Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | ||
Jun. 29, 2014 | Jul. 28, 2014 | Jul. 28, 2014 | |
Common Class A | Common Class B | ||
Entity Registrant Name | 'MCCLATCHY CO | ' | ' |
Entity Central Index Key | '0001056087 | ' | ' |
Document Type | '10-Q | ' | ' |
Document Period End Date | 29-Jun-14 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-28 | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 62,161,140 | 24,585,962 |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'Q2 | ' | ' |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 29, 2014 | Jun. 30, 2013 | Jun. 29, 2014 | Jun. 30, 2013 |
REVENUES - NET: | ' | ' | ' | ' |
Advertising | $189,212 | $203,489 | $369,311 | $396,657 |
Audience | 90,817 | 86,489 | 179,770 | 170,539 |
Other | 11,925 | 11,630 | 23,541 | 23,049 |
Revenues, total | 291,954 | 301,608 | 572,622 | 590,245 |
OPERATING EXPENSES: | ' | ' | ' | ' |
Compensation | 103,481 | 105,871 | 212,033 | 216,123 |
Newsprint, supplements and printing expenses | 29,127 | 30,131 | 56,447 | 60,232 |
Depreciation and amortization | 25,926 | 29,693 | 66,221 | 59,929 |
Other operating expenses | 106,113 | 105,756 | 215,312 | 203,987 |
Operating expenses, total | 264,647 | 271,451 | 550,013 | 540,271 |
OPERATING INCOME | 27,307 | 30,157 | 22,609 | 49,974 |
NON-OPERATING (EXPENSE) INCOME: | ' | ' | ' | ' |
Interest expense | -33,475 | -33,873 | -66,887 | -69,389 |
Interest income | 46 | 22 | 50 | 31 |
Equity income in unconsolidated companies, net | 7,410 | 11,968 | 16,968 | 21,129 |
Gains related to equity investments | 145,893 | ' | 145,893 | ' |
Loss on extinguishment of debt, net | ' | ' | ' | -12,770 |
Gain on sale of Miami property | ' | 10,013 | ' | 10,013 |
Other - net | 82 | 41 | 144 | 93 |
Non-operating (expense) income, total | 119,956 | -11,829 | 96,168 | -50,893 |
Income (loss) from continuing operations before income taxes | 147,263 | 18,328 | 118,777 | -919 |
Income tax provision | 55,615 | 7,367 | 43,191 | 1,317 |
INCOME (LOSS) FROM CONTINUING OPERATIONS | 91,648 | 10,961 | 75,586 | -2,236 |
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAXES | -1,699 | 791 | -1,479 | 1,247 |
NET INCOME (LOSS) | $89,949 | $11,752 | $74,107 | ($989) |
Basic: | ' | ' | ' | ' |
Income (loss) from continuing operations (in dollars per share) | $1.06 | $0.13 | $0.87 | ($0.02) |
Income (loss) from discontinued operations (in dollars per share) | ($0.02) | $0.01 | ($0.01) | $0.01 |
Net income (loss) per share (in dollars per share) | $1.04 | $0.14 | $0.86 | ($0.01) |
Diluted: | ' | ' | ' | ' |
Income (loss) from continuing operations (in dollars per share) | $1.03 | $0.13 | $0.85 | ($0.02) |
Income (loss) from discontinued operations (in dollars per share) | ($0.01) | $0.01 | ($0.01) | $0.01 |
Net income (loss) per share (in dollars per share) | $1.02 | $0.14 | $0.84 | ($0.01) |
Weighted average number of common shares used to calculate basic and diluted earnings per share: | ' | ' | ' | ' |
Basic (in shares) | 86,734 | 86,149 | 86,604 | 86,086 |
Diluted (in shares) | 88,593 | 86,797 | 88,513 | 86,086 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 29, 2014 | Jun. 30, 2013 | Jun. 29, 2014 | Jun. 30, 2013 |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) | ' | ' | ' | ' |
NET INCOME (LOSS) | $89,949 | $11,752 | $74,107 | ($989) |
Pension and post retirement plans: | ' | ' | ' | ' |
Unrealized net gain and other components of benefit plans, net of taxes of $(1,254), $(2,266), $(2,508) and $(4,516) | 1,881 | 3,398 | 3,763 | 6,773 |
Investment in unconsolidated companies: | ' | ' | ' | ' |
Other comprehensive income (loss), net of taxes of $(19), $45, $(503) and $487 | 29 | -68 | 754 | -731 |
Other comprehensive income | 1,910 | 3,330 | 4,517 | 6,042 |
Comprehensive income | $91,859 | $15,082 | $78,624 | $5,053 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 29, 2014 | Jun. 30, 2013 | Jun. 29, 2014 | Jun. 30, 2013 |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) | ' | ' | ' | ' |
Unrealized net gain (loss) and other components of benefit plans, taxes | ($1,254) | ($2,266) | ($2,508) | ($4,516) |
Other comprehensive income (loss), taxes | ($19) | $45 | ($503) | $487 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 29, 2014 | Dec. 29, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $265,330 | $80,811 |
Trade receivables (net of allowances of $4,836 in 2014 and $6,040 in 2013) | 121,201 | 167,490 |
Other receivables | 9,904 | 10,757 |
Newsprint, ink and other inventories | 24,487 | 26,539 |
Deferred income taxes | 20,033 | 20,033 |
Assets held for sale | 8,017 | 3,504 |
Other current assets | 26,613 | 27,386 |
Total current assets | 475,585 | 336,520 |
Property, plant and equipment, net | 417,874 | 458,705 |
Intangible assets: | ' | ' |
Identifiable intangibles - net | 440,394 | 465,966 |
Goodwill | 996,115 | 1,013,002 |
Total intangible assets | 1,436,509 | 1,478,968 |
Investments and other assets: | ' | ' |
Investments in unconsolidated companies | 315,481 | 300,569 |
Other assets | 42,015 | 42,873 |
Total investments and other assets | 357,496 | 343,442 |
TOTAL ASSETS | 2,687,464 | 2,617,635 |
Current liabilities: | ' | ' |
Current portion of long-term debt | 28,800 | 28,548 |
Accounts payable | 40,360 | 49,565 |
Accrued pension liabilities | 8,418 | 33,418 |
Accrued compensation | 36,061 | 38,636 |
Income taxes payable | 60,200 | 1,362 |
Unearned revenue | 64,347 | 67,377 |
Accrued interest | 15,065 | 15,044 |
Other accrued liabilities | 16,197 | 14,386 |
Total current liabilities | 269,448 | 248,336 |
Non-current liabilities: | ' | ' |
Long-term debt | 1,495,357 | 1,493,323 |
Deferred income taxes | 134,393 | 153,339 |
Pension and postretirement obligations | 384,783 | 394,209 |
Financing obligations | 35,488 | 40,264 |
Other long-term obligations | 49,063 | 47,778 |
Total non-current liabilities | 2,099,084 | 2,128,913 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Additional paid-in capital | 2,225,109 | 2,221,834 |
Accumulated deficit | -1,603,266 | -1,677,373 |
Treasury stock at cost, 658,185 shares in 2014 and 11,207 shares in 2013 | -3,401 | -37 |
Accumulated other comprehensive loss | -300,384 | -304,901 |
Total stockholders' equity | 318,932 | 240,386 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 2,687,464 | 2,617,635 |
Common Class A | ' | ' |
Stockholders' equity: | ' | ' |
Common stock $.01 par value: | 628 | 615 |
Common Class B | ' | ' |
Stockholders' equity: | ' | ' |
Common stock $.01 par value: | $246 | $248 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jun. 29, 2014 | Dec. 29, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Trade receivables, allowance | $4,836 | $6,040 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Treasury stock, shares | 658,185 | 11,207 |
Common Class A | ' | ' |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 62,815,324 | 61,544,524 |
Common Class B | ' | ' |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 24,585,962 | 24,800,962 |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 29, 2014 | Jun. 30, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income (loss) | $74,107 | ($989) |
Less income (loss) from discontinued operations, net of tax | -1,479 | 1,247 |
Income (loss) from continuing operations | 75,586 | -2,236 |
Reconciliation to net cash from operating activities: | ' | ' |
Depreciation and amortization | 66,221 | 59,929 |
Loss on disposal of equipment (including impairments) | 1,398 | 2,149 |
Contribution to qualified defined benefit pension plan | -25,000 | -7,500 |
Retirement benefit expense | 2,315 | 6,081 |
Stock-based compensation expense | 1,574 | 1,738 |
Equity income in unconsolidated companies | -16,968 | -21,129 |
Gains related to equity investments | -145,893 | ' |
Distributions of income from equity investments | 147,730 | ' |
Loss on extinguishment of debt | ' | 12,770 |
Gain on disposal of Miami property | ' | -10,013 |
Other | -2,646 | -2,363 |
Changes in certain assets and liabilities: | ' | ' |
Trade receivables | 42,754 | 43,966 |
Inventories | 826 | 5,180 |
Other assets | -305 | -5,715 |
Accounts payable | -8,546 | -10,313 |
Accrued compensation | -3,539 | 938 |
Income taxes | 31,320 | 6,917 |
Accrued interest | 21 | -3,686 |
Other liabilities | -366 | 2,758 |
Net cash provided by continuing operations | 166,482 | 79,471 |
Net cash provided by discontinued operations | 126 | 1,421 |
Net cash provided by operating activities | 166,608 | 80,892 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchases of property, plant and equipment | -14,189 | -19,363 |
Proceeds from sale of property, plant and equipment and other | 564 | 1,185 |
Proceeds from redemption of certificates of deposit | ' | 2,210 |
Distributions from equity investments | ' | 1,890 |
Contributions to equity investments | -1,500 | -1,319 |
Equity investments and other-net | 1,691 | -1,500 |
Net cash used in continuing operations | -13,434 | -16,897 |
Net cash provided by discontinued operations | 33,369 | ' |
Net cash provided by (used in) investing activities | 19,935 | -16,897 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Repurchase of public notes and related expenses | ' | -154,781 |
Other | -2,024 | -522 |
Net cash used in continuing operations | -2,024 | -155,303 |
Increase (decrease) in cash and cash equivalents | 184,519 | -91,308 |
Cash and cash equivalents at beginning of period | 80,811 | 113,088 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $265,330 | $21,780 |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | |||||||||||||||
Jun. 29, 2014 | ||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||||||||
1. SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||
Business and Basis of Accounting | ||||||||||||||||
The McClatchy Company (the “Company,” “we,” “us” or “our”) is a leading news, advertising and information provider, offering a wide array of print and digital products in each of the markets we serve. As one of the largest newspaper companies in the country, based on daily circulation, our continuing operations include 29 daily newspapers, community newspapers, websites, mobile news and advertising, niche publications, direct marketing and direct mail services. Our largest newspapers include the (Fort Worth) Star-Telegram, The Sacramento Bee, The Kansas City Star, the Miami Herald, The Charlotte Observer and The (Raleigh) News & Observer. We are listed on the New York Stock Exchange under the symbol MNI. | ||||||||||||||||
We also own a portfolio of premium digital assets, including 15.0% of CareerBuilder LLC, which operates the nation’s largest online jobs website, CareerBuilder.com; 25.6% of Classified Ventures, LLC, which operates the auto website Cars.com; and 33.3% of HomeFinder.com, LLC, which operates the online real estate website HomeFinder.com. See Note 3, Investments in Unconsolidated Companies for further discussion. | ||||||||||||||||
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States and pursuant to the rules and regulation of the Securities and Exchange Commission requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The condensed consolidated financial statements include the Company and our subsidiaries. Intercompany items and transactions are eliminated. | ||||||||||||||||
In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, that are necessary to present fairly our financial position, results of operations, and cash flows for the interim periods presented. The financial statements contained in this report are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 29, 2013 ( “Form 10-K”). The fiscal periods included herein comprise 13 weeks for the second-quarter periods and 26 weeks for the six month periods. For purposes of presentation only, we updated the term “circulation” to “audience” as it releases to our discussion of revenues. The term “circulation” was used in prior filings with the Securities and Exchange Commission and no other changes were made in conjunction with this language change. | ||||||||||||||||
Recent Business Developments | ||||||||||||||||
Sale of Anchorage Daily News, Inc. | ||||||||||||||||
On May 5, 2014, we completed the sale of the outstanding capital stock of the Anchorage Daily News, Inc. (“Anchorage”) for $34 million in cash. In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205-20, “Discontinued Operations”, the financial results of Anchorage have been reported as a discontinued operation in our condensed consolidated financial statements for the periods presented. For a more complete discussion of the transaction, refer to Note 2, Divestiture. | ||||||||||||||||
Investments in Unconsolidated Companies Activity | ||||||||||||||||
On April 1, 2014, Classified Ventures, LLC consummated the sale of its Apartments.com business for $585 million. Accordingly, during the quarter ending June 29, 2014, we recorded our share of the gain on the sale of approximately $144.2 million, before taxes. On April 1, 2014, we received a cash distribution of approximately $146.9 million from Classified Ventures, LLC, which is equal to our share of the net proceeds from the sale. See Note 3, Investments in Unconsolidated Companies. | ||||||||||||||||
On May 7, 2014, we transferred our partnership interest in McClatchy-Tribune Information Services (“MCT”) to TCA News Service LLC (“TCA”) for cash and for future newswire content. Concurrently, we entered into a contributor agreement with MCT pursuant to which we will continue to be a contributor of newswire content to MCT for an agreed upon rate, and we will receive newswire content from MCT or its successor at no cost for approximately 10 years. We recognized a $3.1 million intangible asset with respect to the content we will receive from MCT at no cost under these agreements and a $1.7 million gain on sale of the equity investment. See Note 3, Investments in Unconsolidated Companies. | ||||||||||||||||
On August 5, 2014, we, along with the remaining partners in Classified Ventures, LLC, have entered into a definitive agreement to sell all of the ownership interests in Classified Ventures, LLC to Gannett Co., Inc. for a price that values Classified Ventures, LLC at $2.5 billion. Our portion of the cash proceeds is estimated to be approximately $640 million. See Note 8, Subsequent Event for further discussion. | ||||||||||||||||
Reclassifications | ||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation in our condensed consolidated financial statements, which consists of the effects of reclassifications from the presentation of Anchorage as a discontinued operation. | ||||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||
We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: | ||||||||||||||||
Level 1 – Unadjusted quoted prices available in active markets for identical investments as of the reporting date. | ||||||||||||||||
Level 2 – Observable inputs to the valuation methodology are other than Level 1 inputs and are either directly or indirectly observable as of the reporting date and fair value can be determined through the use of models or other valuation methodologies. | ||||||||||||||||
Level 3 – Inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability, and the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk. | ||||||||||||||||
Our policy is to recognize significant transfers between levels at the actual date of the event or circumstance that caused the transfer. The following methods and assumptions were used to estimate the fair value of each class of financial instruments: | ||||||||||||||||
Cash and cash equivalents, accounts receivable, and accounts payable. The carrying amount of these items approximates fair value. | ||||||||||||||||
Long-term debt. The fair value of our long-term debt is determined using quoted market prices and other inputs that were derived from available market information, including the current market activity of our publicly-traded notes and bank debt, trends in investor demand 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 June 29, 2014, the estimated fair value and carrying value of our long-term debt was $1.7 billion and $1.5 billion, respectively. | ||||||||||||||||
Certain assets are measured at fair value on a nonrecurring basis; that is, they are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Our non-financial assets measured at fair value on a nonrecurring basis in the accompanying condensed consolidated balance sheets as of June 29, 2014, were assets held for sale, goodwill, intangible assets not subject to amortization and equity method investments. All of these were 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. | ||||||||||||||||
Property, plant and equipment | ||||||||||||||||
The decrease in property, plant and equipment during the six months ended June 29, 2014, is primarily related to the sale of Anchorage, which is presented as a discontinued operation. See Note 2, Divestiture, below for further discussion of the transaction. During the six months ended June 29, 2014, we also completed the acquisition of a new production facility, which was valued at $6.5 million. In addition, during the six months ended June 29, 2014, we incurred $13.5 million in accelerated depreciation (i) related to the production equipment associated with outsourcing our printing process at one newspaper and (ii) resulting from moving the printing operations for another newspaper to the new production facility. No similar transactions were recorded during the quarter ended June 29, 2014. During the quarter and six months ended June 30, 2013, we incurred $1.8 million and $3.9 million in accelerated depreciation primarily related to our Miami operations move. | ||||||||||||||||
Depreciation expense with respect to property, plant and equipment is summarized below: | ||||||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||||
June 29, | June 30, | June 29, | June 30, | |||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Depreciation expense | $ | 11,567 | $ | 15,442 | $ | 37,549 | $ | 31,427 | ||||||||
Assets held for sale | ||||||||||||||||
The increase in assets held for sale during the six months ended June 29, 2014, related primarily to identifying and beginning to actively market for sale one of our production facilities for a newspaper at which we outsourced our printing to a third-party. These assets consisted primarily of undeveloped land and buildings. In connection with the classification to assets held for sale, the carrying value of the land and office buildings were reduced to their estimated fair value less selling costs, as determined based on the current market conditions and the selling prices. As a result, an impairment charge of $0.1 million and $1.0 million was recorded in the quarter and six months ended June 29, 2014, and is included in other operating expenses on the condensed consolidated statements of operations. | ||||||||||||||||
Intangible Assets and Goodwill | ||||||||||||||||
Intangible assets (primarily advertiser lists, subscriber lists and developed technology), mastheads and goodwill consisted of the following: | ||||||||||||||||
December 29, | Other | Amortization | June 29, | |||||||||||||
(in thousands) | 2013 | Adjustments | Expense | 2014 | ||||||||||||
Intangible assets subject to amortization | $ | 835,461 | $ | -2,207 | $ | — | $ | 833,254 | ||||||||
Accumulated amortization | -567,737 | 5,307 | -28,672 | -591,102 | ||||||||||||
267,724 | 3,100 | -28,672 | 242,152 | |||||||||||||
Mastheads | 198,242 | — | — | 198,242 | ||||||||||||
Goodwill | 1,013,002 | -16,887 | — | 996,115 | ||||||||||||
Total | $ | 1,478,968 | $ | -13,787 | $ | -28,672 | $ | 1,436,509 | ||||||||
During the six months ended June 29, 2014, we sold Anchorage, resulting in the removal of the applicable intangible assets subject to amortization of approximately $5.3 million, accumulated amortization of approximately $5.3 million, and goodwill of approximately $16.9 million from our condensed consolidated balance sheet. In addition, in the six months ended June 29, 2014, we acquired an intangible asset of $3.1 million related to the contributor agreement we entered into with MCT in which we will receive MCT newswire content, at no cost, over approximately 10 years. See Recent Business Developments above regarding both of these transactions. | ||||||||||||||||
Amortization expense with respect to intangible assets is summarized below: | ||||||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||||
June 29, | June 30, | June 29, | June 30, | |||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Amortization expense | $ | 14,359 | $ | 14,251 | $ | 28,672 | $ | 28,502 | ||||||||
The estimated amortization expense for the remainder of fiscal year 2014 and the five succeeding fiscal years is as follows: | ||||||||||||||||
Amortization | ||||||||||||||||
Expense | ||||||||||||||||
Year | (in thousands) | |||||||||||||||
2014 (remainder) | $ | 24,293 | ||||||||||||||
2015 | 48,383 | |||||||||||||||
2016 | 48,012 | |||||||||||||||
2017 | 48,843 | |||||||||||||||
2018 | 47,268 | |||||||||||||||
2019 | 23,768 | |||||||||||||||
Accumulated Other Comprehensive Loss | ||||||||||||||||
Our accumulated other comprehensive loss (“AOCL”) and reclassifications from AOCL, net of tax, consisted of the following: | ||||||||||||||||
(in thousands) | Minimum | Other | Total | |||||||||||||
Pension and | Comprehensive | |||||||||||||||
Post- | Loss Related to | |||||||||||||||
Retirement | Equity | |||||||||||||||
Liability | Investments | |||||||||||||||
Beginning balance - December 29, 2013 | $ | -296,669 | $ | -8,232 | $ | -304,901 | ||||||||||
Other comprehensive income before reclassifications | — | 754 | 754 | |||||||||||||
Amounts reclassified from AOCL | 3,763 | — | 3,763 | |||||||||||||
Other comprehensive income | 3,763 | 754 | 4,517 | |||||||||||||
Ending balance - June 29, 2014 | $ | -292,906 | $ | -7,478 | $ | -300,384 | ||||||||||
Amount Reclassified from AOCL (in thousands) | ||||||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||||
June 29, | June 30, | June 29, | June 30, | Affected Line in the Condensed | ||||||||||||
Consolidated Statements of | ||||||||||||||||
AOCL Component | 2014 | 2013 | 2014 | 2013 | Operations | |||||||||||
Minimum pension and post-retirement liability | $ | 3,135 | $ | 5,664 | $ | 6,271 | $ | 11,289 | Compensation | |||||||
-1,254 | -2,266 | -2,508 | -4,516 | Income tax provision | ||||||||||||
$ | 1,881 | $ | 3,398 | $ | 3,763 | $ | 6,773 | Net of tax | ||||||||
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. | ||||||||||||||||
We recognize accrued interest related to unrecognized tax benefits in interest expense. Accrued penalties are recognized as a component of income tax expense. | ||||||||||||||||
We expect to pay approximately $65 million in income taxes, as a result of the gain on sale of Apartments.com by Classified Ventures, LLC and our sale of Anchorage, primarily during the third quarter of 2014. | ||||||||||||||||
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 options, restricted stock units and restricted stock and are computed using the treasury stock method. Anti-dilutive common stock equivalents are excluded from diluted EPS. The weighted average anti-dilutive stock options that could potentially dilute basic EPS in the future, but were not included in the weighted average share calculation, consisted of the following: | ||||||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||||
June 29, | June 30, | June 29, | June 30, | |||||||||||||
(shares in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Anti-dilutive stock options | 1,612 | 5,619 | 1,659 | 6,048 | ||||||||||||
Cash Flow Information | ||||||||||||||||
Cash paid for interest and income taxes consisted of the following: | ||||||||||||||||
Six Months Ended | ||||||||||||||||
June 29, | June 30, | |||||||||||||||
(in thousands) | 2014 | 2013 | ||||||||||||||
Interest paid (net of amount capitalized) | $ | 61,198 | $ | 65,736 | ||||||||||||
Income taxes paid (net of refunds) | 11,381 | -2,861 | ||||||||||||||
Other non-cash investing activities from continuing operations, related to the recognition of an intangible asset as of June 29, 2014, were $3.1 million. Other non-cash investing activities from continuing operations as of June 29, 2014, and June 30, 2013, related to purchases of property, plant and equipment (“PP&E”) on credit, were $0.4 million and $1.1 million, respectively. | ||||||||||||||||
Recently Issued Accounting Pronouncements | ||||||||||||||||
In April 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. ASU 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. It is effective for annual periods beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in financial statements previously issued. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. | ||||||||||||||||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”. ASU 2014-09 outlines a new, single comprehensive model from entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. It is effective for annual periods beginning on or after December 15, 2016, and early adoption is not permitted. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. |
DIVESTITURE
DIVESTITURE | 6 Months Ended | |||||||||||||
Jun. 29, 2014 | ||||||||||||||
DIVESTITURE | ' | |||||||||||||
DIVESTITURE | ' | |||||||||||||
2. DIVESTITURE | ||||||||||||||
On May 5, 2014, we completed the sale of the outstanding capital stock of Anchorage to Alaska Dispatch Publishing, LLC for $34 million in cash. The financial results of Anchorage have been reported as discontinued operations on our condensed consolidated financial statements for all periods presented herein. | ||||||||||||||
As of December 29, 2013, the major classes of Anchorage’s assets and liabilities included in discontinued operations were as follows: | ||||||||||||||
December 29, | ||||||||||||||
(in thousands) | 2013 | |||||||||||||
Current assets | $ | 5,390 | ||||||||||||
Property, plant and equipment, net | 8,362 | |||||||||||||
Intangible and other assets | 17,275 | |||||||||||||
Total assets | $ | 31,027 | ||||||||||||
Current liabilities | $ | 2,456 | ||||||||||||
Non current liabilities | 54 | |||||||||||||
Total liabilities | $ | 2,510 | ||||||||||||
The following table summarizes the financial information for the Anchorage’s operations for the quarters and six months ended June 29, 2014, and June 30, 2013: | ||||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||
June 29, | June 30, | June 29, | June 30, | |||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Revenues | $ | 2,651 | $ | 7,181 | $ | 9,186 | $ | 13,653 | ||||||
Income (loss) from discontinued operations, before taxes | $ | -446 | $ | 1,304 | $ | -48 | $ | 2,085 | ||||||
Income tax provision (benefit) | -198 | 513 | -20 | 838 | ||||||||||
Income (loss) from discontinued operations, net of tax, before loss on sale | $ | -248 | $ | 791 | $ | -28 | $ | 1,247 | ||||||
Gain on sale of discontinued operations | $ | 5,474 | $ | — | $ | 5,474 | $ | — | ||||||
Income tax provision | 6,925 | — | 6,925 | — | ||||||||||
Loss on sale of discontinued operations, net of tax | -1,451 | — | -1,451 | — | ||||||||||
Income (loss) from discontinued operations, net of tax | $ | -1,699 | $ | 791 | $ | -1,479 | $ | 1,247 | ||||||
Revenues from Anchorage for the quarters ended September 29, 2013, December 29, 2013 and for the full year ended December 29, 2013 were $6.5 million, $7.2 million and $27.4 million, respectively. |
INVESTMENTS_IN_UNCONSOLIDATED_
INVESTMENTS IN UNCONSOLIDATED COMPANIES | 6 Months Ended | |||||||||
Jun. 29, 2014 | ||||||||||
INVESTMENTS IN UNCONSOLIDATED COMPANIES | ' | |||||||||
INVESTMENTS IN UNCONSOLIDATED COMPANIES | ' | |||||||||
3. INVESTMENTS IN UNCONSOLIDATED COMPANIES | ||||||||||
The carrying value of investments in unconsolidated companies consisted of the following: | ||||||||||
(in thousands) | % Ownership | June 29, | December 29, | |||||||
Company | Interest | 2014 | 2013 | |||||||
CareerBuilder, LLC | 15 | $ | 223,065 | $ | 214,579 | |||||
Classified Ventures, LLC | 25.6 | 80,458 | 73,692 | |||||||
Seattle Times Company (C-Corporation) | 49.5 | — | — | |||||||
Ponderay (general partnership) | 27 | 9,470 | 8,443 | |||||||
Other | Various | 2,488 | 3,855 | |||||||
$ | 315,481 | $ | 300,569 | |||||||
On April 1, 2014, Classified Ventures, LLC consummated the sale of its Apartments.com business for $585 million. Accordingly, during the quarter ending June 29, 2014, we recorded our share of the net gain of approximately $144.2 million, before taxes, as gains related to equity investments in condensed consolidated statements of operations. On April 1, 2014, we received a cash distribution of approximately $146.9 million from Classified Ventures, LLC, which is equal to our share of the net proceeds from the sale. | ||||||||||
On May 7, 2014, we transferred our partnership interest in MCT to TCA for cash and future newswire content. Concurrently, we entered into a contributor agreement with MCT pursuant to which we both continue to be a contributor of newswire content to MCT for an agreed upon rate and we will receive newswire content from MCT or its successor at no cost for approximately 10 years. We recognized a $3.1 million intangible asset in the condensed consolidated balance sheets with respect to the content we will receive from MCT at no cost under these agreements and a $1.7 million gain on sale of the equity investment in the gains related to equity investments in the condensed consolidated statements of operations. | ||||||||||
On August 5, 2014, we, along with the remaining partners in Classified Ventures, LLC, have entered into a definitive agreement to sell all of the ownership interests in Classified Ventures, LLC to Gannett Co., Inc. for a price that values Classified Ventures, LLC at $2.5 billion. See Note 8, Subsequent Event for further discussion. | ||||||||||
During the quarter ended June 29, 2014, our proportionate share of net income from certain investments listed in the table above was greater than 20% of our condensed consolidated net income (loss) before taxes. Summarized condensed financial information, as provided to us by these certain investees, is as follows: | ||||||||||
Six Months Ended | ||||||||||
June 29, | June 30, | |||||||||
(in thousands) | 2014 | 2013 | ||||||||
Net revenues | $ | 666,164 | $ | 648,958 | ||||||
Gross profit | 563,861 | 543,490 | ||||||||
Operating income | 89,524 | 103,543 | ||||||||
Net income | 650,720 | 103,955 | ||||||||
LONGTERM_DEBT
LONG-TERM DEBT | 6 Months Ended | ||||||||||
Jun. 29, 2014 | |||||||||||
LONG-TERM DEBT | ' | ||||||||||
LONG-TERM DEBT | ' | ||||||||||
4. LONG-TERM DEBT | |||||||||||
Our long-term debt consisted of the following: | |||||||||||
Face Value | Carrying Value | ||||||||||
June 29, | June 29, | December 29, | |||||||||
(in thousands) | 2014 | 2014 | 2013 | ||||||||
Notes: | |||||||||||
9.00% senior secured notes due in 2022 | $ | 900,000 | $ | 900,000 | $ | 900,000 | |||||
4.625% notes due in 2014 | 28,965 | 28,800 | 28,548 | ||||||||
5.750% notes due in 2017 | 261,298 | 253,483 | 252,259 | ||||||||
7.150% debentures due in 2027 | 89,188 | 83,880 | 83,684 | ||||||||
6.875% debentures due in 2029 | 276,230 | 257,994 | 257,380 | ||||||||
Long-term debt | $ | 1,555,681 | $ | 1,524,157 | $ | 1,521,871 | |||||
Less current portion | 28,800 | 28,548 | |||||||||
Total long-term debt, net of current | $ | 1,495,357 | $ | 1,493,323 | |||||||
Our outstanding notes are stated net of unamortized discounts, if applicable, totaling $31.5 million and $33.8 million as of June 29, 2014, and December 29, 2013, respectively. | |||||||||||
Debt Repurchases | |||||||||||
We had no debt repurchases during the quarter or six months ended June 29, 2014, or during the quarter ended June 30, 2013. During the six months ended June 30, 2013, we redeemed or repurchased a total of $145.9 million of notes through the completion of our debt refinancing described below and through privately negotiated transactions. We redeemed or repurchased all of these notes at a price greater than par value and wrote off historical discounts related to the notes we purchased, which resulted in a loss on extinguishment of debt of $12.8 million in the six months ended June 30, 2013. | |||||||||||
Credit Agreement | |||||||||||
Our Third Amended and Restated Credit Agreement (“Credit Agreement”), dated as of December 18, 2012, is secured by a first-priority security interest in certain of our assets as described below. As of June 29, 2014, there were $39.9 million face amounts of standby letters of credit outstanding under the Credit Agreement. There were no borrowings outstanding under the Credit Agreement as of June 29, 2014. | |||||||||||
Under the Credit Agreement, we may borrow at either the London Interbank Offered Rate plus a spread ranging from 275 basis points to 425 basis points, or at a base rate plus a spread ranging from 175 basis points to 325 basis points, in each case based upon our consolidated total leverage ratio. The Credit Agreement provides for a commitment fee payable on the unused revolving credit ranging from 50 basis points to 62.5 basis points, based upon our consolidated total leverage ratio. | |||||||||||
Senior Secured Notes and Indenture | |||||||||||
In December 2012, we issued $910 million aggregate principal amount of 9.00% Senior Secured Notes due in 2022 (“9.00% Notes”). We received approximately $889 million net of financing costs in the offering and used the net proceeds, as well as cash on hand, to repurchase all of our outstanding $846 million in aggregate principal amount of the 11.50% Senior Secured Notes due in 2017 (“11.50% Notes”) in two separate transactions. In December 2012, we repurchased $762.4 million of the 11.50% Notes pursuant to a cash tender offer done in connection with the issuance of the 9.00% Notes. In the quarter ended June 30, 2013, we redeemed the remaining $83.6 million aggregate principal amount of 11.50% Notes not tendered in the tender offer and we recorded a loss on the extinguishment of debt of approximately $9.6 million primarily related to the premiums paid for the notes during the redemption. | |||||||||||
Our 9.00% Notes were issued in a private placement. In July 2013, the original 9.00% Notes (and associated guarantees) were exchanged, in a registered exchange, for new 9.00% Notes (and associated guarantees) that have terms substantially identical to the original notes except that the 9.00% Notes issued in the exchange are not subject to transfer restrictions and do not contain registration rights. | |||||||||||
Substantially all of our subsidiaries guarantee the obligations under the 9.00% Notes and the Credit Agreement. We own 100% of each of the guarantor subsidiaries and we have no significant independent assets or operations separate from the subsidiaries that guarantee our 9.00% Notes and the Credit Agreement. The guarantees provided by the guarantor subsidiaries are full and unconditional and joint and several, and the subsidiaries other than the subsidiary guarantors are minor. | |||||||||||
In addition, we have granted a security interest to the banks that are a party to the Credit Agreement and the trustee under the indenture governing the 9.00% Notes that include, but are not limited to, intangible assets, inventory, receivables and certain minority investments as collateral for the debt. The security interest does not include any PP&E, leasehold interests or improvements with respect to such PP&E which would be reflected on our condensed consolidated balance sheets or shares of stock and indebtedness of our subsidiaries. | |||||||||||
Covenants under the Senior Debt Agreements | |||||||||||
The financial covenants under the Credit Agreement require us to comply with a maximum consolidated total leverage ratio and a minimum consolidated interest coverage ratio, each measured quarterly. As of June 29, 2014, and for the remainder of the term of the Credit Agreement, we are required to maintain a consolidated total leverage ratio of not more than 6.00 to 1.00 and a consolidated interest coverage ratio of at least 1.50 to 1.00. As of June 29, 2014, we were in compliance with all financial debt covenants. | |||||||||||
The Credit Agreement also prohibits the payment of a dividend if a payment would not be permitted under the indenture for the 9.00% Notes (discussed below). Dividends under the indenture for the 9.00% Notes are allowed if the consolidated leverage ratio (as defined in the indenture) is less than 5.25 to 1.00 and we have sufficient amounts under our restricted payments basket (as defined in the indenture). | |||||||||||
The indenture for the 9.00% Notes and the Credit Agreement include a number of restrictive covenants that are applicable to us and our restricted subsidiaries. The covenants are subject to a number of important exceptions and qualifications set forth in those agreements. These covenants include, among other things, restrictions on our ability to incur additional debt; make investments and other restricted payments; pay dividends on capital stock or redeem or repurchase capital stock or certain of our outstanding notes or debentures prior to stated maturity; sell assets or enter into sale/leaseback transactions; create specified liens; create or permit restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions; engage in certain transactions with affiliates; and consolidate or merge with or into other companies or sell all or substantially all of the Company’s and our subsidiaries’ assets, taken as a whole. |
EMPLOYEE_BENEFITS
EMPLOYEE BENEFITS | 6 Months Ended | ||||||||||||||||
Jun. 29, 2014 | |||||||||||||||||
EMPLOYEE BENEFITS | ' | ||||||||||||||||
EMPLOYEE BENEFITS | ' | ||||||||||||||||
5. EMPLOYEE BENEFITS | |||||||||||||||||
We maintain a frozen noncontributory qualified defined benefit pension plan (“Pension Plan”) which covers certain eligible current and former employees. No new participants may enter the Pension Plan and no further benefits will accrue. However, years of service continue to count toward early retirement calculations and vesting of benefits previously earned. | |||||||||||||||||
We also have a limited number of supplemental retirement plans to provide certain key current and former employees with additional retirement benefits. These plans are funded on a pay-as-you-go basis and the accrued pension obligation is largely included in other long-term obligations. | |||||||||||||||||
The elements of retirement expense are as follows: | |||||||||||||||||
Quarters Ended | Six Months Ended | ||||||||||||||||
June 29, | June 30, | June 29, | June 30, | ||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Pension plans: | |||||||||||||||||
Service cost | $ | 2,007 | $ | 1,373 | $ | 4,015 | $ | 2,773 | |||||||||
Interest cost | 22,751 | 21,173 | 45,502 | 42,298 | |||||||||||||
Expected return on plan assets | (26,865 | ) | (25,252 | ) | (53,730 | ) | (50,527 | ) | |||||||||
Prior service cost amortization | 3 | 7 | 6 | 7 | |||||||||||||
Actuarial loss | 4,002 | 6,404 | 8,004 | 12,779 | |||||||||||||
Net pension expense | 1,898 | 3,705 | 3,797 | 7,330 | |||||||||||||
Net post-retirement credit | (741 | ) | (624 | ) | (1,482 | ) | (1,249 | ) | |||||||||
Net retirement expense | $ | 1,157 | $ | 3,081 | $ | 2,315 | $ | 6,081 | |||||||||
In January 2014 and January 2013, we contributed $25.0 million and $7.5 million, respectively, of cash to the Pension Plan. We do not intend to make any additional material contributions to the Pension Plan during the remainder of fiscal year 2014. | |||||||||||||||||
We have a deferred compensation plan (“401(k) plan”), which enables qualified employees to voluntarily defer compensation. The 401(k) plan includes a matching company contribution and a supplemental contribution that is tied to our performance. We suspended our matching contribution to the 401(k) plan in 2009 and as of June 29, 2014, we have not reinstated that benefit. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 29, 2014 | |
COMMITMENTS AND CONTINGENCIES | ' |
COMMITMENTS AND CONTINGENCIES | ' |
6. COMMITMENTS AND CONTINGENCIES | |
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. However, we currently believe, after reviewing such actions with counsel, that the expected outcome of pending actions will not have a material effect on our condensed consolidated financial statements. No material amounts for any losses from litigation that may ultimately occur have been recorded in the condensed consolidated financial statements as we believe that any such losses are not probable. | |
We have certain indemnification obligations related to the sale of assets including but not limited to insurance claims and multi-employer pension plans of disposed newspaper operations. We believe the remaining obligations related to disposed assets will not be material to our financial position, results of operations or cash flows. | |
As of June 29, 2014, we had $39.9 million of standby letters of credit secured under the Credit Agreement (see Note 4, Long-Term Debt, for further discussion). |
STOCK_PLANS
STOCK PLANS | 6 Months Ended | |||||||||||||
Jun. 29, 2014 | ||||||||||||||
STOCK PLANS | ' | |||||||||||||
STOCK PLANS | ' | |||||||||||||
7. STOCK PLANS | ||||||||||||||
Stock Plans Activity | ||||||||||||||
The following table summarizes the restricted stock units (“RSUs”) activity during the six months ended June 29, 2014: | ||||||||||||||
Weighted Average | ||||||||||||||
RSUs | Grant Date Fair Value | |||||||||||||
Nonvested - December 29, 2013 | 1,231,650 | $2.50 | ||||||||||||
Granted | 706,950 | $4.82 | ||||||||||||
Vested | -486,150 | $2.66 | ||||||||||||
Forfeited | -30,300 | $2.53 | ||||||||||||
Nonvested - June 29, 2014 | 1,422,150 | $3.60 | ||||||||||||
The total fair value of the RSUs that vested during the six months ended June 29, 2014, was $2.6 million. | ||||||||||||||
The following table summarizes the stock appreciation rights (“SARs”) activity during the six months ended June 29, 2014: | ||||||||||||||
Weighted | Aggregate | |||||||||||||
Average | Intrinsic | |||||||||||||
Options/ | Exercise | Value | ||||||||||||
SARs | Price | (in thousands) | ||||||||||||
Outstanding December 29, 2013 | 6,110,500 | $9.69 | $2,384 | |||||||||||
Exercised | (568,250 | ) | $3.07 | $1,198 | ||||||||||
Forfeited | (63,500 | ) | $3.39 | |||||||||||
Expired | (296,500 | ) | $30.84 | |||||||||||
Outstanding June 29, 2014 | 5,182,250 | $9.28 | $10,205 | |||||||||||
Stock-Based Compensation | ||||||||||||||
All stock-based payments, including grants of stock appreciation rights, restricted stock units and common stock under equity incentive plans, are recognized in the financial statements based on their grant date fair values. At June 29, 2014, we had three stock-based compensation plans. Stock-based compensation expenses are reported in the compensation line item in the condensed consolidated statements of operations. Total stock-based compensation expense, for the periods presented in this report, are as follows: | ||||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||
June 29, | June 30, | June 29, | June 30, | |||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Stock-based compensation expense | $ | 627 | $ | 635 | $ | 1,574 | $ | 1,738 | ||||||
SUBSEQUENT_EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Jun. 29, 2014 | |
SUBSEQUENT EVENT | ' |
SUBSEQUENT EVENT | ' |
8. SUBSEQUENT EVENT | |
On August 5, 2014, we, along with the remaining partners in Classified Ventures, LLC, have entered into a definitive agreement to sell all of the ownership interests in Classified Ventures, LLC to Gannett Co., Inc. for a price that values Classified Ventures, LLC at $2.5 billion. This transaction is expected to close by the end of fiscal year 2014 and accordingly, we will record a gain on sale of our interest in Classified Ventures, LLC during the period it closes. Our portion of the cash proceeds is expected to be approximately $640 million. Upon close of the transaction, we will enter into a new, five-year affiliate agreement with Cars.com that will allow us to continue to sell Cars.com products and services exclusively in our local markets. In accordance with our bond indenture for our 9.00% Notes, we will offer the after-tax proceeds from this transaction, to the extent that they are not reinvested within 365 days of the closing of the transaction, in an offering to repurchase those notes at par. The 9.00% Notes are currently trading at a premium. |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | |||||||||||||||
Jun. 29, 2014 | ||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||||||||
Business and Basis of Accounting | ' | |||||||||||||||
Business and Basis of Accounting | ||||||||||||||||
The McClatchy Company (the “Company,” “we,” “us” or “our”) is a leading news, advertising and information provider, offering a wide array of print and digital products in each of the markets we serve. As one of the largest newspaper companies in the country, based on daily circulation, our continuing operations include 29 daily newspapers, community newspapers, websites, mobile news and advertising, niche publications, direct marketing and direct mail services. Our largest newspapers include the (Fort Worth) Star-Telegram, The Sacramento Bee, The Kansas City Star, the Miami Herald, The Charlotte Observer and The (Raleigh) News & Observer. We are listed on the New York Stock Exchange under the symbol MNI. | ||||||||||||||||
We also own a portfolio of premium digital assets, including 15.0% of CareerBuilder LLC, which operates the nation’s largest online jobs website, CareerBuilder.com; 25.6% of Classified Ventures, LLC, which operates the auto website Cars.com; and 33.3% of HomeFinder.com, LLC, which operates the online real estate website HomeFinder.com. See Note 3, Investments in Unconsolidated Companies for further discussion. | ||||||||||||||||
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States and pursuant to the rules and regulation of the Securities and Exchange Commission requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The condensed consolidated financial statements include the Company and our subsidiaries. Intercompany items and transactions are eliminated. | ||||||||||||||||
In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, that are necessary to present fairly our financial position, results of operations, and cash flows for the interim periods presented. The financial statements contained in this report are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 29, 2013 ( “Form 10-K”). The fiscal periods included herein comprise 13 weeks for the second-quarter periods and 26 weeks for the six month periods. For purposes of presentation only, we updated the term “circulation” to “audience” as it releases to our discussion of revenues. The term “circulation” was used in prior filings with the Securities and Exchange Commission and no other changes were made in conjunction with this language change. | ||||||||||||||||
Recent Business Developments | ' | |||||||||||||||
Recent Business Developments | ||||||||||||||||
Sale of Anchorage Daily News, Inc. | ||||||||||||||||
On May 5, 2014, we completed the sale of the outstanding capital stock of the Anchorage Daily News, Inc. (“Anchorage”) for $34 million in cash. In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205-20, “Discontinued Operations”, the financial results of Anchorage have been reported as a discontinued operation in our condensed consolidated financial statements for the periods presented. For a more complete discussion of the transaction, refer to Note 2, Divestiture. | ||||||||||||||||
Investments in Unconsolidated Companies Activity | ||||||||||||||||
On April 1, 2014, Classified Ventures, LLC consummated the sale of its Apartments.com business for $585 million. Accordingly, during the quarter ending June 29, 2014, we recorded our share of the gain on the sale of approximately $144.2 million, before taxes. On April 1, 2014, we received a cash distribution of approximately $146.9 million from Classified Ventures, LLC, which is equal to our share of the net proceeds from the sale. See Note 3, Investments in Unconsolidated Companies. | ||||||||||||||||
On May 7, 2014, we transferred our partnership interest in McClatchy-Tribune Information Services (“MCT”) to TCA News Service LLC (“TCA”) for cash and for future newswire content. Concurrently, we entered into a contributor agreement with MCT pursuant to which we will continue to be a contributor of newswire content to MCT for an agreed upon rate, and we will receive newswire content from MCT or its successor at no cost for approximately 10 years. We recognized a $3.1 million intangible asset with respect to the content we will receive from MCT at no cost under these agreements and a $1.7 million gain on sale of the equity investment. See Note 3, Investments in Unconsolidated Companies. | ||||||||||||||||
On August 5, 2014, we, along with the remaining partners in Classified Ventures, LLC, have entered into a definitive agreement to sell all of the ownership interests in Classified Ventures, LLC to Gannett Co., Inc. for a price that values Classified Ventures, LLC at $2.5 billion. Our portion of the cash proceeds is estimated to be approximately $640 million. See Note 8, Subsequent Event for further discussion. | ||||||||||||||||
Reclassifications | ' | |||||||||||||||
Reclassifications | ||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation in our condensed consolidated financial statements, which consists of the effects of reclassifications from the presentation of Anchorage as a discontinued operation. | ||||||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||
We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: | ||||||||||||||||
Level 1 – Unadjusted quoted prices available in active markets for identical investments as of the reporting date. | ||||||||||||||||
Level 2 – Observable inputs to the valuation methodology are other than Level 1 inputs and are either directly or indirectly observable as of the reporting date and fair value can be determined through the use of models or other valuation methodologies. | ||||||||||||||||
Level 3 – Inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability, and the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk. | ||||||||||||||||
Our policy is to recognize significant transfers between levels at the actual date of the event or circumstance that caused the transfer. The following methods and assumptions were used to estimate the fair value of each class of financial instruments: | ||||||||||||||||
Cash and cash equivalents, accounts receivable, and accounts payable. The carrying amount of these items approximates fair value. | ||||||||||||||||
Long-term debt. The fair value of our long-term debt is determined using quoted market prices and other inputs that were derived from available market information, including the current market activity of our publicly-traded notes and bank debt, trends in investor demand 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 June 29, 2014, the estimated fair value and carrying value of our long-term debt was $1.7 billion and $1.5 billion, respectively. | ||||||||||||||||
Certain assets are measured at fair value on a nonrecurring basis; that is, they are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Our non-financial assets measured at fair value on a nonrecurring basis in the accompanying condensed consolidated balance sheets as of June 29, 2014, were assets held for sale, goodwill, intangible assets not subject to amortization and equity method investments. All of these were 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. | ||||||||||||||||
Property, plant and equipment | ' | |||||||||||||||
Property, plant and equipment | ||||||||||||||||
The decrease in property, plant and equipment during the six months ended June 29, 2014, is primarily related to the sale of Anchorage, which is presented as a discontinued operation. See Note 2, Divestiture, below for further discussion of the transaction. During the six months ended June 29, 2014, we also completed the acquisition of a new production facility, which was valued at $6.5 million. In addition, during the six months ended June 29, 2014, we incurred $13.5 million in accelerated depreciation (i) related to the production equipment associated with outsourcing our printing process at one newspaper and (ii) resulting from moving the printing operations for another newspaper to the new production facility. No similar transactions were recorded during the quarter ended June 29, 2014. During the quarter and six months ended June 30, 2013, we incurred $1.8 million and $3.9 million in accelerated depreciation primarily related to our Miami operations move. | ||||||||||||||||
Depreciation expense with respect to property, plant and equipment is summarized below: | ||||||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||||
June 29, | June 30, | June 29, | June 30, | |||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Depreciation expense | $ | 11,567 | $ | 15,442 | $ | 37,549 | $ | 31,427 | ||||||||
Assets held for sale | ' | |||||||||||||||
Assets held for sale | ||||||||||||||||
The increase in assets held for sale during the six months ended June 29, 2014, related primarily to identifying and beginning to actively market for sale one of our production facilities for a newspaper at which we outsourced our printing to a third-party. These assets consisted primarily of undeveloped land and buildings. In connection with the classification to assets held for sale, the carrying value of the land and office buildings were reduced to their estimated fair value less selling costs, as determined based on the current market conditions and the selling prices. As a result, an impairment charge of $0.1 million and $1.0 million was recorded in the quarter and six months ended June 29, 2014, and is included in other operating expenses on the condensed consolidated statements of operations. | ||||||||||||||||
Intangible Assets and Goodwill | ' | |||||||||||||||
Intangible Assets and Goodwill | ||||||||||||||||
Intangible assets (primarily advertiser lists, subscriber lists and developed technology), mastheads and goodwill consisted of the following: | ||||||||||||||||
December 29, | Other | Amortization | June 29, | |||||||||||||
(in thousands) | 2013 | Adjustments | Expense | 2014 | ||||||||||||
Intangible assets subject to amortization | $ | 835,461 | $ | -2,207 | $ | — | $ | 833,254 | ||||||||
Accumulated amortization | -567,737 | 5,307 | -28,672 | -591,102 | ||||||||||||
267,724 | 3,100 | -28,672 | 242,152 | |||||||||||||
Mastheads | 198,242 | — | — | 198,242 | ||||||||||||
Goodwill | 1,013,002 | -16,887 | — | 996,115 | ||||||||||||
Total | $ | 1,478,968 | $ | -13,787 | $ | -28,672 | $ | 1,436,509 | ||||||||
During the six months ended June 29, 2014, we sold Anchorage, resulting in the removal of the applicable intangible assets subject to amortization of approximately $5.3 million, accumulated amortization of approximately $5.3 million, and goodwill of approximately $16.9 million from our condensed consolidated balance sheet. In addition, in the six months ended June 29, 2014, we acquired an intangible asset of $3.1 million related to the contributor agreement we entered into with MCT in which we will receive MCT newswire content, at no cost, over approximately 10 years. See Recent Business Developments above regarding both of these transactions. | ||||||||||||||||
Amortization expense with respect to intangible assets is summarized below: | ||||||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||||
June 29, | June 30, | June 29, | June 30, | |||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Amortization expense | $ | 14,359 | $ | 14,251 | $ | 28,672 | $ | 28,502 | ||||||||
The estimated amortization expense for the remainder of fiscal year 2014 and the five succeeding fiscal years is as follows: | ||||||||||||||||
Amortization | ||||||||||||||||
Expense | ||||||||||||||||
Year | (in thousands) | |||||||||||||||
2014 (remainder) | $ | 24,293 | ||||||||||||||
2015 | 48,383 | |||||||||||||||
2016 | 48,012 | |||||||||||||||
2017 | 48,843 | |||||||||||||||
2018 | 47,268 | |||||||||||||||
2019 | 23,768 | |||||||||||||||
Accumulated Other Comprehensive Loss | ' | |||||||||||||||
Accumulated Other Comprehensive Loss | ||||||||||||||||
Our accumulated other comprehensive loss (“AOCL”) and reclassifications from AOCL, net of tax, consisted of the following: | ||||||||||||||||
(in thousands) | Minimum | Other | Total | |||||||||||||
Pension and | Comprehensive | |||||||||||||||
Post- | Loss Related to | |||||||||||||||
Retirement | Equity | |||||||||||||||
Liability | Investments | |||||||||||||||
Beginning balance - December 29, 2013 | $ | -296,669 | $ | -8,232 | $ | -304,901 | ||||||||||
Other comprehensive income before reclassifications | — | 754 | 754 | |||||||||||||
Amounts reclassified from AOCL | 3,763 | — | 3,763 | |||||||||||||
Other comprehensive income | 3,763 | 754 | 4,517 | |||||||||||||
Ending balance - June 29, 2014 | $ | -292,906 | $ | -7,478 | $ | -300,384 | ||||||||||
Amount Reclassified from AOCL (in thousands) | ||||||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||||
June 29, | June 30, | June 29, | June 30, | Affected Line in the Condensed | ||||||||||||
Consolidated Statements of | ||||||||||||||||
AOCL Component | 2014 | 2013 | 2014 | 2013 | Operations | |||||||||||
Minimum pension and post-retirement liability | $ | 3,135 | $ | 5,664 | $ | 6,271 | $ | 11,289 | Compensation | |||||||
-1,254 | -2,266 | -2,508 | -4,516 | Income tax provision | ||||||||||||
$ | 1,881 | $ | 3,398 | $ | 3,763 | $ | 6,773 | Net of tax | ||||||||
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. | ||||||||||||||||
We recognize accrued interest related to unrecognized tax benefits in interest expense. Accrued penalties are recognized as a component of income tax expense. | ||||||||||||||||
We expect to pay approximately $65 million in income taxes, as a result of the gain on sale of Apartments.com by Classified Ventures, LLC and our sale of Anchorage, primarily during the third quarter of 2014. | ||||||||||||||||
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 options, restricted stock units and restricted stock and are computed using the treasury stock method. Anti-dilutive common stock equivalents are excluded from diluted EPS. The weighted average anti-dilutive stock options that could potentially dilute basic EPS in the future, but were not included in the weighted average share calculation, consisted of the following: | ||||||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||||
June 29, | June 30, | June 29, | June 30, | |||||||||||||
(shares in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Anti-dilutive stock options | 1,612 | 5,619 | 1,659 | 6,048 | ||||||||||||
Cash Flow Information | ' | |||||||||||||||
Cash Flow Information | ||||||||||||||||
Cash paid for interest and income taxes consisted of the following: | ||||||||||||||||
Six Months Ended | ||||||||||||||||
June 29, | June 30, | |||||||||||||||
(in thousands) | 2014 | 2013 | ||||||||||||||
Interest paid (net of amount capitalized) | $ | 61,198 | $ | 65,736 | ||||||||||||
Income taxes paid (net of refunds) | 11,381 | -2,861 | ||||||||||||||
Other non-cash investing activities from continuing operations, related to the recognition of an intangible asset as of June 29, 2014, were $3.1 million. Other non-cash investing activities from continuing operations as of June 29, 2014, and June 30, 2013, related to purchases of property, plant and equipment (“PP&E”) on credit, were $0.4 million and $1.1 million, respectively. | ||||||||||||||||
Recently Issued Accounting Pronouncements | ' | |||||||||||||||
Recently Issued Accounting Pronouncements | ||||||||||||||||
In April 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. ASU 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. It is effective for annual periods beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in financial statements previously issued. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. | ||||||||||||||||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”. ASU 2014-09 outlines a new, single comprehensive model from entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. It is effective for annual periods beginning on or after December 15, 2016, and early adoption is not permitted. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. |
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended | |||||||||||||||
Jun. 29, 2014 | ||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||||||||
Summary of depreciation expense with respect to property, plant and equipment | ' | |||||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||||
June 29, | June 30, | June 29, | June 30, | |||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Depreciation expense | $ | 11,567 | $ | 15,442 | $ | 37,549 | $ | 31,427 | ||||||||
Schedule of intangible assets (primarily advertiser lists, subscriber lists and developed technology) mastheads and goodwill | ' | |||||||||||||||
December 29, | Other | Amortization | June 29, | |||||||||||||
(in thousands) | 2013 | Adjustments | Expense | 2014 | ||||||||||||
Intangible assets subject to amortization | $ | 835,461 | $ | -2,207 | $ | — | $ | 833,254 | ||||||||
Accumulated amortization | -567,737 | 5,307 | -28,672 | -591,102 | ||||||||||||
267,724 | 3,100 | -28,672 | 242,152 | |||||||||||||
Mastheads | 198,242 | — | — | 198,242 | ||||||||||||
Goodwill | 1,013,002 | -16,887 | — | 996,115 | ||||||||||||
Total | $ | 1,478,968 | $ | -13,787 | $ | -28,672 | $ | 1,436,509 | ||||||||
Summary of amortization expense with respect to intangible assets | ' | |||||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||||
June 29, | June 30, | June 29, | June 30, | |||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Amortization expense | $ | 14,359 | $ | 14,251 | $ | 28,672 | $ | 28,502 | ||||||||
Amortization expense for the five succeeding fiscal years | ' | |||||||||||||||
Amortization | ||||||||||||||||
Expense | ||||||||||||||||
Year | (in thousands) | |||||||||||||||
2014 (remainder) | $ | 24,293 | ||||||||||||||
2015 | 48,383 | |||||||||||||||
2016 | 48,012 | |||||||||||||||
2017 | 48,843 | |||||||||||||||
2018 | 47,268 | |||||||||||||||
2019 | 23,768 | |||||||||||||||
Schedule of accumulated other comprehensive loss ("AOCL") and reclassifications from AOCL, net of tax | ' | |||||||||||||||
(in thousands) | Minimum | Other | Total | |||||||||||||
Pension and | Comprehensive | |||||||||||||||
Post- | Loss Related to | |||||||||||||||
Retirement | Equity | |||||||||||||||
Liability | Investments | |||||||||||||||
Beginning balance - December 29, 2013 | $ | -296,669 | $ | -8,232 | $ | -304,901 | ||||||||||
Other comprehensive income before reclassifications | — | 754 | 754 | |||||||||||||
Amounts reclassified from AOCL | 3,763 | — | 3,763 | |||||||||||||
Other comprehensive income | 3,763 | 754 | 4,517 | |||||||||||||
Ending balance - June 29, 2014 | $ | -292,906 | $ | -7,478 | $ | -300,384 | ||||||||||
Amount Reclassified from AOCL (in thousands) | ||||||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||||
June 29, | June 30, | June 29, | June 30, | Affected Line in the Condensed | ||||||||||||
Consolidated Statements of | ||||||||||||||||
AOCL Component | 2014 | 2013 | 2014 | 2013 | Operations | |||||||||||
Minimum pension and post-retirement liability | $ | 3,135 | $ | 5,664 | $ | 6,271 | $ | 11,289 | Compensation | |||||||
-1,254 | -2,266 | -2,508 | -4,516 | Income tax provision | ||||||||||||
$ | 1,881 | $ | 3,398 | $ | 3,763 | $ | 6,773 | Net of tax | ||||||||
Summary of anti-dilutive stock options | ' | |||||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||||
June 29, | June 30, | June 29, | June 30, | |||||||||||||
(shares in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Anti-dilutive stock options | 1,612 | 5,619 | 1,659 | 6,048 | ||||||||||||
Schedule of cash paid for interest and income taxes | ' | |||||||||||||||
Six Months Ended | ||||||||||||||||
June 29, | June 30, | |||||||||||||||
(in thousands) | 2014 | 2013 | ||||||||||||||
Interest paid (net of amount capitalized) | $ | 61,198 | $ | 65,736 | ||||||||||||
Income taxes paid (net of refunds) | 11,381 | -2,861 | ||||||||||||||
DIVESTITURE_Tables
DIVESTITURE (Tables) | 6 Months Ended | |||||||||||||
Jun. 29, 2014 | ||||||||||||||
DIVESTITURE | ' | |||||||||||||
Schedule of major classes of assets and liabilities included in discontinued operations | ' | |||||||||||||
December 29, | ||||||||||||||
(in thousands) | 2013 | |||||||||||||
Current assets | $ | 5,390 | ||||||||||||
Property, plant and equipment, net | 8,362 | |||||||||||||
Intangible and other assets | 17,275 | |||||||||||||
Total assets | $ | 31,027 | ||||||||||||
Current liabilities | $ | 2,456 | ||||||||||||
Non current liabilities | 54 | |||||||||||||
Total liabilities | $ | 2,510 | ||||||||||||
Summary of financial information for the operations | ' | |||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||
June 29, | June 30, | June 29, | June 30, | |||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Revenues | $ | 2,651 | $ | 7,181 | $ | 9,186 | $ | 13,653 | ||||||
Income (loss) from discontinued operations, before taxes | $ | -446 | $ | 1,304 | $ | -48 | $ | 2,085 | ||||||
Income tax provision (benefit) | -198 | 513 | -20 | 838 | ||||||||||
Income (loss) from discontinued operations, net of tax, before loss on sale | $ | -248 | $ | 791 | $ | -28 | $ | 1,247 | ||||||
Gain on sale of discontinued operations | $ | 5,474 | $ | — | $ | 5,474 | $ | — | ||||||
Income tax provision | 6,925 | — | 6,925 | — | ||||||||||
Loss on sale of discontinued operations, net of tax | -1,451 | — | -1,451 | — | ||||||||||
Income (loss) from discontinued operations, net of tax | $ | -1,699 | $ | 791 | $ | -1,479 | $ | 1,247 |
INVESTMENTS_IN_UNCONSOLIDATED_1
INVESTMENTS IN UNCONSOLIDATED COMPANIES (Tables) | 6 Months Ended | |||||||||
Jun. 29, 2014 | ||||||||||
INVESTMENTS IN UNCONSOLIDATED COMPANIES | ' | |||||||||
Summary of carrying value of investments in unconsolidated companies | ' | |||||||||
(in thousands) | % Ownership | June 29, | December 29, | |||||||
Company | Interest | 2014 | 2013 | |||||||
CareerBuilder, LLC | 15 | $ | 223,065 | $ | 214,579 | |||||
Classified Ventures, LLC | 25.6 | 80,458 | 73,692 | |||||||
Seattle Times Company (C-Corporation) | 49.5 | — | — | |||||||
Ponderay (general partnership) | 27 | 9,470 | 8,443 | |||||||
Other | Various | 2,488 | 3,855 | |||||||
$ | 315,481 | $ | 300,569 | |||||||
Summary of condensed financial information as provided by certain investees | ' | |||||||||
Six Months Ended | ||||||||||
June 29, | June 30, | |||||||||
(in thousands) | 2014 | 2013 | ||||||||
Net revenues | $ | 666,164 | $ | 648,958 | ||||||
Gross profit | 563,861 | 543,490 | ||||||||
Operating income | 89,524 | 103,543 | ||||||||
Net income | 650,720 | 103,955 | ||||||||
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 6 Months Ended | ||||||||||
Jun. 29, 2014 | |||||||||||
LONG-TERM DEBT | ' | ||||||||||
Summary of company's long-term debt | ' | ||||||||||
Face Value | Carrying Value | ||||||||||
June 29, | June 29, | December 29, | |||||||||
(in thousands) | 2014 | 2014 | 2013 | ||||||||
Notes: | |||||||||||
9.00% senior secured notes due in 2022 | $ | 900,000 | $ | 900,000 | $ | 900,000 | |||||
4.625% notes due in 2014 | 28,965 | 28,800 | 28,548 | ||||||||
5.750% notes due in 2017 | 261,298 | 253,483 | 252,259 | ||||||||
7.150% debentures due in 2027 | 89,188 | 83,880 | 83,684 | ||||||||
6.875% debentures due in 2029 | 276,230 | 257,994 | 257,380 | ||||||||
Long-term debt | $ | 1,555,681 | $ | 1,524,157 | $ | 1,521,871 | |||||
Less current portion | 28,800 | 28,548 | |||||||||
Total long-term debt, net of current | $ | 1,495,357 | $ | 1,493,323 |
EMPLOYEE_BENEFITS_Tables
EMPLOYEE BENEFITS (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 29, 2014 | |||||||||||||||||
EMPLOYEE BENEFITS | ' | ||||||||||||||||
Schedule of elements of retirement expense | ' | ||||||||||||||||
Quarters Ended | Six Months Ended | ||||||||||||||||
June 29, | June 30, | June 29, | June 30, | ||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Pension plans: | |||||||||||||||||
Service cost | $ | 2,007 | $ | 1,373 | $ | 4,015 | $ | 2,773 | |||||||||
Interest cost | 22,751 | 21,173 | 45,502 | 42,298 | |||||||||||||
Expected return on plan assets | (26,865 | ) | (25,252 | ) | (53,730 | ) | (50,527 | ) | |||||||||
Prior service cost amortization | 3 | 7 | 6 | 7 | |||||||||||||
Actuarial loss | 4,002 | 6,404 | 8,004 | 12,779 | |||||||||||||
Net pension expense | 1,898 | 3,705 | 3,797 | 7,330 | |||||||||||||
Net post-retirement credit | (741 | ) | (624 | ) | (1,482 | ) | (1,249 | ) | |||||||||
Net retirement expense | $ | 1,157 | $ | 3,081 | $ | 2,315 | $ | 6,081 |
STOCK_PLANS_Tables
STOCK PLANS (Tables) | 6 Months Ended | |||||||||||||
Jun. 29, 2014 | ||||||||||||||
STOCK PLANS | ' | |||||||||||||
Summary of the restricted stock units ("RSUs") activity | ' | |||||||||||||
Weighted Average | ||||||||||||||
RSUs | Grant Date Fair Value | |||||||||||||
Nonvested - December 29, 2013 | 1,231,650 | $2.50 | ||||||||||||
Granted | 706,950 | $4.82 | ||||||||||||
Vested | -486,150 | $2.66 | ||||||||||||
Forfeited | -30,300 | $2.53 | ||||||||||||
Nonvested - June 29, 2014 | 1,422,150 | $3.60 | ||||||||||||
Summary of the stock appreciation rights ("SARs") activity | ' | |||||||||||||
Weighted | Aggregate | |||||||||||||
Average | Intrinsic | |||||||||||||
Options/ | Exercise | Value | ||||||||||||
SARs | Price | (in thousands) | ||||||||||||
Outstanding December 29, 2013 | 6,110,500 | $9.69 | $2,384 | |||||||||||
Exercised | (568,250 | ) | $3.07 | $1,198 | ||||||||||
Forfeited | (63,500 | ) | $3.39 | |||||||||||
Expired | (296,500 | ) | $30.84 | |||||||||||
Outstanding June 29, 2014 | 5,182,250 | $9.28 | $10,205 | |||||||||||
Summary of stock-based compensation expense | ' | |||||||||||||
Quarters Ended | Six Months Ended | |||||||||||||
June 29, | June 30, | June 29, | June 30, | |||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Stock-based compensation expense | $ | 627 | $ | 635 | $ | 1,574 | $ | 1,738 | ||||||
SIGNIFICANT_ACCOUNTING_POLICIE3
SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | ||||||
Jun. 29, 2014 | Jun. 30, 2013 | Jun. 29, 2014 | Jun. 30, 2013 | Dec. 29, 2013 | Jun. 29, 2014 | Jun. 29, 2014 | Jun. 29, 2014 | 7-May-14 | Jun. 29, 2014 | |
newspaper | newspaper | Career Builder LLC | Classified Ventures LLC | Home Finder LLC | MCT | MCT | ||||
SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of daily newspapers | 29 | ' | 29 | ' | ' | ' | ' | ' | ' | ' |
Number of days in a fiscal quarter | '91 days | ' | '182 days | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership Interest (as a percent) | ' | ' | ' | ' | ' | 15.00% | 25.60% | 33.30% | ' | ' |
Long-term debt fair value disclosure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated fair value of long-term debt | $1,700,000,000 | ' | $1,700,000,000 | ' | ' | ' | ' | ' | ' | ' |
Carrying value of long-term debt | 1,524,157,000 | ' | 1,524,157,000 | ' | 1,521,871,000 | ' | ' | ' | ' | ' |
Property, plant and equipment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition of a new production facility in cash | ' | ' | 6,500,000 | ' | ' | ' | ' | ' | ' | ' |
Accelerated depreciation incurred | 0 | 1,800,000 | 13,500,000 | 3,900,000 | ' | ' | ' | ' | ' | ' |
Depreciation expense | 11,567,000 | 15,442,000 | 37,549,000 | 31,427,000 | ' | ' | ' | ' | ' | ' |
Assets held for sale | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment charge of assets held for sale | 100,000 | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' |
Intangible assets subject to amortization, gross | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | 835,461,000 | ' | ' | ' | ' | ' | ' | ' |
Other Adjustments | ' | ' | -2,207,000 | ' | ' | ' | ' | ' | ' | ' |
Balance at the end of the period | 833,254,000 | ' | 833,254,000 | ' | ' | ' | ' | ' | ' | ' |
Accumulated amortization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | -567,737,000 | ' | ' | ' | ' | ' | ' | ' |
Other Adjustments | ' | ' | 5,307,000 | ' | ' | ' | ' | ' | ' | ' |
Amortization Expense | -14,359,000 | -14,251,000 | -28,672,000 | -28,502,000 | ' | ' | ' | ' | ' | ' |
Balance at the end of the period | -591,102,000 | ' | -591,102,000 | ' | ' | ' | ' | ' | ' | ' |
Intangible assets subject to amortization, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | 267,724,000 | ' | ' | ' | ' | ' | ' | ' |
Other Adjustments | ' | ' | 3,100,000 | ' | ' | ' | ' | ' | 3,100,000 | 3,100,000 |
Amortization Expense | -14,359,000 | -14,251,000 | -28,672,000 | -28,502,000 | ' | ' | ' | ' | ' | ' |
Balance at the end of the period | 242,152,000 | ' | 242,152,000 | ' | ' | ' | ' | ' | ' | ' |
Mastheads | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | 198,242,000 | ' | ' | ' | ' | ' | ' | ' |
Balance at the end of the period | 198,242,000 | ' | 198,242,000 | ' | ' | ' | ' | ' | ' | ' |
Goodwill | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | 1,013,002,000 | ' | ' | ' | ' | ' | ' | ' |
Other Adjustments | ' | ' | -16,887,000 | ' | ' | ' | ' | ' | ' | ' |
Balance at the end of the period | 996,115,000 | ' | 996,115,000 | ' | ' | ' | ' | ' | ' | ' |
Total | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | 1,478,968,000 | ' | ' | ' | ' | ' | ' | ' |
Other Adjustments | ' | ' | -13,787,000 | ' | ' | ' | ' | ' | ' | ' |
Amortization Expense | -14,359,000 | -14,251,000 | -28,672,000 | -28,502,000 | ' | ' | ' | ' | ' | ' |
Balance at the end of the period | 1,436,509,000 | ' | 1,436,509,000 | ' | ' | ' | ' | ' | ' | ' |
Removal of applicable intangible assets subject to amortization | ' | ' | 5,300,000 | ' | ' | ' | ' | ' | ' | ' |
Cost of content pursuant to contributor agreement | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 |
Term of contributor agreement | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | '10 years |
Amortization expense with respect to intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization expense | 14,359,000 | 14,251,000 | 28,672,000 | 28,502,000 | ' | ' | ' | ' | ' | ' |
Estimated amortization expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 (remainder) | 24,293,000 | ' | 24,293,000 | ' | ' | ' | ' | ' | ' | ' |
2015 | 48,383,000 | ' | 48,383,000 | ' | ' | ' | ' | ' | ' | ' |
2016 | 48,012,000 | ' | 48,012,000 | ' | ' | ' | ' | ' | ' | ' |
2017 | 48,843,000 | ' | 48,843,000 | ' | ' | ' | ' | ' | ' | ' |
2018 | 47,268,000 | ' | 47,268,000 | ' | ' | ' | ' | ' | ' | ' |
2019 | $23,768,000 | ' | $23,768,000 | ' | ' | ' | ' | ' | ' | ' |
SIGNIFICANT_ACCOUNTING_POLICIE4
SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | ||||||
Jun. 29, 2014 | Jun. 30, 2013 | Jun. 29, 2014 | Jun. 30, 2013 | Aug. 05, 2014 | Aug. 05, 2014 | 7-May-14 | Jun. 29, 2014 | 5-May-14 | Apr. 01, 2014 | Apr. 01, 2014 | Jun. 29, 2014 | |
Classified Ventures LLC | Classified Ventures LLC | MCT | MCT | Anchorage | Apartments.com business | Apartments.com business | Apartments.com business | |||||
Subsequent event | Expected | Classified Ventures LLC | Classified Ventures LLC | Classified Ventures LLC | ||||||||
Subsequent event | ||||||||||||
Sale of Anchorage Daily News, Inc. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash received | ' | ' | ' | ' | ' | ' | ' | ' | $34,000,000 | $585,000,000 | ' | ' |
Investments in Unconsolidated Companies Activity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sale value of business | ' | ' | ' | ' | ' | ' | ' | ' | 34,000,000 | 585,000,000 | ' | ' |
Share of the gain on sale | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 144,200,000 |
Distribution received from equity investee | 7,410,000 | 11,968,000 | 16,968,000 | 21,129,000 | ' | ' | ' | ' | ' | ' | 146,900,000 | ' |
Cost of content pursuant to contributor agreement | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' |
Term of contributor agreement | ' | ' | ' | ' | ' | ' | '10 years | '10 years | ' | ' | ' | ' |
Intangible asset adjustment | ' | ' | 3,100,000 | ' | ' | ' | 3,100,000 | 3,100,000 | ' | ' | ' | ' |
Gains related to equity investments | 145,893,000 | ' | 145,893,000 | ' | ' | ' | 1,700,000 | ' | ' | ' | ' | ' |
Total consideration | ' | ' | ' | ' | 2,500,000,000 | ' | ' | ' | ' | ' | ' | ' |
Proceeds on sale of business | ' | ' | ' | ' | ' | $640,000,000 | ' | ' | ' | ' | ' | ' |
SIGNIFICANT_ACCOUNTING_POLICIE5
SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 29, 2014 | Jun. 30, 2013 | Jun. 29, 2014 | Jun. 30, 2013 |
Changes in accumulated other comprehensive loss | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | ($304,901) | ' |
Other comprehensive income before reclassifications | ' | ' | 754 | ' |
Amounts reclassified from AOCL | ' | ' | 3,763 | ' |
Other comprehensive income | 1,910 | 3,330 | 4,517 | 6,042 |
Balance at the end of the period | -300,384 | ' | -300,384 | ' |
Minimum Pension and Post-Retirement Liability | ' | ' | ' | ' |
Changes in accumulated other comprehensive loss | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | -296,669 | ' |
Amounts reclassified from AOCL | ' | ' | 3,763 | ' |
Other comprehensive income | ' | ' | 3,763 | ' |
Balance at the end of the period | -292,906 | ' | -292,906 | ' |
Other Comprehensive Loss Related to Equity Investments | ' | ' | ' | ' |
Changes in accumulated other comprehensive loss | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | -8,232 | ' |
Other comprehensive income before reclassifications | ' | ' | 754 | ' |
Other comprehensive income | ' | ' | 754 | ' |
Balance at the end of the period | ($7,478) | ' | ($7,478) | ' |
SIGNIFICANT_ACCOUNTING_POLICIE6
SIGNIFICANT ACCOUNTING POLICIES (Details 4) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 29, 2014 | Jun. 30, 2013 | Jun. 29, 2014 | Jun. 30, 2013 |
Reclassifications from AOCL | ' | ' | ' | ' |
Compensation | $103,481 | $105,871 | $212,033 | $216,123 |
Income tax provision | 55,615 | 7,367 | 43,191 | 1,317 |
Net of tax | -89,949 | -11,752 | -74,107 | 989 |
Minimum pension and post-retirement liability | Amount Reclassified from AOCI | ' | ' | ' | ' |
Reclassifications from AOCL | ' | ' | ' | ' |
Compensation | 3,135 | 5,664 | 6,271 | 11,289 |
Income tax provision | -1,254 | -2,266 | -2,508 | -4,516 |
Net of tax | $1,881 | $3,398 | $3,763 | $6,773 |
SIGNIFICANT_ACCOUNTING_POLICIE7
SIGNIFICANT ACCOUNTING POLICIES (Details 5) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Jun. 29, 2014 | Jun. 30, 2013 | Jun. 29, 2014 | Jun. 30, 2013 |
Income Taxes | ' | ' | ' | ' |
Income taxes expected to be paid | ' | ' | 65 | ' |
Anti-dilutive stock options, restricted stock units and restricted stock | ' | ' | ' | ' |
Weighted average anti-dilutive stock options | ' | ' | ' | ' |
Anti-dilutive stock options (in shares) | 1,612 | 5,619 | 1,659 | 6,048 |
SIGNIFICANT_ACCOUNTING_POLICIE8
SIGNIFICANT ACCOUNTING POLICIES (Details 6) (USD $) | 6 Months Ended | |
Jun. 29, 2014 | Jun. 30, 2013 | |
Cash paid for interest and income taxes | ' | ' |
Interest paid (net of amount capitalized) | $61,198,000 | $65,736,000 |
Income taxes paid (net of refunds) | 11,381,000 | -2,861,000 |
Other non-cash investing activities | ' | ' |
Intangible asset adjustment | 3,100,000 | ' |
Non-cash investing activities related to purchases of PP&E on credit | $400,000 | $1,100,000 |
DIVESTITURE_Details
DIVESTITURE (Details) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
5-May-14 | Jun. 29, 2014 | Dec. 29, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Jun. 29, 2014 | Jun. 30, 2013 | Dec. 29, 2013 | |
Major classes of assets and liabilities included in discontinued operations | ' | ' | ' | ' | ' | ' | ' | ' |
Current assets | ' | $8,017,000 | $3,504,000 | ' | ' | $8,017,000 | ' | $3,504,000 |
Financial information for operations | ' | ' | ' | ' | ' | ' | ' | ' |
Income (loss) from discontinued operations | ' | -1,699,000 | ' | ' | 791,000 | -1,479,000 | 1,247,000 | ' |
Anchorage | ' | ' | ' | ' | ' | ' | ' | ' |
Divestiture | ' | ' | ' | ' | ' | ' | ' | ' |
Cash received | 34,000,000 | ' | ' | ' | ' | ' | ' | ' |
Major classes of assets and liabilities included in discontinued operations | ' | ' | ' | ' | ' | ' | ' | ' |
Current assets | ' | ' | 5,390,000 | ' | ' | ' | ' | 5,390,000 |
Property, plant and equipment, net | ' | ' | 8,362,000 | ' | ' | ' | ' | 8,362,000 |
Intangible and other assets | ' | ' | 17,275,000 | ' | ' | ' | ' | 17,275,000 |
Total assets | ' | ' | 31,027,000 | ' | ' | ' | ' | 31,027,000 |
Current liabilities | ' | ' | 2,456,000 | ' | ' | ' | ' | 2,456,000 |
Non current liabilities | ' | ' | 54,000 | ' | ' | ' | ' | 54,000 |
Total Liabilities | ' | ' | 2,510,000 | ' | ' | ' | ' | 2,510,000 |
Financial information for operations | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | 2,651,000 | 7,200,000 | 6,500,000 | 7,181,000 | 9,186,000 | 13,653,000 | 27,400,000 |
Income (loss) from discontinued operations, before taxes | ' | -446,000 | ' | ' | 1,304,000 | -48,000 | 2,085,000 | ' |
Income tax provision (benefit) | ' | -198,000 | ' | ' | 513,000 | -20,000 | 838,000 | ' |
Income (loss) from discontinued operations, net of tax, before loss on sale | ' | -248,000 | ' | ' | 791,000 | -28,000 | 1,247,000 | ' |
Gain on sale of discontinued operations | ' | 5,474,000 | ' | ' | ' | 5,474,000 | ' | ' |
Income tax provision | ' | 6,925,000 | ' | ' | ' | 6,925,000 | ' | ' |
Loss on sale of discontinued operations, net of tax | ' | -1,451,000 | ' | ' | ' | -1,451,000 | ' | ' |
Income (loss) from discontinued operations | ' | ($1,699,000) | ' | ' | $791,000 | ($1,479,000) | $1,247,000 | ' |
INVESTMENTS_IN_UNCONSOLIDATED_2
INVESTMENTS IN UNCONSOLIDATED COMPANIES (Details) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 6 Months Ended | |||||||||||||
Jun. 29, 2014 | Jun. 30, 2013 | Jun. 29, 2014 | Jun. 30, 2013 | Dec. 29, 2013 | Apr. 01, 2014 | Jun. 29, 2014 | Dec. 29, 2013 | Jun. 29, 2014 | Dec. 29, 2013 | Aug. 05, 2014 | Apr. 01, 2014 | Jun. 29, 2014 | Jun. 29, 2014 | Jun. 29, 2014 | Dec. 29, 2013 | Jun. 29, 2014 | Dec. 29, 2013 | 7-May-14 | Jun. 29, 2014 | |
Classified Ventures LLC | Career Builder LLC | Career Builder LLC | Classified Ventures LLC | Classified Ventures LLC | Classified Ventures LLC | Classified Ventures LLC | Classified Ventures LLC | Seattle Times Company (C-Corporation) | Ponderay (general partnership) | Ponderay (general partnership) | Other | Other | MCT | MCT | ||||||
Apartments.com business | Subsequent event | Apartments.com business | Apartments.com business | |||||||||||||||||
Investments in Unconsolidated Companies Activity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership Interest (as a percent) | ' | ' | ' | ' | ' | ' | 15.00% | ' | 25.60% | ' | ' | ' | ' | 49.50% | 27.00% | ' | ' | ' | ' | ' |
Investments in unconsolidated companies | $315,481,000 | ' | $315,481,000 | ' | $300,569,000 | ' | $223,065,000 | $214,579,000 | $80,458,000 | $73,692,000 | ' | ' | ' | ' | $9,470,000 | $8,443,000 | $2,488,000 | $3,855,000 | ' | ' |
Sale value of business | ' | ' | ' | ' | ' | 585,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share of the gain on sale | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 144,200,000 | ' | ' | ' | ' | ' | ' | ' |
Distribution received from equity investee | 7,410,000 | 11,968,000 | 16,968,000 | 21,129,000 | ' | ' | ' | ' | ' | ' | ' | 146,900,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of content pursuant to contributor agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 |
Term of contributor agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | '10 years |
Other Adjustments | ' | ' | 3,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,100,000 | 3,100,000 |
Gains related to equity investments | 145,893,000 | ' | 145,893,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,700,000 | ' |
Total consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INVESTMENTS_IN_UNCONSOLIDATED_3
INVESTMENTS IN UNCONSOLIDATED COMPANIES (Details 2) (USD $) | 6 Months Ended | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 29, 2014 | Jun. 30, 2013 | Jun. 29, 2014 |
Minimum | |||
INVESTMENTS IN UNCONSOLIDATED COMPANIES | ' | ' | ' |
Proportionate share of net income (loss) before taxes (as a percent) | ' | ' | 20.00% |
Condensed financial information | ' | ' | ' |
Net revenues | $666,164 | $648,958 | ' |
Gross profit | 563,861 | 543,490 | ' |
Operating income | 89,524 | 103,543 | ' |
Net income | $650,720 | $103,955 | ' |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (USD $) | Jun. 29, 2014 | Dec. 29, 2013 |
Long-term debt disclosures | ' | ' |
Face Value | $1,555,681,000 | ' |
Carrying Value | 1,524,157,000 | 1,521,871,000 |
Less current portion | 28,800,000 | 28,548,000 |
Total long-term debt, net of current | 1,495,357,000 | 1,493,323,000 |
Unamortized discounts | 31,500,000 | 33,800,000 |
9.00% senior secured notes due in 2022 | ' | ' |
Long-term debt disclosures | ' | ' |
Interest rate (as a percent) | 9.00% | ' |
Face Value | 900,000,000 | ' |
Carrying Value | 900,000,000 | 900,000,000 |
4.625% notes due in 2014 | ' | ' |
Long-term debt disclosures | ' | ' |
Interest rate (as a percent) | 4.63% | ' |
Face Value | 28,965,000 | ' |
Carrying Value | 28,800,000 | 28,548,000 |
5.750% notes due in 2017 | ' | ' |
Long-term debt disclosures | ' | ' |
Interest rate (as a percent) | 5.75% | ' |
Face Value | 261,298,000 | ' |
Carrying Value | 253,483,000 | 252,259,000 |
7.150% debentures due in 2027 | ' | ' |
Long-term debt disclosures | ' | ' |
Interest rate (as a percent) | 7.15% | ' |
Face Value | 89,188,000 | ' |
Carrying Value | 83,880,000 | 83,684,000 |
6.875% debentures due in 2029 | ' | ' |
Long-term debt disclosures | ' | ' |
Interest rate (as a percent) | 6.88% | ' |
Face Value | 276,230,000 | ' |
Carrying Value | $257,994,000 | $257,380,000 |
LONGTERM_DEBT_Details_2
LONG-TERM DEBT (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2014 | Jun. 30, 2013 | Jun. 29, 2014 | Jun. 30, 2013 | |
Extinguishment of debt | ' | ' | ' | ' |
Face value of notes redeemed or repurchased | $0 | $0 | $0 | $145,900,000 |
Loss on extinguishment of debt | ' | ' | ' | $12,770,000 |
LONGTERM_DEBT_Details_3
LONG-TERM DEBT (Details 3) (USD $) | 6 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||||||||||||
Jun. 30, 2013 | Jun. 29, 2014 | Jun. 29, 2014 | Jun. 29, 2014 | Jun. 29, 2014 | Jun. 29, 2014 | Jun. 29, 2014 | Jun. 29, 2014 | Jun. 29, 2014 | Jun. 29, 2014 | Jun. 29, 2014 | Dec. 30, 2012 | Jun. 30, 2013 | Dec. 30, 2012 | Jun. 29, 2014 | Jul. 31, 2013 | |
Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | 11.50% senior secured notes due in 2017 | 11.50% senior secured notes due in 2017 | 9.00% Notes | 9.00% Notes | 9.00% Notes | ||
Period from quarter end through the remainder of the term of the Credit Agreement | Minimum | Maximum | LIBOR | LIBOR | LIBOR | Base rate | Base rate | Base rate | item | Original notes | ||||||
Minimum | Maximum | Minimum | Maximum | |||||||||||||
LONG-TERM DEBT | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding letters of credit | ' | $39,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding line of credit | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable rate basis | ' | ' | ' | ' | ' | 'London Interbank Offered Rate | ' | ' | 'base rate | ' | ' | ' | ' | ' | ' | ' |
Basis spread on variable rate (as a percent) | ' | ' | ' | ' | ' | ' | 2.75% | 4.25% | ' | 1.75% | 3.25% | ' | ' | ' | ' | ' |
Commitment fees for the unused revolving credit (as a percent) | ' | ' | ' | 0.50% | 0.63% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
New borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 910,000,000 | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11.50% | ' | 9.00% | 9.00% | 9.00% |
Net proceeds from offering | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 889,000,000 | ' | ' |
Amount of debt repurchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 846,000,000 | ' | ' | ' | ' |
Number of transactions to repurchase debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' |
Aggregate principal amount of debt redeemed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 762,400,000 | 83,600,000 | ' | ' | ' |
Loss on extinguishment of debt | $12,770,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $9,600,000 | ' | ' | ' |
Ownership percentage in each of the guarantor subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' |
Maximum consolidated leverage ratio | ' | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum consolidated interest coverage ratio | ' | 1.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividends restricted if consolidated leverage ratio is exceeded | ' | 5.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
EMPLOYEE_BENEFITS_Details
EMPLOYEE BENEFITS (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 29, 2014 | Jun. 30, 2013 | Jun. 29, 2014 | Jun. 30, 2013 |
item | ||||
EMPLOYEE BENEFITS | ' | ' | ' | ' |
Number of new participants | ' | ' | 0 | ' |
Retirement expense for continuing operations | ' | ' | ' | ' |
Net retirement expense | $1,157 | $3,081 | $2,315 | $6,081 |
Pension plan | ' | ' | ' | ' |
Retirement expense for continuing operations | ' | ' | ' | ' |
Service cost | 2,007 | 1,373 | 4,015 | 2,773 |
Interest cost | 22,751 | 21,173 | 45,502 | 42,298 |
Expected return on plan assets | -26,865 | -25,252 | -53,730 | -50,527 |
Prior service cost amortization | 3 | 7 | 6 | 7 |
Actuarial loss | 4,002 | 6,404 | 8,004 | 12,779 |
Net retirement expense | 1,898 | 3,705 | 3,797 | 7,330 |
Post-retirement plans | ' | ' | ' | ' |
Retirement expense for continuing operations | ' | ' | ' | ' |
Net retirement expense | ($741) | ($624) | ($1,482) | ($1,249) |
EMPLOYEE_BENEFITS_Details_2
EMPLOYEE BENEFITS (Details 2) (Pension plan, USD $) | 1 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Pension plan | ' | ' |
EMPLOYEE BENEFITS | ' | ' |
Value of contributions to plan | $25 | $7.50 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (Revolving credit facility, USD $) | Jun. 29, 2014 |
In Millions, unless otherwise specified | |
Revolving credit facility | ' |
Additional disclosures | ' |
Outstanding letters of credit | $39.90 |
STOCK_PLANS_Details
STOCK PLANS (Details) (USD $) | 6 Months Ended |
Jun. 29, 2014 | |
Options/SARs | ' |
Outstanding at the beginning of the period (in shares) | 6,110,500 |
Exercised (in shares) | -568,250 |
Forfeited (in shares) | -63,500 |
Expired (in shares) | -296,500 |
Outstanding at the end of the period (in shares) | 5,182,250 |
Weighted Average Exercise Price | ' |
Outstanding at the beginning of the period (in dollars per share) | $9.69 |
Exercised (in dollars per share) | $3.07 |
Forfeited (in dollars per share) | $3.39 |
Expired (in dollars per share) | $30.84 |
Outstanding at the end of the period (in dollars per share) | $9.28 |
Aggregate Intrinsic Value | ' |
Outstanding at the beginning of the period (in dollars) | $2,384,000 |
Exercised (in dollars) | 1,198,000 |
Outstanding at the end of the period (in dollars) | 10,205,000 |
RSUs | ' |
RSU's | ' |
Nonvested at the beginning of the period (in shares) | 1,231,650 |
Granted (in shares) | 706,950 |
Vested (in shares) | -486,150 |
Forfeited (in shares) | -30,300 |
Nonvested at the end of the period (in shares) | 1,422,150 |
Weighted Average Grant Date Fair Value | ' |
Outstanding at the beginning of the period (in dollars per share) | $2.50 |
Granted (in dollars per share) | $4.82 |
Vested (in dollars per share) | $2.66 |
Forfeited (in dollars per share) | $2.53 |
Outstanding at the end of the period (in dollars per share) | $3.60 |
Additional disclosures | ' |
Total fair value | $2,600,000 |
STOCK_PLANS_Details_2
STOCK PLANS (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 29, 2014 | Jun. 30, 2013 | Jun. 29, 2014 | Jun. 30, 2013 |
item | ||||
Stock Plans | ' | ' | ' | ' |
Number of stock-based compensation plans | ' | ' | 3 | ' |
Stock-based compensation expense | $627 | $635 | $1,574 | $1,738 |
SUBSEQUENT_EVENT_Details
SUBSEQUENT EVENT (Details) (USD $) | Jun. 29, 2014 | Aug. 05, 2014 | Aug. 05, 2014 | Aug. 05, 2014 | Aug. 05, 2014 |
9.00% Notes | Subsequent event | Subsequent event | Subsequent event | Subsequent event | |
9.00% Notes | Affiliate agreement | Classified Ventures LLC | Classified Ventures LLC | ||
Cars.com products and services | Expected | ||||
Expected | |||||
Subsequent event | ' | ' | ' | ' | ' |
Total consideration | ' | ' | ' | $2,500,000,000 | ' |
Proceeds on sale of business | ' | ' | ' | ' | $640,000,000 |
Agreement term | ' | ' | '5 years | ' | ' |
Interest rate (as a percent) | 9.00% | 9.00% | ' | ' | ' |
Period within which reinvestment of after-tax proceeds not made from closing of the transactions | ' | '365 days | ' | ' | ' |