Supplemental equity information

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Supplemental equity information

NOTE 13 — Supplemental equity information

Loss per share

The following table sets forth the information to compute basic and diluted loss per share:

	Year ended December 31,
In thousands, except per share data	2021		2020		2019
Net loss attributable to Gannett	$	(134,962)	$	(670,479)	$	(119,842)
Basic weighted average shares outstanding	134,783		131,742		67,671
Diluted weighted average shares outstanding	134,783		131,742		67,671

The Company excluded the following securities from the computation of diluted income per share because their effect would have been antidilutive:

	Year ended December 31,
In thousands	2021	2020	2019
Warrants	845	845	1,362
Stock options	6,068	6,068	2,905
Restricted stock grants (a)	9,854	7,694	9,494
2027 Notes (b)	98,168	27,482	—

(a)Includes Restricted stock awards ("RSA"), Restricted stock units ("RSU") and Performance stock units ("PSU").

(b) Represents the total number of shares that would be convertible at December 31, 2021 and 2020 as stipulated in the 2027 Notes Indenture. The amount for the year ended December 31, 2021 reflects the adjustment for the weighted average impact of the repurchase of $11.8 million aggregate principal of 2027 Notes as described below.

The 2027 Notes may be converted at any time by the holders into cash, shares of the Company’s Common Stock or any combination of cash and Common Stock, at the Company’s election. In November 2021, we entered into separate, privately negotiated agreements with certain holders of our 2027 Notes and repurchased $11.8 million aggregate principal of our outstanding 2027 Notes for $15.3 million in cash, including accrued interest. At December 31, 2021, conversion of all of the 2027 Notes into Common Stock (assuming the maximum increase in the conversion rate as a result of a Make-Whole Fundamental Change but no other adjustments to the conversion rate), would result in the issuance of an aggregate of 287.2 million shares of Common Stock. The Company has excluded approximately 190.1 million shares from the loss per share calculation, representing the difference between the total number of shares that would be convertible at December 31, 2021 and the total number of shares issuable assuming the maximum increase in the conversion rate.

Shelf registration statement

On March 19, 2021, we filed an automatic shelf registration statement with the SEC, under which we have the ability to offer and sell an indeterminate amount of various types of securities in the future. This replaced our previous shelf registration statement dated April 5, 2018. The specific terms of any securities that may be issued under our shelf registration statement and the timing of any such offers and sales will depend on a variety of factors, including the underlying price of our Common Stock and our capital needs. We believe that the shelf registration statement provides us with additional financing flexibility to efficiently access the capital markets when desired.

Share-based compensation

Share-based compensation expense was $18.4 million, $26.4 million and $11.3 million for the years ended December 31, 2021, 2020, and 2019, respectively. Total compensation cost not yet recognized related to non-vested awards as of December 31, 2021 was $24.8 million, which is expected to be recognized over a weighted average period of 2.0 years through November 2023.

Equity awards

On February 26, 2020, the Company adopted the 2020 Omnibus Incentive Compensation Plan (the "2020 Incentive Plan") to reinforce the long-term commitment of the Company's independent directors, officers and other employees and consultants to the Company's success, assist the Company in attracting and retaining individuals with experience and ability, and to benefit the Company's stockholders by encouraging high levels of performance by individuals whose performance is a key element in achieving the Company's continued success. The Company also has granted awards under the Gannett Co. Inc. 2015 Omnibus Incentive Compensation Plan (the "2015 Incentive Plan"), which was frozen on December 20, 2020 such that no new awards were granted pursuant to the 2015 Incentive Plan after this date.

With respect to restricted stock awards ("RSAs"), the 2020 Incentive Plan provides that if service terminates for certain specified conditions, all unvested shares of restricted stock may be forfeited. During the period prior to the lapse and removal of the vesting restrictions, a grantee of a RSA will have all the rights of a stockholder, including without limitation, the right to vote and the right to receive all dividends or other distributions. Any dividends or other distributions that are declared with respect to the shares of restricted stock will be paid at the time such shares vest. The value of the RSAs on the date of issuance is recognized in Selling, general, and administrative expenses over the vesting period with a corresponding increase to additional paid-in-capital. RSAs generally vest in equal annual installments over a three-year period subject to the participants' continued employment with the Company.

The following table outlines RSA activity:

	Year ended December 31,
	2021			2020			2019
	Number of RSAs (In thousands)	Weighted- average grant date fair value		Number of RSAs (In thousands)	Weighted- average grant date fair value		Number of RSAs (In thousands)	Weighted- average grant date fair value
Unvested at beginning of year	5,181	$	3.39	317	$	14.61	384	$	16.11
Granted	4,100	5.29		6,781	3.35		301	13.62
Vested	(1,956)	3.80		(1,280)	5.72		(274)	15.45
Forfeited	(376)	4.76		(637)	3.90		(94)	15.12
Unvested at end of year	6,949	$	4.32	5,181	$	3.39	317	$	14.61

As of December 31, 2021, the aggregate intrinsic value of unvested RSAs was $37.0 million.

Restricted stock units ("RSUs") generally vest in equal annual installments over a three-year period subject to the participants' continued employment with the Company and we recognize compensation costs for these awards based on the fair market value of the award as of the grant date. Performance stock units ("PSUs") are subject to the achievement of certain performance goals over the eligible period. Compensation cost ultimately recognized for these PSUs will equal the grant-date fair market value of the unit that coincides with the actual outcome of the performance conditions. On an interim basis, we record compensation cost based on the expected level of achievement of the performance conditions.

The following table outlines RSU and PSU activity:

	Year ended December 31,
	2021			2020			2019
	Number of RSUs & PSUs (In thousands)	Weighted- average grant date fair value		Number of RSUs & PSUs (In thousands)	Weighted- average grant date fair value		Number of RSUs & PSUs (In thousands)	Weighted- average grant date fair value
Unvested at beginning of year	2,513	$	6.28	7,368	$	6.28	—	$	—
Granted	2,000	3.04		282	0.90		10,466	6.28
Vested	(1,576)	6.28		(4,713)	6.27		(3,081)	6.28
Forfeited	(32)	6.28		(424)	2.81		(17)	6.28
Unvested at end of year	2,905	$	4.05	2,513	$	6.28	7,368	$	6.28

As of December 31, 2021, the aggregate intrinsic value of unvested RSUs and PSUs was $15.5 million.

Former Manager stock options

As of December 31, 2021, the Former Manger held 6,068 thousand stock options outstanding, of which 5,541 thousand are exercisable. As of December 31, 2021, stock options outstanding had a weighted-average grant date fair value, weighted-average exercise price and weighted-average remaining contractual term of $1.78, $13.97 and 6.2 years, respectively.

Rights Agreement

On April 6, 2020, the Company's board of directors (the "Board") adopted a stockholder rights plan in the form of a Section 382 Rights Agreement ("Rights Agreement") to preserve and protect the Company's income tax net operating loss carryforwards ("NOLs") and other tax assets. The Rights Agreement was approved by the Company's stockholders on June 7, 2021 at the 2021 annual meeting of stockholders. As of December 31, 2021, the Company had approximately $613.4 million of NOLs available which could be used in certain circumstances to offset future federal taxable income.

Under the Rights Agreement, the Board declared a non-taxable dividend of one preferred share purchase right for each outstanding share of Common Stock. The rights will be exercisable only if a person or group acquires 4.99% or more of Gannett’s Common Stock. Gannett’s existing stockholders that beneficially own in excess of 4.99% of the Common Stock are "grandfathered in" at their current ownership level and the rights then become exercisable if any of those stockholders acquire an additional 0.5% or more of Common Stock of the Company. If the rights become exercisable, all holders of rights, other than the person or group triggering the rights, will be entitled to purchase Gannett Common Stock at a 50% discount or Gannett may exchange each right held by such holders for one share of Common Stock. Rights held by the person or group triggering the rights will become void and will not be exercisable. The Board has the discretion to exempt any person or group from the provisions of the Rights Agreement.

The Rights Agreement will continue in effect until April 5, 2023. The Board has the ability to terminate the plan if it determines that doing so would be in the best interest of the Company's stockholders. The rights may also expire at an earlier date if certain events occur, as described more fully in the Rights Agreement filed by the Company with the Securities and Exchange Commission.

Preferred stock

The Company has authorized 300,000 shares of preferred stock, par value $0.01 per share, issuable in one or more series designated by the Board, of which 150,000 shares have been designated as Series A Junior Participating Preferred Stock, none of which are outstanding. There were no issuances of preferred stock during the year ended December 31, 2021.

Accumulated other comprehensive income (loss)

The following tables summarize the components of, and the changes in, Accumulated other comprehensive income (loss), net of tax:

In thousands	Pension and postretirement benefit plans		Foreign currency translation		Total
Balance at December 30, 2018	$	(6,881)	$	—	$	(6,881)
Other comprehensive income before reclassifications	7,731		7,266		14,997
Amounts reclassified from accumulated other comprehensive income (a) (b)	86		—		86
Net current period other comprehensive income, net of taxes	7,817		7,266		15,083
Balance at December 31, 2019	$	936	$	7,266	$	8,202
Other comprehensive income before reclassifications	39,479		2,466		41,945
Amounts reclassified from accumulated other comprehensive income (a) (b)	26		—		26
Net current period other comprehensive income, net of taxes	39,505		2,466		41,971
Balance at December 31, 2020	$	40,441	$	9,732	$	50,173
Other comprehensive income (loss) before reclassifications	10,382		(604)		9,778
Amounts reclassified from accumulated other comprehensive income (a) (b)	47		—		47
Net current period other comprehensive income (loss), net of taxes	10,429		(604)		9,825
Balance at December 31, 2021	$	50,870	$	9,128	$	59,998

(a)Accumulated other comprehensive income component represents amortization of actuarial loss and is included in the computation of net periodic benefit cost. See Note 10 — Pensions and other postretirement benefit plans.

(b) Amounts reclassified from accumulated other comprehensive income are recorded net of tax impacts of $0.02 million and $0.01 million for the years ended December 31, 2021 and 2020, respectively. There was no tax impact for the year ended December 31, 2019.