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What changed in USA TODAY Co., Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of USA TODAY Co., Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+645 added−553 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-23)

Top changes in USA TODAY Co., Inc.'s 2023 10-K

645 paragraphs added · 553 removed · 370 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

105 edited+100 added−48 removed33 unchanged
Biggest changeFor a detailed discussion of certain factors that could affect our business, results of operations and financial condition, see "Item 1A — Risk Factors." Gannett Media Segment The Gannett Media reportable segment is an aggregation of two operating segments: Domestic Gannett Media and Newsquest. 4 Table of Contents Our Gannett Media segment is comprised of the following core products: • Over 585 Digital news and media brands, including USA TODAY and our network of local properties in the U.S. and the U.K ., which include 266 locally-focused websites, extending our businesses onto digital platforms as of December 31, 2022; • 325 digital media brands offer a digital-only subscription offering, exceeding 2.0 million paid digital-only subscribers as of December 31, 2022; • 218 daily print news media brands, including our local property network in the U.S. and USA TODAY, with total paid circulation of over 1.6 million as of December 31, 2022; • 175 weekly print media brands (published up to three times per week) as of December 31, 2022; • 154 daily and weekly news media brands, as well as over 90 magazines in the U.K. as of December 31, 2022; and • Our community events platform, USA TODAY NETWORK Ventures.
Biggest changeFor a detailed discussion of certain factors that could affect our business, results of operations and financial condition, see "Item 1A — Risk Factors." 4 Table of Contents Domestic Gannett Media Segment Our Domestic Gannett Media segment is comprised of USA TODAY, daily and weekly content brands in approximately 220 local U.S. markets across 43 states and our community events business, USA TODAY NETWORK Ventures.
Local advertising is associated with local store fronts or locally owned businesses and national advertising is principally associated with advertisers who are promoting national products or brands throughout the USA TODAY NETWORK. Examples include retailers, commercial banks, airlines, and telecommunications; and • Classified advertising includes major categories such as legal, obituaries, automotive, employment, and real estate or rentals.
Local advertising is associated with local store fronts or locally owned businesses and national advertising is principally associated with advertisers who are promoting national products or brands throughout the USA TODAY NETWORK. Examples include retailers, commercial banks, airlines, and telecommunications. • Classified advertising includes major categories such as legal, obituaries, automotive, employment, and real estate or rentals.
The USA TODAY NETWORK publishes a weekly newsletter, Climate Point, that curates content about the environment, sustainability, and climate change from across the network for a national audience, helping readers make better informed decisions for themselves, their families, and their communities. Corporate Governance and Public Information The address of Gannett's website is www.gannett.com.
Additionally, the USA TODAY NETWORK publishes a weekly newsletter, Climate Point, that curates content about the environment, sustainability, and climate change from across the network for a national audience, helping readers make better informed decisions for themselves, their families, and their communities. Corporate Governance and Public Information The address of Gannett's website is www.gannett.com.
We believe the longevity of our publications demonstrates the value and relevance of the local information we provide and has created a strong foundation of reader loyalty and a highly-recognized media brand name in each community we serve. We reach a large, diverse audience through our print and digital daily and non-daily publications throughout the U.S. and the U.K.
We believe the longevity of our publications demonstrates the value and relevance of the local information we provide and has created a strong foundation of reader loyalty and a highly-recognized media brand name in each community we serve. We reach a large, diverse audience through our print and digital daily and non-daily publications throughout the U.S.
Our nationally scaled sales force, trusted expertise, and broad portfolio of print and digital advertising and marketing products position us well to solve these challenges. Through our media planning process, we present advertisers with targeted, integrated solutions that help them reach this shifting audience.
We believe that our nationally scaled sales force, trusted expertise, and broad portfolio of print and digital advertising and marketing products position us well to solve these challenges. Through our media planning process, we present advertisers with targeted, integrated solutions that help them reach this shifting audience.
In addition, the online publishers that we utilize for clients, such as Google, Yahoo!, Facebook, and Microsoft, generally offer their products and services through self-service platforms. Many traditional offline media companies also offer online advertising solutions and have large, direct sales forces and digital publishing properties.
In addition, the online publishers that we utilize for clients, such as Google, Facebook, and Microsoft, generally offer their products and services through self-service platforms. Many traditional offline media companies also offer online advertising solutions and have large, direct sales forces and digital publishing properties.
Advertising and marketing services revenues for our Gannett Media segment are typically highest in the fourth quarter, primarily due to fluctuations in advertising volumes tied to the holidays, regional weather and levels of activity in our various markets, some of which have a high degree of seasonal residents and tourists.
Advertising and marketing services revenues for our Domestic Gannett Media segment are typically highest in the fourth quarter, primarily due to fluctuations in advertising volumes tied to the holidays, regional weather, and levels of activity in our various markets, some of which have a high degree of seasonal residents and tourists.
Building on our environmental, social and governance focus to foster culture and community both internally and externally We will continue our environmental, social and governance ("ESG") journey that is rooted in our mission to empower our communities to thrive and putting our customers at the center of everything we do.
Building on our environmental, social and governance focus to foster culture and community both internally and externally We will continue our environmental, social and governance ("ESG") journey that is rooted in our strategic mission to empower our communities to thrive and putting our customers at the center of everything we do.
We also have a Corporate and other category that includes activities not directly attributable to a specific reportable segment and includes broad corporate functions, such as legal, human resources, accounting, analytics, finance and marketing, as well as other general business costs.
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.
We support that mission with clearly defined values that influence not only what we do, but how we do it, with one of the core pillars focusing on our ongoing commitments to inclusion, diversity and equity ("ID&E").
We support that mission with clearly defined values that aim to influence not only what we do, but how we do it, with one of the core pillars focusing on our ongoing commitments to inclusion, diversity, and equity ("ID&E").
Tax Legislation On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the "Inflation Reduction Act"), which includes, among other provisions, changes to the U.S. corporate income tax system, including a 15% minimum tax based on "average adjusted financial statement income" exceeding $1 billion for any three consecutive years preceding the tax year and a 1% excise tax on net repurchases of stock in excess of $1 million after December 31, 2022.
Recent U.S. and international tax legislation On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the "Inflation Reduction Act"), which includes, among other provisions, changes to the U.S. corporate income tax system, including a 15% minimum tax based on "average adjusted financial statement income" exceeding $1 billion for any three consecutive years preceding the tax year and a 1% excise tax on net repurchases of stock in excess of $1 million after December 31, 2022.
We expect continued uncertainty and volatility in the U.S. and global economies which will continue to impact our business. Recent U.S.
We expect continued uncertainty and volatility in the U.S. and global economies which will continue to impact our business.
Our portfolio includes the largest high school sports recognition program in the country, USA TODAY High School Sports Awards, and other brands including the Official Community's Choice Awards, American Influencer Awards, Rugged Maniac, Hot Chocolate 15K/5K, RAGBRAI, Detroit Free Press Marathon and many more.
Our portfolio includes the largest high school sports recognition program in the country, USA TODAY High School Sports Awards, and other brands, including the Official Community's Choice Awards, American Influencer Awards, Hot Chocolate 15K/5K, RAGBRAI, Detroit Free Press Marathon and many more.
We also increasingly compete with digital and social media companies, as well as advertising networks and other programmatic buying channels for advertising revenues. Development of opportunities in, and competition from, digital and social media, including websites, tablet, mobile, and social products continues to increase.
We also increasingly compete with digital and social media companies, as well as advertising networks and other programmatic buying channels for advertising revenues. Development of opportunities in, and competition from, digital and social media, including websites, mobile applications, and social products continues to increase.
We are also exposed to potential increases in interest rates associated with our five-year senior secured term loan facility in an original aggregate principal amount of $516 million, which as of December 31, 2022 accounted for approximately 34% of our outstanding debt, as well as fluctuations in foreign currency exchange rates, primarily related to our operations in the U.K.
We are also exposed to potential increases in interest rates associated with our five-year senior secured term loan facility in an original aggregate principal amount of $516 million (the "Senior Secured Term Loan"), which as of December 31, 2023, accounted for approximately 31% of our outstanding debt, as well as fluctuations in foreign currency exchange rates, primarily related to our operations in the U.K.
These products are designed to work in concert with our digital advertising products with a goal of enhancing clients' marketing return on investment. • Our online advertising products include award-winning technology for bidding and budget management as well as patent-pending machine learning algorithms which optimize multiple advertising channels and campaigns toward a goal with a single budget.
These 14 Table of Contents products are designed to work in concert with our digital advertising products with a goal of enhancing clients' marketing return on investment. • Our online advertising products include award-winning technology for bidding and budget management as well as patent-pending machine learning algorithms which optimize multiple advertising channels and campaigns toward a goal with a single budget.
We track Digital advertising and marketing services revenues in three main categories: digital media, digital classified, and digital marketing services.
We track our Digital advertising and marketing services revenues in three main categories: digital media, digital classified, and digital marketing services.
By clustering our production resources, utilizing excess capacity for commercial work, or outsourcing where cost-beneficial, we are able to reduce the operating costs of our publications while increasing the quality of our small and mid-size market publications that would typically not otherwise have access to high quality production facilities.
By clustering our production resources, utilizing excess capacity for commercial work, or outsourcing where cost-beneficial, we seek to reduce the operating costs of our publications while increasing the quality of our small and mid-size market publications that would typically not otherwise have access to high quality production facilities.
The volume of advertising sales in any period is also impacted by other external factors such as competitors' pricing, advertisers' 6 Table of Contents decisions to increase or decrease their advertising expenditures in response to anticipated consumer demand, and general economic conditions.
The volume of advertising sales in any period is also impacted by other external factors such as competitors' pricing, advertisers' decisions to increase or decrease their advertising expenditures in response to anticipated consumer demand, and general economic conditions.
Search engine marketing, which is recorded as Advertising and marketing services revenues, accounted for 65% of our DMS segment's total revenues for the year ended December 31, 2022. • Our lead conversion software is a marketing automation platform that includes tools for capturing web traffic information and converting leads into new customers for clients.
Search engine marketing, which is recorded as Advertising and marketing services revenues, accounted for 67% of our DMS segment's total revenues for the year ended December 31, 2023. • Our lead conversion software is a marketing automation platform that includes tools for capturing web traffic information and converting leads into new customers for clients.
The Company expects to continue to protect its audience market share and to expand its audience reach in the digital media industry through a focus on high quality content and journalism, internal audience development efforts, content distribution programs, acquisitions, and partnerships.
The Newsquest segment expects to continue to protect its audience market share and to expand its audience reach in the digital media industry through a focus on high quality content and journalism, internal audience development efforts, content distribution programs, acquisitions, and partnerships.
Raw Materials: Newsprint, which is the basic raw material used in our print publications, has been and may continue to be subject to significant price changes from time to time. During 2022, we purchased newsprint as well as other specialty paper grades from 14 domestic and global suppliers.
Raw Materials Newsprint, which is the basic raw material used in our print publications, has been and may continue to be subject to significant price changes from time to time. During 2023, we purchased newsprint as well as other specialty paper grades from 16 domestic and global suppliers.
We implemented a number of customer centric initiatives and changes during 2022 that we believe will stabilize this trend, as well as extend the overall life of our print subscriber base. Circulation revenues in the U.S. are derived from our all access content subscription model, single-copy sales of our publications, and digital-only subscriptions.
We implemented a number of customer centric initiatives and changes during 2023 that we believe will stabilize this trend, as well as extend the overall life of our print subscriber base. 6 Table of Contents Circulation revenues in the U.S. are derived from our all access content subscription model, single-copy sales of our publications, and digital-only subscriptions.
Beginning in the second quarter of 2022, uncertain economic conditions adversely impacted our advertising 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 reduce or stop spend.
Uncertain economic conditions adversely impacted our advertising 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.
Utilizing our digital growth platforms and solutions, we build long-term, recurring revenue relationships while fulfilling our mission of helping local SMBs thrive. We believe we have a true advantage of successfully reaching the SMBs given our scaled salesforce and long-standing involvement and knowledge of the communities in which we operate.
Utilizing our digital growth platforms and solutions, we build long-term, recurring revenue relationships while fulfilling our mission of helping local SMBs thrive. We believe we have a true advantage of successfully reaching the SMBs given our scaled salesforce, long-standing involvement in and knowledge of the communities in which we operate, and vast data accumulated through decades of campaign management.
We are the leading news media publisher in the U.S. in terms of circulation and have the fifth largest digital audience in the News and Information category, based on December 2022 Comscore Media Metrix®; per those metrics, our content reaches more people digitally than Fox News Digital Network, New York Times Digital, Insider Inc. or WashingtonPost.com.
We are the leading news media publisher in the U.S. in terms of circulation and have the fourth largest digital audience in the News and Information category, based on the December 2023 Comscore Media Metrix®; per those metrics, our content reaches more people digitally than Fox News Media, CNN Network, CBS News, New York Times Digital, or WashingtonPost.com.
Our DMS segment has sales operations in the U.S., Canada, New Zealand, and the U.K. During 2022, approximately 94% of our DMS segment revenues were generated in North America and the remaining 6% from other international markets. All DMS segment revenues are digital revenues. Competition: The market for local online advertising solutions is intensely competitive and rapidly changing.
Our DMS segment has sales operations in the U.S., Canada, New Zealand, Australia, India and the U.K. During 2023, approximately 95% of our DMS segment revenues were generated in North America and the remaining 5% from other international markets. All DMS segment revenues are digital revenues. Competition The market for local online advertising solutions is intensely competitive and rapidly changing.
In addition to the subscription model in our U.S. local markets, single-copy print editions continue to be sold at retail outlets and accounted for approximately 10% of daily and 13% of Sunday net paid circulation volume in 2022.
In addition to the subscription model in our U.S. local markets, single-copy print editions continue to be sold at retail outlets and accounted for approximately 11% of daily and 14% of Sunday net paid circulation volume in 2023.
To support the ongoing digital transformation among our portfolio of products, the Company frequently evaluates the frequency, number, and types of products within each publication type. Strategies for reaching our over 100 million monthly print and digital consumers evolve along with geo targeting capabilities and digital marketing solutions as the audience becomes more digital.
To support the ongoing digital transformation among our portfolio of products, the Company frequently evaluates the frequency, number, and types of products within each publication type. Strategies for reaching our over 100 million monthly print and digital consumers evolve as the audience becomes more digital.
Approximately 47% of the net paid circulation volumes of USA TODAY in 2022 was generated by single-copy sales at retail outlets, vending machines, or hotels that provide copies to their guests. The remainder was generated by home and office delivery, mail, educational, and other sales.
Approximately 46% of the net paid circulation volumes of USA TODAY in 2023 was generated by single-copy sales at retail outlets, vending machines, or hotels that provide copies to their guests. Net paid circulation volumes of USA TODAY also include home and office delivery, mail, educational, and other sales.
Our events are managed with our proprietary ticketing and registration platform, EnMotive ® , one of the largest race timing companies in the U.S. 7 Table of Contents USA TODAY NETWORK Ventures revenues are generated primarily through sponsorship sales, race registrations, ticket sales, and print and digital advertising.
Our events are managed with our proprietary ticketing and registration platform, EnMotive ® , one of the largest race timing companies in the U.S. USA TODAY NETWORK Ventures revenues are generated primarily through sponsorship sales, race registrations, and ticket sales, which are reported in other revenues, and print and digital advertising and marketing revenues.
In addition, during 2022 , the combined average daily print readership was approximately 4.1 million on Sunday and 3.6 million daily Monday through Saturday, primarily driven by our U.S. local property network and to a lesser extent, USA TODAY.
In addition, during 2023 , the combined average daily print readership was approximately 3.2 million on Sunday and 2.9 million daily Monday through Saturday, primarily driven by our U.S. local property network and to a lesser extent, USA TODAY.
Our total consumption was approximately 149,256 metric tons in 2022, a decrease of 17% from 2021, which included consumption by our owned and operated print sites, third-party printing sites, and Newsquest, and includes consumption for Gannett products as well as products printed commercially for third-parties.
Our total consumption was approximately 114,000 metric tons in 2023, a decrease of 24% from 2022, which included consumption by our owned and operated print sites, third-party printing sites, and Newsquest, and includes consumption for Gannett products as well as products printed commercially for third-parties.
Through USA TODAY, our network of local properties, and Newsquest, we deliver high-quality, trusted content with a commitment to balanced, unbiased journalism, where and when consumers want to engage with it on virtually any device or platform.
Through USA TODAY, our network of local properties, and Newsquest, we deliver high-quality, trusted content with a commitment to balanced, unbiased journalism, where and when consumers want to engage.
As of December 31, 2022, we employed approximately 11,200 employees in the U.S., of which approximately 17% are represented by labor unions, most of which are affiliated with one of seven international unions. As of December 31, 2022, there were approximately 3,000 employees outside of the U.S., including approximately 2,200 employed by Newsquest in the U.K.
As of December 31, 2023, we employed approximately 10,000 employees in the U.S., of which approximately 17% are represented by labor unions, most of which are affiliated with one of seven international unions. As of December 31, 2023, there were approximately 2,800 employees outside of the U.S., including approximately 1,900 employed by Newsquest in the U.K.
Our all access content subscription model in our local markets includes a home delivered print product along with access to our content via multiple digital platforms including websites, smartphone and tablet applications, and E-Newspapers, with subscription prices varying significantly by market, frequency, and product, among other variables. As of December 31, 2022, we had 1.5 million print subscribers.
Our all access content subscription model in our local markets includes a home delivered print product along with access to our content via multiple digital platforms, with subscription prices varying by market, frequency, and product, among other variables. As of December 31, 2023, we had 1.2 million print subscribers.
Our current portfolio of media assets includes the USA TODAY NETWORK, which includes USA TODAY and local media organizations in 43 states in the United States (the "U.S."), and Newsquest, a wholly-owned subsidiary operating in the United Kingdom (the "U.K.").
Our current portfolio of trusted media brands includes the USA TODAY NETWORK, comprised of the national publication, USA TODAY, and local media organizations in the United States (the "U.S."), and Newsquest, a wholly-owned subsidiary operating in the United Kingdom (the "U.K.").
Circulation: In 2022, Gannett Media segment Circulation revenues of $1.085 billion comprised 41% of total Gannett Media segment revenues, down from 43% in 2021. Print circulation volumes declined more significantly beginning with the second quarter of 2022, as compared to historical trends.
Circulation In 2023, Domestic Gannett Media segment Circulation revenues of $854.5 million comprised 41% of total Domestic Gannett Media segment revenues, down from 43% in 2022. Print circulation volumes declined more significantly beginning with the second quarter of 2022, as compared to historical trends.
Production and Distribution: As of December 31, 2022, Gannett Publishing Services ("GPS") owned and/or operated 29 print facilities. Each of our print facilities produced 14 publications on average during 2022.
Production and Distribution As of December 31, 2023, Gannett Publishing Services ("GPS") owned and/or operated 21 production facilities. Each of our production facilities produced 16 publications on average during 2023.
Macroeconomic Environment The U.S. and global economies and markets experienced increased volatility in 2022, and are expected to continue to experience volatility, due to factors including higher inflation, increased interest rates, supply chain disruptions, fluctuating foreign currency exchange rates and other geopolitical events that are anticipated to continue in 2023.
Macroeconomic Environment The U.S. and global economies and markets experienced increased volatility in 2023, and are expected to continue to experience volatility, due to factors, including higher inflation, increased interest rates, banking volatility, and other geopolitical events that are anticipated to continue in 2024.
Our U.S. media network, which includes USA TODAY and our network of local properties, averaged 128 million (1) unique visitors monthly during 2022 to our digital platforms. In the U.K., Newsquest is a publishing and digital leader with a network of websites that averaged over 43 million (2) unique visitors monthly during 2022.
Our U.S. media network, which includes USA TODAY and our network of local properties, averaged approximately 136 million (a) unique visitors monthly during 2023 to our digital platforms. In the U.K., Newsquest is a publishing and digital leader with a network of websites that averaged approximately 51 million (b) unique visitors monthly during 2023.
Beginning in the second quarter of 2022, uncertain economic conditions adversely impacted our advertising 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 reduce or stop spend. Refer to "Macroeconomic Environment" below for further discussion.
Uncertain economic conditions continued to adversely impact our advertising revenues during 2023, 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. Refer to "Macroeconomic Environment" above for further discussion.
We believe our digital-only subscription growth is rooted in our unbiased, premium, local to national content. To continue growing and accelerating our digital-only subscriber base, we intend to capitalize on our large organic audience by further leveraging data and technology to understand our users' interests and curate an experience that will drive engagement and loyalty.
We believe our digital-only subscription growth is rooted in unique, essential content. To continue growing and accelerating our digital-only subscription base, we intend to capitalize on our large organic audience and leverage data to understand our users' interests and curate an experience that will drive engagement and loyalty.
We are committed to conducting our business in accordance with applicable laws, rules and regulations. Environmental Regulation: The Company is committed to its strategy of protecting the environment. Our goal is to ensure our production and distribution facilities comply with applicable federal, state, local, and foreign environmental laws and to incorporate appropriate environmental practices and standards in our operations.
Environmental Regulation The Company is committed to its strategy of protecting the environment. Our goal is to ensure our production and distribution facilities comply with applicable federal, state, local, and foreign environmental laws and to incorporate appropriate environmental practices and standards in our operations. We believe we are one of the industry leaders in the use of recycled newsprint.
As a result of the often rapidly evolving changes, the application, interpretation, and enforcement of these and other laws and regulations are often uncertain and may be interpreted and applied inconsistently from 8 Table of Contents jurisdiction to jurisdiction and inconsistently with our current policies and practices.
As a result of the often rapidly evolving changes, the application, interpretation, and enforcement of these and other applicable laws and regulations are often uncertain and may be interpreted and applied inconsistently from jurisdiction to jurisdiction and inconsistently with our current policies and practices. We are committed to conducting our business in accordance with applicable laws, rules, and regulations.
Joint Operating Agencies: Our Gannett Media subsidiaries in Detroit, Michigan and York, Pennsylvania each participate in a joint operating agency ("JOA"). In each instance, the JOA performs the production, sales, distribution, and back office functions for our subsidiaries and the publisher of another publication pursuant to a joint operating agreement.
In each instance, the JOA performs the production, sales, distribution, and back-office functions for our subsidiaries and the publisher of another publication pursuant to a joint operating agreement.
(1) 5 Table of Contents • During 2022, our U.S. media network, which includes USA TODAY and our network of local properties, had a total digital audience of 128 million (1) monthly unique visitors, on average.
(a) During 2023, our U.S. media network, which includes USA TODAY and our network of local properties, had a total digital audience of approximately 136 million (a) monthly unique visitors, on average.
The content of, or information available on, Gannett's website and any other website referred to in this report are not a part of, and are not incorporated by reference into, this report unless expressly noted otherwise. 17
The content of, or information available on, Gannett's website and any other website referred to in this report are not a part of, and are not incorporated by reference into, this report unless expressly noted otherwise. Use of Website to Distribute Material Company Information The Company's website address is www.gannett.com.
Competition: Our Domestic Gannett Media and Newsquest operations and affiliated digital platforms compete with other media and digital companies for advertising and marketing spend. Our Gannett Media operations also compete for circulation and readership against other news and information outlets and amateur content creators, some of which offer their content free of charge.
Our Domestic Gannett Media operations also compete for circulation and readership against other news and information outlets and amateur content creators, some of which offer their content free of charge.
The DMS segment, under the brand LocaliQ, is a sophisticated, cloud-based platform of fully-digital products differentiated by our proprietary: • Marketing automation and management tools; • Patent-pending artificial intelligence bidding engines with goal-based and omnichannel advertising optimization; • Customizable reporting that can integrate with third-party platforms; and • Simple setup that works without configuration. 12 Table of Contents Our DMS platform is used by a growing number of local businesses to find, convert, and keep customers.
We provide businesses with innovative technology and expertise to propel them forward, and our DMS platform is distinguished by its proprietary: • Marketing automation and management tools; • Patent-pending artificial intelligence bidding engines with goal-based and omnichannel advertising optimization; • Customizable reporting that can integrate with third-party platforms; and • Simple setup that works without configuration. 13 Table of Contents Our DMS platform is used by a growing number of local businesses to find, convert, and keep customers.
Advertising and marketing: In 2022, Advertising and marketing services revenues at the Gannett Media segment were $1.171 billion, which represented 45% of total Gannett Media segment revenues, down slightly from 46% in 2021, making it our single largest revenue category in 2022. We track our Print advertising revenues in two primary categories: local and national, and classified.
Advertising and Marketing In 2023, Advertising and marketing services revenues at the Domestic Gannett Media segment were $925.5 million, which represented 44% of total Domestic Gannett Media segment revenues, up from 43% in 2022, making it our single largest revenue category in 2023. We track our Print advertising revenues in two primary categories: local and national, and classified.
We are committed to completing a comprehensive Greenhouse Gas emissions report that is expected to allow us to redefine our commitment and set targets around our carbon footprint.
We are committed to completing a comprehensive Greenhouse Gas emissions report that is 19 Table of Contents expected to allow us to redefine our commitment and set targets around our carbon footprint. We also strive to incorporate sustainability throughout our supply usage and supply chain.
The ID&E report issued in 2022 outlined current workforce diversity data, Gannett's inclusion goals that reach into 2025, as well as the steps we are taking to achieve our goals.
In 2023, we published our third installment of an annual report focused on our ID&E efforts. The 2023 Inclusion Report outlined then-current workforce diversity data, Gannett's inclusion goals that reach into 2025, as well as the steps we are taking to achieve our goals.
The ID&E report issued in 2022 also highlighted how we are working to meet our goals, including through our employee resource groups ("ERGs") where we leverage the unique strengths, views, and experiences of our employees to build community, drive engagement, and deliver business impact.
The 2023 Inclusion Report also highlighted how we are working to meet our goals, including through our employee resource groups ("ERGs") where we leverage the unique strengths, views, and experiences of our employees to build community, drive engagement, and deliver business impact. Gannett expects to continue to publish company-wide workforce demographics twice a year.
We believe we are one of the industry leaders in the use of recycled newsprint. During 2022, 12% of our domestic newsprint purchases contained recycled content, with average recycled content of 21%. Our operations use inks, solvents, and fuels. The use, management, and disposal of certain of these substances are regulated by environmental agencies.
During 2023, 13% of our domestic newsprint purchases contained recycled content, with average recycled content of 20%. 15 Table of Contents Our operations use inks, solvents, and fuels. The use, management, and disposal of certain of these substances are regulated by environmental agencies.
Our programming includes intersectional ERG events, monthly Town Hall meetings with our Chief Executive Officer and senior leadership, and many communication channels, including, as an example, our monthly Together employee newsletter, which shares strategies on topics such as hybrid working, staying socially and professionally connected, and highlighting individual employee career progression stories.
Our programming includes intersectional ERG events, monthly Town Hall meetings with our Chief Executive Officer and senior leadership, and many communication channels, including, as an example, our monthly Together employee newsletter, which shares strategies on topics such as hybrid working, staying socially and professionally connected, and highlighting individual employee career progression stories. 18 Table of Contents Throughout the year we engage employees through lifecycle milestones to capture feedback through diverse channels in order to maintain a clear pulse on the employee experience.
In addition to digital-only subscriptions to our media brands, we offer standalone subscriptions to various sports brands and Crossword apps. In the U.S. local markets, Circulation revenue is largely subscription based, with approximately 87% of Circulation revenues derived from our all access content subscription model and digital-only subscriptions in 2022.
In the U.S. local markets, Circulation revenue is largely subscription based, with approximately 88% of Circulation revenues derived from our all access content subscription model and digital-only subscriptions in 2023.
GPS is responsible for internal and external printing, packaging, and distribution. The distribution of our daily newspapers is typically outsourced to independent, locally based, third-party distributors that also distribute a majority of our weekly newspapers and non-newspaper publications. We continuously evaluate lower cost options for newspaper delivery.
GPS is particularly focused on optimizing our geographic footprint to most efficiently produce and transport our printed products. GPS is responsible for internal and external printing, packaging, and distribution. The distribution of our daily newspapers is typically outsourced to independent, locally based, third-party distributors that also distribute a majority of our weekly newspapers and non-newspaper publications.
Our E-Newspapers are digital replicas of our print editions and contain the same news coverage, sports coverage, puzzles, and games. In addition, the electronic format allows subscribers to read and browse different sections, clip and share articles with friends and family, adjust text size, and access previous editions published within the last 30 days.
In addition, the E-Newspapers allow subscribers to read and browse different sections across our portfolio of brands, clip and share articles with friends and family, adjust text size, and access previous editions published within the last 30 days.
Our product portfolio offers a simple all-in-one platform powered by artificial intelligence and service experts that grows and adapts with the needs of local business owners.
Our solutions work across the USA TODAY NETWORK and major online platforms such as Google, Facebook, Microsoft, Snap, and others. Our product portfolio offers a simple all-in-one platform powered by artificial intelligence and service experts that grows and adapts with the needs of local business owners.
Additionally, we have strong relationships with hundreds of thousands of local and national businesses in both our U.S. and U.K. markets due to our large local and national sales forces and a robust advertising and digital marketing solutions product suite. We report in two segments, Gannett Media and Digital Marketing Solutions ("DMS").
We have strong relationships with hundreds of thousands of local and national businesses in both our U.S. and U.K. markets due to our large local and national sales forces and a robust advertising and digital marketing solutions product suite. Our strategy prioritizes maximizing the monetization of our audience through the growth of increasingly diverse and highly recurring digital businesses.
DMS Advertising and marketing services revenues are subject to moderate seasonality due primarily to fluctuations in marketing budgets for seasonal businesses. We believe the diversification of the product suite and the creation of a complementary go-to-market freemium model will, over time, reduce the impact from seasonal fluctuations.
DMS Advertising and marketing services revenues are subject to moderate seasonality due primarily to fluctuations in marketing budgets for seasonal businesses. We believe the diversification of the product suite will, over time, reduce the impact from seasonal fluctuations. Products Digital marketing requires a holistic view of how online presence, advertising and conversion efforts work together to get results.
The compliance costs and operational burdens imposed by these laws and regulations could be significant.
Data and privacy protection laws, rules and regulations are applicable to our businesses and the compliance costs and operational burdens imposed by these laws and regulations could be significant.
Below are descriptions of these three categories: • Digital media represents all display advertising either delivered on our digital products or off-platform through omnichannel partners or on channels such as Apple News; • Digital classified encompasses digital advertising revenues associated with our classified partnerships, including auto, employment (i.e., ZipRecruiter, Recruitology), and real estate (i.e., Homes.com) as well as legal, and obituaries; and • Digital marketing services represents our integrated, proprietary marketing platform helping local businesses build their online presence, drive awareness and leads, manage and nurture leads, and measure which activities are most effective.
Below are descriptions of these three categories: • Digital media includes direct sold display advertising as well as programmatic advertising and leverages both first and third-party data delivered on either our digital products or off-platform through omnichannel partners or on distribution channels. • Digital classified encompasses digital advertising revenues associated with our classified partnerships, including auto, employment and real estate as well as legal, and obituaries. • Digital marketing services represents our integrated, proprietary marketing platform that helps local businesses build their online presence through high conversion websites, drives awareness and leads through products such as search engine marketing, manages and nurtures leads through our marketing automation platform, and measures which activities are most effective.
In 2022, for the fifth year in a row, Gannett received a perfect score of 100 on the Corporate Equality Index, the nation's premier benchmarking survey and report measuring corporate policies and practices related to LGBTQ workplace equality and inclusion. Enabling a positive employee experience, within a values-based, inclusive work culture, is a top priority at Gannett.
In 2023, Gannett was recognized in the 2023 Best Places to Work for LGBTQ Equality. In 2023, for the sixth year in a row, Gannett received a perfect score of 100 on the Corporate Equality Index, the nation's premier benchmarking survey and report measuring corporate policies and practices related to LGBTQ workplace equality and inclusion.
Through our centralized Learning Experience Platform, we deliver and manage both internally developed and customized programs such as our leadership development program, as well as partner programs. To further our employees' experience, we offer a volunteer time benefit and community giving campaigns, inclusive holidays, including flexible holiday time for individuals to elect their desired holiday observations.
To further our employees' experience, we offer a volunteer time benefit and community giving campaigns, inclusive holidays, including flexible holiday time for individuals to elect their desired holiday observations.
For example, many jurisdictions have enacted or are considering enacting privacy or data protection laws and regulations that apply to the processing or protection of personal information. Data and privacy protection laws, rules and regulations, while generally applicable to our business, are particularly critical and relevant to our DMS segment.
For example, many jurisdictions have enacted or are considering enacting privacy or data protection laws and regulations that apply to the processing or protection of personal information as well as laws and regulations governing the use of artificial intelligence.
We understand the critical need for succession planning and have developed talent and succession plans with customized development plans for critical roles within the organization. On an annual basis, our Board of Directors reviews the succession plans for key senior leadership positions. Our learning programs have been designed to successfully orient employees, build leadership capabilities and meet individual development needs.
We also have implemented a Company-wide mentor platform to further enable career elevation progress. We understand the critical need for succession planning and have developed talent and succession plans with customized development plans for critical roles within the organization. On an annual basis, our Board of Directors reviews the succession plans for key senior leadership positions.
This diverse set of products can be specifically tailored to the individual needs of advertisers from small, locally-owned merchants to large, complex businesses.
Our advertising teams sell a full portfolio of print and digital advertising, including digital marketing services. This diverse set of products can be specifically tailored to the individual needs of advertisers from small, locally owned merchants to large, complex national brands.
Since its introduction in 1982, USA TODAY has been a cornerstone of the national media landscape under its recognizable and respected brand. It also serves as the foundation for our newsroom network, the USA TODAY NETWORK, which allows for content sharing capabilities across our local and national markets. Since 1918, our newsrooms have won 96 Pulitzer Prizes.
It also serves as the foundation for our newsroom network, the USA TODAY NETWORK, which allows for content sharing capabilities across our local and national markets. Since 1918, our newsrooms have won 96 Pulitzer Prizes. Most recently, in 2023, two USA TODAY NETWORK news organizations were named as Pulitzer Prize finalists.
The platform optimizes to produce the best results for the business and service experts are assigned to assist with each account, as needed. 13 Table of Contents • Our online presence solutions offer high conversion websites, with e-commerce, custom content creation to empower businesses to look professional, and human or bot-enabled live chat which ties into our lead conversion tools.
Our proprietary technologies include: • Our online presence solutions offer high conversion websites, with e-commerce, custom content creation to empower businesses to look professional, and human or bot-enabled live chat which ties into our lead conversion tools.
Aligned to our purpose, we endeavor to provide engaging work and foster a culture that supports our employees' ability to reach their goals and grow through learning and development. We aim to cultivate a safe, diverse, inclusive, and equitable culture with broad promotion of ERGs, with twelve active ERGs operating in the Company as of December 31, 2022.
We aim to cultivate a safe, diverse, inclusive, and equitable culture with broad promotion of our values, and participation in our ERGs, with twelve active ERGs operating in the Company as of December 31, 2023.
USA TODAY NETWORK Ventures creates impactful consumer engagement and experiences through world-class events, endurance races, promotions, and timing and event production technologies.
The majority of events in 2023 occurred in-person and our 2023 attendance increased to approximately 667 thousand attendees. 7 Table of Contents USA TODAY NETWORK Ventures creates impactful consumer engagement and experiences through world-class events, endurance races, promotions, and timing and event production technologies.
As a result of the macroeconomic volatility in 2022, compared to the prior year, we have experienced an increase in costs associated with labor, newsprint, delivery costs, ink, printing plates, fuel, and utilities.
As a result of the macroeconomic volatility, we have experienced rising costs, including costs associated with labor, newsprint, delivery, ink, printing plates, fuel, and utilities. However, we believe that the inflationary pressures peaked in 2022 and we are beginning to realize and expect we may continue to realize lower prices related to newsprint costs.
This platform removes the concerns of unexpected overages and misaligned goals and allows us to set performance-based pricing.
This platform removes the concerns of unexpected overages and misaligned goals and allows us to set performance-based pricing. The platform optimizes to produce the best results for the business and service experts are assigned to assist with each account, as needed.
In 2022, total digital revenues, which includes Digital advertising and marketing services revenues, Digital-only circulation revenues, and Digital syndication and affiliate revenues, were $1.039 billion, or 35% of our total revenues. During 2022, digital-only subscriptions began to outnumber print subscriptions, and as of December 31, 2022, we exceeded 2.0 million paid digital-only subscribers, up 24% year over year.
In 2023, total digital revenues, which includes Digital advertising and marketing services revenues, Digital-only subscription revenues, and Other Digital revenues, including digital syndication, affiliate, production and licensing revenues, grew to $1.1 billion, or 39% of our total revenues. With approximately two million paid digital-only subscribers as of December 31, 2023, our paid digital-digital subscriptions outnumber our print subscriptions.
GPS leverages our existing assets, including employee talent and experience, physical plants and equipment, and our vast national and local distribution networks to produce print products for both Gannett and third-party customers. GPS is particularly focused on optimizing our geographic footprint to most efficiently produce and transport our printed products.
We believe we are able to reduce future capital expenditure needs by having fewer overall pressrooms and buildings. GPS leverages our existing assets, including employee talent and experience, physical plants and equipment, and our vast national and local distribution networks to produce print products for both Gannett and third-party customers.
The scale of our consumer audience across the Gannett Media segment makes us an attractive marketing partner to various local and national businesses trying to reach consumers. We reach approximately one in two adults in the U.S., led by USA TODAY and amplified by local media brands within the USA TODAY NETWORK.
The scale of our consumer audience across the Domestic Gannett Media segment, combined with a full funnel suite of products, makes us an attractive marketing partner to various local and national businesses trying to reach consumers.
The execution of this strategy is expected to allow us to continue our evolution from a more traditional print media business to a digitally focused content creator and marketing solutions platform. We intend to create stockholder value through a variety of methods, including organic growth driven by our consumer and business-to-business strategies, as well as through paying down debt.
We intend to create stockholder value through a variety of methods, including organic growth driven by our consumer and business-to-business strategies, as well as through paying down debt to strengthen our capital structure.
Additionally, inflationary pressures have negatively impacted and are expected to continue to negatively impact the overall cost of newsprint and delivery services. The availability and price of newsprint is subject to numerous risks and uncertainties, which are described more fully under "Item 1A — Risk Factors" in this Annual Report on Form 10-K.
The availability and price of newsprint is subject to numerous risks and uncertainties, which are described more fully under "Item 1A — Risk Factors" in this Annual Report on Form 10-K. Strategy Gannett is committed to inspiring, informing and connecting audiences as a sustainable, growth-focused media and digital marketing solutions company.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, a change of control may constitute a default under the New Senior Secured Term Loan, the 2026 Senior Notes or the 2027 Notes. • Our strategy of growing our paid digital-only subscriber base may negatively impact advertising revenues in the near term. • We may be unsuccessful in our efforts to execute our digital revenue strategy and optimize our revenue streams. • Our DMS segment substantially utilizes online media acquired from third parties and our business could be materially adversely affected if these companies take actions that are adverse to our interests or otherwise restrict our ability to do business. • Volatility in the U.S. and global economies, macroeconomic events and market disruptions have had, and may in the future have, a material and adverse impact on our business, financial condition, and results of operations. • Our ability to generate revenues is highly sensitive to the strength of the local economies in which we operate and the demographics of the local communities that we serve. • The impact of pandemics, including the COVID-19 pandemic, or other epidemics, pandemics or widespread health crises is difficult to predict and could materially and adversely affect our business and results of operations. • The collectability of accounts receivable under adverse economic conditions could deteriorate to a greater extent than provided for in our financial statements and in our projections of future results. • Our financial results are subject to risks associated with our international operations. • Foreign exchange variability could materially and adversely affect our consolidated operating results. • Domestic and/or foreign jurisdictions may enact gross receipts taxes on our digital services which, if we are required to pay, could materially adversely affect our cash flows and financial condition. • Any significant increase in newsprint costs or disruptions in our newsprint supply chain, including as a result of manufacturing facility closures and on-going capacity shifts between newsprint and specialty paper grades, transportation and other issues that are challenging supplier deliveries, increased demand, and inflationary pressures, may materially and adversely affect our business, results of operations and financial condition. • The value of our goodwill and intangible assets may become impaired, which could materially and adversely affect future reported results of operations. • If we fail to maintain proper and effective internal control over financial reporting, our operating results and our ability to operate our business could be harmed. • We may not be able to protect intellectual property rights upon which our business relies and, if we lose intellectual property protection, our assets may lose value. • We are subject to environmental and employee safety and health laws and regulations that could cause us to incur significant compliance expenditures and liabilities. • Our possession and use of personal information and the use of payment cards by our customers and users present risks and expenses that could harm our business.
Biggest changeIn addition, a change of control may constitute a default under the Senior Secured Term Loan, the 2026 Senior Notes or the 2027 Notes. • Our strategy of growing our paid digital-only subscriber base may negatively impact advertising revenues in the near term. • We may be unsuccessful in our efforts to execute our digital revenue strategy and optimize our revenue streams. • Our DMS segment substantially utilizes online media acquired from third parties and our business could be materially adversely affected if these companies take actions that are adverse to our interests or otherwise restrict our ability to do business. • Any required changes in targeting, such as the deprecation of third-party cookies, could materially and adversely impact our advertising revenues and business results, and impair our ability to acquire consumers efficiently. • Volatility in the U.S. and global economies, macroeconomic events, market disruptions, and other events outside of our control, have had, and may in the future have, a material and adverse impact on our business, financial condition, and results of operations. • Our ability to generate revenues is highly sensitive to the strength of the local economies in which we operate and the demographics of the local communities that we serve. • The collectability of accounts receivable under adverse economic conditions could deteriorate to a greater extent than provided for in our financial statements and in our projections of future results. • Our financial results are subject to risks associated with our international operations. • Foreign exchange variability could materially and adversely affect our consolidated operating results. • Domestic and/or foreign jurisdictions may enact gross receipts taxes on our digital services which, if we are required to pay, could materially adversely affect our cash flows and financial condition. • Foreign jurisdictions in which we operate may enact rules to address the tax challenges of the digitization of the global economy, such as those from the Organization for Economic Co-operation and Development, which could have a material adverse impact on our consolidated financial statements. • Our possession and use of personal information and the use of payment cards by our customers and users present risks and expenses that could harm our business.
Consumption of our content on third-party delivery platforms may also lead to loss of distribution and pricing control, loss of a direct relationship with consumers and lower engagement and subscription rates. Further, news fatigue among consumers has become more widespread and could continue to grow.
Consumption of our content on third-party delivery platforms may also lead to loss of distribution and pricing control, loss of a direct relationship with consumers and lower engagement and subscription rates. Further, news and subscription fatigue among consumers has become more widespread and could continue to grow.
In addition, on March 21, 2022, Gannett Holdings exchanged an aggregate principal amount equal to $22.5 million of the 2026 Senior Notes for $22.5 million of new term loans under the New Senior Secured Term Loan, and on April 8, 2022, Gannett Holdings exchanged an aggregate principal amount equal to $7.5 million of the 2026 Senior Notes for $7.5 million of new term loans under the New Senior Secured Term Loan (collectively, the "Exchanged Term Loans").
In addition, on March 21, 2022, Gannett Holdings exchanged an aggregate principal amount equal to $22.5 million of the 2026 Senior Notes for $22.5 million of new term loans under the Senior Secured Term Loan, and on April 8, 2022, Gannett Holdings exchanged an aggregate principal amount equal to $7.5 million of the 2026 Senior Notes for $7.5 million of new term loans under the Senior Secured Term Loan (collectively, the "Exchanged Term Loans").
The New Senior Secured Term Loan, the 2026 Senior Notes, and the 6.0% Senior Secured Convertible Notes due 2027 (the "2027 Notes") require us to comply with numerous affirmative and negative covenants, including, in the case of the New Senior Secured Loan and the 2027 Notes, a requirement to maintain minimum liquidity of $30.0 million at the end of each fiscal quarter, and restrictions limiting our ability to, among other things, incur additional indebtedness, make investments and acquisitions, pay certain dividends, sell assets, merge, incur certain liens, enter into agreements with our affiliates, change our business, engage in sale/leaseback transactions, and modify our organizational documents.
The Senior Secured Term Loan, the 2026 Senior Notes, and the 6.0% Senior Secured Convertible Notes due 2027 (the "2027 Notes") require us to comply with numerous affirmative and negative covenants, including, in the case of the New Senior Secured Loan and the 2027 Notes, a requirement to maintain minimum liquidity of $30.0 million at the end of each fiscal quarter, and restrictions limiting our ability to, among other things, incur additional indebtedness, make investments and acquisitions, pay certain dividends, sell assets, merge, incur certain liens, enter into agreements with our affiliates, change our business, engage in sale/leaseback transactions, and modify our organizational documents.
In addition, we are required to repay the New Senior Secured Term Loan from time to time with (i) the proceeds of non-ordinary course asset sales and casualty and condemnation events, (ii) the proceeds of indebtedness that is not otherwise permitted under the New Senior Secured Term Loan and (iii) the aggregate amount of cash and cash equivalents on hand at the Company and its restricted subsidiaries in excess of $100 million as of the last day of any fiscal year of the Company (beginning with the fiscal year ended December 31, 2021).
In addition, we are required to repay the Senior Secured Term Loan from time to time with (i) the proceeds of non-ordinary course asset sales and casualty and condemnation events, (ii) the proceeds of indebtedness that is not otherwise permitted under the Senior Secured Term Loan and (iii) the aggregate amount of cash and cash equivalents on hand at the Company and its restricted subsidiaries in excess of $100 million as of the last day of any fiscal year of the Company (beginning with the fiscal year ended December 31, 2021).
On October 15, 2021, Gannett Holdings LLC ("Gannett Holdings"), our wholly-owned subsidiary, issued $400 million aggregate principal amount of 6.00% first lien notes due November 1, 2026 (the "2026 Senior Notes") and entered into a five-year senior secured term loan facility in an original aggregate principal amount of $516 million (the "New Senior Secured Term Loan") with Citibank N.A., as collateral agent and administrative agent for the lenders.
On October 15, 2021, Gannett Holdings LLC ("Gannett Holdings"), our wholly-owned subsidiary, issued $400 million aggregate principal amount of 6.00% first lien notes due November 1, 2026 (the "2026 Senior Notes") and entered into a five-year senior secured term loan facility in an original aggregate principal amount of $516 million (the "Senior Secured Term Loan") with Citibank N.A., as collateral agent and administrative agent for the lenders.
We are exposed to potential increases in interest rates associated with our New Senior Secured Term Loan. Further, if the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain in a timely manner, if at all, or on favorable terms, as well as more costly or dilutive.
We are exposed to potential increases in interest rates associated with our Senior Secured Term Loan. Further, if the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain in a timely manner, if at all, or on favorable terms, as well as more costly or dilutive.
If Newsquest's applicable revenues grew to exceed the threshold and/or if DST was to become applicable more widely to online advertising, we may have to pay additional cash taxes, which could materially and adversely affect our results of operations, financial condition, and cash flows. Maryland has enacted the first tax targeting digital advertising in the United States.
If Newsquest's applicable revenues grew to exceed the threshold and/or if DST was to become applicable more widely to online advertising, we may have to pay additional cash taxes, which could materially and adversely affect our results of operations, financial condition, and cash flows. Maryland enacted the first tax targeting digital advertising in the United States.
A failure to satisfy our debt service obligations on the New Senior Secured Term Loan, a breach of a covenant in the New Senior Secured Term Loan, or a material breach of a representation or warranty in the New Senior Secured Term Loan, among other events specified in the New Senior Secured Term Loan, could give rise to a default, which could give rise to the right of our lenders to declare our indebtedness, together with accrued interest and other fees, to be immediately due and payable.
A failure to satisfy our debt service obligations on the Senior Secured Term Loan, a breach of a covenant in the Senior Secured Term Loan, or a material breach of a representation or warranty in the Senior Secured Term Loan, among other events specified in the Senior Secured Term Loan, could give rise to a default, which could give rise to the right of our lenders to declare our indebtedness, together with accrued interest and other fees, to be immediately due and payable.
In addition, the exit of the U.K. from the European Union ("Brexit") may continue to adversely affect economic and market conditions in the U.K. and the European Union, create uncertainty around doing business in the U.K. and result in additional costs and compliance obligations, including with respect to tariffs and other trade barriers, data protection and transfer, tax rates and the recruitment and retention of employees.
In addition, the exit of the U.K. from the European Union ("Brexit") may continue to adversely affect economic and market conditions in the U.K. and the European Union, create ongoing uncertainty around doing business in the U.K. and result in additional costs and compliance obligations, including with respect to tariffs and other trade barriers, data protection and transfer, tax rates and the recruitment and retention of employees.
Under the New Senior Secured Term Loan, we can only pay cash dividends up to an agreed-upon amount and provided that the ratio of Total Indebtedness secured on an equal priority basis with the New Senior Secured Term Loan (net of Unrestricted Cash) to Consolidated EBITDA (as such terms are defined in the New Senior Secured Term Loan) does not exceed a specified ratio.
Under the Senior Secured Term Loan, we can only pay cash dividends up to an agreed-upon amount and provided that the ratio of Total Indebtedness secured on an equal priority basis with the Senior Secured Term Loan (net of Unrestricted Cash) to Consolidated EBITDA (as such terms are defined in the Senior Secured Term Loan) does not exceed a specified ratio.
Our ability to make contribution payments will depend on our future cash flows, which are subject to general economic, financial, competitive, business, legislative, regulatory, and other factors beyond our control. Various factors, including future investment returns, interest rates, and potential pension legislative changes, may impact the timing and 31 amount of future pension contributions.
Our ability to make contribution payments will depend on our future cash flows, which are subject to general economic, financial, competitive, business, legislative, regulatory, and other factors beyond our control. Various factors, including future investment returns, interest rates, and potential pension legislative changes, may impact the timing and amount of future pension contributions.
The New Senior Secured Term Loan matures on October 15, 2026, and bears interest at the Adjusted Term Secured Overnight Financing Rate ("SOFR") (which shall not be less than 0.50% per annum) plus a margin equal to 5.00% per annum or an alternate base rate (which shall not be less than 1.50% per annum) plus a margin equal to 4.00% per annum.
The Senior Secured Term Loan matures on October 15, 2026, and bears interest at the Adjusted Term Secured Overnight Financing Rate ("Adjusted Term SOFR") (which shall not be less than 0.50% per annum) plus a margin equal to 5.00% per annum or an alternate base rate (which shall not be less than 1.50% per annum) plus a margin equal to 4.00% per annum.
These complementary businesses also face competition from various digital media providers, such as Google and Yahoo!, which may have more resources to invest in product development and marketing. Our salesforce may not be able to utilize the relationships we have throughout our local property network to effectively sell these products.
These complementary businesses also face competition from various digital media providers, such as Google, which may have more resources to invest in product development and marketing. Our salesforce may not be able to utilize the relationships we have throughout our local property network to effectively sell these products.
For example, technological developments could adversely affect the availability, applicability, marketability and profitability of the suite of SMB services we offer. Technological developments and any changes we make to our business strategy may require significant capital investments, and such investments may be restricted by the New Senior Secured Term Loan.
For example, technological developments could adversely affect the availability, applicability, marketability and profitability of the suite of SMB services we offer. Technological developments and any changes we make to our business strategy may require significant capital investments, and such investments may be restricted by the Senior Secured Term Loan.
Our loan agreements, including the New Senior Secured Term Loan, the 2026 Senior Notes and the 2027 Notes, contain restrictions and covenants that limit our ability to take certain actions without requisite lender approval, approval of the holders of a majority in principal amount of the notes then outstanding, or modification of the loan agreements.
Our loan agreements, including the Senior Secured Term Loan, the 2026 Senior Notes and the 2027 Notes, contain restrictions and covenants that limit our ability to take certain actions without requisite lender approval, approval of the holders of a majority in principal amount of the notes then outstanding, or modification of the loan agreements.
In addition, upon liquidation, holders of our debt securities (including holders of our 2026 Senior Notes and 2027 Notes) and preferred stock, if any, and lenders with respect to other borrowings (including the lenders under the New Senior Secured Term Loan) will be entitled to our available assets prior to the holders of our Common Stock.
In addition, upon liquidation, holders of our debt securities (including holders of our 2026 Senior Notes and 2027 Notes) and preferred stock, if any, and lenders with respect to other borrowings (including the lenders under the Senior Secured Term Loan) will be entitled to our available assets prior to the holders of our Common Stock.
The New Senior Secured Term Loan provides, and future credit agreements or other agreements relating to indebtedness to which we become a party may provide, that the occurrence of certain change of control events with respect to Gannett would constitute a default thereunder.
The Senior Secured Term Loan provides, and future credit agreements or other agreements relating to indebtedness to which we become a party may provide, that the occurrence of certain change of control events with respect to Gannett would constitute a default thereunder.
Additionally, any of these companies may make significant changes to their respective business models, policies, systems, plans or ownership, and those changes could impair 23 or inhibit the manner in which they sell their advertising units or otherwise conduct their business with us.
Additionally, any of these companies may make significant changes to their respective business models, policies, systems, plans or ownership, and those changes could impair or inhibit the manner in which they sell their advertising units or otherwise conduct their business with us.
Moreover, the exercise by the holders of their right to require us to repurchase their 2026 Senior Notes or the 2027 Notes could cause a 22 default under such indebtedness, even if the change of control itself does not, due to the financial effect of such repurchase on us.
Moreover, the exercise by the holders of their right to require us to repurchase their 2026 Senior Notes or the 2027 Notes could cause a default under such indebtedness, even if the change of control itself does not, due to the financial effect of such repurchase on us.
The New Senior Secured Term Loan, the 2026 Senior Notes, and the 2027 Notes contain, and future indebtedness that we may incur may contain, prohibitions on the occurrence of certain events that would constitute a change of control or, in the case of the 2026 Senior Notes and the 2027 Notes, require the repurchase of such indebtedness upon a change of control.
The Senior Secured Term Loan, the 2026 Senior Notes, and the 2027 Notes contain, and future indebtedness that we may incur may contain, prohibitions on the occurrence of certain events that would constitute a change of control or, in the case of the 2026 Senior Notes and the 2027 Notes, require the repurchase of such indebtedness upon a change of control.
These attackers may use a blend of technology and social engineering techniques (including denial of service attacks, phishing attempts intended to induce our employees and users to disclose information or unwittingly provide access to systems or data, and other techniques) to disrupt service or exfiltrate data.
Attackers may use a blend of technology and social engineering techniques (including denial of service attacks, phishing attempts intended to induce our employees and users to disclose information or unwittingly provide access to systems or data, and other techniques) to disrupt service or exfiltrate data.
We presently have no intention to declare or pay a dividend, and there can be no assurance that we will pay dividends in the future. Our New Senior Secured Term Loan contains terms that restrict our ability to pay dividends or make other distributions.
We presently have no intention to declare or pay a dividend, and there can be no assurance that we will pay dividends in the future. Our Senior Secured Term Loan contains terms that restrict our ability to pay dividends or make other distributions.
A shortage of such employees, as well as increased turnover rates, could have an adverse impact on our productivity 32 and costs, our ability to expand, develop and distribute new products, our entry into new markets, and our ability to achieve our business goals.
A shortage of such employees, as well as increased turnover rates, could have an adverse impact on our productivity and costs, our ability to expand, develop and distribute new products, our entry into new markets, and our ability to achieve our business goals.
While we have historically partnered with lenders that we have established relationships with and whose priorities and interests are familiar to us, many of the lenders or holders under the New Senior Secured Term Loan and the holders of the 2026 Senior Notes are not historic relationships.
While we have historically partnered with lenders that we have established relationships with and whose priorities and interests are familiar to us, many of the lenders or holders under the Senior Secured Term Loan and the holders of the 2026 Senior Notes are not historic relationships.
In addition, our ability to repurchase the notes is limited by the agreements governing our existing indebtedness (including the New Senior Secured Term Loan) and may also be limited by law or regulation, or by agreements that will govern our future indebtedness.
In addition, our ability to repurchase the notes is limited by the agreements governing our existing indebtedness (including the notes and the Senior Secured Term Loan) and may also be limited by law or regulation, or by agreements that will govern our future indebtedness.
Each of these potential consequences could materially adversely affect our business and results of operations. 30 Defects, delays or interruptions in the cloud-based hosting services we utilize, both directly and indirectly, could adversely affect our reputation and operating results.
Each of these potential consequences could materially adversely affect our business and results of operations. Defects, delays, or interruptions in the cloud-based hosting services we utilize, both directly and indirectly, could adversely affect our reputation and operating results.
These challenging economic conditions, especially higher inflation and interest rates, have had, and may continue to have, an adverse impact on our consumers and consumer spending, which, in turn, could materially and adversely affect our business.
Challenging economic conditions, especially higher inflation and interest rates, have had, and may continue to have, an adverse impact on our consumers and consumer spending, which, in turn, could materially and adversely affect our business.
Beginning with the quarter ended December 31, 2022, and ending with the quarter ending September 30, 2024, the GR Plan's appointed actuary will certify the GR Plan's funded status for each quarter (the "Quarterly Certification") in accordance with U.S. GAAP.
Beginning with the quarter ended December 31, 2022, and ending with the quarter ending September 30, 2024, the GR Plan's appointed actuary has and will certify the GR Plan's funded status for each quarter (the "Quarterly Certification") in accordance with U.S. GAAP.
In addition, on January 31, 2022, Gannett Holdings entered into an amendment to the New Senior Secured Term Loan to provide for incremental term loans (the "Incremental Term Loans") in an aggregate principal amount not to exceed $50 million.
In addition, on January 31, 2022, Gannett Holdings entered into an amendment to the Senior Secured Term Loan to provide for incremental term loans (the "Incremental Term Loans") in an aggregate principal amount not to exceed $50 million.
Our DMS segment substantially utilizes online media acquired from third parties, particularly Google, Yahoo!, Facebook and Microsoft, which account for a large majority of all U.S. internet searches and traffic.
Our DMS segment substantially utilizes online media acquired from third parties, particularly Google, Facebook, and Microsoft, which account for a large majority of all U.S. internet searches and traffic.
These changes may negatively affect the 24 sales of our products, increase exposure to losses from bad debts, increase the cost and decrease the availability of financing, or increase costs associated with publishing and distributing our publications.
These changes may negatively affect the sales of our products, increase exposure to losses from bad debts, increase the cost and decrease the availability of financing, or increase costs associated with publishing and distributing our publications.
Under various environmental laws, a current or previous owner or operator of real property may be liable for contamination resulting from the release or threatened release of hazardous or toxic 28 substances or petroleum at that property.
Under various environmental laws, a current or previous owner or operator of real property may be liable for contamination resulting from the release or threatened release of hazardous or toxic substances or petroleum at that property.
A default under the New Senior Secured Term Loan or any of our indentures could also lead to a default under the other agreements governing our existing or future indebtedness (including the New Senior Secured Term Loan or any of our indentures, as the case may be).
A default under the Senior Secured Term Loan or any of our indentures could also lead to a default under the other agreements governing our existing or future indebtedness (including the Senior Secured Term Loan or any of our indentures, as the case may be).
In the event we do not obtain such a waiver or refinance the New Senior Secured Term Loan, such default could result in amounts outstanding under our New Senior Secured Term Loan being declared due and payable.
In the event we do not obtain such a waiver or refinance the Senior Secured Term Loan, such default could result in amounts outstanding under our Senior Secured Term Loan being declared due and payable.
If we experience a change of control event that triggers a default under our New Senior Secured Term Loan, we may seek a waiver of such default or may attempt to refinance the New Senior Secured Term Loan.
If we experience a change of control event that triggers a default under our Senior Secured Term Loan, we may seek a waiver of such default or may attempt to refinance the Senior Secured Term Loan.
As a result of any such breaches, vendors, customers, users or other third parties may assert claims of liability against us and these activities may subject us to governmental fines or penalties, legal claims, adversely impact our reputation, and interfere with our ability to provide our products and services, all of which may have an adverse effect on our business, financial condition and results of operations.
As a result of any such breaches or incidents, vendors, business partners, customers, users or other third parties may assert claims of liability against us and these activities may subject us to governmental fines or penalties, legal claims, adversely impact our reputation, and interfere with our ability to provide our products and services, all of which may have an adverse effect on our business, financial condition, and results of operations.
A default under the governing indenture or the change of control itself could also lead to a default under agreements governing our existing or future indebtedness (including the New Senior Secured Term Loan).
A default under the governing indenture or the change of control itself could also lead to a default under agreements governing our existing or future indebtedness (including the Senior Secured Term Loan).
These provisions provide for: 36 • Amendment of provisions in our amended and restated certificate of incorporation and amended and restated bylaws regarding the election of directors, the term of office of directors, the filling of director vacancies and the resignation and removal of directors only upon the affirmative vote of at least 80% of the then issued and outstanding shares of our capital stock entitled to vote thereon; • Amendment of provisions in our amended and restated certificate of incorporation regarding corporate opportunity only upon the affirmative vote of at least 80% of the then issued and outstanding shares of our capital stock entitled to vote thereon; • Removal of directors only for cause and only with the affirmative vote of at least 80% of the voting interest of stockholders entitled to vote in the election of directors; • Our Board of Directors to determine the powers, preferences and rights of our preferred stock and to issue such preferred stock without stockholder approval, including in connection with our Rights Agreement; • Provisions in our amended and restated certificate of incorporation and amended and restated bylaws prevent stockholders from calling special meetings of our stockholders; • Advance notice requirements applicable to stockholders for director nominations and actions to be taken at annual meetings; • A prohibition, in our amended and restated certificate of incorporation, stating that no holder of shares of our Common Stock will have cumulative voting rights in the election of directors, which means that the holders of majority of the issued and outstanding shares of our Common Stock can elect all the directors standing for election; and • Action by our stockholders outside a meeting, in our amended and restated certificate of incorporation and our amended and restated bylaws, only by unanimous written consent.
These provisions provide for: • Amendment of provisions in our amended and restated certificate of incorporation and amended and restated bylaws regarding the election of directors, the term of office of directors, the filling of director vacancies and the resignation and removal of directors only upon the affirmative vote of at least 80% of the then issued and outstanding shares of our capital stock entitled to vote thereon; • Amendment of provisions in our amended and restated certificate of incorporation regarding corporate opportunity only upon the affirmative vote of at least 80% of the then issued and outstanding shares of our capital stock entitled to vote thereon; • Removal of directors only for cause and only with the affirmative vote of at least 80% of the voting interest of stockholders entitled to vote in the election of directors; • Our Board of Directors to determine the powers, preferences and rights of our preferred stock and to issue such preferred stock without stockholder approval; • Provisions in our amended and restated certificate of incorporation and amended and restated bylaws prevent stockholders from calling special meetings of our stockholders; • Advance notice requirements applicable to stockholders for director nominations and actions to be taken at annual meetings; • A prohibition, in our amended and restated certificate of incorporation, stating that no holder of shares of our Common Stock will have cumulative voting rights in the election of directors, which means that the holders of majority of the issued and outstanding shares of our Common Stock can elect all the directors standing for election; and • Action by our stockholders outside a meeting, in our amended and restated certificate of incorporation and our amended and restated bylaws, only by unanimous written consent.
A 21 failure to satisfy our debt service or conversion obligations on the 2026 Senior Notes or the 2027 Notes, among other events specified in the Indenture dated as of October 15, 2021 (the "2026 Senior Notes Indenture") or the 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"), could also give rise to a default, which could give rise to the right of noteholders to declare the principal of the 2026 Senior Notes and/or the 2027 Notes, together with accrued and unpaid interest, to be immediately due and payable.
A failure to satisfy our debt service or conversion obligations on the 2026 Senior Notes or the 2027 Notes, among other events specified in the Indenture dated as of October 15, 2021 (the "2026 Senior Notes Indenture") or the 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"), could also give rise to a default, which could give rise to the 24 Table of Contents right of noteholders to declare the principal of the 2026 Senior Notes and/or the 2027 Notes, together with accrued and unpaid interest, to be immediately due and payable.
In addition, a change of control may constitute a default under the New Senior Secured Term Loan, the 2026 Senior Notes or the 2027 Notes .
In addition, a change of control may constitute a default under the Senior Secured Term Loan, the 2026 Senior Notes or the 2027 Notes .
Our ability to manage these international operations successfully is subject to numerous risks inherent in foreign operations, including: • Challenges or uncertainties arising from unexpected legal, political, economic or systemic events, including the COVID-19 pandemic; • Difficulties or delays in developing a network of clients in international markets; • Restrictions on the ability of U.S. companies to do business in certain foreign countries; • Compliance with legal or regulatory requirements, including with respect to internet services, privacy and data protection, censorship, banking and money transfers, and sale transactions, which may limit or prevent the offering of our products in some jurisdictions or otherwise harm our business; • International intellectual property laws that may be insufficient to protect our intellectual property or permit us to successfully defend our intellectual property in international lawsuits; • Difficulties in staffing and managing foreign operations, as well as the existence of workers' councils and labor unions, which could make it more difficult to terminate underperforming employees; • Currency fluctuations and price controls or other restrictions on foreign currency; and • Potential adverse tax and legislation consequences, including difficulties in repatriating earnings generated abroad.
Our ability to manage these international operations successfully is subject to numerous risks inherent in foreign operations, including: 28 Table of Contents • Challenges or uncertainties arising from unexpected legal, political, economic, or systemic events; • Difficulties or delays in developing a network of clients in international markets; • Restrictions on the ability of U.S. companies to do business in certain foreign countries; • Compliance with legal or regulatory requirements, including with respect to internet services, privacy and data protection, censorship, banking and money transfers, and sale transactions, which may limit or prevent the offering of our products in some jurisdictions or otherwise harm our business; • International intellectual property laws that may be insufficient to protect our intellectual property or permit us to successfully defend our intellectual property in international lawsuits; • Difficulties in staffing and managing foreign operations, as well as the existence of workers' councils and labor unions, which could make it more difficult to terminate underperforming employees; • Currency fluctuations and price controls or other restrictions on foreign currency; and • Potential adverse tax and legislation consequences, including difficulties in repatriating earnings generated abroad.
Our outstanding indebtedness includes the New Senior Secured Term Loan, the 2026 Senior Notes and the 2027 Notes (each as defined below).
Our outstanding indebtedness includes the Senior Secured Term Loan, the 2026 Senior Notes and the 2027 Notes (each as defined below).
In addition, our systems, and those of the third parties with which we work and on which we rely, may be vulnerable to interruption or damage that can result from the effects of natural disasters or climate change (such as increased storm severity and flooding); fires; power, systems or internet outages; acts of terrorism; pandemics (such as the COVID-19 pandemic); or other similar events.
In addition, our systems, and those of the third parties with which we work and on which we rely, may be vulnerable to interruption or damage that can result from the effects of natural disasters or climate change (such as increased storm severity and flooding); fires; power, systems or internet outages; acts of terrorism; pandemics; or other similar events.
Any failure or perceived failure by us, or the third-party service providers upon which we rely, to comply with laws and regulations that govern our business operations, as well as any failure or perceived failure by us, or the third-party service providers upon which we rely, to comply with our own posted policies, could result in claims against us by governmental entities or others, negative publicity and a loss of confidence in us by our customers, users and advertisers.
Any failure or perceived failure by us, or the third-party service providers upon which we rely, to comply with laws and regulations 31 Table of Contents that govern our business operations, as well as any failure or perceived failure by us, or the third-party service providers upon which we rely, to comply with our own posted policies, could result in claims against us by governmental entities or others, negative publicity and a loss of confidence in us by our customers, users and advertisers.
This competition continues to intensify as a result of changes in technologies, platforms and business models and corresponding changes in consumer and customer behavior, and we may be adversely affected if consumers or customers migrate to other alternatives. In addition, to be successful, we must provide the type and quality of content our consumers desire.
This competition continues to intensify as 22 Table of Contents a result of changes in technologies, platforms and business models and corresponding changes in consumer and customer behavior, and we may be adversely affected if consumers or customers migrate to other alternatives. In addition, to be successful, we must provide the type and quality of content our consumers desire.
Our information systems, both online and on-premise, store and process confidential subscriber and other user data, such as names, email addresses, addresses, and other personal information. Therefore, maintaining our network and identity security is critical.
Our information systems, both online and on-premise, store and process confidential subscriber and other user data, such as names, email addresses, phone numbers, addresses, and other personal information. Therefore, maintaining our network and identity security is critical.
Because the 29 techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, we or our third-party service providers may be unable to anticipate these techniques or to implement adequate preventative measures.
Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, we or our third-party service providers or business partners may be unable to anticipate these techniques or to implement adequate preventative measures.
The IRS is auditing these tax deductions, and as such, the audit could result in the reversal of all or part of the income tax benefit. To account for this uncertainty, a reserve of $11.3 million was established to reduce the benefit to an estimated realizable value of $21.2 million.
The Internal Revenue Service ("IRS") is auditing these tax deductions, and as such, the audit could result in the reversal of all or part of the income tax benefit. To account for this uncertainty, a reserve of $11.3 million was established to reduce the benefit to an estimated realizable value of $21.2 million.
To date, no incidents have had, either individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations.
To date, no cybersecurity incidents or threats have had, either individually or in the aggregate, a material adverse effect on our business, financial condition, or results of operations.
Additionally, we depend on the security of our third-party service providers. Unauthorized use of or inappropriate access to our, or our third-party service providers' networks, computer systems and services could potentially jeopardize the security of confidential information of our customers or users, including payment card (credit or debit) information.
Additionally, we depend on the security of our third-party service providers and business partners. Unauthorized use of or inappropriate access to our, or our third-party service providers' or business partners' networks, computer systems and services could potentially jeopardize the security of confidential information of our customers or users, including payment card (credit or debit) information.
Based on the number of shares outstanding on February 17, 2023, conversion of all of the 2027 Notes into Common Stock (assuming no adjustments to the Conversion Rate) would result in the issuance of an aggregate of 97.1 million shares of the Common Stock representing approximately 40% of the shares outstanding as of February 17, 2023 and conversion of all of the 2027 Notes into Common Stock (assuming the maximum increase in the Conversion Rate as a result of certain events, including, subject to exceptions as described in the Indenture, the acquisition of 50% or more of voting power of our securities by a person or group, a stockholder-approved liquidation of us, the delisting of our Common Stock, or certain changes of control, but no other adjustments to the Conversion Rate) would result in the issuance of an aggregate of 287.2 million shares of the Common Stock representing approximately 66% of the shares outstanding as of February 17, 2023.
Based on the number of shares outstanding on February 16, 2024, conversion of all of the 2027 Notes into Common Stock (assuming no adjustments to the Conversion Rate) would result in the issuance of an aggregate of 97.1 million shares of the Common Stock representing approximately 39% of the shares outstanding as of February 16, 2024 and conversion of all of the 2027 Notes into Common Stock (assuming the maximum increase in the Conversion Rate as a result of certain events, including, subject to exceptions as described in the Indenture, the acquisition of 50% or more of voting power of our securities by a person or group, a stockholder-approved liquidation of us, the delisting of our Common Stock, or certain changes of control, but no other adjustments to the Conversion Rate) would result in the issuance of an aggregate of 287.2 million shares of the Common Stock representing approximately 66% of the shares outstanding as of February 16, 2024.
These factors include, without limitation: • Risks and uncertainties associated with public health matters, including the ongoing COVID-19 pandemic; 33 • Our business profile and market capitalization may not fit the investment objectives of any stockholder; • A shift in our investor base; • Our quarterly or annual earnings, or those of other comparable companies; • Actual or anticipated fluctuations in our operating results; • Risks relating to our ability to meet long-term forecasts; • Announcements by us or our competitors of significant investments, acquisitions or dispositions, strategic developments and other material events; • The failure of securities analysts to cover our Common Stock; • Changes in earnings estimates by securities analysts or our ability to meet those estimates; • The operating and stock price performance of other comparable companies; • Negative public perception of us, our competitors, or industry; • Overall market fluctuations; • Changes in accounting standards, policies guidance, interpretations or principles; and • General economic conditions.
These factors include, without limitation: • Risks and uncertainties associated with public health matters and other events outside of our control; • Our business profile and market capitalization may not fit the investment objectives of any stockholder; • A shift in our investor base; • Our quarterly or annual earnings, or those of other comparable companies; • Actual or anticipated fluctuations in our operating results; • Risks relating to our ability to meet long-term forecasts; • Announcements by us or our competitors of significant investments, acquisitions or dispositions, strategic developments and other material events; • The failure of securities analysts to cover our Common Stock; • Changes in earnings estimates by securities analysts or our ability to meet those estimates; • The operating and stock price performance of other comparable companies; • Negative public perception of us, our competitors, or industry; • Overall market fluctuations; • Changes in accounting standards, policies guidance, interpretations or principles; and • General economic conditions.
Risks Related to Macroeconomic Factors Volatility in the U.S. and global economies, macroeconomic events and market disruptions have had, and may in the future have, a material and adverse impact on our business, financial condition, and results of operations .
Risks Related to Macroeconomic Factors Volatility in the U.S. and global economies, macroeconomic events, market disruptions, and other events outside of our control, have had, and may in the future have, a material and adverse impact on our business, financial condition, and results of operations .
Our business depends on our intellectual property, including, but not limited to, our titles, mastheads, content and proprietary software, which we may attempt to protect through patents, copyrights, trade laws and contractual restrictions, such as confidentiality agreements. We believe our proprietary and other intellectual property rights are important to our success and our competitive position.
Our business depends on our intellectual property, including, but not limited to, our titles, mastheads, content and proprietary software, which we may attempt to protect through patents, copyrights, trade laws and contractual restrictions, such 33 Table of Contents as confidentiality agreements. We believe our proprietary and other intellectual property rights are important to our success and our competitive position.
Information security threats are constantly evolving, increasing the difficulty of detecting and successfully defending against them. We and the third parties with which we work may be more vulnerable to the risk from activities of this nature as a result of operational changes such as significant increases in remote work.
Cybersecurity incidents and threats are constantly evolving, increasing the difficulty of detecting and successfully defending against them. We and the third parties with which we work may be more vulnerable to the risk from activities of this nature as a result of operational changes such as significant increases in remote work.
For example, the COVID-19 pandemic and the efforts to control it caused significantly increased economic and demand uncertainty, inflationary pressure in the U.S., U.K. and elsewhere, supply chain disruptions, volatility in the capital markets, a decline in consumer confidence, changes in consumer behavior, significant economic deterioration, and an increasingly competitive labor market.
For example, the COVID-19 pandemic caused significantly increased economic and demand uncertainty, inflationary pressure in the U.S., U.K. and elsewhere, supply chain disruptions, volatility in the capital markets, a decline in consumer confidence, changes in consumer behavior, significant economic deterioration, and an increasingly competitive labor market.
We may not be able to generate future taxable income which may prevent our realization of deferred tax assets or require us to establish valuation allowances which could materially and adversely affect future reported results of operations. We have deferred tax assets reported on our balance sheet, net of valuation allowances and deferred tax liabilities of $55.2 million.
We may not be able to generate future taxable income which may prevent our realization of deferred tax assets or require us to establish valuation allowances which could materially and adversely affect future reported results of operations. We have deferred tax assets reported on our balance sheet, net of valuation allowances and deferred tax liabilities of $35.1 million.
Unauthorized access to or disclosure or manipulation of such data, whether through breach of our, or our third-party service providers', network security or otherwise, could expose us to liabilities and costly litigation and damage our reputation.
Unauthorized access to or disclosure or manipulation of such data, whether through breach of our, or our third-party service providers ' , network security or otherwise, could expose us to liabilities and costly litigation and damage our reputation.
Further, measures taken to preserve cash flow and defer payments into future periods, such as the deferral of pension obligations in connection with the COVID-19 pandemic, may have a greater impact on cash flow in future periods as we also incur such payments in the normal course of business.
Any measures taken to preserve cash flow and defer payments into future periods, such as the deferral of pension obligations in connection with the COVID-19 pandemic, could have a greater impact on cash flow in future periods as we also incur such payments in the normal course of business.
Our ability to supply the needs of our Gannett Media operations depends upon the continuing availability of newsprint at an acceptable price, and our results of operations may be impacted significantly by changes in newsprint prices.
Our ability to supply the needs of our print operations depends upon the continuing availability of newsprint at an acceptable price, and our results of operations may be impacted significantly by changes in newsprint prices.
The coverage and limits of our insurance policies may not be adequate to reimburse us for losses caused by security breaches. A significant number of our customers authorize us to bill their payment card accounts directly for all amounts charged by us.
The coverage and limits of our insurance policies may not be adequate to reimburse us for losses caused by security breaches or other cybersecurity incidents. A significant number of our customers authorize us to bill their payment card accounts directly for all amounts charged by us.
In addition, we rely on the technology and systems provided by third-party vendors (including cloud-based service providers) for a variety of operations, including encryption and authentication technology, employee email, domain name registration, content delivery to customers, administrative functions (including payroll processing and certain finance and accounting functions) and other operations.
In addition, we rely on the technology, systems, and services provided by third-party vendors and outsourced service providers (including cloud-based service providers) for a variety of operations, including encryption and authentication technology, employee email, domain name registration, content delivery to customers, administrative functions (including payroll processing and certain finance and accounting functions), technology functions (including application development and technology support functions) and other operations.
We have implemented controls and taken other preventative measures designed to strengthen our systems against such incidents and attacks, including measures designed to reduce the impact of a security breach at our third-party vendors. Efforts to prevent hackers from disrupting our service or otherwise accessing our systems are expensive to develop, implement and maintain.
We have implemented controls and taken other preventative measures designed to strengthen our systems against such cybersecurity incidents and threats, including measures designed to reduce the impact of a security breach at our third-party vendors and outsourced service providers. Efforts to prevent hackers from disrupting our service or otherwise accessing our systems are expensive to develop, implement and maintain.
To our knowledge, a majority in aggregate principal amount of the 2027 Notes are held by entities controlled, managed or advised by a large financial sponsor (collectively, the "Convertible Noteholder").
To our knowledge, a majority in aggregate principal amount of the 2027 Notes are held by entities controlled, managed or advised by a large financial sponsor.
However, as amended, the legislation exempts digital advertising by a "broadcast entity" or a "news media entity." Maryland's new digital advertising tax could be the beginning of a wave of similar new taxes on digital advertising enacted by other states that are experiencing budget shortfalls and economic distress, including as a result of the COVID-19 pandemic.
However, as amended, the legislation exempts digital advertising by a "broadcast entity" or a "news media entity." Maryland's new digital advertising tax could be the beginning of a wave of similar new taxes on digital advertising enacted by other states that are experiencing budget shortfalls and economic distress.
If we are unable to compete successfully against existing or future competitors, our business, results of operations and financial condition could be materially and adversely affected. 20 Risks Related to Our Indebtedness Our indebtedness could materially and adversely affect our business or financial condition.
If we are unable to compete successfully against existing or future competitors, our business, results of operations and financial condition could be materially and adversely affected. 23 Table of Contents Risks Related to Our Indebtedness Our indebtedness could materially and adversely affect our business or financial condition.
For example, the General Data Protection Regulation adopted by the European Union and the Data Protection Act of 2018 in the U.K. impose stringent data protection requirements and significant penalties for noncompliance; California's Consumer Privacy Act created data privacy rights, which other states have begun to implement as well; and the European Union's anticipated ePrivacy Regulation is expected to impose, with respect to electronic communications and website cookies, additional data protection and data processing requirements beyond those of the current ePrivacy Directive.
For example, the General Data Protection Regulation adopted by the EU and the Data Protection Act of 2018 in the U.K. impose stringent data protection requirements and significant penalties for noncompliance; California's Consumer Privacy Act created data privacy rights, which other states have implemented as well; and the EU's anticipated ePrivacy Regulation is expected to impose, with respect to electronic communications and website cookies, additional data protection and data processing requirements beyond those of the current EU ePrivacy Directive.
In such a case, a non-cash charge to earnings may be necessary in the relevant period, which could materially and adversely affect future reported results of operations. At December 31, 2022, the carrying value of our goodwill, indefinite-lived intangible assets and amortizable intangible assets was $533.2 million, $166.2 million and $447.2 million, respectively.
In such a case, a non-cash charge to earnings may be necessary in the relevant period, which could materially and adversely affect future reported results of operations. At December 31, 2023, the carrying value of our goodwill, indefinite-lived intangible assets and amortizable intangible assets was $533.9 million, $166.9 million and $357.5 million, respectively.
Risks Related to International Operations Our financial results are subject to risks associated with our international operations. Newsquest operates in the U.K., and we have international sales operations in Australia, New Zealand and Canada, as well as campaign support services in India.
Risks Related to International Operations Our financial results are subject to risks associated with our international operations. The Newsquest segment operates in the U.K., and the DMS segment has international sales operations in the U.K., Australia, New Zealand and Canada, as well as campaign support services in India.
Although the costs of the controls and other measures we have taken to date have not had a material effect on our financial condition, results of operations or liquidity, the costs and effort to respond to a security breach and/or to mitigate any security vulnerabilities that may be identified in the future could be significant.
Although the costs of the controls and other measures we have taken to date have not had a material effect on our financial condition, results of operations or liquidity, the costs and effort to 30 Table of Contents respond to a cybersecurity incident or threat and/or to mitigate any security vulnerabilities that may be identified in the future could be significant.
Further, there can be no assurance that cost constraint actions, if any, in response to the pandemic or any future crisis, will offset possible future impacts of the crisis.
There can be no assurance that cost constraint actions, if any, taken in response to the pandemic or any future crisis outside our control, will offset possible future impacts of the crisis.
From time to time, the Convertible Noteholder may acquire additional 2027 Notes or shares of Common Stock, and we are unable to predict or monitor such ownership. Any sales in the public market of the Common Stock issuable upon such conversion could adversely affect prevailing market prices of our Common Stock.
From time to time, investors (including holders of a significant portion of the 2027 Notes) may acquire additional 2027 Notes or shares of Common Stock, and we are unable to predict or monitor such ownership. Any sales in the public market of the Common Stock issuable upon such conversion could adversely affect prevailing market prices of our Common Stock.
Further, if our stockholders do not approve the issuance of additional shares under our current or any new incentive plan, we may not have sufficient shares under the 2020 Omnibus Incentive Compensation Plan (the "2020 Incentive Plan") to implement our compensation plans, our ability to attract and retain talent may be hindered, and our cash flows may be reduced. • A shortage of skilled or experienced employees with the capabilities necessary to support our business strategies, or our inability to retain such employees, could pose a risk to achieving our business objectives, which could materially adversely affect our business and profitability. • A number of our employees are unionized, and our business and results of operations could be materially adversely affected if current or additional labor negotiations or contracts were to further restrict our ability to maximize the efficiency of our operations. • Sustained increases in costs of employee health and welfare benefits may reduce our profitability. • FIG LLC (the " Former Manager " ) is not liable to us for certain acts or omissions performed in accordance with, and prior to the termination of, our former management agreement (the " Former Management Agreement ") , and for certain matters in connection with the termination of our relationship with the Former Manager, and we may incur liability for such acts or omissions. • Our stock price is subject to volatility and there can be no assurance that the market for our stock will provide adequate liquidity. • Our Common Stock may be delisted from the NYSE if we fail to comply with continued listing standards. • Sales or issuances of shares of our Common Stock, including upon conversion of the 2027 Notes, could materially adversely affect the market price of our Common Stock. • We presently have no intention to declare or pay a dividend, the terms of our indebtedness restrict our ability to pay dividends, and we may not be able to pay dividends in the future or at all. • The percentage ownership of our existing stockholders may be diluted in the future, including upon conversion of the 2027 Notes, and holders of the 2027 Notes may possess significant voting power following conversion of the 2027 Notes. • An "ownership change" could limit our ability to utilize our net operating loss carryforwards and other tax attributes, which could result in our payment of income taxes earlier than if we were able to fully utilize our net operating loss and other tax benefit carryforwards. • We have entered into a Section 382 Rights Agreement that will expire by its terms in April 2023, and if the share purchase rights issued pursuant to such agreement, or any future rights agreement we may adopt, are exercised, it could materially and adversely affect the market price of our Common Stock. • Provisions in our amended and restated certificate of incorporation, our amended and restated bylaws and of Delaware law may prevent or delay an acquisition of the Company, which could decrease the trading price of our Common Stock. • Our ability to compete may be materially and adversely affected if adequate capital is not available.
Our ability to continue a competitive long-term equity-based incentive program required to attract and retain talent may be hindered, and alternative incentive models may cause our cash flows to be reduced. • A shortage of skilled or experienced employees with the capabilities necessary to support our business strategies, or our inability to retain such employees, could pose a risk to achieving our business objectives, which could materially adversely affect our business and profitability. • A number of our employees are unionized, and our business and results of operations could be materially adversely affected if current or additional labor negotiations or contracts were to further restrict our ability to maximize the efficiency of our operations. • Sustained increases in costs of employee health and welfare benefits may reduce our profitability. • FIG LLC (the " Former Manager " ) is not liable to us for certain acts or omissions performed in accordance with, and prior to the termination of, our former management agreement (the " Former Management Agreement ") , and for certain matters in connection with the termination of our relationship with the Former Manager, and we may incur liability for such acts or omissions. • Our stock price is subject to volatility and there can be no assurance that the market for our stock will provide adequate liquidity. • Our Common Stock may be delisted from the NYSE if we fail to comply with continued listing standards. • Sales or issuances of shares of our Common Stock, including upon conversion of the 2027 Notes, could materially adversely affect the market price of our Common Stock. • We presently have no intention to declare or pay a dividend, the terms of our indebtedness restrict our ability to pay dividends, and we may not be able to pay dividends in the future or at all. • The percentage ownership of our existing stockholders may be diluted in the future, including upon conversion of the 2027 Notes, and holders of the 2027 Notes may possess significant voting power following conversion of the 2027 Notes. • An "ownership change" could limit our ability to utilize our net operating loss carryforwards and other tax attributes, which could result in our payment of income taxes earlier than if we were able to fully utilize our net operating loss and other tax benefit carryforwards. • Provisions in our amended and restated certificate of incorporation, our amended and restated bylaws and of Delaware law may prevent or delay an acquisition of the Company, which could decrease the trading price of our Common Stock. • Our ability to compete may be materially and adversely affected if adequate capital is not available.
Our possession and use of personal information and the use of payment cards by our customers and users present risks and expenses that could harm our business.
Risks Related to Cybersecurity and Artificial Intelligence Our possession and use of personal information and the use of payment cards by our customers and users present risks and expenses that could harm our business.
There can be no assurance that we will not be required to take an impairment charge in the future which could have a material adverse effect on our results of operations.
Changes in key assumptions impacting the analyses could result in the recognition of additional impairment. There can be no assurance that we will not be required to take an impairment charge in the future which could have a material adverse effect on our results of operations.
All obligations under the New Senior Secured Term Loan (including the Incremental Term Loans and the Exchanged Term Loans, unless otherwise specified) and the 2026 Senior Notes are secured by all or substantially all of the assets of the Company and the wholly-owned domestic subsidiaries of the Company.
All obligations under the Senior Secured Term Loan (including the Incremental Term Loans and the Exchanged Term Loans, unless otherwise specified) and the 2026 Senior Notes are secured by all or substantially all of the assets of the Company and the wholly-owned domestic subsidiaries of the Company. We may incur additional indebtedness in the future.
Any such controls or transparency frameworks may impair our ability to market to consumers. Any new developments or rumors of developments regarding business practices at companies that affect the online advertising industry may materially and adversely affect our products or services, or create perceptions with our clients that our ability to compete in the online marketing industry has been impaired.
Any new developments or rumors of developments regarding business practices at 26 Table of Contents companies that affect the online advertising industry may materially and adversely affect our products or services, or create perceptions with our clients that our ability to compete in the online marketing industry has been impaired.
The Internal Revenue Service may disallow all or part of a worthless stock loss and bad debt deduction. We made an election in 2017 to treat one of our international subsidiaries as a disregarded entity for U.S. federal income tax purposes, which resulted in worthless stock and bad debt deductions of $100.9 million, yielding a tax benefit of $32.5 million.
We made an election in 2017 to treat one of our international subsidiaries as a disregarded entity for U.S. federal income tax purposes, which resulted in worthless stock and bad debt deductions of $100.9 million, yielding a tax benefit of $32.5 million.
As of December 31, 2022, the value of our pension assets exceeded our pension benefit obligations and our retirement plans were overfunded by a total of $78.6 million on a U.S. generally accepted accounting principles ("U.S. GAAP") basis. During the year ended December 31, 2022, we made $10 million in contributions to the GR Plan.
As of December 31, 2023, the value of our pension assets exceeded our pension benefit obligations and our retirement plans were overfunded by approximately $125.9 million on a U.S. generally accepted accounting principles ("U.S. GAAP") basis. During the year ended December 31, 2023, we made $0.1 million in contributions to the GR Plan.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also have executive offices located in New York, New York and Pittsford, New York, where we lease approximately 24 thousand and approximately 7 thousand square feet, respectively, under lease agreements terminating in May 2031 and December 2026, respectively. 37 Table of Contents Our domestic facilities occupy approximately 7.5 million square feet in the aggregate, of which approximately 4.7 million square feet are leased from third parties.
Biggest changeEffective March 31, 2024, our new corporate headquarters will be l ocated in New York, New York, which occupies approximately 24 thousand square feet, under a lease agreement terminating in May 2031. We also have an executive office in Pittsford, New York, where we lease approximately 7 thousand square feet, under a lease agreement terminating in December 2026.
Business, under "Major Publications and Markets We Serve." We own some of the plants that house most aspects of the publication process but in certain locations have outsourced printing or combined the printing of multiple publications. Newsquest, our subsidiary headquartered in London, U.K., occupies approximately 722 thousand square feet in the U.K. spread over 65 locations.
Business, under "Major Publications and Markets We Serve." We own some of the plants that house most aspects of the publication process but in certain locations have outsourced printing or combined the printing of multiple publications. Newsquest, our subsidiary headquartered in London, U.K., occupies approximately 698 thousand square feet in the U.K. spread over 60 locations.
Many of our local media organizations also have outside news bureaus, sales offices, and distribution centers that are leased from third parties. A listing of publishing centers and key locations can be found in Item 1.
Our domestic facilities occupy approximately 6.1 million square feet in the aggregate, of which approximately 4.5 million square feet are leased from third parties. Many of our local media organizations also have outside news bureaus, sales offices, and distribution centers that are leased from third parties. A listing of publishing centers and key locations can be found in Item 1.
All of our material real properties owned by our material domestic subsidiaries are mortgaged as collateral for our New Senior Secured Term Loan. We believe our current facilities, including the terms and conditions of the relevant lease agreements, are adequate to operate our businesses as currently conducted.
We believe our current facilities, including the terms and conditions of the relevant lease agreements, are adequate to operate our businesses as currently conducted.
Of this, approximately 361 thousand square feet (or 49 locations) are leased from third parties. Newsquest's owned premises include one printing facility. Three other printing facilities are leased.
Of this, approximately 339 thousand square feet spread over 46 locations are leased from third parties, including three production facilities. Included in Newsquest's 14 owned premises is one production facility.
Our digital marketing services companies under the brand LocaliQ is headquartered in Woodland Hills, California, and has sales and other offices and data centers in five locations in five states, including California, Florida, Massachusetts, Minnesota, and Texas, which occupy a total of approximately 185 thousand square feet.
Our digital marketing services companies under the brand LocaliQ is headquartered in Woodland Hills, California, and has sales and other offices and data centers in two locations in two states: California and Texas. In addition, LocaliQ has eleven locations in four other countries: Australia, India, New Zealand, and the Netherlands. These properties include leased buildings and data centers.
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ITEM 2. PROPERTIES Our corporate headquarters are in McLean, Virginia, where we lease approximately 176 thousand square feet. The lease provides for an initial term of 15 years with two five-year renewal options.
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ITEM 2. PROPERTIES Historically, our corporate headquarters has been located in McLean, Virginia, where we lease approximately 176 thousand square feet, under a lease terminating in October 2030. The Company has decided to relocate its corporate headquarters to its executive offices located in New York, New York and exit, cease use and continue to seek subleases for its McLean facility.
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In addition, LocaliQ has nine locations in five additional countries, including Australia, Canada, India, New Zealand, and the Netherlands. These properties include leased buildings and data centers. Excluded from total square footage but included in location counts are serviced office spaces.
Added
In total, LocaliQ properties occupy approximately 161 thousand square feet. Excluded from total square footage but included in location counts are serviced office spaces. All of our material real properties owned by our material domestic subsidiaries are mortgaged as collateral for our Senior Secured Term Loan.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS Information regarding legal proceedings may be found in Note 13 — Commitments, contingencies and other matters of the notes to the Consolidated financial statements, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 38 Table of Contents PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS Information regarding legal proceedings may be found in Note 13 — Commitments, contingencies and other matters — Legal Proceedings of the notes to the Consolidated financial statements, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 42 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 38 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 39 Item 6. [Reserved] 39 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 40 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 62 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 42 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 43 Item 6. [Reserved] 43 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 44 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 77 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDuring the year ended December 31, 2022, we repurchased 800 thousand shares of Common Stock under the Stock Repurchase Program for approximately $3.1 million, excluding commissions. As of December 31, 2022, 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 2023.
Biggest changeAs of December 31, 2023, 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 2024.
Dividends We presently have no intention to declare or pay a dividend, and there can be no assurance that we will pay dividends in the future. In addition, the terms of our indebtedness, including the New Senior Secured Term Loan, the 2026 Senior Notes Indenture and the 2027 Notes Indenture, have terms that restrict our ability to pay dividends.
Dividends We presently have no intention to declare or pay a dividend, and there can be no assurance that we will pay dividends in the future. In addition, the terms of our indebtedness, including the Senior Secured Term Loan, the 2026 Senior Notes Indenture and the 2027 Notes Indenture, have terms that restrict our ability to pay dividends.
We cannot assure stockholders that any specific number of shares of Common Stock, if any, will be repurchased under the Stock Repurchase Program. During the three months ended December 31, 2022, we did not repurchase any shares of Common Stock under the Stock Repurchase Program.
We cannot assure stockholders that any specific number of shares of Common Stock, if any, will be repurchased under the Stock Repurchase Program. During the year ended December 31, 2023, we did not repurchase any shares of Common Stock under the Stock Repurchase Program.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our Common Stock trades on the NYSE under the trading symbol "GCI." As of February 17, 2023, there were approximately 4,246 holders of record of our Common Stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our Common Stock trades on the NYSE under the trading symbol "GCI." As of February 16, 2024, there were approximately 3,916 holders of record of our Common Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeEach year we plan to update our progress and share more details about how we are working to achieve our goals. 44 Table of Contents RESULTS OF OPERATIONS Consolidated Summary A summary of our consolidated results is presented below: Year ended December 31, In thousands, except per share amounts 2022 2021 $ Change % Change Operating revenues: Local and national print $ 404,298 $ 502,014 (97,716) (19) % Classified print 266,584 290,272 (23,688) (8) % Print advertising 670,882 792,286 (121,404) (15) % Digital media 299,775 363,149 (63,374) (17) % Digital marketing services (a) 467,909 443,775 24,134 5 % Digital classified 57,571 51,951 5,620 11 % Digital advertising and marketing services 825,255 858,875 (33,620) (4) % Advertising and marketing services 1,496,137 1,651,161 (155,024) (9) % Print circulation 952,019 1,149,186 (197,167) (17) % Digital-only circulation 132,618 100,488 32,130 32 % Circulation 1,084,637 1,249,674 (165,037) (13) % Other 364,529 307,248 57,281 19 % Total operating revenues 2,945,303 3,208,083 (262,780) (8) % Total operating expenses (a) 2,978,902 3,099,006 (120,104) (4) % Operating income (loss) (33,599) 109,077 (142,676) *** Non-operating expenses 43,307 196,998 (153,691) (78) % Loss before income taxes (76,906) (87,921) 11,015 (13) % Provision for income taxes 1,349 48,250 (46,901) (97) % Net loss (78,255) (136,171) 57,916 (43) % Net loss attributable to noncontrolling interests (253) (1,209) 956 (79) % Net loss attributable to Gannett $ (78,002) $ (134,962) $ 56,960 (42) % Loss per share attributable to Gannett - basic $ (0.57) $ (1.00) $ 0.43 (43) % Loss per share attributable to Gannett - diluted $ (0.57) $ (1.00) $ 0.43 (43) % (a) Amounts are net of intersegment eliminations of $143.5 million and $129.3 million for the years ended December 31, 2022 and 2021, respectively, that represent digital advertising marketing services revenues and expenses associated with products sold by our U.S. local Gannett Media sales teams but fulfilled by our DMS segment.
Biggest changeThe Human Rights Policy also reflects our commitment to bargaining in good faith with chosen representatives of such groups in accordance with applicable laws. 48 Table of Contents RESULTS OF OPERATIONS Consolidated Summary A summary of our consolidated results is presented below: Year ended December 31, In thousands, except per share amounts 2023 2022 $ Change % Change 2021 $ Change % Change Revenues: Local and national print $ 329,956 $ 404,298 (74,342) (18) % $ 502,014 $ (97,716) (19) % Classified print 246,589 266,584 (19,995) (8) % 290,272 (23,688) (8) % Print advertising 576,545 670,882 (94,337) (14) % 792,286 (121,404) (15) % Digital media 280,596 299,775 (19,179) (6) % 363,149 (63,374) (17) % Digital marketing services (a) 476,958 467,909 9,049 2 % 443,775 24,134 5 % Digital classified 53,015 57,571 (4,556) (8) % 51,951 5,620 11 % Digital advertising and marketing services 810,569 825,255 (14,686) (2) % 858,875 (33,620) (4) % Advertising and marketing services 1,387,114 1,496,137 (109,023) (7) % 1,651,161 (155,024) (9) % Print circulation 772,200 952,019 (179,819) (19) % 1,149,186 (197,167) (17) % Digital-only subscription 155,621 132,618 23,003 17 % 100,488 32,130 32 % Circulation 927,821 1,084,637 (156,816) (14) % 1,249,674 (165,037) (13) % Other (b) 348,615 364,529 (15,914) (4) % 307,248 57,281 19 % Total revenues 2,663,550 2,945,303 (281,753) (10) % 3,208,083 (262,780) (8) % Total operating expenses (a) 2,577,279 2,978,902 (401,623) (13) % 3,099,006 (120,104) (4) % Operating income (loss) 86,271 (33,599) 119,870 *** 109,077 (142,676) *** Non-operating expenses 92,436 43,307 49,129 *** 196,998 (153,691) (78) % Loss before income taxes (6,165) (76,906) 70,741 (92) % (87,921) 11,015 (13) % Provision for income taxes 21,729 1,349 20,380 *** 48,250 (46,901) (97) % Net loss (27,894) (78,255) 50,361 (64) % (136,171) 57,916 (43) % Net loss attributable to noncontrolling interests (103) (253) 150 (59) % (1,209) 956 (79) % Net loss attributable to Gannett $ (27,791) $ (78,002) $ 50,211 (64) % $ (134,962) $ 56,960 (42) % Loss per share attributable to Gannett - basic $ (0.20) $ (0.57) $ 0.37 (65) % $ (1.00) $ 0.43 (43) % Loss per share attributable to Gannett - diluted $ (0.20) $ (0.57) $ 0.37 (65) % $ (1.00) $ 0.43 (43) % *** Indicates an absolute value percentage change greater than 100.
GAAP and should not be considered in isolation or as an alternative to income from operations, net income (loss), or any other measure of performance or liquidity derived in accordance with U.S. GAAP.
GAAP and should not be considered in isolation or as an alternative to income (loss) from operations, net income (loss), 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 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.
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.
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 New Senior Secured Term Loan, the 2026 Senior Notes, and the 2027 Notes.
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 Senior Secured Term Loan, the 2026 Senior Notes, and the 2027 Notes.
For the year ended December 31, 2022, Local and national print advertising revenues decreased compared to 2021 primarily due to a decrease in advertiser inserts, mainly due to circulation volume declines, as well as the absence of $37.3 million of revenues associated with both businesses divested and non-core products which were sunset in 2022 and 2021.
For the year ended December 31, 2022, Local and national print advertising revenues decreased compared to 2021, primarily due to a decrease in advertiser inserts, mainly due to volume declines, as well as the absence of $37.3 million of revenues associated with both businesses divested and non-core products which were sunset in 2022 and 2021.
Advertising and marketing services revenues for our Gannett Media segment are typically highest in the fourth quarter, primarily due to fluctuations in advertising volumes tied to the holidays, regional weather and levels of activity in our various markets, some of which have a high degree of seasonal residents and tourists.
Advertising and marketing services revenues for our Domestic Gannett Media segment are typically highest in the fourth quarter, primarily due to fluctuations in advertising volumes tied to the holidays, regional weather, and levels of activity in our various markets, some of which have a high degree of seasonal residents and tourists.
Pension and Postretirement Liabilities ASC Topic 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.
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 following table provides the breakout of the increase in Operating costs: 51 Table of Contents Year ended December 31, In thousands 2022 2021 $ Change % Change Outside services $ 283,380 $ 260,504 $ 22,876 9 % Compensation and benefits 32,633 31,136 1,497 5 % Other 7,633 7,374 259 4 % Total operating costs $ 323,646 $ 299,014 $ 24,632 8 % For the year ended December 31, 2022, Outside services costs, which include professional services fulfilled by third parties, media fees and other digital costs, paid search and ad serving services, increased compared to 2021 due to an increase in expenses associated with third-party media fees, driven by a corresponding increase in revenues.
The following table provides the breakout of the increase in Operating costs: Year ended December 31, In thousands 2022 2021 $ Change % Change Outside services $ 283,380 $ 260,504 $ 22,876 9 % Compensation and benefits 32,633 31,136 1,497 5 % Other 7,633 7,374 259 4 % Total operating costs $ 323,646 $ 299,014 $ 24,632 8 % For the year ended December 31, 2022, Outside services costs, which include professional services fulfilled by third parties, media fees and other digital costs, paid search and ad serving services, increased compared to 2021 due to an increase in expenses associated with third-party media fees, driven by a corresponding increase in revenues.
In addition, the terms of our indebtedness, including the New Senior Secured Term Loan, the 2026 Senior Notes Indenture and the 2027 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.
In addition, the terms of our indebtedness, including the Senior Secured Term Loan, the 2026 Senior Notes Indenture and the 2027 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.
Building on our environmental, social and governance focus to foster culture and community both internally and externally We will continue our environmental, social and governance ("ESG") journey that is rooted in our mission to empower our communities to thrive and putting our customers at the center of everything we do.
Building on our environmental, social and governance focus to foster culture and community both internally and externally We will continue our environmental, social and governance ("ESG") journey that is rooted in our strategic mission to empower our communities to thrive and putting our customers at the center of everything we do.
The New Senior Secured Term Loan bears interest at a per annum rate equal to the Adjusted Term SOFR (which shall not be less than 0.50% per annum) plus a margin equal to 5.00% or an alternate base rate (which shall not be less than 1.50% per annum) plus a margin equal to 4.00%.
The Senior Secured Term Loan bears interest at a per annum rate equal to the Adjusted Term SOFR (which shall not be less than 0.50% per annum) plus a margin equal to 5.00% or an alternate base rate (which shall not be less than 1.50% per annum) plus a margin equal to 4.00%.
We also have a Corporate and other category that includes activities not directly attributable to a specific reportable segment and includes broad corporate functions, such as legal, human resources, accounting, analytics, finance and marketing, as well as other general business costs.
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.
We support that mission with clearly defined values that influence not only what we do, but how we do it, with one of the core pillars focusing on our ongoing commitments to inclusion, diversity and equity ("ID&E").
We support that mission with clearly defined values that aim to influence not only what we do, but how we do it, with one of the core pillars focusing on our ongoing commitments to inclusion, diversity, and equity ("ID&E").
Beginning with the quarter ended December 31, 2022, and ending with the quarter ending September 30, 2024, the GR Plan's appointed actuary will certify the GR Plan's funded status for each quarter (the "Quarterly Certification") in accordance with U.S. GAAP.
Beginning with the quarter ended December 31, 2022, and ending with the quarter ending September 30, 2024, the GR Plan's appointed actuary has and will certify the GR Plan's funded status for each quarter (the "Quarterly Certification") in accordance with U.S. GAAP.
Tax Legislation On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the "Inflation Reduction Act"), which includes, among other provisions, changes to the U.S. corporate income tax system, including a 15% minimum tax based on "average adjusted financial statement income" exceeding $1 billion for any three consecutive years preceding the tax year and a 1% excise tax on net repurchases of stock in excess of $1 million after December 31, 2022.
Recent U.S. and international tax legislation On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the "Inflation Reduction Act"), which includes, among other provisions, changes to the U.S. corporate income tax system, including a 15% minimum tax based on "average adjusted financial statement income" exceeding $1 billion for any three consecutive years preceding the tax year and a 1% excise tax on net repurchases of stock in excess of $1 million after December 31, 2022.
Operating expenses Operating expenses consist primarily of the following: • Operating costs at the Gannett Media segment include labor, newsprint and delivery costs and at the DMS segment include the cost of online media acquired from third parties and costs to manage and operate our marketing solutions and technology infrastructure; • Selling, general and administrative expenses include labor, payroll, outside services, benefits costs and bad debt expense; • Depreciation and amortization; • Integration and reorganization costs include severance charges and other costs, including those for the purpose of consolidating our operations (i.e., facility consolidation expenses and integration-related costs); • 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.
Operating expenses Operating expenses consist primarily of the following: • Operating costs at the Domestic Gannett Media and Newsquest segments include labor, newsprint and delivery costs and at the DMS segment include the cost of online media acquired from third parties and costs to manage and operate our marketing solutions and technology infrastructure; • Selling, general and administrative expenses include labor, payroll, outside services, benefits costs and bad debt expense; • Depreciation and amortization; • Integration and reorganization costs include severance charges and other costs, including those for the purpose of consolidating our operations (i.e., facility consolidation expenses and integration-related costs); • 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.
We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Operating 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.
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.
Non-operating pension income: For the year ended December 31, 2022, Non-operating pension income was $59.0 million compared to $95.4 million for 2021.
For the year ended December 31, 2022, Non-operating pension income was $59.0 million compared to $95.4 million in 2021.
The tax provision 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.
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.
As of December 31, 2022, 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.
As of December 31, 2023, 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 expect continued uncertainty and volatility in the U.S. and global economies which will continue to impact our business. Recent U.S.
We expect continued uncertainty and volatility in the U.S. and global economies which will continue to impact our business.
For the year ended December 31, 2022, Digital-only circulation revenues increased compared to 2021, driven by an increase of 24% in paid digital-only subscriptions, including those subscribers on introductory subscription offers, to approximately 2.0 million as of December 31, 2022, partially offset by a decline in ARPU.
For the year ended December 31, 2022, Digital-only subscription revenues increased compared to 2021, driven by an increase of 24.6% in paid digital-only subscriptions, including those subscribers on introductory subscription offers, to approximately 2 million as of December 31, 2022, partially offset by a decline in Digital-only ARPU.
(a) See "Non-GAAP Financial Measures" below for additional information about non-GAAP measures. (b) We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Operating revenues. For the year ended December 31, 2022, the increase in Adjusted EBITDA compared to 2021 was primarily attributable to the changes discussed above.
(a) See "Non-GAAP Financial Measures" below for additional information about non-GAAP measures. (b) We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Revenues. For the year ended December 31, 2022, the increase in DMS segment Adjusted EBITDA compared to 2021 was primarily attributable to the changes discussed above.
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 impairment.
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 74 Table of Contents its carrying value, no further assessment of that reporting unit's goodwill is necessary; otherwise goodwill must be tested for impairment.
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 printing contracts, digital licenses and IT services, professional services, interactive marketing agreements, and other legally binding commitments.
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, printing contracts, professional services, interactive marketing agreements, and other legally binding commitments.
GAAP results in order to provide a more complete understanding of the factors and trends affecting our business. 59 Table of Contents Adjusted EBITDA and Adjusted EBITDA margin are not alternatives to Net loss attributable to Gannett and margin as calculated and presented in accordance with U.S. GAAP.
GAAP results in order to provide a more complete understanding of the factors and trends affecting our business. 72 Table of Contents Adjusted EBITDA and Adjusted EBITDA margin are not alternatives to Net income (loss) attributable to Gannett and margin as calculated and presented in accordance with U.S. GAAP.
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.
Pursuant to these actions, certain assets and real estate to be retired have been assessed for impairment. 75 Table of Contents 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.
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 60 Table of Contents cash flow margins, discount rates, and future economic and market conditions.
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.
Loss on convertible notes derivative: For the year ended December 31, 2022, we had no Loss on convertible notes derivative. For the year ended December 31, 2021, Loss on convertible notes derivative was $126.6 million, reflecting the increase in the fair value of the derivative liability as a result of the increase in our stock price.
Loss on convertible notes derivative: For the years ended December 31, 2023 and 2022, we had no Loss on convertible notes derivative. For the year ended December 31, 2021, Loss on convertible notes derivative was $126.6 million, reflecting the increase in the fair value of the derivative liability as a result of the increase in our stock price.
As of December 31, 2022, 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. 58 Table of Contents Contractual obligations and commitments We enter into various contractual arrangements as a part of our operations.
As of December 31, 2023, 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. 71 Table of Contents Contractual obligations and commitments We enter into various contractual arrangements as a part of our operations.
For the year ended December 31, 2022, Classified print advertising revenues decreased compared to 2021 due to lower spend on classified advertisements, primarily related to a decline in obituaries, and to a lesser extent declines in real estate and automotive.
For the year ended December 31, 2022, Classified print advertising revenues decreased compared to 2021 due to lower spend on classified advertisements, primarily related to a decline in obituary notifications, and to a lesser extent declines in real estate and automotive advertisements.
For the year ended December 31, 2022, Integration and reorganization costs increased compared to 2021, mainly due to an increase in severance costs of $30.3 million, primarily driven by our voluntary severance program in the fourth quarter of 2022 related to cost savings initiatives as well as ongoing integration and restructuring activities, and an increase in other costs of $13.7 million, including a withdrawal liability which was expensed as a result of ceasing contributions to a multiemployer pension plan, and an increase in facility consolidation expenses associated with exiting a lease.
For the year ended December 31, 2022, Integration and reorganization costs increased compared to 2021, mainly due to an increase in severance costs of $27.1 million, primarily driven by our voluntary severance program in the fourth quarter of 2022 related to cost savings initiatives as well as ongoing integration and restructuring activities, and an increase in other costs of $13.8 million, including a withdrawal liability which was expensed as a result of ceasing contributions to a multiemployer pension plan, and an increase in facility consolidation expenses associated with exiting a lease.
In addition, during the year ended December 31, 2022, and specifically beginning in the second quarter of 2022, we saw an acceleration in the rate of decline of our Print advertising 48 Table of Contents revenues as a result of macroeconomic factors.
In addition, during the year ended December 31, 2022, and specifically beginning in the second quarter of 2022, we saw an acceleration in the rate of decline of our Print advertising revenues as a result of macroeconomic factors.
In addition, we are required to repay the New Senior Secured Term Loan from time to time with (i) the proceeds of non-ordinary course asset sales and casualty and condemnation events, (ii) the proceeds of indebtedness not permitted under the New Senior Secured Term Loan , and (iii) the aggregate amount of cash and cash equivalents on hand at the Company and its restricted subsidiaries in excess of $100 million at the end of each fiscal year.
W e are required to repay the Senior Secured Term Loan from time to time with (i) the proceeds of non-ordinary course asset sales and casualty and condemnation events, (ii) the proceeds of indebtedness not permitted under the Senior Secured Term Loan , and (iii) the aggregate amount of cash and cash equivalents on hand at the Company and its restricted subsidiaries in excess of $100 million at the end of each fiscal year of the Company.
For the year ended December 31, 2022, Digital classified revenues increased compared to 2021, due to higher client spend, primarily due to increased spend on automotive advertisements, partially offset by lower spend on obituaries and employment advertisements.
For the year ended December 31, 2022, Digital classified revenues increased compared to 2021, due to higher client spend, primarily due to increased spend on automotive advertisements, partially offset by lower spend on obituary and employment notifications.
If the GR Plan is less than 100% funded, the Company will make a $1.0 million contribution to the GR Plan no later than 60 days following the receipt of the Quarterly Certification, provided, however, that the Company's obligation to make additional contractual contributions will terminate the earlier of (a) the day following the date that a contractual contribution would be due for the quarter ending September 30, 2024, and (b) the date the Company has made a total of $5 million of contractual contributions subsequent to June 30, 2022.
If the GR Plan is less than 100% funded, we will make a $1.0 million contribution to the GR Plan no later than 60 days following the receipt of the Quarterly Certification, provided, however, that our obligation to make additional contractual contributions will terminate the earlier of (a) the day following the date that a contractual contribution would be due for the quarter ending September 30, 2024, and (b) the date we have made a total of $5.0 million of contractual contributions subsequent to June 30, 2022.
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 June 30, 2022 or as of November 30, 2022.
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, 2023.
(a) See "Non-GAAP Financial Measures" below for additional information about non-GAAP measures. (b) We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Operating revenues. For the year ended December 31, 2022, the decrease in Adjusted EBITDA compared to 2021 was primarily attributable to the changes discussed above.
(a) See "Non-GAAP Financial Measures" below for additional information about non-GAAP measures. (b) We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Revenues. For the year ended December 31, 2022, the decrease in Domestic Gannett Media segment Adjusted EBITDA compared to 2021 was primarily attributable to the changes discussed above.
From our internal efforts around recruiting, development and retention, to our external efforts to provide high quality products and excellent customer service, we believe our strategic focus will benefit from our continued commitment to building upon our culture and community values.
From our internal efforts around recruiting, development 46 Table of Contents and retention, to our external efforts to provide high quality products and excellent customer service, we believe our strategic focus will benefit from our continued commitment to building upon our culture and community values.
Interest on the 2026 Senior Notes is payable semi-annually in arrears, beginning on May 1, 2022. The 2026 Senior Notes mature on November 1, 2026, unless redeemed or repurchased earlier pursuant to the 2026 Senior Notes Indenture.
Interest on the 2026 Senior Notes is payable semi-annually in arrears. The 2026 Senior Notes mature on November 1, 2026, unless redeemed or repurchased earlier pursuant to the 2026 Senior Notes Indenture.
Digital Marketing Solutions segment A summary of our DMS segment results is presented below: Year ended December 31, In thousands 2022 2021 $ Change % Change Operating revenues: Advertising and marketing services $ 468,883 $ 441,394 $ 27,489 6 % Other — 905 (905) (100 %) Total operating revenues 468,883 442,299 26,584 6 % Operating expenses: Operating costs 323,646 299,014 24,632 8 % Selling, general and administrative expenses 87,657 92,325 (4,668) (5 %) Depreciation and amortization 26,431 30,061 (3,630) (12 %) Integration and reorganization costs 1,108 1,710 (602) (35 %) Loss (gain) on sale or disposal of assets, net 179 (604) 783 *** Total operating expenses 439,021 422,506 16,515 4 % Operating income $ 29,862 $ 19,793 $ 10,069 51 % *** Indicates an absolute value percentage change greater than 100.
In addition, for the year ended December 31, 2023, Other items decreased compared to 2022, mainly due to foreign currency fluctuations. 66 Table of Contents Digital Marketing Solutions segment 2022 compared to 2021 A summary of our DMS segment results is presented below: Year ended December 31, In thousands 2022 2021 $ Change % Change Operating revenues: Advertising and marketing services $ 468,883 $ 441,394 $ 27,489 6 % Other — 905 (905) (100 %) Total operating revenues 468,883 442,299 26,584 6 % Operating expenses: Operating costs 323,646 299,014 24,632 8 % Selling, general and administrative expenses 87,657 92,325 (4,668) (5 %) Depreciation and amortization 26,431 30,061 (3,630) (12 %) Integration and reorganization costs 1,108 1,710 (602) (35 %) Loss (gain) on sale or disposal of assets, net 179 (604) 783 *** Total operating expenses 439,021 422,506 16,515 4 % Operating income $ 29,862 $ 19,793 $ 10,069 51 % *** Indicates an absolute value percentage change greater than 100.
We continue to closely monitor the COVID-19 pandemic and other economic factors, including but not limited to the current inflationary market and rising interest rates, and we expect to continue to take the steps necessary to appropriately manage liquidity.
We continue to closely monitor economic factors, including, but not limited to, the current inflationary market and rising interest rates, and we expect to continue to take the steps necessary to appropriately manage liquidity.
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 which was expensed as a result of ceasing contributions to a multiemployer pension plan, costs related to consolidating operations, primarily related to systems implementation and the outsourcing of corporate functions, and facilities consolidation expenses, primarily associated with exiting a lease.
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 45 Table of Contents for consolidating operations, primarily related to systems implementation and the outsourcing of corporate functions, and facilities consolidation expenses, primarily associated with exiting a lease.
The performance of our annual and interim impairment analyses resulted in no impairments to goodwill or indefinite-lived intangible assets for the year ended December 31, 2022. See Note 6 — Goodwill and intangible assets for further discussion.
The performance of our annual impairment analysis resulted in no impairments to goodwill or indefinite-lived intangible assets for the year ended December 31, 2023. See Note 6 — Goodwill and intangible assets for further discussion.
All obligations under the New Senior Secured Term Loan are 54 Table of Contents secured by all or substantially all of the assets of the Company and the wholly-owned domestic subsidiaries of the Company (the "New Senior Secured Term Loan Guarantors").
All obligations under the 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 "Senior Secured Term Loan Guarantors").
Net loss attributable to Gannett and diluted loss per share attributable to Gannett For the year ended December 31, 2022, Net loss attributable to Gannett and diluted loss per share attributable to Gannett were $78.0 million and $0.57, respectively, compared to $135.0 million and $1.00 for the year ended December 31, 2021, respectively.
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 $27.8 million and $0.20 for the year ended December 31, 2023, respectively, $78.0 million and $0.57 for the year ended December 31, 2022, respectively, and $135.0 million and $1.00 for the year ended December 31, 2021, respectively.
At the Gannett Media segment, Advertising and marketing services revenues are generated by the sale of local, national, and classified print advertising products, digital advertising offerings such as digital classified advertisements, digital media such as display advertisements run on our platforms as well as third-party sites, and digital marketing services delivered by our DMS segment.
At both the Domestic Gannett Media and Newsquest segments, Advertising and marketing services revenues are generated by the sale of local, national, and classified print advertising products, digital advertising offerings such as digital classified advertisements, digital media such as display advertisements run on our platforms as well as third-party sites, and 49 Table of Contents digital marketing services delivered by our DMS segment.
For the year ended December 31, 2021, the Loss on early extinguishment of debt was mainly due to the refinancing activities which occurred in 2021, including the refinancing of our five-year, senior-secured term loan facility in an aggregate principal amount of $1.045 billion (the "5-Year Term Loan") in the fourth quarter of 2021 and the payoff of our five-year, senior-secured 11.5% term loan facility with Apollo Capital Management, L.P. which was made in the first quarter of 2021.
The decrease for the year ended December 31, 2022 compared to 2021 was mainly due to the absence in 2022 of the refinancing activities which occurred in 2021, including the refinancing of our five-year, senior-secured term loan facility in an aggregate principal amount of $1.045 billion (the "5-Year Term Loan") in the fourth quarter of 2021 and the payoff of our five-year, senior-secured 11.5% term loan facility with Apollo Capital Management, L.P., which was made in the first quarter of 2021.
Goodwill is tested for impairment annually 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.
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.
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 2022 would have increased plan obligations by approximately $33.9 million.
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 2023 would have increased plan obligations by approximately $31.6 million.
The decrease in cash provided by investing activities was primarily due to a decrease in proceeds from the sale of real estate and other assets of $28.3 million, increased payments for acquisitions, net of cash acquired, of $15.3 million and an increase in purchases of property, plant, and equipment of $5.8 million.
The increase in cash flows provided by investing activities was primarily due to lower payments for acquisitions, net of cash acquired, of $15.4 million, a decrease in purchases of property, plant, and equipment of $7.3 million and an increase in proceeds from the sale of real estate and other assets of $1.8 million.
Our pension plans had assets valued at $1.7 billion as of December 31, 2022 and the plans' benefit obligation was $1.6 billion, resulting in the plans being 105% funded at such date. For 2022, the assumption used for the funded status discount rate was 5.70% for our principal retirement plan obligations.
Our pension plans had assets valued at $1.8 billion as of December 31, 2023 and the plans' benefit obligation was $1.7 billion, resulting in the plans being 108% funded at such date. For 2023, the assumption used for the funded status discount rate was 5.40% for our principal retirement plan obligations.
Refer to Segment results below for a discussion of the results of operations by segment. Non-operating (income) expense Interest expense: For the year ended December 31, 2022, Interest expense was $108.4 million compared to $135.7 million for the year ended December 31, 2021.
Refer to Segment results below for a discussion of the results of operations by segment. Non-operating (income) expense Interest expense: For the year ended December 31, 2023, Interest expense was $111.8 million compared to $108.4 million for the year ended December 31, 2022.
For the year ended December 31, 2022, Corporate and other operating expenses decreased $32.4 million compared to 2021.
For the year ended December 31, 2023, Corporate and other operating expenses decreased $20.4 million compared to 2022.
For the year ended December 31, 2022, Corporate and other Operating expenses decreased compared to 2021 due primarily to a decrease in Other operating expenses driven by the absence in 2022 of third-party fees that were expensed in 2021 related to the 5-Year Term Loan, the 2026 Senior Notes, and to a lesser extent the New Senior Secured Term Loan, a decrease in Selling, general and administrative expenses driven primarily by a decrease in compensation costs as well as other costs, including repairs and maintenance and utilities, partially offset by higher outside services, including legal fees, and a decrease in Integration and reorganization costs, mainly driven by a decline in costs associated with systems implementation and outsourcing of corporate functions, partially offset by an increase in severance costs.
For the year ended December 31, 2022, Corporate and other operating expenses decreased compared to 2021, primarily due to a decrease in Other operating expenses driven by the absence in 2022 of third-party fees that were expensed in 2021 related to the 5-Year Term Loan, the 2026 Senior Notes, and to a lesser extent the Senior Secured Term Loan, a decrease in Selling, general and administrative expenses driven primarily by a decrease of $7.9 million in payroll and employee benefits costs and a $3.1 million decrease in other costs, including repairs and maintenance and utilities, partially offset by $1.3 million of higher outside services, including legal fees, and a decrease in Integration and reorganization costs, mainly driven by a $15.4 million decline in costs associated with systems implementation and outsourcing of corporate functions, partially offset by a $10.7 million increase in severance costs.
Other non-operating income, net: Other non-operating income, net, consisted of certain items that fall outside of our normal business operations. For the year ended December 31, 2022, Other non-operating income, net, was $5.7 million compared to $18.7 million in 2021.
Other non-operating income, net: Other non-operating income, net consisted of certain items that fall outside of our normal business operations. For the year ended December 31, 2023, we recorded Other non-operating income, net of $5.4 million compared to $5.7 million in 2022.
For our principal retirement plan, we used an assumption of 5.3% for our expected return on pension plan assets for 2022. If we were to reduce our expected rate of return assumption by 50 basis points, the benefit for 2022 would have increased by approximately $8.9 million.
For our principal retirement plan, we used an 76 Table of Contents assumption of 5.3% for our expected return on pension plan assets for 2023. If we were to reduce our expected rate of return assumption by 50 basis points, the benefit for 2023 would have increased by approximately $4.4 million.
As of December 31, 2022, we had future purchase obligations totaling $197.2 million due in 2023, $148.0 million due in 2024, and $62.4 million due thereafter. Amounts for which we are liable under purchase orders outstanding at December 31, 2022 are reflected in the Consolidated balance sheets as Accounts payable and accrued liabilities.
As of December 31, 2023, we had future purchase obligations totaling $163.2 million due in 2024, $66.0 million due in 2025, and $27.0 million due thereafter. Amounts for which we are liable under purchase orders outstanding at December 31, 2023 are reflected in the Consolidated balance sheets as Accounts payable and accrued liabilities.
Through USA TODAY, our network of local properties, and Newsquest, we deliver high-quality, trusted content with a commitment to balanced, unbiased journalism, where and when consumers want to engage with it on virtually any device or platform.
Through USA TODAY, our network of local properties, and Newsquest, we deliver high-quality, trusted content with a commitment to balanced, unbiased journalism, where and when consumers want to engage.
Beginning in the second 42 Table of Contents quarter of 2022, uncertain economic conditions adversely impacted our advertising 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 reduce or stop spend.
Uncertain economic conditions adversely impacted our advertising 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 determine standalone selling prices based on observable prices charged to customers. 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.
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.
A 50 basis point change in the discount rate used to calculate 2022 benefit would have decreased total pension plan expense for 2022 by approximately $6.3 million.
A 50 basis point change in the discount rate used to calculate the benefit for 2023 would have decreased total pension plan expense for 2023 by approximately $2.4 million.
The following table provides the breakout of the decrease in Selling, general and administrative expenses: Year ended December 31, In thousands 2022 2021 $ Change % Change Compensation and benefits $ 74,867 $ 69,749 $ 5,118 7 % Outside services and other 12,790 22,576 (9,786) (43 %) Total selling, general and administrative expenses $ 87,657 $ 92,325 $ (4,668) (5 %) For the year ended December 31, 2022, Compensation and benefits costs increased compared to 2021, primarily due to an increase in payroll expense driven by higher headcount, as well as an increase in incentive pay, driven by a corresponding increase in revenues.
The following table provides the breakout of the decrease in Selling, general and administrative expenses: Year ended December 31, In thousands 2022 2021 $ Change % Change Compensation and benefits $ 74,867 $ 69,749 $ 5,118 7 % Outside services and other 12,790 22,576 (9,786) (43 %) Total selling, general and administrative expenses $ 87,657 $ 92,325 $ (4,668) (5 %) 67 Table of Contents For the year ended December 31, 2022, Compensation and benefits costs increased compared to 2021, primarily due to an increase in payroll expense of $4.6 million driven by higher headcount, including an increase in incentive pay of $0.7 million, driven by a corresponding increase in revenues, and an increase in employee benefit costs of $0.5 million, mainly due to higher employer 401(k) plan matching contributions.
We anticipate interest payments associated with our long-term debt totaling $91.5 million in 2023, $81.0 million in 2024 and $167.4 million thereafter. Due to uncertainty with respect to the timing of future cash flows associated with unrecognized tax benefits at December 31, 2022, we are unable to make reasonably reliable estimates of the period of cash settlement.
We anticipate interest payments associated with our long-term debt totaling $79.6 million in 2024, $70.0 million in 2025 and $90.0 million thereafter. Due to uncertainty with respect to the timing of future cash flows associated with unrecognized tax benefits at December 31, 2023, we are unable to make reasonably reliable estimates of the period of cash settlement.
Operating expenses For the year ended December 31, 2022, Operating costs decreased $52.4 million compared to 2021.
Operating expenses For the year ended December 31, 2022, Operating costs decreased $77.5 million compared to 2021.
Beginning in the second quarter of 2022, uncertain economic conditions adversely impacted our advertising 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 reduce or stop spend. Refer to "Macroeconomic Environment" above for further discussion.
Uncertain economic conditions continued to adversely impact our advertising revenues during 2023, 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. Refer to "Macroeconomic Environment" above for further discussion.
The decrease in interest expense was mainly due to a lower debt balance and the impact of lower interest rates on our outstanding fixed-rate debt, partially offset by an increase in interest rates on the New Senior Secured Term Loan.
The decrease in interest expense for the year ended December 31, 2022 compared to 2021 was mainly due to a lower debt balance and the impact of lower interest rates on our outstanding fixed-rate debt, partially offset by an increase in interest rates on the Senior Secured Term Loan.
The decrease in Non-operating pension income was primarily due to a decrease in the expected return on plan assets held by the Gannett Retirement Plan (the "GR Plan"), mainly driven by a more conservative asset allocation, and to a lesser extent, the reduction to the GR Plan assets as a result of the pension annuity entered into during the third quarter of 2022.
The decrease in Non-operating pension income for the year ended December 31, 2022 compared to 2021 was primarily due to a decrease in 50 Table of Contents the expected return on plan assets held by the GR Plan, mainly driven by a more conservative asset allocation, and to a lesser extent, the reduction to the GR Plan assets as a result of the pension annuity entered into during the third quarter of 2022.
Our current portfolio of media assets includes the USA TODAY NETWORK, which includes USA TODAY and local media organizations in 43 states in the United States (the "U.S."), and Newsquest, a wholly-owned subsidiary operating in the United Kingdom (the "U.K.").
Our current portfolio of trusted media brands includes the USA TODAY NETWORK, comprised of the national publication, USA TODAY, and local media organizations in the United States (the "U.S."), and Newsquest, a wholly-owned subsidiary operating in the United Kingdom (the "U.K.").
Cash flows provided by investing activities: For the year ended December 31, 2022, cash flows provided by investing activities were $22.1 million compared to $70.6 million for the year ended December 31, 2021.
Cash flows provided by investing activities: For the year ended December 31, 2023, cash flows provided by investing activities were $47.0 million compared to $22.1 million for the year ended December 31, 2022.
Business Trends We have considered several industry trends when assessing our business strategy: • Print advertising and circulation revenues continue to decline as our audience increasingly moves to digital platforms.
Business Trends We have considered several industry trends when assessing our business strategy: • Print advertising and circulation revenues 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.
In addition, for the year ended December 31, 2022, Other items increased compared to 2021, mainly due to foreign currency losses. 52 Table of Contents Corporate and other category For the year ended December 31, 2022, Corporate and other operating revenues were $5.4 million compared to $8.4 million for the year ended December 31, 2021.
In addition, for the year ended December 31, 2022, Other items increased compared to 2021, mainly due to foreign currency losses. 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.
Macroeconomic Environment The U.S. and global economies and markets experienced increased volatility in 2022, and are expected to continue to experience volatility, due to factors including higher inflation, increased interest rates, supply chain disruptions, fluctuating foreign currency exchange rates and other geopolitical events that are anticipated to continue in 2023.
Macroeconomic Environment The U.S. and global economies and markets experienced increased volatility in 2023, and are expected to continue to experience volatility, due to factors, including higher inflation, increased interest rates, banking volatility, and other geopolitical events that are anticipated to continue in 2024.
For the year ended December 31, 2022, Selling, general and administrative expenses decreased by $35.8 million compared to 2021.
For the year ended December 31, 2023, Selling, general and administrative expenses decreased by $5.6 million compared to 2022.
We are also exposed to potential increases in interest rates associated with our five-year senior secured term loan facility in an original aggregate principal amount of $516 million (the "New Senior Secured Term Loan"), which as of December 31, 2022 accounted for approximately 34% of our outstanding debt, as well as fluctuations in foreign currency exchange rates, primarily related to our operations in the U.K.
We are also exposed to potential increases in interest rates associated with our Senior Secured Term Loan, which as of December 31, 2023, accounted for approximately 31% of our outstanding debt, as well as fluctuations in foreign currency exchange rates, primarily related to our operations in the U.K.
Environmental, Social and Governance Initiatives As a leading media organization, our longstanding corporate social responsibility position is driven by our deep commitment to our communities. We are dedicated to ensuring that we have mindful and ethical business practices that positively impact our world.
Environmental, Social and Governance Initiatives As a leading media organization, our longstanding corporate social responsibility position is driven by our deep commitment to our communities. We are dedicated to ensuring that we have mindful and ethical business practices that positively impact our world. In early 2023, we published our 2023 ESG Report detailing the progress we made on our U.N.
Details of our cash flows are included in the table below: Year ended December 31, In thousands 2022 2021 Cash provided by operating activities $ 40,776 $ 127,453 Cash provided by investing activities 22,124 70,647 Cash used for financing activities (102,867) (261,172) Effect of currency exchange rate change on cash 1,152 (35) Decrease in cash, cash equivalents and restricted cash $ (38,815) $ (63,107) Cash flows provided by operating activities : Our largest source of cash provided by operations is Advertising revenues, primarily generated from Local and national advertising and marketing services revenues (retail, classified, and online).
Details of our cash flows are included in the table below: Year ended December 31, In thousands 2023 2022 Cash provided by operating activities $ 94,574 $ 40,776 Cash provided by investing activities 46,979 22,124 Cash used for financing activities (135,511) (102,867) Effect of currency exchange rate change on cash (234) 1,152 Increase (decrease) in cash, cash equivalents and restricted cash $ 5,808 $ (38,815) Cash flows provided by operating activities : Our largest source of cash provided by operating activities is Advertising revenues, primarily generated from Local and national advertising and marketing services revenues (retail, classified, and 69 Table of Contents online).
The New Senior Secured Term Loan amortizes in equal quarterly installments, beginning June 30, 2022, at a rate equal to 10.00% per annum (or, if the ratio of debt secured on an equal basis with the New Senior Secured Term Loan less unrestricted cash of the Company and its restricted subsidiaries to Consolidated EBITDA (as such terms are defined in the New Senior Secured Term Loan ) (such ratio, the "First Lien Net Leverage Ratio"), for the most recently ended period of four consecutive fiscal quarters is equal to or less than 1.20 to 1.00, 5.00% per annum).
Subsequent to the amendment effective as of April 8, 2022, the Senior Secured Term Loan is amortized at a rate eq ual to $15.1 million per quarter (or, if the ratio of debt secured on an equal basis with the Senior Secured Term Loan less unrestricted cash of the Company and its restricted subsidiaries to Consolidated EBITDA (as such terms are defined in the Senior Secured Term Loan) (such ratio, the "First Lien Net Leverage Ratio"), for the most recently ended period of four consecutive fiscal quarters is equal to or less than 1.20 to 1.00, $7.6 million per quarter).
Further, future repurchases under 57 Table of Contents 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.
Further, future repurchases under 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, 2023, we did not repurchase any shares of Common Stock under the Stock Repurchase Program.
For the year ended December 31, 2021, we incurred Integration and reorganization costs of $49.3 million. Of the total costs incurred, $16.5 million were related to severance activities and $32.8 million were related to other costs, including those for the purpose of consolidating operations, including costs associated with systems integrations.
For the year ended December 31, 2021, we incurred Integration and reorganization costs of $49.3 million. Of the total costs incurred, $16.5 million were related to severance activities and $32.8 million were related to other costs, including costs for consolidating operations, such as costs associated with systems integrations. Foreign currency Our U.K. media operations are conducted through our Newsquest subsidiary.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+1 added−1 removed3 unchanged
Biggest changeA hypothetical interest rate increase of 150 basis points would have increased our interest 62 Table of Contents expense related to our variable-rate debt and likewise decreased our income and cash flows by approximately $6.6 million for the year ended December 31, 2022. See Note 8 — Debt to our Consolidated financial statements for further discussion of our debt.
Biggest changeOur variable-rate debt consisted of the Senior Secured Term Loan which bears interest at the Adjusted Term Secured Overnight Financing Rate. A hypothetical interest rate increase of 100 basis points would have increased our interest expense related to our variable-rate debt and likewise decreased our income and cash flows by approximately $3.5 million for the year ended December 31, 2023.
Cumulative foreign currency translation gains and losses reported as part of equity equated to a loss of $14.9 million at December 31, 2022, primarily due to the strengthening of the U.S. dollar compared to the British pound sterling, and a gain of $9.1 million at December 31, 2021.
Cumulative foreign currency translation gains and losses reported as part of equity equated to a loss of $1.2 million at December 31, 2023, primarily due to the strengthening of the U.S. dollar compared to the British pound sterling, and a loss of $14.9 million at December 31, 2022.
A hypothetical 10% fluctuation of the price of the British pound sterling and the currencies in our DMS segment against the U.S. dollar would not have materially impacted operating income for the year ended December 31, 2022. 63 Table of Contents
A hypothetical 10% fluctuation of the price of the British pound sterling and the currencies in our DMS segment against the U.S. dollar would not have materially impacted operating income for the year ended December 31, 2023. 77 Table of Contents
A hypothetical $10 per metric ton increase in newsprint price would not have materially impacted our results of operations or cash flows based on newsprint usage for the year ended December 31, 2022 of approximately 149,256 metric tons.
A hypothetical $10 per metric ton increase in newsprint price would not have materially impacted our results of operations or cash flows based on newsprint usage for the year ended December 31, 2023 of approximately 114,000 metric tons.
Interest Rates We generally manage our risk associated with changes in interest rates through the use of a combination of variable and fixed-rate debt. As of December 31, 2022, we had variable and fixed-rate debt totaling $438.4 million and $833.8 million, respectively.
Interest Rates We generally manage our risk associated with changes in interest rates through the use of a combination of variable and fixed-rate debt. As of December 31, 2023, we had variable and fixed-rate debt totaling $350.4 million and $780.2 million, respectively.
Commodity Prices Certain operating expenses of ours are sensitive to commodity price fluctuations. Our primary commodity price exposures are newsprint and, to a lesser extent, ink, which in the aggregate represented approximately 5% and 3% of our total operating expenses for the years ended December 31, 2022 and 2021, respectively.
Our primary commodity price exposures are newsprint and, to a lesser extent, ink, which in the aggregate represented approximately 4% and 5% of our total operating expenses for the years ended December 31, 2023 and 2022, respectively.
Removed
Our variable-rate debt consisted of the New Senior Secured Term Loan which bears interest at the Adjusted Term Secured Overnight Financing Rate.
Added
See Note 8 — Debt to our Consolidated financial statements for further discussion of our debt. Commodity Prices Certain operating expenses of ours are sensitive to commodity price fluctuations, as well as inflation.

Other TDAY 10-K year-over-year comparisons