Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Mar. 01, 2019 | Jun. 29, 2018 | |
Entity Registrant Name | MCCLATCHY CO | ||
Entity Central Index Key | 1,056,087 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 30, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 69.7 | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Common Class A | |||
Entity Common Stock, Shares Outstanding | 5,408,396 | ||
Common Class B | |||
Entity Common Stock, Shares Outstanding | 2,428,191 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
REVENUES - NET: | ||
Net revenues | $ 807,226 | $ 903,592 |
OPERATING EXPENSES: | ||
Compensation | 298,033 | 338,588 |
Newsprint, supplements and printing expenses | 54,592 | 66,438 |
Depreciation and amortization | 76,242 | 80,129 |
Other operating expenses | 364,038 | 352,830 |
Other asset write-downs | 37,274 | 23,442 |
Operating expenses, total | 830,179 | 861,427 |
OPERATING INCOME (LOSS) | (22,953) | 42,165 |
NON-OPERATING INCOME (EXPENSE): | ||
Interest expense | (81,397) | (81,501) |
Interest income | 640 | 558 |
Equity income (loss) in unconsolidated companies, net | 592 | (1,698) |
Impairments related to investments in unconsolidated companies, net | (170,007) | |
Gains related to investments in unconsolidated companies | 1,721 | |
Gain (loss) on extinguishment of debt, net | 30,577 | (2,700) |
Retirement benefit expense | (11,114) | (13,404) |
Other - net | 7 | (312) |
Non-operating income (expense), total | (58,974) | (269,064) |
Loss before income taxes | (81,927) | (226,899) |
Income tax (benefit) expense | (2,170) | 105,459 |
NET LOSS | $ (79,757) | $ (332,358) |
Net loss per common share: | ||
Net loss per share - basic (in dollars per share) | $ (10.27) | $ (43.55) |
Net loss per share - diluted (in dollars per share) | $ (10.27) | $ (43.55) |
Weighted average number of common shares: | ||
Basic (in shares) | 7,768 | 7,632 |
Diluted (in shares) | 7,768 | 7,632 |
Advertising | ||
REVENUES - NET: | ||
Net revenues | $ 416,720 | $ 498,639 |
Audience | ||
REVENUES - NET: | ||
Net revenues | 339,506 | 363,497 |
Other | ||
REVENUES - NET: | ||
Net revenues | $ 51,000 | $ 41,456 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||
NET LOSS | $ (79,757) | $ (332,358) |
Pension and post retirement plans: | ||
Change in pension and post-retirement benefit plans | (56,530) | 8,100 |
Investment in unconsolidated companies: | ||
Other comprehensive income (loss) | 4,046 | |
Other comprehensive income (loss) | (56,530) | 12,146 |
Comprehensive loss | $ (136,287) | $ (320,212) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 21,906 | $ 99,387 |
Trade receivables (net of allowances of $3,008 and $3,225) | 81,709 | 101,081 |
Other receivables | 12,198 | 11,556 |
Newsprint, ink and other inventories | 9,115 | 7,918 |
Assets held for sale | 9,920 | 6,332 |
Other current assets | 15,505 | 19,000 |
Total current assets | 150,353 | 245,274 |
Property, plant and equipment, net | 233,692 | 257,639 |
Intangible assets: | ||
Identifiable intangibles - net | 143,347 | 228,222 |
Goodwill | 705,174 | 705,174 |
Total intangible assets | 848,521 | 933,396 |
Investments and other assets: | ||
Investments in unconsolidated companies | 3,888 | 7,172 |
Other assets | 58,847 | 62,437 |
Total investments and other assets | 62,735 | 69,609 |
TOTAL ASSETS | 1,295,301 | 1,505,918 |
Current liabilities: | ||
Current portion of long-term debt | 4,312 | 74,140 |
Accounts payable | 37,521 | 31,856 |
Accrued pension liabilities | 11,510 | 8,941 |
Accrued compensation | 20,481 | 24,050 |
Income taxes payable | 6,535 | 10,133 |
Unearned revenue | 58,340 | 60,436 |
Accrued interest | 26,037 | 7,954 |
Financing obligations, current | 10,417 | 9,143 |
Other accrued liabilities | 5,385 | 9,689 |
Total current liabilities | 180,538 | 236,342 |
Non-current liabilities : | ||
Long-term debt | 633,383 | 707,252 |
Deferred income taxes | 20,775 | 28,062 |
Pension and postretirement obligations | 655,310 | 599,763 |
Financing obligations | 108,252 | 91,905 |
Other long-term obligations | 38,708 | 46,926 |
Total non-current liabilities | 1,456,428 | 1,473,908 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Additional paid-in capital | 2,216,681 | 2,215,109 |
Accumulated deficit | (1,954,132) | (1,970,097) |
Treasury stock at cost, 252 shares and 3,157 shares | (2) | (51) |
Accumulated other comprehensive loss | (604,289) | (449,369) |
Total stockholders' equity | (341,665) | (204,332) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 1,295,301 | 1,505,918 |
Common Class A | ||
Stockholders' equity: | ||
Common stock | 53 | 52 |
Common Class B | ||
Stockholders' equity: | ||
Common stock | $ 24 | $ 24 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 30, 2018 | Dec. 31, 2017 |
Trade receivables, allowance | $ 3,008 | $ 3,225 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Treasury stock, shares | 252 | 3,157 |
Common Class A | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 5,384,303 | 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 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (79,757) | $ (332,358) |
Reconciliation to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 76,242 | 80,129 |
Gain on disposal of property and equipment (excluding other asset write-downs) | (4,092) | (23,590) |
Retirement benefit expense | 11,114 | 13,404 |
Stock-based compensation expense | 2,057 | 2,475 |
Deferred income taxes | (7,287) | 86,400 |
Equity (income) loss in unconsolidated companies | (592) | 1,698 |
Gains related to investments in unconsolidated companies | (1,721) | |
Impairments related to investments in unconsolidated companies, net | 170,007 | |
Distributions of income from investments in unconsolidated companies | 2,876 | |
(Gain) loss on extinguishment of debt, net | (30,577) | 2,700 |
Other asset write-downs | 37,274 | 23,442 |
Bond fees and other debt-related items | 6,215 | 3,243 |
Other | (5,755) | (9,468) |
Changes in certain assets and liabilities: | ||
Trade receivables | 16,704 | 11,502 |
Inventories | (1,197) | 4,064 |
Other assets | 2,475 | (605) |
Accounts payable | 5,665 | (4,966) |
Accrued compensation | (3,577) | (1,472) |
Income taxes | (3,058) | 2,211 |
Accrued interest | 18,083 | (648) |
Other liabilities | (15,173) | (9,045) |
Net cash provided by operating activities | 25,919 | 19,123 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (11,120) | (11,114) |
Proceeds from sale of property, plant and equipment and other | 5,679 | 43,944 |
Purchase of certificates of deposit | (28,651) | (4,040) |
Proceeds from redemption of certificates of deposit | 30,957 | 3,433 |
Distributions from equity investments | 7,318 | |
Contributions to cost and equity investments | (2,540) | (3,937) |
Proceeds from sale of unconsolidated companies and other-net | 5,301 | 66,913 |
Other, net | (11) | |
Net cash provided by (used in) investing activities | (374) | 102,506 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repurchase of notes and related expenses | (464,870) | (70,715) |
Proceeds from issuance of debt | 361,449 | |
Payment of financing costs | (17,684) | |
Proceeds from sale-leaseback financing obligations | 15,749 | 43,971 |
Purchase of treasury shares | (436) | (508) |
Other | (552) | 729 |
Net cash used in financing activities | (106,344) | (26,523) |
Increase (decrease) in cash, cash equivalents and restricted cash | (80,799) | 95,106 |
Cash, cash equivalents and restricted cash at beginning of period | 131,354 | 36,248 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | $ 50,555 | $ 131,354 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Class ACommon Stock | Common Class BCommon Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total |
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 25, 2016 | $ 51 | $ 24 | $ 2,213,098 | $ (1,637,739) | $ (461,515) | $ (6) | $ 113,913 |
Changes in stockholders' equity | |||||||
Net loss | (332,358) | (332,358) | |||||
Other comprehensive income (loss) | 12,146 | 12,146 | |||||
Issuance of shares | 2 | (2) | |||||
Stock compensation expense | 2,475 | 2,475 | |||||
Treasury stock, acquired | (508) | (508) | |||||
Treasury stock, retired | (1) | (462) | 463 | ||||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2017 | 52 | 24 | 2,215,109 | (1,970,097) | (449,369) | (51) | (204,332) |
Changes in stockholders' equity | |||||||
Net loss | (79,757) | (79,757) | |||||
Other comprehensive income (loss) | (56,530) | (56,530) | |||||
Issuance of shares | 2 | (1) | 1 | ||||
Stock compensation expense | 2,057 | 2,057 | |||||
Treasury stock, acquired | (436) | (436) | |||||
Treasury stock, retired | (1) | (484) | 485 | ||||
Reclassification of accumulated other comprehensive income (loss) tax effects | 98,390 | (98,390) | |||||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 30, 2018 | $ 53 | $ 24 | $ 2,216,681 | (1,954,132) | $ (604,289) | $ (2) | (341,665) |
Changes in stockholders' equity | |||||||
Cumulative effect adjustment of Topic 606 | $ (2,668) | $ (2,668) |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - shares | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
Treasury Stock, Shares, Acquired | 46,941 | 51,996 |
Treasury Stock, Shares, Retired | 49,846 | 48,873 |
Common Class A | ||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 162,824 | 172,781 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 30, 2018 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | 1. SIGNIFICANT ACCOUNTING POLICIE The McClatchy Company (the “Company,” “we,” “us” or “our”) provides strong, independent local journalism to 30 communities with operations in 14 states, as well as selected national news coverage through our Washington D.C. based bureau. We also provide a full suite of digital marketing services, both through our local sales teams based in the communities we serve, as well as through excelerate ® , our national digital marketing agency. 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. Our fiscal year ends on the last Sunday in December. The fiscal year December 30, 2018, consisted of a 52-week period. The fiscal year ended December 31, 2017 consisted of a 53-week period. Preparation of the financial statements in conformity with accounting principles generally accepted in the United States and pursuant to the rules and regulation of the Securities and Exchange Commission (“SEC”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The consolidated financial statements include the Company and our subsidiaries. Intercompany items and transactions are eliminated. Revenue recognition We recognize revenues when control of the promised goods is transferred to our customers or when the services are performed, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. All revenue recognized on the 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. Also see Note 2. Concentrations of credit risks Financial instruments, which potentially subject us to concentrations of credit risks, are principally cash and cash equivalents and trade accounts receivables. Cash and cash equivalents are placed with major financial institutions. As of December 30, 2018, substantially all of our cash and cash equivalents are in excess of the FDIC insured limits. We have not experienced any losses related to amounts in excess of FDIC limits. We routinely assess the financial strength of significant customers and this assessment, combined with the large number and geographic diversity of our customers, limits our concentration of risk with respect to trade accounts receivable. Allowance for doubtful accounts We maintain an allowance account for estimated losses resulting from the risk that our customers will not make required payments. At certain of our media companies, we establish our allowances based on collection experience, aging of our receivables and significant individual account credit risk. At the remaining media companies we use the aging of accounts receivable, reserving for all accounts due 90 days or longer, to establish allowances for losses on accounts receivable; however, if we become aware that the financial condition of specific customers has deteriorated, additional allowances are provided. We provide an allowance for doubtful accounts as follows: Years Ended December 30, December 31, (in thousands) 2018 2017 Balance at beginning of year $ 3,225 $ 3,254 Charged to costs and expenses 8,995 10,870 Amounts written off (9,212) (10,899) Balance at end of year $ 3,008 $ 3,225 Newsprint, ink and other inventories Newsprint, ink and other inventories are stated at the lower of cost (based principally on the first‑in, first‑out method) and net realizable value. During 2017, we recorded a $2.0 million write‑down of non-newsprint inventory, which was reflected in the other asset write-downs line on our consolidated statement of operations. There were no similar write-downs of newsprint, ink or other inventories during 2018. Property, plant and equipment Property, plant and equipment (“PP&E”) are recorded at cost. Additions and substantial improvements, as well as interest expense incurred during construction, are capitalized. Capitalized interest was not material in 2018 or 2017. Expenditures for maintenance and repairs are charged to expense as incurred. When PP&E is sold or retired, the asset and related accumulated depreciation are removed from the accounts and the associated gain or loss is recognized. Property, plant and equipment consisted of the following: December 30, December 31, Estimated (in thousands) 2018 2017 Useful Lives Land $ 32,335 $ 36,491 Building and improvements 268,157 289,574 - years Equipment 506,307 555,204 - years (1) Construction in process 1,890 2,696 808,689 883,965 Less accumulated depreciation (574,997) (626,326) Property, plant and equipment, net $ 233,692 $ 257,639 (1) Presses are 9 - 25 years and other equipment is 2 - 15 years We record depreciation using the straight‑line method over estimated useful lives. The useful lives are estimated at the time the assets are acquired and are based on historical experience with similar assets and anticipated technological changes. Our depreciation expense was $28.6 million and $30.8 million in 2018 and 2017, respectively. During 2018 and 2017, we incurred $0.6 million and $0.3 million, respectively, in accelerated depreciation related to production equipment that was no longer needed due to outsourcing of our printing process at certain of our media companies. We review the carrying amount of long‑lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events that result in an impairment review include the decision to close a location or a significant decrease in the operating performance of the long‑lived asset. Long‑lived assets are considered impaired if the estimated undiscounted future cash flows of the asset or asset group are less than the carrying amount. For impaired assets, we recognize a loss equal to the difference between the carrying amount of the asset or asset group and its estimated fair value, which is recorded in operating expenses in the consolidated statements of operations. The estimated fair value of the asset or asset group is based on the discounted future cash flows of the asset or asset group. The asset group is defined as the lowest level for which identifiable cash flows are available. Assets held for sale Assets held for sale includes land and building at three of our media companies that we actively marketed for sale during 2018. In connection with classifying these properties as assets held for the 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, during 2018, we recorded a $0.1 million impairment charge which is included in other asset write-downs on our consolidated statement of operations. The land and building at this property were subsequently sold during the third quarter of 2018 with no gain or additional loss. Additionally, one of the other properties that was classified as assets held for sale in 2018 was sold for a gain of $0.5 million. Investments in unconsolidated companies We have accounted for non-marketable equity investments under the equity or cost method. Investments through which we exercise significant influence but do not have control over the investee are accounted for under the equity method. Investments through which we are not able to exercise significant influence over the investee are accounted for under the cost method. See Note 3 for discussion of investments in unconsolidated companies. Financial obligations Financial obligations consist of contributions of real properties to the Pension Plan in 2016 and 2011 (see Note 7), and real property previously owned by The Sacramento Bee 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. Segment reporting We operate 30 media companies, providing each of our communities with high-quality news and advertising services in a wide array of digital and print formats. We have two operating segments that we aggregate into a single reportable segment because each has similar economic characteristics, products, customers and distribution methods. Our operating segments are based on how our chief executive officer, who is also our Chief Operating Decision Maker (“CODM”), makes decisions about allocating resources and assessing performance. The CODM is provided discrete financial information for the two operating segments. Each operating segment consists of a group of media companies and both operating segments report to the same segment manager. One of our operating segments (“Western Segment”) consists of our media companies’ operations in the West and Central, while the other operating segment (“Eastern Segment”) consists primarily of media company operations in the Carolinas and East. Goodwill and intangible impairment Goodwill represents the excess of cost of a business acquisition over the fair value of the net assets acquired. In accordance with FASB ASC 350 " Intangibles - Goodwill and Other " goodwill is not amortized. An impairment loss is recognized when the carrying amount of the reporting unit's net assets exceed the estimated fair value of the reporting unit. 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. We perform this testing on operating segments, which are also considered our reporting units. One reporting unit (“Western” reporting unit) consists of operations in our West and Central regions and the other reporting unit (“Eastern” reporting unit) consists of operations primarily in our Carolinas and East regions We test for goodwill impairment using an equal weighting of a market approach and an income approach. We use market multiples derived from a set of competitors or companies with comparable market characteristics to establish fair values for a reporting unit (market approach). We also estimate fair value using discounted projected cash flow analysis (income approach). This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, the long‑term rate of growth for our business, the useful life over which cash flows will occur, and determination of our weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit. In 2018, we considered the challenging business conditions and the resulting weakness in our stock price in our annual impairment analysis; however, no impairment was recognized. In 2017, we also concluded no impairment charge was required. Also see Note 4. Newspaper mastheads (newspaper titles and website domain names) are not subject to amortization and are tested for impairment annually, at year‑end, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of each newspaper masthead with its carrying amount. We use a relief-from-royalty approach which utilizes a discounted cash flow model to determine the fair value of each newspaper masthead. We performed interim and annual impairment tests during 2018. Individual newspaper masthead fair values were estimated using the present value of expected future cash flows, using estimates, judgments and assumptions discussed above that we believe were appropriate in the circumstances. As a result, we recorded an intangible newspaper masthead impairment charges of $14.1 million in the third quarter, and $37.2 million for the full year ending December 30, 2018. In 2017, we recorded impairment charges of $21.5 million. Also see Note 4. 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 impairments of long‑lived assets subject to amortization during 2018 or 2017. Stock‑based compensation All stock‑based compensation, including grants of stock appreciation rights, restricted stock units and common stock under equity incentive plans, are recognized in the financial statements based on their fair values. At December 30, 2018, we had two stock‑based compensation plans. See Note 10. 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. During 2018, we finalized the impacts of the Tax Act and noted no material adjustments to our previously recorded balances and results. The FASB also issued ASU 2018-02, see below in Note 1, which allowed for certain stranded tax effects resulting from the Tax Act to be reclassified from accumulated other comprehensive income to retained earnings. We elected to early adopt this standard and as such recorded a reclass of $98.4 million of stranded tax effects from accumulated other comprehensive income to retained earnings in 2018. 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 considers 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 had 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. 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 also evaluate any uncertain tax positions and recognize a liability for the tax benefit associated with an uncertain tax position if it is more likely than not that the tax position will not be sustained on examination by the taxing authorities upon consideration of the technical merits of the position. The tax benefits recognized in the financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. We record a liability for uncertain tax positions taken or expected to be taken in a tax return. Any change in judgment related to the expected ultimate resolution of uncertain tax positions is recognized in earnings in the period in which such change occurs. We record accrued interest related to unrecognized tax benefits in interest expense. Accrued penalties are recorded as part of income taxes. 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 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 December 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 December 30, 2018 the carrying value and the estimated fair value of our 2026 Notes (as defined in Note 5) was $287.2 million and $302.4 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 2026 Notes as 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 December 30, 2018, the carrying value and the estimated fair value of our Debentures, Junior Term Loan and 2031 Notes (as defined in Note 5), was $350.4 million and, $296.5 million, respectively. The fair values of our Debentures, Junior Term loan, and 2031 Notes were estimated based on quoted market prices. When 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 December 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. Pension plan. As of December 30, 2018, and December 31, 2017, we had assets related to our qualified defined benefit pension plan measured at fair value. The required disclosures regarding such assets are presented in Note 7. Certain assets are measured at fair value on a nonrecurring basis; that is, they are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Our non‑financial assets that are measured at fair value on a nonrecurring basis are assets held for sale, goodwill, indefinite or finite lived intangible assets and equity method investments. All of these are measured using Level 3 inputs. We utilize valuation techniques that seek to maximize the use of observable inputs and minimize the use of unobservable inputs. The significant unobservable inputs include our expected cash flows and the discount rate that we estimate market participants would seek for bearing the risk associated with such assets. We incurred impairment charges during 2018 and 2017 on our newspaper masthead intangible assets (see above in Note 1). Accumulated other comprehensive loss We record changes in our net assets from non‑owner sources in our consolidated statements of stockholders’ equity (deficit). Such changes relate primarily to valuing our pension liabilities, net of tax effects. Our accumulated other comprehensive loss (“AOCL”) and reclassifications from AOCL, net of tax, consisted of the following: Other Minimum Comprehensive Pension and Loss Post- Related to Retirement Equity (in thousands) Liability Investments Total Balance at December 25, 2016 $ (450,506) $ (11,009) $ (461,515) Other comprehensive income (loss) before reclassifications — 4,046 4,046 Amounts reclassified from AOCL 8,100 — 8,100 Other comprehensive income 8,100 4,046 12,146 Balance at December 31, 2017 $ (442,406) $ (6,963) $ (449,369) Amounts reclassified from AOCL (153,414) (1,506) (154,920) Other comprehensive loss (153,414) (1,506) (154,920) Balance at December 30, 2018 $ (595,820) $ (8,469) $ (604,289) Amount Reclassified from AOCL (in thousands) Year Ended Year Ended December 30, December 31, Affected Line in the AOCL Component 2018 2017 Consolidated Statements of Operations Minimum pension and post-retirement liability $ (56,530) $ 8,100 Retirement benefit expense (1) Reclassification of AOCL tax effects (98,390) — Retained earnings (2) $ (154,920) $ 8,100 Net of tax _____________________ (1) There is no income tax benefit associated with the years ended December 30, 2018 and December 31, 2017, due to the recognition of a valuation allowance. (2) See Recently adopted accounting pronouncements below Earnings per share (EPS) Basic EPS excludes dilution from common stock equivalents and reflects income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is based upon the weighted average number of outstanding shares of common stock and dilutive common stock equivalents in the period. Common stock equivalents arise from dilutive stock appreciation rights and restricted stock units and are computed using the treasury stock method. Anti-dilutive common stock equivalents are excluded from diluted EPS. The weighted average anti‑dilutive common stock equivalents that could potentially dilute basic EPS in the future, but were not included in the weighted average share calculation, consisted of the following: Years Ended December 30, December 31, (shares in thousands) 2018 2017 Anti-dilutive common stock equivalents 199 278 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 and 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 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 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 during 2017 increased $1.0 million to exclude the changes in restricted cash, and this amount is reflected in our consolidated cash flow statement. In February 2018, the FASB issued ASU No. 2018-02, “ Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ” ASU 2018-02 allows for reclassification of stranded tax effects resulting from the Tax Act from accumulated other comprehensive income to retained earnings. Consequently, the standard eliminates the stranded tax effects resulting from the Tax Act and will improve the usefulness of information reported to financial statement users. However, because the standard only relates to the reclassification of the income tax effects of the Tax Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. This standard also requires certain disclosures about the stranded tax effects. It is effective for us for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. During the fourth quarter of 2018, we elected to early adopt this standard. As a result of the adoption, we reclassified $98.4 million of stranded tax effects to accumulated deficit. These previously had been recorded in accumulated other comprehensive income. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) ” and it replaces the existing guidance in Topic 840, “ Leases. ” Topic 842 requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use (ROU) assets. The new lease standard does not substantially change lessor accounting. Topic 842 has been amended by ASUs No. 2018-01, 2018-10, 2018-11 and 2018-20, which provide further guidance and clarification on specific items within the previously issued update. It is effective for us for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. We plan to adopt ASC 842 in our next fiscal year beginning December 31, 2018, using the modified retrospective approach, and to apply the new standard to existing leases on the effective date of the standard. 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 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 consolidated statements of operations. Upon adoption, we expect to recognize additional operating lease liabilities of approximately $61.0 million with corresponding ROU assets of approximately $52.0 million. The new standard provides a number of optional practical expedients in transition. We expect to elect the “package of practical expedients”, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The new standard also provides practical expedients for our ongoing accounting. We expect to elect the short-term lease recognition exemption for all leases that qualify. For those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases in transition. We also expect to elect the practical expedient allowing us combine lease and non-lease components for our real estate leases. In June 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ” ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the expected credit losses during the period. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In 2018, the FASB issued additional guidance update 2018-19 which clarifies the scope of the guidance was not meant to include receivables arising from operating leases. ASU 2016-13 and the subsequent update are effective for us for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted for interim or annual reporting periods beginning after December 15, 2018. We are currently in the process of evaluating the impact of the adoption on our consolidated financial statements. In August 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 2018-13 adds, removes and modifies various disclosure requirements within Topi |
REVENUES
REVENUES | 12 Months Ended |
Dec. 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 historical 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 less than $0.1 million for the year ended December 30, 2018 compared to applying Topic 605. Revenue Recognition Revenues are recognized when control of the promised goods is transferred to our customers or services are performed, 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 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, we use 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 revenue basis. When revenues are earned through a reseller of a product or participating in an exchange where control over the service provided is limited, revenues are presented net of the costs of the arrangement. 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 each subscriber’s 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 been 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, considering 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 stand-alone selling price. We generally determine stand-alone 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. 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. |
INVESTMENTS IN UNCONSOLIDATED C
INVESTMENTS IN UNCONSOLIDATED COMPANIES | 12 Months Ended |
Dec. 30, 2018 | |
INVESTMENTS IN UNCONSOLIDATED COMPANIES | |
INVESTMENTS IN UNCONSOLIDATED COMPANIES | 3. 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 2018. During 2018, we also received distributions totaling approximately $2.8 million from CareerBuilder, which relate to the return of earnings. Our 3.0% ownership interest in CareerBuilder was accounted for under the cost method (measurement alternative under ASU 2016-01). On June 19, 2017, we along with the then existing ownership group of CareerBuilder announced that we had entered into an agreement to sell a majority of the collective ownership interest in CareerBuilder to an investor group led by investment funds managed by affiliates of Apollo Management Group along with the Ontario Teachers' Pension Plan Board. The transaction closed on July 31, 2017. We received $73.9 million from the closing of the transaction, consisting of approximately $7.3 million in normal distributions and $66.6 million of gross proceeds. After the close of the transaction, our ownership interest in CareerBuilder was reduced to approximately 3.0% from 15.0%. We recorded a total of $168.2 million in pre-tax impairment charges on our equity investment in CareerBuilder during 2017 related to this transaction. Write-downs During 2018 and 2017, excluding the CareerBuilder impairments noted above, we recorded write‑downs of zero and $2.4 million, respectively. The write-downs in 2017 were related to various investments and were recorded in impairments related to equity investments in the consolidated statement of operations. Other Three of our wholly-owned subsidiaries have a combined 27.0% general partnership interest in Ponderay Newsprint Company (“Ponderay”). The carrying value of the investment in Ponderay is zero as a result of a write off in 2014 and accumulative losses exceeding our carrying value. No future income or losses from Ponderay will be recorded until our carrying value on our balance sheet is restored through future earnings by Ponderay. We have a 49.5% ownership interest in The Seattle Times Company (“STC”). The carrying value of our investment in STC is zero as a result of accumulative losses in previous years exceeding our carrying value. No future income or losses from STC will be recorded until our carrying value on our balance sheet is restored through future earnings by STC. We also incur expenses related to the purchase of products and services provided by these companies. We purchased some of our newsprint supply from Ponderay through a third-party intermediary and in 2017, we incurred wholesale fees from CareerBuilder for the uploading and hosting of online advertising on behalf of our media companies’ advertisers. We recorded these expenses for CareerBuilder as a reduction to the associated digital classified advertising revenues and expenses related to Ponderay were recorded in newsprint expenses. The following table summarizes expenses incurred for products and services provided by unconsolidated companies: Years Ended December 30, December 31, (in thousands) 2018 2017 CareerBuilder, LLC $ — $ 354 Ponderay (general partnership) 7,975 9,162 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 30, 2018 | |
INTANGIBLE ASSETS AND GOODWILL | |
INTANGIBLE ASSETS AND GOODWILL | 4. INTANGIBLE ASSETS AND GOODWILL Changes in identifiable intangible assets and goodwill consisted of the following: December 31, Disposition Impairment Amortization December 30, (in thousands) 2017 Additions Adjustment Charges Expense 2018 Intangible assets subject to amortization $ 839,284 $ — $ (948) $ — $ — $ 838,336 Accumulated amortization (761,013) — 948 — (47,660) (807,725) 78,271 — — — (47,660) 30,611 Mastheads 149,951 — — (37,215) — 112,736 Goodwill 705,174 — — — — 705,174 Total $ 933,396 $ — $ — $ (37,215) $ (47,660) $ 848,521 December 25, Disposition Impairment Amortization December 31, (in thousands) 2016 Additions Adjustment Charges Expense 2017 Intangible assets subject to amortization $ 839,273 $ 11 $ — $ — $ — $ 839,284 Accumulated amortization (711,723) — — — (49,290) (761,013) 127,550 11 — — (49,290) 78,271 Mastheads 171,436 — — (21,485) — 149,951 Goodwill 705,174 — — — — 705,174 Total $ 1,004,160 $ 11 $ — $ (21,485) $ (49,290) $ 933,396 As discussed more fully in Note 1, based on our interim and annual impairment testing of intangible newspaper mastheads we recorded a total of $37.2 million in masthead impairments during 2018. These impairment charges were recorded in other asset write-downs line item on our consolidated statements of operations. Based on our annual impairment testing of goodwill and intangible newspaper mastheads at December 31, 2017, we recorded $21.5 million in masthead impairments, which were recorded in the goodwill impairment and other asset write-downs line item on our consolidated statements of operations. We had no goodwill impairments as a result of our annual impairment testing as of December 31, 2017. Accumulated changes in indefinite lived intangible assets and goodwill as of December 30, 2018, and December 31, 2017, consisted of the following: December 30, 2018 December 31, 2017 Original Gross Accumulated Carrying Original Gross Accumulated Carrying (in thousands) Amount Impairment Amount Amount Impairment Amount Mastheads $ 684,500 $ (571,764) $ 112,736 $ 684,500 $ (534,549) $ 149,951 Goodwill 3,571,111 (2,865,937) 705,174 3,571,111 (2,865,937) 705,174 Total $ 4,255,611 $ (3,437,701) $ 817,910 $ 4,255,611 $ (3,400,486) $ 855,125 Amortization expense was $47.7 million and $49.3 million in 2018 and 2017, respectively. The estimated amortization expense for the five succeeding fiscal years is as follows: Amortization Expense Year (in thousands) 2019 $ 24,095 2020 803 2021 680 2022 655 2023 667 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 30, 2018 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 5. LONG‑TERM DEBT All of our long‑term debt is in fixed rate obligations. As of December 30, 2018, and December 31, 2017, our outstanding long‑term debt consisted of senior secured notes, unsecured notes, and loans. They are stated net of unamortized debt issuance costs and unamortized discounts, if applicable, totaling $109.2 million and $23.7 million as of December 30, 2018, and December 31, 2017, respectively. The unamortized discounts include; fair value adjustments on unsecured debt acquired in 2006, as well as the Junior Term Loans and the 2026 Notes that included original issue discounts from the 2018 debt refinancing discussed below. The face values of the notes, as well as the carrying values are as follows: Face Value at Carrying Value December 30, December 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 304,700 287,249 — 7.795% tranche A junior term loan due in 2030 157,083 123,213 — 6.875% senior secured junior lien notes due in 2031 193,466 141,447 — 7.150% debentures due in 2027 7,105 6,824 85,262 6.875% debentures due in 2029 82,764 78,962 262,311 Long-term debt $ 745,118 $ 637,695 $ 781,392 Less current portion 4,575 4,312 74,140 Total long-term debt, net of current $ 740,543 $ 633,383 $ 707,252 Debt Maturities, Repurchases, Redemptions and Extinguishment of Debt During 2018 and 2017, we redeemed or repurchased our outstanding debt as follows: Year Ended December 30, December 31, 2018 2017 (in thousands) Face Value Face Value 9.000% senior secured notes due in 2022 $ 439,630 $ 51,785 5.750% notes due in 2017 — 16,865 9.000% senior secured notes due in 2026 5,300 — Total notes matured, repurchased or redeemed $ 444,930 $ 68,650 During 2018, we recorded a net gain on the extinguishment of debt of $30.6 million as a result of the following transactions that occurred 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 2022 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, the “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 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 a $32.3 million write-off of the unamortized discounts on the Debentures, unamortized debt issuance costs on the 2022 Notes, and premiums paid on the 2022 Notes for a net gain of $30.6 million. 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 2018. During 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, (iii) repurchased $20.0 million of the 2022 Notes through a privately negotiated transaction, and (iv) redeemed $5.3 million of our 2026 Notes, which was previously announced in October 2018. We recorded any applicable premiums that were paid and wrote off the associated debt issuance costs on the above transactions. During December 2018, we entered into an indenture (“2031 Notes Indenture”) in the amount of $193.5 million aggregate principal amount of 6.875% Senior Secured Junior Lien Notes due 2031 (“2031 Notes”). The 2031 Notes were issued in exchange for an equal principal amount of Tranche B Junior Term Loans (as defined below). These 2031 Notes have substantially the same terms as the Tranche B Junior Term Loan. As a result of this transaction, the Tranche B Junior Term Loan has been fully extinguished. During 2017, we recorded a loss on the extinguishment of debt of $2.7 million as a result of the following transactions. During 2017, we (i) retired $16.9 million of debt that matured on September 1, 2017; (ii) repurchased a total $50.0 million of our 2022 Notes through privately negotiated transactions; and (iii) redeemed $1.8 million of the 2022 Notes through our offer to purchase or privately negotiated transactions. 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 the 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 December 30, 2018, under the ABL Credit Agreement we had $61.0 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 December 30, 2018, we had a $28.7 million standby letters of credit secured under the LOC Facility. We are required to provide cash collateral equal to 100% of the aggregate undrawn stated amount of each outstanding letter of credit. Cash collateral associated with the LOC Facility is classified in our consolidated balance sheets in other assets. The amounts of standby letters of credit declined to $26.7 million in January 2019. 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. 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). As of December 30, 2018, we determined the excess cash flow due was $4.3 million which is classified as current portion of long-term debt on the consolidated balance sheet. 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 and 2031 Notes 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 provided 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 had a maturity date of 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. As noted above, in December 2018 Chatham elected to exchange the full amount of $193.5 million of the Tranche B Junior Term Loans for the 2031 Notes. As such the Tranche B Junior Term Loans were fully extinguished at the end of 2018. On July 16, 2018, 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 specified prices that decline over time, plus accrued and unpaid interest, if any, in the case of Tranche A Junior Term Loans. We have the right to prepay notes under the 2031 Notes, in whole or in part, at any time, at a price equal to 100% of the principal amount thereof, plus a “make-whole” premium and accrued and unpaid interest, if any. Amounts prepaid may not be reborrowed. Tranche A Junior Term Loans and the 2031 Notes bear interest at a rate per annum equal to 7.795% and 6.875%, respectively. Interest on the loans and notes 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 and the 2031 Notes 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 and 2031 Notes 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 and the 2031 Notes 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 December 30, 2018. Maturities The following table presents the approximate annual maturities of outstanding long‑term debt as of December 30, 2018, based upon our required payments, for the next five years and thereafter: Payments Year (in thousands) 2019 $ 4,575 2020 — 2021 — 2022 — 2023 — Thereafter 740,543 Debt principal $ 745,118 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 30, 2018 | |
INCOME TAXES | |
INCOME TAXES | 6. INCOME TAXES Income tax provision (benefit) consisted of: Years Ended December 30, December 31, (in thousands) 2018 2017 Current: Federal $ 5,546 $ 15,042 State (429) 4,017 Deferred: Federal (961) 80,293 State (6,326) 6,107 Income tax provision (benefit) $ (2,170) $ 105,459 As of December 30, 2018, we completed our accounting for the tax effects of enactment of the Tax Act and noted no significant adjustments were required. During 2018 and 2017, we re-measured certain deferred tax assets and liabilities based on the rates at which we expect them to reverse in the future. The effective tax rate expense (benefit) and the statutory federal income tax rate are reconciled as follows: Years Ended December 30, December 31, 2018 2017 Statutory rate (21.0) % (35.0) % State taxes, net of federal benefit (4.3) 2.4 Changes in estimates 0.8 — Changes in unrecognized tax benefits (4.3) 0.6 Other 2.8 0.3 Impact of valuation allowance 23.0 80.0 Impact of tax rate changes — (2.4) Stock compensation 0.3 0.6 Effective tax rate (2.7) % 46.5 % The components of deferred tax assets and liabilities consisted of the following: December 30, December 31, (in thousands) 2018 2017 Deferred tax assets: Compensation benefits $ 157,715 $ 144,084 State taxes 1,909 2,861 State loss carryovers 4,006 4,338 Investments in unconsolidated subsidiaries 4,242 4,981 Deferred interest expense 15,342 — Other 3,407 2,945 Total deferred tax assets 186,621 159,209 Valuation allowance (143,764) (109,718) Net deferred tax assets 42,857 49,491 Deferred tax liabilities: Depreciation and amortization 45,239 68,665 Debt discount 17,876 4,512 Deferred gain on debt — 4,376 Other 517 — Total deferred tax liabilities 63,632 77,553 Net deferred tax assets (liabilities) $ (20,775) $ (28,062) The valuation allowance increased by $34.0 million and $105.8 million in 2018 and 2017, respectively. The timing of recording or releasing a valuation allowance requires significant judgment. A valuation allowance is required when it is more-likely-than-not that all or a portion of deferred tax assets may not be realized. Establishment and removal of a valuation allowance requires us to consider all positive and negative evidence and to make a judgmental decision regarding the timing and amount of valuation allowance required as of a reporting date. The assessment takes into account expectations of future taxable income or loss, available tax planning strategies and the reversal of temporary differences. The development of these expectations involves the use of estimates such as operating profitability. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. We performed an assessment of the deferred tax assets during the third and fourth quarters of 2017, weighing the positive and negative evidence as outlined in ASC 740, Income Taxes . As we incurred three years of cumulative pre-tax losses, such objective negative evidence limits our ability to give significant weight to other positive subjective evidence, such as projections for future growth and profitability. Accordingly, we recorded a valuation allowance charge of $192.3 million for 2017, which was recorded in income tax (benefit) expense on our consolidated statements of operations. During the quarter ended December 31, 2017, as a result of the Tax Act, principally the change to allow an indefinite carryforward period of net operating losses, we reassessed our analysis and decreased our related valuation allowance by $53.6 million. As of December 31, 2017, our valuation allowance against a majority of our net deferred tax assets was $109.7 million. As of December 30, 2018, we performed a review of our deferred tax assets and liabilities as well as the corresponding valuation allowance amounts. Based on this review, we recorded an additional $34.0 million of valuation allowance due to changes to the deferred tax balances related to mastheads, tax amortizable goodwill and pension. Of this amount, $20.4 million was included as income tax expense and $13.7 million was recorded as an offset to other comprehensive income for changes related to our pension deferred tax asset We will continue to maintain a valuation allowance against our deferred tax assets until it is more-likely-than-not that these assets will be realized in the future under generally accepted accounting standards. If sufficient positive evidence, such as three-year cumulative pre-tax income, arises in the future that provides an indication that all or a portion of the deferred tax assets meet the more-likely-than-not standard, the valuation allowance may be reversed, in whole or in part, in the period that such determination is made. As of December 30, 2018, we have net operating loss carryforwards in various states totaling approximately $281.3 million, which expire in various years between 2024 and 2038 if not used. We also have state tax credits of $0.5 million which expire between 2025 and 2028 if not utilized. As of December 30, 2018, we had approximately $17.1 million of uncertain tax positions consisting of approximately $13.8 million in gross unrecognized tax benefits (primarily state tax positions before the offsetting effect of federal income tax) and $3.3 million in gross accrued interest and penalties. If recognized, approximately $6.9 million of the net unrecognized tax benefits would impact the effective tax rate, with the remainder impacting other accounts, primarily deferred taxes. It is reasonably possible that up to $1.9 million reduction of unrecognized tax benefits and related interest may occur within the next 12 months as a result of the expiration of statutes of limitations. We record interest on unrecognized tax benefits as a component of interest expense, while penalties are recorded as part of income tax expense. Related to the unrecognized tax benefits noted below, we recorded interest expense (benefit), of ($0.6) million and $1.1 million for 2018 and 2017, respectively. We recorded penalty expense (benefit) of ($0.3) million and $0.3 million during 2018 and 2017, respectively. Accrued interest and penalties at December 30, 2018 and December 31, 2017 were approximately $3.3 million and $4.3 million, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits consists of the following: Years Ended December 30, December 31, (in thousands) 2018 2017 Balance at beginning of fiscal year $ 20,764 $ 16,477 Increases based on tax positions in prior year 84 3,299 Decreases based on tax positions in prior year (4,261) — Increases based on tax positions in current year 1,124 1,642 Settlements (511) (164) Lapse of statute of limitations (3,378) (490) Balance at end of fiscal year $ 13,822 $ 20,764 As of December 30, 2018, the following tax years and related taxing jurisdictions were open: Open Years Under Taxing Jurisdiction Tax Year Exam Federal 2015-2018 — California 2014-2018 — Other States 2006-2018 — |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 30, 2018 | |
EMPLOYEE BENEFITS | |
EMPLOYEE BENEFITS | 7. EMPLOYEE BENEFITS We maintain a qualified defined benefit pension plan (“Pension Plan”), which covers certain eligible employees. Benefits are based on years of service that continue to count toward early retirement calculations and vesting previously earned. No new participants may enter the Pension Plan and no further benefits will accrue. We also have a limited number of supplemental retirement plans to provide certain key employees and retirees with additional retirement benefits. These plans are funded on a pay‑as‑you‑go basis and the accrued pension obligation is largely included in other long‑term obligations. We paid $8.9 million and $8.7 million in 2018 and 2017, respectively, for these plans. We also provide or subsidize certain life insurance benefits for employees. The following tables provide reconciliations of the pension and post‑ retirement benefit plans’ benefit obligations, fair value of assets and funded status as of December 30, 2018, and December 31, 2017: Pension Benefits Post-retirement Benefits (in thousands) 2018 2017 2018 2017 Change in Benefit Obligation Benefit obligation, beginning of year $ 2,080,013 $ 1,941,907 $ 7,625 $ 7,403 Interest cost 79,154 85,468 256 271 Plan participants’ contributions — — 10 12 Actuarial (gain)/loss (126,540) 152,353 (417) 707 Gross benefits paid (111,640) (99,715) (647) (768) Benefit obligation, end of year $ 1,920,987 $ 2,080,013 $ 6,827 $ 7,625 Pension Benefits Post-retirement Benefits (in thousands) 2018 2017 2018 2017 Change in Plan Assets Fair value of plan assets, beginning of year $ 1,477,926 $ 1,335,435 $ — $ — Actual return on plan assets (115,192) 233,495 — — Employer contribution 8,885 8,711 637 756 Plan participants’ contributions — — 10 12 Gross benefits paid (111,640) (99,715) (647) (768) Fair value of plan assets, end of year $ 1,259,979 $ 1,477,926 $ — $ — Pension Benefits Post-retirement Benefits (in thousands) 2018 2017 2018 2017 Funded Status Fair value of plan assets $ 1,259,979 $ 1,477,926 $ — $ — Benefit obligations (1,920,987) (2,080,013) (6,827) (7,625) Funded status and amount recognized, end of year $ (661,008) $ (602,087) $ (6,827) $ (7,625) Amounts recognized in the consolidated balance sheets at December 30, 2018, and December 31, 2017, consist of: Pension Benefits Post-retirement Benefits (in thousands) 2018 2017 2018 2017 Current liability $ (11,510) $ (8,941) $ (1,015) $ (1,008) Noncurrent liability (649,498) (593,146) (5,812) (6,617) $ (661,008) $ (602,087) $ (6,827) $ (7,625) Amounts recognized in accumulated other comprehensive income for the years ended December 30, 2018, and December 31, 2017, consist of: Pension Benefits Post-retirement Benefits (in thousands) 2018 2017 2018 2017 Net actuarial loss/(gain) $ 811,063 $ 757,096 $ (7,334) $ (7,820) Prior service cost/(credit) — — (4,456) (6,534) $ 811,063 $ 757,096 $ (11,790) $ (14,354) The elements of retirement and post‑retirement costs are as follows: Years Ended December 30, December 31, (in thousands) 2018 2017 Pension plans: Interest Cost $ 79,154 $ 85,468 Expected return on plan assets (90,495) (89,569) Actuarial loss 25,181 20,335 Net pension expense 13,840 16,234 Net post-retirement benefit credit (2,726) (2,830) Net retirement expenses $ 11,114 $ 13,404 Our discount rate was determined by matching a portfolio of long‑term, non‑callable, high-quality bonds to the plans’ projected cash flows. Weighted average assumptions used for valuing benefit obligations were: Pension Benefit Post-retirement Obligations Obligations 2018 2017 2018 2017 Discount rate 4.42 % 3.91 % 4.15 % 3.60 % Weighted average assumptions used in calculating expense: Pension Benefit Expense Post-retirement Expense December 30, December 31, December 30, December 31, 2018 2017 2018 2017 Expected long-term return on plan assets 7.75 % 7.75 % N/A N/A Discount rate 3.91 % 4.52 % 3.60 % 3.95 % Contributions and Cash Flows We did not have a required cash minimum contribution to the Pension Plan in 2018 or 2017 and made no voluntary cash contributions. We expect to have a required pension contribution of approximately $3.0 million under the Employee Retirement Income Security Act in fiscal year 2019. Expected benefit payments to retirees under our retirement and post‑retirement plans over the next 10 years are summarized below: Retirement Post-retirement (in thousands) Plans (1) Plans 2019 $ 111,478 $ 1,036 2020 112,450 925 2021 117,079 822 2022 118,319 736 2023 120,408 656 2024-2028 621,158 2,241 Total $ 1,200,892 $ 6,416 (1) Largely to be paid from the qualified defined benefit pension plan. Pension Plan Assets Our investment policies are designed to maximize Pension Plan returns within reasonable and prudent levels of risk, with an investment horizon of greater than 10 years so that interim investment returns and fluctuations are viewed with appropriate perspective. The policy also aims to maintain sufficient liquid assets to provide for the payment of retirement benefits and plan expenses, hence, small portions of the equity and debt investments are held in marketable mutual funds. Our policy seeks to provide an appropriate level of diversification of assets, as reflected in its target allocations, as well as limits placed on concentrations of equities in specific sectors or industries. It uses a mix of active managers and passive index funds and a mix of separate accounts, mutual funds, common collective trusts and other investment vehicles. Our assumed long‑term return on assets was developed using a weighted average return based upon the Pension Plan’s portfolio of assets and expected returns for each asset class, considering projected inflation, interest rates and market returns. The assumed return was also reviewed in light of historical and recent returns in total and by asset class. As of December 30, 2018, and December 31, 2017, the target allocations for the Pension Plan assets were 61% equity securities, 33% debt securities and 6% real estate securities. The table below summarizes the Pension Plan’s financial instruments that are carried at fair value on a recurring basis by the fair value hierarchy levels discussed above, as of the year ended December 30, 2018 2018 Plan Assets (in thousands) Level 1 Level 2 Level 3 NAV Total Cash and cash equivalents $ 9,366 $ — $ — $ — $ 9,366 Mutual funds 139,978 — — — 139,978 Common collective trusts — — — 1,045,628 1,045,628 Real estate — — 55,398 — 55,398 Private equity funds — — 9,609 — 9,609 Total $ 149,344 $ — $ 65,007 $ 1,045,628 $ 1,259,979 The table below summarizes changes in the fair value of the Pension Plan’s Level 3 investment assets held for the year ended December 30, 2018: (in thousands) Real Estate Private Equity Total Beginning Balance, December 31, 2017 $ 58,050 $ 9,509 $ 67,559 Realized gains (losses), net 4,528 3 4,531 Transfer in or out of level 3 (8,601) — (8,601) Unrealized gains (losses), net 1,421 97 1,518 Ending Balance, December 30, 2018 $ 55,398 $ 9,609 $ 65,007 The table below summarizes the Pension Plan’s financial instruments that are carried at fair value on a recurring basis by the fair value hierarchy levels discussed above, as of the year ended December 31, 2017: 2017 Plan Assets (in thousands) Level 1 Level 2 Level 3 NAV Total Cash and cash equivalents $ 8,498 $ — $ — $ — $ 8,498 Mutual funds 478,565 — — — 478,565 Common collective trusts — — — 923,304 923,304 Real estate — — 58,050 — 58,050 Private equity funds — — 9,509 — 9,509 Total $ 487,063 $ — $ 67,559 $ 923,304 $ 1,477,926 The table below summarizes changes in the fair value of the Pension Plan’s Level 3 investment assets held for the year ended December 31, 2017: (in thousands) Real Estate Private Equity Total Beginning Balance, December 25, 2016 $ 57,531 $ 8,149 $ 65,680 Realized gains (losses), net 4,632 — 4,632 Transfer in or out of level 3 (4,614) — (4,614) Unrealized gains (losses), net 501 1,360 1,861 Ending Balance, December 31, 2017 $ 58,050 $ 9,509 $ 67,559 Cash and cash equivalents: The carrying value of these items approximates fair value. Mutual funds: These investments are publicly traded investments, which are valued using the Net Asset Value (NAV). The NAV of the mutual funds is a quoted price in an active market. The NAV is determined once a day after the closing of the exchange based upon the underlying assets in the fund, less the fund’s liabilities, expressed on a per‑share basis. Common collective trusts: These investments are valued based on the NAV of the underlying investments and are provided by the fund issuers. NAV for these funds represent the quoted price in a non‑market environment. There are no restrictions on participants’ ability to withdraw funds from the common collective trusts. The attributes relating to the nature and risk of such investments are as follows: (in thousands) 2018 2017 Redemption Frequency (if Currently Eligible) Redemption Notice Period U.S equity funds (1) $ 296,135 $ 353,555 Daily None International equity funds (2) 311,119 569,749 Daily - Monthly None Emerging markets equity funds (3) 153,927 — Daily None - 5-Day Fixed income funds (4) 284,447 — Daily - Semi-Monthly 2-Day - 5-Day Total $ 1,045,628 $ 923,304 ________________ (1) U.S. equity fund strategies - Investments in U.S. equities are defined as commitments to U.S. dollar-denominated, publicly traded common stocks of U.S. domiciled companies and securities convertible into common stock. The aggregate U.S. equity portfolio is expected to exhibit characteristics comparable to, but not necessarily equal to, that of the Russell 3000 Index. (2) International equity funds strategies - Investments in international developed markets equities are defined as commitments to publicly traded common stocks and securities convertible into common stock issued by companies primarily domiciled in countries outside of the U.S. (3) Emerging markets equity fund strategies - Investments in emerging equities may include commitments to publicly traded common stocks and securities convertible into common stock issued by companies domiciled in countries considered emerging by one or more benchmark providers. (4) Fixed income fund strategies - Fixed income investments may include debt instruments issued by both U.S. and non-U.S. governments, agencies, “quasi Government” agencies, corporations, and any other public or private regulated debt security. Real estate: In 2016 and 2011, we contributed certain of our real property to our Pension Plan, and we entered into leaseback arrangements for the contributed facilities. This contribution was measured at fair value using Level 3 inputs, which primarily consisted of expected cash flows and discount rate that we estimated market participants would seek for bearing the risk associated with such assets. The accounting treatment for both contributions is described below. The contributions and leasebacks of these properties are treated as financing transactions and, accordingly, we continue to depreciate the carrying value of the properties in our financial statements. No gain or loss will be recognized on the contributions of any property until the sale of the property by the Pension Plan. At the time of our contributions, our pension obligation was reduced and our financing obligations were recorded equal to the fair market value of the properties. The financing obligations are reduced by a portion of the lease payments made to the Pension Plan each month and increased for imputed interest expense on the obligations to the extent imputed interest exceeds monthly payments. Certain properties from the 2011 contributions have been sold by the Pension Plan and others may be sold by the Pension Plan in the future. In May 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 consolidated statement of operations in 2018. Private equity funds: Private equity funds represent investments in limited partnerships, which invest in start‑up or other private companies. Fair value was estimated based on our proportionate share of the capital in the private equity fund and was measured using Level 3 inputs. 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 during 2018 was $2.5 million and is recorded in our compensation line item of our consolidated statement of operations. Also, during the fourth quarter of 2017, we terminated the 401(k) plan supplemental contribution that was tied to performance. |
CASH FLOW INFORMATION
CASH FLOW INFORMATION | 12 Months Ended |
Dec. 30, 2018 | |
CASH FLOW INFORMATION | |
CASH FLOW INFORMATION | 8. CASH FLOW INFORMATION Reconciliation of cash, cash equivalents and restricted cash as reporting in the consolidated balance sheets to the total of the same such amounts show above: December 30, December 31, (in thousands) 2018 2017 Cash and equivalents $ 21,906 $ 99,387 Restricted cash included in other assets (1) 28,649 31,967 Total cash, cash equivalents and restricted cash $ 50,555 $ 131,354 (1) Restricted cash balances are certificates of deposits or time 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: Year Ended December 30, December 31, (in thousands) 2018 2017 Interest paid (net of amount capitalized) $ 43,313 $ 68,861 Income taxes paid (net of refunds) 13,935 12,437 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) — Other non-cash investing and financing activities related to pension plan transactions consists of the sale of one of the properties by the Pension Plan in 2018, described further in Note 7. During 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 2031 Notes. 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. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 30, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 9. COMMITMENTS AND CONTINGENCIES We have certain other obligations for various contractual agreements that secure future rights to goods and services to be used in the normal course of operations. These include purchase commitments for printing outsource agreements, planned capital expenditures, lease commitments and self‑insurance obligations. The following table summarizes our minimum annual contractual obligations as of December 30, 2018: Payments Due By Period (in thousands) 2019 2020 2021 2022 2023 Thereafter Total Purchase obligations (1) $ 35,371 $ 15,270 $ 9,742 $ 4,487 $ 3,394 $ — $ 68,264 Operating leases (2) Lease obligations 16,408 11,921 9,797 10,178 10,160 31,139 89,603 Sublease income (4,044) (1,306) (379) (334) (232) — (6,295) Net lease obligation 12,364 10,615 9,418 9,844 9,928 31,139 83,308 Workers’ compensation obligations (3) 2,340 1,507 1,118 864 696 5,761 12,286 Total $ 50,075 $ 27,392 $ 20,278 $ 15,195 $ 14,018 $ 36,900 $ 163,858 (1) Represents our purchase obligations primarily related to printing outsource agreements and capital expenditures for PP&E expiring at various dates through 2023. (2) Represents minimum rental commitments under operating leases with non‑cancelable terms in excess of one year and sublease income from leased space with non-cancelable terms in excess of one year. We rent certain facilities and equipment under operating leases expiring at various dates through 2023. Total rental expense, included in other operating expenses, amounted to $14.3 million and $13.4 million in 2018 and 2017, respectively. Most of the leases provide that we pay taxes, maintenance, insurance and certain other operating expenses applicable to the leased premises in addition to the minimum monthly payments. Some of the operating leases have built in escalation clauses. We sublease office space to other companies under non-cancellable agreements that expire at various dates through 2023. Sublease income from operating leases totaled $5.0 million and $4.8 million in 2018 and 2017, respectively. (3) We retain the risk for workers’ compensation resulting from uninsured deductibles per accident or occurrence that are subject to annual aggregate limits. Losses up to the deductible amounts are accrued based upon known claims incurred and an estimate of claims incurred but not reported. For the year ended December 30, 2018, we compiled our historical data pertaining to the self‑insurance experiences and actuarially developed the ultimate loss associated with our self‑insurance programs for workers’ compensation liability. We believe that the actuarial valuation provides the best estimate of the ultimate losses to be expected under these programs. At December 30, 2018, the undiscounted ultimate losses of all our self‑insurance reserves related to our workers’ compensation liabilities were $12.3 million, net of estimated insurance recoveries of approximately $1.9 million. At December 31, 2017, the undiscounted ultimate losses of all our self-insurance reserves related to workers’ compensation liabilities were $13.0 million, net of estimated insurance recoveries of approximately $2.2 million. We discount the net amounts above to present value using an approximate risk‑free rate over the average life of our insurance claims. For the years ended December 30, 2018, and December 31, 2017, the discount rate used was 3.1% and 2.3%, respectively. The present value of all self‑insurance reserves, net of estimated insurance recoveries, for our workers’ compensation liability recorded at December 30, 2018, and December 31, 2017, was $10.7 million and $12.1 million, respectively. Legal Proceedings and other contingent claims In December 2008, carriers of The Fresno Bee filed a class action lawsuit against us and The Fresno Bee in the Superior Court of the State of California in Fresno County captioned Becerra v. The McClatchy Company (“Fresno case”) alleging that the carriers were misclassified as independent contractors and seeking mileage reimbursement. In February 2009, a substantially similar lawsuit, Sawin v. The McClatchy Company, involving similar allegations was filed by carriers of The Sacramento Bee (“Sacramento case”) in the Superior Court of the State of California in Sacramento County. The class consists of roughly 5,000 carriers in the Sacramento case and 3,500 carriers in the Fresno case. The plaintiffs in both cases are seeking unspecified restitution for mileage reimbursement. With respect to the Sacramento case, in September 2013, all wage and hour claims were dismissed, and the only remaining claim is an equitable claim for mileage reimbursement under the California Civil Code. In the Fresno case, in March 2014, all wage and hour claims were dismissed, and the only remaining claim is an equitable claim for mileage reimbursement under the California Civil Code. The court in the Sacramento case trifurcated the trial into three separate phases: independent contractor status, liability and restitution. On September 22, 2014, the court in the Sacramento case issued a tentative decision following the first phase, finding that the carriers that contracted directly with The Sacramento Bee during the period from February 2005 to July 2009 were misclassified as independent contractors. We objected to the tentative decision, but the court ultimately adopted it as final. In June 2016, The McClatchy Company was dismissed from the lawsuit, leaving The Sacramento Bee as the sole defendant. On August 30, 2017, the court issued a statement of decision ruling that the court would not hold a phase two trial but would, instead, assume liability from the evidence previously submitted and from the independent contractor agreements. We objected to this decision, but the court adopted it as final. The third phase has been scheduled to begin on May 20, 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. We continue to defend these actions vigorously and expect that we will ultimately prevail. As a result, we have not established a reserve in connection with the cases. While we believe that a material impact on our consolidated financial position, results of operations or cash flows from these claims is unlikely, given the inherent uncertainty of litigation, a possibility exists that future adverse rulings or unfavorable developments could result in future charges that could have a material impact. We have and will continue to periodically reexamine our estimates of probable liabilities and any associated expenses and make appropriate adjustments to such estimates based on experience and developments in litigation. Other than the cases described above, we are subject to a variety of legal proceedings (including libel, employment, wage and hour, independent contractor and other legal actions) and governmental proceedings (including environmental matters) that arise from time to time in the ordinary course of our business. We are unable to estimate the amount or range of reasonably possible losses for these matters. However, we currently believe, after reviewing such actions with counsel, that the expected outcome of pending actions will not have a material effect on our consolidated financial statements. No material amounts for any losses from litigation that may ultimately occur have been recorded in the consolidated financial statements as we believe that any such losses are not probable. We have certain indemnification obligations related to the sale of assets including, but not limited to, insurance claims and multi‑employer pension plans of disposed newspaper operations. We believe the remaining obligations related to disposed assets will not be material to our financial position, results of operations or cash flows. As of December 30, 2018, we had $28.7 million of standby letters of credit secured under the LOC Facility. In January 2019, our standby letters of credit secured under the LOC Facility was reduced by $2.0 million to $26.7 million. |
COMMON STOCK AND STOCK PLANS
COMMON STOCK AND STOCK PLANS | 12 Months Ended |
Dec. 30, 2018 | |
COMMON STOCK AND STOCK PLANS | |
STOCK PLANS | 10. COMMON STOCK AND STOCK PLANS Common Stock We have two classes of stock; Class A and Class B Common Stock. Both classes of stock participate equally in dividends. Holders of Class B are entitled to one vote per share and to elect as a class 75% of the Board of Directors, rounded down to the nearest whole number. Holders of Class A Common Stock are entitled to one-tenth of a vote per share and to elect as a class 25% of the Board of Directors, rounded up to the nearest whole number. Class B Common Stock is convertible at the option of the holder into Class A Common Stock on a share‑for‑share basis. The holders of shares of Class B Common Stock are parties to an agreement, the intent of which is to preserve control of the Company by the McClatchy family. Under the terms of the agreement, the Class B shareholders have agreed to restrict the transfer of any shares of Class B Common Stock to one or more “Permitted Transferees,” subject to certain exceptions. A “Permitted Transferee” is any of our current holders of shares of Class B Common Stock; any lineal descendant of Charles K. McClatchy (1858 to 1936); or a trust for the exclusive benefit of, or in which all of the remainder beneficial interests are owned by, one or more lineal descendants of Charles K. McClatchy. Generally, Class B shares can be converted into shares of Class A Common Stock and then transferred freely (unless, following conversion, the outstanding shares of Class B Common Stock would constitute less than 25% of the total number of all our outstanding shares of common stock). In the event that a Class B shareholder attempts to transfer any shares of Class B Common Stock in violation of the agreement, or upon the happening of certain other events enumerated in the agreement as “Option Events,” each of the remaining Class B shareholders has an option to purchase a percentage of the total number of shares of Class B Common Stock proposed to be transferred equal to such remaining Class B shareholder’s ownership percentage of the total number of outstanding shares of Class B Common Stock. If all the shares proposed to be transferred are not purchased by the remaining Class B shareholders, we have the option of purchasing the remaining shares. The agreement can be terminated by the vote of the holders of 80% of the outstanding shares of Class B Common Stock who are subject to the agreement. The agreement will terminate on September 17, 2047, unless terminated earlier in accordance with its terms. Stock Plans During 2018, we had two stock‑based compensation plans, which are described below. The McClatchy Company 2004 Stock Incentive Plan (“2004 Plan”) reserved 900,000 Class A Common shares for issuance to key employees and outside directors. The options vested in installments over four years, and once vested are exercisable up to 10 years from the date of grant. In addition, the 2004 Plan permitted the following type of incentive awards in addition to common stock, stock options and stock appreciation rights (“SARs”): restricted stock, unrestricted stock, stock units and dividend equivalent rights. The 2004 Plan was frozen in May 2012 so that no additional awards could be granted under the plan. The McClatchy Company 2012 Omnibus Incentive Plan (“2012 Plan”) was adopted in 2012 and 500,000 shares of Class A Common Stock were reserved for issuance under the 2012 Plan plus the number of shares available for future awards under the 2004 Plan as of the date of May 16, 2012 (the shareholder meeting date) plus the number of shares subject to awards outstanding under the 2004 Plan as of May 16, 2012, which terminate by expiration, forfeiture, cancellation or otherwise without the issuance of such shares. The 2012 Plan was further amended in May 2017, among other things, to increase the number of shares of Class A Common Stock reserved for issuance by 500,000 shares. The 2012 Plan, as amended, generally provides for granting of stock options or SARs only at an exercise price at least equal to fair market value on the grant date; a 10-year maximum term for stock options and SARs; no re-pricing of stock options or SARs without prior shareholder approval; and no reload or “evergreen” share replenishment features. Stock Plans Activity In 2018, we granted 4,500 shares of Class A Common Stock to each non-employee director under the 2012 Plan. In accordance with The McClatchy Company Director Deferral Program (“Deferral Program”), five directors elected to defer issuance of their 2018 grants. As such, 27,000 shares were issued and 22,500 were deferred until the director terminates from the board of directors. In 2017, we granted 4,500 shares of Class A Common Stock to each non-employee director under the 2012 Plan. Two directors elected to defer issuance of their 2017 grants under the Deferral Program. As such, 36,000 shares were issued and 9,000 were deferred until the director terminates from the board of directors. One of the directors who deferred his award in 2016 terminated from the board of directors during 2017 and therefore was issued his shares. We granted restricted stock units (“RSUs”) at the grant date fair value to certain key employees under the 2012 Plan as summarized in the table below. Fair value for RSUs is based on our Class A Common Stock closing price, as reported by the NYSE American, on the date of grant. The RSUs generally vest over three years after grant date but terms of each grant are at the discretion of the compensation committee of the board of directors. The following table summarizes the RSUs stock activity: Weighted Average Grant Date Fair RSUs Value Nonvested — December 25, 2016 204,145 $ 18.17 Granted 254,405 $ 9.99 Vested (206,776) $ 16.14 Forfeited (5,980) $ 12.86 Nonvested — December 31, 2017 245,794 $ 11.55 Granted 278,130 $ 8.90 Vested (167,722) $ 11.38 Forfeited (24,602) $ 9.54 Nonvested — December 30, 2018 331,600 $ 9.56 For the fiscal year ended December 30, 2018, the total fair value of the RSUs that vested was $1.5 million. As of December 30, 2018, there were $1.9 million of unrecognized compensation costs for non-vested RSUs, which are expected to be recognized over 1.9 years. When SARs are granted, they are granted at grant date fair value to certain key employees from the 2012 Plan. Fair value for SARs is determined using a Black-Scholes option valuation model that uses various assumptions, including expected life in years, volatility and risk-free interest rate. The SARs generally vest four years after grant date but the terms of each grant are at the discretion of the compensation committee of the board of directors. Outstanding SARs are summarized as follows: Weighted Aggregate Average Intrinsic Value SARs Exercise Price (in thousands) Outstanding December 25, 2016 292,750 $ 50.29 $ — Expired (136,575) $ 71.07 Outstanding December 31, 2017 156,175 $ 32.12 $ — Expired (42,875) $ 32.09 Outstanding December 30, 2018 113,300 $ 32.13 $ — SARs exercisable: December 31, 2017 156,175 $ — December 30, 2018 113,300 $ — As of December 30, 2018, there were no unrecognized compensation costs related to SARs granted under our plans. The weighted average remaining contractual life of SARs vested and exercisable at December 30, 2018, was 2.1 years. The following tables summarize information about SARs outstanding in the stock plans at December 30, 2018: Average Remaining Weighted Weighted Range of Exercise SARs Contractual Average SARs Average Prices Outstanding Life Exercise Price Exercisable Exercise Price $24.60 – $40.80 113,300 2.11 $ 32.13 113,300 $ 32.13 Total 113,300 2.11 $ 32.13 113,300 $ 32.13 Stock‑Based Compensation Total stock‑based compensation expense consisted of the following: Years Ended December 30, December 31, (in thousands) 2018 2017 Stock-based compensation expense $ 2,057 $ 2,475 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 30, 2018 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Business and Basis of Accounting | The McClatchy Company (the “Company,” “we,” “us” or “our”) provides strong, independent local journalism to 30 communities with operations in 14 states, as well as selected national news coverage through our Washington D.C. based bureau. We also provide a full suite of digital marketing services, both through our local sales teams based in the communities we serve, as well as through excelerate ® , our national digital marketing agency. 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. Our fiscal year ends on the last Sunday in December. The fiscal year December 30, 2018, consisted of a 52-week period. The fiscal year ended December 31, 2017 consisted of a 53-week period. Preparation of the financial statements in conformity with accounting principles generally accepted in the United States and pursuant to the rules and regulation of the Securities and Exchange Commission (“SEC”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The consolidated financial statements include the Company and our subsidiaries. Intercompany items and transactions are eliminated. |
Revenue recognition | Revenue recognition We recognize revenues when control of the promised goods is transferred to our customers or when the services are performed, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. All revenue recognized on the 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. Also see Note 2. |
Concentrations of credit risks | Concentrations of credit risks Financial instruments, which potentially subject us to concentrations of credit risks, are principally cash and cash equivalents and trade accounts receivables. Cash and cash equivalents are placed with major financial institutions. As of December 30, 2018, substantially all of our cash and cash equivalents are in excess of the FDIC insured limits. We have not experienced any losses related to amounts in excess of FDIC limits. We routinely assess the financial strength of significant customers and this assessment, combined with the large number and geographic diversity of our customers, limits our concentration of risk with respect to trade accounts receivable. |
Allowance for doubtful accounts | Allowance for doubtful accounts We maintain an allowance account for estimated losses resulting from the risk that our customers will not make required payments. At certain of our media companies, we establish our allowances based on collection experience, aging of our receivables and significant individual account credit risk. At the remaining media companies we use the aging of accounts receivable, reserving for all accounts due 90 days or longer, to establish allowances for losses on accounts receivable; however, if we become aware that the financial condition of specific customers has deteriorated, additional allowances are provided. We provide an allowance for doubtful accounts as follows: Years Ended December 30, December 31, (in thousands) 2018 2017 Balance at beginning of year $ 3,225 $ 3,254 Charged to costs and expenses 8,995 10,870 Amounts written off (9,212) (10,899) Balance at end of year $ 3,008 $ 3,225 |
Newsprint, ink and other inventories | Newsprint, ink and other inventories Newsprint, ink and other inventories are stated at the lower of cost (based principally on the first‑in, first‑out method) and net realizable value. During 2017, we recorded a $2.0 million write‑down of non-newsprint inventory, which was reflected in the other asset write-downs line on our consolidated statement of operations. There were no similar write-downs of newsprint, ink or other inventories during 2018. |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment (“PP&E”) are recorded at cost. Additions and substantial improvements, as well as interest expense incurred during construction, are capitalized. Capitalized interest was not material in 2018 or 2017. Expenditures for maintenance and repairs are charged to expense as incurred. When PP&E is sold or retired, the asset and related accumulated depreciation are removed from the accounts and the associated gain or loss is recognized. Property, plant and equipment consisted of the following: December 30, December 31, Estimated (in thousands) 2018 2017 Useful Lives Land $ 32,335 $ 36,491 Building and improvements 268,157 289,574 - years Equipment 506,307 555,204 - years (1) Construction in process 1,890 2,696 808,689 883,965 Less accumulated depreciation (574,997) (626,326) Property, plant and equipment, net $ 233,692 $ 257,639 (1) Presses are 9 - 25 years and other equipment is 2 - 15 years We record depreciation using the straight‑line method over estimated useful lives. The useful lives are estimated at the time the assets are acquired and are based on historical experience with similar assets and anticipated technological changes. Our depreciation expense was $28.6 million and $30.8 million in 2018 and 2017, respectively. During 2018 and 2017, we incurred $0.6 million and $0.3 million, respectively, in accelerated depreciation related to production equipment that was no longer needed due to outsourcing of our printing process at certain of our media companies. We review the carrying amount of long‑lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events that result in an impairment review include the decision to close a location or a significant decrease in the operating performance of the long‑lived asset. Long‑lived assets are considered impaired if the estimated undiscounted future cash flows of the asset or asset group are less than the carrying amount. For impaired assets, we recognize a loss equal to the difference between the carrying amount of the asset or asset group and its estimated fair value, which is recorded in operating expenses in the consolidated statements of operations. The estimated fair value of the asset or asset group is based on the discounted future cash flows of the asset or asset group. The asset group is defined as the lowest level for which identifiable cash flows are available. |
Assets held for sale | Assets held for sale Assets held for sale includes land and building at three of our media companies that we actively marketed for sale during 2018. In connection with classifying these properties as assets held for the 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, during 2018, we recorded a $0.1 million impairment charge which is included in other asset write-downs on our consolidated statement of operations. The land and building at this property were subsequently sold during the third quarter of 2018 with no gain or additional loss. Additionally, one of the other properties that was classified as assets held for sale in 2018 was sold for a gain of $0.5 million. |
Investments in unconsolidated companies | Investments in unconsolidated companies We have accounted for non-marketable equity investments under the equity or cost method. Investments through which we exercise significant influence but do not have control over the investee are accounted for under the equity method. Investments through which we are not able to exercise significant influence over the investee are accounted for under the cost method. See Note 3 for discussion of investments in unconsolidated companies. |
Financial obligations | Financial obligations Financial obligations consist of contributions of real properties to the Pension Plan in 2016 and 2011 (see Note 7), and real property previously owned by The Sacramento Bee 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. |
Segment reporting | Segment reporting We operate 30 media companies, providing each of our communities with high-quality news and advertising services in a wide array of digital and print formats. We have two operating segments that we aggregate into a single reportable segment because each has similar economic characteristics, products, customers and distribution methods. Our operating segments are based on how our chief executive officer, who is also our Chief Operating Decision Maker (“CODM”), makes decisions about allocating resources and assessing performance. The CODM is provided discrete financial information for the two operating segments. Each operating segment consists of a group of media companies and both operating segments report to the same segment manager. One of our operating segments (“Western Segment”) consists of our media companies’ operations in the West and Central, while the other operating segment (“Eastern Segment”) consists primarily of media company operations in the Carolinas and East. |
Goodwill and intangible impairment | Goodwill and intangible impairment Goodwill represents the excess of cost of a business acquisition over the fair value of the net assets acquired. In accordance with FASB ASC 350 " Intangibles - Goodwill and Other " goodwill is not amortized. An impairment loss is recognized when the carrying amount of the reporting unit's net assets exceed the estimated fair value of the reporting unit. 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. We perform this testing on operating segments, which are also considered our reporting units. One reporting unit (“Western” reporting unit) consists of operations in our West and Central regions and the other reporting unit (“Eastern” reporting unit) consists of operations primarily in our Carolinas and East regions We test for goodwill impairment using an equal weighting of a market approach and an income approach. We use market multiples derived from a set of competitors or companies with comparable market characteristics to establish fair values for a reporting unit (market approach). We also estimate fair value using discounted projected cash flow analysis (income approach). This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, the long‑term rate of growth for our business, the useful life over which cash flows will occur, and determination of our weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit. In 2018, we considered the challenging business conditions and the resulting weakness in our stock price in our annual impairment analysis; however, no impairment was recognized. In 2017, we also concluded no impairment charge was required. Also see Note 4. Newspaper mastheads (newspaper titles and website domain names) are not subject to amortization and are tested for impairment annually, at year‑end, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of each newspaper masthead with its carrying amount. We use a relief-from-royalty approach which utilizes a discounted cash flow model to determine the fair value of each newspaper masthead. We performed interim and annual impairment tests during 2018. Individual newspaper masthead fair values were estimated using the present value of expected future cash flows, using estimates, judgments and assumptions discussed above that we believe were appropriate in the circumstances. As a result, we recorded an intangible newspaper masthead impairment charges of $14.1 million in the third quarter, and $37.2 million for the full year ending December 30, 2018. In 2017, we recorded impairment charges of $21.5 million. Also see Note 4. 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 impairments of long‑lived assets subject to amortization during 2018 or 2017. |
Stock-based compensation | Stock‑based compensation All stock‑based compensation, including grants of stock appreciation rights, restricted stock units and common stock under equity incentive plans, are recognized in the financial statements based on their fair values. At December 30, 2018, we had two stock‑based compensation plans. See Note 10. |
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. During 2018, we finalized the impacts of the Tax Act and noted no material adjustments to our previously recorded balances and results. The FASB also issued ASU 2018-02, see below in Note 1, which allowed for certain stranded tax effects resulting from the Tax Act to be reclassified from accumulated other comprehensive income to retained earnings. We elected to early adopt this standard and as such recorded a reclass of $98.4 million of stranded tax effects from accumulated other comprehensive income to retained earnings in 2018. 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 considers 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 had 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. 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 also evaluate any uncertain tax positions and recognize a liability for the tax benefit associated with an uncertain tax position if it is more likely than not that the tax position will not be sustained on examination by the taxing authorities upon consideration of the technical merits of the position. The tax benefits recognized in the financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. We record a liability for uncertain tax positions taken or expected to be taken in a tax return. Any change in judgment related to the expected ultimate resolution of uncertain tax positions is recognized in earnings in the period in which such change occurs. We record accrued interest related to unrecognized tax benefits in interest expense. Accrued penalties are recorded as part of income taxes. |
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 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 December 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 December 30, 2018 the carrying value and the estimated fair value of our 2026 Notes (as defined in Note 5) was $287.2 million and $302.4 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 2026 Notes as 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 December 30, 2018, the carrying value and the estimated fair value of our Debentures, Junior Term Loan and 2031 Notes (as defined in Note 5), was $350.4 million and, $296.5 million, respectively. The fair values of our Debentures, Junior Term loan, and 2031 Notes were estimated based on quoted market prices. When 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 December 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. Pension plan. As of December 30, 2018, and December 31, 2017, we had assets related to our qualified defined benefit pension plan measured at fair value. The required disclosures regarding such assets are presented in Note 7. Certain assets are measured at fair value on a nonrecurring basis; that is, they are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Our non‑financial assets that are measured at fair value on a nonrecurring basis are assets held for sale, goodwill, indefinite or finite lived intangible assets and equity method investments. All of these are measured using Level 3 inputs. We utilize valuation techniques that seek to maximize the use of observable inputs and minimize the use of unobservable inputs. The significant unobservable inputs include our expected cash flows and the discount rate that we estimate market participants would seek for bearing the risk associated with such assets. We incurred impairment charges during 2018 and 2017 on our newspaper masthead intangible assets (see above in Note 1). |
Accumulated other comprehensive loss | Accumulated other comprehensive loss We record changes in our net assets from non‑owner sources in our consolidated statements of stockholders’ equity (deficit). Such changes relate primarily to valuing our pension liabilities, net of tax effects. Our accumulated other comprehensive loss (“AOCL”) and reclassifications from AOCL, net of tax, consisted of the following: Other Minimum Comprehensive Pension and Loss Post- Related to Retirement Equity (in thousands) Liability Investments Total Balance at December 25, 2016 $ (450,506) $ (11,009) $ (461,515) Other comprehensive income (loss) before reclassifications — 4,046 4,046 Amounts reclassified from AOCL 8,100 — 8,100 Other comprehensive income 8,100 4,046 12,146 Balance at December 31, 2017 $ (442,406) $ (6,963) $ (449,369) Amounts reclassified from AOCL (153,414) (1,506) (154,920) Other comprehensive loss (153,414) (1,506) (154,920) Balance at December 30, 2018 $ (595,820) $ (8,469) $ (604,289) Amount Reclassified from AOCL (in thousands) Year Ended Year Ended December 30, December 31, Affected Line in the AOCL Component 2018 2017 Consolidated Statements of Operations Minimum pension and post-retirement liability $ (56,530) $ 8,100 Retirement benefit expense (1) Reclassification of AOCL tax effects (98,390) — Retained earnings (2) $ (154,920) $ 8,100 Net of tax _____________________ (1) There is no income tax benefit associated with the years ended December 30, 2018 and December 31, 2017, due to the recognition of a valuation allowance. (2) See Recently adopted accounting pronouncements below |
Earnings per share (EPS) | Earnings per share (EPS) Basic EPS excludes dilution from common stock equivalents and reflects income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is based upon the weighted average number of outstanding shares of common stock and dilutive common stock equivalents in the period. Common stock equivalents arise from dilutive stock appreciation rights and restricted stock units and are computed using the treasury stock method. Anti-dilutive common stock equivalents are excluded from diluted EPS. The weighted average anti‑dilutive common stock equivalents that could potentially dilute basic EPS in the future, but were not included in the weighted average share calculation, consisted of the following: Years Ended December 30, December 31, (shares in thousands) 2018 2017 Anti-dilutive common stock equivalents 199 278 |
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 and 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 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 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 during 2017 increased $1.0 million to exclude the changes in restricted cash, and this amount is reflected in our consolidated cash flow statement. In February 2018, the FASB issued ASU No. 2018-02, “ Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ” ASU 2018-02 allows for reclassification of stranded tax effects resulting from the Tax Act from accumulated other comprehensive income to retained earnings. Consequently, the standard eliminates the stranded tax effects resulting from the Tax Act and will improve the usefulness of information reported to financial statement users. However, because the standard only relates to the reclassification of the income tax effects of the Tax Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. This standard also requires certain disclosures about the stranded tax effects. It is effective for us for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. During the fourth quarter of 2018, we elected to early adopt this standard. As a result of the adoption, we reclassified $98.4 million of stranded tax effects to accumulated deficit. These previously had been recorded in accumulated other comprehensive income. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) ” and it replaces the existing guidance in Topic 840, “ Leases. ” Topic 842 requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use (ROU) assets. The new lease standard does not substantially change lessor accounting. Topic 842 has been amended by ASUs No. 2018-01, 2018-10, 2018-11 and 2018-20, which provide further guidance and clarification on specific items within the previously issued update. It is effective for us for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. We plan to adopt ASC 842 in our next fiscal year beginning December 31, 2018, using the modified retrospective approach, and to apply the new standard to existing leases on the effective date of the standard. 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 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 consolidated statements of operations. Upon adoption, we expect to recognize additional operating lease liabilities of approximately $61.0 million with corresponding ROU assets of approximately $52.0 million. The new standard provides a number of optional practical expedients in transition. We expect to elect the “package of practical expedients”, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The new standard also provides practical expedients for our ongoing accounting. We expect to elect the short-term lease recognition exemption for all leases that qualify. For those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases in transition. We also expect to elect the practical expedient allowing us combine lease and non-lease components for our real estate leases. In June 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ” ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the expected credit losses during the period. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In 2018, the FASB issued additional guidance update 2018-19 which clarifies the scope of the guidance was not meant to include receivables arising from operating leases. ASU 2016-13 and the subsequent update are effective for us for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted for interim or annual reporting periods beginning after December 15, 2018. We are currently in the process of evaluating the impact of the adoption on our consolidated financial statements. In August 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 2018-13 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 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 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 consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of allowance for doubtful accounts | Years Ended December 30, December 31, (in thousands) 2018 2017 Balance at beginning of year $ 3,225 $ 3,254 Charged to costs and expenses 8,995 10,870 Amounts written off (9,212) (10,899) Balance at end of year $ 3,008 $ 3,225 |
Schedule of components of property, plant and equipment | December 30, December 31, Estimated (in thousands) 2018 2017 Useful Lives Land $ 32,335 $ 36,491 Building and improvements 268,157 289,574 - years Equipment 506,307 555,204 - years (1) Construction in process 1,890 2,696 808,689 883,965 Less accumulated depreciation (574,997) (626,326) Property, plant and equipment, net $ 233,692 $ 257,639 (1) Presses are 9 - 25 years and other equipment is 2 - 15 years |
Schedule of components of accumulated other comprehensive loss, net of tax | Other Minimum Comprehensive Pension and Loss Post- Related to Retirement Equity (in thousands) Liability Investments Total Balance at December 25, 2016 $ (450,506) $ (11,009) $ (461,515) Other comprehensive income (loss) before reclassifications — 4,046 4,046 Amounts reclassified from AOCL 8,100 — 8,100 Other comprehensive income 8,100 4,046 12,146 Balance at December 31, 2017 $ (442,406) $ (6,963) $ (449,369) Amounts reclassified from AOCL (153,414) (1,506) (154,920) Other comprehensive loss (153,414) (1,506) (154,920) Balance at December 30, 2018 $ (595,820) $ (8,469) $ (604,289) |
Schedule of reclassification out of accumulated other comprehensive income | Amount Reclassified from AOCL (in thousands) Year Ended Year Ended December 30, December 31, Affected Line in the AOCL Component 2018 2017 Consolidated Statements of Operations Minimum pension and post-retirement liability $ (56,530) $ 8,100 Retirement benefit expense (1) Reclassification of AOCL tax effects (98,390) — Retained earnings (2) $ (154,920) $ 8,100 Net of tax _____________________ (1) There is no income tax benefit associated with the years ended December 30, 2018 and December 31, 2017, due to the recognition of a valuation allowance. (2) See Recently adopted accounting pronouncements below |
Summary of anti-dilutive stock options | Years Ended December 30, December 31, (shares in thousands) 2018 2017 Anti-dilutive common stock equivalents 199 278 |
INVESTMENTS IN UNCONSOLIDATED_2
INVESTMENTS IN UNCONSOLIDATED COMPANIES (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
INVESTMENTS IN UNCONSOLIDATED COMPANIES | |
Summary of expenses incurred for products provided by unconsolidated companies and recorded in operating expenses | Years Ended December 30, December 31, (in thousands) 2018 2017 CareerBuilder, LLC $ — $ 354 Ponderay (general partnership) 7,975 9,162 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
INTANGIBLE ASSETS AND GOODWILL | |
Schedule of intangible assets and goodwill | December 31, Disposition Impairment Amortization December 30, (in thousands) 2017 Additions Adjustment Charges Expense 2018 Intangible assets subject to amortization $ 839,284 $ — $ (948) $ — $ — $ 838,336 Accumulated amortization (761,013) — 948 — (47,660) (807,725) 78,271 — — — (47,660) 30,611 Mastheads 149,951 — — (37,215) — 112,736 Goodwill 705,174 — — — — 705,174 Total $ 933,396 $ — $ — $ (37,215) $ (47,660) $ 848,521 December 25, Disposition Impairment Amortization December 31, (in thousands) 2016 Additions Adjustment Charges Expense 2017 Intangible assets subject to amortization $ 839,273 $ 11 $ — $ — $ — $ 839,284 Accumulated amortization (711,723) — — — (49,290) (761,013) 127,550 11 — — (49,290) 78,271 Mastheads 171,436 — — (21,485) — 149,951 Goodwill 705,174 — — — — 705,174 Total $ 1,004,160 $ 11 $ — $ (21,485) $ (49,290) $ 933,396 |
Summary of accumulated changes in intangible assets and goodwill | December 30, 2018 December 31, 2017 Original Gross Accumulated Carrying Original Gross Accumulated Carrying (in thousands) Amount Impairment Amount Amount Impairment Amount Mastheads $ 684,500 $ (571,764) $ 112,736 $ 684,500 $ (534,549) $ 149,951 Goodwill 3,571,111 (2,865,937) 705,174 3,571,111 (2,865,937) 705,174 Total $ 4,255,611 $ (3,437,701) $ 817,910 $ 4,255,611 $ (3,400,486) $ 855,125 |
Amortization expense for the five succeeding fiscal years | Amortization Expense Year (in thousands) 2019 $ 24,095 2020 803 2021 680 2022 655 2023 667 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
LONG-TERM DEBT | |
Summary of company's long-term debt | Face Value at Carrying Value December 30, December 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 304,700 287,249 — 7.795% tranche A junior term loan due in 2030 157,083 123,213 — 6.875% senior secured junior lien notes due in 2031 193,466 141,447 — 7.150% debentures due in 2027 7,105 6,824 85,262 6.875% debentures due in 2029 82,764 78,962 262,311 Long-term debt $ 745,118 $ 637,695 $ 781,392 Less current portion 4,575 4,312 74,140 Total long-term debt, net of current $ 740,543 $ 633,383 $ 707,252 |
Summary of reduction of outstanding debt | Year Ended December 30, December 31, 2018 2017 (in thousands) Face Value Face Value 9.000% senior secured notes due in 2022 $ 439,630 $ 51,785 5.750% notes due in 2017 — 16,865 9.000% senior secured notes due in 2026 5,300 — Total notes matured, repurchased or redeemed $ 444,930 $ 68,650 |
Annual maturities of debt | Payments Year (in thousands) 2019 $ 4,575 2020 — 2021 — 2022 — 2023 — Thereafter 740,543 Debt principal $ 745,118 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
INCOME TAXES | |
Schedule of income tax provision (benefit) related to continuing operations | Years Ended December 30, December 31, (in thousands) 2018 2017 Current: Federal $ 5,546 $ 15,042 State (429) 4,017 Deferred: Federal (961) 80,293 State (6,326) 6,107 Income tax provision (benefit) $ (2,170) $ 105,459 |
Schedule of reconciliation of effective tax rate expense (benefit) for continuing operations and the statutory federal income tax rate | Years Ended December 30, December 31, 2018 2017 Statutory rate (21.0) % (35.0) % State taxes, net of federal benefit (4.3) 2.4 Changes in estimates 0.8 — Changes in unrecognized tax benefits (4.3) 0.6 Other 2.8 0.3 Impact of valuation allowance 23.0 80.0 Impact of tax rate changes — (2.4) Stock compensation 0.3 0.6 Effective tax rate (2.7) % 46.5 % |
Schedule of components of deferred tax assets and liabilities | December 30, December 31, (in thousands) 2018 2017 Deferred tax assets: Compensation benefits $ 157,715 $ 144,084 State taxes 1,909 2,861 State loss carryovers 4,006 4,338 Investments in unconsolidated subsidiaries 4,242 4,981 Deferred interest expense 15,342 — Other 3,407 2,945 Total deferred tax assets 186,621 159,209 Valuation allowance (143,764) (109,718) Net deferred tax assets 42,857 49,491 Deferred tax liabilities: Depreciation and amortization 45,239 68,665 Debt discount 17,876 4,512 Deferred gain on debt — 4,376 Other 517 — Total deferred tax liabilities 63,632 77,553 Net deferred tax assets (liabilities) $ (20,775) $ (28,062) |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | Years Ended December 30, December 31, (in thousands) 2018 2017 Balance at beginning of fiscal year $ 20,764 $ 16,477 Increases based on tax positions in prior year 84 3,299 Decreases based on tax positions in prior year (4,261) — Increases based on tax positions in current year 1,124 1,642 Settlements (511) (164) Lapse of statute of limitations (3,378) (490) Balance at end of fiscal year $ 13,822 $ 20,764 |
Schedule of tax years and related taxing jurisdictions that were open for audit | Open Years Under Taxing Jurisdiction Tax Year Exam Federal 2015-2018 — California 2014-2018 — Other States 2006-2018 — |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
EMPLOYEE BENEFITS | |
Schedule of reconciliations of the pension and post-retirement benefit plans' benefit obligations, fair value of assets and funded status | Pension Benefits Post-retirement Benefits (in thousands) 2018 2017 2018 2017 Change in Benefit Obligation Benefit obligation, beginning of year $ 2,080,013 $ 1,941,907 $ 7,625 $ 7,403 Interest cost 79,154 85,468 256 271 Plan participants’ contributions — — 10 12 Actuarial (gain)/loss (126,540) 152,353 (417) 707 Gross benefits paid (111,640) (99,715) (647) (768) Benefit obligation, end of year $ 1,920,987 $ 2,080,013 $ 6,827 $ 7,625 Pension Benefits Post-retirement Benefits (in thousands) 2018 2017 2018 2017 Change in Plan Assets Fair value of plan assets, beginning of year $ 1,477,926 $ 1,335,435 $ — $ — Actual return on plan assets (115,192) 233,495 — — Employer contribution 8,885 8,711 637 756 Plan participants’ contributions — — 10 12 Gross benefits paid (111,640) (99,715) (647) (768) Fair value of plan assets, end of year $ 1,259,979 $ 1,477,926 $ — $ — Pension Benefits Post-retirement Benefits (in thousands) 2018 2017 2018 2017 Funded Status Fair value of plan assets $ 1,259,979 $ 1,477,926 $ — $ — Benefit obligations (1,920,987) (2,080,013) (6,827) (7,625) Funded status and amount recognized, end of year $ (661,008) $ (602,087) $ (6,827) $ (7,625) |
Schedule of amounts recognized in the consolidated balance sheet | Pension Benefits Post-retirement Benefits (in thousands) 2018 2017 2018 2017 Current liability $ (11,510) $ (8,941) $ (1,015) $ (1,008) Noncurrent liability (649,498) (593,146) (5,812) (6,617) $ (661,008) $ (602,087) $ (6,827) $ (7,625) |
Schedule of amounts recognized in accumulated other comprehensive income | Pension Benefits Post-retirement Benefits (in thousands) 2018 2017 2018 2017 Net actuarial loss/(gain) $ 811,063 $ 757,096 $ (7,334) $ (7,820) Prior service cost/(credit) — — (4,456) (6,534) $ 811,063 $ 757,096 $ (11,790) $ (14,354) |
Schedule of elements of retirement and post-retirement costs | Years Ended December 30, December 31, (in thousands) 2018 2017 Pension plans: Interest Cost $ 79,154 $ 85,468 Expected return on plan assets (90,495) (89,569) Actuarial loss 25,181 20,335 Net pension expense 13,840 16,234 Net post-retirement benefit credit (2,726) (2,830) Net retirement expenses $ 11,114 $ 13,404 |
Schedule of assumptions used | Weighted average assumptions used for valuing benefit obligations were: Pension Benefit Post-retirement Obligations Obligations 2018 2017 2018 2017 Discount rate 4.42 % 3.91 % 4.15 % 3.60 % Weighted average assumptions used in calculating expense: Pension Benefit Expense Post-retirement Expense December 30, December 31, December 30, December 31, 2018 2017 2018 2017 Expected long-term return on plan assets 7.75 % 7.75 % N/A N/A Discount rate 3.91 % 4.52 % 3.60 % 3.95 % |
Summary of expected benefit payments to retirees under the Company's retirement and post-retirement plans | Retirement Post-retirement (in thousands) Plans (1) Plans 2019 $ 111,478 $ 1,036 2020 112,450 925 2021 117,079 822 2022 118,319 736 2023 120,408 656 2024-2028 621,158 2,241 Total $ 1,200,892 $ 6,416 (1) Largely to be paid from the qualified defined benefit pension plan. |
Summary of pension plan's financial instruments that are carried at fair value on a recurring basis by the fair value hierarchy levels | 2018 Plan Assets (in thousands) Level 1 Level 2 Level 3 NAV Total Cash and cash equivalents $ 9,366 $ — $ — $ — $ 9,366 Mutual funds 139,978 — — — 139,978 Common collective trusts — — — 1,045,628 1,045,628 Real estate — — 55,398 — 55,398 Private equity funds — — 9,609 — 9,609 Total $ 149,344 $ — $ 65,007 $ 1,045,628 $ 1,259,979 2017 Plan Assets (in thousands) Level 1 Level 2 Level 3 NAV Total Cash and cash equivalents $ 8,498 $ — $ — $ — $ 8,498 Mutual funds 478,565 — — — 478,565 Common collective trusts — — — 923,304 923,304 Real estate — — 58,050 — 58,050 Private equity funds — — 9,509 — 9,509 Total $ 487,063 $ — $ 67,559 $ 923,304 $ 1,477,926 |
Summary of changes in the fair value of the pension plan's Level 3 investment assets | (in thousands) Real Estate Private Equity Total Beginning Balance, December 31, 2017 $ 58,050 $ 9,509 $ 67,559 Realized gains (losses), net 4,528 3 4,531 Transfer in or out of level 3 (8,601) — (8,601) Unrealized gains (losses), net 1,421 97 1,518 Ending Balance, December 30, 2018 $ 55,398 $ 9,609 $ 65,007 (in thousands) Real Estate Private Equity Total Beginning Balance, December 25, 2016 $ 57,531 $ 8,149 $ 65,680 Realized gains (losses), net 4,632 — 4,632 Transfer in or out of level 3 (4,614) — (4,614) Unrealized gains (losses), net 501 1,360 1,861 Ending Balance, December 31, 2017 $ 58,050 $ 9,509 $ 67,559 |
Schedule of common collective trusts | (in thousands) 2018 2017 Redemption Frequency (if Currently Eligible) Redemption Notice Period U.S equity funds (1) $ 296,135 $ 353,555 Daily None International equity funds (2) 311,119 569,749 Daily - Monthly None Emerging markets equity funds (3) 153,927 — Daily None - 5-Day Fixed income funds (4) 284,447 — Daily - Semi-Monthly 2-Day - 5-Day Total $ 1,045,628 $ 923,304 ________________ (1) U.S. equity fund strategies - Investments in U.S. equities are defined as commitments to U.S. dollar-denominated, publicly traded common stocks of U.S. domiciled companies and securities convertible into common stock. The aggregate U.S. equity portfolio is expected to exhibit characteristics comparable to, but not necessarily equal to, that of the Russell 3000 Index. (2) International equity funds strategies - Investments in international developed markets equities are defined as commitments to publicly traded common stocks and securities convertible into common stock issued by companies primarily domiciled in countries outside of the U.S. (3) Emerging markets equity fund strategies - Investments in emerging equities may include commitments to publicly traded common stocks and securities convertible into common stock issued by companies domiciled in countries considered emerging by one or more benchmark providers. (4) Fixed income fund strategies - Fixed income investments may include debt instruments issued by both U.S. and non-U.S. governments, agencies, “quasi Government” agencies, corporations, and any other public or private regulated debt security. |
CASH FLOW INFORMATION (Tables)
CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
CASH FLOW INFORMATION | |
Reconciliation of cash, cash equivalents and restricted cash | December 30, December 31, (in thousands) 2018 2017 Cash and equivalents $ 21,906 $ 99,387 Restricted cash included in other assets (1) 28,649 31,967 Total cash, cash equivalents and restricted cash $ 50,555 $ 131,354 |
Schedule of cash paid for interest and income taxes and other non-cash activities | Year Ended December 30, December 31, (in thousands) 2018 2017 Interest paid (net of amount capitalized) $ 43,313 $ 68,861 Income taxes paid (net of refunds) 13,935 12,437 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) — |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
Summary of minimum annual contractual obligations | Payments Due By Period (in thousands) 2019 2020 2021 2022 2023 Thereafter Total Purchase obligations (1) $ 35,371 $ 15,270 $ 9,742 $ 4,487 $ 3,394 $ — $ 68,264 Operating leases (2) Lease obligations 16,408 11,921 9,797 10,178 10,160 31,139 89,603 Sublease income (4,044) (1,306) (379) (334) (232) — (6,295) Net lease obligation 12,364 10,615 9,418 9,844 9,928 31,139 83,308 Workers’ compensation obligations (3) 2,340 1,507 1,118 864 696 5,761 12,286 Total $ 50,075 $ 27,392 $ 20,278 $ 15,195 $ 14,018 $ 36,900 $ 163,858 (1) Represents our purchase obligations primarily related to printing outsource agreements and capital expenditures for PP&E expiring at various dates through 2023. (2) Represents minimum rental commitments under operating leases with non‑cancelable terms in excess of one year and sublease income from leased space with non-cancelable terms in excess of one year. We rent certain facilities and equipment under operating leases expiring at various dates through 2023. Total rental expense, included in other operating expenses, amounted to $14.3 million and $13.4 million in 2018 and 2017, respectively. Most of the leases provide that we pay taxes, maintenance, insurance and certain other operating expenses applicable to the leased premises in addition to the minimum monthly payments. Some of the operating leases have built in escalation clauses. We sublease office space to other companies under non-cancellable agreements that expire at various dates through 2023. Sublease income from operating leases totaled $5.0 million and $4.8 million in 2018 and 2017, respectively. (3) We retain the risk for workers’ compensation resulting from uninsured deductibles per accident or occurrence that are subject to annual aggregate limits. Losses up to the deductible amounts are accrued based upon known claims incurred and an estimate of claims incurred but not reported. For the year ended December 30, 2018, we compiled our historical data pertaining to the self‑insurance experiences and actuarially developed the ultimate loss associated with our self‑insurance programs for workers’ compensation liability. We believe that the actuarial valuation provides the best estimate of the ultimate losses to be expected under these programs. At December 30, 2018, the undiscounted ultimate losses of all our self‑insurance reserves related to our workers’ compensation liabilities were $12.3 million, net of estimated insurance recoveries of approximately $1.9 million. At December 31, 2017, the undiscounted ultimate losses of all our self-insurance reserves related to workers’ compensation liabilities were $13.0 million, net of estimated insurance recoveries of approximately $2.2 million. We discount the net amounts above to present value using an approximate risk‑free rate over the average life of our insurance claims. For the years ended December 30, 2018, and December 31, 2017, the discount rate used was 3.1% and 2.3%, respectively. The present value of all self‑insurance reserves, net of estimated insurance recoveries, for our workers’ compensation liability recorded at December 30, 2018, and December 31, 2017, was $10.7 million and $12.1 million, respectively. |
COMMON STOCK AND STOCK PLANS (T
COMMON STOCK AND STOCK PLANS (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
COMMON STOCK AND STOCK PLANS | |
Summary of the restricted stock units ("RSUs") activity | Weighted Average Grant Date Fair RSUs Value Nonvested — December 25, 2016 204,145 $ 18.17 Granted 254,405 $ 9.99 Vested (206,776) $ 16.14 Forfeited (5,980) $ 12.86 Nonvested — December 31, 2017 245,794 $ 11.55 Granted 278,130 $ 8.90 Vested (167,722) $ 11.38 Forfeited (24,602) $ 9.54 Nonvested — December 30, 2018 331,600 $ 9.56 |
Summary of the stock appreciation rights ("SARs") activity | Weighted Aggregate Average Intrinsic Value SARs Exercise Price (in thousands) Outstanding December 25, 2016 292,750 $ 50.29 $ — Expired (136,575) $ 71.07 Outstanding December 31, 2017 156,175 $ 32.12 $ — Expired (42,875) $ 32.09 Outstanding December 30, 2018 113,300 $ 32.13 $ — SARs exercisable: December 31, 2017 156,175 $ — December 30, 2018 113,300 $ — |
Summary of information about SARs outstanding in the stock plans | Average Remaining Weighted Weighted Range of Exercise SARs Contractual Average SARs Average Prices Outstanding Life Exercise Price Exercisable Exercise Price $24.60 – $40.80 113,300 2.11 $ 32.13 113,300 $ 32.13 Total 113,300 2.11 $ 32.13 113,300 $ 32.13 |
Summary of stock-based compensation expense | Years Ended December 30, December 31, (in thousands) 2018 2017 Stock-based compensation expense $ 2,057 $ 2,475 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended | |
Dec. 30, 2018statecompany | Dec. 31, 2017 | |
Investments in Unconsolidated Companies Activity | ||
Number of media companies | company | 30 | |
Number of states | state | 14 | |
Length of fiscal year | 364 days | 371 days |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
Changes in allowance for doubtful accounts | ||
Balance at beginning of year | $ 3,225 | $ 3,254 |
Charged to costs and expenses | 8,995 | 10,870 |
Amounts written off | (9,212) | (10,899) |
Balance at end of year | $ 3,008 | 3,225 |
Newsprint, ink and other inventories | ||
Inventory Write-down | $ 2,000 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Property, plant, and equipment (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 24, 2017USD ($) | Sep. 24, 2017USD ($) | Dec. 30, 2018USD ($)segmentcompanypropertyitem | Dec. 31, 2017USD ($) | |
Depreciation | |||||
Property, plant and equipment, gross | $ 808,689,000 | $ 883,965,000 | |||
Less accumulated depreciation | (574,997,000) | (626,326,000) | |||
Property, plant and equipment, net | 233,692,000 | 257,639,000 | |||
Depreciation expense | 28,600,000 | 30,800,000 | |||
Accelerated depreciation incurred | $ 600,000 | 300,000 | |||
Facilities with reduced carrying value | property | 1 | ||||
Gain (loss) on sale of property | $ 0 | $ 500,000 | |||
Number of media companies with assets held for sale | company | 3 | ||||
Impairment charge of assets held for sale | $ 100,000 | ||||
Segment reporting | |||||
Number of operating segments | segment | 2 | ||||
Goodwill and intangible impairment | |||||
Goodwill, Impairment Loss | $ 0 | 0 | |||
Impairment of Intangible Assets, Finite-lived | $ 0 | 0 | |||
Stock-based compensation | |||||
Number of stock-based compensation plans | item | 2 | ||||
Newspaper mastheads | |||||
Goodwill and intangible impairment | |||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 14,100,000 | $ 14,100,000 | $ 37,215,000 | 21,485,000 | |
Land | |||||
Depreciation | |||||
Property, plant and equipment, gross | 32,335,000 | 36,491,000 | |||
Buildings and improvements | |||||
Depreciation | |||||
Property, plant and equipment, gross | $ 268,157,000 | 289,574,000 | |||
Buildings and improvements | Minimum | |||||
Depreciation | |||||
Estimated Useful Lives | 5 years | ||||
Buildings and improvements | Maximum | |||||
Depreciation | |||||
Estimated Useful Lives | 60 years | ||||
Equipment | |||||
Depreciation | |||||
Property, plant and equipment, gross | $ 506,307,000 | 555,204,000 | |||
Equipment | Minimum | |||||
Depreciation | |||||
Estimated Useful Lives | 2 years | ||||
Equipment | Maximum | |||||
Depreciation | |||||
Estimated Useful Lives | 25 years | ||||
Construction in process | |||||
Depreciation | |||||
Property, plant and equipment, gross | $ 1,890,000 | $ 2,696,000 | |||
Presses | Minimum | |||||
Depreciation | |||||
Estimated Useful Lives | 9 years | ||||
Presses | Maximum | |||||
Depreciation | |||||
Estimated Useful Lives | 25 years | ||||
Other equipment | Minimum | |||||
Depreciation | |||||
Estimated Useful Lives | 2 years | ||||
Other equipment | Maximum | |||||
Depreciation | |||||
Estimated Useful Lives | 15 years |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Income taxes (Details) | 12 Months Ended | |
Dec. 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 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - Debt (Details) - USD ($) $ in Thousands | Dec. 30, 2018 | Dec. 31, 2017 |
Long-term debt fair value disclosure | ||
Long-term debt | $ 637,695 | $ 781,392 |
Estimated fair value of long-term debt | $ 810,700 | |
9.00% senior secured notes due in 2026 | ||
Long-term debt fair value disclosure | ||
Long-term debt | 287,249 | |
Estimated fair value of long-term debt | 302,400 | |
Debentures and Junior Term Loans | ||
Long-term debt fair value disclosure | ||
Long-term debt | 350,400 | |
Estimated fair value of long-term debt | $ 296,500 |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES - AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
Changes in stockholders' equity | ||
Balance at the beginning of the period | $ (449,369) | $ (461,515) |
Other comprehensive income (loss) before reclassifications | 4,046 | |
Amounts reclassified from AOCL | (154,920) | 8,100 |
Other comprehensive income (loss) | (154,920) | 12,146 |
Balance at the end of the period | (604,289) | (449,369) |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Retirement benefit expense | 11,114 | 13,404 |
Retained earnings | 1,954,132 | 1,970,097 |
Net of tax | 79,757 | 332,358 |
Minimum Pension and Post-Retirement Liability | ||
Changes in stockholders' equity | ||
Balance at the beginning of the period | (442,406) | (450,506) |
Amounts reclassified from AOCL | (153,414) | 8,100 |
Other comprehensive income (loss) | (153,414) | 8,100 |
Balance at the end of the period | (595,820) | (442,406) |
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 | (56,530) | 8,100 |
Retained earnings | (98,390) | |
Net of tax | (154,920) | 8,100 |
Other Comprehensive Loss Related to Equity Investments | ||
Changes in stockholders' equity | ||
Balance at the beginning of the period | (6,963) | (11,009) |
Other comprehensive income (loss) before reclassifications | 4,046 | |
Amounts reclassified from AOCL | (1,506) | |
Other comprehensive income (loss) | (1,506) | 4,046 |
Balance at the end of the period | $ (8,469) | $ (6,963) |
SIGNIFICANT ACCOUNTING POLIC_10
SIGNIFICANT ACCOUNTING POLICIES - EPS (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
Anti-dilutive stock options | ||
Weighted average anti-dilutive stock options | ||
Anti-dilutive stock options (in shares) | 199 | 278 |
SIGNIFICANT ACCOUNTING POLIC_11
SIGNIFICANT ACCOUNTING POLICIES - Adopted Pronouncements (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2018 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 25, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Net cash provided by operating activities | $ 25,919 | $ 19,123 | |||
Accumulated deficit | (1,954,132) | (1,970,097) | |||
Accumulated other comprehensive loss | (604,289) | $ (449,369) | $ (461,515) | ||
ASU 2016-18 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Net cash provided by operating activities | $ 1,000 | ||||
ASU 2018-02 | Adjustments for New Accounting Principle, Early Adoption | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Accumulated deficit | 98,400 | ||||
Accumulated other comprehensive loss | $ (98,400) | ||||
ASU 2016-02 | Forecast | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Operating lease liabilities | $ 61,000 | ||||
ROU assets | $ 52,000 |
REVENUES (Details)
REVENUES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenues | |||
Accumulated deficit | $ (1,954,132) | $ (1,970,097) | |
Maximum | |||
Revenues | |||
Contract duration | 1 year | ||
Before and after Topic 606 | ASU 2014-09 | |||
Revenues | |||
Accumulated deficit | $ (2,700) | ||
Before and after Topic 606 | Maximum | ASU 2014-09 | |||
Revenues | |||
Revenues | $ 100 |
REVENUES - Unearned Revenues (D
REVENUES - Unearned Revenues (Details) | 12 Months Ended |
Dec. 30, 2018 | |
REVENUES | |
Subscribers advance payment term (in years) | 1 year |
Advertiser maximum payment (in days) | 30 days |
REVENUES - Practical Expedients
REVENUES - Practical Expedients and Exemptions (Details) | 12 Months Ended |
Dec. 30, 2018 | |
REVENUES | |
Practical expedient incremental cost of obtaining contract | true |
Practical expedient, remaining performance obligation | true |
INVESTMENTS IN UNCONSOLIDATED_3
INVESTMENTS IN UNCONSOLIDATED COMPANIES (Details) | Sep. 13, 2018USD ($) | Jul. 31, 2017USD ($) | Jul. 30, 2017 | Dec. 30, 2018USD ($)subsidiary | Dec. 31, 2017USD ($) |
Investments in unconsolidated companies and joint ventures | |||||
Distributions of income from investments in unconsolidated companies | $ 2,876,000 | ||||
Gains related to investments in unconsolidated companies | (1,721,000) | ||||
Impairments related to investments in unconsolidated companies, net | $ 170,007,000 | ||||
Investments in unconsolidated companies | 3,888,000 | 7,172,000 | |||
Career Builder LLC | |||||
Investments in unconsolidated companies and joint ventures | |||||
Proceeds from sale | $ 5,300,000 | $ 73,900,000 | |||
Distributions of income from investments in unconsolidated companies | 7,300,000 | ||||
Gross proceeds | $ 66,600,000 | ||||
Impairments related to investments in unconsolidated companies, net | 168,200,000 | ||||
Ownership interest (as a percent) | 3.00% | 15.00% | |||
Expenses incurred for products provided by the entity's less-than 50% owned companies | 354,000 | ||||
Seattle Times Company (C-Corporation) | |||||
Investments in unconsolidated companies and joint ventures | |||||
Distributions of income from equity investments | $ 0 | ||||
Ownership interest (as a percent) | 49.50% | ||||
Investments in unconsolidated companies | $ 0 | ||||
Ponderay (general partnership) | |||||
Investments in unconsolidated companies and joint ventures | |||||
Distributions of income from equity investments | $ 0 | ||||
Ownership interest (as a percent) | 27.00% | ||||
Expenses incurred for products provided by the entity's less-than 50% owned companies | $ 7,975,000 | 9,162,000 | |||
Number of subsidiaries | subsidiary | 3 | ||||
Investments in unconsolidated companies | $ 0 | ||||
Various | |||||
Investments in unconsolidated companies and joint ventures | |||||
Impairments related to investments in unconsolidated companies, net | $ 0 | ||||
Home Finder LLC | |||||
Investments in unconsolidated companies and joint ventures | |||||
Impairments related to investments in unconsolidated companies, net | $ 2,400,000 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 24, 2017 | Sep. 24, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | |
Intangible assets subject to amortization, gross | ||||
Balance at the beginning of the period | $ 839,273 | $ 839,284 | $ 839,273 | |
Additions | 11 | |||
Disposition Adjustment | (948) | |||
Balance at the end of the period | 838,336 | 839,284 | ||
Accumulated amortization | ||||
Balance at the beginning of the period | (711,723) | (761,013) | (711,723) | |
Disposition Adjustment | 948 | |||
Amortization Expense | (47,660) | (49,290) | ||
Balance at the end of the period | (807,725) | (761,013) | ||
Intangible assets subject to amortization, net | ||||
Balance at the beginning of the period | 127,550 | 78,271 | 127,550 | |
Additions | 11 | |||
Amortization Expense | (47,660) | (49,290) | ||
Balance at the end of the period | 30,611 | 78,271 | ||
Goodwill [Roll Forward] | ||||
Balance at the beginning of the period | 705,174 | 705,174 | 705,174 | |
Goodwill impairment charge | 0 | 0 | ||
Balance at the end of the period | 705,174 | 705,174 | ||
Total | ||||
Balance at the beginning of the period | 1,004,160 | 933,396 | 1,004,160 | |
Additions | 11 | |||
Impairment Charges | (37,215) | (21,485) | ||
Amortization Expense | (47,660) | (49,290) | ||
Balance at the end of the period | 848,521 | 933,396 | ||
Newspaper mastheads | ||||
Mastheads | ||||
Balance at the beginning of the period | 171,436 | 149,951 | 171,436 | |
Impairment Charges | $ (14,100) | $ (14,100) | (37,215) | (21,485) |
Balance at the end of the period | $ 112,736 | $ 149,951 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Indefinite-lived (Details) - USD ($) $ in Thousands | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 |
Indefinite lived intangible assets and goodwill | |||
Goodwill, Gross | $ 3,571,111 | $ 3,571,111 | |
Original Gross Amount | 4,255,611 | 4,255,611 | |
Accumulated Impairment, Goodwill | (2,865,937) | (2,865,937) | |
Accumulated Impairment, Amount | (3,437,701) | (3,400,486) | |
Goodwill | 705,174 | 705,174 | $ 705,174 |
Carrying Amount, Total | 817,910 | 855,125 | |
Newspaper mastheads | |||
Indefinite lived intangible assets and goodwill | |||
Original Gross Amount, Mastheads | 684,500 | 684,500 | |
Accumulated Impairment, Mastheads | (571,764) | (534,549) | |
Carrying Amount, Mastheads | $ 112,736 | $ 149,951 | $ 171,436 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL - Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
Estimated amortization expense | ||
Amortization expense | $ 47,660 | $ 49,290 |
2,019 | 24,095 | |
2,020 | 803 | |
2,021 | 680 | |
2,022 | 655 | |
2,023 | $ 667 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Dec. 30, 2018 | Dec. 31, 2017 |
Long-term debt disclosures | ||
Face Value | $ 745,118 | |
Less current portion | 4,575 | |
Total long-term debt, net of current | 740,543 | |
Carrying value | 637,695 | $ 781,392 |
Less current portion | 4,312 | 74,140 |
Total long-term debt, net of current | 633,383 | 707,252 |
Unamortized debt issuance costs and discounts | $ 109,200 | $ 23,700 |
9.000% 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 | $ 304,700 | |
Carrying value | $ 287,249 | |
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 | $ 123,213 | |
6.875% senior secured junior lien notes due in 2031 | ||
Long-term debt disclosures | ||
Interest rate (as a percent) | 6.875% | 6.875% |
Face Value | $ 193,466 | |
Carrying value | $ 141,447 | |
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 | $ 6,824 | $ 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 | $ 78,962 | $ 262,311 |
LONG-TERM DEBT - Debt Redemptio
LONG-TERM DEBT - Debt Redemptions, Repurchases and Loss on Extinguishment of Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 30, 2018 | Dec. 31, 2017 | |
LONG-TERM DEBT | |||
Face value debt reduced | $ 444,930 | $ 68,650 | |
Gain (loss) on extinguishment of debt, net | 30,577 | (2,700) | |
Amount of debt redeemed | 16,900 | ||
Gross gain on extinguishment of debt | 68,700 | ||
9.000% senior secured notes due in 2022 | |||
LONG-TERM DEBT | |||
Face value debt reduced | $ 439,630 | $ 51,785 | |
Interest rate (as a percent) | 9.00% | 9.00% | |
Debt redeemed through tender offer | $ 344,100 | $ 500 | |
Amount of debt redeemed | 75,000 | $ 1,800 | |
Debt repurchased privately | $ 20,000 | 50,000 | |
5.750% notes due in 2017 | |||
LONG-TERM DEBT | |||
Face value debt reduced | $ 16,865 | ||
Interest rate (as a percent) | 5.75% | 5.75% | |
9.000% senior secured notes due in 2026 | |||
LONG-TERM DEBT | |||
Face value debt reduced | $ 5,300 | ||
Interest rate (as a percent) | 9.00% | 9.00% | |
Amount of debt redeemed | $ 5,300 | ||
Debentures | |||
LONG-TERM DEBT | |||
Gross gain on extinguishment of debt | 68,700 | ||
Write off of unamortized discounts | $ 32,300 |
LONG-TERM DEBT - Debt Refinanci
LONG-TERM DEBT - Debt Refinancing (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jul. 16, 2018 | |
LONG-TERM DEBT | |||
Amount of debt redeemed | $ 16.9 | ||
9.000% senior secured notes due in 2022 | |||
LONG-TERM DEBT | |||
Amount of debt redeemed | $ 75 | $ 1.8 | |
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 ($) | Dec. 30, 2018USD ($) | Jan. 31, 2019USD ($) | Dec. 31, 2017 |
Letter of credit | ||||
LONG-TERM DEBT | ||||
Outstanding letters of credit | $ 28.7 | |||
Percentage of aggregate undrawn amount of letter of credit required to provide cash collateral | 100.00% | |||
9.000% 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 | $ 61 | |||
Amount borrowed | $ 28.7 | |||
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 | 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 | 9.000% senior secured notes due in 2022 | Revolving credit facility | ||||
LONG-TERM DEBT | ||||
Outstanding line of credit | $ 0 | |||
Forecast | Letter of credit | ||||
LONG-TERM DEBT | ||||
Outstanding letters of credit | $ 26.7 |
LONG-TERM DEBT - Senior Secured
LONG-TERM DEBT - Senior Secured Notes (Details) - USD ($) $ in Thousands | Jul. 16, 2018 | Dec. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Amount of debt redeemed | $ 16,900 | ||
Face Value | $ 745,118 | ||
Long-term Debt, Current Maturities | 4,312 | 74,140 | |
9.000% senior secured notes due in 2022 | |||
Debt Instrument [Line Items] | |||
Amount of debt redeemed | 75,000 | $ 1,800 | |
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 | 304,700 | ||
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 | Dec. 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 | 745,118 | ||
Carrying value of long-term debt | $ 637,695 | $ 781,392 | |
Junior Lien Term Loan Credit Agreement | |||
LONG-TERM DEBT | |||
Principal amount of debt (as a percent) | 100.00% | ||
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 | $ 6,824 | $ 85,262 | |
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 | $ 123,213 | ||
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 | $ 78,962 | $ 262,311 | |
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 |
LONG-TERM DEBT - Maturities (De
LONG-TERM DEBT - Maturities (Details) $ in Thousands | Dec. 30, 2018USD ($) |
Annual maturities of debt for the next five years and thereafter | |
2,019 | $ 4,575 |
Thereafter | 740,543 |
Face Value | $ 745,118 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
Current: | ||
Federal | $ 5,546 | $ 15,042 |
State | (429) | 4,017 |
Deferred: | ||
Federal | (961) | 80,293 |
State | (6,326) | 6,107 |
Income Tax Expense (Benefit), Total | $ (2,170) | $ 105,459 |
Reconciliation of effective tax rate expense (benefit) and the statutory federal income tax rate | ||
Statutory rate (as a percent) | (21.00%) | (35.00%) |
State taxes, net of federal benefit (as a percent) | (4.30%) | 2.40% |
Changes in estimates (as a percent) | 0.80% | |
Changes in unrecognized tax benefits (as a percent) | (4.30%) | 0.60% |
Other (as a percent) | 2.80% | 0.30% |
Impact of valuation allowance | 23.00% | 80.00% |
Impact of tax rate changes (as a percent) | (2.40%) | |
Stock compensation (as a percent) | 0.30% | 0.60% |
Effective tax rate (as a percent) | (2.70%) | 46.50% |
Deferred tax assets: | ||
Compensation benefits | $ 157,715 | $ 144,084 |
State taxes | 1,909 | 2,861 |
State loss carryovers | 4,006 | 4,338 |
Investments in unconsolidated subsidiaries | 4,242 | 4,981 |
Deferred interest expense | 15,342 | |
Other | 3,407 | 2,945 |
Total deferred tax assets | 186,621 | 159,209 |
Valuation allowance | (143,764) | (109,718) |
Net deferred tax assets | 42,857 | 49,491 |
Deferred tax liabilities: | ||
Depreciation and amortization | 45,239 | 68,665 |
Debt discount | 17,876 | 4,512 |
Deferred gain on debt | 4,376 | |
Other | 517 | |
Total deferred tax liabilities | 63,632 | 77,553 |
Net deferred tax liabilities | (20,775) | (28,062) |
Valuation allowance | ||
Increase in valuation allowance | $ 34,000 | 105,800 |
Tax Act decrease in valuation allowance | $ (53,600) | |
Number of years of pre-tax losses | 3 years | 3 years |
Valuation allowance against majority of deferred tax assets | $ 109,700 | |
Valuation allowance charge | $ 192,300 | |
Other Comprehensive Income (Loss) | ||
Valuation allowance | ||
Increase in valuation allowance | $ 13,700 | |
Income Tax Expense | ||
Valuation allowance | ||
Increase in valuation allowance | $ 20,400 |
INCOME TAXES - Credits (Details
INCOME TAXES - Credits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Tax credit carryovers | |||
Operating Loss Carryforwards | $ 281,300 | ||
Long-term liabilities relating to uncertain tax positions | 17,100 | ||
Unrecognized tax benefits | 13,822 | $ 20,764 | $ 16,477 |
Gross accrued interest and penalties | 3,300 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 6,900 | ||
Decreases in unrecognized tax benefits | 1,900 | ||
Unrecognized Tax Benefits, Interest on Income Taxes Expense | (600) | 1,100 | |
Unrecognized Tax Benefits, Income Tax Penalties Expense | (300) | 300 | |
Net accrued interest and penalties | 3,300 | $ 4,300 | |
State | |||
Tax credit carryovers | |||
Amount of tax credit carryovers | $ 500 |
INCOME TAXES - Unrecognized (De
INCOME TAXES - Unrecognized (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Balance at beginning of fiscal year | $ 20,764 | $ 16,477 |
Increases based on tax positions in prior year | 84 | 3,299 |
Decreases based on tax positions in prior year | (4,261) | |
Increases based on tax positions in current year | 1,124 | 1,642 |
Settlements | (511) | (164) |
Lapse of statute of limitations | (3,378) | (490) |
Balance at end of fiscal year | $ 13,822 | $ 20,764 |
EMPLOYEE BENEFITS (Details)
EMPLOYEE BENEFITS (Details) $ in Thousands | 12 Months Ended | |
Dec. 30, 2018USD ($)person | Dec. 31, 2017USD ($) | |
Pension plan | ||
EMPLOYEE BENEFITS | ||
Number of new participants | person | 0 | |
Further benefits | $ 0 | |
Value of contributions to plan | 8,885 | $ 8,711 |
Post-retirement plans | ||
EMPLOYEE BENEFITS | ||
Value of contributions to plan | 637 | 756 |
Supplemental retirement plans | ||
EMPLOYEE BENEFITS | ||
Value of contributions to plan | $ 8,900 | $ 8,700 |
EMPLOYEE BENEFITS - Reconciliat
EMPLOYEE BENEFITS - Reconciliations (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | |
Amounts recognized in the statement of financial position consist of: | ||||
Noncurrent liability | $ (655,310) | $ (599,763) | ||
Pension plan | ||||
Change in Benefit Obligation | ||||
Benefit obligation, beginning of year | $ 2,080,013 | $ 1,941,907 | ||
Interest cost | 79,154 | 85,468 | ||
Actuarial (gain)/loss | (126,540) | 152,353 | ||
Gross benefits paid | (111,640) | (99,715) | ||
Benefit obligation, end of year | 1,920,987 | 2,080,013 | ||
Changes in the fair value of the plan's Level 3 investment assets | ||||
Fair value of plan assets, beginning of year | 1,477,926 | 1,335,435 | ||
Actual return on plan assets | (115,192) | 233,495 | ||
Employer contribution | 8,885 | 8,711 | ||
Gross benefits paid | (111,640) | (99,715) | ||
Fair value of plan assets, end of year | 1,259,979 | 1,477,926 | ||
Funded Status | ||||
Fair value of plan assets | 1,477,926 | 1,335,435 | 1,259,979 | 1,477,926 |
Benefit obligations | (2,080,013) | (1,941,907) | (1,920,987) | (2,080,013) |
Funded status and amount recognized, end of year | (661,008) | (602,087) | ||
Amounts recognized in the statement of financial position consist of: | ||||
Current liability | (11,510) | (8,941) | ||
Noncurrent liability | (649,498) | (593,146) | ||
Amounts recognized in the statement of financial position | (661,008) | (602,087) | ||
Amounts recognized in accumulated other comprehensive income consist of: | ||||
Net actuarial loss/(gain) | 811,063 | 757,096 | ||
Amounts recognized in accumulated other comprehensive income | 811,063 | 757,096 | ||
Supplemental retirement plans | ||||
Changes in the fair value of the plan's Level 3 investment assets | ||||
Employer contribution | 8,900 | 8,700 | ||
Post-retirement plans | ||||
Change in Benefit Obligation | ||||
Benefit obligation, beginning of year | 7,625 | 7,403 | ||
Interest cost | 256 | 271 | ||
Plan participants' contributions | 10 | 12 | ||
Actuarial (gain)/loss | (417) | 707 | ||
Gross benefits paid | (647) | (768) | ||
Benefit obligation, end of year | 6,827 | 7,625 | ||
Changes in the fair value of the plan's Level 3 investment assets | ||||
Employer contribution | 637 | 756 | ||
Plan participants' contributions | 10 | 12 | ||
Gross benefits paid | (647) | (768) | ||
Funded Status | ||||
Benefit obligations | $ (7,625) | $ (7,403) | (6,827) | (7,625) |
Funded status and amount recognized, end of year | (6,827) | (7,625) | ||
Amounts recognized in the statement of financial position consist of: | ||||
Current liability | (1,015) | (1,008) | ||
Noncurrent liability | (5,812) | (6,617) | ||
Amounts recognized in the statement of financial position | (6,827) | (7,625) | ||
Amounts recognized in accumulated other comprehensive income consist of: | ||||
Net actuarial loss/(gain) | (7,334) | (7,820) | ||
Prior service cost/(credit) | (4,456) | (6,534) | ||
Amounts recognized in accumulated other comprehensive income | $ (11,790) | $ (14,354) |
EMPLOYEE BENEFITS - Retirement
EMPLOYEE BENEFITS - Retirement and Post retirement costs - (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
May 31, 2018 | Dec. 30, 2018 | Dec. 31, 2017 | |
Retirement expense for continuing operations | |||
Net pension expense | $ 11,114 | $ 13,404 | |
Proceeds from sale of real property location | $ 4,100 | ||
(Loss) on sale of real property location | 200 | ||
Pension plan | |||
Retirement expense for continuing operations | |||
Interest cost | 79,154 | 85,468 | |
Expected return on plan assets | (90,495) | (89,569) | |
Actuarial loss | 25,181 | 20,335 | |
Net pension expense | 13,840 | 16,234 | |
Post-retirement plans | |||
Retirement expense for continuing operations | |||
Interest cost | 256 | 271 | |
Net pension expense | (2,726) | $ (2,830) | |
Matching contributions | $ 2,500 |
EMPLOYEE BENEFITS - Contributio
EMPLOYEE BENEFITS - Contributions (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
May 31, 2018 | Dec. 30, 2018 | Dec. 31, 2017 | |
Medical cost trend rates | |||
Proceeds from sale of real property location | $ 4,100,000 | ||
(Loss) on sale of real property location | $ 200,000 | ||
Pension plan | |||
Weighted average assumptions used for valuing benefit obligations | |||
Discount rate (as a percent) | 4.42% | 3.91% | |
Weighted average assumptions used in calculating expense | |||
Expected long-term return on plan assets (as a percent) | 7.75% | 7.75% | |
Discount rate (as a percent) | 3.91% | 4.52% | |
Medical cost trend rates | |||
Value of contributions to plan | $ 8,885,000 | $ 8,711,000 | |
Voluntary cash contribution | 0 | $ 0 | |
Expected required pension contribution | 3,000,000 | ||
Gain or loss recognized on the contribution of property | 0 | ||
Expected benefit payments | |||
2,019 | 111,478,000 | ||
2,020 | 112,450,000 | ||
2,021 | 117,079,000 | ||
2,022 | 118,319,000 | ||
2,023 | 120,408,000 | ||
2024-2028 | 621,158,000 | ||
Total | $ 1,200,892,000 | ||
Post-retirement plans | |||
Weighted average assumptions used for valuing benefit obligations | |||
Discount rate (as a percent) | 4.15% | 3.60% | |
Weighted average assumptions used in calculating expense | |||
Discount rate (as a percent) | 3.60% | 3.95% | |
Medical cost trend rates | |||
Value of contributions to plan | $ 637,000 | $ 756,000 | |
Expected benefit payments | |||
2,019 | 1,036,000 | ||
2,020 | 925,000 | ||
2,021 | 822,000 | ||
2,022 | 736,000 | ||
2,023 | 656,000 | ||
2024-2028 | 2,241,000 | ||
Total | $ 6,416,000 |
EMPLOYEE BENEFITS - Pension Pla
EMPLOYEE BENEFITS - Pension Plan Assets (Details) - Pension plan | 12 Months Ended |
Dec. 30, 2018 | |
Equity securities | |
Contributions and Cash Flows [Line Items] | |
Target Allocation (as a percent) | 61.00% |
Debt securities | |
Contributions and Cash Flows [Line Items] | |
Target Allocation (as a percent) | 33.00% |
Real Estate | |
Contributions and Cash Flows [Line Items] | |
Target Allocation (as a percent) | 6.00% |
Minimum | |
Contributions and Cash Flows [Line Items] | |
Investment horizon of plan assets | 10 years |
EMPLOYEE BENEFITS - Fair value
EMPLOYEE BENEFITS - Fair value (Details) - Pension plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
EMPLOYEE BENEFITS | |||
Fair value of plan assets | $ 1,259,979 | $ 1,477,926 | $ 1,335,435 |
Cash and cash equivalents | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | 9,366 | 8,498 | |
Mutual funds | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | 139,978 | 478,565 | |
Common collective trust | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | $ 1,045,628 | $ 923,304 | |
U.S. equity funds | |||
EMPLOYEE BENEFITS | |||
Redemption notice period | 0 days | 0 days | |
International equity funds | |||
EMPLOYEE BENEFITS | |||
Redemption notice period | 0 days | 0 days | |
Real Estate | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | $ 55,398 | $ 58,050 | |
Private Equity | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | $ 9,609 | $ 9,509 | |
Minimum | Emerging markets equity funds | |||
EMPLOYEE BENEFITS | |||
Redemption notice period | 0 days | 0 days | |
Minimum | Fixed income funds | |||
EMPLOYEE BENEFITS | |||
Redemption notice period | 2 days | 2 days | |
Maximum | Emerging markets equity funds | |||
EMPLOYEE BENEFITS | |||
Redemption notice period | 5 days | 5 days | |
Maximum | Fixed income funds | |||
EMPLOYEE BENEFITS | |||
Redemption notice period | 5 days | 5 days | |
Level 1 | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | $ 149,344 | $ 487,063 | |
Level 1 | Cash and cash equivalents | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | 9,366 | 8,498 | |
Level 1 | Mutual funds | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | 139,978 | 478,565 | |
Level 3 | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | 65,007 | 67,559 | 65,680 |
Level 3 | Real Estate | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | 55,398 | 58,050 | 57,531 |
Level 3 | Private Equity | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | 9,609 | 9,509 | $ 8,149 |
NAV | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | 1,045,628 | 923,304 | |
NAV | Common collective trust | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | 1,045,628 | 923,304 | |
NAV | U.S. equity funds | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | 296,135 | 353,555 | |
NAV | International equity funds | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | 311,119 | $ 569,749 | |
NAV | Emerging markets equity funds | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | 153,927 | ||
NAV | Fixed income funds | |||
EMPLOYEE BENEFITS | |||
Fair value of plan assets | $ 284,447 |
EMPLOYEE BENEFITS - Investment
EMPLOYEE BENEFITS - Investment assets (Details) - Pension plan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
Changes in the fair value of the plan's Level 3 investment assets | ||
Fair value of plan assets, beginning of year | $ 1,477,926 | $ 1,335,435 |
Fair value of plan assets, end of year | 1,259,979 | 1,477,926 |
Level 3 | ||
Changes in the fair value of the plan's Level 3 investment assets | ||
Fair value of plan assets, beginning of year | 67,559 | 65,680 |
Realized gains | 4,531 | 4,632 |
Transfer in or out of level 3 | (8,601) | (4,614) |
Unrealized gains | 1,518 | 1,861 |
Fair value of plan assets, end of year | 65,007 | 67,559 |
Real Estate | ||
Changes in the fair value of the plan's Level 3 investment assets | ||
Fair value of plan assets, beginning of year | 58,050 | |
Fair value of plan assets, end of year | 55,398 | 58,050 |
Real Estate | Level 3 | ||
Changes in the fair value of the plan's Level 3 investment assets | ||
Fair value of plan assets, beginning of year | 58,050 | 57,531 |
Realized gains | 4,528 | 4,632 |
Transfer in or out of level 3 | (8,601) | (4,614) |
Unrealized gains | 1,421 | 501 |
Fair value of plan assets, end of year | 55,398 | 58,050 |
Private Equity | ||
Changes in the fair value of the plan's Level 3 investment assets | ||
Fair value of plan assets, beginning of year | 9,509 | |
Fair value of plan assets, end of year | 9,609 | 9,509 |
Private Equity | Level 3 | ||
Changes in the fair value of the plan's Level 3 investment assets | ||
Fair value of plan assets, beginning of year | 9,509 | 8,149 |
Realized gains | 3 | |
Unrealized gains | 97 | 1,360 |
Fair value of plan assets, end of year | $ 9,609 | $ 9,509 |
CASH FLOW INFORMATION - Cash, C
CASH FLOW INFORMATION - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 30, 2018 | Dec. 31, 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 | $ 21,906 | $ 99,387 | |
Restricted cash included in other assets | 28,649 | 31,967 | |
Cash, cash equivalents and restricted cash | $ 50,555 | $ 131,354 | $ 36,248 |
CASH FLOW INFORMATION - Non-cas
CASH FLOW INFORMATION - Non-cash activities (Details) $ in Thousands | 12 Months Ended | |
Dec. 30, 2018USD ($)item | Dec. 31, 2017USD ($) | |
Cash paid for interest and income taxes | ||
Interest paid (net of amount capitalized) | $ 43,313 | $ 68,861 |
Income taxes paid (net of refunds) | 13,935 | $ 12,437 |
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) | |
Number of properties sold | item | 1 | |
Gross gain on extinguishment of debt | $ 68,700 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Obligations by year (Details) - USD ($) $ in Thousands | Dec. 30, 2018 | Dec. 31, 2017 |
Purchase obligations | ||
2,019 | $ 35,371 | |
2,020 | 15,270 | |
2,021 | 9,742 | |
2,022 | 4,487 | |
2,023 | 3,394 | |
Total | 68,264 | |
Lease Obligation | ||
2,019 | 16,408 | |
2,020 | 11,921 | |
2,021 | 9,797 | |
2,022 | 10,178 | |
2,023 | 10,160 | |
Thereafter | 31,139 | |
Total | 89,603 | |
Sublease Income | ||
2,019 | (4,044) | |
2,020 | (1,306) | |
2,021 | (379) | |
2,022 | (334) | |
2,023 | (232) | |
Total | (6,295) | |
Net lease obligations | ||
2,019 | 12,364 | |
2,020 | 10,615 | |
2,021 | 9,418 | |
2,022 | 9,844 | |
2,023 | 9,928 | |
Thereafter | 31,139 | |
Total | 83,308 | |
Total | ||
2,019 | 50,075 | |
2,020 | 27,392 | |
2,021 | 20,278 | |
2,022 | 15,195 | |
2,023 | 14,018 | |
Thereafter | 36,900 | |
Total | 163,858 | |
Self-Insurance | ||
Workers' compensation obligations | ||
2,019 | 2,340 | |
2,020 | 1,507 | |
2,021 | 1,118 | |
2,022 | 864 | |
2,023 | 696 | |
Thereafter | 5,761 | |
Total | $ 12,286 | $ 13,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Purchases and Leases (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
Operating leases | ||
Total rental expense, included in other operating expenses, from continuing operations | $ 14.3 | $ 13.4 |
Sublease income from operating leases | $ 5 | $ 4.8 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Obligations disclosures (Details) - Self-Insurance - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Loss Contingencies [Line Items] | ||
Estimated Insurance Recoveries | $ 1.9 | $ 2.2 |
Additional disclosures | ||
Undiscounted ultimate losses of all self-insurance reserves related to our workers' compensation liabilities, net of insurance recoveries | $ 12.3 | $ 13 |
Discount rate of ultimate losses (as a percent) | 3.10% | 2.30% |
Present value of self-insurance reserves | $ 10.7 | $ 12.1 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Legal Proceedings (Details) $ in Millions | 1 Months Ended | 12 Months Ended |
Jan. 31, 2019USD ($) | Dec. 30, 2018USD ($)item | |
Letter of credit | ||
Contingencies | ||
Outstanding letters of credit | $ | $ 28.7 | |
"Sacramento Case" | ||
Contingencies | ||
Number of carriers | 5,000 | |
Number of phases | 3 | |
"Fresno Case" | ||
Contingencies | ||
Number of carriers | 3,500 | |
Number of phases | 2 | |
Forecast | Letter of credit | ||
Contingencies | ||
Outstanding letters of credit | $ | $ 26.7 | |
Letters of credit increase (decrease) | $ | $ (2) |
COMMON STOCK AND STOCK PLANS (D
COMMON STOCK AND STOCK PLANS (Details) | 12 Months Ended |
Dec. 30, 2018item | |
Class of Stock [Line Items] | |
Number of classes of common stock | 2 |
Minimum number of "Permitted Transferees" | 1 |
Minimum number of lineal descendants of Charles K. McClatchy who owns the beneficial interests of "Permitted Transferees" | 1 |
Common Class A | |
Class of Stock [Line Items] | |
Number of votes per share | 0.1 |
Percentage of Board of Directors selected from voting | 25.00% |
Common Class B | |
Class of Stock [Line Items] | |
Number of votes per share | 1 |
Percentage of Board of Directors selected from voting | 75.00% |
Minimum percentage of common stock outstanding before conversion | 25.00% |
Vote of the holders as a percentage of outstanding shares required for termination of the agreement | 80.00% |
COMMON STOCK AND STOCK PLANS -
COMMON STOCK AND STOCK PLANS - Plans and RSUs and SARs activity (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
May 31, 2017shares | Dec. 30, 2018USD ($)directoritem$ / sharesshares | Dec. 31, 2017director$ / sharesshares | May 31, 2012shares | |
Stock Plans Activity | ||||
Number of stock-based compensation plans | item | 2 | |||
Directors terminated | director | 1 | |||
Options/SARs | ||||
Outstanding at the beginning of the period (in shares) | 156,175 | 292,750 | ||
Expired (in shares) | (42,875) | (136,575) | ||
Outstanding at the end of the period (in shares) | 113,300 | 156,175 | ||
Options exercisable (in shares) | 113,300 | 156,175 | ||
Weighted Average Exercise Price | ||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 32.12 | $ 50.29 | ||
Expired (in dollars per share) | $ / shares | 32.09 | 71.07 | ||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 32.13 | $ 32.12 | ||
2004 Plan | ||||
Stock Plans Activity | ||||
Vesting period | 4 years | |||
Terms of award | 10 years | |||
RSU's | ||||
Granted (in shares) | 0 | |||
2012 Plan | Maximum | ||||
Stock Plans Activity | ||||
Terms of award | 10 years | |||
Director Deferral Program | ||||
Stock Plans Activity | ||||
Number of directors | director | 5 | 2 | ||
Deferred (in shares) | 22,500 | 9,000 | ||
Issued (in shares) | 27,000 | 36,000 | ||
SARs | ||||
Stock Plans Activity | ||||
Vesting period | 4 years | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Abstract] | ||||
Unrecognized compensation costs | $ | $ 0 | |||
RSUs | ||||
RSU's | ||||
Nonvested at the beginning of the period (in shares) | 245,794 | 204,145 | ||
Granted (in shares) | 278,130 | 254,405 | ||
Vested (in shares) | (167,722) | (206,776) | ||
Forfeited (in shares) | (24,602) | (5,980) | ||
Nonvested at the end of the period (in shares) | 331,600 | 245,794 | ||
Weighted Average Grant Date Fair Value | ||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 11.55 | $ 18.17 | ||
Granted (in dollars per share) | $ / shares | 8.90 | 9.99 | ||
Vested (in dollars per share) | $ / shares | 11.38 | 16.14 | ||
Forfeited (in dollars per share) | $ / shares | 9.54 | 12.86 | ||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 9.56 | $ 11.55 | ||
Additional disclosures | ||||
Total fair value | $ | $ 1,500 | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Abstract] | ||||
Unrecognized compensation costs | $ | $ 1,900 | |||
Period in which compensation costs will be recognized | 1 year 10 months 24 days | |||
RSUs | Maximum | ||||
Stock Plans Activity | ||||
Vesting period | 3 years | |||
Common Class A | 2004 Plan | ||||
Stock Plans Activity | ||||
Shares reserved for issuance to employees | 900,000 | |||
Common Class A | 2012 Plan | ||||
Stock Plans Activity | ||||
Shares reserved for issuance to employees | 500,000 | |||
Additional shares authorized | 500,000 | |||
Common Class A | Non-employee director | 2012 Plan | ||||
Stock Plans Activity | ||||
Outstanding grants (in shares) | 4,500 | |||
RSU's | ||||
Granted (in shares) | 4,500 |
COMMON STOCK AND STOCK PLANS _2
COMMON STOCK AND STOCK PLANS - Outstanding SARs (Details) - SARs | 12 Months Ended |
Dec. 30, 2018$ / sharesshares | |
Share Based Compensation Shares Authorized under Stock Option and SARs Exercise Price Range Outstanding Options [Abstract] | |
Number of Options/SARs (in shares) | shares | 113,300 |
Average Remaining Contractual Life | 2 years 1 month 10 days |
Weighted Average Exercise Price (in dollars per share) | $ 32.13 |
Options/SARs Exercisable | |
Number of Options/SARs (in shares) | shares | 113,300 |
Weighted Average Exercise Price (in dollars per share) | $ 32.13 |
Weighted average remaining contractual life | 2 years 1 month 6 days |
$24.60 - $40.80 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, low end of range (in dollars per share) | $ 24.60 |
Exercise price, high end of range (in dollars per share) | $ 40.80 |
Share Based Compensation Shares Authorized under Stock Option and SARs Exercise Price Range Outstanding Options [Abstract] | |
Number of Options/SARs (in shares) | shares | 113,300 |
Average Remaining Contractual Life | 2 years 1 month 10 days |
Weighted Average Exercise Price (in dollars per share) | $ 32.13 |
Options/SARs Exercisable | |
Number of Options/SARs (in shares) | shares | 113,300 |
Weighted Average Exercise Price (in dollars per share) | $ 32.13 |
COMMON STOCK AND STOCK PLANS _3
COMMON STOCK AND STOCK PLANS - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
COMMON STOCK AND STOCK PLANS | ||
Stock-based compensation expense | $ 2,057 | $ 2,475 |