Document and Entity Information - USD ($) |
12 Months Ended | ||
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Dec. 26, 2010 |
Jan. 30, 2011 |
Jun. 25, 2010 |
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Document and Entity Information [Abstract] | |||
Entity Registrant Name | GANNETT CO INC /DE/ | ||
Entity Central Index Key | 0000039899 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 26, 2010 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2010 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-26 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 3,544,790,597 | ||
Entity Common Stock, Shares Outstanding | 239,686,303 |
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- Definition If the value is true, then the document as an amendment to previously-filed/accepted document. No definition available.
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- Definition End date of current fiscal year in the format --MM-DD. No definition available.
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- Definition This is focus fiscal period of the document report. For a first quarter 2006 quarterly report, which may also provide financial information from prior periods, the first fiscal quarter should be given as the fiscal period focus. Values: FY, Q1, Q2, Q3, Q4, H1, H2, M9, T1, T2, T3, M8, CY. No definition available.
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- Definition This is focus fiscal year of the document report in CCYY format. For a 2006 annual report, which may also provide financial information from prior periods, fiscal 2006 should be given as the fiscal year focus. Example: 2006. No definition available.
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- Definition The end date of the period reflected on the cover page if a periodic report. For all other reports and registration statements this will be the filing date. The format of the date is CCYY-MM-DD. No definition available.
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- Definition The type of document being provided (such as 10-K, 10-Q, N-1A, etc). The document type should be limited to the same value as the supporting SEC submission type. The acceptable values are as follows: S-1, S-3, S-4, S-11, F-1, F-3, F-4, F-9, F-10, 6-K, 8-K, 10, 10-K, 10-Q, 20-F, 40-F, N-1A, 485BPOS, NCSR, N-Q, and Other. No definition available.
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- Definition Indicate number of shares outstanding of each of registrant's classes of common stock, as of latest practicable date. Where multiple classes exist define each class by adding class of stock items such as Common Class A [Member], Common Class B [Member] onto the Instrument [Domain] of the Entity Listings, Instrument No definition available.
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- Definition Indicate "Yes" or "No" whether registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. This information should be based on the registrant's current or most recent filing containing the related disclosure. No definition available.
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- Definition Indicate whether the registrant is one of the following: (1) Large Accelerated Filer, (2) Accelerated Filer, (3) Non-accelerated Filer, or (4) Smaller Reporting Company. Definitions of these categories are stated in Rule 12b-2 of the Exchange Act. This information should be based on the registrant's current or most recent filing containing the related disclosure. No definition available.
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- Definition State aggregate market value of voting and non-voting common equity held by non-affiliates computed by reference to price at which the common equity was last sold, or average bid and asked price of such common equity, as of the last business day of registrant's most recently completed second fiscal quarter. The public float should be reported on the cover page of the registrants form 10K. No definition available.
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- Definition The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Indicate "Yes" or "No" if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. No definition available.
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- Definition Indicate "Yes" or "No" if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Is used on Form Type: 10-K, 10-Q, 8-K, 20-F, 6-K, 10-K/A, 10-Q/A, 20-F/A, 6-K/A, N-CSR, N-Q, N-1A. No definition available.
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- Definition This item represents the carrying amount on the entity's balance sheet of its investments in common stock of equity method investees. This is not an indicator of the fair value of the investments, rather it is the initial cost adjusted for the entity's share of earnings and losses of the investees, adjusted for any distributions (dividends) and other than temporary impairment losses recognized as well as the aggregate carrying amount of all cost-method investments as reported on or included in the balance sheet. The original cost of the investments may differ from the aggregate carrying amount disclosed due to various adjustments such as: (i) dividends received in excess of earnings after the date of investment that are considered a return of investment and therefore recorded as reductions to cost of the investment, or (ii) a series of operating losses of an investee or other factors which may indicate that a decrease in value of the investment has occurred which is other than temporary and should accordingly be recognized. This item includes assets held under deferred compensation agreements and the carrying amount as of the balance sheet date of amounts which could be received based on the terms of the insurance contract upon surrendering life policies owned by the entity. This item also includes amounts for overfunded plans recognized in the balance sheet as a noncurrent asset associated with a defined benefit pension plan or other postretirement defined benefit plan. No definition available.
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- Definition Aggregate carrying amount, as of the balance sheet date, of current assets not separately presented elsewhere in the balance sheet. Current assets are expected to be realized or consumed within one year (or the normal operating cycle, if longer) in addition to sum of the amounts paid in advance for capitalized costs that will be expensed with the passage of time or the occurrence of a triggering event, and will be charged against earnings within one year or the normal operating cycle, if longer. No definition available.
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- Definition Total of stockholders' equity items including portions attributable both to the parent and noncontrolling interest (previously referred to as minority interest), excluding treasury stock. No definition available.
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- Definition Sum of the carrying amounts as of the balance sheet date of goodwill, indefinite-lived and amortizable intangible assets, less accumulated amortization, deferred income taxes, and investments and other assets. No definition available.
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Consolidated Balance Sheets (Parenthetical) - USD ($) |
Dec. 26, 2010 |
Dec. 27, 2009 |
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Current assets | ||
Allowance for doubtful receivables | $ 39,419,000 | $ 46,255,000 |
Intangible and other assets | ||
Accumulated amortization on indefinite-lived and amortizable intangible assets | 197,454,000 | 170,182,000 |
Gannett Co., Inc. shareholders' equity | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Common stock, shares issued | 324,418,632 | 324,418,632 |
Treasury stock, shares | 84,909,612 | 87,261,969 |
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- Definition Asset impairment and other charges operating. No definition available.
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- Definition Revenue from the sale of advertising time on broadcast stations. In addition, revenue from re-transmission fees. No definition available.
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- Definition Revenue derived principally from service fees for online advertisements, internet advertising on certain company websites, and access to company online databases. No definition available.
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- Definition Earnings From Discontinued Operations Basic. No definition available.
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- Definition Earnings From Discontinued Operations Diluted. No definition available.
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- Definition Gain On Disposal Of Businesses Per Share Basic. No definition available.
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- Definition Gain On Disposal Of Businesses Per Share Diluted. No definition available.
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- Definition Sum of operating income (loss) and nonoperating income (expense) before income taxes, extraordinary items, cumulative effects of changes in accounting principles, and noncontrolling interest. No definition available.
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- Definition Asset impairment and other charges. No definition available.
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- Definition Increase Decrease In Interest And Taxes Payable. No definition available.
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- Definition The amount of non cash pension (benefit) expense reduced by the amounts of cash and cash equivalents contributed during the reporting period by the entity to fund its pension plans. No definition available.
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- Definition The cash inflow associated with the amount received from the sale of a portion of the company's business, for example a segment, division, branch or other business, during the period in addition to the cash inflow from the sale of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. No definition available.
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- Definition Acquisitions. No definition available.
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Consolidated Statements of Equity (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 26, 2010 |
Dec. 27, 2009 |
Dec. 28, 2008 |
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Statement [Line Items] | |||
Tax provision on pension and other postretirement benefit liability adjustment | $ 17,606 | $ 74,051 | $ 315,832 |
Dividends declared, per share | $ 0.16 | $ 0.16 | $ 1.6 |
Retained earnings | |||
Statement [Line Items] | |||
Dividends declared, per share | $ 0.16 | $ 0.16 | $ 1.6 |
Accumulated other comprehensive income (loss) | |||
Statement [Line Items] | |||
Tax provision on pension and other postretirement benefit liability adjustment | $ 17,606 | $ 74,051 | $ 315,832 |
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Summary of Significant Accounting Policies |
12 Months Ended |
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Dec. 26, 2010 | |
Summary of significant accounting policies [Abstract] | |
Summary of significant accounting policies |
NOTE 1
Summary of significant accounting policies
Fiscal year: The company’s fiscal year ends on the last Sunday of the calendar year. The company’s
2010 fiscal year ended on Dec. 26, 2010, and encompassed a 52-week period. The company’s 2009 and
2008 fiscal years also encompassed 52-week periods.
Consolidation: The consolidated financial statements include the accounts of the company and
its wholly and majority-owned subsidiaries after elimination of all significant intercompany
transactions and profits. Investments in entities for which the company does not have control, but
has the ability to exercise significant influence over operating and financial policies, are
accounted for under the equity method. Accordingly, the company’s share of net earnings and losses
from these ventures is included in “Equity income (losses) in unconsolidated investees, net” in
the Consolidated Statements of Income (Loss).
Segment presentation: In the third quarter of 2008, the company began reporting a new digital
segment and a separate digital revenues line in its Statements of Income (Loss). This revenue line
includes only revenue from the businesses that comprise the new digital segment. It therefore
includes all revenues from CareerBuilder and ShopLocal beginning with the full consolidation of
these businesses in the third quarter of 2008, and revenues from PointRoll, Schedule Star and
Planet Discover. Revenues from PointRoll, Schedule Star and Planet Discover had previously been
reported within the publishing segment and were included in the “All other” revenue line in the
Consolidated Statements of Income (Loss). “All other” revenue is now comprised principally of
commercial printing revenues. All periods presented reflect these reclassifications.
The digital segment and the digital revenues line do not include online/digital revenues
generated by web sites that are associated with the company’s publishing and broadcasting operating
properties. Such amounts are reflected within those segments and are included as part of publishing
advertising revenues and broadcasting revenues in the Consolidated Statements of Income (Loss).
Noncontrolling interests presentation: Noncontrolling interests is presented as a component of
equity on the Consolidated Balance Sheet. This balance primarily relates to the noncontrolling
owners of CareerBuilder, LLC (CareerBuilder). Redeemable non-controlling interest in the mezzanine
section of the balance sheet represents redeemable stock held by a noncontrolling owner in
CareerBuilder. The redeemable stock is exercisable within 30 days after Jan. 1, 2014. Net income
(loss) in the Consolidated Statements of Income (Loss) reflects 100 percent of CareerBuilder
results as the company holds the controlling interest. Net income (loss) is subsequently adjusted
to remove the noncontrolling interest to arrive at Net income (loss) attributable to Gannett Co.,
Inc.
Reclassification of certain items within the Consolidated Statements of Cash Flows: Certain
amounts in the Consolidated Statements of Cash Flows in prior years have been reclassified to
conform to current year presentation.
Operating agencies: The company’s newspaper subsidiary in Detroit participates in a joint
operating agency. The joint operating agency performs the production, sales and distribution
functions for the subsidiary and another newspaper publishing company under a joint operating
agreement. Operating results for the Detroit joint operating agency are fully consolidated along
with a charge for the noncontrolling partner’s share of profits.
Through May 2009, the company also published the Tucson Citizen through the Tucson joint
operating agency in which the company held a 50% interest. Because of challenges facing the
publishing industry and the difficult economy, particularly in the Tucson area, the company ceased
publishing the Citizen on May 16, 2009. The company retained its online site and 50% partnership
interest in the joint operating agency which provides services to the remaining non-Gannett
newspaper in Tucson. The company’s share of results for its share of Tucson operations are
accounted for under the equity method, and are reported as a net amount in “Equity income (losses)
in unconsolidated investees, net.”
Critical accounting policies and the use of estimates: The company prepares its financial
statements in accordance with generally accepted accounting principles which require the use of
estimates and assumptions that affect the reported amount of assets, liabilities, revenues and
expenses and related disclosure of contingent matters. The company
bases its estimates on historical experience, actuarial studies and other assumptions, as
appropriate. The company re-evaluates its estimates on an ongoing basis. Actual results could
differ from these estimates.
Critical accounting policies for the company involve its assessment of the recoverability of
its long-lived assets, including goodwill and other intangible assets and property, plant and
equipment. These assessments are based on factors such as estimated future cash flows and current
fair value estimates of businesses.
The company’s accounting for pension and retiree medical benefits requires the use of various
estimates concerning the work force, interest rates, plan investment return, and involves the use
of advice from consulting actuaries.
The company periodically evaluates its investments in unconsolidated entities for impairment.
When the company determines that an impairment is other-than-temporary, an impairment is recognized
equal to the excess of the investment’s carrying amount over its estimated fair value. In making
such a determination, the company considers recent financial results and forward looking
projections. The company also considers various qualitative factors. These factors include the
intent and ability of the company to retain its investment in the entity and the financial
condition and long-term prospects of the entity. If the company believes that the decline in the
fair value of the investment is temporary, then no impairment is recorded.
The company’s accounting for income taxes in the U.S. and foreign jurisdictions is sensitive
to interpretation of various laws and regulations therein, and to company policy and expectations
as to the repatriation of earnings from foreign sources. 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. If currently available information
raises doubt as to the realization of the deferred tax assets, a valuation allowance is
established. The company must exercise significant judgment in evaluating the amount and timing of
recognition of deferred tax liabilities and assets, including projections of future taxable income.
These judgments and estimates are reviewed on a continual basis as regulatory and business factors
change. A valuation allowance for deferred tax assets may be required if the amount of taxes
recoverable through loss carryback declines, if tax planning strategies are not available, or if
the company projects lower levels of future taxable income.
A more complete discussion of all of the company’s significant accounting policies follows.
Cash and cash equivalents: Cash and cash equivalents consist of cash and investments with
maturities of three months or less.
Trade receivables and allowances for doubtful accounts: Trade receivables are recorded at
invoiced amounts and generally do not bear interest. The allowance for doubtful accounts reflects
the company’s estimate of credit exposure, determined principally on the basis of its collection
experience, aging of its receivables and significant individual account credit risk.
Inventories: Inventories, consisting principally of newsprint, printing ink and plate material
for the company’s publishing operations, are valued primarily at the lower of cost (first-in,
first-out) or market. At certain U.S. publishing operations however, newsprint inventory is carried
on a last-in, first-out basis.
Valuation of long-lived assets: In accordance with the requirements included within ASC Topic
350, “Intangibles — Goodwill and Other” (ASC Topic 350) and Topic 360, “Property, Plant, and
Equipment” (ASC Topic 360), the company evaluates 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 that 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 its carrying value. The company measures 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.
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: buildings and improvements, 10 to 40 years; and machinery,
equipment and fixtures, three to 30 years. Changes in the estimated useful life of an asset, which
could happen as a result of facility consolidations, can affect depreciation expense and net income
(loss). 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.
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. In accordance with the impairment testing provisions included in ASC Topic 350, goodwill
is tested for impairment on an annual basis 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. The company’s annual measurement date is the end of its fiscal year. The
company is 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, the company
performs the second step of the impairment test, as this is an indication that the reporting unit
goodwill may be impaired. In the second step of the impairment test, the company determines 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 the
company must recognize an impairment loss for the difference between the carrying amount and the
implied fair value of goodwill. In determining the reporting units, the company considers the way
it manages its businesses and the nature of those businesses. The company has established its
reporting units for publishing at or one level below the segment level. These reporting units
therefore consist principally of U.S. Community Publishing, the USA TODAY group, the U.K. newspaper
group, and certain individual stand-alone publishing businesses. For Digital, the reporting units
are the stand-alone digital businesses. For Broadcasting, goodwill is accounted for at the segment
level.
The company performs an impairment test annually, or more often if circumstances dictate, of
its indefinite-lived intangible assets. Intangible assets that have finite useful lives are
amortized over those useful lives and are evaluated for impairment in accordance with ASC Topic 350
as described above.
Investments and other assets: Investments in non-public businesses in which the company does
not have control or does not exert significant influence are carried at cost and losses resulting
from periodic evaluations of the carrying value of these investments are included as a
non-operating expense. At Dec. 26, 2010, and Dec. 27, 2009, such investments aggregated
approximately $16 million.
Investments where the company does have significant influence are
recorded under the equity method of accounting. See Note 6 for further discussion of these
investments.
The company’s television stations are parties to program broadcast contracts. These contracts
are recorded at the gross amount of the related liability when the programs are available for
telecasting. The related assets are recorded at the lower of cost or estimated net realizable
value. Program assets are classified as current (as a prepaid expense) or noncurrent (as an other
asset) in the Consolidated Balance Sheets, based upon the expected use of the programs in
succeeding years. The amount charged to expense appropriately matches the cost of the programs with
the revenues associated with them. The liability for these contracts is classified as current or
noncurrent in accordance with the payment terms of the contracts. The payment period generally
coincides with the period of telecast for the programs, but may be shorter.
Revenue recognition: The company’s revenues include amounts charged to customers for: space
purchased in the company’s newspapers, digital ads placed on its web sites, digital marketing
service agreement fees, commercial printing jobs, and advertising broadcast on the company’s
television stations. Newspaper revenues also include circulation revenues for newspapers purchased
by readers or distributors, reduced by the amount of discounts taken. Broadcast revenues include
revenues from the retransmission of the company’s television signals on satellite and cable
networks. Advertising revenues are recognized, net of agency commissions, in the period when
advertising is printed or placed on web sites or broadcast. Revenues for digital marketing services
are generally recognized as web site ad impressions are delivered. Commercial printing revenues are
recognized when the job is delivered to the customer. Circulation revenues are recognized when
purchased newspapers are distributed. Amounts received from customers in advance of revenue
recognition are deferred as liabilities. Broadcasting retransmission fees are recognized over the
contract period based on a negotiated fee per subscriber.
Retirement plans: Pension and other postretirement benefit costs under the company’s
retirement plans are actuarially determined. The company recognizes the cost of postretirement
benefits including pension, medical and life insurance benefits on an accrual basis over the
working lives of employees expected to receive such benefits.
Stock-based employee compensation: Effective Dec. 26, 2005, the first day of its 2006 fiscal
year, the company adopted the fair value recognition provisions of SFAS No. 123(R), “Share-Based
Payments,” as subsequently codified in ASC Topic 718, “Compensation-Stock Compensation,” using the
modified prospective transition method. Under this transition method, stock-based compensation
costs recognized in the income statement beginning in 2006 include (a) compensation expense for all
unvested stock-based awards that were granted through Dec. 25, 2005, based on the grant date fair
value estimated in accordance with the original provisions of SFAS No. 123 and (b) compensation
expense for all share-based payments granted after Dec. 25, 2005, based on grant date fair value
estimated in accordance with the provisions of SFAS No. 123(R). The company’s stock option awards
generally have graded vesting terms and the company recognizes compensation expense for these
options on a straight-line basis over the requisite service period for the entire award (generally
four years). See Note 11 for further discussion.
The company also grants restricted stock or restricted stock units to employees and members of
its Board of Directors 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.
Income taxes: The company accounts for certain income and expense items differently for
financial reporting purposes than for income tax reporting purposes. Deferred income taxes are
provided in recognition of these temporary differences. See Note 10 for further discussion.
Per share amounts: The company reports earnings per share on two bases, basic and diluted. All
basic income per share amounts are based on the weighted average number of common shares
outstanding during the year. The calculation of diluted earnings per share also considers the
assumed dilution from the exercise of stock options and from restricted stock units. Loss amounts
per share consider only basic shares outstanding due to the antidilutive effect of adding shares
for stock option exercises and restricted stock units.
Foreign currency translation: The income statements 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 comprehensive income (loss) and are classified as accumulated other
comprehensive income (loss) in shareholders’ equity.
Loss contingencies: The company is subject to various legal proceedings, claims and regulatory
matters, the outcomes of which are subject to significant uncertainty. The company determines
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. The
company accrues for loss contingencies when such amounts are probable and reasonably estimable. If
a contingent liability is only reasonably possible, the company will disclose the potential range
of the loss, if material and estimable.
New accounting pronouncement: In October 2009, the FASB issued Accounting Standards Update
(ASU) 2009-13, Multiple Element Arrangements. ASU 2009-13 addresses the determination of when the
individual deliverables included in a multiple arrangement may be treated as separate units of
accounting. ASU 2009-13 also modifies the manner in which the transaction consideration is
allocated across separately identified deliverables and establishes definitions for determining
fair value of elements in an arrangement. The new guidance applies prospectively to agreements
entered after 2010. The company is currently assessing the impact of adoption of this
pronouncement.
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Acquisitions Investments and Dispositions |
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Acquisitions, investments and dispositions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions, investments and dispositions |
NOTE 2
Acquisitions, investments and dispositions
2010: In March 2010, CareerBuilder expanded its reach in the U.K. when it purchased CareerSite.biz,
parent of three successful career-related operations there. Founded in 2001, CareerSite.biz
operates two online recruitment niche sites focusing on nursing and rail workers as well as
successful virtual career fair business.
In October 2010, the company purchased a minority stake in Ongo Inc. Ongo is a personal news
service that gives consumers a fundamentally new way to read, discover and share digital news and
information.
In the second quarter of 2010, the company completed the sale of The Honolulu Advertiser as
well as a small directory publishing operation in Michigan. In connection with these transactions,
the company recorded a net after tax gain of $21.2 million in discontinued operations. Income from
continuing operations for all periods presented exclude operating results from these former
properties which have been reclassified to discontinued operations. Amounts applicable to these
discontinued operations are as follows:
In thousands of dollars
Total cash paid in 2010 for business acquisitions and investments was $15.2 million and
$11.0 million, respectively.
In early January 2011, the company also announced the acquisition of Reviewed.com, a group of
12 product-review web sites that provide comprehensive reviews for technology products such as
digital cameras, camcorders and high-definition televisions.
Reviewed.com’s operation will be integrated with USA TODAY as part of USA TODAY’s consumer media
strategy.
2009: In February 2009, the company purchased a minority interest in Homefinder, a leading
national online marketplace connecting homebuyers, sellers and real estate professionals.
In July 2009, Newsquest sold one of its commercial printing businesses, Southernprint Limited.
Total cash paid in 2009 for business acquisitions (principally post-acquisition consideration)
and investments was $9.6 million and $9.7 million, respectively.
2008: On Dec. 31, 2007, the first day of the company’s 2008 fiscal year, the company purchased
X.com, Inc. (BNQT.com), which operates a digital media group of affiliated sites covering eight
different action sports including surfing, snowboarding and skateboarding. BNQT.com is affiliated
with the USA TODAY Sports Media Group.
In February 2008, the company formed QuadrantONE, a new
digital ad sales network, with three other large media companies.
In March 2008, the company purchased a minority stake in Fantasy Sports Ventures (FSV). FSV,
also known as Big Lead Sports, owns a set of fantasy sports content sites and manages advertising
across a group of affiliated sites.
In May 2008, the company purchased a minority stake in Cozi Group Inc. (COZI). COZI is a free
web service that helps families manage busy schedules, stay in communication and share memories.
In June 2008, the company acquired from Tribune Company and The McClatchy Company their
minority ownership interests in ShopLocal LLC, a leading marketing and database services company
for major retailers in the U.S. The company now owns 100% of ShopLocal and began consolidating its
results in the digital segment at the beginning of the third quarter of 2008. ShopLocal
collaborates with PointRoll to create ads that dynamically connect retail advertisers and
consumers, online and in the store.
ShopLocal’s operations turned profitable in the third quarter of 2008.
In July 2008, the company purchased a minority stake in Livestream, a company that provides
Internet broadcasting services. Also in July 2008, the company increased its investment in 4INFO,
maintaining its approximate ownership interest.
In August 2008, the company purchased Pearls Review, Inc., an online nursing certification and
continuing education review site, which is operated with Gannett Healthcare Group.
In September 2008, the company acquired an additional 10% stake in CareerBuilder from Tribune
Company increasing its investment to 50.8% so that it became the majority and controlling owner.
The total cash paid in 2008 for business acquisitions was $168.6 million and for investments
was $46.8 million.
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Facility Consolidation and Asset Impairment Charges |
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Facility Consolidation and Asset Impairment Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Facility consolidation and asset impairment charges |
NOTE 3
Facility consolidation and asset impairment charges
Difficult business conditions required the company to perform impairment tests on certain assets
including goodwill, other intangible assets, other long-lived assets and investments accounted for
under the equity method during 2010, 2009 and 2008. As a result, the company recorded non-cash
impairment charges to reduce the book value of certain of those assets. In addition, an impairment
charge was taken to reduce the value of certain publishing assets sold in 2009 to fair value less
costs to sell.
A summary of these charges by year is presented below:
In millions except per share amounts
In millions except per share amounts
In millions except per share amounts
2010: The goodwill impairment charge results from the application of the impairment
testing provisions included within the goodwill subtopic of ASC Topic 350. Because of difficult
business conditions, testing for one reporting unit was updated during the third quarter of 2010
and for all reporting units on Dec. 26, 2010, in connection with the required annual impairment
test of goodwill and indefinite lived intangibles. For one of the stand-alone businesses in the
digital segment, a potential impairment was indicated. The fair value of the reporting unit was
determined based on a discounted cash flow technique. The company then undertook the next step in
the impairment testing process by determining the fair value of assets and liabilities within the
reporting unit. The implied value of goodwill was less than the carrying value by $11 million and
therefore an impairment charge in this amount was taken. There was no tax benefit recognized
related to the impairment charge since the recorded goodwill was non-deductible as it arose from a
stock purchase transaction. Therefore, the after-tax effect of the goodwill impairment was $11
million or $.04 per share.
The impairment charge of $19 million for other intangible assets, principally a masthead, was
required because revenue results from the underlying business have softened from what was expected
at the time these assets were last valued. Fair value was determined using a relief-from-royalty
method. Carrying values were reduced to fair value for an indefinite lived asset and for certain
definite-lived assets in accordance with ASC Topic 350. Deferred tax benefits have been recognized
for these intangible assets impairment charges and therefore the total after-tax impact was $13
million or $.06 per share.
The carrying values of property, plant and equipment at certain publishing and broadcasting
businesses were evaluated in 2010 due to facility consolidation efforts and changes in expected
useful lives. The company revised the useful lives of certain assets, which were taken out of
service or for which management has committed to a plan to discontinue use in the near future, in
order to reflect the use of those assets over a shortened useful life. As a result of the
evaluation, the company recorded pre-tax charges of $19 million in 2010. Deferred tax benefits were
recognized for these charges and the after-tax impact was $12 million or $.05 per share.
The $8 million of charges in the “Other” category include shut down costs as well as the
impairment of certain broadcast programming assets. Deferred tax benefits were recognized for these
charges and therefore the after-tax impact was $5 million or $.02 per share.
In 2010, the carrying value of an investment for which the company owns a noncontrolling
interest was written down to fair value because the business underlying the investment had
experienced significant and sustained operating losses, leading the company to conclude that it was
other than temporarily impaired. The investment carrying value adjustment totaled $3 million
pre-tax and $2 million on an after-tax basis, or $.01 per share.
2009: The goodwill impairment charges result from the application of the impairment testing
provisions included within the goodwill subtopic of ASC Topic 350. Because of difficult business
conditions due to the economy, testing for certain reporting units was updated during the second
quarter of 2009 and for all reporting units on Dec. 27, 2009, in connection with the required
annual impairment test of goodwill and indefinite-lived intangibles. For one of the stand-alone
business reporting units in the publishing segment and one in the digital segment, a potential
impairment was indicated. The fair value of the reporting units was determined based on a multiple
of earnings technique and/or a discounted cash flow technique. The company then undertook the next
step in the impairment testing process by determining the fair value of assets and liabilities
within these reporting units. The implied value of goodwill for these reporting units was less than
the carrying amount by $33 million and therefore impairment charges in this total amount were
taken. Deferred tax benefits were recognized for the publishing charge only and therefore the
after-tax effect of the total goodwill impairment charge was $26 million or $.11 per share.
The impairment charge of $9 million for other intangible assets, principally customer
relationships and a trade name, was required because revenue results from the underlying business
have softened from what was expected at the time these assets were last valued. Carrying values
were reduced to fair value for an indefinite lived asset and for certain definite-lived assets in
accordance with ASC Topic 350. Deferred tax benefits have been recognized for these intangible
asset impairment charges and therefore the total after-tax impact was $5 million or $.02 per share.
The carrying values of property, plant and equipment at certain publishing and broadcasting
businesses were evaluated in 2009 due to facility consolidation efforts, changes in expected useful
lives and softening business conditions. The recoverability of these assets was measured in
accordance with the requirements included within ASC Topic 360. This process indicated that the
carrying
values of certain assets were not recoverable, as the expected undiscounted future cash flows
to be generated by them were less than their carrying values. The related impairment loss was
measured based on the amount by which the asset carrying value exceeded fair value. Asset group
fair values were determined using the discounted cash flow technique. Certain asset fair values
were based on estimates of prices for similar assets. In addition, as required by ASC Topic 360,
the company revised the useful lives of certain assets, which were taken out of service during the
year or for which management has committed to a plan to discontinue use in the near future, in
order to reflect the use of those assets over their shortened useful life. As a result of the
application of the requirements of ASC Topic 360, the company recorded charges of $79 million in
2009. Deferred tax benefits were recognized for these charges and the 2009 after-tax impact was $50
million or $.21 per share.
The $12 million of charges in the “Other” category include shut down costs as well as the
impairment of certain broadcast programming assets. Deferred tax benefits were recognized for these
charges and therefore the after-tax impact was $7 million or $.03 per share.
In the second quarter
of 2009, in accordance with ASC Topic 360, the company recorded an impairment charge to reduce the
value of certain publishing assets sold to fair value less costs to sell. Fair value was determined
using a discounted cash flow technique that included the cash flows associated with the
disposition. This impairment charge was $28 million pre-tax and $24 million after-tax, or $.10 per
share. The charge is reflected in “Other non-operating items” in the Consolidated Statements of
Income.
In 2009, for certain investments in which the company owns noncontrolling interests, carrying
values were written down to fair value because the businesses underlying the investments had
experienced significant and sustained operating losses, leading the company to conclude that they
were other than temporarily impaired. These investment carrying value adjustments totaled $9
million pre-tax and $7 million on an after-tax basis, or $.03 per share.
2008: Very difficult business conditions, the economic crisis, recessionary conditions in the
U.S. and U.K. and a decline in the company’s stock price required the company to perform impairment
tests on goodwill, intangible assets, and other long-lived assets as of March 31, 2008, the first
day of its fiscal second quarter, as well as on Dec. 28, 2008, in connection with the required
annual impairment test of goodwill and indefinite-lived intangibles. As a result, the company
recorded non-cash impairment charges to reduce the book value of goodwill, other intangible assets
including mastheads, and certain property, plant and equipment assets. The carrying value of
certain of the company’s investments in newspaper publishing partnerships and other businesses,
which are accounted for under the equity method, were also written down due to other than temporary
impairments. The company also recorded accelerated depreciation expense associated with certain
facility consolidation and cost reduction initiatives.
The goodwill impairment charges resulted from the application of the impairment testing
provisions included within the goodwill subtopic ASC Topic 350. Impairment testing is customarily
performed annually. Because of softening business conditions within the company’s publishing
segment and the decline in the company’s stock price and market capitalization, this testing was
updated as of the beginning of the second quarter of 2008 and as required the testing was performed
again as of Dec. 28, 2008. For certain publishing and digital reporting units, an impairment was
indicated. The fair values of the reporting units were determined using discounted cash flow and
multiple of earnings techniques. The company then undertook the next step in the impairment testing
process by determining the fair value of assets and liabilities for these reporting units.
The implied value of goodwill determined by the valuation for these reporting units was less
than the carrying amount by $7.46 billion, and therefore an impairment charge in this amount was
taken. There was minimal tax benefit recognized related to the impairment charges since much of the
recorded goodwill was non-deductible as it arose from stock purchase transactions. Therefore the
after-tax effect of the goodwill impairment was $6.82 billion or $29.86 per share.
The goodwill impairment charge recorded in the second quarter, in the amount of $2.14 billion,
was related to Newsquest, the company’s U.K. publishing operations that had been acquired
relatively recently in several transactions from 1999-2005. Following the second quarter impairment
testing, Newsquest’s fourth quarter operating results and projections indicated a significant
decline from the amounts estimated in the second quarter and as a result a further goodwill
impairment charge of approximately $507 million was recorded.
In the fourth quarter of 2008, the company also recognized an impairment charge for its U.S.
Community Publishing reporting unit of approximately $4.4 billion. This reporting unit was then
comprised of 82 individual publishing operations which had been acquired at various times over the
past several decades.
The goodwill impairment charges for other stand-alone business reporting units totaled $408
million in the fourth quarter.
The impairment charge of $233 million for other intangible assets was required because revenue
results from the underlying businesses had softened from what was expected at the time they were
purchased and the assets initially valued. In accordance with the requirements included within ASC
Topic 350, the carrying values of impaired indefinite-lived intangible assets, principally
mastheads, were reduced to fair value. Fair value was determined using a relief-from-royalty
method. The carrying values of certain definite-lived intangible assets, principally customer
relationships, were reduced to fair value in accordance with the requirements included within ASC
Topic 350. Deferred tax benefits have been recognized for these intangible asset impairment charges
and therefore the after-tax impact was $151 million or $.66 per share.
The carrying value of property, plant and equipment at certain publishing businesses was also
evaluated due to softening business conditions and, in some cases, changes in expected useful
lives. The recoverability of these assets was measured in accordance with the requirements included
within ASC Topic 360. This process indicated that the carrying values of certain assets were not
recoverable, as the expected undiscounted future cash flows to be generated by them would be less
than their carrying values.
The related impairment loss was measured based on the amount by which asset carrying value
exceeded fair value. Asset fair values were determined using discounted cash flow or multiple of
earnings techniques. Certain asset fair values were based on estimates of prices for similar
assets. In addition, as required by ASC Topic 360, the company revised the useful lives of certain
assets, which were
taken out of service during the year or for which management has committed to a plan to
discontinue use in the near future, in order to reflect the use of those assets over their
shortened useful life. As a result of the application of the requirements within ASC Topic 360,
the company recorded charges of $221 million. Deferred tax benefits were recognized for these
charges and therefore the after-tax impact was $138 million or $.61 per diluted share.
The charges of $27 million included in the “Other” category include an amount to increase the
level of the company’s allowance for doubtful accounts reflecting higher collection risk from the
recession-driven increase in delinquency of receivable agings and bankruptcy filings toward the
end of 2008. Charges also include amounts for future lease payments for facilities abandoned in
connection with consolidation efforts and amounts for the impairment of certain broadcast
programming assets. Deferred tax benefits were recognized for these charges and therefore the
after-tax impact was $17 million or $.08 per share.
For certain of the company’s newspaper publishing partnership investments, and for certain
other investments in which the company owns a minority equity interest, carrying values were
written down to fair value because the businesses underlying the investments had experienced
significant and sustained declines in operating performance, leading the company to conclude that
they were other than temporarily impaired. The adjustment of newspaper publishing partnership
carrying values comprise the majority of these investment charges, and these were driven by many
of the same factors affecting the company’s wholly owned publishing businesses. Fair values were
determined using a multiple of earnings or a multiple of revenues technique. These investment
carrying value adjustments were $382 million pre-tax and $251 million on an after-tax basis, or
$1.10 per diluted share. The pre-tax impairment charges for these investments are reflected as
“Equity income (losses) in unconsolidated investees, net” in the Statement of Income (Loss).
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- References No definition available.
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Goodwill and Other Intangible Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and other intangible assets |
NOTE 4
Goodwill and other intangible assets
ASC Topic 350 requires that goodwill and indefinite-lived intangible assets be tested for
impairment at least annually. Recognized intangible assets that have finite useful lives are
amortized over their useful lives and are subject to tests for impairment in accordance with the
requirements included within ASC Topic 350.
As discussed in Note 3, the company performed interim and year-end impairment tests on its
goodwill and other intangible assets during 2010 and, as a result, recorded non-cash impairment
charges totaling $30 million. The charges in 2010 included goodwill and other intangibles for the
Digital segment of $11 million and $2 million, respectively, and $17 million for other intangibles
for the Publishing segment (for a publication masthead in the U.K.).
During 2009, the company recorded non-cash impairment charges totaling $42 million. The
charges in 2009 included goodwill and other intangibles for the Digital segment of $16 million and
$9 million, respectively, and $17 million for goodwill for the Publishing segment.
The following table displays goodwill, indefinite-lived intangible assets, and amortizable
intangible assets at Dec. 26, 2010, and Dec. 27, 2009.
In thousands of dollars
Amortization expense was approximately $31.4 million in 2010 and $33.0 million in 2009.
Customer relationships, which include subscriber lists and advertiser relationships, are amortized
on a straight-line basis over three to 25 years. Other intangibles primarily include internally
developed technology, patents and amortizable trade names and were assigned lives of between three
and 21 years and are amortized on a straight-line basis.
Annual amortization expense relating to
the amortizable intangibles is expected to be approximately $31 million in 2011 and gradually
decline to $19 million in 2015 assuming no acquisitions or dispositions.
The following table shows the changes in the
carrying amount of goodwill during 2010 and 2009.
In thousands of dollars
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- Definition Goodwill And Other Intangible Assets. No definition available.
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- References No definition available.
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Consolidated statements of cash flows |
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Dec. 26, 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated statements of cash flows [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated statements of cash flows |
NOTE 5
Consolidated statements of cash flows
Cash paid in 2010, 2009 and 2008 for income taxes and for interest (net of amounts capitalized) was
as follows:
In thousands of dollars
Interest in the amount of $477,000, $216,000 and $458,000 was capitalized in 2010, 2009
and 2008, respectively.
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Investments |
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Dec. 26, 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments |
NOTE 6
Investments
The company’s investments include several that are accounted for under the equity method. Principal
among these are the following:
The aggregate carrying value of equity investments at Dec. 26, 2010, was $161 million.
Certain differences exist between the company’s 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 recorded by the company for certain of the
investments. The aggregate amount of pretax earnings (losses) recorded by the company for its
investments accounted for under the equity method was $19.1 million, $3.9 million, and $(374.9)
million for 2010, 2009, and 2008, respectively.
The company’s net equity income in unconsolidated investees for 2010 and 2009 included $3
million and $9 million, respectively, of impairment charges related to certain digital business
investments. The 2008 equity loss amount is inclusive of non-cash impairment charges of $382
million primarily related to the carrying value of California Newspapers Partnership and Texas-New
Mexico Newspapers Partnership.
The company also recorded revenue related to CareerBuilder (fully consolidated since Sept. 1,
2008) and Classified Ventures products for online advertisements placed on its newspaper
publishing affiliated web sites. Such amounts totaled approximately $142 million for 2010, $135
million for 2009 and $186 million for 2008. These revenues are recorded within Publishing segment
advertising revenue.
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- References No definition available.
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Long-Term Debt |
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Long-Term Debt [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt |
NOTE 7
Long-term debt
The long-term debt of the company is summarized below:
In thousands of dollars
Total average debt outstanding in 2010 and 2009 was $2.7 billion and $3.6 billion,
respectively. The weighted average interest rate on all debt was 6.0% for 2010 and 4.5% for 2009.
During 2010 and 2009, the company completed a series of financing transactions which
significantly improved its debt maturity profile.
In September 2010, the company completed a private placement offering of unsecured senior
notes totaling $500 million in two tranches: $250 million with a coupon of 6.375% due 2015 and
$250 million with a coupon of 7.125% due 2018. The 2015 notes were priced at 98.970% of face
value, resulting in a yield to maturity of 6.625%. The 2018 notes were priced at 98.527% of face
value, resulting in a yield to maturity of 7.375%. On or after Sept. 1, 2014, the 2018 notes may
be redeemed or purchased by the company at the applicable redemption price (expressed as a
percentage of the principal amount of the 2018 notes) plus accrued but unpaid interest thereon to
the redemption date, if redeemed during the 12-month period commencing on Sept. 1 of the following
years: 2014 — 103.563%, 2015 — 101.781% and 2016 and thereafter 100.000%. The company used the
net proceeds of the offering to partially repay borrowings outstanding under its revolving credit
facilities and term loan.
In September 2010, the company amended its revolving credit agreements and extended the
maturity date with the majority of its lenders from March 15, 2012 to Sept. 30, 2014. Total
commitments under the amended revolving credit agreements are $1.63 billion through March 15, 2012
and total extended commitments from March 15, 2012 to Sept. 30, 2014 will be $1.14 billion.
In October 2009, the company completed a private placement offering of $250 million in
aggregate principal amount of 8.750% senior notes due 2014 and $250 million in aggregate principal
amount of 9.375% senior notes due 2017. The 2014 notes were priced at 98.465% of face value,
resulting in a yield to maturity of 9.125%. The 2017 notes were priced at 98.582% of face value,
resulting in a yield to maturity of 9.625%. On or after November 15, 2013, the 2017 notes may be
redeemed or purchased by the company at the applicable redemption price (expressed as a percentage
of the principal amount of the 2017 notes) plus accrued but unpaid interest thereon to the
redemption date, if redeemed during the 12-month period commencing on November 15 of the following
years: 2013 — 104.688%, 2014 — 102.344% and 2015 and thereafter 100.000%. The company used the
net proceeds from the offering to partially repay borrowings outstanding under its revolving
credit facilities and term loan.
In May 2009, the company completed a private exchange offer related to its 5.75% fixed rate
notes due June 2011 and its 6.375% fixed rate notes due April 2012. The company exchanged
approximately $67 million in principal amount of its 2011 notes for approximately $67 million
principal amount of new 10% senior notes due 2015, and approximately $193 million in principal
amount of its 2012 notes for approximately $193 million principal amount of new 10% senior notes
due 2016.
In connection with the May 2009 exchange transactions and in accordance with the
modifications and extinguishments requirements of ASC Topic 470, “Debt,” the company recorded a
gain of approximately $42.7 million which was classified in “Other non-operating items” in the
Statement of Income (Loss) for the second quarter of 2009. This gain resulted from recording the
notes at fair value as of the time of the exchange and extinguishing the old notes at their
historical book values. Fair value of the notes was based on their trading prices on and shortly
after the exchange date. The discount created by recording the notes at fair value instead of face
value is being amortized over the term of the notes to interest expense.
The notes issued during 2010 and 2009 with maturity dates in 2014 and thereafter were made
available in private offerings that were exempt from the registration requirements of the
Securities Act of 1933 (Securities Act). These notes are guaranteed on a senior basis by the
subsidiaries of the company that guarantee its revolving credit and term loan agreements discussed
more fully below.
The company’s three revolving credit agreements and its term loan agreement require the
company to maintain a senior leverage ratio of less than 3.5x. The agreements also require the
company to maintain a total leverage ratio of less than 4.0x. The total leverage ratio would also
include any subordinated debt the company may issue in the future. Currently, all of the company’s
debt is senior and unsecured. At Dec. 26, 2010, the senior leverage ratio was 1.97x.
Until March 15, 2012, commitment fees for the revolving credit facilities may range from
0.125% to 0.25% depending on credit ratings for the company’s senior unsecured debt from Moody’s
Investor Services (Moody’s) and Standard & Poor’s (S&P). The rate currently in effect is 0.25%.
After March 15, 2012, commitment fees will equal 0.50% of the undrawn commitments. In addition,
the company pays a fee to the lenders that agreed in September 2010 to extend their commitments
from 2012 to 2014 based on the leverage ratio that ranges from 0 to 75 basis points for drawn
amounts and 25 basis points for undrawn amounts. At the current leverage ratio, the additional fee
is 25 basis points for both the drawn and undrawn amounts. No extension fees are payable after
March 15, 2012.
Under each of the agreements, the company may borrow at an applicable margin above the
Eurodollar base rate or the higher of the Prime Rate or the Federal Funds Effective Rate plus
0.50%. Until March 15, 2012, the applicable margin for such borrowings ranges from 1.00% to 2.25%
depending on credit ratings. Under the term loan agreement, the applicable margin varies from 1.25%
to 2.25%. At its current ratings the company will pay an applicable margin of 2.25% under each of
the revolving credit agreements and the term loan agreement. After March 15, 2012, the applicable
margin will be determined based on the company’s leverage ratio.
In connection with each of its three revolving credit agreements and its term loan agreement,
the company agreed to provide guarantees from a majority of its domestic wholly-owned subsidiaries
in the event that the company’s credit ratings from either Moody’s or S&P fell below investment
grade. In the first quarter of 2009, the company’s credit rating was downgraded below investment
grade by both S&P and Moody’s. Accordingly, the guarantees were triggered and the existing notes
due 2011 and 2012 and other unsecured debt of the company became structurally subordinated to the
revolving credit agreements and the term loan.
In September 2009, the company further amended the terms of its three revolving credit
agreements and its term loan agreement to provide for the issuance of up to $500 million of
additional long-term debt carrying the same guarantees put in place for the revolving credit
agreements and term loan. In addition, the company also amended one of the credit agreements to
permit it to obtain up to $100 million of letters of credit from the lenders, which would count
toward their commitments.
On Aug. 21, 2009, Moody’s confirmed the company’s Ba1 corporate family rating and its Ba2
senior unsecured note rating. In addition, Moody’s rated the company’s bank debt, which includes
its revolving credit agreements and term loan, Baa3. The Baa3 rating also applies to most of the
company’s long-term debt which has the same subsidiary guarantees as the bank debt. The company’s
debt is rated BB by Standard and Poor’s.
In August 2010, the company further amended the terms of its three revolving credit agreements
and its term loan agreement to allow for the issuance of up to $750 million of additional long-term
debt carrying the same guarantees put in place for the revolving credit agreements and term loan.
As of Dec. 26, 2010, the company had $221 million of borrowings under its revolving credit
facilities. The maximum amount outstanding at the end of any period during 2010 and 2009 was $1.3
billion and $2.5 billion, respectively. The daily average outstanding balance of the revolving
credit facilities during 2010 and 2009 was $852 million and $2.0 billion, respectively. The
weighted average interest rate for 2010 and 2009 was 2.6% and 3.1%, respectively.
During the first quarter of 2009, the company repurchased $68.8 million in principal amount of
its floating rate notes in privately negotiated transactions at a discount. In connection with
these transactions, the company recorded a gain of approximately $1.1 million which is classified
in “Other non-operating items” in the Statement of Income. This gain is net of $0.6 million
reclassified from accumulated other comprehensive loss for related interest rate swap agreements.
In December 2008, the company launched a tender offer to purchase any and all of its
outstanding floating rate notes due in May 2009 at a purchase price of $950 per $1,000 in principal
amount plus accrued and unpaid interest. In response to the offer, $98.4 million in aggregate
principal amount of notes, representing approximately 13.5 percent of the then outstanding notes,
were purchased at this price in December 2008. Prior to the tender offer, the company had
repurchased $19.4 million in principal amount of the floating rate notes in a privately negotiated
transaction. In connection with these transactions, the company recorded a gain of approximately $4
million which was classified in “Other non-operating items” in the Statement of Income (Loss). This
gain was net of $1.7 million in losses reclassified from accumulated other comprehensive income
(loss) related to the interest rate swap agreements.
In July 2008, the company received proceeds of $280 million from borrowings under a new term
loan agreement with certain bank lenders. The term loan is payable in full on July 14, 2011. The
loan carries interest at a floating rate and may be prepaid at any time without penalty. The
company prepaid $50 million of this loan in each of October 2010 and October 2009 reducing the
balance to $180 million.
During part of 2008, the company utilized commercial paper as a source of
financing. The maximum amount of such commercial paper outstanding at the end of any period during
2008 was $2.0 billion. The daily average outstanding balance of promissory notes was $883 million
during 2008. The weighted average interest rate on such notes was 3.5% for 2008. In June 2008, the
company repaid $500 million in unsecured notes bearing interest at 4.125% with proceeds from
borrowings in the commercial paper market. Beginning September 2008, liquidity in the commercial
paper market was highly constrained and the company elected to borrow under its revolving credit
agreements to repay commercial paper outstanding as it matured.
In August 2007, the company entered into three interest rate swap agreements totaling a
notional amount of $750 million in order to mitigate the volatility of interest rates. These
agreements, which expired in May 2009, effectively fixed the interest rate on the $750 million in
floating rate notes due May 2009 at 5.0125%. These instruments were designated as cash flow hedges
in accordance with ASC Topic 815, “Derivatives and Hedging,” and changes in fair value were
recorded through accumulated other comprehensive income with a corresponding adjustment to other
long-term liabilities. As a result of the tender offer and other repurchases discussed above, the
cash flow hedging treatment was discontinued for interest rate swaps associated with approximately
$118 million of notional value on the retired floating rate notes. Amounts recorded in accumulated
other comprehensive income (loss) related to the discontinued cash flow hedges were reclassified
into earnings and subsequent changes to the fair value of these interest rate swaps were being
recorded through earnings.
In June 2007, the company issued $1.0 billion aggregate principal amount of unsecured senior
convertible notes in an underwritten public offering. Proceeds from the notes were used to repay
commercial paper obligations. The convertible notes bore interest at a floating rate equal to one
month LIBOR, reset monthly, minus twenty-three basis points. As anticipated, on July 15, 2008, the
holders of the convertible notes required the company to repurchase the convertible notes for cash
at a price equal to 100% of the principal amount of the notes submitted for repurchase, plus
accrued and unpaid interest.
Industrial revenue bonds with a principal amount of approximately $17 million were repaid in
full in 2008. Prior to repayment, the bonds bore interest at variable interest rates based on a
municipal bond index.
In May 2006, the company issued $500 million aggregate principal amount of 5.75% notes due
2011 and $750 million aggregate principal amount of floating rate notes due 2009 in an
underwritten public offering. The net proceeds of the offering were used to pay down commercial
paper borrowings.
The unsecured fixed rate notes bearing interest at 6.375% were issued in March 2002 and
mature in 2012.
The company has an effective universal shelf registration statement under which an
unspecified amount of securities may be issued, subject to a $7 billion limit established by the
Board of Directors. Proceeds from the sale of such securities may be used for general corporate
purposes, including capital expenditures, working capital, securities repurchase programs,
repayment of debt and financing of acquisitions. The company may also invest borrowed funds that
are not required for other purposes in short-term marketable securities.
The following schedule of annual maturities of long-term debt assumes the company uses
available capacity under its revolving credit agreements to refinance the unsecured floating rate
notes and term loan due in 2011. Based on this refinancing assumption, all of the obligations are
reflected as maturities for 2012 and beyond.
In thousands of dollars
Notwithstanding the assumptions used in the table above, the company’s debt maturities
might be repaid with cash flow from operating activities and with the possible benefit of a
further extension of the company’s revolving credit agreements or a combination of both.
The fair value of the company’s total long-term debt, determined based on the bid and ask
quotes for the related debt, totaled $2.5 billion and $2.9 billion at Dec. 26, 2010 and Dec. 27,
2009, respectively.
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- References No definition available.
|
Retirement Plans |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Retirement Plans [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement plans |
NOTE 8
Retirement plans
The company and its subsidiaries have various retirement plans, including plans established under
collective bargaining agreements. The company’s principal retirement plan is the Gannett Retirement
Plan (GRP). As described more fully below, substantially all participants had their benefits under
this plan frozen effective Aug. 1, 2008. Prior to this, benefits under the GRP were generally based
on years of service and final average pay.
The disclosure tables below also include the assets and
obligations of the Newsquest Pension Plan in the U.K., certain collectively bargained plans, the
Gannett Supplemental Retirement Plan (SERP) and a frozen plan for the company’s Board of Directors.
The company uses a Dec. 31 measurement date for its retirement plans.
In June 2008, the Board of Directors approved amendments to each of (i) the GRP; (ii) the
SERP; (iii) the Gannett 401(k) Savings Plan (401(k) Plan); and (iv) the Gannett Deferred
Compensation Plan (DCP). The amendments were designed to improve the 401(k) Plan while reducing the
amount and volatility of future pension expense. As a result of the amendments to the GRP and SERP,
most participants in these plans had their benefits frozen as of Aug. 1, 2008. Participants whose
GRP and, if applicable, SERP benefits were frozen will have their frozen benefits periodically
increased by a cost of living adjustment until benefits commence.
Effective Aug. 1, 2008, most participants whose benefits were frozen under the GRP and, if
applicable, the SERP receive higher matching contributions under the 401(k) Plan. Under the new
formula, the matching contribution rate generally increased from 50% of the first 6% of
compensation that an employee elects to contribute to the plan to 100% of the first 5% of
contributed compensation. The company also makes additional employer contributions to the 401(k)
Plan on behalf of certain long-service employees. The DCP was amended to provide for Gannett
contributions on behalf of certain employees whose benefits under the 401(k) Plan are capped by IRS
rules.
As a result of the amendments to freeze most benefit accruals in the GRP and the SERP, the
company recognized a net pre-tax pension curtailment gain of $46.5 million in 2008 in accordance
with the Defined Benefit Plans-Pension subtopic of ASC Topic 715, “Compensation-Retirement
Benefits.”
In 2009, the company reached an agreement with one of its unions for a complete
withdrawal from the union’s underfunded pension plan and release from any future obligations with
respect thereto. Under the agreement, the company made settlement payments of $7.3 million in May
2009 and $7.7 million in May 2010. As a result of this agreement, the company recognized a pre-tax
settlement gain of $39.8 million in 2009.
In October 2010, after discussion with its pension plan
trustees and employees, the decision was made to close its Newsquest defined benefit
plan to future accrual, effective March 31, 2011. The plan closure was made to reduce pension
expense and funding volatility and was part of a package of measures to address the plan’s deficit.
The company recognized a pre-tax curtailment gain of $3.3 million in connection with this closure.
The company’s pension costs, which include costs for its qualified, non-qualified and union
plans, are presented in the following table:
In thousands of dollars
The following table provides a reconciliation of pension benefit obligations (on a
projected benefit obligation measurement basis), plan assets and funded status of company-sponsored
retirement plans, along with the related amounts that are recognized in the Consolidated Balance Sheets.
In thousands of dollars
The funded status (on a projected benefit obligation basis) of the company’s principal
retirement plans at Dec. 26, 2010, is as follows:
In thousands of dollars
The accumulated benefit obligation for all defined benefit pension plans was $3.19 billion
and $3.07 billion at Dec. 26, 2010 and Dec. 27, 2009, respectively.
Net actuarial losses recognized in accumulated other comprehensive loss were $1.17 billion in
2010 and $1.13 billion in 2009. Prior service cost recognized in accumulated other comprehensive
loss was $75.3 million in 2010 and $78.1 million in 2009.
The actuarial loss and prior service cost amounts expected to be amortized from accumulated
other comprehensive loss into net periodic benefit cost in 2011 are $36.5 million and $7.5 million,
respectively.
Other changes in plan assets and benefit obligations recognized in other comprehensive income
for 2010 consist of the following:
In thousands of dollars
Pension costs: The following assumptions were used to determine net pension costs:
The expected return on asset 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 asset returns.
Benefit obligations and funded status: The following assumptions were used to determine the
year-end benefit obligations:
The following table presents information for those company retirement plans for which
accumulated benefits exceed assets:
In thousands of dollars
The following table presents information for those company retirement plans for which the
projected benefit obligation exceeds assets:
In thousands of dollars
During 2010, the company made voluntary contributions of $130 million to the GRP. The
company contributed $26.6 million to the U.K. retirement plan in 2010 and $21.2 million in 2009.
For 2011, the company expects to contribute less than $45 million to the GRP, depending on
final actuarial valuation results, and $18.5 million to the U.K. retirement plan.
Plan assets: The fair value of plan assets was approximately $2.6 billion and $2.4 billion at
the end of 2010 and 2009, respectively. The expected long-term rate of return on these assets was
8.75% for 2010, 2009 and 2008. The asset allocation for company-sponsored pension plans at the end
of 2010 and 2009, and target allocations for 2011, 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. The company’s actual investment return (loss) on its Gannett Retirement Plan
assets was 14.0% for 2010, 25.6% for 2009 and (25.6)% for 2008. The negative return for 2008
reflects the global economic crisis and sharp decline in equity share values.
Retirement plan assets include approximately 1.2 million shares of the company’s common stock
valued at approximately $19 million and $18 million at the end of 2010 and 2009, respectively. The
plan received dividends of approximately $199,000 on these shares in 2010.
Cash flows: The company estimates it will make the following benefit payments (from either
retirement plan assets or directly from company funds), which reflect expected future service, as
appropriate:
In thousands of dollars
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- References No definition available.
|
Postretirement benefits other than pensions |
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Dec. 26, 2010 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Postretirement benefits other than pensions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Postretirement benefits other than pensions |
NOTE 9
Postretirement benefits other than pensions
The company provides health care and life insurance benefits to certain retired employees who meet
age and service requirements. Most of the company’s 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 and accrued
over the service period of the active employee group. The company’s policy is to fund benefits as
claims and premiums are paid. The company uses a Dec. 31 measurement date for these plans.
Postretirement benefit cost for health care and life insurance included the following
components:
In thousands of dollars
The table below provides a reconciliation of benefit obligations and funded status of the
company’s postretirement benefit plans:
In thousands of dollars
Net actuarial losses recognized in accumulated other comprehensive loss were $33.7 million
in 2010 and $44.3 million in 2009. Prior service credits recognized in accumulated other
comprehensive loss were $63.6 million in 2010 and $82.3 million in 2009.
The actuarial loss and prior service credit estimated to be amortized from accumulated
other comprehensive loss into net periodic benefit cost in 2011 are $4.5 million and $(19.5)
million, respectively.
Other changes in plan assets and benefit obligations recognized in other comprehensive (loss)
income for 2010 consist of the following:
In thousands of dollars
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:
A 6.50% annual rate of increase in the per capita cost of covered health care benefits was
assumed for 2011. 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 $8 million in the 2010 postretirement benefit obligation and a $0.5
million change in the aggregate service and interest components of the 2010 expense.
Cash flows: The company expects to make the following benefit payments, which reflect expected
future service, and to receive the following federal subsidy benefits as appropriate:
The amounts above exclude the participants’ share of the benefit cost. The company’s policy is
to fund benefits as claims and premiums are paid.
|
X | ||||||||||
- Definition Description containing the entire other postretirement benefits (excluding pension) disclosure as a single block of text. No definition available.
|
X | ||||||||||
- Definition Postretirement Benefits Other Than Pension. No definition available.
|
Income Taxes |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income taxes |
NOTE 10
Income taxes
The provision (benefit) for income taxes on income from continuing operations consists of the
following:
In thousands of dollars
In thousands of dollars
In thousands of dollars
The components of income (loss) from continuing operations attributable to Gannett Co., Inc.
before income taxes consist of the following:
In thousands of dollars
The provision for income taxes on continuing operations varies from the U.S. federal statutory
tax rate as a result of the following differences:
The benefit from the lapse of state statutes of limitations in 2010 is primarily the release
of tax reserves and interest related to the sale of a business in a prior year.
Absent the effect of facility consolidation and asset impairment charges and workforce
restructuring charges in 2010 and 2009, certain gains in 2009 and the special net tax benefit from
the release of certain tax reserves due to the lapse of statutes of limitations for 2010, the
company’s effective tax rate would have been 33.1% for 2010, 33.6% for 2009 and 28.7% for 2008.
In addition to the income tax provision presented above for continuing operations, the company
also recorded federal and state income taxes payable on discontinued operations in 2010.
Taxes provided on the earnings from discontinued operations include amounts reclassified from
previously reported income tax provisions and totaled $11.7 million for 2010, covering U.S. federal
and state income taxes and representing an effective rate of 36%. Also included in discontinued
operations for 2010 is a recognized gain of $21.2 million, which is net of tax. Taxes provided on
the gains from the disposals totaled approximately $12.2 million for 2010, covering U.S. federal
and state income taxes and represent an effective rate of 36.4%.
Deferred income taxes reflect temporary differences in the recognition of revenue and expense
for tax reporting and financial statement purposes. Amortization of intangibles represents the
largest component of the deferred provision. Deferred tax liabilities and assets are adjusted for
enacted changes in tax laws or tax rates of the various tax jurisdictions. The amounts of such
adjustments for 2008, 2009 and 2010 are not significant.
Deferred tax liabilities and assets were composed of the following at the end of 2010 and
2009:
In thousands of dollars
Included in total deferred tax assets are valuation allowances of approximately $44 million
and $38 million in 2010 and 2009, respectively, primarily related to foreign tax credits available
for carry forward to future years and to certain foreign losses.
Realization of deferred tax assets for which valuation allowances have not been established is
dependent upon generating sufficient future taxable income. The company expects to realize
the benefit of these deferred tax assets through future reversals of its 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, the
company believes it is more likely than not that all deferred tax assets for which valuation
allowances have not been established will be realized.
The company’s legal and tax structure reflects acquisitions that have occurred over the years
as well as the multi-jurisdictional nature of the company’s businesses.
The following table summarizes the activity related to unrecognized tax benefits, excluding
the federal tax benefit of state tax deductions:
In thousands of dollars
The total amount of unrecognized tax benefits that, if recognized, would impact the effective
tax rate was $109 million as of Dec. 26, 2010, and $126 million as of Dec. 27, 2009. This amount
includes the federal tax benefit of state tax deductions.
Included in the $154 million unrecognized tax benefit balance at Dec. 26, 2010, are $11
million of tax positions for which the ultimate deductibility is highly certain but for which there
is uncertainty about the timing of such deductibility.
The company recognizes interest and penalties related to unrecognized tax benefits as a
component of income tax expense. The company also recognizes interest income attributable to
overpayment of income taxes as a component of income tax expense, and it recognizes interest
credits for the reversal of interest expense previously recorded for uncertain tax positions which
are subsequently released. During 2010, the company recognized income from interest and the release
of penalty reserves of $40 million. During 2009, the company recognized interest expense of $3
million. During 2008, the company recognized income from interest and the release of penalty
reserves of $13 million. The amount of accrued interest and penalties payable related to
unrecognized tax benefits was $37 million and $74 million as of Dec. 26, 2010, and Dec. 27, 2009,
respectively.
The 2005 through 2009 tax years remain subject to examination by the IRS. The IRS is examining
the 2005 through 2008 U.S. income tax returns and the company believes it is likely that the
examination of these returns will be completed in 2011. The 2005 through 2009 tax years generally
remain subject to examination by state authorities, and the years 2003 through 2009 are subject to
examination in the U.K. In addition, tax years prior to 2005 remain subject to examination by
certain states primarily due to the filing of amended tax returns as a result of the settlement of
the IRS examination for these years and due to ongoing audits.
It is reasonably possible that the amount of unrecognized benefit with respect to certain of
the company’s 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 other regulatory developments. At this time, the company estimates that the amount
of its gross unrecognized tax positions may decrease by up to approximately $50 million within the
next 12 months primarily due to lapses of statutes of limitations and settlement of ongoing audits
in various jurisdictions.
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- References No definition available.
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- References No definition available.
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Shareholders' Equity |
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SHAREHOLDERS' EQUITY [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY |
NOTE 11 — SHAREHOLDERS’ EQUITY
Capital stock and earnings per share
The company’s earnings (loss) per share (basic and diluted) for 2010, 2009 and 2008 are presented
below:
In thousands, except per share amounts
The diluted earnings per share amounts exclude the effects of approximately 19.6 million stock
options outstanding for 2010, 22.3 million for 2009 and 27.1 million for 2008, as their inclusion
would be antidilutive. The diluted earnings per share amount for 2008 also excludes 2.2 million
restricted stock units.
Share repurchase program
In February 2004, the company announced the reactivation of its existing share repurchase program
that was last utilized in February 2000. On July 25, 2006, the authorization to repurchase shares
was increased by $1 billion. During 2008, 2.3 million shares were purchased under the program for
$72.8 million. There were no shares purchased under the program in 2010 or 2009.
The 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
price, availability and other corporate developments. Purchases may occur from time to time and no
maximum purchase price has been set. While there is no expiration date for the repurchase program,
the company’s Board of Directors reviews the share repurchase authorization annually, the last such
review having occurred in October 2010. Certain of the shares previously acquired by the company
have been reissued in settlement of employee stock awards. At this time, the company does not
anticipate repurchasing its shares for the near term.
Equity-based awards
In May 2001, the company’s shareholders approved the adoption of the Omnibus Incentive Compensation
Plan (the Plan). The Plan is administered by the Executive Compensation Committee of the Board of
Directors and was amended and restated as of May 4, 2010 to increase the number of shares reserved
for issuance to up to 60.0 million shares of company common stock for awards granted on or after
the amendment date. The Plan provides for the granting of stock options, stock appreciation rights,
restricted stock, restricted stock units and other equity-based and cash-based awards. Awards may
be granted to employees of the company and members of the Board of Directors. The Plan provides
that shares of common stock subject to awards granted become available again for issuance if such
awards are canceled or forfeited.
Stock options may be granted as either non-qualified stock options or incentive stock options.
Options are granted to purchase common stock of the company at not less than 100% of the fair
market value on the day of grant. Options are exercisable at such times and subject to such terms
and conditions as the Executive Compensation Committee determines. The Plan restricts the granting
of options to any participant in any fiscal year to no more than 1,000,000 shares. Options issued
from 1996 through November 2004 have a 10-year exercise period, and options issued in December 2004
and thereafter have an eight-year exercise period. Options generally become exercisable at 25% per
year.
In addition to stock options, the company issues stock-based compensation to employees in the
form of restricted stock units (RSUs). These awards generally entitle employees to receive at the
end of a four-year incentive period one share of common stock for each RSU granted, conditioned on
continued employment for the full incentive period. Compensation expense for RSUs is recognized for
the awards that are expected to vest. The expense is based on the fair value of the awards on the
date of grant recognized on a straight-line basis over the requisite service period, which is
generally the four-year incentive period. Under the plan, no more than 500,000 RSUs may be granted
to any participant in any fiscal year.
The Plan also permits the company to issue restricted stock. Restricted Stock is an award of
common stock that is subject to restrictions and such other terms and conditions as the Executive
Compensation Committee determines. Under the Plan, no more than 500,000 restricted shares may be
granted to any participant in any fiscal year.
The company issued stock options to certain members of its Board of Directors as compensation
for meeting fees and retainer fees, as well as long-term awards. Meeting fees paid as stock options
fully vest upon grant. Retainers paid in the form of stock options vest in equal quarterly
installments over one year. Long-term stock option awards vest in equal annual installments over
four years. Expense is recognized on a straight-line basis over the vesting period based on the
grant date fair value. During 2010, 2009 and 2008, members of the Board of Directors were awarded
72,681, 144,667 and 28,683 shares, respectively, of stock options as part of their compensation
plan.
The company also issued restricted stock to certain members of its Board of Directors as
compensation for meeting fees and retainer fees, as well as annual long-term awards. Meeting fees
paid as restricted stock fully vest upon grant. Retainers paid in the form of restricted shares
vest in equal quarterly installments over one year. Long-term awards vest in equal monthly
installments over three years. Expense is recognized on a straight-line basis over the vesting
period based on the grant date fair value. During 2010, 2009 and 2008, members of the Board of
Directors were awarded 21,062 shares, 95,543 shares and 15,872 shares, respectively, of restricted
stock as part of their compensation plan. All vested shares will be issued to directors when
retiring from the Board.
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 the company’s common
stock or other criteria established by the Executive Compensation Committee including the
achievement of performance goals. The maximum aggregate grant of performance shares 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 performance units or cash-based awards that may be awarded to any
participant in any fiscal year shall not exceed $10,000,000.
In the event of a change in control as defined in the Plan, (1) all outstanding options will
become immediately exercisable in full; (2) all restricted periods and restrictions imposed on
non-performance based restricted stock awards will lapse; (3) all non-performance based restricted
stock units will fully vest; and (4) target payment opportunities attainable under all outstanding
awards of performance-based restricted stock, performance units and performance shares will be paid
as specified in the Plan.
Determining fair value
Valuation and amortization method — The company determines the fair value of stock options using
the Black-Scholes option-pricing formula. Key inputs into this formula include expected term,
expected volatility, expected dividend yield and the risk-free rate. Each assumption is discussed
below. This fair value is amortized on a straight-line basis over the requisite service periods of
the awards, which is generally the four-year vesting period.
Expected term — The expected term represents the period that the company’s stock-based awards
are expected to be outstanding, and is determined based on historical experience of similar awards,
giving consideration to contractual terms of the awards, vesting schedules and expectations of
future employee behavior.
Expected volatility — The fair value of stock-based awards reflects a volatility factor
calculated using historical market data for the company’s common stock. The time frame used is
equal to the expected term.
Expected dividend — The dividend assumption is based on the company’s expectations about its
dividend policy on the date of grant.
Risk-free interest rate — The company bases the risk-free interest rate on the yield to
maturity at the time of the stock option grant on zero-coupon U.S. government bonds having a
remaining life equal to the option’s expected life.
Estimated forfeitures — When estimating forfeitures, the company considers voluntary
termination behavior as well as analysis of actual option forfeitures.
The following assumptions were used to estimate the fair value of option awards:
The following table shows the stock-based compensation related amounts recognized in the
Consolidated Statements of Income (Loss) for equity awards:
In thousands, except per share amounts
As of Dec. 26, 2010, there was $13.6 million of unrecognized compensation cost related to
non-vested share-based compensation for options. Such amount will be adjusted for future changes in
estimated forfeitures. Unrecognized compensation cost for options will be recognized on a
straight-line basis over a weighted average period of 3.5 years.
During 2010, options for 332,060 shares of common stock were exercised from which the company
received $2.0 million of cash. The intrinsic value of the options exercised was approximately $3.1
million. The actual tax benefit realized from the option exercises was $1.2 million.
During 2009, options for 44,250 shares of common stock were exercised from which the company
received $0.3 million of cash. The intrinsic value of the options exercised was approximately $0.4
million. The actual tax benefit realized from the option exercises was $0.1 million.
During 2008, no options were exercised.
Option exercises are satisfied through the issuance of shares from treasury stock.
A summary of the company’s stock-option awards is presented below:
As of Dec. 26, 2010, there was $33.6 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 3.3 years.
A summary of restricted stock and RSU awards is presented below:
401(k) savings plan
Substantially all employees of the company (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 the 401(k) Savings Plan (the Plan). Employees can elect to save up to
50% of compensation on a pre-tax basis subject to certain limits.
On Aug. 1, 2008, the company approved amendments to its principal domestic retirement plans
and to its 401(k) plan. For most participants, the 401(k) plan matching formula was changed to 100%
of the first 5% of employee contributions. Prior to this change, the company generally matched 50%
of the first 6% of employee contributions. The company also now makes additional 401(k) employer
contributions on behalf of certain long-term employees. Compensation expense related to 401(k)
contributions was $46.0 million in 2010, $59.8 million in 2009 and $46.6 million in 2008. In 2010
and 2009, the company’s 401(k) match was settled with a combination of cash and treasury shares.
Cash was used to settle 401(k) contributions in 2008.
In 2002, the Board authorized 3,000,000 shares of common stock to be registered in connection
with savings-related share option plans available to eligible employees of Newsquest. In July 2004,
options covering 143,000 shares were subscribed to by Newsquest employees. The plan had a maturity
date of August 31, 2007, and options became exercisable in September 2007. No options were
exercised during 2008 or 2009. The options expired unexercised in 2010.
Preferred share purchase rights
In May 1990, the Board of Directors declared a dividend distribution of one Preferred Share
Purchase Right (Right) for each common share held, payable to shareholders of record on June 8,
1990. The Rights become exercisable when a person or group of persons acquired or announced an
intention to acquire ownership of 15% or more of the company’s common shares. Holders of the Rights
could have acquired an interest in a new series of junior participating preferred stock, or they
could have acquired an additional interest in the company’s common shares at 50% of the market
value of the shares at the time the Rights were exercised.
In May 2000, the company announced that its Board of Directors approved an amendment to its
Shareholder Rights Plan to extend the expiration date of the Rights to May 31, 2010, and increase
the initial exercise price of each preferred stock purchase right to $280. The Rights expired
unexercised on May 31, 2010 and the company has not instituted a new Shareholder Rights Plan.
Accumulated other comprehensive income (loss)
The elements of the company’s Accumulated Other Comprehensive Loss consisted of the following items
(net of tax): Pension, retiree medical and life insurance liabilities — a reduction of equity of
$762 million at Dec. 26, 2010, and $735 million at Dec. 27, 2009; foreign currency translation
gains — an increase of equity of $395 million at Dec. 26, 2010, and $416 million at Dec. 27, 2009;
and all other — an increase of $2 million at Dec. 26, 2010.
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- Definition Shareholders Equity Text Block. No definition available.
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- References No definition available.
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Commitments Contingent Liabilities and Other Matters |
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Dec. 26, 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments contingent liabilities and other matters [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments, contingent liabilities and other matters |
NOTE 12
Commitments, contingent liabilities and other matters
Litigation: The company and a number of its subsidiaries are defendants in judicial and
administrative proceedings involving matters incidental to their business. The company does not
believe that any material liability will be imposed as a result of these matters.
Leases: Approximate future minimum annual rentals payable under non-cancelable operating
leases, primarily real-estate related, are as follows:
In thousands of dollars
Total minimum annual rentals have not been reduced for future minimum sublease rentals
aggregating $1.8 million. Total rental costs reflected in continuing operations were $72 million in
2010, $66 million in 2009 and $72 million in 2008.
Program broadcast contracts: The company has $112 million of commitments under programming
contracts that include television station commitments to purchase programming to be produced in
future years.
Purchase obligations: The company has commitments under purchasing obligations totaling $390
million related to printing contracts, capital projects, interactive marketing agreements, wire
services and other legally binding commitments. Amounts which the company is liable for under
purchase orders outstanding at Dec. 26, 2010, are reflected in the Consolidated Balance Sheets as
accounts payable and accrued liabilities and are excluded from the $390 million.
Self insurance:
The company is self-insured for most of its employee medical coverage and for its casualty, general
liability and libel coverage (subject to a cap above which third party insurance is in place). The
liabilities are established on an actuarial basis, with the advice of consulting actuaries, and
totaled $142 million at the end of 2010 and $151 million at the end of 2009.
Other matters: In December 1990, the company adopted a Transitional Compensation Plan (the
Plan). The Plan provides termination benefits to key executives whose employment is terminated
under certain circumstances within two years following a change in control of the company. Benefits
under the Plan include a severance payment of up to three years’ compensation and continued life
and medical insurance coverage.
In connection with CareerBuilder’s acquisition of certain international companies in 2007, it
is contingently liable for earnout payments to previous owners, depending upon the achievement of
certain performance metrics. The final maximum potential payment in 2011 related to these
acquisitions is $1.6 million which has been accrued in the 2010 financial statements.
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- Definition Commitments contingent liabilities and other matters. No definition available.
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- References No definition available.
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Fair Value Measurement |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 26, 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurement |
NOTE 13
Fair value measurement
The company measures and records in the accompanying consolidated financial statements certain
assets and liabilities at fair value. ASC Topic 820, “Fair Value Measurements and Disclosures,”
establishes a fair value hierarchy for those instruments measured at fair value that distinguishes
between assumptions based on market data (observable inputs) and the company’s own assumptions
(unobservable inputs). The hierarchy consists of three levels:
The financial instruments measured at fair value in the accompanying consolidated balance
sheets consist of the following:
Company Owned Assets
In thousands of dollars
Fair value measurement as of Dec. 26, 2010
In thousands of dollars
Fair value measurement as of Dec. 27, 2009
During the second quarter of 2010, the company sold auction rate securities held by
CareerBuilder, receiving proceeds of $28.4 million and recording a gain of $2.1 million.
The level 3 sundry investments are financial instruments held by CareerBuilder. During 2009,
the company sold some of these instruments receiving proceeds of $1.7 million and recording a gain
of $0.2 million. In addition, an unrealized gain of $1.2 million related to these securities was
recorded in the company’s Consolidated Balance Sheet. The company utilized a probability-weighted
discounted cash flow technique to determine the fair value of these financial instruments. The main
assumptions used in the fair value calculation were the estimated coupon rate associated with the
securities and the discount rate (determined based on market yields of similar taxable
obligations).
The following tables set forth by level within the fair value hierarchy the fair values of the
company’s pension plan assets:
Pension Plan Assets/Liabilities
In thousands of dollars
Fair value measurement as of Dec. 26, 2010(a)
In thousands of dollars
Fair value measurement as of Dec. 27, 2009(a)
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:
U.S. government-related securities are primarily mortgage-backed securities that are typically not
actively quoted. Values are obtained from industry vendors who use various pricing models or use
quotes for identical or similar securities. Investments categorized in Level 3 are thinly traded
with values derived using unobservable inputs.
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 bonds categorized in Level 3 are primarily from distressed issuers
for whom the values represent an estimate of recovery in a potential or actual bankruptcy
situation.
Corporate stock is valued 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 valuer 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.
Interest in common/collective trusts and interest in 103-12 investments are valued using the
net asset value as provided monthly by the fund family or fund company. Shares in the
common/collective trusts are generally redeemable upon request. The investment classified in Level
1 is a money market fund with a constant net asset value.
One of the investments is a fixed income fund which uses individual subfunds to efficiently
add a representative sample of securities in individual market sectors to the portfolio. These
funds are generally redeemable with a short-term written or verbal notice. Also included is a fund
that invests in a select portfolio of large cap domestic stocks perceived to have superior growth
characteristics. Shares in this fund are generally redeemable on any business day, upon two-day
notice. There are no unfunded commitments related to these types of funds.
Interest in registered investment companies is valued using the published net asset values as
quoted through publicly available pricing sources. The investments in Level 2 are proprietary funds
of the individual fund managers and are not publicly quoted.
Investments in partnerships and joint venture interests are valued based on an assessment of
each underlying investment, considering items such as expected cash flows, changes in market
outlook and subsequent rounds of financing. These investments are included in Level 3 of the fair
value hierarchy because exit prices tend to be unobservable and reliance is placed on the above
methods. Certain of the partnerships are general leveraged buyout funds and others are venture
capital funds. Also included within the partnership portfolio is a fund formed to invest in the
leveraged loan market. Interest in partnership investments cannot be redeemed. Instead,
distributions are received as the underlying assets of the funds are liquidated. It is estimated
that the underlying assets of the funds will be liquidated over approximately 5 to 15 years. There
are future funding commitments of $54 million.
Investments in hedge funds are valued at the net asset value as reported by the fund managers.
Within this category is a fund of hedge funds whose strategy is to produce a return that is
uncorrelated with market movements. Certain of the other funds categorized as hedge funds were
formed to invest in mortgage and credit trading opportunities while others were formed to invest in
the leveraged loan market. 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. There are no unfunded commitments related to the hedge funds.
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.
Liability to purchase U.S. government and other securities relates to buying and selling
contracts in federal agency securities that have not yet been opened up for public trading. In
these instances the investment manager has sold the securities prior to owning them, resulting in a
negative asset position. These securities are valued in the same manner as those noted above in
U.S. government-related securities.
The tables below sets forth a summary of changes in the fair value of the company’s pension
plan assets and liabilities, categorized as Level 3, for the fiscal year ended Dec. 26, 2010 and
Dec. 27, 2009:
Pension Plan Assets/Liabilities
In thousands of dollars
As of Dec. 26, 2010
In thousands of dollars
As of Dec. 27, 2009
The fair value of the company’s total long-term debt, determined based on the bid and ask
quotes for the related debt, totaled $2.5 billion and $2.9 billion at Dec. 26, 2010 and Dec. 27,
2009, respectively. As described in Note 7, the company recognized the debt resulting from the May
2009 private exchange offer at fair value in accordance with the modifications and extinguishments
requirements of ASC Topic 470, “Debt.”
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).
The following tables summarize the nonfinancial assets measured at fair value on a
nonrecurring basis in the accompanying consolidated balance sheets as of Dec. 26, 2010 and Dec. 27,
2009:
Non-Financial Assets
In thousands of dollars
Fair value measurement as of Dec. 26, 2010
In thousands of dollars
Fair value measurement as of Dec. 27, 2009
In addition, the company holds investments in non-public businesses in which the company does
not have control and does not exert significant influence. Such investments are carried at cost and
reduced for any impairment losses resulting from periodic evaluations of the carrying value of the
investment. At Dec. 26, 2010, and Dec. 27, 2009, the aggregate carrying amount of such investments
was $16 million. During the second quarter of 2010, the company concluded that one of its
investments had an other-than-temporary impairment. Therefore, the carrying value of this
investment was written down to fair value. No events or changes in circumstances have occured since
Dec. 27, 2009, that suggests a significant and adverse effect on the fair value of the remaining
investments. Accordingly, the company did not evaluate such investments for impairment in 2010.
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- Definition Fair Value Measurement. No definition available.
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- References No definition available.
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Business Operations and Segment Information |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 26, 2010 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business operations and segment information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business operations and segment information |
NOTE 14
Business operations and segment information
The company has determined that its reportable segments based on its management and internal
reporting structure are publishing, which is the largest segment of its operations, digital and
broadcasting.
The publishing segment at the end of 2010 consisted of 82 U.S. daily newspapers with
affiliated online sites in 30 states and one U.S. territory, including USA TODAY, a national,
general-interest daily newspaper; USATODAY.com; USA WEEKEND, a magazine supplement for newspapers;
Clipper; Gannett Healthcare Group; and Gannett Government Media (formerly Army Times). The
publishing segment also includes Newsquest, which is a regional newspaper publisher in the United
Kingdom that includes 17 paid-for daily newspapers and more than 200 weekly newspapers, magazines
and trade publications. The publishing segment in the U.S. also includes about 600 non-daily
publications, a network of offset presses for commercial printing and several smaller businesses.
In the third quarter of 2008, the company began reporting a new digital segment and a separate
digital revenues line in its Statements of Income (Loss). This revenue line includes only revenue
from the businesses that comprise the new digital segment. It therefore includes all revenues from
CareerBuilder and ShopLocal beginning with the full consolidation of these businesses in the third
quarter of 2008, and revenues from PointRoll, Schedule Star and Planet Discover. Revenues from
PointRoll, Schedule Star and Planet Discover had previously been reported within the publishing
segment and were included in the “All other” revenue line in the Statement of Income (Loss). “All
other” revenue is now comprised principally of commercial printing revenues. All periods presented
reflect these reclassifications.
At the end of 2010, the company’s broadcasting division included 23 television stations and
affiliated online sites in markets with more than 21 million households covering 18.2% of the U.S.
Captivate Network is also part of the broadcasting division.
The company’s foreign revenues, principally from publishing businesses in the United Kingdom
and CareerBuilder subsidiaries in Europe, totaled approximately $564 million in 2010, $621 million
in 2009 and $1.0 billion in 2008. The company’s long-lived assets in foreign countries, principally
in the United Kingdom, totaled approximately $556 million at Dec. 26, 2010, $535 million at Dec.
27, 2009, and $628 million at Dec. 28, 2008.
Separate financial data for each of the company’s business segments is presented in the table
that follows. The accounting policies of the segments are those described in Note 1. The company
evaluates the performance of its segments based on operating income. Operating income represents
total revenue less operating expenses, including depreciation, amortization of intangibles and
facility consolidation and asset impairment charges. In determining operating income by industry
segment, general corporate expenses, interest expense, interest income, and other income and
expense items of a non-operating nature are not considered, as such items are not allocated to the
company’s segments.
Corporate assets include cash and cash equivalents, property, plant and equipment used for
corporate purposes and certain other financial investments.
In thousands of dollars
Business segment financial information
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- Definition Business operations and segment information. No definition available.
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- References No definition available.
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Valuation and Qualifying Accounts and Reserves |
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Valuation and qualifying accounts and reserves |
SCHEDULE II — Valuation and qualifying accounts and reserves
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- Definition Valuation and qualifying accounts and reserves. No definition available.
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- References No definition available.
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