EX-99.1 2 a2224986zex-99_1.htm EX-99.1

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Exhibit 99.1

LOGO

June [·], 2015

Dear Gannett Co., Inc. Stockholder:

              We previously announced plans to separate our publishing business from our broadcasting and digital businesses. The separation will occur by means of a spin-off of a newly formed company named Gannett SpinCo, Inc. ("SpinCo"), which will own the publishing business. Gannett Co., Inc. ("Parent"), the existing publicly traded company in which you currently own common stock, will continue to own and operate the broadcasting and digital businesses. The separation will create two businesses with impressive scale and financial strength that will be among the largest and strongest in their peer groups. As two distinct publicly traded companies, Parent and SpinCo will be better positioned, both strategically and operationally, to capitalize on significant growth opportunities by focusing resources on their own respective businesses and strategic priorities. Upon completion of the spin-off, SpinCo will change its corporate name to "Gannett Co., Inc." and Parent will change its corporate name to TEGNA Inc.

              Both of these companies will offer industry-leading products and services. Parent will continue to be a leader in the broadcasting and digital industries. With a portfolio of 46 owned or serviced television stations covering more than 35 million households, it is the largest independent owner of "Big Four" affiliated stations in the top 25 markets. Parent also owns several robust, leading-edge digital businesses led by Cars.com and its majority stake in CareerBuilder.com. Also part of this powerful digital portfolio is G/O Digital, which helps businesses grow by delivering digital marketing solutions that enable companies to better connect with consumers locally and drive results. SpinCo will continue to be an international publishing leader. SpinCo will own several innovative, multi-platform publishing operations and their affiliated digital and mobile products. As a result of the recent acquisition of 11 community newspapers in three states, SpinCo owns 92 trusted local U.S. daily media organizations and Newsquest, a leading regional community news provider in the U.K., with 18 daily paid-for publications and more than 125 weekly publications, magazines and trade publications. SpinCo will also own USA TODAY, a nationally recognized news and information company, which was ranked first in combined print and digital circulation according to the Alliance for Audited Media's September 2014 Publisher's Statement.

              The separation will provide current Parent stockholders with equity ownership in both Parent and SpinCo. We believe both companies will be well positioned for future success and have greater freedom to create value. We expect that the separation will be tax-free to Parent stockholders.

              The separation will be effected by means of a pro rata distribution of 98.5% of the outstanding shares of SpinCo common stock to holders of Parent common stock. Following the distribution, Parent will own shares of SpinCo representing 1.5% of the outstanding shares of common stock, and SpinCo will be a separate public company. Each Parent stockholder will receive one share of SpinCo common stock for every two shares of Parent common stock held as of the close of business on June 22, 2015, the record date for the distribution. No vote of Parent stockholders is required for distribution. You do not need to take any action to receive the shares of SpinCo common stock to which you are entitled as a Parent stockholder, and you will not be required to make any payments or to surrender or exchange your Parent common stock.

              SpinCo intends to apply to have its common stock authorized for listing on the New York Stock Exchange under the symbol "GCI," the same symbol currently used by Parent. Following the distribution, Parent will trade on the New York Stock Exchange under the symbol "TGNA."


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              I encourage you to read the attached information statement, which is being provided to all Parent stockholders who held shares on the record date for the distribution. The information statement describes the separation in detail and contains important business and financial information about SpinCo.

              We have spent the last few years driving a significantly value-enhancing transformation at Gannett, and we believe now is the optimal time to separate these businesses to provide for even greater performance and shareholder value creation in the future. We expect the separation will provide valuable opportunities to both companies, our stockholders, our employees, and all of the communities that enjoy Gannett and TEGNA content and services. We thank you for your continuing support.

    Sincerely,

 

 

Gracia C. Martore
President and Chief Executive Officer
Gannett Co., Inc.

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LOGO

June [·], 2015

Dear Future Gannett SpinCo, Inc. Stockholder:

              I am pleased to welcome you as a future stockholder of Gannett SpinCo, Inc. ("SpinCo"), whose common stock we intend to list on the New York Stock Exchange under the symbol "GCI." Although we will be newly independent, we have long been a leading publishing company at the forefront of redefining the future of media. With the largest network of local publications in the U.S. and a highly recognizable national publication, we have unparalleled knowledge and expertise in the publishing business, and have garnered the trust of the communities that we serve. We will continue to focus on innovative approaches to delivering content, superior reporting, customer loyalty and client service. Even as the credibility and authority of our brands keep our subscribers engaged and deliver solutions for our advertising partners, we continue to stay fresh and develop new products, attracting new audiences and more advertising customers in need of our compelling marketing solutions.

              As a result of the recent acquisition of 11 community newspapers in three states, our business includes 92 local U.S. media operations, their engaging affiliated digital platforms and marketing services, as well as Newsquest, a leading regional community content provider in the U.K. It also includes USA TODAY, a nationally recognized multi-platform news and information organization that ranks first in combined print and digital circulation in the U.S., according to the Alliance for Audited Media's September 2014 Publisher's Statement. This powerful combination of deep local roots and a renowned national brand enables us to offer our readers a wide array of content across multiple platforms, which, in turn, makes us an attractive provider of advertising and marketing solutions. In 2014, we generated $3.2 billion in revenues, $361 million in Adjusted operating income and $472 million in Adjusted EBITDA.

              As explained in the attached information statement, we intend to drive growth opportunities by enhancing our position as a trusted provider of local news and information through expanded digital offerings and by leveraging our expertise and full product portfolio to provide integrated marketing solutions to advertisers. We will continue to capitalize on our national brand equity to increase the integration of local and national content.

              With its digital revenue innovations and commitment to financial discipline, SpinCo will be uniquely positioned to be a successful consolidator of local market publishing operations in the future and invest in products and services that will drive growth. We will maintain our focus on operational excellence and maximizing cash flow. We believe that our award-winning journalists, technologically advanced delivery of local and national content, long-term relationships in local communities, and demonstrated financial resilience will enable us to meet these goals.

              Our stockholder value proposition is simple: provide superior returns to SpinCo stockholders by maintaining our leadership position in the publishing business, investing in the growth of our company and generating strong cash flow.

              I invite you to learn more about SpinCo and our strategic initiatives by reading the attached information statement. I thank you in advance for your support as a future stockholder of SpinCo.

    Sincerely,

 

 

Robert J. Dickey
President and Chief Executive Officer
Gannett SpinCo, Inc.

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Information contained herein is subject to completion or amendment. A Registration Statement on Form 10 relating to these securities has been filed with the U.S. Securities and Exchange Commission under the U.S. Securities Exchange Act of 1934, as amended.

PRELIMINARY AND SUBJECT TO COMPLETION, DATED JUNE 12, 2015

INFORMATION STATEMENT
Gannett SpinCo, Inc.

              This information statement is being furnished in connection with the distribution by Gannett Co., Inc. ("Parent") to its stockholders of 98.5% of the outstanding shares of common stock of Gannett SpinCo, Inc., a Delaware corporation ("SpinCo"), currently a wholly owned subsidiary of Parent that will hold directly or indirectly the assets and liabilities associated with Parent's publishing business. To implement the distribution, Parent will distribute 98.5% of the shares of SpinCo common stock on a pro rata basis to Parent stockholders in a manner that is intended to be tax-free for U.S. federal income tax purposes. Following the distribution, Parent will own shares of SpinCo representing 1.5% of the outstanding shares of common stock, and SpinCo will be a separate public company.

              For every two shares of Parent common stock held of record by you as of the close of business on June 22, 2015, the record date for the distribution, you will receive one share of SpinCo common stock. You will receive cash in lieu of any fractional shares of SpinCo common stock that you would have received after application of the above ratio. As discussed under "The Separation and Distribution—Trading Between the Record Date and Distribution Date," if you sell your shares of Parent common stock in the "regular-way" market after the record date and before the distribution, you also will be selling your right to receive shares of SpinCo common stock in the distribution. SpinCo expects the shares of SpinCo common stock to be distributed by Parent to you at 12:01 a.m., Eastern Time, on June 29, 2015. SpinCo refers to the date of the distribution of the shares of SpinCo common stock as the "distribution date."

              No vote of Parent stockholders is required for the distribution. Therefore, you are not being asked for a proxy, and you are requested not to send Parent a proxy, in connection with the distribution. You do not need to pay any consideration or exchange or surrender your existing shares of Parent common stock or take any other action to receive your shares of SpinCo common stock.

              There is no current trading market for SpinCo common stock, although SpinCo expects that a limited market, commonly known as a "when-issued" trading market, will develop on or about the record date for the distribution, and SpinCo expects "regular-way" trading of SpinCo common stock to begin on the first trading day following the completion of the distribution. SpinCo intends to apply to have its common stock authorized for listing on the New York Stock Exchange under the symbol "GCI," the same symbol currently used by Parent. Following the spin-off, Parent will trade on the New York Stock Exchange under the symbol "TGNA."

              In reviewing this information statement, you should carefully consider the matters described under the caption "Risk Factors" beginning on page 22.

              Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

              This information statement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

The date of this information statement is June [·], 2015.

              This information statement was first made available to Parent stockholders on or about June [·], 2015.


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  Page

Questions and Answers About the Separation and Distribution

  2

Information Statement Summary

  10

Risk Factors

  22

Cautionary Statement Concerning Forward-Looking Statements

  36

The Separation and Distribution

  38

Dividend Policy

  46

Capitalization

  47

Selected Historical Combined Financial Data of SpinCo

  48

Unaudited Pro Forma Combined Financial Statements

  49

Business

  57

Management's Discussion and Analysis of Financial Condition and Results of Operations

  74

Management

  101

Directors

  103

Executive Compensation

  109

Director Compensation

  153

Certain Relationships and Related Person Transactions

  156

Material U.S. Federal Income Tax Consequences

  163

Description of Material Indebtedness

  166

Security Ownership of Certain Beneficial Owners and Management

  167

Description of SpinCo's Capital Stock

  169

Where You Can Find More Information

  174

Index to Financial Statements

  F-1

Presentation of Information

              Except as otherwise indicated or unless the context otherwise requires, the information included in this information statement about SpinCo assumes the completion of all of the transactions referred to in this information statement in connection with the separation and distribution. Unless the context otherwise requires, references in this information statement to "SpinCo" refer to Gannett SpinCo, Inc., a Delaware corporation, and its combined subsidiaries. References in this information statement to "Parent" refer to Gannett Co., Inc., a Delaware corporation, and its consolidated subsidiaries (other than, after the distribution, SpinCo and its consolidated subsidiaries), unless the context otherwise requires. References to SpinCo's historical business and operations refer to the business and operations of Parent's publishing business that will be transferred to SpinCo in connection with the separation and distribution. In connection with the distribution, Gannett Co., Inc., as Parent, will be renamed "TEGNA Inc.," and Gannett SpinCo, Inc., as SpinCo, will change its name to "Gannett Co., Inc." Throughout this information statement, for purposes of simplicity, Gannett Co., Inc. prior to the distribution and TEGNA Inc. following the distribution are referred to as "Parent" and Gannett SpinCo, Inc. prior to the distribution and Gannett Co., Inc. following the distribution are referred to as "SpinCo." References in this information statement to the "separation" refer to the separation of the publishing business from Parent's other businesses and the creation, as a result of the distribution, of an independent, publicly traded company, SpinCo, to hold the assets and liabilities associated with the publishing business after the distribution. References in this information statement to the "distribution" refer to the distribution of 98.5% of SpinCo common stock to Parent's stockholders on a pro rata basis.

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QUESTIONS AND ANSWERS ABOUT THE SEPARATION AND DISTRIBUTION

What is SpinCo and why is Parent separating SpinCo's business and distributing SpinCo stock?   SpinCo, which is currently a wholly owned subsidiary of Parent, was formed to own and operate Parent's publishing business and related digital platforms. The separation of SpinCo from Parent and the distribution of SpinCo common stock are intended to provide you with equity ownership in two separate publicly traded companies that will be able to focus exclusively on each of their respective businesses. Parent and SpinCo expect that the separation will result in enhanced long-term performance of each business for the reasons discussed in the section entitled "The Separation and Distribution—Reasons for the Separation."

 

 

In connection with the distribution, Gannett Co., Inc., as Parent, will be renamed "TEGNA Inc.," and Gannett SpinCo, Inc., as SpinCo, will change its name to "Gannett Co., Inc." Throughout this information statement, for purposes of simplicity, the current Gannett Co., Inc. prior to the distribution and TEGNA Inc. following the distribution are referred to as "Parent," and Gannett SpinCo, Inc. prior to the distribution and Gannett Co., Inc. following the distribution are referred to as "SpinCo."

Why am I receiving this document?

 

Parent is delivering this document to you because you are a holder of Parent common stock. If you are a holder of Parent common stock as of the close of business on June 22, 2015, the record date of the distribution, you will be entitled to receive one share of SpinCo common stock for every two shares of Parent common stock that you held at the close of business on such date. This document will help you understand how the separation and distribution will affect your post-separation ownership in Parent and SpinCo, respectively.

How will the separation of SpinCo from Parent work?

 

To accomplish the separation, Parent will distribute 98.5% of the outstanding shares of SpinCo common stock to Parent stockholders on a pro rata basis in a distribution intended to be tax-free for U.S. federal income tax purposes.

 

 

As a result of the distribution, SpinCo will become an independent public company. Parent will continue to hold a 1.5% stake in SpinCo for a period of time following the distribution to allow SpinCo to enter into a modified affiliation agreement with CareerBuilder, LLC. See "Risk Factors—Risks Related to the Separation."

Why is the separation of SpinCo structured as a distribution?

 

Parent believes that a tax-free distribution in the United States, for U.S. federal income tax purposes, of shares of SpinCo common stock to Parent stockholders is an efficient way to separate its publishing business in a manner that will


 

 

 

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    create long-term value for Parent, SpinCo and their respective stockholders.

What is the record date for the distribution?

 

The record date for the distribution will be June 22, 2015.

When will the distribution occur?

 

It is expected that 98.5% of the shares of SpinCo common stock will be distributed by Parent at 12:01 a.m. Eastern Time, on June 29, 2015 to holders of record of Parent common stock at the close of business on June 22, 2015, the record date for the distribution.

What do stockholders need to do to participate in the distribution?

 

Stockholders of Parent as of the record date for the distribution will not be required to take any action to receive shares of SpinCo common stock in the distribution, but you are urged to read this entire information statement carefully. No stockholder approval of the distribution is required. You are not being asked for a proxy. You do not need to pay any consideration, exchange or surrender your existing shares of Parent common stock or take any other action to receive your shares of SpinCo common stock. Please do not send in your Parent stock certificates. The distribution will not affect the number of outstanding shares of Parent common stock or any rights of Parent stockholders, although it will affect the market value of each outstanding share of Parent common stock.

How will shares of SpinCo common stock be issued?

 

You will receive shares of SpinCo common stock through the same channels that you currently use to hold or trade Parent common stock, whether through a brokerage account, 401(k) plan or other channel. Receipt of SpinCo shares will be documented for you in the same manner that you typically receive stockholder updates, such as monthly broker statements and 401(k) statements.

 

 

If you own Parent common stock as of the close of business on June 22, 2015, the record date for the distribution, including shares owned in certificate form, Parent, with the assistance of Wells Fargo Shareowner Services, the distribution agent for the distribution, will electronically distribute shares of SpinCo common stock to you or to your brokerage firm on your behalf in book-entry form. Wells Fargo Shareowner Services will mail you a book-entry account statement that reflects your shares of SpinCo common stock, or your bank or brokerage firm will credit your account for the shares. If you own Parent common stock through the Parent dividend reinvestment plan, the SpinCo shares you receive will be distributed to a new SpinCo dividend reinvestment plan account that will be created for you.


 

 

 

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If I was enrolled in the Parent dividend reinvestment plan, will I automatically be enrolled in the SpinCo dividend reinvestment plan?   Yes. If you elected to have your Parent cash dividends applied toward the purchase of additional Parent common stock, the SpinCo shares you receive in the distribution will be automatically enrolled in the SpinCo dividend reinvestment plan sponsored by Wells Fargo Shareowner Services (SpinCo's transfer agent and registrar), unless you notify Wells Fargo Shareowner Services that you do not want to reinvest any SpinCo cash dividends in additional SpinCo shares. For contact information for Wells Fargo Shareowner Services, see "Description of SpinCo's Capital Stock—Transfer Agent and Registrar."

How many shares of SpinCo common stock will I receive in the distribution?

 

Parent will distribute to you one share of SpinCo common stock for every two shares of Parent common stock held by you as of close of business on the record date for the distribution. Based on approximately 226.3 million shares of Parent common stock outstanding as of May 31, 2015, a total of approximately 113.2 million shares of SpinCo common stock will be distributed. For additional information on the distribution, see "The Separation and Distribution."

Will SpinCo issue fractional shares of its common stock in the distribution?

 

No. SpinCo will not issue fractional shares of its common stock in the distribution. Fractional shares that Parent stockholders would otherwise have been entitled to receive will be aggregated and sold in the public market by the distribution agent. The aggregate net cash proceeds of these sales will be distributed pro rata (based on the fractional share such holder would otherwise be entitled to receive) to those stockholders who would otherwise have been entitled to receive fractional shares. Recipients of cash in lieu of fractional shares will not be entitled to any interest on the amounts of payment made in lieu of fractional shares.

What are the conditions to the distribution?

 

The distribution is subject to the satisfaction (or waiver by Parent in its sole discretion) of the following conditions:

 

the transfer of assets and liabilities from Parent to SpinCo shall be completed in accordance with the separation and distribution agreement;

 

Parent shall have received a private letter ruling from the Internal Revenue Service (or the "IRS") with respect to one or more specific requirements for qualification for tax-free treatment under Section 355 of the Code;

 

Parent shall have received an opinion from Parent's outside tax counsel to the effect that the requirements for tax-free treatment under Section 355 of the Code will be satisfied;



 

 

 

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an independent appraisal firm acceptable to Parent shall have delivered one or more opinions to the board of directors of Parent at the time or times requested by the board of directors of Parent confirming the solvency and financial viability of Parent before the consummation of the distribution and each of Parent and SpinCo after consummation of the distribution, and such opinions shall have been acceptable to Parent in form and substance in Parent's sole discretion and such opinions shall not have been withdrawn or rescinded;

 

the U.S. Securities and Exchange Commission (or the "SEC") shall have declared effective the registration statement of which this information statement forms a part, and this information statement shall have been made available to Parent stockholders;

 

all actions or filings necessary or appropriate under applicable U.S. federal, U.S. state or other securities laws shall have been taken and, where applicable, have become effective or been accepted by the applicable governmental entity;

 

the transaction agreements relating to the separation shall have been duly executed and delivered by the parties;

 

no order, injunction or decree issued by any court of competent jurisdiction, or other legal restraint or prohibition preventing the consummation of the separation, distribution or any of the related transactions, shall be in effect;

 

the shares of SpinCo common stock to be distributed shall have been approved for listing on the New York Stock Exchange, subject to official notice of distribution; and

 

no other event or development shall exist or have occurred that, in the judgment of Parent's board of directors, in its sole discretion, makes it inadvisable to effect the separation, distribution and other related transactions.


 

 

Parent and SpinCo cannot assure you that any or all of these conditions will be met and may also waive any of the conditions to the distribution. In addition, Parent can decline at any time to go forward with the separation and distribution. For a complete discussion of all of the conditions to the distribution, see "The Separation and Distribution—Conditions to the Distribution."


 

 

 

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What is the expected date of completion of the distribution?   The completion and timing of the distribution are dependent upon a number of conditions. It is expected that the shares of SpinCo common stock will be distributed by Parent at 12:01 a.m., Eastern Time, on June 29, 2015 to the holders of record of Parent common stock at the close of business on June 22, 2015, the record date for the distribution. However, no assurance can be provided as to the timing of the distribution or that all conditions to the distribution will be met.

Can Parent decide to cancel the distribution of SpinCo common stock even if all the conditions have been met?

 

Yes. The distribution is subject to the satisfaction or waiver of certain conditions. See the section entitled "The Separation and Distribution—Conditions to the Distribution." Until the distribution has occurred, Parent has the right to terminate the distribution, even if all of the conditions are satisfied.

What if I want to sell my Parent common stock or my SpinCo common stock?

 

You should consult with your financial advisors, such as your stockbroker, bank or tax advisor.

What is "regular-way" and "ex-distribution" trading of Parent common stock?

 

Beginning on or shortly before the record date for the distribution and continuing up to and through the distribution date, it is expected that there will be two markets in Parent common stock: a "regular-way" market and an "ex-distribution" market. Parent common stock that trades in the "regular-way" market will trade with an entitlement to shares of SpinCo common stock distributed pursuant to the distribution. Shares that trade in the "ex-distribution" market will trade without an entitlement to shares of SpinCo common stock distributed pursuant to the distribution. If you hold shares of Parent common stock on the record date and then decide to sell any Parent common stock before the distribution date, you should make sure your stockbroker, bank or other nominee understands whether you want to sell your Parent common stock with or without your entitlement to SpinCo common stock pursuant to the distribution.

Where will I be able to trade shares of SpinCo common stock?

 

SpinCo intends to apply to list its common stock on the New York Stock Exchange under the current Parent symbol "GCI." SpinCo anticipates that trading in shares of its common stock will begin on a "when-issued" basis on or about June 22, 2015, the record date for the distribution, and will continue up to and through the distribution date and that "regular-way" trading in SpinCo common stock will begin on the first trading day following the completion of the distribution. If trading begins on a "when-issued" basis, you may purchase or sell shares of SpinCo common stock up to and through the distribution date, but your transaction will not settle until after the distribution date. SpinCo cannot


 

 

 

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    predict the trading prices for its common stock before, on or after the distribution date.

What will happen to the listing of Parent common stock?

 

Parent common stock will continue to trade on the New York Stock Exchange after the distribution, but under the new symbol "TGNA."

Will the number of shares of Parent common stock that I own change as a result of the distribution?

 

No. The number of shares of Parent common stock that you own will not change as a result of the distribution.

Will the distribution affect the market price of my shares of Parent common stock?

 

Yes. As a result of the distribution, Parent expects the trading price of Parent common stock immediately following the distribution to be lower than the "regular-way" trading price of such stock immediately prior to the distribution because the trading price will no longer reflect the value of the publishing business. There can be no assurance that the aggregate market value of the Parent common stock and SpinCo common stock following the separation will be higher or lower than the market value of Parent common stock if the separation and distribution did not occur. This means, for example, that the combined trading prices of two shares of Parent common stock and one share of SpinCo common stock after the distribution may be equal to, greater than or less than the trading price of two shares of Parent common stock before the distribution.

What are the material U.S. federal income tax consequences of the contribution and the distribution?

 

It is a condition to the completion of the distribution that Parent receive an opinion from outside tax counsel to the effect that the requirements for tax-free treatment under Section 355 of the Code will be satisfied. Accordingly, it is expected that no gain or loss will be recognized by Parent in connection with the contribution and distribution and, except with respect to cash received in lieu of a fractional share of SpinCo common stock, no gain or loss will be recognized by you, and no amount will be included in your income, upon the receipt of shares of SpinCo common stock in the distribution for U.S. federal income tax purposes. You will, however, recognize gain or loss for U.S. federal income tax purposes with respect to cash received in lieu of a fractional share of SpinCo common stock. For more information regarding the potential U.S. federal income tax consequences to SpinCo and to you of the contribution and the distribution, see the section entitled "Material U.S. Federal Income Tax Consequences."

How will I determine my tax basis in the SpinCo shares I receive in the distribution?

 

For U.S. federal income tax purposes, your aggregate basis in the common stock that you hold in Parent and the new SpinCo common stock received in the distribution (including any fractional share interest in SpinCo common stock for which cash is received) will equal the aggregate basis in


 

 

 

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    Parent common stock held by you immediately before the distribution, allocated between your shares of Parent common stock and SpinCo common stock (including any fractional share interest in SpinCo common stock for which cash is received) you receive in the distribution in proportion to the relative fair market value of each on the distribution date. You should consult your tax advisor about the particular consequences of the distribution to you, including the application of the tax basis allocation rules and the application of state, local and non-U.S. tax laws.

What will SpinCo's relationship be with Parent following the separation?

 

After the distribution, Parent and SpinCo will be separate companies with separate management teams and separate boards of directors. SpinCo will enter into a separation and distribution agreement with Parent to effect the separation and distribution and provide a framework for SpinCo's relationship with Parent after the separation and will enter into certain other agreements, such as a transition services agreement, a tax matters agreement and an employee matters agreement. These agreements will provide for the separation between SpinCo and Parent of the assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) of Parent and its subsidiaries attributable to periods prior to, at and after SpinCo's separation from Parent and will govern the relationship between SpinCo and Parent subsequent to the completion of the separation. For additional information regarding the separation and distribution agreement, other transaction agreements and certain other commercial agreements between Parent and SpinCo, see the sections entitled "Risk Factors—Risks Related to the Separation" and "Certain Relationships and Related Person Transactions."

Who will manage SpinCo after the separation?

 

SpinCo will benefit from a management team with an extensive background in the publishing business. Led by Robert J. Dickey, who will be SpinCo's President and Chief Executive Officer after the separation, SpinCo's management team will possess deep knowledge of, and extensive experience in, its industry. For more information regarding SpinCo's management, see "Management."

Are there risks associated with owning SpinCo common stock?

 

Yes. Ownership of SpinCo common stock is subject to both general and specific risks relating to SpinCo's business, the industry in which it operates, its ongoing contractual relationships with Parent and its status as a separate, publicly traded company. Ownership of SpinCo common stock is also subject to risks relating to the separation. These risks are described in the "Risk Factors" section of this information statement beginning on page 22. You are encouraged to read that section carefully.


 

 

 

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Does SpinCo plan to pay dividends?   SpinCo currently anticipates that it will initially pay a regular cash dividend. However, the declaration and payment of any dividends in the future by SpinCo will be subject to the sole discretion of its board of directors and will depend upon many factors. See "Dividend Policy."

Will SpinCo incur any indebtedness prior to or at the time of the distribution?

 

SpinCo anticipates having little or no indebtedness for borrowed money upon completion of the distribution. Contemporaneous with the separation, SpinCo will enter into a revolving credit facility, with borrowing capacity of up to $500 million, to provide SpinCo with additional flexibility and liquidity.

Who will be the distribution agent, transfer agent and registrar for SpinCo common stock?

 

The distribution agent, transfer agent and registrar for SpinCo common stock will be Wells Fargo Shareowner Services. For questions relating to the transfer or mechanics of the stock distribution, you should contact Wells Fargo Shareowner Services toll free at (800) 468-9716 or non-toll free at (651) 450-4064.

What will SpinCo's corporate governance profile be?

 

SpinCo anticipates having strong corporate governance practices intended to enhance long-term shareholder value. While many matters will be determined by SpinCo's board of directors after the distribution, SpinCo's board will be annually elected, with a majority vote standard applying in uncontested elections, and shareholders representing 20% of SpinCo's outstanding shares will have the right to request special meetings in between annual meetings, subject to certain requirements to be set forth in SpinCo's organizational documents. More information about SpinCo's governance practices will be included in SpinCo's proxy statement and other governance-related filings and statements made after the separation. See "Description of SpinCo's Capital Stock—Corporate Governance."

Where can I find more information about Parent and SpinCo?

 

Before the distribution, if you have any questions relating to Parent's business performance, you should contact:

 

 

Gannett Co., Inc.
7950 Jones Branch Drive
McLean, Virginia 22107
Attention: Investor Relations

 

 

After the distribution (in connection with which SpinCo will have changed its name to Gannett Co., Inc.), SpinCo stockholders who have any questions relating to SpinCo's business performance should contact SpinCo at:

 

 

Gannett Co., Inc.
7950 Jones Branch Drive
McLean, Virginia 22107
Attention: Investor Relations

 

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INFORMATION STATEMENT SUMMARY

              Except as otherwise indicated or unless the context otherwise requires, the information included in this information statement about SpinCo assumes the completion of all of the transactions referred to in this information statement in connection with the separation and distribution. Unless the context otherwise requires, references in this information statement to "SpinCo" refer to Gannett SpinCo, Inc., a Delaware corporation, and its combined subsidiaries. References in this information statement to "Parent" refer to Gannett Co., Inc., a Delaware corporation, and its consolidated subsidiaries (other than, after the distribution, SpinCo and its consolidated subsidiaries), unless the context otherwise requires. References to SpinCo's historical business and operations refer to the business and operations of Parent's publishing business that will be transferred to SpinCo in connection with the separation and distribution. In connection with the distribution, Gannett Co., Inc., as Parent, will be renamed "TEGNA Inc.," and Gannett SpinCo, Inc., as SpinCo, will change its name to "Gannett Co., Inc." Throughout this information statement, for purposes of simplicity, the current Gannett Co., Inc. prior to the distribution and TEGNA Inc. following the distribution are referred to as "Parent" and Gannett SpinCo, Inc. prior to the distribution and Gannett Co., Inc. following the distribution are referred to as "SpinCo." References in this information statement to the "separation" refer to the separation of the publishing business from Parent's other businesses and the creation, as a result of the distribution, of an independent, publicly traded company, SpinCo, to hold the assets and liabilities associated with the publishing business after the distribution. References in this information statement to the "distribution" refer to the distribution of 98.5% of SpinCo common stock to Parent's stockholders on a pro rata basis.

Gannett SpinCo, Inc.

              SpinCo 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. SpinCo's operations are comprised of 100 daily publications in the U.S. and U.K., more than 400 non-daily publications in the U.S., and more than 125 such titles in the U.K. Collectively, SpinCo's U.S. print products reach approximately 9.7 million dedicated U.S. readers every weekday and approximately 10.5 million every Sunday. SpinCo's 82 U.S. daily publications include USA TODAY, which has been a cornerstone of the national news landscape for more than three decades. USA TODAY is currently the nation's number one newspaper in consolidated print and digital circulation, according to the Alliance for Audited Media's September 2014 Publisher's Statement, with total daily circulation of 4.1 million and Sunday circulation of 3.7 million, which includes daily print, digital replica, digital non-replica, and branded editions. In the U.K., Newsquest has a total average readership of approximately 6 million every week. The availability of SpinCo's award-winning content to audiences whenever, wherever and however they choose makes it a go-to information source for consumers and preferred platform for advertisers working with companies of all industries, sizes and locations.

              On June 1, 2015, SpinCo completed the acquisition of the remaining 59.4% interest in the Texas-New Mexico Newspapers Partnership that it did not own from Digital First Media. As a result, SpinCo acquired 11 news organizations in Texas, New Mexico and Pennsylvania which increases its U.S. daily publications to 93.

              SpinCo has a significant digital presence. Every month, approximately 73.5 million unique visitors access USA TODAY content and approximately 30 million unique visitors seek out digital media associated with SpinCo's local publications through desktops, smartphones, and tablets. There have been more than 21 million downloads of USA TODAY's award-winning app on mobile devices and 2 million downloads of apps associated with SpinCo's local publications. Newsquest is a digital leader in the U.K. where its network of web sites attracts nearly 20 million unique visitors monthly.

              SpinCo's comprehensive operations also include commercial printing, newswire, marketing and data services. Certain of SpinCo's businesses have strategic relationships with online businesses of

 

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Parent, including CareerBuilder LLC ("CareerBuilder"), Cars.com (formerly known as Classified Ventures, LLC ("Classified Ventures")), and G/O Digital, Parent's digital marketing services organization.

              SpinCo generates revenue primarily through advertising and subscriptions to its publications. In addition to USA TODAY, SpinCo's local publications and affiliated products operate through fully integrated shared support, sales, and service platforms. SpinCo's diversified set of multiple revenue streams ensures that the value of its financial, creative and human resources is maximized.

              Local domestic circulation revenue is driven through its All Access Content Subscription Model. All subscriptions include access to content via multiple platforms, including full web, mobile, e-Edition and tablet access, with subscription prices that vary according to the frequency of delivery of the print edition. In addition to the subscription model, single-copy print editions continue to be sold at retail outlets, and account for approximately 15% of daily and 24% of Sunday net paid circulation volume.

              SpinCo's results of operations in recent periods have been impacted by declining revenues that are reflective of general trends in the newspaper industry and soft economic conditions affecting advertising demand, particularly in the retail sector. SpinCo's results also reflect workforce restructuring and transformation costs primarily resulting from organizational and operational restructurings at certain of SpinCo's locations as SpinCo works to optimize its resources across its organization.

              SpinCo employs a proven multi-platform approach to advertising, which can be specifically tailored to the individual needs of all levels of advertisers, from small, locally-owned merchants to large, complex businesses. SpinCo's U.S. Community Publishing ("USCP") sales teams work with local small- to medium-sized businesses to structure comprehensive advertising solutions across multiple platforms and products including display advertising, desktop, mobile, tablet and other specialty publications. As more businesses work to interact with consumers online, SpinCo, through its access to G/O Digital, has focused specifically on developing a wide array of leading-edge digital marketing solutions that enable marketers and advertisers to connect with local consumers online through products that drive results. SpinCo has a national advertising sales force focused on the largest national advertisers and accounts, and has relationships with outside agencies that specialize in the sale of national ads. This comprehensive method allows SpinCo to address a much larger market and attract the widest possible set of potential advertising partners.

              SpinCo is headquartered in McLean, VA.

Strategies

              SpinCo is committed to a business strategy that drives returns for shareholders, delights audiences through a robust user experience and engages with consumers to strengthen the brands of advertising partners and drive revenue. Key elements of SpinCo's strategy to achieve these objectives are as follows:

              Continue to improve digital platforms to strengthen local franchises and attract digital-only subscribers.    As the publishing industry has evolved and readers increasingly consume content on digital platforms, SpinCo has made significant investments in online and mobile offerings across local markets. SpinCo will continue to develop compelling content and applications that enable its readers to access trusted local news and information that is highly relevant to its local communities. The unparalleled credibility of SpinCo's local media organizations as known and trusted media sources carries over to digital platforms, and differentiates SpinCo's online sources from competing products. SpinCo will also focus on continuing to develop native applications and video content for mobile devices across local markets. This initiative supports the All Access Content Subscription Model,

 

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attracting new digital-only accounts that are essential to growing the subscription base in markets with younger demographics, which is a key driver of future revenue growth.

              Expand the integration of national and local content.    In 2014 SpinCo launched a pioneering project to enhance its local hometown coverage by leveraging its unique ability to generate and distribute national content. In 35 local markets, SpinCo now includes a local edition of USA TODAY content inside the print edition and e-Edition of the local publication. The local USA TODAY edition includes national News, Money and Lifestyle content, while USA TODAY's sports coverage is integrated into local sections. In addition, SpinCo has partnered with several third-party news organizations to incorporate the local edition of USA TODAY into non-SpinCo publications across seven states, and to expand the offerings in the local edition to include weekend Personal Finance and Sunday Life sections. SpinCo intends to continue to expand this project to additional local SpinCo and third-party publications and to continue to develop new opportunities to leverage its outstanding national content to further complement local reporting. Expansion of SpinCo's award-winning content into new publications allows it to reach new audiences and attract new advertisers. These initiatives create diverse new revenue streams for content SpinCo is already producing, creating added-value. SpinCo will continue to actively pursue opportunities to syndicate USA TODAY branded content to other local and national market media operations.

              Leverage competitive strengths to provide targeted, integrated solutions to advertisers.    Proprietary research indicates that local and national advertisers find it difficult to manage the complexity of their multiple marketing investments, with digital solutions being particularly challenging. They are seeking to reach an increasingly elusive audience and struggling to influence attitudes and behavior at each stage of the purchase path. This environment presents a strong opportunity for SpinCo to use its key capabilities to partner with advertisers and provide critical solutions to their most pressing challenges. SpinCo will leverage its many competitive advantages – including its reputation as a trusted partner with local knowledge and complete digital marketing services product offerings – to create tailored media/marketing plans in which the individual elements work in concert to amplify and reinforce the advertiser's message and digital presence. Offering thoughtfully crafted digital strategies that meet the unique needs of local marketers and advertisers make SpinCo a highly attractive advertising and marketing resource. This consultative multi-platform sales approach is customized to meet the specific needs of all levels of advertisers, enabling SpinCo to access a large universe of potential advertising and marketing partners. To further enhance the success of this approach, SpinCo is intensively training its sales and management teams to further their expertise in digital product integration and sales pipeline management. In addition, SpinCo will leverage the natural synergies between its local media organizations and local digital platforms to provide more effective advertising solutions. SpinCo's local content, long-standing customer relationships, highly talented news and advertising sales staff, and comprehensive promotional capabilities are all competitive advantages that SpinCo will use to sell integrated advertising and marketing solutions that meet the changing needs of advertisers. Creating new digital solutions for advertisers on both a local and national basis will put SpinCo in an excellent position to take advantage of the many opportunities resulting from the rapid pace of technological change in the industry.

              Focus on operational excellence.    SpinCo will maintain its long-standing reputation for journalistic excellence by employing editors, reporters, producers and designers who are committed to the company's mission to provide trusted news and information and to actively support the people and businesses in the communities SpinCo serves. The highest quality local reporting will continue to make SpinCo publications indispensable in their communities. The goal will be to maintain and further develop deep reader loyalty, strong advertiser relationships and consistent growth. In addition, SpinCo will continue to maximize the efficiency of its print, sales, administrative, and distribution functions to increase profitability. SpinCo will continue to leverage its economies of scale to reduce supply chain costs, provide significant shared editorial content, and streamline its creative and design interactions

 

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with advertisers in print and online. As they have in the past, these efforts will continue to drive profitability and strengthen customer relationships.

              Supplement organic growth with selective acquisitions.    SpinCo will be well-positioned to pursue value-enhancing investments and acquisitions with fewer regulatory constraints than it has currently – and will be both opportunistic and disciplined in its acquisition strategy. SpinCo will be virtually debt-free upon completion of the distribution, and its balance sheet and cash flow generation will be strong in comparison to its peers, providing it with the financial flexibility to pursue opportunities arising in a consolidating industry. SpinCo is a strong operator, and its strengths in information gathering and reporting, coupled with its valuable integrated content sharing, advertising, sales and administrative platforms, will help drive innovative approaches to revenue generation as well as efficiency gains in acquired properties.

              Maintain a strong, flexible balance sheet.    Through proactive cost management and appropriate financial policies, SpinCo will remain committed to maintaining financial flexibility in order to execute its organic growth strategies and be in position to make accretive acquisitions.

Strengths

              SpinCo believes it enjoys the benefits of a number of unique talents and assets, many of which have been carefully developed over its long history as an established industry leader. The following strengths support its business strategies:

              Broad footprint in diverse markets.    SpinCo is one of the largest and most diverse multi-platform publishers in the United States, with 81 local U.S. daily publications, and over 400 non-daily local publications across 30 states, as well as the country's leading national newspaper brand. Every month approximately 73.5 million unique visitors access USA TODAY content and approximately 30 million unique visitors seek out USCP digital media through desktops, smartphones and tablets. In addition, there have been more than 21 million downloads of USA TODAY's award-winning app on mobile devices and 2 million downloads of USCP apps. Collectively, print products reach approximately 9.7 million dedicated U.S. readers every weekday, and approximately 10.5 million every Sunday. SpinCo's Newsquest platform is a leading regional community news provider in the U.K., with 18 daily paid-for titles, more than 125 weekly print products, magazines and trade publications, and a network of websites including S1, a leading employment website in Scotland, and other digital products. Newsquest also participates in 1XL, which sells digital display advertising to national advertisers across most U.K. regional newspaper websites. In the U.K., Newsquest has a total average readership of approximately 6 million every week. This broad and diverse footprint allows SpinCo to take advantage of economies of scale across various functions, including reporting, production, administration and sales, while mitigating exposure to economic risk in any one region or locality. SpinCo's vast footprint also increases the available reach for advertisers and makes SpinCo's properties very attractive to marketers seeking multi-platform, broad, impactful campaigns as well as smaller-scale, targeted solutions.

              On June 1, 2015, SpinCo completed the acquisition of the remaining 59.4% interest in the Texas-New Mexico Newspapers Partnership that it did not own from Digital First Media. As a result, SpinCo acquired 11 news organizations in Texas, New Mexico and Pennsylvania which increases its U.S. daily publications to 93.

              Recognizable national brand.    With total daily circulation of 4.1 million, and average cross-platform page views of more than 1.2 billion per month, USA TODAY was again the No. 1 ranked publication in consolidated digital and print circulation, according to the Alliance for Audited Media's September 2014 Publisher's Statement. Since its introduction in 1982, USA TODAY has developed a tremendously recognizable and respected brand that SpinCo leverages across various businesses. For example, SpinCo's USA TODAY Sports Media Group has used the USA TODAY brand name to

 

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successfully launch "For the Win" (ftw.usatoday.com) as a unique digital property that provides sports fans with social news and curated analysis. The USA TODAY brand immediately boosts the credibility of any affiliated property, allowing even the most tailored, niche content platforms to increase their audience.

              Unique ability to generate and integrate national and local content.    With one of the country's leading national media brands and the largest network of local publications, SpinCo has the unrivaled ability to generate and distribute national content to enhance its ever-important local hometown coverage. Currently, 35 local SpinCo publications and several third-party publications include a local edition of USA TODAY, which includes national News, Money and Lifestyle content on a daily basis, and Personal Finance and Sunday Life sections on weekends. USA TODAY's Sports coverage is integrated into local sports sections. In total, readers in 35 local SpinCo markets and several third-party markets across seven states get on average approximately 70 pages of additional content per week as a result of these integration efforts. Consumer reaction to SpinCo's additional content has been very positive, which solidifies the local publications' positions as preferred information sources for readers and attractive platforms for advertisers looking to reach readers on both a local and national scale.

              Integrated and innovative digital platform.    Through its All Access Content Subscription Model (which provides content digitally to all subscribers with the option of home delivery) across local markets, SpinCo has a clear commitment to providing consumers with access to the news and information about their local communities that they most want on all the devices and platforms they use. The credibility and deep community roots of SpinCo's local media organizations differentiate SpinCo's content from competing products. The results of this digital effort have been outstanding. USCP's All Access Content Subscription Model has achieved activation rates near 64%, and in certain of the initial markets where the model was introduced, the activation rates approach 80%. The digital platforms (desktop, mobile, tablet) drive growth in readership, particularly with younger demographics and digital advertising revenue opportunities. In 2014, mobile page views increased 114% and mobile visitors increased 184% on a year-over-year basis. SpinCo believes that its commitment to innovative digital products and marketing solutions has solidified it as the leader in digital news and information, positioning it to take advantage of the rapid pace of technological change in an increasingly multi-platform media industry.

              Award-winning journalists dedicated to their local communities.    SpinCo's national and local publications have long-standing reputations for journalistic excellence. They employ an exceptionally talented group of writers, editors, reporters, photographers and designers who work to fulfill the company's mission to provide trusted news and information and to actively support the people and businesses in the communities SpinCo serves. SpinCo's publications and content creators play a significant, positive role in their respective communities, both inside and outside the newsroom. In recognition of this excellence, SpinCo publications have been honored with 48 Pulitzer Prizes, both national and regional Edward R. Murrow Awards and Alfred I. duPont-Columbia University Awards, as well as many other prestigious editorial awards.

              Talented and creative management teams.    The strategy and content of SpinCo's national and local publications are guided by outstanding leadership at every level of the organization. Recent successful innovations such as the All Access Content Subscription Model and USA TODAY local editions, are examples of the creativity and business innovation that drive strategy at SpinCo. Management at SpinCo and each of its individual publications plans to continue crafting new ways to leverage SpinCo's engaging content, yielding new and expanded revenue streams.

              Cost-effective centralized content management, production, sales and service infrastructure.    SpinCo's streamlined operations drive its ability to efficiently deliver innovative content and essential information. In 2011, Gannett Publishing Services ("GPS") was formed to improve the efficiency and reduce the cost associated with the production and distribution of the company's printed products across all divisions in the U.S. GPS directly manages all of the production, consumer sales, service and

 

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circulation operations for all of SpinCo's domestic publications, including all community newspapers and USA TODAY. In addition to providing an efficient, cost-effective print platform that has resulted in substantial cost savings and superior operational performance, GPS generates new revenue opportunities by leveraging its existing assets to provide ad production, printing and packing, and distribution services to third parties. SpinCo's digital products also operate on a unified and streamlined production and distribution system. SpinCo's digital platform includes a content management system that provides the connective tissue for all new digital products, enabling sharing of digital content company-wide, breaking news alerts and high-end creation and presentation of new, front-end storytelling designs. Major core product launches and back-end advertising product solutions allow these high performing services to deploy across dozens of community publishing properties, leading to increased user reach and digital news and information engagement. This enhanced audience interaction makes SpinCo's content significantly more attractive to advertising partners.

              Ongoing market affiliations and shared service agreements.    After the separation, SpinCo will maintain ongoing market affiliations with CareerBuilder LLC and Cars.com, as well as permissible shared service agreements with Parent, including G/O Digital, that will enable continued cross-platform advertising and content-sharing opportunities. This will allow for a smooth transition into a standalone company.

              Shareholder-friendly corporate governance.    As is Parent's legacy, SpinCo will institute shareholder-friendly corporate governance practices. SpinCo's Board of Directors will be elected annually, a majority voting standard will apply to uncontested director elections and special meetings will be able to be called by holders of 20% of the outstanding shares, subject to certain requirements to be set forth in SpinCo's organizational documents. Responsible and appropriate corporate governance will ensure that SpinCo's management always keeps shareholder interests top of mind when crafting value-creating strategies at all levels of the organization.

              Deep, long-standing relationships in local business communities.    SpinCo's reputation as the primary source of local news and information in many communities continues to make it an attractive advertising outlet for local businesses. SpinCo's advertising sales staff delivers comprehensive, tailored solutions for its customers. Through its consultative approach and wide array of digital marketing solutions, offered through SpinCo's access to Parent's G/O Digital platform, SpinCo helps small- and medium-sized businesses navigate the increasingly complex and diverse world of digital marketing services. The success of digital marketing solutions is reflected in a 66% increase in G/O Digital's revenue from small and medium-sized business clients in 2014 compared to 2013.

              Virtually debt-free capital structure.    SpinCo's virtually unlevered capital structure provides flexibility that will allow its expected strong cash flow to be used for accretive acquisitions, the return of capital to stockholders and investments in leading-edge digital products. Contemporaneous with the separation, SpinCo will enter into a revolving credit facility, with borrowing capacity of up to $500 million, to provide SpinCo with additional flexibility and liquidity.

Summary of Risk Factors

              An investment in SpinCo common stock is subject to a number of risks, including risks relating to SpinCo's business, the separation and SpinCo common stock. Set forth below are some, but not all, of these risks. Please read the information in the section captioned "Risk Factors" for a more thorough description of these and other risks.

Risks Related to SpinCo's Business

    Changes in economic conditions are expected to continue to affect advertising demand and SpinCo's ability to grow or maintain its advertising revenue.

 

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    Increasing popularity of digital media and the shift in newspaper readership demographics, consumer habits and advertising expenditures from traditional print to digital media, in addition to generally lower rates for digital advertising, may adversely affect SpinCo's operating revenues and margins, and may require significant capital investments due to changes in technology.

    Stagnation or a decline in website traffic levels due to subscription models or other factors may materially and adversely affect SpinCo's advertiser base and advertising rates and result in a decline in digital revenue.

    SpinCo's business operates in highly competitive markets with constant technological developments, and its ability to maintain market share and generate operating revenues depends on how effectively SpinCo competes with existing and new competition and on how technological developments affect SpinCo's business.

    Newsprint prices may continue to be volatile.

    The value of SpinCo's assets or operations may be diminished if its information technology systems fail to perform adequately or if it is the subject of a data breach or cyber-attack.

    SpinCo may be unable to adequately protect its intellectual property and other proprietary rights that are material to its business, or to defend successfully against intellectual property infringement claims by third parties.

    SpinCo's ability to operate effectively could be impaired if SpinCo fails to attract and retain its senior management team.

    Labor strikes, lockouts and protracted negotiations could lead to business interruptions and increased operating costs.

Risks Related to the Separation

    SpinCo has no history of operating as an independent company, and SpinCo's historical and pro forma financial information is not necessarily representative of the results that it would have achieved as a separate, publicly-traded company and may not be a reliable indicator of its future results.

    There could be significant liability if the distribution is determined to be a taxable transaction.

    SpinCo may not achieve some or all of the expected benefits of the separation, and the separation may materially and adversely affect SpinCo's business.

    Parent or SpinCo may fail to perform under various transaction agreements that will be executed as part of the separation or SpinCo may fail to have necessary systems and services in place when certain of the transaction agreements expire.

    Changes in the commercial and credit environments may materially affect SpinCo's future access to capital.

Risks Related to SpinCo Common Stock

    SpinCo cannot be certain that an active trading market for its common stock will develop or be sustained after the distribution, and following the distribution, SpinCo's stock price may fluctuate significantly.

    There may be substantial changes in SpinCo's stockholder base.

    SpinCo cannot guarantee the timing, amount or payment of dividends on its common stock.

 

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The Separation and Distribution

              On August 5, 2014, Parent announced that it intends to separate its publishing business from its broadcasting and digital businesses. The separation will occur by means of pro rata distribution to Parent stockholders of 98.5% of the shares of common stock of SpinCo, which was formed to hold Parent's publishing business.

              On June 8, 2015, the Parent board of directors approved the distribution of 98.5% of SpinCo's issued and outstanding shares of common stock on the basis of one share of SpinCo common stock for every two shares of Parent common stock held as of the close of business on June 22, 2015, the record date for the distribution, subject to the satisfaction or waiver of the conditions to the distribution as described in this information statement. For a more detailed description of these conditions, see "Conditions to the Distribution."

SpinCo's Post-Separation Relationship with Parent

              After the distribution, Parent and SpinCo will be separate companies with separate management teams and separate boards of directors. SpinCo will enter into a separation and distribution agreement with Parent, which is referred to in this information statement as the "separation agreement" or the "separation and distribution agreement." In connection with the separation, SpinCo will also enter into various other agreements to effect the separation and provide a framework for its relationship with Parent after the separation, such as a transition services agreement, a tax matters agreement and an employee matters agreement. These agreements will provide for the allocation between SpinCo and Parent of Parent's assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after SpinCo's separation from Parent, and will govern certain relationships between SpinCo and Parent after the separation.

              Following the distribution, SpinCo will continue to have a number of significant commercial arrangements with Parent. Parent will continue to hold a 1.5% stake in SpinCo for a period of time following the distribution to allow SpinCo to enter into a modified affiliation agreement with CareerBuilder. Parent is currently party to an affiliation agreement with CareerBuilder pursuant to which SpinCo's newspapers earn advertising revenues and pay affiliate fees. Pursuant to the terms of the CareerBuilder limited liability company agreement, if Parent (together with its affiliates) directly or indirectly retains at least a 1% voting and economic interest in SpinCo's newspapers, which it intends to do, Parent has the right to enter into a modified affiliation agreement that would apply to SpinCo's newspapers for up to five years. SpinCo expects to enter into a modified affiliation agreement at the time of the separation that would apply to its newspapers for up to five years. While this agreement would not be as favorable to SpinCo's newspapers as Parent's existing affiliation agreement, it is preferable for SpinCo to obtain this modified affiliation agreement rather than operate without any affiliation agreement with CareerBuilder.

              On October 1, 2014, Parent acquired the remaining 73% interest that it did not previously own in Classified Ventures, which was subsequently renamed Cars.com. Following that acquisition, each of SpinCo's newspapers is currently operating under new terms with Cars.com that are similar to the terms included in the new affiliation agreements Cars.com entered into with its former owners upon the closing of the acquisition. In connection with the distribution, SpinCo and SpinCo's newspapers will enter into a new five-year affiliation agreement with Cars.com, pursuant to which SpinCo's newspapers will be able to earn advertising revenues and pay affiliate fees to Cars.com on similar economic terms to those included in the new affiliation agreements Cars.com entered into with its former owners. Continuation of the affiliations of SpinCo's newspapers is contingent upon SpinCo's newspapers

 

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fulfilling their obligations under the new affiliation agreement, including meeting certain performance standards. If, prior to the end of the five-year term, SpinCo's newspapers fail to meet such performance standards or otherwise fail to fulfill their obligations under the new affiliation agreement, SpinCo's newspapers could cease to earn advertising revenues under their new affiliation agreement with Cars.com.

              For additional information regarding the separation agreement and other transaction agreements and the transactions contemplated thereby, see the sections entitled "Risk Factors—Risks Related to the Separation," "The Separation and Distribution" and "Certain Relationships and Related Person Transactions."

Reasons for the Separation

              The Parent board of directors believes that separating the publishing business from the remaining businesses of Parent is in the best interests of Parent and its stockholders for a number of reasons, including that:

    The separation will allow investors to separately value Parent and SpinCo based on their unique investment identities, including the merits, strategy, performance and future prospects of their respective businesses. The separation will also provide investors with two distinct and targeted investment opportunities.

    The separation will allow each business to more effectively pursue its own distinct operating priorities and strategies, and will enable the management of both companies to pursue unique opportunities for long-term growth and profitability.

    The separation will permit each company to concentrate its financial resources solely on its own operations, providing greater flexibility to invest capital in its business at a time and in a manner appropriate for its distinct strategy and business needs. This will facilitate a more efficient allocation of capital and an optimal mix of return of capital to stockholders, reinvestment in leading-edge digital products and value-enhancing M&A opportunities.

    The separation will provide greater opportunity to grow organically and pursue value-enhancing acquisitions with fewer regulatory obstacles in two consolidating industries.

    The separation will provide relief from FCC cross-ownership restrictions that currently prevent either Parent's publishing or broadcasting businesses from entering certain markets.

    The separation will create separate independent equity structures that will afford each company direct access to capital markets and facilitate the ability to capitalize on its unique growth opportunities.

    The separation will facilitate incentive compensation arrangements for employees that are more directly tied to the performance of each relevant company's business, and enhance employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives.

              The Parent board of directors also considered a number of potentially negative factors in evaluating the separation, including, among others, risks relating to the creation of a new public company, possible increased costs and one-time separation costs, but concluded that the potential benefits of the separation significantly outweighed these factors. For additional information, see the

 

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sections entitled "The Separation and Distribution—Reasons for the Separation" and "Risk Factors" included elsewhere in this information statement.

Corporate Information

              SpinCo was incorporated in Delaware on November 21, 2014 for the purpose of holding Parent's publishing business in connection with the separation and distribution described herein. Prior to the contribution of this business to SpinCo, which will be completed prior to the distribution, SpinCo will have no operations. The address of SpinCo's principal executive offices is 7950 Jones Branch Drive, McLean, Virginia 22107. SpinCo's telephone number after the distribution will be (703) 854-6000. SpinCo maintains an Internet site at www.gannett.com. SpinCo's website and the information contained therein or connected thereto shall not be deemed to be incorporated herein, and you should not rely on any such information in making an investment decision.

              SpinCo owns or has rights to use the trademarks, service marks and trade names that it uses in conjunction with the operation of its business.

Reason for Furnishing this Information Statement

              This information statement is being furnished solely to provide information to stockholders of Parent who will receive shares of SpinCo common stock in the distribution. It is not, and is not to be construed as, an inducement or encouragement to buy or sell any of SpinCo's securities. The information contained in this information statement is believed by SpinCo to be accurate as of the date set forth on the cover of this information statement. Changes may occur after that date, and neither Parent nor SpinCo will update the information except in the normal course of their respective disclosure obligations and practices, or as required by applicable law.

 

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SUMMARY HISTORICAL AND PRO FORMA COMBINED FINANCIAL DATA

              The following summary financial data reflects the combined operations of SpinCo. SpinCo derived the summary historical and pro forma combined income statement data for the quarters ended March 29, 2015 and March 30, 2014, and the years ended December 28, 2014, December 29, 2013 and December 30, 2012, and combined balance sheet data as of March 29, 2015, December 28, 2014 and December 29, 2013, as set forth below, from its unaudited Interim Condensed Combined Financial Statements and audited Annual Combined Financial Statements (together, the "Combined Financial Statements"), which are included in the "Index to Financial Statements" section of this information statement and from its unaudited condensed combined pro forma financial statements included in the "Unaudited Pro Forma Combined Financial Statements" section of this information statement. SpinCo derived the summary combined balance sheet data as of December 30, 2012, from SpinCo's underlying financial records which are not included in this information statement. SpinCo's underlying financial records were derived from the financial records of Parent for the periods reflected herein. As a result, the historical results may not necessarily reflect our results of operations, financial position and cash flows for future periods or what they would have been had SpinCo been a separate, stand-alone company during the periods presented. To ensure a full understanding of this summary financial data, the information presented below should be reviewed in combination with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Combined Financial Statements and accompanying notes thereto included elsewhere in this information statement.

              The summary unaudited pro forma combined financial data presented has been prepared to reflect the separation. The unaudited pro forma condensed combined income statement data presented reflects the financial results as if the separation occurred on December 30, 2013, which was the first day of fiscal 2014. The unaudited pro forma combined balance sheet data reflects the financial position as if the separation occurred on March 29, 2015. The assumptions used and pro forma adjustments derived from such assumptions are based on currently available information.

              The unaudited pro forma condensed combined financial statements are not necessarily indicative of SpinCo's results of operations or financial condition had the distribution and its anticipated post-separation capital structure been completed on the dates assumed. Also, they may not reflect the results of operations or financial condition that would have resulted had SpinCo been operating as an independent, publicly traded company during such periods. In addition, they are not necessarily indicative of its future results of operations, financial position or cash flows.

              This summary historical and pro forma combined financial data should be reviewed in combination with "Unaudited Pro Forma Combined Financial Statements," "Capitalization," "Selected Historical Combined Financial Data," "Management's Discussion and Analysis of Financial Condition

 

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and Results of Operations" and the Combined Financial Statements and accompanying notes included in this information statement.

 
  For the period ended  
 
  Pro Forma
Mar. 29,
2015
  Mar. 29,
2015
  Mar. 30,
2014
  Pro Forma
Dec. 28,
2014
  Dec. 28,
2014
  Dec. 29,
2013
  Dec. 30,
2012(1)
 
In millions of dollars, except per share data
  (unaudited)
  (unaudited)
  (unaudited)
  (unaudited)
   
   
   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Statement of Income Information:

                                           

Operating revenues:

                                           

Advertising

  $ 397   $ 397   $ 452   $ 1,840   $ 1,840   $ 1,971   $ 2,124  

Circulation

  $ 271   $ 271   $ 280   $ 1,110   $ 1,110   $ 1,117   $ 1,103  

Other

  $ 49   $ 49   $ 57   $ 222   $ 222   $ 236   $ 242  

Total operating revenue(2)

  $ 717   $ 717   $ 789   $ 3,172   $ 3,172   $ 3,325   $ 3,470  

Operating income

  $ 30   $ 30   $ 49   $ 261   $ 262   $ 325   $ 331  

Net income

  $ 33   $ 33   $ 41   $ 210   $ 211   $ 274   $ 277  

Net income per share:

                                           

Basic

  $ 0.29     N/A     N/A   $ 1.85     N/A     N/A     N/A  

Diluted

  $ 0.28     N/A     N/A   $ 1.81     N/A     N/A     N/A  

 

 
  As of  
 
  Pro Forma
Mar. 29,
2015
  Mar. 29,
2015
  Dec. 28,
2014
  Dec. 29,
2013
  Dec. 30,
2012
 
In millions of dollars
  (unaudited)
  (unaudited)
   
   
  (unaudited)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Balance Sheet Information:

                               

Cash and cash equivalents

  $ 60   $ 74   $ 72   $ 79   $ 134  

Total assets

  $ 2,291   $ 2,287   $ 2,384   $ 2,495   $ 2,840  

 

 
  For the period ended  
 
  Pro Forma
Mar. 29,
2015
  Mar. 29,
2015
  Mar. 30,
2014
  Pro Forma
Dec. 28,
2014
  Dec. 28,
2014
  Dec. 29,
2013
  Dec. 30,
2012(1)
 
In millions of dollars
  (unaudited)
  (unaudited)
  (unaudited)
  (unaudited)
  (unaudited)
  (unaudited)
  (unaudited)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Measures(3):

                                           

Adjusted EBITDA

  $ 72   $ 71   $ 90   $ 475   $ 472   $ 502   $ 528  

Adjusted operating income

  $ 43   $ 44   $ 62   $ 360   $ 361   $ 392   $ 410  

Adjusted net income

  $ 42   $ 42   $ 48   $ 268   $ 270   $ 300   $ 322  
(1)
The year ended December 30, 2012 consisted of 53 weeks whereas the years ended December 29, 2013 and December 28, 2014 consisted of 52 weeks.
(2)
Amounts may not sum due to rounding.
(3)
For a reconciliation of the above non-GAAP metrics to the most directly comparable financial measures calculated and presented in accordance with GAAP, see "Management's Discussion and Analysis of Financial Condition and Results of Operations."

 

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RISK FACTORS

              You should carefully consider the following risks and other information in this information statement in evaluating SpinCo and SpinCo common stock. Any of the following risks could materially and adversely affect SpinCo's business, financial condition or results of operations. The risk factors generally have been separated into three groups: risks related to SpinCo's business, risks related to the separation and risks related to SpinCo common stock.

Risks Related to SpinCo's Business

Changes in economic conditions are expected to continue to affect advertising demand and SpinCo's ability to grow or maintain its advertising revenue.

              SpinCo's operating results depend on the relative strength of the economy in the publishing market as well as the strength or weakness of regional and national economic factors. SpinCo's operating revenues are sensitive to discretionary spending available to advertisers and subscribers in the markets SpinCo serves, as well as advertiser and subscriber perceptions of economic trends and uncertainty. Total advertising revenues have declined from $2.5 billion in 2010 to $1.8 billion in 2014, reflecting general trends in the newspaper industry and soft economic conditions affecting advertising demand, particularly in the retail sector. Expenditures by advertisers tend to be cyclical, reflecting overall economic conditions, as well as budgeting and buying patterns. Economic conditions affect the levels of retail, national and classified newspaper advertising revenue. Changes in gross domestic product, consumer spending, auto sales, housing sales, unemployment rates, job creation and circulation levels and rates all impact advertising demand and subscriber sentiment and therefore may impair SpinCo's ability to maintain and grow its circulation and advertising revenue. A decline in the economic prospects of advertisers, subscribers or the economy in general could alter current or prospective advertisers' and subscribers' spending priorities. All of these factors may further materially and adversely impact SpinCo's ability to grow or maintain its operating revenue.

Increasing popularity of digital media and the shift in newspaper readership demographics, consumer habits and advertising expenditures from traditional print to digital media, in addition to generally lower rates for digital advertising, may adversely affect SpinCo's operating revenues and margins, and may require significant capital investments due to changes in technology.

              Technology in the media industry continues to evolve rapidly. Advances in technology have led to an increasing number of methods for delivery of news and other content and have resulted in a wide variety of consumer demands and expectations, which are also rapidly evolving. If SpinCo is unable to exploit new and existing technologies to distinguish its products and services from those of its competitors or adapt to new distribution methods that provide optimal user experiences, SpinCo's business and financial results may be adversely affected.

              The increasing number of digital media options available online, through social networking tools and through mobile and other devices that distribute news and other content, is expanding consumer choice significantly. Faced with a multitude of media choices and a dramatic increase in accessible information, consumers may place greater value on when, where, how and at what price they consume content than they do on the source or reliability of such content. Further, as existing newspaper readers get older, younger generations may not develop similar readership habits. News aggregation websites and customized news feeds (often free to users) may reduce SpinCo's traffic levels by creating a disincentive for the audience to visit its websites or use its digital applications. If traffic

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levels stagnate or decline, SpinCo may not be able to create sufficient advertiser interest in its digital businesses or to maintain or increase the advertising rates of the inventory on its digital platforms.

              In addition, the range of advertising choices across digital products and platforms and the large inventory of available digital advertising space have historically resulted in significantly lower rates for digital advertising than for print advertising. Consequently, SpinCo's digital advertising revenue may not be able to replace print advertising revenue lost as a result of the shift to digital consumption. Reduced demand for SpinCo offerings or a surplus of advertising inventory could lead to a reduction in pricing and advertising spending, which could have an adverse effect on SpinCo's businesses and assets. SpinCo's ability to maintain and improve the performance of its customers' advertising on its digital properties may impact rates SpinCo achieves in the marketplace for its advertising inventory.

Stagnation or a decline in website traffic levels due to subscription models or other factors may materially and adversely affect SpinCo's advertiser base and advertising rates and result in a decline in digital revenue.

              Subscription models require users to pay for content after accessing a limited number of pages or news articles for free on SpinCo's websites each month. SpinCo's ability to build a subscriber base on its digital platforms through subscription offers depends on market acceptance, consumer habits, pricing, an adequate online infrastructure, terms of delivery platforms and other factors. If SpinCo's subscribers opt out of the subscription offers in greater numbers than anticipated, SpinCo may not generate expected revenue. In addition, the subscription model may result in fewer page views or unique visitors to SpinCo's websites if digital viewers are unwilling to pay to gain access to SpinCo's content. Stagnation or a decline in website traffic levels may materially and adversely affect SpinCo's advertiser base and advertising rates and result in a decline in digital revenue.

SpinCo's business operates in highly competitive markets with constant technological developments, and its ability to maintain market share and generate operating revenues depends on how effectively SpinCo competes with existing and new competition and on how technological developments affect SpinCo's business.

              SpinCo's business operates in highly competitive markets. SpinCo's brands compete for audiences and advertising revenue with newspapers and other media such as the Internet, magazines, broadcast, cable and satellite television, radio, direct mail, outdoor billboards and yellow pages. Some of SpinCo's current and potential competitors have greater financial and other resources than SpinCo.

              SpinCo's publications generate significant percentages of their advertising revenue from a few categories, including automotive, employment and real estate classified advertising, and retail advertising. Websites dedicated to classified advertising have become significant competitors of SpinCo's print editions and digital platforms. As a result, even in the absence of a recession or economic downturn, technological, industry or other changes specifically affecting these advertising sources could reduce advertising revenues and materially and adversely affect SpinCo's financial condition and results of operations.

              SpinCo's operating revenues primarily consist of advertising and paid circulation. Competition for advertising expenditures and paid circulation comes from local, regional and national newspapers, magazines, broadcast, cable and satellite television, radio, direct mail, yellow pages, the Internet, outdoor billboards and other media. Free circulation of daily newspapers has recently been introduced in several markets, and there can be no assurance that free daily publications, or other publications, will not be introduced in any markets in which SpinCo publishes its newspapers. The National Do Not Call Registry has affected the way newspapers solicit subscriptions. Competition for advertising revenue is based largely upon advertiser results, advertising rates, readership, demographics and circulation

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levels, while competition for circulation is based largely upon the content of the publication, its price, editorial quality, customer service, and other sources of news and information. SpinCo's local and regional competitors with community publications are typically unique to each market, but SpinCo has competitors for advertising revenue that are larger and have greater financial and distribution resources than SpinCo. Circulation revenue and SpinCo's ability to achieve price increases for its print products may be affected by competition from other publications and other forms of media available in SpinCo's various markets, declining consumer spending on discretionary items, decreasing amounts of free time and declining frequency of regular print newspaper buying among certain demographics. SpinCo may incur higher costs competing for advertising dollars and paid circulation. If SpinCo is not able to compete effectively for advertising dollars and paid circulation, SpinCo's operating revenues may decline, and its financial condition and results of operations may be materially and adversely affected.

              Technological developments also pose other challenges that could materially and adversely affect SpinCo's operating revenues and competitive position. New delivery platforms may lead to pricing restrictions, the loss of distribution control and the loss of a direct relationship with consumers. SpinCo's advertising and circulation revenues have declined, reflecting general trends in the newspaper industry, including declining newspaper buying by young people and the migration to other available forms of media for news. SpinCo may also be materially and adversely affected if the use of technology developed to block the display of advertising on websites proliferates. In addition, the expenditures necessary to implement these new technologies could be substantial, and other companies employing such technologies before SpinCo is able to do so could aggressively compete with SpinCo's business.

SpinCo relies on revenue from the printing and distribution of publications for third parties that may be subject to many of the same business and industry risks facing SpinCo.

              SpinCo generates a portion of its revenue from printing and distributing third-party publications, and its relationships with these third parties are generally pursuant to short-term contracts. As a result, if the macroeconomic and industry trends described herein, such as the sensitivity to perceived economic weakness of discretionary spending available to advertisers and subscribers, circulation declines, shifts in consumer habits and the increasing popularity of digital media affect those third parties, SpinCo may lose, in whole or in part, this source of revenue.

Newsprint prices may continue to be volatile.

              Newsprint is one of SpinCo's largest expenses. During the year ended December 28, 2014, our average cost per ton of newsprint was approximately 1% lower than our historical average annual cost per ton over the last five years. The price of newsprint has historically been volatile with 2014 average cost being approximately 8% lower than the highest average quarterly cost per ton over the last five years and approximately 21% higher than the lowest average quarterly cost per ton over the last five years. In addition, the consolidation of newsprint mills in the United States and Canada over the years has reduced the number of suppliers, which has led to increases in newsprint prices. Decreases in SpinCo's current consumption levels, further supplier consolidation or the inability to maintain its existing relationships with its newsprint suppliers may materially and adversely impact newsprint prices in the future.

The value of SpinCo's assets or operations may be diminished if its information technology systems fail to perform adequately or if it is the subject of a data breach or cyber-attack.

              SpinCo's information technology systems are critically important to operating its business efficiently and effectively. SpinCo relies on its information technology systems to manage its business

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data, communications, news and advertising content, digital products, order entry, fulfillment and other business processes. The failure of SpinCo's information technology systems to perform as anticipated could disrupt SpinCo's business and could result in transaction errors, processing inefficiencies, late or missed publications, and loss of sales and customers, causing SpinCo's business and results of operations to be impacted.

              Furthermore, attempts to compromise information technology systems occur regularly across many industries and sectors, and SpinCo may be vulnerable to security breaches beyond its control. SpinCo invests in security resources and technology to protect its data and business processes against risk of data security breaches and cyber-attack, but the techniques used to attempt attacks are constantly changing. A breach or successful attack could have a negative impact on SpinCo's operations or business reputation. SpinCo maintains cyber risk insurance, but this insurance may not be sufficient to cover all losses from any future breaches of SpinCo's systems.

SpinCo's possession and use of personal information and the use of payment cards by its customers present risks and expenses that could harm its business. Unauthorized access to or disclosure or manipulation of such data, whether through breach of SpinCo's network security or otherwise, could expose SpinCo to liabilities and costly litigation and damage its reputation.

              Maintaining SpinCo's network security is of critical importance because its online systems store and process confidential subscriber and other sensitive or protected data, such as names, email addresses, addresses and other personal information. SpinCo depends on the security of its networks and, in part, on the security of its third-party service providers. Unauthorized use of or inappropriate access to SpinCo's, or its third-party service providers', networks, computer systems and services could potentially jeopardize the security of confidential information, including banking and payment card (credit or debit) information of its customers. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, SpinCo or its third-party service providers may be unable to anticipate these techniques or to implement adequate preventative measures. Non-technical means, for example, actions by an employee, can also result in a data breach. There can be no assurance that any security measures SpinCo, or its third-party service providers, take will be effective in preventing these activities. SpinCo may need to expend significant resources to protect against security breaches or to address problems caused by breaches. If an actual or perceived breach of SpinCo's security occurs, the perception of the effectiveness of its security measures could be harmed and SpinCo could lose customers or users. A party that is able to circumvent SpinCo's security measures could misappropriate its proprietary information or the information of its customers or users, cause interruption in its operations, or damage its computers or those of its customers or users. As a result of any such breaches, customers or users may assert claims of liability against SpinCo as a result of any failure by SpinCo to prevent these activities. These activities may subject SpinCo to legal claims, adversely impact its reputation, and interfere with its ability to provide its products and services, all of which may have a material adverse effect on SpinCo's business, financial condition and results of operations.

              A significant number of SpinCo's customers authorize SpinCo to bill their payment accounts directly for all amounts charged by SpinCo. These customers provide payment card information and other personally identifiable information which, depending on the particular payment plan, may be maintained to facilitate future payment card transactions. Under payment card rules and SpinCo's contracts with its card processors, if there is a breach of payment card information that SpinCo stores, SpinCo could be liable to the banks that issue the payment cards for their related expenses and penalties.

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              Failure to protect customer data, including personal information as well as usage information, or to provide customers with appropriate notice of SpinCo's privacy practices could also subject SpinCo to liabilities imposed by United States federal and state regulatory agencies or courts. SpinCo could also be subject to evolving state laws and self-regulatory standards that impose data use obligations, data breach notification requirements, specific data security obligations or other consumer privacy-related requirements. SpinCo's failure to comply with any of these laws, regulations or standards may have an adverse effect on its business, financial condition and results of operations.

Foreign exchange variability could materially and adversely affect SpinCo's consolidated operating results.

              Weakening of the British pound to U.S. dollar exchange rate could diminish Newsquest's earnings contribution to consolidated results. Newsquest results for 2014 were translated to U.S. dollars at the average rate of 1.65.

Changes in the regulatory environment could encumber or impede SpinCo's efforts to improve operating results or the value of assets.

              SpinCo's publishing operations are subject to government regulation. Changing regulations may result in increased costs, reduced valuations or other impacts, all of which may adversely impact SpinCo's future profitability.

SpinCo's future strategic acquisitions, investments and partnerships could pose various risks, increase SpinCo's leverage and significantly impact SpinCo's ability to expand its overall profitability.

              Acquisitions involve inherent risks, such as potentially increasing leverage and debt service requirements and combining company cultures and facilities, which could have a material adverse effect on SpinCo's results of operations or cash flow and could strain SpinCo's human resources. SpinCo may be unable to successfully implement effective cost controls, achieve expected synergies or increase revenues as a result of any future acquisition. Acquisitions may result in SpinCo's assumption of unexpected liabilities and may result in the diversion of management's attention from the operation of SpinCo's business. Acquisitions may also result in SpinCo having greater exposure to the industry risks of the businesses underlying the acquisition. Strategic investments and partnerships with other companies expose SpinCo to the risk that it may not be able to control the operations of its investee or partnership, which could decrease the amount of benefits SpinCo realizes from a particular relationship. SpinCo is also exposed to the risk that its partners in strategic investments and infrastructure may encounter financial difficulties which could lead to disruption of investee or partnership activities, or impairment of assets acquired, which would adversely affect future reported results of operations and stockholders' equity. In addition, SpinCo may be unable to obtain financing necessary to complete acquisitions on attractive terms or at all. The failure to obtain regulatory approvals may prevent SpinCo from completing or realizing the anticipated benefits of acquisitions. Furthermore, acquisitions may subject SpinCo to new or different regulations which could have an adverse effect on SpinCo's operations.

The value of SpinCo's existing intangible assets may become impaired, depending upon future operating results.

              Goodwill and other intangible assets were approximately $0.6 billion as of December 28, 2014, representing approximately 25% of SpinCo's total assets. SpinCo periodically evaluates its goodwill and other intangible assets to determine whether all or a portion of their carrying values may no longer be recoverable, in which case a charge to earnings may be necessary. Any future evaluations requiring an

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asset impairment charge for goodwill or other intangible assets would adversely affect future reported results of operations and stockholders' equity, although such charges would not affect SpinCo's cash flow.

Adverse results from litigation or governmental investigations could impact SpinCo's business practices and operating results.

              From time to time, SpinCo is a party to litigation and regulatory, environmental and other proceedings with governmental authorities and administrative agencies. Adverse outcomes in lawsuits or investigations could result in significant monetary damages or injunctive relief that could adversely affect SpinCo's operating results or financial condition as well as SpinCo's ability to conduct its businesses as they are presently being conducted.

SpinCo may be unable to adequately protect its intellectual property and other proprietary rights that are material to its business, or to defend successfully against intellectual property infringement claims by third parties.

              SpinCo's ability to compete effectively depends in part upon its intellectual property rights, including its trademarks, copyrights and proprietary technology. SpinCo's use of contractual provisions, confidentiality procedures and agreements, and trademark, copyright, patent, unfair competition, trade secret and other laws to protect its intellectual property rights and proprietary technology and the use of the rights and technology of others may not be adequate. Litigation may be necessary to enforce SpinCo's intellectual property rights and to protect its proprietary technology, or to defend against claims by third parties that the conduct of its businesses or its use of intellectual property infringes upon such third party's intellectual property rights, including trademark, copyright and patent infringement. Any intellectual property litigation or claims brought against SpinCo, whether or not meritorious, could result in substantial costs and diversion of its resources, and there can be no assurances that favorable final outcomes will be obtained in all cases. The terms of any settlement or judgment may require SpinCo to pay substantial amounts to the other party or cease exercising its rights in such intellectual property. In addition, SpinCo may have to seek a license to continue practices found to be in violation of a third party's rights, which may not be available on reasonable terms, or at all. SpinCo's business, financial condition or results of operations may be materially and adversely affected as a result.

SpinCo's ability to operate effectively could be impaired if SpinCo fails to attract and retain its senior management team.

              SpinCo's success depends, in part, upon the continuing contributions of its senior management team. The loss of the services of any members of SpinCo's senior management team or the failure to attract qualified persons to its senior management team may have a material adverse effect on its business or its business prospects.

Labor strikes, lockouts and protracted negotiations could lead to business interruptions and increased operating costs.

              As of March 2, 2015, union employees comprised approximately 13% of SpinCo's workforce. SpinCo is required to negotiate collective bargaining agreements across its business units on an ongoing basis. Complications in labor negotiations can lead to work slowdowns or other business interruptions and greater overall employee costs. If SpinCo or its suppliers are unable to renew expiring collective bargaining agreements, it is possible that the affected unions or others could take action in the form of strikes or work stoppages. Such actions, higher costs in connection with these agreements or a significant labor dispute could materially and adversely affect SpinCo's business by disrupting its ability to provide customers with its products or services. Depending on its duration, any lockout, strike or work stoppage may have an adverse effect on its operating revenues, cash flows or operating income, or the timing thereof.

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Volatility in global financial markets directly affects the value of SpinCo's pension plan assets and liabilities.

              SpinCo's two largest retirement plans, which account for more than 96.5% of total pension plan assets, were underfunded as of December 28, 2014 by $645 million on a U.S. GAAP basis. Various factors, including future investment returns, discount rates and potential pension legislative changes, impact the timing and amount of pension contributions SpinCo may be required to make in the future.

Risks Related to the Separation

SpinCo has no history of operating as an independent company, and SpinCo's historical and pro forma financial information is not necessarily representative of the results that it would have achieved as a separate, publicly traded company and may not be a reliable indicator of its future results.

              The historical information about SpinCo in this information statement refers to SpinCo's business as operated by and integrated with Parent. SpinCo's historical and pro forma financial information included in this information statement is derived from the consolidated financial statements and accounting records of Parent. Accordingly, the historical and pro forma financial information included in this information statement does not necessarily reflect the financial condition, results of operations or cash flows that SpinCo would have achieved as a separate, publicly traded company during the periods presented or those that SpinCo will achieve in the future primarily as a result of the factors described below:

    Prior to the separation, SpinCo's business has been operated by Parent as part of its broader corporate organization, rather than as an independent company. Parent or one of its affiliates performed various corporate functions for SpinCo, such as legal, treasury, accounting, tax, auditing, human resources, public affairs and finance. SpinCo's historical and pro forma financial results reflect allocations of corporate expenses from Parent for such functions and are likely to be less than the expenses SpinCo would have incurred had it operated as a separate publicly traded company.

    Currently, SpinCo's business is integrated with the other businesses of Parent. Historically, SpinCo has shared economies of scope and scale in costs, employees, vendor relationships and customer relationships. Although SpinCo will enter into a transition services agreement with Parent, these arrangements may not retain or fully capture the benefits that SpinCo has enjoyed as a result of being integrated with Parent and may result in SpinCo paying higher charges than in the past for these services. This could have a material adverse effect on SpinCo's results of operations and financial condition following the completion of the separation.

    Generally, SpinCo's working capital requirements and capital for its general corporate purposes, including acquisitions and capital expenditures, have historically been satisfied as part of the corporate-wide cash management policies of Parent. Following the completion of the separation, SpinCo may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements, which may or may not be available and may be more costly.

    After the completion of the separation, the cost of capital for SpinCo's business may be higher than Parent's cost of capital prior to the separation.

              Other significant changes may occur in SpinCo's cost structure, management, financing and business operations as a result of operating as a company separate from Parent. For additional

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information about the past financial performance of SpinCo's business and the basis of presentation of the historical combined financial statements and the unaudited pro forma combined financial statements of SpinCo's business, see "Unaudited Pro Forma Combined Financial Statements," "Selected Historical Combined Financial Data of SpinCo," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical financial statements and accompanying notes included elsewhere in this information statement.

There could be significant liability if the distribution is determined to be a taxable transaction.

              It is a condition to the distribution that Parent receives an opinion from outside tax counsel to the effect that the requirements for tax-free treatment under Section 355 of the Code will be satisfied. The opinion relies on certain facts, assumptions, representations and undertakings from Parent and SpinCo regarding the past and future conduct of the companies' respective businesses and other matters. If any of these facts, assumptions, representations or undertakings is incorrect or not satisfied, Parent and its stockholders may not be able to rely on the opinion of tax counsel and could be subject to significant tax liabilities.

              Notwithstanding the opinion of tax counsel, the IRS could determine on audit that the separation is taxable if it determines that any of these facts, assumptions, representations or undertakings are incorrect or have been violated or if it disagrees with the conclusions in the opinion, or for other reasons, including as a result of certain significant changes in the share ownership of Parent or SpinCo after the separation. If the separation is determined to be taxable for U.S. federal income tax purposes, Parent and its stockholders that are subject to U.S. federal income tax could incur significant U.S. federal income tax liabilities and SpinCo could incur significant liabilities. For a description of the sharing of such liabilities between Parent and SpinCo, see "Certain Relationships and Related Person Transactions—Tax Matters Agreement."

SpinCo may be unable to engage in certain corporate transactions after the separation because such transactions could jeopardize the intended tax-free status of the distribution.

              To preserve the tax-free treatment to Parent of the separation and the distribution, under the tax matters agreement that SpinCo will enter into with Parent, SpinCo will be restricted from taking any action that prevents the distribution and related transactions from being tax-free for U.S. federal income tax purposes. Under the tax matters agreement, for the two-year period following the distribution, SpinCo will be prohibited, except in certain circumstances, from:

    entering into any transaction resulting in the acquisition of 40% or more of its stock or substantially all of its assets, whether by merger or otherwise;

    merging, consolidating or liquidating;

    issuing equity securities beyond certain thresholds;

    repurchasing its capital stock beyond certain thresholds; and

    ceasing to actively conduct its business.

              These restrictions may limit SpinCo's ability to pursue certain strategic transactions or other transactions that it may believe to be in the best interests of its stockholders or that might increase the value of its business. In addition, under the tax matters agreement, SpinCo is required to indemnify

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Parent against any such tax liabilities as a result of the acquisition of SpinCo's stock or assets, even if it did not participate in or otherwise facilitate the acquisition.

Until the separation and distribution occur, Parent has sole discretion to change the terms of the separation and distribution in ways that may be unfavorable to SpinCo.

              Until the separation and distribution occur, SpinCo will be a wholly owned subsidiary of Parent. Accordingly, Parent will effectively have the sole and absolute discretion to determine and change the terms of the separation and distribution, including the establishment of the record date for the distribution and the distribution date. These changes could be unfavorable to SpinCo. In addition, Parent may decide at any time not to proceed with the separation and distribution.

SpinCo may not achieve some or all of the expected benefits of the separation, and the separation may materially and adversely affect SpinCo's business.

              SpinCo may be unable to achieve the full strategic and financial benefits expected to result from the separation, or such benefits may be delayed or not occur at all. The separation and distribution is expected to provide the following benefits, among others:

    a distinct investment identity allowing investors to evaluate the merits, strategy, performance and future prospects of SpinCo separately from Parent;

    more efficient allocation of capital for both Parent and SpinCo;

    direct access by SpinCo to the capital markets;

    ability to pursue value-enhancing acquisitions with fewer regulatory obstacles in two consolidating industries; and

    facilitating incentive compensation arrangements for employees that are more directly tied to the performance of the relevant company's business, and enhancing employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives, while at the same time creating an independent equity structure that will facilitate SpinCo's ability to effect future acquisitions utilizing SpinCo common stock.

              SpinCo may not achieve these and other anticipated benefits for a variety of reasons, including, among others: (a) the separation will require significant amounts of management's time and effort, which may divert management's attention from operating and growing SpinCo's business; (b) following the separation, SpinCo may be more susceptible to market fluctuations and other adverse events than if it were still a part of Parent; (c) following the separation, SpinCo's business will be less diversified than Parent's business prior to the separation; and (d) the other actions required to separate Parent's and SpinCo's respective businesses could disrupt SpinCo's operations. If SpinCo fails to achieve some or all of the benefits expected to result from the separation, or if such benefits are delayed, the business, financial conditions and results of operations of SpinCo could be materially and adversely affected.

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Parent or SpinCo may fail to perform under various transaction agreements that will be executed as part of the separation or SpinCo may fail to have necessary systems and services in place when certain of the transaction agreements expire.

              In connection with the separation, SpinCo and Parent will enter into a separation agreement and will also enter into various other agreements, including a transition services agreement, a tax matters agreement and an employee matters agreement. The separation agreement, the tax matters agreement and the employee matters agreement will determine the allocation of assets and liabilities between the companies following the separation for those respective areas and will include any necessary indemnifications related to liabilities and obligations. The transition services agreement will provide for the performance of certain services by each company for the benefit of the other for a limited period of time after the separation. SpinCo will rely on Parent to satisfy its performance and payment obligations under these agreements. If Parent is unable to satisfy its obligations under these agreements, including its indemnification obligations, SpinCo could incur operational difficulties or losses. If Parent does not have in place its own systems and services, or if SpinCo does not have agreements with other providers of these services once certain transaction agreements expire or terminate, SpinCo may not be able to operate its business effectively and its profitability may decline.

Changes in the commercial and credit environments may materially affect SpinCo's future access to capital.

              SpinCo's ability to issue debt or enter into other financing arrangements on acceptable terms could be materially and adversely affected if there is a material decline in SpinCo's business or if other significantly unfavorable changes in economic conditions occur. Volatility in the world financial markets could increase borrowing costs or affect SpinCo's ability to gain access to the capital markets, which could have a material adverse effect on SpinCo's competitive position, business, financial condition, results of operations and cash flows.

Many contracts, which will need to be assigned from Parent or its affiliates to SpinCo in connection with the separation, require the consent of the counterparty to such an assignment, and failure to obtain these consents could increase SpinCo's expenses or otherwise reduce SpinCo's profitability.

              The separation agreement will provide that, in connection with SpinCo's separation, a number of contracts are to be assigned from Parent or its affiliates to SpinCo or SpinCo's affiliates. SpinCo currently anticipates that such contracts would be assigned prior to the completion of the distribution. However, some of these contracts may require the contractual counterparty's consent to such an assignment. It is possible that some parties may use the consent requirement to seek more favorable contractual terms from SpinCo. If SpinCo is unable to obtain these consents, SpinCo may be unable to obtain some of the benefits, assets and contractual commitments that are intended to be allocated to SpinCo as part of SpinCo's separation. If SpinCo is unable to obtain consents with respect to any of the contracts, the loss of the contracts could increase SpinCo expenses or otherwise reduce SpinCo's profitability.

A portion of SpinCo's advertising revenues is earned under affiliation agreements which may be terminated or amended to provide for less favorable terms following the separation.

              Parent is currently party to an affiliation agreement with CareerBuilder pursuant to which SpinCo's newspapers earn advertising revenues and pay affiliate fees. Pursuant to the terms of the CareerBuilder limited liability company agreement, if Parent (together with its affiliates) directly or indirectly retains at least a 1% voting and economic interest in SpinCo's newspapers, which it intends to do, Parent has the right to enter into a modified affiliation agreement that would apply to SpinCo's newspapers for up to five years. SpinCo expects to enter into a modified affiliation agreement at the

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time of the separation that would apply to its newspapers for up to five years. Circumstances could occur, including Parent ceasing to hold at least a 1% voting and economic interest in Spinco prior to the end of the five-year period, which could cause SpinCo's newspapers to cease to earn advertising revenues under an affiliation agreement with CareerBuilder. SpinCo expects that the terms of the modified affiliate agreement will result in lower advertising revenue for SpinCo than was the case prior to the distribution.

              On October 1, 2014, Parent acquired the remaining 73% interest that it did not own in Classified Ventures, which was subsequently renamed Cars.com. Following that acquisition, each of SpinCo's newspapers is currently operating under new terms with Cars.com that are similar to the terms included in the new affiliate agreements Cars.com entered into with its former owners upon the closing of the acquisition. At the time of the separation, SpinCo and SpinCo's newspapers will enter into a new affiliation agreement with Cars.com continuing the terms now in place, pursuant to which SpinCo's newspapers will be able to earn advertising revenues and pay affiliate fees to Cars.com. The new affiliation agreement will have a five-year term. However, continuation of the affiliations of SpinCo's newspapers is contingent upon SpinCo's newspapers fulfilling their obligations under the new affiliation agreement, including meeting certain performance standards. If, prior to the end of the five-year term, SpinCo's newspapers fail to meet such performance standards or otherwise fail to fulfill their obligations under the new affiliation agreement, SpinCo's newspapers could cease to earn advertising revenues under their new affiliation agreement with Cars.com. There can also be no assurance that SpinCo's newspapers will be able to renew this new affiliation agreement at the end of the five-year term on similar terms, or at all, and continue to earn the same level of advertising revenues under such affiliation agreement. The terms of the new affiliate agreement will result in lower operating income for SpinCo than was the case prior to Parent's acquisition of the remaining interest in Cars.com. SpinCo's fourth quarter 2014 financial results reflect the economics of the new affiliate agreement with Classified Ventures.

              If SpinCo ceases to earn advertising revenues under the affiliation agreements with CareerBuilder and Cars.com or the amount of such revenues is materially reduced, SpinCo's operating revenues, financial condition and results of operations could be materially and adversely affected.

After the distribution, certain members of management, directors and stockholders will hold stock in both Parent and SpinCo, and as a result may face actual or potential conflicts of interest.

              After the distribution, the management and directors of each of Parent and SpinCo may own both Parent common stock and SpinCo common stock. This ownership overlap could create, or appear to create, potential conflicts of interest when SpinCo management and directors and Parent's management and directors face decisions that could have different implications for SpinCo and Parent. For example, potential conflicts of interest could arise in connection with the resolution of any dispute between SpinCo and Parent regarding the terms of the agreements governing the distribution and SpinCo's relationship with Parent thereafter. These agreements include the separation and distribution agreement, the tax matters agreement, the employee matters agreement, the transition services agreement and any commercial agreements between the parties or their affiliates. Potential conflicts of interest may also arise out of any commercial arrangements that SpinCo or Parent may enter into in the future.

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Fulfilling SpinCo's obligations incidental to being a public company, including with respect to the requirements of and related rules under the Sarbanes-Oxley Act of 2002, will place significant demands on SpinCo's management, administrative and operational resources, including accounting and information technology resources.

              SpinCo's financial results previously were included in the consolidated results of Parent, and its reporting and control systems were appropriate for those of subsidiaries of a public company. Prior to the distribution, SpinCo was not directly subject to reporting and other requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Section 404 of the Sarbanes-Oxley Act of 2002. After the distribution, SpinCo will be subject to such reporting and other requirements, which will require, among other things, annual management assessments of the effectiveness of its internal controls over financial reporting and a report by its independent registered public accounting firm addressing these assessments. These and other obligations will place significant demands on SpinCo's management, administrative and operational resources, including accounting and information technology resources.

Risks Related to SpinCo Common Stock

SpinCo cannot be certain that an active trading market for its common stock will develop or be sustained after the distribution, and following the distribution, SpinCo's stock price may fluctuate significantly.

              A public market for SpinCo common stock does not currently exist. SpinCo anticipates that on or about the record date for the distribution, trading of shares of its common stock will begin on a "when-issued" basis which will continue through the distribution date. However, SpinCo cannot guarantee that an active trading market will develop or be sustained for its common stock after the distribution. Nor can SpinCo predict the prices at which shares of its common stock may trade after the distribution. Similarly, SpinCo cannot predict the effect of the distribution on the trading prices of its common stock or whether the combined market value of the shares of SpinCo common stock and Parent common stock will be less than, equal to or greater than the market value of Parent common stock prior to the distribution.

              The market price of SpinCo common stock may decline or fluctuate significantly due to a number of factors, some of which may be beyond SpinCo's control, including:

    actual or anticipated fluctuations in SpinCo's operating results;

    declining newspaper print circulation;

    declining operating revenues derived from SpinCo's core business;

    the gain or loss of significant advertisers or other customers;

    the operating and stock price performance of comparable companies;

    changes in SpinCo's stockholder base due to the separation;

    changes in the regulatory and legal environment under which SpinCo operates; and

    market conditions in the newspaper industry, the media industry, the industries of customers and the domestic and worldwide economy as a whole.

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There may be substantial changes in SpinCo's stockholder base.

              Many investors holding Parent common stock may hold that stock because of a decision to invest in a company with Parent's profile. Following the distribution, the shares of SpinCo common stock held by those investors will represent an investment in a publishing company with a different profile. This may not be aligned with a holder's investment strategy and may cause the holder to sell the shares. As a result, SpinCo's stock price may decline or experience volatility as SpinCo's stockholder base changes.

SpinCo cannot guarantee the timing, amount or payment of dividends on its common stock.

              SpinCo plans to initially pay regular cash dividends following the distribution. However, the timing, declaration, amount and payment of future dividends to stockholders will fall within the discretion of SpinCo's board of directors. The board's decisions regarding the payment of dividends will depend on many factors, such as SpinCo's financial condition, earnings, capital requirements, any future debt service obligations, covenants associated with any of SpinCo's future debt service obligations, industry practice, legal requirements, regulatory constraints and other factors that the board deems relevant. For more information, see "Dividend Policy." SpinCo's ability to pay dividends will depend on its ongoing ability to generate cash from operations and on its access to the capital markets.

Your percentage of ownership in SpinCo may be diluted in the future.

              In the future, your percentage ownership in SpinCo may be diluted because of equity awards that SpinCo will be granting to SpinCo's directors, officers and employees or otherwise as a result of equity issuances for acquisitions or capital market transactions. SpinCo's employees will have options to purchase shares of its common stock after the distribution as a result of conversion of their Parent stock options (in whole or in part) to SpinCo stock options. SpinCo anticipates its executive compensation committee will grant additional stock-based awards to its employees after the distribution. Such awards will have a dilutive effect on SpinCo's earnings per share, which could adversely affect the market price of SpinCo common stock. From time to time, SpinCo will issue additional stock-based awards to its employees under SpinCo's employee benefits plans.

              In addition, SpinCo's amended and restated certificate of incorporation will authorize SpinCo to issue, without the approval of SpinCo's stockholders, one or more classes or series of preferred stock that have such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over SpinCo common stock respecting dividends and distributions, as SpinCo's board of directors generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of SpinCo common stock. Similarly, the repurchase or redemption rights or liquidation preferences SpinCo could assign to holders of preferred stock could affect the residual value of the common stock. See "Description of SpinCo's Capital Stock."

SpinCo's amended and restated certificate of incorporation will designate the state courts of the State of Delaware, or, if no state court located in the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by SpinCo's stockholders, which could discourage lawsuits against SpinCo and SpinCo's directors and officers.

              SpinCo's amended and restated certificate of incorporation will provide that unless the board of directors otherwise determines, the state courts of the State of Delaware, or, if no state court located in the state of Delaware has jurisdiction, the federal court for the District of Delaware, will be

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the sole and exclusive forum for any derivative action or proceeding brought on behalf of SpinCo, any action asserting a claim of breach of a fiduciary duty owed by any director or officer of SpinCo to SpinCo or SpinCo's stockholders, creditors or other constituents, any action asserting a claim against SpinCo or any director or officer of SpinCo arising pursuant to any provision of the Delaware General Corporation Law, or the DGCL, or SpinCo's amended and restated certificate of incorporation or bylaws, or any action asserting a claim against SpinCo or any director or officer of SpinCo governed by the internal affairs doctrine. This exclusive forum provision may limit the ability of SpinCo's stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with SpinCo or SpinCo's directors or officers, which may discourage such lawsuits against SpinCo and SpinCo's directors and officers. Alternatively, if a court outside of Delaware were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings described above, SpinCo may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect SpinCo's business, financial condition or results of operations.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

              This information statement and other materials Parent and SpinCo have filed or will file with the SEC contain, or will contain, certain forward-looking statements regarding business strategies, market potential, future financial performance and other matters. 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. The matters discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those projected, anticipated or implied in the forward-looking statements. In particular, information included under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business," "The Separation and Distribution" and other sections of this information statement contain 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 SpinCo 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 SpinCo's control. Except as may be required by law, SpinCo undertakes no obligation to modify or revise any forward-looking statements to reflect new information, events or circumstances occurring after the date of this information statement. Factors, risks, trends and uncertainties that could cause actual results or events to differ materially from those anticipated include the matters described under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in addition to the following other factors, risks, trends and uncertainties:

    competitive pressures in the markets in which SpinCo operates;

    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 SpinCo's 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;

    an inability to adapt to technological changes or grow SpinCo's online 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 costs;

    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;

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    SpinCo's ability to attract and retain 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 SpinCo's ability to raise funds through debt or equity issuances and otherwise affect SpinCo's 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 SpinCo's 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;

    SpinCo's 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.

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THE SEPARATION AND DISTRIBUTION

Overview

              On August 5, 2014, Parent announced that it intends to separate its publishing business from its broadcasting and digital businesses. Parent intends to effect the separation through a pro rata distribution of 98.5% of the common stock of a new entity, SpinCo. SpinCo was formed to hold the assets and liabilities associated with the publishing business.

              On June 8, 2015, the Parent board of directors approved the distribution of 98.5% of the issued and outstanding shares of SpinCo common stock on the basis of one share of SpinCo common stock for every two shares of Parent common stock held as of the close of business on the record date of June 22, 2015, subject to the satisfaction or waiver of the conditions to the distribution as described in this information statement.

              At 12:01 a.m., Eastern Time, on June 29, 2015, the distribution date, each Parent stockholder will receive one share of SpinCo common stock for every two shares of Parent common stock held at the close of business on the record date for the distribution, as described below. Parent stockholders will receive cash in lieu of any fractional shares of SpinCo common stock that they would have received after application of this ratio. Parent's stockholders will not be required to make any payment, surrender or exchange their shares of Parent common stock or take any other action to receive their shares of SpinCo common stock in the distribution. The distribution of SpinCo common stock as described in this information statement is subject to the satisfaction or waiver of certain conditions. For a more detailed description of these conditions, see "Conditions to the Distribution."

Reasons for the Separation

              The Parent board of directors determined that the separation of Parent's publishing business from its broadcasting and digital businesses would be in the best interests of Parent and its stockholders and approved the separation. A wide variety of factors were considered by the Parent board of directors in evaluating the separation. Among other things, the Parent board of directors considered the following potential benefits of the separation:

    Distinct investment identity.  The separation will allow investors to separately value Parent and SpinCo based on their distinct investment identities. SpinCo's publishing business differs from Parent's businesses in several respects, such as the creation and procurement of content, sources of advertising, subscription and other revenue, and channels of distribution to consumers. The separation will enable investors to evaluate the merits, strategy, performance, and future prospects of each company's respective business and to invest in each company separately based on these distinct characteristics. The separation may attract new investors, who may not have properly assessed the value of the publishing business relative to the value it is currently accorded as part of Parent.

    Enhanced strategic and management focus.  The separation will allow SpinCo and Parent to more effectively pursue their distinct operating priorities and strategies and enable management of both companies to focus on their respective unique opportunities for long-term growth and profitability. SpinCo's management will be able to focus exclusively on its publishing business, while the management of Parent will be dedicated to growing its broadcasting and digital businesses.

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    More efficient allocation of capital.  The separation will permit each company to concentrate its financial resources solely on its own operations without having to compete with each other for investment capital. This will provide each company with greater flexibility to invest capital in its businesses at a time and in a manner appropriate for its distinct strategy and business needs and facilitate a more efficient allocation of capital and an appropriate mix of return of capital to stockholders, reinvestment in leading-edge digital products, and value-enhancing M&A opportunities.

    Direct access to capital markets.  The separation will create an independent equity structure that will afford SpinCo direct access to the capital markets and will facilitate SpinCo's ability to effect future acquisitions utilizing SpinCo common stock. As a result, each company will have more flexibility to capitalize on its unique growth opportunities.

    Flexibility to pursue value-enhancing acquisitions.  The separation will provide greater opportunity to grow organically and pursue value-enhancing acquisitions with fewer regulatory obstacles in two consolidating industries.

    Relief from FCC cross-ownership restrictions.  The separation will provide relief from FCC cross-ownership restrictions that currently prevent either Parent's publishing business or broadcasting business from entering certain markets.

    Alignment of incentives with performance objectives.  The separation will facilitate incentive compensation arrangements for employees more directly tied to the performance of the relevant company's business, and enhance employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives.

              Neither SpinCo nor Parent can assure you that, following the separation, any of the benefits described above or otherwise will be realized to the extent anticipated or at all.

              The Parent board of directors also considered a number of potentially unfavorable factors in evaluating the separation, including the potential loss of synergies, dedication of resources to replicate certain technology applications and infrastructure, time and effort required to be dedicated to this transaction by Parent's and SpinCo's management and the potential diversion of their attention away from their respective businesses, increased costs resulting from operating as a separate public entity, one-time costs of the separation, the risk of not realizing the anticipated benefits of the separation and limitations placed upon SpinCo as a result of the tax matters agreement. The Parent board of directors concluded that the potential benefits of the separation significantly outweighed these negative factors.

Formation of Gannett SpinCo, Inc. and Internal Reorganization

              SpinCo was formed as a Delaware corporation on November 21, 2014 for the purpose of holding Parent's publishing business. As part of the plan to separate the publishing business from the remainder of its businesses, pursuant to the separation and distribution agreement, Parent plans to transfer the equity interests of certain entities that operate the publishing business and the assets and liabilities of the publishing business to SpinCo prior to the distribution. Following the distribution, Parent will continue to own Parent's broadcasting and other businesses, including Cars.com and its equity interest in CareerBuilder.

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When and How You Will Receive the Distribution

              With the assistance of Wells Fargo Shareowner Services, Parent expects to distribute 98.5% of SpinCo common stock at 12:01 a.m., Eastern Time, on June 29, 2015, the distribution date, to all holders of outstanding shares of Parent common stock as of the close of business on June 22, 2015, the record date for the distribution. Wells Fargo Shareowner Services, which currently serves as the transfer agent and registrar for Parent's common stock, will serve as the settlement and distribution agent in connection with the distribution and the transfer agent and registrar for SpinCo common stock.

              If you own Parent common stock as of the close of business on the record date for the distribution, SpinCo common stock that you are entitled to receive in the distribution will be issued electronically, as of the distribution date, to you in direct registration form or to your bank or brokerage firm on your behalf. If you are a registered holder, Wells Fargo Shareowner Services will then mail you a direct registration account statement that reflects your shares of SpinCo common stock. If you hold your shares through a bank or brokerage firm, your bank or brokerage firm will credit your account for the shares. Direct registration form refers to a method of recording share ownership when no physical share certificates are issued to stockholders, as is the case in this distribution. If you own Parent common stock through the Parent dividend reinvestment plan, SpinCo shares you receive will be distributed to a new SpinCo dividend reinvestment plan account that will be created for you. If you sell Parent common stock in the "regular-way" market up to and including the distribution date, you will be selling your right to receive shares of SpinCo common stock in the distribution.

              Commencing on or shortly after the distribution date, if you hold physical share certificates that represent your shares of Parent common stock and you are the registered holder of the shares represented by those certificates, the distribution agent will mail to you an account statement that indicates the number of shares of SpinCo common stock that have been registered in book-entry form in your name.

              Most Parent stockholders hold their common stock through a bank or brokerage firm. In such cases, the bank or brokerage firm would be said to hold the shares in "street name" and ownership would be recorded on the bank or brokerage firm's books. If you hold your Parent common stock through a bank or brokerage firm, your bank or brokerage firm will credit your account for SpinCo common stock that you are entitled to receive in the distribution. If you have any questions concerning the mechanics of having shares held in "street name," please contact your bank or brokerage firm.

Transferability of Shares You Receive

              Shares of SpinCo common stock distributed to holders in connection with the distribution will be transferable without registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"), except for shares received by persons who may be deemed to be SpinCo affiliates. Persons who may be deemed to be SpinCo affiliates after the distribution generally include individuals or entities that control, are controlled by or are under common control with SpinCo, which may include certain SpinCo executive officers, directors or principal stockholders. Securities held by SpinCo affiliates will be subject to resale restrictions under the Securities Act. SpinCo affiliates will be permitted to sell shares of SpinCo common stock only pursuant to an effective registration statement or an exemption from the registration requirements of the Securities Act, such as the exemption afforded by Rule 144 under the Securities Act.

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Number of Shares of SpinCo Common Stock You Will Receive

              For every two shares of Parent common stock that you own at the close of business on June 22, 2015, the record date for the distribution, you will receive one share of SpinCo common stock on the distribution date. Parent will not distribute any fractional shares of SpinCo common stock to its stockholders. Instead, if you are a registered holder, Wells Fargo Shareowner Services (which is sometimes referred to herein as the distribution agent) will aggregate fractional shares into whole shares, sell the whole shares in the open market at prevailing market prices and distribute the aggregate cash proceeds (net of discounts and commissions) of the sales pro rata (based on the fractional share such holder would otherwise be entitled to receive) to each holder who otherwise would have been entitled to receive a fractional share in the distribution. The distribution agent, in its sole discretion, without any influence by Parent or SpinCo, will determine when, how, and through which broker-dealer and at what price to sell the whole shares. Any broker-dealer used by the distribution agent will not be an affiliate of either Parent or SpinCo. Wells Fargo Shareowner Services is not an affiliate of either Parent or SpinCo. Neither SpinCo nor Parent will be able to guarantee any minimum sale price in connection with the sale of these shares. Recipients of cash in lieu of fractional shares will not be entitled to any interest on the amounts of payment made in lieu of fractional shares.

              The aggregate net cash proceeds of these sales of fractional shares will be taxable for U.S. federal income tax purposes. See "Material U.S. Federal Income Tax Consequences" for an explanation of the material U.S. federal income tax consequences of the distribution. If you hold physical certificates for Parent common stock and are the registered holder, you will receive a check from the distribution agent in an amount equal to your pro rata share of the aggregate net cash proceeds of the sales. SpinCo estimates that it will take approximately two weeks from the distribution date for the distribution agent to complete the distributions of the aggregate net cash proceeds. If you hold your Parent common stock through a bank or brokerage firm, your bank or brokerage firm will receive, on your behalf, your pro rata share of the aggregate net cash proceeds of the sales and will electronically credit your account for your share of such proceeds.

Treatment of Equity Based Compensation

    Awards Granted Prior to 2015

              Restricted Stock and Restricted Stock Unit Awards.    As of the distribution date, each outstanding time-vesting Parent restricted stock or restricted stock unit award granted prior to 2015 will be converted into an award in respect of both shares of Parent common stock and shares of SpinCo common stock. The number of shares of Parent common stock subject to each award will be the same as the number subject to the award prior to the separation, while the number of shares of SpinCo common stock subject to the award will be determined based on the number of SpinCo shares distributed per Parent share in the separation. The adjusted restricted stock and restricted stock unit awards will be subject to substantially the same terms, vesting conditions and other restrictions that applied to the original Parent restricted stock or restricted stock unit award immediately before the separation.

              Performance Share Awards.    As of the distribution date, each outstanding Parent performance share award granted prior to 2015 will be converted in the same manner as outstanding Parent restricted stock or restricted stock unit award granted prior to 2015, provided that performance goals will be measured following the separation by aggregating both Parent performance and SpinCo performance. The adjusted performance share awards otherwise will be subject to substantially the same terms, vesting conditions and other restrictions that applied to the original Parent restricted stock or restricted stock unit award immediately before the separation.

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              Stock Option Awards.    As of the distribution date, each outstanding Parent stock option award will be converted into an award of options to purchase both shares of Parent common stock and shares of SpinCo common stock. The number of shares and exercise prices of each option award will be adjusted in a manner intended to preserve the aggregate intrinsic value of the original Parent stock option as measured immediately before and immediately after the separation, subject to rounding. The adjusted stock option awards will be subject to substantially the same terms, vesting conditions, post-termination exercise rules, and other restrictions that applied to the original Parent stock option immediately before the separation.

    Awards Granted in 2015

              Restricted Stock Unit Awards Held by Parent Employees and Directors.    As of the distribution date, each outstanding and unvested time-vesting Parent restricted stock unit award granted in 2015 and held by an employee or director who will remain employed by, or a director of, Parent following the separation or a former employee of the Parent business will remain denominated in shares of Parent common stock, provided that the number of shares subject to the award will be adjusted in a manner intended to preserve the aggregate intrinsic value of the original Parent restricted stock unit award as measured immediately before and immediately after the separation, subject to rounding. The adjusted restricted stock unit awards will be subject to substantially the same terms, vesting conditions and other restrictions that applied to the original Parent restricted stock unit award immediately before the separation. A portion of the time-vesting Parent restricted stock unit awards granted in 2015 to directors may be vested but not yet settled as of the distribution date. Any such restricted stock units will be treated in the same manner as restricted stock units granted prior to 2015.

              Restricted Stock Unit Awards Held by SpinCo Employees and Directors.    As of the distribution date, each outstanding and unvested time-vesting Parent restricted stock unit award granted in 2015 and held by an employee or director who will be employed by, or a director of, SpinCo following the separation or a former employee of the SpinCo business will be converted into an award denominated in shares of SpinCo common stock, with the number of shares subject to the award to be adjusted in a manner intended to preserve the aggregate intrinsic value of the original Parent restricted stock unit award as measured immediately before and immediately after the separation, subject to rounding. The adjusted restricted stock unit awards will be subject to substantially the same terms, vesting conditions and other restrictions that applied to the original Parent restricted stock unit award immediately before the separation. A portion of the time-vesting Parent restricted stock unit awards granted in 2015 to directors may be vested but not yet settled as of the distribution date. Any such restricted stock units will be treated in the same manner as restricted stock units granted prior to 2015.

              Performance Share Awards Held by Parent Employees.    As of the distribution date, each outstanding Parent performance share award granted in 2015 and held by an employee who will remain employed by Parent following the separation or a former employee of the Parent business will be converted in the same manner as outstanding Parent restricted stock unit awards granted in 2015 and held by an employee who will remain employed by Parent following the separation. Performance goals applicable to such awards will be adjusted to reflect the separation, with performance prior to the separation based on the performance of Parent prior to the separation and performance following the separation based on the performance of Parent following the separation, and with relative performance for the full period compared to a comparator group tailored to the business of Parent following the separation. The adjusted performance share awards otherwise will be subject to substantially the same terms, vesting conditions and other restrictions that applied to the original Parent performance share award immediately before the separation.

              Performance Share Awards Held by SpinCo Employees.    As of the distribution date, each outstanding Parent performance share award granted in 2015 and held by an employee who will be

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employed by SpinCo following the separation or a former employee of the SpinCo business will be converted in the same manner as outstanding Parent restricted stock unit awards granted in 2015 and held by an employee who will be employed by SpinCo following the separation. Performance goals applicable to such awards will be adjusted to reflect the separation, with performance prior to the separation based on the performance of Parent prior to the separation and performance following the separation based on the performance of SpinCo following the separation, and with relative performance for the full period compared to a comparator group tailored to the business of SpinCo following the separation. The adjusted performance share awards otherwise will be subject to substantially the same terms, vesting conditions and other restrictions that applied to the original Parent performance share award immediately before the separation.

Treatment of 401(k) Shares

              Parent common stock held in Parent's 401(k) plans will be treated in the same manner in the distribution as outstanding Parent common stock.

Results of the Distribution

              After the distribution, SpinCo will be an independent, publicly traded company. The actual number of shares to be distributed will be determined at the close of business on June 22, 2015, the record date for the distribution, and will reflect any exercise of Parent options between the date the Parent board of directors declares the distribution and the record date for the distribution. The distribution will not affect the number of outstanding Parent common stock or any rights of Parent stockholders. Parent will not distribute any fractional shares of SpinCo common stock.

              SpinCo will enter into a separation agreement and other related agreements with Parent before the distribution to effect the separation and provide a framework for SpinCo's relationship with Parent after the separation. These agreements will provide for the allocation between Parent and SpinCo of Parent's assets, liabilities and obligations (including its investments, property, employee benefits and tax-related assets and liabilities) attributable to periods prior to SpinCo's separation from Parent and will govern the relationship between Parent and SpinCo after the separation. For a more detailed description of these agreements, see "Certain Relationships and Related Person Transactions."

Market for SpinCo Common Stock

              There is currently no public trading market for SpinCo common stock. SpinCo expects to have its common stock approved to be listed on the New York Stock Exchange under Parent's current symbol "GCI." SpinCo has not and will not set the initial price of its common stock. The initial price will be established by the public markets.

              SpinCo cannot predict the price at which its common stock will trade after the distribution. In fact, the combined trading prices, after the distribution, of the shares of SpinCo common stock that each Parent stockholder will receive in the distribution and Parent common stock held at the record date for the distribution may not equal the "regular-way" trading price of Parent common stock immediately prior to the distribution. The price at which SpinCo common stock trades may fluctuate significantly, particularly until an orderly public market develops. Trading prices for SpinCo common stock will be determined in the public markets and may be influenced by many factors. See "Risk Factors—Risks Related to SpinCo Common Stock."

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Trading Between the Record Date and Distribution Date

              Beginning on or about the record date for the distribution and continuing up to and including the distribution date, Parent expects that there will be two markets in Parent common stock: a "regular-way" market and an "ex-distribution" market. Parent common stock that trades on the "regular-way" market will trade with an entitlement to SpinCo common stock distributed pursuant to the separation. Parent common stock that trades on the "ex-distribution" market will trade without an entitlement to SpinCo common stock distributed pursuant to the distribution. Therefore, if you sell Parent common stock in the "regular-way" market up to and including the distribution date, you will be selling your right to receive SpinCo common stock in the distribution. If you own Parent common stock at the close of business on the record date and sell that stock on the "ex-distribution" market up to and including the distribution date, you will receive the shares of SpinCo common stock that you are entitled to receive pursuant to your ownership as of the record date of Parent common stock.

              Furthermore, beginning on or about the record date for the distribution and continuing up to and including the distribution date, SpinCo expects that there will be a "when-issued" market in its common stock. "When-issued" trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. The "when-issued" trading market will be a market for SpinCo common stock that will be distributed to holders of Parent common stock on the distribution date. If you owned Parent common stock at the close of business on the record date for the distribution, you would be entitled to SpinCo common stock distributed pursuant to the distribution. You may trade this entitlement to shares of SpinCo common stock, without Parent common stock you own, on the "when-issued" market, but your transaction will not settle until after the distribution date. On the first trading day following the distribution date, "when-issued" trading with respect to SpinCo common stock will end, and "regular-way" trading will begin.

Conditions to the Distribution

              SpinCo has announced that the distribution will be effective at 12:01 a.m., Eastern time, on June 29, 2015, which is the distribution date, provided that the following conditions shall have been satisfied (or waived by Parent in its sole discretion):

    the transfer of assets and liabilities from Parent to SpinCo shall have been completed in accordance with the separation agreement;

    Parent shall have received a private letter ruling from the IRS with respect to one or more specific requirements for qualification for tax-free treatment under Section 355 of the Code;

    Parent shall have received an opinion from Parent's outside tax counsel to the effect that the requirements for tax-free treatment under Section 355 of the Code will be satisfied;

    an independent appraisal firm acceptable to Parent shall have delivered one or more opinions to the board of directors of Parent at the time or times requested by the board of directors of Parent confirming the solvency and financial viability of Parent before the consummation of the distribution and each of Parent and SpinCo after consummation of the distribution, and such opinions shall be acceptable to Parent in form and substance in Parent's sole discretion and such opinions shall not have been withdrawn or rescinded;

    the SEC shall have declared effective SpinCo's registration statement on Form 10, of which this information statement forms a part, and this information statement shall have been made available to Parent stockholders;

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    all actions and filings necessary or appropriate under applicable U.S. federal, U.S. state or other securities laws shall have been taken and, where applicable, have become effective or been accepted by the applicable governmental authority;

    the transaction agreements relating to the separation shall have been duly executed and delivered by the parties;

    no order, injunction, or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the separation, distribution or any of the related transactions shall be in effect;

    the shares of SpinCo common stock to be distributed shall have been approved for listing on the NYSE, subject to official notice of distribution; and

    no event or development shall have occurred or exist that, in the judgment of Parent's board of directors, in its sole and absolute discretion, makes it inadvisable to effect the separation, the distribution and other related transactions.

              Parent cannot assure you that any or all of these conditions will be met and will have sole discretion to waive any of the conditions to the distribution. In addition, Parent will have the sole and absolute discretion to determine (and change) the terms of, and whether to proceed with, the distribution and, to the extent it determines to so proceed, to determine the record date for the distribution and the distribution date and the distribution ratio. Parent may rescind or delay its declaration of the distribution even after the record date for the distribution. Parent does not intend to notify its stockholders of any modifications to the terms of the separation and distribution that, in the judgment of its board of directors, are not material. For example, the Parent board of directors might consider material such matters as significant changes to the distribution ratio, the assets to be contributed or the liabilities to be assumed in the separation. To the extent that the Parent board of directors determines that any modifications by Parent materially change the material terms of the separation and distribution, Parent will notify Parent stockholders in a manner reasonably calculated to inform them about the modification as may be required by law, by, for example, publishing a press release, filing a current report on Form 8-K, or circulating a supplement to this information statement.

Regulatory Approval

              Apart from the registration under United States federal securities laws of SpinCo common stock to be distributed in the distribution and related stock exchange listing requirements, SpinCo does not believe that any other material governmental or regulatory filings or approvals will be necessary to consummate the distribution. The distribution will not affect the ownership or control of Parent's television stations or its television licensee subsidiaries; consequently, FCC approval will not be required in connection with the distribution with respect to any of the television station licenses. FCC consent will be required with respect to the transfer to SpinCo of certain private business non-broadcast radio licenses associated with newspaper operations.

No Appraisal Rights

              Under the DGCL, Parent stockholders will not have appraisal rights in connection with the distribution.

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DIVIDEND POLICY

              SpinCo will begin virtually debt-free, which will provide SpinCo with the capacity to deliver strong dividends, support a share repurchase program and to continue to invest in the business through organic growth as well as potential acquisitions. SpinCo expects to initially pay a regular cash dividend of $0.64 per share annually.

              The timing, declaration, amount of and payment of any dividends following the separation by SpinCo is within the discretion of its board of directors and will depend upon many factors, including SpinCo's financial condition, earnings, capital requirements of its operating subsidiaries, any future debt service obligations, covenants associated with any of SpinCo's future debt service obligations, legal requirements, regulatory constraints, industry practice, ability to gain access to capital markets, and other factors deemed relevant by its board of directors.

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CAPITALIZATION

              The following table sets forth SpinCo's capitalization as of March 29, 2015, on a historical basis and on a pro forma basis to give effect to the pro forma adjustments included in SpinCo's unaudited pro forma combined financial information. The information below is not necessarily indicative of what SpinCo's capitalization would have been had the separation, distribution and related transactions been completed as of March 29, 2015. In addition, it is not indicative of SpinCo's future capitalization. This table should be read in conjunction with "Unaudited Pro Forma Combined Financial Statements," "Selected Historical Combined Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and SpinCo's Combined Financial Statements and notes thereto included in the "Index to Financial Statements" section of this information statement.

 
  As of Mar. 29, 2015  
 
  Historical
  Pro Forma
 
 
     
In thousands of dollars, except share data              
Cash and cash equivalents(1)   $ 73,540   $ 60,462  
Capitalization:              
Debt:              

Revolving credit facility(2)

  $      

Total debt

         

Equity:

 

 

 

 

 

 

 

Common stock ($0.01 par value per share); 500,000,000 shares authorized, 114,894,442 shares issued and outstanding, pro forma

        1,149  

Additional paid-in capital

        1,667,675  

Parent's investment, net(3)

    1,574,048      

Accumulated other comprehensive loss

    (675,093 )   (648,533 )

Total equity

    898,955     1,020,291  
Total capitalization   $ 898,955   $ 1,020,291  
(1)
At the completion of the separation, it is expected that SpinCo will have cash and cash equivalents in the amount reflected on the SpinCo pro forma balance sheet, less any reduction in captive insurance reserves as a result of payment of claims therefrom after March 29, 2015.
(2)
On or about the date of the separation, SpinCo expects to enter into a revolving credit facility to fund working capital and other liquidity needs and provide letters of credit. SpinCo does not anticipate that any amount will be drawn on the facility as of the date of the proposed spin.
(3)
Reflects the net Parent investment impact as a result of the anticipated post-distribution capital structure. As of the distribution date, Parent's investment, net, in SpinCo will be exchanged to reflect the distribution of SpinCo's common stock to Parent shareholders and to reflect the aggregate par value of SpinCo shares of common stock being distributed in the distribution.

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SELECTED HISTORICAL COMBINED FINANCIAL DATA

              Set forth below are selected historical combined financial data for SpinCo for each of the quarters ended March 29, 2015 and March 30, 2014, and each of the five years ended December 28, 2014, December 29, 2013, December 30, 2012, December 25, 2011 and December 26, 2010. Operating results for any prior period are not necessarily indicative of results to be expected in any future period. We derived the combined statement of income data for the quarters ended March 29, 2015 and March 30, 2014, and years ended December 28, 2014, December 29, 2013 and December 30, 2012, and the combined balance sheet data as of March 29, 2015, December 28, 2014 and December 29, 2013, from the SpinCo historical Combined Financial Statements, which are included elsewhere in this information statement. We derived the combined statement of income data for the fiscal years ended December 25, 2011 and December 26, 2010, and the combined balance sheet data as of December 30, 2012, December 25, 2011 and December 26, 2010 from the financial records of Parent which are not included in this information statement.

              The selected historical combined financial data set forth below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Unaudited Pro Forma Combined Financial Statements," and the historical Combined Financial Statements and the notes thereto included in this information statement. The selected historical combined financial data reflects SpinCo's results as historically operated as a part of Parent, and these results may not be indicative of SpinCo's future performance as a stand-alone company following the distribution. Operating expenses reflect direct expenses and allocations of certain Parent corporate expenses that have been charged to SpinCo based on specific identification or allocated based on use or other methodologies we believe appropriate. Management believes these allocations have been made on a reasonable and appropriate basis under the circumstances. Per share data has not been presented since SpinCo's business was wholly-owned by Parent during the periods presented.

In millions of dollars
  As of and for the period ended
 
 
 
Pro
Forma
Mar. 29,
2015

  Mar. 29,
2015

  Mar. 30,
2014

 
Pro
Forma
Dec. 28,
2014

  Dec. 28,
2014

  Dec. 29,
2013

  Dec. 30,
2012

  Dec. 25,
2011

  Dec. 26,
2010

 
Selected Statement of Income Information:     (unaudited)     (unaudited)     (unaudited)     (unaudited)                       (unaudited)     (unaudited)  
Net operating revenues                                                        

Advertising

  $ 397   $ 397   $ 452   $ 1,840   $ 1,840   $ 1,971   $ 2,124   $ 2,274   $ 2,475  

Circulation

  $ 271   $ 271   $ 280   $ 1,110   $ 1,110   $ 1,117   $ 1,103   $ 1,050   $ 1,073  

Other

  $ 49   $ 49   $ 57   $ 222   $ 222   $ 236   $ 242   $ 245   $ 247  
Total operating revenue(1)   $ 717   $ 717   $ 789   $ 3,172   $ 3,172   $ 3,325   $ 3,470   $ 3,569   $ 3,795  
Operating income   $ 30   $ 30   $ 49   $ 261   $ 262   $ 325   $ 331   $ 438   $ 577  
Net income from continuing operations   $ 33   $ 33   $ 41   $ 210   $ 211   $ 274   $ 277   $ 334   $ 431  

Selected Balance Sheet Information:

 

 

(unaudited)

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 
Cash and cash equivalents   $ 60   $ 74               $ 72   $ 79   $ 134   $ 107   $ 101  
Total assets   $ 2,291   $ 2,287               $ 2,384   $ 2,495   $ 2,840   $ 2,910   $ 3,049  
(1)
Total may not sum due to rounding.

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UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

              The following unaudited pro forma combined financial statements consist of the unaudited pro forma combined statements of income for the year ended December 28, 2014 and the quarter ended March 29, 2015 and an unaudited pro forma condensed combined balance sheet as of March 29, 2015. These unaudited pro forma combined statements were derived from SpinCo's historical Combined Financial Statements included elsewhere in this information statement. The pro forma adjustments give effect to the distribution and the related transactions, as described in the notes to the unaudited pro forma combined financial statements. The unaudited pro forma combined financial statements of income for the year ended December 28, 2014 and the quarter ended March 29, 2015 give effect to the distribution as if it had occurred on December 30, 2013, the first day of fiscal 2014. The unaudited pro forma condensed combined balance sheet gives effect to the distribution as if it had occurred on March 29, 2015, our latest balance sheet date.

              The unaudited pro forma combined financial statements include certain adjustments that are necessary to present fairly SpinCo's unaudited pro forma combined statements of income and unaudited pro forma condensed combined balance sheet as of and for the periods indicated. The pro forma adjustments give effect to events that are (i) directly attributable to the distribution transactions, (ii) factually supportable, and (iii) with respect to the unaudited pro forma combined statements of income, expected to have a continuing impact on SpinCo and are based on assumptions that management believes are reasonable given the information currently available.

              The unaudited pro forma combined financial statements give effect to the following:

    The transfer to us from Parent and Parent affiliates of certain assets that were not included in the historical Combined Financial Statements including certain information technology assets and certain plant, property and equipment, and the transfer to Parent and Parent affiliates from us of certain property, plant and equipment and the net settlement of cash between Parent and us pursuant to the separation and distribution agreement;

    The retention by Parent of certain self-insurance liabilities and related cash reserves held to satisfy such claims that were included in the historical Combined Financial Statements;

    The anticipated post-distribution capital structure;

    The tax matters agreement with Parent that provides which company is responsible for tax liabilities prior to the distribution, and the identification of net deferred tax assets between Parent and us based on how the underlying assets and liabilities will be reported on our respective Combined Financial Statements and separate income tax returns; and

    The retention by Parent of certain liabilities of our principal shared defined benefit plan that were included in our historical Combined Financial Statements.

              The unaudited pro forma combined financial statements are subject to the assumptions and adjustments described in the accompanying notes. These unaudited pro forma combined financial statements are subject to change as Parent and SpinCo finalize the terms of the separation and distribution agreement and other agreements and transactions related to the distribution.

              In connection with the distribution, SpinCo expects to enter into a transition services agreement with Parent, pursuant to which Parent and SpinCo will provide to each other certain specified services on a transitional basis, including various information technology, financial and

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administrative services. The charges for the transition services generally are expected to allow the providing company 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. The adjustment for the transition services agreement is not expected to have a material impact on pro forma net income for the quarter ended March 29, 2015 or for the year ended December 28, 2014, since the historical combined statements of operations for those periods already reflect allocations of costs for these services which are not expected to differ materially under the transition services agreement.

              As a result of Parent acquiring the remaining 73% interest in Classified Ventures (subsequently renamed "Cars.com") on October 1, 2014, SpinCo commenced operating under new affiliate terms with Cars.com. The terms of this new agreement resulted in lower operating income of approximately $6.1 million in the fourth quarter of 2014 and $6.3 million in the first quarter of 2015 than would have been realized under the former affiliate terms. The results for the year ended December 28, 2014 presented herein do not reflect any estimates of the impact on revenues or affiliate fees for the period of time before the October 1, 2014 effective date as a result of the modified terms in the agreement because projected amounts would be based on estimates and not factually supportable.

              Parent is currently party to an affiliation agreement with CareerBuilder pursuant to which SpinCo's newspapers earn advertising revenues and pay affiliate fees. Pursuant to the terms of the CareerBuilder limited liability company agreement, if Parent (together with its affiliates) directly or indirectly retains at least a 1% voting and economic interest in SpinCo's newspapers, which it intends to do, Parent has the right to enter into a modified affiliation agreement that would apply to SpinCo's newspapers for up to five years. SpinCo expects to enter into a modified affiliation agreement at the time of the separation that would apply to its newspapers for up to five years. While this agreement would not be as favorable to SpinCo's newspapers as Parent's existing affiliation agreement, we have no history operating under such a modified affiliation agreement and, thus, are not able to reasonably predict how such agreement will impact our future revenues and affiliate fees. However, we believe certain revenues earned by us under the modified agreement will decline in the range of $12 million to $16 million annually compared to revenues earned under Parent's existing affiliation agreement. The results for the periods presented herein do not reflect any estimates of the impact on revenues or affiliate fees of a modified affiliation agreement because projected amounts would be based on estimates and not factually supportable.

              These unaudited pro forma combined financial statements do not reflect the acquisition of Texas-New Mexico Newspapers Partnership on June 1, 2015 as this acquisition is not significant. For additional discussion of the acquisition, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of this document.

              No adjustments have been included in the unaudited pro forma combined statements of income for additional annual operating costs. Although expenses reported in our Combined Statements of Income include allocations of certain Parent costs (including corporate costs, shared services and other selling, general and administrative costs that benefit our company), as a stand-alone public company we anticipate incurring additional recurring costs that could be materially different from the

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allocations of Parent costs included within the historical Combined Financial Statements. These additional costs are primarily for the following:

    Additional personnel costs, including salaries, benefits and potential bonuses and/or share-based compensation awards for staff additions to replace support provided by Parent that is not covered by the transition services agreement; and

    Corporate governance costs, including board of director compensation and expenses, audit and other professional services fees, annual report costs, proxy and filing fees and stock exchange fees.

              Certain factors could impact these stand-alone public company costs, including the finalization of our staffing and infrastructure needs.

              The unaudited pro forma combined financial statements have been presented for informational purposes only. The pro forma information is not necessarily indicative of SpinCo's results of operations or financial condition had the distribution and the related transactions been completed on the dates assumed and should not be relied upon as a representation of our future performance.

              The following unaudited pro forma combined financial statements should be read in conjunction with the historical Combined Financial Statements for SpinCo and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in this information statement.

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GANNETT SPINCO, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
For the quarter ended March 29, 2015

In thousands of dollars, except per share amounts

Fiscal year ended   Historical   Pro Forma
Adjustments
  Pro Forma  

Net operating revenues

                   

Advertising

  $ 397,266       $ 397,266  

Circulation

    271,258         271,258  

Other

    48,836         48,836  

Total

    717,360         717,360  

Operating expenses

                   

Cost of sales and operating expenses, exclusive of depreciation

    479,844         479,844  

Selling, general and administrative expenses, exclusive of depreciation

    178,329     (725 )(a)   177,604  

Depreciation

    24,428     995 (a)   25,423  

Amortization of intangible assets

    3,399         3,399  

Facility consolidation and asset impairment charges

    1,549         1,549  

Total

    687,549     270     687,819  

Operating income

    29,811     (270 )   29,541  

Non-operating (expense) income

                   

Equity income in unconsolidated investees, net

    6,307         6,307  

Other non-operating items

    (1,458 )       (1,458 )

Total

    4,849         4,849  

Income before income taxes

    34,660     (270 )   34,390  

Provision for income taxes

    1,413     (64 )(e)   1,349  

Net income

  $ 33,247   $ (206 ) $ 33,041  

Net income per share—basic

    N/A         $ 0.29  

Net income per share—diluted

    N/A         $ 0.28  

Weighted-average shares outstanding—basic

    N/A           115,274 (c)

Weighted-average shares outstanding—diluted

    N/A           117,732 (c)

See notes to unaudited pro forma combined financial statements.

              The pro forma numbers presented in the table above exclude the financial impact of the modified affiliation agreement SpinCo expects to enter into with CareerBuilder. As described more fully in the introduction to these tables above, we cannot reasonably predict the complete financial impact of the modified agreement. However, we believe certain revenues earned by us will decline in the range of $3 million to $4 million per quarter.

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GANNETT SPINCO, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
For the Year Ended December 28, 2014

In thousands of dollars, except per share amounts

Fiscal year ended   Historical   Pro Forma
Adjustments
  Pro Forma  

Net operating revenues

                   

Advertising

  $ 1,840,067   $   $ 1,840,067  

Circulation

    1,109,729         1,109,729  

Other

    222,082         222,082  

Total

    3,171,878         3,171,878  

Operating expenses

                   

Cost of sales and operating expenses, exclusive of depreciation

    1,997,803         1,997,803  

Selling, general and administrative expenses, exclusive of depreciation

    765,465     (2,156 )(a)   763,309  

Depreciation

    97,178     3,238 (a)   100,416  

Amortization of intangible assets

    13,885         13,885  

Facility consolidation and asset impairment charges

    35,216         35,216  

Total

    2,909,547     1,082     2,910,629  

Operating income

    262,331     (1,082 )   261,249  

Non-operating (expense) income

                   

Equity income in unconsolidated investees, net

    15,857         15,857  

Other non-operating items

    77         77  

Total

    15,934         15,934  

Income before income taxes

    278,265     (1,082 )   277,183  

Provision for income taxes

    67,560     (262 )(e)   67,298  

Net income

  $ 210,705   $ (820 ) $ 209,885  

Net income per share—basic

    N/A         $ 1.83  

Net income per share—diluted

    N/A         $ 1.78  

Weighted-average shares outstanding—basic

    N/A           114,869 (c)

Weighted-average shares outstanding—diluted

    N/A           117,720 (c)

See notes to unaudited pro forma combined financial statements.

              The pro forma numbers presented in the table above exclude the financial impact of the modified affiliation agreement SpinCo expects to enter into with CareerBuilder. As described more fully in the introduction to these tables above, we cannot reasonably predict the complete financial impact of the modified agreement. However, we believe certain revenues earned by us will decline in the range of $12 million to $16 million annually. The pro forma numbers above also exclude the financial impact of new affiliate terms with Cars.com prior to October 1, 2014, the effective date of the new terms. The terms of this new agreement resulted in lower operating income of $6.1 million in the fourth quarter of 2014 than would have been realized under the former affiliate terms.

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GANNETT SPINCO, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of March 29, 2015

In thousands of dollars

Assets
  Historical
  Pro Forma
Adjustments

  Pro Forma
 

Current assets

                   

Cash and cash equivalents

  $ 73,540   $ (13,078) (a) $ 60,462  

Trade receivables, less allowance for doubtful receivables

    298,564         298,564  

Other receivables

    14,040     349 (e)   14,389  

Inventories

    41,857         41,857  

Deferred income taxes

    7,323     1,022 (e)   8,345  

Assets held for sale

    23,477         23,477  

Prepaid expenses

    30,650         30,650  

Total current assets

    489,451     (11,707 )   477,744  

Property, plant and equipment

                   

Cost

    2,546,895     28,759 (a)   2,575,654  

Less accumulated depreciation

    (1,651,180 )   (21,519) (a)   (1,672,699 )

Net property, plant and equipment

    895,715     7,240     902,955  

Intangible and other assets

                   

Goodwill

    535,960         535,960  

Indefinite-lived and amortizable intangible assets, less accumulated amortization

    45,705         45,705  

Deferred income taxes

    257,859     (17,467 )(e)   240,392  

Investments and other assets

    62,531     25,533 (e)   88,064  

Total intangible and other assets

    902,055     8,066     910,121  

Total assets

  $ 2,287,221   $ 3,599   $ 2,290,820  

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GANNETT SPINCO, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of March 29, 2015

In thousands of dollars

Liabilities and equity
  Historical
  Pro Forma
Adjustments

  Pro Forma
 

Current liabilities

                   

Trade accounts payable

  $ 110,333       $ 110,333  

Accrued expenses

    180,252     (7,712 )(b)(e)   172,540  

Income taxes

    11,501     (11,208 )(e)   293  

Deferred income

    84,528         84,528  

Total current liabilities

    386,614     (18,920 )   367,694  

Income taxes

    13,248     6,855 (e)   20,103  

Postretirement medical and life insurance liabilities

    90,482         90,482  

Pension liabilities

    739,323     (99,889 )(f)   639,434  

Other noncurrent liabilities

    158,599     (5,783 )(b)   152,816  

Total noncurrent liabilities

    1,001,652     (98,817 )   902,835  

Total liabilities

    1,388,266     (117,737 )   1,270,529  

Commitments and contingent liabilities

                   

Equity

                   

Common stock

        1,149 (d)   1,149  

Additional paid-in capital

        1,667,675 (d)   1,667,675  

Parent's investment, net

    1,574,048     (1,574,048 )(d)    

Accumulated other comprehensive loss

    (675,093 )   26,560 (f)   (648,533 )

Total equity

    898,955     121,336     1,020,291  

Total liabilities and equity

  $ 2,287,221   $ 3,599   $ 2,290,820  

See notes to unaudited pro forma combined financial statements.

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NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

              For further information regarding the historical Combined Financial Statements of SpinCo, refer to the Combined Financial Statements and the notes thereto in this information statement. The unaudited pro forma condensed combined balance sheet as of March 29, 2015 and unaudited pro forma combined statements of income for the quarter ended March 29, 2015 and year ended December 28, 2014, include adjustments related to the following:

              (a)         Reflects adjustments for assets that are to be transferred to SpinCo from Parent and Parent affiliates and assets to be transferred to Parent and Parent affiliates from SpinCo, in connection with the separation. These include a portion of shared information technology assets and the settlement of cash as agreed between Parent and SpinCo. The contributed assets were not included in the historical Combined Financial Statements as these assets were not discretely identifiable to SpinCo. Depreciation on the assets to be transferred to SpinCo was previously charged to SpinCo through allocations from Parent.

              (b)         Reflects the portion of the self-insurance reserves of SpinCo's captive insurance company that relate to, and will be retained by, Parent.

              (c)          The number of SpinCo shares used to compute pro forma basic and diluted earnings per share is based on the number of shares of SpinCo common stock assumed to be outstanding, based on the number of Parent common shares used for determination of basic and diluted earnings per share on December 28, 2014 and March 29, 2015, assuming a distribution ratio of one share of SpinCo common stock for every two shares of Parent common stock outstanding. This calculation may not be indicative of the dilutive effect that will actually result from SpinCo stock-based compensation awards issued in connection with the adjustment of outstanding Parent stock-based compensation awards or the grant of new stock-based compensation awards. The number of dilutive shares of our common stock underlying our stock-based compensation awards issued in connection with the adjustment of outstanding Parent stock-based compensation awards will not be determined until after the distribution date.

              (d)         Reflects the net Parent investment as a result of the anticipated post-distribution capital structure. As of the distribution date, the net parent investment in SpinCo will be exchanged to reflect the distribution of SpinCo's common stock to Parent stockholders and to reflect the par value of 114.9 million outstanding shares of common stock having a par value of $0.01 per share.

              (e)         Reflects certain tax adjustments, primarily related to the tax matters agreement between Parent and us that allocates the pre-spin liability for net income taxes and uncertain tax positions, offset by a receivable from Parent to cover pre-spin income taxes and any amounts ultimately due to the tax authorities for which we are indemnified by Parent. Additional adjustments include an identification of net deferred tax assets between Parent and us to reflect how such future net deductions will be reported on our respective separate income tax returns, and the tax effect of other pro forma adjustments, where appropriate, at a blended statutory tax rate.

              (f)          Reflects the retention by Parent of certain liabilities of our principal shared defined benefit plan that were included in our historical Combined Financial Statements. This adjustment to the net liability would have changed operating expenses by an immaterial amount for the quarter ended March 29, 2015 and the year ended December 28, 2014 and, accordingly, has not been reflected within the unaudited pro forma combined statements of income for either period.

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BUSINESS

Overview

              SpinCo 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. SpinCo's operations are comprised of 100 daily publications in the U.S. and U.K., more than 400 non-daily publications in the U.S., and more than 125 such titles in the U.K. Collectively, SpinCo's U.S. print products reach approximately 9.7 million dedicated U.S. readers every weekday and approximately 10.5 million every Sunday. SpinCo's 82 U.S. daily publications include USA TODAY, which has been a cornerstone of the national news landscape for more than three decades. USA TODAY is currently the nation's number one newspaper in consolidated print and digital circulation, according to the Alliance for Audited Media's September 2014 Publisher's Statement, with total daily circulation of 4.1 million and Sunday circulation of 3.7 million, which includes daily print, digital replica, digital non-replica, and branded editions. In the U.K., Newsquest has a total average readership of approximately 6 million every week. The availability of SpinCo's award-winning content to audiences whenever, wherever and however they choose makes it a go-to information source for consumers and preferred platform for advertisers working with companies of all industries, sizes and locations.

              On June 1, 2015, SpinCo completed the acquisition of the remaining 59.4% interest in the Texas-New Mexico Newspapers Partnership that it did not own from Digital First Media. As a result, SpinCo acquired 11 news organizations in Texas, New Mexico and Pennsylvania which increases its U.S. daily publications to 93.

              SpinCo has a significant digital presence. Every month, approximately 73.5 million unique visitors access USA TODAY content and approximately 30 million unique visitors seek out digital media associated with SpinCo's local publications through desktops, smartphones, and tablets. There have been more than 21 million downloads of USA TODAY's award-winning app on mobile devices and 2 million downloads of apps associated with SpinCo's local publications. Newsquest is a digital leader in the U.K. where its network of web sites attracts nearly 20 million unique visitors monthly.

              SpinCo's comprehensive operations also include commercial printing, newswire, marketing and data services. Certain of SpinCo's businesses have strategic relationships with online businesses of Parent, including CareerBuilder, Cars.com, and G/O Digital, Parent's digital marketing services organization.

              SpinCo generates revenue primarily through advertising and subscriptions to its publications. In addition to USA TODAY, SpinCo's local publications and affiliated products operate through fully integrated shared support, sales, and service platforms. SpinCo's diversified set of multiple revenue streams ensures that the value of its financial, creative and human resources is maximized.

              Local domestic circulation revenue is driven through its All Access Content Subscription Model. All subscriptions include access to content via multiple platforms, including full web, mobile, e-Edition and tablet access, with subscription prices that vary according to the frequency of delivery of the print edition. In addition to the subscription model, single-copy print editions continue to be sold at retail outlets, and account for approximately 15% of daily and 24% of Sunday net paid circulation volume.

              SpinCo's results of operations in recent periods have been impacted by declining revenues that are reflective of general trends in the newspaper industry and soft economic conditions affecting advertising demand, particularly in the retail sector. SpinCo's results also reflect workforce restructuring

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and transformation costs primarily resulting from organizational and operational restructurings at certain of SpinCo's locations as SpinCo works to optimize its resources across its organization.

              SpinCo employs a proven multi-platform approach to advertising, which can be specifically tailored to the individual needs of all levels of advertisers, from small, locally-owned merchants to large, complex businesses. SpinCo's U.S. Community Publishing ("USCP") sales teams work with local small- to medium-sized businesses to structure comprehensive advertising solutions across multiple platforms and products including display advertising, desktop, mobile, tablet and other specialty publications. As more businesses work to interact with consumers online, SpinCo, through its access to G/O Digital, has focused specifically on developing a wide array of leading-edge digital marketing solutions that enable marketers and advertisers to connect with local consumers online through products that drive results. SpinCo has a national advertising sales force focused on the largest national advertisers and accounts, and has relationships with outside agencies that specialize in the sale of national ads. This comprehensive method allows SpinCo to address a much larger market and attract the widest possible set of potential advertising partners.

              SpinCo is headquartered in McLean, VA.

Strategies

              SpinCo is committed to a business strategy that drives returns for shareholders, delights audiences through a robust user experience and engages with consumers to strengthen the brands of advertising partners and drive revenue. Key elements of SpinCo's strategy to achieve these objectives are as follows:

              Continue to improve digital platforms to strengthen local franchises and attract digital-only subscribers. As the publishing industry has evolved and readers increasingly consume content on digital platforms, SpinCo has made significant investments in online and mobile offerings across local markets. SpinCo will continue to develop compelling content and applications that enable its readers to access trusted local news and information that is highly relevant to its local communities. The unparalleled credibility of SpinCo's local media organizations as known and trusted media sources carries over to digital platforms, and differentiates SpinCo's online sources from competing products. SpinCo will also focus on continuing to develop native applications and video content for mobile devices across local markets. This initiative supports the All Access Content Subscription Model, attracting new digital-only accounts that are essential to growing the subscription base in markets with younger demographics, which is a key driver of future revenue growth.

              Expand the integration of national and local content. In 2014 SpinCo launched a pioneering project to enhance its local hometown coverage by leveraging its unique ability to generate and distribute national content. In 35 local markets, SpinCo now includes a local edition of USA TODAY content inside the print edition and e-Edition of the local publication. The local USA TODAY edition includes national News, Money and Lifestyle content, while USA TODAY's sports coverage is integrated into local sections. In addition, SpinCo has partnered with several third-party news organizations to incorporate the local edition of USA TODAY into non-SpinCo publications across seven states, and to expand the offerings in the local edition to include weekend Personal Finance and Sunday Life sections. SpinCo intends to continue to expand this project to additional local SpinCo and third-party publications and to continue to develop new opportunities to leverage its outstanding national content to further complement local reporting. Expansion of SpinCo's award-winning content into new publications allows it to reach new audiences and attract new advertisers. These initiatives create diverse new revenue streams for content SpinCo is already producing, creating added-value. SpinCo will continue to actively pursue opportunities to syndicate USA TODAY branded content to other local and national market media operations.

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              Leverage competitive strengths to provide targeted, integrated solutions to advertisers. Proprietary research indicates that local and national advertisers find it difficult to manage the complexity of their multiple marketing investments, with digital solutions being particularly challenging. They are seeking to reach an increasingly elusive audience and struggling to influence attitudes and behavior at each stage of the purchase path. This environment presents a strong opportunity for SpinCo to use its key capabilities to partner with advertisers and provide critical solutions to their most pressing challenges. SpinCo will leverage its many competitive advantages – including its reputation as a trusted partner with local knowledge and complete digital marketing services product offerings – to create tailored media/marketing plans in which the individual elements work in concert to amplify and reinforce the advertiser's message and digital presence. Offering thoughtfully crafted digital strategies that meet the unique needs of local marketers and advertisers make SpinCo a highly attractive advertising and marketing resource. This consultative multi-platform sales approach is customized to meet the specific needs of all levels of advertisers, enabling SpinCo to access a large universe of potential advertising and marketing partners. To further enhance the success of this approach, SpinCo is intensively training its sales and management teams to further their expertise in digital product integration and sales pipeline management. In addition, SpinCo will leverage the natural synergies between its local media organizations and local digital platforms to provide more effective advertising solutions. SpinCo's local content, long-standing customer relationships, highly talented news and advertising sales staff, and comprehensive promotional capabilities are all competitive advantages that SpinCo will use to sell integrated advertising and marketing solutions that meet the changing needs of advertisers. Creating new digital solutions for advertisers on both a local and national basis will put SpinCo in an excellent position to take advantage of the many opportunities resulting from the rapid pace of technological change in the industry.

              Focus on operational excellence. SpinCo will maintain its long-standing reputation for journalistic excellence by employing editors, reporters, producers and designers who are committed to the company's mission to provide trusted news and information and to actively support the people and businesses in the communities SpinCo serves. The highest quality local reporting will continue to make SpinCo publications indispensable in their communities. The goal will be to maintain and further develop deep reader loyalty, strong advertiser relationships and consistent growth. In addition, SpinCo will continue to maximize the efficiency of its print, sales, administrative, and distribution functions to increase profitability. SpinCo will continue to leverage its economies of scale to reduce supply chain costs, provide significant shared editorial content, and streamline its creative and design interactions with advertisers in print and online. As they have in the past, these efforts will continue to drive profitability and strengthen customer relationships.

              Supplement organic growth with selective acquisitions. SpinCo will be well-positioned to pursue value-enhancing investments and acquisitions with fewer regulatory constraints than it has currently – and will be both opportunistic and disciplined in its acquisition strategy. SpinCo will be virtually debt-free upon completion of the distribution, and its balance sheet and cash flow generation will be strong in comparison to its peers, providing it with the financial flexibility to pursue opportunities arising in a consolidating industry. SpinCo is a strong operator, and its strengths in information gathering and reporting, coupled with its valuable integrated content sharing, advertising, sales and administrative platforms, will help drive innovative approaches to revenue generation as well as efficiency gains in acquired properties.

              Maintain a strong, flexible balance sheet. Through proactive cost management and appropriate financial policies, SpinCo will remain committed to maintaining financial flexibility in order to execute its organic growth strategies and be in position to make accretive acquisitions.

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Strengths

              SpinCo believes it enjoys the benefits of a number of unique talents and assets, many of which have been carefully developed over its long history as an established industry leader. The following strengths support its business strategies:

              Broad footprint in diverse markets. SpinCo is one of the largest and most diverse multi-platform publishers in the United States, with 81 local U.S. daily publications, and over 400 non-daily local publications across 30 states, as well as the country's leading national newspaper brand. Every month approximately 73.5 million unique visitors access USA TODAY content and approximately 30 million unique visitors seek out USCP digital media through desktops, smartphones and tablets. In addition, there have been more than 21 million downloads of USA TODAY's award-winning app on mobile devices and 2 million downloads of USCP apps. Collectively, print products reach approximately 9.7 million dedicated U.S. readers every weekday, and approximately 10.5 million every Sunday. SpinCo's Newsquest platform is a leading regional community news provider in the U.K., with 18 daily paid-for titles, more than 125 weekly print products, magazines and trade publications, and a network of websites including S1, a leading employment website in Scotland, and other digital products. Newsquest also participates in 1XL, which sells digital display advertising to national advertisers across most U.K. regional newspaper websites. In the U.K., Newsquest has a total average readership of approximately 6 million every week. This broad and diverse footprint allows SpinCo to take advantage of economies of scale across various functions, including reporting, production, administration and sales, while mitigating exposure to economic risk in any one region or locality. SpinCo's vast footprint also increases the available reach for advertisers and makes SpinCo's properties very attractive to marketers seeking multi-platform, broad, impactful campaigns as well as smaller-scale, targeted solutions.

              On June 1, 2015, SpinCo completed the acquisition of the remaining 59.4% interest in the Texas-New Mexico Newspapers Partnership that it did not own from Digital First Media. As a result, SpinCo acquired 11 news organizations in Texas, New Mexico and Pennsylvania which increases its U.S. Daily Publication to 93.

              Recognizable national brand. With total daily circulation of 4.1 million, and average cross-platform page views of more than 1.2 billion per month, USA TODAY was again the No. 1 ranked publication in consolidated digital and print circulation, according to the Alliance for Audited Media's September 2014 Publisher's Statement. Since its introduction in 1982, USA TODAY has developed a tremendously recognizable and respected brand that SpinCo leverages across various businesses. For example, SpinCo's USA TODAY Sports Media Group has used the USA TODAY brand name to successfully launch "For the Win" (ftw.usatoday.com) as a unique digital property that provides sports fans with social news and curated analysis. The USA TODAY brand immediately boosts the credibility of any affiliated property, allowing even the most tailored, niche content platforms to increase their audience.

              Unique ability to generate and integrate national and local content. With one of the country's leading national media brands and the largest network of local publications, SpinCo has the unrivaled ability to generate and distribute national content to enhance its ever-important local hometown coverage. Currently, 35 local SpinCo publications and several third-party publications include a local edition of USA TODAY, which includes national News, Money and Lifestyle content on a daily basis, and Personal Finance and Sunday Life sections on weekends. USA TODAY's Sports coverage is integrated into local sports sections. In total, readers in 35 local SpinCo markets and several third-party markets across seven states get on average approximately 70 pages of additional content per week as a result of these integration efforts. Consumer reaction to SpinCo's additional content has been very

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positive, which solidifies the local publications' positions as preferred information sources for readers and attractive platforms for advertisers looking to reach readers on both a local and national scale.

              Integrated and innovative digital platform. Through its All Access Content Subscription Model (which provides content digitally to all subscribers with the option of home delivery) across local markets, SpinCo has a clear commitment to providing consumers with access to the news and information about their local communities that they most want on all the devices and platforms they use. The credibility and deep community roots of SpinCo's local media organizations differentiate SpinCo's content from competing products. The results of this digital effort have been outstanding. USCP's All Access Content Subscription Model has achieved activation rates near 64%, and in certain of the initial markets where the model was introduced, the activation rates approach 80%. The digital platforms (desktop, mobile, tablet) drive growth in readership, particularly with younger demographics and digital advertising revenue opportunities. In 2014, mobile page views increased 114% and mobile visitors increased 184% on a year-over-year basis. SpinCo believes that its commitment to innovative digital products and marketing solutions has solidified it as the leader in digital news and information, positioning it to take advantage of the rapid pace of technological change in an increasingly multiplatform media industry.

              Award-winning journalists dedicated to their local communities. SpinCo's national and local publications have long-standing reputations for journalistic excellence. They employ an exceptionally talented group of writers, editors, reporters, photographers and designers who work to fulfill the company's mission to provide trusted news and information and to actively support the people and businesses in the communities SpinCo serves. SpinCo's publications and content creators play a significant, positive role in their respective communities, both inside and outside the newsroom. In recognition of this excellence, SpinCo publications have been honored with 48 Pulitzer Prizes, both national and regional Edward R. Murrow Awards and Alfred I. duPont-Columbia University Awards, as well as many other prestigious editorial awards.

              Talented and creative management teams. The strategy and content of SpinCo's national and local publications are guided by outstanding leadership at every level of the organization. Recent successful innovations such as the All Access Content Subscription Model and USA TODAY local editions, are examples of the creativity and business innovation that drive strategy at SpinCo. Management at SpinCo and each of its individual publications plans to continue crafting new ways to leverage SpinCo's engaging content, yielding new and expanded revenue streams.

              Cost-effective centralized content management, production, sales and service infrastructure. SpinCo's streamlined operations drive its ability to efficiently deliver innovative content and essential information. In 2011, Gannett Publishing Services ("GPS") was formed to improve the efficiency and reduce the cost associated with the production and distribution of the company's printed products across all divisions in the U.S. GPS directly manages all of the production, consumer sales, service and circulation operations for all of SpinCo's domestic publications, including all community newspapers and USA TODAY. In addition to providing an efficient, cost-effective print platform that has resulted in substantial cost savings and superior operational performance, GPS generates new revenue opportunities by leveraging its existing assets to provide ad production, printing and packing, and distribution services to third parties. SpinCo's digital products also operate on a unified and streamlined production and distribution system. SpinCo's digital platform includes a content management system that provides the connective tissue for all new digital products, enabling sharing of digital content company-wide, breaking news alerts and high-end creation and presentation of new, front-end storytelling designs. Major core product launches and back-end advertising product solutions allow these high performing services to deploy across dozens of community publishing properties, leading to increased user reach and digital news and information engagement. This enhanced audience interaction makes SpinCo's content significantly more attractive to advertising partners.

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              Ongoing market affiliations and shared service agreements. After the separation, SpinCo will maintain ongoing market affiliations with CareerBuilder LLC and Cars.com, as well as permissible shared service agreements with Parent, including G/O Digital, that will enable continued cross-platform advertising and content-sharing opportunities. This will allow for a smooth transition into a standalone company.

              Shareholder-friendly corporate governance. As is Parent's legacy, SpinCo will institute shareholder-friendly corporate governance practices. SpinCo's board of directors will be elected annually, a majority voting standard will apply to uncontested director elections and special meetings will be able to be called by holders of 20% of the outstanding shares, subject to certain requirements to be set forth in SpinCo's organizational documents. Responsible and appropriate corporate governance will ensure that SpinCo's management always keeps shareholder interests top of mind when crafting value-creating strategies at all levels of the organization.

              Deep, long-standing relationships in local business communities. SpinCo's reputation as the primary source of local news and information in many communities continues to make it an attractive advertising outlet for local businesses. SpinCo's advertising sales staff delivers comprehensive, tailored solutions for its customers. Through its consultative approach and wide array of digital marketing solutions, offered through SpinCo's access to Parent's G/O Digital, SpinCo helps small- and medium-sized businesses navigate the increasingly complex and diverse world of digital marketing services. The success of digital marketing solutions is reflected in a 66% increase in G/O Digital's revenue from small and medium-sized business clients in 2014 compared to 2013.

              Virtually debt-free capital structure. SpinCo's virtually unlevered capital structure provides flexibility that will allow its expected strong cash flow to be used for accretive acquisitions, the return of capital to stockholders and investments in leading-edge digital products. Contemporaneous with the separation, SpinCo will enter into a revolving credit facility, with borrowing capacity of up to $500 million, to provide SpinCo with additional flexibility and liquidity.

Audience Research

              As SpinCo's publishing business relentlessly pursues its mission to meet consumers' news and information needs anytime, anywhere and in any form, SpinCo remains focused on an audience aggregation strategy. SpinCo considers the reach and coverage of its products across multiple platforms and measures the frequency with which consumers interact with each SpinCo product to ensure its audiences remain highly engaged.

              Results from a 2014 Scarborough Newspaper Penetration Report indicate that 4 SpinCo local media organizations are ranked among the top 10 local publishing operations in the country for integrated (combined print and online) audience penetration.

              SpinCo has gathered audience aggregation data for 55 SpinCo markets and will continue to add more data in the future. Aggregated audience data allows advertising sales staff to provide detailed information to advertisers about how best to reach their potential customers and the most effective product combination and frequency. This approach enables SpinCo to invest in leading-edge digital products and solutions, which increase its total advertising revenue potential while maximizing advertiser effectiveness.

              In addition to the audience-based initiative, SpinCo continues to measure customer attitudes, behaviors and opinions to better understand customers' digital use patterns and use qualitative research with audiences and advertisers to better determine their needs. In 2014, the USCP research group launched an ongoing consumer satisfaction program in key markets. The initial wave included more than 7,600 interviews with consumers in 12 markets.

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Advertising

              SpinCo has experienced advertising departments that sell retail, classified and national advertising across multiple platforms including print, online, mobile and tablet, as well as niche publications. SpinCo has a national advertising sales force focused on the largest national advertisers and a separate sales organization to support classified employment sales – the Digital Employment Sales Center. SpinCo also has relationships with outside agencies that specialize in the sale of national ads.

              Retail display advertising is associated with local merchants or locally owned businesses. Retail includes regional and national chains – such as department and grocery stores – that sell in the local market.

              National advertising is display advertising principally from advertisers who are promoting national products or brands. Examples are pharmaceuticals, travel, airlines, or packaged goods. Both retail and national ads also include preprints, typically stand-alone multiple page fliers that are inserted in the daily print product.

              Classified advertising includes the major categories of automotive, employment, legal and real estate/rentals. Advertising for classified segments is published in the classified sections, in other sections within the publication, on affiliated digital platforms and in niche magazines that specialize in the segment.

              Proprietary research indicates that local and national advertisers find it challenging to manage the complexity of their marketing investments, particularly digital solutions. They are seeking to reach an increasingly elusive audience and are struggling to influence attitudes and behavior at each stage of the purchase path. To help advertisers solve this problem, a refined approach to media planning was created to present advertisers with targeted, integrated solutions. The planning process leverages SpinCo's considerable advantage in data analysis and secondary research. The result is a tailored media/marketing plan where the individual elements work in concert to amplify and reinforce the advertiser's message.

              In addition, USCP continues to use online reader panels in 18 markets to measure advertising recall and effectiveness, article response, and identify consumer sentiment and trends. The reader panels include more than 30,000 opt-in respondents who have provided valuable feedback on more than 8,100 advertisements and 5,800 news articles. This capability allows sales staff in markets to provide deeper insights and return-on-investment metrics to advertisers.

              SpinCo's consultative multi-media sales approach is tailored to all levels of advertisers, from small, locally owned merchants to large, complex businesses. Along with this sales approach, SpinCo has intense sales and management training programs. Digital product integration, sales pipeline management and a SpinCo five-step consultative sales process continue to be focus areas, with formal training being delivered in all SpinCo markets. Front-line sales managers in all USCP markets participate in intensive training to help them coach their sales executives for top performance.

Online Operations

              In support of the All Access Content Subscription Model, SpinCo has continued to invest in a significant expansion of mobile offerings across local markets, including native applications for iPhone and Android smartphones and iPads and tablet-optimized web sites. The mobile audience at SpinCo's USCP markets continued to grow in 2014, ultimately making up approximately 30% of total page views, with mobile web sites and the native iPhone applications leading the way.

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              Through the All Access Content Subscription Model, SpinCo has made a clear commitment to provide consumers with the content they most want on the devices they use to access news and information about their local communities. Mobile page views increased 114% and mobile visitors increased 184% in 2014 on a year-over-year basis.

              In 2013, SpinCo implemented a social media content management software tool to allow the division's journalists and marketing and customer service teams to more effectively manage multiple social media profiles and significantly increase their responsiveness and engagement with consumers.

              SpinCo continues to enjoy a long-standing relationship of trust in its local business communities. Its advertising sales staff delivers solutions for its customers. SpinCo's digital marketing services provide localized marketing solutions to national and small- to medium-sized businesses, helping them navigate the increasingly complex and diverse world of digital marketing.

              The overriding objective of SpinCo's digital strategy is to provide compelling content that best serves its customers. A key reason customers turn to a SpinCo digital platform is to find local news and information. The credibility of the local media organization, a known and trusted information source, includes its digital platforms (tablet, mobile applications and its web site) and differentiates these digital sources from competing digital products. This allows SpinCo's local media organizations to compete successfully as information providers.

              A second objective in SpinCo's digital business development is to leverage the natural synergies between the local media organizations and local digital platforms. The local content, customer relationships, news and advertising sales staff, and promotional capabilities are all competitive advantages for SpinCo. SpinCo's strategy is to use these advantages to create strong and timely content, sell packaged advertising products that meet the needs of advertisers, operate efficiently and leverage the known and trusted brand of the local media organization.

Circulation

              USCP delivers content in print and online, via mobile devices and tablets. Digital access increased across all publications, driven by the All Access Content Subscription Model. USCP's All Access Content Subscription Model has more than 1.6 million digitally activated subscribers, enabling them easy access to content-rich products. In a trend generally consistent with the domestic publishing industry, print circulation volume declined in 2014.

              EZ Pay, a payment system which automatically deducts subscription payments from customers' credit cards or bank accounts, enhances the subscriber retention rate. At the end of 2014, EZ Pay was used by 63% of all subscribers at SpinCo's USCP sites.

              For USCP, single-copy represents approximately 15% of daily and 24% of Sunday net paid circulation volume.

              The single copy price of USA TODAY at newsstands and vending machines was $2.00 in 2014. Mail subscriptions are available nationwide and abroad, and home, hotel and office delivery is available in many markets. Approximately 82% of its net paid circulation results are from single-copy sales at newsstands, vending machines or provided to hotel guests. The remainder is from home and office delivery, mail, educational and other sales.

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Production and Distribution

              In 2011, GPS was formed to improve the efficiency and reduce the cost associated with the production and distribution of SpinCo's printed products across all divisions in the U.S. GPS directly manages all of the production and circulation operations for all of SpinCo's domestic publishing operations including all community newspapers and USA TODAY.

              GPS leverages SpinCo's existing assets, including employee talent and experience, physical plants and equipment, and its vast national and local distribution networks. GPS is responsible for imaging, advertising production, internal and external printing and packaging, internal and external distribution, consumer sales, customer service and direct marketing services.

              The SpinCo Imaging and Ad Design Centers ("GIADC"), which are utilized for commercial imaging and advertising production, serve 81 publishing properties, including USA TODAY and all USCP dailies with the exception of Guam and complete special projects for other internal businesses. GIADC is utilized for commercial imaging and/or advertising production by 44 external customers. In 2014, SpinCo completed the centralization of its page-release process into the GIADC centers, resulting in standardization and efficiencies. The GIADC now handles the step between the creation of the printed pages at SpinCo's five regional Design Studios and the production at both internal and external plants.

              Almost all USCP and USA TODAY employees utilize a common content management system. The common content management system enables the communication and collaboration needed to build strong design remotely. The studios are operationally efficient while enhancing design in company-wide publications.

              Newsquest operates its publishing activities around regional centers to maximize the use of management, finance, printing and personnel resources. This enables the group to offer readers and advertisers a range of attractive products across the market. The clustering of titles and, usually, the publication of a free print product alongside a paid-for print product, allows cross-selling of advertising serving the same or contiguous markets, satisfying the needs of its advertisers and audiences.

              Newsquest produces free and paid-for print products with quality local editorial content. Newsquest also distributes advertising leaflets in the communities it serves. Most of Newsquest's paid-for distribution is outsourced to wholesalers, although direct delivery is employed as well to maximize circulation sales opportunities.

Publishing Partnerships

              SpinCo owned a 19.49% interest in California Newspapers Partnership, which includes 19 daily California newspapers and a 40.64% interest in Texas-New Mexico Newspapers Partnership, which includes seven daily newspapers in Texas and New Mexico and four newspapers in Pennsylvania. SpinCo has a 13.5% interest in Ponderay Newsprint Company in the state of Washington and a 50% partnership interest in TNI Partners, which provides service to a non-SpinCo publication in Tucson, AZ.

              In connection with our growth strategy, on June 1, 2015, SpinCo completed the acquisition of the remaining 59.36% interest in the Texas-New Mexico Newspapers Partnership that it did not own from Digital First Media. SpinCo completed the acquisition through the assignment of its 19.49% interest in the California Newspapers Partnership and additional cash consideration. As a result, SpinCo will own 100% of the Texas-New Mexico Newspapers Partnership and will no longer have any ownership interest in California Newspapers Partnership. Through the transaction, SpinCo acquired

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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).

Competition

              SpinCo's publishing operations and affiliated digital platforms compete with other media and digital ventures for advertising. Publishing operations also compete for circulation and readership against other professional news and information operations and amateur content creators. Very few of SpinCo's publishing operations have daily competitors that are published in the same city. Most of SpinCo's print products compete with other print products published in suburban areas, nearby cities and towns, free-distribution and paid-advertising publications (such as weeklies), and other media, including magazines, television, direct mail, cable television, radio, outdoor advertising, directories, e-mail marketing, web sites and mobile-device platforms. Newsquest's publishing operations are in competitive markets. Their principal competitors include other regional and national newspaper and magazine publishers, other advertising media such as broadcast and billboard, Internet-based news and other information and communication businesses.

              The rate of development of opportunities in, and competition from, digital media, including web site, tablet and mobile products, is increasing. Through internal development, content distribution programs, acquisitions and partnerships, SpinCo's efforts to explore new opportunities in the news, information and communications business and in audience generation will keep expanding.

              SpinCo continues to seek more effective ways to engage with its local communities using all available media platforms and tools.

Environmental Regulation

              SpinCo is committed to protecting the environment. SpinCo's goal is to ensure its facilities comply with federal, state, local and foreign environmental laws and to incorporate appropriate environmental practices and standards in its operations. SpinCo is one of the industry leaders in the use of recycled newsprint, increasing its purchase of newsprint containing recycled content from 42,000 metric tons in 1989 to 138,980 metric tons in 2014. During 2014, 37% of SpinCo's domestic newsprint purchases contained recycled content, with an average recycled content of 45%.

              SpinCo's operations use inks, solvents and fuels. The use, management and disposal of these substances are sometimes regulated by environmental agencies. SpinCo retains a corporate environmental consultant who, along with internal and outside counsel, oversees regulatory compliance and preventive measures. Some of SpinCo's subsidiaries have been included among the potentially responsible parties in connection with sites that have been identified as possibly requiring environmental remediation.

Raw Materials

              Newsprint, which is the basic raw material used in print publication, has been and may continue to be subject to significant price changes from time to time. During 2014, SpinCo's total newsprint consumption was 377,467 metric tons, including consumption by USA TODAY, tonnage at non-SpinCo print sites and Newsquest. Newsprint consumption was 7% less than in 2013. SpinCo purchases newsprint from 15 domestic and global suppliers.

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              SpinCo continues to moderate newsprint consumption and expense through press web-width reductions and the use of lighter basis weight paper. SpinCo believes that available sources of newsprint, together with present inventories, will continue to be adequate to supply the needs of its publishing operations.

Joint Operating Agencies

              SpinCo's publishing subsidiary in Detroit participates in a joint operating agency ("JOA"). The JOA performs the production, sales and distribution functions for the subsidiary and another publishing company under a joint operating agreement. Operating results for the Detroit JOA are fully consolidated along with a charge for the minority partner's share of profits.

Employees

              SpinCo expects to employ approximately 19,600 persons as of the distribution date. Approximately 13% of those employed by SpinCo and its subsidiaries in the U.S. are represented by labor unions. They are represented by 59 local bargaining units, most of which are affiliated with one of six international unions under collective bargaining agreements. These agreements conform generally with the pattern of labor agreements in the publishing industry. SpinCo does not engage in industry-wide or company-wide bargaining. SpinCo's U.K. subsidiaries bargain with two unions over working practices, wages and health and safety issues only.

Legal Proceedings

              SpinCo and a number of its subsidiaries are defendants in judicial and administrative proceedings involving matters incidental to their business. SpinCo does not believe that any material liability will be imposed as a result of these matters.

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Table of Contents

Daily Local Media Organizations and Affiliated Digital Platforms

 
   
   
  Average 2014 Circulation - Print
and Digital Replica and Non-Replica
   
 
  State
  Territory

   
  Local media organization/web site
   
 
  City
  Morning
  Afternoon
  Sunday
  Founded
 

Alabama

  Montgomery   Montgomery Advertiser
www.montgomeryadvertiser.com

 
25,555     30,918   1829  

Arizona

  Phoenix   The Arizona Republic
www.azcentral.com
    232,502           487,441     1890  

Arkansas

  Mountain Home   The Baxter Bulletin
www.baxterbulletin.com

 
8,423       1901  

California

  Palm Springs   The Desert Sun
www.mydesert.com
    33,080           37,248     1927  

  Salinas   The Salinas Californian
www.thecalifornian.com
    7,368                 1871  

  Visalia   Visalia Times-Delta/Tulare
Advance-Register
www.visaliatimesdelta.com
www.tulareadvanceregister.com
    15,492                 1859  

Colorado

  Fort Collins   Fort Collins Coloradoan
www.coloradoan.com

 
19,952     25,118   1873  

Delaware

  Wilmington   The News Journal
www.delawareonline.com
    71,934           104,550     1871  

Florida

  Brevard County   FLORIDA TODAY
www.floridatoday.com

 
47,656     81,283   1966  

  Fort Myers   The News-Press
www.news-press.com

 
50,130     71,310   1884  

  Pensacola   Pensacola News Journal
www.pnj.com

 
31,687     44,720   1889  

  Tallahassee   Tallahassee Democrat
www.tallahassee.com

 
29,652     42,100   1905  

Guam

  Hagatna   Pacific Daily News
www.guampdn.com
    13,281           12,286     1944  

Indiana

  Indianapolis   The Indianapolis Star
www.indystar.com

 
137,129     265,112   1903  

  Lafayette   Journal and Courier
www.jconline.com

 
22,541     30,253   1829  

  Muncie   The Star Press
www.thestarpress.com

 
20,422     26,051   1899  

  Richmond   Palladium-Item
www.pal-item.com

 
9,616     14,194   1831  

Iowa

  Des Moines   The Des Moines Register
www.desmoinesregister.com
    86,773           173,001     1849  

  Iowa City   Iowa City Press-Citizen
www.press-citizen.com
    10,079                 1860  

Kentucky

  Louisville   The Courier-Journal
www.courier-journal.com

 
114,719     205,216   1868  

Louisiana

  Alexandria   Alexandria Daily Town Talk
www.thetowntalk.com
    15,350           20,517     1883  

  Lafayette   The Daily Advertiser
www.theadvertiser.com
    21,936           29,609     1865  

  Monroe   The News-Star
www.thenewsstar.com
    21,540           25,937     1890  

  Opelousas   Daily World
www.dailyworld.com
    4,409           5,556     1939  

  Shreveport   The Times
www.shreveporttimes.com
    32,736           49,304     1871  

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Daily Local Media Organizations and Affiliated Digital Platforms (Continued)

 
   
   
  Average 2014 Circulation - Print
and Digital Replica and Non-Replica
   
  State
  Territory

   
  Local media organization/web site
   
  City
  Morning
  Afternoon
  Sunday
  Founded

Maryland

  Salisbury   The Daily Times
www.delmarvanow.com

 
13,752     18,180   1900

Michigan

  Battle Creek   Battle Creek Enquirer
www.battlecreekenquirer.com
    11,663           16,675   1900

  Detroit   Detroit Free Press
www.freep.com
    173,215           867,821   1832

  Lansing   Lansing State Journal
www.lansingstatejournal.com
    35,254           47,815   1855

  Livingston County   Daily Press & Argus
www.livingstondaily.com
    9,222           13,181   1843

  Port Huron   Times Herald
www.thetimesherald.com
    15,050           22,568   1900

Minnesota

  St. Cloud   St. Cloud Times
www.sctimes.com

 
20,392     25,637   1861

Mississippi

  Hattiesburg   Hattiesburg American
www.hattiesburgamerican.com
          7,886     10,663   1897

  Jackson   The Clarion-Ledger
www.clarionledger.com
    46,090           53,774   1837

Missouri

  Springfield   Springfield News-Leader
www.news-leader.com

 
29,206     46,607   1893

Montana

  Great Falls   Great Falls Tribune
www.greatfallstribune.com
    22,195           24,838   1885

Nevada

  Reno   Reno Gazette-Journal
www.rgj.com

 
35,133     55,978   1870

New Jersey

  Asbury Park   Asbury Park Press
www.app.com
    80,722           119,495   1879

  Bridgewater   Courier News
www.mycentraljersey.com
    10,244           13,376   1884

  Cherry Hill   Courier-Post
www.courierpostonline.com
    35,860           47,618   1875

  East Brunswick   Home News Tribune
www.mycentraljersey.com
    20,261           24,360   1879

  Morristown   Daily Record
www.dailyrecord.com
    14,021           16,962   1900

  Vineland   The Daily Journal
www.thedailyjournal.com
    10,834               1864

New Mexico

  Alamogordo   Alamogordo Daily News**
www.alamogordonews.com

 
5,787     5,276   1887
  Carlsbad   Carlsbad Current-Argus**
www.currentargus.com

 
6,173     5,478   1889
  Deming   Deming Headlight
www.demingheadlight.com

 
*     *   1882
  Farmington   The Daily Times in Farmington**
www.daily-times.com

 
16,127     17,881   1890
  Las Cruces   Las Cruces Sun-News**
www.lcsun-news.com

 
23,025     24,186   1881
  Silver City   Silver City Sun-News
www.scsun-news.com

 
*     *   1995

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Daily Local Media Organizations and Affiliated Digital Platforms (Continued)

 
   
   
  Average 2014 Circulation - Print
and Digital Replica and Non-Replica
   
 
  State
  Territory

   
  Local media organization/web site
   
 
  City
  Morning
  Afternoon
  Sunday
  Founded
 

New York

  Binghamton   Press & Sun-Bulletin
www.pressconnects.com
    28,896           38,687     1904  

  Elmira   Star-Gazette
www.stargazette.com
    12,862           19,960     1828  

  Ithaca   The Ithaca Journal
www.theithacajournal.com
    9,405                 1815  

  Poughkeepsie   Poughkeepsie Journal
www.poughkeepsiejournal.com
    21,479           28,847     1785  

  Rochester   Rochester Democrat and Chronicle
www.democratandchronicle.com
    96,444           138,159     1833  

  Westchester County   The Journal News
www.lohud.com
    57,865           74,137     1829  

North Carolina

  Asheville   Asheville Citizen-Times
www.citizen-times.com

 
28,415     40,236   1870  

Ohio

  Bucyrus   Telegraph-Forum
www.bucyrustelegraphforum.com
    3,508                 1923  

  Chillicothe   Chillicothe Gazette
www.chillicothegazette.com
          7,607     9,311     1800  

  Cincinnati   The Cincinnati Enquirer
www.cincinnati.com
    114,021           215,203     1841  

  Coshocton   Coshocton Tribune
www.coshoctontribune.com
          3,528     4,375     1842  

  Fremont   The News-Messenger
www.thenews-messenger.com
          5,179           1856  

  Lancaster   Lancaster Eagle-Gazette
www.lancastereaglegazette.com
          7,462     9,114     1807  

  Mansfield   News Journal
www.mansfieldnewsjournal.com
    16,561           22,969     1885  

  Marion   The Marion Star
www.marionstar.com
    5,855           7,180     1880  

  Newark   The Advocate
www.newarkadvocate.com
          11,405     13,533     1820  

  Port Clinton   News Herald
www.portclintonnewsherald.com
          2,218           1864  

  Zanesville   Times Recorder
www.zanesvilletimesrecorder.com
    10,888           12,684     1852  

Oregon

  Salem   Statesman Journal
www.statesmanjournal.com

 
30,110     36,280   1851  

Pennsylvania

  Chambersburg   Chambersburg Public Opinion**
www.publicopiniononline.com
    15,845           20,515     1866  
    Hanover   Hanover Evening Sun**
www.eveningsun.com
    17,467           21,809     1915  
    Lebanon   Lebanon Daily News**
www.ldnews.com
    19,743           22,415     1872  
    York   York Daily Record**
www.ydr.com
    42,322           64,097     1796  

South Carolina

  Greenville   The Greenville News
www.greenvilleonline.com

 
44,365     93,369   1874  

South Dakota

  Sioux Falls   Argus Leader
www.argusleader.com
    29,300           56,061     1881  

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Daily Local Media Organizations and Affiliated Digital Platforms (Continued)

 
   
   
  Average 2014 Circulation - Print
and Digital Replica and Non-Replica
   
  State
  Territory

   
  Local media organization/web site
   
  City
  Morning
  Afternoon
  Sunday
  Founded

Tennessee

  Clarksville   The Leaf-Chronicle
www.theleafchronicle.com

 
10,716     20,092   1808

  Jackson   The Jackson Sun
www.jacksonsun.com

 
14,025     21,460   1848

  Murfreesboro   The Daily News Journal
www.dnj.com

 
10,264     13,246   1848

  Nashville   The Tennessean
www.tennessean.com

 
93,531     208,357   1812

Texas

  El Paso   El Paso Times**
www.elpasotimes.com
    61,077           72,229   1881

Utah

  St. George   The Spectrum
www.thespectrum.com

 
13,370     15,424   1963

Vermont

  Burlington   The Burlington Free Press
www.burlingtonfreepress.com
    23,477           27,707   1827

Virginia

  McLean   USA TODAY***
www.usatoday.com

 
4,139,380     3,686,797   1982

  Staunton   The Daily News Leader
www.newsleader.com

 
12,217     15,043   1904

Wisconsin

  Appleton   The Post-Crescent
www.postcrescent.com
    34,610           47,236   1853

  Fond du Lac   The Reporter
www.fdlreporter.com
    9,206           11,963   1870

  Green Bay   Green Bay Press-Gazette
www.greenbaypressgazette.com
    38,977           56,968   1915

  Manitowoc   Herald Times Reporter
www.htrnews.com
    9,007           10,633   1898

  Marshfield   Marshfield News-Herald
www.marshfieldnewsherald.com
          7,086         1927

  Oshkosh   Oshkosh Northwestern
www.thenorthwestern.com
    11,634           16,199   1868

  Sheboygan   The Sheboygan Press
www.sheboyganpress.com
    13,162           16,251   1907

  Stevens Point   Stevens Point Journal
www.stevenspointjournal.com
          6,963         1873

      Central Wisconsin Sunday                 14,325    

  Wausau   Wausau Daily Herald
www.wausaudailyherald.com
          13,678     18,230   1903

  Wisconsin Rapids   The Daily Tribune
www.wisconsinrapidstribune.com
          7,168         1914
*
Average circulation is included with Las Cruces.

**
Average circulation for El Paso and York are based on the Alliance for Audited Media (AAM) September 2014 Publisher's Statement. For Alamogordo, Carlsbad, Chambersburg and Hanover average circulation is based on the June 2014 Publisher's Statement. Las Cruces, Farmington and Lebanon average circulation is based on the June 2013 Publisher's Statement.

***
USA TODAY morning and Sunday figure is the average print, digital replica, digital non-replica and branded editions according to the AAM's September 2014 Publisher's Statement.

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Daily Paid-For Local Media Organizations and Affiliated Digital Platforms of Newsquest PLC