x | ANNUAL 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 | 47-2390983 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
7950 Jones Branch Drive, McLean, Virginia | 22107-0910 | |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Stock, par value $0.01 per share | The New York Stock Exchange |
Large accelerated filer | x | Accelerated filer | ¨ | Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
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• | Retail advertising is associated with local merchants or locally owned businesses. Retail includes regional and national chains (such as department and grocery stores) that sell in the local market. |
• | National advertising is principally from advertisers who are promoting national products or brands. Examples are pharmaceuticals, travel, airlines, or packaged goods. Both retail and national ads also include preprints, typically stand-alone multiple page fliers that are inserted in the daily and Sunday print product. |
• | Classified advertising includes the major categories of automotive, employment, legal, and real estate/rentals. Advertising for classified segments is published in the classified sections or other sections within the publication, on affiliated digital platforms, and certain magazines. |
Title | Related Website(s) | Location | Daily(a) | Sunday(a) | ||||||
USA TODAY | www.usatoday.com | McLean, Virginia | 3,601,833 | 3,375,646 | ||||||
Detroit Free Press | www.freep.com | Detroit, Michigan | 240,510 | 925,051 | ||||||
The Record | www.therecord.northjersey.com | Bergen Co., New Jersey | 235,681 | 147,609 | ||||||
The Arizona Republic | www.azcentral.com | Phoenix, Arizona | 184,881 | 464,714 | ||||||
Milwaukee Journal Sentinel | www.jsonline.com | Milwaukee, Wisconsin | 146,450 | 229,137 | ||||||
Indianapolis Star | www.indystar.com | Indianapolis, Indiana | 115,785 | 234,915 | ||||||
Cincinnati Enquirer | www.cincinnati.com | Cincinnati, Ohio | 107,576 | 179,857 | ||||||
Courier-Journal | www.courier-journal.com | Louisville, Kentucky | 100,741 | 190,191 | ||||||
Des Moines Register | www.desmoinesregister.com | Des Moines, Iowa | 81,055 | 160,839 | ||||||
Democrat and Chronicle | www.democratandchronicle.com | Rochester, New York | 79,771 | 124,324 |
(a) | Daily and Sunday combined average circulation is print, digital replica, digital non-replica, and affiliated publications according to the Alliance for Audited Media's December 2016 Quarterly Publisher's Statement. |
USA TODAY NETWORK MEDIA ORGANIZATIONS AND AFFILIATED DIGITAL PLATFORMS | ||||||||
State / Territory | Number of Local Media Organizations | Daily(a) | Sunday(a) | |||||
Alabama | 1 | 19,248 | 25,231 | |||||
Arkansas | 1 | 6,961 | 176 | |||||
California | 5 | 101,490 | 99,794 | |||||
Colorado | 1 | 19,746 | 23,404 | |||||
Delaware | 1 | 55,383 | 93,645 | |||||
Florida | 6 | 244,175 | 348,166 | |||||
Guam | 1 | 10,819 | 8,882 | |||||
Indiana | 4 | 82,173 | 107,473 | |||||
Iowa | 1 | 9,084 | 800 | |||||
Kentucky | 1 | 5,874 | 7,089 | |||||
Louisiana | 5 | 73,791 | 92,188 | |||||
Maryland | 1 | 10,621 | 13,734 | |||||
Michigan | 4 | 62,513 | 181,027 | |||||
Minnesota | 1 | 14,016 | 19,044 | |||||
Mississippi | 2 | 45,730 | 53,429 | |||||
Missouri | 1 | 25,494 | 46,690 | |||||
Montana | 1 | 21,354 | 21,372 | |||||
Nevada | 1 | 30,017 | 49,987 | |||||
New Jersey | 7 | 143,395 | 183,725 | |||||
New Mexico | 6 | 34,426 | 42,381 | |||||
New York | 5 | 112,009 | 134,487 | |||||
North Carolina | 1 | 26,344 | 45,330 | |||||
Ohio | 10 | 64,208 | 64,530 | |||||
Oregon | 1 | 25,894 | 32,740 | |||||
Pennsylvania | 4 | 62,044 | 85,405 | |||||
South Carolina | 2 | 55,765 | 115,653 | |||||
South Dakota | 1 | 27,447 | 53,890 | |||||
Tennessee | 6 | 229,346 | 401,427 | |||||
Utah | 1 | 11,584 | 13,917 | |||||
Texas | 5 | 101,493 | 193,339 | |||||
Vermont | 1 | 22,642 | 24,207 | |||||
Virginia | 1 | 10,850 | 12,588 | |||||
Washington | 1 | 23,210 | 18,213 | |||||
Wisconsin | 10 | 141,186 | 171,014 |
(a) | Daily and Sunday combined average circulation is print, digital replica, digital non-replica, and affiliated publications according to the Alliance for Audited Media's December 2016 Quarterly Publisher's Statement. |
DAILY PAID-FOR LOCAL MEDIA ORGANIZATIONS AND AFFILIATED DIGITAL PLATFORMS / NEWSQUEST | |||
Publication | City | Local Media Organization / Web Site | Circulation Monday - Saturday |
Basildon & Southend Echo | Basildon, Southend on Sea | www.echo-news.co.uk | 18,996 |
Bolton News | Bolton | www.theboltonnews.co.uk | 10,172 |
Bournemouth - The Daily Echo | Bournemouth | www.bournemouthecho.co.uk | 13,987 |
Bradford Telegraph & Argus | Bradford | www.thetelegraphandargus.co.uk | 14,813 |
Colchester Daily Gazette | Colchester | www.gazette-news.co.uk | 9,866 |
Dorset Echo | Dorset | www.dorsetecho.co.uk | 10,944 |
Glasgow - Evening Times | Glasgow | www.eveningtimes.co.uk | 25,679 |
Greenock Telegraph | Greenock | www.greenocktelegraph.co.uk | 10,511(a) |
Lancashire Telegraph | Blackburn, Burnley | www.lancashiretelegraph.co.uk | 11,807 |
Oxford Mail | Oxford | www.oxfordmail.co.uk | 10,777 |
South Wales Argus - Newport | Newport | www.southwalesargus.co.uk | 11,344 |
Southampton - Southern Daily Echo | Southampton | www.dailyecho.co.uk | 17,521 |
Swindon Advertiser | Swindon | www.swindonadvertiser.co.uk | 10,056 |
The Argus Brighton | Brighton | www.theargus.co.uk | 11,424 |
The Herald, Scotland | Glasgow, Edinburgh | www.heraldscotland.co.uk | 30,402 |
The National, Scotland | Glasgow, Edinburgh | www.thenational.scot | 12,124(a) |
The Northern Echo | Darlington | www.thisisthenortheast.co.uk | 25,290 |
The Press - York | York | www.yorkpress.co.uk | 15,428 |
Worcester News | Worcester | www.worcesternews.co.uk | 7,422 |
(a) | Circulation figures are according to ABC results for the period January to December 2015 as 2016 results are not available. |
• | continue to increase digital audiences; |
• | attract advertisers to our digital products; |
• | tailor our products for mobile devices; |
• | structure our sales force to focus more effort on sales of digital rather than print; |
• | attract and retain employees with the skills and knowledge needed to successfully operate digital businesses; |
• | manage the transition to a digital business from historical print businesses, including by reducing the physical and distribution infrastructure and related fixed costs associated with those businesses; and |
• | invest funds and resources in digital opportunities. |
• | rates we achieve in the marketplace for the advertising inventory on our digital platforms may be adversely affected by: |
◦ | news aggregation websites and customized news feeds (often free to users), which may reduce our traffic levels by creating a disincentive for users to visit our websites or use our digital products; |
◦ | our inability to successfully manage changes in search engine optimization and social media traffic to increase our digital presence and visibility, which also may reduce our traffic levels; or |
◦ | our inability to maintain and improve the performance of our customers' advertising on our digital properties; |
• | our use of subscription models (which may require users to pay for content after accessing a limited number of pages or news articles for free on our websites each month) may cause consumers to opt out of subscription offers in greater numbers than anticipated or result in fewer page views or unique visitors to our websites than projected; |
• | technical or other problems could prevent us from delivering our products in a rapid and reliable manner or otherwise affect the user experience, and users could develop negative views about the quality or usefulness of our products; |
• | new delivery platforms may lead to pricing restrictions, loss of distribution control, or loss of direct relationships with consumers; |
• | mobile devices, including smartphones and tablets, may present challenges for traditional display advertising; and |
• | technology developed to block the display of advertising on websites could proliferate, impairing our ability to generate digital revenues. |
• | declines in overall newsprint supply due to paper mill closures or conversions to other grades of paper; |
• | increases in supplier operating expenses due to rising raw material or energy costs or other factors; |
• | reduction in the number of suppliers due to continuing consolidation of newsprint mills in the U.S. and Canada; |
• | decreases in our current consumption levels; and |
• | our inability to maintain existing relationships with our newsprint suppliers. |
• | improper disclosures of personal data or confidential information; |
• | expenditures of significant resources to remedy the breach and defend against further attacks; |
• | diversion of management's attention and resources; and |
• | liability under laws that protect personal data. |
• | distraction of management attention from our current business operations; |
• | strain on our human resources; |
• | insufficient new revenue to offset expenses; |
• | integration challenges arising from combining company cultures and facilities; |
• | failure to achieve expected synergies or implement effective cost controls; |
• | inability to integrate acquired digital products, services or technologies into our existing business's offerings; |
• | inability to retain key employees of acquired businesses; |
• | applicability of new regulatory or foreign law requirements; and |
• | liabilities and other exposures not discovered in our due diligence process. |
• | our inability to control the operations of our investee or partner; |
• | our investee or partner's failure to achieve its business or financial goals or otherwise successfully implement its business plan; or |
• | our inability to monetize an investment due to transfer restrictions and our lack of control over the timing or process for any potential disposition of our equity interest. |
• | challenges or uncertainties arising from unexpected legal, political, or systemic events such as Brexit; |
• | difficulties or delays in developing a network of clients in international markets; |
• | restrictions on the ability of U.S. companies to do business in foreign countries; |
• | different legal or regulatory requirements, including with respect to internet services, privacy and data protection, censorship, banking and money transmitting, and selling, which may limit or prevent the offering of our products in some jurisdictions or otherwise harm our business; |
• | international intellectual property laws that may be insufficient to protect our intellectual property or permit us to successfully defend our intellectual property in international lawsuits; |
• | different employee/employer relationships and the existence of workers' councils and labor unions, which could make it more difficult to terminate underperforming salespeople; |
• | difficulties in staffing and managing foreign operations; |
• | difficulties in accounts receivable collection; |
• | currency fluctuations and price controls or other restrictions on foreign currency; |
• | potential adverse tax consequences including difficulties in repatriating earnings generated abroad; and |
• | lack of infrastructure to adequately conduct electronic commerce transactions. |
• | entering into any transaction resulting in the acquisition of 40% or more of our stock or substantially all of our assets, whether by merger or otherwise; |
• | merging, consolidating, or liquidating; |
• | issuing equity securities beyond certain thresholds; |
• | repurchasing our capital stock beyond certain thresholds; and |
• | ceasing to actively conduct our business. |
• | permit certain liens on current or future assets; |
• | enter into certain corporate transactions; |
• | incur additional indebtedness; |
• | make certain payments or declare certain dividends or distributions; |
• | dispose of certain property; |
• | prepay or amend the terms of other indebtedness; and |
• | enter into certain transactions with affiliates. |
• | authorize the issuance of preferred stock that could be issued by our Board of Directors to thwart a takeover attempt; |
• | provide that vacancies on our Board of Directors, including vacancies resulting from an enlargement of our Board, may be filled only by a majority vote of directors then in office; |
• | place limits on which stockholders may call special meetings of stockholders and limit the actions that may be taken at such stockholder-called special meetings; |
• | prohibit stockholder action by written consent; and |
• | establish advance notice requirements for nominations of candidates for elections as directors or to bring other business before an annual meeting of our stockholders. |
Year | Quarter | Low | High | |||||
2015 | Second | $ | 13.35 | $ | 15.05 | |||
Third | $ | 10.75 | $ | 14.75 | ||||
Fourth | $ | 13.76 | $ | 17.91 | ||||
2016 | First | $ | 13.27 | $ | 16.77 | |||
Second | $ | 14.10 | $ | 17.72 | ||||
Third | $ | 11.25 | $ | 14.42 | ||||
Fourth | $ | 7.30 | $ | 12.39 | ||||
2017 | First (a) | $ | 8.24 | $ | 10.22 |
(a) | Through February 17, 2017. |
Period | Number of Shares Repurchased | Weighted Average Cost per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares that May Yet Be Repurchased Under the Program | |||||||||
Repurchases from October, 31 2016 through November 27, 2016 | 3,750,000 | $ | 8.71 | 3,750,000 | $ | 117,332,871 |
• | A.H. Belo Corporation |
• | Lee Enterprises, Inc. |
• | The McClatchy Company |
• | Meredith Corporation |
• | New Media Investment Group, Inc. |
• | The New York Times Company |
• | News Corporation |
• | Time, Inc. |
• | tronc, Inc. |
• | Angie's List, Inc. |
• | Yelp Inc. |
• | Harte-Hanks, Inc. |
Jun. 2015 | Sept. 2015 | Dec. 2015 | Mar. 2016 | Jun. 2016 | Sept. 2016 | Dec. 2016 | |||||||||||||||||||||
Gannett Co., Inc. | $ | 100.00 | $ | 105.51 | $ | 117.16 | $ | 112.38 | $ | 104.76 | $ | 87.86 | $ | 75.08 | |||||||||||||
S&P 500 Index | $ | 100.00 | $ | 93.82 | $ | 101.23 | $ | 100.57 | $ | 101.19 | $ | 108.07 | $ | 113.66 | |||||||||||||
Peer Group | $ | 100.00 | $ | 81.03 | $ | 88.00 | $ | 80.17 | $ | 81.36 | $ | 96.22 | $ | 91.76 |
In thousands, except per share amounts | |||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
(Unaudited) | |||||||||||||||||||
Total operating revenue | $ | 3,047,474 | $ | 2,885,012 | $ | 3,171,878 | $ | 3,324,939 | $ | 3,470,007 | |||||||||
Operating income | $ | 79,088 | $ | 169,431 | $ | 262,331 | $ | 325,073 | $ | 331,413 | |||||||||
Net income | $ | 52,710 | $ | 146,091 | $ | 210,705 | $ | 274,461 | $ | 277,230 | |||||||||
Net income per share - basic | $ | 0.45 | $ | 1.27 | $ | 1.83 | $ | 2.39 | $ | 2.41 | |||||||||
Net income per share - diluted | $ | 0.44 | $ | 1.25 | $ | 1.83 | $ | 2.39 | $ | 2.41 | |||||||||
Other selected financial data | |||||||||||||||||||
Dividends declared per share | $ | 0.64 | $ | 0.32 | $ | — | $ | — | $ | — | |||||||||
Weighted average number of common shares outstanding: | |||||||||||||||||||
Basic | 116,018 | 115,165 | 114,959 | 114,959 | 114,959 | ||||||||||||||
Diluted | 118,625 | 116,695 | 114,959 | 114,959 | 114,959 | ||||||||||||||
Financial position and cash flow | |||||||||||||||||||
Cash and cash equivalents | $ | 114,324 | $ | 196,696 | $ | 71,947 | $ | 78,596 | $ | 134,096 | |||||||||
Long-term debt, excluding current maturities | $ | 400,000 | $ | — | $ | — | $ | — | $ | — | |||||||||
Total assets | $ | 2,844,681 | $ | 2,427,799 | $ | 2,384,460 | $ | 2,494,736 | $ | 2,839,691 |
Year | Name | Location | Description |
2015 | Texas-New Mexico Newspapers Partnership | Texas, New Mexico, Pennsylvania | Media company with print and digital publishing operations |
Romanes Media Group | Scotland, Berkshire, Northern Ireland | Media company with print and digital publishing operations | |
2016 | Journal Media Group | Milwaukee, Wisconsin | Media company with print and digital publishing operations |
North Jersey Media Group | Woodland Park, New Jersey | Media company with print and digital publishing operations | |
ReachLocal | Woodland Hills, California | Digital marketing solutions firm |
• | Macroeconomic trends and conditions; |
• | An accelerated decline in general print readership and/or advertiser patterns as a result of competitive alternative media or other factors; |
• | An inability to adapt to technological changes or grow our digital businesses; |
• | Risks associated with the operation of an increasingly digital business, such as rapid technological changes, frequent new product introductions, declines in web traffic levels, technical failures and proliferation of ad blocking technologies; |
• | Competitive pressures in the markets in which we operate; |
• | An increase in newsprint costs over the levels anticipated; |
• | Potential disruption or interruption of our IT systems due to accidents, extraordinary weather events, civil unrest, political events, terrorism or cyber security attacks; |
• | Variability in the exchange rate relative to the U.S. dollar of currencies in foreign jurisdictions in which we operate; |
• | Risks and uncertainties related to strategic acquisitions or investments, including distraction of management attention, incurrence of additional debt, integration challenges, and failure to realize expected benefits or synergies or to operate businesses effectively following acquisitions; |
• | Risks and uncertainties associated with our ReachLocal segment, including its significant reliance on Google for media purchases, its international operations and its ability to develop and gain market acceptance for new products or services; |
• | Our ability to protect our intellectual property or defend successfully against infringement claims; |
• | Our ability to attract and retain employees; |
• | Labor relations, including, but not limited to, labor disputes which may cause business interruptions, revenue declines or increased labor costs; |
• | Risks associated with our underfunded pension plans; |
• | Adverse outcomes in litigation or proceedings with governmental authorities or administrative agencies, or changes in the regulatory environment, any of which could encumber or impede our efforts to improve operating results or the value of assets; |
• | Our inability to engage in certain corporate transactions following the separation; |
• | Volatility in financial and credit markets which could affect the value of retirement plan assets and our ability to raise funds through debt or equity issuances and otherwise affect our ability to access the credit and capital markets at the times and in the amounts needed and on acceptable terms; and |
• | Other uncertainties relating to general economic, political, business, industry, regulatory and market conditions. |
• | Acquisition of ReachLocal, Inc. (ReachLocal) – In August 2016, we completed the acquisition of 100% of the outstanding common stock of ReachLocal, which offers online marketing, digital advertising, software-as-a-service, and web presence products and solutions to small and medium sized businesses. Our year-to-date 2016 results reflect revenues of $110.1 million since the acquisition. In connection with the ReachLocal acquisition, we established a separate reportable segment that reflects its results since the acquisition date. |
• | Acquisition of Certain Assets of North Jersey Media Group (NJMG) – In July 2016, we completed the acquisition of certain assets of NJMG, a media company with print and digital publishing operations serving primarily the northern New Jersey market. Our year-to-date 2016 results reflect revenues of $40.5 million since the acquisition. |
• | Acquisition of Journal Media Group (JMG) – In April 2016, we completed the acquisition of 100% of the outstanding common stock of JMG, a media company with print and digital publishing operations serving 15 U.S. markets in nine states. Our year-to-date 2016 results reflect revenues of $299.8 million since the acquisition. |
• | Acquisition of Texas-New Mexico Newspaper Partnership (TNP) and Romanes Media Group (RMG) – In June 2015, we completed the acquisition of the remaining 59.4% interest in TNP that we did not own from Digital First Media. We completed the acquisition through the assignment of our 19.5% interest in the California Newspapers Partnership (CNP) and additional cash consideration. Our year-to-date 2016 results reflect TNP revenues of $70.8 million and $46.3 million in 2016 and 2015, respectively. In May 2015, Newsquest acquired RMG, one of the leading regional media groups in the U.K. RMG publishes local newspapers in Scotland, Berkshire, and Northern Ireland, and its portfolio is comprised of one daily newspaper and 28 weekly newspapers and their associated websites. Our year-to-date 2016 results reflect RMG revenues of $21.2 million and $15.9 million in 2016 and 2015, respectively. |
• | Facility Consolidation and Asset Impairment Charges – We evaluated the carrying values of property, plant, and equipment at certain sites because of facility consolidation efforts, and we revised the useful lives of certain assets to reflect the use of those assets over a shortened period as a result. In addition, we had asset impairment charges related to our intangible assets. We recorded pre-tax charges for facility consolidations and asset impairments of $58.2 million in 2016, $34.3 million in 2015, and $35.2 million in 2014. We also recorded accelerated depreciation of $3.2 million in 2016 as well as non-operating impairments of $3.1 million in 2016 and $0.7 million in 2015. No accelerated depreciation was recorded in 2015 and 2014, and no non-operating impairments were recorded in 2014. |
• | Severance-related Expenses – We have initiated various cost reduction and severance-related actions. |
• | New Digital Agreements – Beginning in the third quarter of 2015 and in conjunction with the execution of new agreements with businesses owned by our former parent following the separation (principally cars.com and CareerBuilder), we began reporting wholesale fees associated with sales of certain third party digital advertising products and services on a net basis as a reduction of the associated digital advertising revenues rather than in operating expenses in our Consolidated and Combined Statements of Income. There is no impact on operating income, operating cash flows, net income, or earnings per share. In 2016, from the beginning of the year through the anniversary date of the new agreements, there was $30.1 million of revenue negatively impacted by the new agreements. In 2015, from the date of the new agreements through the end of the year, there was $33.0 million of revenue negatively impacted by the new agreements. |
• | Foreign Currency – In 2016, there was a weakening in the British pound sterling to the U.S. dollar. With respect to Newsquest, results for the year ended December 25, 2016 were translated from the British pound sterling to U.S. dollars at an average rate of 1.36 compared to 1.53 for the year ended December 27, 2015. This 11% decline in the exchange rate unfavorably impacted 2016 revenue comparisons by approximately $42 million. |
In thousands, except per share amounts | |||||||||||||||||
2016 | 2015 | Change | 2014 | Change | |||||||||||||
Operating revenues: | |||||||||||||||||
Publishing | $ | 2,933,095 | $ | 2,881,218 | 2 | % | $ | 3,171,878 | (9 | %) | |||||||
ReachLocal | 110,144 | — | *** | — | *** | ||||||||||||
Corporate and other | 4,235 | 3,794 | 12 | % | — | *** | |||||||||||
Total operating revenues | 3,047,474 | 2,885,012 | 6 | % | 3,171,878 | (9 | %) | ||||||||||
Operating expenses: | |||||||||||||||||
Publishing | 2,692,036 | 2,624,626 | 3 | % | 2,877,380 | (9 | %) | ||||||||||
ReachLocal | 128,872 | — | *** | — | *** | ||||||||||||
Corporate and other | 147,478 | 90,955 | 62 | % | 32,167 | *** | |||||||||||
Total operating expenses | 2,968,386 | 2,715,581 | 9 | % | 2,909,547 | (7 | %) | ||||||||||
Operating income | 79,088 | 169,431 | (53 | %) | 262,331 | (35 | %) | ||||||||||
Non-operating income (expense), net | (12,660 | ) | 24,544 | *** | 15,934 | 54 | % | ||||||||||
Income before income taxes | 66,428 | 193,975 | (66 | %) | 278,265 | (30 | %) | ||||||||||
Provision for income taxes | 13,718 | 47,884 | (71 | %) | 67,560 | (29 | %) | ||||||||||
Net income | $ | 52,710 | $ | 146,091 | (64 | %) | $ | 210,705 | (31 | %) | |||||||
Diluted earnings per share | $ | 0.44 | $ | 1.25 | (65 | %) | $ | 1.83 | (32 | %) |
• | Less: revenues or expenses for our 2016 publishing acquisitions from the date of the acquisition through the end of the year |
• | Less: revenues or expenses for our 2015 publishing acquisitions from the beginning of fiscal year 2016 through the first year anniversary of their applicable acquisition date |
• | Add (less): decreases (increases) in foreign currency translation impacts based on a constant currency calculation |
• | Less: revenues or expenses for our 2015 publishing acquisitions from the date of the acquisition through the end of the year |
• | Less: revenues or expenses for our 2014 publishing acquisitions from the beginning of fiscal year 2015 through the first year anniversary of their applicable acquisition date |
• | Add (less): decreases (increases) in foreign currency translation impacts based on a constant currency calculation |
In thousands | |||||||||||||||||
2016 | 2015 | Change | 2014 | Change | |||||||||||||
Operating revenues: | |||||||||||||||||
Advertising | $ | 1,603,515 | $ | 1,611,445 | — | % | $ | 1,840,067 | (12 | %) | |||||||
Circulation | 1,133,676 | 1,060,118 | 7 | % | 1,109,729 | (4 | %) | ||||||||||
Other | 195,904 | 209,655 | (7 | %) | 222,082 | (6 | %) | ||||||||||
Total operating revenues | 2,933,095 | 2,881,218 | 2 | % | 3,171,878 | (9 | %) | ||||||||||
Operating expenses: | |||||||||||||||||
Cost of sales | 1,896,679 | 1,864,940 | 2 | % | 1,997,364 | (7 | %) | ||||||||||
Selling, general, and administrative expenses | 632,084 | 622,224 | 2 | % | 739,855 | (16 | %) | ||||||||||
Depreciation | 99,004 | 91,548 | 8 | % | 91,060 | 1 | % | ||||||||||
Amortization | 6,098 | 11,636 | (48 | %) | 13,885 | (16 | %) | ||||||||||
Facility consolidation and asset impairment charges | 58,171 | 34,278 | 70 | % | 35,216 | (3 | %) | ||||||||||
Total operating expenses | 2,692,036 | 2,624,626 | 3 | % | 2,877,380 | (9 | %) | ||||||||||
Operating income | $ | 241,059 | $ | 256,592 | (6 | %) | $ | 294,498 | (13 | %) |
In thousands | |||
2016 | |||
Operating revenues: | |||
Advertising | $ | 100,280 | |
Other | 9,864 | ||
Total operating revenues | 110,144 | ||
Operating expenses: | |||
Cost of sales | 67,958 | ||
Selling, general, and administrative expenses | 48,678 | ||
Depreciation and amortization | 12,236 | ||
Total operating expenses | 128,872 | ||
Operating loss | $ | (18,728 | ) |
Active Clients (a) | 15,300 | ||
Active Product Units (b) | 27,900 |
(a) | Active Clients is a number calculated to approximate the number of clients served. Active Clients is calculated by adjusting the number of Active Product Units to combine clients with more than one Active Product Unit as a single Active Client. Clients with more than one location are generally reflected as multiple Active Clients. Because this number includes clients served through the National Brands, Agencies, and Resellers channel, Active Clients includes entities with which ReachLocal does not have a direct client relationship. Our National Brands, Agencies and Resellers channel is our separate sales channel targeting national brands, franchise and strategic accounts with operations in multiple local markets, as well as select third-party agencies and resellers. Numbers are rounded to the nearest hundred. |
(b) | Active Product Units is a number we calculate to approximate the number of individual products, licenses, or services we are providing under contract for Active Clients. For example, if we were performing both ReachSearch and ReachDisplay campaigns for a client that also licenses ReachEdge, we consider that three Active Product Units. Similarly, if a client purchases ReachSearch campaigns for two different products or purposes, we consider that two Active Product Units. Numbers are rounded to the nearest hundred. |
In thousands | |||||||||||
2016 | 2015 | 2014 | |||||||||
Net cash flow from operating activities | $ | 165,555 | $ | 231,020 | $ | 346,138 | |||||
Net cash flow used for investing activities | (519,073 | ) | (43,312 | ) | (31,772 | ) | |||||
Net cash flow from (used for) financing activities | 271,418 | (62,766 | ) | (320,735 | ) | ||||||
Effect of currency exchange rate change | (272 | ) | (193 | ) | (280 | ) | |||||
Net increase (decrease) in cash | $ | (82,372 | ) | $ | 124,749 | $ | (6,649 | ) |
In thousands | |||||||||||||||||
2016 | Change | 2015 | Change | 2014 | |||||||||||||
Net income (GAAP basis) | $ | 52,710 | (64 | %) | $ | 146,091 | (31 | %) | $ | 210,705 | |||||||
Provision for income taxes | 13,718 | (71 | %) | 47,884 | (29 | %) | 67,560 | ||||||||||
Equity income in unconsolidated investees, net | (1,519 | ) | (87 | %) | (11,981 | ) | (24 | %) | (15,857 | ) | |||||||
Interest expense | 12,791 | *** | 4,562 | *** | 576 | ||||||||||||
Other non-operating items | 1,388 | *** | (17,125 | ) | *** | (653 | ) | ||||||||||
Operating income (GAAP basis) | $ | 79,088 | (53 | %) | $ | 169,431 | (35 | %) | $ | 262,331 | |||||||
Early retirement program | 837 | (98 | %) | 42,081 | *** | — | |||||||||||
Severance-related charges | 42,689 | 41 | % | 30,185 | 52 | % | 19,797 | ||||||||||
Acquisition-related items | 32,683 | *** | — | *** | — | ||||||||||||
Facility consolidation and asset impairment charges | 58,171 | 70 | % | 34,278 | (3 | %) | 35,216 | ||||||||||
Other items | 3,181 | (60 | %) | 7,988 | (82 | %) | 43,804 | ||||||||||
Depreciation | 118,092 | 23 | % | 95,916 | (1 | %) | 97,178 | ||||||||||
Amortization | 14,872 | 28 | % | 11,636 | (16 | %) | 13,885 | ||||||||||
Adjusted EBITDA (non-GAAP basis) | $ | 349,613 | (11 | %) | $ | 391,515 | (17 | %) | $ | 472,211 |
In thousands | |||||||||||||||||
2016 | Change | 2015 | Change | 2014 | |||||||||||||
Operating income (GAAP basis) | $ | 241,059 | (6 | %) | $ | 256,592 | (13 | %) | $ | 294,498 | |||||||
Early retirement program | 837 | (98 | %) | 36,772 | *** | — | |||||||||||
Severance-related charges | 41,963 | 39 | % | 30,185 | 52 | % | 19,797 | ||||||||||
Acquisition-related items | 777 | *** | — | *** | — | ||||||||||||
Facility consolidation and asset impairment charges | 58,171 | 70 | % | 34,278 | (3 | %) | 35,216 | ||||||||||
Other items | 1,860 | (77 | %) | 7,988 | (82 | %) | 43,804 | ||||||||||
Depreciation | 99,004 | 8 | % | 91,548 | 1 | % | 91,060 | ||||||||||
Amortization | 6,098 | (48 | %) | 11,636 | (16 | %) | 13,885 | ||||||||||
Adjusted EBITDA (non-GAAP basis) | $ | 449,769 | (4 | %) | $ | 468,999 | (6 | %) | $ | 498,260 |
In thousands | |||
2016 | |||
Operating loss (GAAP basis) | $ | (18,728 | ) |
Severance-related charges | 640 | ||
Depreciation | 3,462 | ||
Amortization | 8,774 | ||
Adjusted EBITDA (non-GAAP basis) | $ | (5,852 | ) |
In thousands, except per share amounts | |||||||||||||||||
2016 | Change | 2015 | Change | 2014 | |||||||||||||
Early retirement program | $ | 837 | (98 | %) | $ | 43,181 | *** | $ | — | ||||||||
Severance-related charges | 42,689 | 41 | % | 30,185 | 52 | % | 19,797 | ||||||||||
Facility consolidation and asset impairment charges | 64,504 | 89 | % | 34,186 | (3 | %) | 35,216 | ||||||||||
Other items | 1,860 | (77 | %) | 7,988 | (82 | %) | 43,804 | ||||||||||
Acquisition-related expenses | 32,683 | *** | (17,971 | ) | *** | — | |||||||||||
Pretax impact | 142,573 | 46 | % | 97,569 | (1 | %) | 98,817 | ||||||||||
Income tax impact of above items | (50,609 | ) | 46 | % | (34,573 | ) | (4 | %) | (36,200 | ) | |||||||
Impact of items affecting comparability on net income | $ | 91,964 | 46 | % | $ | 62,996 | 1 | % | $ | 62,617 | |||||||
Net income | $ | 52,710 | (64 | %) | $ | 146,091 | (31 | %) | $ | 210,705 | |||||||
Impact of items affecting comparability on net income | 91,964 | 46 | % | 62,996 | 1 | % | 62,617 | ||||||||||
Adjusted net income | $ | 144,674 | (31 | %) | $ | 209,087 | (24 | %) | $ | 273,322 | |||||||
Earnings per share - diluted | $ | 0.44 | (65 | %) | $ | 1.25 | (32 | %) | $ | 1.83 | |||||||
Impact of items affecting comparability on net income | 0.78 | 44 | % | 0.54 | (2 | %) | 0.55 | ||||||||||
Adjusted earnings per share - diluted | $ | 1.22 | (32 | %) | $ | 1.79 | (25 | %) | $ | 2.38 | |||||||
Diluted weighted average number of common shares outstanding | 118,625 | 2 | % | 116,695 | 2 | % | 114,959 |
In thousands | |||||||||||
2016 | 2015 | Change | |||||||||
Net cash flow from operating activities | $ | 165,555 | $ | 231,020 | $ | (65,465 | ) | ||||
Capital expenditures | (60,048 | ) | (53,979 | ) | (6,069 | ) | |||||
Free cash flow | $ | 105,507 | $ | 177,041 | $ | (71,534 | ) |
In thousands | Payments Due by Period | ||||||||||||||||||
Total | 2017 | 2018 - 2019 | 2020 - 2021 | Thereafter | |||||||||||||||
Operating leases (a) | $ | 395,251 | $ | 53,071 | $ | 97,168 | $ | 78,016 | $ | 166,996 | |||||||||
Purchase obligations (b) | 751,661 | 159,202 | 193,596 | 137,491 | 261,372 | ||||||||||||||
Other noncurrent liabilities (c) | 46,911 | 41,950 | 529 | 232 | 4,200 | ||||||||||||||
Gannett Retirement Plan contributions (d) | 115,000 | 25,000 | 50,000 | 40,000 | — | ||||||||||||||
Total | $ | 1,308,823 | $ | 279,223 | $ | 341,293 | $ | 255,739 | $ | 432,568 |
(a) | See Note 12 — Commitments, contingencies and other matters to the consolidated and combined financial statements. |
(b) | Includes purchase obligations related to wire services, interactive marketing agreements, professional services, paper distribution agreements, printing contracts, and other legally binding commitments. Amounts which we are liable for under purchase orders outstanding at December 25, 2016, are reflected in the Consolidated Balance Sheets as accounts payable and accrued liabilities and are excluded from the table above. |
(c) | Other noncurrent liabilities primarily consist of unfunded and under-funded postretirement benefit plans excluding the Gannett Retirement Plan. Unfunded plans include the Gannett 2015 Supplemental Retirement Plan, the Gannett Retiree Welfare Plan, and a SERP plan which was assumed pursuant to our acquisition of JMG. Required employer contributions equal the future expected benefit payments and are reflected in the table over the next ten-year period. Our under-funded plans include the Newsquest Pension Scheme and the Newspaper Guild of Detroit Plan. Expected employer contributions for these plans are included for the following fiscal year only, including $19 million for the Newsquest Pension Scheme. Contributions beyond the next fiscal year are excluded due to uncertainties regarding significant assumptions involved in estimating these contributions, such as interest rate levels as well as the amount and timing of invested asset returns. |
(d) | Consists of amounts we are contractually obligated to contribute to the GRP. This total does not include additional contributions which may be required to meet IRS minimum funding standards as these contributions are subject to uncertainties regarding significant assumptions involved in their estimation, such as interest rate levels as well as the amount and timing of invested asset returns. |
Cash dividends | Payment Date | Per Share | ||||
2016 | 4th Quarter | Dec. 19, 2016 | $ | 0.16 | ||
3rd Quarter | Sept. 19, 2016 | $ | 0.16 | |||
2nd Quarter | Jun. 20, 2016 | $ | 0.16 | |||
1st Quarter | Apr. 1, 2016 | $ | 0.16 | |||
2015 | 4th Quarter | Jan. 4, 2016 | $ | 0.16 | ||
3rd Quarter | Oct. 1, 2015 | $ | 0.16 |
Page | |
FINANCIAL STATEMENTS | |
GANNETT CO., INC. CONSOLIDATED BALANCE SHEETS | |||||||
In thousands, except share data | |||||||
Assets | Dec. 25, 2016 | Dec. 27, 2015 | |||||
Current assets | |||||||
Cash and cash equivalents | $ | 114,324 | $ | 196,696 | |||
Accounts receivable, less allowance for doubtful accounts of $10,317 and $8,836, respectively | 358,041 | 330,473 | |||||
Other receivables | 25,863 | 36,114 | |||||
Inventories | 40,426 | 25,777 | |||||
Assets held for sale | 4,522 | 12,288 | |||||
Prepaid income taxes | 30,009 | 935 | |||||
Prepaid expenses and other current assets | 30,321 | 27,253 | |||||
Total current assets | 603,506 | 629,536 | |||||
Property, plant and equipment, net | 1,087,701 | 896,585 | |||||
Goodwill | 698,288 | 575,685 | |||||
Intangible assets, net | 154,644 | 59,713 | |||||
Deferred income taxes (see Notes 1 and 10) | 218,232 | 201,991 | |||||
Investments and other assets | 82,310 | 64,289 | |||||
Total assets | $ | 2,844,681 | $ | 2,427,799 | |||
Liabilities and equity | |||||||
Current liabilities | |||||||
Accounts payable and accrued liabilities | $ | 438,724 | $ | 393,026 | |||
Dividends payable | — | 18,501 | |||||
Deferred income | 133,263 | 78,967 | |||||
Total current liabilities | 571,987 | 490,494 | |||||
Income taxes | 25,467 | 22,221 | |||||
Postretirement medical and life insurance liabilities (see Note 1) | 90,134 | 87,594 | |||||
Pension liabilities (see Note 1) | 739,262 | 612,443 | |||||
Long-term portion of revolving credit facility | 400,000 | — | |||||
Other noncurrent liabilities | 161,070 | 156,471 | |||||
Total noncurrent liabilities | 1,415,933 | 878,729 | |||||
Total liabilities | 1,987,920 | 1,369,223 | |||||
Commitments and contingent liabilities (see Note 12) | |||||||
Equity | |||||||
Preferred stock of $0.01 par value per share, 5,000,000 shares authorized, none issued | — | — | |||||
Common stock of $0.01 par value per share, 500,000,000 shares authorized, 116,624,726 issued as of Dec. 25, 2016 and 115,668,957 issued as of Dec. 27, 2015 | 1,166 | 1,156 | |||||
Treasury stock at cost, 3,750,000 shares and none, respectively | (32,667 | ) | — | ||||
Additional paid-in capital (see Note 1) | 1,769,905 | 1,708,291 | |||||
Retained earnings | 1,269 | 22,553 | |||||
Accumulated other comprehensive loss (see Note 1) | (882,912 | ) | (673,424 | ) | |||
Total equity | 856,761 | 1,058,576 | |||||
Total liabilities and equity | $ | 2,844,681 | $ | 2,427,799 |
GANNETT CO., INC. CONSOLIDATED AND COMBINED STATEMENTS OF INCOME | |||||||||||
In thousands, except per share amounts | |||||||||||
Fiscal year ended | Dec. 25, 2016 | Dec. 27, 2015 | Dec. 28, 2014 | ||||||||
Operating revenues: | |||||||||||
Advertising | $ | 1,703,795 | $ | 1,611,445 | $ | 1,840,067 | |||||
Circulation | 1,133,676 | 1,060,118 | 1,109,729 | ||||||||
Other | 210,003 | 213,449 | 222,082 | ||||||||
Total operating revenues | 3,047,474 | 2,885,012 | 3,171,878 | ||||||||
Operating expenses: | |||||||||||
Cost of sales and operating expenses | 1,969,853 | 1,866,729 | 1,997,803 | ||||||||
Selling, general and administrative expenses | 807,398 | 707,022 | 765,465 | ||||||||
Depreciation | 118,092 | 95,916 | 97,178 | ||||||||
Amortization | 14,872 | 11,636 | 13,885 | ||||||||
Facility consolidation and asset impairment charges | 58,171 | 34,278 | 35,216 | ||||||||
Total operating expenses | 2,968,386 | 2,715,581 | 2,909,547 | ||||||||
Operating income | 79,088 | 169,431 | 262,331 | ||||||||
Non-operating income (expense): | |||||||||||
Equity income in unconsolidated investees, net | 1,519 | 11,981 | 15,857 | ||||||||
Interest expense | (12,791 | ) | (4,562 | ) | (576 | ) | |||||
Other non-operating items, net | (1,388 | ) | 17,125 | 653 | |||||||
Total non-operating income (expense) | (12,660 | ) | 24,544 | 15,934 | |||||||
Income before income taxes | 66,428 | 193,975 | 278,265 | ||||||||
Provision for income taxes | 13,718 | 47,884 | 67,560 | ||||||||
Net income | $ | 52,710 | $ | 146,091 | $ | 210,705 | |||||
Net income per share—basic | $ | 0.45 | $ | 1.27 | $ | 1.83 | |||||
Net income per share—diluted | $ | 0.44 | $ | 1.25 | $ | 1.83 |
GANNETT CO., INC. CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||||||||||
In thousands | ||||||||||||
Fiscal year ended | Dec. 25, 2016 | Dec. 27, 2015 | Dec. 28, 2014 | |||||||||
Net income | $ | 52,710 | $ | 146,091 | $ | 210,705 | ||||||
Other comprehensive income (loss), before tax: | ||||||||||||
Foreign currency translation adjustments | (84,526 | ) | (19,390 | ) | (27,414 | ) | ||||||
Pension and other postretirement benefit items: | ||||||||||||
Actuarial loss: | ||||||||||||
Actuarial loss arising during the period | (334,653 | ) | (54,142 | ) | (429,402 | ) | ||||||
Amortization of actuarial loss | 62,155 | 58,148 | 42,446 | |||||||||
Prior service credit (cost): | ||||||||||||
Change in prior service credit (cost) | (1,002 | ) | — | 36,873 | ||||||||
Amortization of prior service cost (credit) | 1,883 | (2,722 | ) | (4,454 | ) | |||||||
Settlement charge | (49 | ) | 1,254 | — | ||||||||
Transfer from Separation | — | 24,180 | — | |||||||||
Other | 67,959 | 15,544 | 23,634 | |||||||||
Pension and other postretirement benefit items | (203,707 | ) | 42,262 | (330,903 | ) | |||||||
Other comprehensive income (loss) before tax | (288,233 | ) | 22,872 | (358,317 | ) | |||||||
Income tax effect related to components of other comprehensive income (loss) | 78,745 | (18,184 | ) | 122,186 | ||||||||
Other comprehensive income (loss), net of tax | (209,488 | ) | 4,688 | (236,131 | ) | |||||||
Comprehensive income (loss) | $ | (156,778 | ) | $ | 150,779 | $ | (25,426 | ) |
GANNETT CO., INC. CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS | ||||||||||||
In thousands | ||||||||||||
Fiscal year ended | Dec. 25, 2016 | Dec. 27, 2015 | Dec. 28, 2014 | |||||||||
Cash flows from operating activities | ||||||||||||
Net income | $ | 52,710 | $ | 146,091 | $ | 210,705 | ||||||
Adjustments to reconcile net income to operating cash flows: | ||||||||||||
Gain on acquisition | — | (21,799 | ) | — | ||||||||
Depreciation | 118,092 | 95,916 | 97,178 | |||||||||
Amortization | 14,872 | 11,636 | 13,885 | |||||||||
Facility consolidation and asset impairment charges (see Notes 4 and 5) | 58,171 | 34,278 | 35,216 | |||||||||
Stock-based compensation — equity awards | 20,576 | 20,623 | 17,099 | |||||||||
Provision for deferred income taxes | 15,734 | 47,380 | 48,943 | |||||||||
Pension and other postretirement expense, net of contributions | (84,600 | ) | (134,907 | ) | (100,984 | ) | ||||||
Equity income in unconsolidated investees, net (see Notes 4 and 6) | (1,519 | ) | (11,981 | ) | (15,857 | ) | ||||||
Decrease in accounts receivable | 28,132 | 33,376 | 30,753 | |||||||||
Decrease (increase) in other receivables | 6,836 | (24,961 | ) | (4,988 | ) | |||||||
Decrease (increase) in inventories | (7,504 | ) | 14,023 | 9,577 | ||||||||
Increase (decrease) in accounts payable | (22,485 | ) | 16,844 | 23,298 | ||||||||
Increase (decrease) in interest and taxes payable | 3,246 | (9,349 | ) | (30,871 | ) | |||||||
Increase (decrease) in accrued expenses | (25,517 | ) | 44,787 | (21,544 | ) | |||||||
Increase (decrease) in deferred income | 2,700 | (2,894 | ) | (1,471 | ) | |||||||
Other, net | (13,889 | ) | (28,043 | ) | 35,199 | |||||||
Net cash flows from operating activities | 165,555 | 231,020 | 346,138 | |||||||||
Cash flows used for investing activities | ||||||||||||
Purchase of property, plant and equipment | (60,048 | ) | (53,979 | ) | (72,307 | ) | ||||||
Payments for acquisitions, net of cash acquired | (464,065 | ) | (28,668 | ) | (113 | ) | ||||||
Payments for investments | (12,419 | ) | (2,750 | ) | (2,500 | ) | ||||||
Proceeds from investments | 13 | 12,402 | 18,629 | |||||||||
Proceeds from sale of certain assets | 17,405 | 29,683 | 24,519 | |||||||||
Changes in other investing activities | 41 | — | — | |||||||||
Net cash used for investing activities | (519,073 | ) | (43,312 | ) | (31,772 | ) | ||||||
Cash flows from (used for) financing activities | ||||||||||||
Proceeds from borrowings under revolving credit facilities | 480,000 | — | — | |||||||||
Repayments of borrowings under revolving credit facilities | (80,000 | ) | — | — | ||||||||
Dividends paid | (92,495 | ) | (18,462 | ) | — | |||||||
Cost of common shares repurchased | (32,667 | ) | — | — | ||||||||
Proceeds from issuance of common stock upon settlement of stock awards | 562 | 6,615 | — | |||||||||
Payments for employee taxes withheld from stock awards | (3,667 | ) | — | — | ||||||||
Transactions with former parent, net | — | (49,701 | ) | (319,422 | ) | |||||||
Deferred payments for acquisitions | — | (1,218 | ) | (1,313 | ) | |||||||
Changes in other financing activities | (315 | ) | — | — | ||||||||
Net cash from (used for) financing activities | 271,418 | (62,766 | ) | (320,735 | ) | |||||||
Effect of currency exchange rate change | (272 | ) | (193 | ) | (280 | ) | ||||||
Increase (decrease) in cash and cash equivalents | (82,372 | ) | 124,749 | (6,649 | ) | |||||||
Balance of cash and cash equivalents at beginning of year | 196,696 | 71,947 | 78,596 | |||||||||
Balance of cash and cash equivalents at end of year | $ | 114,324 | $ | 196,696 | $ | 71,947 |
GANNETT CO., INC. CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY | |||||||||||||||||||||||||||
In thousands, except per share amounts | Common Stock $0.01 Par Value | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Former parent's investment, net | Total | ||||||||||||||||||||
Balance: Dec. 29, 2013 | $ | — | $ | — | $ | — | $ | — | $ | (441,981 | ) | $ | 1,707,202 | $ | 1,265,221 | ||||||||||||
Net income, 2014 | — | — | — | — | — | 210,705 | 210,705 | ||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (236,131 | ) | — | (236,131 | ) | ||||||||||||||||||
Total comprehensive loss | (25,426 | ) | |||||||||||||||||||||||||
Transactions with our former parent, net | — | — | — | — | — | (302,323 | ) | (302,323 | ) | ||||||||||||||||||
Balance: Dec. 28, 2014 | $ | — | $ | — | $ | — | $ | — | $ | (678,112 | ) | $ | 1,615,584 | $ | 937,472 | ||||||||||||
Net income, 2015 | — | — | — | 59,517 | — | 86,574 | 146,091 | ||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 4,688 | — | 4,688 | ||||||||||||||||||||
Total comprehensive income | 150,779 | ||||||||||||||||||||||||||
Dividends declared, 2015: $0.32 per share | — | — | — | (36,964 | ) | — | — | (36,964 | ) | ||||||||||||||||||
Issuance of common shares | 1,150 | — | (1,150 | ) | — | — | — | — | |||||||||||||||||||
Stock options exercised | 6 | — | 4,987 | — | — | — | 4,993 | ||||||||||||||||||||
Restricted stock awards settled | — | — | (293 | ) | — | — | — | (293 | ) | ||||||||||||||||||
Stock-based compensation | — | — | 21,742 | — | — | — | 21,742 | ||||||||||||||||||||
Tax benefit derived from stock awards settled | — | — | 1,622 | — | — | — | 1,622 | ||||||||||||||||||||
Transactions with former parent | — | — | 55,402 | — | — | (68,646 | ) | (13,244 | ) | ||||||||||||||||||
Transfer of former parent's investment, net | — | — | 1,625,878 | — | — | (1,633,512 | ) | (7,634 | ) | ||||||||||||||||||
Other activity | — | — | 103 | — | — | — | 103 | ||||||||||||||||||||
Balance: Dec. 27, 2015 | $ | 1,156 | $ | — | $ | 1,708,291 | $ | 22,553 | $ | (673,424 | ) | $ | — | $ | 1,058,576 | ||||||||||||
Net income, 2016 | — | — | — | 52,710 | — | — | 52,710 | ||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (209,488 | ) | — | (209,488 | ) | ||||||||||||||||||
Total comprehensive loss | (156,778 | ) | |||||||||||||||||||||||||
Dividends declared, 2016: $0.64 per share | — | — | — | (73,994 | ) | — | — | (73,994 | ) | ||||||||||||||||||
Purchase of treasury stock | — | (32,667 | ) | — | — | — | — | (32,667 | ) | ||||||||||||||||||
Stock options exercised | 1 | — | 561 | — | — | — | 562 | ||||||||||||||||||||
Restricted stock awards settled | 5 | — | (5,822 | ) | — | — | — | (5,817 | ) | ||||||||||||||||||
Performance share units settled | 4 | — | (3,002 | ) | — | — | — | (2,998 | ) | ||||||||||||||||||
Stock-based compensation (see Notes 1 and 10) | — | — | 20,576 | — | — | — | 20,576 | ||||||||||||||||||||
Other activity (see Notes 1 and 10) | — | — | 49,301 | — | — | — | 49,301 | ||||||||||||||||||||
Balance: Dec. 25, 2016 | $ | 1,166 | $ | (32,667 | ) | $ | 1,769,905 | $ | 1,269 | $ | (882,912 | ) | $ | — | $ | 856,761 |
In thousands | Dec. 25, 2016 | Dec. 27, 2015 | |||||
Land | $ | 132,438 | $ | 84,059 | |||
Buildings and Improvements | 875,313 | 752,849 | |||||
Machinery, equipment and fixtures | 1,552,030 | 1,687,875 | |||||
Construction in progress | 9,817 | 17,786 | |||||
Total | 2,569,598 | 2,542,569 | |||||
Accumulated depreciation | (1,481,897 | ) | (1,645,984 | ) | |||
Net property, plant and equipment | $ | 1,087,701 | $ | 896,585 |
In thousands | Dec. 25, 2016 | Dec. 27, 2015 | |||||
Compensation | $ | 105,402 | $ | 115,602 | |||
Taxes | 22,995 | 23,644 | |||||
Benefits | 36,114 | 38,811 | |||||
Other | 90,943 | 69,964 | |||||
Total accrued liabilities | 255,454 | 248,021 | |||||
Accounts payable | 183,270 | 145,005 | |||||
Total accrued liabilities and accounts payable | $ | 438,724 | $ | 393,026 |
In thousands | Dec. 25, 2016 | Dec. 27, 2015 | |||||
Cash paid for taxes, net of refunds | $ | 25,719 | $ | 38,707 | |||
Cash paid for interest | $ | 10,081 | $ | 2,995 | |||
Accrued capital expenditures | $ | 5,639 | $ | 3,251 | |||
Dividends payable | $ | — | $ | 18,501 | |||
Parent, net investment activity subsequent to separation | $ | — | $ | 31,762 | |||
Fair value of noncontrolling equity interests in TNP and CNP | $ | — | $ | 60,954 | |||
Pre-acquisition carrying value of TNP | $ | — | $ | 39,155 |
In thousands | |||
Cash acquired | $ | 13,195 | |
Other current assets | 15,058 | ||
Property, plant and equipment | 13,486 | ||
Developed technology | 54,000 | ||
Customer relationships | 22,500 | ||
Other intangible assets | 12,000 | ||
Goodwill | 119,481 | ||
Other noncurrent assets | 9,852 | ||
Total assets acquired | 259,572 | ||
Current liabilities | 63,005 | ||
Noncurrent liabilities | 20,824 | ||
Total liabilities assumed | 83,829 | ||
Net assets acquired | $ | 175,743 |
In thousands | |||
Cash acquired | $ | 36,825 | |
Other current assets | 54,571 | ||
Property, plant and equipment | 264,357 | ||
Mastheads | 30,440 | ||
Customer relationships | 12,440 | ||
Goodwill | 24,347 | ||
Other noncurrent assets | 3,825 | ||
Total assets acquired | 426,805 | ||
Current liabilities | 71,519 | ||
Noncurrent liabilities | 60,240 | ||
Total liabilities assumed | 131,759 | ||
Net assets acquired | $ | 295,046 |
Unaudited | |||||||
In thousands, except per share amounts | 2016 | 2015 | |||||
Total revenues | $ | 3,409,111 | $ | 3,800,074 | |||
Net income | $ | 47,485 | $ | 65,038 | |||
Earnings per share - diluted | $ | 0.40 | $ | 0.56 |
In thousands | |||
Current assets | $ | 12,310 | |
Property, plant and equipment | 20,672 | ||
Intangible assets | 28,440 | ||
Goodwill | 30,703 | ||
Total assets acquired | 92,125 | ||
Current liabilities | 10,860 | ||
Noncurrent liabilities | 14,211 | ||
Total liabilities assumed | 25,071 | ||
Net assets acquired | $ | 67,054 |
In thousands | EROPs | Other Severance Activities | Total | ||||||||
Balance at December 29, 2013 | $ | — | $ | 20,710 | $ | 20,710 | |||||
Payments | — | (28,985 | ) | (28,985 | ) | ||||||
Expense | — | 19,797 | 19,797 | ||||||||
Adjustments | — | — | — | ||||||||
Balance at December 28, 2014 | $ | — | $ | 11,522 | $ | 11,522 | |||||
Payments | (10,591 | ) | (29,657 | ) | (40,248 | ) | |||||
Expense | 42,081 | 30,185 | 72,266 | ||||||||
Adjustments | 240 | — | 240 | ||||||||
Balance at December 27, 2015 | $ | 31,730 | $ | 12,050 | $ | 43,780 | |||||
Payments | (32,419 | ) | (36,003 | ) | (68,422 | ) | |||||
Expense | 837 | 42,689 | 43,526 | ||||||||
Adjustments | (68 | ) | (165 | ) | (233 | ) | |||||
Balance at December 25, 2016 | $ | 80 | $ | 18,571 | $ | 18,651 |
In thousands | Publishing | ReachLocal | Corporate and Other | Total | |||||||||||
2016 | |||||||||||||||
EROPs | $ | 837 | $ | — | $ | — | $ | 837 | |||||||
Other Severance Activities | 41,963 | 640 | 86 | 42,689 | |||||||||||
Total | $ | 42,800 | $ | 640 | $ | 86 | $ | 43,526 | |||||||
2015 | |||||||||||||||
EROPs | $ | 36,772 | $ | — | $ | 5,309 | $ | 42,081 | |||||||
Other Severance Activities | 30,185 | — | — | 30,185 | |||||||||||
Total | $ | 66,957 | $ | — | $ | 5,309 | $ | 72,266 | |||||||
2014 | |||||||||||||||
EROPs | $ | — | $ | — | $ | — | $ | — | |||||||
Other Severance Activities | 19,797 | — | — | 19,797 | |||||||||||
Total | $ | 19,797 | $ | — | $ | — | $ | 19,797 |
In thousands, except per share amounts | |||||||||||
2016 | Pre-Tax Amount | After-Tax Amount | Per Share Amount | ||||||||
Facility consolidation and asset impairment charges: | |||||||||||
Intangible assets | $ | 24,398 | $ | 15,120 | $ | 0.13 | |||||
Property, plant and equipment | 33,518 | 20,312 | 0.17 | ||||||||
Other | 255 | 157 | — | ||||||||
Total facility consolidation and asset impairment charges against operations | $ | 58,171 | $ | 35,589 | $ | 0.30 | |||||
Accelerated depreciation | 3,218 | 1,973 | 0.02 | ||||||||
Non-operating charges: | |||||||||||
Equity method investments | 1,018 | 624 | 0.01 | ||||||||
Other non-operating items | 2,097 | 1,286 | 0.01 | ||||||||
Total charges | $ | 64,504 | $ | 39,472 | $ | 0.34 |
In thousands, except per share amounts | |||||||||||
2015 | Pre-Tax Amount | After-Tax Amount | Per Share Amount | ||||||||
Facility consolidation and asset impairment charges: | |||||||||||
Intangible assets | $ | 19,437 | $ | 13,131 | $ | 0.11 | |||||
Property, plant and equipment | 10,061 | 6,167 | 0.05 | ||||||||
Other | 4,780 | 2,930 | 0.03 | ||||||||
Total facility consolidation and asset impairment charges against operations | $ | 34,278 | $ | 22,228 | $ | 0.19 | |||||
Non-operating charges: | |||||||||||
Equity method investments | 658 | 404 | — | ||||||||
Total charges | $ | 34,936 | $ | 22,632 | $ | 0.19 |
In thousands, except per share amounts | |||||||||||
2014 | Pre-Tax Amount | After-Tax Amount | Per Share Amount | ||||||||
Facility consolidation and asset impairment charges: | |||||||||||
Intangible assets | $ | 1,701 | $ | 1,000 | $ | 0.01 | |||||
Property, plant and equipment | 19,467 | 13,467 | 0.12 | ||||||||
Other | 14,048 | 8,449 | 0.07 | ||||||||
Total facility consolidation and asset impairment charges against operations | $ | 35,216 | $ | 22,916 | $ | 0.20 |
In thousands | |||||||||||
Gross | Accumulated Amortization | Net | |||||||||
Dec. 25, 2016 | |||||||||||
Goodwill | $ | 698,288 | $ | — | $ | 698,288 | |||||
Indefinite-lived intangibles: | |||||||||||
Mastheads and trade names | 47,410 | — | 47,410 | ||||||||
Amortizable intangible assets: | |||||||||||
Developed technology | 54,000 | (6,621 | ) | 47,379 | |||||||
Customer relationships | 89,785 | (41,495 | ) | 48,290 | |||||||
Other | 12,800 | (1,235 | ) | 11,565 | |||||||
Total | $ | 902,283 | $ | (49,351 | ) | $ | 852,932 | ||||
Dec. 27, 2015 | |||||||||||
Goodwill | $ | 575,685 | $ | — | $ | 575,685 | |||||
Indefinite-lived intangibles: | |||||||||||
Mastheads and trade names | 31,521 | — | 31,521 | ||||||||
Amortizable intangible assets: | |||||||||||
Developed technology | — | — | — | ||||||||
Customer relationships | 68,005 | (39,813 | ) | 28,192 | |||||||
Other | 11,478 | (11,478 | ) | — | |||||||
Total | $ | 686,689 | $ | (51,291 | ) | $ | 635,398 |
In thousands | |||
2017 | $ | 28,183 | |
2018 | $ | 28,134 | |
2019 | $ | 20,918 | |
2020 | $ | 8,021 | |
2021 | $ | 5,312 |
In thousands | |||||||||||
Publishing | ReachLocal | Consolidated | |||||||||
Balance at Dec. 28, 2014: | |||||||||||
Goodwill | $ | 7,358,420 | $ | — | $ | 7,358,420 | |||||
Accumulated impairment losses | (6,814,075 | ) | — | (6,814,075 | ) | ||||||
Net balance at Dec. 28, 2014 | $ | 544,345 | $ | — | $ | 544,345 | |||||
Activity during the year: | |||||||||||
Acquisitions & adjustments | 39,484 | — | 39,484 | ||||||||
Foreign currency exchange rate changes | (8,144 | ) | — | (8,144 | ) | ||||||
Total | $ | 31,340 | $ | — | $ | 31,340 | |||||
Balance at Dec. 27, 2015: | |||||||||||
Goodwill | 7,297,752 | — | 7,297,752 | ||||||||
Accumulated impairment losses | (6,722,067 | ) | — | (6,722,067 | ) | ||||||
Net balance at Dec. 27, 2015 | $ | 575,685 | $ | — | $ | 575,685 | |||||
Activity during the year: | |||||||||||
Acquisitions & adjustments | 36,532 | 119,481 | 156,013 | ||||||||
Foreign currency exchange rate changes | (33,410 | ) | — | (33,410 | ) | ||||||
Total | $ | 3,122 | $ | 119,481 | $ | 122,603 | |||||
Balance at Dec. 25, 2016: | |||||||||||
Goodwill | 6,925,236 | 119,481 | 7,044,717 | ||||||||
Accumulated impairment losses | (6,346,429 | ) | — | (6,346,429 | ) | ||||||
Net balance at Dec. 25, 2016 | $ | 578,807 | $ | 119,481 | $ | 698,288 |
% Owned at Dec. 25, 2016 | ||
TNI Partners | 50.00 | % |
Albuquerque Publishing Company (a) | 40.00 | % |
Spirited Media, Inc. | 31.58 | % |
NextGen Solutions, LLC | 25.00 | % |
Digg, Inc. | 15.00 | % |
Ponderay Newsprint Company | 13.50 | % |
Time Razor, Inc. | 7.06 | % |
(a) | Per the terms of our contract, the ownership percentage fluctuates marginally from month to month. |
In thousands | |||||||||||
2016 | 2015 | 2014 | |||||||||
Service cost—benefits earned during the period | $ | 3,066 | $ | 7,993 | $ | 4,498 | |||||
Interest cost on benefit obligation | 125,903 | 131,149 | 145,433 | ||||||||
Expected return on plan assets | (183,697 | ) | (196,774 | ) | (206,164 | ) | |||||
Amortization of prior service costs | 6,677 | 6,893 | 6,967 | ||||||||
Amortization of actuarial loss | 61,740 | 56,722 | 41,728 | ||||||||
Pension cost (benefit) for our plans and our allocated portions of former parent-sponsored retirement plans | 13,689 | 5,983 | (7,538 | ) | |||||||
Participant data corrections (a) | (145 | ) | — | — | |||||||
Settlement charge | (49 | ) | 1,254 | — | |||||||
Expense (credit) for retirement plans | $ | 13,495 | $ | 7,237 | $ | (7,538 | ) |
(a) | Refer to Note 1 — Basis of presentation for additional details regarding the impacts of the error in participant data identified. |
In thousands | |||||||
Dec. 25, 2016 | Dec. 27, 2015 | ||||||
Change in benefit obligations | |||||||
Benefit obligations at beginning of year | $ | 3,184,795 | $ | 3,433,581 | |||
Service cost | 3,066 | 7,993 | |||||
Interest cost | 125,903 | 131,149 | |||||
Plan amendments | 500 | — | |||||
Plan participants' contributions | 4 | 8 | |||||
Actuarial (gain) loss | 266,925 | (106,778 | ) | ||||
Foreign currency translation | (187,624 | ) | (40,679 | ) | |||
Gross benefits paid | (211,882 | ) | (218,998 | ) | |||
Acquisitions | 4,736 | 26,308 | |||||
Transfers out | (1,242 | ) | — | ||||
Settlements | — | (4,354 | ) | ||||
Participant data corrections (a) | (23,600 | ) | — | ||||
Transfer from separation | — | (43,435 | ) | ||||
Benefit obligations at end of year | $ | 3,161,581 | $ | 3,184,795 | |||
Change in plan assets | |||||||
Fair value of plan assets at beginning of year | $ | 2,558,627 | $ | 2,654,889 | |||
Transfers | — | 1,006 | |||||
Actual return on plan assets | 117,162 | 38,853 | |||||
Plan participants' contributions | 4 | 8 | |||||
Employer contributions | 88,340 | 128,179 | |||||
Gross benefits paid | (211,882 | ) | (218,998 | ) | |||
Acquisitions | — | 26,179 | |||||
Transfers out | (1,242 | ) | — | ||||
Settlements | — | (4,354 | ) | ||||
Foreign currency translation | (140,002 | ) | (30,411 | ) | |||
Transfer from separation | — | (36,724 | ) | ||||
Fair value of plan assets at end of year | $ | 2,411,007 | $ | 2,558,627 | |||
Funded status at end of year | $ | 750,574 | $ | 626,168 | |||
Amounts recognized in Consolidated Balance Sheets | |||||||
Noncurrent assets | $ | 919 | $ | 2,166 | |||
Accrued benefit cost—current | $ | (12,230 | ) | $ | (15,891 | ) | |
Accrued benefit cost—noncurrent | $ | (739,263 | ) | $ | (612,443 | ) |
(a) | Refer to Note 1 — Basis of presentation for additional details regarding the impacts of the error in participant data identified. |
In thousands | |||||||||||
Fair Value of Plan Assets | Benefit Obligation | Funded Status | |||||||||
GRP | $ | 1,601,312 | $ | 1,975,816 | $ | (374,504 | ) | ||||
SERP (a) | — | 109,952 | (109,952 | ) | |||||||
Newsquest Plans | 717,623 | 970,988 | (253,365 | ) | |||||||
Newspaper Guild of Detroit Plan | 92,072 | 101,065 | (8,993 | ) | |||||||
JMG Plan (a) | — | 3,760 | (3,760 | ) | |||||||
Total | $ | 2,411,007 | $ | 3,161,581 | $ | (750,574 | ) |
(a) | The SERP and JMG Plans are unfunded, unsecured liabilities. |
In thousands | |||||||
Dec. 25, 2016 | Dec. 27, 2015 | ||||||
Accumulated benefit obligation | $ | 3,153,811 | $ | 3,179,094 | |||
Fair value of plan assets | $ | 2,411,007 | $ | 2,558,627 |
In thousands | |||||||
Dec. 25, 2016 | Dec. 27, 2015 | ||||||
Projected benefit obligation | $ | 3,161,581 | $ | 3,184,795 | |||
Fair value of plan assets | $ | 2,411,007 | $ | 2,558,627 |
In thousands | |||||||
Dec. 25, 2016 | Dec. 27, 2015 | ||||||
Net actuarial losses | $ | (1,825,167 | ) | $ | (1,613,939 | ) | |
Prior service cost | (29,263 | ) | (35,451 | ) | |||
Amounts in accumulated other comprehensive loss | $ | (1,854,430 | ) | $ | (1,649,390 | ) |
In thousands | |||
2016 | |||
Current year actuarial loss | $ | 333,460 | |
Change in prior service cost | 500 | ||
Actuarial gain due to settlement | 49 | ||
Amortization of actuarial loss | (61,740 | ) | |
Amortization of prior service costs | (6,677 | ) | |
Foreign currency gain | (68,620 | ) | |
Participant data corrections (a) | 8,070 | ||
Total | $ | 205,042 |
(a) | Refer to Note 1 — Basis of presentation for additional details regarding the impacts of the error in participant data identified. |
2016 | 2015 | 2014 | |||
Discount rate | 4.24% | 4.17% | 4.74% | ||
Expected return on plan assets | 7.60% | 7.63% | 7.91% | ||
Rate of compensation increase | 2.95% | 2.95% | 2.96% |
Dec. 25, 2016 | Dec. 27, 2015 | ||
Discount rate | 3.63% | 4.24% | |
Rate of compensation increase | 2.95% | 2.96% |
Target Allocation | Allocation of Plan Assets | |||||||
2017 | 2016 | 2015 | ||||||
Equity securities | 47 | % | 44 | % | 53 | % | ||
Debt securities | 35 | % | 38 | % | 24 | % | ||
Alternative investments (a) | 18 | % | 18 | % | 23 | % | ||
Total | 100 | % | 100 | % | 100 | % |
(a) | Alternative investments include real estate, private equity and hedge funds. |
In thousands | |||
2017 | $ | 195,190 | |
2018 | $ | 191,231 | |
2019 | $ | 190,887 | |
2020 | $ | 187,341 | |
2021 | $ | 184,548 | |
2022-2026 | $ | 882,207 |
• | We play no part in the management of plan investments or any other aspect of plan administration. |
• | Amounts we contribute to the multi-employer plan may be used to provide benefits to employees of other participating employers. |
• | If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. |
• | If we choose to stop participating in some of our multi-employer plans, we may be required to pay those plans an amount based on the unfunded status of the plan, referred to as a withdrawal liability. |
Multi-employer Pension Plans | |||||||||||||||
EIN Number/ | Zone Status Dec. 31, | FIP/RP Status Pending/Implemented | Contributions (in thousands) | Surcharge Imposed | Expiration Dates of CBAs | ||||||||||
Pension Plan Name | Plan Number | 2016 | 2015 | 2016 | 2015 | 2014 | |||||||||
CWA/ITU Negotiated Pension Plan | 13-6212879/001 | Red | Red | Implemented | $ | 478 | $ | 411 | $ | 433 | No | 4/10/2019 | |||
GCIU—Employer Retirement Benefit Plan (a) | 91-6024903/001 | Red | Red | Implemented | 30 | 43 | 71 | No | 4/30/2019 | ||||||
IAM National Pension Plan (a) | 51-6031295/002 | Green | Green | NA | 278 | 352 | 403 | NA | 4/30/2019 | ||||||
Teamsters Pension Trust Fund of Philadelphia and Vicinity (a) | 23-1511735/001 | Yellow | Yellow | Implemented | 1,473 | 1,452 | 1,298 | NA | 12/21/2017 | ||||||
Central Pension Fund of the International Union of Operating Engineers and Participating Employers (a) | 36-6052390/001 | Green as of Jan. 31, 2016 | Green as of Jan. 31, 2015 | NA | 86 | 99 | 153 | NA | 4/30/2019 | ||||||
Total | $ | 2,345 | $ | 2,357 | $ | 2,358 |
(a) | This plan has elected to utilize special amortization provisions provided under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010. |
In thousands | |||||||||||
2016 | 2015 | 2014 | |||||||||
Service cost – benefits earned during the period | $ | 202 | $ | 301 | $ | 365 | |||||
Interest cost on net benefit obligation | 4,038 | 4,019 | 4,610 | ||||||||
Amortization of prior service credit | (4,794 | ) | (9,615 | ) | (11,421 | ) | |||||
Amortization of actuarial (gain) loss | 415 | 1,426 | 718 | ||||||||
Participant data corrections (a) | (350 | ) | — | — | |||||||
Net periodic postretirement benefit credit | $ | (489 | ) | $ | (3,869 | ) | $ | (5,728 | ) |
(a) | Refer to Note 1 — Basis of presentation for additional details regarding the impacts of the error in participant data identified. |
In thousands | |||||||
Dec. 25, 2016 | Dec. 27, 2015 | ||||||
Change in benefit obligations | |||||||
Net benefit obligations at beginning of year | $ | 97,508 | $ | 103,528 | |||
Service cost | 202 | 301 | |||||
Interest cost | 4,038 | 4,019 | |||||
Plan participants' contributions | 1,239 | 3,839 | |||||
Plan amendments | 502 | — | |||||
Actuarial loss | 1,193 | 3,898 | |||||
Gross benefits paid | (10,505 | ) | (13,935 | ) | |||
Federal subsidy on benefits paid | — | — | |||||
Transfer from separation | — | (4,142 | ) | ||||
Acquisitions | 8,255 | — | |||||
Participant data corrections (a) | (2,771 | ) | — | ||||
Net benefit obligations at end of year | $ | 99,661 | $ | 97,508 | |||
Change in plan assets | |||||||
Fair value of plan assets at beginning of year | $ | — | $ | — | |||
Employer contributions | 9,266 | 10,096 | |||||
Plan participants' contributions | 1,239 | 3,839 | |||||
Gross benefits paid | (10,505 | ) | (13,935 | ) | |||
Fair value of plan assets at end of year | $ | — | $ | — | |||
Benefit obligation at end of year | $ | 99,661 | $ | 97,508 | |||
Amounts recognized in Consolidated Balance Sheets | |||||||
Accrued benefit cost—current | $ | (9,527 | ) | $ | (9,914 | ) | |
Accrued benefit cost—noncurrent | $ | (90,134 | ) | $ | (87,594 | ) |
(a) | Refer to Note 1 — Basis of presentation for additional details regarding the impacts of the error in participant data identified. |
In thousands | |||||||
Dec. 25, 2016 | Dec. 27, 2015 | ||||||
Net actuarial losses | $ | (4,472 | ) | $ | (12,611 | ) | |
Prior service credit | 22,711 | 29,515 | |||||
Amounts in accumulated other comprehensive loss | $ | 18,239 | $ | 16,904 |
In thousands | |||
2016 | |||
Current year actuarial loss | $ | 1,193 | |
Change in prior service cost | 502 | ||
Amortization of actuarial loss | (415 | ) | |
Amortization of prior service credit | 4,794 | ||
Participant data corrections (a) | (7,409 | ) | |
Total | $ | (1,335 | ) |
(a) | Refer to Note 1 — Basis of presentation for additional details regarding the impacts of the error in participant data identified. |
2016 | 2015 | 2014 | ||||||
Discount rate | 4.27 | % | 4.11 | % | 4.50 | % | ||
Health care cost trend rate assumed for next year | 5.70 | % | 6.18 | % | 6.26 | % | ||
Ultimate trend rate | 4.77 | % | 5.00 | % | 5.00 | % | ||
Year that ultimate trend rate is reached | 2019 | 2018 | 2018 |
Dec. 27, 2016 | Dec. 27, 2015 | ||||
Discount rate | 4.01 | % | 4.35 | % | |
Health care cost trend rate assumed for next year | 5.70 | % | 6.18 | % | |
Ultimate trend rate | 4.77 | % | 5.00 | % | |
Year that ultimate trend rate is reached | 2019 | 2018 |
In thousands | Benefit Payments | ||
2017 | $ | 9,527 | |
2018 | $ | 9,173 | |
2019 | $ | 8,664 | |
2020 | $ | 7,988 | |
2021 | $ | 7,459 | |
2022-2026 | $ | 32,159 |
In thousands | |||||||||||
2016 | Current | Deferred | Total | ||||||||
Federal | $ | (7,094 | ) | $ | 8,278 | $ | 1,184 | ||||
State and other | (528 | ) | 262 | (266 | ) | ||||||
Foreign | 5,606 | 7,194 | 12,800 | ||||||||
Total | $ | (2,016 | ) | $ | 15,734 | $ | 13,718 |
In thousands | |||||||||||
2015 | Current | Deferred | Total | ||||||||
Federal | $ | (5,383 | ) | $ | 36,489 | $ | 31,106 | ||||
State and other | (560 | ) | 4,046 | 3,486 | |||||||
Foreign | 6,447 | 6,845 | 13,292 | ||||||||
Total | $ | 504 | $ | 47,380 | $ | 47,884 |
In thousands | |||||||||||
2014 | Current | Deferred | Total | ||||||||
Federal | $ | 39,740 | $ | 18,282 | $ | 58,022 | |||||
State and other | (21,123 | ) | 27,731 | 6,608 | |||||||
Foreign | — | 2,930 | 2,930 | ||||||||
Total | $ | 18,617 | $ | 48,943 | $ | 67,560 |
In thousands | |||||||||||
2016 | 2015 | 2014 | |||||||||
Domestic | $ | 19,349 | $ | 128,316 | $ | 192,741 | |||||
Foreign | 47,079 | 65,659 | 85,524 | ||||||||
Total | $ | 66,428 | $ | 193,975 | $ | 278,265 |
2016 | 2015 | 2014 | ||||||
U.S. statutory tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
Increase (decrease) in taxes resulting from: | ||||||||
State/other income taxes net of federal income tax | (3.8 | ) | 2.4 | 2.5 | ||||
Statutory rate differential and permanent differences in earnings in foreign jurisdictions | (10.7 | ) | (6.3 | ) | (13.4 | ) | ||
Impact of rate change in foreign tax jurisdiction | 1.6 | 1.9 | — | |||||
Valuation allowance | 3.5 | — | 4.4 | |||||
Net of additional reserves and lapse of statutes of limitations | 3.3 | (1.1 | ) | (0.9 | ) | |||
Impact of accounting method change | — | (3.4 | ) | — | ||||
Domestic manufacturing deduction | — | (1.4 | ) | (1.9 | ) | |||
Stock-based compensation (a) | (12.3 | ) | — | — | ||||
Transaction costs | 3.4 | — | — | |||||
Other, net | 0.7 | (2.4 | ) | (1.4 | ) | |||
Effective tax rate | 20.7 | % | 24.7 | % | 24.3 | % |
(a) | We adopted new accounting guidance related to employee stock-based compensation in the fourth quarter of 2016. The adoption reduced our full year combined income tax provision for federal, state, and foreign by $8.9 million and the tax rate by approximately 13.5%. |
In thousands | |||||||
Dec. 25, 2016 | Dec. 27, 2015 | ||||||
Liabilities | |||||||
Accelerated depreciation | $ | (152,551 | ) | $ | (169,483 | ) | |
Total deferred tax liabilities | (152,551 | ) | (169,483 | ) | |||
Assets | |||||||
Accrued compensation costs | 29,670 | 38,296 | |||||
Pension and postretirement benefits | 302,565 | 256,418 | |||||
Basis difference and amortization of intangibles | 95,653 | 165,062 | |||||
Federal tax benefits of uncertain state tax positions | 7,015 | 7,506 | |||||
Partnership investments including impairments | 21,670 | 13,107 | |||||
Loss carryforwards | 55,335 | 34,312 | |||||
Other | 53,789 | 38,666 | |||||
Total deferred tax assets | 565,697 | 553,367 | |||||
Valuation allowance | (194,914 | ) | (181,893 | ) | |||
Total net deferred tax assets (liabilities) | $ | 218,232 | $ | 201,991 | |||
Noncurrent deferred tax assets | $ | 218,232 | $ | 201,991 |
In thousands | ||||||||||||||||||||||
Balance at Beginning of Period | Additions/(Reductions) Charged to Expenses | Additions/(Reductions) for Acquisitions/Dispositions | Other (Deductions from)/Additions to Reserves | Foreign Currency Translation | Balance at End of Period | |||||||||||||||||
$ | 181,893 | $ | (4,786 | ) | $ | 27,251 | $ | (3,394 | ) | $ | (6,050 | ) | $ | 194,914 |
In thousands | |||||||||||
Dec. 25, 2016 | Dec. 27, 2015 | Dec. 28, 2014 | |||||||||
Change in unrecognized tax benefits | |||||||||||
Balance at beginning of year | $ | 17,032 | $ | 10,919 | $ | 13,875 | |||||
Additions based on tax positions related to the current year | 125 | 2,021 | 1,768 | ||||||||
Additions for tax positions of prior years | 9,416 | 6,713 | 545 | ||||||||
Reductions for tax positions of prior years | (792 | ) | — | (2,398 | ) | ||||||
Settlements | — | — | (36 | ) | |||||||
Reductions due to lapse of statutes of limitations | (1,891 | ) | (2,621 | ) | (2,835 | ) | |||||
Balance at end of year | $ | 23,890 | $ | 17,032 | $ | 10,919 |
In thousands, except per share amounts | 2016 | 2015 | 2014 | ||||||||
Net income (a) | $ | 52,710 | $ | 146,091 | $ | 210,705 | |||||
Weighted average number of common shares outstanding (basic) | 116,018 | 115,165 | 114,959 | ||||||||
Effect of dilutive securities | |||||||||||
Restricted stock units (RSUs) | 1,475 | 728 | — | ||||||||
Performance shares (PSUs) | 881 | 582 | — | ||||||||
Stock options | 251 | 220 | — | ||||||||
Weighted average number of common shares outstanding (diluted) (a) | 118,625 | 116,695 | 114,959 | ||||||||
Earnings per share (basic) (a) | $ | 0.45 | $ | 1.27 | $ | 1.83 | |||||
Earnings per share (diluted) (a) | $ | 0.44 | $ | 1.25 | $ | 1.83 |
(a) | In 2016, we adopted new guidance around improvements to share-based payment accounting. See Note 16 — Quarterly statements of income (unaudited) for further details on the impacts of this guidance on our fiscal year 2016 net income, number of shares outstanding, and earnings per share amounts. |
2016 | 2015 | 2014 | |||
Expected term | 3 yrs. | 3 yrs. | 3 yrs. | ||
Expected volatility | 42.20% | 32.00% | 39.32% | ||
Risk-free interest rate | 1.31% | 1.10% | 0.78% | ||
Expected dividend yield | 3.93% | 2.51% | 2.70% |
In thousands | |||||||||||
2016 | 2015 | 2014 | |||||||||
Restricted stock and RSUs | $ | 12,889 | $ | 12,235 | $ | 9,150 | |||||
Performance shares | 7,687 | 9,478 | 7,333 | ||||||||
Stock options | — | 29 | 616 | ||||||||
Total stock-based compensation | $ | 20,576 | $ | 21,742 | $ | 17,099 |
Shares | Weighted Average Fair Value | |||||
Outstanding and unvested at June 29, 2015 | 2,885,994 | $ | 10.86 | |||
Granted | 203,061 | 11.31 | ||||
Settled | (136,658 | ) | 10.35 | |||
Canceled | (174,190 | ) | 10.98 | |||
Outstanding and unvested at Dec. 27, 2015 | 2,778,207 | $ | 10.91 | |||
Granted | 1,483,127 | 13.36 | ||||
Settled | (1,066,056 | ) | 10.06 | |||
Canceled | (376,442 | ) | 11.81 | |||
Outstanding and unvested at Dec. 25, 2016 | 2,818,836 | $ | 12.40 |
Target Number of Shares | Weighted Average Fair Value | |||||
Outstanding and unvested at June 29, 2015 | 926,138 | $ | 15.48 | |||
Vested | (31,158 | ) | 15.51 | |||
Canceled | (101,306 | ) | 15.21 | |||
Outstanding and unvested at Dec. 27, 2015 | 793,674 | $ | 15.52 | |||
Granted | 373,658 | 19.30 | ||||
Vested | (265,110 | ) | 13.83 | |||
Canceled | (128,075 | ) | 16.34 | |||
Outstanding and unvested at Dec. 25, 2016 | 774,147 | $ | 17.82 |
Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||
Outstanding at June 29, 2015 | 1,078,289 | $ | 6.80 | 2.5 | $ | 7,901,831 | ||||||
Exercised | (662,304 | ) | 7.53 | |||||||||
Canceled | (4,102 | ) | 12.61 | |||||||||
Outstanding and exercisable at Dec. 27, 2015 | 411,883 | $ | 5.58 | 2.6 | $ | 4,378,900 | ||||||
Exercised | (102,842 | ) | 5.46 | |||||||||
Canceled | (18,774 | ) | 9.40 | |||||||||
Outstanding and exercisable at Dec. 25, 2016 | 290,267 | $ | 5.37 | 1.9 | $ | 1,304,798 |
In thousands | |||||||||||
2016 | Retirement Plans | Foreign Currency Translation | Total | ||||||||
Balance at beginning of year | $ | (1,058,234 | ) | $ | 384,810 | $ | (673,424 | ) | |||
Other comprehensive loss before reclassifications | (166,253 | ) | (84,526 | ) | (250,779 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss | 41,291 | — | 41,291 | ||||||||
Balance at end of year | $ | (1,183,196 | ) | $ | 300,284 | $ | (882,912 | ) |
In thousands | |||||||||||
2015 | Retirement Plans | Foreign Currency Translation | Total | ||||||||
Balance at beginning of year | $ | (1,082,312 | ) | $ | 404,200 | $ | (678,112 | ) | |||
Other comprehensive loss before reclassifications | (12,010 | ) | (19,390 | ) | (31,400 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss | 36,088 | — | 36,088 | ||||||||
Balance at end of year | $ | (1,058,234 | ) | $ | 384,810 | $ | (673,424 | ) |
In thousands | |||||||||||
2014 | Retirement Plans | Foreign Currency Translation | Total | ||||||||
Balance at beginning of year | $ | (873,595 | ) | $ | 431,614 | $ | (441,981 | ) | |||
Other comprehensive income before reclassifications | (232,740 | ) | (27,414 | ) | (260,154 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss | 24,023 | — | 24,023 | ||||||||
Balance at end of year | $ | (1,082,312 | ) | $ | 404,200 | $ | (678,112 | ) |
In thousands | |||||||
2016 | 2015 | ||||||
Amortization of prior service credit | $ | 1,883 | $ | (2,722 | ) | ||
Amortization of actuarial loss | 62,155 | 58,148 | |||||
Total reclassifications, before tax | 64,038 | 55,426 | |||||
Income tax effect | (22,747 | ) | (19,338 | ) | |||
Total reclassifications, net of tax | $ | 41,291 | $ | 36,088 |
In thousands | |||
2017 | $ | 53,071 | |
2018 | 51,313 | ||
2019 | 45,855 | ||
2020 | 40,401 | ||
2021 | 37,615 | ||
Later years | 166,996 | ||
Total | $ | 395,251 |
Pension Plan Assets/Liabilities | |||||||||||||||
In thousands | |||||||||||||||
Fair value measurement as of Dec. 25, 2016(a) | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents | $ | 42,439 | $ | 4,499 | $ | — | $ | 46,938 | |||||||
Corporate stock - Gannett Co., Inc. | 6,031 | — | — | 6,031 | |||||||||||
Corporate stock - other | 577,120 | — | — | 577,120 | |||||||||||
Real estate | — | — | 83,522 | 83,522 | |||||||||||
Interest in common/collective trusts: | |||||||||||||||
Equities | — | 235,384 | — | 235,384 | |||||||||||
Fixed income | — | 253,959 | — | 253,959 | |||||||||||
Interest in reg. invest. companies | 102,412 | — | — | 102,412 | |||||||||||
Partnership/joint venture interests | — | — | 75,967 | 75,967 | |||||||||||
Hedge funds | — | — | 173,937 | 173,937 | |||||||||||
Derivative contracts | — | 2 | 33 | 35 | |||||||||||
Total assets at fair value excluding those measured at net asset value | $ | 728,002 | $ | 493,844 | $ | 333,459 | $ | 1,555,305 | |||||||
Instruments measured at net asset value using the practical expedient: | |||||||||||||||
Real estate funds | 15,730 | ||||||||||||||
Interest in common/collective trusts: | |||||||||||||||
Equities | 204,822 | ||||||||||||||
Fixed income | 515,313 | ||||||||||||||
Interest in reg. invest. companies | 32,066 | ||||||||||||||
Partnership/joint venture interests | 4,821 | ||||||||||||||
Hedge funds | 85,456 | ||||||||||||||
Total assets at fair value | $ | 2,413,513 | |||||||||||||
Liabilities: | |||||||||||||||
Derivative liabilities | $ | — | $ | (498 | ) | $ | (2,008 | ) | $ | (2,506 | ) | ||||
Total liabilities at fair value | $ | — | $ | (498 | ) | $ | (2,008 | ) | $ | (2,506 | ) |
(a) | We use a Dec. 31 measurement date for our retirement plans. |
In thousands | |||||||||||||||
Fair value measurement as of Dec. 27, 2015(a) | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents | $ | 14,938 | $ | 4,916 | $ | — | $ | 19,854 | |||||||
Fixed income: | |||||||||||||||
Corporate bonds | — | 1,275 | — | 1,275 | |||||||||||
Corporate stock - Gannett Co., Inc. | 10,118 | — | — | 10,118 | |||||||||||
Corporate stock - other | 759,479 | — | — | 759,479 | |||||||||||
Real estate | — | — | 103,746 | 103,746 | |||||||||||
Interest in common/collective trusts: | |||||||||||||||
Equities(b) | — | 267,667 | — | 267,667 | |||||||||||
Fixed income | — | 111,724 | — | 111,724 | |||||||||||
Interest in reg. invest. companies | 100,711 | — | — | 100,711 | |||||||||||
Partnership/joint venture interests | — | — | 99,449 | 99,449 | |||||||||||
Hedge funds | — | — | 168,209 | 168,209 | |||||||||||
Derivative contracts | — | 117 | 40 | 157 | |||||||||||
Total assets at fair value excluding those measured at net asset value | $ | 885,246 | $ | 385,699 | $ | 371,444 | $ | 1,642,389 | |||||||
Instruments measured at net asset value using the practical expedient: | |||||||||||||||
Real estate funds | 22,303 | ||||||||||||||
Interest in common/collective trusts: | |||||||||||||||
Equities | 281,492 | ||||||||||||||
Fixed income | 381,937 | ||||||||||||||
Interest in reg. invest. companies | 38,082 | ||||||||||||||
Partnership/joint venture interests | 32,217 | ||||||||||||||
Hedge funds | 162,830 | ||||||||||||||
Total assets at fair value | $ | 2,561,250 | |||||||||||||
Liabilities: | |||||||||||||||
Derivative liabilities | $ | — | $ | (615 | ) | $ | (2,008 | ) | $ | (2,623 | ) | ||||
Total liabilities at fair value | $ | — | $ | (615 | ) | $ | (2,008 | ) | $ | (2,623 | ) |
(a) | We use a Dec. 31 measurement date for our retirement plans. |
• | Other government and corporate bonds are mainly valued based on institutional bid evaluations using proprietary models, using discounted cash flow models or models that derive prices based on similar securities. |
• | Corporate stock is valued primarily at the closing price reported on the active market on which the individual securities are traded. |
• | Investments in direct real estate have been valued by an independent qualified valuation professional in the U.K. using a valuation approach that capitalizes any current or future income streams at an appropriate multiplier. Investments in real estate funds are mainly valued utilizing the net asset valuations provided by the underlying private investment companies or through proprietary models with varying degrees of complexity. |
• | Interests in common/collective trusts and interests in 103-12 investments are primarily equity and fixed income investments valued either through the use of a net asset value as provided monthly by the fund family or fund company or through proprietary models with varying degrees of complexity. Shares in the common/collective trusts are generally redeemable upon request. |
• | Interests in registered investment companies are primarily valued using the published net asset values as quoted through publicly available pricing sources or through proprietary models with varying degrees of complexity. Additionally, the interests are redeemable on request. |
• | Investments in partnerships and joint venture interests classified in Level 3 are valued based on an assessment of each underlying investment, considering items such as expected cash flows, changes in market outlook and subsequent |
• | Investments in hedge funds consist of investments that were formed to invest in mortgage and trading opportunities and are valued at the net asset value as reported by the fund managers. Additionally, there is an investment that that consists of a fund of hedge funds whose strategy is to produce a return uncorrelated with market movements. This fund is classified as a Level 3 because its valuation is derived from unobservable inputs and a proprietary assessment of the underlying investments. Shares in the hedge funds are generally redeemable twice a year or on the last business day of each quarter with at least 60 days written notice subject to potential 5% holdback. |
• | Derivatives primarily consist of forward and swap contracts. Forward contracts are valued at the spot rate, plus or minus forward points between the valuation date and maturity date. Swaps are valued at the mid-evaluation price using discounted cash flow models. Items in Level 3 are valued based on the market values of other securities for which they represent a synthetic combination. |
Pension Plan Assets/Liabilities | |||||||||||||||||||||||||||||||
In thousands | |||||||||||||||||||||||||||||||
For the year ended Dec. 25, 2016 | |||||||||||||||||||||||||||||||
Actual Return on Plan Assets | |||||||||||||||||||||||||||||||
Balance at Beginning of Year | Relating to Assets Still Held at Report Date | Relating to Assets Sold During the Period | Purchases | Sales | Settlements | Transfers In and/or Out of Level 3 (a) | Balance at End of Year | ||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||
Real estate | $ | 103,746 | $ | (19,027 | ) | $ | — | $ | 1,697 | $ | (2,894 | ) | $ | — | $ | — | $ | 83,522 | |||||||||||||
Partnership/joint venture interests | 99,449 | (9,075 | ) | — | 4,257 | — | (18,664 | ) | — | 75,967 | |||||||||||||||||||||
Hedge funds | 168,209 | 5,728 | — | — | — | — | — | 173,937 | |||||||||||||||||||||||
Derivative contracts | 40 | (7 | ) | — | — | — | — | — | 33 | ||||||||||||||||||||||
Total | $ | 371,444 | $ | (22,381 | ) | $ | — | $ | 5,954 | $ | (2,894 | ) | $ | (18,664 | ) | $ | — | $ | 333,459 | ||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Derivative liabilities | $ | (2,008 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (2,008 | ) |
(a) | Our policy is to recognize transfers in and transfers out as of the beginning of the reporting period. |
In thousands | |||||||||||||||||||||||||||||||||||
For the year ended Dec. 27, 2015 | |||||||||||||||||||||||||||||||||||
Actual Return on Plan Assets | |||||||||||||||||||||||||||||||||||
Balance at Beginning of Year | Relating to Assets Still Held at Report Date | Relating to Assets Sold During the Period | Purchases | Sales | Settlements | Transfer from parent | Transfers In and/or Out of Level 3(a) | Balance at End of Year | |||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Fixed income: | |||||||||||||||||||||||||||||||||||
Mortgage backed securities | $ | 95 | $ | — | $ | — | $ | — | $ | (95 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Corporate bonds | 382 | (8 | ) | — | — | — | (374 | ) | — | — | — | ||||||||||||||||||||||||
Real estate | 94,902 | 3,626 | — | 5,218 | — | — | — | — | 103,746 | ||||||||||||||||||||||||||
Partnership/joint venture interests | 136,501 | (10,184 | ) | — | 5,858 | — | (20,128 | ) | (12,598 | ) | — | 99,449 | |||||||||||||||||||||||
Hedge funds | 176,704 | 5,896 | — | — | — | — | (14,391 | ) | — | 168,209 | |||||||||||||||||||||||||
Derivative contracts | 124 | (84 | ) | — | — | — | — | — | — | 40 | |||||||||||||||||||||||||
Total | $ | 408,708 | $ | (754 | ) | $ | — | $ | 11,076 | $ | (95 | ) | $ | (20,502 | ) | $ | (26,989 | ) | $ | — | $ | 371,444 | |||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Derivative liabilities | $ | (2,008 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (2,008 | ) |
(a) | Our policy is to recognize transfers in and transfers out as of the beginning of the reporting period. |
Non-Financial Assets | |||||||||||||||
In thousands | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Fair value measurement as of Dec. 25, 2016 | |||||||||||||||
Asset held for sale | $ | — | $ | — | $ | 4,522 | $ | 4,522 | |||||||
Fair value measurement as of Dec. 27, 2015 | |||||||||||||||
Asset held for sale | $ | — | $ | — | $ | 12,288 | $ | 12,288 |
• | Publishing, which consists of our portfolio of regional, national, and international newspaper publishers. The results of this segment include retail, classified, and national advertising revenues, circulation revenues from the distribution of our publications on our digital platforms, home delivery of our publications, and single copy sales, and other revenues from commercial printing and distribution arrangements. |
• | ReachLocal, which consists exclusively of our ReachLocal digital marketing solutions subsidiary. The results of this segment include advertising revenues from our search and display services as well as and other revenues related to web presence and software solutions provided by ReachLocal. |
In thousands | Publishing | ReachLocal | Corporate and Other | Consolidated | |||||||||||
2016 | |||||||||||||||
Advertising | $ | 1,603,515 | $ | 100,280 | $ | — | $ | 1,703,795 | |||||||
Circulation | 1,133,676 | — | — | 1,133,676 | |||||||||||
Other | 195,904 | 9,864 | 4,235 | 210,003 | |||||||||||
Total revenues | $ | 2,933,095 | $ | 110,144 | $ | 4,235 | $ | 3,047,474 | |||||||
Adjusted EBITDA | $ | 449,769 | $ | (5,852 | ) | $ | (94,304 | ) | $ | 349,613 | |||||
2015 | |||||||||||||||
Advertising | $ | 1,611,445 | $ | — | $ | — | $ | 1,611,445 | |||||||
Circulation | 1,060,118 | — | — | 1,060,118 | |||||||||||
Other | 209,655 | — | 3,794 | 213,449 | |||||||||||
Total revenues | $ | 2,881,218 | $ | — | $ | 3,794 | $ | 2,885,012 | |||||||
Adjusted EBITDA | $ | 468,999 | $ | — | $ | (77,484 | ) | $ | 391,515 | ||||||
2014 | |||||||||||||||
Advertising | $ | 1,840,067 | $ | — | $ | — | $ | 1,840,067 | |||||||
Circulation | 1,109,729 | — | — | 1,109,729 | |||||||||||
Other | 222,082 | — | — | 222,082 | |||||||||||
Total revenues | $ | 3,171,878 | $ | — | $ | — | $ | 3,171,878 | |||||||
Adjusted EBITDA | $ | 498,260 | $ | — | $ | (26,049 | ) | $ | 472,211 |
In thousands | 2016 | 2015 | 2014 | ||||||||
Net income (GAAP basis) | $ | 52,710 | $ | 146,091 | $ | 210,705 | |||||
Provision for income taxes | 13,718 | 47,884 | 67,560 | ||||||||
Equity income in unconsolidated investees, net | (1,519 | ) | (11,981 | ) | (15,857 | ) | |||||
Interest expense | 12,791 | 4,562 | 576 | ||||||||
Other non-operating items, net | 1,388 | (17,125 | ) | (653 | ) | ||||||
Operating income (GAAP basis) | 79,088 | 169,431 | 262,331 | ||||||||
Early retirement program | 837 | 42,081 | — | ||||||||
Severance-related charges | 42,689 | 30,185 | 19,797 | ||||||||
Acquisition-related expenses | 32,683 | — | — | ||||||||
Facility consolidation and asset impairment charges | 58,171 | 34,278 | 35,216 | ||||||||
Other items | 3,181 | 7,988 | 43,804 | ||||||||
Depreciation | 118,092 | 95,916 | 97,178 | ||||||||
Amortization | 14,872 | 11,636 | 13,885 | ||||||||
Adjusted EBITDA (non-GAAP basis) | $ | 349,613 | $ | 391,515 | $ | 472,211 |
In thousands | |||||||
2015(a) | 2014 | ||||||
Corporate allocations (b) | $ | 25,832 | $ | 60,628 | |||
Occupancy (c) | 2,884 | 5,642 | |||||
Depreciation (d) | 4,067 | 7,960 | |||||
Other support costs (e) | 6,249 | 15,743 | |||||
Cost recoveries (f) | (6,055 | ) | (9,501 | ) | |||
Total | $ | 32,977 | $ | 80,472 |
(a) | Costs were allocated from our former parent to us up to the spin-off date. No costs were allocated to us by our former parent after the spin-off. |
(b) | The corporate allocations related to support we received from our former parent and its affiliates for certain corporate activities include: (i) corporate general and administrative expenses, (ii) marketing services, (iii) investor relations, (iv) legal, (v) human resources, (vi) internal audit, (vii) financial reporting, (viii) tax, (ix) treasury, (x) information technology, (xi) production services, (xii) travel services and (xiii) other former parent corporate and infrastructure costs. For these services, we recorded an allocation of a management fee based on actual costs incurred by our former parent and its affiliates. This was allocated to us based upon our revenue as a percentage of total former parent revenue in each fiscal period. |
(c) | Occupancy costs relate to certain facilities owned and/or leased by our former parent and its affiliates that were utilized by our employees and principally relate to shared corporate office space. These costs were charged to us primarily based on actual square footage utilized or our revenue as a percentage of total former parent revenue in each fiscal period. Occupancy costs include facility rent, repairs and maintenance, security and other occupancy related costs incurred to manage the properties. |
(d) | Depreciation expense was allocated by former parent and its affiliates for assets primarily relate to facilities and IT equipment that are utilized by former parent and us to operate our businesses. Depreciation expense was allocated primarily based on our revenue as a percentage of total former parent revenue or our utilization of these assets. |
(e) | Other support costs related to charges to us from former parent and its affiliates include certain insurance costs and our allocated portions of share-based compensation costs and net periodic pension costs relating to the Gannett Supplemental Retirement Plan for employees of our former parent. Such costs were allocated based on actual costs incurred or our revenue as a percentage of total former parent revenue. |
(f) | Cost recoveries reflect costs recovered from our former parent and our former parent's affiliates for functions provided by us such as functions that serve our former parent's digital and broadcasting platforms for content optimization and financial transaction processing at shared service centers. Such costs were primarily allocated based on our revenue as a percentage of total former parent revenue or based upon transactional volume in each fiscal year. |
In thousands, except per share amounts | |||||||||||||||||||
Fiscal year ended Dec. 25, 2016 | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Total | ||||||||||||||
Operating revenues | $ | 659,368 | $ | 748,791 | $ | 772,321 | $ | 866,994 | $ | 3,047,474 | |||||||||
Operating income | $ | 47,459 | $ | 24,033 | $ | (28,590 | ) | $ | 36,186 | $ | 79,088 | ||||||||
Net income (a) | $ | 39,596 | $ | 12,481 | $ | (23,961 | ) | $ | 24,594 | $ | 52,710 | ||||||||
Per share computations | |||||||||||||||||||
Net income per share—basic (a) | $ | 0.34 | $ | 0.11 | $ | (0.21 | ) | $ | 0.21 | $ | 0.45 | ||||||||
Net income per share—diluted (a) | $ | 0.33 | $ | 0.10 | $ | (0.21 | ) | $ | 0.21 | $ | 0.44 | ||||||||
Dividends per share | $ | 0.16 | $ | 0.16 | $ | 0.16 | $ | 0.16 | $ | 0.64 | |||||||||
Weighted average number of shares outstanding | |||||||||||||||||||
Basic | 116,311 | 116,516 | 116,556 | 114,688 | 116,018 | ||||||||||||||
Diluted | 119,059 | 119,377 | 116,556 | 117,053 | 118,625 |
(a) | In fiscal year 2016, we elected to early adopt guidance around improvements to share-based payment accounting. This guidance amends the calculation of earnings per share by requiring entities to exclude from assumed proceeds excess tax benefits and tax deficiencies that previously would have been recorded in additional paid-in capital. Such benefits and deficiencies are now captured as part of the calculation of the provision for income taxes. For entities who elect to early adopt, the standard requires the reflection of any adjustments to earnings per share be shown as of the beginning of the fiscal year of adoption. As a result, to capture the effect of adopting the standard, we have retrospectively adjusted our net income for Quarter 1 by $8.3 million, Quarter 2 by $0.2 million, and Quarter 3 2016 by $0.3 million. Additionally, we adjusted our diluted weighted average number of shares outstanding for Quarter 1 by approximately 403 and Quarter 2 by 422. Our Quarter 3 diluted weighted average number of shares was unchanged due to the reporting of a net loss for the quarter. |
In thousands, except per share amounts | |||||||||||||||||||
Fiscal year ended Dec. 27, 2015 | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Total | ||||||||||||||
Operating revenues | $ | 717,360 | $ | 727,072 | $ | 701,236 | $ | 739,344 | $ | 2,885,012 | |||||||||
Operating income | $ | 29,811 | $ | 48,994 | $ | 52,113 | $ | 38,513 | $ | 169,431 | |||||||||
Net income | $ | 33,247 | $ | 53,327 | $ | 39,166 | $ | 20,351 | $ | 146,091 | |||||||||
Per share computations | |||||||||||||||||||
Net income per share—basic | $ | 0.29 | $ | 0.46 | $ | 0.34 | $ | 0.18 | $ | 1.27 | |||||||||
Net income per share—diluted | $ | 0.29 | $ | 0.46 | $ | 0.33 | $ | 0.17 | $ | 1.25 | |||||||||
Dividends per share | $ | — | $ | — | $ | 0.16 | $ | 0.16 | $ | 0.32 | |||||||||
Weighted average number of shares outstanding | |||||||||||||||||||
Basic | 114,959 | 114,959 | 115,186 | 115,555 | 115,165 | ||||||||||||||
Diluted | 114,959 | 114,959 | 118,168 | 118,694 | 116,695 |
(a) | Financial Statements, Financial Statement Schedules and Exhibits. |
Dated: February 22, 2017 | GANNETT CO., INC. (Registrant) | ||
By: | /s/ Alison K. Engel | ||
Alison K. Engel | |||
Senior Vice President, Chief | |||
Financial Officer and Treasurer (principal financial officer) |
Dated: February 22, 2017 | /s/ Robert J. Dickey | |
Robert J. Dickey | ||
President and Chief Executive | ||
Officer (principal executive officer) | ||
Dated: February 22, 2017 | /s/ Alison K. Engel | |
Alison K. Engel | ||
Senior Vice President, Chief | ||
Financial Officer and Treasurer (principal financial officer) | ||
Dated: February 22, 2017 | /s/ Lori C. Locke | |
Lori C. Locke | ||
Vice President and Controller | ||
(principal accounting officer) |
Dated: February 22, 2017 | /s/ John E. Cody | |
John E. Cody, Director | ||
Dated: February 22, 2017 | /s/ Stephen W. Coll | |
Stephen W. Coll, Director | ||
Dated: February 22, 2017 | /s/ Robert J. Dickey | |
Robert J. Dickey, Director | ||
Dated: February 22, 2017 | /s/ Donald E. Felsinger | |
Donald E. Felsinger, Director | ||
Dated: February 22, 2017 | /s/ Lila Ibrahim | |
Lila Ibrahim, Director | ||
Dated: February 22, 2017 | /s/ Lawrence S. Kramer | |
Lawrence S. Kramer, Director | ||
Dated: February 22, 2017 | /s/ John Jeffry Louis | |
John Jeffry Louis | ||
Director, Chairman | ||
Dated: February 22, 2017 | /s/ Tony A. Prophet | |
Tony A. Prophet, Director | ||
Dated: February 22, 2017 | /s/ Debra A. Sandler | |
Debra A. Sandler, Director | ||
Dated: February 22, 2017 | /s/ Chloe R. Sladden | |
Chloe R. Sladden, Director |
Exhibit Number | Exhibit | Location | ||
2-1 | Separation and Distribution Agreement, dated as of June 26, 2015, by and between Parent and the Company. | Incorporated herein by reference to Exhibit 2-1 to the Company's Registration Statement on Form S-3, filed by the Company with the SEC on June 29, 2015. | ||
2-2 | Agreement and Plan of Merger among Gannett Co., Inc., Jupiter Merger Sub, Inc. and Journal Media Group, Inc. dated as of October 7, 2015. | Incorporated by reference to Exhibit 2-1 to the Company's Current Report on Form 8-K filed by the Company with the SEC on October 8, 2015. | ||
2-3 | Agreement and Plan of Merger among Gannett Co., Inc., Raptor Merger Sub, Inc. and ReachLocal, Inc. dated as of June 27, 2016. | Incorporated by reference to Exhibit 2-1 to the Company's Current Report on Form 8-K filed by the Company with the SEC on June 27, 2016. | ||
3-1 | Amended and Restated Certificate of Incorporation of the Company. | Incorporated herein by reference to Exhibit 3-1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 26, 2016. | ||
3-2 | Amended and Restated Bylaws of the Company, effective February 23, 2016. | Incorporated herein by reference to Exhibit 3-1 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on February 24, 2016. | ||
10-1 | Transition Services Agreement, dated as of June 26, 2015, by and between Parent and the Company. | Incorporated by reference to Exhibit 10-1 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015. | ||
10-2 | Tax Matters Agreement, dated as of June 26, 2015, by and between Parent and the Company. | Incorporated by reference to Exhibit 10-2 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015. | ||
10-3 | Employee Matters Agreement, dated as of June 26, 2015, by and between Parent and the Company.* | Incorporated herein by reference to Exhibit 10-1 to the Company's Registration Statement on Form S-3, filed by the Company with the SEC on June 29, 2015. | ||
10-4 | Master Transaction Agreement, dated as of July 30, 2014, by and among The E. W. Scripps Company, Scripps Media, Inc., Desk Spinco, Inc., Scripps NP Operating, LLC (f/k/a Desk NP Operating, LLC), Desk NP Merger Co., Desk BC Merger, LLC, Journal Communications, Inc., Boat Spinco, Inc., Boat NP Merger Co., and Journal Media Group, Inc. (f/k/a Boat NP Newco, Inc.) | Incorporated by reference to Exhibit 2-1 to the Registration Statement on Form S-4, SEC File No. 333-200388, filed by The E.W. Scripps Company on November 20, 2014. | ||
10-5 | Scripps Tax Matters Agreement, dated July 30, 2014, by and among The E. W. Scripps Company, Desk Spinco, Inc. and Journal Media Group, Inc. (f/k/a Boat NP Newco, Inc.) | Incorporated by reference to Exhibit 10-2 to the Current Report on Form 8-K filed by Journal Communications, Inc. on July 30, 2014. | ||
10-6 | Journal Tax Matters Agreement, dated July 30, 2014, by and among Desk BC Merger, LLC, Journal Communications, Inc., Boat Spinco, Inc. and Journal Media Group, Inc. (f/k/a Boat NP Newco, Inc.) | Incorporated by reference to Exhibit 10-3 to the Current Report on Form 8-K filed by Journal Communications, Inc. on July 30, 2014. | ||
10-7 | Credit Agreement among the Company, the several lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, PNC Bank, N.A. and U.S. Bank, National Association, as Co-Syndication Agents, dated as of June 29, 2015. | Incorporated by reference to Exhibit 10-4 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015. | ||
10-8 | Security Agreement, made by the Company and certain of its Subsidiaries, in favor of JPMorgan Chase Bank, N.A., as Administrative Agent, dated as of June 29, 2015. | Incorporated by reference to Exhibit 10-5 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015. | ||
10-9 | Trademark Security Agreement, dated as of June 29, 2015, by the Company and certain of its Subsidiaries, in favor of JPMorgan Chase Bank, N.A., as Administrative Agent. | Incorporated by reference to Exhibit 10-6 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015. | ||
10-10 | Guarantee Agreement made by the Subsidiary Guarantors listed on the signature page thereto in favor of JPMorgan Chase Bank, N.A., as Administrative Agent, dated as of June 29, 2015. | Incorporated by reference to Exhibit 10-7 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015. | ||
10-11 | Form of Mortgage. | Incorporated by reference to Exhibit 10-24 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 27, 2015. | ||
10-12 | Form of Deed of Trust. | Incorporated by reference to Exhibit 10-25 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 27, 2015. | ||
10-13 | Schedule of Mortgages or Deeds of Trust Granted by Gannett Subsidiaries. | Incorporated by reference to Exhibit 10-1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 25, 2016. |
10-14 | First Amendment to the Credit Agreement. | Incorporated by reference to Exhibit 10-27 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 25, 2016. | ||
10-15 | 2015 Deferred Compensation Plan Rules for Pre-2005 Deferrals.* | Incorporated by reference to Exhibit 10-8 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015. | ||
10-16 | Amendment No. 1 to 2015 Deferred Compensation Plan Rules for Post-2004 Deferrals.* | Incorporated by reference to Exhibit 10-1 to the Company's Current Report on Form 8-K filed by the Company with the SEC on December 2, 2016. | ||
10-17 | 2015 Deferred Compensation Plan Rules for Post-2004 Deferrals.* | Incorporated by reference to Exhibit 10-9 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015. | ||
10-18 | 2015 Supplemental Retirement Plan.* | Incorporated by reference to Exhibit 10-10 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015. | ||
10-19 | Supplemental Executive Medical Plan.* | Incorporated by reference to Exhibit 10-11 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015. | ||
10-20 | Gannett Co., Inc. Supplemental Executive Medical Plan.* | Incorporated by reference to Exhibit 10-12 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015. | ||
10-21 | Amendment No. 1 to Supplemental Executive Medical Plan for Retired Executives.* | Attached. | ||
10-22 | 2015 Key Executive Life Insurance Plan.* | Incorporated by reference to Exhibit 10-13 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015. | ||
10-23 | 2015 Key Executive Life Insurance Plan Participation Agreement.* | Incorporated by reference to Exhibit 10-14 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on June 30, 2015. | ||
10-24 | 2015 Omnibus Incentive Compensation Plan.* | Incorporated herein by reference to Exhibit 4-1 to the Company's Registration Statement on Form S-3, filed by the Company with the SEC on June 29, 2015. | ||
10-25 | Letter Agreement with Robert J. Dickey.* | Incorporated by reference to Exhibit 10-15 to the Company's Registration Statement on Form 10, filed by the Company with the SEC on June 9, 2015. | ||
10-26 | Letter Agreement with Alison K. Engel.* | Incorporated by reference to Exhibit 10-16 to the Company's Registration Statement on Form 10, filed by the Company with the SEC on June 9, 2015. | ||
10-27 | Letter Agreement with John M. Zidich.* | Incorporated by reference to Exhibit 10-17 to the Company's Registration Statement on Form 10, filed by the Company with the SEC on June 9, 2015. | ||
10-28 | Letter Agreement with Joanne Lipman.* | Attached. | ||
10-29 | Letter Agreement with Sharon T. Rowlands.* | Attached. | ||
10-30 | Employment Letter between ReachLocal, Inc. and Sharon T. Rowlands, dated March 31, 2014.* | Incorporated by reference to Exhibit 10-1 of the Current Report on Form 8-K filed by ReachLocal, Inc. with the SEC on April 2, 2014. | ||
10-31 | Amendment to Employment Letter between ReachLocal, Inc. and Sharon T. Rowlands, dated November 1, 2015.* | Incorporated by reference to Exhibit 10-1 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 filed by ReachLocal, Inc. with the SEC on November 9, 2015. | ||
10-32 | Amendment to Employment Letter between ReachLocal, Inc. and Sharon T. Rowlands, effective August 9, 2016.* | Attached. | ||
10-33 | Employment Contract between Newsquest Media Group Limited and Henry Faure Walker.* | Incorporated by reference to Exhibit 10-36 to the Company's Annual Report on Form 10-K for the fiscal year ended December 27, 2015. | ||
10-34 | Termination Benefits Agreement with Lawrence S. Kramer.* | Incorporated by reference to Exhibit 10-19 to the Company's Registration Statement on Form 10, filed by the Company with the SEC on June 9, 2015. | ||
10-35 | Agreement and Release with Lawrence S. Kramer.* | Incorporated by reference to Exhibit 10-20 to the Company's Registration Statement on Form 10, filed by the Company with the SEC on June 9, 2015. |
10-36 | Form of Director RSU Award Agreement.* | Incorporated by reference to Exhibit 10-1 to the Company's Current Report on Form 8-K filed by the Company with the SEC on July 30, 2015. | ||
10-37 | Form of Executive Officer RSU Award Agreement.* | Incorporated by reference to Exhibit 10-2 to the Company's Current Report on Form 8-K filed by the Company with the SEC on July 30, 2015. | ||
10-38 | Form of Executive Officer Restricted Stock Unit Award Agreement.* | Incorporated by reference to Exhibit 10-3 to the Company's Current Report on Form 8-K filed by the Company with the SEC on December 14, 2015. | ||
10-39 | Form of Executive Officer Performance Share Unit Award Agreement.* | Incorporated by reference to Exhibit 10-4 to the Company's Current Report on Form 8-K filed by the Company with the SEC on December 14, 2015. | ||
10-40 | Form of RSU Award Agreement for U.K. Employees.* | Incorporated by reference to Exhibit 10-38 to the Company's Annual Report on Form 10-K for the fiscal year ended December 27, 2015. | ||
10-41 | Form of TSR Award Agreement for U.K. Employees.* | Attached. | ||
10-42 | Form of Retention RSU Award Agreement with Sharon T. Rowlands.* | Attached. | ||
10-43 | Form of Retention Cash Award Agreement with Sharon T. Rowlands.* | Attached. | ||
10-44 | 2015 Change in Control Severance Plan. | Incorporated by reference to Exhibit 10-3 to the Company's Current Report on Form 8-K filed by the Company with the SEC on July 30, 2015. | ||
10-45 | Executive Severance Plan. | Incorporated by reference to Exhibit 10-3 to the Company's Current Report on Form 8-K filed by the Company with the SEC on July 30, 2015. | ||
10-46 | Form of Indemnification Agreement. | Incorporated by reference to Exhibit 10-1 to the Company's Current Report on Form 8-K filed by the Company with the SEC on December 14, 2015. | ||
10-47 | Gannett Co., Inc. Clawback Policy, effective December 9, 2015. | Incorporated by reference to Exhibit 10-2 to the Company's Current Report on Form 8-K filed by the Company with the SEC on December 14, 2015. | ||
10-48 | Summary of Non-Employee Director Compensation.* | Incorporated by reference to Exhibit 10-37 to the Company's Annual Report on Form 10-K for the fiscal year ended December 27, 2015. | ||
21-1 | List of subsidiaries. | Attached. | ||
23 | Consent of Independent Registered Public Accounting Firm. | Attached. | ||
31-1 | Rule 13a-14(a) Certification of CEO. | Attached. | ||
31-2 | Rule 13a-14(a) Certification of CFO. | Attached. | ||
32-1 | Section 1350 Certification of CEO. | Attached. | ||
32-2 | Section 1350 Certification of CFO. | Attached. | ||
101 | The following financial information from Gannett Co., Inc. Annual Report on Form 10-K for the year ended December 25, 2016, formatted in XBRL includes: (i) Consolidated Balance Sheets at December 25, 2016 and December 27, 2015; (ii) Consolidated and Combined Statements of Income for the 2016, 2015 and 2014 fiscal years; (iii) Consolidated and Combined Statements of Comprehensive Income (Loss)for the 2016, 2015 and 2014 fiscal years; (iv) Consolidated and Combined Cash Flow Statements for the 2016, 2015 and 2014 fiscal years; (v) Consolidated and Combined Statements of Equity for the 2016, 2015 and 2014 fiscal years; and (vi) the Notes to Consolidated and Combined Financial Statements. | Attached. | ||
* | Asterisks identify management contracts and compensatory plans or arrangements. |
Position: | Chief Executive Officer - ReachLocal, Inc. |
Annual Bonus: | You will be eligible to participate in an annual bonus plan for 2016 contingent upon your performance and company performance, as well as the availability of funds in the bonus pool. Your target annual bonus percentage is 120% of your base salary. Beginning with the 2017 annual bonus plan year, your annual incentive target will be adjusted to 75% of your then base salary. |
Long-term Incentive: | You will be eligible for an annual long-term incentive compensation grant, based on an effective date of January 2017, subject to the terms and guidelines in place at that time of the grant, as determined and approved by the Executive Compensation Committee of the Gannett Board of Directors. For your current job level, the typical forms of award include a combination of TSRs (performance share awards) and restricted share units (RSUs). |
Retention Award: | You will be eligible for a one-time retention award in the form of cash and equity (stock) in the total value of $1,650,000 as of the date of grant, subject to the terms and guidelines as determined and approved by the Executive Compensation Committee of the Gannett Board of Directors. The retention award will be paid out over a 3-year period beginning from a specified date after the closing as long as you remain an active employee, in good standing with the Company at the time of vest or payout. Generally, in the event of your voluntary termination from the Company, any unvested equity and unpaid cash awards related to this retention award will be forfeited as of the effective date of your termination. If your employment is involuntarily terminated by the Company without “Cause” (as defined in the award agreements), you will become full vested in the unvested portion of your retention cash and equity awards. Your retention package will also vest if you are required to report to anyone below the position of Gannett’s Chief Executive Officer, or there is a diminution in your job scope where you no longer directly or indirectly manage the Product and Sales teams of ReachLocal. |
Payout or Vest Interval | ||||||||||||
Value | Interval #1 – 1 Year Anniversary of Close | Interval #2 – 2 Year Anniversary of Close | Interval #3 – 3 Year Anniversary of Close | |||||||||
50% Cash | $825,000 | 25% or $206,250 | 25% or $206,250 | 50% or $412,500 | ||||||||
50% Stock | $825,000* | 25% or $206,250* | 25% or $206,250* | 50% or $412,500* | ||||||||
Total | $1,650,000 | $412,500 | $412,500 | $825,000 |
1. | The second sentence of Section 1 of the Employment Letter is hereby deleted. |
2. | The first sentence of Section 2(b) of the Employment Letter is hereby amended effective for annual bonus programs commencing on or after January 1, 2017, by replacing the reference to “120%” with “75%”, and adding the following sentence to the end of such Section: |
3. | Sections 2(c) and 4(a) are deleted in their entirety. |
4. | Exhibit A to the Employment Letter is hereby deleted in its entirety, and Section 3 is hereby replaced in its entirety with the following: |
5. | As retention awards, and subject to Sharon T. Rowlands’ execution thereof, Gannett hereby grants Sharon T. Rowlands awards pursuant to the Stock Unit Award |
6. | This Amendment shall become effective on August 9, 2016. |
7. | Except as provided above your rights under your rights and responsibilities under your Employment Letter remain in full effect. |
Performance Period End Date: | 12/31/19 |
Performance Share Payment Date: | On a date specified by the Committee that is within the first 90 days of 2020 |
• | any material misappropriation of funds or property of the Company, the Subsidiary or their affiliates by the Employee; |
• | unreasonable and persistent neglect or refusal by the Employee to perform his or her duties which is demonstrably willful and deliberate on the Employee’s part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company or the Subsidiary and which is not remedied in a reasonable period of time after receipt of written notice from the Subsidiary specifying such breach; |
• | conviction of the Employee of a securities law violation or a felony involving moral turpitude; or |
• | the Employee being found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any Federal or State securities law or any equivalent applicable law in the Relevant Jurisdiction. |
• | the material diminution of the Employee’s duties, authorities or responsibilities from those in effect immediately prior to the Change in Control; |
• | a material reduction in the Employee’s base salary or target bonus opportunity as in effect on the date immediately prior to the Change in Control; |
• | the relocation of the Employee’s office from the location at which the Employee is principally employed immediately prior to the date of the Change in Control to a location 35 or more miles farther from the Employee’s residence immediately prior to the Change in Control, and recognizing that the Employee shall be expected to travel on the Subsidiary’s business to an extent substantially consistent with the Employee’s business travel obligations prior to the Change in Control; or |
• | the failure by the Subsidiary or its affiliate to pay any material compensation or benefits due to the Employee. |
• | The converted or substituted award must be a right to receive an amount of cash and/or equity that has a value, measured at the time of such conversion or substitution, that is equal to the value of this Award as of the date of the Change in Control; |
• | Any equity payable in connection with a converted or substituted award must be publicly traded equity securities of the Company, a successor company or their direct or indirect parent company, and such equity issuable with respect to a converted or substituted award must be covered by a registration statement filed with the Securities and Exchange Commission that permits the immediate sale of such shares on a national exchange; |
• | The vesting terms of any converted or substituted award must be substantially identical to the terms of this Award; and |
• | The other terms and conditions of any converted or substituted award must be no less favorable to the Employee than the terms of this Award are as of the date of the Change in Control (including the provisions that would apply in the event of a subsequent Change in Control). |
1. | Calculate the Total Shareholder Return for the Company and each of the Comparator Companies from the first day of the Incentive Period to the applicable measurement date. |
2. | Calculate the percentile ranking of each Comparator Company (excluding the Company) based on its Total Shareholder Return during the applicable measurement period; |
3. | Determine the Company’s percentile ranking based on its Total Shareholder Return and the percentile rankings of the Comparator Companies with Total Shareholder Returns immediately above and below the Company using straight line interpolation; and |
4. | Calculate the Resulting Shares Earned percentage based on the Company’s percentile ranking and the below chart using straight line interpolation. The Resulting Shares Earned percentage is the applicable percentage used to determine the number of Performance Shares that have been earned. |
Company’s Percentile in 3-Year TSR vs. Comparator Companies | Resulting Shares Earned (% of Target) | Value of Each Share Earned |
90th or above | 200% | Each share earned is also impacted by share price change during the cycle |
70th | 150% | |
50th | 100% | |
30th | 50% | |
<30th | 0% | |
Straight-line interpolation between points |
A.H. Belo Corp. | Angie’s List, Inc. | Harte Hanks, Inc. |
IAC/Interactivecorp | Lee Enterprises, Inc. | McClatchy Co. – CL A |
Meredith Corp. | New Media Investment Group | New York Times Co. – CL A |
News Corp. | Time, Inc. | Tronc Inc. |
Yelp, Inc. |
(a) | To the extent permitted by Code Section 162(m) and the Plan, the Committee shall have the authority to adjust the number of Performance Shares that are payable under the Award Agreement, adjust the Total Shareholder Return calculations or alter the methodology for calculating the number of Performance Shares to take into account the effects of a stock split, reverse stock split, stock dividend, spin-off, reorganization, recapitalization or similar transaction. |
(b) | The aggregate grant with respect to awards of Performance Shares or Restricted Stock Units made in any one fiscal year to any one participant under the Plan may not exceed the value of five hundred thousand (500,000) Shares. |
(c) | Before any Performance Shares are paid to the Employee, the Committee will certify, in writing, the Company’s satisfaction of the pre-established performance target and the number of Performance Shares payable to the Employee. |
Stock Unit Vesting Schedule: | 25% of the Stock Units shall vest on __/__/17* |
Payment Date: | 25% of the Stock Units shall be paid on __/__/17* |
• | the Employee is required to report to a person below the Company’s Chief Executive Officer; or |
• | the Employee ceases to be directly or indirectly responsible for the Product and Sales teams of ReachLocal, Inc. or the successor to such business. |
• | embezzlement, fraud, misappropriation of funds, breach of fiduciary duty or other act of material dishonesty committed by the Employee or at his or her direction; |
• | failure by the Employee to perform adequately the duties of his or her position, as a result of neglect or refusal, that he or she does not remedy within thirty (30) days after receipt of written notice from the Company; |
• | the Employee’s violation of the Company’s employment policies; |
• | the Employee’s conviction of, or plea of guilty or nolo contendere to a felony or any crime involving moral turpitude; or |
• | the Employee is found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any Federal or State securities law. |
• | any material misappropriation of funds or property of the Company or its affiliate by the Employee; |
• | unreasonable and persistent neglect or refusal by the Employee to perform his or her duties which is demonstrably willful and deliberate on the Employee’s part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company and which is not remedied in a reasonable period of time after receipt of written notice from the Company specifying such breach; |
• | conviction of the Employee of a securities law violation or a felony involving moral turpitude; or |
• | the Employee being found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any Federal or State securities law. |
• | the material diminution of the Employee’s duties, authorities or responsibilities from those in effect immediately prior to the Change in Control; |
• | a material reduction in the Employee’s base salary or target bonus opportunity as in effect on the date immediately prior to the Change in Control; |
• | the relocation of the Employee’s office from the location at which the Employee is principally employed immediately prior to the date of the Change in Control to a location 35 or more miles farther from the Employee’s residence immediately prior to the Change in Control, and recognizing that the Employee shall be expected to travel on the Company’s business to an extent substantially consistent with the Employee’s business travel obligations prior to the Change in Control; or |
• | the failure by the Company or its affiliate to pay any material compensation or benefits due to the Employee. |
• | The converted or substituted award must be a right to receive an amount of cash and/or equity that has a value, measured at the time of such conversion or substitution, that is equal to the value of this Award as of the date of the Change in Control; |
• | Any equity payable in connection with a converted or substituted award must be publicly traded equity securities of the Company, a successor company or their direct or indirect parent company, and such equity issuable with respect to a converted or substituted award must be covered by a registration statement filed with the Securities Exchange Commission that permits the immediate sale of such shares on a national exchange; |
• | The vesting terms of any converted or substituted award must be substantially identical to the terms of this Award; and |
• | The other terms and conditions of any converted or substituted award must be no less favorable to the Employee than the terms of this Award are as of the date of the |
Cash Award Vesting Schedule: | 25% of the Cash Award shall vest on __/__/17* |
Payment Date: | 25% of the Cash Award shall be paid on __/__/17* |
• | the Employee is required to report to a person below the Company’s Chief Executive Officer; or |
• | the Employee ceases to be directly or indirectly responsible for the Product and Sales teams of ReachLocal, Inc. or the successor to such business. |
• | embezzlement, fraud, misappropriation of funds, breach of fiduciary duty or other act of material dishonesty committed by the Employee or at his or her direction; |
• | failure by the Employee to perform adequately the duties of his or her position, as a result of neglect or refusal, that he or she does not remedy within thirty (30) days after receipt of written notice from the Company; |
• | the Employee’s violation of the Company’s employment policies; |
• | the Employee’s conviction of, or plea of guilty or nolo contendere to a felony or any crime involving moral turpitude; or |
• | the Employee is found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any Federal or State securities law. |
• | any material misappropriation of funds or property of the Company or its affiliate by the Employee; |
• | unreasonable and persistent neglect or refusal by the Employee to perform his or her duties which is demonstrably willful and deliberate on the Employee’s part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company and which is not remedied in a reasonable period of time after receipt of written notice from the Company specifying such breach; |
• | conviction of the Employee of a securities law violation or a felony involving moral turpitude; or |
• | the Employee being found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any Federal or State securities law. |
• | the material diminution of the Employee’s duties, authorities or responsibilities from those in effect immediately prior to the Change in Control; |
• | a material reduction in the Employee’s base salary or target bonus opportunity as in effect on the date immediately prior to the Change in Control; |
• | the relocation of the Employee’s office from the location at which the Employee is principally employed immediately prior to the date of the Change in Control to a location 35 or more miles farther from the Employee’s residence immediately prior to the Change in Control, and recognizing that the Employee shall be expected to travel on the Company’s business to an extent substantially consistent with the Employee’s business travel obligations prior to the Change in Control; or |
• | the failure by the Company or its affiliate to pay any material compensation or benefits due to the Employee. |
• | The converted or substituted award must be a right to receive an amount of cash that is equal to the value of this Award as of the date of the Change in Control; |
• | The vesting terms of any converted or substituted award must be substantially identical to the terms of this Award; and |
• | The other terms and conditions of any converted or substituted award must be no less favorable to the Employee than the terms of this Award are as of the date of the Change in Control (including the provisions that would apply in the event of a subsequent Change in Control). |
ENTITY | STATE OR JURISDICTION OF INCORPORATION / FORMATION | |
GANNETT CO., INC. | DELAWARE | |
ACTION ADVERTISING, INC. | WISCONSIN | |
THE ADVERTISER COMPANY | ALABAMA | |
ALEXANDRIA NEWSPAPERS, INC. | LOUISIANA | |
BAXTER COUNTY NEWSPAPERS, INC. | ARKANSAS | |
BIZZY, INC. | DELAWARE | |
BOAT SPINCO, INC. | WISCONSIN | |
CITIZEN PUBLISHING COMPANY | ARIZONA | |
THE COURIER-JOURNAL, INC. | DELAWARE | |
DEALON, LLC | DELAWARE | |
DES MOINES PRESS CITIZEN LLC | DELAWARE | |
DES MOINES REGISTER AND TRIBUNE COMPANY | IOWA | |
THE DESERT SUN PUBLISHING COMPANY | CALIFORNIA | |
DESERT SUN PUBLISHING LLC | DELAWARE | |
DESK SPINCO, INC. | WISCONSIN | |
DETROIT FREE PRESS, INC. | MICHIGAN | |
DETROIT NEWSPAPER PARTNERSHIP, LP | DELAWARE | |
DIGICOL, INC. | DELAWARE | |
EVANSVILLE COURIER COMPANY, INC. | INDIANA | |
FEDERATED PUBLICATIONS, INC. | DELAWARE | |
GANNETT GP MEDIA, INC. | DELAWARE | |
GANNETT INTERNATIONAL COMMUNICATIONS, INC. | DELAWARE | |
GANNETT INTERNATIONAL FINANCE, LLC | DELAWARE | |
GANNETT MEDIA SERVICES, LLC | DELAWARE | |
GANNETT MHC MEDIA, INC. | DELAWARE | |
GANNETT MISSOURI PUBLISHING, INC. | KANSAS | |
GANNETT PUBLISHING SERVICES, LLC | DELAWARE | |
GANNETT RETAIL ADVERTISING GROUP, INC. | DELAWARE | |
GANNETT RIVER STATES PUBLISHING CORPORATION | ARKANSAS | |
GANNETT SATELLITE INFORMATION NETWORK, LLC | DELAWARE | |
GANNETT SUPPLY CORPORATION | DELAWARE | |
GANNETT UK MEDIA, LLC | DELAWARE | |
GANNETT VERMONT INSURANCE, INC. | VERMONT | |
GANNETT VERMONT PUBLISHING, INC. | VERMONT | |
GCCC, LLC | DELAWARE | |
GCOE, LLC | DELAWARE | |
GFHC, LLC | DELAWARE | |
GNSS LLC | DELAWARE | |
GUAM PUBLICATIONS, INCORPORATED | HAWAII |
INDIANA NEWSPAPERS, LLC | INDIANA | |
JOURNAL COMMUNITY PUBLISHING GROUP, INC. | WISCONSIN | |
JOURNAL MEDIA GROUP, INC. | WISCONSIN | |
JOURNAL SENTINEL, INC. | WISCONSIN | |
KICKSERV, INC. | DELAWARE | |
MEMPHIS PUBLISHING COMPANY | DELAWARE | |
MULTIMEDIA, INC. | SOUTH CAROLINA | |
PACIFIC MEDIA, INC. | DELAWARE | |
PHOENIX NEWSPAPERS, INC. | ARIZONA | |
PRESS-CITIZEN COMPANY INC. | IOWA | |
REACHLOCAL, INC. | DELAWARE | |
REACHLOCAL CANADA, INC. | DELAWARE | |
REACHLOCAL DP, INC. | DELAWARE | |
REACHLOCAL INTERNATIONAL, INC. | DELAWARE | |
REACHLOCAL INTERNATIONAL GP LLC | DELAWARE | |
RENO NEWSPAPERS, INC. | NEVADA | |
SALINAS NEWSPAPERS LLC | CALIFORNIA | |
SCRIPPS NP OPERATING, LLC | WISCONSIN | |
SEDONA PUBLISHING COMPANY, INC. | ARIZONA | |
THE SUN COMPANY OF SAN BERNARDINO, CALIFORNIA, LLC | CALIFORNIA | |
TEXAS-NEW MEXICO NEWSPAPERS, LLC | DELAWARE | |
THE TIMES HERALD COMPANY | MICHIGAN | |
TNI PARTNERS | ARIZONA | |
US PRESSWIRE, LLC | FLORIDA | |
USA TODAY SPORTS MEDIA GROUP, LLC | DELAWARE | |
VISALIA NEWSPAPERS LLC | DELAWARE | |
X.COM, INC. | DELAWARE | |
YORK DAILY RECORD-YORK SUNDAY NEWS LLC | DELAWARE | |
YORK DISPATCH LLC | DELAWARE | |
YORK NEWSPAPER COMPANY | PENNSYLVANIA | |
YORK NEWSPAPERS HOLDINGS, L.P. | DELAWARE | |
YORK NEWSPAPERS HOLDINGS, LLC | DELAWARE | |
YORK PARTNERSHIP HOLDINGS, LLC | DELAWARE | |
GANNETT U.K. LIMITED | ENGLAND & WALES | |
NEWSQUEST LIMITED | ENGLAND & WALES | |
NEWSQUEST CAPITAL LIMITED | ENGLAND & WALES | |
NEWSQUEST MEDIA GROUP LTD | ENGLAND & WALES | |
ADVERTISER SERIES LIMITED | ENGLAND & WALES | |
ADVERTISING DISTRIBUTION SERVICES LIMITED | ENGLAND & WALES | |
ASHERCLOSE LIMITED | ENGLAND & WALES | |
THE AVON ADVERTISER LIMITED | ENGLAND & WALES | |
BAILEY NEWSPAPER GROUP LIMITED | ENGLAND & WALES | |
BAILEY PRINT LIMITED | ENGLAND & WALES | |
BAILEY WEB LIMITED | ENGLAND & WALES | |
BARRY PRINTING & PUBLISHING CO. LIMITED | ENGLAND & WALES |
BECK & PARTRIDGE LIMITED | ENGLAND & WALES | |
THE BEDFORDSHIRE TIMES PUBLISHING COMPANY LIMITED | ENGLAND & WALES | |
BIRD BROTHERS LIMITED | ENGLAND & WALES | |
THE BRADFORD AND DISTRICT NEWSPAPER COMPANY LIMITED | ENGLAND & WALES | |
BRIGHTON & DISTRICT PROPERTY NEWS LIMITED | ENGLAND & WALES | |
BURY TIMES LIMITED | ENGLAND & WALES | |
C.H. PEACOCK LIMITED | ENGLAND & WALES | |
CAMPAIGN FREE NEWSPAPERS LIMITED | ENGLAND & WALES | |
CLEADON PRESS LIMITED | ENGLAND & WALES | |
THE CRAVEN HERALD LIMITED | ENGLAND & WALES | |
CSONCO LIMITED | ENGLAND & WALES | |
DAILY NEWS GROUP LIMITED | ENGLAND & WALES | |
DEVOBROOK LIMITED | ENGLAND & WALES | |
EXCHANGE ENTERPRISES LIMITED | ENGLAND & WALES | |
EXTONBASE LIMITED | ENGLAND & WALES | |
FOREST MACHINE JOURNAL LIMITED | ENGLAND & WALES | |
FOSSILCOVE LIMITED | ENGLAND & WALES | |
GLOUCESTERSHIRE INDEPENDENT LIMITED | ENGLAND & WALES | |
H DAWSON & CO (PRINTERS) LIMITED | ENGLAND & WALES | |
HAMPSHIRE NEWSPAPERS LIMITED | ENGLAND & WALES | |
HELSTON PRINTERS LIMITED | ENGLAND & WALES | |
HENRY PEASE & COMPANY LIMITED | ENGLAND & WALES | |
INDEPENDENT MEDIA LIMITED | ENGLAND & WALES | |
J H LAKE & CO LIMITED | ENGLAND & WALES | |
JAXMAN LIMITED | ENGLAND & WALES | |
JOHN H BURROWS & SONS LIMITED | ENGLAND & WALES | |
KINSMAN REEDS LIMITED | ENGLAND & WALES | |
LETTERCATCH LIMITED | ENGLAND & WALES | |
MSOMN LIMITED | ENGLAND & WALES | |
THE NATIONAL PRESS AGENCY LIMITED | ENGLAND & WALES | |
NEW FOREST POST LIMITED | ENGLAND & WALES | |
NEWSQUEST (ESSEX) LIMITED | ENGLAND & WALES | |
NEWSQUEST (HERTS & BUCKS) LIMITED. | ENGLAND & WALES | |
NEWSQUEST (INVESTMENTS) LIMITED | ENGLAND & WALES | |
NEWSQUEST (LEEDS) LIMITED | ENGLAND & WALES | |
NEWSQUEST (LONDON & ESSEX) LIMITED | ENGLAND & WALES | |
NEWSQUEST (MIDLANDS SOUTH) LIMITED | ENGLAND & WALES | |
NEWSQUEST (NORTH EAST) LIMITED | ENGLAND & WALES | |
NEWSQUEST (NORTH WEST) LIMITED | ENGLAND & WALES | |
NEWSQUEST (OXFORDSHIRE & WILTSHIRE) LIMITED | ENGLAND & WALES | |
NEWSQUEST (SUSSEX) LIMITED | ENGLAND & WALES | |
NEWSQUEST (YORK) LIMITED | ENGLAND & WALES | |
NEWSQUEST (YORKSHIRE & NORTH EAST) LIMITED | ENGLAND & WALES | |
NEWSQUEST FINANCIAL MEDIA LIMITED | ENGLAND & WALES |
NEWSQUEST MEDIA (MIDLAND) LTD. | ENGLAND & WALES | |
NEWSQUEST MEDIA (SOUTHERN) LIMITED | ENGLAND & WALES | |
NEWSQUEST PENSION TRUSTEE LIMITED | ENGLAND & WALES | |
NEWSQUEST PRINTING (COLCHESTER) LIMITED | ENGLAND & WALES | |
NEWSQUEST PRINTING (LANCASHIRE) LIMITED | ENGLAND & WALES | |
NEWSQUEST SPECIALIST MEDIA LIMITED | ENGLAND & WALES | |
NORTH OF ENGLAND NEWSPAPER COMPANY LIMITED | ENGLAND & WALES | |
NURSING SPECTRUM UK LIMITED | ENGLAND & WALES | |
THE OXFORD MAIL AND TIMES LIMITED | ENGLAND & WALES | |
PACKET NEWSPAPERS (CORNWALL) LIMITED | ENGLAND & WALES | |
PARTRIDGE PRINTERS LIMITED | ENGLAND & WALES | |
PROPERTY WEEKLY LIMITED | ENGLAND & WALES | |
PYTHONDECK LIMITED | ENGLAND & WALES | |
RAWLINGS AND WALSH LIMITED | ENGLAND & WALES | |
RUSHOLMES PRINTERS LIMITED | ENGLAND & WALES | |
SALISBURY JOURNAL NEWSPAPERS LIMITED | ENGLAND & WALES | |
SAWP LIMITED | ENGLAND & WALES | |
SELLIX LIMITED | ENGLAND & WALES | |
SLOUGH NEWSPAPER PRINTERS LIMITED | ENGLAND & WALES | |
SOPRESS INVESTMENTS LIMITED | ENGLAND & WALES | |
SOUTH WALES ARGUS LIMITED | ENGLAND & WALES | |
SOUTH WEST COUNTIES NEWSPAPERS LIMITED | ENGLAND & WALES | |
SOUTH WEST WALES NEWSPAPERS LIMITED | ENGLAND & WALES | |
SOUTHERN NEWSPAPERS LIMITED | ENGLAND & WALES | |
SPICEFORD LIMITED | ENGLAND & WALES | |
STELERT LIMITED | ENGLAND & WALES | |
STONE SQUARE NEWSAGENCY LIMITED | ENGLAND & WALES | |
STOUR VALLEY NEWS LIMITED | ENGLAND & WALES | |
SURFIELD LIMITED | ENGLAND & WALES | |
SWALLOWDOVE LIMITED | ENGLAND & WALES | |
TEDDINGTON & HAMPTON TIMES LIMITED | ENGLAND & WALES | |
THIS IS ESSEX LIMITED | ENGLAND & WALES | |
TWO’S COMPANY (DATING) LIMITED | ENGLAND & WALES | |
WARDEN AND COMPANY LIMITED | ENGLAND & WALES | |
WEST COUNTRY MAGAZINES LIMITED | ENGLAND & WALES | |
WEST OF ENGLAND NEWSPAPERS LIMITED | ENGLAND & WALES | |
WESTMINSTER PRESS LIMITED | ENGLAND & WALES | |
WESTMORLAND GAZETTE LIMITED | ENGLAND & WALES | |
WILTSHIRE NEWSPAPERS LIMITED | ENGLAND & WALES | |
WM DRESSER AND SONS LIMITED | ENGLAND & WALES | |
WP PUBLISHING | ENGLAND & WALES | |
WROUGHTON PRESS LIMITED | ENGLAND & WALES | |
WXAN LIMITED | ENGLAND & WALES | |
YEOMAN DEVELOPMENTS (WINTON) LIMITED | ENGLAND & WALES | |
THE YORKSHIRE HERALD NEWSPAPER COMPANY LIMITED | ENGLAND & WALES | |
NEWSQUEST (BERKSHIRE) LIMITED | SCOTLAND |
NEWSQUEST (CLYDE & FORTH PRESS) LIMITED | SCOTLAND | |
FIRTH FM HOLDINGS LIMITED | SCOTLAND | |
NEWSQUEST (HERALD & TIMES) LIMITED | SCOTLAND | |
NEWSQUEST (SUNDAY HERALD) LIMITED | SCOTLAND | |
NEWSQUEST MAGAZINES LIMITED | SCOTLAND | |
NEWSQUEST PRINTING (GLASGOW) LIMITED | SCOTLAND | |
ROMANES MEDIA LIMITED | SCOTLAND | |
ROMANES MEDIA GROUP LIMITED | SCOTLAND | |
ROMANES MEDIA GROUP EBT LIMITED | SCOTLAND | |
S1NOW LIMITED | SCOTLAND | |
YOUR RADIO FM LIMITED | SCOTLAND | |
WILLIAM TRIMBLE LIMITED | NORTHERN IRELAND |
(1) | Registration Statement (Form S-8 No. 333-205320), |
(2) | Registration Statement (Form S-8 No. 333-205321), |
(3) | Registration Statement (Form S-8 No. 333-205322), and |
(4) | Registration Statement (Form S-3ASR No. 333-205323); |
/s/ Ernst & Young |
1. | I have reviewed this annual report on Form 10-K of Gannett Co., 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 we 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. |
/s/ Robert J. Dickey | |
Robert J. Dickey President and Chief Executive Officer (principal executive officer) |
1. | I have reviewed this annual report on Form 10-K of Gannett Co., 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 we 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. |
/s/ Alison K. Engel | |
Alison K. Engel Chief Financial Officer (principal financial officer) |
/s/ Robert J. Dickey | |
Robert J. Dickey President and Chief Executive Officer (principal executive officer) |
/s/ Alison K. Engel | |
Alison K. Engel Chief Financial Officer (principal financial officer) |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Feb. 13, 2017 |
Jun. 26, 2016 |
|
Document Documentand Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 25, 2016 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | GCI | ||
Entity Registrant Name | Gannett Co., Inc. | ||
Entity Central Index Key | 0001635718 | ||
Current Fiscal Year End Date | --12-25 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 113,584,069 | ||
Entity Public Float | $ 1,650,180,963 |
CONSOLIDATED AND COMBINED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 25, 2016 |
Dec. 27, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Trade receivables, allowance for doubtful receivables | $ 10,317 | $ 8,836 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, Authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, Issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, Authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, Issued (in shares) | 116,624,726 | 115,668,957 |
Treasury stock (in shares) | 3,750,000 | 0 |
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Operating revenues: | |||
Advertising | $ 1,703,795 | $ 1,611,445 | $ 1,840,067 |
Circulation | 1,133,676 | 1,060,118 | 1,109,729 |
Other | 210,003 | 213,449 | 222,082 |
Total operating revenues | 3,047,474 | 2,885,012 | 3,171,878 |
Operating expenses: | |||
Cost of sales and operating expenses | 1,969,853 | 1,866,729 | 1,997,803 |
Selling, general and administrative expenses | 807,398 | 707,022 | 765,465 |
Depreciation | 118,092 | 95,916 | 97,178 |
Amortization | 14,872 | 11,636 | 13,885 |
Facility consolidation and asset impairment charges | 58,171 | 34,278 | 35,216 |
Total operating expenses | 2,968,386 | 2,715,581 | 2,909,547 |
Operating income | 79,088 | 169,431 | 262,331 |
Non-operating income (expense): | |||
Equity income in unconsolidated investees, net | 1,519 | 11,981 | 15,857 |
Interest expense | (12,791) | (4,562) | (576) |
Other non-operating items, net | (1,388) | 17,125 | 653 |
Total non-operating income (expense) | (12,660) | 24,544 | 15,934 |
Income before income taxes | 66,428 | 193,975 | 278,265 |
Provision for income taxes | 13,718 | 47,884 | 67,560 |
Net income | $ 52,710 | $ 146,091 | $ 210,705 |
Net income per share-basic (in dollars per share) | $ 0.45 | $ 1.27 | $ 1.83 |
Net income per share-diluted (in dollars per share) | $ 0.44 | $ 1.25 | $ 1.83 |
CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY (Parenthetical) - $ / shares |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 25, 2016 |
Sep. 25, 2016 |
Jun. 26, 2016 |
Mar. 27, 2016 |
Dec. 27, 2015 |
Sep. 27, 2015 |
Jun. 28, 2015 |
Mar. 29, 2015 |
Dec. 25, 2016 |
Dec. 27, 2015 |
|
Statement of Stockholders' Equity [Abstract] | ||||||||||
Dividends declared, per share (in dollars per share) | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0 | $ 0 | $ 0.64 | $ 0.32 |
Basis of presentation |
12 Months Ended |
---|---|
Dec. 25, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | NOTE 1 — Basis of presentation Description of business: Gannett Co., Inc. (Gannett, we, us, our, or the company) is a next-generation media company that empowers communities to connect, act, and thrive. Gannett owns ReachLocal, Inc. (ReachLocal, a digital marketing solutions company), the USA TODAY NETWORK (made up of USA TODAY and 109 local media organizations in 34 states in the U.S. and Guam), and Newsquest (a wholly owned subsidiary with more than 160 local media brands in the U.K.). Gannett delivers high-quality, trusted content where and when consumers want to engage with it on virtually any device or platform. Separation from former parent: On June 29, 2015, the separation of Gannett from our former parent, TEGNA Inc., was completed pursuant to a Separation and Distribution Agreement (the Separation Agreement) dated June 26, 2015. On June 29, 2015, our former parent completed the pro rata distribution of 98.5% of the outstanding shares of Gannett common stock to its stockholders (also referred to herein as the spin-off or "separation"), and Gannett common stock began trading "regular way" on the New York Stock Exchange. Each holder of our former parent's common stock received one share of Gannett common stock for every two shares of our former parent's common stock held on June 22, 2015, the record date for the distribution. Immediately following the distribution, our former parent owned 1.5% of Gannett's outstanding common stock, and our former parent will continue to own our shares for a period of time not to exceed five years after the distribution. Our former parent structured the distribution to be tax free to its U.S. shareholders for U.S. federal income tax purposes. Basis of presentation: Prior to the spin-off, we did not prepare separate financial statements. The accompanying audited consolidated and combined financial statements for periods prior to the spin-off were derived from the consolidated and combined financial statements and accounting records of our former parent and present our combined financial position, results of operations, and cash flows as of and for the periods presented as if we were a separate entity. Through the date of the spin-off, in preparing these consolidated and combined financial statements, management has made certain assumptions or implemented methodologies to allocate various expenses from our former parent to us and from us back to our former parent in the form of cost recoveries. These allocations represent services provided between the two entities and are more fully detailed in Note 15 — Relationship with our former parent. We believe the assumptions and methodologies used in these allocations are reasonable; however, such allocated costs, net of cost recoveries, may not be indicative of the actual level of expense that would have been incurred had we been operating on a stand-alone basis, and, accordingly, may not necessarily reflect our consolidated and combined financial position, results of operations, and cash flows had we operated as a stand-alone entity during the periods presented. In fiscal year 2016, we identified an error relating to certain participant data that had resulted in an overstatement of the postretirement benefits liabilities transferred from our former parent at separation. Based on our assessments of qualitative and quantitative factors, the error and the related impacts were not considered material to the consolidated financial statements for the year ended December 25, 2016 or the prior periods. The error was corrected in 2016 by decreasing postretirement medical and life insurance liabilities by $2.8 million and pension liabilities by $23.6 million, increasing former parent investment, net, which is now reflected in additional paid-in capital, by $16.3 million, increasing accumulated other comprehensive loss, net by $0.4 million, decreasing deferred tax assets by $10.0 million, and decreasing expenses by $0.5 million. |
Summary of significant accounting policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of significant accounting policies | NOTE 2 — Summary of significant accounting policies Fiscal year: Our fiscal year ends on the last Sunday of the calendar year. Our fiscal year 2016 ended on December 25, 2016, fiscal year 2015 ended on December 27, 2015, and fiscal year 2014 ended on December 28, 2014, each 52-week years. Consolidation: The consolidated and combined financial statements include our accounts and those over which we have control after elimination of all intercompany transactions and profits. Use of estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated and combined financial statements and footnotes thereto. Actual results could differ from those estimates. Significant estimates include amounts for income taxes, pension and other post-employment benefits, and valuation of long-lived and intangible assets. Segment presentation: We classify our operations into two reportable segments: publishing and ReachLocal. In addition to these reportable segments, we have a corporate and other category that includes activities not directly attributable or allocable to a specific segment. The publishing reportable segment is an aggregation of two operating segments: Domestic Publishing and the U.K. Group. For further details, see Note 14 — Segment reporting. Business combinations: We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain identifiable assets include, but are not limited to, expected long-term revenues, future expected operating expenses, cost of capital, and appropriate discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Revenue recognition: Our circulation revenues include revenues for newspapers (both print and digital) purchased by readers or distributors. Circulation revenues are recognized when purchased newspapers are distributed, net of provisions for related returns. Subscriptions are recognized over the subscription period. Our advertising revenues include amounts charged to advertisers for space purchased in our newspapers, digital ads placed on our digital platforms, advertising and marketing services, other advertising products such as preprints and direct mail, and the provision and sale of online marketing services and products through our ReachLocal subsidiary. Advertising revenues are recognized, net of agency commissions, in the period when advertising is printed or placed on digital platforms. Marketing services revenues are generally recognized when advertisements or services are delivered. For our online marketing products provided by our ReachLocal subsidiary, we typically enter into multi-month agreements for the delivery of our products. Under our agreements, our clients typically pay, in advance, a fixed fee on a monthly basis, which includes all charges for the included technology and any media services, management, third-party content and other costs and fees. We record these prepayments as deferred revenue and then revenue is recognized as we purchase media and perform other services. Our other revenues primarily include commercial printing and distribution. Commercial printing and distribution revenues are recognized when the product is delivered to the customer. We have various advertising and circulation agreements which have both print and digital deliverables. Revenue from sales agreements that contain multiple deliverable elements is allocated to each element based on the relative best estimate of selling price. Elements are treated as separate units of accounting if there is standalone value upon delivery. Amounts received from customers in advance of revenue recognition are deferred as liabilities. Cash and cash equivalents: Cash equivalents consist of investments with original maturities of three months or less. Accounts receivable and allowance for doubtful accounts: Accounts receivable are recorded at invoiced amounts and generally do not bear interest. The allowance for doubtful accounts reflects our estimate of credit exposure, determined principally on the basis of our collection experience, aging of our receivables, and significant individual account credit risk. Credit is extended based upon an evaluation of the customer's financial position, and generally collateral is not required. Inventories: Inventories, consisting principally of newsprint, printing ink, and plate material for our publishing operations, are valued at the lower of cost (first-in, first-out) or market. Assets held for sale: We classify assets to be sold as held for sale in the period in which all of the following criteria are met: management commits to a plan to sell the disposal group, the disposal group is available for immediate sale in its present condition, an active program to locate a buyer has been initiated, and the sale is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond our control extend the period of time required to sell. The assets held for sale are measured at the lower of carrying value or fair value less any costs to sell. Property and depreciation: Property, plant, and equipment is recorded at cost, and depreciation is provided generally on a straight-line basis over the estimated useful lives of the assets. The principal estimated useful lives are 10 to 40 years for buildings and improvements and 3 to 30 years for machinery, equipment, and fixtures. Changes in the estimated useful life of an asset, which, for example, could happen as a result of facility consolidations, can affect depreciation expense and net income. Major renewals and improvements and interest incurred during the construction period of major additions are capitalized. Expenditures for maintenance, repairs, and minor renewals are charged to expense as incurred. A breakout of property, plant and equipment by type is presented below:
Software development costs: Our subsidiary ReachLocal incurs certain costs to develop software for internal use. These costs are capitalized when it is determined the development efforts will result in new or additional functionality or new products. Costs incurred prior to meeting these criteria and costs associated with ongoing maintenance are expensed as incurred and included in costs of sales and operating expenses, in addition to amortization of capitalized software development costs, in the accompanying Consolidated and Combined Statements of Income. We monitor our existing capitalized software costs and reduce their carrying value as a result of releases rendering previous features or functions obsolete. Software development costs are evaluated for impairment in accordance with our policy for finite-lived intangible assets and other long lived assets. Costs capitalized as internal use software are amortized on a straight-line basis over an estimated useful life of three years. Leases: Operating lease rentals are expensed on a straight-line basis over the life of the lease. At lease inception, we determine the lease term by excluding renewal options that are not reasonably assured. The lease term is used to determine whether a lease is capital or operating and is used to calculate straight-line rent expense. Additionally, the depreciable life of leased assets and leasehold improvements is limited by the expected lease term. Valuation of long-lived assets: We evaluate the carrying value of long-lived assets (mostly property, plant, and equipment and definite-lived intangible assets) to be held and used whenever events or changes in circumstances indicate the carrying amount may not be recoverable. The carrying value of a long-lived asset group is considered impaired when the projected undiscounted future cash flows are less than their carrying value. We measure impairment based on the amount by which the carrying value exceeds the fair value. Fair value is determined primarily using the projected future cash flows, discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose. Goodwill and other intangible assets: Goodwill represents the excess of acquisition cost over the fair value of assets acquired, including identifiable intangible assets, net of liabilities assumed. Goodwill is tested for impairment on an annual basis (first day of fourth quarter) or between annual tests if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Before performing the annual two-step goodwill impairment test, we are first permitted to perform a qualitative assessment to determine if the two-step quantitative test must be completed. The qualitative assessment considers events and circumstances such as macroeconomic conditions, industry and market conditions, cost factors and overall financial performance, as well as company and specific reporting unit specifications. If after performing this assessment, we conclude it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we are required to perform a two-step quantitative test. Otherwise, the two-step test is not required. In the first step of the quantitative test, we are required to determine the fair value of each reporting unit and compare it to the carrying amount of the reporting unit. Fair value of the reporting unit is determined using various techniques, including multiple of earnings and discounted cash flow valuation techniques. If the carrying amount of the reporting unit exceeds the fair value of the reporting unit, we perform the second step of the impairment test. In the second step of the impairment test, we determine the implied fair value of the reporting unit's goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then an impairment of goodwill has occurred and we must recognize an impairment loss for the difference between the carrying amount and the implied fair value of goodwill. In determining the reporting units, we consider the way we manage our businesses and the nature of those businesses. These reporting units therefore consist of Domestic Publishing, the U.K. Group, and ReachLocal. We perform an impairment test annually, or more often if circumstances dictate, of our indefinite-lived intangible assets. Intangible assets that have finite useful lives are amortized over those useful lives and are evaluated for impairment as described above. We recognized impairment charges each year from 2014 through 2016. See Note 4 — Restructuring activities and asset impairment charges and Note 5 — Goodwill and other intangible assets and other intangibles for additional information. Investments and other assets: Investments in entities for which we do not have control, but we have the ability to exercise significant influence over operating and financial policies, are accounted for under the equity method. Our share of net earnings and losses from these ventures is included in "Equity income in unconsolidated investees, net" in the Consolidated and Combined Statements of Income. See Note 6 — Investments for additional information. Accounts payable and accrued expenses: A breakout of accounts payable and accrued expenses by type is presented below:
Retirement plans: Pension and other postretirement benefit costs under our defined benefit retirement plans are actuarially determined. We recognize the cost of postretirement benefits including pension, medical and life insurance benefits on an accrual basis over the average life expectancy of employees expected to receive such benefits for plans that have had their benefits frozen. For active plans, costs are recognized over the estimated average future service period. Equity-based employee compensation: We grant restricted stock units as well as performance shares to our employees as a form of compensation. The expense for such awards is based on the grant date fair value of the award and is recognized on a straight-line basis over the requisite service period, which is generally the four-year incentive period for restricted stock units and the three-year incentive period for performance shares. Expense for performance share awards for participants meeting certain retirement eligible criteria as defined in the plan is recognized using the accelerated attribution method. See Note 11 — Supplemental equity information for further discussion. Income taxes: Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. See Note 10 — Income taxes for further discussion. We also evaluate any uncertain tax positions and recognize a liability for the tax benefit associated with an uncertain tax position if it is more likely than not that the tax position will not be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. We record a liability for uncertain tax positions taken or expected to be taken in a tax return. Any change in judgment related to the expected ultimate resolution of uncertain tax positions is recognized in earnings in the period in which such change occurs. Loss contingencies: We are subject to various legal proceedings, claims and regulatory matters, the outcomes of which are subject to significant uncertainty. We determine whether to disclose or accrue for loss contingencies based on an assessment of whether the risk of loss is remote, reasonably possible or probable, and whether it can be reasonably estimated. We accrue for loss contingencies when such amounts are probable and reasonably estimable. If a contingent liability is only reasonably possible, we will disclose the potential range of the loss, if material and estimable. Foreign currency translation: The statements of income of foreign operations have been translated to U.S. dollars using the average currency exchange rates in effect during the relevant period. The balance sheets have been translated using the currency exchange rate as of the end of the accounting period. The impact of currency exchange rate changes on the translation of the balance sheets are included in other comprehensive income (loss) in the Consolidated and Combined Statements of Comprehensive Income and are classified as accumulated other comprehensive income (loss) in the Consolidated and Combined Balance Sheets and Statements of Equity. Concentration of risk: Due to the distributed nature of our operations, we are not subject to significant concentrations of risk relating to customers, products, or geographic locations. Our foreign revenues, principally from businesses in the U.K. and ReachLocal operations, totaled approximately $369.2 million in 2016, $417.4 million in 2015, and $461.3 million in 2014. Our long-lived assets in foreign countries, principally ReachLocal operations and in the U.K., totaled approximately $354.4 million at December 25, 2016, $330.3 million at December 27, 2015, and $337.0 million at December 28, 2014. Supplementary cash flow information: Supplementary cash flow information, including non-cash investing and financing activities, are as follows:
Supplementary non-cash information for the year ended December 28, 2014 is immaterial. New accounting pronouncements adopted: The following are new accounting pronouncements which we have adopted in fiscal year 2016: Fair Value Measurement - Disclosures for Investments in Certain Entities That Calculate Net Asset Value (NAV) per Share: In fiscal year 2015, we implemented the Financial Accounting Standards Board (FASB) guidance that removes the requirement to include investments in the fair value hierarchy for which the fair value is measured at NAV using the practical expedient under Fair Value Measurement guidance. This guidance impacted our disclosures only. Income Taxes- Balance Sheet Classification of Deferred Taxes: In fiscal year 2015, we early adopted the FASB guidance which requires companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. Business Combinations - Measurement-Period Adjustments: In fiscal year 2016, we applied the FASB guidance that simplifies the accounting for measurement-period adjustments. This guidance eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively and requires that acquirers recognize measurement-period adjustments in the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The impact was not material to our consolidated financial results. Presentation of Financial Statements - Going Concern: We have adopted the FASB guidance related to interim and annual assessments by management to evaluate the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued, or available to be issued, when applicable. Disclosures are required if management concludes that substantial doubt exists or that its plans alleviate substantial doubt that was raised. Our assessments did not indicate substantial doubt regarding our ability to continue as a going concern. Measurement Date for Retirement Plans: We have implemented the FASB guidance that gives an employer whose fiscal year-end does not coincide with a calendar month-end the ability, as a practical expedient, to measure defined benefit retirement obligations and related plan assets as of the month-end that is closest to its fiscal year-end. As a result, our retirement plans are measured at December 31, 2016, rather than our fiscal year end, December 25, 2016. Stock-based Compensation: In fiscal year 2016, we early adopted new guidance surrounding stock-based compensation which simplified certain aspects of the accounting for share-based payment transactions, including income taxes, classification of awards, and classification of share-based payment activity in the statement of cash flows. The adoption of this new guidance decreased income tax expense by $8.9 million for the year ended December 25, 2016. Refer to Note 10 — Income taxes, Note 11 — Supplemental equity information, and Note 16 — Quarterly statements of income (unaudited) for further discussion. Cash and Cash Equivalents, including Statement of Cash Flows and Restricted Cash: We early adopted new guidance in fiscal year 2016 related to the classification of certain cash flow activity such as debt prepayment, debt extinguishment costs, contingent consideration payments made after a business combination, and distributions received from equity method investees. The adoption of this guidance did not have a material impact on the designations of operating, investing, and financing activities within our statements of cash flows. New accounting pronouncements not yet adopted: The following are new accounting pronouncements which are being evaluated by the company for future impacts on our financial position: Revenue from Contracts with Customers: In August 2014, the FASB issued a new revenue standard, "Revenue from Contracts with Customer," which prescribes a single comprehensive model for entities to use in the accounting of revenue arising from contracts with customers. The new guidance will supersede virtually all existing revenue guidance under U.S. GAAP and is effective for fiscal years beginning after December 31, 2017. The core principle contemplated by this new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount reflecting the consideration the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers are also required. In April and May 2016, the FASB also issued clarifying updates to the new standard specifically to address certain core principles including the identification of performance obligations, licensing guidance, the assessment of the collectability criterion, the presentation of taxes collected from customers, noncash considerations, contract modifications, and completed contracts at transition. We currently anticipate adopting the new revenue recognition standard using the modified retrospective approach in the fiscal year beginning January 1, 2018. This approach consists of recognizing the cumulative effect of initially applying the standard as an adjustment to opening retained earnings. As part of the modified retrospective approach, we will also amend our disclosures to reflect results under "legacy GAAP" for the initial year of adoption. We are currently evaluating the impact that the updated guidance will have on our financial statements and related disclosures. As part of the implementation process, we are holding regular meetings with key stakeholders from across the organization to discuss the impact of the standard on our existing contracts. We are utilizing a bottoms-up approach to analyze the impact of the standard on our portfolio of contracts by reviewing our current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to our existing revenue contracts. We expect to complete this evaluation prior to the fourth quarter of 2017. Inventory: In July 2015, the FASB issued new guidance which requires entities using the first-in, first-out inventory costing method to subsequently value inventory at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact of this guidance and assessing the impact on our consolidated financial statements. Leases: In February 2016, the FASB issued updated guidance modifying lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. This guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the provisions of the updated guidance and assessing the impact on our consolidated financial statements. Cash and Cash Equivalents, including Statement of Cash Flows and Restricted Cash: In November 2016, the FASB issued updated guidance requiring entities to explain, in their statements of cash flows, the change during the period in the total of cash, cash equivalents, and amounts generally described as "restricted cash" or "restricted cash equivalents". As a result, restricted cash and restricted cash equivalents must now be included within the total of cash and cash equivalents when reconciling the beginning and end of period totals show on the statement of cash flows. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the provisions of this update and assessing the impact on our consolidated financial statements. |
Acquisitions |
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Acquisitions | NOTE 3 — Acquisitions 2016 Acquisitions ReachLocal: In August 2016, we completed the acquisition of 100% of the outstanding common stock of ReachLocal, Inc. (ReachLocal) for approximately $162.5 million in cash, net of cash acquired. We financed the transaction by borrowing $175.0 million under our credit facility as well as with available cash, and we incurred acquisition-related expenses of $12.8 million for the year ended December 25, 2016. Such costs were reflected in selling, general, and administrative expenses in the Consolidated and Combined Statements of Income. ReachLocal offers online marketing, digital advertising, software-as-a-service, and web presence products and solutions to small and medium sized businesses. It delivers its suite of products and solutions to local businesses through a combination of its proprietary technology platform, its sales force, and select third-party agencies and resellers. The purchase price, based on management's preliminary estimates, was allocated to the tangible assets and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The allocation of the purchase price is preliminary pending the finalization of the fair value of the acquired net assets and liabilities assumed as well as the acquired deferred income tax assets and liabilities and assumed income and non-income based tax liabilities. As of the acquisition date, the purchase price assigned to the acquired assets and assumed liabilities is summarized as follows:
Acquired property, plant, and equipment are being depreciated on a straight-line basis over the assets' respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and non-contractual relationships as well as expected future synergies. Goodwill associated with the acquisition of ReachLocal is allocated entirely to the ReachLocal segment. We expect that the purchase price allocated to goodwill and intangible assets will not be deductible for tax purposes. Since the acquisition date, revenues for ReachLocal were $110.1 million and net loss before taxes, excluding acquisition costs, was $19.9 million. Assets of North Jersey Media Group: In July 2016, we completed the acquisition of certain assets of North Jersey Media Group, Inc. (NJMG) for approximately $39.3 million. NJMG is a media company with print and digital publishing operations serving primarily the northern New Jersey market. Its brands include such established names as The Record (Bergen County) and The Herald. We financed the transaction with available cash on hand. The purchase price, based on management's preliminary estimates, was allocated to the tangible assets and identified intangible assets acquired and liabilities assumed based on their estimated fair values. As of the acquisition date, the purchase price assigned to the acquired assets and assumed liabilities were as follows: property, plant, and equipment of $26.0 million, goodwill of $8.3 million, intangible assets of $7.2 million, noncurrent assets of $1.0 million noncurrent liabilities of $0.3 million, and net negative working capital of $2.9 million. Goodwill related to the acquisition of NJMG is allocated to the publishing segment. Journal Media Group: In April 2016, we completed the acquisition of 100% of the outstanding common stock of Journal Media Group, Inc. (JMG) for approximately $260.6 million in cash, net of cash acquired. Further, approximately $2.3 million of the purchase price paid was treated as post-acquisition expense for accounting purposes. We financed the transaction by borrowing $250.0 million under our credit facility as well as with available cash, and we incurred acquisition-related costs of $10.8 million for the year ended December 25, 2016. Such costs were reflected in selling, general, and administrative expenses in the Consolidated and Combined Statements of Income. JMG is a media company with print and digital publishing operations serving 15 U.S. markets in nine states, including the Milwaukee Journal Sentinel, the Knoxville News Sentinel, and The Commercial Appeal in Memphis. The acquisition expanded our print and digital publishing operations domestically. The purchase price, based on management's preliminary estimates, was allocated to the tangible assets and identified intangible assets acquired based on their estimated fair values. The allocation of the purchase price is preliminary pending the finalization of the acquired deferred income tax assets and liabilities and assumed income and non-income based tax liabilities. As of the acquisition date, the purchase price assigned to the acquired assets and assumed liabilities is summarized as follows:
Acquired property, plant, and equipment are being depreciated on a straight-line basis over the assets' respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and non-contractual relationships as well as expected future synergies. Goodwill related to the acquisition of JMG is allocated to the publishing segment. We expect that the purchase price allocated to goodwill and intangibles will not be deductible for tax purposes. Since the acquisition date, revenues for JMG were $299.8 million and net loss before taxes, excluding acquisition costs, was $5.4 million. Pro forma information: The following table sets forth unaudited pro forma results of operations assuming the ReachLocal, NJMG and JMG acquisitions, along with transactions necessary to finance the acquisitions, occurred at the beginning of 2015:
This pro forma financial information is based on historical results of operations, adjusted for the allocation of the purchase price and other acquisition accounting adjustments, and is not necessarily indicative of what our results would have been had we operated the businesses since the beginning of the periods presented. The pro forma adjustments reflect depreciation expense and amortization of intangibles related to the fair value adjustments of the assets acquired, additional interest expense related to the financing of the transactions, the elimination of acquisition-related costs, and the related tax effects of the adjustments. 2015 Acquisitions Texas-New Mexico Partnership: In June 2015, we completed the acquisition of the remaining 59.4% interest in the Texas-New Mexico Partnership (TNP) that we did not own from Digital First Media. We completed the acquisition through the assignment of our 19.5% interest in the California Newspapers Partnership (CNP), valued at $34.4 million, additional cash consideration, net of cash acquired, of $5.2 million, and $1.9 million in deferred consideration. As a result, we own 100% of TNP and no longer have any ownership interest or continuing involvement in CNP. Through the transaction, we acquired print and digital publishing operations serving 11 U.S. markets in Texas, New Mexico and Pennsylvania. The purchase price was allocated to the tangible assets and identified intangible assets acquired based on their estimated fair values. As of the acquisition date, the purchase price assigned to the acquired assets and assumed liabilities is summarized as follows:
On the acquisition date, the fair value of our 40.6% interest in TNP was $26.6 million, and the fair value of our 19.5% interest in CNP was $34.4 million. The pre-acquisition carrying value of TNP and CNP was $39.2 million. We recognized a $21.8 million pre-tax non-cash gain on the transaction in the second quarter of 2015. Acquired property, plant, and equipment are being depreciated on a straight-line basis over the assets' respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and non-contractual relationships as well as expected future synergies. We expect the purchase price allocated to goodwill and mastheads will be deductible for tax purposes. Goodwill related to the acquisition of TNP is allocated to the publishing segment. Romanes Media Group: In May 2015, our U.K. subsidiary, Newsquest Media Group Ltd. (Newsquest), paid $23.4 million, net of cash acquired, to purchase 100% of the shares of Romanes Media Group (RMG). RMG publishes local newspapers in Scotland, Berkshire, and Northern Ireland, and its portfolio comprises one daily newspaper, 28 weekly newspapers, and their associated websites. Goodwill related to the acquisition of RMG is allocated to the publishing segment. |
Restructuring activities and asset impairment charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring activities and asset impairment charges | NOTE 4 — Restructuring activities and asset impairment charges Severance-related expenses We have initiated various cost reducing actions that are severance-related. In 2015, we initiated Early Retirement Opportunity Programs (EROP) for our USA TODAY employees and for employees in certain corporate departments and publishing sites. We recorded severance-related expenses of $0.8 million in 2016 and $42.1 million in 2015 for these programs. We also had other employee termination actions associated with our facility consolidation and other cost efficiency efforts. We recorded severance-related expenses of $42.7 million in 2016, $30.2 million in 2015, and $19.8 million in 2014. In 2016, we recorded $35.9 million in costs of sales and operating expenses and $7.6 million in selling, general, and administrative expenses of severance-related expenses. In 2015, we recorded $59.3 million in costs of sales and operating expenses and $13.0 million in selling, general, and administrative expenses of severance-related expenses. In 2014, we recorded $15.6 million in costs of sales and operating expenses and $4.2 million in selling, general, and administrative expenses of severance-related expenses. A summary of our liabilities related to employee termination actions by year is as follows:
A summary of our severance-related expenses by segment is as follows:
Facility consolidation and asset impairment charges For each year presented, we recognized charges related to facility consolidation efforts and, in certain of these periods, we also recorded non-cash impairment charges to assets and certain investments in which we hold a noncontrolling interest which are accounted for under the equity and cost methods of accounting. All impairment charges captured in 2016 were related to the publishing segment. A summary of these charges by year is presented below:
All indefinite-lived intangibles were tested for impairment as of the first day of our fourth quarter. The definite-lived intangible assets were first evaluated based on a qualitative assessment considering changes in circumstances to determine whether the assets are recoverable. Then, we prepared quantitative assessments for the assets which indicated that certain carrying values were less than their respective fair values. Fair values were determined using a relief-from-royalty method or excess earning method. As a result, pre-tax non-cash impairment charges for indefinite lived intangibles totaled $14.5 million in 2016, $0.9 million in 2015, and $1.7 million in 2014. Pre-tax non-cash impairment charges for finite lived intangibles totaled $9.9 million in 2016 and $18.5 million in 2015. There were no pre-tax impairment charges for finite lived other intangibles in 2014. The impairments, all of which were recorded to the publishing segment, were principally a result of revenue projections which were lower than expected. Facility consolidation plans led us to recognize charges associated with revising the useful lives of certain assets over a shortened period as well as shutdown costs. Certain assets classified as held-for-sale resulted in charges also being recognized as the carrying values were reduced to equal the fair value less cost to dispose. These fair values were based on estimates of prices for similar assets. During 2016 and 2015, the carrying values of certain investments in which we own a noncontrolling interest were written down to fair value because the business underlying the investments had experienced sustained operating losses, leading us to conclude the investments were impaired. These charges are recorded in "Equity income in unconsolidated investees, net" and "Other non-operating items, net." |
Goodwill and other intangible assets |
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Goodwill and other intangible assets | NOTE 5 — Goodwill and other intangible assets Goodwill, indefinite-lived intangible assets, and amortizable intangible assets consist of the following:
Intangible amortization expense was $14.9 million in 2016 and $11.6 million in 2015. The increase is due to the intangibles acquired as a result of our 2016 acquisitions as well as a full year of amortization of the intangibles we acquired as a result of our 2015 acquisitions. Customer relationships, which include subscriber lists and advertiser relationships, are amortized on a straight-line basis over their useful lives. Developed technology consists of digital marketing solutions and other technology acquired as part of the ReachLocal transaction and is amortized on a straight-line basis over their useful lives. Other intangibles are primarily amortizable trade names and are amortized on a straight-line basis over their useful lives. The weighted average remaining amortization periods for customer relationships, acquired technology and other amortizable intangibles are approximately 8.4, 2.7 and 3.7 years, respectively. The projected annual amortization expense related to amortizable intangibles as of December 25, 2016 is as follows:
The balances and changes in the carrying amount of goodwill by segment are as follows:
In fiscal years 2016, 2015 and 2014, we performed a quantitative step one analysis of each of our reporting units as part of the annual goodwill impairment evaluation and determined that the fair values were in excess of the individual reporting units carrying values, and, accordingly, a step two analysis was not required and there were no goodwill impairments. |
Investments |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||
Investments | NOTE 6 — Investments We have a number of investments accounted for under the equity method. Principal among these are the following:
The aggregate carrying value of investments recorded under the equity method was $7.5 million at December 25, 2016 and $7.9 million at December 27, 2015. Certain differences exist between our investment carrying value and the underlying equity of the investee companies principally due to fair value measurement at the date of investment acquisition and due to impairment charges we recorded for certain of the investments. The company also has other investments recorded at cost. The aggregate carrying value of these investments, net of impairment, were $6.7 million at December 25, 2016. There were no other investments as of December 27, 2015. |
Revolving credit facility |
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Dec. 25, 2016 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility | NOTE 7 — Revolving credit facility We maintain a five-year secured revolving credit facility pursuant to which we may borrow from time to time up to an aggregate principal amount of $500 million (Credit Facility). Under the Credit Facility, we may borrow at an applicable margin above the Eurodollar base rate (LIBOR loan) or the higher of the Prime Rate, the Federal Funds Effective Rate plus 0.50%, or the one month LIBOR rate plus 1.00% (ABR loan). The applicable margin is determined based on our total leverage ratio but differs between LIBOR loans and ABR loans. For LIBOR-based borrowing, the margin varies from 2.00% to 2.50%. For ABR-based borrowing, the margin varies from 1.00% to 1.50%. Up to $50 million of the Credit Facility is available for issuance of letters of credit. The Credit Facility matures on June 29, 2020. Customary fees related to the Credit Facility, including commitment fees on the undrawn commitments of between 0.30% and 0.40% per annum, are payable quarterly in arrears and are based on our total leverage ratio. Borrowings under the Credit Facility are guaranteed by our wholly-owned material domestic subsidiaries. All obligations of Gannett and each subsidiary guarantor under the Credit Facility are or will be secured by first priority security interests in our equipment, inventory, accounts receivable, fixtures, general intangibles and other personal property, mortgages on certain material real property, and pledges of the capital stock of each subsidiary guarantor. Under the Credit Facility, our consolidated interest coverage ratio cannot be less than 3.00:1.00, and our total leverage ratio cannot exceed 3.00:1.00 as of the last day of the test period consisting of the last four fiscal quarters. We were in compliance with these financial covenants as of December 25, 2016. The Credit Facility also contains a number of covenants that, among other things, limit or restrict our ability, subject to certain exceptions, to: (i) permit certain liens on current or future assets, (ii) enter into certain corporate transactions, (iii) incur additional indebtedness, (iv) make certain payments or declare certain dividends or distributions, (v) dispose of certain property, (vi) make certain investments, (vii) prepay or amend the terms of other indebtedness, or (viii) enter into certain transactions with our affiliates. We were in compliance with these covenants as of December 25, 2016. During 2016, we borrowed $425 million under our Credit Facility to complete the acquisitions of JMG and ReachLocal. Refer to Note 3 — Acquisitions for further details on these acquisitions. As of December 25, 2016, we had $400 million in outstanding borrowings under the Credit Facility and $9.3 million of letters of credit outstanding, leaving $90.7 million of availability remaining. |
Retirement plans |
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Retirement Plans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Retirement plans | NOTE 8 — Retirement plans Defined benefit retirement plans: We, along with our subsidiaries, have various defined benefit retirement plans, including plans established under collective bargaining agreements. The disclosure tables below include the assets and obligations of the Gannett Retirement Plan (GRP), the Newsquest and Romanes Pension Schemes in the U.K. (Newsquest Plans), the Newspaper Guild of Detroit Pension Plan, the 2015 Supplemental Retirement Plan (SERP), and a supplemental non-qualified retirement plan we assumed pursuant to our acquisition of JMG (JMG Plan). We use a December 31 measurement date convention for all our retirement plans. Our pension costs, which include costs for our qualified and non-qualified plans, are presented in the following table:
The following table provides a reconciliation of pension benefit obligations (on a projected benefit obligation measurement basis), plan assets and funded status, along with the related amounts that are recognized in the Consolidated Balance Sheets.
The funded status (on a projected benefit obligation basis) of our plans at December 25, 2016, is as follows:
The following table presents information for our retirement plans for which accumulated benefits exceed assets:
The following table presents information for our retirement plans for which projected benefit obligations exceed assets:
The following table summarizes the amounts recorded in "Accumulated other comprehensive loss" that are currently unrecognized as a component of pension expense for our retirement plans as of the dates presented (pre-tax).
The actuarial loss amounts expected to be amortized from "Accumulated other comprehensive loss" into net periodic benefit cost in 2017 are $70.4 million. The prior service cost amounts expected to be amortized from "Accumulated other comprehensive loss" into net periodic benefit cost in 2017 are $6.7 million. Changes in plan assets and benefit obligations recognized in "Other comprehensive loss" consist of the following:
Pension costs: The following assumptions were used to determine net pension costs:
The expected return on plan assets assumption was determined based on plan asset allocations, a review of historic capital market performance, historical plan asset performance and a forecast of expected future plan asset returns. Benefit obligations and funded status: The following assumptions were used to determine the year-end benefit obligations:
During 2016, we made contributions of $49.9 million to the Newsquest Plans. In 2017, we expect to contribute approximately $18.9 million to the Newsquest Plans. During 2016, we contributed $25.8 million to the GRP, $12.0 million to the SERP and $0.7 million to the JMG Plan. In addition to any other contributions that may be required, we will make additional contributions of $25.0 million in each of the next four fiscal years ending in 2020 and $15.0 million in 2021 for the GRP. Our expected 2017 contributions for Gannett's SERP and JMG Plan are $11.9 million and $0.3 million, respectively. Plan assets: The asset allocation of our plans at the end of 2016 and 2015, and target allocations for 2017, by asset category, are presented in the table below:
The primary objective of company-sponsored retirement plans is to provide eligible employees with scheduled pension benefits; the "prudent man" guideline is followed with regard to the investment management of retirement plan assets. Consistent with prudent standards for preservation of capital and maintenance of liquidity, the goal is to earn the highest possible total rate of return while minimizing risk. The principal means of reducing volatility and exercising prudent investment judgment is diversification by asset class and by investment manager; consequently, portfolios are constructed to attain prudent diversification in the total portfolio, each asset class, and within each individual investment manager's portfolio. Investment diversification is consistent with the intent to minimize the risk of large losses. All objectives are based upon an investment horizon spanning five years so that interim market fluctuations can be viewed with the appropriate perspective. The target asset allocation represents the long-term perspective. Retirement plan assets will be rebalanced periodically to align them with the target asset allocations. Risk characteristics are measured and compared with an appropriate benchmark quarterly; periodic reviews are made of the investment objectives and the investment managers. Our actual investment return on our Gannett Retirement Plan assets was 0.4% for 2016, 1.9% for 2015 and 5.2% for 2014. Retirement plan assets include approximately 0.6 million shares of our common stock valued at approximately $6.0 million at the end of 2016. The plan received dividends of approximately $0.5 million on these shares in 2016. Cash flows: We estimate the following benefit payments will be made from retirement plan assets, which reflect expected future service, as appropriate. The amounts below represent the benefit payments for our plans.
401(k) savings plan Substantially all our employees (other than those covered by a collective bargaining agreement) who are scheduled to work at least 1,000 hours during each year of employment are eligible to participate in our principal defined contribution plan, The Gannett Co., Inc. 401(k) Savings Plan. Employees can elect to save up to 50% of compensation on a pre-tax basis subject to certain limits. For most participants, the plan's matching formula is 100% of the first 5% of employee contributions. We also make additional employer contributions on behalf of certain long-term employees. Compensation expense related to 401(k) contributions was $28.8 million in 2016, $25.8 million in 2015, and $30.4 million in 2014. We settled the 401(k) employee match obligation payable in company stock by buying our stock in the open market and depositing it in the participants' accounts. In connection with our acquisitions of JMG and ReachLocal, as discussed in Note 3 — Acquisitions, we assumed 401(k) savings plans. JMG's 401(k) savings plan continues to cover former JMG employees. For most participants in this plan, the matching formula is 50% of the first 7% of employee contributions, and the employer match obligation is settled in cash. Additionally, ReachLocal's 401(k) savings plan continues to cover their former full-time U.S. employees and has no employer match obligation. Multi-employer plans that provide pension benefits We contribute to a number of multi-employer defined benefit pension plans under the terms of collective-bargaining agreements (CBAs) that cover our union-represented employees. The risks of participating in these multi-employer plans are different from single-employer plans in the following aspects:
Our participation in these plans for the annual period ended December 25, 2016, is outlined in the table below. The "EIN/Plan Number" column provides the Employee Identification Number (EIN) and the three-digit pension plan number. Unless otherwise noted, the two most recent Pension Protection Act (PPA) zone statuses available are for the plan's year-end at December 25, 2016 and December 27, 2015. The zone status is based on information that we received from the plan and is certified by the plan's actuary. Among other factors, plans in the red zone are generally less than 65% funded; plans in the orange zone are both a) less than 80% funded and b) have an accumulated/expected funding deficiency in any of the next six plan years, net of any amortization extensions; plans in the yellow zone meet either one of the criteria mentioned in the orange zone; and plans in the green zone are at least 80% funded. The "FIP/RP Status Pending/Implemented" column indicates plans for which a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented. The last column lists the expiration date(s) of the collective-bargaining agreement(s) to which the plans are subject. We make all required contributions to these plans as determined under the respective CBAs. For each of the plans listed below, our contribution represented less than 5% of total contributions to the plan. This calculation is based on the plan financial statements issued at the end of December 31, 2015. At the date we issue our financial statements, Forms 5500 were unavailable for the plan years ending after December 31, 2015. We incurred expenses for multi-employer withdrawal liabilities of $2.0 million in 2016 and $6.1 million in 2015. Current liabilities on the Consolidated Balance Sheets include $3.3 million and $2.0 million at December 25, 2016, and December 27, 2015, respectively, and other noncurrent liabilities on the Consolidated Balance Sheets include $40.2 million and $41.5 million at December 25, 2016, and December 27, 2015, respectively, for such withdrawal liabilities.
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Postretirement benefits other than pensions | NOTE 9 — Postretirement benefits other than pension We provide health care and life insurance benefits to certain retired employees who meet age and service requirements. Most of our retirees contribute to the cost of these benefits and retiree contributions are increased as actual benefit costs increase. The cost of providing retiree health care and life insurance benefits is actuarially determined. Our policy is to fund benefits as claims and premiums are paid. We use a December 31 measurement date for these plans. Postretirement benefit cost for health care and life insurance included the following components:
The table below provides a reconciliation of benefit obligations and funded status of our postretirement benefit plans:
The following table summarizes the amounts recorded in "Accumulated other comprehensive loss" that are currently unrecognized as a component of net periodic postretirement benefit credit as of the dates presented (pre-tax):
The actuarial loss and prior service credit estimated to be amortized from "Accumulated other comprehensive loss" into net periodic benefit cost in 2017 are $0.6 million and $3.6 million, respectively. Changes in plan assets and benefit obligations recognized in "Other comprehensive loss" consist of the following:
Postretirement benefit costs: The following assumptions were used to determine postretirement benefit cost:
Benefit obligations and funded status: The following assumptions were used to determine the year-end benefit obligation:
Assumed health care cost trend rates have an effect on the amounts reported for the health care plans. The effect of a 1% change in the health care cost trend rate would result in a change of approximately $0.7 million in the 2016 postretirement benefit obligation and no measurable change in the aggregate service and interest components of the 2016 expense. Cash flows: We expect to make the following benefit payments, which reflect expected future service. The amounts below represent the benefit payments for our plans.
The amounts above exclude the participants' share of the benefit cost. Our policy is to fund benefits as claims, stipends and premiums are paid. We expect no subsidy benefits for 2017 and beyond. |
Income taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income taxes | NOTE 10 — Income taxes The provision (benefit) for income taxes consists of the following:
The components of net income before income taxes consist of the following:
The provision for income taxes varies from the U.S. federal statutory tax rate as a result of the following differences:
Deferred income taxes reflect temporary differences in the recognition of revenue and expense for tax reporting and financial statement purposes. Deferred tax liabilities and assets are adjusted for enacted changes in tax laws or tax rates of the various tax jurisdictions. The amount of such adjustments for 2016 was $1.1 million compared to $3.8 million for 2015. The adjustments for both 2016 and 2015 were due to reductions in U.K. statutory tax rates. The amount of such adjustments for 2014 was not significant. Deferred tax liabilities and assets were composed of the following at the end of 2016 and 2015:
Basis differences relating to all partnership items are reflected in the partnership line item. The deferred tax assets and liabilities previously transferred from our former parent were adjusted as of December 25, 2016 due to the annual procedure to true-up the 2015 tax provision estimates to the actual 2015 corporate income tax return filed during the third quarter of 2016. These changes in estimates primarily relate to the deferred tax liability associated with depreciable assets and other 2015 tax provision to tax return adjustments impacting the previously estimated deferred taxes. The total impact was an increase to deferred tax assets and additional paid-in capital of approximately $31.0 million. As of December 25, 2016, we had approximately $7.8 million of foreign tax credits, $5.4 million of state credits, $263.9 million of apportioned state net operating loss carryforwards, $159.2 million of foreign net operating loss carry forwards, and $29.1 million of foreign capital loss carryforwards. The foreign tax credits, the state tax credits, and the state net operating loss carryovers expire in various amounts beginning in 2017 through 2035. The countries where we have foreign net operating loss carryovers allow for these losses to be carried forward indefinitely except for Japan and the Netherlands. Net operating loss carryovers in Japan and the Netherlands expire in various amounts beginning in 2020 through 2025. Our foreign capital losses can be carried forward indefinitely. Included in total deferred tax assets are valuation allowances of approximately $194.9 million in 2016 and $181.9 million in 2015, primarily related to unamortizable intangible assets, foreign tax credits, and foreign losses available for carry forward to future years. The increase in the valuation allowance from 2015 to 2016 is related to ReachLocal foreign losses. The valuation allowance is based on an analysis of future sources of taxable income and other sources of positive and negative evidence and whether it is more likely than not that the foreign credits and losses will not be utilized before their expiration. The following table summarizes the activity related to our valuation allowance for deferred tax assets for the year ended December 25, 2016:
Realization of deferred tax assets for which valuation allowances have not been established is dependent upon generating sufficient future taxable income. We expect to realize the benefit of these deferred tax assets through future reversals of our deferred tax liabilities, through the recognition of taxable income in the allowable carryback and carryforward periods, and through implementation of future tax planning strategies. Although realization is not assured, we believe it is more likely than not that all deferred tax assets for which valuation allowances have not been established will be realized. The following table summarizes the activity related to unrecognized tax benefits, excluding the federal tax benefit of state tax deductions:
The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $17.3 million as of December 25, 2016, $11.3 million as of December 27, 2015, and $7.5 million as of December 28, 2014. Additions for tax positions of prior years include $4.3 million of liabilities related to research and development credits which are recorded as a reduction to deferred tax assets. Remaining amounts are recorded as an income tax liability and include the federal tax benefit of state tax deductions. We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. We also recognize interest income attributable to overpayment of income taxes and from the reversal of interest expense previously recorded for uncertain tax positions which are subsequently released as a component of income tax expense. We recognized income from interest and the release of penalty reserves of $0.6 million in 2016, $0.6 million in 2015, and $1.2 million in 2014. The amount of accrued interest and payables related to unrecognized tax benefits was $3.8 million as of December 25, 2016, $3.4 million as of December 27, 2015, and $1.1 million as of December 28, 2014. We file income tax returns in the U.S. various state and foreign jurisdictions. The tax years 2013 through 2015 remain subject to examination by the IRS. The tax years 2013 through 2015 generally remain subject to examination by state authorities, and the tax years 2011 through 2015 are subject to examination by U.K. tax authorities. It is reasonably possible the amount of unrecognized benefit with respect to certain of our unrecognized tax positions will significantly increase or decrease within the next 12 months. These changes may be the result of settlement of ongoing audits, lapses of statutes of limitations, or regulatory developments. At this time, we estimate the amount of our gross unrecognized tax positions may decrease by up to approximately $2.2 million within the next 12 months primarily due to lapses of statutes of limitations and settlement of ongoing audits in various jurisdictions. In connection with the spin-off, we entered into a tax matters agreement with our former parent which states each company's rights and responsibilities with respect to payment of taxes, tax return filings, and control of tax examinations. We are generally responsible for taxes allocable to periods (or portions of periods) beginning after the spin-off. Although any changes with regard to additional income tax liabilities which relate to periods prior to the spin-off may impact our effective tax rate in the future, we may be entitled to seek indemnification for these items from our former parent under the tax matters agreement. |
Supplemental equity information |
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Shareholders' Equity and Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental equity information | NOTE 11 — Supplemental equity information Capital stock and earnings per share On June 29, 2015, our former parent distributed 98.5% of our total shares and retained the remaining 1.5%. The total shares outstanding at that date was approximately 115 million. The total number of shares outstanding at that date was used for the calculation of both basic and diluted earnings per share for years prior to 2015. Our earnings per share (basic and diluted) for each fiscal year is presented below:
The diluted earnings per share amounts exclude the effects of approximately 0.4 million and 0.1 million RSUs outstanding for 2016 and 2015, respectively, as their inclusion would be antidilutive. Share repurchase program In July 2015, we announced that our Board of Directors approved a share repurchase program authorizing us to repurchase shares with an aggregate value of up to $150 million over a three-year period. Shares may be repurchased at management's discretion, either in the open market or in privately negotiated block transactions. Management's decision to repurchase shares will depend on share price and other corporate liquidity requirements. As of December 25, 2016, approximately 3.8 million shares have been repurchased under this program at a total cost of $32.7 million. Equity-based awards We established the Gannett Co. Inc. 2015 Omnibus Incentive Compensation Plan (the Plan) for the purpose of granting equity-based and cash-based awards to Gannett employees and directors. The Plan permits the grant of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, stock awards, restricted stock units (RSUs), performance shares, performance units, and cash-based awards. Awards may be granted to our employees and members of the Board of Directors. The Executive Compensation Committee of the Board of Directors administers the plan and initially reserved 11.0 million shares of our common stock for issuance. The Plan provides that shares of common stock subject to awards granted become available again for issuance if such awards are canceled or forfeited. We currently issue stock-based compensation to employees in the form of performance shares and RSUs. We currently issue stock-based compensation to members of our Board of Directors in the form of RSUs. Award grants to our employees are generally made on January 1 and grants to members of our Board of Directors generally will be made in connection with the date of our annual meetings or commencement of service for a new member. Prior to the spin-off, Gannett employees were eligible to participate in our former parent's 2001 Omnibus Incentive Compensation Plan (the former parent plan). In connection with the spin-off, 4.4 million former parent options, 8.3 million former parent RSUs and 3.0 million former parent performance shares were converted to 1.1 million Gannett options, 3.0 million Gannett RSUs and 1.0 million Gannett performance shares, respectively, with terms that were substantially similar to the terms of the awards under the former parent plan. These awards were modified under the mandatory anti-dilution provision of the grants and an incremental cost of $3.1 million will be recorded over the remaining vesting periods of these awards. Performance share awards generally have a three-year vesting period with the number of shares earned (0% to 200% of the target award) determined based upon how our total shareholder return (TSR) compares to the TSR of a peer group of media companies during the three-year period. Performance shares generally vest on a pro rata basis if an employee terminates before the end of the performance period due to death, disability or retirement. Non-vested performance shares are generally forfeited upon termination for any other reason. The fair value and compensation expense of each performance share is determined on date of grant by using a Monte Carlo valuation model. Each performance share is equal to and paid in one share of our common stock, but carries no voting or dividend rights. RSU awards generally have a four-year incentive period and grant one share of common stock for each RSU granted. Subject to special vesting rules that apply to terminations due to death, disability or retirement, RSUs vest at the end of the incentive period; provided that commencing for awards made after 2014, RSUs generally vest 25% per year over the four-year incentive period. Expense is recognized on a straight-line basis over the incentive period based on the grant date fair value. Members of our Board of Directors receive grants of RSUs as well as cash compensation. Director RSUs generally vest in quarterly installments over one year. Expense is recognized on a straight-line basis over the vesting period based on the grant date fair value. The Executive Compensation Committee may grant other types of awards that are valued in whole or in part by reference to or that are otherwise based on fair market value of our common stock or other criteria established by the Executive Compensation Committee including the achievement of performance goals. The maximum aggregate grant of performance shares and RSU awards that may be awarded to any participant in any fiscal year shall not exceed 500,000 shares of common stock. The maximum aggregate amount of cash-based awards that may be awarded to any participant in any fiscal year shall not exceed $10 million. Determining fair value of performance shares Valuation and amortization method – We determined the fair value of performance shares using the Monte Carlo valuation model. This model projects probable future stock prices for us and our peer group companies subject to certain price caps at the conclusion of the three-year incentive period. Key inputs into the Monte Carlo valuation model include expected term, expected volatility, expected dividend yield and the risk-free rate. Each assumption is discussed below. Expected term – The expected term represents the period that our stock-based awards are expected to be outstanding. The expected term for performance share awards is based on the incentive period of three years. Expected volatility – The fair value of stock-based awards reflects volatility factors calculated using historical market data for our common stock and the common stock of our peer group when the Monte Carlo method is used. The time frame used is equal to the expected term. Expected dividend – The dividend assumption is based on our expectations about our dividend policy on the date of grant. Risk-free interest rate – The risk-free interest rate is based on the yield to maturity at the time of the award grant on zero-coupon U.S. government bonds having a remaining life equal to the award's expected term. Estimated forfeitures – When estimating forfeitures, voluntary termination behavior as well as analysis of actual forfeitures was considered. The following assumptions were used to estimate the fair value of performance share awards that were granted:
Determining fair value of restricted stock units For RSUs, the grant-date fair value is calculated at the share price on the date of grant less the present value of estimated dividends which will be granted during the vesting period. Stock-based compensation expense Stock-based compensation expense for Gannett employee participants in both plans have been included within selling, general, and administrative expense within the Consolidated and Combined Statements of Income. Prior to the distribution date, stock-based compensation expense for Gannett participants in the former parent plan was allocated to us. The following table shows the stock-based compensation related amounts recognized in the Consolidated and Combined Statements of Income for equity awards:
Restricted stock and RSUs As of December 25, 2016 there was $23.4 million of unrecognized compensation cost related to non-vested restricted stock and RSUs. This amount will be adjusted for future changes in estimated forfeitures and recognized on a straight-line basis over a weighted average period of 2.4 years. As of December 27, 2015, there was $20.2 million of unrecognized compensation cost related to non-vested restricted stock and RSUs with a weighted average period remaining of 2.4 years. A summary of restricted stock and RSU awards is presented below for the period after the date of separation from our former parent:
Performance Shares: As of December 25, 2016, there was $4.9 million of unrecognized compensation cost related to non-vested Performance Shares. This amount will be adjusted for future changes in estimated forfeitures and recognized over a weighted average period of 1.7 years. As of December 27, 2015, there was $4.6 million of unrecognized compensation cost related to non-vested Performance Shares with a weighted average period remaining of 1.7 years. A summary of the performance shares awards is presented below for the period after the date of separation from our former parent:
Stock Options: As of December 25, 2016 and December 27, 2015, all stock options were fully vested. Options were exercised with an intrinsic value of approximately $0.9 million and $4.7 million in 2016 and 2015, respectively. A summary of our stock option awards is presented below:
Accumulated other comprehensive loss The elements of our "Accumulated other comprehensive loss" consisted of pension, retiree medical and life insurance liabilities and foreign currency translation. The following tables summarize the components of, and changes in, "Accumulated other comprehensive loss," net of tax:
"Accumulated other comprehensive loss" components are included in the computation of net periodic postretirement costs (see Note 8 — Retirement plans and Note 9 — Postretirement benefits other than pension for more detail). Reclassifications out of "Accumulated other comprehensive loss" related to these postretirement plans include the following:
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Dec. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Commitments, contingencies and other matters | NOTE 12 — Commitments, contingencies and other matters Telephone Consumer Protection Act (TCPA) litigation: In January 2014, a class action lawsuit was filed against Gannett in the U.S. District Court for the District of New Jersey (Casagrand et al v. Gannett Co., Inc., et al). The suit claims various violations of the Telephone Consumer Protection Act (TCPA) arising from allegedly improper telemarketing calls made to consumers by one of our vendors. The plaintiffs sought to certify a class that would include all telemarketing calls made by the vendor or us. The TCPA provides for statutory damages of $500 per violation ($1,500 for willful violations). In April 2016, we agreed to settle all of the claims raised. The settlements are reflected, net of insurance recoveries, in our financial statements as of December 25, 2016 and were not material to our results of operations, financial position, or cash flows. Environmental contingency: In 2011, the Advertiser Company, a subsidiary that publishes the Montgomery Advertiser, was notified by the U.S. EPA that it had been identified as a potentially responsible party (PRP) for the investigation and remediation of groundwater contamination in downtown Montgomery, AL. The Advertiser is a member of the Downtown Environmental Alliance, which has agreed to jointly fund and conduct all required investigation and remediation. The U.S. EPA has approved the work plan for the investigation and remediation and has transferred responsibility for oversight of this work to the Alabama Department of Environmental Management. The investigation and remediation are underway. In 2015, the Advertiser and other members of the Downtown Environmental Alliance also reached a settlement with the U.S. EPA regarding the costs the U.S. EPA spent to investigate the site. The Advertiser's final costs cannot be determined until the cleanup work is completed and contributions from other PRPs are finalized. Other litigation: We, along with a number of our subsidiaries, are defendants in judicial and administrative proceedings involving matters incidental to our business. While the ultimate results of these proceedings cannot be predicted with certainty, we expect the ultimate resolution of all pending or threatened claims and litigation will not have a material effect on our consolidated results of operations, financial position, or cash flows. Leases: Future minimum lease commitments for non-cancellable operating leases (primarily real-estate) are as follows:
Expected future sublease income on these lease commitments are expected to be approximately $8.2 million. Total rent expense was $48.7 million in 2016, $39.7 million in 2015, and $34.1 million in 2014. The lease for our corporate headquarters in McLean, VA provides for an initial term of 15 years with two five-year renewal options. Lease payments will begin at approximately $6.6 million per year with an additional $2.2 million in lease payments beginning in 2018. The lease agreement is subject to 2.5% annual rent escalations. Rent expense is recorded on a straight-line basis over the initial lease term. Purchase obligations: We have future expected purchase obligations of $751.7 million related to wire services, interactive marketing agreements, professional services, paper distribution agreements, printing contracts, and other legally binding commitments. Amounts which we are liable for under purchase orders outstanding at December 25, 2016, are reflected in the Consolidated Balance Sheets as "Accounts payable and accrued liabilities," and are excluded from the amount referred to above. Self-insurance: We are self-insured for most of our employee medical coverage and for our casualty, general liability, and libel coverage (subject to a cap above which third party insurance was in place). The liabilities are established on an actuarial basis with the advice of consulting actuaries and totaled $71.5 million as of December 25, 2016 and $75.5 million as of December 27, 2015. Other matters: In 2014, we shut down one of our businesses and incurred $21.0 million of shutdown costs associated with future contractual promotional payments. These costs were recorded on our Consolidated Balance Sheet and approximately $0.4 million remain as of December 25, 2016. The majority of the costs will be paid in 2017. These costs are also included in "Selling, general and administrative expenses, exclusive of depreciation" in the Consolidated and Combined Statements of Income. |
Fair value measurement |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurement | NOTE 13 — Fair value measurement Fair value measurement We measure and record certain assets and liabilities at fair value in the accompanying consolidated and combined financial statements. Guidance surrounding the valuation of assets and liabilities establishes a hierarchy for those instruments measured at fair value. This hierarchy distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs) and consists of three levels: Level 1 – Quoted market prices in active markets for identical assets or liabilities; Level 2 – Inputs other than Level 1 inputs that are either directly or indirectly observable; and Level 3 – Unobservable inputs developed using our own estimates and assumptions, which reflect those that a market participant would use. As of December 25, 2016 and December 27, 2015, assets and liabilities held at fair value and measured on a recurring basis primarily consist of pension plan assets and our revolving credit facility. The carrying value of our revolving credit facility approximates the fair value and is classified as Level 3. As permitted by U.S. generally accepted accounting principles, the plans use net asset values as a practical expedient to determine the fair value of certain investments. These investments measured at net asset value have not been classified in the fair value hierarchy. The amounts presented in the table below are intended to permit reconciliation to the amounts presented in the Consolidated Balance Sheets. The following tables set forth, by level within the fair value hierarchy, the fair values of our pension plans assets relating to the GRP, the Newsquest Plans and the Newspaper Guild of Detroit Pension Plan:
Items included in "Cash and other" in the table above primarily consist of amounts categorized as cash and cash equivalents and pending purchases and sales of securities. Valuation methodologies used for assets and liabilities measured at fair value are as follows:
We review appraised valued, audited financial statements and additional information to evaluate fair value estimates from our investment managers or fund administrator. The following tables set forth a summary of changes in the fair value of our pension plan assets and liabilities that are categorized as Level 3:
There were $2.5 million in transfers between Levels 1 and 2 for the year ended December 25, 2016. No such transfers occurred in fiscal year 2015. Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Our assets that are measured on a nonrecurring basis are assets held for sale (Level 3), which are evaluated by using executed purchase agreements or third party valuation experts when certain circumstances arise. The following table summarize the non-financial assets measured at fair value on nonrecurring basis in the accompanying Consolidated Balance Sheet:
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Segment reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | NOTE 14 — Segment reporting We define our reportable segments based on the way the chief operating decision maker (CODM), currently the Chief Executive Officer, manages the operations for purposes of allocating resources and assessing performance. In the third quarter of 2016, we reorganized our reportable segments as a result of the ReachLocal acquisition to include the following:
In addition to the above operating segments, we have a corporate category that includes activities not directly attributable to a specific segment. This category primarily consists of broad corporate functions and includes legal, human resources, accounting, analytics, finance, and marketing as well as activities and costs not directly attributable to a particular segment such as tax settlements and other general business costs. The CODM uses Adjusted EBITDA to evaluate the performance of the segments and allocate resources. Adjusted EBITDA is a financial performance measure defined as net income (loss) before (1) income taxes, (2) interest expense, (3) equity income, (4) other non-operating items, (5) severance-related charges (including early retirement programs), (6) facility consolidation costs, (7) asset impairment charges, (8) depreciation, and (9) amortization. Management considers Adjusted EBITDA to be the appropriate metric to evaluate and compare the ongoing operating performance of our segments on a consistent basis across reporting periods as it eliminates the effect of items which we do not believe are indicative of each segment's core operating performance. Adjusted EBITDA is considered to be a non-GAAP measure and may be different than similarly-titled non-GAAP financial measures used by other companies. The following presents our segment information by year:
The following table presents our reconciliation of Adjusted EBITDA to net income:
Asset information by segment is not a key measure of performance used by the CODM. Accordingly, we have not disclosed asset information by segment. Additionally, equity income in unconsolidated investees, interest expense, other non-operating items, net, and provision for income taxes, as reported in the consolidated and combined financial statements, are not part of operating income and are primarily recorded at the corporate level. |
Relationship with our former parent |
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Transactions with Former Parent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Relationship with our former parent | NOTE 15 — Relationship with our former parent Relationship with our former parent subsequent to the spin-off Transition services agreement: In connection with the spin-off, we entered into a transition services agreement with our former parent, pursuant to which we and our former parent will provide to each other certain specified services on a transitional basis, including various information technology, financial, and administrative services. The charges for the transition services generally are expected to allow the providing entity to fully recover all out-of-pocket costs and expenses it actually incurs in connection with providing the service plus, in some cases, the allocated indirect costs of providing the services, generally without profit. The transition services agreement will terminate on the expiration of the term of the last service provided under it, not later than 24 months following the distribution date. Subsequent to separation, we provided certain IT, payroll and other services to our former parent in the amount of $6.3 million in 2016 and $5.9 million in 2015. Our former parent provided certain services to us in the amount of $5.7 million in 2016 and $3.7 million in 2015. Employee matters agreement: In connection with the spin-off, we entered into an employee matters agreement with our former parent prior to the separation to allocate liabilities and responsibilities relating to employment matters, employee compensation and benefit plans and programs and other related matters. The employee matters agreement governs certain compensation and employee benefit obligations with respect to the current and former employees and non-employee directors of each company. See Note 8 — Retirement plans and Note 9 — Postretirement benefits other than pension for more detail. Revenue and other transactions entered into in the ordinary course of business: Certain of our revenue arrangements relate to contracts entered into in the ordinary course of business with our former parent and its affiliates, principally cars.com, G/O Digital and CareerBuilder. Relationship with our former parent prior to the spin-off The following is a discussion of our relationship with our former parent prior to the spin-off, including the services provided by both parties and how transactions with our former parent and its affiliates through June 28, 2015 were accounted for in the combined financial statements. Intercompany transactions: For periods prior to the spin-off, all significant intercompany transactions between either (i) us and our former parent or (ii) us and our former parent's affiliates have been included within the combined financial statements and are considered to be effectively settled through equity contributions or distributions at the time the transactions were recorded. Equity: Prior to the spin-off, the Combined Statements of Equity includes the accumulated balance of transactions between us and our former parent, our paid-in-capital and our former parent's interest in our cumulative retained earnings, which are presented within "Former parent's investment, net" and combined with "Accumulated other comprehensive loss" as the two components of equity. The amounts comprising the accumulated balance of transactions between us, our former parent and its affiliates include (i) the cumulative net assets attributed to us by our former parent and its affiliates, (ii) the cumulative net advances to former parent representing our cumulative funds swept (net of funding provided by our former parent and its affiliates to us) as part of the centralized cash management program described further below and (iii) the cumulative charges (net of credits) allocated by our former parent and its affiliates to us for certain support services received by us. Centralized cash management: Prior to the spin-off, our former parent utilized a centralized approach to cash management and the financing of its operations, providing funds to its entities as needed. These transactions were recorded in "Former parent's investment, net" when advanced and were reflected in the Combined Statement of Cash Flows. Accordingly, none of our former parent's cash and cash equivalents were assigned to us in the combined financial statements. Cash and cash equivalents prior to the spin-off represent cash held by us. Support services provided and other amounts with our former parent and former parent's affiliates: Prior to the spin-off, we received allocated charges from our former parent and its affiliates for certain corporate support services, which are recorded within "Selling, general and administrative expense" in our Combined Statements of Income, net of cost recoveries, reflecting services provided by us and allocated to our former parent. Management believes the bases used for the allocations are reasonable and reflect the portion of such costs, net of cost recoveries, attributable to our operations; however, the amounts may not be representative of the costs necessary for us to operate as a separate stand-alone company. Pension and other post retirement employee benefit plans with our former parent and former parent's affiliates: A number of our current and former employees also participated in pension plans and postretirement benefit plans sponsored by our former parent. Retirement benefits obligations, health care and life insurance benefits pursuant to the former parent-sponsored retirement and postretirement plans related to our current and former employees were transferred to us at the separation date and, accordingly, were allocated to us in our consolidated and combined financial statements for all periods prior to the spin-off. This allocation was done by estimating the projected benefit obligation of participants for which the liability was transferred to us at the separation. Subsequent to the spin-off, no further costs were allocated to us. These allocated costs, net of cost recoveries, are summarized in the following table:
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Quarterly statement of income |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly statement of income | NOTE 16 — Quarterly statements of income (unaudited) Selected unaudited financial data for each quarter of the last two fiscal years is presented as follows:
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Subsequent events |
12 Months Ended |
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Dec. 25, 2016 | |
Subsequent Events [Abstract] | |
Subsequent events | NOTE 17 — Subsequent events On February 22, 2017, the Board of Directors declared a dividend of $0.16 per share, payable on March 24, 2017, to shareholders of record as of the close of business March 10, 2017. |
Summary of significant accounting policies (Policies) |
12 Months Ended |
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Dec. 25, 2016 | |
Accounting Policies [Abstract] | |
Consolidation | Consolidation: The consolidated and combined financial statements include our accounts and those over which we have control after elimination of all intercompany transactions and profits. |
Use of estimates | Use of estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated and combined financial statements and footnotes thereto. Actual results could differ from those estimates. Significant estimates include amounts for income taxes, pension and other post-employment benefits, and valuation of long-lived and intangible assets. |
Segment presentation | Segment presentation: We classify our operations into two reportable segments: publishing and ReachLocal. In addition to these reportable segments, we have a corporate and other category that includes activities not directly attributable or allocable to a specific segment. The publishing reportable segment is an aggregation of two operating segments: Domestic Publishing and the U.K. Group. For further details, see Note 14 — Segment reporting. |
Business combinations | Business combinations: We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain identifiable assets include, but are not limited to, expected long-term revenues, future expected operating expenses, cost of capital, and appropriate discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. |
Revenue recognition | Revenue recognition: Our circulation revenues include revenues for newspapers (both print and digital) purchased by readers or distributors. Circulation revenues are recognized when purchased newspapers are distributed, net of provisions for related returns. Subscriptions are recognized over the subscription period. Our advertising revenues include amounts charged to advertisers for space purchased in our newspapers, digital ads placed on our digital platforms, advertising and marketing services, other advertising products such as preprints and direct mail, and the provision and sale of online marketing services and products through our ReachLocal subsidiary. Advertising revenues are recognized, net of agency commissions, in the period when advertising is printed or placed on digital platforms. Marketing services revenues are generally recognized when advertisements or services are delivered. For our online marketing products provided by our ReachLocal subsidiary, we typically enter into multi-month agreements for the delivery of our products. Under our agreements, our clients typically pay, in advance, a fixed fee on a monthly basis, which includes all charges for the included technology and any media services, management, third-party content and other costs and fees. We record these prepayments as deferred revenue and then revenue is recognized as we purchase media and perform other services. Our other revenues primarily include commercial printing and distribution. Commercial printing and distribution revenues are recognized when the product is delivered to the customer. We have various advertising and circulation agreements which have both print and digital deliverables. Revenue from sales agreements that contain multiple deliverable elements is allocated to each element based on the relative best estimate of selling price. Elements are treated as separate units of accounting if there is standalone value upon delivery. Amounts received from customers in advance of revenue recognition are deferred as liabilities. |
Revenue recognition, multiple-deliverable arrangements | We have various advertising and circulation agreements which have both print and digital deliverables. Revenue from sales agreements that contain multiple deliverable elements is allocated to each element based on the relative best estimate of selling price. Elements are treated as separate units of accounting if there is standalone value upon delivery. |
Cash and cash equivalents | Cash and cash equivalents: Cash equivalents consist of investments with original maturities of three months or less. |
Accounts receivables and allowances for doubtful accounts | Accounts receivable and allowance for doubtful accounts: Accounts receivable are recorded at invoiced amounts and generally do not bear interest. The allowance for doubtful accounts reflects our estimate of credit exposure, determined principally on the basis of our collection experience, aging of our receivables, and significant individual account credit risk. Credit is extended based upon an evaluation of the customer's financial position, and generally collateral is not required. |
Inventories | Inventories: Inventories, consisting principally of newsprint, printing ink, and plate material for our publishing operations, are valued at the lower of cost (first-in, first-out) or market. |
Assets held for sale | Assets held for sale: We classify assets to be sold as held for sale in the period in which all of the following criteria are met: management commits to a plan to sell the disposal group, the disposal group is available for immediate sale in its present condition, an active program to locate a buyer has been initiated, and the sale is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond our control extend the period of time required to sell. The assets held for sale are measured at the lower of carrying value or fair value less any costs to sell. |
Property and depreciation | Property and depreciation: Property, plant, and equipment is recorded at cost, and depreciation is provided generally on a straight-line basis over the estimated useful lives of the assets. The principal estimated useful lives are 10 to 40 years for buildings and improvements and 3 to 30 years for machinery, equipment, and fixtures. Changes in the estimated useful life of an asset, which, for example, could happen as a result of facility consolidations, can affect depreciation expense and net income. Major renewals and improvements and interest incurred during the construction period of major additions are capitalized. Expenditures for maintenance, repairs, and minor renewals are charged to expense as incurred. |
Software development costs | Software development costs: Our subsidiary ReachLocal incurs certain costs to develop software for internal use. These costs are capitalized when it is determined the development efforts will result in new or additional functionality or new products. Costs incurred prior to meeting these criteria and costs associated with ongoing maintenance are expensed as incurred and included in costs of sales and operating expenses, in addition to amortization of capitalized software development costs, in the accompanying Consolidated and Combined Statements of Income. We monitor our existing capitalized software costs and reduce their carrying value as a result of releases rendering previous features or functions obsolete. Software development costs are evaluated for impairment in accordance with our policy for finite-lived intangible assets and other long lived assets. Costs capitalized as internal use software are amortized on a straight-line basis over an estimated useful life of three years. |
Leases | Leases: Operating lease rentals are expensed on a straight-line basis over the life of the lease. At lease inception, we determine the lease term by excluding renewal options that are not reasonably assured. The lease term is used to determine whether a lease is capital or operating and is used to calculate straight-line rent expense. Additionally, the depreciable life of leased assets and leasehold improvements is limited by the expected lease term. |
Valuation of long-lived assets | Valuation of long-lived assets: We evaluate the carrying value of long-lived assets (mostly property, plant, and equipment and definite-lived intangible assets) to be held and used whenever events or changes in circumstances indicate the carrying amount may not be recoverable. The carrying value of a long-lived asset group is considered impaired when the projected undiscounted future cash flows are less than their carrying value. We measure impairment based on the amount by which the carrying value exceeds the fair value. Fair value is determined primarily using the projected future cash flows, discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose. |
Goodwill and other intangible assets | Goodwill and other intangible assets: Goodwill represents the excess of acquisition cost over the fair value of assets acquired, including identifiable intangible assets, net of liabilities assumed. Goodwill is tested for impairment on an annual basis (first day of fourth quarter) or between annual tests if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Before performing the annual two-step goodwill impairment test, we are first permitted to perform a qualitative assessment to determine if the two-step quantitative test must be completed. The qualitative assessment considers events and circumstances such as macroeconomic conditions, industry and market conditions, cost factors and overall financial performance, as well as company and specific reporting unit specifications. If after performing this assessment, we conclude it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we are required to perform a two-step quantitative test. Otherwise, the two-step test is not required. In the first step of the quantitative test, we are required to determine the fair value of each reporting unit and compare it to the carrying amount of the reporting unit. Fair value of the reporting unit is determined using various techniques, including multiple of earnings and discounted cash flow valuation techniques. If the carrying amount of the reporting unit exceeds the fair value of the reporting unit, we perform the second step of the impairment test. In the second step of the impairment test, we determine the implied fair value of the reporting unit's goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then an impairment of goodwill has occurred and we must recognize an impairment loss for the difference between the carrying amount and the implied fair value of goodwill. In determining the reporting units, we consider the way we manage our businesses and the nature of those businesses. These reporting units therefore consist of Domestic Publishing, the U.K. Group, and ReachLocal. We perform an impairment test annually, or more often if circumstances dictate, of our indefinite-lived intangible assets. Intangible assets that have finite useful lives are amortized over those useful lives and are evaluated for impairment as described above. |
Investments and other assets | Investments and other assets: Investments in entities for which we do not have control, but we have the ability to exercise significant influence over operating and financial policies, are accounted for under the equity method. Our share of net earnings and losses from these ventures is included in "Equity income in unconsolidated investees, net" in the Consolidated and Combined Statements of Income. See Note 6 — Investments for additional information. |
Retirement plans | Retirement plans: Pension and other postretirement benefit costs under our defined benefit retirement plans are actuarially determined. We recognize the cost of postretirement benefits including pension, medical and life insurance benefits on an accrual basis over the average life expectancy of employees expected to receive such benefits for plans that have had their benefits frozen. For active plans, costs are recognized over the estimated average future service period. |
Equity-based employee compensation | Equity-based employee compensation: We grant restricted stock units as well as performance shares to our employees as a form of compensation. The expense for such awards is based on the grant date fair value of the award and is recognized on a straight-line basis over the requisite service period, which is generally the four-year incentive period for restricted stock units and the three-year incentive period for performance shares. Expense for performance share awards for participants meeting certain retirement eligible criteria as defined in the plan is recognized using the accelerated attribution method. See Note 11 — Supplemental equity information for further discussion. |
Income taxes | Income taxes: Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. See Note 10 — Income taxes for further discussion. We also evaluate any uncertain tax positions and recognize a liability for the tax benefit associated with an uncertain tax position if it is more likely than not that the tax position will not be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. We record a liability for uncertain tax positions taken or expected to be taken in a tax return. Any change in judgment related to the expected ultimate resolution of uncertain tax positions is recognized in earnings in the period in which such change occurs. |
Loss contingencies | Loss contingencies: We are subject to various legal proceedings, claims and regulatory matters, the outcomes of which are subject to significant uncertainty. We determine whether to disclose or accrue for loss contingencies based on an assessment of whether the risk of loss is remote, reasonably possible or probable, and whether it can be reasonably estimated. We accrue for loss contingencies when such amounts are probable and reasonably estimable. If a contingent liability is only reasonably possible, we will disclose the potential range of the loss, if material and estimable. |
Foreign currency translation | Foreign currency translation: The statements of income of foreign operations have been translated to U.S. dollars using the average currency exchange rates in effect during the relevant period. The balance sheets have been translated using the currency exchange rate as of the end of the accounting period. The impact of currency exchange rate changes on the translation of the balance sheets are included in other comprehensive income (loss) in the Consolidated and Combined Statements of Comprehensive Income and are classified as accumulated other comprehensive income (loss) in the Consolidated and Combined Balance Sheets and Statements of Equity. |
Concentration of risk | Concentration of risk: Due to the distributed nature of our operations, we are not subject to significant concentrations of risk relating to customers, products, or geographic locations. |
New accounting pronouncement | New accounting pronouncements adopted: The following are new accounting pronouncements which we have adopted in fiscal year 2016: Fair Value Measurement - Disclosures for Investments in Certain Entities That Calculate Net Asset Value (NAV) per Share: In fiscal year 2015, we implemented the Financial Accounting Standards Board (FASB) guidance that removes the requirement to include investments in the fair value hierarchy for which the fair value is measured at NAV using the practical expedient under Fair Value Measurement guidance. This guidance impacted our disclosures only. Income Taxes- Balance Sheet Classification of Deferred Taxes: In fiscal year 2015, we early adopted the FASB guidance which requires companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. Business Combinations - Measurement-Period Adjustments: In fiscal year 2016, we applied the FASB guidance that simplifies the accounting for measurement-period adjustments. This guidance eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively and requires that acquirers recognize measurement-period adjustments in the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The impact was not material to our consolidated financial results. Presentation of Financial Statements - Going Concern: We have adopted the FASB guidance related to interim and annual assessments by management to evaluate the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued, or available to be issued, when applicable. Disclosures are required if management concludes that substantial doubt exists or that its plans alleviate substantial doubt that was raised. Our assessments did not indicate substantial doubt regarding our ability to continue as a going concern. Measurement Date for Retirement Plans: We have implemented the FASB guidance that gives an employer whose fiscal year-end does not coincide with a calendar month-end the ability, as a practical expedient, to measure defined benefit retirement obligations and related plan assets as of the month-end that is closest to its fiscal year-end. As a result, our retirement plans are measured at December 31, 2016, rather than our fiscal year end, December 25, 2016. Stock-based Compensation: In fiscal year 2016, we early adopted new guidance surrounding stock-based compensation which simplified certain aspects of the accounting for share-based payment transactions, including income taxes, classification of awards, and classification of share-based payment activity in the statement of cash flows. The adoption of this new guidance decreased income tax expense by $8.9 million for the year ended December 25, 2016. Refer to Note 10 — Income taxes, Note 11 — Supplemental equity information, and Note 16 — Quarterly statements of income (unaudited) for further discussion. Cash and Cash Equivalents, including Statement of Cash Flows and Restricted Cash: We early adopted new guidance in fiscal year 2016 related to the classification of certain cash flow activity such as debt prepayment, debt extinguishment costs, contingent consideration payments made after a business combination, and distributions received from equity method investees. The adoption of this guidance did not have a material impact on the designations of operating, investing, and financing activities within our statements of cash flows. New accounting pronouncements not yet adopted: The following are new accounting pronouncements which are being evaluated by the company for future impacts on our financial position: Revenue from Contracts with Customers: In August 2014, the FASB issued a new revenue standard, "Revenue from Contracts with Customer," which prescribes a single comprehensive model for entities to use in the accounting of revenue arising from contracts with customers. The new guidance will supersede virtually all existing revenue guidance under U.S. GAAP and is effective for fiscal years beginning after December 31, 2017. The core principle contemplated by this new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount reflecting the consideration the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers are also required. In April and May 2016, the FASB also issued clarifying updates to the new standard specifically to address certain core principles including the identification of performance obligations, licensing guidance, the assessment of the collectability criterion, the presentation of taxes collected from customers, noncash considerations, contract modifications, and completed contracts at transition. We currently anticipate adopting the new revenue recognition standard using the modified retrospective approach in the fiscal year beginning January 1, 2018. This approach consists of recognizing the cumulative effect of initially applying the standard as an adjustment to opening retained earnings. As part of the modified retrospective approach, we will also amend our disclosures to reflect results under "legacy GAAP" for the initial year of adoption. We are currently evaluating the impact that the updated guidance will have on our financial statements and related disclosures. As part of the implementation process, we are holding regular meetings with key stakeholders from across the organization to discuss the impact of the standard on our existing contracts. We are utilizing a bottoms-up approach to analyze the impact of the standard on our portfolio of contracts by reviewing our current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to our existing revenue contracts. We expect to complete this evaluation prior to the fourth quarter of 2017. Inventory: In July 2015, the FASB issued new guidance which requires entities using the first-in, first-out inventory costing method to subsequently value inventory at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact of this guidance and assessing the impact on our consolidated financial statements. Leases: In February 2016, the FASB issued updated guidance modifying lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. This guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the provisions of the updated guidance and assessing the impact on our consolidated financial statements. Cash and Cash Equivalents, including Statement of Cash Flows and Restricted Cash: In November 2016, the FASB issued updated guidance requiring entities to explain, in their statements of cash flows, the change during the period in the total of cash, cash equivalents, and amounts generally described as "restricted cash" or "restricted cash equivalents". As a result, restricted cash and restricted cash equivalents must now be included within the total of cash and cash equivalents when reconciling the beginning and end of period totals show on the statement of cash flows. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the provisions of this update and assessing the impact on our consolidated financial statements. |
Summary of significant accounting policies (Tables) |
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Dec. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | A breakout of property, plant and equipment by type is presented below:
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Schedule of Accounts Payable and Accrued Liabilities | A breakout of accounts payable and accrued expenses by type is presented below:
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Schedule of Cash Flow, Supplemental Disclosures | Supplementary cash flow information, including non-cash investing and financing activities, are as follows:
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Acquisitions (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The purchase price was allocated to the tangible assets and identified intangible assets acquired based on their estimated fair values. As of the acquisition date, the purchase price assigned to the acquired assets and assumed liabilities is summarized as follows:
As of the acquisition date, the purchase price assigned to the acquired assets and assumed liabilities is summarized as follows:
As of the acquisition date, the purchase price assigned to the acquired assets and assumed liabilities is summarized as follows:
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Business Acquisition, Pro Forma Information | Pro forma information: The following table sets forth unaudited pro forma results of operations assuming the ReachLocal, NJMG and JMG acquisitions, along with transactions necessary to finance the acquisitions, occurred at the beginning of 2015:
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Restructuring activities and asset impairment charges (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | A summary of our liabilities related to employee termination actions by year is as follows:
A summary of our severance-related expenses by segment is as follows:
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Summary of Facility Consolidation and Asset Impairment Charges | A summary of these charges by year is presented below:
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Goodwill and other intangible assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill, Indefinite-Lived Intangible Assets, and Amortizable Intangible Assets | Goodwill, indefinite-lived intangible assets, and amortizable intangible assets consist of the following:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The projected annual amortization expense related to amortizable intangibles as of December 25, 2016 is as follows:
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Summary of the Change in Net Goodwill | The balances and changes in the carrying amount of goodwill by segment are as follows:
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Investments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||
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Dec. 25, 2016 | |||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||
Company's Investments Owned | We have a number of investments accounted for under the equity method. Principal among these are the following:
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Retirement plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Multiemployer Pension Plans Table |
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Retirement Plans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Defined Benefit Plans Disclosures | Our pension costs, which include costs for our qualified and non-qualified plans, are presented in the following table:
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Schedule of Changes in Projected Benefit Obligations | The following table provides a reconciliation of pension benefit obligations (on a projected benefit obligation measurement basis), plan assets and funded status, along with the related amounts that are recognized in the Consolidated Balance Sheets.
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Schedule of Net Funded Status | The funded status (on a projected benefit obligation basis) of our plans at December 25, 2016, is as follows:
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Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets | The following table presents information for our retirement plans for which accumulated benefits exceed assets:
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Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets | The following table presents information for our retirement plans for which projected benefit obligations exceed assets:
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Schedule of Net Periodic Benefit Cost Not yet Recognized | The following table summarizes the amounts recorded in "Accumulated other comprehensive loss" that are currently unrecognized as a component of pension expense for our retirement plans as of the dates presented (pre-tax).
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Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss) | Changes in plan assets and benefit obligations recognized in "Other comprehensive loss" consist of the following:
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Schedule of Assumptions Used | Pension costs: The following assumptions were used to determine net pension costs:
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Schedule Of Assumptions Used In Calculating Pension Benefit Obligations Table | Benefit obligations and funded status: The following assumptions were used to determine the year-end benefit obligations:
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Schedule of Allocation of Plan Assets | The asset allocation of our plans at the end of 2016 and 2015, and target allocations for 2017, by asset category, are presented in the table below:
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Schedule of Expected Benefit Payments | We estimate the following benefit payments will be made from retirement plan assets, which reflect expected future service, as appropriate. The amounts below represent the benefit payments for our plans.
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Postretirement benefits other than pensions (Tables) - Other Postretirement Benefit Plans, Defined Benefit |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefit Costs | Postretirement benefit cost for health care and life insurance included the following components:
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Reconciliation of Benefit Obligations, Plan Assets and Funded Status of Company-Sponsored Benefit Plans | The table below provides a reconciliation of benefit obligations and funded status of our postretirement benefit plans:
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Schedule of Net Periodic Benefit Cost Not yet Recognized | The following table summarizes the amounts recorded in "Accumulated other comprehensive loss" that are currently unrecognized as a component of net periodic postretirement benefit credit as of the dates presented (pre-tax):
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Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income | Changes in plan assets and benefit obligations recognized in "Other comprehensive loss" consist of the following:
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Assumptions Used to Determine Defined Benefit Plans Costs | Postretirement benefit costs: The following assumptions were used to determine postretirement benefit cost:
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Health Care Cost Trend Rates Assumptions Disclosure | Benefit obligations and funded status: The following assumptions were used to determine the year-end benefit obligation:
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Estimated Benefit Payments | Cash flows: We expect to make the following benefit payments, which reflect expected future service. The amounts below represent the benefit payments for our plans.
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Income taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision (Benefit) for Income Taxes on Income from Continuing Operations | The provision (benefit) for income taxes consists of the following:
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Components of Income (Loss) from Continuing Operations Attributable to Gannett Co., Inc. Before Income Taxes | The components of net income before income taxes consist of the following:
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Reconciliation of Effective Tax Rate | The provision for income taxes varies from the U.S. federal statutory tax rate as a result of the following differences:
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Deferred Tax Liabilities and Assets | Deferred tax liabilities and assets were composed of the following at the end of 2016 and 2015:
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Summary of Valuation Allowance | The following table summarizes the activity related to our valuation allowance for deferred tax assets for the year ended December 25, 2016:
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Summary of Activity Related to Unrecognized Tax Benefits, Excluding Federal Tax Benefit of State Tax Deductions | The following table summarizes the activity related to unrecognized tax benefits, excluding the federal tax benefit of state tax deductions:
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Supplemental equity information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity and Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share (Basic and Diluted) | Our earnings per share (basic and diluted) for each fiscal year is presented below:
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Assumptions Used to Estimate Fair Value of Option Awards | The following assumptions were used to estimate the fair value of performance share awards that were granted:
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Stock-Based Compensation Related Amounts Recognized in the Consolidated Statements of Income (Loss) for Equity Awards | The following table shows the stock-based compensation related amounts recognized in the Consolidated and Combined Statements of Income for equity awards:
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Summary of Restricted Stock and RSU Awards | A summary of restricted stock and RSU awards is presented below for the period after the date of separation from our former parent:
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Schedule of Nonvested Performance-based Units Activity | A summary of the performance shares awards is presented below for the period after the date of separation from our former parent:
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Summary of Stock Option Awards | A summary of our stock option awards is presented below:
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Schedule of Accumulated Other Comprehensive Income (Loss) | The following tables summarize the components of, and changes in, "Accumulated other comprehensive loss," net of tax:
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Reclassification out of Accumulated Other Comprehensive Income | Reclassifications out of "Accumulated other comprehensive loss" related to these postretirement plans include the following:
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Commitments, contingencies and other matters (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Dec. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Future Minimum Annual Rentals Payable Under Non-Cancelable Operating Leases | Leases: Future minimum lease commitments for non-cancellable operating leases (primarily real-estate) are as follows:
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Fair value measurement (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Pension Plan Assets by Level within Fair Value Hierarchy | The following tables set forth, by level within the fair value hierarchy, the fair values of our pension plans assets relating to the GRP, the Newsquest Plans and the Newspaper Guild of Detroit Pension Plan:
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Summary of Changes in Fair Value of Pension Plan Assets and Liabilities, Categorized as Level 3 | The following tables set forth a summary of changes in the fair value of our pension plan assets and liabilities that are categorized as Level 3:
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Fair Value Measurements, Nonrecurring | The following table summarize the non-financial assets measured at fair value on nonrecurring basis in the accompanying Consolidated Balance Sheet:
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Segment reporting (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The following presents our segment information by year:
The following table presents our reconciliation of Adjusted EBITDA to net income:
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Relationship with our former parent (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transactions with Former Parent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Transactions with Former Parent | These allocated costs, net of cost recoveries, are summarized in the following table:
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Quarterly statement of income (Tables) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information | Selected unaudited financial data for each quarter of the last two fiscal years is presented as follows:
|
Summary of significant accounting policies - Property, Plant and Equipment (Details) - USD ($) $ in Thousands |
Dec. 25, 2016 |
Dec. 27, 2015 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 2,569,598 | $ 2,542,569 |
Accumulated depreciation | (1,481,897) | (1,645,984) |
Net property, plant and equipment | 1,087,701 | 896,585 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 132,438 | 84,059 |
Buildings and Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 875,313 | 752,849 |
Machinery, equipment and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 1,552,030 | 1,687,875 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 9,817 | $ 17,786 |
Summary of significant accounting policies - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands |
Dec. 25, 2016 |
Dec. 27, 2015 |
---|---|---|
Accounting Policies [Abstract] | ||
Compensation | $ 105,402 | $ 115,602 |
Taxes | 22,995 | 23,644 |
Benefits | 36,114 | 38,811 |
Other | 90,943 | 69,964 |
Total accrued liabilities | 255,454 | 248,021 |
Accounts payable | 183,270 | 145,005 |
Total accrued liabilities and accounts payable | $ 438,724 | $ 393,026 |
Summary of significant accounting policies - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
1 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2015 |
Dec. 25, 2016 |
Dec. 27, 2015 |
|
Business Acquisition [Line Items] | |||
Pre-acquisition carrying value of TNP | $ 7,500 | $ 7,900 | |
Cash paid for taxes, net of refunds | 25,719 | 38,707 | |
Cash paid for interest | 10,081 | 2,995 | |
Accrued capital expenditures | 5,639 | 3,251 | |
Dividends payable | 0 | 18,501 | |
Parent, net investment activity subsequent to separation | 0 | 31,762 | |
Fair value of noncontrolling equity interests in TNP and CNP | 0 | 60,954 | |
Texas-New Mexico Newspapers Partnership (TNP) | |||
Business Acquisition [Line Items] | |||
Pre-acquisition carrying value of TNP | $ 0 | $ 39,155 | |
Fair value of noncontrolling equity interests in TNP and CNP | $ 26,600 |
Acquisitions - Pro Forma Information (Details) - Journal Media Group, Inc. (JMG) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
|
Business Acquisition [Line Items] | ||
Total revenues | $ 3,409,111 | $ 3,800,074 |
Net income | $ 47,485 | $ 65,038 |
Earnings per share - diluted (in dollars per share) | $ 0.40 | $ 0.56 |
Restructuring activities and asset impairment charges - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 43,526 | $ 72,266 | $ 19,797 |
Impairment of finite-lived intangible assets | 9,900 | 18,500 | |
Other Severance Activities | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 42,689 | 30,185 | 19,797 |
USA Today Early Retirement Opportunity Program (EROP) | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 800 | 42,100 | |
Cost of Sales and Operating Expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 35,900 | 59,300 | 15,600 |
Selling, General and Administrative Expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 7,600 | 13,000 | 4,200 |
Mastheads | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment of indefinite-lived intangible assets | $ 14,500 | $ 900 | $ 1,700 |
Goodwill and other intangible assets - Narrative (Detail) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Amortization | $ 14,872,000 | $ 11,636,000 | $ 13,885,000 |
Goodwill impairments | $ 0 | $ 0 | $ 0 |
Customer Relationships | Weighted Average | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average useful life | 8 years 4 months 24 days | ||
Developed Technology | Weighted Average | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average useful life | 2 years 8 months 12 days | ||
Other | Weighted Average | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average useful life | 3 years 8 months 12 days |
Goodwill and other intangible assets - Future Annual Amortization Expense (Details) $ in Thousands |
Dec. 25, 2016
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2017 | $ 28,183 |
2018 | 28,134 |
2019 | 20,918 |
2020 | 8,021 |
2021 | $ 5,312 |
Investments - Narrative (Detail) - USD ($) $ in Millions |
Dec. 25, 2016 |
Dec. 27, 2015 |
---|---|---|
Equity Method Investments and Joint Ventures [Abstract] | ||
Aggregate carrying value of equity investments | $ 7.5 | $ 7.9 |
Other investments | $ 6.7 | $ 0.0 |
Retirement plans - Pension Costs (Detail) - Retirement Plans - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost—benefits earned during the period | $ 3,066 | $ 7,993 | $ 4,498 |
Interest cost on benefit obligation | 125,903 | 131,149 | 145,433 |
Expected return on plan assets | (183,697) | (196,774) | (206,164) |
Amortization of prior service costs | 6,677 | 6,893 | 6,967 |
Amortization of actuarial loss | 61,740 | 56,722 | 41,728 |
Pension cost (benefit) for our plans and our allocated portions of former parent-sponsored retirement plans | 13,689 | 5,983 | (7,538) |
Participant data corrections | (145) | 0 | 0 |
Settlement charge | (49) | 1,254 | 0 |
Expense (credit) for retirement plans | $ 13,495 | $ 7,237 | $ (7,538) |
Retirement plans - Benefit Obligations and Fair Value of Plan Assets (Details) - USD ($) $ in Thousands |
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
---|---|---|---|
Defined Benefit Plan Disclosure [Line Items] | |||
Projected benefit obligation | $ 3,161,581 | ||
Fair value of plan assets | 2,411,007 | ||
Retirement Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation | 3,153,811 | $ 3,179,094 | |
Projected benefit obligation | 3,161,581 | 3,184,795 | $ 3,433,581 |
Fair value of plan assets | $ 2,411,007 | $ 2,558,627 | $ 2,654,889 |
Retirement plans - Amounts included in AOCI (Details) - Retirement Plans - USD ($) $ in Thousands |
Dec. 25, 2016 |
Dec. 27, 2015 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial losses | $ (1,825,167) | $ (1,613,939) |
Prior service cost | (29,263) | (35,451) |
Amounts in accumulated other comprehensive loss | $ (1,854,430) | $ (1,649,390) |
Retirement plans - Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Comprehensive Income (Loss) [Line Items] | |||
Current year actuarial loss | $ (334,653) | $ (54,142) | $ (429,402) |
Change in prior service cost | (1,002) | 0 | 36,873 |
Actuarial gain due to settlement | (49) | 1,254 | 0 |
Amortization of actuarial loss | 62,155 | 58,148 | 42,446 |
Amortization of prior service costs | 1,883 | (2,722) | (4,454) |
Pension and other postretirement benefit items | (203,707) | $ 42,262 | $ (330,903) |
Retirement Plans | |||
Comprehensive Income (Loss) [Line Items] | |||
Current year actuarial loss | 333,460 | ||
Change in prior service cost | 500 | ||
Actuarial gain due to settlement | 49 | ||
Amortization of actuarial loss | (61,740) | ||
Amortization of prior service costs | (6,677) | ||
Foreign currency gain | (68,620) | ||
Participant data corrections | 8,070 | ||
Pension and other postretirement benefit items | $ 205,042 |
Retirement plans - Assumptions Used to Determine Defined Benefit Plans Costs (Detail) - Retirement Plans |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate (as a percent) | 4.24% | 4.17% | 4.74% |
Expected return on plan assets (as a percent) | 7.60% | 7.63% | 7.91% |
Rate of compensation increase (as a percent) | 2.95% | 2.95% | 2.96% |
Retirement plans - Assumptions Used to Determine Pension Year-End Benefit Obligations (Detail) - Retirement Plans |
Dec. 25, 2016 |
Dec. 27, 2015 |
---|---|---|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Discount rate (as a percent) | 3.63% | 4.24% |
Rate of compensation increase (as a percent) | 2.95% | 2.96% |
Retirement plans - Asset Allocation and Target Allocations by Asset Category (Detail) - Retirement Plans |
12 Months Ended | |
---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Target allocation (as a percent) | 100.00% | |
Allocation of Plan Assets (as a percent) | 100.00% | 100.00% |
Equity securities | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Target allocation (as a percent) | 47.00% | |
Allocation of Plan Assets (as a percent) | 44.00% | 53.00% |
Debt securities | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Target allocation (as a percent) | 35.00% | |
Allocation of Plan Assets (as a percent) | 38.00% | 24.00% |
Alternative investments | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Target allocation (as a percent) | 18.00% | |
Allocation of Plan Assets (as a percent) | 18.00% | 23.00% |
Retirement plans - Estimated Benefit Payments (Detail) - Retirement Plans $ in Thousands |
Dec. 25, 2016
USD ($)
|
---|---|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2017 | $ 195,190 |
2018 | 191,231 |
2019 | 190,887 |
2020 | 187,341 |
2021 | 184,548 |
2022-2026 | $ 882,207 |
Postretirement benefits other than pensions - Narrative (Detail) - Other Postretirement Benefit Plans, Defined Benefit - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial losses | $ (4,472) | $ (12,611) |
Prior service credit | 22,711 | 29,515 |
Amounts in accumulated other comprehensive loss | 18,239 | $ 16,904 |
Actuarial loss estimated to be amortized from accumulated other comprehensive loss into net periodic benefit cost | 600 | |
Prior service cost (credit) estimated to be amortized from accumulated other comprehensive loss into net periodic benefit cost | $ 3,600 | |
Percentage of change in the health care cost trend rate | 1.00% | |
Effect on postretirement benefit obligation of a 1% change in the health care cost trend rate | $ 700 |
Postretirement benefits other than pensions - Health Care and Life Insurance (Details) - Other Postretirement Benefit Plans, Defined Benefit - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | $ 202 | $ 301 | $ 365 |
Interest cost on benefit obligation | 4,038 | 4,019 | 4,610 |
Amortization of prior service credit | (4,794) | (9,615) | (11,421) |
Amortization of actuarial loss | 415 | 1,426 | 718 |
Participant data corrections | (350) | 0 | 0 |
Pension cost (benefit) for our plans and our allocated portions of former parent-sponsored retirement plans | $ (489) | $ (3,869) | $ (5,728) |
Postretirement benefits other than pensions - Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Comprehensive Income (Loss) [Line Items] | |||
Current year actuarial loss | $ (334,653) | $ (54,142) | $ (429,402) |
Change in prior service cost | 1,002 | 0 | (36,873) |
Amortization of actuarial loss | 62,155 | 58,148 | 42,446 |
Amortization of prior service credit | 1,883 | (2,722) | (4,454) |
Pension and other postretirement benefit items | (203,707) | $ 42,262 | $ (330,903) |
Other Postretirement Benefit Plans, Defined Benefit | |||
Comprehensive Income (Loss) [Line Items] | |||
Current year actuarial loss | 1,193 | ||
Change in prior service cost | 502 | ||
Amortization of actuarial loss | (415) | ||
Amortization of prior service credit | 4,794 | ||
Participant data corrections | (7,409) | ||
Pension and other postretirement benefit items | $ (1,335) |
Postretirement benefits other than pensions - Assumptions Used to Determine Postretirement Cost (Detail) - Other Postretirement Benefit Plans, Defined Benefit |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate (as a percent) | 4.27% | 4.11% | 4.50% |
Health care cost trend rate assumed for next year (as a percent) | 5.70% | 6.18% | 6.26% |
Ultimate trend rate (as a percent) | 4.77% | 5.00% | 5.00% |
Year that ultimate trend rate is reached | 2019 | 2018 | 2018 |
Postretirement benefits other than pensions - Assumptions Used to Determine Year-End Benefit Obligations (Detail) - Other Postretirement Benefit Plans, Defined Benefit |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate (as a percent) | 4.01% | 4.35% | |
Health care cost trend rate assumed for next year (as a percent) | 5.70% | 6.18% | |
Ultimate trend rate (as a percent) | 4.77% | 5.00% | 5.00% |
Year that ultimate trend rate is reached | 2019 | 2018 | 2018 |
Postretirement benefits other than pensions - Expected Benefit Payments and Subsidy Benefits (Detail) - Other Postretirement Benefit Plans, Defined Benefit $ in Thousands |
Dec. 25, 2016
USD ($)
|
---|---|
Benefit Payments | |
2017 | $ 9,527 |
2018 | 9,173 |
2019 | 8,664 |
2020 | 7,988 |
2021 | 7,459 |
2022-2026 | $ 32,159 |
Income taxes - Provision (Benefit) for Income Taxes on Income from Continuing Operations (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Current | |||
Federal | $ (7,094) | $ (5,383) | $ 39,740 |
State and other | (528) | (560) | (21,123) |
Foreign | 5,606 | 6,447 | 0 |
Total | (2,016) | 504 | 18,617 |
Deferred | |||
Federal | 8,278 | 36,489 | 18,282 |
State and other | 262 | 4,046 | 27,731 |
Foreign | 7,194 | 6,845 | 2,930 |
Total | 15,734 | 47,380 | 48,943 |
Total | |||
Federal | 1,184 | 31,106 | 58,022 |
State and other | (266) | 3,486 | 6,608 |
Foreign | 12,800 | 13,292 | 2,930 |
Total | $ 13,718 | $ 47,884 | $ 67,560 |
Income taxes - Components of Income (Loss) from Continuing Operations Attributable to Gannett Co., Inc. Before Income Taxes (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Income Tax Disclosure [Abstract] | |||
Domestic | $ 19,349 | $ 128,316 | $ 192,741 |
Foreign | 47,079 | 65,659 | 85,524 |
Total | $ 66,428 | $ 193,975 | $ 278,265 |
Income taxes - Reconciliation of Effective Tax Rate (Detail) |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Income Tax Disclosure [Abstract] | |||
U.S. statutory tax rate | 35.00% | 35.00% | 35.00% |
Increase (decrease) in taxes resulting from: | |||
State/other income taxes net of federal income tax | (3.80%) | 2.40% | 2.50% |
Statutory rate differential and permanent differences in earnings in foreign jurisdictions | (10.70%) | (6.30%) | (13.40%) |
Impact of rate change in foreign tax jurisdiction | 1.60% | 1.90% | 0.00% |
Valuation allowance | 3.50% | 0.00% | 4.40% |
Net of additional reserves and lapse of statutes of limitations | 3.30% | (1.10%) | (0.90%) |
Impact of accounting method change | 0.00% | (3.40%) | 0.00% |
Domestic manufacturing deduction | (0.00%) | (1.40%) | (1.90%) |
Stock-based compensation | (12.30%) | 0.00% | 0.00% |
Transaction costs | 3.40% | 0.00% | 0.00% |
Other, net | 0.70% | (2.40%) | (1.40%) |
Effective tax rate | 20.70% | 24.70% | 24.30% |
Income taxes - Deferred Tax Liabilities and Assets (Detail) - USD ($) $ in Thousands |
Dec. 25, 2016 |
Dec. 27, 2015 |
---|---|---|
Liabilities | ||
Accelerated depreciation | $ (152,551) | $ (169,483) |
Total deferred tax liabilities | (152,551) | (169,483) |
Assets | ||
Accrued compensation costs | 29,670 | 38,296 |
Pension and postretirement benefits | 302,565 | 256,418 |
Basis difference and amortization of intangibles | 95,653 | 165,062 |
Federal tax benefits of uncertain state tax positions | 7,015 | 7,506 |
Partnership investments including impairments | 21,670 | 13,107 |
Loss carryforwards | 55,335 | 34,312 |
Other | 53,789 | 38,666 |
Total deferred tax assets | 565,697 | 553,367 |
Valuation allowance | (194,914) | (181,893) |
Total net deferred tax assets (liabilities) | 218,232 | 201,991 |
Noncurrent deferred tax assets | $ 218,232 | $ 201,991 |
Income taxes - Summary of Valuation Allowance (Details) - Valuation Allowance of Deferred Tax Assets $ in Thousands |
12 Months Ended |
---|---|
Dec. 25, 2016
USD ($)
| |
Movement in Valuation Allowances and Reserves [Roll Forward] | |
Balance at Beginning of Period | $ 181,893 |
Additions/(Reductions) Charged to Expenses | (4,786) |
Additions/(Reductions) for Acquisitions/Dispositions | 27,251 |
Other (Deductions from)/Additions to Reserves | (3,394) |
Foreign Currency Translation | (6,050) |
Balance at End of Period | $ 194,914 |
Income taxes - Summary of Activity Related to Unrecognized Tax Benefits, Excluding Federal Tax Benefit of State Tax Deductions (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of year | $ 17,032 | $ 10,919 | $ 13,875 |
Additions based on tax positions related to the current year | 125 | 2,021 | 1,768 |
Additions for tax positions of prior years | 9,416 | 6,713 | 545 |
Reductions for tax positions of prior years | (792) | 0 | (2,398) |
Settlements | 0 | 0 | (36) |
Reductions due to lapse of statutes of limitations | (1,891) | (2,621) | (2,835) |
Balance at end of year | $ 23,890 | $ 17,032 | $ 10,919 |
Supplemental equity information - Earnings (Loss) Per Share (Basic and Diluted) (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 25, 2016 |
Sep. 25, 2016 |
Jun. 26, 2016 |
Mar. 27, 2016 |
Dec. 27, 2015 |
Sep. 27, 2015 |
Jun. 28, 2015 |
Mar. 29, 2015 |
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 24,594 | $ (23,961) | $ 12,481 | $ 39,596 | $ 20,351 | $ 39,166 | $ 53,327 | $ 33,247 | $ 52,710 | $ 146,091 | $ 210,705 |
Weighted average number of common shares outstanding (basic) | 114,688 | 116,556 | 116,516 | 116,311 | 115,555 | 115,186 | 114,959 | 114,959 | 116,018 | 115,165 | 114,959 |
Effect of dilutive securities | |||||||||||
Weighted average number of common shares outstanding (diluted) | 117,053 | 116,556 | 119,377 | 119,059 | 118,694 | 118,168 | 114,959 | 114,959 | 118,625 | 116,695 | 114,959 |
Earnings per share (basic) (in dollars per share) | $ 0.21 | $ (0.21) | $ 0.11 | $ 0.34 | $ 0.18 | $ 0.34 | $ 0.46 | $ 0.29 | $ 0.45 | $ 1.27 | $ 1.83 |
Earnings per share (diluted) (in dollars per share) | $ 0.21 | $ (0.21) | $ 0.10 | $ 0.33 | $ 0.17 | $ 0.33 | $ 0.46 | $ 0.29 | $ 0.44 | $ 1.25 | $ 1.83 |
Restricted stock units (RSUs) | |||||||||||
Effect of dilutive securities | |||||||||||
Effect of dilutive securities (in shares) | 1,475 | 728 | 0 | ||||||||
Performance shares (PSUs) | |||||||||||
Effect of dilutive securities | |||||||||||
Effect of dilutive securities (in shares) | 881 | 582 | 0 | ||||||||
Stock options | |||||||||||
Effect of dilutive securities | |||||||||||
Effect of dilutive securities (in shares) | 251 | 220 | 0 |
Supplemental equity information - Assumptions Used to Estimate Fair Value of Option Awards (Detail) - Performance shares (PSUs) |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 3 years | 3 years | 3 years |
Expected volatility (as a percent) | 42.20% | 32.00% | 39.32% |
Risk free interest rate (as a percent) | 1.31% | 1.10% | 0.78% |
Expected dividend yield (as a percent) | 3.93% | 2.51% | 2.70% |
Supplemental equity information - Stock-Based Compensation Related Amounts Recognized in the Consolidated Statements of Income (Loss) for Equity Awards (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 20,576 | $ 21,742 | $ 17,099 |
Restricted stock and RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 12,889 | 12,235 | 9,150 |
Performance shares (PSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 7,687 | 9,478 | 7,333 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 0 | $ 29 | $ 616 |
Supplemental equity information - Summary of Restricted Stock and RSU Awards (Detail) - Restricted stock and RSUs - $ / shares |
6 Months Ended | 12 Months Ended |
---|---|---|
Dec. 27, 2015 |
Dec. 25, 2016 |
|
Shares | ||
Outstanding and unvested at June 29, 2015 (in shares) | 2,885,994 | 2,778,207 |
Granted (in shares) | 203,061 | 1,483,127 |
Settled (in shares) | (136,658) | (1,066,056) |
Canceled (in shares) | (174,190) | (376,442) |
Outstanding and unvested at end of year (in shares) | 2,778,207 | 2,818,836 |
Weighted average fair value | ||
Outstanding and unvested at June 29, 2015 (in dollars per shares) | $ 10.86 | $ 10.91 |
Granted (in dollars per share) | 11.31 | 13.36 |
Settled (in dollars per share) | 10.35 | 10.06 |
Canceled (in dollars per share) | 10.98 | 11.81 |
Outstanding and unvested at end of year (in dollars per shares) | $ 10.91 | $ 12.40 |
Supplemental equity information - Summary of Performance Shares (Details) - Performance shares (PSUs) - $ / shares |
6 Months Ended | 12 Months Ended |
---|---|---|
Dec. 27, 2015 |
Dec. 25, 2016 |
|
Shares | ||
Outstanding and unvested at June 29, 2015 (in shares) | 926,138 | 793,674 |
Granted (in shares) | 373,658 | |
Vested (in shares) | (31,158) | (265,110) |
Canceled (in shares) | (101,306) | (128,075) |
Outstanding and unvested at end of year (in shares) | 793,674 | 774,147 |
Weighted average fair value | ||
Outstanding and unvested at June 29, 2015 (in dollars per shares) | $ 15.48 | $ 15.52 |
Granted (in dollars per share) | 19.30 | |
Vested (in dollars per shares) | 15.51 | 13.83 |
Canceled (in dollars per share) | 15.21 | 16.34 |
Outstanding and unvested at end of year (in dollars per shares) | $ 15.52 | $ 17.82 |
Supplemental equity information - Summary of Stock-Option Awards (Detail) - USD ($) |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 27, 2015 |
Jun. 28, 2015 |
Dec. 25, 2016 |
|
Shares | |||
Outstanding at June 29, 2015 (in shares) | 1,078,289 | 411,883 | |
Exercised (in shares) | (662,304) | (102,842) | |
Canceled (in shares) | (4,102) | (18,774) | |
Outstanding and exercisable at end of year (in shares) | 411,883 | 1,078,289 | 290,267 |
Weighted Average Exercise Price | |||
Outstanding at June 29, 2015 (in dollars per shares) | $ 6.80 | $ 5.58 | |
Exercised (in dollars per shares) | 7.53 | 5.46 | |
Canceled (in dollars per share) | 12.61 | 9.40 | |
Outstanding and exercisable at end of year (in dollars per shares) | $ 5.58 | $ 6.80 | $ 5.37 |
Weighted average remaining contractual term | |||
Weighted Average Remaining Contractual Term (in years) | 2 years 7 months 6 days | 2 years 6 months | 1 year 10 months 28 days |
Aggregate intrinsic value | |||
Aggregate Intrinsic Value | $ 4,378,900 | $ 7,901,831 | $ 1,304,798 |
Commitments, contingencies and other matters - Future Minimum Annual Rentals Payable Under Non-Cancelable Operating Leases (Detail) $ in Thousands |
Dec. 25, 2016
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2017 | $ 53,071 |
2018 | 51,313 |
2019 | 45,855 |
2020 | 40,401 |
2021 | 37,615 |
Later years | 166,996 |
Total | $ 395,251 |
Fair value measurement - Summary of the Non-Financial Assets Measured at Fair Value on Nonrecurring Basis (Details) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands |
Dec. 25, 2016 |
Dec. 27, 2015 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset held for sale - Quarter 4 | $ 4,522 | $ 12,288 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset held for sale - Quarter 4 | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset held for sale - Quarter 4 | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset held for sale - Quarter 4 | $ 4,522 | $ 12,288 |
Segment reporting (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 25, 2016 |
Sep. 25, 2016 |
Jun. 26, 2016 |
Mar. 27, 2016 |
Dec. 27, 2015 |
Sep. 27, 2015 |
Jun. 28, 2015 |
Mar. 29, 2015 |
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Segment Reporting Information [Line Items] | |||||||||||
Advertising | $ 1,703,795 | $ 1,611,445 | $ 1,840,067 | ||||||||
Circulation | 1,133,676 | 1,060,118 | 1,109,729 | ||||||||
Other | 210,003 | 213,449 | 222,082 | ||||||||
Total operating revenues | $ 866,994 | $ 772,321 | $ 748,791 | $ 659,368 | $ 739,344 | $ 701,236 | $ 727,072 | $ 717,360 | 3,047,474 | 2,885,012 | 3,171,878 |
Adjusted EBITDA | 349,613 | 391,515 | 472,211 | ||||||||
Operating Segments | Publishing | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Advertising | 1,603,515 | 1,611,445 | 1,840,067 | ||||||||
Circulation | 1,133,676 | 1,060,118 | 1,109,729 | ||||||||
Other | 195,904 | 209,655 | 222,082 | ||||||||
Total operating revenues | 2,933,095 | 2,881,218 | 3,171,878 | ||||||||
Adjusted EBITDA | 449,769 | 468,999 | 498,260 | ||||||||
Operating Segments | ReachLocal, Inc. | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Advertising | 100,280 | 0 | 0 | ||||||||
Circulation | 0 | 0 | 0 | ||||||||
Other | 9,864 | 0 | 0 | ||||||||
Total operating revenues | 110,144 | 0 | 0 | ||||||||
Adjusted EBITDA | (5,852) | 0 | 0 | ||||||||
Corporate | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Advertising | 0 | 0 | 0 | ||||||||
Circulation | 0 | 0 | 0 | ||||||||
Other | 4,235 | 3,794 | 0 | ||||||||
Total operating revenues | 4,235 | 3,794 | 0 | ||||||||
Adjusted EBITDA | $ (94,304) | $ (77,484) | $ (26,049) |
Segment reporting - Reconciliation of EBITDA to Operating Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 25, 2016 |
Sep. 25, 2016 |
Jun. 26, 2016 |
Mar. 27, 2016 |
Dec. 27, 2015 |
Sep. 27, 2015 |
Jun. 28, 2015 |
Mar. 29, 2015 |
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Segment Reporting [Abstract] | |||||||||||
Net income | $ 24,594 | $ (23,961) | $ 12,481 | $ 39,596 | $ 20,351 | $ 39,166 | $ 53,327 | $ 33,247 | $ 52,710 | $ 146,091 | $ 210,705 |
Provision for income taxes | 13,718 | 47,884 | 67,560 | ||||||||
Equity income in unconsolidated investees, net | (1,519) | (11,981) | (15,857) | ||||||||
Interest expense | 12,791 | 4,562 | 576 | ||||||||
Other non-operating items, net | 1,388 | (17,125) | (653) | ||||||||
Operating income | $ 36,186 | $ (28,590) | $ 24,033 | $ 47,459 | $ 38,513 | $ 52,113 | $ 48,994 | $ 29,811 | 79,088 | 169,431 | 262,331 |
Early retirement program | 837 | 42,081 | 0 | ||||||||
Severance-related charges | 42,689 | 30,185 | 19,797 | ||||||||
Acquisition-related expenses | 32,683 | 0 | 0 | ||||||||
Facility consolidation and asset impairment charges | 58,171 | 34,278 | 35,216 | ||||||||
Other items | 3,181 | 7,988 | 43,804 | ||||||||
Depreciation | 118,092 | 95,916 | 97,178 | ||||||||
Amortization | 14,872 | 11,636 | 13,885 | ||||||||
Adjusted EBITDA (non-GAAP basis) | $ 349,613 | $ 391,515 | $ 472,211 |
Relationship with our former parent - Allocated Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
Schedule of Transactions with Former Parent [Line Items] | |||
Corporate allocations | $ 807,398 | $ 707,022 | $ 765,465 |
Depreciation | 118,092 | 95,916 | 97,178 |
Other support costs | $ 3,181 | 7,988 | 43,804 |
Former Parent | |||
Schedule of Transactions with Former Parent [Line Items] | |||
Corporate allocations | 25,832 | 60,628 | |
Occupancy | 2,884 | 5,642 | |
Depreciation | 4,067 | 7,960 | |
Other support costs | 6,249 | 15,743 | |
Cost recoveries | (6,055) | (9,501) | |
Total | $ 32,977 | $ 80,472 |
Relationship with our former parent - Narrative (Details) - Former Parent - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 25, 2016 |
Dec. 27, 2015 |
|
Schedule of Transactions with Former Parent [Line Items] | ||
Transfer services agreement, term | 24 months | |
IT, payroll, and other services provided for former parent | $ 6.3 | $ 5.9 |
Services provided by former parent | $ 5.7 | $ 3.7 |
Quarterly statement of income (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 25, 2016 |
Sep. 25, 2016 |
Jun. 26, 2016 |
Mar. 27, 2016 |
Dec. 27, 2015 |
Sep. 27, 2015 |
Jun. 28, 2015 |
Mar. 29, 2015 |
Dec. 25, 2016 |
Dec. 27, 2015 |
Dec. 28, 2014 |
|
New Accounting Pronouncement, Early Adoption [Line Items] | |||||||||||
Income tax expense (benefit) | $ (13,718) | $ (47,884) | $ (67,560) | ||||||||
Operating revenues | $ 866,994 | $ 772,321 | $ 748,791 | $ 659,368 | $ 739,344 | $ 701,236 | $ 727,072 | $ 717,360 | 3,047,474 | 2,885,012 | 3,171,878 |
Operating income | 36,186 | (28,590) | 24,033 | 47,459 | 38,513 | 52,113 | 48,994 | 29,811 | 79,088 | 169,431 | 262,331 |
Net income | $ 24,594 | $ (23,961) | $ 12,481 | $ 39,596 | $ 20,351 | $ 39,166 | $ 53,327 | $ 33,247 | $ 52,710 | $ 146,091 | $ 210,705 |
Per share computations | |||||||||||
Net income per share-basic (in dollars per share) | $ 0.21 | $ (0.21) | $ 0.11 | $ 0.34 | $ 0.18 | $ 0.34 | $ 0.46 | $ 0.29 | $ 0.45 | $ 1.27 | $ 1.83 |
Net income per share-diluted (in dollars per share) | 0.21 | (0.21) | 0.10 | 0.33 | 0.17 | 0.33 | 0.46 | 0.29 | 0.44 | 1.25 | $ 1.83 |
Dividends declared, per share (in dollars per share) | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0 | $ 0 | $ 0.64 | $ 0.32 | |
Weighted average number of shares outstanding | |||||||||||
Weighted average number of common shares outstanding (basic) | 114,688,000 | 116,556,000 | 116,516,000 | 116,311,000 | 115,555,000 | 115,186,000 | 114,959,000 | 114,959,000 | 116,018,000 | 115,165,000 | 114,959,000 |
Weighted average number of common shares outstanding (diluted) | 117,053,000 | 116,556,000 | 119,377,000 | 119,059,000 | 118,694,000 | 118,168,000 | 114,959,000 | 114,959,000 | 118,625,000 | 116,695,000 | 114,959,000 |
Accounting Standards Update 2016-09 | Early Adoption, Effect | |||||||||||
New Accounting Pronouncement, Early Adoption [Line Items] | |||||||||||
Income tax expense (benefit) | $ 300 | $ 200 | $ 8,300 | $ 8,900 | |||||||
Effect of dilutive securities (in shares) | 422 | 403 |
Subsequent events (Details) - $ / shares |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 22, 2017 |
Dec. 25, 2016 |
Sep. 25, 2016 |
Jun. 26, 2016 |
Mar. 27, 2016 |
Dec. 27, 2015 |
Sep. 27, 2015 |
Jun. 28, 2015 |
Mar. 29, 2015 |
Dec. 25, 2016 |
Dec. 27, 2015 |
|
Subsequent Event [Line Items] | |||||||||||
Dividends declared, per share (in dollars per share) | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0 | $ 0 | $ 0.64 | $ 0.32 | |
Subsequent Event | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Dividends declared, per share (in dollars per share) | $ 0.16 |
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