Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 24, 2017 | Oct. 27, 2017 | |
Entity Registrant Name | MCCLATCHY CO | |
Entity Central Index Key | 1,056,087 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 24, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Common Class A | ||
Entity Common Stock, Shares Outstanding | 5,241,944 | |
Common Class B | ||
Entity Common Stock, Shares Outstanding | 2,443,191 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2017 | Sep. 25, 2016 | Sep. 24, 2017 | Sep. 25, 2016 | |
REVENUES - NET: | ||||
Advertising | $ 115,331 | $ 133,212 | $ 360,459 | $ 410,368 |
Audience | 87,142 | 91,022 | 268,473 | 272,163 |
Other | 10,131 | 10,467 | 30,004 | 32,383 |
Revenues, total | 212,604 | 234,701 | 658,936 | 714,914 |
OPERATING EXPENSES: | ||||
Compensation | 80,652 | 91,351 | 258,883 | 284,974 |
Newsprint, supplements and printing expenses | 15,075 | 19,320 | 49,379 | 57,917 |
Depreciation and amortization | 19,588 | 20,559 | 59,016 | 69,551 |
Other operating expenses | 83,963 | 97,912 | 268,784 | 298,265 |
Other asset write-downs (see Notes 1 and 2) | 8,715 | 330 | 10,672 | 330 |
Operating expenses, total | 207,993 | 229,472 | 646,734 | 711,037 |
OPERATING INCOME | 4,611 | 5,229 | 12,202 | 3,877 |
NON-OPERATING (EXPENSE) INCOME: | ||||
Interest expense | (19,801) | (20,953) | (60,547) | (62,423) |
Interest income | 121 | 110 | 410 | 318 |
Equity income (loss) in unconsolidated companies, net | (600) | 3,632 | (696) | 10,637 |
Impairments related to equity investments | (1,866) | (171,013) | (892) | |
Gain (loss) on extinguishment of debt, net | (1,831) | (2,700) | 1,535 | |
Retirement benefit expense | (3,328) | (3,694) | (9,983) | (11,082) |
Other - net | 23 | (13) | 106 | 20 |
Non-operating (expense) income, total | (27,282) | (20,918) | (244,423) | (61,887) |
Loss before income taxes | (22,671) | (15,689) | (232,221) | (58,010) |
Income tax (benefit) expense (see Note 1) | 237,805 | (5,885) | 161,276 | (20,731) |
NET LOSS | $ (260,476) | $ (9,804) | $ (393,497) | $ (37,279) |
Basic: | ||||
Net loss per share - basic (in dollars per share) | $ (34.11) | $ (1.30) | $ (51.67) | $ (4.77) |
Diluted: | ||||
Net loss per share - diluted (in dollars per share) | $ (34.11) | $ (1.30) | $ (51.67) | $ (4.77) |
Weighted average number of common shares: | ||||
Basic (in shares) | 7,637 | 7,614 | 7,616 | 7,809 |
Diluted (in shares) | 7,637 | 7,614 | 7,616 | 7,809 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2017 | Sep. 25, 2016 | Sep. 24, 2017 | Sep. 25, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
NET LOSS | $ (260,476) | $ (9,804) | $ (393,497) | $ (37,279) |
Pension and post retirement plans: | ||||
Change in pension and post-retirement benefit plans, net of taxes of of $0, $(1,535), $0 and $(4,604) | 7,712 | 2,303 | 12,853 | 6,907 |
Investment in unconsolidated companies: | ||||
Other comprehensive income (loss), net of taxes of $0, $547, $0 and $625 | 2,697 | (819) | 6,743 | (937) |
Other comprehensive income | 10,409 | 1,484 | 19,596 | 5,970 |
Comprehensive loss | $ (250,067) | $ (8,320) | $ (373,901) | $ (31,309) |
CONSOLIDATED STATEMENTS OF COM4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2017 | Sep. 25, 2016 | Sep. 24, 2017 | Sep. 25, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Unamortized net loss and other components of benefit plans, taxes | $ 0 | $ (1,535) | $ 0 | $ (4,604) |
Other comprehensive loss, taxes | $ 0 | $ 547 | $ 0 | $ 625 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 24, 2017 | Dec. 25, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 84,040 | $ 5,291 |
Trade receivables (net of allowances of $2,776 in 2017 and $3,254 in 2016) | 88,174 | 112,583 |
Other receivables | 10,881 | 11,883 |
Newsprint, ink and other inventories | 9,456 | 13,939 |
Assets held for sale | 13,399 | 9,040 |
Other current assets | 15,728 | 14,809 |
Total current assets | 221,678 | 167,545 |
Property, plant and equipment, net | 262,748 | 297,506 |
Intangible assets: | ||
Identifiable intangibles - net | 254,014 | 298,986 |
Goodwill | 705,174 | 705,174 |
Total intangible assets | 959,188 | 1,004,160 |
Investments and other assets: | ||
Investments in unconsolidated companies | 7,040 | 242,382 |
Deferred income taxes | 60,821 | |
Other assets | 64,454 | 64,340 |
Total investments and other assets | 71,494 | 367,543 |
TOTAL ASSETS | 1,515,108 | 1,836,754 |
Current liabilities: | ||
Current portion of long-term debt | 16,749 | |
Accounts payable | 32,821 | 36,822 |
Accrued pension liabilities | 8,647 | 8,647 |
Accrued compensation | 22,417 | 25,577 |
Income taxes payable | 5,034 | 7,930 |
Unearned revenue | 64,667 | 64,728 |
Accrued interest | 14,695 | 8,602 |
Other accrued liabilities | 21,010 | 20,994 |
Total current liabilities | 169,291 | 190,049 |
Non-current liabilities : | ||
Long-term debt | 780,706 | 829,415 |
Deferred income taxes | 92,904 | |
Pension and postretirement obligations | 594,015 | 604,165 |
Financing obligations | 92,034 | 51,616 |
Other long-term obligations | 44,814 | 47,596 |
Total non-current liabilities | 1,604,473 | 1,532,792 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Additional paid-in capital | 2,214,885 | 2,213,098 |
Accumulated deficit | (2,031,236) | (1,637,739) |
Treasury stock at cost, 46,774 shares in 2017 and 34 shares in 2016 | (463) | (6) |
Accumulated other comprehensive loss | (441,919) | (461,515) |
Total stockholders' equity | (258,656) | 113,913 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 1,515,108 | 1,836,754 |
Common Class A | ||
Stockholders' equity: | ||
Common stock | 53 | 51 |
Common Class B | ||
Stockholders' equity: | ||
Common stock | $ 24 | $ 24 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 24, 2017 | Dec. 25, 2016 |
Trade receivables, allowance | $ 2,776 | $ 3,254 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Treasury stock, shares | 46,774 | 34 |
Common Class A | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 5,252,718 | 5,132,417 |
Common Class B | ||
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 2,443,191 | 2,443,191 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 24, 2017 | Sep. 25, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (393,497) | $ (37,279) |
Reconciliation to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 59,016 | 69,551 |
Gains on disposal of property and equipment (excluding other asset write-downs) | (10,269) | (684) |
Retirement benefit expense | 9,983 | 11,082 |
Stock-based compensation expense | 1,786 | 2,105 |
Deferred income taxes | 153,725 | |
Equity (income) loss in unconsolidated companies | 696 | (10,637) |
Impairments related to equity investments | 171,013 | 892 |
(Gain) loss on extinguishment of debt, net | 2,700 | (1,535) |
Other asset write-downs | 10,672 | 330 |
Other | (4,823) | (4,723) |
Changes in certain assets and liabilities: | ||
Trade receivables | 24,409 | 41,459 |
Inventories | 2,526 | 2,185 |
Other assets | (662) | 2,671 |
Accounts payable | (4,001) | (9,050) |
Accrued compensation | (3,160) | (2,658) |
Income taxes | (2,304) | (25,728) |
Accrued interest | 6,093 | 7,311 |
Other liabilities | (5,464) | 15,961 |
Net cash provided by operating activities | 18,439 | 61,253 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (7,378) | (10,541) |
Proceeds from sale of property, plant and equipment and other | 22,656 | 3,067 |
Distributions from equity investments | 7,318 | |
Contributions to equity investments | (2,698) | (2,917) |
Proceeds from sale of equity investments and other-net | 66,652 | |
Net cash provided by (used in) investing activities | 86,550 | (10,391) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repurchase of public notes | (70,615) | (28,804) |
Proceeds from sale-leaseback financial obligations | 43,971 | |
Purchase of treasury shares | (457) | (8,075) |
Other | 861 | (136) |
Net cash used in financing activities | (26,240) | (37,015) |
Increase in cash and cash equivalents | 78,749 | 13,847 |
Cash and cash equivalents at beginning of period | 5,291 | 9,332 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 84,040 | $ 23,179 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 24, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | THE MCCLATCHY COMPANY 1. SIGNIFICANT ACCOUNTING POLICIES Business and Basis of Accounting The McClatchy Company (the “Company,” “we,” “us” or “our”) is a news and information publisher of well-respected publications such as the Miami Herald , The Kansas City Star , The Sacramento Bee , The Charlotte Observer , The (Raleigh) News & Observer , and the (Fort Worth) Star-Telegram . Each of our publications also has online platforms serving their communities. We operate 30 media companies in 14 states, providing each of these communities with high-quality news and advertising services in a wide array of digital and print formats. We are headquartered in Sacramento, California, and our Class A Common Stock is listed on the NYSE American under the symbol MNI. On July 31, 2017, we closed a transaction to sell a majority of our interest in CareerBuilder LLC (“CareerBuilder”), which changed our ownership interest in CareerBuilder from 15.0% to approximately 3.5%. See Note 3 for more information. Preparation of the financial statements in conformity with accounting principles generally accepted in the United States and pursuant to the rules and regulation of the Securities and Exchange Commission requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The condensed consolidated financial statements include the Company and our subsidiaries. Intercompany items and transactions are eliminated. In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, that are necessary to present fairly our financial position, results of operations, and cash flows for the interim periods presented. The financial statements contained in this report are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 25, 2016 (“Form 10-K”). Each of the fiscal periods included herein comprise 13 weeks for the third-quarter periods and 39 weeks for the nine-month periods. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation in our condensed consolidated financial statements related to the early retrospective adoption of Accounting Standards Update (“ASU”) No. 2017-07 relating to the classification of net periodic pension expense, as described below. In accordance with the early adoption of ASU No. 2017-07 for the quarter and nine months ended September 25, 2016, we reclassified net periodic pension and postretirement costs of $3.7 million and $11.1 million, respectively, from the compensation line item in operating expenses to the retirement benefit expense line item in non-operating (expense) income on the condensed consolidated statements of operations, which is described further in Note 5. There were no other changes to the prior periods’ condensed consolidated financial statements, except those described in Note 5. Fair Value of Financial Instruments We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 – Unadjusted quoted prices available in active markets for identical investments as of the reporting date. Level 2 – Observable inputs to the valuation methodology are other than Level 1 inputs and are either directly or indirectly observable as of the reporting date and fair value can be determined through the use of models or other valuation methodologies. Level 3 – Inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability, and the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk. Our policy is to recognize significant transfers between levels at the actual date of the event or circumstance that caused the transfer. The following methods and assumptions were used to estimate the fair value of each class of financial instruments: Cash and cash equivalents, accounts receivable and accounts payable. As of September 24, 2017, and December 25, 2016, the carrying amount of these items approximates fair value because of the short maturity of these financial instruments. Long-term debt. The fair value of our long-term debt is determined using quoted market prices and other inputs that were derived from available market information, including the current market activity of our publicly-traded notes and bank debt, trends in investor demand for debt and market values of comparable publicly-traded debt. These are considered to be Level 2 inputs under the fair value measurements and disclosure guidance and may not be representative of actual value. At September 24, 2017 and December 25, 2016, the estimated fair value of long-term debt, including the current portion of long-term debt, was $769.6 million and $844.0 million, respectively. At September 24, 2017, and December 25, 2016, the carrying value of our long-term debt, including the current portion of long-term debt, if any, was $780.7 million and $846.2 million, respectively. Certain assets are measured at fair value on a nonrecurring basis; that is, they are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Our non-financial assets that may be measured at fair value on a nonrecurring basis are assets held for sale, goodwill, intangible assets not subject to amortization and equity method investments. All of these are measured using Level 3 inputs. We utilize valuation techniques that seek to maximize the use of observable inputs and minimize the use of unobservable inputs. The significant unobservable inputs include our expected cash flows and the discount rates that we estimate market participants would seek for bearing the risk associated with such assets. We incurred impairment charges during the quarter and nine months ended September 24, 2017, on our newspaper masthead intangible assets (see below in Note 1) and equity method investments (see Note 3), respectively. Newsprint, ink and other inventories Newsprint, ink and other inventories are stated at the lower of cost (based principally on the first‑in, first‑out method) and net realizable value. During the nine months ended September 24, 2017, we recorded a $2.0 million write‑down of non-newsprint inventory, which is reflected in the other asset write-downs line on our condensed consolidated statement of operations. Property, Plant and Equipment During the quarter and nine months ended September 25, 2016, we incurred $0.3 million and $6.9 million, respectively, in accelerated depreciation related to production equipment no longer needed as a result of either outsourcing our printing process at a few of our media companies or replacing an old printing press at one of our media companies. No similar transactions were recorded during the quarter and nine months ended September 24, 2017. Depreciation expense with respect to property, plant and equipment is summarized below: Quarters Ended Nine Months Ended September 24, September 25, September 24, September 25, (in thousands) 2017 2016 2017 2016 Depreciation expense $ 7,496 $ 8,561 $ 22,748 $ 33,559 Assets Held for Sale During the nine months ended September 24, 2017, we began to actively market for sale the land and buildings at four of our media companies. No impairment charges were incurred during the nine months ended September 24, 2017, as a result of classifying these assets into assets held for sale. Intangible Assets and Goodwill We test for impairment of goodwill annually, at year‑end, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The required approach uses accounting judgments and estimates of future operating results. Changes in estimates or the application of alternative assumptions could produce significantly different results. Impairment testing is done at a reporting unit level. We perform this testing on operating segments, which are also considered our reporting units. An impairment loss is recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The fair value of our reporting units is determined using a combination of a discounted cash flow model and market based approaches. The estimates and judgments that most significantly affect the fair value calculation are assumptions related to revenue growth, newsprint prices, compensation levels, discount rate, hypothetical transaction structures, and for the market based approach, private and public market trading multiples for newspaper assets. We consider current market capitalization, based upon the recent stock market prices, plus an estimated control premium in determining the reasonableness of the aggregate fair value of the reporting units. We had no impairment of goodwill during the quarter and nine months ended September 24, 2017 or September 25, 2016. Newspaper mastheads (newspaper titles and website domain names) are not subject to amortization and are tested for impairment annually, at year‑end, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of each newspaper masthead with its carrying amount. We use a relief-from-royalty approach that utilizes the discounted cash flow model discussed above, to determine the fair value of each newspaper masthead. We performed an interim testing of impairment of intangible newspaper mastheads as of September 24, 2017, due to the continuing challenging business conditions and the resulting weakness in our stock price as of the end of our third quarter of 2017. Individual newspaper mastheads were estimated using the present value of expected future cash flows, using estimates, judgments and assumptions discussed above that we believe were appropriate in the circumstances. As a result, we recorded an intangible newspaper masthead impairment charge of $8.7 million in the quarter and nine months ended September 24, 2017, which is recorded in other asset write-downs on our condensed consolidated statements of operations. We had no impairment of newspaper mastheads during the quarter and nine months ended September 25, 2016. Long‑lived assets such as intangible assets (primarily advertiser and subscriber lists) are amortized and tested for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The carrying amount of each asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of such asset group. We had no impairment of long‑lived assets subject to amortization during the quarter and nine months ended September 24, 2017, and September 25, 2016. Financial Obligations Financial obligations consists of contributions of real properties to the Pension Plan in 2016 and 2011 (see Note 5), and real property previously owned by The Sacramento Bee that was sold and leased back during the third quarter of 2017. The long-term balance of financial obligations at September 24, 2017, and December 25, 2016, was $92.0 million and $51.6 million, respectively. Segment Reporting We operate 30 media companies, providing each of our communities with high-quality news and advertising services in a wide array of digital and print formats. We have two operating segments that we aggregate into a single reportable segment because each has similar economic characteristics, products, customers and distribution methods. Our operating segments are based on how our chief executive officer, who is also our Chief Operating Decision Maker (“CODM”), makes decisions about allocating resources and assessing performance. The CODM is provided discrete financial information for the two operating segments. Each operating segment consists of a group of media companies and both operating segments report to the same segment manager. One of our operating segments (“Western Segment”) consists of our media operations in California, the Northwest, and the Midwest, while the other operating segment (“Eastern Segment”) consists primarily of media operations in the Southeast and Florida. Accumulated Other Comprehensive Loss Our accumulated other comprehensive loss (“AOCL”) and reclassifications from AOCL, net of tax, consisted of the following: Other Minimum Comprehensive Pension and Loss Post- Related to Retirement Equity (in thousands) Liability Investments Total Balance at December 25, 2016 $ (450,506) $ (11,009) $ (461,515) Other comprehensive income (loss) before reclassifications — 6,743 6,743 Amounts reclassified from AOCL 12,853 — 12,853 Other comprehensive income 12,853 6,743 19,596 Balance at September 24, 2017 $ (437,653) $ (4,266) $ (441,919) Amount Reclassified from AOCL Quarters Ended Nine Months Ended (in thousands) September 24, September 25, September 24, September 25, Affected Line in the Condensed AOCL Component 2017 2016 2017 2016 Consolidated Statements of Operations Minimum pension and post-retirement liability $ 7,712 $ 3,838 $ 12,853 $ 11,511 Retirement benefit expense — (1,535) — (4,604) Benefit for income taxes (1) $ 7,712 $ 2,303 $ 12,853 $ 6,907 Net of tax _____________________ (1) There is no income tax benefit associated with the quarter or nine months ended September 24, 2017, due to the recognition of a deferred income tax valuation allowance that eliminated all current period benefits. Income Taxes We account for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The timing of recording or releasing a valuation allowance requires significant judgment. A valuation allowance is required when it is more-likely-than-not that all or a portion of deferred tax assets may not be realized. Establishment and removal of a valuation allowance requires us to consider all positive and negative evidence and to make a judgmental decision regarding the amount of valuation allowance required as of a reporting date. The assessment takes into account expectations of future taxable income or loss, available tax planning strategies and the reversal of temporary differences. The development of these expectations involves the use of estimates such as operating profitability. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. We performed our assessment of the deferred tax assets during the third quarter of 2017, weighing the positive and negative evidence as outlined in ASC 740-10, Income Taxes . As we have incurred three years of cumulative pre-tax losses, such objective negative evidence limits our ability to give significant weight to other positive subjective evidence, such as projections for future growth and profitability. Accordingly, we recorded a valuation allowance charge of $245.4 million in the quarter and nine months ended September 24, 2017, which is recorded in income tax (benefit) expense on our condensed consolidated statements of operations. This amount represents a $155.0 million valuation allowance against a majority of our deferred tax assets, as well as $90.4 million that represents the current year cumulative impact of establishing the valuation allowance in the nine month period ended September 24, 2017. As such, the tax benefit related to the current quarter losses is not recognized due to the recording of the valuation allowance, resulting in our effective tax rate for the third quarter of 2017 not being comparable to the effective tax rate for the same period in 2016. We will continue to maintain a valuation allowance against our deferred tax assets until we believe it is more-likely-than-not that these assets will be realized in the future. If sufficient positive evidence, such as three-year cumulative pre-tax income, arises in the future that provides an indication that all of or a portion of the deferred tax assets meet the more-likely-than-not standard, the valuation allowance may be reversed, in whole or in part, in the period that such determination is made. Current generally accepted accounting principles prescribe a recognition threshold and measurement of a tax position taken or expected to be taken in an enterprise’s tax returns. We recognize accrued interest related to unrecognized tax benefits in interest expense. Accrued penalties are recognized as a component of income tax expense. Earnings Per Share (EPS) Basic EPS excludes dilution from common stock equivalents and reflects income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is based upon the weighted average number of outstanding shares of common stock and dilutive common stock equivalents in the period. Common stock equivalents arise from dilutive stock appreciation rights and restricted stock units, and are computed using the treasury stock method. Anti-dilutive common stock equivalents are excluded from diluted EPS. The weighted average anti-dilutive common stock equivalents that could potentially dilute basic EPS in the future, but were not included in the weighted average share calculation, consisted of the following: Quarters Ended Nine Months Ended September 24, September 25, September 24, September 25, (shares in thousands) 2017 2016 2017 2016 Anti-dilutive common stock equivalents 336 305 385 284 Cash Flow Information Cash paid for interest and income taxes and other non-cash activities consisted of the following: Nine Months Ended September 24, September 25, (in thousands) 2017 2016 Interest paid (net of amount capitalized) $ 45,889 $ 47,349 Income taxes paid (net of refunds) 9,988 762 Other non-cash investing and financing activities related to pension plan transactions: Increase of financing obligation for contribution of real property to pension plan — 47,130 Reduction of pension obligation for contribution of real property to pension plan — (47,130) Reduction of financing obligation due to sale of real properties by pension plan — (25,060) Reduction of PP&E due to sale of real properties by pension plan — (26,171) Other non-cash financing activities relate to the contribution of real property to the Pension Plan. See Note 5 for further discussion. Recently Adopted Accounting Pronouncements In July 2015, the Financial Accounting Standards Board ("FASB") issued ASU No. 2015-11, “ Simplifying the Measurement of Inventory. ” ASU 2015-11 simplified the measurement of inventory by requiring certain inventory to be measured at the “lower of cost and net realizable value” and options that existed for “market value” were eliminated. The ASU defined net realizable value as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” Effective December 26, 2016, we adopted this standard and applied it prospectively. We did not have a material impact to our primary categories of inventory such as newsprint for our operations or to our condensed consolidated statement of operations from the adoption of this standard. In January 2017, the FASB issued ASU No. 2017-04, “ Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ” ASU 2017-04 simplified the subsequent measurement of goodwill and eliminated the Step 2 from the goodwill impairment test. This standard was effective for us in fiscal year 2020 with early adoption permitted. We early adopted this standard for any impairment test performed after January 1, 2017, as permitted under the standard. The adoption of this guidance did not impact our condensed consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, “ Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ” ASU 2017-07 required that an employer report the service cost component in the same line items or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost, as defined in the standard, are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. It was effective for us in fiscal year 2018 with early adoption permitted. The amendments in this ASU are required to be applied retrospectively for the presentation of the service cost component and the other components of net periodic benefit costs. The amendments allow a practical expedient that permits an employer to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. Effective as of the beginning of fiscal year 2017, we early adopted this standard using the practical expedient. For the quarter and nine months ended September 25, 2016, we reclassified net periodic pension and postretirement costs of $3.7 million and $11.1 million, respectively, from the compensation line item within operating expenses to the retirement benefit expense line item in non-operating (expense) income in the condensed consolidated statement of operations to conform to the current year presentation. There were no other changes to the condensed consolidated financial statements, except those described in Note 5. In May 2017, the FASB issued ASU No. 2017-09, “ Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. ” ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This standard was effective for us in fiscal year 2018 with early adoption permitted. We early adopted this standard in the second quarter of 2017. The adoption of this guidance did not impact our condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued Accounting Standards Update (“ASU”) ASU No. 2014-09, “ Revenue from Contracts with Customers. ” ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. In 2016 and 2017, the FASB issued additional updates: ASU No. 2016-08, 2016-10, 2016-11, 2016-12, 2016-20 and 2017-05. These updates provide further guidance and clarification on specific items within the previously issued update. ASU 2014-09, as well as the additional FASB updates noted above, is effective for us for annual and interim periods beginning on or after December 15, 2017, and early adoption is permitted for interim or annual reporting periods beginning after December 15, 2016. We do not plan to early adopt this guidance. The new standard also permits two methods of adoption: retrospectively to each prior reporting period presented ("full retrospective"), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application ("modified retrospective"). We are planning to adopt the standard using the modified retrospective method. We have developed a multi-phase plan to assess the impact of the adoption on our condensed consolidated financial statements. The plan evaluates new disclosure requirements, and identifies and implements appropriate changes to our business processes, systems and controls under the new standard. We are still in the process of finalizing the impact this standard will have on our controls, processes and financial results, but we do not believe this standard will significantly impact revenue recognition associated with our primary advertising, audience and other revenue categories. We plan to conclude on the financial statement impact, as well as our process and control assessments in the fourth quarter of 2017. In January 2016, the FASB issued ASU No. 2016-01, “ Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ” ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for us for interim and annual reporting periods beginning after December 15, 2017. We do not believe the adoption of this guidance will have an impact on our condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “ Leases ” (Accounting Standards Codification 842 (“ASC 842”)) and it replaces the existing guidance in ASC 840, “ Leases. ” ASC 842 requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. The new lease standard does not substantially change lessor accounting. It is effective for us for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. We are in the process of reviewing the impact this standard will have on our existing lease population and the impact the adoption will have on our condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ” ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the expected credit losses during the period. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. It is effective for us for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted for interim or annual reporting periods beginning after December 15, 2018. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “ Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ” ASU 2016-15 addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. It is effective for us for interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 9 Months Ended |
Sep. 24, 2017 | |
INTANGIBLE ASSETS AND GOODWILL | |
INTANGIBLE ASSETS AND GOODWILL | 2. INTANGIBLE ASSETS AND GOODWILL Intangible assets subject to amortization (primarily advertiser lists, subscriber lists and developed technology), mastheads and goodwill consisted of the following: December 25, Impairment Acquisition Amortization September 24, (in thousands) 2016 Charges Adjustments Expense 2017 Intangible assets subject to amortization $ 839,273 $ — $ 11 $ — $ 839,284 Accumulated amortization (711,723) — — (36,268) (747,991) 127,550 — 11 (36,268) 91,293 Mastheads 171,436 (8,715) — — 162,721 Goodwill 705,174 — — — 705,174 Total $ 1,004,160 $ (8,715) $ 11 $ (36,268) $ 959,188 Amortization expense with respect to intangible assets is summarized below: Quarters Ended Nine Months Ended September 24, September 25, September 24, September 25, (in thousands) 2017 2016 2017 2016 Amortization expense $ 12,092 $ 11,998 $ 36,268 $ 35,992 The estimated amortization expense for the remainder of fiscal year 2017 and the five succeeding fiscal years is as follows: Amortization Expense Year (in thousands) 2017 (Remainder) $ 13,022 2018 47,660 2019 24,154 2020 803 2021 680 2022 655 |
INVESTMENTS IN UNCONSOLIDATED C
INVESTMENTS IN UNCONSOLIDATED COMPANIES | 9 Months Ended |
Sep. 24, 2017 | |
INVESTMENTS IN UNCONSOLIDATED COMPANIES | |
INVESTMENTS IN UNCONSOLIDATED COMPANIES | 3. INVESTMENTS IN UNCONSOLIDATED COMPANIES The carrying value of investments in unconsolidated companies consisted of the following: (in thousands) % Ownership September 24, December 25, Company Interest 2017 2016 CareerBuilder, LLC 3.5 $ 3,579 $ 236,936 Other Various 3,461 5,446 $ 7,040 $ 242,382 CareerBuilder, LLC On June 19, 2017, we announced that along with the current ownership group of CareerBuilder, we entered into an agreement to sell a majority of the collective ownership interest in CareerBuilder to an investor group led by investment funds managed by affiliates of Apollo Management Group along with the Ontario Teachers' Pension Plan Board. The transaction closed on July 31, 2017. We received $73.9 million from the closing of the transaction, consisting of approximately $7.3 million in normal distributions and $66.6 million of gross proceeds. As a result of the closing of the transaction, our new ownership interest in CareerBuilder was reduced to approximately 3.5% from 15.0%. As a result, we recorded $168.6 million in pre-tax impairment charges on our equity investment in CareerBuilder during the nine months ended September 24, 2017. Other During the quarter and nine months ended September 24, 2017, excluding the CareerBuilder impairments noted above, we wrote-down $1.9 million and $2.4 million, respectively, of certain other unconsolidated investments. During the nine months ended September 25, 2016, wrote off $0.9 million when we sold all of the assets in HomeFinder, LLC in February 2016. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 24, 2017 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 4. LONG-TERM DEBT Our long-term debt consisted of the following: Face Value at Carrying Value September 24, September 24, December 25, (in thousands) 2017 2017 2016 Notes: 9.00% senior secured notes due in 2022 $ 439,730 $ 433,569 $ 483,492 5.750% notes due in 2017 — — 16,749 7.150% debentures due in 2027 89,188 85,156 84,862 6.875% debentures due in 2029 276,230 261,981 261,061 Long-term debt $ 805,148 $ 780,706 $ 846,164 Less current portion — — 16,749 Total long-term debt, net of current $ 805,148 $ 780,706 $ 829,415 Our outstanding notes are stated net of unamortized debt issuance costs, and unamortized discounts, if applicable, totaling $24.4 million and $27.5 million as of September 24, 2017, and December 25, 2016, respectively. Debt Maturities, Repurchases and Gain on Extinguishment of Debt During the quarter and nine months ended September 24, 2017, (i) we retired $16.9 million of the 5.75% Notes due September 1, 2017 ("5.75% Notes") that matured on September 1, 2017; (ii) we repurchased a total $35.0 million and $50.0 million, respectively, of our 9.00% Senior Secured Notes due in 2022 ("9.00% Notes") through privately negotiated transactions; and (iii) we redeemed $1.7 million of the 9.00% Notes from the offer to purchase that we announced on August 1, 2017, in connection with the sale of our majority of interest in CareerBuilder as required under the indenture for the 9.00% Notes. The notes that matured and the notes that were redeemed as a result of our offer to purchase, were transacted at the principal amount plus accrued and unpaid interest. The 9.00% Notes that we repurchased through privately negotiated transactions were repurchased at a premium and we wrote off the associated debt issuance costs. As a result of these transactions, we recorded a loss on the extinguishment of debt of $1.8 million and $2.7 million during the quarter and nine months ended September 24, 2017, respectively. During the nine months ended September 25, 2016, we repurchased $30.8 million of the 5.75% Notes and 9.00% Notes through a privately negotiated transaction. We repurchased these notes at a discount and wrote off the associated discounts and debt issuance costs resulting in us recording a net gain on the extinguishment of debt of $1.5 million during the nine months ended September 25, 2016. There were no debt repurchases during the quarter ended September 25, 2016. Credit Agreement Our Third Amended and Restated Credit Agreement, as amended (“Credit Agreement”), is secured by a first-priority security interest in certain of our assets as described below. The Credit Agreement, among other things, provides for commitments of $65.0 million and has a maturity date of December 18, 2019. In 2014, we entered into a Collateralized Issuance and Reimbursement Agreement (“LC Agreement”). Pursuant to the terms of LC Agreement, we may request letters of credit be issued on our behalf in an aggregate face amount not to exceed $35.0 million. We are required to provide cash collateral equal to 101% of the aggregate undrawn stated amount of each outstanding letter of credit. The Credit Agreement was further amended in January 2017 to allow for flexibility in the use of proceeds of certain real estate transactions. As of September 24, 2017, there were standby letters of credit outstanding under the LC Agreement with an aggregate face amount of $31.7 million. There were no borrowings outstanding under the Credit Agreement as of September 24, 2017. Under the Credit Agreement, we may borrow at either the London Interbank Offered Rate plus a spread ranging from 275 basis points to 425 basis points, or at a base rate plus a spread ranging from 175 basis points to 325 basis points, in each case based upon our consolidated total leverage ratio. The Credit Agreement provides for a commitment fee payable on the unused revolving credit ranging from 50 basis points to 62.5 basis points, based upon our consolidated total leverage ratio. Senior Secured Notes and Indenture Substantially all of our subsidiaries guarantee the obligations under the 9.00% Notes and the Credit Agreement. We own 100% of each of the guarantor subsidiaries and we have no significant independent assets or operations separate from the subsidiaries that guarantee our 9.00% Notes and the Credit Agreement. The guarantees provided by the guarantor subsidiaries are full and unconditional and joint and several, and the subsidiaries other than the subsidiary guarantors are minor. In addition, we have granted a security interest to the banks that are a party to the Credit Agreement and the trustee under the indenture governing the 9.00% Notes that includes, but is not limited to, intangible assets, inventory, receivables and certain minority investments as collateral for the debt. The security interest does not include any property, plant & equipment (“PP&E”), leasehold interests or improvements with respect to such PP&E which would be reflected on our condensed consolidated balance sheets or shares of stock and indebtedness of our subsidiaries. Covenants under the Senior Debt Agreements Under the Credit Agreement, we are required to comply with a maximum consolidated total leverage ratio measured on a quarterly basis. As of September 24, 2017, we are required to maintain a consolidated total leverage ratio of not more than 6.00 to 1.00. For purposes of the consolidated total leverage ratio, debt is largely defined as debt, net of cash on hand in excess of $20.0 million. As of September 24, 2017, we were in compliance with our financial covenants. The Credit Agreement also prohibits the payment of a dividend if a payment would not be permitted under the indenture for the 9.00% Notes (discussed below). Dividends under the indenture for the 9.00% Notes are allowed if the consolidated leverage ratio (as defined in the indenture) is less than 5.25 to 1.00 and we have sufficient amounts under our restricted payments basket (as determined pursuant to the indenture), or if we use other available exceptions provided for under the indenture. The indenture for the 9.00% Notes and the Credit Agreement include a number of restrictive covenants that are applicable to us and our restricted subsidiaries. The covenants are subject to a number of important exceptions and qualifications set forth in those agreements. These covenants include, among other things, restrictions on our ability to incur additional debt; make investments and other restricted payments; pay dividends on capital stock or redeem or repurchase capital stock or certain of our outstanding notes or debentures prior to stated maturity; sell assets or enter into sale/leaseback transactions; create specified liens; create or permit restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions; engage in certain transactions with affiliates; and consolidate or merge with or into other companies or sell all or substantially all of the Company’s and our subsidiaries’ assets, taken as a whole. |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 9 Months Ended |
Sep. 24, 2017 | |
EMPLOYEE BENEFITS | |
EMPLOYEE BENEFITS | 5. EMPLOYEE BENEFITS We maintain a qualified defined benefit pension plan (“Pension Plan”), which covers certain eligible current and former employees and has been frozen since March 31, 2009. No new participants may enter the Pension Plan and no further benefits will accrue. However, years of service continue to count toward early retirement calculations and vesting of benefits previously earned. We also have a limited number of supplemental retirement plans to provide certain key current and former employees with additional retirement benefits. These plans are funded on a pay-as-you-go basis and the accrued pension obligation is largely included in other long-term obligations. The elements of retirement expense are as follows: Quarters Ended Nine Months Ended September 24, September 25, September 24, September 25, (in thousands) 2017 2016 2017 2016 Pension plans: Service Cost $ — $ — $ — $ — Interest Cost 21,367 22,167 64,101 66,501 Expected return on plan assets (22,392) (22,407) (67,177) (67,222) Actuarial loss 5,084 4,596 15,252 13,787 Net pension expense 4,059 4,356 12,176 13,066 Net post-retirement benefit credit (731) (662) (2,193) (1,984) Net retirement benefit expenses $ 3,328 $ 3,694 $ 9,983 $ 11,082 Changes In Presentation As discussed more fully in Note 1, we recently adopted ASU No. 2017-07, which provides guidance on presentation of service costs and the other components of net retirement expenses. Service costs represent the annual growth in benefits earned by participants over the 12 months of the fiscal year. Since our Pension Plan is frozen and no benefits continue to accrue for our participants, we have determined in connection with the adoption of ASU 2017-07 that service costs are zero for all periods presented. Historically, we have included expenses paid from the Pension Plan trust, including Public Benefit Guaranty Corporation (PBGC), audit, actuarial, legal and administrative fees as service costs in our footnote presentation of the components of net periodic pension cost. We have determined that the vast majority of these types of expenses reflect a reduction to the expected return on plan assets because they reduce the expected growth of the trust assets. As such, we have elected to reclassify the trust-paid expenses related to our Pension Plan as a reduction to expected return on plan assets for all periods presented. For the quarter and nine months ended September 25, 2016, we have reclassified expenses of $4.7 million and $14.1 million, respectively, from service costs to expected return on plan assets in the table above. This change in presentation had no impact on net retirement expenses. Contribution of Company-owned Real Property to Pension Plan In February 2016, we voluntarily contributed certain of our real property appraised at $47.1 million to our Pension Plan, and we entered into lease-back arrangements for the contributed properties. We leased back the contributed facilities under 11-year leases with initial annual payments totaling approximately $3.5 million. A similar contribution of properties was made to the Pension Plan in 2011, and the accounting treatment for both contributions is described below. The contributions and leasebacks of these properties are treated as financing transactions and, accordingly, we continue to depreciate the carrying value of the properties in our financial statements. No gain or loss will be recognized on the contributions of any property until the sale of the property by the Pension Plan. At the time of our contributions, our pension obligation was reduced and our financing obligations were recorded equal to the fair market value of the properties. The financing obligations are reduced by a portion of the lease payments made to the Pension Plan each month, and increased for imputed interest expense on the obligations to the extent imputed interest exceeds monthly payments. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 24, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 6. COMMITMENTS AND CONTINGENCIES In December 2008, carriers of The Fresno Bee filed a class action lawsuit against us and The Fresno Bee in the Superior Court of the State of California in Fresno County captioned Becerra v. The McClatchy Company (“Fresno case”) alleging that the carriers were misclassified as independent contractors and seeking mileage reimbursement. In February 2009, a substantially similar lawsuit, Sawin v. The McClatchy Company , involving similar allegations was filed by carriers of The Sacramento Bee (“Sacramento case”) in the Superior Court of the State of California in Sacramento County. The class consists of roughly 5,000 carriers in the Sacramento case and 3,500 carriers in the Fresno case. The plaintiffs in both cases are seeking unspecified restitution for mileage reimbursement. With respect to the Sacramento case, in September 2013, all wage and hour claims were dismissed and the only remaining claim is an equitable claim for mileage reimbursement under the California Civil Code. In the Fresno case, in March 2014, all wage and hour claims were dismissed and the only remaining claim is an equitable claim for mileage reimbursement under the California Civil Code. The court in the Sacramento case trifurcated the trial into three separate phases, independent contractor status, liability and restitution. On September 22, 2014, the court in the Sacramento case issued a tentative decision following the first phase, finding that the carriers that contracted directly with The Sacramento Bee during the period from February 2005 to July 2009 were misclassified as independent contractors. We objected to the tentative decision but the court ultimately adopted it as final. In June 2016, The McClatchy Company was dismissed from the lawsuit, leaving The Sacramento Bee as the sole defendant. On August 30, 2017, the court issued a statement of decision ruling that the court would not hold a phase two trial but would, instead, assume liability from the evidence previously submitted and from the independent contractor agreements. We objected to this decision but the court adopted it as final. There have been no additional decisions issued by the court as to the third phase. The court in the Fresno case bifurcated the trial into two separate phases: the first phase addressed independent contractor status and liability for mileage reimbursement and the second phase was designated to address restitution, if any. The first phase of the Fresno case began in the fourth quarter of 2014 and concluded in late March 2015. On April 14, 2016, the court in the Fresno case issued a statement of final decision in favor of us and The Fresno Bee . Accordingly, there will be no second phase. The plaintiffs filed a Notice of Appeal on November 10, 2016. In January 2016, Ponderay Newsprint Company (“PNC”), a general partnership that owns and operates a newsprint mill in the state of Washington, and of which three of our wholly-owned subsidiaries own a combined 27% interest, filed a complaint in the Superior Court of the State of Washington seeking declaratory judgment and alleging breach of contract and breach of the duty of good faith and fair dealing against Public Utility District No. 1 of Pend Oreille County (“PUD”) relating to the industrial power supply contracts (“Supply Contracts”) between PNC and the PUD. This complaint followed the PUD’s assertion that PNC had effected a termination of the Supply Contracts by the submission of its most recent power schedule, which called for an uncertain, and probably declining, need for power between 2017-2019. Based on PNC’s fervent belief that its power schedule was fully compliant with the Supply Contracts, the aforementioned complaint was filed. In March 2016, the PUD filed a counterclaim against PNC and a third-party complaint against the individual partners of PNC, alleging breach of contract. We continue to defend these actions vigorously and expect that we will ultimately prevail. As a result, we have not established a reserve in connection with the cases. While we believe that a material impact on our condensed consolidated financial position, results of operations or cash flows from these claims is unlikely, given the inherent uncertainty of litigation, a possibility exists that future adverse rulings or unfavorable developments could result in future charges that could have a material impact. We have and will continue to periodically reexamine our estimates of probable liabilities and any associated expenses and make appropriate adjustments to such estimates based on experience and developments in litigation. Other than the cases described above, we are subject to a variety of legal proceedings (including libel, employment, wage and hour, independent contractor and other legal actions) and governmental proceedings (including environmental matters) that arise from time to time in the ordinary course of our business. We are unable to estimate the amount or range of reasonably possible losses for these matters. However, we currently believe, after reviewing such actions with counsel, that the expected outcome of pending actions will not have a material effect on our condensed consolidated financial statements. No material amounts for any losses from litigation that may ultimately occur have been recorded in the condensed consolidated financial statements as we believe that any such losses are not probable. We have certain indemnification obligations related to the sale of assets including but not limited to insurance claims and multi-employer pension plans of disposed newspaper operations. We believe the remaining obligations related to disposed assets will not be material to our financial position, results of operations or cash flows. As of September 24, 2017, we had $31.7 million of standby letters of credit secured under the LC Agreement. |
STOCK PLANS
STOCK PLANS | 9 Months Ended |
Sep. 24, 2017 | |
STOCK PLANS | |
STOCK PLANS | 7. STOCK PLANS Stock Plans Activity The following table summarizes the restricted stock units (“RSUs”) activity during the nine months ended September 24, 2017: Weighted Average Grant Date Fair Value Nonvested — December 25, 2016 204,145 $ 18.17 Granted 196,905 $ 10.74 Vested (134,286) $ 19.84 Forfeited (880) $ 15.89 Nonvested — September 24, 2017 265,884 $ 11.83 The total fair value of the RSUs that vested during the nine months ended September 24, 2017, was $1.5 million. The following table summarizes the stock appreciation rights (“SARs”) activity during the nine months ended September 24, 2017: Weighted Aggregate Average Intrinsic Value SARs Exercise Price (in thousands) Outstanding December 25, 2016 292,750 $ 50.29 $ — Expired (74,175) $ 42.02 Outstanding September 24, 2017 218,575 $ 53.09 $ — Stock-Based Compensation All stock-based payments, including grants of stock appreciation rights, restricted stock units and common stock under equity incentive plans, are recognized in the financial statements based on their grant date fair values. As of September 24, 2017, we had two stock-based compensation plans. Stock-based compensation expenses are reported in the compensation line item in the condensed consolidated statements of operations. Total stock-based compensation expense for the periods presented in this report, are as follows: Quarters Ended Nine Months Ended September 24, September 25, September 24, September 25, (in thousands) 2017 2016 2017 2016 Stock-based compensation expense $ 325 $ 348 $ 1,786 $ 2,105 |
SIGNIFICANT ACCOUNTING POLICI15
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 24, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Business and Basis of Accounting | Business and Basis of Accounting The McClatchy Company (the “Company,” “we,” “us” or “our”) is a news and information publisher of well-respected publications such as the Miami Herald , The Kansas City Star , The Sacramento Bee , The Charlotte Observer , The (Raleigh) News & Observer , and the (Fort Worth) Star-Telegram . Each of our publications also has online platforms serving their communities. We operate 30 media companies in 14 states, providing each of these communities with high-quality news and advertising services in a wide array of digital and print formats. We are headquartered in Sacramento, California, and our Class A Common Stock is listed on the NYSE American under the symbol MNI. On July 31, 2017, we closed a transaction to sell a majority of our interest in CareerBuilder LLC (“CareerBuilder”), which changed our ownership interest in CareerBuilder from 15.0% to approximately 3.5%. See Note 3 for more information. Preparation of the financial statements in conformity with accounting principles generally accepted in the United States and pursuant to the rules and regulation of the Securities and Exchange Commission requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The condensed consolidated financial statements include the Company and our subsidiaries. Intercompany items and transactions are eliminated. In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, that are necessary to present fairly our financial position, results of operations, and cash flows for the interim periods presented. The financial statements contained in this report are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 25, 2016 (“Form 10-K”). Each of the fiscal periods included herein comprise 13 weeks for the third-quarter periods and 39 weeks for the nine-month periods. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation in our condensed consolidated financial statements related to the early retrospective adoption of Accounting Standards Update (“ASU”) No. 2017-07 relating to the classification of net periodic pension expense, as described below. In accordance with the early adoption of ASU No. 2017-07 for the quarter and nine months ended September 25, 2016, we reclassified net periodic pension and postretirement costs of $3.7 million and $11.1 million, respectively, from the compensation line item in operating expenses to the retirement benefit expense line item in non-operating (expense) income on the condensed consolidated statements of operations, which is described further in Note 5. There were no other changes to the prior periods’ condensed consolidated financial statements, except those described in Note 5. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 – Unadjusted quoted prices available in active markets for identical investments as of the reporting date. Level 2 – Observable inputs to the valuation methodology are other than Level 1 inputs and are either directly or indirectly observable as of the reporting date and fair value can be determined through the use of models or other valuation methodologies. Level 3 – Inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability, and the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk. Our policy is to recognize significant transfers between levels at the actual date of the event or circumstance that caused the transfer. The following methods and assumptions were used to estimate the fair value of each class of financial instruments: Cash and cash equivalents, accounts receivable and accounts payable. As of September 24, 2017, and December 25, 2016, the carrying amount of these items approximates fair value because of the short maturity of these financial instruments. Long-term debt. The fair value of our long-term debt is determined using quoted market prices and other inputs that were derived from available market information, including the current market activity of our publicly-traded notes and bank debt, trends in investor demand for debt and market values of comparable publicly-traded debt. These are considered to be Level 2 inputs under the fair value measurements and disclosure guidance and may not be representative of actual value. At September 24, 2017 and December 25, 2016, the estimated fair value of long-term debt, including the current portion of long-term debt, was $769.6 million and $844.0 million, respectively. At September 24, 2017, and December 25, 2016, the carrying value of our long-term debt, including the current portion of long-term debt, if any, was $780.7 million and $846.2 million, respectively. Certain assets are measured at fair value on a nonrecurring basis; that is, they are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Our non-financial assets that may be measured at fair value on a nonrecurring basis are assets held for sale, goodwill, intangible assets not subject to amortization and equity method investments. All of these are measured using Level 3 inputs. We utilize valuation techniques that seek to maximize the use of observable inputs and minimize the use of unobservable inputs. The significant unobservable inputs include our expected cash flows and the discount rates that we estimate market participants would seek for bearing the risk associated with such assets. We incurred impairment charges during the quarter and nine months ended September 24, 2017, on our newspaper masthead intangible assets (see below in Note 1) and equity method investments (see Note 3), respectively. |
Newsprint, ink and other inventories | Newsprint, ink and other inventories Newsprint, ink and other inventories are stated at the lower of cost (based principally on the first‑in, first‑out method) and net realizable value. During the nine months ended September 24, 2017, we recorded a $2.0 million write‑down of non-newsprint inventory, which is reflected in the other asset write-downs line on our condensed consolidated statement of operations |
Property, Plant and Equipment | Property, Plant and Equipment During the quarter and nine months ended September 25, 2016, we incurred $0.3 million and $6.9 million, respectively, in accelerated depreciation related to production equipment no longer needed as a result of either outsourcing our printing process at a few of our media companies or replacing an old printing press at one of our media companies. No similar transactions were recorded during the quarter and nine months ended September 24, 2017. Depreciation expense with respect to property, plant and equipment is summarized below: Quarters Ended Nine Months Ended September 24, September 25, September 24, September 25, (in thousands) 2017 2016 2017 2016 Depreciation expense $ 7,496 $ 8,561 $ 22,748 $ 33,559 |
Assets Held For Sale | Assets Held for Sale During the nine months ended September 24, 2017, we began to actively market for sale the land and buildings at four of our media companies. No impairment charges were incurred during the nine months ended September 24, 2017, as a result of classifying these assets into assets held for sale. |
Intangible Assets and Goodwill | Intangible Assets and Goodwill We test for impairment of goodwill annually, at year‑end, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The required approach uses accounting judgments and estimates of future operating results. Changes in estimates or the application of alternative assumptions could produce significantly different results. Impairment testing is done at a reporting unit level. We perform this testing on operating segments, which are also considered our reporting units. An impairment loss is recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The fair value of our reporting units is determined using a combination of a discounted cash flow model and market based approaches. The estimates and judgments that most significantly affect the fair value calculation are assumptions related to revenue growth, newsprint prices, compensation levels, discount rate, hypothetical transaction structures, and for the market based approach, private and public market trading multiples for newspaper assets. We consider current market capitalization, based upon the recent stock market prices, plus an estimated control premium in determining the reasonableness of the aggregate fair value of the reporting units. We had no impairment of goodwill during the quarter and nine months ended September 24, 2017 or September 25, 2016. Newspaper mastheads (newspaper titles and website domain names) are not subject to amortization and are tested for impairment annually, at year‑end, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of each newspaper masthead with its carrying amount. We use a relief-from-royalty approach that utilizes the discounted cash flow model discussed above, to determine the fair value of each newspaper masthead. We performed an interim testing of impairment of intangible newspaper mastheads as of September 24, 2017, due to the continuing challenging business conditions and the resulting weakness in our stock price as of the end of our third quarter of 2017. Individual newspaper mastheads were estimated using the present value of expected future cash flows, using estimates, judgments and assumptions discussed above that we believe were appropriate in the circumstances. As a result, we recorded an intangible newspaper masthead impairment charge of $8.7 million in the quarter and nine months ended September 24, 2017, which is recorded in other asset write-downs on our condensed consolidated statements of operations. We had no impairment of newspaper mastheads during the quarter and nine months ended September 25, 2016. Long‑lived assets such as intangible assets (primarily advertiser and subscriber lists) are amortized and tested for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The carrying amount of each asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of such asset group. We had no impairment of long‑lived assets subject to amortization during the quarter and nine months ended September 24, 2017, and September 25, 2016 |
Financial Obligations | Financial Obligations Financial obligations consists of contributions of real properties to the Pension Plan in 2016 and 2011 (see Note 5), and real property previously owned by The Sacramento Bee that was sold and leased back during the third quarter of 2017. The long-term balance of financial obligations at September 24, 2017, and December 25, 2016, was $92.0 million and $51.6 million, respectively. |
Segment Reporting | Segment Reporting We operate 30 media companies, providing each of our communities with high-quality news and advertising services in a wide array of digital and print formats. We have two operating segments that we aggregate into a single reportable segment because each has similar economic characteristics, products, customers and distribution methods. Our operating segments are based on how our chief executive officer, who is also our Chief Operating Decision Maker (“CODM”), makes decisions about allocating resources and assessing performance. The CODM is provided discrete financial information for the two operating segments. Each operating segment consists of a group of media companies and both operating segments report to the same segment manager. One of our operating segments (“Western Segment”) consists of our media operations in California, the Northwest, and the Midwest, while the other operating segment (“Eastern Segment”) consists primarily of media operations in the Southeast and Florida. |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Our accumulated other comprehensive loss (“AOCL”) and reclassifications from AOCL, net of tax, consisted of the following: Other Minimum Comprehensive Pension and Loss Post- Related to Retirement Equity (in thousands) Liability Investments Total Balance at December 25, 2016 $ (450,506) $ (11,009) $ (461,515) Other comprehensive income (loss) before reclassifications — 6,743 6,743 Amounts reclassified from AOCL 12,853 — 12,853 Other comprehensive income 12,853 6,743 19,596 Balance at September 24, 2017 $ (437,653) $ (4,266) $ (441,919) Amount Reclassified from AOCL Quarters Ended Nine Months Ended (in thousands) September 24, September 25, September 24, September 25, Affected Line in the Condensed AOCL Component 2017 2016 2017 2016 Consolidated Statements of Operations Minimum pension and post-retirement liability $ 7,712 $ 3,838 $ 12,853 $ 11,511 Retirement benefit expense — (1,535) — (4,604) Benefit for income taxes (1) $ 7,712 $ 2,303 $ 12,853 $ 6,907 Net of tax _____________________ (1) There is no income tax benefit associated with the quarter or nine months ended September 24, 2017, due to the recognition of a deferred income tax valuation allowance that eliminated all current period benefits. |
Income Taxes | Income Taxes We account for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The timing of recording or releasing a valuation allowance requires significant judgment. A valuation allowance is required when it is more-likely-than-not that all or a portion of deferred tax assets may not be realized. Establishment and removal of a valuation allowance requires us to consider all positive and negative evidence and to make a judgmental decision regarding the amount of valuation allowance required as of a reporting date. The assessment takes into account expectations of future taxable income or loss, available tax planning strategies and the reversal of temporary differences. The development of these expectations involves the use of estimates such as operating profitability. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. We performed our assessment of the deferred tax assets during the third quarter of 2017, weighing the positive and negative evidence as outlined in ASC 740-10, Income Taxes . As we have incurred three years of cumulative pre-tax losses, such objective negative evidence limits our ability to give significant weight to other positive subjective evidence, such as projections for future growth and profitability. Accordingly, we recorded a valuation allowance charge of $245.4 million in the quarter and nine months ended September 24, 2017, which is recorded in income tax (benefit) expense on our condensed consolidated statements of operations. This amount represents a $155.0 million valuation allowance against a majority of our deferred tax assets, as well as $90.4 million that represents the current year cumulative impact of establishing the valuation allowance in the nine month period ended September 24, 2017. As such, the tax benefit related to the current quarter losses is not recognized due to the recording of the valuation allowance, resulting in our effective tax rate for the third quarter of 2017 not being comparable to the effective tax rate for the same period in 2016. We will continue to maintain a valuation allowance against our deferred tax assets until we believe it is more-likely-than-not that these assets will be realized in the future. If sufficient positive evidence, such as three-year cumulative pre-tax income, arises in the future that provides an indication that all of or a portion of the deferred tax assets meet the more-likely-than-not standard, the valuation allowance may be reversed, in whole or in part, in the period that such determination is made. Current generally accepted accounting principles prescribe a recognition threshold and measurement of a tax position taken or expected to be taken in an enterprise’s tax returns. We recognize accrued interest related to unrecognized tax benefits in interest expense. Accrued penalties are recognized as a component of income tax expense. |
Earnings Per Share (EPS) | Earnings Per Share (EPS) Basic EPS excludes dilution from common stock equivalents and reflects income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is based upon the weighted average number of outstanding shares of common stock and dilutive common stock equivalents in the period. Common stock equivalents arise from dilutive stock appreciation rights and restricted stock units, and are computed using the treasury stock method. Anti-dilutive common stock equivalents are excluded from diluted EPS. The weighted average anti-dilutive common stock equivalents that could potentially dilute basic EPS in the future, but were not included in the weighted average share calculation, consisted of the following: Quarters Ended Nine Months Ended September 24, September 25, September 24, September 25, (shares in thousands) 2017 2016 2017 2016 Anti-dilutive common stock equivalents 336 305 385 284 |
Cash Flow Information | Cash Flow Information Cash paid for interest and income taxes and other non-cash activities consisted of the following: Nine Months Ended September 24, September 25, (in thousands) 2017 2016 Interest paid (net of amount capitalized) $ 45,889 $ 47,349 Income taxes paid (net of refunds) 9,988 762 Other non-cash investing and financing activities related to pension plan transactions: Increase of financing obligation for contribution of real property to pension plan — 47,130 Reduction of pension obligation for contribution of real property to pension plan — (47,130) Reduction of financing obligation due to sale of real properties by pension plan — (25,060) Reduction of PP&E due to sale of real properties by pension plan — (26,171) Other non-cash financing activities relate to the contribution of real property to the Pension Plan. See Note 5 for further discussion. |
Recently Adopted and Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In July 2015, the Financial Accounting Standards Board ("FASB") issued ASU No. 2015-11, “ Simplifying the Measurement of Inventory. ” ASU 2015-11 simplified the measurement of inventory by requiring certain inventory to be measured at the “lower of cost and net realizable value” and options that existed for “market value” were eliminated. The ASU defined net realizable value as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” Effective December 26, 2016, we adopted this standard and applied it prospectively. We did not have a material impact to our primary categories of inventory such as newsprint for our operations or to our condensed consolidated statement of operations from the adoption of this standard. In January 2017, the FASB issued ASU No. 2017-04, “ Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ” ASU 2017-04 simplified the subsequent measurement of goodwill and eliminated the Step 2 from the goodwill impairment test. This standard was effective for us in fiscal year 2020 with early adoption permitted. We early adopted this standard for any impairment test performed after January 1, 2017, as permitted under the standard. The adoption of this guidance did not impact our condensed consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, “ Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ” ASU 2017-07 required that an employer report the service cost component in the same line items or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost, as defined in the standard, are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. It was effective for us in fiscal year 2018 with early adoption permitted. The amendments in this ASU are required to be applied retrospectively for the presentation of the service cost component and the other components of net periodic benefit costs. The amendments allow a practical expedient that permits an employer to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. Effective as of the beginning of fiscal year 2017, we early adopted this standard using the practical expedient. For the quarter and nine months ended September 25, 2016, we reclassified net periodic pension and postretirement costs of $3.7 million and $11.1 million, respectively, from the compensation line item within operating expenses to the retirement benefit expense line item in non-operating (expense) income in the condensed consolidated statement of operations to conform to the current year presentation. There were no other changes to the condensed consolidated financial statements, except those described in Note 5. In May 2017, the FASB issued ASU No. 2017-09, “ Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. ” ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This standard was effective for us in fiscal year 2018 with early adoption permitted. We early adopted this standard in the second quarter of 2017. The adoption of this guidance did not impact our condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued Accounting Standards Update (“ASU”) ASU No. 2014-09, “ Revenue from Contracts with Customers. ” ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. In 2016 and 2017, the FASB issued additional updates: ASU No. 2016-08, 2016-10, 2016-11, 2016-12, 2016-20 and 2017-05. These updates provide further guidance and clarification on specific items within the previously issued update. ASU 2014-09, as well as the additional FASB updates noted above, is effective for us for annual and interim periods beginning on or after December 15, 2017, and early adoption is permitted for interim or annual reporting periods beginning after December 15, 2016. We do not plan to early adopt this guidance. The new standard also permits two methods of adoption: retrospectively to each prior reporting period presented ("full retrospective"), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application ("modified retrospective"). We are planning to adopt the standard using the modified retrospective method. We have developed a multi-phase plan to assess the impact of the adoption on our condensed consolidated financial statements. The plan evaluates new disclosure requirements, and identifies and implements appropriate changes to our business processes, systems and controls under the new standard. We are still in the process of finalizing the impact this standard will have on our controls, processes and financial results, but we do not believe this standard will significantly impact revenue recognition associated with our primary advertising, audience and other revenue categories. We plan to conclude on the financial statement impact, as well as our process and control assessments in the fourth quarter of 2017. In January 2016, the FASB issued ASU No. 2016-01, “ Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ” ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for us for interim and annual reporting periods beginning after December 15, 2017. We do not believe the adoption of this guidance will have an impact on our condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “ Leases ” (Accounting Standards Codification 842 (“ASC 842”)) and it replaces the existing guidance in ASC 840, “ Leases. ” ASC 842 requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. The new lease standard does not substantially change lessor accounting. It is effective for us for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. We are in the process of reviewing the impact this standard will have on our existing lease population and the impact the adoption will have on our condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ” ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the expected credit losses during the period. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. It is effective for us for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted for interim or annual reporting periods beginning after December 15, 2018. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “ Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ” ASU 2016-15 addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. It is effective for us for interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI16
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 24, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of components of property, plant and equipment | Quarters Ended Nine Months Ended September 24, September 25, September 24, September 25, (in thousands) 2017 2016 2017 2016 Depreciation expense $ 7,496 $ 8,561 $ 22,748 $ 33,559 |
Schedule of components of accumulated other comprehensive loss, net of tax | Other Minimum Comprehensive Pension and Loss Post- Related to Retirement Equity (in thousands) Liability Investments Total Balance at December 25, 2016 $ (450,506) $ (11,009) $ (461,515) Other comprehensive income (loss) before reclassifications — 6,743 6,743 Amounts reclassified from AOCL 12,853 — 12,853 Other comprehensive income 12,853 6,743 19,596 Balance at September 24, 2017 $ (437,653) $ (4,266) $ (441,919) |
Schedule of reclassification out of accumulated other comprehensive income | Amount Reclassified from AOCL Quarters Ended Nine Months Ended (in thousands) September 24, September 25, September 24, September 25, Affected Line in the Condensed AOCL Component 2017 2016 2017 2016 Consolidated Statements of Operations Minimum pension and post-retirement liability $ 7,712 $ 3,838 $ 12,853 $ 11,511 Retirement benefit expense — (1,535) — (4,604) Benefit for income taxes (1) $ 7,712 $ 2,303 $ 12,853 $ 6,907 Net of tax _____________________ (1) There is no income tax benefit associated with the quarter or nine months ended September 24, 2017, due to the recognition of a deferred income tax valuation allowance that eliminated all current period benefits. |
Summary of anti-dilutive stock options | Quarters Ended Nine Months Ended September 24, September 25, September 24, September 25, (shares in thousands) 2017 2016 2017 2016 Anti-dilutive common stock equivalents 336 305 385 284 |
Schedule of cash paid for interest and income taxes | Nine Months Ended September 24, September 25, (in thousands) 2017 2016 Interest paid (net of amount capitalized) $ 45,889 $ 47,349 Income taxes paid (net of refunds) 9,988 762 Other non-cash investing and financing activities related to pension plan transactions: Increase of financing obligation for contribution of real property to pension plan — 47,130 Reduction of pension obligation for contribution of real property to pension plan — (47,130) Reduction of financing obligation due to sale of real properties by pension plan — (25,060) Reduction of PP&E due to sale of real properties by pension plan — (26,171) |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 9 Months Ended |
Sep. 24, 2017 | |
INTANGIBLE ASSETS AND GOODWILL | |
Schedule of intangible assets (primarily advertiser lists, subscriber lists and developed technology), mastheads and goodwill | December 25, Impairment Acquisition Amortization September 24, (in thousands) 2016 Charges Adjustments Expense 2017 Intangible assets subject to amortization $ 839,273 $ — $ 11 $ — $ 839,284 Accumulated amortization (711,723) — — (36,268) (747,991) 127,550 — 11 (36,268) 91,293 Mastheads 171,436 (8,715) — — 162,721 Goodwill 705,174 — — — 705,174 Total $ 1,004,160 $ (8,715) $ 11 $ (36,268) $ 959,188 |
Summary of amortization expense with respect to intangible assets | Quarters Ended Nine Months Ended September 24, September 25, September 24, September 25, (in thousands) 2017 2016 2017 2016 Amortization expense $ 12,092 $ 11,998 $ 36,268 $ 35,992 |
Amortization expense for the five succeeding fiscal years | The estimated amortization expense for the remainder of fiscal year 2017 and the five succeeding fiscal years is as follows: Amortization Expense Year (in thousands) 2017 (Remainder) $ 13,022 2018 47,660 2019 24,154 2020 803 2021 680 2022 655 |
INVESTMENTS IN UNCONSOLIDATED18
INVESTMENTS IN UNCONSOLIDATED COMPANIES (Tables) | 9 Months Ended |
Sep. 24, 2017 | |
INVESTMENTS IN UNCONSOLIDATED COMPANIES | |
Summary of carrying value of investments in unconsolidated companies | (in thousands) % Ownership September 24, December 25, Company Interest 2017 2016 CareerBuilder, LLC 3.5 $ 3,579 $ 236,936 Other Various 3,461 5,446 $ 7,040 $ 242,382 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 24, 2017 | |
LONG-TERM DEBT | |
Summary of company's long-term debt | Face Value at Carrying Value September 24, September 24, December 25, (in thousands) 2017 2017 2016 Notes: 9.00% senior secured notes due in 2022 $ 439,730 $ 433,569 $ 483,492 5.750% notes due in 2017 — — 16,749 7.150% debentures due in 2027 89,188 85,156 84,862 6.875% debentures due in 2029 276,230 261,981 261,061 Long-term debt $ 805,148 $ 780,706 $ 846,164 Less current portion — — 16,749 Total long-term debt, net of current $ 805,148 $ 780,706 $ 829,415 |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 9 Months Ended |
Sep. 24, 2017 | |
EMPLOYEE BENEFITS | |
Schedule of elements of retirement expense | Quarters Ended Nine Months Ended September 24, September 25, September 24, September 25, (in thousands) 2017 2016 2017 2016 Pension plans: Service Cost $ — $ — $ — $ — Interest Cost 21,367 22,167 64,101 66,501 Expected return on plan assets (22,392) (22,407) (67,177) (67,222) Actuarial loss 5,084 4,596 15,252 13,787 Net pension expense 4,059 4,356 12,176 13,066 Net post-retirement benefit credit (731) (662) (2,193) (1,984) Net retirement benefit expenses $ 3,328 $ 3,694 $ 9,983 $ 11,082 |
STOCK PLANS (Tables)
STOCK PLANS (Tables) | 9 Months Ended |
Sep. 24, 2017 | |
STOCK PLANS | |
Summary of the restricted stock units ("RSUs") activity | Weighted Average Grant Date Fair Value Nonvested — December 25, 2016 204,145 $ 18.17 Granted 196,905 $ 10.74 Vested (134,286) $ 19.84 Forfeited (880) $ 15.89 Nonvested — September 24, 2017 265,884 $ 11.83 |
Summary of the stock appreciation rights ("SARs") activity | The following table summarizes the stock appreciation rights (“SARs”) activity during the nine months ended September 24, 2017: Weighted Aggregate Average Intrinsic Value SARs Exercise Price (in thousands) Outstanding December 25, 2016 292,750 $ 50.29 $ — Expired (74,175) $ 42.02 Outstanding September 24, 2017 218,575 $ 53.09 $ — |
Summary of stock-based compensation expense | Quarters Ended Nine Months Ended September 24, September 25, September 24, September 25, (in thousands) 2017 2016 2017 2016 Stock-based compensation expense $ 325 $ 348 $ 1,786 $ 2,105 |
SIGNIFICANT ACCOUNTING POLICI22
SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 24, 2017USD ($)companyitem | Sep. 24, 2017USD ($)companyitem | Jul. 31, 2017 | Jul. 30, 2017 | Dec. 25, 2016USD ($) | |
Investments in Unconsolidated Companies Activity | |||||
Number of media companies | company | 30 | 30 | |||
Number of states | item | 14 | 14 | |||
Length of fiscal quarter | 91 days | 273 days | |||
Long-term debt fair value disclosure | |||||
Estimated fair value of long-term debt | $ 769,600 | $ 769,600 | $ 844,000 | ||
Long-term debt | $ 780,706 | $ 780,706 | $ 846,164 | ||
Career Builder LLC | |||||
Investments in Unconsolidated Companies Activity | |||||
Ownership interest (as a percent) | 3.50% | 3.50% | 3.50% | 15.00% |
SIGNIFICANT ACCOUNTING POLICI23
SIGNIFICANT ACCOUNTING POLICIES - PP&E, Intangibles (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2017USD ($) | Sep. 25, 2016USD ($) | Sep. 24, 2017USD ($)segmentcompany | Sep. 25, 2016USD ($) | |
Property, plant and equipment | ||||
Accelerated depreciation incurred | $ 300,000 | $ 6,900,000 | ||
Depreciation expense | $ 7,496,000 | 8,561,000 | $ 22,748,000 | 33,559,000 |
Assets held for sale | ||||
Impairment charge of assets held for sale | $ 0 | |||
Number of media companies with assets held for sale | company | 4 | |||
Intangible Assets and Goodwill | ||||
Goodwill impairment charge | 0 | 0 | $ 0 | 0 |
Impairment charge of newspaper masthead | 0 | 8,715,000 | 0 | |
Intangible assets subject to amortization, net | ||||
Impairment of long-lived assets subject to amortization | $ 0 | $ 0 | $ 0 | $ 0 |
Segment reporting | ||||
Number of operating segments | segment | 2 | |||
Other asset write-downs | ||||
Property, plant and equipment | ||||
Write-down of non-newsprint inventory | $ 2,000,000 |
SIGNIFICANT ACCOUNTING POLICI24
SIGNIFICANT ACCOUNTING POLICIES - AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2017 | Sep. 25, 2016 | Sep. 24, 2017 | Sep. 25, 2016 | |
Changes in accumulated other comprehensive loss | ||||
Balance at the beginning of the period | $ (461,515) | |||
Other comprehensive income (loss) before reclassifications | 6,743 | |||
Amounts reclassified from AOCL | 12,853 | |||
Other comprehensive income | $ 10,409 | $ 1,484 | 19,596 | $ 5,970 |
Balance at the end of the period | (441,919) | (441,919) | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Retirement benefit expense | 3,328 | 3,694 | 9,983 | 11,082 |
Benefit for income taxes | 237,805 | (5,885) | 161,276 | (20,731) |
Net of tax | 260,476 | 9,804 | 393,497 | 37,279 |
Minimum Pension and Post-Retirement Liability | ||||
Changes in accumulated other comprehensive loss | ||||
Balance at the beginning of the period | (450,506) | |||
Amounts reclassified from AOCL | 12,853 | |||
Other comprehensive income | 12,853 | |||
Balance at the end of the period | (437,653) | (437,653) | ||
Minimum Pension and Post-Retirement Liability | Amount Reclassified from AOCI | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Retirement benefit expense | 7,712 | 3,838 | 12,853 | 11,511 |
Benefit for income taxes | (1,535) | (4,604) | ||
Net of tax | 7,712 | $ 2,303 | 12,853 | $ 6,907 |
Other Comprehensive Loss Related to Equity Investments | ||||
Changes in accumulated other comprehensive loss | ||||
Balance at the beginning of the period | (11,009) | |||
Other comprehensive income (loss) before reclassifications | 6,743 | |||
Other comprehensive income | 6,743 | |||
Balance at the end of the period | $ (4,266) | $ (4,266) |
SIGNIFICANT ACCOUNTING POLICI25
SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Details) $ in Millions | 3 Months Ended |
Sep. 24, 2017USD ($) | |
Valuation Allowance [Line Items] | |
Number of years of pre-tax losses | 3 years |
Valuation allowance against majority of deferred tax assets | $ 155 |
Cumulative impact of establishing valuation allowance | 90.4 |
Income Tax (benefit) expense | |
Valuation Allowance [Line Items] | |
Decrease in valuation allowance | $ 245.4 |
SIGNIFICANT ACCOUNTING POLICI26
SIGNIFICANT ACCOUNTING POLICIES - EPS (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2017 | Sep. 25, 2016 | Sep. 24, 2017 | Sep. 25, 2016 | |
Anti-dilutive stock options, restricted stock units and restricted stock | ||||
Weighted average anti-dilutive stock options | ||||
Anti-dilutive stock options (in shares) | 336 | 305 | 385 | 284 |
SIGNIFICANT ACCOUNTING POLICI27
SIGNIFICANT ACCOUNTING POLICIES - Cash Flow (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 24, 2017 | Sep. 25, 2016 | |
Cash Flow Information | ||
Interest paid (net of amount capitalized) | $ 45,889 | $ 47,349 |
Income taxes paid (net of refunds) | $ 9,988 | 762 |
Other non-cash financing activities | ||
Increase of financing obligation for contribution of real property to pension plan | 47,130 | |
Reduction of pension obligation for contribution of real property to pension plan | (47,130) | |
Reduction of financing obligation due to sale of real properties by pension plan | (25,060) | |
Reduction of PP&E due to sale of real properties by pension plan | $ (26,171) |
SIGNIFICANT ACCOUNTING POLICI28
SIGNIFICANT ACCOUNTING POLICIES - Adopted Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2017 | Sep. 25, 2016 | Sep. 24, 2017 | Sep. 25, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Compensation | $ 80,652 | $ 91,351 | $ 258,883 | $ 284,974 |
Retirement benefit expense | $ 3,328 | 3,694 | $ 9,983 | 11,082 |
Accounting Standards Update 2017 07 | Adjustments for New Accounting Principle, Early Adoption | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Compensation | (3,700) | (11,100) | ||
Retirement benefit expense | $ 3,700 | $ 11,100 |
INTANGIBLE ASSETS AND GOODWIL29
INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2017 | Sep. 25, 2016 | Sep. 24, 2017 | Sep. 25, 2016 | |
Intangible assets subject to amortization, gross | ||||
Balance at the beginning of the period | $ 839,273,000 | |||
Acquisition adjustments | 11,000 | |||
Balance at the end of the period | $ 839,284,000 | 839,284,000 | ||
Accumulated amortization | ||||
Balance at the beginning of the period | (711,723,000) | |||
Amortization Expense | (12,092,000) | $ (11,998,000) | (36,268,000) | $ (35,992,000) |
Balance at the end of the period | (747,991,000) | (747,991,000) | ||
Intangible assets subject to amortization, net | ||||
Balance at the beginning of the period | 127,550,000 | |||
Acquisition Adjustments | 11,000 | |||
Amortization Expense | (12,092,000) | (11,998,000) | (36,268,000) | (35,992,000) |
Balance at the end of the period | 91,293,000 | 91,293,000 | ||
Mastheads | ||||
Balance at the beginning of the period | 171,436,000 | |||
Impairment Charges | 0 | (8,715,000) | 0 | |
Balance at the end of the period | 162,721,000 | 162,721,000 | ||
Goodwill [Roll Forward] | ||||
Balance at the beginning of the period | 705,174,000 | |||
Goodwill impairment charge | 0 | 0 | 0 | 0 |
Balance at the end of the period | 705,174,000 | 705,174,000 | ||
Total | ||||
Balance at the beginning of the period | 1,004,160,000 | |||
Impairment Charges | (8,715,000) | |||
Acquisition Adjustments | 11,000 | |||
Amortization Expense | (12,092,000) | $ (11,998,000) | (36,268,000) | $ (35,992,000) |
Balance at the end of the period | $ 959,188,000 | $ 959,188,000 |
INTANGIBLE ASSETS AND GOODWIL30
INTANGIBLE ASSETS AND GOODWILL - Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2017 | Sep. 25, 2016 | Sep. 24, 2017 | Sep. 25, 2016 | |
INTANGIBLE ASSETS AND GOODWILL | ||||
Amortization expense | $ 12,092 | $ 11,998 | $ 36,268 | $ 35,992 |
Estimated amortization expense | ||||
2017 (remainder) | 13,022 | 13,022 | ||
2,018 | 47,660 | 47,660 | ||
2,019 | 24,154 | 24,154 | ||
2,020 | 803 | 803 | ||
2,021 | 680 | 680 | ||
2,022 | $ 655 | $ 655 |
INVESTMENTS IN UNCONSOLIDATED31
INVESTMENTS IN UNCONSOLIDATED COMPANIES (Details) - USD ($) $ in Thousands | Jul. 31, 2017 | Sep. 24, 2017 | Sep. 24, 2017 | Sep. 25, 2016 | Jul. 30, 2017 | Dec. 25, 2016 |
Investments in unconsolidated companies and joint ventures | ||||||
Investments in unconsolidated companies | $ 7,040 | $ 7,040 | $ 242,382 | |||
Write down of certain unconsolidated investments | $ 1,866 | $ 171,013 | $ 892 | |||
Home Finder LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||
Investments in unconsolidated companies and joint ventures | ||||||
Write down of certain unconsolidated investments | $ 900 | |||||
Career Builder LLC | ||||||
Investments in unconsolidated companies and joint ventures | ||||||
Ownership interest (as a percent) | 3.50% | 3.50% | 3.50% | 15.00% | ||
Investments in unconsolidated companies | $ 3,579 | $ 3,579 | 236,936 | |||
Proceeds from sale | $ 73,900 | |||||
Gross proceeds | 66,600 | |||||
Distributions of income from equity investments | $ 7,300 | |||||
Write down of certain unconsolidated investments | 168,600 | |||||
Other | ||||||
Investments in unconsolidated companies and joint ventures | ||||||
Investments in unconsolidated companies | 3,461 | 3,461 | $ 5,446 | |||
Write down of certain unconsolidated investments | $ 1,900 | $ 2,400 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Sep. 24, 2017 | Dec. 25, 2016 |
Long-term debt disclosures | ||
Face Value | $ 805,148 | |
Total long-term debt, net of current | 805,148 | |
Carrying value | 780,706 | $ 846,164 |
Less current portion | 16,749 | |
Total long-term debt, net of current | 780,706 | 829,415 |
Unamortized debt issuance costs and discounts | $ 24,400 | $ 27,500 |
9.00% senior secured notes due in 2022 | ||
Long-term debt disclosures | ||
Interest rate (as a percent) | 9.00% | 9.00% |
Face Value | $ 439,730 | |
Carrying value | $ 433,569 | $ 483,492 |
5.750% notes due in 2017 | ||
Long-term debt disclosures | ||
Interest rate (as a percent) | 5.75% | 5.75% |
Carrying value | $ 16,749 | |
7.150% debentures due in 2027 | ||
Long-term debt disclosures | ||
Interest rate (as a percent) | 7.15% | 7.15% |
Face Value | $ 89,188 | |
Carrying value | $ 85,156 | $ 84,862 |
6.875% debentures due in 2029 | ||
Long-term debt disclosures | ||
Interest rate (as a percent) | 6.875% | 6.875% |
Face Value | $ 276,230 | |
Carrying value | $ 261,981 | $ 261,061 |
LONG-TERM DEBT - Notes and Cove
LONG-TERM DEBT - Notes and Covenants (Details) | Oct. 21, 2014USD ($) | Sep. 24, 2017USD ($) | Sep. 25, 2016USD ($) | Sep. 24, 2017USD ($) | Sep. 25, 2016USD ($) | Dec. 25, 2016 |
LONG-TERM DEBT | ||||||
Face value of notes retired or repurchased | $ 0 | $ 30,800,000 | ||||
Gain (loss) on extinguishment of debt, net | $ (1,831,000) | $ (2,700,000) | $ 1,535,000 | |||
Amendment 21 October 2014 | ||||||
LONG-TERM DEBT | ||||||
Maximum borrowing capacity, before amendment | $ 65,000,000 | |||||
Revolving credit facility | LIBOR | ||||||
LONG-TERM DEBT | ||||||
Variable rate basis | London Interbank Offered Rate | |||||
Revolving credit facility | Base rate | ||||||
LONG-TERM DEBT | ||||||
Variable rate basis | base rate | |||||
Revolving credit facility | Amendment 21 October 2014 | ||||||
LONG-TERM DEBT | ||||||
Outstanding line of credit | 0 | $ 0 | ||||
Maximum consolidated leverage ratio | 6 | |||||
Minimum threshold amount of debt used to calculate consolidated total leverage ratio | $ 20,000,000 | |||||
Dividends restricted if consolidated leverage ratio is exceeded | 5.25 | |||||
Revolving credit facility | Amendment 21 October 2014 | Minimum | ||||||
LONG-TERM DEBT | ||||||
Commitment fees for the unused revolving credit (as a percent) | 0.50% | |||||
Revolving credit facility | Amendment 21 October 2014 | Maximum | ||||||
LONG-TERM DEBT | ||||||
Commitment fees for the unused revolving credit (as a percent) | 0.625% | |||||
Revolving credit facility | Amendment 21 October 2014 | LIBOR | Minimum | ||||||
LONG-TERM DEBT | ||||||
Basis spread on variable rate (as a percent) | 2.75% | |||||
Revolving credit facility | Amendment 21 October 2014 | LIBOR | Maximum | ||||||
LONG-TERM DEBT | ||||||
Basis spread on variable rate (as a percent) | 4.25% | |||||
Revolving credit facility | Amendment 21 October 2014 | Base rate | Minimum | ||||||
LONG-TERM DEBT | ||||||
Basis spread on variable rate (as a percent) | 1.75% | |||||
Revolving credit facility | Amendment 21 October 2014 | Base rate | Maximum | ||||||
LONG-TERM DEBT | ||||||
Basis spread on variable rate (as a percent) | 3.25% | |||||
Letter of credit | ||||||
LONG-TERM DEBT | ||||||
Maximum borrowing capacity | $ 35,000,000 | |||||
Percentage of aggregate undrawn amount of letter of credit required to provide cash collateral | 101.00% | |||||
Outstanding letters of credit | $ 31,700,000 | $ 31,700,000 | ||||
9.00% Notes | ||||||
LONG-TERM DEBT | ||||||
Ownership percentage in each of the guarantor subsidiaries | 100.00% | 100.00% | ||||
9.00% senior secured notes due in 2022 | ||||||
LONG-TERM DEBT | ||||||
Interest rate (as a percent) | 9.00% | 9.00% | 9.00% | |||
Face value of notes retired or repurchased | $ 35,000,000 | $ 50,000,000 | ||||
Debt redeemed in connection with sale of CareerBuilder | $ 1,700,000 | |||||
5.750% notes due in 2017 | ||||||
LONG-TERM DEBT | ||||||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% | |||
Face value of notes retired or repurchased | $ 16,900,000 | $ 16,900,000 |
EMPLOYEE BENEFITS - Retirement
EMPLOYEE BENEFITS - Retirement and Post retirement costs (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2016USD ($) | Sep. 24, 2017USD ($) | Sep. 25, 2016USD ($) | Sep. 24, 2017USD ($)item | Sep. 25, 2016USD ($) | |
Retirement expense for continuing operations | |||||
Net pension expense | $ 3,328,000 | $ 3,694,000 | $ 9,983,000 | $ 11,082,000 | |
Pension plan | |||||
EMPLOYEE BENEFITS | |||||
Number of new participants | item | 0 | ||||
Further benefits | 0 | $ 0 | |||
Retirement expense for continuing operations | |||||
Interest cost | 21,367,000 | 22,167,000 | 64,101,000 | 66,501,000 | |
Expected return on plan assets | (22,392,000) | (22,407,000) | (67,177,000) | (67,222,000) | |
Actuarial loss | 5,084,000 | 4,596,000 | 15,252,000 | 13,787,000 | |
Net pension expense | 4,059,000 | 4,356,000 | 12,176,000 | 13,066,000 | |
Value of contributions to plan | $ 47,100,000 | ||||
Post-retirement plans | |||||
Retirement expense for continuing operations | |||||
Net pension expense | $ (731,000) | (662,000) | $ (2,193,000) | (1,984,000) | |
Adjustments for New Accounting Principle, Early Adoption | Accounting Standards Update 2017 07 | Pension plan | |||||
Retirement expense for continuing operations | |||||
Service cost | (4,700,000) | (14,100,000) | |||
Expected return on plan assets | $ 4,700,000 | $ 14,100,000 |
EMPLOYEE BENEFITS - Contributio
EMPLOYEE BENEFITS - Contributions (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Feb. 29, 2016 | Sep. 24, 2017 | Dec. 25, 2016 | |
Medical cost trend rates | |||
Financing obligations | $ 92,034,000 | $ 51,616,000 | |
Pension plan | |||
Medical cost trend rates | |||
Value of contributions to plan | $ 47,100,000 | ||
Term of leases entered into for property contributed to pension plan | 11 years | ||
Gain or loss recognized on the contribution of property | $ 0 | ||
Aggregate Annual Rent Payments On Contributed Property | $ 3,500,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Legal Proceedings (Details) $ in Millions | 1 Months Ended | 9 Months Ended | ||
Jan. 31, 2016subsidiary | Feb. 28, 2009item | Dec. 31, 2008item | Sep. 24, 2017USD ($)item | |
Letter of credit | ||||
Contingencies | ||||
Outstanding letters of credit | $ | $ 31.7 | |||
"Sacramento Case" | ||||
Contingencies | ||||
Number of carriers | 5,000 | |||
Number of phases | 3 | |||
"Fresno Case" | ||||
Contingencies | ||||
Number of carriers | 3,500 | |||
Number of phases | 2 | |||
PNC | ||||
Contingencies | ||||
Number of subsidiaries | subsidiary | 3 | |||
Ownership interest (as a percent) | 27.00% |
STOCK PLANS - Activity (Details
STOCK PLANS - Activity (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 24, 2017USD ($)$ / sharesshares | |
RSUs | |
RSU's | |
Nonvested at the beginning of the period (in shares) | shares | 204,145 |
Granted (in shares) | shares | 196,905 |
Vested (in shares) | shares | (134,286) |
Forfeited (in shares) | shares | (880) |
Nonvested at the end of the period (in shares) | shares | 265,884 |
Weighted Average Grant Date Fair Value | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 18.17 |
Granted (in dollars per share) | $ / shares | 10.74 |
Vested (in dollars per share) | $ / shares | 19.84 |
Forfeited (in dollars per share) | $ / shares | 15.89 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 11.83 |
Additional disclosures | |
Total fair value | $ | $ 1.5 |
Stock options and SARs | |
Options/SARs | |
Outstanding at the beginning of the period (in shares) | shares | 292,750 |
Expired (in shares) | shares | (74,175) |
Outstanding at the end of the period (in shares) | shares | 218,575 |
Weighted Average Exercise Price | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 50.29 |
Expired (in dollars per share) | $ / shares | 42.02 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 53.09 |
STOCK PLANS - Stock-based compe
STOCK PLANS - Stock-based compensation (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2017USD ($) | Sep. 25, 2016USD ($) | Sep. 24, 2017USD ($)item | Sep. 25, 2016USD ($) | |
STOCK PLANS | ||||
Number of stock-based compensation plans | item | 2 | |||
Stock-based compensation expense | $ | $ 325 | $ 348 | $ 1,786 | $ 2,105 |