(Mark One) | |
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 13-3486363 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
225 Liberty Street, New York, N.Y. | 10281 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ | Emerging growth company ¨ |
Page | ||
September 30, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 332 | $ | 296 | |||
Short-term investments | — | 40 | |||||
Receivables, less allowances of $185 and $203 at September 30, 2017 and December 31, 2016, respectively | 409 | 543 | |||||
Inventories, net of reserves | 29 | 31 | |||||
Prepaid expenses and other current assets | 125 | 110 | |||||
Total current assets | 895 | 1,020 | |||||
Property, plant and equipment, net | 311 | 304 | |||||
Intangible assets, net | 799 | 846 | |||||
Goodwill | 2,048 | 2,069 | |||||
Other assets | 65 | 66 | |||||
Total assets | $ | 4,118 | $ | 4,305 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities | |||||||
Accounts payable and accrued liabilities | $ | 535 | $ | 598 | |||
Deferred revenue | 386 | 403 | |||||
Current portion of long-term debt | 7 | 7 | |||||
Total current liabilities | 928 | 1,008 | |||||
Long-term debt | 1,216 | 1,233 | |||||
Deferred tax liabilities | 185 | 210 | |||||
Deferred revenue | 76 | 86 | |||||
Other noncurrent liabilities | 333 | 328 | |||||
Commitments and contingencies (Note 13) | |||||||
Redeemable noncontrolling interests | 1 | — | |||||
Stockholders' equity | |||||||
Common stock, $0.01 par value, 400 million shares authorized; 99.61 million and 98.95 million shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 1 | 1 | |||||
Preferred stock, $0.01 par value, 40 million shares authorized; none issued | — | — | |||||
Additional paid-in capital | 12,531 | 12,548 | |||||
Accumulated deficit | (10,791 | ) | (10,732 | ) | |||
Accumulated other comprehensive loss, net | (362 | ) | (377 | ) | |||
Total Time Inc. stockholders' equity | 1,379 | 1,440 | |||||
Equity attributable to noncontrolling interests | — | — | |||||
Total stockholders' equity | 1,379 | 1,440 | |||||
Total liabilities and stockholders' equity | $ | 4,118 | $ | 4,305 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues | |||||||||||||||
Advertising | $ | 369 | $ | 417 | $ | 1,074 | $ | 1,203 | |||||||
Circulation | 197 | 223 | 609 | 697 | |||||||||||
Other | 113 | 110 | 326 | 309 | |||||||||||
Total revenues | 679 | 750 | 2,009 | 2,209 | |||||||||||
Costs of revenues | 280 | 327 | 867 | 956 | |||||||||||
Selling, general and administrative expenses | 306 | 339 | 976 | 1,085 | |||||||||||
Amortization of intangible assets | 20 | 22 | 59 | 63 | |||||||||||
Restructuring and severance costs | 26 | 43 | 73 | 54 | |||||||||||
Asset impairments | — | 188 | 5 | 189 | |||||||||||
Goodwill impairment | — | — | 50 | — | |||||||||||
(Gain) loss on operating assets, net | (4 | ) | (2 | ) | (8 | ) | (18 | ) | |||||||
Operating income (loss) | 51 | (167 | ) | (13 | ) | (120 | ) | ||||||||
Bargain purchase (gain) | — | — | — | (3 | ) | ||||||||||
Interest expense, net | 16 | 16 | 50 | 51 | |||||||||||
Other (income) expense, net | 6 | 2 | 10 | 9 | |||||||||||
Income (loss) before income taxes | 29 | (185 | ) | (73 | ) | (177 | ) | ||||||||
Income tax provision (benefit) | 16 | (73 | ) | (14 | ) | (73 | ) | ||||||||
Net income (loss) | 13 | (112 | ) | (59 | ) | (104 | ) | ||||||||
Less: Net income (loss) attributable to noncontrolling interests | — | — | — | — | |||||||||||
Net income (loss) attributable to Time Inc. | $ | 13 | $ | (112 | ) | $ | (59 | ) | $ | (104 | ) | ||||
Per share information attributable to Time Inc. common stockholders: | |||||||||||||||
Basic net income (loss) per common share | $ | 0.14 | $ | (1.13 | ) | $ | (0.59 | ) | $ | (1.05 | ) | ||||
Weighted average basic common shares outstanding | 99.86 | 99.64 | 99.74 | 99.43 | |||||||||||
Diluted net income (loss) per common share | $ | 0.14 | $ | (1.13 | ) | $ | (0.59 | ) | $ | (1.05 | ) | ||||
Weighted average diluted common shares outstanding | 100.12 | 99.64 | 99.74 | 99.43 | |||||||||||
Cash dividends declared per share of common stock | $ | 0.04 | $ | 0.19 | $ | 0.27 | $ | 0.57 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income (loss) | $ | 13 | $ | (112 | ) | $ | (59 | ) | $ | (104 | ) | ||||
Other comprehensive income (loss), net of tax | |||||||||||||||
Unrealized foreign currency translation gains (losses) | 11 | (10 | ) | 35 | (53 | ) | |||||||||
Benefit obligations | |||||||||||||||
Unrealized gains (losses) occurring during the period | (8 | ) | 4 | (24 | ) | 21 | |||||||||
Reclassification adjustment for (gains) losses realized in net income (loss) | 1 | 1 | 4 | 3 | |||||||||||
Net benefit obligations | (7 | ) | 5 | (20 | ) | 24 | |||||||||
Other comprehensive income (loss) | 4 | (5 | ) | 15 | (29 | ) | |||||||||
Comprehensive income (loss) | 17 | (117 | ) | (44 | ) | (133 | ) | ||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests | — | — | — | — | |||||||||||
Comprehensive income (loss) attributable to Time Inc. | $ | 17 | $ | (117 | ) | $ | (44 | ) | $ | (133 | ) |
Nine Months Ended September 30, 2017 | |||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss, Net | Total Stockholders' Equity | |||||||||||||||
Balance as of December 31, 2016 | $ | 1 | $ | 12,548 | $ | (10,732 | ) | $ | (377 | ) | $ | 1,440 | |||||||
Net income (loss) | — | — | (59 | ) | — | (59 | ) | ||||||||||||
Other comprehensive income (loss) | — | — | — | 15 | 15 | ||||||||||||||
Dividends declared | — | (27 | ) | — | — | (27 | ) | ||||||||||||
Equity-based compensation, net of withholding taxes | — | 10 | — | — | 10 | ||||||||||||||
Balance as of September 30, 2017 | $ | 1 | $ | 12,531 | $ | (10,791 | ) | $ | (362 | ) | $ | 1,379 |
Nine Months Ended September 30, 2016 | |||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss, Net | Total Stockholders' Equity | |||||||||||||||
Balance as of December 31, 2015 | $ | 1 | $ | 12,604 | $ | (10,570 | ) | $ | (226 | ) | $ | 1,809 | |||||||
Net income (loss) | — | — | (104 | ) | — | (104 | ) | ||||||||||||
Other comprehensive income (loss) | — | — | — | (29 | ) | (29 | ) | ||||||||||||
Dividends declared | — | (58 | ) | — | — | (58 | ) | ||||||||||||
Purchase of common stock | — | — | (109 | ) | — | (109 | ) | ||||||||||||
Equity-based compensation, net of withholding taxes | — | 12 | — | — | 12 | ||||||||||||||
Balance as of September 30, 2016 | $ | 1 | $ | 12,558 | $ | (10,783 | ) | $ | (255 | ) | $ | 1,521 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
OPERATING ACTIVITIES | |||||||
Net income (loss) | $ | (59 | ) | $ | (104 | ) | |
Adjustments to reconcile Net income (loss) to Cash provided by (used in) operations | |||||||
Depreciation and amortization | 101 | 104 | |||||
Amortization of deferred financing costs and discounts on indebtedness | 3 | 4 | |||||
Asset impairments | 5 | 189 | |||||
Goodwill impairment | 50 | — | |||||
(Gain) loss on sale of operating assets | (1 | ) | (11 | ) | |||
(Gain) loss on repurchases of 5.75% Senior Notes | — | (4 | ) | ||||
Amortization of deferred gain on sale-leaseback | (6 | ) | (7 | ) | |||
Bargain purchase (gain) | — | (3 | ) | ||||
(Income) loss on equity-method investments | 3 | 12 | |||||
Cost-method investment impairment | 4 | — | |||||
Equity-based compensation expense | 18 | 21 | |||||
Deferred income taxes | (26 | ) | (77 | ) | |||
Changes in operating assets and liabilities | |||||||
Receivables | 161 | 75 | |||||
Inventories | 2 | (4 | ) | ||||
Prepaid expenses and other assets | (18 | ) | 15 | ||||
Accounts payable and other liabilities | (107 | ) | (110 | ) | |||
Other, net | 9 | 6 | |||||
Cash provided by (used in) operations | 139 | 106 | |||||
INVESTING ACTIVITIES | |||||||
Acquisitions, net of cash acquired | (22 | ) | (192 | ) | |||
(Investments in) dispositions of cost and equity-method investments | (3 | ) | (19 | ) | |||
Proceeds from (payments for) dispositions | (4 | ) | 29 | ||||
Purchases of short-term investments | — | (60 | ) | ||||
Maturities of short-term investments | 40 | 60 | |||||
Capital expenditures | (56 | ) | (78 | ) | |||
Issuances of notes receivable | (2 | ) | (16 | ) | |||
Repayments of notes receivable | 1 | — | |||||
Cash provided by (used in) investing activities | (46 | ) | (276 | ) | |||
FINANCING ACTIVITIES | |||||||
Purchase of common stock | — | (111 | ) | ||||
Repurchase of 5.75% Senior Notes | — | (45 | ) | ||||
Principal payments on Term Loan | (20 | ) | (5 | ) | |||
Withholding taxes paid on equity-based compensation | (8 | ) | (8 | ) | |||
Dividends paid | (27 | ) | (58 | ) | |||
Contingent/deferred consideration payments | (3 | ) | (2 | ) | |||
Cash provided by (used in) financing activities | (58 | ) | (229 | ) | |||
Effect of exchange rate changes on Cash and cash equivalents | 1 | (8 | ) | ||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 36 | (407 | ) | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 296 | 651 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 332 | $ | 244 |
September 30, 2017 | December 31, 2016 | ||||||
Short-term investments(a) | $ | — | $ | 40 | |||
Equity-method investments(b) | 7 | 9 | |||||
Cost-method investments(c) | 4 | 6 | |||||
Total | $ | 11 | $ | 55 |
(a) | Our Short-term investments consist of term deposits with original maturities greater than three months and remaining maturities of less than one year. Our term deposits are carried at amortized cost on the accompanying Balance Sheets as held-to-maturity securities. Cost approximates fair value due to the short-term nature of the term deposits. |
(b) | Our Equity-method investments consist primarily of joint ventures. During the three and nine months ended September 30, 2017, we recorded equity losses of $1 million and $3 million, respectively. During the three and nine months ended September 30, 2016, we recognized equity losses of $1 million and $12 million, respectively, related primarily to resuming applying the equity-method after providing additional financial support to certain equity-method investees. |
(c) | During the nine months ended September 30, 2017, we made a $2 million investment in a privately-held transaction marketing technology company. During the nine months ended September 30, 2016, we made a $3 million investment in a privately-held e-commerce subscription company. We use available qualitative and quantitative information to evaluate all Cost-method investments for impairment at least quarterly. |
September 30, 2017 | December 31, 2016 | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Cash and cash equivalents - Money market funds | $ | 247 | $ | — | $ | — | $ | 247 | $ | 102 | $ | — | $ | — | $ | 102 | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Put option liability(a) | — | — | (10 | ) | (10 | ) | — | — | (10 | ) | (10 | ) | |||||||||||||||||||
Contingent consideration(b) | — | — | (1 | ) | (1 | ) | — | — | (2 | ) | (2 | ) | |||||||||||||||||||
Other - liabilities(c) | — | — | (3 | ) | (3 | ) | — | — | (2 | ) | (2 | ) | |||||||||||||||||||
Total | $ | 247 | $ | — | $ | (14 | ) | $ | 233 | $ | 102 | $ | — | $ | (14 | ) | $ | 88 |
(a) | Our Put option liability, included within Other noncurrent liabilities, relates to an equity-method investment, the fair value of which was derived using a lattice model for which we used unobservable inputs that are classified as Level 3 under the fair value hierarchy. Adjustments to the fair value of this obligation are included as a component of Other (income) expense, net in the Statements of Operations. |
(b) | Contingent consideration consists of earn-out liabilities in connection with acquisitions. At September 30, 2017, $1 million is included in Accounts payable and accrued liabilities. At December 31, 2016, $1 million is included in Accounts payable and accrued liabilities and $1 million in Other noncurrent liabilities. Fair values were derived using a Monte Carlo simulation approach or a probability weighted present value of expected future payouts approach, for which we used unobservable inputs that are classified as Level 3 under the fair value hierarchy. Adjustments to the fair value of such obligations are included as a component of Selling, general and administrative expenses in the Statements of Operations. Such contingent considerations are based primarily on financial targets and other operational metrics. |
(c) | Our other liabilities, included within Other noncurrent liabilities, relate primarily to a lease guarantee. The fair value of the lease guarantee was derived using a probability weighted present value of expected future payments approach, for which we used unobservable inputs that are classified as Level 3 under the fair value hierarchy. Adjustments to the fair value of such obligations are included as a component of Selling, general and administrative expenses in the Statements of Operations. |
2017 | 2016 | ||||||
Beginning Balance as of January 1 | $ | 14 | $ | 19 | |||
Issuances | 2 | 2 | |||||
Settlements | (2 | ) | (1 | ) | |||
Fair value adjustments | — | (3 | ) | ||||
Foreign exchange movements | — | (2 | ) | ||||
Other adjustments | — | (2 | ) | ||||
Ending Balance as of September 30 | $ | 14 | $ | 13 |
September 30, 2017 | December 31, 2016 | ||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||
Debt instruments | |||||||||||||||
Term Loan | $ | 654 | $ | 664 | $ | 672 | $ | 687 | |||||||
5.75% Senior Notes | 569 | 586 | 568 | 597 | |||||||||||
$ | 1,223 | $ | 1,250 | $ | 1,240 | $ | 1,284 |
September 30, 2017 | December 31, 2016 | ||||||
5.75% Senior Notes | $ | 575 | $ | 575 | |||
Senior Credit Facilities | |||||||
Term Loan | 662 | 682 | |||||
Unamortized discount and deferred financing costs | (14 | ) | (17 | ) | |||
Total debt obligations | 1,223 | 1,240 | |||||
Less: Current portion of long-term debt | 7 | 7 | |||||
Long-term debt | $ | 1,216 | $ | 1,233 |
Three Months Ended September 30, 2017 | Nine Months Ended September 30, 2017 | ||||||||||||||||||||||
Pre-tax | Tax (Provision) Benefit | Net of Tax | Pre-tax | Tax (Provision) Benefit | Net of Tax | ||||||||||||||||||
Unrealized foreign currency translation gains (losses) | $ | 11 | $ | — | $ | 11 | $ | 35 | $ | — | $ | 35 | |||||||||||
Unrealized gains (losses) on pension benefit obligations | (10 | ) | 2 | (8 | ) | (29 | ) | 5 | (24 | ) | |||||||||||||
Reclassification adjustment for (gains) losses on pension benefit obligations realized in Net income (loss) attributable to Time Inc.(a) | 2 | (1 | ) | 1 | 5 | (1 | ) | 4 | |||||||||||||||
Other comprehensive income (loss) | $ | 3 | $ | 1 | $ | 4 | $ | 11 | $ | 4 | $ | 15 |
Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2016 | ||||||||||||||||||||||
Pre-tax | Tax (Provision) Benefit | Net of Tax | Pre-tax | Tax (Provision) Benefit | Net of Tax | ||||||||||||||||||
Unrealized foreign currency translation gains (losses) | $ | (10 | ) | $ | — | $ | (10 | ) | $ | (53 | ) | $ | — | $ | (53 | ) | |||||||
Unrealized gains (losses) on pension benefit obligations | 5 | (1 | ) | 4 | 26 | (5 | ) | 21 | |||||||||||||||
Reclassification adjustment for (gains) losses on pension benefit obligations realized in Net income (loss) attributable to Time Inc.(a) | 1 | — | 1 | 3 | — | 3 | |||||||||||||||||
Other comprehensive income (loss) | $ | (4 | ) | $ | (1 | ) | $ | (5 | ) | $ | (24 | ) | $ | (5 | ) | $ | (29 | ) |
(a) | Included within Selling, general and administrative expenses on the accompanying Statements of Operations. |
Balance, December 31, 2016(a) | $ | 2,069 | |
Acquisitions(b) | 13 | ||
Impairments(c) | (50 | ) | |
Foreign exchange movements | 16 | ||
Balance, September 30, 2017(a) | $ | 2,048 |
(a) | The carrying amount of Goodwill presented was net of accumulated impairments of $16 billion as of both September 30, 2017 and December 31, 2016. |
(b) | Relates to 2017 acquisitions. See Note 2, "Acquisitions and Dispositions." |
(c) | Goodwill impairment of $50 million during the nine months ended September 30, 2017 related to INVNT and SI Play. |
September 30, 2017 | |||||||||||||
Weighted Average Useful Life (in years) | Gross | Accumulated Amortization | Net | ||||||||||
Tradenames | 19 | $ | 1,086 | $ | (368 | ) | $ | 718 | |||||
Customer lists and other intangible assets(a) | 6 | 671 | (590 | ) | 81 | ||||||||
$ | 1,757 | $ | (958 | ) | $ | 799 |
December 31, 2016 | |||||||||||||
Weighted Average Useful Life (in years) | Gross | Accumulated Amortization | Net | ||||||||||
Tradenames | 18 | $ | 1,084 | $ | (324 | ) | $ | 760 | |||||
Customer lists and other intangible assets(a) | 6 | 659 | (573 | ) | 86 | ||||||||
$ | 1,743 | $ | (897 | ) | $ | 846 |
(a) | As of September 30, 2017, other intangible assets included capitalized software of $53 million, with accumulated amortization of $23 million. As of December 31, 2016 other intangible assets included capitalized software of $48 million, with accumulated amortization of $15 million. These other intangible assets are amortized over their useful lives of three to seven years. |
Remainder of 2017 | $ | 19 | |
2018 | 76 | ||
2019 | 73 | ||
2020 | 69 | ||
2021 | 66 | ||
2022 | 65 | ||
Thereafter | 431 | ||
Total | $ | 799 |
Three Months Ended September 30, | |||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||
Net income (loss) | Shares | Per share amount | Net income (loss) | Shares | Per share amount | ||||||||||||||||
Basic Net Income (Loss) per Common Share | |||||||||||||||||||||
Net income (loss) attributable to Time Inc. | $ | 13.53 | $ | (112.40 | ) | ||||||||||||||||
Less net income associated with participating securities | — | — | |||||||||||||||||||
Basic net income (loss) per common share | $ | 13.53 | 99.86 | $ | 0.14 | $ | (112.40 | ) | 99.64 | $ | (1.13 | ) | |||||||||
Diluted Net Income (Loss) per Common Share | |||||||||||||||||||||
Net income (loss) attributable to Time Inc. | $ | 13.53 | $ | (112.40 | ) | ||||||||||||||||
Less net income associated with participating securities | — | — | |||||||||||||||||||
Effect of dilutive securities | — | 0.26 | — | — | |||||||||||||||||
Diluted net income (loss) per common share | $ | 13.53 | 100.12 | $ | 0.14 | $ | (112.40 | ) | 99.64 | $ | (1.13 | ) |
Nine Months Ended September 30, | |||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||
Net income (loss) | Shares | Per share amount | Net income (loss) | Shares | Per share amount | ||||||||||||||||
Basic Net Income (Loss) per Common Share | |||||||||||||||||||||
Net income (loss) attributable to Time Inc. | $ | (58.50 | ) | $ | (104.39 | ) | |||||||||||||||
Less net income associated with participating securities | — | — | |||||||||||||||||||
Basic net income (loss) per common share | $ | (58.50 | ) | 99.74 | $ | (0.59 | ) | $ | (104.39 | ) | 99.43 | $ | (1.05 | ) | |||||||
Diluted Net Income (Loss) per Common Share | |||||||||||||||||||||
Net income (loss) attributable to Time Inc. | $ | (58.50 | ) | $ | (104.39 | ) | |||||||||||||||
Less net income associated with participating securities | — | — | |||||||||||||||||||
Effect of dilutive securities | — | — | — | — | |||||||||||||||||
Diluted net income (loss) per common share | $ | (58.50 | ) | 99.74 | $ | (0.59 | ) | $ | (104.39 | ) | 99.43 | $ | (1.05 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||
Anti-dilutive equity awards | 8 | 9 | 9 | 8 |
Nine Months Ended September 30, 2017 | |||
Expected volatility | 26.81 | % | |
Expected term to exercise from grant date (in years) | 2.63 | ||
Risk-free rate | 1.51 | % | |
Expected dividend yield | 1.20 | % | |
Weighted-average grant date fair value per option | $ | 2.42 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Number Granted | |||||||
RSUs | 1 | 2 | |||||
Stock options | — | 3 | |||||
Performance options | 1 | N/A | |||||
Outperformance plan performance stock units | — | 1 | |||||
Weighted Average Grant Date Fair Value | |||||||
RSUs | $ | 17.19 | $ | 12.84 | |||
Stock options | N/A | $ | 14.42 | ||||
Performance options | $ | 14.20 | N/A | ||||
Outperformance plan performance stock units | N/A | $ | 8.09 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
RSUs | $ | 4 | $ | 4 | $ | 12 | $ | 16 | |||||||
Stock options | 1 | 1 | 2 | 4 | |||||||||||
Other | 2 | — | 4 | — | |||||||||||
Total expense included in Operating income (loss) | $ | 7 | $ | 5 | $ | 18 | $ | 20 | |||||||
Income tax benefit recognized | $ | 2 | $ | 1 | $ | 5 | $ | 5 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Interest cost | $ | 5 | $ | 4 | $ | 14 | $ | 16 | |||||||
Expected return on plan assets | (12 | ) | (10 | ) | (34 | ) | (34 | ) | |||||||
Amortization of net loss | 2 | 1 | 5 | 3 | |||||||||||
Net periodic benefit cost (income) | $ | (5 | ) | $ | (5 | ) | $ | (15 | ) | $ | (15 | ) |
Employee Terminations | Other Exit Costs | Total | |||||||||
Remaining liability as of December 31, 2016 | $ | 70 | $ | 28 | $ | 98 | |||||
Net accruals | 68 | 5 | 73 | ||||||||
Non-cash adjustments(a) | (2 | ) | 1 | (1 | ) | ||||||
Cash paid | (69 | ) | (21 | ) | (90 | ) | |||||
Remaining liability as of September 30, 2017 | $ | 67 | $ | 13 | $ | 80 |
(a) | Non-cash adjustments relate primarily to the effect of foreign exchange rate changes. |
September 30, 2017 | December 31, 2016 | ||||||
Inventories, net of reserves: | |||||||
Raw materials - paper | $ | 27 | $ | 30 | |||
Finished goods | 2 | 1 | |||||
Total inventories, net of reserves | $ | 29 | $ | 31 |
September 30, 2017 | December 31, 2016 | ||||||
Prepaid expenses and other current assets: | |||||||
Prepaid production costs | $ | 24 | $ | 20 | |||
Prepaid commissions | 17 | 18 | |||||
Postage deposit | 15 | 12 | |||||
Prepaid income taxes | 7 | 6 | |||||
Due from Time Warner | — | 3 | |||||
Other prepaid expenses and other current assets | 62 | 51 | |||||
Total prepaid expenses and other current assets | $ | 125 | $ | 110 |
September 30, 2017 | December 31, 2016 | ||||||
Other assets: | |||||||
Deferred tax assets | $ | 19 | $ | 19 | |||
Notes receivable(a) | 11 | 10 | |||||
Equity-method investments | 7 | 9 | |||||
Other tax asset | 6 | 6 | |||||
Cost-method investments | 4 | 6 | |||||
Display racks | 4 | 4 | |||||
Other noncurrent assets | 14 | 12 | |||||
Total other assets | $ | 65 | $ | 66 |
September 30, 2017 | December 31, 2016 | ||||||
Accounts payable and accrued liabilities: | |||||||
Accounts payable | $ | 201 | $ | 232 | |||
Accrued compensation | 106 | 126 | |||||
Restructuring and severance | 69 | 89 | |||||
Rebates and allowances | 47 | 43 | |||||
Distribution expenses payable | 25 | 28 | |||||
Liability to Time Warner | 25 | 24 | |||||
Accrued other taxes | 19 | 18 | |||||
Accrued interest | 15 | 7 | |||||
Deferred gain(b) | 9 | 8 | |||||
Barter liabilities | 5 | 4 | |||||
Contingent consideration | 1 | 1 | |||||
Other current liabilities | 13 | 18 | |||||
Total accounts payable and accrued liabilities | $ | 535 | $ | 598 |
September 30, 2017 | December 31, 2016 | ||||||
Other noncurrent liabilities: | |||||||
Deferred rent | $ | 137 | $ | 112 | |||
Deferred gain(b) | 64 | 64 | |||||
Noncurrent tax reserves and interest | 48 | 38 | |||||
Noncurrent deferred compensation | 26 | 28 | |||||
Noncurrent pension and postretirement liabilities(c) | 15 | 44 | |||||
Restructuring and severance | 11 | 9 | |||||
Put option liability | 10 | 10 | |||||
Liability to Time Warner | 1 | 1 | |||||
Contingent consideration | — | 1 | |||||
Other noncurrent liabilities | 21 | 21 | |||||
Total other noncurrent liabilities | $ | 333 | $ | 328 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Other (income) expense, net: | |||||||||||||||
Investment (gains) losses, net | $ | 2 | $ | 1 | $ | 4 | $ | 1 | |||||||
(Income) loss on equity-method investments | 1 | 1 | 3 | 12 | |||||||||||
(Gain) loss on extinguishment of debt | — | — | — | (4 | ) | ||||||||||
Other (income) expense | 3 | — | 3 | — | |||||||||||
Total other (income) expense, net | $ | 6 | $ | 2 | $ | 10 | $ | 9 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Cash Flows: | |||||||
Cash payments made for income taxes | $ | 8 | $ | 2 | |||
Income tax refund received | (4 | ) | (58 | ) | |||
Cash tax (receipts) payments, net | $ | 4 | $ | (56 | ) | ||
Cash payments made for interest | $ | 40 | $ | 41 | |||
Interest income received | (2 | ) | (1 | ) | |||
Cash interest (receipts) payments, net | $ | 38 | $ | 40 |
(a) | Notes receivable relates primarily to a loan we provided of £10 million to a printing vendor for our U.K. operations to assist in financing its purchase of the printing facilities of our former printing vendor in June 2016. The loan was provided in order to maintain continuity in printing operations for our U.K. business. The interest rate on the loan is 8% per annum and has a term of five years with principal repayments of £0.3 million per quarter and £5 million at the end of the five year term. As of September 30, 2017, for the UK Notes receivable, $1 million is in Prepaid expenses and other current assets and $10 million is in Other assets. |
(b) | The Deferred gain related to the sale-leaseback of the Blue Fin Building that was completed in the fourth quarter of 2015 and will be recognized ratably over the lease term through 2025. |
(c) | See Note 11, "Benefit Plans," for more information on Noncurrent pension and postretirement liabilities. |
• | Continuing to grow our digital audiences and digital advertising revenues through growth in native and branded content, targeting and programmatic, and video solutions; |
• | Innovating how we produce, market and distribute our print products, and re-engineer our operations in order to sustain this important source of cash flows; |
• | Expanding our distribution and diversifying our sources of revenue by extending our brands and content across a number of platforms and media including television, OTT, events, licensing, international and strategic partnerships; |
• | Enriching and utilizing the power of our proprietary first-party data for direct to consumer marketing, targeted advertising, product development and editorial; |
• | Launching new primarily digitally-transacted paid products and services, leveraging our significant consumer relationships and marketing engine; |
• | Pursuing selective rationalization of our brand portfolio, the potential sale of non-core assets and joint venture opportunities; |
• | Executing on our strategic transformation program with the majority of initiatives expected to be implemented in the first 18 months after the program launch, targeting estimated annual cost savings of more than $400 million and margin expansion; and |
• | Utilizing a portion of the savings to reinvest in our key growth areas. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Restructuring and severance costs | $ | 26 | $ | 43 | $ | 73 | $ | 54 | |||||||
Asset impairments | — | 188 | 5 | 189 | |||||||||||
Goodwill impairment | — | — | 50 | — | |||||||||||
(Gain) loss on operating assets, net | (4 | ) | (2 | ) | (8 | ) | (18 | ) | |||||||
Other costs | 8 | 2 | 18 | 23 | |||||||||||
Impact on Operating income (loss) | 30 | 231 | 138 | 248 | |||||||||||
Bargain purchase (gain) | — | — | — | (3 | ) | ||||||||||
(Gain) loss on extinguishment of debt | — | — | — | (4 | ) | ||||||||||
Cost-method investment impairment | 4 | — | 4 | — | |||||||||||
Income tax impact of above items | (10 | ) | (86 | ) | (51 | ) | (93 | ) | |||||||
Impact on Net income (loss) attributable to Time Inc. from items affecting comparability | $ | 24 | $ | 145 | $ | 91 | $ | 148 |
• | Equity-Method Losses: We had suspended recognizing equity losses for certain equity-method investments as our investee losses were in excess of the investments' carrying amounts. During the nine months ended September 30. 2017, we provided additional financial support to an equity-method investee and recognized $1 million in equity losses related to this funding. During the three and nine months ended September 30, 2016, we provided additional financial support to certain equity-method investments and recognized $1 million and $12 million, respectively, in equity losses related to these transactions. |
Three Months Ended September 30, | ||||||||||
2017 | 2016 | % Change | ||||||||
Revenues | $ | 679 | $ | 750 | (9 | %) | ||||
Operating expenses | 628 | 917 | (32 | %) | ||||||
Operating income (loss) | 51 | (167 | ) | NM | ||||||
Interest expense, net | 16 | 16 | — | % | ||||||
Other (income) expense, net | 6 | 2 | NM | |||||||
Income tax provision (benefit) | 16 | (73 | ) | NM | ||||||
Net income (loss) | $ | 13 | $ | (112 | ) | NM |
Three Months Ended September 30, | ||||||||||
2017 | 2016 | % Change | ||||||||
Revenues | ||||||||||
Advertising | ||||||||||
Print and other advertising | $ | 237 | $ | 288 | (18 | %) | ||||
Digital advertising | 132 | 129 | 2 | % | ||||||
Total advertising revenues | 369 | 417 | (12 | %) | ||||||
Circulation | 197 | 223 | (12 | %) | ||||||
Other | 113 | 110 | 3 | % | ||||||
Total revenues | $ | 679 | $ | 750 | (9 | %) |
Three Months Ended September 30, | |||||
2017 | 2016 | ||||
Revenues | |||||
Advertising | 54 | % | 56 | % | |
Circulation | 29 | % | 30 | % | |
Other | 17 | % | 14 | % | |
Total revenues | 100 | % | 100 | % |
Three Months Ended September 30, | ||||||||||
2017 | 2016 | % Change | ||||||||
Circulation | ||||||||||
Subscription | $ | 135 | $ | 148 | (9 | %) | ||||
Newsstand | 55 | 68 | (19 | %) | ||||||
Other circulation | 7 | 7 | — | % | ||||||
Total circulation revenues | $ | 197 | $ | 223 | (12 | %) |
Three Months Ended September 30, | ||||||||||
2017 | 2016 | % Change | ||||||||
Sources of Revenues | ||||||||||
Magazines | $ | 433 | $ | 506 | (14 | )% | ||||
Digital | 165 | 160 | 3 | % | ||||||
Brand Extensions & Other | 81 | 84 | (4 | )% | ||||||
Total revenues | $ | 679 | $ | 750 | (9 | )% |
Three Months Ended September 30, | ||||||||||
2017 | 2016 | % Change | ||||||||
Operating expenses | ||||||||||
Costs of revenues | ||||||||||
Production costs | $ | 141 | $ | 154 | (8 | %) | ||||
Editorial costs | 78 | 101 | (23 | %) | ||||||
Other | 60 | 71 | (15 | %) | ||||||
Total costs of revenues(a) | 279 | 326 | (14 | %) | ||||||
Selling, general and administrative expenses(a) | 293 | 326 | (10 | %) | ||||||
Amortization of intangible assets | 20 | 22 | (9 | %) | ||||||
Depreciation | 14 | 14 | — | % | ||||||
Restructuring and severance costs | 26 | 43 | (40 | %) | ||||||
Asset impairments | — | 188 | (100 | %) | ||||||
(Gain) loss on operating assets, net | (4 | ) | (2 | ) | 100 | % | ||||
Operating expenses | $ | 628 | $ | 917 | (32 | %) |
(a) | Costs of revenues and Selling, general and administrative expenses set forth above exclude depreciation. |
Nine Months Ended September 30, | ||||||||||
2017 | 2016 | % Change | ||||||||
Revenues | $ | 2,009 | $ | 2,209 | (9 | %) | ||||
Operating expenses | 2,022 | 2,329 | (13 | %) | ||||||
Operating income (loss) | (13 | ) | (120 | ) | 89 | % | ||||
Bargain purchase (gain) | — | (3 | ) | (100 | %) | |||||
Interest expense, net | 50 | 51 | (2 | %) | ||||||
Other (income) expense, net | 10 | 9 | 11 | % | ||||||
Income tax provision (benefit) | (14 | ) | (73 | ) | (81 | %) | ||||
Net income (loss) | $ | (59 | ) | $ | (104 | ) | 43 | % |
Nine Months Ended September 30, | ||||||||||
2017 | 2016 | % Change | ||||||||
Revenues | ||||||||||
Advertising | ||||||||||
Print and other advertising | $ | 698 | $ | 857 | (19 | %) | ||||
Digital advertising | 376 | 346 | 9 | % | ||||||
Total advertising revenues | 1,074 | 1,203 | (11 | %) | ||||||
Circulation | 609 | 697 | (13 | %) | ||||||
Other | 326 | 309 | 6 | % | ||||||
Total revenues | $ | 2,009 | $ | 2,209 | (9 | %) |
Nine Months Ended September 30, | |||||
2017 | 2016 | ||||
Revenues | |||||
Advertising | 53 | % | 54 | % | |
Circulation | 30 | % | 32 | % | |
Other | 17 | % | 14 | % | |
Total revenues | 100 | % | 100 | % |
Nine Months Ended September 30, | ||||||||||
2017 | 2016 | % Change | ||||||||
Circulation | ||||||||||
Subscription | $ | 416 | $ | 463 | (10 | %) | ||||
Newsstand | 169 | 210 | (20 | %) | ||||||
Other circulation | 24 | 24 | — | % | ||||||
Total circulation revenues | $ | 609 | $ | 697 | (13 | %) |
Nine Months Ended September 30, | ||||||||||
2017 | 2016 | % Change | ||||||||
Sources of Revenues | ||||||||||
Magazines | $ | 1,300 | $ | 1,560 | (17 | )% | ||||
Digital | 480 | 429 | 12 | % | ||||||
Brand Extensions & Other | 229 | 220 | 4 | % | ||||||
Total revenues | $ | 2,009 | $ | 2,209 | (9 | )% |
Nine Months Ended September 30, | ||||||||||
2017 | 2016 | % Change | ||||||||
Operating expenses | ||||||||||
Costs of revenues | ||||||||||
Production costs | $ | 422 | $ | 478 | (12 | %) | ||||
Editorial costs | 243 | 289 | (16 | %) | ||||||
Other | 198 | 185 | 7 | % | ||||||
Total costs of revenues(a) | 863 | 952 | (9 | %) | ||||||
Selling, general and administrative expenses(a) | 938 | 1,048 | (10 | %) | ||||||
Amortization of intangible assets | 59 | 63 | (6 | %) | ||||||
Depreciation | 42 | 41 | 2 | % | ||||||
Restructuring and severance costs | 73 | 54 | 35 | % | ||||||
Asset impairments | 5 | 189 | (97 | %) | ||||||
Goodwill impairment | 50 | — | NM | |||||||
(Gain) loss on operating assets, net | (8 | ) | (18 | ) | (56 | %) | ||||
Operating expenses | $ | 2,022 | $ | 2,329 | (13 | %) |
(a) | Costs of revenues and Selling, general and administrative expenses set forth above exclude depreciation. |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Net income (loss) | $ | (59 | ) | $ | (104 | ) | |
Adjustments to reconcile Net income (loss) to Cash provided by (used in) operations | |||||||
Depreciation and amortization | 101 | 104 | |||||
Amortization of deferred financing costs and discounts on indebtedness | 3 | 4 | |||||
Asset impairments | 5 | 189 | |||||
Goodwill impairment | 50 | — | |||||
(Gain) loss on sale of operating assets | (1 | ) | (11 | ) | |||
(Gain) loss on repurchases of 5.75% Senior Notes | — | (4 | ) | ||||
Amortization of deferred gain on sale-leaseback | (6 | ) | (7 | ) | |||
Bargain purchase (gain) | — | (3 | ) | ||||
(Income) loss on equity-method investments | 3 | 12 | |||||
Cost-method investment impairment | 4 | — | |||||
Equity-based compensation expense | 18 | 21 | |||||
Deferred income taxes | (26 | ) | (77 | ) | |||
All other net, including working capital changes(a) | 47 | (18 | ) | ||||
Cash provided by (used in) operations | $ | 139 | $ | 106 |
(a) | Includes domestic net income tax paid of $2 million and received of $56 million for the nine months ended September 30, 2017 and 2016, respectively, and foreign net income taxes paid of $2 million and nil for the nine months ended September 30, 2017 and 2016, respectively. |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Acquisitions, net of cash acquired | $ | (22 | ) | $ | (192 | ) | |
(Investments in) dispositions of cost and equity-method investments | (3 | ) | (19 | ) | |||
Proceeds from (payments for) dispositions | (4 | ) | 29 | ||||
Purchases of short-term investments | — | (60 | ) | ||||
Maturities of short-term investments | 40 | 60 | |||||
Capital expenditures | (56 | ) | (78 | ) | |||
Issuances of notes receivable | (2 | ) | (16 | ) | |||
Repayments of notes receivable | 1 | — | |||||
Cash provided by (used in) investing activities | $ | (46 | ) | $ | (276 | ) |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Purchase of common stock | $ | — | $ | (111 | ) | ||
Repurchase of 5.75% Senior Notes | — | (45 | ) | ||||
Principal payments on Term Loan | (20 | ) | (5 | ) | |||
Withholding taxes paid on equity-based compensation | (8 | ) | (8 | ) | |||
Dividends paid | (27 | ) | (58 | ) | |||
Contingent/deferred consideration payments | (3 | ) | (2 | ) | |||
Cash provided by (used in) financing activities | $ | (58 | ) | $ | (229 | ) |
• | changes in and the execution of our plans, initiatives and strategies, including our strategic transformation program; |
• | recent and future changes in technology, including methods for the delivery of our content; |
• | changes in consumer behavior, including changes in spending behavior and changes in when, where and how content is consumed; |
• | our ability to develop or acquire technologies that enable us to serve changing consumer behaviors and support our evolving business needs; |
• | competitive pressures; |
• | our ability to deal effectively with economic slowdowns or other economic or market difficulties; |
• | possible disruptions in our retail distribution channels due to challenging conditions in the highly-concentrated wholesale magazine distribution industry, the financial instability of certain wholesalers and a reduction of retail outlets as a result of weak economic or industry conditions; |
• | increases in the price of paper or in postal rates and services or disruption of services from our suppliers including our printers; |
• | changes in advertising market conditions or advertising expenditures due to, among other things, economic conditions, changes in consumer behavior, changes in advertising standards or the implementation of technologies that interfere with advertisements, pressure from public interest groups, changes in laws and regulations and other societal or political developments; |
• | our ability to exploit and protect our intellectual property rights in and to our content and other products; |
• | lower than expected valuations associated with our cash flows and revenues, which could impair our ability to realize the value of recorded intangible assets and Goodwill; |
• | increased volatility or decreased liquidity in the capital markets, including any limitation on our ability to access the capital markets, refinance our outstanding indebtedness or obtain bank financing on acceptable terms; |
• | impacts on our pension obligations due to changes in equity markets, our credit rating, interest rates, actuarial assumptions and regulatory actions; |
• | the effect of any significant acquisitions, investments, dispositions and other similar transactions by us; |
• | the adequacy of our risk management framework; |
• | changes in GAAP or other applicable accounting policies; |
• | the impact of terrorist acts, hostilities, natural disasters (including extreme weather) and pandemic viruses; |
• | a disruption, breach (including misappropriation or accidental release of data) or failure of network and information systems or other technology on which our business relies (including the network and information systems or other technology of our vendors, partners and suppliers), or any delay in recovering from such, that occurs as a result of computer viruses, malware, hackers or similar causes, including possible loss of revenue due to cancellation of customers' credit cards on file for subscription auto-renewals resulting from credit card data breaches affecting us or third parties, and reputational harm that may result from any of these incidents; |
• | changes in tax and other laws and regulations affecting our domestic or international operations, including the impact of Brexit; |
• | changes in foreign exchange rates; |
• | the outcome of litigation and other proceedings, including the matters described in the notes to our Financial Statements, as well as possible regulatory actions and civil claims involving privacy issues related to consumer data collection and use practices; and |
• | the other risks and uncertainties detailed in Part I, Item 1A. "Risk Factors," in our 2016 Form 10-K. |
Exhibit No. | Description |
101.INS | XBRL: Instance Document** |
101.SCH | XBRL: Taxonomy Extension Schema Document** |
101.CAL | XBRL: Taxonomy Extension Calculation Linkbase Document** |
101.DEF | XBRL: Taxonomy Extension Definition Linkbase Document** |
101.LAB | XBRL: Taxonomy Extension Label Linkbase Document** |
101.PRE | XBRL: Taxonomy Extension Presentation Linkbase Document** |
TIME INC. (Registrant) | |
By: | /s/ Susana D'Emic |
Susana D'Emic | |
Executive Vice President and Chief Financial Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Time Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 9, 2017 | By: | /s/ RICHARD BATTISTA |
Richard Battista | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Time Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 9, 2017 | By: | /s/ Susana D'Emic |
Susana D'Emic | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer) |
Date: November 9, 2017 | By: | /s/ RICHARD BATTISTA |
Richard Battista | ||
President and Chief Executive Officer (Principal Executive Officer) |
Date: November 9, 2017 | By: | /s/ Susana D'Emic |
Susana D'Emic | ||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Nov. 03, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | TIME INC. | |
Entity Central Index Key | 0001591517 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 99,621,903 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Current assets | ||
Allowance for doubtful accounts receivable | $ 185 | $ 203 |
Stockholders' Equity | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock issued (in shares) | 99,610,000 | 98,950,000 |
Common stock outstanding (in shares) | 99,610,000 | 98,950,000 |
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock authorized (in shares) | 40,000,000 | 40,000,000 |
Preferred stock issued (in shares) | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Revenues | ||||
Advertising | $ 369,000 | $ 417,000 | $ 1,074,000 | $ 1,203,000 |
Circulation | 197,000 | 223,000 | 609,000 | 697,000 |
Other | 113,000 | 110,000 | 326,000 | 309,000 |
Total revenues | 679,000 | 750,000 | 2,009,000 | 2,209,000 |
Costs of revenues | 280,000 | 327,000 | 867,000 | 956,000 |
Selling, general and administrative expenses | 306,000 | 339,000 | 976,000 | 1,085,000 |
Amortization of intangible assets | 20,000 | 22,000 | 59,000 | 63,000 |
Restructuring and severance costs | 26,000 | 43,000 | 73,000 | 54,000 |
Asset impairments | 0 | 188,000 | 5,000 | 189,000 |
Goodwill impairment | 0 | 0 | 50,000 | 0 |
(Gain) loss on operating assets, net | (4,000) | (2,000) | (8,000) | (18,000) |
Operating income (loss) | 51,000 | (167,000) | (13,000) | (120,000) |
Bargain purchase (gain) | 0 | 0 | 0 | (3,000) |
Interest expense, net | 16,000 | 16,000 | 50,000 | 51,000 |
Other (income) expense, net | 6,000 | 2,000 | 10,000 | 9,000 |
Income (loss) before income taxes | 29,000 | (185,000) | (73,000) | (177,000) |
Income tax provision (benefit) | 16,000 | (73,000) | (14,000) | (73,000) |
Net income (loss) | 13,000 | (112,000) | (59,000) | (104,000) |
Less: Net income (loss) attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income (loss) attributable to Time Inc. | $ 13,000 | $ (112,400) | $ (59,000) | $ (104,390) |
Per share information attributable to Time Inc. common stockholders: | ||||
Basic (in dollars per share) | $ 0.14 | $ (1.13) | $ (0.59) | $ (1.05) |
Weighted average basic common shares outstanding | 99,860 | 99,640 | 99,740 | 99,430 |
Diluted (in dollars per share) | $ 0.14 | $ (1.13) | $ (0.59) | $ (1.05) |
Weighted average diluted common shares outstanding | 100,120 | 99,640 | 99,740 | 99,430 |
Cash dividends declared per share of common stock | $ 0.04 | $ 0.19 | $ 0.27 | $ 0.57 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|||
Statement of Comprehensive Income [Abstract] | ||||||
Net income (loss) | $ 13 | $ (112) | $ (59) | $ (104) | ||
Foreign currency translation | ||||||
Unrealized foreign currency translation gains (losses) | 11 | (10) | 35 | (53) | ||
Benefit obligations | ||||||
Unrealized gains (losses) occurring during the period | (8) | 4 | (24) | 21 | ||
Reclassification adjustment for (gains) losses realized in net income (loss) | [1] | 1 | 1 | 4 | 3 | |
Net benefit obligations | (7) | 5 | (20) | 24 | ||
Other comprehensive income (loss) | 4 | (5) | 15 | (29) | ||
Comprehensive income (loss) | 17 | (117) | (44) | (133) | ||
Less: Comprehensive income (loss) attributable to noncontrolling interests | 0 | 0 | 0 | 0 | ||
Comprehensive income (loss) attributable to Time Inc. | $ 17 | $ (117) | $ (44) | $ (133) | ||
|
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands |
Total |
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss, Net |
---|---|---|---|---|---|
Balance at beginning of period at Dec. 31, 2015 | $ 1,809,000 | $ 1,000 | $ 12,604,000 | $ (10,570,000) | $ (226,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (104,390) | (104,000) | |||
Other comprehensive income (loss) | (29,000) | (29,000) | |||
Dividends declared | (58,000) | (58,000) | |||
Purchase of common stock | (109,000) | (109,000) | |||
Equity-based compensation, net of withholding taxes | 12,000 | 12,000 | |||
Balance at end of period at Sep. 30, 2016 | 1,521,000 | 1,000 | 12,558,000 | (10,783,000) | (255,000) |
Balance at beginning of period at Dec. 31, 2016 | 1,440,000 | 1,000 | 12,548,000 | (10,732,000) | (377,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (59,000) | (59,000) | |||
Other comprehensive income (loss) | 15,000 | 15,000 | |||
Dividends declared | (27,000) | (27,000) | |||
Equity-based compensation, net of withholding taxes | 10,000 | 10,000 | |||
Balance at end of period at Sep. 30, 2017 | $ 1,379,000 | $ 1,000 | $ 12,531,000 | $ (10,791,000) | $ (362,000) |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
OPERATING ACTIVITIES | ||
Net income (loss) | $ (59) | $ (104) |
Adjustments to reconcile Net income (loss) to Cash provided by (used in) operations | ||
Depreciation and amortization | 101 | 104 |
Amortization of deferred financing costs and discounts on indebtedness | 3 | 4 |
Asset impairments | 5 | 189 |
Goodwill impairment | 50 | 0 |
(Gain) loss on sale of operating assets | (1) | (11) |
(Gain) loss on repurchases of 5.75% Senior Notes | 0 | (4) |
Amortization of deferred gain on sale-leaseback | (6) | (7) |
Bargain purchase (gain) | 0 | (3) |
(Income) loss on equity-method investments | 3 | 12 |
Cost-method investment impairment | 4 | 0 |
Equity-based compensation expense | 18 | 21 |
Deferred income taxes | (26) | (77) |
Changes in operating assets and liabilities | ||
Receivables | 161 | 75 |
Inventories | 2 | (4) |
Prepaid expenses and other assets | (18) | 15 |
Accounts payable and other liabilities | (107) | (110) |
Other, net | 9 | 6 |
Cash provided by (used in) operations | 139 | 106 |
INVESTING ACTIVITIES | ||
Acquisitions, net of cash acquired | (22) | (192) |
(Investments in) dispositions of cost and equity-method investments | (3) | (19) |
Proceeds from (payments for) dispositions | (4) | 29 |
Purchases of short-term investments | 0 | (60) |
Maturities of short-term investments | 40 | 60 |
Capital expenditures | (56) | (78) |
Issuances of notes receivable | (2) | (16) |
Proceeds from Collection of Notes Receivable | 1 | 0 |
Cash provided by (used in) investing activities | (46) | (276) |
FINANCING ACTIVITIES | ||
Purchase of common stock | 0 | (111) |
Repurchase of 5.75% Senior Notes | 0 | (45) |
Principal payments on Term Loan | (20) | (5) |
Withholding taxes paid on equity-based compensation | (8) | (8) |
Dividends paid | (27) | (58) |
Contingent/deferred consideration payments | (3) | (2) |
Cash provided by (used in) financing activities | (58) | (229) |
Effect of exchange rate changes on Cash and cash equivalents | 1 | (8) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 36 | (407) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 296 | 651 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 332 | $ 244 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) |
Sep. 30, 2017 |
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5.75% Senior Notes | |
Stated interest rate percentage | 5.75% |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business Time Inc., together with its subsidiaries (collectively, the "Company," "we," "us" or "our"), is a leading multi-platform consumer media company that engages over 230 million consumers globally every month. The Company's influential brands include PEOPLE, TIME, FORTUNE, SPORTS ILLUSTRATED, INSTYLE, REAL SIMPLE, SOUTHERN LIVING and TRAVEL + LEISURE, as well as approximately 60 diverse international brands. Time Inc. offers marketers a differentiated proposition in the marketplace by combining its powerful brands, trusted content, audience scale, direct relationships with consumers and unique first-party data. The Company is home to growing media platforms and extensions, including digital video, over the top content ("OTT"), television, licensing, international markets, paid products and services and celebrated live events, such as the TIME 100, FORTUNE Most Powerful Women, PEOPLE’s Sexiest Man Alive, SPORTS ILLUSTRATED’s Sportsperson of the Year, the ESSENCE Festival and the FOOD & WINE Classic in Aspen. Basis of Presentation The consolidated financial statements include the accounts of Time Inc. and all wholly-owned and majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. We reflect the noncontrolling interest in net income (loss) of our majority-owned subsidiaries in the consolidated statements of operations in Net income (loss) attributable to noncontrolling interests and the equity in noncontrolling interest in majority-owned subsidiaries in Equity attributable to noncontrolling interests included in Stockholders' equity on our consolidated balance sheets. The consolidated financial statements included herein (the “Financial Statements”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair presentation have been reflected in these Financial Statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The preparation of the Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the Financial Statements and accompanying disclosures. Actual results could differ from those estimates. The financial position and operating results of our foreign operations are consolidated using primarily the local currency as the functional currency. Local currency assets and liabilities are translated at the rates of exchange as of the balance sheet date, and local currency revenues and expenses are translated at average rates of exchange during the period. Translation gains or losses on assets and liabilities are included as a component of Accumulated other comprehensive loss, net. The consolidated balance sheets are referred to as the “Balance Sheets” herein. The consolidated statements of operations are referred to as the “Statements of Operations” herein. The consolidated statements of comprehensive income (loss) are referred to as the "Statements of Comprehensive Income (Loss)" herein. The consolidated statements of stockholders' equity are referred to as the "Statements of Stockholders' Equity" herein. The consolidated statements of cash flows are referred to as the “Statements of Cash Flows” herein. The accompanying Financial Statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the Securities and Exchange Commission (“SEC”) on February 27, 2017 and amended on April 28, 2017 (the “2016 Form 10-K”). Recent Accounting Guidance Accounting Guidance Adopted in 2017 In January 2017, guidance was issued which simplifies the test for goodwill impairment by eliminating Step 2, the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The amendments in this guidance are effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted. We early adopted this guidance on January 1, 2017. The adoption of this guidance did not have a material impact on our Financial Statements upon adoption, but could have a material impact if an impairment is identified in connection with our goodwill impairment tests. In the second quarter of 2017, we performed an interim test of Goodwill, see Note 8, "Goodwill and Intangible Assets" to the accompanying Financial Statements. In March 2016, guidance was issued which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification in the statement of cash flows. The updated guidance requires excess tax benefits and deficiencies from share-based payment awards to be recorded in income tax expense in the income statement. Under the previous guidance, excess tax benefits and deficiencies have been recognized in Additional paid-in capital on the balance sheet. In addition, the updated guidance modifies the classification of certain share-based payment activities within the statement of cash flows and these changes are required to be applied retrospectively to all periods presented. The updated guidance may add volatility to the Company’s income tax expense in future periods depending upon, among other things, the level of tax expense and the price of our common stock at the date of vesting for share-based awards. We adopted this guidance on January 1, 2017 and it did not have a material impact on our Financial Statements. In July 2015, guidance was issued that simplifies the measurement of inventory by requiring certain inventory to be subsequently measured at the lower of cost and net realizable value. We adopted this guidance on January 1, 2017. The adoption of this guidance did not have a material impact on our Financial Statements. Accounting Guidance Not Yet Adopted In March 2017, guidance was issued that will change how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the income statement. Employers will present the service cost component of net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in assets. Employers will present the other components of the net periodic benefit cost separately from the line item(s) that includes the service cost and outside of any subtotal of operating income, if one is presented. The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein. Upon adoption, our net periodic benefit cost (income), other than service costs, which has historically been included in Operating income (loss) in our Statements of Operations will be presented below Operating income (loss) in our Statements of Operations. The net periodic benefit cost (income) classified within Operating income (loss) was $15 million and $19 million of income for the nine months ended September 30, 2017 and the year ended December 31, 2016, respectively. We will adopt this guidance on a retrospective basis on January 1, 2018. In January 2017, guidance was issued that changes the definition of a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set of assets is not deemed to be a business. If the threshold is not met, the entity then evaluates whether the set of assets meets the requirement to be deemed a business, which at a minimum, requires there to be an input and a substantive process that together significantly contribute to the ability to create outputs. This guidance will become effective on a prospective basis for us on January 1, 2018, and it is not expected to have a material impact on our Financial Statements. In February 2016, guidance was issued which requires that a lessee recognize lease assets and lease liabilities on its balance sheet and disclose key information about its leasing arrangements. We are currently evaluating the effect that this guidance will have on our Financial Statements and related disclosures. We will adopt this guidance on a modified retrospective basis on January 1, 2019. In January 2016, guidance was issued which requires equity investments, except those accounted for under the equity-method of accounting or those that result in consolidation of the investee, to be measured at fair value with changes in fair value recognized in net income. We are currently evaluating the effect that this guidance will have on our Financial Statements. The amendments in this guidance are effective for fiscal years beginning after December 15, 2017 and for interim periods therein. In May 2014, guidance was issued that establishes a new revenue recognition framework in GAAP for all companies and industries. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to receive for those goods or services. The guidance includes a five-step framework to determine the timing and amount of revenue from contracts with customers. In addition, this guidance requires new or expanded disclosures related to the judgments made by companies when following this framework and additional quantitative disclosures regarding contract balances and remaining performance obligations. We will adopt this guidance on January 1, 2018. We have assessed the potential impact of the guidance across our revenue streams. Upon adoption, we will recognize revenue from our contracts with customers as each performance obligation is satisfied, either at a point in time or over a period of time, based on when control transfers to our customers. We have determined that the performance obligations within our print advertising, subscription and newsstand contracts are satisfied on an issue's on sale date, which is expected to accelerate the timing of revenue recognition compared to our current policy of revenue recognition based on an issue’s cover date. The paper, printing and distribution costs of these revenues are expected to accelerate to match the timing of the revenue recognition. Digital advertising revenue will continue to be recognized as impressions are delivered. The new standard may also result in us, as the publisher, recording certain Circulation revenues generated by marketing partners on a gross basis because the publisher is in control of delivering the subscription to the customer, and the marketing partner's obligation is to arrange for another party to transfer the good to the customer. Our marketing partner operations, that provide marketing services to third-party publishers, will recognize revenue for these services over time. For identified impacted revenue streams, we have identified changes to and are modifying our systems. We are also in the process of modifying business processes and controls to support recognition and disclosure under the new standard. We plan to adopt the new revenue recognition standard under the modified retrospective transition method by recognizing the cumulative effect of applying the standard as an adjustment to our Balance Sheet. We do not anticipate being able to provide the impact of the new standard on our Balance Sheets or Statements of Operations until 2018. |
ACQUISITIONS AND DISPOSITIONS |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Dispositions and Acquisitions [Abstract] | |
ACQUISITIONS | ACQUISITIONS AND DISPOSITIONS Acquisitions During the nine months ended September 30, 2017, we completed acquisitions for total cash consideration, net of cash acquired, of $22 million. The excess of the total consideration over the fair value of the net tangible and intangible assets acquired has been recorded as Goodwill, which represents future economic benefits expected to arise from other intangibles acquired that do not qualify for separate recognition. The Goodwill recorded of $13 million will be deductible for tax purposes. Our results of operations include the operations of these additional acquisitions but such activities were not significant for the three and nine months ended September 30, 2017. On September 6, 2016, we acquired Bizrate Insights Inc. (“Bizrate Insights”), a consumer data company that specializes in developing consumer insights by extending its online and mobile surveys across partner sites. The acquisition of Bizrate Insights is part of our transformation into a data-driven organization that we believe will enable us to generate incremental consumer subscription and other revenues. This acquisition was accounted for under the acquisition method. Consideration transferred of $78 million ($80 million cash, net of settlement of a pre-existing commission relationship) was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. On March 2, 2016, we acquired certain assets of Viant Technology Inc. (“Viant”), a business that specializes in data-driven, people-based marketing, headquartered in Irvine, California, for $87 million, net of cash acquired. In connection with the acquisition, during the nine months ended September 30, 2016, we recorded a $3 million net Bargain purchase (gain), which included a reduction of the Bargain purchase (gain) of $2 million for the three months ended June 30, 2016 on the accompanying Statements of Operations. We realized a gain on the transaction because Viant was in need of capital to continue its operations and was unable to secure sufficient capital in the time frame it required. For tax purposes, the Bargain purchase gain resulted in the reduction of the tax basis in identifiable intangibles, resulting in a deferred tax liability of $3 million being recorded on the opening balance sheet. This deferred tax liability reduced the Bargain purchase gain, and the Bargain purchase gain is not taxable. We have granted certain key Viant employees a 40% equity interest (subject to vesting and forfeiture provisions) in the common units of Viant. In conjunction with the issuance of the common units, the Company entered into a put and call arrangement whereby such employees have a right to put their shares to us, and we retain rights to call these interests over time, in each case subject to the satisfaction of certain conditions. The fair value of the common units will be recognized as equity-based compensation expense over the vesting period through September 2020. During the nine months ended September 30, 2016, we completed additional acquisitions for total cash consideration, net of cash acquired, of $26 million. We may be required to pay additional consideration that relates to earn-outs that are contingent upon the achievement of certain performance objectives by the end of 2017, which are estimated to be $1 million as of September 30, 2017. The excess of the total consideration over the fair value of the net tangible and intangible assets acquired was recorded as Goodwill. In conjunction with one of these acquisitions, we also recognized a loss relating to a write off of an asset of $3 million previously recognized in our financial statements that will not be realized as a result of the acquisition. This loss is reported within transaction costs in Selling, general and administrative expenses in the accompanying Statements of Operations. Dispositions As part of our strategy to rationalize our portfolio, on July 27, 2017, we sold INVNT, a live events and creative services subsidiary, for cash and future royalties net of contributed cash. Upon disposal, assets of $5 million related primarily to Prepaid and other current assets, and liabilities of $4 million related primarily to Deferred revenue, were derecognized from our Balance Sheet. We recognized a pre-tax gain of approximately $1 million within (Gain) loss on operating assets, net for the three and nine months ended September 30, 2017. On April 1, 2016, we completed the sale of This Old House Ventures, LLC and This Old House Productions, LLC (together, “TOH”). Upon disposal, assets of $27 million related primarily to Goodwill, and liabilities of $10 million related primarily to Deferred revenue, were derecognized from our Balance Sheet. We recognized a pre-tax gain of $11 million within (Gain) loss on operating assets, net for the nine months ended September 30, 2016. |
INVESTMENTS |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS | INVESTMENTS Our investments included within Short-term investments and Other assets on the accompanying Balance Sheets consist primarily of short-term investments, equity-method investments and cost-method investments. Our investments, by category, consisted of the following (in millions):
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We use available qualitative and quantitative information to evaluate all cost-method investments for indications of other-than-temporary impairments at least quarterly and recognize an impairment loss if a decline in value is determined to be other-than-temporary. During the three and nine months ended September 30, 2017, we recorded an other-than-temporary impairment of $4 million which was due to the decline in the value of a cost-method investment based on an assessment of its near-term profit prospects. No other-than-temporary losses were incurred in the three and nine months ended September 30, 2016. Other-than-temporary impairment losses are included in Other (income) expense, net in the accompanying Statements of Operations. |
FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value measurements are determined based on assumptions that a market participant would use in pricing an asset or a liability. A three-tiered hierarchy distinguishes between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require us to use present value and other valuation techniques in the determination of fair value (Level 3). The following table presents information about assets and liabilities required to be carried at fair value on a recurring basis as of September 30, 2017 and December 31, 2016, respectively (in millions):
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The following table reconciles the beginning and ending balance of our liabilities classified as Level 3 (in millions):
Other Financial Instruments Our other financial instruments, including our term loan (the "Term Loan") and our 5.75% senior notes (the "5.75% Senior Notes"), are not required to be carried on our Balance Sheets at fair value. The following table summarizes the fair value of each of our significant debt instruments based on quoted market prices for similar issues or on the current rates offered to us for instruments of similar remaining maturities (in millions):
The fair value of the outstanding debt instruments presented above is based on pricing from observable market information in a non-active market. Therefore, these debt instruments are classified as Level 2 under the fair value hierarchy. Unrealized gains or losses on debt do not result in realization or expenditure of cash and generally are not recognized in the Financial Statements unless the debt is retired prior to its maturity. The carrying value for the majority of our other financial instruments approximates fair value due to the short-term nature of the financial instruments. The fair value of financial instruments is generally determined by reference to the market value of the instrument as quoted on a national securities exchange or an over-the-counter market. When a quoted market value is not available, fair value is based on an estimate using present value or other valuation techniques. Non-Financial Instruments The majority of our non-financial instruments, which include goodwill, intangible assets, inventories and property, plant and equipment, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur (or at least annually for Goodwill), a non-financial instrument is required to be evaluated for impairment. If we were to determine that a non-financial instrument was impaired, we would be required to write down the non-financial instrument to its fair value. See Note 8, "Goodwill and Intangible Assets" for discussion of impairments recorded during the nine months ended September 30, 2017. Fair value measurements are also used in nonrecurring valuations performed in connection with acquisition accounting. The nonrecurring valuations include primarily the valuations of tradenames, customer and advertiser relationships, technology and database intangible assets and property, plant and equipment. With the exception of certain inputs for our weighted average cost of capital and discount rate calculation that are derived from third-party information, the inputs used in our discounted cash flow analysis, such as forecasts of future cash flows, are based on assumptions. The valuation of customer and advertiser relationships is based primarily on an excess earnings methodology, which is a form of a discounted cash flow analysis. The excess earnings methodology requires us to estimate the specific cash flows expected from the relationships, considering such factors as the estimated life of the relationships and the revenue expected to be generated over the term of such relationships. Tangible assets are valued typically using a replacement or reproduction cost approach, considering such factors as current prices of the same or similar equipment, the age of the equipment and economic obsolescence. All of our nonrecurring valuations use significant unobservable inputs that are classified as Level 3 under the fair value hierarchy. |
DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT Our debt obligations consisted of the following (in millions):
5.75% Senior Notes and Senior Credit Facilities On April 29, 2014, we issued $700 million aggregate principal amount of 5.75% Senior Notes due April 15, 2022 in a private offering. The 5.75% Senior Notes are fully and unconditionally guaranteed by substantially all of our wholly-owned domestic subsidiaries and, under certain circumstances, may become guaranteed by other existing or future subsidiaries. On April 24, 2014, we entered into senior secured credit facilities (the "Senior Credit Facilities") providing for a Term Loan in an aggregate principal amount of $700 million with a seven-year maturity and a $500 million revolving credit facility (the "Revolving Credit Facility") with a five-year maturity, of which up to $100 million is available for the issuance of letters of credit. The Revolving Credit Facility may be used for working capital and other general corporate purposes. The Revolving Credit Facility remained undrawn as of September 30, 2017 except for utilization for letters of credit in the face amount of $3 million. The indenture governing the 5.75% Senior Notes and the credit agreement governing the Senior Credit Facilities contain certain restrictive covenants. With respect to the Revolving Credit Facility only, we are required to maintain a consolidated secured net leverage ratio (as defined in the credit agreement governing the Senior Credit Facilities) not to exceed 2.75x to 1.00x, as tested at the end of each fiscal quarter. We were in compliance with all provisions of our debt agreements as of September 30, 2017. In November 2015, our Board of Directors authorized discretionary principal debt repayments and repurchases of up to $200 million in the aggregate on our Term Loan and our 5.75% Senior Notes. During the nine months ended September 30, 2017, we made a voluntary prepayment on our Term Loan of $15 million. During the nine months ended September 30, 2016, we repurchased $50 million of the aggregate principal amount of our 5.75% Senior Notes at a discount with accrued interest for a total of $46 million and recognized a pre-tax gain from extinguishment of $4 million. As of September 30, 2017, $60 million remains unused under the authorization. 7.50% Senior Notes due 2025 On October 11, 2017, we completed the private offering of $300 million aggregate principal amount of 7.50% senior unsecured notes due in 2025 (the "7.50% Senior Notes"). The 7.50% Senior Notes will bear interest at a rate of 7.50% per year payable on April 15 and October 15 of each year, commencing April 15, 2018. The 7.50% Senior Notes will mature on October 15, 2025. The 7.50% Senior Notes are senior unsecured obligations of the Company and rank equally with all of the Company’s existing and future unsecured senior indebtedness. The Company’s obligations under the 7.50% Senior Notes are guaranteed on a senior unsecured basis by the same guarantors that guarantee the Senior Credit Facilities and the 5.75% Senior Notes. The Company used the net proceeds from the offering of 7.50% Senior Notes, together with cash on hand, to (i) repay $200 million of the outstanding borrowings under the Term Loan, (ii) repurchase $100 million aggregate principal amount of the 5.75% Senior Notes in privately negotiated repurchases, and (iii) pay fees and expenses of the transactions described above. Amended and Restated Credit Agreement On October 11, 2017, the Company entered into Amendment No. 1 (the “Amendment”) to its credit agreement that governs the Senior Credit Facilities, dated as of April 24, 2014 (the "Existing Credit Agreement" and as so amended by the Amendment, the "Amended and Restated Credit Agreement"). Among other things, the Amendment (i) extended the maturity of the Revolving Credit Facility from June 2019 to October 2022 and the Term Loan from April 2021 to October 2024, or, in each case, if more than $100 million of the Company’s 5.75% Senior Notes due 2022 are outstanding on January 14, 2022 (the “Springing Maturity Date”), to the Springing Maturity Date, (ii) reduced the revolving credit commitments under the Revolving Credit Facility from $500 million to $300 million (of which $185 million will be available for the issuance of letters of credit) and (iii) amended certain other provisions thereof. The Amended and Restated Credit Agreement permits us to incur incremental senior secured term loan borrowings under the Senior Credit Facilities, subject to the satisfaction of certain conditions, in an aggregate principal amount up to the sum of (a) $350 million plus (b) additional amounts so long as, on a pro forma basis at the time of incurrence, our consolidated secured net leverage ratio (as defined in the Amended and Restated Credit Agreement) does not exceed 2.50 to 1.00. The Amended and Restated Credit Agreement requires the Company to maintain a maximum consolidated secured net leverage ratio of 2.75 to 1.00 initially, which will be reduced to 2.50 to 1.00 for fiscal quarters ending on and after June 30, 2019. The interest rates applicable to the Term Loan under the Amended and Restated Credit Agreement are, at the Company’s option, equal to either a Eurocurrency rate or a base rate, plus an applicable margin equal to 3.50% for Eurocurrency rate loans and 2.50% for base rate loans, subject to a 1.00% interest rate floor for Eurocurrency rate loans. Loans under the Revolving Credit Facility remain subject to an interest rate ranging from 2.25% to 2.00% for Eurocurrency rate loans or from 1.25% to 1.00% for base rate loans, depending on the Company’s consolidated secured net leverage ratio, and a fee of 0.375% on the unused portion of commitments under the Revolving Credit Facility. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill is tested annually for impairment at the reporting unit level during the fourth quarter or earlier upon the occurrence of certain events or substantive changes in circumstances. A reporting unit is either the "operating segment level" or one level below, which is referred to as a "component." The level at which the impairment test is performed requires judgment as to whether the operations below the operating segment constitute a self-sustaining business or whether the operations are similar such that they should be aggregated for purposes of the impairment test. At June 30, 2017, management concluded that we had three reporting units: INVNT ("INVNT"), Sports Illustrated Play ("SI Play") and the remaining core Time Inc. operations ("Core Time Inc.") for purposes of the impairment test. As of September 30, 2017, after the sale of INVNT in July 2017, management concluded that we have two reporting units: SI Play and Core Time Inc. We performed an impairment test for Goodwill relating to our INVNT and SI Play reporting units as of June 30, 2017. INVNT significantly underperformed expectations due to an unexpected deterioration of its customer base, resulting in significantly reduced revenues and operating cash flows. For SI Play, industry consolidation resulted in stronger competition than expected and slower revenue growth which resulted in a significant reduction in revenues and operating cash flows as compared to the high historical financial projections expected in the youth sports market. We determined that the estimated fair value of both reporting units was lower than their carrying amounts. As a result, we recorded a pre-tax non-cash impairment charge to impair the Goodwill associated with both reporting units totaling$50 million ($34 million related to SI Play and $16 million related to INVNT). Goodwill for SI Play was written down from its carrying value of $56 million to $22 million and Goodwill for INVNT was written down from its carrying value of $16 million to nil. There was no triggering event that would have required us to assess the Goodwill included in our Core Time Inc. reporting unit. There were no impairment charges recognized for the three and nine months ended September 30, 2016. For SI Play, we used a discounted cash flow ("DCF") approach to determine the estimated fair value. The cash flows employed in our DCF analyses were based on updated forecasts of operating results. Terminal growth rates were assumed for years beyond the current long-range plan period. Discount rate assumptions were based on an assessment of market rates as well as the risk inherent in the future cash flows included in our updated forecasts of future operating results. The significant assumptions utilized in the DCF analysis for SI Play were a discount rate of 25.0% and a terminal growth rate of 3.0%. For INVNT, we used a market approach to determine the estimated fair value, which took into consideration the terms of the transaction finalized on July 27, 2017 to sell INVNT. The following summary sets forth the changes in the carrying amount of Goodwill during the nine months ended September 30, 2017 (in millions):
Intangible Assets We recognized non-cash Asset impairment charges of $5 million for the nine months ended September 30, 2017 at INVNT. We wrote off the full value of a definite-lived tradename and a customer relationship intangible asset from their total carrying value of $5 million to nil. We determined the fair value of these intangible assets based on a market approach, which took into consideration the terms of the transaction finalized on July 27, 2017 to sell INVNT. The market approach has inputs that are classified as Level 3 under the fair value hierarchy. We recorded Asset impairments of $188 million and $189 million during the three and nine months ended September 30, 2016, respectively primarily related to an impairment of a domestic tradename intangible. Intangible assets, net as of September 30, 2017 and December 31, 2016 consisted of the following (in millions):
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Based on the Intangible assets, net balance as of September 30, 2017, the estimated amortization expense for each of the succeeding five years and thereafter is as follows (in millions):
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INCOME TAXES |
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Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES At the end of each interim period, we estimate the annual effective income tax rate and apply that rate to our ordinary year-to-date earnings. The income tax expense or benefit related to significant or unusual items that are separately reported, or reported net of their respective tax impact, are individually computed and recognized in the period in which they occur. The effect of changes in enacted tax laws, tax rates or tax status is recognized in the period in which such changes occur. For the three and nine months ended September 30, 2017, our income tax provision was $16 million and our income tax benefit was $14 million, respectively. For both the three and nine months ended September 30, 2016, our income tax benefit was $73 million. For the three and nine months ended September 30, 2017, our effective income tax rate, reflecting our tax provision and benefit, was 54% and 20%, respectively. Our effective income tax rate, reflecting our tax benefit, for the three and nine months ended September 30, 2016 was 39% and 41%, respectively. The change in the effective income tax rate for the three months ended September 30, 2017 was primarily due to certain foreign losses incurred with no corresponding tax benefit, adjustments to our reserves for uncertain tax positions and the effect of foreign operations. The change in the effective income tax rate for the nine months ended September 30, 2017 was primarily due to adjustments to our reserves for uncertain tax positions and the effect of foreign operations. |
STOCKHOLDERS' EQUITY AND NONCONTROLLING INTERESTS |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY AND NONCONTROLLING INTERESTS | STOCKHOLDERS' EQUITY AND NONCONTROLLING INTERESTS In November 2015, our Board of Directors authorized share repurchases of our common stock of up to $300 million. There were no share repurchases of our common stock during the nine months ended September 30, 2017. As of September 30, 2017, $123 million remains authorized for share repurchases. On November 9, 2017, our Board of Directors declared a dividend of $0.04 per common share to stockholders of record as of the close of business on November 30, 2017, payable on December 15, 2017. On August 8, 2017, our Board of Directors declared a dividend of $0.04 per common share to stockholders of record as of the close of business on August 31, 2017, payable on September 15, 2017. A total of $4 million was paid on September 15, 2017 with respect to the dividend declared on August 8, 2017. On May 10, 2017, following a comprehensive review of Time Inc.’s capital allocation, capital structure and operating plan, the Time Inc. Board of Directors declared a quarterly dividend of $0.04 per common share to stockholders of record as of the close of business on May 31, 2017. A total of $4 million was paid on June 15, 2017 with respect to the dividend declared on May 10, 2017. On February 16, 2017, our Board of Directors declared a quarterly dividend of $0.19 per common share to stockholders of record as of the close of business on February 28, 2017. A total of $19 million was paid on March 15, 2017 with respect to the dividend declared on February 16, 2017. Redeemable Noncontrolling Interests Redeemable noncontrolling interests on our Balance Sheets relate to noncontrolling interests of certain consolidated entities whereby equity interests, in the form of common units, have been granted to key employees of these entities, subject to vesting and forfeiture provisions. In conjunction with the issuance of these common units, the Company entered into put and call arrangements whereby such employees have a right to put their shares to us and require us to buy their interests at their fair values, per the provisions of the operating agreements. The put and call arrangements are accounted for as equity instruments, as the employees are subject to the risks and rewards associated with share ownership for a reasonable period of time. We retain rights to call these interests over time, in each case subject to the satisfaction of certain conditions. The fair value of the common units is being recognized as equity-based compensation expense over the vesting period of 4 to 4.5 years from the date of grant. Upon vesting, the portion of the redemption value associated with the completed service period was recorded to redeemable noncontrolling interests. As these common units are redeemable at the option of the holder and are not contingent upon an event not in control of the holder, redemption is determined to be probable. If the common units are not redeemed, the redemption value will be remeasured through Redeemable noncontrolling interest at each reporting date. Net income or loss of the noncontrolling interest entity is attributed to the parent and the noncontrolling interest entity on the Statement of Operations in accordance with the terms of the operating agreements. Comprehensive Income (Loss) Comprehensive income (loss) is reported in the Statements of Comprehensive Income (Loss) and consists of Net income (loss) and other gains and losses affecting Stockholders' equity that, under GAAP, are excluded from Net income (loss). Such items consist primarily of foreign currency translation gains (losses) and changes in pension benefit plan obligations. The following summary sets forth the activity within Other comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016 (in millions):
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NET INCOME (LOSS) PER COMMON SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME (LOSS) PER COMMON SHARE | NET INCOME (LOSS) PER COMMON SHARE Basic net income (loss) per common share is calculated by dividing Net income (loss) attributable to Time Inc. common stockholders by the Weighted average basic common shares outstanding. Diluted net income (loss) per common share is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of common shares issuable under equity-based compensation plans in accordance with the treasury stock method, except where the inclusion of such common shares would have an anti-dilutive impact. The determination and reporting of net income (loss) per common share requires the inclusion of certain of our time-based restricted stock units ("RSUs") where such securities have the right to share in dividends, if declared, equally with common stockholders. For the three and nine months ended September 30, 2017 and 2016, Basic and Diluted net income (loss) per common share were as follows (in millions, except per share amounts):
In periods of income, the computation of Diluted net income (loss) per common share excludes certain equity awards because they are anti-dilutive. However, in periods of loss, all equity awards are excluded, as the inclusion of any equity awards would be anti-dilutive. Such equity awards are as set forth below (in millions):
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EQUITY-BASED COMPENSATION |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY-BASED COMPENSATION | EQUITY-BASED COMPENSATION The Company adopted the 2016 Omnibus Incentive Compensation Plan (the “2016 Omnibus Plan”) in June 2016, which replaced and superseded its 2014 Omnibus Incentive Compensation Plan (the "2014 Omnibus Plan"). The Company grants stock options, RSUs and performance stock units ("PSUs") under its 2016 Omnibus Plan. Awards granted under the 2014 Omnibus Plan remain in effect pursuant to their terms. On July 24, 2017, the Company awarded performance stock options ("Performance options") under the 2016 Omnibus Plan to each of its executive officers, with the exception of our President and CEO. The number of Performance options eligible to vest is determined based upon the Company’s achievement, by December 31, 2017, of four operational performance goals, weighted 25% each, based on milestones related to (1) cost re-engineering, (2) digital growth acceleration through content partnerships, (3) digital growth acceleration through direct sales, and (4) portfolio rationalization. To the extent a milestone has not been achieved by December 31, 2017 (which determination shall be made in the quarter ended March 31, 2018), 25% of the Performance options granted are forfeited. Thereafter, 50% of the Performance options that remain outstanding will vest on the first anniversary of the grant date and the remaining 50% on the second anniversary of the grant date. The Performance options have an exercise price equal to the fair market value of our common stock on the grant date. The expense related to Performance options is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The grant-date fair value of each Performance option is determined on the date of grant using the Black-Scholes option-pricing model. Performance options expire on the third anniversary of the grant date. The table below summarizes the weighted-average assumptions used to value the Performance options at their grant date and the weighted-average grant date fair value per option:
On February 13, 2017, the Company adopted a long-term incentive compensation plan ("2017 Performance Stock Unit Plan") pursuant to which PSUs were awarded under the 2016 Omnibus Plan. The 2017 Performance Stock Unit Plan is designed to incentivize and reward executive officers for effecting the successful transformation of our business, as measured by two performance-based vesting conditions, weighted 50% each. The number of units that will vest into common shares is determined based on the Company’s 2018 financial performance. Achievement of the financial performance and payouts are interpolated between 50% and 200% with the target performance established at a 100% payout. Each PSU represents the unfunded, unsecured right to receive one share of our common stock on the vesting date but carries no voting or dividend rights. The number of PSUs eligible to vest is determined by evaluation of the two performance-based vesting conditions on or before the second anniversary of the grant. Vesting occurs on a graded-vesting schedule, with 50% of the units vesting on the date the compensation committee of the Company certifies the vesting conditions and the remaining 50% vesting one year later. The expense related to these PSUs is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The fair value and compensation expense of each PSU is determined based on the closing market price of Time Inc.’s common stock on the NYSE Composite Tape on the date of grant discounted to exclude the estimated dividend yield during the vesting period. The following table summarizes equity awards granted and the weighted average grant date fair value for our equity awards for the nine months ended September 30, 2017 and 2016 (in millions, except per share amounts):
Approximately 1 million RSUs vested into common shares during the nine months ended September 30, 2017 and 2016. Approximately 2 million stock options vested during the nine months ended September 30, 2017. Approximately 1 million stock options vested during the nine months ended September 30, 2016. Compensation expense recognized for our equity-based awards for the three and nine months ended September 30, 2017 and 2016 was as follows (in millions):
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BENEFIT PLANS |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BENEFIT PLANS | BENEFIT PLANS Defined Benefit Pension Plans We participate in various funded and unfunded defined benefit plans, including international plans in the United Kingdom, Netherlands and Germany. Pension benefits under these plans are based on formulas that reflect the employees' years of service and compensation during their employment period. We contributed $3 million and $4 million to our international pension plans during the three months ended September 30, 2017 and 2016, respectively. We contributed $11 million and $12 million to our international pension plans during the nine months ended September 30, 2017 and 2016, respectively. Components of net periodic benefit cost (income) for the three and nine months ended September 30, 2017 and 2016 were as follows (in millions):
We are party to a deed of guarantee with the trustees of a defined benefit pension plan for certain of our current and former U.K. employees (which is closed to new participants). Under the deed of guarantee, we would be obligated to fund the pension plan’s “buyout deficit” (i.e., the amount that would be needed to purchase annuities to discharge the benefits under the plan) under certain circumstances. Specifically, we would be required to deposit the buyout deficit into escrow or provide a surety bond or other suitable credit support if we were to experience a drop in our long-term unsecured senior debt credit ratings to Caa1 or below from Moody's and to CCC+ or below from Standard & Poor's, or if our debt in excess of $50 million were not to be paid when due or were to come due prior to its stated maturity as a result of a default. As of September 30, 2017, our long-term unsecured senior debt credit rating was B2 from Moody's and B from Standard & Poor's and we have not defaulted on any payments of our debt. Therefore we were not required to fund the pension plan's buyout deficit. If we had been required to fund the buyout deficit on September 30, 2017, the amount would have been approximately £287 million. The amount of the buyout deficit is determined by many factors, including but not limited to the fair value of plan assets, actuarial assumptions, interest rates and inflation rates. |
RESTRUCTURING AND SEVERANCE COSTS |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING AND SEVERANCE COSTS | RESTRUCTURING AND SEVERANCE COSTS Our Restructuring and severance costs relate primarily to employee termination costs and other exit costs. On August 8, 2017, the Company announced a strategic transformation program with the majority of initiatives expected to be implemented within the first 18 months after the program launch. We anticipate additional Restructuring and severance costs related to the strategic transformation program, but are currently unable to estimate the total amount expected to be incurred. For the three months ended September 30, 2017, Restructuring and severance costs were a total of $26 million primarily due to previously announced cost savings initiatives, the strategic transformation program and other exit costs related to vacating certain real estate leases. For the nine months ended September 30, 2017, we incurred net Restructuring and severance costs of $73 million, primarily due to previously announced cost savings initiatives, the cost re-engineering program announced in June 2017 and the strategic transformation program. Restructuring and severance costs for the three and nine months ended September 30, 2016 were $43 million and $54 million, respectively and related primarily to employee terminations. Selected information relating to Restructuring and severance costs is as follows (in millions):
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The liability balance for employee terminations relates primarily to our cost re-engineering initiatives announced in June 2017 and the realignment program announced in July 2016 to unify and centralize the editorial, advertising sales and brand development organizations. As of September 30, 2017, the liability balance for other exit costs relates primarily to the remaining rental obligations at the Time and Life Building and another leased property and other relocation costs. As of September 30, 2017, of the $80 million liability, $69 million was classified as current liabilities on the Balance Sheet, with the remaining $11 million classified as noncurrent liabilities. Amounts classified as noncurrent liabilities are expected to be paid through 2020 and relate primarily to severance costs. During the three and nine months ended September 30, 2017, we reversed $1 million and $4 million of Restructuring and severance costs, respectively, primarily due to modifications of certain employee termination agreements. During the three and nine months ended September 30, 2016, we reversed $1 million and $8 million of Restructuring and severance costs, respectively, due to both modifications of certain employee termination agreements and settlement of certain lease obligations. |
COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments We have commitments under certain firm contractual arrangements ("firm commitments") to make future payments. These firm commitments secure the future rights to various assets and services to be used in the normal course of operations. Our commitments not recorded on the Balance Sheets consist primarily of operating lease arrangements, talent commitments and purchase obligations for goods and services. Our other commitments, which are recorded on our Balance Sheets, consist primarily of debt and pension obligations. Our commitments have not significantly varied from those disclosed within our 2016 Form 10-K. Legal Proceedings In the ordinary course of business, we are defendants in or parties to various legal claims, actions and proceedings. These claims, actions and proceedings are at varying stages of investigation, arbitration or adjudication, and involve a variety of areas of law. On March 10, 2009, Anderson News L.L.C. and Anderson Services L.L.C. (collectively, "Anderson News") filed an antitrust lawsuit in the U.S. District Court for the Southern District of New York (the “District Court”) against several magazine publishers, distributors and wholesalers, including Time Inc. and one of its subsidiaries, Time Inc. Retail (formerly Time/Warner Retail Sales & Marketing, Inc.) ("TIR"). Plaintiffs allege that defendants violated Section 1 of the Sherman Antitrust Act by engaging in an antitrust conspiracy against Anderson News, as well as other related state law claims. Specifically, plaintiffs allege that defendants conspired to reduce competition in the wholesale market for single-copy magazines by rejecting the magazine distribution surcharge proposed by Anderson News and another magazine wholesaler and refusing to distribute magazines to them. Plaintiffs are seeking (among other things) an unspecified award of treble monetary damages against defendants, jointly and severally. On August 2, 2010, the District Court granted defendants' motions to dismiss the complaint with prejudice and, on October 25, 2010, the District Court denied Anderson News' motion for reconsideration of that dismissal. On November 8, 2010, Anderson News appealed and, on April 3, 2012, the U.S. Court of Appeals for the Second Circuit (the “Circuit Court”) vacated the District Court's dismissal of the complaint and remanded the case to the District Court. On January 7, 2013, the U.S. Supreme Court denied defendants' petition for writ of certiorari to review the judgment of the Circuit Court vacating the District Court's dismissal of the complaint. In February 2014, Time Inc. and several other defendants amended their answers to assert antitrust counterclaims against plaintiffs. On December 19, 2014, the defendants filed a motion for summary judgment on Anderson News' claims and Anderson News filed a motion for summary judgment on the antitrust counterclaim. On August 20, 2015, the District Court granted the defendants’ motion for summary judgment on Anderson News’ claims and granted Anderson News’ motion for summary judgment on the defendants’ antitrust counterclaim. On August 25, 2015, Anderson News filed a notice with the Circuit Court appealing the District Court’s dismissal of Anderson News’ claims, and on September 14, 2015, the defendants filed a notice with the Circuit Court appealing the District Court’s dismissal of the defendants’ antitrust counterclaim. On December 8, 2015, Anderson News filed its appellate brief with the Circuit Court and on March 8, 2016, the defendants filed their appellate briefs with the Circuit Court. Anderson’s reply brief was filed on May 9, 2016 and the defendants’ sur-reply brief was filed on May 23, 2016. Oral argument on the appeal was held on December 2, 2016. We are awaiting the court's decision. On November 14, 2011, TIR and several other magazine publishers and distributors filed a complaint in the U.S. Bankruptcy Court for the District of Delaware against Anderson Media Corporation, the parent company of Anderson News, and several Anderson News affiliates. Plaintiffs, acting on behalf of the Anderson News bankruptcy estate, seek to avoid and recover in excess of $70 million that they allege Anderson News transferred to the Anderson News-affiliated insider defendants in violation of the United States Bankruptcy Code and Delaware state law prior to the involuntary bankruptcy petition filed against Anderson News by certain of its creditors. On December 28, 2011, the defendants moved to dismiss the complaint. On June 5, 2012, the court denied defendants' motion. On November 6, 2013, the bankruptcy court lifted the automatic stay barring claims against the debtor, allowing Time Inc. and others to pursue an antitrust counterclaim against Anderson News in the antitrust action brought by Anderson News in the U.S. District Court for the Southern District of New York (described above). On October 26, 2010, the Canadian Minister of National Revenue denied the claims by TIR for input tax credits in respect of goods and services tax that TIR had paid on magazines it imported into and had displayed at retail locations in Canada during the years 2006 to 2008, on the basis that TIR did not own those magazines and issued Notices of Reassessment in the amount of approximately C$52 million. On January 21, 2011, TIR filed an objection to the Notices of Reassessment with the Chief of Appeals of the Canada Revenue Agency ("CRA"), arguing that TIR claimed input tax credits only in respect of goods and services tax it actually paid and, regardless of whether its payment of the goods and services tax was appropriate or in error, it is entitled to a rebate for such payments. On September 13, 2013, TIR received Notices of Reassessment in the amount of C$26.9 million relating to the disallowance of input tax credits claimed by TIR for goods and services tax that TIR had paid on magazines it imported into and had displayed at retail locations in Canada during the years 2009 to 2010. On October 22, 2013, TIR filed an objection to the Notices of Reassessment received on September 13, 2013 with the Chief of Appeals of the CRA, asserting the same arguments made in the objection TIR filed on January 21, 2011. Beginning in 2015, the collections department of the CRA requested payment of both assessments plus accrued interest or the posting of sufficient security. In each instance, TIR responded by stating that collection should remain stayed pending resolution of the issues raised by TIR’s objection. On February 8, 2016, the Company filed an application for a remission order with the International Trade Policy Division of Finance Canada to seek relief from the assessments and the CRA’s collection efforts. On February 12, 2016, TIR filed a complaint with the Office of the Taxpayers’ Ombudsman about the CRA’s failure for more than five years to rule on TIR’s objections to the reassessments. TIR requested that the Ombudsman Office recommend to the CRA that the reassessments be vacated or the CRA support TIR’s application for a remission order. On March 2, 2016, the CRA proposed that the Tax Court of Canada resolve the issue of whether TIR or the publishers are entitled to the input tax credits. On March 9, 2016, TIR agreed to the proposal. On May 6, 2016, TIR filed a Notice of Appeal with the Tax Court of Canada of the assessments issued by the CRA and on July 25, 2016, the CRA filed a Reply to TIR's Notice of Appeal. On March 31, 2017, the Company and the CRA jointly proposed a timetable for the completion of certain pre-trial steps related to this matter, which was approved by the Tax Court. In accordance with the timetable, on April 28, 2017, TIR filed an Amended Notice of Appeal of the assessments. On June 30, 2017, the CRA filed a Reply to TIR's Amended Notice of Appeal and the Company filed an answer to the CRA reply on July 10, 2017. The parties are currently engaged in discovery which is scheduled to be completed by December 15, 2017. Including interest accrued on both reassessments, the total reassessment by the CRA for the years 2006 to 2010 was C$91 million as of November 30, 2015. On October 3, 2012, Susan Fox filed a class action complaint (the "Complaint") against Time Inc. in the United States District Court for the Eastern District of Michigan alleging violations of Michigan’s Video Rental Privacy Act (“VRPA”) as well as claims for breach of contract and unjust enrichment. The VRPA limits the ability of entities engaged in the business of selling, renting or lending retail books or other written materials from disclosing to third parties certain information about customers’ purchase, lease or rental of those materials. The Complaint alleges that Time Inc. violated the VRPA by renting to third parties lists of subscribers to various Time Inc. magazines. The Complaint sought injunctive relief and the greater of statutory damages of $5,000 per class member or actual damages. On December 3, 2012, Time Inc. moved to dismiss the Complaint on the grounds that it failed to state claims for relief and because the named plaintiff lacked standing because she suffered no injury from the alleged conduct. On August 6, 2013, the court granted, in part, and denied, in part, Time Inc.’s motion, dismissing the breach of contract claim but allowing the VRPA and unjust enrichment claims to proceed. On November 11, 2013, Rose Coulter-Owens replaced Susan Fox as the named plaintiff. On March 13, 2015, the plaintiff filed a motion seeking to certify a class consisting of all Michigan residents who between March 31, 2009 and November 15, 2013 purchased a subscription to Time, Fortune or Real Simple magazines through any website other than Time.com, Fortune.com and RealSimple.com. On July 27, 2015, the court granted plaintiff’s motion to certify the class, which we estimate to comprise approximately 40,000 consumers. On August 31, 2015, Time Inc. and the plaintiff moved for summary judgment and on October 1, 2015 both parties filed briefs in opposition to their adversaries’ motions. On February 16, 2016, the court granted Time Inc.'s motion for summary judgment and dismissed the case. On March 16, 2016, the plaintiff filed a notice with the Circuit Court appealing the District Court’s dismissal of plaintiff’s claims. On May 26, 2016, Time Inc. filed a motion to dismiss the appeal on the ground that plaintiff lacked standing to pursue her claims. On September 22, 2016, the Motions Part of the Circuit Court issued an order directing that Time Inc.'s motion to dismiss the appeal should be decided by the appellate panel that was assigned the plaintiff's appeal on the merits. On November 4, 2016, Plaintiff filed her appellate brief and on December 21, 2016, Time Inc. filed its opposition to Plaintiff's appeal and a cross-appeal to the District Court's order certifying the class. Plaintiff filed a reply and opposition to Time Inc.'s class certification appeal on February 6, 2017 and Time Inc. filed a sur-reply on February 20, 2017. Oral argument on the appeal was heard on April 26, 2017. On June 26, 2017, the Circuit Court affirmed the District Court's decision granting Time Inc. summary judgment. On February 19, 2016, the same law firm representing Coulter-Owens filed another class action, entitled Perlin v. Time Inc., in the United States District Court for the Eastern District of Michigan alleging violations of the VRPA as well as a claim for unjust enrichment. This lawsuit was filed on behalf of Michigan residents who purchased subscriptions directly from Time Inc. On May 6, 2016 and May 31, 2016, Time Inc. moved to dismiss the Complaint. Perlin filed an opposition brief on June 27, 2016 and Time Inc. filed its reply brief on July 11, 2016. On February 15, 2017, the Court denied Time Inc.'s motion to dismiss and on March 1, 2017, Time Inc. answered the Complaint. Discovery is currently ongoing and is currently scheduled to be completed in February 2018. We intend to vigorously defend against or prosecute the matters described above. In July 2017, the Company received a subpoena from the Enforcement Division of the staff of the Securities and Exchange Commission ("SEC") requiring us to provide documents relating to certain goodwill and asset impairments and for certain restructuring and severance costs. The Company is cooperating with the SEC in the investigation. Management cannot at this time predict the eventual scope or outcome of this matter. We establish an accrued liability for specific matters, such as a legal claim, when we determine both that a loss is probable and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters. In view of the inherent difficulty of predicting the outcome of litigation, claims and other matters, we often cannot predict what the eventual outcome of a pending matter will be, or what the timing or results of the ultimate resolution of a matter will be. Accordingly, for the matters described above, we are unable to predict the outcome or reasonably estimate a range of possible loss. Income Tax Uncertainties Our operations are subject to tax in various domestic and international jurisdictions and are regularly audited by federal, state and foreign tax authorities. We believe we have appropriately accrued for the expected outcome of all pending tax matters and do not currently anticipate that the ultimate resolution of pending tax matters will have a material adverse effect on our financial condition, future results of operations or liquidity. In connection with the Spin-Off, we entered into a Tax Matters Agreement with Time Warner that may require us to indemnify Time Warner for certain tax liabilities for periods prior to the Spin-Off. |
ADDITIONAL FINANCIAL INFORMATION |
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ADDITIONAL FINANCIAL INFORMATION | ADDITIONAL FINANCIAL INFORMATION Additional financial information with respect to certain balances included in the Financial Statements herein is as follows (in millions):
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Subsequent Events |
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Subsequent Event [Line Items] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS 7.50% Senior Notes due 2025 On October 11, 2017, the Company completed the private offering in accordance with Rule 144A and Regulation S under the Securities Act of 1933, as amended, of $300 million aggregate principal amount of its 7.50% senior unsecured notes due 2025 ("the 7.50% Senior Notes”). The 7.50% Senior Notes were issued under an Indenture, dated as of October 11, 2017 (the “2017 Indenture”), by and among the Company, the subsidiary guarantors party thereto and Citibank N.A., as trustee (the “Trustee”). The 7.50% Senior Notes will bear interest at a rate of 7.50% per year. The Company will pay interest on the 7.50% Senior Notes on April 15 and October 15 of each year, commencing April 15, 2018. The 7.50% Senior Notes will mature on October 15, 2025. The 7.50% Senior Notes are senior unsecured obligations of the Company and rank equally with all of the Company’s existing and future unsecured senior indebtedness. The Company’s obligations under the 7.50% Senior Notes are guaranteed on a senior unsecured basis by the same guarantors that guarantee the Senior Credit Facilities. The Company used the net proceeds from the offering of 7.50% Senior Notes, together with cash on hand, to (i) repay $200 million of the outstanding borrowings under the Term Loan, (ii) repurchase $100 million aggregate principal amount of the 5.75% Senior Notes in privately negotiated repurchases, and (iii) pay fees and expenses of the transactions described above. Amended and Restated Credit Agreement On October 11, 2017, the Company entered into Amendment No. 1 (the “Amendment”) to its Credit Agreement, dated as of April 24, 2014 (the “Existing Credit Agreement”). Among other things, the Amendment (i) extends the maturity of the Revolving Credit Facility from June 2019 to October 2022 and the Term Loan from April 2021 to October 2024 and amended certain other provisions. The interest rates applicable to the Term Loan under the Amended and Restated Credit Agreement are, at the Company’s option, equal to either a Eurocurrency rate or a base rate, plus an applicable margin equal to 3.50% for Eurocurrency rate loans and 2.50% for base rate loans, subject to a 1.00% interest rate floor for Eurocurrency rate loans. Loans under the Revolving Credit Facility remain subject to an interest rate ranging from 2.25% to 2.00% for Eurocurrency rate loans or from 1.25% to 1.00% for base rate loans, depending on the Company’s consolidated secured net leverage ratio (as defined in the Amended and Restated Credit Agreement), and a fee of 0.375% on the unused portion of commitments under the Revolving Credit Facility. In connection with the issuance of 7.50% Senior Notes, use of proceeds and amended and restated Credit Agreement, we expect to incur a loss on extinguishment of debt of [$3 million] and expense approximately [$5 million] of unamortized costs within Interest expense, net. Additionally, we expect to recognize approximately [$3 million] of expense within Selling, general & administrative expenses related to fees and expenses of this transaction. We also incurred [$16 million] of deferred financing costs. |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies) |
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Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | Basis of Presentation The consolidated financial statements include the accounts of Time Inc. and all wholly-owned and majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. We reflect the noncontrolling interest in net income (loss) of our majority-owned subsidiaries in the consolidated statements of operations in Net income (loss) attributable to noncontrolling interests and the equity in noncontrolling interest in majority-owned subsidiaries in Equity attributable to noncontrolling interests included in Stockholders' equity on our consolidated balance sheets. The consolidated financial statements included herein (the “Financial Statements”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair presentation have been reflected in these Financial Statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The preparation of the Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the Financial Statements and accompanying disclosures. Actual results could differ from those estimates. The financial position and operating results of our foreign operations are consolidated using primarily the local currency as the functional currency. Local currency assets and liabilities are translated at the rates of exchange as of the balance sheet date, and local currency revenues and expenses are translated at average rates of exchange during the period. Translation gains or losses on assets and liabilities are included as a component of Accumulated other comprehensive loss, net. The consolidated balance sheets are referred to as the “Balance Sheets” herein. The consolidated statements of operations are referred to as the “Statements of Operations” herein. The consolidated statements of comprehensive income (loss) are referred to as the "Statements of Comprehensive Income (Loss)" herein. The consolidated statements of stockholders' equity are referred to as the "Statements of Stockholders' Equity" herein. The consolidated statements of cash flows are referred to as the “Statements of Cash Flows” herein. The accompanying Financial Statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the Securities and Exchange Commission (“SEC”) on February 27, 2017 and amended on April 28, 2017 (the “2016 Form 10-K”). |
Goodwill | The excess of the total consideration over the fair value of the net tangible and intangible assets acquired has been recorded as Goodwill, which represents future economic benefits expected to arise from other intangibles acquired that do not qualify for separate recognition. The Goodwill recorded of $13 million will be deductible for tax purposes. |
Fair Value Measurements | Unrealized gains or losses on debt do not result in realization or expenditure of cash and generally are not recognized in the Financial Statements unless the debt is retired prior to its maturity. air value measurements are determined based on assumptions that a market participant would use in pricing an asset or a liability. A three-tiered hierarchy distinguishes between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require us to use present value and other valuation techniques in the determination of fair value (Level 3). Fair value measurements are also used in nonrecurring valuations performed in connection with acquisition accounting. The nonrecurring valuations include primarily the valuations of tradenames, customer and advertiser relationships, technology and database intangible assets and property, plant and equipment. With the exception of certain inputs for our weighted average cost of capital and discount rate calculation that are derived from third-party information, the inputs used in our discounted cash flow analysis, such as forecasts of future cash flows, are based on assumptions. The valuation of customer and advertiser relationships is based primarily on an excess earnings methodology, which is a form of a discounted cash flow analysis. The excess earnings methodology requires us to estimate the specific cash flows expected from the relationships, considering such factors as the estimated life of the relationships and the revenue expected to be generated over the term of such relationships. Tangible assets are valued typically using a replacement or reproduction cost approach, considering such factors as current prices of the same or similar equipment, the age of the equipment and economic obsolescence. All of our nonrecurring valuations use significant unobservable inputs that are classified as Level 3 under the fair value hierarchy. |
Fair Value of Financial and Non-Financial Instruments | The majority of our non-financial instruments, which include goodwill, intangible assets, inventories and property, plant and equipment, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur (or at least annually for Goodwill), a non-financial instrument is required to be evaluated for impairment. If we were to determine that a non-financial instrument was impaired, we would be required to write down the non-financial instrument to its fair value. |
INVESTMENTS (Tables) |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of investments | Our investments included within Short-term investments and Other assets on the accompanying Balance Sheets consist primarily of short-term investments, equity-method investments and cost-method investments. Our investments, by category, consisted of the following (in millions):
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FAIR VALUE MEASUREMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Asset and Liabilities Measured on Recurring Basis | The following table presents information about assets and liabilities required to be carried at fair value on a recurring basis as of September 30, 2017 and December 31, 2016, respectively (in millions):
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Schedule of Derivative Liabilities at Fair Value | The following table reconciles the beginning and ending balance of our liabilities classified as Level 3 (in millions):
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Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following table summarizes the fair value of each of our significant debt instruments based on quoted market prices for similar issues or on the current rates offered to us for instruments of similar remaining maturities (in millions):
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DEBT (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Our debt obligations consisted of the following (in millions):
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following summary sets forth the changes in the carrying amount of Goodwill during the nine months ended September 30, 2017 (in millions):
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Schedule of Finite-Lived Intangible Assets | Intangible assets, net as of September 30, 2017 and December 31, 2016 consisted of the following (in millions):
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Based on the Intangible assets, net balance as of September 30, 2017, the estimated amortization expense for each of the succeeding five years and thereafter is as follows (in millions):
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STOCKHOLDERS' EQUITY AND NONCONTROLLING INTERESTS (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity within Other Comprehensive Income (Loss) | he following summary sets forth the activity within Other comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016 (in millions):
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NET INCOME (LOSS) PER COMMON SHARE (Tables) |
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Estimated Basic and Diluted Earnings (Loss) Per Share | For the three and nine months ended September 30, 2017 and 2016, Basic and Diluted net income (loss) per common share were as follows (in millions, except per share amounts):
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Antidilutive Equity Awards | In periods of income, the computation of Diluted net income (loss) per common share excludes certain equity awards because they are anti-dilutive. However, in periods of loss, all equity awards are excluded, as the inclusion of any equity awards would be anti-dilutive. Such equity awards are as set forth below (in millions):
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EQUITY-BASED COMPENSATION (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation expense recognized for equity-based awards | Compensation expense recognized for our equity-based awards for the three and nine months ended September 30, 2017 and 2016 was as follows (in millions):
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BENEFIT PLANS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Costs | Components of net periodic benefit cost (income) for the three and nine months ended September 30, 2017 and 2016 were as follows (in millions):
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RESTRUCTURING AND SEVERANCE COSTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected information relating to restructuring and severance costs | Selected information relating to Restructuring and severance costs is as follows (in millions):
_______________________
|
ADDITIONAL FINANCIAL INFORMATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of inventories | Additional financial information with respect to certain balances included in the Financial Statements herein is as follows (in millions):
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Prepaid and other current assets |
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Other assets |
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Accounts payable and accrued liabilities |
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Other noncurrent liabilities |
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Other expense, net |
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Supplemental schedule of cash flows |
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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) consumer in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2017
USD ($)
magazine
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
magazine
consumer
|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Description of Business and Basis of Presentation [Line Items] | |||||
Number of consumers | consumer | 230 | ||||
Net periodic benefit cost (income) | $ | $ (5) | $ (5) | $ (15) | $ (15) | $ (19) |
Outside the United States | |||||
Description of Business and Basis of Presentation [Line Items] | |||||
Number of U.K. magazine titles (more than) | magazine | 60 | 60 |
ACQUISITIONS AND DISPOSITIONS (Acquisitions) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 06, 2016 |
Mar. 02, 2016 |
Sep. 30, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Acquisitions | ||||||||
Acquisition consideration | $ 78 | $ 22 | $ 192 | |||||
Payments to acquire businesses, gross | $ 80 | |||||||
Bargain purchase (gain) | $ 0 | $ 0 | 0 | 3 | ||||
Other acquisitions | ||||||||
Acquisitions | ||||||||
Goodwill, expected tax deductible amount | 13 | 13 | ||||||
Viant | ||||||||
Acquisitions | ||||||||
Consideration transferred | $ 87 | 26 | ||||||
Bargain purchase (gain) | $ 3 | |||||||
Bargain purchase, reduction, amount | $ 2 | |||||||
Deferred tax liabilities, intangible assets | $ 3 | |||||||
consideration transferred equity interest, rate | 40.00% | |||||||
Contingent consideration, liability | $ 1 | 1 | ||||||
Expenses and losses recognized | $ 3 |
ACQUISITIONS AND DISPOSITIONS (Dispositions) (Details) - USD ($) $ in Millions |
9 Months Ended | ||||
---|---|---|---|---|---|
Jul. 27, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Dec. 31, 2016 |
Apr. 01, 2016 |
|
Dispositions | |||||
Assets | $ 4,118 | $ 4,305 | |||
INVNT | |||||
Dispositions | |||||
Assets | $ 5 | ||||
Liabilities | 4 | ||||
Gain (loss) on disposition | $ 1 | ||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | TOH | |||||
Dispositions | |||||
Assets | $ 27 | ||||
Liabilities | $ 10 | ||||
Gain (loss) on disposition | $ 11 |
INVESTMENTS (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
||||||||
Investments [Line Items] | ||||||||||||
Short-term investments | [1] | $ 0 | $ 0 | $ 40 | ||||||||
Equity-method investments | [2] | 7 | 7 | 9 | ||||||||
Cost-method investments | [3] | 4 | 4 | 6 | ||||||||
Total Investments | 11 | 11 | $ 55 | |||||||||
(Gain) loss on equity method investments | 1 | $ 1 | 3 | $ 12 | ||||||||
Cost-method investment impairment | 4 | 0 | 4 | 0 | ||||||||
Transaction Marketing Technology | ||||||||||||
Investments [Line Items] | ||||||||||||
Cost-method investments | $ 2 | $ 3 | $ 2 | $ 3 | ||||||||
Held-to-maturity Securities | Minimum | ||||||||||||
Investments [Line Items] | ||||||||||||
Term deposits original maturities | [1] | three months | ||||||||||
Held-to-maturity Securities | Maximum | ||||||||||||
Investments [Line Items] | ||||||||||||
Term deposits original maturities | [1] | one year | ||||||||||
|
FAIR VALUE MEASUREMENTS (Narrative) (Details) |
Sep. 30, 2017 |
---|---|
5.75% Senior Notes | |
Fair Value Measurements [Line Items] | |
Stated interest rate percentage | 5.75% |
FAIR VALUE MEASUREMENTS (Assets and Liabilities) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Goodwill impairment | $ 0 | $ 0 | $ 50 | $ 0 | ||||||
Accounts payable and accrued liabilities | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Contingent consideration | (1) | (1) | $ (1) | |||||||
Other noncurrent liabilities | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Contingent consideration | (1) | |||||||||
Recurring basis | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Total | 233 | 233 | 88 | |||||||
Recurring basis | Put option liability | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Contingent consideration | [1] | (10) | (10) | (10) | ||||||
Recurring basis | Contingent consideration | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Contingent consideration | [1] | (1) | (1) | (2) | ||||||
Recurring basis | Other Liabilities | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Other - liabilities | [2] | (3) | (3) | (2) | ||||||
Recurring basis | Cash and cash equivalents - Money market funds | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Cash and cash equivalents - Money market funds | 247 | 247 | 102 | |||||||
Recurring basis | Level 1 | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Total | 247 | 247 | 102 | |||||||
Recurring basis | Level 1 | Put option liability | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Contingent consideration | [1] | 0 | 0 | 0 | ||||||
Recurring basis | Level 1 | Contingent consideration | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Contingent consideration | [1] | 0 | 0 | 0 | ||||||
Recurring basis | Level 1 | Other Liabilities | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Other - liabilities | [2] | 0 | 0 | 0 | ||||||
Recurring basis | Level 1 | Cash and cash equivalents - Money market funds | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Cash and cash equivalents - Money market funds | 247 | 247 | 102 | |||||||
Recurring basis | Level 2 | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Total | 0 | 0 | 0 | |||||||
Recurring basis | Level 2 | Put option liability | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Contingent consideration | [1] | 0 | 0 | 0 | ||||||
Recurring basis | Level 2 | Contingent consideration | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Contingent consideration | [1] | 0 | 0 | 0 | ||||||
Recurring basis | Level 2 | Other Liabilities | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Other - liabilities | [2] | 0 | 0 | 0 | ||||||
Recurring basis | Level 2 | Cash and cash equivalents - Money market funds | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Cash and cash equivalents - Money market funds | 0 | 0 | 0 | |||||||
Recurring basis | Level 3 | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Total | (14) | (14) | (14) | |||||||
Recurring basis | Level 3 | Put option liability | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Contingent consideration | [1] | (10) | (10) | (10) | ||||||
Recurring basis | Level 3 | Contingent consideration | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Contingent consideration | [1] | (1) | (1) | (2) | ||||||
Recurring basis | Level 3 | Other Liabilities | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Other - liabilities | [2] | (3) | (3) | (2) | ||||||
Recurring basis | Level 3 | Cash and cash equivalents - Money market funds | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||||||||||
Cash and cash equivalents - Money market funds | $ 0 | $ 0 | $ 0 | |||||||
|
FAIR VALUE MEASUREMENTS (Derivative Liabilities) (Details) - Derivative Financial Instruments, Liabilities - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance as of January 1 | $ 14 | $ 19 |
Issuances | 2 | 2 |
Settlements | (2) | (1) |
Fair value adjustments | 0 | (3) |
Foreign exchange movements | 0 | (2) |
Other adjustments | 0 | (2) |
Ending Balance as of September 30 | $ 14 | $ 13 |
FAIR VALUE MEASUREMENTS (Other Financial Instruments) (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
5.75% Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Stated interest rate percentage | 5.75% | |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt | $ 1,223 | $ 1,240 |
Carrying Amount | Term Loan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt | 654 | 672 |
Carrying Amount | 5.75% Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt | 569 | 568 |
Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt | 1,250 | 1,284 |
Estimated Fair Value | Term Loan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt | 664 | 687 |
Estimated Fair Value | 5.75% Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt | $ 586 | $ 597 |
DEBT (Debt Obligations) (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Unamortized discount | $ (14) | $ (17) |
Total debt obligations | 1,223 | 1,240 |
Current portion of long-term debt | 7 | 7 |
Long-term debt | 1,216 | 1,233 |
5.75% Senior Notes | ||
Debt Instrument [Line Items] | ||
Total debt | $ 575 | 575 |
Stated interest rate percentage | 5.75% | |
Term Loan | ||
Debt Instrument [Line Items] | ||
Total debt | $ 662 | $ 682 |
DEBT (Senior Notes and Senior Credit Facilities) (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Oct. 11, 2017 |
Apr. 24, 2014 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
Nov. 30, 2015 |
Apr. 29, 2014 |
|
Debt Instrument [Line Items] | |||||||||
Debt repurchase authorization | $ 200,000,000 | ||||||||
Gains on extinguishment of debt | $ 0 | $ 0 | $ 0 | $ 4,000,000 | |||||
Debt remaining authorized repurchase amount | 60,000,000 | 60,000,000 | |||||||
Repayments of debt | 20,000,000 | 5,000,000 | |||||||
Selling, general and administrative expenses | 306,000,000 | $ 339,000,000 | 976,000,000 | 1,085,000,000 | |||||
Unamortized discount | $ 14,000,000 | $ 14,000,000 | $ 17,000,000 | ||||||
5.75% Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal debt amount | $ 700,000,000 | ||||||||
Stated interest rate percentage | 5.75% | 5.75% | |||||||
Face value of debt extinguished | 50,000,000 | ||||||||
Debt purchase price | 46,000,000 | ||||||||
Gains on extinguishment of debt | $ 4,000,000 | ||||||||
Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal debt amount | $ 700,000,000 | ||||||||
Maturity (in years) | 7 years | ||||||||
Payment for debt extinguishment or debt prepayment cost | $ 15,000,000 | ||||||||
Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maturity (in years) | 5 years | ||||||||
Maximum borrowing capacity | $ 500,000,000 | ||||||||
Revolving Credit Facility | Letters of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 100,000,000 | ||||||||
Letters of credit, amount utilized | $ 3,000,000 | $ 3,000,000 | |||||||
Maximum | Revolving Credit Facility | Letters of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Ratio of indebtedness to net capital | 2.75 | 2.75 | |||||||
Minimum | Revolving Credit Facility | Letters of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Ratio of indebtedness to net capital | 1.00 | 1.00 | |||||||
Subsequent Event | 5.75% Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate percentage | 5.75% | ||||||||
Subsequent Event | Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of debt | $ 200,000,000 | ||||||||
Subsequent Event | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | 500,000,000 | ||||||||
Subsequent Event | Senior Notes Due 2025 | 5.75% Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal debt amount | $ 300,000,000 | ||||||||
Stated interest rate percentage | 7.50% | ||||||||
Subsequent Event | 5.75% Percent Senior Note | 5.75% Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of debt | $ 100,000,000 | ||||||||
Subsequent Event | Amended And Restated Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Accordion feature, increase limit | 350,000,000 | ||||||||
Subsequent Event | Amended And Restated Credit Facility | Letters of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | 185,000,000 | ||||||||
Subsequent Event | Amended And Restated Credit Facility | 5.75% Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal debt amount | $ 100,000,000 | ||||||||
Stated interest rate percentage | 5.75% | ||||||||
Ratio of indebtedness to net capital | 2.50 | ||||||||
Subsequent Event | Amended And Restated Credit Facility | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 300,000,000 |
DEBT (Amended and Restated Credit Agreement) (Details) - USD ($) |
Oct. 11, 2017 |
Sep. 30, 2017 |
Apr. 29, 2014 |
Apr. 24, 2014 |
---|---|---|---|---|
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 500,000,000 | |||
5.75% Senior Notes | ||||
Line of Credit Facility [Line Items] | ||||
Aggregate principal debt amount | $ 700,000,000 | |||
Stated interest rate percentage | 5.75% | |||
Term Loan | ||||
Line of Credit Facility [Line Items] | ||||
Aggregate principal debt amount | $ 700,000,000 | |||
Subsequent Event | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 500,000,000 | |||
Subsequent Event | 5.75% Senior Notes | ||||
Line of Credit Facility [Line Items] | ||||
Stated interest rate percentage | 5.75% | |||
Subsequent Event | Amended And Restated Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Accordion feature, increase limit | $ 350,000,000 | |||
Subsequent Event | Amended And Restated Credit Facility | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Unused borrowing capacity, fee | 0.375% | |||
Subsequent Event | Amended And Restated Credit Facility | Letters of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 185,000,000 | |||
Subsequent Event | Amended And Restated Credit Facility | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 300,000,000 | |||
Subsequent Event | Amended And Restated Credit Facility | 5.75% Senior Notes | ||||
Line of Credit Facility [Line Items] | ||||
Aggregate principal debt amount | $ 100,000,000 | |||
Stated interest rate percentage | 5.75% | |||
Ratio of indebtedness to net capital | 2.50 | |||
Subsequent Event | Amended And Restated Credit Facility | Eurodollar | Term Loan | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 3.50% | |||
Debt instrument, interest rate, floor | 1.00% | |||
Subsequent Event | Amended And Restated Credit Facility | Base Rate | Term Loan | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.50% | |||
Subsequent Event | Minimum | Amended And Restated Credit Facility | Eurodollar | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.00% | |||
Subsequent Event | Minimum | Amended And Restated Credit Facility | Base Rate | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.00% | |||
Subsequent Event | Maximum | Amended And Restated Credit Facility | Eurodollar | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.25% | |||
Subsequent Event | Maximum | Amended And Restated Credit Facility | Base Rate | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.25% | |||
Initially | Subsequent Event | Amended And Restated Credit Facility | 5.75% Senior Notes | ||||
Line of Credit Facility [Line Items] | ||||
Ratio of indebtedness to net capital | 2.75 | |||
On or After June 30, 2019 | Subsequent Event | Amended And Restated Credit Facility | 5.75% Senior Notes | ||||
Line of Credit Facility [Line Items] | ||||
Ratio of indebtedness to net capital | 2.50 |
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
Jun. 30, 2017 |
|
Goodwill [Line Items] | ||||||
Amortization of intangible assets | $ 20,000,000 | $ 22,000,000 | $ 59,000,000 | $ 63,000,000 | ||
Goodwill impairment | 0 | $ 0 | 50,000,000 | $ 0 | ||
Goodwill | 2,048,000,000 | 2,048,000,000 | $ 2,069,000,000 | |||
SI Play | ||||||
Goodwill [Line Items] | ||||||
Goodwill impairment | 34,000,000 | |||||
Goodwill | 22,000,000 | $ 22,000,000 | $ 56,000,000 | |||
Fair Value Inputs, Discount Rate | 25.00% | |||||
Fair Value Inputs, Long-term Revenue Growth Rate | 3.00% | |||||
INVNT | ||||||
Goodwill [Line Items] | ||||||
Goodwill impairment | $ 16,000,000 | |||||
Goodwill | $ 0 | $ 0 | $ 16,000,000 | |||
Tradename | ||||||
Goodwill [Line Items] | ||||||
Finite-Lived intangible asset, useful life | 19 years | 18 years |
Goodwill and Intangible Assets (Change in Goodwill) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Goodwill [Roll Forward] | ||||
Balance, December 31, 2016(c) | $ 2,069 | |||
Acquisitions | 13 | |||
Impairments | $ 0 | $ 0 | (50) | $ 0 |
Foreign exchange movements | 16 | |||
Balance at end of period | 2,048 | 2,048 | ||
Goodwill, impaired, accumulated impairment loss | $ 16,000 | $ 16,000 |
Goodwill and Intangible Assets (Intangible Assets) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment | $ 0 | $ 0 | $ 50 | $ 0 | |
Asset impairments | 0 | $ 188 | 5 | $ 189 | |
Intangible asset, carrying value | 5 | 5 | |||
Intangible asset, fair value | 0 | 0 | |||
Gross | 1,757 | 1,757 | $ 1,743 | ||
Accumulated Amortization | (958) | (958) | (897) | ||
Intangible assets, net | 799 | $ 799 | $ 846 | ||
Tradename | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived intangible asset, useful life | 19 years | 18 years | |||
Gross | 1,086 | $ 1,086 | $ 1,084 | ||
Accumulated Amortization | (368) | (368) | (324) | ||
Intangible assets, net | 718 | $ 718 | $ 760 | ||
Customer Lists | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived intangible asset, useful life | 6 years | 6 years | |||
Gross | 671 | $ 671 | $ 659 | ||
Accumulated Amortization | (590) | (590) | (573) | ||
Intangible assets, net | 81 | 81 | 86 | ||
Capitalized software costs | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Capitalized computer software, gross | 53 | 53 | 48 | ||
Accumulated depreciation related to capitalized software | $ 23 | 23 | $ 15 | ||
INVNT | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment | $ 16 |
Goodwill and Intangible Assets (Estimated Amortization Expense) (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2017 | $ 19 | |
2018 | 76 | |
2019 | 73 | |
2020 | 69 | |
2021 | 66 | |
20222 | 65 | |
Thereafter | 431 | |
Total net intangible assets subject to amortization | $ 799 | $ 846 |
INCOME TAXES (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Tax Disclosure [Abstract] | |||||
Income tax provision (benefit) | $ 16 | $ (73) | $ (14) | $ (73) | |
Federal statutory rate (as a percent) | 54.00% | 39.00% | 41.00% | 20.00% |
STOCKHOLDERS' EQUITY AND NONCONTROLLING INTERESTS (Additional Information) (Details) - USD ($) $ / shares in Units, shares in Thousands |
3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 09, 2017 |
Sep. 15, 2017 |
Aug. 08, 2017 |
Jun. 15, 2017 |
May 10, 2017 |
Mar. 15, 2017 |
Feb. 16, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Nov. 30, 2015 |
|
Dividends Payable [Line Items] | ||||||||||||
Shares repurchased and retired during the period (shares) | 0 | |||||||||||
Dividends declared (usd per share) | $ 0.04 | $ 0.04 | $ 0.19 | $ 0.04 | $ 0.19 | $ 0.27 | $ 0.57 | |||||
Dividends paid | $ 4,000,000 | $ 4,000,000 | $ 19,000,000 | $ 27,000,000 | $ 58,000,000 | |||||||
2015 Share Repurchase Authorization | ||||||||||||
Dividends Payable [Line Items] | ||||||||||||
Share repurchase authorization, authorized amount | $ 300,000,000 | |||||||||||
Stock repurchase, remaining authorized repurchase amount | $ 123,000,000 | $ 123,000,000 | ||||||||||
Common Units | Minimum | ||||||||||||
Dividends Payable [Line Items] | ||||||||||||
Compensation cost not yet recognized, vesting period | 4 years | |||||||||||
Common Units | Maximum | ||||||||||||
Dividends Payable [Line Items] | ||||||||||||
Compensation cost not yet recognized, vesting period | 4 years 6 months | |||||||||||
Subsequent Event | ||||||||||||
Dividends Payable [Line Items] | ||||||||||||
Dividends declared (usd per share) | $ 0.04 |
STOCKHOLDERS' EQUITY AND NONCONTROLLING INTERESTS (Activity within Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
||||
Pre-tax | |||||||
Unrealized foreign currency translation gains | $ 11 | $ (10) | $ 35 | $ (53) | |||
Unrealized gains (losses) on benefit obligations | (10) | 5 | (29) | 26 | |||
Reclassification adjustment for (gains) losses on benefit obligations realized in net income (loss) attributable to Time Inc. | [1] | 2 | 1 | 5 | 3 | ||
Other comprehensive income (loss) | 3 | (4) | 11 | (24) | |||
Tax (Provision) Benefit | |||||||
Unrealized foreign currency translation gains (losses) | 0 | 0 | 0 | 0 | |||
Unrealized gains (losses) on benefit obligation | 2 | (1) | 5 | (5) | |||
Reclassification adjustment for (gains) losses on benefit obligations realized in net income (loss) attributable to Time Inc. | [1] | (1) | 0 | (1) | 0 | ||
Other comprehensive income (loss) | 1 | (1) | 4 | (5) | |||
Net of Tax | |||||||
Unrealized foreign currency translation gains | 11 | (10) | 35 | (53) | |||
Unrealized gains (losses) on benefit obligation | (8) | 4 | (24) | 21 | |||
Reclassification adjustment for (gains) losses on pension benefit obligations realized in Net income (loss) attributable to Time Inc. | [1] | 1 | 1 | 4 | 3 | ||
Other comprehensive income (loss) | $ 4 | $ (5) | $ 15 | $ (29) | |||
|
NET INCOME (LOSS) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to Time Inc. common stockholders | $ 13,000 | $ (112,400) | $ (59,000) | $ (104,390) |
Undistributed Earnings (Loss) Allocated to Participating Securities, Diluted | 0 | 0 | 0 | 0 |
Dilutive Securities, Effect on Basic Earnings Per Share | 0 | 0 | 0 | 0 |
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic | 0 | 0 | 0 | 0 |
Net Income (Loss) Available to Common Stockholders, Basic | $ 13,530 | $ (112,400) | $ (58,500) | $ (104,390) |
Weighted average basic common shares outstanding (in shares) | 99,860 | 99,640 | 99,740 | 99,430 |
Dilutive effect of equity awards (in shares) | 260 | 0 | 0 | 0 |
Net Income (Loss) Available to Common Stockholders, Diluted | $ 13,530 | $ (112,400) | $ (58,500) | $ (104,390) |
Weighted average diluted common shares outstanding (in shares) | 100,120 | 99,640 | 99,740 | 99,430 |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Basic (in dollars per share) | $ 0.14 | $ (1.13) | $ (0.59) | $ (1.05) |
Diluted (in dollars per share) | $ 0.14 | $ (1.13) | $ (0.59) | $ (1.05) |
Anti-dilutive equity awards | ||||
Antidilutive Securities Excluded from Computation of Earnings (Loss) Per Share [Line Items] | ||||
Anti-dilutive equity awards (in shares) | 8,000 | 9,000 | 9,000 | 8,000 |
EQUITY-BASED COMPENSATION (Narrative) (Details) shares in Millions |
9 Months Ended | |||
---|---|---|---|---|
Jul. 24, 2017
Rate
|
Feb. 13, 2017
condition
Rate
|
Sep. 30, 2017
shares
|
Sep. 30, 2016
shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of conditions to be met, weighting | 25.00% | 50.00% | ||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested (number of shares) | shares | 1 | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested (number of shares) | shares | 2 | 1 | ||
Executive Officer | Performance Shares | Performance options | Share-based Compensation Award, Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 50.00% | |||
Executive Officer | Performance Shares | Performance options | Share-based Compensation Award, Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 50.00% | |||
Executive Officer | Performance Shares | 2017 Performance Stock Unit Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of conditions to be met | condition | 2 | |||
Target performance, percent | 100.00% | |||
Executive Officer | Performance Shares | 2017 Performance Stock Unit Plan | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Target performance, percent | 50.00% | |||
Executive Officer | Performance Shares | 2017 Performance Stock Unit Plan | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Target performance, percent | 200.00% | |||
Executive Officer | Performance Shares | 2017 Performance Stock Unit Plan | Share-based Compensation Award, Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 50.00% | |||
Executive Officer | Performance Shares | 2017 Performance Stock Unit Plan | Share-based Compensation Award, Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 50.00% |
EQUITY-BASED COMPENSATION (Assumptions Used in Valuing Stock Options) (Details) - $ / shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 26.81% | |
Expected term to exercise from grant date (in years) | 2 years 7 months 18 days | |
Risk-free rate | 1.51% | |
Expected dividend yield | 1.20% | |
Weighted average grant date fair value per option | $ 2.42 | |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant date fair value per option | $ 14.42 |
EQUITY-BASED COMPENSATION (Schedule of Awards Granted and Weighted-Average Grant Date Fair Value) (Details) - $ / shares shares in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Average Grant Date Fair Value (in dollars per share) | $ 2.42 | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number Granted (in shares) | 1 | 2 |
Weighted Average Grant Date Fair Value (in dollars per share) | $ 17.19 | $ 12.84 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number Granted(in shares) | 0 | 3 |
Weighted Average Grant Date Fair Value (in dollars per share) | $ 14.42 | |
Performance options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number Granted(in shares) | 1 | |
Weighted Average Grant Date Fair Value (in dollars per share) | $ 14.20 | |
Outperformance plan performance stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number Granted (in shares) | 0 | 1 |
Weighted Average Grant Date Fair Value (in dollars per share) | $ 8.09 |
EQUITY-BASED COMPENSATION (Compensation Expense by Award Type) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total expense included in Operating income (loss) | $ 7 | $ 5 | $ 18 | $ 20 |
Income tax benefit recognized | 2 | 1 | 5 | 5 |
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total expense included in Operating income (loss) | 4 | 4 | 12 | 16 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total expense included in Operating income (loss) | 1 | 1 | 2 | 4 |
Other | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total expense included in Operating income (loss) | $ 2 | $ 0 | $ 4 | $ 0 |
BENEFIT PLANS (Components of Net Periodic Benefit Costs) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Retirement Benefits [Abstract] | |||||
Interest cost | $ 5 | $ 4 | $ 14 | $ 16 | |
Expected return on plan assets | (12) | (10) | (34) | (34) | |
Amortization of net loss | 2 | 1 | 5 | 3 | |
Net periodic benefit cost (income) | $ (5) | $ (5) | $ (15) | $ (15) | $ (19) |
BENEFIT PLANS (Narrative) (Details) £ in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
GBP (£)
|
Dec. 31, 2016
USD ($)
|
|
Defined Benefit Plan Disclosure [Line Items] | ||||||
Total other noncurrent liabilities | $ 333 | $ 333 | $ 328 | |||
Foreign Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Contributions by employer | 3 | $ 4 | 11 | $ 12 | ||
Outstanding debt threshold | $ 50 | $ 50 | ||||
Buyout deficit | £ | £ 287 |
RESTRUCTURING AND SEVERANCE COSTS (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Restructuring and Related Cost [Line Items] | ||||
Restructuring Reserve, Noncash Adjustments | $ 1 | |||
Net accruals | $ 26 | $ 43 | 73 | $ 54 |
Restructuring Reserve [Roll Forward] | ||||
Remaining liability, beginning balance | 98 | |||
Net accruals | 26 | 43 | 73 | 54 |
Cash paid | (90) | |||
Remaining liability, ending balance | 80 | 80 | ||
Remaining liability classified as current liability | 69 | 69 | ||
Remaining liability classified as long-term liability | 11 | 11 | ||
Employee Terminations | ||||
Restructuring and Related Cost [Line Items] | ||||
Restructuring Reserve, Noncash Adjustments | 2 | |||
Net accruals | 68 | |||
Restructuring Reserve [Roll Forward] | ||||
Remaining liability, beginning balance | 70 | |||
Net accruals | 68 | |||
Cash paid | (69) | |||
Remaining liability, ending balance | 67 | 67 | ||
Other Exit Costs | ||||
Restructuring and Related Cost [Line Items] | ||||
Restructuring Reserve, Noncash Adjustments | 1 | |||
Net accruals | 5 | |||
Restructuring Reserve [Roll Forward] | ||||
Remaining liability, beginning balance | 28 | |||
Net accruals | 5 | |||
Cash paid | (21) | |||
Remaining liability, ending balance | 13 | 13 | ||
Severance and Exit Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring reserve accrual adjustment | $ 1 | $ 1 | $ 4 | $ 8 |
COMMITMENTS AND CONTINGENCIES (Details) CAD in Millions |
Nov. 30, 2015
CAD
|
Sep. 13, 2013
CAD
|
Oct. 03, 2012
USD ($)
|
Nov. 14, 2011
USD ($)
|
Oct. 26, 2010
CAD
|
Jul. 27, 2015
consumers
|
---|---|---|---|---|---|---|
Loss Contingencies [Line Items] | ||||||
Loss contingency, damages sought, value | $ | $ 5,000 | $ 70,000,000 | ||||
Class action consumers | consumers | 40,000 | |||||
Foreign Tax Authority | Canada Revenue Agency | ||||||
Loss Contingencies [Line Items] | ||||||
Estimate of possible loss | CAD | CAD 91.0 | CAD 26.9 | CAD 52.0 |
ADDITIONAL FINANCIAL INFORMATION (Inventories) (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Additional Financial Information [Abstract] | ||
Raw materials - paper | $ 27 | $ 30 |
Finished goods | 2 | 1 |
Total inventories, net of reserves | $ 29 | $ 31 |
ADDITIONAL FINANCIAL INFORMATION Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Additional Financial Information [Abstract] | ||
Prepaid production costs | $ 24 | $ 20 |
Prepaid commissions | 17 | 18 |
Postage deposit | 15 | 12 |
Prepaid income taxes | 7 | 6 |
Due from Time Warner | 0 | 3 |
Other prepaid expenses and other current assets | 62 | 51 |
Total prepaid expenses and other current assets | $ 125 | $ 110 |
ADDITIONAL FINANCIAL INFORMATION Other Assets (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
|||||||
---|---|---|---|---|---|---|---|---|---|
Additional Financial Information [Abstract] | |||||||||
Deferred tax assets | $ 19 | $ 19 | |||||||
Notes receivable | [1] | 11 | 10 | ||||||
Equity-method investments | [2] | 7 | 9 | ||||||
Other tax asset | 6 | 6 | |||||||
Cost-method investments | [3] | 4 | 6 | ||||||
Display Racks | 4 | 4 | |||||||
Other noncurrent assets | 14 | 12 | |||||||
Total other assets | $ 65 | $ 66 | |||||||
|
ADDITIONAL FINANCIAL INFORMATION (Accounts Payable and Accrued Liabilities) (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
||
---|---|---|---|---|
Accounts payable and accrued liabilities: | ||||
Restructuring and severance | $ 69 | |||
Total accounts payable and accrued liabilities | 535 | $ 598 | ||
Accounts payable and accrued liabilities | ||||
Accounts payable and accrued liabilities: | ||||
Accounts payable | 201 | 232 | ||
Accrued compensation | 106 | 126 | ||
Restructuring and severance | 69 | 89 | ||
Rebates and allowances | 47 | 43 | ||
Distribution expenses payable | 25 | 28 | ||
Liability to Time Warner | 25 | 24 | ||
Accrued other taxes | 19 | 18 | ||
Accrued interest | 15 | 7 | ||
Deferred gain | [1] | 9 | 8 | |
Barter liabilities | 5 | 4 | ||
Contingent consideration | 1 | 1 | ||
Other current liabilities | 13 | 18 | ||
Total accounts payable and accrued liabilities | $ 535 | $ 598 | ||
|
ADDITIONAL FINANCIAL INFORMATION (Other Noncurrent Liabilities) (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
||
---|---|---|---|---|
Other noncurrent liabilities: | ||||
Restructuring and severance | $ 11 | |||
Total other noncurrent liabilities | 333 | $ 328 | ||
Other noncurrent liabilities | ||||
Other noncurrent liabilities: | ||||
Deferred rent | 137 | 112 | ||
Deferred gain | [1] | 64 | 64 | |
Noncurrent tax reserves and interest | 48 | 38 | ||
Noncurrent deferred compensation | 26 | 28 | ||
Noncurrent pension and postretirement liabilities(c) | 15 | 44 | ||
Restructuring and severance | 11 | 9 | ||
Put option liability | 10 | 10 | ||
Liability to Time Warner | 1 | 1 | ||
Contingent consideration | 0 | 1 | ||
Other noncurrent liabilities | 21 | 21 | ||
Total other noncurrent liabilities | $ 333 | $ 328 | ||
|
ADDITIONAL FINANCIAL INFORMATION (Other Expense, Net) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Additional Financial Information [Abstract] | ||||
Investment (gains) losses, net | $ 2 | $ 1 | $ 4 | $ 1 |
(Income) loss on equity-method investments | 1 | 1 | 3 | 12 |
(Gain) loss on extinguishment of debt | 0 | 0 | 0 | (4) |
Other (income) expense | 3 | 0 | 3 | 0 |
Total other (income) expense, net | $ 6 | $ 2 | $ 10 | $ 9 |
ADDITIONAL FINANCIAL INFORMATION (Cash Flows) (Details) £ in Millions, $ in Millions |
6 Months Ended | 9 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Jun. 30, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2016
GBP (£)
|
|
Debt Instrument [Line Items] | ||||
Cash payments made for income taxes | $ 8 | $ 2 | ||
Income tax refund received | (4) | (58) | ||
Cash tax (receipts) payments, net | 4 | (56) | ||
Cash payments made for interest | 40 | 41 | ||
Interest income received | (2) | (1) | ||
Cash interest (receipts) payments, net | $ 38 | $ 40 | ||
UK Printer | ||||
Debt Instrument [Line Items] | ||||
Loan issued | £ | £ 10.0 | |||
Stated interest rate percentage | 8.00% | |||
Maturity (in years) | 5 years | |||
Repayment of principal | £ | £ 0.3 | |||
Principal payment at end of term | £ | £ 5.0 | |||
UK Printer | Prepaid Expenses and Other Current Assets | ||||
Debt Instrument [Line Items] | ||||
Loan issued | $ 1 | |||
UK Printer | Other Assets | ||||
Debt Instrument [Line Items] | ||||
Loan issued | $ 10 |
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