Discontinued Operations | 9 Months Ended |
Sep. 29, 2013 |
Discontinued Operations and Disposal Groups [Abstract] | ' |
Discontinued Operations | ' |
DISCONTINUED OPERATIONS |
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New England Media Group |
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On August 3, 2013, we entered into an agreement to sell the New England Media Group, consisting of The Boston Globe, BostonGlobe.com, Boston.com, the T&G, Telegram.com and related businesses, to an acquisition company. On October 24, 2013, we completed the sale of substantially all of the assets and operating liabilities of the New England Media Group. See Note 16 for additional information regarding this sale. The results of operations of the New England Media Group have been classified as discontinued operations for all periods presented and certain assets and liabilities are classified as held for sale for all periods presented. |
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As a result, we triggered complete or partial withdrawal obligations under several multiemployer pension plans. Accordingly, we recorded a pension withdrawal expense estimated to be approximately $8 million in the third quarter of 2013. The actual liability will not be known until each plan completes a final assessment of the withdrawal liability and issues a demand to us. |
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The carrying value of goodwill and intangible assets associated with the New England Media Group had been previously written down to zero. During the third quarter of 2013, we estimated the fair value less cost to sell of the group, which resulted in a $34.3 million impairment charge for fixed assets at the New England Media Group. |
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About Group |
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On September 24, 2012, we completed the sale of the About Group, consisting of About.com, ConsumerSearch.com, CalorieCount.com and related businesses, to IAC/InterActiveCorp for $300.0 million in cash, plus a net working capital adjustment of approximately $17 million. In 2012, the sale resulted in a pre-tax gain of $96.7 million ($61.9 million after-tax). The results of operations of the About Group, which had previously been presented as a reportable segment, have been classified as discontinued operations for all periods presented in 2012. |
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Regional Media Group |
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On January 6, 2012, we completed the sale of the Regional Media Group, consisting of 16 regional newspapers, other print publications and related businesses, to Halifax Media Holdings LLC for approximately $140 million in cash. The net after-tax proceeds from the sale, including a tax benefit, were approximately $150 million. In 2012, the sale resulted in an after-tax gain of $23.6 million (including post-closing adjustments recorded in the second and fourth quarters of 2012 totaling $6.6 million). The results of operations of the Regional Media Group have been classified as discontinued operations for all periods presented in 2012. |
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The results of operations for the New England Media Group, the About Group and the Regional Media Group presented as discontinued operations are summarized below. |
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| | For the Quarters Ended |
| | September 29, 2013 | | September 23, 2012 |
(In thousands) | | New England Media Group | | About Group | | Regional Media Group | | Total | | New England Media Group | | About Group | | Regional Media Group | | Total |
Revenues | | $ | 89,073 | | | $ | — | | | $ | — | | | $ | 89,073 | | | $ | 93,691 | | | $ | 25,616 | | | $ | — | | | $ | 119,307 | |
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Total operating costs | | 85,157 | | | — | | | — | | | 85,157 | | | 93,233 | | | 16,687 | | | — | | | 109,920 | |
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Pension withdrawal expense(1) | | 7,997 | | | — | | | — | | | 7,997 | | | — | | | — | | | — | | | — | |
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Impairment of assets | | 34,300 | | | — | | | — | | | 34,300 | | | — | | | — | | | — | | | — | |
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(Loss)/income from joint ventures | | (82 | ) | | — | | | — | | | (82 | ) | | 17 | | | — | | | — | | | 17 | |
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Interest expense, net | | 3 | | | — | | | — | | | 3 | | | 7 | | | — | | | — | | | 7 | |
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Pre-tax (loss)/income | | (38,466 | ) | | — | | | — | | | (38,466 | ) | | 468 | | | 8,929 | | | — | | | 9,397 | |
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Income tax (benefit)/expense | | (19,479 | ) | | — | | | — | | | (19,479 | ) | | 791 | | | 2,903 | | | — | | | 3,694 | |
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(Loss)/income from discontinued operations, net of income taxes | | $ | (18,987 | ) | | $ | — | | | $ | — | | | $ | (18,987 | ) | | $ | (323 | ) | | $ | 6,026 | | | $ | — | | | $ | 5,703 | |
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-1 | The pension withdrawal expense related to estimated charges for complete or partial withdrawal obligations under multiemployer pension plans triggered by the sale of the New England Media Group. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | For the Nine Months Ended |
| | September 29, 2013 | | September 23, 2012 |
(In thousands) | | New England Media Group | | About Group | | Regional Media Group | | Total | | New England Media Group | | About Group | | Regional Media Group | | Total |
Revenues | | $ | 268,737 | | | $ | — | | | $ | — | | | $ | 268,737 | | | $ | 287,035 | | | $ | 74,970 | | | $ | 6,115 | | | $ | 368,120 | |
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Total operating costs | | 262,079 | | | — | | | — | | | 262,079 | | | 288,360 | | | 51,140 | | | 8,017 | | | 347,517 | |
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Pension withdrawal expense(1) | | 7,997 | | | — | | | — | | | 7,997 | | | — | | | — | | | — | | | — | |
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Impairment of assets(2) | | 34,300 | | | — | | | — | | | 34,300 | | | — | | | 194,732 | | | — | | | 194,732 | |
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(Loss)/income from joint ventures | | (205 | ) | | — | | | — | | | (205 | ) | | (12 | ) | | — | | | — | | | (12 | ) |
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Interest expense, net | | 9 | | | — | | | — | | | 9 | | | 7 | | | — | | | — | | | 7 | |
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Pre-tax loss | | (35,853 | ) | | — | | | — | | | (35,853 | ) | | (1,344 | ) | | (170,902 | ) | | (1,902 | ) | | (174,148 | ) |
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Income tax expense/(benefit) | | (16,858 | ) | | — | | | — | | | (16,858 | ) | | 391 | | | (60,065 | ) | | (736 | ) | | (60,410 | ) |
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Loss from discontinued operations, net of income taxes | | (18,995 | ) | | — | | | — | | | (18,995 | ) | | (1,735 | ) | | (110,837 | ) | | (1,166 | ) | | (113,738 | ) |
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Gain/(loss) on sale, net of income taxes | | | | | | | | | | | | | | | | |
Loss on sale | | — | | | — | | | — | | | — | | | — | | | — | | | (4,717 | ) | | (4,717 | ) |
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Income tax benefit(3) | | — | | | — | | | — | | | — | | | — | | | — | | | (30,448 | ) | | (30,448 | ) |
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Gain on sale, net of income taxes | | — | | | — | | | — | | | — | | | — | | | — | | | 25,731 | | | 25,731 | |
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(Loss)/income from discontinued operations, net of income taxes | | $ | (18,995 | ) | | $ | — | | | $ | — | | | $ | (18,995 | ) | | $ | (1,735 | ) | | $ | (110,837 | ) | | $ | 24,565 | | | $ | (88,007 | ) |
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-1 | The pension withdrawal expense related to estimated charges for complete or partial withdrawal obligations under multiemployer pension plans triggered by the sale of the New England Media Group. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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-2 | Included in the impairment of assets in 2012 is the impairment of goodwill that related to the About Group for the nine months ended September 23, 2012. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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-3 | The income tax benefit for the Regional Media Group included a tax deduction for goodwill, which was previously non-deductible, triggered upon the sale of the Regional Media Group. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Included in impairment of assets in 2013 is the impairment of fixed assets held for sale that related to the New England Media Group. During the third quarter of 2013, we estimated the fair value less cost to sell of the group held for sale, using unobservable inputs (Level 3). We recorded a $34.3 million non-cash charge in the third quarter of 2013 for fixed assets at the New England Media Group to reduce the carrying value of fixed assets to their fair value less cost to sell. |
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Goodwill is not amortized but tested for impairment annually or in an interim period if certain circumstances indicate a possible impairment may exist. Our policy is to perform our annual goodwill impairment test in the fourth quarter of our fiscal year. However, due to certain impairment indicators at the About Group in the second quarter of 2012, we performed an interim impairment test. As of June 24, 2012, the interim impairment test resulted in a $194.7 million non-cash charge in the second quarter of 2012 for the impairment of goodwill at the About Group. The impairment charge reduced the carrying value of goodwill to its fair value. |
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The assets and liabilities classified as held for sale for the New England Media Group, the About Group and the Regional Media Group are summarized below. |
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| | 29-Sep-13 | | 30-Dec-12 |
(In thousands) | | New England Media Group | | About Group | | Regional Media Group | | Total | | New England Media Group | | About Group | | Regional Media Group | | Total |
Accounts receivable, net | | $ | 33,389 | | | $ | — | | | $ | — | | | $ | 33,389 | | | $ | 40,343 | | | $ | — | | | $ | — | | | $ | 40,343 | |
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Inventories | | 1,970 | | | — | | | — | | | 1,970 | | | 3,078 | | | — | | | — | | | 3,078 | |
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Property, plant and equipment, net | | 55,056 | | | — | | | — | | | 55,056 | | | 86,917 | | | — | | | — | | | 86,917 | |
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Other assets | | 7,225 | | | — | | | — | | | 7,225 | | | 6,712 | | | — | | | — | | | 6,712 | |
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Total assets | | 97,640 | | | — | | | — | | | 97,640 | | | 137,050 | | | — | | | — | | | 137,050 | |
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Total liabilities | | 30,963 | | | — | | | — | | | 30,963 | | | 32,373 | | | — | | | — | | | 32,373 | |
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Net liabilities | | $ | 66,677 | | | $ | — | | | $ | — | | | $ | 66,677 | | | $ | 104,677 | | | $ | — | | | $ | — | | | $ | 104,677 | |
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