Q4 & FY 2019 Earnings

February 27, 2020

Disclaimers and Notes

In General. This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with any such verbal or written comments, is referred to herein as the "Presentation." Prior to November 19, 2019, our corporate name was New Media Investment Group Inc. ("New Media" or "Legacy New Media"), and Gannett Co., Inc. ("Legacy Gannett") was a separate publicly traded company. On November 19, 2019, New Media acquired Legacy Gannett (the "Acquisition"). In connection with the Acquisition, Legacy Gannett became a wholly owned subsidiary of New Media, and New Media's name was changed to Gannett Co., Inc. (also referred to as "Gannett," "we," "us," "our" or the "Company").

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this Presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding measures expected to result in over $60 million in annualized savings, the timing of realizing those savings, including our expectation that $10 - $15 million will be realized in the first quarter, the potential to realize additional savings in future quarters, our ability to achieve $300 million of synergies through measures expected to be implemented by the end of 2021, our expectations, in terms of both amount and timing, with respect to debt repayment, real estate sales and debt refinancing, future revenue trends and our ability to influence trends, and the amount and timing of any future dividend, including our expectation that the Board will declare a $0.19 per share dividend with respect to the first quarter of 2020. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. Many of these risks and uncertainties are beyond our control. The Company can give no assurance its expectations will be attained. Accordingly, you should not place undue reliance on any forward-looking statements contained in this Presentation. For a discussion of some of the risks and important factors that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. Furthermore, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

Past Performance. In all cases where historical performance is presented, please note that past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. This Presentation is not an offer to sell, nor a solicitation of an offer to buy any securities.

Same Store Revenues. Same store revenues are defined as GAAP revenues excluding (1) revenues related to 2019 acquisitions from the date of the acquisition through the end of the year, (2) revenues related to 2018 acquisitions from the beginning of 2019 through the first year anniversary of their applicable acquisition date, (3) exited operations, (4) currency impacts, and (5) deferred revenue impacts related to the Acquisition. We have provided same store revenue trends for Legacy Gannett and Legacy New Media, each on a stand-alone basis for the entire period. This information is provided on a transitional basis, and management expects to provide same store results for the consolidated company in future periods. See the "Appendix" for a reconciliation of same store revenues.

Pro Forma Financial Information. This Presentation includes pro forma financial information, which represent the results of Legacy New Media and Legacy Gannett on a consolidated basis, adjusted as if New Media had owned Legacy Gannett for the entire period presented.

Non-GAAPMeasures. This Presentation includes non-GAAP measures, such as Adjusted EBITDA, Free Cash Flow and same store revenues for Legacy New Media and Legacy Gannett, each on a standalone basis. Our non-GAAP results are calculated based on actual results (with six weeks of Legacy Gannett operations) and on a pro forma basis (assuming Legacy Gannett was owned for the entire period). See the "Appendix" in this presentation for information regarding these non-GAAP measures, including reconciliations to the most directly comparable GAAP financial measure.

2

Investment Highlights - Q4 2019 & Subsequent Events(1)

Financial

Performance

Integration &

Synergy Update

Balance Sheet &

Dividend

  • As reported revenue of $699.3 million for the quarter and $1,867.9 million for FY 2019
  • Pro forma(2) revenue of $1,054.3 million for the quarter and $4,182.2 million for FY 2019
    • Same store total revenue declined 9.9% on a pro forma basis in Q4 and declined 8.9% on a pro forma basis for FY 2019
  • Pro forma digital advertising and marketing services revenue of $912.5 million in FY 2019, or 21.8% of FY 2019 revenue
  • Events revenue nearly double the prior year on a pro forma basis in Q4 and up 43.7% on a pro forma basis for FY 2019
  • Completed the acquisition of Legacy Gannett on November 19, 2019
  • Integration plan targeting $300 million of synergies that will be implemented over 24 months
    • Additional cost savings beyond synergies also underway due to previously identified and/or implemented actions taken by both companies
  • Over $60 million in annualized synergies implemented by the end of the first quarter
    • Q1 2020 expenses to benefit $10-$15 million
  • $35.8 million of debt pay down in Q4 with another $9.4 million paid down subsequent to the quarter
    • $100-$125million in real estate sales expected to drive accelerated debt pay down during 2020 and 2021
  • $1.75 billion total debt outstanding as of February 27, 2020
  • Leverage of 3.6x at the end of Q4; expect to refinance Apollo loan at the end of 2021 when leverage is ~2.0x
  • Cash on the balance sheet of $156.0 million at the end of Q4
  • Expected Q1 2020 dividend of $0.19 per share
  1. As of February 27, 2020.
  2. Pro forma results reflect the consolidated operations, assuming the companies had been consolidated for the entire period.

3

Key FY 2019 Pro Forma Stats

$4.2 BILLION

• Print advertising makes up 31% of total revenue

PRO FORMA 2019 REVENUE

today, expected to drop to 21% over three years

$912.5 MILLION

• 49% from digital media and classifieds

DIGITAL ADVERTISING &

• 51% from digital marketing services

MARKETING SERVICES

$1.75 BILLION

• $35.8 million paid down in Q4 2019

$9.4 million paid down in Q1 2019 to date

Significantly Less Reliance on

Print Advertising Revenue

43%

47%

48%

49%

51%

OUTSTANDING DEBT AS OF

FEBRUARY 27, 2020

$0.19 DIVIDEND

Management expects to announce a first quarter

PER SHARE

dividend with Q1 2020 earnings in early May

15%

22% 24%

42%

26% 29%

EXPECTED Q1 2020 DIVIDEND

~812,000

Robust paid digital-only subscription volume and

DIGITAL-ONLY SUBSCRIPTIONS

revenue growth

$50.9 million pro forma FY 2019 digital-only

circulation revenue

31% 28% 24% 21%

2016

2019

2020F

2021F

2022F

%Print Ad

%Digital Ad & Mktg Serv

% Circulation & other

4

Gannett Priorities 2020-2021

  • Successfully implement $300 million in synergies over 24 months
    • Expect roughly half of synergies within 12 months, including revenue opportunities
  • Continue normal course cost reduction programs to mitigate current revenue declines
  • Aggressively pay down debt with goal to refinance term loan at the end of 2021
    • Leverage goal of ~2.0x, improving from 3.6x in Q4 2019
    • Sell $100-$125 million in real estate assets over 24 months
  • Stabilize revenue trends by leveraging increased scale, expanding growth products across entire portfolio and reducing reliance on print advertising, and implementing best practices
    • Significant same store revenue trend improvement expected in 2020
    • Print advertising represents 31% of revenues today, expected to fall to 21% in 2022
    • Requires investments into new product opportunities, technology, and testing / research
    • Focus on growth areas of paid digital subscriptions, events and digital marketing services businesses

5

Quarterly Business Update

Publishing

Consumer Marketing

  • Pro forma Paid digital-only subscribers grew 25.3% to ~812K

Newsroom Highlights

  • Kicked off the #VotingBecause campaign in partnership with the non-partisan organization vote.org as part of Elections 2020 coverage as a nationwide effort to register 150K Americans to vote in 2020
  • The Des Moines Register partnered with CNN on the Iowa Democratic debate and had our Chief Politics Reporter, Brianne Pfannenstiel, as one of the moderators
  • USATODAY Network investigative reporter Kenny Jacoby broke the story on how the NCAA athletes, convicted or disciplined for sexual misconduct, can transfer to other schools to continue playing
  • The Louisville Courier Journal reporter Beth Warren published a special investigation on "El Mencho," one of the world's most wanted men who rules the CJNG Mexican drug cartel

Awards

Marketing Solutions

  • Reporting digital marketing services as its own segment going forward
    • Legacy Gannett previously called this segment ReachLocal, which included the ReachLocal, Wordstream and SweetIQ businesses
    • The legacy New Media business, UpCurve, is incorporated into this segment
  • Strong double-digit growth in the legacy Gannett local markets within this segment
  • Legacy New Media trends challenged due to disruption from the transaction

Legacy Gannett Local Customer Growth(1)

Events

• Pro forma Q4 Revenue of $24.4 million, an

increase of 96.2% vs prior year driven by:

- Registration growth in existing races and

the addition of 11 winter races

- Expanded promotions including improved

performance in Community Choice

Awards

• Hosted the American Influencer Awards in

November 2019 which honored the greatest

social media influencers for beauty

- Over ten million social media shares and

vast international media coverage

including worldwide top trender on

Twitter

• The AP Sports Editors recognized 37 Gannett properties and

150 sports journalists for outstanding entries in the APSE

contest - The IndyStar won 11 awards including the Triple

Crown (top 10 for digital website and Sunday and daily print

sections)

• The Arizona Republic, USATODAY and the Center for Public

Integrity had their "Copy, Paste, Legislate" project named

a finalist for the Goldsmith Prize for Investigative

Reporting

• The Fort Collins Coloradoan was awarded the John P.

Murray Awared for Excellence in Audience Development

by the News Media Alliance

20%

~1,900

~2,300

- Over 600k live stream views

Q4 2018

Q4 2019

1) Client totals are rounded as of Q4 2019.

6

Integration & Synergy Update

  • Completed the acquisition of Legacy Gannett on November 19, 2019
  • Integration plan identified $275 - $300 million of synergies that will be implemented over 24 months
    • Additional cost savings beyond synergies value also underway due to previously identified and/or implemented actions taken by prior companies
  • Over $60 million in annualized synergies to be implemented by the end of Q1, which will reduce Q1 2020 expenses by $10-$15 million

Estimated Run-Rate

Synergies

Newspaper Operations

$115+ million

Corporate/Procurement

$70+ million

Other Operations

$50+ million

Systems

$40+ million

Areas Targeted for Savings

  • Rationalization of manufacturing and distribution
  • Centralization of management structure and consumer marketing
  • Consolidation of procurement
  • Centralization of finance
  • Elimination of duplicative public company functions and costs
  • Centralization of sales
  • Digital services
  • Events
  • Centralization and expansion of technology systems

Quarterly Update

  • Announced consolidation of 14 production facilities, additional being explored; all site visits are complete
  • Savings achieved in legal, human resources, executive
  • Negotiations in process with key vendors
  • Plans developed for alignment of ReachLocal/ThriveHive
  • Sales leadership announced
  • Planning well underway for consolidation of key advertising, circulation and back office systems

7

Balance Sheet & Dividend

  • $35.8 million of debt paid down in Q4 2019; $9.4 million paid down subsequent to the quarter from real estate sales
    - $100-$125 million of additional real estate sales targeted by the end of 2021
  • Leverage of 3.6x as of the end of Q4
  • Cash on the balance sheet of $156.0 million at the end of Q4
  • Q1 2020 dividend expected to be $0.19 per share, announced with Q1 2020 earnings in early May

Credit Facility Outstanding(1)

$2,050

3.75x

2.5

Dividend Threshold

$1,950

3.5x

3.6x

3.6x

Leverage

2

$1,850

$1,792

Debt Outstanding

$1,756

$1,747

$1,750

1.5

$1,650

$1,550

1

$1,450

0.5

$1,350

$1,250

0

Closing

Q4 2019

Q1 2020(1)

  1. Credit Facility outstanding as of February 27, 2020. Leverage assumes EBITDA equal to pro forma FY 2019.

8

Q4 2019 Financial Overview

Q4 2019 Results and Non-GAAP Highlights(1)

  • Total revenues of $699.3 million, or $1,054.3 million on a pro forma basis
    • Legacy Gannett pro forma same store total revenues decreased 10.1% to the prior year
    • Legacy New Media pro forma same store total revenues decreased 9.6% to the prior year
  • Adjusted EBITDA of $98.8 million, or $141.2 million on a pro forma basis
  • Free Cash Flow of ($79.7) million in the fourth quarter, impacted by transaction costs
  • Net loss attributable to Gannett of ($95.1) million reflects:
    • $100.7 million non-cashwrite-down related to revaluation of intangibles
    • $145.6 million of one-time cash charges due to restructuring and transaction related costs

GAAP Results Q4 2019

Non-GAAP Actual Highlights(1) Q4 2019

($ in millions)

As

Pro

($ in millions)

As

Pro

Reported

Forma

Reported

Forma

Operating revenues

$699.3

$1,054.3

Revenues

$699.3

$1,054.3

Adjusted EBITDA

$98.8

$141.2

Net loss attributable to

($95.1)

($115.7)

Free Cash Flow

($79.7)

N/A

Gannett

  1. A reconciliation of non-GAAP highlights is located in the appendix of the presentation.

10

Appendix

Gannett Pro Forma Diversified Revenue

($ in millions)

Q4 2019

Q4 2019

FY 2019

FY 2019

$

% of Total

$

% of Total

Print Advertising

Print Advertising Revenue

(1)

$328.7

31.2%

$1,296.5

31.0%

Digital Advertising and Marketing Services

Digital Classified

$18.3

1.7%

$83.9

2.0%

Digital Media

$100.0

9.5%

$360.2

8.6%

Digital Marketing Services

$113.1

10.7%

$466.0

11.1%

Total Digital Advertising and Marketing Services Revenue

(1)

$231.4

22.0%

$910.1

21.8%

Circulation & Other

Circulation

$384.4

36.5%

$1,574.1

37.6%

Events

$24.4

2.3%

$69.8

1.7%

Commercial Print, Distribution & Other

$85.4

8.1%

$331.7

7.9%

Total Subscription & Other Revenue

$494.1

46.9%

$1,975.6

47.2%

Total Revenue

$1,054.3

100%

$4,182.2

100%

Note: Small discrepancies may exist due to rounding of revenue or percentage categories.

  1. Events has been removed from all revenue categories.

12

Debt & Leverage Overview

($ in millions)

Ending Balance as

Rate

of December 31,

2019

Convertible Senior Notes

4.75%

$3.3

Credit Facility

11.5%

$1,756.2

Total Debt Outstanding

11.49% Blended Rate

$1,759.5

Q4 2019 pro forma LTM Adjusted EBITDA

$485.5

Cash on the Balance Sheet

$156.0

Gross Leverage Ratio(1)

3.6x

Net Leverage Ratio(2)

3.3x

  1. Gross leverage ratio is calculated by dividing total debt by Q4 2019 LTM Adjusted EBITDA.
  2. Net leverage ratio is calculated by subtracting cash on the balance sheet from total debt, and dividing it by Q4 2019 LTM Adjusted EBITDA.

13

2019 Same Store Revenue(1) Metrics

Q1 2019

Q2 2019

Q3 2019

Q4 2019

FY 2019

Print Advertising

-19.3%

-18.5%

-18.0%

-20.0%

-19.0%

Digital advertising and marketing services

-6.2%

-6.1%

-1.7%

-2.1%

-4.0%

Advertising and marketing services

-13.6%

-13.1%

-10.2%

-11.7%

-12.1%

Circulation

-5.9%

-5.9%

-5.8%

-10.2%

-7.0%

Commercial printing and other

-0.6%

-3.3%

1.3%

3.7%

0.4%

Legacy Gannett

-9.9%

-9.8%

-7.8%

-10.1%

-9.4%

Print Advertising

-14.9%

-14.3%

-16.1%

-15.4%

-15.2%

Digital advertising and marketing services

0.4%

2.6%

-0.3%

-1.3%

0.3%

Advertising and marketing services

-11.8%

-10.8%

-12.6%

-12.6%

-12.0%

Circulation

-5.6%

-5.5%

-5.8%

-7.2%

-6.1%

Commercial printing and other

7.2%

7.3%

6.6%

-3.1%

4.3%

Legacy New Media

-7.4%

-6.9%

-7.9%

-9.6%

-8.0%

Print Advertising

-17.6%

-16.8%

-17.2%

-18.4%

-17.6%

Digital advertising and marketing services

-5.1%

-4.5%

-1.5%

-1.7%

-2.8%

Advertising and marketing services

-13.0%

-12.3%

-11.0%

-12.1%

-12.0%

Circulation

-5.8%

-5.8%

-5.8%

-9.1%

-6.7%

Commercial printing and other

2.8%

1.6%

3.7%

1.8%

1.9%

Consolidated

-9.1%

-8.8%

-7.8%

-9.9%

-8.9%

  1. 2019 Same store revenues are defined as GAAP revenues excluding (1) revenues related to 2019 acquisitions from the date of the acquisition through the end of the year, (2) revenues related to 2018 acquisitions from the beginning of 2019 through the first year anniversary of their applicable acquisition date, (3) exited operations, (4) currency impacts, and (5) deferred revenue impacts related to the transaction.

14

Gannett Same Store Revenue Reconciliation - Fourth Quarter

(In thousands)

3 months ended

3 months ended

$ Variance

% Variance

Dec 31, 2019

Dec 31, 2018(1)

Legacy Gannett Pro Forma

654,132

751,405

(97,273)

-12.9%

Revenue

Acquired revenue

-

-

Exited operations

(15)

(11,157)

Currency Impacts

401

-

Deferred Revenue Adjustments

10,791

-

Same Store Revenue, Legacy

665,309

740,248

(74,939)

-10.1%

Gannett

(In thousands)

3 months ended 3 months ended

$ Variance

% Variance

Dec 31, 2019

Dec 30, 2018

Legacy New Media Revenue

400,121

416,039

(15,918)

-3.8%

Acquired revenue

(26,385)

-

Exited operations

-

(2,666)

Currency Impacts

-

-

Deferred Revenue Adjustments

-

-

Same Store Revenue, Legacy New

373,736

413,372

(39,636)

-9.6%

Media

(In thousands)

3 months ended

3 months ended

$ Variance

% Variance

Dec 31, 2019

Dec 30, 2018

Total Pro Forma Gannett

1,054,253

1,167,444

(113,191)

-9.7%

Revenue

Acquired revenue

(26,385)

-

Exited operations

(15)

(13,823)

Currency Impacts

401

-

Deferred Revenue Adjustments

10,791

-

Same Store Revenue, Total

1,039,045

1,153,621

(114,576)

-9.9%

Gannett

  1. Legacy Gannett's fourth quarter 2018 coincided with the Gregorian calendar and ended on December 31, 2018.

15

Gannett Same Store Revenue Reconciliation - Full Year

(In thousands)

12 months

12 months

ended

ended

$ Variance

% Variance

Dec 31, 2019

Dec 31, 2018(1)

Legacy Gannett Pro Forma

2,613,463

2,916,838

(303,375)

-10.4%

Revenue

Acquired revenue

(35,779)

-

(In thousands)

12 months

12 months

ended

ended

$ Variance

% Variance

Dec 31, 2019

Dec 30, 2018

Legacy New Media Revenue

1,568,757

1,526,024

42,732

2.8%

Acquired revenue

(176,870)

-

Exited operations

(322)

(43,712)

Currency Impacts

14,766

-

Deferred Revenue Adjustments

10,791

-

Exited operations

-

(13,188)

Currency Impacts

-

-

Deferred Revenue Adjustments

-

-

Same Store Revenue, Legacy

2,602,919

2,873,126

(270,207)

-9.4%

Same Store Revenue, Legacy New

1,391,887

1,512,836

(120,950)

-8.0%

Gannett

Media

(In thousands)

12 months

12 months

ended

ended

$ Variance

% Variance

Dec 31, 2019

Dec 30, 2018

Total Pro Forma Gannett

4,182,220

4,442,862

(260,643)

-5.9%

Revenue

Acquired revenue

(212,650)

-

Exited operations

(322)

(56,901)

Currency Impacts

14,766

-

Deferred Revenue Adjustments

10,791

-

Same Store Revenue, Total

3,994,806

4,385,962

(391,157)

-8.9%

Gannett

1) Legacy Gannett's fourth quarter 2018 coincided with the Gregorian calendar and ended on December 31, 2018.

16

Pro Forma 2019 Quarterly View

($m)

Q1

Q2

Q3

Q4

FY

Legacy GCI

Print advertising

186,192

184,246

161,609

177,991

710,038

Digital advertising and marketing services

179,044

184,083

183,614

187,786

734,527

Advertising and marketing services

365,236

368,329

345,223

365,777

1,444,565

Circulation

252,727

247,092

240,591

236,128

976,538

Commercial printing and other

45,462

44,916

49,755

52,227

192,360

Total Revenue

$663,425

$660,337

$635,569

$654,132

$2,613,463

Legacy NEWM

Print advertising

150,900

158,205

139,243

156,438

604,786

Digital advertising and marketing services

42,645

46,492

44,835

43,997

177,969

Advertising and marketing services

193,545

204,697

184,078

200,435

782,755

Circulation

152,165

150,850

146,254

148,248

597,517

Commercial printing and other

41,889

48,840

46,317

51,437

188,485

Total Revenue

$387,599

$404,387

$376,649

$400,121

$1,568,757

Consolidated

Print advertising

337,092

342,450

300,852

334,429

1,314,824

Digital advertising and marketing services

221,688

230,575

228,449

231,783

912,496

Advertising and marketing services

558,781

573,026

529,301

566,212

2,227,320

Circulation

404,891

397,942

386,845

384,376

1,574,055

Commercial printing and other

87,352

93,757

96,072

103,664

380,845

Total Revenue

$1,051,024

$1,064,725

$1,012,218

$1,054,253

$4,182,220

17

Non-GAAP Reconciliation

The Company uses non-GAAP financial performance and liquidity measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures, which may not be comparable to similarly titled measures reported by other companies, should not be considered in isolation from or as a substitute for the related GAAP measures and should be read together with financial information presented on a GAAP basis.

The Company defines its non-GAAP measures as follows:

  • Adjusted EBITDA is a non-GAAP financial performance measure the Company believes offers a useful view of the overall operation of our business. The Company defines Adjusted EBITDA as net income (loss) attributable to Gannett before (1) income tax expense (benefit), (2) interest expense, (3) gains or losses on early extinguishment of debt, (4) non-operating items, primarily pension costs, (5) depreciation and amortization, (6) integration and reorganization costs,
    (7) impairment of long-lived assets, (8) goodwill and intangible impairments, (9) net loss (gain) on sale or disposal of assets, (10) non-cash compensation, (11) acquisition costs, and (12) certain other non-recurring charges. The most directly comparable GAAP financial measure is net income (loss) attributable to Gannett.
  • Free cash flow is a non-GAAP liquidity measure that adjusts our reported GAAP results for items we believe are critical to the ongoing success of our business. The Company defines Free cash flow as net cash provided by operating activities as reported on the statement of cash flows less capital expenditures, which results in a figure representing Free cash flow available for use in operations, additional investments, debt obligations, and returns to shareholders. The most directly comparable GAAP financial measure is net cash from operating activities.

Management's Use of Non-GAAP Measures

Adjusted EBITDA and Free cash flow are not measurements of financial performance under GAAP and should not be considered in isolation or as an alternative to income from operations, net income (loss), cash flow from continuing operating activities, or any other measure of performance or liquidity derived in accordance with GAAP. We believe our non-GAAP measures as we have defined them are helpful in identifying trends in our day-to-day performance because the items excluded have little or no significance on our day-to-day operations. These measures provide an assessment of controllable expenses and afford management the ability to make decisions which are expected to facilitate meeting current financial goals as well as achieve optimal financial performance.

Adjusted EBITDA provides us with a measure of financial performance, independent of items that are beyond the control of management in the short-term such as depreciation and amortization, taxation, non-cash impairments, and interest expense associated with our capital structure. This metric measures our financial performance based on operational factors that management can impact in the short-term, namely the cost structure or expenses of the organization. Adjusted EBITDA is one of the metrics we use to review the financial performance of our business on a monthly basis.

We use Adjusted EBITDA as a measure of our day-to-day operating performance, which is evidenced by the publishing and delivery of news and other media and excludes certain expenses that may not be indicative of our day-to-day business operating results. We consider the unrealized (gain) loss on derivative instruments and the (gain) loss on early extinguishment of debt to be financing related costs associated with interest expense or amortization of financing fees. Accordingly, we exclude financing related costs such as the early extinguishment of debt because they represent the write-off of deferred financing costs, and we believe these non-cashwrite-offs are similar to interest expense and amortization of financing fees, which by definition are excluded from Adjusted EBITDA. Additionally, the non-cash gains (losses) on derivative contracts, which are related to interest rate swap agreements to manage interest rate risk, are financing costs associated with interest expense. Such charges are incidental to, but not reflective of, our day-to-day operating performance, and it is appropriate to exclude charges related to financing activities such as the early extinguishment of debt and the unrealized (gain) loss on derivative instruments which, depending on the nature of the financing arrangement, would have otherwise been amortized over the period of the related agreement and does not require a current cash settlement. Such charges are incidental to, but not reflective of our day-to-day operating performance of the business that management can impact in the short term.

Limitations of Non-GAAP Measures

Each of our non-GAAP measures has limitations as an analytical tool. They should not be viewed in isolation or as a substitute for GAAP measures of earnings or cash flows. Material limitations in making the adjustments to our earnings to calculate Adjusted EBITDA and using this non-GAAP financial measure as compared to GAAP net income (loss) include: the cash portion of interest / financing expense, income tax (benefit) provision, and charges related to impairment of long-lived assets, which may significantly affect our financial results.

A reader of our financial statements may find this item important in evaluating our performance, results of operations, and financial position. We use non-GAAP financial measures to supplement our GAAP results in order to provide a more complete understanding of the factors and trends affecting our business.

Adjusted EBITDA and Free cash flow are not alternatives to net income, income from operations, or cash flows provided by or used in operations as calculated and presented in accordance with GAAP. Readers of our financial statements should not rely on Adjusted EBITDA or Free cash flow as a substitute for any such GAAP financial measure. We strongly urge readers of our financial statements to review the reconciliation of income (loss) from continuing operations to Adjusted EBITDA and the reconciliation of net cash from operating activities to Free cash flow, along with our consolidated financial statements included elsewhere in this report. We also strongly urge readers of our financial statements to not rely on any single financial measure to evaluate our business. In addition, because Adjusted EBITDA and Free cash flow are not measures of financial performance under GAAP and are susceptible to varying calculations, the Adjusted EBITDA and Free cash flow measures as presented in this report may differ from and may not be comparable to similarly titled measures used by other companies.

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Gannett Non-GAAP Reconciliation - Quarter and Full Year(1)

(in thousands)

12 months ended

3 months ended

December 31,

December 31,

2019

2019

Net income (loss) attributable to Gannett

($119,842)

($95,088)

Income tax expense (benefit)

(85,994)

(90,924)

Interest expense

63,660

33,283

Loss on early extinguishment of debt

6,058

6,058

Other non-operating items, net

(9,511)

(8,709)

Depreciation and amortization

111,882

43,148

Integration and reorganization costs

47,401

37,899

Acquisition costs

60,618

45,300

Impairment of long-lived assets

3,009

540

Goodwill and mastheads impairment

100,743

100,743

Net (gain) loss on sale or disposal of assets

4,723

1,384

Non-cash compensation

11,324

8,790

Other items

29,800

16,397

Adjusted EBITDA (non-GAAP basis)

$223,871

$98,821

(in thousands)

Net cash flow from operating activities (GAAP basis)

Capital expenditures

Free cash flow (non-GAAP basis)

(2)

12 months ended

3 months ended

December 31,

December 31,

2019

2019

$25,535

($72,995)

(13,978)

(6,697)

$11,557

($79,692)

  1. Small discrepancies may exist due to rounding.
  2. Free cash flow for the fourth quarter was negatively impacted by $87.8 million of pension benefits paid as a result of the Acquisition, $35.9 million of integration and reorganization costs, $19.3 million of acquisition costs, and $2.5 million of other one-time adjustments. Free cash flow for the full year was impacted by $87.8 million of pension benefits paid as a result of the Acquisition, $45.4 million of integration and reorganization costs, $38.4 million of acquisition costs, and $11.3 million of other one-time adjustments.

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Gannett Co. Inc. published this content on 27 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 February 2020 13:10:18 UTC