Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 02, 2018 | Jun. 23, 2017 | |
Entity Registrant Name | MCCLATCHY CO | ||
Entity Central Index Key | 1,056,087 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 63.6 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Common Class A | |||
Entity Common Stock, Shares Outstanding | 5,264,080 | ||
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 | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
REVENUES - NET: | |||
Advertising | $ 498,639 | $ 568,735 | $ 637,415 |
Audience | 363,497 | 364,830 | 367,858 |
Other | 41,456 | 43,528 | 51,301 |
Revenues, total | 903,592 | 977,093 | 1,056,574 |
OPERATING EXPENSES: | |||
Compensation | 338,588 | 368,897 | 385,478 |
Newsprint, supplements and printing expenses | 66,438 | 78,893 | 95,674 |
Depreciation and amortization | 80,129 | 89,446 | 101,595 |
Other operating expenses | 352,830 | 393,015 | 404,347 |
Other asset write-downs (see Notes 1 and 2) | 23,442 | 9,526 | 304,848 |
Operating expenses, total | 861,427 | 939,777 | 1,291,942 |
OPERATING INCOME (LOSS) | 42,165 | 37,316 | (235,368) |
NON-OPERATING INCOME (EXPENSE): | |||
Interest expense | (81,501) | (83,168) | (85,973) |
Interest income | 558 | 463 | 331 |
Equity income (loss) in unconsolidated companies, net | (1,698) | 13,384 | 10,086 |
Impairments related to equity investments, net | (170,007) | (892) | |
Gains related to equity investments | 8,061 | ||
Gain (loss) on extinguishment of debt, net | (2,700) | 431 | 1,167 |
Retirement benefit expense | (13,404) | (14,776) | (9,971) |
Other - net | (312) | (16) | (292) |
Non-operating income (expense), total | (269,064) | (84,574) | (76,591) |
Loss before income taxes | (226,899) | (47,258) | (311,959) |
Income tax (benefit) expense (see Note 1) | 105,459 | (13,065) | (11,797) |
NET LOSS | $ (332,358) | $ (34,193) | $ (300,162) |
Net loss per common share: | |||
Net loss per share - basic (in dollars per share) | $ (43.55) | $ (4.41) | $ (34.66) |
Net loss per share - diluted (in dollars per share) | $ (43.55) | $ (4.41) | $ (34.66) |
Weighted average number of common shares: | |||
Basic (in shares) | 7,632 | 7,750 | 8,659 |
Diluted (in shares) | 7,632 | 7,750 | 8,659 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||
NET LOSS | $ (332,358) | $ (34,193) | $ (300,162) |
Pension and post retirement plans: | |||
Change in pension and post-retirement benefit plans, net of taxes of $0, $25,700 and $2,936 | 8,100 | (38,550) | (4,404) |
Investment in unconsolidated companies: | |||
Other comprehensive income (loss), net of taxes of ($2,697), $772 and $534 | 4,046 | (1,157) | (801) |
Other comprehensive income (loss) | 12,146 | (39,707) | (5,205) |
Comprehensive loss | $ (320,212) | $ (73,900) | $ (305,367) |
CONSOLIDATED STATEMENTS OF COM4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||
Unamortized net loss and other components of benefit plans, taxes | $ 0 | $ 25,700 | $ 2,936 |
Other comprehensive loss, taxes | $ (2,697) | $ 772 | $ 534 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 25, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 99,387 | $ 5,291 |
Trade receivables (net of allowances of $3,225 and $3,254 ) | 101,081 | 112,583 |
Other receivables | 11,556 | 11,883 |
Newsprint, ink and other inventories | 7,918 | 13,939 |
Assets held for sale | 6,332 | 9,040 |
Other current assets | 19,000 | 14,809 |
Total current assets | 245,274 | 167,545 |
Property, plant and equipment, net | 257,639 | 297,506 |
Intangible assets: | ||
Identifiable intangibles - net | 228,222 | 298,986 |
Goodwill | 705,174 | 705,174 |
Total intangible assets | 933,396 | 1,004,160 |
Investments and other assets: | ||
Investments in unconsolidated companies | 7,172 | 242,382 |
Deferred income taxes | 60,821 | |
Other assets | 62,437 | 64,340 |
Total investments and other assets | 69,609 | 367,543 |
TOTAL ASSETS | 1,505,918 | 1,836,754 |
Current liabilities: | ||
Current portion of long-term debt | 74,140 | 16,749 |
Accounts payable | 31,856 | 36,822 |
Accrued pension liabilities | 8,941 | 8,647 |
Accrued compensation | 24,050 | 25,577 |
Income taxes payable | 10,133 | 7,930 |
Unearned revenue | 60,436 | 64,728 |
Accrued interest | 7,954 | 8,602 |
Other accrued liabilities | 18,832 | 20,994 |
Total current liabilities | 236,342 | 190,049 |
Non-current liabilities : | ||
Long-term debt | 707,252 | 829,415 |
Deferred income taxes | 28,062 | |
Pension and postretirement obligations | 599,763 | 604,165 |
Financing obligations | 91,905 | 51,616 |
Other long-term obligations | 46,926 | 47,596 |
Total non-current liabilities | 1,473,908 | 1,532,792 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Additional paid-in capital | 2,215,109 | 2,213,098 |
Accumulated deficit | (1,970,097) | (1,637,739) |
Treasury stock at cost, 3,157 shares and 34 shares | (51) | (6) |
Accumulated other comprehensive loss | (449,369) | (461,515) |
Total stockholders' equity | (204,332) | 113,913 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 1,505,918 | 1,836,754 |
Common Class A | ||
Stockholders' equity: | ||
Common stock | 52 | 51 |
Common Class B | ||
Stockholders' equity: | ||
Common stock | $ 24 | $ 24 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 25, 2016 |
Trade receivables, allowance | $ 3,225 | $ 3,254 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Treasury stock, shares | 3,157 | 34 |
Common Class A | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 5,256,325 | 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 | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (332,358) | $ (34,193) | $ (300,162) |
Reconciliation to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 80,129 | 89,446 | 101,595 |
(Gain) loss on disposal of property and equipment (excluding other asset write-downs) | (23,590) | (5,844) | 347 |
Retirement benefit expense | 13,404 | 14,776 | 9,971 |
Stock-based compensation expense | 2,475 | 3,130 | 3,178 |
Deferred income taxes | 86,400 | (33,275) | (23,087) |
Equity (income) loss in unconsolidated companies | 1,698 | (13,384) | (10,086) |
Impairments related to equity investments | 170,007 | 892 | |
Gains related to equity investments | (8,061) | ||
Distributions of income from equity investments | 6,000 | 7,500 | |
(Gain) loss on extinguishment of debt, net | 2,700 | (431) | (1,167) |
Other asset write-downs | 23,442 | 9,526 | 304,848 |
Other | (6,225) | (6,141) | (5,501) |
Changes in certain assets and liabilities: | |||
Trade receivables | 11,502 | 26,057 | 6,412 |
Inventories | 4,064 | 2,720 | 2,832 |
Other assets | (1,615) | 2,744 | (7,707) |
Accounts payable | (4,966) | (4,964) | (7,344) |
Accrued compensation | (1,472) | (3,600) | (3,529) |
Income taxes | 2,211 | 11,872 | (190,581) |
Accrued interest | (648) | (821) | (1,169) |
Other liabilities | (9,045) | 10,873 | (818) |
Net cash provided by (used in) operating activities | 18,113 | 75,383 | (122,529) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property, plant and equipment | (11,114) | (13,019) | (18,605) |
Proceeds from sale of property, plant and equipment and other | 43,944 | 9,241 | 414 |
Purchase of certificates of deposit | (4,040) | ||
Proceeds from redemption of certificates of deposit | 3,433 | 2,323 | |
Distributions from equity investments | 7,318 | 7,428 | |
Contributions to cost and equity investments | (3,937) | (3,817) | (1,583) |
Proceeds from sale of equity investments and other-net | 66,913 | 25,553 | |
Other, net | (11) | (4,000) | 633 |
Net cash provided by (used in) investing activities | 102,506 | (9,272) | 13,840 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Repurchase of public notes | (70,715) | (62,331) | (92,254) |
Proceeds from sale-leaseback financial obligations | 43,971 | ||
Purchase of treasury shares | (508) | (8,080) | (8,434) |
Other | 729 | 259 | (2,152) |
Net cash used in financing activities | (26,523) | (70,152) | (102,840) |
Increase (decrease) in cash and cash equivalents | 94,096 | (4,041) | (211,529) |
Cash and cash equivalents at beginning of period | 5,291 | 9,332 | 220,861 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 99,387 | $ 5,291 | $ 9,332 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Class ACommon Stock | Common Class BCommon Stock | Additional Paid-in Capital | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total |
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 28, 2014 | $ 63 | $ 24 | $ 2,223,460 | $ (1,303,384) | $ (416,603) | $ (175) | $ 503,385 |
Changes in stockholders' equity | |||||||
NET LOSS | (300,162) | (300,162) | |||||
Other comprehensive income (loss) | (5,205) | (5,205) | |||||
Issuance of shares | 1 | 1 | |||||
Stock compensation expense | 3,178 | 3,178 | |||||
Treasury stock, acquired | (8,434) | (8,434) | |||||
Treasury stock, retired | (5) | (6,408) | 6,413 | ||||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 27, 2015 | 59 | 24 | 2,220,230 | (1,603,546) | (421,808) | (2,196) | 192,763 |
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 28, 2014 | 63 | 24 | 2,223,460 | (1,303,384) | (416,603) | (175) | 503,385 |
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2017 | 52 | 24 | 2,215,109 | (1,970,097) | (449,369) | (51) | (204,332) |
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 27, 2015 | 59 | 24 | 2,220,230 | (1,603,546) | (421,808) | (2,196) | 192,763 |
Changes in stockholders' equity | |||||||
NET LOSS | (34,193) | (34,193) | |||||
Other comprehensive income (loss) | (39,707) | (39,707) | |||||
Issuance of shares | 1 | (1) | |||||
Stock compensation expense | 3,130 | 3,130 | |||||
Treasury stock, acquired | (8,080) | (8,080) | |||||
Treasury stock, retired | (9) | (10,261) | 10,270 | ||||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 25, 2016 | 51 | 24 | 2,213,098 | (1,637,739) | (461,515) | (6) | 113,913 |
Changes in stockholders' equity | |||||||
NET LOSS | (332,358) | (332,358) | |||||
Other comprehensive income (loss) | 12,146 | 12,146 | |||||
Issuance of shares | 2 | (2) | |||||
Stock compensation expense | 2,475 | 2,475 | |||||
Treasury stock, acquired | (508) | (508) | |||||
Treasury stock, retired | (1) | (462) | 463 | ||||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2017 | $ 52 | $ 24 | $ 2,215,109 | $ (1,970,097) | $ (449,369) | $ (51) | $ (204,332) |
CONSOLIDATED STATEMENTS OF STO9
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
Treasury Stock, Shares, Acquired | 51,996 | 683,334 | 649,448 |
Treasury Stock, Shares, Retired | 48,873 | 848,517 | 488,769 |
Common Class A | |||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 172,781 | 102,681 | 91,555 |
Stock Issued During Period, Shares, Conversion of Convertible Securities | 15,400 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | 1. SIGNIFICANT ACCOUNTING POLICIE The McClatchy Company (the “Company,” “we,” “us” or “our”) operates 30 media companies in 14 states, providing each of its communities with high-quality news and advertising services in a wide array of digital and print formats. We are a publisher of brands such as the Miami Herald , The Kansas City Sta r, The Sacramento Bee , The Charlotte Observer , The (Raleigh) News & Observer , and the (Fort Worth) Star-Telegram. 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 sold a majority of our interest in CareerBuilder LLC (“CareerBuilder”), which reduced our ownership interest in CareerBuilder from 15.0% to approximately 3.0%. Our fiscal year ends on the last Sunday in December. Fiscal year December 31, 2017, consisted of a 53-week period. Fiscal years ended December 25, 2016, and December 27, 2015, consisted of 52-week periods. 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 (“SEC”) 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 consolidated financial statements include the Company and our subsidiaries. Intercompany items and transactions are eliminated. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation in our 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 2016 and 2015, we reclassified net periodic pension and postretirement costs of $14.8 million and $10.0 million, respectively, from the compensation line item in operating expenses to the retirement benefit expense line item in non-operating income (expense) on the consolidated statements of operations. Revenue recognition We recognize revenues (i) from advertising placed in a newspaper, on a website and/or a mobile service over the advertising contract period or as services are delivered, as appropriate; (ii) from the sale of certain third party digital advertising products and services on a net basis, with wholesale fees reported as a reduction of the associated revenues; and (iii) for audience subscriptions as newspapers and access to online sites are delivered over the applicable subscription term. Print audience revenues are recorded net of direct delivery costs for contracts that are not on a “fee-for-service” arrangement. Print audience revenues on our “fee-for-service” contracts are recorded on a gross basis and associated delivery costs are recorded as other operating expenses. We enter into certain revenue transactions, primarily related to advertising contracts and circulation subscriptions that are considered multiple element arrangements (arrangements with more than one deliverable). As such we must: (i) determine whether and when each element has been delivered; (ii) determine fair value of each element using the selling price hierarchy of vendor‑specific objective evidence of fair value, third party evidence or best estimated selling price, as applicable and (iii) allocate the total price among the various elements based on the relative selling price method. Other revenues are recognized when the related product or service has been delivered. Revenues are recorded net of estimated incentives, including special pricing agreements, promotions and other volume‑based incentives and net of sales tax collected from the customer. Revisions to these estimates are charged to revenues in the period in which the facts that give rise to the revision become known. Concentrations of credit risks Financial instruments, which potentially subject us to concentrations of credit risks, are principally cash and cash equivalents and trade accounts receivables. Cash and cash equivalents are placed with major financial institutions. As of December 31, 2017, substantially all of our cash and cash equivalents are in excess of the FDIC insured limits. We have not experienced any losses related to amounts in excess of FDIC limits. We routinely assess the financial strength of significant customers and this assessment, combined with the large number and geographic diversity of our customers, limits our concentration of risk with respect to trade accounts receivable. Allowance for doubtful accounts We maintain an allowance account for estimated losses resulting from the risk that our customers will not make required payments. At certain of our media companies we establish our allowances based on collection experience, aging of our receivables and significant individual account credit risk. At the remaining media companies we use the aging of accounts receivable, reserving for all accounts due 90 days or longer, to establish allowances for losses on accounts receivable; however, if we become aware that the financial condition of specific customers has deteriorated, additional allowances are provided. We provide an allowance for doubtful accounts as follows: Years Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 Balance at beginning of year $ 3,254 $ 4,451 $ 5,900 Charged to costs and expenses 10,870 10,137 8,181 Amounts written off (10,899) (11,334) (9,630) Balance at end of year $ 3,225 $ 3,254 $ 4,451 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 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 consolidated statement of operations. Property, plant and equipment Property, plant and equipment (“PP&E”) are recorded at cost. Additions and substantial improvements, as well as interest expense incurred during construction, are capitalized. Capitalized interest was not material in 2017, 2016 or 2015. Expenditures for maintenance and repairs are charged to expense as incurred. When PP&E is sold or retired, the asset and related accumulated depreciation are removed from the accounts and the associated gain or loss is recognized. Property, plant and equipment consisted of the following: December 31, December 25, Estimated (in thousands) 2017 2016 Useful Lives Land $ 36,491 $ 50,844 Building and improvements 289,574 314,018 - years Equipment 555,204 594,005 - years (1) Construction in process 2,696 1,489 883,965 960,356 Less accumulated depreciation (626,326) (662,850) Property, plant and equipment, net $ 257,639 $ 297,506 (1) Presses are 9 - 25 years and other equipment is 2 - 15 years We record depreciation using the straight‑line method over estimated useful lives. The useful lives are estimated at the time the assets are acquired and are based on historical experience with similar assets and anticipated technological changes. Our depreciation expense was $30.8 million, $41.5 million and $53.2 million in 2017, 2016 and 2015, respectively. During 2017, 2016 and 2015, we incurred $0.3 million, $7.0 million and $10.3 million, respectively, in accelerated depreciation related to the production equipment no longer needed as a result of either outsourcing our printing process at certain of our media companies or replacing an old printing press at one of our media companies. We review the carrying amount of long‑lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events that result in an impairment review include the decision to close a location or a significant decrease in the operating performance of the long‑lived asset. Long‑lived assets are considered impaired if the estimated undiscounted future cash flows of the asset or asset group are less than the carrying amount. For impaired assets, we recognize a loss equal to the difference between the carrying amount of the asset or asset group and its estimated fair value, which is recorded in operating expenses in the consolidated statements of operations. The estimated fair value of the asset or asset group is based on the discounted future cash flows of the asset or asset group. The asset group is defined as the lowest level for which identifiable cash flows are available. Assets held for sale Assets held for sale includes land and buildings at four of our media companies that we began to actively market for sale during 2017. No impairment charges were incurred during 2017 as a result of classifying these assets into assets held for sale. Investments in unconsolidated companies We have accounted for non-marketable equity investments either under the equity or cost method. Investments through which we exercise significant influence but do not have control over the investee are accounted for under the equity method. Investments through which we are not able to exercise significant influence over the investee are accounted for under the cost method. See Note 2 for discussion of investments in unconsolidated companies. Financial obligations Financial obligations consists of contributions of real properties to the Pension Plan in 2016 and 2011 (see Note 6), and real property previously owned by The Sacramento Bee that was sold and leased back during the third quarter of 2017. 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 companies operations in the West and Midwest, while the other operating segment (“Eastern Segment”) consists primarily of media company operations in the Carolinas and East. Goodwill and intangible impairment 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 determined that no impairment charge was required in 2017 or 2016. We determined an impairment charge of $290.9 million in 2015 was required. Also see Note 3. 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 which utilizes a discounted cash flow model, 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 masthead fair values 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, and a total of $21.5 million in 2017. We determined that impairment charges of $9.2 million and $13.9 million in 2016 and 2015, respectively, were required. Also see Note 3. Long‑lived assets such as intangible assets subject to amortization (primarily advertiser and subscriber lists) are 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 2017, 2016 or 2015. Stock‑based compensation All stock‑based compensation, 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 fair values. At December 31, 2017, we had two stock‑based compensation plans. See Note 9. 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. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Act”) was enacted. The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, (i) reducing the U.S. federal corporate rate from 35% to 21%; (ii) eliminating the corporate alternative minimum tax (“AMT”) and changing how existing AMT credits can be realized; (iii) creating a new limitation on deductible interest expense; (iv) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017; (v) bonus depreciation that will allow for full expensing of qualified property; and (vi) limitations on the deductibility of certain executive compensation. The SEC staff issued Staff Accounting Bulletin 118 (“SAB 118”) in December 2017, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides that the measurement period for the tax effects of the Tax Act should not extend more than one year from the date the Tax Act was enacted. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but the company is able to determine a reasonable estimate, the company must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740, Income Taxes , on a basis of the provisions of the tax laws that were in effect immediately before the Tax Act was enacted. 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 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 accounting standards in the United States 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. 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 December 31, 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 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 December 31, 2017, and December 25, 2016, the estimated fair value of long‑term debt, including the current portion, was $810.7 million and $844.0 million, respectively. At December 31, 2017, and December 25, 2016, the carrying value of long‑term debt, including the current portion, was $781.4 million and $846.2 million, respectively. Pension plan. As of December 31, 2017, and December 25, 2016, we had assets related to our qualified defined benefit pension plan measured at fair value. The required disclosures regarding such assets are presented in Note 6. 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 are measured at fair value on a nonrecurring basis are assets held for sale, goodwill, indefinite or finite lived intangible assets 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 rate that we estimate market participants would seek for bearing the risk associated with such assets. We incurred impairment charges during 2017 and 2016 on our newspaper masthead intangible assets (see above in Note 1) and equity method investments (see Note 2). Accumulated other comprehensive loss We record changes in our net assets from non‑owner sources in our consolidated statements of stockholders’ equity (deficit). Such changes relate primarily to valuing our pension liabilities, net of tax effects. 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 27, 2015 $ (411,956) $ (9,852) $ (421,808) Other comprehensive income (loss) before reclassifications — (1,157) (1,157) Amounts reclassified from AOCL (38,550) — (38,550) Other comprehensive income (loss) (38,550) (1,157) (39,707) Balance at December 25, 2016 $ (450,506) $ (11,009) $ (461,515) Other comprehensive income (loss) before reclassifications — 4,046 4,046 Amounts reclassified from AOCL 8,100 — 8,100 Other comprehensive income 8,100 4,046 12,146 Balance at December 31, 2017 $ (442,406) $ (6,963) $ (449,369) Amount Reclassified from AOCL (in thousands) Year Ended Year Ended December 31, December 25, Affected Line in the AOCL Component 2017 2016 Consolidated Statements of Operations Minimum pension and post-retirement liability $ 8,100 $ (64,250) Retirement benefit expense — 25,700 Income tax provision (benefit) (1) $ 8,100 $ (38,550) Net of tax _____________________ (1) There is no income tax benefit associated with the year ended December 31, 2017, due to the recognition of a valuation allowance. 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: Years Ended December 31, December 25, December 27, (shares in thousands) 2017 2016 2015 Anti-dilutive stock options 278 431 517 Recently Adopted Accounting Pronouncements In July 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-11, “ Inventory (Topic 330): 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 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 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 2016 and 2015, we reclassified net periodic pension and postretirement costs of $14.8 million and $10.0 million, respectively, from the compensation line item within operating expenses to the retirement benefit expense line item in non-operating income (expense) in the consolidated statement of operations to conform to the current year presentation. 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 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 (Topic 606). ” Topic 606 supersedes the revenue recognition requirements in Topic 605 “ Revenue Recognition .” 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. We will adopt Topic 606 on January 1, 2018, using the modified retrospective method applied to those contracts which were not completed as of that date. Upon adoption, we will recognize a cumulative adjustment related to audience grace period revenues that will increase our accumulated deficit by approximately $2.7 million, rather than retrospectively adjusting prior periods. We will begin to recognize audience grace period revenues based on variable consideration. We have completed our assessment and have not identified any other significant changes to our revenue recognition policies. We expect to identify similar performance obligations under Topic 606 as compared with the deliverables and separate units of account previously identified. As a result, we expect the timing of our revenue recognition to remain the same. We have also assessed the new accounting principles related to the deferral and amortization of contract acquisition and fulfillment costs and due to the short-term nature of such costs, we will utilize the practical expedient to continue to expense as incurred. Internal controls were assessed during our analysis of Topic 606. As a result, certain controls related to assessment, implementation and monitoring of contracts and revenue recognition were created and implemented to ensure revenue is recognized timely and accurately. We expect the adoption of Topic 606 will not have a material impact to our consolidated financial statements. 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. The adoption of this guidance will not have an impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) ” and it replaces the existing guidance in Topic 840, “ Leases. ” Topic 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. In 2017, the FASB issued an additional update: ASU No. 2018-01, which provides further guidance and clarification on specific items within the previously issued update. 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 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 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 diversi |
INVESTMENTS IN UNCONSOLIDATED C
INVESTMENTS IN UNCONSOLIDATED COMPANIES | 12 Months Ended |
Dec. 31, 2017 | |
INVESTMENTS IN UNCONSOLIDATED COMPANIES | |
INVESTMENTS IN UNCONSOLIDATED COMPANIES | 2. INVESTMENTS IN UNCONSOLIDATED COMPANIES Our ownership interest and investment in unconsolidated companies consisted of the following: (in thousands) % Ownership December 31, December 25, Company Interest 2017 2016 CareerBuilder, LLC 3.0 $ 3,579 $ 236,936 Other Various 3,593 5,446 $ 7,172 $ 242,382 CareerBuilder, LLC On June 19, 2017, we along with the then existing ownership group of CareerBuilder at that time announced that we had 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 3.0% from 15.0%. As a result of the transaction, we recorded a total of $168.2 million in pre-tax impairment charges on our equity investment in CareerBuilder during 2017. HomeFinder, LLC In February 2016, we, along with the other selling partners sold all of the assets in HomeFinder LLC (“HomeFinder”) to Placester Inc. (“Placester”) in exchange for a small stock ownership in Placester and a 3-year affiliate agreement with Placester to continue to allow the selling partners to sell Placester and HomeFinder’s products and services. As a result of this transaction, during 2016, we wrote off our HomeFinder investment of $0.9 million, which was recorded to equity income in unconsolidated companies, net, on our consolidated statements of operations. During 2017, the final transaction accounting was completed for the HomeFinder transaction. As a result, we received our proportional share of the remaining proceeds from HomeFinder of $0.6 million, which is recorded as an offset to impairments related to equity investments, in the consolidated statements of operations. Write-downs During 2017 and 2016, excluding the CareerBuilder impairments noted above, we recorded write‑downs of $2.4 million and $1.0 million, respectively, which is recorded in impairments related to equity investments, in the consolidated statements of operations. The write-downs in 2017 were related to various investments, while the write-downs in 2016 was primarily due to HomeFinder, LLC, as discussed above. Distributions We received $7.3 million and $6.0 million in distributions from CareerBuilder in 2017 and 2016, respectively. Other Three of our wholly-owned subsidiaries have a combined 27.0% general partnership interest in Ponderay Newsprint Company (“Ponderay”). The investment in Ponderay is zero as a result of a write off in 2014 and accumulative losses exceeding our carrying value. No future income or losses from Ponderay will be recorded until our carrying value on our balance sheet is restored through future earnings by Ponderay. We have a 49.5% ownership interest in The Seattle Times Company (“STC”). Our investment in STC is zero as a result of accumulative losses in previous years exceeding our carrying value. No future income or losses from STC will be recorded until our carrying value on our balance sheet is restored through future earnings by STC. We also incurred expenses related to the purchase of products and services provided by these companies. We purchased some of our newsprint supply from Ponderay through a third-party intermediary and we incurred wholesale fees from CareerBuilder for the uploading and hosting of online advertising on behalf of our media companies’ advertisers. We recorded these expenses for CareerBuilder as a reduction to the associated digital classified advertising revenues and expenses related to Ponderay were recorded in newsprint expenses. The following table summarizes expenses incurred for products and services provided by unconsolidated companies: Years Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 CareerBuilder, LLC $ 354 $ 863 $ 1,001 Ponderay (general partnership) 9,162 10,767 8,200 The tables below present the summarized financial information, as provided to us by these investees, for our investments in unconsolidated companies on a combined basis: December 31, December 25, (in thousands) 2017 2016 Current assets $ 112,694 $ 332,602 Noncurrent assets 57,477 629,604 Current liabilities 61,996 263,200 Noncurrent liabilities 161,440 187,188 Equity (53,235) 511,818 Years Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 Net revenues $ 685,415 $ 1,058,296 $ 988,871 Gross profit 508,248 882,493 843,680 Operating income 4,027 80,830 38,561 Net income (5,121) 68,534 39,143 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2017 | |
INTANGIBLE ASSETS AND GOODWILL | |
INTANGIBLE ASSETS AND GOODWILL | 3. INTANGIBLE ASSETS AND GOODWILL Changes in identifiable intangible assets and goodwill consisted of the following: December 25, Impairment Amortization December 31, (in thousands) 2016 Additions Charges Expense 2017 Intangible assets subject to amortization $ 839,273 $ 11 $ — $ — $ 839,284 Accumulated amortization (711,723) — — (49,290) (761,013) 127,550 11 — (49,290) 78,271 Mastheads 171,436 — (21,485) — 149,951 Goodwill 705,174 — — — 705,174 Total $ 1,004,160 $ 11 $ (21,485) $ (49,290) $ 933,396 December 27, Impairment Amortization December 25, (in thousands) 2015 Additions Charges Expense 2016 Intangible assets subject to amortization $ 833,254 $ 6,019 $ — $ — $ 839,273 Accumulated amortization (663,735) — — (47,988) (711,723) 169,519 6,019 — (47,988) 127,550 Mastheads 179,132 1,500 (9,196) — 171,436 Goodwill 705,174 — — — 705,174 Total $ 1,053,825 $ 7,519 $ (9,196) $ (47,988) $ 1,004,160 As discussed more fully in Note 1, based on our interim and annual impairment testing of intangible newspaper mastheads we recorded a total of $21.5 million in masthead impairments in 2017, which was recorded in the other asset write-downs line item on our consolidated statements of operations. We had no goodwill impairments as a result of our annual impairment testing as of December 31, 2017. Based on our annual impairment testing of goodwill and intangible newspaper mastheads at December 25, 2016, we recorded $9.2 million in masthead impairments, which was recorded in the goodwill impairment and other asset write-downs line item on our consolidated statements of operations. In December 2016, we completed a small acquisition of The (Durham, NC) Herald-Sun . We also recognized an intangible asset related to an agreement we entered into with the purchasers of a covered parking garage under which we will receive parking spaces, at no cost, with an estimated useful life of 20 years. The transactions are reflected in intangible assets subject to amortization and in Mastheads. The impact of the acquisition was not material to our consolidated financial statements, and no other material amounts of assets were acquired or liabilities assumed in these transactions. Accumulated changes in indefinite lived intangible assets and goodwill as of December 31, 2017, and December 25, 2016, consisted of the following: December 31, 2017 December 25, 2016 Original Gross Accumulated Carrying Original Gross Accumulated Carrying (in thousands) Amount Impairment Amount Amount Impairment Amount Mastheads $ 684,500 $ (534,549) $ 149,951 $ 684,500 $ (513,064) $ 171,436 Goodwill 3,571,111 (2,865,937) 705,174 3,571,111 (2,865,937) 705,174 Total $ 4,255,611 $ (3,400,486) $ 855,125 $ 4,255,611 $ (3,379,001) $ 876,610 Amortization expense was $49.3 million, $48.0 million and $48.4 million in 2017, 2016 and 2015, respectively. The estimated amortization expense for the five succeeding fiscal years is as follows: Amortization Expense Year (in thousands) 2018 $ 47,660 2019 24,154 2020 803 2021 680 2022 655 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2017 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 4. LONG‑TERM DEBT All of our long‑term debt is in fixed rate obligations. As of December 31, 2017, and December 25, 2016, our outstanding long‑term debt consisted of senior secured notes and unsecured notes. They are stated net of unamortized debt issuance costs and unamortized discounts, if applicable, totaling $23.7 million and $27.5 million as of December 31, 2017, and December 25, 2016, respectively. The unamortized discounts resulted from recording assumed liabilities at fair value during a 2006 acquisition. The face values of the notes, as well as the carrying values are as follows: Face Value at Carrying Value December 31, December 31, December 25, (in thousands) 2017 2017 2016 Notes: 9.00% senior secured notes due in 2022 $ 439,630 $ 433,819 $ 483,492 5.750% notes due in 2017 — — 16,749 7.150% debentures due in 2027 89,188 85,262 84,862 6.875% debentures due in 2029 276,230 262,311 261,061 Long-term debt $ 805,048 $ 781,392 $ 846,164 Less current portion 75,000 74,140 16,749 Total long-term debt, net of current $ 730,048 $ 707,252 $ 829,415 Debt Maturities, Repurchases, Redemptions and Extinguishment of Debt The total face value of the notes that matured, were repurchased in privately negotiated transactions, or were redeemed via offers in 2017 and 2016 are as follows: Te December 31, December 25, 2017 2016 (in thousands) Face Value Face Value 9.00% senior secured notes due in 2022 $ 51,785 $ 25,000 5.750% notes due in 2017 16,865 38,577 Total notes matured, repurchased or redeemed $ 68,650 $ 63,577 During 2017, (i) we retired $16.9 million of the 5.75% Notes due in 2017 (“5.75% Notes”); (ii) we repurchased a total $50.0 million of our 9.00% Senior Secured Notes due in 2022 (“9.00% Notes”) through privately negotiated transactions; and (iii) we redeemed $1.8 million of the 9.00% Notes from the offers to purchase that we announced in the third and fourth quarters of 2017. 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 $2.7 million during 2017. As announced in December 2017, we called for a partial redemption of $75.0 million aggregate principal amount of our 9.00% Notes at a price of 104.5% of par as allowed under the bond indentures. The bonds were redeemed on January 25, 2018. Accordingly, these bonds are classified as current portion of long-term debt in our balance sheet as of December 31. 2017. Also, February 2018, we repurchased an additional $20.0 million aggregate principal amount of our 9.00% Notes through privately negotiated transactions. As a result of these transactions, we expect to record a loss on the extinguishment of debt of approximately $5.3 million during the quarter ending April 1, 2018. During 2016, we repurchased $63.6 million aggregate principal amount of various series of our outstanding notes. We repurchased these notes at either a price higher or lower than par value and wrote off historical discounts and unamortized issuance costs related to these notes, as applicable, which resulted in a net gain on extinguishment of debt of $0.4 million in 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 million and a maturity date of December 18, 2019. Pursuant to the terms of our Collateralized Issuance and Reimbursement Agreement (“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. As of December 31, 2017, there were $31.7 million face amount of letters of credit outstanding under the LC Agreement and no amounts drawn under the Credit Agreement. The amounts of standby letters of credit declined to $29.7 million in January 2018. 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 PP&E, leasehold interests and improvements with respect to such PP&E which would be reflected on our 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 December 31, 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 million. As of December 31, 2017, we were in compliance with all financial debt 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 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. Maturities The following table presents the approximate annual maturities of outstanding long‑term debt as of December 31, 2017, based upon our required payments, for the next five years and thereafter: Payments Year (in thousands) 2018 $ 75,000 2019 — 2020 — 2021 — 2022 364,630 Thereafter 365,418 Debt principal $ 805,048 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
INCOME TAXES | 5. INCOME TAXES Income tax provision (benefit) consisted of: Years Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 Current: Federal $ 15,042 $ 17,641 $ 13,317 State 4,017 2,569 (2,027) Deferred: Federal 80,293 (26,857) (17,642) State 6,107 (6,418) (5,445) Income tax provision (benefit) $ 105,459 $ (13,065) $ (11,797) As of December 31, 2017, we have not completed our accounting for the tax effects of enactment of the Tax Act; however, we have made a reasonable estimate of the effects on our existing deferred tax balances. We re-measured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. We are still analyzing certain aspects of the Tax Act, including the impact of the limitations on certain employee compensation, the deductibility of certain purchases of fixed assets, and the allowance of an indefinite carryforward period of net operating losses, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the re-measurement of our net deferred tax balance using the new federal tax rate was a benefit of $5.5 million. The effective tax rate expense (benefit) and the statutory federal income tax rate are reconciled as follows: Years Ended December 31, December 25, December 27, 2017 2016 2015 Statutory rate (35.0) % (35.0) % (35.0) % State taxes, net of federal benefit 2.4 (4.6) (2.1) Changes in estimates — (0.1) 0.1 Changes in unrecognized tax benefits 0.6 (0.3) 0.3 Other 0.3 3.1 — Impact of valuation allowance 80.0 — — Impact of tax rate changes (2.4) — — Impact on pension transaction — 6.9 — Goodwill impairment — — 32.5 Stock compensation 0.6 2.3 0.4 Effective tax rate 46.5 % (27.7) % (3.8) % The components of deferred tax assets and liabilities consisted of the following: December 31, December 25, (in thousands) 2017 2016 Deferred tax assets: Compensation benefits $ 144,084 $ 259,684 State taxes 2,861 3,659 State loss carryovers 4,338 3,889 Investments in unconsolidated subsidiaries 4,981 — Other 2,945 4,345 Total deferred tax assets 159,209 271,577 Valuation allowance (109,718) (3,889) Net deferred tax assets 49,491 267,688 Deferred tax liabilities: Depreciation and amortization 68,665 136,159 Investments in unconsolidated subsidiaries — 50,323 Debt discount 4,512 7,345 Deferred gain on debt 4,376 13,040 Total deferred tax liabilities 77,553 206,867 Net deferred tax assets (liabilities) $ (28,062) $ 60,821 The valuation allowance increased by $105.8 million and $1.0 million in 2017 and 2016, respectively. 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 timing and 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 an assessment of the deferred tax assets during the third and fourth quarters of 2017, weighing the positive and negative evidence as outlined in ASC 740, 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 $192.3 million for 2017, which was recorded in income tax (benefit) expense on our consolidated statements of operations. During the quarter ended December 31, 2017, as a result of the Tax Act, principally the change to allow an indefinite carryforward period of net operating losses, we reassessed our analysis and decreased our related valuation allowance by $53.6 million. As of December 31, 2017, our valuation allowance against a majority of our net deferred tax assets was $109.7 million. 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 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. As of December 31, 2017, we have net operating loss carryforwards in various states totaling approximately $278.9 million, which expire in various years between 2024 and 2037 if not used. As of December 31, 2017, we had approximately $25.1 million of long‑term liabilities relating to uncertain tax positions consisting of approximately $20.8 million in gross unrecognized tax benefits (primarily state tax positions before the offsetting effect of federal income tax) and $4.3 million in gross accrued interest and penalties. If recognized, approximately $11.1 million of the net unrecognized tax benefits would impact the effective tax rate, with the remainder impacting other accounts, primarily deferred taxes. It is reasonably possible that up to $4.3 million reduction of unrecognized tax benefits and related interest may occur within the next 12 months as a result of the expiration of statutes of limitations. We record interest on unrecognized tax benefits as a component of interest expense, while penalties are recorded as part of income tax expense. Related to the unrecognized tax benefits noted below, we recorded interest expense (benefit), of $1.1 million, $0.5 million and ($0.3) million for 2017, 2016 and 2015, respectively. We recorded penalty expense (benefit) of $0.3 million, $0.0 million and $0.1 million during 2017, 2016 and 2015, respectively. Accrued interest and penalties at December 31, 2017, December 25, 2016, and December 27, 2015, were approximately $4.3 million, $3.0 million and $2.5 million, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits consists of the following: Years Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 Balance at beginning of fiscal year $ 16,477 $ 15,621 $ 13,046 Increases based on tax positions in prior year 3,299 294 4,433 Decreases based on tax positions in prior year — (177) — Increases based on tax positions in current year 1,642 1,516 1,435 Settlements (164) — — Lapse of statute of limitations (490) (777) (3,293) Balance at end of fiscal year $ 20,764 $ 16,477 $ 15,621 As of December 31, 2017, the following tax years and related taxing jurisdictions were open: Open Years Under Taxing Jurisdiction Tax Year Exam Federal 2014-2017 — California 2013-2017 2013-2014 Other States 2006-2017 2013-2015 |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2017 | |
EMPLOYEE BENEFITS | |
EMPLOYEE BENEFITS | 6. EMPLOYEE BENEFITS We maintain a qualified defined benefit pension plan (“Pension Plan”), which covers certain eligible employees. Benefits are based on years of service that continue to count toward early retirement calculations and vesting previously earned. No new participants may enter the Pension Plan and no further benefits will accrue. We also have a limited number of supplemental retirement plans to provide certain key employees and retirees 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. We paid $8.7 million, $8.7 million and $8.5 million in 2017, 2016 and 2015, respectively, for these plans. We also provide or subsidize certain life insurance benefits for employees. 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 2016 and 2015, we have reclassified service costs of $18.8 million and $11.7 million, respectively, as an offset to expected return on plan assets in the table below. This change in presentation had no impact on net retirement expenses. The following tables provide reconciliations of the pension and post‑ retirement benefit plans’ benefit obligations, fair value of assets and funded status as of December 31, 2017, and December 25, 2016: Pension Benefits Post-retirement Benefits (in thousands) 2017 2016 2017 2016 Change in Benefit Obligation Benefit obligation, beginning of year $ 1,941,907 $ 1,931,320 $ 7,403 $ 9,883 Interest cost 85,468 88,668 271 389 Plan participants’ contributions — — 12 21 Actuarial (gain)/loss 152,353 78,058 707 (1,937) Gross benefits paid (99,715) (106,639) (768) (953) Plan settlements (1) — (49,500) — — Benefit obligation, end of year $ 2,080,013 $ 1,941,907 $ 7,625 $ 7,403 Pension Benefits Post-retirement Benefits (in thousands) 2017 2016 2017 2016 Change in Plan Assets Fair value of plan assets, beginning of year $ 1,335,435 $ 1,349,603 $ — $ — Actual return on plan assets 233,495 86,154 — — Employer contribution 8,711 55,817 756 932 Plan participants’ contributions — — 12 21 Gross benefits paid (99,715) (106,639) (768) (953) Plan settlements (1) — (49,500) — — Fair value of plan assets, end of year $ 1,477,926 $ 1,335,435 $ — $ — (1) During 2016, the pension plan purchased annuities and settled obligations for a group of annuitants including retirees and surviving beneficiaries who currently receive a benefit of $180.00 per month or less from the Pension Plan. Pension Benefits Post-retirement Benefits (in thousands) 2017 2016 2017 2016 Funded Status Fair value of plan assets $ 1,477,926 $ 1,335,435 $ — $ — Benefit obligations (2,080,013) (1,941,907) (7,625) (7,403) Funded status and amount recognized, end of year $ (602,087) $ (606,472) $ (7,625) $ (7,403) Amounts recognized in the consolidated balance sheets at December 31, 2017, and December 25, 2016, consists of: Pension Benefits Post-retirement Benefits (in thousands) 2017 2016 2017 2016 Current liability $ (8,941) $ (8,647) $ (1,008) $ (1,063) Noncurrent liability (593,146) (597,825) (6,617) (6,340) $ (602,087) $ (606,472) $ (7,625) $ (7,403) Amounts recognized in accumulated other comprehensive income for the years ended December 31, 2017, and December 25, 2016, consist of: Pension Benefits Post-retirement Benefits (in thousands) 2017 2016 2017 2016 Net actuarial loss/(gain) $ 757,096 $ 769,004 $ (7,820) $ (8,745) Prior service cost/(credit) — — (6,534) (9,414) $ 757,096 $ 769,004 $ (14,354) $ (18,159) The elements of retirement and post‑retirement costs are as follows: Years Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 Pension plans: Interest Cost $ 85,468 $ 88,668 $ 84,994 Expected return on plan assets (89,569) (89,629) (94,603) Actuarial loss 20,335 18,382 22,194 Net pension expense 16,234 17,421 12,585 Net post-retirement benefit credit (2,830) (2,645) (2,614) Net retirement expenses $ 13,404 $ 14,776 $ 9,971 Our discount rate was determined by matching a portfolio of long‑term, non‑callable, high-quality bonds to the plans’ projected cash flows. Weighted average assumptions used for valuing benefit obligations were: Pension Benefit Post-retirement Obligations Obligations 2017 2016 2017 2016 Discount rate 3.91 % 4.52 % 3.60 % 3.95 % Weighted average assumptions used in calculating expense: Pension Benefit Expense Post-retirement Expense December 31, December 25, December 27, December 31, December 25, December 27, 2017 2016 2015 2017 2016 2015 Expected long-term return on plan assets 7.75 % 7.75 % 7.75 % N/A N/A N/A Discount rate 4.52 % 4.71 % 4.24 % 3.95 % 4.21 % 3.69 % Contributions and Cash Flows In February 2016, we voluntarily contributed certain of our real property appraised at $47.1 million to our Pension Plan, and we entered into leases for the contributed properties. We expected our required pension contribution under the Employee Retirement Income Security Act to be approximately $2.0 million in 2016, and the contribution of real property exceeded our required pension contribution for 2016. The contribution and leaseback of these properties in 2016 was treated as a financing transaction 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 until the sale of the property by the Pension Plan. At the time of our contribution, our pension obligation was reduced and a financing obligation was recorded. The financing obligation will be reduced by a portion of the lease payments made to the Pension Plan each month. We did not have a required cash minimum contribution to the Pension Plan in 2017 or 2015 and made no voluntary cash contributions. Expected benefit payments to retirees under our retirement and post‑retirement plans over the next 10 years are summarized below: Retirement Post-retirement (in thousands) Plans (1) Plans 2018 $ 107,928 $ 1,008 2019 111,699 919 2020 111,894 840 2021 115,898 768 2022 119,016 698 2023-2027 615,986 2,612 Total $ 1,182,421 $ 6,845 (1) Largely to be paid from the qualified defined benefit pension plan. Pension Plan Assets Our investment policies are designed to maximize Pension Plan returns within reasonable and prudent levels of risk, with an investment horizon of greater than 10 years so that interim investment returns and fluctuations are viewed with appropriate perspective. The policy also aims to maintain sufficient liquid assets to provide for the payment of retirement benefits and plan expenses, hence, small portions of the equity and debt investments are held in marketable mutual funds. Our policy seeks to provide an appropriate level of diversification of assets, as reflected in its target allocations, as well as limits placed on concentrations of equities in specific sectors or industries. It uses a mix of active managers and passive index funds and a mix of separate accounts, mutual funds, common collective trusts and other investment vehicles. Our assumed long‑term return on assets was developed using a weighted average return based upon the Pension Plan’s portfolio of assets and expected returns for each asset class, taking into account projected inflation, interest rates and market returns. The assumed return was also reviewed in light of historical and recent returns in total and by asset class. As of December 31, 2017, and December 25, 2016, the target allocations for the Pension Plan assets were 61% equity securities, 33% debt securities and 6% real estate securities. The table below summarizes the Pension Plan’s financial instruments that are carried at fair value on a recurring basis by the fair value hierarchy levels discussed above, as of the year ended December 31, 2017: 2017 Plan Assets (in thousands) Level 1 Level 2 Level 3 NAV Total Cash and cash equivalents $ 8,498 $ — $ — $ — $ 8,498 Mutual funds 478,565 — — — 478,565 Common collective trusts — — — 923,304 923,304 Real estate — — 58,050 — 58,050 Private equity funds — — 9,509 — 9,509 Total $ 487,063 $ — $ 67,559 $ 923,304 $ 1,477,926 The table below summarizes changes in the fair value of the Pension Plan’s Level 3 investment assets held for the year ended December 31, 2017: (in thousands) Real Estate Private Equity Total Beginning Balance, December 25, 2016 $ 57,531 $ 8,149 $ 65,680 Realized gains (losses) 4,632 — 4,632 Transfer in or out of level 3 (4,614) — (4,614) Unrealized gains (losses) 501 1,360 1,861 Ending Balance, December 31, 2017 $ 58,050 $ 9,509 $ 67,559 The table below summarizes the Pension Plan’s financial instruments that are carried at fair value on a recurring basis by the fair value hierarchy levels discussed above, as of the year ended December 25, 2016: 2016 Plan Assets (in thousands) Level 1 Level 2 Level 3 NAV Total Cash and cash equivalents $ 677 $ — $ — $ — $ 677 Mutual funds 444,698 — — — 444,698 Common collective trusts — — — 816,435 816,435 Real estate — — 57,531 — 57,531 Private equity funds — — 8,149 — 8,149 Total $ 445,375 $ — $ 65,680 $ 816,435 $ 1,327,490 Pending trades 7,945 $ 1,335,435 The table below summarizes changes in the fair value of the Pension Plan’s Level 3 investment assets held for the year ended December 25, 2016: (in thousands) Real Estate Private Equity Total Beginning Balance, December 27, 2015 $ 50,360 $ 7,282 $ 57,642 Purchases, issuances, sales, settlements 47,130 (186) 46,944 Realized gains 8,746 — 8,746 Transfer in or out of level 3 (43,046) — (43,046) Unrealized gains (5,659) 1,053 (4,606) Ending Balance, December 25, 2016 $ 57,531 $ 8,149 $ 65,680 Cash and cash equivalents: The carrying value of these items approximates fair value. Mutual funds: These investments are publicly traded investments, which are valued using the Net Asset Value (NAV). The NAV of the mutual funds is a quoted price in an active market. The NAV is determined once a day after the closing of the exchange based upon the underlying assets in the fund, less the fund’s liabilities, expressed on a per‑share basis. Corporate debt instruments: The fair value of corporate debt instruments is based on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for identical or similar debt instruments, the fair value is based upon an industry valuation model, which maximizes observable inputs. Common collective trusts: These investments are valued based on the NAV of the underlying investments and are provided by the fund issuers. NAV for these funds represent the quoted price in a non‑market environment. There are no restrictions on participants’ ability to withdraw funds from the common collective trusts. The attributes relating to the nature and risk of such investments are as follows: (in thousands) 2017 2016 Redemption Frequency (if Currently Eligible) Redemption Notice Period U.S equity funds (1) $ 353,555 $ 310,616 Daily None International equity funds (2) 569,749 505,819 Daily-Monthly None Total $ 923,304 $ 816,435 ________________ (1) U.S. equity fund strategies - Investments in U.S. equities are defined as commitments to U.S. dollar-denominated, publicly traded common stocks of U.S. domiciled companies and securities convertible into common stock. The aggregate U.S. equity portfolio is expected to exhibit characteristics comparable to, but not necessarily equal to, that of the Russell 3000 Index. (2) International equity funds strategies - Investments in international developed markets equities are defined as commitments to publicly traded common stocks and securities convertible into common stock issued by companies primarily domiciled in countries outside of the U.S. Real estate: In February 2016, we contributed certain of our real property appraised at $47.1 million to our Pension Plan, and we entered into leaseback arrangements for the contributed facilities. The Pension Plan obtained independent appraisals of the property, and based on these appraisals, the Pension Plan recorded the contribution at fair value. This contribution was measured at fair value using Level 3 inputs, which primarily consisted of expected cash flows and discount rate that we estimated market participants would seek for bearing the risk associated with such assets. The properties are managed on behalf of the Pension Plan by an independent fiduciary, and the terms of the leases between us and the Pension Plan were negotiated with the fiduciary. 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. Certain properties from the 2011 contributions have been sold by the Pension Plan and others may be sold by the Pension Plan in the future. In May 2016, the Pension Plan sold certain real property in Charlotte, North Carolina, for approximately $34.3 million, and we terminated our lease on the property. The property was included in the 2011 contributions to the Pension Plan discussed previously. As a result of the sale by the Pension Plan, we recognized a $1.1 million loss on the sale of the Charlotte property in the other operating expenses on the consolidated statement of operations for 2016. At the time of sale, our financial obligation was reduced by $25.1 million and we derecognized the assets with a carrying value of $26.2 million from PP&E. In October 2016, the Pension Plan sold certain real property in Olympia, Washington, for approximately $4.8 million. The property was included in the 2011 contributions to the Pension Plan discussed previously. As a result of the sale by the Pension Plan, we recognized approximately $0.2 million loss on the sale of the Olympia property in other operating expenses on the consolidated statement of operations during the quarter ended December 25, 2016. At the time of sale, our financial obligation was reduced by $2.6 million and we derecognized the assets with a carrying value of $2.8 million from PP&E. Private equity funds: Private equity funds represent investments in limited partnerships, which invest in start‑up or other private companies. Fair value was estimated based on valuations of comparable public companies, recent sales of comparable private and public companies and discounted cash flow analysis of portfolio companies and was measured using Level 3 inputs. 401(k) Plan We have a deferred compensation plan (“401(k) plan”), which enables eligible employees to voluntarily defer compensation. During the fourth quarter of 2017, we announced the reinstatement of a company matching contribution program beginning with the first pay check paid in 2018. The company matching contributions had been previously suspended in 2009. Also during the fourth quarter of 2017, we terminated the 401(k) plan supplemental contribution that was tied to performance, effective immediately. |
CASH FLOW INFORMATION
CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
CASH FLOW INFORMATION | |
CASH FLOW INFORMATION | 7. CASH FLOW INFORMATION Cash paid for interest and income taxes and other non-cash activities consisted of the following: Year Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 Interest paid (net of amount capitalized) $ 68,861 $ 73,373 $ 80,514 Income taxes paid (net of refunds) 12,437 2,454 207,043 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 — (27,632) — Reduction of PP&E due to sale of real properties by pension plan — (29,002) — The income tax payments in 2015 were primarily related to the net taxes paid for a gain on the sale of a previously owned equity investment in the fourth quarter of 2014, offset by tax losses on bond repurchases in the fourth quarter of 2014. While the transactions occurred in the fourth quarter 2014, the actual tax payments were made in the first quarter of 2015. Other non-cash investing and financing activities related to pension plan transactions consists of the contribution of real property to the Pension Plan in 2016, the sale of two of the properties by the Pension Plan in 2016, described further in Note 6. For 2017, the $7.3 million in distributions from CareerBuilder, which represented a return of investment, was recorded as an investing activity. For 2016 and 2015, distributions from CareerBuilder of $6.0 million and $7.5 million, respectively, represented a return on investment, and were recorded as operating activities on our consolidated statements of cash flows. Other non-cash investing activities from operations, related to the recognition of intangible assets during 2016 were $3.1 million. There were no such transactions in 2017 or 2015. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 8. COMMITMENTS AND CONTINGENCIES We have certain other obligations for various contractual agreements that secure future rights to goods and services to be used in the normal course of operations. These include purchase commitments for printing outsource agreements, planned capital expenditures, lease commitments and self‑insurance obligations. The following table summarizes our minimum annual contractual obligations as of December 31, 2017: Payments Due By Period (in thousands) 2018 2019 2020 2021 2022 Thereafter Total Purchase obligations (1) $ 19,674 $ 16,956 $ 4,085 $ 1,227 $ — $ — $ 41,942 Operating leases (2) Lease obligations 12,763 11,301 10,396 9,602 9,420 39,406 92,888 Sublease income (3,837) (2,150) (637) (572) (565) (634) (8,395) Net lease obligation 8,926 9,151 9,759 9,030 8,855 38,772 84,493 Workers’ compensation obligations (3) 2,593 1,578 1,127 844 668 5,300 12,110 Total $ 31,193 $ 27,685 $ 14,971 $ 11,101 $ 9,523 $ 44,072 $ 138,545 (1) Represents our purchase obligations primarily related to printing outsource agreements and capital expenditures for PP&E expiring at various dates through 2021. (2) Represents minimum rental commitments under operating leases with non‑cancelable terms in excess of one year and sublease income from leased space with non-cancelable terms in excess of one year. We rent certain facilities and equipment under operating leases expiring at various dates through 2028. Total rental expense, included in other operating expenses, amounted to $13.4 million, $15.4 million and $11.6 million in 2017, 2016 and 2015, respectively. Most of the leases provide that we pay taxes, maintenance, insurance and certain other operating expenses applicable to the leased premises in addition to the minimum monthly payments. Some of the operating leases have built in escalation clauses. We sublease office space to other companies under non-cancellable agreements that expire at various dates through 2023. Sublease income from operating leases totaled $4.8 million, $4.6 million and $4.6 million in 2017, 2016 and 2015, respectively. (3) We retain the risk for workers’ compensation resulting from uninsured deductibles per accident or occurrence that are subject to annual aggregate limits. Losses up to the deductible amounts are accrued based upon known claims incurred and an estimate of claims incurred but not reported. For the year ended December 31, 2017, we compiled our historical data pertaining to the self‑insurance experiences and actuarially developed the ultimate loss associated with our self‑insurance programs for workers’ compensation liability. We believe that the actuarial valuation provides the best estimate of the ultimate losses to be expected under these programs. At December 31, 2017, the undiscounted ultimate losses of all our self‑insurance reserves related to our workers’ compensation liabilities were $13.0 million, net of estimated insurance recoveries of approximately $2.2 million. At December 25, 2016, the undiscounted ultimate losses of all our self-insurance reserves related to workers’ compensation liabilities were $12.2 million, net of estimated insurance recoveries of approximately $3.2 million. We discount the net amounts above to present value using an approximate risk‑free rate over the average life of our insurance claims. For the years ended December 31, 2017, and December 25, 2016, the discount rate used was 2.3% and 1.6%, respectively. The present value of all self‑insurance reserves, net of estimated insurance recoveries, for our workers’ compensation liability recorded at December 31, 2017, and December 25, 2016, was $12.1 million and $13.1 million, respectively. Legal Proceedings and other contingent claims 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. 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 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. 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. 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. This matter has been fully resolved by the parties and the Court dismissed all claims, with prejudice, on February 7, 2018. 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 consolidated financial statements. No material amounts for any losses from litigation that may ultimately occur have been recorded in the 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 December 31, 2017, we had $31.7 million of standby letters of credit secured under the LC Agreement. The amounts of standby letters of credit declined to $29.7 million in January 2018. |
COMMON STOCK AND STOCK PLANS
COMMON STOCK AND STOCK PLANS | 12 Months Ended |
Dec. 31, 2017 | |
COMMON STOCK AND STOCK PLANS | |
COMMON STOCK AND STOCK PLANS | 9. COMMON STOCK AND STOCK PLANS Common Stock We have two classes of stock; Class A and Class B Common Stock. Both classes of stock participate equally in dividends. Holders of Class B are entitled to one vote per share and to elect as a class 75% of the Board of Directors, rounded down to the nearest whole number. Holders of Class A Common Stock are entitled to one-tenth of a vote per share and to elect as a class 25% of the Board of Directors, rounded up to the nearest whole number. Class B Common Stock is convertible at the option of the holder into Class A Common Stock on a share‑for‑share basis. The holders of shares of Class B Common Stock are parties to an agreement, the intent of which is to preserve control of the Company by the McClatchy family. Under the terms of the agreement, the Class B shareholders have agreed to restrict the transfer of any shares of Class B Common Stock to one or more “Permitted Transferees,” subject to certain exceptions. A “Permitted Transferee” is any of our current holders of shares of Class B Common Stock; any lineal descendant of Charles K. McClatchy (1858 to 1936); or a trust for the exclusive benefit of, or in which all of the remainder beneficial interests are owned by, one or more lineal descendants of Charles K. McClatchy. Generally, Class B shares can be converted into shares of Class A Common Stock and then transferred freely (unless, following conversion, the outstanding shares of Class B Common Stock would constitute less than 25% of the total number of all our outstanding shares of common stock). In the event that a Class B shareholder attempts to transfer any shares of Class B Common Stock in violation of the agreement, or upon the happening of certain other events enumerated in the agreement as “Option Events,” each of the remaining Class B shareholders has an option to purchase a percentage of the total number of shares of Class B Common Stock proposed to be transferred equal to such remaining Class B shareholder’s ownership percentage of the total number of outstanding shares of Class B Common Stock. If all the shares proposed to be transferred are not purchased by the remaining Class B shareholders, we have the option of purchasing the remaining shares. The agreement can be terminated by the vote of the holders of 80% of the outstanding shares of Class B Common Stock who are subject to the agreement. The agreement will terminate on September 17, 2047, unless terminated earlier in accordance with its terms. In 2015, our Board of Directors authorized a share repurchase program for the repurchase of up to $15.0 million of our Class A Common Stock through December 31, 2016. This program was further amended in May 2016 to authorize a total of up to $20.0 million to repurchase shares. The shares were repurchased from time to time depending on prevailing market prices, availability, and market conditions, among other factors. During the year ended December 25, 2016, we repurchased approximately 0.7 million shares at an average price of $11.83 per share. Inception to date, we repurchased 1.3 million shares at an average price of $12.28 per share or $15.6 million of the total buyback approved. Stock Plans During 2017, we had two stock‑based compensation plans, which are described below. The McClatchy Company 2004 Stock Incentive Plan (“2004 Plan”) reserved 900,000 Class A Common shares for issuance to key employees and outside directors. The options vested in installments over four years, and once vested are exercisable up to 10 years from the date of grant. In addition, the 2004 Plan permitted the following type of incentive awards in addition to common stock, stock options and stock appreciation rights (“SARs”): restricted stock, unrestricted stock, stock units and dividend equivalent rights. The 2004 Plan was frozen in May 2012 so that no additional awards could be granted under the plan. The McClatchy Company 2012 Omnibus Incentive Plan (“2012 Plan”) was adopted in 2012 and 500,000 shares of Class A Common Stock were reserved for issuance under the 2012 Plan plus the number of shares available for future awards under the 2004 Plan as of the date of May 16, 2012 (the shareholder meeting date) plus the number of shares subject to awards outstanding under the 2004 Plan as of May 16, 2012, which terminate by expiration, forfeiture, cancellation or otherwise without the issuance of such shares. The 2012 Plan was further amended in May 2017, among other things, to increase the number of shares of Class A Common Stock reserved for issuance by 500,000 shares. The 2012 Plan, as amended, generally provides for granting of stock options or SARs only at an exercise price at least equal to fair market value on the grant date; a 10-year maximum term for stock options and SARs; no re-pricing of stock options or SARs without prior shareholder approval; and no reload or “evergreen” share replenishment features. Stock Plans Activity In 2017, we granted 4,500 shares of Class A Common Stock to each non-employee director under the 2012 Plan. In accordance with The McClatchy Company Director Deferral Program (“Deferral Program”), two directors elected to defer issuance of their 2017 grants. As such, 36,000 shares were issued and 9,000 were deferred until the director terminates from the board of directors. In 2016, we granted 4,500 shares of Class A Common Stock to each non-employee director under the 2012 Plan. Three directors elected to defer issuance of their 2016 grants under the Deferral Program. As such, 31,500 shares were issued and 13,500 were deferred until the director terminates from the board of directors. One of the directors who deferred his award in 2016 terminated from the board of directors during 2017 and therefore was issued his shares. In 2015, we granted 1,500 shares of Class A Common Stock to each non‑employee director, resulting in the issuance of 15,000 shares from the 2012 Plan. We granted restricted stock units (“RSUs”) at the grant date fair value to certain key employees under the 2012 Plan as summarized below. Fair value for RSUs is based on our Class A Common Stock closing price, as reported by the NYSE American, on the date of grant. The RSUs generally vest over three years after grant date but terms of each grant are at the discretion of the compensation committee of the board of directors. The following table summarizes the RSUs stock activity: Weighted Average Grant Date Fair RSUs Value Nonvested — December 28, 2014 132,955 $ 36.20 Granted 136,530 $ 22.80 Vested (97,000) $ 28.50 Forfeited (18,605) $ 30.80 Nonvested — December 27, 2015 153,880 $ 29.83 Granted 170,440 $ 11.80 Vested (112,895) $ 24.57 Forfeited (7,280) $ 16.32 Nonvested — December 25, 2016 204,145 $ 18.17 Granted 254,405 $ 9.99 Vested (206,776) $ 16.14 Forfeited (5,980) $ 12.86 Nonvested — December 31, 2017 245,794 $ 11.55 As of December 31, 2017, the total fair value of the RSUs that vested during the period was $2.1 million. As of December 31, 2017, there were $1.7 million of unrecognized compensation costs for nonvested RSUs, which are expected to be recognized over 1.7 years. When SARs are granted, they are granted at grant date fair value to certain key employees from the 2012 Plan. Fair value for SARs is determined using a Black-Scholes option valuation model that uses various assumptions, including expected life in years, volatility and risk-free interest rate. The SARs generally vest four years after grant date but terms of each grant is at the discretion of the compensation committee of the board of directors. Outstanding SARs are summarized as follows: Weighted Aggregate Average Intrinsic Value SARs Exercise Price (in thousands) Outstanding December 28, 2014 384,875 $ 92.81 $ 1,542 Forfeited (6,875) $ 26.09 Expired (57,875) $ 207.56 Outstanding December 27, 2015 320,125 $ 73.49 $ — Forfeited (50) $ 27.60 Expired (27,325) $ 322.20 Outstanding December 25, 2016 292,750 $ 50.29 $ — Expired (136,575) $ 71.07 Outstanding December 31, 2017 156,175 $ 32.12 $ — Vested and Expected to Vest December 31, 2017 156,175 $ 32.12 $ — SARs exercisable: December 27, 2015 277,413 $ — December 25, 2016 279,100 $ — December 31, 2017 156,175 $ — As of December 31, 2017, there was no unrecognized compensation costs related to SARs granted under our plans. The weighted average remaining contractual life of SARs vested and exercisable at December 31, 2017, was 2.5 years. The following tables summarize information about SARs outstanding in the stock plans at December 31, 2017: Average Remaining Weighted Weighted Range of Exercise SARs Contractual Average SARs Average Prices Outstanding Life Exercise Price Exercisable Exercise Price $17.00 – $27.60 85,925 2.82 $ 25.03 85,925 $ 25.03 $34.20 – $97.30 70,250 2.12 $ 40.79 70,250 $ 40.79 Total 156,175 2.50 $ 32.12 156,175 $ 32.12 Stock‑Based Compensation Total stock‑based compensation expense consisted of the following: Years Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 Stock-based compensation expense $ 2,475 $ 3,130 $ 3,178 |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2017 | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 10. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) Our business is somewhat seasonal with peak revenues and profits generally occurring in the fourth quarter of each year as a result of increased advertising activity during the holiday season. The other quarters are historically slower quarters for revenues and profits. As discussed in Note 1, our fiscal year 2017 consisted of a 53-week period and therefore, each quarter represented 13 weeks, except for the quarter ended December 31, 2017, which was 14 weeks. All quarters in 2016 consisted of 13 weeks each. Our quarterly results are summarized as follows: Quarters Ended March 26, June 25, September 24, December 31, (in thousands, except per share amounts) 2017 2017 2017 2017 Net revenues $ 221,212 $ 225,120 $ 212,604 $ 244,656 Operating income (loss) $ (4,519) $ 12,110 $ 4,611 $ 29,963 Net income (loss) $ (95,575) $ (37,446) $ (260,476) $ 61,139 Net income (loss) per share - diluted $ (12.60) $ (4.91) $ (34.11) $ 7.91 Quarters Ended March 27, June 26, September 25, December 25, (in thousands, except per share amounts) 2016 2016 2016 2016 Net revenues $ 237,979 $ 242,234 $ 234,701 $ 262,179 Operating income (loss) $ (2,353) $ 1,001 $ 5,229 $ 33,439 Net income (loss) $ (12,741) $ (14,734) $ (9,804) $ 3,086 Net income (loss) per share - diluted $ (1.58) $ (1.89) $ (1.30) $ 0.40 The following are significant activities in 2017: · During the quarters ended March 26, 2017, and June 25, 2017, we recognized impairment charges of $123.0 million and $45.6 million, respectively, related our investment in CareerBuilder, as described in Note 2. · During the quarter ended September 24, 2017, we recognized masthead impairment charges of $8.7 million (see Note 1 and Note 3) and we recorded a valuation allowance charge related to our deferred tax assets of $245.4 million (see Note 1 and Note 5). · During the quarter ended December 31, 2017, we recognized masthead impairment charges of $12.8 million as described in Note 1 and Note 3. We also recorded a reduction to our valuation allowance charge of $53.6 million along with a benefit of $5.5 million due to the Tax Act. (see Note 1 and Note 5) The following are significant activities in 2016: During the quarter ended December 25, 2016, we recognized masthead impairment charges of $9.2 million as described in Note 1 and Note 3. |
SIGNIFICANT ACCOUNTING POLICI20
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Business and basis of accounting | The McClatchy Company (the “Company,” “we,” “us” or “our”) operates 30 media companies in 14 states, providing each of its communities with high-quality news and advertising services in a wide array of digital and print formats. We are a publisher of brands such as the Miami Herald , The Kansas City Sta r, The Sacramento Bee , The Charlotte Observer , The (Raleigh) News & Observer , and the (Fort Worth) Star-Telegram. 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 sold a majority of our interest in CareerBuilder LLC (“CareerBuilder”), which reduced our ownership interest in CareerBuilder from 15.0% to approximately 3.0%. Our fiscal year ends on the last Sunday in December. Fiscal year December 31, 2017, consisted of a 53-week period. Fiscal years ended December 25, 2016, and December 27, 2015, consisted of 52-week periods. 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 (“SEC”) 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 consolidated financial statements include the Company and our subsidiaries. Intercompany items and transactions are eliminated. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation in our 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 2016 and 2015, we reclassified net periodic pension and postretirement costs of $14.8 million and $10.0 million, respectively, from the compensation line item in operating expenses to the retirement benefit expense line item in non-operating income (expense) on the consolidated statements of operations. |
Revenue recognition | Revenue recognition We recognize revenues (i) from advertising placed in a newspaper, on a website and/or a mobile service over the advertising contract period or as services are delivered, as appropriate; (ii) from the sale of certain third party digital advertising products and services on a net basis, with wholesale fees reported as a reduction of the associated revenues; and (iii) for audience subscriptions as newspapers and access to online sites are delivered over the applicable subscription term. Print audience revenues are recorded net of direct delivery costs for contracts that are not on a “fee-for-service” arrangement. Print audience revenues on our “fee-for-service” contracts are recorded on a gross basis and associated delivery costs are recorded as other operating expenses. We enter into certain revenue transactions, primarily related to advertising contracts and circulation subscriptions that are considered multiple element arrangements (arrangements with more than one deliverable). As such we must: (i) determine whether and when each element has been delivered; (ii) determine fair value of each element using the selling price hierarchy of vendor‑specific objective evidence of fair value, third party evidence or best estimated selling price, as applicable and (iii) allocate the total price among the various elements based on the relative selling price method. Other revenues are recognized when the related product or service has been delivered. Revenues are recorded net of estimated incentives, including special pricing agreements, promotions and other volume‑based incentives and net of sales tax collected from the customer. Revisions to these estimates are charged to revenues in the period in which the facts that give rise to the revision become known. |
Concentrations of credit risks | Concentrations of credit risks Financial instruments, which potentially subject us to concentrations of credit risks, are principally cash and cash equivalents and trade accounts receivables. Cash and cash equivalents are placed with major financial institutions. As of December 31, 2017, substantially all of our cash and cash equivalents are in excess of the FDIC insured limits. We have not experienced any losses related to amounts in excess of FDIC limits. We routinely assess the financial strength of significant customers and this assessment, combined with the large number and geographic diversity of our customers, limits our concentration of risk with respect to trade accounts receivable. |
Allowance for doubtful accounts | Allowance for doubtful accounts We maintain an allowance account for estimated losses resulting from the risk that our customers will not make required payments. At certain of our media companies we establish our allowances based on collection experience, aging of our receivables and significant individual account credit risk. At the remaining media companies we use the aging of accounts receivable, reserving for all accounts due 90 days or longer, to establish allowances for losses on accounts receivable; however, if we become aware that the financial condition of specific customers has deteriorated, additional allowances are provided. We provide an allowance for doubtful accounts as follows: Years Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 Balance at beginning of year $ 3,254 $ 4,451 $ 5,900 Charged to costs and expenses 10,870 10,137 8,181 Amounts written off (10,899) (11,334) (9,630) Balance at end of year $ 3,225 $ 3,254 $ 4,451 |
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 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 consolidated statement of operations. |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment (“PP&E”) are recorded at cost. Additions and substantial improvements, as well as interest expense incurred during construction, are capitalized. Capitalized interest was not material in 2017, 2016 or 2015. Expenditures for maintenance and repairs are charged to expense as incurred. When PP&E is sold or retired, the asset and related accumulated depreciation are removed from the accounts and the associated gain or loss is recognized. Property, plant and equipment consisted of the following: December 31, December 25, Estimated (in thousands) 2017 2016 Useful Lives Land $ 36,491 $ 50,844 Building and improvements 289,574 314,018 - years Equipment 555,204 594,005 - years (1) Construction in process 2,696 1,489 883,965 960,356 Less accumulated depreciation (626,326) (662,850) Property, plant and equipment, net $ 257,639 $ 297,506 (1) Presses are 9 - 25 years and other equipment is 2 - 15 years We record depreciation using the straight‑line method over estimated useful lives. The useful lives are estimated at the time the assets are acquired and are based on historical experience with similar assets and anticipated technological changes. Our depreciation expense was $30.8 million, $41.5 million and $53.2 million in 2017, 2016 and 2015, respectively. During 2017, 2016 and 2015, we incurred $0.3 million, $7.0 million and $10.3 million, respectively, in accelerated depreciation related to the production equipment no longer needed as a result of either outsourcing our printing process at certain of our media companies or replacing an old printing press at one of our media companies. We review the carrying amount of long‑lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events that result in an impairment review include the decision to close a location or a significant decrease in the operating performance of the long‑lived asset. Long‑lived assets are considered impaired if the estimated undiscounted future cash flows of the asset or asset group are less than the carrying amount. For impaired assets, we recognize a loss equal to the difference between the carrying amount of the asset or asset group and its estimated fair value, which is recorded in operating expenses in the consolidated statements of operations. The estimated fair value of the asset or asset group is based on the discounted future cash flows of the asset or asset group. The asset group is defined as the lowest level for which identifiable cash flows are available. |
Assets held for sale | Assets held for sale Assets held for sale includes land and buildings at four of our media companies that we began to actively market for sale during 2017. No impairment charges were incurred during 2017 as a result of classifying these assets into assets held for sale. |
Investments in unconsolidated companies | Investments in unconsolidated companies We have accounted for non-marketable equity investments either under the equity or cost method. Investments through which we exercise significant influence but do not have control over the investee are accounted for under the equity method. Investments through which we are not able to exercise significant influence over the investee are accounted for under the cost method. See Note 2 for discussion of investments in unconsolidated companies. |
Financial obligations | Financial obligations Financial obligations consists of contributions of real properties to the Pension Plan in 2016 and 2011 (see Note 6), and real property previously owned by The Sacramento Bee that was sold and leased back during the third quarter of 2017. |
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 companies operations in the West and Midwest, while the other operating segment (“Eastern Segment”) consists primarily of media company operations in the Carolinas and East. |
Goodwill and intangible impairment | Goodwill and intangible impairment 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 determined that no impairment charge was required in 2017 or 2016. We determined an impairment charge of $290.9 million in 2015 was required. Also see Note 3. 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 which utilizes a discounted cash flow model, 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 masthead fair values 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, and a total of $21.5 million in 2017. We determined that impairment charges of $9.2 million and $13.9 million in 2016 and 2015, respectively, were required. Also see Note 3. Long‑lived assets such as intangible assets subject to amortization (primarily advertiser and subscriber lists) are 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 2017, 2016 or 2015. |
Stock-based compensation | Stock‑based compensation All stock‑based compensation, 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 fair values. At December 31, 2017, we had two stock‑based compensation plans. See Note 9. |
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. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Act”) was enacted. The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, (i) reducing the U.S. federal corporate rate from 35% to 21%; (ii) eliminating the corporate alternative minimum tax (“AMT”) and changing how existing AMT credits can be realized; (iii) creating a new limitation on deductible interest expense; (iv) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017; (v) bonus depreciation that will allow for full expensing of qualified property; and (vi) limitations on the deductibility of certain executive compensation. The SEC staff issued Staff Accounting Bulletin 118 (“SAB 118”) in December 2017, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides that the measurement period for the tax effects of the Tax Act should not extend more than one year from the date the Tax Act was enacted. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but the company is able to determine a reasonable estimate, the company must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740, Income Taxes , on a basis of the provisions of the tax laws that were in effect immediately before the Tax Act was enacted. 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 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 accounting standards in the United States 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. |
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 December 31, 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 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 December 31, 2017, and December 25, 2016, the estimated fair value of long‑term debt, including the current portion, was $810.7 million and $844.0 million, respectively. At December 31, 2017, and December 25, 2016, the carrying value of long‑term debt, including the current portion, was $781.4 million and $846.2 million, respectively. Pension plan. As of December 31, 2017, and December 25, 2016, we had assets related to our qualified defined benefit pension plan measured at fair value. The required disclosures regarding such assets are presented in Note 6. 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 are measured at fair value on a nonrecurring basis are assets held for sale, goodwill, indefinite or finite lived intangible assets 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 rate that we estimate market participants would seek for bearing the risk associated with such assets. We incurred impairment charges during 2017 and 2016 on our newspaper masthead intangible assets (see above in Note 1) and equity method investments (see Note 2). |
Accumulated other comprehensive loss | Accumulated other comprehensive loss We record changes in our net assets from non‑owner sources in our consolidated statements of stockholders’ equity (deficit). Such changes relate primarily to valuing our pension liabilities, net of tax effects. 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 27, 2015 $ (411,956) $ (9,852) $ (421,808) Other comprehensive income (loss) before reclassifications — (1,157) (1,157) Amounts reclassified from AOCL (38,550) — (38,550) Other comprehensive income (loss) (38,550) (1,157) (39,707) Balance at December 25, 2016 $ (450,506) $ (11,009) $ (461,515) Other comprehensive income (loss) before reclassifications — 4,046 4,046 Amounts reclassified from AOCL 8,100 — 8,100 Other comprehensive income 8,100 4,046 12,146 Balance at December 31, 2017 $ (442,406) $ (6,963) $ (449,369) Amount Reclassified from AOCL (in thousands) Year Ended Year Ended December 31, December 25, Affected Line in the AOCL Component 2017 2016 Consolidated Statements of Operations Minimum pension and post-retirement liability $ 8,100 $ (64,250) Retirement benefit expense — 25,700 Income tax provision (benefit) (1) $ 8,100 $ (38,550) Net of tax _____________________ (1) There is no income tax benefit associated with the year ended December 31, 2017, due to the recognition of a valuation allowance. |
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: Years Ended December 31, December 25, December 27, (shares in thousands) 2017 2016 2015 Anti-dilutive stock options 278 431 517 |
Recently Adopted and Issued Not Yet Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In July 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-11, “ Inventory (Topic 330): 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 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 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 2016 and 2015, we reclassified net periodic pension and postretirement costs of $14.8 million and $10.0 million, respectively, from the compensation line item within operating expenses to the retirement benefit expense line item in non-operating income (expense) in the consolidated statement of operations to conform to the current year presentation. 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 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 (Topic 606). ” Topic 606 supersedes the revenue recognition requirements in Topic 605 “ Revenue Recognition .” 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. We will adopt Topic 606 on January 1, 2018, using the modified retrospective method applied to those contracts which were not completed as of that date. Upon adoption, we will recognize a cumulative adjustment related to audience grace period revenues that will increase our accumulated deficit by approximately $2.7 million, rather than retrospectively adjusting prior periods. We will begin to recognize audience grace period revenues based on variable consideration. We have completed our assessment and have not identified any other significant changes to our revenue recognition policies. We expect to identify similar performance obligations under Topic 606 as compared with the deliverables and separate units of account previously identified. As a result, we expect the timing of our revenue recognition to remain the same. We have also assessed the new accounting principles related to the deferral and amortization of contract acquisition and fulfillment costs and due to the short-term nature of such costs, we will utilize the practical expedient to continue to expense as incurred. Internal controls were assessed during our analysis of Topic 606. As a result, certain controls related to assessment, implementation and monitoring of contracts and revenue recognition were created and implemented to ensure revenue is recognized timely and accurately. We expect the adoption of Topic 606 will not have a material impact to our consolidated financial statements. 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. The adoption of this guidance will not have an impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) ” and it replaces the existing guidance in Topic 840, “ Leases. ” Topic 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. In 2017, the FASB issued an additional update: ASU No. 2018-01, which provides further guidance and clarification on specific items within the previously issued update. 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 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 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. The adoption of this guidance is not expected to have an impact on our consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, “ Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ” ASU 2018-02 allows for reclassification of stranded tax effects resulting from the Tax Act from accumulated other comprehensive income to retained earnings. Consequently, the standard eliminates the stranded tax effects resulting from the Tax Act and will improve the usefulness of information reported to financial statement users. However, because the standard only relates to the reclassification of the income tax effects of the Tax Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. This standard also requires certain disclosures about the stranded tax effects. It is effective for us for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. We are currently in the process of evaluating the impact of the adoption on our consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI21
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of allowance for doubtful accounts | Years Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 Balance at beginning of year $ 3,254 $ 4,451 $ 5,900 Charged to costs and expenses 10,870 10,137 8,181 Amounts written off (10,899) (11,334) (9,630) Balance at end of year $ 3,225 $ 3,254 $ 4,451 |
Schedule of components of property, plant and equipment | December 31, December 25, Estimated (in thousands) 2017 2016 Useful Lives Land $ 36,491 $ 50,844 Building and improvements 289,574 314,018 - years Equipment 555,204 594,005 - years (1) Construction in process 2,696 1,489 883,965 960,356 Less accumulated depreciation (626,326) (662,850) Property, plant and equipment, net $ 257,639 $ 297,506 (1) Presses are 9 - 25 years and other equipment is 2 - 15 years |
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 27, 2015 $ (411,956) $ (9,852) $ (421,808) Other comprehensive income (loss) before reclassifications — (1,157) (1,157) Amounts reclassified from AOCL (38,550) — (38,550) Other comprehensive income (loss) (38,550) (1,157) (39,707) Balance at December 25, 2016 $ (450,506) $ (11,009) $ (461,515) Other comprehensive income (loss) before reclassifications — 4,046 4,046 Amounts reclassified from AOCL 8,100 — 8,100 Other comprehensive income 8,100 4,046 12,146 Balance at December 31, 2017 $ (442,406) $ (6,963) $ (449,369) |
Schedule of reclassification out of accumulated other comprehensive income | Amount Reclassified from AOCL (in thousands) Year Ended Year Ended December 31, December 25, Affected Line in the AOCL Component 2017 2016 Consolidated Statements of Operations Minimum pension and post-retirement liability $ 8,100 $ (64,250) Retirement benefit expense — 25,700 Income tax provision (benefit) (1) $ 8,100 $ (38,550) Net of tax _____________________ (1) There is no income tax benefit associated with the year ended December 31, 2017, due to the recognition of a valuation allowance. |
Summary of anti-dilutive stock options | Years Ended December 31, December 25, December 27, (shares in thousands) 2017 2016 2015 Anti-dilutive stock options 278 431 517 |
INVESTMENTS IN UNCONSOLIDATED22
INVESTMENTS IN UNCONSOLIDATED COMPANIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INVESTMENTS IN UNCONSOLIDATED COMPANIES | |
Summary of carrying value of investments in unconsolidated companies | (in thousands) % Ownership December 31, December 25, Company Interest 2017 2016 CareerBuilder, LLC 3.0 $ 3,579 $ 236,936 Other Various 3,593 5,446 $ 7,172 $ 242,382 |
Summary of expenses incurred for products provided by unconsolidated companies and recorded in operating expenses | Years Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 CareerBuilder, LLC $ 354 $ 863 $ 1,001 Ponderay (general partnership) 9,162 10,767 8,200 |
Summary of financial information for company's investments in unconsolidated companies | December 31, December 25, (in thousands) 2017 2016 Current assets $ 112,694 $ 332,602 Noncurrent assets 57,477 629,604 Current liabilities 61,996 263,200 Noncurrent liabilities 161,440 187,188 Equity (53,235) 511,818 |
Summary of income statement information from the entities accounted for under the equity method | Years Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 Net revenues $ 685,415 $ 1,058,296 $ 988,871 Gross profit 508,248 882,493 843,680 Operating income 4,027 80,830 38,561 Net income (5,121) 68,534 39,143 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INTANGIBLE ASSETS AND GOODWILL | |
Schedule of intangible assets and goodwill | December 25, Impairment Amortization December 31, (in thousands) 2016 Additions Charges Expense 2017 Intangible assets subject to amortization $ 839,273 $ 11 $ — $ — $ 839,284 Accumulated amortization (711,723) — — (49,290) (761,013) 127,550 11 — (49,290) 78,271 Mastheads 171,436 — (21,485) — 149,951 Goodwill 705,174 — — — 705,174 Total $ 1,004,160 $ 11 $ (21,485) $ (49,290) $ 933,396 December 27, Impairment Amortization December 25, (in thousands) 2015 Additions Charges Expense 2016 Intangible assets subject to amortization $ 833,254 $ 6,019 $ — $ — $ 839,273 Accumulated amortization (663,735) — — (47,988) (711,723) 169,519 6,019 — (47,988) 127,550 Mastheads 179,132 1,500 (9,196) — 171,436 Goodwill 705,174 — — — 705,174 Total $ 1,053,825 $ 7,519 $ (9,196) $ (47,988) $ 1,004,160 |
Summary of accumulated changes in intangible assets and goodwill | December 31, 2017 December 25, 2016 Original Gross Accumulated Carrying Original Gross Accumulated Carrying (in thousands) Amount Impairment Amount Amount Impairment Amount Mastheads $ 684,500 $ (534,549) $ 149,951 $ 684,500 $ (513,064) $ 171,436 Goodwill 3,571,111 (2,865,937) 705,174 3,571,111 (2,865,937) 705,174 Total $ 4,255,611 $ (3,400,486) $ 855,125 $ 4,255,611 $ (3,379,001) $ 876,610 |
Amortization expense for the five succeeding fiscal years | Amortization Expense Year (in thousands) 2018 $ 47,660 2019 24,154 2020 803 2021 680 2022 655 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
LONG-TERM DEBT | |
Summary of company's long-term debt | Face Value at Carrying Value December 31, December 31, December 25, (in thousands) 2017 2017 2016 Notes: 9.00% senior secured notes due in 2022 $ 439,630 $ 433,819 $ 483,492 5.750% notes due in 2017 — — 16,749 7.150% debentures due in 2027 89,188 85,262 84,862 6.875% debentures due in 2029 276,230 262,311 261,061 Long-term debt $ 805,048 $ 781,392 $ 846,164 Less current portion 75,000 74,140 16,749 Total long-term debt, net of current $ 730,048 $ 707,252 $ 829,415 |
Redeemed or repurchase of notes | Te December 31, December 25, 2017 2016 (in thousands) Face Value Face Value 9.00% senior secured notes due in 2022 $ 51,785 $ 25,000 5.750% notes due in 2017 16,865 38,577 Total notes matured, repurchased or redeemed $ 68,650 $ 63,577 |
Annual maturities of debt | Payments Year (in thousands) 2018 $ 75,000 2019 — 2020 — 2021 — 2022 364,630 Thereafter 365,418 Debt principal $ 805,048 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
Schedule of income tax provision (benefit) related to continuing operations | Years Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 Current: Federal $ 15,042 $ 17,641 $ 13,317 State 4,017 2,569 (2,027) Deferred: Federal 80,293 (26,857) (17,642) State 6,107 (6,418) (5,445) Income tax provision (benefit) $ 105,459 $ (13,065) $ (11,797) |
Schedule of reconciliation of effective tax rate expense (benefit) for continuing operations and the statutory federal income tax rate | Years Ended December 31, December 25, December 27, 2017 2016 2015 Statutory rate (35.0) % (35.0) % (35.0) % State taxes, net of federal benefit 2.4 (4.6) (2.1) Changes in estimates — (0.1) 0.1 Changes in unrecognized tax benefits 0.6 (0.3) 0.3 Other 0.3 3.1 — Impact of valuation allowance 80.0 — — Impact of tax rate changes (2.4) — — Impact on pension transaction — 6.9 — Goodwill impairment — — 32.5 Stock compensation 0.6 2.3 0.4 Effective tax rate 46.5 % (27.7) % (3.8) % |
Schedule of components of deferred tax assets and liabilities | December 31, December 25, (in thousands) 2017 2016 Deferred tax assets: Compensation benefits $ 144,084 $ 259,684 State taxes 2,861 3,659 State loss carryovers 4,338 3,889 Investments in unconsolidated subsidiaries 4,981 — Other 2,945 4,345 Total deferred tax assets 159,209 271,577 Valuation allowance (109,718) (3,889) Net deferred tax assets 49,491 267,688 Deferred tax liabilities: Depreciation and amortization 68,665 136,159 Investments in unconsolidated subsidiaries — 50,323 Debt discount 4,512 7,345 Deferred gain on debt 4,376 13,040 Total deferred tax liabilities 77,553 206,867 Net deferred tax assets (liabilities) $ (28,062) $ 60,821 |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | Years Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 Balance at beginning of fiscal year $ 16,477 $ 15,621 $ 13,046 Increases based on tax positions in prior year 3,299 294 4,433 Decreases based on tax positions in prior year — (177) — Increases based on tax positions in current year 1,642 1,516 1,435 Settlements (164) — — Lapse of statute of limitations (490) (777) (3,293) Balance at end of fiscal year $ 20,764 $ 16,477 $ 15,621 |
Schedule of tax years and related taxing jurisdictions that were open for audit | Open Years Under Taxing Jurisdiction Tax Year Exam Federal 2014-2017 — California 2013-2017 2013-2014 Other States 2006-2017 2013-2015 |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
EMPLOYEE BENEFITS | |
Schedule of reconciliations of the pension and post-retirement benefit plans' benefit obligations, fair value of assets and funded status | Pension Benefits Post-retirement Benefits (in thousands) 2017 2016 2017 2016 Change in Benefit Obligation Benefit obligation, beginning of year $ 1,941,907 $ 1,931,320 $ 7,403 $ 9,883 Interest cost 85,468 88,668 271 389 Plan participants’ contributions — — 12 21 Actuarial (gain)/loss 152,353 78,058 707 (1,937) Gross benefits paid (99,715) (106,639) (768) (953) Plan settlements (1) — (49,500) — — Benefit obligation, end of year $ 2,080,013 $ 1,941,907 $ 7,625 $ 7,403 Pension Benefits Post-retirement Benefits (in thousands) 2017 2016 2017 2016 Change in Plan Assets Fair value of plan assets, beginning of year $ 1,335,435 $ 1,349,603 $ — $ — Actual return on plan assets 233,495 86,154 — — Employer contribution 8,711 55,817 756 932 Plan participants’ contributions — — 12 21 Gross benefits paid (99,715) (106,639) (768) (953) Plan settlements (1) — (49,500) — — Fair value of plan assets, end of year $ 1,477,926 $ 1,335,435 $ — $ — (1) During 2016, the pension plan purchased annuities and settled obligations for a group of annuitants including retirees and surviving beneficiaries who currently receive a benefit of $180.00 per month or less from the Pension Plan. Pension Benefits Post-retirement Benefits (in thousands) 2017 2016 2017 2016 Funded Status Fair value of plan assets $ 1,477,926 $ 1,335,435 $ — $ — Benefit obligations (2,080,013) (1,941,907) (7,625) (7,403) Funded status and amount recognized, end of year $ (602,087) $ (606,472) $ (7,625) $ (7,403) |
Schedule of amounts recognized in the consolidated balance sheet | Pension Benefits Post-retirement Benefits (in thousands) 2017 2016 2017 2016 Current liability $ (8,941) $ (8,647) $ (1,008) $ (1,063) Noncurrent liability (593,146) (597,825) (6,617) (6,340) $ (602,087) $ (606,472) $ (7,625) $ (7,403) |
Schedule of amounts recognized in accumulated other comprehensive income | Pension Benefits Post-retirement Benefits (in thousands) 2017 2016 2017 2016 Net actuarial loss/(gain) $ 757,096 $ 769,004 $ (7,820) $ (8,745) Prior service cost/(credit) — — (6,534) (9,414) $ 757,096 $ 769,004 $ (14,354) $ (18,159) |
Schedule of elements of retirement expense | Years Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 Pension plans: Interest Cost $ 85,468 $ 88,668 $ 84,994 Expected return on plan assets (89,569) (89,629) (94,603) Actuarial loss 20,335 18,382 22,194 Net pension expense 16,234 17,421 12,585 Net post-retirement benefit credit (2,830) (2,645) (2,614) Net retirement expenses $ 13,404 $ 14,776 $ 9,971 |
Schedule of weighted average assumptions used for valuing benefit obligations | Pension Benefit Post-retirement Obligations Obligations 2017 2016 2017 2016 Discount rate 3.91 % 4.52 % 3.60 % 3.95 % |
Schedule of weighted average assumptions used in calculating expense | Pension Benefit Expense Post-retirement Expense December 31, December 25, December 27, December 31, December 25, December 27, 2017 2016 2015 2017 2016 2015 Expected long-term return on plan assets 7.75 % 7.75 % 7.75 % N/A N/A N/A Discount rate 4.52 % 4.71 % 4.24 % 3.95 % 4.21 % 3.69 % |
Summary of expected benefit payments to retirees under the Company's retirement and post-retirement plans | Retirement Post-retirement (in thousands) Plans (1) Plans 2018 $ 107,928 $ 1,008 2019 111,699 919 2020 111,894 840 2021 115,898 768 2022 119,016 698 2023-2027 615,986 2,612 Total $ 1,182,421 $ 6,845 (1) Largely to be paid from the qualified defined benefit pension plan. |
Summary of pension plan's financial instruments that are carried at fair value on a recurring basis by the fair value hierarchy levels | 2017 Plan Assets (in thousands) Level 1 Level 2 Level 3 NAV Total Cash and cash equivalents $ 8,498 $ — $ — $ — $ 8,498 Mutual funds 478,565 — — — 478,565 Common collective trusts — — — 923,304 923,304 Real estate — — 58,050 — 58,050 Private equity funds — — 9,509 — 9,509 Total $ 487,063 $ — $ 67,559 $ 923,304 $ 1,477,926 2016 Plan Assets (in thousands) Level 1 Level 2 Level 3 NAV Total Cash and cash equivalents $ 677 $ — $ — $ — $ 677 Mutual funds 444,698 — — — 444,698 Common collective trusts — — — 816,435 816,435 Real estate — — 57,531 — 57,531 Private equity funds — — 8,149 — 8,149 Total $ 445,375 $ — $ 65,680 $ 816,435 $ 1,327,490 Pending trades 7,945 $ 1,335,435 |
Summary of changes in the fair value of the pension plan's Level 3 investment assets | (in thousands) Real Estate Private Equity Total Beginning Balance, December 25, 2016 $ 57,531 $ 8,149 $ 65,680 Realized gains (losses) 4,632 — 4,632 Transfer in or out of level 3 (4,614) — (4,614) Unrealized gains (losses) 501 1,360 1,861 Ending Balance, December 31, 2017 $ 58,050 $ 9,509 $ 67,559 (1) The activity within the unrealized gains (losses) and the realized gains (losses) relates to closing out two funds within the private equity funds. There was no impact to the total asset value of the private equity funds as a result of these transactions. (in thousands) Real Estate Private Equity Total Beginning Balance, December 27, 2015 $ 50,360 $ 7,282 $ 57,642 Purchases, issuances, sales, settlements 47,130 (186) 46,944 Realized gains 8,746 — 8,746 Transfer in or out of level 3 (43,046) — (43,046) Unrealized gains (5,659) 1,053 (4,606) Ending Balance, December 25, 2016 $ 57,531 $ 8,149 $ 65,680 |
Schedule of common collective trusts | (in thousands) 2017 2016 Redemption Frequency (if Currently Eligible) Redemption Notice Period U.S equity funds (1) $ 353,555 $ 310,616 Daily None International equity funds (2) 569,749 505,819 Daily-Monthly None Total $ 923,304 $ 816,435 ________________ (1) U.S. equity fund strategies - Investments in U.S. equities are defined as commitments to U.S. dollar-denominated, publicly traded common stocks of U.S. domiciled companies and securities convertible into common stock. The aggregate U.S. equity portfolio is expected to exhibit characteristics comparable to, but not necessarily equal to, that of the Russell 3000 Index. (2) International equity funds strategies - Investments in international developed markets equities are defined as commitments to publicly traded common stocks and securities convertible into common stock issued by companies primarily domiciled in countries outside of the U.S. |
CASH FLOW INFORMATION (Tables)
CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
CASH FLOW INFORMATION | |
Schedule of cash paid for interest and income taxes and other non-cash activities | Year Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 Interest paid (net of amount capitalized) $ 68,861 $ 73,373 $ 80,514 Income taxes paid (net of refunds) 12,437 2,454 207,043 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 — (27,632) — Reduction of PP&E due to sale of real properties by pension plan — (29,002) — |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
Summary of minimum annual contractual obligations | Payments Due By Period (in thousands) 2018 2019 2020 2021 2022 Thereafter Total Purchase obligations (1) $ 19,674 $ 16,956 $ 4,085 $ 1,227 $ — $ — $ 41,942 Operating leases (2) Lease obligations 12,763 11,301 10,396 9,602 9,420 39,406 92,888 Sublease income (3,837) (2,150) (637) (572) (565) (634) (8,395) Net lease obligation 8,926 9,151 9,759 9,030 8,855 38,772 84,493 Workers’ compensation obligations (3) 2,593 1,578 1,127 844 668 5,300 12,110 Total $ 31,193 $ 27,685 $ 14,971 $ 11,101 $ 9,523 $ 44,072 $ 138,545 (1) Represents our purchase obligations primarily related to printing outsource agreements and capital expenditures for PP&E expiring at various dates through 2021. (2) Represents minimum rental commitments under operating leases with non‑cancelable terms in excess of one year and sublease income from leased space with non-cancelable terms in excess of one year. We rent certain facilities and equipment under operating leases expiring at various dates through 2028. Total rental expense, included in other operating expenses, amounted to $13.4 million, $15.4 million and $11.6 million in 2017, 2016 and 2015, respectively. Most of the leases provide that we pay taxes, maintenance, insurance and certain other operating expenses applicable to the leased premises in addition to the minimum monthly payments. Some of the operating leases have built in escalation clauses. We sublease office space to other companies under non-cancellable agreements that expire at various dates through 2023. Sublease income from operating leases totaled $4.8 million, $4.6 million and $4.6 million in 2017, 2016 and 2015, respectively. (3) We retain the risk for workers’ compensation resulting from uninsured deductibles per accident or occurrence that are subject to annual aggregate limits. Losses up to the deductible amounts are accrued based upon known claims incurred and an estimate of claims incurred but not reported. For the year ended December 31, 2017, we compiled our historical data pertaining to the self‑insurance experiences and actuarially developed the ultimate loss associated with our self‑insurance programs for workers’ compensation liability. We believe that the actuarial valuation provides the best estimate of the ultimate losses to be expected under these programs. At December 31, 2017, the undiscounted ultimate losses of all our self‑insurance reserves related to our workers’ compensation liabilities were $13.0 million, net of estimated insurance recoveries of approximately $2.2 million. At December 25, 2016, the undiscounted ultimate losses of all our self-insurance reserves related to workers’ compensation liabilities were $12.2 million, net of estimated insurance recoveries of approximately $3.2 million. We discount the net amounts above to present value using an approximate risk‑free rate over the average life of our insurance claims. For the years ended December 31, 2017, and December 25, 2016, the discount rate used was 2.3% and 1.6%, respectively. The present value of all self‑insurance reserves, net of estimated insurance recoveries, for our workers’ compensation liability recorded at December 31, 2017, and December 25, 2016, was $12.1 million and $13.1 million, respectively. |
COMMON STOCK AND STOCK PLANS (T
COMMON STOCK AND STOCK PLANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
COMMON STOCK AND STOCK PLANS | |
Summary of the restricted stock units ("RSUs") activity | Weighted Average Grant Date Fair RSUs Value Nonvested — December 28, 2014 132,955 $ 36.20 Granted 136,530 $ 22.80 Vested (97,000) $ 28.50 Forfeited (18,605) $ 30.80 Nonvested — December 27, 2015 153,880 $ 29.83 Granted 170,440 $ 11.80 Vested (112,895) $ 24.57 Forfeited (7,280) $ 16.32 Nonvested — December 25, 2016 204,145 $ 18.17 Granted 254,405 $ 9.99 Vested (206,776) $ 16.14 Forfeited (5,980) $ 12.86 Nonvested — December 31, 2017 245,794 $ 11.55 |
Summary of the stock appreciation rights ("SARs") activity | Weighted Aggregate Average Intrinsic Value SARs Exercise Price (in thousands) Outstanding December 28, 2014 384,875 $ 92.81 $ 1,542 Forfeited (6,875) $ 26.09 Expired (57,875) $ 207.56 Outstanding December 27, 2015 320,125 $ 73.49 $ — Forfeited (50) $ 27.60 Expired (27,325) $ 322.20 Outstanding December 25, 2016 292,750 $ 50.29 $ — Expired (136,575) $ 71.07 Outstanding December 31, 2017 156,175 $ 32.12 $ — Vested and Expected to Vest December 31, 2017 156,175 $ 32.12 $ — SARs exercisable: December 27, 2015 277,413 $ — December 25, 2016 279,100 $ — December 31, 2017 156,175 $ — |
Summary of stock-based compensation expense | Years Ended December 31, December 25, December 27, (in thousands) 2017 2016 2015 Stock-based compensation expense $ 2,475 $ 3,130 $ 3,178 |
Summary of information about stock options and SARs outstanding in the stock plans | Average Remaining Weighted Weighted Range of Exercise SARs Contractual Average SARs Average Prices Outstanding Life Exercise Price Exercisable Exercise Price $17.00 – $27.60 85,925 2.82 $ 25.03 85,925 $ 25.03 $34.20 – $97.30 70,250 2.12 $ 40.79 70,250 $ 40.79 Total 156,175 2.50 $ 32.12 156,175 $ 32.12 |
QUARTERLY RESULTS OF OPERATIO30
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |
Schedule of the Company's quarterly results | Quarters Ended March 26, June 25, September 24, December 31, (in thousands, except per share amounts) 2017 2017 2017 2017 Net revenues $ 221,212 $ 225,120 $ 212,604 $ 244,656 Operating income (loss) $ (4,519) $ 12,110 $ 4,611 $ 29,963 Net income (loss) $ (95,575) $ (37,446) $ (260,476) $ 61,139 Net income (loss) per share - diluted $ (12.60) $ (4.91) $ (34.11) $ 7.91 Quarters Ended March 27, June 26, September 25, December 25, (in thousands, except per share amounts) 2016 2016 2016 2016 Net revenues $ 237,979 $ 242,234 $ 234,701 $ 262,179 Operating income (loss) $ (2,353) $ 1,001 $ 5,229 $ 33,439 Net income (loss) $ (12,741) $ (14,734) $ (9,804) $ 3,086 Net income (loss) per share - diluted $ (1.58) $ (1.89) $ (1.30) $ 0.40 |
SIGNIFICANT ACCOUNTING POLICI31
SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2017USD ($)statecompany | Sep. 24, 2017 | Jun. 25, 2017 | Mar. 26, 2017 | Dec. 25, 2016USD ($) | Sep. 25, 2016 | Jun. 26, 2016 | Mar. 27, 2016 | Dec. 31, 2017USD ($)statecompany | Dec. 25, 2016USD ($) | Dec. 27, 2015 | Jul. 31, 2017 | Jul. 30, 2017 | |
Investments in Unconsolidated Companies Activity | |||||||||||||
Number of media companies | company | 30 | 30 | |||||||||||
Number of states | state | 14 | 14 | |||||||||||
Length of fiscal quarter | 98 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | |||||
Length of fiscal year | 371 days | 364 days | 364 days | ||||||||||
Long-term debt fair value disclosure | |||||||||||||
Estimated fair value of long-term debt | $ 810,700 | $ 844,000 | $ 810,700 | $ 844,000 | |||||||||
Long-term debt | $ 781,392 | $ 846,164 | $ 781,392 | $ 846,164 | |||||||||
Career Builder LLC | |||||||||||||
Investments in Unconsolidated Companies Activity | |||||||||||||
Ownership interest (as a percent) | 3.00% | 3.00% | 3.00% | 15.00% |
SIGNIFICANT ACCOUNTING POLICI32
SIGNIFICANT ACCOUNTING POLICIES - Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
Changes in allowance for doubtful accounts | |||
Balance at beginning of year | $ 3,254 | $ 4,451 | $ 5,900 |
Charged to costs and expenses | 10,870 | 10,137 | 8,181 |
Amounts written off | (10,899) | (11,334) | (9,630) |
Balance at end of year | 3,225 | $ 3,254 | $ 4,451 |
Newsprint, ink and other inventories | |||
Inventory Write-down | $ 2,000 |
SIGNIFICANT ACCOUNTING POLICI33
SIGNIFICANT ACCOUNTING POLICIES - Property thru Debt (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017USD ($) | Sep. 24, 2017USD ($) | Dec. 25, 2016USD ($) | Sep. 24, 2017USD ($) | Dec. 31, 2017USD ($)segmentcompanyitem | Dec. 25, 2016USD ($) | Dec. 27, 2015USD ($) | |
Depreciation | |||||||
Property, plant and equipment, gross | $ 883,965,000 | $ 960,356,000 | $ 883,965,000 | $ 960,356,000 | |||
Less accumulated depreciation | (626,326,000) | (662,850,000) | (626,326,000) | (662,850,000) | |||
Property, plant and equipment, net | 257,639,000 | 297,506,000 | 257,639,000 | 297,506,000 | |||
Depreciation expense | 30,800,000 | 41,500,000 | $ 53,200,000 | ||||
Accelerated depreciation incurred | $ 300,000 | 7,000,000 | 10,300,000 | ||||
Company that replaced printing press | company | 1 | ||||||
Number of media companies with assets held for sale | company | 4 | ||||||
Impairment charge of assets held for sale | $ 0 | ||||||
Segment reporting | |||||||
Number of operating segments | segment | 2 | ||||||
Goodwill and intangible impairment | |||||||
Goodwill, Impairment Loss | $ 0 | 0 | 290,900,000 | ||||
Impairment of Intangible Assets, Finite-lived | $ 0 | 0 | 0 | ||||
Stock-based compensation | |||||||
Number of stock-based compensation plans | item | 2 | ||||||
Long-term debt fair value disclosure | |||||||
Estimated fair value of long-term debt | 810,700,000 | 844,000,000 | $ 810,700,000 | 844,000,000 | |||
Carrying value of long-term debt | 781,392,000 | 846,164,000 | 781,392,000 | 846,164,000 | |||
Newspaper mastheads | |||||||
Goodwill and intangible impairment | |||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 12,800,000 | $ 8,700,000 | 9,200,000 | $ 8,700,000 | 21,485,000 | 9,196,000 | $ 13,900,000 |
Land | |||||||
Depreciation | |||||||
Property, plant and equipment, gross | 36,491,000 | 50,844,000 | 36,491,000 | 50,844,000 | |||
Buildings and improvements | |||||||
Depreciation | |||||||
Property, plant and equipment, gross | 289,574,000 | 314,018,000 | $ 289,574,000 | 314,018,000 | |||
Buildings and improvements | Minimum | |||||||
Depreciation | |||||||
Estimated Useful Lives | 5 years | ||||||
Buildings and improvements | Maximum | |||||||
Depreciation | |||||||
Estimated Useful Lives | 60 years | ||||||
Equipment | |||||||
Depreciation | |||||||
Property, plant and equipment, gross | 555,204,000 | 594,005,000 | $ 555,204,000 | 594,005,000 | |||
Equipment | Minimum | |||||||
Depreciation | |||||||
Estimated Useful Lives | 2 years | ||||||
Equipment | Maximum | |||||||
Depreciation | |||||||
Estimated Useful Lives | 25 years | ||||||
Construction in process | |||||||
Depreciation | |||||||
Property, plant and equipment, gross | $ 2,696,000 | $ 1,489,000 | $ 2,696,000 | $ 1,489,000 | |||
Presses | Minimum | |||||||
Depreciation | |||||||
Estimated Useful Lives | 9 years | ||||||
Presses | Maximum | |||||||
Depreciation | |||||||
Estimated Useful Lives | 25 years | ||||||
Other equipment | Minimum | |||||||
Depreciation | |||||||
Estimated Useful Lives | 2 years | ||||||
Other equipment | Maximum | |||||||
Depreciation | |||||||
Estimated Useful Lives | 15 years |
SIGNIFICANT ACCOUNTING POLICI34
SIGNIFICANT ACCOUNTING POLICIES - Income taxes (Details) | 12 Months Ended | |||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
Statutory rate (as a percent) | 35.00% | 35.00% | 35.00% | |
Measurement period | 1 year | |||
Period of cumulative pre-tax income | 3 years | |||
Forecast | ||||
Statutory rate (as a percent) | 21.00% |
SIGNIFICANT ACCOUNTING POLICI35
SIGNIFICANT ACCOUNTING POLICIES - AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 24, 2017 | Jun. 25, 2017 | Mar. 26, 2017 | Dec. 25, 2016 | Sep. 25, 2016 | Jun. 26, 2016 | Mar. 27, 2016 | Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
Changes in stockholders' equity | |||||||||||
Balance at the beginning of the period | $ (461,515) | $ (421,808) | $ (461,515) | $ (421,808) | |||||||
Other comprehensive income (loss) before reclassifications | 4,046 | (1,157) | |||||||||
Amounts reclassified from AOCL | 8,100 | (38,550) | |||||||||
Other comprehensive income (loss) | 12,146 | (39,707) | $ (5,205) | ||||||||
Balance at the end of the period | $ (449,369) | $ (461,515) | (449,369) | (461,515) | (421,808) | ||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||||||
Retirement benefit expense | 13,404 | 14,776 | 9,971 | ||||||||
Benefit for income taxes | 105,459 | (13,065) | (11,797) | ||||||||
Net of tax | (61,139) | $ 260,476 | $ 37,446 | 95,575 | (3,086) | $ 9,804 | $ 14,734 | 12,741 | 332,358 | 34,193 | 300,162 |
Minimum Pension and Post-Retirement Liability | |||||||||||
Changes in stockholders' equity | |||||||||||
Balance at the beginning of the period | (450,506) | (411,956) | (450,506) | (411,956) | |||||||
Amounts reclassified from AOCL | 8,100 | (38,550) | |||||||||
Other comprehensive income (loss) | 8,100 | (38,550) | |||||||||
Balance at the end of the period | (442,406) | (450,506) | (442,406) | (450,506) | (411,956) | ||||||
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 | 8,100 | (64,250) | |||||||||
Benefit for income taxes | 25,700 | ||||||||||
Net of tax | 8,100 | (38,550) | |||||||||
Other Comprehensive Loss Related to Equity Investments | |||||||||||
Changes in stockholders' equity | |||||||||||
Balance at the beginning of the period | $ (11,009) | $ (9,852) | (11,009) | (9,852) | |||||||
Other comprehensive income (loss) before reclassifications | 4,046 | (1,157) | |||||||||
Other comprehensive income (loss) | 4,046 | (1,157) | |||||||||
Balance at the end of the period | $ (6,963) | $ (11,009) | $ (6,963) | $ (11,009) | $ (9,852) |
SIGNIFICANT ACCOUNTING POLICI36
SIGNIFICANT ACCOUNTING POLICIES - EPS (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
Anti-dilutive stock options, restricted stock units and restricted stock | |||
Weighted average anti-dilutive stock options | |||
Anti-dilutive stock options (in shares) | 278 | 431 | 517 |
SIGNIFICANT ACCOUNTING POLICI37
SIGNIFICANT ACCOUNTING POLICIES - Adopted Pronouncements (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | Jan. 01, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Compensation | $ 338,588 | $ 368,897 | $ 385,478 | |
Retirement benefit expense | 13,404 | 14,776 | 9,971 | |
Accumulated deficit | $ (1,970,097) | (1,637,739) | ||
Accounting Standards Update 2017 07 | Adjustments for New Accounting Principle, Early Adoption | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Compensation | (14,800) | (10,000) | ||
Retirement benefit expense | $ 14,800 | $ 10,000 | ||
Accounting Standards Update 2014-09 | Forecast | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Accumulated deficit | $ (2,700) |
INVESTMENTS IN UNCONSOLIDATED38
INVESTMENTS IN UNCONSOLIDATED COMPANIES (Details) | Jul. 31, 2017USD ($) | Feb. 23, 2016 | Jun. 25, 2017USD ($) | Mar. 26, 2017USD ($) | Mar. 27, 2016USD ($) | Dec. 31, 2017USD ($)subsidiary | Dec. 25, 2016USD ($) | Dec. 27, 2015USD ($) | Jul. 30, 2017 |
Investments in unconsolidated companies and joint ventures | |||||||||
Investments in unconsolidated companies | $ 7,172,000 | $ 242,382,000 | |||||||
Distributions of income from equity investments | 6,000,000 | $ 7,500,000 | |||||||
Write down of certain unconsolidated investments | 170,007,000 | 892,000 | |||||||
Home Finder LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||||
Investments in unconsolidated companies and joint ventures | |||||||||
Proceeds from sale | $ 600,000 | ||||||||
Term of Agreement | 3 years | ||||||||
Write down of certain unconsolidated investments | $ 900,000 | ||||||||
Career Builder LLC | |||||||||
Investments in unconsolidated companies and joint ventures | |||||||||
Ownership interest (as a percent) | 3.00% | 3.00% | 15.00% | ||||||
Investments in unconsolidated companies | $ 3,579,000 | 236,936,000 | |||||||
Proceeds from sale | $ 73,900,000 | ||||||||
Gross proceeds | 66,600,000 | ||||||||
Distributions of income from equity investments | $ 7,300,000 | 7,300,000 | 6,000,000 | ||||||
Write down of certain unconsolidated investments | $ 45,600,000 | $ 123,000,000 | 168,200,000 | ||||||
Expenses incurred for products provided by the entity's less-than 50% owned companies | $ 354,000 | 863,000 | 1,001,000 | ||||||
Seattle Times Company (C-Corporation) | |||||||||
Investments in unconsolidated companies and joint ventures | |||||||||
Ownership interest (as a percent) | 49.50% | ||||||||
Investments in unconsolidated companies | $ 0 | ||||||||
Distributions of income from equity investments | $ 0 | ||||||||
Ponderay (general partnership) | |||||||||
Investments in unconsolidated companies and joint ventures | |||||||||
Ownership interest (as a percent) | 27.00% | ||||||||
Investments in unconsolidated companies | $ 0 | ||||||||
Distributions of income from equity investments | 0 | ||||||||
Expenses incurred for products provided by the entity's less-than 50% owned companies | $ 9,162,000 | 10,767,000 | $ 8,200,000 | ||||||
Number of subsidiaries | subsidiary | 3 | ||||||||
Other | |||||||||
Investments in unconsolidated companies and joint ventures | |||||||||
Investments in unconsolidated companies | $ 3,593,000 | 5,446,000 | |||||||
Various | |||||||||
Investments in unconsolidated companies and joint ventures | |||||||||
Write down of certain unconsolidated investments | $ 2,400,000 | ||||||||
Home Finder LLC | |||||||||
Investments in unconsolidated companies and joint ventures | |||||||||
Write down of certain unconsolidated investments | $ 1,000,000 |
INVESTMENTS IN UNCONSOLIDATED39
INVESTMENTS IN UNCONSOLIDATED COMPANIES - Condensed info (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
Equity Method Investment, Summarized Financial Information [Abstract] | |||
Current assets | $ 112,694 | $ 332,602 | |
Noncurrent assets | 57,477 | 629,604 | |
Current liabilities | 61,996 | 263,200 | |
Noncurrent liabilities | 161,440 | 187,188 | |
Equity | (53,235) | 511,818 | |
Equity Method Investment, Summarized Financial Information, Gross Profit (Loss) [Abstract] | |||
Net revenue | 685,415 | 1,058,296 | $ 988,871 |
Gross profit | 508,248 | 882,493 | 843,680 |
Operating income | 4,027 | 80,830 | 38,561 |
Net income | $ (5,121) | $ 68,534 | $ 39,143 |
INTANGIBLE ASSETS AND GOODWIL40
INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Sep. 24, 2017 | Dec. 25, 2016 | Sep. 24, 2017 | Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
Intangible assets subject to amortization, gross | |||||||
Balance at the beginning of the period | $ 839,273 | $ 839,273 | $ 833,254 | ||||
Additions | 11 | 6,019 | |||||
Balance at the end of the period | $ 839,284 | $ 839,273 | 839,284 | 839,273 | $ 833,254 | ||
Accumulated amortization | |||||||
Balance at the beginning of the period | (711,723) | (711,723) | (663,735) | ||||
Amortization Expense | (49,290) | (47,988) | (48,400) | ||||
Balance at the end of the period | (761,013) | (711,723) | (761,013) | (711,723) | (663,735) | ||
Intangible assets subject to amortization, net | |||||||
Balance at the beginning of the period | 127,550 | 127,550 | 169,519 | ||||
Additions | 11 | 6,019 | |||||
Amortization Expense | (49,290) | (47,988) | (48,400) | ||||
Balance at the end of the period | 78,271 | 127,550 | 78,271 | 127,550 | 169,519 | ||
Goodwill [Roll Forward] | |||||||
Balance at the beginning of the period | 705,174 | 705,174 | 705,174 | ||||
Goodwill impairment charge | 0 | 0 | (290,900) | ||||
Balance at the end of the period | 705,174 | 705,174 | 705,174 | 705,174 | 705,174 | ||
Total | |||||||
Balance at the beginning of the period | 1,004,160 | 1,004,160 | 1,053,825 | ||||
Additions | 11 | 7,519 | |||||
Impairment Charges | (21,485) | (9,196) | |||||
Amortization Expense | (49,290) | (47,988) | (48,400) | ||||
Balance at the end of the period | 933,396 | 1,004,160 | 933,396 | 1,004,160 | 1,053,825 | ||
Newspaper mastheads | |||||||
Intangible assets subject to amortization, net | |||||||
Additions | 1,500 | ||||||
Mastheads | |||||||
Balance at the beginning of the period | 171,436 | 171,436 | 179,132 | ||||
Impairment Charges | (12,800) | $ (8,700) | (9,200) | $ (8,700) | (21,485) | (9,196) | (13,900) |
Balance at the end of the period | $ 149,951 | $ 171,436 | $ 149,951 | $ 171,436 | $ 179,132 |
INTANGIBLE ASSETS AND GOODWIL41
INTANGIBLE ASSETS AND GOODWILL - Indefinite-lived (Details) - USD ($) $ in Thousands | 1 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
Indefinite lived intangible assets and goodwill | ||||
Goodwill, Gross | $ 3,571,111 | $ 3,571,111 | ||
Original Gross Amount | 4,255,611 | 4,255,611 | ||
Accumulated Impairment, Goodwill | (2,865,937) | (2,865,937) | ||
Accumulated Impairment, Amount | (3,400,486) | (3,379,001) | ||
Goodwill | 705,174 | 705,174 | $ 705,174 | |
Carrying Amount, Total | 855,125 | 876,610 | ||
Newspaper mastheads | ||||
Indefinite lived intangible assets and goodwill | ||||
Original Gross Amount, Mastheads | 684,500 | 684,500 | ||
Accumulated Impairment, Mastheads | (534,549) | (513,064) | ||
Carrying Amount, Mastheads | $ 149,951 | $ 171,436 | $ 179,132 | |
Useful life | 20 years |
INTANGIBLE ASSETS AND GOODWIL42
INTANGIBLE ASSETS AND GOODWILL - Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
INTANGIBLE ASSETS AND GOODWILL | |||
Amortization expense | $ 49,290 | $ 47,988 | $ 48,400 |
Estimated amortization expense | |||
2,018 | 47,660 | ||
2,019 | 24,154 | ||
2,020 | 803 | ||
2,021 | 680 | ||
2,022 | $ 655 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 25, 2016 |
Long-term debt disclosures | ||
Face Value | $ 805,048 | |
Less current portion | 75,000 | |
Total long-term debt, net of current | 730,048 | |
Carrying value | 781,392 | $ 846,164 |
Less current portion | 74,140 | 16,749 |
Total long-term debt, net of current | 707,252 | 829,415 |
Unamortized discounts | $ 23,700 | $ 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 | $ 439,630 | |
Carrying value | $ 433,819 | $ 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 | $ 85,262 | $ 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 | $ 262,311 | $ 261,061 |
LONG-TERM DEBT - Notes and Cove
LONG-TERM DEBT - Notes and Covenants (Details) $ in Thousands | Oct. 21, 2014USD ($) | Apr. 30, 2018USD ($) | Feb. 28, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 25, 2016USD ($) | Dec. 27, 2015USD ($) | Jan. 31, 2018USD ($) | Sep. 24, 2017USD ($) |
LONG-TERM DEBT | |||||||||
Face value of notes retired or repurchased | $ 68,650 | $ 63,577 | |||||||
Gain (loss) on extinguishment of debt, net | (2,700) | $ 431 | $ 1,167 | ||||||
Notes repurchased privately | $ 1,800 | 1,800 | $ 1,800 | ||||||
Amendment 21 October 2014 | |||||||||
LONG-TERM DEBT | |||||||||
Maximum borrowing capacity | 65,000 | $ 65,000 | |||||||
Revolving credit facility | LIBOR | |||||||||
LONG-TERM DEBT | |||||||||
Variable rate basis | London Interbank Offered Rate | ||||||||
Revolving credit facility | LIBOR | Minimum | |||||||||
LONG-TERM DEBT | |||||||||
Basis spread on variable rate (as a percent) | 2.75% | ||||||||
Revolving credit facility | LIBOR | Maximum | |||||||||
LONG-TERM DEBT | |||||||||
Basis spread on variable rate (as a percent) | 4.25% | ||||||||
Revolving credit facility | Base rate | Minimum | |||||||||
LONG-TERM DEBT | |||||||||
Basis spread on variable rate (as a percent) | 1.75% | ||||||||
Revolving credit facility | Base rate | Maximum | |||||||||
LONG-TERM DEBT | |||||||||
Basis spread on variable rate (as a percent) | 3.25% | ||||||||
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 | ||||||||
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% | ||||||||
Letter of credit | |||||||||
LONG-TERM DEBT | |||||||||
Maximum borrowing capacity | $ 35,000 | ||||||||
Percentage of aggregate undrawn amount of letter of credit required to provide cash collateral | 101.00% | ||||||||
Outstanding letters of credit | $ 31,700 | $ 31,700 | |||||||
Letter of credit | Forecast | |||||||||
LONG-TERM DEBT | |||||||||
Outstanding letters of credit | $ 29,700 | ||||||||
9.00% senior secured notes due in 2022 | |||||||||
LONG-TERM DEBT | |||||||||
Interest rate (as a percent) | 9.00% | 9.00% | 9.00% | ||||||
Ownership percentage in each of the guarantor subsidiaries | 100.00% | 100.00% | |||||||
Face value of notes retired or repurchased | $ 75,000 | $ 51,785 | $ 25,000 | ||||||
Notes price at par (as a percent) | 104.50% | ||||||||
9.00% senior secured notes due in 2022 | Forecast | |||||||||
LONG-TERM DEBT | |||||||||
Face value of notes retired or repurchased | $ 20,000 | ||||||||
Gain (loss) on extinguishment of debt, net | $ (5,300) | ||||||||
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 | $ 16,865 | $ 38,577 |
LONG-TERM DEBT - Maturities (De
LONG-TERM DEBT - Maturities (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Annual maturities of debt for the next five years and thereafter | |
2,018 | $ 75,000 |
2,022 | 364,630 |
Thereafter | 365,418 |
Face Value | $ 805,048 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | Sep. 24, 2017 | |
Current: | |||||
Federal | $ 15,042 | $ 17,641 | $ 13,317 | ||
State | 4,017 | 2,569 | (2,027) | ||
Deferred: | |||||
Federal | 80,293 | (26,857) | (17,642) | ||
State | 6,107 | (6,418) | (5,445) | ||
Income Tax Expense (Benefit), Total | $ 105,459 | $ (13,065) | $ (11,797) | ||
Reconciliation of effective tax rate expense (benefit) and the statutory federal income tax rate | |||||
Statutory rate (as a percent) | (35.00%) | (35.00%) | (35.00%) | ||
State taxes, net of federal benefit (as a percent) | 2.40% | (4.60%) | (2.10%) | ||
Changes in estimates (as a percent) | (0.10%) | 0.10% | |||
Changes in unrecognized tax benefits (as a percent) | 0.60% | (0.30%) | 0.30% | ||
Other (as a percent) | 0.30% | 3.10% | |||
Impact of valuation allowance | 80.00% | ||||
Impact of tax rate changes (as a percent) | (2.40%) | ||||
Impact on pension transaction (as a percent) | 6.90% | ||||
Goodwill impairment (as a percent) | 32.50% | ||||
Stock compensation (as a percent) | 0.60% | 2.30% | 0.40% | ||
Effective tax rate (as a percent) | 46.50% | (27.70%) | (3.80%) | ||
New federal tax rate expense (benefit) | $ (5,500) | $ (5,500) | |||
Deferred tax assets: | |||||
Compensation benefits | 144,084 | 144,084 | $ 259,684 | ||
State taxes | 2,861 | 2,861 | 3,659 | ||
State loss carryovers | 4,338 | 4,338 | 3,889 | ||
Investments in unconsolidated subsidiaries | 4,981 | 4,981 | |||
Other | 2,945 | 2,945 | 4,345 | ||
Total deferred tax assets | 159,209 | 159,209 | 271,577 | ||
Valuation allowance | (109,718) | (109,718) | (3,889) | ||
Net deferred tax assets | 49,491 | 49,491 | 267,688 | ||
Net deferred tax assets | 60,821 | ||||
Deferred tax liabilities: | |||||
Depreciation and amortization | 68,665 | 68,665 | 136,159 | ||
Investments in unconsolidated subsidiaries | 50,323 | ||||
Debt discount | 4,512 | 4,512 | 7,345 | ||
Deferred gain on debt | 4,376 | 4,376 | 13,040 | ||
Total deferred tax liabilities | 77,553 | 77,553 | 206,867 | ||
Net deferred tax liabilities | 28,062 | 28,062 | |||
Valuation allowance | |||||
Increase in valuation allowance | 105,800 | $ 1,000 | |||
Tax Act decrease in valuation allowance | (53,600) | $ (53,600) | |||
Number of years of pre-tax losses | 3 years | ||||
Valuation allowance against majority of deferred tax assets | 109,700 | $ 109,700 | $ 245,400 | ||
Valuation allowance charge | $ 192,300 | $ 192,300 |
INCOME TAXES - Credits (Details
INCOME TAXES - Credits (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | Dec. 28, 2014 | |
INCOME TAXES | ||||
Operating Loss Carryforwards | $ 278,900 | |||
Long-term liabilities relating to uncertain tax positions | 25,100 | |||
Unrecognized tax benefits | 20,764 | $ 16,477 | $ 15,621 | $ 13,046 |
Gross accrued interest and penalties | 4,300 | |||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 11,100 | |||
Decreases in unrecognized tax benefits | 4,300 | |||
Unrecognized Tax Benefits, Interest on Income Taxes Expense | 1,100 | 500 | (300) | |
Unrecognized Tax Benefits, Income Tax Penalties Expense | 300 | 0 | 100 | |
Net accrued interest and penalties | $ 4,300 | $ 3,000 | $ 2,500 |
INCOME TAXES - Unrecognized (De
INCOME TAXES - Unrecognized (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | |||
Balance at beginning of fiscal year | $ 16,477 | $ 15,621 | $ 13,046 |
Increases based on tax positions in prior year | 3,299 | 294 | 4,433 |
Decreases based on tax positions in prior year | (177) | ||
Increases based on tax positions in current year | 1,642 | 1,516 | 1,435 |
Settlements | (164) | ||
Lapse of statute of limitations | (490) | (777) | (3,293) |
Balance at end of fiscal year | $ 20,764 | $ 16,477 | $ 15,621 |
EMPLOYEE BENEFITS (Details)
EMPLOYEE BENEFITS (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Feb. 29, 2016USD ($) | Dec. 31, 2017USD ($)person | Dec. 25, 2016USD ($) | Dec. 27, 2015USD ($) | |
Retirement expense for continuing operations | ||||
Service cost | $ 0 | $ 0 | $ 0 | |
Pension plan | ||||
EMPLOYEE BENEFITS | ||||
Number of new participants | person | 0 | |||
Further benefits | $ 0 | |||
Value of contributions to plan | $ 47,100 | 8,711 | 55,817 | |
Retirement expense for continuing operations | ||||
Expected return on plan assets | (89,569) | (89,629) | (94,603) | |
Post-retirement plans | ||||
EMPLOYEE BENEFITS | ||||
Value of contributions to plan | 756 | 932 | ||
Supplemental retirement plans | ||||
EMPLOYEE BENEFITS | ||||
Value of contributions to plan | $ 8,700 | 8,700 | 8,500 | |
Adjustments for New Accounting Principle, Early Adoption | Accounting Standards Update 2017 07 | ||||
Retirement expense for continuing operations | ||||
Service cost | (18,800) | (11,700) | ||
Expected return on plan assets | $ 18,800 | $ 11,700 |
EMPLOYEE BENEFITS - Reconciliat
EMPLOYEE BENEFITS - Reconciliations (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Feb. 29, 2016 | Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | Dec. 31, 2017 | Dec. 25, 2016 | |
Amounts recognized in the statement of financial position consist of: | ||||||
Noncurrent liability | $ (599,763,000) | $ (604,165,000) | ||||
Maximum | ||||||
Change in Benefit Obligation | ||||||
Gross benefits paid | $ (180) | |||||
Changes in the fair value of the plan's Level 3 investment assets | ||||||
Gross benefits paid | (180) | |||||
Pension plan | ||||||
Change in Benefit Obligation | ||||||
Benefit obligation, beginning of year | $ 1,941,907,000 | 1,931,320,000 | ||||
Interest cost | 85,468,000 | 88,668,000 | $ 84,994,000 | |||
Actuarial (gain)/loss | 152,353,000 | 78,058,000 | ||||
Gross benefits paid | (99,715,000) | (106,639,000) | ||||
Plan settlements | (49,500,000) | |||||
Benefit obligation, end of year | 2,080,013,000 | 1,941,907,000 | 1,931,320,000 | |||
Changes in the fair value of the plan's Level 3 investment assets | ||||||
Fair value of plan assets, beginning of year | 1,335,435,000 | 1,349,603,000 | ||||
Actual return on plan assets | 233,495,000 | 86,154,000 | ||||
Employer contribution | $ 47,100,000 | 8,711,000 | 55,817,000 | |||
Gross benefits paid | (99,715,000) | (106,639,000) | ||||
Fair value of plan assets, end of year | 1,477,926,000 | 1,335,435,000 | 1,349,603,000 | |||
Funded Status | ||||||
Fair value of plan assets | 1,335,435,000 | 1,349,603,000 | 1,349,603,000 | 1,477,926,000 | 1,335,435,000 | |
Benefit obligations | (1,941,907,000) | (1,931,320,000) | (1,931,320,000) | (2,080,013,000) | (1,941,907,000) | |
Funded status and amount recognized, end of year | (602,087,000) | (606,472,000) | ||||
Amounts recognized in the statement of financial position consist of: | ||||||
Current liability | (8,941,000) | (8,647,000) | ||||
Noncurrent liability | (593,146,000) | (597,825,000) | ||||
Amounts recognized in the statement of financial position | (602,087,000) | (606,472,000) | ||||
Amounts recognized in accumulated other comprehensive income consist of: | ||||||
Net actuarial loss/(gain) | 757,096,000 | 769,004,000 | ||||
Amounts recognized in accumulated other comprehensive income | 757,096,000 | 769,004,000 | ||||
Supplemental retirement plans | ||||||
Changes in the fair value of the plan's Level 3 investment assets | ||||||
Employer contribution | 8,700,000 | 8,700,000 | 8,500,000 | |||
Post-retirement plans | ||||||
Change in Benefit Obligation | ||||||
Benefit obligation, beginning of year | 7,403,000 | 9,883,000 | ||||
Interest cost | 271,000 | 389,000 | ||||
Plan participants' contributions | 12,000 | 21,000 | ||||
Actuarial (gain)/loss | 707,000 | (1,937,000) | ||||
Gross benefits paid | (768,000) | (953,000) | ||||
Benefit obligation, end of year | 7,625,000 | 7,403,000 | 9,883,000 | |||
Changes in the fair value of the plan's Level 3 investment assets | ||||||
Employer contribution | 756,000 | 932,000 | ||||
Plan participants' contributions | 12,000 | 21,000 | ||||
Gross benefits paid | (768,000) | (953,000) | ||||
Funded Status | ||||||
Benefit obligations | $ (7,403,000) | $ (9,883,000) | $ (9,883,000) | (7,625,000) | (7,403,000) | |
Funded status and amount recognized, end of year | (7,625,000) | (7,403,000) | ||||
Amounts recognized in the statement of financial position consist of: | ||||||
Current liability | (1,008,000) | (1,063,000) | ||||
Noncurrent liability | (6,617,000) | (6,340,000) | ||||
Amounts recognized in the statement of financial position | (7,625,000) | (7,403,000) | ||||
Amounts recognized in accumulated other comprehensive income consist of: | ||||||
Net actuarial loss/(gain) | (7,820,000) | (8,745,000) | ||||
Prior service cost/(credit) | (6,534,000) | (9,414,000) | ||||
Amounts recognized in accumulated other comprehensive income | $ (14,354,000) | $ (18,159,000) |
EMPLOYEE BENEFITS - Retirement
EMPLOYEE BENEFITS - Retirement and Post retirement costs - (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
Retirement expense for continuing operations | |||
Net retirement expenses | $ 13,404 | $ 14,776 | $ 9,971 |
Pension plan | |||
Retirement expense for continuing operations | |||
Interest cost | 85,468 | 88,668 | 84,994 |
Expected return on plan assets | (89,569) | (89,629) | (94,603) |
Actuarial loss | 20,335 | 18,382 | 22,194 |
Net pension expense | 16,234 | 17,421 | 12,585 |
Post-retirement plans | |||
Retirement expense for continuing operations | |||
Interest cost | 271 | 389 | |
Net pension expense | $ (2,830) | $ (2,645) | $ (2,614) |
EMPLOYEE BENEFITS - Contributio
EMPLOYEE BENEFITS - Contributions (Details) | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2016USD ($) | May 31, 2016USD ($) | Feb. 29, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 25, 2016USD ($)property | Dec. 27, 2015USD ($) | |
Medical cost trend rates | ||||||
Real property locations contributed | property | 2 | |||||
Financing obligations | $ 91,905,000 | $ 51,616,000 | ||||
Pension plan | ||||||
Weighted average assumptions used for valuing benefit obligations | ||||||
Discount rate (as a percent) | 3.91% | 4.52% | ||||
Weighted average assumptions used in calculating expense | ||||||
Expected long-term return on plan assets (as a percent) | 7.75% | 7.75% | 7.75% | |||
Discount rate (as a percent) | 4.52% | 4.71% | 4.24% | |||
Medical cost trend rates | ||||||
Value of contributions to plan | $ 47,100,000 | $ 8,711,000 | $ 55,817,000 | |||
Voluntary cash contribution | 0 | $ 0 | ||||
Expected required pension contribution | $ 2,000,000 | |||||
Term of leases entered into for property contributed to pension plan | 11 years | |||||
Gain or loss recognized on the contribution of property | 0 | |||||
Financing obligations | $ (2,600,000) | $ (25,100,000) | ||||
Reduction in plant, property, and equipment | 2,800,000 | 26,200,000 | ||||
Aggregate Annual Rent Payments On Contributed Property | $ 3,500,000 | |||||
Proceeds from sale of real property location | 4,800,000 | 34,300,000 | ||||
(Loss) on sale of real property location | $ (200,000) | $ (1,100,000) | ||||
Expected benefit payments | ||||||
2,018 | 107,928,000 | |||||
2,019 | 111,699,000 | |||||
2,020 | 111,894,000 | |||||
2,021 | 115,898,000 | |||||
2,022 | 119,016,000 | |||||
2023-2027 | 615,986,000 | |||||
Total | $ 1,182,421,000 | |||||
Post-retirement plans | ||||||
Weighted average assumptions used for valuing benefit obligations | ||||||
Discount rate (as a percent) | 3.60% | 3.95% | ||||
Weighted average assumptions used in calculating expense | ||||||
Discount rate (as a percent) | 3.95% | 4.21% | 3.69% | |||
Medical cost trend rates | ||||||
Value of contributions to plan | $ 756,000 | $ 932,000 | ||||
Expected benefit payments | ||||||
2,018 | 1,008,000 | |||||
2,019 | 919,000 | |||||
2,020 | 840,000 | |||||
2,021 | 768,000 | |||||
2,022 | 698,000 | |||||
2023-2027 | 2,612,000 | |||||
Total | $ 6,845,000 |
EMPLOYEE BENEFITS - Pension Pla
EMPLOYEE BENEFITS - Pension Plan Assets (Details) - Pension plan | 12 Months Ended |
Dec. 31, 2017 | |
Equity securities | |
Contributions and Cash Flows [Line Items] | |
Target Allocation (as a percent) | 61.00% |
Debt securities | |
Contributions and Cash Flows [Line Items] | |
Target Allocation (as a percent) | 33.00% |
Real estate | |
Contributions and Cash Flows [Line Items] | |
Target Allocation (as a percent) | 6.00% |
Minimum | |
Contributions and Cash Flows [Line Items] | |
Investment horizon of plan assets | 10 years |
EMPLOYEE BENEFITS - Fair value
EMPLOYEE BENEFITS - Fair value (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 |
Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | $ 1,477,926 | $ 1,327,490 | |
Pending trades | 7,945 | ||
Fair value of plan assets | 1,477,926 | 1,335,435 | $ 1,349,603 |
Cash and cash equivalents | Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | 8,498 | 677 | |
Mutual funds | Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | 478,565 | 444,698 | |
Common collective trust | Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | 923,304 | 816,435 | |
Real Estate | Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | 58,050 | 57,531 | |
Private Equity | Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | 9,509 | 8,149 | |
Level 1 | Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | 487,063 | 445,375 | |
Level 1 | Cash and cash equivalents | Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | 8,498 | 677 | |
Level 1 | Mutual funds | Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | 478,565 | 444,698 | |
Level 3 | Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | 67,559 | 65,680 | 57,642 |
Level 3 | Real Estate | Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | 58,050 | 57,531 | |
Level 3 | Private Equity | Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | 9,509 | 8,149 | $ 7,282 |
NAV | Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | 923,304 | 816,435 | |
NAV | Common collective trust | |||
EMPLOYEE BENEFITS | |||
Total | 816,435 | ||
NAV | Common collective trust | Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | 923,304 | 816,435 | |
NAV | U.S. equity funds | Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | 353,555 | 310,616 | |
NAV | International equity funds | Pension plan | |||
EMPLOYEE BENEFITS | |||
Total | $ 569,749 | $ 505,819 |
EMPLOYEE BENEFITS - Investment
EMPLOYEE BENEFITS - Investment assets (Details) - Pension plan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 25, 2016 | |
Changes in the fair value of the plan's Level 3 investment assets | ||
Fair value of plan assets, beginning of year | $ 1,327,490 | |
Fair value of plan assets, end of year | 1,477,926 | $ 1,327,490 |
Level 3 | ||
Changes in the fair value of the plan's Level 3 investment assets | ||
Fair value of plan assets, beginning of year | 65,680 | 57,642 |
Purchases, issuances, sales, settlements | 46,944 | |
Realized gains | 4,632 | 8,746 |
Transfer in or out of level 3 | (4,614) | (43,046) |
Unrealized gains | 1,861 | (4,606) |
Fair value of plan assets, end of year | 67,559 | 65,680 |
Real estate | Level 3 | ||
Changes in the fair value of the plan's Level 3 investment assets | ||
Fair value of plan assets, beginning of year | 57,531 | 50,360 |
Purchases, issuances, sales, settlements | 47,130 | |
Realized gains | 4,632 | 8,746 |
Transfer in or out of level 3 | (4,614) | (43,046) |
Unrealized gains | 501 | (5,659) |
Fair value of plan assets, end of year | 58,050 | 57,531 |
Private Equity | ||
Changes in the fair value of the plan's Level 3 investment assets | ||
Fair value of plan assets, beginning of year | 8,149 | |
Fair value of plan assets, end of year | 9,509 | 8,149 |
Private Equity | Level 3 | ||
Changes in the fair value of the plan's Level 3 investment assets | ||
Fair value of plan assets, beginning of year | 8,149 | 7,282 |
Purchases, issuances, sales, settlements | (186) | |
Unrealized gains | 1,360 | 1,053 |
Fair value of plan assets, end of year | $ 9,509 | $ 8,149 |
CASH FLOW INFORMATION (Details)
CASH FLOW INFORMATION (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 25, 2016USD ($)property | Dec. 27, 2015USD ($) | |
Cash paid for interest and income taxes | |||
Interest paid (net of amount capitalized) | $ 68,861,000 | $ 73,373,000 | $ 80,514,000 |
Income taxes paid (net of refunds) | 12,437,000 | $ 2,454,000 | 207,043,000 |
Real property locations contributed | property | 2 | ||
Other non-cash financing activities | |||
Increase of financing obligation for contribution of real property to pension plan | $ 47,130,000 | ||
Reduction of pension obligation for contribution of real property to pension plan | (47,130,000) | ||
Reduction of financing obligation due to sale of real properties by pension plan | (27,632,000) | ||
Reduction of PP&E due to sale of real properties by pension plan | (29,002,000) | ||
Distributions of income from equity investments | 6,000,000 | 7,500,000 | |
Distributions from equity investments | 7,318,000 | 7,428,000 | |
Intangible asset adjustment | $ 0 | $ 3,100,000 | $ 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Obligations by year (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 25, 2016 |
Purchase obligations | ||
2,018 | $ 19,674 | |
2,019 | 16,956 | |
2,020 | 4,085 | |
2,021 | 1,227 | |
Total | 41,942 | |
Lease Obligation | ||
2,018 | 12,763 | |
2,019 | 11,301 | |
2,020 | 10,396 | |
2,021 | 9,602 | |
2,022 | 9,420 | |
Thereafter | 39,406 | |
Total | 92,888 | |
Sublease Income | ||
2,018 | (3,837) | |
2,019 | (2,150) | |
2,020 | (637) | |
2,021 | (572) | |
2,022 | (565) | |
Thereafter | (634) | |
Total | (8,395) | |
Net lease obligations | ||
2,018 | 8,926 | |
2,019 | 9,151 | |
2,020 | 9,759 | |
2,021 | 9,030 | |
2,022 | 8,855 | |
Thereafter | 38,772 | |
Total | 84,493 | |
Contractual Obligation, Fiscal Year Maturity [Abstract] | ||
2,018 | 31,193 | |
2,019 | 27,685 | |
2,020 | 14,971 | |
2,021 | 11,101 | |
2,022 | 9,523 | |
Thereafter | 44,072 | |
Total | 138,545 | |
Self-Insurance | ||
Workers' compensation obligations | ||
2,018 | 2,593 | |
2,019 | 1,578 | |
2,020 | 1,127 | |
2,021 | 844 | |
2,022 | 668 | |
Thereafter | 5,300 | |
Total | $ 12,110 | $ 12,200 |
COMMITMENTS AND CONTINGENCIES58
COMMITMENTS AND CONTINGENCIES - Purchases and Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
Operating leases | |||
Total rental expense, included in other operating expenses, from continuing operations | $ 13.4 | $ 15.4 | $ 11.6 |
Sublease income from operating leases | $ 4.8 | $ 4.6 | $ 4.6 |
COMMITMENTS AND CONTINGENCIES59
COMMITMENTS AND CONTINGENCIES - Obligations disclosures (Details) - Self-Insurance - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 25, 2016 |
Loss Contingencies [Line Items] | ||
Estimated Insurance Recoveries | $ 2.2 | $ 3.2 |
Additional disclosures | ||
Undiscounted ultimate losses of all self-insurance reserves related to our workers' compensation liabilities, net of insurance recoveries | $ 13 | $ 12.2 |
Discount rate of ultimate losses (as a percent) | 2.30% | 1.60% |
Present value of self-insurance reserves | $ 12.1 | $ 13.1 |
COMMITMENTS AND CONTINGENCIES60
COMMITMENTS AND CONTINGENCIES - Legal Proceedings (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2016subsidiary | Dec. 31, 2017USD ($)item | Jan. 31, 2018USD ($) | |
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 | ||
Forecast | Letter of credit | |||
Contingencies | |||
Outstanding letters of credit | $ | $ 29.7 | ||
PNC | |||
Contingencies | |||
Number of subsidiaries | subsidiary | 3 | ||
Ownership interest (as a percent) | 27.00% |
COMMON STOCK AND STOCK PLANS (D
COMMON STOCK AND STOCK PLANS (Details) | 12 Months Ended | |
Dec. 31, 2017item | Dec. 27, 2015shares | |
Class of Stock [Line Items] | ||
Number of classes of common stock | 2 | |
Minimum number of "Permitted Transferees" | 1 | |
Minimum number of lineal descendants of Charles K. McClatchy who owns the beneficial interests of "Permitted Transferees" | 1 | |
Common Class A | ||
Class of Stock [Line Items] | ||
Number of votes per share | 0.1 | |
Percentage of Board of Directors selected from voting | 25.00% | |
Shares issued in conversion | shares | 15,400 | |
Common Class B | ||
Class of Stock [Line Items] | ||
Number of votes per share | 1 | |
Percentage of Board of Directors selected from voting | 75.00% | |
Minimum percentage of common stock outstanding before conversion | 25.00% | |
Vote of the holders as a percentage of outstanding shares required for termination of the agreement | 80.00% |
COMMON STOCK AND STOCK PLANS -
COMMON STOCK AND STOCK PLANS - Share Repurchase (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | 36 Months Ended | ||||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | Dec. 31, 2017 | May 31, 2016 | Aug. 31, 2015 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Treasury stock, acquired (in shares) | 51,996 | 683,334 | 649,448 | |||
Treasury stock, acquired | $ 508 | $ 8,080 | $ 8,434 | |||
Common Class A | Share Repurchase Program 2015 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchase program, authorized amount | $ 20,000 | $ 15,000 | ||||
Treasury stock, acquired (in shares) | 700,000 | 1,300,000 | ||||
Repurchase weighted average price (in dollars per share) | $ 11.83 | $ 12.28 | ||||
Treasury stock, acquired | $ 15,600 |
COMMON STOCK AND STOCK PLANS 63
COMMON STOCK AND STOCK PLANS - Activity and FV (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
May 31, 2017shares | Dec. 31, 2017USD ($)directoritem$ / sharesshares | Dec. 25, 2016director$ / sharesshares | Dec. 27, 2015USD ($)$ / sharesshares | Dec. 28, 2014USD ($)$ / sharesshares | May 31, 2012shares | |
Stock Plans Activity | ||||||
Number of stock-based compensation plans | item | 2 | |||||
Directors terminated | director | 1 | |||||
Options/SARs | ||||||
Outstanding at the beginning of the period (in shares) | 292,750 | 320,125 | 384,875 | |||
Forfeited (in shares) | (50) | (6,875) | ||||
Expired (in shares) | (136,575) | (27,325) | (57,875) | |||
Outstanding at the end of the period (in shares) | 156,175 | 292,750 | 320,125 | 384,875 | ||
Vested and Expected to Vest at the end of the period (in shares) | 156,175 | |||||
Options exercisable (in shares) | 156,175 | 279,100 | 277,413 | |||
Weighted Average Exercise Price | ||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 50.29 | $ 73.49 | $ 92.81 | |||
Forfeited (in dollars per share) | $ / shares | 27.60 | 26.09 | ||||
Expired (in dollars per share) | $ / shares | 71.07 | 322.20 | 207.56 | |||
Outstanding at the end of the period (in dollars per share) | $ / shares | 32.12 | $ 50.29 | $ 73.49 | $ 92.81 | ||
Vested and Expected to Vest at the end of the period (in dollars per share) | $ / shares | $ 32.12 | |||||
Aggregate Intrinsic Value | ||||||
Outstanding at the beginning of the period (in dollars) | $ | $ 1,542 | |||||
Outstanding at the end of the period (in dollars) | $ | $ 1,542 | |||||
2004 Plan | ||||||
Stock Plans Activity | ||||||
Vesting period | 4 years | |||||
Terms of award | 10 years | |||||
Granted (in shares) | 0 | |||||
RSU's | ||||||
Granted (in shares) | 0 | |||||
Director Deferral Program | ||||||
Stock Plans Activity | ||||||
Number of directors | director | 2 | 3 | ||||
Deferred (in shares) | 9,000 | 13,500 | ||||
Issued (in shares) | 36,000 | 31,500 | ||||
Stock Appreciation Rights (SARs) [Member] | ||||||
Stock Plans Activity | ||||||
Vesting period | 4 years | |||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Abstract] | ||||||
Unrecognized compensation costs | $ | $ 0 | |||||
Stock Appreciation Rights (SARs) [Member] | 2012 Plan | Maximum | ||||||
Stock Plans Activity | ||||||
Terms of award | 10 years | |||||
RSUs | ||||||
Stock Plans Activity | ||||||
Granted (in shares) | 254,405 | 170,440 | 136,530 | |||
RSU's | ||||||
Nonvested at the beginning of the period (in shares) | 204,145 | 153,880 | 132,955 | |||
Granted (in shares) | 254,405 | 170,440 | 136,530 | |||
Vested (in shares) | (206,776) | (112,895) | (97,000) | |||
Forfeited (in shares) | (5,980) | (7,280) | (18,605) | |||
Nonvested at the end of the period (in shares) | 245,794 | 204,145 | 153,880 | 132,955 | ||
Weighted Average Grant Date Fair Value | ||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 18.17 | $ 29.83 | $ 36.20 | |||
Granted (in dollars per share) | $ / shares | 9.99 | 11.80 | 22.80 | |||
Vested (in dollars per share) | $ / shares | 16.14 | 24.57 | 28.50 | |||
Forfeited (in dollars per share) | $ / shares | 12.86 | 16.32 | 30.80 | |||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 11.55 | $ 18.17 | $ 29.83 | $ 36.20 | ||
Additional disclosures | ||||||
Total fair value | $ | $ 2,100 | |||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Abstract] | ||||||
Unrecognized compensation costs | $ | $ 1,700 | |||||
Period in which compensation costs will be recognized | 1 year 8 months 12 days | |||||
RSUs | Maximum | ||||||
Stock Plans Activity | ||||||
Vesting period | 3 years | |||||
Common Class A | 2004 Plan | ||||||
Stock Plans Activity | ||||||
Shares reserved for issuance to employees | 900,000 | |||||
Common Class A | 2012 Plan | ||||||
Stock Plans Activity | ||||||
Shares reserved for issuance to employees | 500,000 | |||||
Additional shares authorized | 500,000 | |||||
Common Class A | Non-employee director | 2012 Plan | ||||||
Stock Plans Activity | ||||||
Outstanding grants (in shares) | 4,500 | |||||
Granted (in shares) | 4,500 | 1,500 | 1,500 | |||
Issued (in shares) | 15,000 | 15,000 | ||||
RSU's | ||||||
Granted (in shares) | 4,500 | 1,500 | 1,500 |
COMMON STOCK AND STOCK PLANS 64
COMMON STOCK AND STOCK PLANS - Outstanding Options and SARs (Details) - Stock options and SARs | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Share Based Compensation Shares Authorized under Stock Option and SARs Exercise Price Range Outstanding Options [Abstract] | |
Number of Options/SARs (in shares) | shares | 156,175 |
Average Remaining Contractual Life | 2 years 6 months |
Weighted Average Exercise Price (in dollars per share) | $ 32.12 |
Options/SARs Exercisable | |
Number of Options/SARs (in shares) | shares | 156,175 |
Weighted Average Exercise Price (in dollars per share) | $ 32.12 |
Weighted average remaining contractual life | 2 years 6 months |
$17.00 - $27.60 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, low end of range (in dollars per share) | $ 17 |
Exercise price, high end of range (in dollars per share) | $ 27.60 |
Share Based Compensation Shares Authorized under Stock Option and SARs Exercise Price Range Outstanding Options [Abstract] | |
Number of Options/SARs (in shares) | shares | 85,925 |
Average Remaining Contractual Life | 2 years 9 months 26 days |
Weighted Average Exercise Price (in dollars per share) | $ 25.03 |
Options/SARs Exercisable | |
Number of Options/SARs (in shares) | shares | 85,925 |
Weighted Average Exercise Price (in dollars per share) | $ 25.03 |
$34.20 - $97.30 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, low end of range (in dollars per share) | 34.20 |
Exercise price, high end of range (in dollars per share) | $ 97.30 |
Share Based Compensation Shares Authorized under Stock Option and SARs Exercise Price Range Outstanding Options [Abstract] | |
Number of Options/SARs (in shares) | shares | 70,250 |
Average Remaining Contractual Life | 2 years 1 month 13 days |
Weighted Average Exercise Price (in dollars per share) | $ 40.79 |
Options/SARs Exercisable | |
Number of Options/SARs (in shares) | shares | 70,250 |
Weighted Average Exercise Price (in dollars per share) | $ 40.79 |
COMMON STOCK AND STOCK PLANS 65
COMMON STOCK AND STOCK PLANS - Assumptions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
COMMON STOCK AND STOCK PLANS | |||
Stock-based compensation expense | $ 2,475 | $ 3,130 | $ 3,178 |
QUARTERLY RESULTS OF OPERATIO66
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 24, 2017 | Jun. 25, 2017 | Mar. 26, 2017 | Dec. 25, 2016 | Sep. 25, 2016 | Jun. 26, 2016 | Mar. 27, 2016 | Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |||||||||||
Length of fiscal year | 371 days | 364 days | 364 days | ||||||||
Length of fiscal quarter | 98 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | |||
Selected Quarterly Financial Information [Abstract] | |||||||||||
Net revenues | $ 244,656 | $ 212,604 | $ 225,120 | $ 221,212 | $ 262,179 | $ 234,701 | $ 242,234 | $ 237,979 | $ 903,592 | $ 977,093 | $ 1,056,574 |
Operating income | 29,963 | 4,611 | 12,110 | (4,519) | 33,439 | 5,229 | 1,001 | (2,353) | 42,165 | 37,316 | (235,368) |
Net income (loss) | $ 61,139 | $ (260,476) | $ (37,446) | $ (95,575) | $ 3,086 | $ (9,804) | $ (14,734) | $ (12,741) | $ (332,358) | $ (34,193) | $ (300,162) |
Net loss per share - diluted (in dollars per share) | $ 7.91 | $ (34.11) | $ (4.91) | $ (12.60) | $ 0.40 | $ (1.30) | $ (1.89) | $ (1.58) | $ (43.55) | $ (4.41) | $ (34.66) |
QUARTERLY RESULTS OF OPERATIO67
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) - Debt, Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2017 | Sep. 24, 2017 | Jun. 25, 2017 | Mar. 26, 2017 | Dec. 25, 2016 | Sep. 24, 2017 | Dec. 31, 2017 | Dec. 25, 2016 | Dec. 27, 2015 | |
Debt Instrument [Line Items] | |||||||||
Impairments related to equity investments | $ 170,007 | $ 892 | |||||||
Goodwill impairment charge | 0 | 0 | $ 290,900 | ||||||
Valuation allowance against majority of deferred tax assets | $ 109,700 | $ 245,400 | $ 245,400 | 109,700 | |||||
Tax Act decrease in valuation allowance | (53,600) | (53,600) | |||||||
New federal tax rate expense (benefit) | (5,500) | (5,500) | |||||||
Newspaper mastheads | |||||||||
Debt Instrument [Line Items] | |||||||||
Impairment Charges | $ 12,800 | $ 8,700 | $ 9,200 | $ 8,700 | 21,485 | $ 9,196 | $ 13,900 | ||
Career Builder LLC | |||||||||
Debt Instrument [Line Items] | |||||||||
Impairments related to equity investments | $ 45,600 | $ 123,000 | $ 168,200 |