UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 10-Q

_______________________

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

For the quarterly period ended September 30, 2021

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

Commission file number 001-36097

___________________________

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

___________________________

Delaware			38-3910250
(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

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	GCI	The New York Stock Exchange
Preferred Stock Purchase Rights	N/A	The New York Stock Exchange

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☒
Non-Accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of November 2, 2021, 142,327,552 shares of the registrant's Common Stock were outstanding.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our current views regarding, among other things, our future growth, results of operations, performance, and business prospects and opportunities, and are not statements of historical fact. Words such as "anticipate(s)," "expect(s)," "intend(s)," "plan(s)," "target(s)," "project(s)," "believe(s)," "forecast," "will," "aim," "would," "seek(s)," "estimate(s)" and similar expressions are intended to identify such forward-looking statements.

Forward-looking statements are based on management’s current expectations and beliefs and are subject to a number of known and unknown risks, uncertainties, and other factors that could lead to actual results materially different from those described in the forward-looking statements. We can give no assurance our expectations will be attained. Our actual results, liquidity, and financial condition may differ from the anticipated results, liquidity, and financial condition indicated in these forward-looking statements. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause our actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others:

•General economic and market conditions;

•The competitive environment in which we operate;

•Risks and uncertainties associated with the ongoing COVID-19 pandemic;

•Economic conditions in the various regions of the United States, the United Kingdom, and other regions in which we operate our business;

•The shift within the publishing industry from traditional print media to digital forms of publication;

•Risks and uncertainties associated with our Digital Marketing Solutions segment, including its significant reliance on Google for media purchases, its international operations, and its ability to develop and gain market acceptance for new products or services;

•Declining print advertising revenue and circulation subscribers;

•Our ability to grow our digital marketing services initiatives, digital audience, and advertiser base;

•Our ability to grow our business organically;

•Variability in the exchange rate relative to the U.S. dollar of currencies in foreign jurisdictions in which we operate;

•The risk that we may not realize the anticipated benefits of our acquisitions;

•The availability and cost of capital for future investments;

•Our indebtedness may restrict our operations and/or require us to dedicate a portion of cash flow from operations to payments associated with our debt;

•Our current intention not to pay dividends and our ability to pay dividends consistent with prior practice or at all;

•Our ability to reduce costs and expenses;

•Our ability to remediate a material weakness in our internal control over financial reporting; and

•Our ability to recruit and retain key personnel, as well as any shortage of skilled or experienced employees, including journalists.

Additional risk factors that could cause actual results to differ materially from our expectations include, but are not limited to, the risks identified by us under the heading "Risk Factors" in this Quarterly Report on Form 10-Q, under the heading "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the Securities and Exchange Commission (the "SEC") on February 26, 2021, and the statements made in subsequent filings. Such forward-looking statements speak only as of the date they are made. Except to the extent required by law, we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or change in events, conditions, or circumstances on which any statement is based.

INDEX TO GANNETT CO., INC.

Q3 2021 FORM 10-Q

Item No.		Page
	Part I. Financial Information
1	Financial Statements	2
2	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
3	Quantitative and Qualitative Disclosures About Market Risk	48
4	Controls and Procedures	48
	Part II. Other Information
1	Legal Proceedings	49
1A	Risk Factors	49
2	Unregistered Sales of Equity Securities and Use of Proceeds	52
3	Defaults Upon Senior Securities	52
4	Mine Safety Disclosures	52
5	Other Information	52
6	Exhibits	52
	Signatures	54

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GANNETT CO., INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

In thousands, except share data	September 30, 2021		December 31, 2020
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	141,302	$	170,725
Accounts receivable, net of allowance for doubtful accounts of $16,411 and $20,843 as of September 30, 2021 and December 31, 2020, respectively	301,016		314,305
Inventories	33,492		35,075
Prepaid expenses and other current assets	111,689		116,581
Total current assets	587,499		636,686
Property, plant and equipment, net of accumulated depreciation of $363,200 and $362,029 as of September 30, 2021 and December 31, 2020, respectively	461,923		590,272
Operating lease assets	279,353		289,504
Goodwill	533,797		534,088
Intangible assets, net	741,591		824,650
Deferred tax assets	63,136		90,240
Other assets	242,704		143,474
Total assets	$	2,910,003	$	3,108,914
Liabilities and equity
Current liabilities:
Accounts payable and accrued liabilities	$	357,324	$	378,246
Deferred revenue	196,259		186,007
Current portion of long-term debt	104,948		128,445
Other current liabilities	54,753		48,602
Total current liabilities	713,284		741,300
Long-term debt	741,636		890,323
Convertible debt	399,875		581,405
Deferred tax liabilities	21,419		6,855
Pension and other postretirement benefit obligations	88,149		99,765
Long-term operating lease liabilities	261,429		274,460
Other long-term liabilities	141,577		151,847
Total noncurrent liabilities	1,654,085		2,004,655
Total liabilities	2,367,369		2,745,955
Redeemable noncontrolling interests	(2,209)		(1,150)
Commitments and contingent liabilities (See Note 12)
Equity
Preferred stock, $0.01 par value, 300,000 shares authorized, of which 150,000 shares are designated as Series A Junior Participating Preferred Stock, none of which were issued and outstanding at September 30, 2021 and December 31, 2020	—		—
Common stock of $0.01 par value per share, 2,000,000,000 shares authorized, 144,653,850 shares issued and 142,519,768 shares outstanding at September 30, 2021; 139,494,741 shares issued and 138,102,993 shares outstanding at December 31, 2020	1,446		1,395
Treasury stock at cost, 2,134,082 shares and 1,391,748 shares at September 30, 2021 and December 31, 2020, respectively	(6,940)		(4,903)
Additional paid-in capital	1,399,693		1,103,881
Accumulated deficit	(898,951)		(786,437)
Accumulated other comprehensive income	49,595		50,173
Total equity	544,843		364,109
Total liabilities and equity	$	2,910,003	$	3,108,914

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

2

GANNETT CO., INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Three months ended September 30,				Nine months ended September 30,
In thousands, except per share amounts	2021		2020		2021		2020
Advertising and marketing services	$	412,020	$	405,227	$	1,220,487	$	1,249,156
Circulation	306,702		336,158		942,398		1,053,528
Other	81,463		73,154		218,659		227,539
Total operating revenues	800,185		814,539		2,381,544		2,530,223
Operating costs	480,289		492,342		1,431,259		1,535,539
Selling, general and administrative expenses	225,596		241,652		652,184		767,275
Depreciation and amortization	48,107		61,355		154,452		205,706
Integration and reorganization costs	13,619		13,417		35,467		73,978
Asset impairments	2,301		1,585		3,134		8,444
Goodwill and intangible impairments	—		—		—		393,446
(Gain) loss on sale or disposal of assets, net	(833)		795		9,206		1,540
Other operating expenses	4		1,913		11,354		10,261
Total operating expenses	769,083		813,059		2,297,056		2,996,189
Operating income (loss)	31,102		1,480		84,488		(465,966)
Interest expense	34,603		58,063		109,370		173,890
Loss on early extinguishment of debt	3,761		476		25,996		1,650
Non-operating pension income	(23,860)		(18,334)		(71,644)		(54,433)
Loss on convertible notes derivative	—		—		126,600		—
Other income, net	(931)		(10,375)		(3,954)		(14,988)
Non-operating expense	13,573		29,830		186,368		106,119
Income (loss) before income taxes	17,529		(28,350)		(101,880)		(572,085)
Provision (benefit) for income taxes	2,984		3,098		11,567		(22,200)
Net income (loss)	14,545		(31,448)		(113,447)		(549,885)
Net loss attributable to redeemable noncontrolling interests	(142)		(188)		(933)		(1,580)
Net income (loss) attributable to Gannett	$	14,687	$	(31,260)	$	(112,514)	$	(548,305)
Income (loss) per share attributable to Gannett - basic	$	0.11	$	(0.24)	$	(0.84)	$	(4.17)
Income (loss) per share attributable to Gannett - diluted	$	0.09	$	(0.24)	$	(0.84)	$	(4.17)
Other comprehensive income (loss):
Foreign currency translation adjustments	$	(5,487)	$	7,677	$	(700)	$	(8,908)
Pension and other postretirement benefit items:
Net actuarial loss	—		—		(300)		(8,078)
Amortization of net actuarial loss (gain)	25		(11)		40		(36)
Other	1,051		(714)		205		347
Total pension and other postretirement benefit items	1,076		(725)		(55)		(7,767)
Other comprehensive income (loss) before tax	(4,411)		6,952		(755)		(16,675)
Income tax expense (benefit) related to components of other comprehensive income (loss)	7		1		(177)		(2,062)
Other comprehensive income (loss), net of tax	(4,418)		6,951		(578)		(14,613)
Comprehensive income (loss)	10,127		(24,497)		(114,025)		(564,498)
Comprehensive loss attributable to redeemable noncontrolling interests	(142)		(188)		(933)		(1,580)
Comprehensive income (loss) attributable to Gannett	$	10,269	$	(24,309)	$	(113,092)	$	(562,918)

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

3

GANNETT CO., INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months ended September 30,
In thousands	2021		2020
Operating activities
Net loss	$	(113,447)	$	(549,885)
Adjustments to reconcile net loss to operating cash flows:
Depreciation and amortization	154,452		205,706
Share-based compensation expense	13,804		22,812
Non-cash interest expense	18,719		17,813
Loss on sale or disposal of assets, net	9,206		1,540
Loss on convertible notes derivative	126,600		—
Loss on early extinguishment of debt	25,996		1,650
Goodwill and intangible impairments	—		393,446
Asset impairments	3,134		8,444
Pension and other postretirement benefit obligations	(114,663)		(77,274)
Change in other assets and liabilities, net	9,546		50,028
Net cash provided by operating activities	133,347		74,280
Investing activities
Purchase of property, plant and equipment	(27,265)		(28,944)
Proceeds from sale of real estate and other assets	67,434		26,186
Change in other investing activities	(933)		779
Net cash provided by (used for) investing activities	39,236		(1,979)
Financing activities
Payments of debt issuance costs	(33,921)		—
Borrowings under term loans	1,045,000		—
Repayments under term loans	(1,220,751)		(27,619)
Deferred payments for acquisitions	—		(7,544)
Payments for employee taxes withheld from stock awards	(2,034)		(1,960)
Changes in other financing activities	(578)		(348)
Net cash used for financing activities	(212,284)		(37,471)
Effect of currency exchange rate change on cash	389		439
(Decrease) increase in cash, cash equivalents and restricted cash	(39,312)		35,269
Balance of cash, cash equivalents and restricted cash at beginning of period	206,726		188,664
Balance of cash, cash equivalents and restricted cash at end of period	$	167,414	$	223,933

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

4

GANNETT CO., INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

	Three months ended September 30, 2021
	Common stock			Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated deficit		Treasury stock
In thousands, except share data	Shares	Amount								Shares	Amount		Total
Balance at June 30, 2021	144,638,938	$	1,446	$	1,395,191	$	54,013	$	(913,638)	2,014,664	$	(6,935)	$	530,077
Net income attributable to Gannett	—	—		—		—		14,687		—	—		14,687
Restricted stock awards settled, net of withholdings	2,857	—		(6)		—		—		—	—		(6)
Restricted share grants	5,226	—		—		—		—		—	—		—
Other comprehensive loss, net of income tax expense     of $7	—	—		—		(4,418)				—	—		(4,418)
Share-based compensation expense	—	—		4,602		—		—		—	—		4,602
Issuance of common stock	6,829	—		38		—		—		—	—		38
Treasury stock	—	—		—		—		—		118,675	(4)		(4)
Restricted share forfeiture	—	—		—		—		—		743	(1)		(1)
Other activity	—	—		(132)		—		—		—	—		(132)
Balance at September 30, 2021	144,653,850	$	1,446	$	1,399,693	$	49,595	$	(898,951)	2,134,082	$	(6,940)	$	544,843

	Three months ended September 30, 2020
	Common stock			Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated deficit		Treasury stock
In thousands, except share data	Shares	Amount								Shares	Amount		Total
Balance at June 30, 2020	136,885,320	$	1,369	$	1,101,899	$	(13,362)	$	(633,003)	770,973	$	(4,818)	$	452,085
Net loss attributable to Gannett	—	—		—		—		(31,260)		—	—		(31,260)
Restricted stock awards settled, net of withholdings	564,406	6		(866)		—		—		—	—		(860)
Other comprehensive income, net of income tax expense of $1	—	—		—		6,951		—		—	—		6,951
Share-based compensation expense	—	—		3,844		—		—		—	—		3,844
Issuance of common stock	28,970	—		(961)		—		—		—	—		(961)
Remeasurement of redeemable noncontrolling interests	—	—		(3,878)		—		—		—	—		(3,878)
Treasury stock	—	—		—		—		—		4,837	(19)		(19)
Restricted share forfeiture	—	—		—		—		—		397,166	(4)		(4)
Other activity	—	—		231		—		—		—	—		231
Balance at September 30, 2020	137,478,696	$	1,375	$	1,100,269	$	(6,411)	$	(664,263)	1,172,976	$	(4,841)	$	426,129

5

GANNETT CO., INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY [CONTINUED]

(Unaudited)

	Nine months ended September 30, 2021
	Common stock			Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated deficit		Treasury stock
In thousands, except share data	Shares	Amount								Shares	Amount		Total
Balance as of December 31, 2020	139,494,741	$	1,395	$	1,103,881	$	50,173	$	(786,437)	1,391,748	$	(4,903)	$	364,109
Net loss attributable to Gannett	—	—		—		—		(112,514)		—	—		(112,514)
Restricted stock awards settled, net of withholdings	1,064,697	10		(1,912)		—		—		—	—		(1,902)
Restricted share grants	3,883,062	39		(39)		—		—		—	—		—
Equity component of the 2027 Notes	—	—		283,718		—		—		—	—		283,718
Other comprehensive loss, net of income tax benefit of $177	—	—		—		(578)		—		—	—		(578)
Share-based compensation expense	—	—		13,804		—		—		—	—		13,804
Issuance of common stock	211,350	2		99		—		—		—	—		101
Remeasurement of redeemable noncontrolling interests	—	—		126		—		—		—	—		126
Treasury stock	—	—		—		—		—		511,828	(2,034)		(2,034)
Restricted share forfeiture	—	—		—		—		—		230,506	(3)		(3)
Other activity	—	—		16		—		—		—	—		16
Balance at September 30, 2021	144,653,850	$	1,446	$	1,399,693	$	49,595	$	(898,951)	2,134,082	$	(6,940)	$	544,843

	Nine months ended September 30, 2020
	Common stock			Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated deficit		Treasury stock
In thousands, except share data	Shares	Amount								Shares	Amount		Total
Balance as of December 31, 2019	129,386,258	$	1,294	$	1,090,694	$	8,202	$	(115,958)	394,714	$	(2,876)	$	981,356
Net loss attributable to Gannett	—	—		—		—		(548,305)		—	—		(548,305)
Restricted stock awards settled, net of withholdings	3,072,991	31		(10,819)		—		—		—	—		(10,788)
Restricted share grants	4,346,313	44		(44)		—		—		—	—		—
Other comprehensive loss, net of income tax benefit of $2,062	—	—		—		(14,613)		—		—	—		(14,613)
Share-based compensation expense	—	—		22,812		—		—		—	—		22,812
Issuance of common stock	673,134	6		1,609		—		—		—	—		1,615
Remeasurement of redeemable noncontrolling interests	—	—		(3,878)		—		—		—	—		(3,878)
Treasury stock	—	—		—		—		—		322,524	(1,960)		(1,960)
Restricted share forfeiture	—	—		—		—		—		455,738	(5)		(5)
Other activity	—	—		(105)		—		—		—	—		(105)
Balance at September 30, 2020	137,478,696	$	1,375	$	1,100,269	$	(6,411)	$	(664,263)	1,172,976	$	(4,841)	$	426,129

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

6

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — Description of Business and basis of presentation

Description of Business

Gannett Co., Inc. ("Gannett", "we", "us", "our", or the "Company") is a subscription-led and digitally-focused media and marketing solutions company committed to empowering communities to thrive. We aim to be the premier source for clarity, connections and solutions within our communities. Our strategy is focused on driving audience growth and engagement by delivering deeper content experiences to our consumers, while offering the products and marketing expertise our advertisers desire. The execution of this strategy is expected to allow the Company to continue its evolution from a more traditional print media business to a digitally-focused content platform.

Our current portfolio of media assets includes USA TODAY, local media organizations in 46 states in the U.S., and Newsquest, a wholly-owned subsidiary operating in the United Kingdom (the "U.K.") with more than 120 local media brands. Gannett also owns the digital marketing services companies ReachLocal, Inc. ("ReachLocal"), UpCurve, Inc. ("UpCurve"), and WordStream, Inc. ("WordStream"), which are marketed under the LOCALiQ brand, and runs the largest media-owned events business in the U.S., USA TODAY NETWORK Ventures.

Through USA TODAY, our local property network, and Newsquest, Gannett delivers high-quality, trusted content where and when consumers want to engage on virtually any device or platform. Additionally, the Company has strong relationships with thousands of local and national businesses in both our U.S. and U.K. markets due to our large local and national sales forces and a robust advertising and marketing solutions product suite. The Company reports in two segments: Publishing and Digital Marketing Solutions ("DMS"). A full description of our segments is included in Note 13 — Segment reporting in the notes to the condensed consolidated financial statements.

Impacts of the COVID-19 pandemic

As a result of the COVID-19 pandemic, we experienced a significant decline in Advertising and marketing services revenues, which accelerated the secular declines that we continue to experience. In addition, we continue to experience constraints on the sales of single copy newspapers, largely tied to business travel and in-person events. While we have seen operating trends improve since the second quarter of 2020, which represents the quarter that was most significantly impacted by the pandemic, we expect that the COVID-19 pandemic will continue to have a negative impact on our business and results of operations in the near-term, including lower revenues associated with events and lower sales of single copy newspapers, largely as a result of reduced business travel. If the COVID-19 pandemic were to revert to conditions that existed during 2020, including measures to help mitigate and control the spread of the virus, we would expect to experience further negative impacts in Advertising and marketing services and Circulation revenues.

We have implemented, and continue to implement, measures to reduce costs and preserve cash flow. These measures include, evaluating and applying for all governmental relief programs for which we are eligible, including the Paycheck Protection Program ("PPP"), suspending our quarterly dividend, and debt refinancing, as well as reducing discretionary spending. In addition, we are continuing with our previously-disclosed plan to monetize non-core assets.

In connection with the CARES Act, the Company received PPP funding in support of certain of our locations that were meaningfully affected by the COVID-19 pandemic totaling $16.4 million, which was included in Operating activities in the condensed consolidated statements of cash flows for the nine months ended September 30, 2021. As permitted under the CARES Act, during the third quarter of 2021, the Company received forgiveness of such loans totaling $15.1 million, which was recognized in earnings in the condensed consolidated statements of operations and comprehensive income (loss) as an offset to Operating costs of $11.1 million and Selling, general, and administrative expenses of $4.0 million. As of September 30, 2021, the remaining PPP loans of $1.3 million were included in Other long-term liabilities in the condensed consolidated balance sheets. Management has applied for forgiveness of the remaining PPP loans in accordance with applicable guidelines. Interest expense related to PPP funding was immaterial for the three and nine months ended September 30, 2021.

Basis of presentation

Our condensed consolidated financial statements are unaudited; however, in the opinion of management, they contain all of the adjustments (consisting of those of a normal, recurring nature) considered necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles

7

("U.S. GAAP") applicable to interim periods. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company consolidates entities that it controls due to ownership of a majority voting interest. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020.

Use of estimates

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and footnotes thereto. Actual results could differ materially from those estimates.

Significant estimates inherent in the preparation of the condensed consolidated financial statements include pension and postretirement benefit obligation assumptions, income taxes, goodwill and intangible asset impairment analysis, valuation of property, plant and equipment and intangible assets and the mark to market of the conversion feature associated with the convertible debt.

Recent accounting pronouncements adopted

Simplifying the Accounting for Income Taxes

In December 2019, the Financial Accounting Standards Board (the "FASB") issued new guidance that simplifies the accounting for income taxes. The guidance amends the rules for recognizing deferred taxes for investments, performing intraperiod tax allocations and calculating income taxes in interim periods. It also reduces complexity in certain areas, including accounting for transactions that result in a step-up in the tax basis of goodwill and allocating taxes to members of a consolidated group. This guidance is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. Adopting this guidance allowed the Company to record a tax benefit for the first quarter of 2021 because year-to-date losses on interim periods are no longer limited to losses annually forecasted, but did not have a material impact on the Company's condensed consolidated financial statements in subsequent quarters.

Recent accounting pronouncements not yet adopted

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

In August 2020, the FASB issued new guidance ("ASU 2020-06") that simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. In addition to eliminating certain accounting models, the guidance amends the disclosures for convertible instruments and earnings-per-share guidance. It also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. This guidance is effective for fiscal years beginning after December 15, 2023, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company does not expect the adoption of this guidance to have a material impact on the condensed consolidated financial statements.

NOTE 2 — Revenues

Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The Company’s condensed consolidated statements of operations and comprehensive income (loss) present revenues disaggregated by revenue type. Sales taxes and other usage-based taxes are excluded from revenues. The following table presents our revenues disaggregated by source:

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	Three months ended September 30,				Nine months ended September 30,
In thousands	2021		2020		2021		2020
Print advertising	$	190,044	$	208,047	$	584,165	$	664,047
Digital advertising and marketing services	221,976		197,180		636,322		585,109
Total advertising and marketing services	412,020		405,227		1,220,487		1,249,156
Circulation	306,702		336,158		942,398		1,053,528
Other	81,463		73,154		218,659		227,539
Total revenues	$	800,185	$	814,539	$	2,381,544	$	2,530,223

Revenues generated from international locations were approximately 8% for both the three and nine months ended September 30, 2021 and approximately 7% for both the three and nine months ended September 30, 2020.

Deferred revenues

The Company records deferred revenues when cash payments are received in advance of the Company’s performance obligation. The Company's primary source of deferred revenues is from circulation subscriptions paid in advance of the service provided, which represents future delivery of publications (the performance obligation) to subscription customers. The Company expects to recognize the revenue related to unsatisfied performance obligations over the next one to twelve months in accordance with the terms of the subscriptions.

The Company's payment terms vary by the type and location of the customer and the products or services offered. The period between invoicing and when payment is due is not significant. For certain products or services and customer types, the Company requires payment before the products or services are delivered to the customer. The majority of our subscription customers are billed and pay on monthly terms.

The following table presents changes in the deferred revenues balance by type of revenues:

	Nine months ended September 30, 2021						Nine months ended September 30, 2020
In thousands	Advertising, Marketing Services, and Other		Circulation		Total		Advertising, Marketing Services, and Other		Circulation		Total
Beginning balance	$	51,686	$	134,321	$	186,007	$	67,543	$	151,280	$	218,823
Cash receipts	226,214		738,366		964,580		215,050		878,856		1,093,906
Revenue recognized	(206,203)		(748,125)		(954,328)		(221,052)		(884,080)		(1,105,132)
Ending balance	$	71,697	$	124,562	$	196,259	$	61,541	$	146,056	$	207,597

NOTE 3 — Leases

We lease certain real estate, vehicles, and equipment. Our leases have remaining lease terms of one to fifteen years, some of which may include options to extend the leases, and some of which may include options to terminate the leases. The exercise of lease renewal options is at our sole discretion. The depreciable lives of assets and leasehold improvements are limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise.

As of September 30, 2021, our condensed consolidated balance sheets included $279.4 million of operating lease right-to-use assets, $48.3 million of short-term operating lease liabilities included in Other current liabilities, and $261.4 million of long-term operating lease liabilities.

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The components of lease expense are as follows:

	Three months ended September 30,				Nine months ended September 30,
In thousands	2021		2020		2021		2020
Operating lease cost (a)	$	19,977	$	20,924	$	60,626	$	62,429
Short-term lease cost (b)	133		828		698		5,315
Variable lease cost	2,963		2,897		8,685		9,713
Net lease cost	$	23,073	$	24,649	$	70,009	$	77,457

(a)Includes sublease income of $1.7 million and $0.9 million for the three months ended September 30, 2021 and 2020, respectively, and $4.7 million and $2.9 million for the nine months ended September 30, 2021 and 2020, respectively.

(b)Excluding expenses relating to leases with a lease term of 12 months or less.

Future minimum lease payments under non-cancellable leases are as follows:

In thousands	Year ended December 31, (a)
2021 (excluding the nine months ended September 30, 2021)	$	18,625
2022	81,364
2023	68,607
2024	60,380
2025	51,315
Thereafter	213,647
Total future minimum lease payments	493,938
Less: Imputed interest	(184,245)
Total	$