Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 03, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-36097 | |
Entity Registrant Name | GANNETT CO., INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 38-3910250 | |
Entity Address, Address Line One | 7950 Jones Branch Drive, | |
Entity Address, City or Town | McLean, | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22107-0910 | |
City Area Code | 703 | |
Local Phone Number | 854-6000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock Shares Outstanding | 136,305,331 | |
Entity Central Index Key | 0001579684 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Common stock | ||
Entity Information [Line Items] | ||
Title of Each Class | Common Stock, par value $0.01 per share | |
Trading Symbol | GCI | |
Name of Each Exchange on Which Registered | NYSE | |
Preferred Stock Purchase Rights | ||
Entity Information [Line Items] | ||
Title of Each Class | Preferred Stock Purchase Rights | |
No Trading Symbol | true | |
Name of Each Exchange on Which Registered | NYSE |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 158,603 | $ 156,042 |
Accounts receivable, net of allowance for doubtful accounts of $26,560 and $19,923 | 288,509 | 438,523 |
Inventories | 40,468 | 55,090 |
Prepaid expenses and other current assets | 125,208 | 129,460 |
Total current assets | 612,788 | 779,115 |
Property, plant and equipment, at cost net of accumulated depreciation of $358,746 and $277,291 | 718,590 | 815,807 |
Operating lease assets | 296,128 | 309,112 |
Goodwill | 559,623 | 914,331 |
Intangible assets, net | 920,525 | 1,012,564 |
Deferred income tax assets | 105,051 | 76,297 |
Other assets | 125,212 | 112,876 |
Total assets | 3,337,917 | 4,020,102 |
Current liabilities | ||
Accounts payable and accrued liabilities | 327,071 | 453,628 |
Deferred revenue | 213,988 | 218,823 |
Current portion of long-term debt | 0 | 3,300 |
Other current liabilities | 47,017 | 42,702 |
Total current liabilities | 588,076 | 718,453 |
Long-term debt | 1,633,449 | 1,636,335 |
Convertible debt | 3,300 | 3,300 |
Deferred tax liabilities | 6,256 | 9,052 |
Pension and other postretirement benefit obligations | 214,084 | 235,906 |
Long-term operating lease liabilities | 282,896 | 297,662 |
Other long-term liabilities | 157,313 | 136,188 |
Total noncurrent liabilities | 2,297,298 | 2,318,443 |
Total liabilities | 2,885,374 | 3,036,896 |
Redeemable noncontrolling interests | 458 | 1,850 |
Equity | ||
Common stock of $0.01 par value per share, 2,000,000,000 shares authorized, 136,885,320 issued and 136,114,347 shares outstanding at June 30, 2020; 129,386,258 issued and 128,991,544 shares outstanding at December 31, 2019 | 1,369 | 1,294 |
Treasury stock at cost, 770,973 and 394,714 shares at June 30, 2020 and December 31, 2019, respectively | (4,818) | (2,876) |
Additional paid-in capital | 1,101,899 | 1,090,694 |
Accumulated deficit | (633,003) | (115,958) |
Accumulated other comprehensive income (loss) | (13,362) | 8,202 |
Total equity | 452,085 | 981,356 |
Total liabilities and equity | $ 3,337,917 | $ 4,020,102 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 26,560 | $ 19,923 |
Accumulated Depreciation | $ 358,746 | $ 277,291 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, issued (in shares) | 136,885,320 | 129,386,258 |
Common stock, outstanding (in shares) | 136,114,347 | 128,991,544 |
Treasury stock (in shares) | 770,973 | 394,714 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Operating revenues: | ||||
Total operating revenues | $ 767,000 | $ 404,387 | $ 1,715,683 | $ 791,987 |
Operating expenses: | ||||
Operating costs | 476,735 | 233,407 | 1,043,199 | 462,902 |
Selling, general and administrative expenses | 226,484 | 126,628 | 525,622 | 255,676 |
Depreciation and amortization | 66,327 | 23,328 | 144,352 | 44,251 |
Integration and reorganization costs | 32,306 | 4,278 | 60,560 | 10,077 |
Acquisition costs | 2,379 | 2,364 | 8,348 | 3,137 |
Impairment of property, plant and equipment | 6,859 | 1,262 | 6,859 | 2,469 |
Goodwill and intangible impairment | 393,446 | 0 | 393,446 | 0 |
Loss on sale or disposal of assets | 88 | 947 | 745 | 2,737 |
Total operating expenses | 1,204,624 | 392,214 | 2,183,131 | 781,249 |
Operating income (loss) | (437,624) | 12,173 | (467,448) | 10,738 |
Non-operating (income) expense: | ||||
Interest expense | 57,928 | 10,212 | 115,827 | 20,346 |
Loss on early extinguishment of debt | 369 | 0 | 1,174 | 0 |
Non-operating pension income | (17,553) | (208) | (36,099) | (417) |
Other income, net | (6,261) | (103) | (4,616) | (154) |
Non-operating expense | 34,483 | 9,901 | 76,286 | 19,775 |
Net income (loss) before income taxes | (472,107) | 2,272 | (543,734) | (9,037) |
Benefit for income taxes | (34,276) | (343) | (25,297) | (2,297) |
Net income (loss) | (437,831) | 2,615 | (518,437) | (6,740) |
Net income (loss) attributable to redeemable noncontrolling interests | (938) | (200) | (1,392) | (449) |
Net income (loss) attributable to Gannett | $ (436,893) | $ 2,815 | $ (517,045) | $ (6,291) |
Loss per share attributable to Gannett – basic (in dollars per share) | $ (3.32) | $ 0.05 | $ (3.95) | $ (0.10) |
Loss per share attributable to Gannett– diluted (in dollars per share) | (3.32) | 0.05 | (3.95) | (0.10) |
Dividend declared per share (in dollars per share) | $ 0 | $ 0.38 | $ 0 | $ 0.76 |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | $ (2,552) | $ 3 | $ (16,585) | $ 3 |
Pension and other postretirement benefit items: | ||||
Net actuarial loss | (8,078) | 0 | (8,078) | 0 |
Amortization of net actuarial gain | (11) | (30) | (25) | (60) |
Other | 95 | 0 | 1,061 | 0 |
Total pension and other postretirement benefit items | (7,994) | (30) | (7,042) | (60) |
Other comprehensive loss before tax | (10,546) | (27) | (23,627) | (57) |
Income tax effect related to components of other comprehensive income | 2,059 | 0 | 2,063 | 0 |
Other comprehensive loss, net of tax | (8,487) | (27) | (21,564) | (57) |
Comprehensive loss | (446,318) | 2,588 | (540,001) | (6,797) |
Comprehensive loss attributable to redeemable noncontrolling interests | (938) | (200) | (1,392) | (449) |
Comprehensive loss attributable to Gannett | (445,380) | 2,788 | (538,609) | (6,348) |
Advertising and marketing services | ||||
Operating revenues: | ||||
Total operating revenues | 356,918 | 204,697 | 843,929 | 398,242 |
Circulation | ||||
Operating revenues: | ||||
Total operating revenues | 342,646 | 150,850 | 717,369 | 303,015 |
Other | ||||
Operating revenues: | ||||
Total operating revenues | $ 67,436 | $ 48,840 | $ 154,385 | $ 90,730 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Adjustments | Common stock | Additional Paid-in Capital | Accumulated other comprehensive income (loss) | Retained Earnings (Accumulated Deficit) | Retained Earnings (Accumulated Deficit)Adjustments | Treasury stock |
Beginning balance at Dec. 30, 2018 | $ 717,223 | $ 115 | $ 605 | $ 721,605 | $ (6,881) | $ 3,767 | $ 115 | $ (1,873) |
Beginning balance (in shares) at Dec. 30, 2018 | 60,508,249 | 201,963 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | (6,291) | (6,291) | ||||||
Restricted share grants | 0 | $ 3 | (3) | |||||
Restricted share grants (in shares) | 298,202 | |||||||
Other comprehensive income, net of tax | (57) | (57) | ||||||
Equity-based compensation expense | 1,843 | 1,843 | ||||||
Purchase of treasury stock | (700) | $ (700) | ||||||
Purchase of treasury stock (in shares) | 52,721 | |||||||
Restricted share forfeiture (in shares) | 70,093 | |||||||
Dividends declared | (45,871) | (45,871) | ||||||
Ending balance at Jun. 30, 2019 | $ 666,262 | $ 608 | 677,574 | (6,938) | (2,409) | $ (2,573) | ||
Ending balance (in shares) at Jun. 30, 2019 | 60,806,451 | 324,777 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | |||||||
Beginning balance at Mar. 31, 2019 | $ 685,698 | $ 608 | 699,787 | (6,911) | (5,224) | $ (2,562) | ||
Beginning balance (in shares) at Mar. 31, 2019 | 60,806,451 | 276,590 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 2,815 | 2,815 | ||||||
Other comprehensive income, net of tax | (27) | (27) | ||||||
Equity-based compensation expense | 707 | 707 | ||||||
Purchase of treasury stock | (11) | $ (11) | ||||||
Purchase of treasury stock (in shares) | 955 | |||||||
Restricted share forfeiture (in shares) | 47,232 | |||||||
Dividends declared | (22,920) | (22,920) | ||||||
Ending balance at Jun. 30, 2019 | 666,262 | $ 608 | 677,574 | (6,938) | (2,409) | $ (2,573) | ||
Ending balance (in shares) at Jun. 30, 2019 | 60,806,451 | 324,777 | ||||||
Beginning balance at Dec. 31, 2019 | 981,356 | $ 1,294 | 1,090,694 | 8,202 | (115,958) | $ (2,876) | ||
Beginning balance (in shares) at Dec. 31, 2019 | 129,386,258 | 394,714 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | (517,045) | (517,045) | ||||||
Restricted share grants | 0 | $ 44 | (44) | |||||
Restricted share grants (in shares) | 4,346,313 | |||||||
Restricted stock awards settled, net of withholdings | (9,928) | $ 25 | (9,953) | |||||
Restricted stock awards settled, net of withholdings (in shares) | 2,508,585 | |||||||
Other comprehensive income, net of tax | (21,564) | (21,564) | ||||||
Equity-based compensation expense | 18,968 | 18,968 | ||||||
Issuance of common stock | 2,576 | $ 6 | 2,570 | |||||
Issuance of common stock (in shares) | 644,164 | |||||||
Purchase of treasury stock | (1,941) | $ (1,941) | ||||||
Purchase of treasury stock (in shares) | 317,687 | |||||||
Restricted share forfeiture | (1) | 0 | $ (1) | |||||
Restricted share forfeiture (in shares) | 58,572 | |||||||
Other activity | (336) | (336) | ||||||
Ending balance at Jun. 30, 2020 | 452,085 | $ 1,369 | 1,101,899 | (13,362) | (633,003) | $ (4,818) | ||
Ending balance (in shares) at Jun. 30, 2020 | 136,885,320 | 770,973 | ||||||
Beginning balance at Mar. 31, 2020 | 889,556 | $ 1,327 | 1,093,705 | (4,875) | (196,110) | $ (4,491) | ||
Beginning balance (in shares) at Mar. 31, 2020 | 132,715,532 | 657,165 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | (436,893) | (436,893) | ||||||
Restricted share grants | $ 36 | (36) | ||||||
Restricted share grants (in shares) | 3,531,279 | |||||||
Restricted stock awards settled, net of withholdings | (106) | $ 3 | (109) | |||||
Restricted stock awards settled, net of withholdings (in shares) | 251,250 | |||||||
Other comprehensive income, net of tax | (8,487) | (8,487) | ||||||
Equity-based compensation expense | 7,391 | 7,391 | ||||||
Issuance of common stock | 1,024 | $ 3 | 1,021 | |||||
Issuance of common stock (in shares) | 387,259 | |||||||
Purchase of treasury stock | (326) | $ (326) | ||||||
Purchase of treasury stock (in shares) | 55,236 | |||||||
Restricted share forfeiture | (1) | 0 | $ (1) | |||||
Restricted share forfeiture (in shares) | 58,572 | |||||||
Other activity | (73) | (73) | ||||||
Ending balance at Jun. 30, 2020 | $ 452,085 | $ 1,369 | $ 1,101,899 | $ (13,362) | $ (633,003) | $ (4,818) | ||
Ending balance (in shares) at Jun. 30, 2020 | 136,885,320 | 770,973 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Other comprehensive income, tax | $ 2,059 | $ 0 | $ 2,063 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (518,437,000) | $ (6,740,000) |
Adjustments to reconcile net income to operating cash flows: | ||
Depreciation and amortization | 144,352,000 | 44,251,000 |
Equity-based compensation expense | 18,968,000 | 1,843,000 |
Non-cash interest expense | 11,902,000 | 689,000 |
Loss on sale or disposal of assets | 745,000 | 2,737,000 |
Loss on early extinguishment of debt | 1,174,000 | 0 |
Goodwill and intangible impairment | 393,446,000 | 0 |
Impairment of property, plant and equipment | 6,859,000 | 2,469,000 |
Pension and other postretirement benefit obligations, net of contributions | (49,064,000) | (649,000) |
Change in other assets and liabilities, net | 14,695,000 | 13,053,000 |
Net cash provided by operating activities | 24,640,000 | 57,653,000 |
Cash flows from investing activities: | ||
Acquisitions, net of cash acquired | 0 | (39,353,000) |
Purchase of property, plant, and equipment | (22,157,000) | (4,934,000) |
Proceeds from sale of real estate and other assets | 17,792,000 | 7,107,000 |
Insurance proceeds received for damage to property | 1,643,000 | 0 |
Change in other investing activities | (304,000) | 0 |
Net cash used for investing activities | (3,026,000) | (37,180,000) |
Cash flows from financing activities: | ||
Repayment under term loans | (18,985,000) | (11,296,000) |
Borrowing under revolving credit facility | 0 | 102,900,000 |
Repayments under revolving credit facility | 0 | (94,900,000) |
Payments for employee taxes withheld from stock awards | (1,942,000) | (700,000) |
Issuance of common stock | 1,007,000 | 0 |
Payment of dividends | 0 | (46,066,000) |
Changes in other financing activities | (411,000) | 0 |
Net cash used for financing activities | (20,331,000) | (50,062,000) |
Effect of currency exchange rate change on cash | (780,000) | 3,000 |
Increase (decrease) in cash and cash equivalents and restricted cash | 503,000 | (29,586,000) |
Balance of cash, cash equivalents, and restricted cash at beginning of period | 188,664,000 | 52,770,000 |
Balance of cash, cash equivalents, and restricted cash at end of period | 189,167,000 | 23,184,000 |
Supplemental cash flow information: | ||
Cash paid for taxes, net of refunds | (1,720,000) | 921,000 |
Cash paid for interest | 125,311,000 | 22,684,000 |
Non-cash investing and financing activities: | ||
Accrued capital expenditures | $ 718,000 | $ 183,000 |
Basis of presentation and summa
Basis of presentation and summary of significant accounting policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation and summary of significant accounting policies | NOTE 1 — Basis of presentation and summary of significant accounting policies Description of business: Gannett Co., Inc. ("Gannett", "we", "us", "our", or the "Company") is an innovative, digitally focused media and marketing solutions company committed to fostering the communities in our network and helping them build relationships with their local businesses. On November 19, 2019, New Media Investment Group Inc. ("Legacy New Media") completed its acquisition of Gannett Co., Inc. (which was renamed Gannett Media Corp. and is referred herein as "Legacy Gannett"), which retained the name Gannett Co., Inc. and trades on the New York Stock Exchange under the ticker symbol "GCI". Our current portfolio of media assets includes USA TODAY, local media organizations in 46 states in the U.S. and Guam, and Newsquest (a wholly owned subsidiary operating in the United Kingdom (the "U.K.") with more than 140 local media brands). Gannett also owns the digital marketing services companies ReachLocal, Inc. ("ReachLocal"), UpCurve, Inc. ("UpCurve"), and WordStream, Inc. ("WordStream") and runs the largest media-owned events business in the U.S., GateHouse Live. Through USA TODAY, our local property network, and Newsquest, Gannett delivers high-quality, trusted content where and when consumers want to engage on virtually any device or platform. Additionally, the Company has strong relationships with 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 two segments: Publishing and Marketing Solutions . A full description of our segments is included in Note 14 — Segment reporting of the notes to the consolidated financial statements. COVID-19 Pandemic: The newspaper industry and the Company have experienced declining same-store revenue and profitability over the past several years, and these industry trends are expected to continue in the future. Additionally, during the six months ended June 30, 2020 , the Company experienced additional revenue and profitability declines in connection with the COVID-19 global pandemic. More specifically, during March 2020, the Company began to experience decreased demand for its advertising and digital marketing services, commercial print and distribution services, as well as reductions in the single copy and commercial distribution of its newspapers. At this point, the Company’s newspaper production operations have not been significantly impacted and the vast majority of the Company’s non-production employees are currently working remotely. However, the COVID-19 global pandemic had a significant negative impact on the Company’s business and results of operations during the second quarter of 2020, and we expect it to continue to have an impact in future periods. Longer-term, the impact of the COVID-19 pandemic on the Company’s business and results of operations will depend on the severity and length of the pandemic, the duration and extent of the mitigation measures and governmental actions designed to combat the pandemic, as well as the changes in customer behavior as a result of the pandemic, all of which are highly uncertain. As a result, the Company has implemented, and continues to implement, measures to reduce costs and preserve cash flow. These measures include suspension of the quarterly dividend, employee furloughs, decreases in employee compensation, as well as reductions in discretionary spending. In addition, the Company has deferred certain payroll tax remittance as permitted under the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") and negotiated the deferral of pension contributions, as well as continuing with its previously disclosed plan to monetize non-core assets. The Company believes these initiatives, along with cash on hand and cash provided by operating activities, will provide sufficient cash flow to enable the Company to meet its commitments. However, these measures will not be sufficient to fully offset the negative impact of the COVID-19 pandemic on the Company's business and results of operations. Basis of presentation: Our condensed consolidated financial statements 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, 2019 . 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 from those estimates. The COVID-19 pandemic has caused increased uncertainty in estimates and assumptions affecting the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements. Examples of significant estimates include pension and postretirement benefit obligation assumptions, income taxes, leases, self-insurance liabilities, impairment analysis, stock-based compensation, business combinations and valuation of property, plant and equipment and intangible assets. Actual results could differ from those estimates. Fiscal period: Starting in 2019 and subsequent to our acquisition of Legacy Gannett, our fiscal period end coincides with the Gregorian calendar. In periods prior to the acquisition, our fiscal periods ended on the last Sunday of the calendar month. Our fiscal period for the second quarter of 2019 was June 30, 2019 . Advertising and marketing services revenues: Pursuant to our acquisition of Legacy Gannett, we realigned the presentation of marketing services revenues generated by our UpCurve subsidiary from other revenues to advertising and marketing services revenue on the Condensed consolidated statements of operations and comprehensive income (loss) . As a result of this updated presentation, advertising and marketing services revenues increased and other revenues decreased $19.9 million for the three months ended June 30, 2019 and $34.8 million for the six months ended June 30, 2019 . Operating revenues, net income, retained earnings, and earnings per share remained unchanged. Segment presentation: In connection with our Legacy Gannett acquisition and as noted above, we reorganized our reportable segments to include (1) Publishing , which consists of our portfolio of regional, national, and international newspaper publishers and (2) Marketing Solutions , which is comprised of our marketing solutions subsidiaries ReachLocal, UpCurve and WordStream. In addition to these operating segments, we have a corporate category that includes activities not directly attributable to a specific segment. This category primarily consists of broad corporate functions and includes legal, human resources, accounting, analytics, finance, and marketing as well as activities and costs not directly attributable to a particular segment and other general business costs. 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. The following table presents a reconciliation of cash, cash equivalents, and restricted cash: June 30, In thousands 2020 2019 Cash and cash equivalents $ 158,603 $ 20,029 Restricted cash included in other current assets 9,298 3,155 Restricted cash included in investments and other assets 21,266 — Total cash, cash equivalents, and restricted cash $ 189,167 $ 23,184 New accounting pronouncements adopted: The following are new accounting pronouncements that we adopted in the first six months of 2020 : Financial Instruments—Credit Losses: In June 2016, the Financial Accounting Standards Board ("FASB") issued new guidance which amends the principles around the recognition of credit losses by mandating entities incorporate an estimate of current expected credit losses when determining the value of certain assets. The guidance also amends reporting around allowances for credit losses on available-for-sale marketable securities. This guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. Adopting this guidance did not have a material impact on our consolidated financial statements, refer to Note 4 — Accounts receivable, net for further details. Intangibles—Internal Use Software : In August 2018, the FASB issued new guidance which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. This guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in any interim period. The guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. This guidance was adopted prospectively and did not have a material impact on our consolidated financial statements. Capitalized costs are recognized within prepaid expenses and other current assets or other assets within the consolidated balance sheet. Fair Value Measurement—Disclosure Framework: In August 2018, the FASB issued new guidance that changes disclosure requirements related to fair value measurements as part of the disclosure framework project. The disclosure framework project aims to improve the effectiveness of disclosures in the notes to the financial statements by focusing on requirements that clearly communicate the most important information to users of the financial statements. This guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. Adopting this guidance did not have a material impact on our consolidated financial statements. New accounting pronouncements not yet adopted: The following are new accounting pronouncements that we are evaluating for future impacts on our financial statements: Compensation—Retirement Plans: In August 2018, the FASB issued new guidance that changes disclosures related to defined benefit pension and other postretirement benefit plans as part of the disclosure framework project. This guidance is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We are evaluating the provisions of the updated guidance and assessing the impact on our consolidated financial statements. Simplifying the Accounting for Income Taxes: In December 2019, 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. We are evaluating the provisions of the updated guidance and assessing the impact on our consolidated financial statements. |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | NOTE 2 — Revenues Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Revenues are recognized as performance obligations that are satisfied either at a point in time, such as when an advertisement is published, or over time, such as customer subscriptions. The Company’s Condensed consolidated statements of operations and comprehensive income (loss) presents revenues disaggregated by revenue type. Sales taxes and other usage-based taxes are excluded from revenues. The following table presents our revenues disaggregated by source: Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Print advertising $ 188,158 $ 158,205 $ 456,000 $ 309,105 Digital advertising and marketing services 168,760 46,492 387,929 89,137 Total advertising and marketing services 356,918 204,697 843,929 398,242 Circulation 342,646 150,850 717,369 303,015 Other 67,436 48,840 154,385 90,730 Total revenues $ 767,000 $ 404,387 $ 1,715,683 $ 791,987 Approximately 6% of our quarter to date and 7% of our year to date revenues were generated from international locations. Deferred revenue: The Company records deferred revenues when cash payments are received in advance of the Company’s performance obligation. The most significant unsatisfied performance obligation is the delivery of publications to subscription customers. The Company expects to recognize the revenue related to unsatisfied performance obligations over the next three to twelve months in accordance with the terms of the subscriptions. The Company's payment terms vary by the type and location of the customer and the products or services offered. The period between invoicing and when payment is due is not significant. For certain products or services and customer types, the Company requires payment before the products or services are delivered to the customer. The following table presents changes in the deferred revenue balance for the six months ended June 30, 2020 by type of revenue: In thousands Advertising, Marketing Services, and Other Circulation Total Beginning balance $ 67,543 $ 151,280 $ 218,823 Cash receipts 141,146 595,078 736,224 Revenue recognized (144,172 ) (596,887 ) (741,059 ) Ending balance $ 64,517 $ 149,471 $ 213,988 The Company’s primary source of deferred revenue is from circulation subscriptions paid in advance of the service provided. The majority of our subscription customers are billed and pay on monthly terms, but subscription periods can last between one and twelve months |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | NOTE 3 — Leases We lease certain real estate, vehicles, and equipment. Our leases have remaining lease terms of 1 to 15 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 June 30, 2020 , our Condensed consolidated balance sheets include $296.1 million of operating lease right-to-use assets, $44.7 million of short-term operating lease liabilities included in Other current liabilities , and $282.9 million of long-term operating lease liabilities. The components of lease expense were as follows: Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Operating lease cost (a) $ 24,437 $ 7,864 $ 48,321 $ 15,969 Short-term lease cost (b) 1,345 866 4,487 1,632 Net lease cost $ 25,782 $ 8,730 $ 52,808 $ 17,601 (a) Includes variable lease costs of $2.6 million and $0.2 million , respectively, and sublease income of $0.9 million and $0.6 million , respectively, for the three months ended June 30, 2020 and 2019 and variable lease costs of $6.8 million and $0.8 million , respectively, and sublease income of $2.0 million and $1.2 million , respectively, for the six months ended June 30, 2020 and 2019 . (b) Excluding expenses relating to leases with a lease term of one month or less. Future minimum lease payments under non-cancellable leases as of June 30, 2020 are as follows: In thousands Year ended December 31, (a) 2020 (excluding the six months ended June 30, 2020) $ 38,209 2021 81,131 2022 72,967 2023 60,508 2024 53,594 Thereafter 236,727 Total future minimum lease payments 543,136 Less: Imputed interest (215,575 ) Total $ 327,561 (a) Operating lease payments exclude $3.1 million of legally binding minimum lease payments for leases signed but not yet commenced. Other information related to leases were as follows: Six months ended June 30, In thousands, except lease term and discount rate 2020 2019 Supplemental information Cash paid for amounts included in the measurement of operating lease liabilities $ 38,989 $ 12,200 Right-of-use assets obtained in exchange for operating lease obligations 14,610 14,983 As of June 30, 2020 2019 Weighted-average remaining lease term (in years) 7.9 8.8 Weighted-average discount rate 12.78 % 10.58 % |
Accounts receivable, net
Accounts receivable, net | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Accounts receivable, net | 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 less 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 . The following table presents changes in the allowance for doubtful accounts for the six months ended June 30, 2020 : In thousands Beginning balance $ 19,923 Current period provision 17,345 Write-offs charged against the allowance (12,019 ) Recoveries of amounts previously written-off 1,467 Foreign currency (156 ) Ending balance $ 26,560 Each category 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 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. As of June 30, 2020 , the Company estimated future credit losses for trade receivables of $7.7 million due to the potential impacts of the COVID-19 pandemic. This adjustment to the reserve was based on the analysis of higher risk accounts, which include receivables with significant changes in payment timing and aged balances. While the Company continues to realize collectability on the majority of its trade receivables, the amounts and timing have been impacted as a result of the pandemic. The Company will continue to monitor the impact of the COVID-19 pandemic and the related impact on its receivables. For the three and six months ended June 30, 2020 , the Company recorded $12.2 million and $17.3 million in bad debt expense, included in Selling, general and administrative expenses on the Condensed consolidated statements of operations and comprehensive income (loss) . For the three and six months ended June 30, 2019 , the Company recorded $1.9 million and $4.0 million in bad debt expense included in Selling, general and administrative expenses on the Condensed consolidated statements of operations and comprehensive income (loss) . We did not record any one-time adjustments as a result of adopting the new guidance on credit losses. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 5 — Acquisitions 2019 Acquisitions The Company acquired substantially all the assets, properties, and business of Legacy Gannett on November 19, 2019 . The acquisition, which included the USA TODAY NETWORK (made up of USA TODAY and 109 local media organizations in 34 states in the U.S. and Guam, including digital sites and affiliates), ReachLocal, a marketing solutions company, and Newsquest (a wholly owned subsidiary of Legacy Gannett operating in the U.K. with more than 140 local media brands), was completed for an aggregate purchase price of $1.3 billion . The acquisition was financed from the Apollo term loan facility as described in Note 8 — Debt and the issuance of common stock to Legacy Gannett stockholders. The rationale for the acquisition was primarily the attractive nature of the various publications, businesses, and digital platforms as well as the estimated cash flows and cost-saving and revenue-generating opportunities. The following table summarizes the final fair values of the assets and liabilities for the Legacy Gannett acquisition as of June 30, 2020 . The final fair values are prior to the Company's annual impairment assessment; refer to Note 6 — Goodwill & Intangible Assets . In thousands Estimated fair value as previously reported (a) Measurement period adjustments (b) Final fair value as adjusted Cash and restricted cash acquired $ 149,452 $ — $ 149,452 Current assets 383,965 — 383,965 Other assets 97,459 — 97,459 Property, plant and equipment 536,511 — 536,511 Operating lease assets 200,550 — 200,550 Developed technology 47,770 (11,670 ) 36,100 Advertiser relationships 272,740 (16,580 ) 256,160 Subscriber relationships 104,490 6,100 110,590 Other customer relationships 63,820 3,540 67,360 Trade names 16,470 (630 ) 15,840 Mastheads 97,340 8,420 105,760 Goodwill 644,766 13,018 657,784 Total assets 2,615,333 2,198 2,617,531 Current liabilities 513,752 95 513,847 Long-term liabilities 787,019 2,103 789,122 Total liabilities 1,300,771 2,198 1,302,969 Net assets $ 1,314,562 $ — $ 1,314,562 (a) As previously reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. (b) The Company recorded measurement period adjustments during the six months ended June 30, 2020 . The measurement period adjustments were primarily related to obtaining new facts and circumstances that existed as of the acquisition date that impact the financial projections and carrying values used to value acquired assets and liabilities, including the finalization of certain contracts with customers that impacted the value of intangible assets recorded. The increase to Long-term liabilities was primarily the result of $5.8 million in multi-employer pension liabilities offset by a decrease of $4.0 million in deferred tax liabilities. All measurement period adjustments were offset against Goodwill. Outside of the Legacy Gannett acquisition, the Company also acquired substantially all the assets, properties and business of certain publications and businesses in 2019 , which included 11 daily newspapers, 11 weekly publications, nine shoppers, a remnant advertising agency, five events production businesses, and a business community and networking platform for an aggregate purchase price of $53.4 million including working capital. Additional consideration is earned based on the achievement of EBITDA targets outlined in the asset purchase agreement for specified acquisitions. As of June 30, 2020 , $7.0 million of the consideration is payable to the former stockholders and is included in Other current liabilities in the Condensed consolidated balance sheets . The acquisitions were financed from cash on hand. The rationale for the acquisitions was primarily the attractive nature, as applicable, of the various publications, businesses, and digital platforms as well as the estimated cash flows and cost-saving and revenue-generating opportunities available. The following table summarizes the final fair values of the assets and liabilities for the aforementioned acquisitions. in thousands Estimated fair value as previously reported (a) Measurement period adjustments (b) Final fair value as adjusted Cash acquired $ 323 $ — $ 323 Current assets 9,320 (112 ) 9,208 Other assets 950 — 950 Property, plant and equipment 20,492 730 21,222 Non-compete agreements 280 — 280 Advertiser relationships 2,357 279 2,636 Subscriber relationships 1,457 — 1,457 Other customer relationships 1,323 2,942 4,265 Software 140 2,130 2,270 Trade names 299 2,105 2,404 Mastheads 2,896 — 2,896 Goodwill 20,850 (1,248 ) 19,602 Total assets 60,687 6,826 67,513 Current liabilities assumed 11,961 — 11,961 Long-term liabilities assumed 463 50 513 Total liabilities 12,424 50 12,474 Minority interest $ 1,651 $ — $ 1,651 Net assets $ 46,612 $ 6,776 $ 53,388 (a) As previously reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. (b) During the six months ended June 30, 2020 , the Company recognized a contingent liability of $7.0 million for earnout payments not made and finalized the allocation of purchase price to certain customer relationships, software, and trade name intangible assets acquired. Pro forma information: The following table sets forth unaudited pro forma results of operations assuming the Legacy Gannett acquisition, along with transactions necessary to finance the acquisition, occurred at the beginning of 2019: Three months ended Six months ended In thousands; unaudited June 30, 2019 June 30, 2019 Total revenues $ 1,063,689 $ 2,113,678 Net income (loss) 88 (52,081 ) Earnings (loss) per share - diluted $ 0.00 $ (0.42 ) |
Goodwill & Intangible Assets
Goodwill & Intangible Assets | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill & Intangible Assets | NOTE 6 — Goodwill & Intangible Assets Goodwill and intangible assets consisted of the following: in thousands June 30, 2020 Gross carrying amount Accumulated amortization Net carrying amount Amortized intangible assets (a) : Advertiser relationships $ 496,285 $ 100,061 $ 396,224 Other customer relationships 112,740 21,329 91,411 Subscriber relationships 265,491 60,059 205,432 Other intangible assets 70,317 19,076 51,241 Total $ 944,833 $ 200,525 $ 744,308 Non-amortized intangible assets: Goodwill $ 559,623 Mastheads (a) 176,217 Total $ 735,840 December 31, 2019 Gross carrying amount Accumulated Net carrying amount Amortized intangible assets: Advertiser relationships $ 534,161 $ 75,363 $ 458,798 Other customer relationships 109,674 14,303 95,371 Subscriber relationships 259,391 44,878 214,513 Other intangible assets 76,552 11,229 65,323 Total $ 979,778 $ 145,773 $ 834,005 Non-amortized intangible assets: Goodwill $ 914,331 Mastheads $ 178,559 Total $ 1,092,890 (a) Includes measurement period adjustments for the Legacy Gannett and other 2019 acquisitions. Refer to Note 5 — Acquisitions . The balances and changes in the carrying amount of goodwill by segment are as follows: in thousands Publishing (a) Marketing Solutions Consolidated Gross balance at December 31, 2019 $ 800,606 $ 201,646 $ 1,002,252 Accumulated impairments (84,272 ) (3,649 ) (87,921 ) Net balance at December 31, 2019 $ 716,334 $ 197,997 $ 914,331 Activity during the six months ended June 30, 2019: Goodwill impairment (321,851 ) (40,499 ) (362,350 ) Measurement period adjustments 70,558 (58,788 ) 11,770 Foreign currency exchange rate changes (4,128 ) — (4,128 ) Total $ (255,421 ) $ (99,287 ) $ (354,708 ) Gross balance at June 30, 2020 $ 866,052 $ 142,858 $ 1,008,910 Accumulated impairments (405,139 ) (44,148 ) (449,287 ) Net balance at June 30, 2020 $ 460,913 $ 98,710 $ 559,623 (a) The Publishing segment includes the Domestic Publishing and Newsquest reporting units. Consistent with the Company’s past practice, the Company performed its annual goodwill and indefinite-lived intangible (masthead) impairment assessment in the second quarter of 2020 with the assistance of third-party valuation specialists. Within the impairment analyses performed, the Company considered the current and expected future economic and market conditions and the impact on the fair value of each of the reporting units. The primary factors impacting the decrease in fair value include the current and expected impact of the COVID-19 pandemic on the Company’s operations. The most significant assumptions utilized in the determination of the estimated fair values include revenue and EBITDA projections, discount rates and long-term growth rates. The long-term growth rates are dependent on overall market growth rates, the competitive environment, inflation and relative currency exchange rates and could be adversely impacted by a sustained decrease in any of these measures, all of which the Company considered in determining the long-term growth rates used in the analysis, which ranged from negative 0.5% to 3% . The discount rate, which is consistent with a weighted average cost of capital that is likely to be expected by a market participant, is based upon industry required rates of return, including consideration of both debt and equity components of the capital structure. The discount rate may be impacted by adverse changes in the macroeconomic environment and volatility in the equity and debt markets. The Company considered these factors in determining the discount rates used in the analysis, which ranged from 10.0% to 15.5% . For mastheads, the Company applied a “relief from royalty” approach, a discounted cash flow model, reflecting current assumptions, to fair value the indefinite-lived intangible assets. We compared the fair value of each indefinite-lived asset to its carrying amount, and accordingly, the Company recorded impairments of $4.0 million in both our Domestic Publishing and Newsquest reporting units. The Company considered the impact of the COVID-19 pandemic on the Company’s operations to be an indicator of impairment under ASC 360. The Company performed a recoverability test for the long-lived asset groups, reflecting current assumptions, to determine whether an impairment loss should be measured. The undiscounted cash flows used in the recoverability test for the Newsquest long-lived asset group were less than the long-lived asset group carrying amount. The Company calculated the fair value of the long-lived asset group and recorded a $23.0 million impairment to advertiser and other customer relationships intangible assets. The discount rate and long-term growth rate assumptions were consistent with the Goodwill assumptions discussed above. Refer Note 7 — Integration and reorganization costs and impairments of property, plant and equipment , for further details on the impairment of property, plant and equipment. For goodwill, the Company primarily utilized a discounted cash flow method to calculate the fair value of each reporting unit. Market-based metrics were reviewed to evaluate the reasonableness of the Company’s calculation. The Company compared the fair value of each reporting unit to its carrying amount, which resulted in the carrying value of all the reporting groups being in excess of the fair value. As a result, we recorded goodwill impairment charges in the second quarter of $256.5 million , $65.4 million and $40.5 million in our Domestic Publishing, Newsquest and Marketing Solutions reporting units, respectively. The severity and length of the COVID-19 pandemic, the duration and extent of the mitigation measures and governmental actions designed to combat the pandemic, as well as the changes in customer behavior as a result of the pandemic, all of which are highly uncertain and difficult to predict at the current time, could negatively impact the Company’s future assessment of its results of operations and the underlying assumptions utilized in the determination of the estimated fair values of the reporting units and related mastheads. The newspaper industry and the Company have experienced declining same-store revenue and profitability over the past several years. Should general economic, market or business conditions continue to decline and have a negative impact on estimates of future cash flow and market transaction multiples, the Company may be required to record additional impairment charges in the future. |
Integration and reorganization
Integration and reorganization costs and impairments of property, plant and equipment | 6 Months Ended |
Jun. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Integration and reorganization costs and long-lived asset impairments | NOTE 7 — Integration and reorganization costs and impairments of property, plant and equipment 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. All costs related to these programs, which primarily include severance expense, are accrued at the time of the program announcement. Severance-related expenses: We recorded severance-related expenses by segment as follows: Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Publishing $ 19,142 $ 2,676 $ 31,418 $ 4,656 Marketing Solutions 2,753 180 4,137 736 Corporate and Other 3,847 24 11,966 901 Total $ 25,742 $ 2,880 $ 47,521 $ 6,293 A rollforward of the accrued severance and related costs included in accrued expenses on the Condensed consolidated balance sheets for the six months ended June 30, 2020 are as follows: In thousands Beginning balance $ 30,785 Restructuring provision included in integration and reorganization costs 47,521 Cash payments (47,641 ) Ending balance $ 30,665 The restructuring reserve balance is expected to be paid out over the next twelve months. Facility consolidation and other restructuring-related expenses: We recorded facility consolidation charges and other restructuring-related costs by segment as follows: Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Publishing $ 1,477 $ 1,398 $ 2,509 $ 1,803 Marketing Solutions 209 — 214 — Corporate and Other 4,878 — 10,316 1,981 Total $ 6,564 $ 1,398 $ 13,039 $ 3,784 Impairment of property, plant and equipment and accelerated depreciation: As part of ongoing cost efficiency programs, the Company has ceased a number of print operations. In addition, as a result of the Company's annual goodwill and indefinite-lived intangible impairment analysis, the Company performed a recoverability test for long-lived assets groups. There were $6.9 million of property, plant and equipment impairment charges recorded for the three months ended June 30, 2020 by the Publishing segment as a result of this test and $1.3 million property, plant and equipment impairment charges recorded for the same period in 2019 by the Corporate and other segment as a result of cost efficiency programs. For the six months ended June 30, 2020 , there were $6.9 million property, plant and equipment impairment charges recorded by the Publishing segment. There were $2.5 million property, plant and equipment impairment charges recorded for the same period in 2019 by the Corporate and other segment. We incurred $11.0 million accelerated depreciation for the three months ended June 30, 2020 . $2.6 million of accelerated depreciation was incurred for the same period in 2019 . For the three months ended June 30, 2020 , accelerated depreciation expenses were related to the publishing segment and are included within depreciation expense. We incurred $35.8 million of accelerated depreciation for the six months ended June 30, 2020 . $2.6 million of accelerated depreciation was incurred for the same period in 2019 . For the six months ended June 30, 2020 , accelerated depreciation expenses were related to the Publishing segment and are included within depreciation expense. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 8 — Debt Apollo Term Loan In November 2019 , pursuant to the acquisition of Legacy Gannett, the Company entered into a five -year, senior-secured term loan facility with Apollo Capital Management, L.P. ("Apollo") in an aggregate principal amount of approximately $1.8 billion . The term loan facility, which matures on November 19, 2024 , generally bears interest at the rate of 11.5% per annum. Origination fees totaled 6.5% of the total principal amount of the financing at closing. Pursuant to the agreement, Apollo has the right to designate two individuals to attend Board of Directors meetings as non-fiduciary and non-voting observers and participants. In addition, if the total gross leverage ratio exceeds certain thresholds, Apollo has the right to appoint up to two voting directors. Upon the occurrence and during the continuance of an Event of Default (as defined in the term loan facility), the interest rate increases by 2.0% . The term loan facility contains customary covenants and events of default, including a covenant that the Company have at least $20 million of unrestricted cash on the last day of each fiscal quarter. The term loan facility is required to be prepaid with (i) any unrestricted cash in excess of $40 million at the end of fiscal year 2020 and fiscal year 2021, (ii) 50% of excess cash flow (as such term is defined in the term loan facility) measured at the end of each fiscal quarter (beginning with the third quarter of 2020), subject to a step-up to 90% of excess cash flow for each period in fiscal year 2021 or later if the ratio of consolidated debt to EBITDA (as such terms are defined in the term loan facility) is greater than or equal to 1.00 to 1.00, and (iii) 100% of the net proceeds of any non-ordinary course asset sales. The term loan facility prohibits the payment of cash dividends prior to the thirtieth day of the second quarter of 2020, and thereafter permits payment of cash dividends up to an agreed-upon amount, provided that the ratio of consolidated debt to EBITDA (as such terms are defined therein) does not exceed a specified threshold. As of June 30, 2020 , the Company is in compliance with all of the covenants and obligations under the term loan facility. In connection with the Apollo term loan facility, the Company incurred approximately $4.9 million of fees and expenses and $116.6 million of lender fees which were capitalized and will be amortized over the term of the term loan facility using the effective interest method. The Company used the proceeds of the term loan facility to (i) partially fund the acquisition of Legacy Gannett, (ii) repay, prepay, repurchase, redeem, or otherwise discharge in full each of the existing financing facilities (as defined in the agreement and discussed in part below), and (iii) pay fees and expenses incurred to obtain the term loan facility. The Company is permitted to prepay the principal of the term loan facility, in whole or in part, at par plus accrued and unpaid interest, without any prepayment premium or penalty. The term loan facility is guaranteed by the material wholly-owned subsidiaries of the Company, and all obligations of the Company and its subsidiary guarantors are or will be secured by first priority liens on certain material real property, equity interests, land, buildings, and fixtures. The term loan facility contains customary representations and warranties, affirmative covenants, and negative covenants applicable to the Company and its subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, fundamental changes, dispositions, dividends and other distributions, capital expenditures, and events of default. As of June 30, 2020 , the Company had $1.7 billion in aggregate principal outstanding under the term loan facility, $4.4 million of deferred financing costs, and $99.4 million of capitalized lender fees. During the three and six months ended June 30, 2020 , the Company recorded $50.6 million and $101.4 million in interest expense, respectively, $5.9 million and $11.8 million in amortization of deferred financing costs, respectively, and $0.4 million and $1.2 million for loss on early extinguishment of debt, respectively. During the three months ended June 30, 2020 , the Company paid $124.7 million in interest. The effective interest rate is 12.9% . Convertible debt On April 9, 2018 , Legacy Gannett completed an offering of 4.75% convertible senior notes, resulting in total aggregate principal of $201.3 million and net proceeds of approximately $195.3 million . Interest on the notes is payable semi-annually in arrears. The notes mature on April 15, 2024 with our earliest redemption date being April 15, 2022 . The stated conversion rate of the notes is 82.4572 shares per $1,000 in principal or approximately $12.13 per share. The Company's acquisition of Legacy Gannett constituted a Fundamental Change and Make-Whole Fundamental Change under the terms of the indenture governing the notes. At the acquisition date, the Company delivered to noteholders a notice offering the right to surrender all or a portion of their notes for cash on December 31, 2019 . On December 31, 2019 , we completed the redemption of $198.0 million in aggregate principal in exchange for cash. The $3.3 million principal value of the remaining notes outstanding is reported as convertible debt in the Condensed consolidated balance sheets . The effective interest rate on the notes was 6.05% as of June 30, 2020 |
Pensions and other postretireme
Pensions and other postretirement benefit plans | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Pensions and other postretirement benefit plans | NOTE 9 — Pensions and other postretirement benefit plans We, along with our subsidiaries, have various defined benefit retirement plans, including plans established under collective bargaining agreements. Our retirement plans include the Gannett Retirement Plan ("GRP"), Newsquest and Romanes Pension Schemes in the U.K. ("U.K. Pension Plans"), and other defined benefit and defined contribution plans. We also provide health care and life insurance benefits to certain retired employees who meet age and service requirements. Retirement plan costs include the following components: Three months ended June 30, 2020 2019 In thousands Pension OPEB Pension OPEB Operating expenses: Service cost - Benefits earned during the period $ 704 $ 19 $ 159 $ — Non-operating expenses (Other income): Interest cost on benefit obligation 20,416 593 736 22 Expected return on plan assets (38,551 ) — (936 ) — Amortization of actuarial loss (gain) (27 ) 16 (39 ) 9 Total non-operating expenses (benefit) $ (18,162 ) $ 609 $ (239 ) $ 31 Total expense (benefit) for retirement plans $ (17,458 ) $ 628 $ (80 ) $ 31 Six months ended June 30, 2020 2019 In thousands Pension OPEB Pension OPEB Operating expenses: Service cost - Benefits earned during the period $ 1,385 $ 52 $ 317 $ — Non-operating expenses (Other income): Interest cost on benefit obligation 41,133 1,160 1,473 45 Expected return on plan assets (78,367 ) — (1,875 ) — Amortization of actuarial loss (gain) (54 ) 29 (78 ) 18 Total non-operating expenses (benefit) $ (37,288 ) $ 1,189 $ (480 ) $ 63 Total expense (benefit) for retirement plans $ (35,903 ) $ 1,241 $ (163 ) $ 63 During the six months ended June 30, 2020 , we contributed $10.2 million and $4.3 million to our pension and other postretirement plans, respectively. In response to the COVID-19 pandemic, our U.K. Pension Plans have negotiated deferral of $12 million in 2020 contributions to be paid in 2021 and our GRP in the U.S. has deferred our contractual contributions and negotiated a contribution payment plan of $5 million per quarter starting December 31, 2020 through the end of the September 30, 2022. Additionally, $11 million in minimum required contributions for the 2019 plan year, as required by the Employee Retirement Income Security Act of 1974 ("ERISA"), have been deferred until January 1, 2021. |
Income taxes
Income taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income taxes | NOTE 10 — Income taxes The following table outlines our pre-tax net income (loss) and income tax amounts: Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Pre-tax net income (loss) $ (472,107 ) $ 2,272 $ (543,734 ) $ (9,037 ) Benefit for income taxes (34,276 ) (343 ) (25,297 ) (2,297 ) Effective tax rate 7.3 % *** 4.7 % 25.4 % *** Indicates a percentage that is not meaningful. The benefit for income taxes for the three months ended June 30, 2020 was caused largely by the pre-tax net loss generated during the quarter. The benefit from income taxes was reduced due to non-deductible asset impairments, non-deductible officers' compensation, and the creation of a valuation allowance against deferred tax assets arising from non-deductible interest carryforwards. These non-deductible expenses resulted in an estimated annual effective tax rate lower than the statutory Federal rate of 21 %. The benefit for income taxes for the three months ended June 30, 2020 was calculated using the estimated annual effective tax rate of 6.8% . The estimated annual effective tax rate is based on a projected tax benefit for the year. The CARES Act was enacted on March 27, 2020. The Company will realize a tax benefit attributable to the legislation which permits a refund of tax benefits from earlier years. The legislation also allows the Company to defer certain employer payroll tax payments in 2020 to the end of 2021 and 2022. Finally, the Company is evaluating and may pursue Employee Retention Tax Credits as provided under the CARES Act. The Company continually monitors guidance from the U.S. Department of the Treasury (the "Treasury") and the Internal Revenue Service to determine whether additional tax benefits are available from this legislation and similar stimulus efforts. The Tax Cuts and Jobs Act of 2007 (“TCJA”) revised business interest expense limitations under I.R.C. Section 163(j) such that business interest deductions are not allowed in amounts exceeding prescribed percentages of EBITDA for tax years beginning before January 1, 2022. For tax years beginning after January 1, 2022, deductible interest cannot exceed prescribed percentages of EBIT. Unused business interest deductions are carried forward and recorded as deferred tax assets. The Company has evaluated the potential utilization of such carryforward deferred tax assets and determined full valuation allowances are appropriate as future utilization is uncertain. The total amount of unrecognized tax benefits that, if recognized, may impact the effective tax rate was approximately $33.8 million as of June 30, 2020 and $32.4 million as of December 31, 2019 . The amount of accrued interest and penalties payable related to unrecognized tax benefits was $2.3 million as of June 30, 2020 and $1.9 million as of December 31, 2019 . |
Supplemental equity information
Supplemental equity information | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Supplemental equity information | NOTE 11 — Supplemental equity information Earnings (loss) per share The following table sets forth the computation of basic and diluted earnings (loss) per share: in thousands, except share data Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Net income (loss) attributable to Gannett $ (436,893 ) $ 2,815 $ (517,045 ) $ (6,291 ) Basic weighted average shares outstanding 131,471 60,031 130,999 59,998 Diluted weighted average shares outstanding 131,471 60,031 130,999 59,998 The Company excluded the following securities from the computation of diluted income per share because their effect would have been antidilutive: Three months ended June 30, Six months ended June 30, in thousands, except share data 2020 2019 2020 2019 Stock warrants 1,362 1,362 1,362 1,362 Stock options 6,068 2,905 6,068 2,905 Restricted stock grants 8,510 450 8,510 450 Share repurchase program On May 17, 2017, the Board of Directors authorized the repurchase of up to $100.0 million of the Company's common stock, par value $0.01 per share ("Common Stock") over the next twelve months ("Share Repurchase Program"). The Board of Directors had authorized extensions of the Share Repurchase Program through May 19, 2020. The plan expired on May 19, 2020 with no extension or replacement plan in place. No shares were repurchased under the program during the six months ended June 30, 2020 . Manager stock options Pursuant to the anti-dilution provisions of the Incentive Plan, the exercise price on the 652,311 remaining options granted to the Company's manager, FIG LLC (the "Manager") in 2014 were equitably adjusted during the six months ended June 30, 2019 from $12.95 to $11.46 as a result of return of capital distributions. Also, these options were equitably adjusted during the six months ended June 30, 2020 from $11.46 to $9.94 as a result of return of capital distributions. Pursuant to the anti-dilution provisions of the Incentive Plan, the exercise price on the 700,000 options granted to the Manager in 2015 were equitably adjusted during the six months ended June 30, 2019 from $18.94 to $17.45 as a result of return of capital distributions. Also, these options were equitably adjusted during the six months ended June 30, 2020 from $17.45 to $15.93 as a result of return of capital distributions. Pursuant to the anti-dilution provisions of the Incentive Plan, the exercise price on the 862,500 options granted to the Manager in 2016 were equitably adjusted during the six months ended June 30, 2019 from $13.24 to $11.75 as a result of return of capital distributions. Also, these options were equitably adjusted during the six months ended June 30, 2020 from $11.75 to $10.23 as a result of return of capital distributions. Pursuant to the anti-dilution provisions of the Incentive Plan, the exercise price on the 690,000 options granted to the Manager in 2018 were equitably adjusted during the six months ended June 30, 2019 from $16.45 to $14.96 as a result of return of capital distributions. Also, these options were equitably adjusted during the six months ended June 30, 2020 from $14.96 to $13.44 as a result of return of capital distributions. The following table includes additional information regarding the Manager stock options: in thousands, except share data Number of Options Weighted-Average Grant Date Fair Value Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value ($000) Outstanding at December 31, 2019 6,068 $ 1.78 $ 14.70 8.2 $ — Granted — $ — $ — Outstanding at June 30, 2020 6,068 $ 1.78 $ 13.97 7.7 $ — Exercisable at June 30, 2020 3,551 $ 1.78 $ 12.94 6.5 $ — Stock compensation The Company recognized compensation cost for share-based payments of $7.4 million and $19.0 million for the three and six months ended June 30, 2020 , respectively, and $0.7 million and $1.8 million for the three and six months ended June 30, 2019 , respectively. The total compensation cost not yet recognized related to non-vested awards as of June 30, 2020 was $25.6 million , which is expected to be recognized over a weighted average period of 2.1 years through July 2022. Restricted stock grants (“RSGs”) The following table outlines restricted stock unit ("RSU") and performance stock unit ("PSU") award activity specific to Legacy Gannett for the six months ended June 30, 2020 : Six months ended June 30, 2020 in thousands, except per share data Number RSUs & PSUs Weighted- Unvested at beginning of period 7,368 $ 6.28 Granted 282 0.90 Vested (3,012 ) 6.28 Forfeited (371 ) 2.31 Unvested at end of period 4,267 $ 6.27 Restricted stock award activity was as follows: Six months ended June 30, 2020 2019 in thousands, except per share data Number of RSGs Weighted- Average Grant Date Fair Value Number of RSGs Weighted- Unvested at beginning of period 317 $ 14.61 384 $ 16.11 Granted 5,248 3.91 298 13.65 Vested (1,041 ) 6.19 (162 ) 15.90 Forfeited (283 ) 2.21 (70 ) 15.27 Unvested at end of period 4,241 $ 4.26 450 $ 14.69 As of June 30, 2020 , the consolidated aggregate intrinsic value of unvested RSGs was $11.7 million . Rights Agreement On April 6, 2020, the Company's Board of Directors adopted a stockholder rights plan in the form of a Section 382 Rights Agreement ("Rights Agreement") to preserve and protect the Company's income tax net operating loss carryforwards ("NOLs") and other tax assets. As of December 31, 2019 , the Company had approximately $435 million of NOLs available which could be used in certain circumstance to offset future federal taxable income. Under the Rights Agreement, the Board declared a non-taxable dividend of one preferred share purchase right for each outstanding share of Common Stock. The rights will be exercisable only if a person or group acquires 4.99% or more of Gannett’s Common Stock. Gannett’s existing shareholders 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 shareholders 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 percent discount or Gannett may exchange each right held by such holders for one share of Common Stock. Rights held by the person or group triggering the rights will become void and will not be exercisable. The Board of Directors has the discretion to exempt any person or group from the provisions of the Rights Agreement. The rights issued under the Rights Agreement will expire on the day following the certification of the voting results for Gannett’s 2021 annual meeting of shareholders, unless Gannett’s shareholders ratify the Rights Agreement at or prior to such meeting, in which case the Rights Agreement will continue in effect until April 5, 2023. The Board of Directors also has the ability to terminate the plan if it determines that doing so would be in the best interest of Gannett’s stockholders. The rights may also expire at an earlier date if certain events occur, as described more fully in the Rights Agreement filed by the Company with the Securities and Exchange Commission. The Apollo term loan facility was amended April 6, 2020, to allow for the Rights Agreement. There were no issuances of preferred stock during the three months ended June 30, 2020 . Accumulated other comprehensive loss The following tables summarize the components of, and the changes in, Accumulated other comprehensive loss (net of tax) for the six months ended June 30, 2020 and 2019 : Six months ended June 30, 2020 In thousands Retirement Plans Foreign Currency Translation Total Beginning balance $ 936 $ 7,266 $ 8,202 Other comprehensive income (loss) before reclassifications (4,961 ) (16,585 ) (21,546 ) Amounts reclassified from accumulated other comprehensive loss (1) (18 ) — (18 ) Net current period other comprehensive income (loss), net of taxes (4,979 ) (16,585 ) (21,564 ) Ending balance $ (4,043 ) $ (9,319 ) $ (13,362 ) (1) This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 9 — Pensions and other postretirement benefit plans Six months ended June 30, 2019 In thousands Retirement Plans Foreign Currency Translation Total Beginning balance $ (6,881 ) $ — $ (6,881 ) Other comprehensive income (loss) before reclassifications — 3 3 Amounts reclassified from accumulated other comprehensive loss (1) (60 ) — (60 ) Net current period other comprehensive income (loss), net of taxes (60 ) 3 (57 ) Ending balance $ (6,941 ) $ 3 $ (6,938 ) (1) This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 9 — Pensions and other postretirement benefit plans Accumulated other comprehensive loss components are included in computing net periodic postretirement costs as outlined in NOTE 9 — Pensions and other postretirement benefit plans . Reclassifications out of accumulated other comprehensive loss related to these postretirement plans include the following: Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Amortization of prior service credit, net $ — $ — $ — $ — Amortization of actuarial gain (11 ) (30 ) (25 ) (60 ) Total reclassifications, before tax (11 ) (30 ) (25 ) (60 ) Income tax effect 3 — 7 — Total reclassifications, net of tax $ (8 ) $ (30 ) $ (18 ) $ (60 ) Dividends The Company did no t pay dividends during the six months ended June 30, 2020 and paid dividends of $46.1 million for the six months ended June 30, 2019 . On April 1, 2020, the Company announced that in light of the unprecedented economic disruption and uncertainty caused by the COVID-19 pandemic, the Board of Directors had determined that it is in the best interests of shareholders for the Company to preserve liquidity by suspending the Company’s quarterly dividend. |
Fair value measurement
Fair value measurement | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair value measurement | NOTE 12 — Fair value measurement We measure and record certain assets and liabilities at fair value. A fair value measurement is determined based on market assumptions that a market participant would use in pricing an asset or liability. A three-tiered hierarchy draws distinctions between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted active markets that are observable either directly or indirectly (Level 2), and (iii) unobservable inputs that require use of our own estimates and assumptions through present value and other valuation techniques in determination of fair value (Level 3). As of June 30, 2020 and December 31, 2019 , assets and liabilities recorded at fair value and measured on a recurring basis primarily consist of pension plan assets. As permitted by U.S. GAAP, we use net asset values as a practical expedient to determine the fair value of certain investments. These investments measured at net asset value have not been classified in the fair value hierarchy. The term loan facility is recorded at carrying value, which approximates fair value, in the Condensed consolidated balance sheets and is classified as Level 3. We also have certain assets requiring fair value measurement on a non-recurring basis. Our assets measured on a non-recurring basis are assets held for sale, which are classified as Level 3 assets and evaluated using executed purchase agreements, letters of intent, or third-party valuation analyses when certain circumstances arise. Assets held for sale totaled $21.6 million as of June 30, 2020 and $25.5 million as of December 31, 2019 . |
Commitments, contingencies and
Commitments, contingencies and other matters | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, contingencies and other matters | NOTE 13 — Commitments, contingencies and other matters The Company is and may become involved from time to time in legal proceedings in the ordinary course of its business, including but not limited to with respect to such matters as libel, invasion of privacy, intellectual property infringement, wrongful termination actions, complaints alleging employment discrimination, and regulatory investigations and inquiries. In addition, the Company is involved from time to time in governmental and administrative proceedings concerning employment, labor, environmental, and other claims. Insurance coverage mitigates potential loss for certain of these matters. Historically, such claims and proceedings have not had a material adverse effect on the Company’s consolidated results of operations or financial position. Equity purchase arrangements that are exercisable by the counterparty to the agreement and that are outside the sole control of the Company are accounted for in accordance with ASC 480-10-S99-3A and are classified as Redeemable noncontrolling interests in the Condensed consolidated balance sheets . Environmental contingency: 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. Other litigation: We are defendants in judicial and administrative proceedings involving matters incidental to our business. Although the Company is unable to predict with certainty the eventual outcome of any litigation, regulatory investigation or inquiry, in the opinion of management, the Company does not expect its current and any threatened legal proceedings to have a material adverse effect on the Company’s business, financial position or consolidated results of operations. Given the inherent unpredictability of these types of proceedings, however, it is possible that future adverse outcomes could have a material effect on the Company’s financial results. |
Segment reporting
Segment reporting | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment reporting | NOTE 14 — Segment reporting We define our reportable segments based on the way the Chief Operating Decision Maker ("CODM"), which for the second quarter of 2020 comprised the Chief Executive Officer and the former Chief Executive Officer of our operating subsidiary, manages the operations for purposes of allocating resources and assessing performance. Our reportable segments include the following: • Publishing , which consists of our portfolio of local, regional, national, and international newspaper publishers. The results of this segment include local, classified, and national advertising revenues consisting of both print and digital advertising, circulation revenues from the distribution of our publications on our digital platforms, home delivery of our publications, single copy sales, and other revenues from commercial printing, events, and distribution arrangements. The Publishing reportable segment is an aggregation of two operating segments: Domestic Publishing and the U.K. • Marketing Solutions , which is comprised of our digital marketing solutions subsidiaries ReachLocal and UpCurve. 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, and software-as-a-service solutions. In addition to the above operating segments, we have a Corporate and other category that includes activities not directly attributable to a specific segment. This category primarily consists of broad corporate functions and includes legal, human resources, accounting, finance, and marketing as well as other general business costs. In the ordinary course of business, our reportable segments enter into transactions with one another. While intersegment transactions are treated like third-party transactions to determine segment performance, the revenues and expenses recognized by the segment that is the counterparty to the transaction are eliminated in consolidation and do not affect consolidated results. The CODM uses adjusted EBITDA to evaluate the performance of the segments and allocate resources. Adjusted EBITDA is a financial performance measure we believe offers a useful view of the overall operation of our businesses and may be different than similarly-titled measures used by other companies. We define Adjusted EBITDA as net income (loss) from continuing operations attributable to Gannett before (1) income tax expense (benefit), (2) interest expense, (3) gains or losses on early extinguishment of debt, (4) non-operating items, primarily pension costs, (5) depreciation and amortization, (6) integration and reorganization costs, (7) impairment of property, plant and equipment, (8) goodwill and intangible impairments, (9) net loss (gain) on sale or disposal of assets, (10) equity-based compensation, (11) acquisition costs, and (12) certain other non-recurring charges. Management considers adjusted EBITDA to be the appropriate metric to evaluate and compare the ongoing operating performance of our segments on a consistent basis across reporting periods as it eliminates the effect of items which we do not believe are indicative of each segment's core operating performance. The following tables present our segment information: Three months ended June 30, 2020 In thousands Publishing Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 266,398 $ 89,809 $ 711 $ — $ 356,918 Advertising and marketing services - intersegment sales 25,854 — — (25,854 ) — Circulation 342,645 — 1 — 342,646 Other 60,996 4,754 1,686 — 67,436 Total revenues $ 695,893 $ 94,563 $ 2,398 $ (25,854 ) $ 767,000 Adjusted EBITDA $ 91,991 $ 2,784 $ (16,757 ) $ — $ 78,018 Three months ended June 30, 2019 In thousands Publishing Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 180,890 $ 23,157 $ 650 $ — $ 204,697 Advertising and marketing services - intersegment sales 18,288 — — (18,288 ) — Circulation 150,827 — 23 — 150,850 Other 44,430 4,188 222 — 48,840 Total revenues $ 394,435 $ 27,345 $ 895 $ (18,288 ) $ 404,387 Adjusted EBITDA $ 55,493 $ (2,459 ) $ (5,739 ) $ — $ 47,295 Six months ended June 30, 2020 In thousands Publishing Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 636,277 $ 206,092 $ 1,560 $ — $ 843,929 Advertising and marketing services - intersegment sales 59,611 — — (59,611 ) — Circulation 717,365 — 4 — 717,369 Other 140,790 9,752 3,843 — 154,385 Total revenues $ 1,554,043 $ 215,844 $ 5,407 $ (59,611 ) $ 1,715,683 Adjusted EBITDA $ 203,014 $ 10,668 $ (36,598 ) $ — $ 177,084 Six months ended June 30, 2019 In thousands Publishing Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 352,708 $ 44,547 $ 987 $ — $ 398,242 Advertising and marketing services - intersegment sales 35,328 — — (35,328 ) — Circulation 302,991 — 24 — 303,015 Other 81,489 8,685 556 — 90,730 Total revenues $ 772,516 $ 53,232 $ 1,567 $ (35,328 ) $ 791,987 Adjusted EBITDA $ 97,188 $ (5,689 ) $ (11,354 ) $ — $ 80,145 The following table presents our reconciliation of adjusted EBITDA to net income (loss): Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Net income (loss) attributable to Gannett $ (436,893 ) $ 2,815 $ (517,045 ) $ (6,291 ) Benefit for income taxes (34,276 ) (343 ) (25,297 ) (2,297 ) Interest expense 57,928 10,212 115,827 20,346 Loss on early extinguishment of debt 369 — 1,174 — Non-operating pension income (17,553 ) (208 ) (36,099 ) (417 ) Other non-operating income (6,261 ) (103 ) (4,616 ) (154 ) Depreciation and amortization 66,327 23,328 144,352 44,251 Integration and reorganization costs 32,306 4,278 60,560 10,077 Acquisition costs 2,379 2,364 8,348 3,137 Impairment of property, plant and equipment 6,859 1,262 6,859 2,469 Goodwill and intangible impairment 393,446 — 393,446 — Loss on sale or disposal of assets 88 947 745 2,737 Equity-based compensation expense 7,391 707 18,968 1,843 Other items 5,908 2,036 9,862 4,444 Adjusted EBITDA (non-GAAP basis) $ 78,018 $ 47,295 $ 177,084 $ 80,145 |
Related party transactions
Related party transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related party transactions | NOTE 15 — Related party transactions As of June 30, 2020 , the Manager, which is an affiliate of Fortress Investment Group LLC ("Fortress"), and its affiliates owned approximately 4% of the Company’s outstanding stock and approximately 40% of the Company’s outstanding warrants. The Manager or its affiliates hold 6,068,075 stock options of the Company’s stock as of June 30, 2020 . During the three and six months ended June 30, 2020 , no dividends were paid to Fortress and its affiliates. During the three and six months ended June 30, 2019 , Fortress and its affiliates were paid $0.2 million and $0.5 million in dividends, respectively. The Company's Chief Executive Officer is an employee of Fortress (or one of its affiliates), and his salary is paid by Fortress (or one of its affiliates). The management fee paid is reduced by the compensation paid to the Chief Financial Officer. Amended and Restated Management Agreement On November 26, 2013 , New Media entered into a management agreement (as amended and restated, "the Management Agreement") with the Manager, an affiliate of Fortress, pursuant to which the Manager managed the operations of New Media. New Media paid the Manager an annual management fee equal to 1.50% of the Company's Total Equity (as defined in the Management Agreement), and the Manager was eligible to receive incentive compensation. On August 5, 2019 , in connection with the execution of the Legacy Gannett acquisition agreement, the Company and the Manager entered into the Amended and Restated Management and Advisory Agreement (the “Amended Management Agreement”). Effective upon the consummation of the acquisition on November 19, 2019 , the Amended Management Agreement replaced the Management Agreement. The Amended Management Agreement (i) establishes a termination date for the Manager’s services of December 31, 2021 , in lieu of annual renewals of the term; (ii) reduces the “incentive fee” payable under the Amended Management Agreement from 25% to 17.5% for the remainder of the term; (iii) reduces by 50% the number of options that would otherwise be issuable in connection with the issuance of shares as consideration for the acquisition, and imposes a premium on the exercise price; (iv) eliminates the Manager’s right to receive options in connection with future equity raises by the Company; and (v) eliminates certain payments otherwise due at or after the end of the term of the prior management agreement. In connection with entering into the Amended Management Agreement and the occurrence of the consummation of the acquisition, the Company issued to the Manager 4,205,607 shares of Company Common Stock and granted to the Manager options to acquire 3,163,264 shares of Company Common Stock. The Manager is restricted from selling the issued shares until the expiration of the Amended Management Agreement, or otherwise upon a change in control and certain other extraordinary events. The options have an exercise price of $15.50 and become exercisable upon the first trading day immediately following the first 20 consecutive trading day period in which the closing price of the Company Common Stock (on its principal U.S. national securities exchange) is at or above $20 per share (subject to adjustment). The options also become exercisable upon a change in control and certain other extraordinary events. Upon expiration of the term of the Amended Management Agreement, the Manager will cease providing external management services to the Company, and the Manager will no longer be the employer of the person serving in the role of Chief Executive Officer of the consolidated company. The following table provides the management and incentive fees recognized and paid to the Manager: Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Management fee expense 4,674 2,456 8,433 4,912 Incentive fee expense — 1,413 — 1,413 Management fees paid 3,759 2,456 7,383 6,167 Incentive fees paid — — 2,602 5,220 Reimbursement for expenses 658 577 1,325 1,226 The Company had an outstanding liability for all Management Agreement related fees of $4.7 million and $6.5 million at June 30, 2020 and December 31, 2019 , respectively, included in accrued expenses. |
Basis of presentation and sum_2
Basis of presentation and summary of significant accounting policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation: Our condensed consolidated financial statements 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, 2019 . |
Use of estimates | 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 from those estimates. The COVID-19 pandemic has caused increased uncertainty in estimates and assumptions affecting the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements. Examples of significant estimates include pension and postretirement benefit obligation assumptions, income taxes, leases, self-insurance liabilities, impairment analysis, stock-based compensation, business combinations and valuation of property, plant and equipment and intangible assets. Actual results could differ from those estimates. |
Advertising and marketing services revenues | Advertising and marketing services revenues: Pursuant to our acquisition of Legacy Gannett, we realigned the presentation of marketing services revenues generated by our UpCurve subsidiary from other revenues to advertising and marketing services revenue on the Condensed consolidated statements of operations and comprehensive income (loss) . As a result of this updated presentation, advertising and marketing services revenues increased and other revenues decreased $19.9 million for the three months ended June 30, 2019 and $34.8 million for the six months ended June 30, 2019 . Operating revenues, net income, retained earnings, and earnings per share remained unchanged. |
Segment presentation | Segment presentation: In connection with our Legacy Gannett acquisition and as noted above, we reorganized our reportable segments to include (1) Publishing , which consists of our portfolio of regional, national, and international newspaper publishers and (2) Marketing Solutions , which is comprised of our marketing solutions subsidiaries ReachLocal, UpCurve and WordStream. In addition to these operating segments, we have a corporate category that includes activities not directly attributable to a specific segment. This category primarily consists of broad corporate functions and includes legal, human resources, accounting, analytics, finance, and marketing as well as activities and costs not directly attributable to a particular segment and other general business costs. |
Cash and cash equivalents, including restricted cash | 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. |
New and not yet adopted accounting pronouncements | New accounting pronouncements adopted: The following are new accounting pronouncements that we adopted in the first six months of 2020 : Financial Instruments—Credit Losses: In June 2016, the Financial Accounting Standards Board ("FASB") issued new guidance which amends the principles around the recognition of credit losses by mandating entities incorporate an estimate of current expected credit losses when determining the value of certain assets. The guidance also amends reporting around allowances for credit losses on available-for-sale marketable securities. This guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. Adopting this guidance did not have a material impact on our consolidated financial statements, refer to Note 4 — Accounts receivable, net for further details. Intangibles—Internal Use Software : In August 2018, the FASB issued new guidance which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. This guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in any interim period. The guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. This guidance was adopted prospectively and did not have a material impact on our consolidated financial statements. Capitalized costs are recognized within prepaid expenses and other current assets or other assets within the consolidated balance sheet. Fair Value Measurement—Disclosure Framework: In August 2018, the FASB issued new guidance that changes disclosure requirements related to fair value measurements as part of the disclosure framework project. The disclosure framework project aims to improve the effectiveness of disclosures in the notes to the financial statements by focusing on requirements that clearly communicate the most important information to users of the financial statements. This guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. Adopting this guidance did not have a material impact on our consolidated financial statements. New accounting pronouncements not yet adopted: The following are new accounting pronouncements that we are evaluating for future impacts on our financial statements: Compensation—Retirement Plans: In August 2018, the FASB issued new guidance that changes disclosures related to defined benefit pension and other postretirement benefit plans as part of the disclosure framework project. This guidance is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We are evaluating the provisions of the updated guidance and assessing the impact on our consolidated financial statements. Simplifying the Accounting for Income Taxes: In December 2019, 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. We are evaluating the provisions of the updated guidance and assessing the impact on our consolidated financial statements. |
Basis of presentation and sum_3
Basis of presentation and summary of significant accounting policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of cash and cash equivalents | The following table presents a reconciliation of cash, cash equivalents, and restricted cash: June 30, In thousands 2020 2019 Cash and cash equivalents $ 158,603 $ 20,029 Restricted cash included in other current assets 9,298 3,155 Restricted cash included in investments and other assets 21,266 — Total cash, cash equivalents, and restricted cash $ 189,167 $ 23,184 |
Summary of restrictions on cash and cash Equivalents | The following table presents a reconciliation of cash, cash equivalents, and restricted cash: June 30, In thousands 2020 2019 Cash and cash equivalents $ 158,603 $ 20,029 Restricted cash included in other current assets 9,298 3,155 Restricted cash included in investments and other assets 21,266 — Total cash, cash equivalents, and restricted cash $ 189,167 $ 23,184 |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | The following table presents our revenues disaggregated by source: Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Print advertising $ 188,158 $ 158,205 $ 456,000 $ 309,105 Digital advertising and marketing services 168,760 46,492 387,929 89,137 Total advertising and marketing services 356,918 204,697 843,929 398,242 Circulation 342,646 150,850 717,369 303,015 Other 67,436 48,840 154,385 90,730 Total revenues $ 767,000 $ 404,387 $ 1,715,683 $ 791,987 |
Schedule of deferred revenue | The following table presents changes in the deferred revenue balance for the six months ended June 30, 2020 by type of revenue: In thousands Advertising, Marketing Services, and Other Circulation Total Beginning balance $ 67,543 $ 151,280 $ 218,823 Cash receipts 141,146 595,078 736,224 Revenue recognized (144,172 ) (596,887 ) (741,059 ) Ending balance $ 64,517 $ 149,471 $ 213,988 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of lease cost | The components of lease expense were as follows: Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Operating lease cost (a) $ 24,437 $ 7,864 $ 48,321 $ 15,969 Short-term lease cost (b) 1,345 866 4,487 1,632 Net lease cost $ 25,782 $ 8,730 $ 52,808 $ 17,601 (a) Includes variable lease costs of $2.6 million and $0.2 million , respectively, and sublease income of $0.9 million and $0.6 million , respectively, for the three months ended June 30, 2020 and 2019 and variable lease costs of $6.8 million and $0.8 million , respectively, and sublease income of $2.0 million and $1.2 million , respectively, for the six months ended June 30, 2020 and 2019 . (b) Excluding expenses relating to leases with a lease term of one month or less. Other information related to leases were as follows: Six months ended June 30, In thousands, except lease term and discount rate 2020 2019 Supplemental information Cash paid for amounts included in the measurement of operating lease liabilities $ 38,989 $ 12,200 Right-of-use assets obtained in exchange for operating lease obligations 14,610 14,983 As of June 30, 2020 2019 Weighted-average remaining lease term (in years) 7.9 8.8 Weighted-average discount rate 12.78 % 10.58 % |
Summary of operating lease liability, maturity | Future minimum lease payments under non-cancellable leases as of June 30, 2020 are as follows: In thousands Year ended December 31, (a) 2020 (excluding the six months ended June 30, 2020) $ 38,209 2021 81,131 2022 72,967 2023 60,508 2024 53,594 Thereafter 236,727 Total future minimum lease payments 543,136 Less: Imputed interest (215,575 ) Total $ 327,561 (a) Operating lease payments exclude $3.1 million of legally binding minimum lease payments for leases signed but not yet commenced. |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Schedule of allowance for doubtful accounts | The following table presents changes in the allowance for doubtful accounts for the six months ended June 30, 2020 : In thousands Beginning balance $ 19,923 Current period provision 17,345 Write-offs charged against the allowance (12,019 ) Recoveries of amounts previously written-off 1,467 Foreign currency (156 ) Ending balance $ 26,560 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of recognized identified assets acquired and liabilities assumed | The following table summarizes the final fair values of the assets and liabilities for the Legacy Gannett acquisition as of June 30, 2020 . The final fair values are prior to the Company's annual impairment assessment; refer to Note 6 — Goodwill & Intangible Assets . In thousands Estimated fair value as previously reported (a) Measurement period adjustments (b) Final fair value as adjusted Cash and restricted cash acquired $ 149,452 $ — $ 149,452 Current assets 383,965 — 383,965 Other assets 97,459 — 97,459 Property, plant and equipment 536,511 — 536,511 Operating lease assets 200,550 — 200,550 Developed technology 47,770 (11,670 ) 36,100 Advertiser relationships 272,740 (16,580 ) 256,160 Subscriber relationships 104,490 6,100 110,590 Other customer relationships 63,820 3,540 67,360 Trade names 16,470 (630 ) 15,840 Mastheads 97,340 8,420 105,760 Goodwill 644,766 13,018 657,784 Total assets 2,615,333 2,198 2,617,531 Current liabilities 513,752 95 513,847 Long-term liabilities 787,019 2,103 789,122 Total liabilities 1,300,771 2,198 1,302,969 Net assets $ 1,314,562 $ — $ 1,314,562 (a) As previously reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. (b) The Company recorded measurement period adjustments during the six months ended June 30, 2020 . The measurement period adjustments were primarily related to obtaining new facts and circumstances that existed as of the acquisition date that impact the financial projections and carrying values used to value acquired assets and liabilities, including the finalization of certain contracts with customers that impacted the value of intangible assets recorded. The increase to Long-term liabilities was primarily the result of $5.8 million in multi-employer pension liabilities offset by a decrease of $4.0 million in deferred tax liabilities. All measurement period adjustments were offset against Goodwill. The following table summarizes the final fair values of the assets and liabilities for the aforementioned acquisitions. in thousands Estimated fair value as previously reported (a) Measurement period adjustments (b) Final fair value as adjusted Cash acquired $ 323 $ — $ 323 Current assets 9,320 (112 ) 9,208 Other assets 950 — 950 Property, plant and equipment 20,492 730 21,222 Non-compete agreements 280 — 280 Advertiser relationships 2,357 279 2,636 Subscriber relationships 1,457 — 1,457 Other customer relationships 1,323 2,942 4,265 Software 140 2,130 2,270 Trade names 299 2,105 2,404 Mastheads 2,896 — 2,896 Goodwill 20,850 (1,248 ) 19,602 Total assets 60,687 6,826 67,513 Current liabilities assumed 11,961 — 11,961 Long-term liabilities assumed 463 50 513 Total liabilities 12,424 50 12,474 Minority interest $ 1,651 $ — $ 1,651 Net assets $ 46,612 $ 6,776 $ 53,388 (a) As previously reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. (b) During the six months ended June 30, 2020 , the Company recognized a contingent liability of $7.0 million for earnout payments not made and finalized the allocation of purchase price to certain customer relationships, software, and trade name intangible assets acquired. |
Summary of pro forma information | Pro forma information: The following table sets forth unaudited pro forma results of operations assuming the Legacy Gannett acquisition, along with transactions necessary to finance the acquisition, occurred at the beginning of 2019: Three months ended Six months ended In thousands; unaudited June 30, 2019 June 30, 2019 Total revenues $ 1,063,689 $ 2,113,678 Net income (loss) 88 (52,081 ) Earnings (loss) per share - diluted $ 0.00 $ (0.42 ) |
Goodwill & Intangible Assets (T
Goodwill & Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill, indefinite-lived intangible assets, and amortizable intangible assets | Goodwill and intangible assets consisted of the following: in thousands June 30, 2020 Gross carrying amount Accumulated amortization Net carrying amount Amortized intangible assets (a) : Advertiser relationships $ 496,285 $ 100,061 $ 396,224 Other customer relationships 112,740 21,329 91,411 Subscriber relationships 265,491 60,059 205,432 Other intangible assets 70,317 19,076 51,241 Total $ 944,833 $ 200,525 $ 744,308 Non-amortized intangible assets: Goodwill $ 559,623 Mastheads (a) 176,217 Total $ 735,840 December 31, 2019 Gross carrying amount Accumulated Net carrying amount Amortized intangible assets: Advertiser relationships $ 534,161 $ 75,363 $ 458,798 Other customer relationships 109,674 14,303 95,371 Subscriber relationships 259,391 44,878 214,513 Other intangible assets 76,552 11,229 65,323 Total $ 979,778 $ 145,773 $ 834,005 Non-amortized intangible assets: Goodwill $ 914,331 Mastheads $ 178,559 Total $ 1,092,890 (a) Includes measurement period adjustments for the Legacy Gannett and other 2019 acquisitions. Refer to Note 5 — Acquisitions . |
Schedule of goodwill by segments | The balances and changes in the carrying amount of goodwill by segment are as follows: in thousands Publishing (a) Marketing Solutions Consolidated Gross balance at December 31, 2019 $ 800,606 $ 201,646 $ 1,002,252 Accumulated impairments (84,272 ) (3,649 ) (87,921 ) Net balance at December 31, 2019 $ 716,334 $ 197,997 $ 914,331 Activity during the six months ended June 30, 2019: Goodwill impairment (321,851 ) (40,499 ) (362,350 ) Measurement period adjustments 70,558 (58,788 ) 11,770 Foreign currency exchange rate changes (4,128 ) — (4,128 ) Total $ (255,421 ) $ (99,287 ) $ (354,708 ) Gross balance at June 30, 2020 $ 866,052 $ 142,858 $ 1,008,910 Accumulated impairments (405,139 ) (44,148 ) (449,287 ) Net balance at June 30, 2020 $ 460,913 $ 98,710 $ 559,623 (a) The Publishing segment includes the Domestic Publishing and Newsquest reporting units. |
Integration and reorganizatio_2
Integration and reorganization costs and impairments of property, plant and equipment (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring and related costs | Severance-related expenses: We recorded severance-related expenses by segment as follows: Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Publishing $ 19,142 $ 2,676 $ 31,418 $ 4,656 Marketing Solutions 2,753 180 4,137 736 Corporate and Other 3,847 24 11,966 901 Total $ 25,742 $ 2,880 $ 47,521 $ 6,293 A rollforward of the accrued severance and related costs included in accrued expenses on the Condensed consolidated balance sheets for the six months ended June 30, 2020 are as follows: In thousands Beginning balance $ 30,785 Restructuring provision included in integration and reorganization costs 47,521 Cash payments (47,641 ) Ending balance $ 30,665 |
Schedule of consolidation charges and accelerated depreciation | Facility consolidation and other restructuring-related expenses: We recorded facility consolidation charges and other restructuring-related costs by segment as follows: Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Publishing $ 1,477 $ 1,398 $ 2,509 $ 1,803 Marketing Solutions 209 — 214 — Corporate and Other 4,878 — 10,316 1,981 Total $ 6,564 $ 1,398 $ 13,039 $ 3,784 |
Pensions and other postretire_2
Pensions and other postretirement benefit plans (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Summary of benefit costs | Retirement plan costs include the following components: Three months ended June 30, 2020 2019 In thousands Pension OPEB Pension OPEB Operating expenses: Service cost - Benefits earned during the period $ 704 $ 19 $ 159 $ — Non-operating expenses (Other income): Interest cost on benefit obligation 20,416 593 736 22 Expected return on plan assets (38,551 ) — (936 ) — Amortization of actuarial loss (gain) (27 ) 16 (39 ) 9 Total non-operating expenses (benefit) $ (18,162 ) $ 609 $ (239 ) $ 31 Total expense (benefit) for retirement plans $ (17,458 ) $ 628 $ (80 ) $ 31 Six months ended June 30, 2020 2019 In thousands Pension OPEB Pension OPEB Operating expenses: Service cost - Benefits earned during the period $ 1,385 $ 52 $ 317 $ — Non-operating expenses (Other income): Interest cost on benefit obligation 41,133 1,160 1,473 45 Expected return on plan assets (78,367 ) — (1,875 ) — Amortization of actuarial loss (gain) (54 ) 29 (78 ) 18 Total non-operating expenses (benefit) $ (37,288 ) $ 1,189 $ (480 ) $ 63 Total expense (benefit) for retirement plans $ (35,903 ) $ 1,241 $ (163 ) $ 63 |
Income taxes (Tables)
Income taxes (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense (benefit) | The following table outlines our pre-tax net income (loss) and income tax amounts: Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Pre-tax net income (loss) $ (472,107 ) $ 2,272 $ (543,734 ) $ (9,037 ) Benefit for income taxes (34,276 ) (343 ) (25,297 ) (2,297 ) Effective tax rate 7.3 % *** 4.7 % 25.4 % *** Indicates a percentage that is not meaningful. |
Supplemental equity informati_2
Supplemental equity information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of earnings (loss) per share (basic and diluted) | The following table sets forth the computation of basic and diluted earnings (loss) per share: in thousands, except share data Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Net income (loss) attributable to Gannett $ (436,893 ) $ 2,815 $ (517,045 ) $ (6,291 ) Basic weighted average shares outstanding 131,471 60,031 130,999 59,998 Diluted weighted average shares outstanding 131,471 60,031 130,999 59,998 |
Schedule of securities from computation of diluted income per share | The Company excluded the following securities from the computation of diluted income per share because their effect would have been antidilutive: Three months ended June 30, Six months ended June 30, in thousands, except share data 2020 2019 2020 2019 Stock warrants 1,362 1,362 1,362 1,362 Stock options 6,068 2,905 6,068 2,905 Restricted stock grants 8,510 450 8,510 450 |
Summary of manager stock options | The following table includes additional information regarding the Manager stock options: in thousands, except share data Number of Options Weighted-Average Grant Date Fair Value Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value ($000) Outstanding at December 31, 2019 6,068 $ 1.78 $ 14.70 8.2 $ — Granted — $ — $ — Outstanding at June 30, 2020 6,068 $ 1.78 $ 13.97 7.7 $ — Exercisable at June 30, 2020 3,551 $ 1.78 $ 12.94 6.5 $ — |
Schedule of nonvested RSG cost | The following table outlines restricted stock unit ("RSU") and performance stock unit ("PSU") award activity specific to Legacy Gannett for the six months ended June 30, 2020 : Six months ended June 30, 2020 in thousands, except per share data Number RSUs & PSUs Weighted- Unvested at beginning of period 7,368 $ 6.28 Granted 282 0.90 Vested (3,012 ) 6.28 Forfeited (371 ) 2.31 Unvested at end of period 4,267 $ 6.27 Restricted stock award activity was as follows: Six months ended June 30, 2020 2019 in thousands, except per share data Number of RSGs Weighted- Average Grant Date Fair Value Number of RSGs Weighted- Unvested at beginning of period 317 $ 14.61 384 $ 16.11 Granted 5,248 3.91 298 13.65 Vested (1,041 ) 6.19 (162 ) 15.90 Forfeited (283 ) 2.21 (70 ) 15.27 Unvested at end of period 4,241 $ 4.26 450 $ 14.69 |
Schedule of accumulated other comprehensive income (loss) | The following tables summarize the components of, and the changes in, Accumulated other comprehensive loss (net of tax) for the six months ended June 30, 2020 and 2019 : Six months ended June 30, 2020 In thousands Retirement Plans Foreign Currency Translation Total Beginning balance $ 936 $ 7,266 $ 8,202 Other comprehensive income (loss) before reclassifications (4,961 ) (16,585 ) (21,546 ) Amounts reclassified from accumulated other comprehensive loss (1) (18 ) — (18 ) Net current period other comprehensive income (loss), net of taxes (4,979 ) (16,585 ) (21,564 ) Ending balance $ (4,043 ) $ (9,319 ) $ (13,362 ) (1) This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 9 — Pensions and other postretirement benefit plans Six months ended June 30, 2019 In thousands Retirement Plans Foreign Currency Translation Total Beginning balance $ (6,881 ) $ — $ (6,881 ) Other comprehensive income (loss) before reclassifications — 3 3 Amounts reclassified from accumulated other comprehensive loss (1) (60 ) — (60 ) Net current period other comprehensive income (loss), net of taxes (60 ) 3 (57 ) Ending balance $ (6,941 ) $ 3 $ (6,938 ) (1) This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 9 — Pensions and other postretirement benefit plans |
Reclassification out of accumulated other comprehensive income related to these postretirement plans | Reclassifications out of accumulated other comprehensive loss related to these postretirement plans include the following: Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Amortization of prior service credit, net $ — $ — $ — $ — Amortization of actuarial gain (11 ) (30 ) (25 ) (60 ) Total reclassifications, before tax (11 ) (30 ) (25 ) (60 ) Income tax effect 3 — 7 — Total reclassifications, net of tax $ (8 ) $ (30 ) $ (18 ) $ (60 ) |
Segment reporting (Tables)
Segment reporting (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | The following tables present our segment information: Three months ended June 30, 2020 In thousands Publishing Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 266,398 $ 89,809 $ 711 $ — $ 356,918 Advertising and marketing services - intersegment sales 25,854 — — (25,854 ) — Circulation 342,645 — 1 — 342,646 Other 60,996 4,754 1,686 — 67,436 Total revenues $ 695,893 $ 94,563 $ 2,398 $ (25,854 ) $ 767,000 Adjusted EBITDA $ 91,991 $ 2,784 $ (16,757 ) $ — $ 78,018 Three months ended June 30, 2019 In thousands Publishing Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 180,890 $ 23,157 $ 650 $ — $ 204,697 Advertising and marketing services - intersegment sales 18,288 — — (18,288 ) — Circulation 150,827 — 23 — 150,850 Other 44,430 4,188 222 — 48,840 Total revenues $ 394,435 $ 27,345 $ 895 $ (18,288 ) $ 404,387 Adjusted EBITDA $ 55,493 $ (2,459 ) $ (5,739 ) $ — $ 47,295 Six months ended June 30, 2020 In thousands Publishing Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 636,277 $ 206,092 $ 1,560 $ — $ 843,929 Advertising and marketing services - intersegment sales 59,611 — — (59,611 ) — Circulation 717,365 — 4 — 717,369 Other 140,790 9,752 3,843 — 154,385 Total revenues $ 1,554,043 $ 215,844 $ 5,407 $ (59,611 ) $ 1,715,683 Adjusted EBITDA $ 203,014 $ 10,668 $ (36,598 ) $ — $ 177,084 Six months ended June 30, 2019 In thousands Publishing Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 352,708 $ 44,547 $ 987 $ — $ 398,242 Advertising and marketing services - intersegment sales 35,328 — — (35,328 ) — Circulation 302,991 — 24 — 303,015 Other 81,489 8,685 556 — 90,730 Total revenues $ 772,516 $ 53,232 $ 1,567 $ (35,328 ) $ 791,987 Adjusted EBITDA $ 97,188 $ (5,689 ) $ (11,354 ) $ — $ 80,145 The following table presents our reconciliation of adjusted EBITDA to net income (loss): Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Net income (loss) attributable to Gannett $ (436,893 ) $ 2,815 $ (517,045 ) $ (6,291 ) Benefit for income taxes (34,276 ) (343 ) (25,297 ) (2,297 ) Interest expense 57,928 10,212 115,827 20,346 Loss on early extinguishment of debt 369 — 1,174 — Non-operating pension income (17,553 ) (208 ) (36,099 ) (417 ) Other non-operating income (6,261 ) (103 ) (4,616 ) (154 ) Depreciation and amortization 66,327 23,328 144,352 44,251 Integration and reorganization costs 32,306 4,278 60,560 10,077 Acquisition costs 2,379 2,364 8,348 3,137 Impairment of property, plant and equipment 6,859 1,262 6,859 2,469 Goodwill and intangible impairment 393,446 — 393,446 — Loss on sale or disposal of assets 88 947 745 2,737 Equity-based compensation expense 7,391 707 18,968 1,843 Other items 5,908 2,036 9,862 4,444 Adjusted EBITDA (non-GAAP basis) $ 78,018 $ 47,295 $ 177,084 $ 80,145 |
Related party transactions (Tab
Related party transactions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | The following table provides the management and incentive fees recognized and paid to the Manager: Three months ended June 30, Six months ended June 30, In thousands 2020 2019 2020 2019 Management fee expense 4,674 2,456 8,433 4,912 Incentive fee expense — 1,413 — 1,413 Management fees paid 3,759 2,456 7,383 6,167 Incentive fees paid — — 2,602 5,220 Reimbursement for expenses 658 577 1,325 1,226 |
Basis of presentation and sum_4
Basis of presentation and summary of significant accounting policies - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($)brandstate | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)brandsegmentstate | Jun. 30, 2019USD ($) | |
Significant Accounting Policies | ||||
Number of states in which entity operates (states) | state | 46 | 46 | ||
Number of operating segments (segments) | segment | 2 | |||
Total operating revenues | $ 767,000 | $ 404,387 | $ 1,715,683 | $ 791,987 |
U.K. | ||||
Significant Accounting Policies | ||||
Number of media brands, more than (brands) | brand | 140 | 140 | ||
Advertising and marketing services | ||||
Significant Accounting Policies | ||||
Total operating revenues | $ 356,918 | 204,697 | $ 843,929 | 398,242 |
Restatement Adjustment | Advertising and marketing services | ||||
Significant Accounting Policies | ||||
Total operating revenues | $ 19,900 | $ 34,800 |
Basis of presentation and sum_5
Basis of presentation and summary of significant accounting policies - Schedule of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 30, 2018 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 158,603 | $ 156,042 | $ 20,029 | |
Restricted cash included in other current assets | 9,298 | 3,155 | ||
Restricted cash included in investments and other assets | 21,266 | 0 | ||
Total cash, cash equivalents, and restricted cash | $ 189,167 | $ 188,664 | $ 23,184 | $ 52,770 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue | ||||
Total revenues | $ 767,000 | $ 404,387 | $ 1,715,683 | $ 791,987 |
Total advertising and marketing services | ||||
Disaggregation of Revenue | ||||
Total revenues | 356,918 | 204,697 | 843,929 | 398,242 |
Print advertising | ||||
Disaggregation of Revenue | ||||
Total revenues | 188,158 | 158,205 | 456,000 | 309,105 |
Digital advertising and marketing services | ||||
Disaggregation of Revenue | ||||
Total revenues | 168,760 | 46,492 | 387,929 | 89,137 |
Circulation | ||||
Disaggregation of Revenue | ||||
Total revenues | 342,646 | 150,850 | 717,369 | 303,015 |
Other | ||||
Disaggregation of Revenue | ||||
Total revenues | $ 67,436 | $ 48,840 | $ 154,385 | $ 90,730 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
International | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue, percentage | 6.00% | 7.00% |
Minimum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Subscription period (in months) | 1 month | |
Maximum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Subscription period (in months) | 12 months |
Revenues - Deferred Revenue (De
Revenues - Deferred Revenue (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Movement in Deferred Revenue | |
Beginning balance | $ 218,823 |
Cash receipts | 736,224 |
Revenue recognized | (741,059) |
Ending balance | 213,988 |
Advertising, Marketing Services, and Other | |
Movement in Deferred Revenue | |
Beginning balance | 67,543 |
Cash receipts | 141,146 |
Revenue recognized | (144,172) |
Ending balance | 64,517 |
Circulation | |
Movement in Deferred Revenue | |
Beginning balance | 151,280 |
Cash receipts | 595,078 |
Revenue recognized | (596,887) |
Ending balance | $ 149,471 |
Leases - Narratives (Details)
Leases - Narratives (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Lessee, Lease, Description [Line Items] | ||
Operating lease assets | $ 296,128 | $ 309,112 |
Short-term operating lease liabilities | $ 44,700 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | |
Long-term operating lease liabilities | $ 282,896 | $ 297,662 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term with option to extend (in years) | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term with option to extend (in years) | 15 years |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease cost | $ 24,437 | $ 7,864 | $ 48,321 | $ 15,969 |
Short-term lease cost, excluding expenses relating to leases with a lease term of one month or less | 1,345 | 866 | 4,487 | 1,632 |
Net lease cost | 25,782 | 8,730 | 52,808 | 17,601 |
Variable lease costs | 2,600 | 200 | 6,800 | 800 |
Sublease income | $ 900 | $ 600 | $ 2,000 | $ 1,200 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Leases [Abstract] | |
2020 (excluding the six months ended June 30, 2020) | $ 38,209 |
2021 | 81,131 |
2022 | 72,967 |
2023 | 60,508 |
2024 | 53,594 |
Thereafter | 236,727 |
Total future minimum lease payments | 543,136 |
Less: Imputed interest | (215,575) |
Total | 327,561 |
Lease payments for leases signed but not yet commenced | $ 3,100 |
Leases - Other Information (Det
Leases - Other Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Supplemental cash flow information: | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 38,989 | $ 12,200 |
Right-of-use assets obtained in exchange for operating lease obligations | $ 14,610 | $ 14,983 |
Weighted-average remaining lease term (in years) | 7 years 10 months 24 days | 8 years 9 months 18 days |
Weighted-average discount rate | 12.78% | 10.58% |
Accounts receivable, net - Narr
Accounts receivable, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounts, Notes, Loans and Financing Receivable | ||||
Accounts receivable, reserve percentage calculation period | 3 years | |||
Threshold period for reserves | 90 days | |||
Bad debt expense | $ 12,200 | $ 1,900 | $ 17,345 | $ 4,000 |
Covid | ||||
Accounts, Notes, Loans and Financing Receivable | ||||
Bad debt expense | $ 7,700 |
Accounts receivable, net - Allo
Accounts receivable, net - Allowance for doubtful accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounts Receivable, Allowance for Credit Loss | ||||
Beginning balance | $ 19,923 | |||
Current period provision | $ 12,200 | $ 1,900 | 17,345 | $ 4,000 |
Write-offs charged against the allowance | (12,019) | |||
Recoveries of amounts previously written-off | 1,467 | |||
Foreign currency | (156) | |||
Ending balance | $ 26,560 | $ 26,560 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Millions | Nov. 19, 2019USD ($)brandorganization | Jun. 30, 2020USD ($)state | Jun. 30, 2020USD ($)state | Dec. 31, 2019USD ($)publicationbusinessagencynewspaper |
Business Acquisition | ||||
Number of states in which entity operates (states) | state | 46 | 46 | ||
Gannett Co., Inc | ||||
Business Acquisition | ||||
Measurement period adjustment, employer pension liability | $ 5.8 | |||
Number of media organizations (organization) | organization | 109 | |||
Number of media brands, more than (brands) | brand | 140 | |||
Aggregate purchase price | $ 1,300 | |||
Measurement period adjustment, decrease in deferred tax liabilities | $ 4 | |||
Certain Publications and Businesses | ||||
Business Acquisition | ||||
Aggregate purchase price | $ 53.4 | |||
Number of daily newspapers (newspaper) | newspaper | 11 | |||
Number of weekly publications (publication) | publication | 11 | |||
Number of shoppers (shopper) | agency | 9 | |||
Number of events production businesses (business) | business | 5 | |||
Measurement period adjustment, contingent liability | $ 7 | |||
Certain Publications and Businesses | Scenario, Plan | ||||
Business Acquisition | ||||
Payments to acquire the business | $ 7 | |||
U.S. | ||||
Business Acquisition | ||||
Number of states in which entity operates (states) | state | 34 | 34 |
Acquisitions - Schedule of Asse
Acquisitions - Schedule of Assets Acquired, Liabilities Assumed (Details) - USD ($) $ in Thousands | 6 Months Ended | 7 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Nov. 19, 2019 | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Goodwill | $ 559,623 | $ 559,623 | $ 914,331 | ||
Measurement period adjustments | |||||
Goodwill | $ 11,770 | ||||
Gannett Co., Inc | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Cash and restricted cash acquired | 149,452 | 149,452 | $ 149,452 | ||
Current assets | 383,965 | 383,965 | 383,965 | ||
Other assets | 97,459 | 97,459 | 97,459 | ||
Property, plant, and equipment | 536,511 | 536,511 | 536,511 | ||
Operating lease assets | 200,550 | 200,550 | 200,550 | ||
Goodwill | 657,784 | 657,784 | 644,766 | ||
Total assets | 2,617,531 | 2,617,531 | 2,615,333 | ||
Current liabilities | 513,847 | 513,847 | 513,752 | ||
Long-term liabilities assumed | 789,122 | 789,122 | 787,019 | ||
Total liabilities | 1,302,969 | 1,302,969 | 1,300,771 | ||
Net assets | 1,314,562 | 1,314,562 | 1,314,562 | ||
Measurement period adjustments | |||||
Goodwill | 13,018 | ||||
Total assets | 2,198 | ||||
Current liabilities | 95 | ||||
Long-term liabilities | 2,103 | ||||
Total liabilities | 2,198 | ||||
Net assets | 0 | ||||
Gannett Co., Inc | Mastheads | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Intangible assets - Mastheads | 105,760 | 105,760 | 97,340 | ||
Measurement period adjustments | |||||
Indefinite lived- Mastheads | 8,420 | ||||
Gannett Co., Inc | Developed technology | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Intangible assets | 36,100 | 36,100 | 47,770 | ||
Measurement period adjustments | |||||
Intangible assets | (11,670) | ||||
Gannett Co., Inc | Other customer relationships | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Intangible assets | 67,360 | 67,360 | 63,820 | ||
Measurement period adjustments | |||||
Intangible assets | 3,540 | ||||
Gannett Co., Inc | Advertiser relationships | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Intangible assets | 256,160 | 256,160 | 272,740 | ||
Measurement period adjustments | |||||
Intangible assets | (16,580) | ||||
Gannett Co., Inc | Subscriber relationships | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Intangible assets | 110,590 | 110,590 | 104,490 | ||
Measurement period adjustments | |||||
Intangible assets | 6,100 | ||||
Gannett Co., Inc | Trade names | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Intangible assets | 15,840 | 15,840 | $ 16,470 | ||
Measurement period adjustments | |||||
Intangible assets | (630) | ||||
Certain Publications and Businesses | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Cash and restricted cash acquired | 323 | 323 | 323 | ||
Current assets | 9,208 | 9,208 | 9,320 | ||
Other assets | 950 | 950 | 950 | ||
Property, plant, and equipment | 21,222 | 21,222 | 20,492 | ||
Goodwill | 19,602 | 19,602 | 20,850 | ||
Total assets | 67,513 | 67,513 | 60,687 | ||
Current liabilities | 11,961 | 11,961 | 11,961 | ||
Long-term liabilities assumed | 513 | 513 | 463 | ||
Total liabilities | 12,474 | 12,474 | 12,424 | ||
Minority interest | 1,651 | 1,651 | 1,651 | ||
Net assets | 53,388 | 53,388 | 46,612 | ||
Measurement period adjustments | |||||
Current assets | (112) | ||||
Property, plant and equipment | 730 | ||||
Goodwill | (1,248) | ||||
Total assets | 6,826 | ||||
Long-term liabilities | 50 | ||||
Total liabilities | 50 | ||||
Net assets | 6,776 | ||||
Certain Publications and Businesses | Mastheads | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Intangible assets - Mastheads | 2,896 | 2,896 | 2,896 | ||
Certain Publications and Businesses | Non-compete agreements | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Intangible assets | 280 | 280 | 280 | ||
Certain Publications and Businesses | Other customer relationships | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Intangible assets | 4,265 | 4,265 | 1,323 | ||
Measurement period adjustments | |||||
Intangible assets | 2,942 | ||||
Certain Publications and Businesses | Advertiser relationships | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Intangible assets | 2,636 | 2,636 | 2,357 | ||
Measurement period adjustments | |||||
Intangible assets | 279 | ||||
Certain Publications and Businesses | Subscriber relationships | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Intangible assets | 1,457 | 1,457 | 1,457 | ||
Certain Publications and Businesses | Software | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Intangible assets | 2,270 | 2,270 | 140 | ||
Measurement period adjustments | |||||
Intangible assets | 2,130 | ||||
Certain Publications and Businesses | Trade names | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | |||||
Intangible assets | 2,404 | $ 2,404 | $ 299 | ||
Measurement period adjustments | |||||
Intangible assets | $ 2,105 |
Acquisitions - Proforma (Detail
Acquisitions - Proforma (Details) - Gannett Co., Inc - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Business Acquisition | ||
Total revenues | $ 1,063,689 | $ 2,113,678 |
Net income (loss) | $ 88 | $ (52,081) |
Earnings (loss) per share - diluted (in USD per share) | $ 0 | $ (0.42) |
Goodwill & Intangible Assets -
Goodwill & Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Amortized intangible assets: | ||
Gross carrying amount | $ 944,833 | $ 979,778 |
Accumulated amortization | 200,525 | 145,773 |
Net carrying amount | 744,308 | 834,005 |
Goodwill | 559,623 | 914,331 |
Total | 735,840 | 1,092,890 |
Mastheads | ||
Non-amortized intangible assets: | ||
Nonamortized intangible assets | 176,217 | 178,559 |
Advertiser relationships | ||
Amortized intangible assets: | ||
Gross carrying amount | 496,285 | 534,161 |
Accumulated amortization | 100,061 | 75,363 |
Net carrying amount | 396,224 | 458,798 |
Other customer relationships | ||
Amortized intangible assets: | ||
Gross carrying amount | 112,740 | 109,674 |
Accumulated amortization | 21,329 | 14,303 |
Net carrying amount | 91,411 | 95,371 |
Subscriber relationships | ||
Amortized intangible assets: | ||
Gross carrying amount | 265,491 | 259,391 |
Accumulated amortization | 60,059 | 44,878 |
Net carrying amount | 205,432 | 214,513 |
Other intangible assets | ||
Amortized intangible assets: | ||
Gross carrying amount | 70,317 | 76,552 |
Accumulated amortization | 19,076 | 11,229 |
Net carrying amount | $ 51,241 | $ 65,323 |
Goodwill and other intangible a
Goodwill and other intangible assets - Change in Goodwill (Detail) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | |
Goodwill [Line Items] | |||
Gross balance | $ 1,008,910 | $ 1,002,252 | |
Accumulated impairments | (449,287) | (87,921) | |
Goodwill impairment | $ (362,350) | ||
Measurement period adjustments | 11,770 | ||
Foreign currency exchange rate changes | (4,128) | ||
Total | (354,708) | ||
Goodwill | 559,623 | 914,331 | |
Publishing Segment | |||
Goodwill [Line Items] | |||
Gross balance | 866,052 | 800,606 | |
Accumulated impairments | (405,139) | (84,272) | |
Goodwill impairment | (321,851) | ||
Measurement period adjustments | 70,558 | ||
Foreign currency exchange rate changes | (4,128) | ||
Total | (255,421) | ||
Goodwill | 460,913 | 716,334 | |
Marketing Solutions | |||
Goodwill [Line Items] | |||
Gross balance | 142,858 | 201,646 | |
Accumulated impairments | (44,148) | (3,649) | |
Goodwill impairment | (40,499) | ||
Measurement period adjustments | (58,788) | ||
Foreign currency exchange rate changes | 0 | ||
Total | $ (99,287) | ||
Goodwill | $ 98,710 | $ 197,997 |
Goodwill and other intangible_2
Goodwill and other intangible assets - Narrative (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Finite-Lived Intangible Assets | |||
Impairment of I intangible assets excluding goodwill | $ 23,000 | ||
Goodwill impairment | $ 362,350 | ||
Domestic Publishing | |||
Finite-Lived Intangible Assets | |||
Impairment of finite lived intangible assets | 4,000 | ||
Goodwill impairment | $ 256,500 | ||
Newspaper Reporting Unit | |||
Finite-Lived Intangible Assets | |||
Impairment of finite lived intangible assets | $ 4,000 | ||
Goodwill impairment | 65,400 | ||
Marketing Solutions | |||
Finite-Lived Intangible Assets | |||
Goodwill impairment | $ 40,500 | ||
Measurement Input, Long-term Revenue Growth Rate | Minimum | |||
Finite-Lived Intangible Assets | |||
Intangible assets measurement inputs (percent) | (0.50%) | (0.50%) | |
Measurement Input, Long-term Revenue Growth Rate | Maximum | |||
Finite-Lived Intangible Assets | |||
Intangible assets measurement inputs (percent) | 3.00% | 3.00% | |
Measurement Input, Discount Rate | Minimum | |||
Finite-Lived Intangible Assets | |||
Intangible assets measurement inputs (percent) | 10.00% | 10.00% | |
Measurement Input, Discount Rate | Maximum | |||
Finite-Lived Intangible Assets | |||
Intangible assets measurement inputs (percent) | 15.50% | 15.50% |
Integration and reorganizatio_3
Integration and reorganization costs and impairments of property, plant and equipment - Severance Related Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Restructuring Cost and Reserve | ||||
Severance related expenses | $ 32,306 | $ 4,278 | $ 60,560 | $ 10,077 |
Severance | ||||
Restructuring Cost and Reserve | ||||
Severance related expenses | 25,742 | 2,880 | 47,521 | 6,293 |
Operating Segments | Publishing | Severance | ||||
Restructuring Cost and Reserve | ||||
Severance related expenses | 19,142 | 2,676 | 31,418 | 4,656 |
Operating Segments | Marketing Solutions | Severance | ||||
Restructuring Cost and Reserve | ||||
Severance related expenses | 2,753 | 180 | 4,137 | 736 |
Corporate and Other | Severance | ||||
Restructuring Cost and Reserve | ||||
Severance related expenses | $ 3,847 | $ 24 | $ 11,966 | $ 901 |
Integration and reorganizatio_4
Integration and reorganization costs and impairments of property, plant and equipment - Restructuring Reserve (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Restructuring Reserve | ||||
Integration and reorganization costs | $ 32,306 | $ 4,278 | $ 60,560 | $ 10,077 |
Severance | ||||
Restructuring Reserve | ||||
Beginning balance | 30,785 | |||
Integration and reorganization costs | 25,742 | $ 2,880 | 47,521 | $ 6,293 |
Cash payments | (47,641) | |||
Ending balance | $ 30,665 | $ 30,665 |
Integration and reorganizatio_5
Integration and reorganization costs and impairments of property, plant and equipment - Facility Consolidation Charges and Accelerated Depreciation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Restructuring Cost and Reserve | ||||
Integration and reorganization costs | $ 32,306 | $ 4,278 | $ 60,560 | $ 10,077 |
Facility Closing | ||||
Restructuring Cost and Reserve | ||||
Integration and reorganization costs | 6,564 | 1,398 | 13,039 | 3,784 |
Operating Segments | Publishing | Facility Closing | ||||
Restructuring Cost and Reserve | ||||
Integration and reorganization costs | 1,477 | 1,398 | 2,509 | 1,803 |
Operating Segments | Marketing Solutions | Facility Closing | ||||
Restructuring Cost and Reserve | ||||
Integration and reorganization costs | 209 | 0 | 214 | 0 |
Corporate and Other | Facility Closing | ||||
Restructuring Cost and Reserve | ||||
Integration and reorganization costs | $ 4,878 | $ 0 | $ 10,316 | $ 1,981 |
Integration and reorganizatio_6
Integration and reorganization costs and impairments of property, plant and equipment - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Restructuring Cost and Reserve | ||||
Impairment of property, plant and equipment | $ 6,859 | $ 1,262 | $ 6,859 | $ 2,469 |
Publishing | ||||
Restructuring Cost and Reserve | ||||
Impairment of property, plant and equipment | 6,900 | 1,300 | 6,900 | |
Accelerated depreciation | $ 11,000 | $ 2,600 | $ 35,800 | 2,600 |
Corporate and Other | ||||
Restructuring Cost and Reserve | ||||
Impairment of property, plant and equipment | $ 2,500 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Apr. 09, 2018USD ($)$ / shares | Nov. 30, 2019USD ($)DirectorsIndividuals | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Line of Credit Facility | |||||||
Interest expense | $ 57,928,000 | $ 10,212,000 | $ 115,827,000 | $ 20,346,000 | |||
Loss on early extinguishment of debt | 369,000 | $ 0 | 1,174,000 | $ 0 | |||
Apollo Term Loan | |||||||
Line of Credit Facility | |||||||
Debt term (in years) | 5 years | ||||||
Aggregate principal amount | $ 1,800,000,000 | 1,700,000,000 | $ 1,700,000,000 | ||||
Interest rate (as a percent) | 11.50% | 12.90% | |||||
Effective interest rate (as a percent) | 6.50% | ||||||
Number of Individuals | Individuals | 2 | ||||||
Number of directors | Directors | 2 | ||||||
Interest rate increase if gross leverage ratio exceeds certain thresholds (as a percent) | 2.00% | ||||||
Unrestricted cash requirement | 20,000,000 | $ 20,000,000 | |||||
Unrestricted cash prepaid requirement | 40,000,000 | $ 40,000,000 | |||||
EBITDA initial ratio | 1 | ||||||
Covenant, percent of net proceeds of asset sales (as a percent) | 100.00% | ||||||
Debt issuance costs | $ 4,900,000 | 4,400,000 | $ 4,400,000 | ||||
Unamortized discount | $ 116,600,000 | ||||||
Capitalized lender fees | 99,400,000 | 99,400,000 | |||||
Interest expense | 50,600,000 | 101,400,000 | |||||
Amortization of deferred financing costs | 5,900,000 | 11,800,000 | |||||
Loss on early extinguishment of debt | 400,000 | $ 1,200,000 | |||||
Interest paid | $ 124,700,000 | ||||||
Convertible Debt | Senior Notes | |||||||
Line of Credit Facility | |||||||
Aggregate principal amount | $ 201,300,000 | ||||||
Effective interest rate (as a percent) | 6.05% | 6.05% | |||||
Stated interest rate (as a percent) | 4.75% | ||||||
Convertible debt, principal | $ 3,300,000 | $ 3,300,000 | |||||
Proceeds from debt | $ 195,300,000 | ||||||
Stated conversion rate | 0.0824572 | ||||||
Conversion price (in usd per share) | $ / shares | $ 12.13 | ||||||
Redemption value | $ 198,000,000 | ||||||
Period 1 | Apollo Term Loan | |||||||
Line of Credit Facility | |||||||
Covenant, percent of excess cash flow (as a percent) | 50.00% | ||||||
Period 2 | Apollo Term Loan | |||||||
Line of Credit Facility | |||||||
Covenant, percent of excess cash flow (as a percent) | 90.00% |
Pensions and other postretire_3
Pensions and other postretirement benefit plans - Retirement Plan Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Pension | ||||
Company's pension costs | ||||
Service cost - Benefits earned during the period | $ 704 | $ 159 | $ 1,385 | $ 317 |
Interest cost on benefit obligation | 20,416 | 736 | 41,133 | 1,473 |
Expected return on plan assets | (38,551) | (936) | (78,367) | (1,875) |
Amortization of actuarial loss (gain) | (27) | (39) | (54) | (78) |
Total non-operating expenses (benefit) | (18,162) | (239) | (37,288) | (480) |
Total expense (benefit) for retirement plans | (17,458) | (80) | (35,903) | (163) |
OPEB | ||||
Company's pension costs | ||||
Service cost - Benefits earned during the period | 19 | 0 | 52 | 0 |
Interest cost on benefit obligation | 593 | 22 | 1,160 | 45 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of actuarial loss (gain) | 16 | 9 | 29 | 18 |
Total non-operating expenses (benefit) | 609 | 31 | 1,189 | 63 |
Total expense (benefit) for retirement plans | $ 628 | $ 31 | $ 1,241 | $ 63 |
Pensions and other postretire_4
Pensions and other postretirement benefit plans - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Employee retirement contributions deferred | $ 11 | |
Pension Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Contribution to the defined benefit plans | 10.2 | |
Pension Plans | Foreign | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Deferred contributions by employer in response to COVID-19 | 12 | |
Pension Plans | U.S. | Subsequent Event | Forecasted | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Deferred contributions by employer in response to COVID-19 | $ 5 | |
OPEB | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Contribution to the defined benefit plans | $ 4.3 |
Income taxes - Pre-tax Net Loss
Income taxes - Pre-tax Net Loss and Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Pre-tax net income (loss) | $ (472,107) | $ 2,272 | $ (543,734) | $ (9,037) |
Benefit for income taxes | $ (34,276) | $ (343) | $ (25,297) | $ (2,297) |
Effective tax rate (percent) | 7.30% | 4.70% | 25.40% |
Income taxes - Narrative (Detai
Income taxes - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Estimated effective income tax rate (in percent) | 6.80% | |
Unrecognized tax benefits that would impact effective tax rate | $ 33.8 | $ 32.4 |
Accrued interest and penalties related to unrecognized tax benefits | $ 2.3 | $ 1.9 |
Supplemental equity informati_3
Supplemental equity information - Earnings (Loss) Per Share (Basic and Diluted) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Equity [Abstract] | ||||
Net income (loss) attributable to Gannett | $ (436,893) | $ 2,815 | $ (517,045) | $ (6,291) |
Basic weighted average shares outstanding (in shares) | 131,471,000 | 60,031,000 | 130,999,000 | 59,998,000 |
Diluted weighted average shares outstanding (in shares) | 131,471,000 | 60,031,000 | 130,999,000 | 59,998,000 |
Supplemental equity informati_4
Supplemental equity information - Computation of Diluted Income Per Share (Detail) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock warrants | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Computation of diluted income per share (in shares) | 1,362 | 1,362 | 1,362 | 1,362 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Computation of diluted income per share (in shares) | 6,068 | 2,905 | 6,068 | 2,905 |
Restricted stock grants | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Computation of diluted income per share (in shares) | 8,510 | 450 | 8,510 | 450 |
Supplemental equity informati_5
Supplemental equity information - Narrative (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | May 17, 2017 | |
Stockholders Equity Note | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||
Repurchase of common stock (in shares) | 0 | |||||
Share-based compensation cost | $ 7,400,000 | $ 700,000 | $ 19,000,000 | $ 1,800,000 | ||
Unrecognized compensation cost related to non-vested share-based compensation | 25,600,000 | $ 25,600,000 | ||||
Weighted average period | 2 years 1 month 6 days | |||||
Payment of dividends | $ 0 | $ 46,066,000 | ||||
Restricted Stock Grants (RSGs) | ||||||
Stockholders Equity Note | ||||||
Aggregate intrinsic value of unvested | $ 11,700,000 | $ 11,700,000 | ||||
2014 Options | Manager | ||||||
Stockholders Equity Note | ||||||
Stock options granted (in shares) | 652,311 | |||||
Option to purchase shares of common stock, price per share (in dollars per share) | $ 9.94 | $ 11.46 | $ 9.94 | $ 11.46 | ||
2014 Options | Manager | Previously Reported | ||||||
Stockholders Equity Note | ||||||
Option to purchase shares of common stock, price per share (in dollars per share) | 11.46 | 12.95 | $ 11.46 | 12.95 | ||
2015 Options | Manager | ||||||
Stockholders Equity Note | ||||||
Stock options granted (in shares) | 700,000 | |||||
Option to purchase shares of common stock, price per share (in dollars per share) | 15.93 | 17.45 | $ 15.93 | 17.45 | ||
2015 Options | Manager | Previously Reported | ||||||
Stockholders Equity Note | ||||||
Option to purchase shares of common stock, price per share (in dollars per share) | 17.45 | 18.94 | $ 17.45 | 18.94 | ||
2016 Options | Manager | ||||||
Stockholders Equity Note | ||||||
Stock options granted (in shares) | 862,500 | |||||
Option to purchase shares of common stock, price per share (in dollars per share) | 10.23 | 11.75 | $ 10.23 | 11.75 | ||
2016 Options | Manager | Previously Reported | ||||||
Stockholders Equity Note | ||||||
Option to purchase shares of common stock, price per share (in dollars per share) | 11.75 | 13.24 | $ 11.75 | 13.24 | ||
2018 Options | Manager | ||||||
Stockholders Equity Note | ||||||
Stock options granted (in shares) | 690,000 | |||||
Option to purchase shares of common stock, price per share (in dollars per share) | 13.44 | 14.96 | $ 13.44 | 14.96 | ||
2018 Options | Manager | Previously Reported | ||||||
Stockholders Equity Note | ||||||
Option to purchase shares of common stock, price per share (in dollars per share) | $ 14.96 | $ 16.45 | $ 14.96 | $ 16.45 | ||
Share Repurchase Program | ||||||
Stockholders Equity Note | ||||||
Shares authorized for repurchase (up to) (shares) | $ 100,000,000 | |||||
Common stock, par value (in dollars per share) | $ 0.01 |
Supplemental equity informati_6
Supplemental equity information - Summary of Stock-Option Awards (Detail) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Number of Options | ||
Outstanding beginning (in shares) | 6,068,000 | |
Granted (in shares) | 0 | |
Outstanding ending (in shares) | 6,068,000 | 6,068,000 |
Exercisable at June 30, 2020 (in shares) | 3,551,000 | |
Weighted-Average Grant Date Fair Value | ||
Outstanding beginning (in dollars per shares) | $ 1.78 | |
Granted (in dollars per shares) | 0 | |
Outstanding ending (in dollars per shares) | 1.78 | $ 1.78 |
Exercisable at June 30, 2020 (in dollars per share) | 1.78 | |
Weighted-Average Exercise Price | ||
Outstanding beginning (in dollars per shares) | 14.70 | |
Granted (in dollars per shares) | 0 | |
Outstanding ending (in dollars per shares) | 13.97 | $ 14.70 |
Exercisable at June 30, 2020 (in dollars per shares) | $ 12.94 | |
Weighted-Average Remaining Contractual Term (Years) | ||
Weighted-average remaining contractual term (Years) | 7 years 8 months 12 days | 8 years 2 months 12 days |
Weighted-average remaining contractual term (Years), exercisable | 6 years 6 months | |
Aggregate Intrinsic Value ($000) | ||
Aggregate intrinsic value | $ 0 | $ 0 |
Exercisable at June 30, 2020 | $ 0 |
Supplemental equity informati_7
Supplemental equity information - Restricted Stock Grants (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
RSU's & PSU's | Legacy Gannett | ||
Number of Units | ||
Outstanding and unvested at beginning of year (in shares) | 7,368,000 | |
Granted (in shares) | 282,000 | |
Vested (in shares) | (3,012,000) | |
Forfeited (in shares) | (371,000) | |
Outstanding and unvested at end of year (in shares) | 4,267,000 | |
Weighted- Average Grant Date Fair Value | ||
Outstanding and unvested at beginning (in dollars per shares) | $ 6.28 | |
Granted (in dollars per share) | 0.90 | |
Vested (in dollars per shares) | 6.28 | |
Forfeited (in dollars per share) | 2.31 | |
Outstanding and unvested at end of year (in dollars per shares) | $ 6.27 | |
Restricted Stock Grants (RSGs) | ||
Number of Units | ||
Outstanding and unvested at beginning of year (in shares) | 317,000 | 384,000 |
Granted (in shares) | 5,248,000 | 298,000 |
Vested (in shares) | (1,041,000) | (162,000) |
Forfeited (in shares) | (283,000) | (70,000) |
Outstanding and unvested at end of year (in shares) | 4,241,000 | 450,000 |
Weighted- Average Grant Date Fair Value | ||
Outstanding and unvested at beginning (in dollars per shares) | $ 14.61 | $ 16.11 |
Granted (in dollars per share) | 3.91 | 13.65 |
Vested (in dollars per shares) | 6.19 | 15.90 |
Forfeited (in dollars per share) | 2.21 | 15.27 |
Outstanding and unvested at end of year (in dollars per shares) | $ 4.26 | $ 14.69 |
Supplemental equity informati_8
Supplemental equity information - Rights Agreement (Details) - USD ($) $ in Millions | Apr. 06, 2020 | Dec. 31, 2019 |
Equity [Abstract] | ||
Operating loss carryforwards | $ 435 | |
Rights agreement, dividend declared (in shares) | 1 | |
Rights agreement, percent of common stock owned required for exercise | 4.99% | |
Rights agreement, additional percent of common stock owned required for exercise | 0.50% | |
Exercise percent discount | 50.00% | |
Number of shares that may be exchanged per right (in shares) | 1 |
Supplemental equity informati_9
Supplemental equity information - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | $ 981,356 | $ 717,223 |
Other comprehensive income (loss) before reclassifications | (21,546) | 3 |
Amounts reclassified from accumulated other comprehensive loss | (18) | (60) |
Other comprehensive income, net of tax | (21,564) | (57) |
Ending balance | 452,085 | 666,262 |
Total | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | 8,202 | (6,881) |
Ending balance | (13,362) | (6,938) |
Retirement Plans | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | 936 | (6,881) |
Other comprehensive income (loss) before reclassifications | (4,961) | 0 |
Amounts reclassified from accumulated other comprehensive loss | (18) | (60) |
Other comprehensive income, net of tax | (4,979) | (60) |
Ending balance | (4,043) | (6,941) |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | 7,266 | 0 |
Other comprehensive income (loss) before reclassifications | (16,585) | 3 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Other comprehensive income, net of tax | (16,585) | 3 |
Ending balance | $ (9,319) | $ 3 |
Supplemental equity informat_10
Supplemental equity information - Reclassifications of Accumulated Other Comprehensive Loss Related to Postretirement Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Equity [Abstract] | ||||
Amortization of prior service credit, net | $ 0 | $ 0 | $ 0 | $ 0 |
Amortization of actuarial gain | (11) | (30) | (25) | (60) |
Total reclassifications, before tax | (11) | (30) | (25) | (60) |
Income tax effect | 3 | 0 | 7 | 0 |
Total reclassifications, net of tax | $ (8) | $ (30) | $ (18) | $ (60) |
Fair value measurement - Narrat
Fair value measurement - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets held-for-sale | $ 21.6 | $ 25.5 |
Segment reporting - Narrative (
Segment reporting - Narrative (Details) | 6 Months Ended |
Jun. 30, 2020segment | |
Segment Reporting Information | |
Number of operating segments (segments) | 2 |
Publishing | |
Segment Reporting Information | |
Number of operating segments (segments) | 2 |
Segment reporting -Segment Info
Segment reporting -Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information | ||||
Total operating revenues | $ 767,000 | $ 404,387 | $ 1,715,683 | $ 791,987 |
Adjusted EBITDA | 78,018 | 47,295 | 177,084 | 80,145 |
Operating Segments | Publishing | ||||
Segment Reporting Information | ||||
Total operating revenues | 695,893 | 394,435 | 1,554,043 | 772,516 |
Adjusted EBITDA | 91,991 | 55,493 | 203,014 | 97,188 |
Operating Segments | Marketing Solutions | ||||
Segment Reporting Information | ||||
Total operating revenues | 94,563 | 27,345 | 215,844 | 53,232 |
Adjusted EBITDA | 2,784 | (2,459) | 10,668 | (5,689) |
Corporate and other | ||||
Segment Reporting Information | ||||
Total operating revenues | 2,398 | 895 | 5,407 | 1,567 |
Adjusted EBITDA | (16,757) | (5,739) | (36,598) | (11,354) |
Intersegment Eliminations | ||||
Segment Reporting Information | ||||
Total operating revenues | (25,854) | (18,288) | (59,611) | (35,328) |
Marketing Solutions | ||||
Segment Reporting Information | ||||
Total operating revenues | 356,918 | 204,697 | 843,929 | 398,242 |
Marketing Solutions | Operating Segments | Publishing | ||||
Segment Reporting Information | ||||
Total operating revenues | 266,398 | 180,890 | 636,277 | 352,708 |
Marketing Solutions | Operating Segments | Marketing Solutions | ||||
Segment Reporting Information | ||||
Total operating revenues | 89,809 | 23,157 | 206,092 | 44,547 |
Marketing Solutions | Corporate and other | ||||
Segment Reporting Information | ||||
Total operating revenues | 711 | 650 | 1,560 | 987 |
Marketing Solutions | Intersegment Eliminations | ||||
Segment Reporting Information | ||||
Total operating revenues | (25,854) | (18,288) | (59,611) | (35,328) |
Marketing Solutions | Intersegment Eliminations | Publishing | ||||
Segment Reporting Information | ||||
Total operating revenues | 25,854 | 18,288 | 59,611 | 35,328 |
Marketing Solutions | Intersegment Eliminations | Marketing Solutions | ||||
Segment Reporting Information | ||||
Total operating revenues | 0 | 0 | 0 | 0 |
Circulation | ||||
Segment Reporting Information | ||||
Total operating revenues | 342,646 | 150,850 | 717,369 | 303,015 |
Circulation | Operating Segments | Publishing | ||||
Segment Reporting Information | ||||
Total operating revenues | 342,645 | 150,827 | 717,365 | 302,991 |
Circulation | Operating Segments | Marketing Solutions | ||||
Segment Reporting Information | ||||
Total operating revenues | 0 | 0 | 0 | 0 |
Circulation | Corporate and other | ||||
Segment Reporting Information | ||||
Total operating revenues | 1 | 23 | 4 | 24 |
Other | ||||
Segment Reporting Information | ||||
Total operating revenues | 67,436 | 48,840 | 154,385 | 90,730 |
Other | Operating Segments | Publishing | ||||
Segment Reporting Information | ||||
Total operating revenues | 60,996 | 44,430 | 140,790 | 81,489 |
Other | Operating Segments | Marketing Solutions | ||||
Segment Reporting Information | ||||
Total operating revenues | 4,754 | 4,188 | 9,752 | 8,685 |
Other | Corporate and other | ||||
Segment Reporting Information | ||||
Total operating revenues | $ 1,686 | $ 222 | $ 3,843 | $ 556 |
Segment reporting - Reconciliat
Segment reporting - Reconciliation of EBITDA to Operating Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting [Abstract] | ||||
Net income (loss) attributable to Gannett | $ (436,893) | $ 2,815 | $ (517,045) | $ (6,291) |
Benefit for income taxes | (34,276) | (343) | (25,297) | (2,297) |
Interest expense | 57,928 | 10,212 | 115,827 | 20,346 |
Loss on early extinguishment of debt | 369 | 0 | 1,174 | 0 |
Non-operating pension income | (17,553) | (208) | (36,099) | (417) |
Other non-operating income | (6,261) | (103) | (4,616) | (154) |
Depreciation and amortization | 66,327 | 23,328 | 144,352 | 44,251 |
Integration and reorganization costs | 32,306 | 4,278 | 60,560 | 10,077 |
Acquisition costs | 2,379 | 2,364 | 8,348 | 3,137 |
Impairment of property, plant and equipment | 6,859 | 1,262 | 6,859 | 2,469 |
Goodwill and intangible impairment | 393,446 | 0 | 393,446 | 0 |
Loss on sale or disposal of assets | 88 | 947 | 745 | 2,737 |
Equity-based compensation expense | 7,391 | 707 | 18,968 | 1,843 |
Other items | 5,908 | 2,036 | 9,862 | 4,444 |
Adjusted EBITDA (non-GAAP basis) | $ 78,018 | $ 47,295 | $ 177,084 | $ 80,145 |
Related party transactions - Ma
Related party transactions - Management and Incentive Fees (Details) - USD ($) | Nov. 19, 2019 | Nov. 18, 2019 | Nov. 26, 2013 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||||||||
Number of stock options (in shares) | 6,068,000 | 6,068,000 | 6,068,000 | |||||
Payment of dividends | $ 0 | $ 46,066,000 | ||||||
Due from (to) related party | $ 4,700,000 | 4,700,000 | $ 6,500,000 | |||||
FIG LLC | New Media | ||||||||
Related Party Transaction [Line Items] | ||||||||
Annual management fee (percent) | 1.50% | |||||||
Incentive fee (percent) | 17.50% | 25.00% | ||||||
Reduction in number of options issuable (percent) | 50.00% | |||||||
Reimbursement for expenses | 658,000 | $ 577,000 | 1,325,000 | 1,226,000 | ||||
FIG LLC | New Media | Management Fee | ||||||||
Related Party Transaction [Line Items] | ||||||||
Incentive fee expense | 4,674,000 | 2,456,000 | 8,433,000 | 4,912,000 | ||||
Fees paid | 3,759,000 | 2,456,000 | 7,383,000 | 6,167,000 | ||||
FIG LLC | New Media | Incentive Fee | ||||||||
Related Party Transaction [Line Items] | ||||||||
Incentive fee expense | 0 | 1,413,000 | 0 | 1,413,000 | ||||
Fees paid | $ 0 | 0 | $ 2,602,000 | 5,220,000 | ||||
Manager | FIG LLC | New Media | ||||||||
Related Party Transaction [Line Items] | ||||||||
Shares issued to management (in shares) | 4,205,607 | |||||||
Option | Manager | FIG LLC | New Media | ||||||||
Related Party Transaction [Line Items] | ||||||||
Stock options granted (in shares) | 3,163,264 | |||||||
Stock price (in dollars per share) | $ 15.50 | |||||||
Consecutive trading days with certain price triggering vesting | 20 days | |||||||
Price of stock triggering option vesting (in dollars per share) | $ 20 | |||||||
Fortress Investment Group LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Affiliates ownership | 4.00% | |||||||
Outstanding warrants | 40.00% | |||||||
Number of stock options (in shares) | 6,068,075 | 6,068,075 | ||||||
Payment of dividends | $ 0 | $ 200,000 | $ 0 | $ 500,000 |