Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 27, 2016 | Apr. 27, 2016 | |
Entity Registrant Name | MCCLATCHY CO | |
Entity Central Index Key | 1,056,087 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 27, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-25 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Common Class A | ||
Entity Common Stock, Shares Outstanding | 54,217,961 | |
Common Class B | ||
Entity Common Stock, Shares Outstanding | 24,431,962 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 27, 2016 | Mar. 29, 2015 | |
REVENUES - NET: | ||
Advertising | $ 136,256 | $ 151,247 |
Audience | 90,662 | 93,209 |
Other | 11,061 | 12,722 |
Revenues, total | 237,979 | 257,178 |
OPERATING EXPENSES: | ||
Compensation | 102,774 | 106,672 |
Newsprint, supplements and printing expenses | 19,032 | 24,776 |
Depreciation and amortization | 24,562 | 23,663 |
Other operating expenses | 97,658 | 103,225 |
Operating expenses, total | 244,026 | 258,336 |
OPERATING LOSS | (6,047) | (1,158) |
NON-OPERATING (EXPENSE) INCOME: | ||
Interest expense | (20,247) | (22,338) |
Interest income | 96 | 63 |
Equity income in unconsolidated companies, net | 1,849 | 3,867 |
Gains related to equity investments | 633 | |
Gain on extinguishment of debt, net | 1,535 | |
Other - net | (42) | (66) |
Non-operating (expense) income, total | (16,809) | (17,841) |
Loss before income taxes | (22,856) | (18,999) |
Income tax benefit | (10,115) | (7,653) |
NET LOSS | $ (12,741) | $ (11,346) |
Basic: | ||
Net loss per share - basic (in dollars per share) | $ (0.16) | $ (0.13) |
Diluted: | ||
Net loss per share - diluted (in dollars per share) | $ (0.16) | $ (0.13) |
Weighted average number of common shares used to calculate basic and diluted earnings per share: | ||
Basic (in shares) | 80,580 | 87,207 |
Diluted (in shares) | 80,580 | 87,207 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2016 | Mar. 29, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
NET LOSS | $ (12,741) | $ (11,346) |
Pension and post retirement plans: | ||
Change in pension and post-retirement benefit plans, net of taxes of $(1,535) and $(1,921) | 2,302 | 2,881 |
Investment in unconsolidated companies: | ||
Other comprehensive loss, net of taxes of $330 and $165 | (495) | (247) |
Other comprehensive income (loss) | 1,807 | 2,634 |
Comprehensive loss | $ (10,934) | $ (8,712) |
CONSOLIDATED STATEMENTS OF COM4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2016 | Mar. 29, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Unamortized net loss and other components of benefit plans, taxes | $ (1,535) | $ (1,921) |
Other comprehensive loss, taxes | $ 330 | $ 165 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 27, 2016 | Dec. 27, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 17,587 | $ 9,332 |
Trade receivables (net of allowances of $4,497 in 2016 and $4,451 in 2015) | 101,763 | 138,153 |
Other receivables | 10,827 | 16,367 |
Newsprint, ink and other inventories | 19,134 | 16,659 |
Assets held for sale | 5,357 | 5,357 |
Other current assets | 21,730 | 19,194 |
Total current assets | 176,398 | 205,062 |
Property, plant and equipment, net | 355,495 | 364,219 |
Intangible assets: | ||
Identifiable intangibles - net | 336,653 | 348,651 |
Goodwill | 705,174 | 705,174 |
Total intangible assets | 1,041,827 | 1,053,825 |
Investments and other assets: | ||
Investments in unconsolidated companies | 235,217 | 233,538 |
Deferred income taxes | 11,536 | 1,312 |
Other assets | 65,952 | 65,078 |
Total investments and other assets | 312,705 | 299,928 |
TOTAL ASSETS | 1,886,425 | 1,923,034 |
Current liabilities: | ||
Accounts payable | 38,812 | 41,751 |
Accrued pension liabilities | 8,450 | 8,450 |
Accrued compensation | 27,544 | 29,410 |
Income taxes payable | 717 | 687 |
Unearned revenue | 64,819 | 60,811 |
Accrued interest | 16,735 | 9,423 |
Other accrued liabilities | 20,144 | 15,195 |
Total current liabilities | 177,221 | 165,727 |
Non-current liabilities : | ||
Long-term debt | 875,989 | 905,425 |
Pension and postretirement obligations | 531,985 | 581,852 |
Financing obligations | 74,829 | 32,398 |
Other long-term obligations | 47,137 | 44,869 |
Total non-current liabilities | $ 1,529,940 | $ 1,564,544 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Additional paid-in capital | $ 2,220,848 | $ 2,219,481 |
Accumulated deficit | (1,616,287) | (1,603,546) |
Treasury stock at cost, 5,243,663 shares in 2016 and 1,652,165 shares in 2015 | (6,135) | (2,196) |
Accumulated other comprehensive loss | (420,001) | (421,808) |
Total stockholders' equity | 179,264 | 192,763 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 1,886,425 | 1,923,034 |
Common Class A | ||
Stockholders' equity: | ||
Common stock | 595 | 588 |
Common Class B | ||
Stockholders' equity: | ||
Common stock | $ 244 | $ 244 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 27, 2016 | Dec. 27, 2015 |
Trade receivables, allowance | $ 4,497 | $ 4,451 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Treasury stock, shares | 5,249,454 | 1,652,165 |
Common Class A | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 59,467,435 | 58,782,535 |
Common Class B | ||
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 24,431,962 | 24,431,962 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2016 | Mar. 29, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
NET LOSS | $ (12,741) | $ (11,346) |
Reconciliation to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 24,562 | 23,663 |
(Gain) loss on disposal of equipment | (73) | 70 |
Retirement benefit expense | 3,694 | 2,493 |
Stock-based compensation expense | 1,374 | 1,714 |
Equity income in unconsolidated companies | (1,849) | (3,867) |
Gains related to equity investments | (633) | |
Gain on extinguishment of debt, net | (1,535) | |
Other | (1,691) | (1,706) |
Changes in certain assets and liabilities: | ||
Trade receivables | 36,390 | 31,313 |
Inventories | (2,475) | (1,359) |
Other assets | 1,072 | (3,413) |
Accounts payable | (2,939) | (5,856) |
Accrued compensation | (1,866) | (2,244) |
Income taxes | (10,341) | (186,231) |
Accrued interest | 7,312 | 7,770 |
Other liabilities | 6,867 | 5,185 |
Net cash provided by (used in) operating activities | 45,761 | (144,447) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (3,314) | (2,575) |
Contributions to equity investments | (500) | |
Other-net | 111 | 639 |
Net cash used in investing activities | (3,703) | (1,936) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repurchase of public notes | (28,804) | |
Purchase of treasury shares | (3,939) | |
Other | (1,060) | (936) |
Net cash used in financing activities | (33,803) | (936) |
Increase (decrease) in cash and cash equivalents | 8,255 | (147,319) |
Cash and cash equivalents at beginning of period | 9,332 | 220,861 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 17,587 | $ 73,542 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 27, 2016 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | THE MCCLATCHY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. SIGNIFICANT ACCOUNTING POLICIES Business and Basis of Accounting The McClatchy Company (the “Company,” “we,” “us” or “our”) is a 21st century news and information publisher of well-respected publications such as the Miami Herald , The Kansas City Star , The Sacramento Bee , The Charlotte Observer , The (Raleigh) News and Observer , and the (Fort Worth) Star-Telegram . We operate 29 media companies in 28 U.S. markets in 14 states, providing each of our communities with high-quality news and advertising services in a wide array of digital and print formats. We are headquartered in Sacramento, California, and our Class A Common Stock is listed on the New York Stock Exchange under the symbol MNI. We also own 15.0% of CareerBuilder LLC, which operates the nation’s largest online jobs website, CareerBuilder.com, as well as certain other digital company investments. 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 27, 2015 (“Form 10-K”). Each of the fiscal periods included herein comprise 13 weeks for the first-quarter periods. Fair Value of Financial Instruments We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 – Unadjusted quoted prices available in active markets for identical investments as of the reporting date. Level 2 – Observable inputs to the valuation methodology are other than Level 1 inputs and are either directly or indirectly observable as of the reporting date and fair value can be determined through the use of models or other valuation methodologies. Level 3 – Inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability, and the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk. Our policy is to recognize significant transfers between levels at the actual date of the event or circumstance that caused the transfer. The following methods and assumptions were used to estimate the fair value of each class of financial instruments: Cash and cash equivalents, accounts receivable and accounts payable. As of March 27, 2016 , and December 27, 2015 , the carrying amount of these items approximates fair value because of the short maturity of these financial instruments. Long-term debt. The fair value of our long-term debt is determined using quoted market prices and other inputs that were derived from available market information, including the current market activity of our publicly-traded notes and bank debt, trends in investor demand for debt and market values of comparable publicly-traded debt. These are considered to be Level 2 inputs under the fair value measurements and disclosure guidance, and may not be representative of actual value. At March 27, 2016 , and December 27, 2015 , the estimated fair value of long-term debt was $693.1 million and $729.8 million, respectively. At March 27, 2016 , and December 27, 2015 , the carrying value of our long-term debt was $ 876.0 million and $ 905 .4 million, respectively. Pension plan . As of March 27, 2016 , and December 27, 2015 , we had assets related to our qualified defined benefit pension plan measured at fair value. Certain assets are measured at fair value on a nonrecurring basis; that is, they are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Our non-financial assets measured at fair value on a nonrecurring basis are assets held for sale, goodwill, intangible assets not subject to amortization and equity method investments. All of these are measured using Level 3 inputs. We utilize valuation techniques that seek to maximize the use of observable inputs and minimize the use of unobservable inputs. The significant unobservable inputs include our expected cash flows and discount rates that we estimate market participants would seek for bearing the risk associated with such assets. Property, plant and equipment During the three months ended March 27, 2016 , we incurred $2.8 million in accelerated depreciation related to the production equipment associated with outsourcing our printing process at two of our media companies. No similar transactions were recorded during the three months ended March 29, 2015. Depreciation expense with respect to property, plant and equipment is summarized below: Three Months Ended March 27, March 29, (in thousands) 2016 2015 Depreciation expense $ 12,564 $ 11,523 Assets held for sale Assets held for sale includes land and buildings that we began to actively market for sale during 2015 at one of our media companies and a parking structure at another media company. No similar transactions were recorded during the three months ended March 27, 2016. Intangible Assets and Goodwill We test for impairment of goodwill annually, at year ‑end, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The required two ‑step approach uses accounting judgments and estimates of future operating results. Changes in estimates or the application of alternative assumptions could produce significantly different results. Impairment testing is done at a reporting unit level. We perform this testing on operating segments, which are also considered our reporting units. An impairment loss generally is recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The fair value of our reporting units is determined using a combination of a discounted cash flow model and market based approaches. The estimates and judgments that most significantly affect the fair value calculation are assumptions related to revenue growth, newsprint prices, compensation levels, discount rate, and for the market based approach, private and public market trading multiples for newspaper assets. We consider current market capitalization, based upon the recent stock market prices, plus an estimated control premium in determining the reasonableness of the aggregate fair value of the reporting units. We had no impairment of goodwill during the three months ended March 27, 2016, or March 29, 2015. Newspaper mastheads (newspaper titles and website domain names) are not subject to amortization and are tested for impairment annually, at year ‑end, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of each newspaper masthead with its carrying amount. We use a relief-from-royalty approach that utilizes a discounted cash flow model, as discussed above, to determine the fair value of each newspaper masthead. We had no impairment of newspaper mastheads during the three months ended March 27, 2016, or March 29, 2015. Long ‑lived assets such as intangible assets (primarily advertiser and subscriber lists) are amortized and tested for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The carrying amount of each asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of such asset group. We had no impairment of long ‑lived assets subject to amortization during the three months ended March 27, 2016 , or March 29, 2015 . Segment Reporting We operate 29 media companies, providing each of our communities with high-quality news and advertising services in a wide array of digital and print formats. We have two operating segments that we aggregate into a single reportable segment because each has similar economic characteristics, products, customers and distribution methods. Our operating segments are based on how our chief executive officer, who is also our Chief Operating Decision Maker (“CODM”), makes decisions about allocating resources and assessing performance. The CODM is provided discrete financial information for the two operating segments. Each operating segment consists of a group of media companies and both operating segments report to the same segment manager. As of March 27, 2016, one of our operating segments (“Western Segment”) consists of our media operations in California, the Northwest, and the Midwest, while the other operating segment (“Eastern Segment”) consists primarily of media operations in the Southeast and Florida. Accumulated Other Comprehensive Loss Our accumulated other comprehensive loss (“AOCL”) and reclassifications from AOCL, net of tax, consisted of the following: Other Minimum Comprehensive Pension and Loss Post- Related to Retirement Equity (in thousands) Liability Investments Total Balance at December 27, 2015 $ $ $ Other comprehensive income (loss) before reclassifications — Amounts reclassified from AOCL — Other comprehensive income (loss) Balance at March 27, 2016 $ $ $ Amount Reclassified from AOCL Three Months Ended March 27, March 29, Affected Line in the Condensed AOCL Component 2016 2015 Consolidated Statements of Operations Minimum pension and post-retirement liability $ $ Compensation Benefit for income taxes $ $ 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. Earnings Per Share (EPS) Basic EPS excludes dilution from common stock equivalents and reflects income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is based upon the weighted average number of outstanding shares of common stock and dilutive common stock equivalents in the period. Common stock equivalents arise from dilutive stock appreciation rights, 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 common stock equivalents that could potentially dilute basic EPS in the future, but were not included in the weighted average share calculation, consisted of the following: Three Months Ended March 27, March 29, (shares in thousands) 2016 2015 Anti-dilutive common stock equivalents Cash Flow Information Cash paid for interest and income taxes consisted of the following: Three Months Ended March 27, March 29, (in thousands) 2016 2015 Interest paid (net of amount capitalized) $ $ Income taxes paid (net of refunds) Other-non cash financing activities: Financing obligation for contribution of real property to pension plan $ Reduction of pension obligation The income tax payments in the three months ended March 29, 2015 , were primarily related to the gain on the sale of a previous owned equity investment in the fourth quarter of 2014, offset by the net of tax losses on bond repurchases in the fourth quarter of 2014. Other non-cash financing activities relate to the contribution of real property to the Pension Plan. See Note 5 for further discussion. Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) ASU No. 2014-09, “ Revenue from Contracts with Customers .” ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. It is effective for us for annual and interim periods beginning on or after December 15, 2017, and early adoption is permitted for interim or annual reporting periods beginning after December 15, 2016. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, “ Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern .” ASU 2014-15 requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnotes disclosures in certain circumstances. It is effective for us for annual and interim periods beginning on or after December 15, 2016, with early adoption permitted. We do not believe the adoption of this guidance will have an impact on our condensed consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, “ Simplifying the Measurement of Inventory .” ASU 2015-11 simplifies the measurement of inventory by requiring certain inventory to be measured at the “lower of cost and net realizable value” and options that currently exist for “market value” will be eliminated. The ASU defines net realizable value as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” It is effective for us for interim and annual reporting periods beginning after December 15, 2016. The standard should be applied prospectively with early adoption permitted. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, “ Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities .” ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for us for interim and annual reporting periods beginning after December 15, 2017. We do not believe the adoption of this guidance will have an impact on our condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “ Leases ” (Accounting Standards Codification 842 (“ASC 842”)) and it replaces the existing guidance in ASC 840, “ Leases. ” ASC 842 requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. The new lease standard does not substantially change lessor accounting. It is effective for us for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently in the process of evaluating the impact of the adoption on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-08, “ Revenue from Contracts with Customers (Topic 606): Principal versus Agent Consideration (Reporting Revenue Gross versus Net) .” ASU 2016-08 does not change the core principle of the guidance stated in ASU 2014-09, instead, the amendments in this ASU are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. ASU 2016-08 will have the same effective date and transition requirements as the new revenue standard issued in ASU 2014-09, as described above. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “ Compensation-Stock Compensation (Topic 718): Improvements of Employee Share-Based Payment Accounting .” ASU 2016-09 makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. This guidance also clarifies the statement of cash flows presentation of certain components of share-based awards. ASU 2016-09 is effective for us for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. We do not believe the adoption of this guidance will have a material impact on our condensed consolidated financial statements. In April 2016, the FASB issued ASU No. 2016-10, “ Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing .” ASU 2016-10 does not change the core principle of the guidance stated in ASU 2014-09, instead, the amendments in this ASU are intended to clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. ASU 2016-08 will have the same effective date and transition requirements as the new revenue standard issued in ASU 2014-09, as described above. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. Recently Adopted Accounting Pronouncements In February 2015, the FASB issued ASU No. 2015-02, “ Consolidation (Topic 810); Amendments to the Consolidated Analysis ,” which changed the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. This guidance was effective for us at the beginning of 2016. The adoption of this guidance did not have an impact on our condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, " Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. " ASU 2015-05 provided guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance does not change the accounting for service contracts. This guidance was effective for us at the beginning of 2016. The adoption of this guidance did not have an impact on our condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-07, “ Investments-Equity Method and Joint Ventures (Topic 323) .” ASU 2016-07 eliminates the requirement that when an existing cost method investment qualifies for use of the equity method, an investor must restate its historical financial statements, as if the equity method had been used during all previous periods. Under the new guidance, at the point an investment qualifies for the equity method, any unrealized gain or loss in accumulated other comprehensive income (loss) will be recognized through earnings. ASU 2016-07 is effective for us for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. We early adopted this standard and it did not have an impact on our condensed consolidated financial statements . |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 3 Months Ended |
Mar. 27, 2016 | |
INTANGIBLE ASSETS AND GOODWILL | |
INTANGIBLE ASSETS AND GOODWILL | 2. INTANGIBLE ASSETS AND GOODWILL Intangible assets subject to amortization (primarily advertiser lists, subscriber lists and developed technology), mastheads and goodwill consisted of the following: December 27, Amortization March 27, (in thousands) 2015 Expense 2016 Intangible assets subject to amortization $ $ — $ Accumulated amortization Mastheads — Goodwill — Total $ $ $ Amortization expense with respect to intangible assets is summarized below: Three Months Ended March 27, March 29, (in thousands) 2016 2015 Amortization expense $ $ The estimated amortization expense for the remainder of fiscal year 2016 and the five succeeding fiscal years is as follows: Amortization Expense Year (in thousands) 2016 (Remainder) $ 2017 2018 2019 2020 2021 |
INVESTMENTS IN UNCONSOLIDATED C
INVESTMENTS IN UNCONSOLIDATED COMPANIES | 3 Months Ended |
Mar. 27, 2016 | |
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 March 27, December 27, Company Interest 2016 2015 CareerBuilder, LLC 15.0 $ $ Other Various $ $ On February 23, 2016, we, along with Gannett Co. Inc. and Tribune Publishing Co. (the “Selling Partners”) sold all of the assets in HomeFinder LLC to Placester Inc. (“Placester”) in exchange for a small stock ownership in Placester and an affiliate agreement with Placester to continue to allow the Selling Partners to sell Placester and HomeFinder LLC’s products and services. As a result of this transaction, during the quarter ended March 27, 2016, we wrote down $0.9 million of our HomeFinder LLC investment, which is recorded in equity income in unconsolidated companies, net , on our condensed consolidated statements of operations. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 27, 2016 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 4. LONG-TERM DEBT Our long-term debt consisted of the following: Face Value at Carrying Value March 27, March 27, December 27, (in thousands) 2016 2016 2015 Notes: 9.00% senior secured notes due in 2022 $ $ $ 5.750% notes due in 2017 7.150% debentures due in 2027 6.875% debentures due in 2029 Long-term debt $ $ $ Our outstanding notes are stated net of unamortized debt issuance costs and unamortized discounts, if applicable, totaling $30.5 million and $31.9 million as of March 27, 2016 , and December 27, 2015, respectively. Debt Repurchases and Loss on Extinguishment of Debt During the three months ended March 27, 2016 , we repurchased a total of $30.8 million of notes through privately negotiated transactions as follows: (in thousands) Face Value 9.00% senior secured notes due in 2022 $ 5.750% notes due in 2017 Total notes repurchased $ We recorded a net gain on extinguishment of debt of $1.5 million during the three months ended March 27, 2016 . We repurchased these notes at a discount and wrote off historical discounts and debt issuance costs during the quarter ended March 27, 2016. We had no debt repurchases during the three months ended March 29, 2015 . Credit Agreement Our Third Amended and Restated Credit Agreement dated December 18, 2012, as amended (“Credit Agreement”), is secured by a first-priority security interest in certain of our assets as described below. The Credit Agreement, among other things, provides for commitments of $65.0 million and a maturity date of December 18, 2019. On October 21, 2014, we entered into a Collateralized Issuance and Reimbursement Agreement (“LC Agreement”). Pursuant to the terms of LC Agreement, we may request letters of credit be issued on our behalf in an aggregate face amount not to exceed $35.0 million. We are required to provide cash collateral equal to 101% of the aggregate undrawn stated amount of each outstanding letter of credit. As of March 27, 2016 , there were standby letters of credit outstanding under the LC Agreement with an aggregate face amount of $31.0 million. There were no borrowings outstanding under the Credit Agreement as of March 27, 2016 . Under the Credit Agreement, we may borrow at either the London Interbank Offered Rate plus a spread ranging from 275 basis points to 425 basis points, or at a base rate plus a spread ranging from 175 basis points to 325 basis points, in each case based upon our consolidated total leverage ratio. The Credit Agreement provides for a commitment fee payable on the unused revolving credit ranging from 50 basis points to 62.5 basis points, based upon our consolidated total leverage ratio. Senior Secured Notes and Indenture Substantially all of our subsidiaries guarantee the obligations under the 9.00% Senior Secured Notes due in 2022 (“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 covenant under the Credit Agreement requires us to comply with a maximum consolidated total leverage ratio measured quarterly. As of March 27, 2016 , we are required to maintain a consolidated total leverage ratio of not more than 6.00 to 1.00. For purposes of consolidated total leverage ratio, debt is largely defined as debt, net of cash on hand in excess of $20.0 million. As of March 27, 2016 , we were in compliance with our 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 | 3 Months Ended |
Mar. 27, 2016 | |
EMPLOYEE BENEFITS | |
EMPLOYEE BENEFITS | 5. EMPLOYEE BENEFITS We maintain a noncontributory qualified defined benefit pension plan (“Pension Plan”) , which covers certain eligible current and former employees and has been frozen since March 31, 2009. No new participants may enter the Pension Plan and no further benefits will accrue. However, years of service continue to count toward early retirement calculations and vesting of benefits previously earned. We also have a limited number of supplemental retirement plans to provide certain key current and former employees with additional retirement benefits. These plans are funded on a pay-as-you-go basis and the accrued pension obligation is largely included in other long-term obligations. The elements of retirement expense are as follows: Three Months Ended March 27, March 29, (in thousands) 2016 2015 Pension plans: Service Cost $ $ Interest Cost Expected return on plan assets Actuarial loss Net pension expense Net post-retirement benefit credit Net retirement expenses $ $ In February 2016, we contributed certain of our real property appraised at $47.1 million to our Pension Plan and we entered into lease-back arrangements for the contributed facilities. Our required pension contribution under the Employee Retirement Income Security Act for 2016 is approximately $2.0 million, and the contribution of real property will exceed our required pension contribution for 2016. We leased back the contributed facilities under 11 -year leases with initial annual payments totaling approximately $3.5 million. The contribution and leaseback of these properties in 2016 will be treated as a financing transaction and, accordingly, we will continue to depreciate the carrying value of the properties in our financial statements. No gain or loss will be recognized on the contributions until the termination of the individual leases on those properties. At the time of our contribution, our pension obligation was reduced and a financing obligation was recorded. The financing obligation will be reduced by a portion of the lease payments made to the Pension Plan each month. The balance of this obligation at March 27, 2016, and December 27, 2015, was $74.8 million and $32.4 million, respectively, and relates to certain real properties that were contributed to the Pension Plan in 2016 and 2011. We have a defined contribution 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 March 27, 2016 , we have not reinstated that benefit. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 27, 2016 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 6. COMMITMENTS AND CONTINGENCIES In December 2008, carriers of The Fresno Bee filed a purported class action lawsuit against us and The Fresno Bee in the Superior Court of the State of California in Fresno County captioned Becerra v. The McClatchy Company (“Fresno case”) alleging that the carriers were misclassified as independent contractors and seeking mileage reimbursement. In February 2009, a substantially similar lawsuit, Sawin v. The McClatchy Company , involving similar allegations was filed by carriers of The Sacramento Bee (“Sacramento case”) in the Superior Court of the State of California in Sacramento County. Both courts have certified the class in these cases. The class consists of roughly 5,000 carriers in the Sacramento case and 3,500 carriers in the Fresno case. The plaintiffs in both cases are seeking unspecified restitution for mileage reimbursement. With respect to the Sacramento case, in September 2013, all wage and hour claims were dismissed and the only remaining claim is an equitable claim for mileage reimbursement under the California Civil Code. In the Fresno case, in March 2014, all wage and hour claims were dismissed and the only remaining claim is an equitable claim for mileage reimbursement under the California Civil Code. The court in the Sacramento case trifurcated the trial into three separate phases: the first phase addressed independent contractor status, the second phase will address liability, if any, and the third phase will address restitution, if any. On September 22, 2014, the court in the Sacramento case issued a tentative decision following the first phase, finding that the carriers that contracted directly with The Sacramento Bee during the period from February 2005 to July 2009 were misclassified as independent contractors. We objected to the tentative decision but the court ultimately adopted it as final. The court has not yet established a date for the second and third phases of trial concerning whether The Sacramento Bee is liable to the carriers in the class for mileage reimbursement or owes any restitution. The court in the Fresno case bifurcated the trial into two separate phases: the first phase addressed independent contractor status and liability for mileage reimbursement and the second phase will address restitution, if any. The first phase of the Fresno case began in the fourth quarter of fiscal year 2014 and concluded in late March 2015. On April 14, 2016, the court in the Fresno case issued a statement of decision granting judgment in favor of us and The Fresno Bee . We continue to defend these actions vigorously and expect that we will ultimately prevail. As a result, we have not established a reserve in connection with the cases. While we believe that a material impact on our condensed consolidated financial position, results of operations or cash flows from these claims is unlikely, given the inherent uncertainty of litigation, a possibility exists that future adverse rulings or unfavorable developments could result in future charges that could have a material impact. We have and will continue to periodically reexamine our estimates of probable liabilities and any associated expenses and make appropriate adjustments to such estimates based on experience and developments in litigation. Other than the cases described above, we are subject to a variety of legal proceedings (including libel, employment, wage and hour, independent contractor and other legal actions) and governmental proceedings (including environmental matters) that arise from time to time in the ordinary course of our business. We are unable to estimate the amount or range of reasonably possible losses for these matters. However, we currently believe, after reviewing such actions with counsel, that the expected outcome of pending actions will not have a material effect on our condensed consolidated financial statements. No material amounts for any losses from litigation that may ultimately occur have been recorded in the condensed consolidated financial statements as we believe that any such losses are not probable. We have certain indemnification obligations related to the sale of assets including but not limited to insurance claims and multi-employer pension plans of disposed newspaper operations. We believe the remaining obligations related to disposed assets will not be material to our financial position, results of operations or cash flows. As of March 27, 2016 , we had $31.0 million of standby letters of credit secured under the LC Agreement (see Note 4, Long-Term Debt , for further discussion). |
STOCK PLANS
STOCK PLANS | 3 Months Ended |
Mar. 27, 2016 | |
STOCK PLANS | |
STOCK PLANS | 7. STOCK PLANS Stock Plans Activity The following table summarizes the restricted stock units (“RSUs”) activity during the three months ended March 27, 2016 : Weighted Average Grant Date Fair Value Nonvested — December 27, 2015 $ Granted $ Vested $ Forfeited $ Nonvested — March 27, 2016 $ The total fair value of the RSUs that vested during the three months ended March 27, 2016 , was $0.7 million. The following table summarizes the stock appreciation rights (“SARs”) activity during the three months ended March 27, 2016 : Weighted Aggregate Average Intrinsic Value SARs Exercise Price (in thousands) Outstanding December 27, 2015 $ $ — Forfeited $ Expired $ Outstanding March 27, 2016 $ $ — 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 March 27, 2016 , we had two stock-based compensation plans. Stock-based compensation expenses are reported in the compensation line item in the condensed consolidated statements of operations. Total stock-based compensation expense for the periods presented in this report, are as follows: Three Months Ended March 27, March 29, (in thousands) 2016 2015 Stock-based compensation expense $ $ |
POTENTIAL REVERSE STOCK SPLIT
POTENTIAL REVERSE STOCK SPLIT | 3 Months Ended |
Mar. 27, 2016 | |
POTENTIAL REVERSE STOCK SPLIT | |
POTENTIAL REVERSE STOCK SPLIT | 8. Potential Reverse Stock Split In the first quarter of 2016, our Board of Directors adopted a resolution approving an Amended and Restated Certificate of Incorporation which would allow the Company to effect a reverse stock split of our issued and outstanding Class A and Class B Common Stock at a ratio of not less than one -for- five (1:5) and not more than one -for- twenty five (1:25), with the exact reverse stock split ratio to be determined by the Board of Directors , if they so choose, and publicly announced prior to the filing of the Amended and Restated Certificate of Incorporation. The reverse stock split ratio will be the same for both the Class A and Class B Common Stock. The Amended and Restated Certificate of Incorporation is subject to share holder approval at our Annual Meeting of Shareholders , scheduled to be held on May 18, 2016. The primary purpose of effecting the reverse stock split , if the Board of Directors so elects, is to increase our trading price on the New York Stock Exchange (“NYSE”) to comply with the NYSE continued listing standard requirements , which require an average closing price of at least $1.00 per share over thirty consecutive trading days . On February 16, 2016, we received notification from the NYSE that we were not in compliance with the NYSE’s continued listing standard requirement. However, as of April 1, 2016, we were notified that we are currently in compliance with the standard. If the Amended and Restated Certificate of Incorporation effecting the reverse stock split is adopted by the shareholders, an Amended and Restated Certificate of Incorporation will become effective, if at all, only upon a determination by the Board of Directors within six months after the A nnual M eeting of Shareholders of the reverse stock ratio to be used and that the actions contemplated by the Amended and Restated Certificate of Incorporation containing such reverse stock split ratio are in the best interests of the Company and the shareholders. |
SIGNIFICANT ACCOUNTING POLICI16
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 27, 2016 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Business and Basis of Accounting | Business and Basis of Accounting The McClatchy Company (the “Company,” “we,” “us” or “our”) is a 21st century news and information publisher of well-respected publications such as the Miami Herald , The Kansas City Star , The Sacramento Bee , The Charlotte Observer , The (Raleigh) News and Observer , and the (Fort Worth) Star-Telegram . We operate 29 media companies in 28 U.S. markets in 14 states, providing each of our communities with high-quality news and advertising services in a wide array of digital and print formats. We are headquartered in Sacramento, California, and our Class A Common Stock is listed on the New York Stock Exchange under the symbol MNI. We also own 15.0% of CareerBuilder LLC, which operates the nation’s largest online jobs website, CareerBuilder.com, as well as certain other digital company investments. 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 27, 2015 (“Form 10-K”). Each of the fiscal periods included herein comprise 13 weeks for the first-quarter periods. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 – Unadjusted quoted prices available in active markets for identical investments as of the reporting date. Level 2 – Observable inputs to the valuation methodology are other than Level 1 inputs and are either directly or indirectly observable as of the reporting date and fair value can be determined through the use of models or other valuation methodologies. Level 3 – Inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability, and the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk. Our policy is to recognize significant transfers between levels at the actual date of the event or circumstance that caused the transfer. The following methods and assumptions were used to estimate the fair value of each class of financial instruments: Cash and cash equivalents, accounts receivable and accounts payable. As of March 27, 2016 , and December 27, 2015 , the carrying amount of these items approximates fair value because of the short maturity of these financial instruments. Long-term debt. The fair value of our long-term debt is determined using quoted market prices and other inputs that were derived from available market information, including the current market activity of our publicly-traded notes and bank debt, trends in investor demand for debt and market values of comparable publicly-traded debt. These are considered to be Level 2 inputs under the fair value measurements and disclosure guidance, and may not be representative of actual value. At March 27, 2016 , and December 27, 2015 , the estimated fair value of long-term debt was $693.1 million and $729.8 million, respectively. At March 27, 2016 , and December 27, 2015 , the carrying value of our long-term debt was $ 876.0 million and $ 905 .4 million, respectively. Pension plan . As of March 27, 2016 , and December 27, 2015 , we had assets related to our qualified defined benefit pension plan measured at fair value. Certain assets are measured at fair value on a nonrecurring basis; that is, they are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Our non-financial assets measured at fair value on a nonrecurring basis are assets held for sale, goodwill, intangible assets not subject to amortization and equity method investments. All of these are measured using Level 3 inputs. We utilize valuation techniques that seek to maximize the use of observable inputs and minimize the use of unobservable inputs. The significant unobservable inputs include our expected cash flows and discount rates that we estimate market participants would seek for bearing the risk associated with such assets. |
Property, plant and equipment | Property, plant and equipment During the three months ended March 27, 2016 , we incurred $2.8 million in accelerated depreciation related to the production equipment associated with outsourcing our printing process at two of our media companies. No similar transactions were recorded during the three months ended March 29, 2015. Depreciation expense with respect to property, plant and equipment is summarized below: Three Months Ended March 27, March 29, (in thousands) 2016 2015 Depreciation expense $ 12,564 $ 11,523 |
Assets held for sale | Assets held for sale Assets held for sale includes land and buildings that we began to actively market for sale during 2015 at one of our media companies and a parking structure at another media company. No similar transactions were recorded during the three months ended March 27, 2016. |
Intangible Assets and Goodwill | Intangible Assets and Goodwill We test for impairment of goodwill annually, at year ‑end, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The required two ‑step approach uses accounting judgments and estimates of future operating results. Changes in estimates or the application of alternative assumptions could produce significantly different results. Impairment testing is done at a reporting unit level. We perform this testing on operating segments, which are also considered our reporting units. An impairment loss generally is recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The fair value of our reporting units is determined using a combination of a discounted cash flow model and market based approaches. The estimates and judgments that most significantly affect the fair value calculation are assumptions related to revenue growth, newsprint prices, compensation levels, discount rate, and for the market based approach, private and public market trading multiples for newspaper assets. We consider current market capitalization, based upon the recent stock market prices, plus an estimated control premium in determining the reasonableness of the aggregate fair value of the reporting units. We had no impairment of goodwill during the three months ended March 27, 2016, or March 29, 2015. Newspaper mastheads (newspaper titles and website domain names) are not subject to amortization and are tested for impairment annually, at year ‑end, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of each newspaper masthead with its carrying amount. We use a relief-from-royalty approach that utilizes a discounted cash flow model, as discussed above, to determine the fair value of each newspaper masthead. We had no impairment of newspaper mastheads during the three months ended March 27, 2016, or March 29, 2015. Long ‑lived assets such as intangible assets (primarily advertiser and subscriber lists) are amortized and tested for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The carrying amount of each asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of such asset group. We had no impairment of long ‑lived assets subject to amortization during the three months ended March 27, 2016 , or March 29, 2015 . |
Segment reporting | Segment Reporting We operate 29 media companies, providing each of our communities with high-quality news and advertising services in a wide array of digital and print formats. We have two operating segments that we aggregate into a single reportable segment because each has similar economic characteristics, products, customers and distribution methods. Our operating segments are based on how our chief executive officer, who is also our Chief Operating Decision Maker (“CODM”), makes decisions about allocating resources and assessing performance. The CODM is provided discrete financial information for the two operating segments. Each operating segment consists of a group of media companies and both operating segments report to the same segment manager. As of March 27, 2016, one of our operating segments (“Western Segment”) consists of our media operations in California, the Northwest, and the Midwest, while the other operating segment (“Eastern Segment”) consists primarily of media operations in the Southeast and Florida. |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Our accumulated other comprehensive loss (“AOCL”) and reclassifications from AOCL, net of tax, consisted of the following: Other Minimum Comprehensive Pension and Loss Post- Related to Retirement Equity (in thousands) Liability Investments Total Balance at December 27, 2015 $ $ $ Other comprehensive income (loss) before reclassifications — Amounts reclassified from AOCL — Other comprehensive income (loss) Balance at March 27, 2016 $ $ $ Amount Reclassified from AOCL Three Months Ended March 27, March 29, Affected Line in the Condensed AOCL Component 2016 2015 Consolidated Statements of Operations Minimum pension and post-retirement liability $ $ Compensation Benefit for income taxes $ $ 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. |
Earnings Per Share (EPS) | Earnings Per Share (EPS) Basic EPS excludes dilution from common stock equivalents and reflects income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is based upon the weighted average number of outstanding shares of common stock and dilutive common stock equivalents in the period. Common stock equivalents arise from dilutive stock appreciation rights, 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 common stock equivalents that could potentially dilute basic EPS in the future, but were not included in the weighted average share calculation, consisted of the following: Three Months Ended March 27, March 29, (shares in thousands) 2016 2015 Anti-dilutive common stock equivalents |
Cash Flow Information | Cash Flow Information Cash paid for interest and income taxes consisted of the following: Three Months Ended March 27, March 29, (in thousands) 2016 2015 Interest paid (net of amount capitalized) $ $ Income taxes paid (net of refunds) Other-non cash financing activities: Financing obligation for contribution of real property to pension plan $ Reduction of pension obligation The income tax payments in the three months ended March 29, 2015 , were primarily related to the gain on the sale of a previous owned equity investment in the fourth quarter of 2014, offset by the net of tax losses on bond repurchases in the fourth quarter of 2014. Other non-cash financing activities relate to the contribution of real property to the Pension Plan. See Note 5 for further discussion. |
Recently Issued and Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) ASU No. 2014-09, “ Revenue from Contracts with Customers .” ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. It is effective for us for annual and interim periods beginning on or after December 15, 2017, and early adoption is permitted for interim or annual reporting periods beginning after December 15, 2016. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, “ Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern .” ASU 2014-15 requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnotes disclosures in certain circumstances. It is effective for us for annual and interim periods beginning on or after December 15, 2016, with early adoption permitted. We do not believe the adoption of this guidance will have an impact on our condensed consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, “ Simplifying the Measurement of Inventory .” ASU 2015-11 simplifies the measurement of inventory by requiring certain inventory to be measured at the “lower of cost and net realizable value” and options that currently exist for “market value” will be eliminated. The ASU defines net realizable value as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” It is effective for us for interim and annual reporting periods beginning after December 15, 2016. The standard should be applied prospectively with early adoption permitted. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, “ Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities .” ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for us for interim and annual reporting periods beginning after December 15, 2017. We do not believe the adoption of this guidance will have an impact on our condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “ Leases ” (Accounting Standards Codification 842 (“ASC 842”)) and it replaces the existing guidance in ASC 840, “ Leases. ” ASC 842 requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. The new lease standard does not substantially change lessor accounting. It is effective for us for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently in the process of evaluating the impact of the adoption on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-08, “ Revenue from Contracts with Customers (Topic 606): Principal versus Agent Consideration (Reporting Revenue Gross versus Net) .” ASU 2016-08 does not change the core principle of the guidance stated in ASU 2014-09, instead, the amendments in this ASU are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. ASU 2016-08 will have the same effective date and transition requirements as the new revenue standard issued in ASU 2014-09, as described above. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “ Compensation-Stock Compensation (Topic 718): Improvements of Employee Share-Based Payment Accounting .” ASU 2016-09 makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. This guidance also clarifies the statement of cash flows presentation of certain components of share-based awards. ASU 2016-09 is effective for us for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. We do not believe the adoption of this guidance will have a material impact on our condensed consolidated financial statements. In April 2016, the FASB issued ASU No. 2016-10, “ Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing .” ASU 2016-10 does not change the core principle of the guidance stated in ASU 2014-09, instead, the amendments in this ASU are intended to clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. ASU 2016-08 will have the same effective date and transition requirements as the new revenue standard issued in ASU 2014-09, as described above. We are currently in the process of evaluating the impact of the adoption on our condensed consolidated financial statements. Recently Adopted Accounting Pronouncements In February 2015, the FASB issued ASU No. 2015-02, “ Consolidation (Topic 810); Amendments to the Consolidated Analysis ,” which changed the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. This guidance was effective for us at the beginning of 2016. The adoption of this guidance did not have an impact on our condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, " Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. " ASU 2015-05 provided guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance does not change the accounting for service contracts. This guidance was effective for us at the beginning of 2016. The adoption of this guidance did not have an impact on our condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-07, “ Investments-Equity Method and Joint Ventures (Topic 323) .” ASU 2016-07 eliminates the requirement that when an existing cost method investment qualifies for use of the equity method, an investor must restate its historical financial statements, as if the equity method had been used during all previous periods. Under the new guidance, at the point an investment qualifies for the equity method, any unrealized gain or loss in accumulated other comprehensive income (loss) will be recognized through earnings. ASU 2016-07 is effective for us for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. We early adopted this standard and it did not have an impact on our condensed consolidated financial statements |
SIGNIFICANT ACCOUNTING POLICI17
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 27, 2016 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of components of property, plant and equipment | Three Months Ended March 27, March 29, (in thousands) 2016 2015 Depreciation expense $ 12,564 $ 11,523 |
Schedule of components of accumulated other comprehensive loss, net of tax | Other Minimum Comprehensive Pension and Loss Post- Related to Retirement Equity (in thousands) Liability Investments Total Balance at December 27, 2015 $ $ $ Other comprehensive income (loss) before reclassifications — Amounts reclassified from AOCL — Other comprehensive income (loss) Balance at March 27, 2016 $ $ $ |
Schedule of reclassification out of accumulated other comprehensive income | Amount Reclassified from AOCL Three Months Ended March 27, March 29, Affected Line in the Condensed AOCL Component 2016 2015 Consolidated Statements of Operations Minimum pension and post-retirement liability $ $ Compensation Benefit for income taxes $ $ Net of tax |
Summary of anti-dilutive stock options | Three Months Ended March 27, March 29, (shares in thousands) 2016 2015 Anti-dilutive common stock equivalents |
Schedule of cash paid for interest and income taxes | Three Months Ended March 27, March 29, (in thousands) 2016 2015 Interest paid (net of amount capitalized) $ $ Income taxes paid (net of refunds) Other-non cash financing activities: Financing obligation for contribution of real property to pension plan $ Reduction of pension obligation |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 3 Months Ended |
Mar. 27, 2016 | |
INTANGIBLE ASSETS AND GOODWILL | |
Schedule of intangible assets (primarily advertiser lists, subscriber lists and developed technology), mastheads and goodwill | December 27, Amortization March 27, (in thousands) 2015 Expense 2016 Intangible assets subject to amortization $ $ — $ Accumulated amortization Mastheads — Goodwill — Total $ $ $ |
Summary of amortization expense with respect to intangible assets | Three Months Ended March 27, March 29, (in thousands) 2016 2015 Amortization expense $ $ |
Amortization expense for the five succeeding fiscal years | The estimated amortization expense for the remainder of fiscal year 2016 and the five succeeding fiscal years is as follows: Amortization Expense Year (in thousands) 2016 (Remainder) $ 2017 2018 2019 2020 2021 |
INVESTMENTS IN UNCONSOLIDATED19
INVESTMENTS IN UNCONSOLIDATED COMPANIES (Tables) | 3 Months Ended |
Mar. 27, 2016 | |
INVESTMENTS IN UNCONSOLIDATED COMPANIES | |
Summary of carrying value of investments in unconsolidated companies | (in thousands) % Ownership March 27, December 27, Company Interest 2016 2015 CareerBuilder, LLC 15.0 $ $ Other Various $ $ |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 27, 2016 | |
LONG-TERM DEBT | |
Summary of company's long-term debt | Face Value at Carrying Value March 27, March 27, December 27, (in thousands) 2016 2016 2015 Notes: 9.00% senior secured notes due in 2022 $ $ $ 5.750% notes due in 2017 7.150% debentures due in 2027 6.875% debentures due in 2029 Long-term debt $ $ $ |
Redeemed or repurchase of notes | (in thousands) Face Value 9.00% senior secured notes due in 2022 $ 5.750% notes due in 2017 Total notes repurchased $ |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 3 Months Ended |
Mar. 27, 2016 | |
EMPLOYEE BENEFITS | |
Schedule of elements of retirement expense | Three Months Ended March 27, March 29, (in thousands) 2016 2015 Pension plans: Service Cost $ $ Interest Cost Expected return on plan assets Actuarial loss Net pension expense Net post-retirement benefit credit Net retirement expenses $ $ |
STOCK PLANS (Tables)
STOCK PLANS (Tables) | 3 Months Ended |
Mar. 27, 2016 | |
STOCK PLANS | |
Summary of the restricted stock units ("RSUs") activity | Weighted Average Grant Date Fair Value Nonvested — December 27, 2015 $ Granted $ Vested $ Forfeited $ Nonvested — March 27, 2016 $ |
Summary of the stock appreciation rights ("SARs") activity | The following table summarizes the stock appreciation rights (“SARs”) activity during the three months ended March 27, 2016 : Weighted Aggregate Average Intrinsic Value SARs Exercise Price (in thousands) Outstanding December 27, 2015 $ $ — Forfeited $ Expired $ Outstanding March 27, 2016 $ $ — |
Summary of stock-based compensation expense | Three Months Ended March 27, March 29, (in thousands) 2016 2015 Stock-based compensation expense $ $ |
SIGNIFICANT ACCOUNTING POLICI23
SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 3 Months Ended | |
Mar. 27, 2016USD ($)companyitem | Dec. 27, 2015USD ($) | |
Investments in Unconsolidated Companies Activity | ||
Number of media companies | company | 29 | |
Number of markets | item | 28 | |
Number of states | item | 14 | |
Length of fiscal quarter | 91 days | |
Long-term debt fair value disclosure | ||
Estimated fair value of long-term debt | $ | $ 693,100 | $ 729,800 |
Long-term debt | $ | $ 875,989 | $ 905,425 |
Career Builder LLC | ||
Investments in Unconsolidated Companies Activity | ||
Ownership Interest (as a percent) | 15.00% |
SIGNIFICANT ACCOUNTING POLICI24
SIGNIFICANT ACCOUNTING POLICIES - PP&E, Intangibles (Details) | 3 Months Ended | |
Mar. 27, 2016USD ($)segment | Mar. 29, 2015USD ($) | |
Property, plant and equipment | ||
Accelerated depreciation incurred | $ 2,800,000 | |
Depreciation expense | 12,564,000 | $ 11,523,000 |
Intangible Assets and Goodwill | ||
Goodwill impairment charge | 0 | 0 |
Impairment charge of newspaper masthead | 0 | 0 |
Intangible assets subject to amortization, net | ||
Impairment of long-lived assets subject to amortization | $ 0 | $ 0 |
Segment reporting | ||
Number of operating segments | segment | 2 |
SIGNIFICANT ACCOUNTING POLICI25
SIGNIFICANT ACCOUNTING POLICIES - AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2016 | Mar. 29, 2015 | |
Changes in accumulated other comprehensive loss | ||
Balance at the beginning of the period | $ (421,808) | |
Other comprehensive income (loss) before reclassifications | (495) | |
Amounts reclassified from AOCL | 2,302 | |
Other comprehensive income (loss) | 1,807 | $ 2,634 |
Balance at the end of the period | (420,001) | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Compensation | 102,774 | 106,672 |
Provision for income taxes | (10,115) | (7,653) |
Net of tax | 12,741 | 11,346 |
Minimum Pension and Post-Retirement Liability | ||
Changes in accumulated other comprehensive loss | ||
Balance at the beginning of the period | (411,956) | |
Amounts reclassified from AOCL | 2,302 | |
Other comprehensive income (loss) | 2,302 | |
Balance at the end of the period | (409,654) | |
Minimum Pension and Post-Retirement Liability | Amount Reclassified from AOCI | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Compensation | 3,837 | 4,802 |
Provision for income taxes | (1,535) | (1,921) |
Net of tax | 2,302 | $ 2,881 |
Other Comprehensive Loss Related to Equity Investments | ||
Changes in accumulated other comprehensive loss | ||
Balance at the beginning of the period | (9,852) | |
Other comprehensive income (loss) before reclassifications | (495) | |
Other comprehensive income (loss) | (495) | |
Balance at the end of the period | $ (10,347) |
SIGNIFICANT ACCOUNTING POLICI26
SIGNIFICANT ACCOUNTING POLICIES - EPS (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 27, 2016 | Mar. 29, 2015 | |
Anti-dilutive stock options, restricted stock units and restricted stock | ||
Weighted average anti-dilutive stock options | ||
Anti-dilutive stock options (in shares) | 4,487 | 4,565 |
SIGNIFICANT ACCOUNTING POLICI27
SIGNIFICANT ACCOUNTING POLICIES - Cash flow (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2016 | Mar. 29, 2015 | |
Cash Flow Information | ||
Interest paid (net of amount capitalized) | $ 11,087 | $ 12,695 |
Income taxes paid (net of refunds) | (5,850) | $ 178,581 |
Other non-cash investing activities | ||
Financing obligation for contribution of real property to pension plan | 47,130 | |
Reduction in pension obligation | $ (47,130) |
INTANGIBLE ASSETS AND GOODWIL28
INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($) | 3 Months Ended | ||
Mar. 27, 2016 | Mar. 29, 2015 | Mar. 27, 2016 | |
Intangible assets subject to amortization, gross | |||
Balance at the beginning of the period | $ 833,254,000 | ||
Balance at the end of the period | 833,254,000 | ||
Accumulated amortization | |||
Balance at the beginning of the period | (663,735,000) | ||
Amortization Expense | (11,998,000) | $ (12,140,000) | |
Balance at the end of the period | (675,733,000) | ||
Intangible assets subject to amortization, net | |||
Balance at the beginning of the period | 169,519,000 | ||
Amortization Expense | (11,998,000) | (12,140,000) | |
Intangible assets, net | 169,519,000 | $ 157,521,000 | |
Mastheads | |||
Balance at the beginning of the period | 179,132,000 | ||
Impairment Charges | 0 | 0 | |
Balance at the end of the period | 179,132,000 | ||
Goodwill [Roll Forward] | |||
Balance at the beginning of the period | 705,174,000 | ||
Goodwill impairment charge | 0 | 0 | |
Balance at the end of the period | 705,174,000 | ||
Total | |||
Balance at the beginning of the period | 1,053,825,000 | ||
Amortization Expense | (11,998,000) | $ (12,140,000) | |
Balance at the end of the period | $ 1,041,827,000 |
INTANGIBLE ASSETS AND GOODWIL29
INTANGIBLE ASSETS AND GOODWILL - Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2016 | Mar. 29, 2015 | |
INTANGIBLE ASSETS AND GOODWILL | ||
Amortization expense | $ 11,998 | $ 12,140 |
Estimated amortization expense | ||
2016 (remainder) | 35,988 | |
2,017 | 48,907 | |
2,018 | 47,275 | |
2,019 | 23,769 | |
2,020 | 418 | |
2,021 | $ 296 |
INVESTMENTS IN UNCONSOLIDATED30
INVESTMENTS IN UNCONSOLIDATED COMPANIES (Details) - USD ($) | 3 Months Ended | ||
Mar. 27, 2016 | Mar. 29, 2015 | Dec. 27, 2015 | |
Investments in unconsolidated companies and joint ventures | |||
Investments in unconsolidated companies | $ 235,217,000 | $ 233,538,000 | |
Goodwill impairment charge | $ 0 | $ 0 | |
Career Builder LLC | |||
Investments in unconsolidated companies and joint ventures | |||
Ownership Interest (as a percent) | 15.00% | ||
Investments in unconsolidated companies | $ 232,392,000 | 230,170,000 | |
Other | |||
Investments in unconsolidated companies and joint ventures | |||
Investments in unconsolidated companies | 2,825,000 | $ 3,368,000 | |
Home Finder LLC | |||
Investments in unconsolidated companies and joint ventures | |||
Write down of certain unconsolidated investments | $ 900,000 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Mar. 27, 2016 | Dec. 27, 2015 |
Long-term debt disclosures | ||
Face Value | $ 906,478 | |
Carrying value | 875,989 | $ 905,425 |
Total long-term debt, net of current | 875,989 | 905,425 |
Unamortized debt issuance costs and discounts | $ 30,500 | $ 31,900 |
9.00% senior secured notes due in 2022 | ||
Long-term debt disclosures | ||
Interest rate (as a percent) | 9.00% | 9.00% |
Face Value | $ 506,415 | |
Carrying value | $ 497,113 | $ 506,571 |
5.750% notes due in 2017 | ||
Long-term debt disclosures | ||
Interest rate (as a percent) | 5.75% | 5.75% |
Face Value | $ 34,645 | |
Carrying value | $ 34,168 | $ 54,551 |
7.150% debentures due in 2027 | ||
Long-term debt disclosures | ||
Interest rate (as a percent) | 7.15% | 7.15% |
Face Value | $ 89,188 | |
Carrying value | $ 84,567 | $ 84,469 |
6.875% debentures due in 2029 | ||
Long-term debt disclosures | ||
Interest rate (as a percent) | 6.875% | 6.875% |
Face Value | $ 276,230 | |
Carrying value | $ 260,141 | $ 259,834 |
LONG-TERM DEBT - Notes and Cove
LONG-TERM DEBT - Notes and Covenants (Details) $ in Thousands | Oct. 21, 2014USD ($) | Mar. 27, 2016USD ($) | Mar. 29, 2015USD ($) | Dec. 27, 2015 |
LONG-TERM DEBT | ||||
Face value of notes redeemed or repurchased | $ 0 | |||
Gain on extinguishment of debt, net | $ 1,535 | |||
Notes repurchased privately | $ 30,797 | |||
Amendment 21 October 2014 | ||||
LONG-TERM DEBT | ||||
Maximum borrowing capacity, before amendment | $ 65,000 | |||
Revolving credit facility | LIBOR | ||||
LONG-TERM DEBT | ||||
Variable rate basis | London Interbank Offered Rate | |||
Revolving credit facility | Base rate | ||||
LONG-TERM DEBT | ||||
Variable rate basis | base rate | |||
Revolving credit facility | Amendment 21 October 2014 | ||||
LONG-TERM DEBT | ||||
Outstanding line of credit | $ 0 | |||
Maximum consolidated leverage ratio | 6 | |||
Minimum threshold amount of debt used to calculate consolidated total leverage ratio | $ 20,000 | |||
Dividends restricted if consolidated leverage ratio is exceeded | 5.25 | |||
Revolving credit facility | Amendment 21 October 2014 | Minimum | ||||
LONG-TERM DEBT | ||||
Commitment fees for the unused revolving credit (as a percent) | 0.50% | |||
Revolving credit facility | Amendment 21 October 2014 | Maximum | ||||
LONG-TERM DEBT | ||||
Commitment fees for the unused revolving credit (as a percent) | 0.625% | |||
Revolving credit facility | Amendment 21 October 2014 | LIBOR | Minimum | ||||
LONG-TERM DEBT | ||||
Basis spread on variable rate (as a percent) | 2.75% | |||
Revolving credit facility | Amendment 21 October 2014 | LIBOR | Maximum | ||||
LONG-TERM DEBT | ||||
Basis spread on variable rate (as a percent) | 4.25% | |||
Revolving credit facility | Amendment 21 October 2014 | Base rate | Minimum | ||||
LONG-TERM DEBT | ||||
Basis spread on variable rate (as a percent) | 1.75% | |||
Revolving credit facility | Amendment 21 October 2014 | Base rate | Maximum | ||||
LONG-TERM DEBT | ||||
Basis spread on variable rate (as a percent) | 3.25% | |||
Letter of credit | ||||
LONG-TERM DEBT | ||||
Maximum borrowing capacity | $ 35,000 | |||
Percentage of aggregate undrawn amount of letter of credit required to provide cash collateral | 101.00% | |||
Outstanding letters of credit | $ 31,000 | |||
9.00% Notes | ||||
LONG-TERM DEBT | ||||
Ownership percentage in each of the guarantor subsidiaries | 100.00% | |||
9.00% senior secured notes due in 2022 | ||||
LONG-TERM DEBT | ||||
Interest rate (as a percent) | 9.00% | 9.00% | ||
Notes repurchased privately | $ 10,000 | |||
5.750% notes due in 2017 | ||||
LONG-TERM DEBT | ||||
Interest rate (as a percent) | 5.75% | 5.75% | ||
Notes repurchased privately | $ 20,797 |
EMPLOYEE BENEFITS (Details)
EMPLOYEE BENEFITS (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Feb. 29, 2016USD ($) | Mar. 27, 2016USD ($)item | Mar. 29, 2015USD ($) | |
EMPLOYEE BENEFITS | |||
Number of new participants | item | 0 | ||
Retirement expense for continuing operations | |||
Net pension expense | $ 3,694 | $ 2,493 | |
Pension plan | |||
Retirement expense for continuing operations | |||
Service cost | 4,700 | 2,920 | |
Interest cost | 22,167 | 21,248 | |
Expected return on plan assets | (27,107) | (26,571) | |
Actuarial loss | 4,596 | 5,549 | |
Net pension expense | 4,356 | 3,146 | |
Value of contributions to plan | $ 47,100 | ||
Post-retirement plans | |||
Retirement expense for continuing operations | |||
Net pension expense | $ (662) | $ (653) |
EMPLOYEE BENEFITS - Contributio
EMPLOYEE BENEFITS - Contributions (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Feb. 29, 2016 | Mar. 27, 2016 | Dec. 27, 2015 | |
Medical cost trend rates | |||
Financing obligations | $ 74,829,000 | $ 32,398,000 | |
Pension plan | |||
Medical cost trend rates | |||
Value of contributions to plan | $ 47,100,000 | ||
Required pension contribution | $ 2,000,000 | ||
Term of leases entered into for property contributed to pension plan | 11 years | ||
Gain or loss recognized on the contribution of property | $ 0 | ||
Aggregate Annual Rent Payments On Contributed Property | $ 3,500,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |
Feb. 28, 2009item | Dec. 31, 2008item | Mar. 27, 2016USD ($)item | |
Letter of credit | |||
Additional disclosures | |||
Outstanding letters of credit | $ | $ 31 | ||
"Sacramento Case" | |||
Contingencies | |||
Number of carriers | 5,000 | ||
Number of phases | 3 | ||
"Fresno Case" | |||
Contingencies | |||
Number of carriers | 3,500 | ||
Number of phases | 2 |
STOCK PLANS - Activity (Details
STOCK PLANS - Activity (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 27, 2016USD ($)$ / sharesshares | |
RSUs | |
RSU's | |
Nonvested at the beginning of the period (in shares) | shares | 1,538,800 |
Granted (in shares) | shares | 1,234,200 |
Vested (in shares) | shares | (651,300) |
Forfeited (in shares) | shares | (12,400) |
Nonvested at the end of the period (in shares) | shares | 2,109,300 |
Weighted Average Grant Date Fair Value | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 2.98 |
Granted (in dollars per share) | $ / shares | 1.06 |
Vested (in dollars per share) | $ / shares | 3.09 |
Forfeited (in dollars per share) | $ / shares | 2.60 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 1.83 |
Additional disclosures | |
Total fair value | $ | $ 0.7 |
Stock options and SARs | |
Options/SARs | |
Outstanding at the beginning of the period (in shares) | shares | 3,201,250 |
Forfeited (in shares) | shares | (500) |
Expired (in shares) | shares | (78,750) |
Outstanding at the end of the period (in shares) | shares | 3,122,000 |
Weighted Average Exercise Price | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 7.35 |
Forfeited (in dollars per share) | $ / shares | 2.76 |
Expired (in dollars per share) | $ / shares | 8.56 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 7.32 |
STOCK PLANS - Stock-based compe
STOCK PLANS - Stock-based compensation (Details) $ in Thousands | 3 Months Ended | |
Mar. 27, 2016USD ($)item | Mar. 29, 2015USD ($) | |
STOCK PLANS | ||
Number of stock-based compensation plans | item | 2 | |
Stock-based compensation expense | $ | $ 1,374 | $ 1,714 |
POTENTIAL REVERSE STOCK SPLIT (
POTENTIAL REVERSE STOCK SPLIT (Details) | Feb. 16, 2016 | Mar. 27, 2016$ / shares |
Class of Stock [Line Items] | ||
Trading days | 30 days | |
Reverse stock split period | 6 months | |
Minimum | ||
Class of Stock [Line Items] | ||
Share price | $ 1 | |
Minimum | Common Class A | ||
Class of Stock [Line Items] | ||
Conversion ratio | 0.2 | |
Minimum | Common Class B | ||
Class of Stock [Line Items] | ||
Conversion ratio | 0.2 | |
Maximum | Common Class A | ||
Class of Stock [Line Items] | ||
Conversion ratio | 0.04 | |
Maximum | Common Class B | ||
Class of Stock [Line Items] | ||
Conversion ratio | 0.04 |