|
ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
47-2390983
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
7950 Jones Branch Drive, McLean, Virginia
|
|
22107-0910
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large Accelerated Filer
|
ý
|
Accelerated Filer
|
¨
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|
|
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Non-Accelerated Filer
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¨
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Smaller Reporting Company
|
¨
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Item No.
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|
Page
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1
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2
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3
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4
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1
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||
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|
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1A
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||
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2
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||
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|
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3
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||
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|
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4
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||
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|
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5
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||
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6
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|
Sept. 25, 2016
|
|
Dec. 27, 2015
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
116,801
|
|
|
$
|
196,696
|
|
Accounts receivable, less allowance for doubtful accounts of $8,663 and $8,836, respectively
|
318,259
|
|
|
330,473
|
|
||
Other receivables
|
23,814
|
|
|
36,114
|
|
||
Inventories
|
38,455
|
|
|
25,777
|
|
||
Assets held for sale
|
2,001
|
|
|
12,288
|
|
||
Prepaid income taxes
|
26,593
|
|
|
935
|
|
||
Prepaid expenses and other current assets
|
33,169
|
|
|
27,253
|
|
||
Total current assets
|
559,092
|
|
|
629,536
|
|
||
Property, plant and equipment, at cost less accumulated depreciation of $1,525,101 and $1,645,984, respectively
|
1,113,861
|
|
|
896,585
|
|
||
Goodwill
|
699,891
|
|
|
575,685
|
|
||
Intangible assets, net
|
187,104
|
|
|
59,713
|
|
||
Deferred income taxes (see Note 1)
|
112,765
|
|
|
201,991
|
|
||
Investments and other assets
|
83,126
|
|
|
64,289
|
|
||
Total assets
|
$
|
2,755,839
|
|
|
$
|
2,427,799
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
453,414
|
|
|
$
|
393,026
|
|
Dividends payable
|
—
|
|
|
18,501
|
|
||
Deferred income
|
137,760
|
|
|
78,967
|
|
||
Total current liabilities
|
591,174
|
|
|
490,494
|
|
||
Income taxes
|
21,545
|
|
|
22,221
|
|
||
Postretirement medical and life insurance liabilities (see Note 1)
|
87,731
|
|
|
87,594
|
|
||
Pension liabilities (see Note 1)
|
442,539
|
|
|
612,443
|
|
||
Long-term portion of revolving credit facility
|
385,000
|
|
|
—
|
|
||
Other noncurrent liabilities
|
162,736
|
|
|
156,471
|
|
||
Total liabilities
|
1,690,725
|
|
|
1,369,223
|
|
||
Equity
|
|
|
|
||||
Preferred stock of $0.01 par value per share, 5,000,000 shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock of $0.01 par value per share, 500,000,000 shares authorized, 116,589,000 and 115,668,957 shares issued and outstanding, respectively
|
1,166
|
|
|
1,156
|
|
||
Additional paid-in capital (see Note 1)
|
1,742,801
|
|
|
1,708,291
|
|
||
Retained earnings (deficit)
|
(14,049
|
)
|
|
22,553
|
|
||
Accumulated other comprehensive loss (see Note 1)
|
(664,804
|
)
|
|
(673,424
|
)
|
||
Total equity
|
1,065,114
|
|
|
1,058,576
|
|
||
Total liabilities and equity
|
$
|
2,755,839
|
|
|
$
|
2,427,799
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
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Sept. 25, 2016
|
|
Sept. 27, 2015
|
|
Sept. 25, 2016
|
|
Sept. 27, 2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
||||||
Advertising
|
$
|
429,053
|
|
|
$
|
384,149
|
|
|
$
|
1,190,108
|
|
|
$
|
1,191,902
|
|
Circulation
|
285,583
|
|
|
265,227
|
|
|
835,872
|
|
|
802,389
|
|
||||
Other
|
57,685
|
|
|
51,860
|
|
|
154,500
|
|
|
151,377
|
|
||||
Total operating revenues
|
772,321
|
|
|
701,236
|
|
|
2,180,480
|
|
|
2,145,668
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales and operating expenses
|
517,141
|
|
|
446,358
|
|
|
1,423,551
|
|
|
1,394,733
|
|
||||
Selling, general and administrative expenses
|
219,456
|
|
|
173,035
|
|
|
589,017
|
|
|
528,248
|
|
||||
Depreciation
|
30,638
|
|
|
25,291
|
|
|
83,889
|
|
|
73,677
|
|
||||
Amortization
|
5,003
|
|
|
3,096
|
|
|
7,961
|
|
|
10,103
|
|
||||
Facility consolidation and asset impairment charges
|
28,673
|
|
|
1,343
|
|
|
33,160
|
|
|
7,989
|
|
||||
Total operating expenses
|
800,911
|
|
|
649,123
|
|
|
2,137,578
|
|
|
2,014,750
|
|
||||
Operating income (loss)
|
(28,590
|
)
|
|
52,113
|
|
|
42,902
|
|
|
130,918
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Non-operating income (expense):
|
|
|
|
|
|
|
|
||||||||
Equity income (loss) in unconsolidated investees, net
|
(766
|
)
|
|
609
|
|
|
844
|
|
|
11,411
|
|
||||
Interest expense
|
(3,652
|
)
|
|
(1,582
|
)
|
|
(8,509
|
)
|
|
(1,760
|
)
|
||||
Other non-operating items, net
|
(176
|
)
|
|
(1,833
|
)
|
|
(2,964
|
)
|
|
19,782
|
|
||||
Total non-operating income (expense)
|
(4,594
|
)
|
|
(2,806
|
)
|
|
(10,629
|
)
|
|
29,433
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes
|
(33,184
|
)
|
|
49,307
|
|
|
32,273
|
|
|
160,351
|
|
||||
Provision (benefit) for income taxes
|
(8,942
|
)
|
|
10,141
|
|
|
12,949
|
|
|
34,611
|
|
||||
Net income (loss)
|
$
|
(24,242
|
)
|
|
$
|
39,166
|
|
|
$
|
19,324
|
|
|
$
|
125,740
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share – basic
|
$
|
(0.21
|
)
|
|
$
|
0.34
|
|
|
$
|
0.17
|
|
|
$
|
1.09
|
|
Earnings (loss) per share – diluted
|
$
|
(0.21
|
)
|
|
$
|
0.33
|
|
|
$
|
0.16
|
|
|
$
|
1.08
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
Sept. 25, 2016
|
|
Sept. 27, 2015
|
|
Sept. 25, 2016
|
|
Sept. 27, 2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(24,242
|
)
|
|
$
|
39,166
|
|
|
$
|
19,324
|
|
|
$
|
125,740
|
|
Other comprehensive income, before tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(23,367
|
)
|
|
(17,071
|
)
|
|
(62,440
|
)
|
|
(11,996
|
)
|
||||
Pension and other postretirement benefit items:
|
|
|
|
|
|
|
|
||||||||
Amortization of prior service credit, net
|
470
|
|
|
(650
|
)
|
|
1,539
|
|
|
(2,104
|
)
|
||||
Amortization of actuarial loss
|
16,025
|
|
|
13,909
|
|
|
47,212
|
|
|
42,369
|
|
||||
Remeasurement of pension liability
|
—
|
|
|
64,811
|
|
|
—
|
|
|
64,811
|
|
||||
Remeasurement of postretirement benefits liability
|
—
|
|
|
1,983
|
|
|
—
|
|
|
1,983
|
|
||||
Other
|
17,723
|
|
|
14,899
|
|
|
48,246
|
|
|
10,503
|
|
||||
Pension and other postretirement benefit items
|
34,218
|
|
|
94,952
|
|
|
96,997
|
|
|
117,562
|
|
||||
Other comprehensive income, before tax
|
10,851
|
|
|
77,881
|
|
|
34,557
|
|
|
105,566
|
|
||||
Income tax effect related to components of other comprehensive income
|
(8,965
|
)
|
|
(34,072
|
)
|
|
(25,937
|
)
|
|
(42,825
|
)
|
||||
Other comprehensive income, net of tax
|
1,886
|
|
|
43,809
|
|
|
8,620
|
|
|
62,741
|
|
||||
Comprehensive income (loss)
|
$
|
(22,356
|
)
|
|
$
|
82,975
|
|
|
$
|
27,944
|
|
|
$
|
188,481
|
|
|
Nine months ended
|
||||||
|
Sept. 25, 2016
|
|
Sept. 27, 2015
|
||||
|
|
|
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
19,324
|
|
|
$
|
125,740
|
|
Adjustments to reconcile net income to net cash flow from operating activities:
|
|
|
|
||||
Gain on acquisition
|
—
|
|
|
(21,799
|
)
|
||
Depreciation and amortization
|
91,850
|
|
|
83,780
|
|
||
Facility consolidation and asset impairment charges
|
33,160
|
|
|
7,989
|
|
||
Pension and other postretirement expenses, net of contributions
|
(79,729
|
)
|
|
(129,501
|
)
|
||
Equity income in unconsolidated investees, net
|
(844
|
)
|
|
(11,411
|
)
|
||
Stock-based compensation
|
14,986
|
|
|
12,359
|
|
||
Change in accounts receivable
|
67,605
|
|
|
55,326
|
|
||
Change in accounts payable and accrued liabilities
|
(32,933
|
)
|
|
14,420
|
|
||
Change in other assets and liabilities, net
|
(8,203
|
)
|
|
15,911
|
|
||
Net cash flow from operating activities
|
105,216
|
|
|
152,814
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(45,001
|
)
|
|
(30,945
|
)
|
||
Payments for acquisitions, net of cash acquired
|
(462,379
|
)
|
|
(28,668
|
)
|
||
Payments for investments
|
(12,402
|
)
|
|
(2,750
|
)
|
||
Proceeds from investments
|
151
|
|
|
12,402
|
|
||
Proceeds from sale of certain assets
|
16,998
|
|
|
16,324
|
|
||
Changes in other investing activities
|
16
|
|
|
—
|
|
||
Net cash flow used for investing activities
|
(502,617
|
)
|
|
(33,637
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Dividends paid
|
(74,437
|
)
|
|
—
|
|
||
Proceeds from issuance of common stock upon settlement of stock awards
|
9,714
|
|
|
2,727
|
|
||
Proceeds from borrowings under revolving credit agreement
|
455,000
|
|
|
—
|
|
||
Repayments of borrowings under revolving credit agreement
|
(70,000
|
)
|
|
—
|
|
||
Changes in other financing activities
|
(124
|
)
|
|
(1,218
|
)
|
||
Transactions with former parent, net
|
—
|
|
|
(49,701
|
)
|
||
Net cash flow from (used for) financing activities
|
320,153
|
|
|
(48,192
|
)
|
||
Effect of currency exchange rate change on cash
|
(2,647
|
)
|
|
(160
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
(79,895
|
)
|
|
70,825
|
|
||
Balance of cash and cash equivalents at beginning of period
|
196,696
|
|
|
71,947
|
|
||
Balance of cash and cash equivalents at end of period
|
$
|
116,801
|
|
|
$
|
142,772
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
||||
Cash paid for taxes, net of refunds
|
$
|
25,236
|
|
|
$
|
6,545
|
|
Cash paid for interest
|
$
|
7,821
|
|
|
$
|
567
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Accrued capital expenditures
|
$
|
1,643
|
|
|
$
|
—
|
|
Accrued dividends
|
$
|
—
|
|
|
$
|
18,460
|
|
In thousands
|
|
||
Cash acquired
|
$
|
13,195
|
|
Other current assets
|
15,058
|
|
|
Property, plant and equipment
|
13,486
|
|
|
Intangible assets
|
88,500
|
|
|
Goodwill
|
114,470
|
|
|
Other noncurrent assets
|
9,641
|
|
|
Total assets acquired
|
254,350
|
|
|
Current liabilities
|
49,800
|
|
|
Noncurrent liabilities
|
28,807
|
|
|
Total liabilities assumed
|
78,607
|
|
|
Net assets acquired
|
$
|
175,743
|
|
In thousands
|
|
||
Cash acquired
|
$
|
36,825
|
|
Other current assets
|
54,571
|
|
|
Property, plant and equipment
|
265,641
|
|
|
Intangible assets
|
42,880
|
|
|
Goodwill
|
25,259
|
|
|
Other noncurrent assets
|
3,825
|
|
|
Total assets acquired
|
429,001
|
|
|
Current liabilities
|
76,709
|
|
|
Noncurrent liabilities
|
57,246
|
|
|
Total liabilities assumed
|
133,955
|
|
|
Net assets acquired
|
$
|
295,046
|
|
|
Unaudited
|
||||||
|
Nine months ended
|
||||||
In thousands
|
Sept. 25, 2016
|
|
Sept. 27, 2015
|
||||
Total revenues
|
$
|
2,542,117
|
|
|
$
|
2,823,440
|
|
Net income
|
$
|
12,346
|
|
|
$
|
44,090
|
|
Earnings per share - diluted
|
$
|
0.10
|
|
|
$
|
0.38
|
|
In thousands
|
|
||
Current assets
|
$
|
12,310
|
|
Property, plant and equipment
|
20,672
|
|
|
Intangible assets
|
28,440
|
|
|
Goodwill
|
30,703
|
|
|
Total assets acquired
|
92,125
|
|
|
Current liabilities
|
10,860
|
|
|
Noncurrent liabilities
|
14,211
|
|
|
Total liabilities assumed
|
25,071
|
|
|
Net assets acquired
|
$
|
67,054
|
|
In thousands
|
Severance Related to Acquisitions
|
|
USA TODAY 2015 EROP
|
|
August 2015 EROP
|
|
Various One-Time Actions
|
|
Ongoing Severance Plan
|
||||||||||
Balance at Dec. 27, 2015
|
$
|
—
|
|
|
$
|
3,337
|
|
|
$
|
28,393
|
|
|
$
|
9,818
|
|
|
$
|
4,035
|
|
Expense
|
15,383
|
|
|
—
|
|
|
837
|
|
|
10,357
|
|
|
254
|
|
|||||
Payments
|
(6,832
|
)
|
|
(2,407
|
)
|
|
(27,034
|
)
|
|
(12,695
|
)
|
|
(2,504
|
)
|
|||||
Adjustments
|
941
|
|
|
(930
|
)
|
|
864
|
|
|
(2,400
|
)
|
|
—
|
|
|||||
Balance at Sept. 25, 2016
|
$
|
9,492
|
|
|
$
|
—
|
|
|
$
|
3,060
|
|
|
$
|
5,080
|
|
|
$
|
1,785
|
|
In thousands
|
Sept. 25, 2016
|
|
Dec. 27, 2015
|
||||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Gross
|
|
Accumulated Amortization
|
||||||||
Goodwill
|
$
|
699,891
|
|
|
$
|
—
|
|
|
$
|
575,685
|
|
|
$
|
—
|
|
Indefinite-lived intangibles:
|
|
|
|
|
|
|
|
||||||||
Mastheads
|
62,568
|
|
|
—
|
|
|
31,521
|
|
|
—
|
|
||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
||||||||
Developed technology
|
54,000
|
|
|
(2,350
|
)
|
|
—
|
|
|
—
|
|
||||
Customer relationships
|
104,718
|
|
|
(44,200
|
)
|
|
68,005
|
|
|
(39,813
|
)
|
||||
Other
|
24,782
|
|
|
(12,414
|
)
|
|
11,478
|
|
|
(11,478
|
)
|
In thousands
|
|
|
|
|
|
||||||
|
Publishing
|
|
ReachLocal
|
|
Consolidated
|
||||||
Balance at Dec. 27, 2015:
|
|
|
|
|
|
||||||
Goodwill
|
$
|
7,297,752
|
|
|
$
|
—
|
|
|
$
|
7,297,752
|
|
Accumulated impairment losses
|
(6,722,067
|
)
|
|
—
|
|
|
(6,722,067
|
)
|
|||
Net balance at Dec. 27, 2015
|
575,685
|
|
|
—
|
|
|
575,685
|
|
|||
Activity during the period:
|
|
|
|
|
|
||||||
Acquisitions and adjustments (see Note 2)
|
34,487
|
|
|
114,470
|
|
|
148,957
|
|
|||
Foreign currency exchange rate changes
|
(24,751
|
)
|
|
—
|
|
|
(24,751
|
)
|
|||
Total
|
9,736
|
|
|
114,470
|
|
|
124,206
|
|
|||
Balance at Sept. 25, 2016:
|
|
|
|
|
|
||||||
Goodwill
|
7,028,359
|
|
|
114,470
|
|
|
7,142,829
|
|
|||
Accumulated impairment losses
|
(6,442,938
|
)
|
|
—
|
|
|
(6,442,938
|
)
|
|||
Net balance at Sept. 25, 2016
|
$
|
585,421
|
|
|
$
|
114,470
|
|
|
$
|
699,891
|
|
In thousands
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
Sept. 25, 2016
|
|
Sept. 27, 2015
|
|
Sept. 25, 2016
|
|
Sept. 27, 2015
|
||||||||
Service cost-benefits earned during the period
|
$
|
49
|
|
|
$
|
75
|
|
|
$
|
146
|
|
|
$
|
272
|
|
Interest cost on net benefit obligation
|
964
|
|
|
989
|
|
|
2,838
|
|
|
2,961
|
|
||||
Amortization of prior service credit
|
(1,198
|
)
|
|
(2,355
|
)
|
|
(3,458
|
)
|
|
(7,277
|
)
|
||||
Amortization of actuarial loss
|
202
|
|
|
315
|
|
|
266
|
|
|
1,102
|
|
||||
Net periodic postretirement benefit expense (credit)
|
$
|
17
|
|
|
$
|
(976
|
)
|
|
$
|
(208
|
)
|
|
$
|
(2,942
|
)
|
In thousands
|
2016
|
|
2015
|
||||
Balance at beginning of period
|
$
|
1,058,576
|
|
|
$
|
937,472
|
|
Comprehensive income:
|
|
|
|
||||
Net income
|
19,324
|
|
|
125,740
|
|
||
Other comprehensive income (see Note 1)
|
8,620
|
|
|
62,741
|
|
||
Total comprehensive income
|
27,944
|
|
|
188,481
|
|
||
Dividends declared
|
(55,936
|
)
|
|
(18,462
|
)
|
||
Stock-based compensation
|
14,986
|
|
|
12,359
|
|
||
Other activity (see Note 1)
|
19,544
|
|
|
3,409
|
|
||
Transactions with our former parent, net
|
—
|
|
|
(43,145
|
)
|
||
Balance at end of period
|
$
|
1,065,114
|
|
|
$
|
1,080,114
|
|
In thousands
|
Retirement Plans
|
|
Foreign Currency Translation
|
|
Total
|
||||||
Balance at Dec. 27, 2015
|
$
|
(1,058,234
|
)
|
|
$
|
384,810
|
|
|
$
|
(673,424
|
)
|
Other comprehensive income (loss) before reclassifications
|
39,751
|
|
|
(62,440
|
)
|
|
(22,689
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
31,309
|
|
|
—
|
|
|
31,309
|
|
|||
Other comprehensive income (loss)
|
71,060
|
|
|
(62,440
|
)
|
|
8,620
|
|
|||
Balance at Sept. 25, 2016
|
$
|
(987,174
|
)
|
|
$
|
322,370
|
|
|
$
|
(664,804
|
)
|
|
|
|
|
|
|
||||||
Balance at Dec. 28, 2014
|
$
|
(1,082,312
|
)
|
|
$
|
404,200
|
|
|
$
|
(678,112
|
)
|
Other comprehensive income (loss) before reclassifications
|
49,147
|
|
|
(11,996
|
)
|
|
37,151
|
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
25,590
|
|
|
—
|
|
|
25,590
|
|
|||
Other comprehensive income (loss)
|
74,737
|
|
|
(11,996
|
)
|
|
62,741
|
|
|||
Transactions with former parent
|
7,237
|
|
|
—
|
|
|
7,237
|
|
|||
Balance at Sept. 27, 2015
|
$
|
(1,000,338
|
)
|
|
$
|
392,204
|
|
|
$
|
(608,134
|
)
|
In thousands
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
Sept. 25, 2016
|
|
Sept. 27, 2015
|
|
Sept. 25, 2016
|
|
Sept. 27, 2015
|
||||||||
Amortization of prior service credit, net
|
$
|
470
|
|
|
$
|
(650
|
)
|
|
$
|
1,539
|
|
|
$
|
(2,104
|
)
|
Amortization of actuarial loss
|
16,025
|
|
|
13,909
|
|
|
47,212
|
|
|
42,369
|
|
||||
Total reclassifications, before tax
|
16,495
|
|
|
13,259
|
|
|
48,751
|
|
|
40,265
|
|
||||
Income tax effect
|
(5,936
|
)
|
|
(5,043
|
)
|
|
(17,442
|
)
|
|
(14,675
|
)
|
||||
Total reclassifications, net of tax
|
$
|
10,559
|
|
|
$
|
8,216
|
|
|
$
|
31,309
|
|
|
$
|
25,590
|
|
In thousands, except per share data
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
Sept. 25, 2016
|
|
Sept. 27, 2015
|
|
Sept. 25, 2016
|
|
Sept. 27, 2015
|
||||||||
Net income (loss)
|
$
|
(24,242
|
)
|
|
$
|
39,166
|
|
|
$
|
19,324
|
|
|
$
|
125,740
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding - basic
|
116,556
|
|
|
115,186
|
|
|
116,461
|
|
|
115,035
|
|
||||
Effect of dilutive securities
|
|
|
|
|
|
|
|
||||||||
Restricted stock units
|
—
|
|
|
1,312
|
|
|
1,321
|
|
|
437
|
|
||||
Performance share units
|
—
|
|
|
1,117
|
|
|
761
|
|
|
373
|
|
||||
Stock options
|
—
|
|
|
553
|
|
|
243
|
|
|
184
|
|
||||
Weighted average number of shares outstanding - diluted
|
116,556
|
|
|
118,168
|
|
|
118,786
|
|
|
116,029
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share - basic
|
$
|
(0.21
|
)
|
|
$
|
0.34
|
|
|
$
|
0.17
|
|
|
$
|
1.09
|
|
Earnings (loss) per share - diluted
|
$
|
(0.21
|
)
|
|
$
|
0.33
|
|
|
$
|
0.16
|
|
|
$
|
1.08
|
|
In thousands
|
Publishing
|
|
ReachLocal
|
|
Corporate and Other
|
|
Consolidated
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Advertising
|
$
|
397,214
|
|
|
$
|
31,839
|
|
|
$
|
—
|
|
|
$
|
429,053
|
|
Circulation
|
285,583
|
|
|
—
|
|
|
—
|
|
|
285,583
|
|
||||
Other
|
53,773
|
|
|
3,138
|
|
|
774
|
|
|
57,685
|
|
||||
Total revenues
|
$
|
736,570
|
|
|
$
|
34,977
|
|
|
$
|
774
|
|
|
$
|
772,321
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA
|
$
|
87,490
|
|
|
$
|
(6,744
|
)
|
|
$
|
(25,469
|
)
|
|
$
|
55,277
|
|
|
|
|
|
|
|
|
|
||||||||
2015
|
|
|
|
|
|
|
|
||||||||
Advertising
|
$
|
384,149
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
384,149
|
|
Circulation
|
265,227
|
|
|
—
|
|
|
—
|
|
|
265,227
|
|
||||
Other
|
51,822
|
|
|
—
|
|
|
38
|
|
|
51,860
|
|
||||
Total revenues
|
$
|
701,198
|
|
|
$
|
—
|
|
|
$
|
38
|
|
|
$
|
701,236
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA
|
$
|
124,806
|
|
|
$
|
—
|
|
|
$
|
(27,796
|
)
|
|
$
|
97,010
|
|
In thousands
|
Publishing
|
|
ReachLocal
|
|
Corporate and Other
|
|
Consolidated
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Advertising
|
$
|
1,158,269
|
|
|
$
|
31,839
|
|
|
$
|
—
|
|
|
$
|
1,190,108
|
|
Circulation
|
835,872
|
|
|
—
|
|
|
—
|
|
|
835,872
|
|
||||
Other
|
148,480
|
|
|
3,138
|
|
|
2,882
|
|
|
154,500
|
|
||||
Total revenues
|
$
|
2,142,621
|
|
|
$
|
34,977
|
|
|
$
|
2,882
|
|
|
$
|
2,180,480
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA
|
$
|
301,229
|
|
|
$
|
(6,744
|
)
|
|
$
|
(71,887
|
)
|
|
$
|
222,598
|
|
|
|
|
|
|
|
|
|
||||||||
2015
|
|
|
|
|
|
|
|
||||||||
Advertising
|
$
|
1,191,902
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,191,902
|
|
Circulation
|
802,389
|
|
|
—
|
|
|
—
|
|
|
802,389
|
|
||||
Other
|
151,339
|
|
|
—
|
|
|
38
|
|
|
151,377
|
|
||||
Total revenues
|
$
|
2,145,630
|
|
|
$
|
—
|
|
|
$
|
38
|
|
|
$
|
2,145,668
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA
|
$
|
312,339
|
|
|
$
|
—
|
|
|
$
|
(47,171
|
)
|
|
$
|
265,168
|
|
In thousands
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
Sept. 25, 2016
|
|
Sept. 27, 2015
|
|
Sept. 25, 2016
|
|
Sept. 27, 2015
|
||||||||
Net income (loss) (GAAP basis)
|
$
|
(24,242
|
)
|
|
$
|
39,166
|
|
|
$
|
19,324
|
|
|
$
|
125,740
|
|
Provision (benefit) for income taxes
|
(8,942
|
)
|
|
10,141
|
|
|
12,949
|
|
|
34,611
|
|
||||
Equity (income) loss in unconsolidated investees, net
|
766
|
|
|
(609
|
)
|
|
(844
|
)
|
|
(11,411
|
)
|
||||
Interest expense
|
3,652
|
|
|
1,582
|
|
|
8,509
|
|
|
1,760
|
|
||||
Other non-operating items, net
|
176
|
|
|
1,833
|
|
|
2,964
|
|
|
(19,782
|
)
|
||||
Operating income (loss) (GAAP basis)
|
(28,590
|
)
|
|
52,113
|
|
|
42,902
|
|
|
130,918
|
|
||||
Early retirement program
|
2
|
|
|
10,572
|
|
|
837
|
|
|
18,373
|
|
||||
Severance-related charges
|
5,135
|
|
|
5,872
|
|
|
25,994
|
|
|
25,386
|
|
||||
Acquisition-related expenses
|
14,416
|
|
|
—
|
|
|
29,055
|
|
|
—
|
|
||||
Facility consolidation and asset impairment charges
|
28,673
|
|
|
66
|
|
|
31,960
|
|
|
6,711
|
|
||||
Depreciation
|
30,638
|
|
|
25,291
|
|
|
83,889
|
|
|
73,677
|
|
||||
Amortization
|
5,003
|
|
|
3,096
|
|
|
7,961
|
|
|
10,103
|
|
||||
Adjusted EBITDA (non-GAAP basis)
|
$
|
55,277
|
|
|
$
|
97,010
|
|
|
$
|
222,598
|
|
|
$
|
265,168
|
|
|
Nine months ended
|
||
In thousands
|
Sept. 27, 2015
(f)
|
||
Corporate allocations
(a)
|
$
|
25,832
|
|
Occupancy
(b)
|
2,884
|
|
|
Depreciation
(c)
|
4,067
|
|
|
Other support costs
(d)
|
6,249
|
|
|
Cost recoveries
(e)
|
(6,055
|
)
|
|
Total
|
$
|
32,977
|
|
(f)
|
Costs were allocated from our former parent to us up to the spin date. No costs were allocated to us by our former parent after the spin-off.
|
•
|
Acquisition of ReachLocal
– On
August 9, 2016
, we completed the acquisition of 100% of the outstanding common stock of ReachLocal, which offers online marketing, digital advertising, software-as-a-service, and web presence products and solutions to small and medium sized businesses. Our results reflect revenues of
$35.0 million
in the
third quarter
of
2016
since the acquisition date. In connection with the ReachLocal acquisition, we established a newly formed separate reportable segment that reflects its results since the acquisition date.
|
•
|
Acquisition of Certain Assets of North Jersey Media Group ("NJMG")
– On
July 6, 2016
, we completed the acquisition of certain assets of North Jersey Media Group, Inc. ("NJMG"), a media company with print and digital publishing operations serving primarily the northern New Jersey market. Our results reflect revenues of
$18.7 million
in the
third quarter
of
2016
since the acquisition date.
|
•
|
Acquisition of Journal Media Group ("JMG")
– On April 8, 2016, we completed the acquisition of 100% of the outstanding common stock of JMG, a media company with print and digital publishing operations serving
15
U.S. markets in
9
states. Our results reflect revenues of
$98.5 million
in the
third quarter
of
2016
and
$191.1 million
year-to-date
2016
since the acquisition.
|
•
|
Acquisition of Texas-New Mexico Newspaper Partnership ("TNP") and Romanes Media Group ("RMG")
– On June 1, 2015, we completed the acquisition of the remaining
59.4%
interest in the TNP that we did not own from Digital First Media. We completed the acquisition through the assignment of our
19.5%
interest in the California Newspapers Partnership ("CNP") and additional cash consideration.
|
•
|
Facility Consolidation and Asset Impairment Charges
– We evaluated the carrying values of property, plant and equipment at certain sites because of facility consolidation efforts. We revised the useful lives of certain assets to reflect the use of those assets over a shortened period as a result. We recorded pre-tax charges for facility consolidations and asset impairments of
$28.7 million
and
$1.3 million
in the
third quarter
of
2016
and
2015
, respectively, and
$33.2 million
and
$8.0 million
year-to-date
2016
and
2015
, respectively.
|
•
|
Severance-related Expenses
– We initiated various cost reducing, severance-related actions. In August 2015, we announced an EROP for employees in certain corporate departments and publishing sites. Related to this action, we recorded no expense for
third quarter
of
2016
,
$0.8 million
in expense for the
nine
months ended
September 25, 2016
, and
$10.6 million
in expense for the
three
and
nine
months ended
September 27, 2015
.
|
•
|
New Digital Agreements
– Beginning in the third quarter of 2015 and in conjunction with the execution of new agreements with businesses owned by our former parent following the separation (principally Cars.com and CareerBuilder), we began reporting wholesale fees associated with sales of certain third party digital advertising products and services on a net basis as a reduction of the associated digital advertising revenues rather than in operating expenses in our unaudited consolidated
|
•
|
Foreign Currency
– Our U.K. publishing operations are conducted through our Newsquest subsidiary. In addition, ReachLocal has foreign operations in regions such as Europe, Asia-Pacific, and South America. Our earnings from operations in foreign regions are translated into U.S. dollars at average exchange rates prevailing during the period, and assets and liabilities are translated at exchange rates in effect at the balance sheet date. Therefore, a strengthening in those exchange rates will improve our foreign revenues and earnings contributions to consolidated results, and a weakening of those exchange rates will have a negative impact.
|
In thousands
|
Quarter-to-Date
|
|
Year-to-Date
|
||||||||||||||||||
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Publishing
|
$
|
736,570
|
|
|
$
|
701,198
|
|
|
5
|
%
|
|
$
|
2,142,621
|
|
|
$
|
2,145,630
|
|
|
—
|
%
|
ReachLocal
|
34,977
|
|
|
—
|
|
|
***
|
|
|
34,977
|
|
|
—
|
|
|
***
|
|
||||
Corporate and Other
|
774
|
|
|
38
|
|
|
***
|
|
|
2,882
|
|
|
38
|
|
|
***
|
|
||||
Total operating revenues
|
772,321
|
|
|
701,236
|
|
|
10
|
%
|
|
2,180,480
|
|
|
2,145,668
|
|
|
2
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Publishing
|
710,230
|
|
|
618,190
|
|
|
15
|
%
|
|
1,976,276
|
|
|
1,963,163
|
|
|
1
|
%
|
||||
ReachLocal
|
46,207
|
|
|
—
|
|
|
***
|
|
|
46,207
|
|
|
—
|
|
|
***
|
|
||||
Corporate and Other
|
44,474
|
|
|
30,933
|
|
|
44
|
%
|
|
115,095
|
|
|
51,587
|
|
|
***
|
|
||||
Total operating expenses
|
800,911
|
|
|
649,123
|
|
|
23
|
%
|
|
2,137,578
|
|
|
2,014,750
|
|
|
6
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income (loss)
|
(28,590
|
)
|
|
52,113
|
|
|
***
|
|
|
42,902
|
|
|
130,918
|
|
|
(67
|
%)
|
||||
Non-operating (expense) income, net
|
(4,594
|
)
|
|
(2,806
|
)
|
|
64
|
%
|
|
(10,629
|
)
|
|
29,433
|
|
|
***
|
|
||||
Income (loss) before income taxes
|
(33,184
|
)
|
|
49,307
|
|
|
***
|
|
|
32,273
|
|
|
160,351
|
|
|
(80
|
%)
|
||||
Provision (benefit) for income taxes
|
(8,942
|
)
|
|
10,141
|
|
|
***
|
|
|
12,949
|
|
|
34,611
|
|
|
(63
|
%)
|
||||
Net income (loss)
|
$
|
(24,242
|
)
|
|
$
|
39,166
|
|
|
***
|
|
|
$
|
19,324
|
|
|
$
|
125,740
|
|
|
(85
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings (loss) per share
|
$
|
(0.21
|
)
|
|
$
|
0.33
|
|
|
***
|
|
|
$
|
0.16
|
|
|
$
|
1.08
|
|
|
(85
|
%)
|
In thousands
|
Quarter-to-Date
|
|
Year-to-Date
|
||||||||||||||||||
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Advertising
|
$
|
397,214
|
|
|
$
|
384,149
|
|
|
3
|
%
|
|
$
|
1,158,269
|
|
|
$
|
1,191,902
|
|
|
(3
|
%)
|
Circulation
|
285,583
|
|
|
265,227
|
|
|
8
|
%
|
|
835,872
|
|
|
802,389
|
|
|
4
|
%
|
||||
Other
|
53,773
|
|
|
51,822
|
|
|
4
|
%
|
|
148,480
|
|
|
151,339
|
|
|
(2
|
%)
|
||||
Total operating revenues
|
736,570
|
|
|
701,198
|
|
|
5
|
%
|
|
2,142,621
|
|
|
2,145,630
|
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
491,617
|
|
|
445,946
|
|
|
10
|
%
|
|
1,395,676
|
|
|
1,393,278
|
|
|
—
|
%
|
||||
Selling, general, and administrative expenses
|
162,174
|
|
|
143,863
|
|
|
13
|
%
|
|
470,921
|
|
|
480,744
|
|
|
(2
|
%)
|
||||
Depreciation and amortization
|
27,766
|
|
|
27,038
|
|
|
3
|
%
|
|
76,519
|
|
|
81,152
|
|
|
(6
|
%)
|
||||
Facility consolidation and impairment charges
|
28,673
|
|
|
1,343
|
|
|
***
|
|
|
33,160
|
|
|
7,989
|
|
|
***
|
|
||||
Total operating expenses
|
710,230
|
|
|
618,190
|
|
|
15
|
%
|
|
1,976,276
|
|
|
1,963,163
|
|
|
1
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income
|
$
|
26,340
|
|
|
$
|
83,008
|
|
|
(68
|
%)
|
|
$
|
166,345
|
|
|
$
|
182,467
|
|
|
(9
|
%)
|
•
|
Reported revenues or expenses
|
•
|
Less: revenues or expenses for our 2016 publishing acquisitions from the date of the acquisition through the end of the period presented
|
•
|
Less: revenues or expenses for our 2015 publishing acquisitions from the beginning of fiscal year 2016 through the first year anniversary of their applicable acquisition date
|
•
|
Less: operations exited in 2015
|
In thousands
|
Quarter-to-Date
|
||
|
2016
|
||
Operating revenues:
|
|
||
Advertising
|
$
|
31,839
|
|
Other
|
3,138
|
|
|
Total operating revenues
|
34,977
|
|
|
|
|
||
Operating expenses:
|
|
||
Cost of sales
|
24,485
|
|
|
Selling, general, and administrative expenses
|
17,798
|
|
|
Depreciation and amortization
|
3,924
|
|
|
Total operating expenses
|
46,207
|
|
|
|
|
||
Operating loss
|
$
|
(11,230
|
)
|
At period end
|
Quarter-to-Date
|
|
|
2016
|
|
Active Clients
(1)
|
15,900
|
|
Active Product Units
(2)
|
27,900
|
|
In thousands
|
Year-to-date
|
||||||
|
2016
|
|
2015
|
||||
Net cash flow from operating activities
|
$
|
105,216
|
|
|
$
|
152,814
|
|
Net cash flow used for investing activities
|
(502,617
|
)
|
|
(33,637
|
)
|
||
Net cash flow from (used for) financing activities
|
320,153
|
|
|
(48,192
|
)
|
||
Effect of currency exchange rate change
|
(2,647
|
)
|
|
(160
|
)
|
||
Net decrease in cash
|
$
|
(79,895
|
)
|
|
$
|
70,825
|
|
In thousands
|
Quarter-to-Date
|
|
Year-to-Date
|
||||||||||||||||||
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||
Net income (loss) (GAAP basis)
|
$
|
(24,242
|
)
|
|
$
|
39,166
|
|
|
***
|
|
|
$
|
19,324
|
|
|
$
|
125,740
|
|
|
(85
|
%)
|
Provision (benefit) for income taxes
|
(8,942
|
)
|
|
10,141
|
|
|
***
|
|
|
12,949
|
|
|
34,611
|
|
|
(63
|
%)
|
||||
Equity (income) loss in unconsolidated investees, net
|
766
|
|
|
(609
|
)
|
|
***
|
|
|
(844
|
)
|
|
(11,411
|
)
|
|
(93
|
%)
|
||||
Interest expense
|
3,652
|
|
|
1,582
|
|
|
***
|
|
|
8,509
|
|
|
1,760
|
|
|
***
|
|
||||
Other non-operating items, net
|
176
|
|
|
1,833
|
|
|
(90
|
%)
|
|
2,964
|
|
|
(19,782
|
)
|
|
***
|
|
||||
Operating income (loss) (GAAP basis)
|
(28,590
|
)
|
|
52,113
|
|
|
***
|
|
|
42,902
|
|
|
130,918
|
|
|
(67
|
%)
|
||||
Early retirement program
|
2
|
|
|
10,572
|
|
|
(100
|
%)
|
|
837
|
|
|
18,373
|
|
|
(95
|
%)
|
||||
Severance-related charges
|
5,135
|
|
|
5,872
|
|
|
(13
|
%)
|
|
25,994
|
|
|
25,386
|
|
|
2
|
%
|
||||
Acquisition-related expenses
|
14,416
|
|
|
—
|
|
|
***
|
|
|
29,055
|
|
|
—
|
|
|
***
|
|
||||
Facility consolidation and asset impairment charges
|
28,673
|
|
|
66
|
|
|
***
|
|
|
31,960
|
|
|
6,711
|
|
|
***
|
|
||||
Depreciation
|
30,638
|
|
|
25,291
|
|
|
21
|
%
|
|
83,889
|
|
|
73,677
|
|
|
14
|
%
|
||||
Amortization
|
5,003
|
|
|
3,096
|
|
|
62
|
%
|
|
7,961
|
|
|
10,103
|
|
|
(21
|
%)
|
||||
Adjusted EBITDA (non-GAAP basis)
|
$
|
55,277
|
|
|
$
|
97,010
|
|
|
(43
|
%)
|
|
$
|
222,598
|
|
|
$
|
265,168
|
|
|
(16
|
%)
|
In thousands
|
Quarter-to-Date
|
|
Year-to-Date
|
||||||||||||||||||
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||
Operating income (GAAP basis)
|
$
|
26,340
|
|
|
$
|
83,008
|
|
|
(68
|
%)
|
|
$
|
166,345
|
|
|
$
|
182,467
|
|
|
(9
|
%)
|
Early retirement program
|
2
|
|
|
8,822
|
|
|
(100
|
%)
|
|
837
|
|
|
16,623
|
|
|
(95
|
%)
|
||||
Severance-related charges
|
4,573
|
|
|
5,872
|
|
|
(22
|
%)
|
|
25,432
|
|
|
25,386
|
|
|
—
|
%
|
||||
Acquisition-related expenses
|
136
|
|
|
—
|
|
|
***
|
|
|
136
|
|
|
—
|
|
|
***
|
|
||||
Facility consolidation and asset impairment charges
|
28,673
|
|
|
66
|
|
|
***
|
|
|
31,960
|
|
|
6,711
|
|
|
***
|
|
||||
Depreciation
|
25,926
|
|
|
23,942
|
|
|
8
|
%
|
|
71,721
|
|
|
71,049
|
|
|
1
|
%
|
||||
Amortization
|
1,840
|
|
|
3,096
|
|
|
(41
|
%)
|
|
4,798
|
|
|
10,103
|
|
|
(53
|
%)
|
||||
Adjusted EBITDA (non-GAAP basis)
|
$
|
87,490
|
|
|
$
|
124,806
|
|
|
(30
|
%)
|
|
$
|
301,229
|
|
|
$
|
312,339
|
|
|
(4
|
%)
|
In thousands
|
Quarter-to-Date
|
||
|
2016
|
||
Operating income (GAAP basis)
|
$
|
(11,230
|
)
|
Severance-related charges
|
562
|
|
|
Depreciation
|
761
|
|
|
Amortization
|
3,163
|
|
|
Adjusted EBITDA (non-GAAP basis)
|
$
|
(6,744
|
)
|
In thousands, except per share data
|
Quarter-to-Date
|
|
Year-to-Date
|
||||||||||||||||||
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||
Early retirement program
|
$
|
2
|
|
|
$
|
10,572
|
|
|
(100
|
%)
|
|
$
|
837
|
|
|
$
|
18,373
|
|
|
(95
|
%)
|
Severance-related charges
|
5,135
|
|
|
5,872
|
|
|
(13
|
%)
|
|
25,994
|
|
|
25,386
|
|
|
2
|
%
|
||||
Acquisition-related expenses
|
14,416
|
|
|
1,022
|
|
|
***
|
|
|
29,055
|
|
|
(19,599
|
)
|
|
***
|
|
||||
Facility consolidation and asset impairment charges
|
29,761
|
|
|
66
|
|
|
***
|
|
|
33,111
|
|
|
6,711
|
|
|
***
|
|
||||
Pre-tax impact
|
49,314
|
|
|
17,532
|
|
|
***
|
|
|
88,997
|
|
|
30,871
|
|
|
***
|
|
||||
Income tax impact of above items
|
(17,757
|
)
|
|
(6,373
|
)
|
|
***
|
|
|
(30,414
|
)
|
|
(10,337
|
)
|
|
***
|
|
||||
Impact of items affecting comparability on net income
|
$
|
31,557
|
|
|
$
|
11,159
|
|
|
***
|
|
|
$
|
58,583
|
|
|
$
|
20,534
|
|
|
***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) (GAAP basis)
|
$
|
(24,242
|
)
|
|
$
|
39,166
|
|
|
***
|
|
|
$
|
19,324
|
|
|
$
|
125,740
|
|
|
(85
|
%)
|
Impact of items affecting comparability on net income (loss)
|
31,557
|
|
|
11,159
|
|
|
***
|
|
|
58,583
|
|
|
20,534
|
|
|
***
|
|
||||
Adjusted net income (non-GAAP basis)
|
$
|
7,315
|
|
|
$
|
50,325
|
|
|
(85
|
%)
|
|
$
|
77,907
|
|
|
$
|
146,274
|
|
|
(47
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per share - diluted (GAAP basis)
|
$
|
(0.21
|
)
|
|
$
|
0.33
|
|
|
***
|
|
|
$
|
0.16
|
|
|
$
|
1.08
|
|
|
(85
|
%)
|
Impact of items affecting comparability on net income (loss)
|
0.27
|
|
|
0.10
|
|
|
***
|
|
|
0.50
|
|
|
0.18
|
|
|
***
|
|
||||
Adjusted earnings per share - diluted (non-GAAP basis)
|
$
|
0.06
|
|
|
$
|
0.43
|
|
|
(86
|
%)
|
|
$
|
0.66
|
|
|
$
|
1.26
|
|
|
(48
|
%)
|
Diluted weighted average number of common shares outstanding
|
116,556
|
|
|
118,168
|
|
|
(1
|
%)
|
|
118,786
|
|
|
116,029
|
|
|
2
|
%
|
In thousands
|
Year-to-Date
|
||||||
|
2016
|
|
2015
|
||||
Net cash flow from operating activities (GAAP basis)
|
$
|
105,216
|
|
|
$
|
152,814
|
|
Capital expenditures
|
(45,001
|
)
|
|
(30,945
|
)
|
||
Free cash flow (non-GAAP basis)
|
$
|
60,215
|
|
|
$
|
121,869
|
|
•
|
Competitive pressures in the markets in which we operate;
|
•
|
Increased consolidation among major retailers or other events which may adversely affect business operations of major customers and depress the level of local and national advertising;
|
•
|
Macroeconomic trends and conditions;
|
•
|
Economic downturns leading to a continuing or accelerated decrease in circulation or local, national, or classified advertising;
|
•
|
Potential disruption or interruption of our operations due to accidents, extraordinary weather events, civil unrest, political events, terrorism, or cybersecurity attacks;
|
•
|
An accelerated decline in general print readership and/or advertiser patterns as a result of competitive alternative media or other factors;
|
•
|
Our inability to adapt to technological changes or grow our online business;
|
•
|
An increase in newsprint costs over the levels anticipated;
|
•
|
Labor relations including, but not limited to, labor disputes which may cause revenue declines or increased labor costs;
|
•
|
Risks and uncertainties related to our ability to successfully integrate JMG's, NJMG's, and ReachLocal's operations and employees with our existing business;
|
•
|
Our ability to identify, obtain satisfactory financing for, and complete future acquisitions on favorable terms and to realize benefits or synergies from acquisitions of new businesses or dispositions of existing businesses or to operate businesses effectively following acquisitions or divestitures;
|
•
|
Our ability to attract and retain key employees;
|
•
|
Rapid technological changes and frequent new product introductions prevalent in electronic publishing and online business;
|
•
|
An increase in interest rates;
|
•
|
A weakening in the British pound sterling to U.S. dollar exchange rate;
|
•
|
Volatility in financial and credit markets, which could affect our ability to raise funds through debt or equity issuances and otherwise affect our ability to access the credit and capital markets at the times and in the amounts needed and on acceptable terms;
|
•
|
Changes in the regulatory environment, which could encumber or impede our efforts to improve operating results or the value of assets;
|
•
|
Unfavorable credit rating actions, which could affect the availability and cost of future financing;
|
•
|
Adverse outcomes in proceedings with governmental authorities or administrative agencies;
|
•
|
An other than temporary decline in operating results and enterprise value that could lead to non-cash goodwill, other intangible asset, investment, or property, plant, and equipment impairment charges;
|
•
|
Our dependence on our former parent and other third parties to perform important services for us following the separation;
|
•
|
Our inability to engage in certain actions that could cause the separation from our former parent to fail to qualify as a tax free reorganization;
|
•
|
Any failure to realize expected benefits from, or the possibility that we may be required to incur unexpected costs as a result of, the separation; and
|
•
|
Other uncertainties relating to general economic, political, business, industry, regulatory, and market conditions.
|
Date: November 3, 2016
|
GANNETT CO., INC.
|
|
|
|
/s/ Alison K. Engel
|
|
Alison K. Engel
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
(on behalf of Registrant and as Principal Financial Officer)
|
10-1
|
|
Schedule of Mortgages or Deeds of Trust Granted by Gannett Subsidiaries
|
|
Attached.
|
|
|
|
|
|
31-1
|
|
Rule 13a-14(a) Certification of CEO
|
|
Attached.
|
|
|
|
|
|
31-2
|
|
Rule 13a-14(a) Certification of CFO
|
|
Attached.
|
|
|
|
|
|
32-1
|
|
Section 1350 Certification of CEO
|
|
Attached.
|
|
|
|
|
|
32-2
|
|
Section 1350 Certification of CFO
|
|
Attached.
|
|
|
|
|
|
101
|
|
The following financial information from Gannett Co., Inc. Quarterly Report on Form 10-Q for the quarter ended September 25, 2016, formatted in XBRL includes: (i) Unaudited Condensed Consolidated Balance Sheets at September 25, 2016 and December 27, 2015, (ii) Unaudited Condensed Consolidated and Combined Statements of Income for the fiscal quarters and nine months ended September 25, 2016 and September 27, 2015, (iii) Unaudited Condensed Consolidated and Combined Statements of Comprehensive Income for the fiscal quarters and nine months ended September 25, 2016 and September 27, 2015, (iv) Unaudited Condensed Consolidated and Combined Cash Flow Statements for the fiscal quarters and nine months ended September 25, 2016 and September 27, 2015, and (v) Unaudited Notes to Condensed Consolidated and Combined Financial Statements
|
|
Attached.
|
PROPERTY ADDRESS
|
MORTGAGOR NAME
|
OWNERSHIP INTEREST
|
AMOUNT SECURED
|
525 W. Broadway, Louisville, Kentucky
|
The Courier-Journal, Inc.
|
Fee
|
$15,000,000
|
6200 Metropolitan Parkway, Sterling Heights, Michigan
|
Detroit Newspaper Partnership, L.P.
|
Fee
|
$14,000,000
|
8278 Georgetown Road, Indianapolis, Indiana
|
Gannett Satellite Information Network, LLC
|
Fee
|
$8,000,000
|
950 W. Basin Road, Newcastle, Delaware
|
Gannett Satellite Information Network, LLC
|
Fee
|
$7,500,000
|
1100 Immokalee Road and 9790 Bentgrass Bend, Naples Florida
|
Scripps NP Operating, LLC
|
Fee
|
$20,034,053*
|
4101 W. Burnham Street, 332 and 333 W. State Street and 330-340 W. Kilbourn Avenue, Milwaukee, Wisconsin
|
Journal Sentinel, Inc.
|
Fee
|
$28,105,600*
|
PROPERTY ADDRESS
|
GRANTOR NAME
|
OWNERSHIP INTEREST
|
AMOUNT SECURED
|
200 East Van Buren Street, Phoenix, Arizona
|
Phoenix Newspapers, Inc.
|
Fee
|
$30,000,000
|
6885 Commercial Drive, Springfield, Virginia
|
Gannett Satellite Information Network, LLC
|
Fee
|
$23,000,000
|
1100 Broadway and others, Nashville, Tennessee
|
Gannett Satellite Information Network, LLC
|
Fee (as to 120 11
th
Avenue North) and Leasehold (as to 1100 Broadway and others)
|
$12,000,000
|
22600 N. 19th Avenue, Deer Valley, Arizona
|
Phoenix Newspapers, Inc.
|
Fee
|
$8,700,000
|
2332 New Sentinel Drive, Knoxville, Tennessee
|
Scripps NP Operating, LLC
|
Fee
|
$11,400,000*
|
495 Union Avenue and 597 Beale Street, Memphis, Tennessee
|
Memphis Publishing Company
|
Fee
|
$7,260,000*
|
151 Factory Stores Drive, Camarillo, California
|
Scripps NP Operating, LLC
|
Fee
|
$18,045,126*
|
I,
|
Robert J. Dickey, certify that:
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Gannett Co., Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 3, 2016
|
|
/s/ Robert J. Dickey
|
Robert J. Dickey
|
President and Chief Executive Officer
|
(principal executive officer)
|
I,
|
Alison K. Engel, certify that:
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Gannett Co., Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 3, 2016
|
|
/s/ Alison K. Engel
|
Alison K. Engel
|
Senior Vice President, Chief Financial Officer and Treasurer
|
(principal financial officer)
|
(1)
|
the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Gannett.
|
/s/ Robert J. Dickey
|
Robert J. Dickey
|
President and Chief Executive Officer
|
(principal executive officer)
|
November 3, 2016
|
(1)
|
the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Gannett.
|
/s/ Alison K. Engel
|
Alison K. Engel
|
Senior Vice President, Chief Financial Officer and Treasurer
|
(principal financial officer)
|
November 3, 2016
|