Document and Entity Information
Document and Entity Information | 9 Months Ended |
Mar. 31, 2016shares | |
Document Information [Line Items] | |
Entity Registrant Name | MEREDITH CORP |
Entity Central Index Key | 65,011 |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2016 |
Amendment Flag | false |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q3 |
Current Fiscal Year End Date | --06-30 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Company Common Stock [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 37,620,293 |
Class B Shares [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 6,934,098 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Jun. 30, 2015 |
Current assets | ||
Cash and cash equivalents | $ 17,249 | $ 22,833 |
Accounts receivable, net | 281,317 | 284,646 |
Inventories | 23,954 | 24,681 |
Current portion of subscription acquisition costs | 132,444 | 122,350 |
Current portion of broadcast rights | 7,872 | 4,516 |
Other current assets | 25,762 | 23,505 |
Total current assets | 488,598 | 482,531 |
Property, plant, and equipment | 526,611 | 527,622 |
Less accumulated depreciation | (331,298) | (313,886) |
Net property, plant, and equipment | 195,313 | 213,736 |
Subscription acquisition costs | 99,116 | 103,842 |
Broadcast rights | 4,922 | 1,795 |
Other assets | 78,092 | 67,750 |
Intangible assets, net | 957,779 | 972,382 |
Goodwill | 1,000,078 | 1,001,246 |
Total assets | 2,823,898 | 2,843,282 |
Current liabilities | ||
Current portion of long-term debt | 71,875 | 62,500 |
Current portion of long-term broadcast rights payable | 8,275 | 4,776 |
Accounts payable | 71,202 | 93,944 |
Accrued expenses and other liabilities | 152,052 | 163,655 |
Current portion of unearned subscription revenues | 206,215 | 206,126 |
Total current liabilities | 509,619 | 531,001 |
Long-term debt | 631,250 | 732,500 |
Long-term broadcast rights payable | 6,039 | 2,998 |
Unearned subscription revenues | 138,741 | 151,221 |
Deferred income taxes | 358,741 | 311,645 |
Other noncurrent liabilities | 162,118 | 162,067 |
Total liabilities | 1,806,508 | 1,891,432 |
Shareholders' equity | ||
Additional paid-in capital | 56,510 | 49,019 |
Retained earnings | 931,576 | 870,859 |
Accumulated other comprehensive loss | (15,250) | (12,648) |
Total shareholders' equity | 1,017,390 | 951,850 |
Total liabilities and shareholders' equity | 2,823,898 | 2,843,282 |
Series Preferred Stock [Member] | ||
Shareholders' equity | ||
Series preferred stock | 0 | 0 |
Common Stock [Member] | ||
Shareholders' equity | ||
Common stock | 37,620 | 37,657 |
Common Class B [Member] | ||
Shareholders' equity | ||
Common stock | $ 6,934 | $ 6,963 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues | ||||
Advertising | $ 222,402 | $ 206,010 | $ 682,643 | $ 665,463 |
Circulation | 96,619 | 96,037 | 235,145 | 221,390 |
All other | 103,750 | 96,132 | 296,062 | 281,415 |
Total revenues | 422,771 | 398,179 | 1,213,850 | 1,168,268 |
Operating expenses | ||||
Production, distribution, and editorial | 156,739 | 154,448 | 460,982 | 436,618 |
Selling, general, and administrative | 183,045 | 182,015 | 534,567 | 521,143 |
Depreciation and amortization | 14,613 | 14,610 | 44,679 | 41,687 |
Merger termination fee net of merger-related costs | (59,664) | 0 | (43,541) | 0 |
Total operating expenses | 294,733 | 351,073 | 996,687 | 999,448 |
Income from operations | 128,038 | 47,106 | 217,163 | 168,820 |
Interest expense, net | (5,104) | (5,179) | (15,682) | (14,206) |
Earnings before income taxes | 122,934 | 41,927 | 201,481 | 154,614 |
Income taxes | (42,030) | (16,671) | (77,029) | (60,402) |
Net earnings | $ 80,904 | $ 25,256 | $ 124,452 | $ 94,212 |
Basic earnings per share | ||||
Basic earnings per share (in usd per share) | $ 1.81 | $ 0.57 | $ 2.79 | $ 2.12 |
Basic average shares outstanding (in shares) | 44,617 | 44,549 | 44,623 | 44,497 |
Diluted earnings per share | ||||
Diluted earnings per share (in usd per share) | $ 1.79 | $ 0.56 | $ 2.74 | $ 2.08 |
Diluted average shares outstanding (in shares) | 45,298 | 45,387 | 45,344 | 45,289 |
Dividends paid per share (in usd per share) | $ 0.495 | $ 0.4575 | $ 1.41 | $ 1.3225 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Comprehensive income | ||||
Net earnings | $ 80,904 | $ 25,256 | $ 124,452 | $ 94,212 |
Other comprehensive income, net of income taxes | ||||
Pension and other postretirement benefit plans activity | (2) | 42 | (5) | 126 |
Unrealized loss on interest rate swaps | (2,551) | (1,753) | (2,597) | (2,252) |
Other comprehensive loss, net of income taxes | (2,553) | (1,711) | (2,602) | (2,126) |
Comprehensive income | $ 78,351 | $ 23,545 | $ 121,850 | $ 92,086 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Shareholders' Equity - 9 months ended Mar. 31, 2016 - USD ($) $ in Thousands | Total | Common Stock [Member] | Common Class B [Member] | Common Stock [Member]Common Stock [Member] | Common Stock [Member]Common Class B [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Retained Earnings [Member]Common Stock [Member] | Retained Earnings [Member]Common Class B [Member] | Accumulated Other Comprehensive Loss [Member] |
Beginning balance at Jun. 30, 2015 | $ 951,850 | $ 37,657 | $ 6,963 | $ 49,019 | $ 870,859 | $ (12,648) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net earnings | 124,452 | 124,452 | ||||||||
Other comprehensive loss, net of income taxes | (2,602) | (2,602) | ||||||||
Shares issued under incentive plans, net of forfeitures | 8,253 | 236 | 8,017 | |||||||
Purchases of Company stock | (13,390) | (302) | (13,088) | |||||||
Share-based compensation | 10,803 | 10,803 | ||||||||
Conversion of Class B to common stock | 0 | (29) | (29) | |||||||
Dividends paid | $ (53,947) | $ (9,788) | $ (53,947) | $ (9,788) | ||||||
Tax benefit from share-based awards | 1,759 | 1,759 | ||||||||
Ending balance at Mar. 31, 2016 | $ 1,017,390 | $ 37,620 | $ 6,934 | $ 56,510 | $ 931,576 | $ (15,250) |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Shareholders' Equity (Parentheticals) - Common Stock [Member] - $ / shares | Mar. 31, 2016 | Jun. 30, 2015 |
Common Stock [Member] | ||
Common stock, par value (in usd per share) | $ 1 | $ 1 |
Common Class B [Member] | ||
Common stock, par value (in usd per share) | $ 1 | $ 1 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities | ||
Net earnings | $ 124,452 | $ 94,212 |
Adjustments to reconcile net earnings to net cash provided by operating activities | ||
Depreciation | 29,986 | 28,593 |
Amortization | 14,693 | 11,835 |
Share-based compensation | 10,803 | 10,907 |
Deferred income taxes | 23,228 | 24,185 |
Amortization of broadcast rights | 12,596 | 12,396 |
Payments for broadcast rights | (12,593) | (11,761) |
Provision for write-down of impaired assets | 535 | 3,142 |
Fair value adjustments to contingent consideration | (1,505) | (600) |
Excess tax benefits from share-based payments | (2,303) | (6,790) |
Changes in assets and liabilities | (26,272) | (42,824) |
Net cash provided by operating activities | 173,620 | 123,295 |
Cash flows from investing activities | ||
Acquisitions of and investments in businesses, net of cash acquired | (8,186) | (254,965) |
Additions to property, plant, and equipment | (13,385) | (19,997) |
Proceeds from disposition of assets | 1,767 | 83,434 |
Net cash used in investing activities | (19,804) | (191,528) |
Cash flows from financing activities | ||
Proceeds from issuance of long-term debt | 167,500 | 420,000 |
Repayments of long-term debt | (259,375) | (309,375) |
Dividends paid | (63,735) | (59,390) |
Purchases of Company stock | (13,390) | (41,957) |
Proceeds from common stock issued | 8,253 | 35,472 |
Excess tax benefits from share-based payments | 2,303 | 6,790 |
Other | (956) | (236) |
Net cash provided by (used in) financing activities | (159,400) | 51,304 |
Net decrease in cash and cash equivalents | (5,584) | (16,929) |
Cash and cash equivalents, at beginning of period | 22,833 | 36,587 |
Cash and cash equivalents, at end of period | $ 17,249 | $ 19,658 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation —The condensed consolidated financial statements include the accounts of Meredith Corporation and its wholly owned subsidiaries (Meredith or the Company), after eliminating all significant intercompany balances and transactions. Meredith does not have any off-balance sheet arrangements. The Company's use of special-purpose entities is limited to Meredith Funding Corporation, whose activities are fully consolidated in Meredith's condensed consolidated financial statements. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (GAAP) for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements, which are included in Meredith's Annual Report on Form 10‑K for the year ended June 30, 2015 , filed with the SEC. The condensed consolidated financial statements as of March 31, 2016 , and for the three and nine months ended March 31, 2016 and 2015 , are unaudited but, in management's opinion, include all normal, recurring adjustments necessary for a fair presentation of the results of interim periods. The year-end condensed consolidated balance sheet data as of June 30, 2015 , were derived from audited financial statements, but do not include all disclosures required by GAAP. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year. Reclassifications —Certain fiscal 2016 prior quarters' amounts related to merger expenses have been reclassified to conform to the current quarter's presentation. Adopted Accounting Pronouncements —In September 2015, the Financial Accounting Standards Board (FASB) issued guidance simplifying the accounting for measurement-period adjustments related to business combinations. The new guidance removes the requirement to restate prior periods to reflect adjustments made to provisional amounts. Rather, adjustments to the provisional amounts are to be recognized in the reporting period they are identified. In the period of adjustment, the portion that would have been recorded in a previous reporting period is to be presented separately on the face of the income statement or disclosed in the notes. Prospective adoption of the guidance is effective for fiscal years beginning after December 15, 2015, with early adoption permitted. The Company prospectively adopted this guidance in the first quarter of fiscal 2016. The adoption of this guidance did not have a material impact on our results of operations or cash flows. In November 2015, the FASB issued guidance simplifying the presentation of deferred tax assets and deferred tax liabilities. The new guidance no longer requires the presentation of current deferred tax assets and deferred tax liabilities on a classified balance sheet, rather requiring all to be presented as noncurrent. The guidance is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company prospectively adopted this guidance in the second quarter of fiscal 2016. As required by the guidance, all deferred tax assets and liabilities are classified as non-current in our condensed consolidated balance sheet as of March 31, 2016, which is a change from our historical presentation whereby certain of our deferred tax assets and liabilities were classified as current and the remainder were classified as non-current. The June 30, 2015, balance sheet has not been retrospectively adjusted. The adoption of this guidance did not have an impact on our results of operations or cash flows. Recently Issued Accounting Pronouncements —In January 2016, the FASB issued guidance to improve and simplify accounting for financial instruments. The updated guidance includes several provisions that are not applicable to the Company's consolidated financial statements, with the exception of changes to fair value disclosure. Under the new guidance, public entities are no longer required to disclose the methods and significant assumptions used to estimate fair value of financial instruments measured at amortized cost on the consolidated balance sheets. It also requires public entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The guidance is effective for the Company in the first quarter of fiscal 2019. The adoption of this guidance requires a change in our disclosures only and it is not expected to have impact on our results of operations or cash flows. In February 2016, the FASB issued its final lease accounting standard which requires lessees to recognize on the balance sheet a right-of use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. Treatment of lease payments in the statement of earnings and statement of cash flows is relatively unchanged from previous guidance. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The standard is effective for the Company beginning July 1, 2019, with early application permitted. The Company is currently evaluating the effect the guidance will have on our consolidated financial statements. In March 2016, the FASB issued guidance simplifying the transition to the equity method of accounting. The new guidance eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. The new guidance is effective for the Company during the first quarter of fiscal 2018. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements. In March 2016, the FASB issued an amendment to the previously issued but not yet adopted revenue recognition standard. In this amendment, the FASB clarified guidance on when a party to a transaction should be considered a principal, recording revenue on a gross basis, or an agent, recording revenue on a net basis. The amendment becomes effective with the new revenue recognition standard in the Company's first fiscal quarter of fiscal 2019. The Company is evaluating the impact the guidance will have on our results of operations and financial position. In March 2016, as a part of its simplification initiative, the FASB issued guidance on the accounting for employee share-based payments. The new guidance is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax treatment, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective in the Company's first quarter of fiscal 2018. Early application is permitted. The Company is currently evaluating the impact the guidance will have on our consolidated financial statements. |
Merger Termination (Notes)
Merger Termination (Notes) | 9 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Merger Termination | In January 2016, the Company and Media General, Inc. (Media General) terminated their merger agreement under which the companies would have combined to form Meredith Media General. In exchange for terminating the merger agreement, the Company received $60.0 million in cash and an opportunity to negotiate for the purchase of certain broadcast and digital assets owned by Media General. The $60.0 million has been included as a credit in the Merger termination fee net of merger-related costs line in the Condensed Consolidated Statements of Earnings. The Company incurred $12.7 million of investment banking, legal, accounting, and other professional fees and expenses in the first quarter of fiscal 2016, $3.5 million in the second quarter, and $0.3 million in the third quarter related to the terminated merger. These costs are included in the Merger termination fee net of merger-related costs line in the Condensed Consolidated Statements of Earnings. Prior to the termination of the merger agreement, certain of the merger-related expenses were limited in their tax deductibility. In conjunction with the termination of the merger agreement, certain of these merger-related expenses became deductible for income tax purposes and thus the Company recognized a corresponding tax benefit of $4.7 million in the Company's third fiscal quarter. This benefit is included in the income taxes line in the Condensed Consolidated Statements of Earnings. |
Acquisitions
Acquisitions | 9 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions On October 31, 2014, Meredith acquired WGGB, the ABC affiliate in Springfield, Massachusetts. On December 19, 2014, Meredith acquired WALA, the FOX affiliate in Mobile, Alabama-Pensacola, Florida. Effective November 1, 2014, Meredith completed its acquisition of Martha Stewart Living magazine and its related digital assets (collectively Martha Stewart Living Media Properties). In addition, Meredith entered into a 10 ‑year licensing arrangement with Martha Stewart Living Omnimedia (MSLO) for the licensing of the Martha Stewart Living trade name. The acquired business operations include sales and marketing, circulation, production, and other non-editorial functions. Under this agreement, Meredith sourced editorial content from MSLO. During the second quarter of fiscal 2016, the provisional amount recorded to goodwill was increased $0.3 million . On December 22, 2015, Meredith entered into a new 10 -year licensing arrangement with Sequential Brands Group, Inc. (the successor of MSLO), which replaced the prior agreement. Under the new agreement, Meredith also acquired the editorial teams for the Martha Stewart Living and Martha Stewart Weddings media brands and related digital properties. In conjunction with this new agreement, Meredith recognized $1.6 million of goodwill. On November 13, 2014, Meredith acquired 100 percent of the membership interests in MyWedding, LLC (Mywedding). Mywedding operates mywedding.com, one of the top wedding websites in the U.S., providing couples with a complete wedding planning product suite. On December 30, 2014, Meredith acquired 100 percent of the outstanding stock of Selectable Media, Inc. (Selectable Media), a leading native and engagement-based digital advertising company. During the first quarter of fiscal 2016, the provisional amounts recorded to goodwill were decreased $2.9 million with a corresponding increase to deferred income taxes based on an updated valuation report and other fair value determinations. Effective February 1, 2015, Meredith completed its acquisition of Shape magazine and related digital assets (collectively Shape). Shape is the women's active lifestyle category leader with content focusing on exercise, beauty, nutrition, health, fashion, wellness, and other lifestyle topics to help women lead a healthier, active lifestyle. On June 19, 2015, Meredith completed the acquisition of Qponix, a leading shopper marketing data platform technology. The results of these acquisitions have been included in the Company's consolidated operating results since their respective acquisition dates. During the first nine months of fiscal 2016, the Company finalized the determination of the fair values of the assets acquired and the liabilities assumed for the acquisitions of WGGB, WALA, the Martha Stewart Living Media Properties, Mywedding, Selectable Media, and Shape. The purchase price allocations for the Qponix acquisition and the agreement with Sequential Brands Group, Inc. are considered preliminary and are subject to revisions when the valuations of intangible assets are finalized. Therefore, the provisional measurements of fixed assets, intangible assets, goodwill, and deferred income tax balances are subject to change. |
Inventories
Inventories | 9 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Major components of inventories are summarized below. Of total net inventory values shown, 54 percent are under the last-in first-out (LIFO) method at March 31, 2016 , and 52 percent at June 30, 2015 . (In thousands) March 31, 2016 June 30, Raw materials $ 9,177 $ 13,900 Work in process 16,776 12,053 Finished goods 1,701 2,428 27,654 28,381 Reserve for LIFO cost valuation (3,700 ) (3,700 ) Inventories $ 23,954 $ 24,681 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible assets consist of the following: March 31, 2016 June 30, 2015 (In thousands) Gross Accumulated Net Gross Accumulated Net Intangible assets subject to amortization National media Advertiser relationships $ 18,610 $ (9,290 ) $ 9,320 $ 20,879 $ (7,660 ) $ 13,219 Customer lists 5,230 (3,922 ) 1,308 9,120 (6,679 ) 2,441 Other 19,425 (8,094 ) 11,331 20,675 (7,361 ) 13,314 Local media Network affiliation agreements 229,309 (134,182 ) 95,127 229,309 (129,362 ) 99,947 Retransmission agreements 21,229 (6,108 ) 15,121 21,229 (3,454 ) 17,775 Other 1,214 (242 ) 972 1,212 (126 ) 1,086 Total $ 295,017 $ (161,838 ) 133,179 $ 302,424 $ (154,642 ) 147,782 Intangible assets not subject to amortization National media Internet domain names 7,827 7,827 Trademarks 192,089 192,089 Local media FCC licenses 624,684 624,684 Total 824,600 824,600 Intangible assets, net $ 957,779 $ 972,382 Amortization expense was $14.7 million and $11.8 million for the nine months ended March 31, 2016 and 2015 , respectively. Annual amortization expense for intangible assets is expected to be as follows: $19.6 million in fiscal 2016 , $18.0 million in fiscal 2017 , $15.0 million in fiscal 2018 , $12.5 million in fiscal 2019 , and $11.6 million in fiscal 2020 . Changes in the carrying amount of goodwill were as follows: Nine months ended March 31, 2016 2015 (In thousands) National Local Total National Local Total Balance at beginning of period $ 932,471 $ 68,775 $ 1,001,246 $ 789,038 $ 51,823 $ 840,861 Acquisitions and adjustments (1,168 ) — (1,168 ) 179,424 17,606 197,030 Balance at end of period $ 931,303 $ 68,775 $ 1,000,078 $ 968,462 $ 69,429 $ 1,037,891 |
Restructuring Accrual
Restructuring Accrual | 9 Months Ended |
Mar. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Accrual | Restructuring Accrual During the first quarter of fiscal 2016, management committed to a performance improvement plan that included selected workforce reductions. In connection with this plan, the Company recorded pre-tax restructuring charges totaling $3.4 million for severance and related benefit costs related to the involuntary termination of employees. The majority of severance costs are being paid out over a twelve -month period. The plan affected approximately 45 employees. The Company also recorded $1.1 million in reversals of excess restructuring reserves accrued in prior fiscal years. During the second quarter of fiscal 2016, management committed to a performance improvement plan that included selected workforce reductions. In connection with this plan, the Company recorded pre-tax restructuring charges totaling $1.0 million for severance and related benefit costs related to the involuntary termination of employees. The majority of severance costs are being paid out over a twelve -month period. The plan affects approximately 25 employees. The Company also recorded $0.5 million in reversals of excess restructuring reserves accrued in prior fiscal years. During the third quarter of fiscal 2016, the Company announced the closing of More magazine. This action along with other small business realignments resulted in selected workforce reductions. In connection with these actions, the Company recorded pre-tax restructuring charges totaling $3.0 million for severance and related benefit costs related to the involuntary termination of employees. The majority of severance costs are being paid out over a twelve -month period. The plan affects approximately 45 employees. The Company also wrote down related manuscript and art inventory by $0.5 million , which is recorded in the production, distribution, and editorial line of the Condensed Consolidated Statements of Earnings. The severance and related benefit costs and the credits for the reversal of excess restructuring reserves are recorded in the selling, general, and administrative line of the Condensed Consolidated Statements of Earnings. Details of changes in the Company's restructuring accrual are as follows: Nine months ended March 31, 2016 2015 (In thousands) Balance at beginning of period $ 15,731 $ 13,545 Severance accruals 7,400 14,670 Other accruals — 285 Cash payments (11,577 ) (9,124 ) Reversal of excess accrual (1,584 ) (105 ) Balance at end of period $ 9,970 $ 19,271 |
Long-term Debt
Long-term Debt | 9 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Long-term debt consists of the following: (In thousands) March 31, 2016 June 30, Variable-rate credit facilities Asset-backed bank facility of $100 million, due 10/20/2017 $ 80,000 $ 80,000 Revolving credit facility of $200 million, due 3/27/2019 45,000 77,500 Term loan due 3/27/2019 228,125 237,500 Private placement notes 3.04% senior notes, due 3/1/2016 — 50,000 3.04% senior notes, due 3/1/2017 50,000 50,000 3.04% senior notes, due 3/1/2018 50,000 50,000 Floating rate senior notes, due 12/19/2022 100,000 100,000 Floating rate senior notes, due 2/28/2024 150,000 150,000 Total long-term debt 703,125 795,000 Current portion of long-term debt (71,875 ) (62,500 ) Long-term debt $ 631,250 $ 732,500 In connection with the asset-backed bank facility, Meredith entered into a revolving agreement to sell all of its rights, title, and interest in the majority of its accounts receivable related to advertising and miscellaneous revenues to Meredith Funding Corporation, a special-purpose entity established to purchase accounts receivable from Meredith. At March 31, 2016 , $166.7 million of accounts receivable net of reserves was outstanding under the agreement. Meredith Funding Corporation in turn may sell receivable interests to a major national bank. In consideration of the sale, Meredith receives cash and a subordinated note, bearing interest at the prime rate, 3.50 percent at March 31, 2016 , from Meredith Funding Corporation. The agreement is structured as a true sale under which the creditors of Meredith Funding Corporation will be entitled to be satisfied out of the assets of Meredith Funding Corporation prior to any value being returned to Meredith or its creditors. The accounts of Meredith Funding Corporation are fully consolidated in Meredith's condensed consolidated financial statements. In October 2015, we renewed our asset-backed bank facility for an additional two -year period on terms substantially similar to those previously in place. The renewed facility will expire in October 2017. The Company holds interest rate swap agreements to hedge variable interest rate risk on the $250.0 million floating-rate senior notes and on $50.0 million of the term loan. The expiration of the swaps is as follows: $50.0 million in August 2018, $100.0 million in March 2019, and $150.0 million in August 2019. Under the swaps the Company will pay fixed rates of interest ( 1.36 percent on the swap maturing in August 2018, 1.53 percent on the swap maturing in March 2019, and 1.76 percent on the swaps maturing in August 2019) and receive variable rates of interest based on the one to three-month London Interbank Offered Rate (LIBOR) ( 0.43 percent on the swap maturing in August 2018, 0.62 percent on the swap maturing in March 2019, and 0.63 percent on the swaps maturing in August 2019 as of March 31, 2016 ) on the $300.0 million notional amount of indebtedness. The swaps are designated as cash flow hedges. The Company evaluates the effectiveness of the hedging relationships on an ongoing basis by recalculating changes in fair value of the derivatives and related hedged items independently. Unrealized gains or losses on cash flow hedges are recorded in other comprehensive loss to the extent the cash flow hedges are effective. The amount of the swap that offsets the effects of interest rate changes on the related debt is subsequently reclassified into interest expense. Any ineffective portions on cash flow hedges are recorded in interest expense. No material ineffectiveness existed at either March 31, 2016 or 2015 . The fair value of the interest rate swap agreements is the estimated amount the Company would pay or receive to terminate the swap agreements. At March 31, 2016 , the swaps had a fair value of $6.4 million liability. The Company is exposed to credit-related losses in the event of nonperformance by counterparties to the swap agreements. This exposure is managed through diversification and the monitoring of the creditworthiness of the counterparties. There was no potential loss that the Company would incur on the interest rate swaps if the counterparties were to fail to meet their obligations under the agreements at March 31, 2016 . Given the strong creditworthiness of the counterparties, management does not expect any of them to fail to meet their obligations. Additionally, the concentration of risk with any individual counterparty is not considered significant at March 31, 2016 . |
Pension and Postretirement Bene
Pension and Postretirement Benefit Plans | 9 Months Ended |
Mar. 31, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Pension and Postretirement Benefit Plans | Pension and Postretirement Benefit Plans The following table presents the components of net periodic benefit costs: Three Months Nine Months Periods ended March 31, 2016 2015 2016 2015 (In thousands) Pension benefits Service cost $ 2,977 $ 3,043 $ 8,931 $ 9,129 Interest cost 1,468 1,395 4,406 4,187 Expected return on plan assets (2,745 ) (2,759 ) (8,237 ) (8,277 ) Prior service cost amortization 48 56 146 168 Actuarial loss amortization 157 169 471 507 Net periodic benefit costs $ 1,905 $ 1,904 $ 5,717 $ 5,714 Postretirement benefits Service cost $ 25 $ 29 $ 75 $ 87 Interest cost 96 102 288 306 Prior service cost amortization (107 ) (108 ) (321 ) (324 ) Actuarial gain amortization (169 ) (108 ) (507 ) (324 ) Net periodic benefit credit $ (155 ) $ (85 ) $ (465 ) $ (255 ) The amortization of amounts related to unrecognized prior service costs and net actuarial gain/loss were reclassified out of other comprehensive income as components of net periodic benefit costs. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The following table presents the calculations of earnings per share: Three Months Nine Months Periods ended March 31, 2016 2015 2016 2015 (In thousands except per share data) Net earnings $ 80,904 $ 25,256 $ 124,452 $ 94,212 Basic average shares outstanding 44,617 44,549 44,623 44,497 Dilutive effect of stock options and equivalents 681 838 721 792 Diluted average shares outstanding 45,298 45,387 45,344 45,289 Earnings per share Basic earnings per share $ 1.81 $ 0.57 $ 2.79 $ 2.12 Diluted earnings per share 1.79 0.56 2.74 2.08 For the three months ended March 31, 2016 and 2015 , antidilutive options excluded from the above calculations totaled 1.7 million (with a weighted average exercise price of $48.25 ) and 0.6 million (with a weighted average exercise price of $50.98 ), respectively. For the nine months ended March 31, 2016 and 2015 , antidilutive options excluded from the above calculations totaled 1.5 million (with a weighted average exercise price of $48.68 ) and 1.0 million (with a weighted average exercise price of $50.49 ), respectively. In the nine months ended March 31, 2016 and 2015 , options were exercised to purchase 0.2 million and 0.9 million common shares, respectively. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We have estimated the fair value of our financial instruments using available market information and valuation methodologies we believe to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that we would realize upon disposition. The fair value hierarchy consists of three broad levels of inputs that may be used to measure fair value, which are described below: • Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2 Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable ; • Level 3 Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates. The following table sets forth the carrying value and the estimated fair value of the Company's financial instruments not measured at fair value on a recurring basis: March 31, 2016 June 30, 2015 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Broadcast rights payable $ 14,314 $ 13,655 $ 7,774 $ 7,490 Long-term debt 703,125 703,614 795,000 797,121 The fair value of broadcast rights payable was determined using the present value of expected future cash flows discounted at the Company's current borrowing rate with inputs included in Level 3. The fair value of long-term debt was determined using the present value of expected future cash flows using borrowing rates currently available for debt with similar terms and maturities with inputs included in Level 2. The following table sets forth the assets and liabilities measured at fair value on a recurring basis: (In thousands) March 31, 2016 June 30, 2015 Other assets Interest rate swaps $ — $ 1,139 Accrued expenses and other liabilities Contingent consideration — 800 Interest rate swaps 2,594 3,295 Other noncurrent liabilities Contingent consideration 59,230 60,735 Interest rate swaps 3,819 — The fair value of interest rate swaps is determined based on discounted cash flows derived using market observable inputs including swap curves that are included in Level 2. The fair value of the contingent consideration is determined based on probability-weighted discounted cash flow models that include significant inputs not observable in the market and thus represent Level 3 measurements. Details of changes in the fair value of Level 3 contingent consideration are as follows: Nine months ended March 31, 2016 2015 (in thousands) Balance at beginning of period $ 61,535 $ 1,700 Additions due to acquisitions — 60,535 Payments (800 ) — Change in present value of contingent consideration (1) (1,505 ) (600 ) Balance at end of period $ 59,230 $ 61,635 (1) Change in present value of contingent consideration is recorded in the selling, general, and administrative expense line on the Condensed Consolidated Statements of Earnings and is comprised of changes in estimated earn out payments based on projections of performance and the amortization of the present value discount. |
Financial Information about Ind
Financial Information about Industry Segments | 9 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Financial Information about Industry Segments | Financial Information about Industry Segments Meredith is a diversified media company focused primarily on the home and family marketplace. On the basis of products and services, the Company has established two reportable segments: national media and local media. There have been no changes in the basis of segmentation since June 30, 2015 . There are no material intersegment transactions. There are two principal financial measures reported to the chief executive officer for use in assessing segment performance and allocating resources. Those measures are operating profit and EBITDA. Operating profit for segment reporting, disclosed below, is revenues less operating costs excluding unallocated corporate expenses. Segment operating expenses include allocations of certain centrally incurred costs such as employee benefits, occupancy, information systems, accounting services, internal legal staff, and human resources administration. These costs are allocated based on actual usage or other appropriate methods, primarily number of employees. Unallocated corporate expenses are corporate overhead expenses not directly attributable to the operating groups. In accordance with authoritative guidance on disclosures about segments of an enterprise and related information, EBITDA is not presented below. The following table presents financial information by segment: Three Months Nine Months Periods ended March 31, 2016 2015 2016 2015 (In thousands) Revenues National media $ 281,843 $ 275,298 $ 806,569 $ 764,005 Local media 140,928 122,881 407,281 404,263 Total revenues $ 422,771 $ 398,179 $ 1,213,850 $ 1,168,268 Segment profit National media $ 34,781 $ 23,460 $ 91,167 $ 78,462 Local media 46,150 31,420 115,918 122,718 Unallocated corporate 47,107 (7,774 ) 10,078 (32,360 ) Income from operations 128,038 47,106 217,163 168,820 Interest expense, net (5,104 ) (5,179 ) (15,682 ) (14,206 ) Earnings before income taxes $ 122,934 $ 41,927 $ 201,481 $ 154,614 Depreciation and amortization National media $ 4,663 $ 4,369 $ 14,061 $ 11,481 Local media 9,425 9,816 29,019 28,926 Unallocated corporate 525 425 1,599 1,280 Total depreciation and amortization $ 14,613 $ 14,610 $ 44,679 $ 41,687 |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The condensed consolidated financial statements include the accounts of Meredith Corporation and its wholly owned subsidiaries (Meredith or the Company), after eliminating all significant intercompany balances and transactions. Meredith does not have any off-balance sheet arrangements. The Company's use of special-purpose entities is limited to Meredith Funding Corporation, whose activities are fully consolidated in Meredith's condensed consolidated financial statements. |
Basis of Accounting | The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (GAAP) for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements, which are included in Meredith's Annual Report on Form 10‑K for the year ended June 30, 2015 , filed with the SEC. The condensed consolidated financial statements as of March 31, 2016 , and for the three and nine months ended March 31, 2016 and 2015 , are unaudited but, in management's opinion, include all normal, recurring adjustments necessary for a fair presentation of the results of interim periods. The year-end condensed consolidated balance sheet data as of June 30, 2015 , were derived from audited financial statements, but do not include all disclosures required by GAAP. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year. Reclassifications —Certain fiscal 2016 prior quarters' amounts related to merger expenses have been reclassified to conform to the current quarter's presentation. |
Adopted Accounting Pronouncements | In September 2015, the Financial Accounting Standards Board (FASB) issued guidance simplifying the accounting for measurement-period adjustments related to business combinations. The new guidance removes the requirement to restate prior periods to reflect adjustments made to provisional amounts. Rather, adjustments to the provisional amounts are to be recognized in the reporting period they are identified. In the period of adjustment, the portion that would have been recorded in a previous reporting period is to be presented separately on the face of the income statement or disclosed in the notes. Prospective adoption of the guidance is effective for fiscal years beginning after December 15, 2015, with early adoption permitted. The Company prospectively adopted this guidance in the first quarter of fiscal 2016. The adoption of this guidance did not have a material impact on our results of operations or cash flows. In November 2015, the FASB issued guidance simplifying the presentation of deferred tax assets and deferred tax liabilities. The new guidance no longer requires the presentation of current deferred tax assets and deferred tax liabilities on a classified balance sheet, rather requiring all to be presented as noncurrent. The guidance is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company prospectively adopted this guidance in the second quarter of fiscal 2016. As required by the guidance, all deferred tax assets and liabilities are classified as non-current in our condensed consolidated balance sheet as of March 31, 2016, which is a change from our historical presentation whereby certain of our deferred tax assets and liabilities were classified as current and the remainder were classified as non-current. The June 30, 2015, balance sheet has not been retrospectively adjusted. The adoption of this guidance did not have an impact on our results of operations or cash flows. Recently Issued Accounting Pronouncements —In January 2016, the FASB issued guidance to improve and simplify accounting for financial instruments. The updated guidance includes several provisions that are not applicable to the Company's consolidated financial statements, with the exception of changes to fair value disclosure. Under the new guidance, public entities are no longer required to disclose the methods and significant assumptions used to estimate fair value of financial instruments measured at amortized cost on the consolidated balance sheets. It also requires public entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The guidance is effective for the Company in the first quarter of fiscal 2019. The adoption of this guidance requires a change in our disclosures only and it is not expected to have impact on our results of operations or cash flows. In February 2016, the FASB issued its final lease accounting standard which requires lessees to recognize on the balance sheet a right-of use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. Treatment of lease payments in the statement of earnings and statement of cash flows is relatively unchanged from previous guidance. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The standard is effective for the Company beginning July 1, 2019, with early application permitted. The Company is currently evaluating the effect the guidance will have on our consolidated financial statements. In March 2016, the FASB issued guidance simplifying the transition to the equity method of accounting. The new guidance eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. The new guidance is effective for the Company during the first quarter of fiscal 2018. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements. In March 2016, the FASB issued an amendment to the previously issued but not yet adopted revenue recognition standard. In this amendment, the FASB clarified guidance on when a party to a transaction should be considered a principal, recording revenue on a gross basis, or an agent, recording revenue on a net basis. The amendment becomes effective with the new revenue recognition standard in the Company's first fiscal quarter of fiscal 2019. The Company is evaluating the impact the guidance will have on our results of operations and financial position. In March 2016, as a part of its simplification initiative, the FASB issued guidance on the accounting for employee share-based payments. The new guidance is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax treatment, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective in the Company's first quarter of fiscal 2018. Early application is permitted. The Company is currently evaluating the impact the guidance will have on our consolidated financial statements. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Major components of inventories are summarized below. Of total net inventory values shown, 54 percent are under the last-in first-out (LIFO) method at March 31, 2016 , and 52 percent at June 30, 2015 . (In thousands) March 31, 2016 June 30, Raw materials $ 9,177 $ 13,900 Work in process 16,776 12,053 Finished goods 1,701 2,428 27,654 28,381 Reserve for LIFO cost valuation (3,700 ) (3,700 ) Inventories $ 23,954 $ 24,681 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets consist of the following: March 31, 2016 June 30, 2015 (In thousands) Gross Accumulated Net Gross Accumulated Net Intangible assets subject to amortization National media Advertiser relationships $ 18,610 $ (9,290 ) $ 9,320 $ 20,879 $ (7,660 ) $ 13,219 Customer lists 5,230 (3,922 ) 1,308 9,120 (6,679 ) 2,441 Other 19,425 (8,094 ) 11,331 20,675 (7,361 ) 13,314 Local media Network affiliation agreements 229,309 (134,182 ) 95,127 229,309 (129,362 ) 99,947 Retransmission agreements 21,229 (6,108 ) 15,121 21,229 (3,454 ) 17,775 Other 1,214 (242 ) 972 1,212 (126 ) 1,086 Total $ 295,017 $ (161,838 ) 133,179 $ 302,424 $ (154,642 ) 147,782 Intangible assets not subject to amortization National media Internet domain names 7,827 7,827 Trademarks 192,089 192,089 Local media FCC licenses 624,684 624,684 Total 824,600 824,600 Intangible assets, net $ 957,779 $ 972,382 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets consist of the following: March 31, 2016 June 30, 2015 (In thousands) Gross Accumulated Net Gross Accumulated Net Intangible assets subject to amortization National media Advertiser relationships $ 18,610 $ (9,290 ) $ 9,320 $ 20,879 $ (7,660 ) $ 13,219 Customer lists 5,230 (3,922 ) 1,308 9,120 (6,679 ) 2,441 Other 19,425 (8,094 ) 11,331 20,675 (7,361 ) 13,314 Local media Network affiliation agreements 229,309 (134,182 ) 95,127 229,309 (129,362 ) 99,947 Retransmission agreements 21,229 (6,108 ) 15,121 21,229 (3,454 ) 17,775 Other 1,214 (242 ) 972 1,212 (126 ) 1,086 Total $ 295,017 $ (161,838 ) 133,179 $ 302,424 $ (154,642 ) 147,782 Intangible assets not subject to amortization National media Internet domain names 7,827 7,827 Trademarks 192,089 192,089 Local media FCC licenses 624,684 624,684 Total 824,600 824,600 Intangible assets, net $ 957,779 $ 972,382 |
Schedule of Goodwill | Changes in the carrying amount of goodwill were as follows: Nine months ended March 31, 2016 2015 (In thousands) National Local Total National Local Total Balance at beginning of period $ 932,471 $ 68,775 $ 1,001,246 $ 789,038 $ 51,823 $ 840,861 Acquisitions and adjustments (1,168 ) — (1,168 ) 179,424 17,606 197,030 Balance at end of period $ 931,303 $ 68,775 $ 1,000,078 $ 968,462 $ 69,429 $ 1,037,891 |
Restructuring Accrual (Tables)
Restructuring Accrual (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | Details of changes in the Company's restructuring accrual are as follows: Nine months ended March 31, 2016 2015 (In thousands) Balance at beginning of period $ 15,731 $ 13,545 Severance accruals 7,400 14,670 Other accruals — 285 Cash payments (11,577 ) (9,124 ) Reversal of excess accrual (1,584 ) (105 ) Balance at end of period $ 9,970 $ 19,271 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consists of the following: (In thousands) March 31, 2016 June 30, Variable-rate credit facilities Asset-backed bank facility of $100 million, due 10/20/2017 $ 80,000 $ 80,000 Revolving credit facility of $200 million, due 3/27/2019 45,000 77,500 Term loan due 3/27/2019 228,125 237,500 Private placement notes 3.04% senior notes, due 3/1/2016 — 50,000 3.04% senior notes, due 3/1/2017 50,000 50,000 3.04% senior notes, due 3/1/2018 50,000 50,000 Floating rate senior notes, due 12/19/2022 100,000 100,000 Floating rate senior notes, due 2/28/2024 150,000 150,000 Total long-term debt 703,125 795,000 Current portion of long-term debt (71,875 ) (62,500 ) Long-term debt $ 631,250 $ 732,500 |
Pension and Postretirement Be24
Pension and Postretirement Benefit Plans (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Schedule of Net Benefit Costs | The following table presents the components of net periodic benefit costs: Three Months Nine Months Periods ended March 31, 2016 2015 2016 2015 (In thousands) Pension benefits Service cost $ 2,977 $ 3,043 $ 8,931 $ 9,129 Interest cost 1,468 1,395 4,406 4,187 Expected return on plan assets (2,745 ) (2,759 ) (8,237 ) (8,277 ) Prior service cost amortization 48 56 146 168 Actuarial loss amortization 157 169 471 507 Net periodic benefit costs $ 1,905 $ 1,904 $ 5,717 $ 5,714 Postretirement benefits Service cost $ 25 $ 29 $ 75 $ 87 Interest cost 96 102 288 306 Prior service cost amortization (107 ) (108 ) (321 ) (324 ) Actuarial gain amortization (169 ) (108 ) (507 ) (324 ) Net periodic benefit credit $ (155 ) $ (85 ) $ (465 ) $ (255 ) |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the calculations of earnings per share: Three Months Nine Months Periods ended March 31, 2016 2015 2016 2015 (In thousands except per share data) Net earnings $ 80,904 $ 25,256 $ 124,452 $ 94,212 Basic average shares outstanding 44,617 44,549 44,623 44,497 Dilutive effect of stock options and equivalents 681 838 721 792 Diluted average shares outstanding 45,298 45,387 45,344 45,289 Earnings per share Basic earnings per share $ 1.81 $ 0.57 $ 2.79 $ 2.12 Diluted earnings per share 1.79 0.56 2.74 2.08 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The following table sets forth the carrying value and the estimated fair value of the Company's financial instruments not measured at fair value on a recurring basis: March 31, 2016 June 30, 2015 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Broadcast rights payable $ 14,314 $ 13,655 $ 7,774 $ 7,490 Long-term debt 703,125 703,614 795,000 797,121 |
Fair Value, Liabilities Measured on Recurring Basis | The following table sets forth the assets and liabilities measured at fair value on a recurring basis: (In thousands) March 31, 2016 June 30, 2015 Other assets Interest rate swaps $ — $ 1,139 Accrued expenses and other liabilities Contingent consideration — 800 Interest rate swaps 2,594 3,295 Other noncurrent liabilities Contingent consideration 59,230 60,735 Interest rate swaps 3,819 — |
Schedule of Contingent Consideration | Details of changes in the fair value of Level 3 contingent consideration are as follows: Nine months ended March 31, 2016 2015 (in thousands) Balance at beginning of period $ 61,535 $ 1,700 Additions due to acquisitions — 60,535 Payments (800 ) — Change in present value of contingent consideration (1) (1,505 ) (600 ) Balance at end of period $ 59,230 $ 61,635 (1) Change in present value of contingent consideration is recorded in the selling, general, and administrative expense line on the Condensed Consolidated Statements of Earnings and is comprised of changes in estimated earn out payments based on projections of performance and the amortization of the present value discount. |
Financial Information about I27
Financial Information about Industry Segments (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table presents financial information by segment: Three Months Nine Months Periods ended March 31, 2016 2015 2016 2015 (In thousands) Revenues National media $ 281,843 $ 275,298 $ 806,569 $ 764,005 Local media 140,928 122,881 407,281 404,263 Total revenues $ 422,771 $ 398,179 $ 1,213,850 $ 1,168,268 Segment profit National media $ 34,781 $ 23,460 $ 91,167 $ 78,462 Local media 46,150 31,420 115,918 122,718 Unallocated corporate 47,107 (7,774 ) 10,078 (32,360 ) Income from operations 128,038 47,106 217,163 168,820 Interest expense, net (5,104 ) (5,179 ) (15,682 ) (14,206 ) Earnings before income taxes $ 122,934 $ 41,927 $ 201,481 $ 154,614 Depreciation and amortization National media $ 4,663 $ 4,369 $ 14,061 $ 11,481 Local media 9,425 9,816 29,019 28,926 Unallocated corporate 525 425 1,599 1,280 Total depreciation and amortization $ 14,613 $ 14,610 $ 44,679 $ 41,687 |
Merger Termination (Details)
Merger Termination (Details) - Merger termination fee net of merger-related costs [Member] - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | |
Business Acquisition [Line Items] | ||||
Gain from merger termination | $ 60 | |||
Merger related expenses | $ 0.3 | $ 3.5 | $ 12.7 | |
Income tax benefit from merger termination | $ 4.7 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Millions | Dec. 22, 2015 | Nov. 01, 2014 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 30, 2014 | Nov. 13, 2014 |
Martha Stewart [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Term of licensing arrangement | 10 years | |||||
Change in goodwill based on updated valuation report and other fair value determinations | $ 0.3 | |||||
Sequential Brands Group, Inc. [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Term of licensing arrangement | 10 years | |||||
Goodwill acquired during period | $ 1.6 | |||||
Mywedding [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of membership interests or stock acquired | 100.00% | |||||
Selectable Media [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Change in goodwill based on updated valuation report and other fair value determinations | $ (2.9) | |||||
Percentage of membership interests or stock acquired | 100.00% | |||||
Increase in deferred income taxes | $ 2.9 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Jun. 30, 2015 |
Inventory Disclosure [Abstract] | ||
Percentage of LIFO Inventory | 54.00% | 52.00% |
Raw materials | $ 9,177 | $ 13,900 |
Work in process | 16,776 | 12,053 |
Finished goods | 1,701 | 2,428 |
Subtotal | 27,654 | 28,381 |
Reserve for LIFO cost valuation | (3,700) | (3,700) |
Inventories | $ 23,954 | $ 24,681 |
Intangible Assets and Goodwil31
Intangible Assets and Goodwill - Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Jun. 30, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets subject to amortization, gross amount | $ 295,017 | $ 302,424 | |
Intangible assets subject to amortization, accumulated amortization | (161,838) | (154,642) | |
Intangible assets subject to amortization, net amount | 133,179 | 147,782 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets not subject to amortization | 824,600 | 824,600 | |
Intangible assets, net | 957,779 | 972,382 | |
Amortization expense | 14,693 | $ 11,835 | |
Future amortization expense for intangible assets [Abstract] | |||
Future amortization expense, fiscal 2016 | 19,600 | ||
Future amortization expense, fiscal 2017 | 18,000 | ||
Future amortization expense, fiscal 2018 | 15,000 | ||
Future amortization expense, fiscal 2019 | 12,500 | ||
Future amortization expense, fiscal 2020 | 11,600 | ||
Internet domain names [Member] | National media [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets not subject to amortization | 7,827 | 7,827 | |
Trademarks [Member] | National media [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets not subject to amortization | 192,089 | 192,089 | |
FCC licenses [Member] | Local media [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets not subject to amortization | 624,684 | 624,684 | |
Advertiser relationships [Member] | National media [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets subject to amortization, gross amount | 18,610 | 20,879 | |
Intangible assets subject to amortization, accumulated amortization | (9,290) | (7,660) | |
Intangible assets subject to amortization, net amount | 9,320 | 13,219 | |
Customer lists [Member] | National media [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets subject to amortization, gross amount | 5,230 | 9,120 | |
Intangible assets subject to amortization, accumulated amortization | (3,922) | (6,679) | |
Intangible assets subject to amortization, net amount | 1,308 | 2,441 | |
Other [Member] | National media [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets subject to amortization, gross amount | 19,425 | 20,675 | |
Intangible assets subject to amortization, accumulated amortization | (8,094) | (7,361) | |
Intangible assets subject to amortization, net amount | 11,331 | 13,314 | |
Other [Member] | Local media [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets subject to amortization, gross amount | 1,214 | 1,212 | |
Intangible assets subject to amortization, accumulated amortization | (242) | (126) | |
Intangible assets subject to amortization, net amount | 972 | 1,086 | |
Network affiliation agreements [Member] | Local media [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets subject to amortization, gross amount | 229,309 | 229,309 | |
Intangible assets subject to amortization, accumulated amortization | (134,182) | (129,362) | |
Intangible assets subject to amortization, net amount | 95,127 | 99,947 | |
Retransmission agreements [Member] | Local media [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets subject to amortization, gross amount | 21,229 | 21,229 | |
Intangible assets subject to amortization, accumulated amortization | (6,108) | (3,454) | |
Intangible assets subject to amortization, net amount | $ 15,121 | $ 17,775 |
Intangible Assets and Goodwil32
Intangible Assets and Goodwill - Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Goodwill [Roll Forward] | ||
Balance at beginning of period | $ 1,001,246 | $ 840,861 |
Acquisitions and adjustments | (1,168) | 197,030 |
Balance at end of period | 1,000,078 | 1,037,891 |
National media [Member] | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 932,471 | 789,038 |
Acquisitions and adjustments | (1,168) | 179,424 |
Balance at end of period | 931,303 | 968,462 |
Local media [Member] | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 68,775 | 51,823 |
Acquisitions and adjustments | 0 | 17,606 |
Balance at end of period | $ 68,775 | $ 69,429 |
Restructuring Accrual - Narrati
Restructuring Accrual - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2016USD ($)employee | Dec. 31, 2015USD ($)employee | Sep. 30, 2015USD ($)employee | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Severance costs, expected period of payment | 12 months | 12 months | 12 months | ||
Expected number of employees affected | employee | 45 | 25 | 45 | ||
Selling, general and administrative [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Reversal of excess accrual | $ 500 | $ 1,100 | $ (1,584) | $ (105) | |
Production, distribution, and editorial [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Write-down of manuscript and art inventory | $ 500 | ||||
Employee Severance [Member] | Selling, general and administrative [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charge | $ 3,000 | $ 1,000 | $ 3,400 | $ 7,400 | $ 14,670 |
Restructuring Accrual - Changes
Restructuring Accrual - Changes in Restructuring Accrual (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Changes in restructuring accrual [Roll Forward] | |||||
Balance at beginning of period | $ 15,731 | $ 15,731 | $ 13,545 | ||
Cash payments | (11,577) | (9,124) | |||
Balance at end of period | $ 9,970 | 9,970 | 19,271 | ||
Selling, general and administrative [Member] | |||||
Changes in restructuring accrual [Roll Forward] | |||||
Reversal of excess accrual | $ 500 | 1,100 | (1,584) | (105) | |
Selling, general and administrative [Member] | Employee Severance [Member] | |||||
Changes in restructuring accrual [Roll Forward] | |||||
Accruals | $ 3,000 | $ 1,000 | $ 3,400 | 7,400 | 14,670 |
Selling, general and administrative [Member] | Other Restructuring [Member] | |||||
Changes in restructuring accrual [Roll Forward] | |||||
Accruals | $ 0 | $ 285 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) | 9 Months Ended | |
Mar. 31, 2016 | Jun. 30, 2015 | |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 703,125,000 | $ 795,000,000 |
Current portion of long-term debt | (71,875,000) | (62,500,000) |
Long-term debt | $ 631,250,000 | 732,500,000 |
Subordinated note receivable, interest rate | 3.50% | |
Line of Credit [Member] | Asset Backed Bank Facility [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 80,000,000 | 80,000,000 |
Line of credit facility, maximum borrowing capacity | 100,000,000 | 100,000,000 |
Accounts receivable outstanding under the revolving agreement | 166,700,000 | |
Line of Credit [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 45,000,000 | 77,500,000 |
Line of credit facility, maximum borrowing capacity | 200,000,000 | 200,000,000 |
Term Loan Facility [Member] | Term Loan Facility [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 228,125,000 | 237,500,000 |
Senior Notes [Member] | Senior Notes 3.04% due 2016 [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 0 | $ 50,000,000 |
Debt instrument, stated interest rate | 3.04% | 3.04% |
Senior Notes [Member] | Senior Notes 3.04% due 2017 [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 50,000,000 | $ 50,000,000 |
Debt instrument, stated interest rate | 3.04% | 3.04% |
Senior Notes [Member] | Senior Notes 3.04% due 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 50,000,000 | $ 50,000,000 |
Debt instrument, stated interest rate | 3.04% | 3.04% |
Senior Notes [Member] | Senior Notes Due 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 100,000,000 | $ 100,000,000 |
Senior Notes [Member] | Senior Notes Due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 150,000,000 | $ 150,000,000 |
Long-term Debt - Derivative (De
Long-term Debt - Derivative (Details) - Cash Flow Hedging [Member] | 9 Months Ended |
Mar. 31, 2016USD ($) | |
Interest Rate Swap [Member] | |
Derivative [Line Items] | |
Notional amount of derivative | $ 300,000,000 |
Fair value of interest rate swaps | 6,400,000 |
Maximum loss on counterparties failure to meet obligations | 0 |
Interest Rate Swap Expiring August 2018 [Member] | |
Derivative [Line Items] | |
Derivative, amount of hedged items | $ 50,000,000 |
Fixed interest rate of derivative | 1.36% |
Variable interest rate of derivative | 0.43% |
Interest Rate Swap Expiring March 2019 [Member] | |
Derivative [Line Items] | |
Derivative, amount of hedged items | $ 100,000,000 |
Fixed interest rate of derivative | 1.53% |
Variable interest rate of derivative | 0.62% |
Interest Rate Swaps Expiring August 2019 [Member] | |
Derivative [Line Items] | |
Derivative, amount of hedged items | $ 150,000,000 |
Fixed interest rate of derivative | 1.76% |
Variable interest rate of derivative | 0.63% |
Senior Notes Due 2024 [Member] | Interest Rate Swap [Member] | |
Derivative [Line Items] | |
Derivative, amount of hedged items | $ 250,000,000 |
Term Loan Facility [Member] | Interest Rate Swap [Member] | |
Derivative [Line Items] | |
Derivative, amount of hedged items | $ 50,000,000 |
Pension and Postretirement Be37
Pension and Postretirement Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Pension Plans [Member] | ||||
Components of Net Periodic Benefit Costs [Abstract] | ||||
Service cost | $ 2,977 | $ 3,043 | $ 8,931 | $ 9,129 |
Interest cost | 1,468 | 1,395 | 4,406 | 4,187 |
Expected return on plan assets | (2,745) | (2,759) | (8,237) | (8,277) |
Prior service cost amortization | 48 | 56 | 146 | 168 |
Actuarial loss (gain) amortization | 157 | 169 | 471 | 507 |
Net periodic benefit credit | 1,905 | 1,904 | 5,717 | 5,714 |
Postretirement Benefit Plans [Member] | ||||
Components of Net Periodic Benefit Costs [Abstract] | ||||
Service cost | 25 | 29 | 75 | 87 |
Interest cost | 96 | 102 | 288 | 306 |
Prior service cost amortization | (107) | (108) | (321) | (324) |
Actuarial loss (gain) amortization | (169) | (108) | (507) | (324) |
Net periodic benefit credit | $ (155) | $ (85) | $ (465) | $ (255) |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||||
Net earnings | $ 80,904 | $ 25,256 | $ 124,452 | $ 94,212 |
Basic average shares outstanding (in shares) | 44,617 | 44,549 | 44,623 | 44,497 |
Dilutive effect of stock options and equivalents (in shares) | 681 | 838 | 721 | 792 |
Diluted average shares outstanding (in shares) | 45,298 | 45,387 | 45,344 | 45,289 |
Earnings per share | ||||
Basic earnings per share (in usd per share) | $ 1.81 | $ 0.57 | $ 2.79 | $ 2.12 |
Diluted earnings per share (in usd per share) | $ 1.79 | $ 0.56 | $ 2.74 | $ 2.08 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Options exercised to purchase common shares | 200 | 900 | ||
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive options excluded from calculation of earnings per share, number of options | 1,700 | 600 | 1,500 | 1,000 |
Antidilutive options excluded from calculation of earnings per share, weighted average exercise price (in usd per share) | $ 48.25 | $ 50.98 | $ 48.68 | $ 50.49 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Value and Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Jun. 30, 2015 |
Carrying Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Broadcast rights payable | $ 14,314 | $ 7,774 |
Long-term debt | 703,125 | 795,000 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Broadcast rights payable | 13,655 | 7,490 |
Long-term debt | $ 703,614 | $ 797,121 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - Measured at fair value on recurring basis [Member] - USD ($) $ in Thousands | Mar. 31, 2016 | Jun. 30, 2015 |
Other assets [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | $ 0 | $ 1,139 |
Accrued expenses and other liabilities [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | 2,594 | 3,295 |
Accrued expenses and other liabilities [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 800 |
Other noncurrent liabilities [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | 3,819 | 0 |
Other noncurrent liabilities [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 59,230 | $ 60,735 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Fair Value of Level 3 Contingent Consideration (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Contingent consideration [Roll Forward] | ||
Balance at beginning of period | $ 61,535 | $ 1,700 |
Additions due to acquisitions | 0 | 60,535 |
Payments | (800) | 0 |
Change in present value of contingent consideration | (1,505) | (600) |
Balance at end of period | $ 59,230 | $ 61,635 |
Financial Information about I42
Financial Information about Industry Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | Mar. 31, 2016USD ($)measuresegment | Mar. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Number of principal financial measures | measure | 2 | |||
Total revenues | $ 422,771 | $ 398,179 | $ 1,213,850 | $ 1,168,268 |
Income from operations | 128,038 | 47,106 | 217,163 | 168,820 |
Interest expense, net | (5,104) | (5,179) | (15,682) | (14,206) |
Earnings before income taxes | 122,934 | 41,927 | 201,481 | 154,614 |
Depreciation and amortization | 14,613 | 14,610 | 44,679 | 41,687 |
National media [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 281,843 | 275,298 | 806,569 | 764,005 |
Income from operations | 34,781 | 23,460 | 91,167 | 78,462 |
Depreciation and amortization | 4,663 | 4,369 | 14,061 | 11,481 |
Local media [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 140,928 | 122,881 | 407,281 | 404,263 |
Income from operations | 46,150 | 31,420 | 115,918 | 122,718 |
Depreciation and amortization | 9,425 | 9,816 | 29,019 | 28,926 |
Unallocated corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Income from operations | 47,107 | (7,774) | 10,078 | (32,360) |
Depreciation and amortization | $ 525 | $ 425 | $ 1,599 | $ 1,280 |