Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 02, 2021 | |
Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
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 | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock Shares Outstanding | 142,327,552 | |
Entity Central Index Key | 0001579684 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Common stock | ||
Entity Information | ||
Title of Each Class | Common Stock, par value $0.01 per share | |
Trading Symbol | GCI | |
Name of Each Exchange on Which Registered | NYSE | |
Preferred Stock Purchase Rights | ||
Entity Information | ||
Title of Each Class | Preferred Stock Purchase Rights | |
Name of Each Exchange on Which Registered | NYSE | |
No Trading Symbol | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 141,302 | $ 170,725 |
Accounts receivable, net of allowance for doubtful accounts of $16,411 and $20,843 as of September 30, 2021 and December 31, 2020, respectively | 301,016 | 314,305 |
Inventories | 33,492 | 35,075 |
Prepaid expenses and other current assets | 111,689 | 116,581 |
Total current assets | 587,499 | 636,686 |
Property, plant and equipment, net of accumulated depreciation of $363,200 and $362,029 as of September 30, 2021 and December 31, 2020, respectively | 461,923 | 590,272 |
Operating lease assets | 279,353 | 289,504 |
Goodwill | 533,797 | 534,088 |
Intangible assets, net | 741,591 | 824,650 |
Deferred tax assets | 63,136 | 90,240 |
Other assets | 242,704 | 143,474 |
Total assets | 2,910,003 | 3,108,914 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 357,324 | 378,246 |
Deferred revenue | 196,259 | 186,007 |
Current portion of long-term debt | 104,948 | 128,445 |
Other current liabilities | 54,753 | 48,602 |
Total current liabilities | 713,284 | 741,300 |
Long-term debt | 741,636 | 890,323 |
Convertible debt | 399,875 | 581,405 |
Deferred tax liabilities | 21,419 | 6,855 |
Pension and other postretirement benefit obligations | 88,149 | 99,765 |
Long-term operating lease liabilities | 261,429 | 274,460 |
Other long-term liabilities | 141,577 | 151,847 |
Total noncurrent liabilities | 1,654,085 | 2,004,655 |
Total liabilities | 2,367,369 | 2,745,955 |
Redeemable noncontrolling interests | (2,209) | (1,150) |
Commitments and contingent liabilities (See Note 12) | ||
Equity | ||
Preferred stock, $0.01 par value, 300,000 shares authorized, of which 150,000 shares are designated as Series A Junior Participating Preferred Stock, none of which were issued and outstanding at September 30, 2021 and December 31, 2020 | 0 | 0 |
Common stock of $0.01 par value per share, 2,000,000,000 shares authorized, 144,653,850 shares issued and 142,519,768 shares outstanding at September 30, 2021; 139,494,741 shares issued and 138,102,993 shares outstanding at December 31, 2020 | 1,446 | 1,395 |
Treasury stock at cost, 2,134,082 shares and 1,391,748 shares at September 30, 2021 and December 31, 2020, respectively | (6,940) | (4,903) |
Additional paid-in capital | 1,399,693 | 1,103,881 |
Accumulated deficit | (898,951) | (786,437) |
Accumulated other comprehensive income | 49,595 | 50,173 |
Total equity | 544,843 | 364,109 |
Total liabilities and equity | $ 2,910,003 | $ 3,108,914 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Trade receivables, allowance for doubtful receivables | $ 16,411 | $ 20,843 |
Property plant and equipment, accumulated depreciation | $ 363,200 | $ 362,029 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock authorized (in shares) | 300,000 | 300,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
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) | 144,653,850 | 139,494,741 |
Common stock, outstanding (in shares) | 142,519,768 | 138,102,993 |
Treasury stock (in shares) | 2,134,082 | 1,391,748 |
Series A Junior Participating Preferred Stock | ||
Preferred stock authorized (in shares) | 150,000 | 150,000 |
Preferred stock, outstanding (in shares) | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Total operating revenues | $ 800,185 | $ 814,539 | $ 2,381,544 | $ 2,530,223 |
Operating costs | 480,289 | 492,342 | 1,431,259 | 1,535,539 |
Selling, general and administrative expenses | 225,596 | 241,652 | 652,184 | 767,275 |
Depreciation and amortization | 48,107 | 61,355 | 154,452 | 205,706 |
Restructuring provision included in integration and reorganization costs | 13,619 | 13,417 | 35,467 | 73,978 |
Asset impairments | 2,301 | 1,585 | 3,134 | 8,444 |
Goodwill and intangible impairments | 0 | 0 | 0 | 393,446 |
(Gain) loss on sale or disposal of assets, net | (833) | 795 | 9,206 | 1,540 |
Other operating expenses | 4 | 1,913 | 11,354 | 10,261 |
Total operating expenses | 769,083 | 813,059 | 2,297,056 | 2,996,189 |
Operating income (loss) | 31,102 | 1,480 | 84,488 | (465,966) |
Interest expense | 34,603 | 58,063 | 109,370 | 173,890 |
Loss on early extinguishment of debt | 3,761 | 476 | 25,996 | 1,650 |
Non-operating pension income | (23,860) | (18,334) | (71,644) | (54,433) |
Loss on convertible notes derivative | 0 | 0 | 126,600 | 0 |
Other income, net | (931) | (10,375) | (3,954) | (14,988) |
Non-operating expense | 13,573 | 29,830 | 186,368 | 106,119 |
Income (loss) before income taxes | 17,529 | (28,350) | (101,880) | (572,085) |
Provision (benefit) for income taxes | 2,984 | 3,098 | 11,567 | (22,200) |
Net income (loss) | 14,545 | (31,448) | (113,447) | (549,885) |
Net loss attributable to redeemable noncontrolling interests | (142) | (188) | (933) | (1,580) |
Net income (loss) attributable to Gannett | $ 14,687 | $ (31,260) | $ (112,514) | $ (548,305) |
Income (loss) per share attributable to Gannett – basic (in dollars per share) | $ 0.11 | $ (0.24) | $ (0.84) | $ (4.17) |
Income (loss) per share attributable to Gannett– diluted (in dollars per share) | $ 0.09 | $ (0.24) | $ (0.84) | $ (4.17) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | $ (5,487) | $ 7,677 | $ (700) | $ (8,908) |
Pension and other postretirement benefit items: | ||||
Net actuarial loss | 0 | 0 | (300) | (8,078) |
Amortization of net actuarial loss (gain) | 25 | (11) | 40 | (36) |
Other | 1,051 | (714) | 205 | 347 |
Total pension and other postretirement benefit items | 1,076 | (725) | (55) | (7,767) |
Other comprehensive income (loss) before tax | (4,411) | 6,952 | (755) | (16,675) |
Income tax expense (benefit) related to components of other comprehensive income (loss) | 7 | 1 | (177) | (2,062) |
Other comprehensive income (loss), net of tax | (4,418) | 6,951 | (578) | (14,613) |
Comprehensive income (loss) | 10,127 | (24,497) | (114,025) | (564,498) |
Comprehensive loss attributable to redeemable noncontrolling interests | (142) | (188) | (933) | (1,580) |
Comprehensive income (loss) attributable to Gannett | 10,269 | (24,309) | (113,092) | (562,918) |
Advertising and marketing services | ||||
Total operating revenues | 412,020 | 405,227 | 1,220,487 | 1,249,156 |
Circulation | ||||
Total operating revenues | 306,702 | 336,158 | 942,398 | 1,053,528 |
Other | ||||
Total operating revenues | $ 81,463 | $ 73,154 | $ 218,659 | $ 227,539 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating activities | ||
Net loss | $ (113,447) | $ (549,885) |
Adjustments to reconcile net loss to operating cash flows: | ||
Depreciation and amortization | 154,452 | 205,706 |
Share-based compensation expense | 13,804 | 22,812 |
Non-cash interest expense | 18,719 | 17,813 |
(Gain) loss on sale or disposal of assets, net | 9,206 | 1,540 |
Loss on convertible notes derivative | 126,600 | 0 |
Loss on early extinguishment of debt | 25,996 | 1,650 |
Goodwill and intangible impairments | 0 | 393,446 |
Asset impairments | 3,134 | 8,444 |
Pension and other postretirement benefit obligations | (114,663) | (77,274) |
Change in other assets and liabilities, net | 9,546 | 50,028 |
Net cash provided by operating activities | 133,347 | 74,280 |
Investing activities | ||
Purchase of property, plant and equipment | (27,265) | (28,944) |
Proceeds from sale of real estate and other assets | 67,434 | 26,186 |
Change in other investing activities | (933) | 779 |
Net cash provided by (used for) investing activities | 39,236 | (1,979) |
Financing activities | ||
Payments of debt issuance costs | (33,921) | 0 |
Borrowings under term loans | 1,045,000 | 0 |
Repayments under term loans | (1,220,751) | (27,619) |
Deferred payments for acquisitions | 0 | (7,544) |
Payments for employee taxes withheld from stock awards | (2,034) | (1,960) |
Changes in other financing activities | (578) | (348) |
Net cash used for financing activities | (212,284) | (37,471) |
Effect of currency exchange rate change on cash | 389 | 439 |
(Decrease) increase in cash, cash equivalents and restricted cash | (39,312) | 35,269 |
Balance of cash, cash equivalents and restricted cash at beginning of period | 206,726 | 188,664 |
Balance of cash, cash equivalents and restricted cash at end of period | $ 167,414 | $ 223,933 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit | Treasury stock |
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) attributable to Gannett | (548,305) | (548,305) | ||||
Restricted stock awards settled, net of withholdings | (10,788) | $ 31 | (10,819) | |||
Restricted stock awards settled, net of withholdings (in shares) | 3,072,991 | |||||
Restricted share grants | 0 | $ 44 | (44) | |||
Restricted share grants (in shares) | 4,346,313 | |||||
Other comprehensive income (loss), net of income tax | (14,613) | (14,613) | ||||
Share-based compensation expense | 22,812 | 22,812 | ||||
Issuance of common stock | 1,615 | $ 6 | 1,609 | |||
Issuance of common stock (in shares) | 673,134 | |||||
Remeasurement of redeemable noncontrolling interests | (3,878) | (3,878) | ||||
Treasury stock | (1,960) | $ (1,960) | ||||
Treasury stock (in shares) | 322,524 | |||||
Restricted share forfeiture | (5) | $ (5) | ||||
Restricted share forfeiture (in shares) | 455,738 | |||||
Other activity | (105) | (105) | ||||
Ending balance at Sep. 30, 2020 | 426,129 | $ 1,375 | 1,100,269 | (6,411) | (664,263) | $ (4,841) |
Ending balance (in shares) at Sep. 30, 2020 | 137,478,696 | 1,172,976 | ||||
Beginning balance at Jun. 30, 2020 | 452,085 | $ 1,369 | 1,101,899 | (13,362) | (633,003) | $ (4,818) |
Beginning balance (in shares) at Jun. 30, 2020 | 136,885,320 | 770,973 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) attributable to Gannett | (31,260) | (31,260) | ||||
Restricted stock awards settled, net of withholdings | (860) | $ 6 | (866) | |||
Restricted stock awards settled, net of withholdings (in shares) | 564,406 | |||||
Other comprehensive income (loss), net of income tax | 6,951 | 6,951 | ||||
Share-based compensation expense | 3,844 | 3,844 | ||||
Issuance of common stock | (961) | (961) | ||||
Issuance of common stock (in shares) | 28,970 | |||||
Remeasurement of redeemable noncontrolling interests | (3,878) | (3,878) | ||||
Treasury stock | (19) | $ (19) | ||||
Treasury stock (in shares) | 4,837 | |||||
Restricted share forfeiture | (4) | $ (4) | ||||
Restricted share forfeiture (in shares) | 397,166 | |||||
Other activity | 231 | 231 | ||||
Ending balance at Sep. 30, 2020 | 426,129 | $ 1,375 | 1,100,269 | (6,411) | (664,263) | $ (4,841) |
Ending balance (in shares) at Sep. 30, 2020 | 137,478,696 | 1,172,976 | ||||
Beginning balance at Dec. 31, 2020 | 364,109 | $ 1,395 | 1,103,881 | 50,173 | (786,437) | $ (4,903) |
Beginning balance (in shares) at Dec. 31, 2020 | 139,494,741 | 1,391,748 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) attributable to Gannett | (112,514) | (112,514) | ||||
Restricted stock awards settled, net of withholdings | (1,902) | $ 10 | (1,912) | |||
Restricted stock awards settled, net of withholdings (in shares) | 1,064,697 | |||||
Restricted share grants | 0 | $ 39 | (39) | |||
Restricted share grants (in shares) | 3,883,062 | |||||
Equity component of the 2027 Notes | 283,718 | 283,718 | ||||
Other comprehensive income (loss), net of income tax | (578) | (578) | ||||
Share-based compensation expense | 13,804 | 13,804 | ||||
Issuance of common stock | 101 | $ 2 | 99 | |||
Issuance of common stock (in shares) | 211,350 | |||||
Remeasurement of redeemable noncontrolling interests | 126 | 126 | ||||
Treasury stock | (2,034) | $ (2,034) | ||||
Treasury stock (in shares) | 511,828 | |||||
Restricted share forfeiture | (3) | $ (3) | ||||
Restricted share forfeiture (in shares) | 230,506 | |||||
Other activity | 16 | 16 | ||||
Ending balance at Sep. 30, 2021 | 544,843 | $ 1,446 | 1,399,693 | 49,595 | (898,951) | $ (6,940) |
Ending balance (in shares) at Sep. 30, 2021 | 144,653,850 | 2,134,082 | ||||
Beginning balance at Jun. 30, 2021 | 530,077 | $ 1,446 | 1,395,191 | 54,013 | (913,638) | $ (6,935) |
Beginning balance (in shares) at Jun. 30, 2021 | 144,638,938 | 2,014,664 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) attributable to Gannett | 14,687 | 14,687 | ||||
Restricted stock awards settled, net of withholdings | (6) | (6) | ||||
Restricted stock awards settled, net of withholdings (in shares) | 2,857 | |||||
Restricted share grants (in shares) | 5,226 | |||||
Other comprehensive income (loss), net of income tax | (4,418) | (4,418) | ||||
Share-based compensation expense | 4,602 | 4,602 | ||||
Issuance of common stock | 38 | 38 | ||||
Issuance of common stock (in shares) | 6,829 | |||||
Treasury stock | (4) | $ (4) | ||||
Treasury stock (in shares) | 118,675 | |||||
Restricted share forfeiture | (1) | $ (1) | ||||
Restricted share forfeiture (in shares) | 743 | |||||
Other activity | (132) | (132) | ||||
Ending balance at Sep. 30, 2021 | $ 544,843 | $ 1,446 | $ 1,399,693 | $ 49,595 | $ (898,951) | $ (6,940) |
Ending balance (in shares) at Sep. 30, 2021 | 144,653,850 | 2,134,082 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||||
Other comprehensive income, tax expense (benefit) | $ 7 | $ 1 | $ (177) | $ (2,062) |
Description of Business and bas
Description of Business and basis of presentation | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Description of Business and basis of presentation | NOTE 1 — Description of Business and basis of presentation Description of Business Gannett Co., Inc. ("Gannett", "we", "us", "our", or the "Company") is a subscription-led and digitally-focused media and marketing solutions company committed to empowering communities to thrive. We aim to be the premier source for clarity, connections and solutions within our communities. Our strategy is focused on driving audience growth and engagement by delivering deeper content experiences to our consumers, while offering the products and marketing expertise our advertisers desire. The execution of this strategy is expected to allow the Company to continue its evolution from a more traditional print media business to a digitally-focused content platform. Our current portfolio of media assets includes USA TODAY, local media organizations in 46 states in the U.S., and Newsquest, a wholly-owned subsidiary operating in the United Kingdom (the "U.K.") with more than 120 local media brands. Gannett also owns the digital marketing services companies ReachLocal, Inc. ("ReachLocal"), UpCurve, Inc. ("UpCurve"), and WordStream, Inc. ("WordStream"), which are marketed under the LOCALiQ brand, and runs the largest media-owned events business in the U.S., USA TODAY NETWORK Ventures. Through USA TODAY, our local property network, and Newsquest, Gannett delivers high-quality, trusted content where and when consumers want to engage on virtually any device or platform. Additionally, the Company has strong relationships with thousands of local and national businesses in both our U.S. and U.K. markets due to our large local and national sales forces and a robust advertising and marketing solutions product suite. The Company reports in two segments: Publishing and Digital Marketing Solutions ("DMS"). A full description of our segments is included in Note 13 — Segment reporting in the notes to the condensed consolidated financial statements. Impacts of the COVID-19 pandemic As a result of the COVID-19 pandemic, we experienced a significant decline in Advertising and marketing services revenues, which accelerated the secular declines that we continue to experience. In addition, we continue to experience constraints on the sales of single copy newspapers, largely tied to business travel and in-person events. While we have seen operating trends improve since the second quarter of 2020, which represents the quarter that was most significantly impacted by the pandemic, we expect that the COVID-19 pandemic will continue to have a negative impact on our business and results of operations in the near-term, including lower revenues associated with events and lower sales of single copy newspapers, largely as a result of reduced business travel. If the COVID-19 pandemic were to revert to conditions that existed during 2020, including measures to help mitigate and control the spread of the virus, we would expect to experience further negative impacts in Advertising and marketing services and Circulation revenues. We have implemented, and continue to implement, measures to reduce costs and preserve cash flow. These measures include, evaluating and applying for all governmental relief programs for which we are eligible, including the Paycheck Protection Program ("PPP"), suspending our quarterly dividend, and debt refinancing, as well as reducing discretionary spending. In addition, we are continuing with our previously-disclosed plan to monetize non-core assets. In connection with the CARES Act, the Company received PPP funding in support of certain of our locations that were meaningfully affected by the COVID-19 pandemic totaling $16.4 million, which was included in Operating activities in the condensed consolidated statements of cash flows for the nine months ended September 30, 2021. As permitted under the CARES Act, during the third quarter of 2021, the Company received forgiveness of such loans totaling $15.1 million, which was recognized in earnings in the condensed consolidated statements of operations and comprehensive income (loss) as an offset to Operating costs of $11.1 million and Selling, general, and administrative expenses of $4.0 million. As of September 30, 2021, the remaining PPP loans of $1.3 million were included in Other long-term liabilities in the condensed consolidated balance sheets. Management has applied for forgiveness of the remaining PPP loans in accordance with applicable guidelines. Interest expense related to PPP funding was immaterial for the three and nine months ended September 30, 2021. 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, 2020. Use of estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and footnotes thereto. Actual results could differ materially from those estimates. Significant estimates inherent in the preparation of the condensed consolidated financial statements include pension and postretirement benefit obligation assumptions, income taxes, goodwill and intangible asset impairment analysis, valuation of property, plant and equipment and intangible assets and the mark to market of the conversion feature associated with the convertible debt. Recent accounting pronouncements adopted Simplifying the Accounting for Income Taxes In December 2019, the Financial Accounting Standards Board (the "FASB") issued new guidance that simplifies the accounting for income taxes. The guidance amends the rules for recognizing deferred taxes for investments, performing intraperiod tax allocations and calculating income taxes in interim periods. It also reduces complexity in certain areas, including accounting for transactions that result in a step-up in the tax basis of goodwill and allocating taxes to members of a consolidated group. This guidance is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. A dopting this guidance allowed the Company to record a tax benefit for the first quarter of 2021 because year-to-date losses on interim periods are no longer limited to losses annually forecasted, but did not have a material impact on the Company's condensed consolidated financial statements in subsequent quarters. Recent accounting pronouncements not yet adopted Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | NOTE 2 — Revenues Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company’s condensed consolidated statements of operations and comprehensive income (loss) present revenues disaggregated by revenue type. Sales taxes and other usage-based taxes are excluded from revenues. The following table presents our revenues disaggregated by source: Three months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Print advertising $ 190,044 $ 208,047 $ 584,165 $ 664,047 Digital advertising and marketing services 221,976 197,180 636,322 585,109 Total advertising and marketing services 412,020 405,227 1,220,487 1,249,156 Circulation 306,702 336,158 942,398 1,053,528 Other 81,463 73,154 218,659 227,539 Total revenues $ 800,185 $ 814,539 $ 2,381,544 $ 2,530,223 Revenues generated from international locations were approximately 8% for both the three and nine months ended September 30, 2021 and approximately 7% for both the three and nine months ended September 30, 2020. Deferred revenues The Company records deferred revenues when cash payments are received in advance of the Company’s performance obligation. The Company's primary source of deferred revenues is from circulation subscriptions paid in advance of the service provided, which represents future delivery of publications (the performance obligation) to subscription customers. The Company expects to recognize the revenue related to unsatisfied performance obligations over the next one The Company's payment terms vary by the type and location of the customer and the products or services offered. The period between invoicing and when payment is due is not significant. For certain products or services and customer types, the Company requires payment before the products or services are delivered to the customer. The majority of our subscription customers are billed and pay on monthly terms. The following table presents changes in the deferred revenues balance by type of revenues: Nine months ended September 30, 2021 Nine months ended September 30, 2020 In thousands Advertising, Marketing Services, and Other Circulation Total Advertising, Marketing Services, and Other Circulation Total Beginning balance $ 51,686 $ 134,321 $ 186,007 $ 67,543 $ 151,280 $ 218,823 Cash receipts 226,214 738,366 964,580 215,050 878,856 1,093,906 Revenue recognized (206,203) (748,125) (954,328) (221,052) (884,080) (1,105,132) Ending balance $ 71,697 $ 124,562 $ 196,259 $ 61,541 $ 146,056 $ 207,597 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | NOTE 3 — Leases We lease certain real estate, vehicles, and equipment. Our leases have remaining lease terms of one As of September 30, 2021, our condensed consolidated balance sheets included $279.4 million of operating lease right-to-use assets, $48.3 million of short-term operating lease liabilities included in Other current liabilities The components of lease expense are as follows: Three months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Operating lease cost (a) $ 19,977 $ 20,924 $ 60,626 $ 62,429 Short-term lease cost (b) 133 828 698 5,315 Variable lease cost 2,963 2,897 8,685 9,713 Net lease cost $ 23,073 $ 24,649 $ 70,009 $ 77,457 (a) Includes sublease income of $1.7 million and $0.9 million for the three months ended September 30, 2021 and 2020, respectively, and $4.7 million and $2.9 million for the nine months ended September 30, 2021 and 2020, respectively. (b) Excluding expenses relating to leases with a lease term of 12 months or less. Future minimum lease payments under non-cancellable leases are as follows: In thousands Year ended December 31, (a) 2021 (excluding the nine months ended September 30, 2021) $ 18,625 2022 81,364 2023 68,607 2024 60,380 2025 51,315 Thereafter 213,647 Total future minimum lease payments 493,938 Less: Imputed interest (184,245) Total $ 309,693 (a) Operating lease payments exclude $0.9 million of legally binding minimum lease payments for leases signed but not yet commenced. Supplemental information related to leases is as follows: Nine months ended September 30, In thousands, except lease term and discount rate 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 59,989 $ 61,508 Right-of-use assets obtained in exchange for operating lease obligations 31,014 25,562 Gain on sale and leaseback transactions, net (1,568) — As of September 30, 2021 2020 Weighted-average remaining lease term (in years) 7.3 7.7 Weighted-average discount rate 12.81 % 12.66 % |
Accounts receivable, net
Accounts receivable, net | 9 Months Ended |
Sep. 30, 2021 | |
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 and recoveries) for the prior three-year period to total outstanding trade accounts receivable for the same three-year period. The calculated reserve percentage by customer category is applied to the consolidated gross advertising receivable balance, irrespective of aging. In addition, each category has specific reserves for at risk accounts that vary based on the nature of the underlying trade receivables. Due to the short-term nature of our circulation receivables, the Company reserves all receivables aged over 90 days. The following table presents changes in the allowance for doubtful accounts for the nine months ended September 30, 2021 and 2020: Nine months ended September 30, In thousands 2021 2020 Beginning balance $ 20,843 $ 19,923 Current period provision 3,478 23,075 Write-offs charged against the allowance (10,998) (21,139) Recoveries of amounts previously written-off 3,076 2,230 Disposition — (351) Foreign currency 12 11 Ending balance $ 16,411 $ 23,749 The calculation of the allowance considers current economic, industry and customer-specific conditions relative to their respective operating environments in the incremental allowances recorded related to high-risk accounts, bankruptcies, receivables in repayment plan and other aging specific reserves. As a result of this analysis, the Company adjusts specific reserves and the amount of allowable credit as appropriate. The collectability of trade receivables related to advertising, marketing services and other customers depends on a variety of factors, including trends in local, regional or national economic conditions that affect our customers' ability to pay. The advertisers in our newspapers and other publications and related websites are primarily retail businesses that can be significantly affected by regional or national economic downturns and other developments that may impact our ability to collect on the related receivables. Similarly, while circulation revenues related to individual subscribers are primarily prepaid, changes in economic conditions may also affect our ability to collect on amounts owed from single copy circulation customers. For the three and nine months ended September 30, 2021, the Company recorded $2.8 million and $3.5 million in bad debt expense, respectively. For the three and nine months ended September 30, 2020, the Company recorded $5.7 million and $23.1 million in bad debt expense, respectively. Bad debt expense is included in Selling, general and administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss). For the three months ended September 30, 2021, the decrease compared to the prior year period was driven by lower write-offs, as the prior year reflected the impact of the COVID-19 pandemic which resulted in higher bad debt expense and allowance for doubtful accounts. For the nine months ended September 30, 2021, the decrease compared to the prior year period was due to lower write-offs compared to the same period in the prior year, as the prior year reflected the impact of the COVID-19 pandemic. |
Goodwill and intangible assets
Goodwill and intangible assets | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and intangible assets | NOTE 5 — Goodwill and intangible assets Goodwill and intangible assets consisted of the following: September 30, 2021 December 31, 2020 In thousands Gross carrying amount Accumulated Net carrying Gross carrying amount Accumulated Net carrying Finite-lived intangible assets: Advertiser relationships $ 456,141 $ 144,326 $ 311,815 $ 460,331 $ 112,468 $ 347,863 Other customer relationships 102,685 32,439 70,246 102,925 23,682 79,243 Subscriber relationships 254,972 92,953 162,019 255,702 71,271 184,431 Other intangible assets 68,590 41,021 27,569 68,687 26,982 41,705 Sub-total $ 882,388 $ 310,739 $ 571,649 $ 887,645 $ 234,403 $ 653,242 Indefinite-lived intangible assets: Mastheads 169,942 171,408 Total intangible assets $ 741,591 $ 824,650 Goodwill $ 533,797 $ 534,088 Consistent with the Company’s past practice, the Company performed its annual goodwill and indefinite-lived intangible impairment assessment in the second quarter of 2021 with the assistance of third-party valuation specialists. Within the impairment analyses performed, the Company considered the current and expected future economic and market conditions and the impact on the fair value of each of the reporting units. The most significant assumptions utilized in the determination of the estimated fair values include revenue and cash flow 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 positive 3.0%. 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 11.0% to 15.0%. For goodwill, the Company determined the fair value of each reporting unit using a combination of a discounted cash flow analysis and a market-based approach. During the second quarter of 2021, the Company compared the fair value of each reporting unit to its carrying amount, which resulted in the fair value of all the reporting groups being in excess of their carrying values. For mastheads, the Company applied a "relief from royalty" approach, a discounted cash flow model, reflecting current assumptions, to fair value of the indefinite-lived intangible assets. During the second quarter of 2021, the Company compared the fair value of each indefinite-lived intangible asset to its carrying amount, which resulted in the fair value of each indefinite-lived intangible asset being in excess of its carrying value. In addition to the annual impairment test, the Company is required to regularly assess whether a triggering event has occurred under ASC 360, which would require interim impairment testing. As of September 30, 2021, the Company performed a review of potential impairment indicators and it was determined that no indicators of impairment were present. |
Integration and reorganization
Integration and reorganization costs and asset impairments | 9 Months Ended |
Sep. 30, 2021 | |
Restructuring and Related Activities [Abstract] | |
Integration and reorganization costs and asset impairments | NOTE 6 — Integration and reorganization costs and asset impairments Over the past several years, the Company has engaged in a series of individual restructuring programs, designed primarily to right-size the Company’s employee base, consolidate facilities and improve operations, including those of recently acquired entities. These initiatives impact all the Company’s operations and can be influenced by the terms of union contracts. Costs related to these programs, which primarily include severance expense, are accrued when probable and reasonably estimable or at the time of program announcement. Severance-related expenses We recorded severance-related expenses by segment as follows: Three months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Publishing $ 1,941 $ 3,983 $ 10,125 $ 35,401 Digital Marketing Solutions 402 1,196 321 5,333 Corporate and other 317 2,103 440 14,069 Total $ 2,660 $ 7,282 $ 10,886 $ 54,803 A rollforward of the accrued severance and related costs included in Accounts payable and accrued expenses on the condensed consolidated balance sheets for the nine months ended September 30, 2021 is as follows: In thousands Severance and Beginning balance $ 30,943 Restructuring provision included in integration and reorganization costs 10,886 Cash payments (31,869) Ending balance $ 9,960 The restructuring reserve balance is expected to be paid out over the next twelve months. Facility consolidation and other restructuring-related expenses Facility consolidation and other restructuring-related expenses represent costs for consolidating operations, systems implementation, and outsourcing of corporate functions. We recorded facility consolidation charges and other restructuring-related costs by segment as follows: Three months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Publishing $ 1,571 $ 1,137 $ 516 $ 3,648 Digital Marketing Solutions 529 41 980 254 Corporate and other 8,859 4,957 23,085 15,273 Total $ 10,959 $ 6,135 $ 24,581 $ 19,175 Asset impairments For the three and nine months ended September 30, 2021, the Company recorded Asset impairment charges of $2.3 million and $3.1 million, respectively, at the Publishing segment primarily due to the impairment of real estate held for sale. For the three months ended September 30, 2020, the Company recorded Asset impairment charges at the Publishing segment of $0.9 million as a result of the Company's fixed asset disposals related to the continued consolidation of operations and recorded $7.7 million for the nine months ended September 30, 2020 as a result of a recoverability test for long-lived assets and fixed asset disposals during the period. For both the three and nine months ended September 30, 2020, the Company recorded $0.7 million of Asset impairment charges at the DMS segment as a result of fixed asset disposals related to the continued consolidation of operations. Accelerated depreciation |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 7 — Debt 5-Year Term Loan On February 9, 2021, the Company entered into a five-year, senior-secured term loan facility with the lenders from time to time party thereto and Citibank, N.A., as collateral agent and administrative agent for the lenders, in an aggregate principal amount of $1.045 billion (the "5-Year Term Loan"). The 5-Year Term Loan was to mature on February 9, 2026 and, at the Company's option, bore interest at a rate equal to LIBOR plus a margin equal to 7.00% per annum or an alternate base rate plus a margin equal to 6.00% per annum. Interest on the 5-Year Term Loan was payable at least every three months in arrears, beginning in May 2021. The proceeds from the 5-Year Term Loan were used to repay the remaining principal balance and accrued interest of $1.043 billion and $13.3 million, respectively, (the "Payoff") on the Company's five-year, senior-secured 11.5% term loan facility with Apollo Capital Management, L.P. (the "Acquisition Term Loan") and to pay fees and expenses incurred to obtain the 5-Year Term Loan. There were certain lenders that participated in both the Acquisition Term Loan and the 5-Year Term Loan and their balances in the Acquisition Term Loan were deemed to be modified. The Company continued to defer, over the term, the deferred financing fees and original issue discount from the Acquisition Term Loan of $1.5 million and $34.7 million, respectively, related to those lenders. Further, certain lenders in the Acquisition Term Loan did not participate in the 5-Year Term Loan and their balances in the Acquisition Term Loan were deemed to be extinguished. The Company recognized a Loss on early extinguishment of debt of $17.2 million in the first quarter of 2021 as a result of the write-off of the remaining original issue discount and deferred financing fees related to those lenders. Third-party fees of approximately $13.0 million were allocated to the new lenders in the 5-Year Term Loan on a pro-rata basis, and $20.9 million of original issue discount were capitalized and amortized over the term of the 5-Year Term Loan using the effective interest method. For the nine months ended September 30, 2021, third-party fees of $10.9 million, which were allocated to the lenders whose balances were deemed to be modified, were expensed and recorded in Other operating expenses in the condensed consolidated statements of operations and comprehensive income (loss). No third-party fees were incurred during the three months ended September 30, 2021. The 5-Year Term Loan amortized in equal quarterly installments at a rate of 10% per annum (or, if the ratio of Total Indebtedness secured on an equal priority basis with the 5-Year Term Loan (net of Unrestricted Cash) to Consolidated EBITDA (as such terms are defined in the 5-Year Term Loan) was equal to or less than a specified ratio, 5% per annum) (the "Quarterly Amortization Installment"), beginning September 30, 2021. In addition, we were required to repay the 5-Year Term Loan from time to time with (i) the proceeds of non-ordinary course asset sales and casualty and condemnation events, (ii) the proceeds of indebtedness that was not otherwise permitted under the 5-Year Term Loan and (iii) the aggregate amount of cash and cash equivalents on hand in excess of $100 million at the end of each fiscal year. The 5-Year Term Loan was subject to a requirement to have minimum unrestricted cash of $30 million as of the last day of each fiscal quarter. As of September 30, 2021, the Company was in compliance with all of the covenants and obligations under the 5-Year Term Loan. As of September 30, 2021, the Company had $899.4 million in aggregate principal outstanding under the 5-Year Term Loan, $11.5 million of unamortized deferred financing costs, and $41.4 million of unamortized original issue discount and an effective interest rate of 9.5%. During the three months ended September 30, 2021, the Company recorded interest expense of $19.2 million and paid $30.3 million for interest expense related to the 5-Year Term Loan. During the nine months ended September 30, 2021, the Company recorded interest expense of $50.5 million and $13.4 million for the 5-Year Term Loan and the Acquisition Term Loan, respectively, and paid interest expense of $50.5 million and $13.4 million for the 5-Year Term Loan and the Acquisition Term Loan, respectively. Additionally, during the three and nine months ended September 30, 2021, the Company had $3.8 million and $26.0 million, respectively, related to Loss on early extinguishment of debt, which related to the write-off of original issue discount and deferred financing fees as a result of early prepayments on the 5-Year Term Loan and Acquisition Term Loan. Included in the Loss on early extinguishment of debt for the nine months ended September 30, 2021, was $17.2 million related to the write-off of the remaining original issue discount and deferred financing fees from the Acquisition Term Loan and approximately $2.2 million related to the write-off of original issue discount and deferred financing fees as a result of early prepayments on the Acquisition Term Loan prior to the Payoff. For the three and nine months ended September 30, 2021, the Company recorded $0.9 million and $2.4 million, respectively, of amortization of deferred financing costs, and $3.4 million and $8.7 million, respectively, of amortization of original issue discount, for the 5-Year Term Loan. For the three and nine months ended September 30, 2020, the Company recorded $0.2 million and $0.7 million, respectively, of amortization of deferred financing costs, and $5.6 million and $17.0 million, respectively, of amortization of original issue discount for the Acquisition Term Loan. Under the 5-Year Term Loan, the Company was contractually obligated to make prepayments with the proceeds from asset sales and could have elected to make optional payments with excess free cash flow from operations. For the three and nine months ended September 30, 2021, we made prepayments totaling $91.1 million and $145.6 million, respectively, which were classified as financing activities in the condensed consolidated statements of cash flows. These amounts are inclusive of both mandatory and optional prepayments. The 5-Year Term Loan was repaid in full on October 15, 2021. Refer to Note 15 — Subsequent events for further information regarding the debt refinancing. Senior Secured Convertible Notes due 2027 On November 17, 2020, the Company issued $497.1 million in aggregate principal amount of the Company’s 6.0% Senior Secured Convertible Notes due 2027 (the "2027 Notes"). The 2027 Notes were issued pursuant to an Indenture dated as of November 17, 2020, as amended by the First Supplemental Indenture dated as of December 21, 2020 and the Second Supplemental Indenture dated as of February 9, 2021 (collectively, the "2027 Notes Indenture"), between the Company and U.S. Bank National Association, as trustee. In connection with the issuance of the 2027 Notes, the Company entered into an Investor Agreement (the "Investor Agreement") with the holders of the 2027 Notes (the "Holders") establishing certain terms and conditions concerning the rights and restrictions on the Holders with respect to the Holders' ownership of the 2027 Notes. The Company also entered into an amendment to the Registration Rights Agreement dated November 19, 2019, between the Company and FIG LLC. Interest on the 2027 Notes is payable semi-annually in arrears. The 2027 Notes mature on December 1, 2027, unless earlier repurchased or converted. The 2027 Notes may be converted at any time by the holders into cash, shares of the Company’s common stock, par value $0.01 per share (“Common Stock”) or any combination of cash and Common Stock, at the Company's election. The initial conversion rate is 200 shares of Common Stock per $1,000 principal amount of the 2027 Notes, which is equal to a conversion price of $5.00 per share of Common Stock (the "Conversion Price"). The conversion rate is subject to customary adjustment provisions as provided in the 2027 Notes Indenture. In addition, the conversion rate will be subject to adjustment in the event of any issuance or sale of Common Stock (or securities convertible into Common Stock) at a price equal to or less than the Conversion Price in order to ensure that following such issuance or sale, the 2027 Notes would be convertible into approximately 42% of the Common Stock after giving effect to such issuance or sale assuming the initial principal amount of the 2027 Notes remains outstanding. Upon the occurrence of a "Make-Whole Fundamental Change" (as defined in the 2027 Notes Indenture), the Company will in certain circumstances increase the conversion rate for a specified period of time. If a "Fundamental Change" (as defined in the 2027 Notes Indenture) occurs, the Company will be required to offer to repurchase the 2027 Notes at a repurchase price of 110% of the principal amount thereof. Holders of the 2027 Notes will have the right to put up to approximately $100 million of the 2027 Notes at par on or after the date that is 91 days after the maturity date of the 5-Year Term Loan or any Refinancing Facilities (as defined in the 2027 Notes Indenture) in respect thereof. Under the 2027 Notes Indenture, the Company can only pay cash dividends up to an agreed-upon amount, provided the ratio of consolidated debt to EBITDA (as such terms are defined in the 2027 Notes Indenture) does not exceed a specified ratio. In addition, the 2027 Notes Indenture provides that, at any time that the Company’s Total Gross Leverage Ratio (as defined in the 2027 Notes Indenture) exceeds 1.5 and the Company approves the declaration of a dividend, the Company must offer to purchase a principal amount of 2027 Notes equal to the proposed amount of the dividend. Until the four-year anniversary of the issuance date, the Company will have the right to redeem for cash up to approximately $99.4 million of the 2027 Notes at a redemption price of 130% of the principal amount thereof, with such amount reduced ratably by any principal amount of 2027 Notes that has been converted by the holders or redeemed or purchased by the Company. The 2027 Notes are guaranteed by Gannett Holdings LLC ("Gannett Holdings") and any subsidiaries of the Company that guaranteed the 5-Year Term Loan. The 2027 Notes are secured by the same collateral that secured the 5-Year Term Loan. The 2027 Notes rank as senior secured debt of the Company and are secured by a second priority lien on the same collateral package that secured the indebtedness incurred in connection with the 5-Year Term Loan. The 2027 Notes Indenture includes affirmative and negative covenants, including limitations on liens, indebtedness, dispositions, loan, advances and investors, sale and leaseback transactions, restricted payments, transactions with affiliates, restrictions on dividends and other payment restrictions affecting restricted subsidiaries, negative pledges and modifications to certain agreements. The 2027 Notes Indenture also requires that the Company maintain, as of the last day of each fiscal quarter, at least $30.0 million of Qualified Cash (as defined in the 2027 Notes Indenture). The 2027 Notes Indenture includes customary events of default. Upon issuance, the $497.1 million principal value of the 2027 Notes was separated into two components: (i) a debt component and (ii) a derivative component. At that time, we determined that the conversion option was not clearly and closely related to the economic characteristics of the 2027 Notes, nor did the conversion option meet the scope exception related to contracts in an entity’s own equity, as we did not have the ability to control whether the settlement of the conversion feature, if settled in full, would be in cash or shares due to the approval requirement to issue those shares. As a result, we concluded that the embedded conversion option must be separated from the debt liability, separately valued, and accounted for as a derivative liability. The initial value allocated to the derivative liability was $115.3 million, with a corresponding reduction in the carrying value of the 2027 Notes. The derivative liability was reported within Convertible debt in the condensed consolidated balance sheets at December 31, 2020 and was marked to fair value through earnings. The $389.1 million debt liability component of the 2027 Notes was initially measured at fair value using the present value of its cash flows at a discount rate of 10.7% and is reported as Convertible debt in the condensed consolidated balance sheets. The debt liability component of the 2027 Notes is classified as Level 2 because it is measured at fair value using commonly accepted valuation methodologies and indirectly observable, market-based risk measurements and historical data, and a review of prices and terms available for similar debt instruments that do not contain a conversion feature. At the Special Meeting of stockholders of the Company, held on February 26, 2021 (the "Special Meeting"), our stockholders approved the issuance of the maximum number of shares of Common Stock issuable upon conversion of the 2027 Notes. As a result, the conversion option can be share-settled in full. The Company concluded that as of February 26, 2021, the conversion option qualified for equity classification and the bifurcated derivative liability no longer needed to be accounted for as a separate derivative on a prospective basis from the date of reassessment. As of February 26, 2021, the fair value of the conversion option of $316.2 million was reclassified to Equity as Additional paid-in capital. Any remaining debt discount that arose at the date of debt issuance from the original bifurcation will continue to be amortized through interest expense. During the nine months ended September 30, 2021, the deferred tax asset related to the embedded conversion feature of the 2027 Notes was reclassified to Equity as a reduction to Additional paid-in-capital and reduced the carrying amount of the equity component of the 2027 Notes to $283.7 million. As of February 26, 2021, the date of reassessment, and December 31, 2020, the estimated fair value of the derivative liability for the embedded conversion feature was $316.2 million and $189.6 million, respectively. At December 31, 2020, the derivative liability was reported within Convertible debt in the condensed consolidated balance sheets. The derivative liability was classified as Level 3 because it is measured at fair value on a recurring basis using a binomial lattice model using assumptions based on market information and historical data, and significant unobservable inputs. The increase in the fair value of the derivative liability of $126.6 million at the date of reassessment and reclassification to Equity was due to the increase in our stock price, partially offset by the increase in the discount rate, and was recorded in Non-Operating Other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss) for the nine months ended September 30, 2021. The loss due to the revaluation of the derivative is not deductible for tax purposes. The assumptions used to determine the fair value as of February 26, 2021 and December 31, 2020 were: February 26, 2021 December 31, 2020 Annual volatility 70.0 % 70.0 % Discount rate 12.2 % 9.3 % Stock price $ 4.95 $ 3.36 Total debt issuance costs of $2.3 million will be amortized over the 7-year contractual life of the 2027 Notes. The unamortized discount will be amortized over the remaining contractual life of the 2027 Notes. For the three and nine months ended September 30, 2021, interest expense on the 2027 Notes totaled $7.5 million and $22.4 million, respectively. Amortization of the discount was $2.9 million and $7.9 million for the three and nine months ended September 30, 2021, respectively. Amortization of debt issuance costs were immaterial and $0.2 million for the three and nine months ended September 30, 2021, respectively. The effective interest rate on the liability component of the 2027 Notes was 10.5% as of September 30, 2021. Additional information related to the liability component of the 2027 Notes includes the following: In thousands September 30, 2021 December 31, 2020 Net carrying value of liability component $ 396.6 $ 388.4 Unamortized discount of liability component $ 100.5 $ 108.7 For the nine months ended September 30, 2021, no shares were issued upon conversion, exercise, or satisfaction of the required conditions. Refer to Note 10 — Supplemental equity information for details on the convertible debt's impact to diluted earnings per share under the if-converted method. |
Pensions and other postretireme
Pensions and other postretirement benefit plans | 9 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
Pensions and other postretirement benefit plans | NOTE 8 — Pensions and other postretirement benefit plans We, along with our subsidiaries, sponsor various defined benefit retirement plans, including plans established under collective bargaining agreements. Our retirement plans include the Gannett Retirement Plan (the "GR Plan"), the Newsquest and Romanes Pension Schemes in the U.K. (the "U.K. Pension Plans"), and other defined benefit and defined contribution plans. We also provide health care and life insurance benefits to certain retired employees who meet age and service requirements. Retirement plan costs include the following components: Pension Benefits Postretirement Benefits Three months ended September 30, Three months ended September 30, In thousands 2021 2020 2021 2020 Operating expenses: Service cost - benefits earned during the period $ 490 $ 693 $ 23 $ 27 Non-operating expenses: Interest cost on benefit obligation 17,042 20,670 428 580 Expected return on plan assets (41,355) (39,573) — — Amortization of actuarial loss (gain) 38 (26) (13) 15 Total non-operating (benefit) expenses $ (24,275) $ (18,929) $ 415 $ 595 Total expense (benefit) for retirement plans $ (23,785) $ (18,236) $ 438 $ 622 Pension Benefits Postretirement Benefits Nine months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Operating expenses: Service cost - benefits earned during the period $ 1,470 $ 2,078 $ 67 $ 79 Non-operating expenses: Interest cost on benefit obligation 51,179 61,803 1,330 1,740 Expected return on plan assets (124,193) (117,940) — — Amortization of actuarial loss (gain) 115 (80) (75) 44 Total non-operating (benefit) expenses $ (72,899) $ (56,217) $ 1,255 $ 1,784 Total expense (benefit) for retirement plans $ (71,429) $ (54,139) $ 1,322 $ 1,863 |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income taxes | NOTE 9 — Income taxes The following table outlines our pre-tax net income (loss) and income tax amounts: Three months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Income (loss) before income taxes $ 17,529 $ (28,350) $ (101,880) $ (572,085) Provision (benefit) for income taxes 2,984 3,098 11,567 (22,200) Effective tax rate 17.0 % *** (11.4) % 3.9 % *** Indicates an absolute value percentage change greater than 100. The provision for income taxes for the three months ended September 30, 2021 was mainly driven by pre-tax income and is impacted by forgiveness of PPP loans during the quarter. For federal tax purposes, book income from forgiven loans is not included in taxable income, and expenses paid utilizing the loan proceeds can be deducted. The impact of PPP loan forgiveness is partially offset by the creation of valuation allowances on non-deductible interest expense carryforwards. The provision was calculated using the estimated annual effective tax rate of 77.7%. The annual effective tax rate is principally impacted by the derivative revaluation, which is non-deductible for federal tax purposes, and the creation of valuation allowances on non-deductible interest expense carryforwards. T he estimated annual effective tax rate is based on a projected tax expense for the full year. The tax provision for the nine months ended September 30, 2021 was mainly driven by the pre-tax net loss generated during the first quarter of 2021. The tax provision is impacted by the derivative revaluation, which is nondeductible for federal tax purposes, the creation of valuation allowances on non-deductible interest expense carryforwards, and PPP loan forgiveness, in combination with state income tax and foreign tax expense. During the nine months ended September 30, 2021, we reclassified $32.5 million (tax effected) in connection with the retirement of the deferred tax asset related to the embedded conversion feature associated with the Company’s 2027 Notes. The retirement of the deferred tax asset resulted from the reclassification of the embedded conversion feature from a derivative liability to Equity as a reduction to Additional paid-in-capital during the first quarter of 2021. See Note 7 - Debt for additional information about the Company's 2027 Notes. The total amount of unrecognized tax benefits that, if recognized, may impact the effective tax rate was approximately $42.8 million as of September 30, 2021 and $39.5 million as of December 31, 2020. The amount of accrued interest and penalties payable related to unrecognized tax benefits was $3.4 million as of September 30, 2021 and $2.6 million as of December 31, 2020. It is reasonably possible that further adjustments to our unrecognized tax benefits may be made within the next twelve months due to audit settlements and regulatory interpretations of existing tax laws. At this time, an estimate of potential change to the amount of unrecognized tax benefits cannot be made. The provision for income taxes for the three months ended September 30, 2020 was mainly impacted by a reduction in the year to date tax benefit as a result of a lower projected annualized effective tax rate. The provision for income taxes for the three months ended September 30, 2020 was calculated using the estimated annual effective tax rate of 6.2%. The estimated annual effective tax rate is based on a projected tax benefit for the full year. The tax benefit for the nine months ended September 30, 2020 is lower than the 21% statutory federal rate due to the impact of non-deductible asset impairments, non-deductible officers’ compensation and the creation of valuation allowances on non-deductible interest expense carryforwards and capital losses. |
Supplemental equity information
Supplemental equity information | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Supplemental equity information | NOTE 10 — Supplemental equity information Income (loss) per share The following table sets forth the information used to compute basic and diluted income (loss) per share: Three months ended September 30, Nine months ended September 30, In thousands, except per share data 2021 2020 2021 2020 Net income (loss) attributable to Gannett $ 14,687 $ (31,260) $ (112,514) $ (548,305) Interest adjustment to Net income (loss) attributable to Gannett related to assumed conversions of the 2027 Notes, net of taxes 7,598 — — — Net income (loss) attributable to Gannett for diluted earnings per share $ 22,285 $ (31,260) $ (112,514) $ (548,305) Basic weighted average shares outstanding 135,002 132,223 134,610 131,425 Effect of dilutive securities: Restricted stock grants 5,032 — — — 2027 Notes 99,419 — — — Diluted weighted average shares outstanding 239,453 132,223 134,610 131,425 Income (loss) per share attributable to Gannett - basic $ 0.11 $ (0.24) $ (0.84) $ (4.17) Income (loss) per share attributable to Gannett - diluted $ 0.09 $ (0.24) $ (0.84) $ (4.17) The Company excluded the following securities from the computation of diluted income per share because their effect would have been antidilutive: Three months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Warrants 845 1,362 845 1,362 Stock options 6,068 6,068 6,068 6,068 Restricted stock grants (a) 42 7,130 10,442 7,130 2027 Notes (b) — — 99,419 — (a) Includes Restricted stock awards ("RSAs"), Restricted stock units ("RSUs") and Performance stock units ("PSUs"). (b) Represents the total number of shares that would be convertible at September 30, 2021 as stipulated in the 2027 Notes Indenture. The 2027 Notes may be converted at any time by the holders into cash, shares of the Company’s Common Stock or any combination of cash and Common Stock, at the Company’s election. Conversion of all of the 2027 Notes into Common Stock (assuming the maximum increase in the conversion rate as a result of a Make-Whole Fundamental Change but no other adjustments to the conversion rate), would result in the issuance of an aggregate of 294.2 million shares of Common Stock. The Company has excluded approximately 194.8 million shares from the loss per share calculation, representing the difference between the total number of shares that would be convertible at September 30, 2021 and the total number of shares issuable assuming the maximum increase in the conversion rate. Share-based compensation The Company recognized compensation cost for share-based payments of $4.6 million and $13.8 million for the three and nine months ended September 30, 2021, respectively, and $3.8 million and $22.8 million for the three and nine months ended September 30, 2020, respectively. The total compensation cost not yet recognized related to non-vested awards as of September 30, 2021 was $29.6 million, which is expected to be recognized over a weighted-average period of 2.1 years through October 2023. Restricted stock awards During the nine months ended September 30, 2021, a total of 4.1 million RSAs were granted. RSAs generally vest in equal annual installments over a three-year period subject to the participants' continued employment with the Company. The weighted average grant date fair value of RSAs granted during the nine months ended September 30, 2021 was $5.29. Rights Agreement On April 6, 2020, the Company's board of directors (the "Board") adopted a stockholder rights plan in the form of a Section 382 Rights Agreement ("Rights Agreement") to preserve and protect the Company's income tax net operating loss carryforwards ("NOLs") and other tax assets. The Rights Agreement was approved by the Company's stockholders on June 7, 2021 at the 2021 annual meeting of stockholders. As of December 31, 2020, the Company had approximately $543.5 million of NOLs available which could be used in certain circumstances to offset future federal taxable income. Under the Rights Agreement, the Board declared a 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 stockholders that beneficially own in excess of 4.99% of the Common Stock are "grandfathered in" at their current ownership level and the rights then become exercisable if any of those stockholders acquire an additional 0.5% or more of Common Stock of the Company. If the rights become exercisable, all holders of rights, other than the person or group triggering the rights, will be entitled to purchase Gannett Common Stock at a 50% discount or Gannett may exchange each right held by such holders for 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 has the discretion to exempt any person or group from the provisions of the Rights Agreement. The Rights Agreement will continue in effect until April 5, 2023. The Board has the ability to terminate the plan if it determines that doing so would be in the best interest of the Company’s stockholders. The rights may also expire at an earlier date if certain events occur, as described more fully in the Rights Agreement filed by the Company with the Securities and Exchange Commission. Preferred stock The Company has authorized 300,000 shares of preferred stock, par value $0.01 per share, issuable in one or more series designated by the Board, of which 150,000 shares have been designated as Series A Junior Participating Preferred Stock, none of which are outstanding. There were no issuances of preferred stock during the nine months ended September 30, 2021. Accumulated other comprehensive income (loss) The following tables summarize the components of, and the changes in, Accumulated other comprehensive income (loss), net of tax for the nine months ended September 30, 2021 and 2020: Nine months ended September 30, 2021 Nine months ended September 30, 2020 In thousands Pension and Postretirement Plans Foreign Currency Translation Total Pension and Postretirement Plans Foreign Currency Translation Total Beginning balance $ 40,441 $ 9,732 $ 50,173 $ 936 $ 7,266 $ 8,202 Other comprehensive income (loss) before reclassifications 93 (700) (607) (5,675) (8,908) (14,583) Amounts reclassified from accumulated other comprehensive income (loss) (a)(b) 29 — 29 (30) — (30) Net current period other comprehensive income (loss), net of taxes 122 (700) (578) (5,705) (8,908) (14,613) Ending balance $ 40,563 $ 9,032 $ 49,595 $ (4,769) $ (1,642) $ (6,411) (a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 8 — Pensions and other postretirement benefit plans. (b) Amounts reclassified from accumulated other comprehensive loss are recorded net of tax impacts of $11 thousand and $6 thousand for the nine months ended September 30, 2021 and 2020, respectively. |
Fair value measurement
Fair value measurement | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair value measurement | NOTE 11 — Fair value measurement In accordance with ASC 820, "Fair Value Measurement," fair value measurements are required to be disclosed using a three-tiered fair value hierarchy which distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Level 1 refers to fair values determined based on quoted prices in active markets for identical assets or liabilities, Level 2 refers to fair values estimated using significant other observable inputs and Level 3 includes fair values estimated using significant unobservable inputs. As of September 30, 2021 and December 31, 2020, assets and liabilities recorded at fair value and measured on a recurring basis primarily consist of pension plan assets. As permitted by U.S. GAAP, we use net asset values ("NAV") as a practical expedient to determine the fair value of certain investments. These investments measured at NAV have not been classified in the fair value hierarchy. The 5-Year Term Loan was recorded at carrying value, which approximates fair value in the condensed consolidated balance sheets and was classified as Level 2. Refer to additional discussion regarding fair value of the 2027 Notes in Note 7 — Debt. Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Assets held for sale (Level 3) are measured on a nonrecurring basis and are evaluated using executed purchase agreements, letters of intent or third-party valuation analyses when certain circumstances arise. Assets held for sale totaled $21.7 million as of September 30, 2021 and $14.7 million as of December 31, 2020. The Company performs its annual goodwill and indefinite-lived intangible impairment assessment during the second quarter of the year. Any resulting asset impairment would require that the asset be recorded at its fair value. The resulting fair value measurements of the assets are considered to be Level 3 measurements. Refer to Note 5 — Goodwill and intangible assets for additional discussion regarding the annual impairment assessment. |
Commitments, contingencies and
Commitments, contingencies and other matters | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, contingencies and other matters | NOTE 12 — Commitments, contingencies and other matters Legal Proceedings The Company is and may become involved from time to time in legal proceedings in the ordinary course of its business, including but not limited to matters such as libel, invasion of privacy, intellectual property infringement, wrongful termination actions, complaints alleging employment discrimination, and regulatory investigations and inquiries. In addition, the Company is involved from time to time in governmental and administrative proceedings concerning employment, labor, environmental, and other claims. Insurance coverage mitigates potential loss for certain of these matters. Historically, such claims and proceedings have not had a material adverse effect on the Company’s consolidated results of operations or financial position. We are also defendants in judicial and administrative proceedings involving matters incidental to our business. Although the Company is unable to predict with certainty the eventual outcome of any litigation, regulatory investigation or inquiry, in the opinion of management, the Company does not expect its current and any threatened legal proceedings to have a material adverse effect on the Company’s business, financial position or consolidated results of operations. Given the inherent unpredictability of these types of proceedings, however, it is possible that future adverse outcomes could have a material effect on the Company’s financial results. Other Redeemable noncontrolling interests |
Segment reporting
Segment reporting | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment reporting | NOTE 13 — Segment reporting We define our reportable segments based on the way the Chief Operating Decision Maker ("CODM"), which is our Chief Executive Officer, manages the operations for purposes of allocating resources and assessing performance. Our reportable segments include the following: • Publishing is comprised of our portfolio of local, regional, national, and international newspaper publishers. The results of this segment include Advertising and marketing services revenues from local, classified, and national advertising across multiple platforms, including print, online, mobile, and tablet as well as niche publications, Circulation revenues from home delivery, digital distribution and single copy sales of our publications, and Other revenues, mainly from commercial printing, distribution arrangements, revenues from our events business, digital content syndication and affiliate revenues, and third-party newsprint sales. The Publishing reportable segment is an aggregation of two operating segments: Domestic Publishing and U.K. Publishing. • Digital Marketing Solutions is comprised of our digital marketing solutions subsidiary, ReachLocal. The results of this segment include Advertising and marketing services revenues through multiple services, including search advertising, display advertising, search optimization, social media, website development, web presence products, customer relationship management, and software-as-a-service solutions. In addition to the above operating segments, we have a Corporate and other category that includes activities not directly attributable to a specific segment. This category primarily consists of broad corporate functions, including legal, human resources, accounting, finance and marketing as well as other general business costs. In the ordinary course of business, our reportable segments enter into transactions with one another. While intersegment transactions are treated like third-party transactions to determine segment performance, the revenues and expenses recognized by the segment that is the counterparty to the transaction are eliminated in consolidation and do not affect consolidated results. The CODM uses Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett to evaluate the performance of the segments and allocate resources. Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett are non-GAAP financial performance measures we believe offer a useful view of the overall operation of our businesses and may be different than similarly-titled measures used by other companies. We define Adjusted EBITDA as Net income (loss) attributable to Gannett before (1) Income tax expense (benefit), (2) Interest expense, (3) Gains or losses on the early extinguishment of debt, (4) Non-operating pension income (expense), (5) Loss on convertible notes derivative, (6) Depreciation and amortization, (7) Integration and reorganization costs, (8) Other operating expenses, including third-party debt expenses and acquisition costs, (9) Asset impairments, (10) Goodwill and intangible impairments, (11) Gains or losses on the sale or disposal of assets, (12) Share-based compensation, and (13) certain other non-recurring charges, including gains or losses on the sale of investments. We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Operating revenues. We define Adjusted Net income (loss) attributable to Gannett before (1) Gains or losses on the early extinguishment of debt, (2) Loss on convertible notes derivative, (3) Integration and reorganization costs, (4) Other operating expenses, including third-party debt expenses and acquisition costs, (5) Asset impairments, (6) Goodwill and intangibles impairments, (7) Gains or losses on the sale or disposal of assets, (8) Gains or losses on the sale of investments, and (9) the tax impact of the above items. Management considers Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net income (loss) attributable to Gannett to be the appropriate metrics to evaluate and compare the ongoing operating performance of our segments on a consistent basis across reporting periods as it eliminates the effect of items which we do not believe are indicative of each segment's core operating performance. The following tables present our segment information: Three months ended September 30, 2021 In thousands Publishing Digital Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 294,742 $ 116,771 $ 507 $ — $ 412,020 Advertising and marketing services - intersegment sales 34,042 — — (34,042) — Circulation 306,698 — 4 — 306,702 Other 80,325 — 1,138 — 81,463 Total operating revenues $ 715,807 $ 116,771 $ 1,649 $ (34,042) $ 800,185 Adjusted EBITDA (non-GAAP basis) $ 101,001 $ 15,024 $ (13,958) $ — $ 102,067 Three months ended September 30, 2020 In thousands Publishing Digital Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 303,646 $ 100,807 $ 774 $ — $ 405,227 Advertising and marketing services - intersegment sales 25,862 — — (25,862) — Circulation 336,152 — 6 — 336,158 Other 66,566 4,636 1,952 — 73,154 Total operating revenues $ 732,226 $ 105,443 $ 2,732 $ (25,862) $ 814,539 Adjusted EBITDA (non-GAAP basis) $ 108,752 $ 4,177 $ (24,949) $ — $ 87,980 Nine months ended September 30, 2021 In thousands Publishing Digital Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 890,665 $ 328,184 $ 1,638 $ — $ 1,220,487 Advertising and marketing services - intersegment sales 93,910 — — (93,910) — Circulation 942,392 — 6 — 942,398 Other 212,970 905 4,784 — 218,659 Total operating revenues $ 2,139,937 $ 329,089 $ 6,428 $ (93,910) $ 2,381,544 Adjusted EBITDA (non-GAAP basis) $ 317,398 $ 36,725 $ (35,822) $ — $ 318,301 Nine months ended September 30, 2020 In thousands Publishing Digital Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 939,923 $ 306,899 $ 2,334 $ — $ 1,249,156 Advertising and marketing services - intersegment sales 85,472 — — (85,472) — Circulation 1,053,518 — 10 — 1,053,528 Other 207,355 14,388 5,796 — 227,539 Total operating revenues $ 2,286,268 $ 321,287 $ 8,140 $ (85,472) $ 2,530,223 Adjusted EBITDA (non-GAAP basis) $ 311,767 $ 14,847 $ (61,548) $ — $ 265,066 The table below shows the reconciliation of Net income (loss) attributable to Gannett to Adjusted EBITDA and Net income (loss) attributable to Gannett margin to Adjusted EBITDA margin: Three months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Net income (loss) attributable to Gannett $ 14,687 $ (31,260) $ (112,514) $ (548,305) Provision (benefit) for income taxes 2,984 3,098 11,567 (22,200) Interest expense 34,603 58,063 109,370 173,890 Loss on early extinguishment of debt 3,761 476 25,996 1,650 Non-operating pension income (23,860) (18,334) (71,644) (54,433) Loss on convertible notes derivative — — 126,600 — Depreciation and amortization 48,107 61,355 154,452 205,706 Integration and reorganization costs 13,619 13,417 35,467 73,978 Other operating expenses 4 1,913 11,354 10,261 Asset impairments 2,301 1,585 3,134 8,444 Goodwill and intangible impairments — — — 393,446 (Gain) loss on sale or disposal of assets, net (833) 795 9,206 1,540 Share-based compensation expense 4,602 3,844 13,804 22,812 Other items 2,092 (6,972) 1,509 (1,723) Adjusted EBITDA (non-GAAP basis) $ 102,067 $ 87,980 $ 318,301 $ 265,066 Net income (loss) attributable to Gannett margin 1.8 % (3.8) % (4.7) % (21.7) % Adjusted EBITDA margin (non-GAAP basis) 12.8 % 10.8 % 13.4 % 10.5 % The table below shows the reconciliation of Net income (loss) attributable to Gannett to Adjusted Net income (loss) attributable to Gannett: Three months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Net income (loss) attributable to Gannett $ 14,687 $ (31,260) $ (112,514) $ (548,305) Loss on early extinguishment of debt 3,761 476 25,996 1,650 Loss on convertible notes derivative — — 126,600 — Integration and reorganization costs 13,619 13,417 35,467 73,978 Other operating expenses 4 1,913 11,354 10,261 Asset impairments 2,301 1,585 3,134 8,444 Goodwill and intangible impairments — — — 393,446 (Gain) loss on sale or disposal of assets, net (833) 795 9,206 1,540 Gain on sale of investments — (7,800) — (7,995) Subtotal 33,539 (20,874) 99,243 (66,981) Tax impact of above items (7,033) (25,449) (28,042) (61,364) Adjusted Net income (loss) attributable to $ 26,506 $ (46,323) $ 71,201 $ (128,345) |
Other supplemental information
Other supplemental information | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other supplemental information | NOTE 14 — Other supplemental information Cash and cash equivalents, including restricted cash Cash equivalents represent highly liquid certificates of deposit which have original maturities of three months or less. Restricted cash 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: September 30, In thousands 2021 2020 Cash and cash equivalents $ 141,302 $ 188,960 Restricted cash included in other current assets 4,845 10,796 Restricted cash included in investments and other assets 21,267 24,177 Total cash, cash equivalents and restricted cash $ 167,414 $ 223,933 Supplemental cash flow information The following table presents supplemental cash flow information, including non-cash investing and financing activities: Nine months ended September 30, In thousands 2021 2020 Net cash refund for taxes $ (9,031) $ (4,510) Cash paid for interest 80,280 176,402 Non-cash investing and financing activities: Accrued capital expenditures $ 2,836 $ 758 Accounts payable and accrued liabilities A breakout of Accounts payable and accrued liabilities is presented below: In thousands September 30, 2021 December 31, 2020 Accounts payable $ 134,805 $ 131,797 Compensation 108,444 115,061 Taxes (primarily property and sales taxes) 29,104 30,834 Benefits 23,031 22,821 Interest 10,012 3,676 Other 51,928 74,057 Accounts payable and accrued liabilities $ 357,324 $ 378,246 |
Subsequent events
Subsequent events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent events | NOTE 15 — Subsequent events Debt Refinancing On October 15, 2021, Gannett Holdings, a wholly-owned subsidiary of the Company, entered into a five-year senior secured term loan facility in an aggregate principal amount of $516 million (the "New Senior Secured Term Loan"). Also, on October 15, 2021, Gannett Holdings completed a private offering of $400 million aggregate principal amount of 6.00% first lien notes due November 1, 2026 (the "2026 Senior Notes"). The proceeds of the New Senior Secured Term Loan, together with the net proceeds from the 2026 Senior Notes were applied towards the full repayment of the 5-Year Term Loan. The 2026 Senior Notes were issued pursuant to an Indenture, dated October 15, 2021 (the "2026 Senior Notes Indenture"), among Gannett Holdings, the Company, the guarantors party thereto, U.S. Bank National Association, as trustee, U.S. Bank National Association, as collateral agent, and U.S. Bank National Association, as registrar, paying agent and authenticating agent. Interest on the 2026 Senior Notes is payable semi-annually. Loans under the New Senior Secured Term Loan bear interest at a per annum rate equal to LIBOR (which shall not be less than 0.50% per annum) plus a margin of 5.00% or an alternate base rate plus a margin equal to 4.00% per annum (which shall not be less than 1.50% per annum). The New Senior Secured Term Loan contains usual and customary covenants for credit facilities of this type that restrict, among other things, our ability to incur debt, grant liens, sell assets, and make investments and pay dividends, in each case with customary exceptions, including an exception that permits dividends and repurchases of outstanding junior debt or equity in (i) an amount of up to $25 million per fiscal quarter if the ratio of debt secured on an equal basis with the New Senior Secured Term Loan to EBITDA (as defined in the New Senior Secured Term Loan) of the Company and its restricted subsidiaries (the "First Lien Net Leverage Ratio") for such fiscal quarter is equal to or less than 2.00 to 1.00, (ii) an amount of up to $50 million per fiscal quarter if the First Lien Net Leverage Ratio for such fiscal quarter is equal to or less than 1.50 to 1.00 and (iii) an unlimited amount if First Lien Net Leverage Ratio for such fiscal quarter is equal to or less than 1.00 to 1.00. All obligations under the New Senior Secured Term Loan are secured by all or substantially all of the assets of the Company and the wholly-owned domestic subsidiaries of the Company (the "Guarantors"). The obligations of Gannett Holdings under the New Senior Secured Term Loan are guaranteed on a senior secured basis by the Company and the Guarantors. As of the closing of these transactions on October 15, 2021, total debt outstanding was $1.416 billion, which included the (i) $516 million New Senior Secured Term Loan, (ii) $400 million of 2026 Senior Notes, (iii) $497.1 million of 2027 Notes and (iv) $3.3 million of 2024 Notes. |
Description of Business and b_2
Description of Business and basis of presentation (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
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, 2020. |
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 materially from those estimates. Significant estimates inherent in the preparation of the condensed consolidated financial statements include pension and postretirement benefit obligation assumptions, income taxes, goodwill and intangible asset impairment analysis, valuation of property, plant and equipment and intangible assets and the mark to market of the conversion feature associated with the convertible debt. |
Recent accounting pronouncements adopted and Recent accounting pronouncements not yet adopted | Recent accounting pronouncements adopted Simplifying the Accounting for Income Taxes In December 2019, the Financial Accounting Standards Board (the "FASB") issued new guidance that simplifies the accounting for income taxes. The guidance amends the rules for recognizing deferred taxes for investments, performing intraperiod tax allocations and calculating income taxes in interim periods. It also reduces complexity in certain areas, including accounting for transactions that result in a step-up in the tax basis of goodwill and allocating taxes to members of a consolidated group. This guidance is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. A dopting this guidance allowed the Company to record a tax benefit for the first quarter of 2021 because year-to-date losses on interim periods are no longer limited to losses annually forecasted, but did not have a material impact on the Company's condensed consolidated financial statements in subsequent quarters. Recent accounting pronouncements not yet adopted Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | The following table presents our revenues disaggregated by source: Three months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Print advertising $ 190,044 $ 208,047 $ 584,165 $ 664,047 Digital advertising and marketing services 221,976 197,180 636,322 585,109 Total advertising and marketing services 412,020 405,227 1,220,487 1,249,156 Circulation 306,702 336,158 942,398 1,053,528 Other 81,463 73,154 218,659 227,539 Total revenues $ 800,185 $ 814,539 $ 2,381,544 $ 2,530,223 |
Schedule of deferred revenue | The following table presents changes in the deferred revenues balance by type of revenues: Nine months ended September 30, 2021 Nine months ended September 30, 2020 In thousands Advertising, Marketing Services, and Other Circulation Total Advertising, Marketing Services, and Other Circulation Total Beginning balance $ 51,686 $ 134,321 $ 186,007 $ 67,543 $ 151,280 $ 218,823 Cash receipts 226,214 738,366 964,580 215,050 878,856 1,093,906 Revenue recognized (206,203) (748,125) (954,328) (221,052) (884,080) (1,105,132) Ending balance $ 71,697 $ 124,562 $ 196,259 $ 61,541 $ 146,056 $ 207,597 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Schedule of lease cost | The components of lease expense are as follows: Three months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Operating lease cost (a) $ 19,977 $ 20,924 $ 60,626 $ 62,429 Short-term lease cost (b) 133 828 698 5,315 Variable lease cost 2,963 2,897 8,685 9,713 Net lease cost $ 23,073 $ 24,649 $ 70,009 $ 77,457 (a) Includes sublease income of $1.7 million and $0.9 million for the three months ended September 30, 2021 and 2020, respectively, and $4.7 million and $2.9 million for the nine months ended September 30, 2021 and 2020, respectively. (b) Excluding expenses relating to leases with a lease term of 12 months or less. Supplemental information related to leases is as follows: Nine months ended September 30, In thousands, except lease term and discount rate 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 59,989 $ 61,508 Right-of-use assets obtained in exchange for operating lease obligations 31,014 25,562 Gain on sale and leaseback transactions, net (1,568) — As of September 30, 2021 2020 Weighted-average remaining lease term (in years) 7.3 7.7 Weighted-average discount rate 12.81 % 12.66 % |
Summary of operating lease liability, maturity | Future minimum lease payments under non-cancellable leases are as follows: In thousands Year ended December 31, (a) 2021 (excluding the nine months ended September 30, 2021) $ 18,625 2022 81,364 2023 68,607 2024 60,380 2025 51,315 Thereafter 213,647 Total future minimum lease payments 493,938 Less: Imputed interest (184,245) Total $ 309,693 (a) Operating lease payments exclude $0.9 million of legally binding minimum lease payments for leases signed but not yet commenced. |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Schedule of allowance for doubtful accounts | The following table presents changes in the allowance for doubtful accounts for the nine months ended September 30, 2021 and 2020: Nine months ended September 30, In thousands 2021 2020 Beginning balance $ 20,843 $ 19,923 Current period provision 3,478 23,075 Write-offs charged against the allowance (10,998) (21,139) Recoveries of amounts previously written-off 3,076 2,230 Disposition — (351) Foreign currency 12 11 Ending balance $ 16,411 $ 23,749 |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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: September 30, 2021 December 31, 2020 In thousands Gross carrying amount Accumulated Net carrying Gross carrying amount Accumulated Net carrying Finite-lived intangible assets: Advertiser relationships $ 456,141 $ 144,326 $ 311,815 $ 460,331 $ 112,468 $ 347,863 Other customer relationships 102,685 32,439 70,246 102,925 23,682 79,243 Subscriber relationships 254,972 92,953 162,019 255,702 71,271 184,431 Other intangible assets 68,590 41,021 27,569 68,687 26,982 41,705 Sub-total $ 882,388 $ 310,739 $ 571,649 $ 887,645 $ 234,403 $ 653,242 Indefinite-lived intangible assets: Mastheads 169,942 171,408 Total intangible assets $ 741,591 $ 824,650 Goodwill $ 533,797 $ 534,088 |
Integration and reorganizatio_2
Integration and reorganization costs and asset impairments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring and related costs | We recorded severance-related expenses by segment as follows: Three months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Publishing $ 1,941 $ 3,983 $ 10,125 $ 35,401 Digital Marketing Solutions 402 1,196 321 5,333 Corporate and other 317 2,103 440 14,069 Total $ 2,660 $ 7,282 $ 10,886 $ 54,803 A rollforward of the accrued severance and related costs included in Accounts payable and accrued expenses on the condensed consolidated balance sheets for the nine months ended September 30, 2021 is as follows: In thousands Severance and Beginning balance $ 30,943 Restructuring provision included in integration and reorganization costs 10,886 Cash payments (31,869) Ending balance $ 9,960 |
Schedule of consolidation charges and accelerated depreciation | We recorded facility consolidation charges and other restructuring-related costs by segment as follows: Three months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Publishing $ 1,571 $ 1,137 $ 516 $ 3,648 Digital Marketing Solutions 529 41 980 254 Corporate and other 8,859 4,957 23,085 15,273 Total $ 10,959 $ 6,135 $ 24,581 $ 19,175 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Fair Value Assumptions | The assumptions used to determine the fair value as of February 26, 2021 and December 31, 2020 were: February 26, 2021 December 31, 2020 Annual volatility 70.0 % 70.0 % Discount rate 12.2 % 9.3 % Stock price $ 4.95 $ 3.36 |
Schedule of Debt | In thousands September 30, 2021 December 31, 2020 Net carrying value of liability component $ 396.6 $ 388.4 Unamortized discount of liability component $ 100.5 $ 108.7 |
Pensions and other postretire_2
Pensions and other postretirement benefit plans (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
Summary of benefit costs | Retirement plan costs include the following components: Pension Benefits Postretirement Benefits Three months ended September 30, Three months ended September 30, In thousands 2021 2020 2021 2020 Operating expenses: Service cost - benefits earned during the period $ 490 $ 693 $ 23 $ 27 Non-operating expenses: Interest cost on benefit obligation 17,042 20,670 428 580 Expected return on plan assets (41,355) (39,573) — — Amortization of actuarial loss (gain) 38 (26) (13) 15 Total non-operating (benefit) expenses $ (24,275) $ (18,929) $ 415 $ 595 Total expense (benefit) for retirement plans $ (23,785) $ (18,236) $ 438 $ 622 Pension Benefits Postretirement Benefits Nine months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Operating expenses: Service cost - benefits earned during the period $ 1,470 $ 2,078 $ 67 $ 79 Non-operating expenses: Interest cost on benefit obligation 51,179 61,803 1,330 1,740 Expected return on plan assets (124,193) (117,940) — — Amortization of actuarial loss (gain) 115 (80) (75) 44 Total non-operating (benefit) expenses $ (72,899) $ (56,217) $ 1,255 $ 1,784 Total expense (benefit) for retirement plans $ (71,429) $ (54,139) $ 1,322 $ 1,863 |
Income taxes (Tables)
Income taxes (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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 September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Income (loss) before income taxes $ 17,529 $ (28,350) $ (101,880) $ (572,085) Provision (benefit) for income taxes 2,984 3,098 11,567 (22,200) Effective tax rate 17.0 % *** (11.4) % 3.9 % *** Indicates an absolute value percentage change greater than 100. |
Supplemental equity informati_2
Supplemental equity information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Schedule of earnings (loss) per share (basic and diluted) | The following table sets forth the information used to compute basic and diluted income (loss) per share: Three months ended September 30, Nine months ended September 30, In thousands, except per share data 2021 2020 2021 2020 Net income (loss) attributable to Gannett $ 14,687 $ (31,260) $ (112,514) $ (548,305) Interest adjustment to Net income (loss) attributable to Gannett related to assumed conversions of the 2027 Notes, net of taxes 7,598 — — — Net income (loss) attributable to Gannett for diluted earnings per share $ 22,285 $ (31,260) $ (112,514) $ (548,305) Basic weighted average shares outstanding 135,002 132,223 134,610 131,425 Effect of dilutive securities: Restricted stock grants 5,032 — — — 2027 Notes 99,419 — — — Diluted weighted average shares outstanding 239,453 132,223 134,610 131,425 Income (loss) per share attributable to Gannett - basic $ 0.11 $ (0.24) $ (0.84) $ (4.17) Income (loss) per share attributable to Gannett - diluted $ 0.09 $ (0.24) $ (0.84) $ (4.17) |
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 September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Warrants 845 1,362 845 1,362 Stock options 6,068 6,068 6,068 6,068 Restricted stock grants (a) 42 7,130 10,442 7,130 2027 Notes (b) — — 99,419 — (a) Includes Restricted stock awards ("RSAs"), Restricted stock units ("RSUs") and Performance stock units ("PSUs"). (b) Represents the total number of shares that would be convertible at September 30, 2021 as stipulated in the 2027 Notes Indenture. |
Schedule of accumulated other comprehensive income (loss) | The following tables summarize the components of, and the changes in, Accumulated other comprehensive income (loss), net of tax for the nine months ended September 30, 2021 and 2020: Nine months ended September 30, 2021 Nine months ended September 30, 2020 In thousands Pension and Postretirement Plans Foreign Currency Translation Total Pension and Postretirement Plans Foreign Currency Translation Total Beginning balance $ 40,441 $ 9,732 $ 50,173 $ 936 $ 7,266 $ 8,202 Other comprehensive income (loss) before reclassifications 93 (700) (607) (5,675) (8,908) (14,583) Amounts reclassified from accumulated other comprehensive income (loss) (a)(b) 29 — 29 (30) — (30) Net current period other comprehensive income (loss), net of taxes 122 (700) (578) (5,705) (8,908) (14,613) Ending balance $ 40,563 $ 9,032 $ 49,595 $ (4,769) $ (1,642) $ (6,411) (a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 8 — Pensions and other postretirement benefit plans. (b) Amounts reclassified from accumulated other comprehensive loss are recorded net of tax impacts of $11 thousand and $6 thousand for the nine months ended September 30, 2021 and 2020, respectively. |
Segment reporting (Tables)
Segment reporting (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | The following tables present our segment information: Three months ended September 30, 2021 In thousands Publishing Digital Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 294,742 $ 116,771 $ 507 $ — $ 412,020 Advertising and marketing services - intersegment sales 34,042 — — (34,042) — Circulation 306,698 — 4 — 306,702 Other 80,325 — 1,138 — 81,463 Total operating revenues $ 715,807 $ 116,771 $ 1,649 $ (34,042) $ 800,185 Adjusted EBITDA (non-GAAP basis) $ 101,001 $ 15,024 $ (13,958) $ — $ 102,067 Three months ended September 30, 2020 In thousands Publishing Digital Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 303,646 $ 100,807 $ 774 $ — $ 405,227 Advertising and marketing services - intersegment sales 25,862 — — (25,862) — Circulation 336,152 — 6 — 336,158 Other 66,566 4,636 1,952 — 73,154 Total operating revenues $ 732,226 $ 105,443 $ 2,732 $ (25,862) $ 814,539 Adjusted EBITDA (non-GAAP basis) $ 108,752 $ 4,177 $ (24,949) $ — $ 87,980 Nine months ended September 30, 2021 In thousands Publishing Digital Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 890,665 $ 328,184 $ 1,638 $ — $ 1,220,487 Advertising and marketing services - intersegment sales 93,910 — — (93,910) — Circulation 942,392 — 6 — 942,398 Other 212,970 905 4,784 — 218,659 Total operating revenues $ 2,139,937 $ 329,089 $ 6,428 $ (93,910) $ 2,381,544 Adjusted EBITDA (non-GAAP basis) $ 317,398 $ 36,725 $ (35,822) $ — $ 318,301 Nine months ended September 30, 2020 In thousands Publishing Digital Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 939,923 $ 306,899 $ 2,334 $ — $ 1,249,156 Advertising and marketing services - intersegment sales 85,472 — — (85,472) — Circulation 1,053,518 — 10 — 1,053,528 Other 207,355 14,388 5,796 — 227,539 Total operating revenues $ 2,286,268 $ 321,287 $ 8,140 $ (85,472) $ 2,530,223 Adjusted EBITDA (non-GAAP basis) $ 311,767 $ 14,847 $ (61,548) $ — $ 265,066 The table below shows the reconciliation of Net income (loss) attributable to Gannett to Adjusted EBITDA and Net income (loss) attributable to Gannett margin to Adjusted EBITDA margin: Three months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Net income (loss) attributable to Gannett $ 14,687 $ (31,260) $ (112,514) $ (548,305) Provision (benefit) for income taxes 2,984 3,098 11,567 (22,200) Interest expense 34,603 58,063 109,370 173,890 Loss on early extinguishment of debt 3,761 476 25,996 1,650 Non-operating pension income (23,860) (18,334) (71,644) (54,433) Loss on convertible notes derivative — — 126,600 — Depreciation and amortization 48,107 61,355 154,452 205,706 Integration and reorganization costs 13,619 13,417 35,467 73,978 Other operating expenses 4 1,913 11,354 10,261 Asset impairments 2,301 1,585 3,134 8,444 Goodwill and intangible impairments — — — 393,446 (Gain) loss on sale or disposal of assets, net (833) 795 9,206 1,540 Share-based compensation expense 4,602 3,844 13,804 22,812 Other items 2,092 (6,972) 1,509 (1,723) Adjusted EBITDA (non-GAAP basis) $ 102,067 $ 87,980 $ 318,301 $ 265,066 Net income (loss) attributable to Gannett margin 1.8 % (3.8) % (4.7) % (21.7) % Adjusted EBITDA margin (non-GAAP basis) 12.8 % 10.8 % 13.4 % 10.5 % The table below shows the reconciliation of Net income (loss) attributable to Gannett to Adjusted Net income (loss) attributable to Gannett: Three months ended September 30, Nine months ended September 30, In thousands 2021 2020 2021 2020 Net income (loss) attributable to Gannett $ 14,687 $ (31,260) $ (112,514) $ (548,305) Loss on early extinguishment of debt 3,761 476 25,996 1,650 Loss on convertible notes derivative — — 126,600 — Integration and reorganization costs 13,619 13,417 35,467 73,978 Other operating expenses 4 1,913 11,354 10,261 Asset impairments 2,301 1,585 3,134 8,444 Goodwill and intangible impairments — — — 393,446 (Gain) loss on sale or disposal of assets, net (833) 795 9,206 1,540 Gain on sale of investments — (7,800) — (7,995) Subtotal 33,539 (20,874) 99,243 (66,981) Tax impact of above items (7,033) (25,449) (28,042) (61,364) Adjusted Net income (loss) attributable to $ 26,506 $ (46,323) $ 71,201 $ (128,345) |
Other supplemental information
Other supplemental information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of cash and cash equivalents | The following table presents a reconciliation of cash, cash equivalents and restricted cash: September 30, In thousands 2021 2020 Cash and cash equivalents $ 141,302 $ 188,960 Restricted cash included in other current assets 4,845 10,796 Restricted cash included in investments and other assets 21,267 24,177 Total cash, cash equivalents and restricted cash $ 167,414 $ 223,933 |
Summary of restrictions on cash and cash equivalents | The following table presents a reconciliation of cash, cash equivalents and restricted cash: September 30, In thousands 2021 2020 Cash and cash equivalents $ 141,302 $ 188,960 Restricted cash included in other current assets 4,845 10,796 Restricted cash included in investments and other assets 21,267 24,177 Total cash, cash equivalents and restricted cash $ 167,414 $ 223,933 |
Schedule of cash flow, supplemental disclosures | The following table presents supplemental cash flow information, including non-cash investing and financing activities: Nine months ended September 30, In thousands 2021 2020 Net cash refund for taxes $ (9,031) $ (4,510) Cash paid for interest 80,280 176,402 Non-cash investing and financing activities: Accrued capital expenditures $ 2,836 $ 758 |
Schedule of accounts payable and accrued liabilities | A breakout of Accounts payable and accrued liabilities is presented below: In thousands September 30, 2021 December 31, 2020 Accounts payable $ 134,805 $ 131,797 Compensation 108,444 115,061 Taxes (primarily property and sales taxes) 29,104 30,834 Benefits 23,031 22,821 Interest 10,012 3,676 Other 51,928 74,057 Accounts payable and accrued liabilities $ 357,324 $ 378,246 |
Description of Business and b_3
Description of Business and basis of presentation - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($)statebrand | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segmentstatebrand | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Significant Accounting Policies | |||||
Number of states in which entity operates (states) | state | 46 | 46 | |||
Number of operating segments (segments) | segment | 2 | ||||
Operating costs | $ 480,289 | $ 492,342 | $ 1,431,259 | $ 1,535,539 | |
Selling, general and administrative expenses | 225,596 | $ 241,652 | 652,184 | $ 767,275 | |
Other long-term liabilities | 141,577 | 141,577 | $ 151,847 | ||
Paycheck Protection Program | |||||
Significant Accounting Policies | |||||
Other long-term liabilities | 1,300 | 1,300 | |||
Paycheck Protection Program | Scenario, Adjustment | |||||
Significant Accounting Policies | |||||
Operating costs | (11,100) | ||||
Selling, general and administrative expenses | (4,000) | ||||
Paycheck Protection Program | Line of Credit | |||||
Significant Accounting Policies | |||||
Proceeds from short term debt | $ 16,400 | ||||
Proceeds from short term debt, forgiven | $ 15,100 | ||||
U.K. | |||||
Significant Accounting Policies | |||||
Number of media brands, more than (brands) | brand | 120 | 120 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue | ||||
Total revenues | $ 800,185 | $ 814,539 | $ 2,381,544 | $ 2,530,223 |
Total advertising and marketing services | ||||
Disaggregation of Revenue | ||||
Total revenues | 412,020 | 405,227 | 1,220,487 | 1,249,156 |
Print advertising | ||||
Disaggregation of Revenue | ||||
Total revenues | 190,044 | 208,047 | 584,165 | 664,047 |
Digital advertising and marketing services | ||||
Disaggregation of Revenue | ||||
Total revenues | 221,976 | 197,180 | 636,322 | 585,109 |
Circulation | ||||
Disaggregation of Revenue | ||||
Total revenues | 306,702 | 336,158 | 942,398 | 1,053,528 |
Other | ||||
Disaggregation of Revenue | ||||
Total revenues | $ 81,463 | $ 73,154 | $ 218,659 | $ 227,539 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
International | Revenue Benchmark | Geographic Concentration Risk | ||||
Revenue, Initial Application Period Cumulative Effect Transition | ||||
Revenue, percentage | 8.00% | 7.00% | 8.00% | 7.00% |
Revenues - Performance Obligati
Revenues - Performance Obligations (Details) - Customer Subscription | Sep. 30, 2021 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Expected timing of satisfaction | 1 month |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Expected timing of satisfaction | 12 months |
Revenues - Deferred Revenue (De
Revenues - Deferred Revenue (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Movement in Deferred Revenue | ||
Beginning balance | $ 186,007 | $ 218,823 |
Cash receipts | 964,580 | 1,093,906 |
Revenue recognized | (954,328) | (1,105,132) |
Ending balance | 196,259 | 207,597 |
Advertising, Marketing Services, and Other | ||
Movement in Deferred Revenue | ||
Beginning balance | 51,686 | 67,543 |
Cash receipts | 226,214 | 215,050 |
Revenue recognized | (206,203) | (221,052) |
Ending balance | 71,697 | 61,541 |
Circulation | ||
Movement in Deferred Revenue | ||
Beginning balance | 134,321 | 151,280 |
Cash receipts | 738,366 | 878,856 |
Revenue recognized | (748,125) | (884,080) |
Ending balance | $ 124,562 | $ 146,056 |
Leases - Narratives (Details)
Leases - Narratives (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Lessee, Lease | ||
Operating lease assets | $ 279,353 | $ 289,504 |
Short-term operating lease liabilities | $ 48,300 | |
Operating Lease, Liability, Current, Statement of Financial Position | Other current liabilities | Other current liabilities |
Long-term operating lease liabilities | $ 261,429 | $ 274,460 |
Minimum | ||
Lessee, Lease | ||
Remaining lease term with option to extend (in years) | 1 year | |
Maximum | ||
Lessee, Lease | ||
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 | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||||
Operating lease cost | $ 19,977 | $ 20,924 | $ 60,626 | $ 62,429 |
Short-term lease cost | 133 | 828 | 698 | 5,315 |
Variable lease costs | 2,963 | 2,897 | 8,685 | 9,713 |
Net lease cost | 23,073 | 24,649 | 70,009 | 77,457 |
Sublease income | $ 1,700 | $ 900 | $ 4,700 | $ 2,900 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Lessee, Operating Lease, Liability, Payment, Due | |
2021 (excluding the nine months ended September 30, 2021) | $ 18,625 |
2022 | 81,364 |
2023 | 68,607 |
2024 | 60,380 |
2025 | 51,315 |
Thereafter | 213,647 |
Total future minimum lease payments | 493,938 |
Less: Imputed interest | (184,245) |
Total | 309,693 |
Lease payments for leases signed but not yet commenced | $ 900 |
Leases - Other Information (Det
Leases - Other Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Supplemental Cash Flow Information | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 59,989 | $ 61,508 |
Right-of-use assets obtained in exchange for operating lease obligations | 31,014 | 25,562 |
Gain on sale and leaseback transactions, net | $ (1,568) | $ 0 |
Weighted-average remaining lease term (in years) | 7 years 3 months 18 days | 7 years 8 months 12 days |
Weighted-average discount rate | 12.81% | 12.66% |
Accounts receivable, net - Narr
Accounts receivable, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Receivables [Abstract] | ||||
Accounts receivable, reserve percentage calculation period | 3 years | |||
Threshold period for reserves | 90 days | |||
Bad debt expense | $ 2,800 | $ 5,700 | $ 3,478 | $ 23,075 |
Accounts receivable, net - Allo
Accounts receivable, net - Allowance for doubtful accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accounts Receivable, Allowance for Credit Loss | ||||
Beginning balance | $ 20,843 | $ 19,923 | ||
Current period provision | $ 2,800 | $ 5,700 | 3,478 | 23,075 |
Write-offs charged against the allowance | (10,998) | (21,139) | ||
Recoveries of amounts previously written-off | 3,076 | 2,230 | ||
Disposition | 0 | (351) | ||
Foreign currency | 12 | 11 | ||
Ending balance | $ 16,411 | $ 23,749 | $ 16,411 | $ 23,749 |
Goodwill and intangible asset_2
Goodwill and intangible assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets | ||
Gross carrying amount | $ 882,388 | $ 887,645 |
Accumulated amortization | 310,739 | 234,403 |
Net carrying amount | 571,649 | 653,242 |
Intangible Assets | ||
Total intangible assets | 741,591 | 824,650 |
Goodwill | 533,797 | 534,088 |
Mastheads | ||
Intangible Assets | ||
Non-amortized intangible assets | 169,942 | 171,408 |
Advertiser relationships | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 456,141 | 460,331 |
Accumulated amortization | 144,326 | 112,468 |
Net carrying amount | 311,815 | 347,863 |
Other customer relationships | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 102,685 | 102,925 |
Accumulated amortization | 32,439 | 23,682 |
Net carrying amount | 70,246 | 79,243 |
Subscriber relationships | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 254,972 | 255,702 |
Accumulated amortization | 92,953 | 71,271 |
Net carrying amount | 162,019 | 184,431 |
Other intangible assets | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 68,590 | 68,687 |
Accumulated amortization | 41,021 | 26,982 |
Net carrying amount | $ 27,569 | $ 41,705 |
Goodwill and other intangible a
Goodwill and other intangible assets - Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2021 | |
Domestic Publishing | ||
Intangible Assets | ||
Goodwill impairment | $ 256.5 | |
Impairment of I intangible assets excluding goodwill | 4 | |
Newspaper Reporting Unit | ||
Intangible Assets | ||
Goodwill impairment | 65.4 | |
Impairment of I intangible assets excluding goodwill | 4 | |
Digital Marketing Solutions | ||
Intangible Assets | ||
Goodwill impairment | 40.5 | |
Advertiser and other customer relationships | ||
Intangible Assets | ||
Impairment of I intangible assets excluding goodwill | $ 23 | |
Minimum | Measurement Input, Long-term Revenue Growth Rate | ||
Intangible Assets | ||
Intangible assets measurement inputs (percent) | (0.50%) | |
Minimum | Measurement Input, Discount Rate | ||
Intangible Assets | ||
Intangible assets measurement inputs (percent) | 11.00% | |
Maximum | Measurement Input, Long-term Revenue Growth Rate | ||
Intangible Assets | ||
Intangible assets measurement inputs (percent) | 3.00% | |
Maximum | Measurement Input, Discount Rate | ||
Intangible Assets | ||
Intangible assets measurement inputs (percent) | 15.00% |
Integration and reorganizatio_3
Integration and reorganization costs and asset impairments - Severance Related Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Restructuring Cost and Reserve | ||||
Severance related expenses | $ 13,619 | $ 13,417 | $ 35,467 | $ 73,978 |
Severance | ||||
Restructuring Cost and Reserve | ||||
Severance related expenses | 2,660 | 7,282 | 10,886 | 54,803 |
Operating Segments | Publishing | Severance | ||||
Restructuring Cost and Reserve | ||||
Severance related expenses | 1,941 | 3,983 | 10,125 | 35,401 |
Operating Segments | Digital Marketing Solutions | Severance | ||||
Restructuring Cost and Reserve | ||||
Severance related expenses | 402 | 1,196 | 321 | 5,333 |
Corporate and other | Severance | ||||
Restructuring Cost and Reserve | ||||
Severance related expenses | $ 317 | $ 2,103 | $ 440 | $ 14,069 |
Integration and reorganizatio_4
Integration and reorganization costs and asset impairments - Restructuring Reserve (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Restructuring Reserve | ||||
Restructuring provision included in integration and reorganization costs | $ 13,619 | $ 13,417 | $ 35,467 | $ 73,978 |
Severance | ||||
Restructuring Reserve | ||||
Beginning balance | 30,943 | |||
Restructuring provision included in integration and reorganization costs | 2,660 | $ 7,282 | 10,886 | $ 54,803 |
Cash payments | (31,869) | |||
Ending balance | $ 9,960 | $ 9,960 |
Integration and reorganizatio_5
Integration and reorganization costs and asset impairments - Facility Consolidation Charges and Accelerated Depreciation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Restructuring Cost and Reserve | ||||
Restructuring provision included in integration and reorganization costs | $ 13,619 | $ 13,417 | $ 35,467 | $ 73,978 |
Facility Closing | ||||
Restructuring Cost and Reserve | ||||
Restructuring provision included in integration and reorganization costs | 10,959 | 6,135 | 24,581 | 19,175 |
Operating Segments | Publishing | Facility Closing | ||||
Restructuring Cost and Reserve | ||||
Restructuring provision included in integration and reorganization costs | 1,571 | 1,137 | 516 | 3,648 |
Operating Segments | Digital Marketing Solutions | Facility Closing | ||||
Restructuring Cost and Reserve | ||||
Restructuring provision included in integration and reorganization costs | 529 | 41 | 980 | 254 |
Corporate and other | Facility Closing | ||||
Restructuring Cost and Reserve | ||||
Restructuring provision included in integration and reorganization costs | $ 8,859 | $ 4,957 | $ 23,085 | $ 15,273 |
Integration and reorganizatio_6
Integration and reorganization costs and asset impairments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Restructuring Cost and Reserve | ||||
Asset impairments | $ 2,301 | $ 1,585 | $ 3,134 | $ 8,444 |
Publishing | ||||
Restructuring Cost and Reserve | ||||
Asset impairments | 2,300 | 900 | 3,100 | 7,700 |
Accelerated depreciation | $ 1,100 | 9,300 | $ 11,400 | 45,000 |
Digital Marketing Solutions | ||||
Restructuring Cost and Reserve | ||||
Asset impairments | $ 700 | $ 700 |
Debt - Senior Secured 5-Year Te
Debt - Senior Secured 5-Year Term Loan (Details) - USD ($) | Feb. 09, 2021 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Line of Credit Facility | |||||||
Long-term debt | $ 741,636,000 | $ 741,636,000 | $ 890,323,000 | ||||
Loss on early extinguishment of debt | $ 3,761,000 | $ 476,000 | 25,996,000 | $ 1,650,000 | |||
Cash paid for interest | 80,280,000 | 176,402,000 | |||||
Repayments under term loans | 1,220,751,000 | 27,619,000 | |||||
Senior Secured Term Loan | |||||||
Line of Credit Facility | |||||||
Loss on early extinguishment of debt | 26,000,000 | ||||||
Senior Secured Term Loan | Maximum | |||||||
Line of Credit Facility | |||||||
Unrestricted cash requirement | $ 100,000,000 | ||||||
Senior Secured Term Loan | Minimum | |||||||
Line of Credit Facility | |||||||
Unrestricted cash requirement | $ 30,000,000 | ||||||
Five Year Term Loan | |||||||
Line of Credit Facility | |||||||
Interest expense | 50,500,000 | ||||||
Cash paid for interest | $ 50,500,000 | ||||||
Five Year Term Loan | Senior Secured Term Loan | |||||||
Line of Credit Facility | |||||||
Debt instrument term (in years) | 5 years | 5 years | 5 years | 5 years | |||
Long-term debt | $ 1,045,000,000 | $ 899,400,000 | $ 899,400,000 | ||||
Deferred financing fees | 0 | 10,900,000 | |||||
Issuance costs | 11,500,000 | 11,500,000 | |||||
Loss on early extinguishment of debt | 3,800,000 | ||||||
Fee amount | 13,000,000 | ||||||
Unamortized discount | $ 20,900,000 | 41,400,000 | $ 41,400,000 | ||||
Annualized amortization rate (percent) | 10.00% | ||||||
Annualized amortization rate EBITDA threshold (percent) | 5.00% | ||||||
Interest rate (as a percent) | 9.50% | ||||||
Interest expense | 19,200,000 | ||||||
Cash paid for interest | 30,300,000 | ||||||
Amortization of deferred financing costs | 900,000 | $ 2,400,000 | |||||
Amortization of original issue cost | 3,400,000 | 8,700,000 | |||||
Repayments under term loans | $ 91,100,000 | 145,600,000 | |||||
Five Year Term Loan | Senior Secured Term Loan | LIBOR | |||||||
Line of Credit Facility | |||||||
Variable rate (percent) | 7.00% | ||||||
Five Year Term Loan | Senior Secured Term Loan | Base Rate | |||||||
Line of Credit Facility | |||||||
Variable rate (percent) | 6.00% | ||||||
Acquisition Term Loan | |||||||
Line of Credit Facility | |||||||
Interest expense | 13,400,000 | ||||||
Acquisition Term Loan | Senior Secured Term Loan | |||||||
Line of Credit Facility | |||||||
Principal outstanding | $ 1,043,000,000 | ||||||
Accrued interest | $ 13,300,000 | ||||||
Stated interest rate (as a percent) | 11.50% | ||||||
Deferred financing fees | $ 1,500,000 | ||||||
Issuance costs | $ 34,700,000 | ||||||
Loss on early extinguishment of debt | $ 17,200,000 | ||||||
Cash paid for interest | 13,400,000 | ||||||
Write off of discount and deferred debt issuance expense | $ 2,200,000 | ||||||
Amortization of deferred financing costs | $ 200,000 | 700,000 | |||||
Amortization of original issue cost | $ 5,600,000 | $ 17,000,000 |
Debt - Senior Secured Convertib
Debt - Senior Secured Convertible Notes due 2027 (Details) | Nov. 17, 2020USD ($)$ / shares | Sep. 30, 2021USD ($)$ / shares | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)$ / shares | Sep. 30, 2020USD ($) | Feb. 26, 2021USD ($) | Feb. 09, 2021USD ($) | Dec. 31, 2020USD ($)$ / shares |
Line of Credit Facility | ||||||||
Long-term debt | $ 741,636,000 | $ 741,636,000 | $ 890,323,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Equity component of the 2027 Notes | $ 283,718,000 | |||||||
Loss from derivative liability of convertible debt | $ 0 | $ 0 | 126,600,000 | $ 0 | ||||
Interest expense | $ 34,603,000 | $ 58,063,000 | 109,370,000 | $ 173,890,000 | ||||
Additional paid-in capital | ||||||||
Line of Credit Facility | ||||||||
Equity component of the 2027 Notes | $ 283,718,000 | |||||||
Measurement Input, Discount Rate | ||||||||
Line of Credit Facility | ||||||||
Debt instrument, measurement input (percent) | 0.122 | 0.093 | ||||||
2027 Notes | Convertible debt | ||||||||
Line of Credit Facility | ||||||||
Long-term debt | $ 497,100,000 | |||||||
Stated interest rate (as a percent) | 6.00% | 6.00% | ||||||
Debt term (in years) | 7 years | |||||||
Conversion price (in usd per share) | $ / shares | $ 5 | |||||||
Percentage of notes initially convertible to common stock | 42.00% | |||||||
Fair value of embedded derivative liability | $ 115,300,000 | $ 316,200,000 | $ 189,600,000 | |||||
Minimum qualified cash required | $ 30,000,000 | $ 30,000,000 | ||||||
Debt fair value | 389,100,000 | |||||||
Loss from derivative liability of convertible debt | 126,600,000 | |||||||
Issuance costs | $ 2,300,000 | |||||||
Interest expense | 7,500,000 | 22,400,000 | ||||||
Amortization of the discount | 2,900,000 | 7,900,000 | ||||||
Amortization of debt issuance costs | $ 0 | $ 200,000 | ||||||
Effective interest rate (as a percent) | 10.50% | 10.50% | ||||||
Debt instrument, share conversion rate (per $1,000) | 20.00% | |||||||
2027 Notes | Convertible debt | Measurement Input, Discount Rate | ||||||||
Line of Credit Facility | ||||||||
Debt instrument, measurement input (percent) | 0.107 | |||||||
2027 Notes | Convertible debt | Period 1 | ||||||||
Line of Credit Facility | ||||||||
Redemption rate | 110.00% | |||||||
Maximum repurchase amount | $ 100,000,000 | |||||||
Total gross leverage ratio | 1.5 | |||||||
2027 Notes | Convertible debt | Period 2 | ||||||||
Line of Credit Facility | ||||||||
Redemption rate | 130.00% | |||||||
Maximum repurchase amount | $ 99,400,000 | |||||||
Redemption term | 4 years | |||||||
Five Year Term Loan | Senior Secured Term Loan | ||||||||
Line of Credit Facility | ||||||||
Long-term debt | $ 899,400,000 | $ 899,400,000 | $ 1,045,000,000 | |||||
Debt term (in years) | 5 years | |||||||
Issuance costs | 11,500,000 | 11,500,000 | ||||||
Amortization of debt issuance costs | $ 900,000 | $ 2,400,000 |
Debt - Fair Value Assumptions (
Debt - Fair Value Assumptions (Details) | Feb. 26, 2021$ / shares | Dec. 31, 2020$ / shares |
Line of Credit Facility | ||
Stock price (usd per share) | $ 4.95 | $ 3.36 |
Measurement Input, Annual Volatility | ||
Line of Credit Facility | ||
Debt instrument, measurement input (percent) | 0.700 | 0.700 |
Measurement Input, Discount Rate | ||
Line of Credit Facility | ||
Debt instrument, measurement input (percent) | 0.122 | 0.093 |
Debt - Liability Component (Det
Debt - Liability Component (Details) - 2027 Notes - Convertible debt - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Line of Credit Facility | ||
Net carrying value of liability component | $ 396.6 | $ 388.4 |
Unamortized discount of liability component | $ 100.5 | $ 108.7 |
Debt - Senior Convertible Notes
Debt - Senior Convertible Notes due 2024 (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Line of Credit Facility | ||
Long-term debt | $ 741,636 | $ 890,323 |
Convertible senior notes | Convertible debt | ||
Line of Credit Facility | ||
Long-term debt | $ 3,300 | |
Stated interest rate (as a percent) | 4.75% | |
Effective interest rate (as a percent) | 6.05% |
Pensions and other postretire_3
Pensions and other postretirement benefit plans - Retirement Plan Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Company's pension costs | ||||
Total non-operating (benefit) expenses | $ (23,860) | $ (18,334) | $ (71,644) | $ (54,433) |
Pension Benefits | ||||
Company's pension costs | ||||
Service cost - benefits earned during the period | 490 | 693 | 1,470 | 2,078 |
Interest cost on benefit obligation | 17,042 | 20,670 | 51,179 | 61,803 |
Expected return on plan assets | (41,355) | (39,573) | (124,193) | (117,940) |
Amortization of actuarial loss (gain) | 38 | (26) | 115 | (80) |
Total non-operating (benefit) expenses | (24,275) | (18,929) | (72,899) | (56,217) |
Total expense (benefit) for retirement plans | (23,785) | (18,236) | (71,429) | (54,139) |
Postretirement Benefits | ||||
Company's pension costs | ||||
Service cost - benefits earned during the period | 23 | 27 | 67 | 79 |
Interest cost on benefit obligation | 428 | 580 | 1,330 | 1,740 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of actuarial loss (gain) | (13) | 15 | (75) | 44 |
Total non-operating (benefit) expenses | 415 | 595 | 1,255 | 1,784 |
Total expense (benefit) for retirement plans | $ 438 | $ 622 | $ 1,322 | $ 1,863 |
Pensions and other postretire_4
Pensions and other postretirement benefit plans - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | 21 Months Ended |
Sep. 30, 2021 | Sep. 30, 2022 | |
Defined Benefit Plan Disclosure | ||
Employee retirement contributions deferred | $ 11 | |
Pension Plan | ||
Defined Benefit Plan Disclosure | ||
Contribution to the defined benefit plans | 40.2 | |
Pension Plan | U.S. | Forecasted | Subsequent Event | ||
Defined Benefit Plan Disclosure | ||
Deferred contributions by employer in response to COVID-19 | $ 5 | |
Other Postretirement Benefits Plan | ||
Defined Benefit Plan Disclosure | ||
Contribution to the defined benefit plans | $ 4.4 |
Income taxes - Pre-tax Net Loss
Income taxes - Pre-tax Net Loss and Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income (loss) before income taxes | $ 17,529 | $ (28,350) | $ (101,880) | $ (572,085) |
Provision (benefit) for income taxes | $ 2,984 | $ 3,098 | $ 11,567 | $ (22,200) |
Effective tax rate (percent) | 17.00% | (11.40%) | 3.90% |
Income taxes - Narrative (Detai
Income taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Operating Loss Carryforwards | |||
Estimated annual interest rate (percent) | 77.70% | 6.20% | |
Unrecognized tax benefits that would impact effective tax rate | $ 42.8 | $ 39.5 | |
Unrecognized tax benefits, accrued interest and penalties | 3.4 | $ 2.6 | |
Scenario, Adjustment | |||
Operating Loss Carryforwards | |||
Adjustments to deferred tax asset | $ (32.5) |
Supplemental equity informati_3
Supplemental equity information - Income (Loss) Per Share (Basic and Diluted) (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Equity [Abstract] | ||||
Net income (loss) attributable to Gannett | $ 14,687 | $ (31,260) | $ (112,514) | $ (548,305) |
Interest adjustment to Net income (loss) attributable to Gannett related to assumed conversions of the 2027 Notes, net of taxes | 7,598 | 0 | 0 | 0 |
Net income (loss) attributable to Gannett for diluted earnings per share | $ 22,285 | $ (31,260) | $ (112,514) | $ (548,305) |
Basic weighted average shares outstanding (in shares) | 135,002 | 132,223 | 134,610 | 131,425 |
Effect of dilutive securities: | ||||
Restricted stock grants (in shares) | 5,032 | 0 | 0 | 0 |
2027 Notes and restricted stock grants (in shares) | 99,419 | 0 | 0 | 0 |
Diluted weighted average shares outstanding (in shares) | 239,453 | 132,223 | 134,610 | 131,425 |
Income (loss) per share attributable to Gannett – basic (in dollars per share) | $ 0.11 | $ (0.24) | $ (0.84) | $ (4.17) |
Income (loss) per share attributable to Gannett– diluted (in dollars per share) | $ 0.09 | $ (0.24) | $ (0.84) | $ (4.17) |
Supplemental equity informati_4
Supplemental equity information - Computation of Diluted Income Per Share (Detail) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Warrants | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Computation of diluted income per share (in shares) | 845 | 1,362 | 845 | 1,362 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Computation of diluted income per share (in shares) | 6,068 | 6,068 | 6,068 | 6,068 |
Restricted stock grants | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Computation of diluted income per share (in shares) | 42 | 7,130 | 10,442 | 7,130 |
2027 Notes | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Computation of diluted income per share (in shares) | 0 | 0 | 99,419 | 0 |
Supplemental equity informati_5
Supplemental equity information - Narrative (Detail) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($)shares | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)shares$ / shares | Sep. 30, 2020USD ($) | |
Stockholders Equity Note | ||||
Share-based compensation cost | $ | $ 4.6 | $ 3.8 | $ 13.8 | $ 22.8 |
Unrecognized compensation cost related to non-vested share-based compensation | $ | $ 29.6 | $ 29.6 | ||
Weighted average period (in years) | 2 years 1 month 6 days | |||
2027 Notes | Convertible debt | ||||
Stockholders Equity Note | ||||
Aggregate shares receivable upon conversion (shares) | 294.2 | |||
Convertible shares excluded from computation of earnings per share (shares) | 194.8 | 194.8 | ||
Restricted Stock Awards | ||||
Stockholders Equity Note | ||||
Granted (in shares) | 4.1 | |||
Vesting period (years) | 3 years | |||
Granted (in dollars per share) | $ / shares | $ 5.29 |
Supplemental equity informati_6
Supplemental equity information - Rights Agreement (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Apr. 06, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Operating loss carryforwards | $ 543.5 | |
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% | |
Common stock | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Number of shares that may be exchanged per right (in shares) | 1 |
Supplemental equity informati_7
Supplemental equity information - Preferred Stock (Details) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Class of Stock | ||
Preferred stock authorized (in shares) | 300,000 | 300,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Preferred stock, issued (in shares) | 0 | 0 |
Series A Junior Participating Preferred Stock | ||
Class of Stock | ||
Preferred stock authorized (in shares) | 150,000 | 150,000 |
Preferred stock, outstanding (in shares) | 0 |
Supplemental equity informati_8
Supplemental equity information - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | $ 364,109 | $ 981,356 |
Other comprehensive income (loss) before reclassifications | (607) | (14,583) |
Amounts reclassified from accumulated other comprehensive loss | 29 | (30) |
Net current period other comprehensive income (loss), net of taxes | (578) | (14,613) |
Ending balance | 544,843 | 426,129 |
Amounts reclassified from accumulated other comprehensive loss | 11 | (6) |
Total | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | 50,173 | 8,202 |
Ending balance | 49,595 | (6,411) |
Pension and Postretirement Plans | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | 40,441 | 936 |
Other comprehensive income (loss) before reclassifications | 93 | (5,675) |
Amounts reclassified from accumulated other comprehensive loss | 29 | (30) |
Net current period other comprehensive income (loss), net of taxes | 122 | (5,705) |
Ending balance | 40,563 | (4,769) |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | 9,732 | 7,266 |
Other comprehensive income (loss) before reclassifications | (700) | (8,908) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Net current period other comprehensive income (loss), net of taxes | (700) | (8,908) |
Ending balance | $ 9,032 | $ (1,642) |
Fair value measurement - Narrat
Fair value measurement - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets held-for-sale | $ 21.7 | $ 14.7 |
Segment reporting - Narrative (
Segment reporting - Narrative (Details) | 9 Months Ended |
Sep. 30, 2021segment | |
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 | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information | ||||
Total operating revenues | $ 800,185 | $ 814,539 | $ 2,381,544 | $ 2,530,223 |
Adjusted EBITDA | 102,067 | 87,980 | 318,301 | 265,066 |
Advertising and marketing services | ||||
Segment Reporting Information | ||||
Total operating revenues | 412,020 | 405,227 | 1,220,487 | 1,249,156 |
Circulation | ||||
Segment Reporting Information | ||||
Total operating revenues | 306,702 | 336,158 | 942,398 | 1,053,528 |
Other | ||||
Segment Reporting Information | ||||
Total operating revenues | 81,463 | 73,154 | 218,659 | 227,539 |
Operating Segments | Publishing | ||||
Segment Reporting Information | ||||
Total operating revenues | 715,807 | 732,226 | 2,139,937 | 2,286,268 |
Adjusted EBITDA | 101,001 | 108,752 | 317,398 | 311,767 |
Operating Segments | Publishing | Advertising and marketing services | ||||
Segment Reporting Information | ||||
Total operating revenues | 294,742 | 303,646 | 890,665 | 939,923 |
Operating Segments | Publishing | Circulation | ||||
Segment Reporting Information | ||||
Total operating revenues | 306,698 | 336,152 | 942,392 | 1,053,518 |
Operating Segments | Publishing | Other | ||||
Segment Reporting Information | ||||
Total operating revenues | 80,325 | 66,566 | 212,970 | 207,355 |
Operating Segments | Digital Marketing Solutions | ||||
Segment Reporting Information | ||||
Total operating revenues | 116,771 | 105,443 | 329,089 | 321,287 |
Adjusted EBITDA | 15,024 | 4,177 | 36,725 | 14,847 |
Operating Segments | Digital Marketing Solutions | Advertising and marketing services | ||||
Segment Reporting Information | ||||
Total operating revenues | 116,771 | 100,807 | 328,184 | 306,899 |
Operating Segments | Digital Marketing Solutions | Circulation | ||||
Segment Reporting Information | ||||
Total operating revenues | 0 | 0 | 0 | 0 |
Operating Segments | Digital Marketing Solutions | Other | ||||
Segment Reporting Information | ||||
Total operating revenues | 0 | 4,636 | 905 | 14,388 |
Corporate and other | ||||
Segment Reporting Information | ||||
Total operating revenues | 1,649 | 2,732 | 6,428 | 8,140 |
Adjusted EBITDA | (13,958) | (24,949) | (35,822) | (61,548) |
Corporate and other | Advertising and marketing services | ||||
Segment Reporting Information | ||||
Total operating revenues | 507 | 774 | 1,638 | 2,334 |
Corporate and other | Circulation | ||||
Segment Reporting Information | ||||
Total operating revenues | 4 | 6 | 6 | 10 |
Corporate and other | Other | ||||
Segment Reporting Information | ||||
Total operating revenues | 1,138 | 1,952 | 4,784 | 5,796 |
Intersegment Eliminations | ||||
Segment Reporting Information | ||||
Total operating revenues | (34,042) | (25,862) | (93,910) | (85,472) |
Intersegment Eliminations | Advertising and marketing services | ||||
Segment Reporting Information | ||||
Total operating revenues | (34,042) | (25,862) | (93,910) | (85,472) |
Intersegment Eliminations | Publishing | Advertising and marketing services | ||||
Segment Reporting Information | ||||
Total operating revenues | $ (34,042) | $ (25,862) | $ (93,910) | $ (85,472) |
Segment reporting - Reconciliat
Segment reporting - Reconciliation of EBITDA to Operating Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting [Abstract] | ||||
Net income (loss) attributable to Gannett | $ 14,687 | $ (31,260) | $ (112,514) | $ (548,305) |
Provision (benefit) for income taxes | 2,984 | 3,098 | 11,567 | (22,200) |
Interest expense | 34,603 | 58,063 | 109,370 | 173,890 |
Loss on early extinguishment of debt | 3,761 | 476 | 25,996 | 1,650 |
Non-operating pension income | (23,860) | (18,334) | (71,644) | (54,433) |
Loss on convertible notes derivative | 0 | 0 | 126,600 | 0 |
Depreciation and amortization | 48,107 | 61,355 | 154,452 | 205,706 |
Integration and reorganization costs | 13,619 | 13,417 | 35,467 | 73,978 |
Other operating expenses | 4 | 1,913 | 11,354 | 10,261 |
Asset impairments | 2,301 | 1,585 | 3,134 | 8,444 |
Goodwill and intangible impairments | 0 | 0 | 0 | 393,446 |
(Gain) loss on sale or disposal of assets, net | (833) | 795 | 9,206 | 1,540 |
Share-based compensation expense | 4,602 | 3,844 | 13,804 | 22,812 |
Other items | 2,092 | (6,972) | 1,509 | (1,723) |
Adjusted EBITDA (non-GAAP basis) | 102,067 | 87,980 | 318,301 | 265,066 |
Gain on sale of investments | 0 | (7,800) | 0 | (7,995) |
Subtotal | 33,539 | (20,874) | 99,243 | (66,981) |
Tax impact of above items | 7,033 | 25,449 | 28,042 | 61,364 |
Adjusted Net income (loss) attributable to Gannett (non-GAAP basis) | $ 26,506 | $ (46,323) | $ 71,201 | $ (128,345) |
Net loss attributable to Gannett margin (percent) | 1.80% | (3.80%) | (4.70%) | (21.70%) |
Adjusted EBITDA margin (non-GAAP basis) (percent) | 12.80% | 10.80% | 13.40% | 10.50% |
Other supplemental informatio_2
Other supplemental information - cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 141,302 | $ 170,725 | $ 188,960 | |
Restricted cash included in other current assets | 4,845 | 10,796 | ||
Restricted cash included in investments and other assets | 21,267 | 24,177 | ||
Total cash, cash equivalents and restricted cash | $ 167,414 | $ 206,726 | $ 223,933 | $ 188,664 |
Other supplemental informatio_3
Other supplemental information - cash flow information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net cash refund for taxes | $ (9,031) | $ (4,510) |
Cash paid for interest | 80,280 | 176,402 |
Non-cash investing and financing activities: | ||
Accrued capital expenditures | $ 2,836 | $ 758 |
Other supplemental informatio_4
Other supplemental information - Accounts payable and accrued liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable | $ 134,805 | $ 131,797 |
Compensation | 108,444 | 115,061 |
Taxes (primarily property and sales taxes) | 29,104 | 30,834 |
Benefits | 23,031 | 22,821 |
Interest | 10,012 | 3,676 |
Other | 51,928 | 74,057 |
Accounts payable and accrued liabilities | $ 357,324 | $ 378,246 |
Subsequent events - Narrative (
Subsequent events - Narrative (Details) | Oct. 15, 2021USD ($) | Feb. 09, 2021USD ($) | Dec. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Nov. 17, 2020USD ($) |
Subsequent Event | |||||||||
Long-term debt | $ 741,636,000 | $ 741,636,000 | $ 890,323,000 | ||||||
Loss on early extinguishment of debt | $ 3,761,000 | $ 476,000 | 25,996,000 | $ 1,650,000 | |||||
Senior Secured Term Loan | |||||||||
Subsequent Event | |||||||||
Loss on early extinguishment of debt | $ 26,000,000 | ||||||||
Senior Secured Term Loan | Five Year Term Loan | |||||||||
Subsequent Event | |||||||||
Debt instrument term (in years) | 5 years | 5 years | 5 years | 5 years | |||||
Long-term debt | $ 1,045,000,000 | $ 899,400,000 | $ 899,400,000 | ||||||
Loss on early extinguishment of debt | $ 3,800,000 | ||||||||
Senior Secured Term Loan | Five Year Term Loan | Forecasted | |||||||||
Subsequent Event | |||||||||
Loss on early extinguishment of debt | $ 31,200,000 | ||||||||
Senior Secured Term Loan | Five Year Term Loan | LIBOR | |||||||||
Subsequent Event | |||||||||
Variable rate (percent) | 7.00% | ||||||||
Senior Secured Term Loan | Five Year Term Loan | Base Rate | |||||||||
Subsequent Event | |||||||||
Variable rate (percent) | 6.00% | ||||||||
Convertible debt | 2027 Notes | |||||||||
Subsequent Event | |||||||||
Stated interest rate (as a percent) | 6.00% | 6.00% | |||||||
Long-term debt | $ 497,100,000 | ||||||||
Convertible debt | Convertible senior notes | |||||||||
Subsequent Event | |||||||||
Stated interest rate (as a percent) | 4.75% | 4.75% | |||||||
Long-term debt | $ 3,300,000 | $ 3,300,000 | |||||||
Subsequent Event | |||||||||
Subsequent Event | |||||||||
Principal outstanding | $ 1,416,000,000 | ||||||||
Subsequent Event | Senior Secured Term Loan | New Senior Secured Term Loan | |||||||||
Subsequent Event | |||||||||
Debt instrument term (in years) | 5 years | ||||||||
Aggregate principal amount | $ 516,000,000 | ||||||||
Long-term debt | 516,000,000 | ||||||||
Subsequent Event | Senior Secured Term Loan | New Senior Secured Term Loan | Debt Covenant, Range One | |||||||||
Subsequent Event | |||||||||
Maximum debt or equity purchasable | $ 25,000,000 | ||||||||
Net leverage ratio | 2 | ||||||||
Subsequent Event | Senior Secured Term Loan | New Senior Secured Term Loan | Debt Covenant, Range Two | |||||||||
Subsequent Event | |||||||||
Maximum debt or equity purchasable | $ 50,000,000 | ||||||||
Net leverage ratio | 1.50 | ||||||||
Subsequent Event | Senior Secured Term Loan | New Senior Secured Term Loan | Debt Covenant, Range Three | |||||||||
Subsequent Event | |||||||||
Net leverage ratio | 1 | ||||||||
Subsequent Event | Senior Secured Term Loan | New Senior Secured Term Loan | LIBOR | |||||||||
Subsequent Event | |||||||||
Variable rate (percent) | 5.00% | ||||||||
Subsequent Event | Senior Secured Term Loan | New Senior Secured Term Loan | LIBOR | Minimum | |||||||||
Subsequent Event | |||||||||
Variable rate (percent) | 0.50% | ||||||||
Subsequent Event | Senior Secured Term Loan | New Senior Secured Term Loan | Base Rate | |||||||||
Subsequent Event | |||||||||
Variable rate (percent) | 4.00% | ||||||||
Subsequent Event | Senior Secured Term Loan | New Senior Secured Term Loan | Base Rate | Minimum | |||||||||
Subsequent Event | |||||||||
Variable rate (percent) | 1.50% | ||||||||
Subsequent Event | Senior Notes | 2026 Notes | |||||||||
Subsequent Event | |||||||||
Aggregate principal amount | $ 400,000,000 | ||||||||
Stated interest rate (as a percent) | 6.00% | ||||||||
Long-term debt | $ 400,000,000 | ||||||||
Subsequent Event | Convertible debt | 2027 Notes | |||||||||
Subsequent Event | |||||||||
Long-term debt | 497,100,000 | ||||||||
Subsequent Event | Convertible debt | Convertible senior notes | |||||||||
Subsequent Event | |||||||||
Long-term debt | $ 3,300,000 |