance. It also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. This guidance is effective for fiscal years beginning after December 15, 2023, with Customers” (Topic 606 or ASU 2014-09). ASU 2014-09 will replace all current U.S. GAAPearly adoption permitted no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company does not expect the adoption of this guidance to have a material impact on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determinethe condensed consolidated financial statements.

NOTE 2 — Revenues

Revenues are recognized when and how revenue is recognized. The core principle is that a company should recognize revenue to depictcontrol of the transfer of promised goods or services is transferred to customers, in an amount that reflects the consideration to which the entityCompany expects to be entitled to in exchange for those goods or services. In March 2016,

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

Three months ended June 30,Six months ended June 30,
In thousands2021202020212020
Print advertising$200,925 $188,158 $394,121 $456,000 
Digital advertising and marketing services219,185 168,760 414,346 387,929 
Total advertising and marketing services420,110 356,918 808,467 843,929 
Circulation310,259 342,646 635,696 717,369 
Other73,906 67,436 137,196 154,385 
Total revenues$804,275 $767,000 $1,581,359 $1,715,683 

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For both the FASB issued ASU No. 2016-08, “Revenuethree and six months ended June 30, 2021, approximately 8% of revenues were generated from Contractsinternational locations. For the three and six months ended June 30, 2020, approximately 6% and 7% of revenues, respectively, were generated from international locations.

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 Customers - Principal versus Agent Considerations” (ASU 2016-08), which clarifies the implementation guidance on principal versus agent considerations. During 2016,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 establishedrequires payment before the products or services are delivered to the customer.The majority of our subscription customers are billed and pay on monthly terms.

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

Six months ended June 30, 2021Six months ended June 30, 2020
In thousandsAdvertising, Marketing Services, and OtherCirculationTotalAdvertising, Marketing Services, and OtherCirculationTotal
Beginning balance$51,686 $134,321 $186,007 $67,543 $151,280 $218,823 
Cash receipts132,167 512,262 644,429 141,146 595,078 736,224 
Revenue recognized(130,545)(515,272)(645,817)(144,172)(596,887)(741,059)
Ending balance$53,308 $131,311 $184,619 $64,517 $149,471 $213,988 

NOTE 3 — Leases

We lease certain real estate, vehicles, and equipment. Our leases have remaining lease terms of one to fifteen 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 project teamtransfer of title or purchase option reasonably certain of exercise.

As of June 30, 2021, our condensed consolidated balance sheets included $278.4 million of operating lease right-to-use assets, $43.3 million of short-term operating lease liabilities included in Other current liabilities, and $262.4 million of long-term operating lease liabilities.

The components of lease expense are as follows:
Three months ended June 30,Six months ended June 30,
In thousands2021202020212020
Operating lease cost (a)
$19,978 $21,872 $40,649 $41,505 
Short-term lease cost (b)
423 1,345 565 4,487 
Variable lease cost2,637 2,565 5,721 6,816 
Net lease cost$23,038 $25,782 $46,935 $52,808 
(a)Includes sublease income of $1.8 million and $0.9 million for the three months ended June 30, 2021 and 2020, respectively, and $3.0 million and $2.0 million for the six months ended June 30, 2021 and 2020, respectively.
(b)Excluding expenses relating to identify potential differencesleases with a lease term of one month or less.

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Future minimum lease payments under non-cancellable leases are as follows:
In thousands
Year ended
December 31, (a)
2021 (excluding the six months ended June 30, 2021)$34,897 
202279,073 
202366,118 
202458,535 
202549,499 
Thereafter206,312 
Total future minimum lease payments494,434 
Less: Imputed interest(188,726)
Total$305,708 
(a)Operating lease payments exclude $13.8 million of legally binding minimum lease payments for leases signed but not yet commenced.

Supplemental information related to leases is as follows:
Six months ended June 30,
In thousands, except lease term and discount rate20212020
Cash paid for amounts included in the measurement of operating lease liabilities$43,076 $38,989 
Right-of-use assets obtained in exchange for operating lease obligations15,289 14,610 
Loss on sale and leaseback transactions, net2,014 0 
As of June 30,
20212020
Weighted-average remaining lease term (in years)7.57.9
Weighted-average discount rate12.82 %12.78 %

NOTE 4 — Accounts receivable, net

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

The following table presents changes in the allowance for doubtful accounts for the six months ended June 30, 2021 and 2020:
Six months ended June 30,
In thousands20212020
Beginning balance$20,843 $19,923 
Current period provision681 17,345 
Write-offs charged against the allowance(5,943)(12,019)
Recoveries of amounts previously written-off2,296 1,467 
Foreign currency78 (156)
Ending balance$17,955 $26,560 

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,
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receivables in repayment plan and other aging specific reserves. As a result from the application of this standard.  Based upon our initial evaluation,analysis, the Company does not expectadjusts specific reserves and the adoptionamount of ASU 2014-09allowable credit as appropriate. The collectability of trade receivables related to haveadvertising, marketing services and other customers depends on a material effectvariety of factors, including trends in the local and general 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 its financial condition or results of operations. Whilethe related receivables. Similarly, while circulation revenues related to individual subscribers are primarily prepaid, changes in economic conditions may also affect our ability to collect on amounts owed from single copy circulation customers.

For the three and six months ended June 30, 2021, the Company continuesrecorded $2.9 million and $0.7 million in bad debt expense, respectively. For the three and six months ended June 30, 2020, the Company recorded $12.2 million and $17.3 million in bad debt expense, respectively. Bad debt expense is included in Selling, general and administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss). For the three months ended June 30, 2021, the Company recorded an increase in bad debt expense due to evaluatean increase in revenues and the related increase in accounts receivable. For the six months ended June 30, 2021, the Company recorded an overall reduction to bad debt expense compared to the six months ended June 30, 2020, due to a reduction in required reserves. The reduction in required reserves for the six months ended June 30, 2021 was due to a lower volume of accounts receivable due to seasonality, higher recoveries, and lower write-offs compared to the corresponding prior year period.

NOTE 5 — Goodwill and intangible assets

Goodwill and intangible assets consisted of the following:
June 30, 2021December 31, 2020
 In thousandsGross carrying amountAccumulated
amortization		Net carrying
amount		Gross carrying amountAccumulated
amortization		Net carrying
amount
Finite-lived intangible assets:
Advertiser relationships$458,584 $134,297 $324,287 $460,331 $112,468 $347,863 
Other customer relationships102,914 29,587 73,327 102,925 23,682 79,243 
Subscriber relationships255,443 85,825 169,618 255,702 71,271 184,431 
Other intangible assets68,687 36,390 32,297 68,687 26,982 41,705 
Sub-total$885,628 $286,099 $599,529 $887,645 $234,403 $653,242 
Indefinite-lived intangible assets:
Mastheads171,282 171,408 
Total intangible assets$770,811 $824,650 
Goodwill$534,218 $534,088 

Consistent with the Company’s past practice, the Company performed its annual goodwill and indefinite-lived intangible impairment assessment in the second quarter of 2021 with the assistance of third-party valuation specialists. Within the impairment analyses performed, the Company considered the current and expected future economic and market conditions and the impact of the new revenue guidance, it currently believes that the most significant changes will be primarily related to how the Company accounts for certain reseller arrangements. However, preliminary assessments may be subject to change.  The Company will adopt the requirements of the new standard on January 1, 2018 and anticipates using the modified retrospective transition method.

In February 2016, the FASB issued ASU No. 2016-02, “Leases” (Topic 842), which revises the accounting related to lessee accounting. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases with terms greater than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The provisions of ASU 2016-02 are effective for fiscal years beginning after December 15, 2018 and should be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the impact this accounting standard will have on the Company’s consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, “Restricted Cash” (Topic 230), which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents. The provisions of ASU 2016-18 are effective for fiscal years beginning after December 15, 2017 and should be applied using a retrospective transition method. Early adoption is permitted. Other than the revised statement of cash flows presentation, the adoption of ASU 2016-18 is not expected to have a material impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations - Clarifying the Definition of a Business” (Topic 805), which clarifies the definition of a business for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new standard is effective for annual periods beginning after December 15, 2017, with early adoption permitted for transactions that occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. The standard must be applied prospectively. The Company is currently evaluating the impact this accounting standard will have on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04 “Intangibles - Goodwill and Other - Simplifying the Test for Goodwill Impairment” (Topic 350), which simplifies subsequent goodwill measurement by eliminating Step 2 from the goodwill impairment test. Under this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceedseach of the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.units. The new standard is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019, with early adoption permitted for annual goodwill impairment tests performed after January 1, 2017. The standard must be applied prospectively. The Company early-adopted the guidance of this accounting standard during the second quarter of fiscal 2017 in connection with its annual impairment testing to reduce the complexity and costs of evaluating goodwill for impairment. It was adopted on a prospective basis. As a result of the adoption, a single step quantitative test was performed. Refer to Note 5 for further discussion.



In March 2017, the FASB issued ASU No. 2017-07 “Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (Topic 715), which provides guidance that requires an employer to report the service cost component separate from the other components of net benefit pension costs. The employer is required to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside the subtotal of income from operations, if one is presented. If a separate line item is not used, the line item used in the income statement must be disclosed. The new standard is effective for annual reporting periods beginning after December 15, 2017 and interim periods within those years. Early adoption is permitted. Other than the revised statement of operations presentation, the adoption of ASU 2017-07 is not expected to have a material impact on the Company’s consolidated financial statements.

All other issued and not yet effective accounting standards are not relevant to the Company.
(2) Acquisitions
2017 Acquisitions
The Company acquired substantially all the assets, properties and business of certain publications and businesses on July 6, 2017, June 30, 2017, February 10, 2017, and January 31, 2017 (“2017 Acquisitions”), which included four business publications, 10daily newspapers, 15 weekly publications, 11 shoppers, and an event production business for an aggregate purchase price of $40,590, including estimated working capital. The acquisitions were financed from cash on hand. The rationale for the acquisitions was primarily due to the attractive nature, as applicable, of the newspaper assets and event production business, and cash flows combined with cost-saving and revenue-generating opportunities available.
The Company accounted for the 2017 Acquisitions under the acquisition method of accounting. The net assets, including goodwill, have been recorded in the consolidated balance sheet at their fair values in accordance with Accounting Standards Codification ("ASC") 805, “Business Combinations” (“ASC 805”). The fair value determination of the assets acquired and liabilities assumed are preliminary based upon all information available to us at the present time and are subject to working capital and other adjustments and subject to the completion of valuations to determine the fair market value of these tangible and intangible assets. The final calculation of working capital and other adjustments and determination of fair values for tangible and intangible assets may result in different allocations among the various asset classes from those set forth below and any such differences could be material.
The following table summarizes the preliminary fair values of the assets and liabilities:
Current assets$6,749
Other assets4
Property, plant and equipment33,629
Noncompete agreements230
Advertiser relationships1,306
Subscriber relationships669
Customer relationships202
Mastheads2,292
Goodwill3,034
Total assets48,115
Current liabilities7,525
Total liabilities7,525
Net assets$40,590
The Company obtained third party independent valuations or performed similar calculations internally to assistmost significant assumptions utilized in the determination of the estimated fair values of certain assets acquired and liabilities assumed. Three basic approaches were used to determine value: the cost approach (used for equipment where an active secondary market is not available, building improvements, and software), the direct sales comparison (market) approach (used for land and equipment where an active secondary market is available) and the income approach (used for intangible assets).


The Company recorded approximately $449 and $627 of selling, general and administrative expense for acquisition-related costs for the 2017 Acquisitions during the three and nine months ended September 24, 2017, respectively.
For tax purposes, the amount of goodwill that is expected to be deductible is $3,034.
2016 Acquisitions
The Company acquired substantially all the assets, properties and business of certain publications and businesses on December 31, 2015, January 12, 2016, March 18, 2016, April 22, 2016, April 29, 2016, June 29, 2016, August 1, 2016, September 30, 2016, and November 30, 2016 (“2016 Acquisitions”), which included 68 business publications, sevendaily newspapers, seven weekly publications, 11 shoppers, and digital platforms for an aggregate purchase price of $135,908, including working capital. The acquisitions were financed from cash on hand. The rationale for the acquisitions was primarily due to the attractive nature, as applicable, of the newspaper assets and digital platforms,include revenue and cash flows combined with cost-savingflow projections, discount rates and revenue-generating opportunities available.
long-term growth rates. The long-term growth rates are dependent on overall market growth rates, the competitive environment, inflation and relative currency exchange rates and could be adversely impacted by a sustained decrease in any of these measures, all of which the Company accounted forconsidered in determining the 2016 Acquisitions under the acquisition method of accounting. The net assets, including goodwill, have been recordedlong-term growth rates used in the consolidated balance sheet at their fair values in accordance with ASC 805. The fair value determination of the assets acquired and liabilities assumed are subjectanalysis, which ranged from negative 0.5% to working capital and other adjustments.
The following table summarizes the fair values of the assets and liabilities:
Current assets$20,820
Other assets4,195
Property, plant and equipment36,105
Noncompete agreements886
Advertiser relationships32,312
Subscriber relationships13,696
Customer relationships5,113
Software5,783
Trade names2,448
Mastheads9,217
Goodwill56,749
Total assets187,324
Current liabilities26,532
Pension obligations16,299
Other long-term liabilities8,585
Total liabilities51,416
Net assets$135,908
The Company obtained third party independent valuations or performed similar calculations internally to assist in the determination of the fair values of certain assets acquired and liabilities assumed. Three basic approaches were used to determine value: the cost approach (used for equipment where an active secondary market is not available, building improvements, and software), the direct sales comparison (market) approach (used for land and equipment where an active secondary market is available) and the income approach (used for intangible assets)positive 3.0%. The obligation assumed for the defined benefit pension plan was measured in accordance with ASC 715-20, “Compensation-Retirement Benefits”.
The Company recorded approximately $2,093 of selling, general and administrative expense for acquisition-related costs for the 2016 Acquisitions.
In a 2016 stock acquisition, the Company acquired goodwill with a tax cost basis of $50,325 and a net tax basis of $10,746. As a result, for tax purposes, the amount of goodwill that is expected to be deductible for the 2016 Acquisitions is $43,103.
(3) Share-Based Compensation


The Company recognized compensation cost for share-based payments of $769, $609, $2,364, and $1,846 during the three and nine months ended September 24, 2017 and September 25, 2016, respectively. The total compensation cost not yet recognized related to non-vested awards as of September 24, 2017 was $4,237,discount rate, which is expected to be recognized over a weighted average period of 1.82 years through July 2020.
On February 3, 2014, the Board of Directors of New Media (the “Board” or “Board of Directors”) adopted the New Media Investment Group Inc. Nonqualified Stock Option and Incentive Award Plan (the “Incentive Plan”) that authorized up to 15,000,000 shares that can be granted under the Incentive Plan. On the same date, the Board adopted a form of the New Media Investment Group Inc. Non-Officer Director Restricted Stock Grant Agreement (the “Form Grant Agreement”) to govern the terms of awards of restricted stock (“New Media Restricted Stock”) granted under the Incentive Plan to directors who are not officers or employees of New Media (the “Non-Officer Directors”). On February 24, 2015, the Board adopted a form of the New Media Investment Group Inc. Employee Restricted Stock Grant Agreement (the “Form Employee Grant Agreement”) to govern the terms of awards of New Media Restricted Stock granted under the Incentive Plan to employees of New Media and its subsidiaries (the “Employees”). Both the Form Grant Agreement and the Form Employee Grant Agreement provide for the grant of New Media Restricted Stock that vests in equal annual installments on each of the first, second and third anniversaries of the grant date, subject to continued service, and immediate vesting in full upon death or disability. If service terminates for any other reason, all unvested shares of New Media Restricted Stock will be forfeited. During the period prior to the lapse and removal of the vesting restrictions, a grantee of a restricted stock grant (“RSG”) will have all the rights of a stockholder, including without limitation, the right to vote and the right to receive all dividends or other distributions. Any dividends or other distributions that are declared with respect to the shares of New Media Restricted Stock will be paid at the time such shares vest. The value of the RSGs on the date of issuance is recognized as selling, general and administrative expense over the vesting period with an increase to additional paid-in-capital.
During the three months ended March 26, 2017, grants of restricted shares totaling 182,035 shares were made to the Company’s Employees, and 24,976 shares were forfeited. During the three months ended September 24, 2017, grants of restricted shares totaling 3,647 shares were made to the Company's Employees, and 19,300 shares were forfeited.
As of September 24, 2017 and September 25, 2016, there were 349,781 and 330,388 RSGs, respectively, issued and outstandingconsistent with a weighted average grant datecost of capital that is likely to be expected by a market participant, is based upon industry required rates of return, including consideration of both debt and equity components of the capital structure. The discount rate 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 analysis, which ranged from 11.0% to 15.0%.

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For goodwill, the Company determined the fair value of $16.83each reporting unit using a combination of a discounted cash flow analysis and $18.24, respectively.a market-based approach. During the second quarter of 2021, the Company compared the fair value of each reporting unit to its carrying amount, which resulted in the fair value of all the reporting groups 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 fair value of the indefinite-lived intangible assets. During the second quarter of 2021, 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, which would require interim impairment testing. As of September 24, 2017,June 30, 2021, the aggregate intrinsic valueCompany performed a review of unvested RSGspotential impairment indicators and it was $4,970.determined that no indicators of impairment were present.
RSG activity during
During the nine months ended September 24, 2017 wassecond quarter of 2020, the Company recorded goodwill impairment charges of $256.5 million, $65.4 million and $40.5 million in our Domestic Publishing, Newsquest and Marketing Solutions reporting units, respectively, and recorded indefinite-lived impairments of $4.0 million in both our Domestic Publishing and Newsquest reporting units, as follows:a result of the annual impairment assessment. During the second quarter of 2020, the Company considered the impact of the COVID-19 pandemic on the Company’s operations to be an indicator of impairment under ASC 360, and as such, the Company recorded an intangible asset impairment of $23.0 million related to advertiser and other customer relationships.

NOTE 6 — Integration and reorganization costs and asset impairments
 Number of RSGs 
Weighted-Average
Grant Date
Fair Value
Unvested at December 25, 2016335,593
 $18.18
Granted185,682
 15.85
Vested(127,218) 18.93
Forfeited(44,276) 16.95
Unvested at September 24, 2017349,781
 $16.83
FASB ASC Topic 718, “Compensation – Stock Compensation”, requires the recognition of share-based compensation for the number of awards that are ultimately expected to vest. The Company’s estimated forfeitures are based on historical forfeiture rates. Estimated forfeitures are reassessed periodically, and the estimate may change based on new facts and circumstances.
(4) Restructuring
Over the past several years, and in furtherance of the Company’s cost-reduction and cash-preservation plans outlined in Note 1, the Company has engaged in a series of individual restructuring programs, designed primarily to right sizeright-size the Company’s employee base, consolidate facilities and improve operations, including those of recently acquired entities. These initiatives impact all of the Company’s geographic regionsoperations and are oftencan be influenced by the terms of union contracts within the region. All costscontracts. Costs related to these programs, which primarily reflectinclude severance expense, are accrued when probable and reasonably estimable or at the time of announcement or over the remaining service period.program announcement.

Severance-related expenses

We recorded severance-related expenses by segment as follows:
Three months ended June 30,Six months ended June 30,
In thousands2021202020212020
Publishing$1,405 $19,142 $8,184 $31,418 
Digital Marketing Solutions(24)2,753 (81)4,137 
Corporate and other(252)3,847 123 11,966 
Total$1,129 $25,742 $8,226 $47,521 

A rollforward of the accrued restructuringseverance and related costs included in Accounts payable and accrued expenses on the condensed consolidated balance sheet,sheets for the ninesix months ended September 24, 2017June 30, 2021 is outlined below.as follows:


 
Severance and
Related Costs
 
Other
Costs (1)
 Total
Balance at December 25, 2016$1,178
 $356
 $1,534
Restructuring provision included in Integration and Reorganization6,029
 788
 6,817
Cash payments(5,543) (1,106) (6,649)
Balance at September 24, 2017$1,664
 $38
 $1,702
(1)
In thousands		OtherSeverance and
Related Costs
Beginning balance$30,943 
Restructuring provision included in integration and reorganization costs primarily included costs to consolidate operations.8,226 
Cash payments(25,527)
Ending balance$13,642 

The restructuring reserve balance is expected to be paid out over the next twelve months.
The following table summarizes the
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Facility consolidation and other restructuring-related expenses

We recorded facility consolidation charges and other restructuring-related costs incurred and cash paid in connection with these restructuring programs for the three and nine months ended September 24, 2017 and September 25, 2016.
 Three months ended September 24, 2017 Three months ended September 25, 2016 Nine months ended September 24, 2017 Nine months ended September 25, 2016
Severance and related costs$1,947
 $4,666
 $6,029
 $6,356
Severance and other costs assumed from acquisition—
 —
 —
 95
Other costs263
 531
 788
 1,176
Cash payments(2,465) (2,374) (6,649) (6,257)


(5) Goodwill and Intangible Assets
Goodwill and intangible assets consisted of the following:
 September 24, 2017
 
Gross carrying
amount
 
Accumulated
amortization
 
Net carrying
amount
Amortized intangible assets:     
Advertiser relationships$176,224
 $33,471
 $142,753
Customer relationships25,140
 4,475
 20,665
Subscriber relationships91,613
 18,680
 72,933
Other intangible assets9,819
 3,902
 5,917
Total$302,796

$60,528

$242,268
Nonamortized intangible assets:   
Goodwill$202,388
 
Mastheads95,205
 
Total$297,593
 
  
 December 25, 2016
 Gross carrying
amount		 Accumulated
amortization		 Net carrying
amount
Amortized intangible assets:     
Advertiser relationships$174,918
 $24,618
 $150,300
Customer relationships24,938
 3,153
 21,785
Subscriber relationships90,944
 13,911
 77,033
Other intangible assets9,589
 1,950
 7,639
Total$300,389

$43,632

$256,757
Nonamortized intangible assets:   
Goodwill$227,954
 
Mastheads94,720
 
Total$322,674
 
As of September 24, 2017, the weighted average amortization periods for amortizable intangible assets are 15.1 years for advertiser relationships, 15.2 years for customer relationships, 14.5 years for subscriber relationships and 5.0 years for other intangible assets. The weighted average amortization period in total for all amortizable intangible assets is 14.6 years.
Amortization expense for the three and nine months ended September 24, 2017 and September 25, 2016 was $5,672, $5,407, $16,896, and $15,097, respectively. Estimated future amortization expense as of September 24, 2017, isby segment as follows:
Three months ended June 30,Six months ended June 30,
In thousands2021202020212020
Publishing$(1,602)$1,477 $(1,055)$2,509 
Digital Marketing Solutions228 209 451 214 
Corporate and other8,689 4,878 14,226 10,316 
Total$7,315 $6,564 $13,622 $13,039 
For the following fiscal years: 
2017$5,655
201822,625
201920,967
202020,269
202120,262
Thereafter152,490
Total$242,268


Asset impairments

The changes in the carrying amount of goodwill for the period from December 25, 2016 to September 24, 2017 are as follows:
Balance at December 25, 2016$227,954
Goodwill acquired in business combinations2,870
Goodwill impairment(25,641)
Goodwill from divestitures(2,795)
Balance at September 24, 2017$202,388
The Company’s annual impairment assessment is made on the last day of its fiscal second quarter.
The carrying value of goodwill and indefinite-lived intangible assets are evaluated for possible impairment on an annual basis or between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or indefinite-lived intangible asset below its carrying value. The Company adopted ASU 2017-04 in the second quarter and performed a quantitative goodwill impairment test to identify the existence of impairment, if any, and the amount of impairment loss. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.
As part of ongoing cost efficiency programs, during the annualsix months ended June 30, 2021 the Company recorded Asset impairment assessments,charges of $0.8 million at the Publishing segment related to various real estate sales. During both the three and six months ended June 30, 2020, the Company recorded $6.9 million of Asset impairment charges at the Publishing segment as of June 25, 2017, the fair values of the Company’s reporting units, which include East, West, Central and BridgeTower, for goodwill impairment testing and indefinite-lived intangible assets, which include newspaper mastheads, were estimated using the expected present value of future cash flows, recent industry multiples and using estimates, judgments and assumptions that management believes were appropriate in the circumstances. The estimates and judgments used in the assessment included multiples for EBITDA, the weighted average cost of capital and the terminal growth rate. The Company determined that the future cash flow and industry multiple analyses provided the best estimate of the fair value of its reporting units.  As a result of the annual assessment, the Company recorded a goodwill impairment in two of its reporting units, Central and West,Company's recoverability test for a total of $25,641. The impairment is primarily due to continuing economic pressures in the newspaper industry and a decline in the Company's stock price. Key assumptions in the impairment analysis include revenue and EBITDA projections, discount rates, long-term growth rates and the effective tax rate that the Company determined to be appropriate. Revenue projections reflected slight declines in the current and next year, and revenues are expected to moderate to a terminal growth rate of 1%. Discount rates ranged from 16% to 17%. The effective tax rate was 40%.long-lived assets.

Accelerated depreciation

The total Company’s estimateCompany incurred accelerated depreciation of reporting unit fair values was reconciled$1.1 million and $11.0 million for the three months ended June 30, 2021 and 2020, respectively, and $10.3 million and $35.8 million for the six months ended June 30, 2021 and 2020, respectively, related to its then market capitalization (based upon the stock market price and fair valueshortened useful life of debt) plus an estimated control premium.
The Company used a “relief from royalty” approach, a discounted cash flow model, to determine the fair value of each reporting unit's mastheads.  The estimated fair value exceeded carrying value for mastheads except in the West reporting unit, which recognized an impairment charge of $1,807. This is primarilyassets due to a decrease in sales, mostly related to the sale of property at the Mail Tribune in Medford, Oregon,Publishing segment and declining profitability. The fair valueincluded within Depreciation and amortization expense on the condensed consolidated statements of mastheads exceeded carrying value by less than 10% in the Eastoperations and Central reporting units. Key assumptions within the masthead analysis included revenue projections, discount rates, royalty rates, long-term growth rates and the effective tax rate thatcomprehensive income (loss).

NOTE 7 — Debt

Senior Secured 5-Year Term Loan

On February 9, 2021, the Company determined to be appropriate. Revenue projections reflected declines in the current and next year, and revenues are expected to moderate to a terminal growth rate of 1%. Discount rates ranged from 16% to 17%, and royalty rates ranged from 1.25% to 1.75%. The effective tax rate was 40%.
The Company considered the impairment of goodwill in the second quarter to be a potential indicator of impairment under ASC 360. The Company determined that the long-lived asset groups were the same as its reporting units. The Company performed an analysis of its undiscounted cash flows in the Central and West reporting units to determine if there was an impairment of long-lived assets. The sum of undiscounted cash flows over the primary asset’s weighted-average remaining useful life exceeded the groups’ carrying value, and, accordingly, no impairment was recorded in the second quarter.
As of September 24, 2017, a review of impairment indicators was performed by the Company noting that its financial results and forecast had not changed materially since the annual impairment test, and it was determined that no indicators of impairment were present.


The newspaper industry and the Company have experienced declining same store revenue and profitability over the past several years. Should general economic, market or business conditions decline, and have a negative impact on estimates of future cash flow and market transaction multiples, the Company may be required to record impairment charges in the future.
(6) Indebtedness
New Media Credit Agreement
On June 4, 2014, New Media Holdings II LLC (the “New Media Borrower”), a wholly owned subsidiary of New Media, entered into a credit agreement (the “New Media Credit Agreement”) among the New Media Borrower, New Media Holdings I LLC (“Holdings I”), the lenders party thereto, RBS Citizens, N.A. and Credit Suisse Securities (USA) LLC as joint lead arrangers and joint bookrunners, Credit Suisse AG, Cayman Islands Branch as syndication agent and Citizens Bank of Pennsylvania as administration agent which provided for (i) a $200,000 senior securedfive-year, senior-secured term facility (the “Term Loan Facility” and any loan thereunder, including as part of the Incremental Facility, “Term Loans”), (ii) a $25,000 senior secured revolving credit facility with a $5,000 sub-facility for letters of credit and a $5,000 sub-facility for swing loans, (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Senior Secured Credit Facilities”) and (iii) the ability for the New Media Borrower to request one or more new commitments for term loans or revolving loanslenders from time to time up to an aggregate total of $75,000 (the “Incremental Facility”) subject to certain conditions. On June 4, 2014, the New Media Borrower borrowed $200,000 under the Term Loan Facility (the “Initial Term Loans”). As of September 24, 2017, $0 was drawn under the Revolving Credit Facility. The Term Loans mature on July 14, 2022party thereto and the maturity dateCitibank, N.A., as collateral agent and administrative agent for the Revolving Credit Facility is July 14, 2021. The New Media Credit Agreement was amended:
•on September 3, 2014, to provide for additional term loans under the Incremental Facilitylenders, in an aggregate principal amount of $25,000$1.045 billion (the “2014 Incremental"5-Year Term Loan”Loan");
•. The 5-Year Term Loan matures on November 20, 2014, to increaseFebruary 9, 2026 and, at the amountCompany's option, bears interest at the rate of the Incremental Facility that may be requested afterLondon Interbank Offered Rate plus a margin equal to 7.00% per annum or an alternate base rate plus a margin equal to 6.00% per annum. Accordingly, we are required to dedicate a substantial portion of cash flow from operations to fund interest payments. Interest on the date5-Year Term Loan is payable at least every three months in arrears, beginning in May 2021.

The proceeds from the 5-Year Term Loan were used to repay the remaining principal balance and accrued interest of $1.043 billion and $13.3 million, respectively, (the "Payoff") on the amendment from $75,000 to $225,000;
•on January 9, 2015, to provide for $102,000 in additionalCompany's five-year, senior-secured 11.5% term loansloan facility with Apollo Capital Management, L.P. (the “2015 Incremental"Acquisition Term Loan”Loan") and $50,000to pay fees and expenses incurred to obtain the 5-Year Term Loan.

There were certain lenders that participated in additional revolving commitments (the “2015 Incremental Revolver”) underboth the Incremental Facility and to make certain amendments to the Revolving Credit Facility in connection with the purchase of the assets of Halifax Media;
•on February 13, 2015, to provide for the replacement of the existing term loans under the Term Loan Facility (including the 2014 IncrementalAcquisition Term Loan and the 2015 Incremental Term Loan) with a new class of replacement term loans;
•on March 6, 2015, to provide for $15,000 in additional revolving commitments under the Incremental Facility;
•on May 29, 2015, to provide for $25,000 in additional term loans under the Incremental Facility; and
•on July 14, 2017, to (i) extend the maturity date of the outstanding term loans under the5-Year Term Loan Facilityand their balances in the Acquisition Term Loan were deemed to July 14, 2022, (ii) extendbe modified. The Company will continue to defer, over the maturity datenew term, the deferred financing fees and original issue discount from the Acquisition Term Loan of $1.5 million and $34.7 million, respectively, related to those lenders. Further, certain lenders in the Revolving Credit FacilityAcquisition Term Loan did not participate in the new 5-Year Term Loan and their balances in the Acquisition Term Loan were deemed to July 14, 2021, (iii) provide for $20,000 in additional term loans (the “2017 Incremental Term Loan”) under the Incremental Facility and (iv) increase the amount of the Incremental Facility that may be requested on or after the date of the amendment (inclusive of the 2017 Incremental Term Loan) to $100,000.
In connection with the July 14, 2017 amendment,extinguished. As a result, the Company incurred approximately $6,605 of fees and expenses. There was one lender who hadrecognized a significant change in the terms of the Term Loan Facility; the difference between the present value of the cash flows after this amendment and the present value of the cash flows before this amendment was more than 10%.  This portion of the transaction was accounted for as an extinguishment under ASC Subtopic 470-50, “Debt Modifications and Extinguishments”. Deferred fees and expenses of $1,009 previously allocated to that lender were written off to lossLoss on early extinguishment of debt.  Additionally,debt of $17.2 million in the currentfirst quarter of 2021 as a result of the write-off of the remaining original issue discount and deferred financing fees related to those lenders. Third party fees of $2,423 attributed to this lenderapproximately $13.0 million were expensed to loss on early extinguishment of debt.  The third party expenses of $121 apportionedallocated to the lender were capitalized.  In addition, $1,335 feesnew lenders in the 5-Year Term Loan on a pro-rata basis, and expenses allocated to lenders that exited the facility were written off to loss on early extinguishment$20.9 million of debt.  The remainder of this amendment was treated as a debt modification for accounting purposes.  The consent fees of $3,020 for the lenders other than the one mentioned aboveoriginal issue discount were capitalized and will be amortized over the term of the 5-Year Term Loan Facility.  The thirdusing the effective interest method. Third party fees of $606 related to these lenders$0.7 million and $10.9 million, which were expensed. Additionally, the fees and expenses allocated to the Revolving Credit Facilitylenders whose balances were deemed to be modified, were expensed and recorded in Other operating expenses in the condensed consolidated statements of $435 were capitalized as this component ofoperations and comprehensive income (loss) for the amendment was accounted for as a debt modification.three and six months ended June 30, 2021, respectively.



Borrowings under theThe 5-Year Term Loan Facility bear interest, at the New Media Borrower’s option, at a rate equal to either (i) an adjusted Eurodollar rate, plus an applicable margin equal to 6.25% per annum (subject to a floor of 1.00%) or (ii) an adjusted base rate, plus an applicable margin equal to 5.25% per annum (subject to a floor of 2.00%). The New Media Borrower currently uses the Eurodollar rate option.
Borrowings under the Revolving Credit Facility bear interest, at the New Media Borrower’s option, at a rate equal to either (i) an adjusted Eurodollar rate, plus an applicable margin equal to 5.25% per annum or (ii) an adjusted base rate, plus an applicable margin equal to 4.25% per annum, with a step down based on achievement of a certain total leverage ratio. The New Media Borrower currently uses the Eurodollar rate option.
As of September 24, 2017 the New Media Credit Agreement had a weighted average interest rate of 7.49%.
The Senior Secured Credit Facilities are unconditionally guaranteed by Holdings I and certain subsidiaries of the New Media Borrower (collectively, the “Guarantors”) and are required to be guaranteed by all future material wholly-owned domestic subsidiaries, subject to certain exceptions. All obligations under the New Media Credit Agreement are secured, subject to certain exceptions, by substantially all of the New Media Borrower’s assets and the assets of the Guarantors.
Repayments made under the Term Loans are equal to 1.0% annually of the original principal amountwill amortize in equal quarterly installments forat a rate of 10% per annum (or, if the liferatio of Total Indebtedness secured on an equal priority basis with the 5-Year Term Loan (net of Unrestricted Cash) to Consolidated EBITDA
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(as such terms are defined in the 5-Year Term Loan) is equal to or less than a specified ratio, 5% per annum) (the "Quarterly Amortization Installment"), beginning September 30, 2021. In addition, we will be required to repay the 5-Year 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 5-Year Term Loan and (iii) the aggregate amount of cash and cash equivalents on hand in excess of $100 million at the end of each fiscal year. The 5-Year Term Loan is subject to a requirement to have minimum unrestricted cash of $30 million as of the Term Loans, with the remainder due at maturity. The New Media Borrower is permitted to make voluntary prepayments at any time without premium or penalty, except in the caselast day of prepayments made in connection with certain repricing transactions with respect to the Term Loans effected within six months of July 14, 2017, to which a 1.00% prepayment premium applies.
The New Media Credit Agreement contains customary representations and warranties and affirmative covenants and negative covenants applicable to Holdings I, the New Media Borrower and the New Media Borrower's subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, fundamental changes, dispositions, and dividends and other distributions, and events of default. The New Media Credit Agreement contains a financial covenant that requires Holdings I, the New Media Borrower and the New Media Borrower’s subsidiaries to maintain a maximum total leverage ratio of 3.25 to 1.00.
each fiscal quarter. As of September 24, 2017,June 30, 2021, the Company is in compliance with all of the covenants and obligations under the New Media Credit Agreement.5-Year Term Loan.
Advantage Credit Agreements
As of June 30, 2021, the Company had $990.5 million in aggregate principal outstanding under the 5-Year Term Loan, $13.2 million of unamortized deferred financing costs, and $47.7 million of unamortized original issue discount and an effective interest rate of 9.5%. During the three months ended June 30, 2021, the Company recorded and paid $20.1 million for interest expense related to the 5-Year Term Loan. During the six months ended June 30, 2021, the Company recorded $31.3 million and $13.4 million of interest expense and paid $20.2 million and $13.4 million of interest for the 5-Year Term Loan and Acquisition Term Loan, respectively. Additionally, during the three and six months ended June 30, 2021, the Company had $2.8 million and $22.2 million, respectively, related to Loss on early extinguishment of debt, which related to the write-off of original issue discount and deferred financing fees as a result of early prepayments on the 5-Year Term Loan and Acquisition Term Loan. Included in the Loss on early extinguishment of debt for the six months ended June 30, 2021, was $17.2 million related to the write-off of the remaining original issue discount and deferred financing fees from the Acquisition Term Loan and approximately $2.2 million related to the write-off of original issue discount and deferred financing fees as a result of early prepayments on the Acquisition Term Loan prior to the Payoff. For the three and six months ended June 30, 2021, the Company recorded $1.0 million and $1.5 million, respectively, of amortization of deferred financing costs, and $3.4 million and $5.3 million, respectively, of amortization of original issue discount, for the 5-Year Term Loan. For the three and six months ended June 30, 2020, the Company recorded $0.3 million and $0.5 million, respectively, of amortization of deferred financing costs, and $5.6 million and $11.3 million, respectively, of amortization of original issue discount for the Acquisition Term Loan.

Under the 5-Year Term Loan, the Company is contractually obligated to make prepayments with the proceeds from asset sales and may elect to make optional payments with excess free cash flow from operations. For the three and six months ended June 30, 2021, we made prepayments totaling $45.8 million and $54.5 million, respectively, which were classified as financing activities in the condensed consolidated statements of cash flows. These amounts are inclusive of both mandatory and optional prepayments.

Senior Secured Convertible Notes due 2027

On November 17, 2020, the Company entered into an Exchange Agreement with certain of the lenders (the "Exchanging Lenders") under the Acquisition Term Loan pursuant to which the Company and the Exchanging Lenders agreed to exchange $497.1 million in aggregate principal amount of the Company’s newly issued 2027 Notes for the retirement of an equal amount of term loans under the Acquisition Term Loan (the "Exchange"). The 2027 Notes were issued pursuant to an Indenture (the "Indenture") dated as of November 17, 2020, between the Company and U.S. Bank National Association, as trustee. The Indenture, as supplemented by the Second Supplemental Indenture, includes affirmative and negative covenants that are substantially consistent with the 5-Year Term Loan, as well as customary events of default.

In connection with the purchaseExchange, the Company entered into an Investor Agreement with the holders of the assets2027 Notes (the "Holders") establishing certain terms and conditions concerning the rights and restrictions on the Holders with respect to the Holders' ownership of Halifax Media,the 2027 Notes.

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 (“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 closedis equal to a conversion price of $5.00 per share of Common Stock (the "Conversion Price").

The conversion rate is subject to customary adjustment provisions as provided in the 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% of the Common Stock after giving effect to such issuance or sale assuming the initial principal amount of the 2027 Notes remains outstanding.

Upon the occurrence of a "Make-Whole Fundamental Change" (as defined in the 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
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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 January 9, 2015, certainor after the date that is 91 days after the maturity date of the 5-Year Term Loan.

Under the 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 Indenture) does not exceed a specified ratio. In addition, the Indenture provides that, at any time that the Company’s Total Gross Leverage Ratio (as defined in the 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 LLC and any subsidiaries of the Company (the “Advantage Borrowers”(collectively, the "Guarantors") agreed to assume allthat guarantee the 5-Year Term Loan. The Notes are secured by the same collateral securing the 5-Year Term Loan. The 2027 Notes rank as senior secured debt of the obligations of Halifax MediaCompany and its affiliates in respect of each of (i) that certain Consolidated Amended and Restated Credit Agreement dated January 6, 2012 among Halifax Media Acquisition LLC, Advantage Capital Community Development Fund XXVIII, L.L.C., and Florida Community Development Fund II, L.L.C. (as amended, the “Halifax Florida Credit Agreement”) and (ii) that certain Credit Agreement dated June 18, 2013 between Halifax Alabama, LLC and Southeast Community Development Fund V, L.L.C. (the “Halifax Alabama Credit Agreement” and, together with the Halifax Florida Credit Agreement, the “Advantage Credit Agreements”), respectively (the debt under the Halifax Florida Credit Agreement, the “Advantage Florida Debt”; and the debt under the Halifax Alabama Credit Agreement, the “Advantage Alabama Debt”).
The Halifax Alabama Credit Agreement is in the principal amount of $8,000 and bears interest at the rate of LIBOR plus 6.25% per annum (with a minimum of 1% LIBOR) payable quarterly in arrears, maturing on March 31, 2019. The Advantage Alabama Debt isare secured by a perfected second priority security interest in all the assets of the Advantage Borrowers and certain other subsidiaries of the Company, subject to the limitation that the maximum amount of secured obligations is $15,000. The Advantage Alabama Debt is unconditionally guaranteed by Holdings I and certain subsidiaries of the New Media Borrowers and is required to be guaranteed by all future material wholly-owned domestic subsidiaries, subject to certain exceptions. The Advantage Alabama Debt is subordinated to the New Media Credit Agreement pursuant to an intercreditor agreement. The Halifax Florida Credit Agreement was in the principal amount of $10,000, bore interest at the rate of 5.25% per annum, payable quarterly in arrears, and matured on December 31, 2016. On December 30, 2016, the Company paid the outstanding balance under the Advantage Florida Debt in the amount of $10,000 with cash on hand.
The Halifax Alabama Credit Agreement contains covenants substantially consistent with those contained in the New Media Credit Agreement in addition to those required for compliance with the New Markets Tax Credit program. The


Advantage Borrowers are permitted to make voluntary prepayments at any time without premium or penalty and are subject to customary mandatory prepayment events including from proceeds from asset sales and certain debt obligations.
The Halifax Alabama Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Advantage Borrowers and certain of the Company subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, fundamental changes, dispositions, and dividends and other distributions. The Halifax Alabama Credit Agreement contains a financial covenant that requires Holdings I, the New Media Borrower and the New Media Borrower’s subsidiaries to maintain a maximum total leverage ratio of 3.75 to 1.00. The Halifax Alabama Credit Agreement contains customary events of default.
As of September 24, 2017, the Company is in compliance with all of the covenants and obligations under the Halifax Alabama Credit Agreement.
Fair Value
The fair value of long-term debt under the Senior Secured Credit Facilities and the Advantage Credit Agreements was estimated at $370,162 as of September 24, 2017, based on discounted future contractual cash flows and a market interest rate adjusted for necessary risks, including the Company’s own credit risk as there are no rates currently observable in publicly traded debt markets of risk with similar terms and average maturities. Accordingly, the Company’s long-term debt under the Senior Secured Credit Facilities is classified within Level 3 of the fair value hierarchy.
Payment Schedule
As of September 24, 2017, scheduled principal payments of outstanding debt are as follows:
2017$1,811
20182,716
201911,622
20203,622
20213,622
Thereafter346,769
 $370,162
Less: 
   Short-term debt4,527
   Remaining original issue discount3,964
   Deferred financing costs5,135
Long-term debt$356,536
  
For further information, see Note 9 to the Consolidated Financial Statements, “Indebtedness,” in the Annual Report on Form 10-K for the fiscal year ended December 25, 2016.
(7) Related Party Transactions
As of December 29, 2013, Newcastle (an affiliate of FIG LLC (the “Manager”) beneficially owned approximately 84.6% of the Company’s outstanding common stock. On February 13, 2014, Newcastle completed the spin-off of the Company. On February 14, 2014, New Media became a separate, publicly traded company tradinglien on the NYSE undersame collateral package securing the ticker symbol “NEWM”. As a result of the spin-off and listing, the fees included in the Management Agreement with the Company’s Manager became effective. As of September 24, 2017, Fortress and its affiliates owned approximately 1.3% of the Company’s outstanding stock and approximately 39.5% of the Company’s outstanding warrants. The Company’s Manager (or its affiliates) hold 2,307,562 stock options of the Company’s stock as of September 24, 2017. During the three and nine months ended September 24, 2017 and September 25, 2016, Fortress and its affiliates were paid $239, $225, $716, and $675 in dividends, respectively.
In addition, the Company’s Chairman, Wesley Edens, is also the Co-Chairman of the board of directors of Fortress. The Company does not pay Mr. Edens a salary or any other form of compensation.


The Company’s Chief Operating Officer owns an interest in a company, from which the Company recognized revenue of $140, $156, $452, and $444 during the three and nine months ended September 24, 2017 and September 25, 2016, respectively, which is included in commercial printing and other on the Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income.
The Company’s Chief Executive Officer and Chief Financial Officer are employees of Fortress, and their salaries are paid by Fortress.
Management Agreement
On November 26, 2013, the Company entered into a management agreement with the Manager (as amended and restated, the “Management Agreement”). The Management Agreement requires the Manager to manage the Company’s business affairs subject to the supervision of the Company’s Board of Directors. On March 6, 2015, the Company’s independent directors on the Board approved an amendment to the Management Agreement.
The Management Agreement had an initial three-year term and will be automatically renewed for one-year terms thereafter unless terminated either by the Company or the Manager. From the commencement date of "regular way" trading of the Company’s Common Stock on a major U.S. national securities exchange (the “Listing”), the Manager is (a) entitled to receive from the Company a management fee, (b) eligible to receive incentive compensation that is based on the Company’s performance and (c) eligible to receive options to purchase New Media Common Stock upon the successful completion of an offering of shares of the Company’s Common Stock or any shares of preferred stock with an exercise price equal to the price per share paid by the public or other ultimate purchaser in the offering, see Note 9. In addition, the Company is obligated to reimburse certain expensesindebtedness incurred by the Manager. The Manager is also entitled to receive a termination fee from the Company under certain circumstances.
The Company recognized $2,652, $2,390, $7,970, and $7,169 for management fees and $1,414, $1,295, $3,280, and $5,001 for incentive compensation within selling, general and administrative expense during the three and nine months ended September 24, 2017 and September 25, 2016, respectively. The Company paid to FIG LLC $4,191, $3,187, $10,471, and $6,372 in management fees and $1,866, $817, $7,781, and $21,755 in incentive compensation during the three and nine months ended September 24, 2017 and September 25, 2016, respectively. In addition, the Company recognized expense reimbursement amounts of approximately $300, $300, $1,192, and $1,323 during the three and nine months ended September 24, 2017 and September 25, 2016, respectively. The Company had an outstanding liability for all management agreement related fees of $2,698 and $10,080 at September 24, 2017 and December 25, 2016, respectively, included in accrued expenses.
Registration Rights Agreement with Omega
The Company entered into a registration rights agreement (the “Omega Registration Rights Agreement”) with Omega Advisors, Inc. and its affiliates (collectively, “Omega”). Under the terms of the Omega Registration Rights Agreement, upon request by Omega the Company is required to use commercially reasonable efforts to file a resale shelf registration statement providing for the registration and sale on a continuous or delayed basis by Omega of its New Media Common Stock acquired in connection with the restructuring of GateHouse (the “Registrable Securities”) (the “Shelf Registration”), subject to customary exceptions and limitations. Omega is entitled to initiate up to three offerings or sales with respect to some or all5-Year Term Loan.

Upon issuance, the $497.1 million principal value of the Registrable Securities pursuant2027 Notes was separated into two components: (i) a debt component and (ii) a derivative component. At that time, we determined that the conversion option was not clearly and closely related to the Shelf Registration.
Omega may only exercise its right to request Shelf Registrations if Registrable Securities to be sold pursuant to such Shelf Registration are at least 3%economic characteristics of the then-outstanding New Media Common Stock.
(8) Income Taxes
The Company performs a quarterly assessment of its deferred tax assets and liabilities. ASC Topic 740, “Income Taxes” (“ASC 740”) limits2027 Notes, nor did the conversion option meet the scope exception related to contracts in an entity’s own equity as we did not have the ability to use future taxable incomecontrol whether the settlement of the conversion feature, if settled in full, would be in cash or shares due to support the realizationapproval requirement to issue those shares. As a result, we concluded that the embedded conversion option must be separated from the debt liability, separately valued, and accounted for as a derivative liability. The initial value allocated to the derivative liability was $115.3 million, with a corresponding reduction in the carrying value of the 2027 Notes. The derivative liability was reported within Convertible debt in the condensed consolidated balance sheets at December 31, 2020 and was marked to fair value through earnings.

The $389.1 million debt liability component of the 2027 Notes was initially measured at fair value using the present value of its cash flows at a discount rate of 10.7% and is reported as Convertible debt in the condensed consolidated balance sheets. The debt liability component of the 2027 Notes is classified as Level 2 because it is measured at fair value using commonly accepted valuation methodologies and indirectly observable, market-based risk measurements and historical data, and a review of prices and terms available for similar debt instruments that do not contain a conversion feature.

At the Special Meeting of stockholders of the Company, held on February 26, 2021 (the "Special Meeting"), 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 June 30, 2021, the deferred tax assets whenasset related to the embedded conversion feature of the 2027 Notes was reclassified to Equity as a companyreduction to Additional paid-in-capital and reduced the carrying amount of the equity component of the 2027 Notes to $283.7 million.

As of February 26, 2021, the date of reassessment, and December 31, 2020, the estimated fair value of the derivative liability for the embedded conversion feature was $316.2 million and $189.6 million, respectively. At December 31, 2020, the derivative liability was reported within Convertible debt in the condensed consolidated balance sheets. The derivative liability was classified as Level 3 because it is measured at fair value on a recurring basis using a binomial lattice model using assumptions based on market information and historical data, and significant unobservable inputs. 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 Non-Operating Other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss) for the six months ended June 30, 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 and December 31, 2020 were:
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February 26, 2021December 31, 2020
Annual volatility70.0 %70.0 %
Discount rate12.2 %9.3 %
Stock price$4.95 $3.36 

Total debt issuance costs of $2.3 million will be amortized over the 7-year contractual life of the 2027 Notes. The total unamortized discount of $103.4 million as of June 30, 2021 will be amortized over the remaining contractual life of the 2027 Notes. For the three and six months ended June 30, 2021, interest expense on the 2027 Notes totaled $7.4 million and $14.9 million, respectively. Amortization of the discount was $2.8 million and $5.1 million for the three and six months ended June 30, 2021, respectively. Amortization of debt issuance costs were immaterial for the three and six months ended June 30, 2021. The effective interest rate on the liability component of the 2027 Notes was 10.5% as of June 30, 2021. Additional information related to the liability component of the 2027 Notes includes the following:

In thousandsJune 30, 2021December 31, 2020
Net carrying value of liability component$393.7 $388.4 
Unamortized discount of liability component$103.4 $108.7 

For the six months ended June 30, 2021, no shares were issued upon conversion, exercise, or satisfaction of the required conditions. Refer to Note 10 — Supplemental equity information for details on the convertible debt's impact to diluted earnings per share under the if-converted method.

Senior Convertible Notes due 2024

The $3.3 million principal value of the remaining 4.75% convertible senior notes due 2024 (the "2024 Notes") outstanding is reported as convertible debt in the condensed consolidated balance sheets. The effective interest rate on the 2024 Notes was 6.05% as of June 30, 2021.

NOTE 8 — 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"), and other defined benefit and defined contribution plans. We also provide health care and life insurance benefits to certain retired employees who meet age and service requirements.

Retirement plan costs include the following components:
Pension BenefitsPostretirement Benefits
Three months ended June 30,Three months ended June 30,
In thousands2021202020212020
Operating expenses:
Service cost - benefits earned during the period$469 $704 $13 $19 
Non-operating expenses:
Interest cost on benefit obligation17,106 20,416 401 593 
Expected return on plan assets(41,408)(38,551)0 0 
Amortization of actuarial loss (gain)42 (27)(47)16 
Total non-operating (benefit) expenses$(24,260)$(18,162)$354 $609 
Total expense (benefit) for retirement plans$(23,791)$(17,458)$367 $628 

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Pension BenefitsPostretirement Benefits
Six months ended June 30,Six months ended June 30,
In thousands2021202020212020
Operating expenses:
Service cost - benefits earned during the period$980 $1,385 $44 $52 
Non-operating expenses (Other income):
Interest cost on benefit obligation34,137 41,133 902 1,160 
Expected return on plan assets(82,838)(78,367)0 0 
Amortization of actuarial loss (gain)77 (54)(62)29 
Total non-operating (benefit) expenses$(48,624)$(37,288)$840 $1,189 
Total expense (benefit) for retirement plans$(47,644)$(35,903)$884 $1,241 

During the six months ended June 30, 2021, we contributed $27.8 million and $3.5 million to our pension and other postretirement plans, respectively, including $11 million in minimum required contributions for the GR Plan attributable to the 2019 plan year, as required by the Employee Retirement Income Security Act of 1974 ("ERISA"), which were deferred until January 4, 2021. Additionally, in response to the COVID-19 pandemic, our GR Plan in the U.S. has experienceddeferred certain contractual contributions and negotiated a historycontribution payment plan of losses even if future taxable$5.0 million per quarter starting December 31, 2020 through the end of September 30, 2022.

NOTE 9 — Income taxes

The following table outlines our pre-tax net income (loss) and income tax amounts:
Three months ended June 30,Six months ended June 30,
In thousands2021202020212020
Income (loss) before income taxes$32,401 $(472,107)$(119,409)$(543,734)
Provision (benefit) for income taxes17,692 (34,276)8,583 (25,297)
Effective tax rate54.6 %7.3 %(7.2)%4.7 %

The provision for income taxes for the three months ended June 30, 2021 was mainly driven by pre-tax income and is supportedimpacted by detailed forecasts and projections.
In assessing the realizabilitycreation of valuation allowances on non-deductible interest expense carryforwards in combination with the U.K. enacted legislation to increase the statutory tax rate from 19% to 25%, effective April 1, 2023. While the U.K. corporate tax rate change does not impact 2021 or 2022 tax filings, the rate change impacts the tax effected value of the U.K. deferred tax assets,liabilities. The provision was calculated using the Company considers whether itestimated annual effective tax rate of 49.6%. The estimated annual effective tax rate is more likely than not that some portion or allbased on a projected tax expense for the full year.

The tax provision for the six months ended June 30, 2021 was mainly driven by the pre-tax net loss generated during the first quarter of 2021. The tax provision is impacted by the derivative revaluation, which is nondeductible for tax purposes, partially offset by the creation of valuation allowances on non-deductible interest expense carryforwards as well as state income tax and foreign tax expense.

As of June 30, 2021, we reclassified $32.5 million as tax effected in connection with the retirement of the deferred tax assets will notasset related to the embedded conversion feature associated with the Company’s 2027 Notes. The retirement of the deferred tax asset resulted from the reclassification of the embedded conversion feature from a derivative liability to Equity as a reduction to Additional paid-in-capital during the first quarter of 2021. See Note 7 - Debt for additional information about the Company's 2027 Notes.

The total amount of unrecognized tax benefits that, if recognized, may impact the effective tax rate was approximately $42.9 million as of June 30, 2021 and $39.5 million as of December 31, 2020. The amount of accrued interest and penalties payable related to unrecognized tax benefits was $3.0 million as of June 30, 2021 and $2.6 million as of December 31, 2020.

It is reasonably possible that further adjustments to our unrecognized tax benefits may be realized. made within the next twelve months due to audit settlements and regulatory interpretations of existing tax laws. At this time, an estimate of potential change to the amount of unrecognized tax benefits cannot be made.

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The ultimate realizationbenefit for income taxes for the three months ended June 30, 2020 was caused largely by the pre-tax net loss generated during the second quarter of 2020. The benefit from income taxes was reduced due to non-deductible asset impairments, non-deductible officers' compensation, and the creation of a valuation allowance against deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Company concluded that during the nine months ended September 24, 2017, a net increase to the


valuation allowance of $9,705 would be necessary to offset additional deferred tax assets (primarily the tax benefit of the net operating loss). Of this amount, a $9,705 increase was recognized through the Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income.
The realization of the remaining deferred tax assets is primarily dependent on the scheduled reversals of deferred taxes. Any changes in the scheduled reversals of deferred taxes may require an additional valuation allowance against the remaining deferred tax assets. Any increase or decrease in the valuation allowance could resultarising from non-deductible interest carryforwards. These non-deductible expenses resulted in an increase or decrease in income tax expense in the period of adjustment.
The computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income (loss) for the year, projections of the proportion of income (or loss), permanent and temporary differences, including the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired, or as additional information is obtained.
The tax effects resulting from utilizing theestimated annual effective tax rate lower than the statutory federal rate of 21%. The benefit for the nine months ended September 24, 2017 was determined to not be an effective method to determine the tax expenseincome taxes for that period. Therefore, the Company calculated its tax provision based upon year-to-date results.
For the nine months ended September 24, 2017, the expected federal tax benefit at 34% is $8,427. The difference between the expected tax benefit and the year-to-date tax expense of $2,557 is primarily attributable to the tax effect of the federal valuation allowance of $9,705, state taxes of $598 and a tax charge related to non-deductible expenses of $681.
The Company recorded an income tax benefit of $5,119 and $991 during the three months ended March 27, 2016 and June 26, 2016, respectively, related to its acquisition30, 2020 was calculated using the estimated annual effective tax rate of certain legal entities acquired during those quarters. In accordance with ASC 805, the Company released6.8%. The estimated annual effective tax rate is based on a portion of its valuation allowance, since it was able to utilize deferredprojected tax assets against the deferred tax liabilities reflected in purchase accountingbenefit for the acquired entities.year.
The Company and its subsidiaries file a U.S. federal consolidated income tax return. The U.S. federal and state statute of limitations generally remains open for the 2013 tax year and beyond. The Company’s 2013 short tax year Federal returns were examined by the Internal Revenue Service with no changes made to the returns filed.
(9) EquityNOTE 10 — Supplemental equity information
(Loss) Earnings Per Share
Income (loss) per share

The following table sets forth the computation ofinformation used to compute basic and diluted income (loss) earnings per share (“EPS”):share:
Three months ended June 30,Six months ended June 30,
In thousands, except per share data2021202020212020
Net income (loss) attributable to Gannett$15,115 $(436,893)$(127,201)$(517,045)
Interest adjustment to Net income (loss) attributable to Gannett related to assumed conversions of the 2027 Notes, net of taxes7,470 0 0 0 
Net income (loss) attributable to Gannett for diluted earnings per share$22,585 $(436,893)$(127,201)$(517,045)
Basic weighted average shares outstanding134,744 131,471 134,411 130,999 
Effect of dilutive securities:
Restricted stock grants3,350 0 0 0 
2027 Notes99,419 0 0 0 
Diluted weighted average shares outstanding237,513 131,471 134,411 130,999 
Income (loss) per share attributable to Gannett - basic$0.11 $(3.32)$(0.95)$(3.95)
Income (loss) per share attributable to Gannett - diluted$0.10 $(3.32)$(0.95)$(3.95)
 Three months ended
September 24, 2017		 Three months ended
September 25, 2016		 Nine months ended
September 24, 2017		 Nine months ended
September 25, 2016
Numerator for earnings per share calculation:       
Net (loss) income$(1,971) $2,795
 $(27,343) $17,145
Denominator for earnings per share calculation:       
Basic weighted average shares outstanding52,868,745
 44,533,517
 53,058,341
 44,515,167
Effect of dilutive securities:       
Stock Options and Restricted Stock—
 141,376
 —
 84,891
Diluted weighted average shares outstanding52,868,745
 44,674,893
 53,058,341
 44,600,058

For the three and nine months ended September 24, 2017, theThe Company excluded 1,362,479 and 1,362,479 common stock warrants, 349,781 and 349,781 RSGs, and 2,307,562 and 2,307,562 stock options, respectively,the following securities from the computation of diluted income per share because their effect would have been antidilutive. Forantidilutive:
Three months ended June 30,Six months ended June 30,
In thousands2021202020212020
Warrants845 1,362 845 1,362 
Stock options6,068 6,068 6,068 6,068 
Restricted stock grants (a)
46 8,510 10,577 8,510 
2027 Notes (b)
0 0 99,419 0 
(a)Includes Restricted stock awards ("RSAs"), Restricted stock units ("RSUs") and Performance stock units ("PSUs").
(b)Represents the three and nine months ended September 25, 2016,total number of shares that would be convertible at June 30, 2021 as stipulated in the Company excluded 1,362,479 and 1,362,479 common stock warrants and 700,000 and 700,000 stock options, respectively, fromIndenture.

The 2027 Notes may be converted at any time by the computation of diluted income per share because their effect would have been antidilutive.


Equity
In March 2016, the Company issued 13,992 shares of its common stock to its Non-Officer Directors to settle a liability of $225 for 2015 services.
During the fourth quarter of 2016, the Company issued 8,625,000 shares of its common stock in a public offering at a price to the public of $16.00 per share for net proceeds of approximately $134,818. Certain of the Company’s officers and directors participated in this offering and purchased an aggregate of 20,000 shares at a price of $16.00 per share. For the purpose of compensating the Manager for its successful efforts in raising capital for the Company, in connection with this offering, the Company granted options to the Manager to purchase 862,500holders into cash, shares of the Company’s common stockCommon Stock or any combination of cash and Common Stock, at a pricethe Company’s election. Conversion of $16.00, which had an aggregate fair value of approximately $2,288 asall of the grant date. The assumptions used2027 Notes into Common Stock (assuming the maximum increase in the Black-Scholes model to value the options were: a 2.2% risk-freeconversion rate a 8.3% dividend yield, 36.1% volatility and an expected life of 10 years. The fair value of the options issued as compensation to the Manager was recorded as an increase in equity with an offsetting reduction in capital.
On May 17, 2017, the Board of Directors authorized the repurchase of up to $100,000 of the Company's common stock ("Share Repurchase Program") over the next 12 months. Under the Share Repurchase Program, the Company may purchase its shares from time to time in the open market or in privately negotiated transactions. During the three months ended June 25, 2017, the Company repurchased 391,120 shares at a weighted average price of $12.77 per share for a total cost, including transaction costs, of $5,001. The shares were subsequently retired. The cost paid to acquire the shares in excess of par was recorded in additional paid-in capital in the consolidated balance sheet.
Pursuant to the anti-dilution provisions of the Incentive Plan, the exercise price on the 745,062 options granted to the Manager in 2014 were equitably adjusted from $15.71 to $14.37 as a result of the 2016 return of capital distributions.
Pursuanta Make-Whole Fundamental Change but no other adjustments to the anti-dilution provisionsconversion rate), would result in the issuance of the Incentive Plan, the exercise price on the 700,000 options granted to the Manager in 2015 were equitably adjusted from $21.70 to $20.36 as a resultan aggregate of the 2016 return of capital distributions.
During the three months ended June 25, 2017, the Company issued 16,605294.2 million shares of its common stock to its Non-Officer Directors to settle a liabilityCommon Stock. The Company has excluded approximately 194.8 million shares from the loss per share calculation, representing the difference between the total number of $225 for 2016 services.shares that would be convertible at June 30, 2021 and the total number of shares issuable assuming the maximum increase in the conversion rate.
The following table includes additional information regarding the Manager stock options:

 Number of Options Weighted-Average Grant Date Fair Value Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value ($000)
Outstanding at December 25, 20162,307,562
 $4.07
 $17.64
 8.7 $186
Outstanding at September 24, 20172,307,562
 $4.07
 $16.80
 7.9 $—
          
Exercisable at September 24, 20171,728,812
   $17.06
 7.7 $—
Share-based compensation


Accumulated Other Comprehensive Loss
The changes in accumulated other comprehensive loss by componentCompany recognized compensation cost for the nine months ended September 24, 2017share-based payments of $5.8 million and September 25, 2016 are outlined below.
 
Net actuarial loss
and prior service
cost (1)
For the nine months ended September 24, 2017: 
Balance at December 25, 2016$(3,977)
Other comprehensive income before reclassifications—
Amounts reclassified from accumulated other comprehensive loss83
Net current period other comprehensive income, net of taxes83
Balance at September 24, 2017$(3,894)
For the nine months ended September 25, 2016: 
Balance at December 27, 2015$(3,158)
Other comprehensive income before reclassifications—
Amounts reclassified from accumulated other comprehensive loss61
Net current period other comprehensive income, net of taxes61
Balance at September 25, 2016$(3,097)
(1)
This accumulated other comprehensive loss component is included in the computation of net periodic benefit cost. See Note 10.
The following table presents reclassifications out of accumulated other comprehensive loss$9.2 million for the three and ninesix months ended September 24, 2017June 30, 2021, respectively, and September 25, 2016.$7.4 million and $19.0 million for the three and six months ended June 30, 2020, respectively.
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Amounts Reclassified from Accumulated
Other Comprehensive Loss
  
 Three months ended September 24, 2017 Three months ended September 25, 2016 Nine months ended September 24, 2017 Nine months ended September 25, 2016 
Affected Line Item in the
Consolidated Statements 
of Operations and 
Comprehensive (Loss) Income
Amortization of unrecognized loss$27
 $20
 $83
 $61
(1) 
 
Amounts reclassified from accumulated other comprehensive loss27
 20
 83
 61
  (Loss) income before income taxes
Income tax expense—
 —
 —
 —
  Income tax benefit
Amounts reclassified from accumulated other comprehensive loss, net of taxes$27
 $20
 $83
 $61
  Net (loss) income

The total compensation cost not yet recognized related to non-vested awards as of June 30, 2021 was $34.8 million, which is expected to be recognized over a weighted-average period of 2.3 years through September 2023.
(1)
This accumulated other comprehensive loss component is included in the computation of net periodic benefit cost. See Note 10.
Dividends
Restricted stock awards

During the six months ended June 30, 2021, a total of 4.1 million RSAs were granted. RSAs generally vest in equal annual installments over a three-year period subject to the participants' continued employment with the Company. The weighted average grant date fair value of RSAs granted during the six months ended June 30, 2021 was $5.28.

Rights Agreement

On February 25, 2016,April 6, 2020, the Company's board of directors (the "Board") adopted a stockholder rights plan in the form of a Section 382 Rights Agreement ("Rights Agreement") to preserve and protect the Company's income tax net operating loss carryforwards ("NOLs") and other tax assets. The Rights Agreement was approved by the Company's stockholders on June 7, 2021 at the 2021 annual meeting of stockholders. As of December 31, 2020, the Company announcedhad approximately $543.5 million of NOLs available which could be used in certain circumstances to offset future federal taxable income.

Under the Rights Agreement, the Board declared a fourth quarter 2015 cashnon-taxable dividend of $0.33 per1 preferred share purchase right for each outstanding share of Common Stock. The rights will be exercisable only if a person or group acquires 4.99% or more of Gannett’s Common Stock. Gannett’s existing stockholders that beneficially own in excess of 4.99% of the Common Stock are "grandfathered in" at their current ownership level and the rights then become exercisable if any of those stockholders acquire an additional 0.5% or more of Common Stock of the Company. If the rights become exercisable, all holders of rights, other than the person or group triggering the rights, will be entitled to purchase Gannett Common Stock at a 50% discount or Gannett may exchange each right held by such holders for 1 share of Common Stock. Rights held by the person or group triggering the rights will become void and will not be exercisable. The Board has the discretion to exempt any person or group from the provisions of the Rights Agreement.

The Rights Agreement will continue in effect until April 5, 2023. The Board has the ability to terminate the plan if it determines that doing so would be in the best interest of Gannett’s stockholders. The rights may also expire at an earlier date if certain events occur, as described more fully in the Rights Agreement filed by the Company with the Securities and Exchange Commission.

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 Board, of New Media. The dividend was paid on March 17, 2016, to shareholderswhich 150,000 shares have been designated as Series A Junior Participating Preferred Stock, none of record aswhich are outstanding. There were 0 issuances of preferred stock during the closesix months ended June 30, 2021.

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Table of business on March 9, 2016.Contents

Accumulated other comprehensive income (loss)

On April 28, 2016, the Company announced a first quarter 2016 cash dividend of $0.33 per share of Common Stock, par value $0.01 per share, of New Media. The dividend was paid on May 19, 2016, to shareholders of record as of the close of business on May 11, 2016.
On July 28, 2016, the Company announced a second quarter 2016 cash dividend of $0.33 per share of Common Stock, par value $0.01 per share, of New Media. The dividend was paid on August 18, 2016, to shareholders of record as of the close of business on August 10, 2016.
On October 27, 2016, the Company announced a third quarter 2016 cash dividend of $0.35 per share of Common Stock, par value $0.01 per share, of New Media. The dividend was paid on November 17, 2016, to shareholders of record as of the close of business on November 9, 2016.
On February 21, 2017, the Company announced a fourth quarter 2016 cash dividend of $0.35 per share of Common Stock, par value $0.01 per share, of New Media. The dividend was paid on March 16, 2017, to shareholders of record as of the close of business on March 8, 2017.
On April 27, 2017, the Company announced a first quarter 2017 cash dividend of $0.35 per share of Common Stock, par value $0.01 per share, of New Media. The dividend was paid on May 18, 2017, to shareholders of record as of the close of business on May 10, 2017.
On July 27, 2017, the Company announced a second quarter 2017 cash dividend of $0.35 per share of Common Stock, par value $0.01 per share, of New Media. The dividend was paid on August 17, 2017, to shareholders of record as of the close of business on August 9, 2017.
(10) Pension and Postretirement Benefits
As a result of the Enterprise News Media LLC (in 2005), Copley Press, Inc. (in 2007), and Times Publishing Company (in 2016) acquisitions, the Company maintains two pension and several postretirement medical and life insurance plans which cover certain employees. The Company uses the accrued benefit actuarial method and best estimate assumptions to determine pension costs, liabilities and other pension information for defined benefit plans.
The Enterprise News Media, LLC pension plan was amended to freeze all future benefit accruals as of December 31, 2008, except for a select group of union employees whose benefits were frozen during 2009. Also, during 2008, the medical and life insurance benefits were frozen, and the plan was amended to limit future benefits to a select group of active employees under the Enterprise News Media, LLC postretirement medical and life insurance plan. Benefits under the postretirement medical and life insurance plan assumed with the Copley Press, Inc. acquisition are only available to Brush-Moore employees hired before January 1, 1976. The Times Publishing pension plan was frozen prior to the acquisition.
The following provides information ontables summarize the pension planscomponents of, and postretirement medical and life insurance plansthe changes in, Accumulated other comprehensive income (loss), net of tax for the three and ninesix months ended September 24, 2017June 30, 2021 and September 25, 2016:2020:
Six months ended June 30, 2021Six months ended June 30, 2020
In thousandsPension and Postretirement PlansForeign Currency Translation



TotalPension and Postretirement PlansForeign Currency TranslationTotal
Beginning balance$40,441 $9,732 $50,173 $936 $7,266 $8,202 
Other comprehensive income (loss) before reclassifications(958)4,787 3,829 (4,961)(16,585)(21,546)
Amounts reclassified from accumulated other comprehensive income (loss)(a)(b)
11 0 11 (18)0 (18)
Net current period other comprehensive income (loss), net of taxes(947)4,787 3,840 (4,979)(16,585)(21,564)
Ending balance$39,494 $14,519 $54,013 $(4,043)$(9,319)$(13,362)
 Three months ended
September 24, 2017		 Three months ended
September 25, 2016		 Nine months ended
September 24, 2017		 Nine months ended
September 25, 2016
 Pension Postretirement Pension Postretirement Pension Postretirement Pension Postretirement
Components of net periodic benefit costs:               
Service cost$157
 $—
 $75
 $4
 $470
 $2
 $225
 $14
Interest cost780
 28
 813
 56
 2,341
 82
 2,431
 167
Expected return on plan assets(1,045) —
 (1,044) —
 (3,134) —
 (3,133) —
Amortization of unrecognized loss (gain)43
 (16) 20
 —
 131
 (48) 61
 —
Total$(65) $12
 $(136) $60
 $(192) $36
 $(416) $181
(a)This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 8 — Pensions and other postretirement benefit plans.
For(b)Amounts reclassified from accumulated other comprehensive loss are recorded net of tax impacts of $4 thousand and $7 thousand for the three and ninesix months ended September 24, 2017June 30, 2021 and September 25, 2016, the Company recognized a total of $(53), $(76), $(156) and $(235) in pension and postretirement benefit,2020, respectively. During the three and nine months ended September 24, 2017, the Company contributed $822 and $1,485 to the pension plans, respectively. The Company is expected to pay an additional $349 in employer contributions to the pension plans during the remainder of the current fiscal year.



(11)
NOTE 11 — Fair value measurement

In accordance with ASC 820, "Fair Value Measurement,
The Company measures and records in the accompanying condensed consolidated financial statements certain assets and liabilities at" fair value onmeasurements are required to be disclosed using a recurring basis. ASC Topic 820 “Fair Value Measurements and Disclosures” establishes athree-tiered fair value hierarchy for those instruments measured at fair value thatwhich distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs).
These inputs are prioritized as follows:
Level 1: Observable inputs such as1 refers to fair values determined based on quoted prices in active markets for identical assets or liabilities;liabilities, Level 2 refers to fair values estimated using significant other observable inputs and Level 3 includes fair values estimated using significant unobservable inputs.
Level 2: Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities or market corroborated inputs;
As of June 30, 2021 and
Level 3: Unobservable inputs for which there is little or no market data and which require the Company to develop their own assumptions about how market participants price the asset or liability.
The valuation techniques that may be used to measure fair value are as follows:
Market approach – Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities;
Income approach – Uses valuation techniques to convert future amounts to a single present amount based on current market expectation about those future amounts;
Cost approach – Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).
The following table provides information for the Company’s major categories of financial December 31, 2020, assets and liabilities measured or disclosedrecorded at fair value and measured on a recurring basis: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.

 Fair Value Measurements at Reporting Date Using  
 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Total 
Fair Value
Measurements
As of September 24, 2017       
Assets       
Cash and cash equivalents$160,541
 $—
 $—
 $160,541
Restricted cash3,406
 —
 —
 3,406
As of December 25, 2016       
Assets       
Cash and cash equivalents$172,246
 $—
 $—
 $172,246
Restricted cash3,406
 —
 —
 3,406
The 5-Year Term Loan is recorded at carrying value, which approximates fair value in the condensed consolidated balance sheets and is classified as Level 2. Refer to additional discussion regarding fair value of the 2027 Notes in Note 7 — Debt.

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).
For Assets held for sale (Level 3) are measured on a nonrecurring basis and are evaluated using executed purchase agreements, letters of intent or third-party valuation analyses when certain circumstances arise. Assets held for sale totaled $13.1 million as of June 30, 2021 and $14.7 million as of December 31, 2020. The Company performs its annual goodwill and indefinite-lived intangible impairment assessment during the 2017 acquisitions and 2016 acquisitionssecond quarter of the Companyyear. Any resulting asset impairment would require that the asset be recorded at its fair value. The resulting fair value measurements of the assets and liabilities under the acquisition method of accounting. Accordingly, the assets acquired and liabilities assumed were recorded at their fair value. Property, plant and equipment was valued usingare considered to be Level 2 inputs,3 measurements. Refer to Note 5 — Goodwill and intangible assets were valued using Level 3 inputs. Refer to Note 2 for additional discussion ofregarding the valuation techniques, significant inputs, assumptions utilized,annual impairment assessment.

NOTE 12 — Commitments, contingencies and the fair value recognized.other matters
During the quarter ended June 25, 2017, certain goodwill and mastheads were written down to their implied fair value using Level 3 inputs. The valuation techniques and significant inputs and assumptions utilized to measure fair value are discussed in Note 5.
Refer to Note 6 for the discussion on the fair value of the Company’s total long-term debt.Legal Proceedings
(12) Commitments and Contingencies



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 with respect tomatters such matters as libel, invasion of privacy, intellectual property infringement, wrongful termination actions, and 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.
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Environmental contingency

We assumed responsibility for certain alleged environmental contingencies in connection with our acquisition of Gannett Co., Inc. (which was renamed Gannett Media Corp. and is referred to as "Legacy Gannett") in the fourth quarter of 2019. Those environmental contingencies include a March 2011 claim by the U.S. Environmental Protection Agency (the "EPA") against The Advertiser Company ("Advertiser"), a subsidiary that publishes the Montgomery Advertiser. The EPA identified Advertiser as a potentially responsible party ("PRP") for the investigation and potential remediation of groundwater contamination in downtown Montgomery, Alabama. The Advertiser became a member of the Downtown Environmental Alliance (the "Alliance"), which has agreed to jointly fund and conduct all required investigation and remediation. In 2016, the Advertiser and other members of the Alliance reached a settlement with the EPA regarding the costs the EPA spent to investigate the site. The EPA transferred responsibility for oversight of the site to the Alabama Department of Environmental Management, which approved a site investigation by the Alliance and subsequently determined that a monitoring-only remedy was appropriate. While long-term soil vapor and groundwater monitoring continues, at this time, we do not believe it is reasonably likely that this matter will become a material liability.

Other litigation

We are 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.

Other

Redeemable noncontrolling interests

Equity purchase arrangements that are exercisable by the counterparty to the agreement and that are outside the sole control of the Company are accounted for in accordance with ASC 480-10-S99-3A and are classified as Redeemable noncontrolling interests in the condensed consolidated balance sheets.

NOTE 13 — 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. Our reportable segments include the following:

•Publishing is comprised of our portfolio of local, regional, national, and 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 commercial printing, distribution arrangements, revenues from our events business, digital content syndication and affiliate revenues and third-party newsprint sales. The Publishing reportable segment is an aggregation of 2 operating segments: Domestic Publishing and U.K. Publishing.
•Digital Marketing Solutions is comprised of our digital marketing solutions subsidiary, ReachLocal. 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 above operating segments, we have a Corporate and other category that includes activities not directly attributable to a specific segment. This category primarily consists of broad corporate functions, including legal, human resources, accounting, finance and marketing 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.
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The CODM uses Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett to evaluate the performance of the segments and allocate resources. Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett are non-GAAP financial performance 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 (expense), (5) Loss on Convertible notes derivative, (6) Other non-operating items, including equity income, (7) Depreciation and amortization, (8) Integration and reorganization costs, (9) Asset impairments, (10) Goodwill and intangible impairments, (11) Gains or losses on the sale or disposal of assets, (12) Share-based compensation, (13) Other operating expenses, including third-party debt expenses and acquisition costs, (14) Gains or losses on the sale of investments and (15) certain other non-recurring charges. We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Operating revenues. We define Adjusted Net income (loss) attributable to Gannett before (1) Gains or losses on the early extinguishment of debt, (2) Loss on Convertible notes derivative, (3) Integration and reorganization costs, (4) Other operating expenses, including third-party debt expenses and acquisition costs, (5) Asset impairments, (6) Goodwill and intangibles impairments, (7) Gains or losses on the sale or disposal of assets, and (8) the tax impact of the above items.

Management considers Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett to be the appropriate metrics to evaluate and compare the ongoing operating performance of our segments on a consistent basis across reporting periods as it eliminates the effect of items which we do not believe are indicative of each segment's core operating performance.

The following tables present our segment information:

Three months ended June 30, 2021
In thousandsPublishingDigital Marketing SolutionsCorporate and otherIntersegment EliminationsConsolidated
Advertising and marketing services - external sales$309,469 $110,037 $604 $— $420,110 
Advertising and marketing services - intersegment sales32,012 — — (32,012)— 
Circulation310,258 0 1 — 310,259 
Other72,806 0 1,100 — 73,906 
Total operating revenues$724,545 $110,037 $1,705 $(32,012)$804,275 
Adjusted EBITDA (non-GAAP basis)$114,189 $12,529 $(10,949)$— $115,769 

Three months ended June 30, 2020
In thousandsPublishingDigital Marketing SolutionsCorporate and otherIntersegment EliminationsConsolidated
Advertising and marketing services - external sales$266,398 $89,809 $711 $— $356,918 
Advertising and marketing services - intersegment sales25,854 — — (25,854)— 
Circulation342,645 — 1 — 342,646 
Other60,996 4,754 1,686 — 67,436 
Total operating revenues$695,893 $94,563 $2,398 $(25,854)$767,000 
Adjusted EBITDA (non-GAAP basis)$91,991 $2,784 $(16,757)$— $78,018 

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Six months ended June 30, 2021
In thousandsPublishingDigital Marketing SolutionsCorporate and otherIntersegment EliminationsConsolidated
Advertising and marketing services - external sales$595,923 $211,413 $1,131 $— $808,467 
Advertising and marketing services - intersegment sales59,868 — — (59,868)— 
Circulation635,694 0 2 — 635,696 
Other132,645 905 3,646 — 137,196 
Total operating revenues$1,424,130 $212,318 $4,779 $(59,868)$1,581,359 
Adjusted EBITDA (non-GAAP basis)$216,397 $21,701 $(21,864)$— $216,234 
Six months ended June 30, 2020
In thousandsPublishingDigital Marketing SolutionsCorporate and otherIntersegment EliminationsConsolidated
Advertising and marketing services - external sales$636,277 $206,092 $1,560 $— $843,929 
Advertising and marketing services - intersegment sales59,611 — — (59,611)— 
Circulation717,365 0 4 — 717,369 
Other140,790 9,752 3,843 — 154,385 
Total operating revenues$1,554,043 $215,844 $5,407 $(59,611)$1,715,683 
Adjusted EBITDA (non-GAAP basis)$203,014 $10,668 $(36,598)$— $177,084 
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The table below shows the reconciliation of Net income (loss) attributable to Gannett to Adjusted EBITDA and Net income (loss) attributable to Gannett margin to Adjusted EBITDA margin:
Three months ended June 30,Six months ended June 30,
In thousands2021202020212020
Net income (loss) attributable to Gannett$15,115 $(436,893)$(127,201)$(517,045)
Provision (benefit) for income taxes17,692 (34,276)8,583 (25,297)
Interest expense35,264 57,928 74,767 115,827 
Loss on early extinguishment of debt2,834 369 22,235 1,174 
Non-operating pension income(23,906)(17,553)(47,784)(36,099)
Loss on Convertible notes derivative0 0 126,600 0 
Other non-operating income, net(1,148)(6,261)(3,023)(4,616)
Depreciation and amortization48,242 66,327 106,345 144,352 
Integration and reorganization costs8,444 32,306 21,848 60,560 
Other operating expenses774 2,379 11,350 8,348 
Asset impairments0 6,859 833 6,859 
Goodwill and intangible impairments0 393,446 0 393,446 
Net loss on sale or disposal of assets5,294 88 10,039 745 
Share-based compensation expense5,779 7,391 9,202 18,968 
Other items1,385 5,908 2,440 9,862 
Adjusted EBITDA (non-GAAP basis)$115,769 $78,018 $216,234 $177,084 
Net income (loss) attributable to Gannett margin1.9 %(57.0)%(8.0)%(30.1)%
Adjusted EBITDA margin (non-GAAP basis)14.4 %10.2 %13.7 %10.3 %

The table below shows the reconciliation of Net income (loss) attributable to Gannett to Adjusted Net income (loss) attributable to Gannett:
Three months ended June 30,Six months ended June 30,
In thousands2021202020212020
Net income (loss) attributable to Gannett$15,115 $(436,893)$(127,201)$(517,045)
Loss on early extinguishment of debt2,834 369 22,235 1,174 
Loss on Convertible notes derivative0 0 126,600 0 
Integration and reorganization costs8,444 32,306 21,848 60,560 
Other operating expenses774 2,379 11,350 8,348 
Asset impairments0 6,859 833 6,859 
Goodwill and intangible impairments0 393,446 0 393,446 
Net loss on sale or disposal of assets5,294 88 10,039 745 
Subtotal32,461 (1,446)65,704 (45,913)
Tax impact of above items(2,403)(3,734)(21,009)(35,915)
Adjusted Net income (loss) attributable to
Gannett (non-GAAP basis)		$30,058 $(5,180)$44,695 $(81,828)

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 benefit for income taxes, as reported in the condensed consolidated financial statements, are not part of operating income and are primarily recorded at the corporate level.

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NOTE 14 — Other supplemental information

Cash and cash equivalents, including restricted cash

Cash equivalents represent highly liquid certificates of deposit which have original maturities of three months or less. Restricted cash at September 24, 2017 and December 25, 2016, in the aggregate amount of $3,406 and $3,406, respectively, is usedheld as cash collateral for certain business operations. Restricted cash primarily consists of funding for letters of credit and cash held in an irrevocable grantor trust for our deferred compensation plans.The restrictions will lapse when benefits are paid to plan participants and their beneficiaries as specified in the plans.

(13) Subsequent EventsThe following table presents a reconciliation of cash, cash equivalents and restricted cash:
Acquisition
On October 2, 2017, the Company completed the acquisition
June 30,
In thousands20212020
Cash and cash equivalents$158,563 $158,603 
Restricted cash included in other current assets4,879 9,298 
Restricted cash included in investments and other assets22,702 21,266 
Total cash, cash equivalents and restricted cash$186,144 $189,167 

Supplemental cash flow information

The following table presents supplemental cash flow information, including non-cash investing and financing activities:

Six months ended June 30,
In thousands20212020
Net cash refund for taxes$(8,703)$(1,720)
Cash paid for interest49,902 125,311 
Non-cash investing and financing activities:
Accrued capital expenditures$924 $718 

Accounts payable and accrued liabilities

A breakout of several newspapersAccounts payable and related assets from certain subsidiaries of Morris Communications Company LLC (“Morris”) for $120,000, in cash, plus working capital. The Company funded the acquisition with cash on hand. The Company acquired many of Morris's newspaper assets located across Georgia, Florida, Texas, Kansas, Arkansas, and Alaska, which includes 48 publications. In addition to the print publications, the acquisition includes Morris’s Main Street Digital group, substantially all weekly and niche print products and all related websites and digital operations. Itaccrued liabilities is impracticable to provide the preliminary purchase price allocation and supplemental pro forma information because of the timing of the acquisition and its proximity to the filing date.presented below:
Dividends
On October 26, 2017, the Company announced a third quarter 2017 cash dividend of $0.37 per share of Common Stock, par value $0.01 per share, of New Media. The dividend will be paid on November 16, 2017, to shareholders of record as of the close of business on November 8, 2017.
In thousandsJune 30, 2021December 31, 2020
Accounts payable$143,827 $131,797 
Compensation88,123 115,061 
Taxes (primarily property and sales taxes)27,809 30,834 
Benefits22,392 22,821 
Interest13,564 3,676 
Other56,204 74,057 
Accounts payable and accrued liabilities$351,919 $378,246 



Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s
The following discussion and analysis of our financial condition and results of operations is intended to help the reader understand the results of operations and financial condition of New Media Investment Group Inc.quantitative and its subsidiaries (“New Media”, “Company”, “we”, “us” or “our”). The followingqualitative disclosures should be read in conjunction with theour unaudited condensed consolidated financial statements and related notes thereto included herein, and with Part II, Item 1A, “Risk Factors.”
Overview
New Media supports small to mid-size communities by providing locally-focused print and digital content to its consumers and premier marketing and technology solutions for our small and medium businesses partners. We have a particular focus on owning and acquiring strong local media assets in small to mid-size markets. With our collection of assets, we focus on two large business categories: consumers and small to medium-sized businesses (“SMBs”).
Our portfolio of media assets today spans across 540 markets and 36 states. Our products include 642 community print publications, 540 websites and two yellow page directories. As of September 24, 2017, we reach over 21 million people per week and serve over 225,000 business customers.
We are focused on growing our consumer revenues primarily through our penetration into the local consumer market that values comprehensive local news and receives their news primarily from our products. We believe our rich local content, our strong media brands, and multiple platforms for delivering content will impact our reach into the local consumers leading to growth in subscription income. We also believe our focus on smaller markets will allow us to be a leading provider of valuable, unique local news to consumers in those markets. We believe that one result of our local consumer penetration in these smaller markets will be transaction revenues as we link consumers with local businesses. For our SMB business category, we focus on


leveraging our strong local media brands, our in-market sales force and our high consumer penetration rates with a variety of products and services that we believe will help SMBs expand their marketing, advertising and other digital lead generation platforms. We also believe our strong position in our local markets will allow us to develop other products that will be of value to our SMBs in helping them run and grow their businesses.
Our business strategy is to be the preeminent provider of local news, information, advertising, and digital and business services in the markets we operate in. We aim to grow our business organically through both our consumer and SMB strategies. We also plan to continue to pursue strategic acquisitions of high-quality local media and digital marketing assets at attractive valuation levels. Finally, we intend to distribute a substantial portion of our free cash flow generated from operations or other sources as a dividend to stockholders through a quarterly dividend, subject to satisfactory financial performance and approval by our board of directors (the “Board of Directors” or "Board") and dividend restrictions in the New Media Credit Agreement (as defined below). The Board of Directors’ determinations regarding dividends will depend on a variety of factors, including the Company’s U.S. generally accepted accounting principles (“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.
We believe that our focus on owning and operating leading local content oriented media properties in small to mid-size markets puts us in a position to better execute on our strategy. We believe that being the leading provider of local news and information in the markets in which we operate and distributing that content across multiple print and digital platforms, gives us an opportunity to grow our audiences and reach. Further, we believe our strong local media brands and our market presence gives us the opportunity to expand our advertising and lead generation products with local business customers. For our SMB category, we focus on leveraging our strong local media brands, our in-market sales force and our high consumer penetration rates with a variety of products and services that we believe will help SMBs expand their marketing, advertising and other lead generation platforms.
Central to this business strategy is our wholly-owned subsidiary formerly known as Propel Business Services, the Company's SMB solutions provider, which has been rebranded as UpCurve, Inc. ("UpCurve"). In addition, the digital marketing services of UpCurve, previously known as Propel Marketing, will be marketed under the ThriveHive name. We launched the products in 2012 and have seen rapid growth since then. We believe UpCurve, combined with our strong local brands and in-market sales force, is in a position to continue as a key component to our overall organic growth strategy.
The opportunity UpCurve aims to seize upon is as follows:
There are approximately 27.9 million SMBs in the U.S. according to the 2011 U.S. Census data. Of these, approximately 26.7 million have 20 employees or less.
Many of the owners and managers of these SMBs do not have the resources or expertise to navigate the fast evolving digital marketing sector, but are increasingly aware of the need to establish and maintain a digital presence in order to stay connected with current and future customers.
UpCurve is designed to offer a complete set of turn-key digital marketing and business services to SMBs that provide transparent results to the business owners. UpCurve's products include marketing technology, business management solutions, IT/Infrastructure, voice and email communication offerings and small business financing. In a recent acquisition we acquired a turn-key proprietary software that enables SMB owners to run their own digital and contact marketing campaigns; UpCurve continues to evolve to meet the needs of the full spectrum of SMBs. UpCurve provides four broad categories of services: building businesses a presence, helping businesses to be located by consumers online, engaging with consumers, and growing their customer base.
Similarly, GateHouse Live, our event production business, specializes in delivering world class events for the media industry.
We believe our local media properties and local sales infrastructure are uniquely positioned to sell these digital marketing and business services to local business owners and give us distinct advantages, including:
our strong and trusted local brands, with 85% of our daily newspapers having been publishing local content for more than 100 years;
our ability to market through our print and online properties, driving branding and traffic; and


our more than 1,275 local, direct, in-market sales professionals with long standing relationships with small businesses in the communities we serve.
Our core products include:
130 daily newspapers with total paid circulation of approximately 1.4 million;
311 weekly newspapers (published up to three times per week) with total paid circulation of approximately 314,000 and total free circulation of approximately 2.0 million;
129 “shoppers” (generally advertising-only publications) with total circulation of approximately 3.1 million;
540 locally focused websites, which extend our businesses onto the internet and mobile devices with approximately 260 million page views per month;
two yellow page directories, with a distribution of approximately 230,000, that covers a population of approximately 411,000 people;
72 business publications; and
UpCurve business services and ThriveHive digital marketing.
In addition to our core products, we also opportunistically produce niche publications that address specific local market interests such as recreation, sports, healthcare and real estate. We also have a number of local and regional business-oriented publications that provide relevant and actionable news and analysis.
Our advertising revenue tends to follow a seasonal pattern, with higher advertising revenue in months containing significant events or holidays. Accordingly, our first quarter and our third quarter, historically, are our weakest quarters of the year in terms of revenue. Correspondingly, our second and fourth fiscal quarters, historically, are our strongest quarters. We expect that this seasonality will continue to affect our advertising revenue in future periods.
We have experienced ongoing declines in same store print advertising revenue streams and increased volatility of operating performance, despite our geographic diversity, well-balanced portfolio of products, broad customer base and reliance on smaller markets. We may experience additional declines and volatility in the future. These declines in print advertising revenue have come with the shift from traditional media to the internet for consumers and businesses. We believe our local advertising tends to be less sensitive to economic cycles than national advertising because local businesses generally have fewer advertising channels through which to reach their target audience. We are making investments in digital platforms, such as UpCurve, as well as online, and mobile applications, to support our print publications in order to capture this shift as witnessed by our digital advertising and business services revenue growth, which more than doubled between 2013 and 2016.
Our operating costs consist primarily of labor, newsprint and delivery costs. Our selling, general and administrative expenses consist primarily of labor costs.
Compensation represents just under 50% of our expenses. Over the last few years, we have worked to drive efficiencies and centralization of work throughout our Company. Additionally, we have taken steps to cluster our operations thereby increasing the usage of facilities and equipment while increasing the productivity of our labor force. We expect to continue to employ these steps as part of our business strategy.
The Company’s operating segments (Eastern US Publishing, Central US Publishing, Western US Publishing, and BridgeTower) are aggregated into one reportable business segment.
Acquisitions
On July 6, 2017, June 30, 2017, February 10, 2017 and January 31, 2017, we acquired substantially all the assets, properties, and business of certain publications/businesses, which included four business publications, 10daily newspapers, 15 weekly publications, 11 shoppers, and an event production business for an aggregate purchase price of $40.6 million, including estimated working capital.


During 2016, we acquired substantially all the assets and assumed substantially all the liabilities of certain businesses, which included 68 business publications, seven daily newspapers, seven weekly publications, eleven shoppers, and digital platforms for an aggregate purchase price of $135.9 million, including working capital.
Management Agreement
On November 26, 2013, New Media entered into the management agreement (as amended and restated, the “Management Agreement”) with FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC ("Fortress"), pursuant to which the Manager manages the operations of New Media. We pay the Manager a management fee equal to 1.5% of New Media’s Total Equity (as defined in the Management Agreement) and the Manager is eligible to receive incentive compensation.
On February 14, 2017, Fortress announced that it had entered into an Agreement and Plan of Merger (the "Merger Agreement") with SB Foundation Holdings LP, a Cayman Islands exempted limited partnership (“SoftBank Parent”) and an affiliate of SoftBank Group Corp. (“SoftBank”), and Foundation Acquisition LLC, a Delaware limited liability company and wholly owned subsidiary of SoftBank Parent (“SoftBank Merger Sub”), pursuant to which SoftBank Merger Sub will merge with and into Fortress, with Fortress surviving as a wholly owned subsidiary of SoftBank Parent. While Fortress’s senior investment professionals are expected to remain in place, including those individuals who perform services for us, there can be no assurance that the SoftBank merger will not have an impact on us or our relationship with the Manager. Fortress informed the Company that it believes that under the Investment Advisers Act of 1940, as amended, the change of ownership resulting from the completion of the SoftBank merger will result in a deemed assignment of the Management Agreement, and that as a result, the Manager is required to obtain the Company’s consent to the assignment. On April 27, 2017, the disinterested members of our board of directors unanimously approved the consent to the assignment. The disinterested members of our board of directors were advised by outside independent counsel.
Long-Lived Asset Impairment
As part of the ongoing cost reduction programs, we are consolidating print facilities, and during the nine months ended September 24, 2017, we ceased printing operations at 12 facilities.  As a result, we recognized an impairment charge of $6.5 million and accelerated depreciation of $2.4 million during the nine months ended September 24, 2017.
Dispositions
On June 2, 2017, we completed the sale of the Mail Tribune, located in Medford, Oregon, for approximately $14.7 million, including estimated working capital.  As a result, a pre-tax gain of approximately $5.4 million, net of selling expenses, is included in (gain) loss on sale or disposal of assets on the consolidated statement of operations and comprehensive (loss) income.
Industry
The newspaper industry and the Company have experienced declining same store revenue and profitability over the past several years. As a result, we have implemented, and continue to implement, plans to reduce costs and preserve cash flow. We have also invested in potential growth opportunities, primarily in the digital space. We believe the cost reductions and the new digital initiatives will provide the appropriate capital structure and financial resources necessary to invest in the business and ensure our future success and provide sufficient cash flow to enable us to meet our commitments for the next year.
General economic conditions, including declines in consumer confidence, high unemployment levels in certain local markets, declines in real estate values, and other trends, have also impacted the markets in which we operate. Additionally, media companies continue to be impacted by the migration of consumers and businesses to an internet and mobile-based, digital medium. These conditions may continue to negatively impact print advertising and other revenue sources as well as increase operating costs in the future, even after an economic recovery. We expect that we will have adequate capital resources and liquidity to meet our working capital needs, borrowing obligations and all required capital expenditures for at least the next twelve months.
We periodically perform testing for impairment of goodwill and newspaper mastheads in which the fair value of our reporting units for goodwill impairment testing and individual newspaper mastheads are estimated using the expected present value of future cash flows and recent industry transaction multiples, using estimates, judgments and assumptions, that we believe are appropriate in the circumstances. Should general economic, market or business conditions decline, and have a


negative impact on estimates of future cash flow and market transaction multiples, we may be required to record additional impairment charges in the future.
Critical Accounting Policy Disclosure
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“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.
A summary of our significant accounting policies are described in Note 1, of ouraudited consolidated financial statements "Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies", for the year ended December 25, 2016, included in our Annual Report on Form 10-K.10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission. Management's Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statementsthat reflect our plans, estimates, and beliefs, all of which are based on our current expectations and could be affected by certain uncertainties, risks, and other factors described under Cautionary Note Regarding Forward-Looking Statements and elsewhere throughout this
With
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Quarterly Report, as well as the exception of the adoption of Accounting Standards Update No. 2017-04 “Intangibles - Goodwill and Other - Simplifying the Test for Goodwill Impairment” (Topic 350) described in Note 1 to the unaudited condensed consolidated financial statements, "Unaudited Financial Statements", there have been no other material changes in critical accounting policies in the current year from thosefactors described in our Annual Report on Form 10-K for the year ended December 25, 2016.31, 2020, and subsequent periodic reports filed with the Securities and Exchange Commission, particularly under "Risk Factors."Our actual results could differ materially from those discussed in the forward-looking statements.



OVERVIEW
Results
We are a subscription-led and digitally-focused media and marketing solutions company committed to empowering communities to thrive. We aim to be the premier source for clarity, connections and solutions within our communities. Our strategy is focused on driving audience growth and engagement by delivering deeper content experiences to our consumers, while offering the products and marketing expertise our advertisers desire. The execution of Operationsthis strategy is expected to allow us to continue our evolution from a more traditional print media business to a digitally-focused content platform.

Our current portfolio of media assets includes USA TODAY, local media organizations in 46 states in the U.S., and Newsquest, a wholly-owned subsidiary operating in the United Kingdom ("U.K.") with more than 120 local media brands. We also own the digital marketing services companies ReachLocal, Inc. ("ReachLocal"), UpCurve, Inc. ("UpCurve"), and WordStream, Inc. ("WordStream") which are marketed under the LOCALiQ brand, and run the largest media-owned events business in the U.S., USA TODAY NETWORK Ventures.

Through USA TODAY, our local property network, and Newsquest, we deliver high-quality, trusted content where and when consumers want to engage with it on virtually any device or platform. Additionally, 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.

Business Trends

We have considered several industry trends when assessing our business strategy:

•Print advertising continues to decline as the audience increasingly moves to digital platforms. We look to optimize our print operations to efficiently manage for this declining print audience. We are focused on converting the growing digital audience into digital-only subscribers to our publications.
•Small and medium-sized businesses ("SMBs") are facing an increasingly complex marketing environment and need to create digital presence to capture audience online. We offer a broad suite of DMS products that offer a single, unified solution to meet their digital marketing needs.
•Consumers are looking for experience-based, emotional connections and communities. USA TODAY NETWORK Ventures was designed to celebrate local communities and create opportunities for meaningful in-person and virtual experiences.
•Digital consumer engagement has declined in comparison to such engagement at the height of the COVID-19 pandemic in the second quarter of 2020, as consumers have been able to return to their pre-pandemic routines and have fewer immediate safety concerns. In addition, the overall news cycle, specifically political coverage, has also slowed, driving less consumer engagement to our sites.
•Newsprint availability is constrained due to manufacturing facility closures and conversions to specialty paper and packaging grades. Further, transportation issues are challenging supplier deliveries.

Certain matters affecting comparability

The following items affect period-over-period comparisons from 2020 and will continue to affect period-over-period comparisons for future results:

Reclassifications

Certain amounts in the prior period condensed consolidated financial statements have been reclassified to conform to the current year presentation. In the fourth quarter of 2020, we re-aligned the breakout of the Publishing segment's Circulation revenues related to Digital-only circulation. As a result of this updated presentation, Print circulation revenues increased and Digital-only circulation revenues decreased $3.6 million and $7.5 million for the three and six months ended June 30, 2020, respectively. There was no impact on reported total Publishing segment or consolidated Circulation revenues.

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2027 Notes

At the Special Meeting of stockholders of the Company held on February 26, 2021 (the "Special Meeting"), our stockholders approved the issuance of the maximum number of shares of Common Stock issuable upon conversion of the 6.0% Senior Secured Convertible Notes due 2027 (the "2027 Notes"). As a result, the conversion option can be share-settled in full and qualified for equity classification. Upon reclassification, the conversion feature was adjusted to fair value as of the stockholder approval date and the increase in the fair value resulted in a non-cash loss of $126.6 million due primarily to an increase in our stock price from December 31, 2020. The non-cash loss was recorded in Non-operating expense in the condensed consolidated statements of operations and comprehensive income (loss) for the six months ended June 30, 2021. As of June 30, 2021, the deferred tax asset related to the embedded conversion feature of the 2027 Notes was reclassified to Equity as a reduction to Additional paid-in-capital and reduced the carrying amount of the equity component of the 2027 Notes to $283.7 million.

Integration and reorganization costs

For the three and six months ended June 30, 2021, we incurred Integration and reorganization costs of $8.4 million and $21.8 million, respectively, including $1.1 million and $8.2 million, respectively, related to severance activities and $7.3 million and $13.6 million, respectively, related to other costs, including those for the purpose of consolidating operations.

For the three and six months ended June 30, 2021, we ceased operations of two and ten printing operations, respectively, as part of the synergy and ongoing cost reduction programs. As a result, we recognized accelerated depreciation of $1.1 million and $10.3 million during the three and six months ended June 30, 2021, respectively.

For the three and six months ended June 30, 2020, we incurred Integration and reorganization costs of $32.3 million and $60.6 million, respectively, including $25.7 million and $47.5 million, respectively, related to severance activities and $6.6 million and $13.0 million, respectively, related to other costs, including those for the purpose of consolidating operations.

For the three and six months ended June 30, 2020, we ceased operations of ten and 24 printing operations, respectively, as part of the ongoing cost reduction programs. As a result, we recognized accelerated depreciation of $11.0 million and $35.8 million during the three and six months ended June 30, 2020, respectively.

Goodwill and intangible impairment

During the second quarter of 2021, we (i) compared the fair value of each reporting unit to its carrying amount, which resulted in the fair value of all the reporting groups being in excess of their carrying values and (ii) compared the fair value of each indefinite-lived asset to its carrying amount, which resulted in the fair value of each indefinite-lived asset being in excess of its carrying value. As such, for the three and six months ended June 30, 2021, we did not incur any goodwill and intangible impairments in connection with our annual impairment analysis.

For the three and six months ended June 30, 2020, we incurred goodwill and intangible impairments of $393.4 million, primarily due to the impact of the COVID-19 pandemic on our operations.

Foreign currency

Our U.K. publishing operations are conducted through our Newsquest subsidiary. In addition, our ReachLocal subsidiary has 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. Translation fluctuations impact revenue, expense, and operating income results for international operations.

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Outlook for 2021

Strategy

Our areas of strategic focus for 2021 include:

Accelerating digital subscriber growth

The broad reach of our newsroom network, linking leading national journalism at USA TODAY, our local property network in 46 states in the U.S., and Newsquest in the U.K. with more than 120 local media brands, gives us the ability to deepen our relationships with consumers at both the national and local levels. We bring consumers local news and information that impacts their day-to-day lives while keeping them informed of the national events that impact their country. We believe this local content is not readily obtainable elsewhere, and we are able to deliver that content to our customers across multiple print and digital platforms. As such, a key element of our consumer strategy is growing our paid digital-only subscriber base to 10 million subscribers over the next five years. We expect to do this through expansion of our current subscription products as well as through the launch of new digital subscription offerings tailored to specific users.

Driving digital marketing services growth by engaging more clients in a subscriber relationship

We are now of significant digital scale, with unique reach at both the national and local community levels. We expect to leverage our integrated sales structure and lead generation strategy to continue to aggressively expand our digital marketing services business into our local markets, both domestically and internationally. Given our extensive client base and volume of digital campaigns, we will also use data and insights to inform new and dynamic advertising products that we believe will deliver superior results.

Optimizing our traditional businesses across print and advertising

We will continue to drive the profitability of our traditional print operations through economies of scale, process improvements, and optimizations. We are focused on optimizing our pricing and improving customer service for our print subscribers. Print advertising continues to offer a compelling branding opportunity across our network due to our scale and unique reach at both the national and local community levels.

Prioritizing investments into growth businesses that have significant potential and support our vision

By leveraging our unique footprint, trusted brands, and media reach, we identify, experiment, and invest in potential growth businesses. USA TODAY NETWORK Ventures is a strong example of one such experiment that has grown significantly since its founding in 2015. During 2020, USA TODAY NETWORK Ventures was able to successfully pivot to holding its events virtually, hosting over 250 events. This success has continued in 2021, with over 90 events held through the end of the second quarter of 2021. While live events have resumed in 2021, the majority of events remain virtual. In addition, in connection with our company-wide priority to explore online gaming, in July 2021, we entered into an exclusive agreement with Tipico USA Technology, Inc. ("Tipico"), a U.S.-based subsidiary of European-based Tipico Group of Companies, the leading sports betting provider in Germany, utilizing their Tipico Sportsbook brand.

Impacts of the COVID-19 pandemic

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

We have implemented, and continue to implement, measures to reduce costs and preserve cash flow. These measures include, evaluating and applying for all governmental relief programs for which we are eligible, including the Paycheck
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Protection Program ("PPP"), suspension of the quarterly dividend and refinancing of our debt, as well as reductions in discretionary spending. In addition, we are continuing with our previously disclosed plan to monetize non-core assets.

In connection with the CARES Act, we have received $16.4 million in PPP funding in support of certain of our locations that were meaningfully affected by the COVID-19 pandemic. As of June 30, 2021, PPP loans of $16.4 million are included in Other long-term liabilities in the condensed consolidated balance sheets and in Operating activities in the condensed consolidated statement of cash flows for the six months ended June 30, 2021. Interest expense related to PPP funding was immaterial for the three and six months ended June 30, 2021. Management intends to apply for forgiveness of the PPP loans in accordance with applicable guidelines.
Seasonality

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

RESULTS OF OPERATIONS

Consolidated Summary

A summary of our segment results is presented below:
Three months ended June 30,Six months ended June 30,
In thousands, except per share amountsChangeChange
20212020$%20212020$%
Operating revenues:
Publishing$724,545 $695,893 $28,652 4 %$1,424,130 $1,554,043 $(129,913)(8)%
Digital Marketing Solutions110,037 94,563 15,474 16 %212,318 215,844 (3,526)(2)%
Corporate and other1,705 2,398 (693)(29)%4,779 5,407 (628)(12)%
Intersegment eliminations(32,012)(25,854)(6,158)24 %(59,868)(59,611)(257)— %
Total operating revenues804,275 767,000 37,275 5 %1,581,359 1,715,683 (134,324)(8)%
Operating expenses:
Publishing654,255 1,045,492 (391,237)(37)%1,311,485 1,876,021 (564,536)(30)%
Digital Marketing Solutions105,035 140,403 (35,368)(25)%206,139 263,135 (56,996)(22)%
Corporate and other31,552 44,583 (13,031)(29)%70,217 103,586 (33,369)(32)%
Intersegment eliminations(32,012)(25,854)(6,158)24 %(59,868)(59,611)(257)— %
Total operating expenses758,830 1,204,624 (445,794)(37)%1,527,973 2,183,131 (655,158)(30)%
Operating income (loss)45,445 (437,624)483,069 ***53,386 (467,448)520,834 ***
Non-operating expenses, net13,044 34,483 (21,439)(62)%172,795 76,286 96,509 ***
Income (loss) before income taxes32,401 (472,107)504,508 ***(119,409)(543,734)424,325 (78)%
Provision (benefit) for income taxes17,692 (34,276)51,968 ***8,583 (25,297)33,880 ***
Net income (loss)14,709 (437,831)452,540 ***(127,992)(518,437)390,445 (75)%
Net loss attributable to redeemable noncontrolling interests(406)(938)532 (57)%(791)(1,392)601 (43)%
Net income (loss) attributable to Gannett$15,115 $(436,893)$452,008 ***$(127,201)$(517,045)$389,844 (75)%
Income (loss) per share attributable to Gannett - basic$0.11 $(3.32)$3.43 ***$(0.95)$(3.95)$3.00 (76)%
Income (loss) per share attributable to Gannett - diluted$0.10 $(3.32)$3.42 ***$(0.95)$(3.95)$3.00 (76)%
*** Indicates an absolute value percentage change greater than 100.

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Intersegment eliminations in the preceding table represent digital advertising marketing services revenues and expenses associated with products sold by our U.S. local publishing sales teams but fulfilled by our DMS segment. When discussing segment results, these revenues and expenses are presented gross but are eliminated in consolidation.

Operating revenues

Total Operating revenues were $804.3 million and $1.581 billion for three and six months ended June 30, 2021, respectively, an increase of $37.3 million and a decrease of $134.3 million compared to the three and six months ended June 30, 2020, respectively, for the reasons described below.

For the Publishing segment, Operating revenues increased $28.7 million for the three months ended June 30, 2021 compared to the three months ended June 30, 2020, reflecting higher Advertising and marketing services revenues of $49.2 million, including both print and digital, and higher Other revenues of $11.8 million, partially offset by lower Circulation revenues of $32.4 million. For the six months ended June 30, 2021, Operating revenues decreased $129.9 million compared to the six months ended June 30, 2020 due to lower Advertising and marketing services revenues of $40.1 million, reflecting lower print and higher digital revenues, lower Circulation revenues of $81.7 million, and lower Other revenues of $8.1 million. 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 digital marketing services delivered by our DMS segment. Circulation revenues are derived from home delivery, digital distribution and single copy sales of our publications. Other revenues are derived mainly from commercial printing, distribution arrangements, revenues from our events business, digital content syndication and affiliate revenues and third party newsprint sales.

For the DMS segment, Operating revenues increased $15.5 million for the three months ended June 30, 2021 compared to the three months ended June 30, 2020, reflecting higher Advertising and marketing services revenues of $20.2 million, partially offset by lower Other revenues of $4.8 million. For the six months ended June 30, 2021, Operating revenues decreased $3.5 million compared to the six months ended June 30, 2020, reflecting higher Advertising and marketing services revenues of $5.3 million, which were more than offset by lower Other revenues of $8.8 million. Our DMS segment generates 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.

For the Corporate and other category, Operating revenues decreased $0.7 million and $0.6 million during the three and six months ended June 30, 2021, respectively, compared to the three and six months ended June 30, 2020. Revenues at our Corporate and other category are primarily driven by cloud offerings and software licensing.

Operating expenses

Total Operating expenses were $758.8 million and $1.528 billion for the three and six months ended June 30, 2021, respectively, a decrease of $445.8 million and $655.2 million compared to the three and six months ended June 30, 2020, respectively. Operating expenses consist primarily of the following:

•Operating costs at the Publishing segment 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);
•Other operating expenses include third-party debt expenses as well as acquisition-related costs;
•Gains or losses on the sale or disposal of assets; and
•Impairment charges, including costs incurred related to goodwill, intangible assets and property, plant and equipment.

For the three months ended June 30, 2021, Operating expenses at our Publishing segment decreased $391.2 million compared to the three months ended June 30, 2020, reflecting a decrease in Operating costs of $6.7 million, a decrease in Depreciation and amortization of $20.1 million, a decrease in Integration and reorganization costs of $20.8 million, a decrease in Asset impairments of $6.9 million, and a decrease in Goodwill and intangible impairments of $352.9 million, partially offset by an increase in Selling, general and administrative expenses of $9.9 million and an increase in Loss on the sale or disposal of
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assets of $6.3 million. For the six months ended June 30, 2021, Operating expenses at our Publishing segment decreased $564.5 million compared to the six months ended June 30, 2020, reflecting a decrease in Operating costs of $93.8 million, a decrease in Selling, general and administrative expenses of $54.7 million, a decrease in Depreciation and amortization of $40.7 million, a decrease in Integration and reorganization costs of $26.8 million, a decrease in Asset impairments of $6.0 million, and a decrease in Goodwill and intangible impairments of $352.9 million, partially offset by an increase in Loss on the sale or disposal of assets of $10.4 million.

For the three months ended June 30, 2021, Operating expenses at our DMS segment decreased $35.4 million compared to the three months ended June 30, 2020, reflecting a decrease in Goodwill and intangible impairments of $40.5 million, a decrease in Selling, general and administrative expenses of $6.1 million, a decrease in Integration and reorganization costs of $2.8 million and a decrease in Loss on the sale or disposal of assets of $1.0 million, partially offset by an increase in Operating costs of $11.2 million, and an increase in Depreciation and amortization of $3.8 million. For the six months ended June 30, 2021, Operating expenses at our DMS segment decreased $57.0 million compared to the six months ended June 30, 2020, reflecting a decrease in Goodwill and intangible impairments of $40.5 million, a decrease in Selling, general and administrative expenses of $23.0 million, a decrease in Integration and reorganization costs of $4.0 million and a decrease in Loss on the sale or disposal of assets of $1.1 million, partially offset by an increase in Operating costs of $7.2 million and an increase in Depreciation and amortization of $4.3 million.

For the three months ended June 30, 2021, Operating expenses at Corporate and other decreased $13.0 million compared to the three months ended June 30, 2020, reflecting a decrease in Selling, general and administrative expenses of $9.1 million, a decrease in Depreciation and amortization of $1.8 million, and a decrease in Other operating expenses of $1.6 million. For the six months ended June 30, 2021, Operating expenses at Corporate and other decreased $33.4 million compared to the six months ended June 30, 2020, due to a decrease in Selling, general and administrative expenses of $24.8 million, a decrease in Integration and reorganization costs of $7.9 million, a decrease in Depreciation and amortization of $1.6 million, and a decrease in Operating costs of $1.9 million, partially offset by an increase in Other operating expenses of $3.0 million.

Refer to the discussion of segment results below for further information.

Non-operating (income) expense

Interest expense: For the three and six months ended June 30, 2021, Interest expense was $35.3 million and $74.8 million, respectively, compared to $57.9 million and $115.8 million for the three and six months ended June 30, 2020, respectively. The decrease in interest expense for the three and six months ended June 30, 2021 was mainly due to a lower effective interest rate driven by the refinancing of our five-year, senior-secured 11.5% term loan facility with Apollo Capital Management, L.P. (the "Acquisition Term Loan") in the first quarter of 2021 and a lower debt balance compared to the same period in 2020.

Loss on early extinguishment of debt: For the three and six months ended June 30, 2021, Loss on early extinguishment of debt was $2.8 million and $22.2 million, respectively. For the three and six months ended June 30, 2020, Loss on early extinguishment of debt was $0.4 million and $1.2 million, respectively. The increase in loss for the three months ended June 30, 2021 was mainly due to early prepayments on our five-year, senior-secured term loan facility (the "5-Year Term Loan"). The increase in loss for the six months ended June 30, 2021 was mainly due to the payoff of the Acquisition Term Loan in the first quarter of 2021.

Non-operating pension income: For the three and six months ended June 30, 2021, Non-operating pension income was $23.9 million and $47.8 million, respectively, compared to $17.6 million and $36.1 million for the three and six months ended June 30, 2020, respectively. The increase in non-operating pension income for the three and six months ended June 30, 2021 was primarily due to an increase in the expected return on plan assets held by the Gannett Retirement Plan and lower interest costs on benefit obligations.

Loss on Convertible notes derivative: For the six months ended June 30, 2021, Loss on Convertible notes derivative was $126.6 million, due to the increase in the fair value of the derivative liability as a result of the increase in the Company's stock price.

Provision (benefit) for income taxes

The following table summarizes our historical resultsLoss before income taxes and income tax accounts:

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Table of operations for New Media for the three and nine months ended September 24, 2017 and September 25, 2016. References to “same store” results take into account material acquisitions and divestitures of the Company by adjusting prior year performance to include or exclude financial results as if the Company had owned or divested a business for the comparable period. The results of several acquisitions (“tuck-in acquisitions”) were funded from the Company's available cash and are not considered material.Contents
Three months ended June 30,Six months ended June 30,
In thousands2021202020212020
Income (loss) before income taxes$32,401 $(472,107)$(119,409)$(543,734)
Provision (benefit) for income taxes17,692 (34,276)8,583 (25,297)
Effective tax rate54.6 %7.3 %(7.2)%4.7 %

The same store resultsprovision for income taxes for the three months ended September 24, 2017 areJune 30, 2021 was mainly driven by pre-tax income and is impacted by the samecreation of valuation allowances on non-deductible interest expense carryforwards in combination with the U.K. enacted legislation to increase the statutory tax rate from 19% to 25%, effective April 1, 2023. While the U.K. corporate tax rate change does not impact 2021 or 2022 tax filings, the rate change impacts the tax effected value of the U.K. deferred tax liabilities. The provision was calculated using the estimated annual effective tax rate of 49.6%. The estimated annual effective tax rate is based on a projected tax expense for the full year.

The tax provision for the six months ended June 30, 2021 was mainly impacted by the pre-tax net loss generated during the first quarter of 2021. The tax provision is mainly impacted by the derivative revaluation, which is nondeductible for tax purposes, partially offset by the creation of valuation allowances on non-deductible interest expense carryforwards as reported,well as state income tax and foreign tax expense.

As of June 30, 2021, we reclassified $32.5 million as tax effected in connection with the year-to-date same store results are not significantly differentretirement of the deferred tax asset related to the embedded conversion feature associated with the Company’s 2027 Notes. The retirement of the deferred tax asset resulted from actual results. Therefore, the revenue discussion below will focus onreclassification of the embedded conversion feature from a derivative liability to Equity as reported amounts only.a reduction to Additional paid-in-capital during the first quarter of 2021. See Note 7 - Debt for additional information about the Company's 2027 Notes.
NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(In thousands)
 Three months ended September 24, 2017 Three months ended September 25, 2016 Nine months ended September 24, 2017 Nine months ended September 25, 2016
Revenues:       
Advertising$159,481
 $164,683
 $482,427
 $502,474
Circulation112,792
 104,693
 334,160
 312,664
Commercial printing and other44,903
 37,461
 130,986
 106,633
Total revenues317,176
 306,837
 947,573
 921,771
Operating costs and expenses:  
 
 
Operating costs177,724
 172,972
 532,535
 519,982
Selling, general, and administrative106,809
 100,052
 319,338
 306,165
Depreciation and amortization18,257
 17,014
 54,621
 50,364
Integration and reorganization costs2,210
 5,197
 6,817
 7,532
Impairment of long-lived assets—
 —
 6,485
 —
Goodwill and mastheads impairment—
 —
 27,448
 —
Loss (gain) on sale or disposal of assets686
 974
 (1,860) 3,325
Operating income11,490
 10,628
 2,189
 34,403
Interest expense7,848
 7,391
 22,283
 22,269
Loss on early extinguishment of debt4,767
 —
 4,767
 —
Other income(88) (62) (75) (316)
(Loss) income before income taxes(1,037) 3,299
 (24,786) 12,450
Income tax expense (benefit)934
 504
 2,557
 (4,695)
Net (loss) income$(1,971) $2,795
 $(27,343) $17,145
Three Months Ended September 24, 2017 Compared To Three Months Ended September 25, 2016
Revenue. Total revenueThe benefit for income taxes for the three months ended September 24, 2017June 30, 2020 was caused largely by the pre-tax net loss generated during the second quarter of 2020. The benefit from income taxes was reduced due to non-deductible asset impairments, non-deductible officers' compensation, and the creation of a valuation allowance against deferred tax assets arising from non-deductible interest carryforwards. These non-deductible expenses resulted in an estimated annual effective tax rate lower than the statutory federal rate of 21%. The benefit for income taxes for the three months ended June 30, 2020 was calculated using the estimated annual effective tax rate of 6.8%. The estimated annual effective tax rate is based on a projected tax benefit for the year.

Several COVID-19 pandemic-related economic relief bills have been enacted into law in 2020 and 2021. We continue to monitor the applicability of federal and state legislation to the Company, as well asregulatory interpretations of enacted legislation that provides economic relief in response to the pandemic and expect to utilize these provisions as we determine necessary or desirable.

Net income (loss) attributable to Gannett and diluted income (loss) per share attributable to Gannett

For the three months ended June 30, 2021, Net income attributable to Gannett and diluted income per share attributable to Gannett were $15.1 million and $0.10, respectively, compared to Net loss attributable to Gannett and diluted loss per share attributable to Gannett of $436.9 million and $3.32 for the three months ended June 30, 2020, respectively. For the six months ended June 30, 2021, Net loss attributable to Gannett and diluted loss per share attributable to Gannett were $127.2 million and $0.95, respectively, compared to $517.0 million and $3.95 for the six months ended June 30, 2020, respectively. The change for the three and six months ended June 30, 2021 reflects the various items discussed above.

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Publishing segment

A summary of our Publishing segment results is presented below:
Three months ended June 30,Six months ended June 30,
ChangeChange
In thousands20212020$%20212020$%
Operating revenues:
Advertising and marketing services$341,481 $292,252 $49,229 17 %$655,791 $695,888 $(40,097)(6)%
Circulation310,258 342,645 (32,387)(9)%635,694 717,365 (81,671)(11)%
Other72,806 60,996 11,810 19 %132,645 140,790 (8,145)(6)%
Total operating revenues724,545 695,893 28,652 4 %1,424,130 1,554,043 (129,913)(8)%
Operating expenses:
Operating costs426,216 432,920 (6,704)(2)%858,017 951,779 (93,762)(10)%
Selling, general and administrative expenses185,930 176,043 9,887 6 %352,133 406,856 (54,723)(13)%
Depreciation and amortization36,416 56,553 (20,137)(36)%82,803 123,510 (40,707)(33)%
Integration and reorganization costs(197)20,619 (20,816)***7,129 33,927 (26,798)(79)%
Asset impairments— 6,859 (6,859)(100)%833 6,859 (6,026)(88)%
Goodwill and intangible impairments— 352,947 (352,947)(100)%— 352,947 (352,947)(100)%
Net (gain) loss on sale or disposal of assets5,890 (449)6,339 ***10,570 143 10,427 ***
Total operating expenses654,255 1,045,492 (391,237)(37)%1,311,485 1,876,021 (564,536)(30)%
Operating income (loss)$70,290 $(349,599)$419,889 ***$112,645 $(321,978)$434,623 ***
*** Indicates an absolute value percentage change greater than 100.

Operating revenues

The following table provides the breakout of Operating revenues by category:
Three months ended June 30,Six months ended June 30,
ChangeChange
In thousands20212020$%20212020$%
Local and national print$127,600 $117,666 $9,934 8 %$244,999 $290,836 $(45,837)(16)%
Classified print73,325 70,229 3,096 4 %149,122 164,678 (15,556)(9)%
Print advertising200,925 187,895 13,030 7 %394,121 455,514 (61,393)(13)%
Digital media94,549 65,314 29,235 45 %174,106 151,811 22,295 15 %
Digital marketing services33,221 23,640 9,581 41 %61,574 54,179 7,395 14 %
Digital classified12,786 15,403 (2,617)(17)%25,990 34,384 (8,394)(24)%
Digital advertising and marketing services140,556 104,357 36,199 35 %261,670 240,374 21,296 9 %
Advertising and marketing services341,481 292,252 49,229 17 %655,791 695,888 (40,097)(6)%
Print circulation286,252 325,459 (39,207)(12)%588,509 684,377 (95,868)(14)%
Digital-only circulation24,006 17,186 6,820 40 %47,185 32,988 14,197 43 %
Circulation310,258 342,645 (32,387)(9)%635,694 717,365 (81,671)(11)%
Other72,806 60,996 11,810 19 %132,645 140,790 (8,145)(6)%
Total operating revenues$724,545 $695,893 $28,652 4 %$1,424,130 $1,554,043 $(129,913)(8)%

For the three months ended June 30, 2021, Print advertising revenues increased $13.0 million, mainly due to an improvement in operating trends since the second quarter of 2020, which was the quarter most significantly impacted by the
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COVID-19 pandemic. For the three months ended June 30, 2021, Local and national print advertising revenues increased $9.9 million, compared to the three months ended June 30, 2020, primarily due to higher advertising volumes and an increase in advertiser inserts. For the three months ended June 30, 2021, Classified print advertising revenues increased $3.1 million, compared to the three months ended June 30, 2020, due to increased spend in classified advertisements, including legal, employment and real estate. For the six months ended June 30, 2021, the overall decline in Print advertising revenues of $61.4 million was driven by secular industry trends impacting all categories. For the six months ended June 30, 2021, Local and national print advertising revenues decreased $45.8 million compared to the six months ended June 30, 2020, due to lower advertising volume and a decline in advertiser inserts. For the six months ended June 30, 2021, Classified print advertising revenues decreased $15.6 million compared to the six months ended June 30, 2020, due to reduced spend in classified advertisements, including legal, real estate and automotive.

For the three months ended June 30, 2021, Digital advertising and marketing services revenues increased $36.2 million, due to an increase of $29.2 million in Digital media revenues, an increase of $9.6 million in Digital marketing services revenues, and a decrease of $2.6 million in Digital classified revenues, compared to the three months ended June 30, 2020. For the six months ended June 30, 2021, Digital advertising and marketing services revenues increased $21.3 million, due to an increase of $22.3 million in Digital media revenues across both owned and operated sites as well as third-party sites, an increase of $7.4 million in Digital marketing services revenues, and a decrease of $8.4 million Digital classified revenues compared to the six months ended June 30, 2020. For both the three and six months ended June 30, 2021, the overall increase in Digital advertising and marketing services revenues was due to an increase in Digital media spend and Digital marketing services revenues as well as an improvement in operating trends since the second quarter of 2020, which was the quarter most significantly impacted by the COVID-19 pandemic. The increase in Digital media revenues for the three and six months ended June 30, 2021 was driven by a higher mix of premium media sold as well as an overall increase in rate. The increase in Digital marketing services revenues for the three and six months ended June 30, 2021 was due to higher client counts and higher average revenue per customer for digital marketing services sold primarily as a result of focusing on strategic initiatives across our local marketing sales force. The decrease in Digital classified revenues for the three and six months ended June 30, 2021 was due to reductions in spend in automotive, employment and obituary classified advertisements.

For the three and six months ended June 30, 2021, Print circulation revenues decreased $39.2 million and $95.9 million, respectively, compared to the three and six months ended June 30, 2020, driven by a reduction in the volume of home delivery subscribers and a decline in single copy sales reflecting the overall secular trends impacting the industry as well as the impact of the COVID-19 pandemic on business travel and overall consumer activity. For the three and six months ended June 30, 2021, Digital-only circulation revenues increased $6.8 million and $14.2 million, respectively, compared to the three and six months ended June 30, 2020, driven by an increase of 41% in paid digital-only subscribers, including those subscribers on introductory subscription offers, to approximately 1.4 million compared to the prior year as well as a slight increase in average revenue per customer.

For the three months ended June 30, 2021, Other revenues increased $11.8 million compared to the three months ended June 30, 2020, primarily due to commercial print customer retention and growth in local markets, as well as an increase in digital content syndication volume compared to the second quarter of 2020, which was the quarter most impacted by the COVID-19 pandemic. For the six months ended June 30, 2021, Other revenues decreased $8.1 million compared to the six months ended June 30, 2020, primarily due to a decline in event revenues due to fewer in-person events during the six months ended June 30, 2021 compared to the same period in the prior year as a result of the COVID-19 pandemic, as well as declines in the commercial print and delivery business, driven by secular trends impacting the industry, partially offset by an increase digital content syndication volume.

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Operating expenses

For the three and six months ended June 30, 2021, Operating costs decreased $6.7 million and $93.8 million, respectively, compared to the three and six months ended June 30, 2020. The following table provides the breakout of the decrease in Operating costs:

Three months ended June 30,Six months ended June 30,
ChangeChange
In thousands20212020$%20212020$%
Newsprint and ink$23,713 $29,542 $(5,829)(20)%$51,984 $69,847 $(17,863)(26)%
Distribution112,446 100,627 11,819 12 %208,551 207,579 972 — %
Compensation and benefits137,775 144,246 (6,471)(4)%284,893 325,354 (40,461)(12)%
Outside services88,918 78,641 10,277 13 %157,682 164,473 (6,791)(4)%
Other63,364 79,864 (16,500)(21)%154,907 184,526 (29,619)(16)%
Total operating costs$426,216 $432,920 $(6,704)(2)%$858,017 $951,779 $(93,762)(10)%

For the three and six months ended June 30, 2021, Newsprint and ink costs decreased $5.8 million and $17.9 million, respectively, compared to the three and six months ended June 30, 2020, mainly due to lower print circulation driven by the decline in volume of home delivery and single copy sales, and for the six months ended June 30, 2021 due to declines in print advertising volumes.

For the three months ended June 30, 2021, Distribution costs increased $11.8 million compared to the three months ended June 30, 2020, primarily driven by an increase in distribution postage, an increase in costs associated with distribution employees and contractors related to overtime costs resulting from labor shortages as well as activity in our commercial print business during the quarter. For the six months ended June 30, 2021, Distribution costs were essentially flat compared to the six months ended June 30, 2020 as the increases for the three months ended June 30, 2021 were offset by the decline in print circulation and print advertising volumes incurred in the first quarter of 2021.

For the three and six months ended June 30, 2021, Compensation and benefits costs decreased $6.5 million and $40.5 million, respectively, compared to the three and six months ended June 30, 2020, due to the benefit in 2021 of cost containment initiatives implemented in the second half of 2020 in connection with the COVID-19 pandemic, as well as a reduction in costs associated with ongoing integration efforts, including headcount reductions, offset by the absence of the temporary reduction of expenses in the prior year, such as furloughs and wage reductions in response to the COVID-19 pandemic.

For the three months ended June 30, 2021, Outside services costs, which includes outside printing, professional services fulfilled by third parties, paid search and ad serving, feature services, and credit card fees, increased $10.3 million compared to the three months ended June 30, 2020, due to higher costs associated with the increase in Digital media and Digital marketing services revenues, including paid search fees and affiliate revenue share as well as other related costs, offset by the benefits in 2021 of cost containment initiatives implemented in the second half of 2020 in connection with the COVID-19 pandemic and a reduction in costs associated with ongoing integration efforts. For the six months ended June 30, 2021, Outside services costs decreased $6.8 million compared to the six months ended June 30, 2020, due to the benefit in 2021 of cost containment initiatives implemented in the second half of 2020 in connection with the COVID-19 pandemic and a reduction in costs associated with ongoing integration efforts, offset by higher costs associated with the increase in Digital media and Digital marketing services revenues, including paid search fees and affiliate revenue share as well as other related costs.

For the three and six months ended June 30, 2021, Other costs, which primarily includes travel, and facility and equipment costs, decreased $16.5 million and $29.6 million, respectively, compared to the three and six months ended June 30, 2020, due to a reduction in costs associated with ongoing integration efforts and cost containment initiatives.

For the three and six months ended June 30, 2021, Selling, general and administrative expenses increased $9.9 million and decreased $54.7 million, respectively, compared to the three and six months ended June 30, 2020. The following table provides the breakout of the decrease in Selling, general and administrative expenses:
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Three months ended June 30,Six months ended June 30,
ChangeChange
In thousands20212020$%20212020$%
Compensation and benefits$100,403 $88,423 $11,980 14 %$190,113 $201,950 $(11,837)(6)%
Outside services and other85,527 87,620 (2,093)(2)%162,020 204,906 (42,886)(21)%
Total Selling, general and administrative expenses$185,930 $176,043 $9,887 6 %$352,133 $406,856 $(54,723)(13)%

For the three months ended June 30, 2021, Compensation and benefits costs increased $12.0 million compared to the three months ended June 30, 2020, due to the negative impact of higher commission expenses driven by the growth in Advertising and marketing services revenues as well as a difficult comparison to the second quarter of 2020 due to the temporary reduction of expenses in the prior year quarter, such as furloughs and wage reductions, related to cost containment initiatives driven by the COVID-19 pandemic. For the six months ended June 30, 2021, Compensation and benefits costs decreased $11.8 million compared to the six months ended June 30, 2020, due to the benefit in 2021 of cost containment initiatives implemented in the second half of 2020 in connection with the COVID-19 pandemic, as well as a reduction in costs associated with ongoing integration efforts, including headcount reductions, partially offset by the negative impact of higher payroll and commission expenses driven by the growth in Advertising and marketing services revenues and the absence of the temporary reduction of expenses in the prior year, such as furloughs and wage reductions.

For the three and six months ended June 30, 2021, Outside services and other costs, which includes services fulfilled by third parties, decreased $2.1 million and $42.9 million, respectively, compared to the three and six months ended June 30, 2020, due to lower facility related costs, lower bad debt expense and the benefit in 2021 of cost containment initiatives implemented in the second half of 2020 in connection with the COVID-19 pandemic.

For the three and six months ended June 30, 2021, Depreciation and amortization expenses decreased $20.1 million and $40.7 million, respectively, compared to the three and six months ended June 30, 2020, due to a decrease in accelerated depreciation of $9.9 million and $25.5 million, respectively, as a result of fewer print facility shutdowns and strategic dispositions of real estate during the period related to ongoing cost reduction programs.

For the three and six months ended June 30, 2021, Integration and reorganization costs decreased $20.8 million and $26.8 million, respectively, compared to the three and six months ended June 30, 2020 due to a decrease in severance costs of $17.7 million and $23.2 million, respectively, as well as a decrease in other costs, including those for the consolidation of operations of $3.1 million and $3.6 million, respectively. For the three and six months ended June 30, 2021, severance costs were primarily related to facility consolidation activities. For the three and six months ended June 30, 2020, severance costs were related to acquisition-related synergies and the consolidation of the business due to our acquisition of Gannett Co., Inc. (which was renamed Gannett Media Corp. and is referred to as "Legacy Gannett") in the fourth quarter of 2019.

For the three and six months ended June 30, 2021, we did not incur any goodwill and intangible impairments. For the three and six months ended June 30, 2020, we recorded a goodwill and intangible impairment charge of $352.9 million at the Publishing segment, primarily due to the impact of the COVID-19 pandemic on our operations.

For the three and six months ended June 30, 2021, Loss on the sale or 3.4%,disposal of assets increased $6.3 million and $10.4 million, respectively, compared to $317.2the three and six months ended June 30, 2020, driven by the sale of assets in 2021 as part of our plan to monetize non-core assets.
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Publishing segment Adjusted EBITDA
Three months ended June 30,Six months ended June 30,
ChangeChange
In thousands20212020$%20212020$%
Net income (loss) attributable to Gannett$96,431 $(328,207)$424,638 ***$162,655 $(281,213)$443,868 ***
Interest expense— 92(92)(100)%— 110 (110)(100)%
Non-operating pension income(23,906)(17,480)(6,426)37 %(47,784)(35,953)(11,831)33 %
Other non-operating income, net(1,829)(3,066)1,237 (40)%(1,435)(3,530)2,095 (59)%
Depreciation and amortization36,416 56,553 (20,137)(36)%82,803 123,510 (40,707)(33)%
Integration and reorganization costs(197)20,619 (20,816)***7,129 33,927 (26,798)(79)%
Asset impairments— 6,859 (6,859)(100)%833 6,859 (6,026)(88)%
Goodwill and intangible impairments— 352,947 (352,947)(100)%— 352,947 (352,947)(100)%
Net (gain) loss on sale or disposal of assets5,890 (449)6,339 ***10,570 143 10,427 ***
Other items1,384 4,123 (2,739)(66)%1,626 6,214 (4,588)(74)%
Adjusted EBITDA (non-GAAP basis)$114,189 $91,991 $22,198 24 %$216,397 $203,014 $13,383 7 %
Net income (loss) attributable to Gannett margin13.3 %(47.2)%11.4 %(18.1)%
Adjusted EBITDA margin (non-GAAP basis)(a)
15.8 %13.2 %15.2 %13.1 %
*** Indicates an absolute value percentage change greater than 100.
(a)We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Operating revenues.

Adjusted EBITDA for our Publishing segment was $114.2 million from $306.8and $216.4 million for the three and six months ended June 30, 2021, respectively, an increase of $22.2 million and $13.4 million compared to the three and six months ended June 30, 2020, respectively. The increase for the three and six months ended June 30, 2021 was primarily attributable to the changes discussed above.

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Digital Marketing Solutions segment

A summary of our Digital Marketing Solutions segment results is presented below:
Three months ended June 30,Six months ended June 30,
ChangeChange
In thousands20212020$%20212020$%
Operating revenues:
Advertising and marketing services$110,037 $89,809 $20,228 23 %$211,413 $206,092 $5,321 3 %
Other— 4,754 (4,754)(100)%905 9,752 (8,847)(91)%
Total operating revenues110,037 94,563 15,474 16 %212,318 215,844 (3,526)(2)%
Operating expenses:
Operating costs74,429 63,264 11,165 18 %143,707 136,519 7,188 5 %
Selling, general and administrative expenses23,079 29,158 (6,079)(21)%46,910 69,892 (22,982)(33)%
Depreciation and amortization7,850 4,004 3,846 96 %15,679 11,335 4,344 38 %
Integration and reorganization costs204 2,962 (2,758)(93)%370 4,351 (3,981)(91)%
Goodwill and intangible impairments— 40,499 (40,499)***— 40,499 (40,499)***
Net (gain) loss on sale or disposal of assets(527)516 (1,043)***(527)539 (1,066)***
Total operating expenses105,035 140,403 (35,368)(25)%206,139 263,135 (56,996)(22)%
Operating income (loss)$5,002 $(45,840)$50,842 ***$6,179 $(47,291)$53,470 ***
*** Indicates an absolute value percentage change greater than 100.

Operating revenues

For the three and six months ended June 30, 2021, Advertising and marketing services revenues increased $20.2 million and $5.3 million compared to the three and six months ended June 30, 2020. The increase for the three months ended June 30, 2021 was primarily driven by growth in the core ReachLocal business and an improvement in operating trends since the second quarter of 2020, which was the quarter most significantly impacted by the COVID-19 pandemic. The increase for the six months ended June 30, 2021 was primarily due to growth in the core ReachLocal business, partially offset by the absence of $10.4 million of revenues in 2021 as a result of the change in media rebate programs, as well as the absence of revenues associated with a business we divested in the third quarter of 2020.

For the three and six months ended June 30, 2021, Other revenues decreased $4.8 million and $8.8 million, respectively, compared to the three and six months ended June 30, 2020, primarily due to the absence of revenues related to systems integration services associated with a business we divested in the fourth quarter of 2020.

Operating expenses

For the three and six months ended June 30, 2021, Operating costs increased $11.2 million and $7.2 million, respectively, compared to the three and six months ended June 30, 2020. The following table provides the breakout of Operating costs:

Three months ended June 30,Six months ended June 30,
ChangeChange
In thousands20212020$%20212020$%
Compensation and benefits$7,680 $10,594 $(2,914)(28)%$15,815 $24,223 $(8,408)(35)%
Outside services64,400 48,927 15,473 32 %123,091 103,934 19,157 18 %
Other2,349 3,743 (1,394)(37)%4,801 8,362 (3,561)(43)%
Total operating costs$74,429 $63,264 $11,165 18 %$143,707 $136,519 $7,188 5 %

For the three and six months ended June 30, 2021, Compensation and benefits costs decreased $2.9 million and $8.4 million, respectively, compared to the three and six months ended June 30, 2020, due to the benefit in 2021 of cost containment initiatives implemented in the second half of 2020 in connection with the COVID-19 pandemic, as well as a reduction in costs
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associated with ongoing integration efforts, including headcount reductions, offset by the absence of the temporary reduction of expenses in the prior year, such as furloughs and wage reductions.

For the three and six months ended June 30, 2021, Outside services costs, which includes professional services fulfilled by third parties, media fees and other digital costs, increased $15.5 million and $19.2 million, respectively, compared to the three and six months ended June 30, 2020, due to an increase in expenses associated with third-party media fees driven by an increase in corresponding revenue.

For the three and six months ended June 30, 2021, Selling, general and administrative expenses decreased $6.1 million and $23.0 million, respectively, compared to the three and six months ended June 30, 2020. The following table provides the breakout of the decrease in Selling, general and administrative expenses by category:

Three months ended June 30,Six months ended June 30,
ChangeChange
In thousands20212020$%20212020$%
Compensation and benefits$17,175 $27,947 $(10,772)(39)%$35,237 $63,720 $(28,483)(45)%
Outside services and other5,904 1,211 4,693 ***11,673 6,172 5,501 89 %
Total Selling, general and administrative expenses$23,079 $29,158 $(6,079)(21)%$46,910 $69,892 $(22,982)(33)%
*** Indicates an absolute value percentage change greater than 100.

For the three and six months ended June 30, 2021, Compensation and benefits costs decreased $10.8 million and $28.5 million, respectively, compared to the three and six months ended June 30, 2020, due to the benefit in 2021 of cost containment initiatives implemented in the second half of 2020 in connection with the COVID-19 pandemic, as well as a reduction in costs associated with ongoing integration efforts, including headcount reductions, offset by the absence of the temporary reduction of expenses in the prior year, such as furloughs and wage reductions.

For the three and six months ended June 30, 2021, Outside services and other costs increased $4.7 million and $5.5 million, respectively, compared to the three and six months ended June 30, 2020, due to an increase in various miscellaneous expenses.

For the three and six months ended June 30, 2021, Integration and reorganization costs decreased $2.8 million and $4.0 million, respectively, compared to the three and six months ended June 30, 2020 due to lower severance costs of $2.8 million and $4.2 million, respectively. For the three and six months ended June 30, 2020, severance costs were related to acquisition-related synergies and the consolidation of the business due to our acquisition of Legacy Gannett in the fourth quarter of 2019.

For the three and six months ended June 30, 2021, we did not incur any goodwill and intangible impairments. For the three and six months ended June 30, 2020, we recorded a goodwill and intangible impairment charge of $40.5 million at the DMS segment, primarily due to the impact of the COVID-19 pandemic on our operations.
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Digital Marketing Solutions segment Adjusted EBITDA
Three months ended June 30,Six months ended June 30,
ChangeChange
In thousands20212020$%20212020$%
Net income (loss) attributable to Gannett$4,904 $(43,226)$48,130 ***$5,985 $(48,301)$54,286 ***
Other non-operating expense (income), net98 (2,614)2,712 ***194 1,010 (816)(81)%
Depreciation and amortization7,850 4,004 3,846 96 %15,679 11,335 4,344 38 %
Integration and reorganization costs204 2,962 (2,758)(93)%370 4,351 (3,981)(91)%
Goodwill and intangible impairments— 40,499 (40,499)***— 40,499 (40,499)***
Net (gain) loss on sale or disposal of assets(527)516 (1,043)***(527)539 (1,066)***
Other items— 643 (643)***— 1,235 (1,235)***
Adjusted EBITDA (non-GAAP basis)$12,529 $2,784 $9,745 ***$21,701 $10,668 $11,033 ***
Net income (loss) attributable to Gannett margin4.5 %(45.7)%2.8 %(22.4)%
Adjusted EBITDA margin (non-GAAP basis)(a)
11.4 %2.9 %10.2 %4.9 %
*** Indicates an absolute value percentage change greater than 100.
(a)We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Operating revenues.

Adjusted EBITDA for our Digital Marketing Solutions segment was $12.5 million and $21.7 million for the three and six months ended June 30, 2021, respectively, compared to $2.8 million and $10.7 million in three and six months ended June 30, 2020, respectively, primarily attributable to the changes discussed above.

Corporate and other category

For the three months ended June 30, 2021, Corporate and other operating revenues were $1.7 million compared to $2.4 million for the three months ended September 25, 2016. The increase in total revenue was comprised of an $8.1 million, or 7.7%, increase in circulation revenue and a $7.4 million, or 19.7%, increase in commercial printingJune 30, 2020. For the six months ended June 30, 2021, Corporate and other revenue, which was partially offset by a $5.2operating revenues were $4.8 million or 3.2%,compared to $5.4 million for the six months ended June 30, 2020.

For the three and six months ended June 30, 2021, Corporate and other operating expenses decreased $13.0 million and $33.4 million, respectively, compared to the three and six months ended June 30, 2020. The following table provides the breakout of the decrease in advertising revenue.Corporate and Other operating expenses:
Advertising revenue declines were primarily driven by declines on the print side of our business in the local retail, classified, and preprint categories due to secular pressures and a continuing uncertain economic environment. These secular trends and economic conditions have also led to a decline in our print circulation volumes, which have been offset by price increases in select locations. The majority of the increase in commercial printing and other revenue is due to digital marketing services and events revenue.

Three months ended June 30,Six months ended June 30,
ChangeChange
In thousands20212020$%20212020$%
Operating expenses:
Operating costs$4,539 $4,691 $(152)(3)%$8,495 $10,439 $(1,944)(19)%
Selling, general and administrative expenses13,895 22,997 (9,102)(40)%28,164 52,947 (24,783)(47)%
Depreciation and amortization3,976 5,770 (1,794)(31)%7,863 9,507 (1,644)(17)%
Integration and reorganization costs8,437 8,725 (288)(3)%14,349 22,282 (7,933)(36)%
Other operating expenses774 2,379 (1,605)(67)%11,350 8,348 3,002 36 %
Net (gain) loss on sale or disposal of assets(69)21 (90)***(4)63 (67)***
Total operating expenses$31,552 $44,583 $(13,031)(29)%$70,217 $103,586 $(33,369)(32)%

*** Indicates an absolute value percentage change greater than 100.
Operating Costs. Operating costs for
For the three months ended September 24, 2017 increased by $4.7June 30, 2021, Corporate and other operating expenses decreased $13.0 million or 2.7%,compared to $177.7 million from $173.0 million for the three months ended September 25, 2016. Operating costs include costs from acquisitions of $18.8 million, which was partially offset by a $14.1 million decrease in the costs related to the remaining operations. This decline in operating costs related to the remaining operations was primarilyJune 30, 2020 due to a decrease in compensation, hauling and delivery, newsprint and ink and postage expenses of $7.7 million, $1.9 million, $1.8 million and $0.5 million, respectively. There were no other decreases greater than $0.5 million.
Selling, General and Administrative.Selling, general and administrative expenses forof $9.1 million, mainly consisting of cost containment initiatives, offset by the absence of the temporary reduction of expenses in the prior year, such as
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furloughs and wage reductions, a decrease in Depreciation and amortization of $1.8 million, and a decrease in Other operating expenses of $1.6 million, which was primarily due to $0.7 million of third-party fees related to the 5-Year Term Loan (defined below) expensed during the three months ended September 24, 2017 increased by $6.7June 30, 2021 compared to $2.4 million or 6.7%, to $106.8 million from $100.1 million forof Acquisition costs incurred during the three months ended September 25, 2016. The increase includes selling, generalJune 30, 2020.

For the six months ended June 30, 2021, Corporate and administrativeother operating expenses from acquisitions of $10.5decreased $33.4 million and an increase in professional and consulting fees of $1.1 million, which was partially offset by a $4.9 million decrease in the costs related to the remaining operations. This decline in selling, general and administrative expenses related to the remaining operations was primarily due to a decrease in compensation and bank fees of $2.8 million and $0.6 million, respectively. There were no other increases or decreases greater than $0.5 million.
Integration and Reorganization Costs. During the three months ended September 24, 2017 and September 25, 2016, we recorded integration and reorganization costs of $2.2 million and $5.2 million, respectively, primarily resulting from severance costs related to acquisition-related synergies and the continued consolidation of our operations resulting from ongoing implementation of our plans to reduce costs and preserve cash flow, including a voluntary severance offer in September 2016.
Loss on early extinguishment of debt.During the three months ended September 24, 2017, we recorded a loss of $4.8 million due to the early extinguishment of long-term debt. There were no such charges during the three months ended September 25, 2016.
Income Tax Expense (Benefit). During the three months ended September 24, 2017 and September 25, 2016, we recorded an income tax expense of $0.9 million and $0.5 million, respectively. The increase in income tax expense is primarily due to our tax provision being calculated based upon year-to-date results including a deferred tax provision for indefinite lived intangible assets in the three months ended September 24, 2017 when compared to calculating the tax provision using the projected full year effective tax rate for the three months ended September 25, 2016.
Net (Loss) Income. Net loss for the three months ended September 24, 2017 was $2.0 million and net income for the three months ended September 25, 2016 was $2.8 million. The difference is related to the factors noted above.
Nine Months Ended September 24, 2017 Compared To Nine Months Ended September 25, 2016
Revenue. Total revenue for the nine months ended September 24, 2017 increased by $25.8 million, or 2.8%, to $947.6 million from $921.8 million for the nine months ended September 25, 2016. The increase in total revenue was comprised of a $21.5 million, or 6.9%, increase in circulation revenue and a $24.4 million, or 22.9%, increase in commercial printing and other revenue, which was partially offset by a $20.1 million, or 4.0%, decrease in advertising revenue.
Advertising revenue declines were primarily driven by declines on the print side of our business in the local retail, classified, and preprint categories due to secular pressures and a continuing uncertain economic environment. These secular trends and economic conditions have also led to a decline in our print circulation volumes, which have been offset by price increases in select locations. The majority of the increase in commercial printing and other revenue is due to digital marketing services and events revenue.
Operating Costs. Operating costs for the nine months ended September 24, 2017 increased by $12.5 million, or 2.4%, to $532.5 million from $520.0 million for the nine months ended September 25, 2016. Operating costs include costs from acquisitions of $53.0 million, which was partially offset by a $40.5 million decrease in the costs related to the remaining operations. This decline in operating costs related to the remaining operations was primarily due to a decrease in compensation, hauling and delivery, newsprint and ink, outside services, postage, travel and entertainment expenses, supplies and professional and consulting fees of $22.5 million, $5.4 million, $4.9 million, $2.6 million, $2.1 million, $1.2 million, $1.1 million and $0.8 million, respectively.
Selling, General and Administrative.Selling, general and administrative expenses forof $24.8 million, mainly consisting of cost containment initiatives, offset by the nine months ended September 24, 2017 increasedabsence of the temporary reduction of expenses in the prior year, such as furloughs and wage reductions, a decrease in Integration and reorganization costs of $7.9 million, driven by $13.1a decrease in severance of $11.8 million, or 4.3%, to $319.3offset by an increase of $3.9 million from $306.2 million for the nine months ended September 25, 2016. The increase includes selling, generalin costs associated with systems implementation and administrative expenses from acquisitionsoutsourcing of $29.8 million, and increase in professional and consulting fees of $1.9 million, andcorporate functions. These decreases were offset by an increase in bad debt expenseOther operating expenses of $0.9$3.0 million, which was


partially offset by a $17.5 million decrease in the costs related to the remaining operations. This decline in selling, general and administrative expenses related to the remaining operations was primarily due to a decrease in compensation, outside services, travel and entertainment, bank and credit card$10.9 million of third-party fees advertising and promotions, telephone expenses, web hosting and domain expenses, business insurance and building rental and maintenance of $6.5 million, $3.1 million, $2.0 million, $1.4 million, $1.2 million, $1.1 million, $0.9 million, $0.6 million and $0.6 million, respectively. There were no other increases or decreases greater than $0.5 million.
Integration and Reorganization Costs. During the nine months ended September 24, 2017 and September 25, 2016, we recorded integration and reorganization costs of $6.8 million and $7.5 million, respectively, primarily resulting from severance costs related to acquisition-related synergies and the continued consolidation of our operations resulting from ongoing implementation of our plans to reduce costs and preserve cash flow, including a voluntary severance offer in September 2016.
Impairment of Long-lived Assets.During the nine months ended September 24, 2017, we recorded a $6.5 million impairment of long-lived assets due to 12 printing facilities ceasing operations during the nine months ended September 24, 2017. No such charge was recorded during the nine months ended September 25, 2016.
Goodwill and Mastheads Impairment.During the nine months ended September 24, 2017, we recorded a $27.4 million goodwill and mastheads impairment due to softening business conditions and the related impact on the fair value of our reporting units. No such charge was recorded during the nine months ended September 25, 2016.
Loss on early extinguishment of debt.During the nine months ended September 24, 2017, we recorded a loss of $4.8 million due to the early extinguishment of long-term debt. There were no such charges during the nine months ended September 25, 2016.
Income Tax Expense (Benefit). During the nine months ended September 24, 2017 and September 25, 2016, we recorded an income tax expense of $2.6 million and an income tax benefit of $4.7 million, respectively. The increase in income tax expense is primarily due to our tax provision being calculated based upon year-to-date results, including a deferred tax provision for indefinite lived intangible assets during the nine months ended September 24, 2017, and the discrete income tax benefit recognized during the nine months ended September 25, 2016 attributable to the release of a portion of the valuation allowance as deferred tax assets were utilized to offset deferred tax liabilities of two acquired entities.
Net (Loss) Income. Net loss for the nine months ended September 24, 2017 was $27.3 million and net income for the nine months ended September 25, 2016 was $17.1 million. The difference is related to the factors noted above.5-Year Term Loan expensed during the six months ended June 30, 2021 compared to $8.3 million of Acquisition costs incurred during the six months ended June 30, 2020.
Liquidity and Capital Resources
LIQUIDITY AND CAPITAL RESOURCES

Our primary cash requirements are for working capital, debt obligations, and capital expenditures. We have no material outstanding commitments for capital expenditures. We expect our 2017 capital expenditures to total between $11 million and $13 million. The 2017 capital expenditures will be primarily comprised of projects related to the consolidation of print operations and system upgrades. For more information on our long term debt and debt service obligations, see Note 6 to the unaudited condensed consolidated financial statements, “Indebtedness”. Our principal sources of funds have historically been, and are expected to continue to be, cash provided by operating activities.
As a holding company, we have no operations of our own and accordingly we have no independent means of generating revenue, and our internal sources of funds to meet our cash needs, including payment of expenses, are dividends and other permitted payments from our subsidiaries.
We expect to fund our operations through cash provided by our subsidiaries’ operating activities, the incurrence of debt or the issuance of additional equity securities.activities. We expect that we will have adequate capital resources and liquidity to meet our ongoing working capital needs, borrowing obligations, and all required capital expenditures.

Details of our cash flows are included in the table below:
Six months ended June 30,
In thousands20212020
Net cash provided by operating activities$92,587 $24,640 
Net cash provided by (used for) investing activities7,185 (3,026)
Net cash used for financing activities(120,979)(20,331)
Effect of currency exchange rate change on cash625 (780)
(Decrease) increase in cash, cash equivalents and restricted cash$(20,582)$503 

Cash flows provided by operating activities: Our largest source of cash provided by our operations is Advertising revenues primarily generated from Local and national advertising and marketing services revenues (retail, classified, and 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.

Our net cash flow provided by operating activities was $92.6 million for the six months ended June 30, 2021, compared to net cash provided by operating activities of $24.6 million for the six months ended June 30, 2020. The increase in net cash flow provided by operating activities was primarily due to a decrease in interest paid on debt of $75.4 million, a decrease in severance payments of $22.1 million, $16.4 million in PPP funding received in support of certain of our locations that were meaningfully affected by the COVID-19 pandemic and an increase in tax refunds of $7.0 million. These increases were partially offset by a decrease in working capital of $30.0 million due to the overall timing of payments, including accrued compensation and accounts receivable collections, and an increase in contributions to our pension and other postretirement benefit plans of $16.8 million.

Cash flows provided by (used for) investing activities: Cash flows provided by investing activities totaled $7.2 million for the six months ended June 30, 2021 compared to $3.0 million used for investing activities in the six months ended June 30, 2020. This increase was primarily due to a decrease in purchases of property, plant and equipment of $6.3 million and an increase in proceeds from the sale of real estate and other assets of $5.5 million.

Cash flows used for financing activities: Cash flows used for financing activities totaled $121.0 million for the six months ended June 30, 2021 compared to $20.3 million for the six months ended June 30, 2020. This increase was primarily due to an increase in net repayments under term loans of $65.6 million and payments of debt issuance costs of $33.9 million.

Senior Secured 5-Year Term Loan

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On February 9, 2021, we entered into a five-year, senior-secured term loan facility with the lenders from time to time party thereto and Citibank, N.A., as collateral agent and administrative agent for the lenders, in an aggregate principal amount of $1.045 billion (the "5-Year Term Loan"). The 5-Year Term Loan matures on February 9, 2026 and, at the Company's option, bears interest at the rate of the London Interbank Offered Rate plus a margin equal to 7.00% per annum or an alternate base rate plus a margin equal to 6.00% per annum. Accordingly, we are required to dedicate a substantial portion of cash flow from operations to fund interest payments. Interest on the 5-Year Term Loan is payable every three months in arrears, beginning in May 2021.

The proceeds from the 5-Year Term Loan were used to repay the remaining principal balance and accrued interest of $1.043 billion and $13.3 million, respectively, on the Acquisition Term Loan (the "Payoff") and to pay fees and expenses incurred to obtain the 5-Year Term Loan.

There were certain lenders that participated in both the Acquisition Term Loan and the new 5-Year Term Loan and their balances in the Acquisition Term Loan were deemed to be modified. The Company will continue to defer, over the new term, the deferred financing fees and original issue discount from the Acquisition Term Loan of $1.5 million and $34.7 million, respectively, related to those lenders. Further, certain lenders in the Acquisition Term Loan did not participate in the new 5-Year Term Loan and their balances in the Acquisition Term Loan were deemed to be extinguished. As a result, the Company recognized a Loss on early extinguishment of debt of $17.2 million as a result of the write-off of the remaining original issue discount and deferred financing fees related to those lenders. Third party fees of approximately $13.0 million were allocated to the new lenders in the 5-Year Term Loan on a pro-rata basis, and $20.9 million of original issue discount were capitalized and will be amortized over the term of the 5-Year Term Loan using the effective interest method. Third party fees of $0.7 million and $10.9 million, which were allocated to the lenders whose balances were deemed to be modified, were expensed and recorded in Other operating expenses in the condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2021, respectively.

The 5-Year Term Loan will amortize in equal quarterly installments at a rate of 10% per annum (or, if the ratio of Total Indebtedness secured on an equal priority basis with the 5-Year Term Loan (net of Unrestricted Cash) to Consolidated EBITDA (as such terms are defined in the 5-Year Term Loan) is equal to or less than a specified ratio, 5% per annum) (the "Quarterly Amortization Installment"), beginning September 30, 2021. In addition, we will be required to repay the 5-Year 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 5-Year Term Loan and (iii) the aggregate amount of cash and cash equivalents on hand in excess of $100 million at the end of each fiscal year. The 5-Year Term Loan is subject to a requirement to have minimum unrestricted cash of $30 million as of the last day of each fiscal quarter. As of June 30, 2021, we were in compliance with all of the covenants and obligations under the 5-Year Term Loan.

As of June 30, 2021, we had $990.5 million in aggregate principal outstanding under the 5-Year Term Loan with an effective interest rate of 9.5%.

Under the 5-Year Term Loan, the Company is contractually obligated to make prepayments with the proceeds from asset sales and may elect to make optional payments with excess free cash flow from operations. For the three and six months ended June 30, 2021, we made prepayments totaling $45.8 million and $54.5 million, respectively, which were classified as financing activities in the condensed consolidated statements of cash flows. These amounts are inclusive of both mandatory and optional prepayments.

Senior Secured Convertible Notes due 2027

On November 17, 2020, the Company entered into an Exchange Agreement with certain of the lenders (the "Exchanging Lenders") under the Acquisition Term Loan pursuant to which the Company and the Exchanging Lenders agreed to exchange $497.1 million in aggregate principal amount of the Company’s newly issued 6.0% Senior Secured Convertible Notes due 2027 (the "2027 Notes") for the retirement of an equal amount of term loans under the Acquisition Term Loan (the "Exchange"). The 2027 Notes were issued pursuant to an Indenture (the "Indenture") dated as of November 17, 2020, between the Company and U.S. Bank National Association, as trustee. The Indenture, as supplemented by the Second Supplemental Indenture, includes affirmative and negative covenants that are substantially consistent with the 5-Year Term Loan, as well as customary events of default.

In connection with the Exchange, the Company entered into an 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.

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

The conversion rate is subject to customary adjustment provisions as provided in the 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% of the Common Stock after giving effect to such issuance or sale assuming the initial principal amount of the 2027 Notes remains outstanding.

Upon the occurrence of a "Make-Whole Fundamental Change" (as defined in the 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 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 5-Year Term Loan.

Under the 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 Indenture) does not exceed a specified ratio. In addition, the Indenture provides that, at any time that the Company’s Total Gross Leverage Ratio (as defined in the 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 LLC and any subsidiaries of the Company (collectively, the "Guarantors") that guarantee the 5-Year Term Loan. The Notes are secured by the same collateral securing the 5-Year 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 securing the indebtedness incurred in connection with the 5-Year Term Loan.

For the six months ended June 30, 2021, no shares were issued upon conversion, exercise, or satisfaction of the required conditions. Refer to Note 10 — Supplemental equity information to the condensed consolidated financial statements for details on the convertible debt's impact to diluted earnings per share under the if-converted method.

Senior Convertible Notes due 2024

The $3.3 million principal value of the remaining 4.75% convertible senior notes due 2024 (the "2024 Notes") outstanding is reported as convertible debt in the condensed consolidated balance sheets. The effective interest rate on the 2024 Notes was 6.05% as of June 30, 2021.

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 containment initiatives. The Company does not presently pay a quarterly dividend and has no current intention to reinstate the dividend. In addition, the terms of our indebtedness, including our credit facility, the 5-Year Term Loan, and the Indenture for the 2027 Notes have terms that restrict our ability to pay dividends.

The CARES Act, enacted March 27, 2020, provided various forms of relief to companies impacted by the COVID-19 pandemic. As part of the relief available under the CARES Act, we deferred remittance of our 2020 Federal Insurance Contributions Act taxes as allowed by the legislation. The Company was able to defer $41.6 million of the employer portion of FICA taxes for payroll paid between March 27, 2020 and December 31, 2020. The Company will have until December 31, 2021, to pay 50% of the FICA deferral with the remaining 50% to be remitted on or before December 31, 2022.
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For the Gannett Retirement Plan in the U.S., we have deferred our contractual contribution and negotiated a contribution payment plan of $5.0 million per quarter through September 30, 2022.

We expect our capital expenditures for at least the next twelve months.remainder of 2021 to total approximately $24.1 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 on-goingongoing 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 developments or adverse developments in our business, could make it difficult for us to meet the financial and operating covenants contained in our credit facilities.5-Year Term Loan. In addition, our leverage may limit cash flow available for general corporate purposes such as capital expenditures and our flexibility to react to competitive, technological, and other changes in our industry and economic conditions generally.



Dividends
On October 26, 2017,Although we announcedcurrently forecast sufficient liquidity, a third quarter 2017 cash dividend of $0.37 per share of Common Stock, par value $0.01 per share, of New Media. The dividend will be paid on November 16, 2017, to shareholders of record asresurgence of the close of businessCOVID-19 pandemic and related counter-measures could have a material negative impact on November 8, 2017.
On July 27, 2017, we announced a second quarter 2017 cash dividend of $0.35 per share of Common Stock, par value $0.01 per share, of New Media. The dividend was paid on August 17, 2017,our liquidity and our ability to shareholders of record as of the close of business on August 9, 2017.
On April 27, 2017, we announced a first quarter 2017 cash dividend of $0.35 per share of Common Stock, par value $0.01 per share, of New Media. The dividend was paid on May 18, 2017, to shareholders of record as of the close of business on May 10, 2017.
On February 21, 2017, we announced a fourth quarter 2016 cash dividend of $0.35 per share of Common Stock, par value $0.01 per share, of New Media. The dividend was paid on March 16, 2017, to shareholders of record as of the close of business on March 8, 2017.
On October 27, 2016, we announced a third quarter 2016 cash dividend of $0.35 per share of Common Stock, par value $0.01 per share, of New Media. The dividend was paid on November 17, 2016, to shareholders of record as of the close of business on November 9, 2016.
On July 28, 2016, we announced a second quarter 2016 cash dividend of $0.33 per share of Common Stock, par value $0.01 per share, of New Media. The dividend was paid on August 18, 2016, to shareholders of record as of the close of business on August 10, 2016.
On April 28, 2016, we announced a first quarter 2016 cash dividend of $0.33 per share of Common Stock, par value $0.01 per share, of New Media. The dividend was paid on May 19, 2016, to shareholders of record as of the close of business on May 11, 2016.
On February 25, 2016, we announced a fourth quarter 2015 cash dividend of $0.33 per share of Common Stock, par value $0.01 per share, of New Media. The dividend was paid on March 17, 2016, to shareholders of record as of the close of business on March 9, 2016.
New Media Credit Agreement
On June 4, 2014, New Media Holdings II LLC (the “New Media Borrower”), a wholly owned subsidiary of New Media, entered into a credit agreement (the “New Media Credit Agreement”) among the New Media Borrower, New Media Holdings I LLC (“Holdings I”), the lenders party thereto, RBS Citizens, N.A. and Credit Suisse Securities (USA) LLC as joint lead arrangers and joint bookrunners, Credit Suisse AG, Cayman Islands Branch as syndication agent and Citizens Bank of Pennsylvania as administration agent which provided for (i) a $200 million senior secured term facility (the “Term Loan Facility” and any loan thereunder,meet our ongoing obligations, including as part of the Incremental Facility, “Term Loans”), (ii) a $25 million senior secured revolving credit facility, with a $5 million sub-facility for letters of credit and a $5 million sub-facility for swing loans, (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Senior Secured Credit Facilities”) and (iii) the ability for the New Media Borrower to request one or more new commitments for term loans or revolving loans from time to time up to an aggregate total of $75 million (the “Incremental Facility”) subject to certain conditions. On June 4, 2014, the New Media Borrower borrowed $200 million under the Term Loan Facility (the “Initial Term Loans”). As of June 26, 2016, $0 was drawn under the Revolving Credit Facility. The Term Loans mature on July 14, 2022 and the maturity date for the Revolving Credit Facility is July 14, 2021. The New Media Credit Agreement was amended;
•on September 3, 2014, to provide for additional term loans under the Incremental Facility in an aggregate principal amount of $25 million (the “2014 Incremental Term Loan”);
•on November 20, 2014, to increase the amount of the Incremental Facility that may be requested after the date of the amendment from $75 million to $225 million;
•on January 9, 2015, to provide for $102 million in additional term loans (the “2015 Incremental Term Loan”) and $50 million in additional revolving commitments (the “2015 Incremental Revolver”) under the Incremental Facility and to make certain amendments to the Revolving Credit Facility in connection with the purchase of the assets of Halifax Media;
•on February 13, 2015, to provide for the replacement of the existing term loans under the Term Loan Facility (including the 2014 Incremental Term Loan and the 2015 Incremental Term Loan) with a new class of replacement term loans;


•on March 6, 2015, to provide for $15 million in additional revolving commitments under the Incremental Facility;
•on May 29, 2015, to provide for $25 million in additional term loans under the Incremental Facility; and
•on July 14, 2017, to (i) extend the maturity date of the outstanding term loans under the Term Loan Facility to July 14, 2022, (ii) provide for a 1.00% prepayment premium for any prepayments made in connection with certain repricing transactions effected within six months of the date of the amendment, (iii) extend the maturity date of the Revolving Credit Facility to July 14, 2021, (iv) provide for $20 million in additional term loans (the “2017 Incremental Term Loan”) under the Incremental Facility and (v) increase the amount of the Incremental Facility that may be requested on or after the date of the amendment (inclusive of the 2017 Incremental Term Loan) to $100 million.
In connection with the July 14, 2017 amendment, we incurred approximately $6.6 million of fees and expenses. There was one lender who had a significant change in the terms of the Term Loan Facility; the difference between the present value of the cash flows after this amendment and the present value of the cash flows before this amendment was more than 10%.  This portion of the transaction was accounted for as an extinguishment under ASC Subtopic 470-50, “Debt Modifications and Extinguishments”. Deferred fees and expenses of $1.0 million previously allocated to that lender were written off to loss on early extinguishment of debt.  Additionally, the current fees of $2.4 million attributed to this lender were expensed to loss on early extinguishment of debt.  The third party expenses of $0.1 million apportioned to the lender were capitalized.  In addition, $1.3 million fees and expenses allocated to lenders that exited the facility were written off to loss on early extinguishment of debt.  The remainder of this amendment was treated as a debt modification for accounting purposes.  The consent fees of $3.0 million for the lenders other than the one mentioned above were capitalized and will be amortized over the term of the Term Loan Facility.  The third party fees of $0.6 million related to these lenders were expensed. Additionally, the fees and expenses allocated to the Revolving Credit Facility of $0.4 million were capitalized as this component of the amendment was accounted for as a debt modification.
The New Media Credit Agreement contains customary representations and warranties and affirmative covenants and negative covenants applicable to Holdings I, the New Media Borrower and the New Media Borrower’s subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, fundamental changes, dispositions, and dividends and other distributions, and events of default. The New Media Credit Agreement contains a financial covenant that requires Holdings I, the New Media Borrower and the New Media Borrower’s subsidiaries to maintain a maximum total leverage ratio of 3.25 to 1.00.
As of September 24, 2017, we are in compliance with all of the covenants and obligations under the New Media Credit Agreement.5-Year Term Loan. The Company continues to closely monitor the COVID-19 pandemic and will continue to take the steps necessary to appropriately manage liquidity.
Refer to Note 6 to the unaudited condensed consolidated financial statements, “Indebtedness,” and to “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources,” in
CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES

See our most recent Annual Report on Form 10-K for the fiscal year ended December 25, 2016,31, 2020 for further discussion of the New Media Credit Agreement.
Advantage Credit Agreements
In connection with the purchase of the assets of Halifax Media, which closed on January 9, 2015, certain subsidiaries of the Company (the “Advantage Borrowers”) agreed to assume all of the obligations of Halifax Media and its affiliates in respect of each of (i) that certain Consolidated Amended and Restated Credit Agreement dated January 6, 2012 among Halifax Media Acquisition LLC, Advantage Capital Community Development Fund XXVIII, L.L.C., and Florida Community Development Fund II, L.L.C. (as amended, the “Halifax Florida Credit Agreement”) and (ii) that certain Credit Agreement dated June 18, 2013 between Halifax Alabama, LLC and Southeast Community Development Fund V, L.L.C. (the “Halifax Alabama Credit Agreement” and, together with the Halifax Florida Credit Agreement, the “Advantage Credit Agreements”), respectively (the debt under the Halifax Florida Credit Agreement, the “Advantage Florida Debt”; and the debt under the Halifax Alabama Credit Agreement, the “Advantage Alabama Debt”).
The Halifax Alabama Credit Agreement is in the principal amount of $8 million and bears interest at the rate of LIBOR plus 6.25% per annum (with a minimum of 1% LIBOR) payable quarterly in arrears, maturing on March 31, 2019. The Advantage Alabama Debt is secured by a perfected second priority security interest in all the assets of the Advantage Borrowers and certain other subsidiaries of the Company, subject to the limitation that the maximum amount of secured obligations is $15 million. The Advantage Alabama Debt is unconditionally guaranteed by Holdings I and certain subsidiaries of the New Media Borrowers and is required to be guaranteed by all future material wholly-owned domestic subsidiaries, subject to certain exceptions. The Advantage Alabama Debt is subordinated to the New Media Credit Agreement pursuant to an intercreditor


agreement. The Halifax Florida Credit Agreement was in the principal amount of $10 million, bore interest at the rate of 5.25% per annum, payable quarterly in arrears, and matured on December 31, 2016. On December 30, 2016, we paid the outstanding balance under the Advantage Florida Debt in the amount of $10 million with cash on hand.
The Halifax Alabama Credit Agreement contains covenants substantially consistent with those contained in the New Media Credit Agreement in addition to those required for compliance with the New Markets Tax Credit program. The Advantage Borrowers are permitted to make voluntary prepayments at any time without premium or penalty and are subject to customary mandatory prepayment events including from proceeds from asset sales and certain debt obligations.
The Halifax Alabama Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Advantage Borrowers and certain of the Company subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, fundamental changes, dispositions, and dividends and other distributions. The Halifax Alabama Credit Agreement contains a financial covenant that requires Holdings I, the New Media Borrower and the New Media Borrower’s subsidiaries to maintain a maximum total leverage ratio of 3.75 to 1.00. The Halifax Alabama Credit Agreement contains customary events of default.
As of September 24, 2017, we are in compliance with all of the covenants and obligations under the Halifax Alabama Credit Agreement.
Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources,” in our Annual Report on Form 10-K for the fiscal year ended December 25, 2016, for further discussion of the Advantage Credit Agreements.
Cash Flows
The following table summarizes our historical cash flows.
 Nine months ended September 24, 2017 Nine months ended September 25, 2016
Cash provided by operating activities$80,768
 $67,312
Cash used in investing activities(34,237) (112,209)
Cash used in financing activities(58,236) (47,221)
The discussion of our cash flows that follows is based on our historical cash flows for the nine months ended September 24, 2017critical accounting policies and September 25, 2016.
Cash Flows from Operating Activities. Net cash provided by operating activities for the nine months ended September 24, 2017 was $80.8 million, an increaseuse of $13.5 million when compared to $67.3 million of cash provided by operating activities for the nine months ended September 25, 2016. This $13.5 million increase was the result of an increase in adjustments for non-cash charges of $42.7 million and an increase in cash provided by working capital of $15.3 million, which was partially offset by a decrease in operating results of $44.5 million.
The $15.3 million increase in cash provided by working capital for the nine months ended September 24, 2017 when compared to the nine months ended September 25, 2016, is primarily attributable to an increase in accrued expenses and accounts payable, which was partially offset by an increase in accounts receivable.
The $42.7 million increase in adjustments to net income for non-cash charges when compared to the nine months ended September 25, 2016, primarily consisted of a $27.4 million goodwill and mastheads impairment, a $7.0 million increase in deferred income taxes, a $6.5 million increase in impairment of long-lived assets, a $4.3 million increase in depreciation and amortization, a non-cash loss on early extinguishment of debt of $2.3 million, a $0.5 million increase in non-cash compensation expense, and a $0.2 million increase in non-cash charge to investments, which was partially offset by a $5.2 million increase in gain on sale or disposal of assets and a $0.4 million decrease in non-cash interest expense.
Cash Flows from Investing Activities. Net cash used in investing activities for the nine months ended September 24, 2017 was $34.2 million. During the nine months ended September 24, 2017, we used $41.7 million, net of cash acquired, for acquisitions and $7.2 million for capital expenditures, which was partially offset by $14.7 million we received from the sale of publications and other assets.


Net cash used in investing activities for the nine months ended September 25, 2016 was $112.2 million. During the nine months ended September 25, 2016, we used $107.7 million, net of cash acquired, for acquisitions and $7.7 million for capital expenditures, which was partially offset by $3.2 million we received from the sale of publications and other assets.
Cash Flows from Financing Activities. Net cash used in financing activities for the nine months ended September 24, 2017 was $58.2 million primarily due to the payment of dividends of $56.0 million, repayments under term loans of $12.6 million, $5.0 million in repurchases of common stock under the Share Repurchase Program, payment of debt issuance costs of $3.5 million, a $0.7 million purchase of treasury stock, and $0.4 million payment of offering costs, which was partially offset by borrowings under term loans of $20.0 million.
Net cash used in financing activities for the nine months ended September 25, 2016 was $47.2 million primarily due to the payment of dividends of $44.2 million, repayments under term loans of $2.6 million, and a $0.4 million purchase of treasury stock.
Changes in Financial Position
The discussion that follows highlights significant changes in our financial position and working capital from December 25, 2016 to September 24, 2017.
Accounts Receivable. Accounts receivable decreased $10.5 million from December 25, 2016 to September 24, 2017, which primarily relates to seasonality and the timing of cash collections, which was partially offset by $5.7 million of assets acquired in the nine month period ending September 24, 2017.
Prepaid Expenses. Prepaid expenses increased $3.0 million from December 25, 2016 to September 24, 2017, which primarily relates to the timing of payments.
Property, Plant, and Equipment. Property, plant, and equipment decreased $14.6 million from December 25, 2016 to September 24, 2017, of which $37.7 million relates to depreciation, $11.3 million relates to assets sold or disposed of during the first nine months of 2017 and $6.4 million relates to an impairment of long-lived assets, which was partially offset by $33.6 million of assets acquired in 2017 and $7.2 million of capital expenditures.
Goodwill. Goodwill decreased $25.6 million from December 25, 2016 to September 24, 2017, which is primarily due to a $25.6 million goodwill impairment and $2.8 million relates to assets sold, which was partially offset by $2.9 million of assets acquired in 2017.
Intangible Assets. Intangible assets decreased $14.0 million from December 25, 2016 to September 24, 2017, of which $16.9 million relates to amortization and $1.8 million relates to a mastheads impairment, which was partially offset by $4.7 million of assets acquired in 2017.
Current Portion of Long-term Debt. Current portion of long-term debt decreased $9.9 million from December 25, 2016 to September 24, 2017, due to $10.0 million repayment of debt that was assumed in the Halifax Media acquisition in 2015, which was partially offset by the increase in the current portion of long-term debt of $0.1 million related to the July 14, 2017 amendment to the New Media Credit Agreement.
Accounts Payable. Accounts payable increased $5.8 million from December 25, 2016 to September 24, 2017, which relates primarily to the timing of vendor payments.
Accrued Expenses. Accrued expenses decreased $2.1 million from December 25, 2016 to September 24, 2017, which primarily relates to a decrease in the accrual for all management agreement related fees of $7.4 million, which was partially offset by a $3.4 increase in accrued payroll and a $1.9 million increase in accrued taxes.
Deferred Revenue. Deferred revenue increased $2.4 million from December 25, 2016 to September 24, 2017, primarily due to acquisitions in 2017 and normal operations, which was partially offset by deferred revenue transferred in the sale of a business in 2017.
Long-term Debt. Long-term debt increased $17.7 million from December 25, 2016 to September 24, 2017, primarily due to borrowings under term loans of $20.0 million, a $2.3 million loss on early extinguishment of debt and $1.7 million non-cash


interest expense, which was partially offset by the payment of debt issuance costs of $3.5 million, and a $2.6 million repayment of term loans.
Deferred Income Taxes. Deferred income taxes increased $2.0 million from December 25, 2016 to September 24, 2017, which primarily relates to an increase in the deferred tax liability for indefinite-lived intangible assets.
Additional Paid-In Capital. Additional paid-in capital decreased $40.5 million from December 25, 2016 to September 24, 2017, due to dividends of $37.9 million and $5.0 million in repurchases of common stock under the Share Repurchase Program, which was partially offset by non-cash compensation expense of $2.4 million.
(Accumulated Deficit) Retained Earnings. Accumulated deficit increased $45.5 million from December 25, 2016 to September 24, 2017, due to a net loss of $27.3 million and dividends of $18.2 million.
Summary Disclosure About Contractual Obligations and Commercial Commitments
estimates. There have been no significantmaterial changes to our contractual obligations previously reportedcritical accounting policies and use of estimates discussed in our Annual Report on Form 10-K for the year ended December 25, 2016.such report.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements reasonably likely to have a current or future effect on our financial statements.
Contractual CommitmentsNON-GAAP FINANCIAL MEASURES
There were no material changes made to our contractual commitments during the period from December 25, 2016 to September 24, 2017.
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 adjustedexcluded or included in the most comparable U.S. GAAP measure. We define and use Adjusted EBITDA, a non-GAAP financial measure, as set forth below.

Adjusted EBITDA,
Adjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett 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 follows:
IncomeNet income (loss) from continuing operations attributable to Gannett before:
income (1) Income tax expense (benefit);, (2) Interest expense, (3) Gains or losses on the early extinguishment of debt, (4) Non-operating pension income (expense), (5) Loss on Convertible notes derivative, (6) Other non-operating items, including equity income, (7) Depreciation and amortization, (8) Integration and reorganization costs, (9) Asset impairments, (10) Goodwill and intangible impairments, (11) Gains or losses on the sale or disposal of assets, (12) Share-based compensation, (13) Other operating expenses, including third-party debt expenses and acquisition costs, (14) Gains or losses on the sale of investments and (15) certain other non-recurring charges. We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Operating revenues. We define Adjusted Net income (loss) attributable to Gannett before (1) Gains or losses on the early extinguishment of debt, (2) Loss on Convertible notes derivative, (3) Integration and reorganization costs, (4) Other operating expenses, including third-party debt expenses and acquisition costs, (5) Asset impairments, (6) Goodwill and intangibles impairments, (7) Gains or losses on the sale or disposal of assets, and (8) the tax impact of the above items.
interest/financing expense;
depreciation and amortization; and
non-cash impairments.
Management’s Useuse of Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett

Adjusted EBITDA, isAdjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett are not a measurementmeasurements of financial performance under GAAP and should not be considered in isolation or as an alternative to income from operations, net income (loss), cash flow from continuing operating activities or any other measure of performance or liquidity derived in accordance with U.S. GAAP. We believe thisthese non-GAAP measure,financial measures, as we have defined it, isthem, 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. This measure providesThese measures provide an assessment of controllable expenses and affords management the ability to make decisions which are expected to facilitate meeting current financial goals as well as to achieve optimal financial performance.



Adjusted EBITDA, providesAdjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett provide us with a measuremeasures of financial performance, independent of items that are beyond the control of management in the short-term, such as
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depreciation and amortization, taxation, non-cash impairments, and interest expense associated with our capital structure. This metric measuresThese metrics measure our financial performance based on operational factors that management can impact in the short-term, namely the cost structure or expenses of the organization. Adjusted EBITDA, is one of theAdjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett are metrics we use to review the financial performance of our business on a monthly basis.
Limitations of Adjusted EBITDA
Adjusted EBITDA has limitations as an analytical tool. It should not be viewed in isolation or as a substitute for GAAP measures of earnings or cash flows. Material limitations in making the adjustments to our earnings to calculate Adjusted EBITDA and using this non-GAAP financial measure as compared to GAAP net income (loss), include: the cash portion of interest/financing expense, income tax (benefit) provision and charges related to impairment of long-lived assets, which may significantly affect our financial results.
A reader of our financial statements may find this item important in evaluating our performance, results of operations and financial position. We use non-GAAP financial measures to supplement our GAAP results in order to provide a more complete understanding of the factors and trends affecting our business.
Adjusted EBITDA is not an alternative to net income, income from operations or cash flows provided by or used in operations as calculated and presented in accordance with GAAP. Readers of our financial statements should not rely on Adjusted EBITDA as a substitute for any such GAAP financial measure. We strongly urge readers of our financial statements to review the reconciliation of income (loss) from continuing operations to Adjusted EBITDA, along with our consolidated financial statements included elsewhere in this report. We also strongly urge readers of our financial statements to not rely on any single financial measure to evaluate our business. In addition, because Adjusted EBITDA is not a measure of financial performance under GAAP and is susceptible to varying calculations, the Adjusted EBITDA measure, as presented in this report, may differ from and may not be comparable to similarly titled measures used by other companies.
We use Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett as a measuremeasures 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. We consider

Limitations of Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett

Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett have limitations as an analytical tool. 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 unrealized (gain) loss on derivative instrumentsadjustments to our earnings to calculate Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett and using these non-GAAP financial measures as compared to U.S. GAAP net income (loss) include: the (gain) loss on early extinguishmentcash portion of debt to be interest/financing related costs associated with interest expense, or amortization of financing fees. Accordingly, we exclude financing related costs such as the early extinguishment of debt because they represent the write-off of deferred financing costsincome tax (benefit) provision, and we believe these non-cash write-offs are similar to interest expense and amortization of financing fees, which by definition are excluded from Adjusted EBITDA. Additionally, the non-cash gains (losses) on derivative contracts, which are related to interest rate swap agreements to manage interest rate risk, are financing costs associated with interest expense. Such charges are incidental to, but not reflective of, our day-to-day operating performance and it is appropriate to exclude charges related to financing activities such as the early extinguishmentasset impairments, which may significantly affect our financial results.

Management believes these items are important in evaluating our performance, results of debtoperations, and the unrealized (gain) loss on derivative instruments which, depending on the naturefinancial position. We use non-GAAP financial measures to supplement our U.S. GAAP results in order to provide a more complete understanding of the financing arrangement, would have otherwise been amortized overfactors and trends affecting our business.

Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett are not alternatives to net income and margin as calculated and presented in accordance with U.S. GAAP. As such, they should not be considered or relied upon as a substitute or alternative for any such U.S. GAAP financial measures. We strongly urge you to review the periodreconciliation of Net income (loss) attributable to Gannett to Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett along with our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. We also strongly urge you to not rely on any single financial measure to evaluate our business. In addition, because Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett are not measures of financial performance under U.S. GAAP and are susceptible to varying calculations, the related agreementAdjusted EBITDA, Adjusted EBITDA margin, and doesAdjusted Net income (loss) attributable to Gannett measures as presented in this report may differ from and may not require a current cash settlement. Such charges are incidentalbe comparable to but not reflectivesimilarly titled measures used by other companies.

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Table of our day-to-day operating performance of the business that management can impact in the short term.Contents


The table below shows the reconciliation of netNet income (loss) incomeattributable to Gannett to Adjusted EBITDA forand Net income (loss) attributable to Gannett margin to Adjusted EBITDA margin:
Three months ended June 30,Six months ended June 30,
In thousands2021202020212020
Net income (loss) attributable to Gannett$15,115 $(436,893)$(127,201)$(517,045)
Provision (benefit) for income taxes17,692 (34,276)8,583 (25,297)
Interest expense35,264 57,928 74,767 115,827 
Loss on early extinguishment of debt2,834 369 22,235 1,174 
Non-operating pension income(23,906)(17,553)(47,784)(36,099)
Loss on Convertible notes derivative— — 126,600 — 
Other non-operating income, net(1,148)(6,261)(3,023)(4,616)
Depreciation and amortization48,242 66,327 106,345 144,352 
Integration and reorganization costs8,444 32,306 21,848 60,560 
Other operating expenses774 2,379 11,350 8,348 
Asset impairments— 6,859 833 6,859 
Goodwill and intangible impairments— 393,446 — 393,446 
Net loss on sale or disposal of assets5,294 88 10,039 745 
Share-based compensation expense5,779 7,391 9,202 18,968 
Other items1,385 5,908 2,440 9,862 
Adjusted EBITDA (non-GAAP basis)$115,769 $78,018 $216,234 $177,084 
Net income (loss) attributable to Gannett margin1.9 %(57.0)%(8.0)%(30.1)%
Adjusted EBITDA margin (non-GAAP basis)14.4 %10.2 %13.7 %10.3 %

The table below shows the periods presented:reconciliation of Net income (loss) attributable to Gannett to Adjusted Net income (loss) attributable to Gannett:
Three months ended June 30,Six months ended June 30,
In thousands2021202020212020
Net income (loss) attributable to Gannett$15,115 $(436,893)$(127,201)$(517,045)
Loss on early extinguishment of debt2,834 369 22,235 1,174 
Loss on Convertible notes derivative— — 126,600 — 
Integration and reorganization costs8,444 32,306 21,848 60,560 
Other operating expenses774 2,379 11,350 8,348 
Asset impairments— 6,859 833 6,859 
Goodwill and intangible impairments— 393,446 — 393,446 
Net loss on sale or disposal of assets5,294 88 10,039 745 
Subtotal32,461 (1,446)65,704 (45,913)
Tax impact of above items(2,403)(3,734)(21,009)(35,915)
Adjusted Net income (loss) attributable to Gannett (non-GAAP basis)$30,058 $(5,180)$44,695 $(81,828)
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Three months ended September 24, 2017 Three months ended September 25, 2016 Nine months ended September 24, 2017 Nine months ended September 25, 2016 
 (in thousands) 
Net (loss) income$(1,971) $2,795
 $(27,343) $17,145
 
Income tax expense (benefit)934
 504
 2,557
 (4,695)  
Interest expense7,848
 7,391
 22,283
 22,269
  
Impairment of long-lived assets—
 —
 6,485
 —
 
Loss on early extinguishment of debt4,767
 —
 4,767
 —
 
Goodwill and mastheads impairment—
 —
 27,448
 —
 
Depreciation and amortization18,257
 17,014
 54,621
 50,364
  
Adjusted EBITDA from continuing operations$29,835
(a)  
$27,704
(b)  
$90,818
(c)  
$85,083
(d)  

(a)Adjusted EBITDA for the three months ended September 24, 2017 included net expenses of $7,289, related to transaction and project costs, non-cash compensation, and other expense of $4,393, integration and reorganization costs of $2,210 and a $686 loss on the sale or disposal of assets.
(b)Adjusted EBITDA for the three months ended September 25, 2016 included net expenses of $9,289, related to transaction and project costs, non-cash compensation, and other expense of $3,118, integration and reorganization costs of $5,197 and a $974 loss on the sale or disposal of assets.
(c)Adjusted EBITDA for the nine months ended September 24, 2017 included net expenses of $16,273, related to transaction and project costs, non-cash compensation, and other expense of $11,316, integration and reorganization costs of $6,817 and a $1,860 gain on the sale or disposal of assets.
(d)Adjusted EBITDA for the nine months ended September 25, 2016 included net expenses of $21,088, related to transaction and project costs, non-cash compensation, and other expense of $10,231, integration and reorganization costs of $7,532 and a $3,325 loss on the sale or disposal of assets.

Item 3.Quantitative and Qualitative Disclosures About Market Risk
During the nine month period ended September 24, 2017, there wereThere have been no material changes to the quantitative and qualitative disclosures about market risk that were presented in Item 7A of our Annual Report on Form 10-K for the year ended December 25, 2016.

Item 4.Controls and Procedures
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), has evaluated the effectiveness of our disclosure controls and procedures (as is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934, as amended), as of the end ofduring the period covered by this Quarterly Report on Form 10-Q. 10-Q to the information disclosed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risks of our Form 10-K for the fiscal year ended December 31, 2020.

ITEM 4. CONTROLS AND PROCEDURES

Based on suchtheir evaluation, our Chief Executive Officerprincipal executive officer and Chief Financial Officerprincipal financial officer have concluded that as of such date, our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) were effective.not effective because of the previously reported material weakness in internal control over financial reporting, which we describe in Part II, Item 9A, Controls and Procedures of our Form 10-K for the fiscal year ended December 31, 2020.
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Remediation of Material Weakness

We continue to implement our remediation plan for the previously reported material weakness in internal control over financial reporting, described in Part II, Item 9A of our Form 10-K for the fiscal year ended December 31, 2020, which includes organizational enhancements, design enhancements, training, utilizing external resources and integration of related supporting technology. We are committed to maintaining a strong internal control environment and implementing measures designed to help ensure that control deficiencies contributing to the material weakness are remediated as soon as possible. We will consider the material weakness remediated after the applicable controls operate for a sufficient period of time, and management has concluded, through testing, that the controls are operating effectively.

Changes in Internal Control over Financial Reporting
There has not
Other than changes made in connection with our implementation of the remediation efforts mentioned above, there have been any changeno changes in our internal control over financial reporting (as such term is definedor in Rule 13a-15(f) under the Exchange Act)other factors during the fiscal quarter to which this Quarterly Report on Form 10-Q relatesended June 30, 2021 that hashave materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.



As a result of the COVID-19 pandemic, most of our workforce has shifted to a primarily work-from-home environment since March 2020. The change to remote working was rapid and while pre-existing controls were not specifically designed to operate in our current work-from-home operating environment, we believe that our internal control over financial reporting was not materially impacted. We are continually monitoring and assessing the COVID-19 pandemic's effect on our internal controls to minimize the impact on their design and effectiveness.
Part
PART II. — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Except as disclosed in Note 12 — Commitments, contingencies and other matters, there have been no material developments with respect to our potential liability for legal and environmental matters previously reported in our Form 10-K for the fiscal year ended December 31, 2020.

ITEM 1A. RISK FACTORS
Item 1.Legal Proceedings

There have been no material changes to the legal proceedings previously disclosed under “Legal Proceedings” includedrisk factors described in Part I, Item 1A, Risk Factors of our Annual Report on Form 10-K filed withfor the SEC on February 21, 2017.fiscal year ended December 31, 2020.


ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

This item is not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS
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Item 1A.Risk Factors
You should carefully consider the following risks and other information in this Quarterly Report on Form 10-Q in evaluating us and our common stock. Any of the following risks could materially and adversely affect our results of operations or financial condition. The risk factors generally have been separated into the following groups: Risks Related to Our Business, Risks Related to Our Manager, and Risks Related to Our Common Stock.
Risks Related to Our Business
We depend to a great extent on the economies and the demographics of the local communities that we serve, and we are also susceptible to general economic downturns, which have had, and could continue to have, a material and adverse impact on our advertising and circulation revenues and on our profitability.
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 adversely affected. Our advertising revenues are also susceptible to negative trends in the general economy that affect consumer spending. 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. Declines in the U.S. economy could also significantly affect key advertising revenue categories, such as help wanted, real estate and automotive.
Uncertainty and adverse changes in the general economic conditions of markets in which we participate may negatively affect our business.
Current and future conditions in the economy have an inherent degree of uncertainty. 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. Adverse changes may occur as a result of weak global economic conditions, declining oil prices, wavering consumer confidence, unemployment, declines in stock markets, contraction of credit availability, declines in real estate values, natural disasters, 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.
Our ability to generate revenues is correlated with the economic conditions of three geographic regions of the United States.
Our Company primarily generates revenue in three geographic regions: the Northeast, the Midwest, and the Southeast. During the nine months ended September 24, 2017, approximately 29% of our total revenues were generated in three states in the Northeast: Massachusetts, Rhode Island, and New York. During the same period, approximately 21% of our total revenues were generated in two states in the Midwest: Ohio and Illinois. Also during the same period, approximately 20% of our total revenues were generated in two states in the Southeast: Florida and North Carolina. As a result of this geographic concentration, our financial results, including advertising and circulation revenue, depend largely upon economic conditions in these principal market areas. Accordingly, adverse economic developments within these three regions in particular could significantly affect our consolidated operations and financial results.
Our indebtedness and any future indebtedness may limit our financial and operating activities and our ability to incur additional debt to fund future needs or dividends.


As of September 24, 2017, New Media’s outstanding indebtedness consists primarily of the New Media Credit Agreement. The New Media Credit Agreement provided for (i) a $200 million senior secured term facility, (ii) a $25 million senior secured revolving credit facility, with a $5 million sub-facility for letters of credit and a $5 million sub-facility for swing loans and (iii) the ability for us to request one or more new commitments for term loans or revolving loans from time to time up to an aggregate total of $75 million (the "Incremental Facility"), subject to certain conditions. On September 3, 2014, the New Media Credit Agreement was amended to provide for additional term loans under the Incremental Facility in an aggregate principal amount of $25 million. On November 20, 2014, the New Media Credit Agreement was further amended to increase the amount available thereunder for incremental term loans from $75 million to $225 million in order to facilitate the financing of the acquisition of substantially all of the assets from Halifax Media Group LLC. On January 9, 2015, the New Media Credit Agreement was amended to provide for additional term loans and revolving commitments under the Incremental Facility in a combined aggregate principal amount of $152 million and to make certain amendments to the Revolving Credit Facility. On February 13, 2015, the New Media Credit Agreement was amended to, amongst other things, replace the existing term loans with a new class of replacement term loans with extended call protection. On March 6, 2015, the New Media Credit Agreement was amended to provide for $15 million in additional revolving commitments under the Incremental Facility. On May 29, 2015, the New Media Credit Agreement was amended to provide for $25 million in additional term loans under the Incremental Facility. On July 14, 2017, the New Media Credit Agreement was amended to, among other things, (i) extend the maturity date of the outstanding term loans to July 14, 2022 (the “Extended Term Loans”), (ii) provide for a 1.00% prepayment premium for any prepayments of the Extended Term Loans made in connection with certain repricing transactions effected within six months of the date of the amendment, (iii) extend the maturity date of the revolving credit facility to July 14, 2021, (iv) provide for additional dollar-denominated term loans in an aggregate principal amount of $20 million (the “2017 Incremental Term Loans”) on the same terms as the Extended Term Loans and (v) increase the amount of the incremental facility that may be requested on or after the date of the amendment (inclusive of the 2017 Incremental Term Loans) to $100 million. As of September 24, 2017, $0 was drawn under the Revolving Credit Facility.
The Halifax Alabama Credit Agreement, which arose from debt obligations assumed by us in connection with our acquisition of substantially all of the assets from Halifax Media Group LLC on January 9, 2015, is comprised of debt in the principal amount of $8 million that bears interest at the rate of LIBOR plus 6.25% per annum (with a minimum of 1% LIBOR) payable quarterly in arrears, maturing on March 31, 2019. As of September 24, 2017, $8 million was outstanding under the Halifax Alabama Credit Agreement.
All of the above indebtedness and any future indebtedness we incur could:
require us to dedicate a portion of cash flow from operations to the payment of principal and interest on indebtedness, including indebtedness we may incur in the future, thereby reducing the funds available for other purposes, including dividends or other distributions;
subject us to increased sensitivity to increases in prevailing interest rates;
place us at a competitive disadvantage to competitors with relatively less debt in economic downturns, adverse industry conditions or catastrophic external events; or
reduce our flexibility in planning for or responding to changing business, industry and economic conditions.
In addition, our indebtedness could limit our ability to obtain additional financing on acceptable terms or at all to fund future acquisitions, working capital, capital expenditures, debt service requirements, general corporate and other purposes, which would have a material effect on our business and financial condition. Our liquidity needs could vary significantly and may be affected by general economic conditions, industry trends, performance and many other factors not within our control.
Each of the New Media Credit Agreement and Advantage Credit Agreements contains covenants that restrict our operations and may inhibit our ability to grow our business, increase revenues and pay dividends to our stockholders.
The New Media Credit Agreement contains various restrictions, covenants and representations and warranties. If we fail to comply with any of these covenants or breach these representations or warranties in any material respect, such noncompliance would constitute a default under the New Media Credit Agreement (subject to applicable cure periods), and the lenders could elect to declare all amounts outstanding under the agreements related thereto to be immediately due and payable and enforce their respective interests against collateral pledged under such agreements.
The covenants and restrictions in the New Media Credit Agreement generally restrict our ability to, among other things:


incur or guarantee additional debt;
make certain investments, loans or acquisitions;
transfer or sell assets;
make distributions on capital stock or redeem or repurchase capital stock;
create or incur liens;
enter into transactions with affiliates;
consolidate, merge or sell all or substantially all of our assets; and
create restrictions on the payment of dividends or other amounts to us from our restricted subsidiaries.
The Halifax Alabama Credit Agreement contains covenants substantially consistent with those contained in the New Media Credit Agreement in addition to those required for compliance with the New Markets Tax Credit program.
The restrictions described above may interfere with our ability to obtain new or additional financing or may affect the manner in which we structure such new or additional financing or engage in other business activities, which may significantly limit or harm our results of operations, financial condition and liquidity. A default and any resulting acceleration of obligations under any of the New Media Credit Agreement or Halifax Alabama Credit Agreement could also result in an event of default and declaration of acceleration under our other existing debt agreements. Such an acceleration of our debt would have a material adverse effect on our liquidity and our ability to continue as a going concern. A default under any of the New Media Credit Agreement or Halifax Alabama Credit Agreement could also significantly limit our alternatives to refinance both the debt under which the default occurred and other indebtedness. This limitation may significantly restrict our financing options during times of either market distress or our financial distress, which are precisely the times when having financing options is most important.
We may not generate a sufficient amount of cash or generate sufficient funds from operations to fund our operations or repay our indebtedness.
Our ability to make payments on our indebtedness as required depends on our ability to generate cash flow from operations in the future. This ability, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
If we do not generate sufficient cash flow from operations to satisfy our debt obligations, including interest payments and the payment of principal at maturity, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets, reducing or delaying capital investments or seeking to raise additional capital. We cannot provide assurance that any refinancing would be possible, that any assets could be sold, or, if sold, of the timeliness and amount of proceeds realized from those sales, that additional financing could be obtained on acceptable terms, if at all, or that additional financing would be permitted under the terms of our various debt instruments then in effect. Furthermore, our ability to refinance would depend upon the condition of the finance and credit markets. Our inability to generate sufficient cash flow to satisfy our debt obligations, or to refinance our obligations on commercially reasonable terms or on a timely basis, would materially affect our business, financial condition and results of operations.
We may not be able to pay dividends in accordance with our announced intent or at all.
We have announced our intent to distribute a substantial portion of our free cash flow generated from operations or other sources as a dividend to our stockholders, through a quarterly dividend, subject to satisfactory financial performance, approval by our Board of Directors and dividend restrictions in the New Media Credit Agreement. The Board of Directors’ determinations regarding dividends will depend on a variety of factors, including the Company’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. Although we recently paid a second quarter 2017 cash dividend of $0.35 per share of Common Stock and have regularly paid quarterly dividends since the third quarter of 2014, there can be no guarantee that we will continue to pay dividends in the future or that this recent dividend is representative of the amount of any future dividends. Our ability to declare future dividends 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.
We may acquire additional companies with declining cash flow as part of a strategy aimed at stabilizing cash flow through expense reduction and digital expansion. If our strategy is not successful, we may not be able to pay dividends.
As a holding company, we are also dependent on our subsidiaries being able to pay dividends to us. Our subsidiaries are subject to restrictions on the ability to pay dividends under the various instruments governing their indebtedness. If our subsidiaries incur additional debt or losses, such additional indebtedness or loss may further impair their ability to pay dividends or make other distributions to us. In addition, the ability of our subsidiaries to declare and pay dividends to us will also be dependent on their cash income and cash available and may be restricted under applicable law or regulation. Under Delaware law, approval of the board of directors is required to approve any dividend, which may only be paid out of surplus or net profit for the applicable fiscal year. As a result, we may not be able to pay dividends in accordance with our announced intent or at all.
We have invested in growing our digital business, including UpCurve and including through strategic acquisitions, but such investments may not be successful, which could adversely affect our results of operations.
We continue to evaluate our business and how we intend to grow our digital business. Internal resources and effort are put towards this business and acquisitions are sought to expand this business. In addition, key partnerships have been entered into to assist with our digital business, including UpCurve. We continue to believe that our digital businesses, including UpCurve, offer opportunities for revenue growth to support and, in some cases, offset the revenue trends we have seen in our print business. There can be no assurances that the partnerships we have entered into, the acquisitions we have completed or the internal strategy being employed will result in generating or increasing digital revenues in amounts necessary to stabilize or offset trends in print revenues. In addition, we have a limited history of operations in this area, and there can be no assurances that past performance will be indicative of future performance or future trends. If our digital strategy, including with regard to UpCurve, is not as successful as we anticipate, our financial condition, results of operations and ability to pay dividends could be adversely affected.

Acquisitions have formed a significant part of our growth strategy in the past and are expected to continue to do so. If we are unable to identify suitable acquisition candidates or successfully integrate the businesses we acquire, our growth strategy may not succeed. Acquisitions involve numerous risks, including risks related to integration, and these risks could adversely affect our business, financial condition and results of operations.
Our business strategy relies on acquisitions. We expect to derive a significant portion of our growth by acquiring businesses and integrating those businesses into our existing operations. We continue to seek acquisition opportunities, however we may not be successful in identifying acquisition opportunities, assessing the value, strengths and weaknesses of these opportunities or consummating acquisitions on acceptable terms. Furthermore, suitable acquisition opportunities may not even be made available or known to us. In addition, valuations of potential acquisitions may rise materially, making it economically unfeasible to complete identified acquisitions.
Additionally, our ability to realize the anticipated benefits of the synergies between New Media and our recent or potential future acquisitions of assets or companies will depend, in part, on our ability to appropriately integrate the business of New Media and the businesses of other such acquired companies. The process of acquiring assets or companies may disrupt our business and may not result in the full benefits expected. The risks associated with integrating the operations of New Media and recent and potential future acquisitions include, among others:
uncoordinated market functions;
unanticipated issues in integrating the operations and personnel of the acquired businesses;
the incurrence of indebtedness and the assumption of liabilities;
the incurrence of significant additional capital expenditures, transaction and operating expenses and non-recurring acquisition-related charges;
unanticipated adverse impact on our earnings from the amortization or write-off of acquired goodwill and other intangible assets;
cultural challenges associated with integrating acquired businesses with the operations of New Media;


not retaining key employees, vendors, service providers, readers and customers of the acquired businesses; and
the diversion of management’s attention from ongoing business concerns.
If we are unable to successfully implement our acquisition strategy or address the risks associated with integrating the operations of New Media and past acquisitions or potential future acquisitions, or if we encounter unforeseen expenses, difficulties, complications or delays frequently encountered in connection with the integration of acquired entities and the expansion of operations, our growth and ability to compete may be impaired, we may fail to achieve acquisition synergies and we may be required to focus resources on integration of operations rather than other profitable areas. Moreover, the success of any acquisition will depend upon our ability to effectively integrate the acquired assets or businesses. The acquired assets or businesses may not contribute to our revenues or earnings to any material extent, and cost savings and synergies we expect at the time of an acquisition may not be realized once the acquisition has been completed. Furthermore, if we incur indebtedness to finance an acquisition, the acquired business may not be able to generate sufficient cash flow to service that indebtedness. Unsuitable or unsuccessful acquisitions could adversely affect our business, financial condition, results of operations, cash flow and ability to pay dividends.
If we are unable to retain and grow our digital audience and advertiser base, our digital businesses will be adversely affected.
Given the ever-growing and rapidly changing number of digital media options available on the internet, we may not be able to increase our online traffic sufficiently and retain or grow a base of frequent visitors to our websites and applications on mobile devices.
We have experienced declines in advertising revenue due in part to advertisers’ shift from print to digital media, and we may not be able to create sufficient advertiser interest in our digital businesses to maintain or increase the advertising rates of the inventory on our websites.
In addition, the ever-growing and rapidly changing number of digital media options available on the internet may lead to technologies and alternatives that we are not able to offer or about which we are not able to advise. Such circumstances could directly and adversely affect the availability, applicability, marketability and profitability of the suite of SMB services and the private ad exchange we offer as a significant part of our digital business. Specifically, news aggregation websites and customized news feeds (often free to users) may reduce our traffic levels by driving interaction away from our websites or our digital applications. If traffic levels stagnate or decline, we may not be able to create sufficient advertiser interest in our digital businesses or to maintain or increase the advertising rates of the inventory on our digital platforms. We may also be adversely affected if the use of technology developed to block the display of advertising on websites proliferates.
Technological developments and any changes we make to our business strategy may require significant capital investments. Such investments may be restricted by our current or future credit facilities.
If there is a significant increase in the price of newsprint or a reduction in the availability of newsprint, our results of operations and financial condition may suffer.
The basic raw material for our publications is newsprint. We generally maintain only a 45 to 55-day inventory of newsprint, although our participation in a newsprint-buying consortium has helped ensure adequate supply. An inability to obtain an adequate supply of newsprint at a favorable price or at all in the future could have a material adverse effect on our ability to produce our publications. Historically, the price of newsprint has been volatile, reaching a high of approximately $823 per metric ton in 2008 and experiencing a low of almost $410 per metric ton in 2002. The average price of newsprint during 2016 was approximately $626 per metric ton. Recent and future consolidation of major newsprint suppliers may adversely affect price competition among suppliers. Significant increases in newsprint costs for properties and periods not covered by our newsprint vendor agreement could have a material adverse effect on our financial condition and results of operations.
We have experienced declines in advertising revenue, and further declines, which could adversely affect our results of operations and financial condition, may occur.
Excluding acquisitions, we have experienced declines in advertising revenue, due in part to advertisers' shift from print to digital media. We continue to search for organic growth opportunities, including in our digital advertising business, and for ways to stabilize print revenue declines through new product launches and pricing. However, there can be no assurance that our advertising revenue will not continue to decline. In addition, the range of advertising choices across digital products and


platforms and the large inventory of available digital advertising space have historically resulted in significantly lower rates for digital advertising than for print advertising. Consequently, our digital advertising revenue may not be able to replace print advertising revenue lost as a result of the shift to digital consumption. Further declines in advertising revenue could adversely affect our results of operations and financial condition.
We compete with a large number of companies in the local media industry; if we are unable to compete effectively, our advertising and circulation revenues may decline.
Our business is concentrated in newspapers and other print publications located primarily in small and midsize markets in the United States. Our revenues primarily consist of advertising and paid circulation. Competition for advertising revenues and paid circulation comes from direct mail, directories, radio, television, outdoor advertising, other newspaper publications, the internet and other media. For example, as the use of the internet and mobile devices has increased, we have lost some classified advertising and subscribers to online advertising businesses and our free internet sites that contain abbreviated versions of our publications. Competition for advertising revenues is based largely upon advertiser results, advertising rates, readership, demographics and circulation levels. Competition for circulation is based largely upon the content of the publication and its price and editorial quality. Our local and regional competitors vary from market to market, and many of our competitors for advertising revenues are larger and have greater financial and distribution resources than us. We may incur increased costs competing for advertising expenditures and paid circulation. We may also experience further declines of circulation or print advertising revenue due to alternative media, such as the internet. If we are not able to compete effectively for advertising expenditures and paid circulation, our revenues may decline.
We are undertaking strategic process upgrades that could have a material adverse financial impact if unsuccessful.
We are implementing strategic process upgrades of our business. Among other things we are implementing the standardization and centralization of systems and processes, the outsourcing of certain financial processes and the use of new software for our circulation, advertising and editorial systems. As a result of ongoing strategic evaluation and analysis, we have made and will continue to make changes that, if unsuccessful, could have a material adverse financial impact.
Our business is subject to seasonal and other fluctuations, which affects our revenues and operating results.
Our business is subject to seasonal fluctuations that we expect to continue to be reflected in our operating results in future periods. Our first fiscal quarter of the year tends to be our weakest quarter because advertising volume is at its lowest levels following the December holiday season. Correspondingly, our second and fourth fiscal quarters tend to be our strongest because they include heavy holiday and seasonal advertising. Other factors that affect our quarterly revenues and operating results may be beyond our control, including changes in the pricing policies of our competitors, the hiring and retention of key personnel, wage and cost pressures, distribution costs, changes in newsprint prices and general economic factors.
We could be adversely affected by declining circulation.
Overall daily newspaper circulation, including national and urban newspapers, has declined in recent years. For the year ended December 25, 2016, our circulation revenue increased by $43.2 million, or 11.4%, as compared to the year ended December 27, 2015, of which $32.0 million relates to acquisitions. There can be no assurance that our circulation revenue will not decline again in the future. We have been able to maintain annual circulation revenue from existing operations in recent years through, among other things, increases in per copy prices. However, there can be no assurance that we will be able to continue to increase prices to offset any declines in circulation. Further declines in circulation could impair our ability to maintain or increase our advertising prices, cause purchasers of advertising in our publications to reduce or discontinue those purchases and discourage potential new advertising customers, all of which could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends.
The increasing popularity of digital media could also adversely affect circulation of our newspapers, which may decrease circulation revenue and cause more marked declines in print advertising. Further, readership demographics and habits may change over time. If we are not successful in offsetting such declines in revenues from our print products, our business, financial condition and prospects will be adversely affected.
The value of our intangible assets may become impaired, depending upon future operating results.
At September 24, 2017 the carrying value of our goodwill is $202.4 million, mastheads is $95.2 million, and amortizable intangible assets is $242.3 million. These assets are subject to annual impairment testing and more frequent testing upon the


occurrence of certain events or significant changes in our circumstances that indicate all or a portion of their carrying values may no longer be recoverable, in which case a non-cash charge to earnings may be necessary in the relevant period. We may subsequently experience market pressures which could cause future cash flows to decline below our current expectations, or volatile equity markets could negatively impact market factors used in the impairment analysis, including earnings multiples, discount rates, and long-term growth rates. Any future evaluations requiring an asset impairment charge for goodwill or other intangible assets would adversely affect future reported results of operations and shareholders’ equity.
As a result of the annual impairment assessment, as of June 25, 2017, we recorded a goodwill impairment in two of our reporting units, Central US Publishing and Western US Publishing ("West"), for a total of $25.6 million. Additionally, the estimated fair value exceeded carrying value for mastheads except in the West reporting unit, which recognized an impairment charge of $1.8 million.
During the fourth quarter of 2015, we reorganized our management structure to align with the geography of the market served.  As a result, an additional impairment analysis was performed.  The analysis of masthead values suggested impairment, and a charge of $4.8 million was recorded in December 2015.
For further information on goodwill and intangible assets, see Note 5 to the consolidated financial statements, “Goodwill and Intangible Assets”.
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.
Sustained increases in costs of employee health and welfare benefits may reduce our profitability. Moreover, our pension plan obligations are currently underfunded, and we may have to make significant cash contributions to our plans, which could reduce the cash available for our business.
In recent years, we have experienced significant increases in the cost of employee medical benefits because of economic factors beyond our control, including increases in health care costs. At least 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.
Our pension and postretirement plans were underfunded by $24.6 million at September 24, 2017. Our pension plan invests in a variety of equity and debt securities. Future volatility and disruption in the stock markets could cause declines in the asset values of our pension plans. In addition, a decrease in the discount rate used to determine minimum funding requirements


could result in increased future contributions. If either occurs, we may need to make additional pension contributions above what is currently estimated, which could reduce the cash available for our businesses.
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 services, which we attempt to protect through patents, copyrights, trade laws and contractual restrictions, such 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 depend on key personnel and we may not be able to operate or grow our business effectively if we lose the services of any of our key personnel or are unable to attract qualified personnel in the future.
The success of our business is heavily dependent on our ability to retain our management and other key personnel and to attract and retain qualified personnel in the future. Competition for senior management personnel is intense, and we may not be able to retain our key personnel. Although we have entered into employment agreements with certain of our key personnel, these agreements do not ensure that our key personnel will continue in their present capacity with us for any particular period of time. We do not have key man insurance for any of our current management or other key personnel. The loss of any key personnel would require our remaining key personnel to divert immediate and substantial attention to seeking a replacement. An inability to find a suitable replacement for any departing executive officer on a timely basis could adversely affect our ability to operate or grow our business.
A shortage of skilled or experienced employees in the media industry, or our inability to retain such employees, could pose a risk to achieving improved productivity and reducing costs, which could adversely affect our profitability.
Production and distribution of our various publications requires skilled and experienced employees. A shortage of such employees, or our inability to retain such employees, could have an adverse impact on our productivity and costs, our ability to expand, develop and distribute new products and our entry into new markets. The cost of retaining or hiring such employees could exceed our expectations which could adversely affect our results of operations.
A number of our employees are unionized, and our business and results of operations could be 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 September 24, 2017, we employed 9,830 employees, of whom 1,215 (or approximately 12%) were represented by 38 unions. 85% of the unionized employees are in four states: Ohio, Rhode Island, Massachusetts and Illinois and represent 30%, 24%, 16% and 15% of all our union employees, respectively. Most of our unionized employees work under collective bargaining agreements that expire in 2018.
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.
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 United States have increased our exposure to losses resulting from financial distress, insolvency and the potential bankruptcy of our advertising customers. Our accounts receivable are stated at net estimated


realizable value, and our allowance for doubtful accounts has been determined based on several factors, including receivable agings, significant individual credit risk accounts and historical experience. If such collectability estimates prove inaccurate, adjustments to future operating results could occur.
Our potential inability to successfully execute cost control measures could result in greater than expected total operating costs.
We have implemented general cost control measures, and we expect to continue such cost control efforts in the future. If we do not achieve expected savings as a result of such measures or if our operating costs increase as a result of our growth strategy, our total operating costs may be greater than expected. In addition, reductions in staff and employee benefits could affect our ability to attract and retain key employees.
We rely on revenue from the printing of publications for third parties that may be subject to many of the same business and industry risks that we are.
In 2016, we generated approximately 6.7% of our revenue from printing third-party publications, and our relationships with these third parties are generally pursuant to short-term contracts. As a result, if the macroeconomic and industry trends described herein such as the sensitivity to perceived economic weakness of discretionary spending available to advertisers and subscribers, circulation declines, shifts in consumer habits and the increasing popularity of digital media affect those third parties, we may lose, in whole or in part, a substantial source of revenue.
A decision by any of the three largest national publications or the major local publications to cease publishing in those markets, or seek alternatives to their current business practice of partnering with us, could materially impact our profitability.
Our possession and use of personal information and the use of payment cards by our customers present risks and expenses that could harm our business. Unauthorized access to or disclosure or manipulation of such data, whether through breach of our network security or otherwise, could expose us to liabilities and costly litigation and damage our reputation.
Our online systems store and process confidential subscriber and other sensitive data, such as names, email addresses, addresses, and other personal information. Therefore, maintaining our network security is critical. Additionally, we depend on the security of our third-party service providers. Unauthorized use of or inappropriate access to our, or our third-party service providers’ networks, computer systems and services could potentially jeopardize the security of confidential information, including payment card (credit or debit) information, of our customers. 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 may be unable to anticipate these techniques or to implement adequate preventative measures. Non-technical means, for example, actions by an employee, can also result in a data breach. A party that is able to circumvent our security measures could misappropriate our proprietary information or the information of our customers or users, cause interruption in our operations, or damage our computers or those of our customers or users. As a result of any such breaches, customers or users may assert claims of liability against us and these activities may subject us to 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.
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 United States federal and state regulatory agencies or courts. We could also be subject to evolving state laws that impose data breach notification requirements, specific data security obligations, or other consumer 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.
Risks Related to Our Manager
We are dependent on our Manager and may not find a suitable replacement if our Manager terminates the Management Agreement and the inability of our Manager to retain or obtain key personnel could delay or hinder implementation of our investment strategies, which could impair our ability to make distributions and could reduce the value of your investment.
Some of our officers and other individuals who perform services for us are employees of our Manager. We are reliant on our Manager, which has significant discretion as to the implementation of our operating policies and strategies, to conduct our business. We are subject to the risk that our Manager will terminate the Management Agreement and that we will not be able to find a suitable replacement for our Manager in a timely manner, at a reasonable cost or at all. Furthermore, we are dependent on the services of certain key employees of our Manager whose compensation may be partially or entirely dependent upon the amount of incentive or management compensation earned by our Manager and whose continued service is not guaranteed, and the loss of such services could adversely affect our operations. If any of these people were to cease their affiliation with us or our Manager, either we or our Manager may be unable to find suitable replacements, and our operating results could suffer. We believe that our future success depends, in large part, upon our Manager’s ability to hire and retain highly skilled personnel. Competition for highly skilled personnel is intense, and our Manager may be unsuccessful in attracting and retaining such skilled personnel. If we lose or are unable to obtain the services of highly skilled personnel, our ability to implement our investment strategies could be delayed or hindered and this could materially adversely affect our business, results of operations, financial condition and ability to make distributions to our stockholders.
On February 14, 2017, Fortress announced that it had entered into the Merger Agreement with SB Foundation Holdings LP, a Cayman Islands exempted limited partnership (“SoftBank Parent”) and an affiliate of SoftBank, and Foundation Acquisition LLC, a Delaware limited liability company and wholly owned subsidiary of SoftBank Parent (“SoftBank Merger Sub”), pursuant to which SoftBank Merger Sub will merge with and into Fortress, with Fortress surviving as a wholly owned subsidiary of SoftBank Parent. While Fortress’s senior investment professionals are expected to remain in place, including those individuals who perform services for us, there can be no assurance that the SoftBank merger will not have an impact on us or our relationship with the Manager.
There are conflicts of interest in our relationship with our Manager.
Our Management Agreement with our Manager was not negotiated between unaffiliated parties, and its terms, including fees payable, although approved by the independent directors of both Newcastle (our parent prior to the spin-off of the Company) and New Media as fair, may not be as favorable to us as if they had been negotiated with an unaffiliated third party.
There are conflicts of interest inherent in our relationship with our Manager insofar as our Manager and its affiliates—including investment funds, private investment funds, or businesses managed by our Manager—invest in media assets and whose investment objectives overlap with our investment objectives. Certain investments appropriate for us may also be appropriate for one or more of these other investment vehicles. Certain members of our Board of Directors and employees of our Manager who may be officers also serve as officers and/or directors of these other entities. Although we have the same Manager, we may compete with entities affiliated with our Manager or Fortress for certain target assets. From time to time, affiliates of Fortress focus on investments in assets with a similar profile as our target assets that we may seek to acquire. These affiliates may have meaningful purchasing capacity, which may change over time depending upon a variety of factors, including, but not limited to, available equity capital and debt financing, market conditions and cash on hand. In addition, with respect to Fortress funds in the process of selling investments, our Manager may be incentivized to regard the sale of such assets to us positively, particularly if a sale to an unrelated third party would result in a loss of fees to our Manager.
Our Management Agreement with our Manager does not prevent our Manager or any of its affiliates, or any of their officers and employees, from engaging in other businesses or from rendering services of any kind to any other person or entity, including investment in, or advisory service to others investing in, any type of media or media related investment, including investments which meet our principal investment objectives. Our Manager may engage in additional investment opportunities related to media assets in the future, which may cause our Manager to compete with us for investments or result in a change in our current investment strategy. In addition, our certificate of incorporation provides that if Fortress or an affiliate or any of their officers, directors or employees acquire knowledge of a potential transaction or matter that may be a corporate opportunity, they have no duty, to the fullest extent permitted by law, to offer such corporate opportunity to us, our stockholders


or our affiliates. In the event that any of our directors and officers who is also a director, officer or employee of Fortress or its affiliates acquires knowledge of a corporate opportunity or is offered a corporate opportunity, provided that this knowledge was not acquired solely in such person’s capacity as a director or officer of ours and such person acts in good faith, then to the fullest extent permitted by law such person is deemed to have fully satisfied such person’s fiduciary duties owed to us and is not liable to us if Fortress or its affiliates pursues or acquires the corporate opportunity or if such person did not present the corporate opportunity to us.
The ability of our Manager and its officers and employees to engage in other business activities, subject to the terms of our Management Agreement with our Manager, may reduce the amount of time our Manager, its officers or other employees spend managing us. In addition, we may engage in material transactions with our Manager or another entity managed by our Manager or one of its affiliates, which may present an actual, potential or perceived conflict of interest. It is possible that actual, potential or perceived conflicts could give rise to investor dissatisfaction, litigation or regulatory enforcement actions. Appropriately dealing with conflicts of interest is complex and difficult, and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with one or more potential, actual or perceived conflicts of interest. Regulatory scrutiny of, or litigation in connection with, conflicts of interest could have a material adverse effect on our reputation, which could materially adversely affect our business in a number of ways, including causing an inability to raise additional funds, a reluctance of counterparties to do business with us, a decrease in the prices of our equity securities and a resulting increased risk of litigation and regulatory enforcement actions.
The management compensation structure that we have agreed to with our Manager, as well as compensation arrangements that we may enter into with our Manager in the future (in connection with new lines of business or other activities), may incentivize our Manager to invest in high risk investments. In addition to its management fee, our Manager is currently entitled to receive incentive compensation. In evaluating investments and other management strategies, the opportunity to earn incentive compensation may lead our Manager to place undue emphasis on the maximization of such measures at the expense of other criteria, such as preservation of capital, in order to achieve higher incentive compensation. Investments with higher yield potential are generally riskier or more speculative than lower-yielding investments. Moreover, because our Manager receives compensation in the form of options in connection with the completion of our equity offerings, our Manager may be incentivized to cause us to issue additional stock, which could be dilutive to existing stockholders.
It would be difficult and costly to terminate our Management Agreement with our Manager.
It would be difficult and costly for us to terminate our Management Agreement with our Manager. After its initial three-year term, the Management Agreement is automatically renewed for one-year terms unless (i) a majority consisting of at least two-thirds of our independent directors, or a simple majority of the holders of outstanding shares of our common stock reasonably agree that there has been unsatisfactory performance by our Manager that is materially detrimental to us or (ii) a simple majority of our independent directors agree that the management fee payable to our Manager is unfair, subject to our Manager’s right to prevent such a termination by agreeing to continue to provide the services under the Management Agreement at a fee that our independent directors have determined to be fair. If we elect not to renew the Management Agreement, our Manager will be provided not less than 60 days’ prior written notice. In the event we terminate the Management Agreement, our Manager will be paid a termination fee equal to the amount of the management fee earned by the Manager during the 12-month period immediately preceding such termination. In addition, following any termination of the Management Agreement, our Manager may require us to purchase its right to receive incentive compensation at a price determined as if our assets were sold for their then current fair market value or otherwise we may continue to pay the incentive compensation to our Manager. These provisions may increase the effective cost to us of terminating the Management Agreement, thereby adversely affecting our ability to terminate our Manager without cause.
Our Board of Directors does not approve each investment decision made by our Manager. In addition, we may change our investment strategy without a stockholder vote, which may result in our making investments that are different, riskier or less profitable than our current investments.
Our Manager has great latitude in determining the types and categories of assets it may decide are proper investments for us, including the latitude to invest in types and categories of assets that may differ from those in which we currently invest. Our board of directors periodically reviews our investment portfolio. However, our Board of Directors does not review or pre-approve each proposed investment or our related financing arrangements. In addition, in conducting periodic reviews, our Board of Directors relies primarily on information provided to them by our Manager. Furthermore, transactions entered into by our Manager may be difficult or impossible to unwind by the time they are reviewed by our Board of Directors even if the transactions contravene the terms of the Management Agreement. In addition, we may change our investment strategy, including our target asset classes, without a stockholder vote.


Our investment strategy may evolve in light of existing market conditions and investment opportunities, and this evolution may involve additional risks depending upon the nature of the assets in which we invest and our ability to finance such assets on a short- or long-term basis. Investment opportunities that present unattractive risk-return profiles relative to other available investment opportunities under particular market conditions may become relatively attractive under changed market conditions, and changes in market conditions may therefore result in changes in the investments we target. Decisions to make investments in new asset categories present risks that may be difficult for us to adequately assess and could therefore reduce our ability to pay dividends on our common stock or have adverse effects on our liquidity or financial condition. A change in our investment strategy may also increase our exposure to interest rate, real estate market or credit market fluctuations. In addition, a change in our investment strategy may increase the guarantee obligations we agree to incur or increase the number of transactions we enter into with affiliates. Our failure to accurately assess the risks inherent in new asset categories or the financing risks associated with such assets could adversely affect our results of operations and our financial condition.
Our Manager will not be liable to us for any acts or omissions performed in accordance with the Management Agreement, including with respect to the performance of our investments.
Pursuant to our Management Agreement, our Manager assumes no responsibility other than to render the services called for thereunder in good faith and shall not be responsible for any action of our Board of Directors in following or declining to follow its advice or recommendations. Our Manager, its members, managers, officers and employees will not be 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 our Manager, its members, managers, officers or employees, except by reason of acts constituting bad faith, willful misconduct, gross negligence or reckless disregard of our Manager’s duties under our Management Agreement. We shall, to the full extent lawful, reimburse, indemnify and hold our Manager, its members, managers, officers and employees, and each other person, if any, controlling our Manager, harmless of and from any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever (including attorneys’ fees) in respect of or arising from any acts or omissions of an indemnified party made in good faith in the performance of our Manager’s duties under our Management Agreement and not constituting such indemnified party’s bad faith, willful misconduct, gross negligence or reckless disregard of our Manager’s duties under our Management Agreement.
Our Manager’s due diligence of investment opportunities or other transactions may not identify all pertinent risks, which could materially affect our business, financial condition, liquidity and results of operations.
Our Manager intends to conduct due diligence with respect to each investment opportunity or other transaction it pursues. It is possible, however, that our Manager’s due diligence processes will not uncover all relevant facts, particularly with respect to any assets we acquire from third parties. In these cases, our Manager may be given limited access to information about the investment and will rely on information provided by the target of the investment. In addition, if investment opportunities are scarce, the process for selecting bidders is competitive, or the timeframe in which we are required to complete diligence is short, our ability to conduct a due diligence investigation may be limited, and we would be required to make investment decisions based upon a less thorough diligence process than would otherwise be the case. Accordingly, investments and other transactions that initially appear to be viable may prove not to be over time, due to the limitations of the due diligence process or other factors.
Because we are dependent upon our Manager and its affiliates to conduct our operations, any adverse changes in the financial health of our Manager or its affiliates or our relationship with them could hinder our Manager’s ability to successfully manage our operations.
We are dependent on our Manager and its affiliates to manage our operations and acquire and manage our investments. Under the direction of our Board of Directors, our Manager makes all decisions with respect to the management of our company. To conduct its operations, our Manager depends upon the fees and other compensation that it receives from us in connection with managing our company and from other entities and investors with respect to investment management services it provides. Any adverse changes in the financial condition of our Manager or its affiliates, or our relationship with our Manager, could hinder our Manager’s ability to successfully manage our operations, which would materially adversely affect our business, results of operations, financial condition and ability to make distributions to our stockholders. For example, adverse changes in the financial condition of our Manager could limit its ability to attract key personnel.
Risks Related to our Common Stock
There can be no assurance that the market for our stock will provide you with 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:
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;
changes in accounting standards, policies, guidance, interpretations or principles;
announcements by us or our competitors of significant investments, acquisitions or dispositions;
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;
overall market fluctuations; and
general economic conditions.
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.
Sales or issuances of shares of our common stock could adversely affect the market price of our Common Stock.
Sales of substantial amounts of shares of our Common Stock in the public market, or the perception that such sales 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 Plan (as defined below) or otherwise could also have an adverse effect on the market price of our Common Stock.
Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.
As a public company, we are required to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. We continue to seek acquisition opportunities, and such potential acquisitions may result in a change to our internal control over financial reporting that may materially affect our internal control over financial reporting. Internal control over financial reporting is complex and may be revised over time to adapt to changes in our business, or changes in applicable accounting rules. We cannot assure you that our internal control over financial reporting will be effective in the future or that a material weakness will not be discovered with respect to a prior period for which we had previously believed that internal controls were effective. If we are not able to maintain or document effective internal control over financial reporting, our management and our independent registered public accounting firm will not be able to certify as to the effectiveness of our internal control over financial reporting. Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis, or may cause us to restate previously issued financial information, and thereby subject us to adverse regulatory consequences, including sanctions or investigations by the SEC, or violations of applicable stock exchange listing rules. There could also be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Confidence in the reliability of our financial statements is also likely to suffer if we or our independent registered public accounting firm reports a material weakness in our internal control over financial reporting. This could materially adversely affect us by, for example, leading to a decline in our share price and impairing our ability to raise capital, if and when desirable.
The percentage ownership of existing shareholders in New Media may be diluted in the future.


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 New Media. In addition, your percentage ownership may be diluted if we issue equity instruments such as debt and equity financing.
The percentage ownership of existing shareholders in New Media may also be diluted in the future as result of the issuance of ordinary shares in New Media upon the exercise of 10-year warrants (the “New Media Warrants”). The New Media Warrants collectively represent the right to acquire New Media Common Stock, which in the aggregate are equal to 5% of New Media Common Stock outstanding as of November 26, 2013 (calculated prior to dilution from shares of New Media Common Stock issued pursuant to Newcastle’s contribution of Local Media Group Holdings LLC and assignment of related stock purchase agreement to New Media (the “Local Media Contribution”)) at a strike price of $46.35 calculated based on a total equity value of New Media prior to the Local Media Contribution of $1.2 billion as of November 26, 2013. As a result, New Media Common Stock may be subject to dilution upon the exercise of such New Media Warrants.
Furthermore, the percentage ownership in New Media may be diluted in the future because of additional equity awards that we expect will be granted to our Manager pursuant to our Management Agreement. Upon the successful completion of an offering of shares of our Common Stock or any shares of preferred stock, we shall pay and issue to our Manager options to purchase our Common Stock equal to 10% of the number of shares sold in the offering, with an exercise price equal to the offering price per share paid by the public or other ultimate purchaser in the offering. On February 3, 2014, the Board of Directors adopted the New Media Investment Group Inc. Nonqualified Stock Option and Incentive Award Plan (the “Incentive Plan”), which provides for the grant of equity and equity-based awards, including restricted stock, stock options, stock appreciation rights, performance awards, tandem awards and other equity-based and non-equity based awards, in each case to our Manager, to the directors, officers, employees, service providers, consultants and advisors of our Manager who perform services for us, and to our directors, officers, employees, service providers, consultants and advisors. Any future grant would cause further dilution. We initially reserved 15 million shares of our Common Stock for issuance under the Incentive Plan; on the first day of each fiscal year beginning during the ten-year term of the Incentive Plan in and after calendar year 2015, that number will be increased by a number of shares of our Common Stock equal to 10% of the number of shares of our Common Stock newly issued by us during the immediately preceding fiscal year (and, in the case of fiscal year 2014, after the effective date of the Incentive Plan). In January 2017 and 2016, the number of shares reserved for issuance under the Incentive Plan was increased by 107,023 and 94,400, representing 10% of the shares of Common Stock newly issued in fiscal year 2016 and 2015, respectively.
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws and of Delaware law may prevent or delay an acquisition of our company, which could decrease the trading price of our Common Stock.
Our amended and restated certificate of incorporation, 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 rather than to attempt a hostile takeover. These provisions provide for:
a classified board of directors with staggered three-year terms;
amendment of provisions in our amended and restated certificate of incorporation and amended and restated bylaws regarding the election of directors, classes 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 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 and, as a result, may adversely affect the market price of our Common Stock and your ability to realize any potential change of control premium.
We are not required to repurchase our common stock, and any such repurchases may not result in effects we anticipated.
We have authorization from our Board of Directors to repurchase up to $100 million of the Company's common stock through May 17, 2018. We are not obligated to repurchase any specific amount of shares. The timing and amount of repurchases, if any, depends on several factors, including market and business conditions, the market price of shares of our common stock and our overall capital structure and liquidity position, including the nature of other potential uses of cash, not limited to investments in growth. There can be no assurance that any repurchases will have the effects we anticipated, and our repurchases will utilize cash that we will not be able to use in other ways, whether to grow the business or otherwise.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
Period Total Number of Shares Purchased Weighted-Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Programs 
Approximate Number of Shares that May Yet Be 
Purchased Under the Plan or Programs
Total through December 25, 2016 26,749
 $15.63
 —
 115,636
December 26, 2016 through January 29, 2017 —
 $—
 —
 107,632
January 30, 2017 through February 26, 2017 39,879
(1 
) 
$15.21
 —
 135,316
February 27, 2017 through March 26, 2017 —
 $—
 —
 135,316
March 27, 2017 through April 30, 2017 1,516
(1 
) 
$13.16
 —
 134,013
May 1, 2017 through May 28, 2017 391,120
(2 
) 
$12.77
 391,120
 7,584,013
May 29, 2017 through June 25, 2017 —
 $—
 —
 7,584,013
June 26, 2017 through July 30, 2017 1,901
(1 
) 
$14.03
 —
 7,582,112
July 30, 2017 through August 27, 2017 198
(1 
) 
$13.63
 —
 7,575,921
August 28, 2017 through September 24, 2017 —
 $—
 —
 $7,575,921
Total 461,363
 $13.15
 391,120
 7,575,921
_____________________


(1)Pursuant to the "withhold to cover" method for collecting and paying withholding taxes for our employees upon the vesting of restricted securities, we withheld from certain employees the shares noted in the table above to cover such statutory minimum tax withholdings. These transactions took place outside of a publicly-announced repurchase plan. The weighted-average price per share listed in the above table is the weighted-average of the fair market prices at which we calculated the number of shares withheld to cover tax withholdings for the employees.
(2)On May 17, 2017, the Company announced that the Company's Board of Directors authorized the repurchase of up to $100 million of the Company's common stock in the next 12 months.

Item 3.Defaults Upon Senior Securities
Not applicable
Item 4.Mine Safety Disclosures
Not applicable
Item 5.Other Information
Not applicable
Item 6.Exhibits
See Index to Exhibits on page 56 of this Quarterly Report on Form 10-Q.



Exhibit
No.
Number		DescriptionLocation
* 2.1‡
31.1		Rule 13a-14(a) Certification of CEO

31.2Rule 13a-14(a) Certification of CFO
10.1
32.1		Section 1350 Certification of CEO
32.2Section 1350 Certification of July 14, 2017, among New Media Holdings I LLC, New Media Holdings II LLC, the loan parties party thereto, the several banks and otherCFO
101
The following financial institutions party thereto and Citizens Bank of Pennsylvania, as administrative agent (incorporated by reference to Exhibit 10.1 to New Media Investment Groupinformation from Gannett Co., Inc.’s Current Quarterly Report on Form 8-K, filed July 18, 2017).10-Q for the quarter ended June 30, 2021, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations and Comprehensive Income; (iii) Condensed Consolidated Statements of Cash Flow; (iv) Condensed Consolidated Statements of Equity; and (v) Notes to Condensed Consolidated Financial Statements
Attached.
104
* 31.1
Cover Page Interactive Data File (formatted as Inline XBRL and embedded within the Inline XBRL document)
Rule 13a-14(a)/15d-14(d) Certification of Principal Executive Officer under the Securities Exchange Act of 1934 (included herewith).
* 31.2
Rule 13a-14(a)/15d-14(d) Certification of Principal Financial Officer under the Securities Exchange Act of 1934 (included herewith).
* 32.1
Section 1350 Certifications (included herewith).
* 101.INSXBRL Instance Document
* 101.SCHXBRL Taxonomy Extension Schema
* 101.CALXBRL Taxonomy Extension Calculation Linkbase
* 101.DEFXBRL Taxonomy Extension Definition Linkbase
* 101.LABXBRL Taxonomy Extension Label Linkbase
* 101.PREXBRL Taxonomy Extension Presentation LinkbaseAttached.


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*     Filed herewith.
‡    Schedules have been omitted pursuant to Item 601(b)(2)Table of Regulation S-K. New Media hereby undertakes to supplementally furnish copies of any of the omitted schedules upon request by the SEC.Contents



SIGNATURES
Pursuant to the requirements 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.

Date: August 6, 2021GANNETT CO., INC.
NEW MEDIA INVESTMENT GROUP INC./s/ Douglas E. Horne
Douglas E. Horne
Date: October 26, 2017/s/ Gregory W. Freiberg
Gregory W. Freiberg
Chief Financial Officer and Chief Accounting Officer
(Principal FinancialOn behalf of the Registrant and Accounting Officer)as principal financial and principal accounting officer)


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