Pensions and other postretirement benefit plans

12 Months Ended

Dec. 31, 2022

Retirement Benefits [Abstract]

Pensions and other postretirement benefit plans

NOTE 9 — Pensions and other postretirement benefit plans

We, along with our subsidiaries, sponsor various defined benefit retirement plans, including plans established under collective bargaining agreements. Our retirement plans include the Gannett Retirement Plan (the "GR Plan"), the Newsquest and Romanes Pension Schemes in the U.K. (the "U.K. Pension Plans"), the Newspaper Guild of Detroit Pension Plan, the George W. Prescott Publishing Company Pension Plan (the "GWP Plan") and the Times Publishing Company Defined Benefit Pension Plan (the "TPC Plan"). The GWP Plan was amended to freeze all future benefit accruals by December 31, 2008, except for a select group of union employees whose benefits were frozen in 2009, the GR Plan was amended to freeze all future benefit accruals by August 1, 2008, except for a select group of unions and the TPC Plan was frozen as of May 31, 2007, prior to the Company's acquisition of the TPC Plan.

The Company also maintains several postretirement medical and life insurance plans which cover certain employees. We also provide health care and life insurance benefits to certain retired employees who meet age and service requirements. Most of our retirees contribute to the cost of these benefits and retiree contributions are increased as actual benefit costs increase. The cost of providing retiree health care and life insurance benefits is actuarially determined. Our policy is to fund benefits as claims and premiums are paid. We use a December 31 measurement date for these plans.

The following table presents the change in the projected benefit obligation for the years ended December 31:

	Pension benefits				Postretirement benefits
In thousands	2022		2021		2022		2021
Projected benefit obligation at beginning of period	$	3,003,324	$	3,161,146	$	64,038	$	75,586
Service cost	1,754		2,064		77		89
Interest cost	71,733		68,139		1,770		1,758
Actuarial (gain) loss	(724,223)		(41,239)		(14,092)		(7,936)
Foreign currency translation	(107,930)		(7,182)		—		—
Benefits and expenses paid	(147,640)		(179,604)		(4,750)		(5,459)
Pension settlement	(454,838)		—		—		—
Projected benefit obligation at end of period	$	1,642,180	$	3,003,324	$	47,043	$	64,038

The following table presents the change in the fair value of plan assets for the years ended December 31, and the plans' funded status at December 31:

	Pension benefits				Postretirement benefits
In thousands	2022		2021		2022		2021
Fair value of plan assets at beginning of period	$	3,218,953	$	3,225,372	$	—	$	—
Actual return on plan assets	(792,302)		130,026		—		—
Employer contributions	18,140		52,161		4,750		5,459
Pension settlement	(454,838)		—		—		—
Benefits paid	(147,640)		(179,604)		(4,750)		(5,459)
Administrative expenses	—		—		—		—
Foreign currency translation	(121,503)		(9,002)		—		—
Fair value of plan assets at end of period	$	1,720,810	$	3,218,953	$	—	$	—
Funded status at end of period	78,630		215,629		(47,043)		(64,038)
Unrecognized actuarial (gain) loss	118,914		(75,280)		(16,154)		(2,652)
Unrecognized prior service cost	1,561		1,894		—		—
Net prepaid (accrued) benefit cost	199,105		142,243		(63,197)		(66,690)

Amounts recognized in the Consolidated balance sheets at December 31, are listed below:

	Pension benefits				Postretirement benefits
In thousands	2022		2021		2022		2021
Other assets	$	87,909	$	229,585	$	—	$	—
Accounts payable and accrued liabilities	332		332		5,280		5,725
Pension and other postretirement benefit obligations	8,947		13,624		41,763		58,313
Accumulated other comprehensive (loss) income	(120,475)		73,386		16,154		2,652
Net prepaid (accrued) benefit cost	$	199,105	$	142,243	$	(63,197)	$	(66,690)

Accumulated pension benefit obligations were $1.6 billion and $3.0 billion as of December 31, 2022 and 2021, respectively. For the Funded plans, the fair value of plan assets exceeds the projected benefit obligation and accumulated benefit obligation. For the Underfunded plans, the projected benefit obligation and accumulated benefit obligation exceed the fair value of plan assets. Information about funded and unfunded pension plans at December 31:

	Funded plans				Underfunded plans
In thousands	2022		2021		2022		2021
Projected benefit obligation	$	1,584,658	$	2,927,968	$	57,522	$	75,356
Accumulated benefit obligation	1,583,793		2,925,870		57,522		75,356
Fair value of plan assets	1,672,568		3,157,553		48,242		61,400

Net periodic benefit cost and amounts recognized in Other comprehensive income (loss)

The combined net pension and postretirement benefit recognized in the Consolidated statements of operations and comprehensive income (loss) was $57.1 million, $93.2 million and $69.4 million for the years ended December 31, 2022, 2021, and 2020, respectively.

The following table presents the components of net periodic benefit expense (benefit) at December 31, 2022, 2021 and 2020:

	Pension benefits						Postretirement benefits
In thousands	2022		2021		2020		2022		2021		2020
Components of net periodic benefit cost:
Operating expenses:
Service cost - benefits earned during the period	$	1,754	$	2,064	$	2,618	$	77	$	89	$	105
Non-operating expenses:
Interest cost on benefit obligations	71,733		68,139		82,581		1,770		1,758		2,315
Expected return on plan assets	(131,295)		(165,390)		(157,082)		—		—		—
Amortization of actuarial loss (gain)	89		152		102		(589)		(88)		(65)
Amortization of prior service costs	66		—		—		—		—		—
Pension settlement gain	(727)		—		—		—		—		—
Other adjustment	—		72		—		—		—		—
Total non-operating (benefit) expense	(60,134)		(97,027)		(74,399)		1,181		1,670		2,250
Total (benefit) expense for retirement plans	$	(58,380)	$	(94,963)	$	(71,781)	$	1,258	$	1,759	$	2,355
Other changes in plan assets and benefit obligations recognized in Other comprehensive income (loss):
Net actuarial loss (gain)	$	199,374	$	(5,875)	$	(67,119)	$	(14,092)	$	(7,936)	$	6,648
Amortization of net actuarial (loss) gain	(89)		(152)		(102)		589		88		65
Change in prior service cost	—		—		1,905		—		—		—
Amortization of prior service costs	(66)		—		—		—		—		—
Other adjustment	(5,283)		387		2,108		—		—		—
(Gain) loss recognized in Other comprehensive income (loss)	$	193,936	$	(5,640)	$	(63,208)	$	(13,503)	$	(7,848)	$	6,713

Assumptions

The following assumptions were used in connection with the Company's actuarial valuation of its pension plans and postretirement benefit obligations at December 31:

	Pension benefits				Postretirement benefits
	2022		2021		2022		2021
Weighted average discount rate	5.4	%	2.6	%	5.7	%	3.0	%
Rate of increase in future compensation levels (a)	2.0	%	2.0	%	N/A		N/A
Current year medical trend	N/A		N/A		6.5	%	6.0	%
Ultimate year medical trend	N/A		N/A		4.5	%	4.5	%
Year of ultimate trend	N/A		N/A		2031		2028

(a) Relates only to the Newspaper Guild of Detroit defined benefit pension plans.

The following assumptions were used to calculate the net periodic benefit cost for the Company's pension plans and postretirement benefit obligations at December 31, 2022, 2021 and 2020:

	Pension benefits						Postretirement benefits
	2022		2021		2020		2022		2021		2020
Weighted average discount rate	3.8	%	2.2	%	2.9	%	3.0	%	2.6	%	3.3	%
Rate of increase in future compensation levels (a)	2.0	%	2.0	%	2.0	%	N/A		N/A		N/A
Weighted average expected return on assets	4.8	%	5.3	%	5.8	%	N/A		N/A		N/A
Current year medical trend	N/A		N/A		N/A		6.0	%	6.0	%	6.0	%
Ultimate year medical trend	N/A		N/A		N/A		4.5	%	4.5	%	4.5	%
Year of ultimate trend	N/A		N/A		N/A		2028		2028		2025

(a) Relates only to the Newspaper Guild of Detroit defined benefit pension plans.

To determine the expected long-term rate of return on pension plan assets, the Company considers the current and expected asset allocations as well as historical and expected returns on various categories of plan assets, input from the actuaries and investment consultants, and long-term inflation assumptions. The expected allocation of pension plan assets is based on a diversified portfolio consisting of domestic and international equity securities and fixed income securities. This expected return is then applied to the fair value of plan assets. The Company amortizes experience gains and losses, including the effects of changes in actuarial assumptions and plan provisions, over a period equal to the average future service of plan participants or over the average remaining life expectancy of inactive participants. The Company updates the estimates used to measure the defined benefit pension assets and obligations annually or upon a remeasurement event.

The fiduciaries of the pension plans set investment policies and strategies for the pension trusts. Objectives include preserving the funded status of the plan and balancing risk against return.

The weighted average target asset allocation of our plans for 2023 and allocations at the end of 2022 and 2021, by asset category, are presented in the table below:

	Target allocation	Allocation of plan assets
	2023	2022	2021
Equity securities	21%	16%	21%
Debt securities	63%	60%	65%
Alternative investments(a)	16%	24%	14%
Total	100%	100%	100%

(a)Alternative investments include real estate, private equity and hedge funds.

Purchase of Pension Annuity Contract

On August 31, 2022, Gannett Media Corp., a wholly-owned subsidiary of the Company, as sponsor of the GR Plan, entered into an agreement pursuant to which the GR Plan used a portion of its assets to purchase annuities from two insurance companies (the "Insurers") and transferred approximately $450 million of the GR Plan's pension liabilities and related pension assets. As of August 31, 2022, this agreement irrevocably transferred to the Insurers future GR Plan benefit obligations for certain U.S. retirees and beneficiaries ("Participants") beginning with payments due to the Participants on November 1, 2022 (the "Effective Date") and Gannett Media Corp. has no financial responsibility for the Participants' benefits on or after such date. As of the Effective Date, the Insurers assumed responsibility for administrative and customer service support, including distribution of payments to the Participants. Participants' benefits were not reduced as a result of this transaction. As a result of this transaction, we were required to remeasure the related plan benefit obligations and assets as of August 31, 2022 reflecting the use of an updated discount rate. The plan remeasurement resulted in a decrease of $99.9 million to our net funded pension obligation, which included a decrease in benefit obligation of $281.8 million (primarily due to an increase in the discount rate from 2.95% at January 1, 2022 to 5.05%) and an incremental decrease in plan assets of $381.7 million. In addition, we recognized a noncash pension settlement gain of $0.7 million ($0.5 million after tax) for the GR Plan for the year ended December 31, 2022, which represented the accelerated recognition of actuarial gains that were included in accumulated other comprehensive income (loss) within stockholders' equity.

Contributions

We are contractually obligated to contribute to our pension and postretirement benefit plans. During the year ended December 31, 2022, we contributed $18.1 million and $4.8 million to our pension and other postretirement plans, respectively. Additionally, in response to the COVID-19 pandemic, our GR Plan in the U.S. deferred certain contractual contributions and negotiated a contribution payment plan of $5.0 million per quarter from December 31, 2020 through the end of June 30, 2022. 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. 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 $5.0 million of contractual contributions subsequent to June 30, 2022.

Future contributions to our pension and postretirement benefit plans, which we are contractually obligated to contribute, are estimated to be $6.7 million in 2023. Contributions beyond 2023 are not estimated due to uncertainties regarding significant assumptions involved in estimating these contributions, such as interest rate levels, as well as the amount and timing of invested

asset returns. These future contributions do not include additional contributions which may be required to meet IRS minimum funding standards as these contributions are subject to uncertainties regarding significant assumptions involved in their estimation such as interest rate levels as well as the amount and timing of invested asset returns.

Estimated Future Benefit Payments

We estimate making the following benefit payments, which reflect expected future service:

In thousands	Pension benefits		Postretirement benefits
2023	$	137,927	$	5,428
2024	137,563		5,205
2025	136,113		4,962
2026	134,499		4,700
2027	133,066		4,448
Thereafter	570,451		18,641

The amounts above exclude the participants' share of the benefit cost. We expect no subsidy benefits for 2023 and beyond.

Multiemployer plans

The Company is a participant in six multiemployer pension plans covering certain employees with collective bargaining agreements ("CBAs"). The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects:

•The Company plays no part in the management of plan investments or any other aspect of plan administration;

•Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers;

•If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers; and

•If the Company chooses to stop participating in some of its multiemployer plans, the Company may be required to pay those plans in an amount based on the unfunded status of the plan, referred to as withdrawal liability.

The Company's participation in these plans for the year ended December 31, 2022, is outlined in the table below. The "EIN/Pension Plan Number" column provides the Employee Identification Number ("EIN") and the three-digit plan number. Unless otherwise noted, the two most recent Pension Protection Act zone statuses available are for the plans for the years ended December 31, 2022, and 2021, respectively. The zone status is based on information the Company received from the plan and is certified by the plan's actuary. Among other factors, plans in the red zone are generally less than 65% funded; plans in the orange zone are both (i) less than 80% funded and (ii) have an accumulated/expected funding deficiency in any of the next six plan years, net of any amortization extensions; plans in the yellow zone meet either one of the criteria mentioned in the orange zone; and plans in the green zone are at least 80% funded. The "FIP/RP Status Pending/Implemented" column indicates plans for which a financial improvement plan ("FIP") or a rehabilitation plan ("RP") is either pending or has been implemented. The last column lists the expiration date(s) of the collective-bargaining agreement(s) to which the plans are subject. The Company makes all required contributions to these plans as determined under the respective CBAs. For each of the plans listed below, the Company's contribution represented less than 5% of total contributions to the plan.

EIN/Plan number

Zone status Year Ended

FIP/RP status pending/implemented

Contributions (In thousands)

Surcharge imposed

Expiration dates of CBAs

Pension Plan Name

December 31, 2022

December 31, 2021

2022

2021

2020

CWA/ITU Negotiated Pension Plan

13-6212879/001

Red

Red

Implemented

$

276

$

369

$

393

No

March 30, 2024 and April 25, 2024

GCIU—Employer Retirement Benefit Plan(a)

91-6024903/001

Red

Red

Implemented

42

63

89

No

4/25/2024

The Newspaper Guild International Pension Plan(a)

52-1082662/001

Red

Red

Implemented

15

12

92

No

10/6/2021

IAM National Pension Plan(a) (b)

51-6031295/002

Red

Red

Implemented

177

188

173

No

January 6, 2024 and January 8, 2024

Teamsters Pension Trust Fund of Philadelphia and Vicinity(a)

23-1511735/001

Green as of Apr. 29, 2022

Yellow

N/A

1,249

1,098

1,218

N/A

6/2/2022

Central Pension Fund of the International Union of Operating Engineers and Participating Employers(a)

36-6052390/001

Green

Green as of Jan. 31, 2021

N/A

56

59

59

N/A

1/9/2024

Total

$

1,815

$

1,789

$

2,024

(a)This plan has elected to utilize special amortization provisions provided under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010.

(b)The trustees of this plan have voluntarily elected to put the fund in critical status to strengthen its funding position.

As of December 31, 2022, the total unpaid balance for the Company's withdrawal liabilities was approximately $44.9 million, which are payable over 16.2 years.

Defined contribution plans

Employees are immediately eligible to participate in the Gannett Media Corp. 401(k) Savings Plan (the "Gannett 401(k) Plan") and can elect to save up to 75% of compensation on a pre-tax basis, subject to IRS limitations. Effective January 1, 2021, employees covered under collective bargaining agreements are eligible to participate in the Gannett 401(k) Plan only if participation has been bargained, unless previously eligible in the New Media Investment Group Inc. Retirement Savings Plan (the "New Media 401(k) Plan"). The plan's matching formula is 100% of the first 4% of employee contributions and 50% on the next 2% of employee contributions. Matching contributions to the Gannett 401(k) Plan, with the exception of certain employees covered under collective bargaining agreements, were suspended in August 2020. Beginning on July 4, 2021 or July 5, 2021 (as applicable) matching contributions to the Gannett 401(k) Plan were reinstated with eligible pay. In addition, in October 2022, matching contributions to the Gannett 401(k) Plan, with the exception of certain employees covered under collective bargaining agreements, were suspended and have not resumed. For the years ended December 31, 2022, 2021, and 2020, the Company's matching contributions were $13.5 million, $8.2 million and $16.0 million, respectively.