Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☐☒	Accelerated Filer	☒☐

Non-Accelerated Filer	☐	Smaller Reporting Company	☐

		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of May ~~4, 2021, 142,506,800~~2, 2022, 146,591,116 shares of the registrant's Common Stock were outstanding.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

•General economic and market conditions;

•Global hostilities and any resulting effects and uncertainties;

•The competitive environment in which we operate;

•Risks and uncertainties associated with the ongoing COVID-19 pandemic;

•Economic conditions in the various regions of the United States, the United Kingdom, and other regions in which we operate our business;

•The shift within the publishing industry from traditional print media to digital forms of publication;

•Risks and uncertainties associated with our Digital Marketing Solutions segment, including its significant reliance on Google for media purchases, its international operations, and its ability to develop and gain market acceptance for new products or services;

•Declining print advertising revenue and circulation subscribers;

•Our ability to grow our digital marketing services initiatives, digital audience, and advertiser base;

•Our ability to grow our business organically;

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

•~~The risk that we may not~~Our ability to realize the anticipated benefits of our acquisitions;

•The availability and cost of capital for future investments;

•Our indebtedness may restrict our operations and/or require us to dedicate a portion of cash flow from operations to payments associated with our debt;

•Our current intention not to pay dividends and our ability to pay dividends ~~consistent with prior practice or~~in the future, if at all;

•Our ability to reduce costs and expenses;

•~~Risks and uncertainties associated with the transition from external management to self-management of the Company;~~

•Our ability to ~~remediate a material weakness in our~~maintain proper and effective internal control over financial reporting; ~~and~~

•Our ability to recruit and retain key ~~personnel, as well as any~~personnel; and

•Any shortage of skilled or experienced employees ~~including journalists.~~with the capabilities necessary to support our business strategies, or our inability to retain such employees.

Part I. Financial Information

Part II. Other Information

PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED BALANCE SHEETS


In thousands, except share data	In thousands, except share data	March 31, 2021		December 31, 2020		In thousands, except share data	March 31, 2022		December 31, 2021
Assets	Assets	(Unaudited)				Assets	(Unaudited)
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	163,505	$	170,725	Cash and cash equivalents	$	152,191	$	130,756
Accounts receivable, net of allowance for doubtful accounts of $17,124 and $20,843 as of March 31, 2021 and December 31, 2020, respectively		275,933		314,305
Accounts receivable, net of allowance for doubtful accounts of $11,566 and $16,470 as of March 31, 2022 and December 31, 2021, respectively						Accounts receivable, net of allowance for doubtful accounts of $11,566 and $16,470 as of March 31, 2022 and December 31, 2021, respectively	293,462		328,733
Inventories	Inventories	32,457		35,075		Inventories	37,144		37,662
Prepaid expenses and other current assets	Prepaid expenses and other current assets	118,082		116,581		Prepaid expenses and other current assets	79,548		80,110
Total current assets	Total current assets	589,977		636,686		Total current assets	562,345		577,261
Property, plant and equipment, net of accumulated depreciation of $369,899 and $362,029 as of March 31, 2021 and December 31, 2020, respectively		552,462		590,272
Property, plant and equipment, net of accumulated depreciation of $346,271 and $336,500 as of March 31, 2022 and December 31, 2021, respectively						Property, plant and equipment, net of accumulated depreciation of $346,271 and $336,500 as of March 31, 2022 and December 31, 2021, respectively	388,367		415,384
Operating lease assets	Operating lease assets	286,368		289,504		Operating lease assets	263,980		271,935
Goodwill	Goodwill	534,211		534,088		Goodwill	540,894		533,709
Intangible assets, net	Intangible assets, net	797,862		824,650		Intangible assets, net	694,521		713,153
Deferred tax assets	Deferred tax assets	103,269		90,240		Deferred tax assets	25,802		32,399
Other assets		190,302		143,474
Pension and other assets						Pension and other assets	307,534		284,228
Total assets	Total assets	$	3,054,451	$	3,108,914	Total assets	$	2,783,443	$	2,828,069

Liabilities and equity	Liabilities and equity					Liabilities and equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	$	377,370	$	378,246	Accounts payable and accrued liabilities	$	346,368	$	357,014
Deferred revenue	Deferred revenue	190,699		186,007		Deferred revenue	185,579		184,838
Current portion of long-term debt	Current portion of long-term debt	81,057		128,445		Current portion of long-term debt	62,860		69,456
Other current liabilities	Other current liabilities	48,396		48,602		Other current liabilities	46,997		51,218
Total current liabilities	Total current liabilities	697,522		741,300		Total current liabilities	641,804		662,526
Long-term debt	Long-term debt	888,086		890,323		Long-term debt	783,010		769,446
Convertible debt	Convertible debt	394,146		581,405		Convertible debt	396,297		393,354
Deferred tax liabilities	Deferred tax liabilities	16,280		6,855		Deferred tax liabilities	11,711		28,812
Pension and other postretirement benefit obligations	Pension and other postretirement benefit obligations	95,542		99,765		Pension and other postretirement benefit obligations	69,687		71,937
Long-term operating lease liabilities	Long-term operating lease liabilities	271,496		274,460		Long-term operating lease liabilities	247,487		254,969
Other long-term liabilities	Other long-term liabilities	151,388		151,847		Other long-term liabilities	118,721		117,410
Total noncurrent liabilities	Total noncurrent liabilities	1,816,938		2,004,655		Total noncurrent liabilities	1,626,913		1,635,928
Total liabilities	Total liabilities	2,514,460		2,745,955		Total liabilities	2,268,717		2,298,454
Redeemable noncontrolling interests		(1,661)		(1,150)
Commitments and contingent liabilities (See Note 12)		0		0

Commitments and contingent liabilities (See Note 11)						Commitments and contingent liabilities (See Note 11)	0		0
Equity	Equity					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 March 31, 2021 and December 31, 2020		0		0
Common stock of $0.01 par value per share, 2,000,000,000 shares authorized, 144,443,628 shares issued and 142,541,701 shares outstanding at March 31, 2021; 139,494,741 shares issued and 138,102,993 shares outstanding at December 31, 2020		1,444		1,395
Treasury stock at cost, 1,901,927 shares and 1,391,748 shares at March 31, 2021 and December 31, 2020, respectively		(6,612)		(4,903)
Preferred stock, $0.01 par value per share, 300,000 shares authorized, of which 150,000 shares are designated as Series A Junior Participating Preferred Stock, none of which were issued and outstanding at March 31, 2022 and December 31, 2021						Preferred stock, $0.01 par value per share, 300,000 shares authorized, of which 150,000 shares are designated as Series A Junior Participating Preferred Stock, none of which were issued and outstanding at March 31, 2022 and December 31, 2021	—		—
Common stock, $0.01 par value per share, 2,000,000,000 shares authorized, 151,016,595 shares issued and 147,828,491 shares outstanding at March 31, 2022; 144,667,389 shares issued and 142,299,399 shares outstanding at December 31, 2021						Common stock, $0.01 par value per share, 2,000,000,000 shares authorized, 151,016,595 shares issued and 147,828,491 shares outstanding at March 31, 2022; 144,667,389 shares issued and 142,299,399 shares outstanding at December 31, 2021	1,510		1,446
Treasury stock, at cost, 3,188,104 shares and 2,367,990 shares at March 31, 2022 and December 31, 2021, respectively						Treasury stock, at cost, 3,188,104 shares and 2,367,990 shares at March 31, 2022 and December 31, 2021, respectively	(11,290)		(8,151)
Additional paid-in capital	Additional paid-in capital	1,421,977		1,103,881		Additional paid-in capital	1,397,516		1,400,206
Accumulated deficit	Accumulated deficit	(928,753)		(786,437)		Accumulated deficit	(924,366)		(921,399)
Accumulated other comprehensive income	Accumulated other comprehensive income	53,596		50,173		Accumulated other comprehensive income	51,607		59,998
Total Gannett stockholders equity						Total Gannett stockholders equity	514,977		532,100
Noncontrolling interests						Noncontrolling interests	(251)		(2,485)
Total equity	Total equity	541,652		364,109		Total equity	514,726		529,615
Total liabilities and equity	Total liabilities and equity	$	3,054,451	$	3,108,914	Total liabilities and equity	$	2,783,443	$	2,828,069

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

Net loss attributable to noncontrolling interests(a)

Comprehensive loss attributable to noncontrolling interests(a)

(a) For the three months ended March 31, 2022, there were no redeemable noncontrolling interests included in Net loss attributable to noncontrolling interests. For the three months ended March 31, 2021, Net loss attributable to noncontrolling interests included $385 thousand relating to redeemable noncontrolling interests.

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

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Other comprehensive loss, net(b)

Non-controlling interest(a)

Other comprehensive income, net(b)

~~The accompanying notes~~(a) Excludes Redeemable noncontrolling interests which are ~~an integral part of these condensed consolidated financial statements.~~

reflected in temporary equity.

(b)For the three months ended March 31, 2022 and 2021, Other comprehensive income is net of income tax benefit of $0.5 million and income tax provision of $0.2 million, respectively.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — Description of ~~Business~~business and basis of presentation

Description of ~~Business~~business

Gannett Co., Inc. ("Gannett", "we", "us", "our", or the "Company") is a subscription-led and ~~digitally focused~~digitally-focused media and marketing solutions company committed to empowering communities to thrive. Gannett operates a scalable, data-driven media platform that aligns with consumer and digital marketing trends. We aim to be the ~~premiere~~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~~We expect the execution of this strategy ~~is expected~~ to ~~allow the Company~~enable us to continue ~~its~~our evolution from a more traditional print media business to a ~~digitally focused~~digitally-focused content platform.

Our current portfolio of media assets includes USA TODAY, local media organizations in 4645 states in the U.S., and Newsquest, a ~~wholly owned~~wholly-owned subsidiary operating in the United Kingdom (the "U.K.") with more than ~~120~~150 local media brands. ~~Gannett~~We also ~~owns the~~operate a digital marketing ~~services companies ReachLocal, Inc. ("ReachLocal"), UpCurve, Inc. ("UpCurve"),~~solutions company, branded LOCALiQ, which provides a cloud-based platform of products to enable small and ~~WordStream, Inc. ("WordStream"), which are marketed under the LOCALiQ brand, and runs~~medium-sized businesses to accomplish their marketing goals. In addition, we run what we believe is the largest media-owned events business in the U.S., USA TODAY NETWORK Ventures.

Through USA TODAY, our local property network, and Newsquest, ~~Gannett delivers~~we deliver high-quality, trusted content with a commitment to balanced, unbiased journalism, where and when consumers want to engage with it on virtually any device or platform. Additionally, the Company has strong relationships with hundreds of thousands of local and national businesses in both our U.S. and U.K. markets due to our large local and national sales forces and a robust advertising and marketing solutions product suite. The Company reports in 2 ~~segments:~~segments, Publishing and Digital Marketing ~~Solutions ("DMS").~~Solutions. We also have a Corporate and other category that includes activities not directly attributable to a specific reportable segment and includes broad corporate functions such as legal, human resources, accounting, analytics, finance, and marketing. A full description of our reportable segments is included in Note 1312 — Segment reporting in the notes to the condensed consolidated financial statements.

Impacts of the COVID-19 pandemic

As a result of the COVID-19 pandemic, we initially experienced a significant decline in Advertising and marketing services revenues, which accelerated the secular declines that we continue to experience. We continue to experience ~~decreased demand for our advertising and digital marketing services, commercial print and distribution services, as well as reductions in and~~ constraints on ~~in-person events and~~ the sales of single copy ~~newspapers.~~newspapers, largely tied to reduced business travel and challenges in permitting and attendance at in-person events. While we have seen COVID-19 related operating trends improve since the second quarter of 2020, which represents the quarter that was most significantly impacted by the pandemic, we expect that the COVID-19 pandemic, and the resulting changes in consumer behavior, will continue to have a slight negative impact on our business and results of operations in the ~~near-term.~~

~~As a result, we have implemented,~~near-term, including lower revenues associated with events and ~~continue~~lower sales of single copy newspapers. If the COVID-19 pandemic were to ~~implement,~~revert to conditions that existed during 2020, including measures to ~~reduce costs~~help mitigate and ~~preserve cash flow. These measures include, evaluating and applying for all governmental relief programs for which we are eligible, including~~control the ~~Paycheck Protection Program ("PPP"), suspension~~spread of the ~~quarterly dividend~~virus, we would expect to experience further negative impacts in Advertising 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. Refer to Note 15 — Subsequent events for further discussion of the PPP.marketing services and Circulation revenues.

Basis of presentation

~~Our~~The condensed consolidated financial statements included in this report are unaudited; however, in the opinion of management, they contain all of the adjustments (consisting of those of a normal, recurring nature) considered necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") applicable to interim periods. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company consolidates entities that it controls due to ownership of a majority voting interest. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Use of estimates

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

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

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property, plant and equipment and intangible ~~assets and the mark to market of the conversion feature associated with the convertible debt.~~

~~Recent accounting pronouncements adopted~~

~~Simplifying the Accounting for Income Taxes~~

In December 2019, the Financial Accounting Standards Board (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. Adopting this guidance allowed us to record a tax benefit for the quarter because year-to-date losses on interim periods are no longer limited to losses annually forecasted.assets.

Recent accounting pronouncements ~~not yet~~ adopted

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

In August 2020, the ~~FASB~~Financial Accounting Standards Board (the "FASB") issued new guidance ("ASU 2020-06") that simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. In addition to eliminating certain accounting models, the guidance amends the disclosures for convertible instruments and earnings-per-share guidance. It also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. This guidance is effective for fiscal years beginning after December 15, ~~2023, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020,~~2021, including interim periods within those fiscal years. The ~~Company is evaluating the impacts that the~~ adoption of ~~ASU 2020-06 will~~this guidance did not have a material impact on ~~our~~the accounting for the Company's $497.1 million in aggregate principal amount of 6.0% Senior Secured Convertible Notes due 2027 issued by the Company on November 17, 2020 (the "2027 Notes"), or the condensed consolidated financial statements.

Reference Rate Reform

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

Disclosures by Business Entities about Government Assistance

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

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

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

NOTE 2 — Revenues

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

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

Three months ended March 31,
In thousands 2021 2020
Print advertising $ 193,196 $ 267,842
Digital advertising and marketing services 195,161 219,168
Total advertising and marketing services 388,357 487,010
Circulation 325,437 374,723
Other 63,290 86,949
Total revenues $ 777,084 $ 948,682

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	Three months ended March 31,
In thousands		2022		2021
Print advertising		$	173,518	$	193,196
Digital advertising and marketing services		201,596		195,161
Total advertising and marketing services		375,114		388,357
Circulation		288,602		325,437
Other		84,361		63,290
Total revenues		$	748,077	$	777,084

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

Deferred revenues

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

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

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

Three months ended March 31, 2021 Three months ended March 31, 2020
In thousands Advertising, Marketing Services, and Other Circulation Total Advertising, Marketing Services, and Other Circulation Total
Beginning balance $ 51,686 $ 134,321 $ 186,007 $ 67,543 $ 151,280 $ 218,823
Cash receipts 60,117 284,175 344,292 86,918 307,502 394,420
Revenue recognized (58,953) (280,647) (339,600) (79,467) (308,167) (387,634)
Ending balance $ 52,850 $ 137,849 $ 190,699 $ 74,994 $ 150,615 $ 225,609


	Three months ended March 31, 2022						Three months ended March 31, 2021
In thousands	Advertising, marketing services, and other		Circulation		Total		Advertising, marketing services, and other		Circulation		Total
Beginning balance	$	60,665	$	124,173	$	184,838	$	51,686	$	134,321	$	186,007
Acquisition	—		2,388		2,388		—		—		—
Cash receipts	76,125		237,860		313,985		60,117		284,175		344,292
Revenue recognized	(75,463)		(240,169)		(315,632)		(58,953)		(280,647)		(339,600)
Ending balance	$	61,327	$	124,252	$	185,579	$	52,850	$	137,849	$	190,699

NOTE 3 ~~— 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 transfer of title or purchase option reasonably certain of exercise.

~~As of March 31, 2021, our condensed consolidated balance sheets included $286.4 million of operating lease right-to-use assets, $42.6 million of short-term operating lease liabilities included in~~ ~~Other current liabilities, and $271.5 million of long-term operating lease liabilities.~~

~~The components of lease expense are as follows:~~

Three months ended March 31,
In thousands 2021 2020
Operating lease cost (a)
$ 23,755 $ 23,884
Short-term lease cost (b)
142 3,142
Net lease cost $ 23,897 $ 27,026

~~(a)Includes variable lease costs of $3.1 million and $4.3 million, respectively, and sublease income of $1.2 million and $1.1 million, respectively, for the three months ended March 31, 2021 and 2020.~~

~~(b)Excluding expenses relating to leases with a lease term of one month or less.~~

~~Future minimum lease payments under non-cancellable leases are as follows:~~

In thousands
Year ended
December 31, (a)
2021 (excluding the three months ended March 31, 2021) $ 55,719
2022 77,522
2023 64,681
2024 57,723
2025 50,584
Thereafter 216,335
Total future minimum lease payments 522,564
Less: Imputed interest (208,452)
Total $ 314,112

~~(a)Operating lease payments exclude $14.9 million of legally binding minimum lease payments for leases signed but not yet commenced.~~

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~~Supplemental information related to leases is as follows:~~

Three months ended March 31,
In thousands, except lease term and discount rate 2021 2020
Cash paid for amounts included in the measurement of operating lease liabilities $ 21,935 $ 16,771
Right-of-use assets obtained in exchange for operating lease obligations 9,053 1,238
Loss on sale and leaseback transactions, net 406 0
As of March 31,
2021 2020
Weighted-average remaining lease term (in years) 7.6 8.1
Weighted-average discount rate 12.90 % 12.45 %

~~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 vary based on the nature of the underlying trade receivables. Due to the short-term nature of our circulation receivables, the Company reserves all receivables aged over 90 days.

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The following table presents changes in the allowance for doubtful ~~accounts for the three months ended March 31, 2021 and 2020:~~accounts:


		Three months ended March 31,					Three months ended March 31,
In thousands	In thousands	2021		2020		In thousands	2022		2021
Beginning balance	Beginning balance	$	20,843	$	19,923	Beginning balance	$	16,470	$	20,843
Current period provision	Current period provision	(2,171)		5,143		Current period provision	(2,403)		(2,171)
Write-offs charged against the allowance	Write-offs charged against the allowance	(2,805)		(5,347)		Write-offs charged against the allowance	(3,868)		(2,805)
Recoveries of amounts previously written-off	Recoveries of amounts previously written-off	1,206		918		Recoveries of amounts previously written-off	942		1,206
Other						Other	425		51

Foreign currency		51		(151)
Ending balance	Ending balance	$	17,124	$	20,486	Ending balance	$	11,566	$	17,124

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

For the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, the Company recorded a benefit of $2.4 million and $2.2 million ~~reversal and $5.1 million of expense, respectively,~~ in bad debt expense, ~~which~~respectively. Bad debt expense is included in Selling, general and administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss). For the three months ended March 31, 2022 and 2021, the Company recorded ~~a reduction~~reductions to bad debt expense due to a decrease in required ~~reserves. The reduction in required~~ reserves ~~is a result of lower volume of accounts receivable~~ due to ~~seasonality, higher recoveries, and~~ lower ~~write-offs during the three months ended March 31, 2021 compared to the corresponding prior year period.~~

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receivable balances.

NOTE 54 — Goodwill and intangible assets

Goodwill and intangible assets consisted of the following:


		March 31, 2021						December 31, 2020							March 31, 2022						December 31, 2021
In thousands	In thousands	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount		In thousands	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Finite-lived intangible assets:	Finite-lived intangible assets:													Finite-lived intangible assets:
Advertiser relationships	Advertiser relationships	$	459,570	$	123,338	$	336,232	$	460,331	$	112,468	$	347,863	Advertiser relationships	$	455,522	$	163,594	$	291,928	$	453,038	$	153,988	$	299,050
Other customer relationships	Other customer relationships	102,946		26,642		76,304		102,925		23,682		79,243		Other customer relationships	102,798		37,920		64,878		102,486		35,237		67,249
Subscriber relationships	Subscriber relationships	255,598		78,558		177,040		255,702		71,271		184,431		Subscriber relationships	253,890		106,986		146,904		254,162		99,905		154,257
Other intangible assets	Other intangible assets	68,687		31,688		36,999		68,687		26,982		41,705		Other intangible assets	68,780		47,519		21,261		68,690		44,291		24,399
Sub-total	Sub-total	$	886,801	$	260,226	$	626,575	$	887,645	$	234,403	$	653,242	Sub-total	$	880,990	$	356,019	$	524,971	$	878,376	$	333,421	$	544,955
Indefinite-lived intangible assets:	Indefinite-lived intangible assets:													Indefinite-lived intangible assets:
Mastheads	Mastheads					171,287						171,408		Mastheads					169,550						168,198
Total intangible assets	Total intangible assets					$	797,862					$	824,650	Total intangible assets					$	694,521					$	713,153

Goodwill	Goodwill					$	534,211					$	534,088	Goodwill					$	540,894					$	533,709

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


In thousands	Severance and ~~Related Costs~~related costs
Beginning balance	$	~~30,943~~12,558
Restructuring provision included in integration and reorganization costs	~~7,097~~5,360
Cash payments	~~(15,702)~~(5,430)
Ending balance	$	~~22,338~~12,488

Three months ended March 31,
In thousands 2021 2020
Publishing $ 547 $ 839
Digital Marketing Solutions 223 4
Corporate and other 5,537 247
Total $ 6,307 $ 1,090

The Company's debt consisted of the following:


	March 31, 2022								December 31, 2021
(in millions)	Principal balance		Unamortized original issue discount		Unamortized deferred financing costs		Carrying value		Principal balance		Unamortized original issue discount		Unamortized deferred financing costs		Carrying value
New Senior Secured Term Loan	$	504.6	$	(12.0)	$	(2.4)	$	490.2	$	480.1	$	(14.1)	$	(2.7)	$	463.3
2026 Senior Notes	377.5		(12.2)		(9.6)		355.7		400.0		(13.7)		(10.7)		375.6
2027 Notes	485.3		(90.4)		(1.9)		393.0		485.3		(93.2)		(2.0)		390.1
2024 Notes	3.3		—		—		3.3		3.3		—		—		3.3
Total debt	$	1,370.7	$	(114.6)	$	(13.9)	$	1,242.2	$	1,368.7	$	(121.0)	$	(15.4)	$	1,232.3
Less: Current portion of long-term debt	$	(62.9)	$	—	$	—	$	(62.9)	$	(69.5)	$	—	$	—	$	(69.5)
Non-current portion of long-term debt	$	1,307.8	$	(114.6)	$	(13.9)	$	1,179.3	$	1,299.2	$	(121.0)	$	(15.4)	$	1,162.8

The New Senior Secured Term Loan bears interest at ~~the~~a per annum rate equal to Adjusted Term SOFR (which shall not be less than 0.50% per annum) plus a margin of ~~the London Interbank Offered Rate~~5.00% or an alternate base rate (which shall not be less than 1.50% per annum) plus a margin equal to ~~7.00% per annum or an alternate base rate plus~~4.00%.Loans under the New Senior Secured Term Loan may be prepaid, at the option of Gannett Holdings, at any time without premium, except a ~~margin~~premium equal to ~~6.00% per annum. Accordingly,~~1.00% of the aggregate principal amount of the loans being repaid in connection with certain refinancing or repricing events that reduce the all-in yield applicable to the loans and occur on or before October 15, 2022. In addition, we are required to ~~dedicate a substantial portion of cash flow from operations to fund interest payments.~~

~~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 Company's five-year, senior-secured 11.5% term loan facility with Apollo Capital Management, L.P. (the "Acquisition Term Loan") and to pay fees and expenses incurred to obtain the 5-Year Term Loan.

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 $10.2 million, that 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 months ended March 31, 2021.

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-YearNew Senior Secured Term Loan from time to time with (i) the proceeds of non-ordinary course asset sales and casualty and condemnation events, (ii) the proceeds of indebtedness ~~that is~~ not ~~otherwise~~ permitted under the ~~5-Year~~New Senior Secured Term Loan, and (iii) the aggregate amount of cash and cash equivalents on hand at the Company and its restricted subsidiaries in excess of $100 million at the end of each fiscal ~~year.~~year of the Company. The ~~5-Year~~New Senior Secured Term Loan amortizes in equal quarterly installments, beginning June 30, 2022, at a rate equal to 10.00% per annum (or, if the ratio of debt secured on an equal basis with the New Senior Secured Term Loan less unrestricted cash of the Company and its restricted subsidiaries to Consolidated EBITDA (as such terms are defined in the New Senior Secured Term Loan ) (such ratio, the "First Lien Net Leverage Ratio"), for the most recently ended period of four consecutive fiscal quarters is ~~subject~~equal to or less than 1.20 to 1.00, 5.00% per annum). All obligations under the New Senior Secured Term Loan are secured by all or substantially all of the assets of the Company and the wholly-owned domestic subsidiaries of the Company (the "New Senior Secured Term Loan Guarantors"). The obligations of Gannett Holdings under the New Senior Secured Term Loan are guaranteed on a senior secured basis by the Company and the New Senior Secured Term Loan Guarantors.

customary exceptions, including an exception that permits dividends and repurchases of outstanding junior debt or equity in (i) an amount of up to $25 million per fiscal quarter if the First Lien Net Leverage Ratio for such fiscal quarter is equal to or less than 2.00 to 1.00, (ii) an amount of up to $50 million per fiscal quarter if the First Lien Net Leverage Ratio for such fiscal quarter is equal to or less than 1.50 to 1.00, and (iii) an unlimited amount if First Lien Net Leverage Ratio for such fiscal quarter is equal to or less than 1.00 to 1.00. As of March 31, ~~2021,~~2022, the Company iswas in compliance with all of the covenants and obligations under the ~~5-Year~~New Senior Secured Term Loan.

2027 Notes Indenture) occurs, the Company will be required to offer to repurchase the 2027 Notes at a repurchase price of 110% of the principal amount thereof.

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

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 wasequity component is 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~~As of March 31, 2022 and December 31, 2021, the ~~fair value~~amount of the ~~derivative liability~~conversion feature recorded in Additional paid-in capital was $279.6 million.

February 26, 2021 December 31, 2020
Annual volatility 70.0 % 70.0 %
Discount rate 12.2 % 9.3 %
Stock price $ 4.95 $ 3.36

Three months ended March 31,
In thousands 2021 2020
Loss before income taxes $ (151,810) $ (71,627)
(Benefit) provision for income taxes (9,109) 8,979
Effective tax rate 6.0 % ***

Three months ended March 31,
In thousands 2021 2020
Net loss attributable to Gannett $ (142,316) $ (80,152)
Basic weighted average shares outstanding 134,075 130,568
Diluted weighted average shares outstanding 134,075 130,568

Three months ended March 31,
In thousands 2021 2020
Warrants 845 1,362
Stock options 6,068 6,068
Restricted stock grants (a)
10,811 9,494
2027 Notes (b)
99,419 0

~~(a)Includes Restricted stock awards ("RSA"), Restricted stock units ("RSU") and Performance stock units ("PSU").~~

~~(b)Represents the total number of shares that would be convertible at March 31, 2021 as stipulated in the Indenture.~~

~~Restricted stock awards~~

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 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 which 150,000 shares have been designated as Series A Junior Participating Preferred Stock, none of which are outstanding. There were 0 issuances of preferred stock during the three months ended March 31, 2021.

Three months ended March 31, 2021 Three months ended March 31, 2020
In thousands Pension and Postretirement Plans Foreign Currency Translation

Total Pension and Postretirement Plans Foreign Currency Translation Total
Beginning balance $ 40,441 $ 9,732 $ 50,173 $ 936 $ 7,266 $ 8,202
Other comprehensive income (loss) before reclassifications 371 3,037 3,408 966 (14,033) (13,067)
Amounts reclassified from accumulated other comprehensive income (loss)(a)(b)
15 0 15 (10) 0 (10)
Net current period other comprehensive income (loss), net of taxes 386 3,037 3,423 956 (14,033) (13,077)
Ending balance $ 40,827 $ 12,769 $ 53,596 $ 1,892 $ (6,767) $ (4,875)

~~(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.~~

~~(b)Amounts reclassified from accumulated other comprehensive loss are recorded net of tax impacts of $5 thousand and $4 thousand for the three months ended March 31, 2021 and 2020, respectively.~~

~~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 Note 6 — Debt for additional discussion regarding fair value of the New Senior Secured Term Loan, the 2026 Senior Notes, the 2027 Notes ~~in Note 7 — Debt.~~and the 2024 Notes.


	Three months ended March 31,
In thousands		2022			2021
Loss before income taxes		$	(10,709)		$	(151,810)
Benefit for income taxes		(7,607)			(9,109)
Effective tax rate		71.0		%	6.0		%

The benefit for income taxes for the three months ended March 31, 2022 was mainly driven by pre-tax loss and the current year tax benefit from the release of tax reserves, partially offset by the creation of valuation allowances on non-deductible interest expense carryforwards. The provision was calculated using an estimated annual effective tax rate of 41.25%. The estimated annual effective tax rate is based on the projected tax expense for the full year. The estimated annual effective tax rate isprincipally impacted by the creation of valuation allowances on non-deductible interest expense carryforwards, the global intangible low taxed income inclusion from our wholly-owned U.K. subsidiary, and state and foreign income tax expense.

The total amount of unrecognized tax benefits that, if recognized, may impact the effective tax rate was approximately $49.0 million and $45.0 million as of March 31, 2022 and December 31, 2021, respectively. The amount of accrued interest and penalties payable related to unrecognized tax benefits was $3.8 million and $3.7 million as of March 31, 2022 and December 31, 2021, respectively.


	Three months ended March 31,
In thousands, except per share data		2022		2021
Net loss attributable to Gannett		$	(2,967)	$	(142,316)



Basic weighted average shares outstanding		136,425		134,075



Diluted weighted average shares outstanding		136,425		134,075

Loss per share attributable to Gannett - basic		$	(0.02)	$	(1.06)
Loss per share attributable to Gannett - diluted		$	(0.02)	$	(1.06)


	Three months ended March 31,
In thousands		2022	2021
Warrants		845	845
Stock options		6,068	6,068
Restricted stock grants (a)		12,403	10,811
2027 Notes (b)		97,057	99,419

(a)Includes Restricted stock awards ("RSAs"), Restricted stock units ("RSUs") and Performance stock units ("PSUs").

(b)Represents the total number of shares that would be convertible at March 31, 2022 and 2021 as stipulated in the 2027 Notes Indenture.

between the total number of shares that would be convertible at March 31, 2022 and the total number of shares issuable assuming the maximum increase in the conversion rate.

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 which 150,000 shares have been designated as Series A Junior Participating Preferred Stock, none of which are outstanding. There were no issuances of preferred stock during the three months ended March 31, 2022.

Stock Repurchase Program


	Three months ended March 31, 2022						Three months ended March 31, 2021
In thousands	Pension and postretirement plans		Foreign currency translation		Total		Pension and postretirement plans		Foreign currency translation		Total
Beginning balance	$	50,870	$	9,128	$	59,998	$	40,441	$	9,732	$	50,173
Other comprehensive income (loss) before reclassifications	(811)		(7,556)		(8,367)		371		3,037		3,408
Amounts reclassified from accumulated other comprehensive income (loss)(a)(b)	(24)		—		(24)		15		—		15
Net current period other comprehensive income (loss), net of taxes	(835)		(7,556)		(8,391)		386		3,037		3,423
Ending balance	$	50,035	$	1,572	$	51,607	$	40,827	$	12,769	$	53,596

(a)This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 7 — Pensions and other postretirement benefit plans.

(b)Amounts reclassified from accumulated other comprehensive loss are recorded net of tax impacts of $8 thousand and $5 thousand for the three months ended March 31, 2022 and 2021, respectively.

We assumed responsibility for certain environmental contingencies in connection with our acquisition of Legacy Gannett. More specifically, in March 2011, the Advertiser Company ("Advertiser"), a subsidiary that publishes the ~~Montgomery Advertiser~~, was notified by the U.S. Environmental Protection Agency ("EPA") that it had been identified as a potentially responsible party ("PRP") for the investigation and remediation of groundwater contamination in downtown Montgomery, Alabama. The Advertiser is a member of the Downtown Environmental Alliance, which has agreed to jointly fund and conduct all required investigation and remediation. In 2016, the Advertiser and other members of the Downtown Environmental Alliance reached a settlement with the EPA regarding the costs the EPA spent to investigate the site. The EPA has transferred responsibility for oversight of the site to the Alabama Department of Environmental Management, which has approved the work plan for the additional site investigation that is currently underway. The Advertiser's final costs cannot be determined until the investigation is complete, a determination is made on whether any remediation is necessary, and contributions from other PRPs are finalized. In addition, neither our potential loss nor a range of potential loss in connection with the Advertiser's final costs can be estimated until such time as we can reasonably make such estimate based on the foregoing factors.

~~Other litigation~~

~~Redeemable noncontrolling interests~~

•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 ~~distributing our publications on our digital platforms, and~~ Other revenues, mainly from commercial printing, distribution arrangements, revenues from our events business, digital content syndication and ~~distribution arrangements.~~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.~~branded LOCALiQ. The results of this segment include Advertising and marketing services revenues through multiple services, including search advertising, display advertising, search optimization, social media, website development, web presence products, customer relationship management, ~~Google-suite offerings,~~ and software-as-a-service solutions. ~~Other revenues in our Digital Marketing Solutions segment are derived from cloud offerings and software licensing.~~

Three months ended March 31, 2021
In thousands Publishing Digital Marketing Solutions Corporate and other Intersegment Eliminations Consolidated
Advertising and marketing services - external sales $ 286,454 $ 101,376 $ 527 $ — $ 388,357
Advertising and marketing services - intersegment sales 27,856 — — (27,856) —
Circulation 325,436 0 1 — 325,437
Other 59,839 905 2,546 — 63,290
Total operating revenues $ 699,585 $ 102,281 $ 3,074 $ (27,856) $ 777,084
Adjusted EBITDA (non-GAAP basis) $ 102,208 $ 9,172 $ (10,915) $ — $ 100,465


	Three months ended March 31, 2022
In thousands	Publishing			Digital Marketing Solutions			Corporate and other		Intersegment Eliminations		Consolidated
Advertising and marketing services - external sales	$	265,405		$	109,709		$	—	$	—	$	375,114
Advertising and marketing services - intersegment sales	33,357			—			—		(33,357)		—
Circulation	288,602			—			—		—		288,602
Other	83,055			—			1,306		—		84,361
Total operating revenues	$	670,419		$	109,709		$	1,306	$	(33,357)	$	748,077

Adjusted EBITDA (non-GAAP basis)	$	68,648		$	11,180		$	(15,657)	$	—	$	64,171
Adjusted EBITDA margin (non-GAAP basis)	10.2		%	10.2		%	NM		NM		8.6		%

NM indicates not meaningful.

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		Three months ended March 31, 2020											Three months ended March 31, 2021
In thousands	In thousands	Publishing		Digital Marketing Solutions		Corporate and other		Intersegment Eliminations		Consolidated		In thousands	Publishing			Digital Marketing Solutions			Corporate and other		Intersegment Eliminations		Consolidated
Advertising and marketing services - external sales	Advertising and marketing services - external sales	$	369,878	$	116,283	$	849	$	—	$	487,010	Advertising and marketing services - external sales	$	286,454		$	101,376		$	527	$	—	$	388,357
Advertising and marketing services - intersegment sales	Advertising and marketing services - intersegment sales	33,758		—		—		(33,758)		—		Advertising and marketing services - intersegment sales	27,856			—			—		(27,856)		—
Circulation	Circulation	374,720		0		3		—		374,723		Circulation	325,436			—			1		—		325,437
Other	Other	79,794		4,998		2,157		—		86,949		Other	59,839			905			2,546		—		63,290
Total operating revenues	Total operating revenues	$	858,150	$	121,281	$	3,009	$	(33,758)	$	948,682	Total operating revenues	$	699,585		$	102,281		$	3,074	$	(27,856)	$	777,084

Adjusted EBITDA (non-GAAP basis)	Adjusted EBITDA (non-GAAP basis)	$	110,928	$	7,887	$	(19,746)	$	—	$	99,069	Adjusted EBITDA (non-GAAP basis)	$	102,208		$	9,172		$	(10,915)	$	—	$	100,465
Adjusted EBITDA margin (non-GAAP basis)												Adjusted EBITDA margin (non-GAAP basis)	14.6		%	9.0		%	NM		NM		12.9		%

NM indicates not meaningful.

The table below shows the reconciliation of Net loss attributable to Gannett to Adjusted ~~EBITDA:~~

Three months ended March 31,
In thousands 2021 2020
Net loss attributable to Gannett $ (142,316) $ (80,152)
(Benefit) provision for income taxes (9,109) 8,979
Interest expense 39,503 57,899
Loss on early extinguishment of debt 19,401 805
Non-operating pension income (23,878) (18,489)
Loss on Convertible notes derivative 126,600 0
Other non-operating (income) expense, net (1,875) 1,590
Depreciation and amortization 58,103 78,024
Integration and reorganization costs 13,404 28,254
Other operating expenses 10,576 5,969
Asset impairments 833 0
Net loss on sale or disposal of assets 4,745 657
Share-based compensation expense 3,423 11,577
Other items 1,055 3,956
Adjusted EBITDA (non-GAAP basis) $ 100,465 $ 99,069
Net loss attributable to Gannett margin (18.3) % (8.4) %
Adjusted EBITDA margin (non-GAAP basis) 12.9 % 10.4 %
EBITDA and Net loss attributable to Gannett margin to Adjusted EBITDA margin:


	Three months ended March 31,
In thousands		2022			2021
Net loss attributable to Gannett		$	(2,967)		$	(142,316)
Benefit for income taxes		(7,607)			(9,109)
Interest expense		26,006			39,503
Loss on early extinguishment of debt		2,743			19,401
Non-operating pension income		(18,213)			(23,878)
Loss on convertible notes derivative		—			126,600
Depreciation and amortization		47,783			58,103
Integration and reorganization costs		11,398			13,404
Other operating expenses		1,102			10,576
Asset impairments		854			833

(Gain) loss on sale or disposal of assets, net		(2,804)			4,745
Share-based compensation expense		3,393			3,423
Other Items		2,483			(820)
Adjusted EBITDA (non-GAAP basis)		$	64,171		$	100,465
Net loss attributable to Gannett margin		(0.4)		%	(18.3)		%
Adjusted EBITDA margin (non-GAAP basis)		8.6		%	12.9		%

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~~provision (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.

NOTE 1413 — 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 is held 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.

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The following table presents a reconciliation of cash, cash equivalents and restricted cash:


		Three months ended March 31,					March 31,
In thousands	In thousands	2021		2020		In thousands	2022		2021
Cash and cash equivalents	Cash and cash equivalents	$	163,505	$	199,651	Cash and cash equivalents	$	152,191	$	163,505
Restricted cash included in other current assets		8,999		11,028
Restricted cash included in investments and other assets		23,669		21,930
Restricted cash included in prepaid expenses and other current assets						Restricted cash included in prepaid expenses and other current assets	1,105		8,999
Restricted cash included in other assets						Restricted cash included in other assets	11,722		23,669
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	196,173	$	232,609	Total cash, cash equivalents and restricted cash	$	165,018	$	196,173

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

A breakout of Accounts payable and accrued liabilities is presented below:

~~NOTE 15 — Subsequent events~~

In connection with the CARES Act, subsequent to March 31, 2021, the Company has received approval for approximately $16.2 million in PPP funding in support of certain of our locations that were meaningfully affected by the COVID-19 pandemic. Management intends to apply for forgiveness of the PPP loans in accordance with applicable guidelines.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations and quantitative and qualitative disclosures should be read in conjunction with our unaudited condensed consolidated financial statements and related notes and with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, 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 statements that 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, Risk Factors, and elsewhere throughout this Quarterly Report, as well as the factors described in our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, 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.

~~Table of Contents~~

OVERVIEW

We are a subscription-led and ~~digitally focused~~digitally-focused media and marketing solutions company committed to empowering communities to thrive. Gannett operates a scalable, data-driven media platform that aligns with consumer and digital marketing trends. We aim to be the ~~premiere~~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~~We expect the execution of this strategy ~~is expected~~ to ~~allow~~enable us to continue our evolution from a more traditional print media business to a ~~digitally focused~~digitally-focused content platform.

Our current portfolio of media assets includes USA TODAY, local media organizations in 4645 states in the U.S., and Newsquest, a ~~wholly owned~~wholly-owned subsidiary operating in the United Kingdom ("U.K.") with more than ~~120~~150 local media brands. We also ~~own the~~operate a digital marketing ~~services companies ReachLocal, Inc.~~solutions company, branded LOCALiQ, which provides a cloud-based platform of products to enable small and medium-sized businesses ("~~ReachLocal"), UpCurve, Inc. ("UpCurve"), and WordStream, Inc. ("WordStream"~~SMBs") ~~which are marketed under the LOCALiQ brand, and~~to accomplish their marketing goals. In addition, we run what we believe is the largest media-owned events business in the U.S., USA TODAY NETWORK Ventures.

Through USA TODAY, our local property network, and Newsquest, we deliver high-quality, trusted content with a commitment to balanced, unbiased journalism, where and when consumers want to engage with it on virtually any device or platform. Additionally, 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~~seek to optimize our print operations to efficiently manage for this declining print audience. We are focused on converting ~~the~~a growing ~~digital~~digitally-focused audience into digital-only subscribers to our publications.

•~~Small and medium-sized businesses ("SMBs")~~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~~digital marketing services 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. However, the COVID-19 pandemic continues to negatively impact our ability to secure necessary permitting for in-person events and consumers' desire to attend or participate in live events.

•Newsprint availability remains constrained globally due to manufacturing facility closures and ongoing capacity shifts between newsprint and specialty paper grades. Further, supply chain issues have challenged and continue to challenge deliveries, resulting in significant delays, although we do not anticipate that this will impact our print operations. Inflationary pressures, in particular energy and fuel, are increasing the overall cost of newsprint.

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Recent Developments

Environmental, Social and Governance Initiatives

As a leading media organization, our longstanding corporate social responsibility position is driven by our deep commitment to our communities. We are dedicated to ensuring that we have mindful and ethical business practices that positively impact our world. In 2021, we formed an executive-led, cross-functional committee to help deepen our commitment to people, planet, and communities through the formalization of an environmental, social and governance ("ESG") strategy. In early 2022, we published our inaugural 2022 ESG report detailing the alignment of our efforts across our company's corporate social responsibility pillars which are people, planet, and communities, with the U.N. Sustainable Development Goals ("SDG"). The 2022 ESG report reflects an important initial step towards providing increased transparency of Gannett's priorities and measured progress.

We selected Reduced Inequalities, Climate Action, and Peace, Justice & Strong Institutions as our key priorities. We aim to contribute to all 17 U.N. SDGs, but have chosen these three as our key priorities for sustainability where we believe Gannett can help make the most significant impact. Each year we plan to update our progress and share more details about how we are working to achieve our goals.

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 $3.9 million for the three months ended March 31, 2020. There was no impact on reported total Publishing segment or consolidated Circulation revenues.

~~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 three months ended March 31, 2021.

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Integration and reorganization costs

For the three months ended March 31, ~~2021,~~2022, we incurred Integration and reorganization costs of ~~$13.4~~$11.4 million. Of the total costs incurred, $5.4 million ~~$7.1 million~~were related to severance activities and ~~$6.3~~$6.0 million were related to other costs, including those for the purpose of consolidating ~~operations.~~operations, mainly related to systems implementation and outsourcing of corporate functions. For the three months ended March 31, 2021, we incurred Integration and reorganization costs of $13.4 million. Of the total costs incurred, $7.1 million were related to severance activities and $6.3 million were related to other costs, including those for the purpose of consolidating operations, mainly related to outsourcing of corporate functions and systems implementation.

For the three months ended March 31, 2022 and 2021, we ceased operations of four and eight printing operations, respectively, as part of the synergy and ongoing cost reduction programs. As a result, we recognized accelerated depreciation of $4.7 million and $9.2 million during the three months ended March 31, ~~2021.~~

~~For the three months ended March 31, 2020, we incurred Integration~~2022 and ~~reorganization costs of $28.3 million, including $21.2 million related to severance activities and $7.1 million related to other costs, including those for the purpose of consolidating operations.~~

In the three months ended March 31, 2020, we ceased operations of 14 printing operations as part of the ongoing cost reduction programs. As a result, we recognized accelerated depreciation of $24.7 million during the three months ended March 31, 2020.2021, respectively.

Foreign currency

Our U.K. publishing operations are conducted through ~~its~~our Newsquest subsidiary. In addition, ~~our ReachLocal subsidiary has~~we have foreign operations in regions such as Canada, ~~Australia/~~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~~Currency translation fluctuations may impact revenue, expense, and operating income results for our international operations.

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Outlook for ~~2021~~2022

Strategy

Our areas of strategic focus ~~for 2021~~continue to include:

Accelerating digital subscriber growth

The broad reach of our newsroom network, linking leading national journalism at USA TODAY, our local property network in 4645 states in the U.S., and Newsquest in the U.K. with more than ~~120~~150 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~~base. As part of our digital subscriber growth strategy, we expect to ~~do this through expansion of our current subscription products as well as through the~~continue to develop and launch of new digital subscription offerings tailored to specific ~~users.~~topics and audiences and expand the penetration of newer subscription products.

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~~plan to use data and insights to inform new and dynamic advertising products, ~~that~~such as our "freemium" offering to complement our sales structures, which we believe will deliver superior results.

Optimizing our traditional businesses across print and advertising

We ~~will~~plan to continue to drive the profitability of our traditional print operations through the continued evolution of the core print product, economies of scale, process improvements, and ~~optimizations.~~operational focus. We ~~are focused on optimizing~~will continue to evolve our ~~pricing and improving customer service for~~business model, evaluating our print ~~subscribers.~~portfolio and frequencies in alignment with consumer's habits and moving toward a portfolio of products that are in line with our long-term digital subscription strategies. 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.~~

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levels and we will continue to provide products that best serve our readers' and advertisers' needs.

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,~~Through the end of the first quarter of 2022, USA TODAY NETWORK Ventures was able to successfully pivot to holding its events virtually, hosting over 250 events. In addition, we consider it a company-wide priority to explore online gaming and we expect to invest in advertising, marketing, promotions,hosted 25 events and ~~services~~revenues increased 83% compared to the same period in ~~this area.~~the prior year.

Building on our inclusive and diverse culture to center around meaningful purpose, individual growth and customer focus

Inclusion, Diversity and Equity are core pillars of our organization and influence all that we do, from recruiting, development and retention, to day-to-day operations including hiring, onboarding, education, leadership training and professional development. We have published our inclusion goals for 2025 and our ongoing efforts to progress toward them, including an annual workforce diversity report, which was released for the first time in the first quarter of 2021. We believe aligning our culture around empowering our communities to thrive and putting our customers at the center of everything we do will provide the foundation for our broader strategic efforts.

Impacts of the COVID-19 pandemic

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~~As a result, we have implemented, and continue~~pandemic were to ~~implement,~~revert to conditions that existed during 2020, including measures to ~~reduce costs~~help mitigate and ~~preserve cash flow. These measures include, evaluating and applying for all governmental relief programs for which we are eligible, including~~control the ~~Paycheck Protection Program, suspension~~spread of the ~~quarterly dividend~~virus, we would expect to experience further negative impacts in Advertising 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.~~marketing services revenues and Circulation revenues.

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, primarily due to ~~holiday~~fluctuations in advertising volumes tied to the holidays, regional weather and levels of activity in our various markets, some of which have a high degree of seasonal ~~advertising,~~residents and ~~lowest in the first quarter, following the holiday season.~~tourists. 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~~

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RESULTS OF OPERATIONS

Consolidated Summary

A summary of our ~~segment~~consolidated results is presented below:
Three months ended March 31,
In thousands, except per share amounts 2021 2020 Change % Change
Operating revenues:
Publishing $ 699,585 $ 858,150 $ (158,565) (18) %
Digital Marketing Solutions 102,281 121,281 (19,000) (16) %
Corporate and other 3,074 3,009 65 2 %
Intersegment eliminations (27,856) (33,758) 5,902 (17) %
Total operating revenues 777,084 948,682 (171,598) (18) %
Operating expenses:
Publishing $ 657,230 $ 830,530 $ (173,300) (21) %
Digital Marketing Solutions 101,104 122,730 (21,626) (18) %
Corporate and other 38,665 59,002 (20,337) (34) %
Intersegment eliminations (27,856) (33,758) 5,902 (17) %
Total operating expenses 769,143 978,504 (209,361) (21) %
Operating income (loss) 7,941 (29,822) 37,763 ***
Non-operating expenses 159,751 41,805 117,946 ***
Loss before income taxes (151,810) (71,627) (80,183) ***
(Benefit) provision for income taxes (9,109) 8,979 (18,088) ***
Net loss $ (142,701) $ (80,606) $ (62,095) 77 %
Net loss attributable to redeemable noncontrolling interests (385) (454) 69 (15) %
Net loss attributable to Gannett $ (142,316) $ (80,152) $ (62,164) 78 %
Loss per share attributable to Gannett - basic $ (1.06) $ (0.61) $ (0.45) 74 %
Loss per share attributable to Gannett - diluted $ (1.06) $ (0.61) $ (0.45) 74 %

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


	Three months ended March 31,
In thousands, except per share amounts				Change
		2022		2021		$		%
Operating revenues:
Local and national print		$	102,744	$	117,399	(14,655)		(12)	%
Classified print		70,774		75,797		(5,023)		(7)	%
Print advertising		173,518		193,196		(19,678)		(10)	%

Digital media		78,771		80,488		(1,717)		(2)	%
Digital marketing services (a)		108,991		101,464		7,527		7	%
Digital classified		13,834		13,209		625		5	%
Digital advertising and marketing services		201,596		195,161		6,435		3	%

Advertising and marketing services		375,114		388,357		(13,243)		(3)	%

Print circulation		258,476		302,258		(43,782)		(14)	%
Digital-only circulation		30,126		23,179		6,947		30	%
Circulation		288,602		325,437		(36,835)		(11)	%

Other		84,361		63,290		21,071		33	%

Total operating revenues		748,077		777,084		(29,007)		(4)	%

Total operating expenses (a)		750,055		769,143		(19,088)		(2)	%
Operating income (loss)		(1,978)		7,941		(9,919)		***
Non-operating expenses		8,731		159,751		(151,020)		(95)	%
Loss before income taxes		(10,709)		(151,810)		141,101		(93)	%
Benefit for income taxes		(7,607)		(9,109)		1,502		(16)	%
Net loss		(3,102)		(142,701)		139,599		(98)	%
Net loss attributable to noncontrolling interests		(135)		(385)		250		(65)	%
Net loss attributable to Gannett		$	(2,967)	$	(142,316)	$	139,349	(98)	%

Loss per share attributable to Gannett - basic		$	(0.02)	$	(1.06)	$	1.04	(98)	%
Loss per share attributable to Gannett - diluted		$	(0.02)	$	(1.06)	$	1.04	(98)	%

(a)

~~Intersegment~~ For the three months ended March 31, 2022 and 2021, amounts are net of intersegment eliminations ~~in the preceding table~~of $33.4 million and $27.9 million, respectively, that represent digital advertising marketing services revenues and expenses associated with products sold by our U.S. local publishing sales teams but ~~which are~~ fulfilled by our DMS segment. When discussing segment results, these revenues and expenses are presented gross but are eliminated in consolidation.

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

Operating revenues

~~Total Operating revenues were $777.1 million for three months ended March 31, 2021, a decrease of $171.6 million compared to the three months ended March 31, 2020.~~

~~For the Publishing segment, Operating revenues decreased $158.6 million compared to the three months ended March 31, 2020, driven by lower~~ Advertising and marketing services revenues ~~of $89.3 million, including~~are generated by both ~~print~~the Publishing and ~~digital, lower Circulation revenues of $49.3 million and lower Other revenues of $20.0 million.~~Digital Marketing Solutions ("DMS") segments. At the Publishing segment, 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 ~~such as search advertising offered through and~~ delivered by our DMS segment. Circulation revenues are derived principally from home delivery and single copy sales of our publications and distribution of our publications on our digital platforms. Other revenues are derived mainly from commercial printing, distribution arrangements, revenues from our events business and digital syndication and affiliate revenues.

~~For~~At the DMS segment, ~~Operating revenues decreased $19.0 million compared to the three months ended March 31, 2020, driven by lower~~ Advertising and marketing services revenues ~~of $14.9 million and lower Other revenues of $4.1 million. Our DMS segment generates Advertising and marketing services revenues~~are generated through multiple services, including search advertising, display advertising, search optimization, social media, website development, web presence products, customer relationship management, ~~Google-suite offerings,~~ and software-as-a-service solutions. ~~Other~~

Circulation revenues, ~~in our DMS~~which are generated at the Publishing segment, are derived from ~~cloud offerings~~home delivery, digital distribution and ~~software licensing.~~single copy sales of our publications.

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~~For~~Other revenues, which are primarily generated at the ~~Corporate~~Publishing segment, are derived mainly from commercial printing, distribution arrangements, revenues from our events business, digital content syndication and ~~Other category, Operating~~affiliate revenues ~~were relatively flat compared~~and third-party newsprint sales, and to ~~the three months ended March 31, 2020. Revenues~~a lesser extent generated at our Corporate and ~~Other~~other category, ~~are primarily~~mainly driven by ~~third party newsprint sales.~~sales of cloud-based products with expert guidance and support.

Operating expenses

~~Total Operating expenses were $769.1 million for the three months ended March 31, 2021, a decrease of $209.4 million compared to the three months ended March 31, 2020.~~ 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 ~~benefits costs;~~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;~~Impairment charges, including costs incurred related to goodwill, intangible assets and property, plant and equipment;

•Gains or losses on the sale or disposal of assets; and

•~~Impairment charges, including costs incurred related to goodwill, intangible assets and property, plant and equipment.~~

For the three months ended March 31, 2021, Operating expenses at our Publishing segment decreased $173.3 million compared to the three months ended March 31, 2020, reflecting a decrease in Operating costs of $87.1 million, a decrease in Selling, general and administrative expenses of $64.6 million, a decrease in Depreciation and amortization of $20.6 million, and a decrease in Integration and reorganization costs of $6.0 million, partially offset by an increase in Loss on the sale or disposal of assets of $4.1 million and an increase in Asset impairments of $0.8 million.

For the three months ended March 31, 2021, Operating expenses at our DMS segment decreased $21.6 million compared to the three months ended March 31, 2020, reflecting a decrease in Selling, general and administrative expenses of $16.9 million, a decrease in Operating costs of $4.0 million, and a decrease in Integration and reorganization costs of $1.2 million, partially offset by an increase in Depreciation and amortization of $0.5 million.

For the three months ended March 31, 2021, Operating expenses at Corporate and other decreased $20.3 million compared to the three months ended March 31, 2020, due to a decrease in Selling, general and administrative expenses of $15.7 million, a decrease in Integration and reorganization costs of $7.6 million, and a decrease in Operating costs of $1.8 million, partially offset by an increase in Other operating expenses, ~~of $4.6 million.~~including third-party debt expenses as well as acquisition-related costs.

Refer to ~~the discussion of segment~~Segment results below for ~~further information.~~a discussion of the results of operations by segment.

Non-operating (income) expense

Interest expense: For the three months ended March 31, ~~2021,~~2022, Interest expense was ~~$39.5~~$26.0 million compared to ~~$57.9~~$39.5 million for the three months ended March 31, ~~2020.~~2021. The decrease in interest expense for the three months ended March 31, 2022 compared to the same period in 2021 was mainly due to a lower effective interest rate driven by the refinancing of the Company's 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~~and the ~~same period in 2020.~~impact of lower interest rates on our outstanding debt.

Loss on early extinguishment of debt: For the three months ended March 31, ~~2021,~~2022, Loss on early extinguishment of debt was ~~$19.4~~$2.7 million compared to ~~$0.8~~$19.4 million for the three months ended March 31, ~~2020.~~2021. The decrease in the loss on extinguishment of debt for the three months ended March 31, 2022 compared to the same period in 2021 was mainly due to the payoff of ~~the Acquisition Term Loan~~our five-year, senior-secured 11.5% term loan facility with Apollo Capital Management, L.P., in the first quarter of 2021.

Non-operating pension income: For the three months ended March 31, ~~2021,~~2022, Non-operating pension income was ~~$23.9~~$18.2 million compared to ~~$18.5~~$23.9 million for the three months ended March 31, ~~2020.~~2021. The ~~increase~~decrease in non-operating pension income for the three months ended March 31, 2022 compared to the same period in 2021 was primarily due to ~~an increase~~a decrease in the expected return on plan assets held by the Gannett Retirement Plan, ~~and lower interest costs on benefit obligations.~~mainly driven by a more conservative asset allocation.

Loss on ~~Convertible~~convertible notes derivative: For the three months ended March 31, 2022, we had no Loss on convertible notes derivative. For the three months ended March 31, 2021, Loss on ~~Convertible~~convertible notes derivative was $126.6 million, ~~due to~~reflecting the increase in the fair value of the derivative liability as a result of the increase in ~~the Company's~~our stock price.

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Other non-operating ~~items,~~income, net: ~~Non-operating items,~~Other non-operating income, net ~~are driven by~~consisted of certain items that fall outside of our normal business operations. For the three months ended March 31, ~~2021, Non-operating items,~~2022, Other non-operating income, net was ~~expense of $1.9~~$1.8 million compared to ~~$1.6~~$1.9 million ~~income in~~for the ~~same period in 2020.~~three months ended March 31, 2021.

~~Provision (benefit)~~Benefit for income taxes

The following table summarizes our ~~Loss~~pre-tax net loss before income taxes and income tax accounts:


	Three months ended March 31,
In thousands		2022			2021
Loss before income taxes		$	(10,709)		$	(151,810)
Benefit for income taxes		(7,607)			(9,109)
Effective tax rate		71.0		%	6.0		%

Three months ended March 31,
In thousands 2021 2020
Loss before income taxes $ (151,810) $ (71,627)
(Benefit) provision for income taxes (9,109) 8,979
Effective tax rate 6.0 % ***

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*** OurThe benefit for income taxes for the three months ended March 31, 2022 was mainly driven by pre-tax loss and the current year tax benefit from the release of tax reserves, partially offset by the creation of valuation allowances on non-deductible interest expense carryforwards. The provision was calculated using an estimated annual effective tax rate of 41.25%. The estimated annual effective tax rate is based on the projected tax expense for the ~~period was not meaningful.~~full year. The estimated annual effective tax rate isprincipally impacted by the creation of valuation allowances on non-deductible interest expense carryforwards, the global intangible low taxed income inclusion from our wholly-owned U.K. subsidiary, and state and foreign income tax expense.

The benefit for income taxes for the three months ended March 31, 2021 was mainly ~~impacted~~driven by the pre-tax net loss generated during the ~~quarter. The benefit for income taxes for the three months ended March 31, 2021~~quarter and was calculated using the estimated annual effective tax rate of 43.4%. The estimated annual effective tax rate is based on athe projected tax expense for the full year. The tax benefit for the three months ended March 31, 2021 is lower than the 21% statutory ~~Federal~~federal rate due to the impact of 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.

Our effective tax rate for the three months ended March 31, 2020, was not meaningful. The rate was primarily impacted by non-deductible officers' compensation, state income tax expense and foreign income tax expense.

Net loss attributable to Gannett and diluted loss per share attributable to Gannett

For the three months ended March 31, ~~2021,~~2022, Net loss attributable to Gannett and diluted loss per share attributable to Gannett were $3.0 million and $0.02, respectively, compared to $142.3 million and $1.06, respectively, ~~compared to $80.2 million and $0.61~~ for the three months ended March 31, ~~2020, respectively.~~2021. The change for the three months ended March 31, 2022 compared to the same period in the prior year reflects the various items discussed above.

Segment Results

Publishing segment

A summary of our Publishing segment results is presented below:


												Three months ended March 31,
		Three months ended March 31,											Change
In thousands	In thousands		2021		2020		Change		% Change		In thousands			2022		2021		$		%
Operating revenues:	Operating revenues:										Operating revenues:
Advertising and marketing services	Advertising and marketing services		$	314,310	$	403,636	$	(89,326)	(22)	%	Advertising and marketing services			$	298,762	$	314,310	$	(15,548)	(5)	%
Circulation	Circulation		325,436		374,720		(49,284)		(13)	%	Circulation			288,602		325,436		(36,834)		(11)	%
Other	Other		59,839		79,794		(19,955)		(25)	%	Other			83,055		59,839		23,216		39	%
Total operating revenues	Total operating revenues		699,585		858,150		(158,565)		(18)	%	Total operating revenues			670,419		699,585		(29,166)		(4)	%
Operating expenses:	Operating expenses:										Operating expenses:
Operating costs	Operating costs		431,801		518,859		(87,058)		(17)	%	Operating costs			426,116		431,801		(5,685)		(1)	%
Selling, general and administrative expenses	Selling, general and administrative expenses		166,203		230,813		(64,610)		(28)	%	Selling, general and administrative expenses			176,932		166,203		10,729		6	%
Depreciation and amortization	Depreciation and amortization		46,387		66,957		(20,570)		(31)	%	Depreciation and amortization			37,431		46,387		(8,956)		(19)	%
Integration and reorganization costs	Integration and reorganization costs		7,326		13,309		(5,983)		(45)	%	Integration and reorganization costs			5,721		7,326		(1,605)		(22)	%

Asset impairments	Asset impairments		833		—		833		***		Asset impairments			854		833		21		3	%

Net loss on sale or disposal of assets			4,680		592		4,088		***
(Gain) loss on sale or disposal of assets, net											(Gain) loss on sale or disposal of assets, net			(2,968)		4,680		(7,648)		***
Other operating expenses											Other operating expenses			741		—		741		***
Total operating expenses	Total operating expenses		657,230		830,530		(173,300)		(21)	%	Total operating expenses			644,827		657,230		(12,403)		(2)	%
Operating income	Operating income		$	42,355	$	27,620	$	14,735	53	%	Operating income			$	25,592	$	42,355	$	(16,763)	(40)	%

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

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Operating revenues

The following table provides the breakout of Operating revenues by category:


												Three months ended March 31,
		Three months ended March 31,											Change
In thousands	In thousands		2021		2020		Change		% Change		In thousands			2022		2021		$		%
Local and national print	Local and national print		$	117,399	$	173,170	$	(55,771)	(32)	%	Local and national print			$	102,744	$	117,399	$	(14,655)	(12)	%
Classified print	Classified print		75,797		94,449		(18,652)		(20)	%	Classified print			70,774		75,797		(5,023)		(7)	%
Print advertising	Print advertising		193,196		267,619		(74,423)		(28)	%	Print advertising			173,518		193,196		(19,678)		(10)	%

Digital media	Digital media		79,557		86,497		(6,940)		(8)	%	Digital media			78,771		79,557		(786)		(1)	%
Digital marketing services	Digital marketing services		28,353		30,539		(2,186)		(7)	%	Digital marketing services			32,639		28,353		4,286		15	%
Digital classified	Digital classified		13,204		18,981		(5,777)		(30)	%	Digital classified			13,834		13,204		630		5	%
Digital advertising and marketing services	Digital advertising and marketing services		121,114		136,017		(14,903)		(11)	%	Digital advertising and marketing services			125,244		121,114		4,130		3	%

Advertising and marketing services	Advertising and marketing services		314,310		403,636		(89,326)		(22)	%	Advertising and marketing services			298,762		314,310		(15,548)		(5)	%

Print circulation	Print circulation		302,257		358,918		(56,661)		(16)	%	Print circulation			258,476		302,257		(43,781)		(14)	%
Digital-only circulation	Digital-only circulation		23,179		15,802		7,377		47	%	Digital-only circulation			30,126		23,179		6,947		30	%
Circulation	Circulation		325,436		374,720		(49,284)		(13)	%	Circulation			288,602		325,436		(36,834)		(11)	%

Other	Other		59,839		79,794		(19,955)		(25)	%	Other			83,055		59,839		23,216		39	%

Total operating revenues	Total operating revenues		$	699,585	$	858,150	$	(158,565)	(18)	%	Total operating revenues			$	670,419	$	699,585	$	(29,166)	(4)	%

The overall decline in Print advertising revenues for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was driven by secular industry trends impacting all categories. For the three months ended March 31, 2022, Local and national print advertising revenues decreased compared to the three months ended March 31, 2021, primarily due to a decrease in advertiser inserts as well as the absence of $5.7 million of revenues in the first quarter of 2022 associated with both businesses divested and non-core products which were sunset in 2021. For the three months ended March 31, 2022, Classified print advertising revenues decreased compared to the three months ended March 31, 2021, due to lower spend on classified advertisements, including obituaries, real estate, and automotive.

The increase in Digital marketing services revenues for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was due to an increase client counts as well as an increase in client spend. The increase in Digital classified revenues for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was due to higher client spend, mainly driven by automotive and employment advertisements. These increases were partially offset by a decrease in Digital media revenues for the three months ended March 31, 2022 compared to the three months ended March 31, 2021, due to changes in monetization with our sports affiliates as well as lower page views related to increased subscriber-only content, secular trends in news consumption and divestitures.

For the three months ended March 31, ~~2021, Local and national print advertising~~2022, Print circulation revenues ~~and Classified print advertising revenues~~ decreased ~~$55.8 million and $18.7 million, respectively,~~ compared to the three months ended March 31, 2020. The overall decline in Print advertising was driven by secular industry trends impacting all categories and impacts from the COVID-19 pandemic. The decline in Local and national print advertising revenues was driven by lower advertising volume and a decline in advertiser inserts. Classified print advertising revenues declined2021, due to ~~reduced spend in legal, real estate, automotive and employment classified advertisements.~~

For the three months ended March 31, 2021, Digital media, Digital marketing services and Digital classified revenues decreased $6.9 million, $2.2 million, and $5.8 million, respectively, compared to the three months ended March 31, 2020. The decrease in Digital media revenues was driven by lower local digital media spend and lower page views compared to the prior year which reflected coverage of the COVID-19 pandemic and lower digital classified revenue.

For the three months ended March 31, 2021, Print circulation revenues decreased $56.7 million and Digital-only circulation revenues increased $7.4 million, compared to the three months ended March 31, 2020. The decline in Print circulation revenues was 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 businesses that buy and sell copies of our publications. The increase in Digital-only circulation revenues was driven by an increase of 37% in digital-only subscribers to approximately 1.2 million as of March 31, 2021, as well as an increase in average revenue per customer due to mix in subscribers with introductory trial periods duringindustry. For the three months ended March 31, ~~2021~~2022, Digital-only circulation revenues increased compared to the three months ended March 31, ~~2020.~~2021, driven by an increase of 44% in paid digital-only subscribers, including those subscribers on introductory subscription offers, to approximately 1.75 million compared to the same period in the prior year, partially offset by lower average revenue per user, which we define as monthly revenue divided by client count within the period.

For the three months ended March 31, ~~2021,~~2022, Other revenues ~~decreased $20.0 million~~increased compared to the three months ended March 31, ~~2020,~~2021, primarily due to ~~declines in the~~ commercial print growth in local markets, an increase in digital content syndication volume and ~~delivery business, driven by overall secular trends impacting the industry~~other digital revenues, and ~~a decline~~an increase in event revenues ~~due to the absence of~~as we hosted more in-person events ~~in the first quarter of 2021~~with increased attendance as compared to the same period in the prior year, ~~as a result of~~where our ability to host in-person events was more significantly impacted by the COVID-19 pandemic. ~~In addition, the Company continues to experience decreased demand for commercial print.~~

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Operating expenses

For the three months ended March 31, ~~2021,~~2022, Operating costs decreased ~~$87.1~~$5.7 million compared to the three months ended March 31, ~~2020.~~2021. The following table provides the breakout of the decrease in Operating costs:

Three months ended March 31,
In thousands 2021 2020 Change % Change
Newsprint and ink $ 28,271 $ 40,305 $ (12,034) (30) %
Distribution 96,105 106,952 (10,847) (10) %
Compensation and benefits 147,118 181,108 (33,990) (19) %
Outside services 68,764 85,832 (17,068) (20) %
Other 91,543 104,662 (13,119) (13) %
Total operating costs $ 431,801 $ 518,859 $ (87,058) (17) %


	Three months ended March 31,
				Change
In thousands		2022		2021		$		%
Newsprint and ink		$	34,632	$	28,271	$	6,361	23	%
Distribution		102,398		96,105		6,293		7	%
Compensation and benefits		140,129		147,118		(6,989)		(5)	%
Outside services		82,784		68,764		14,020		20	%
Other		66,173		91,543		(25,370)		(28)	%
Total operating costs		$	426,116	$	431,801	$	(5,685)	(1)	%

For the three months ended March 31, ~~2021,~~2022, Newsprint and ink costs ~~decreased $12.0 million~~increased compared to the three months ended March 31, ~~2020 driven by declines~~2021, primarily due to an increase in ~~print circulation and print advertising volumes, lower paper~~newsprint prices and ~~page count reductions driven~~growth in our commercial print business, partially offset by ~~efficiency initiatives~~the decline in ~~printing operations.~~volume of home delivery and single copy sales.

For the three months ended March 31, ~~2021,~~2022, Distribution costs ~~decreased $10.8 million~~increased compared to the three months ended March 31, ~~2020~~2021, primarily due to ~~declines in print circulation and print advertising volumes as well as the decline~~an increase in commercial print and ~~delivery.~~delivery activity and an increase in third party distribution costs, partially offset by lower delivery and postage costs, primarily related to the decline in volume of home delivery and single copy sales.

For the three months ended March 31, ~~2021,~~2022, Compensation and benefits costs decreased ~~$34.0 million~~ compared to the three months ended March 31, ~~2020~~2021, primarily due to lower benefit costs, including medical, partially offset by an increase in employer 401(k) matching contributions, which were reinstated during the ~~benefit in the first~~third quarter of 2021 of cost containment initiatives implemented in the second half of 2020 in connection with the COVID-19 pandemic, including headcount reductions, as well as a reduction in costs associated with ongoing integration efforts.2021.

For the three months ended March 31, ~~2021,~~2022, Outside services costs, which ~~includes~~include outside printing, professional ~~and outside~~ services fulfilled by third parties, paid search and ad serving, feature services, and credit card fees, ~~decreased $17.1 million~~increased compared to the three months ended March 31, ~~2020~~2021, primarily due to higher costs associated with the ~~declines~~increase in ~~Advertising and~~Digital marketing services revenues, and Print circulation revenues, the benefit in the first quarter of 2021 of cost containment initiatives implemented in the second half of 2020 in connection with the COVID-19 pandemic, and a reductionincluding paid search fees, as well as an increase in costs ~~associated with ongoing integration efforts.~~related to events.

For the three months ended March 31, ~~2021,~~2022, Other costs, which primarily ~~includes~~include travel and facility and equipment costs, decreased ~~$13.1 million~~ compared to the three months ended March 31, ~~2020,~~2021, due to a reduction in costs associated with ~~ongoing integration efforts and~~ cost containment initiatives.

For the three months ended March 31, ~~2021,~~2022, Selling, general and administrative expenses ~~decreased~~increased by ~~$64.6~~$10.7 million compared to the three months ended March 31, ~~2020.~~2021. The following table provides the breakout of the ~~decrease~~increase in Selling, general and administrative expenses:

Three months ended March 31,
In thousands 2021 2020 Change % Change
Compensation and benefits $ 89,710 $ 113,527 $ (23,817) (21) %
Outside services 10,718 13,123 (2,405) (18) %
Other 65,775 104,163 (38,388) (37) %
Total Selling, general and administrative expenses $ 166,203 $ 230,813 $ (64,610) (28) %


	Three months ended March 31,
				Change
In thousands		2022		2021		$		%
Compensation and benefits		$	86,866	$	89,710	$	(2,844)	(3)	%
Outside services and other		90,066		76,493		13,573		18	%
Total Selling, general and administrative expenses		$	176,932	$	166,203	$	10,729	6	%

For the three months ended March 31, ~~2021,~~2022, Compensation and benefits costs decreased ~~$23.8 million~~ compared to the three months ended March 31, ~~2020~~2021, primarily due to lower benefit costs, including medical, partially offset by an increase in employer 401(k) matching contributions, which were reinstated during the ~~benefit in the first~~third quarter of 2021 of cost containment initiatives implemented in the second half of 2020 in connection with the COVID-19 pandemic, including headcount reductions, as well as a reduction in costs associated with ongoing integration efforts.2021.

For the three months ended March 31, ~~2021,~~2022, Outside services and other costs, which ~~includes professional and outside~~include services ~~decreased $2.4 million~~ fulfilled by third parties, increased compared to the three months ended March 31, ~~2020~~2021, due to ~~declines~~an increase in ~~activity~~marketing and ~~cost containment initiatives.~~acquisition costs associated with growing subscribers, as well as higher professional services costs associated with advertising operations and client success.

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For the three months ended March 31, ~~2021, Other costs~~2022, Depreciation and amortization expenses decreased ~~$38.4 million~~ compared to the three months ended March 31, ~~2020~~2021, reflecting the impact of the closure and consolidation of print facilities, as well as lower accelerated depreciation due to ~~lower facility related costs, lower bad debt expense and~~a decrease in the ~~benefit~~number of print facilities closed in the first quarter of ~~2021 of cost containment initiatives implemented~~2022 compared to the same period in the ~~second half of 2020 in connection with the COVID-19 pandemic.~~prior year.

For the three months ended March 31, ~~2021, Depreciation~~2022, Integration and ~~amortization expenses~~reorganization costs decreased ~~$20.6 million~~ compared to the three months ended March 31, ~~2020~~2021, due to a decrease in ~~accelerated depreciation~~severance costs of ~~$15.4~~$1.6 million, asdriven by a ~~result of fewer print~~decline in facility ~~shutdowns and strategic dispositions of real estate during~~consolidation activities compared to the same period ~~related to ongoing cost reduction programs.~~in the prior year.

For the three months ended March 31, ~~2021, Integration and reorganization costs decreased $6.0 million~~2022, the increase in the Gain on sale or disposal of assets, net compared to the three months ended March 31, ~~2020~~2021 was due to a decrease in severance costs of $5.1 million. For the three months ended March 31, 2021, severance costs were primarily related to facility consolidation activities. For the three months ended March 31, 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 months ended March 31, 2021, Loss~~net gains recognized on the sale ~~or disposal~~ of ~~assets increased $4.1 million compared to the three months ended March 31, 2020 driven by the sale of~~various assets in ~~the first quarter of 2021 as part of the Company’s~~connection with our plan to monetize non-core ~~assets.~~assets in the current period compared to net losses in the same period in the prior year.

Publishing segment Adjusted EBITDA


														Three months ended March 31,
		Three months ended March 31,													Change
In thousands	In thousands		2021			2020			Change		% Change		In thousands			2022			2021			$		%
Net income attributable to Gannett	Net income attributable to Gannett		$	66,213		$	33,840		$	32,373	96	%	Net income attributable to Gannett			$	42,814		$	66,224		$	(23,410)	(35)	%
Interest expense			11			18			(7)		(39)	%

Non-operating pension income	Non-operating pension income		(23,878)			(5,321)			(18,557)		***		Non-operating pension income			(18,213)			(23,878)			5,665		(24)	%

Other non-operating expense (income), net			394			(463)			857		***
Depreciation and amortization	Depreciation and amortization		46,387			66,957			(20,570)		(31)	%	Depreciation and amortization			37,431			46,387			(8,956)		(19)	%
Integration and reorganization costs	Integration and reorganization costs		7,326			13,309			(5,983)		(45)	%	Integration and reorganization costs			5,721			7,326			(1,605)		(22)	%

Other operating expenses													Other operating expenses			741			—			741		***
Asset impairments	Asset impairments		833			—			833		***		Asset impairments			854			833			21		3	%

Net loss on sale or disposal of assets			4,680			592			4,088		***

(Gain) loss on sale or disposal of assets, net													(Gain) loss on sale or disposal of assets, net			(2,968)			4,680			(7,648)		***
Other items	Other items		242			1,996			(1,754)		(88)	%	Other items			2,268			636			1,632		***
Adjusted EBITDA (non-GAAP basis)	Adjusted EBITDA (non-GAAP basis)		$	102,208		$	110,928		$	(8,720)	(8)	%	Adjusted EBITDA (non-GAAP basis)			$	68,648		$	102,208		$	(33,560)	(33)	%
Net income attributable to Gannett margin	Net income attributable to Gannett margin		9.5		%	3.9		%					Net income attributable to Gannett margin			6.4		%	9.5		%
Adjusted EBITDA margin (non-GAAP basis)(a)			14.6		%	12.9		%
Adjusted EBITDA margin (non-GAAP basis)(a)(b)													Adjusted EBITDA margin (non-GAAP basis)(a)(b)			10.2		%	14.6		%

(a)See "Non-GAAP Financial Measures" below for additional information about non-GAAP measures.

(b)We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Operating revenues.

~~Adjusted EBITDA for our Publishing segment was $102.2 million for~~For the three months ended March 31, ~~2021, a~~2022, the decrease ~~of $8.7 million~~in Adjusted EBITDA compared to the three months ended March 31, ~~2020. The decrease~~2021 was primarily attributable to the changes discussed above.

Digital Marketing Solutions segment


	Three months ended March 31,
				Change
In thousands		2022		2021		$		%
Outside services		$	66,227	$	58,691	$	7,536	13	%
Compensation and benefits		7,875		8,135		(260)		(3)	%
Other		2,229		2,452		(223)		(9)	%
Total operating costs		$	76,331	$	69,278	$	7,053	10	%

For the three months ended March 31, 2022, Outside services costs, which includes professional services fulfilled by third parties, media fees and other digital costs, paid search and ad serving and feature services, increased compared to the three months ended March 31, 2021, due to an increase in expenses associated with third-party media fees, driven by a corresponding increase in revenues.

Three months ended March 31,
In thousands 2021 2020 Change % Change
Compensation and benefits 8,135 13,629 (5,494) (40) %
Outside services 58,691 55,007 3,684 7 %
Other 2,452 4,618 (2,166) (47) %
Total operating costs $ 69,278 $ 73,254 $ (3,976) (5) %


	Three months ended March 31,
				Change
In thousands		2022		2021		$		%
Compensation and benefits		$	18,598	$	18,062	$	536	3	%
Outside services and other		3,600		5,769		(2,169)		(38)	%
Total Selling, general and administrative expenses		$	22,198	$	23,831	$	(1,633)	(7)	%

Three months ended March 31,
In thousands 2021 2020 Change % Change
Compensation and benefits $ 18,062 $ 35,773 $ (17,711) (50) %
Outside services 1,443 2,284 (841) (37) %
Other 4,326 2,677 1,649 62 %
Total Selling, general and administrative expenses $ 23,831 $ 40,734 $ (16,903) (41) %

Digital Marketing Solutions segment Adjusted EBITDA

Adjusted EBITDA margin (non-GAAP basis)(a)

Adjusted EBITDA margin (non-GAAP basis)(a)(b)

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

(a)See "Non-GAAP Financial Measures" below for additional information about non-GAAP measures.

(b)We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Operating revenues.

Corporate and other category

For the three months ended March 31, ~~2021,~~2022, Corporate and other operating expenses decreased ~~$20.3~~$5.4 million compared to the three months ended March 31, ~~2020.~~2021. The following table provides the breakout of the decrease in Corporate and ~~Other~~other operating expenses:

Three months ended March 31,
In thousands 2021 2020
Net cash provided by operating activities $ 61,316 $ 60,489
Net cash provided by (used for) investing activities 2,516 (3,419)
Net cash used for financing activities (74,699) (14,679)
Effect of currency exchange rate change on cash 314 1,554
(Decrease) increase in cash, cash equivalents and restricted cash $ (10,553) $ 43,945


	Three months ended March 31,
In thousands	2022		2021
Cash provided by operating activities	$	32,429	$	61,316
Cash provided by (used for) investing activities	(6,220)		2,516
Cash used for financing activities	(3,818)		(74,699)
Effect of currency exchange rate change on cash	(992)		314
Increase (decrease) in cash, cash equivalents and restricted cash	$	21,399	$	(10,553)

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.

Cash flows provided by (used for) investing activities: Cash flows used for investing activities was $6.2 million for the three months ended March 31, 2022, compared to cash flows provided by investing activities ~~totaled~~of $2.5 million for the three months ended March 31, ~~2021 compared to $3.4 million used for investing activities in the three months ended March 31, 2020. This increase~~2021. The change was primarily due to ~~a decrease~~payments for acquisitions, net of cash acquired, of $15.4 million and an increase in purchases of property, plant and equipment of ~~$6.2~~$3.2 million, offset by an increase in proceeds from the sale of real estate and other assets of $10.3 million.

Cash flows used for financing activities: Cash flows used for financing activities ~~totaled~~was $3.8 million for the three months ended March 31, 2022, compared to $74.7 million for the three months ended March 31, ~~2021 compared to $14.7 million for the three months ended March 31, 2020. This increase~~2021. The decrease was primarily due to ~~an increase in~~lower repayments, net ~~repayments~~ under term loans of ~~$26.1~~$63.3 million and a $33.5 million decrease in payments related to deferred financing costs, partially offset by repayments of ~~debt issuance costs of $33.9 million.~~$22.5 million related to the 2026 Senior Notes.

New Senior Secured ~~5-Year~~ Term Loan

Holdings, at any time without premium, except a ~~margin~~premium equal to ~~6.00% per annum. Accordingly,~~1.00% of the aggregate principal amount of the loans being repaid in connection with certain refinancing or repricing events that reduce the all-in yield applicable to the loans and occur on or before October 15, 2022. In addition, we are required to ~~dedicate a substantial portion of cash flow from operations to fund interest payments.~~

~~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 $10.2 million, that 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 months ended March 31, 2021.

Senior Secured Notes due 2026

Senior Secured Convertible Notes due 2027

Senior Convertible Notes due 2024

In connection with these measures, we previously announced that the Board had determined it is in the best interest of the Company to preserve liquidity by suspending the quarterly dividend. We presently have no current intention to reinstate the ~~dividend, and there can be no assurance if or when we will resume paying dividends on a regular basis.~~dividend. In addition, the terms of our indebtedness, including our credit facility, the ~~5-Year~~New Senior Secured Term Loan, ~~and~~ the 2026 Senior Secured Notes Indenture ~~for~~and the 2027 Notes Indenture have terms that restrict our ability to pay dividends.

CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4. CONTROLS AND PROCEDURES

~~We continue~~the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting on a timely basis, information required to ~~implement our remediation plan for~~be disclosed by the ~~previously reported material weakness~~Company in ~~internal control over financial reporting, described~~the reports that it files or submits under the Exchange Act and were effective in ~~Part II, Item 9A~~ ~~of our~~ ~~2020 Form 10-K, which includes organizational enhancements, design enhancements, training, utilizing external resources~~ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated 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 contributingcommunicated to the ~~material weakness are remediated~~Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, 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.appropriate to allow timely decisions regarding required disclosure.

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 II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ITEM 1A. RISK FACTORS

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

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

ITEM 4. MINE SAFETY DISCLOSURES

ITEM 5. OTHER INFORMATION

Exhibit Number

Description

Location

4.1

~~Second~~Fourth Supplemental Indenture, dated as of ~~February 9, 2021,~~January 31, 2022, by and ~~between the Company,~~among Gannett Co., Inc., the Subsidiary Guarantors ~~from time to time~~ party thereto, ~~and~~ U.S. Bank National ~~Associations,~~Association, as trustee.

Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed February ~~12, 2021.~~4, 2022.

10.1

~~Credit Agreement~~Amendment No. 1, dated as of ~~February 9, 2021,~~January 31, 2022, to the First Lien Credit Agreement, by and among ~~the Company,~~Gannett Co., Inc., Gannett Holdings LLC, ~~each Guarantor~~the Guarantors from time to time party thereto, the ~~Lenders~~lenders from time to time party thereto, and Citibank, N.A., as collateral agent and administrative agent.

Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, ~~field~~filed February ~~12, 2021.~~4, 2022.

10.2

~~Amended and Restated Performance Restricted Stock Unit Grant Agreement between the Company and Michael Reed, effective as~~Form of January 8, 2021.*

~~Filed herewith.~~

~~10.3~~

Gannett Co., Inc. Employee Performance Restricted Stock Unit Grant ~~Agreement between the Company and Michael Reed, effective as of January 8, 2021.~~Agreement.*

~~Filed herewith.~~

~~10.4~~

Gannett Co., Inc. 2021 Annual Bonus Plan*

Filed herewith.

31.1

~~Rule 13a-14(a)~~ Certification of ~~CEO~~Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(d) of the Securities Exchange Act of 1934.

~~Attached.~~Filed herewith .

31.2

~~Rule 13a-14(a)~~ Certification of ~~CFO~~Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(d) of the Securities Exchange Act of 1934.

~~Attached.~~Filed herewith .

32.1

Section 1350 Certification of ~~CEO~~Principal Executive Officer.

~~Attached.~~Furnished herewith .

32.2

Section 1350 Certification of ~~CFO~~Principal Financial Officer.

~~Attached.~~Furnished herewith.

101

The following financial information from Gannett Co., Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2021,~~2022, 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

Cover Page Interactive Data File (formatted as Inline XBRL and embedded within the Inline XBRL document)

Attached.

* ~~Asterisks identify management contracts and~~Management contract or compensatory ~~plans~~plan or ~~arrangements.~~arrangement.

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.


		Pension Benefits				Postretirement Benefits					Pension benefits				Postretirement benefits
		Three months ended March 31,				Three months ended March 31,					Three months ended March 31,				Three months ended March 31,
In thousands	In thousands	2021		2020		2021		2020		In thousands	2022		2021		2022		2021
Operating expenses:	Operating expenses:									Operating expenses:
Service cost - benefits earned during the period	Service cost - benefits earned during the period	$	511	$	681	$	31	$	33	Service cost - benefits earned during the period	$	475	$	511	$	15	$	31
Non-operating expenses (Other income):
Non-operating expenses:										Non-operating expenses:
Interest cost on benefit obligation	Interest cost on benefit obligation	17,031		20,717		501		567		Interest cost on benefit obligation	18,649		17,031		451		501
Expected return on plan assets	Expected return on plan assets	(41,430)		(39,759)		0		0		Expected return on plan assets	(37,281)		(41,430)		—		—

Amortization of actuarial loss (gain)	Amortization of actuarial loss (gain)	35		(27)		(15)		13		Amortization of actuarial loss (gain)	20		35		(52)		(15)

Total non-operating (benefit) expenses	Total non-operating (benefit) expenses	$	(24,364)	$	(19,069)	$	486	$	580	Total non-operating (benefit) expenses	$	(18,612)	$	(24,364)	$	399	$	486
Total expense (benefit) for retirement plans	Total expense (benefit) for retirement plans	$	(23,853)	$	(18,388)	$	517	$	613	Total expense (benefit) for retirement plans	$	(18,137)	$	(23,853)	$	414	$	517


		Three months ended March 31,					Three months ended March 31,
In thousands	In thousands	2021		2020		In thousands	2022		2021
Net cash refund for taxes		$	(997)	$	(2,036)
Cash paid for taxes, net of refunds						Cash paid for taxes, net of refunds	$	846	$	(997)
Cash paid for interest	Cash paid for interest	13,528		551		Cash paid for interest	7,531		13,528
Non-cash investing and financing activities:	Non-cash investing and financing activities:					Non-cash investing and financing activities:
Accrued capital expenditures	Accrued capital expenditures	$	627	$	1,292	Accrued capital expenditures	$	1,160	$	627


In thousands	In thousands	March 31, 2021		December 31, 2020		In thousands	March 31, 2022		December 31, 2021
Accounts payable	Accounts payable	$	137,571	$	131,797	Accounts payable	$	138,045	$	157,257
Compensation	Compensation	109,173		115,061		Compensation	106,611		107,585
Taxes (primarily property and sales taxes)	Taxes (primarily property and sales taxes)	28,786		30,834		Taxes (primarily property and sales taxes)	19,887		26,042
Benefits	Benefits	22,120		22,821		Benefits	21,052		21,056
Interest	Interest	22,327		3,676		Interest	20,193		7,577
Other	Other	57,393		74,057		Other	40,580		37,497
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	$	377,370	$	378,246	Accounts payable and accrued liabilities	$	346,368	$	357,014


Item No.	Item No.		Page	Item No.		Page
		Part I. Financial Information			Part I. Financial Information
1	1	Financial Statements	2	1	Financial Statements	2
2	2	Management's Discussion and Analysis of Financial Condition and Results of Operations	21	2	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
3	3	Quantitative and Qualitative Disclosures About Market Risk	38	3	Quantitative and Qualitative Disclosures About Market Risk	40
4	4	Controls and Procedures	38	4	Controls and Procedures	40

		Part II. Other Information			Part II. Other Information
1	1	Legal Proceedings	39	1	Legal Proceedings	41
1A	1A	Risk Factors	39	1A	Risk Factors	41
2	2	Unregistered Sales of Equity Securities and Use of Proceeds	39	2	Unregistered Sales of Equity Securities and Use of Proceeds	41
3	3	Defaults Upon Senior Securities	39	3	Defaults Upon Senior Securities	41
4	4	Mine Safety Disclosures	39	4	Mine Safety Disclosures	41
5	5	Other Information	39	5	Other Information	41
6	6	Exhibits	39	6	Exhibits	42
		Signatures	41		Signatures	43


		Three months ended March 31, 2021															Three months ended March 31, 2022
		Common stock			Additional Paid-in Capital		Accumulated other comprehensive income (loss)		Accumulated Deficit		Treasury stock						Common stock			Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated deficit		Treasury stock			Non-controlling interest
In thousands, except share data	In thousands, except share data	Shares	Amount								Shares	Amount		Total		In thousands, except share data	Shares	Amount								Shares	Amount				Total
Balance as of December 30, 2020		139,494,741	$	1,395	$	1,103,881	$	50,173	$	(786,437)	1,391,748	$	(4,903)	$	364,109
Balance at December 31, 2021																Balance at December 31, 2021	144,667	$	1,446	$	1,400,206	$	59,998	$	(921,399)	2,368	$	(8,151)			$	(2,485)			$	529,615
Net loss attributable to Gannett	Net loss attributable to Gannett	—	—		—		—		(142,316)		—	—		(142,316)		Net loss attributable to Gannett	—	—		—		—		(2,967)		—	—		(135)				(3,102)
Acquisition of noncontrolling interests																Acquisition of noncontrolling interests	—	—		(4,419)		—		—		—	—		2,369				(2,050)
Restricted stock awards settled, net of withholdings	Restricted stock awards settled, net of withholdings	1,056,642	10		(1,895)		—		—		—	—		(1,885)		Restricted stock awards settled, net of withholdings	615	7		(1,541)		—		—		—	—		—				(1,534)
Restricted share grants	Restricted share grants	3,877,836	39		(39)		—		—		—	—		0		Restricted share grants	5,728	57		(57)		—		—		—	—		—				—
Equity feature of Convertible notes		—	—		316,252		—		—		—	—		316,252
Other comprehensive income, net of income tax provision of $206		—	—		—		3,423		—		—	—		3,423

Other comprehensive loss, net(b)																Other comprehensive loss, net(b)	—	—		—		(8,391)				—	—		—				(8,391)
Share-based compensation expense	Share-based compensation expense	—	—		3,423		—		—		—	—		3,423		Share-based compensation expense	—	—		3,393		—		—		—	—		—				3,393
Issuance of common stock	Issuance of common stock	14,409	0		61		—		—		—	—		61		Issuance of common stock	7	—		62		—		—		—	—		—				62
Remeasurement of redeemable noncontrolling interests		—	—		126		—		—		—	—		126
Treasury stock	Treasury stock	—	—		—		—		—		330,318	(1,707)		(1,707)		Treasury stock	—	—		—		—		—		692	(3,138)		—				(3,138)
Restricted share forfeiture	Restricted share forfeiture	—	—		—		—		—		179,861	(2)		(2)		Restricted share forfeiture	—	—		—		—		—		128	(1)		—				(1)
Other activity	Other activity	—	—		168		—		—		—	—		168		Other activity	—	—		(128)		—		—		—	—		—				(128)
Balance at March 31, 2021		144,443,628	$	1,444	$	1,421,977	$	53,596	$	(928,753)	1,901,927	$	(6,612)	$	541,652
Balance at March 31, 2022																Balance at March 31, 2022	151,017	$	1,510	$	1,397,516	$	51,607	$	(924,366)	3,188	$	(11,290)	$	(251)			$	514,726


In thousands	Year ended December 31, (a)
2021 (excluding the three months ended March 31, 2021)	$	55,719
2022	77,522
2023	64,681
2024	57,723
2025	50,584
Thereafter	216,335
Total future minimum lease payments	522,564
Less: Imputed interest	(208,452)
Total	$	314,112


	Three months ended March 31,
In thousands, except lease term and discount rate	2021			2020
Cash paid for amounts included in the measurement of operating lease liabilities	$	21,935		$	16,771
Right-of-use assets obtained in exchange for operating lease obligations	9,053			1,238
Loss on sale and leaseback transactions, net	406			0

	As of March 31,
	2021			2020
Weighted-average remaining lease term (in years)	7.6			8.1
Weighted-average discount rate	12.90		%	12.45		%


	February 26, 2021			December 31, 2020
Annual volatility	70.0		%	70.0		%
Discount rate	12.2		%	9.3		%
Stock price	$	4.95		$	3.36


Date: May ~~7, 2021~~5, 2022			GANNETT CO., INC.

			/s/ Douglas E. Horne
			Douglas E. Horne
			Chief Financial Officer and Chief Accounting Officer
			~~Chief Accounting Officer (principal~~(On behalf of the Registrant and as principal financial and principal accounting officer)