USA TODAY Co., Inc. (TDAY) FY 2024 MD&A

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

OVERVIEW

We are a diversified media company with expansive reach at the national and local level dedicated to empowering and

enriching communities. We seek to inspire, inform, and connect audiences as a sustainable, growth focused media and digital

marketing solutions company. Through our trusted brands, including the USA TODAY NETWORK, comprised of the national

publication, USA TODAY, and local media organizations, including our network of local properties, in the United States (the

"U.S."), and Newsquest, a wholly-owned subsidiary operating in the United Kingdom (the "U.K."), we provide essential

journalism, local content, and digital experiences to audiences and businesses. We deliver high-quality, trusted content with a

commitment to balanced, unbiased journalism, where and when consumers want to engage. We prioritize a digital-first strategy,

focusing on audience growth and engagement while diversifying revenue streams. Our digital marketing solutions brand,

LocaliQ, supports small and medium-sized businesses ("SMBs") with innovative digital marketing products and solutions. Our

mission remains to inspire, inform, and connect communities while driving sustainable growth for our customers, advertisers,

partners, and shareholders.

We report in three segments: Domestic Gannett Media, Newsquest and Digital Marketing Solutions ("DMS"). We also

have a Corporate and other category that includes activities not directly attributable to a specific reportable segment and

includes broad corporate functions, such as legal, human resources, accounting, analytics, finance, marketing and technology,

as well as other general business costs. A full description of our reportable segments is included in Note 14 — Segment

reporting in the notes to the Consolidated financial statements.

Business Trends

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

•Print advertising and Print circulation revenues have and are expected to continue to decline as our audience

increasingly moves to digital platforms. We seek to optimize our print operations to efficiently manage for the

declining print audience. We are focused on growing a digitally-oriented audience across multiple platforms and

revenue streams.

•Our revenues and results of operations continue to be influenced by general macroeconomic conditions, including, but

not limited to, interest rates, housing demand, employment levels, and consumer confidence. We believe that these

factors are contributing to uncertainty, which is resulting in lower levels of advertising performance and reduced

spending.

•We rely on third-party platforms from large technology companies, particularly search engines, social media

platforms, and emerging technologies. These platforms exert significant control over the visibility and ranking of our

content, and their actions can adversely impact traffic, engagement, and revenues. Additionally, these companies can

influence both the type of media we acquire and the associated costs. We continue to adapt by diversifying our digital

strategies and optimizing content distribution to mitigate these impacts.

•The application of artificial intelligence ("AI") and the rapid rate of change within the AI ecosystem is increasing the

pace of change in the media sector.

Certain Matters Affecting Comparability

The following items affect period-over-period comparisons and will continue to affect period-over-period comparisons for

future results:

Asset impairments

For the year ended December 31, 2024, we recorded impairment charges of $46.6 million, of which approximately

$46.0 million related to the McLean, Virginia operating lease right-of-use asset and the associated leasehold improvements. For

the years ended December 31, 2023 and 2022, we recorded impairment charges of $1.4 million and $1.1 million related to our

plan to monetize non-strategic assets.

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Loss (gain) on sale or disposal of assets, net

For the year ended December 31, 2024, we recognized a net loss on the sale of assets of $1.1 million, primarily related to

net losses of $1.7 million at the Domestic Gannett Media segment and $0.2 million at our Corporate and other category,

partially offset by a net gain of $0.9 million at the Newsquest segment, as part of our plan to monetize non-strategic assets.

For the year ended December 31, 2023, we recognized a net gain on the sale of assets of $40.1 million, primarily related to

a net gain of $38.9 million at the Domestic Gannett Media segment due to the sales of production facilities as part of our plan to

monetize non-strategic assets, and a gain of $1.4 million at our Corporate and other category related to the sale of intellectual

property.

For the year ended December 31, 2022, we recognized a net gain on the sale of assets of $6.9 million, primarily related to a

net gain of $6.7 million at the Domestic Gannett Media segment, mainly driven by the sales of production facilities as part of

our plan to monetize non-strategic assets.

Integration and reorganization costs

For the year ended December 31, 2024, we incurred Integration and reorganization costs of $66.2 million. Of the total costs

incurred, $15.1 million were related to severance activities and $51.0 million were related to other reorganization-related costs,

including $24.5 million related to withdrawal liabilities, generally paid over a period of approximately 20 years, which were

expensed as a result of ceasing contributions to multiemployer pension plans, and $9.7 million expensed as of the cease-use

date related to certain licensed content, as well as costs associated with facility consolidation and systems implementation.

For the year ended December 31, 2023, we incurred Integration and reorganization costs of $24.5 million. Of the total costs

incurred, $18.5 million were related to severance activities and $6.0 million were related to other costs, including costs for

consolidating operations, primarily related to costs associated with systems implementation and the outsourcing of corporate

functions, partially offset by the reversal of withdrawal liabilities related to multiemployer pension plans of $6.4 million based

on settlement of the withdrawal liabilities.

For the year ended December 31, 2022, we incurred Integration and reorganization costs of $88.0 million. Of the total costs

incurred, $57.6 million were related to severance activities and $30.4 million were related to other costs, including a withdrawal

liability related to multiemployer pension plans of $8.6 million, which was expensed as a result of ceasing contributions, costs

for consolidating operations, primarily related to systems implementation and the outsourcing of corporate functions, and

facilities consolidation expenses, primarily associated with exiting a lease.

Foreign currency

Our U.K. media operations are conducted through our Newsquest subsidiary. In addition, we have foreign operations in

regions such as Canada, Australia, New Zealand and India. Earnings from operations in foreign regions are translated into U.S.

dollars at average exchange rates prevailing during the period, and assets and liabilities are translated at exchange rates in effect

at the balance sheet date. Currency translation fluctuations may impact revenue, expense, and operating income results for our

international operations. For example, our international revenues are favorably impacted as the U.S. dollar weakens relative to

other foreign currencies, and unfavorably impacted as the U.S. dollar strengthens relative to other foreign currencies. Foreign

currency exchange rate fluctuations positively impacted our revenues and profitability during the year ended December 31,

2024.

Strategy

We are committed to inspiring, informing and connecting audiences as a sustainable, growth-focused media and digital

marketing solutions company. Our strategy is rooted in three operating pillars: (i) expanding our reach and engagement, (ii)

diversifying our digital revenues, and (iii) strengthening our capital structure, all supported by what we believe is a stable and

increasingly agile foundation which we continue to optimize as the business and industry evolves. We believe our strategy will

allow us to continue our evolution to a sustainable, growth-focused media and digital marketing solutions company.

Foundation for ongoing growth

We continue to optimize and improve our infrastructure – through ongoing systems consolidations and migrations,

improving process workflows, leveraging evolving technology, and ensuring we have the synergy across the organization

expected to deliver the stabilization required to fuel our plan into the future. We also continue to invest in our people and in the

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skills needed to support our future aims and to retain our talent by remaining an attractive place to work.

Three operating pillars

Expand reach and engagement with our customer segments

We believe that a key to our ongoing growth is expanding our base – including clients in our DMS segment and audience

in our Domestic Gannett Media and Newsquest segments – and optimizing our revenue streams across this growing base.

As of December 31, 2024, we have built one of the largest digital audiences in the U.S. media sector, both locally and

nationally. For both the Domestic Gannett Media and Newsquest segments, we seek to continue to strengthen the connection

with our audience by providing relevant content and expanded offerings that resonate with our readers. We believe a scaled,

engaged audience is the catalyst for creating diversified, predictable, and repeatable digital revenues.

In our DMS segment, we seek to enhance our customer acquisition efforts by targeting client profiles and broadening our

product portfolio. By capitalizing on our domain expertise, we aim to grow our addressable market and provide comprehensive

solutions that meet the evolving needs of our clients.

Diversify digital revenues

We expect to continue to expand the ways that we grow digital revenues through creating a diverse portfolio of meaningful

digital revenue streams and employing a holistic monetization strategy that maximizes revenue opportunities across the

spectrum and tailors such opportunities based on individual consumer habits.

Our strategy aims to allow us to more fully monetize the numerous visitors to our digital platforms, approximately

193 million(a)(b) unique monthly visitors during 2024, capitalizing on every interaction. Each interaction is an opportunity to

present a digital advertising offering, a digital-only subscription, an e-commerce opportunity, or to reach consumers more

broadly who access our content via our paid syndication partners. By optimizing our interactions with readers, we aim to fully

leverage our digital portfolio of products and maximize the overall revenue opportunity while providing each consumer with a

meaningful experience.

Likewise, our digital marketing solutions business is focused on optimizing and expanding our core digital marketing

services products and solutions while enhancing our portfolio with an Artificial Intelligence ("AI") powered software solution,

which we expect to increase our addressable market, improve retention, and increase Core platform revenues. Refer to "Key

Performance Indicators" below for further discussion of Core platform revenues.

Strengthen our capital structure

We remain focused on reducing debt, generating consistent cash flow, and creating flexibility to reinvest in growth

initiatives. We believe this disciplined approach supports our ability to innovate and adapt while ensuring long-term financial

health.

Macroeconomic Environment

We are exposed to certain risks and uncertainties caused by factors beyond our control, including economic and political

instability and other geopolitical events. We believe that these uncertain economic conditions have adversely impacted and may

continue to have an adverse impact on our revenues, and the occurrence of these factors has resulted in a reduction in demand

for our print and digital advertising, reduced the rates for our advertising, and caused marketers to shift, reduce or stop spend.

We are exposed to potential increases in interest rates associated with our new $900.0 million five-year first lien term loan

facility (the "2029 Term Loan Facility"), which as of December 31, 2024, accounted for approximately 76% of our outstanding

debt, as well as fluctuations in foreign currency exchange rates, primarily related to our operations in the U.K. We expect

continued uncertainty and volatility in the U.S. and global economies which will continue to impact our business. See "Item 1A

— Risk Factors" in this Annual Report on Form 10-K.

Seasonality

We experience seasonality in our revenues. The Domestic Gannett Media segment typically witnesses the greatest impact

from seasonality in the third quarter, primarily attributed to reduced population in seasonal markets and decreased holiday

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related spending. The DMS segment generally experiences the greatest impact from seasonality in the first half of the fiscal

year, which can be attributed to the advertising needs of specific verticals, which are generally lower in the first half of the year.

Environmental, Social and Governance ("ESG") Initiatives

As a leading media organization, our longstanding corporate social responsibility position is driven by our deep

commitment to our communities. We are dedicated to ensuring that we have mindful and ethical business practices that

positively impact our world. In early 2024, we published our 2024 ESG Report detailing the progress we made on our U.N.

Sustainable Development Goals ("U.N. SDGs") that include Reduced Inequalities, Climate Action, and Peace, Justice, and

Strong Institutions. The 2024 ESG Report highlighted several key achievements, such as improvements to our workplace

diversity, further reductions in our total paper consumption, and the successful completion of our inaugural climate disclosure

project questionnaires for climate change and forests.

We are committed to ensuring our coverage is widely available, actively promoted across our media sites and marketed to

our millions of registered users. In January 2025, we published our network-wide 2024 Journalism Impact Report, which

highlighted what we believe are the most influential articles we produced in 2024 and covers topics such as coverage on

inclusion, diversity and equity as well as climate change. We are committed to the ongoing publishing of an annual network-

wide Journalism Impact Report, which surfaces the top stories we produced that led to action.

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RESULTS OF OPERATIONS

Consolidated Summary

A summary of our consolidated results is presented below:

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

(a) Amounts are net of intersegment eliminations of $151.8 million, $150.5 million and $143.5 million for the years ended December 31, 2024, 2023 and 2022,

respectively, which represent digital marketing services revenues and expenses associated with products sold by sales teams in our Domestic Gannett

Media and Newsquest segments but fulfilled by our DMS segment. When discussing segment results, these revenues and expenses are presented gross but

are eliminated in consolidation.

(b) For the years ended December 31, 2024, 2023, and 2022, included Commercial printing and delivery revenues of $152.0 million, $186.1 million, and

$211.8 million, respectively.

Revenues

Digital revenues are primarily derived from digital advertising offerings such as digital marketing services generated

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, classified

advertisements and display advertisements, which may leverage third-party providers, and digital distribution of our

publications, as well as digital content syndication, affiliate and content partnerships, and licensing revenues.

Print and commercial revenues are generated from the sale of local, national, and classified print advertising products, the

sale of both home delivery and single copies of our publications, as well as commercial printing and distribution arrangements,

and revenues from our events business.

Operating expenses

Operating expenses consist primarily of the following:

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•Operating costs at the Domestic Gannett Media and Newsquest segments include labor, newsprint, delivery and digital

costs and at the DMS segment include the cost of online media acquired from third parties and costs to manage and

operate our marketing solutions and technology infrastructure;

•Selling, general and administrative expenses include labor, payroll, outside services, benefits costs and bad debt

expense;

•Depreciation and amortization;

•Integration and reorganization costs include severance costs as well as other reorganization costs associated with

individual restructuring programs, designed primarily to right-size our employee base, consolidate facilities and

improve operations;

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

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

•Other operating expenses, including third-party debt expenses as well as acquisition-related costs.

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

Non-operating expenses (income)

Interest expense: For the years ended December 31, 2024, 2023 and 2022, Interest expense was $104.7 million, $111.8

million and $108.4 million, respectively.

The decrease in interest expense for the year ended December 31, 2024 compared to 2023, was primarily due to quarterly

amortization payments and required prepayments on our prior five-year senior secured term loan facility in an original

aggregate principal amount of $516.0 million (the "Senior Secured Term Loan"), and the repurchase of our $400 million

aggregate principal amount of 6.00% first lien notes due November 1, 2026 (the "2026 Senior Notes"). The Senior Secured

Term Loan was refinanced and replaced on October 15, 2024 with our 2029 Term Loan Facility (collectively with the Senior

Secured Term Loan, the "Term Loans"). The decrease in interest expense was partially offset by payments made on our 2029

Term Loan Facility and an increase in interest rates on the Senior Secured Term Loan.

The increase in interest expense for the year ended December 31, 2023 compared to 2022, was primarily due to the impact

of the increase in interest rates on our Senior Secured Term Loan, partially offset by a lower debt balance, mainly driven by

quarterly amortization payments on our Senior Secured Term Loan and repurchases of our 2026 Senior Notes.

Gain on early extinguishment of debt: For the years ended December 31, 2024, 2023 and 2022, we recognized net gains on

the early extinguishment of debt of $55.6 million, $4.5 million and $0.4 million, respectively, mainly due to our debt

refinancing transactions. Refer to Note 8 — Debt for additional discussion regarding our debt.

Non-operating pension income: For the years ended December 31, 2024, 2023 and 2022, Non-operating pension income

was $12.4 million, $9.4 million and $59.0 million, respectively. The increase in Non-operating pension income for the year

ended December 31, 2024 compared to 2023 was primarily due to the decrease in the discount rate, partially offset by a decline

in the projected benefit obligation. The decrease in Non-operating pension income for the year ended December 31, 2023

compared to 2022 was primarily due to a decrease in the expected return on plan assets, mainly driven by a decrease in assets

following the annuity contract entered into during 2022, related to the Gannett Retirement Plan (the "GR Plan").

Equity income in unconsolidated investees, net: For the years ended December 31, 2024, 2023 and 2022, Equity income in

unconsolidated investees, net was $0.5 million, $2.4 million and $3.4 million, respectively.

Other non-operating income, net: Other non-operating income, net consisted of certain items that are outside of our normal

business operations. For the years ended December 31, 2024, 2023 and 2022, we recorded Other non-operating income, net of

$1.3 million, $3.1 million and $2.3 million, respectively.

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(Benefit) provision for income taxes

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

NM indicates not meaningful.

Our effective tax rate for the year ended December 31, 2024 was 66.0%. The tax benefit for 2024 was primarily impacted by

the release of uncertain tax position reserves related to an Internal Revenue Service audit, the release of foreign valuation

allowances, debt refinancing transactions and the pre-tax book loss, partially offset by the increase in valuation allowances on

non-deductible U.S. interest expense carryforwards and global intangible low-taxed income inclusion. Refer to Note 8 — Debt

for additional discussion regarding our debt.

Our effective tax rate for the year ended December 31, 2023 was not meaningful. The tax provision for 2023 was primarily

impacted by the valuation allowances on non-deductible U.S. interest expense carryforwards, the global intangible low-taxed

income inclusion from our U.K. operations, nondeductible compensation, and state and local tax expense, partially offset by the

benefit from the pre-tax book loss.

Our effective tax rate for the year ended December 31, 2022 was negative 1.8%. The tax provision for 2022 was primarily

impacted by the valuation allowances on non-deductible U.S. interest expense carryforwards, the global intangible low-taxed

income inclusion, the release of uncertain tax positions in the U.S., and the reduction in the blended state tax rate, which were

offset by the tax benefit of the pre-tax book loss.

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

Net loss attributable to Gannett and diluted loss per share attributable to Gannett were $26.4 million and $0.18 for the year

ended December 31, 2024, respectively, $27.8 million and $0.20 for the year ended December 31, 2023, respectively, and $78.0

million and $0.57 for the year ended December 31, 2022, respectively. The changes reflect the various items discussed above

and below in "Segment Results."

Segment Results

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Domestic Gannett Media segment 2024 compared to 2023

A summary of our Domestic Gannett Media segment results comparing the year ended December 31, 2024 to the year

ended December 31, 2023 is presented below:

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

Revenues

The following table provides the breakout of Revenues by category for the years ended December 31, 2024 and 2023:

(a) For the years ended December 31, 2024 and 2023, included Commercial printing and delivery revenues of $141.8 million and $178.1 million, respectively.

For the year ended December 31, 2024, Digital advertising revenues increased compared to 2023, primarily due to an

increase in national revenues, including sponsored link and programmatic revenue, as well as higher spend on automotive

advertisements, partially offset by a decrease in local revenues and lower spend on employment and obituary notifications.

For the year ended December 31, 2024, Digital marketing services revenues increased compared to 2023, primarily due to

an increase in client spend.

For the year ended December 31, 2024, Digital-only subscription revenues increased compared to 2023, primarily due to

an increase in digital-only subscription average revenue per user ("Digital-only ARPU") of 21.2%, mainly due to higher rates.

Refer to "Key Performance Indicators" below for further discussion of Digital-only ARPU.

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For the year ended December 31, 2024, Digital other revenues increased compared to 2023, primarily due to an increase in

affiliate and syndication revenues, partially offset by the absences of revenues associated with non-core products which were

sunset.

For the year ended December 31, 2024, Print advertising revenues decreased compared to 2023, primarily due to a decrease

in local and national print advertisements and lower advertiser inserts, mainly due to a reduction in spend from customers

driven by macroeconomic factors, and lower spend on classified advertisements, mainly associated with obituary notifications

and real estate advertisements.

For the year ended December 31, 2024, Print circulation revenues decreased compared to 2023, primarily due to a decline

in home delivery and single copy as a result of a reduction in the volume of subscribers, partially offset by higher rates on home

delivery and single copy.

For the year ended December 31, 2024, Commercial and other revenues decreased compared to 2023, primarily due to a

decrease in commercial print and delivery revenues, driven by the decline in production volume, including the impact of a

business divested in 2024 and facility closures as well as a decrease in the price of newsprint.

Operating expenses

The following table provides the breakout of Operating costs for the years ended December 31, 2024 and 2023:

For the year ended December 31, 2024, Newsprint and ink costs decreased compared to 2023, primarily due to lower

volume due to the decline in revenues, as well as a decrease in the cost of newsprint of approximately $12.8 million.

For the year ended December 31, 2024, Distribution costs decreased compared to 2023, primarily due to a decrease of

$55.6 million associated with lower home delivery and single copy revenues, and the conversion to mail and route optimization,

partially offset by an increase in postage costs of $7.9 million, mainly due to conversion to mail delivery in multiple markets, as

well as higher postage costs associated with increased revenue for direct mail.

For the year ended December 31, 2024, Compensation and benefits costs decreased compared to 2023, primarily due to

lower payroll expense of $15.9 million, mainly driven by a decrease in headcount tied to ongoing cost control initiatives,

including facility closures and conversion to mail delivery in multiple markets, partially offset by higher wages, and to a lesser

extent, lower employee benefit costs of $2.3 million.

For the year ended December 31, 2024, Outside services costs, which includes professional services fulfilled by third

parties, media fees and other digital costs, and paid search and ad serving services, decreased compared to 2023, primarily due

to a decrease in news and editorial expenses of $13.1 million, mainly due to the cease-use of certain licensed content, a decrease

in event related expenses of approximately $5.1 million, mainly due to the decline in revenues, and a decrease in third-party

media fees of approximately $3.7 million, partially offset by an increase in outside printing costs of $3.9 million.

For the year ended December 31, 2024, Other costs decreased compared to 2023, primarily due to lower facility related

expenses of $17.0 million, mainly associated with real estate sales and facility consolidations, as well as lower miscellaneous

expenses of $15.8 million, mainly related to lower technology costs, partially offset by higher promotion costs of approximately

$0.7 million.

The following table provides the breakout of Selling, general and administrative expenses for the years ended December

31, 2024 and 2023:

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For the year ended December 31, 2024, Compensation and benefits costs decreased compared to 2023, primarily due to

lower payroll expense of $2.2 million, driven by lower commissions related to revenue performance as well as a decrease in

headcount tied to ongoing cost control initiatives, and to a lesser extent, lower employee benefit costs of $1.8 million.

For the year ended December 31, 2024, Outside services and other costs, which include services fulfilled by third parties,

decreased compared to 2023, primarily due to lower bad debt expense of approximately $6.3 million, and lower miscellaneous

expenses of approximately $5.6 million, including lower product and finance costs, partially offset by higher promotion and

technology costs.

For the year ended December 31, 2024, Depreciation and amortization expense decreased compared to 2023, reflecting the

impact of fewer print facilities in 2024 compared to 2023.

For the year ended December 31, 2024, Integration and reorganization costs increased compared to 2023, mainly due to an

increase in other reorganization-related costs of $42.4 million and an increase in severance costs of $1.6 million. For the year

ended December 31, 2024, the change in other reorganization-related costs was primarily due to $25.9 million related to

withdrawal liabilities which were expensed as a result of ceasing contributions to multiemployer pension plans, $9.7 million

expensed as of the cease-use date related to certain licensed content, and the absence of $6.4 million related to the reversal of

withdrawal liabilities in 2023 related to multiemployer pension plans based on settlement of the withdrawal liability.

For the year ended December 31, 2024, we recognized a net loss on the sale of assets of $1.7 million compared to a net

gain of $38.9 million for the year ended December 31, 2023, primarily related to sales of production facilities as part of our

plan to monetize non-strategic assets.

Domestic Gannett Media segment Adjusted EBITDA

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

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

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

For the year ended December 31, 2024, the increase in Domestic Gannett Media segment Adjusted EBITDA compared to

2023 was primarily attributable to the changes discussed above.

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Domestic Gannett Media segment 2023 compared to 2022

A summary of our Domestic Gannett Media segment results comparing the year ended December 31, 2023 to the year

ended December 31, 2022 is presented below:

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

Revenues

The following table provides the breakout of Revenues by category for the years ended December 31, 2023 and 2022:

(a) For the years ended December 31, 2023 and 2022, included Commercial printing and delivery revenues of $178.1 million and $204.8 million, respectively.

For the year ended December 31, 2023, Digital advertising revenues decreased compared to 2022, driven by decreases in

both domestic national and local revenue volumes and a reduction in digital advertising demand as a result of a more

challenging macroeconomic environment, including declining CPMs (cost per thousand impressions) and lower spend on

employment and obituary notifications, partially offset by higher spend on automotive advertisements.

For the year ended December 31, 2023, Digital marketing services revenues increased compared to 2022, primarily due to

an increase in rates, partially offset by a decrease in client counts.

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For the year ended December 31, 2023, Digital-only subscription revenues increased compared to 2022, due to an increase

in Digital-only ARPU of 7.8%, mainly due to product mix. Refer to "Key Performance Indicators" below for further discussion

of Digital-only ARPU.

For the year ended December 31, 2023, Digital other revenues increased compared to 2022, primarily due to an increase in

affiliate and partnership revenues, partially offset by a decline in digital syndication revenues.

For the year ended December 31, 2023, Print advertising revenues decreased compared to 2022, primarily due to a decrease

in advertiser inserts, mainly due to volume declines, a decrease in local and national print advertisements, mainly due to the

ongoing decline associated with secular trends and both a shift and a reduction in spend from customers driven by

macroeconomic factors, and lower spend on classified advertisements, mainly driven by lower spend on obituary notifications

and real estate advertisements, partially offset by an increase in spend on employment advertisements. In addition, the decrease

in Print advertising revenues was also due to the absence in 2023 of revenues of $31.3 million associated with both businesses

divested and non-core products which were sunset in 2023 and 2022.

For the year ended December 31, 2023, Print circulation revenues decreased compared to 2022, due to a decline in home

delivery as a result of a reduction in the volume of subscribers, partially offset by an increase in rates, as well as a decline in

single copy due to a reduction in volume. In addition, the decrease in Print circulation revenues was due to the absence in 2023

of revenues of $6.8 million associated with non-core products which were sunset in 2023 and 2022.

For the year ended December 31, 2023, Commercial and other revenues decreased compared to 2022, primarily due to a

decline in commercial print volume, partially offset by an increase in event revenues, mainly driven by an increase in

registration fees and higher merchandising revenues, driven by higher attendance, partially offset by slightly fewer events.

Operating expenses

The following table provides the breakout of Operating costs for the years ended December 31, 2023 and 2022:

For the year ended December 31, 2023, Newsprint and ink costs decreased compared to 2022, primarily due to a decline

associated with lower revenues, partially offset by an increase of $2.4 million driven by the change in the cost of newsprint.

For the year ended December 31, 2023, Distribution costs decreased compared to 2022, primarily due to a decrease of

$51.2 million associated with lower home delivery and single copy revenues, partially offset by an increase of $4.4 million,

driven by higher postage costs primarily due to conversion to mail delivery in multiple markets. Included in the decline of

Distribution costs was the absence in 2023 of expenses of $16.8 million associated with both businesses divested and non-core

products which were sunset in 2023 and 2022.

For the year ended December 31, 2023, Compensation and benefits costs decreased compared to 2022, primarily due to

lower payroll expense of $69.5 million, driven by a decrease in headcount tied to ongoing cost control initiatives, including

facility closures and conversion to mail delivery in multiple markets, and to a lesser extent, lower employee benefit costs of

$25.1 million, mainly due to a decrease in insurance costs due to a decrease in headcount and a decline in employer 401(k) plan

matching contributions, which were suspended in the third quarter of 2022.

For the year ended December 31, 2023, Outside services costs, which includes professional services fulfilled by third

parties, media fees and other digital costs, and paid search and ad serving services, decreased compared to 2022, primarily due

to a decrease of $12.4 million in various expenses, including costs related to news and editorial, professional services, outside

printing, and software licensing, partially offset by an increase of $6.0 million in third-party media fees.

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For the year ended December 31, 2023, Other costs decreased compared to 2022, primarily due to lower facility related

expenses associated with real estate sales and lower promotion expenses.

The following table provides the breakout of Selling, general and administrative expenses for the years ended December

31, 2023 and 2022:

For the year ended December 31, 2023, Compensation and benefits costs decreased compared to 2022, primarily due to

lower payroll expense of $24.0 million, driven by a decrease in headcount tied to ongoing cost control initiatives and lower

commissions related to revenue performance, and to a lesser extent, lower employee benefit costs of $10.3 million, including a

decrease in employer 401(k) plan matching contributions, which were suspended in the third quarter of 2022.

For the year ended December 31, 2023, Outside services and other costs, which include services fulfilled by third parties,

decreased compared to 2022, due to a decrease in costs related to technology, promotions, and professional services.

For the year ended December 31, 2023, Depreciation and amortization expense decreased compared to 2022, reflecting the

impact of fewer print facilities in 2023 compared to 2022.

For the year ended December 31, 2023, Integration and reorganization costs decreased compared to 2022, mainly due to a

decrease in severance costs of $30.7 million and a decrease in other reorganization-related costs of $19.3 million. The decrease

in other costs was primarily due to the reversal of withdrawal liabilities related to multiemployer pension plans of $6.4 million

based on settlement of the withdrawal liability, and the absence in 2023 of an accrual of $8.6 million made in 2022 related to a

multiemployer pension plan, as well as lower facility and consolidation costs in 2023 compared to 2022.

For the years ended December 31, 2023 and 2022, we recognized net gains on the sale of assets of $38.9 million and

$6.7 million, respectively, primarily related to sales of production facilities as part of our plan to monetize non-strategic assets.

Domestic Gannett Media segment Adjusted EBITDA

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

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

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

For the year ended December 31, 2023, the decrease in Domestic Gannett Media segment Adjusted EBITDA compared to

2022 was primarily attributable to the changes discussed above. In addition, for the year ended December 31, 2023, the

decrease in Non-operating pension income compared to 2022 was primarily due to a decrease in the expected return on plan

assets mainly driven by a decrease in assets following the annuity contract entered into during 2022 related to the GR Plan.

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Newsquest segment 2024 compared to 2023

A summary of our Newsquest segment results comparing the year ended December 31, 2024 to the year ended December

31, 2023 is presented below:

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

Revenues

The following table provides the breakout of Revenues by category for the years ended December 31, 2024 and 2023:

(a) For the years ended December 31, 2024 and 2023, included Commercial printing revenues of $10.2 million and $8.0 million, respectively.

For the year ended December 31, 2024, Digital advertising revenues increased compared to 2023, primarily due to an

increase in national and local display revenues, partially offset by lower spend on employment notifications.

For the year ended December 31, 2024, Digital marketing services revenues decreased compared to 2023, driven by a

decrease in client counts.

For the year ended December 31, 2024, Digital-only subscription revenues increased compared to 2023, primarily driven

by the increase in digital-only paid subscriptions. Refer to "Key Performance Indicators" below for further discussion of digital-

only paid subscriptions.

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For the year ended December 31, 2024, Print advertising revenues decreased compared to 2023, primarily due to lower

spend on classified advertisements.

For the year ended December 31, 2024, Commercial and other revenues increased compared to 2023, primarily due to an

increase in customer spend.

Operating expenses

The following table provides the breakout of Operating costs for the years ended December 31, 2024 and 2023:

For the year ended December 31, 2024, Newsprint and ink costs decreased compared to 2023, primarily due to a decrease

in the cost of newsprint of approximately of $1.8 million, as well as volume declines.

For the year ended December 31, 2024, Compensation and benefits costs increased compared to 2023, primarily due to

higher headcount for production facilities.

For the year ended December 31, 2024, Other costs, increased compared to 2023, primarily associated with the increase in

digital advertising revenues.

The following table provides the breakout of Selling, general and administrative expenses for the years ended December

31, 2024 and 2023:

For the year ended December 31, 2024, Outside services and other costs decreased compared to 2023, primarily due to

lower technology related expenses of approximately $0.8 million and lower bad debt expense of approximately $0.2 million.

For the year ended December 31, 2024, Integration and reorganization costs decreased compared to 2023, primarily due to

a decrease in severance costs of $0.9 million and a decrease in other reorganization-related costs of $1.4 million due to the

reversal of a withdrawal liability in 2024 related to a pension plan based on settlement of the withdrawal liability.

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Newsquest segment Adjusted EBITDA

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

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

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

For the year ended December 31, 2024, the increase in Newsquest segment Adjusted EBITDA compared to 2023 was

primarily attributable to the changes discussed above.

Newsquest segment 2023 compared to 2022

A summary of our Newsquest segment results comparing the year ended December 31, 2023 to the year ended December

31, 2022 is presented below:

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Revenues

The following table provides the breakout of Revenues by category for the years ended December 31, 2023 and 2022:

(a) For the years ended December 31, 2023 and 2022, included Commercial printing revenues of $8.0 million and $7.0 million, respectively.

For the year ended December 31, 2023, Digital advertising revenues decreased compared to 2022, primarily due to lower

spend on employment notifications, partially offset by the impact of an acquisition in the first quarter of 2022.

For the year ended December 31, 2023, Digital other revenues increased compared to 2022, primarily due to higher digital

syndication revenues.

For the year ended December 31, 2023, Print advertising revenues decreased compared to 2022, primarily due to a

reduction in spend driven by the ongoing decline associated with secular trends reflecting the shift to digital platforms and

lower spend on real estate, employment, and automobile classified advertisements, partially offset by an increase reflecting the

impact of an acquisition in the first quarter of 2022 and higher spend on legal notifications.

For the year ended December 31, 2023, Print circulation revenues increased compared to 2022, primarily due to the impact

of an acquisition in the first quarter of 2022.

Operating expenses

The following table provides the breakout of Operating costs for the years ended December 31, 2023 and 2022:

For the year ended December 31, 2023, Newsprint and ink costs decreased compared to 2022, primarily due to a decline

associated with lower volume due to the decline in revenues and a reduction in the cost of newsprint.

For the year ended December 31, 2023, Distribution costs decreased compared to 2022, primarily due to a decline

associated with lower revenues.

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For the year ended December 31, 2023, Compensation and benefits costs decreased compared to 2022, primarily due to

lower payroll and employee benefit expenses driven by integration savings due to decreased headcount associated with an

acquisition in the first quarter of 2022.

For the year ended December 31, 2023, Outside services costs, which includes professional services fulfilled by third

parties, media fees and other digital costs, and paid search and ad serving services, decreased compared to 2022, due to lower

miscellaneous expenses driven by cost control initiatives.

The following table provides the breakout of Selling, general and administrative expenses for the years ended December

31, 2023 and 2022:

For the year ended December 31, 2023, Compensation and benefits costs decreased compared to 2022, primarily due to

lower payroll and employee benefit expenses driven by a reduction in headcount tied to integration activities associated with an

acquisition in the first quarter of 2022, as well as ongoing cost control initiatives.

For the year ended December 31, 2023, Outside services and other costs decreased compared to 2022, primarily due to a

reduction in technology spend tied to integration activities associated with an acquisition in the first quarter of 2022.

For the year ended December 31, 2023, Depreciation and amortization expense increased compared to 2022, mainly due to

higher accelerated depreciation as a result of exiting space and higher amortization of capitalized software.

For the year ended December 31, 2023, Integration and reorganization costs decreased compared to 2022, mainly due to a

decrease in severance costs of $2.5 million and a decrease in other reorganization-related costs of $0.2 million.

Newsquest segment Adjusted EBITDA

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

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

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

For the year ended December 31, 2023, the increase in Newsquest segment Adjusted EBITDA compared to 2022 was

primarily attributable to the changes discussed above. In addition, for the year ended December 31, 2023, the decrease in Non-

operating pension income compared to 2022 was primarily due to an increase in interest rates.

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Digital Marketing Solutions segment 2024 compared to 2023

A summary of our DMS segment results comparing the year ended December 31, 2024 to the year ended December 31,

2023 is presented below:

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

(a)Digital revenues are solely generated by digital marketing services revenues.

Revenues

For the year ended December 31, 2024, Digital revenues remained essentially flat compared to 2023, primarily due to a

decline in revenues from non-core products which were sunset, offset by growth in the core direct business. Core platform

average revenue per user ("Core platform ARPU") increased 5.3% for the year ended December 31, 2024. Refer to "Key

Performance Indicators" below for further discussion of Core platform ARPU.

Operating expenses

The following table provides the breakout of Operating costs for the years ended December 31, 2024 and 2023:

For the year ended December 31, 2024, Outside services costs increased compared to 2023, due to an increase in expenses

associated with third-party media fees driven by higher costs of search.

For the year ended December 31, 2024, Compensation and benefits costs increased compared to 2023, primarily due to

higher wages.

The following table provides the breakout of Selling, general and administrative expenses for the years ended December

31, 2024 and 2023:

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For the year ended December 31, 2024, Compensation and benefits costs increased compared to 2023, primarily due to

higher payroll expense of $1.7 million, driven by higher wages, and higher employee benefit costs of $0.8 million.

For the year ended December 31, 2024, Outside services and other costs decreased compared to 2023, mainly due to lower

bad debt expense of $0.5 million, partially offset by an increase in miscellaneous expenses, including higher costs associated

with outsourcing and professional services.

DMS segment Adjusted EBITDA

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

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

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

For the year ended December 31, 2024, the decrease in DMS segment Adjusted EBITDA compared to 2023 was primarily

attributable to the changes discussed above. In addition, for the year ended December 31, 2024, the change in Other non-

operating expense compared to 2023, was mainly due to foreign currency fluctuations.

Digital Marketing Solutions segment 2023 compared to 2022

A summary of our DMS segment results comparing the year ended December 31, 2023 to the year ended December 31,

2022 is presented below:

(a)Digital revenues are solely generated by digital marketing services revenues.

Revenues

For the year ended December 31, 2023, Digital revenues increased compared to 2022, primarily due to growth in the core

direct business, including growth in revenues associated with both local and multi-location customers, and an increase in Core

platform ARPU of 6.5% for the year ended December 31, 2023, partially offset by the impact of the sunset of non-core

products. Refer to "Key Performance Indicators" below for further discussion of Core platform ARPU.

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Operating expenses

The following table provides the breakout of Operating costs for the years ended December 31, 2023 and 2022:

For the year ended December 31, 2023, Outside services costs increased compared to 2022, due to an increase in expenses

associated with third-party media fees driven by a corresponding increase in revenues.

For the year ended December 31, 2023, Compensation and benefits costs increased compared to 2022, primarily due to an

increase in payroll expense driven by higher headcount.

For the year ended December 31, 2023, Other costs decreased compared to 2022, primarily due to lower facility related

expenses, mainly as a result of exiting space associated with the sunset of non-core products.

The following table provides the breakout of Selling, general and administrative expenses for the years ended December

31, 2023 and 2022:

For the year ended December 31, 2023, Compensation and benefits costs increased compared to 2022, primarily due to an

increase in payroll expense of $2.9 million driven by a higher bonus accrual, partially offset by lower employee benefit costs of

$1.5 million, mainly due to a decline in employer 401(k) plan matching contributions, which were suspended in the third

quarter of 2022.

For the year ended December 31, 2023, Outside services and other costs decreased compared to 2022, due to a decrease in

various miscellaneous expenses.

For the year ended December 31, 2023, Depreciation and amortization expense decreased compared to 2022, primarily due

to a decrease in amortization expense, resulting from the impact of intangibles becoming fully amortized in the fourth quarter of

2022, partially offset by an increase in depreciation expense related to capitalized software.

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DMS segment Adjusted EBITDA

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

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

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

For the year ended December 31, 2023, the decrease in DMS segment Adjusted EBITDA compared to 2022 was primarily

attributable to the changes discussed above. In addition, for the year ended December 31, 2023, Other non-operating expense,

net decreased compared to 2022, mainly due to foreign currency fluctuations.

Corporate and other category 2024 compared to 2023

For the year ended December 31, 2024, Corporate and other revenues were $5.7 million compared to $6.3 million for the

year ended December 31, 2023.

The following table provides the breakout of Operating expenses for the years ended December 31, 2024 and 2023:

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

For the year ended December 31, 2024, Corporate and other operating expenses increased compared to 2023, primarily due

to an increase in Asset impairments of approximately $46.0 million related to the write-off of the McLean, Virginia operating

lease right-of-use asset and the associated leasehold improvements, an increase in Depreciation and amortization expense,

mainly driven by software and capitalized labor, an increase in Other operating expenses, mainly driven by third-party fees

expensed related to the refinancing of our debt in October 2024, and an increase in Selling, general and administrative

expenses, mainly driven by higher legal fees and an increase in outsourcing costs, partially offset by lower compensation and

benefits costs and lower facility related costs. In addition, the increase in operating expenses also reflected the absence in 2024

of the $1.4 million gain on the sale of intellectual property incurred in the first quarter of 2023. The increases noted above were

offset by a decrease in Operating costs, mainly driven by lower credit card fees and lower content allocation costs, partially

offset by higher compensation and benefits costs, and a decrease in Integration and reorganization-related costs, primarily due

to a decrease in severance costs of $4.6 million, partially offset by an increase in other reorganization-related costs of

$3.2 million, mainly driven by higher facility consolidation costs.

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Corporate and other category 2023 compared to 2022

For the year ended December 31, 2023, Corporate and other revenues were $6.3 million compared to $5.4 million for the

year ended December 31, 2022.

The following table provides the breakout of Operating expenses for the years ended December 31, 2023 and 2022:

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

For the year ended December 31, 2023, Corporate and other operating expenses decreased compared to 2022, primarily

due to a decrease in Selling, general and administrative expenses, mainly driven by a decrease of $29.3 million in payroll and

employee benefit costs, a decrease in Integration and reorganization-related costs, primarily due to a decrease in severance costs

of $6.2 million and a decrease in other reorganization-related costs of $4.3 million, mainly due to a decrease in system

integration costs and an increase in the gain on sale of assets driven by a $1.4 million gain on the sale of intellectual property,

partially offset by an increase in Operating costs.

LIQUIDITY AND CAPITAL RESOURCES

Our primary cash requirements are for working capital, debt obligations, and capital expenditures.

We expect to fund our operations and debt service requirements through cash provided by our operating activities. We

expect we will have adequate capital resources and liquidity to meet our ongoing working capital needs, borrowing obligations,

and all required capital expenditures for at least the next twelve months and beyond. However, a further economic downturn or

an increased rate of revenue declines would negatively impact our revenue, cash provided by operating activities and liquidity.

We continue to implement cost reduction initiatives to reduce our ongoing level of operating expense. We believe our ability to

realize benefits from our cost reduction initiatives will be necessary to offset the continued secular decline in our legacy print

business revenue streams. We believe that these measures are important in response to the overall challenging macroeconomic

environment that we are facing. Refer to "Overview - Macroeconomic Environment" above for further discussion.

Details of our cash flows are included in the table below:

Cash flows provided by operating activities: Our largest source of cash provided by operating activities is cash generated

through circulation subscribers and advertising and marketing services, primarily from local and national print advertising, as

well as retail, classified, and online revenues. Additionally, we generate cash through commercial printing and delivery services

to third parties, and events. Our primary uses of cash from our operating activities include compensation, newsprint, delivery,

and outside services.

For the year ended December 31, 2024, cash flows provided by operating activities were $100.3 million compared to $94.6

million for the year ended December 31, 2023. The increase in cash flows provided by operating activities was primarily due to

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a decrease in severance payments, a decrease in interest payments, an increase in accounts payable due to overall timing of

payments and a decrease in compensation cost, partially offset by third-party fees expensed related to the refinancing of our

debt in 2024, an increase in contributions to our pension and other postretirement benefit plans, and lower cash receipts related

to deferred revenues.

Cash flows (used for) provided by investing activities: For the year ended December 31, 2024, cash flows used for

investing activities were $28.0 million compared to $47.0 million in cash flows provided by investing activities for the year

ended December 31, 2023. The increase in cash flows used for investing activities was primarily due to an increase in purchases

of property, plant, and equipment of $11.4 million and a decrease in proceeds from the sale of real estate and other non-strategic

assets of $64.3 million.

Cash flows used for financing activities: For the year ended December 31, 2024, cash flows used for financing activities

were $68.9 million compared to $135.5 million for the year ended December 31, 2023. The decrease in cash used for financing

activities was primarily due to the higher borrowings of long-term debt, net of repayments of $326.8 million, offset by higher

repayments of convertible debt, net of borrowings of $248.1 million and $8.9 million in payments of deferred financing costs.

Debt

As of December 31, 2024, the carrying value of our outstanding debt totaled $1.080 billion, which consisted of $830.1

million related to the 2029 Term Loan Facility, $215.9 million related to the 2031 Notes (as defined below), and $33.8 million

related to the 2027 Notes (as defined below). Our 2029 Term Loan Facility, 2031 Notes, and 2027 Notes all contain usual and

customary covenants and events of default. As of December 31, 2024, we were in compliance with all such covenants and

obligations. Refer to Note 8 — Debt for additional discussion regarding our debt.

Term Loans

On October 15, 2024 (the "Closing Date"), we entered into an Amendment and Restatement Agreement (the "Amendment

and Restatement Agreement") among us, as a guarantor, Gannett Holdings LLC ("Gannett Holdings"), as the borrower (in such

capacity, the "Borrower"), certain subsidiaries of the Borrower as guarantors, the lenders party thereto, Citibank, N.A., as the

existing collateral agent and administrative agent for the lenders, and Apollo Administrative Agency LLC, as the successor

collateral agent and administrative agent for the lenders, which amended and restated our existing First Lien Credit Agreement

dated as of October 15, 2021 (as amended, supplemented or otherwise modified from time to time prior to the Closing Date, the

"Existing Credit Agreement"; the Existing Credit Agreement, as amended and restated by the Amendment and Restatement

Agreement, the "Amended Credit Agreement") by and among us, as guarantor, the Borrower, certain subsidiaries of the

Borrower as guarantors and Citibank, N.A., as administrative agent and collateral agent. The Amended Credit Agreement

provides for the 2029 Term Loan Facility, which refinanced and replaced our Senior Secured Term Loan.

The 2029 Term Loan Facility bears interest at an annual rate equal, at the Borrower's option, to either (a) an alternate base

rate (which shall not be less than 2.50% per annum) plus a margin equal to 4.00% per annum or (b) Adjusted Term SOFR

(which shall not be less than 1.50%) plus a margin equal to 5.00% per annum. The 2029 Term Loan Facility will mature on

October 15, 2029 and will be freely prepayable without penalty.

The 2029 Term Loan Facility is amortized at a rate of $17.0 million per quarter, with such rate to be adjusted upon the

borrowing of any delayed-draw term loans to the extent necessary to cause such delayed-draw term loans to be fungible with

the initial term loans under the 2029 Term Loan Facility. In addition, we are required to repay the 2029 Term Loan Facility

from time to time with (i) the proceeds of non-ordinary course asset sales and casualty and condemnation events, (ii) the

proceeds of indebtedness that is not otherwise permitted under the 2029 Term Loan Facility and (iii) the aggregate amount of

cash and cash equivalents on hand at the Company and our restricted subsidiaries in excess of $100.0 million as of the last day

of any fiscal year of the Company (beginning with the fiscal year ended December 31, 2024).

For the year ended December 31, 2024, the Company prepaid $350.4 million, including quarterly amortization payments, on

the Senior Secured Term Loan, and prepaid $0.5 million on the 2029 Term Loan Facility, which were classified as financing

activities in the Consolidated statements of cash flows.

2026 Senior Notes

In March 2024, we entered into a privately negotiated agreement with certain holders of our 2026 Senior Notes, and

repurchased $13.0 million of principal of our outstanding 2026 Senior Notes at a discount to par value.

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On October 15, 2024, the Company and Gannett Holdings completed an offer to exchange (the "2026 Senior Notes

Exchange Offer") any and all outstanding 2026 Senior Notes for, at the election of each holder of 2026 Senior Notes, either (a)

(i) term loans under the 2029 Term Loan Facility and (ii) an upfront fee equal to 1.5% of such term loans (together with the

term loans, the "Loan Option Consideration"); or (b) cash (the "Cash Option Consideration").

Pursuant to the 2026 Senior Notes Exchange Offer, $274.7 million in aggregate principal amount of the 2026 Senior Notes

were tendered and accepted for exchange and subsequently canceled. 2026 Senior Notes in an aggregate principal amount of

$40.4 million were exchanged for the Loan Option Consideration and 2026 Senior Notes in an aggregate principal amount of

$234.3 million were exchanged for the Cash Option Consideration. Pursuant to the 2026 Senior Notes Exchange Offer, we paid

aggregate cash consideration of $234.9 million (including the Cash Option Consideration and the upfront fee included in the

Loan Option Consideration).

On December 4, 2024, Gannett Holdings redeemed the remaining $3.9 million in aggregate principal amount of the 2026

Senior Notes outstanding using the proceeds of non-ordinary course asset sales and cash on hand.

Senior Secured Convertible Notes due 2027, Senior Secured Convertible Notes due 2031, and the Convertible Notes

Exchange

On October 15, 2024, we completed privately negotiated transactions with certain holders of our 6.000% Senior Secured

Convertible Notes due 2027 (the "2027 Notes") pursuant to which we (i) repurchased a total of $223.6 million in aggregate

principal amount of 2027 Notes for cash at a rate of $1,110 per $1,000 principal amount of 2027 Notes, for aggregate cash

consideration of $248.2 million and (ii) exchanged a total of $223.6 million in aggregate principal amount of 2027 Notes for

new 6.000% Senior Secured Convertible Notes due 2031 (the "2031 Notes" and such repurchase and exchange, collectively, the

"Convertible Notes Exchange").

Additionally, on October 15, 2024, we issued and sold $110,000 in aggregate principal amount of 2031 Notes in a privately

negotiated transaction (the "2031 Notes Sale").

The 2031 Notes were issued pursuant to an indenture, dated as of October 15, 2024, among us, the guarantors party thereto,

U.S. Bank Trust Company, National Association, as trustee, and Alter Domus Products Corp, as collateral agent.

Following the completion of the Convertible Notes Exchange and the 2031 Notes Sale, we had outstanding $38.1 million

aggregate principal amount of 2027 Notes and $223.7 million aggregate principal amount of 2031 Notes.

Interest on the 2027 Notes and 2031 Notes is payable semi-annually in arrears, and the 2027 Notes and 2031 Notes mature

on December 1, 2027, and December 1, 2031, respectively, unless earlier repurchased or converted. The 2027 Notes and 2031

Notes may be converted at any time by the Holders into cash, shares of our Common Stock or any combination of cash and

Common Stock, at the Company's election. The initial conversion rate for both the 2027 Notes and the 2031 Notes is 200 shares

of Common Stock per $1,000 principal amount of the 2027 Notes and the 2031 Notes, respectively, which is equal to a

conversion price of $5.00 per share of Common Stock (the "Conversion Price").

For the year ended December 31, 2024, no shares of Common Stock were issued upon conversion, exercise, or satisfaction

of the required conditions of the 2027 Notes or the 2031 Notes.

Additional information

We continue to evaluate our results of operations, liquidity and cash flows, and as part of these measures, we have taken

steps to manage cash outflow by rationalizing expenses and implementing various cost management initiatives. We do not

presently pay a quarterly dividend and there can be no assurance that we will pay dividends in the future. In addition, the terms

of our indebtedness, including the 2029 Term Loan Facility and the 2031 Notes Indenture have terms that restrict our ability to

pay dividends.

On February 1, 2022, our Board of Directors authorized the repurchase of up to $100 million (the "Stock Repurchase

Program") of our Common Stock. Repurchases may be made from time to time through open market purchases or privately

negotiated transactions, pursuant to one or more plans established pursuant to Rule 10b5-1 under the Securities Exchange Act

of 1934, as amended, or by means of one or more tender offers, in each case, as permitted by securities laws and other legal

requirements. The amount and timing of the purchases, if any, will depend on a number of factors, including, but not limited to,

the price and availability of our shares, trading volume, capital availability, our performance and general economic and market

conditions. The Stock Repurchase Program may be suspended or discontinued at any time. Further, future repurchases under

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our Stock Repurchase Program may be subject to various conditions under the terms of our various debt instruments and

agreements, unless an exception is available or we obtain a waiver or similar relief.

During the year ended December 31, 2024, we did not repurchase any shares of Common Stock under the Stock

Repurchase Program. As of December 31, 2024, the remaining authorized amount under the Stock Repurchase Program was

approximately $96.9 million. The Company does not currently anticipate repurchasing any shares of Common Stock during the

first quarter of 2025.

We expect our capital expenditures during the year ended December 31, 2025 to total approximately $55 million to

$65 million. These capital expenditures are anticipated to be primarily comprised of projects related to digital product

development, costs associated with our print and technology systems, and system upgrades.

Our leverage may adversely affect our business and financial performance and restricts our operating flexibility. The level

of our indebtedness and our ongoing cash flow requirements may expose us to a risk that a substantial decrease in operating

cash flows due to, among other things, continued or additional adverse economic conditions or adverse developments in our

business, could make it difficult for us to meet the financial and operating covenants contained in our 2029 Term Loan Facility,

the 2031 Notes, and the 2027 Notes. In addition, our leverage may limit cash flow available for general corporate purposes such

as capital expenditures as well as share repurchases and acquisitions and our flexibility to react to competitive, technological,

and other changes in our industry and economic conditions generally. We continue to closely monitor economic factors,

including, but not limited to, the current inflationary market and changing interest rates, and we expect to continue to take the

steps necessary to appropriately manage liquidity.

As of December 31, 2024, we had no off-balance sheet arrangements that are reasonably likely to have a material current or

future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

Contractual obligations and commitments

We enter into various contractual arrangements as a part of our operations. Many of these contractual obligations are

discussed in the notes to our Consolidated financial statements. As of December 31, 2024, material obligations discussed in the

notes to our Consolidated financial statements included (i) principal payments on our long-term debt discussed in Note 8 —

Debt, (ii) operating leases discussed in Note 4 — Leases, and (iii) pension and postretirement benefits discussed in Note 9 —

Pensions and other postretirement benefit plans. We anticipate interest payments associated with our long-term debt totaling

$91.7 million in 2025, $84.3 million in 2026 and $201.9 million thereafter. Due to uncertainty with respect to the timing of

future cash flows associated with unrecognized tax benefits at December 31, 2024, we are unable to make reasonably reliable

estimates of the period of cash settlement. See Note 11 — Income taxes to the Consolidated financial statements for a further

discussion of income taxes.

In addition, we have purchase obligations which include digital licenses and information technology services, professional

services, interactive marketing agreements, and other legally binding commitments. As of December 31, 2024, we had future

purchase obligations totaling $85.7 million due in 2025, $55.4 million due in 2026, and $25.4 million due thereafter. We have

certain contracts to purchase newsprint that require us to purchase a percentage of our total requirements for production at

market rate. Since the quantities purchased annually under these contracts are not fixed, the amount of the related payments for

these purchases is excluded from our future purchase obligations. Amounts for which we are liable under purchase orders

outstanding at December 31, 2024 are reflected in the Consolidated balance sheets as Accounts payable and accrued liabilities.

We also have other noncurrent liabilities totaling $2.1 million due in 2025, $1.8 million due in 2026, and $3.7 million due

thereafter.

NON-GAAP FINANCIAL MEASURES

A non-GAAP financial measure is generally defined as one that purports to measure historical or future financial

performance, financial position, or cash flows, but excludes or includes amounts that would not be so excluded or included in

the most comparable U.S. generally accepted accounting principles ("U.S. GAAP") measure.

Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial performance measures we believe offer a useful

view of the overall operations of our business. These non-GAAP financial performance measures, which may not be

comparable to, and may be defined differently than, similarly titled measures used or reported by other companies, should not

be considered in isolation from or as a substitute for the related U.S. GAAP measures and should be read together with financial

information presented on a U.S. GAAP basis.

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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, (5) Loss on

convertible notes derivative, (6) Depreciation and amortization, (7) Integration and reorganization costs, (8) 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, (13) Other non-operating (income) expense, net, and (14) Non-

recurring items. We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Revenues.

Management's use of Adjusted EBITDA and Adjusted EBITDA margin

Adjusted EBITDA and Adjusted EBITDA margin are not measurements of financial performance under U.S. GAAP and

should not be considered in isolation or as an alternative to net income (loss), margin, or any other measure of performance or

liquidity derived in accordance with U.S. GAAP. We believe these non-GAAP financial performance measures, as we have

defined them, are helpful in identifying trends in our day-to-day performance because the items excluded have little or no

significance on our day-to-day operations. These measures provide an assessment of core expenses and afford management the

ability to make decisions which are expected to facilitate meeting current financial goals as well as achieve optimal financial

performance.

We use Adjusted EBITDA and Adjusted EBITDA margin as measures of our day-to-day operating performance, which is

evidenced by the publishing and delivery of news and other media and excludes certain expenses that may not be indicative of

our day-to-day business operating results.

Limitations of Adjusted EBITDA and Adjusted EBITDA margin

Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools. They should not be viewed in

isolation or as a substitute for U.S. GAAP measures of earnings. Material limitations in making the adjustments to our earnings

to calculate Adjusted EBITDA and Adjusted EBITDA margin and using these non-GAAP financial measures as compared to

U.S. GAAP net income (loss) include: the exclusion of the cash portion of interest/financing expense, income tax (benefit)

provision, and charges related to asset impairments, which are items that may significantly affect our financial results.

Management believes these items are important in evaluating our performance, results of operations, and financial position.

We use non-GAAP financial performance measures to supplement our U.S. GAAP results in order to provide a more complete

understanding of the factors and trends affecting our business.

Adjusted EBITDA and Adjusted EBITDA margin are not alternatives to net income (loss), margin, or any other measure of

performance or liquidity derived in accordance with U.S. GAAP. As such, they should not be considered or relied upon as

substitutes or alternatives for any such U.S. GAAP financial measures. We strongly urge you to review the reconciliation of Net

income (loss) attributable to Gannett to Adjusted EBITDA and Adjusted EBITDA margin along with our Consolidated

financial statements included elsewhere in this Annual Report on Form 10-K. We also strongly urge you not to rely on any

single financial performance measure to evaluate our business. In addition, because Adjusted EBITDA and Adjusted EBITDA

margin are not measures of financial performance under U.S. GAAP and are susceptible to varying calculations, the Adjusted

EBITDA and Adjusted EBITDA margin measures as presented in this report may differ from and may not be comparable to

similarly titled measures used by other companies.

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

to Gannett margin to Adjusted EBITDA margin:

(a)For the years ended December 31, 2024, 2023 and 2022, Integration and reorganization-related costs mainly reflect severance-related expenses and other

reorganization-related costs, designed primarily to right-size the Company's employee base, consolidate facilities and improve operations.

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KEY PERFORMANCE INDICATORS

A key performance indicator ("KPI") is generally defined as a quantifiable measurement or metric used to gauge

performance, specifically to help determine strategic, financial, and operational achievements, especially compared to those of

similar businesses.

We define Digital-only ARPU as digital-only subscription average monthly revenues divided by the average digital-only

paid subscriptions within the respective period. We define Core platform ARPU as core platform average monthly revenues

divided by average monthly customer count within the period. We define Core platform revenues as revenue derived from

customers utilizing our proprietary digital marketing services platform that are sold by either our direct or local market teams.

Management believes Digital-only ARPU, Core platform ARPU, digital-only paid subscriptions, Core platform revenues

and core platform average customer count are KPIs that offer useful information in understanding consumer behavior, trends in

our business, and our overall operating results. Management utilizes these KPIs to track and analyze trends across our

segments.

The following tables provide information regarding certain KPIs for the Domestic Gannett Media, Newsquest and DMS

segments:

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with U.S. GAAP requires management to make decisions based on

estimates, assumptions, and factors it considers relevant to the circumstances. Such decisions include the selection of applicable

principles and the use of judgment in their application, the results of which could differ from those anticipated.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill is tested for impairment annually on November 30 and between annual tests if events occur or circumstances

change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. We have the option

to qualitatively assess whether it is more likely than not that the fair value of a reporting unit is less than its carrying value,

although we did not elect to use this option for the Company's evaluation as of November 30, 2024. If we elect to perform a

qualitative assessment and conclude it is more likely than not that the fair value of the reporting unit is equal to or greater than

its carrying value, no further assessment of that reporting unit's goodwill is necessary; otherwise goodwill must be tested for

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impairment. In the quantitative test, we are required to determine the fair value of each reporting unit and compare it to the

carrying amount of the reporting unit. Fair value of the reporting unit is defined as the price that would be received to sell the

unit as a whole in an orderly transaction between market participants at the measurement date. We generally determine the fair

value of a reporting unit using a combination of a discounted cash flow analysis and a market-based approach. Estimates of fair

value include inputs that are subjective in nature, involve uncertainties, and involve matters of significant judgment that are

made at a specific point in time. Changes in key assumptions from period to period could significantly affect the estimates of

fair value. Significant assumptions used in the fair value estimates include projected revenues and related growth rates over

time, projected operating cash flow margins, discount rates, and future economic and market conditions. If the carrying value of

the reporting unit exceeds the estimate of fair value, we calculate the impairment as the excess of the carrying value of goodwill

over its implied fair value.

While the Company believes its judgments represent reasonably possible outcomes based on available facts and

circumstances, adverse changes to the assumptions, including those related to macroeconomic factors, comparable public

company trading values and prevailing conditions in the capital markets, could lead to future declines in the fair value of a

reporting unit. The Company continually evaluates whether current factors or indicators, such as prevailing conditions in the

business environment, capital markets or the economy generally, and actual or projected operating results, require the

performance of an interim impairment assessment of goodwill, as well as other long-lived assets. For example, any significant

shortfall, now or in the future, in advertising revenues or subscribers and/or consumer acceptance of our products could lead to

a downward revision in the fair value of certain reporting units.

Newspaper mastheads (newspaper titles) are not subject to amortization as it has been determined that the useful lives of

such mastheads are indefinite. Newspaper mastheads are tested for impairment annually, or more frequently if events or

changes in circumstances indicate the asset might be impaired. The impairment test consists of a comparison of the fair value of

each group of mastheads with their carrying amount. We used a relief from royalty approach, which utilizes a discounted cash

flow model to determine the fair value of newspaper mastheads. Our judgments and estimates of future operating results in

determining the reporting unit fair values are consistently applied in determining the fair value of mastheads.

The performance of our annual impairment analysis resulted in no impairments to goodwill or indefinite-lived intangible

assets for the year ended December 31, 2024. See Note 6 — Goodwill and intangible assets for further discussion. If our future

operating results are not in line with the cash flow forecasts underlying our impairment analysis, we could have an impairment

of our goodwill or intangible assets in the future and such impairment could materially affect our operating results.

Long-Lived Assets

We evaluate the carrying value of property, plant, and equipment and finite-lived intangible assets for impairment

whenever events or changes in circumstances indicate that the carrying value of an asset group may not be recoverable. The

evaluation is performed by asset group, which is the lowest level of identifiable cash flows independent of other assets. The

assessment of recoverability is based on management's estimates by comparing the sum of the estimated undiscounted cash

flows generated by the underlying asset groups to its carrying value of the asset groups to determine whether an impairment

existed at its lowest level of identifiable cash flows. If the carrying amount of the asset group is greater than the expected

undiscounted cash flows to be generated by the asset group, an impairment is recognized to the extent the carrying value of

such asset group exceeds its fair value. The market approach is used in some cases to estimate the fair value of property, plant,

and equipment, particularly when there is a change in the use of an asset.

As part of ongoing cost-efficiency programs, we have ceased a number of print operations. Pursuant to these actions,

certain assets and real estate to be retired have been assessed for impairment.

Revenue Recognition

Our contracts with customers sometimes include promises to transfer multiple products and services to a customer.

Revenue from sales agreements that contain multiple performance obligations are allocated to each obligation based on the

relative standalone selling price. We determine standalone selling prices based on observable prices charged to customers. See

Note 2 — Summary of significant accounting policies for further discussion.

Income Taxes

We are subject to income taxes in the U.S. and various foreign jurisdictions in which we operate and record our tax

provision for the anticipated tax consequences in our reported results of operations. Tax laws are complex and subject to

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different interpretations by the taxpayer and respective government taxing authorities. Significant judgment is required in

determining our tax expense and in evaluating our tax positions, including evaluating uncertainties in the application of tax laws

and regulations.

We account for income taxes under the provisions of ASC 740, "Income Taxes" ("ASC 740"). Under ASC 740, deferred

tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and

liabilities using tax rates in effect for the year in which the differences are expected to affect taxable income. The assessment of

the realizability of deferred tax assets involves a high degree of judgment and complexity. Valuation allowances are established

when necessary to reduce deferred tax assets to the amounts that are expected to be realized. When we determine that it is more

likely than not that we will be able to realize our deferred tax assets in the future in excess of our net recorded amount, an

adjustment to the deferred tax asset would be made and reflected either in income or as an adjustment to goodwill. This

determination will be made by considering various factors, including our expected future results, that in our judgment will make

it more likely than not that these deferred tax assets will be realized.

Our actual effective tax rate and income tax expense could vary from estimated amounts due to the future impacts of

various items, including changes in income tax laws, tax planning and our forecasted financial condition, and results of

operations in future periods. Although we believe current estimates are reasonable, actual results could differ from these

estimates.

ASC 740 prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its

financial statements uncertain tax positions that a company has taken or expects to take on a tax return. Under ASC 740, the

financial statements reflect expected future tax consequences of such positions presuming the taxing authorities' full knowledge

of the position and all relevant facts, but without considering time values. Recognized income tax positions are measured at the

largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in

the period in which the change in judgment occurs.

Pension and Postretirement Liabilities

ASC 715, "Compensation—Retirement Benefits," requires recognition of an asset or liability in the consolidated balance

sheet reflecting the funded status of pension and other postretirement benefit plans, such as retiree health and life, with current-

year changes in the funded status recognized in the statement of stockholders' equity.

The determination of pension plan obligations and expense is based on a number of actuarial assumptions. Two critical

assumptions are the expected long-term rate of return on plan assets and the discount rate applied to pension plan obligations.

For other postretirement benefit plans, which provide for certain health care and life insurance benefits for qualifying retired

employees and which are not funded, critical assumptions in determining other postretirement benefit obligations and expense

are the discount rate and the assumed health care cost-trend rates.

Our pension plans had assets valued at $1.7 billion as of December 31, 2024 and the plans' benefit obligation was $1.5

billion, resulting in the plans being 110% funded at such date.

For 2024, the assumption used for the funded status discount rate was 5.75% for our principal retirement plan obligations.

As an indication of the sensitivity of pension liabilities to the discount rate assumption, a 50 basis point reduction in the

discount rate at the end of 2024 would have increased plan obligations by approximately $28.3 million. A 50 basis point change

in the discount rate used to calculate the benefit for 2024 would have decreased total pension plan expense for 2024 by

approximately $2.5 million. To determine the expected long-term rate of return on pension plan assets, we consider the current

and expected asset allocations, as well as historical and expected returns on various categories of plan assets, input from the

actuaries and investment consultants, and long-term inflation assumptions. For our principal retirement plan, we used an

assumption of 5.25% for our expected return on pension plan assets for 2024. If we were to reduce our expected rate of return

assumption by 50 basis points, the benefit for 2024 would have increased by approximately $4.4 million.