TRIBUNE PUBLISHING CO, 10-Q filed on 11/10/2014
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 28, 2014
Nov. 5, 2014
Document and Entity Information [Abstract]
 
 
Entity Registrant Name
Tribune Publishing Co 
 
Entity Central Index Key
0001593195 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Non-accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 28, 2014 
 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q3 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
25,438,970 
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME (LOSS) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 28, 2014
Successor
Sep. 29, 2013
Successor
Sep. 28, 2014
Successor
Sep. 29, 2013
Successor
Dec. 30, 2012
Predecessor
Operating revenue:
 
 
 
 
 
Advertising
$ 220,842 
$ 244,028 
$ 696,008 
$ 756,545 
$ 0 
Circulation
107,511 
106,227 
323,828 
319,859 
0 
Other
75,704 
73,522 
230,666 
234,746 
0 
Total operating revenues
404,057 
423,777 
1,250,502 
1,311,150 
0 
Operating expenses:
 
 
 
 
 
Cost of sales (exclusive of items shown below)
231,566 
245,875 
725,370 
759,451 
0 
Selling, general and administrative
157,829 
143,724 
455,827 
426,499 
0 
Depreciation
8,002 
5,597 
13,636 
16,567 
0 
Amortization
2,143 
1,698 
5,370 
4,998 
0 
Total operating expenses
399,540 
396,894 
1,200,203 
1,207,515 
0 
Income from operations
4,517 
26,883 
50,299 
103,635 
0 
Loss on equity investments, net
(201)
(216)
(830)
(864)
0 
Gain on investment transaction
0 
0 
1,484 
0 
0 
Interest income (expense), net
(3,783)
(5)
(3,838)
7 
0 
Reorganization items, net
(205)
164 
(214)
(39)
2,754,553 
Income before income taxes
328 
26,826 
46,901 
102,739 
2,754,553 
Income tax expense (benefit)
484 
8,542 
20,082 
41,336 
(87,773)
Net income (loss)
$ (156)
$ 18,284 
$ 26,819 
$ 61,403 
$ 2,842,326 
Net income per share:
 
 
 
 
 
Basic (in dollars per share)
$ (0.01)
$ 0.72 
$ 1.05 
$ 2.42 
$ 0.00 
Diluted (in dollars per share)
$ (0.01)
$ 0.72 
$ 1.05 
$ 2.42 
$ 0.00 
Weighted average shares outstanding:
 
 
 
 
 
Basic (in shares)
25,430 
25,424 
25,426 
25,424 
25,424 
Diluted (in shares)
25,430 
25,424 
25,465 
25,424 
25,424 
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME Statement (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 28, 2014
Successor
Sep. 29, 2013
Successor
Sep. 28, 2014
Successor
Sep. 29, 2013
Successor
Dec. 30, 2012
Predecessor
Net income available to Tribune Publishing stockholders plus assumed conversions
$ (156)
$ 18,284 
$ 26,819 
$ 61,403 
$ 2,842,326 
Change in unrecognized benefit plan gain arising during the period, net of taxes of ($2,226) and ($1,360), respectively
3,719 
0 
2,393 
0 
0 
Fresh-start reporting adjustment included in net income to eliminate Predecessor's accumulated other comprehensive income, net of taxes of $6,440
0 
0 
0 
0 
(27,158)
Other comprehensive income (loss), net of taxes
3,719 
0 
2,393 
0 
(27,158)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
$ 3,563 
$ 18,284 
$ 29,212 
$ 61,403 
$ 2,815,168 
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 28, 2014
Successor
Sep. 29, 2013
Successor
Sep. 28, 2014
Successor
Sep. 29, 2013
Successor
Dec. 30, 2012
Predecessor
Taxes on change in unrecognized benefit plan gain arising during the period
$ 2,226 
$ 0 
$ 1,360 
$ 0 
$ 0 
Tax on fresh-start reporting adjustment included in net income to eliminate Predecessor's accumulated other comprehensive income
$ 0 
$ 0 
$ 0 
$ 0 
$ 6,440 
CONSOLIDATED AND COMBINED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Sep. 28, 2014
Dec. 29, 2013
Current assets
 
 
Cash
$ 59,647 
$ 9,694 
Accounts receivable (net of allowances of $16,162 and $12,856)
194,185 
251,636 
Inventories
15,334 
14,222 
Deferred income taxes
32,437 
37,371 
Prepaid expenses and other
27,944 
13,570 
Total current assets
329,547 
326,493 
Property, plant and equipment
 
 
Property, plant and equipment
221,209 
83,901 
Accumulated depreciation
(60,971)
(15,973)
Property, plant and equipment, net
160,238 
67,928 
Other Assets
 
 
Goodwill
35,404 
15,331 
Intangible assets, net
72,106 
60,482 
Investments
2,720 
2,799 
Deferred income taxes
12,207 
39,587 
Restricted cash
27,500 
0 
Debt issuance costs and other long-term assets
11,891 
1,746 
Total other assets
161,828 
119,945 
Total assets
651,613 
514,366 
Current Liabilities
 
 
Current portion of long-term debt
13,536 
0 
Accounts payable
59,377 
36,329 
Employee compensation and benefits
102,122 
103,351 
Deferred revenue
78,090 
67,934 
Other current liabilities
24,863 
20,866 
Total current liabilities
277,988 
228,480 
Non-Current Liabilities
 
 
Long-term debt
333,863 
0 
Deferred revenue
5,741 
7,015 
Postretirement medical, life and other benefits
40,881 
45,373 
Other obligations
10,071 
8,673 
Total non-current liabilities
390,556 
61,061 
Shareholders' equity (deficit)
 
 
Common stock, $.01 par value. Authorized 300,000 shares, 25,439 shares issued and outstanding at September 28, 2014
254 
0 
Additional paid-in capital
804 
0 
Accumulated deficit
(20,072)
0 
Accumulated other comprehensive income (loss)
2,083 
(310)
Tribune Media Company equity
0 
225,135 
Total shareholders' equity (deficit)
(16,931)
224,825 
Total liabilities and shareholders equity (deficit)
$ 651,613 
$ 514,366 
CONSOLIDATED AND COMBINED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Per Share data, unless otherwise specified
Sep. 28, 2014
Dec. 29, 2013
Statement of Financial Position [Abstract]
 
 
Allowances for doubtful accounts
$ 16,162 
$ 12,856 
Common stock, par value per share
$ 0.01 
$ 0 
Common stock, shares authorized
300,000 
0 
Common stock, shares issued
25,439 
0 
Common stock, shares outstanding
25,439 
0 
CONSOLIDATED AND COMBINED STATEMENT OF EQUITY (DEFICIT) (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Common Stock
Paid in Capital
Accumulated Deficit
Tribune Media Company Investment
AOCI
Beginning balance at at Dec. 29, 2013
$ 224,825 
 
 
 
$ 225,135 
$ (310)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Transactions with Tribune Media Company, net
(66,180)
 
 
 
(66,180)
 
Dividend to Tribune Media Company
(275,000)
 
 
 
(275,000)
 
Comprehensive income
29,212 
 
 
1,099 
25,720 
2,393 
Contribution by Tribune Media
69,408 
 
 
 
69,408 
 
Issuance of stock in the distribution
 
254 
 
(21,171)
20,917 
 
Issuance of stock in the distribution (in shares)
 
25,423,617 
 
 
 
 
Issuance of stock from RSU conversions (in shares)
 
2,369 
 
 
 
 
Exercise of stock options
182 
 
182 
 
 
 
Exercise of stock options (in shares)
 
12,984 
 
 
 
 
Share-based compensation
622 
 
622 
 
 
 
Ending balance at at Sep. 28, 2014
$ (16,931)
$ 254 
$ 804 
$ (20,072)
 
$ 2,083 
Ending balance at (shares) at Sep. 28, 2014
 
25,438,970 
 
 
 
 
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 28, 2014
Successor
Sep. 29, 2013
Successor
Dec. 30, 2012
Predecessor
Operating Activities
 
 
 
Net income
$ 26,819 
$ 61,403 
$ 2,842,326 
Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
Depreciation
13,636 
16,567 
0 
Allowance for bad debt
12,714 
8,197 
0 
Amortization of intangible assets
5,370 
4,998 
0 
Amortization of contract intangible liabilities
(112)
(163)
0 
Loss on equity investments, net
830 
864 
0 
Gain on fixed asset sales
(1,226)
(100)
0 
Non-cash gain on investment transaction
(1,484)
0 
0 
Non-cash reorganization items, net
0 
(194)
(2,756,494)
Changes in working capital items, excluding acquisitions:
 
 
 
Accounts receivable, net
49,121 
50,936 
0 
Prepaid expenses, inventories and other current assets
(9,356)
3,358 
0 
Accounts payable, employee compensation and benefits, deferred revenue and other current liabilities
12,747 
1,337 
8,381 
Non-current deferred revenue
7,352 
(2,029)
0 
Deferred income taxes
9,459 
17,068 
(94,213)
Postretirement medical, life and other benefits
(1,062)
(852)
0 
Other, net
1,102 
(695)
0 
Net cash provided by operating activities
125,910 
160,695 
0 
Investing Activities
 
 
 
Capital expenditures
(11,370)
(14,150)
0 
Acquisitions, net of cash acquired
(32,282)
(271)
0 
Restricted cash
(27,500)
0 
0 
Proceeds from sale of fixed assets
1,881 
100 
0 
Investments in equity investments net of distributions
(2,009)
0 
0 
Net cash used for investing activities
(71,280)
(14,321)
0 
Financing Activities
 
 
 
Net proceeds from issuance of debt
346,500 
0 
0 
Payment of debt issuance costs
(10,179)
0 
0 
Repayments of capital lease obligations
0 
(213)
0 
Related party dividends
(275,000)
(15,738)
0 
Proceeds from exercise of stock options
182 
0 
0 
Transactions with Tribune Media Company, net
(66,180)
(134,634)
0 
Net cash used for financing activities
(4,677)
(150,585)
0 
Net increase (decrease) in cash
49,953 
(4,211)
0 
Cash, beginning of period
9,694 
13,768 
13,768 
Cash, end of period
$ 59,647 
$ 9,557 
$ 13,768 
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Description of Business—Tribune Publishing Company and its subsidiaries (collectively, the “Company” or “Tribune Publishing”) is a diversified media and marketing solutions company that delivers innovative experiences for audiences and advertisers across all platforms. The Company's diverse portfolio of iconic news and information brands includes 10 award-winning daily titles, more than 60 digital properties and more than 150 verticals in key markets. Tribune Publishing also offers an array of customized marketing solutions, and operates a number of niche products, including Hoy and El Sentinel, making Tribune Publishing the country's largest Spanish-language publisher. The daily newspapers published by Tribune Publishing are the Los Angeles Times; the Chicago Tribune; the Sun Sentinel; the Orlando Sentinel; The Baltimore Sun; The Capital; the Carroll County Times; the Hartford Courant; The Morning Call, serving Pennsylvania’s Lehigh Valley; and the Daily Press, serving the Virginia Peninsula. Tribune Publishing’s operations also include Blue Lynx Media, LLC (“BLM”) which operates a shared service center for the benefit of the Company; a 50% equity interest in CIPS Marketing Group, Inc. (“CIPS”); and a 33% equity interest in Homefinder.com, LLC (“Homefinder”). In May 2014, Tribune Publishing acquired the outstanding 50% interest in McClatchy/Tribune Information Services (“MCT”). See Note 5 for additional information on the MCT acquisition. In August 2014, the Company purchased a 20% equity interest in Contend, LLC (“Contend”), a content creation company. See Note 8 for additional information on the investment in Contend.
Separation from Tribune Media Company—On July 10, 2013, Tribune Media Company, formerly Tribune Company, (“TCO”) announced its plan to spin-off its principal publishing operations into an independent company, Tribune Publishing. On August 4, 2014 (the “Distribution Date”), TCO completed the spin-off of its principal publishing operations into Tribune Publishing, by distributing 98.5% of the common stock of Tribune Publishing to holders of TCO common stock and warrants. In the distribution, each holder of TCO's Class A common stock, Class B common stock and warrants received 0.25 of a share of Tribune Publishing's common stock for each share of TCO common stock or TCO warrant held as of July 28, 2014 (the “Record Date”). Based on the number of shares of TCO common stock and TCO warrants outstanding as of the Record Date and the distribution ratio, 25,042,263 shares of Tribune Publishing common stock were distributed to the TCO stockholders and holders of TCO warrants and TCO retained 381,354 shares of Tribune Publishing common stock, representing 1.5% of the outstanding common stock of Tribune Publishing. On August 5, 2014, Tribune Publishing became a separate publicly-traded company with its own board of directors and senior management team. Shares of Tribune Publishing common stock are listed on the New York Stock Exchange under the symbol “TPUB”. In connection with the separation and distribution, Tribune Publishing paid a $275.0 million cash dividend to TCO from a portion of the proceeds of a senior secured credit facility entered into by Tribune Publishing. See Note 10 for additional information on the senior secured credit facility.
Associated with the separation and distribution, TCO contributed technology assets with a net book value of $91.2 million. The contributed assets were not included in the historical consolidated and combined financial statements as a final decision had not been made to contribute the assets by TCO. Depreciation on the assets to be transferred to the Company was previously charged to Tribune Publishing through allocations from TCO's corporate functions. See Note 4 for additional information on the allocated depreciation.
At the Distribution Date, the technology assets and liabilities contributed to Tribune Publishing are as follows (in thousands):
Accounts receivable
$
169

Prepaid expenses and other
4,756

Deferred income taxes, current
(47
)
Property plant and equipment
122,549

Accumulated depreciation
(31,387
)
Deferred income taxes
(21,449
)
Total assets
74,591

 
 
Current portion of long-term debt
411

Accounts payable
3,243

Employee compensation and benefits
5,061

Other current liabilities
(3,943
)
Long-term debt
411

Change in parent investement
69,408

Total liabilities and shareholders' equity
$
74,591


In connection with the separation and distribution, Tribune Publishing entered into a transition services agreement (the “TSA”) and certain other agreements with TCO that govern the relationships between Tribune Publishing and TCO following the separation and distribution. Under the TSA, the providing company is generally allowed to fully recover all out-of-pocket costs and expenses it actually incurs in connection with providing the services, plus, in some cases, the allocated direct costs of providing the services, generally without profit. Pursuant to the TSA, TCO provides Tribune Publishing with certain specified services on a transitional basis, including support in areas such as human resources, risk management, treasury, technology, legal, real estate, procurement, and advertising and marketing in a single market. Tribune Publishing provides TCO with certain specified services on a transitional basis, including such areas as human resources, technology, legal, procurement, accounting, digital advertising operations, and advertising, marketing, event management and fleet maintenance in a single market. See Note 4 for information related to amounts charged under the TSA.
Basis of Presentation—The accompanying unaudited consolidated and combined financial statements and notes of Tribune Publishing have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated and combined financial statements and accompanying notes. In the opinion of management, the financial statements contain all adjustments necessary to present fairly the financial position of Tribune Publishing as of September 28, 2014, the results of operations for the three months and nine months ended September 28, 2014 and September 29, 2013, the cash flows for the nine months ended September 28, 2014 and September 29, 2013 and the results of operations and cash flows for December 30, 2012 of the Predecessor (as defined below). Actual results could differ from these estimates. Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The December 29, 2013 consolidated and combined balance sheet date was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP and should be read in conjunction with Tribune Publishing’s audited consolidated and combined financial statements and related notes for the year ended December 29, 2013, included in the Company's registration statement on Form 10, as amended, filed with the SEC on July 21, 2014. Certain prior period amounts have been reclassified to conform to current year classifications.
The Company revised the presentation of capital expenditures in its consolidated and combined statements of cash flow to adjust for capital expenditures that were unpaid in accounts payable for the nine months ended September 29, 2013. The effect of correcting the presentation of capital expenditures for the nine months ended September 29, 2013 resulted in a $2.9 million increase in cash provided by operating activities and a corresponding $2.9 million increase in cash used for investing activities. The impact of this adjustment was evaluated by management and considered not material to the consolidated and combined financial statements for the nine months ended September 29, 2013 and as of September 29, 2013
Prior to the Distribution Date, separate financial statements were not prepared for Tribune Publishing. The accompanying consolidated and combined financial statements were derived from the historical accounting records of TCO and present Tribune Publishing’s consolidated and combined financial position, results of operations and cash flows as of and for the periods presented as if Tribune Publishing was a separate entity through the Distribution Date. Management believes that assumptions and methodologies underlying the allocation of general corporate expenses are reasonable. However, such expenses prior to the Distribution Date may not be indicative of the actual level of expense that would have been incurred had Tribune Publishing operated as a separate stand-alone entity, and, accordingly, may not necessarily reflect Tribune Publishing’s consolidated financial position, results of operations and cash flows had Tribune Publishing operated as a stand-alone entity during the periods presented. See Note 4 for further information on costs allocated from TCO. Subsequent to the Distribution Date, Tribune Publishing's financial statements are presented on a consolidated basis as the Company became a separate consolidated entity.
All intercompany accounts within Tribune Publishing have been eliminated in consolidation. For periods prior to the Distribution Date, all significant intercompany transactions between Tribune Publishing and TCO have been included within the consolidated and combined financial statements and are considered to be effectively settled through equity contributions or distributions or through cash payments at the time the transactions were recorded. The accumulated net effect of intercompany transactions between Tribune Publishing and TCO are included in the parent company investment component of Tribune Publishing equity. These intercompany transactions are further described in Note 4. The total net effect of these intercompany transactions prior to the Distribution Date are reflected in the consolidated and combined statements of cash flows as financing activities.
Prior to the Distribution Date, the costs of TCO services that are specifically identifiable to Tribune Publishing are included in these consolidated and combined financial statements. The costs of TCO services that are incurred by TCO but are not specifically identifiable to Tribune Publishing have been allocated to Tribune Publishing and included in the pre-spin consolidated and combined financial statements on a basis that management considered to be a reasonable reflection of the utilization of services provided or the benefit received by Tribune Publishing during the periods presented. While management considers these allocations to have been made on a reasonable basis, the allocations do not necessarily reflect the expenses that would have been incurred had Tribune Publishing operated as a stand-alone entity. All such costs and expenses are assumed to be settled with TCO through the parent company investment component of equity (deficit) in the period in which the costs were incurred. Current income taxes are also assumed to be settled with TCO through the parent company investment component of Tribune Publishing equity in the period the related income taxes were recorded.
As part of TCO emergence from bankruptcy, TCO consummated an internal restructuring, pursuant to and in accordance with the terms of the Plan (as defined and described in Note 2). These restructuring transactions included, among other things, establishing a number of real estate holding companies. On December 21, 2012, the majority of the land and buildings owned by Tribune Publishing were transferred to TCO’s newly established real estate holding companies.
In 2013, Tribune Publishing entered into related party lease agreements with the real estate holding companies to lease back certain land and buildings that were transferred. Although the properties subject to related party leases were legally transferred to the holding companies, Tribune Publishing determined that pursuant to the terms of the leases, it maintained forms of continuing involvement with the properties, which pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification™ (“ASC”) Topic 840, “Leases,” precluded Tribune Publishing from derecognizing those properties from its consolidated and combined financial statements. As a result, Tribune Publishing continued to account for and depreciate the carrying values of the transferred properties subject to related party leases which are presented within net property, plant and equipment in its consolidated and combined balance sheet. Rent payments under the related party leases were accounted for as dividends to TCO. See Note 4 for further information.
On December 1, 2013, Tribune Publishing modified the specific provisions within the related party leases to address the prohibited forms of continuing involvement. This resulted in Tribune Publishing derecognizing those properties by recording a $337.6 million reduction to net property, plant and equipment and a corresponding reduction to the net parent company investment component of equity in its consolidated and combined balance sheet. The related party leases subsequent to the lease modification on December 1, 2013 have been accounted for as operating leases. See Note 4 for further information.
The remainder of the transferred properties are no longer utilized in the operations of Tribune Publishing; therefore, Tribune Publishing did not enter into related party leases for those properties. Tribune Publishing entered into management agreements with the real estate holding companies pursuant to which it will manage those properties for an initial term of one year, cancelable by the real estate holding companies with a 30-day notice.
Tribune Publishing assesses its operating segments in accordance with ASC Topic 280, “Segment Reporting.” Tribune Publishing is managed by its chief operating decision maker, as defined by ASC Topic 280, as one business. Accordingly, the financial statements of Tribune Publishing are presented to reflect one reportable segment.
New Accounting Standards—In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) concerning revenue recognition. The new standard supersedes a majority of existing revenue recognition guidance under U.S. GAAP, and requires a company to recognize revenue when it transfers goods or services to a customer in an amount that reflects the consideration to which a company expects to be entitled. Companies may need to use more judgment and make more estimates while recognizing revenue, which could result in additional disclosures to the financial statements. ASU 2014-09 allows for either a “full retrospective” adoption or a “modified retrospective” adoption. The Company is currently evaluating which adoption method it will elect. The standard is effective for the Company in the first quarter 2017. Early adoption is not permitted. The Company is currently evaluating the revenue recognition impact this guidance will have once implemented.
PROCEEDINGS UNDER CHAPTER 11
PROCEEDINGS UNDER CHAPTER 11
PROCEEDINGS UNDER CHAPTER 11
Chapter 11 Reorganization—On December 8, 2008 (the “Petition Date”), TCO, and 110 of its direct and indirect wholly-owned subsidiaries (each a “Debtor” and, collectively, the “Debtors”), filed voluntary petitions for relief (collectively, the “Chapter 11 Petitions”) under Chapter 11 (“Chapter 11”) of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The Debtors’ Chapter 11 proceedings continue to be jointly administered under the caption “In re: Tribune Company, et al.,” Case No. 08-13141. Certain of the legal entities included in the consolidated and combined financial statements of Tribune Publishing were Debtors or, as a result of the restructuring transactions described below, are successor legal entities to legal entities that were Debtors (collectively, the “Tribune Publishing Debtors”). As further described below, a joint plan of reorganization for the Debtors, including the Tribune Publishing Debtors became effective and the Debtors emerged from Chapter 11 on December 31, 2012 (the “Effective Date”). Tribune Publishing and its business operations as conducted on or after December 31, 2012 are herein referred to as Reorganized Tribune Publishing or “Successor.” Tribune Publishing and its business operations as conducted on or prior to December 30, 2012 are herein referred to as “Predecessor.” TCO and its business operations as conducted on or after December 31, 2012 are herein referred to as “Reorganized Tribune Media.”
From the Petition Date and until the Effective Date, the Debtors operated their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and applicable orders of the Bankruptcy Court.
Plan of Reorganization—In order for a debtor to emerge from Chapter 11, a Chapter 11 plan of reorganization that satisfies the requirements of the Bankruptcy Code and provides for emergence from bankruptcy must be proposed and confirmed by a bankruptcy court. On April 12, 2012, the Debtors, the official committee of unsecured creditors (the “Creditors’ Committee”), Oaktree Capital Management, L.P. (“Oaktree”), a creditor under certain TCO prepetition debt facilities, Angelo, Gordon & Co. L.P. (“AG”), a creditor under certain TCO prepetition debt facilities, and JPMorgan Chase Bank, N.A. (“JPMorgan”), an administrative agent and a creditor under certain TCO prepetition debt facilities (collectively, the “Plan Proponents”) filed the Fourth Amended Joint Plan of Reorganization for Tribune Company and Its Subsidiaries (as subsequently amended and modified, the “Plan”) with the Bankruptcy Court.
On July 23, 2012, the Bankruptcy Court issued an order (the “Confirmation Order”) confirming the Plan. The Plan constitutes a separate plan of reorganization for each of the Debtors and sets forth the terms and conditions of the Debtors’ reorganization.
Notices of appeal of the Confirmation Order were filed in August 2012 by certain TCO creditors. The confirmation appeals have been transmitted to the United States District Court for the District of Delaware (“Delaware District Court”) and have been consolidated, together with two previously-filed appeals of the Bankruptcy Court’s orders relating to certain provisions in the Plan.
The appellants seek, among other relief, to overturn the Confirmation Order and certain prior orders of the Bankruptcy Court, including the settlement of certain claims and causes of action related to the Leveraged ESOP Transactions contained in the Plan. There is currently no stay of the Confirmation Order in place pending resolution of the confirmation-related appeals and those appeals remain pending before the Delaware District Court. In January 2013, Reorganized Tribune Media filed a motion to dismiss the appeals as equitably moot, based on the substantial consummation of the Plan. Briefings on those additional motions to dismiss were completed on or about July 3, 2014.
During the fourth quarter of 2012 and prior to the Effective Date, TCO and its subsidiaries consummated an internal restructuring, pursuant to and in accordance with the terms of the Plan. These restructuring transactions included, among other things, (i) converting certain of TCO’s subsidiaries into limited liability companies or merging certain of TCO’s subsidiaries into newly-formed limited liability companies, (ii) consolidating and reallocating certain operations, entities, assets and liabilities within the organizational structure of TCO and (iii) establishing a number of real estate holding companies. Among other things, the restructuring transactions resulted in Tribune Publishing Company, LLC, now a wholly-owned subsidiary of the Company (“TPC”), being converted into a limited liability company (prior to the conversion, TPC was a corporation named Tribune Publishing Company) as well as becoming the holding company for the principal direct and indirect subsidiaries that own and operate the business of Tribune Publishing as described in Note 1.
On the Effective Date, all of the conditions precedent to the effectiveness of the Plan were satisfied or waived, the Debtors emerged from Chapter 11, and the settlements, agreements and transactions contemplated by the Plan to be effected on the Effective Date were implemented, including, among other things, the appointment of a new board of directors of TCO and the initiation of distributions to creditors. As a result, Reorganized Tribune Media converted from a subchapter S corporation to a C corporation under the Internal Revenue Code (“IRC”). This conversion also affected TCO subsidiaries that were treated as qualified subchapter S subsidiaries, including certain legal entities included in the accompanying consolidated and combined financial statements of Tribune Publishing.
Since the Effective Date, Reorganized Tribune Media has substantially consummated the various transactions contemplated under the Plan, including those provisions relating to Tribune Publishing. In particular, Reorganized Tribune Media made all distributions of cash, including cash distributions made on behalf of Tribune Publishing, new common stock and new warrants that were required to be made under the terms of the Plan to creditors holding allowed claims. The prepetition claims of Tribune Publishing’s general unsecured creditors that became or become allowed subsequent to the Effective Date have been or will be paid on the next quarterly distribution date after such allowance.
Resolution of Outstanding Prepetition Claims—Under Section 362 of the Bankruptcy Code, the filing of a bankruptcy petition automatically stays most actions against a debtor, including most actions to collect prepetition indebtedness or to exercise control over the property of the debtor’s estate. Absent an order of the Bankruptcy Court, substantially all prepetition liabilities are subject to settlement under a plan of reorganization approved by the Bankruptcy Court. Shortly after commencing their Chapter 11 proceedings, the Debtors began notifying all known current or potential creditors of the Chapter 11 filings.
On the Effective Date, substantially all of the Debtors’ prepetition liabilities at December 30, 2012 were settled or otherwise satisfied under the Plan. However, certain other claims have been or will be settled or otherwise satisfied subsequent to the Effective Date. Although the allowed amount of certain unresolved claims has not been determined, Tribune Publishing’s liabilities subject to compromise associated with these unresolved claims were discharged upon emergence from Chapter 11 in exchange for the treatment outlined in the Plan.
Reorganization Items, Net—Reorganization items, net, generally includes provisions and adjustments to reflect the carrying value of certain prepetition liabilities at their estimated allowable claim amounts and, pursuant to ASC Topic 852, “Reorganizations,” is reported separately in Tribune Publishing’s consolidated and combined statements of income (loss). Reorganization items, net may also include professional advisory fees and other costs directly associated with the Debtors’ Chapter 11 cases; however, all professional advisory fees that were paid by TCO and other non-debtor TCO affiliates that related to all Debtors have not been allocated to Tribune Publishing as professional advisory fees are TCO reorganization expenses and do not specifically relate to the operations of Tribune Publishing.
Specifically identifiable reorganization provisions, adjustments and other costs directly related to Tribune Publishing have been included in the Successor’s consolidated and combined statement of comprehensive income for the three and nine months ended September 28, 2014 and September 29, 2013 and in the Predecessor’s consolidated and combined statements of income (loss) for December 31, 2012 and consisted of the following (in thousands):
 
 
Successor  
 
 
Predecessor
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
 
 
September 28, 2014
 
September 29, 2013
 
September 28, 2014
 
September 29, 2013
 
 
December 31, 2012
Reorganization costs, net:
 
 
 
 
 
 
 
 
 
 
 
Contract rejections and claim settlements
 
$
(205
)
 
$
187

 
$
(212
)
 
$
310

 
 
$
—

Other, net
 
—

 
(23
)
 
(2
)
 
(349
)
 
 
—

Total reorganization costs, net
 
(205
)
 
164

 
(214
)
 
(39
)
 
 
—

Reorganization adjustments, net
 
—

 
—

 
—

 
—

 
 
2,862,039

Fresh-start reporting adjustments, net
 
—

 
—

 
—

 
—

 
 
(107,486
)
Total reorganization items, net
 
$
(205
)
 
$
164

 
$
(214
)
 
$
(39
)
 
 
$
2,754,553


The Predecessor’s consolidated and combined statement of comprehensive income for December 31, 2012 included other reorganization items totaling $2.755 billion before taxes ($2.842 billion after taxes) arising from reorganization and fresh-start reporting adjustments. Reorganization adjustments, which were recorded to reflect the settlement of prepetition liabilities and changes in the Predecessor’s capital structure arising from the implementation of the Plan, resulted in a net reorganization gain of $2.862 billion before taxes ($2.894 billion after taxes). Fresh-start reporting adjustments, which were recorded as a result of the adoption of fresh-start reporting as of the Effective Date in accordance with ASC Topic 852, resulted in a net loss of $107.5 million before taxes ($52.1 million after taxes). The net gain resulted primarily from adjusting the Predecessor’s net carrying values for certain assets and liabilities to their fair values in accordance with ASC Topic 805, “Business Combinations,” recording related adjustments to deferred income taxes and eliminating the Predecessor’s accumulated other comprehensive income (loss) as of the Effective Date.
Tribune Publishing expects to incur certain expenses pertaining to the Chapter 11 proceedings throughout 2014 and potentially in future periods. These expenses will include primarily other costs related to the implementation of the Plan and the resolution of unresolved claims.
Fresh-Start Reporting—Reorganized Tribune Media adopted fresh-start reporting on the Effective Date in accordance with ASC Topic 852. All conditions required for the adoption of fresh-start reporting were satisfied by Reorganized Tribune Media on the Effective Date as a result, Tribune Publishing also adopted fresh-start reporting on the Effective Date.

The adoption of fresh-start reporting by Reorganized Tribune Publishing resulted in a new reporting entity for financial reporting purposes reflecting the Successor’s capital structure as of the Effective Date. Any presentation of Reorganized Tribune Publishing’s consolidated and combined financial statements as of and for periods subsequent to the Effective Date represents the financial position, results of operations and cash flows of a new reporting entity and will not be comparable to any presentation of the Predecessor’s consolidated and combined financial statements as of and for periods prior to the Effective Date, and the adoption of fresh-start reporting.
In accordance with ASC Topic 852, the Predecessor’s consolidated and combined statement of comprehensive income for December 31, 2012 includes only (i) reorganization adjustments which resulted in a net gain of $2.862 billion before taxes ($2.894 billion after taxes) and (ii) fresh-start reporting adjustments which resulted in a net loss of $107.5 million before taxes ($52.1 million after taxes). These adjustments are further summarized and described below. The Predecessor’s consolidated and combined statements of income (loss) and cash flows for December 31, 2012 exclude the results of operations and cash flows arising from the Predecessor’s business operations on December 31, 2012. Because the Predecessor’s December 31, 2012 results of operations and cash flows were not material, Tribune Publishing has elected to report them as part of Reorganized Tribune Publishing’s results of operations and cash flows for the fiscal year ended December 29, 2013.
Enterprise Value/Reorganization Value—ASC Topic 852 requires, among other things, a determination of the reorganization value for Reorganized Tribune Media and allocation of such reorganization value to the fair value of Reorganized Tribune Media’s tangible assets, finite-lived intangible assets and indefinite-lived intangible assets in accordance with the provisions of ASC Topic 805, “Business Combinations,” as of the Effective Date. The reorganization value for Reorganized Tribune Media represents the amount of resources available, or that become available, for the satisfaction of postpetition liabilities and allowed prepetition claims, as negotiated between the Debtors and their creditors. This value is viewed as the fair value of Reorganized Tribune Media before considering liabilities and is intended to approximate the amount a willing buyer would pay for the assets of Reorganized Tribune Media immediately after emergence from bankruptcy. In connection with the Debtors’ Chapter 11 cases, the Debtors’ financial advisor undertook a valuation analysis to determine the value available for distribution to holders of allowed prepetition claims. Based on current and anticipated economic conditions as of the Effective Date and the direct impact of these conditions on Reorganized Tribune Media’s business, this analysis estimated a range of distributable value from the Debtors’ estates from $6.917 billion to $7.826 billion with an approximate mid-point of $7.372 billion. The confirmed Plan contemplates a distributable value for Reorganized Tribune Media of $7.372 billion. The distributable value implies an equity value for Reorganized Tribune Company of $4.536 billion after reducing the distributable value for cash distributed (or to be distributed) pursuant to the Plan and $1.1 billion of new debt undertaken by Reorganized Tribune Company.
In accordance with the provisions of ASC Topic 805, the reorganization value of Reorganized Tribune Company was allocated, in part, to the fair value of Reorganized Tribune Publishing’s tangible assets, finite-lived intangible assets, and indefinite-lived intangible assets as of the Effective Date.
Methodology, Analysis and Assumptions—The comparable company valuation analysis methodology estimates the enterprise value of a company based on a relative comparison with publicly traded companies with similar operating and financial characteristics to the subject company. Under this methodology, TCO’s financial advisor determined a range of multiples of revenues and earnings before interest, taxes, depreciation and amortization (“EBITDA”) to calculate the enterprise values of TCO’s publishing and broadcasting segments. The discounted cash flow (“DCF”) analysis is a forward-looking enterprise valuation methodology that estimates the value of an asset or business by calculating the expected future cash flows to be generated by that asset or business. Under this methodology, projected future cash flows are discounted by the enterprise’s weighted average cost of capital (“WACC”). The WACC reflects the estimated blended rate of return that would be required by debt and equity investors to invest in the enterprise based on its capital structure. Utilizing the DCF analysis, the enterprise values of TCO’s publishing and broadcasting segments were determined by calculating the present value of the projected unlevered after-tax free cash flows through 2015 plus an estimate for the value of each segment for the period beyond 2015 known as the terminal value. The terminal value was derived by either applying a multiple to the projected EBITDA for the final year of the projection period (2015) or capitalizing the projected unlevered after-tax free cash flow in the same projection period using the WACC and an assumed perpetual growth rate, discounted back to the valuation date using the WACC, as appropriate. The precedent transactions valuation methodology is based on the enterprise values of companies involved in public merger and acquisition transactions that have operating and financial characteristics similar to the subject company. Under this methodology, the enterprise value is determined by an analysis of the consideration paid and the debt assumed in the identified merger and acquisition transactions and is usually expressed as a multiple of revenues or EBITDA. Utilizing this analysis, TCO’s financial advisor determined a range of multiples of EBITDA for the trailing 12 months from the measurement date to calculate the enterprise value for TCO’s broadcasting segment. The precedent transactions valuation methodology was not used for TCO’s publishing segment due to the lack of relevant transactions.
TCO’s financial advisor applied a weighted average of the above enterprise valuation methodologies to calculate the estimated ranges of enterprise values for TCO’s publishing and broadcasting segments. The relative weighting of each valuation methodology was based on the amount of publicly available information to determine the inputs used in the calculations. In addition, TCO’s financial advisor utilized a combination of these enterprise valuation methodologies, primarily the comparable company valuation analysis methodology, to calculate the estimated ranges of fair values of TCO’s equity investments. The ranges of enterprise values for TCO’s publishing and broadcasting segments and estimated fair values of TCO’s equity investments were added to the estimated cash on hand as of the measurement date to determine the estimated range of distributable value noted above.
Fresh-Start Consolidated and Combined Balance Sheet—The table below summarizes the Predecessor’s December 30, 2012 consolidated and combined balance sheet, the reorganization and fresh-start reporting adjustments that were made to that balance sheet as of December 31, 2012, and the resulting Successor’s unaudited consolidated and combined balance sheet as of December 31, 2012.
Consolidated and Combined Balance Sheets at December 30, 2012 and December 31, 2012
(In thousands)
 
 
December 30,
2012
 
Reorganization
Adjustments
 
 
Fresh-Start
Adjustments
 
 
December 31,
2012
Assets
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash
 
$
13,768

 
$
—

 
 
$
—

 
 
$
13,768

Accounts receivable, net
 
256,985

 
—

 
 
—

 
 
256,985

Inventories
 
12,537

 
—

 
 
5,810

(4)
 
18,347

Deferred income taxes
 
1,147

 
42,228

(1)(2)
 
(2,272
)
(4)
 
41,103

Prepaid expenses and other
 
14,733

 
—

 
 
(18
)
(4)
 
14,715

Total current assets
 
299,170

 
42,228

 
 
3,520

 
 
344,918

Properties
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment
 
1,938,208

 
—

 
 
(1,527,106
)
(4)
 
411,102

Accumulated depreciation
 
(1,322,830
)
 
—

 
 
1,322,830

(4)
 
—

Net properties
 
615,378

 
—

 
 
(204,276
)
 
 
411,102

Other Assets
 
 
 
 
 
 
 
 
 
 
Goodwill
 
—

 
—

 
 
15,331

(4)
 
15,331

Other intangible assets, net
 
28,911

 
—

 
 
37,976

(4)
 
66,887

Investments
 
3,986

 
—

 
 
—

 
 
3,986

Deferred income taxes
 
—

 
—

 
 
54,188

(4)
 
54,188

Other
 
3,787

 
—

 
 
(2,402
)
(4)
 
1,385

Total other assets
 
36,684

 
—

 
 
105,093

 
 
141,777

Total assets
 
$
951,232

 
$
42,228

 
 
$
(95,663
)
 
 
$
897,797

 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity (Deficit)
 
 
 
 
 
 
 
 
 
 
Current Liabilities
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
37,710

 
$
2,528

(1)(3)
 
$
—

(4)
 
$
40,238

Employee compensation and benefits
 
103,077

 
322

(1)(3)
 
—

 
 
103,399

Deferred revenue
 
66,835

 
—

 
 
(171
)
(4)
 
66,664

Other current liabilities
 
26,359

 
(879
)
(1)(3)
 
—

 
 
25,480

Total current liabilities
 
233,981

 
1,971

 
 
(171
)
 
 
235,781

Other Non-Current Liabilities
 
66,300

 
11,679

(1)(2)(3)
 
(16,192
)
(4)
 
61,787

Liabilities Subject to Compromise
 
2,865,890

 
(2,865,890
)
(1)(3)
 
—

 
 
—

Equity (Deficit)
 
(2,214,939
)
 
2,894,468

(1)
 
(79,300
)
(4)
 
600,229

Total liabilities and equity (deficit)
 
$
951,232

 
$
42,228

 
 
$
(95,663
)
 
 
$
897,797

 (1)
Reflects adjustments arising from implementation of the Plan, including the gain on the settlement of prepetition liabilities, distributions of cash by TCO on behalf of Reorganized Tribune Publishing and the elimination of Tribune Publishing’s equity (deficit). These adjustments also include the establishment of Reorganized Tribune Publishing’s equity based on the reorganization value of Reorganized Tribune Company allocated to the fair value of Reorganized Tribune Publishing’s tangible assets, finite-lived intangible assets and indefinite-lived intangible assets as of the Effective Date. The changes in the Predecessor’s capital structure arising from the implementation of the Plan is comprised of the following adjustments (in thousands):  
Liabilities subject to compromise on the Effective Date
 
$
2,865,890

Less: Liabilities assumed and reinstated on the Effective Date
 
(2,909
)
Less: Liabilities for prepetition claims to be settled subsequent to the Effective Date and other adjustments
 
(5,472
)
Liabilities subject to compromise settled on the Effective Date
 
$
2,857,509

 
 
 
Forgiveness of prepetition promissory notes held by parent
 
$
2,822,860

Cash distributions on settled claims paid by parent
 
34,649

Gain on settlement of liabilities subject to compromise
 
2,857,509

Plus: Other reorganization adjustments, net
 
4,530

Total reorganization adjustments before taxes
 
2,862,039

Plus: Income tax benefit on reorganization adjustments
 
32,429

Net reorganization gain after taxes
 
$
2,894,468


(2)
Reflects the conversion of Reorganized Tribune Company, including its qualified subchapter S subsidiaries, from a subchapter S corporation to a C corporation under the IRC.
(3)
Reflects the reclassification of certain liabilities from liabilities subject to compromise upon the assumption of certain executory contracts and unexpired leases.
(4)
The Predecessor’s consolidated and combined statement of comprehensive income for December 31, 2012 includes certain adjustments recorded as a result of the adoption of fresh-start reporting in accordance with ASC Topic 852 as of the Effective Date. These fresh-start reporting adjustments resulted in a net pretax loss which primarily resulted from adjusting the Predecessor’s recorded values for certain assets and liabilities to fair values in accordance with ASC Topic 805, and recording related adjustments to deferred income taxes. The fresh-start reporting adjustments included in the Predecessor’s statement of comprehensive income for December 31, 2012 consisted of the following items (in thousands):
 
Fair value adjustments to net properties
 
$
(204,276
)
Fair value adjustments to intangibles
 
37,431

Establish Successor’s goodwill
 
15,331

Elimination of accumulated other comprehensive income
 
33,598

Other fair value adjustments, net
 
10,430

Loss from fresh-start reporting adjustments before taxes
 
(107,486
)
Income tax benefit attributable to fair value adjustments
 
55,344

Net loss from fresh-start reporting adjustments after taxes
 
$
(52,142
)

Property, Plant and Equipment—Property, plant and equipment was adjusted to a fair value aggregating $411.1 million as of the Effective Date. The fair values of property, plant and equipment were based primarily on valuations obtained from third party valuation specialists principally utilizing the cost and market valuation approaches.
Fresh-start reporting adjustments included the elimination of the Predecessor’s aggregate accumulated depreciation balance as of December 30, 2012.
Identifiable Intangible Assets—The following intangible assets were identified by Reorganized Tribune Publishing and recorded at fair value based on valuations obtained from third party valuation specialists: newspaper mastheads, advertiser relationships, customer relationships, affiliate agreements and other contracts and agreements, including real property leases. The cost, income and market valuation approaches were utilized, as appropriate, to estimate the fair values of these intangible assets. The determination of the fair values of these identifiable intangible assets resulted in a $38.0 million net increase in other intangible assets in the Successor’s consolidated and combined balance sheet at December 31, 2012.
CHANGES IN OPERATIONS
CHANGES IN OPERATIONS
CHANGES IN OPERATIONS
Employee Reductions—Tribune Publishing identified reductions in staffing levels in its operations of 20 and 218 positions in the three and nine months ended September 28, 2014, respectively, and 226 and 330 positions in the three and nine months ended September 29, 2013, respectively. Tribune Publishing recorded a pretax credit of $0.4 million and a pretax charge of $1.9 million for the three and nine months ended September 28, 2014, respectively, and pretax charges of $3.9 million and $6.5 million for the three and nine months ended September 29, 2013, respectively. A summary of the activity with respect to Tribune Publishing’s severance accrual for the nine months ended September 28, 2014 is as follows (in thousands):
Balance at December 29, 2013
 
$
9,336

Transferred from Tribune Media Company
 
647

Provision
 
1,853

Payments
 
(9,170
)
Balance at September 28, 2014
 
$
2,666


Charges for severance and related expenses are included in selling, general and administrative expense in the accompanying consolidated and combined statements of income (loss). The severance and related expenses above exclude severance and related expenses incurred by TCO and allocated to Tribune Publishing. As part of the separation and distribution from TCO, $0.6 million of accrued severance charges were transferred to Tribune Publishing. See Note 4 for further discussion of allocated charges from TCO.
RELATED PARTY TRANSACTIONS WITH TRIBUNE AND AFFILIATES
RELATED PARTY TRANSACTIONS WITH TRIBUNE AND AFFILIATES
RELATED PARTY TRANSACTIONS
In connection with the separation and distribution, Tribune Publishing entered into a transition services agreement (the “TSA”) and certain other agreements with TCO that govern the relationships between Tribune Publishing and TCO following the separation and distribution. Under the TSA, the providing company generally is allowed to fully recover all out-of-pocket costs and expenses it actually incurs in connection with providing the services, plus, in some cases, the allocated direct costs of providing the services, generally without profit. Pursuant to the TSA, TCO provides Tribune Publishing with certain specified services on a transitional basis, including support in areas such as human resources, risk management, treasury, technology, legal, real estate, procurement, and advertising and marketing in a single market. During the three and nine months ended September 28, 2014, Tribune Publishing incurred $0.9 million in charges payable to TCO under the TSA. In addition, the TSA outlines the services that Tribune Publishing will provide TCO on a transitional basis, including in areas such as human resources, technology, legal, procurement, accounting, digital advertising operations, and advertising, marketing, event management and fleet maintenance in a single market. For the three and nine months ended September 28, 2014, TCO's charges payable to Tribune Publishing were $1.2 million under the TSA. Charges related to the TSA are included in selling, general and administrative costs in the consolidated and combined statements of income (loss).
Prior to the Distribution Date, Tribune Publishing participated in a number of corporate-wide programs administered by TCO. These included participation in TCO’s centralized treasury function, insurance programs, employee benefit programs, workers’ compensation programs, and centralized service centers and other corporate functions. The following is a discussion of the relationship with TCO, the services provided and how transactions with TCO have been accounted for in the consolidated and combined financial statements. Subsequent to the Distribution Date, any programs not governed by the TSA, as described above, are now administered by Tribune Publishing and are recorded directly to operating expenses.
Equity—Equity in the consolidated and combined balance sheets prior to the Distribution Date includes the accumulated balance of transactions between Tribune Publishing and TCO, Tribune Publishing’s paid-in-capital, and TCO’s interest in Tribune Publishing’s cumulative retained earnings, and are presented within the parent company investment component of equity and combined with accumulated other comprehensive income to total equity (deficit). The amounts comprising the accumulated balance of transactions between Tribune Publishing and TCO include (i) the cumulative net assets attributed to Tribune Publishing by TCO, (ii) the cumulative net advances to TCO representing the cumulative Tribune Publishing funds swept (net of funding provided by TCO to Tribune Publishing) as part of the centralized cash management program described further below, (iii) the cumulative charges (net of credits) allocated by TCO to Tribune Publishing for certain support services received by Tribune Publishing and (iv) related party dividends for rent payments on related party leases as described further below.
Centralized Cash Management—TCO utilized a centralized approach to cash management and the financing of its operations. Under this centralized cash management program, TCO and Tribune Publishing advanced funds to each other. Accordingly, none of TCO’s cash and cash equivalents has been assigned to Tribune Publishing in the consolidated and combined financial statements. Cash in the consolidated and combined balance sheets represents either cash not advanced to TCO or cash held locally by Tribune Publishing. These transactions were recorded in equity (deficit) when advanced.
Support Services Provided and Other Amounts with TCO—Prior to the Distribution Date, Tribune Publishing received allocated charges from TCO for certain corporate support services, which were recorded within selling, general and administrative expense in Tribune Publishing’s consolidated and combined statements of income (loss). Management believes that the basis used for the allocations was reasonable and reflects the portion of such costs attributed to Tribune Publishing’s operations; however, the amounts may not be representative of the costs necessary for Tribune Publishing to operate as a separate stand-alone company. These allocated costs are summarized in the following table (in thousands):
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 28, 2014
 
September 29, 2013
 
September 28, 2014
 
September 29, 2013
Corporate management fee
 
$
3,851

 
$
8,239

 
$
21,871

 
$
20,622

Allocated depreciation
 
1,731

 
4,836

 
11,707

 
12,482

Service center support costs
 
10,108

 
26,653

 
53,492

 
68,788

Other
 
192

 
2,045

 
3,427

 
5,330

Total
 
$
15,882

 
$
41,773

 
$
90,497

 
$
107,222


Medical and Workers’ Compensation Benefit Plans—Tribune Publishing participated in TCO-sponsored employee benefit plans, including medical and workers’ compensation. Allocations of benefit plan costs varied by plan type and were based on actuarial valuations of cost and/or liability, premium amounts and payroll. Total benefit plan costs allocated to Tribune Publishing amounted to $4.1 million and $27.2 million in the three and nine months ended September 28, 2014 and $12.5 million and $36.8 million in the three and nine months ended September 29, 2013, respectively, and were recorded in cost of sales and selling, general and administrative expense, as appropriate, in the consolidated and combined statements of income (loss). While management believes the cost allocation methods utilized for the benefit plans were reasonable and reflected the portion of such costs attributed to Tribune Publishing, the amounts may not be representative of the costs necessary for Tribune Publishing to operate as a stand-alone business.
Defined Benefit Plans—Retirement benefits obligations pursuant to the TCO defined benefit pension plans have historically been and continue to be an obligation of TCO. Prior to the Distribution Date, Tribune Publishing accounted for costs associated with these defined benefit pension plans as a participant in multi-employer plans in accordance with ASC Topic 715. Costs related to TCO-sponsored pension plans, which totaled credits of $2.1 million and $12.5 million in the three and nine months ended September 28, 2014, respectively, and credits of $6.2 million and $17.8 million in the three and nine months ended September 29, 2013, respectively, were based upon a specific allocation of actuarially determined service costs plus an allocation of the remaining net periodic pension cost components based upon Tribune Publishing's proportional share of the pension liability. Through the Distribution Date, TCO-sponsored pension plan income allocated to Tribune Publishing is recorded in cost of sales and selling, general and administrative expense, as appropriate, in the consolidated and combined statements of income and comprehensive income. Subsequent to the Distribution Date, no further costs or credits were allocated.
Defined Contribution Plans—Tribune Publishing’s employees have historically participated in various TCO qualified 401(k) savings plans, which permit eligible employees to make voluntary contributions on a pretax basis. The plans allowed participants to invest their savings in various investments. Amounts charged to expense by Tribune Publishing for employer contributions to TCO 401(k) savings plans totaled $1.3 million and $7.3 million in the three and nine months ended September 28, 2014, respectively, and $2.9 million and $9.9 million in the three and nine months ended September 29, 2013, respectively, and are recorded in cost of sales and selling, general and administrative expense, as appropriate, in the consolidated and combined statements of income and comprehensive income.
Related Party Lease Agreements—As described in Note 1, on December 21, 2012, the majority of the land and buildings owned by Tribune Publishing were transferred to TCO’s newly established real estate holding companies. As of the date of the transfers, the carrying value of the transferred properties was $294.5 million.
In 2013, Tribune Publishing entered into related party lease agreements with TCO to lease back certain land and buildings that were transferred on December 21, 2012. The initial term of these non-cancelable related party lease agreements is either five or ten years, with two optional renewal terms. Tribune Publishing determined that pursuant to the terms of the leases, it maintained forms of continuing involvement with the properties subject to related party leases, which, in accordance with ASC Topic 840, preclude Tribune Publishing from derecognizing those properties from its consolidated and combined financial statements. As a result, Tribune Publishing continued to account for and depreciate the carrying values of the transferred properties subject to related party leases and rent payments were accounted for as dividends to TCO. During the three and nine months ended September 29, 2013, Tribune Publishing recorded $1.2 million and $3.8 million, respectively, in depreciation expense for such properties.
On December 1, 2013, Tribune Publishing modified the related party leases to eliminate certain protections provided to the landlord in the event of default by the tenant, including the right to collect rent and other balances owed by tenant under the leases utilizing insurance proceeds received by the landlord in the event of damage and otherwise payable to the tenant, as well as the right to collect rent directly from subtenants to the extent all or a portion of the premise is sublet. Pursuant to ASC Topic 840, these provisions had precluded Tribune Publishing from derecognizing those properties from its consolidated and combined financial statements. As a result of these modifications, Tribune Publishing determined that it no longer had forms of continuing involvement with the transferred properties and derecognized such properties from its consolidated and combined financial statements by recording a $337.6 million reduction to net property, plant and equipment and a corresponding reduction to the parent company investment component of equity (deficit) in its consolidated and combined balance sheet. Tribune Publishing has accounted for these related party leases as operating leases beginning on December 1, 2013. In connection with all related party lease agreements, Tribune Publishing recognized $9.1 million and $28.2 million of rent expense for the three and nine months ended September 28, 2014, respectively, recorded in cost of sales and selling, general and administrative expense, as appropriate.
The remainder of the transferred properties, which had a carrying value of $28.5 million as of the date of the transfers, are no longer utilized in the operations of Tribune Publishing; therefore, Tribune Publishing did not enter into related party leases for those properties. Tribune Publishing entered into management agreements with the real estate holding companies pursuant to which it will manage those properties for an initial term of one year, cancelable by the real estate holding companies with a 30-day notice.
In addition, in 2013, Tribune Publishing entered into various related party lease agreements with TCO to lease the portions of the shared TCO corporate office space that Tribune Publishing continues to occupy for an initial 5-year term, with two optional renewal terms. In accordance with ASC Topic 840, Tribune Publishing has accounted for these related party leases as operating leases. Costs associated with the related party lease agreements for shared corporate office space were recorded in selling, general and administrative expense.
ACQUISITIONS (Notes)
ACQUISITIONS
ACQUISITIONS
Landmark Acquisition
On May 1, 2014, the Company completed an acquisition of the issued and outstanding limited liability company interests of Capital-Gazette Communications, LLC and Landmark Community Newspapers of Maryland, LLC from Landmark Media Enterprises, LLC (the “Landmark Acquisition”) for $29.0 million in cash, net of certain working capital and other closing adjustments. The Landmark Acquisition expanded the Company’s breadth of coverage in Maryland and adjacent areas and includes The Capital in the Annapolis region and the Carroll County Times and their related publications.
In connection with this acquisition, the Company incurred a total of $0.4 million of transaction costs, which were recorded in selling, general and administrative expenses in the Company’s consolidated statement of income (loss) for the nine months ended September 28, 2014.
At the acquisition date, the purchase price assigned to the acquired assets and assumed liabilities is as follows (in thousands):
Consideration
 
 
Cash
 
$
28,983

Less: cash acquired
 
(2
)
Net Cash
 
$
28,981

 
 
 
Allocated Fair Value of Acquired Assets and Assumed Liabilities
 
 
Accounts receivable and other current assets
 
$
2,942

Property, plant and equipment
 
560

Intangible Assets subject to amortization:
 
 
  Trade names and trademarks (useful life of 20 years)
 
7,500

  Advertiser relationships (useful life of 12 years)
 
6,500

  Other customer relationships (useful life of 7 years)
 
2,500

Accounts payable and other current liabilities
 
(3,961
)
Total identifiable net assets
 
16,041

Goodwill
 
12,940

Total net assets acquired
 
$
28,981


The allocation presented above is based upon management’s estimate of the fair values using the income, cost and market approaches. In estimating the fair value of the acquired assets and assumed liabilities, the fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates. The definite-lived intangible assets will be amortized over a total weighted average period of 15 years that includes a 20 year life for trade names and trademarks, a 12 year life for advertiser relationships and a 7 year life for customer relationships. The acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and noncontractual relationships, as well as expected future cost and revenue synergies. The entire amount of purchase price allocated to intangible assets and goodwill will be deductible for tax purposes pursuant to IRC Section 197 over a 15 year period.
Other Acquisitions
The Company’s other acquisitions in the three and nine months ended September 28, 2014 were not significant; the Company made no acquisitions in the three and nine months ended September 29, 2013. The results of the other acquired companies and the related transaction costs were not material to the Company’s unaudited consolidated and combined financial statements and were included in the unaudited consolidated and combined statements of income (loss) since their respective dates of acquisition.
Information for other acquisitions made in the nine months ended September 28, 2014 (excluding the Landmark Acquisition) is as follows (in thousands):
Fair value of assets acquired
 
$
11,292

Liabilities assumed
 
(800
)
Net assets acquired
 
10,492

  Less: fair value of non-cash and contingent consideration
 
(4,439
)
  Less: fair value of the preexisting equity interest in MCT
 
(2,752
)
Net cash paid
 
$
3,301


On May 7, 2014, the Company acquired the remaining 50% outstanding general partnership interests of MCT from McClatchy News Services, Inc. and The McClatchy Company (collectively, “McClatchy”) for $1.2 million in cash and non-cash consideration for future services with an estimated fair value of $4.3 million. The fair value of acquired interests was based upon management’s estimate of the fair values using the income approach. In estimating the fair value of the acquired assets and assumed liabilities, the fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates. Prior to May 7, 2014, the Company accounted for its 50% interest in MCT as an equity method investment. In accordance with ASC Topic 805, the Company’s preexisting equity interest was remeasured to its estimated fair value of $2.8 million using the income valuation approach and the Company recognized a gain of $1.5 million in the unaudited consolidated and combined statements of income (loss) in the second quarter of 2014. The aggregate purchase price of the remaining 50% equity interest in MCT and the estimated fair value of the Company’s preexisting 50% equity interest in MCT have been allocated to the assets acquired and liabilities assumed based upon the estimated fair values of each as of the acquisition date.
INVENTORIES
INVENTORIES
INVENTORIES
Inventories consisted of the following (in thousands):
 
 
September 28, 2014
 
December 29, 2013
Newsprint
 
$
14,951

 
$
13,831

Supplies and other
 
383

 
391

Total inventories
 
$
15,334

 
$
14,222


Inventories are stated at the lower of cost or market. Tribune Publishing determines cost on the first-in, first-out (“FIFO”) basis for all inventories.
GOODWILL, OTHER INTANGIBLE ASSETS AND INTANGIBLE LIABILITIES
GOODWILL, OTHER INTANGIBLE ASSETS AND INTANGIBLE LIABILITIES
GOODWILL, OTHER INTANGIBLE ASSETS AND INTANGIBLE LIABILITIES
Goodwill, other intangible assets and intangible liabilities at September 28, 2014 and December 29, 2013 consisted of the following (in thousands):
 
 
September 28, 2014
 
 
December 29, 2013
 
 
Gross Amount
 
Accumulated Amortization
 
Net Amount
 
 
Gross Amount
 
Accumulated Amortization
 
Net Amount
Other intangible assets subject to amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
Subscribers (useful life of 2 to 10 years)
 
$
6,194

 
$
(1,758
)
 
$
4,436

 
 
$
3,694

 
$
(919
)
 
$
2,775

Advertiser relationships (useful life of 2 to 13 years)
 
21,166

 
(3,823
)
 
17,343

 
 
14,332

 
(2,032
)
 
12,300

Affiliate agreements (useful life of 4 years)
 
11,929

 
(5,219
)
 
6,710

 
 
11,929

 
(2,982
)
 
8,947

Trade names (useful life of 20 years)
 
7,500

 
(158
)
 
7,342

 
 
—

 
—

 
—

Other (useful life of 1 to 20 years)
 
5,307

 
(832
)
 
4,475

 
 
5,132

 
(472
)
 
4,660

Total
 
$
52,096

 
$
(11,790
)
 
$
40,306

 
 
$
35,087

 
$
(6,405
)
 
$
28,682

Goodwill and other intangible assets not subject to amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
 
 
 
 
35,404

 
 
 
 
 
 
15,331

Newspaper mastheads
 
 
 
 
 
31,800

 
 
 
 
 
 
31,800

Total goodwill and other intangible assets
 
 
 
 
 
$
107,510

 
 
 
 
 
 
$
75,813

Intangible liabilities subject to amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
Lease contract intangible liabilities
 
(545
)
 
330

 
(215
)
 
 
(545
)
 
218

 
(327
)
Total intangible liabilities subject to amortization
 
$
(545
)
 
$
330

 
$
(215
)
 
 
$
(545
)
 
$
218

 
$
(327
)


The changes in the carrying amounts of intangible assets subject to amortization during the nine months ended September 28, 2014 were as follows (in thousands):
Intangible assets subject to amortization
 
 
Balance at December 29, 2013
 
$
28,682

Acquisitions
 
17,009

Amortization
 
(5,385
)
Balance at September 28, 2014
 
$
40,306


The changes in the carrying amounts of intangible assets not subject to amortization and goodwill during the nine months ended September 28, 2014 were as follows (in thousands):
Other intangible assets not subject to amortization
 
 
Balance as of September 28, 2014 and December 29, 2013
 
$
31,800

 
 
 
Goodwill
 
 
Balance at December 29, 2013
 
$
15,331

Acquisitions
 
20,073

Balance at September 28, 2014
 
$
35,404


As disclosed in Note 4 to Tribune Publishing's audited consolidated and combined financial statements, Tribune Publishing reviews goodwill and other indefinite-lived intangible assets for impairment annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that an asset may be impaired, in accordance with ASC Topic 350, “Intangibles-Goodwill and Other.”
INVESTMENTS
INVESTMENTS
INVESTMENTS
Investments consisted of equity method investments totaling $2.7 million and $2.8 million at September 28, 2014 and December 29, 2013, respectively, in the following private companies:
 
 
% Owned
Company
 
September 28, 2014
 
December 29, 2013
CIPS Marketing Group, Inc.
 
50
%
 
50
%
Homefinder.com, LLC
 
33
%
 
33
%
Locality Labs, LLC
 
—

 
35
%
Contend, LLC
 
20
%
 
—


Tribune Publishing recorded losses of $0.2 million and $0.8 million in the three and nine months ended September 28, 2014, respectively, and $0.2 million and $0.9 million in the three and nine months ended September 29, 2013, respectively, relating to its equity method investments. TCO retained the investment in Locality Labs, LLC effective with the spin-off. Tribune Publishing acquired the remaining 50% of the outstanding general partnership interests of MCT which had previously been accounted for as an equity method investment. See Note 5 for additional information on the MCT acquisition.
On August 5, 2014, the Company purchased a 20% investment for $1.0 million in Contend, LLC, a content creation company that develops and produces entertainment and marketing solutions for local, regional and national brands. The Company expects to leverage the relationship to help marketers engage and activate customers across all platforms, from print to online, social to mobile.
FAIR VALUE MEASUREMENTS (Notes)
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS
Tribune Publishing measures and records in its consolidated and combined financial statements certain assets and liabilities at fair value. ASC Topic 820, “Fair Value Measurements and Disclosures,” establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and Tribune Publishing’s own assumptions (unobservable inputs). This hierarchy consists of the following three levels:

•
Level 1-Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market.

•
Level 2-Assets and liabilities whose values are based on inputs other than those included in Level 1, including quoted market prices in markets that are not active; quoted prices of assets or liabilities with similar attributes in active markets; or valuation models whose inputs are observable or unobservable but corroborated by market data.

•
Level 3-Assets and liabilities whose values are based on valuation models or pricing techniques that utilize unobservable inputs that are significant to the overall fair value measurement.
The carrying values of cash, trade accounts receivable and trade accounts payable approximated their respective fair values due to their short term to maturity.
DEBT
DEBT
At September 28, 2014, Tribune Publishing had $350.0 million in variable-rate debt outstanding under the Term Loan Credit Agreement, as defined below. The weighted average interest rate for the variable-rate debt is 5.75%. At September 28, 2014, the fair value of the Term Loan Credit Agreement was estimated to be $346.5 million. The Company's Term Loan Credit Agreement is classified as Level 2 inputs, because the fair value for these instruments is determined using observable inputs in non-active markets. See below for details related to the Company's debt agreements.
Senior Term Facility
On August 4, 2014, the Company entered into a credit agreement (the “Term Loan Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (in such capacity, the “Term Collateral Agent”), and the lenders party thereto (the “Senior Term Facility”). The Senior Term Facility provides for loans (the “Term Loans”) in an aggregate principal amount of $350.0 million, which were issued at a discount of $3.5 million. Subject to certain conditions, without the consent of the then existing lenders (but subject to the receipt of commitments), the Senior Term Facility may be expanded (or a new term loan facility, revolving credit facility or letter of credit facility added) by an amount up to (i) the greater of $100.0 million and an amount as will not cause the net senior secured leverage ratio after giving effect to such incurrence to exceed 2:1, plus (ii) an amount equal to all voluntary prepayments of the term loans borrowed under the Senior Term Facility on the distribution date and refinancing debt in respect of such loans, subject to certain conditions. As of September 28, 2014, the unamortized balance of the discount was $3.4 million.
The Senior Term Facility will mature on August 4, 2021 (the “Term Loan Maturity Date”). The Term Loans amortize in equal quarterly installments equal to 1.25% of the original principal amount of the Senior Term Facility with the balance payable on the Term Loan Maturity Date. In addition, however, the Senior Term Facility provides for the right of individual lenders to extend the maturity date of their loans upon the request of the Company without the consent of any other lender. The Term Loans may be prepaid, in whole or in part, without premium or penalty, except that (a) prepayments and certain refinancings of the Senior Term Facility prior to August 4, 2015 will be subject to a prepayment premium of 1.0% of the principal amount prepaid and (b) lenders will be compensated for redeployment costs, if any. Subject to certain exceptions and provisions for the ratable sharing with indebtedness secured on a pari passu basis with the Senior Term Facility, the Senior Term Facility will be subject to mandatory prepayment in an amount equal to:
•
100% of the net proceeds (other than those that are used to purchase certain assets within a specified time period) of certain asset sales and certain insurance recovery events;
•
100% of the net proceeds of the issuance or incurrence of indebtedness (other than indebtedness permitted to be incurred under the Senior Term Facility unless specifically incurred to refinance a portion of the Senior Term Facility); and
•
50% of annual excess cash flow for any fiscal year (beginning with the fiscal year ending December 27, 2015), such percentage to decrease to 25% on the attainment of a secured leverage ratio of 1.25:1.00 and to 0% on the attainment of a secured leverage ratio of 0.75:1.00. In addition the Company will not be required to make an excess cash flow prepayment if such payment would result in available liquidity being less than $75.0 million.
Tribune Publishing Company is the borrower under the Senior Term Facility. Each of Tribune Publishing Company’s wholly-owned domestic subsidiaries, subject to certain exceptions (collectively, the “Subsidiary Guarantors”), guarantee the payment obligations under the Senior Term Facility. All obligations of Tribune Publishing Company and each Subsidiary Guarantor under the Senior Term Facility are secured by the following: (a) a perfected security interest in substantially all present and after-acquired property consisting of accounts receivable, inventory and other property constituting the borrowing base (the “ABL Priority Collateral”), which security interest will be junior to the security interest in the foregoing assets securing the Senior ABL Facility (defined below); and (b) a perfected security interest in substantially all other assets of Tribune Publishing Company and the Subsidiary Guarantors (other than the ABL Priority Collateral and with certain other exceptions) (the “Term Loan Priority Collateral” and, together with the ABL Priority Collateral, the “Collateral”), which security interest will be senior to the security interest in the foregoing assets securing the Senior ABL Facility.
The interest rates applicable to the Term Loans will be based on a fluctuating rate of interest measured by reference to either, at the Company’s option, (i) the greater of (x) an adjusted London inter-bank offered rate (adjusted for reserve requirements) and (y) 1.00%, plus a borrowing margin of 4.75%, or (ii) an alternate base rate, plus a borrowing margin of 3.75%. Customary fees will be payable in respect of the Senior Term Facility. The Senior Term Facility contains a number of covenants that, among other things, limit the ability of Tribune Publishing Company and its restricted subsidiaries, as described in the Term Loan Credit Agreement, to: incur more indebtedness; pay dividends; redeem stock or make other distributions in respect of equity; make investments; create restrictions on the ability of Tribune Publishing Company’s restricted subsidiaries that are not Subsidiary Guarantors to pay dividends to Tribune Publishing Company or make other intercompany transfers; create negative pledges; create liens; transfer or sell assets; merge or consolidate; enter into sale leasebacks; enter into certain transactions with the Company’s affiliates; and prepay or amend the terms of certain indebtedness. The Senior Term Facility also contains certain affirmative covenants, including financial and other reporting requirements. The Senior Term Facility provides for customary events of default, including: non-payment of principal, interest or fees; violation of covenants; material inaccuracy of representations or warranties; specified cross payment default and cross acceleration to other material indebtedness; certain bankruptcy events; certain ERISA events; material invalidity of guarantees or security interests; asserted invalidity of intercreditor agreements; material judgments and change of control.
Senior ABL Facility
On August 4, 2014, Tribune Publishing Company and the Subsidiary Guarantors, in their capacities as borrowers thereunder, entered into a credit agreement (the “ABL Credit Agreement”) with Bank of America, N.A., as administrative agent, collateral agent (in such capacity, the “ABL Collateral Agent”), swing line lender and letter of credit issuer and the lenders party thereto (the “Senior ABL Facility”). The Senior ABL Facility provides for senior secured revolving loans and letters of credit of up to a maximum aggregate principal amount of $140.0 million (subject to availability under a borrowing base). Extensions of credit under the Senior ABL Facility will be limited by a borrowing base calculated periodically and described below. Up to $75.0 million of availability under the Senior ABL Facility is available for letters of credit and up to $15.0 million of availability under the Senior ABL Facility is available for swing line loans. The Senior ABL Facility also permits Tribune Publishing Company to increase the commitments under the Senior ABL Facility by up to $75.0 million. The “borrowing base” is defined in the ABL Credit Agreement as, at any time, the sum of (i) 85% of eligible accounts receivable (with such percentage reduced under certain circumstances), plus (ii) the lesser of (x) 10% of aggregate commitments and (y) 70% of the lower of cost and market value (determined based on the RISI index) of eligible inventory, plus (iii) qualified cash, minus (iv) availability reserves, which may include such availability reserves as the ABL Administrative Agent, in its permitted discretion, deems appropriate at such time. As of September 28, 2014, $19.3 million of the Senior ABL Facility availability supported an outstanding undrawn letter of credit in the same amount.
The Senior ABL Facility will mature on August 4, 2019. In addition, however, the Senior ABL Facility provides for the right of individual lenders to extend the termination date of their commitments upon the request of Tribune Publishing Company without the consent of any other lender. The Senior ABL Facility may be prepaid at Tribune Publishing Company’s option at any time without premium or penalty (except for lender’s redeployment costs, if any) and will be subject to mandatory prepayment if the outstanding Senior ABL Facility exceeds either the aggregate commitments with respect thereto or the current borrowing base, in an amount equal to such excess. Mandatory prepayments do not result in a permanent reduction of the lenders’ commitments under the Senior ABL Facility.
Tribune Publishing Company and the Subsidiary Guarantors are the borrowers under the Senior ABL Facility. Tribune Publishing Company and the Subsidiary Guarantors guarantee the payment obligations under the Senior ABL Facility. All obligations of Tribune Publishing Company and each Subsidiary Guarantor under the Senior ABL Facility are secured by the following: (a) a perfected security interest in the ABL Priority Collateral, which security interest will be senior to the security interest in such collateral securing the Senior Term Facility; and (b) a perfected security interest in the Term Loan Priority Collateral, which security interest will be junior to the security interest in such collateral securing the Senior Term Facility.
Until the date that is one day before the maturity date of the Senior ABL Facility, at the option of the applicable borrower, the interest rates applicable to the loans under the Senior ABL Facility will be based on either (i) an adjusted London inter-bank offered rate (adjusted for reserve requirements), plus a borrowing margin of 1.50% or (ii) an alternate base rate, plus a borrowing margin of 0.50%. Customary fees will be payable in respect of the Senior ABL Facility, including commitment fees of 0.25% and letter of credit fees. The Senior ABL Facility contains a number of covenants that, among other things, limit or restrict the ability of Tribune Publishing Company and its restricted subsidiaries as described in the ABL Credit Agreement to: incur more indebtedness; pay dividends; redeem stock or make other distributions in respect of equity; make investments; create restrictions on the ability of the Company’s restricted subsidiaries that are not Subsidiary Guarantors to pay dividends to Tribune Publishing Company or make other intercompany transfers; create negative pledges; enter into certain transactions with the Company’s affiliates; and prepay or amend the terms of certain indebtedness. In addition, if Tribune Publishing Company’s availability (as defined in the ABL Credit Agreement) under the Senior ABL Facility falls below the greater of $14.0 million and 10% of the lesser of the aggregate revolving commitments and the borrowing base, Tribune Publishing Company will be required to maintain a fixed charge coverage ratio of at least 1.0:1.0, as defined in the Senior ABL Facility. The Senior ABL Facility also contains certain affirmative covenants, including financial and other reporting requirements. The Senior ABL Facility also provides for customary events of default, including: non-payment of principal; interest or fees; violation of covenants; material inaccuracy of representations or warranties; specified cross default and cross acceleration to other material indebtedness; certain bankruptcy events; certain ERISA events; material invalidity of guarantees or security interest; asserted invalidity of intercreditor agreements; material judgments and change of control.
Letter of Credit Agreement
On August 4, 2014, Tribune Publishing Company and JPMorgan Chase Bank, N.A., as letter of credit issuer (the “L/C Issuer”) entered into a letter of credit agreement (the “Letter of Credit Agreement”). The Letter of Credit Agreement provides for the issuance of standby letters of credit of up to a maximum aggregate principal face of $30.0 million. The Letter of Credit Agreement permits Tribune Publishing Company, at the sole discretion of L/C Issuer, to request to increase the amount available to be issued under the Letter of Credit Agreement up to an aggregate maximum face amount of $50.0 million. The Letter of Credit Agreement is scheduled to terminate on August 4, 2019, provided that the L/C Issuer may, in its sole discretion, extend the scheduled termination date. Tribune Publishing Company’s obligations under the Letter of Credit Agreement are secured in favor of the L/C Issuer by a first priority security interest in a specified cash collateral account. Customary fees will be payable in respect of the Letter of Credit Agreement. The Letter of Credit Agreement contains certain affirmative covenants, including financial and other reporting requirements. The Letter of Credit Agreement also provides for customary events of default, including: non-payment; violation of covenants; material inaccuracy of representations and warranties; specified cross-default to other material indebtedness; certain bankruptcy events; material invalidity of credit documents and failure to satisfy the minimum collateral condition. As of September 28, 2014, a $27.5 million undrawn letter of credit was outstanding against the Letter of Credit Agreement. This Letter of Credit Agreement was collateralized with $27.5 million of cash held in a specified cash collateral account. The specified cash account is required to remain as long as the undrawn letter of credit remains outstanding and is recorded in other long-term assets in the consolidated financial statements.
The Company's long-term debt maturities are as follows:
2014
$
—

2015
17,500

2016
17,500

2017
17,500

2018
17,500

2019
17,500

Thereafter
262,500

 
$
350,000

INCOME TAXES
INCOME TAXES
INCOME TAXES
Subchapter S Corporation Election and Subsequent Conversion to C Corporation—On March 13, 2008, TCO filed an election to be treated as a subchapter S corporation under the Internal Revenue Code, with the election effective as of the beginning of TCO’s 2008 fiscal year. TCO also elected to treat nearly all of its subsidiaries, including nearly all of the subsidiaries through which Tribune Publishing operates, as qualified subchapter S subsidiaries. Subject to certain limitations (such as built-in-gains tax applicable for ten years to gains accrued prior to the election), TCO and Tribune Publishing were not subject to federal income tax. Although most states in which TCO and Tribune Publishing operate recognize S corporation status, some impose tax at a reduced rate. Certain Tribune Publishing non-qualified subchapter S subsidiaries were subject to federal and state income taxes as C corporations.
On the Effective Date, TCO emerged from bankruptcy and issued shares of common stock to non-qualifying S corporation shareholders as more fully described in Note 2. As a result, TCO’s S corporation election was terminated and TCO, including Tribune Publishing, became taxable as a C corporation. As a C corporation, Reorganized Tribune Publishing is subject to income taxes at a higher effective tax rate beginning in the first quarter of 2013. The effect of this conversion was recorded in connection with Reorganized Tribune Publishing’s adoption of fresh-start reporting as described in Note 2. Accordingly, Tribune Publishing’s deferred income tax assets and liabilities were reinstated at a higher effective tax rate as of the Effective Date.
In conjunction with emergence from bankruptcy, Tribune Publishing was discharged from certain debt obligations as more fully described in Note 2. Generally, for federal tax purposes, the discharge of a debt obligation in a bankruptcy proceeding for an amount less than its adjusted issue price (as defined in the IRC) creates cancellation of indebtedness income (“CODI”) that is excludable from the obligor’s taxable income. However, certain income tax attributes are reduced by the amount of CODI. The prescribed order of income tax attribute reduction is as follows: (i) net operating losses for the year of discharge and net operating loss carryforwards, (ii) most credit carryforwards, including the general business credit and the minimum tax credit, (iii) net capital losses for the year of discharge and capital loss carryforwards and (iv) the tax basis of the debtors’ assets. Reorganized Tribune Publishing does not have any net operating loss carryforwards, credit carryforwards or capital loss carryforwards at the Effective Date and therefore these tax attribute reduction provisions do not apply. Based on Reorganized Tribune Publishing’s consolidated balance sheet on the Effective Date, Reorganized Tribune Publishing will not have a significant tax basis reduction resulting from the CODI rules.
Other—Tribune Publishing filed an election effective December 30, 2013 to be taxed as a C corporation. Accordingly, Tribune Publishing has computed income taxes as a separate return filing group. For the nine months ended September 29, 2013, Tribune Publishing’s operations were included in TCO’s federal and state C corporation income tax returns and income taxes payable were settled through the parent investment component of equity. For the purposes of these consolidated and combined financial statements, Tribune Publishing has computed its income taxes for the nine months ended September 29, 2013 as if it were filing separate returns.
For the three and nine months ended September 28, 2014, Tribune Publishing recorded income tax expense of $0.5 million and $20.1 million, respectively. The effective tax rate on pretax income was 147.6% and 42.8% in the three and nine months ended September 28, 2014, respectively. For the three months ended September 28, 2014, the rate differs from the U.S. federal statutory rate of 35% primarily due to the cumulative effect of a change in the estimated annual effective tax rate for the six months ended June 29, 2014 of 42.1% to an estimated annual effective tax rate for the nine months ended September 28, 2014 of 42.8%. This rate increase resulted in a $0.3 million increase in tax expense. For the nine months ended September 28, 2014, this rate differs from the U.S. federal statutory rate of 35% primarily due to state income taxes, net of federal benefit, non-deductible expenses, certain transaction costs not fully deductible for tax purposes and the domestic production activities deduction. For the three and nine months ended September 29, 2013, Tribune Publishing recorded income tax expense of $8.5 million and $41.3 million, respectively. The effective tax rate on pretax income was 31.8% and 40.2% in the three and nine months ended September 29, 2013. This rate differs from the U.S. federal statutory rate of 35% due primarily to state income taxes, net of federal benefit, nondeductible expenses, certain transaction costs not fully deductible for tax purposes and the domestic production activities deduction.
PENSION AND OTHER POSTRETIREMENT BENEFITS
PENSION AND OTHER POSTRETIREMENT BENEFITS
PENSION AND OTHER POSTRETIREMENT BENEFITS
Multiemployer Pension Plans—Tribune Publishing contributes to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover its union-represented employees. See Note 4 for the description of costs and credits related to TCO-sponsored pension plans.
Postretirement Benefits Other Than Pensions—Prior to the Distribution Date, retirement benefits are provided to eligible employees of Tribune Publishing through defined benefit pension plans sponsored by TCO. Subsequent to the Distribution Date, Tribune Publishing provides postretirement health care and life insurance benefits to Tribune Publishing employees. There is some variation in the provisions of these plans, including different provisions for lifetime maximums, prescription drug coverage and certain other benefits. The components of net periodic benefit cost for Tribune Publishing were as follows (in thousands):
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 28, 2014
 
September 29, 2013
 
September 28, 2014
 
September 29, 2013
Service cost
 
$
99

 
$
103

 
$
275

 
$
325

Interest cost
 
461

 
386

 
1,277

 
1,160

Amortization of gain
 
(8
)
 
—

 
(22
)
 
—

Net periodic benefit cost
 
$
552

 
$
489

 
$
1,530

 
$
1,485


Expected Future Benefit Payments—For 2014 Tribune Publishing expects to contribute $5.0 million to its other postretirement plans.
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION
On April 1, 2014, TCO's compensation committee, acting for TCO as Tribune Publishing's sole shareholder, approved the Tribune Publishing Company 2014 Omnibus Incentive Plan (“Tribune Publishing Equity Plan”), for the purpose of granting stock awards to directors, officers, and employees of Tribune Publishing. Stock awarded pursuant to the Tribune Publishing Equity Plan is limited to ten percent of Tribune Publishing common stock.
The Tribune Publishing Equity Plan provides for the granting of stock options, stock appreciation rights, restricted stock units (“RSU”), performance share units (“PSU”), restricted and unrestricted stock awards, dividend equivalents and cash awards. Pursuant to ASC Topic 718, “Compensation-Stock Compensation,” Tribune Publishing measures stock-based compensation costs on the grant date based on the estimated fair value of the award and recognizes compensation costs on a straight-line basis over the requisite service period for the entire award. The Tribune Publishing Equity Plan allows employees to surrender to Tribune Publishing shares of vested common stock upon vesting of their stock awards or at the time they exercise their stock options in lieu of their payment of the required withholdings for employee taxes. Tribune Publishing does not withhold taxes in excess of minimum required statutory requirements. Under the Tribune Publishing Equity Plan, the exercise price of a stock option award cannot be less than the market price of Tribune Publishing common stock at the time the stock option award is granted and the maximum contractual term cannot exceed 10 years.
In the period since the Distribution Date through September 28, 2014, 362,388 options and 556,379 RSUs were issued under the Tribune Publishing Equity Plan.
Prior to the Distribution Date, the Company's employees were eligible to participate in TCO's 2013 Equity Incentive Plan (“TCO Equity Incentive Plan”). The TCO Equity Incentive Plan provided for the granting of non-qualified stock options (“NSO”), RSUs, PSUs and restricted and unrestricted stock awards. Effective with the Distribution Date, 90,752 TCO options and 93,790 TCO RSUs were converted to 363,872 Tribune Publishing options and 375,780 Tribune Publishing RSUs, respectively. These awards were modified under the mandatory anti-dilution provision of the grants and no incremental cost was recorded.
Prior to the Distribution Date, stock-based compensation expense for participants in the TCO Equity Incentive Plan who are solely dedicated to Tribune Publishing has been included within selling, general and administrative expense within these consolidated and combined financial statements. Stock-based compensation expense for participants in the TCO Equity Incentive Plan who provide services to but are not solely dedicated to Tribune Publishing have been allocated to Tribune Publishing through the corporate management fee and technology service center support costs, as described in Note 4. In the three and nine months ended September 28, 2014, the Company was allocated $0.8 million and $4.9 million, respectively, of stock-based compensation expense through the corporate management fee and technology service center support costs. Stock-based compensation allocated to the Company was $0.8 million and $1.3 million in the three and nine months ended September 29, 2013, respectively.
Stock-based compensation expense under both plans consolidated and combined related to Tribune Publishing’s employees during the three and nine months ended September 28, 2014 totaled $0.9 million and $2.2 million, respectively. Stock-based compensation expense related to Tribune Publishing's employees totaled $0.3 million and $1.1 million for the three and nine months ended September 29, 2013, respectively.
As of September 28, 2014, Tribune Publishing had not yet recognized compensation cost related to options of $3.2 million on nonvested options with a weighted average remaining recognition period of 3.0 years. Additionally, as of September 28, 2014, Tribune Publishing had not yet recognized compensation cost related to RSUs of $13.9 million on nonvested awards with a weighted average remaining recognition period of 2.96 years.
EARNINGS PER SHARE
EARINGS PER SHARE
EARNINGS PER SHARE
Basic earnings (loss) per common share is calculated by dividing net income (loss) attributable to Tribune Publishing common stockholders by the weighted average number of shares of common stock outstanding. Diluted earnings (loss) per common share is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of common shares under equity-based compensation plans except where the inclusion of such common shares would have an anti-dilutive impact.
For the three and nine months ended September 28, 2014 and September 29, 2013, basic and diluted earnings per common share were as follows (in thousands, except per share amounts):
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 28, 2014
 
September 29, 2013
 
September 28, 2014
 
September 29, 2013
Income (loss) - Numerator:
 
 
 
 
 
 
 
 
Net income available to Tribune Publishing stockholders plus assumed conversions
 
$
(156
)
 
$
18,284

 
$
26,819

 
$
61,403

 
 
 
 
 
 
 
 
 
Shares - Denominator:
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding (basic)
 
25,430

 
25,424

 
25,426

 
25,424

Dilutive effect of employee stock options and RSUs
 
—

 
—

 
39

 
—

Adjusted weighted average shares outstanding
 
25,430

 
25,424

 
25,465

 
25,424

 
 
 
 
 
 
 
 
 
Net income per common share:
 
 
 
 
 
 
 
 
Basic
 
$
(0.01
)
 
$
0.72

 
$
1.05

 
$
2.42

Diluted
 
$
(0.01
)
 
$
0.72

 
$
1.05

 
$
2.42

Potential dilutive common shares were anti-dilutive as a result of the Company’s net loss for the three months ended September 28, 2014. As a result, basic weighted average shares were used in the calculations of basic net earnings per share and diluted earnings per share.
In calculating diluted EPS for the nine months ended September 28, 2014, the Company excluded common stock options for 311,199 shares and 514,090 RSUs because to include them would be anti-dilutive.
On August 4, 2014, approximately 25.4 million shares of the Company's common stock were distributed to TCO and TCO stockholders and warrantholders who held shares as of the record date of July 28, 2014. This share amount is being utilized for the calculation of both basic and diluted earnings per common share for all periods prior to the Distribution Date.
SUBSEQUENT EVENTS (Notes)
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
Dividends
On November 4, 2014, the Company declared a dividend of $0.175 cents per share on common stock outstanding, to be paid on December 10, 2014, to shareholders of record on November 19, 2014.
Acquisitions
On October 31, 2014, the Company executed an agreement to acquire six daily and 32 weekly suburban news and information brands from Wrapports, LLC for total purchase price of $23.5 million, net of certain working capital and other closing adjustments. The acquired publications - which include the Aurora Beacon-News, The Elgin Courier-News, the Lake County News-Sun, The Naperville Sun, the Post-Tribune in Northwest Indiana, The SouthtownStar and the 32 Pioneer Press weekly newspapers - will become part of the diversified portfolio of the Chicago Tribune Media Group (CTMG), which operates the Chicago Tribune, RedEye, Chicago magazine, Hoy and other Chicago-based media brands.
In addition to the six daily publications that will become part of Chicago Tribune Media Group, the 32 Pioneer Press weeklies include: Barrington Courier Review; Buffalo Grove Countryside; Deerfield Review; The Doings Clarendon Hills Edition; The Doings Hinsdale Edition; The Doings La Grange Edition; The Doings Oak Brook Edition; The Doings Weekly Edition; The Doings Western Springs Edition; Elmwood Park Elm Leaves; Evanston Review; River Forest Forest Leaves; Franklin Park Herald-Journal; Glencoe News; Glenview Announcements; Highland Park News; Lake Forester; Lake Zurich Courier; Libertyville Review; Lincolnshire Review; Lincolnwood Review; Morton Grove Champion; Mundelein Review; Niles Herald-Spectator; Norridge-Harwood Heights News; Northbrook Star; Oak Park Oak Leaves; Park Ridge Herald-Advocate; Skokie Review; Vernon Hills Review; Wilmette Life and Winnetka Talk.
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies)
Basis of Presentation 
Basis of Presentation—The accompanying unaudited consolidated and combined financial statements and notes of Tribune Publishing have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated and combined financial statements and accompanying notes. In the opinion of management, the financial statements contain all adjustments necessary to present fairly the financial position of Tribune Publishing as of September 28, 2014, the results of operations for the three months and nine months ended September 28, 2014 and September 29, 2013, the cash flows for the nine months ended September 28, 2014 and September 29, 2013 and the results of operations and cash flows for December 30, 2012 of the Predecessor (as defined below). Actual results could differ from these estimates. Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The December 29, 2013 consolidated and combined balance sheet date was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP and should be read in conjunction with Tribune Publishing’s audited consolidated and combined financial statements and related notes for the year ended December 29, 2013, included in the Company's registration statement on Form 10, as amended, filed with the SEC on July 21, 2014. Certain prior period amounts have been reclassified to conform to current year classifications.
The Company revised the presentation of capital expenditures in its consolidated and combined statements of cash flow to adjust for capital expenditures that were unpaid in accounts payable for the nine months ended September 29, 2013. The effect of correcting the presentation of capital expenditures for the nine months ended September 29, 2013 resulted in a $2.9 million increase in cash provided by operating activities and a corresponding $2.9 million increase in cash used for investing activities. The impact of this adjustment was evaluated by management and considered not material to the consolidated and combined financial statements for the nine months ended September 29, 2013 and as of September 29, 2013
Prior to the Distribution Date, separate financial statements were not prepared for Tribune Publishing. The accompanying consolidated and combined financial statements were derived from the historical accounting records of TCO and present Tribune Publishing’s consolidated and combined financial position, results of operations and cash flows as of and for the periods presented as if Tribune Publishing was a separate entity through the Distribution Date. Management believes that assumptions and methodologies underlying the allocation of general corporate expenses are reasonable. However, such expenses prior to the Distribution Date may not be indicative of the actual level of expense that would have been incurred had Tribune Publishing operated as a separate stand-alone entity, and, accordingly, may not necessarily reflect Tribune Publishing’s consolidated financial position, results of operations and cash flows had Tribune Publishing operated as a stand-alone entity during the periods presented. See Note 4 for further information on costs allocated from TCO. Subsequent to the Distribution Date, Tribune Publishing's financial statements are presented on a consolidated basis as the Company became a separate consolidated entity.
All intercompany accounts within Tribune Publishing have been eliminated in consolidation. For periods prior to the Distribution Date, all significant intercompany transactions between Tribune Publishing and TCO have been included within the consolidated and combined financial statements and are considered to be effectively settled through equity contributions or distributions or through cash payments at the time the transactions were recorded. The accumulated net effect of intercompany transactions between Tribune Publishing and TCO are included in the parent company investment component of Tribune Publishing equity. These intercompany transactions are further described in Note 4. The total net effect of these intercompany transactions prior to the Distribution Date are reflected in the consolidated and combined statements of cash flows as financing activities.
Prior to the Distribution Date, the costs of TCO services that are specifically identifiable to Tribune Publishing are included in these consolidated and combined financial statements. The costs of TCO services that are incurred by TCO but are not specifically identifiable to Tribune Publishing have been allocated to Tribune Publishing and included in the pre-spin consolidated and combined financial statements on a basis that management considered to be a reasonable reflection of the utilization of services provided or the benefit received by Tribune Publishing during the periods presented. While management considers these allocations to have been made on a reasonable basis, the allocations do not necessarily reflect the expenses that would have been incurred had Tribune Publishing operated as a stand-alone entity. All such costs and expenses are assumed to be settled with TCO through the parent company investment component of equity (deficit) in the period in which the costs were incurred. Current income taxes are also assumed to be settled with TCO through the parent company investment component of Tribune Publishing equity in the period the related income taxes were recorded.
As part of TCO emergence from bankruptcy, TCO consummated an internal restructuring, pursuant to and in accordance with the terms of the Plan (as defined and described in Note 2). These restructuring transactions included, among other things, establishing a number of real estate holding companies. On December 21, 2012, the majority of the land and buildings owned by Tribune Publishing were transferred to TCO’s newly established real estate holding companies.
In 2013, Tribune Publishing entered into related party lease agreements with the real estate holding companies to lease back certain land and buildings that were transferred. Although the properties subject to related party leases were legally transferred to the holding companies, Tribune Publishing determined that pursuant to the terms of the leases, it maintained forms of continuing involvement with the properties, which pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification™ (“ASC”) Topic 840, “Leases,” precluded Tribune Publishing from derecognizing those properties from its consolidated and combined financial statements. As a result, Tribune Publishing continued to account for and depreciate the carrying values of the transferred properties subject to related party leases which are presented within net property, plant and equipment in its consolidated and combined balance sheet. Rent payments under the related party leases were accounted for as dividends to TCO. See Note 4 for further information.
On December 1, 2013, Tribune Publishing modified the specific provisions within the related party leases to address the prohibited forms of continuing involvement. This resulted in Tribune Publishing derecognizing those properties by recording a $337.6 million reduction to net property, plant and equipment and a corresponding reduction to the net parent company investment component of equity in its consolidated and combined balance sheet. The related party leases subsequent to the lease modification on December 1, 2013 have been accounted for as operating leases. See Note 4 for further information.
The remainder of the transferred properties are no longer utilized in the operations of Tribune Publishing; therefore, Tribune Publishing did not enter into related party leases for those properties. Tribune Publishing entered into management agreements with the real estate holding companies pursuant to which it will manage those properties for an initial term of one year, cancelable by the real estate holding companies with a 30-day notice.
Tribune Publishing assesses its operating segments in accordance with ASC Topic 280, “Segment Reporting.” Tribune Publishing is managed by its chief operating decision maker, as defined by ASC Topic 280, as one business. Accordingly, the financial statements of Tribune Publishing are presented to reflect one reportable segment.
New Accounting Standards 
New Accounting Standards—In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) concerning revenue recognition. The new standard supersedes a majority of existing revenue recognition guidance under U.S. GAAP, and requires a company to recognize revenue when it transfers goods or services to a customer in an amount that reflects the consideration to which a company expects to be entitled. Companies may need to use more judgment and make more estimates while recognizing revenue, which could result in additional disclosures to the financial statements. ASU 2014-09 allows for either a “full retrospective” adoption or a “modified retrospective” adoption. The Company is currently evaluating which adoption method it will elect. The standard is effective for the Company in the first quarter 2017. Early adoption is not permitted. The Company is currently evaluating the revenue recognition impact this guidance will have once implemented.
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Tables)
Contribution from Former Parent
At the Distribution Date, the technology assets and liabilities contributed to Tribune Publishing are as follows (in thousands):
Accounts receivable
$
169

Prepaid expenses and other
4,756

Deferred income taxes, current
(47
)
Property plant and equipment
122,549

Accumulated depreciation
(31,387
)
Deferred income taxes
(21,449
)
Total assets
74,591

 
 
Current portion of long-term debt
411

Accounts payable
3,243

Employee compensation and benefits
5,061

Other current liabilities
(3,943
)
Long-term debt
411

Change in parent investement
69,408

Total liabilities and shareholders' equity
$
74,591

PROCEEDINGS UNDER CHAPTER 11 (Tables)
Reorganization Items, Consolidated Financial Statements 
Specifically identifiable reorganization provisions, adjustments and other costs directly related to Tribune Publishing have been included in the Successor’s consolidated and combined statement of comprehensive income for the three and nine months ended September 28, 2014 and September 29, 2013 and in the Predecessor’s consolidated and combined statements of income (loss) for December 31, 2012 and consisted of the following (in thousands):
 
 
Successor  
 
 
Predecessor
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
 
 
September 28, 2014
 
September 29, 2013
 
September 28, 2014
 
September 29, 2013
 
 
December 31, 2012
Reorganization costs, net:
 
 
 
 
 
 
 
 
 
 
 
Contract rejections and claim settlements
 
$
(205
)
 
$
187

 
$
(212
)
 
$
310

 
 
$
—

Other, net
 
—

 
(23
)
 
(2
)
 
(349
)
 
 
—

Total reorganization costs, net
 
(205
)
 
164

 
(214
)
 
(39
)
 
 
—

Reorganization adjustments, net
 
—

 
—

 
—

 
—

 
 
2,862,039

Fresh-start reporting adjustments, net
 
—

 
—

 
—

 
—

 
 
(107,486
)
Total reorganization items, net
 
$
(205
)
 
$
164

 
$
(214
)
 
$
(39
)
 
 
$
2,754,553

Schedule of Fresh-Start Adjustments 
The table below summarizes the Predecessor’s December 30, 2012 consolidated and combined balance sheet, the reorganization and fresh-start reporting adjustments that were made to that balance sheet as of December 31, 2012, and the resulting Successor’s unaudited consolidated and combined balance sheet as of December 31, 2012.
Consolidated and Combined Balance Sheets at December 30, 2012 and December 31, 2012
(In thousands)
 
 
December 30,
2012
 
Reorganization
Adjustments
 
 
Fresh-Start
Adjustments
 
 
December 31,
2012
Assets
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash
 
$
13,768

 
$
—

 
 
$
—

 
 
$
13,768

Accounts receivable, net
 
256,985

 
—

 
 
—

 
 
256,985

Inventories
 
12,537

 
—

 
 
5,810

(4)
 
18,347

Deferred income taxes
 
1,147

 
42,228

(1)(2)
 
(2,272
)
(4)
 
41,103

Prepaid expenses and other
 
14,733

 
—

 
 
(18
)
(4)
 
14,715

Total current assets
 
299,170

 
42,228

 
 
3,520

 
 
344,918

Properties
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment
 
1,938,208

 
—

 
 
(1,527,106
)
(4)
 
411,102

Accumulated depreciation
 
(1,322,830
)
 
—

 
 
1,322,830

(4)
 
—

Net properties
 
615,378

 
—

 
 
(204,276
)
 
 
411,102

Other Assets
 
 
 
 
 
 
 
 
 
 
Goodwill
 
—

 
—

 
 
15,331

(4)
 
15,331

Other intangible assets, net
 
28,911

 
—

 
 
37,976

(4)
 
66,887

Investments
 
3,986

 
—

 
 
—

 
 
3,986

Deferred income taxes
 
—

 
—

 
 
54,188

(4)
 
54,188

Other
 
3,787

 
—

 
 
(2,402
)
(4)
 
1,385

Total other assets
 
36,684

 
—

 
 
105,093

 
 
141,777

Total assets
 
$
951,232

 
$
42,228

 
 
$
(95,663
)
 
 
$
897,797

 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity (Deficit)
 
 
 
 
 
 
 
 
 
 
Current Liabilities
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
37,710

 
$
2,528

(1)(3)
 
$
—

(4)
 
$
40,238

Employee compensation and benefits
 
103,077

 
322

(1)(3)
 
—

 
 
103,399

Deferred revenue
 
66,835

 
—

 
 
(171
)
(4)
 
66,664

Other current liabilities
 
26,359

 
(879
)
(1)(3)
 
—

 
 
25,480

Total current liabilities
 
233,981

 
1,971

 
 
(171
)
 
 
235,781

Other Non-Current Liabilities
 
66,300

 
11,679

(1)(2)(3)
 
(16,192
)
(4)
 
61,787

Liabilities Subject to Compromise
 
2,865,890

 
(2,865,890
)
(1)(3)
 
—

 
 
—

Equity (Deficit)
 
(2,214,939
)
 
2,894,468

(1)
 
(79,300
)
(4)
 
600,229

Total liabilities and equity (deficit)
 
$
951,232

 
$
42,228

 
 
$
(95,663
)
 
 
$
897,797

 (1)
Reflects adjustments arising from implementation of the Plan, including the gain on the settlement of prepetition liabilities, distributions of cash by TCO on behalf of Reorganized Tribune Publishing and the elimination of Tribune Publishing’s equity (deficit). These adjustments also include the establishment of Reorganized Tribune Publishing’s equity based on the reorganization value of Reorganized Tribune Company allocated to the fair value of Reorganized Tribune Publishing’s tangible assets, finite-lived intangible assets and indefinite-lived intangible assets as of the Effective Date. The changes in the Predecessor’s capital structure arising from the implementation of the Plan is comprised of the following adjustments (in thousands):  
Liabilities subject to compromise on the Effective Date
 
$
2,865,890

Less: Liabilities assumed and reinstated on the Effective Date
 
(2,909
)
Less: Liabilities for prepetition claims to be settled subsequent to the Effective Date and other adjustments
 
(5,472
)
Liabilities subject to compromise settled on the Effective Date
 
$
2,857,509

 
 
 
Forgiveness of prepetition promissory notes held by parent
 
$
2,822,860

Cash distributions on settled claims paid by parent
 
34,649

Gain on settlement of liabilities subject to compromise
 
2,857,509

Plus: Other reorganization adjustments, net
 
4,530

Total reorganization adjustments before taxes
 
2,862,039

Plus: Income tax benefit on reorganization adjustments
 
32,429

Net reorganization gain after taxes
 
$
2,894,468


(2)
Reflects the conversion of Reorganized Tribune Company, including its qualified subchapter S subsidiaries, from a subchapter S corporation to a C corporation under the IRC.
(3)
Reflects the reclassification of certain liabilities from liabilities subject to compromise upon the assumption of certain executory contracts and unexpired leases.
(4)
The Predecessor’s consolidated and combined statement of comprehensive income for December 31, 2012 includes certain adjustments recorded as a result of the adoption of fresh-start reporting in accordance with ASC Topic 852 as of the Effective Date. These fresh-start reporting adjustments resulted in a net pretax loss which primarily resulted from adjusting the Predecessor’s recorded values for certain assets and liabilities to fair values in accordance with ASC Topic 805, and recording related adjustments to deferred income taxes. The fresh-start reporting adjustments included in the Predecessor’s statement of comprehensive income for December 31, 2012 consisted of the following items (in thousands):
 
Fair value adjustments to net properties
 
$
(204,276
)
Fair value adjustments to intangibles
 
37,431

Establish Successor’s goodwill
 
15,331

Elimination of accumulated other comprehensive income
 
33,598

Other fair value adjustments, net
 
10,430

Loss from fresh-start reporting adjustments before taxes
 
(107,486
)
Income tax benefit attributable to fair value adjustments
 
55,344

Net loss from fresh-start reporting adjustments after taxes
 
$
(52,142
)
CHANGES IN OPERATIONS (Tables)
Severance Accrual
A summary of the activity with respect to Tribune Publishing’s severance accrual for the nine months ended September 28, 2014 is as follows (in thousands):
Balance at December 29, 2013
 
$
9,336

Transferred from Tribune Media Company
 
647

Provision
 
1,853

Payments
 
(9,170
)
Balance at September 28, 2014
 
$
2,666

RELATED PARTY TRANSACTIONS WITH TRIBUNE AND AFFILIATES (Tables)
Schedule of Related Party Transactions
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 28, 2014
 
September 29, 2013
 
September 28, 2014
 
September 29, 2013
Corporate management fee
 
$
3,851

 
$
8,239

 
$
21,871

 
$
20,622

Allocated depreciation
 
1,731

 
4,836

 
11,707

 
12,482

Service center support costs
 
10,108

 
26,653

 
53,492

 
68,788

Other
 
192

 
2,045

 
3,427

 
5,330

Total
 
$
15,882

 
$
41,773

 
$
90,497

 
$
107,222

ACQUISITIONS (Tables)
Schedule of Acquisitions
Information for other acquisitions made in the nine months ended September 28, 2014 (excluding the Landmark Acquisition) is as follows (in thousands):
Fair value of assets acquired
 
$
11,292

Liabilities assumed
 
(800
)
Net assets acquired
 
10,492

  Less: fair value of non-cash and contingent consideration
 
(4,439
)
  Less: fair value of the preexisting equity interest in MCT
 
(2,752
)
Net cash paid
 
$
3,301

At the acquisition date, the purchase price assigned to the acquired assets and assumed liabilities is as follows (in thousands):
Consideration
 
 
Cash
 
$
28,983

Less: cash acquired
 
(2
)
Net Cash
 
$
28,981

 
 
 
Allocated Fair Value of Acquired Assets and Assumed Liabilities
 
 
Accounts receivable and other current assets
 
$
2,942

Property, plant and equipment
 
560

Intangible Assets subject to amortization:
 
 
  Trade names and trademarks (useful life of 20 years)
 
7,500

  Advertiser relationships (useful life of 12 years)
 
6,500

  Other customer relationships (useful life of 7 years)
 
2,500

Accounts payable and other current liabilities
 
(3,961
)
Total identifiable net assets
 
16,041

Goodwill
 
12,940

Total net assets acquired
 
$
28,981

INVENTORIES (Tables)
Schedule of Inventory
Inventories consisted of the following (in thousands):
 
 
September 28, 2014
 
December 29, 2013
Newsprint
 
$
14,951

 
$
13,831

Supplies and other
 
383

 
391

Total inventories
 
$
15,334

 
$
14,222

GOODWILL, OTHER INTANGIBLE ASSETS AND INTANGIBLE LIABILITIES (Tables)
Summary of Goodwill, Other Intangible Assets and Intangible Liabilities 
Goodwill, other intangible assets and intangible liabilities at September 28, 2014 and December 29, 2013 consisted of the following (in thousands):
 
 
September 28, 2014
 
 
December 29, 2013
 
 
Gross Amount
 
Accumulated Amortization
 
Net Amount
 
 
Gross Amount
 
Accumulated Amortization
 
Net Amount
Other intangible assets subject to amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
Subscribers (useful life of 2 to 10 years)
 
$
6,194

 
$
(1,758
)
 
$
4,436

 
 
$
3,694

 
$
(919
)
 
$
2,775

Advertiser relationships (useful life of 2 to 13 years)
 
21,166

 
(3,823
)
 
17,343

 
 
14,332

 
(2,032
)
 
12,300

Affiliate agreements (useful life of 4 years)
 
11,929

 
(5,219
)
 
6,710

 
 
11,929

 
(2,982
)
 
8,947

Trade names (useful life of 20 years)
 
7,500

 
(158
)
 
7,342

 
 
—

 
—

 
—

Other (useful life of 1 to 20 years)
 
5,307

 
(832
)
 
4,475

 
 
5,132

 
(472
)
 
4,660

Total
 
$
52,096

 
$
(11,790
)
 
$
40,306

 
 
$
35,087

 
$
(6,405
)
 
$
28,682

Goodwill and other intangible assets not subject to amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
 
 
 
 
35,404

 
 
 
 
 
 
15,331

Newspaper mastheads
 
 
 
 
 
31,800

 
 
 
 
 
 
31,800

Total goodwill and other intangible assets
 
 
 
 
 
$
107,510

 
 
 
 
 
 
$
75,813

Intangible liabilities subject to amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
Lease contract intangible liabilities
 
(545
)
 
330

 
(215
)
 
 
(545
)
 
218

 
(327
)
Total intangible liabilities subject to amortization
 
$
(545
)
 
$
330

 
$
(215
)
 
 
$
(545
)
 
$
218

 
$
(327
)
Schedule of Intangible Assets Subject to Amortization 
The changes in the carrying amounts of intangible assets subject to amortization during the nine months ended September 28, 2014 were as follows (in thousands):
Intangible assets subject to amortization
 
 
Balance at December 29, 2013
 
$
28,682

Acquisitions
 
17,009

Amortization
 
(5,385
)
Balance at September 28, 2014
 
$
40,306

Schedule of Intangible Assets Not Subject To Amortization 
The changes in the carrying amounts of intangible assets not subject to amortization and goodwill during the nine months ended September 28, 2014 were as follows (in thousands):
Other intangible assets not subject to amortization
 
 
Balance as of September 28, 2014 and December 29, 2013
 
$
31,800

 
 
 
Goodwill
 
 
Balance at December 29, 2013
 
$
15,331

Acquisitions
 
20,073

Balance at September 28, 2014
 
$
35,404

INVESTMENTS (Tables)
Equity Method Investments
Investments consisted of equity method investments totaling $2.7 million and $2.8 million at September 28, 2014 and December 29, 2013, respectively, in the following private companies:
 
 
% Owned
Company
 
September 28, 2014
 
December 29, 2013
CIPS Marketing Group, Inc.
 
50
%
 
50
%
Homefinder.com, LLC
 
33
%
 
33
%
Locality Labs, LLC
 
—

 
35
%
Contend, LLC
 
20
%
 
—

DEBT (Tables)
Schedule of Maturities of Long-term Debt
The Company's long-term debt maturities are as follows:
2014
$
—

2015
17,500

2016
17,500

2017
17,500

2018
17,500

2019
17,500

Thereafter
262,500

 
$
350,000

PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables)
Schedule of Net Periodic Benefit Cost
The components of net periodic benefit cost for Tribune Publishing were as follows (in thousands):
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 28, 2014
 
September 29, 2013
 
September 28, 2014
 
September 29, 2013
Service cost
 
$
99

 
$
103

 
$
275

 
$
325

Interest cost
 
461

 
386

 
1,277

 
1,160

Amortization of gain
 
(8
)
 
—

 
(22
)
 
—

Net periodic benefit cost
 
$
552

 
$
489

 
$
1,530

 
$
1,485

EARNINGS PER SHARE (Tables)
Schedule of Earnings Per Share
For the three and nine months ended September 28, 2014 and September 29, 2013, basic and diluted earnings per common share were as follows (in thousands, except per share amounts):
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 28, 2014
 
September 29, 2013
 
September 28, 2014
 
September 29, 2013
Income (loss) - Numerator:
 
 
 
 
 
 
 
 
Net income available to Tribune Publishing stockholders plus assumed conversions
 
$
(156
)
 
$
18,284

 
$
26,819

 
$
61,403

 
 
 
 
 
 
 
 
 
Shares - Denominator:
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding (basic)
 
25,430

 
25,424

 
25,426

 
25,424

Dilutive effect of employee stock options and RSUs
 
—

 
—

 
39

 
—

Adjusted weighted average shares outstanding
 
25,430

 
25,424

 
25,465

 
25,424

 
 
 
 
 
 
 
 
 
Net income per common share:
 
 
 
 
 
 
 
 
Basic
 
$
(0.01
)
 
$
0.72

 
$
1.05

 
$
2.42

Diluted
 
$
(0.01
)
 
$
0.72

 
$
1.05

 
$
2.42

Potential dilutive common shares were anti-dilutive as a result of the Company’s net loss for the three months ended September 28, 2014. As a result, basic weighted average shares were used in the calculations of basic net earnings per share and diluted earnings per share.
In calculating diluted EPS for the nine months ended September 28, 2014, the Company excluded common stock options for 311,199 shares and 514,090 RSUs because to include them would be anti-dilutive.
On August 4, 2014, approximately 25.4 million shares of the Company's common stock were distributed to TCO and TCO stockholders and warrantholders who held shares as of the record date of July 28, 2014. This share amount is being utilized for the calculation of both basic and diluted earnings per common share for all periods prior to the Distribution Date.
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Description of Business) (Details)
Sep. 28, 2014
Aug. 5, 2014
Dec. 29, 2013
Schedule of Equity Method Investments [Line Items]
 
 
 
Number of businesses in operations, daily titles
10 
 
 
Number of businesses in operations, digital properties
60 
 
 
Number of businesses in operations, verticals
150 
 
 
Equity interest acquired (percent)
50.00% 
 
 
CIPS Marketing Group, Inc.
 
 
 
Schedule of Equity Method Investments [Line Items]
 
 
 
Equity interest percentage
50.00% 
 
50.00% 
Homefinder.com, LLC
 
 
 
Schedule of Equity Method Investments [Line Items]
 
 
 
Equity interest percentage
33.00% 
 
33.00% 
Contend, LLC
 
 
 
Schedule of Equity Method Investments [Line Items]
 
 
 
Equity interest percentage
20.00% 
20.00% 
0.00% 
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Separation from Tribune Media Company and Basis of Presentation) (Details) (USD $)
9 Months Ended 9 Months Ended 0 Months Ended
Sep. 28, 2014
segment
Dec. 29, 2013
Sep. 29, 2013
Restatement Adjustment
Aug. 5, 2014
Tribune Media Company
Dec. 1, 2013
Real Estate Holding Companies
Dec. 1, 2013
Affiliated Entity
Jul. 28, 2014
Common Stock
Tribune Media Company
Aug. 4, 2014
Common Stock
Tribune Media Company
Jul. 28, 2014
Common Stock
Tribune Media Company
Jul. 28, 2014
Tribune Publishing
Jul. 28, 2014
Tribune Publishing
Tribune Media Company
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Outstanding shares distributed (percent)
 
 
 
 
 
 
 
98.50% 
 
 
 
Conversion ratio
 
 
 
 
 
 
0.25 
 
 
 
 
Issuance of stock in the Distribution (in shares)
25,439,000 
0 
 
 
 
 
 
 
 
25,042,263 
 
Common stock outstanding (shares)
25,439,000 
0 
 
 
 
 
 
 
 
 
381,354 
Percentage of outstanding share retained (percent)
 
 
 
 
 
 
 
 
1.50% 
 
 
Payments of dividends
 
 
 
$ 275,000,000 
 
 
 
 
 
 
 
Cash provided by operations
 
 
2,900,000 
 
 
 
 
 
 
 
 
Cash used for investing activities
 
 
2,900,000 
 
 
 
 
 
 
 
 
Net book value
 
 
 
 
 
$ 337,600,000 
 
 
 
 
 
Initial agreement term
 
 
 
 
1 year 
1 year 
 
 
 
 
 
Management agreement cancellation notice period
 
 
 
 
30 days 
30 days 
 
 
 
 
 
Number of operating segments
1 
 
 
 
 
 
 
 
 
 
 
Number of reporting segments
1 
 
 
 
 
 
 
 
 
 
 
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Technology Assets and Liabilities Contributed) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 28, 2014
Dec. 29, 2013
Aug. 4, 2014
Contribution of Nonmonetary Assets by Former Parent
Nonmonetary Transaction [Line Items]
 
 
 
Value of assets acquired
$ 160,238 
$ 67,928 
$ 91,200 
Accounts receivable, net
194,185 
251,636 
169 
Prepaid expenses and other
27,944 
13,570 
4,756 
Deferred income taxes
32,437 
37,371 
(47)
Property, plant and equipment
221,209 
83,901 
122,549 
Accumulated depreciation
(60,971)
(15,973)
(31,387)
Deferred income taxes
12,207 
39,587 
(21,449)
Total assets
651,613 
514,366 
74,591 
Current portion of long-term debt
13,536 
0 
411 
Accounts payable
59,377 
36,329 
3,243 
Employee compensation and benefits
102,122 
103,351 
5,061 
Other current liabilities
24,863 
20,866 
(3,943)
Long-term debt
333,863 
0 
411 
Change in parent investement
(16,931)
224,825 
69,408 
Total liabilities and shareholders equity (deficit)
$ 651,613 
$ 514,366 
$ 74,591 
PROCEEDINGS UNDER CHAPTER 11 (Details Textual) (USD $)
0 Months Ended 12 Months Ended 3 Months Ended 9 Months Ended
Dec. 8, 2008
subsidiary
Dec. 30, 2012
Dec. 30, 2012
Minimum
Dec. 30, 2012
Maximum
Dec. 30, 2012
Predecessor
Sep. 28, 2014
Successor
Sep. 29, 2013
Successor
Sep. 28, 2014
Successor
Sep. 29, 2013
Successor
Dec. 30, 2012
Successor
Reorganization [Line Items]
 
 
 
 
 
 
 
 
 
 
Direct and indirect wholly-owned subsidiaries
110 
 
 
 
 
 
 
 
 
 
Reorganization items, net
 
 
 
 
$ 2,754,553,000 
$ (205,000)
$ 164,000 
$ (214,000)
$ (39,000)
 
Other reorganization items, after taxes
 
 
 
 
2,842,000,000 
 
 
 
 
 
Reorganization adjustments, net
 
 
 
 
2,862,039,000 
0 
0 
0 
0 
 
Net reorganization adjustments, after taxes
 
 
 
 
2,894,000,000 
 
 
 
 
 
Fresh-start reporting adjustments, net
 
 
 
 
107,486,000 
0 
0 
0 
0 
 
Fresh-start reporting adjustments, net, after taxes
 
 
 
 
52,100,000 
 
 
 
 
 
Distributable value
 
7,372,000,000 
6,917,000,000 
7,826,000,000 
 
 
 
 
 
 
Equity value implied or reorganized entity
 
4,536,000,000 
 
 
 
 
 
 
 
 
New debt undertaken by reorganized entity
 
1,100,000,000 
 
 
 
 
 
 
 
 
Property, plant and equipment, fair value
 
 
 
 
 
 
 
 
 
411,100,000 
Fair value adjustments to intangibles
 
 
 
 
 
 
 
 
 
$ 38,000,000 
PROCEEDINGS UNDER CHAPTER 11 (Reorganization Items) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 28, 2014
Successor
Sep. 29, 2013
Successor
Sep. 28, 2014
Successor
Sep. 29, 2013
Successor
Dec. 30, 2012
Predecessor
Fresh-Start Adjustment [Line Items]
 
 
 
 
 
Contract rejections and claim settlements
$ (205)
$ 187 
$ (212)
$ 310 
$ 0 
Other, net
0 
(23)
(2)
(349)
0 
Total reorganization costs, net
(205)
164 
(214)
(39)
0 
Reorganization adjustments, net
0 
0 
0 
0 
2,862,039 
Fresh-start reporting adjustments, net
0 
0 
0 
0 
(107,486)
Total reorganization items, net
$ (205)
$ 164 
$ (214)
$ (39)
$ 2,754,553 
PROCEEDINGS UNDER CHAPTER 11 (Fresh-Start Balance Sheet) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 28, 2014
Dec. 29, 2013
Dec. 30, 2012
Reorganization Adjustments
Dec. 30, 2012
Fresh-Start Adjustments
Dec. 30, 2012
Predecessor
Dec. 25, 2011
Predecessor
Sep. 28, 2014
Successor
Dec. 29, 2013
Successor
Sep. 29, 2013
Successor
Dec. 30, 2012
Successor
Current assets
 
 
 
 
 
 
 
 
 
 
Cash
$ 59,647 
$ 9,694 
$ 0 
$ 0 
$ 13,768 
$ 13,768 
$ 59,647 
$ 9,694 
$ 9,557 
$ 13,768 
Accounts receivable, net
194,185 
251,636 
0 
0 
256,985 
 
 
 
 
256,985 
Inventories
15,334 
14,222 
0 
5,810 1
12,537 
 
 
 
 
18,347 
Deferred income taxes
32,437 
37,371 
42,228 2 3
(2,272)1
1,147 
 
 
 
 
41,103 
Prepaid expenses and other
27,944 
13,570 
0 
(18)1
14,733 
 
 
 
 
14,715 
Total current assets
329,547 
326,493 
42,228 
3,520 
299,170 
 
 
 
 
344,918 
Property, plant and equipment
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment
221,209 
83,901 
0 
(1,527,106)1
1,938,208 
 
 
 
 
411,102 
Accumulated depreciation
(60,971)
(15,973)
0 
1,322,830 1
(1,322,830)
 
 
 
 
0 
Property, plant and equipment, net
160,238 
67,928 
0 
(204,276)
615,378 
 
 
 
 
411,102 
Other Assets
 
 
 
 
 
 
 
 
 
 
Goodwill
35,404 
15,331 
0 
15,331 1
0 
 
 
 
 
15,331 
Intangible assets, net
72,106 
60,482 
0 
37,976 1
28,911 
 
 
 
 
66,887 
Investments
2,720 
2,799 
0 
0 
3,986 
 
 
 
 
3,986 
Deferred income taxes
12,207 
39,587 
0 
54,188 1
0 
 
 
 
 
54,188 
Debt issuance costs and other long-term assets
11,891 
1,746 
0 
(2,402)1
3,787 
 
 
 
 
1,385 
Total other assets
161,828 
119,945 
0 
105,093 
36,684 
 
 
 
 
141,777 
Total assets
651,613 
514,366 
42,228 
(95,663)
951,232 
 
 
 
 
897,797 
Current Liabilities
 
 
 
 
 
 
 
 
 
 
Accounts payable
59,377 
36,329 
2,528 3 4
0 1
37,710 
 
 
 
 
40,238 
Employee compensation and benefits
102,122 
103,351 
322 3 4
0 
103,077 
 
 
 
 
103,399 
Deferred revenue
78,090 
67,934 
0 
(171)1
66,835 
 
 
 
 
66,664 
Other current liabilities
24,863 
20,866 
(879)3 4
0 
26,359 
 
 
 
 
25,480 
Total current liabilities
277,988 
228,480 
1,971 
(171)
233,981 
 
 
 
 
235,781 
Other Non-Current Liabilities
10,071 
8,673 
11,679 2 3 4
(16,192)1
66,300 
 
 
 
 
61,787 
Liabilities Subject to Compromise
 
 
(2,865,890)3 4
0 
2,865,890 
 
 
 
 
0 
Total Equity
(16,931)
224,825 
2,894,468 3
(79,300)1
(2,214,939)
 
 
 
 
600,229 
Total liabilities and shareholders equity (deficit)
$ 651,613 
$ 514,366 
$ 42,228 
$ (95,663)
$ 951,232 
 
 
 
 
$ 897,797 
[1] The Predecessor’s consolidated and combined statement of comprehensive income for December 31, 2012 includes certain adjustments recorded as a result of the adoption of fresh-start reporting in accordance with ASC Topic 852 as of the Effective Date. These fresh-start reporting adjustments resulted in a net pretax loss which primarily resulted from adjusting the Predecessor’s recorded values for certain assets and liabilities to fair values in accordance with ASC Topic 805, and recording related adjustments to deferred income taxes. The fresh-start reporting adjustments included in the Predecessor’s statement of comprehensive income for December 31, 2012 consisted of the following items (in thousands): Fair value adjustments to net properties $(204,276)Fair value adjustments to intangibles 37,431Establish Successor’s goodwill 15,331Elimination of accumulated other comprehensive income 33,598Other fair value adjustments, net 10,430Loss from fresh-start reporting adjustments before taxes (107,486)Income tax benefit attributable to fair value adjustments 55,344Net loss from fresh-start reporting adjustments after taxes $(52,142)
[3] Reflects adjustments arising from implementation of the Plan, including the gain on the settlement of prepetition liabilities, distributions of cash by TCO on behalf of Reorganized Tribune Publishing and the elimination of Tribune Publishing’s equity (deficit). These adjustments also include the establishment of Reorganized Tribune Publishing’s equity based on the reorganization value of Reorganized Tribune Company allocated to the fair value of Reorganized Tribune Publishing’s tangible assets, finite-lived intangible assets and indefinite-lived intangible assets as of the Effective Date. The changes in the Predecessor’s capital structure arising from the implementation of the Plan is comprised of the following adjustments (in thousands): Liabilities subject to compromise on the Effective Date $2,865,890Less: Liabilities assumed and reinstated on the Effective Date (2,909)Less: Liabilities for prepetition claims to be settled subsequent to the Effective Date and other adjustments (5,472)Liabilities subject to compromise settled on the Effective Date $2,857,509 Forgiveness of prepetition promissory notes held by parent $2,822,860Cash distributions on settled claims paid by parent 34,649Gain on settlement of liabilities subject to compromise 2,857,509Plus: Other reorganization adjustments, net 4,530Total reorganization adjustments before taxes 2,862,039Plus: Income tax benefit on reorganization adjustments 32,429Net reorganization gain after taxes $2,894,468
PROCEEDINGS UNDER CHAPTER 11 (Changes in Capital Structure) (Details) (Predecessor, USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 30, 2012
Fresh-Start Adjustment [Line Items]
 
Forgiveness of prepetition promissory notes held by parent
$ 0 
Plus: Other reorganization adjustments, net
0 
Total reorganization adjustments before taxes
2,862,039 
Net reorganization gain after taxes
2,894,000 
Reorganization Adjustments
 
Fresh-Start Adjustment [Line Items]
 
Less: Liabilities assumed and reinstated on the Effective Date
(2,909)
Less: Liabilities for prepetition claims to be settled subsequent to the Effective Date and other adjustments
(5,472)
Liabilities subject to compromise settled on the Effective Date
2,857,509 
Forgiveness of prepetition promissory notes held by parent
2,822,860 
Cash distributions on settled claims paid by parent
34,649 
Gain on settlement of liabilities subject to compromise
2,857,509 
Plus: Other reorganization adjustments, net
4,530 
Total reorganization adjustments before taxes
2,862,039 
Plus: Income tax benefit on reorganization adjustments
32,429 
Net reorganization gain after taxes
$ 2,894,468 
PROCEEDINGS UNDER CHAPTER 11 (Changes to Comprehensive Income) (Details) (Predecessor, USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 30, 2012
Fresh-Start Adjustment [Line Items]
 
Loss from fresh-start reporting adjustments before taxes
$ (107,486)
Net loss from fresh-start reporting adjustments after taxes
(52,100)
Fresh-Start Adjustments
 
Fresh-Start Adjustment [Line Items]
 
Fair value adjustments to net properties
(204,276)
Fair value adjustments to intangibles
37,431 
Establish Successor’s goodwill
15,331 
Elimination of accumulated other comprehensive income
33,598 
Other fair value adjustments, net
10,430 
Loss from fresh-start reporting adjustments before taxes
(107,486)
Income tax benefit attributable to fair value adjustments
55,344 
Net loss from fresh-start reporting adjustments after taxes
$ (52,142)
CHANGES IN OPERATIONS (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 28, 2014
position
Sep. 29, 2013
position
Sep. 28, 2014
position
Sep. 29, 2013
position
Restructuring and Related Activities [Abstract]
 
 
 
 
Reductions in staffing levels in operations
20 
226 
218 
330 
Severance Accrual
 
 
 
 
Balance
 
 
$ 9,336 
 
Transferred from Tribune Media Company
 
 
647 
 
Provision
(400)
3,900 
1,853 
6,500 
Payments
 
 
(9,170)
 
Balance
$ 2,666 
 
$ 2,666 
 
RELATED PARTY TRANSACTIONS WITH TRIBUNE AND AFFILIATES (Details Textual) (USD $)
12 Months Ended 0 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 12 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Dec. 29, 2013
term
Sep. 28, 2014
Dec. 1, 2013
TCO
Sep. 28, 2014
TCO
Sep. 29, 2013
TCO
Sep. 28, 2014
TCO
Sep. 29, 2013
TCO
Dec. 21, 2012
TCO
Sep. 28, 2014
TCO
Transition Service Agreement
Sep. 28, 2014
TCO
Transition Service Agreement
Sep. 28, 2014
TCO
Lease Agreements
Sep. 29, 2013
TCO
Lease Agreements
Sep. 28, 2014
TCO
Lease Agreements
Sep. 29, 2013
TCO
Lease Agreements
Dec. 29, 2013
TCO
Lease Agreements
renewal_term
Dec. 21, 2012
TCO
Lease Agreements
Dec. 29, 2013
TCO
Lease Agreements
Minimum
Dec. 29, 2013
TCO
Lease Agreements
Maximum
Sep. 28, 2014
TCO
Medical And Workers' Compensation Benefit Plan
Sep. 29, 2013
TCO
Medical And Workers' Compensation Benefit Plan
Sep. 28, 2014
TCO
Medical And Workers' Compensation Benefit Plan
Sep. 29, 2013
TCO
Medical And Workers' Compensation Benefit Plan
Sep. 28, 2014
TCO
Pension Plan, Defined Benefit
Sep. 29, 2013
TCO
Pension Plan, Defined Benefit
Sep. 28, 2014
TCO
Pension Plan, Defined Benefit
Sep. 29, 2013
TCO
Pension Plan, Defined Benefit
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued expenses from TSA agreement
 
 
 
 
 
 
 
 
$ 900,000 
$ 900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued receivables from TSA agreement
 
 
 
 
 
 
 
 
1,200,000 
1,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service cost (credit)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,100,000 
12,500,000 
27,200,000 
36,800,000 
(2,100,000)
(6,200,000)
(12,500,000)
(17,800,000)
Employer contributions
 
 
 
1,300,000 
2,900,000 
7,300,000 
9,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying value of land and buildings
67,928,000 
160,238,000 
 
 
 
 
 
28,500,000 
 
 
 
 
 
 
 
294,500,000 
 
 
 
 
 
 
 
 
 
 
Number of lease agreement renewal terms
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 
 
 
 
 
 
 
 
 
 
 
 
Depreciation expense
 
 
 
 
 
 
 
 
 
 
 
1,200,000 
 
3,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
Reduction to net properties
 
 
337,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rent expense
 
 
 
 
 
 
 
 
 
 
$ 9,100,000 
 
$ 28,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Management agreement term
 
 
1 year 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Management agreement cancellation notice period
 
 
30 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lease period
5 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5 years 
10 years 
 
 
 
 
 
 
 
 
Renewal periods
2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RELATED PARTY TRANSACTIONS WITH TRIBUNE AND AFFILIATES (Schedule of Support Services and Other Amounts) (Details) (Affiliated Entity, USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 28, 2014
Sep. 29, 2013
Sep. 28, 2014
Sep. 29, 2013
Related Party Transaction [Line Items]
 
 
 
 
Selling, general and administrative expenses
$ 15,882 
$ 41,773 
$ 90,497 
$ 107,222 
Corporate management fee
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Selling, general and administrative expenses
3,851 
8,239 
21,871 
20,622 
Allocated depreciation
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Selling, general and administrative expenses
1,731 
4,836 
11,707 
12,482 
Service center support costs
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Selling, general and administrative expenses
10,108 
26,653 
53,492 
68,788 
Other
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Selling, general and administrative expenses
$ 192 
$ 2,045 
$ 3,427 
$ 5,330 
ACQUISITIONS (Details Textual) (USD $)
3 Months Ended 9 Months Ended 0 Months Ended 9 Months Ended 0 Months Ended 3 Months Ended
Sep. 29, 2013
business
Sep. 29, 2013
business
May 1, 2014
Landmark Acquisition
Sep. 28, 2014
Landmark Acquisition
Sep. 28, 2014
Landmark Acquisition
Trade names and trademarks
Sep. 28, 2014
Landmark Acquisition
Advertiser relationships
Sep. 28, 2014
Landmark Acquisition
Other customer relationships
May 7, 2014
McClatchy/Tribune Information Services
Sep. 28, 2014
McClatchy/Tribune Information Services
May 7, 2014
McClatchy/Tribune Information Services
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
Acquisitions, net of cash acquired
 
 
$ 28,981,000 
 
 
 
 
 
 
 
Transaction costs
 
 
 
400,000 
 
 
 
 
 
 
Gain on investment transaction
 
 
 
 
 
 
 
 
1,500,000 
 
Weighted average useful life of finite-lived intangibles
 
 
 
15 years 
20 years 
12 years 
7 years 
 
 
 
Weighted average useful life of finite-lived intangibles on a tax basis
 
 
 
15 years 
 
 
 
 
 
 
Number of businesses acquired
0 
0 
 
 
 
 
 
 
 
 
Equity interest acquired
 
 
 
 
 
 
 
 
 
50.00% 
Cash paid
 
 
28,983,000 
 
 
 
 
1,200,000 
 
 
Non-cash consideration for future services
 
 
 
 
 
 
 
(4,300,000)
 
 
Fair value of the preexisting equity interest
 
 
 
 
 
 
 
$ (2,800,000)
 
 
Equity interest in acquiree prior to acquisition
 
 
 
 
 
 
 
 
 
50.00% 
ACQUISITIONS (Purchase Price Assigned to Acquired Assets and Assumed Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 9 Months Ended
Sep. 28, 2014
Dec. 29, 2013
May 1, 2014
Landmark Acquisition
May 1, 2014
Landmark Acquisition
May 1, 2014
Landmark Acquisition
Trade names and trademarks
May 1, 2014
Landmark Acquisition
Advertiser relationships
May 1, 2014
Landmark Acquisition
Other customer relationships
Sep. 28, 2014
Other Acquisitions
Business Combination, Consideration Transferred [Abstract]
 
 
 
 
 
 
 
 
Cash
 
 
$ 28,983 
 
 
 
 
 
Less: cash acquired
 
 
 
(2)
 
 
 
 
Less: fair value of non-cash and contingent consideration
 
 
 
 
 
 
 
(4,439)
Less: fair value of the preexisting equity interest in MCT
 
 
 
 
 
 
 
(2,752)
Net Cash
 
 
28,981 
 
 
 
 
3,301 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
 
 
 
 
 
 
 
Accounts receivable and other current assets
 
 
 
2,942 
 
 
 
 
Property, plant and equipment
 
 
 
560 
 
 
 
 
Intangible Assets subject to amortization
 
 
 
 
7,500 
6,500 
2,500 
 
Accounts payable and other current liabilities
 
 
 
(3,961)
 
 
 
 
Fair value of assets acquired
 
 
 
 
 
 
 
11,292 
Liabilities assumed
 
 
 
 
 
 
 
(800)
Total identifiable net assets
 
 
 
16,041 
 
 
 
10,492 
Goodwill
35,404 
15,331 
 
12,940 
 
 
 
 
Total net assets acquired
 
 
 
$ 28,981 
 
 
 
 
INVENTORIES (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 28, 2014
Dec. 29, 2013
Inventory Disclosure [Abstract]
 
 
Newsprint
$ 14,951 
$ 13,831 
Supplies and other
383 
391 
Total inventories
$ 15,334 
$ 14,222 
GOODWILL, OTHER INTANGIBLE ASSETS AND INTANGIBLE LIABILITIES (Summary of Goodwill and Other Intangibles) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 28, 2014
Dec. 29, 2013
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Gross Amount
$ 52,096 
$ 35,087 
Accumulated Amortization
(11,790)
(6,405)
Net Amount
40,306 
28,682 
Goodwill
35,404 
15,331 
Newspaper mastheads
31,800 
31,800 
Total goodwill and other intangible assets
107,510 
75,813 
Intangible liabilities subject to amortization
 
 
Gross Amount
(545)
(545)
Accumulated Amortization
330 
218 
Net Amount
(215)
(327)
Subscribers
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Gross Amount
6,194 
3,694 
Accumulated Amortization
(1,758)
(919)
Net Amount
4,436 
2,775 
Subscribers |
Minimum
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Useful life
2 years 
 
Subscribers |
Maximum
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Useful life
10 years 
 
Advertiser relationships
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Gross Amount
21,166 
14,332 
Accumulated Amortization
(3,823)
(2,032)
Net Amount
17,343 
12,300 
Advertiser relationships |
Minimum
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Useful life
2 years 
 
Advertiser relationships |
Maximum
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Useful life
13 years 
 
Contracts
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Gross Amount
11,929 
11,929 
Accumulated Amortization
(5,219)
(2,982)
Net Amount
6,710 
8,947 
Useful life
4 years 
 
Trade names
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Gross Amount
7,500 
0 
Accumulated Amortization
(158)
0 
Net Amount
7,342 
0 
Useful life
20 years 
 
Other
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Gross Amount
5,307 
5,132 
Accumulated Amortization
(832)
(472)
Net Amount
$ 4,475 
$ 4,660 
Other |
Minimum
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Useful life
1 year 
 
Other |
Maximum
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Useful life
20 years 
 
GOODWILL, OTHER INTANGIBLE ASSETS AND INTANGIBLE LIABILITIES (Intangible Assets Subject to Amortization) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 28, 2014
Intangible assets subject to amortization
 
Beginning balance
$ 28,682 
Acquisitions
17,009 
Amortization
(5,385)
Ending balance
$ 40,306 
GOODWILL, OTHER INTANGIBLE ASSETS AND INTANGIBLE LIABILITIES (Intangible Assets Not Subject to Amortization) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 28, 2014
Dec. 29, 2013
Other intangible assets not subject to amortization
 
 
Indefinite-lived intangible assets
$ 31,800 
$ 31,800 
Goodwill
 
 
Beginning balance
15,331 
 
Acquisitions
20,073 
 
Ending balance
$ 35,404 
 
INVESTMENTS (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 0 Months Ended
Sep. 28, 2014
Sep. 29, 2013
Sep. 28, 2014
Sep. 29, 2013
Dec. 29, 2013
Sep. 28, 2014
CIPS Marketing Group, Inc.
Dec. 29, 2013
CIPS Marketing Group, Inc.
Sep. 28, 2014
Homefinder.com, LLC
Dec. 29, 2013
Homefinder.com, LLC
Sep. 28, 2014
Locality Labs, LLC
Dec. 29, 2013
Locality Labs, LLC
Aug. 5, 2014
Contend, LLC
Sep. 28, 2014
Contend, LLC
Aug. 5, 2014
Contend, LLC
Dec. 29, 2013
Contend, LLC
Sep. 28, 2014
McClatchy/Tribune Information Services
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investments
$ 2,720 
 
$ 2,720 
 
$ 2,799 
 
 
 
 
 
 
 
 
 
 
 
Equity method investment, ownership percentage
 
 
 
 
 
50.00% 
50.00% 
33.00% 
33.00% 
0.00% 
35.00% 
 
20.00% 
20.00% 
0.00% 
50.00% 
Amortization of contract intangible liabilities
200 
200 
800 
900 
 
 
 
 
 
 
 
 
 
 
 
 
Equity method investment, aggregate cost
 
 
 
 
 
 
 
 
 
 
 
$ 1,000 
 
 
 
 
DEBT (Senior Term Facility) (Details) (USD $)
0 Months Ended
Aug. 4, 2014
Sep. 28, 2014
Aug. 4, 2014
Letter of Credit
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Potential increase in borrowing capacity
 
 
$ 75,000,000 
Percent of eligible accounts receivable (percent)
85.00% 
 
 
Percent of aggregate commitments (percent)
10.00% 
 
 
Percent of the lower of cost and market value (percent)
70.00% 
 
 
Minimum amount outstanding without fixed charge coverage ratio
 
 
14,000,000 
Minimum percent of aggregate revolving commitment or borrowing base without fixed charge coverage ratio (percent)
10.00% 
 
 
Fixed charge coverage ratio
1.0 
 
 
Letter of Credit |
Alternate Base Rate
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Borrowing margin on variable rate (percent)
0.50% 
 
 
Letter of Credit |
LIBOR
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Borrowing margin on variable rate (percent)
1.50% 
 
 
Commitment fee (percent)
0.25% 
 
 
Senior ABL Facility
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Principal amount
140,000,000 
 
140,000,000 
Potential increase in borrowing capacity
15,000,000 
 
15,000,000 
Amount outstanding
 
19,300,000 
 
Letter of Credit
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Principal amount
30,000,000 
 
30,000,000 
Maximum borrowing capacity
50,000,000 
 
50,000,000 
Amount outstanding
 
27,500,000 
 
Senior Term Facility
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Principal amount
 
350,000,000.0 
350,000,000 
Weighted average interest rate
 
5.75% 
 
Fair value outstanding
 
346,500,000 
 
Unamortized balance of the discount
 
3,400,000 
3,500,000 
Potential increase in borrowing capacity
 
 
100,000,000 
Secured leverage ratio requirement
 
 
2 
Stated interest rate (percent)
 
 
1.25% 
Prepayment premium (percent)
1.00% 
 
 
Mandatory prepayment, net proceeds (percent)
100.00% 
 
 
Mandatory prepayment, net proceeds of the issuance of incurrence of indebtedness (percent)
100.00% 
 
 
Maximum available liquidity to avoid excess cash flow prepayment fee
$ 75,000,000 
 
 
Senior Term Facility |
Base Rate
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Variable interest rate basis (percent)
1.00% 
 
 
Borrowing margin on variable rate (percent)
4.75% 
 
 
Senior Term Facility |
Alternate Base Rate
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Borrowing margin on variable rate (percent)
3.75% 
 
 
Senior Term Facility |
Option One
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Mandatory prepayment, percent of annual excess cash flow (percent)
50.00% 
 
 
Senior Term Facility |
Option Two
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Secured leverage ratio requirement
 
 
1.25 
Mandatory prepayment, percent of annual excess cash flow (percent)
25.00% 
 
 
Senior Term Facility |
Option Three
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Secured leverage ratio requirement
 
 
0.75 
Mandatory prepayment, percent of annual excess cash flow (percent)
0.00% 
 
 
DEBT (Long-term Debt Maturities) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 28, 2014
Debt Disclosure [Abstract]
 
2014
$ 0 
2015
17,500 
2016
17,500 
2017
17,500 
2018
17,500 
2019
17,500 
Thereafter
262,500 
Long-term Debt
$ 350,000 
INCOME TAXES (Details) (USD $)
3 Months Ended 6 Months Ended 9 Months Ended
Sep. 28, 2014
Sep. 29, 2013
Jun. 29, 2014
Sep. 28, 2014
Sep. 29, 2013
Effective tax rate
147.60% 
31.80% 
42.10% 
42.80% 
40.20% 
Increase in tax expense
$ 300,000 
 
 
 
 
U.S. Federal Statutory Rate
35.00% 
 
 
35.00% 
 
Successor
 
 
 
 
 
Income tax expense (benefit)
$ 484,000 
$ 8,542,000 
 
$ 20,082,000 
$ 41,336,000 
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) (Other Postretirement Plans, USD $)
3 Months Ended 9 Months Ended
Sep. 28, 2014
Sep. 29, 2013
Sep. 28, 2014
Sep. 29, 2013
Other Postretirement Plans
 
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
 
Service cost
$ 99,000 
$ 103,000 
$ 275,000 
$ 325,000 
Interest cost
461,000 
386,000 
1,277,000 
1,160,000 
Amortization of gain
(8,000)
0 
(22,000)
0 
Net periodic benefit cost
552,000 
489,000 
1,530,000 
1,485,000 
Expected plan contribution
 
 
$ 5,000,000 
 
STOCK-BASED COMPENSATION (Details) (USD $)
In Millions, except Share data, unless otherwise specified
0 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 0 Months Ended 2 Months Ended 0 Months Ended 2 Months Ended 0 Months Ended
Apr. 1, 2013
Sep. 28, 2014
Sep. 29, 2013
Sep. 28, 2014
Sep. 29, 2013
Sep. 28, 2014
Stock-based compensation plan expenses
Sep. 29, 2013
Stock-based compensation plan expenses
Sep. 28, 2014
Stock-based compensation plan expenses
Sep. 29, 2013
Stock-based compensation plan expenses
Sep. 28, 2014
Option
Sep. 28, 2014
RSU
Aug. 4, 2014
Tribune Publishing
Option
Sep. 28, 2014
Tribune Publishing
Option
Aug. 4, 2014
Tribune Publishing
RSU
Sep. 28, 2014
Tribune Publishing
RSU
Aug. 4, 2014
TCO
Option
Aug. 4, 2014
TCO
RSU
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expiration period
 
 
 
10 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares issued
 
 
 
 
 
 
 
 
 
 
 
 
362,388 
 
556,379 
 
 
Shares converted
 
 
 
 
 
 
 
 
 
 
 
363,872 
 
375,780 
 
90,752 
93,790 
Percentage of outstanding common stock authorized for stock award plan
10.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation expense
 
$ 0.9 
$ 0.3 
$ 2.2 
$ 1.1 
$ 0.8 
$ 0.8 
$ 4.9 
$ 1.3 
 
 
 
 
 
 
 
 
Costs not yet recognized
 
 
 
 
 
 
 
 
 
$ 3.2 
$ 13.9 
 
 
 
 
 
 
Costs not yet recognized, period for recognition
 
 
 
 
 
 
 
 
 
3 years 0 months 15 days 
2 years 11 months 16 days 
 
 
 
 
 
 
EARNINGS PER SHARE (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended 0 Months Ended 9 Months Ended
Sep. 28, 2014
Successor
Sep. 29, 2013
Successor
Sep. 28, 2014
Successor
Sep. 29, 2013
Successor
Aug. 4, 2014
Tribune Publishing
Sep. 28, 2014
Tribune Publishing
Sep. 28, 2014
Option
Sep. 28, 2014
RSU
Income (loss) - Numerator:
 
 
 
 
 
 
 
 
Net income available to Tribune Publishing stockholders plus assumed conversions
$ (156)
$ 18,284 
$ 26,819 
$ 61,403 
 
 
 
 
Shares - Denominator:
 
 
 
 
 
 
 
 
Basic (in shares)
25,430,000 
25,424,000 
25,426,000 
25,424,000 
 
 
 
 
Dilutive effect of employee stock options and RSUs
0 
0 
39,000 
0 
 
 
 
 
Adjusted weighted average shares outstanding
25,430,000 
25,424,000 
25,465,000 
25,424,000 
 
 
 
 
Basic (in dollars per share)
$ (0.01)
$ 0.72 
$ 1.05 
$ 2.42 
 
 
 
 
Diluted (in dollars per share)
$ (0.01)
$ 0.72 
$ 1.05 
$ 2.42 
 
 
 
 
Antidilutive securities excluded from computation of EPS
 
 
 
 
 
 
311,199 
514,090 
Issuance of stock in the distribution (in shares)
 
 
 
 
25,400,000 
25,423,617 
 
 
SUBSEQUENT EVENTS (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
0 Months Ended
Sep. 28, 2014
brand
Oct. 31, 2014
Subsequent Event
Wrapports, LLC
Oct. 31, 2014
Subsequent Event
Wrapports, LLC
brand
Nov. 5, 2014
Subsequent Event
Common Stock
Subsequent Event [Line Items]
 
 
 
 
Dividends
 
 
 
$ 0.175 
Number of businesses in operations, daily titles
10 
 
6 
 
Number of businesses in operations, weekly titles
 
 
32 
 
Acquisitions, net of cash acquired
 
$ 23,500