Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 02, 2018 | |
Entity Registrant Name | MCCLATCHY CO | |
Entity Central Index Key | 1,056,087 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Common Class A | ||
Entity Common Stock, Shares Outstanding | 5,380,650 | |
Common Class B | ||
Entity Common Stock, Shares Outstanding | 2,428,191 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 24, 2017 | Sep. 30, 2018 | Sep. 24, 2017 | |
REVENUES - NET: | ||||
Net revenues | $ 191,065 | $ 212,604 | $ 594,271 | $ 658,936 |
OPERATING EXPENSES: | ||||
Compensation | 73,501 | 80,652 | 230,650 | 258,883 |
Newsprint, supplements and printing expenses | 12,913 | 15,075 | 40,333 | 49,379 |
Depreciation and amortization | 19,041 | 19,588 | 57,496 | 59,016 |
Other operating expenses | 90,527 | 83,963 | 271,993 | 268,784 |
Other asset write-downs | 14,148 | 8,715 | 14,207 | 10,672 |
Operating expenses, total | 210,130 | 207,993 | 614,679 | 646,734 |
OPERATING INCOME (LOSS) | (19,065) | 4,611 | (20,408) | 12,202 |
NON-OPERATING INCOME (EXPENSE): | ||||
Interest expense | (23,346) | (19,801) | (60,181) | (60,547) |
Interest income | 135 | 121 | 441 | 410 |
Equity income (loss) in unconsolidated companies, net | (473) | (600) | 573 | (696) |
Impairments related to investments in unconsolidated companies, net | (1,866) | (171,013) | ||
Gains related to investments in consolidated companies | 1,721 | 1,721 | ||
Gain (loss) on extinguishment of debt, net | 36,286 | (1,831) | 30,918 | (2,700) |
Retirement benefit expense | (2,778) | (3,328) | (8,335) | (9,983) |
Other - net | 136 | 23 | 71 | 106 |
Non-operating income (expense), total | 11,681 | (27,282) | (34,792) | (244,423) |
Loss before income taxes | (7,384) | (22,671) | (55,200) | (232,221) |
Income tax (benefit) expense | (14,422) | 237,805 | (2,932) | 161,276 |
NET INCOME (LOSS) | $ 7,038 | $ (260,476) | $ (52,268) | $ (393,497) |
Net income (loss) per common share: | ||||
Net loss per share - basic (in dollars per share) | $ 0.90 | $ (34.11) | $ (6.74) | $ (51.67) |
Net loss per share - diluted (in dollars per share) | $ 0.90 | $ (34.11) | $ (6.74) | $ (51.67) |
Weighted average number of common shares: | ||||
Basic (in shares) | 7,778 | 7,637 | 7,754 | 7,616 |
Diluted (in shares) | 7,850 | 7,637 | 7,754 | 7,616 |
Advertising | ||||
REVENUES - NET: | ||||
Net revenues | $ 95,102 | $ 115,331 | $ 301,942 | $ 360,459 |
Audience | ||||
REVENUES - NET: | ||||
Net revenues | 84,040 | 87,142 | 255,143 | 268,473 |
Other | ||||
REVENUES - NET: | ||||
Net revenues | $ 11,923 | $ 10,131 | $ 37,186 | $ 30,004 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 24, 2017 | Sep. 30, 2018 | Sep. 24, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
NET INCOME (LOSS) | $ 7,038 | $ (260,476) | $ (52,268) | $ (393,497) |
Pension and post retirement plans: | ||||
Change in pension and post-retirement benefit plans | 5,550 | 7,712 | 16,649 | 12,853 |
Investment in unconsolidated companies: | ||||
Other comprehensive income | 2,697 | 6,743 | ||
Other comprehensive income | 5,550 | 10,409 | 16,649 | 19,596 |
Comprehensive income (loss) | $ 12,588 | $ (250,067) | $ (35,619) | $ (373,901) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 4,492 | $ 99,387 |
Trade receivables (net of allowances of $3,772 and $3,225) | 65,791 | 101,081 |
Other receivables | 11,591 | 11,556 |
Newsprint, ink and other inventories | 9,829 | 7,918 |
Assets held for sale | 5,924 | 6,332 |
Other current assets | 17,997 | 19,000 |
Total current assets | 115,624 | 245,274 |
Property, plant and equipment, net | 242,414 | 257,639 |
Intangible assets: | ||
Identifiable intangibles - net | 178,216 | 228,222 |
Goodwill | 705,174 | 705,174 |
Total intangible assets | 883,390 | 933,396 |
Investments and other assets: | ||
Investments in unconsolidated companies | 3,696 | 7,172 |
Other assets | 61,389 | 62,437 |
Total investments and other assets | 65,085 | 69,609 |
TOTAL ASSETS | 1,306,513 | 1,505,918 |
Current liabilities: | ||
Current portion of long-term debt | 74,140 | |
Accounts payable | 30,478 | 31,856 |
Accrued pension liabilities | 8,941 | 8,941 |
Accrued compensation | 21,598 | 24,050 |
Income taxes payable | 10,133 | |
Unearned revenue | 60,193 | 60,436 |
Accrued interest | 11,599 | 7,954 |
Other accrued liabilities | 16,958 | 18,832 |
Total current liabilities | 149,767 | 236,342 |
Non-current liabilities : | ||
Long-term debt | 638,651 | 707,252 |
Deferred income taxes | 25,892 | 28,062 |
Pension and postretirement obligations | 584,158 | 599,763 |
Financing obligations | 106,192 | 91,905 |
Other long-term obligations | 43,077 | 46,926 |
Total non-current liabilities | 1,397,970 | 1,473,908 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Additional paid-in capital | 2,216,926 | 2,215,109 |
Accumulated deficit | (2,025,033) | (1,970,097) |
Treasury stock at cost, 48,654 shares and 3,157 shares | (475) | (51) |
Accumulated other comprehensive loss | (432,720) | (449,369) |
Total stockholders' equity | (241,224) | (204,332) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 1,306,513 | 1,505,918 |
Common Class A | ||
Stockholders' equity: | ||
Common stock | 54 | 52 |
Common Class B | ||
Stockholders' equity: | ||
Common stock | $ 24 | $ 24 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Trade receivables, allowance | $ 3,772 | $ 3,225 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Treasury stock, shares | 48,654 | 3,157 |
Common Class A | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 5,429,199 | 5,256,325 |
Common Class B | ||
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 2,428,191 | 2,443,191 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 24, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (52,268) | $ (393,497) |
Reconciliation to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 57,496 | 59,016 |
Gain on disposal of property and equipment (excluding other asset write-downs) | (2,820) | (10,269) |
Retirement benefit expense | 8,335 | 9,983 |
Stock-based compensation expense | 1,819 | 1,786 |
Deferred income taxes | (2,170) | 153,725 |
Equity (income) loss in unconsolidated companies | (573) | 696 |
Gains related to investments in unconsolidated companies | (1,721) | |
Impairments related to investments in unconsolidated companies | 171,013 | |
Distributions of income from investments in unconsolidated companies | 2,876 | |
(Gain) loss on extinguishment of debt, net | (30,918) | 2,700 |
Other asset write-downs | 14,207 | 10,672 |
Other | (1,119) | (4,823) |
Changes in certain assets and liabilities: | ||
Trade receivables | 32,622 | 24,409 |
Inventories | (1,911) | 2,526 |
Other assets | 2,380 | 1,358 |
Accounts payable | (1,378) | (4,001) |
Accrued compensation | (2,452) | (3,160) |
Income taxes | (10,379) | (2,304) |
Accrued interest | 3,645 | 6,093 |
Other liabilities | (7,793) | (5,464) |
Net cash provided by operating activities | 7,878 | 20,459 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (9,262) | (7,378) |
Proceeds from sale of property, plant and equipment and other | 4,052 | 22,656 |
Distributions from equity investments | 7,318 | |
Contributions to cost and equity investments | (2,301) | (2,698) |
Proceeds from sale of unconsolidated companies and other-net | 5,301 | 66,652 |
Net cash provided by (used in) investing activities | (2,210) | 86,550 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repurchase of notes and related expenses | (459,539) | (70,615) |
Proceeds from issuance of debt | 361,449 | |
Payment of financing costs | (17,387) | |
Proceeds from sale-leaseback financing obligations | 15,749 | 43,971 |
Purchase of treasury shares | (424) | (457) |
Other | (441) | 861 |
Net cash used in financing activities | (100,593) | (26,240) |
Increase (decrease) in cash, cash equivalents and restricted cash | (94,925) | 80,769 |
Cash, cash equivalents and restricted cash at beginning of period | 131,354 | 36,248 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | $ 36,429 | $ 117,017 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | THE MCCLATCHY COMPANY 1. SIGNIFICANT ACCOUNTING POLICIES Business and Basis of Accounting The McClatchy Company (“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 Star , 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. Preparation of the financial statements in conformity with accounting principles generally accepted in the United States and pursuant to the rules and regulation of the Securities and Exchange Commission requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The condensed consolidated financial statements include the Company and our subsidiaries. Intercompany items and transactions are eliminated. In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, that are necessary to present fairly our financial position, results of operations, and cash flows for the interim periods presented. The financial statements contained in this report are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 (“Form 10-K”). Each of the fiscal periods included herein comprise 13 weeks for the third-quarter periods and 39 weeks for the nine-month periods. 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. During the quarter ended September 30, 2018, as a result of the refinancing transactions discussed in Note 5, we transferred our Debentures (as defined in Note 5) from Level 2 to Level 3 in the fair value hierarchy. The following methods and assumptions were used to estimate the fair value of each class of financial instruments: Cash and cash equivalents, accounts receivable and accounts payable. As of September 30, 2018, and December 31, 2017, the carrying amount of these items approximates fair value because of the short maturity of these financial instruments. Long-term debt. At September 30, 2018 the carrying value and the estimated fair value of our 2026 Notes (as defined in Note 5) was $290.0 million and $314.3 million, respectively. As of December 31, 2017, the carrying value and the estimated fair value of the long-term debt, including the current portion of long-term debt, was $781.4 million and $810.7 million, respectively. The fair value of our long-term debt is described above was determined using quoted market prices, including the current market activity of our publicly-traded notes and bank debt, trends in investor demand for debt and market values of comparable publicly-traded debt. These are considered to be Level 2 inputs under the fair value measurements and disclosure guidance and may not be representative of actual value. At September 30, 2018, the carrying value and the estimated fair value of our Debentures and Junior Term Loans (as defined in Note 5), was $348.6 million and $328.7 million, respectively. The fair values of our Debentures and Junior Term loans were estimated based on available market evidence, including quoted market prices for the same or similar instruments. If market evidence was not available or reliable, the fair value was based on the net present value of the future cash flows using interest rates derived from market inputs and a Treasury yield curve in effect at September 30, 2018. These are considered to be Level 3 inputs under the fair value measurements and disclosure guidance and may not be representative of actual value. Certain assets are measured at fair value on a nonrecurring basis; that is, they are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Our non-financial assets that may be measured at fair value on a nonrecurring basis are assets held for sale, goodwill, intangible assets not subject to amortization and cost or 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 the expected cash flows and the discount rates that we estimate market participants would seek for bearing the risk associated with such assets. Newsprint, ink and other inventories Newsprint, ink and other inventories are stated at the lower of cost (based principally on the first‑in, first‑out method) and net realizable value. During the nine months ended September 24, 2017, we recorded a $2.0 million write‑down of non-newsprint inventory, which is reflected in the other asset write-downs line on our condensed consolidated statement of operations. There were no similar write-downs of newsprint, ink or other inventories during the nine months ended September 30, 2018. Property, Plant and Equipment Depreciation expense with respect to property, plant and equipment is summarized below: Quarters Ended Nine Months Ended September 30, September 24, September 30, September 24, (in thousands) 2018 2017 2018 2017 Depreciation expense $ 7,146 $ 7,496 $ 21,638 $ 22,748 Assets Held for Sale During the nine months ended September 30, 2018, we began to actively market for sale the land and buildings at two of our media companies. In connection with classifying these assets as assets held for sale, the carrying value of the land and building at one of the properties was reduced to its estimated fair value less selling costs, as determined based on the current market conditions and the estimated selling price. As a result, an impairment charge of $0.1 million was recorded during the nine months ended September 30, 2018, and is included in other asset write-downs on our condensed consolidated statement of operations. The land and building at this property were sold during the quarter ended July 1, 2018, with no gain or additional loss. The assets at the second property remain classified as assets held for sale. Intangible Assets and Goodwill We test for impairment of goodwill annually at year‑end, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The required approach uses accounting judgments and estimates of future operating results. Changes in estimates or the application of alternative assumptions could produce significantly different results. Impairment testing is done at a reporting unit level. We perform this testing on our 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 future revenue, newsprint prices, compensation levels, discount rate, hypothetical transaction structures, and for the market based approach, private and public market trading multiples for newspaper assets. We consider current market capitalization, based upon the recent stock market prices plus an estimated control premium, in determining the reasonableness of the aggregate fair value of the reporting units. We had no impairment of goodwill during the quarters and nine months ended September 30, 2018, or September 24, 2017. 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 the 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 30, 2018, due to the continuing challenging business conditions in certain markets as of the end of the third quarter of 2018. We also 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 the third quarter of 2017. Individual newspaper mastheads were estimated using the present value of expected future cash flows, using estimates, judgments and assumptions discussed above that we believe were appropriate in the circumstances. As a result of these interim tests, we recorded intangible newspaper masthead impairment charge of $14.1 million in the quarter and nine months ended September 30, 2018, and $8.7 million in the quarter and nine months ended September 24, 2017. Both of which are recorded in other asset write-downs on our condensed consolidated statements of operations. 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 the quarters and nine months ended September 30, 2018, or September 24, 2017. Financing Obligations Financing obligations consist of contributions of real properties to the Pension Plan in 2016 and 2011, real property previously owned by The Sacramento Bee in Sacramento, California that was sold and leased back during the third quarter of 2017, and real property previously owned by The State in Columbia, South Carolina that we sold and leased back during the second quarter of 2018. Our long-term financing obligations increased by approximately $14.6 million during the first nine months of 2018 with the sale and leaseback of the Columbia real property. Segment Reporting 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 operations in the Carolinas and East. Accumulated Other Comprehensive Loss Our accumulated other comprehensive loss (“AOCL”) and reclassifications from AOCL, net of tax, consisted of the following: Other Minimum Comprehensive Pension and Loss Post- Related to Retirement Equity (in thousands) Liability Investments Total Balance at December 31, 2017 $ (442,406) $ (6,963) $ (449,369) Amounts reclassified from AOCL 16,649 — 16,649 Other comprehensive income 16,649 — 16,649 Balance at September 30, 2018 $ (425,757) $ (6,963) $ (432,720) Amount Reclassified from AOCL Amount Reclassified from AOCL Quarters Ended Nine Months Ended (in thousands) September 30, September 24, September 30, September 24, Affected Line in the Condensed AOCL Component 2018 2017 2018 2017 Consolidated Statements of Operations Minimum pension and post-retirement liability $ 5,550 $ 7,712 $ 16,649 $ 12,853 Retirement benefit expense (1) _____________________ (1) There is no income tax benefit associated with the quarter and nine months ended September 30, 2018, or September 24, 2017, due to the recognition of a valuation allowance. 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. We have concluded our evaluation of the tax implications of the Tax Act on our accounting, including the impact on state taxes, certain compensation arrangements and depreciation. There were no significant adjustments from our original conclusions as previously reported. A tax valuation allowance is required when it is more-likely-than-not that all or a portion of deferred tax assets may not be realized. The timing of recording or releasing a valuation allowance requires significant judgment. Establishment and removal of a valuation allowance requires us to consider all positive and negative evidence and to make a judgmental decision regarding the amount of valuation allowance required as of a reporting date. The assessment takes into account expectations of future taxable income or loss, available tax planning strategies and the reversal of temporary differences. The development of these expectations involves the use of estimates such as operating profitability. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. We performed our assessment of the deferred tax assets during the third and fourth quarters of 2017, weighing the positive and negative evidence as outlined in ASC 740-10, Income Taxes . As we have incurred three years of cumulative pre-tax losses, such objective negative evidence limits our ability to give significant weight to other positive subjective evidence, such as projections for future growth and profitability. As of December 31, 2017, our valuation allowance against a majority of our deferred tax assets was $109.7 million. For the quarter and nine months ended September 30, 2018, we recorded a valuation allowance benefit of $2.8 million and a charge of $21.6 million, respectively, which is recorded in income tax (benefit) expense on our condensed consolidated statements of operations. Our valuation allowance as of September 30, 2018, was $131.3 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 arises in the future that provides an indication that all of or a portion of the deferred tax assets meet the more likely than not standard, the valuation allowance may be reversed, in whole or in part, in the period that such determination is made. Current generally accepted accounting principles prescribe a recognition threshold and measurement of a tax position taken or expected to be taken in an enterprise’s tax returns. We recognize accrued interest related to unrecognized tax benefits in interest expense. Accrued penalties are recognized as a component of income tax expense. Earnings Per Share (EPS) Basic EPS excludes dilution from common stock equivalents and reflects income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is based upon the weighted average number of outstanding shares of common stock and dilutive common stock equivalents in the period. Common stock equivalents arise from dilutive stock appreciation rights and restricted stock units, and are computed using the treasury stock method. Anti-dilutive common stock equivalents are excluded from diluted EPS. The weighted average anti-dilutive common stock equivalents that could potentially dilute basic EPS in the future, but were not included in the weighted average share calculation, consisted of the following: Quarters Ended Nine Months Ended September 30, September 24, September 30, September 24, (shares in thousands) 2018 2017 2018 2017 Anti-dilutive common stock equivalents 127 336 199 385 Cash Flow Information Reconciliation of cash, cash equivalents and restricted cash as reported in the condensed consolidated balance sheets to the total of the same such amounts shown above: September 30, December 31, (in thousands) 2018 2017 Cash and equivalents $ 4,492 $ 99,387 Restricted cash included in other assets (1) 31,937 31,967 Total cash, cash equivalents and restricted cash $ 36,429 $ 131,354 _____________________ (1) Restricted cash balances are certificates of deposits secured against letters of credit primarily related to contractual agreements with our workers’ compensation insurance carrier and one of our property leases. Cash paid for interest and income taxes and other non-cash activities consisted of the following: Nine Months Ended September 30, September 24, (in thousands) 2018 2017 Interest paid (net of amount capitalized) $ 42,910 $ 45,889 Income taxes paid (net of refunds) 12,865 9,988 Other non-cash investing and financing activities related to pension plan transactions: Reduction of financing obligation due to sale of real properties by pension plan (2,667) — Reduction of PP&E due to sale of real properties by pension plan (2,854) — During the third quarter of 2018, we completed a debt for debt exchange of a majority of the existing 2027 Debentures and 2029 Debentures for newly issued Tranche A Junior Term Loans and Tranche B Junior Term Loans. This transaction included a non-cash discount of $68.7 million recorded within the gain on extinguishment of debt. See Note 5 for definitions and further information. Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“Topic 606”), “ Revenue from Contracts with Customers. ” 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. Topic 606 requires 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 provided further guidance and clarification on specific items within the previously issued update. We adopted Topic 606 as of January 1, 2018, using the modified retrospective transition method. See Note 2 for further details. 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. We adopted ASU 2016-01 as of January 1, 2018, on a prospective basis, but it did not have an impact on our condensed consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “ Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ” ASU 2016-15 addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. We adopted ASU 2016-15 as of January 1, 2018, retrospectively, but it did not have an impact on our condensed consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, “ Statement of Cash Flows (Topic 230): Restricted Cash. ” ASU 2016-18 addresses the presentation of restricted cash in the statement of cash flows. The standard requires an entity to include restricted amounts with cash and cash equivalents in the statement of cash flows. An entity will no longer present transfers between cash and cash equivalents and restricted amounts on the statement of cash flows. We adopted ASU 2016-18 as of January 1, 2018, using the retrospective transition method to each period presented. As a result of the adoption, net cash provided by operating activities increased of $2.0 million to exclude the changes in restricted cash, resulting in the nine months ended September 24, 2017, on our condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, “ Leases ” (Accounting Standards Codification 842 (“ASC 842”)) and it replaces the existing guidance in ASC 840, “ Leases. ” ASC 842 requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets (“ROU”). For income statement purposes operating leases will result in straight-line expenses and capital leases will result in expenses similar to current financing leases. The new lease standard does not substantially change lessor accounting. The guidance also requires additional disclosures to enable users of financial statements to understand the amount, timing and uncertainty of cash flows arising from leases. In 2018, the FASB issued ASU No. 2018-01, ASU 2018-10, and ASU 2018-11 that provides further guidance and clarification on specific items within the previously issued update. ASC 842 is effective for us for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. We plan to adopt ASC 842 in our next fiscal year beginning December 31, 2018, using the modified retrospective approach and we intend to elect certain available practical expedients upon adoption. Our leases are made up of mostly real estate, vehicle and other equipment leases. As a result, we anticipate that ASC 842 will have a material impact on our condensed consolidated balance sheets due to the recognition of ROU assets and lease liabilities for operating leases. We expect our accounting for capital leases to remain substantially unchanged and do not expect that adoption will have a material impact on our condensed consolidated statements of operations. We are in the process of reviewing various lease agreements, implementing a lease management and accounting software, and identifying changes to internal controls and processes to appropriately account and disclose for the new standard. We have not yet quantified the standards impact on the condensed consolidated financial statements. We plan to finalize our determination of the impact by the end of the fourth quarter of 2018. 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 measurement of expected credit losses is to be based upon a broad set of information to include historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. It is effective for us for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted for interim or annual reporting periods beginning after December 15, 2018. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. In 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. 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 condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ” ASU 2018-02 adds, removes and modifies various disclosure requirements within Topic 820. It is effective for us for interim and annual reporting periods beginning after December 15, 2019. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this guidance and delay adoption of the additional disclosures until their effective date. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-14, “ Compensation-Retirement Benefits-Defined Benefit Plan-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans. ” ASU 2018-14 adds, removes or clarifies various disclosure requirements within guidance. It is effective for us for annual reporting periods beginning after December 15, 2020, and early adoption is permitted. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, “ Intangibles-Goodwill and Other-Internal -Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ” ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). It is effective for us for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. |
REVENUES
REVENUES | 9 Months Ended |
Sep. 30, 2018 | |
REVENUES | |
REVENUES | 2. REVENUES Adoption of ASC 2014-09 (Topic 606), “Revenue from Contracts with Customers” On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. We recorded a net increase to opening accumulated deficit of $2.7 million as of January 1, 2018, due to the cumulative impact of adopting Topic 606, with the impact primarily related to our audience revenues. The impact to revenues as a result of applying Topic 606 was zero and an increase of $0.4 million for the quarter and nine months ended September 30, 2018, respectively, compared to applying Topic 605. Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. All revenues recognized on the condensed consolidated statements of operations are the result of contracts with customers, except for revenues associated with lease income where we are the lessor through a sublease arrangement, as these are outside the scope of Topic 606. Advertising Revenues We generate revenues primarily by delivering advertising on our digital media sites, on our partners’ websites and in our newspapers. These advertising revenues are generated through digital and print performance obligations that are included in contracts with customers, which are typically one year or less in duration or commitment. There are no differences in the treatment of digital and print advertising performance obligations or the recognition of revenues for retail, national, classified, and direct marketing revenue categories under Topic 606. We generate advertising revenues through digital products that are sold on cost-per-thousand impressions (“CPM”) which means that an advertiser pays based upon number of times their ad is displayed on our owned and operated websites and apps, our partners’ websites, ad exchanges, in a video pre-roll or a programmatic bidding exchange. Such revenues are recognized according to the timing outlined in the contract. There are also monthly marketing campaigns which may include multiple products such as items sold by CPM, reputation management, search engine marketing and search engine optimization. In these arrangements as well as in a CPM sale, the contracted goods and services are performed over the specific contract term and the transfer of the performance obligation occurs as the benefits are consumed by the customer. As such, revenue is recognized daily regardless of the performance obligations classification of timing of being point in time or overtime. Print advertising is advertising that is printed in a publication, inserted into a publication, or physically mailed to a customer. Our performance obligations for print products are directly associated with the inclusion of the advertisement in the final publication and delivery of the product on the contracted distribution day. Revenues are recognized at the point in time that the newspaper publication is delivered and distribution of the advertisement is satisfied. Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. We estimate these amounts based on the expected value approach. For ads placed on our partners’ websites or selling a product hosted or managed by partners, we evaluate whether we are the principal or agent. Generally, we report advertising revenues for ads placed on our partners’ websites or for the resale of their products on a gross basis; that is, the amounts billed to our customers are recorded as revenues, and amounts paid to our partners for their products or advertising space are recorded as operating expenses. Where we are the principal, we are primarily responsible to our customers for fulfillment of the contract goals though, from time to time, the use of third party goods or services. Our control is further supported by our level of discretion in establishing price and in some cases, controlling inventory before it is transferred to the customer. Most products, including the printed newspaper advertising product, banner ads on our websites and video ads on our owned and operated player are reported on a gross basis. However, there are some third party products and services that we offer to customers and various revenue share arrangements, such as exchange platforms, that are reported on a net basis. Revenues are earned through being a reseller of a product or participating in an exchange where control over the service provided is limited and costs of the arrangement are net of revenue received. Audience Revenues Audience revenues include digital and print subscriptions or a combination of both at various frequencies of delivery. Our subscribers typically pay us in advance of when their subscriptions start or shortly thereafter. Our performance obligation to subscribers of our digital products is the real-time access to news and information delivered through multiple digital platforms. Our performance obligation to our traditional print subscribers is delivery of the physical newspaper according to their subscription plan. Revenues related to digital and print subscriptions are recognized ratably each day that a product is delivered to the subscriber. Digital subscriptions may be purchased for a day, month, quarter, or year, and revenue is reported daily over the term of the contract. Traditional print subscriptions may have various frequencies of delivery based upon the subscribers delivery preference. Revenues are recognized based upon each delivery, therefore at a point in time. Certain subscribers may enter into a grace period (“grace”) after their previous contract term has expired but before payment has be received on the renewal. Grace is granted as a continuation of the subscription contract, so that service is not disrupted, and the extension is accounted for as variable consideration. We estimate these revenue amounts based on the expected amount to be received, taking into account the expected discontinuation of service or nonpayment based on historical experience. Other Revenues The largest revenue streams within other revenues are for commercial printing and distribution. The commercial print agreements are between us and third party publishers to print and make available for distribution their finished products. Commercial print contracts are for a daily finished product and each day’s product is unique, or a separate performance obligation. Revenue is recorded at a point in time upon completion of each day’s print project. The performance obligation for distribution revenues is the transportation of third-party published products to their subscribers or stores for resale. Distribution is performed substantially the same over the life of the contract and revenue is recognized at the point in time each performance obligation is completed. We report distribution revenues from the third-party publishers on a gross basis. That is, the amounts that we bill to third party publishers to deliver their finished product to their customers are recorded as revenues, and the amounts paid to our independent carriers to deliver the third party product are recorded as operating expenses. Arrangements with Multiple Performance Obligations Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenue to each performance obligation based on its standalone selling price. We generally determine standalone selling prices for audience revenue contracts based upon observable market values and the adjusted market assessment. For advertising revenue contracts with multiple performance obligations, stand alone selling price is based on the prices charged to customers or on an adjusted market assessment. Unearned Revenues We record unearned revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. The decrease in the unearned revenue balance for the nine months ended September 30, 2018, was primarily driven by cash payments received or due in advance of satisfying our performance obligations, exceeded by $55.9 million of revenues recognized that were included in the unearned revenue balance as of December 31, 2017. Our payment terms vary for advertising and subscriber customers. Subscribers generally pay in advance of up to one year. Advertiser payments are due within 30 days of invoice issuance and therefore amounts paid in advance are not significant. For advertisers that are considered to be at a higher risk of collectability due to payment history or credit processing, we require payment before the products or services are delivered to the customer. Practical Expedients and Exemptions We expense sales commissions when incurred because the amortization period would have been one year or less if capitalized. These costs are recorded within compensation expenses. We record usage-based royalties promised in exchange for use of our intellectual property, including but not limited to photographs and articles. These royalty revenues are accrued when estimates of usage and recoverability are made. These revenues are recorded within other revenues. We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 9 Months Ended |
Sep. 30, 2018 | |
INTANGIBLE ASSETS AND GOODWILL | |
INTANGIBLE ASSETS AND GOODWILL | 3. INTANGIBLE ASSETS AND GOODWILL Intangible assets subject to amortization (primarily advertiser lists, subscriber lists and developed technology), mastheads and goodwill consisted of the following: December 31, Impairment Disposition Amortization September 30, (in thousands) 2017 Charges Adjustments Expense 2018 Intangible assets subject to amortization $ 839,284 $ — $ (785) $ — $ 838,499 Accumulated amortization (761,013) — 785 (35,858) (796,086) 78,271 — — (35,858) 42,413 Mastheads 149,951 (14,148) — — 135,803 Goodwill 705,174 — — — 705,174 Total $ 933,396 $ (14,148) $ — $ (35,858) $ 883,390 Amortization expense with respect to intangible assets is summarized below: Quarters Ended Nine Months Ended September 30, September 24, September 30, September 24, (in thousands) 2018 2017 2018 2017 Amortization expense $ 11,895 $ 12,092 $ 35,858 $ The estimated amortization expense for the remainder of fiscal year 2018 and the five succeeding fiscal years is as follows: Amortization Expense Year (in thousands) 2018 (Remainder) $ 11,802 2019 24,154 2020 803 2021 680 2022 655 2023 667 |
INVESTMENTS IN UNCONSOLIDATED C
INVESTMENTS IN UNCONSOLIDATED COMPANIES | 9 Months Ended |
Sep. 30, 2018 | |
INVESTMENTS IN UNCONSOLIDATED COMPANIES | |
INVESTMENTS IN UNCONSOLIDATED COMPANIES | 4. INVESTMENTS IN UNCONSOLIDATED COMPANIES CareerBuilder, LLC On September 13, 2018, we sold our remaining 3.0% ownership interest in CareerBuilder, LLC (“CareerBuilder”) and received gross proceeds of $5.3 million. As a result of this sale, we recognized a gain on sale of investments in unconsolidated companies of $1.7 million in the quarter and nine months ended September 30, 2018. In the nine months ended September 30, 2018, we also received distributions totaling approximately $2.8 million from CareerBuilder, which relate to returns of earnings. Our 3.0% ownership interest in CareerBuilder was accounted for under the cost method (measurement alternative under ASU 2016-01). On July 31, 2017, we along with the then-existing ownership group of CareerBuilder sold a majority of the collective ownership interest in CareerBuilder to an investor group. Our ownership interest in CareerBuilder was reduced to approximately 3.0% from 15.0%. 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 announcing the sale prior to closing, we recorded $168.6 million in pre-tax impairment charges on our equity investment in CareerBuilder during the nine months ended September 24, 2017. Other During the quarter and nine months ended September 24, 2017, excluding the CareerBuilder impairments noted above, we wrote-down $1.9 million and $2.4 million, respectively, of certain other unconsolidated investments. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2018 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 5. LONG-TERM DEBT Our long-term debt consisted of the following: Face Value at Carrying Value September 30, September 30, December 31, (in thousands) 2018 2018 2017 ABL Credit Agreement $ — $ — $ — Notes: 9.000% senior secured notes due in 2022 — — 433,819 9.000% senior secured notes due in 2026 310,000 290,054 — 7.795% tranche A junior term loan due in 2030 157,083 122,490 — 6.875% tranche B junior term loan due in 2031 193,466 140,422 — 7.150% debentures due in 2027 7,105 6,816 85,262 6.875% debentures due in 2029 82,764 78,869 262,311 Long-term debt $ 750,418 $ 638,651 $ 781,392 Less current portion — — 74,140 Total long-term debt, net of current $ 750,418 $ 638,651 $ 707,252 Our outstanding notes are stated net of unamortized debt issuance costs, and unamortized discounts, if applicable, totaling $111.8 million and $23.7 million as of September 30, 2018, and December 31, 2017, respectively. Debt Redemptions, Repurchases and Extinguishment of Debt During the first nine months of 2018 and 2017, we redeemed or repurchased our outstanding debt as follows: Nine Months Ended September 30, September 24, 2018 2017 (in thousands) Face Value Face Value 9.000% senior secured notes due in 2022 $ 439,630 $ 51,685 5.750% notes due in 2017 — 16,865 Total notes matured, repurchased or redeemed $ 439,630 $ 68,550 During the quarter and nine months ended September 30, 2018, we recorded a net gain on the extinguishment of debt of $36.3 million and $30.9 million, respectively, as a result of all of the following transactions that occured in 2018, as described below. During the quarter ended September 30, 2018, in conjunction with the refinancing discussed below, we redeemed $344.1 million of our 9.000% senior secured notes due in 2022 (“2022 Notes”). We also executed a non-cash exchange of most of our 7.150% debentures due November 1, 2027 (“2027 Debentures”) and 6.875% debentures due March 15, 2029 (“2029 Debentures” and together with the 2027 Debentures, “Debentures”) for new Tranche A and Tranche B Junior Term Loans (as defined below). The non-cash exchange of the Debentures discussed above was executed with a single lender and its affiliates. We reviewed all of our debt instruments held by this lender prior to and after the refinancing and determined that the new debt instruments were substantially different from the previously held instruments. We concluded that the exchange of the Debentures for the Junior Term Loans should be accounted for as an extinguishment of the Debentures. As a result, during the quarter and nine months ended September 30, 2018, we recorded a gross gain of $68.7 million, which represents the difference between the carrying value of the Debentures and the fair market value of the Junior Term Loans at time of the exchange. This gain was partially offset by $32.3 million, which represents the write-off of the unamortized discounts on the Debentures, unamortized debt issuance costs on the 2022 Notes, and premiums paid on the 2022 Notes. The net gain on extinguishment of debt recorded on the above transactions was partially offset by a loss on extinguishment of debt recorded in conjunction with our notes redemptions and repurchases during the first six months of 2018. During the first six months of 2018, we (i) redeemed $0.5 million of our 2022 Notes through a tender offer that expired on May 22, 2018, (ii) redeemed $75.0 million of our 2022 Notes, which we had previously announced in December 2017, and (iii) repurchased $20.0 million of the 2022 Notes through a privately negotiated transaction. We recorded any applicable premiums that were paid and wrote off the associated debt issuance costs on the above transactions. During the quarter and nine months ended September 24, 2017, we recorded a loss on the extinguishment of debt of $1.8 million and $2.7 million, respectively, as a result of the following transactions. During the quarter and nine months ended September 24, 2017, we (i) retired $16.9 million of debt that matured on September 1, 2017; (ii) repurchased a total $35.0 million and $50.0 million, respectively, of our 2022 Notes through privately negotiated transactions; and (iii) redeemed $1.7 million of the 2022 Notes through a tender offer we announced on August 1, 2017, in connection with the sale of a majority of our interest in CareerBuilder as required under the indenture for the 2022 Notes. The notes that matured and the notes that were redeemed as a result of our offer to purchase, were transacted at the principal amount plus accrued and unpaid interest. The 2022 Notes that we repurchased through privately negotiated transactions were repurchased at a premium, and we wrote off the associated debt issuance costs. Debt Refinancing in July 2018 On July 16, 2018, we entered into an Indenture (“2026 Notes Indenture”), among the Company, guarantor subsidiaries of the Company and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent (“2026 Notes Trustee”), pursuant to which we issued $310.0 million aggregate principal amount of 9.000% Senior Secured Notes due 2026 (“2026 Notes”) as described more fully under the section “ 2026 Senior Secured Notes and Indenture ” below. In connection with the issuance of the 2026 Notes and other junior debt instruments described below, we completed a refinancing of all of our 2022 Notes and substantially all of our Debentures, and our revolving credit facilities. On July 16, 2018, we deposited sufficient funds with The Bank of New York Mellon Trust Company, N.A., as trustee (“2022 Notes Trustee”), to pay the redemption price payable for all outstanding 2022 Notes, plus accrued and unpaid interest due on the 2022 Notes to, but excluding, the redemption date. The 2022 Notes were issued under an Indenture, dated as of December 18, 2012, among the Company, guarantor subsidiaries of the Company and the 2022 Notes Trustee (“2022 Notes Indenture”). As a result of this refinancing, we satisfied and discharged our obligations (subject to certain exceptions) under the 2022 Notes Indenture and the related security documents in accordance with the satisfaction and discharge provisions of the 2022 Notes Indenture. Upon the satisfaction and discharge of the 2022 Notes Indenture on July 16, 2018, all of the liens on the collateral securing the 2022 Notes were released, and we and the guarantors were discharged from our respective obligations under the 2022 Notes and the guarantees thereof. On July 16, 2018, the 2022 Notes Trustee, at our direction, delivered a notice of redemption to holders of all $344.1 million in aggregate principal amount of outstanding 2022 Notes. The redemption to the holders was completed on August 15, 2018. ABL Credit Agreement On July 16, 2018, we entered into a credit agreement, among the Company, the subsidiaries of the Company party thereto, as borrowers, the lenders party thereto, and Wells Fargo Bank, N.A. (“Wells Fargo”), as administrative agent (“ABL Credit Agreement”). The ABL Credit Agreement provides for up to $65.0 million secured asset-backed revolving credit facility with a letter of credit subfacility and a swing line subfacility. In addition, the ABL Credit Agreement provides for a $35.0 million cash secured letter of credit facility (“LOC Facility”). The commitments under the ABL Credit Agreement expire July 16, 2023. Our obligations under the ABL Credit Agreement are guaranteed by us and by certain of our subsidiaries meeting materiality thresholds set forth in the ABL Credit Agreement as described below. The proceeds of the loans under the ABL Credit Agreement may be used for working capital and general corporate purposes. We have the right to prepay loans under the ABL Credit Agreement in whole or in part at any time without penalty. Subject to availability under the Borrowing Base, amounts repaid may be reborrowed. As of September 30, 2018, under the ABL Credit Agreement we had $44.9 million of available credit. The Borrowing Base is recalculated monthly and is subject to seasonality of advertising sales around year-end holiday periods (and resulting growth in advertising accounts receivable balances). As of September 30, 2018, we had a $3.0 million standby letter of credit secured under the LOC Facility. Also, see discussion of our Issuance and Reimbursement Agreement (“LC Agreement”) with Bank of America, N.A., below for additional standby letters of credit outstanding. Loans under the ABL Credit Agreement bear interest, at our option, at either a rate based on the London Interbank Offered Rate (“LIBOR”) for the applicable interest period or a base rate, in each case plus a margin. The base rate is the highest of Wells Fargo’s publicly announced prime rate, the federal funds rate plus 0.50% and one-month LIBOR plus 1.0%. The margin ranges from 1.75% to 2.25% for LIBOR loans and 0.75% to 1.25% for base rate loans and is determined based on average excess availability. Interest on the loans is payable quarterly in arrears with respect to base rate loans and at the end of an interest period (and at three month intervals if the interest period exceeds three months) in the case of LIBOR loans. The ABL Credit Agreement requires us, at any time the availability under our revolving credit facility falls below the greater of 12.5% of the total facility size or approximately $8.1 million, to maintain a minimum fixed charge coverage ratio of 1.10 to 1.00 until such time as the availability under our revolving credit facility exceeds such threshold for 30 consecutive days. The ABL Credit Agreement contains customary affirmative covenants, including covenants regarding the payment of taxes and other obligations, maintenance of insurance, reporting requirements and compliance with applicable laws and regulations. Further, the ABL Credit Agreement contains customary negative covenants limiting our ability and the ability of our subsidiaries, among other things, to incur debt, grant liens, make investments, make certain restricted payments and sell assets, subject to certain exceptions. Upon the occurrence and during the continuance of an event of default, the lenders may declare all outstanding principal and accrued and unpaid interest under the ABL Credit Agreement immediately due and payable and may exercise the other rights and remedies provided for under the ABL Credit Agreement and related loan documents. The events of default under the ABL Credit Agreement include, subject to grace periods in certain instances, payment defaults, cross defaults with certain other indebtedness, breaches of covenants or representations and warranties, change in control of us and certain bankruptcy and insolvency events with respect to us and our subsidiaries meeting a materiality threshold set forth in the ABL Credit Agreement. In connection with entering into the ABL Credit Agreement and the refinancing of our 2022 Notes as described above, we terminated our Third Amended and Restated Credit Agreement, which had a maturity date of December 18, 2019 and had no borrowings outstanding as of July 16, 2018, the date of termination. Separately we are party to the LC Agreement, under which we may request letters of credit be issued on our behalf in an aggregate face amount not to exceed $35.0 million. We had standby letters of credit totaling $26.7 million outstanding under the LC Agreement as of September 30, 2018. We are required to provide cash collateral equal to 101% of the aggregate undrawn stated amount of each outstanding letter of credit. We expect that this LC Agreement will remain in place as we transition our letters of credit to the ABL Credit Agreement. As of October 12, 2018, we have transferred all but $1.0 million of our outstanding letters of credit to our LOC Facility. Cash collateral associated with the LOC Facility and the LC Agreement are classified in our condensed consolidated balance sheets in other assets. 2026 Senior Secured Notes and Indenture As discussed above, on July 16, 2018, we entered into the 2026 Notes Indenture and issued $310.0 million aggregate principal amount of the 2026 Notes in a private placement to qualified institutional buyers in the United States in reliance on Rule 144A under the Securities Act of 1933, as amended (“Securities Act”), and outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act. The 2026 Notes mature on July 15, 2026, and bear interest at a rate of 9.000% per annum. Interest on the 2026 Notes is payable semi-annually on January 15 and July 15 of each year, commencing on January 15, 2019. We may redeem the 2026 Notes, in whole or in part, at any time on or after July 15, 2022, at specified redemption prices and may also redeem up to 40% of the aggregate principal amount of the 2026 Notes using the proceeds of certain equity offerings completed before July 15, 2021, at specified redemption prices, in each case, as set forth in the 2026 Notes Indenture. Prior to July 15, 2022, we may also redeem some or all of the 2026 Notes at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, up to, but excluding, the redemption date and a “make-whole” premium. We are required to redeem the 2026 Notes from the net cash proceeds of certain asset dispositions and from a portion of our excess cash flow (as defined in the 2026 Notes Indenture). If we experience specified changes of control triggering events, we must offer to repurchase the 2026 Notes at a repurchase price equal to 101% of the principal amount of the 2026 Notes repurchased, plus accrued and unpaid interest, if any, to, but excluding the applicable repurchase date. The 2026 Notes Indenture contains covenants that, among other things, restrict our ability and our restricted subsidiaries to: · incur certain additional indebtedness and issue preferred stock; · make certain distributions, investments and other restricted payments; · sell assets; · agree to any restrictions on the ability of restricted subsidiaries to make payments to us; · create liens; · merge, consolidate or sell substantially all of our assets, taken as a whole; and · enter into certain transactions with affiliates. These covenants are subject to a number of other limitations and exceptions set forth in the 2026 Notes Indenture. The 2026 Notes Indenture provides for customary events of default, including, but not limited to, failure to pay principal and interest, failure to comply with covenants, agreements, or conditions, and certain events of bankruptcy or insolvency involving us and our significant subsidiaries. In the case of an event of default arising from specified events of bankruptcy or insolvency, all outstanding 2026 Notes under the 2026 Notes Indenture will become due and payable immediately without further action or notice. If any other event of default under the 2026 Notes Indenture occurs or is continuing, the 2026 Notes Trustee or holders of at least 25% in aggregate principal amount of the then outstanding 2026 Notes under the 2026 Notes Indenture may declare all of such 2026 Notes to be due and payable immediately. Fifth Supplemental Indenture On July 13, 2018, in connection with our outstanding Debentures, we entered into a Fifth Supplemental Indenture (“Supplemental Indenture”) with The Bank of New York Mellon Trust Company, N.A., as trustee (“Debentures Trustee”), supplementing the original Indenture which proceeded the issuance of the Debentures in 1997. The Supplemental Indenture was entered into in connection with our refinancing of existing indebtedness to amend the Debentures Indenture to eliminate certain restrictive covenants. Junior Lien Term Loan Agreement On July 16, 2018, we entered into a Junior Lien Term Loan Credit Agreement, among the Company, the guarantors party thereto, the lenders party thereto and The Bank of New York Mellon, as administrative agent and collateral agent (“Junior Term Loan Agreement”). The Junior Term Loan Agreement provides for a $157.1 million secured term loan (“Tranche A Junior Term Loans”) and a $193.5 million term loan (“Tranche B Junior Term Loans” and together with the Tranche A Junior Term Loans, “Junior Term Loans”). The Tranche A Junior Term Loans mature on July 15, 2030 and the Tranche B Junior Term Loans mature on July 15, 2031. Our obligations under the Junior Term Loan Agreement are guaranteed by our subsidiaries that guarantee the 2026 Notes. Under the terms of the Junior Term Loan Agreement, affiliates of Chatham Asset Management, LLC may elect to convert up to $75.0 million in aggregate principal amount of 2029 Debentures owned by them into an equal principal amount of Tranche B Junior Term Loans or notes with terms substantially similar to the Tranche B Junior Term Loans upon written notice to us. The $82.1 million in aggregate principal amount of 2027 Debentures and $193.5 million in aggregate principal amount of 2029 Debentures were exchanged for the Junior Term Loans. The cash proceeds from the exchange were used to redeem a portion of the 2022 Notes, and to pay fees, costs, and expenses in connection with our debt refinancing. As discussed above, we determined that the instruments held by the single lender, when combined, had substantially different cash flows from one another and therefore we accounted for the exchange as a debt extinguishment. We have the right to prepay loans under the Junior Term Loan Agreement, in whole or in part, at any time, at (i) specified prices that decline over time, plus accrued and unpaid interest, if any, in the case of Tranche A Junior Term Loans, and (ii) a price equal to 100% of the principal amount thereof, plus a “make-whole” premium and accrued and unpaid interest, if any, in the case of the Tranche B Junior Term Loans. Amounts prepaid may not be reborrowed. Tranche A Junior Term Loans bear interest at a rate per annum equal to 7.795% and Tranche B Junior Term Loans bear interest at a rate per annum equal to 6.875%. Interest on the loans is payable semi-annually in arrears on January 15 and July 15 of each year, commencing on January 15, 2019. The Junior Term Loan Agreement contains customary affirmative covenants, including covenants regarding the payment of taxes and other obligations, maintenance of insurance, reporting requirements and compliance with applicable laws and regulations. Further, the Junior Term Loan Agreement contains customary negative covenants limiting the ability of us and our subsidiaries, among other things, to incur debt, grant liens, make investments, make certain restricted payments and sell assets, subject to certain exceptions. Upon the occurrence and during the continuance of an event of default, the lenders may declare all outstanding principal and accrued and unpaid interest under the Junior Term Loan Agreement immediately due and payable and may exercise the other rights and remedies provided for under the Junior Term Loan Agreement and related loan documents. In general, the affirmative and negative covenants of the Junior Term Loan Agreement are substantially the same as the covenants in the 2026 Notes Indenture. Other Debt After giving effect to the Junior Term Loan Agreement, we have $7.1 million aggregate principal amount of 2027 Debentures and $82.8 million aggregate principal amount of 2029 Debentures outstanding as of September 30, 2018. |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 9 Months Ended |
Sep. 30, 2018 | |
EMPLOYEE BENEFITS | |
EMPLOYEE BENEFITS | 6. EMPLOYEE BENEFITS Pension Plan We maintain a qualified defined benefit pension plan (“Pension Plan”), which covers eligible current and former employees and has been frozen since March 31, 2009. No new participants may enter the Pension Plan and no further benefits will accrue. However, years of service continue to count toward early retirement calculations and vesting of benefits previously earned. We also have a limited number of supplemental retirement plans to provide certain key current and former employees with additional retirement benefits. These plans are funded on a pay-as-you-go basis and the accrued pension obligation is largely included in other long-term obligations. The elements of retirement benefit expense are as follows: Quarters Ended Nine Months Ended September 30, September 24, September 30, September 24, (in thousands) 2018 2017 2018 2017 Pension plans: Interest Cost $ 19,788 $ 21,367 $ 59,365 $ 64,101 Expected return on plan assets (22,624) (22,392) (67,872) (67,177) Actuarial loss 6,295 5,084 18,886 15,252 Net pension expense 3,459 4,059 10,379 12,176 Net post-retirement benefit credit (681) (731) (2,044) (2,193) Net retirement benefit expenses $ 2,778 $ 3,328 $ 8,335 $ 9,983 In May 2018, the Pension Plan sold the Lexington real property for approximately $4.1 million and we terminated our lease on the property. The property was included in the real property contributions that we made to the Pension Plan in fiscal year 2011. As a result of the sale by the Pension Plan, we recognized a $0.2 million loss on the sale of the Lexington property in other operating expenses on the condensed consolidated statement of operations in the nine months ended September 30, 2018. 401(k) Plan We have a deferred compensation plan (“401(k) plan”), which enables eligible employees to 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. Our matching contributions in the quarter and nine months ended September 30, 2018, were $0.6 million and $1.9 million, respectively, and are recorded in our compensation line item of our condensed consolidated statement of operations. Also during the fourth quarter of 2017, we terminated the 401(k) plan supplemental contribution that was tied to our financial performance. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES In December 2008, carriers of The Fresno Bee filed a class action lawsuit against us and The Fresno Bee in the Superior Court of the State of California in Fresno County captioned Becerra v. The McClatchy Company (“Fresno case”) alleging that the carriers were misclassified as independent contractors and seeking mileage reimbursement. In February 2009, a substantially similar lawsuit, Sawin v. The McClatchy Company , involving similar allegations was filed by carriers of The Sacramento Bee (“Sacramento case”) in the Superior Court of the State of California in Sacramento County. The class consists of roughly 5,000 carriers in the Sacramento case and 3,500 carriers in the Fresno case. The plaintiffs in both cases are seeking unspecified restitution for mileage reimbursement. With respect to the Sacramento case, in September 2013, all wage and hour claims were dismissed and the only remaining claim is an equitable claim for mileage reimbursement under the California Civil Code. In the Fresno case, in March 2014, all wage and hour claims were dismissed and the only remaining claim is an equitable claim for mileage reimbursement under the California Civil Code. The court in the Sacramento case trifurcated the trial into three separate phases, independent contractor status, liability and restitution. On September 22, 2014, the court in the Sacramento case issued a tentative decision following the first phase, finding that the carriers that contracted directly with The Sacramento Bee during the period from February 2005 to July 2009 were misclassified as independent contractors. We objected to the tentative decision but the court ultimately adopted it as final. In June 2016, we were 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. The third phase has been scheduled to begin on March 25, 2019. 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 and the case is currently on appeal. We continue to defend these actions vigorously and expect that we ultimately will prevail. As a result, we have not established a reserve in connection with the cases. While we believe that a material impact on our condensed consolidated financial position, results of operations or cash flows from these claims is unlikely, given the inherent uncertainty of litigation, a possibility exists that future adverse rulings or unfavorable developments could result in future charges that could have a material impact. We have and will continue to periodically reexamine our estimates of probable liabilities and any associated expenses and make appropriate adjustments to such estimates based on experience and developments in litigation. Other than the cases described above, we are subject to a variety of legal proceedings (including libel, employment, wage and hour, independent contractor and other legal actions) and governmental proceedings (including environmental matters) that arise from time to time in the ordinary course of our business. We are unable to estimate the amount or range of reasonably possible losses for these matters. However, we currently believe, after reviewing such actions with counsel, that the expected outcome of pending actions will not have a material effect on our condensed consolidated financial statements. No material amounts for any losses from litigation that may ultimately occur have been recorded in the condensed consolidated financial statements as we believe that any such losses are not probable. We have certain indemnification obligations related to the sale of assets including but not limited to insurance claims and multi-employer pension plans of disposed newspaper operations. We believe the remaining obligations related to disposed assets will not be material to our financial position, results of operations or cash flows. As of September 30, 2018, we had $26.7 million of standby letters of credit secured under the LC Agreement and we had a $3.0 million standby letter of credit secured under the LOC Facility. |
STOCK PLANS
STOCK PLANS | 9 Months Ended |
Sep. 30, 2018 | |
STOCK PLANS | |
STOCK PLANS | 8. STOCK PLANS Stock Plans Activity The following table summarizes the restricted stock units (“RSUs”) activity during the nine months ended September 30, 2018: Weighted Average Grant Date Fair RSUs Value Nonvested — December 31, 2017 245,794 $ 11.55 Granted 268,080 $ 8.95 Vested (164,442) $ 11.41 Forfeited (4,530) $ 10.75 Nonvested — September 30, 2018 344,902 $ 9.60 The total fair value of the RSUs that vested during the nine months ended September 30, 2018, was $1.5 million. The following table summarizes the stock appreciation rights (“SARs”) activity during the nine months ended September 30, 2018: Weighted Aggregate Average Intrinsic Value SARs Exercise Price (in thousands) Outstanding December 31, 2017 156,175 $ 32.12 $ — Expired (31,225) $ 36.87 Outstanding September 30, 2018 124,950 $ 30.93 $ — Stock-Based Compensation All stock-based payments, including grants of stock appreciation rights, restricted stock units and common stock under equity incentive plans, are recognized in the financial statements based on their grant date fair values. As of September 30, 2018, we had two stock-based compensation plans. Stock-based compensation expenses are reported in the compensation line item in the condensed consolidated statements of operations. Total stock-based compensation expense for the periods presented in this report, are as follows: Quarters Ended Nine Months Ended September 30, September 24, September 30, September 24, (in thousands) 2018 2017 2018 2017 Stock-based compensation expense $ 758 $ 325 $ 1,819 $ 1,786 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Business and Basis of Accounting | Business and Basis of Accounting The McClatchy Company (“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 Star , 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. Preparation of the financial statements in conformity with accounting principles generally accepted in the United States and pursuant to the rules and regulation of the Securities and Exchange Commission requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The condensed consolidated financial statements include the Company and our subsidiaries. Intercompany items and transactions are eliminated. In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, that are necessary to present fairly our financial position, results of operations, and cash flows for the interim periods presented. The financial statements contained in this report are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 (“Form 10-K”). Each of the fiscal periods included herein comprise 13 weeks for the third-quarter periods and 39 weeks for the nine-month periods. |
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. During the quarter ended September 30, 2018, as a result of the refinancing transactions discussed in Note 5, we transferred our Debentures (as defined in Note 5) from Level 2 to Level 3 in the fair value hierarchy. The following methods and assumptions were used to estimate the fair value of each class of financial instruments: Cash and cash equivalents, accounts receivable and accounts payable. As of September 30, 2018, and December 31, 2017, the carrying amount of these items approximates fair value because of the short maturity of these financial instruments. Long-term debt. At September 30, 2018 the carrying value and the estimated fair value of our 2026 Notes (as defined in Note 5) was $290.0 million and $314.3 million, respectively. As of December 31, 2017, the carrying value and the estimated fair value of the long-term debt, including the current portion of long-term debt, was $781.4 million and $810.7 million, respectively. The fair value of our long-term debt is described above was determined using quoted market prices, including the current market activity of our publicly-traded notes and bank debt, trends in investor demand for debt and market values of comparable publicly-traded debt. These are considered to be Level 2 inputs under the fair value measurements and disclosure guidance and may not be representative of actual value. At September 30, 2018, the carrying value and the estimated fair value of our Debentures and Junior Term Loans (as defined in Note 5), was $348.6 million and $328.7 million, respectively. The fair values of our Debentures and Junior Term loans were estimated based on available market evidence, including quoted market prices for the same or similar instruments. If market evidence was not available or reliable, the fair value was based on the net present value of the future cash flows using interest rates derived from market inputs and a Treasury yield curve in effect at September 30, 2018. These are considered to be Level 3 inputs under the fair value measurements and disclosure guidance and may not be representative of actual value. Certain assets are measured at fair value on a nonrecurring basis; that is, they are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Our non-financial assets that may be measured at fair value on a nonrecurring basis are assets held for sale, goodwill, intangible assets not subject to amortization and cost or 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 the expected cash flows and the discount rates that we estimate market participants would seek for bearing the risk associated with such assets. |
Newsprint, ink and other inventories | Newsprint, ink and other inventories Newsprint, ink and other inventories are stated at the lower of cost (based principally on the first‑in, first‑out method) and net realizable value. During the nine months ended September 24, 2017, we recorded a $2.0 million write‑down of non-newsprint inventory, which is reflected in the other asset write-downs line on our condensed consolidated statement of operations. There were no similar write-downs of newsprint, ink or other inventories during the nine months ended September 30, 2018. |
Property, Plant and Equipment | Property, Plant and Equipment Depreciation expense with respect to property, plant and equipment is summarized below: Quarters Ended Nine Months Ended September 30, September 24, September 30, September 24, (in thousands) 2018 2017 2018 2017 Depreciation expense $ 7,146 $ 7,496 $ 21,638 $ 22,748 |
Assets Held For Sale | Assets Held for Sale During the nine months ended September 30, 2018, we began to actively market for sale the land and buildings at two of our media companies. In connection with classifying these assets as assets held for sale, the carrying value of the land and building at one of the properties was reduced to its estimated fair value less selling costs, as determined based on the current market conditions and the estimated selling price. As a result, an impairment charge of $0.1 million was recorded during the nine months ended September 30, 2018, and is included in other asset write-downs on our condensed consolidated statement of operations. The land and building at this property were sold during the quarter ended July 1, 2018, with no gain or additional loss. The assets at the second property remain classified as assets held for sale. |
Intangible Assets and Goodwill | Intangible Assets and Goodwill We test for impairment of goodwill annually at year‑end, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The required approach uses accounting judgments and estimates of future operating results. Changes in estimates or the application of alternative assumptions could produce significantly different results. Impairment testing is done at a reporting unit level. We perform this testing on our 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 future revenue, newsprint prices, compensation levels, discount rate, hypothetical transaction structures, and for the market based approach, private and public market trading multiples for newspaper assets. We consider current market capitalization, based upon the recent stock market prices plus an estimated control premium, in determining the reasonableness of the aggregate fair value of the reporting units. We had no impairment of goodwill during the quarters and nine months ended September 30, 2018, or September 24, 2017. 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 the 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 30, 2018, due to the continuing challenging business conditions in certain markets as of the end of the third quarter of 2018. We also 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 the third quarter of 2017. Individual newspaper mastheads were estimated using the present value of expected future cash flows, using estimates, judgments and assumptions discussed above that we believe were appropriate in the circumstances. As a result of these interim tests, we recorded intangible newspaper masthead impairment charge of $14.1 million in the quarter and nine months ended September 30, 2018, and $8.7 million in the quarter and nine months ended September 24, 2017. Both of which are recorded in other asset write-downs on our condensed consolidated statements of operations. 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 the quarters and nine months ended September 30, 2018, or September 24, 2017. |
Financial Obligations | Financing Obligations Financing obligations consist of contributions of real properties to the Pension Plan in 2016 and 2011, real property previously owned by The Sacramento Bee in Sacramento, California that was sold and leased back during the third quarter of 2017, and real property previously owned by The State in Columbia, South Carolina that we sold and leased back during the second quarter of 2018. Our long-term financing obligations increased by approximately $14.6 million during the first nine months of 2018 with the sale and leaseback of the Columbia real property. |
Segment Reporting | Segment Reporting 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 operations in the Carolinas and East. |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Our accumulated other comprehensive loss (“AOCL”) and reclassifications from AOCL, net of tax, consisted of the following: Other Minimum Comprehensive Pension and Loss Post- Related to Retirement Equity (in thousands) Liability Investments Total Balance at December 31, 2017 $ (442,406) $ (6,963) $ (449,369) Amounts reclassified from AOCL 16,649 — 16,649 Other comprehensive income 16,649 — 16,649 Balance at September 30, 2018 $ (425,757) $ (6,963) $ (432,720) Amount Reclassified from AOCL Amount Reclassified from AOCL Quarters Ended Nine Months Ended (in thousands) September 30, September 24, September 30, September 24, Affected Line in the Condensed AOCL Component 2018 2017 2018 2017 Consolidated Statements of Operations Minimum pension and post-retirement liability $ 5,550 $ 7,712 $ 16,649 $ 12,853 Retirement benefit expense (1) _____________________ (1) There is no income tax benefit associated with the quarter and nine months ended September 30, 2018, or September 24, 2017, due to the recognition of a valuation allowance. |
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. We have concluded our evaluation of the tax implications of the Tax Act on our accounting, including the impact on state taxes, certain compensation arrangements and depreciation. There were no significant adjustments from our original conclusions as previously reported. A tax valuation allowance is required when it is more-likely-than-not that all or a portion of deferred tax assets may not be realized. The timing of recording or releasing a valuation allowance requires significant judgment. Establishment and removal of a valuation allowance requires us to consider all positive and negative evidence and to make a judgmental decision regarding the amount of valuation allowance required as of a reporting date. The assessment takes into account expectations of future taxable income or loss, available tax planning strategies and the reversal of temporary differences. The development of these expectations involves the use of estimates such as operating profitability. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. We performed our assessment of the deferred tax assets during the third and fourth quarters of 2017, weighing the positive and negative evidence as outlined in ASC 740-10, Income Taxes . As we have incurred three years of cumulative pre-tax losses, such objective negative evidence limits our ability to give significant weight to other positive subjective evidence, such as projections for future growth and profitability. As of December 31, 2017, our valuation allowance against a majority of our deferred tax assets was $109.7 million. For the quarter and nine months ended September 30, 2018, we recorded a valuation allowance benefit of $2.8 million and a charge of $21.6 million, respectively, which is recorded in income tax (benefit) expense on our condensed consolidated statements of operations. Our valuation allowance as of September 30, 2018, was $131.3 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 arises in the future that provides an indication that all of or a portion of the deferred tax assets meet the more likely than not standard, the valuation allowance may be reversed, in whole or in part, in the period that such determination is made. Current generally accepted accounting principles prescribe a recognition threshold and measurement of a tax position taken or expected to be taken in an enterprise’s tax returns. We recognize accrued interest related to unrecognized tax benefits in interest expense. Accrued penalties are recognized as a component of income tax expense. |
Earnings Per Share (EPS) | Earnings Per Share (EPS) Basic EPS excludes dilution from common stock equivalents and reflects income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is based upon the weighted average number of outstanding shares of common stock and dilutive common stock equivalents in the period. Common stock equivalents arise from dilutive stock appreciation rights and restricted stock units, and are computed using the treasury stock method. Anti-dilutive common stock equivalents are excluded from diluted EPS. The weighted average anti-dilutive common stock equivalents that could potentially dilute basic EPS in the future, but were not included in the weighted average share calculation, consisted of the following: Quarters Ended Nine Months Ended September 30, September 24, September 30, September 24, (shares in thousands) 2018 2017 2018 2017 Anti-dilutive common stock equivalents 127 336 199 385 |
Cash Flow Information | Cash Flow Information Reconciliation of cash, cash equivalents and restricted cash as reported in the condensed consolidated balance sheets to the total of the same such amounts shown above: September 30, December 31, (in thousands) 2018 2017 Cash and equivalents $ 4,492 $ 99,387 Restricted cash included in other assets (1) 31,937 31,967 Total cash, cash equivalents and restricted cash $ 36,429 $ 131,354 _____________________ (1) Restricted cash balances are certificates of deposits secured against letters of credit primarily related to contractual agreements with our workers’ compensation insurance carrier and one of our property leases. Cash paid for interest and income taxes and other non-cash activities consisted of the following: Nine Months Ended September 30, September 24, (in thousands) 2018 2017 Interest paid (net of amount capitalized) $ 42,910 $ 45,889 Income taxes paid (net of refunds) 12,865 9,988 Other non-cash investing and financing activities related to pension plan transactions: Reduction of financing obligation due to sale of real properties by pension plan (2,667) — Reduction of PP&E due to sale of real properties by pension plan (2,854) — During the third quarter of 2018, we completed a debt for debt exchange of a majority of the existing 2027 Debentures and 2029 Debentures for newly issued Tranche A Junior Term Loans and Tranche B Junior Term Loans. This transaction included a non-cash discount of $68.7 million recorded within the gain on extinguishment of debt. See Note 5 for definitions and further information. |
Recently Adopted and Issued Not Yet Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“Topic 606”), “ Revenue from Contracts with Customers. ” 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. Topic 606 requires 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 provided further guidance and clarification on specific items within the previously issued update. We adopted Topic 606 as of January 1, 2018, using the modified retrospective transition method. See Note 2 for further details. 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. We adopted ASU 2016-01 as of January 1, 2018, on a prospective basis, but it did not have an impact on our condensed consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “ Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ” ASU 2016-15 addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. We adopted ASU 2016-15 as of January 1, 2018, retrospectively, but it did not have an impact on our condensed consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, “ Statement of Cash Flows (Topic 230): Restricted Cash. ” ASU 2016-18 addresses the presentation of restricted cash in the statement of cash flows. The standard requires an entity to include restricted amounts with cash and cash equivalents in the statement of cash flows. An entity will no longer present transfers between cash and cash equivalents and restricted amounts on the statement of cash flows. We adopted ASU 2016-18 as of January 1, 2018, using the retrospective transition method to each period presented. As a result of the adoption, net cash provided by operating activities increased of $2.0 million to exclude the changes in restricted cash, resulting in the nine months ended September 24, 2017, on our condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, “ Leases ” (Accounting Standards Codification 842 (“ASC 842”)) and it replaces the existing guidance in ASC 840, “ Leases. ” ASC 842 requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets (“ROU”). For income statement purposes operating leases will result in straight-line expenses and capital leases will result in expenses similar to current financing leases. The new lease standard does not substantially change lessor accounting. The guidance also requires additional disclosures to enable users of financial statements to understand the amount, timing and uncertainty of cash flows arising from leases. In 2018, the FASB issued ASU No. 2018-01, ASU 2018-10, and ASU 2018-11 that provides further guidance and clarification on specific items within the previously issued update. ASC 842 is effective for us for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. We plan to adopt ASC 842 in our next fiscal year beginning December 31, 2018, using the modified retrospective approach and we intend to elect certain available practical expedients upon adoption. Our leases are made up of mostly real estate, vehicle and other equipment leases. As a result, we anticipate that ASC 842 will have a material impact on our condensed consolidated balance sheets due to the recognition of ROU assets and lease liabilities for operating leases. We expect our accounting for capital leases to remain substantially unchanged and do not expect that adoption will have a material impact on our condensed consolidated statements of operations. We are in the process of reviewing various lease agreements, implementing a lease management and accounting software, and identifying changes to internal controls and processes to appropriately account and disclose for the new standard. We have not yet quantified the standards impact on the condensed consolidated financial statements. We plan to finalize our determination of the impact by the end of the fourth quarter of 2018. 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 measurement of expected credit losses is to be based upon a broad set of information to include historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. It is effective for us for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted for interim or annual reporting periods beginning after December 15, 2018. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. In 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. 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 condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ” ASU 2018-02 adds, removes and modifies various disclosure requirements within Topic 820. It is effective for us for interim and annual reporting periods beginning after December 15, 2019. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this guidance and delay adoption of the additional disclosures until their effective date. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-14, “ Compensation-Retirement Benefits-Defined Benefit Plan-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans. ” ASU 2018-14 adds, removes or clarifies various disclosure requirements within guidance. It is effective for us for annual reporting periods beginning after December 15, 2020, and early adoption is permitted. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, “ Intangibles-Goodwill and Other-Internal -Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ” ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). It is effective for us for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of components of property, plant and equipment | Quarters Ended Nine Months Ended September 30, September 24, September 30, September 24, (in thousands) 2018 2017 2018 2017 Depreciation expense $ 7,146 $ 7,496 $ 21,638 $ 22,748 |
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 31, 2017 $ (442,406) $ (6,963) $ (449,369) Amounts reclassified from AOCL 16,649 — 16,649 Other comprehensive income 16,649 — 16,649 Balance at September 30, 2018 $ (425,757) $ (6,963) $ (432,720) |
Schedule of reclassification out of accumulated other comprehensive income | Amount Reclassified from AOCL Amount Reclassified from AOCL Quarters Ended Nine Months Ended (in thousands) September 30, September 24, September 30, September 24, Affected Line in the Condensed AOCL Component 2018 2017 2018 2017 Consolidated Statements of Operations Minimum pension and post-retirement liability $ 5,550 $ 7,712 $ 16,649 $ 12,853 Retirement benefit expense (1) _____________________ (1) There is no income tax benefit associated with the quarter and nine months ended September 30, 2018, or September 24, 2017, due to the recognition of a valuation allowance. |
Summary of anti-dilutive stock options | Quarters Ended Nine Months Ended September 30, September 24, September 30, September 24, (shares in thousands) 2018 2017 2018 2017 Anti-dilutive common stock equivalents 127 336 199 385 |
Reconciliation of cash, cash equivalents and restricted cash | Reconciliation of cash, cash equivalents and restricted cash as reported in the condensed consolidated balance sheets to the total of the same such amounts shown above: September 30, December 31, (in thousands) 2018 2017 Cash and equivalents $ 4,492 $ 99,387 Restricted cash included in other assets (1) 31,937 31,967 Total cash, cash equivalents and restricted cash $ 36,429 $ 131,354 _____________________ (1) Restricted cash balances are certificates of deposits secured against letters of credit primarily related to contractual agreements with our workers’ compensation insurance carrier and one of our property leases. |
Schedule of cash paid for interest and income taxes and other non-cash activities | Nine Months Ended September 30, September 24, (in thousands) 2018 2017 Interest paid (net of amount capitalized) $ 42,910 $ 45,889 Income taxes paid (net of refunds) 12,865 9,988 Other non-cash investing and financing activities related to pension plan transactions: Reduction of financing obligation due to sale of real properties by pension plan (2,667) — Reduction of PP&E due to sale of real properties by pension plan (2,854) — |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
INTANGIBLE ASSETS AND GOODWILL | |
Schedule of intangible assets and goodwill | December 31, Impairment Disposition Amortization September 30, (in thousands) 2017 Charges Adjustments Expense 2018 Intangible assets subject to amortization $ 839,284 $ — $ (785) $ — $ 838,499 Accumulated amortization (761,013) — 785 (35,858) (796,086) 78,271 — — (35,858) 42,413 Mastheads 149,951 (14,148) — — 135,803 Goodwill 705,174 — — — 705,174 Total $ 933,396 $ (14,148) $ — $ (35,858) $ 883,390 |
Summary of amortization expense with respect to intangible assets | Quarters Ended Nine Months Ended September 30, September 24, September 30, September 24, (in thousands) 2018 2017 2018 2017 Amortization expense $ 11,895 $ 12,092 $ 35,858 $ |
Amortization expense for the five succeeding fiscal years | The estimated amortization expense for the remainder of fiscal year 2018 and the five succeeding fiscal years is as follows: Amortization Expense Year (in thousands) 2018 (Remainder) $ 11,802 2019 24,154 2020 803 2021 680 2022 655 2023 667 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
LONG-TERM DEBT | |
Summary of company's long-term debt | Face Value at Carrying Value September 30, September 30, December 31, (in thousands) 2018 2018 2017 ABL Credit Agreement $ — $ — $ — Notes: 9.000% senior secured notes due in 2022 — — 433,819 9.000% senior secured notes due in 2026 310,000 290,054 — 7.795% tranche A junior term loan due in 2030 157,083 122,490 — 6.875% tranche B junior term loan due in 2031 193,466 140,422 — 7.150% debentures due in 2027 7,105 6,816 85,262 6.875% debentures due in 2029 82,764 78,869 262,311 Long-term debt $ 750,418 $ 638,651 $ 781,392 Less current portion — — 74,140 Total long-term debt, net of current $ 750,418 $ 638,651 $ 707,252 |
Summary of reduction of outstanding debt | Nine Months Ended September 30, September 24, 2018 2017 (in thousands) Face Value Face Value 9.000% senior secured notes due in 2022 $ 439,630 $ 51,685 5.750% notes due in 2017 — 16,865 Total notes matured, repurchased or redeemed $ 439,630 $ 68,550 |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
EMPLOYEE BENEFITS | |
Schedule of elements of retirement expense | Quarters Ended Nine Months Ended September 30, September 24, September 30, September 24, (in thousands) 2018 2017 2018 2017 Pension plans: Interest Cost $ 19,788 $ 21,367 $ 59,365 $ 64,101 Expected return on plan assets (22,624) (22,392) (67,872) (67,177) Actuarial loss 6,295 5,084 18,886 15,252 Net pension expense 3,459 4,059 10,379 12,176 Net post-retirement benefit credit (681) (731) (2,044) (2,193) Net retirement benefit expenses $ 2,778 $ 3,328 $ 8,335 $ 9,983 |
STOCK PLANS (Tables)
STOCK PLANS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
STOCK PLANS | |
Summary of the restricted stock units ("RSUs") activity | Weighted Average Grant Date Fair RSUs Value Nonvested — December 31, 2017 245,794 $ 11.55 Granted 268,080 $ 8.95 Vested (164,442) $ 11.41 Forfeited (4,530) $ 10.75 Nonvested — September 30, 2018 344,902 $ 9.60 |
Summary of the stock appreciation rights ("SARs") activity | The following table summarizes the stock appreciation rights (“SARs”) activity during the nine months ended September 30, 2018: Weighted Aggregate Average Intrinsic Value SARs Exercise Price (in thousands) Outstanding December 31, 2017 156,175 $ 32.12 $ — Expired (31,225) $ 36.87 Outstanding September 30, 2018 124,950 $ 30.93 $ — |
Summary of stock-based compensation expense | Quarters Ended Nine Months Ended September 30, September 24, September 30, September 24, (in thousands) 2018 2017 2018 2017 Stock-based compensation expense $ 758 $ 325 $ 1,819 $ 1,786 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018USD ($)companyitem | Sep. 30, 2018USD ($)companyitem | Dec. 31, 2017USD ($) | |
Investments in Unconsolidated Companies Activity | |||
Number of media companies | company | 30 | 30 | |
Number of states | item | 14 | 14 | |
Length of fiscal quarter | 91 days | 273 days | |
Long-term debt fair value disclosure | |||
Estimated fair value of long-term debt | $ 810,700 | ||
Long-term debt | $ 638,651 | $ 638,651 | $ 781,392 |
9.00% senior secured notes due in 2026 | |||
Long-term debt fair value disclosure | |||
Estimated fair value of long-term debt | 314,300 | 314,300 | |
Long-term debt | 290,054 | 290,054 | |
Debentures and Junior Term Loans | |||
Long-term debt fair value disclosure | |||
Estimated fair value of long-term debt | 328,700 | 328,700 | |
Long-term debt | $ 348,600 | $ 348,600 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - PP&E, Intangibles (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Jul. 01, 2018USD ($) | Sep. 24, 2017USD ($) | Sep. 30, 2018USD ($)segmentcompanyproperty | Sep. 24, 2017USD ($) | |
Property, plant and equipment | |||||
Other asset write-downs | $ 14,148,000 | $ 8,715,000 | $ 14,207,000 | $ 10,672,000 | |
Depreciation expense | 7,146,000 | 7,496,000 | $ 21,638,000 | 22,748,000 | |
Assets held for sale | |||||
Number of media companies with assets held for sale | company | 2 | ||||
Facilities with reduced carrying value | property | 1 | ||||
Impairment charge of assets held for sale | $ 100,000 | ||||
Gain (loss) on sale of property | $ 0 | ||||
Intangible assets: | |||||
Goodwill impairment charge | 0 | 0 | 0 | 0 | |
Impairment charge of newspaper masthead | 14,148,000 | ||||
Intangible assets subject to amortization, net | |||||
Impairment of long-lived assets subject to amortization | 0 | 0 | 0 | 0 | |
Financial Obligations | |||||
Increase in financing obligations | $ 14,600,000 | ||||
Segment reporting | |||||
Number of operating segments | segment | 2 | ||||
Other asset write-downs | |||||
Property, plant and equipment | |||||
Write-down of non-newsprint inventory | $ 0 | 2,000,000 | |||
Intangible assets: | |||||
Impairment charge of newspaper masthead | $ 14,100,000 | $ 8,700,000 | $ 14,100,000 | $ 8,700,000 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 24, 2017 | Sep. 30, 2018 | Sep. 24, 2017 | |
Changes in stockholders' equity | ||||
Balance at the beginning of the period | $ (449,369) | |||
Amounts reclassified from AOCL | 16,649 | |||
Other comprehensive income | $ 5,550 | $ 10,409 | 16,649 | $ 19,596 |
Balance at the end of the period | (432,720) | (432,720) | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Retirement benefit expense | 2,778 | 3,328 | 8,335 | 9,983 |
Minimum Pension and Post-Retirement Liability | ||||
Changes in stockholders' equity | ||||
Balance at the beginning of the period | (442,406) | |||
Amounts reclassified from AOCL | 16,649 | |||
Other comprehensive income | 16,649 | |||
Balance at the end of the period | (425,757) | (425,757) | ||
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 | 5,550 | $ 7,712 | 16,649 | $ 12,853 |
Other Comprehensive Loss Related to Equity Investments | ||||
Changes in stockholders' equity | ||||
Balance at the beginning of the period | (6,963) | |||
Balance at the end of the period | $ (6,963) | $ (6,963) |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 24, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |||||
Statutory rate (as a percent) | 21.00% | 35.00% | |||
Measurement period | 1 year | ||||
Number of years of pre-tax losses | 3 years | 3 years | |||
Increase in valuation allowance | $ 2.8 | ||||
Valuation allowance charge | $ 21.6 | ||||
Valuation allowance against majority of deferred tax assets | $ 109.7 | $ 109.7 | |||
Valuation allowance | $ 131.3 | $ 131.3 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - EPS (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 24, 2017 | Sep. 30, 2018 | Sep. 24, 2017 | |
Anti-dilutive stock options | ||||
Weighted average anti-dilutive stock options | ||||
Anti-dilutive stock options (in shares) | 127 | 336 | 199 | 385 |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 24, 2017 | Dec. 25, 2016 |
Reconciliation of cash, cash equivalents and restricted cash as reported in the condensed consolidated balance sheets to the total of the same such amounts shown above: | ||||
Cash equivalents | $ 4,492 | $ 99,387 | ||
Restricted cash included in other assets | 31,937 | 31,967 | ||
Cash, cash equivalents and restricted cash | $ 36,429 | $ 131,354 | $ 117,017 | $ 36,248 |
SIGNIFICANT ACCOUNTING POLIC_10
SIGNIFICANT ACCOUNTING POLICIES - Cash Flow (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 24, 2017 | |
Cash Flow Information | |||
Interest paid (net of amount capitalized) | $ 42,910 | $ 45,889 | |
Income taxes paid (net of refunds) | 12,865 | $ 9,988 | |
Other non-cash financing activities | |||
Reduction of financing obligation due to sale of real properties by pension plan | (2,667) | ||
Reduction of PP&E due to sale of real properties by pension plan | $ (2,854) | ||
Gross gain on extinguishment of debt | $ 68,700 |
SIGNIFICANT ACCOUNTING POLIC_11
SIGNIFICANT ACCOUNTING POLICIES - Adopted Pronouncements (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 24, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by operating activities | $ 7,878 | $ 20,459 |
ASU 2016-18 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by operating activities | $ 2,000 |
REVENUES (Details)
REVENUES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenues | ||||
Accumulated deficit | $ (2,025,033) | $ (2,025,033) | $ (1,970,097) | |
Maximum | ||||
Revenues | ||||
Contract duration | 1 year | |||
Before and after Topic 606 | ASU 2014-09 | ||||
Revenues | ||||
Accumulated deficit | $ (2,700) | |||
Revenues | $ 0 | $ 400 |
REVENUES - Unearned Revenues (D
REVENUES - Unearned Revenues (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
REVENUES | ||
Cash payments received or due in advance satisfying performance obligations | $ 55.9 | |
Subscribers advance payment term (in years) | 1 year | |
Advertiser maximum payment (in days) | 30 days |
REVENUES - Practical Expedients
REVENUES - Practical Expedients and Exemptions (Details) | 9 Months Ended |
Sep. 30, 2018 | |
REVENUES | |
Practical expedient incremental cost of obtaining contract | true |
Practical expedient, remaining performance obligation | true |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 24, 2017 | Sep. 30, 2018 | Sep. 24, 2017 | |
Intangible assets subject to amortization, gross | ||||
Balance at the beginning of the period | $ 839,284,000 | |||
Disposition Adjustment | (785,000) | |||
Balance at the end of the period | $ 838,499,000 | 838,499,000 | ||
Accumulated amortization | ||||
Balance at the beginning of the period | (761,013,000) | |||
Disposition Adjustment | 785,000 | |||
Amortization Expense | (11,895,000) | $ (12,092,000) | (35,858,000) | $ (36,268,000) |
Balance at the end of the period | (796,086,000) | (796,086,000) | ||
Intangible assets subject to amortization, net | ||||
Balance at the beginning of the period | 78,271,000 | |||
Amortization Expense | (11,895,000) | (12,092,000) | (35,858,000) | (36,268,000) |
Balance at the end of the period | 42,413,000 | 42,413,000 | ||
Mastheads | ||||
Balance at the beginning of the period | 149,951,000 | |||
Impairment Charges | (14,148,000) | |||
Balance at the end of the period | 135,803,000 | 135,803,000 | ||
Goodwill [Roll Forward] | ||||
Balance at the beginning of the period | 705,174,000 | |||
Goodwill impairment charge | 0 | 0 | 0 | 0 |
Balance at the end of the period | 705,174,000 | 705,174,000 | ||
Total | ||||
Balance at the beginning of the period | 933,396,000 | |||
Amortization Expense | (11,895,000) | $ (12,092,000) | (35,858,000) | $ (36,268,000) |
Balance at the end of the period | $ 883,390,000 | $ 883,390,000 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 24, 2017 | Sep. 30, 2018 | Sep. 24, 2017 | |
Estimated amortization expense | ||||
Amortization expense | $ 11,895 | $ 12,092 | $ 35,858 | $ 36,268 |
2018 (Remainder) | 11,802 | 11,802 | ||
2,019 | 24,154 | 24,154 | ||
2,020 | 803 | 803 | ||
2,021 | 680 | 680 | ||
2,022 | 655 | 655 | ||
2,023 | $ 667 | $ 667 |
INVESTMENTS IN UNCONSOLIDATED_2
INVESTMENTS IN UNCONSOLIDATED COMPANIES (Details) - USD ($) $ in Thousands | Sep. 13, 2018 | Jul. 31, 2017 | Jul. 30, 2017 | Sep. 30, 2018 | Sep. 24, 2017 | Sep. 30, 2018 | Sep. 24, 2017 |
Investments in unconsolidated companies and joint ventures | |||||||
Distributions of income from investments in unconsolidated companies | $ 2,876 | ||||||
Gains related to investments in consolidated companies | $ 1,721 | 1,721 | |||||
Write down of certain unconsolidated investments | $ 1,866 | $ 171,013 | |||||
Career Builder LLC | |||||||
Investments in unconsolidated companies and joint ventures | |||||||
Proceeds from sale | $ 5,300 | $ 73,900 | |||||
Distributions of income from investments in unconsolidated companies | 7,300 | $ 2,800 | |||||
Gross proceeds | $ 66,600 | ||||||
Write down of certain unconsolidated investments | 168,600 | ||||||
Ownership interest (as a percent) | 3.00% | 15.00% | |||||
Other | |||||||
Investments in unconsolidated companies and joint ventures | |||||||
Write down of certain unconsolidated investments | $ 1,900 | $ 2,400 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Long-term debt disclosures | ||
Face Value | $ 750,418 | |
Total long-term debt, net of current | 750,418 | |
Carrying value | 638,651 | $ 781,392 |
Less current portion | 74,140 | |
Total long-term debt, net of current | 638,651 | 707,252 |
Unamortized debt issuance costs and discounts | $ 111,800 | $ 23,700 |
9.00% senior secured notes due in 2022 | ||
Long-term debt disclosures | ||
Interest rate (as a percent) | 9.00% | 9.00% |
Carrying value | $ 433,819 | |
9.00% senior secured notes due in 2026 | ||
Long-term debt disclosures | ||
Interest rate (as a percent) | 9.00% | 9.00% |
Face Value | $ 310,000 | |
Carrying value | $ 290,054 | |
7.795% tranche A junior term loan due in 2030 | ||
Long-term debt disclosures | ||
Interest rate (as a percent) | 7.795% | 7.795% |
Face Value | $ 157,083 | |
Carrying value | $ 122,490 | |
6.875% tranche B junior term loan due in 2031 | ||
Long-term debt disclosures | ||
Interest rate (as a percent) | 6.875% | 6.875% |
Face Value | $ 193,466 | |
Carrying value | $ 140,422 | |
7.150% unsecured debentures due in 2027 | ||
Long-term debt disclosures | ||
Interest rate (as a percent) | 7.15% | 7.15% |
Face Value | $ 7,105 | |
Carrying value | $ 6,816 | $ 85,262 |
6.875% unsecured debentures due in 2029 | ||
Long-term debt disclosures | ||
Interest rate (as a percent) | 6.875% | 6.875% |
Face Value | $ 82,764 | |
Carrying value | $ 78,869 | $ 262,311 |
LONG-TERM DEBT - Debt Redemptio
LONG-TERM DEBT - Debt Redemptions, Repurchases and Loss on Extinguishment of Debt (Details) - USD ($) $ in Thousands | Jul. 16, 2018 | Sep. 30, 2018 | Sep. 24, 2017 | Jul. 01, 2018 | Sep. 30, 2018 | Sep. 24, 2017 | Dec. 31, 2017 |
LONG-TERM DEBT | |||||||
Face value debt reduced | $ 439,630 | $ 68,550 | $ 439,630 | $ 68,550 | |||
Amount of debt redeemed | 16,900 | 16,900 | |||||
Gross gain on extinguishment of debt | 68,700 | ||||||
Gain (loss) on extinguishment of debt, net | 36,286 | (1,831) | 30,918 | (2,700) | |||
9.00% senior secured notes due in 2022 | |||||||
LONG-TERM DEBT | |||||||
Face value debt reduced | $ 439,630 | 51,685 | $ 439,630 | 51,685 | |||
Interest rate (as a percent) | 9.00% | 9.00% | 9.00% | ||||
Debt redeemed through tender offer | $ 344,100 | 35,000 | $ 500 | 50,000 | |||
Amount of debt redeemed | $ 344,100 | 1,700 | $ 75,000 | 1,700 | |||
Debt repurchased privately | $ 20,000 | ||||||
5.750% notes due in 2017 | |||||||
LONG-TERM DEBT | |||||||
Face value debt reduced | $ 16,865 | $ 16,865 | |||||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% | 5.75% | |||
Debentures | |||||||
LONG-TERM DEBT | |||||||
Gross gain on extinguishment of debt | $ 68,700 | $ 68,700 | |||||
Write off of unamortized discounts | $ 32,300 | $ 32,300 |
LONG-TERM DEBT - Debt Refinanci
LONG-TERM DEBT - Debt Refinancing (Details) - USD ($) $ in Millions | Jul. 16, 2018 | Sep. 24, 2017 | Jul. 01, 2018 | Sep. 24, 2017 |
LONG-TERM DEBT | ||||
Amount of debt redeemed | $ 16.9 | $ 16.9 | ||
9.00% senior secured notes due in 2022 | ||||
LONG-TERM DEBT | ||||
Amount of debt redeemed | $ 344.1 | $ 1.7 | $ 75 | $ 1.7 |
9.00% senior secured notes due in 2026 | ||||
LONG-TERM DEBT | ||||
Aggregate principal amount of notes issued | $ 310 |
LONG-TERM DEBT - Credit Agreeme
LONG-TERM DEBT - Credit Agreement (Details) $ in Millions | Jul. 16, 2018USD ($) | Jul. 01, 2018 | Sep. 30, 2018USD ($) | Oct. 12, 2018USD ($) | Dec. 31, 2017 | Oct. 21, 2014USD ($) |
9.00% senior secured notes due in 2022 | ||||||
LONG-TERM DEBT | ||||||
Interest rate (as a percent) | 9.00% | 9.00% | ||||
ABL Credit Agreement | ||||||
LONG-TERM DEBT | ||||||
Maximum borrowing capacity | $ 44.9 | |||||
Amount borrowed | 3 | |||||
ABL Credit Agreement | LIBOR | ||||||
LONG-TERM DEBT | ||||||
Basis spread on variable rate (as a percent) | 1.00% | |||||
ABL Credit Agreement | Federal funds rate | ||||||
LONG-TERM DEBT | ||||||
Basis spread on variable rate (as a percent) | 0.50% | |||||
ABL Credit Agreement | Minimum | LIBOR | ||||||
LONG-TERM DEBT | ||||||
Basis spread on variable rate (as a percent) | 1.75% | |||||
ABL Credit Agreement | Minimum | Base rate | ||||||
LONG-TERM DEBT | ||||||
Basis spread on variable rate (as a percent) | 0.75% | |||||
ABL Credit Agreement | Maximum | ||||||
LONG-TERM DEBT | ||||||
Interest payable period | 3 months | |||||
ABL Credit Agreement | Maximum | LIBOR | ||||||
LONG-TERM DEBT | ||||||
Basis spread on variable rate (as a percent) | 2.25% | |||||
ABL Credit Agreement | Maximum | Base rate | ||||||
LONG-TERM DEBT | ||||||
Basis spread on variable rate (as a percent) | 1.25% | |||||
ABL Credit Agreement | Revolving credit facility | ||||||
LONG-TERM DEBT | ||||||
Minimum fixed charge coverage ratio | 1.10 | |||||
Minimum percentage of loan amount maintain | 12.50% | |||||
Minimum amount of debt maintain | $ 8.1 | |||||
Number of threshold consecutive days | 30 days | |||||
ABL Credit Agreement | Letter of credit | ||||||
LONG-TERM DEBT | ||||||
Outstanding letters of credit | 3 | |||||
ABL Credit Agreement | Wells Fargo | Revolving credit facility | ||||||
LONG-TERM DEBT | ||||||
Maximum borrowing capacity | $ 65 | |||||
ABL Credit Agreement | Wells Fargo | Letter of credit | ||||||
LONG-TERM DEBT | ||||||
Maximum borrowing capacity | 35 | |||||
Third Amended and Restated Credit Agreement | 9.00% senior secured notes due in 2022 | Revolving credit facility | ||||||
LONG-TERM DEBT | ||||||
Outstanding line of credit | $ 0 | |||||
LC Agreement | Letter of credit | ||||||
LONG-TERM DEBT | ||||||
Outstanding letters of credit | 26.7 | |||||
LC Agreement | Bank of America | Letter of credit | ||||||
LONG-TERM DEBT | ||||||
Maximum borrowing capacity | $ 35 | |||||
Outstanding letters of credit | $ 26.7 | |||||
Percentage of aggregate undrawn amount of letter of credit required to provide cash collateral | 101.00% | |||||
Forecast | ABL Credit Agreement | Letter of credit | ||||||
LONG-TERM DEBT | ||||||
Outstanding letters of credit | $ 1 |
LONG-TERM DEBT - Senior Secured
LONG-TERM DEBT - Senior Secured Notes (Details) - USD ($) $ in Thousands | Jul. 16, 2018 | Sep. 24, 2017 | Jul. 01, 2018 | Sep. 24, 2017 | Sep. 30, 2018 |
Debt Instrument [Line Items] | |||||
Amount of debt redeemed | $ 16,900 | $ 16,900 | |||
Face Value | $ 750,418 | ||||
9.00% senior secured notes due in 2022 | |||||
Debt Instrument [Line Items] | |||||
Amount of debt redeemed | $ 344,100 | $ 1,700 | $ 75,000 | $ 1,700 | |
9.00% senior secured notes due in 2026 | |||||
Debt Instrument [Line Items] | |||||
Redemption of debt as a percentage of principle amount | 100.00% | ||||
Minimum percentage of loan amount maintain | 25.00% | ||||
Face Value | 310,000 | ||||
Repurchase price (as percent) | 101.00% | ||||
9.00% senior secured notes due in 2026 | Maximum | |||||
Debt Instrument [Line Items] | |||||
Redemption of debt as a percentage of principle amount | 40.00% | ||||
7.795% tranche A junior term loan due in 2030 | |||||
Debt Instrument [Line Items] | |||||
Face Value | 157,083 | ||||
7.150% unsecured debentures due in 2027 | |||||
Debt Instrument [Line Items] | |||||
Face Value | 7,105 | ||||
6.875% unsecured debentures due in 2029 | |||||
Debt Instrument [Line Items] | |||||
Face Value | $ 82,764 |
LONG-TERM DEBT - Junior Lien Te
LONG-TERM DEBT - Junior Lien Term Loan Agreement (Details) - USD ($) $ in Thousands | Jul. 16, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
LONG-TERM DEBT | |||
Proceeds from Issuance of Long-term debt | $ 361,449 | ||
Aggregate principal amount of outstanding, redemptions notice issued | 750,418 | ||
Carrying value of long-term debt | $ 638,651 | $ 781,392 | |
Junior Lien Term Loan Credit Agreement | |||
LONG-TERM DEBT | |||
Principal amount of debt (as a percent) | 100.00% | ||
Tranche A | Junior Lien Term Loan Credit Agreement | The Bank of New York Mellon | |||
LONG-TERM DEBT | |||
Maximum borrowing capacity | $ 157,100 | ||
Tranche B | Junior Lien Term Loan Credit Agreement | The Bank of New York Mellon | |||
LONG-TERM DEBT | |||
Maximum borrowing capacity | 193,500 | ||
7.150% unsecured debentures due in 2027 | |||
LONG-TERM DEBT | |||
Interest rate (as a percent) | 7.15% | 7.15% | |
Aggregate principal amount of outstanding, redemptions notice issued | $ 7,105 | ||
Carrying value of long-term debt | 6,816 | $ 85,262 | |
7.150% unsecured debentures due in 2027 | The Bank of New York Mellon | |||
LONG-TERM DEBT | |||
Carrying value of long-term debt | $ 7,100 | ||
7.150% unsecured debentures due in 2027 | Junior Lien Term Loan Credit Agreement | The Bank of New York Mellon | |||
LONG-TERM DEBT | |||
Proceeds from Issuance of Long-term debt | $ 82,100 | ||
7.795% tranche A junior term loan due in 2030 | |||
LONG-TERM DEBT | |||
Interest rate (as a percent) | 7.795% | 7.795% | |
Aggregate principal amount of outstanding, redemptions notice issued | $ 157,083 | ||
Carrying value of long-term debt | $ 122,490 | ||
7.795% tranche A junior term loan due in 2030 | Tranche A | The Bank of New York Mellon | |||
LONG-TERM DEBT | |||
Interest rate (as a percent) | 7.795% | ||
6.875% unsecured debentures due in 2029 | |||
LONG-TERM DEBT | |||
Interest rate (as a percent) | 6.875% | 6.875% | |
Aggregate principal amount of outstanding, redemptions notice issued | $ 82,764 | ||
Carrying value of long-term debt | 78,869 | $ 262,311 | |
6.875% unsecured debentures due in 2029 | The Bank of New York Mellon | |||
LONG-TERM DEBT | |||
Carrying value of long-term debt | $ 82,800 | ||
6.875% unsecured debentures due in 2029 | Junior Lien Term Loan Credit Agreement | The Bank of New York Mellon | |||
LONG-TERM DEBT | |||
Proceeds from Issuance of Long-term debt | $ 193,500 | ||
6.875% unsecured debentures due in 2029 | Tranche B | The Bank of New York Mellon | |||
LONG-TERM DEBT | |||
Interest rate (as a percent) | 6.875% | ||
6.875% unsecured debentures due in 2029 | Tranche B | Junior Lien Term Loan Credit Agreement | |||
LONG-TERM DEBT | |||
Debt conversion amount | $ 75,000 |
EMPLOYEE BENEFITS (Details)
EMPLOYEE BENEFITS (Details) - Pension plan | 9 Months Ended |
Sep. 30, 2018USD ($)item | |
EMPLOYEE BENEFITS | |
Number of new participants | item | 0 |
Further benefits | $ | $ 0 |
EMPLOYEE BENEFITS - Retirement
EMPLOYEE BENEFITS - Retirement and Post retirement costs - (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | Sep. 30, 2018 | Sep. 24, 2017 | Sep. 30, 2018 | Sep. 24, 2017 | |
Retirement expense for continuing operations | |||||
Net pension expense | $ 2,778 | $ 3,328 | $ 8,335 | $ 9,983 | |
Matching contributions | 600 | 1,900 | |||
Pension plan | |||||
Retirement expense for continuing operations | |||||
Interest cost | 19,788 | 21,367 | 59,365 | 64,101 | |
Expected return on plan assets | (22,624) | (22,392) | (67,872) | (67,177) | |
Actuarial loss | 6,295 | 5,084 | 18,886 | 15,252 | |
Net pension expense | 3,459 | 4,059 | 10,379 | 12,176 | |
Proceeds from sale of real property location | $ 4,100 | ||||
(Loss) on sale of real property location | (200) | ||||
Post-retirement plans | |||||
Retirement expense for continuing operations | |||||
Net pension expense | $ (681) | $ (731) | $ (2,044) | $ (2,193) |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Legal Proceedings (Details) $ in Millions | 1 Months Ended | 9 Months Ended | |
Feb. 28, 2009item | Dec. 31, 2008item | Sep. 30, 2018USD ($)item | |
"Sacramento Case" | |||
Contingencies | |||
Number of carriers | 5,000 | ||
Number of phases | 3 | ||
"Fresno Case" | |||
Contingencies | |||
Number of carriers | 3,500 | ||
Number of phases | 2 | ||
ABL Credit Agreement | Letter of credit | |||
Contingencies | |||
Outstanding letters of credit | $ | $ 3 | ||
LC Agreement | Letter of credit | |||
Contingencies | |||
Outstanding letters of credit | $ | $ 26.7 |
STOCK PLANS (Details)
STOCK PLANS (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Stock options and SARs | |
Options/SARs | |
Outstanding at the beginning of the period (in shares) | shares | 156,175 |
Expired (in shares) | shares | (31,225) |
Outstanding at the end of the period (in shares) | shares | 124,950 |
Weighted Average Exercise Price | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 32.12 |
Expired (in dollars per share) | $ / shares | 36.87 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 30.93 |
RSUs | |
RSU's | |
Nonvested at the beginning of the period (in shares) | shares | 245,794 |
Granted (in shares) | shares | 268,080 |
Vested (in shares) | shares | (164,442) |
Forfeited (in shares) | shares | (4,530) |
Nonvested at the end of the period (in shares) | shares | 344,902 |
Weighted Average Grant Date Fair Value | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 11.55 |
Granted (in dollars per share) | $ / shares | 8.95 |
Vested (in dollars per share) | $ / shares | 11.41 |
Forfeited (in dollars per share) | $ / shares | 10.75 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 9.60 |
Additional disclosures | |
Total fair value | $ | $ 1.5 |
STOCK PLANS - Stock-based compe
STOCK PLANS - Stock-based compensation (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 24, 2017USD ($) | Sep. 30, 2018USD ($)item | Sep. 24, 2017USD ($) | |
STOCK PLANS | ||||
Number of stock-based compensation plans | item | 2 | |||
Stock-based compensation expense | $ | $ 758 | $ 325 | $ 1,819 | $ 1,786 |