Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 10-Q

_______________________


ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 27, 2015


¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-36874

___________________________

GANNETT CO., INC.
(Exact name of registrant as specified in its charter)

___________________________



Delaware		47-2390983
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7950 Jones Branch Drive, McLean, Virginia		22107-0910
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (703) 854-6000.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



Large Accelerated Filer	ý	Accelerated Filer	¨

Non-Accelerated Filer	¨	Smaller Reporting Company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ¨ No ý

The total number of shares of the registrant’s Common Stock, $0.01 par value outstanding as of October 30, 2015 was 115,458,867.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS

Gannett Co., Inc. and Subsidiaries

In thousands



	Sept. 27, 2015		Dec. 28, 2014
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	142,772	$	71,947
Accounts receivable, less allowance for doubtful accounts of $8,291 and $5,788, respectively	309,770		357,523
Inventories	31,406		38,944
Assets held for sale	20,599		18,434
Prepaid expenses and other current assets	63,758		44,222
Total current assets	568,305		531,070
Property, plant and equipment at cost, less accumulated depreciation of $1,691,592 and $1,655,676, respectively	899,439		934,483
Goodwill	577,519		544,345
Intangible assets, net	80,970		50,115
Deferred income taxes	116,993		261,322
Investments and other assets	74,075		63,125
Total assets	$	2,317,301	$	2,384,460



LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	131,658		$	125,888
Accrued expenses	212,937			192,897
Dividends payable	18,462			—
Income taxes payable	3,272			13,675
Deferred income	85,554			77,123
Total current liabilities	451,883			409,583
Postretirement medical and life insurance liabilities	88,220			93,474
Pension liabilities	527,000			770,041
Other noncurrent liabilities	170,084			173,890
Total liabilities	1,237,187			1,446,988
Equity
Preferred stock of $0.01 par value per share, 5,000,000 shares authorized, none issued	—			—
Common stock of $0.01 par value per share, 500,000,000 shares authorized, 115,407,088 shares issued	1,154			—
Additional paid-in capital	1,666,390			—
Retained earnings	20,704			—
Former parent’s investment, net	—			1,615,584
Accumulated other comprehensive loss	(608,134		)	(678,112		)
Total equity	1,080,114			937,472
Total liabilities and equity	$	2,317,301		$	2,384,460

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF INCOME

Gannett Co., Inc. and Subsidiaries

Unaudited, in thousands, except share data



	Three months ended						Nine months ended
	Sept. 27, 2015			Sept. 28, 2014			Sept. 27, 2015		Sept. 28, 2014

Operating revenues:
Advertising	$	384,149		$	442,088		$	1,191,902	$	1,358,504
Circulation	265,227			274,542			802,389		829,872
Other	51,860			50,661			151,377		164,570
Total operating revenues	701,236			767,291			2,145,668		2,352,946

Operating Expenses:
Cost of sales and operating expenses	446,358			486,770			1,394,733		1,510,980
Selling, general and administrative expenses	173,035			180,550			528,248		551,020
Depreciation	25,291			24,925			73,677		73,767
Amortization	3,096			3,461			10,103		10,448
Facility consolidation and asset impairment charges	1,343			5,390			7,989		24,413
Total operating expenses	649,123			701,096			2,014,750		2,170,628
Operating income	52,113			66,195			130,918		182,318

Non-operating income:
Equity income in unconsolidated investees, net	609			2,737			11,411		9,995
Other non-operating items, net	(3,415		)	(1,851		)	18,022		(1,172		)
Total non-operating (expense) income	(2,806		)	886			29,433		8,823

Income before income taxes	49,307			67,081			160,351		191,141
Provision for income taxes	10,141			16,524			34,611		47,296
Net income	$	39,166		$	50,557		$	125,740	$	143,845

Earnings per share – basic	$	0.34		$	0.44		$	1.09	$	1.25
Earnings per share – diluted	$	0.33		$	0.44		$	1.08	$	1.25

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME

Gannett Co., Inc. and Subsidiaries

Unaudited, in thousands



	Three months ended						Nine months ended
	Sept. 27, 2015			Sept. 28, 2014			Sept. 27, 2015			Sept. 28, 2014

Net income	$	39,166		$	50,557		$	125,740		$	143,845
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	(17,071		)	(22,896		)	(11,996		)	(6,626		)
Pension and other postretirement benefit items:
Amortization of prior service credit, net	(650		)	(1,280		)	(2,104		)	(3,218		)
Amortization of actuarial loss	13,909			10,666			42,369			31,910
Remeasurement of pension liability	64,811			—			64,811			—
Remeasurement of postretirement benefits liability	1,983			—			1,983			32,887
Other	14,899			18,066			10,503			2,621
Pension and other postretirement benefit items	94,952			27,452			117,562			64,200
Other comprehensive income, before tax	77,881			4,556			105,566			57,574
Income tax effect related to components of other comprehensive income	(34,072		)	(6,846		)	(42,825		)	(22,103		)
Other comprehensive income (loss), net of tax	43,809			(2,290		)	62,741			35,471
Comprehensive income	$	82,975		$	48,267		$	188,481		$	179,316

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

Gannett Co., Inc. and Subsidiaries

Unaudited, in thousands



	Nine months ended
	Sept. 27, 2015			Sept. 28, 2014

Cash flows from operating activities:
Net income	$	125,740		$	143,845
Adjustments to reconcile net income to net cash flow from operating activities:
Gain on acquisition	(21,799		)	—
Depreciation and amortization	83,780			84,215
Facility consolidation and asset impairment charges	7,989			24,413
Pension and other postretirement expenses, net of contributions	(129,501		)	(87,523		)
Equity income in unconsolidated investees, net	(11,411		)	(9,995		)
Stock-based compensation	12,359			11,973
Change in other assets and liabilities, net	85,657			30,425
Net cash flow from operating activities	152,814			197,353
Cash flows from investing activities:
Capital expenditures	(30,945		)	(51,579		)
Payments for acquisitions, net of cash acquired	(28,668		)	—
Payments for investments	(2,750		)	(1,500		)
Proceeds from investments	12,402			11,615
Proceeds from sale of certain assets	16,324			21,701
Net cash flow used for investing activities	(33,637		)	(19,763		)
Cash flows from financing activities:
Deferred payments for acquisitions	(1,218		)	(1,313		)
Proceeds from issuance of common stock upon exercise of stock options	2,727			—
Transactions with former parent, net	(49,701		)	(188,984		)
Net cash flow used for financing activities	(48,192		)	(190,297		)
Effect of currency exchange rate change on cash	(160		)	(56		)
Increase (decrease) in cash and cash equivalents	70,825			(12,763		)
Balance of cash and cash equivalents at beginning of period	71,947			78,596
Balance of cash and cash equivalents at end of period	$	142,772		$	65,833

Supplemental cash flow information:
Cash paid for taxes, net of refunds	$	6,545		$	—
Cash paid for interest	$	567		$	—

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

NOTE 1 — Basis of presentation and summary of significant accounting policies

Description of Business: Gannett Co., Inc. (“Gannett,” “our,” “us” and “we”) is a leading international, multi-platform news and information company that delivers high-quality, trusted content where and when consumers want to engage with it on virtually any device. Our operations comprise 112 daily publications in the U.S. and the U.K., more than 400 non-daily local publications in the U.S. and more than 150 such titles in the U.K. Our 93 U.S. daily publications include USA TODAY.

Separation from Former Parent: On June 29, 2015, the separation of Gannett from our former parent, TEGNA, Inc., was completed pursuant to a Separation and Distribution Agreement (the “Separation Agreement”) dated June 26, 2015. On the distribution date of June 29, 2015, our former parent completed the pro rata distribution to its stockholders of 98.5% of the outstanding shares of Gannett common stock (also referred to herein as the “spin-off” or “separation”), and Gannett common stock began trading “regular way” on the New York Stock Exchange. Each holder of our former parent’s common stock received one share of Gannett common stock for every two shares of our former parent’s common stock held on June 22, 2015, the record date for the distribution. Following the distribution, our former parent owns 1.5% of Gannett’s outstanding common stock and our former parent will continue to own our shares for a period of time not to exceed five years after the distribution. Our former parent structured the distribution to be tax free to its U.S. shareholders for U.S. federal income tax purposes.

Basis of presentation: Our accompanying unaudited condensed consolidated and combined financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the instructions for Form 10-Q and, therefore, do not include all information and footnotes which are normally included in the Form 10-K and annual report to shareholders. These unaudited condensed consolidated and combined financial statements should be read in conjunction with the combined financial statements and combined notes thereto included in our Registration Statement on Form 10, as amended. In our opinion, the financial statements reflect all adjustments of a normal recurring nature necessary for a fair presentation of results for the interim periods presented. Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

Prior to the spin-off, we did not prepare separate financial statements. The accompanying unaudited condensed consolidated and combined financial statements for periods prior to the spin-off were derived from the condensed consolidated financial statements and accounting records of former parent and present our combined financial position, results of operations and cash flows as of and for the periods presented as if we were a separate entity.

Through the date of the spin-off, in preparing these unaudited condensed consolidated and combined financial statements, management has made certain assumptions or implemented methodologies to allocate various expenses from our former parent to us and from us back to our former parent in the form of cost recoveries. These allocations represent services provided between the two entities and are more fully detailed in Note 14 — Relationship with our former parent. All such costs and expenses are assumed to be settled with our former parent through “Former parent’s investment, net” in the period in which the costs were incurred. Current income taxes are also assumed to be settled with our former parent through “Former parent’s investment, net” and settlement is deemed to occur in the year following recognition in the current income tax provision. We believe the assumptions and methodologies used in these allocations are reasonable; however, such allocated costs, net of cost recoveries, may not be indicative of the actual level of expense that would have been incurred had we been operating on a stand-alone basis, and, accordingly, may not necessarily reflect our combined financial position, results of operations and cash flows had we operated as a stand-alone entity during the periods presented.

Subsequent to the spin-off, our financial statements are presented on a consolidated basis as we became a separate consolidated entity.

All intercompany accounts have been eliminated in consolidation. For periods prior to the spin-off, all significant intercompany transactions between either (i) us and our former parent or (ii) us and our former parent’s affiliates have been included within the unaudited condensed combined financial statements and are considered to be effectively settled through equity contributions or distributions at the time the transactions were recorded. The accumulated net effect of intercompany transactions between either (i) us and our former parent or (ii) us and our former parent affiliates are included in “Former parent’s investment, net.” These intercompany transactions are further described in Note 14 — Relationship with our former parent. The total net effect of these intercompany transactions is reflected in the Unaudited Condensed Consolidated and Combined Statements of Cash Flows as financing activities.

Use of Estimates: The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the condensed consolidated and combined financial statements and footnotes thereto. Actual results could differ from those estimates. Significant estimates inherent in the preparation of the consolidated financial statements include accounting for asset impairments, reserves established for doubtful accounts, equity-based compensation, depreciation and amortization, business combinations, income taxes, litigation matters and contingencies.

Business combinations: We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets.

Critical estimates in valuing certain identifiable assets include but are not limited to expected long-term revenues; future expected operating expenses; cost of capital and appropriate discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

Recent accounting standards: In July 2015, the Financial Accounting Standards Board (“FASB”) delayed the effective date for Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (“Topic 606”). The core principle contemplated by ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. We are required to adopt the standard in the first quarter of 2018 and retroactively apply it to our 2016 and 2017 financial results at the time of adoption. Under the new rules, we are permitted to adopt the new standard in 2017. We can also choose to apply the standard using either the full retrospective approach or a modified retrospective approach, which recognizes a cumulative catch up adjustment to the opening balance of retained earnings. We are currently assessing the impact and timing of adopting this pronouncement and the transition method we will use.

In July 2015, the FASB issued ASU 2015-11 Inventory (“Topic 330”): “Simplifying the Measurement of Inventory,” which requires entities using the first-in, first-out (“FIFO”) inventory costing method to subsequently value inventory at the lower of cost and net realizable value. Topic 330 defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Topic 330 is effective for fiscal years and interim periods within those years beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the provisions of Topic 330 and assessing the impact on our consolidated financial results.

In September 2015, the FASB issued ASU 2015-16 Business Combinations (“Topic 805”): “Simplifying the Accounting for Measurement-Period Adjustments,” which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Under Topic 805, acquirers must recognize measurement-period adjustments in the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. This guidance is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the provisions of Topic 805 and assessing the impact, if any, on our consolidated financial results.

NOTE 2 — Acquisitions and dispositions

On June 1, 2015, we completed the acquisition of the remaining 59.4% interest in the Texas-New Mexico Newspapers Partnership (“TNP”) that we did not own from Digital First Media. We completed the acquisition through the assignment of our 19.5% interest in the California Newspapers Partnership (“CNP”), valued at $34.4 million, and additional cash consideration, net of cash acquired, of $5.2 million. As a result, we own 100% of TNP and no longer have any ownership interest or continuing involvement in CNP. Through the transaction, we acquired news organizations in Texas (El Paso Times), New Mexico (Alamogordo Daily News; Carlsbad Current-Argus; The Daily Times in Farmington; Deming Headlight; Las Cruces Sun-News; and Silver City Sun-News) and Pennsylvania (Chambersburg Public Opinion; Hanover Evening Sun; Lebanon Daily News; and The York Daily Record).

The purchase price was allocated to the tangible assets and identified intangible assets acquired based on their estimated fair values. The allocation of the purchase price is based upon management’s preliminary estimates. At the acquisition date, the purchase price assigned to the acquired assets and assumed liabilities is summarized as follows:



In thousands
Current assets	$	12,310
Property, plant and equipment	20,792
Intangible assets	28,440
Goodwill	28,250
Total assets acquired	89,792
Current liabilities	10,860
Noncurrent liabilities	11,878
Total liabilities assumed	22,738
Net assets acquired	$	67,054

The fair value of our 40.6% interest in TNP on the acquisition date was $26.6 million. We recognized a $21.8 million pre-tax non-cash gain on the transaction. This gain is included in “Other non-operating items, net” on the nine months ended September 27, 2015 Unaudited Condensed Consolidated and Combined Statements of Income. The impact to our Unaudited Condensed Consolidated and Combined Statements of Income, since the June 1, 2015, acquisition date, was approximately $26.5 million of revenue.

Acquired property, plant and equipment will be depreciated on a straight-line basis over the assets’ respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and non-contractual relationships, as well as expected future synergies. We expect the purchase price allocated to goodwill and mastheads will be deductible for tax purposes.

On May 26, 2015, Newsquest paid $23.4 million, net of cash acquired, to purchase 100% of the shares of Romanes Media Group (“RMG”). RMG publishes local newspapers in Scotland, Berkshire and Northern Ireland and its portfolio comprises one daily newspaper, 28 weekly newspapers and their associated websites. The impact to our Unaudited Condensed Consolidated and Combined Statements of Income since the acquisition date was $9.6 million of revenue.

NOTE 3 — Restructuring activities

Severance-related expenses: We have initiated various cost reducing actions that are severance-related.

In March 2015, we announced an Early Retirement Opportunity Program (“EROP”) for our USA TODAY employees. In accordance with Accounting Standards Codification (“ASC”) Topic 712, we recorded severance-related expenses of $7.8 million for the nine months ended September 27, 2015.

In August 2015, we announced an EROP for employees in certain corporate departments and publishing sites. For employees that accepted the offer prior to September 27, 2015, we recorded estimated severance of $10.6 million for the three months ended September 27, 2015. We estimate that we will record additional severance-related expenses of approximately $21 million in the fourth quarter of 2015.

We also had other employee termination actions associated with our facility consolidation and other cost efficiency efforts. We recorded severance-related expenses of $5.9 million and $2.9 million for the three months ended September 27, 2015 and September 28, 2014, respectively, and $25.4 million and $13.2 million for the nine months ended September 27, 2015 and September 28, 2014, respectively.

We recorded $13.5 million and $35.5 million in costs of sales and operating expenses and $2.9 million and $8.3 million in selling, general and administrative expenses during the three and nine months ended September 27, 2015, respectively, related to our EROP and employee termination actions. We recorded $2.2 million and $10.5 million in costs of sales and operating

expenses and $0.6 million and $2.7 million in selling, general and administrative expenses during the three and nine months ended September 28, 2014, respectively, related to employee termination actions.

Facility consolidation and impairment charges: We evaluated and revised the carrying values and useful lives of property, plant and equipment at certain sites to reflect the use of those assets over a shortened period because of facility consolidation efforts. Certain assets classified as held-for-sale according to Accounting Standards Codification (“ASC”) Topic 360 resulted in us recognizing non-cash charges in both 2015 and 2014 as we reduced the carrying values to equal the fair value less cost to dispose. The fair values were based on the estimated prices of similar assets. We recorded pre-tax charges for facility consolidations and asset impairments of $1.3 million and $5.4 million for the three months ended September 27, 2015 and September 28, 2014, respectively, and $8.0 million and $24.4 million for the nine months ended September 27, 2015 and September 28, 2014, respectively.

NOTE 4 — Goodwill and other intangible assets

The following table displays information on our goodwill, indefinite-lived intangible assets and amortizable intangible assets:



In thousands	Sept. 27, 2015					Dec. 28, 2014
	Gross		Accumulated Amortization			Gross		Accumulated Amortization

Goodwill	$	577,519	$	—		$	544,345	$	—
Indefinite-lived intangibles:
Mastheads and trade names	32,691		—			13,469		—
Amortizable intangible assets:
Customer relationships	195,198		(149,131		)	173,822		(140,720		)
Other	14,279		(12,067		)	14,279		(10,735		)

Customer relationships include subscriber lists and advertiser relationships and are amortized on a straight-line basis over their useful lives. Other intangibles are primarily amortizable trade names and are amortized on a straight-line basis over their useful lives.

The following table summarizes the changes in our net goodwill balance through September 27, 2015:



In thousands
Balance at Dec. 28, 2014:
Goodwill	$	7,358,420
Accumulated impairment losses	(6,814,075		)
Net balance at Dec. 28, 2014	544,345
Activity during the period:
Acquisitions and Adjustments (see Note 2)	38,171
Foreign currency exchange rate changes	(4,997		)
Total	33,174
Balance at Sept. 27, 2015:
Goodwill	7,335,050
Accumulated impairment losses	(6,757,531		)
Net balance at Sept. 27, 2015	$	577,519

NOTE 5 — Revolving Credit Facility

On June 29, 2015, we entered into a new five-year secured revolving credit facility in an aggregate principal amount of $500 million (“Credit Facility”). Under the Credit Facility, we may borrow at an applicable margin above the Eurodollar base rate (“LIBOR loan”) or the higher of the Prime Rate, the Federal Funds Effective Rate plus 0.50%, or the one month LIBOR rate plus 1.00% (“ABR loan”). The applicable margin is determined based on our total leverage ratio but differs between LIBOR loans and ABR loans. For LIBOR-based borrowing, the margin varies from 2.00% to 2.50%. For ABR-based borrowing, the margin will vary from 1.00% to 1.50%.

Customary fees are payable related to the Credit Facility, including commitment fees on the undrawn commitments of between 0.30% and 0.40% per annum, payable quarterly in arrears, based on our total leverage ratio. Borrowings under the Credit Facility are guaranteed by a majority of our wholly-owned material domestic subsidiaries. All obligations of Gannett and each subsidiary guarantor under the Credit Facility are or will be secured by first priority security interests in our equipment, inventory, accounts receivable, fixtures, general intangibles and other personal property, mortgages on certain material real property and pledges of the capital stock of each subsidiary guarantor.

Pursuant to the Credit Facility, on or after September 30, 2015 we are obligated to not permit our consolidated interest coverage ratio to be less than 3.00:1.00 and our total leverage ratio to exceed 3.00:1.00, in each case as of the last day of the test period consisting of four consecutive fiscal quarters. We were in compliance with these financial covenants as of September 30, 2015.

The Credit Facility also contains a number of covenants that, among other things, limit or restrict our ability, subject to certain exceptions described in the Credit Facility, to (i) permit certain liens on current or future assets; (ii) enter into certain corporate transactions; (iii) incur additional indebtedness; (iv) make certain payments or declare certain dividends or distributions; (v) dispose of certain property; (vi) make certain investments; (vii) prepay or amend the terms of other indebtedness; or (viii) enter into certain transactions with our affiliates.

As of September 27, 2015, we had no outstanding borrowings under the Credit Facility. Up to $50.0 million of the Credit Facility is available for issuance of letters of credit. As of September 27, 2015, we had $38.0 million of letters of credit outstanding and $462.0 million of availability remaining. Subsequent to September 27, 2015, $21.0 million of the letters of credit was canceled and the availability under the Credit Facility increased to $483.0 million.

NOTE 6 — Retirement plans

Defined benefit retirement plans: We, along with our subsidiaries, have various defined benefit retirement plans, including plans established under collective bargaining agreements. A portion of our current and former employees also participated in pension plans sponsored by our former parent. Retirement benefits obligations pursuant to the former parent-sponsored retirement plans related to our current and former employees were transferred to us at the separation date and, accordingly, were allocated to us in our unaudited condensed combined financial statements for all periods prior to the spin-off. This allocation was done by determining the projected benefit obligation of participants for which the liability was transferred. Subsequent to the spin-off, no further costs were allocated to us.

The most significant defined benefit plan is the Gannett Retirement Plan (“GRP”). The fair value of our GRP plan assets immediately after the spin-off was $1.9 billion.

The cost of our retirement plans is actuarially determined. As a result of the spin-off, we recorded a reduction to the liability of $64.8 million with a corresponding adjustment to “Accumulated other comprehensive loss,” which was primarily related to the remeasurement of our pension obligation during the third quarter of 2015. This remeasurement resulted in a change in the discount rate from 4.05% to 4.40%.

Our retirement plan costs include costs for all of our qualified plans and our allocated portions of former parent-sponsored qualified and non-qualified plans and are presented in the following table:



In thousands	Three months ended						Nine months ended
	Sept. 27, 2015			Sept. 28, 2014			Sept. 27, 2015			Sept. 28, 2014

Service cost-benefits earned during the period	$	995		$	1,154		$	3,204		$	3,456
Interest cost on benefit obligation	32,997			36,511			98,483			109,488
Expected return on plan assets	(49,742		)	(51,728		)	(147,068		)	(155,127		)
Amortization of prior service cost	1,705			1,742			5,173			5,226
Amortization of actuarial loss	13,594			10,464			41,267			31,382
Expense (credit) for retirement plans	$	(451	)	$	(1,857	)	$	1,059		$	(5,575	)

Prior to the distribution date of June 29, 2015, our portion of pension contributions to the GRP was $104.7 million. Beginning in 2016 we will make additional contributions of $25 million in each of the next five fiscal years ending in 2020 and $15 million in 2021.

For the nine months ended September 27, 2015, we contributed $8.7 million (£5.7 million) to the Newsquest Pension Scheme in the U.K. (“Newsquest Plan”). We expect to contribute approximately £1.9 million to the Newsquest Plan throughout the remainder of 2015.

Defined contribution plans: Our U.S. employees historically participated in various former parent qualified 401(k) savings plans and now participate in Gannett qualified 401(k) savings plans, permitting eligible employees to make voluntary contributions on a pre-tax basis up to 50% of compensation subject to certain limits. Substantially all of our employees (other than those covered by certain collective bargaining agreements) scheduled to work at least 1,000 hours during each year of employment are eligible to participate. The plans allow participants to invest their savings in various investments. For most participants, the plan’s matching formula is 100% of the first 5% of employee contributions. The employer match obligation is settled by buying our stock in the open market and depositing it in the participants’ accounts.

Amounts charged to expense for employer contributions to the 401(k) savings plans totaled $6.5 million and $7.3 million in the three months ended September 27, 2015 and September 28, 2014, respectively. Amounts charged to expense for employer contributions to 401(k) savings plans totaled $21.2 million and $23.2 million for the nine months ended September 27, 2015 and September 28, 2014, respectively. These amounts are recorded in “Cost of sales and operating expenses” and “Selling, general and administrative expenses” as appropriate, in the Unaudited Condensed Consolidated and Combined Statements of Income.

NOTE 7 — Postretirement benefits other than pension

We 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.

Certain of our employees also participated in postretirement defined benefit plans sponsored by our former parent. Health care and life insurance benefit obligations pursuant to the former parent-sponsored postretirement plans related to our current and former employees were transferred to us at the separation date and, accordingly, have been allocated to us in our unaudited condensed consolidated and combined financial statements for periods prior to the separation date by determining the projected benefit obligation of participants for which the liability was transferred. Subsequent to the separation, no further costs were allocated to us.

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. In March 2014, our former parent adopted changes to the retiree medical plan that were effective July 1, 2014. Beginning on that date, a stipend is paid to certain Medicare-eligible Gannett retirees. As a result of this change, our former parent remeasured the related postretirement benefit obligation during the first quarter of 2014 and recorded a reduction to the liability of $33.9 million, of which our allocated portion was $32.9 million (with a corresponding adjustment to “Accumulated other comprehensive loss”).

As a result of the separation, we remeasured our postretirement benefit obligation during the third quarter of 2015 and recorded a reduction to the liability of $2.0 million with a corresponding adjustment to “Accumulated other comprehensive loss.”

Our postretirement benefit costs and our allocated portions of former parent-sponsored postretirement plans for health care and life insurance are presented in the following table:



In thousands	Three months ended						Nine months ended
	Sept. 27, 2015			Sept. 28, 2014			Sept. 27, 2015			Sept. 28, 2014

Service cost-benefits earned during the period	$	75		$	91		$	272		$	277
Interest cost on net benefit obligation	989			1,075			2,961			3,567
Amortization of prior service credit	(2,355		)	(3,022		)	(7,277		)	(8,444		)
Amortization of actuarial loss	315			202			1,102			528
Net periodic postretirement benefit credit	$	(976	)	$	(1,654	)	$	(2,942	)	$	(4,072	)

NOTE 8 — Income taxes

Our reported effective income tax rate on pre-tax income was 20.6% for the three months ended September 27, 2015, compared to 24.6% for the three months ended September 28, 2014. Our reported effective income tax rate on pre-tax income was 21.6% for the nine months ended September 27, 2015, compared to 24.7% for the nine months ended September 28, 2014. The tax rate for the nine months ended September 27, 2015 was lower than the comparable rate in 2014 due to a one-time tax benefit from a change in accounting method filed with the IRS to amortize previously non-deductible intangible assets.

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was approximately $11.7 million as of September 27, 2015 and $7.5 million at December 28, 2014. The amount of accrued interest and penalties payable related to unrecognized tax benefits was $3.4 million as of September 27, 2015 and $1.1 million as of December 28, 2014.

It is reasonably possible that the amount of unrecognized benefits with respect to certain of our unrecognized tax positions will increase or decrease within the next 12 months. These changes may be the result of settlement of ongoing audits, lapses of statutes of limitations or other regulatory developments. At this time, we estimate the amount of gross unrecognized tax positions may be reduced by up to approximately $2.5 million within the next 12 months primarily due to lapses of statutes of limitations and settlement of ongoing audits in various jurisdictions.

In connection with the spin-off, we entered into a tax matters agreement with our former parent which states each company’s rights and responsibilities with respect to payment of taxes, tax return filings and control of tax examinations. We are generally responsible for taxes allocable to periods (or portions of periods) beginning after the spin-off. Although any changes with regards to additional income tax liabilities which relate to periods prior to the spin-off may impact our effective tax rate in the future, we may be entitled to seek indemnification for these items from our former parent under the tax mnatters agreement.

NOTE 9 — Supplemental equity information

The following table summarizes equity account activity for the nine months ended September 27, 2015 and September 28, 2014:



In thousands
Balance at Dec. 28, 2014	$	937,472
Comprehensive income:
Net income	125,740
Other comprehensive income	62,741
Total comprehensive income	188,481
Dividends declared	(18,462		)
Stock-based compensation	12,359
Transactions with our former parent, net	(43,145		)
Other activity	3,409
Balance at Sept. 27, 2015	$	1,080,114

Balance at Dec. 29, 2013	$	1,265,221
Comprehensive income:
Net income	143,845
Other comprehensive income	35,471
Total comprehensive income	179,316
Transactions with our former parent, net	(177,012		)
Balance at Sept. 28, 2014	$	1,267,525

The following table summarizes the components of, and the changes in, “Accumulated other comprehensive loss” (net of tax):



In thousands	Retirement Plans			Foreign Currency Translation			Total

Three months ended:
Balance at June 28, 2015	$	(1,068,455	)	$	409,275		$	(659,180	)
Other comprehensive income (loss) before reclassifications	52,664			(17,071		)	35,593
Amounts reclassified from accumulated other comprehensive loss	8,216			—			8,216
Other comprehensive income (loss)	60,880			(17,071		)	43,809
Transactions with our former parent, net	7,237			—			7,237
Balance at Sept. 27, 2015	$	(1,000,338	)	$	392,204		$	(608,134	)

Balance at June 29, 2014	$	(852,104	)	$	447,884		$	(404,220	)
Other comprehensive income (loss) before reclassifications	14,453			(22,896		)	(8,443		)
Amounts reclassified from accumulated other comprehensive loss	6,153			—			6,153
Other comprehensive income (loss)	20,606			(22,896		)	(2,290		)
Balance at Sept. 28, 2014	$	(831,498	)	$	424,988		$	(406,510	)

Nine months ended:
Balance at Dec. 28, 2014	$	(1,082,312	)	$	404,200		$	(678,112	)
Other comprehensive income (loss) before reclassifications	49,147			(11,996		)	37,151
Amounts reclassified from accumulated other comprehensive loss	25,590			—			25,590
Other comprehensive income (loss)	74,737			(11,996		)	62,741
Transactions with our former parent, net	7,237			—			7,237
Balance at Sept. 27, 2015	$	(1,000,338	)	$	392,204		$	(608,134	)

Balance at Dec. 29, 2013	$	(873,595	)	$	431,614		$	(441,981	)
Other comprehensive income (loss) before reclassifications	23,314			(6,626		)	16,688
Amounts reclassified from accumulated other comprehensive loss	18,783			—			18,783
Other comprehensive income (loss)	42,097			(6,626		)	35,471
Balance at Sept. 28, 2014	$	(831,498	)	$	424,988		$	(406,510	)

Accumulated other comprehensive loss components are included in computing net periodic postretirement costs (see Note 6 — Retirement plans and Note 7 — Postretirement benefits other than pension for more detail). Reclassifications out of accumulated other comprehensive loss related to these postretirement plans include the following:



In thousands	Three months ended						Nine months ended
	Sept. 27, 2015			Sept. 28, 2014			Sept. 27, 2015			Sept. 28, 2014

Amortization of prior service credit, net	$	(650	)	$	(1,280	)	$	(2,104	)	$	(3,218	)
Amortization of actuarial loss	13,909			10,666			42,369			31,910
Total reclassifications, before tax	13,259			9,386			40,265			28,692
Income tax effect	(5,043		)	(3,233		)	(14,675		)	(9,909		)
Total reclassifications, net of tax	$	8,216		$	6,153		$	25,590		$	18,783

NOTE 10 — Fair value measurement

We measure and record in the accompanying unaudited condensed consolidated and combined financial statements certain assets and liabilities at fair value. ASC Topic 820, Fair Value Measurement, establishes a hierarchy for those instruments measured at fair value that distinguishes between market data (observable inputs) and our own assumptions (unobservable inputs). The hierarchy consists of three levels:

Level 1 - Quoted market prices in active markets for identical assets or liabilities;

Level 2 - Inputs other than Level 1 inputs that are either directly or indirectly observable; and

Level 3 - Unobservable inputs developed using our own estimates and assumptions, which reflect those that a market participant would use.

As of September 27, 2015 and December 28, 2014, assets held at fair value measured on a recurring basis primarily consist of pension plan assets.

We also have certain assets that are held for sale that require fair value measurement on a non-recurring basis. Assets held for sale, which are classified as Level 3 assets, total $20.6 million as of September 27, 2015 and $18.4 million as of December 28, 2014.

NOTE 11 — Commitments, contingencies and other matters

Telephone Consumer Protection Act (“TCPA”) litigation: On January 2, 2014, a class action lawsuit was filed against Gannett in the United States District Court for the District of New Jersey (Casagrand et al v. Gannett Co., Inc., et al). The suit claims various violations of the TCPA arising from allegedly improper telemarketing calls made to consumers by one of our vendors. The plaintiffs seek to certify a class that would include all telemarketing calls made by the vendor or us. The TCPA provides for statutory damages of $500 per violation ($1,500 for willful violations). The ultimate outcome of this proceeding is uncertain, but may be material to our results of operations and cash flows. We are vigorously defending the case and have asserted cross-claims against the vendor.

Environmental contingency: In March 2011, the Advertiser Company, a subsidiary that publishes the Montgomery Advertiser, was notified by the U.S. EPA that it had been identified as a potentially responsible party (“PRP”) for the investigation and remediation of groundwater contamination in downtown Montgomery, Alabama. The Advertiser is a member of the Downtown Environmental Alliance, which has agreed to jointly fund and conduct all required investigation and remediation. The U.S. EPA has approved the work plan for the investigation and remediation, and has transferred responsibility for oversight of this work to the Alabama Department of Environmental Management. The investigation and remediation are underway. In the third quarter of 2015, the Advertiser and other members of the Downtown Environmental Alliance also reached a settlement with the U.S. EPA regarding the costs that U.S. EPA spent to investigate the site. The Advertiser’s final costs cannot be determined until the cleanup work is completed and contributions from other PRPs are finalized. A portion of The Advertiser’s costs have been and are expected to be covered by liability insurance.

Other: We, along with a number of our subsidiaries, are defendants in judicial and administrative proceedings involving matters incidental to our business. Management believes any liability that exists as a result of these matters is immaterial.

NOTE 12 — Stock-based compensation

Prior to the date of separation from former parent, Gannett established the Gannett Co. Inc. Omnibus Incentive Compensation Plan (“Gannett plan”) for the purpose of granting equity-based and cash-based awards to Gannett employees and directors. The Gannett plan permits the grant of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, stock awards, restricted stock units (“RSUs”), performance shares, performance units, and cash-based awards.

Prior to the spin-off, Gannett employees were eligible to participate in our former parent’s 2001 Omnibus Incentive Compensation Plan (“former parent plan”). The former parent plan provided for the granting of stock options, stock appreciation rights, restricted stock, RSUs, performance shares and other equity-based and cash-based awards. In connection with the spin-off, 4.4 million former parent options, 8.3 million former parent RSUs and 3.0 million former parent performance shares were converted to 1.1 million Gannett options, 3.0 million Gannett RSUs and 1.0 million Gannett performance shares, respectively. These awards were modified under the mandatory anti-dilution provision of the grants and an incremental cost of $3.1 million will be recorded over the remaining vesting periods of these awards.

Stock-based compensation expense for Gannett employee participants in both plans have been included within selling, general, and administrative expense within these condensed consolidated and combined financial statements. Prior to the distribution date, stock-based compensation expense for Gannett participants in the former parent plan was allocated to us.

Stock-based compensation expense under both plans during the three and nine months ended September 27, 2015 totaled $5.8 million and $12.4 million, respectively. Stock-based compensation expense under the former parent plan totaled $3.7 million and $12.0 million for the three and nine months ended September 28, 2014, respectively.

The following table summarizes the RSU activity for the three months ended September 27, 2015:



	Shares		Weighted Average Fair Value

Outstanding and unvested at beginning of period	2,885,994		$	10.86
Granted	187,517		$	11.17
Vested	(70,219	)	$	10.20
Canceled	(125,659	)	$	11.00
Outstanding and unvested at end of period	2,877,633		$	10.89

As of September 27, 2015, we had not yet recognized compensation costs related to RSUs of $23.7 million on unvested awards with a weighted average remaining recognition period of 2.6 years.

The following table summarizes the performance share activity for the three months ended September 27, 2015:



	Shares		Weighted Average Fair Value

Outstanding and unvested at beginning of period	926,138		$	15.48
Canceled	(65,556	)	$	14.77
Outstanding and unvested at end of period	860,582		$	15.54

As of September 27, 2015, we had not yet recognized compensation costs related to performance shares of $5.8 million on unvested awards with a weighted average remaining recognition period of 1.9 years.

As of September 27, 2015, all stock options were fully vested.

NOTE 13 — Earnings per share

Basic earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding. Diluted earnings per share is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of shares under equity-based compensation plans except where the inclusion of such shares would have an anti-dilutive impact.

On June 29, 2015, our former parent distributed 98.5% of our total shares and retained the remaining 1.5%. The total shares outstanding at that date was approximately 115 million. The total number of shares outstanding at that date is used for the calculation of both basic and diluted earnings per share for the three and nine months ended September 28, 2014.

Our board of directors previously announced a share repurchase program authorizing us to repurchase shares with an aggregate value of up to $150 million over a three-year period. Shares may be repurchased at management’s discretion, either in the open market or in privately negotiated block transactions. Management’s decision to repurchase shares will depend on share price and other corporate liquidity requirements. We expect that share repurchases may occur from time to time over the three years. As of September 27, 2015, no shares have been repurchased under this program.

For the three and nine months ended September 27, 2015 and September 28, 2014, basic and diluted earnings per share were as follows:



In thousands, except per share data	Three months ended				Nine months ended
	Sept. 27, 2015		Sept. 28, 2014		Sept. 27, 2015		Sept. 28, 2014

Net income	$	39,166	$	50,557	$	125,740	$	143,845
Weighted average number of shares outstanding - basic	115,186		114,959		115,035		114,959
Weighted average number of shares outstanding - diluted	118,168		114,959		116,029		114,959
Earnings per share - basic	$	0.34	$	0.44	$	1.09	$	1.25
Earnings per share - diluted	$	0.33	$	0.44	$	1.08	$	1.25

On July 28, 2015, we declared the first-ever quarterly cash dividend of $0.16 per common share. The dividend was paid on October 1, 2015 to shareholders of record on September 4, 2015.

NOTE 14 — Relationship with our former parent

Subsequent to the spin-off

Transition services agreement: In connection with the spin-off, we entered into a transition services agreement with our former parent, pursuant to which we and our former parent will provide to each other certain specified services on a transitional basis, including various information technology, financial and administrative services. The charges for the transition services generally are expected to allow the providing entity to fully recover all out-of-pocket costs and expenses it actually incurs in connection with providing the service plus, in some cases, the allocated indirect costs of providing the services, generally without profit. Subsequent to separation, we provided certain IT, payroll and other services to our former parent in the amount of $3.0 million for the three months ended September 27, 2015. Our former parent provided certain services to us in the amount of $1.6 million for the three months ended September 27, 2015.

The transition services agreement will terminate on the expiration of the term of the last service provided under it, not later than 24 months following the distribution date. The recipient for a particular service generally can terminate that service prior to the scheduled expiration date, subject generally to a minimum service period of 90 days and minimum notice period of 30 days. Due to the interdependencies between some services, certain services may be extended or terminated early only if other services are coterminous.

Employee matters agreement: In connection with the spin-off, we entered into an employee matters agreement with our former parent prior to the separation to allocate liabilities and responsibilities relating to employment matters, employee compensation and benefit plans and programs and other related matters. The employee matters agreement governs certain compensation and employee benefit obligations with respect to the current and former employees and non-employee directors of each company. See Note 6 — Retirement plans and Note 7 — Postretirement benefits other than pension for more detail.

Lease agreement: In connection with the spin-off, we entered into a lease agreement with our former parent to lease back corporate office space we continue to occupy. Occupancy costs, including facility rent, repairs and maintenance, security and other occupancy related costs, for this lease were $2.9 million for the quarter ended September 27, 2015. Our former parent sold this corporate office space on October 2, 2015.

Revenue and other transactions entered into in the ordinary course of business: Certain of our revenue arrangements relate to contracts entered into in the ordinary course of business with former parent and its affiliates, principally Cars.com, CareerBuilder and G/O Digital.

Prior to the spin-off

The following is a discussion of our relationship with our former parent prior to the spin-off, including the services provided by both parties and how transactions with our former parent and its affiliates through June 28, 2015 were accounted for in the unaudited condensed consolidated and combined financial statements.

Equity: Equity in the Unaudited Condensed Combined Balance Sheets includes the accumulated balance of transactions between us and our former parent, our paid-in-capital and our former parent’s interest in our cumulative retained earnings,

which are presented within “Former parent’s investment, net” and combined with “Accumulated other comprehensive loss” as the two components of equity. The amounts comprising the accumulated balance of transactions between us, our former parent and its affiliates include (i) the cumulative net assets attributed to us by our former parent and its affiliates, (ii) the cumulative net advances to former parent representing our cumulative funds swept (net of funding provided by our former parent and its affiliates to us) as part of the centralized cash management program described further below and (iii) the cumulative charges (net of credits) allocated by our former parent and its affiliates to us for certain support services received by us.

Centralized cash management: Prior to the spin-off, our former parent utilized a centralized approach to cash management and the financing of its operations, providing funds to its entities as needed. These transactions were recorded in “Former parent’s investment, net” when advanced. Accordingly, none of our former parent’s cash and cash equivalents were assigned to us in the unaudited condensed consolidated and combined financial statements. “Cash and cash equivalents” in our Unaudited Condensed Consolidated and Combined Balance Sheets represent cash held by us. Included in “Cash and cash equivalents” as of December 28, 2014 were investments in commercial paper of former parent totaling $63.9 million. These investments matured prior to the spin-off and are now cash held by us as of September 27, 2015. Interest income recorded on these investments, recorded within “Other non-operating items, net”, was $0.4 million for the nine months ended September 27, 2015 and $1.4 million for the nine months ended September 28, 2014.

Support services provided and other amounts with our former parent and former parent’s affiliates: Prior to the spin-off, we received allocated charges from our former parent and its affiliates for certain corporate support services, which are recorded within “Selling, general and administrative expense” in our Unaudited Condensed Combined Statements of Income, net of cost recoveries reflecting services provided by us and allocated to our former parent. Management believes that the bases used for the allocations are reasonable and reflect the portion of such costs, net of cost recoveries, attributable to our operations; however, the amounts may not be representative of the costs necessary for us to operate as a separate stand-alone company.

These allocated costs, net of cost recoveries, are summarized in the following table:



In thousands	Three months ended			Nine months ended
	Sept. 28, 2014			Sept. 27, 2015^(a)			Sept. 28, 2014

Corporate allocations^(b)	$	14,267		$	25,832		$	43,573
Occupancy^(c)	1,331			2,884			4,392
Depreciation^(d)	2,108			4,067			6,514
Other support costs^(e)	3,936			6,249			11,807
Cost recoveries^(f)	(2,384		)	(6,055		)	(6,982		)
Total	$	19,258		$	32,977		$	59,304

(a) Costs were allocated from our former parent to us up to the spin date. No costs were allocated to us by our former parent after the spin-off.

(b) The corporate allocations related to support we received from our former parent and its affiliates for certain corporate activities include: (i) corporate general and administrative expenses, (ii) marketing services, (iii) investor relations, (iv) legal, (v) human resources, (vi) internal audit, (vii) financial reporting, (viii) tax, (ix) treasury, (x) information technology, (xi) production services, (xii) travel services and (xiii) other former parent corporate and infrastructure costs. For these services, we recorded an allocation of a management fee based on actual costs incurred by our former parent and its affiliates. This was allocated to us based upon our revenue as a percentage of total former parent revenue in each fiscal period.

(c) Occupancy costs relate to certain facilities owned and/or leased by our former parent and its affiliates that were utilized by our employees and principally relate to shared corporate office space. These costs were charged to us primarily based on actual square footage utilized or our revenue as a percentage of total former parent revenue in each fiscal period. Occupancy costs include facility rent, repairs and maintenance, security and other occupancy related costs incurred to manage the properties.

(d) Depreciation expense was allocated by former parent and its affiliates for certain assets. These assets primarily relate to facilities and IT equipment that are utilized by former parent and us to operate our businesses. These assets have not been

included in our Unaudited Condensed Combined Balance Sheets. Depreciation expense was allocated primarily based on our revenue as a percentage of total former parent revenue or our utilization of these assets.

(e) Other support costs related to charges to us from former parent and its affiliates include certain insurance costs and our allocated portions of share-based compensation costs and net periodic pension costs relating to the Gannett Supplemental Retirement Plan (“SERP”) for employees of our former parent. Such costs were allocated based on actual costs incurred or our revenue as a percentage of total former parent revenue.

(f) Cost recoveries reflect costs recovered from our former parent and our former parent’s affiliates for functions provided by us such as functions that serve our former parent’s digital and broadcasting platforms for content optimization and financial transaction processing at shared service centers. Such costs were primarily allocated based on our revenue as a percentage of total former parent revenue or based upon transactional volume in each fiscal year.

NOTE 15 — Subsequent events

On October 7, 2015 we entered into a merger agreement for the acquisition of Journal Media Group, Inc. (“JMG”) for approximately $280 million. JMG is a media company with print and digital publishing operations serving 14 U.S. markets in nine states, including the Milwaukee Journal Sentinel, the Knoxville News Sentinel, and The Commercial Appeal in Memphis.

The combination of JMG and Gannett will create a portfolio of 106 local markets in the U.S., accelerating the growth of our unique domestic visitors each month. The acquisition will also enable the combined company to realize significant operating efficiencies. The properties in JMG’s markets will benefit from the consolidated functions Gannett has established over the last several years. Additionally, the regional proximity of some of the JMG markets will also enable Gannett to further utilize its printing and distribution assets.

Gannett will finance the transaction through a combination of cash on hand and borrowings under our $500 million Credit Facility.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations and quantitative and qualitative disclosures should be read in conjunction with our unaudited condensed consolidated and combined financial statements and related notes. The financial information discussed below and included elsewhere in this Quarterly Report on Form 10-Q includes carve-out financial information for periods prior to the spin-off date. This carve-out information may not necessarily reflect what our financial condition, results of operations and cash flow would have been had we been a stand-alone company during the periods presented or what our financial condition, results of operations and cash flows may be in the future.

Management’s Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and other factors described throughout this Quarterly Report, as well as the factors described in our Information Statement dated June 18, 2015, filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 19, 2015, particularly under “Risk Factors.”

Overview

Our operations comprise 112 daily publications and related digital platforms in the U.S. and the U.K., more than 400 non-daily local publications in the U.S. and more than 150 such titles in the U.K. Our 93 U.S. daily publications include USA TODAY, a nationally recognized news and information publication, which is ranked first in combined print and digital circulation according to Alliance for Audited Media’s June 2015 Quarterly Filing. In the markets we serve, we also operate desktop, smartphone and tablet products which are tightly integrated with publishing operations. Our operations also include commercial printing, newswire, marketing and data services operations. Certain of our businesses have strategic relationships with the online businesses of our former parent, including CareerBuilder, Cars.com, and G/O Digital.

Separation from Parent

On June 29, 2015, our former parent completed the separation through a pro rata distribution to our former parent’s stockholders of 98.5% of the outstanding shares of our common stock. Each holder of our former parent’s common stock received one share of our common stock for every two shares of former parent common stock held on June 22, 2015, the record date for the distribution. Following the distribution, our former parent owns 1.5% of our outstanding common stock. Our former parent will continue to own our shares for a period of time not to exceed five years after the distribution. Our former parent structured the distribution to be tax free to its U.S. shareholders for U.S. federal income tax purposes.

Certain Matters Affecting Current and Future Operating Results

The following items affect period-over-period comparisons from 2014 and will affect period-over-period comparisons for future results:


•	Shutdown of USA Weekend - USA Weekend ceased operating in December 2014. For the third quarter of 2015 and through the first nine months of 2015 revenue comparisons to the same period in the prior year were negatively impacted by $7.6 million and $26.9 million, respectively.


•	Acquisition of Texas-New Mexico Newspaper Partnership (“TNP”) and Romanes Media Group (“RMG”) -

During the first nine months of 2015, we acquired two businesses which we expect to be accretive to earnings in future periods, contributing approximately $100 million in revenues over the next twelve months.

On June 1, 2015, we completed the acquisition of the remaining 59.4% interest in the TNP that we did not own from Digital First Media. We completed the acquisition through the assignment of our 19.5% interest in the California Newspapers Partnership (“CNP”) and additional cash consideration. As a result, we own 100% of TNP and no longer have any ownership interest in CNP. Our results reflect an increase in total revenues of $20.1 million in the third quarter and $26.5 million in the first nine months of 2015 as a result of consolidating TNP and a decrease in quarter to date and year to date “Equity income in unconsolidated investees, net” of $2.3 million and $2.7 million, respectively.

On May 26, 2015, Newsquest acquired RMG, one of the leading regional media groups in the U.K. RMG publishes local newspapers in Scotland, Berkshire and Northern Ireland and its portfolio comprises one daily newspaper and 28 weekly newspapers and their associated websites. Our results reflect an increase in total revenues of $6.8 million in the third quarter and $9.6 million in the first nine months of 2015 as a result of the acquisition.

•

Foreign Currency - Our U.K. publishing operations are conducted through our Newsquest subsidiary. Our U.K. earnings are translated at the average British pound-to-U.S. dollar exchange rate. Therefore, a strengthening in that exchange rate will improve our U.K. revenue and earnings contributions to consolidated results. A weakening of that exchange rate (i.e., a stronger U.S. dollar) will have a negative impact. Results for the third quarter of 2015 were translated from the British pound to U.S. dollars at an average rate of 1.55 compared to 1.67 in the third quarter last year. This 7% decline in the exchange rate unfavorably impacted third quarter of 2015 revenue comparisons by approximately $8.4 million.


•	Restructuring Activities - We continue to implement previously disclosed cost reduction actions, which will result in an approximately $67 million in cost savings over the second half of 2015 and first half of 2016. These actions include:

◦

Facility Consolidation and Asset Impairment Charges - We evaluated the carrying values of property, plant and equipment at certain sites because of facility consolidation efforts. We revised the useful lives of certain assets to reflect the use of those assets over a shortened period as a result. We recorded pre-tax charges for facility consolidations and asset impairments of $1.3 million and $5.4 million in the third quarter of 2015 and 2014, respectively, and $8.0 million and $24.4 million for the first nine months of 2015 and 2014, respectively.


◦	Severance-related Expenses - We have initiated various cost reducing actions that are severance-related.

In March 2015, we announced an Early Retirement Opportunity Program (“EROP”) for our USA TODAY employees. We recorded severance-related expenses of $7.8 million for the nine months ended September 27, 2015.

We also had other employee termination actions associated with our facility consolidation and other cost reduction efforts. We recorded severance-related expenses of $5.9 million and $2.9 million for the three months ended September 27, 2015 and September 28, 2014, respectively, and $25.4 million and $13.2 million for the nine months ended September 27, 2015 and September 28, 2014, respectively.

•

New Digital Agreements - Beginning in the third quarter of 2015 and in conjunction with the execution of new agreements (principally Cars.com and CareerBuilder), we began reporting wholesale fees associated with sales of certain third party digital advertising products and services on a net basis, as a reduction of the associated digital advertising revenues, rather than in operating expenses, in our condensed consolidated and combined statements of income. There is no impact on operating income, operating cash flows, net income or earnings per share. For the third quarter of 2015 revenue comparisons to the same period in the prior year were negatively impacted by $16.2 million.

Results from Operations

A summary of our results is presented below:



In thousands	Quarter-to-Date							Year-to-Date
	2015			2014		Change		2015		2014		Change
Operating revenues:
Advertising	$	384,149		$	442,088	(13	%)	$	1,191,902	$	1,358,504	(12	%)
Circulation	265,227			274,542		(3	%)	802,389		829,872		(3	%)
Other	51,860			50,661		2	%	151,377		164,570		(8	%)
Total operating revenues	701,236			767,291		(9	%)	2,145,668		2,352,946		(9	%)
Operating expenses:
Operating expenses	619,393			667,320		(7	%)	1,922,981		2,062,000		(7	%)
Depreciation	25,291			24,925		1	%	73,677		73,767		—	%
Amortization	3,096			3,461		(11	%)	10,103		10,448		(3	%)
Facility consolidation and asset impairment charges	1,343			5,390		(75	%)	7,989		24,413		(67	%)
Total operating expenses	649,123			701,096		(7	%)	2,014,750		2,170,628		(7	%)
Operating income	52,113			66,195		(21	%)	130,918		182,318		(28	%)
Non-operating (expense) income, net	(2,806		)	886		***		29,433		8,823		***
Provision for income taxes	10,141			16,524		(39	%)	34,611		47,296		(27	%)
Net income	$	39,166		$	50,557	(23	%)	$	125,740	$	143,845	(13	%)

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

We generate revenue through advertising and subscriptions to our print and digital publications. Our advertising teams sell retail, classified and national advertising across multiple platforms including print, online, mobile and tablet as well as niche publications. In addition, we generate revenue by providing digital marketing products and services, ranging from search optimization to social media to website development. Circulation revenues are derived principally from distributing our publications on our digital platforms, from home delivery and from single copy sales of our publications. Other revenues are mainly from commercial printing and distribution arrangements.

Quarter ended September 27, 2015 versus quarter ended September 28, 2014

Our operating revenues were $701.2 million in the third quarter of 2015, a decrease of 9% from $767.3 million in the same period last year which is primarily driven by the continued softness in the advertising revenues and declining trends in

circulation revenue. This decrease is also partially due to $16.2 million related to the reporting of sales of certain third party (principally Cars.com and CareerBuilder) digital advertising products on a net basis (as described in above), $7.6 million of prior year revenues related to exited businesses, $8.4 million of unfavorable foreign currency exchange rate changes (as described below), and $3.7 million due to the impact of the unfavorable affiliate agreement change with CareerBuilder. Partially offsetting these declines were revenues associated with businesses acquired late in the second quarter, TNP and RMG, of $26.9 million, as well as positive revenue trends in Gannett’s digital products.

Our revenues were generated principally from advertising and circulation sales. Advertising sales accounted for 55% of our total revenues for the third quarter of 2015. Circulation sales accounted for 38% of our total revenues for the third quarter of 2015. Digital revenues, which are a component of advertising, circulation and other revenue, were $159.9 million in the third quarter of 2015 and $173.6 million in the same period in 2014. Digital revenues were down for the quarter in the U.S. due to unfavorable post-spin changes to the CareerBuilder affiliate agreement and the reporting of third party digital revenues in conjunction with the execution of new agreements. Digital revenues at Newsquest in the U.K. were up when compared to the third quarter of 2014.

Our results in our U.K. operations are translated from the British pound to U.S. dollar at the average exchange rate. This average rate declined 7% in the third quarter of 2015 compared to the same quarter last year and unfavorably impacted third quarter 2015 revenues by approximately $8.4 million.

Advertising revenue: Advertising revenues for the third quarter of 2015 decreased $57.9 million or 13%, which is primarily due to lower advertising demand resulting from general trends in the publishing industry. The decrease is also partially due to the absence of revenues associated with USA Weekend, which accounted for $7.5 million of the decline, as well as a year-over-year decline in the U.K. exchange rate described above, partially offset by the advertising revenues associated with the acquisitions of TNP and RMG of $17.9 million. Digital advertising revenues, which comprise retail, national and classified advertising, were $98.2 million in the third quarter of 2015 and $110.8 million in the third quarter of 2014, an 11% decrease over prior year. Weighing on the underlying digital growth rate was the $16.2 million related to the reporting of sales of certain third party (principally Cars.com and CareerBuilder) digital advertising products on a net basis and the unfavorable affiliate agreement change with CareerBuilder of $3.7 million. Without the impact of these changes digital advertising revenue would have increased 7% year over year.

Retail advertising revenues decreased by $16.9 million or 8% in the third quarter of 2015. In the U.S., retail advertising declined 9%, which was unfavorably impacted by lower advertising demand. In the U.K., retail advertising revenues increased 3% in local currency but were adversely impacted by foreign currency rates that resulted in a reported 4% decline.

National advertising revenues decreased by $11.3 million or 17% in the third quarter of 2015, primarily due to lower advertising sales in all markets and the absence of revenues associated with USA Weekend.

Classified advertising revenues declined 20% in the U.S. and 6% in the U.K. in local currency in the third quarter of 2015. Domestically, automotive advertising decreased $14.3 million for the quarter, of which $12.6 million was attributed to the reporting of the Cars.com agreement. Employment declined $7.9 million, of which $7.3 million was attributed to changes in the CareerBuilder agreement, and real estate declined $1.2 million. In the U.K., automotive, employment and real estate advertising were lower as a result of general trends in the newspaper industry.

Circulation revenue: Total circulation revenues decreased 3% to $265.2 million in the third quarter of 2015. This change was primarily driven by a reduction in volume that was consistent with general industry trends. The impact of price increases in the prior year had minimal impact on circulation revenues in the third quarter, while foreign currency rate fluctuations negatively affected circulation revenues by $2.1 million. Circulation revenues for our local domestic publishing business decreased 3% in the third quarter of 2015. Circulation volumes have trended downwards with single copy circulation decreasing daily by 4% and Sunday by 11% in the third quarter of 2015, and home delivery decreasing by 3% for daily and 2% for Sunday. Circulation revenues at USA TODAY declined 12% in the third quarter due to anticipated volume losses. In the U.K., circulation revenues remained relatively flat in the third quarter.

Other revenue: Commercial printing and other revenues were relatively flat for the quarter and totaled $51.9 million. Other revenues accounted for approximately 7% of total revenues for the quarter.

Nine months ended September 27, 2015 versus nine months ended September 28, 2014

During the first nine months of 2015 operating revenues decreased 9% to $2.1 billion from $2.4 billion in 2014 which is primarily driven by the continued softness in the advertising revenues and declining trends in circulation revenue. Advertising sales accounted for 56% of our total revenues for the first nine months of 2015. Circulation sales accounted for 37% of our total revenues for the first nine months of 2015. Digital revenues, such as advertising on various digital platforms and subscription fees, were $511.5 million in the first nine months of 2015 and $519.6 million in the same period in 2014. Digital revenues decreased during the first nine months of 2015 in the U.S. due to unfavorable post-spin changes to the CareerBuilder affiliate agreement and the reporting of third party digital revenues in conjunction with the execution of new agreements (as discussed above). Digital revenues at Newsquest in the U.K. increased as compared to the same period in 2014.

Our results at Newsquest are translated from the British pound to U.S. dollar at an average exchange rate. For the first nine months of 2015, the average exchange rate declined 8% compared to the first nine months of 2014, which unfavorably impacted year to date revenue by approximately $28.3 million.

Advertising revenue: Advertising revenue for the first nine months of 2015 decreased $166.6 million or 12%. This decrease reflects lower advertising demand due to general trends in the publishing industry and the absence of $30.7 million of revenues primarily associated with USA Weekend, as well as a year-over-year decline in the U.K. exchange rate, which represented $19.0 million of the decline, partially offset by the revenues associated with the acquisitions of TNP and RMG of $23.9 million. Digital advertising revenues, which comprise retail, national and classified advertising, were $322.0 million in the first nine months of 2015 and $330.8 million in the first nine months of 2014, a 3% decrease over prior year. The decrease in digital advertising revenues was driven by the reporting of sales of certain third party (principally Cars.com and CareerBuilder) digital advertising products on a net basis and the unfavorable affiliate agreement change with CareerBuilder discussed above.

Retail advertising revenues were down $57.3 million or 9% for the first nine months of 2015. In the U.S., retail advertising decreased 9%, unfavorably impacted by lower advertising demand. In the U.K., retail advertising revenues increased 1% in local currency but were adversely impacted by foreign currency rates that resulted in a reported 7% decline.

National advertising revenues decreased $52.1 million or 25% for the first nine months of 2015 due to soft advertising demand and the absence of revenues associated with USA Weekend.

Classified advertising revenues declined 10% in the U.S. and 7% in the U.K. in local currency for the first nine months of 2015. U.S. automotive advertising decreased $17.0 million for the first nine months of 2015. Employment and real estate declined $9.9 million and $6.2 million, respectively. In the U.K., all classified advertising categories decreased compared to 2014 as a result of general trends in the publishing industry.

Circulation revenue: For the first nine months of 2015, total circulation revenues decreased 3% to $802.4 million. This change was driven by a reduction in volume, reflecting general industry trends, and the impact of price increases in the prior year. Price increases contributed positively to circulation revenues by approximately $40.8 million in the first nine months of the year, while foreign currency negatively affected circulation revenues by $7.2 million. Circulation revenues for our domestic publishing business decreased 3% in the first nine months of 2015. Circulation volumes have trended downwards with single copy circulation decreasing daily by 7% and Sunday by 11% in the first nine months of 2015, and home delivery decreasing by 7% for daily and 6% for Sunday. Circulation revenues at USA TODAY were 12% lower in the first nine months of 2015 due to anticipated volume losses. In the U.K., circulation revenues were 2% lower in the first nine months of 2015 reflecting the impact of foreign currency rates and lower sales.

Other revenue: Commercial printing and other revenues declined 8.0% for the first nine months of 2015 and totaled $151.4 million. The decrease primarily reflects the sale of a print business. Other revenues accounted for 7% of total revenues for the first nine months of 2015.

Operating expenses: Our largest component of operating expense is payroll and benefits. Other significant operating expenses include production and distribution costs. Operating expenses for the quarter and first nine months ended September 27, 2015 and September 28, 2014 are described below.

Quarter ended September 27, 2015 versus quarter ended September 28, 2014

Operating expenses decreased 7% during the quarter to $649.1 million compared to $701.1 million in the third quarter of 2014. This decrease was primarily due to continued cost efficiency efforts. Overall cost of sales for the third quarter of 2015 decreased $40.4 million, or 8%, from the third quarter of 2014. Included in cost of sales in the third quarter of 2015 were payroll and employee benefits expenses of approximately $167.6 million, compared with approximately $179.6 million of similar costs in the third quarter of 2014, a 7% decrease. Resource optimization efforts to improve the overall cost structure while driving greater efficiencies drove the decrease from 2014. Also included in cost of sales in the third quarter of 2015 were newsprint costs of approximately $40.0 million compared with approximately $55.3 million in the third quarter of 2014, a 28% decrease. The decrease represents lower prices for newsprint, lower volume and the absence of USA Weekend. The remaining decrease in cost of sales reflects the overall decline in circulation volumes and other revenues.

Total selling, general and administrative costs for the third quarter of 2015 decreased by $7.5 million, or 4%, from the third quarter of 2014. Included in selling, general and administrative expenses were payroll and employee benefit costs of approximately $129.0 million compared with approximately $129.8 million, a 1% decrease from the third quarter of 2014. Other costs decreased by approximately $6.7 million related to information technology costs.

Depreciation charges remained relatively flat compared to the third quarter of 2014. Amortization expense decreased by 11% as a result of older intangible assets that became fully amortized during the quarter.

Our space consolidation initiative continued in the third quarter of 2015, resulting in sales of older, underutilized buildings; relocating to more efficient, flexible, digitally-oriented office space; reconfiguring spaces to take advantage of leasing and subleasing opportunities and combining operations where possible. As a result, we recognized facility consolidation charges during all periods presented. These charges are discussed in Note 3 — Restructuring activities to the unaudited condensed combined financial statements.

Nine months ended September 27, 2015 versus nine months ended September 28, 2014

For the first nine months of 2015, operating expenses decreased 7% to $2.0 billion compared to $2.2 billion for the first nine months of 2014. Overall cost of sales decreased $116.2 million, or 8%, from the first nine months of 2014. Included in cost of sales for the first nine months of 2015 were payroll and employee benefit expenses of approximately $510.1 million, compared with approximately $569.9 million for the first nine months of 2014, a 10% decrease. Resource optimization efforts to improve the overall cost structure while driving greater efficiencies drove the decrease from 2014. Also included in cost of sales in the first nine months of 2015 were newsprint costs of approximately $132.5 million compared with approximately $175.6 million in the first nine months of 2014, a 24% decrease. This decrease represents lower prices for newsprint, lower volume and the absence of USA Weekend. The remaining decrease in cost of sales reflects the overall decline in circulation volumes and other revenues, partially offset by the effect of acquisitions during the first nine months of 2015.

Total selling, general and administrative costs for the first nine months of 2015 decreased by $22.8 million, or 4%, from the first nine months of 2014. Included in selling, general and administrative expenses were payroll and employee benefit costs of approximately $381.7 million compared with approximately $394.0 million, a 3% decrease from the first nine months of 2014. Other costs decreased by approximately $10.5 million, primarily due to lower information technology costs during the first nine months of 2015.

Depreciation charges remained flat as compared to the first nine months of 2014. Amortization expense decreased 3% as compared to the first nine months of 2014 due to older intangible assets that became fully amortized in 2015 partially offset by the effect of 2015 acquisitions.

Our space consolidation initiative continued during the first nine months of 2015, resulting in sales of older, underutilized buildings; relocating to more efficient, flexible, digitally-oriented office space; reconfiguring spaces to take advantage of leasing and subleasing opportunities and combining operations where possible. As a result, we recognized facility consolidation charges during all periods presented. These charges are discussed in Note 3 — Restructuring activities to the unaudited condensed combined financial statements.

Non-operating income, net: Our non-operating income, net, is driven by certain items that fall outside of our normal business operations. Non-operating expense, net, for the third quarter of 2015 was $2.8 million compared to income of $0.9 million in the same period in 2014. Non-operating income, net, for the first nine months of 2015 was $29.4 million compared to $8.8 million in the same period in 2014. The increase over prior year for the first nine months is driven by the $21.8 million

gain recognized upon completing the acquisition of the remaining 59.4% interest in TNP that we did not own from Digital First Media. We completed the acquisition through the assignment of our 19.5% interest in the CNP and additional cash consideration.

Income tax expense: Our reported effective income tax rate on pre-tax income was 20.6% for the third quarter of 2015, compared to 24.6% for the third quarter of 2014. Our reported effective income tax rate on pre-tax income was 21.6% for the first nine months of 2015, compared to 24.7% for the first nine months of 2014. The tax rate for the first nine months of 2015 was lower than the comparable rate in 2014 due to a one-time tax benefit from a change in accounting method filed with the IRS to amortize previously non-deductible intangible assets.

As described in our basis of reporting section above, our operations prior to the separation are included in our former parent’s state and federal income tax returns. For purposes of these financial statements, we have computed our income taxes as if we were filing separate returns for the period prior to the separation.

Liquidity and Capital Resources

Our operations have historically generated strong positive cash flow which, along with our new credit facility described below, are expected to provide more than adequate liquidity to meet our requirements, including those for investments, strategic acquisitions, expected dividends and expected share repurchases.

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



In thousands	Year-to-date
	2015			2014

Net cash flow from operating activities	$	152,814		$	197,353
Net cash flow used for investing activities	(33,637		)	(19,763		)
Net cash flow used for financing activities	(48,192		)	(190,297		)
Effect of currency exchange rate change	(160		)	(56		)
Net increase (decrease) in cash	$	70,825		$	(12,763	)

Our net cash flow from operating activities was $152.8 million for the first nine months of 2015, compared to $197.4 million of net cash flow from operating activities for the first nine months of 2014. The decrease in net cash flow from operating activities was primarily the result of pension and other postretirement contributions in the first nine months of 2015 exceeding pension and other postretirement contributions in the first nine months of 2014 by $49.7 million.

Cash flows used by investing activities totaled $33.6 million for the first nine months of 2015 primarily driven by investments in TNP and RMG of $28.7 million, as well as capital investments of $30.9 million, offset by proceeds from sales of certain assets of $16.3 million and other investments of $12.4 million. Cash flows used by investing activities totaled $19.8 million for the first nine months of 2014 primarily due to $51.6 million of capital expenditures, offset by proceeds from sales of certain assets of $21.7 million and other investments of $11.6 million.

Cash flows used for financing activities totaled $48.2 million for the first nine months of 2015, compared to $190.3 million for the first nine months of 2014. Prior to the separation, cash used for financing activities was primarily due to transactions with our former parent with nominal impact from cash outflows relating to contingent consideration arrangements. Our former parent historically utilized a centralized approach to cash management and the financing of its operations. Under this centralized cash management program, we provided funds to our former parent and vice versa. Accordingly, the net cash flow between us and our former parent is presented as a financing activity. Subsequent to the spin-off, there are borrowings and repayments under our revolving credit facility. However, there was no outstanding balance on our revolving credit facility as of September 27, 2015.

Revolving credit facility

rate plus 1.00% (“ABR loan”). The applicable margin is determined based on our total leverage ratio but differs between LIBOR loans and ABR loans. For LIBOR-based borrowing, the margin varies from 2.00% to 2.50%. For ABR-based borrowing, the margin will vary from 1.00% to 1.50%.

Pursuant to the Credit Facility, we are obligated, on or after September 30, 2015, to not permit our consolidated interest coverage ratio to be less than 3.00:1.00 and our total leverage ratio to exceed 3.00:1.00, in each case as of the last day of the test period consisting of four consecutive fiscal quarters. We were in compliance with these financial covenants as of September 30, 2015.

Additional Information

On July 28, 2015, we declared the first-ever quarterly cash dividend of $0.16 per common share. The dividend was paid on October 1, 2015 to shareholders of record on September 4, 2015.

Our board of directors has approved a share repurchase program authorizing us to repurchase shares with an aggregate value of up to $150 million over a three-year period. Shares may be repurchased at management’s discretion, either in the open market or in privately negotiated block transactions. Management’s decision to repurchase shares will depend on share price and other corporate liquidity requirements. We expect that share repurchases may occur from time to time over the three years. No shares were repurchased in the third quarter of 2015.

Results from Operations - Non-GAAP Information

Presentation of Non-GAAP information

We use non-GAAP financial performance and liquidity measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures 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.

We discuss in this report non-GAAP financial performance measures that exclude from our reported GAAP results the impact of special items consisting of workforce restructuring charges, transformation costs and non-cash asset impairment charges.

We believe that such expenses, charges and gains are not indicative of normal, ongoing operations and their inclusion in results makes for more difficult comparisons between years and with peer group companies. We discuss adjusted EBITDA, a non-GAAP financial performance measure that we believe offers a useful view of the overall operation of our businesses. Adjusted EBITDA is defined as net income before (1) income taxes, (2) interest expense, (3) equity income, (4) other non-operating items, (5) severance-related charges, (6) facility consolidation costs, (7) asset impairment charges, (8) depreciation and (9) amortization. When adjusted EBITDA is discussed, the most directly comparable GAAP financial measure is Net income.

Adjusted diluted earnings per share (“EPS”) is a non-GAAP financial performance measure that we believe offers a useful view of the overall operation of our business. We consider adjusted EPS, which may not be comparable to a similarly titled measure reported by other companies, to be defined as EPS before tax-affected (1) severance-related charges, (2) other transformation items, (3) asset impairment charges and (4) acquisition-related expenses. The tax impact on these non-GAAP tax deductible adjustments is based on the estimated statutory tax rates for the United Kingdom of 20.0% and the United States of 38.7%. When adjusted EPS is discussed, the most directly comparable GAAP financial measure is diluted EPS.

We also discuss in this report free cash flow, a non-GAAP liquidity measure that adjusts our reported GAAP results for items that we believe are critical to the ongoing success of our business, which results in a free cash flow figure available for use in operations, additional investment and return to shareholders. We define free cash flow as cash flow from operating activities less capital expenditures.

We use non-GAAP financial performance measures for purposes of evaluating our performance and liquidity. Therefore, we believe that each of the non-GAAP measures presented provides useful information to investors by allowing them to view our businesses through the eyes of our management and Board of Directors, facilitating comparison of results across historical periods, and providing a focus on the underlying ongoing operating performance of our business. Many of our peer group companies present similar non-GAAP measures to better facilitate industry comparisons.

Discussion of special charges and credits affecting reported results

We recorded severance related charges, including the early retirement programs, totaling $16.4 million in the third quarter of 2015 and $2.9 million in the third quarter of 2014. For the first nine months of 2015, we recorded severance related charges, including the early retirement programs, totaling $43.8 million compared with $13.2 million in the same period in the prior year. These charges were taken in connection with workforce reductions related to facility consolidation and outsourcing efforts and as part of a general program to fundamentally change our cost structure.

Company-wide transformation plans led us to recognize charges associated with revising the useful lives of certain assets over a shortened period, as well as shutdown costs and charges to reduce the carrying value of assets held for sale to fair value less costs to sell. Total charges for these matters were $0.1 million in the third quarter of 2015 and $5.4 million in the third quarter of 2014. For the first nine months of 2015 we recorded facility consolidation costs totaling $3.1 million compared with $38.2 million in the same period in the prior year.

We performed impairment tests on certain assets, including intangible assets and investments accounted for under the equity method, which resulted in the recognition of impairment charges as well as recognizing accelerated depreciation on certain assets for disposal. These non-cash charges are detailed in Note 3 — Restructuring activities to the unaudited condensed combined financial statements.

Combined Summary - Non-GAAP

The following is a discussion of our as-adjusted non-GAAP financial results. All as-adjusted (non-GAAP basis) measures are labeled as such or “adjusted.”

Reconciliations of adjusted EBITDA from net income presented in accordance with GAAP on our Unaudited Condensed Combined Statements of Income are presented below:



In thousands	Quarter-to-Date								Year-to-Date
	2015			2014			Change		2015			2014			Change

Net income (GAAP basis)	$	39,166		$	50,557		(23	%)	$	125,740		$	143,845		(13	%)
Provision for income taxes	10,141			16,524			(39	%)	34,611			47,296			(27	%)
Equity income in unconsolidated investees, net	(609		)	(2,737		)	(78	%)	(11,411		)	(9,995		)	14	%
Other non-operating items, net	3,415			1,851			84	%	(18,022		)	1,172			***
Operating income (GAAP basis)	52,113			66,195			(21	%)	130,918			182,318			(28	%)
Early retirement program	10,572			—			***		18,373			—			***
Severance related charges	5,872			2,885			***		25,386			13,180			93	%
Facility consolidation costs	66			5,390			(99	%)	3,093			38,239			(92	%)
Asset impairment charges	—			—			—	%	3,618			—			***
Adjusted operating income (non-GAAP basis)	68,623			74,470			(8	%)	181,388			233,737			(22	%)
Depreciation	25,291			24,925			1	%	73,677			73,767			—	%
Amortization	3,096			3,461			(11	%)	10,103			10,448			(3	%)
Adjusted EBITDA (non-GAAP basis)	$	97,010		$	102,856		(6	%)	$	265,168		$	317,952		(17	%)

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

Adjusted EBITDA was $97.0 million in the third quarter of 2015 compared to $102.9 million in the third quarter of 2014, a decrease of $5.8 million or 6%. The decline in the third quarter adjusted EBITDA was primarily due to reduced contributions resulting from the new Cars.com and CareerBuilder affiliate agreements, unfavorable foreign exchange rate changes as well as ongoing reductions in print advertising revenues partially offset by cost reductions and efficiency gains in operating expenses as well as increases in digital revenues and a full quarter of operating results from businesses acquired during the second quarter of 2015. Adjusted EBITDA for the first nine months of 2015 of $265.2 million is $52.8 million lower than the $318.0 million recorded in the same period of 2014. These declines in the year-to-date amounts are driven by the same factors affecting the third quarter comparisons.

Reconciliations of Adjusted diluted earnings per share from net income presented accordance with GAAP on our Unaudited Condensed Combined Statements of Income are presented below:



In thousands, except share data	Quarter-to-Date								Year-to-Date
	2015			2014			Change		2015			2014			Change

Early retirement program	$	10,572		$	—		***		$	18,373		$	—		***
Severance-related charges	5,872			2,885			***		25,386			13,180			93	%
Other transformation items	66			5,390			(99	%)	3,093			38,239			(92	%)
Asset impairment charges	—			—			—	%	3,618			—			***
Acquisition related expenses	1,022			—			***		(19,599		)	—			***
Pretax impact	17,532			8,275			***		30,871			51,419			(40	%)
Income tax impact of above items	(6,373		)	(2,000		)	***		(10,337		)	(18,500		)	(44	%)
Impact of items affecting comparability on net income	$	11,159		$	6,275		78	%	$	20,534		$	32,919		(38	%)

Net income	$	39,166		$	50,557		(23	%)	$	125,740		$	143,845		(13	%)
Impact of items affecting comparability on net income	11,159			6,275			78	%	20,534			32,919			(38	%)
Adjusted net income	$	50,325		$	56,832		(11	%)	$	146,274		$	176,764		(17	%)

Earnings per share - diluted	$	0.33		$	0.44		(25	%)	$	1.08		$	1.25		(14	%)
Impact of items affecting comparability on net income	0.10			0.05			100	%	0.18			0.29			(38	%)
Adjusted earnings per share - diluted	$	0.43		$	0.49		(12	%)	$	1.26		$	1.54		(18	%)
Diluted weighted average number of common shares outstanding	118,168			114,959			3	%	116,029			114,959			1	%

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

Earnings per share for the third quarter, on a fully diluted basis, were $0.33 which includes $17.5 million of pre-tax severance, acquisition related and other charges. Before the impact of these charges and adjusted for taxes, adjusted earnings per share on a fully diluted basis would have been $0.43 for the first three months of 2015 compared to $0.49 in the same period in 2014. The decline in the third quarter adjusted earnings per share on a fully diluted basis was primarily due to reduced contributions resulting from the new Cars.com and CareerBuilder affiliate agreements, unfavorable foreign exchange rate changes as well as ongoing reductions in print advertising revenues partially offset by cost reductions and efficiency gains in operating expenses as well as increases in digital revenues and a full quarter of operating results from businesses acquired during the second quarter of 2015. Adjusted earnings per share on a fully diluted basis for the first nine months of 2015 of $1.26 is $0.28 lower than the $1.54 recorded in the same period of 2014. These declines in the year-to-date amounts are driven by the same factors affecting the third quarter comparisons. Fully diluted earnings per share reflect a diluted share count of 118.2 million shares, approximately 3.2 million higher than the end of the second quarter of 2015 due to the addition of the dilutive effect of stock based compensation, principally resulting from compensatory awards made by our former parent that were converted into Gannett awards as a result of the spin.

Reconciliations of Free Cash Flow from net cash flow from operating activities presented in accordance with GAAP on our Unaudited Condensed Combined Statements of Cash Flow are presented below:



In thousands	Year-to-Date
	2015			2014			Change

Net cash flow from operating activities	$	152,814		$	197,353		(23	%)
Capital expenditures	(30,945		)	(51,579		)	(40	%)
Free cash flow	$	121,869		$	145,774		(16	%)

Net cash flow from operating activities was $152.8 million in the first nine months of 2015 down $44.5 million compared to prior year primarily due to significantly higher pension and other postretirement contributions in 2015. Offsetting this decrease in operating cash flows are lower cash outflows for capital expenditures of $20.6 million during the first nine months of 2015 compared to the prior year. The net decrease to free cash flow was $23.9 million from the first nine months of 2014 compared with the first nine months of 2015.

During 2014, we invested significantly in digital development and platform expansion as well as investing in real estate optimization efforts. While we continue to invest in our digital assets, we have slowed our optimization efforts in real estate during 2015 compared with 2014. Free cash flow generated in the current year provides us with the opportunity for additional investment as well as return to shareholders via our first dividend which was declared on July 28, 2015 and paid to shareholders on October 1, 2015. Refer to the “Liquidity and Capital Resources” section of this Item, above, for additional details.

Certain Factors Affecting Forward-Looking Statements

This Quarterly Report on Form 10-Q contains certain forward-looking statements regarding business strategies, market potential, future financial performance and other matters. Forward-looking statements include all statements that are not historical facts. The words “believe,” “expect,” “estimate,” “could,” “should,” “intend,” “may,” “plan,” “seek,” “anticipate,” “project” and similar expressions, among others, generally identify “forward-looking statements,” which speak only as of the date the statements were made and are not guarantees of future performance. The matters discussed in these forward-looking statements are subject to a number of risks, trends, uncertainties, and other factors that could cause actual results to differ materially from those projected, anticipated or implied in the forward-looking statements. Where, in any forward-looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of our management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. Whether or not any such forward-looking statements are in fact achieved will depend on future events, some of which are beyond our control. Except as may be required by law, we undertake no obligation to modify or revise any forward-looking statements to reflect new information, events or circumstances occurring after the date of this report. Factors, risks, trends and uncertainties that could cause actual results or events to differ materially from those projected, anticipated, or implied include the matters described below under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as the statements made under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Company’s Information Statement, dated June 18, 2015, filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 19, 2015, in addition to the following other factors, risks, trends and uncertainties:


•	competitive pressures in the markets in which we operate;


•	increased consolidation among major retailers or other events which may adversely affect business operations of major customers and depress the level of local and national advertising;


•	macroeconomic trends and conditions;


•	economic downturns leading to a continuing or accelerated decrease in circulation or local, national or classified advertising;


•	potential disruption or interruption of our operations due to accidents, extraordinary weather events, civil unrest, political events, terrorism or cyber security attacks;


•	an accelerated decline in general print readership and/or advertiser patterns as a result of competitive alternative media or other factors;


•	our inability to adapt to technological changes or grow our digital business;


•	an increase in newsprint costs over the levels anticipated;


•	labor relations, including, but not limited to, labor disputes which may cause revenue declines or increased labor cost as well as changes to minimum wage requirements which could impact our hourly workforce;


•	risks and uncertainties related to the proposed merger with JMG, including uncertainty of regulatory approvals, our and JMG’s ability to satisfy the merger agreement conditions and consummate the transaction on a timely basis and our ability to successfully integrate JMG’s operations and employees with our existing business;


•	an inability to realize benefits or synergies from acquisitions of new businesses or dispositions of existing businesses or to operate businesses effectively following acquisitions or divestitures;


•	our ability to attract and retain key employees;


•	rapid technological changes and frequent new product introductions prevalent in electronic publishing;


•	a weakening in the British pound to U.S. dollar exchange rate;


•	volatility in financial and credit markets which could affect our ability to raise funds through debt or equity issuances and otherwise affect our ability to access the credit and capital markets at the times and in the amounts needed and on acceptable terms;


•	changes in the regulatory environment which could encumber or impede our efforts to improve operating results or the value of assets;


•	adverse outcomes in proceedings with governmental authorities or administrative agencies;


•	an other than temporary decline in operating results and enterprise value that could lead to non-cash goodwill, other intangible asset, investment or property, plant and equipment impairment charges;


•	our inability to engage in certain corporate transactions following the separation;


•	any failure to realize expected benefits from the separation; and


•	other uncertainties relating to general economic, political, business, industry, regulatory and market conditions.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We believe that our market risk from financial instruments, such as accounts receivable and accounts payable, is not material. We are exposed to foreign exchange rate risk on a limited basis due to our operations in the U.K., for which the British pound is the functional currency. Translation gains or losses affecting the Combined Statements of Income have not been significant in the past. If the price of the British pound against the U.S. dollar had been 10% more or less than the actual price, operating income would have increased or decreased approximately 5% for the three months ended and 6% for the nine months ended September 27, 2015.

Because we did not have any long-term debt outstanding during any period presented and the interest income or interest expense on interest-bearing assets and liabilities on which we recognize imputed interest, respectively, is not material, we were not, nor would we have been, significantly impacted by changes in interest rates. Interest-bearing assets are limited to our investment in commercial paper which is described in more detail in Note 14 — Relationship with our former parent to the unaudited condensed combined financial statements presented in Item 1. There was $0.4 million of interest income recorded on these investments in the nine months ended September 27, 2015. There was $1.4 million of interest income recorded for the nine months ended September 28, 2014. If interest rates had increased or decreased by 1%, “Income before income taxes” would have nominally changed for all periods presented.

Item 4. Controls and Procedures

Based on their evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective, as of September 27, 2015, to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 are recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There have been no changes in our internal controls or in other factors during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On January 2, 2014, a class action lawsuit was filed against Gannett in the United States District Court for the District of New Jersey (Casagrand et al v. Gannett Co., Inc., et al). The suit claims various violations of the Telephone Consumer Protection Act (“TCPA”) arising from allegedly improper telemarketing calls made to consumers by one of our vendors. The plaintiffs seek to certify a class that would include all telemarketing calls made by the vendor or us. The TCPA provides for statutory damages of $500 per violation ($1,500 for willful violations). The ultimate outcome of this proceeding is uncertain, but may be material to our results of operations and cash flows. We are vigorously defending the case and have asserted cross-claims against the vendor.

In March 2011, the Advertiser Company, a subsidiary that publishes the Montgomery Advertiser, was notified by the U.S. EPA that it had been identified as a potentially responsible party (“PRP”) for the investigation and remediation of groundwater contamination in downtown Montgomery, Alabama. The Advertiser is a member of the Downtown Environmental Alliance, which has agreed to jointly fund and conduct all required investigation and remediation. The U.S. EPA has approved the work plan for the investigation and remediation, and has transferred responsibility for oversight of this work to the Alabama Department of Environmental Management. The investigation and remediation are underway. In the third quarter of 2015, the Advertiser and other members of the Downtown Environmental Alliance also reached a settlement with the U.S. EPA regarding the costs that U.S. EPA spent to investigate the site. The Advertiser’s final costs cannot be determined until the cleanup work is completed and contributions from other PRPs are finalized. A portion of The Advertiser’s costs have been and are expected to be covered by liability insurance.

There have been no other material developments with respect to our potential liability for environmental matters previously reported in our Information Statement, dated June 18, 2015, filed as Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on June 19, 2015 (the “Information Statement”).

Item 1A. Risk Factors

There have been no material changes from the risk factors described in the “Risk Factors” section previously reported in the Information Statement.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

This item is not applicable.

Item 3. Defaults Upon Senior Securities

This item is not applicable.

Item 4. Mine Safety Disclosures

This item is not applicable.

Item 5. Other Information

Deadline to Submit Rule 14a-8 Shareholder Proposals for 2016 Annual Meeting. We currently expect that our initial annual meeting of stockholders following its spin-off from our former parent will be held at our corporate headquarters in McLean, Virginia in May 2016. Stockholders who wish to submit a proposal for potential inclusion in our proxy materials for the 2016 Annual Meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 must ensure that such proposal is received by us no later than the close of business on Friday, December 4, 2015. Any such proposals must be received by such deadline by Gannett’s Secretary at Gannett Co., Inc., 7950 Jones Branch Drive, McLean, Virginia 22107, and otherwise comply with all other requirements of Rule 14a-8.

Item 6. Exhibits

Incorporated by reference to the Exhibit Index attached hereto and made a part hereof.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: November 6, 2015	GANNETT CO., INC.

	/s/ Alison K. Engel
	Alison K. Engel
	Chief Financial Officer
	(on behalf of Registrant and as Principal Financial Officer)

EXHIBIT INDEX



Exhibit Number	Exhibit	Location

2-1	Separation and Distribution Agreement, dated as of June 26, 2015, by and between Parent and the Company	Incorporated herein by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-3, filed by the Company with the SEC on June 29, 2015

3-1	Amended and Restated Certificate of Incorporation of the Company	Incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-3, filed by the Company with the SEC on June 29, 2015

3-2	Amended and Restated Bylaws of the Company	Incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-3, filed by the Company with the SEC on June 29, 2015

10-1	Transition Services Agreement, dated as of June 26, 2015, by and between Parent and the Company	Incorporated by reference to the same-numbered exhibit to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015

10-2	Tax Matters Agreement, dated as of June 26, 2015, by and between Parent and the Company	Incorporated by reference to the same-numbered exhibit to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015

10-3	Employee Matters Agreement, dated as of June 26, 2015, by and between Parent and the Company	Incorporated herein by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-3, filed by the Company with the SEC on June 29, 2015

10-4	Credit Agreement among the Company, the several lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, PNC Bank, N.A. and US Bank, National Association, as Co-Syndication Agents, dated as of June 29, 2015	Incorporated by reference to the same-numbered exhibit to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015

10-5	Security Agreement, made by the Company and certain of its Subsidiaries, in favor of JPMorgan Chase Bank, N.A., as Administrative Agent, dated as of June 29, 2015	Incorporated by reference to the same-numbered exhibit to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015

10-6	Trademark Security Agreement, dated as of June 29, 2015, by the Company and certain of its Subsidiaries, in favor of JPMorgan Chase Bank, N.A., as Administrative Agent	Incorporated by reference to the same-numbered exhibit to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015

10-7	Guarantee Agreement made by the Subsidiary Guarantors listed on the signature page thereto in favor of JPMorgan Chase Bank, N.A., as Administrative Agent, dated as of June 29, 2015	Incorporated by reference to the same-numbered exhibit to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015

10-8	2015 Deferred Compensation Plan Rules for Pre-2005 Deferrals	Incorporated by reference to the same-numbered exhibit to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015*

10-9	2015 Deferred Compensation Plan Rules for Post-2004 Deferrals	Incorporated by reference to the same-numbered exhibit to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015*

10-10	Supplemental Retirement Plan	Incorporated by reference to the same-numbered exhibit to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015*



10-11	Supplemental Executive Medical Plan	Incorporated by reference to the same-numbered exhibit to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015*

10-12	Supplemental Executive Medical Plan for Retired Executives	Incorporated by reference to the same-numbered exhibit to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015*

10-13	Key Executive Life Insurance Plan	Incorporated by reference to the same-numbered exhibit to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015*

10-14	Key Executive Life Insurance Plan Participation Agreement	Incorporated by reference to the same-numbered exhibit to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015*

10-15	2015 Transitional Compensation Plan	Incorporated by reference to the same-numbered exhibit to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015*

10-16	Gannett Leadership Team Transition Severance Plan	Incorporated by reference to the same-numbered exhibit to the Company’s Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015*

10-17	2015 Omnibus Incentive Compensation Plan	Incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3, filed by the Company with the SEC on June 29, 2015*

10-18	Letter Agreement with Robert J. Dickey	Incorporated by reference to Exhibit 10.15 to the Company’s Registration Statement on Form 10, filed by the Company with the SEC on June 9, 2015*

10-19	Letter Agreement with Alison K. Engel	Incorporated by reference to Exhibit 10.16 to the Company’s Registration Statement on Form 10, filed by the Company with the SEC on June 9, 2015*

10-20	Letter Agreement with John M. Zidich	Incorporated by reference to Exhibit 10.17 to the Company’s Registration Statement on Form 10, filed by the Company with the SEC on June 9, 2015*

10-21	Employment and Separation Agreement with David A. Payne	Incorporated by reference to Exhibit 10.18 to the Company’s Registration Statement on Form 10, filed by the Company with the SEC on June 9, 2015*

10-22	Termination Benefits Agreement with Lawrence S. Kramer	Incorporated by reference to Exhibit 10.19 to the Company’s Registration Statement on Form 10, filed by the Company with the SEC on June 9, 2015*

10-23	Agreement and Release with Lawrence S. Kramer	Incorporated by reference to Exhibit 10.20 to the Company’s Registration Statement on Form 10, filed by the Company with the SEC on June 9, 2015*

10-24	Form of Mortgage	Attached.



10-25	Form of Deed of Trust	Attached.

10-26	Schedule of Mortgages or Deeds of Trust Granted by Gannett Subsidiaries	Attached.

31-1	Rule 13a-14(a) Certification of CEO	Attached.

31-2	Rule 13a-14(a) Certification of CFO	Attached.

32-1	Section 1350 Certification of CEO	Attached.

32-2	Section 1350 Certification of CFO	Attached.

101	The following financial information from Gannett Co., Inc. Quarterly Report on Form 10-Q for the quarter ended June 28, 2015, formatted in XBRL includes: (i) Condensed Combined Balance Sheets at June 28, 2015 and December 28, 2014, (ii) Condensed Combined Statements of Income for the fiscal quarters and six months ended June 28, 2015 and June 29, 2014, (iii) Condensed Combined Statements of Comprehensive Income for the fiscal quarters and six months ended June 28, 2015 and June 29, 2014, (iv) Condensed Combined Cash Flow Statements for the fiscal quarters and six months ended June 28, 2015 and June 29, 2014, and (v) Notes to Condensed Combined Financial Statements	Attached.

* Asterisks identify management contracts and compensatory plans or arrangements.

We agree to furnish to the Commission, upon request, a copy of each agreement with respect to long-term debt not filed herewith in reliance upon the exemption from filing applicable to any series of debt representing less than 10% of our total consolidated assets.

EXHIBIT 10-24

FORM OF MORTGAGE

______________________________________________________________________________

Prepared by, recording requested by, and after recording, please return to:
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attn: Elaine Cronin

______________________________________________________________________________

MORTGAGE

made by

______________________________,

Mortgagor

JPMORGAN CHASE BANK, N.A., as Administrative Agent, Mortgagee

______________________________________________________________________________

Dated as of September 25, 2015

Location: _____________________

County of _____________________

THIS MORTGAGE SECURES FUTURE ADVANCES.

EXHIBIT 10-24

MORTGAGE

THIS MORTGAGE, dated as of September 25, 2015 is made by _____________________, a ___________________ (“Mortgagor”), whose address is c/o Gannett Co., Inc., 7950 Jones Branch Drive, McLean, VA 22107, to JPMORGAN CHASE BANK, N.A., as Administrative Agent (in such capacity, “Mortgagee”), whose address is 500 Stanton Christiana Road, Ops 2, Newark, DE 19713. References to this “Mortgage” shall mean this instrument and any and all renewals, modifications, amendments, supplements, extensions, consolidations, substitutions, spreaders and replacements of this instrument.

Background

A. Gannett Co., Inc., a Delaware corporation (the “Borrower”), JPMorgan Chase Bank, N.A., as Administrative Agent and PNC Bank, N.A. and U.S. Bank National Association, as Co-Syndication Agents, and the other Lenders party thereto (collectively, the “Lenders”) are parties to that certain Credit Agreement, dated as of June 29, 2015 (as amended, supplemented, restated, replaced, substituted or otherwise modified from time to time, the “Credit Agreement”).

B. The Mortgagor, affiliates of the Mortgagor and Mortgagee have entered into a Security Agreement dated as of June 29, 2015 (as amended, supplemented, restated, replaced, substituted or otherwise modified from time to time, the “Security Agreement”) pursuant to which Mortgagor and affiliates of Mortgagor have granted liens in favor of Mortgagee on the assets of such parties.

C. The Credit Agreement requires the Mortgagor to deliver a duly executed copy of this Mortgage.

D. Mortgagor is the owner of the fee simple estate in the parcel(s) of real property described on Schedule A attached hereto (the “Land”), and owns all of the buildings, improvements, structures, and fixtures now located on the Land (the “Improvements”; the Land and the Improvements being collectively referred to as the “Real Estate”).

NOW, THEREFORE, in consideration of the premises and for other valuable consideration, the receipt and sufficiency of which the parties hereto hereby acknowledge, Mortgagor hereby agrees with the Mortgagee, for the ratable benefit of the Secured Parties, as follows:

Granting Clauses

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Mortgagor agrees that to secure the prompt and complete payment and performance in full when due (whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise, including the payment of amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code) of all of Mortgagor’s Guarantor Obligations (collectively, the “Secured Obligations”);

MORTGAGOR HEREBY GRANTS TO MORTGAGEE, FOR THE RATABLE BENEFIT OF THE SECURED PARTIES, A LIEN UPON AND A SECURITY INTEREST IN, AND HEREBY MORTGAGES AND WARRANTS, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE, FOR THE BENEFIT OF THE SECURED PARTIES AND WITH ALL POWERS OF SALE AND OTHER STATUTORY RIGHTS AND COVENANTS IN THE STATE IN WHICH THE REAL ESTATE IS LOCATED:

(a) the Real Estate or any part thereof;

(b) all easements, rights of way, licenses, operating agreements, abutting strips and gores of land, streets, ways, alleys, passages, sewer rights, waters, water courses, water and flowage rights, development rights, air rights, mineral and soil rights, plants, standing and fallen timber, and all estates, rights, titles, interests, privileges, licenses, tenements, hereditaments and appurtenances belonging, relating or appertaining to the Real Estate, and any reversions, remainders, rents, issues, profits and revenue thereof and all land lying in the bed of any street, road or avenue, in front of or adjoining the Real Estate to the center line thereof;

EXHIBIT 10-24

accessories) attached to, or contained in or used or usable in any way in connection with any operation or letting of the Real Estate, including but without limiting the generality of the foregoing, all screens, awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs, storm doors and windows, furniture and furnishings, heating, electrical, and mechanical equipment, lighting, switchboards, plumbing, ventilating, air conditioning and air-cooling apparatus, refrigerating, and incinerating equipment, escalators, elevators, loading and unloading equipment and systems, stoves, ranges, laundry equipment, cleaning systems (including window cleaning apparatus), telephones, communication systems (including satellite dishes and antennae), televisions, computers, sprinkler systems and other fire prevention and extinguishing apparatus and materials, security systems, motors, engines, machinery, pipes, pumps, tanks, conduits, appliances, fittings and fixtures of every kind and description (all of the foregoing in this paragraph (c) being referred to as the “Equipment”);

(d) all substitutes and replacements of, and all additions and improvements to, the Real Estate and the Equipment, subsequently acquired by or released to Mortgagor or constructed, assembled or placed by Mortgagor on the Real Estate, immediately upon such acquisition, release, construction, assembling or placement, including, without limitation, any and all building materials whether stored at the Real Estate or offsite, and, in each such case, without any further deed, conveyance, assignment or other act by Mortgagor;

(e) all leases, subleases, underlettings, concession agreements, management agreements, licenses and other agreements relating to the use or occupancy of the Real Estate or the Equipment or any part thereof, now existing or subsequently entered into by Mortgagor and whether written or oral and all guarantees of any of the foregoing (collectively, as any of the foregoing may be amended, restated, extended, renewed or modified from time to time, the “Leases”), and all rights of Mortgagor in respect of cash and securities deposited thereunder and the right to receive and collect the revenues, income, rents, issues and profits thereof, together with all other rents, royalties, issues, profits, revenue, income and other benefits arising from the use and enjoyment of the Mortgaged Property (as defined below) (collectively, the “Rents”);

(f) all unearned premiums under insurance policies relating to the Real Estate or Equipment and all proceeds of any such insurance policies (including title insurance policies) including the right to collect and receive such proceeds, subject to the provisions relating to insurance generally set forth below; and all awards and other compensation, including the interest payable thereon and the right to collect and receive the same, made to the present or any subsequent owner of the Real Estate or Equipment for the taking by eminent domain, condemnation or otherwise, of all or any part of the Real Estate or any easement or other right therein;

(g) to the extent not prohibited under the applicable contract, consent, license or other item unless the appropriate consent has been obtained, (i) all contracts from time to time executed by Mortgagor or any manager or agent on its behalf relating to the ownership, construction, maintenance, repair, operation, occupancy, sale or financing of the Real Estate or Equipment or any part thereof and all agreements and options relating to the purchase or lease of any portion of the Real Estate or any property which is adjacent or peripheral to the Real Estate, together with the right to exercise such options and all leases of Equipment, (ii) all consents, licenses, building permits, certificates of occupancy and other governmental approvals relating to construction, completion, occupancy, use or operation of the Real Estate or any part thereof, and (iii) all drawings, plans, specifications and similar or related items relating to the Real Estate; and

(h) all proceeds, both cash and noncash, of the foregoing;

All of the foregoing property and rights and interests now owned or held or subsequently acquired by Mortgagor and described in the foregoing clauses (a) through (c) are collectively referred to as the “Premises”, and those described in the foregoing clauses (a) through (h) are collectively referred to as the “Mortgaged Property.”

TO HAVE AND TO HOLD the Mortgaged Property and the rights and privileges hereby mortgaged unto Mortgagee, its successors and assigns for the uses and purposes set forth, until the Secured Obligations are fully paid and performed.

This Mortgage covers present and future advances and re-advances, in the aggregate amount of the Secured Obligations, made by the Secured Parties for the benefit of Mortgagor, and the lien of such future advances and re-advances shall relate back to the date of this Mortgage.

EXHIBIT 10-24

Terms and Conditions

Mortgagor further represents, warrants, covenants and agrees with Mortgagee and the Secured Parties as follows:

1. Defined Terms. Capitalized terms used herein (including in the "Background" and "Granting Clauses" sections above) and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement or the Security Agreement, as applicable. References in this Mortgage to the “Default Rate” shall mean the interest rate applicable pursuant to Section 2.10(d)(ii) of the Credit Agreement.

2. Warranty of Title. Mortgagor warrants that it has record title in fee simple to the Real Estate, and good title to the rest of the Mortgaged Property, subject only to the matters that are set forth in Schedule B of the title insurance policy being issued to Mortgagee to insure the lien of this Mortgage and any other Lien or encumbrance as permitted by the Credit Agreement (the “Permitted Exceptions”). Mortgagor shall warrant, defend and preserve such title and the lien of this Mortgage against all claims of all persons and entities (not including the holders of the Permitted Exceptions). Mortgagor represents and warrants that it has the right to mortgage the Mortgaged Property.

3. Payment of Secured Obligations. Mortgagor shall pay and perform the Secured Obligations at the times and places and in the manner specified in the Loan Documents.

4. Requirements. Mortgagor shall comply with all covenants, restrictions and conditions now or later of record which may be applicable to any of the Mortgaged Property, or to the use, manner of use, occupancy, possession, operation, maintenance, alteration, repair or reconstruction of any of the Mortgaged Property, except where a failure to do so could not reasonably be expected to have a material adverse effect (considered both individually and together with other such failures) on (i) the current business, operations or condition (financial or otherwise) of the Mortgagor, (ii) the current use of the Mortgaged Property or (iii) the value of the Mortgaged Property (assuming its current use).

5. Payment of Taxes and Other Impositions. (a) Prior to the date on which any fine, penalty, interest or cost may be added thereto or imposed, Mortgagor shall pay and discharge all taxes, charges and assessments of every kind and nature, all charges for any easement or agreement maintained for the benefit of any of the Real Estate, all general and special assessments, levies, permits, inspection and license fees, all water and sewer rents and charges, vault taxes and all other public charges even if unforeseen or extraordinary, imposed upon or assessed against or which may become a lien on any of the Real Estate, or arising in respect of the occupancy, use or possession thereof, together with any penalties or interest on any of the foregoing (all of the foregoing are collectively referred to herein as the “Impositions”), except where (i) the validity or amount thereof is being contested in good faith by appropriate proceedings, (ii) the Mortgagor has set aside on its books adequate reserves with respect thereto in accordance with GAAP, or (iii) except as otherwise permitted by the Credit Agreement. Upon written request by Mortgagee, Mortgagor shall deliver to Mortgagee evidence reasonably acceptable to Mortgagee showing the payment of any such Imposition. If by law any Imposition, at Mortgagor’s option, may be paid in installments (whether or not interest shall accrue on the unpaid balance of such Imposition), Mortgagor may elect to pay such Imposition in such installments and shall be responsible for the payment of such installments with interest, if any.

(b) Mortgagee may pay any Imposition after the date such Imposition shall have become delinquent, and add to the Secured Obligations the amount so paid, together with interest from the time of payment at the Default Rate. Any sums paid by Mortgagee in discharge of any Impositions shall be (i) a lien on the Premises secured hereby prior to any right or title to, interest in, or claim upon the Premises subordinate to the lien of this Mortgage, and (ii) payable on demand by Mortgagor to Mortgagee together with interest at the Default Rate as set forth above.

6. Insurance. (a) Mortgagor shall maintain, with financially sound and reputable companies, insurance policies (i) insuring the Real Estate against loss by fire, explosion, theft and such other casualties in amounts not less than the usual amounts insured for in the same general area by companies engaged in the same or similar business, and (ii) insuring Mortgagor, the Mortgagee and the other Secured Parties against liability for personal injury and property damage relating to such Real Estate, such policies to be in such form and amounts and having such coverage as may be reasonably satisfactory to the Mortgagee. All such insurance shall (i) provide that no cancellation, material reduction in amount or material change in coverage thereof shall be effective until at least thirty (30) days after receipt by the Mortgagee of written notice thereof, (ii) name the Mortgagee as an additional insured party or loss payee, or (iii) include deductibles consistent with past practice or consistent with industry practice.

(b) If any portion of the Premises is located in an area identified as a special flood hazard area by the Federal Emergency Management Agency or other applicable agency, Mortgagor shall maintain or cause to be maintained, flood insurance in an amount equal to the lesser of: (i) the minimum amount required, under the terms of the coverage, to compensate for any damage or loss on a replacement basis (or the unpaid balance of the debt if replacement cost coverage is not available for

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the type of buildings insured), or (ii) the maximum limit of coverage available under the National Flood Insurance Act of 1968, as amended.

(c) Mortgagor promptly shall comply with and conform in all material respects to (i) all provisions of each such insurance policy, and (ii) all requirements of the insurers applicable to Mortgagor or to any of the Mortgaged Property or to the use, manner of use, occupancy, possession, operation, maintenance, alteration or repair of any of the Mortgaged Property. Mortgagor shall not use or permit the use of the Mortgaged Property in any manner which would permit any insurer to cancel any insurance policy or void coverage required to be maintained by this Mortgage.

(d) If Mortgagor is in default of its obligations to insure or deliver any such prepaid policy or policies, then Mortgagee, at its option upon 10 Business Days’ notice to Mortgagor, may effect such insurance from year to year at rates substantially similar to the rate at which Mortgagor had insured the Premises, and pay the premium or premiums therefor, and Mortgagor shall pay to Mortgagee on demand such premium or premiums so paid by Mortgagee with interest from the time of payment at the Default Rate.

(e) If the Mortgaged Property, or any part thereof, shall be destroyed or damaged and the reasonably estimated repair or replacement cost thereof would exceed $500,000, Mortgagor shall give prompt notice thereof to Mortgagee. All insurance proceeds paid or payable in connection with any damage or casualty to the Real Estate shall be applied in the manner specified in the Credit Agreement.

(f) In the event of foreclosure of this Mortgage or other transfer of title to the Mortgaged Property, all right, title and interest of Mortgagor in and to any insurance policies then in force shall pass to the purchaser or grantee to the extent permitted by applicable law.

7. Restrictions on Liens and Encumbrances. Except for the lien of this Mortgage and the Permitted Exceptions and except as may be expressly permitted by the Credit Agreement, Mortgagor shall not further mortgage, nor otherwise encumber the Mortgaged Property nor create or suffer to exist any lien, charge or encumbrance on the Mortgaged Property, or any part thereof, whether superior or subordinate to the lien of this Mortgage and whether recourse or non-recourse.

8. Due on Sale and Other Transfer Restrictions. Except as expressly permitted under the Credit Agreement, Mortgagor shall not sell, transfer, convey or assign all or any portion of, or any interest in, the Mortgaged Property.

9. Condemnation/Eminent Domain. Promptly upon obtaining knowledge of the institution of any proceedings for the condemnation of the Mortgaged Property, or any material portion thereof, Mortgagor will notify Mortgagee of the pendency of such proceedings. All awards and proceeds relating to such condemnation shall be deemed Net Cash Proceeds and applied in the manner specified in the Credit Agreement.

10. Leases. Except as expressly permitted under the Credit Agreement, including, but not limited to, Section 6.6 of the Credit Agreement, Mortgagor shall not (a) execute an assignment or pledge of any Lease relating to all or any portion of the Mortgaged Property other than in favor of Mortgagee, or (b) execute or permit to exist any Lease of any of the Mortgaged Property.

11. Further Assurances. To further assure Mortgagee’s rights under this Mortgage, Mortgagor agrees promptly upon reasonable demand of Mortgagee to do any act or execute any additional documents (including, but not limited to, security agreements on any personalty included or to be included in the Mortgaged Property and a separate assignment of each Lease in recordable form) as may be reasonably required by Mortgagee to confirm the lien of this Mortgage and all other rights or benefits conferred on Mortgagee by this Mortgage.

12. Mortgagee’s Right to Perform. If Mortgagor fails to perform any of the covenants or agreements of Mortgagor, within the applicable grace period, if any, provided for in the Credit Agreement, Mortgagee, without waiving or releasing Mortgagor from any obligation or default under this Mortgage, may (but shall be under no obligation to), at any time upon 10 Business Days’ written notice to Mortgagor pay or perform the same, and the amount or cost thereof, with interest at the Default Rate, shall immediately be due from Mortgagor to Mortgagee and the same shall be secured by this Mortgage and shall be a lien on the Mortgaged Property prior to any right, title to, interest in, or claim upon the Mortgaged Property attaching subsequent to the lien of this Mortgage. No payment or advance of money by Mortgagee under this Section shall be deemed or construed to cure Mortgagor’s default or waive any right or remedy of Mortgagee.

13. Remedies. (a) Upon the occurrence and during the continuance of any Event of Default, Mortgagee may immediately take such action, without notice or demand, as it deems advisable to protect and enforce its rights against Mortgagor and in and to the Mortgaged Property, including, but not limited to, the following actions, each of which may be pursued concurrently or

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otherwise to the extent permitted by applicable law, at such time and in such manner as Mortgagee may determine, in its sole discretion subject to compliance with applicable law, without impairing or otherwise affecting the other rights and remedies of Mortgagee:

(i) Mortgagee may, to the extent permitted by applicable law, (A) institute and maintain an action of mortgage foreclosure against all or any part of the Mortgaged Property, (B) institute and maintain an action on the Credit Agreement, the Security Agreement, or any other Loan Document, (C) sell all or part of the Mortgaged Property (Mortgagor expressly granting to Mortgagee the power of sale), or (D) take such other action at law or in equity for the enforcement of this Mortgage or any of the Loan Documents as the law may allow. Mortgagee may proceed in any such action to final judgment and execution thereon for all sums due hereunder, together with interest thereon at the Default Rate and all costs of suit, including, without limitation, reasonable attorneys’ fees and disbursements. Interest at the Default Rate shall be due on any judgment obtained by Mortgagee from the date of judgment until actual payment is made of the full amount of the judgment; and

(ii) Mortgagee may personally, or by its agents, attorneys and employees and without regard to the adequacy or inadequacy of the Mortgaged Property or any other collateral as security for the Secured Obligations enter into and upon the Mortgaged Property and each and every part thereof and exclude Mortgagor and its agents and employees therefrom without liability for trespass, damage or otherwise (Mortgagor hereby agreeing to surrender possession of the Mortgaged Property to Mortgagee upon demand at any such time) and use, operate, manage, maintain and control the Mortgaged Property and every part thereof. Following such entry and taking of possession, Mortgagee shall be entitled, without limitation, (x) to lease all or any part or parts of the Mortgaged Property for such periods of time and upon such conditions as Mortgagee may, in its discretion, deem proper, (y) to enforce, cancel or modify any Lease subject to the rights of any counterparty to such Lease and (z) generally to execute, do and perform any other act, deed, matter or thing concerning the Mortgaged Property as Mortgagee shall deem appropriate as fully as Mortgagor might do.

(b) In case of a foreclosure sale, the Real Estate may be sold, at Mortgagee’s election, in one parcel or in more than one parcel and Mortgagee is specifically empowered (without being required to do so, and in its sole and absolute discretion) to cause successive sales of portions of the Mortgaged Property to be held.

(c) In the event of any breach of any of the covenants, agreements, terms or conditions contained in this Mortgage, Mortgagee shall be entitled to enjoin such breach and obtain specific performance of any covenant, agreement, term or condition and Mortgagee shall have the right to invoke any equitable right or remedy as though other remedies were not provided for in this Mortgage.

(d) It is agreed that if an Event of Default shall occur and be continuing, any and all proceeds of the Mortgaged Property received by Mortgagee shall be held by Mortgagee for the benefit of the Secured Parties as collateral security for the Secured Obligations (whether matured or unmatured), and shall be applied, subject to applicable law, in payment of the Secured Obligations in the manner set forth in Section 7.5 of the Security Agreement.

14. Right of Mortgagee to Credit Sale. Upon the occurrence of any sale made under this Mortgage, whether made under the power of sale or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale, Mortgagee may bid for and acquire the Mortgaged Property or any part thereof. In lieu of paying cash therefor, Mortgagee may make settlement for the purchase price by crediting upon the Secured Obligations or other sums secured by this Mortgage, the net sales price after deducting therefrom the expenses of sale and the cost of the action and any other sums which Mortgagee is authorized to deduct under this Mortgage. In such event, this Mortgage, the applicable Loan Documents and documents evidencing expenditures secured hereby may be presented to the person or persons conducting the sale in order that the amount so used or applied may be credited upon the Secured Obligations as having been paid.

15. Appointment of Receiver. If an Event of Default shall have occurred and be continuing, Mortgagee as a matter of right and upon five (5) business Days’ prior written notice to Mortgagor, unless otherwise required by applicable law, and without regard to the adequacy or inadequacy of the Mortgaged Property or any other collateral or the interest of Mortgagor therein as security for the Secured Obligations, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers or other manager of the Mortgaged Property, without requiring the posting of a surety bond, and without reference to the adequacy or inadequacy of the value of the Mortgaged Property or the solvency or insolvency of Mortgagor or any other party obligated for payment of all or any part of the Secured Obligations, and whether or not waste has occurred with respect to the Mortgaged Property, and Mortgagor hereby irrevocably consents to such appointment. Any such receiver or receivers or manager shall have all the usual powers and duties of receivers in like or similar cases and all the powers and duties of Mortgagee in case of entry as provided in this Mortgage, including, without limitation and to the extent permitted by law, the right to enter into leases upon

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reasonable terms with respect to all or any part of the Mortgaged Property, and shall continue as such and exercise all such powers until the date of confirmation of sale of the Mortgaged Property unless such receivership is sooner terminated.

16. Extension, Release, etc. (a) Without affecting the lien or charge of this Mortgage upon any portion of the Mortgaged Property not then or theretofore released as security for the full amount of the Secured Obligations, Mortgagee may, from time to time and without notice, agree to (i) release any person liable for the indebtedness borrowed or guaranteed under the Loan Documents, (ii) extend the maturity or alter any of the terms of the indebtedness borrowed or guaranteed under the Loan Documents or any other guaranty thereof, (iii) grant other indulgences, (iv) release or reconvey, or cause to be released or reconveyed at any time at Mortgagee’s option any parcel, portion or all of the Mortgaged Property, (v) take or release any other or additional security for any obligation herein mentioned, or (vi) make compositions or other arrangements with debtors in relation thereto.

(b) No recovery of any judgment by Mortgagee and no levy of an execution under any judgment upon the Mortgaged Property or upon any other property of Mortgagor shall affect the lien of this Mortgage or any liens, rights, powers or remedies of Mortgagee hereunder, and such liens, rights, powers and remedies shall continue unimpaired.

(c) If Mortgagee shall have the right to foreclose this Mortgage or to direct a Mortgagee to exercise its power of sale, Mortgagor authorizes Mortgagee at its option to foreclose the lien of this Mortgage (or direct Mortgagee to sell the Mortgaged Property, as the case may be) subject to the rights of any tenants of the Mortgaged Property. The failure to make any such tenants parties defendant to any such foreclosure proceeding and to foreclose their rights, or to provide notice to such tenants as required in any statutory procedure governing a sale of the Mortgaged Property by Mortgagee, or to terminate such tenant’s rights in such sale, will not be asserted by Mortgagor as a defense to any proceeding instituted by Mortgagee to collect the Secured Obligations or to foreclose the lien of this Mortgage.

(d) Unless expressly provided otherwise, in the event that ownership of this Mortgage and title to the Mortgaged Property or any estate therein shall become vested in the same person or entity, this Mortgage shall not merge in such title but shall continue as a valid lien on the Mortgaged Property for the amount secured hereby.

17. Security Agreement under Uniform Commercial Code. (a) It is the intention of the parties hereto that this Mortgage shall constitute a “security agreement” within the meaning of the Uniform Commercial Code (the “Code”) of the State in which the Mortgaged Property is located. If an Event of Default shall occur and be continuing under this Mortgage, then in addition to having any other right or remedy available at law or in equity, Mortgagee shall have the option of either (i) proceeding under the Code and exercising such rights and remedies as may be provided to a secured party by the Code with respect to all or any portion of the Mortgaged Property which is personal property (including, without limitation, taking possession of and selling such property) or (ii) treating such property as real property and proceeding with respect to both the real and personal property constituting the Mortgaged Property in accordance with Mortgagee’s rights, powers and remedies with respect to the real property (in which event the default provisions of the Code shall not apply). If Mortgagee shall elect to proceed under the Code, then ten (10) Business Days’ notice of sale of the personal property shall be deemed reasonable notice and the reasonable expenses of retaking, holding, preparing for sale, selling and the like incurred by Mortgagee shall include, but not be limited to, reasonable attorneys’ fees and legal expenses. At Mortgagee’s request, and upon reasonable prior written notice delivered to Mortgagor by Mortgagee, Mortgagor shall assemble the personal property and make it available to Mortgagee at a place designated by Mortgagee which is reasonably convenient to both parties.

(b) Certain portions of the Mortgaged Property are or will become “fixtures” (as that term is defined under the Code) on the Land, and this Mortgage, upon being filed for record in the real estate records of the county wherein such fixtures are situated, shall operate also as a financing statement filed and indexed as a fixture filing in accordance with the applicable provisions of said Code upon such portions of the Mortgaged Property which are fixtures and any personal property that may now be or hereafter become fixtures. The addresses of the Mortgagor, as debtor, and Mortgagee, as secured party, are set forth in the first page of this Mortgage.

(c) The real property to which the fixtures relate is described in Schedule A attached hereto. The record owner of the real property described in Schedule A hereto is Mortgagor. The name, type organization and jurisdiction of organization of the debtor for purposes of this financing statement are the name, type of organization and jurisdiction of organization of the Mortgagor set forth in the first paragraph of this Mortgage, and the name of the secured party for purposes of this financing statement is the name of the Mortgagee set forth in the first paragraph of this Mortgage. The mailing address of the Mortgagor/debtor is the address of the Mortgagor set forth in the first paragraph of this Mortgage. The mailing address of the Mortgagee/secured party from which information concerning the security interest hereunder may be obtained is the address of the Mortgagee set forth in the first paragraph of this Mortgage.

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18. Assignment of Rents. (a) Mortgagor hereby assigns to Mortgagee all of Mortgagor's right, title and interest in, to and under the Leases and the Rents as further security for the payment of and performance of the Secured Obligations, and Mortgagor grants to Mortgagee the right to enter the Mortgaged Property for the purpose of collecting the same and to let the Mortgaged Property or any part thereof, and to apply the Rents on account of the Secured Obligations. The foregoing assignment and grant is present and absolute and shall continue in effect until the Secured Obligations are fully paid and performed, but Mortgagee hereby waives the right to enter the Mortgaged Property for the purpose of collecting the Rents and Mortgagor shall be entitled to collect, receive, use and retain the Rents until the occurrence and during the continuance of an Event of Default under this Mortgage. Such right of Mortgagor to collect, receive, use and retain the Rents may be revoked by Mortgagee upon the occurrence and during the continuance of any Event of Default under this Mortgage by giving not less than five (5) Business Days’ prior written notice of such revocation to Mortgagor; and in the event such notice is given, Mortgagor shall pay over to Mortgagee, or to any receiver appointed to collect the Rents, any lease security deposits in Mortgagor's possession or under Mortgagor's control. Mortgagor shall not accept prepayments of installments of Rent to become due for a period of more than one month in advance (except for security deposits and estimated payments of percentage rent, if any).

(b) Mortgagor has not affirmatively done any act which would prevent Mortgagee from, or limit Mortgagee in, acting under any of the provisions of the foregoing assignment.

(c) Except for any matter disclosed in the Loan Documents, no action has been brought or, so far as is known to Mortgagor, is threatened, which would interfere in any way with the right of Mortgagor to execute the foregoing assignment and perform all of Mortgagor’s obligations contained in this Section.

19. Additional Rights. The holder of any subordinate lien or subordinate mortgage on the Mortgaged Property shall have no right to terminate any Lease whether or not such Lease is subordinate to this Mortgage nor shall Mortgagor consent to any holder of any subordinate lien or subordinate mortgage joining any tenant under any Lease in any action to foreclose the lien or modify, interfere with, disturb or terminate the rights of any tenant under any Lease. By recordation of this Mortgage all subordinate lienholders and the mortgagees and beneficiaries under subordinate mortgages are subject to and notified of this provision, and any action taken by any such lienholder or beneficiary contrary to this provision shall be null and void. Any such application shall not be construed to cure or waive any Default or Event of Default or invalidate any act taken by Mortgagee on account of such Default or Event of Default.

20. Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in the notice provisions of the Credit Agreement.

21. No Oral Modification. Neither this Mortgage nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Mortgagee and the Mortgagor, subject to any consent required in accordance with the Credit Agreement or the Intercreditor Agreement.

22. Partial Invalidity. In the event any one or more of the provisions contained in this Mortgage shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, but each shall be construed as if such invalid, illegal or unenforceable provision had never been included. Notwithstanding anything contained in this Mortgage or in any provisions of any Loan Document, the obligations of Mortgagor and of any other obligor under any Loan Documents shall be subject to the limitation that Mortgagee shall not charge, take or receive, nor shall Mortgagor or any other obligor be obligated to pay to Mortgagee, any amounts constituting interest in excess of the maximum rate permitted by law to be charged by Mortgagee.

23. Mortgagor’s Waiver of Rights. (a) Mortgagor hereby voluntarily and knowingly releases and waives any and all rights to retain possession of the Mortgaged Property after the occurrence and during the continuation of an Event of Default hereunder and the exercise by Mortgagee of its remedies hereunder and any and all rights of redemption from sale under any order or decree of foreclosure (whether full or partial), pursuant to rights, if any, therein granted, as allowed under any applicable law, on its own behalf, on behalf of all persons claiming or having an interest (direct or indirectly) by, through or under each constituent of Mortgagor and on behalf of each and every person acquiring any interest in the Mortgaged Property subsequent to the date hereof, it being the intent hereof that any and all such rights of redemption of each constituent of Mortgagor and all such other persons are and shall be deemed to be hereby waived to the fullest extent permitted by applicable law or replacement statute. Each constituent of Mortgagor shall not invoke or utilize any such law or laws or otherwise hinder, delay, or impede the execution of any right, power or remedy herein or otherwise granted or delegated to Mortgagee, but shall permit the execution of every such right, power, and remedy as though no such law or laws had been made or enacted.

(b) To the fullest extent permitted by law, Mortgagor waives the benefit of all laws now existing or that may subsequently be enacted providing for (i) any appraisement before sale of any portion of the Mortgaged Property, (ii) any

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extension of the time for the enforcement of the collection of the Secured Obligations or the creation or extension of a period of redemption from any sale made in collecting such debt and (iii) exemption of the Mortgaged Property from attachment, levy or sale under execution or exemption from civil process. To the full extent Mortgagor may do so, Mortgagor agrees that Mortgagor will not at any time insist upon, plead, claim or take the benefit or advantage of any law now or hereafter in force providing for any appraisement, valuation, stay, exemption, extension or redemption, or requiring foreclosure of this Mortgage before exercising any other remedy granted hereunder and Mortgagor, for Mortgagor and its successors and assigns, and for any and all persons ever claiming any interest in the Mortgaged Property, to the extent permitted by law, hereby waives and releases all rights of redemption, valuation, appraisement, stay of execution, notice of election to mature (except as expressly provided in the Loan Documents) or declare due the whole of the secured indebtedness and marshalling in the event of exercise by Mortgagee of the foreclosure rights, power of sale, or other rights hereby created.

24. Remedies Not Exclusive. Mortgagee shall be entitled to enforce payment and performance of the Secured Obligations and to exercise all rights and powers under this Mortgage or under any of the other Loan Documents or other agreement or any laws now or hereafter in force, notwithstanding some or all of the Secured Obligations may now or hereafter be otherwise secured, whether by mortgage, security agreement, pledge, lien, assignment or otherwise. Neither the acceptance of this Mortgage nor its enforcement shall prejudice or in any manner affect Mortgagee’s rights to realize upon or enforce any other security now or hereafter held by Mortgagee, it being agreed that Mortgagee shall be entitled to enforce this Mortgage and any other security now or hereafter held by Mortgagee in such order and manner as Mortgagee may determine in its absolute discretion. No remedy herein conferred upon or reserved to Mortgagee is intended to be exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy given by any of the Loan Documents to Mortgagee or to which either may otherwise be entitled, may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by Mortgagee, as the case may be. In no event shall Mortgagee, in the exercise of the remedies provided in this Mortgage (including, without limitation, in connection with the assignment of Rents to Mortgagee, or the appointment of a receiver and the entry of such receiver on to all or any part of the Mortgaged Property), be deemed a “Mortgagee in possession,” and Mortgagee shall not in any way be made liable for any act, either of commission or omission, in connection with the exercise of such remedies.

25. Multiple Security. If (a) the Premises shall consist of one or more parcels, whether or not contiguous and whether or not located in the same county, or (b) in addition to this Mortgage, Mortgagee shall now or hereafter hold or be the beneficiary of one or more additional mortgages, liens, deeds of trust or other security (directly or indirectly) for the Secured Obligations upon other property in the State in which the Premises are located (whether or not such property is owned by Mortgagor or by others) or (c) both the circumstances described in clauses (a) and (b) shall be true, then to the fullest extent permitted by law, Mortgagee may, at its election, commence or consolidate in a single foreclosure action all foreclosure proceedings instituted in accordance with the terms and conditions of this Mortgage against all such collateral securing the Secured Obligations (including the Mortgaged Property), which action may be brought or consolidated in the courts of, or sale conducted in, any county in which any of such collateral is located. Mortgagor acknowledges that the right to maintain a consolidated foreclosure action is a specific inducement to Mortgagee to extend the indebtedness borrowed pursuant to or guaranteed by the Loan Documents, and Mortgagor expressly and irrevocably waives any objections to the commencement or consolidation of the foreclosure proceedings in a single action and any objections to the laying of venue or based on the grounds of forum non conveniens which it may now or hereafter have. Mortgagor further agrees that if Mortgagee shall be prosecuting one or more foreclosure or other proceedings against a portion of the Mortgaged Property or against any collateral other than the Mortgaged Property, which collateral directly or indirectly secures the Secured Obligations, or if Mortgagee shall have obtained a judgment of foreclosure and sale or similar judgment against such collateral, then, whether or not such proceedings are being maintained or judgments were obtained in or outside the State in which the Premises are located, Mortgagee may commence or continue any foreclosure proceedings and exercise its other remedies granted in this Mortgage against all or any part of the Mortgaged Property and Mortgagor waives any objections to the commencement or continuation of a foreclosure of this Mortgage or exercise of any other remedies hereunder based on such other proceedings or judgments, and waives any right to seek to dismiss, stay, remove, transfer or consolidate either any action under this Mortgage or such other proceedings on such basis. Neither the commencement nor continuation of proceedings to foreclose this Mortgage, nor the exercise of any other rights hereunder nor the recovery of any judgment by Mortgagee in any such proceedings or the occurrence of any sale in any such proceedings shall prejudice, limit or preclude Mortgagee’s right to commence or continue one or more foreclosure or other proceedings or obtain a judgment against any other collateral (either in or outside the State in which the Premises are located) which directly or indirectly secures the Secured Obligations, and Mortgagor expressly waives any objections to the commencement of, continuation of, or entry of a judgment in such other sales or proceedings or exercise of any remedies in such sales or proceedings based upon any action or judgment connected to this Mortgage, and Mortgagor also waives any right to seek to dismiss, stay, remove, transfer or consolidate either such other sales or proceedings or any sale or action under this Mortgage on such basis. It is expressly understood and agreed that to the fullest extent permitted by law, Mortgagee may, at its election, cause the sale of all collateral which is the subject of a single foreclosure action at either a single sale or at multiple sales conducted simultaneously and take such other measures as

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are appropriate in order to effect the agreement of the parties to dispose of and administer all collateral securing the Secured Obligations (directly or indirectly) in the most economical and least time-consuming manner.

26. Successors and Assigns. All covenants of Mortgagor contained in this Mortgage are imposed solely and exclusively for the benefit of Mortgagee, and its successors and assigns, and no other person or entity shall have standing to require compliance with such covenants or be deemed, under any circumstances, to be a beneficiary of such covenants, any or all of which may be freely waived in whole or in part by Mortgagee at any time if, in its sole discretion, such a waiver is deemed advisable. All such covenants of Mortgagor shall run with the land and bind Mortgagor, the successors and assigns of Mortgagor and all subsequent owners, encumbrancers and tenants of the Mortgaged Property, and shall inure to the benefit of Mortgagee and its successors and assigns. If there shall be more than one Mortgagor, the obligations of the Mortgagors shall be joint and several.

27. No Waivers, etc. Any failure by Mortgagee to insist upon the strict performance by Mortgagor of any of the terms and provisions of this Mortgage shall not be deemed to be a waiver of any of the terms and provisions hereof, and Mortgagee, notwithstanding any such failure, shall have the right thereafter to insist upon the strict performance by Mortgagor of any and all of the terms and provisions of this Mortgage to be performed by Mortgagor. Mortgagee may release, regardless of consideration and without the necessity for any notice to or consent by the holder of any subordinate lien on the Mortgaged Property, any part of the security held for the Secured Obligations without, as to the remainder of the security, in any way impairing or affecting the lien of this Mortgage or the priority of such lien over any subordinate lien or mortgage.

28. Governing Law, etc. This Mortgage shall be governed by and construed and interpreted in accordance with the laws of the State in which the Mortgaged Property is located, except that Mortgagor expressly acknowledges that by their respective terms the other Loan Documents shall be governed and construed in accordance with the laws of the State of New York, and for purposes of consistency, Mortgagor agrees that in any in personam proceeding related to this Mortgage the rights of the parties to this Mortgage shall also be governed by and construed in accordance with the laws of the State of New York governing contracts made and to be performed in that State.

29. Certain Definitions. Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, words used in this Mortgage shall be used interchangeably in singular or plural form and the word “Mortgagor” shall mean “each Mortgagor or any subsequent owner or owners of the Mortgaged Property or any part thereof or interest therein,” the word “Mortgagee” shall mean “Mortgagee or any successor agent for the Lenders,” the word “person” shall include any individual, corporation, partnership, limited liability company, trust, unincorporated association, government, governmental authority, or other entity, and the words “Mortgaged Property” shall include any portion of the Mortgaged Property or interest therein. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice versa. The captions in this Mortgage are for convenience or reference only and in no way limit or amplify the provisions hereof.

30. Enforcement of Expenses; Indemnification. To the extent required to be paid or reimbursed by the Borrower under Section 9.5 of the Credit Agreement,

(a) Mortgagor agrees to pay or reimburse each Lender and the Mortgagee for all its costs and expenses incurred in enforcing or preserving any rights under this Mortgage and the other Loan Documents to which Mortgagor is a party, including, without limitation, the fees and disbursements of counsel (including the allocated fees and expenses of in-house counsel) to each Lender and of counsel to the Mortgagee.

(b) Mortgagor agrees to pay, and to save the Mortgagee and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Mortgaged Property or in connection with any of the transactions contemplated by this Mortgage.

(c) Mortgagor agrees to pay, and to save the Mortgagee and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Mortgage to the extent the Borrower would be required to do so pursuant to Section 9.5 of the Credit Agreement.

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(d) The agreements in this Section 30 shall survive repayment of the Secured Obligations and all other amounts payable under the Credit Agreement and the other Loan Documents.

31. Last Dollars Secured; Priority. This Mortgage secures only a portion of the indebtedness owing or which may become owing by Mortgagor to the Secured Parties. The parties agree that any payments or repayments of such indebtedness shall be and be deemed to be applied first to the portion of the indebtedness that is not secured hereby, it being the parties’ intent that the portion of the indebtedness last remaining unpaid shall be secured hereby. If at any time this Mortgage shall secure less than all of the principal amount of the Secured Obligations, it is expressly agreed that any repayments of the principal amount of the Secured Obligations shall not reduce the amount of the lien of this Mortgage until the lien amount shall equal the principal amount of the Secured Obligations outstanding.

32. Release; Termination. Upon (i) the Disposition of any portion of the Mortgaged Property in accordance with the Credit Agreement or (ii) the occurrence of the Termination Date, the liens and security interests granted herein shall automatically terminate with respect to (A) such portion of the Mortgaged Property (in the case of clause (i)) or (B) all of the Mortgaged Property (in the case of clause (ii)). Upon the Disposition or termination, the Mortgagee will, at the Mortgagor’s sole expense, deliver to Mortgagor, without any representations, warranties or recourse of any kind whatsoever, all termination statements, releases and similar documents that Mortgagor shall reasonably request to evidence such termination; provided that the Mortgagee shall not be required to take any action or execute or deliver any document if doing so would violate the terms of the Loan Documents.

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This Mortgage has been duly executed by Mortgagor as of the date first set forth above and is intended to be effective as of such date.

__________________., a ______________

By: ___________________________
Name: Elizabeth A. Allen
Title: Secretary

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ACKNOWLEDGEMENT

COMMONWEALTH OF VIRGINIA )

)

COUNTY OF FAIRFAX )

The foregoing instrument was acknowledged before me on September __, 2015, by Elizabeth A. Allen who is Secretary of __________________________, a ____________________, on behalf of said limited partnership.

Notary Public, County, VA

Acting in County, VA

My commission expires:

[SEAL]

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Schedule A

Description of the Land

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FORM OF DEED OF TRUST

______________________________________________________________________________Prepared by, and after recording, please return to:
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attn: Elaine Cronin

______________________________________________________________________________

DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS, FINANCING STATEMENT AND FIXTURE FILING

made by

_______________________________, Grantor

in favor of _________________________, a ____________

JPMORGAN CHASE BANK, N.A., as Administrative Agent, Beneficiary

______________________________________________________________________________

Dated as of September 25, 2015

Location: ______________________________

County of ______________________________

Tax Map #’s ________________________________

THIS DEED OF TRUST SECURES OBLIGATORY ADVANCES AND IS MADE FOR COMMERCIAL PURPOSES.

THIS IS A CREDIT LINE DEED OF TRUST.

FIXTURE FILING: This Instrument is also a Uniform Commercial Code financing statement filed as a fixture filing in accordance with Code of _________________________. The collateral is described in this Deed of Trust, and includes goods that are or may become affixed to the real property described herein. The name and addresses of the debtor (Grantor) and the secured party (Beneficiary) are set forth below. The record owner of the real property is ________________________________.

THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING, dated as of September 25, 2015 is made by (i) _______________________, a _____________________ (“Grantor”), whose address is c/o Gannett Co., Inc., 7950 Jones Branch Drive, McLean, VA 22107, (ii) in favor of _______________________, a ________________, (“Trustee”), whose address is __________ ______________________, (iii) to JPMORGAN CHASE BANK, N.A., as Administrative Agent (in such capacity, “Beneficiary”) whose address is 500 Stanton Christiana Road, Ops 2, Newark, DE 19713. References to this “Deed of Trust” shall mean this instrument and any and all renewals, modifications, amendments, supplements, extensions, consolidations, substitutions, spreaders and replacements of this instrument.

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Background

A. Gannett Co., Inc., a Delaware corporation (the “Borrower”), JPMorgan Chase Bank, N.A., as Administrative Agent, and PNC Bank, N.A. and U.S. Bank National Association, as Co-Syndication Agents, and the other Lenders party thereto (collectively, the “Lenders”) are parties to that certain Credit Agreement, dated as of June 29, 2015 (as amended, supplemented, restated, replaced, substituted or otherwise modified from time to time, the “Credit Agreement”).

B. The Grantor, affiliates of the Grantor and Beneficiary have entered into a Security Agreement dated as of June 29, 2015 (as amended, supplemented, restated, replaced, substituted or otherwise modified from time to time, the “Security Agreement”) pursuant to which Grantor and affiliates of Grantor have granted liens in favor of Beneficiary on the assets of such parties.

C. The Credit Agreement requires the Grantor to deliver a duly executed copy of this Deed of Trust.

D. Grantor is the owner of the fee simple estate in the parcel(s) of real property described on Schedule A attached hereto (the “Land”), and owns all of the buildings, improvements, structures, and fixtures now located on the Land (the “Improvements”; the Land and the Improvements being collectively referred to as the “Real Estate”).

NOW, THEREFORE, in consideration of the premises and for other valuable consideration, the receipt and sufficiency of which the parties hereto hereby acknowledge, Grantor hereby agrees with the Beneficiary, for the ratable benefit of the Secured Parties, as follows:

Granting Clauses

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor agrees that to secure the prompt and complete payment and performance in full when due (whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise, including the payment of amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code) of all of Grantor’s Guarantor Obligations (collectively, the “Secured Obligations”;

GRANTOR HEREBY GRANTS TO TRUSTEE, IN TRUST, FOR THE BENEFIT OF THE SECURED PARTIES, AND WITH ALL POWERS OF SALE AND OTHER STATUTORY RIGHTS AND COVENANTS IN THE STATE IN WHICH THE REAL ESTATE IS LOCATED, ALL OF GRANTOR’S RIGHT, TITLE AND INTEREST IN AND TO THE FOLLOWING DESCRIBED PROPERTY:

(a) the Real Estate or any part thereof;

(c) all of the fixtures, chattels, business machines, machinery, apparatus, equipment, furnishings, fittings, appliances and articles of personal property of every kind and nature whatsoever, and all appurtenances and additions thereto and substitutions or replacements thereof (together with, in each case, attachments, components, parts and accessories) attached to, or contained in or used or usable in any way in connection with any operation or letting of the Real Estate, including but without limiting the generality of the foregoing, all screens, awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs, storm doors and windows, furniture and furnishings, heating, electrical, and mechanical equipment, lighting, switchboards, plumbing, ventilating, air conditioning and air-cooling apparatus, refrigerating, and incinerating equipment, escalators, elevators, loading and unloading equipment and systems, stoves, ranges, laundry equipment, cleaning systems (including window cleaning apparatus), telephones, communication systems (including satellite dishes and antennae), televisions, computers, sprinkler systems and other fire prevention and extinguishing apparatus and materials, security systems, motors, engines, machinery, pipes, pumps, tanks, conduits, appliances, fittings and fixtures of every kind and description (all of the foregoing in this paragraph (c) being referred to as the “Equipment”);

(d) all substitutes and replacements of, and all additions and improvements to, the Real Estate and the Equipment, subsequently acquired by or released to Grantor or constructed, assembled or placed by Grantor on the Real Estate,

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immediately upon such acquisition, release, construction, assembling or placement, including, without limitation, any and all building materials whether stored at the Real Estate or offsite, and, in each such case, without any further deed, conveyance, assignment or other act by Grantor;

(e) all leases, subleases, underlettings, concession agreements, management agreements, licenses and other agreements relating to the use or occupancy of the Real Estate or the Equipment or any part thereof, now existing or subsequently entered into by Grantor and whether written or oral and all guarantees of any of the foregoing (collectively, as any of the foregoing may be amended, restated, extended, renewed or modified from time to time, the “Leases”), and all rights of Grantor in respect of cash and securities deposited thereunder and the right to receive and collect the revenues, income, rents, issues and profits thereof, together with all other rents, royalties, issues, profits, revenue, income and other benefits arising from the use and enjoyment of the Mortgaged Property (as defined below) (collectively, the “Rents”);

(g) to the extent not prohibited under the applicable contract, consent, license or other item unless the appropriate consent has been obtained, (i) all contracts from time to time executed by Grantor or any manager or agent on its behalf relating to the ownership, construction, maintenance, repair, operation, occupancy, sale or financing of the Real Estate or Equipment or any part thereof and all agreements and options relating to the purchase or lease of any portion of the Real Estate or any property which is adjacent or peripheral to the Real Estate, together with the right to exercise such options and all leases of Equipment, (ii) all consents, licenses, building permits, certificates of occupancy and other governmental approvals relating to construction, completion, occupancy, use or operation of the Real Estate or any part thereof, and (iii) all drawings, plans, specifications and similar or related items relating to the Real Estate; and

(h) all proceeds, both cash and noncash, of the foregoing;

All of the foregoing property and rights and interests now owned or held or subsequently acquired by Grantor and described in the foregoing clauses (a) through (c) are collectively referred to as the “Premises”, and those described in the foregoing clauses (a) through (h) are collectively referred to as the “Mortgaged Property.”

TO HAVE AND TO HOLD the Mortgaged Property and the rights and privileges hereby mortgaged unto Trustee, its successors and assigns, in trust, with power of sale, for the uses and purposes set forth, until the Secured Obligations are fully paid and performed.

This Deed of Trust covers present and future advances and re-advances, in the aggregate amount of the Secured Obligations, made by the Secured Parties for the benefit of Grantor, and the lien of such future advances and re-advances shall relate back to the date of this Deed of Trust.

Terms and Conditions

Grantor further represents, warrants, covenants and agrees with Beneficiary and the Secured Parties as follows:

1.Defined Terms. Capitalized terms used herein (including in the "Background" and "Granting Clauses" sections above) and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement or the Security Agreement, as applicable. References in this Deed of Trust to the “Default Rate” shall mean the interest rate applicable pursuant to Section 2.10(d)(ii) of the Credit Agreement.

2.Warranty of Title. Grantor warrants that it has record title in fee simple to the Real Estate, and good title to the rest of the Mortgaged Property, subject only to the matters that are set forth in Schedule B of the title insurance policy being issued to Beneficiary to insure the lien of this Deed of Trust and any other Lien or encumbrance as permitted by the Credit Agreement (the “Permitted Exceptions”). Grantor shall warrant, defend and preserve such title and the lien of this Deed of

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Trust against all claims of all persons and entities (not including the holders of the Permitted Exceptions). Grantor represents and warrants that it has the right to grant this Deed of Trust for the Mortgaged Property.

3.Payment of Secured Obligations. Grantor shall pay and perform the Secured Obligations at the times and places and in the manner specified in the Loan Documents.

4.Requirements. Grantor shall comply with all covenants, restrictions and conditions now or later of record which may be applicable to any of the Mortgaged Property, or to the use, manner of use, occupancy, possession, operation, maintenance, alteration, repair or reconstruction of any of the Mortgaged Property, except where a failure to do so could not reasonably be expected to have a material adverse effect (considered both individually and together with other such failures) on (i) the current business, operations or condition (financial or otherwise) of the Grantor, (ii) the current use of the Mortgaged Property or (iii) the value of the Mortgaged Property (assuming its current use).

5.Payment of Taxes and Other Impositions. (a) Prior to the date on which any fine, penalty, interest or cost may be added thereto or imposed, Grantor shall pay and discharge all taxes, charges and assessments of every kind and nature, all charges for any easement or agreement maintained for the benefit of any of the Real Estate, all general and special assessments, levies, permits, inspection and license fees, all water and sewer rents and charges, vault taxes and all other public charges even if unforeseen or extraordinary, imposed upon or assessed against or which may become a lien on any of the Real Estate, or arising in respect of the occupancy, use or possession thereof, together with any penalties or interest on any of the foregoing (all of the foregoing are collectively referred to herein as the “Impositions”), except where (i) the validity or amount thereof is being contested in good faith by appropriate proceedings, (ii) the Grantor has set aside on its books adequate reserves with respect thereto in accordance with GAAP, or (iii) except as otherwise permitted by the Credit Agreement. Upon written request by Beneficiary, Grantor shall deliver to Beneficiary evidence reasonably acceptable to Beneficiary showing the payment of any such Imposition. If by law any Imposition, at Grantor’s option, may be paid in installments (whether or not interest shall accrue on the unpaid balance of such Imposition), Grantor may elect to pay such Imposition in such installments and shall be responsible for the payment of such installments with interest, if any.

(b) Beneficiary may pay any Imposition after the date such Imposition shall have become delinquent, and add to the Secured Obligations the amount so paid, together with interest from the time of payment at the Default Rate. Any sums paid by Beneficiary in discharge of any Impositions shall be (i) a lien on the Premises secured hereby prior to any right or title to, interest in, or claim upon the Premises subordinate to the lien of this Deed of Trust, and (ii) payable on demand by Grantor to Beneficiary together with interest at the Default Rate as set forth above.

6.Insurance. (a) Grantor shall maintain, with financially sound and reputable companies, insurance policies (i) insuring the Real Estate against loss by fire, explosion, theft and such other casualties in amounts not less than the usual amounts insured for in the same general area by companies engaged in the same or similar business, and (ii) insuring Grantor, the Beneficiary and the other Secured Parties against liability for personal injury and property damage relating to such Real Estate, such policies to be in such form and amounts and having such coverage as may be reasonably satisfactory to the Beneficiary. All such insurance shall (i) provide that no cancellation, material reduction in amount or material change in coverage thereof shall be effective until at least thirty (30) days after receipt by the Beneficiary of written notice thereof, (ii) name the Beneficiary as an additional insured party or loss payee, or (iii) include deductibles consistent with past practice or consistent with industry practice.

(b) If any portion of the Premises is located in an area identified as a special flood hazard area by the Federal Emergency Management Agency or other applicable agency, Grantor shall maintain or cause to be maintained, flood insurance in an amount equal to the lesser of: (i) the minimum amount required, under the terms of the coverage, to compensate for any damage or loss on a replacement basis (or the unpaid balance of the debt if replacement cost coverage is not available for the type of buildings insured), or (ii) the maximum limit of coverage available under the National Flood Insurance Act of 1968, as amended.

(c) Grantor promptly shall comply with and conform in all material respects to (i) all provisions of each such insurance policy, and (ii) all requirements of the insurers applicable to Grantor or to any of the Mortgaged Property or to the use, manner of use, occupancy, possession, operation, maintenance, alteration or repair of any of the Mortgaged Property. Grantor shall not use or permit the use of the Mortgaged Property in any manner which would permit any insurer to cancel any insurance policy or void coverage required to be maintained by this Deed of Trust.

(d) If Grantor is in default of its obligations to insure or deliver any such prepaid policy or policies, then Beneficiary, at its option upon 10 Business Days’ notice to Grantor, may effect such insurance from year to year at rates substantially similar to the rate at which Grantor had insured the Premises, and pay the premium or premiums therefor, and Grantor shall pay

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to Beneficiary on demand such premium or premiums so paid by Beneficiary with interest from the time of payment at the Default Rate.

(e) If the Mortgaged Property, or any part thereof, shall be destroyed or damaged and the reasonably estimated repair or replacement cost thereof would exceed $500,000, Grantor shall give prompt notice thereof to Beneficiary. All insurance proceeds paid or payable in connection with any damage or casualty to the Real Estate shall be applied in the manner specified in the Credit Agreement.

(f) In the event of foreclosure of this Deed of Trust or other transfer of title to the Mortgaged Property, all right, title and interest of Grantor in and to any insurance policies then in force shall pass to the purchaser or grantee to the extent permitted by applicable law.

7.Restrictions on Liens and Encumbrances. Except for the lien of this Deed of Trust and the Permitted Exceptions and except as may be expressly permitted by the Credit Agreement, Grantor shall not further mortgage, nor otherwise encumber the Mortgaged Property nor create or suffer to exist any lien, charge or encumbrance on the Mortgaged Property, or any part thereof, whether superior or subordinate to the lien of this Deed of Trust and whether recourse or non-recourse.

8.Due on Sale and Other Transfer Restrictions. Except as expressly permitted under the Credit Agreement, Grantor shall not sell, transfer, convey or assign all or any portion of, or any interest in, the Mortgaged Property.

9.Condemnation/Eminent Domain. Promptly upon obtaining knowledge of the institution of any proceedings for the condemnation of the Mortgaged Property, or any material portion thereof, Grantor will notify Beneficiary of the pendency of such proceedings. All awards and proceeds relating to such condemnation shall be deemed Net Cash Proceeds and applied in the manner specified in the Credit Agreement.

10.Leases. Except as expressly permitted under the Credit Agreement, including, but not limited to, Section 6.6 of the Credit Agreement, Grantor shall not (a) execute an assignment or pledge of any Lease relating to all or any portion of the Mortgaged Property other than in favor of Beneficiary, or (b) execute or permit to exist any Lease of any of the Mortgaged Property.

11.Further Assurances. To further assure Beneficiary’s rights under this Deed of Trust, Grantor agrees promptly upon reasonable demand of Beneficiary to do any act or execute any additional documents (including, but not limited to, security agreements on any personalty included or to be included in the Mortgaged Property and a separate assignment of each Lease in recordable form) as may be reasonably required by Beneficiary to confirm the lien of this Deed of Trust and all other rights or benefits conferred on Beneficiary by this Deed of Trust.

12.Beneficiary’s Right to Perform. If Grantor fails to perform any of the covenants or agreements of Grantor, within the applicable grace period, if any, provided for in the Credit Agreement, Beneficiary, without waiving or releasing Grantor from any obligation or default under this Deed of Trust, may (but shall be under no obligation to), at any time upon 10 Business Days’ written notice to Grantor pay or perform the same, and the amount or cost thereof, with interest at the Default Rate, shall immediately be due from Grantor to Beneficiary and the same shall be secured by this Deed of Trust and shall be a lien on the Mortgaged Property prior to any right, title to, interest in, or claim upon the Mortgaged Property attaching subsequent to the lien of this Deed of Trust. No payment or advance of money by Beneficiary under this Section shall be deemed or construed to cure Grantor’s default or waive any right or remedy of Beneficiary.

13.Remedies. (a) Upon the occurrence and during the continuance of any Event of Default, Beneficiary, or other agent of Beneficiary, or Trustee may immediately take such action, without notice or demand, as it deems advisable to protect and enforce its rights against Grantor and in and to the Mortgaged Property, including, but not limited to, the following actions, each of which may be pursued concurrently or otherwise to the extent permitted by applicable law, at such time and in such manner as Beneficiary, or other agent of Beneficiary, or Trustee may determine, in its sole discretion subject to compliance with applicable law, without impairing or otherwise affecting the other rights and remedies of Beneficiary or Trustee:

(i) Acceleration. The Beneficiary may declare that all sums payable under the Loan Documents are immediately due and payable in full, whereupon all such sums shall be immediately due and payable in full regardless of any installment payment provisions, maturity date, or other terms and conditions of any Loan Document.

(ii) Enter, Manage, Control. The Beneficiary may enter upon the Land and Improvements, exclude the Grantor, and anyone claiming by, through or under Grantor, from the Land and Improvements, exercise all rights and powers of the Grantor with respect to the Property, and collect all Rents or other income thereof.

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(iii) Exercise Rights as Secured Party. The Beneficiary may exercise all of the rights and remedies of a secured party under the _________ Uniform Commercial Code. The Grantor waives any notice of disposition of any personal property, provided to the extent any such notice is required and cannot be waived, the Grantor agrees that such notice shall be deemed reasonable and shall fully satisfy any requirement for notice if such notice is mailed, postage prepaid, to Grantor at least five (5) days before the time of disposition.

(iv) Sell Pursuant to Power of Sale. The Beneficiary may instruct the Trustee to take possession of and sell the Property at such time and place, after such notice, subject to such leases, contracts and other interests as the Beneficiary may elect, and in accordance with such procedures as may be required or permitted by applicable law. The Grantor hereby authorizes and empowers the Trustee to take possession and sell (or in the case of any default of any purchaser to resell) the Property as aforesaid. This POWER OF SALE shall not be exhausted in the event any proceeding is dismissed before all Secured Obligations are satisfied in full. In case of a foreclosure sale, the Mortgaged Property may be sold in one parcel or in more than one parcel. Trustee shall be entitled to receive fees and expenses from such sale not to exceed the amount permitted by applicable law

(v) Other Proceedings. The Beneficiary may proceed by suit or suits at law or in equity or by any other appropriate remedy to protect and enforce the rights of the Trustee and the Beneficiary, whether for the specific performance of any covenant or agreement contained in the Loan Documents, or in aid of the execution of any power therein granted, or to foreclose this Deed of Trust, or to sell the Property under the judgment or decree of a court or courts of competent jurisdiction, or otherwise.

(vi) Entry. The Beneficiary may enter into and upon the Mortgaged Property and each and every part thereof and exclude Grantor and its agents and employees therefrom without liability for trespass, damage or otherwise (Grantor hereby agreeing to surrender possession of the Mortgaged Property to Beneficiary, or other agent of Beneficiary, or Trustee upon demand at any such time) and use, operate, manage, maintain and control the Mortgaged Property and every part thereof. Following such entry and taking of possession, Beneficiary shall be entitled, without limitation, (x) to lease all or any part or parts of the Mortgaged Property for such periods of time and upon such conditions as Beneficiary may, in its discretion, deem proper, (y) to enforce, cancel or modify any Lease subject to the rights of any counterparty to such Lease and (z) generally to execute, do and perform any other act, deed, matter or thing concerning the Mortgaged Property as Beneficiary shall deem appropriate as fully as Grantor might do.

(b) In the event of any breach of any of the covenants, agreements, terms or conditions contained in this Deed of Trust, Beneficiary, or other agent of Beneficiary, or Trustee shall be entitled to enjoin such breach and obtain specific performance of any covenant, agreement, term or condition and Beneficiary, or other agent of Beneficiary, or Trustee shall have the right to invoke any equitable right or remedy as though other remedies were not provided for in this Deed of Trust.

14.Trustee’s Compensation. Trustee is and shall be entitled to reasonable compensation for all services rendered hereunder, or in connection with the trust herein provided. Trustee’s compensation, together with any and all necessary and reasonable expenses, charges, counsel fees, including fees for legal advice concerning his rights and duties in the Mortgaged Property, and other disbursements incurred by Trustee in discharge of his duties as such, shall be a further charge and lien upon said Mortgaged Property and enforced as part of the Secured Obligations.

15.Appointment of Receiver. If an Event of Default shall have occurred and be continuing, Beneficiary as a matter of right and upon five (5) business Days’ prior written notice to Grantor, unless otherwise required by applicable law, and without regard to the adequacy or inadequacy of the Mortgaged Property or any other collateral or the interest of Grantor therein as security for the Secured Obligations, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers or other manager of the Mortgaged Property, without requiring the posting of a surety bond, and without reference to the adequacy or inadequacy of the value of the Mortgaged Property or the solvency or insolvency of Grantor or any other party obligated for payment of all or any part of the Secured Obligations, and whether or not waste has occurred with respect to the Mortgaged Property, and Grantor hereby irrevocably consents to such appointment. Any such receiver or receivers or manager shall have all the usual powers and duties of receivers in like or similar cases and all the powers and duties of Beneficiary in case of entry as provided in this Deed of Trust, including, without limitation and to the extent permitted by law, the right to enter into leases upon reasonable terms with respect to all or any part of the Mortgaged Property, and shall continue as such and exercise all such powers until the date of confirmation of sale of the Mortgaged Property unless such receivership is sooner terminated.

16.Extension, Release, etc. (a) Without affecting the lien or charge of this Deed of Trust upon any portion of the Mortgaged Property not then or theretofore released as security for the full amount of the Secured Obligations, Beneficiary may,

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from time to time and without notice, agree to (i) release any person liable for the indebtedness borrowed or guaranteed under the Loan Documents, (ii) extend the maturity or alter any of the terms of the indebtedness borrowed or guaranteed under the Loan Documents or any other guaranty thereof, (iii) grant other indulgences, (iv) release or reconvey, or cause to be released or reconveyed at any time at Beneficiary’s option any parcel, portion or all of the Mortgaged Property, (v) take or release any other or additional security for any obligation herein mentioned, or (vi) make compositions or other arrangements with debtors in relation thereto.

(b) No recovery of any judgment by Beneficiary and no levy of an execution under any judgment upon the Mortgaged Property or upon any other property of Grantor shall affect the lien of this Deed of Trust or any liens, rights, powers or remedies of Beneficiary hereunder, and such liens, rights, powers and remedies shall continue unimpaired.

(c) If Trustee, at the request of Beneficiary, shall have the right to foreclose this Deed of Trust, Grantor authorizes Trustee at its option to foreclose the lien of this Deed of Trust subject to the rights of any tenants of the Mortgaged Property. The failure to make any such tenants parties defendant to any such foreclosure proceeding and to foreclose their rights, or to provide notice to such tenants as required in any statutory procedure governing a sale of the Mortgaged Property by Trustee, or to terminate such tenant’s rights in such sale, will not be asserted by Grantor as a defense to any proceeding instituted by Beneficiary or Trustee to collect the Secured Obligations or to foreclose the lien of this Deed of Trust.

(d) Unless expressly provided otherwise, in the event that ownership of this Deed of Trust and title to the Mortgaged Property or any estate therein shall become vested in the same person or entity, this Deed of Trust shall not merge in such title but shall continue as a valid lien on the Mortgaged Property for the amount secured hereby.

17.Security Agreement under Uniform Commercial Code. (a) It is the intention of the parties hereto that this Deed of Trust shall constitute a “security agreement” within the meaning of the Uniform Commercial Code (the “Code”) of the State in which the Mortgaged Property is located. Accordingly, Grantor hereby grants to Beneficiary a security interest in the Mortgaged Property. If an Event of Default shall occur and be continuing under this Deed of Trust, then in addition to having any other right or remedy available at law or in equity, Beneficiary shall have the rights and remedies as may be provided to a secured party by the Code with respect to all or any portion of the Mortgaged Property which is personal property and, at Beneficiary’s option, the remedies provided for in this Deed of Trust. If Beneficiary shall elect to proceed under the Code, then ten (10) Business Days’ notice of sale of the personal property shall be deemed reasonable notice and the reasonable expenses of retaking, holding, preparing for sale, selling and the like incurred by Beneficiary shall include, but not be limited to, reasonable attorneys’ fees and legal expenses. At Beneficiary’s request, and upon reasonable prior written notice delivered to Grantor by Beneficiary, Grantor shall assemble the personal property and make it available to Beneficiary at a place designated by Beneficiary which is reasonably convenient to both parties.

(b) Certain portions of the Mortgaged Property are or will become “fixtures” (as that term is defined under the Code) on the Land, and this Deed of Trust, upon being filed for record in the real estate records of the county wherein such fixtures are situated, shall operate also as a financing statement filed and indexed as a fixture filing in accordance with the applicable provisions of said Code upon such portions of the Mortgaged Property which are fixtures and any personal property that may now be or hereafter become fixtures. The addresses of the Grantor, as debtor, and Beneficiary, as secured party, are set forth in the first page of this Deed of Trust.

(c) The real property to which the fixtures relate is described in Schedule A attached hereto. The record owner of the real property described in Schedule A hereto is Grantor. The name, type organization and jurisdiction of organization of the debtor for purposes of this financing statement are the name, type of organization and jurisdiction of organization of the Grantor set forth in the first paragraph of this Deed of Trust, and the name of the secured party for purposes of this financing statement is the name of the Beneficiary set forth in the first paragraph of this Deed of Trust. The mailing address of the Grantor/debtor is the address of the Grantor set forth in the first paragraph of this Deed of Trust. The mailing address of the Beneficiary/secured party from which information concerning the security interest hereunder may be obtained is the address of the Beneficiary set forth in the first paragraph of this Deed of Trust.

18.Assignment of Rents. (a) Grantor hereby assigns to Beneficiary all of Grantor's right, title and interest in, to and under the Leases and the Rents as further security for the payment of and performance of the Secured Obligations, and Grantor grants to Beneficiary the right to enter the Mortgaged Property for the purpose of collecting the same and to let the Mortgaged Property or any part thereof, and to apply the Rents on account of the Secured Obligations. The foregoing assignment and grant is present and absolute and shall continue in effect until the Secured Obligations are fully paid and performed, but Beneficiary hereby waives the right to enter the Mortgaged Property for the purpose of collecting the Rents and Grantor shall be entitled to collect, receive, use and retain the Rents until the occurrence and during the continuance of an Event of Default under this Deed of Trust. Such right of Grantor to collect, receive, use and retain the Rents may be revoked by Beneficiary upon the occurrence and during the continuance of any Event of Default under this Deed of Trust by giving not less than five (5) Business Days’ prior

EXHIBIT 10-25

written notice of such revocation to Grantor; and in the event such notice is given, Grantor shall pay over to Beneficiary, or to any receiver appointed to collect the Rents, any lease security deposits in Grantor's possession or under Grantor's control. Grantor shall not accept prepayments of installments of Rent to become due for a period of more than one month in advance (except for security deposits and estimated payments of percentage rent, if any).

(b) Grantor has not affirmatively done any act which would prevent Beneficiary from, or limit Beneficiary in, acting under any of the provisions of the foregoing assignment.

(c) Except for any matter disclosed in the Loan Documents, no action has been brought or, so far as is known to Grantor, is threatened, which would interfere in any way with the right of Grantor to execute the foregoing assignment and perform all of Grantor’s obligations contained in this Section.

19.Additional Rights. The holder of any subordinate lien or subordinate mortgage on the Mortgaged Property shall have no right to terminate any Lease whether or not such Lease is subordinate to this Deed of Trust nor shall Grantor consent to any holder of any subordinate lien or subordinate mortgage joining any tenant under any Lease in any action to foreclose the lien or modify, interfere with, disturb or terminate the rights of any tenant under any Lease. By recordation of this Deed of Trust all subordinate lienholders and the mortgagees and beneficiaries under subordinate mortgages are subject to and notified of this provision, and any action taken by any such lienholder or beneficiary contrary to this provision shall be null and void. Any such application shall not be construed to cure or waive any Default or Event of Default or invalidate any act taken by Beneficiary on account of such Default or Event of Default.

20.Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in the notice provisions of the Credit Agreement.

21.No Oral Modification. Neither this Deed of Trust nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Beneficiary and the Grantor, subject to any consent required in accordance with the Credit Agreement or the Intercreditor Agreement.

22.Partial Invalidity. In the event any one or more of the provisions contained in this Deed of Trust shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, but each shall be construed as if such invalid, illegal or unenforceable provision had never been included. Notwithstanding anything contained in this Deed of Trust or in any provisions of any Loan Document, the obligations of Grantor and of any other obligor under any Loan Documents shall be subject to the limitation that Beneficiary shall not charge, take or receive, nor shall Grantor or any other obligor be obligated to pay to Beneficiary, any amounts constituting interest in excess of the maximum rate permitted by law to be charged by Beneficiary.

23.Grantor’s Waiver of Rights. (a) Grantor hereby voluntarily and knowingly releases and waives any and all rights to retain possession of the Mortgaged Property after the occurrence and during the continuation of an Event of Default hereunder and the exercise by Beneficiary of its remedies hereunder and any and all rights of redemption from sale under any order or decree of foreclosure (whether full or partial), pursuant to rights, if any, therein granted, as allowed under any applicable law, on its own behalf, on behalf of all persons claiming or having an interest (direct or indirectly) by, through or under each constituent of Grantor and on behalf of each and every person acquiring any interest in the Mortgaged Property subsequent to the date hereof, it being the intent hereof that any and all such rights of redemption of each constituent of Grantor and all such other persons are and shall be deemed to be hereby waived to the fullest extent permitted by applicable law or replacement statute. Each constituent of Grantor shall not invoke or utilize any such law or laws or otherwise hinder, delay, or impede the execution of any right, power or remedy herein or otherwise granted or delegated to Beneficiary, but shall permit the execution of every such right, power, and remedy as though no such law or laws had been made or enacted.

(b) To the fullest extent permitted by law, Grantor waives the benefit of all laws now existing or that may subsequently be enacted providing for (i) any appraisement before sale of any portion of the Mortgaged Property, (ii) any extension of the time for the enforcement of the collection of the Secured Obligations or the creation or extension of a period of redemption from any sale made in collecting such debt and (iii) exemption of the Mortgaged Property from attachment, levy or sale under execution or exemption from civil process. To the full extent Grantor may do so, Grantor agrees that Grantor will not at any time insist upon, plead, claim or take the benefit or advantage of any law now or hereafter in force providing for any appraisement, valuation, stay, exemption, extension or redemption, or requiring foreclosure of this Deed of Trust before exercising any other remedy granted hereunder and Grantor, for Grantor and its successors and assigns, and for any and all persons ever claiming any interest in the Mortgaged Property, to the extent permitted by law, hereby waives and releases all rights of redemption, valuation, appraisement, stay of execution, notice of election to mature (except as expressly provided in the Loan Documents) or declare

EXHIBIT 10-25

due the whole of the secured indebtedness and marshalling in the event of exercise by Beneficiary of the foreclosure rights, power of sale, or other rights hereby created.

24.Remedies Not Exclusive. Beneficiary shall be entitled to enforce payment and performance of the Secured Obligations and to exercise all rights and powers under this Deed of Trust or under any of the other Loan Documents or other agreement or any laws now or hereafter in force, notwithstanding some or all of the Secured Obligations may now or hereafter be otherwise secured, whether by mortgage, security agreement, pledge, lien, assignment or otherwise. Neither the acceptance of this Deed of Trust nor its enforcement shall prejudice or in any manner affect Beneficiary’s rights to realize upon or enforce any other security now or hereafter held by Beneficiary, it being agreed that Beneficiary shall be entitled to enforce this Deed of Trust and any other security now or hereafter held by Beneficiary in such order and manner as Beneficiary may determine in its absolute discretion. No remedy herein conferred upon or reserved to Beneficiary is intended to be exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy given by any of the Loan Documents to Beneficiary or to which either may otherwise be entitled, may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by Beneficiary, as the case may be. In no event shall Beneficiary, in the exercise of the remedies provided in this Deed of Trust (including, without limitation, in connection with the assignment of Rents to Beneficiary, or the appointment of a receiver and the entry of such receiver on to all or any part of the Mortgaged Property), be deemed a “Beneficiary in possession,” and Beneficiary shall not in any way be made liable for any act, either of commission or omission, in connection with the exercise of such remedies.

25.Multiple Security. If (a) the Premises shall consist of one or more parcels, whether or not contiguous and whether or not located in the same county, or (b) in addition to this Deed of Trust, Beneficiary shall now or hereafter hold or be the beneficiary of one or more additional mortgages, liens, deeds of trust or other security (directly or indirectly) for the Secured Obligations upon other property in the State in which the Premises are located (whether or not such property is owned by Grantor or by others) or (c) both the circumstances described in clauses (a) and (b) shall be true, then to the fullest extent permitted by law, Beneficiary may, at its election, commence or consolidate in a single foreclosure action all foreclosure proceedings instituted in accordance with the terms and conditions of this Deed of Trust against all such collateral securing the Secured Obligations (including the Mortgaged Property), which action may be brought or consolidated in the courts of, or sale conducted in, any county in which any of such collateral is located. Grantor acknowledges that the right to maintain a consolidated foreclosure action is a specific inducement to Beneficiary to extend the indebtedness borrowed pursuant to or guaranteed by the Loan Documents, and Grantor expressly and irrevocably waives any objections to the commencement or consolidation of the foreclosure proceedings in a single action and any objections to the laying of venue or based on the grounds of forum non conveniens which it may now or hereafter have. Grantor further agrees that if Beneficiary shall be prosecuting one or more foreclosure or other proceedings against a portion of the Mortgaged Property or against any collateral other than the Mortgaged Property, which collateral directly or indirectly secures the Secured Obligations, or if Beneficiary shall have obtained a judgment of foreclosure and sale or similar judgment against such collateral, then, whether or not such proceedings are being maintained or judgments were obtained in or outside the State in which the Premises are located, Beneficiary may commence or continue any foreclosure proceedings and exercise its other remedies granted in this Deed of Trust against all or any part of the Mortgaged Property and Grantor waives any objections to the commencement or continuation of a foreclosure of this Deed of Trust or exercise of any other remedies hereunder based on such other proceedings or judgments, and waives any right to seek to dismiss, stay, remove, transfer or consolidate either any action under this Deed of Trust or such other proceedings on such basis. Neither the commencement nor continuation of proceedings to foreclose this Deed of Trust, nor the exercise of any other rights hereunder nor the recovery of any judgment by Beneficiary in any such proceedings or the occurrence of any sale in any such proceedings shall prejudice, limit or preclude Beneficiary’s right to commence or continue one or more foreclosure or other proceedings or obtain a judgment against any other collateral (either in or outside the State in which the Premises are located) which directly or indirectly secures the Secured Obligations, and Grantor expressly waives any objections to the commencement of, continuation of, or entry of a judgment in such other sales or proceedings or exercise of any remedies in such sales or proceedings based upon any action or judgment connected to this Deed of Trust, and Grantor also waives any right to seek to dismiss, stay, remove, transfer or consolidate either such other sales or proceedings or any sale or action under this Deed of Trust on such basis. It is expressly understood and agreed that to the fullest extent permitted by law, Beneficiary may, at its election, cause the sale of all collateral which is the subject of a single foreclosure action at either a single sale or at multiple sales conducted simultaneously and take such other measures as are appropriate in order to effect the agreement of the parties to dispose of and administer all collateral securing the Secured Obligations (directly or indirectly) in the most economical and least time-consuming manner.

26.Successors and Assigns. All covenants of Grantor contained in this Deed of Trust are imposed solely and exclusively for the benefit of Beneficiary, and its successors and assigns, and no other person or entity shall have standing to require compliance with such covenants or be deemed, under any circumstances, to be a beneficiary of such covenants, any or all of which may be freely waived in whole or in part by Beneficiary at any time if, in its sole discretion, such a waiver is deemed advisable. All such covenants of Grantor shall run with the land and bind Grantor, the successors and assigns of Grantor and all

EXHIBIT 10-25

subsequent owners, encumbrancers and tenants of the Mortgaged Property, and shall inure to the benefit of Beneficiary and its successors and assigns. If there shall be more than one Grantor, the obligations of the Grantors shall be joint and several.

27.No Waivers, etc. Any failure by Beneficiary to insist upon the strict performance by Grantor of any of the terms and provisions of this Deed of Trust shall not be deemed to be a waiver of any of the terms and provisions hereof, and Beneficiary, notwithstanding any such failure, shall have the right thereafter to insist upon the strict performance by Grantor of any and all of the terms and provisions of this Deed of Trust to be performed by Grantor. Beneficiary may release, regardless of consideration and without the necessity for any notice to or consent by the holder of any subordinate lien on the Mortgaged Property, any part of the security held for the Secured Obligations without, as to the remainder of the security, in any way impairing or affecting the lien of this Deed of Trust or the priority of such lien over any subordinate lien or mortgage.

28.Governing Law, etc. This Deed of Trust shall be governed by and construed and interpreted in accordance with the laws of the State in which the Mortgaged Property is located, except that Grantor expressly acknowledges that by their respective terms the other Loan Documents shall be governed and construed in accordance with the laws of the State of New York, and for purposes of consistency, Grantor agrees that in any in personam proceeding related to this Deed of Trust the rights of the parties to this Deed of Trust shall also be governed by and construed in accordance with the laws of the State of New York governing contracts made and to be performed in that State.

29.Certain Definitions. Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, words used in this Deed of Trust shall be used interchangeably in singular or plural form and the word “Grantor” shall mean “each Grantor or any subsequent owner or owners of the Mortgaged Property or any part thereof or interest therein,” the word “Beneficiary” shall mean “Beneficiary or any successor agent for the Lenders,” the word “person” shall include any individual, corporation, partnership, limited liability company, trust, unincorporated association, government, governmental authority, or other entity, and the words “Mortgaged Property” shall include any portion of the Mortgaged Property or interest therein. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice versa. The captions in this Deed of Trust are for convenience or reference only and in no way limit or amplify the provisions hereof.

30.Enforcement of Expenses; Indemnification. To the extent required to be paid or reimbursed by the Borrower under Section 9.5 of the Credit Agreement,

(a) Grantor agrees to pay or reimburse each Lender and the Beneficiary for all its costs and expenses incurred in enforcing or preserving any rights under this Deed of Trust and the other Loan Documents to which Grantor is a party, including, without limitation, the fees and disbursements of counsel (including the allocated fees and expenses of in-house counsel) to each Lender and of counsel to the Beneficiary.

(b) Grantor agrees to pay, and to save the Beneficiary and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Mortgaged Property or in connection with any of the transactions contemplated by this Deed of Trust.

(c) Grantor agrees to pay, and to save the Beneficiary and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Deed of Trust to the extent the Borrower would be required to do so pursuant to Section 9.5 of the Credit Agreement.

(d) The agreements in this Section 30 shall survive repayment of the Secured Obligations and all other amounts payable under the Credit Agreement and the other Loan Documents.

31.Last Dollars Secured; Priority. This Deed of Trust secures only a portion of the indebtedness owing or which may become owing by Grantor to the Secured Parties. The parties agree that any payments or repayments of such indebtedness shall be and be deemed to be applied first to the portion of the indebtedness that is not secured hereby, it being the parties’ intent that the portion of the indebtedness last remaining unpaid shall be secured hereby. If at any time this Deed of Trust shall secure less than all of the principal amount of the Secured Obligations, it is expressly agreed that any repayments of the principal amount of the Secured Obligations shall not reduce the amount of the lien of this Deed of Trust until the lien amount shall equal the principal amount of the Secured Obligations outstanding.

32.Release; Termination. (a) At such time as the Loans, the Reimbursement Obligations and the other Secured Obligations (other than Secured Obligations in respect of Specified Swap Agreements, Specified Cash Management Agreements

EXHIBIT 10-25

and contingent indemnification and reimbursement obligations for which no claim has been made) shall have been paid in full, and the Commitments have been terminated and no Letters of Credit shall be outstanding (other than Letters of Credit that have been cash collateralized), the Mortgaged Property shall be automatically released from the Liens created hereby, and this Deed of Trust and all obligations (other than those expressly stated to survive such termination) of the Beneficiary and Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Mortgaged Property shall revert to the Grantor. At the request and sole expense of Grantor following any such termination, the Beneficiary shall execute and deliver to Grantor or such documents as Grantor shall reasonably request to evidence such termination.

(b) If any of the Mortgaged Property shall be sold, transferred or otherwise disposed of by Grantor in a transaction permitted by the Credit Agreement, then the Beneficiary, at the request and sole expense of Grantor, shall execute and deliver to Grantor all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Mortgaged Property.

33. State Specific Provisions; Incorporation by Reference.

[Intentionally Left Blank]

EXHIBIT 10-25

This Deed of Trust has been duly executed by Grantor as of the date first set forth above and is intended to be effective as of such date.

_______________, a ______________

By: _____________________ Name: Elizabeth A. Allen Title: Secretary

EXHIBIT 10-25

ACKNOWLEDGEMENT

COMMONWEALTH OF VIRGINIA)

)

COUNTY OF FAIRFAX )

Before me, _____________________________, a Notary Public of said County and State, personally appeared Elizabeth A. Allen, with whom I am personally acquainted (or proved to me on the basis of satisfactory evidence), and who, upon oath, acknowledged himself/herself to be Secretary (or other officer authorized to execute the instrument) of _________________________, the within named bargainor, a ___________________, and that he/she as such Secretary, executed the foregoing instrument for the purposes therein contained, by signing the name of the company by herself as Secretary of ______________________.

Witness my hand and seal, at Office, this _____ day of September, 2015.

Notary Public

My Commission Expires:

EXHIBIT 10-25

Schedule A

Description of the Land

EXHIBIT 10-26

SCHEDULE OF MORTGAGES OR DEEDS OF TRUST GRANTED BY GANNETT SUBSIDIARIES

MORTGAGES

The following Schedule identifies the material details in which the applicable mortgage or deed of trust granted by a Gannett subsidiary to JPMorgan Chase Bank, N.A., as Administrative Agent, pursuant to the Credit Agreement, dated as of June 29, 2015, among Gannett Co., Inc., as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, PNC Bank, N.A. and U.S. Bank National Association, as Co-Syndication Agents, and the other lenders party thereto, differ from the Form of Mortgage or Form of Deed of Trust filed as an exhibit to this report:



PROPERTY ADDRESS	MORTGAGOR NAME	OWNERSHIP INTEREST	AMOUNT SECURED
525 W. Broadway, Louisville, Kentucky	The Courier-Journal, Inc.	Fee	$15,000,000
6200 Metropolitan Parkway, Sterling Heights, Michigan	Detroit Newspaper Partnership, L.P.	Fee	$14,000,000
8278 Georgetown Road, Indianapolis, Indiana	Gannett Satellite Information Network, LLC	Fee	$8,000,000
950 W. Basin Road, Newcastle, Delaware	Gannett Satellite Information Network, LLC	Fee	$7,500,000

DEEDS OF TRUST



PROPERTY ADDRESS	GRANTOR NAME	OWNERSHIP INTEREST	AMOUNT SECURED
200 East Van Buren Street, Phoenix, Arizona	Phoenix Newspapers, Inc.	Fee	$30,000,000
6885 Commercial Drive, Springfield, Virginia	Gannett Satellite Information Network, LLC	Fee	$23,000,000
1100 Broadway and others, Nashville, Tennessee	Gannett Satellite Information Network, LLC	Fee (as to 120 11^th Avenue North) and Leasehold (as to 1100 Broadway and others)	$12,000,000
22600 N. 19th Avenue, Deer Valley, Arizona	Phoenix Newspapers, Inc.	Fee	$8,700,000

EXHIBIT 31-1

CERTIFICATIONS


I,	Robert J. Dickey, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Gannett Co., Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2015

/s/ Robert J. Dickey

Robert J. Dickey

President and Chief Executive Officer

(principal executive officer)

EXHIBIT 31-2

CERTIFICATIONS


I,	Alison K. Engel, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Gannett Co., Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2015

/s/ Alison K. Engel

Alison K. Engel

Chief Financial Officer (principal financial officer)

EXHIBIT 32-1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Gannett Co., Inc. (“Gannett”) on Form 10-Q for the quarter ended September 27, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert J. Dickey, president and chief executive officer of Gannett, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


(1)	the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and


(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Gannett.

/s/ Robert J. Dickey

Robert J. Dickey

President and Chief Executive Officer

(principal executive officer)

November 6, 2015

EXHIBIT 32-2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Gannett Co., Inc. (“Gannett”) on Form 10-Q for the quarter ended September 27, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alison K. Engel, chief financial officer of Gannett, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


(1)	the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and


(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Gannett.

/s/ Alison K. Engel

Alison K. Engel

Chief Financial Officer (principal financial officer)

November 6, 2015

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