| PROCEEDINGS UNDER CHAPTER 11 | 12 Months Ended |
| Dec. 28, 2014 |
| Reorganizations [Abstract] | |
| PROCEEDINGS UNDER CHAPTER 11 | PROCEEDINGS UNDER CHAPTER 11 |
| Chapter 11 Reorganization—On December 8, 2008 (the “Petition Date”), TCO, and 110 of its direct and indirect wholly-owned subsidiaries (each a “Debtor” and, collectively, the “Debtors”), filed voluntary petitions for relief (collectively, the “Chapter 11 Petitions”) under Chapter 11 (“Chapter 11”) of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The Debtors’ Chapter 11 proceedings continue to be jointly administered under the caption “In re: Tribune Company, et al.,” Case No. 08-13141. Certain of the legal entities included in the consolidated and combined financial statements of Tribune Publishing were Debtors or, as a result of the restructuring transactions described below, are successor legal entities to legal entities that were Debtors (collectively, the “Tribune Publishing Debtors”). As further described below, a joint plan of reorganization for the Debtors, including the Tribune Publishing Debtors became effective and the Debtors emerged from Chapter 11 on December 31, 2012 (the “Effective Date”). Tribune Publishing and its business operations as conducted on or after December 31, 2012 are herein referred to as “Reorganized Tribune Publishing” or “Successor.” Tribune Publishing and its business operations as conducted on or prior to December 30, 2012 are herein referred to as “Predecessor.” TCO and its business operations as conducted on or after December 31, 2012 are herein referred to as “Reorganized Tribune Media.” |
| From the Petition Date and until the Effective Date, the Debtors operated their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and applicable orders of the Bankruptcy Court. |
| Plan of Reorganization—In order for a debtor to emerge from Chapter 11, a Chapter 11 plan of reorganization that satisfies the requirements of the Bankruptcy Code and provides for emergence from bankruptcy must be proposed and confirmed by a bankruptcy court. On April 12, 2012, the Debtors, the official committee of unsecured creditors (the “Creditors’ Committee”), Oaktree Capital Management, L.P. (“Oaktree”), a creditor under certain TCO prepetition debt facilities, Angelo, Gordon & Co. L.P. (“AG”), a creditor under certain TCO prepetition debt facilities, and JPMorgan Chase Bank, N.A. (“JPMorgan”), an administrative agent and a creditor under certain TCO prepetition debt facilities (collectively, the “Plan Proponents”) filed the Fourth Amended Joint Plan of Reorganization for Tribune Company and Its Subsidiaries (as subsequently amended and modified, the “Plan”) with the Bankruptcy Court. |
| The Plan was the product of extensive negotiations and contested proceedings before the Bankruptcy Court due, in part, to certain claims and causes of action related to a series of transactions, collectively referred to as the “Leveraged ESOP Transactions,” that were undertaken by TCO in 2007. These transactions resulted in TCO becoming wholly-owned by an employee stock ownership plan (the “ESOP”) on December 20, 2007. At the Debtors’ request, on September 1, 2010, the Bankruptcy Court appointed a mediator to conduct a non-binding mediation concerning the terms of a plan of reorganization, including the appropriate resolution of claims and causes of action related to the Leveraged ESOP Transactions (the “Mediation”). The Mediation began on September 26, 2010 and ultimately resulted in a settlement agreement (the “Settlement Agreement”) between the Debtors, the Creditors’ Committee, AG, Oaktree, JPMorgan and a group of funds and managed accounts represented by King Street Acquisition Company, LLC, King Street Capital, LP and Marathon Asset Management, LP that were lenders under certain TCO prepetition debt facilities. The Settlement Agreement provided for the settlement of certain causes of action arising in connection with the Leveraged ESOP Transactions, other than certain causes of action predefined as preserved. The terms of the Settlement Agreement, with certain modifications, were incorporated into the Plan filed with the Bankruptcy Court on April 12, 2012. |
| On July 23, 2012, the Bankruptcy Court issued an order (the “Confirmation Order”) confirming the Plan. The Plan constitutes a separate plan of reorganization for each of the Debtors and sets forth the terms and conditions of the Debtors’ reorganization. See “Terms of the Plan” section below for a description of the terms and conditions of the confirmed Plan as the Plan pertains to the Tribune Publishing Debtors. |
| Notices of appeal of the Confirmation Order were filed in August 2012 by certain TCO creditors. The confirmation appeals have been transmitted to the United States District Court for the District of Delaware (“Delaware District Court”) and have been consolidated, together with two previously-filed appeals of the Bankruptcy Court’s orders relating to certain provisions in the Plan. |
| The appellants seek, among other relief, to overturn the Confirmation Order and certain prior orders of the Bankruptcy Court, including the settlement of certain claims and causes of action related to the Leveraged ESOP Transactions contained in the Plan. There is currently no stay of the Confirmation Order in place pending resolution of the confirmation-related appeals. In January 2013, Reorganized Tribune Media filed a motion before the Delaware District Court to dismiss the appeals as equitably moot, based on the substantial consummation of the Plan. On June 18, 2014 the Delaware District Court entered an order granting in part and denying in part the motion to dismiss. The effect of the order was to dismiss all of the appeals, with the exception of one appeal concerning the priority in right of payment with respect to any state law fraudulent transfer claim recoveries from a Creditor Trust that was proposed to be formed under a prior version of the Plan, but was not formed under the Plan as confirmed by the Bankruptcy Court. The Delaware District Court vacated the Bankruptcy Court’s ruling to the extent it opined on that issue. On July 16, 2014, notices of appeal of the Delaware District Court’s order were filed with the U.S. Court of Appeals for the Third Circuit by Aurelius, Law Debenture, and Deutsche Bank. Briefing before the Third Circuit was completed in February 2015, and no date has been set for oral argument. |
| During the fourth quarter of 2012 and prior to the Effective Date, TCO and its subsidiaries consummated an internal restructuring, pursuant to and in accordance with the terms of the Plan. These restructuring transactions included, among other things, (i) converting certain of TCO’s subsidiaries into limited liability companies or merging certain of TCO’s subsidiaries into newly-formed limited liability companies, (ii) consolidating and reallocating certain operations, entities, assets and liabilities within the organizational structure of TCO and (iii) establishing a number of real estate holding companies. Among other things, the restructuring transactions resulted in TPC, now a wholly-owned subsidiary of the Company, being converted into a limited liability company (prior to the conversion, TPC was a corporation named Tribune Publishing Company) as well as becoming the holding company for the principal direct and indirect subsidiaries that own and operate the business of Tribune Publishing as described in Note 1. |
| On the Effective Date, all of the conditions precedent to the effectiveness of the Plan were satisfied or waived, the Debtors emerged from Chapter 11, and the settlements, agreements and transactions contemplated by the Plan to be effected on the Effective Date were implemented, including, among other things, the appointment of a new board of directors of TCO and the initiation of distributions to creditors. As a result, Reorganized Tribune Media converted from a subchapter S corporation to a C corporation under the Internal Revenue Code (“IRC”). This conversion also affected TCO subsidiaries that were treated as qualified subchapter S subsidiaries, including certain legal entities included in the accompanying consolidated and combined financial statements of Tribune Publishing. See Note 14 for further information. |
| Terms of the Plan—The following is a summary of the material settlements and other agreements entered into, distributions made and transactions consummated by Reorganized Tribune Publishing on or about the Effective Date pursuant to, and in accordance with, the terms of the Plan. The following summary only highlights certain of the substantive provisions of the Plan as it relates to Reorganized Tribune Publishing and is not intended to be a complete description of, or a substitute for a full and complete reading of, the Plan and the agreements and other documents related thereto, including those described below. |
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| • | Cancellation of certain prepetition obligations: On the Effective Date, the Tribune Publishing Debtors’ prepetition debt and certain other obligations were cancelled, terminated and/or extinguished, including (i) cancellation of the $2.8 billion promissory demand notes due to Tribune Finance LLC (“Tribune Finance”), a subsidiary of TCO, and (ii) the cancellation of guarantee obligations by certain Tribune Publishing Debtors under certain of TCO’s prepetition credit facilities (other than for purposes of allowing creditors thereunder to receive distributions under the Plan and allowing the administrative agent for such facilities to exercise certain limited rights). | | | | | | | | | | | | | | | | | |
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| • | Assumption of prepetition executory contracts and unexpired leases: On the Effective Date, any prepetition executory contracts or unexpired leases of the Tribune Publishing Debtors that were not previously assumed or rejected pursuant to Section 365 of the Bankruptcy Code or rejected pursuant to the Plan were deemed assumed by the applicable Reorganized Tribune Publishing Debtors or their successors-in-interest. | | | | | | | | | | | | | | | | | |
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| • | Distributions to TCO Creditors: On the Effective Date (or as soon as practicable thereafter),(i) holders of allowed senior loan claims against TCO and allowed senior loan guarantee claims against the subsidiary guarantors received approximately $2.9 billion in cash, approximately 98.2 million shares of Class A and Class B common stock in Reorganized Tribune Media (“New Common Stock”) and warrants to purchase New Common Stock (“New Warrants”) with an aggregate fair value determined pursuant to the Plan of approximately $4.5 billion as of the Effective Date, plus interests in a litigation trust formed pursuant to the Plan (the “Litigation Trust”), (ii) holders of allowed claims against TCO related to TCO’s prepetition $1.6 billion twelve-month bridge loan facility and allowed bridge loan facility guarantee claims against the subsidiary guarantors received a pro rata share of $64.5 million in cash (equal to approximately 3.98% of their allowed claim) plus interests in the Litigation Trust, (iii) holders of allowed general unsecured claims against the Tribune Publishing Debtors received cash in an amount equal to 100% of their allowed claim, and (iv) holders of unclassified claims, priority non-tax claims and certain other secured claims received cash in an amount equal to 100% of their allowed claim. All allowed priority tax and non-tax claims and other secured claims not paid on the Effective Date were reinstated and allowed administrative expense claims will be paid in full when due. All distributions to creditors related to the Tribune Publishing Debtors’ prepetition liabilities classified as liabilities subject to compromise were made by TCO on behalf of the Tribune Publishing Debtors pursuant to TCO’s centralized cash management system as described in Note 6. | | | | | | | | | | | | | | | | | |
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| • | Ownership Interests in the Tribune Publishing Debtors and Non-Debtor Subsidiaries: All ownership interests of TCO in the Tribune Publishing Debtors and Non-Debtor Subsidiaries, after giving effect to the restructuring transactions described earlier, were reinstated on the Effective Date. | | | | | | | | | | | | | | | | | |
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| • | Other Plan provisions: The Plan and Confirmation Order also contain various discharges, injunctive provisions and releases that became operative on the Effective Date. | | | | | | | | | | | | | | | | | |
| Since the Effective Date, Reorganized Tribune Media has substantially consummated the various transactions contemplated under the Plan, including those provisions relating to Tribune Publishing. In particular, Reorganized Tribune Media made all distributions of cash, including cash distributions made on behalf of Tribune Publishing, new common stock and new warrants that were required to be made under the terms of the Plan to creditors holding allowed claims. The prepetition claims of Tribune Publishing’s general unsecured creditors that became or become allowed subsequent to the Effective Date have been or will be paid on the next quarterly distribution date after such allowance. |
| Resolution of Outstanding Prepetition Claims—Under Section 362 of the Bankruptcy Code, the filing of a bankruptcy petition automatically stays most actions against a debtor, including most actions to collect prepetition indebtedness or to exercise control over the property of the debtor’s estate. Absent an order of the Bankruptcy Court, substantially all prepetition liabilities are subject to settlement under a plan of reorganization approved by the Bankruptcy Court. Shortly after commencing their Chapter 11 proceedings, the Debtors began notifying all known current or potential creditors of the Chapter 11 filings. |
| Liabilities Subject to Compromise—Liabilities subject to compromise are shown separately in Tribune Publishing’s Consolidated and Combined Balance Sheet at December 30, 2012 and were incurred prior to the filing of the Chapter 11 Petitions. These amounts represent Tribune Publishing’s best estimate of known or potential prepetition claims to be resolved in connection with the Debtors’ Chapter 11 cases. |
| Tribune Publishing Debtors’ liabilities subject to compromise at December 30, 2012 consisted of the following (in thousands): |
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| | Predecessor | | | | | | | | | | | | | | |
| | December 30, | | | | | | | | | | | | | | |
| 2012 | | | | | | | | | | | | | | |
| Accounts payable | | $ | 32,030 | | | | | | | | | | | | | | | |
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| Deferred compensation and benefits | | 7,400 | | | | | | | | | | | | | | | |
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| Promissory demand notes due to Tribune Affiliate (including accrued interest of $22,860) | | 2,822,860 | | | | | | | | | | | | | | | |
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| Other liabilities (1) | | 3,600 | | | | | | | | | | | | | | | |
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| Liabilities subject to compromise settled on the Effective Date | | $ | 2,865,890 | | | | | | | | | | | | | | | |
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| (1) Other liabilities primarily include amounts for non-income taxes and other accrued expenses. |
| Prior to the Petition Date, Tribune Finance issued promissory demand notes aggregating $2.8 billion to certain Tribune Publishing Debtors. As of December 30, 2012, these prepetition notes were in default due to the Chapter 11 filings. Prior to the Effective Date, any efforts to enforce these Debtors’ payment obligations pursuant to the promissory demand notes were stayed as a result of the filing of the Chapter 11 Petitions. As a result, these promissory demand notes are included in liabilities subject to compromise in Tribune Publishing’s combined balance sheets. See Note 6 for additional disclosures related to the Tribune Publishing Debtors’ obligations to Tribune Finance as of December 30, 2012. In accordance with ASC Topic 852, “Reorganizations,” following the Petition Date, Tribune Publishing ceased accruing interest expense on the promissory demand notes classified as liabilities subject to compromise. For the fiscal year ended December 30, 2012, contractual interest expense applicable to the promissory demand notes was approximately $92.0 million. Accrued interest on the promissory demand notes was also classified in liabilities subject to compromise and amounted to $22.9 million at December 30, 2012. |
| On the Effective Date, substantially all of the Debtors’ prepetition liabilities at December 30, 2012 were settled or otherwise satisfied under the Plan. However, certain other claims have been or will be settled or otherwise satisfied subsequent to the Effective Date. Although the allowed amount of certain unresolved claims has not been determined, Tribune Publishing’s liabilities subject to compromise associated with these unresolved claims were discharged upon emergence from Chapter 11 in exchange for the treatment outlined in the Plan. For information regarding the discharge of liabilities subject to compromise, see the “Terms of the Plan” section above. |
| Reorganization Items, Net—Reorganization items, net, generally includes provisions and adjustments to reflect the carrying value of certain prepetition liabilities at their estimated allowable claim amounts and, pursuant to ASC Topic 852, “Reorganizations,” is reported separately in Tribune Publishing’s Consolidated and Combined Statements of Income. Reorganization items, net may also include professional advisory fees and other costs directly associated with the Debtors’ Chapter 11 cases; however, all professional advisory fees that were paid by TCO and other non-debtor TCO affiliates that related to all Debtors have not been allocated to Tribune Publishing as professional advisory fees are TCO reorganization expenses and do not specifically relate to the operations of Tribune Publishing. |
| Specifically identifiable reorganization provisions, adjustments and other costs directly related to Tribune Publishing have been included in the Successor’s Consolidated and Combined Statements of Income for the years ended December 28, 2014 and December 29, 2013 and in the Predecessor’s Consolidated and Combined Statements of Income for December 31, 2012 and the year ended December 30, 2012 and consisted of the following (in thousands): |
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| | Successor | | | Predecessor | |
| | Year Ended | | | | | Year Ended | |
| | December 28, 2014 | | December 29, 2013 | | | December 31, 2012 | | December 30, 2012 | |
| Reorganization costs, net: | | | | | | | | | | |
| Contract rejections and claim settlements | | $ | (214 | ) | | $ | 111 | | | | $ | — | | | $ | (978 | ) | |
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| Other, net | | (250 | ) | | (381 | ) | | | — | | | (468 | ) | |
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| Total reorganization costs, net | | (464 | ) | | (270 | ) | | | — | | | (1,446 | ) | |
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| Reorganization adjustments, net | | — | | | — | | | | 2,862,039 | | | — | | |
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| Fresh-start reporting adjustments, net | | — | | | — | | | | (107,486 | ) | | — | | |
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| Total reorganization items, net | | $ | (464 | ) | | $ | (270 | ) | | | $ | 2,754,553 | | | $ | (1,446 | ) | |
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| In the third quarter of 2012, the Plan was confirmed which, among other things, resulted in the allowance of, or adjustments to, certain claims that were otherwise contingent upon the confirmation of the Plan. As a result, contract rejections and claim settlements in 2012 included losses to adjust certain employee-related claims pursuant to a settlement agreement. These losses were partially offset by net favorable adjustments to adjust other liabilities to the amount of the allowed claim. |
| The Predecessor’s combined statement of income for December 31, 2012 included other reorganization items totaling $2.755 billion before taxes ($2.842 billion after taxes) arising from reorganization and fresh-start reporting adjustments. Reorganization adjustments, which were recorded to reflect the settlement of prepetition liabilities and changes in the Predecessor’s capital structure arising from the implementation of the Plan, resulted in a net reorganization gain of $2.862 billion before taxes ($2.894 billion after taxes). Fresh-start reporting adjustments, which were recorded as a result of the adoption of fresh-start reporting as of the Effective Date in accordance with ASC Topic 852, resulted in a net loss of $107.5 million before taxes ($52.1 million after taxes). The net gain resulted primarily from adjusting the Predecessor’s net carrying values for certain assets and liabilities to their fair values in accordance with ASC Topic 805, “Business Combinations,” recording related adjustments to deferred income taxes and eliminating the Predecessor’s accumulated other comprehensive income (loss) as of the Effective Date. See Note 3 for additional information on reorganization items. |
| Tribune Publishing may incur certain expenses pertaining to the Chapter 11 proceedings in future periods. These expenses will include primarily other costs related to the implementation of the Plan and the resolution of unresolved claims. |
| FRESH-START REPORTING |
| Reorganized Tribune Media adopted fresh-start reporting on the Effective Date in accordance with ASC Topic 852, “Reorganizations.” All conditions required for the adoption of fresh-start reporting were satisfied by Reorganized Tribune Media on the Effective Date. As a result, Tribune Publishing also adopted fresh-start reporting on the Effective Date. |
| The adoption of fresh-start reporting by Reorganized Tribune Publishing resulted in a new reporting entity for financial reporting purposes reflecting the Successor’s capital structure as of the Effective Date. Any presentation of Reorganized Tribune Publishing’s consolidated and combined financial statements as of and for periods subsequent to the Effective Date represents the financial position, results of operations and cash flows of a new reporting entity and will not be comparable to any presentation of the Predecessor’s consolidated and combined financial statements as of and for periods prior to the Effective Date, and the adoption of fresh-start reporting. The accompanying consolidated and combined financial statements as of and for the year ended December 30, 2012 have not been adjusted to reflect any changes in the Predecessor’s capital structure as a result of the Plan nor have they been adjusted to reflect any changes in the fair value of assets and liabilities as a result of the adoption of fresh-start reporting. |
| In accordance with ASC Topic 852, the Predecessor’s Consolidated and Combined Statement of Income for December 31, 2012 includes only (i) reorganization adjustments which resulted in a net gain of $2.862 billion before taxes ($2.894 billion after taxes) and (ii) fresh-start reporting adjustments which resulted in a net loss of $107.5 million before taxes ($52.1 million after taxes). These adjustments are further summarized and described below. The Predecessor’s consolidated and combined statements of income and cash flows for December 31, 2012 exclude the results of operations and cash flows arising from the Predecessor’s business operations on December 31, 2012. Because the Predecessor’s December 31, 2012 results of operations and cash flows were not material, Tribune Publishing has elected to report them as part of Reorganized Tribune Publishing’s results of operations and cash flows for the fiscal year ended December 29, 2013. |
| Enterprise Value/Reorganization Value—ASC Topic 852 requires, among other things, a determination of the reorganization value for Reorganized Tribune Media and allocation of such reorganization value to the fair value of Reorganized Tribune Media’s tangible assets, finite-lived intangible assets and indefinite-lived intangible assets in accordance with the provisions of ASC Topic 805, “Business Combinations,” as of the Effective Date. The reorganization value for Reorganized Tribune Media represents the amount of resources available, or that become available, for the satisfaction of postpetition liabilities and allowed prepetition claims, as negotiated between the Debtors and their creditors. This value is viewed as the fair value of Reorganized Tribune Media before considering liabilities and is intended to approximate the amount a willing buyer would pay for the assets of Reorganized Tribune Media immediately after emergence from bankruptcy. In connection with the Debtors’ Chapter 11 cases, the Debtors’ financial advisor undertook a valuation analysis to determine the value available for distribution to holders of allowed prepetition claims. Based on current and anticipated economic conditions as of the Effective Date and the direct impact of these conditions on Reorganized Tribune Media’s business, this analysis estimated a range of distributable value from the Debtors’ estates from $6.917 billion to $7.826 billion with an approximate mid-point of $7.372 billion. The confirmed Plan contemplates a distributable value for Reorganized Tribune Media of $7.372 billion. The distributable value implies an equity value for Reorganized Tribune Media of $4.536 billion after reducing the distributable value for cash distributed (or to be distributed) pursuant to the Plan and $1.1 billion of new debt undertaken by Reorganized Tribune Media. |
| In accordance with the provisions of ASC Topic 805, the reorganization value of Reorganized Tribune Media was allocated, in part, to the fair value of Reorganized Tribune Publishing’s tangible assets, finite-lived intangible assets, and indefinite-lived intangible assets as of the Effective Date. |
| Methodology, Analysis and Assumptions—The comparable company valuation analysis methodology estimates the enterprise value of a company based on a relative comparison with publicly traded companies with similar operating and financial characteristics to the subject company. Under this methodology, TCO’s financial advisor determined a range of multiples of revenues and earnings before interest, taxes, depreciation and amortization (“EBITDA”) to calculate the enterprise values of TCO’s publishing and broadcasting segments. The discounted cash flow (“DCF”) analysis is a forward-looking enterprise valuation methodology that estimates the value of an asset or business by calculating the expected future cash flows to be generated by that asset or business. Under this methodology, projected future cash flows are discounted by the enterprise’s weighted average cost of capital (“WACC”). The WACC reflects the estimated blended rate of return that would be required by debt and equity investors to invest in the enterprise based on its capital structure. Utilizing the DCF analysis, the enterprise values of TCO’s publishing and broadcasting segments were determined by calculating the present value of the projected unlevered after-tax free cash flows through 2015 plus an estimate for the value of each segment for the period beyond 2015 known as the terminal value. The terminal value was derived by either applying a multiple to the projected EBITDA for the final year of the projection period (2015) or capitalizing the projected unlevered after-tax free cash flow in the same projection period using the WACC and an assumed perpetual growth rate, discounted back to the valuation date using the WACC, as appropriate. The precedent transactions valuation methodology is based on the enterprise values of companies involved in public merger and acquisition transactions that have operating and financial characteristics similar to the subject company. Under this methodology, the enterprise value is determined by an analysis of the consideration paid and the debt assumed in the identified merger and acquisition transactions and is usually expressed as a multiple of revenues or EBITDA. Utilizing this analysis, TCO’s financial advisor determined a range of multiples of EBITDA for the trailing 12 months from the measurement date to calculate the enterprise value for TCO’s broadcasting segment. The precedent transactions valuation methodology was not used for TCO’s publishing segment due to the lack of relevant transactions. |
| TCO’s financial advisor applied a weighted average of the above enterprise valuation methodologies to calculate the estimated ranges of enterprise values for TCO’s publishing and broadcasting segments. The relative weighting of each valuation methodology was based on the amount of publicly available information to determine the inputs used in the calculations. In addition, TCO’s financial advisor utilized a combination of these enterprise valuation methodologies, primarily the comparable company valuation analysis methodology, to calculate the estimated ranges of fair values of TCO’s equity investments. The ranges of enterprise values for TCO’s publishing and broadcasting segments and estimated fair values of TCO’s equity investments were added to the estimated cash on hand as of the measurement date to determine the estimated range of distributable value noted above. |
| Fresh-Start Combined Balance Sheet—The table below summarizes the Predecessor’s December 30, 2012 combined balance sheet, the reorganization and fresh-start reporting adjustments that were made to that balance sheet as of December 31, 2012, and the resulting Successor’s Consolidated and Combined Balance Sheet as of December 31, 2012. |
| Combined Balance Sheets at December 30, 2012 and December 31, 2012 |
| (In thousands) |
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| | Predecessor | | | | | | | | Successor |
| | December 30, | | Reorganization | | | Fresh-Start | | | December 31, |
| 2012 | Adjustments | Adjustments | 2012 |
| Assets | | | | | | | | | | |
| Current assets | | | | | | | | | | |
| Cash | | $ | 13,768 | | | $ | — | | | | $ | — | | | | $ | 13,768 | |
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| Accounts receivable, net | | 256,985 | | | — | | | | — | | | | 256,985 | |
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| Inventories | | 12,537 | | | — | | | | 5,810 | | -4 | | 18,347 | |
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| Deferred income taxes | | 1,147 | | | 42,228 | | (1)(2) | | (2,272 | ) | -4 | | 41,103 | |
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| Prepaid expenses and other | | 14,733 | | | — | | | | (18 | ) | -4 | | 14,715 | |
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| Total current assets | | 299,170 | | | 42,228 | | | | 3,520 | | | | 344,918 | |
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| Properties | | | | | | | | | | |
| Property, plant and equipment | | 1,938,208 | | | — | | | | (1,527,106 | ) | -4 | | 411,102 | |
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| Accumulated depreciation | | (1,322,830 | ) | | — | | | | 1,322,830 | | -4 | | — | |
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| Net properties | | 615,378 | | | — | | | | (204,276 | ) | | | 411,102 | |
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| Other assets | | | | | | | | | | |
| Goodwill | | — | | | — | | | | 15,331 | | -4 | | 15,331 | |
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| Other intangible assets, net | | 28,911 | | | — | | | | 37,976 | | -4 | | 66,887 | |
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| Investments | | 3,986 | | | — | | | | — | | | | 3,986 | |
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| Deferred income taxes | | — | | | — | | | | 54,188 | | -4 | | 54,188 | |
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| Other | | 3,787 | | | — | | | | (2,402 | ) | -4 | | 1,385 | |
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| Total other assets | | 36,684 | | | — | | | | 105,093 | | | | 141,777 | |
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| Total assets | | $ | 951,232 | | | $ | 42,228 | | | | $ | (95,663 | ) | | | $ | 897,797 | |
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| Liabilities and Stockholders' Equity (Deficit) | | | | | | | | | | |
| Current liabilities | | | | | | | | | | |
| Accounts payable | | $ | 37,710 | | | $ | 2,528 | | (1)(3) | | $ | — | | -4 | | $ | 40,238 | |
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| Employee compensation and benefits | | 103,077 | | | 322 | | (1)(3) | | — | | | | 103,399 | |
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| Deferred revenue | | 66,835 | | | — | | | | (171 | ) | -4 | | 66,664 | |
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| Other current liabilities | | 26,359 | | | (879 | ) | (1)(3) | | — | | | | 25,480 | |
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| Total current liabilities | | 233,981 | | | 1,971 | | | | (171 | ) | | | 235,781 | |
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| Other non-current liabilities | | 66,300 | | | 11,679 | | (1)(2)(3) | | (16,192 | ) | -4 | | 61,787 | |
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| Liabilities subject to compromise | | 2,865,890 | | | (2,865,890 | ) | (1)(3) | | — | | | | — | |
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| Equity (deficit) | | (2,214,939 | ) | | 2,894,468 | | -1 | | (79,300 | ) | -4 | | 600,229 | |
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| Total liabilities and equity (deficit) | | $ | 951,232 | | | $ | 42,228 | | | | $ | (95,663 | ) | | | $ | 897,797 | |
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| (1) | Reflects adjustments arising from implementation of the Plan, including the gain on the settlement of prepetition liabilities, distributions of cash by TCO on behalf of Reorganized Tribune Publishing and the elimination of Tribune Publishing’s equity (deficit). These adjustments also include the establishment of Reorganized Tribune Publishing’s equity based on the reorganization value of Reorganized Tribune Media allocated to the fair value of Reorganized Tribune Publishing’s tangible assets, finite-lived intangible assets and indefinite-lived intangible assets as of the Effective Date. The changes in the Predecessor’s capital structure arising from the implementation of the Plan is comprised of the following adjustments (in thousands): | | | | | | | | | | | | | | | | | |
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| Liabilities subject to compromise on the Effective Date | | $ | 2,865,890 | | | | | | | | | | | | | | | |
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| Less: Liabilities assumed and reinstated on the Effective Date | | (2,909 | ) | | | | | | | | | | | | | | |
| Less: Liabilities for prepetition claims to be settled subsequent to the Effective Date and other adjustments | | (5,472 | ) | | | | | | | | | | | | | | |
| Liabilities subject to compromise settled on the Effective Date | | $ | 2,857,509 | | | | | | | | | | | | | | | |
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| Forgiveness of prepetition promissory notes held by parent | | $ | 2,822,860 | | | | | | | | | | | | | | | |
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| Cash distributions on settled claims paid by parent | | 34,649 | | | | | | | | | | | | | | | |
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| Gain on settlement of liabilities subject to compromise | | 2,857,509 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Plus: Other reorganization adjustments, net | | 4,530 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Total reorganization adjustments before taxes | | 2,862,039 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Plus: Income tax benefit on reorganization adjustments | | 32,429 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Net reorganization gain after taxes | | $ | 2,894,468 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| -2 | Reflects the conversion of Reorganized Tribune Media, including its qualified subchapter S subsidiaries, from a subchapter S corporation to a C corporation under the IRC. | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| -3 | Reflects the reclassification of certain liabilities from liabilities subject to compromise upon the assumption of certain executory contracts and unexpired leases. | | | | | | | | | | | | | | | | | |
| (4) The Predecessor’s Consolidated and Combined Statement of Income for December 31, 2012 includes certain adjustments recorded as a result of the adoption of fresh-start reporting in accordance with ASC Topic 852, “Reorganizations,” as of the Effective Date. These fresh-start reporting adjustments resulted in a net pretax loss which primarily resulted from adjusting the Predecessor’s recorded values for certain assets and liabilities to fair values in accordance with ASC Topic 805, “Business Combinations,” and recording related adjustments to deferred income taxes. The fresh-start reporting adjustments included in the Predecessor’s Consolidated and Combined Statement of Income for December 31, 2012 consisted of the following items (in thousands): |
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| Fair value adjustments to net properties | | $ | (204,276 | ) | | | | | | | | | | | | | | |
| Fair value adjustments to intangibles | | 37,431 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Establish Successor’s goodwill | | 15,331 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Elimination of accumulated other comprehensive income | | 33,598 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Other fair value adjustments, net | | 10,430 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Loss from fresh-start reporting adjustments before taxes | | (107,486 | ) | | | | | | | | | | | | | | |
| Income tax benefit attributable to fair value adjustments | | 55,344 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Net loss from fresh-start reporting adjustments after taxes | | $ | (52,142 | ) | | | | | | | | | | | | | | |
| Property, Plant and Equipment—Property, plant and equipment was adjusted to a fair value aggregating $411.1 million as of the Effective Date. The fair values of property, plant and equipment were based primarily on valuations obtained from third party valuation specialists principally utilizing the cost and market valuation approaches. |
| Fresh-start reporting adjustments included the elimination of the Predecessor’s aggregate accumulated depreciation balance as of December 30, 2012. |
| Identifiable Intangible Assets—The following intangible assets were identified by Reorganized Tribune Publishing and recorded at fair value based on valuations obtained from third party valuation specialists: newspaper mastheads, advertiser relationships, customer relationships, affiliate agreements and other contracts and agreements, including real property leases. The cost, income and market valuation approaches were utilized, as appropriate, to estimate the fair values of these intangible assets. The determination of the fair values of these identifiable intangible assets resulted in a $38.0 million net increase in other intangible assets in the Successor’s Consolidated and Combined Balance Sheet at December 31, 2012. |
